"The organization of medicine is not a thing apart which can be subjected to study in isolation. It is an aspect of a culture whose arrangements are inseparable from the general organization of society." --Walton H. Hamilton, 1932 [1]


by John Spritzler

December, 2000

As patients, doctors and nurses know all too well, health care is being turned into just another commodity for sale in the marketplace. So-called "Health Maintenance Organizations" and hospitals, whether they are "for-profit" or not, are driven by market competition to keep their costs low and sell their "product" for as much as the market will bear. Because the central values of the marketplace are self-interest and the "bottom line," market-driven health care is in fundamental contradiction to the best values of the health professions expressed in the Hippocratic Oath, the Samaritan tradition, and the legacies of Florence Nightingale and Lillian Wald. All these affirm that medicine and health care should be driven not by self-interest but by that most humane of values a commitment to each other's well-being.

There has been a dramatic shift in our health care system recently which has called these humane values into question. Corporate values have become ascendant in the health care system and are destroying what is best and strengthening what is worst in it. Physicians are being pressured to choose the corporate bottom line over their patients' health; if they resist, they are labeled as "problems" by HMO CEOs.[2,3] Nurses have been forced to go on strike to protect patients from hospital administrators who refuse to hire adequate numbers of nurses and who force nurses to work mandatory double shifts instead.[22]

To turn this fundamental, destructive shift in health care around we need to understand why it is happening and what forces exist that can defeat it.


Why is market-driven health care being promoted so vigorously today? One theory is that insurance and health industry companies are the culprits. But the evidence, on the contrary, is that the people who made the decision to implement market-driven health care in the United States were corporate leaders from virtually all industries.

One of the principal policy-formulating organizations of corporate America is the Committee For Economic Development, or CED, which consists of about two hundred trustees, mainly CEOs of the largest corporations. The CED advocated HMO health care delivery as early as 1973.[5] In 1987 it issued a health care policy statement, "Reforming Health Care: A Market Prescription,'' which "offer[ed] a comprehensive strategy for reform of U.S. health care focusing on greater reliance on market incentives."[6]

Of the two hundred twenty corporations whose CEOs or board chairmen were members of the CED in 1987, only six were insurance companies. Of the fifty-five corporations represented on the CED's Research and Policy Committee, all of whose members participated in writing the health policy "Market Prescription'' statement and all of whom approved it, only four were from insurance, health care, or pharmaceutical companies. The other members included Exxon, Procter & Gamble, General Electric, Philips Petroleum, Goodyear Tire & Rubber, Ford Motor Co., General Motors, AT&T, Chase Manhattan Bank and other non-health-related corporations. [7]


Corporate leadership has been the only significant force backing market-driven health care. A majority replied "Yes" to a 1990 Gallup poll asking "Would you be willing to pay more taxes to provide health care to all?"[21] and 73 percent answered "Yes" to the question "Would you favor free government-provided health care?" When President Clinton made health care reform his first administration's priority, the great majority of Americans (69 percent according to a 1992 Harris poll [16])) favored a universal, comprehensive, publicly administered national health program.[17,18,19,20]


Why are corporate leaders imposing market-driven health care despite the fact that public opinion opposes it, and despite the fact that most of the corporate leaders involved do not make their profits in health care or insurance? The answer can't be simply that corporations want the lower health insurance premiums that HMOs offer: with a single-payer system collecting the premiums as corporate taxes, corporations could lower their premiums as much, and even arguably more, than with a market-driven system. The administrative inefficiency of market-driven health care has been long known and well documented.[15] A 1990 U.S. Government Accounting Office report on health care costs reported that the Canadian single-payer system had proportionately much lower costs than the U.S. because Canadian spending on insurance administration was lower.[4] From the point of view of getting the most health care for their buck, corporations had no incentive to go with market-driven care.

If the corporate leadership's embrace of market-driven health care cannot be explained as a cost-cutting measure, then what does explain it?

In fact something more fundamental is at stake in market-driven health care than just the cost of the corporate benefits package. The real effects of market-driven health care on people's lives suggest that the primary corporate motive for imposing this type of health care system is to make people more controllable.


What are the results of market-driven health care? First, market-driven health care makes people feel insecure about their prospects for receiving health care when they need it. Second, it destroys the trust that patients once had in their doctors by making doctors "gatekeepers'' whose role is often to block access to care. Third, by making health care a commodity to be bought and sold like any other, it expands the growing economic inequality in the United States to include health inequality. Fourth, it pits health professionals against each other in competing physician groups and hospitals. These are four classic methods of social control: make people feel too insecure to challenge those in power, destroy people's trust in one another, make them more unequal, pit them against each other.

Even before the rise of market-driven health care, corporations relied on the insecurity of health care to control workers. For decades, large employers have preferred to link health benefits to employment, knowing it gave them more control over their employees. According to a New York Times/CBS poll in 1991, 32 percent of workers did not quit jobs they disliked because they were afraid of losing their health benefits.[13] In June, 1998 General Motors threatened to deny medical benefits to striking workers in Flint, Michigan in order to pressure them back to work. [14] Raytheon actually did cancel health insurance for striking workers in Massachusetts in August 2000, to force them back to work.[23]


More evidence that social control is behind market-driven health care comes from looking at its specific timing. Why did elite organizations like the CED begin advocating HMOs as the first step of their "market prescription,'' in the early 1970's? [5] That was when America's corporate and government leaders re-evaluated the way they would have to govern in light of the social upheavals of the 1960's. From the time of FDR to LBJ, elite social control had been based on policies like the New Deal and the Great Society that were meant to convince working class Americans that corporate leadership would give them a better and more secure future. These policies, however, led to rising expectations and a sense of security that emboldened people to challenge authority over issues like the Vietnam War, Civil Rights, conditions of work, and welfare. In other words, the elite strategy of improving social conditions as a means of controlling people back-fired.

How profoundly the 1960's affected the thinking of elite leadership can be seen in the writing of Samuel P. Huntington, Professor of Government and Director of the Center For International Affairs at Harvard University, and co-author of The Crisis of Democracy: Report on the Governability of Democracies to the Trilateral Commission written in 1975. [8] Huntington's Report noted that, "The essence of the democratic surge of the 1960s was a general challenge to existing systems of authority, public and private,"[9] marked by a "sharp increase in political consciousness, political participation, and commitment to egalitarian and democratic values." [10] What especially frightened the elite was the fact that, as Huntington wrote, "In recent years, the operations of the democratic process do indeed appear to have generated a breakdown of traditional means of social control, a de-legitimation of political and other forms of authority... The late sixties have been a major turning point."[11] The Report concluded: "Al Smith once remarked that 'the only cure for the evils of democracy is more democracy.' Our analysis suggests that applying that cure at the present time could well be adding fuel to the flames. Instead, some of the problems of governance in the United States stem from an excess of democracy... Needed, instead, is a greater degree of moderation of democracy." [12]

Corporate leaders abandoned the old method of social control embodied in the New Deal and the Great Society and began relying instead on a fundamentally different, "get tough," strategy designed to strengthen corporate power over people by making them less secure. This new strategy motivates corporate leaders' new enthusiasm for the "discipline" of the free market, which they use to justify not only market-driven health care but downsizing and attacks on the social safety net.

Market-driven health care is part of a pattern of government and corporate policy initiatives over the last several decades which have one thing in common: they strengthen corporate power over people by lowering people's expectations in life, and by reducing their economic, social, and emotional security. These policies include corporate downsizing and the "temping" of jobs; the elimination of the "family wage," so that now both parents have to work full-time and have less time with their children; drastic cuts in the social safety net of welfare and related assistance; the introduction of pension plans based on individualized investments that leave each older person to his or her own fate; and the use of high stakes tests in public elementary and secondary schools to subject children to the same stress and insecurity that their parents face on the job. In the workplace, employers have adopted anti-worker tactics that had not been used since the early 1930s, most notably firing striking workers and hiring permanent replacements, as President Reagan did during the air traffic controllers' strike. All these policies put people on the defensive and pressure them to worry more about personal survival than working together for social change.


The values of health professionals, who believe that a concern for other people and not self-interest should be the basis of health care, are shared by most people. Millions of Americans oppose elite values in health care and every other aspect of society. The majority of Americans who favor universal health care and who would willingly pay more taxes to make it possible demonstrate that most people value solidarity as opposed to the dog-eat-dog competition so highly praised by the elite in health care as in other areas. When people care for each other in their families and sacrifice for their children, when residents of flooded areas pile sandbags to save their neighbors' homes and people far away send food and money, when full-time UPS drivers strike in solidarity with young and part-time workers fighting for equal hourly wages, when teachers try to raise their students' expectations above what corporations have in store for them: in these and countless other acts that never make the news, most Americans are struggling to make our society one where relations between people are based on a commitment to each other, on equality, trust, and solidarity.

The fight over the direction of health care is really part of a larger conflict, between most Americans and a small elite, over the core values that should shape our society. Ordinary Americans are an implicitly revolutionary force because the values by which they try to shape the world contradict the elite's capitalist values. This revolutionary force can defeat market-driven health care and re-shape our whole society. This will happen when people in and out of the health care professions connect with each other on the basis of a true understanding of the problem of corporate domination of our society and a true understanding of the solution. The corporate elite's fear of losing control is well founded.

The elite strategy for reasserting its domination over society has met with considerable success in these past two decades. That success has come about for a number of reasons, but perhaps the chief reason has simply been this: that the real meaning of the struggle has not been clear to people. Elites have been able, in the area of health care and elsewhere in society, to misrepresent as "efforts to control excessive costs" or "to remain competitive" or "to gain efficiency" what have in fact been measures aimed at destroying popular power and undermining democracy. They have largely been able to keep debate over vital issues such as health care out of the public arena and restrict discussion to policy elites and to health professionals who by themselves are not strong enough to challenge elite power.

In health care as in arenas such as education and labor, there is really only one way forward: to expose the real meaning of the conflict. We must show that the struggle over market-driven health care versus health care based on commitment to each other is part of a struggle over the values and direction of society. The fight is over the future of our society and can only be won by making this fundamental meaning of the struggle explicit. We must bring actively into the struggle the millions of people who share anti-capitalist values, and we must fight to win. Winning means defeating the power of the corporations and reshaping health care and all of society with democratic, humane, egalitarian values.


1 "Medical Care for the American People: The Final Report of the Committee on the Cost of Medical Care," Adopted October 31, 1932, Chicago: University of Chicago Press, cited in "The Future of Health Policy," Victor R. Fuchs, Harvard University Press, Cambridge, MA, 1993

2. Ad Hoc Committee To Defend Health Care, "For Our Patients, Not For Profits: A Call To Action," JAMA Dec 3 1997, Vol 278 No 21

3. Peeno, Linda, "What is the value of a voice?" U.S. News & World Report, March 9, 1998

4. Executive Summary, U.S. GAO Report, June 1991, "Canadian Health Insurance: Lessons for the United States"

5. Committee For Economic Development, "Building a National Health-Care System: A Statement on National Policy by the Research and Policy Committee of the Committee for Economic Development," CED, April 1973, New York, NY, p 22-23

6. Committee For Economic Development, "Reforming Health Care: A Market Prescription," CED, New York, 1987, p 6

7. Committee For Economic Development, "Reforming Health Care: A Market Prescription," CED, New York, 1987

8. Crozier, Michael J., Huntington, Samuel P., Watanuki, Joji, "The Crisis of Democracy: Report on the Governability of Democracies to the Trilateral Commission," New York University Press, New York, 1975, p 36

9. Crozier, p 74

10. Crozier, p 106

11. Crozier, p 8

12. Crozier, p 113

13. Navarro V., "Dangerous To Your Health," Monthly Review Press, New York, 1993, p 50

14. National Public Radio, June 29, 1998.

15. Woolhandler, Steffie and Himmelstein, David U., "The Deteriorating Administrative Efficiency of the U.S. Health Care System," NEJM, 324:1253-1258 (May 2), 1991

16. Navarro, "Dangerous To Your Health" p 75

17. Navarro V. "Where is the popular mandate?" NEJM 1982; 307:1516-8

18. Pokorny G., "Report card on health care," Health Manage Q 1988: 10(1):3-7

19. Danielson D.A., Mazer A., "Results of the Massachusetts Referendum on a national health program," J Public Health Policy 1987; 8:28-35

20. Himmelstein, David U. and Woolhandler, Steffie A., "National Health Program for the United States," NEJM 320:102-108 (Jan 12), 1989.

21. "Opinions '90 Cumulation," Chris John Miko & Edward Weilant, editors, Gale Research Inc., Detroit, 1991

22. For example, the nurses struck St. Vincent's Hospital in Worcester, MA in the spring of 2000 over this issue.

23. Boston Globe, August 30, 2000

Originally published without references in New Democracy Newsletter, November-December 2000.


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