The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

U.S. Medical-Industrial Complex Facing the Pandemic

Jul 19, 2020

Starting in early July, the coronavirus pandemic was once again raging through much of the U.S. like a wildfire. The U.S. already had the most number of cases and the highest death toll. Projections for late summer and early fall are worse: tens of thousands more deaths in the coming months, according to most predictions. And that isn’t even accounting for a likely “second wave,” or a “third wave.” Nor does it account for the flu season, hurricanes, wildfires and all the usual seasonal calamities.

So, instead of leading the global effort to defeat the pandemic, which is what one thinks should be expected of the world superpower with all of its advanced science and research facilities, the U.S. has been unable to do what other countries in Europe and Asia have done, as inadequate as their responses have been. And it imperils the rest of the world with reinfection coming from American travelers. The novel coronavirus has exposed the U.S. for what it is—a disaster in human terms.

Certainly, the Trump administration bears a great deal of responsibility for this dire situation. When the virus first appeared in China and ravaged the region around Wuhan, it was obvious that a global pandemic was a real possibility. But for close to two months, the Trump administration did nothing to prepare for it, fearful that any government preparations might provoke a stock market panic in an election year. Then, as the outbreaks grew and spread in this country, the Trump administration set up a reality-show task force, whose main purpose seemed to be for Trump to hog the spotlight. The federal government did little or nothing to centralize and coordinate neither policymaking nor the provision of needed medical supplies, leaving it up to the state and local governments to compete with each other, fueling confusion and chaos, which severely hampered the response to the pandemic.

Trump has consistently denied the virus’s dangers and opposed the measures the federal government’s own scientists prescribed to control the spread of the virus, fearing that they would hurt his election chances. In pandering to his electoral base of religious fundamentalists, science deniers and extreme right-wingers, he refused until mid-July to wear a mask in public, while trying to hold mass rallies. He has encouraged people to defy measures aimed at limiting the spread of the virus, and thus inflamed its spread even more, with most Republican governors and state and local officials following suit. Where Democratic and some Republican governors didn’t follow Trump’s lead, he encouraged extreme right-wing demonstrators to “liberate” those states.

U.S. Health Care: Costly and Bad

But responsibility for this dire situation goes way beyond Trump, and his sycophants, who head parts of the Republican Party.

It is the U.S. health care system itself that greatly exacerbated the catastrophe. None of the big institutional players in health care—not the insurance companies, not the big hospitals, not the manufacturers of ventilators, masks, tests or drugs—did anything to prepare for the COVID-19 train coming down the tracks. For decades their own doctors and scientists had been warning of the onslaught of a new virus that could be stealthy, easily transmissible, as well as perilous and deadly. But as in every other sector in this capitalist economy, these big businesses ran everything as lean as possible—in order to maximize profits and cash surpluses. They systematically squeezed all extra capacity out of their businesses. They wanted no empty hospital beds or empty ICU’s, no extra ventilators, no emergency stocks of personal protective equipment for the staff, no extra machines or basic supplies for virus testing. Extra capacity amounted to leaving money on the shelf, anathema to a system built around the aim of making profit. They cut staff relentlessly, leaving not enough staff to deal with ongoing health care needs even during ordinary times.

The health care system was left totally unprepared for the pandemic.

In the first weeks of the pandemic, these companies continued on their merry way.

When the first test for the virus, developed by the Centers for Disease Control and Prevention, turned out to be flawed and not useful, the commercial and hospital labs that deal with the actual blood work and viral analysis in this country did not develop their own test. “Why would they? There was no market,” explained Elizabeth Rosenthal in The New York Times (May 11). “At that time, it wasn’t clear that the coronavirus would produce a pandemic, and there was no billing code for a test and no sense of the price it could garner.” So, companies waited precious weeks and months for the pandemic to spread and for the U.S. government and the insurance companies to promise them a guaranteed profit. “Indeed, months later, after the billing code was created and the Medicare price was set at $51, labs complained that it didn’t cover costs and wasn’t attractive enough to motivate adequate response. The price was doubled,” wrote Rosenthal. Many testing companies used the severe shortages to secure even much higher prices than that.

Their inaction set the stage for the disaster that is now unfolding. The U.S. health care system entered the pandemic blind, with diagnostic tests delayed, in short supply and inadequate to detect the virus’s early spread. Hospitals with billions of dollars in revenue didn’t bother to secure one-dollar masks to protect staff. Local health departments charged with containing communicable diseases were quickly overwhelmed.

In the first months of the pandemic, the epicenters were concentrated in Seattle, New York and the northeast, Detroit and New Orleans. But little was done to prepare for what was to come in many other parts of the country. As of this writing five months into the pandemic, everything is still lacking in the South and West: tests, masks, hospital beds and ICU’s. Local public health departments in those areas of the country are as overwhelmed as New York once was when the virus hit there.

Nearly four trillion dollars is spent on health care every year in this country, an amount that comes to about $11,000 on average for every single person in the U.S. The companies that control that money, and all the resources that go with it, have used it to extract huge amounts of wealth for their stockholders and those linked to them, with individual executives throughout the sector—at insurers, hospitals, physician practices, and bio-pharmaceutical companies—commanding salaries in the tens of millions of dollars per year as a reward for looking out for their bankers and investors.

This gigantic health care crisis has laid bare just how grotesque the U.S. health care system has become. Even during ordinary times, the U.S. health care system delivers terrible health care for much of the population. Tens of millions of people are denied health care because they have no insurance or inadequate insurance. Major pharmaceutical companies make tens of billions in profit fueling the opioid epidemic. They double and triple the prices of vital drugs, like insulin for the treatment of diabetes, resulting in the deaths of thousands of people per year because they can no longer afford it. This system produces high infant mortality rates, and even falling life expectancies in three of the last four years.

During the pandemic, the disaster has grown many times bigger.

Hollowed-Out Public Health

Such an epidemic could only have been confronted by a public health system at the scale of the country, using modern resources and equipment, with a proper amount of trained staff, one that is organized as a single system with a high degree of coordination for directing resources where they are most needed. That means a high level of funding.

But when the pandemic broke out, the public health system was in a shambles. This is why the U.S. has been consistently behind the curve when it comes to testing, tracing and tracking. The public health labs didn’t have the capacity to test for the virus. So, private labs were paid to do most of the testing. But even as public health officials and private laboratories had managed to expand testing somewhat, they still did not have a system that coordinates and smoothly handles the avalanche of results.

The pandemic exposed what is in effect a near total lack of a public health care system in the U.S.

What does exist are almost 3,000 public health agencies in states, counties, cities and small towns. Their combined budgets come to less than two percent of all health care spending in this country. Even in ordinary times they don’t have the means to do everything that they are responsible for, including preventing disease by tracking and responding to epidemics, monitoring food safety, tackling sexually transmitted diseases, addressing the opioid crisis, assuring water safety, and on and on.

Obviously, funding public health is not a priority. Big companies can’t make as big a profit from preventing disease and improving peoples’ health and safety. Almost all health care spending goes to treating disease, even though this is completely contrary to the interests of the population—not to speak of much more costly.

Over the last 10 years, following the U.S. government’s bail-out of the banks, auto companies and insurance companies after the 2007–08 financial crash, all social spending was slashed repeatedly, with public health at all levels hit especially hard. Nationwide, public health departments had slashed 60,000 jobs, one quarter of all those existing in 2008. In the city of Detroit, for example, the public health department was effectively disbanded and 700 employees lost their jobs when the city went into bankruptcy in 2013. Since then, Detroit’s public health department was somewhat restored. But it still has only 200 workers for 670,000 residents. In California in the wake of the 2007–08 recession, over one-quarter of all the state health department labs were closed down—labs that if they still were functioning, would have helped relieve the strain of processing thousands of tests per day during the pandemic. California now relies on the same number of labs to serve 40 million people as it had in 1950, when the state population was 10 million.

All the cuts have left public health agencies in disarray and fragmented with a jumble of old and new technology, and data standards that don’t meet epidemiologists’ needs. In the middle of the pandemic, there is no single reporting system that health departments use to track the virus’s spread. Instead, some test results arrive via data feeds, while others come by phone, email, physical mail or fax, a technology retained supposedly because it complies with digital privacy standards for health information. These reports often come in duplicate, go to the wrong health department, or are missing crucial information such as a patient’s phone number or address. The absence of a standard digital process is hampering case reporting and contact tracing, crucial to slowing the spread of the disease. Many private labs have been hired to join the effort, but they have limited public health experience and so only increase the confusion.

The country that produces some of the most sophisticated public health research in the world—from the Centers for Disease Control and Prevention as well as from private institutions such as the Johns Hopkins Bloomberg School of Public Health, Harvard’s T.H. Chan School of Public Health and Columbia’s Mailman School of Public Health—relies on a severely underfunded system, a chaotic patchwork of services that often have little connection to each other.

The backward state of public health in this country is so scandalous, major publications as diverse as The New York Times, Washington Post, Los Angeles Times, Business Week and The Wall Street Journal, have been publishing exposés in which they call for major upgrades of public health departments. But even now, the opposite is happening. While the virus is spreading into new areas, state and local government entities, facing enormous budget deficits due to a worsening economic crisis, have begun laying off and furloughing their limited staff.

These cuts can only drive an even more chaotic response to the health care crisis.

The Health Insurance Racket in the Age of COVID-19

The particular way in which health care is delivered in the U.S. is based on an extremely complicated mix of different kinds of job-based private insurance, as well as various forms of public insurance coverage. This is also an important driving force behind the spread of the pandemic, and the increasing death toll.

It condemns tens of millions of people to not get tested, not see a doctor if they think they are infected. They can’t afford it, either because they are uninsured (10% of the population before the pandemic) or because they are under-insured, with high-deductible plans. Even many on Medicaid won’t be able to get tested because they don’t have a primary-care doctor, which in many places is the only way to get a test.

Since employers have responded to the pandemic with mass layoffs of over 40 million people by the end of May, tens of millions of workers, along with their families, have lost their employer-sponsored insurance. While some may get enrolled in Medicaid or a private insurance policy through the Affordable Care Act, even this gives them, at best, second-rate health care coverage. All of this spells much longer waits for testing and results, longer wait times to get into the ER, lower-quality health care if someone has to go to the hospital, plus the risk that once they get out, they will have to pay a much bigger portion of the health care bill—simply because their new coverage is much less comprehensive.

By withdrawing some or all access to health care for millions of people, the U.S. health care system itself is spreading the virus.

Job-based health insurance is also an advantage that employers use to impose unhealthy, worsening working conditions on the worker. Many workers will continue to come to work when they are sick, out of fear that if they lose their job, they will also lose their health care coverage for themselves and the members of their family. This advantage for the boss means that more workers will get sick, or come into work sick—which risks also spreading the virus at work, at home and in the neighborhood.

The big health insurance companies have increased their profit during the pandemic. That point was driven home when UnitedHealth Group (UNH), the Minnesota-based insurance giant that includes plan provider UnitedHealthcare (UHC), announced that its first-quarter profits grew by 6.8%. UNH, the largest healthcare provider in the U.S., was so profitable that it skimmed 1.7 billion dollars this spring to buy back 6.2 million shares of its own stock.

As emergency rooms and hospitals came under governmental orders that limited all but the most necessary non-COVID procedures, and as people fearful of infection stayed away, insurance companies continued to collect premiums but paid far fewer claims than they otherwise would have. More people died from other serious causes because of a lack of treatment.

As Wendell Potter, a former top executive at Cigna, tweeted, “While America’s reeling from the COVID-19 crisis, my old industry—the private health insurance racket—is winning big.”

Fatal Treatment

When the pandemic broke out and New York became the epicenter, New York Governor Andrew Cuomo famously repeated, “We are all in this together.”

What happened in New York shows the exact opposite.

Early on, New York’s elite hospitals did not jump in to set up outpatient testing centers, available to the population. That task was left largely to the few public hospitals, resulting in crowded lines, where large parts of the population had to go, risking more infection spread. The elite hospitals also generally did not share precious protective gear with those harder hit.

As the coronavirus tore through low-income neighborhoods, infecting low-wage and essential workers unable to stay home, the safety-net hospitals they were sent to were often crumbling. At University Hospital in Brooklyn, the roof leaked. The corroded pipes burst. In one of the intensive care units, plastic tarps and duct tape served as flimsy barriers separating patients. Nurses recorded vital signs with pen and paper, rather than computer systems. Already functioning at capacity before the pandemic broke out, these hospitals left hundreds of patients languishing in corridors, often unwatched by nurses or doctors. Some died after removing oxygen masks to go to the bathroom. Some low-income patients even missed the most basic of treatment strategies, like being turned onto their stomach. The technique, called proning, has helped many patients breathe, but because it requires several workers to keep IV lines untangled, some safety-net hospitals have been unable to provide it.

It was another story at the private medical centers in Manhattan, which have billions of dollars in endowments and cater largely to wealthy people with the best insurance. Patients there got access to heart-lung bypass machines and specialized drugs like Remdesivir, even as those in the city’s community hospitals were denied more basic treatments like continuous dialysis. And many private centers have beds that automatically turn for proning.

The disparity in treatment was so shocking that 20 doctors at the New York-Presbyterian Hospital, the city’s largest private hospital network, drafted a letter to the hospitals’ top administrators calling attention to the fact that people died at twice the rate at an understaffed satellite hospital than at a flagship center, even though the satellites were not treating sicker patients. At NYU Langone Health, another large network, 43 medical residents wrote their own letter to the chief medical officer expressing similar concerns.

The hospital staffs in the safety-net hospitals—overworked and under siege, day after day by the crush of patients—got no relief from other hospitals. “There was no cavalry,” Dr. Ralph Madeb, surgery director at the independent New York Community Hospital in Brooklyn, told the New York Times (July 1). “Everything we did was on our own.”

This disproportion has been true throughout the country. Most people didn’t die simply because they were old, or were already in poor or weakened health, as officials and the news media repeated over and over again. A major determining factor of whether a patient lived or died was their social class, which determined the kind of hospital they went to and the quality of health care that they received.

Those getting sick and dying were not just the patients, but the health care workers taking care of them. The virus has been pummeling the ranks of health-care workers, infecting at least 94,000 and killing at least 500, according to a count done by the Centers for Disease Control and Prevention in early July. The CDC admits that these numbers are incomplete, which means that the numbers have to be much higher, more catastrophic. Certainly, under the best working conditions, health care workers run a bigger risk of testing positive for the coronavirus than the rest of the population. But most of those casualties are due to very dangerous working conditions, especially very long hours of work under warlike conditions and the chronic lack of personal protective equipment. As the virus rampages through many parts of the country that are getting hit hard for the first time, such conditions are not only not improving, but widening and getting worse. Tens of thousands of health care workers are getting sick and sometimes dying because of exhausting and stressful working conditions and a chronic shortage of the most basic and elementary equipment that ordinarily costs pennies, thereby spreading the virus both to their patients and their families.

The 175-billion-dollar federal hospital rescue package that was instituted in March is only increasing the disparities. Because the federal formula for aid is based on how much money hospitals take in, the biggest and richest hospitals are getting the most money. Meanwhile, the community and safety-net hospitals that have been bearing the heaviest burden of treating COVID-19 get little.

Vaccine Illusions

The Trump administration has been holding out the hope of ending the epidemic with a brand-new coronavirus vaccine before the November election. The name of this crash federal program, Operation Warp Speed, says a lot about Trump’s focus. He really needs a “win” as quickly as possible to rescue his fading election chances, especially since his earlier suggestions of injecting bleach or taking hydroxychloroquine to beat the virus didn’t go over so well.

The government has already placed a total of four billion dollars for vaccine development with six companies—two of which are brand-new start ups that have never produced a drug, much less a vaccine. Billions more in federal money is on the way. Several companies have already started to build manufacturing facilities so they can begin to mass-produce a vaccine as early as September, without any idea of what they will be producing.

The race to be the first company to produce a successful vaccine has turned into a real gold rush, given the possibility of profits in the tens or even hundreds of billions of dollars. Every rumor, every hint of a successful drug trial has fed an orgy of speculation on the stock market and turned a few corporate executives and investors into multi-billionaires overnight.

But there is a catch: the vaccines under development may not be safe, or may not be effective. Moreover, there is always the danger that they will make the disease worse. Usually, it takes many years of research and rigorous testing to make sure that a vaccine is both safe and effective. Very often scientists’ efforts fail completely. For example, scientists have tried and failed to produce a vaccine for HIV-AIDS for close to 40 years. “If you’re going to use a vaccine on billions of people you better know what it does ... We’ve seen in the past, for example, with the swine flu, that the vaccine did more harm than good. We don’t have a great history of introducing vaccines quickly in the middle of a pandemic,” said Merck CEO Kenneth Frazier, whose company is also developing a vaccine.

But all that talk of a vaccine ending the pandemic in a very short time is being used to “allow politicians to tell the public not to do the things that the public needs to do like wear the damn mask ... okay?” said Frazier. And, one can add that it’s also an excuse for the health care system not to provide necessary protective equipment, or test and trace at effective levels, or to scale up critical care centers that have been consistently overwhelmed.

Trump has made it clear that he intends to produce an October surprise on the eve of the election by hyping a new vaccine, just as he has, from the beginning, looked for any excuse to proclaim that the raging pandemic is already behind us—or at least that we can “learn to live with it.”

Health Care: Reform or Revolution

The pandemic has exposed the health care system in this country for what it is: rotten to the core. So politicians, health care policy experts, newspapers and business journals have issued calls for reform. Expanding “Obamacare,” enacting “Medicare for All,” more public health care, regulating and controlling drug prices, are all ideas that are being discussed.

Of course, the health care system has been reformed before. But even in the most favorable of cases, when Medicare and Medicaid were introduced under the pressure of the widespread fights by the black population in the 1960s, whatever gains were made for the working population were quickly eroded by the medical-industrial complex, which developed those two programs into an increasingly chaotic system marked by ever-widening class disparities.

Health care is a product of capitalist development in this country. For close to a century, the capitalists in this country have targeted health care directly as a profit-making enterprise. And this has only increased and developed over the years. Today, given its size, the health care system is one of the most important ways that the capitalists extract wealth from society. Health care is really big business, in which big insurance companies, hospitals, and drug manufacturers drive smaller companies out of business, with growing concentration and monopolization. At the same time, big financial groups descend on various sectors in health care, buying up hospitals, doctor’s groups and staffing companies, health care suppliers, and nursing homes in order to extort, plunder and rob.

The current system does not run as a system whose basic aim is deliver health care, but to deliver more profits.

What makes the health systems in other “advanced” countries somewhat different is that they had a somewhat different development. For a much longer time, health care systems were set up as a way of maintaining the workforce. Health care costs were more controlled and regulated by these governments, which organized it as a system. But today, all those governments are cutting spending on health care in order to fund more tax breaks and subsidies to their own capitalists, just like in this country, while increasing parts of the systems are being sold off and privatized. All those health care systems are also in the process of decline and decay.

Health care in the U.S., the capitalist world’s superpower, is just much further along in that downward development.

What working people, especially, have been going through with this pandemic is absolutely insane. The human cost is already immeasurable ... and it is growing steadily. But it is an illusion to believe that there is a legislative fix to the problem. The capitalists have not changed how their health care system functions, not even in order to save lives in the middle of a pandemic. So, they certainly aren’t going to agree to any meaningful reform that could cost them some of their profits, especially not in the middle of a severe economic crisis, given what a vitally important source of profits the health-care system is.

In the end, the question of how health care is organized and whose interests it serves is a question of who has the power. Today, it is the capitalist class. But the working class could organize its own power to tear the capitalists’ death grip from the health care system. It is certainly in working peoples’ interests to do away with the chaos and class disparities of the present system, and make sure that the enormous scientific gains in public health and medicine can benefit everyone.

July 19, 2020