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This page created April 2000 by Michael Wynne
This page examines the repeated failure of
government regulation and oversight of the health care marketplace.
A long history:- In the USA there is a long history of regulatory failure. In aged care it goes back 20 years. In the late 1980's and early 1990's there was a total failure of the oversight system to detect the abuse and misuse of patients in psychiatry, substance abuse and rehabilitation. It wasn't until a public outcry was triggered by the kidnap of a teenager that what was happening was exposed. The regulatory system had accommodated to these practices.
Aged care:- The recent problems in aged care were exposed when concerned citizens in California took out death certificates and found thousands of needless deaths. The regulatory practices in California had stretched to accommodated to the sort of care which was being provided. The failure of regulation and oversight, and the protection given the industry by politicians have been focal points targeted by angry citizen's. The investigations forced by citizens lead to the identification of similar problems in nursing homes across the USA. Corporate nursing homes across the USA had been reducing staff and deskilling in order to fuel massive corporate expansion programs. Any oversight of the market would have asked how the money for such rapid growth could be taken from medicare and medicaid while still providing the services. No one looked.
Citizens are far from satisfied with government's response to the recent revelations. Effective action and intelligent reform has been frustrated by the dilatory nature of politicians and the massive lobbying and political contributions (read bribes) from the corporate groups. Citizens have organised themselves and are now pursuing these chains ruthlessly through the courts. The viability of those at fault is now threatened.
Fraud:- Tenet/NME, Columbia/HCA, SmithKline Beecham, Beverly, Vencor and a host of others have milked and defrauded the health and aged care system on a massive scale over a very long period. Regulatory oversight has been singularly inefficient in detecting these practices. The vast majority of instances have been exposed by whistleblowers - ordinary people taking action.
The problem:- It is now very clear that a system where regulatory oversight is at arms length is unattainable in a society where the establishment is dominated by corporate interest. This demands a level of political and bureaucratic integrity which does not exist in a market society.
The pressures on the regulatory system when the services being regulated are provided by competitive groups who are powerful, wealthy and influential make it inoperable. The pressure on corporate officers to circumvent oversight in the financial interests of shareholders is very strong. The need for corporate survival and growth place irresistible pressures on them. It is hardly surprising that these groups use all the power and influence they possess to further the corporate agenda.
Consequences:- Despite repeated attempts at reform regulation and oversight have failed over and over again. It is members of the community who rise up in anger to expose what is happening.
The most recent example is the failure of federal oversight and regulation in aged care in Australia since the aged care system was deregulated, privatised and made competitive. The time to disclosure of the problems in Australia was more rapid than the time to disclosure in America in 1991. Psychiatric care had been similarly deregulated and opened for profit a few years earlier. Competitive pressures were less intense at that time. Managed care had not yet been introduced. Groups in the community were less informed and it took longer to find out what was happening.
There are many reasons why regulation and oversight do not work in a health and aged care marketplace. There have been critical reviews in the press. Some of these will be addressed elsewhere on this www site.
CLICK HERE -- for more about regulatory failure in the USA
CLICK HERE -- to examine the failure of regulations in Australia.
CLICK HERE -- for some explanations why regulation and oversight fails