Healthcare in the US, a private affair

On Feb. 18, 1971 President Nixon announced, “I am proposing today a new national health strategy. The purpose of this program is simply this. I want every American to have the finest health care in the world and I want every American to be able to have that care when he needs it.”

However, Nixon, only one day prior, in discussions with his chief domestic advisor, Jon Ehrlichman, was caught stating that he was “not too keen on any of these damn medical programs,” and agreeing with his advisor on how health care is “a private enterprise [ . . . ]; the less care they give them, the more money they make.” There is a strange debate raging south of the border between the defenders of what has been described as “the least efficient healthcare system in the developed world” and those seeking some kind of reform. In seeking to understand this issue, it is important to consider the current reality of American healthcare, the reasons its defenders give for opposing reform and why changing such a clearly inefficient and unjust system appears to be such a struggle.

A good comparison of healthcare systems is given by the Organization of Economic Cooperation and Development (OECD), which looks at a range of economically developed democracies. It recognized that the U.S. spends more than any country in the world (US$6,102 in 2004, now US$7,290) per person on healthcare, over double the average of the other OECD countries (US$2,438). The U.S. spends 15.3 per cent of it’s GDP on healthcare, compared to an average of 8.6 per cent, more per person on healthcare than the Canadian government.

However, because this money subsidizes competing private insurers, the result leads to very little public health coverage to the U.S. population. Because of the profit motive in private insurance, there is a well-documented tendency to avoid insuring those with a higher risk of illness and to drop coverage for those who either are at risk or get sick. Also, because doctors are paid according to procedures rather than results, their decisions are often influenced by the pay rather than by the result. This significantly under-prioritizes preventative health care.

Because the U.S. has not universalized its basic health coverage, those who can’t afford insurance — some 45 million Americans — must do without healthcare. Accordingly, the U.S. has the highest rates of death that could be prevented under basic coverage among the industrialized nations. Notably, under-coverage and lack of coverage force about 600,000 people into bankruptcy in the US each year. Over half of these are people who had insurance.

Defenders of the current privatized healthcare system, often bring up fears of increased wait times and budget deficits. Wait times are actually quite long (second longest in a study of six highly developed countries). The fear of budget deficits is of course laughable given that a good system would lower the cost, and given the lack of criticism directed at exorbitant military spending. The supporting concept of fiscal conservatism is widely accepted in the media, despite the fact that from 1978-2005 (Carter to Bush Jr`s first term), government spending increased 12.1 per cent per republican term compared to 9.9 per cent under democrats, and the deficit increased 36.4 per cent per republican term and only 4.2 per cent under democrats.

It bears repeating, the U.S. spends two-and-a-half times as much per person on health care as other advanced countries. It isn’t about the budget but rather an attempt to subsidize those who fund politicians electoral campaigns. The healthcare industry in the U.S. spent US$166,815,101 lobbying politicians in 2008. As reported by the Centre for Responsive Politics, “The best-funded candidates won nine out of 10 contests.

It’s clear that the current US health system is broken beyond repair and in fact was never intended to function as a system that provides care, but rather as a profit-making venture. It is still possible for the U.S. public to force some compromised changes through their broken political system. It seems likely that the U.S. will pass something like the Baucaus bill, which is essentially a US$829 billion subsidy for private insurers. It appears that coverage will be expanded, though not significantly enough to cover all the uninsured population. If the public option does go through, it will only be available to those who are currently uninsured, meaning that it will be too small to affect overall prices. Perhaps most importantly, it appears that individual states will not be allowed to move to single payer systems (which is how Canada’s healthcare system evolved). The media is currently clamouring about deficits, even though the U.S. government could lower its spending if single payer systems were introduced. If people demand something better, and if there is enough public pressure, some changes could happen.

But the questions remain, why does the U.S. population need to fight in order to get the government to act for the people? Why do the media blatantly act liberal in regards to war spending while at the same time acting conservative when it comes to spending on the people? If the American “democratic system” and their “free” media were actually representative of their people’s interests rather than those that fund them, progressive reform on healthcare would have happened long ago. If we want real change we need to stop fighting the symptoms, and start changing the system.


Peter Zylstra-Moore is currently studying International Development and Economics at CMU and the U of W. He has been involved in development work in Mexico, Nicaragua, Uganda and Kenya.