By Jan Phillips
COVID-19 illustrates the vast deficits in our current ill-equipped healthcare system. Why wasn’t our healthcare system prepared for something like this? An argument could be made that it’s because too much of the system is profit-driven.
Hospitals are businesses and their financial success hinges on generating revenue that meets or exceeds costs and expenses. High margin procedures that contribute greatly to the bottom line include elective surgeries like knee and hip replacements and plastic surgery.
Because of the demands of the COVID-19, hospitals are cancelling elective, non-essential procedures and the result is a significant drop in revenues. A Michigan eight-hospital system recently reported that it expects to take a $1 to $2 billion hit to its normal annual revenue of $8 billion.
America’s disinvestment and privatization of hospitals since the Reagan era in the 1980s, has left us horribly unprepared for this public health disaster. Looking at hospitals 40 years ago, before health care was dominated by the “business” of health care, is enlightening.
In 1960, The U.S had over 9 hospital beds per 1000 people. Between 1981-1999, the number of in-patient hospital beds declined by an extraordinary 39%. The purpose was to raise profits by increasing the number of occupied beds. Management’s goal of 90 percent occupancy meant that hospitals no longer had the capacity to absorb patient influx during epidemics and medical emergencies.
The number of hospital beds have continued to be decimated and by 2017 we had less than 3 hospital beds per 1000 people.
A comparison with other countries that have universal healthcare shows an improved preparedness. For example, Japan has over 13 beds per 1000 people and Germany has 8 beds per 1000 people. Interestingly, the number of deaths in Germany are relatively low, epidemiologists suggest that the chief reasons were early and widespread testing and treatment, plenty of intensive care beds and a trusted government whose organized social distancing protocols are widely observed.
Because our hospitals have cut their reserves so drastically, they now have to depend on the Federal government’s national stockpile. It contains extra things we might need in an emergency like: medications, PPEs and ventilators. Except, someone forgot to stock it with ventilators.
In 2012, the Federal government contracted with a small medical device company to build a low cost ventilator prototype to build up the Federal stockpile. The company was later bought out by a large corporation who decided that manufacturing these devices were not profitable enough so scrapped the project. The name of the bigger company is ironically “Covidien”. They cancelled the project and no one in government picked up the ball; this omission is another fatal flaw of an excessively profit-driven system.
Our lack of preparedness has resulted in a slower and uncoordinated ability to take care of Americans during a pandemic. Healthcare workers are overwhelmed and worsened by the lack of resources.
Capitalism may do a better job of managing certain areas of our lives, but, we are watching how such loosely regulated capitalism has decimated our ability to manage the stresses of a pandemic.
COVID-19 puts more pressure on these fault points, especially insurers. Patients couldn’t get out of the hospital because they were waiting for authorizations from health insurers. People went to the hospital to get tested but had to wait for authorizations from their insurance companies. The hundreds of different insurance policies with different rules compound inefficiencies. Nothing is uniformly stated because these are all separate, private companies making their own decisions.
During this pandemic, insurance companies are still asking whether the treatment you’re receiving is medically necessary? They are still questioning the exhausted medical providers. The focus isn’t on getting better, but on “what’s covered and will be paid for.”
To stem this pandemic and minimize harm from the next one, we need a dramatic overhaul of our healthcare system. Crises like this are a time for compassionate action, as well as change. We need national standards for hospital and provider procedures/charges and the ability for government to negotiate drug prices. Capitalism that is “highly regulated” has allowed other countries with universal healthcare the sustenance to traverse this pandemic.
As the pandemic rescue packages have made starkly clear, we have more than enough financial resources to create these vital changes. Once this crisis is over, it would be a mistake to go back to the way things were before; we need to demand better. Let’s lay the groundwork to be better prepared in the future, including a competent government who is capable of planning for an uncertain future.
Jan Phillips has been a health educator for over 40 years. She’s currently a member of Indivisible’s Healthcare and Senior issues committee and is dedicated to informing the public about the truths regarding health care and how we can improve it.