Introduction
 

California residents are facing a medical emergency, caused by the greed and anarchy of capitalism in health care.   There is  a dangerous shortage of emergency and critical care beds because of massive closings of hospitals over the last five years.  These hospital closings, job eliminations, and patient care cuts were deliberately done to increase profits.   The cuts have produced untold misery for patients and healthcare workers.   They have also produced obscene profits for health maintenance organizations  (HMOs).

 

But healthcare is no longer profitable.   Capitalist healthcare has produced its own downfall.   Hospital closings, job eliminations, and patient care cuts are one-time-only savings that cannot be repeated, and other healthcare costs have continued to rise.  At the same time, the HMOs are in a dog-eat-dog struggle to steal each other's members, so they have kept their premiums down to undercut each other. The result is that after six years of record-breaking profits, HMOs have had two years of huge losses.

 

Their  immediate solution will be simply to raise premiums, but this is already causing a crisis.    HMOs and employers are refusing to pay hospitals higher rates, and hospitals are refusing to cover patients without the higher rates.  The health industry's  long-term solutions will be more consolidations, a new round of massive hospital closings,  a whole new form of managed care with more "teeth" to severely ration patient care, and abandoning the poor and the old.

 

As international financial crisis spreads and worsens, and as war over oil and world resources approaches, a major battle over healthcare is developing between two groups of capitalists. Some capitalists in private healthcare want to renew their profits by cutting their own costs more. But the more dominant capitalists have a more long- term outlook, and are more concerned with   reasserting the US as a world power. These capitalists  need overall health care drastically curtailed "in the national interest," and don't trust the marketplace to do this.

Hard as this may be to believe, it is quite possible that the rulers of this country will move healthcare away from the for-profit HMOs, and turn it over to "non-profit" health care like Kaiser, which will become centralized and quasi-governmental.   This sounds progressive, but it is not.  "Removing profit from health care" will mean the rulers have decided real healthcare is too expensive and should be abandoned so they can make greater profits elsewhere or rebuild their factories and military.  "Single-payer" will mean the rulers have decided to use the government to enforce healthcare rationing.

Like so many of the "reforms" offered by capitalism in crisis, this restructuring of health care will actually be fascism with a liberal cover.   Any attempt to make meaningful improvements in healthcare directly challenges the needs late-20^th century capitalism. Capitalist healthcare cannot be "fixed" without challenging capitalism itself and finally smashing it.

PROGRESSIVE LABOR PARTY envisions a communist future where workers control society.    We would work to supply each other's needs, not to make profits for an elite. Health care will exist to improve the quality of our lives rather than making money. This would make our work and our lives much richer and more integrated. There would be no reason for the horrors of racism, sexism, poverty, or managed care. Our fights against our downward spiraling wages, working conditions and standard of living can develop into a movement to unite, to act, and take power as a class. That is the purpose of PLP.

Read our newspaper CHALLENGE/DESAFIO about the day-to-day struggles to make this dream a reality.

   a dangerous shortage of emergency and critical care beds ...
 

• In the second week of January, there were times when no critical care beds were available from San Francisco through San Jose. The shortage of pediatric critical care beds was so severe that one Oakland hospital prepared backup plans to transport pediatric patients to Los Angeles. (personal communications)

 
• At San Francisco General Hospital (SFGH), the Nursery was closed to new patients for the first time in years. Non-emergency surgery was canceled because no beds were available for recovering patients. (Personal communication) Severely ill patients could spend 12-24 hrs in the Emergency Department, waiting for critical care beds. Emergency Room (ER) workers were having to care for both gunshot or heart attack victims and critical care patients waiting for beds. In the first two weeks of December '97, SFGH diverted critical ambulance patients to other hospitals 56% of the time. (SF Examiner, 12-17-97)

 
• For half of the month of January '98, city officials in San Francisco told Emergency Rooms that, no matter how busy they were, they could not divert new patients to other ERs, because all the other ERs in the city were just as busy. (SF Examiner, 1-27-98) In the last year, diversions were suspended in four of the last 12 months, more than in the last 10 years. (SF Examiner, 12-16-97)

 
• Kaiser Richmond's stand-by emergency department had thirteen-hour delays in transferring critically ill patients; a patient died there waiting for a critical care bed. At Kaiser Walnut Creek's ER, a child with extreme fatigue and shortness of breath waited more than 5 hrs to be seen. "I saw people lying on the floor in the emergency room; it was disgusting," the child’s mother said. (SF Examiner, 1-27-98) Kaiser was giving its ER patients fliers saying they would wait an average of six hours. (California Nursing Association,CNA, press release, 1-8-98)

 
• For the first two weeks in January, Washington Hospital in Fremont pitched a tent outside the ER for families of patients waiting for treatment. (SF Examiner, 1-27-98)

 
• Los Angeles County already is facing a serious undersupply of ER capacity, which will worsen by 2005. According to a May 1997 report by the National Health Foundation. In the mid-1980s there were 102 acute-care hospitals with basic ERs. Now there are 81 basic emergency rooms, and not all of those provide the full range of services for ambulances responding to 911 calls.  (Modern Healthcare, 7-20-98)

 
• The San Francisco Emergency Services administrator said hospital and ER patients are 25-50 percent above projections.  (SF Examiner, 1-27-98) Kaiser is seeing 10 percent more ER patients than this time last year. Davies Medical Center is seeing 25 percent more. (SF Examiner,12-16-97) This increase in ER visits is a reflection of fewer people having medical coverage.

 
• Emergency Room patients are much sicker than before. Thousands of people have lost medical coverage. 30% of San Francisco residents who were eligible for Medi-Cal managed care a year ago are no longer on the rolls, either because of intimidation of legal immigrants or because of losing welfare. (SF Chronicle, 11-18-97) Those who have lost Medi-Cal now have no coverage at all. They must use county hospital ERs when they get so sick they can no longer postpone care. By then, they are seriously ill, and often come into emergency rooms needing critical care.

 
hospital cuts deliberately done to increase profits ...
 

• In Contra Costa County, Kaiser refused to open an ICU in their newly built hospital in Richmond.  In February 1997,  woman with chest pains drove there, was transferred to Kaiser Oakland, which had no free beds because it was being closed, and died in transit to a third hospital.  (Modern Healthcare, 7-20-98)   Kaiser also closed its emergency room (ER) and critical care beds in Martinez in late January 1998, and plans to close its standby ER in Richmond in April 1998. (CNA, 1-8-98)   All Contra Costa Kaiser patients will be diverted to Kaiser Walnut Creek, whose ER can already barely handle its patients. An 84- year-old man died there on December 30. He had come to the hospital with shortness of breath and was not seen until almost 4 hours later, when he stopped breathing completely. (SF Chronicle, 1-10-98) In late May 1997, 12% of Walnut Creek ER patients left without being seen. (CNA Kaiser Pamphlet) Walnut Creek Kaiser’s 24-bed critical care unit is already operating at capacity. (SF Chronicle, 1-10-98) At Kaiser Martinez a man waited in the emergency room for eight hours, untreated, after suffering a stroke because the hospital’s CT scan was broken. Emergency room waits were so long that at one point, 19% of registered patients left without being seen. (CNA Kaiser Pamphlet)   Contra Costa County lost 282 beds between 1994 and 1996, while the population grew. (SF Examiner, 1-27-98)   Contra Costa County, in particular, has some of the lowest per-capita rates of health resources of any state.  The U.S. average is 3.0 acute-care beds per thousand residents, Contra Costa's is 1.7, the third lowest in the US.  Where the U.S. has 3.4 hospital-based registered nurses per thousand, Contra Costa has 2.1. Where the U.S. has 13.7 hospital employees per thousand, Contra Costa has 8.1. (Modern Healthcare, 7-20-98)

 
• In Alameda County, Kaiser plans to close its 167,000 member Oakland Hospital this year; it saw 61,000 ER patients per year. (SF Chronicle, 1-10-98) Kaiser is also investigating transferring hospitalized patients at Kaiser's Redwood City and Santa Clara hospitals to a rented floor at Stanford University Medical Center. It is investigating similar arrangements for Kaiser Hayward and Kaiser Fremont. (SF Chronicle, 12-15-95, 1-25-96, 2-12-96) Planned closings of Oakland, Richmond, and Sacramento Kaisers, plus the Martinez closing, means 9,880 licensed beds closed. (CNA webpage, "Empty by Design")

 
• Kaiser Permanente eliminated 1,600 RN positions (14% of the total) in Northern California over the past three years and is pushing to eliminate one in eight physicians. (California Nurses Association, "Medical Strip-mining and the New Nursing Shortage") Between 1991 and 1994, Kaiser reduced its overall hospitalization rate by 25%. Kaiser Hawaii reduced its average length of hospitalization by a full day within a single year. (SF Chronicle, 2-15-96) Kaiser's 1994-1997 Southern California business plan called for a 30% decrease in days of hospitalization per member. (The Link, CNA Kaiser Interfacility Newsletter, 9-95)

 
• In San Francisco, Kaiser and French merged, and then French closed. Garden-Sullivan, Pacific Presbyterian and SF Children's were merged into CPMC, which closed Garden-Sullivan and three ERs. (SF Examiner, 12-16-97) Letterman also closed. UCSF and Mount Zion merged closing the Mt Zion nursery. UCSF and Stanford have merged, probably leading to closings in pediatrics, OB, and radiology. In addition, UCSF and CPMC merged their OB-GYN, pediatrics and radiology services.

 
• California hospital closings reflect a pattern of racism and anti-working class bias that the California Nurses Association aptly calls "Medical Redlining," which it defines as  "abandoning communities where ill people are concentrated in favor of

communities where healthy people predominate, with a goal of increasing overall profits and revenues." (see the CNA Kaiser Pamphlet for really excellent documentation)
 
In the San Francisco Bay Area, Kaiser's new Richmond hospital, where the ICU was never opened and where the ER was recently closed, is located in a predominantly black industrial city, with four times the poverty rate of Walnut Creek, where Kaiser is keeping its hospital open.   The now-closed Martinez facility, where the stroke victim waited eight hours because of a broken CAT machine, is in a working-class part of Contra Costa County with 1.5 times the poverty rate of Walnut Creek.  The flagship hospital in Oakland targeted for closing is in the middle of a majority black city with low average family incomes and four times the poverty rate of Walnut Creek.
 
In Los Angeles County, the May 1997 report on emergency room access by the National Health Foundation divided the county into 10 hospital regions. It found a shortage of emergency capacity in seven regions largely working-class and minority. It found a surplus in middle-class San Fernando, and Glendale areas and the wealthy West Side. (Modern Healthcare, 7-20-98)
 
 
• According to SF Emergency Medical Services Quality Control officer Mark Forrett, " We have discovered that staffing for critical care beds is the major determinant factor when hospitals go on critical care diversion." (internet news group letter) SFGH is short 13 critical care RNs and the three Catholic Hospital West hospitals in San Francisco are short 32 ER and critical care RNs by their own admission. (SF Examiner, 12-16-97)

 
• New York City Hospitals closed 1,000 beds and got rid of 5,000 workers in 1995. (NY Times, 10-26-95) At least a dozen New York City hospitals closed during the 1970's.

 
• At Los Angeles in May 1966, after the federal "bailout" of the county healthcare system, 6 county clinics had already been privatized, 20 county clinics were being privatized, 2,400 health workers were already laid off, 3,500 positions were being cut, and officials were in the process of closing 1700 County beds, a one-third reduction. (LA Times, Modern Healthcare, 10-2-95)

In November 1997, the LA County Supervisors voted to decrease County-USC Medical  Center from 960 beds to 600 beds.  County-USC Medical Center is the biggest public hospital in the US, in the midst of the biggest unsured population in the US, 2.8 million and expected to grow by 25,000 per year.   Nearly a third of the population under age 65 is uninsured. (LA Times, 10-30-97)   The former head of the LA County medical Association said "They are going to be dying in the hallways, dying waiting to get into the operating room."  (LA Times, 11-13-97)  A family practice doctor predicted that private hospitals in the vicinity of County-USC would close their own ERs, rather than risk begin "stuck" with indigent patients who could not be transferred out because County-USC had no room to accept them.  (LA Times, 11-12-97)

 

• Nationally, hospitals are still operating at 60 percent of capacity, but many of the unused beds are "mothballed," adding little to costs, so most hospitals have been able to generate profits or, in the case of nonprofit hospitals, surpluses. (NY Times, 1-5-98) Kaiser Permanente has about 2,000 licensed but unstaffed beds in California. (CNA webpage, "Empty by Design"

  . untold misery for patients and healthcare workers ...
 

The effects of these hospital closings, job eliminations, and patient care cuts have been catastrophic.  They have produced untold misery for patients and healthcare workers.
 
• The US has the worst infant mortality, highest percentage of low-birthweight babies, shortest male life-span, second-shortest female life-span, and second-lowest visits to doctors per person of all industrialized countries.
 
• 41 million of us across the country have no health coverage (17%), including 6.5 million of us in California. (SEIU Unity, Feb./March 95) Over 100,000 people die yearly in the US from lack of health insurance, 11 per hour. (Vincent Navarro, 1993, quoted in Don DeMoro, Restructuring Health Care, SEIU 250 publication, J-3) An additional 29 million people with private insurance are underinsured, "risking out-of-pocket expenses in excess of 10 percent of family income in the event of a catastrophic illness." (SF Examiner, 10-25-95) Medicaid covers only about 47 percent of the poverty population. (Nation, 1-9-95)
 
• Most people without medical insurance have jobs. Nationally, 40% of jobs have no health benefits, including one of three healthcare workers. The General Accounting Office says of the 9.3 million children lacking health insurance during 1993, 89% had at least one parent working full-time. (Don DeMoro, Restructuring Health Care, SEIU 250 publication, p. I-3)  80% of the 2.6 million medically uninsured in Los Angeles either have jobs or are dependents of someone with a job. (L A Times, 10-30-95)
 
• Institutional racism has made these cuts particularly devastating to minorities. New York City's black and Latino communities have five times the national average number of TB cases, and comprise 80 % of cases in the state. (Nation 2-28-94) Survival rates among blacks for several common cancer are half those of whites, also from lack of early detection. The leading causes of death among black women 15 to 50 years old are breast and cervical cancer, mainly for want of early detection. Only 22 percent of women diagnosed with breast cancer at Harlem Hospital live five years, compared with 76 percent of white women and 64 percent of black women nationwide. Between 1989 and 1993, black women in their fifties had only one ninth the drop in breast cancer death rates as their white counterparts. (SF Chronicle 5-8-96) A recent DPH study in San Francisco showed that in Bayview-Hunters Point, the rates of cervical cancer and breast cancer for women under 50 are twice that of San Francisco as a whole, due to lack of gynecological care and pap smears. (SF Examiner 8-18-95, SF Chronicle 9-22-95) Black infant mortality is twice as high as white infant mortality, largely due to premature birth and low birth weight, which are largely preventable by pre-natal care. Low-birth weight infants are known to have forty times the risk of dying in the first month of life. (NY Times, 1995) Blacks have proportionately fewer heart bypasses even though heart disease is the main killer of black Americans.
 
• Figures of Latinos are similar. Over one-third of Mexican-Americans under age 65 lack health insurance. Latinos represent half of California's approximately 6.4 million uninsured. Stillbirths among California Latinos increased by 45 percent between 1987 and 1989 while infant mortality rate improved in the state as a whole. The average waiting period to obtain a prenatal appointment in a Los Angeles County clinic is more than 16 weeks, past the critical first trimester . The average life expectancy of Latino farm workers in the U.S. is 49 years, compared with a national average of 75 years for non-Latinos.

 
• Beyond race, the disparity of health between rich and poor is appalling: A recent report from the National Center for Health Statistics shows people with less money and less education die younger and suffer more from virtually every health problem.   For people of the same race and gender, lack of money or education was associated with: a seven-year gap in life expectancy,  2.4-fold more babies dying in their first year,  a 5-fold increase in teen-age pregnancy,  a 6-fold increase in toxic blood-levels of lead,  and a greater probability of dying from heart disease (2.5X),  lung cancer (2.4X),  diabetes (3.0X), and  suicide (3.7X).  (LA Times, 7-29-98 and 7-30-98)  These statistics are a mirror of a society where the current disparity of wealth is greater than ever recorded starting in  the early 1930s, and the richest 1% has more wealth than the poorest 90% combined.

obscene profits for health maintenance organizations ...
 

• From 1989-1995, healthcare was the most profitable industry in the US. (NY Newsday 4-17 95)

 
• The profits of the 7 largest providers jumped 700% in one year. (California Nurse, 5-96)

 
• In 1994, the top 21 HMOs, hospital chains, and long-term care providers made over $3 billion profits (LA Times, 5-4-95) and California's six biggest HMOs made $1.13 billion. (SF Examiner, 3-10-96) Northern California Kaiser alone made over $813 million. (SF Chronicle, 2-12-96)

 
• Kaiser’s 1993 profits were so high that dozens of pages of memos were exchanged between high-level administrators discussing how to explain these profits to its workers whose jobs were being cut, and to its patients whose hospitals were being closed. One sample: "As much as possible, present 1993 financial results in context so that they don’t conflict with current budget/layoff imperatives." (California Nurses Association)

 
• The CEOs of the 7 largest HMOs earned an average of $7 million in 1994. (California Nurse, 6-95) The stock holdings of CEOs of the top ten are worth $2.4 billion. (Ralph Nader, speech to SF conference on managed care, 8-95) Columbia/HCA’s CEO owns $249 million in stock. The CEO of PacifiCare, SFGH’s one-time HMO partner, owns $35 million in stock in addition to $1.2 million salary. (California Nurse, 3-96) The value of stock owned by just the top 25 health care executives by itself could provide medical insurance to 14% of the nation’s uninsured. (California Nurse, 3-96) With the merger of US Healthcare and Aetna, among the largest HMOs and insurance companies, US Healthcare’s CEO Leonard Abramson received a cash and stock bonus of $929 million, more than enough to fund LA County’s 1996 healthcare budget deficit (California Nurse, August 1996)

But healthcare is no longer profitable..
 

• Kaiser Foundation Health Plan, the biggest HMO in the country, lost $270 million in 1997, its first loss in its 50 years. Only last year its profits were $265 million. Its first quarter 1998 losses were $92 million. (SF Chronicle, 5-2-98) Kaiser traces its problems to its own success in attracting new members in California. Kaiser was then unprepared to handle additional members and had to pay to have them treated elsewhere.   Standard & Poor's credit-rating service placed Kaiser's debt on "credit watch with negative implications." (LA Times 2-14-98) Kaiser had a 20% growth in membership last year. It has 8.9 million members nationally, including 1/3 of Northern California residents with coverage. It has $12 billion in assets. (SF Chronicle, 2-14-98)

 
• "HMO (patient) ranks continue to grow, while profits continue to sink. ... Profits at the nation's HMOs fell 60 percent last year, from $1.8 billion in 1995 to $700 million in 1996," according to a recent report by Weiss Ratings Inc. in Palm Beach Gardens. The rating agency looked at 344 managed care companies nationwide, which insure nine out of 10 HMO members. "This was the second year of declining profits after six years of steady profit growth," said Martin Weiss, the agency's chairman. "The reason is health care expenses went up, but HMOs were unable to raise premiums accordingly, due to increasing competition in the managed care industry." As a result, Weiss believes that HMOs now are under pressure to either raise rates, cut services or do both. (South Florida Business Journal, 9-1-97)

 
• "Many other health care organizations and major insurance companies like Aetna, the Cigna Corporation and the Prudential Insurance Company of America are suffering losses this year or acute erosions of their profits." (NY Times, 10-19-97)

 
• "Despite a 3.2 percent increase in enrollment during the second quarter, overall profits for Florida's health maintenance organizations plummeted by 72 percent, with more than half of the health plans losing money." (Orlando Business Journal, 9-23-96)

 
• "Combined first-quarter net income for the 10 health plans with the largest local enrollment was down 21 percent from the first quarter last year. PacifiCare Health Systems saw its stock tumble in June after preliminary reports that second-quarter earnings will come in far below initial projections." (Sacramento Business Journal, 7-21-97) PacifiCare's fourth quarter 1997 profits dropped 53% from a year before. PacifiCare blamed losses in the Utah operations of FHP International, which PacifiCare acquired last year. PacifiCare said it would close the Utah operations down if it could not sell it. (LA Times, 3-5-98)

 
• "Shares of Oxford, the biggest health maintenance organization in the New York area, fell 62.4 percent in Nasdaq trading. Oxford's announcement was only the latest in a string of disastrous financial reports in the managed health care industry, as Aetna, Cigna and other companies said that higher costs would reduce their profits, too." (NY Times, 10-28-97)

 
• "Six of the seven largest HMOs in Georgia saw their profits plunge in the first half of 1996. The six companies' net incomes dropped anywhere from 28% to 95%. Three of the seven -- Cigna, United and U.S. Healthcare of Georgia Inc., registered losses in the second quarter, according to the filings." (Atlanta Business Chronicle, 9-2-96)

 
• Some critics of managed care say the savings from restrictions like limiting access to specialists and tests can be realized only once. "We may have squeezed what we can out of the health care system," said Assemblyman Alexander B. Grannis, a Manhattan Democrat who is chairman of the Insurance Committee. (NY Times, 1-11-98)

 
• "Many analysts in New York state say the primary reason (for HMO losses) is that managed care companies had kept prices artificially low for years to encourage reluctant New Yorkers to sign up and are only now coming to terms with the actual cost of care." (NY Times, 1-11-98)

 
• "The competitive landscape has shifted. There are a lot of HMOs competing for a finite amount of business. The upshot has been that HMOs have not been able to raise premiums like they used to." (CNN financial services 1-17-97)

 
• HMOs are complaining that Kaiser deliberately undercut rivals' prices to grab market share, then found itself unable to make money on the new business. California Nurses Association Executive Director Rose Ann DeMoro claimed that Kaiser has diverted funds from patient care to pay for advertising and marketing, management consultants and mergers and acquisitions "for the sole purpose of dominating the HMO market." (LA Times, 2-14-98)

 
• Stuart H. Altman, a Brandeis University professor who is chairman of a council studying changes in the health system for the Robert Wood Johnson Foundation said it all: "In the early days, the HMOs extracted fairly substantial profits. Those days are over." (NY Times, 1-5-98)

 
The HMOs' immediate solution will be simply to raise premiums. ...
 

• Increases in health premiums are endangering employee's medical coverage. A law firm with 20 employees in Kenilworth, NJ, was recently notified by Aetna U.S. Healthcare that monthly premiums would rise 19 percent for single employees and 28 percent for families with children. Benefits experts expect big employers to see rate increases of 9 percent to 14 percent in most parts of the country. (NY Times, 4-24-98) Kaiser won 12-14% rate increases from the Health Insurance Plan of California, which purchases health insurance for about 8,000 California companies with fewer than 50 workers. (LA Times, 4-25-98) Kaiser, has demanded a 12% 1998 rate hike from CalPERS, the nation's second largest purchaser of employee health benefits, which purchases health benefits for more than 1 million state and local public employees. (CalPERS press statement: April 14, 1998) CalPERS members on Kaiser's Medicare plan would have a 27% increase. (LA Times, 4-15-98) Sources familiar with the negotiations say Kaiser may try to phase in rate increases of up to 30 percent over the next three years. (SF Business Times 3-27-98) CalPERS has warned Kaiser that it may freeze further enrollment unless it cuts its rate request by half. Kaiser has warned CalPERS that it may withdraw from the state health plan entirely if it doesn't get what it wants. (LA Times, 4-15-98) 340,000 CalPERS members belong to Kaiser.

 
• Sutter Health, with 26 hospitals in Northern California, planned to cancel its $60 million contract with California Blue Cross, which refused the rate increases Sutter demanded. 180,000 Blue Cross enrollees would have been  without non-emergency care. Blue Cross covers 4.4 million in California, and its CaliforniaCare has contracts to cover Medi-Cal recipients in several counties. (SF Chronicle, 5-16-98, Modern Healthcare, 5-18-98)  After a three week standoff, Blue Cross relented, agreeing to Sutter's increases. (SF Examiner, 6-6-98)

 
• In the wake of Blue Cross's capitulation to Sutter, Catholic Healthcare West, with 30 hospitals in California, has cancelled its contract with Blue Cross as of July 7 1998, over clashes on reimbursement rates.    No new non-emergency care will be available for Blue Cross members.  (SF Bay Guardian, 7-8-98)

But the HMOs' long-term solution will be more consolidations and ...
 

The long-term solutions will have to be more consolidations, a new round of massive hospital closings, and a whole new form of managed care with more "teeth" to drastically restrict patient care.  This will include abandoning Medicaid and Medicare coverage for expensive or unprofitable paitents such as the poor and the elderly.  The devastation of health care over the last five years is not enough!

 

• There will be even more hospital consolidations as bigger HMOs with more cash reserves can hold out and undercut smaller HMOs and then raise rates higher than the smaller HMOs did. "The fierce competition for customers has driven out some contenders, leaving those remaining freer to seek higher rates. For very small programs with disproportionately high numbers of chronically sick members, increases of over 30 percent are expected." (NY Times, 10-19-97) Robert Hoehn of Salomon Brothers said half of the HMOs in the country aren't viable. While many will be acquired, others will disappear.  In Dallas, for example,  recent mergers, plus one in the works, will eliminate four of the nine biggest health plans, which cover  80 percent of the patients. After a merger in western Pennsylvania, Highmark Blue Cross and Blue Shield provides coverage for more than 60 percent of the population of Pittsburgh and 29 surrounding counties. (NY Times, 6-29-98)

 
• There will be a faster pace of hospital or bed closings as HMOs that develop monopolies in their areas will now be free to close "excess capacity." "It's clear we have overcapacity," said Thomas H. Crenshaw, senior vice president for strategic planning for Health Midwest, the largest hospital chain in the area. "This continued building is counterintuitive from a community-need perspective." (NY Times, 11-22-97)

 
• "In general we have probably twice as many physicians as we need," said Kathryn A. Paul, president of the Rocky Mountain Division of Kaiser Permanente, which oversees the big health maintenance group's Kansas City services. The surplus, Ms. Paul said, generates excess demand, with underemployed doctors hustling for patients. (NY Times, 11-22-97) People are dying in Kaiser's Emergency Rooms, and 100,000 people a year die from lack of health insurance, and yet health care capitalists say there are twice as many doctors as we need!

 
• There will be a tougher form of managed care than in the past, one which will directly restrict patient care as opposed to the "failed" managed care which was a mixture of restricting patient care and holding down premiums.

 
• Standard and Poor's Financial service said of Kaiser: "More conservative financial practices, strategic and operational restructuring initiatives, and higher premiums are expected to yield improved earnings by 2000.  Lasting prosperity, however will depend on the unified efforts of management and their independent Permanente Medical Group partners (the doctors) to align the system's capacity with demand and effectively manage costs."  (S&P Creditwire, 6-24-97)

 
• As HMOs are realizing they cannot make profits off elderly, sick, or poor patients, they are dropping their Medicaid and Medicare plans.   "Market woes are so severe that experts wonder if any MediCare HMO can prosper indefinitely" (NY Times, 9-9-98)   The July 6th New York Times says: "Citing losses and cuts in government payments, the nation's biggest health maintenance organizations are quitting managed care programs for the poor and elderly ... advocates for patients say they fear the retreat will bean a return to crowded Medicaid mill clinics delivering inferior care."  Managed care organizations like Aetna U.S. Healthcare, Pacificare, Oxford Health Plans, Kaiser Permanente and Blue Cross and Blue Shield Associations have shut down some of their Medicaid (Medi-Cal) services in at least 12 states, including New York, New Jersey, Florida, Massachusetts and Connecticut.  (Also see NY Times, 9-9-98)   The withdrawals have spread to Medicare managed programs for the elderly, primarily in rural  communities with few patients and where clinics and doctors are scarce. In May, Anthem Blue Cross and Blue Shield said it was pulling out of Medicare plans in 19 Ohio counties. Last month, Health Net, a large California HMO, said it would end its Medicare service in 10 counties.

Part of this is due to government cutbacks to Medicaid and Medi-Care.  The 1997 Balanced Budget Act reduces federal Medi-Care spending by $115 billion over the next five years.  (NY Times, 9-9-98)  "The economics of serving people on Medicare make it virtually impossible to make money," said Karen Korn, a health care services analyst at Putnam Investments in Boston. "The government has approved rate increases for Medicare managed programs of about 2 percent while medical costs are rising at 4 percent or higher. "There's no way that translates into OK margins," Ms. Korn said. (NY Times, 7-6-8)     Meanwhile, Washington is still pushing to force even more Medicaid and Medi-Care recipients into managed care plans.  (NY Times, 9-9-98)

Most of the withdrawals from Medicaid care have come in the most populous states with large  pockets of urban poverty. The  Massachusetts Blue Cross and Blue Shield Association and the Tufts Health Plan dropped out  dropped out of the Massachusetts Medicaid program.  (NY Times, 7-6-8)  Oxford Health Plans has canceled its contract to cover 33,000 Medicaid managed care recipients in Connecticut, raising questions about its commitment to cover 42,220 more in New York City.  In early February 1998, U S Healthcare withdrew from the New York City Medicaid managed care program, where it was to cover 24,000 recipients. In August 1998, U S Healthcare announced that it was absorbing a  $900 million charge  to be able to back out of Medicare plans in 35 counties, an announcement that made Wall Street wonder whether any profits could be made off Medicare patients.  (NY Times, 8-7-98)  Over the past year, eight organizations, including Aetna U.S. Healthcare and Prudential, have  dropped Medicaid programs in New York state. Both states have cut back their Medicaid reimbursement to participating HMOs. (NY Times, 2-26-98)    In March, Kaiser Permanente, the biggest HMO, quit  Medicaid care in Charlotte, N.C., and last year Humana did so in St. Louis.  Pacificare, the nation's third largest HMO and which was supposed to have been SFGH's partner in Medi-Cal managed care,  has decided to drop all Medicaid services, closing programs in California, Oregon and Utah. In California, Blue Cross, the designated private HMO for half of the Medi-Cal managed care population in San Francisco and Contra Costa counties, does not want the business any more, since California's Medi-Cal rolls have been greatly reduced. (SF Chronicle, 11-18-97)

In a similar way, economic pressures force  HMOs out of Medi-Care markets where old and sick people are concentrated.   On the average,  managed care companies get $5,700 per year per Medi-Care patient.  90% of these patients are healthy and cost about $1,200 per year.  10% are not healthy and cost about $37,000 per year.  This should make it easy to make profits, but the problem is that healthy patients live in non-urban areas where there are fewer hospitals, and therefore less incentive for hospitals to cut rates they charge to the managed care companies.  (NY Times, 9-9-98)  The only HMOs that have made money from Medi-Care are PacifiCare and Humana, which pay doctors a fixed amount of money per month per patient (physician payment on a capitation basis), thus passing the financial risk onto the individual provider.  (NY Times, 9-9-98, LA Times, 8-12-98)   Despite this, even Humana is dropping some it its Medi-Care markets.  (LA Times, 9-16-98)

Instead, public and county hospitals are taking over Medicaid and Medi-Care patients.  This is a recipe for disaster.  On one hand, federal and state reimbursement for these patients is dropping, up to 20% since the mid-90s.  On the other hand, public and county hospitals are already drained by serving indigent patients, and have no rich patients to shift Medi-Cal/Medicare patients’ costs onto.  As the Times says, "Advocates for patients say they fear the retreat will mean a return to crowded 'Medicaid mill' clinics delivering inferior care."   (NY Times, 7-6-98)
 

A major battle over healthcare is developing between two groups of capitalists. ....
 

In respnse to this crisis in healthcare,  an intense struggle between two different modes of managed  care has developed.
 
In one corner are the free-market, for-profit HMOs, typified by the giant hospital chain Columbia/HCA.
 
In the other corner are the giant "non-profit" HMOs with their own chains of hospitals and doctors, typified by Kaiser-Permanente.
 
One sign of the struggle between the giant for-profit HMOs and the giant non-profit HMOs  is their positions on federal regulation of HMOs.   Let's be clear on this:  neither the Democrat or the Republican plans challenge the basic premise that the rich and powerful have the right  to restrict our medical care.
 
All of these plans are restricted to workers with health benefits from their jobs, an estimated 168 million.  But 40% of jobs has no health coverage; these workers are excluded.  Medicare and Medicaid (Medi-Cal) recipeints are excluded.  Indigent people with no coverage at all are excluded. The Senate Republican plan is further limited to workers in companies that self-insure their employees, an extimated 48 million. (SF Examiner, 7-20-98)
 
In fact, as we saw above, both for-profit and non-profit HMOs are abandoning care of Medicare and Medicaid patients.
 
As Bill Clinton says, "Our job ... is not to abolish managed care. Our job is to restore managed care to its proper role in American life, which is to give us the most efficient and cost-effective systems possible,"  (LA Times, 7-16-98)
 
Nevertheless, the non-profit HMOs and for-profit HMOs still have radically different outlooks about government regulation:
 
The non-profit HMOs are for government HMO regulation:  Approximately 18 Kaiser HMOs and HMOs and Kaiser affiliates (9 million covered) and an equal number of other HMOs that are also non-profit and have their own hospitals and staffs of doctors have formed THE HMO GROUP to lobby and promote their interests. This group is pushing to have HMOs governed by all of the federal regulations proposed by the Clinton and the Democrats, with the important exception of allowing HMOs to be sued. (See below.)  (NY Times, 7-14-98)  In fact, as we will see, the non-profits helped draft the regulations.
 
The for-profit HMOs are vehemently against government regulation:  Eight of the largest for-profit HMOs, many offshoots of insurance companies, have united with business lobbiests like the US Chamber of Commerce, the National Federation of independent Business, and the National Association of Manufacturers to form the Health Benefits Coalition.     The HMOs are  Blue Cross/Blue Shield Assn (18 million), United Healthcare/Humana (10 million), Cigna (6million), Aetna-USHealthcare (5 million), New York Life/NYLHealthCARE, Premier, and Prudential HealthCare.  Other members are The American Association of Health Plans (1000 managed care companies, 140 million covered) and Health Insurance Association (commercial health insurers).   (HBC webpage) (Coverage figures from Modern Healthcare, 6-1-98)  The Health Benefits Coalition is pushing to have no federal regualtion of HMOs at all.  (NY Times, 7-14-98, SF Examinier, 7-13-98)
 
What are these plans for HMO regulation?
 
As of mid-July 1998, there are three major legislative HMO reform plans: a Democrat Senate/House proposal (Kennedy,Mass/Dingell, Mich), a Republican House proposal, (Gingrich, GA), and  Republican Senate proposal.  These are the highlights:
 
Health plan liability in case of death or injury:
DEMOCRATS: Allows plan members to sue under state malpractice laws by removing ERISA shield.
HOUSE REPUBLICANS: Expands penalties for health plans for inferior care, $250,000 cap on medical malpractice awards.
SENATE REPUBLICANS: No provisions
 
Appeals process for patients denied particular care by an HMO:
DEMOCRATS: Requires an internal appeals process and a government-certified company for external.
HOUSE REPUBLICANS: Requires internal appeals process through HMO-appointed arbitrator, non-binding.
SENATE REPUBLICANS: Requires internal appeals process and external appeals board selected by the health plan, for "medically necessary" procedures over $1000..
 
Patients' access to specialists:
DEMOCRATS: Allows the chronically ill to consult specialists to get adequate care. Allows women to choose an OB/GYN as primary care provider.
HOUSE REPUBLICANS: Allows children to choose a pediatrician and women to choose an OB/GYN as primary care provider.
SENATE REPUBLICANS: Allows women to choose an OB/GYN as primary care provider and children to see a pediatrician without a referral
 
Continuity of care if patient or doctor is dropped from health plan:
DEMOCRATS: Requires up to 90 days of coverage after primary care doctor is dropped from plan or coverage is ended.
HOUSE REPUBLICANS: No provisions.
SENATE REPUBLICANS: Similar to Democrats' plan
 
Coverage of services by Emergency Rooms not part of patient's HMO: 
ALL PLANS: Must be covered if a reasonable person would have concluded such care was needed.
 
Doctors right to discuss treatments not covered by HMO ("gag rule")
ALL PLANS: gag rules prohibited
 
Length of hospital stay following mastectomy
DEMOCRATS: Allows 48-hour hospital stays.
HOUSE REPUBLICANS: No provision.
SENATE REPUBLICANS: No provision.
 
Medical Savings Account
DEMOCRATS: No provision.
HOUSE REPUBLICANS: Some expansion of medical savings accounts.
SENATE REPUBLICANS: Vast expansion. Allows tax-deductible contributions to medical savings accounts instead of comprehensive insurance.
 
Disclosure of information to patients and potential patients:
DEMOCRATS: includes drugs covered and patient outcome/satisfaction information
REPUBLICANS: limited to what is covered and appeals process.
 
(data from LA Times, 7-15-98, 7-16-98,  SF Examinier, 7-13-98, SF Examiner, 7-20-98)
 
 
Part of this struggle between the for-profits and the non-profits is a simple dogfight between two competing groups of capitalists. But this is not simply a struggle over immediate profits. These two competing groups of capitalists have completely different sources of money and power, and completely different national agendas and needs. Increasingly, they cannot co-exist.
 

• Columbia/HCA is controlled by a newly-rich group of Texas capitalists. Richard L. Scott started Columbia/HCA in 1987 by buying two El Paso hospitals with Richard Rainwater, a Texas investor with big holdings in Texas natural gas, oil drilling, Marathon and Texaco oil companies, Texas real estate, and Walt Disney. This money has fueled the growth of the Columbia/HCA empire. At its height, Columbia/HCA controlled 340 hospitals, nearly half of the for-profit hospital beds in the country, 200 home health care agencies, and 135 outpatient-surgery offices. It was the nation's 10th largest employer, with 240,000 employees. Columbia acquired in-trouble hospitals at the lowest possible cost, closed or consolidated facilities which duplicated services, and cut staff. At one point, it was acquiring a new hospital every ten days. (texasmonthly.website, Modern Healthcare, 5-15-96)

 
• Kaiser, on the other hand, was founded as a health plan for workers in Kaiser steel, cement, and shipbuilding industries during WWII. These industries are financially tied to older Rockefeller money and the corporate banking system of the US, particularly Chase-Manhattan.

 
• The "new-money", "oil patch" Texas capitalists tied to Columbia/HCA get their money from domestic oil production and high-tech industries. They do not have the interest or the money to compete in the world-wide market, particularly in foreign oil. Their interest is in amassing as much money as possible, as quickly as possible, domestically. They do not want to pay taxes to support world-wide armies to dominate other countries. They therefore are associated with isolationism, anti-NAFTA, anti-taxation, anti-government rhetoric, and highly speculative financial dealings for quick profits. They are generally portrayed as "reactionary," and are tied to the militias, the Promise Keepers, and the anti-abortion movement. They are not as rich and as powerful as the "old-money" Rockefeller capitalists, but in the last three decades their position has risen enough that they now challenge the "old-money" Rockefeller interests.

For example, in healthcare,  the Health Benefits Coalition (see above), representing the largest for-profit HMOs and insurance company related HMOs, also contains Citizens for a Sound Economy (CSE), which called managed care reform "the road to socialized medicine."  (American Federation of State, County, and Municipal Employees, AFSCME, bulletin, 1-23-98)

Citizens for a Sound Economy is associated with Congressman Dick Armey, who promotes Steve Forbes' flat tax, and with Congressman BillyTauzin, who promotes a national sales tax.

CSE received  $9.3 million from foundations of the Koch family, the largest family owned business in the US, from domestic oil, gas, coal, and chemicals. The Koch foundations considered CSE "an important weapon in the assault on government interference in business." (Nation, 8-26-96, and the CSE webpage)

• The more dominant "old-money" Rockefeller interests tied to Kaiser get their profits from foreign countries, chiefly oil from the Mid-East. Their interest is in trying to maintain the US's weakening hold on the rest of the world, because capitalists in Germany, France, Russia, and even China are threatening this domination. Therefore the Rockefeller interests are in maintaining a strong US military force, pursuing an aggressive foreign policy to maintain US interests abroad, and building up the World Bank and International Monetary Fund to promote world-wide financial stability. The "old money" also wants to regain the loyalty of a bitterly cynical working class, particularly minorities, so they will fight in foreign wars to regain US domination abroad. They therefore are associated with internationalism, a longer-term national outlook, and are pro-taxation and pro-central authority. They are generally portrayed as "liberals," and support affirmative action, abortion, and unions, if kept sufficiently subservient. This is the group that is leading the US into war in the Mid-east and eventually into world war.

 
For example, in healthcare, The HMO Group (THMOG), representing non-profit HMOs with their own hospitals and staffs of doctors, has as a goal "to coordinate national health priorities through collaboration between public agencies and private sector HMOs,"   THMOG has close ties with the Robert Wood Johnson Foundation, the largest US think tank and philanthropy devoted to health care issues.  Much of the Johnson Foundation's work has been helping states get "waivers" from the federal government, excusing states from federal requirements of providing medical and welfare assistance to poor people.  Even before the Clinton/Gingrich welfare reform program,  Clinton's Health and Human Services Department granted waivers to 2/3 of the states in the country.  Many of the Medicaid waivers put together by the Johnson Foundation involved public/private partnerships in the sense of forcing Medicaid recipients into private HMOs.

THMOG recently received a 5 year multi-million dollar contract from the federal Centers for Disease Control and Prevention's National Centers for Chronic Disease Prevention and Health Promotion (NCCDPHP)  to assess the linkage between private providers of health care services and the CDC and other Public Health Service agencies. According to THMOG;s press release, "The HMO Group shares CDC's vision of fostering bridges between public and private health partners that benefit the entire community."
 

 
• In fact, both groups of capitalists are equally workers' enemies. The agenda of the dominant "Rockefeller" capitalists calls for extracting gigantic sums of money to rebuild the US manufacturing base and infrastructure, and re-arm the military for war. This is why the "liberal" Clinton passed "Workfare" (Welfare Reform), forcing welfare recipients to work and replace millions of "regular" workers who will go on workfare themselves, tremendously lowering all worker's wages.

• For more information on the struggle between the the dominant "Rockerfeller" capitalists and the "new-money" domestic oil-based capitalists,  see the Progressive Labor Party article "Fascists versus Fascists," in the January, 1998 issue of Communist.

The Rockefeller agenda of extracting billions for rebuilding the manufacturing base and the army means limiting the profits of their domestic rivals, and severely limiting the amount of money that workers get for healthcare. The Rockefeller capitalists cannot afford to spend as much heath care money as the for-profit HMOs use, and they cannot afford to let profits go to their "new money" rivals. The stakes are huge, health spending accounts for one-seventh of gross domestic product. As international financial crisis worsens and as war over oil and world resources approaches, many economists are deciding health care costs must be drastically slashed "in the national interest," and free-market economics cannot be depended on to do this.
 

• "Some economists have begun to question whether, over the longer term, health maintenance organizations can deliver on their promise of keeping health costs under control. "Oxford joined the long list of HMOs that lost control over costs," said Kenneth S. Abramowitz, an analyst at Sanford C. Bernstein & Co." (NY Times, 10-28-97)

 
• "As for the HMO's, their job is getting more difficult," said Mr. Altman, consultant for the Robert Wood Johnson Foundation. "They have to push harder on one side, against doctors and hospitals. On the other side, buyers are more demanding; they want higher quality, lower prices, greater access and more choice of doctors and hospitals." (NY Times, 1-5-98)

 
• "United Healthcare's woes also raise the question of whether managed care works as a model for the future of health care in keeping costs under control. While the company's difficulties are limited to caring for the elderly, it is unclear how successful any managed-care company will be once it covers more people. The backlash from consumers, who are increasingly demanding more from their plans and want more choice of doctors and hospitals, adds to the difficulty of containing costs. 'You can't make huge margins in this business long term,' Feinberg argued."  (NY Times, 8-7-98)

The rulers of this country may well move healthcare away from the for-profit HMOs ...
 

This restructuring of health care will actually be fascism with a liberal cover ...
 

• Fascism is using force and threat of economic ruination to wring more profits from workers, through huge cuts in wages and services, especially health.

•  Fascism is increased monopolization of the economy to capture profits for the dominant capitalists, and the merging of business and government to assure that business and government serve the dominant capitalists. (The merging of government and business is an attempt to rebuild the decaying factory system and infrastructure and prepare for war to regain international power.)

• In the mid-1970s, US rulers realized that their defeat in Vietnam had broken the US stranglehold on the world's economy. They realized there would be serious problems for US capitalists in the coming decades, and that they would have to greatly reduce the living standards of the working class. Business Week (10-12-75) wrote :"Yet it will be a hard pill for many Americans to swallow --- the idea of doing with less so that big business can have more. ... Nothing that this nation or any other nation has done in modern history compares to the selling job that now must be done to make people accept the new reality. And there are grave doubts about whether the job can be done at all. Historian Arnold Toynbee, filled with years of compassion, laments that democracy will be unable to cope with approaching economic problems --- and that totalitarianism will take its place" (Setting the stage for using force to impoverish workers and enrich the capitalists.)

• The head of the Robert Wood Johnson Foundation, the most powerful medical think-tank in the US, is Steven Schroeder. In 1890, as a member of the UCSF Health Policy Group, Schroeder organized a Cost Containment Conference, where he said "the main culprit in the high cost of medical care is our current inability to make and enforce decisions about what medical services we need and can afford." (Personal observation) Schroeder popularized the notion that "low-cost, high-utilization technologies such as lab testing create more of a regulatory problem than do the ‘high-fliers’ (high-tech CAT scans etc.)." He deplored the increased use of lab tests in maternity care, and in diagnosis of appendicitis, breast cancer, and heart attack at the Palo Alto Clinic, a primary-care based clinic serving the East Palo Alto ghetto as well as Palo Alto. He also deplored an increase in lab tests among a New Mexico Medicaid population. (Address to Sun Valley Forum). (Setting the stage for enforcing the rationing of healthcare, particularly healthcare of the poor.)

• Medical journals started publishing items like these:

•  At Children's Hospital of Oklahoma, secret "quality-of-life" experiments on children born with spina bifida were conducted between 1977 and 1982. Twenty-five parents were advised by doctors not to have their babies treated; 24 of these babies died. 36 parents were advised by doctors to have their babies fully treated; all 36 lived. The decision to advise for or against treatment was based on a formula devised by the doctors, involving the baby’s functionality, the parent’s financial resources and education, and how little public resources would have to be used for treatment and rehabilitation. The US Supreme Court refused to hear a lawsuit filed by the parents of children who were allowed to die. (Progressive, 10-94)

• More recently, in 1995, the Pew Health Professions Commission at UCSF, one of the most influential medical think tanks in the US, issued a report advocating closing 60% of the beds in the nation, half the hospitals, and 20% of the medical schools in the nation. It predicted "surpluses" of 100,000 doctors and 200,000 nurses by the year 2000. (NY Times 11-17-95) The San Francisco-based Pew Commission includes former government officials, medical educators including University of California San Francisco (UCSF), public health professionals and insurance company executives. The commission is headed by Richard Lamm, former governor of Colorado, who became notorious for speeches in 1984 declaring that old people had the DUTY to die and free up scarce national resources. (SF Chronicle, 3-29-84, NY Times, 11-17-95, and SF Examiner, 11-17-95)

• So-called "non-profits" especially Kaiser, have been allowed to swallow up each other rapidly. In the third quarter of 1996, 95% of all acquired hospitals were non-profits, and 80% of the buyers were non-profits as well. From late 1996 to September 1997, Kaiser acquired or merged with: (1) Group Health Cooperative of Puget Sound (675,000 members), the largest membership-run non-profit HMO in the US, (2) Health Insurance Plan of Greater New York: (1,100,000 members) originally a state-run health plan for New York State employees, (3) Community Health Plan (350,000 members, and (4) Humana Group Health Plan (118,000 members) (CNA Kaiser Pamphlet, available on the CNA website)  In June, 1998, Kaiser announced an alliance with AvMed, Florida's largest non-profit, with 400,000 members.  (CNA communication)  What is important is not only the size and pace of the acquisitions, but also that they were non-profit, with a tradition of membership service and/or involvement. Kaiser wants a patient base more involved with its HMO, more likely to identify with it, and more willing to accept its cuts.

• Another Kaiser move toward becoming a government-mandated managed care provider is its initiative to subsidize health coverage for children from low-income families in California.  It doesn't begin to solve the problem, paying an average of only 50% of Kaiser's premium for only 50,000 children in California. (An estimated 1.8 million California children lack health insurance. The overwhelming majority are in working families whose employers either have plans the parents can't afford or do not have health coverage at all.)
 
But if Kaiser's children's healthcare initiative is only a token remedy, it is a significant foot in the door to becoming an official provider of health care. Kaiser is pushing legislation to increase coverage of children by Medi-Cal and simplify enrollment. It plans to work with schools to identify 630,000 children presently eligible for Medi-Cal, but not enrolled. It also plans to work with schools and the California Managed Risk Medical Insurance Board to identify uninsured children. It plans to form a coalition with other health care providers, insurance plans, and employers get them to make financial contributions. (Kaiser press release, 6-23-97 and SF Chronicle 6-24-97) Kaiser plans to have its initiative go nation-wide in 1999.
 
The Kaiser initiative is part of a network of public-private partnerships to provide children's health insurance coverage. The largest is the Caring Program for Children, which operates in twenty-six states and pools Blue Cross and Blue Shield administrative services and matching funds with private and philanthropic donations. The Colorado Child Health Plan receives funding through corporations, pharmaceutical companies, private donations, and Medicaid teaching funds to the University of Colorado Hospital. (National Governors' Association Fact Sheet, on world wide web)  These three-way partnerships between non-profit HMOs, state governments, and corporate donors are the mainstay of many state's plans for extending children's' healthcare.(Movement toward merging business and government.)  
• Kaiser's financing is largely governmental.  It currently has almost $1.5 billion outstanding debt to various state and municipal agencies, such as health facility finance authorites, community development authorites, state departments of budget and finance, etc.  The money from these bond issues is interest-free to Kaiser,  and the interest to the bondholders is paid from taxes. (PRNewswire, 6-24-98)  This includes a recent $400 million bond issue by the California Health Facilities Financing Authority, their largest ever to a health facility, a week after Kaiser forced a ten percent rate increase for California Public Employes Retirement System (CalPERS) members. (California State Controller's office press release, 6-25-98)
 
• These public/private partnerships are almost like a flip-flop optical illusion.  If you look at the partnerships one way it's privatization, because corporate donors finance children's healthcare, and "non-profit" HMOs co-administer it.          But if you look at the partnerships the other way, it's "socialization": because there is a federal initiative for children's healthcare, and state governments are co-administering it.  This simultaneous nationalization and turning national programs over to corporations is what the Nazis called national socialism, a term they devised in an attempt to get workers to support it.
 
• Robert Kuttner, of the Economic Policy Institute (EPI), attacked profit-making ventures in healthcare, and called Kaiser itself and Kaiser affiliates Group Health Cooperative of Puget Sound and HIP of New York, "the most consumer-oriented nonprofit plans," praising them for supporting mandated health consumer rights. Single-payer healthcare is one of EPI's programs. (http://epn.org/kuttner/bk971126.html)   The Economic Policy Institute is a Massachusetts think-tank behind the Richard-Gephardt-for-president campaign, and calls for a strategy of forming alliances with unions to regain the loyalty of workers. Gephardt: says "If you don’t temper capitalism, it’s a race to the bottom. Capitalism left alone will defeat itself…" (Boston Globe, 12-5-97). EPI's "anti-capitalist" funders are the Rockefeller Foundation, the C.S. Mott Foundation (General Motors money), and the Russell Sage Foundation (Cabot gas and banking money). Gephardt himself is a strong supporter of the "old money" strategy of getting money from international domination. He backed Clinton’s invasion of Haiti. In 1995, he voted to keep U.S. troops in South Korea and Japan. Last year, he voted for a $245 billion 1997 military budget—$10.6 billion more than Clinton had requested. (Challenge, 1-7-98, at http://www.plp.org) In addition, Gephardt is the leading member of Congress pushing for $18 billion for the International Monetary Fund (IMF) to bail out crashing economies in Asia. (NY Times, 4-5-98) Gephardt's ally Defense Secretary Cohen emphasized that American economic and security goals are interlocking, especially in countries like Thailand and South Korea: "We need to move on the IMF funds as quickly as possible." (NY Times, 3-19-98) (Merging of business and government, and a realization that free-market capitalism cannot be left to its own devices. Also, capitalists posing as anti-capitalists, trying to obliterate class-consciousness of workers.)
 
 
 
Return to "fascism".

 

 
Fascism is collaboration of unions and co-optation of opposition groups ...
 

The third hallmark of fascism, particularly in its early stages, are collaboration between unions and the dominant capitalists, co-optation of opposing groups, and manipulating things to confuse and obliterate class consciousness of workers.
 

• Kaiser and the AFL-CIO leadership have recently concluded a partnership agreement, which stipulates that AFL-CIO officials will participate in all levels of Kaiser's strategic decision-making, including hospital closings, hospital and clinic downsizing, restructuring the workforce, and policy questions on the quality of patient care. Kaiser agrees to co-operate with AFL-CIO (chiefly SEIU) in areas where its employees are already unionized, and to co-operate with AFL-CIO moves to unionize Kaiser employees in hospitals Kaiser plans to take over. AFL-CIO agrees to market Kaiser as a health plan to all union members nationally. As part of their marketing obligation, the signers accept a pledge not to engage in activities that might damage Kaiser's image or reputation. The agreement contains a "confidentiality" gag clause, requiring the unions to remain silent about information on Kaiser's plans obtained through Partnership activities. Unions will have to conceal adverse data about Kaiser's poor record on patient care and treatment of employees while promoting Kaiser as the union health care plan. (CNA letter to international union presidents) (Collaboration between unions and rulers, Also confusing and obliterating class consciousness of workers by getting them to identify with Kaiser as a "non-profit" so they will sacrifice their jobs and living standards .)

• At a time when San Francisco General Hospital was faced big cuts, SEIU brought the leadership of their Local 285 to San Francisco, to explain how Local 285 accepted the idea of the merger and the privatization of Boston City Hospital and supposedly made it work for them. The Boston local did a monumental job of mobilizing the people of Boston to vote for a Public Health Commission to direct the merged hospitals and insure that they fulfill their public health mission. Labor was guaranteed a seat on the seven-seat Commission. However the final contract that emerged called for cutting 1,200 workers (31% of the staff), and closing half the beds, and even this plan was dependent on attracting new business from community health centers and private insurers. (Boston Globe 6-30-96 and 4-21-96)
 
• To appreciate just how close SEIU's leadership is allied to old money and its global oil companies, consider a recent article on Nigeria from the SF Bay Guardian (7-8-98).

 
Nigeria's economy is based on oil; it is one of the richest deposits in the world, producing $12 billion/year, 40% of which goes to the US.  Five companies rule the roost: Shell (Dutch), AGIP (Italian), Elf-Aquitaine (French), and Mobil and Chevron (old-money US, aligned with Citibank and Bank of America.)  The country has been ruled by a succession of military dictatorships for 28 years, which gets half the oil profits in the guise of the state-run Nigerian National Petroleum Company.
 
In 1994 Nigeria's two oil workers unions led a strike trying to force the military to recognize an election the year before. The strike paralyzed the oil industry, and the leaders of the unions were arrested. There were worldwide protests, emphasizing the collaboration of the US with the military dictatorship.
 
At Mobil's May 98 annual meeting, the Oil, Chemical, and Atomic Workers union (OCAW) forced a resolution onto the floor demanding Mobile review its investments in Nigeria.  The resolution was quashed by institutional shareholders Franklin Research and Development, New York City Pension Fund, and SEIU.
 
• We can see the effect of the Kaiser-SEIU partnership agreement already:

 

Kaiser has already opened a hospital in the Los Angeles suburb of Baldwin Park where the entire theme of the hospital is physician-union co-operation. "Kaiser said the opening will involve an unusual degree of union-management cooperation. Nursing, technical, maintenance and other employees will be closely involved in the planning." (personal communication and LA Times, 2-6-98)

Northern California Kaiser is planning to open its long-vacant Roseville Hospital in Fall '98, with SEIU Local 250 and 535 participation in planning of staffing models, health care delivery and other aspects of hospital operation. (union-corporation collaboration)(from SEIU Local 250 press releases, 3-5-98 and 3-23-98) (Kaiser seems to have changed its mind and decided not to close all its hospitals.)

While acknowledging that, in practice, there often is little difference between not-for-profit and for-profit organizations and hospitals, Steffie Woolhandler, M.D., one of the physicians spearheading the group, said, "The problem is profit-driven health care." Woolhandler said non-profits are forced to compete with, and behave like, for-profit companies. (Ad Hoc Committee's state in JAMA, 12-3-97) (#3, co-optation of opposing groups and confusing the class consciousness of workers.)

Healthcare would exist to improve the quality of life, not make profits. This means we, the working class, would make healthcare decisions based on OUR needs. For example:
 

During the mid-60s striving for true communism in China, a local reporter looked for the captain of a Chinese ship docked in Canada. The captain was found setting tables in the dining room. The reporter asked the captain why he was setting tables. The captain said, yes, it is true he had navigational and nautical skills and was the leader while the ship was at sea, but those skills were no longer needed in port so he was just like everyone else.

"She is the lay-midwife in a village near Guadalajara Mexico. She told the Labor and Delivery nurses how she takes women into her house for three days, delivers their babies, feeds them, does their laundry, takes care of the baby, helps the mom with breast-feeding, collects baby clothes from neighbors if the mom has none, and often treats them with medicines she makes from barks and leaves, or if necessary transports them to the hospital, about ninety minutes away. Her small house has two beds; if more than one woman is in labor, she and her husband sleep on the floor. She has been doing this for about twenty years, having learned from giving birth to fourteen children herself, taking a month's formal training, and continued reading.