The Spark

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

United States:
Managed Care:
Wall Street's Prescription for the Medical Industry's Profits

Apr 25, 2001

Traditionally, the price for health care has been higher in the United States than anywhere else in the world. But in the 1980s, those costs really skyrocketed. The total amount of money spent on health care in the U.S. went from a little more than 200 billion dollars in 1980 to somewhat less than 600 billion ten years later. Pharmaceutical costs were rising the fastest, giving the pharmaceutical industry the top spot among all industries as far as its rate of return both on revenues and assets. But all medical costs across the board were fast outstripping the rate of inflation.

The largest companies in the U.S., locked into comprehensive medical insurance plans for employees either through union contracts or long-standing tradition, were registering such rapid and big increases in what they paid out for these plans that their profits suffered.

Some companies changed the terms of these plans so as to require employees to pay a bigger part of the monthly premium for medical insurance. Other companies introduced such premiums for the first time. According to Health Affairs (November-December 1999), the monthly premium paid by employees more than doubled in 10 years, going from $44 per month in 1988 to $91 in 1998, adjusted for inflation. Companies also changed the terms of these plans to require higher co-pays for the services which were used.

At the same time, the corporations found other ways to lighten their burden at the expense of their employees by substituting part-timers and temps for full-time workers or by subcontracting work to so-called independent companies. Perhaps even more important than the wage reductions associated with these measures were the cost reductions in benefit plans like health insurance; most of these workers got no heath insurance at all. These changes accounted for an important part of the decrease in recent years in the number of workers covered by medical insurance. Last year, over 44 million people, one-sixth of the population, had no health coverage whatsoever, an increase of more than one-third over the last 10 years. Almost all are low-income workers and their families, including 11 million children. And this drastic worsening of the workers' situation has come in a period considered to be one of "prosperity!"

But some of the largest companies had also been pushing for the government to "socialize" their medical benefit costs at least to the extent that the state would take over the financing of medical care. Such proposals had always been opposed, however, by the health care industry. The big insurance companies, hospitals, pharmaceutical companies, hospital equipment companies not to mention the AMA (American Medical Association) feared that any kind of government takeover would result in regulations cutting into their profits. In 1993, after Bill Clinton was elected president, his administration tried to find a way to reconcile these differences by presenting a health care reform plan which supposedly answered the claims of all sides. Costs for the big companies would be covered; the insurance industry would be given the right to administer the plan; as a sop to the rest of the medical care industry, Medicaid would be reworked to include small companies without insurance plans; and costs would be contained by imposing "managed care" plans across the board. Of course nothing was spelled out specifically, and, with all the competing interests looking suspiciously at each other, the plan never got off the ground. Clinton's reform went down to defeat.

In fact, the big corporations didn't really push all that hard once Clinton's proposals ran into resistance since they had another option: the "managed care" plans, or HMO's, which were already being put in place by private insurance companies. The insurance industry borrowed the term HMO (Health Maintenance Organization) to describe what they were setting up. But these new HMO's had little resemblance to the ones that had been established in the 1930s and 1940s, often as co-operatives by labor unions among others, to provide better medical care to larger numbers of people. Plans like Kaiser in California, HAP in Michigan and HIP in New York contained many services not included in traditional health insurance plans: along with coverage for hospitalization and doctor's services during hospitalization which were standard under traditional plans, they also provided primary and preventive care, tests and regular physical exams, and cheaper medication. Plans like this saved money by stressing preventive care, which increased the chances of catching medical problems early, and by doing most of their work in-house, which saved on the layers and layers of administrative costs associated with the traditional means of providing service. Finally, the older HMO's were not run for profit although, of course, they couldn't help but contribute to the profits made elsewhere, for example, by the pharmaceutical companies. Whatever problems might have existed with these earlier HMO's many of which derived from the AMA's harsh opposition the original HMO's shared little but the name with the ones which began to develop in the 1970s.

In these new profit-making HMO's, the private insurance companies essentially act as middlemen, contracting out services to doctors' groups, hospitals, laboratories, etc. A big part of the whole operation is simply overhead: layer upon layer of administration, which anyone who has had to deal with these companies has come to know, not to mention the layer upon layer of profit. By contrast to the traditional Blue-Cross style plans, the new managed care companies did hold the line on health care costs, however at least for a few years. But they did it mainly at the expense of the patient, essentially by rationing the health care available through utilization boards, gatekeepers, formulary lists of acceptable drugs; by excluding people who might need "too much" medical care or who had prior medical conditions; and by setting lifetime benefit caps. In addition, many of these plans gave "bonuses" to doctors who used fewer and cheaper services. When people (or more usually their employer) sign on to a plan, they sign most of their rights to make medical decisions over to the plan.

As managed care became more and more prevalent, the horror stories began to surface: of sick and vulnerable people trapped in endless bureaucratic webs, of patients young and old dying because they were denied a medical test or an operation simply because it might cost a doctor a bonus or because some bureaucrat refused to okay the procedure. Even Superman (movie star Christopher Reeve) was kicked off his medical plan after he broke his back in a highly publicized accident which had left him a quadriplegic: his health care bills had exceeded his lifetime benefit cap. Reeve had no recourse. It's obvious that for ordinary people whose plight passed without any notice the situation was worse.

In other words, not only weren't these new "HMO's" an improvement for the population, they led quite directly to a reduction in the amount and the quality of medical care provided.

Managed Care: A Benefit for ... the Largest Corporations

The roots of this transformation date back to the recessions of the 1970s. In 1974, Henry Ford III and the CEO's at 145 other major companies created the WBGH (Washington Business Group on Health) in an attempt to look for ways to limit their costs for providing medical coverage to their employees. Their publicly avowed aim was "to reconcile the interests of the health care providers with those of the consumers" that is, the companies which bought these policies. The WBGH wanted to restructure medical care along the general lines that had already been laid out by two Nixon advisors, Dr. Paul M. Ellwood and Professor Alain Enthoven. In place of the traditional "fee-for-service" plans, under which the insurance company pays a doctor or hospital each time a service is performed, they proposed "managed care" plans, under which providers of medical care would be paid in advance for their services by the insurance companies which contracted with them. According to Ellwood and Enthoven, the old "fee-for-service" form of payment for health care, dominated by the Blue Cross/Blue Shield medical insurance companies, was wasteful. They argued that this form of financing not only did not control prices, it often boosted costs by encouraging unnecessary medical services. Their answer to this problem was "competition." Under "managed care," the providers of medical care would compete with each other to get the contracts from the insurance companies, and this would force the "providers" to hold down their own costs. In medical care, just as in so many fields, it was to be the "market" which would lower costs.

The year before, the Nixon administration had submitted legislation to encourage this kind of restructuring. But Nixon's bill, which provided loans and subsidies to HMO's, met strong opposition from the AMA, which saw it as a threat to the quasi-independence of most of the medical profession. The AMA succeeded in introducing a lot of restrictions on HMO's into the bill and on reducing the financial aid. But, with pressure increasing from the Washington Business Group on Health, Congress in 1976 and again in 1978 removed restrictions and increased the financial incentives to companies ready to establish HMO's. Clearly, the AMA was not strong enough to stop a reform the biggest industrialist capitalists wanted and that the biggest insurance companies were pushing for. In the early 1980s, Congress passed new laws that allowed Medicare patients to be funneled into HMO hospitals. Finally, regulations were changed by the ICC, allowing HMO's to operate on a national level. Previously, following the pattern of Blue Cross-Blue Shield, most health insurance companies and hospital systems operated on a state or even a local level.

All of these measures, subsidies and rulings encouraged the flow of private capital into the newly created HMO's. By 1983, two big insurance companies, Prudential and CIGNA, had offered their first HMO plans. In order to attract the capital that would allow them to compete with the big insurance companies, several other HMO's, which had originally been set up as "non-profit" for tax purposes, changed their tax status and began to raise money through offerings on the stock exchange. U.S. Health Care Systems was the first formerly non- profit HMO to do this.

In the years that followed, as more insurance companies began to open up HMO's, they experimented with different kinds of plans, including HMO's, PPO's (Preferred Provider Organization) and POS's (Point of Service). With slight differences between them, all of them were organized in such a way that the providers of medical services were "encouraged" to lower costs.

At the beginning, these plans covered only a small part of those who had medical insurance. But they laid the groundwork for the subsequent development of the industry. And when the Clinton medical reform disintegrated into thin air, the big corporations turned to private insurance companies en masse. The vast majority of workers who continued to have employer-sponsored medical health insurance were rapidly shifted into managed care plans. By 1999, 91% of those covered by employer-sponsored medical plans were in managed care, up from only 27% in 1988.

During this same time period, there was a rapid increase in the number of patients who died as the result of "medical accident." In fact, it has become the leading cause of death in hospitals. Whatever other reasons exist for these "accidents," part derive from the various cost-cutting measures, among which are 12-hour days on nursing floors and a refusal to hire the needed number of medical personnel. There are simply too few medical professionals charged with caring for too many patients.

The benefits of managed care kicked in for many of the big companies by the mid-1990s as the overall cost of providing health benefits for their workforce stabilized. In a number of cases, the big companies got away with paying lower premiums. This did not prevent them, however, from using the pretext of "rising costs" to require higher co-payments and premiums from their employees.

Managed care policies have been such a money saver for the private sector, it is no wonder that the government began to look in that direction for the medical plans it paid for. Almost two-thirds of those on Medicaid were placed in managed care programs. As for Medicare, which had already undergone severe cost-cutting measures by the government, there was a push to get retirees into a managed care plan. Today, 16% of retirees are in such a plan. Managed care companies were even contracted to run medical services such as they are in many jails and prisons.

In a case argued before the Supreme Court last year, several justices explained why the courts preferred not to intervene on behalf of patients who feel they have been denied medical services because doctors are given incentives not to give them. Explained Chief Justice William Rehnquist, "Other beneficiaries are going to suffer" if the health plan decides in favor of the person filing claims. And, argued David Souter, one of the court's more "liberal" members, any HMO had a strong financial interest to hold down health costs. "Unless they do so, the HMO will go out of business."

That is, medical care, just like any other business is ruled by the necessities of capital, that is, to make a profit.

The Rise and Eclipse of Public Health

It was not private capital, however, which first developed the health care system in this country. In fact, the earliest steps to improve health care for the population were taken by the state in the form of a public health policy.

In the mid-1800s, the biggest health care problems in the cities came directly out of the conditions in which working people were forced to live. Raw sewage in the streets, extremely overcrowded slums, polluted drinking water, streets that were thick with animal and human wastes all these conditions bred epidemics such as cholera, tuberculosis, yellow fever, diphtheria, typhoid. Medicine at that period did not know precisely what caused these diseases, not to speak of having the means to treat them. But it was observed that when the unsanitary conditions were ameliorated, the incidence of epidemics subsided. Starting in the period following the Civil War, under the pressure of social reformers, some state and local governments formed public health boards and carried out large public works to clean up the worst of the conditions. This was never a national, coordinated effort. They were limited to a few cities and states. But where they were implemented, these measures brought results. As early as the 1870s, mortality rates began to decline.

At the same time, important advances in medical science and its tools – the discoveries of disinfectants, germs, vaccines and x-rays gave medicine means to diagnose and treat some diseases. The medical profession in this country began to transform itself through better training and regulation of its ranks. Through the (AMA) American Medical Association and the (AHA) American Hospital Association, doctors cemented an alliance with the large foundations set up by the robber barons of those times, Rockefeller and Carnegie. New state of the art hospitals and medical schools were built while diploma mills and butcher shops were closed up, putting medicine on a more professional basis.

But on the other hand, the medical profession fought against anything that could cut into their fiefdom. The AMA, for example, acted as a kind of guild, setting the number of doctors at levels that were artificially low. Most physicians, pharmacists and drug manufacturers supported public health institutions and activities so long as they funneled patients and customers to the medical professionals. But as soon as the public health institutions acted as competition, the medical establishment fought against them. For example, starting in the 1890s, the New York City Health Department pioneered an ingenious way to manufacture inexpensive diphtheria serum. It distributed free diphtheria testing kits to physicians, manufactured and sold diphtheria and other serums to physicians and administered serum free in clinics to low-income patients. Fatalities from diphtheria declined dramatically, but that was not the concern of pharmaceutical manufacturers and physicians. Fearing competition, they demanded a halt to "municipal socialism." A petition was submitted to the City of New York, signed by more than a thousand physicians and druggists, calling for an end to the dreaded manufacturing and distribution of vaccines. The program was gutted.

By the 1920s, public health institutions were limited to diagnosing and referring patients to private doctors. When, for example, a Chicago venereal disease clinic bucked the trend by providing treatment to low-income patients at a fraction of the cost charged by private physicians, the Chicago Medical Society expelled the clinic's staff physicians.

By the 1930s, public health had become permanently exiled and marginalized. From the point of view of advancing the health of the population, this made no sense. The rapid increases which did take place in life expectancy in the U.S. had come about mainly "as a result of large-scale health efforts that had sought to prevent infectious diseases through community intervention... The basic philosophy had focused on the collective: the health of individuals would be protected by raising the level of the health of the community as a whole. Some of the gains were the result of economic improvements and rising standards of living. Others reflected enhanced nutritional benefits." (Laurie Garrett in her book on the public health system, Betrayal of Trust)

The most effective approach of dealing with health care as limited as it was was largely abandoned. The U.S. health care system was being organized according to private interests and not the public good. Health care was being stuffed into the framework established by the class divisions of capitalist society. With access to medicine based on the individual's ability to pay, those who benefitted most from the advances in science and medicine were restricted to a narrow part of the population. The vast majority of the population working class and farmers received little or no medical care; they were relegated to the charity wards in the big cities, thrown on the mercies of churches in the rural areas. And in a society ruled by Jim Crow, medical care for the black population was even more restricted.

The Rise of Private Insurance

In the 1930s, as a response to an immense workers' movement in this country, the bourgeoisie was forced to accept a whole series of reforms, including union recognition in basic industry, the end of child labor, unemployment insurance and a socially based system of pensions, culminating in the Social Security Act of 1935. This act also included a proposal for a government organized medical insurance program. It had been furiously opposed by the AHA and the AMA, which managed to beat it back.

Trying to reinforce hospitals facing financial collapse in the middle of the depression and looking to undercut proposals for government-sponsored medical insurance, the AHA (American Hospital Association) began to move toward setting up non-profit insurance companies, that is, Blue Cross. Blue Cross was organized to pay the hospital bills of those who bought its insurance policies. The first such plan was established in Sacramento California in 1932; it was soon to be followed by Blue Cross plans elsewhere. By 1939, there were plans in 25 states. In 1939, the AHA urged doctors to set up Blue Shield to pay doctor's bills in hospitals. Both plans were set up so as to give the AMA and the AHA control over them. And with the costs of medical care spread over all those insured, the monthly premiums started out relatively low, making medical care affordable for the first time to significant parts of the middle class and even to some parts of the working class. Blue Cross initiated a flow of money into the medical field which financed the growth first of hospitals, then eventually of drug companies, medical goods and the rest of the infrastructure.

At the same time, some paternalistic industrialists, like Henry Ford in Michigan and Henry J. Kaiser in the West, were also building hospitals and medical facilities to contain their costs from injuries in the workplace. Although most of the population was still excluded, medical coverage was slowly spreading.

During the World-War-II wage freeze, benefits like medical insurance became more important, particularly in areas with labor shortages. Kaiser, for example, extended its medical plan throughout its West Coast shipyards. In 1943, the government began to subsidize private insurance by allowing companies that bought it for their employees to deduct part of the cost of the benefit from their taxes. (Currently, this subsidy is worth over 70 billion dollars per year.) Finally, it was during this same time period that the first co-operative HMO's were established: some of them by unions, some more broadly by consumer groups. Some merged with the plans or hospitals set up by industrial companies. But once again, the AMA opposed this development by bringing complaints against physicians who joined the staffs of these early co-operative HMO's, getting them expelled from local Medical Societies, even threatening their licenses.

After World War II, the issue was once again raised: how would the payment for medical care be organized? The strongest labor unions in the most profitable industries decided in favor of incorporating medical insurance in their own individual contracts. In 1949, the steel workers union won this demand, followed by the auto workers in 1950. Over the next years, these gains spread widely to workers in other union shops, and even to non-union companies like IBM, which regularly extended union-won benefits as a way to put up a barrier to unions.

Nonetheless, the fact that the unions fought for medical coverage on a company-by-company or even shop-by- shop basis worked against the extension of medical coverage to the whole working class. While the better paid sections of the working class were getting medical insurance, the majority of the workers had very little or nothing. And this puts limits on medical care, even for those who had coverage. Since insurance was job-based, if workers lost their jobs, they lost their health insurance also.

The fact that the unions did not fight to make a broader fight for universal health coverage for the entire working population as a whole reflected how corporatist the union apparatuses had already become only a few years after the formation of the CIO.

Medicare-Medicaid: Won by Social Struggle

Most black workers, condemned to the smaller, more marginal work places, got the lowest wages and few or no benefits. With no pensions to supplement their small Social Security payments and without the health care coverage that usually went with private pensions, they couldn't retire without suffering the most dire poverty.

The rise of the black movement in the 1950s and 1960s challenged the idea of health coverage based on employment by demanding health coverage paid for by the government and extended to all who needed it. In 1965, under the pressure of the rising black movement, the federal government finally agreed to institute two programs, Medicare and Medicaid, that is, medical coverage for the elderly and for the poor. This was an enormous gain. If it benefitted the black population which had fought for it, it also benefitted the tens of millions of elderly and poor white workers who had not had any health coverage before either.

Of course, right up to the passage of Medicare and Medicaid, the AMA and AHA had opposed these measures, as they had opposed all earlier forms of government medical insurance. But they soon discovered that these plans presented health care providers with huge possibilities. After all, the federal and state treasuries were suddenly covering medical bills for sections of the population long denied medical service. Moreover, the government was paying on a "fee-for-service" basis without establishing any controls over the "fees." The two plans were quickly turned into "cash cows" for the medical industry. Doctors performed unnecessary consultations, treatments, operations and tests. Hospitals, medical suppliers, laboratories, private nursing home chains (which are usually owned by large insurance companies and which is where most Medicaid money actually goes) all went looking to get in on a practically guaranteed income stream and their prices rose phenomenally. To accommodate the increase in usage of the medical care system, the government provided financial inducements for the construction of hospitals and training of personnel and all done with little control over the costs.

There was one other important advantage that these two programs gave to the medical profession: legally they removed the long-standing implicit assumption that hospitals and doctors had the responsibility to treat anyone who needed treatment, whether or not a person could pay. The AMA had long argued against socially organized medical plans by insisting that the medical profession assumed this responsibility itself. Even if in practice this responsibility was more ignored than respected, the fact is it had a certain legal standing. Medicare and Medicaid together never began to cover all the people who couldn't afford medical care, but the legal assumption that they were available to anyone in need removed the legal risk to doctors and hospitals which refused service. In recent years, private hospitals routinely refuse service except for emergency treatment when there is an immediate threat of death or grave bodily harm and even in this case, hospitals can refuse to treat someone on the basis of availability.

These programs helped feed the zooming medical costs, which rose at rates many times faster than the increase in inflation. Between 1965, when Medicare was passed, and 1970, hospital bills doubled from 14 to 28 billion dollars. No doubt part of that increase was due to increasing numbers of people taking advantage of health care that had formerly been denied them. A significant part was due to the rapid increase during this time period of medical technology, which itself had been encouraged by the infusion of federal money into the medical industry. But much of the increase simply took the form of extra profits going to the health care providers.

This then led the government to start cost-cutting its own programs but at the expense of the patients. Five years after Medicare was instituted, the elderly were paying as big a share of their income for medical care as they had been before Medicare was enacted. Their deductibles and exclusions have increased to the point that Medicare today covers only about half their medical expenses not taking into account the cost of prescription drugs, which are not paid for even partially unless the person on Medicare pays for one of the so-called "medigap" policies issued by private insurance companies.

Medicaid coverage for the poor has also been cut back in one "welfare reform" after another. The result of these "reforms" has led to today's situation: a quarter of those living even in "severe poverty," that is, well below the official poverty line, do not receive Medicaid or the Children's Health Insurance Program. Moreover, there are now severe restrictions of what Medicaid will pay. And this threw the poor back into rundown health care facilities for treatment.

The rapid erosion of these reforms won by the black movement coincided with a retreat of the social movements. The unions, whose corporatist view of the matter had led them to play almost no role in the fight for Medicare and Medicaid, made even less effort to organize a fight to protect them.

Speculation and Concentration

All this laid the groundwork for the emergence of "managed care." And, as we said, private insurance costs did stabilize in the early years when managed care was taking over the field. But not for long. Already by 1998, a new spurt of price rises had begun. Whatever cost-cutting the insurance industry had imposed was more than made up by the new layer of profit skimmed off by the insurance companies and by increasing levels of debt tied to the financial speculation in medical facilities which had begun to run rampant.

In a 1997 article in Health Affairs, David L. Manning, who was then chairman of Columbia/HCA, boasted, "Since 1992, equity investors [stockholders] have infused the nation's healthcare system with more than 100 billion dollars. Hospitals are the second-largest beneficiaries of this capital, exceeded only by health maintenance organizations (HMO's)."

Those 100 billion dollars were not being "infused" to develop medical care with the aim of delivering it to more people. Rather, the financial industry which "infused" the money the big private insurance companies, the investment banks and Wall Street was essentially engaging in a wave of mergers and acquisitions. The reorganizing of medical care by the big financial interests not only created "managed care." It also created an increasingly monopolized situation in medical care, with everything which that means for prices. Currently, only six huge HMO companies dominate the private health insurance industry. The biggest today is Aetna, which merged with New York Life in 1998 after merging with U.S. Healthcare in 1996; today Aetna controls almost 10% of the entire U.S. market, including almost 40% of the market in Philadelphia and 38% in Atlanta. Aetna, after its latest merger, supplanted Travelers, which had been the biggest after its mergers with MetLife and United Health Care.

As for the hospitals, Columbia/HCA, which is Manning's company, provides the perfect example of what that "infused capital" accomplished. In 1990, Columbia owned only three hospitals in El Paso, Texas. But by 1995, it had risen to become the largest hospital company in the country, owning 300 hospitals with revenues of 17 billion dollars, employing 170,000 people in 37 states, merging along the way with HCA (Hospital Corporation of America). Columbia/HCA did not build new hospitals. It simply took over existing community hospitals, in the process closing down many of them in order to avoid competition with its other holdings. In other words, this capital is not being "infused" to increase the ability of the medical care field to deliver better health care, but to facilitate the chase by companies to corner this profitable market.

Manning and his company provide another example of what is happening to the medical care field. Eventually, Manning was forced to resign, but not before Columbia/HCA became the power in the field. Columbia/HCA agreed to plead to lesser charges of fraud and racketeering and to get rid of Manning. But this slap on the wrist did not put an end to Columbia/HCA's activity. It just slowed it down for awhile.

Some of the biggest firms on Wall Street have been involved in the placing of "venture capital" in the medical field. Mary Tanner, a managing director of Lehman Brothers, was responsible for raising capital for Columbia/HCA. In talking about Lehman Brothers' interest in the medical field, she explained, "Wall Street is interested in any big spending industry. We're interested in any industry in change."

This "interest" by Wall Street has led to a big increase of debt since the mergers and acquisitions were fueled by debt. Whether in the form of "leveraged buy-outs," that is, a heavy issuance of stock by one company to pay for the acquisition of another one, or other more traditional forms of debt, the debt and its servicing now adds to the costs of the hospitals and HMO's not to mention to the risk of bankruptcies and failures of hospitals and HMO's.

The results of this rapid takeover of the medical care system by the financial industry are already clearly evident. The extreme consolidation in the field is simply the symptom of the fact that medical care is being organized according to the interests of the financial companies which are gobbling up medical facilities and not to medical care for the population. Significantly, even the medical profession, including doctors, is today coming under pressure as the result. While the income of some doctors is measured in millions of dollars today, a larger and larger number of doctors are now simply being treated as employees of the large HMO's. One sign of this, by the way, is that doctors are beginning to form unions in some of managed care facilities something the AMA could not have imagined in its wildest nightmares 20 years ago.

A Widening Gap

In this country where free enterprise has always been king, private interests have always prevailed over the interests of society as a whole. This could not be more evident than in the medical field, a field which cries out to be organized socially. Instead, medical care was put in the service of profit and personal enrichment: starting with the doctors who wanted to integrate themselves into the bourgeoisie; to the hospitals which, even in their "non-profit" days, acted as a conduit of large amounts of profits into the pockets of the medical products field; to the pharmaceutical industry which has turned public investment in medical research to its own benefit; to the insurance companies which today are making of the medical care industry another basis for speculation.

The United States has long led the world in the total amount of money spent on health care and in the amount spent per capita. Today, the U.S. spends nearly 14% of its gross domestic product on health. This translates to over $3700 spent per person on health care every year, $1000 more than is spent by Switzerland, its closest competitor.

But, as we've seen, an enormous amount of that money goes not to medical care, but to capital which, like a parasite, sucks profits out of it.

Certainly, the U.S. today has the most advanced medical system in the world if by that we mean the most advanced technology and research, some of the most highly skilled medical professionals, hospitals organized to give exceptionally good care, as well as teaching and research hospitals geared to utilize this advanced technology, knowledge and skills. For those with a very good medical plan and their own independent financial resources there is no problem in receiving excellent medical attention. In fact, it is to the U.S. that the wealthy of other countries come when they have serious medical problems.

But there is a yawning chasm between what is available to the well-to-do and what is available to the rest of the population. When the U.S. medical system is measured in terms of what it delivers to the whole population, the U.S. is far down on the list of countries. Not only does it fall below all of the other industrialized countries, its medical statistics give the U.S. the appearance of an underdeveloped country. According to the World Health Report 2000, put out by WHO (the World Health Organization), the U.S. is sandwiched between Costa Rica and Slovenia as far as the overall quality of its medical system. According to WHO, the U.S. ranks 24th in terms of life expectancy. It ranks 32nd in the degree of variation among the population in life expectancy, which means that while a significant number of people live to a very advanced age, an equally significant number die prematurely. (Of course, the extremely high murder rate in the United States, which itself is a reflection of the impoverishment of part of the population, helps contribute to the number of premature deaths.) Among the least healthy five percent of the U.S. population, the number of years people live free of serious sickness or disability is similar to the rates in sub-Saharan Africa, says Dr. Christopher Murray, director of Global Programme on Evidence for Health Policy, the department that produced the WHO's health systems report. This simply illustrates the deprivation which exists for sizeable parts of the population in the "richest country in the world." Worldwide, the United States is ranked 24th in infant mortality, dropping from 20th position in 1980. And, at 18.6 deaths per 1,000 live births, the mortality rate for black infants (those less than one year old) is worse than the level in Sri Lanka or Romania.

As in so many other aspects of U.S. reality, the enormous gap between rich and poor, a gap bigger than in any other industrialized country, is reflected in the health care system. The U.S. is not only a society divided into classes, wherein capital lives off the exploitation of labor, it is a society where the avariciousness of capital is the most unrestrained. Managed care has not created this situation. It is merely the latest incarnation of a health care system run for the profit of the capitalist class at the expense of the population. But the results of this latest incarnation have already led to a serious worsening of medical care.

Health Care: A Right, Not a Privilege

A society that actually aimed at providing its members with what they need to live would certainly be organized to provide medical care universally; it would start from the presumption that medical care is a right.

There is no reason that a society as wealthy as this one could not provide medical care, including the most advanced medical techniques and technology, universally to everyone. It already spends enough money to go a very long distance toward accomplishing this. What stands in the way today of using these enormous expenditures for medical care are the layers upon layers of profit and the enormous bureaucracy which has been erected on the system, products of a capitalist society that considers it normal to look on medical care as just one more field in which the capitalist class is free to maximize its wealth.

Moreover, there are obvious and not particularly expensive measures that a medical care system concerned with the health of the population, and not the health of profits, would introduce across the board into the medical care system: first of all preventive care, which is the easiest and cheapest way to deal with disease; check-ups and attention paid to nutrition.

Of course, health is impacted by many things, including the environment and the unsafe and unhealthy conditions in the workplace. It's why the rationalization of medical care to serve the population goes hand-in-hand with the fight to rationalize all of society for the same aim.