U.S. Healthcare: The Free Choice to Suck

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http://www.alternet.org/story.html?StoryID=16271

 

U.S. Healthcare: The Free Choice to Suck

 

Christian Parenti, AlterNet

June 26, 2003

 

We have a health care system in shambles: 40 million uninsured, too many drugs

and procedures not covered by most health plans, medical staff overworked thanks

to pressure from bean-counting bureaucrats, and rising cost all around. Are free

market economics the solution or are they the problem?

 

The boosters of market mechanisms -- from the House ranks of the GOP, to their

allies at think-tanks like Cato, Heritage and Olin -- claim that the discipline

of the market create " efficiency, " " innovation " and " choice. "

 

On closer inspection, however, America's for-profit healthcare does not match up

with market myths about efficiency and service. Instead it is marked by cruelty,

lack of choice and massive corporate welfare.

 

Take healthcare corporations and insurance companies. Far from being " supple, "

" quality-oriented " and " intellect " organizations delivering better service at

ever lower prices, these behemoths are more accurately described as massive

for-profit bureaucracies offering shoddy care at inflated prices. When compared

to " socialized " healthcare systems, like those in Canada or Germany, Americans

pay twice as much per-capita in medical costs, roughly $4,000 per person.

 

The extra cash paid out by Americans goes for " overhead. " Private U.S. insurance

companies on average take 14 percent in administrative costs while public

healthcare systems like Medicare or the Canadian health systems spend only

around 2 percent of their income in this manner.

 

But it's not even accurate to describe the extra surcharge paid by Americans as

" overhead " -- that implies some productive use. In reality, much of the America

surcharge pays for bloated CEO salaries and boosting the value of medical

stocks.

 

As for salaries, consider the following: in 1999, C.A. Heimbold of Bristol

Myers-Squibb made $168 million; J.A. Stafford of Wyeth made $116.3 million;

while W.C. Steere of Pfeizer made a mere $28.8 million.

 

Stock prices and dividends are even more important. One industry analyst

recently described healthcare corporations as " islands of strength in otherwise

turbulent market waters. " For example, the common stock of Healthcare

Corporation of America has grown 25 percent in the last five years, massive

Aetna US Healthcare Incorporated has grown 69 percent since it started trading

three years ago, and HealthNet has grown by almost 65 percent in the same

period. Sierra Health Services, which " delivers innovative managed care benefit

plans " through a " family of companies " has surged by over 70 percent since '99.

 

" Who cares? " say the market radicals. You get what you pay for and thanks to the

rewards of free enterprise we get better care. Not so. Socialized or largely

socialized healthcare systems deliver better care for less money. Take Japan,

which has an infant mortality rate that is half that of the United States and a

life expectancy average 5.2 percent better, while paying only 44 percent of what

Americans pay. Similar conditions obtain in the Netherlands, New Zealand,

Germany and even Spain.

 

" Unfair comparison! " cry the pro-market ideologues. Our private system spends

mightily on research and development, creating miracle drugs which these other

systems take advantage of without paying full cost for. Nonsense.

 

In America, most pharmaceutical and medical research is paid for with government

money. During the 1990s the federal government spent over $10 billion annually

on pharmaceutical R & D. According to a major internal federal study (that only

saw the light of day when Ralph Nader's group Public Citizen forced its release

under the Freedom of Information Act), taxpayer-funded scientists conducted 85

percent of the research, tests and trials that created the top five drugs of

1995. Ulcer-treating Zantac and the anti-herpes drug Zovirax were among the

drugs created and tested almost entirely with grants from the National

Institutes of Health.

 

Given such lavish federal aid it is no surprise that Fortune routinely ranks the

pharmaceutical industry " more profitable than any other. " To the extent that

pharmaceutical firms do spend, they devote almost as much to advertising and

lobbying as to research. On average drug companies shell out $2 billion annually

on marketing.

 

The federal government also pays for the bulk of all scientific training that

creates the expertise that creates the famous drugs and medical procedures. In

short, the high-tech wonders of American medicine are the product of steady

government spending, not shrewd private investment.

 

In all honestly, we should view the high costs of American healthcare as a

massive private tax levied on workers and employers alike by the for-profit

medical bureaucracies. Creating a less expensive, government-funded,

single-payer healthcare system would liberate billions of dollars a year that

could stimulate consumption and investment throughout the economy.

 

Christian Parenti is currently a fellow at the University of Minnesota

Humanities Institute's Summer Think Tank.

 

 

 

© 2003 Independent Media Institute. All rights reserved.

 

 

 

 

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