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Choice Meets: debating the trend toward corporate medicine

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Detractors call its visible manifestations "McMedicine" or "Doc-in-the-Box"; but proponents hail corporate medicine, especially the multihospital chains, as the triumph of free enterprise--saying that it's efficient, offers high quality, and maximizes the common good. At any rate, the growth of corporate medicine over the last decade has radically transformed American health care.

Since the mid-70s, and especially during the early 80s heyday of Reaganomics, the corporate health care industry has enjoyed explosive growth. Currently four companies--Hospital Corporation of America, American Medical International, Humana, and National Medical Enterprises--own or manage 12 percent of all U.S. hospitals. But the influence of the corporates extends far beyond the hospitals themselves. The corporates' financial strength, their access to capital markets, which allows them to engage in mammoth new construction projects and to acquire the latest in high-tech medical equipment, and their ability to attract the most desirable patients--affluent, relatively healthy, and inexpensive and profitable to treat--all contribute to their uniquely powerful position.

J. Warren Salmon, a professor at the University of Illinois at Chicago and head of its Health Policy and Planning program, has devoted much of his career to analyzing the historical development of the U.S. health care system. Currently he and his colleagues at the American Public Health Association are preparing for the APHA's 1987 annual meeting, to be held in New Orleans in October, titled "Health Care for People or for Profit?" As a preliminary to the New Orleans convention, Salmon, Jeff Todd (of the Illinois Public Health Association), and others have organized a two-day public hearing on the topic, to be held at Chicago's Bismarck Hotel, 171 West Randolph, on September 29 and 30. The debate should prove interesting, perhaps even explosive: corporate representatives, physicians, nurses, public health advocates who oppose for-profit health care in any form, and consumer representatives will present testimony to and field questions from a broad cross section of inquirers.

The fact is that many local hospitals have been forced to become more businesslike by competition from the corporates. Institutions with long and venerable histories of community service are crumbling under this pressure. In some major cities, entire areas have lost all or most of their health care, leaving only aging and overburdened public institutions, such as Chicago's Cook County Hospital, to carry the entire weight of care for the poor.

The problem extends even beyond the threat of hospital closure and withdrawal of services from certain communities. Economic pressure has forced many hospitals to "dump" uninsured or insufficiently insured patients. Thus in recent years many not-for-profit hospitals and even locally owned proprietary institutions have found themselves in roughly the same position as a third-world country struggling to survive alongside a superpower that extracts its most valuable resources as it admonishes the poorer country to tighten its belt and become more efficient.

Still, Salmon points out that big-money corporate involvement in health care is nothing new. Early medical research and development were largely underwritten by philanthropic foundations like Carnegie and Rockefeller; and Carnegie sponsored the famous Flexner Report of 1910, which criticized the free-for-all American medical education and was largely responsible for consolidating the system into a handful of corporate-endowed medical schools. Salmon and other writers, such as Howard Waitzkin (The Second Sickness) and E. Richard Brown (Rockefeller Medicine Men), have documented how the American corporate sector has dominated medical research and care and has fostered the kind of high-technology, intervention-oriented approach that would most benefit the support industries that have sprung up around the health care industry in the 20th century.

Salmon and many others believe that recent developments have exacerbated an inherent class bias in medical education and medical care, with the result that entire populations run the risk of being disenfranchised altogether. As technology-intensive, intervention-oriented medical care has gained primacy, other models of care have fallen by the wayside. Many of these were more oriented toward community health (such as sanitation, milk pasteurization, and so on) or were practiced by women and other community-based healers (midwifery).

The Nixon administration, as part of its Health Maintenance Organization (HMO) strategy, offered incentives to corporate investors, who found that health care can be quite profitable. And firms paying for employee health insurance were eager to make the provision of health care more efficient and therefore less expensive. Today, the link between Big Medicine and Big Business is so strong that one writer, Arnold Relman, editor of the New England Journal of Medicine, has called it a "New Medical-Industrial Complex."

Spokespersons for the hospital chains, of course, argue that for-profit health care is better health care. Some interesting differences crop up, however, among the various corporate perspectives. Humana's David Jones claims enthusiastically that corporate health care is so efficient and so economical that the indigent will be cared for willingly by the thriving corporate sector. John C. Bedrosian of National Medical Enterprises, on the other hand, is much more cautious. He advocates an increased public-sector role in care for the poor, suggesting that since free care and profit are incompatible, the public sector will have to step in.

Meanwhile, physicians, nurses, and other health professionals fear that their autonomy in making crucial health care decisions will be eroded if they must answer to the business interests of remotely located corporate presidents and board members. This loss of professional autonomy, sometimes known as "proletarianization," is one of the most vexing issues for health professionals in the entire corporatization debate; articles with titles along the lines of "Cost Control Killed My Patient!" are showing up with increasing frequency in both trade magazines and scholarly journals.

The public hearing will provide a forum for these crucial issues. Scheduled to speak are Senator Paul Simon (on September 29 at an 11:30 AM luncheon), Mayor Washington, Ruth Roemer (president of the APHA, who will address the symposium via a telecommunications linkup between Chicago and UCLA), and New England Journal of Medicine's Arnold Relman (also by phone hookup). Salmon will deliver an address, as will Victor Sidel, president of Physicians for Social Responsibility. There is no registration fee, but a $16.00 meal ticket will be required for Senator Simon's luncheon address. For further details, call 996-2160.

Art accompanying story in printed newspaper (not available in this archive): photo/Bruce Powell.

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