article by lucius cabins & louis michaelson
I live in San Francisco, surrounded by hospitals. There are two major hospitals within a few blocks of my Haight-Ashbury home. Within a two-mile radius there are at least six more. Some are private, some public, some nonprofit and others for-profit, but all are in heated competition to keep their beds full and their machines in use. We don't hear much about that reality--it's hard to get past the overwhelming health babble to examine "health care delivery" as an industry, an important part of the local and national economy, and a key area of capital accumulation, automation, and labor exploitation.
Instead we are inundated with "soft" health information in the form of regular newsletters from local hospitals, advice columns in newspapers and on TV and radio, and--increasingly--straight commercials. I like the one for fiber something-or-other with the guy who starts out: "I'm not an actor. Just a regular person like you, 30 years old. But I had a heart attack." He's perfectly deadpan as he advises us to eat more fiber, especially Brand X cereal. (Later that night, on the news, "Bran Stocks Soar as Fiber Issues Explode!")
This media bombardment in the form of health advice illustrates two coexisting but seemingly contradictory trends: on the one hand, the enormous growth of highly competitive, hi-tech medical industry; on the other, the tremendous national preoccupation with health maintenance, a preoccupation partly based on mistrust of the medical industry and on anxiety about its spiralling costs.
Hospitals were originally established between about 1880 and 1920. Almost all of these early hospitals were philanthropic in nature; they were often linked to medical schools in order to provide students with the "raw material" on which to learn their craft. Doctors were private practitioners and still had a lot of competition from "quacks," that is, practitioners of other types of medicine.
After 1945, as antibiotics, new surgical techniques, and other innovations revolutionized western medicine, hospitals belatedly began to undergo the same process that had overtaken so many other industries--mechanization. Only fifty years ago hospitals were health care "workshops," where acutely ill or severely injured patients were brought to receive last-resort care--usually surgery, or else merely asepsis, anesthesia, food, and rest. The most expensive technology was probably the hand-cranked operating table or the autoclave that sterilized the instruments. Today, hospitals are highly diversified factories for testing, drugging, and operating on patients with a vast range of complaints, many of which were either untreatable or unheard-of a generation ago. The typical hospital continually sprouts new specialized wings, "centers," and clinics, and invests in hundreds of thousands of dollars worth of new diagnostic and surgical equipment every year. Moreover, the care in many hospitals, especially giant chains like Kaiser, has a notoriously assembly-line quality; patients are shuffled from one overworked, harrassed technician, nurse, or intern to the next, like sides of beef in an automated slaughterhouse. So how did this expansion happen? Or, as a Bank of America billboard once asked:
"Wherever did they get the money to buy that?"
As with so much of the so-called private sector, the answer, of course, is: from Uncle Sam. The federal government has been, and continues to be, the single most important force behind the expansion of the medical industry. In 1965, the government created Medicare/Medicaid, which brought many previously uninsured people into the market for private health care. "Government spending, which had hitherto been concentrated in relatively small direct grants to public-health programs and public hospitals, skyrocketed and was directed to the purchase of care in the private sector. The programs included unlimited payments to hospitals for capital expenditures--a blank check for private hospital expansion" (Himmelstein and Woolhandler, "Medicine as Industry," Monthly Review, April 1984).
This subsidy to hospital corporations and doctors, which had the political advantage of appearing to respond to the militance of poor people, totaled $48 billion in 1982, with another $25 billion in tax exemptions for health insurance and non-profit hospitals. Most tellingly, studies of private hospitals in Oakland, Berkeley, and Boston found that every major private hospital received more than 60% of its revenues from government sources. (Monthly Review, op.cit.) According to the San Francisco Chronicle, hospitals made profits averaging 12 to 15 percent on Medicare patients in 1984 and 1985, a far higher rate of return than before Medicare's cost-control payment system began a year earlier.
Medicine's most important function in capitalism was originally to improve and maintain the working abilities of the population.* Medical services were "wage goods" that workers paid for--when they could--out of their own pockets, or else received as charity. (The knowledge that one generally gets what one pays for helps to explain the extreme dread of illness, and especially of hospitals, among older working-class people. A few visits to the doctor were--and still are, for the uninsured--a severe strain on the budget, and the hospital meant probable death.) Medicine as a commodity was provided by self-employed artisans (doctors) rather than by full-scale capitalist enterprises. As the government subsidized medicine's tremendous expansion, however, it became a great absorber of capital, growing ever larger and more influential. Now other capitalists and the government have revolted and are beginning to insist that medical capital appropriate its share from individual consumers rather than from individual productive capitalist firms, from the parasitic but powerful insurance sector, or from the collective capitalist represented by the government.
The method for this transference has been to increase employee payment shares of company-sponsored health insurance. ("91% of all corporate employees are insured through company health-insurance plans" (Regina Herzlinger, "Corporate America's Mission Impossible: Containing Health Care Costs" in Technology Review, Nov.-Dec.1985.). In collective bargaining around the country throughout the decade, wage freezes and rollbacks have not been uncommon, but almost all union contracts have increased employee contributions to medical coverage. Health insurance premiums have doubled from the approximately $75 billion spent in 1980.
"The favorite cost-control strategy of many firms has been to modify health insurance policies. In 1980, for instance, only 5% of the firms' employees paid a deductible of more than $100 before insurance payments could begin. By 1984, 43% paid such a deductible..." Similarly, "in 1980 53% of employees paid nothing for health insurance, but by 1984 that number had dropped to 38%" (Technology Review, op.cit.). Cutbacks in maximum coverage and services funded have also been widespread in the 80s. We can assume that these trends have continued since 1984.
There is an ironic element to this analysis of the function of medicine: while it's true that at the level of capitalist society as a whole, medicine's primary function is to ensure the health of workers, the U.S. puts relatively little wealth into occupational health and safety, disability, and retraining. According to a March 1, 1987 NBC News special report, massive falsification of occupational accident reports is the norm throughout U.S. industry. These reports are the raw data used by OSHA to determine where problems are and where to inspect, and to gauge the relative safety of U.S. workplaces--and OSHA itself is being gutted. This is in keeping with the current trend away from any kind of long-term economic planning or social engineering and toward maximum short-term gain, otherwise known as corporate feeding frenzy. (See Dan Berman, Death on the Job, Monthly Review Press, for extensive documentation of these trends.)
Such changes are part of a drastic increase in the society-wide rate of exploitation--that is, the ratio between gross national profit and the cost of maintaining the workforce as a whole, including the unemployed and the "unproductive" such as housewives and children. Cutbacks in government programs for poor people (the "socialized" part of the total cost of maintaining the U.S. workforce) are widely publicized; however, "middle-class" workers have been experiencing the same process, first as wage freezes and cutbacks, and second, as increased health costs. According to Ivan Illich in his brilliant Medical Nemesis, before 1950 it took less than a month's income to purchase a year's worth of medical services, but by the mid-70s this price had risen to 5-7 weeks' income on average. It must be well over two months' worth per year by now.
Furthermore, an ever-increasing proportion of medical industry activity is billing, marketing, recording, paying, and administrative overhead, said to amount to some $78 billion in waste in U.S. health care system annually. "[Part of the problem is that more competition will mean more such waste. Only competing caregivers require strategic planning, marketing and pricing overheads. Enduring mistrust between payers and caregivers multiplies record keeping for each" (Alan Sager, "Opiate of the Managers" Society, July-Aug. 86).
We are witnessing a free-for-all in the medical marketplace, in which shrewd doctors are creating ambulatory surgical clinics to take high-profit outpatient surgery away from much larger hospitals. It is comparable to an entrepreneur setting up a small factory to make specialty products that can be sold for a hefty profit, thereby wiping out a much larger producer who balanced some money-losing or low-profit but socially beneficial activity with the high-profit activity now taken away. Competition leads to amputation of unprofitable services from profitable ones.
Concentration is bringing in more investment capital, leading to an increase in for-profit hospitals, ambulatory care centers, and plastic surgery and other strictly-for-the-rich medical services. It is also putting the financial squeeze on health workers (see "Kaiser Don't Care--SEIU Neither" in PW 19). Already, many hospitals are turning away indigent or uninsured patients, even when they are obviously in critical condition.
Not only is hi-tech commercial medicine engendering a bloated and unbalanced system of health care, but it is often ineffective and even dangerous. Illich points out that hospitals have a higher reported accident rate than any other industry except mining and high-rise construction. One need not entirely agree with his blistering condemnation of "clinical iatrogenesis" (in which remedies, physicians, and hospitals are the pathogens or "sickening agents"--see sidebar) to acknowledge the growing concern among even mainstream analysts about unnecessary medical practices running amok. "According to one Harvard medical school physician, at best only about 30 to 50 percent of health care services are effective, and the rest border on unnecessary care" (Technology Review, op.cit.). In fact, there is no national system of evaluating medical practices. The Food and Drug Administration oversees, to some extent, the introduction of new chemicals into general use; but doctors, through the American Medical Association and professional associations in each state, are left to regulate themselves. They jealously guard this privilege by intense lobbying and by howling to the media about "creeping socialism" whenever an upstart legislator tries to introduce some government oversight.
In his Society article, Alan Sager says, "We should cut clinical costs by identifying what care works and what does not... we could make rapid progress... if we devote a fraction of the money now wasted in processing health insurance claims to studying what works" (Society, op.cit.). Regina Herzlinger makes a similar point in her Technology Review article: "Files on insurance payments are massive, but they are organized to facilitate payments rather than to identify patterns of use."
Given that "modern" medical techniques remain largely unevaluated, it's no surprise that alternative health care has attracted many people. Since my early adulthood in the mid-70s, my friends and acquaintances have been seriously concerned about their health. They have spent countless hours dutifully exercising and studying nutrition, self-help health practices, macrobiotics, or yoga. Many have also turned to acupuncture, chiropractic, homeopathy, and numerous other "health care options." This pursuit, shared by millions of Americans, may be partly an attempt to gain control over an out-of-control life. It is also cheaper and often more effective: you don't need $250,000 machines to create or administer Chinese herbs, and limiting your intake of saturated fats is undoubtedly better than bypass surgery. However, I am not concerned here with the efficacy of any particular alternative therapy or preventive practice. My intention is, rather, to suggest a paradox: the possible contribution of such therapies and practices to fueling the demand for health care in general.
The strange fact is that despite the enormous growth in self-care, the market for medical services has not shrunk. Instead it has grown by leaps and bounds. By helping to discredit hi-tech medicine, alternative therapies have aided their own economic cause, undoubtedly benefitting thousands of people in the process. However, they also have contributed to a great expansion in the amount of health care that people feel they need.
Moreover, much of the people-before-profits philosophy that informed the early alternative health care movement was lost in the rush to develop and offer workable alternatives to hi-tech hospitals. The critique of health as a commodity, never very well developed, evaporated entirely as holistic entrepreneurs put up a supermarket of alternative therapies. Many became rich in the process.
The range of choices in this therapeutic supermarket is directly affected by insurance companies' willingness to fund specific treatments. As alternative health options have gained in popularity, medical insurance has branched out to provide limited coverage for acupuncture, homeopathy, chiropractic, and so forth. Insurers recognize that any medical therapy, regardless of actual efficacy, is a source of profit as long as premiums stay ahead of insurance benefit payments.
Others who are profiting from the health boom include manufacturers of vitamins and other dietary supplements, suppliers of exercise clothes and equipment, and makers of "natural" foods. Meanwhile, as usual in this society, form has overwhelmed substance. Factory-farm eggs tinted brown to simulate the free-range product of yore are sold in every supermarket, and even sugar-laden granola bars are now marketed as health products. There is no evidence, moreover, that the consumers of all these "healthy" products are any less likely to head for the nearest clinic or hospital when something goes seriously wrong.
This may be partly because the health-care industry has also exploited wellness ideology with great success. The critique of hi-tech hospitals pre-dates by more than a decade the current attempts to curb hospital economic growth. Alternativists of the 60s correctly argued against the unlimited application of drugs and machines to treat disease. But as their medical "less-is-more" message seeped through the general population, it also blended nicely with the medical industry's need to cut costs and diversify.
Astute health care corporations are de-emphasizing capital-intensive diagnostic and curative services in favor of "health maintenance" centers and clinics for every conceivable subgroup of the population--pregnant mothers, nursing mothers, women in general, infants, children, older people, athletes--and for various parts of the body--the breast, the foot, the back, and so on. How long before we see the Midlife Woman Executive's Toe Clinic, or the Sporting Father's Elbow Center? And how much illness or injury do such centers and clinics really prevent? True, some cancers and other problems are best caught early, but the preventive care mystique is clearly being exploited by the medical industry in order to keep healthy people passing through its doors.
The alternative health movement has ended up reinforcing the system it set out to transform. Its objections to orthodox, drug-and-machine medicine have both provided an ideological cover for shifting health care costs back onto workers and opened up new markets in corporate-style preventive care. More profoundly, the failure of the alternative health care movement to develop and popularize an analysis of the social causes and treatment of illness has fed into the continuing substitution of paid services for human community.
In the simple act of going to the doctor, people reproduce an elaborate and ideologically loaded set of social relations: The patient has an illness. The doctor, the expert, will define the illness by objectively examining and testing the patient's body. The patient or her insurer will pay for this service. The doctor will then treat the patient's illness, often by prescribing drugs manufactured by pharmaceutical companies that the patient must buy from another expert called a pharmacist. These roles, actions, and definitions are not "natural." Calling them into question provides a window onto the psychological and structural transformations that have accompanied the rise of the service economy.
This rise has meant that more and more of the things people once did for themselves are now being sold to them by corporations or independent professionals. Health care is among the most glaring examples. Today, most people have abandoned home remedies for over-the-counter drugs and/or a visit to the doctor, who often authorizes prescription drugs. If the doctor runs tests, diagnostic machines get used, thus helping to pay their amortization cost. And behind the doctor and the clinic or hospital she probably works for stand the multinational pharmaceutical companies, the "med-tech" equipment builders, the genetic engineering firms... It's a classic example of the Invasion of the Marketplace.
As the service economy pushes its frontiers outward with the shock troops of advertising, most people come to see their problems as individual predicaments to be solved by purchasing the right product or service. They have less and less confidence that they can solve their problems themselves or with the help of friends or family. This lack of confidence in turn legitimates the expertise of the professional who provides the purchased service. Lack of confidence, moreover, is exacerbated by lack of time, as long commutes and unpaid "salaried" overtime further eat up the day, and by lack of human support, as atomized suburbs and rootless, neighborless urban "neighborhoods" isolate their residents.
More and more areas of human endeavor and interaction are falling under the sway of the marketplace. A commonly cited example is the ever-growing use of the courts--and therefore of lawyers--to settle disputes that would once have been settled by community mediation, or perhaps by a fist-fight. Likewise, professional "counseling" or low-intensity psychotherapy now often substitutes for talking your problems over with a close friend. Other common species are the home computer consultant, the travel agent, and the resume expert. Not that such professionals don't often offer useful and time-saving services; I have benefitted from them myself. My point here is the way our rushed, anxious, and isolated existence makes us increasingly dependent on them. Even the lowest-paid workers buy the services of fast food franchises and child care centers as well as those of the omnipresent lawyers and doctors.
Ironically, most of the great victories over infectious disease resulted from improvements in public health rather than from the treatment of individuals. The creation of underground sewer and piped water systems, along with slum clearance, played important roles in this process; however, the decisive factor seems to have been the strengthening of immune systems owing to better diet (see sidebar).
That better diet was paid for out of higher wages. And where did these higher wages come from? Certainly not from the humanitarian pleading of the medical profession, still less from the willing beneficence of the business class. They were won by the dogged efforts of countless, anonymous working men and women, who, in the course of countless strikes, picketed, sabotaged, occupied, dynamited, and otherwise made the lives of their employers uncomfortable and unprofitable until their demands were met. These men and women knew perfectly well that their health and that of their families was not a personal problem; they knew that lack of fresh produce translated into constant colds and influenza, lack of milk into rickets and thin hair, bad water into dysentery and cholera, and twelve-hour workdays under hazardous conditions into short, exhausted, hopeless lives. Throughout Asia, Africa, and Latin America, these battles are still being fought; and even here, the gains of the last half century are endangered. 1 Meanwhile, other fronts have opened up.
The most obvious of these fronts is environmental pollution. The well-publicized disasters like Love Canal, the Rhine, Bhopal, or Chernobyl, horrific as they are, are only the surface of the problem. In their normal operation, the chemical plants and nuclear reactors of the world are Bhopals and Chernobyls in slow motion, releasing legal, "permissible" levels of radioactivity and chemotoxins that are accumulating in the biosphere, climbing the food chain toward us, or settling into our lungs, our fatty tissue, and our bones.
Another front is the conditions of work in the new "clean" sectors, including the health-care industry itself. Processed World has helped to publicize the health risks facing VDT operators, telephone service reps, and chip makers. The stress and the poisons associated with these jobs are combining with other environmental toxins in an unpredictably hideous synergy to produce cancer, infertility, miscarriages and birth defects, and various kinds of immune deficiency.
Just as the well-to-do in the last century blamed the bad health of impoverished workers on their laziness and insanitary habits, business, government, and the mass media routinely ignore or suppress the connections between polluted environment and hazardous work on the one hand and new kinds of illness on the other. And this silence and silencing still goes largely unchallenged. Interior Secretary Donald Hodel didn't actually get away with suggesting that we step out in sunscreen, dark glasses, and long sleeves as a substitute for halting the destruction of the ozone layer by refrigerants; but he obviously thought he was going to.
The health care industry depends on a sustained demand for its services just like any other. Is it surprising, then, that there is a tremendous institutionalized resistance to accepting the powerful arguments linking disease to environmental and occupational causes? No matter how sound the ethics of many individual physicians or health bureaucrats, the health care industry needs continuing high levels of sickness. Attributing illness to individual behavior accomplishes at least two things:
1) It ensures ongoing sources of demand, that is, it reinforces people's acceptance of environmental sickening agents.
2) Sick or hurt people are disempowered and less likely to see themselves as part of a larger group; the lingering suspicion is that some mistake or moral failing caused their illnesses or accidents. This prejudice is particularly obvious in the case of that great killer, the car accident. The social choice to kill some 10,000 people a year by maintaining a transit system based on private autos is passed off as the victims' "bad driving" or "bad luck."
Unfortunately, the holistic health movement's justified insistence on the close connections between mind and body--specifically, between brain chemistry and the immune system--has also fed into this ideology. Cancer victims, for instance, are often suspected of having had a bad diet or some sort of neurosis. This leads, pathetically, to the faith that "looking after ourselves" will prevent such catastrophes, and to blaming ourselves when it does not. I am haunted by a scene in Unnatural Causes, a recent network docudrama about Agent Orange: a Vietnam vet who was massively exposed to dioxin ten years earlier is told that he has multiple inoperable tumors. "But I don't smoke, I eat all natural foods and stuff," he stammers. "It's not fair."
In Europe after World War II, working-class demands for a collective solution to health problems forced the creation of national health services that dispensed medical care at low or no cost to all citizens, and (in Britain at least) emphasized preventive care. These services persist to this day, despite the efforts of recent right-wing governments to abolish them. National health insurance is a favorite plank in the platforms of liberal Democrats, and it is still not a bad goal. It would, however, leave untouched the broader public health problems I have alluded to. It is not merely health care that should be a human right, but freedom from socially and technologically created pathogens--from hunger to excessive stress, from cotton dust to PCBs. The struggle for health now is the struggle to transform the entire structure of our society.
Lest this seem overwhelming, there are plenty of places to start. What might happen, for instance, if community groups fighting a hospital expansion went beyond questions of land use and "environmental impact" to assert their right to evaluate the medical philosophy, efforts, and expenditures of the hospital? The same principle could and should be applied to factories, office buildings, and other workplaces. Other more conventional kinds of biological self-defense, like fighting against nuclear power and toxic waste dumping, and for safer, more relaxed working conditions, are all essential too. Such health insurance as we have needs expanding. More anti-AIDS funds must be squeezed out of the government. All these campaigns might be waged more effectively, however, if the participants situated them within a long-term struggle for collective, democratic control over all aspects of social life, and for a sane relationship to the biosphere. In the final analysis, our health is the health of the planet, and both depend on our creating a vastly freer and more cooperative world. We don't have forever.
by Lucius Cabins & Louis Michaelson
The privatization of publicly funded (through Medicare, Medicaid, and Blue Cross and other "voluntary" insurance programs) health care may turn out to be one of the most socially damaging legacies of the Reagan administration. It has forced hospitals to be run as profit making institutions with one eye on the product line (in this case, patient care) and the other on the bottom line.
In that halcyon year of voodoo economics, 1982, the State of California decided to control rising health costs by making hospitals more competitive. To this end, it passed legislation that required hospitals to bid competitively for the privilege of being MediCal (the state's insurance plan for the medically indigent) providers. The bidding was on a per diem rate with collateral costs, such as x-rays and lab tests, averaged in. Only those hospitals whose bids were within the state's guidelines would receive MediCal reimbursement.
This legislation also allowed insurance companies to offer Preferred Provider Organization (PPO) contracts. Under the PPO system, a hospital agrees to charge the insurance company a special rate for its clients. In return, the insurance company more-or-less guarantees a certain volume of patients to its preferred hospitals. It does this by charging insurees a larger proportion of the hospital bill, if they choose a non-PPO facility.
For the hospitals, the new economics meant a change in the way they do business. Before a hospital cuts a deal with an insurance company, it must figure how much it costs to treat certain groups of patients (coronary bypass, maternity, trauma, etc.) and how much it can charge and still remain competitive. What the insurer is later billed depends on the predetermined amount assigned to each diagnostic group irrespective of the actual cost of a particular patient's treatment. Simply put, the hospital receives the same amount for treating a broken leg whether three x-rays are taken or four.
Since some diagnostic groups--or product lines--are more profitable for a hospital than others, hospitals try to make deals with those insurers whose clients needs are most compatible with their optimum "case-mix". (A case-mix is the per cent of patients in each diagnostic group a hospital treats.) Hospitals, like any manufacturing or retail operation, must provide a range of goods and services with the more profitable business lines financing other less profitable, but still necessary, activity. The ideal case mix varies from hospital to hospital, like the ideal product mix varies from store to store. (Some lines--like burn units or furniture--use up so many resources that they are rarely profitable, while others--like birth centers and sportswear--are proven moneymakers.) If, for example, a hospital makes more money on coronary care than trauma cases, it may decide not to do business with an insurer who has a lot of young people on its books who are more likely to be in car or sports-related accidents.
Still, hospitals can not always pick and choose their patients. If a patient's costs run over what the insurer has agreed to pay, the treatment comes out of the hospital's profits. There have been published complaints from doctors and nurses who feel that patients may be discharged too early because of pressures from hospital administrators to cut costs. Perhaps, the threat of a malpractice suit is the patient's only defense against cut-rate treatment. Meanwhile, hospitals spend huge sums on public relations and advertising in order to fill their beds. The situation is not unlike a restaurant that would rather serve three parties at a table during the dinner hour than have one party linger for the whole evening. As they rush the first group of diners out the door, they are busy scouting for new customers.
The PPO system works, but probably not in the way it was intended. Hospital and insurance costs have not gone down, but the hospital industry is thriving judging from the expansion of existing facilities and the increasing number of for-profit institutions like the Humana group. As it was explained to me when I interviewed for a job in the data processing department of St. Mary's hospital in Daly City, even not-for-profit hospitals run by nuns have to act like profit making corporations in order to survive.
If health care can be privatized, why not the educational system through the use of school vouchers, as some have proposed? (I can imagine schools contracting to teach the 3 Rs to students they considered teachable, with the rest being consigned to the educational equivalent of the county hospital.) The public schools are a disaster, not because they are supported by the state, but because they are so poorly supported; still most people would not want to see education put entirely into private hands. Isn't medical care analogous to education? Finally, the question is do we want the quality of our hospital care to be influenced by some corporation's bottom line?
by Ana Logue
- 1. If any further evidence were needed, a recent study, cited in the 8/7/87 San Francisco Examiner, concludes that about half of all patients admitted to intensive care in U.S. hospitals are suffering from malnutrition, and that doctors seldom recognize malnutrition when they see it because it has been omitted from their training