Introduction to economic rationalism, corporatisation, and globalisation and their impact on health care.

CONTENTS

Global Forces
Health as a focus point
Criticism of these forces
Diminution of Social Control
Social and psychological considerations
Consequences for society

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Part 2 - Health care in the USA
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Columbia/HCA the largest and most aggressive health care corporation in the world is attempting to enter Australia. It is trying to buy community hospitals and to contract with government to run public hospitals in Australia.

[Top] Global Forces:- ^145,147 It would be a grave error to regard Columbia/HCA and its entry into Australia as an isolated threat to our health system. It is representative of powerful global forces which are changing all fields of human endeavour. These forces can be generalised using words such as corporatisation, privatisation, globalisation and managerialism. They are given legitimacy by a set of belief patterns, loosely called economic rationalism. These claim a scientific basis but that these are beliefs, an ideology and without a scientific basis is clear from the application of the principles to health care. No scientific theory could maintain that patients are getting optimal care at low cost when US managed care companies which pay for that care make a 30% profit. When hospital corporations such as Columbia/HCA providing that care with the remaining 70% spend up to 34% of their income on expensive management structures. When large amounts (eg. US $50 million each year) go to marketing. When 20% is provided as profits for shareholders. The claim that these for-profit business groups are providing the same standard of services more efficiently and cheaply than not for profit groups which do not have these overheads is not logical. Something or someone is losing and it is not the companies. In addition some of the expenses generated by the not for profit groups can be seen as a response to the need to compete with the first group on terms which have nothing to do with the standard of the services provided or their costs. Something or someone is losing and it is clear that it is the patients and not the companies. This deliberate blindness in adhering to belief patterns in the face of contrary evidence can be characterised as "closed minded".¹⁴⁴ It is a feature of cult behaviour.

[Top] Health as a focus point:- ^{5, 9, 32, 42, 44, 45, 141, 142, 150} The application of economic rationalist forces is challenged by the humanitarian traditions, the scientific principles, the ethical foundations and the professionalism of health care. Fundamental deficiencies and defects in logic are revealed. An editorial in the Lancet deals with the efforts in the USA to "control the temptations and excesses of managed care" and so address the multiple problems which have arisen ¹⁰⁰. The editorial states that these bills "represent America's characteristic -- and curious, we think -- confidence that enormous, for profit insurance companies beholden to investors and stockholders are primarily concerned with care of patients, and that market forces and competition will, in the end, solve the problem of a health-care system that excludes almost one in six of its own citizens"

Proponents of economic theories see health as a threat to their world view, an aberration which must be brought into line. Humanitarians see the devastating consequences of the application of these principles in health care as confirmation of their worst fears for the destruction of a humane society. Health care has unwittingly become the focus of a global ideological dispute and health care workers, particularly doctors have unwittingly and unknowingly become the focal point of economic rationalist attempts to keep the lid on a Pandora's box of unpleasant realities. To do so "disruptive" health care professionals must be controlled, disempowered, and their position discredited. The importance of health care to the marketplace's economic rationalist proponents is revealed by the vast sums of money large corporations spend to derail health care reform in the USA. According to the non-profit Center for Public Integrity their investigations show that "health care reform has become the most heavily lobbied, legislative initiative in recent US history. ¹³⁷

[Top] Criticism of these forces:- ^{117, 130, 145, 146, 147, 150} These new forces come under the umbrella of democracy, capitalism, free enterprise and competition on a level playing field. They originate within societies which espouse these ideals. Corporate language and "culture management" which pay service to the form of these processes but not their substance are used to change the way society thinks. Critics point out that they are in fact antidemocratic, anticapitalist, stifle free enterprise and are essentially anticompetitive. They claim that the processes are driven by emphasis on the individual and personal greed rather than social responsibility. The basic values which make society human are devalued and destroyed. Proponents meet their critics by claiming they are socialist and that they ignore economic realities.

Kuttner ¹³⁰ asserts that "much of the economics profession, after an era of embracing a managed form of capitalism, has also reverted to a new fundamentalism about the virtues of markets. So there is today a stunning imbalance of ideology, conviction, and institutional armor between right and left." Kuttner maintains that there is at the core of the celebration of markets a relentless tautology. If everything is a market and market principles are universal then if anything is wrong it "must be insufficiently market like. This is a no-fail system for guaranteeing that theory trumps evidence." and "It does not occur that the theory mis-specifies human behavior." He asserts that "real people also have civic and social selves." The health system is an area of human endeavour dominated by civic and social frames of interpretation. The repeated attempts to deal with failures consequent on dysfunctional economic rationalist prescriptions by applying further economic rationalist and managerial solutions is evident on a grand scale in managed care in the USA. It occurs at a more personal level in many hospitals. ¹⁵³

[Top] Diminution of Social Control:- ^{145, 147} The progression of capitalism from individuals to corporatisation, to globalisation can be seen to be associated with a progressive diminution of social control. Corporations no longer make decisions from within the communities they serve. Investors, who might be concerned at the way their money was invested have portfolios managed by others and exert little control over corporate activity. This loss of social control is greater in multinational corporations and with globalisation. Multinationals are now more wealthy and more powerful than government. They are in a position to dictate their requirements and to use economic incentives and economic coercion to ensure compliance. Health care multinationals are not an exception. Social control of the systems under which we live has been largely removed. Corporate giants ride roughshod over the values, the beliefs, the customs and even the laws which have made society human.

[Top] Social and psychological considerations:- ^{144, 151} Society has come to be dominated by individuals and corporations whose behaviour can be described as closed minded or perhaps in some instances as creative psychopaths. The consequences can be described as successful sociopathy. Such individuals are driving, forceful, very plausible and likeable. They are doers and shakers. They are capable of compartmentalising their activities and concepts and so avoid confronting alternate paradigms. They do not see the consequences of their actions when these are viewed from an alternate frame of interpretation because they will not look. They have no doubt about the correctness of their perspective and their mission. They are intelligent and become adept at rationalising and ridiculing alternate perspective's. They are able to persuade others and they get their way. Because they rationalise so readily and ignore the consequences for others they are liable to indulge in criminal activity. When checked and directed by effective social controls in society such persons, because of their drive can make major and worthwhile contributions. When these controls break down then society is at risk.

[Top] Consequences for society:- ³³ In the corporate world social controls are weakened and in some cases no longer exist. The consequences can be seen in the corporate financial debacles in Australia over the last 15 years. Bond, Scase, Coles Myer, WA Inc., Victoria, South Australia and BP in PNG. Bank managers, persons we all go to for honest advice are now paid incentives linked to the profits they generate. They are most able to do so by abusing the trust of those who come seeking advice. (see recent Four Corners TV program.) In all of these situations ordinary trusting citizens can be seen to have suffered loss as a consequence of the uncontrolled and unrestrained activities of people who are best described as one eyed (closed minded) or even as creative psychopaths. The "closed minded" patterns of thought and rationalisations are very apparent in the statements made by executives from the Australian health care giant Mayne Nickless. These were reported in the press after they pleaded guilty to a price fixing racket and paid a $7.7 million fine in 1994. ^{9, 41} A review by the trade unions in the United Kingdom has revealed that criminal conduct and dysfunctional behaviour is particularly prevalent among multinationals. ⁵³ All these criminal convictions can be seen as the outward manifestations of patterns of rationalist thought which threaten the human values we have developed over thousands of years. They pervade and threaten the whole structure of society. ¹⁴⁷

Such patterns of thought and consequent dysfunctional behaviour have characterised the US health system and medical fraud is now the major concern of the FBI^{133, 141, 142}. The internal documents and witnesses reports from National Medical Enterprises (now Tenet Healthcare), the US giant which has paid hundreds of millions to settle fraud related actions are particularly revealing of the thought processes which underpin corporate medicine and the economic rationalist approach to medical care. ¹⁵² The United Kingdom ^{51, 52,} New Zealand ^{147, 153} and Australia ⁴⁴ have not escaped.

2003 comment:- To this we can now add

• the Enron, Worldcom and banking scandals on Wall Street.
• the HealthSouth and Tenet Healthcare scandals in US Healthcare.
• the "Money for Mouths" radio scandal as well as the HIH and other recent corporate collapses in Australia, and
• the Scan Scam, Riverside aged care. and Mayne's cherry picking and staffing downsizing in Australian health care.

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LINKS TO MAPS
Central Map ..... Initial Map ..... USA Map ..... Australian Map ..... International Map ..... Corporate Practices Map..... (to print)

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Path
Home Page .... US Corporate Page .... Access to Columbia/HCA

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Overview 1 (1997) ... Overview 2 (2000) ...Overview 3 (2003) ... Patients ... I told you ... Licenses

Columbia/HCA submission pages
Background--The USA--Australia--Business Practices--Mayne--Conclusion--References

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Last modified October 1998 J.M. Wynne
Comment and minor editing August 2003