The shortcomings of the American health sector, surely the biggest exercise in predatory profiteering in the world, have been exposed in the COVID-19 crisis. It is a graphic illustration of why health should not be turned into a business. America had to radically reconfigure the way it provided health care just to provide a basic level of protection against the virus. Initially just getting tested for the virus cost about $US2000, for example. One person, who reported for testing, had his temperature and pulse taken and then was sent home. The bill? $US1000.
The US health sector accounts for approximately 16 per cent of the nation’s GDP. In Australia and Britain, the health sector is about half that: eight per cent of GDP (Canada’s is a bit higher).
If we take that eight per cent as a base line for providing a universal basic health care system — bearing in mind that America’s health care system is far from universal — then that leaves $US1.6 trillion as just the profiteering element, undertaken by insurance companies, pharmaceutical companies, hospital conglomerates, lawyers, ‘consultants’ and a range of other predators.
That $US1.6 trillion is bigger than the entire Australian company and is approaching two per cent of the world economy. There really is no bigger scam in the world; it even dwarfs America’s military outlays.
Calling healthcare a business was always logically flawed. Money is involved, but it is unlike any consumer product businesses. For one thing, the ‘customer’ in health does not decide what represents value, the provider (the doctor or equivalent) does. Patients may have a say, but usually only on the margin. Health enterprises do not attempt to ‘serve the customer’, they dictate to them, hopefully in the patient’s interests.
Health is also very different when it comes to pricing. One might decide, for example, not to buy a car because you cannot afford it. But who says: ‘I cannot afford my life-or-death treatment because I do not have the money at this time, so I will wait until I am dead and then we will see?'
'Predatory health practices, whereby "doing the most good" has been replaced with "making the most money", are not just confined to America. The effects are everywhere, especially with treatments and vaccines, whose development and marketing is global.'
Health provision is consequently not subject to the usual interplay between supply and demand mediated by the pricing mechanism. In a public system it is about how much money can be allocated to provide treatments. In a private system it is about how much you can charge and get away with it. As America’s profiteering shows, the latter option becomes brutally expensive and inequitable. To give an anecdotal insight into what kind of thinking it engenders, some hospitals even charge mothers for holding their new-born child. The approach to hospital beds is ruthless, a glimpse of which was seen when the governor of New York, Anthony Cuomo sent 4300 recovering coronavirus patients back to nursing homes, with predictable results.
Predatory health practices, whereby ‘doing the most good’ has been replaced with ‘making the most money’, are not just confined to America. The effects are everywhere, especially with treatments and vaccines, whose development and marketing is global. As University of Sydney academic Toby Rogers points out, the pharmaceutical industry is subject to endemic regulatory capture: the sometimes subtle, sometimes aggressive, ways that government bureaucrats are co-opted.
Explicit corruption is bad enough, but as Rogers explains what is worse is the quieter way that the majority of regulators are drawn into seeing the world from the perspective of the companies they are scrutinising rather than the people they are supposed to serve. There is just too much money involved. Witness the endlessly vacillating Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases. He has registered a dozen patents in his own name, mainly related to vaccines.
The corruption is in many countries. Roberto Formigoni, the former governor of Lombardy — where the effect of the virus was severe — is serving six years in prison for stealing millions from the health sector. Privatisation has badly affected hospital purchasing in the region, a big reason for the unusual stresses.
Another, more subterranean toxic effect of seeing health as a business has been evident during the crisis. Sunetra Gupta, professor of Theoretical Epidemiology at the University of Oxford persuasively argues that the information upon which much ‘expert’ advice has been based has been so poor it has not been possible to draw safe conclusions.
But in business you have to make the sale. Sell yourself first, because your ‘product’, is supposedly superior knowledge. Admitting ignorance is bad business. Those wondering at Australia's rollout of restrictions, which was on the basis of modelling that turned out to be inaccurate — for example, the $60 billion Jobkeeper error was because the epidemiological models were wrong — might want to start with the business ideology.
David James is the managing editor of businessadvantagepng.com. He has a PhD in English literature and is author of the musical comedy The Bard Bites Back, which is about Shakespeare's ghost.