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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Thursday, September 08, 2005

A Couple of Items on Healthcare

From Sam Smith's Progressive Review. This is from Sam's account of Hillary's healthcare "reform," in Shadows of Hope (1994)

During the first months of the Clinton administration, one of the biggest national policy changes of the past fifty years was being forged by a secret committee led by Mrs. Clinton under procedures that periodically defied the courts and the Government Accounting Office and whose public manifestations consisted of highly contrived media opportunities, carefully staged "town meetings," and similar artifices....

"Around Hillary Rodham Clinton's health reform table sit the managed-competition winners: big business, hospitals, large (but not small) commercial insurers, the Blues, budget-worried government leaders and the 'Jackson Hole Group,' the chief intellectual honchos of the managed competition movement. . . Adherence to the mantra of managed competition appears to be the price of a ticket of admission to this gathering. "

What was finally proposed involved a massive transfer of the American health industry -- by some accounts now larger than the military-industrial complex -- to a small number of the largest insurance companies and other major corporations. These were companies that had the assets to play the game being offered -- a medical oligopoly that would dispense health-care under the rules of the Fortune 500 rather than according to those of Hipprocrates.

Clinton's position on health care had bounced around in the early months of the campaign, finally settling on a policy that would leave the big health insurers largely unscathed. It was not particularly surprising. Max Brantley, columnist for the Arkansas Times, noted that "Blue Cross owns Arkansas, and [Clinton] never did much to fight them."

The stakes would eventually become so high that a number of the biggest insurers -- including CIGNA, Aetna and Metropolitan Life -- would leave the industry-wide Health Insurance Association of America. Five of the largest insurance companies formed something called the Alliance for Managed Competition. In this new game one of the first targets of 'managed competition' was the smaller insurance companies that now account for nearly half of the health underwriting business. Said managed competition advocate Lynn Etheridge, "Ninety-nine percent of the insurance companies are going to be wiped out because they're only prepared to be insurance companies." Mrs. Clinton, sounding like a 1980s takeover lawyer, said, "It's going to be a Darwinian struggle. Only the best and fittest of them will survive." Similarly, when asked how small businesses were meant to cope with the added costs of her plan, Mrs. Clinton replied, "I can't go out and save every undercapitalized entrepreneur in America."

Her interest lay with the largest companies, i.e. the ones with the ability to purchase or create the health maintenance organizations that would become de rigeur under the Clinton scheme. The new HMOs would be major profit-centers for companies, simultaneously subsidized by federal payments for the ailments of the poor, elderly and those without conventional insurance.

The use of federal healthcare policy as a "progressive" smokescreen for the biggest insurance companies to attack their small competitors sounds awfully familiar. It's almost exactly what Gabriel Kolko described the big meat packers doing to the small packers by means of the Meat Inspection Act, in The Triumph of Conservatism. Ah, that great liberal Democratic Party, champion of "the people against the powerful"! And oh, my, that Hillary, what a left-wing radical! I guess she picked up her Maoist tendencies on the Wal-Mart board of directors.

Check out, also, this excerpt from a British Medical Journal article on how patented me-too drugs--with only marginal benefits over much, much cheaper generics--are driving up the cost of healthcare. As I wrote before (here, and here) the state's patent system creates the honey pot--then the standard model of practice goes after the honey.

Newly patented versions of old drugs are driving the rapid growth in expenditure on prescription drugs in most developed countries, without offering substantial improvements over existing products, finds a study published online by the BMJ. The rising cost of using these me-too drugs at prices far exceeding those of time-tested competitors deserves careful scrutiny, say the authors, based at the University of British Columbia in Canada, where spending on drugs doubled between 1996 and 2003.... Vintage brand and vintage generic drugs combined accounted for 75% of total use in 1996 and 54% in 2003, but only 53% and 27% of total annual expenditure. In contrast, me-too drugs accounted for 44% of use and 63% of expenditure by 2003. Their average cost per day of treatment was twice that of vintage brand drugs and four times that of vintage generic drugs. Given that the list of top 20 drugs in global sales includes newly patented versions of older drugs, me-too drugs probably dominate spending trends in most developed countries, conclude the authors.

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