Health, Education, and Housing
excerpted from the book
Against the Conventional Wisdom
by Douglas Dowd
The leading economies of the world are those of Western Europe,
the United States, Canada, and Japan, followed by the other members
of the Organization for Economic Cooperation and Development (OECD).
Of those countries, the United States spends the most on health
care (in the aggregate and per capita) at the same time that it
provides the least coverage to its citizens. None of those other
countries has a significant percentage of its population with
no coverage or such inadequate or fragile coverage; all have higher
longevities and lower infant mortality rates. Yet Americans have
been told and most probably believe that ours is "the best
health care system in the world": That is, we may pay more,
but we get more and better health care.
Would that it were so. It is of course not so for the 15-20
percent of Americans who have no health coverage-private or public
(including Medicare/Medicaid). Setting them aside, we will look
into what we are getting for our money: "What America Buys
for the Extra Money":
Amenities: impressive lobbies in hospitals catering to the
well-insured (but not others), 2-bed rooms, compared with the
more normal 4-bed rooms of the other countries.
Higher Incomes for Providers: doctors (whose high median incomes
of the early 1980s rose even more, at a rate [1984-1990] of 12+
percent compared with 6 percent for full-time employed women and
a decrease of 3+ percent for men); plus higher costs for drugs
and equipment here than elsewhere.
More People Working in Hospitals: comparing Paris with New
York, for example, New York had 40 percent more patient-care staff,
155 percent more non-patient-care staff, and 327 percent more
financial and billing staff.
Extra Administration and Hassles: "the hardest to defend....
The General Accounting Office estimated in 1991 that the American
insurance system created costs of $67 billion over and above what
the United States would pay if it had Canadian-type institutions
. . . about 1.2 percent of GDP."
White concluded his study: "Americans do not need more
information. They do need the clarity of understanding necessary
to overcome the obstacle course of the political system, the propaganda
of entrenched interests, and above all the ideology that says
that responsibility is fending for yourself, not standing up for
each other." ...
Writing about fifteen years ago, the sociologist and health
care scholar Paul Starr came to the following conclusion:
The failure to rationalize medical services under public control
meant that sooner or later they would be rationalized under private
control. Instead of public regulation, there will be private regulation,
and instead of public planning there will be corporate planning.
Instead of public financing for prepaid plans that might be managed
by the subscribers' chosen representatives, there will be corporate
financing for private plans controlled by conglomerates whose
interest will be determined by the rate of return on investments.
That is the future toward which American medicine now seems heading.
And that is the future where now we dwell.
When Clinton was elected president in 1992, the approximate
size and distribution of the annual $1 trillion income from health
care in the United States was as follows:
Hospitals, $410 billion; doctors, $200 billion; nursing homes
and home health care, $110 billion; drug companies, $100 billion;
insurance companies, $65 billion; others, such as dentists, optometrists,
physical therapists and pharmacists, something over $100 billion.
Bill and Hillary Clinton wished to change that for the better;
since then, however, deterioration has been rapid-for patients
and doctors, that is. The insurance companies, most especially
the Big Five, Aetna, Cigna, Metropolitan, Prudential, and Travelers,
are better off. Unquestionably some of the intentions of the Clintons
were admirable, but those were done in by the poisonous mix of
political ambition into which they were stirred.
The result of the CHP was to weaken not only health care but
the Clinton administration, and to facilitate the "Gingrich
revolution" of the 1994 election. Clinton and the Democrats
have recovered from that; an always dangerously inadequate health
care system has been pushed further into a deep morass.
The old saying has it that there is no use in crying over
spilt milk. True, if it is a cup or glass that has been spilt;
but the CHP was a milk tanker; its spilling over not only halted
health care reform but also placed the country on a track of retrogression
whose end is not yet in sight. We cannot make believe that the
disaster did not happen, nor can we let it pass without seeking
to understand how and why it happened, if we are ever to reverse
The trouble began before the CHP came into the public eye.
The idea of national health insurance (NHI) had been planted first
in 1945. Well before 1992 there were many in the medical profession,
untold millions in the general public, and a goodly number in
Congress who saw NHI as the only acceptable path to follow. Perhaps-one
is inclined to guess probably-the Clintons were of the same persuasion.
But, to quote Colin Gordon in these respects:
" Let us speculate about a scenario that never emerged.
Instead of his 1,340 page monstrosity, imagine if the President
supported the McDermott-Wellstone single-payer bill. With perhaps
150 votes in the House and, maybe, a dozen in the Senate, he could
have faced the voters on November 8  as the champion of
a people's health care plan. Is it not possible that the reactionary
triumph could have been avoided? Remember, exit polls found the
voters still designating health reform number one among their
concerns. More importantly, would not some portion of the 61 percent
of the electorate who didn't vote be finally moved to participate?"
Instead, Gordon goes on to say:
"Finally , the health issue has moved into a new
phase. With the merger-manic corporations successfully taking
over the hospital chains, HMO conglomerates, and doctors' groups,
we are now living through a classic confrontation the market-driven
solutions against the humane, socially-just premise of a not-for-profit,
government-facilitated insurance plan."
Be it remembered that when the president first began to proclaim
the need for health reform, it was with the express goal of universal
coverage. The promises soon became compromises, and well before
the time the public was let into the backroom debate, what had
been four possibilities had been reduced to three; the single-payer
possibility was dropped with absolutely no comment. The remaining
three, with varying degrees of improbability for achieving universal
coverage, were called "employer mandate," "individual
mandate," and "no mandate."
All the "mandate choices" as they then were discussed
had an element presumably directed toward universal coverage but-unlike
the single-payer plan-none guaranteeing it. The employer mandate,
which would have built on the existing system of private coverage,
was simultaneously the linchpin and the major compromise of the
CHP. However, as James Tobin (one of the few genuinely deserving
Nobel prize winners in economics) and law professor Michael Graetz
pointed out, "The biggest flaw in the Administration proposal
is the requirement that employers pay the premiums-a mandate whose
awkwardness and unfairness stand out starkly in a system dedicated
to universal coverage . . . [, a requirement] that no one would
choose now if given a clean slate."
Like the other two mandate plans, the CHP made it into but
never out of committees. All the plans, in Gordon's image, were
"dead on arrival." Gordon also underscored the unhappy
truth that after the single-payer plan was silently shelved, the
CHP came to be seen as the "plan of the Left," with
all subsequent compromises veering to the Right. For diverse,
mostly opposing, reasons, neither political party was willing
to support a full set of compromises; the whole notion of health
care reform, sagging under its own weight, finally expired from
For the main beneficiaries of the rising costs of health care,
however, reform had not so much died as been successfully assassinated-by
them. If we add up only the admitted amounts spent by health care
interests to sway Congress and the public in 1993-1994 (political
action committees [PACs], TV ads such as "Harry and Louise,"
lobbying, and the like), it comes to over $120 million.
Once the NHI disappeared into the mists, the public debate
was over one form or another of what stood as the center of the
CHP, "managed competition." The defects of such an approach
were pointed out by numerous health care experts; what was not
discussed was what would happen if-and when-the whole effort collapsed
into a black hole of dithering and finger-pointing. What has happened
is clearly worse than the CHP itself for the important reason
that after the failure of the administration's effort at reform
(and the way it failed), the gates were opened wider than ever
for private interests to speed ahead on their own terms.
The health care industry, now clearly dominated by the Big
Five insurance companies, has since 1994 been experiencing mergers
in all its dimensions. The most important consequence has been
that the main unhealthy tendencies in the system before 1994 have
been exacerbated: Assured excellent care for the rich (as ever)
and little and declining care for the poor-with rising uncertainty
and fears for those in the middle, who see their costs rising
for the same or fewer services, whose quantity and quality are
both at increasing risk.
Those risks are rising most especially for the old and the
poor who have been covered by Medicare and Medicaid. The pressures
on and by Congress to cut both have been strong-for the old in
part because of misinformation about the incomes of Medicare's
beneficiaries, for the poor because-it is tempting to say-well,
because they're poor, that being much of the attitude behind "welfare
reform" legislation. Again, a look at some facts: The strong
public impression is that a high percentage of Medicare beneficiaries
are mostly well-off people who are taking advantage of a bumbling
system. Earlier, the economic condition of the overwhelming majority
of Social Security beneficiaries was shown to be weak; ditto for
Medicare recipients (they are, after all, very much the same people):
The number of Medicare beneficiaries with annual incomes over
$50,000 is only 5 percent; those with incomes below $25,000 number
78 percent. And the average out-of-pocket spending on health care
by those sixty-five and older in 1994 was $2,803. Nothing enviable
there, and no sensible margin for reductions.
As for Medicaid (the health coverage for those under sixty-five
and also poor), its fate is in the same dark region as AFDC and
other forms of relief: Federal monies are now delegated in block
grants to the states, which have substantial discretion as to
how to dispose of those grants. Many states have already made
clear that cuts in Medicaid are likely. The undoubted decrease
in Medicaid is occurring just as other developments have increased
the need "From 1992 to 1993 an estimated 3 million children
lost private health insurance" when their families lost jobs
or employers stopped providing health insurance; although in 1988,
66 percent of all children under eighteen had private coverage
through family employment, that had dropped to 39 percent by 1994,
raising the Medicaid need from 16 to 26 percent.
None of that occupies the attention of the expanding insurance
giants, as they briskly gobble up or crush the smaller companies-as
was to be expected even had there been (as part of the doomed
CHP) a governmental overview. As Woolhandler and Himmelstein argued
in 1994, the giants have the capital to assemble the sprawling
provider networks demanded by big employers and regional health
alliances, and the clout to extract discounts from hospitals and
doctors by threatening to withdraw a large chunk of business .
. . [shifting] costs to smaller plans, driving their premiums
up and subscribers away.... Already, 10 insurers control 70 percent
of the H.M.O.s.
"Managed competition" there is and will be: between
the mammoth companies on one side, and the patients, doctors,
and hospitals (even the drug companies) on the other. Among the
insurers themselves, however, there will be what economists call
"oligopolistic competition"-that is, not the cost and
price-reducing presumed to accompany competition, but constrained
rivalry among the few for a larger share within defined limits.
Those limits collectively safeguard the interests of the giants
(spending on advertising instead of cutting prices and passing
on the costs while increasing profits).
There is a ray of sunshine in that cloudy sky, although a
feeble one: Now that an always larger majority of Americans will
have agonizing health care fears and realities, now that doctors
find themselves simultaneously losing income and professional
dignity (diktats from insurance companies replacing their medical
judgments), now that hospitals and even pharmaceutical giants
find themselves up against a variety of ceilings set by profit
policies-all that happening to the clear and sole benefit of giant
insurance companies and their allies - perhaps a coalition of
injured parties will be patched together to work toward a system
that, though containing imperfections, will have more health care,
not more profits, as its chief goals. Perhaps.
the Conventional Wisdom