Adding to the crisis is the business community's refusal to provide health insurance and its insistence on having its employees share a greater burden of health care costs - all in the name of maximizing profits.
One solution to reversing the industrialization of medicine is a national health care plan. OCAW, Labor Party activists and health care advocates have long pushed for such a program.
After World War II, the employer-based health insurance system took off. During this time, labor unions and progressive health care providers, salaried physicians and others joined to form prepaid nonprofit group health organizations. These entities became known as HMOs. The two biggest group health organizations were NYC Health Insurance Plan in New York City and Kaiser Permanente in California. Money from union-negotiated health benefits went into these plans to maximize care for the participants. Private insurance companies were not involved.
"For a long time, physicians were in control," said Dr. Ray Painter Jr., president of the Colorado Medical Society. "Medicine was never conducted as a business."
This started changing over the last 12 years when the federal government began cutting funds for Medicaid - the insurance program for the poor - and the employers and big business followed suit with cutbacks of their own.
Enter managed care - the third party, cost-conscious insurance gatekeeper - injected between the patient and the doctor.
While those in public health agreed there were too many specialists and, as a result, an unnecessary amount of surgeries, health insurance companies have gone overboard in the other direction. Now, primary care physicians are forced to act as gatekeepers to limit referrals to specialists or face being dropped by insurance carriers. This results in limited care to patients that can literally cost them their lives if a health problem is detected too late for treatment. For the insurance companies, it keeps costs down and profits soaring.
Before medicine turned into big business, patients could see the doctor of their choice and go to the nearest emergency room if it was necessary. With HMO and managed care networks, the patient has to get approval first from the insurance company to go to an emergency room and then only one that is approved by the plan. This delay in treatment can also cause further health complications and possibly death for the patient.
Then there are the gag rules HMOs impose on physicians that prevent them from telling their patients about expensive tests and treatments that the insurance companies won't pay for.
The health care crisis developed because costs skyrocketed. But these rising expenses can be attributed to higher administrative costs and funding profit, huge CEO salaries, and mergers and acquisitions in the industry.
Kit Costello, president of the California Nurses Association, reported in the Sept. 1997 edition of the Labor Party Press that HMOs consume up to 30 percent of the health care premium dollar on administration - this includes processing claims, profit, the cost of mergers and acquisitions, CEO compensation and investor returns - - while Medicare and Medicaid spend less than 4 percent on administration.
According to a 1996 study by Steffie Woolhandler and David Himmelstein, professors at Harvard Medical School and co-founders of Physicians for a National Health Program, paper pushers now compose 27.1 percent of all U.S. health care workers, up from 18.1 percent in 1968.
Instead of cutting back on administrative costs, health care corporations are reducing the number of doctors and nurses. Woolhandler and Himmelstein's study revealed that these practitioners have been reduced to 44 percent of the industry's work force compared to 52 percent in 1968.
This reduction in the number of health care practitioners is part of the campaign to restructure care delivery in U.S. hospitals. Hospital corporations call this restructuring, "patient focused care," even though this means replacing highly-trained nurses with lesser-skilled and lower-paid aides and having the remaining nurses oversee the care of more patients.
Nurse advocates argue that staffing has a direct impact on the chances of surviving a hospital admission. To support their argument, they point to numerous incidences where patients have died because of a lack of staffing. For example, a Boston College survey of about 900 nurses in Massachusetts unearthed 15 cases of patient deaths due to inadequate nurse staffing. No such cases were reported when the same survey was done in 1989.
Health care expenses also rise when mergers and acquisitions in the industry reduce competition and drive up costs. For example, the Federal Trade Commission was recently successful in obtaining an injunction to prevent two proposed drug wholesaler mergers because these two mergers would result in the companies' control of 80 percent of the $80 billion wholesale drug industry and would drive up prices 1 percent or $800 million.
Employers also play a significant role in the health care crisis. Our economy has shifted from a manufacturing base to the service sector, where smaller companies are less likely to offer health insurance to their employees. Many firms also are turning to outside contractors, who frequently do not provide health coverage for workers.
Then there are the profitable corporations - like the General Electric Company (GE) - that try to squeeze more dollars from their workers by shifting health care costs to them. In its 1997 negotiations, GE tried to transfer more of its health care costs to its workers, despite having made $7.2 billion in profits the year before.
The answer to the health care crisis lies in comprehensive reform instead of piecemeal approaches that tinker with the problems. History has proven a national health care plan to be the solution. For example, the Canadian plan is a less costly program than the U.S. system, covers "medically necessary" services for all Canadians, follows them whether they travel from province to province or outside of the country and does not have any user fees. Most importantly, Canadians are satisfied with it.
The only threats to national health care programs are conservative governments that cut back the funding and American health care corporations, HMOs, and health care work force reengineering consultants that are trying to privatize such publicly-controlled programs and reap huge profits.
"We Americans have a stake in helping our counterparts abroad to defend their universal health care systems - without them, it will be much harder to win our own," said Costello.
Those attending the Labor Party's First Constitutional Convention will learn just how to do that and advocate for a universal health care system in this country.
OCAW Reporter, September-October 1998