(Weekly Organ of the Communist Party of India
No We Cannot!
Flounders Trying to Change Health Care in the US
Amit Sen Gupta
“Yes we can”. This was the
slogan that galvanised millions of Americans and voted Barack Obama
White House in 2008. A rainbow coalition of Americans, representing the
people, people of colour, hispanics and Asians – traditionally sections
have lost out while pursuing the great “American Dream” – thought they
voting for a different America.
They believed they were voting to start a process that would dismantle
apparatus that thrived on exploitation and greed.
Perhaps nowhere is the
evidence of crass greed taking precedence over peoples needs more
in the health care system in the US. That is why one of the
planks of President Obama’s election campaign was a reform of the
system in the US.
In the past year, the Obama Presidency has been engaged in cobbling
package of reforms for the US
healthcare system. The efforts culminated in the signing of two bills
this year. The Patient Protection and Affordable Care Act (known as the
"Senate bill"), became law on March 23, 2010 and was shortly
thereafter amended by the Health Care and Education Reconciliation Act
which became law on March 30.
Is this the reform that
people were looking for when millions cheered on President Obama in his
ceremony? By all accounts, the answer would be a resounding no! Who are
people who are cheering from the sidelines? We do not see the same
faces that cheered
on President Obama as he swept towards victory. In fact President
approval ratings are at an unprecedented low. Instead the cheers are
led by a
very different kind of constituency – the American Medical Association,
industry, and the Insurance Industry.
So what went wrong? Why
this gap between rhetoric and delivery? To find some answers we need to
understand how much of a problem healthcare is in the United States
and how it is organised.
US HEALTH CARE
& LEAST EFFICIENT
Health care in the US is
expensive in the world – the country spends a greater portion of its
health than any other country. It is estimated that spending on health
is about 16 per cent of its GDP. In 2007, an estimated $2.26 trillion
on health care in the United States. Further,
health care costs are
rising at a rate that is much higher than the inflation rate and it is
projected to reach 19.5 per cent of GDP by 2017. We can look at this
another way – total health care costs in the US is about twice that of
entire GDP – which means the US Health
Care Industry is twice the size of India’s entire economy! The US also spends the most on
capita in the world and the US
pharmaceutical market is about 1/3rd of the entire market
in the world.
Yet, this enormous expenditure on health care
translate into secure care for millions of Americans. In 62 per cent of
personal bankruptcy in the United States, medical debt
is cited as a factor --
the biggest single factor of reasons cited. Studies indicate that the
uninsured in the US
or part of the years 2007-2008) was 86.7 million, i.e. about 29 per
cent of the
population, or about one-in-three among those under 65 years of age.
important thing to understand is that if you are not insured in the US,
go bankrupt or die. Only a small percent (mainly the old and disabled
designated as poor) can legally access subsidised care provided by the
Well known US
health care analyst, Vicente Navarro, estimates that between 18,000 and
deaths could be prevented in the US if people had access to
care. Moreover, in the US,
being insured does not guarantee secure health care. It is estimated
of every four Americans families have problems with paying medical
bills – a
majority of whom have health insurance.
The US stands 38th
life-expectancy (i..e. the average number of years a person is expected
live), behind all other G7 countries (Canada,
France, Germany, Italy,
Japan, UK, US) and even behind developing
such as Cuba and Chile.
In 2000, the World Health Organisation (WHO) ranked the US 72nd
by overall standards of health enjoyed by its citizens.
IN THE US
reason why the US
health system is held out as an example of how not to organise health
in how it has historically been structured. As we discussed earlier,
are already paying enormous amounts to access health care. About 40 per
this expenditure is borne by the government and the rest by individuals
directly or through insurance premiums. So clearly, lack of resources
the constraint. The real reason lies in the way private corporate
pharmaceutical companies, insurance companies and health management
organisations (HMOs) – combine to make huge profits and undermine the
care of millions of ordinary Americans.
The current system of health care in the US
based on the 1948 Taft-Hartley Act, that gives freedom to employers to
negotiate with individual insurance companies. This is very different
“single-payer” system that exists in most other developed countries –
etc. In the latter case the government manages the insurance coverage
available, ensures that the coverage is adequate (covers all
universal (covers all citizens). The US system allows individual
insurance companies to negotiate different terms and conditions with
Further the US
system leaves out a huge number of people who are not employed or whose
employers find ways to dupe them and negotiate inadequate deals with
companies. A part of this gap is covered in the use by government run
care programmes – Medicare and Medicaid – that target the old (over 65)
poor, respectively. However the coverage in these cases is grossly
Those under government schemes have to pay out-of-pocket when their
budget exceeds the cap on medicines expenditure. Such expenses are
enormous, given that medicines in the US are about the most
system, thus, depends critically on the negotiating power of trade
Typically, packages available where unions are strong (viz. in the
manufacturing sector) are comparatively better. This also explains the
wide variation in insurance packages that are available to Americans.
Interestingly, the linking of health insurance to employment also
the bargaining power of workers, because workers who lose their jobs
the health insurance coverage. It has been argued that this phenomenon,
part, explains why the United States is the
country with the fewest
working days lost due to strikes
There is another side to this form of
the health care system in the US.
The insurance and the pharmaceutical industries are the two most
industry sectors in the US
– in 2008 they had profits of $12 billion and $49 billion respectively.
another way – just the profits that the US
pharma industry makes is four times the total turnover of the pharma
drug companies not only exploit patients in other countries, it makes a
part of its profits by consistently over-charging ordinary Americans
single medicine that they consume.
THE POWER OF
It is easy to understand
the enormous clout of vested interests that have a stake in continuing
system of health care in the US.
health care industry is understood to have spent hundreds of millions
dollars in 2009 alone to block the introduction of public medical
stall other reforms. It is estimated that there are six registered
lobbyists for every member of Congress in Washington.
the 2008 US
elections, the Center for Responsive Politics in the US
estimated that (as of February
12, 2008), the insurance industry had contributed $525,188 to Hillary
$414,863 to Barack Obama, and $274,724 to John McCain.
It is instructive to hear what the pharma
to say after the signing of the bill on health care reforms. The
Research and Manufacturers of America (PhRMA) responded thus: “The legislation, signed into law amid much
fanfare on 23 March, is 'not perfect' but represents a step in the
direction by helping to ensure that all Americans have access to
and affordable healthcare”.
Clearly the lobbyists have won, and the
public has lost – once again!
Let us, in the above background, examine the
that President Obama has finally managed to push through. His reforms
will cover an additional 32 million Americans who are currently
covered by the government run medicare scheme will not have to make
out-of-pocket payments to procure prescription medicines beyond a
certain cap. The
government run medicaid will be expanded
to include families under 65 with gross income of up to 133 per cent of
poverty level and childless adults. Insurers can no longer deny
those with pre-existing conditions. The uninsured and self-employed
will be able
to purchase insurance through state-based exchanges and low-income
and families wanting to purchase own health insurance will be eligible
subsidies. Those not covered by Medicaid or Medicare must be insured or
fine. Part of the excess costs to the government will be paid for by
cess on high income tax payers.
What is however more important is what the
package has not done. It has left intact the freedom of employers to
with individual insurers. Its coverage of uninsured people still falls
short of the real need. It has no ways to significantly curb the
of pharmaceutical and insurance companies. Most importantly, it does
a single payer system, and thereby does not curb the power of private
and health management companies. Whatever new money is going to be
the system will go to further strengthen the triumvate of insurance
pharmaceutical companies and health management organisations.
has any president in the United States been endowed
with so much goodwill at
the start of his presidency. Most importantly, this groundswell of
primarily from the poor working people of the United States.
If the Health Care
Act is any indication, Barack Obama stands in danger of losing this
faster than he acquired it. He will do well to remember the experience
Democrat predecessor to the White House – Bill Clinton. The American
punished Bill Clinton for reneging on his promises to make America
humane society – including on his promise on health care reforms. 2012
see the same happen to Barack Obama if he continues to remain captive