The Health Care Financing Issue in America

Corporatizing Health Care for Investor Profit
- by Gene Farley

I want first to describe my basic beliefs about health care and then to give you some of the facts about our present system that lead me to oppose the present corporatized-for-investor-profit system - a system that denies coverage to many and to favor a publicly-funded approach using the Canadian system as a prototype from which we can learn.

Basic Beliefs:

  1. Health care is a social good, an essential part of the societal infrastructure that facilitates individual, family, community and business success. All individuals, whether old or young, employed or unemployed, ill or well, should have health care coverage.
  2. It is unethical to make investor profits from denying people health care coverage. Traditional, corporate, market-place medicine cannot meet this standard. Milton Friedman in his 1962 book, Capitalism and Freedom, inadvertently expressed why this is so: "Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their share holders as possible." The practice of medicine and health care is a service profession in which need is unrelated to the individual patient's financial status. Currently insurance companies consider the "non-profitable patients", not the system to be the problem.

The profits of pharmaceutical companies and some other providers are immense. Pharmaceutical company profits average 18% and the top ten average over 30% profit. They spend more on advertisement than on research and development.

Facts and Issues:

  1. The United States has the most expensive, complex, bureaucratic, administratively top-heavy and rationed health care system among all the developed nations. This system provides good care to many but leaves over 44,000,000 Americans without coverage, over 50,000,000 with inadequate coverage, and is a factor in over 45% of the personal bankruptcies in this country. It requires people to be "Healthy - so they don't need it; Wealthy or with excellent health insurance so they can afford it; and/or extremely Wise so they can work their way through the system to get the care needed."
  2. Medicare as it presently exists provides coverage for a group of people (the elderly and handicapped) whom insurance companies did not want to cover because of inability to make a profit from them.
  3. The median income of people 65 and over is $13,000/year and 79% of those over 65 have annual incomes of less than $25,000.
  4. A major problem is the funding mechanism of our present health care system. A system where for-investor-profit corporations, whose emphasis is on profit rather than patient-care, control health-care coverage.
  5. Medicare is almost universal for those 65 and over or disabled. It is a single-payer system except for the co-pays and Medigap insurance. Most of the snafus credited to it are in reality those of the private intermediaries who handle Medicare payments.
  6. The problem is not how to save Medicare, but how to bring more people into it. Medicare is totally savable if people want it. The threats to it are from those who never wanted it and those who want it to "wither on the vine". (Newt Gingrich speech 10/24/95)
  7. None of the presently proposed remedies for Medicare reduce costs; they shift more of the cost to the individual, increase the administrative overhead and offer greater profits to insurance companies and investors.
  8. From 1997 to 1998 Medicare expenditures increased by 1.5% while private health plans in the competitive market place increased expenditures by 6.1%. Most Medicare patients cost very little.
  9. Attacks on Medicare include:
    • Proposals for "means testing" or vouchers to aid in paying premiums, either of which would make it a welfare program rather than a social insurance program.
    • Increasing the age at which one becomes eligible - this increases the number of uninsured by about 1.5 million.
    • Underfunding it so that patients are pushed through more rapidly - "You can get dressed now, Mr. Smith. The doctor saw you while you weren't looking."
    • The ideology that "the government can do nothing right."
    • The theology that the unfettered market place is the answer to all problems.
  10. Essentials of a National Health Care Program include:
    • Universal, comprehensive coverage
    • No out-of-pocket payments
    • A single public payer
    • Hospitals receiving "lump sum" operating budgets and separate capital budgets
    • Public accountability but minimal bureaucracy
    • No for-profit HMOs or providers

Resources & Websites Dealing With Health Care Funding Issues

Physicians for a National Health Program -

Madison Physicians for Social Responsibility -

Coalition for Wisconsin Health

ABC for Health

Wisconsin Network for Peace and Justice -

Keep Medicare Public (Canada) -

Everybody In - Nobody Out (EINO) -

Service Employees International Union (SEIU) -

American Medical Students Association -

Congressman Bernie Sanders -

National Union of Public & General Employees (Canada) -

Families USA -

Kaiser Family Foundation -

American Association of Retired Persons (AARP) -

Gray Panthers -

Legislative Sites

The Wisconsin Legislature -

U.S. Senate -

U.S. House of Representatives

The Madison Institute's Activities Relating To Health Care Funding

The Madison Institute continues to support the study and dissemination of information concerning the realities of the American system of funding health care.

In the last 5 years, two TMI participants have given more than 120 speeches to various religious, social, service, professional and political groups around the state on various aspects of health care funding. This work continues through an active speakers bureau and in conjunction with the Coalition for Wisconsin Health, Wisconsin Citizen Action, Physicians for a National Health Program and Madison Physicians for Social Responsibility.