Category Archives: Neoliberalism

Neoliberals Can’t Fix Health Care

Don McCanne’s Quote of the Day blog returns us to a previous post I wrote about the ACA and neoliberalism, as well as others. The reader might also want to review posts about MEMEnomics.

In the following article from The Milbank Quarterly, not known as a radical publication, but rather as a financial one, John McDonough discusses some of the other reasons why neoliberals cannot fix health care.

As his title suggests, it has a lot to do with the non-medical facets of the health care system in the US — namely, the shareholders and stakeholders who profit from the status quo, and not just the insurance companies and pharmaceutical industry.

That a pro-business publication would publish this article attests to the reality that the problem with enacting Medicare for All/Single Payer is not just a political one, nor one made difficult by the power and influence of the industry itself, by insurers, drug manufacturers, device manufacturers, durable medical equipment companies, etc.; but also the investor class.

Here is McDonough’s article in full:

The Milbank Quarterly
November 2019
Shareholders, Stakeholders, and US Health Care
By John E. McDonough

August 19, 2019 was a big day for The Business Roundtable (TBR), the Washington, DC non-profit association of chief executive officers of major US companies. The organization released a new “Statement on the Purpose of the Corporation” signed by 183 CEOs declaring that the interests of workers, customers, communities, and “other stakeholders” should be as important as the interests of a company’s shareholders. This represented a significant change from its 1997 Statement that declared “the principal object of a business is to generate economic returns to its owners.”

While actions, not statements, will reveal real intent over time, this change was noteworthy—including for the US health care sector. The subject has deep roots in American society, especially in the advocacy of the late economist Milton Friedman, who derided corporate social responsibility as “fundamentally subversive” and asserted that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.”

In the 1970s and 1980s, Friedman’s notion powered a movement in the United States, Great Britain, and around the globe called “neoliberalism” that promoted deregulation, defanged labor unions, shrunken government, and ever lower taxes. From business schools to high cathedrals of capitalism “greed is good” became more than a movie line from Wall Street and its iconic Gordon Gekko. Binyamin Applebaum’s new book, The Economists’ Hour, lays out the neoliberal narrative, warts and all, in compelling detail.

What about US health care and this neoliberal era in which we still breathe? The connections are multiple, deep, and noteworthy. For starters, of the 183 CEO signers of the TBR statement, only 11 come from companies primarily embedded in the health sector, such as Pfizer, CVS Health, and Siemens, far less than a proportionate share of health care’s 18% jumbo slice of the US economy. And it is not difficult to view TBR’s statement as whitewash, especially when signers include CEOs of Johnson & Johnson and Mallinckrodt Pharmaceuticals, companies that are neck deep in the nation’s opioid marketing scandal.

Influential US political and economic historians refer to the period from the late 1970s through today as the “Reagan era,” crowned during the presidency of Ronald Reagan who declared in his inaugural address that “(i)n this present crisis, government is not the solution to our problem, government is the problem.” His term in office ushered in the modern era of tax cuts, growing inequality, wage stagnation, diminished unionization, and repeated assaults on government legitimacy. The “Neoliberal Era” may be a better fit.

Coincidentally or not, in the early 1980s US national health spending as a percent of gross domestic product (GDP) split from rates in other advanced nations toward its current extreme outlier status. US spending on health increased from about 8% of GDP in the late 1970s to 17.8% in 2017, far ahead of the nation with the second highest rate of national spending on health, Switzerland, at 12.2%.

In return for this massive societal investment in medical care, we have the world’s most technologically advanced health care system along with the highest prices in the world for any category of medical services or products one can imagine. The rush of private investment capital into our medical sector has resulted in cutting-edge medical care, advanced drugs and medical devices, and the highest salaries of any professionals in American society.

In these 40 years, we also have seen three consecutive years of declining life expectancy, a deep anomaly among our international peers, humiliating rates of infant and maternal mortality, shocking levels of gun violence, and extreme incidence of overweight and obesity. As economist John Komlos has documented, during World War II, native born Americans were the tallest among advanced nations, both men and women—we are now among the shortest. For good measure, Americans are also among the most dissatisfied with our health care system. For what it is worth, money doesn’t buy us good health or happiness.

In this epoch, we have seen enormous growth in private investor funding into a sector formerly dominated by nonprofits or government, in hospitals, physician practices, home health, hospice, air ambulances, and much more. The pharmaceutical industry has always been for-profit, yet its extraordinary concentration has ballooned its pricing structure. The for-profit health sector keeps evolving, assuming new forms. As Gondi and Song document, between 2010 and 2017 the value of private equity deals involving acquisition of health-related companies, mostly hospitals and physician practices, increased 187% reaching $42.6 billion.

Could the investor dominance of much of US health care explain at least part of our outlier status on health spending and outcomes? It is hard to imagine that the investor-driven corporatization of American society could have left medical care untouched. Even today, the most common complaint from conservatives and Republicans about US health care is that government regulation thwarts the free market.

The notion that we could put this massive bulk of toothpaste back into the tube seems preposterous. The economic and political power of the incumbent system would easily stymie any serious challenge, including the apparent one, a nationalized “Medicare for All” structure. Assuming anything of this magnitude could get through Congress—or the Supreme Court—is a daunting stretch. And yet, the real frustrations of Americans with a system organized first and foremost to serve money and power before patients deserve attention.

If, as the Business Roundtable advocates, we are embarking on a new national conversation concerning the role of the for-profit corporation in American society, perhaps we should also instigate a parallel and sustained national examination and conversation about the history, experience, and results from for-profit corporatization of our health and medical care sector. It is clear that this revolution produces good and bad results for American society and for the world. Is it time for a reckoning?

John E. McDonough, DrPH, MPA, is a professor of public health practice at the Harvard University TH Chan School of Public Health in the Department of Health Policy and Management.

Shareholders, Stakeholders, and US Health Care

References

  1. The Business Roundtable. Statement on the Purpose of the Corporation. Washington, DC. August 19, 2019. https://opportunity.businessroundtable.org/wp-content/uploads/2019/09/BRT-Statement-on-the-Purpose-of-a-Corporation-with-Signatures.pdf. Accessed October 30, 2019.
  2. Friedman M. The social responsibility of business is to increase its profits. New York Times Magazine. September 13, 1970.
  3. Fink L. Larry Fink’s 2019 letter to CEOs: profit and purpose. BlackRock. January 2019. https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter. Accessed October 30, 2019.
  4. Komlos J, Buar M. From the tallest to (one of) the fattest: the enigmatic fate of the American population in the 20th century. Economics and Human Biology. 2004;2:57-74.
  5. Gondi S, Song Z. Potential implications of private equity investments in health care delivery. JAMA. 2019;321(11):1047-1058.

 

Published in 2019
DOI: 10.1111/1468-0009.12432

No Socialists Here

Dear Insurance company execs, pharmaceutical company execs, employee benefits consultants and executives, Wall Street investors, and all other stakeholders in the current dysfunctional, broken, complex, complicated, and bloated mess called the US health care system.

You have heard many politicians, and journalists, not to mention your own peers, or even you yourselves label the push for Medicare for All as “Socialism.”

We even have the Administrator of CMS, Seema Verma, calling it, and the public option plan,  “radical and dangerous for the country” recently when she spoke to the Better Medicare Alliance’s Medicare Advantage Summit in Washington, D.C.

Her solution, and probably yours as well, is to keep selling Medicare Advantage plans, which only makes the current system worse.

So, to help you get over your fear and loathing of Socialism, and to prove to you that the only reason why the US is the only Western, industrial nation to not provide its citizens with universal health care is because you are making money off of other people’s health, or lack thereof.

You are doing so, because you are greedy. There I said it. Now I hope you will pay attention to the following graphic:

Do you see any socialist countries? Do you see any radical and dangerous regimes that are hostile to the interests of the US? Well, maybe Slovenia. After all, they did send us Melania and her illegal family.

But back to the case at hand. I defy any of you hotshots in the health care space to prove to me that all of these Capitalist, free-market countries are flaming Reds, or even a bit Pinko.

You can’t, because it is not true. You and those who call Medicare for All, Single Payer, or even the so-called “public option” radical, just don’t want the government to interfere with your looting the pockets of the American people for your financial gain.

And that is why we are the only country with an “X”, instead of a check mark below our name.

More doctors become hospital employees, facing noncompetes | Healthcare Dive

The proletarianization of physicians marches on. As you recall from my reviews of “Health Care under the Knife”, there has been a steady movement towards making physicians into employees of hospitals, or rather their proletarianization. Now it seems they are up against noncompetes, as the article below reports.

Here is the link to the article:

Legal experts say noncompete agreements are common practice for hospitals, and are usually enforceable. But physicians, and in some cases the courts, are pushing back.

Source: More doctors become hospital employees, facing noncompetes | Healthcare Dive

Vermont becomes first state to permit drug imports from Canada – POLITICO

In a rebuff to the current neo-liberal regime and its recent plan to tackle drug prices, the State of Vermont became the first in the nation to allow cross-border purchasing of drugs from Canada. Makes sense because the border is not that far away.

Years ago, my late mother worked for a company here in Florida that facilitated drugs to come to patients from Canada, the UK and Israel.

But thanks to successful lobbying by a former Democratic Congressman from Louisiana who after leaving Congress became a lobbyist for the pharmaceutical industry, the government forbade the importation of Canadian drugs.

The measure is one of the most aggressive attempts by a state to tackle rising drug prices that critics say are crippling state finances.

Source: Vermont becomes first state to permit drug imports from Canada – POLITICO

Some Final Thoughts On “Health Care under the Knife”

Last month, I wrote two articles about the book by Howard Waitzkin et al. entitled, “Health Care under the Knife: Moving Beyond Capitalism for Our Health.

The first article was a review of the Introduction to the book. The second article examined the Affordable Care Act (ACA), also known as “Obamacare”, as the last stage of neoliberal health care reform.

In this article, I will critique the overall message of the book and give some reasons as to why I believe radical change in American health care and radical change in American society in general cannot take place until one key condition is met for that change.

This will also apply to the rest of the world where neoliberal policies have taken root. But since much of the impetus of these policies comes from the US and institutions the US created after World War II such as the International Monetary Fund (IMF), the World Bank, and the United Nations’ World Health Organization (WHO), as well as many international financial institutions and the Gates Foundation, it will be difficult, but not impossible to turn back those policies and effect the necessary change to secure universal health care for their citizens. Some have already done so.

The authors have made a very convincing case for their argument that the failure to achieve universal health care is a result of neoliberal policies enacted over thirty years ago both here in the US and in the UK under both Republican and Democratic administrations, and under the various Conservative Party Prime Ministers, from Thatcher, Major, Cameron, and now Theresa May, and Labour PMs, Blair and Brown.

However, their prescription for how we overcome these policies assumes that social change is necessary before there can be change in health care. While technically correct, their understanding of the conditions necessary for that change is flawed.

Economic determinism, the socioeconomic theory that underpins much of Marxist thought about Capitalism and the relationship between workers and owners of the means of production is central to the thesis in “Health Care under the Knife.” But can economic determinism really explain why the central thesis of Marxism has not materialized, since Marx predicted that the contradictions inherent in Capitalism would bring about the revolution that would free the working class.

The truth is more complicated than that, because Capitalism has a nasty habit of reinventing itself, or in the case of the New Deal and the Great Society programs of the 20th century, reform the system to improve the lives of those most affected by the inequalities of the Capitalist system.

Many American families, mine included, benefitted from those reforms. Whether we are talking about Social Security, the GI Bill, student loans guaranteed by the federal government to cover the cost of college for those in the working and middle classes, job training programs, other forms aspects of the social safety net, millions of Americans have moved upward in social mobility.

Anecdotal evidence from friends and relatives, stories of celebrities rising from humble beginnings, and lately, the rise of a biracial male from the State of Hawaii, whose father was an African immigrant and whose mother was a White American, and reached the highest office of the nation, is indicative of this upward social mobility. He did it by working hard and proving that if he could do it, given his background and personal tragedy of losing his father early in his life, anyone can.

The long-predicted revolution, therefore did not happen because many working people, to use a euphemism, “made it”. Some have made it into the middle class, and some have made it into the upper middle class. And some others managed to make it into the lower strata of the upper class. They are not the proverbial “1%”, but nevertheless, they are wealthy. And happy, well-off people don’t make revolutions.

We are however, seeing a reversal among some of the middle class and working class, and that is most definitely due to neoliberalism. And the opioid crisis is decimating the White working class and economic dislocation is one reason for the increase in suicides among White males.

So, to base the argument for single payer solely based on economic determinism and the change the authors contend is necessary for that to occur, is only looking at one side.

After the ascendency of Ronald Reagan to the Presidency, I realized that there was something else besides his charm and ability to communicate effectively that made Americans vote for him overwhelmingly. But I was unable for many years to understand why beyond believing that they did not want to be poor, as many living in Socialist nations were.

However, in the evolution of my consciousness, I have discovered that a socioeconomic theory only tells part of the story. Some years ago, I learned of a biopsychosocial theory of development called Spiral Dynamics. I have written about it before in other posts.

Without going into detail, suffice it to say that Spiral Dynamics is the theory that explains how people think, either as individuals or as a collective. And the reason is it called Spiral Dynamics is because the adult human mind is an oscillating, dynamic spiral from lower order to higher orders of thinking.

Based on the research of Clare W. Graves, Don E. Beck and Christopher Cowan, patented their ideas into Spiral Dynamics. Spiral Dynamics is concerned with the life conditions and coping measures used to solve the problems life conditions present to individuals and collective societies. It also reveals the deep codes about how people think, and what they value.

Using Graves’ labels for the first six levels of existence, they borrowed the term “meme” from Richard Dawkins, the British biologist, and color coded them for better mnemonic effect, as shown in the table below. Beck and Cowan labeled their version of memes, vMemes, or value systems, as they are concerned with the values individuals and collectives manifest at any given time in their development. Individuals and collectives can exist at more than one level at any time.

The table illustrates the last three levels as they currently are represented in the American population, along with the percentage of the world population at each, and the percentage of social power they have. The US is included in these figures, and only at Green do we see what percentage of Americans are at Green. But we can use them nonetheless for our purposes here.

By adding the percentage of population at both Blue and Orange, which in today’s America represents the Republican Party’s bases’, we notice that Blue/Orange has 70% of the population. Conversely, adding the percentage of power for each gives us 80% of the power, meaning that 70% of the American population controls 80% of the social power. Given that fact, to effect any change, either in society in general, or in health care, those percentages must change.

Blue has throughout history viewed the delivery of health care as a form of charity. The word hospital comes from the Knights of the Hospital of St. John, who provided care for poor, sick, or injured pilgrims coming to the Holy Land. And more recently, several Christian denominations have established hospitals for the same purpose. Catholic, Baptist, Methodist, and Presbyterians are but a few of the Christian churches that have built hospitals in cities across the country. Jews also have built hospitals, even the one this writer was born in.

Orange, on the other hand, sees the delivery of health care as a commodity that can be purchased for a price through the instrument of an insurance policy issued by a for-profit insurance company. If one can pay for it, then health care is easily accessible, and available when needed. But if one is not able to do so, then they should have planned accordingly. It is not their responsibility to provide them with health care by using their hard-earned income for such care, is their reasoning.

Green, therefore believes that health care is a right, and that is how it should be. It should be no surprise that one of the areas where the Green meme is seen is in Canadian health care. Many progressives point to Canada’s system as a model for the US.

But what prevents the US from moving forward towards that model is exactly how both Blue/Orange sees health care delivery. And since Orange has most of the power between the two, it is Orange’s Capitalism and Neoliberal policies that dictate how health care is delivered, paid for, and who can get it.

Thus, the one flaw in the argument the authors of “Health Care under the Knife” have is not understanding the value systems that underpin opposition to universal health care. It is not enough to discuss the economic reasons, as they have so successfully done, but to examine the psychosocial aspects as well. Taken together, economic determinism and Spiral Dynamics, in my opinion, explains in greater detail why change cannot happen as the authors would wish, until most of the US population evolves up the spiral.

One of the outgrowths of Spiral Dynamics as theory has been its merger with economics which Said Dawlabani has termed, MEMEnomics. MEMEnomics has been defined as a new branch of social science that studies patterns of economic policies and practices by taking an integral, whole-systems approach to economic sustainability.

According to Dawlabani, the US has entered what he called the Third MEMEnomic Cycle and it is expressed as the “Only Money Matters” Meme. This period began in the 1980s, the same time when neoliberal policies began. It led to what Dawlabani called the perfect Memetic storm. It is at this juncture where we find ourselves, and it his belief that a new paradigm is needed to move into the next cycle.

So, despite polling favoring single payer health care, as the authors rightly note, powerful interests will block any movement towards single payer. Until Orange has diminished in its social power and Green’s has increased, nothing will change. And the radical change they prescribe for this to occur will not, so long as social mobility for some prevents it, and profit can be squeezed out of the system.

Nevertheless, I highly recommend this book as a significant resource for understanding the dysfunction of our broken health care system despite its one flaw of being only one part of the story.

Universal Health Care in Reach? Not So Fast

The magazine, The Economist, published a ten-page special report in their April 28th edition on universal health care worldwide.

The report, which one social media commenter said was a perfect example of title and context differentiation, and gave no data or reason why health care was closer to being universal, is an example of a neoliberal publication going out on a limb with an issue vital to all human beings, and giving it short-shrift.

Throughout the report, The Economist mentions the World Bank and the World Health Organization (WHO), as well as the Gates Foundation as international organizations involved with public health in developing countries. The report contains statistics on the percentage of people in certain countries who do not have insurance, and other statistics to paint a bleak picture of health care in developing countries.

What the report fails to do is mention that it is exactly the World Bank, the IMF, international financial organizations, philanthropies like the Gates and other foundations, and the WHO, that have been responsible for preventing these countries from improving their health care systems.

Chapter Nine of the Waitzkin, et al., book previously reviewed in this blog, discusses in detail how these institutions influenced health care around the world for the benefit of multinational corporations in the developed world, and to the detriment of the health care in the Global South.

In particular, the WHO, which began in 1948 as a sub-organization of the United Nations, lost considerable funding due to ideological opposition to several programs operated by sub-organizations of the UN, and because the Reagan administration withheld annual dues. The UN began experiencing increasing budgetary shortfalls, which was passed onto organizations like the WHO.

But to the rescue, came the World Bank, and with this influx of private funds, the agenda of WHO changed to match that of the World Bank, international financial institutions and trade agreements. It was in the interest of these entities that health care be carried out in a vertical, top-down approach that left out key parts of the health care services needed in developing countries, namely surgery and concentrated on addressing infectious diseases like AIDS, malaria, and tuberculosis.

But there is another reason why public health in developing countries is in such a dismal state, and it has to do with the debt crisis these nations and others were subjected to by the nations of the Global North and the World Bank, IMF and international financial institutions.

According to the blog, One.org, “Developing countries spent years repaying billions of dollars in loans, many of which had been accumulated during the Cold War under corrupt regimes. Years later, these debts became a serious barrier to poverty reduction and economic development in many poor countries. Governments began taking on new loans to repay old ones and many countries ended up spending more each year to service debt payments than they did on health and education combined.

After many years of activism on the part of advocates for the poor and other activists, the nations of the Global North, through such organizations as the G8, the IMF and World Bank, decide to abolish debts worth billions of dollars owed by developing countries. Yet, despite this action, data in the World Bank’s global development finance 2012 report shows total external debt stocks owed by developing countries increased by $437 billion over 12 months to stand at $4 trillion at the end of 2010, the latest period of available data, according to the Guardian.

Third world debt was a serious issue when I was in college studying international relations and foreign policy, and I was aware of the efforts to reduce or eliminate this debt, so when I read in The Economist that the World Bank and WHO are engaged in public health issues around the world, I have to ask myself how is it possible that the very institutions responsible for the state of affairs experienced in developing countries as pertains to health care, are the very same institutions undoing the wreckage they created. Or at least not in ways that are advantageous to the citizens of those countries.

Instead of the vertical, top-down orientation these institutions are engaged in, a broad, horizontal orientation needs to be implemented that will radically alter the health care systems of these countries and provide all of their people with truly universal health care.

Lastly, The Economist looks at the US, and rightly points to our stubborn adherence to individualism and even quotes Republican congressman, Jason Chaffetz, who said, “Americans have choices.And they’ve got to make a choice. And so maybe, rather than getting that new iPhone that they just love, and they want to go spend hundreds of dollars on that, maybe they should invest in their own health care.”

Many Republicans, like Rep. Chaffetz, says The Economist, believe health care is not a right but something people choose to buy (or not) in a marketplace.  I can tell you, dear readers, I did not choose to have End-Stage Renal Disease, nor did I choose to be long-term unemployed (that is due to neoliberal economic policies and to the financial meltdown caused by the very institutions that have a negative impact on universal health care), so Rep. Chaffetz and his Republican colleagues are wrong. And besides, you can’t buy health, as we all get sick and we all die. What you buy is a policy, but policies are not the same as care.

One other reason The Economist cites for the US being an outlier in providing universal care is resistance to reform by powerful interest groups.

I don’t believe this report did anything to move the debate forward towards universal health care, either here in the US, or around the world. It really did not cover any new ground, and its prediction for health care universally achieved is either wishful thinking or a delusion. Either way, until the economic order changes, nothing in health care will.

 

ACA Gains Reversing

The Commonwealth Fund reported today that the marked gains in health insurance coverage made since the passage of the Affordable Care Act (ACA) in 2010 are beginning to reverse.

This is according to new findings from the latest Commonwealth Fund ACA Tracking Survey.

According to the survey, the coverage declines are likely the result of two major factors:

1) lack of federal legislative actions to improve specific weaknesses in the ACA and

2) actions by the current administration that have exacerbated those weaknesses. These include the administration’s deep cuts in advertising and outreach during the marketplace open-enrollment periods, a shorter open enrollment period, and other actions that collectively may have left people with a general sense of confusion about the status of the law.

Here are the key findings:

*  About 4 million working-age people have lost insurance coverage since 2016
*  The uninsured rates among lower-income adults rose from 20.9 percent in 2016 to 25.7 percent in March 2018
*  The uninsured rate among working-age adults increased to 15.5 percent
*  The uninsured rate among adults in states that did not expand Medicaid rose to 21.9 percent
*  The uninsured rate increased among adults age 35 and older
*  The uninsured rate among adults who identify as Republicans is higher compared to 2016
*  The uninsured rate remains highest in southern states
*  Five percent of insured adults plan to drop insurance because of the individual mandate repeal
What are the policy implications of this reversal?
The absence of bipartisan support for federal action has seen legislative activity shifted to the states.
Broadly, the leaving of policy innovation to states will lead to a patchwork quilt of coverage and access to health care across the country. It will fuel inequity in overall health, productivity, and well-being.
Folks, as I wrote about in What’s Really Wrong With Health Care? and Obamacare: The Last Stage of Neoliberal Health Reform, until we see a change in the consciousness of both the American people, their representatives in Congress, and in Corporate America, especially within the financial industry to radically alter the direction health care is heading, the situation will only get worse.
We need to get the money and the greed and the corporations out of health care altogether. We need a single payer system that does not proletarianize physicians, does not turn health care into a commodity, does not financialize it, commercialize it, and compromise it for the benefit of a few, and to the detriment to the many.
As this is May Day, the international workers’ day, wouldn’t it be nice if we could start moving in that direction, as so many other nations have already done?