Health care mess: how we got into it, how to get out of it

In 1979, the newly elected mayor of Chicago, Jane Byrne, at the recommendation of some labor union officials, named me to be a “consumer commissioner” on the City of Chicago Health Systems Agency (HSA) Board of Directors. I remained in that position for three years. I can’t say that either I, or the HSA, accomplished much, but it certainly was an educational experience.

The HSA was part of a national network of health planning agencies established by federal law. Their purpose was to keep down the cost of health care and rationalize its distribution to all sections of the population, by putting the brakes on unnecessary capital expenditures which did not help patients. We were also supposed to promote the prevention of disease. The local boards were composed of “commissioners” representing the health care industry, the insurance industry, government and the general public. I was one of the public, or consumer, representatives, who served without remuneration. The City of Chicago Health Systems Agency had an able professional staff who helped educate us about health care finance.

Mayor Byrne had come to power in the years after the death of longtime Chicago Mayor Richard J. Daley, father of the city’s present mayor. She did so by, among other things, denouncing the behavior of major private health care providers, and promising to defend the beleaguered Cook County Hospital, the major publicly owned charity hospital in Chicago. She had been particularly critical of Rush Presbyterian St. Luke’s Hospital, across the street from the old Cook County Hospital building.

But on the day we all trooped into Mayor Byrne’s office to be sworn in as HSA commissioners, I was shocked to hear Byrne ask us to be especially kind to those wonderful people at Rush Presbyterian St. Luke’s!

When we began to do our work for the HSA, we found that the health care providers (hospitals and long-term care facilities) were completely resistant to any idea of cooperating to provide services.

Cook County Hospital needed more access to scanning equipment, but Rush, across the street and connected by heated underground passages, resisted sharing its ample equipment, forcing Cook County to apply for duplicative machines. Hospitals submitted proposals to us for capital expenditures, such as fancy new office facilities, which had little to do with improving the quality of health care to their patients, and everything to do with institutional empire building. The HSA staff would then work out mathematically exactly how much each of these capital expenditures would increase the per diem, i.e. how much the patient, or the patient’s insurance company, would have to pay for a day in the hospital. The hospital’s representatives would have to appear before us to justify their capital expenditures, and on occasion the HSA board would deny a request. On at least one occasion, the hospital’s representative tried to influence us by red-baiting the highly professional HSA accountants.

The provider representatives on the HSA were a solid front in opposition to any change that might control expanding costs (health care was 11% of the GDP at that time; now it’s 17%, far higher than any other country on the planet). Insurance was supposed to be represented by a Blue Cross/Blue Shield official who hardly ever came to the meetings, but who did brag to the world about how much the Blues were doing to control health care costs. Some of the consumer commissioners, including myself and one union representative, tried to be conscientious in the interest of the public and patients. Others were clearly in the pocket of the industry. But whenever we managed to get a decision favoring the pubic, it was sure to be shot down at the level of the Illinois Health Planning Facilities Board, the state-level planning agency which was packed by Republican Gov. Jim Thompson with industry hacks.

As I say, we accomplished nothing, and the Reagan administration did away with federally coordinated health planning agencies entirely. But what did I learn?

* That the drive for profits by finance capital, not improvements in patient care, constitutes the moving force behind the increases in health care costs. The capital projects which some of us tried to limit but which were rammed through at the state level were paid for by state of Illinois bonds, even when the hospitals were privately owned. The more bond issues, the more investment opportunities for the kinds of people who buy bonds in lots of tens of millions — finance capital, in other words. Our efforts to control costs were blocked by the institutions, but more by the political power of finance capital.

* That health care institutions — in those days mostly nonprofit — were the instruments whereby major capitalist interests made use of health care to increase their profits. Though one of our original benchmarks for health planning was to get rid of excess bed capacity, i.e. duplicated and uncoordinated hospital services, and though the hospital administrators fought us tooth and nail, many hospitals, especially in poor minority neighborhoods, were eventually left bankrupt by this system, because their patients, uninsured and underinsured, could no longer afford to pay for the inflated hospital bills.

But the bondholders did fine.

* That improvements to patient care had little to do with the increase in health care costs, and that in fact, sometimes quality of patient care often suffered because so much money was being siphoned off to pay off bond issues and to pay for expensive construction and other capital projects. So big pharma, the construction industry, the hospital equipment industry and of course finance capital were profiting mightily, while health care was being driven more and more out of the public’s reach.

* That the insurance industry, supposedly an ally of patients in the effort to control health care costs, was nothing of the kind, but rather simply joined in the cannibal feast, and passed on the inflated costs to the public in ways that are hard for the average individual in our society to detect.

The present situation is dire, with 47 million people without health insurance, millions more with inadequate coverage, and poor quality care which becomes more expensive with every passing year. People in Canada and Europe, not to mention Cuba, think we must be crazy for not having put a stop to this state of affairs long ago. But whenever someone tries to do it, they run into a perfect storm of extremely powerful special interests who work together with the corporate media to stop any reasonable changes.

These are the same special interests we had to fight against in the Health Systems Agency, who are now more bloated for having fed themselves for so many years at the expense of working people and especially the sick.

We now have the best chance to move forward that I have seen since I was on the HSA board. We will not be able to get everything done at once, but we can get our collective foot in the door for a strong public option in whatever Congress passes. The efforts of the right wing and the ruling class are now focused on removing a public option from the table.

On June 25, labor and its allies descended on Congress in their thousands to demand a public option and also to oppose the idea of taxing existing employee health benefits. It was clear from the speeches and comments by the participants that the American people are not going to let the special interests, especially the insurance industry, get away with it this time.

We need an all-out effort in this struggle.