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from Libertarian Labor Review #16
Winter 1994, pages 10-14
The Health Care Crisis
No country in the world spends as much on health care as the
United States, or gets as little for its money. In 1992, fully 14
percent of U.S. Gross Domestic Product (about $2,700 per person per
year--though by no means do all people receive health care) was
spent on health care, and yet a recent study of seven
industrialized countries found the U.S. dead last in basic health
indicators. We have fewer doctors per capita, higher infant
mortality, and shorter lives. And nearly 100 million people went
without any health insurance for part or all of the year. Surveys
find that people are quite worried about their access to health
care--two-thirds fear they couldn't afford long-term care, and
almost half worry that they couldn't finance a major illness. The
crisis is particularly severe for the unemployed and for those in
low-paying jobs--precisely those in the worst position to cover
medical expenses, and the most likely to get ill.
The costs of operating this for-profit health system are
rising sharply, far ahead of the inflation rate. Much of this
spending does not go into treatment--about one out of eight dollars
spent by the health insurance companies goes to administrative
costs, nearly ten times what it costs Canada's nationalized system
(the world's second most expensive) for paperwork. U.S. doctors are
better paid than their counterparts in other countries, drug costs
are higher, and insurance and hospital profits are soaring. Only
people's health lags behind.
As costs rise, insurance companies get pickier about whom
they'll cover, and make workers pay a growing share of health care
costs through higher deductibles, rising premiums, co-payments, and
reduced coverage. Insurers avoid entire industries as too risky,
and refuse to insure people who get sick. Similarly, HMOs avoid
rural areas and economically depressed inner cities where it is
more expensive to provide care and where people are more likely to
need medical treatment. And growing numbers of employers reserve
the right to cancel workers' health insurance if their treatment
gets too expensive (or threatens to).
The health care industry has proven incapable of providing
even basic medical services to most people, but it has been one of
the few economic sectors to create new jobs even during the current
recession. The health business added 3 million new jobs between
1980 and 1991, according to the November 1992 Monthly Labor Review,
and health care wages grew at 6 times the national average (though
this is in part the result of low-paid service workers unionizing
and demanding a living wage). Employment in health insurance
offices led the pack as thousands of auditors and other paper
pushers were hired in a desperate attempt to take charge of
escalating costs by close monitoring of health care providers.
Capitalism Cannot Work
Even the capitalists are forced to admit that the healthcare
marketplace simply does not work. As corporations have found
themselves paying ever-escalating insurance premiums, the country's
largest corporations have joined the call for health care reform.
A front-page article in the New York Times termed health care an
"economic outlaw," because medical insurance served to insulate
consumers from rising costs. "Americans have every incentive to
seek additional medical care, even if the benefit they stand to
gain is modest compared with the total cost..." (The extent to
which this is true is quite limited. Not only are many people
excluded from health care because they have inadequate or no
coverage, but for several years employers have been pushing an
ever-increasing share of expenses onto workers.) Nor does the
alleged "invisible hand of the market" function--sick people are in
no position to shop around for a better deal and rarely have the
expertise to evaluate the quality or necessity of their
treatment.
Indeed, capitalism inexorably lead to higher costs. Doctors
and hospitals create their own demand for services: the more
hospital beds there are in a community, the more doctors put
patients in hospitals and the longer hospitals keep them there; the
more surgeons in a community, the more operations are performed to
support them. One study found that doctors who perform their own
radiological tests prescribe such tests at least four times as
often and charge higher fees than did doctors who referred patients
to radiologists. Drug companies charge high prices for prescription
drugs to finance costly advertising campaigns to persuade doctors
to prescribe their brand-name drugs rather than cheaper generic
equivalents. Hospitals buy the latest equipment, regardless of
whether it's needed, simply to keep up with the competition--and
then charge high prices to make up for the fact that it is hardly
ever used. And as hospital admissions decline and average hospital
stays shortened, the number of employees on hospital payrolls
(largely administrators and book-keepers) soared. Between 1970 and
1989 the number of health care administrators in the U.S. increased
nearly six-fold, while growing numbers of hospital beds lie empty.
As doctors David Himmelstein and Steffie Woolhandler note, "It
apparently takes substantial administrative effort to keep sick
patients out of empty hospital beds."
The Times finds this outrageous, and for good reason (it makes
the health coverage they provide their workers more expensive). But
the most serious problem with market-based health care entirely
escapes their notice: under our capitalist health care system many
workers, and indeed entire communities, do not receive basic health
care services. Hospitals (including ostensibly non-profit ones)
refuse to treat patients who don't have health insurance or well-
paid jobs. About 300,000 people are refused care each year at
hospital emergency rooms because they are uninsured or inadequately
insured; if their lives are in immediate danger they are patched up
and shipped to often overcrowded private hospitals. And many people
go without necessary medicine because they cannot afford to pay for
it. The U.S. has the highest infant mortality rate of any
industrialized society (even developing countries such as Singapore
do better), and both men and women die at younger ages than do our
fellow workers in many other countries. Quite simply, thousands
of our fellow workers suffer and die each year because of the
capitalist health care industry and its profit motive.
Managed Care No Solution
Clinton's health care reform plan begins with the basic
assumption that Americans are overinsured, and thus focuses on
creating incentives to force us to be more cost-conscious health
care consumers. Managed competition might (depending on how tight-
fisted the government proves) end up saving money over the long run
(in the short run it means higher costs and higher profits for the
insurance industry), but only at the expense of people's health.
Clinton proposes phasing in "universal" health care over the next
four years (undocumented workers would not be covered--apparently
they will be left to die in the streets). But this "universal" plan
would offer only the most minimal coverage--co-payments of as much
of $25 per visit would discourage many people from seeing doctors,
and Medicaid and Medicare benefits would be slashed. Himmelstein
and Woolhandler describe the Clinton plan as one designed to make
insurance companies the feudal lords of American medicine,
"push[ing] all but the wealthy into a few cut-rate HMOs, owned by
insurance giants such as Prudential. Since only the wealthy could
afford higher cost plans, Managed Competition would ratify a system
of care stratified along class lines, separate and unequal."
Instead of reducing bureaucracy and administration (overhead
accounts for about 14 percent of U.S. health care costs), Clinton's
plan would add new layers to the bureaucracy, while transferring
Medicaid recipients from the relatively efficient (3.5% overhead)
public sector to inefficient private businesses. Newly created
regional health alliances would collect premiums, while a new
National Health Board would establish an overall health budget and
regulate premium levels. Workers would be required to pay income
taxes on the value of any health care benefits that exceed the
government's minimal package (mental health, vision and dental
coverage, for example). And patients would have to pay extra if
they wanted to choose their own doctor.
Pilot managed care programs demonstrate that quality health
care is the last thing on the government's mind. Typically, these
systems operate under a fixed price scheme in which health care
providers get the same money whether or not they provide any
services. Some go further, paying more to doctors who spend less.
This is supposed to discourage unnecessary expense, but it is at
least as likely to discourage necessary health care. When the
Pentagon tested a managed care system on military families in
Virginia, it didn't bother to monitor the quality of care being
offered. But it definitely saved money.
Similarly, the federal government has been encouraging
Medicare patients to sign up with health maintenance organizations
(HMOs). Since HMOs provide and pay for medical services directly
(unlike insurance companies, which get billed after the fact), they
have a clear incentive to provide as little service as possible. A
study of New York City HMOs found that several did not keep
adequate patient records, showed little interest in monitoring
patient histories, spent huge amounts and marketing and advertising
that could go to care, and provided little concrete information to
patients. A 1990 General Accounting Office survey of care provided
to Medicaid recipients by Chicago-area HMOs found that required
preventive care was not provided to children, and worried that
incentive payments to cost-cutting doctors encouraged them to delay
and deny care.
Managed Care schemes cut costs in part through hard bargaining
to hold down doctor and hospital payments. HMOs skimp on doctors,
having them handle nearly twice as many patients as do doctors in
private practice, generally leading to long waits for rushed
consultations. But their centerpiece is the requirement that
doctor's visits and medical treatment be preapproved. HMOs refuse
to authorize what they considers unnecessary or inefficient
practices. For example, one HMO cut a patient's psychotherapy
benefits because the patient refused to take the mood altering drug
Prozac. Giving people drugs instead of treatment is certainly
cheaper, but is cost the primary basis upon which these decisions
should be made?
As the Left Business Observer concludes, "Providers under the
whip of profit maximization will skimp on care to fatten profits...
In health care, the market kills." But for all their skimping on
actual health care, HMO premiums have been rising even faster than
for the medical system as a whole--even without taking into account
increased co-payments and other hidden costs.
Business Unions Capitulate
The Clinton proposal has been roundly condemned by consumer
groups and the health care reform movement as a placebo at best,
and at worst a mechanism for sucking an ever-increasing share of
our wealth into the pockets of the health care profiteers. An
editorial in The Progressive, for example, praised the Clintons'
sympathetic manner but concluded that their plescription could not
solve the underlying problem:
Why won't it work? Because it deliberately and decisively
refuses to deal with the root cause of all the ailments
so admirably described by the Clintons: the fact that the
health-care system in the United States is market-
oriented and profit-driven. At every level and in every
aspect, health care in our country is provided on the
basis of someone's ability to turn a buck...
In recent years unions have been one of the leading forces in
the battle for health care reform. The rising costs of health care
benefits have been one of the factors driving corporations' all-out
assault against unions, prompting many business unions to come out
in favor of a Canadian-style single-payer system in hopes of
eliminating the non-union sectors' cost advantages. But when the
Clintons declared for Managed Competition most unions went along.
The American Federation of Teachers, for example, ran a "special
report" arguing that securing decent health care is beyond unions:
"No matter how hard your local union fights for you, it can't give
you the security of health care that's always there. The problem's
just too big for any local union, district or national union to
solve." But for all their efforts to sell the Clinton plan,
primarily by presenting it as a minimum leaving unions free to
negotiate better deals, the AFT admits that the "pretty short" list
of excluded health benefits includes dental care, orthodontia,
hearing aids, contact lenses, psychotherapy, etc. While workers
could still choose their own doctors, they would be required to pay
more to do so. And workers would be required to pay income taxes on
any health benefits that exceed the government's stingy
package.
The situation will be even worse for part-time workers.
Employers will pay a pro-rated insurance contribution based on the
number of hours they work, part-timers will be required to come up
with the rest of the money themselves (and since coverage will be
mandatory, they will find themselves in a very deep hole indeed).
Most health care reformers call for a "single payer" system
modelled on Canada's, where basic health care services are funded
by taxes and the government pays doctors and hospitals directly.
Such a system reduces administrative overhead and paperwork by
eliminating insurance companies, as well as economic barriers to
health care access. And since the government is the sole payer of
health care bills, it can theoretically set global budgets to hold
expenditures in line. (In practice this works less well; the
Canadian system is the second most expensive in the world and
offers coverage only marginally better than that in the U.S. Since
doctors and hospitals continue to operate in a capitalist economy,
they have strong incentives to push payment levels upward; the
government must choose between limiting available health services
and taking on the powerful health care industry.)
But this also gives the government immense powers over the
lives of its citizens--the power to dictate what medical services
will be available, what drugs they will and will not take, etc. In
an era of economic decline, the government could quickly become an
HMO-like operator backed by the full coercive power of the state.
Syndicalist Approaches
In a society organized along anarcho-syndicalist lines, health
care would be one of the many necessities available to all without
charge. While we have little interest in developing a social
blueprint (the details of any free social organization must of
necessity be worked out by those who constitute it, and evolve in
accord with experience and changing needs), a syndicalist health
care system would surely be self-managed by health care workers
themselves--working through their union which would include all
workers involved in delivering health care, from those who scrub
the floors to the nurses and doctors. Health workers' unions would
federate among themselves internationally--to share and develop
their expertise, to provide training, etc.--and with other groups
in their communities to ascertain what services are needed and to
ensure that the necessary resources are provided. This would likely
involve a radical rethinking of the way in which health care is
delivered, with greater attention to preventive care (prenatal
care, routine checkups, nutrition, etc.--but also environmental
conditions) and changes in the division of labor which now
separates doctors' mental labor (diagnosis, prescription, etc.)
from hands-on treatment.
Anarchists have considered these issues before, if not in the
context of our highly technological medical system. Kropotkin
argued that the progress of civilization could be measured by the
extent to which such necessities (a term he defined broadly to also
include culture, information, etc.) were available, free of charge,
to all. G.P. Maximoff noted that medical and sanitation
services (sanitation was the preventive medicine of the day--indeed
it is only in recent decades that medicine developed the ability to
significantly improve people's health) were essential public
functions to be supported by the communal economy and administered
by the union of medical and sanitary workers. "The Public Health
service will cover the entire country with a close net of medical
and sanitary centers, hospitals and sanitoria." Alexander
Berkman argued that such needs should be met by locally based
voluntary committees, rather than by centralized structures which
were likely to overlook real needs and stifle the spirit of human
solidarity so necessary to social progress.
During the Spanish Revolution, our comrades faced the problem
of constructing basic medical services essentially from nothing.
(Spain certainly had doctors and hospitals, but like other social
services these were not available to most workers because of cost
and location.) As Gaston Leval wrote,
The socialization of health services was one of the
greatest achievements of the revolution... The Health
Workers' Union was founded in September, 1936... All
health workers, from porters to doctors and
administrators, were organized into the one big union of
health workers....
Before the revolution, Spain had one of the highest infant
mortality rates in Europe and vast inequality in access to
services. So it was not sufficient merely to take charge of the
existing system--it had to be (re)constructed from the ground up.
In Catalonia, the health workers' union distributed health centers
throughout the province to ensure that everyone was within easy
travelling distance. There were, of course, many difficulties:
Where there had been an artificially created surplus of
doctors serving the wealthy under capitalism, there was
now under the socialized medical system a shortage of
doctors badly needed to serve the disadvantaged masses
who never before received good medical care....
Not all health services could be entirely socialized, but
most of the dental clinics in Catalonia were controlled
by the syndicate, as were all the hospitals, clinics and
sanitariums... Private doctors still practiced, but...
the cost of operations was controlled. Payments for
treatments were made through the syndicates, not directly
to the physicians. In the new clinics, surgery and dental
extractions were free....
In the village of Albalate de Cinca, for example, the local
collective provided free health care to all, providing the town
doctor with medical supplies and books, and, of course, with the
necessities of life from their collective labor. Similar
arrangements were made throughout Aragon and Catalonia.
It is, however, relatively easy to sketch how we might provide
health care in an ideal society; given that we are not presently in
a position to socialize the health care system, the question of
what our position should be towards proposals to address the
immediate health care crisis remains open. In Britain, the
anarchist movement--while intensely critical of the many
inadequacies of the nationalized health care service and its
bureaucratic deformations--has generally opposed efforts to
reprivatize health care, recognizing that this would only worsen
the situation. Similarly, in the U.S. many anarchists have taken
part in efforts to fight the closing of public hospitals or their
privatization.
Some anarchists, such as the anarchist caucus of the
Committees of Correspondence, call for a national health plan,
apparently modelled after Canada's system. But it is far from
evident that such a system can meet people's needs. In Canada,
health care costs are rising almost as sharply as in the U.S.,
prompting government efforts to control costs by cutting back on
services. Workers (whether in health care, or in society as a
whole) have little influence over health care policy--rather the
important decisions are made by government bureaucrats, and driven
by the need to placate the health care corporations, on the one
hand, and the transnational corporations' demands for global
competitiveness on the other.
Any meaningful health care reform needs to eliminate
capitalism from the health care system and place decision-making in
local communities (though funding would need to be drawn from a
wider area, in order to address the vastly different wealth levels
and the greater health needs typically found in poor communities).
This might take the form of community-based health clinics, mutual
aid societies (of the sort that provided sickness and death
benefits to hundreds of thousands of workers in the early years of
this century), or union-sponsored facilities.
Decent health care should be available to all as a fundamental
human right. Yet infants die for lack of prenatal care, people live
in fear of being bankrupted by medical bills in the event of a
major illness or accident, many others cannot afford medications
for chronic illnesses, people die every day because there is no
profit in treating them. This is a strong indictment of our
capitalist system and its inability to meet basic human needs. But
the solution is not in strengthening the insurance companies or
more government control. Rather, we must seize control of health
care--so necessary to ensure our ability to live out our lives--and
build a health care system (and, indeed, a society) organized
around fulfilling human needs.
Notes:
1. "Paying for health," Left Business Observer #57, Feb. 16 1993,
pp. 2-7. Figures vary widely for the numbers uninsured and
underinsured; David Himmelstein and Steffie Woolhandler (The
National Health Program Book, Common Courage Press, 1994, pp. 24-5)
estimate that about 37 million Americans are uninsured at any one
time, and that 1 in 4 (63.3 million) were uninsured for at least
one month in a 28-month period from 1986-88.
2. Thomas Bodenheimer, "Health Care Reform in the 1990s and
Beyond," Socialist Review 1993(1), pp. 18-20.
3. David Rosenbaum, "Economic Outlaw: American Health Care," The
New York Times, Oct. 26 1993, pp. 1, D22.
4. Himmilstein & Woolhandler, The National Health Program Book, p.
89.
5. Himmelstein & Woolhandler, The National Health Program Book.
6. Himmelstein & Woolhandler, p. 183.
7. Robert Pear, "Congress is Given Clinton Proposal for Health
Care," The New York Times, Oct. 28 1993, pp. 1, A24-A25.
8. Judith Ebenstein, "Big Brother, Manager" (Letter), The New York
Times, Nov. 16 1993, p. A26.
9. "Cost Control," Left Business Observer #58, April 26, 1993, p.
8.
10. Himmelstein & Woolhandler, p. 188.
11. "Placebo" (Editorial), The Progressive, November 1993, p. 9.
12. "The Clinton health plan: A union Q&A," On Campus, November
1993, p. 4.
13. See my "Peter Kropotkin's Anarchist Communism," Libertarian
Labor Review 12, Winter 1992, pp. 19-24.
14. G.P. Maximoff, Program of Anarcho-Syndicalism, p. 32;
originally published in Russian in 1927. English translation by Ada
Siegel included in Maximoff's Constructive Anarchism (Maximoff
Memorial Publishing Committee, 1952). Reprinted 1985 by Monty
Miller Press, Sydney, Australia.
15. Alexander Berkman, ABC of Anarchism, London: Freedom Press,
1977 (Excerpt from 1929 edition of What is Communist Anarchism),
pp. 72-3.
16. in Sam Dolgoff, ed., The Anarchist Collectives: Workers' Self-
Management in the Spanish Revolution, New York: Free Life Editions,
1974, pp. 99-101.
17. Dolgoff, The Anarchist Collectives, pp. 119, 133-34.
18. "National Health Plan Now!@!" Black and Red #5, July/August
1993, p. 1. The article criticizes the emerging Clinton plan and
quotes several advocates of a single-payer system, but offers no
details of what sort of national play they advocate.