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The context for reform

Paragraphs 2-5


"Spiralling Technology Costs - An aging population"


Criticism Number 4

Samuel is pressing adoption of his model by creating a sense of urgency. We should not allow ourselves to be stampeded into irrevocable decisions. The arguments he uses to press for market principles are reasons for carefully choosing another road.

Spiralling Technology Costs and an Aging Population

The spectre of controlling the spiralling costs, increased need and dwindling resources Samuel describes by rationing emerges. I have no argument that this is what is happening but doubt that the problem is as acute as Samuel suggests. My argument is that the market has fuelled this cost spiral and has shown itself unable to control what is happening.

Corporate marketing creates much of the demand without attention to need. To compete each for profit group must duplicate costly equipment and services, or lose market share. Each markets the service to draw customers from competitors and in doing so generates a spiral of increasing demand. Each group maximises use to cover costs.

The marketplace is also quite the wrong place for decisions about the allocation of resources to be made. The track record of the market in rationing is terrifying (see Nursing Homes). The pressures away from care and compassion generated by the marketplace are unacceptable.

An integrated not for profit cooperating system would be much more effective in organising expensive services, rationalising the use of expensive equipment, and in rationing less essential services in an ethical and patient centred way. The marketplace rations less profitable services.

Rationing of Care

What Samuel describes is rationing by the government. I agree that the way it is rationing is not appropriate. This is the only way in which it can ration under the current system. More worrying is the concern that it is deliberately rationing care for ideological reasons at a time when we can afford to spend much more.

An integrated not for profit system built by and controlled by the community would be better able to address these issues without generating so much distrust and anger.

Some claim that the crisis generated by an aging population, which Samuel describes, is exaggerated but that is not the critical issue. The real argument is that this group of aging people are the most vulnerable of all groups in society, the least able to cope with the level playing field and the many stresses in a market system.

They have more than anyone else been the victims of neglect and misuse for profit in the US market system. The same stresses have now appeared in the newly competitive Australian aged care marketplace, and there has already been a public outcry.

While the stresses that Samuel describes are recognised, the market has by far the worst credentials for rationing. Government or not for profit systems both provide the care more cheaply. If care is to be rationed then the market is not the place for this.


Pressures on the share market should not be determinants of care. Decisions that affect the lives of millions of citizens should not be made in boardrooms where profits and not care are primary considerations.

The pressures on the health system, which Samuel describes and uses to urge the rapid adoption of his model, are arguments against a competitive market driven system.

CLICK HERE -- to proceed to the next criticism - Number 5

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

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This page created April 2000 by Michael Wynne