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The role of competition in health care

Criticism Number 17

Answering some common criticisms 2

2. Accountability related concerns

Loss of control

Government control: - It is wishful thinking that government can or will even be willing to maintain control over large corporate groups. In the USA many now believe that it is politicians who are the major obstructions to the "reforms" which the community is demanding. This is because of the close financial relationships and friendships which exist.

Example:- Elkins the founder of Integrated Health Systems was renowned for his political donations and his relationship with the US president.

The Australian government has displayed little interest in exerting any control. It has ignored its own regulations and fallen over backwards to assist unsavoury groups including Tenet/NME and Mayne Nickless.

Contracts in Australia: - Samuel admits that government's attempts at enforcing contracts have been less than successful. In fact ministers have actively frustrated the intention of their staff to enforce the contracts. When a staff member attempted to enforce a clause requiring a multimillion dollar revegetation in Queensland the staff member was marginalised and the minister assured the mining company that the clause would not be enforced. Instead the minister enticed this defaulter into opening another mine and boasted of the jobs created.

Contracts in health care: - Samuel then goes on to argue that contracts will work in health care. The existing health care contracts with hospital providers have already been a lightning rod for criticism. Attorney generals have condemned them.

Managed care contracts have alienated the medical profession in the USA. The public are up in arms and attorney generals across the country have taken to the courts in a costly attempt to force giant corporations to honour their commitments. Large class actions have been commenced against HMO's alleging that they denied citizens the care which they had contracted to provide.

Citizens have taken to the courts individually and in qui tam actions alleging that aged care corporations have breached their medicare contracts by not providing the care they had contracted to provide.

Common sense: - When one examines the starting points, the forces at work and the context within which health care contracts are made and regulated it is painfully obvious that they will be dogged with serious problems. We are seeing only the tip of an iceberg.

CLICK HERE -- to look at why regulation fails in health care

CLICK HERE -- for a detailed description of the way regulation of health care has failed in Australia.

CLICK HERE -- for an examination of the way government has failed to control health care corporations in the USA and the reasons why it is most unlikely to do so in Australia.

Overseas Ownership

Samuel does not see any adverse outcomes in foreign ownership. One can only wonder at his knowledge base. Ron Williams who wrote his thesis on the US health system indicated that the consequences for Australia would be "a huge and depressing departure" from what we expect. This man with his profound understanding wrote

".. compassion will give way ..... to profit" --- a "deceptively human face" --- "primary concern will be measured in terms of the profits derived from its exploitation of the local population"

His comments about control are chilling

"... might of the megacorps is formidable; they are practised in the use of politics, and power and wealth, in getting their own way" ----- ".... will not pay over their capital unless they can run their businesses along the free enterprise lines that they think fit."

Williams wrote all this in 1992, before the disturbing conduct of these megacorps became public. The validity of his concerns are reflected in a never ending series of health care scandals across the USA.

How odd that after my visit to the USA, vast numbers of articles, and 10 years of study this is still exactly my view. Ideology of course has its own way of addressing informed opinion, particularly when the messenger can be labelled as an "academic" and so irrelevant.

Samuel is inviting multinationals who will be mainly US corporate owned into Australia. He fails to examine what happened in that country and claims it is not relevant to Australia!

Samuel is an economist. He confronts some financial criticisms and completely ignores "standard of care" problems. He ignores the strong evidence of unsavoury corporate conduct and that care has been compromised by these same corporations which he is so willing to see in Australia.

I have already dealt at length with the problem of control, and the failure of regulation in the USA and Australia.

The simple response to Samuel's claim about no loss of control with multinationals is that it is citizens and not government which exert some very limited control over health care corporations. They do so through the political process and by pressure on the share market. Citizens in one country are unable to influence the conduct of a foreign multinational in this way.

CLICK HERE -- to explore some of the issues surrounding multinationals in Australia.

CLICK HERE -- to proceed to the next criticism - Number 18

CLICK HERE -- to go to the next section of Samuel's speech

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This page created October 2000 by Michael Wynne