Health Care's Deadly Crisis
by Helen Redmond
International Socialist Review,
Every day we are told by the media that
the United States is fighting a war on terrorism abroad. But right
here in America we have a special brand of terror: the terror
millions of elderly experience when they cannot afford prescription
medications for life threatening health conditions; the terror
of being denied diagnostic tests and surgery by health maintenance
organizations (HMOs); the terror of nursing home patients left
Iying in urine and feces because 90 percent of nursing homes are
understaffed;' the terror of being driven into bankruptcy because
of catastrophically high medical bills.
What happened to the talk of a crisis
in health care? It's a distant memory now, but in the early 1990s,
former President Bill Clinton started a national discussion about
reforming health care to make it more accessible and affordable.
Like most of his campaign promises, he broke this one. The meager
reforms his administration proposed in no way challenged the employer-based,
privatized health care system. The notion of any changes unleashed
a campaign by the powerful and well-funded insurance industry
to block reforms. Managed care in the form of HMOs, we were told,
would solve the problems of the uninsured and decrease the cost
of healthcare. The market, it was promised, could find ways to
provide quality health care at affordable prices for the millions
of uninsured. It was a lie and a scam.
The health care crisis in the United States
has not gone away-it's gotten worse with each passing year. It
is a human catastrophe that continues to immiserate and impoverish
millions of people. According to the U.S. Census Bureau, there
are 41. million people without health insurance. An estimated
14.6 percent of the population had no health insurance coverage
during all of 2001, up from 14.2 percent in 2000.
However, the latest census figures don't
tell the whole story. The survey measures health insurance status
during the entire year, but millions of people lose the coverage
for some part of the year-sometimes a few weeks or months. If
these gaps were calculated into the survey, the numbers of uninsured
would be much higher.
Every year, numerous public officials
and health care experts advise the government to do something
to address the health care emergency. The National Academy of
Sciences recently announced in a report that the United States
health care system is "incapable of meeting the present,
let alone the future, needs of the American public," and
the Bush administration should immediately take steps to address
the problem. The report states, "The cost of private health
insurance is increasing at an annual rate in excess of 12 percent.
Individuals are paying more out of pocket and receiving fewer
benefits. One in seven Americans is uninsured, and the number
is on the rise."
The economic recession has dramatically
boosted the numbers of uninsured as employers have fired workers
in record numbers. The list of companies downsizing or declaring
bankruptcy keeps growing-Enron, Arthur Anderson, WorldCom, SBC,
Verizon, Lucent and United Airlines. When LTV Steel declared bankruptcy,
80,000 workers and retirees immediately found themselves uninsured.
Retired steel workers are in an especially dire situation. Because
of their ages and work related health problems, no insurance company
will offer them coverage that is affordable.
The crisis affects the chronically unemployed
and low-paid workers the worst. African-Americans, who are disproportionately
poor and working class, are hit by the health care crisis worse
than whites. They suffer, for example, an infant mortality rate
twice that of whites, and make up 35 percent of all new AIDS cases.
The loss of health insurance or inability to afford it in the
first place is a trap door that millions of the working poor have
fallen through. Now, the crisis is affecting better-paid workers,
and even sections of the middle class. The largest group of the
newly uninsured, some 800,000, had incomes in excess of $75,000.'
Many of the recent job losses have been in high-wage industries
such as technology and telecommunications.
As the crisis in health care has accelerated,
chaos reigns. This is because there is no coordination of health
care resources and the pursuit of profit trumps the needs of patients.
Consider the following:
* The only trauma center in Las Vegas
closed for 10 days because emergency room doctors resigned, citing
the dramatic increase in their medical malpractice premiums.
* When cuts in Medicaid drug reimbursement
rates were announced, the three major pharmacies in Massachusetts
declared they would no longer fill prescriptions for Medicaid
patients-potentially leaving hundreds of thousands of patients
with no pharmacy to buy their medication.
* Kaiser Permanente, California's largest
HMO, gave telephone clerks bonuses for keeping calls with patients
brief and limiting the number of doctor appointments scheduled."'
The three big issues in health care this
year-a Medicare prescription drug benefit, a patient's bill of
rights and a generic drug bill-were debated, but no legislation
was enacted. Passage of a Medicare prescription drug benefit and
the generic drug bill would have helped millions of people struggling
with skyrocketing increases in the cost of medication.
President Bush doesn't even talk about
health care and the plight of the uninsured. His administration
has done nothing to make health care or prescription medication
affordable. Except for fetuses. Bush administration officials
issued a regulation that allows states to define fetuses as "unborn
children" making them eligible for health coverage under
the Children's Health Insurance Program (CHIP). But not the mothers."
The Bush doctrine in health care ensures
that the medical industrial complex that dominates health care
remains in control and that no legislation is passed that will
lower drug prices or the cost of health insurance. Both Republicans
and Democrats, beholden to the pharmaceutical and insurance industries
for generous campaign contributions, have shown time and again
that they will not challenge that power. Until that power is challenged
it will be difficult, if not impossible, to enact any meaningful
health care reforms or, for that matter, win a national, single-payer
health care system-the only solution to the crisis. A single-payer
system eliminates the private for-profit health insurance industry
and would be funded by tax dollars.
After much partisan wrangling, Bush's
economic stimulus package passed in March 2002, but didn't include
any health care provisions for the uninsured. It did provide for
$43 billion in tax breaks for businesses, though. Republicans
and Democrats just couldn't agree on how to fund health care for
those who were downsized due to the recession. The two parties
engaged in what is by now a familiar scenario: argue heatedly
about token reforms that will help the fewest people, then pass
no legislation at all and blame each other. Republicans sought
a provision that would have provided a one-year tax credit of
up to 60 percent of the cost of health insurance for unemployed
workers. However, only workers who had lost their jobs between
March 15, 2001 and January 1, 2002 and had health coverage for
the previous year would have qualified for the tax credits. Democrats
favored provisions that would have helped unemployed workers purchase
health insurance through COBRA (Consolidated Omnibus Budget Reconciliation
Act).t' COBRA allows workers to maintain
their health care coverage for up to 18
months if they assume the full cost of the health coverage provided
by their former employer. These pathetic proposals would not help
the vast majority of unemployed workers maintain health coverage.
Waiting for tax credits doesn't address the urgent need to pay
for doctor visits, surgery and medication. And tax credits to
the uninsured mainly help those with higher incomes. COBRA premiums
are so expensive that the majority of workers cannot afford them.
For a family, a monthly premium could be as high as $1,000 and
for an individual, $500. This is hardly affordable for the unemployed.
Health care U.S.-style trading health
The health care system in the United States
has a for-profit sector and a not-for-profit sector. The for-profit,
medical industrial complex delivers health care through employers.
It is made up of approximately 1,400 insurance companies, the
pharmaceutical industry, nursing homes and medical supply companies.
The American Medical Association (AMA), which lobbies on behalf
of the interests of doctors, is also a major player in health
Competition, lack of planning and the
pursuit of profit create anarchy within the employer-based health
care system. The corporations that own and control health care
are like a band of warring brothers. Each tries to shift the cost
of health care onto the other in order to make more profits for
themselves. Shifting the costs to patients is another guaranteed
way to boost profits.
When HMOs raise premiums, employers pay
for employees' healthcare. Employers can react in several ways:
drop the HMO from the network entirely, restrict benefits or try
to shift the increased costs to employees in the form of higher
deductibles and co-pays. Reacting to increases in premiums, Peter
Lee, CEO of Pacific Business Group on Health said, "Employers
are shell shocked." As a result, corporations are forcing
workers to shoulder a bigger share of health care costs.
Employers experienced a 12.7 percent increase
in health insurance costs this year with 56 percent of large firms
increasing employees' share of health costs and 78 percent expecting
to increase employees' costs next year.
Small businesses are particularly hard
hit because they cannot negotiate discounts like big companies.
According to Census Bureau figures, the most substantial drop
in insurance coverage occurred among the growing number of small
business workers. PRPD, a small construction company in California
dropped its health plan altogether. Office manager Sandy Ryding
said, "We were facing at least a 12 percent rate increase
and we couldn't afford it, now our employees are on their own."
More and more, even when employees are
offered insurance, they cannot accept it because the monthly premiums
are simply too high. The working poor, those earning minimum wage
or just above, simply can't afford coverage, even if a plan is
offered where they work.
No one is spared, not even retirees who
thought their health care was guaranteed upon retirement. Premiums
for retiree health plans increased more than 33 percent and prescription
drug co-payments increased by 17 percent in 2002. And 11 percent
of large employers said they plan to eliminate retiree benefits
for new or existing workers in the next two years.
When pharmaceutical companies raise the
price of drugs to boost their profits, HMOs react by imposing
drug formularies-a list of specific prescription drugs approved
for use by a managed care plan. This restricts members' choices
and forces them to pay more for brand name drugs. Some plans opt
for eliminating drug coverage altogether. American Airlines is
introducing a $50 deductible on prescription drugs and is increasing
the co-pay on generics from $7 to $10.
Non-profit health care
The not-for-profit sector of health care
is funded by tax revenues. State and federal governments provide
health care to millions of people through the Medicaid and Medicare
programs and the network of hospitals and clinics that makes up
the Veterans Administration.
MEDICARE. Medicare is a right. When a
person turns 65, or is found to be disabled, they are automatically
eligible for benefits. There are no asset or income restrictions.
It is, in a sense, "socialized medicine," but only for
those 65 and older and the disabled. Despite the shortcomings
of the Medicare program, it is crucial to defend it because it
is the only health care program that everyone is entitled to.
A combination of payroll taxes and tax dollars subsidizes the
program and it is administered by the federal government, thereby
removing it from the control of the private market. The most pressing,
ongoing problem is that Medicare has never been adequately funded.
Instead of increasing reimbursement rates, adding benefits and
decreasing deductibles, the opposite has occurred. Next year,
the Department of Health and Human Services has announced that
annual deductibles will increase 3.5 percent and monthly deductibles
by 8.7 percent.
The United States government actually
funds 60 percent of all health care costs. A Harvard study found
that government health spending in the U.S. is higher than in
any other nation. Government expenditures accounted for 59.8 percent
of total health care costs in 1999. At $2,604 per capita, government
spending was the highest of any nation-including those with national
health insurance. Estimated total health spending for 2002 is
$5,427 per capita, with the government's share being $3,245.
The study analyzed data on spending for
government health programs such as Medicare, Medicaid, the Veterans
Administration and expenditures to buy private insurance for government
employees-e.g. members of Congress and others. In 1999, tax subsidies
for private coverage totaled $109.6 billion. Most of these tax
subsidies go to the wealthiest Americans.
The Bush administration would like to
end the government's role as the largest provider of health care
and leave it completely in the hands of the private market. They
have attempted to do this by creating Medicare and Medicaid HMOs.
Americans' tax dollars are now used to pay HMOs to provide health
care to the elderly and those with Medicaid. At first HMOs jumped
at the opportunity to get a piece of the Medicare and Medicaid
"market," thinking they could make big, quick profits.
Some did. It soon became clear that there wasn't enough consistent
profit to be made. This is because Medicare and Medicaid recipients
tend to have more severe and chronic health problems that require
more doctor visits, hospitalizations, diagnostic tests and medications.
At the urging of government, hundreds
of thousands of seniors left traditional Medicare and joined HMOs.
Most signed up for one reason-prescription drug coverage-because
traditional Medicare has never paid for prescriptions. So what
happened to all those seniors who joined Medicare HMOs? Well,
the HMO bosses decided they didn't want to serve the Medicare
market after all-there's not enough profit in it. All over the
United States, Medicare beneficiaries have been dumped. HMOs have
dropped 2.2 million Medicare patients in the last four years,
saying that reimbursement rates are too low. Where seniors haven't
been dropped from plans, prescription drug coverage has been eliminated,
benefits reduced and premiums raised. According to a study conducted
by Mathematica Policy Research Inc., Medicare+Choice HMO beneficiaries
will face increased out-of pocket costs and sicker patients will
bear the brunt of big changes.
Medicare is one of the largest payers
for health care services in the country and when they cut reimbursement
rates, it has a knock-on effect throughout the entire health care
system. For example, this year reimbursement rates to doctors
were cut by 5.4 percent. This led to more doctors refusing to
treat Medicare patients. According to the American Academy of
Family Physicians, 17 percent of family doctors no longer accept
new Medicare patients.
The AMA has warned that unless the cuts
are reversed, more doctors might stop treating beneficiaries.
A report issued by the AMA found that 42 percent of physicians
plan to end participation in Medicare if further cuts are implemented.
It is becoming more and more difficult
for the elderly to find doctors who will accept Medicare at a
time when the aging population is on the rise.
The White House Office of Management and
Budget Director Mitch Daniels told lawmakers that the federal
government cannot afford to pass a $30-$40 billion Medicare provider
"giveback" bill because of decreased revenues. The House
passed a $30 billion Medicare reform bill that includes provisions
to increase reimbursement rates for providers. The Senate bill
includes smaller than planned reimbursement reductions for hospitals
but increases in reimbursement rates for Medicare+Choice HMOs.
MEDICAID. The Medicaid HMOs have not fared
much better and for the same reason. Kaiser Permanente, the largest
HMO in Oregon, is leaving the state's public health program next
year, claiming that if they continue to provide coverage they
will lose $18 million. Kaiser's decision follows the exit of the
other four largest commercial health plans in the state over the
last two years. All Hersh Crawford, administrator of the Office
of Medical Assistance Programs had to say was, "I can understand
why they have made this decision. They have not been making money
on our line of business."
The Medicaid program provides health care
to the poor and disabled under 65. The program is "means
tested," which means that income and assets determine eligibility.
In order to qualify, a person must be at or below poverty level,
although some states have tried to extend Medicaid benefits to
the working poor or to their children through the Child Health
Insurance Program (CHIP). Medicaid also offers health care to
adults who can show they have a significant disability that will
not allow them to work for at least a year. These strict eligibility
requirements exclude millions of people from the program. Means
testing is explicitly designed to deny people health coverage
and reinforce the notion that health care is not a right for everyone,
and that work, income, assets and health status are the determining
Today, nearly every state in the nation
has a budget deficit and lawmakers are proposing deep cuts in
the Medicaid program. The targets of the cuts are health and social
services to the elderly, mentally ill and disabled.
* In Wisconsin, funding for 14 community
health centers that provide care for low-income and uninsured
people is to be eliminated.
* In Mississippi, state officials want
to stop Medicaid payments to nursing homes and cover the cost
of only five prescription medications.
* Governor Frank O'Bannon of Indiana announced
$6.5 million in cuts to the state's CHOICE program which provides
home health care to the elderly.
* In Los Angeles, the board of supervisors
voted unanimously to close 11 of the county's 18 public health
clinics, close four school-based health centers and to end inpatient
services at High Desert Hospital. The plan will also reduce funds
for childhood immunizations, tests for sexually transmitted diseases
and examinations for communicable diseases.
The nursing home industry is not usually
thought of as part of health care, but it is one of the foundations
of the system, employing nurses, doctors and other health care
workers. Nursing homes are funded almost exclusively by Medicare
and Medicaid because most private insurance will not cover the
cost of long-term care in a nursing home.
Millions of elderly end up living temporarily
or permanently in nursing homes. Few seniors willingly go to live
in a nursing home because they are hazardous places where patients
are routinely neglected. Thousands of nursing home residents die
each year, victims of premature and preventable deaths. The National
Center on Health Statistics reports that starvation, dehydration
and bedsores were listed as the cause of death on 4,138 of 500,000
nursing home death certificates. Investigators believe that the
number is much higher. Many of the preventable deaths are due
to a shortage of nurses and aides to provide sufficient levels
of care. Nursing homes are understaffed because the pay is low
and the work is difficult. Over the years Medicare and Medicaid
have cut reimbursement rates to nursing homes which contributes
to the crisis in staffing. Nursing homes are businesses that are
operated to make profits, and if rates are cut, staff are cut.
But the nursing home industry has millions to buy politicians.
In 2000, the industry spent nearly $2.6 million in state elections.
The most vulnerable in society, the elderly
and the sick, have been warehoused in so-called nursing homes,
neglected and left to die premature, horrible deaths.
Beware of hospitals
Hospitals across the country have been
hit hard by the crisis and have closed wards, reduced services
and cut staff. According to a survey by the American Hospital
Association, more than 1,300 health care institutions have been
The study found that 20 percent of the
association's 5,000 member hospitals had cut back on services
and 6 percent had eliminated some units. Several factors have
led to this- lower reimbursement rates, treating the uninsured
and skyrocketing medical malpractice insurance. Malpractice insurance
at the Thomas Jefferson University Hospital in Philadelphia doubled
to $32 million. As a result, the hospital closed a maternity ward
and cut 270 jobs. Pregnant women are at risk when obstetrical
units close. When the Atmore Community Hospital in Alabama closed,
women had to travel 15 miles to a hospital that had an obstetrical
Hospitals have become dangerous places.
A recent article in Consumer Reports, "How safe is your hospital?"
reports on the increase in medication errors, hospital acquired
illnesses and inadequate administration of pain relief medication.
The quality of patient care is influenced
by nurse staffing levels. Researchers from the Harvard School
of Public Health reported in the New England Journal of Medicine
that the lower the patient-to-nurse ratio, the lower the risk
of complications. The risk of death is directly related to a nurse's
workload. Every additional patient over four increases the risk
of death following surgery by 7 percent. Dr. Jack Needleman, the
lead author of the study said, "I estimate that hundreds,
or perhaps thousands of deaths each year are due to low staffing.
This incontrovertible research should have resulted in immediate
implementation of safe nurse-to patient staff ratios. But the
Bush administration ignored the study, so patients will continue
The shortage of nurses has reached critical
proportions. On average, 13 percent of nursing positions at U.S.
hospitals are unfilled and some hospitals report vacancy rates
of more than 20 percent.
If you have to be admitted to the hospital,
Consumer Reports advises, "Given the shortage of nurses,
the most important thing you can bring with you to the hospital
is a reliable family member or friend to run interference for
Despite mountains of bad press, torrents
of abuse from patients denied care and HMO health care providers
who have become whistle blowers, HMOs are still in business.
One whistle blower is former Humana Medical
Evaluator Dr. Linda Peeno. She testified before Congress in 1996
about the heart transplant she denied to a patient who died as
a result. She stated, "Humana's only concern was costs. The
young man fit all the criteria, a donor had been found, his doctor
was ready to do the operation." Shortly after denying the
patient a heart transplant, a gigantic sculpture was purchased
for Humana's headquarters-costing roughly the same as the transplant
she had denied.
In the 1990s, HMOs were hyped as the way
to control health care costs and increase accessibility. Today
it is clear that managed care has done neither. Next year HMOs
will increase health insurance premium rates by 16 percent and
preferred provider organizations (PPOs) by 15 percent.
The reality is that health maintenance
organizations were never designed to solve the crisis in healthcare.
HMOs are in business to ration health care when they can get away
with it and make money for their shareholders. As Jack Lewin,
president of the California Medical Association put it, "We
have for-profit, investor owned insurance companies calling the
shots." HMOs have cut back on benefits, increased deductibles
and co-pays and at the same time have increased premiums. That
is, they are making us pay more for fewer benefits.
Thousands of lawsuits have been filed
against HMOs which have exposed their true motives-denying treatment
to boost profits. In Connecticut, doctors filed a lawsuit that
accuses the six largest HMOs of "systematically harming patients
by arbitrarily denying crucial medical treatment and illegally
withholding millions of dollars in payments to doctors."'
In Texas, a jury ordered Cigna HealthCare
to pay $13 million in damages to the family of a man who died
after the HMO forced him out of a skilled nursing facility. One
day after being sent home, with no home care in place, the patient
was taken to the hospital and died five days later.
HMOs have also been investigated for billing
fraud. In Colorado, a former customer service manager, turned
whistle blower, filed a suit alleging that Community Health Plan
of the Rockies was purposely delaying and denying payment of members'
Not everyone is denied though. The CEOs
of the giant HMOs continue to rake in millions. In 2000, executive
pay went up by 14 percent. The most highly paid HMO executive
in 1 999 was Cigna's Chairman Wilson Taylor who received $7.5
million in compensation. The CEO of United Healthcare was paid
The real drug lords
No issue has been more contentious in
health care than the cost of prescription drugs. The pharmaceutical
industry is despised by millions of people in the United States.
No wonder. Americans spend $150 billion on medications at prices
50 percent higher than Canadians pay for the same drugs.
The pharmaceutical industry is unapologetic
about the outrageous and exorbitant prices they charge for drugs.
They defend their right to profit from patients' pain, suffering
and death with a zealousness that is unmatched in the corporate
world. They know that desperate people in pain with chronic and
life threatening diseases will try to do anything to get medication.
They will buy less food, they will postpone bill payments, they
will borrow money or max out credit cards.
It's estimated that 65 million Americans
lack coverage for prescription drugs and pay full price out of
pocket. The cost of medication is a serious hardship for Medicare
beneficiaries. As a group, those on Medicare use more drugs than
any other segment of the population and yet, incredibly, Medicare
has never covered outpatient prescription medication. Fifty percent
of those with Medicare are without prescription drug insurance
at some point in time and nearly 30 percent have no coverage at
all. The drug lords know this, and like vultures, they swoop down
and prey on the most at risk people in society-the sick, disabled
and elderly-in order to make profits for their shareholders.
In the year 2000, Medicare beneficiaries,
many of whom are on fixed incomes, spent an average of $813 out
of pocket on prescription drugs, in 2001 they spent $928 and are
set to spend $1,051 in 2002. Seniors will spend in total about
$82 billion on prescription drugs this year alone.
A Medicare drug benefit has been talked
about for years, but no legislation has ever been passed. The
Republicans' prescription drug coverage plan keeps the pharmaceutical
industry in control. Under their proposal, the government would
pay subsidies to private insurers to get them to offer drug coverage
with a monthly premium of $24 dollars and an annual deductible
of $250. The standard Medicare insurance policy would cover 50
percent of drug costs up to $3,450 a year; after beneficiaries
spent $3,700 of their own money, the government would cover 90
percent of drug costs. The plan ignores the two central problems
for Medicare beneficiaries-drugs are too expensive and seniors
can't afford thousands of dollars out of pocket for premiums and
In 2001, the nine U.S. pharmaceutical
companies that manufacture or market the 50 top selling drugs
for seniors reported a profit. Merck & Co. reported net sales
of $47.7 billion and Pfizer of $32.2 billion. On average, the
nine companies reported profits of 18 percent of total revenues.
For the last 10 years, the drug industry
has been the most profitable in the U.S. Over that time period,
the industry's profitability was, on average, one-and-one-half
times that of the next most profitable industry. The industry
consistently rewards its investors. For the last five years, shareholders
have received an annual rate of return of 18.4 percent.
When it comes to rewarding the CEOs of
drug companies, money is no problem. The compensation packages
are obscene. The highest paid executives' average income, exclusive
of unexercised stock options, was nearly $21 million. The median
income was over $ 11 million. The highest paid of these executives
was Bristol-Myers Squibb's C.A. Heimbold, Jr. His compensation
in 2001 was a jaw dropping $74,890,918. That figure does not include
his unexercised stock options, which amount to $76,095,611.5'
The drug companies always defend these
high profit rates by arguing that in order to continue to research
and develop new drugs they need super profits. That's a lie. They
spend more money on advertising. In 1997, the Food and Drug Administration
(FDA) lifted the ban on drug company advertising. Pfizer reported
that it spent nearly $2.9 billion on advertising alone in 2001
and Bristol-Myers Squibb spent slightly over $1.4 billion.
On average, nine drug companies reported
profits of 18 percent of total revenues, but only 11 percent of
total revenues were allocated to research and development (R&D).
The top nine pharmaceutical companies in the U.S. spent more than
double on advertising, marketing and administrative costs in 2001
than they did on R&D, and the Schering-Plough Corporation
spent three times as much on marketing, advertising and administration
than it did on R&D. Merck's profits were nearly three times
the amount the company spent on R&D in 2001.
The truth is, the federal government,
using tax dollars, is the single largest investor in the pharmaceutical
industry, spending $20 billion annually on R&D-a figure that
is slightly higher than the total amount spent on R&D by the
nine largest U.S. pharmaceutical companies combined. As of 1997,
for example, 54 of 84 FDA-approved cancer treatments received
federal funding during development.
The 1980 Bayh-Dole Act maintains that
any drug invented "wholly or in part" with the assistance
of federal money has to be made available at a "reasonable
price." If the drug is not made available as such, the act
gives the government the authority to license the drug to a third
party. But the Bayh-Dole Act has never been enforced-not even
In keeping with the spirit of capitalism,
the pharmaceutical industry incurs none of the risk but all of
the profits. In order to guarantee the continued flow of these
astonishing profits, the industry is always on the offensive to
stop, block or delay any restructuring for as long as possible.
The drug companies are able to do this by employing an army of
G23 lobbyists, more than one lobbyist for every member of Congress.
Twenty-three of them are former members of Congress, 32 are former
staffers for the two House committees at work on Medicare drug
The 10 most active drug companies and
industry groups boosted lobbying expenditures from $43 million
in 2000 to $49.8 million in 2001. The biggest increase in lobbying
activity was by the drug industry's trade association, the Pharmaceutical
Research and Manufacturers of America (PhRMA). They increased
spending from $7.5 million in 2000 to $11.3 million in 2001.57
PhRMA is continually filing lawsuits all over the country to block
price reductions in order to ensure that Americans are forced
to pay the highest prices in the world for prescription drugs.
At the group's annual meeting in March
2002, PhRMA President Alan Holmer said, "We will not be out-thought,
we will not be outworked. Our mantra at PhRMA is this: We will
never allow for failure whenever the political circumstances are
at all manageable."
The hired guns for the industry have been
tremendously successful in staving off reform. The issues they
lobbied on the most in 2001 were: a Medicare prescription drug
benefit, patents, pediatric exclusivity and price. So far they
have been able to prevent the following: the effort to create
a prescription drug benefit under Medicare with cost containment
provisions, a law that would require drug manufacturers to sell
their products to Medicare recipients at the same low prices they're
sold in other industrialized nations and attempts to make generic
drugs more accessible.
The drug industry was positively gloating
after the midterm elections in November, 2002. They spent $30
million to help elect their allies in Congress, and according
to a front page article in the New York Times, "Drug companies
are devising ways to capitalize on their electoral success by
securing favorable new legislation and countering pressure that
lawmakers in both parties feel to lower the cost of prescription
Desperate to control skyrocketing drug
prices, states across the country have established drug formularies.
States are asking companies to reduce their prices to match the
lowest price if they want their drugs to be included in the formulary.
The creation of a drug formulary is, in part, an attempt to combat
drug industry advertising that promotes expensive drugs over cheaper
and just as effective generic drugs.
In states that have established a drug
formulary (Michigan, Florida, Louisiana), the PhRMA has filed
a lawsuit to block them. They even filed a lawsuit against Health
and Human Services Secretary Tommy Thompson to protest the Medicaid
preferred drug program that was implemented in Michigan.
A bill in Washington state would have
created a drug formulary for Medicaid and other state-funded health
plans but was defeated, due in large part to an aggressive lobbying
effort by the PhRMA. They funded a campaign to paint the bill
as one that "would hurt the poor and minority communities
by limiting their access to the top drugs."
The employer-based, private for-profit
health care system is a disaster for workers and their families.
Linking health care to employment leaves workers vulnerable to
the mercy of the market. The sickening reality is no job, no health
insurance. In virtually every union contract up for negotiation,
health care costs and who is going to pay more is bitterly disputed-from
dockworkers on the West Coast to hotel workers in Chicago.
Connecting health insurance to work gives
management more power, and can act as a brake on workers' ability
to struggle-if management locks workers out or workers strike,
health benefits can be terminated. The two must be separated.
Under capitalism, health care is treated
as a commodity to be bought and sold-like televisions. If you
can't afford it, you can't have it. But medical care is an essential
service. Millions of people in the United States view health care
as a human right and believe that everyone should have access.
Several states have even proposed single-payer solutions to the
crisis. One study commissioned by the Rhode Island legislature
concludes that a single-payer health insurance system providing
everyone with health care would actually be cheaper than the current
system that leaves tens of thousands without coverage. Overhead
and profits account for much of the astronomically high costs
of health care. For example, in Massachusetts, hospitals spend
25.5 percent of revenue on billing and administration, whereas
Canadian hospitals-where the system is single-payer-spend less
than half that much. When the former editor of the New England
Journal of Medicine comes out for a single-payer system, it's
unmistakable that the idea of national health care is no longer
considered to be a radical, fringe solution to the health care
crisis. Many employers, motivated every bit as much as the pharmaceutical
industry by the desire to boost profits, are concluding they need
some kind of health care reform to lower their costs. Even Al
Gore has felt compelled to get on the bandwagon, recently saying
that he has "reluctantly come to the conclusion that we should
begin drafting a single-payer national health insurance plan."
But the Clinton health care promises-which buckled under business
pressure-should be evidence enough that we cannot rely on Democrats
to hand us a better health care system.
We face a contradictory situation in which
economic recession and layoffs, combined with massive tax cuts
and budget shortfalls are worsening the health care crisis to
the point where the issue is beginning to force its way into the
media again. Yet those very conditions make it unlikely- given
the current administration's lovefest with the health care robber
barons-that they will come up with a solution. It is possible
to win a single-payer health care system in the United States.
But it will not happen without a massive social movement that
demands it. The health care corporations that profit off of the
pain and misery they cause will not give up the enormous profits
they make without a powerful challenge. And the Democrats and
Republicans who are bought and paid for by the industry will not
enact single-payer unless they are forced to do so.
Helen Redmond is a social worker and a
member of the /International Socialist Organization in Chicago.