Up@dawn 2.0

Wednesday, April 27, 2016

Is Capitalism Bad for Healthcare?

I usually try to avoid hyperbolic and dichotomous propositions like the one used in my title here, but Christ if it isn't hard not to think that way sometimes, and dammit if Buzzfeed doesn't get a lot of traffic to their website with titles like these. Or maybe it'd be something more like: '10 reasons capitalism is bad for healthcare,' but I'm not gonna stoop that low. I will, on the other hand, actually use a list. 

Nonetheless, I'll try to provide some real content here. I'll tone down the hyperbole as well with the clarification that most of the best healthcare countries are capitalist as well, but have not gone in the extreme neoliberal direction that the United states has in the last 35 years, which is closer to the more traditional conception of capitalism. Capitalism has taken on many forms, but for those countries that are, overall, capitalist nations, and who rank high on the list of the best healthcare systems in the world, the healthcare systems themselves are, in fact, more socialist than capitalist. 

The general public argument that has sustained the exponential expansion of for-profit healthcare corporations--which now includes pharmaceuticals, hospitals (a sector that should strike a particular chord here in Nashville, home to hospital mega corporation HCA), insurance, biotech, healthcare equipment and technology, etc.--has been that the high cost and increasing cost of healthcare across the board is necessary for the research, development, and quality that makes the American healthcare system so great.  In the end, its a public good argument: if we paid less, or had a different system, we'd all end up with shitty hospitals, shitty drugs, shitty healthcare. And its also a customized version of a broader argument about neoliberal capitalism that has increasingly gained traction since the 80's, that a free market economy unfettered by government regulation, combined with a managed system that subsidizes buzzwords like 'innovation' and 'technology' and 'sectors' yields the best society, maybe the ultimate society, the one that the teleological progression of history has always been destined to bring us to. (If this seems like an over exaggeration, see Fukuyama's 'The End of History and The Last Man' )  

But while this broader argument about capitalism may be a self induced caricature, a concept we've all become familiar with in the year of the Donald (also see https://www.reddit.com/r/nottheonion), I think most of us have come to see this argument about our healthcare system as a load of BS. My main argument here is that Healthcare's conceptual foundation rests on the idea that the ultimate end should always be the patient's well-being, but in a system of unfettered capitalism, the ultimate goal is always profit, with any other ends taking on auxiliary role.  These financial ends ultimately trump any other concern, and in fact, become antithetical to the real ends of healthcare. Here's some examples that support my case: 

1.) Pharmaceutical companies don't use all of that money for research and development. 
Exhibit A:  nine out of ten pharmaceutical companies spend more on marketing than research. Johnson and Johnson, the biggest, spent around 17.5 BILLION on marketing compared to 8.2 Billion for research. 

Exhibit B: Dramatic price hikes on existing drugs, or astoundingly high rates for new ones, are common practice in the United States.  This is a practice that is defended by drug companies so that they can fund drug research, but a close look at the finances of more than a dozen public drug companies illustrates research and development expenses are routinely smaller than company overheads. The more plausible explanation is that they're just trying to reap as much in profits as they can. 

  Exhibit C: Pharmaceutical companies bribe doctors to prescribe medication incorrectly.  Johnson and Johnson, for instance, improperly promoted the antipsychotic drug Risperdal to older adults, children and people with developmental disabilities. To do this, they paid doctors, hospitals, and other companies kickbacks. For their efforts, they were slapped with a 2.2 billion dollar fine. Might sound like a lot, but remember, they spent 17.5 billion dollars in marketing alone the year before. 

Exhibit D: DrugMakers Reap Profits On Tax-Backed Research. Xalatan, a best-selling eyedrop for glaucoma, was sold by Columbia University to the Pharmacia Corp. for around $20 million. In 1999, sales of Xalatan exceeded $500 million. But it was the American taxpayer that provided Dr. Bito (the researcher who developed the drug) with the bulk of his funding: $4 million.

2.) Hospitals make a bunch of money, but not because their services are better. 

Exhibit A: Remember HCA? It has the dubious honor of having the biggest fraud settlement in US history at 2 billion dollars for overcharging patients, which you can read about here.  

Exhibit B: Rick Scott, the CEO during the period of HCA's most rampant fraud, is now the governor of Florida. In July of last year, the state announced it would repeal hospital standards for children's heart surgery that had been in place since 1977.  Why? Because a number of hospitals owned by Tenent, another huge for-profit hospital chain, did not meet these standards, and instead of investing money into improving their hospitals, they made enormous contributions to the former HCA CEO's political action committees. In 2013 and 2014, Tenet contributed $50,000 each year to Let's Get to Work, Scott's political action committee. The next largest Tenet contribution those years to a state candidate's PAC was $25,000.
It's hard to get much worse than repealing safety standards for heart surgery in children.

Exhibit C: The same procedures in the US can cost up to ten times more than in other countries, even with insurance. A lot of people have gotten wise to this idea, as is evidenced by the increasing trend of 'medical tourism:' US patients traveling abroad in order to avoid the

Exhibit D: Non-profit hospitals are actually the most profitable in the US. 

3. The US spends more per capita on healthcare for a worse system

Exhibit A: The US spends almost 20% of its GDP on healthcare, more than any other 'developed nation,' and more than any other nation in the world. 

Exhibit B: The U.S. Healthcare system ranks 31st in the world. (France ranks highest, and to compare spending, see above)

In the next post, I'll explore some alternative approaches to healthcare and research.

1 comment:

  1. There's got to be a better way. Oh wait, there is...