When Freedom isn’t Freedom

The Lie Behind Free-Market Medicine

Photo by Matt Collamer on Unsplash

This is what Ronald Reagan said in a 1961 radio address to ‘.

Free-market medicine, he maintained, allowed Americans the ‘freedom’ to choose their doctors and health insurance plans. But is freedom really freedom in a healthcare system that puts profits before patients?

Over the past sixty years, America’s so-called ‘free enterprise system’ has failed to produce cost-effective quality healthcare solutions. On the contrary, it has bankrupted families after prolonged illnesses, and caused the deaths of patients by allowing immoral insurance companies to refuse care in order to cut costs and improve their profit margins.

In the 2007 film , Michael Moore documented some of most egregious violations of the private health care sector – an uninsured man charged $72,000 to reattach the tops of two of his fingers after an accident, a husband and wife forced to sell their home and move in with their children after going into bankruptcy following so-called ‘deductible’ expenses they needed to cover out of pocket after a sustained period of illness.

Healthcare under the ‘free enterprise system’ certainly is not free and it is far from greatest. healthcare system around the world.

The Cost of Care

This is part of a recorded Oval Office conversation, where President Nixon is on tape as agreeing to the acceleration of the outsourcing of healthcare to private companies, such as Kaiser Permanente, even after hearing the company’s operating model tended towards providing less medical care in order to increase profits.

During the 1970s, accelerated privatisation of the health sector followed the 1973 Health Maintenance Act, which required employers to offer certified Health Maintenance Organization (HMO) options that were increasingly being outsourced to private companies. Companies like Kaiser Permanente, a private-sector organization thirty-nine hospitals and seven hundred medical offices.

Photo by Nicolas HIPPERT on Unsplash

While Obama tried to extend health care coverage to more people through the Affordable Care Act (ACA), which notably introduced waivers for low-income patients on deductible and copayment expenses, Trump repealed these waivers in 2017, causing insurance companies to consequently raise premiums by up to 20% in some states.

America’s health care system remains driven by privately owned HMOs and insurance companies who set the terms of who is entitled to care, the kind of care they may receive, and what patients are required to pay out of their own pockets. And while insurance giants, like United Health Care, Anthem, Cigna and Humana, rack in billions of dollars in profit every year, an estimated 45,000 Americans die annually as as result of poor or inadequate health care coverage.

Insurance executives, such as former Human Medical Evaluator Dr. Linda Peeno, are on record as saying their job was to cut costs by finding ways to refuse treatment. Refusals insurance companies label not as denying care, but denying payment. Peeno, a whistleblower and vocal advocate for health care reform says she is haunted by the fact that she was responsible for denying life-saving care that resulted in the deaths of patients, yet garnered her promotions within the industry by helping the insurance giants save money.

Efficiency and Self-Interest

This is what former British Secretary of State, John Moore, wrote in 1992.

Moore was a part of Margaret Thatcher’s cabinet between 1987 and 1989 and notably among those who pushed for privatisation initiatives of the National Health System (NHS).

In 1989, two white papers, and proposed the introduction of an ‘internal market’ for health services whereby Health Authorities would no longer run hospitals but would ‘purchase’ care from their own or other authorities’ hospitals. While a study suggests the reforms reduced waiting times for patients, it also negatively impacted the quality of care.

Amidst the Covid-pandemic, the myth of the efficiency of the private sector has been definitively debunked after recent scrutiny into private companies contracted to assist in the UK’s national test-and-trace system. While the system has been widely criticised as ineffective, uncovered the fact that consultants from Boston Consulting Group working on the tracking system, were being paid up to £ 6,250 a day — the equivalent of the pay of an NHS nurse in the space of a week.

In addition to profit-seeking deteriorating the quality of care, the privatisation of the health care sector also takes financial decisions out of the hands of state and medical personnel and puts them in the hands of investors.

In the US, close to half of all doctors practices are now owned by Private Equity funds. That’s a drop from 72% of doctor’s ownership of their own practices in 1988. As a result, doctors can no longer determine their own billing of patients, or the prices applied.

And the trend seems set to continue. A recent INET study warns that in 2021 many more doctors’ practices are set to run into financial straits as a result of the ongoing pandemic and are likely to be snatched up by PE funds.

Photo by Ben Hershey on Unsplash

The Argument for Universal Care

Research suggests that public health care is not only more cost-effective, it also provides better care. In 2017, a Commonwealth Fund study found that among ten of the world’s wealthiest nations, the top three were found in countries where a public health care system or hybrid public-private system was in place.

The UK and Australia, which both have public health care systems, were found to have the highest quality of care and lowest costs, followed by the Netherlands where a hybrid health care system is in place. Among the ten countries surveyed, the US performed the poorest in terms of quality of care and cost effectiveness.

The so called ‘free-enterprise’ health care system serves only one thing – to increase the profit margin of the private corporations who own the health services sector. It is a system that incites corruption and collusion of government officials, easily bought off by the wealthy corporate lobbies. Former Congressman Billy Tauzin, who was instrumental in passing a Bill that allowed pharmaceutical companies to increase drug prices unchecked, went on to work for the Pharma lobby, racking in an annual salary of $2 million.

When government officials, elected to represent the interests of the public, act only to line their own pockets, there is little hope of the system ever working for the benefit of the public good.

Financial & Business writer passionate about economic and business reform for a more just and equitable society. *All views are my own.

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