How Corporate Health Care Is Destroying American Business and Devouring the Economy

Mingling among the doctors, nurses and activists at the single payer conferences in Chicago this weekend was one Richard Master.

Master is the owner and CEO of MCS Industries Inc., the nation’s leading supplier of wall and poster frames — a $200 million a year company based in Easton, Pennsylvania.

Master has just produced a movie — Fix It: Healthcare at the Tipping Point.

And he was in Chicago to show it to the single payer advocates gathered there attending two conferences — Physicians for a National Health Program annual meeting and the Single Payer Strategy Conference put on by nurses and other labor unions.

In a way, Master was a fish out of water — a businessman among activists.

But he had reached the same conclusion.

“My company now pays $1.5 million a year to provide access to healthcare for our workers and their dependents,” Master said. “When I investigated where all the money goes, I was shocked.”

What he found was that fully 33 cents of every health care premium dollar “has nothing to do with the delivery of healthcare.” Thirty-three percent of the healthcare budget was being spent on administrative costs.

That’s why he reached out to a couple of award winning filmmakers to produce Fix It — which makes the corporate case for scrapping the current multi-payer system for a single payer.

“I view the healthcare system as an existential threat to the economy of this country,” Master told Corporate Crime Reporter in an interview last week. “I think of this painting by Goya — Saturn Devouring His Son. The healthcare system is essentially devouring the rest of the economy whole.”

The movie features interviews with some of the nation’s leading health care experts, including Don Berwick, the former head of Medicare, and Ted Marmor, a professor of public policy at Yale.

“I came to realize that insurers comprise a completely unnecessary middleman that not only adds little if any value to our healthcare system, it adds enormous costs to it,” Master said.

“As a result of this waste and inefficiency, our total spending on health care soared above $3 trillion in 2014. More than 17 percent of our national GDP is now eaten up by health care costs, far more than any other country.”

The United States spends fully 30 percent to 35 percent of the healthcare budget on administration — that’s $1 trillion out of the $3 trillion heathcare budget on administration.

The Fix It movie makers visit Taiwan, which switched to a single payer system in 1995 — and found that just 1.6 percent of its total operating health care budget is spent on administration.

Master spent time in Canada, visiting doctors and nurses and conservative business executives, including Dann Konkin, president of a Canadian industrial screen printing company in British Columbia.

“I’m a member of the Conservative Party of Canada,” Konkin said. “We stand for removing waste, being more efficient and finding ways to grow our businesses. And one of the greatest ways that we can grow our business is to reduce costs, and that’s why we embrace the Canadian healthcare system. What I don’t understand is why my fellow conservatives in the United States tend to fight this.”

Konkin said that he decided against opening a facility in the United States after finding out how much he would have to pay to provide health insurance for his American workforce.

“If I had to increase my costs by over a million dollars in my company because of insurance coverage costs, that alone would probably drive me to bankruptcy,” Konkin said.

The movie recounts that several years ago, Michael Grimaldi, then president of General Motors of Canada told reporters that the Canadian healthcare system “significantly reduces total labor costs for automobile manufacturing firms.”

Back home, David Steil, a fellow Pennsylvania business owner and former Republican member of the state legislature for 16 years, told Master that “conservatives should be supportive of single payer because it costs less.”

“When they look at a single payer model, they will come quickly to the conclusion that it is the least expensive, the most supportive of a free market, and will have the most direct effect on the costs of their operation.”

Master is showing the movie to fellow businessmen and he says it’s having an impact.

“It is time we realize we don’t have to tolerate a system — a $3 trillion system — in which one of three dollars is wasted,” Master said. “A system in which just a few sick employees can take down a company. A system that starves the rest of our economy to the point that we don’t have enough money for our schools and roads. We can’t afford to wait any longer.”

[For the complete q/a format Interview with Richard Master, see 29 Corporate Crime Reporter 43(13), November 9, 2015, print edition only.]

Russell Mokhiber edits the Corporate Crime Reporter.

Musicians Struggle To Buy Insurance In A City That Thrives On Music

Kalu James moved to Austin, Texas, eight years ago, but bought health insurance for the first time this year. Twenty percent of the city's musicians live below the federal poverty line.

It looks like Kalu James is living the life as a musician. He's standing under a neon sign, ready to play guitar at Austin's famous Continental Club. And when he's not here, he's hustling to pay his bills. "Being a full-time musician means you have three other side jobs, you know?" he says. James moved to Austin about eight years ago and got health insurance for the first time this year. He pays $22 a month, after the $200 subsidy he gets through the Affordable Care Act. Even that is a lot, because he earns only $15,000 a year. He gets help paying his monthly premium through a local nonprofit.

"We still have to worry about counting the quarters and the pennies when we leave these venues," he says. Health insurance doesn't come easily.

Austin thrives on its reputation as the live music capital of the world and is making far more than quarters and pennies from music. The city estimates the commercial music industry pumps $1.6 billion into the local economy every year.

But Austin has a lot of people like James struggling to afford life here.

"A lot of people didn't understand just how dire that situation is," says Nikki Rowling, the founder and CEO of the Titan Music Group. "We have hard data that shows it."

The Titan Music Group recently conducted a large survey and several focus groups of musicians in Austin; it produced the Austin Music Census for the city. The census found that 20 percent of Austin musicians live below the federal poverty level. More than 50 percent qualify for federal housing subsidies, and nearly 19 percent lack health insurance.

A lot of Austin musicians rely on the Health Alliance for Austin Musicians for help.

"Close to 60 percent of our membership doesn't even qualify for the subsidies that are given through the Affordable Care Act," says Reenie Collins, the alliance's executive director. And Texas didn't expand Medicaid, which would have helped those musicians below the poverty line.

Her organization helps in two ways. This year, HAAM gave Kalu James and about 300 others money to afford their premiums for plans bought on the exchange. It also coordinates low-cost health care for about 2,000 members every year. It partners with doctors and hospitals to give these musicians medical, dental, vision, hearing and mental health care.

Backstage at the Moody Theater, dobro player Tom Caven is getting ready to go onstage.

"Travel anywhere in the United States," Caven says, "you tell them you're from Austin, [and] they almost always say, 'Austin City Limits,' you know? This is very much the identity. And if we lost that, we'd just be another up-and-coming city with no personality."

Caven is an executive at the Seton hospital network, an organization that partners with HAAM. He is also a physician and treated musicians in Austin for almost 20 years. Caven's band, The Stray Bullets, is performing at a local "battle of the bands" to raise money for HAAM.

"Some people feel like you just ought to work hard enough to have health insurance," he says. "But working in a safety-net hospital, like I do, you see people that come in. They're working really hard — working sometimes two and three jobs to support their family."

Dr. Tom Craven (second from right) plays dobro and guitar with The Stray Bullets. He also treated Austin musicians for 20 years and is now an executive at the Seton hospital network in the city.

Thanks to fundraisers and other private donations, HAAM's Collins plans to triple the number of musicians who will get help with their premiums next year. She's also a passionate advocate of Medicaid expansion, which would help many musicians in Austin.

"Many, many people think, 'Oh, HAAM's not needed anymore.' Well, that's not really true," she says, "because Texas did not expand Medicaid."

While more people have become insured since the rollout of the exchanges, Texas still has the highest uninsured rate in the country — about 17 percent.

This story is part of NPR's reporting partnership with local member stations andKaiser Health News.