money pillTo say that the American healthcare system is criminally expensive and convoluted would be an understatement. Earlier this year, the New York Times reported that 20% of people under the age of 65, although insured, have trouble paying medical bills. 75% of them reported that, as a result, they had had to cut back on household spending, and 63% of them used up all or most of their savings to pay a medical bill. In 2015, an average family of four had to shell out $24,671 for medical expenses. An ambulance ride costs $164 per mile, on average. An emergency room visit by itself could cost you around $1,233. The national average for a vaginal birth is now $8,775, and a c-section will set you back $11,525.

At the same time, medical and healthcare professionals are relentlessly overworked. Nurses in the US often work shifts that can run as long as 24 to 36 hours. Only 16% of nurses in a national survey think they are adequately compensated. There is a chronic shortage of doctors, who spend an average of just 12 minutes per patient during appointments. Moreover, the for-profit system creates incentives for doctors to provide add-on services, often medically unnecessary, which leads to an estimated 210,000 patients dying each year due to medical errors.

This is the nightmarish scenario that millions of American workers are subjected to in the richest country on earth. How is it that a country with such enormous wealth and advanced medical technology provides the majority of its population with such appalling healthcare?

An American debacle

The need for a state provision of healthcare was recognized by many capitalist countries decades ago, especially during and after World War II. Western European countries such as Britain and France established their national healthcare systems in 1945. In the case of Britain, the National Health Service (NHS) was legislated in the aftermath of a massive Labour Party victory. In France, provision of healthcare by the state was adopted by the Provisional Government under the influence of the Communist and Socialist Parties, which had played a leading role in the resistance to Nazi occupation.

Even Franco’s Spain had a tax-funded obligatory health insurance scheme, begun in 1942, and expanded in 1984 into to a unified health system. Denmark’s renowned healthcare system has a long history of proletarian struggle behind it, going as far back as the late 1800s, but it began as state-subsidized health insurance scheme until it changed into a single-payer system in 1973. Japan implemented universal health coverage in 1961. And it goes without saying that the Stalinist states, despite their extreme flaws and mostly backward conditions, provided universal healthcare on the basis of their nationalized-planned economies.

All of this begs the question: why is the healthcare system in the US so chaotic and prohibitively expensive? The answer lies in the fact that the market, rather than state intervention, is the primary factor that shaped how healthcare is provided for the majority.

At the beginning of the 20th century, American workers spent only the equivalent of $100 on healthcare each year. This was because most of the time they could rarely afford a doctor, and used cheap and dubious potions to treat their diseases. If they did visit a hospital, it was most likely that they would die there. The advent of antibiotics and other medicines rapidly changed the role that hospitals played in medicine. Instead of a place of death, they became a place of treatment and distribution of medical products and services.

The working class and its mass organizations were the first to fight for healthcare for all. The Socialist Party, under Eugene Debs’s leadership, put out a demand for a compulsory healthcare system as early as 1904. A small group of academics who argued for a state-run healthcare system, known as The American Association for Labor Legislation, received thunderous support from workers, trade unionists, and women suffragists in 1919. Unfortunately, this demand, along with the movement behind it, was defeated by the ruling class during the first Red Scare. Some conservative legislators even fittingly branded the demand for universal healthcare as “Bolshevism.” The future of healthcare was left to the mercy of the market.

However, as medical care wasn’t as easy to sell as mass-produced commodities, hospitals had to figure out other ways to ensure a steady revenue and accumulation of capital. In 1929, the Baylor University Hospital in Dallas, Texas created a scheme whereby a group of public school teachers could pay a monthly premium to the hospital, and their subsequent visits to the hospitals would be free of charge. This model quickly became popular, and eventually, a health insurance company was founded based on it. The company’s name was Blue Cross, the precursor of today’s health insurance conglomerate, Blue Cross Blue Shield.

Bluecrossshield ad1950s

It wasn’t until World War II that private health insurance truly proliferated on the American market. During the war, private enterprises were under pressure to hire more people in order to produce for the war economy. Unlike their counterparts in Europe, where healthcare was statified, the US government provided tax exemptions and credits to companies in exchange for purchasing health insurance for their workers to attract more workers into their industries. This marked the beginning of employer-provided health insurance on a wide scale.

However, the workers could have halted this trend had it not been for the class-collaborationist labor leadership. There was a rank-and-file demand in the unions, especially in the industrial CIO, to fight for healthcare for all. The leadership of these unions initially took up the demand, but systematically discouraged rank-and-file participation in the campaign. Gradually, they began arguing that it was easier to bargain with individual employers for insurance rather than fighting for a national health insurance program. As the postwar boom gathered steam, and unionized workers won concessions from the bosses, including employer-provided healthcare, the pressure on the union leadership subsided and the movement for universal healthcare again fell by the wayside.

The companies that profit from the sale of health insurance and delivery of care services, known as Health Maintenance Organizations (HMOs), quickly tied the welfare of millions of American workers to the whim of the bourgeoisie under the government’s attempt to motivate corporations to administer healthcare, rather than placing it under state control. Between the 1940s and 1970s, the vast majority of health insurance enrollees were covered under industrialist Henry Kaiser’s HMO, known as the Kaiser system. 

The continuous expansion of American capitalism, coupled with conscious government encouragement, allowed a number of new HMOs to develop and thrive. In the 1970s, several major HMOs became for-profit and went public on the stock market. They quickly ran into a crisis of overproduction, resulting in the “HMO bust” from 1987 to 1990. This led to increasing concentration of the HMO industry, putting a large portion of American working class at risk, as they could easily be refused coverage by the HMOs if they were not covered by their employer’s plan.

To be continued...