A real revolution in the making in the U.S. health care industry
By Rodrigue Tremblay
Online Journal Guest Writer
Nov 25, 2009, 00:22
conservative goal has been the �Third Worldization� of the United States: an
increasingly underemployed, lower-wage work-force; a small but growing moneyed
class that pays almost no taxes; the privatization or elimination of human
services; the elimination of public education for low-income people; the easing
of restrictions against child labor; the exporting of industries and jobs to
low-wage, free-trade countries; the breaking of labor unions; and the
elimination of occupational safety and environmental controls and regulations.�
--Michael Parenti, progressive author and lecturer
�As to diseases, make a habit of two
things -- to help, or at least, to do no harm.� --Hippocrates
(460-277 b.c.), ancient Greek
�In a country well governed, povery is
something to be ashamed of. In a country badly governed, wealth is something to
be ashamed of.� --Confucius (551-479 b.c.), Chinese philosopher
Congress is presently debating a most important piece of legislation that would
profoundly reform the U.S. healthcare system.
This is without a doubt the most important domestic proposal advanced by the
To understand what is at stake here, one should know that in
the U.S. there are three industries that operate in a political and economic
environment such that they can literally write their own ticket: the tentacular
defense industry, the large financial and banking industry and the pivotal health industry. Together, these
industries account for more than 40 percent of the U.S. economy. Their common
characteristic is that suppliers can more or less create their own demand and
fix prices accordingly. The potential for gouging is enormous. Needless to say,
these industries are among the most profitable ones . . . for those who can
The health industry is particularly insulated from normal
market competition and from critical assessment by the consumer. The products
and services that the consumer requires are �prescribed� to him or to her. If
sick or requiring treatment, the consumer is in no position to argue and to
contest costs and prices. He is not even considered a consumer but a �patient�!
In a medical establishment, he is admitted, then �discharged�! Economists call
such a situation a price-inelastic demand. The supplier of the service is the
one who calls the shots. He decides the quantities to be administered and the
price to be charged. This is a cost-plus situation fraught with mostly
unregulated monopoly pricing practices.
This may partially explain why since 1970, American health costs have grown
at an average annual rate of 9.6 percent per year. That is
close to twice the pace of the increase of the overall economy. For example in
2010, health costs in the U.S. are expected to increase four times faster than
the annual increase in the average hourly wage of American workers. This is
clearly unsustainable, less it bankrupts the entire U.S. economy.
Since medical treatment is in many cases not a choice but a
necessity, people have very little leeway in economizing on such consumption
within their normal budget constraints. If one requires urgent treatment, one
must willy-nilly enter the medical system and pay to the hilt. An example
observed recently would illustrate the fundamentals. A friend visiting Florida
recently had a case of severe indigestion during the night. He was driven to
the emergency room of a local hospital, where he spent two hours. The total
cost was in excess of $3,000, half of it for simply crossing the door of the ER
room and the rest for two simple blood and urine tests. Maybe Walmart should
take over the administration of U.S. hospitals!
To protect against unforeseen medical outlays that can
seriously perturb their financial position, most people rely on one form or
another of health
insurance. This could be private insurance, group coverage insurance,
cooperative insurance or collective or public insurance.
For example, members of Congress are covered by a public
health insurance plan. Military personnel and military veterans are insured
through a public plan, either through the U.S. Department of Defense Military Health System or through the Veterans Health Administration (VHA).
Americans who are over 65 years old are covered by a public single-payer health care system, called Medicare. Such a public American health program has been in existence
since 1966. This is a large public health plan that presently covers more than
43 million Americans. It now provides comprehensive hospital, medical and drug
coverage for those lucky enough to qualify because of age and residency.
For the population at large, individuals or families can be
privately insured, underinsured or less than fully insured for medical costs
they might incur, or, for some 15 percent of Americans, not insured at all
(45.7 million people in 2007). Private health insurance companies routinely
deny insurance coverage for people who have pre-existing health conditions. It
has been estimated that the total number of people in the United States who die
because of lack of medical care is about 100,000 per year.
One can, therefore, understand why the issue of
comprehensive health care insurance is so politically contentious in the United
States. Those who are already covered by a generous public health care program
-- by such public programs such as Medicare, i.e. the insiders, possibly a
third of the U.S. population -- do not see an urgent need to change a situation
that benefits them. Those who rake in tremendous profits in the private health
industry are also fighting to maintain their privileged position. Being already
covered, they are less persuaded that there is such a thing as a fundamental right to health care.
The victims, the outsiders whose health insurance is tied to
their job or who are not covered at all, do not have the same political clout or
the same access that the insiders have to the media or to members of Congress.
Generally speaking, the Republican Party and its allies in the far right media
side with the insiders, and vigorously oppose most attempts for health care reform and an
extension of their privileged position to others. Generally speaking again, the
Democratic Party and its progressive allies tend to side with the outsiders and
have been pushing for reform for many years.
Ethically speaking, it is generally accepted that those who
benefit the most from random natural endowments or from the working of the
social and economic system have a moral obligation and an inescapable
responsibility to share their good fortune with the less lucky or the less
fortunate among us. Naked egoism is the antithesis of modern humanist morality.
As to the political tug-of-war being played in the U.S.
around health care reform, it is too early to know the final result, but it
surely will have major consequences.
Rodrigue Tremblay is
professor emeritus of economics at the University of Montreal and can be
reached at rodrigue.tremblay@
yahoo.com. He is the author of the book �The
New American Empire.�
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