when at first we succeed to deceive.

From the NY Times, Waxman Takes on Drug Makers Over Medicare:

In 2003, when the Part D drug program was being planned as part of a Congressional overhaul of Medicare, Republicans insisted that the program be administered by private insurers and that the government be precluded from negotiating prices.

Stephen Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota who had conducted research for the government and industry, said that in 2003 many in Congress argued that private insurers would be more than capable of negotiating discounts with drug makers.

“That didn’t pan out,” Dr. Schondelmeyer said. The dozens of insurers involved, competing among themselves, simply do not have the government’s negotiating clout. While Medicaid is able to obtain rebates of up to 35 percent from drug makers, the Medicare drug rebates have been less than 15 percent, he said.

Of course those mythical savings didn’t “pan out”, and the reason why there were no savings is very simple to understand.

Premiums that are paid to various insurance schemes companies aren’t collected and stashed inside a warehouse full of mattresses. The cash that you or I send in is either handed over by the ton to the executives and the uber wealthy investor class (and in comparatively sub-atomic amounts to lesser employees and mom ‘n pop retirement account investors) or invested in … get ready for it … THE STOCK MARKET AND VARIOUS FINANCIAL INSTRUMENTS! (insert gasp of sudden realization here)

As long as an end result of higher returns for those executives and the uber wealthy investor class is the paramount concern then that’s where the attention will be paid.

So if I’m the ABCD Insurance Co, and I’m willing to have my success judged by return on investment and I can keep my investment in BigPharma, Inc giving me large returns on investment by not making BigPharma reduce their profits … why I’m gonna do it!

I’m gonna do it because I’m supposed to look out for investors first and those needing medical care second … and besides … the guvmint is payin’ me what I, as ABCD Insurance Co, need to pass on to BigPharma (which I’ve invested so much in) so my return on investment balance sheet will look awfully good … and if I’m the CEO of ABCD, I’m gonna reap huge financial windfalls along with my buddies in the uber wealthy investor class.

And why wouldn’t ABCD invest heavily in BigPharama when ABCD can wield so much influence in the profitability of BigPharam?

(We’re not even touching the massive bailout that these insurance companies received from the huge Wall Street bailouts of the cheney/bush and Obama administrations.)

And this is all part of why our for-profit health insurance paradigm should go away … we’re using money that should be spent on medical or health care instead on further enriching the already rich.

And when they start to fail because of excessive risk taking … why … we’ll just bail ‘me out again.

It is no accident those savings didn’t “pan out”. They were never really meant to.