By Peter S. Arno and Philip Caper
Health Affairs Blog, March 25, 2020
There is a large elephant in the room in the national discussion of Medicare for All: the transformation of the US health care system’s core mission from the prevention, diagnosis, and treatment of illness—and the promotion of healing—to an approach dominated by large, publicly traded corporate entities dedicated to growing profitability and share price, that is, the business of medicine.
The problem is not that these corporate entities are doing something they shouldn’t. They are simply doing too much of what they were created to do—generate wealth for their owners. And, unlike any other wealthy country, we let them do it. The dilemma of the US health care system is due not to a failure of capitalism or corporatism per se, but a failure to implement a public policy that adequately constrains their excesses.
Since the late 1970s, US public policy regarding health care has trended toward an increasing dependence on for-profit corporations and their accompanying reliance on the tools of the marketplace—such as competition, consolidation, marketing, and consumer choice—to expand access and assure quality in the provision of medical care.
This commercialized, commodified, and corporatized model is driving the US public’s demand for fundamental reform and has elevated the issue of health care to the top of the political agenda in the current presidential election campaign.
We must therefore ask: How is it that we spend more on health care than any other nation, yet have arrived at such a sorry state of affairs?
The answer is that only in the United States has corporatism engulfed so much of medical care and come so close to dominating the doctor-patient relationship. Publicly traded, profit-driven entities—under constant pressure from Wall Street—control the financing and delivery of medical care in the US to an extent seen nowhere else in the world. For instance, seven investor-owned publicly traded health insurers now control almost a trillion dollars ($913 billion) of total national health care spending and covers half the US population. In 2019, their revenue increased by 31 percent, while their profits grew by 66 percent.
The corporatization of medical care may be the single most distinguishing characteristic of the modern US health care system and the one that has had the most profound impact on it since the early 1980s. The theology of the market and the strongly held—but mistaken—belief that the problems of US health care can be solved if only the market could be perfected have effectively obstructed the development of a rational, efficient, and humane national health care policy.
What Is The Best Approach To Reform?
It is not an exaggeration to say that no reforms except publicly financed, single-payer universal health care will solve the problems of our health care system. This is true whether we are talking about a public option, a Medicare option, Medicare buy-in, Medicare extra, or any other half-measure. The main reason is because of the savings that are inherent only in a truly universal single-payer plan. Specifically, the administrative and bureaucratic savings gained by eliminating private insurers are the largest potential source of savings in a universal single-payer framework, yet all the “option” reforms listed above leave largely intact the tangle of wasteful, inefficient, and costly private commercial health insurers. The second largest source of savings comes through reducing the cost of prescription drugs by using the negotiating leverage of the federal government to bring down prices, as is done in most other developed countries. The ability, will, and policy tools (such as global budgeting) to restrain these and other costs in a single-payer framework are the key to reining in the relentless rise in health care expenditures and providing universal coverage.
The various “option” reform proposals will not simplify our confusing health care system nor will they lead to universal coverage. None have adequate means to restrain health care costs. So why go down this road?
The real struggle for a universal single-payer system in the US is not technical or economic but almost entirely political. Retaining the status quo (for example, the Affordable Care Act) is the least disruptive course for the existing medical-industrial complex, and therefore the politically easiest route. Unfortunately, the status quo is disruptive to the lives of most Americans and the least effective route in attacking the underlying pathology of the US health care system—corporatism run amok. Following that route will do little more than kick the can down the road, which will require repeatedly revisiting the deficiencies in our health care system outlined above (see full article at link) until we get it right.
The US public and increasingly the business community are becoming acutely aware of the rising costs and inadequacies of our current system. It is the growing social movement, which rejects the false and misleading narratives, that will lead us to a universal single-payer system—truly the most effective way to reform our health care system for the benefit of the US people.
Peter S. Arno, PhD, is an economist and senior fellow and director of health policy research at the Political Economy Research Institute at the University of Massachusetts–Amherst and a senior fellow at the National Academy of Social Insurance.
Philip Caper, MD, is a physician and founding member of the National Academy of Social Insurance and currently serves on the Board of Maine AllCare.
By Don McCanne, M.D.
Earlier this month, the National Academy of Social Insurance released a report on expanding Medicare eligibility through three options: lowering the eligibility age for Medicare, establishing a Medicare buy-in or a Medicare-like public option, or extending Medicare to cover everyone (Quote of the Day, 3/4/20). Peter Arno and Philip Caper were members of the study panel that wrote the report, but they felt that the final report missed the elephant in the room: “the transformation of the US health care system’s core mission from the prevention, diagnosis, and treatment of illness—and the promotion of healing—to an approach dominated by large, publicly traded corporate entities dedicated to growing profitability and share price, that is, the business of medicine.”
They decided that it was important to issue a “minority view” in response to the NASI report that would raise alarms over the business transformation of US health care. Excerpts of their response appear above though it is highly recommended that the full article be accessed at the Health Affairs website, not only for the sake of completeness but also because the article should be distributed widely to inform the public on why our health care system requires much more than a Medicare option to fix its problems.
Perhaps if enough of you recommend the article to Joe Biden, he might actually read it. He needs to. For that matter, so does Donald Trump.
PNHP does not support any political candidates for office, but we do encourage all candidates to be thoroughly and accurately informed on health policy so that they will support health care measures that are truly in the best interests of all of us.
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