The dismal failure of market-based health care

People’s Health

During the past two decades, health care in the United States has undergone a radical transformation — for the worse. Donald L. Barlett and James B. Steele examine this change in their critical study of American health care, “Critical Condition.” They blame the change on a “national policy to run health care like a business, a misguided notion that the free market and for-profit health care would restrain costs and bring high-quality care to all.”

The transformation of health care into an economic commodity has greatly increased costs and significantly reduced access to care: 44 million Americans have no health insurance, while many millions of others have marginal policies that can barely be termed insurance.

Contrary to media propaganda, the United States does not have the best health care system in the world — we are ranked in 37th place by the World Health Organization. In addition, the U.S. is the only advanced industrial nation without universal health coverage.

Barlett and Steele describe how the blind application of radical free market economics to medicine has raised chaos and havoc. For example, hospitals, both for-profit and not-for-profit, routinely engage in rampant overcharging for services. Uninsured patients are charged the highest rates. Many hospitals contract their debt collection to hard-nosed companies who badger and intimidate debtors. The authors explain how investigators have found that some of the debt collectors who practice the most offensive behavior are affiliated with the giant for-profit hospital chain, Hospital Corporation of America. The HCA chain was founded by Republican Senate Majority Leader Bill Frist’s father and brother.

Barlett and Steele also look at the problem of the “spiraling” prices of prescription drugs. The United States stands alone as the only country to allow drug companies to charge whatever they want. Likewise, Congress prohibits Medicare, the largest buyer of prescription drugs, from negotiating their price, thereby sticking the taxpayers with the entire tab.

Barlett and Steele describe how Wall Street firms viewed the easy pickings to be had in health care and entered the field en masse. The massive move into health care by Wall Street investors triggered waves of “mergers, acquisitions, consolidations, hostile takeovers, initial public offerings, spinoffs, failures and bankruptcies.” This has left the once stable health care field in “almost constant upheaval.”

Health care in the U.S. involves over a thousand competing health insurance plans and an incredibly large but fragmented bureaucracy to oversee and “deny, discourage or postpone care and to shift more of the expense to the consumers.” Every major insurance plan administers its own call centers, claims operations and reimbursement formulas. Massive amounts of money are shifted from providing health care into the administration that manages earnings and profits for private investors. Barlett and Steele explain that nearly one-third of health care expenditures are spent on administering these bureaucracies.

Finally, the authors note the Madison Avenue advertising connection with American health care. Advertising has struck fear into the hearts of Americans — fear of dying prematurely “unless they rush out and buy the latest medication.” The writers note, “It is in the best interest of a market-driven medical system to make you think you are sick or soon will be.” In recent years, the lifting of the ban on media advertising of prescription drugs has put patient pressure on physicians to prescribe that drug for real or imagined ailments.

The authors lay out an excellent case for radically changing health care in the U.S., but they stumble a little when proposing a solution. If anything, they underestimate the potential strength of forces seeking radical change in U.S. health care. But there is growing sentiment for change coming from a variety of sectors in American society. Working people are hurting more than ever from either the lack of health insurance or the increasingly marginal, more expensive and less effective policies. Health benefits are also the biggest issue in most union contracts being negotiated.

The potential is growing for a broad coalition of forces to radically change health care and implement universal access to quality care. Barlett and Steele have made an important contribution to understanding how out-of-control free market policies have caused chaos in the health care field. This is a book that should be read and passed on.



Critical Condition: How Health Care in America Became Big Business – and Bad Medicine By Donald L. Barlett and James B. Steele Doubleday, 2004 Hardcover, 279 pp., $24.95