The U.S. spends more per person on health care than does any other country – but fewer
people receive care on average than in any other country in the world. All of this is the
result of the fact that the medical system in this country is organized first of all to provide
profit, not care.

The deadly results are shown in a recent study carried out by the Institute of Medicine, an
organization of experts advising Congress on medical questions. They reported that more
than 18,000 adults die each year because they are uninsured and can't get proper health
care.

PROBLEM #1: Medical insurance for profit - At the center of the U.S. medical care
system is the insurance industry, which is dominated by for-profit insurance companies that administer the financial parts of the system. While there still is a part of the medical
insurance industry in the non-profit Blue Cross system, that portion continues to shrink.
Today, the non-profits cover less than 27 per cent of the insured. Not only is the health
insurance industry today dominated by for-profit companies, it's dominated by only five
companies, which cover 40 per cent of the insured. Such tremendous concentration has
made it easier for the insurance industry to increase premiums at a rate that is going up
much faster than is the cost of providing medical care, a cost which also increases out-
rageously.

PROBLEM #2: Hospitals for Profit - Six years ago, one fifth of all hospitals were for
profit. Today, a recent study, whose results were published in the New England Journal 
of Medicine, found that for-profit hospitals are always more expensive than public or
non-profit hospitals. And they also tend to provide less care. Besides that, they don't usu-
ally provide extremely important medical services such as burn treatment, spinal cord in-
jury treatment, AIDs treatment, and neonatal intensive care, since these community ser-
vices generate little net revenue and are often operated at a loss. Private for-profit hospit-
als also provide almost no care for people who cannot pay.
Said Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard and the co-au-
thor of the study, "It's a myth that for-profit hospitals are efficient. They save money by
laying off nurses, then hire consultants and bureaucrats to figure out how to avoid un-
profitable patients and maximize revenues. For-profits increase costs, decrease care and
generate windfall profits like the $359 million pocketed by Rick Scott [the CEO] of 
Columbia/HCA [the biggest for-profit company]."
A study in the Journal of General Internal Medicine found that patients at for-profit hos-
pitals are two to four times more likely than patients at not-for-profit hospitals to suffer
complications from surgery or delays in diagnosing and treating an illness. In fact, the
only thing these hospitals are good at is generating profits that are often four to five times
greater than the surpluses generated by non-profit or public hospitals.

PROBLEM #3: Pharmaceutical industry for Profit - Drug costs are consuming an ever
larger part of spending on medical care. In 1993, prescription drugs made up 5.6 per cent
of all health care spending. It rose to 8.0 per cent in 1998. It has risen even faster in the
last five years. This increase is one of the reasons that the elderly pay a larger share of
their income today for health care than they spent before the advent of Medicare in 1965.
The giant pharmaceuticals may justify these rapidly increasing costs by saying that the
money goes to fund research and development of new drugs. But, in fact, only about 10
to 15 per cent of what these companies take in actually goes to what they call research
and development. Most of the rest goes to big marketing campaigns, administrative costs
– especially the high salaries and bonuses of the executives – or to profits. Pharmaceutic-
al companies regularly earn profits at rates that are three times higher than companies in
all other industries. It's not research but profit that has driven drug prices into the strato-
sphere.

PROBLEM #4: Bureaucracy and waste - The very structure of the health care industry,
which is organized around the production of profits, is incredibly fragmented, bureaucrat-
ic and inefficient. There are multitudes of private insurance plans, public programs and
no programs at all for the uninsured. Enormous staff are needed to create and revise pro-
vider plans, then administer them. There is a whole bureaucracy whose work is aimed at
keeping sick patients out of hospital beds and sick patients away from doctors. Armies of
administrators are used by hospitals to try to squeeze payments from insurance compan-
ies, and at insurance companies, armies of administrators do the reverse. And they both
are busy trying to squeeze down the prices they pay to the pharmaceutical companies.
Rather than work together, the administrators from one sector of the medical care system
are constantly at war with administrators from other sectors, wrestling over who keeps
each health care dollar.

Over the last 30 years, as the health care industry has become a more and more important
provider of profits, this bureaucracy has mushroomed, increasing in size 25 times! It
grew at a rate that was 10 times faster than the number of people who actually provide
health care and make the health system run, from doctors and nurses to technicians and
janitors. Last year, administrative expenses accounted for 400 billion dollars, or more
than 25 per cent of all health care costs. If the administrative costs were reduced to the
level of Canada, which has a single payer system of medical care, more than 286 billion
dollars would be saved. This is enough money to extend health care coverage to the unin-
sured – and better coverage to the rest of the population.

The fact that profit dominates the health care industry is what has been pricing health
care increasingly out of reach of people with ordinary incomes. According to Hewitt As-
sociates, a benefits consulting company, the annual out-of-pocket costs for employees of
large companies have more than doubled over the last five years to an average of $2126,
with bigger increases projected in the years to come. Part of this is due to the rising prices
that the health industry charges. But it is also due to the fact that companies large and
small are increasingly shifting the burden of these costs onto their employees.
Nowhere is the parasitic nature of capitalism more clear than in the very profitable health
care industry in this country.