Merge Left

Paul Jay at The Real News Network:

A new book titled Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent begins its conclusion with the following. During the past four decades, sub-Saharan Africa has experienced a financial hemorrhage. We estimate that from the thirty-three countries for which we have data, capital flight between 1970 and 2008 amounted to $735 billion in 2008 currency. Including imputed interest earnings, the drain of resources amounted to $944 billion. These sums far surpass the same countries’ combined external debts, which stood at $177 billion in 2008. This means that sub-Saharan Africa is a net creditor to the rest of the world. If this is true, why are so many of Africa’s people so poor? The answer, of course, is that the subcontinent’s external assets are private and in the hands of a narrow and wealthy stratum of its population, whereas its external debts are public and therefore borne by the people as a whole through their governments. Our statistical estimates indicate that half or more of the money flowing into Africa as foreign loans exited in the same year as capital flight. Now joining us are the authors of the book: Professor Leonce Ndikumana, who teaches economics at the University of Massachusetts Amherst and is a research associate at the PERI institute, and Professor James K. Boyce, director of the Program on Development, Peace Building and Environment at PERI institute. Thank you both for joining us.

In Part 1, of this 3-part series, Boyce and Ndikumana argue that under international law, debts incurred by dictators should not be enforceable (14:34):

from the transcript:

PAUL JAY: So this is the beginning of what’s going to be a three-part series. In part one, we’re going to talk about the roots of this debt crisis in Africa. In the second part, we’re going to talk about the human costs of the crisis. And in the third part, we’re going to talk about solutions and just what the word “odious debt” refers to. So, Leonce, can you give us some background on what you mean by this odious debt, some of the historical roots of this debt? …

In Part 2, Léonce Ndikumana and James K. Boyce explain how the cost of servicing external odious debt leads to tragic underspending on health care and education (11:50):

from the transcript:

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. This is the second part of our series of interviews based on the book Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent. One of the things the book points out is that Africa spends more on servicing its external debt than it does on health care. …

And in Part 3, Léonce Ndikumana and James K. Boyce detail how international law supports Africa rejecting debts that did not benefit the people (18:04):

from the transcript:

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. This is the third and final part of our series of interviews based on the book Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent. In the first two parts of our interviews, we talked about the extent to which Africa’s debt was accumulated because IMF and World Bank and private banks made loans to dictators, kleptocracies, in the name of the Cold War and for the sake of the scramble for the riches of Africa, gave these loans knowing they would be, essentially, misused, not used for the benefit of the people of the countries that did the borrowing. So the question in this segment we’re asking: then why the heck should the people of these countries keep servicing these debts? And it turns out there is some international law that says maybe they shouldn’t be. …

In Part 1 of his 3-part ‘Real News’ interview, Gerald Friedman, a professor of economics at the University of Massachusetts in Amherst, explains how a single-payer plan in Maryland would cover everyone, improve outcomes and make business more competitive:

from the transcript:

PAUL JAY: So before we dig into some of your research, just sort of give us the bigger picture of why this would make sense for Maryland.

GERALD FRIEDMAN: Well, the big picture is that health insurance provided by competing private companies is inherently inefficient and destructive of people’s health. I mean, that’s a strong statement, but I think it is well founded.

The problem with private health insurance is that it’s not like selling shoes. If you’re a shoe company, you want to sell more shoes, you want to make a better quality shoe at a better price to attract more business. Health insurers don’t want more business. They want to get rid of sick people. Eighty percent of your costs as a health insurer are incurred for about 20 percent of your people. You know, in some places it’s 90-10—90 percent of your costs go to 10 percent of the people. If you can find those people, identify those people, and figure out a way to get them to go away, go to a different company, then you will be in a position to lower your prices and increase your profits. That is what health insurers try to do.

In Part 2, Gerald Friedman explains how a single-payer plan in Maryland would cover everyone, improve outcomes and make business more competitive:

from the transcript:

PAUL JAY: So let’s dig in into your study and what you found. So you have a section on savings, and point one is administrative costs. So explain what you found there.

GERALD FRIEDMAN: Okay. Well, first of all, there are the administrative costs of the health insurers themselves, who devote a great deal of energy and resources to, first, screening people and supervising what doctors do in order to drive away people who will need extensive care.

The average health insurer in Maryland has what they call a medical loss ratio of 85 percent. Now, the medical loss ratio is the proportion of health insurance premiums that are actually paid out to provide the health care. In Medicare, the medical loss ratio is 98 percent.

Wall Street doesn’t like high medical loss ratios. To them, to Wall Street, a high medical loss ratio means that you have too many sick people, you’re not running enough profit. They like the medical loss ratios to be low. We, the consumers of health care, normal people, we like a high medical loss ratio. We want the money we put into the insurance plan to be paid out in benefits.

And in Part 3, Gerald Friedman details how to pay for single payer health insurance:

from the transcript:

PAUL JAY: Alright. So in the last segment, we went through your report and we looked at the savings, which came to just over 24 percent over existing insurance coverage and health care expenditure. But that doesn’t cover everything, does it? And then so what isn’t paid for out of these cost savings, and how are you going to pay for it?

GERALD FRIEDMAN: Okay. Well, first of all, the cost savings are there. There are also extra expenses, as we were saying, with the Medicaid rate fix. Also, we would be covering everybody. Now 15 percent of the population of Maryland is currently without health insurance. Extend health insurance to them, they’re extra expenses. Also, the plan for the Maryland Health Security Act does away with copayments, deductibles, and all of those expenses. We expect that people would use health services more.

PS. Tonight’s ‘Bill Moyers & Company’ episode is an encore presentation of the ‘Luis Alberto Urrea’ episode.

Chad Terhune at the L.A. Times:

A Long Beach hospital charged Jo Ann Snyder $6,707 for a CT scan of her abdomen and pelvis after colon surgery. But because she had health insurance with Blue Shield of California, her share was much less: $2,336. Then Snyder tripped across one of the little-known secrets of healthcare: If she hadn’t used her insurance, her bill would have been even lower, just $1,054. “I couldn’t believe it,” said Snyder, a 57-year-old hair salon manager. “I was really upset that I got charged so much and Blue Shield allowed that. You expect them to work harder for you and negotiate a better deal.”

Unknown to most consumers, many hospitals and physicians offer steep discounts for cash-paying patients regardless of income. But there’s a catch: Typically you can get the lowest price only if you don’t use your health insurance. That disparity in pricing is coming under fire from people like Snyder, who say it’s unfair for patients who pay hefty insurance premiums and deductibles to be penalized with higher rates for treatment. The difference in price can be stunning. Los Alamitos Medical Center, for instance, lists a CT scan of the abdomen on a state website for $4,423. Blue Shield says its negotiated rate at the hospital is about $2,400. When The Times called for a cash price, the hospital said it was $250.

“It frustrates people because there’s no correlation between what things cost and what is charged,” said Paul Keckley, executive director of the Deloitte Center for Health Solutions, a research arm of the accounting firm. “It changes the game when healthcare’s secrets aren’t so secret.” Snyder’s experience is hardly unique. In addition to Los Alamitos, The Times contacted seven other hospitals across Southern California, and nearly all had similar disparities between what a patient would pay through an insurer and the cash price offered for a common CT, or computed tomography, scan, which provides a more detailed image than an X-ray.
…

I rolled my eyes when I read Mrs. Snyder’s comments. Not that I disagreed with her expectations about health-care costs. But Blue Shield and the rest in the AHIP cartel don’t care about the price American’s pay. They care how to make the most money they can and if that means screwing the public that’s what will happen.

A study from the Political Economy Research Institute (independent unit of the University of Massachusetts, Amherst) found that “$1 billion spent on each of the domestic spending priorities will create substantially more jobs within the U.S. economy than would the same $1 billion spent on the military.” The study shows that ” investments in clean energy, health care and education create a much larger number of jobs across all pay ranges, including mid-range jobs (paying between $32,000 and $64,000) and high-paying jobs (paying over $64,000). “The Real News Network’s Paul Jay interviewed Robert Pollin, one of the the study’s authors:

A copy of the study, PDF format, is at this link (abstract).

I was looking at Gallup’s Honesty and Ethical Standards polling (FDL),

, and a thought came to mind: shouldn’t the health-care policy in this country be better with such results (nurses at #1)?

From MedPage Today:

Enrolling patients in Medicaid increases their use of healthcare services, but doing so reduces financial strain on these impoverished patients and improves their sense of well-being, according to the first randomized study to compare the uninsured with the insured in the U.S.

In a novel program in Oregon, previously uninsured individuals chosen by lottery to be eligible for Medicaid experienced a 35% increase in their likelihood of having outpatient care, according to Amy Finkelstein, PhD, of the Massachusetts Institute of Technology, and colleagues.

Enrollees also had a 15% increase in prescription drug use and a 30% increase in hospital admissions, the researchers reported in a working paper published on the website of the National Bureau of Economic Research.

and this:

Being insured also was beneficial in alleviating financial strains.

For instance, participants were 25% less likely to have an outstanding medical bill sent to a collection agency — a finding that also benefits healthcare providers, according to the researchers — because most medical debts remain unpaid over the long term.

Other financial effects were a 35% decrease in the likelihood of patients’ incurring out-of-pocket expenses and a 40% decrease in the need to borrow money or avoid paying other bills for medical fees.

One more reason we need single payer, at the least as an alternative to private insurance and as a last resort for people who can’t get insurance. And one more reason to re-tax the wealthiest: surely improving the lives of the poor is at least as important as letting multi-millionaires on up have one more dollar. The difference between earning one dollar a year and earning a million a year is vast but the difference between earning ten million and fifty million is marginal.