Take Health Carre Out of the Private Sector, and Return It To The People

Resuscitating Health Care: The Case for Corporate Demise
Michael Kozart

The differences between Kerry and Bush may seem quite obvious on such touchstone issues as gay marriage, abortion, stem-cell research and the war on Iraq, and the presidential debates are providing millions of television viewers with an opportunity to appreciate stark contrasts in political philosophy and personal character between the two candidates. Yet, notwithstanding the important distinctions between the candidates, their similarities are just as salient. The similarities rise to the surface when one investigates how each candidate confronts one of the most oppressing social disasters of our time: the unavailability of health care for the American people.

Both candidates have no plan to halt the paradox of rising health care costs and diminished availability of care. At no time in our nation’s history have we had to pay so much for health care—yet received so little. The source of this paradox is unfettered corporate control over the health care sector, and the linkage of health care benefits to employers. Kerry and Bush believe that for-profit institutions, be they those that directly provide health care services, products and insurance plans, or those that purchase health care plans for their workers, can provide for an affordable and equitable system of health care. In truth, we have little evidence from history to suggest that this is so, and abundant evidence to justify a nationalized health care system that involves a single payer insurance plan for all Americans, strict caps on health care costs, and a once and for all severance between the institutions of profit (private employers) and the resources of necessity (health care for all).

Unfortunately, the reluctance of Bush and Kerry to reign in for-profit institutions betrays how deeply each candidate accepts the hegemony of corporate profiteering in American society, and how little choice the average voter has in the upcoming election. In truth, there is little choice at all when one considers the underlying message of each candidate’s platform: “Let the institutions of for-profit be. Policy changes should target the individual tax-payer, not the all powerful, tax-evading companies that regulate the production, cost, and distribution of vital human services.”
The scale of the health care crisis in the U.S. is daunting and well publicized. Nearly 44 million Americans lack health care, and that every minute at least 5 more Americans lose health insurance. Meanwhile health care costs are rising many times faster than real workers wages and the overall rate of inflation. There is no doubt that the problem is complex. Advances in medical science create new (and expensive) treatments for medical problems. Also, with the overall aging of the American population, we can expect the need for increased health care treatments and services for those who suffer conditions that accrue with advancing age. Still careful economic analysis reveals that wherever for-profit institutions influence the production or distribution of health care services, we suffer the dire consequences of rising costs and diminished availability of care. The following facts suggest that the current health care crisis is due to four broad issues: the siphoning of health care revenue into profits by private health care companies; the rising cost of medications; the inefficiency and redundancy of the private health insurance system; and the incentive of employers to restrict health care for workers. Consider the following:
*The most comprehensive study to date comparing for-profit and non-profit hospitals in the U.S.—a study reported by a team of Canadian physicians—revealed that for-profit hospitals charge an average 19% more for services than non-profit hospitals. (Canadian Medical Association Journal, June 7, 2004)
* Harvard Medical School professors recently calculated that if for-profit hospitals were converted to non-profit ownership, 6 billion dollars in health costs would have been saved in a single year without any compromise in the quality of care. (Cited by Physicians for a National Health Program—http://www.pnhp.org/news/2004/june)
*The cost of life saving prescription drugs is rising by more than 15% a year, more than five times the rate of inflation, and nearly 30% of all Americans recently failed to fill prescriptions because of the high cost of their medications. (Katharine Kreider, The Big Fix: How the Pharmaceutical Industry Rips Off Consumers, Perseus Books, 2003)
* Prior to 1992, all of the funding for the FDA (the government agency that regulates new medications approval) came from the U.S. treasury. With the passage of the industry backed Prescription Drug Users Fee Act in 1992, 70% of the money sponsoring drug approval research now comes from the pharmaceutical industry. With greater leverage over the approval process, the drug industry has been able to launch new medications favorable to their financial interests. Older medications that have gone off-patent (meaning that they can now be marketed more cheaply by competing drug companies) are now being substituted by newer medications (which come with a patent of exclusive production and marketing rights for a single company). From 1999 to 2000, U.S. spending on prescription drugs increased by 20.8 billion dollars, and nearly 60% of this increase was accounted for by the sale of only 23 new (on-patent) drugs, and 33% of the overall increase represented a shift from the use of lower-priced drugs to higher priced new drugs for standard medical conditions. (Jim Haddad, the San Francisco Medical Society newsletter, June/July 2002 and Thomas Bodenheumer, the Health Education Alliance for Life and Longevity newsletter, May 2000)
*In 2002 the pharmaceutical industry invested over 300 million dollars in public relations companies to pressure academic medical journals, physician practice groups, and patients to purchase new pharmaceutical products in the U.S. (Bob Burton and Andy Rowell, British Medical Journal, May 31, 2003)
*The system of private (for-profit) health insurance is enormously inefficient. Data reported in 2003 shows that the U.S. outspends all other nations in the amount of money allocated to the administration of health care insurance. Private insurance companies each have their own administrative and advertisement costs, which siphon away dollars that could be invested directly in the care of patients. (Steffie Woolhandler, New England Journal of Medicine, August 21, 2003)
* Private employers contribute nearly 20% of all health care costs. Employer health care costs will rise by 12% in this year alone. Employers, feeling the direct brunt of rising health insurance premiums, now exert political leverage to block expansion in health care services. Recently, the Big 3 automakers—Ford, Chrysler and GM—blocked the state of Michigan from developing two new hospitals in the Detroit suburbs, fearing that the expansion of available health care services would add greatly to their companies’ health care costs (Yves Engler, Z Magazine, April 2004).
These few facts suggest that the U.S. health crisis stems from private sector profiteering. Rising profit margins by private hospitals and insurance companies, the rising cost of medications (related to price inflation and direct marketing control by the pharmaceutical industry), the inefficiency and high administrative costs of the private insurance industry, and the drive by employers to lower the money they must pay for workers’ health needs, has led to the paradox of “paying more but getting less”. It deserves mention that the U.S. spends over 50% more per capita on health care than any other country, yet according to the World Health Organization, the U.S. ranks only 37th for overall health performance. A radical alternative to the present-day U.S. health system is called for. The American people should struggle for the following four changes:
1) A nationalized single payer health insurance system. In this system the government pays for all the health care that is delivered. This will immediately eliminate costly and redundant administrative overheads, and reduce the revenue to support multi-million dollar CEO salaries and stock dividends, and perhaps most importantly, it will represent a step to equalize health care delivery for all. This would imply tight regulations (if not outright banning) of the private health insurance industry.
2) The single payer health care system can be funded by an increase in taxes for individuals and employers. In this way, all companies will be required to pay the same amount for their employees’ health care needs. No company will be allowed to pay less than is mandated by law.
3) Compel for-profit hospitals to convert to non-profit status. This enables government regulation over an economy that permits investors to siphon valuable health care resources away for private gain.
4) Pharmaceutical research, development, and marketing must be strictly regulated by public oversight boards. Life saving medications and other forms of medical treatment must be considered property to be held in common. No one person or company should have the right to monopolize and unfairly bias the price and distribution of vital health care resources.
These are preliminary steps to overhaul of the sick U.S. health care system. Clearly much more work needs to be done to redress the inequities that lead particular communities and populations to be underserved—inequities grounded in the politics of racism, sexism, homophobia, and xenophobia. (A utopian vision of a just health care system—in my estimation—would involve the evolution towards self-help and self-sufficiency in local communities in the context of a nation-wide system for equitable resource distribution). Yet, sticking with these four main points, we can easily glean in both Kerry and Bush’s health care platforms a regressive approach to health care improvement that places undue burden on individual tax payers while providing no essential curbs on the private sector.
Kerry’s main approach to health care reform involves expanding existing public programs to provide more comprehensive coverage for children (up to the age of 18). Kerry also calls for tax credits to companies that provide health insurance, as well as tax credits to the unemployed and to early retirees who have not yet gained full eligibility for Medicare. This plan may provide health insurance for an additional 27 million Americans, but it relies upon a piece-meal system of public programs that fails to cover all Americans. Also there is little design for the overall reduction of unnecessary health care costs due to pharmaceutical industry greed, and there is no mechanism to require companies to provide health care for their workers. Finally, the system still relies heavily on what individuals can afford, which is quite varied in a society with as much economic inequality as our own.
If Kerry’s system is mediocre, Bush’s system is downright atrocious—little surprise from a president whose entire approach to national (and foreign) policy seems to be dictated by the interests of corporate leaders. Bush’s plan (which is really no plan at all) would call for developing individual Health Savings Accounts (really nothing more than a government sponsored personal savings account for health care needs), as well as expanding individual tax credits and deduction schemes to enable greater individual purchasing power for health care services. Nothing exists to curb the profit-drive inflation of health care insurance premiums or the cost of medications. At best, Bush’s scheme (which is more like a scam) would result in about 2.5 million more Americans receiving some sort of health care insurance.
Thus, in fairness, Kerry’s plan looks better than Bush’s, and yet in practice, it similarly avoids any redress of the for-profit machinations that govern the present day U.S. health care system. Arguably this reflects the leverage that corporate interests exert over the electoral process via campaign financing and lobbying. It also reflects the avoidance of any commitment to progressive social change by the two parties. In part, it may also reflect a massive state of denial: the U.S. is in such dire financial straits, that it may be downright impossible for either candidate to envision future government funding for health care. Over the next four years, the federal deficit will probably exceed $72 trillion, making it difficult to imagine a future role for expanding government funding over health care. Treasury Secretary Paul O’Neil recently commissioned a study to explore ways to close a fiscal gap of (merely) $44 trillion dollars. Among other things, the study recommended cutting Social Security and Medicare benefits by 45% forever. This would spell the end of public health care in the U.S.—forever. And yet, is it not possible that a vital restructuring of the national economy now, across all the major sectors, will lead to a meaningful reduction in the federal debt without compromising human services? After all, a major reason for the evolving nightmare of the U.S. fiscal crisis is Bush’s myopic cave-in to corporate interests—interests that influenced the rush to war in Iraq, and that have diverted billions upon billions of dollars into the cesspool of the military industrial complex, not to mention the corporate coffers of private health companies. If either candidate were willing to genuinely stand up to the influence of corporate profiteers, to institute meaningful campaign finance reform, we might have a chance to control the influence of for-profit interests over the economy.
In the meantime, all is not to despair. On the horizon of our California state legislature, there is a bill (SB 921) to provide for a publicly financed universal health care system that would cover every one in the state. The plan calls for a single entity (the State) to pay for all health care services. Funding for this payer would come from federal, state and county budgets, and it would also involve a state wide health tax that would be many times lower than the premiums that individuals and employers presently pay to private health insurance companies. With this system, the state could exert control over the entire structure of the health system by offering special incentives for providers to extend care to underserved populations. Also, as a single buyer of pharmaceutical products, the state would have greater purchasing power than private insurance companies to force the pharmaceutical industry to reduce the cost of medications. SB 921 has wide-spread support across the state and is gaining momentum in the state legislature, having received overwhelming support in the State Assembly Health Committee. Now the push must be to spread the word of SB among the voters, and to drum up grass-roots support to vanquish the expected opposition of the pharmaceutical and private insurance industry. In addition to SB 921, several propositions are being offered to enhance health cares services to the uninsured. While there is much to say about all these propositions, the one that stands out as the most progressive initiative to extend care to the uninsured is Proposition 63, the state wide mental health initiative, which would levy a one per-cent tax on all personal income earned in excess of one million dollars to expand mental health programs across the state.
The upcoming presidential election reflects the failure of health care reform at the national level, but SB 921 and Proposition 63 represents potential changes at the state level. Many progressive voters are understandably alienated by the two-party choice system. Yet real change can occur when we support local politicians who are committed to pressuring Sacramento to enact health reform legislation, and when we support grass roots initiatives to redistribute societal resources from the rich to those who are uninsured. And if California can change, so can the nation.