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Two Models of Health Care Rationing

Sick and Sicker

by Dr. SUSAN ROSENTHAL, M.D.

Everyone knows that Canadians live longer and have lower infant mortality rates than Americans. In Sicko, Michael Moore suggests that a Canadian-style medical system would solve this problem. Surprisingly, the evidence indicates that it would not.

A cross-border team of 17 researchers (including high-profile supporters of the Canadian system) examined a variety of medical problems, including cancer, coronary artery disease, chronic illness and surgical procedures. With the single exception of end-stage kidney disease, where Canadian patients fared better, they found no consistent difference in patient outcomes between the two nations.1 As I have argued elsewhere, the United States has the worst health statistics in the industrialized world because it is the most unequal society in the industrialized world.2

Although Canada’s medical system does not produce generally better patient outcomes, it is more equitable and far more economical. In 2003, the average American spent almost twice as much for medical care as the average Canadian. Exorbitant medical bills are a constant worry and a major cause of personal bankruptcy. Profit-taking is responsible for the high cost of American medicine. However, the Canadian system is also subject to market forces.

Contrary to popular belief, Canada does not have a single-payer medical system. Government pays about 70 percent of medical costs, including most hospital and physician care. Individuals and private insurance companies pay the remaining 30 percent for prescription drugs, dental and vision care, ambulance, medical devices, home care and other services.

To contain costs, both the United States and Canada ration medical care, but they do this in different ways. In the U.S., more than 47 million people have no medical insurance at all. The Institute of Medicine estimates that 18,000 people die every year as a result. In Canada, lack of access is more equitably spread across the population in the form of long waits for assessment and treatment. We don’t know how many Canadians die while waiting for treatment, because no one is counting the bodies.3 The Canadian model of rationing is sick, and the American model is sicker because it unfairly discriminates against those who cannot pay. Neither is good enough. Medical care is a human right and should not be rationed at all.

Disgust with the American medical system has built support for HR 676–The United States National Health Insurance Act–a single-payer system where medical care would be publicly financed and privately delivered. Winning HR 676 would be a tremendous victory. However, the Canadian experience shows that private delivery of medical care opens the door to parasitical profit-taking.


The Canadian experience

Until the 1960’s the American and Canadian medical systems were nearly identical. Those with the highest incomes obtained the lion’s share of medical services even though those with the lowest incomes experienced the most illness. The logical solution was a government-run system to provide medical care for all, but doctors and private insurers rejected what they called "state medicine and socialism."

During the upturn of the 1960s, the pressure grew for universal health care. To contain demand, the federal government launched a Royal Commission to "study" the problem. The Canadian Labour Congress (CLC) made its preference clear.

"We favor a system of public health care that will be universal in application and comprehensive in coverage. We favor a system that will present no economic barrier between the service and those who need it. We are opposed to any provision which will require some people to submit themselves to a means test in order to obtain service. We look to a system of health care that will be regarded as a public service and not as an insurance mechanism."4

The public-service model, where government is both payer and provider, was rejected. Instead, the Medical Care Insurance Act of 1966 established a publicly-financed system that would be administered and delivered by the private sector, "free of government control or domination."

The province of Quebec took a different route. Pressured by workers’ demands that culminated in the 1972 General Strike, Quebec incorporated medical services into a broad social benefits system, paid for and provided by the provincial government. The Quebec working class is rarely credited for producing the most comprehensive medical system in North America.


The assault on Canadian medicare

The ink was barely dry on the Medical Care Insurance Act before the federal government began cutting funds for health and social services. The 1974 recession and the recessions of the early 1980s and the early 1990s were followed by deeper cuts. As the cost of medicare was downloaded from the federal government to the provinces, the principle of equal access was eroded.

Private corporations rushed into the breach created by under-funding. The more medical services were removed from the public realm, the more individuals had to pay out of pocket, purchase insurance to cover the gap or go without.

To reassure nervous Canadians that medicare was safe, the Canada Health Act of 1984 guaranteed universal and equal access to medical services, but provided no funds to make this possible. Behind the scenes, government was committed to "growing" the private medical industry.

In 1994, the Ontario government concluded, "To have the effective launching pad it needs, the health industries sector must expand its share of its own home market. Steps must be taken to ensure that, as in other countries, the domestic market supports the development of globally competitive companies." One of these steps was to eliminate regulations mandating a minimum level of daily care for Ontario nursing-home residents.

In 1997, the federal government declared "Promoting Canadian companies as global health-keepers is the main objective driving the strategies and plans of the government for the medical devices, pharmaceutical and health-services sector."5 And in 2004, Canada’s Supreme Court ruled that, "The Canada Health Act [does] not promise that any Canadian will receive funding for all medically required treatment."

Behind the mask of "health-care reform" and "restructuring," the Canadian medical system has been handed, piece-by-piece, to private industry in a manner similar to the dismantling of Britain’s National Health Service6 –publicly-provided health care is under-funded to the point of crisis, then denigrated for its inadequacies. The private sector is proclaimed the only possible savior, and opponents are ridiculed as old-fashioned and sentimental. When the market fails to deliver, we are told we must adapt to "the new reality." The strongest opposition to this process has come from organized health-care workers.

Canadian hospitals, which by law must be non-profit institutions, became a battleground as unionized workers resisted wage cuts and contracting-out of housekeeping, information systems, food preparation, laboratory and other services to private, non-union companies. In 1981, Ontario hospital workers launched a province-wide strike, defying back-to-work legislation and the jailing of union leaders. Unwilling to broaden its challenge to neoliberal social policy, the union caved and the strike was defeated. Most small, local hospitals were closed. Those that remained open were merged into giant conglomerates managed by business consultants.

Privatization has decimated services. Families stagger under the burden of sick, injured and frail relatives who were previously cared for in hospital, rehabilitation and chronic-care facilities. In-home nursing care is scarce or pricey.

Tens of thousands of hospital nursing jobs have been eliminated at the same time that average hospital stays have been cut, so that fewer nurses care for much sicker patients. Hospital food lacks nutrition and infectious diseases plague hospitals that are no longer clean.7

As hospital out-patient clinics closed, patients were sent to family doctors (GPs) for follow-up. The downloading of medical services has created a crisis at the primary-care level. By 1998, 62 percent of Canadian physicians reported that their workload was too heavy, and more than half said that their family and personal life were suffering. By 2000, only 39 percent of Ontario GPs were accepting new patients. By 2006, fewer than 10 percent were accepting new patients. People typically wait months to see a specialist and more months for treatment. Patients grow sicker and die while they wait.

Quebec’s model health-care system has been damaged severely by funding cuts. In 2005, Canada’s Supreme Court ruled that lack of timely access to treatment in Quebec was serious enough that the province could no longer prohibit private funding for medically necessary services. Similar legal challenges are expected in the other provinces.

Unless the public system is resuscitated with a major transfusion of funds, it’s only a matter of time before private hospitals begin servicing those who can pay to go to the front of the line. Ironically, while Americans long for a Canadian-style medical system, that system is disintegrating under the pressure of market forces.


Why ration medicine?

The capitalist class will pay anything to defend and extend its power. No ceiling has been set on spending to win the war for Middle-East oil. In contrast, there is fierce resistance to funding any services for workers beyond the minimum required to keep them productive. As the competition for capital increases, most governments are reducing their investment in health, education and social services –robbing the public sector to boost the profitability of the private sector. No nation and no medical system are immune to the relentless drive for profit.

The American medical system will be reformed. Ordinary people want medical services. Business complains that the cost of medical benefits is hurting their profits and global competitiveness; they want to transfer these costs to the public sector. Because Americans pay almost 90 percent more per-capita on medical care than Canadians do, rationalizing the medical system would offer fantastic cost savings. The real question is how it will be reformed.

The key demand is for affordable medical care. With almost 60 percent of the American workforce making less than $15 an hour, affordable care would have to be free. That shouldn’t be a problem. A nation that can find the money to pay for war can find the money to pay for universal health care –in theory.

In practice, capitalism prioritizes cost-efficiency over human need by "industrializing" social services. The work of medicine is dissected into components that are individually priced and parceled out. The profitable parts are handed to the private sector and the unprofitable portions remain in the public realm or are abandoned altogether. While applying industrial methods to medicine is cost-effective from a business point of view, it fragments health care. Planning health services to meet population needs and integrating prevention and treatment, hospital and community care become impossible.

Winning HR 676 would be a definite step in the right direction. However, we need to go further. Eliminating profit from the medical system requires public financing and public delivery of services (socialized medicine). More than that, all health and social services must be provided as a human right –fully funded, fully integrated and with no rationing. If capitalism cannot meet these basic needs, then we need to construct a socialist society that can.

Dr. Susan Rosenthal has been practicing medicine for more than 30 years and has written many articles on the relationship between health and human relationships. She is also the author of Striking Flint: Genora (Johnson) Dollinger Remembers the 1936-1937 General Motors Sit-Down Strike (1996) and Market Madness and Mental Illness: The Crisis in Mental Health Care (1999) and Power and Powerlessness. She is a member of the National Writers Union, UAW Local 1981. She can be reached through her website: www.powerandpowerlessness.typepad.com