The recent appointment of celebrity doctor Atul Gawande to head the Amazon/Buffet/JP Morgan healthcare plan, on a part-time basis no less, is just another sign that the delusion about market-based solutions for health care continues unabated.
Apparently Dr. Gawande feels the job is simple enough to handle part-time, since he famously suggested we could fix American healthcare by modeling it on The Cheesecake Factory.
Of course, the billionaire trio is not actually concerned about improving their employees’ health care. They are concerned about saving money for themselves and improving dividend yields for their investors.
And some even think the model they are proposing could become its own “profit center.” Robert Pearl writes in Forbes:
I predict the Bezos-Buffett-Dimon cooperative will become a for-profit company that sells its expertise to dozens, possibly hundreds, of large corporations, each of them eager to offer their employees better healthcare at a lower cost.
How to cut healthcare costs? Simple. Cut care.
Businesses started searching for ways to cut healthcare costs back in the 1970s, with the establishment
of “managed care” companies, or Health Maintenance Organizations (HMOs). The HMO selling point was always about “saving money.”
It was recognized from the beginning that HMOs’ explicit for-profit model created intrinsic ethical dilemmas. Standard HMO practices include imposing gag clauses on doctors, offering financial incentives for reduced care to patients and so forth.
Yet the investor class has cheerfully set aside ethical concerns because the HMO industry has proven to be a real moneymaker:
The Health Maintenance Organization (HMO) industry has consistently outperformed the S&P 500 over the last five years with its 285.2% appreciation, easily trumping the S&P 500’s 90.2%. But the industry started pulling even further ahead in 2015 and again after the election of President Donald Trump. It is currently in the top 9% of Zacks industries.
Ethical issues are not just confined to HMOs. The entire field of medicine has grown increasingly more corporatized over the years. As early as 1980, Dr. Arnold Relman, former editor of the New England Journal of Medicine, wrote of a growing “medical-industrial complex.”
Innumerable doctors have pointed out the ethical challenges inherent in for-profit medicine, such as Salmaan Keshavjee MD, PhD, who wrote of “the permeation of economic considerations into the core values of medicine, highlighting a detrimental ethical shift occurring in the field.”
Doubling down on ineffective, and cruel, market-based solutions
Yet the fact that market-based solutions don’t work hasn’t dimmed their appeal. Healthcare expenditures have continued their meteoric rise, approaching 18% of our national GDP in 2016, despite the spread of market-based solutions. Yet instead of recognizing their failure, health policy makers have doubled down on them.
For example, the Affordable Care Act (ACA) was a massive market-based solution. It poured billions of dollars into government-funded, online marketplaces, making it easier for corporate health insurers to sell insurance. The ACA guaranteed insurance customers by creating a “mandate,” making it a fineable offense to be uninsured.
The ACA also forced new contracting models onto providers, with clear advantages to those who consolidated into Accountable Care Organizations (ACOs). As a result, the healthcare industry has experienced a surge of mergers and acquisitions profiting the investor class, with questionable benefits for patients.
Then there’s the cruel sham called “consumer-driven” healthcare.
It’s only to be expected that the investor class, who think of healthcare in terms of IPOs, dividends, mergers and acquisitions, would adopt the term “consumer-driven” to characterize “skin-in-the-game” insurance pricing strategies, ultra-narrow provider networks, and so forth.
If people have to cough up $2,000 to get medical treatment, they likely won’t get it at all. As Dr. Shlain makes so clear in his excellent article “There are no consumers in Healthcare, get over it,” healthcare might cost as much as a car, but the experience of getting it is nothing like buying a car.
In addition, the ACA’s Medicaid expansion resulted in significant opportunities for health insurers. According to Forbes, by October 2017 about 73% of Medicaid recipients (55 million people) are in managed care plans. Clearly we are decidedly moving toward privatizing the social safety net.
Are these market-based solutions working? Depends on what is meant by “working” and “for whom?”
Cut off from care
Clearly they’re not working for everyday people. As reported by Joe Ferguson in Tucson.com (6/25/18):
Roughly 1 in 4 Tucson-area residents in the last year have decided not to seek medical care because they could not afford it. . . .
Of the nearly 1,400 people who took part in the health and wellness poll, 28 percent said they needed to see a doctor but felt they could not afford it. Another 16 percent said they skipped doses of prescribed medication because of the costs of refills and the same amount said they skipped meals because of limited funds available for food.
It’s the same story all over the country, as reported last year in the New York Post:
Over the past year, one-in-four American families have had to turn down medical care that they needed because of the cost, according to a study out Wednesday from Bankrate.com.
Yet the market-based beat goes on . . .
Enough! We need Medicare for All!
It’s time to wake up, America! Guaranteed health care, like fresh air and clean water, is essential to our democracy. Far from being a promising solution, the Amazon/Buffett/J P Morgan plan is just the latest in a never-ending series of predictably inadequate “market-based” solutions. The corporate marketplace will never be substitute for a publicly managed program like Improved Medicare for All.
—Georgia Brewer
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HEAL California is an independent news and information hub focused on the California Medicare for All movement. We feature non-partisan news, views, podcasts and videos that highlight the continuing failures of our broken healthcare system and elevate the voices of advocates and organizations fighting for change.
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