What happened to the talk of a crisis in health care? It’s a distant memory now, but in the early 1990s, former President Bill Clinton started a national discussion about reforming health care to make it more accessible and affordable. Like most of his campaign promises, he broke this one. The meager reforms his administration proposed in no way challenged the employer-based, privatized health care system. The notion of any changes unleashed a campaign by the powerful and well-funded insurance industry to block reforms. Managed care in the form of HMOs, we were told, would solve the problems of the uninsured and decrease the cost of healthcare. The market, it was promised, could find ways to provide quality health care at affordable prices for the millions of uninsured. It was a lie and a scam.

The health care crisis in the United States has not gone away—it’s gotten worse with each passing year. It is a human catastrophe that continues to immiserate and impoverish millions of people. According to the U.S. Census Bureau, there are 41.2 million people without health insurance.² An estimated 14.6 percent of the population had no health insurance coverage during all of 2001, up from 14.2 percent in 2000.³

However, the latest census figures don’t tell the whole story. The survey measures health insurance status during the entire year, but millions of people lose the coverage for some part of the year—sometimes a few weeks or months. If these gaps were calculated into the survey, the numbers of uninsured would be much higher.⁴

Every year, numerous public officials and health care experts advise the government to do something to address the health care emergency. The National Academy of Sciences recently announced in a report that the United States health care system is “incapable of meeting the present, let alone the future, needs of the American public,” and the Bush administration should immediately take steps to address the problem. The report states, “The cost of private health insurance is increasing at an annual rate in excess of 12 percent. Individuals are paying more out of pocket and receiving fewer benefits. One in seven Americans is uninsured, and the number is on the rise.”⁵

The economic recession has dramatically boosted the numbers of uninsured as employers have fired workers in record numbers. The list of companies downsizing or declaring bankruptcy keeps growing—Enron, Arthur Anderson, WorldCom, SBC, Verizon, Lucent and United Airlines. When LTV Steel declared bankruptcy, 80,000 workers and retirees immediately found themselves uninsured. Retired steel workers are in an especially dire situation. Because of their ages and work related health problems, no insurance company will offer them coverage that is affordable.

The crisis affects the chronically unemployed and low-paid workers the worst. African-Americans, who are disproportionately poor and working class, are hit by the health care crisis worse than whites. They suffer, for example, an infant mortality rate twice that of whites, and make up 35 percent of all new AIDS cases.⁶ The loss of health insurance or inability to afford it in the first place is a trap door that millions of the working poor have fallen through. Now, the crisis is affecting better-paid workers, and even sections of the middle class. The largest group of the newly uninsured, some 800,000, had incomes in excess of $75,000.⁷ Many of the recent job losses have been in high-wage industries such as technology and telecommunications.

Getting sicker

As the crisis in health care has accelerated, chaos reigns. This is because there is no coordination of health care resources and the pursuit of profit trumps the needs of patients. Consider the following:

• The only trauma center in Las Vegas closed for 10 days because emergency room doctors resigned, citing the dramatic increase in their medical malpractice premiums.⁸

• When cuts in Medicaid drug reimbursement rates were announced, the three major pharmacies in Massachusetts declared they would no longer fill prescriptions for Medicaid patients—potentially leaving hundreds of thousands of patients with no pharmacy to buy their medication.⁹

• Kaiser Permanente, California’s largest HMO, gave telephone clerks bonuses for keeping calls with patients brief and limiting the number of doctor appointments scheduled.¹⁰

The three big issues in health care this year—a Medicare prescription drug benefit, a patient’s bill of rights and a generic drug bill—were debated, but no legislation was enacted. Passage of a Medicare prescription drug benefit and the generic drug bill would have helped millions of people struggling with skyrocketing increases in the cost of medication.

President Bush doesn’t even talk about health care and the plight of the uninsured. His administration has done nothing to make health care or prescription medication affordable. Except for fetuses. Bush administration officials issued a regulation that allows states to define fetuses as “unborn children” making them eligible for health coverage under the Children’s Health Insurance Program (CHIP). But not the mothers.¹¹

The Bush doctrine in health care ensures that the medical industrial complex that dominates health care remains in control and that no legislation is passed that will lower drug prices or the cost of health insurance. Both Republicans and Democrats, beholden to the pharmaceutical and insurance industries for generous campaign contributions, have shown time and again that they will not challenge that power. Until that power is challenged it will be difficult, if not impossible, to enact any meaningful health care reforms or, for that matter, win a national, single-payer health care system—the only solution to the crisis. A single-payer system eliminates the private for-profit health insurance industry and would be funded by tax dollars.

After much partisan wrangling, Bush’s economic stimulus package passed in March 2002, but didn’t include any health care provisions for the uninsured. It did provide for $43 billion in tax breaks for businesses, though. Republicans and Democrats just couldn’t agree on how to fund health care for those who were downsized due to the recession. The two parties engaged in what is by now a familiar scenario: argue heatedly about token reforms that will help the fewest people, then pass no legislation at all and blame each other. Republicans sought a provision that would have provided a one-year tax credit of up to 60 percent of the cost of health insurance for unemployed workers. However, only workers who had lost their jobs between March 15, 2001 and January 1, 2002 and had health coverage for the previous year would have qualified for the tax credits. Democrats favored provisions that would have helped unemployed workers purchase health insurance through COBRA (Consolidated Omnibus Budget Reconciliation Act).¹² COBRA allows workers to maintain their health care coverage for up to 18 months if they assume the full cost of the health coverage provided by their former employer. These pathetic proposals would not help the vast majority of unemployed workers maintain health coverage. Waiting for tax credits doesn’t address the urgent need to pay for doctor visits, surgery and medication. And tax credits to the uninsured mainly help those with higher incomes.¹³ COBRA premiums are so expensive that the majority of workers cannot afford them. For a family, a monthly premium could be as high as $1,000 and for an individual, $500. This is hardly affordable for the unemployed.¹⁴

Health care U.S.-style—trading health for profits

The health care system in the United States has a for-profit sector and a not-for-profit sector. The for-profit, medical industrial complex delivers health care through employers. It is made up of approximately 1,400 insurance companies, the pharmaceutical industry, nursing homes and medical supply companies. The American Medical Association (AMA), which lobbies on behalf of the interests of doctors, is also a major player in health care.

Competition, lack of planning and the pursuit of profit create anarchy within the employer-based health care system. The corporations that own and control health care are like a band of warring brothers. Each tries to shift the cost of health care onto the other in order to make more profits for themselves. Shifting the costs to patients is another guaranteed way to boost profits.

When HMOs raise premiums, employers pay for employees’ healthcare. Employers can react in several ways: drop the HMO from the network entirely, restrict benefits or try to shift the increased costs to employees in the form of higher deductibles and co-pays. Reacting to increases in premiums, Peter Lee, CEO of Pacific Business Group on Health said, “Employers are shell shocked.”¹⁵ As a result, corporations are forcing workers to shoulder a bigger share of health care costs. Employers experienced a 12.7 percent increase in health insurance costs this year with 56 percent of large firms increasing employees’ share of health costs and 78 percent expecting to increase employees’ costs next year.¹⁶

Small businesses are particularly hard hit because they cannot negotiate discounts like big companies. According to Census Bureau figures, the most substantial drop in insurance coverage occurred among the growing number of small business workers.¹⁷ PRPD, a small construction company in California dropped its health plan altogether. Office manager Sandy Ryding said, “We were facing at least a 12 percent rate increase and we couldn’t afford it, now our employees are on their own.”¹⁸

More and more, even when employees are offered insurance, they cannot accept it because the monthly premiums are simply too high. The working poor, those earning minimum wage or just above, simply can’t afford coverage, even if a plan is offered where they work.

No one is spared, not even retirees who thought their health care was guaranteed upon retirement. Premiums for retiree health plans increased more than 33 percent and prescription drug co-payments increased by 17 percent in 2002. And 11 percent of large employers said they plan to eliminate retiree benefits for new or existing workers in the next two years.¹⁹

When pharmaceutical companies raise the price of drugs to boost their profits, HMOs react by imposing drug formularies—a list of specific prescription drugs approved for use by a managed care plan. This restricts members’ choices and forces them to pay more for brand name drugs. Some plans opt for eliminating drug coverage altogether. American Airlines is introducing a $50 deductible on prescription drugs and is increasing the co-pay on generics from $7 to $10.²⁰

Non-profit health care

The not-for-profit sector of health care is funded by tax revenues. State and federal governments provide health care to millions of people through the Medicaid and Medicare programs and the network of hospitals and clinics that makes up the Veterans Administration.

Medicare. Medicare is a right. When a person turns 65, or is found to be disabled, they are automatically eligible for benefits. There are no asset or income restrictions.²¹ It is, in a sense, “socialized medicine,” but only for those 65 and older and the disabled. Despite the shortcomings of the Medicare program, it is crucial to defend it because it is the only health care program that everyone is entitled to. A combination of payroll taxes and tax dollars subsidizes the program and it is administered by the federal government, thereby removing it from the control of the private market. The most pressing, ongoing problem is that Medicare has never been adequately funded. Instead of increasing reimbursement rates, adding benefits and decreasing deductibles, the opposite has occurred. Next year, the Department of Health and Human Services has announced that annual deductibles will increase 3.5 percent and monthly deductibles by 8.7 percent.

The United States government actually funds 60 percent of all health care costs. A Harvard study found that government health spending in the U.S. is higher than in any other nation. Government expenditures accounted for 59.8 percent of total health care costs in 1999. At $2,604 per capita, government spending was the highest of any nation—including those with national health insurance. Estimated total health spending for 2002 is $5,427 per capita, with the government’s share being $3,245.²²

The study analyzed data on spending for government health programs such as Medicare, Medicaid, the Veterans Administration and expenditures to buy private insurance for government employees—e.g. members of Congress and others. In 1999, tax subsidies for private coverage totaled $109.6 billion. Most of these tax subsidies go to the wealthiest Americans.²³

The Bush administration would like to end the government’s role as the largest provider of health care and leave it completely in the hands of the private market. They have attempted to do this by creating Medicare and Medicaid HMOs. Americans’ tax dollars are now used to pay HMOs to provide health care to the elderly and those with Medicaid. At first HMOs jumped at the opportunity to get a piece of the Medicare and Medicaid “market,” thinking they could make big, quick profits. Some did. It soon became clear that there wasn’t enough consistent profit to be made. This is because Medicare and Medicaid recipients tend to have more severe and chronic health problems that require more doctor visits, hospitalizations, diagnostic tests and medications.

At the urging of government, hundreds of thousands of seniors left traditional Medicare and joined HMOs. Most signed up for one reason—prescription drug coverage—because traditional Medicare has never paid for prescriptions. So what happened to all those seniors who joined Medicare HMOs? Well, the HMO bosses decided they didn’t want to serve the Medicare market after all—there’s not enough profit in it. All over the United States, Medicare beneficiaries have been dumped. HMOs have dropped 2.2 million Medicare patients in the last four years, saying that reimbursement rates are too low. Where seniors haven’t been dropped from plans, prescription drug coverage has been eliminated, benefits reduced and premiums raised. According to a study conducted by Mathematica Policy Research Inc., Medicare+Choice HMO beneficiaries will face increased out-of-pocket costs and sicker patients will bear the brunt of big changes.²⁴

Medicare is one of the largest payers for health care services in the country and when they cut reimbursement rates, it has a knock-on effect throughout the entire health care system. For example, this year reimbursement rates to doctors were cut by 5.4 percent. This led to more doctors refusing to treat Medicare patients. According to the American Academy of Family Physicians, 17 percent of family doctors no longer accept new Medicare patients.²⁵

The AMA has warned that unless the cuts are reversed, more doctors might stop treating beneficiaries. A report issued by the AMA found that 42 percent of physicians plan to end participation in Medicare if further cuts are implemented.²⁶

It is becoming more and more difficult for the elderly to find doctors who will accept Medicare at a time when the aging population is on the rise.

The White House Office of Management and Budget Director Mitch Daniels told lawmakers that the federal government cannot afford to pass a $30-$40 billion Medicare provider “giveback” bill because of decreased revenues. The House passed a $30 billion Medicare reform bill that includes provisions to increase reimbursement rates for providers. The Senate bill includes smaller than planned reimbursement reductions for hospitals but increases in reimbursement rates for Medicare+Choice HMOs.²⁷

Medicaid. The Medicaid HMOs have not fared much better and for the same reason. Kaiser Permanente, the largest HMO in Oregon, is leaving the state’s public health program next year, claiming that if they continue to provide coverage they will lose $18 million. Kaiser’s decision follows the exit of the other four largest commercial health plans in the state over the last two years. All Hersh Crawford, administrator of the Office of Medical Assistance Programs had to say was, “I can understand why they have made this decision. They have not been making money on our line of business.”²⁸

The Medicaid program provides health care to the poor and disabled under 65. The program is “means tested,” which means that income and assets determine eligibility. In order to qualify, a person must be at or below poverty level, although some states have tried to extend Medicaid benefits to the working poor or to their children through the Child Health Insurance Program (CHIP). Medicaid also offers health care to adults who can show they have a significant disability that will not allow them to work for at least a year. These strict eligibility requirements exclude millions of people from the program. Means testing is explicitly designed to deny people health coverage and reinforce the notion that health care is not a right for everyone, and that work, income, assets and health status are the determining factors.

Today, nearly every state in the nation has a budget deficit and lawmakers are proposing deep cuts in the Medicaid program. The targets of the cuts are health and social services to the elderly, mentally ill and disabled.

c In Wisconsin, funding for 14 community health centers that provide care for low-income and uninsured people is to be eliminated.

c In Mississippi, state officials want to stop Medicaid payments to nursing homes and cover the cost of only five prescription medications.

c Governor Frank O’Bannon of Indiana announced $6.5 million in cuts to the state’s CHOICE program which provides home health care to the elderly.

c In Los Angeles, the board of supervisors voted unanimously to close 11 of the county’s 18 public health clinics, close four school-based health centers and to end inpatient services at High Desert Hospital. The plan will also reduce funds for childhood immunizations, tests for sexually transmitted diseases and examinations for communicable diseases.

Nursing homes

The nursing home industry is not usually thought of as part of health care, but it is one of the foundations of the system, employing nurses, doctors and other health care workers. Nursing homes are funded almost exclusively by Medicare and Medicaid because most private insurance will not cover the cost of long-term care in a nursing home.

Millions of elderly end up living temporarily or permanently in nursing homes. Few seniors willingly go to live in a nursing home because they are hazardous places where patients are routinely neglected. Thousands of nursing home residents die each year, victims of premature and preventable deaths. The National Center on Health Statistics reports that starvation, dehydration and bedsores were listed as the cause of death on 4,138 of 500,000 nursing home death certificates.²⁹ Investigators believe that the number is much higher. Many of the preventable deaths are due to a shortage of nurses and aides to provide sufficient levels of care. Nursing homes are understaffed because the pay is low and the work is difficult. Over the years, Medicare and Medicaid have cut reimbursement rates to nursing homes which contributes to the crisis in staffing. Nursing homes are businesses that are operated to make profits, and if rates are cut, staff are cut. But the nursing home industry has millions to buy politicians. In 2000, the industry spent nearly $2.6 million in state elections.³⁰

The most vulnerable in society, the elderly and the sick, have been warehoused in so-called nursing homes, neglected and left to die premature, horrible deaths.

Beware of hospitals

Hospitals across the country have been hit hard by the crisis and have closed wards, reduced services and cut staff. According to a survey by the American Hospital Association, more than 1,300 health care institutions have been affected. The study found that 20 percent of the association’s 5,000 member hospitals had cut back on services and 6 percent had eliminated some units.³¹ Several factors have led to this—lower reimbursement rates, treating the uninsured and skyrocketing medical malpractice insurance. Malpractice insurance at the Thomas Jefferson University Hospital in Philadelphia doubled to $32 million. As a result, the hospital closed a maternity ward and cut 270 jobs.³² Pregnant women are at risk when obstetrical units close. When the Atmore Community Hospital in Alabama closed, women had to travel 15 miles to a hospital that had an obstetrical ward.³³

Hospitals have become dangerous places. A recent article in Consumer Reports, “How safe is your hospital?” reports on the increase in medication errors, hospital acquired illnesses and inadequate administration of pain relief medication.

The quality of patient care is influenced by nurse staffing levels. Researchers from the Harvard School of Public Health reported in the New England Journal of Medicine that the lower the patient-to-nurse ratio, the lower the risk of complications.³⁴ The risk of death is directly related to a nurse’s workload. Every additional patient over four increases the risk of death following surgery by 7 percent. Dr. Jack Needleman, the lead author of the study said, “I estimate that hundreds, or perhaps thousands of deaths each year are due to low staffing.³⁵ This incontrovertible research should have resulted in immediate implementation of safe nurse-to-patient staff ratios. But the Bush administration ignored the study, so patients will continue to die.

The shortage of nurses has reached critical proportions. On average, 13 percent of nursing positions at U.S. hospitals are unfilled and some hospitals report vacancy rates of more than 20 percent.³⁶

If you have to be admitted to the hospital, Consumer Reports advises, “Given the shortage of nurses, the most important thing you can bring with you to the hospital is a reliable family member or friend to run interference for you.”³⁷

Mangled care

Despite mountains of bad press, torrents of abuse from patients denied care and HMO health care providers who have become whistle blowers, HMOs are still in business.

One whistle blower is former Humana Medical Evaluator Dr. Linda Peeno. She testified before Congress in 1996 about the heart transplant she denied to a patient who died as a result. She stated, “Humana’s only concern was costs. The young man fit all the criteria, a donor had been found, his doctor was ready to do the operation.” Shortly after denying the patient a heart transplant, a gigantic sculpture was purchased for Humana’s headquarters—costing roughly the same as the transplant she had denied.³⁸

In the 1990s, HMOs were hyped as the way to control health care costs and increase accessibility. Today it is clear that managed care has done neither. Next year HMOs will increase health insurance premium rates by 16 percent and preferred provider organizations (PPOs) by 15 percent.³⁹

The reality is that health maintenance organizations were never designed to solve the crisis in healthcare. HMOs are in business to ration health care when they can get away with it and make money for their shareholders. As Jack Lewin, president of the California Medical Association put it, “We have for-profit, investor owned insurance companies calling the shots.”⁴⁰ HMOs have cut back on benefits, increased deductibles and co-pays and at the same time have increased premiums. That is, they are making us pay more for fewer benefits.

Thousands of lawsuits have been filed against HMOs which have exposed their true motives—denying treatment to boost profits. In Connecticut, doctors filed a lawsuit that accuses the six largest HMOs of “systematically harming patients by arbitrarily denying crucial medical treatment and illegally withholding millions of dollars in payments to doctors.”⁴¹

In Texas, a jury ordered Cigna HealthCare to pay $13 million in damages to the family of a man who died after the HMO forced him out of a skilled nursing facility. One day after being sent home, with no home care in place, the patient was taken to the hospital and died five days later.⁴²

HMOs have also been investigated for billing fraud. In Colorado, a former customer service manager, turned whistle blower, filed a suit alleging that Community Health Plan of the Rockies was purposely delaying and denying payment of members’ medical bills.⁴³

Not everyone is denied though. The CEOs of the giant HMOs continue to rake in millions. In 2000, executive pay went up by 14 percent. The most highly paid HMO executive in 1999 was Cigna’s Chairman Wilson Taylor who received $7.5 million in compensation. The CEO of UnitedHealthcare was paid $4.8 million.⁴⁴

The real drug lords

No issue has been more contentious in health care than the cost of prescription drugs. The pharmaceutical industry is despised by millions of people in the United States. No wonder. Americans spend $150 billion on medications at prices 50 percent higher than Canadians pay for the same drugs.⁴⁵

The pharmaceutical industry is unapologetic about the outrageous and exorbitant prices they charge for drugs. They defend their right to profit from patients’ pain, suffering and death with a zealousness that is unmatched in the corporate world. They know that desperate people in pain with chronic and life threatening diseases will try to do anything to get medication. They will buy less food, they will postpone bill payments, they will borrow money or max out credit cards.

It’s estimated that 65 million Americans lack coverage for prescription drugs and pay full price out of pocket. The cost of medication is a serious hardship for Medicare beneficiaries. As a group, those on Medicare use more drugs than any other segment of the population and yet, incredibly, Medicare has never covered outpatient prescription medication. Fifty percent of those with Medicare are without prescription drug insurance at some point in time and nearly 30 percent have no coverage at all.⁴⁶ The drug lords know this, and like vultures, they swoop down and prey on the most at risk people in society—the sick, disabled and elderly—in order to make profits for their shareholders.

In the year 2000, Medicare beneficiaries, many of whom are on fixed incomes, spent an average of $813 out of pocket on prescription drugs, in 2001 they spent $928 and are set to spend $1,051 in 2002. Seniors will spend in total about $82 billion on prescription drugs this year alone.⁴⁷

A Medicare drug benefit has been talked about for years, but no legislation has ever been passed. The Republicans’ prescription drug coverage plan keeps the pharmaceutical industry in control. Under their proposal, the government would pay subsidies to private insurers to get them to offer drug coverage with a monthly premium of $24 dollars and an annual deductible of $250. The standard Medicare insurance policy would cover 50 percent of drug costs up to $3,450 a year; after beneficiaries spent $3,700 of their own money, the government would cover 90 percent of drug costs.⁴⁸¼The plan ignores the two central problems for Medicare beneficiaries—drugs are too expensive and seniors can’t afford thousands of dollars out of pocket for premiums and deductibles.

In 2001, the nine U.S. pharmaceutical companies that manufacture or market the 50 top selling drugs for seniors reported a profit. Merck & Co. reported net sales of $47.7 billion and Pfizer of $32.2 billion. On average, the nine companies reported profits of 18 percent of total revenues.⁴⁹

For the last 10 years, the drug industry has been the most profitable in the U.S. Over that time period, the industry’s profitability was, on average, one-and-one-half times that of the next most profitable industry. The industry consistently rewards its investors. For the last five years, shareholders have received an annual rate of return of 18.4 percent.⁵⁰

When it comes to rewarding the CEOs of drug companies, money is no problem. The compensation packages are obscene. The highest paid executives’ average income, exclusive of unexercised stock options, was nearly $21 million. The median income was over $11 million. The highest paid of these executives was Bristol-Myers Squibb’s C.A. Heimbold, Jr. His compensation in 2001 was a jaw dropping $74,890,918. That figure does not include his unexercised stock options, which amount to $76,095,611.⁵¹

The drug companies always defend these high profit rates by arguing that in order to continue to research and develop new drugs they need super profits. That’s a lie. They spend more money on advertising. In 1997, the Food and Drug Administration (FDA) lifted the ban on drug company advertising. Pfizer reported that it spent nearly $2.9 billion on advertising alone in 2001 and Bristol-Myers Squibb spent slightly over $1.4 billion.⁵²

On average, nine drug companies reported profits of 18 percent of total revenues, but only 11 percent of total revenues were allocated to research and development (R&D). The top nine pharmaceutical companies in the U.S. spent more than double on advertising, marketing and administrative costs in 2001 than they did on R&D, and the Schering-Plough Corporation spent three times as much on marketing, advertising and administration than it did on R&D. Merck’s profits were nearly three times the amount the company spent on R&D in 2001.⁵³

The truth is, the federal government, using tax dollars, is the single largest investor in the pharmaceutical industry, spending $20 billion annually on R&D—a figure that is slightly higher than the total amount spent on R&D by the nine largest U.S. pharmaceutical companies combined. As of 1997, for example, 54 of 84 FDA-approved cancer treatments received federal funding during development.⁵⁴

The 1980 Bayh-Dole Act maintains that any drug invented “wholly or in part” with the assistance of federal money has to be made available at a “reasonable price.” If the drug is not made available as such, the act gives the government the authority to license the drug to a third party. But the Bayh-Dole Act has never been enforced—not even once.⁵⁵

In keeping with the spirit of capitalism, the pharmaceutical industry incurs none of the risk but all of the profits. In order to guarantee the continued flow of these astonishing profits, the industry is always on the offensive to stop, block or delay any restructuring for as long as possible. The drug companies are able to do this by employing an army of 623 lobbyists, more than one lobbyist for every member of Congress. Twenty-three of them are former members of Congress, 32 are former staffers for the two House committees at work on Medicare drug legislation.⁵⁶

The 10 most active drug companies and industry groups boosted lobbying expenditures from $43 million in 2000 to $49.8 million in 2001. The biggest increase in lobbying activity was by the drug industry’s trade association, the Pharmaceutical Research and Manufacturers of America (PhRMA). They increased spending from $7.5 million in 2000 to $11.3 million in 2001.⁵⁷ PhRMA is continually filing lawsuits all over the country to block price reductions in order to ensure that Americans are forced to pay the highest prices in the world for prescription drugs.

At the group’s annual meeting in March 2002, PhRMA President Alan Holmer said, “We will not be out-thought, we will not be outworked. Our mantra at PhRMA is this: We will never allow for failure whenever the political circumstances are at all manageable.”⁵⁸

The hired guns for the industry have been tremendously successful in staving off reform. The issues they lobbied on the most in 2001 were: a Medicare prescription drug benefit, patents, pediatric exclusivity and price. So far they have been able to prevent the following: the effort to create a prescription drug benefit under Medicare with cost containment provisions, a law that would require drug manufacturers to sell their products to Medicare recipients at the same low prices they’re sold in other industrialized nations and attempts to make generic drugs more accessible.⁵⁹

The drug industry was positively gloating after the midterm elections in November, 2002. They spent $30 million to help elect their allies in Congress, and according to a front page article in the New York Times, “Drug companies are devising ways to capitalize on their electoral success by securing favorable new legislation and countering pressure that lawmakers in both parties feel to lower the cost of prescription drugs.”⁶⁰

Desperate to control skyrocketing drug prices, states across the country have established drug formularies. States are asking companies to reduce their prices to match the lowest price if they want their drugs to be included in the formulary. The creation of a drug formulary is, in part, an attempt to combat drug industry advertising that promotes expensive drugs over cheaper and just as effective generic drugs.

In states that have established a drug formulary (Michigan, Florida, Louisiana), the PhRMA has filed a lawsuit to block them. They even filed a lawsuit against Health and Human Services Secretary Tommy Thompson to protest the Medicaid preferred drug program that was implemented in Michigan.⁶¹

A bill in Washington state would have created a drug formulary for Medicaid and other state-funded health plans but was defeated, due in large part to an aggressive lobbying effort by the PhRMA. They funded a campaign to paint the bill as one that “would hurt the poor and minority communities by limiting their access to the top drugs.”⁶²

Conclusion

The employer-based, private for-profit health care system is a disaster for workers and their families. Linking health care to employment leaves workers vulnerable to the mercy of the market. The sickening reality is no job, no health insurance. In virtually every union contract up for negotiation, health care costs and who is going to pay more is bitterly disputed—from dockworkers on the West Coast to hotel workers in Chicago.

Connecting health insurance to work gives management more power, and can act as a brake on workers’ ability to struggle—if management locks workers out or workers strike, health benefits can be terminated. The two must be separated.

Under capitalism, health care is treated as a commodity to be bought and sold—like televisions. If you can’t afford it, you can’t have it. But medical care is an essential service. Millions of people in the United States view health care as a human right and believe that everyone should have access. Several states have even proposed single-payer solutions to the crisis. One study commissioned by the Rhode Island legislature concludes that a single-payer health insurance system providing everyone with health care would actually be cheaper than the current system that leaves tens of thousands without coverage.⁶³ Overhead and profits account for much of the astronomically high costs of health care. For example, in Massachusetts, hospitals spend 25.5 percent of revenue on billing and administration, whereas Canadian hospitals—where the system is single-payer—spend less than half that much.⁶⁴ When the former editor of the New England Journal of Medicine comes out for a single-payer system, it’s unmistakable that the idea of national health care is no longer considered to be a radical, fringe solution to the health care crisis. Many employers, motivated every bit as much as the pharmaceutical industry by the desire to boost profits, are concluding they need some kind of health care reform to lower their costs. Even Al Gore has felt compelled to get on the bandwagon, recently saying that he has “reluctantly come to the conclusion that we should begin drafting a single-payer national health insurance plan.”⁶⁵ But the Clinton health care promises—which buckled under business pressure—should be evidence enough that we cannot rely on Democrats to hand us a better health care system.

We face a contradictory situation in which economic recession and layoffs, combined with massive tax cuts and budget shortfalls are worsening the health care crisis to the point where the issue is beginning to force its way into the media again. Yet those very conditions make it unlikely—given the current administration’s lovefest with the health care robber barons—that they will come up with a solution. It is possible to win a single-payer health care system in the United States. But it will not happen without a massive social movement that demands it. The health care corporations that profit off of the pain and misery they cause will not give up the enormous profits they make without a powerful challenge. And the Democrats and Republicans who are bought and paid for by the industry will not enact single-payer unless they are forced to do so.

NOTES

2 Figures cited in John M. Broder, “Problem of lost health benefits is reaching into the middle class,” New York Times, November 25, 2002.

3 “Numbers of Americans with and without health insurance rise, Census Bureau reports,” U.S. Census Bureau, September 30, 2002, online at www.census.gov/prod/2001pubs.

4 Steven Findlay, “How many uninsured?” USA Today, September 28, 2002. This article cites that between 59ñ62 million Americans were uninsured at some point each year from 1996ñ99.

5 Robert Pear, “Panel, citing health care crisis, presses Bush to act,” New York Times, November 28, 2002. In California, 6.3 million, or one in five people, are uninsured.

6p For a fuller discussion of racism and the health care crisis, see Helen Redmond, “The crisis in health care,” International Socialist Review 8(Summer 1999), p. 37.

7 John M. Broder, “Problem of lost health care benefits.”

8 “Only trauma center in Las Vegas to close; most surgeons left because of rising malpractice insurance,” Kaiser Daily Health Report, July 3, 2002, available online at www.kaisernetwork.org. All but one of the orthopedic surgeons resigned and the University Medical Center (UMC) emergency room was forced to close for ten days. The rising cost of malpractice premiums is another feature of the health care crisis and doctors are seeking tort reform and caps on liability. In March 2002, more than 1,400 staff physicians resigned from UMC because their malpractice premiums increased as much as 300 percent! The emergency room reopened with private physicians who agreed to staff the unit temporarily.

9 “Massachusetts officials ask drug store chains to demonstrate effect of Medicaid pharmacy rate reduction,” Kaiser Daily Health Report, August 28, 2002. The Massachusetts legislature cut reimbursement rates to pharmacies by 10 percent. In response, the state’s three largest drugstore chains, CVS, Walgreens and Brooks announced they would no longer participate in the state’s Medicaid program unless the state raised the reimbursement rate. When asked to provide drug cost data to state officials, Walgreens officials initially refused. A reimbursement rate is still being worked out.

10NMargie Mason, “Kaiser gave bonuses to phone reps who limited doctor visits,” San Francisco Gate4 May 17, 2002, available online at www.sfgate.com.

11 “Bush administration extends CHIP program to fetuses,” Kaiser Daily Health Report, September 28, 2002. The Bush administration issued a final regulation that will allow states to define fetuses as “unborn children” eligible for health coverage under the CHIP program. This is the first time that any federal policy has defined childhood as beginning at conception. This is a backdoor attempt to placate anti-abortion forces.

12 “Senate passes and Bush signs stimulus packages; no health provisions included,” Kaiser Daily Health Report, March 9, 2002.

13 “Current proposals to provide tax credits to uninsured would largely help those with higher incomes, brief says,” Kaiser Daily Health Reports› March 26, 2002. According to an analysis by the Economic and Social Research Institute, tax credits mostly benefit those with higher incomes and few health risks. Unemployed workers with low incomes and high health risks would generally remain uninsured.

14 “Only one-fourth of workers would use COBRA to keep health coverage if they became unemployed, new study shows,” Kaiser Daily Health Reports› August 29, 2002. COBRA, the 1986 Consolidated Omnibus Budget Reconciliation Act, allows unemployed workers to retain employer-sponsored health coverage by paying 102 percent of the premiums. The 2002 Workplace Health Insurance Survey found that if theùgovernment offered subsidies that would reduce premiums to $50 for an individual and $150 for families, the participation in COBRA would more than double.

15 “Health care costs’ sickening surge,” Business Week, September 25, 2002, available online at www.businessweek.com

16 Ibid.

17 “Retiree benefits and small business coverage,” aiser Daily Health Reports, September 9, 2002. Small businesses are companies that usually employ 25 or fewer workers.

18 “Health care costs’ sickening surge.”

19 “Retiree benefits and small business coverage.”

20È “Health care costs’ sickening surge.” The airline, which is facing a $1.8 billion loss in 2002, expects to eat $120 million in added health plan costs this year. Management wants to offload about 17percent of that onto employees.

21 For a fuller explanation of how Medicare works and when to apply for benefits, go to www.medicare.gov.

22 David Himmelstein and Steffie Woolhandler, “We pay for national health insurance but don’t get it,” Physicians For A National Health Program press release, July 8, 2002, available online at www.pnhp.org. The study which was published in Health Affairs found that government health spending in the U.S. is higher than in any other nation.

23 Ibid.

24 “Medicare+Choice beneficiaries will face increased cost-sharing, reduced benefits in 2002, study say,” Kaiser Daily Health Reports, October 2, 2002, available online at www.kaisernetwork.org.

25 Robert Pear, “Significant number of doctors refusing to treat new Medicare beneficiaries,” New York Times, March 17, 2002.

26 “AMA warns that doctors may not treat Medicare patients unless payment cuts are reversed,” Kaiser Daily Health Reports, October 16, 2002.¸In January 2002, payments were cut 5.4 percent and payments will be gradually reduced by another 12 percent between 2002 and 2005. The AMA is trying to use its lobbying clout in Washington to stop the cuts. The Bush administration is trying to pit doctors against patients in pushing the cuts through.

27 “OMB director Daniels says government cannot afford Medicare provider ëgivebacks’,” Kaiser Daily Health Reports, October10, 2002.

28 “Kaiser Permanente announced it will leave Oregon health plan,” Kaiser Daily Health Reports, September 25, 2002.

29 Andrew Schneider, “Neglected to death: Preventable deaths in nursing homes,” St. Louis Post-Dispatch, October 14, 2002, available online at www.stltoday.com. This is an excellent three-part series on nursing homes.

30 Phillip O’Connor and Andrew Schneider, “Nursing home industry wields clout in state capitals,” St. Louis Post-Dispatch, October16, 2002. According to the article, contributions to politicians are considerably higher.

31 Joseph B. Treaster, “Rise in insurance forces hospitals to shutter wards,” New York Times, August 25, 2002.

32 Ibid. The AMA and the Bush administration’s response to the increase in malpractice insurance is to push for a federal law that would limit claims for pain and suffering to $250,000 in each malpractice case. Limiting claims is in the interest of the insurance companies, not patients. In California, which has a cap on payments, many lawyers refuse to represent malpractice victims due to the limit on settlements.

33 Ibid.

34 “How safe is your hospital?” Consumer Reports, January 2003, p. 14.

35 Ibid. To address the problem, more than 20 states have enacted or have “seriously considered” legislation mandating patient-to-nurse ratios. California is the first and only state to approve nurse-to-patient staff ratios for specific hospital departments. Unfortunately, the regulations take effect in 2004. The regulations need to be federally mandated, not left up to individual states. The California Nurses Association played a major role in the passage of these regulations. Their Web site has some of the most up-to-date information on health care, available online at www.cna.org.

36 Ibid. The American Hospital Association has estimated that 126,000 nursing jobs are unfilled. The shortage is a result of hospital mergers, layoffs and heavy workloads.

37 Ibid., p. 17.

38 “ëDamaged care’ premiere features HMO whistleblower,” Physicians For a National Health Program press release , May 10, 2002, available online at www.pnhp.org. The film is based on the life of Dr. Linda Peeno who was so disgusted by what she experienced working for Humana that she got a job in medical ethics. In 1996, Peeno testified before Congress about how she denied a patient a heart transplant in order to save the company half a $500,000.

39 “Employer health costs will rise average of 15 percent next year, study says,” Kaiser Daily Health Reports, October 15, 2002.

40 “Health care costs’ sickening surge.”

41 “Connecticut doctors groups files suit against six HMOs,” Kaiser Daily Health Reports, February 15, 2001.üThe six largest HMOs are Aetna, U.S. Healthcare, Oxford Health Plans, Cigna, ConnectiCare, Anthem Blue Cross and Blue Shield and Physicians Health Services.

42 “Texas jury awards first damages under state law allowing residents to sue HMOs,” Kaiser Daily Health Reports, July 1, 2002.

43 “Colorado Medicaid HMO under investigation for billing fraud,” Kaiser Daily Health Reports, April 24, 2001. Gary Dick, who filed the suit, stated that the CEO of the company openly took pride in the fact that he had increased the HMOs profitability by implementing policies and procedures that frustrated the payment of legitimate claims. Also, the plan’s owners were “under fire” in Florida in 1994 for “excessive profit-taking and failing to provide adequate care to members.”

44 “CEO pay tops 40 million at HMOs,” Physicians For A National Health Program data update, September 20, 2000.

45 “Buses filled with elderly make trips into Canada to buy medication,” Physicians For A National Health Program press release, November 24, 2001.mSee also Jennifer John, “Head north for prescriptions—seniors find deep discounts in Canada,” October 2002, Solidarity newsletter of the United Auto Workers, p. 19.

46 “Profiting from pain: Where prescription drug Dollars Go,” a report by Families USA, July 17, 2002, available online at www.familiesusa.org. Families USA examined the annual financial reports that drug companies submitted to the Securities and Exchange Commission (SEC) in 2001. The report looked at corporate profits, spending on R&D, executive compensation, marketing and advertising. It is an amazing report and well worth downloading and reading.

47 Robin Toner, “Why the elderly waitÖ and wait,” New York Times, June 23, 2002.

48[ Robert Pear, “Republicans plan to push through prescription drug coverage for the elderly,” New York Times, November, 10, 2002, , p. 26.

49 “Profiting From Pain: Where Prescription Drug Dollars Go.”

50 Ibid., p. 13.

51 Ibid., pp. 7ñ8.

52 Ibid., p. 12. Print ads and TV commercials are one part of a drug company’s marketing budget/strategy. Most marketing is direct-to-physician marketing because they are the ones who prescribe drugs. The industry’s focus on advertising and marketing are reflected in their staffing patterns. In 2001, Merck added 1,000 sales representatives to its U.S. operations. Allergan, a global health care company, reported that it had 1,700 sales reps. In comparison, the company had 1,100 people involved in research and development.

53 Ibid., p. 10.

54 “Government should enforce law that requires drugs created with federal monies to be sold at reasonable price,” aiser Daily Health Report, March 27, 2002.

55 Ibid.

56W “The other drug war II,” a Public Citizen report, June 26, 2002, available online at www.citizen.org.

57 Ibid.

58 Thomas B. Edsall, “New challenges for a lobby used to spending and winning,” Washington Post, October 15, 2002.

59 “The other drug war II.”

60 Robert Pear and Richard Oppel, “Drug industry seeks ways to capitalize on election success,” New York Times, November 21, 2002.

61^ “PhRMA presents oral arguments in lawsuit against Michigan’s Medicaid preferred drug list,” Kaiser Daily Health Report, August 29, 2002.

62 “Wall Street Journal examines PhRMA role in defeating Washington state formulary bill,” Kaiser Daily Health Report, March 20, 2002.

63 “Study suggests Rhode Island implement single-payer health care system,” Kaiser Daily Health Report, November 22, 2002.

64 David U. Himmelstein, M.D. and Steffie Woolhandler, M.D., “Why the U.S. needs a single-payer health system,” Physicians for a National Health Program, available at www.pnhp.org.

65 Will Lester, “In surprising shift, Gore says he favors single-payer health care system,” Associated Press, November 15, 2002.