Health in Neoliberalism

HEALTH IN NEOLIBERALISM

By Prokla editors

[This article originally published in: Prokla, 10/09/2003 is translated from the German on the World Wide Web, http://www.linksnet.de/artikel.php?id=999.]



According to data of the World Health Organization, a child born in Zambia in 2001 has a life expectancy of 36.8 years while a child born in Germany will live to 78.2 years (WHO 2002). The life chances for the poor and rich are not only very different on the global standard. In Germany, men and women in the lowest quarter of income distribution – independent of other factors influencing mortality – have a 4 to 6 year shorter life expectancy than persons in the highest income quarter. Thus the poor must die earlier in Germany. That men in Germany on average die six years earlier than women may not be a biological constant but the price paid for their position in the gender-specific division of labor and their greater participation in gainful employment.

These social discrepancies are not emphasized when the “need for health reform” is discussed in the mainstream. The problem is the “cost explosion” in the public health system and increased “non-wage labor costs” necessitating cuts in legal health insurance. The fairy-tale of the cost explosion can be quickly refuted. The share of health spending in the gross domestic product rose merely from 10.1% to 10.9% in Germany according to the German Statistical Office from 1992 to 2001. This slight increase in harmony with economic growth corresponds to the general tendency to spend more for health care with growing affluence. A cost explosion or excessive increased expenditures has not occurred in legal health insurance. If there is a financial problem in legal health insurance, it is the problem of inadequate revenues.

To explain the discrepancy between revenues and expenditures, politicians and the media like to refer to the “demographic problem” as in the pension discussions. A decreasing number of younger persons able to work face a growing number of older persons who cause the bulk of health care costs. The relation of younger and older, of employable and non-employable says little. The relation of employed persons and unemployed persons is more relevant or more exactly the relation of wage-earning employees and the rest of the population determined by the age structure of the population and labor market development.

In a word, mass unemployment is the central cause for the rising health premiums in legal health insurance and for the relative increase of so-called non-wage labor costs. However unemployment is thematicized in an inverted way in the neoliberal mainstream of politics. Unemployment is not regarded as a cause but as a consequence of increased non-wage labor costs. This way of looking at things based on neo-classical economic theory has often been rightly criticized and can be considered scientifically refuted. Nevertheless this hardly reduces its political-ideological functionality for ruling interests.

The pressure of the “reserve industrial army” (Marx) is also a reason for the shift of the relative strength between wage-earners and capital owners expressed in stagnating real wages and in a sharp decline of the wage rate. The wage rate (share of wages in the gross domestic product) adjusted for changes of employment fell in Germany from over 75% in 1974 to less than 67% in 2002. Since wages are essential standards for measuring health premiums in legal health insurance, the increase can be explained from wages falling behind productivity development. Rising health premiums would not be a problem for wage-earners with correspondingly higher gross pay. In addition, there is a decline of jobs subject to insurance on account of the increasing informalization of work (increase of pseudo-independents, “marginally” employed persons, illicit work etc.) that – alongside mass unemployment – explains the decline of the number of payees. The shift in the relation of employed persons and unemployed persons, payees and benefit recipients is not a problem in itself but first becomes a problem through distribution conditions.

Mass unemployment is the capitalist result of growing work productivity. With increasing work productivity, the social wealth available for redistribution rises. If work productivity doubles within a certain period of time, twice as many seniors or sick persons could be supported without reducing the living standard of employed persons. That these simple connections are largely faded out in the narrow-minded public discussion can be explained by the hegemonial interest in concentrating the growing social wealth in the hands of a few wealthy persons instead of using them to satisfy the needs of the lower classes. This interest is justified by the “practical necessities” of capitalist competition. A deficient international competitiveness of German capital does not exist as the international comparison of piece-labor costs and the constantly growing export surpluses demonstrate.

The health reform includes lowering non-wage labor costs and promoting the “future market” of health care where politicians see enormous growth potentials. Both goals seem contradictory on first view. While lowering non-wage labor costs requires “cost reductions” in the public health system, the consumption of health goods and services grows enormously. This contradiction should now be resolved by privatizing risks. The goal of employers’ associations is to fix the employers’ share of contributions to legal health insurance at a maximum 6%. To reach this, the benefit catalogue of legal health insurance should be reduced to elementary care. This insurance should be supplemented through additional private insurances. Thus the consumption of health goods and services can grow infinitely without affecting employers in the form of rising non-wage labor costs. Those who speculate on positive aggregate economic effects of a growing health care market ignore that health spending is increasingly borne by wage-earners. Removing dentures and sickness benefits from the benefit catalogue of legal health insurance means additional burdens for the insured estimated at average additional expenses of 800 euro a year (FAZ 7/13/2003). Consumer demand altogether will be lowered without a corresponding increase of wages countering employers’ relief from non-wage labor costs.

Many precarious employed persons and receivers of low incomes cannot afford greater risk insurance. “Cost reduction” in legal health insurance now leads to an implicit rationing of health services and exclusion of poorer households. The practices in hospitals and medical services tend to a two-class society for the legally insured and privately insured whose care will be increasingly different in the future. The negative effect of redistribution from wage-earners to owners of capital, from poorer to wealthier households is more striking in health reform than pension reform since pension insurance is marked by the coupling of paid income and payment through the equivalence principle of individual insurance while the solidarian principle of collective risk insurance is asserted more strongly in legal health insurance.

With the replacement of the principle of solidarian sharing of risk by the principle of “personal responsibility”, a fundamental transformation of everyday morality occurs whose social effects are unforeseeable. There are certainly alternative concepts for an authentic health care reform. The traps of certain reform concepts should be identified since their intentions can be quickly inverted into their opposites under the dominant conditions of power. This is true for example for the concept of universal citizen insurance. To set the legal health insurance on a new financial foundation, the inclusion of receivers of rental- and interest-income seems as plausible as canceling the limits of obligatory insurance for receivers of wage incomes. Where universal national insurances or tax-financed state security systems exist, they often do not cover needs but aim at combinations with private insurances. Receivers of high incomes do not depend on these systems and can assert their interest in minimizing the benefit level even under the conditions of universal forms of financing. Thus the concrete organization of reform models is decisive.

Alternatives are not lacking but rather the power to realize them. The neoliberal hegemony extends to unions spokespersons of wage earners along with the SPD and the Greens that have abandoned the interests of wage earners and social movements. In the field of health policy union representatives orient themselves in lowering costs and premium stability and defend the profit margins of the pharmaceutical industry. The half-hearted mobilization and the defeat in the struggle against Agenda 2010 are not surprising given the desolate state of the unions largely caught in competitive corporatism. An organization like Attac that has critically discussed health policy in the last months cannot accomplish anything alone. Critics of neoliberal policy can only orient themselves in Antonio Gramsci’s motto: pessimism of the mind and optimism of the will!

Health policy will remain a central field of social conflict in the long term. Therefore, a closer analysis of the terrain is necessary… Certain elites within health care neglected in the past discussion become bearers of neoliberal policy. Up to now social policy was secondary n the plane of the European Union. From a neoliberal perspective, European integration was limited to the establishment of a common market structure and the currency union. Enforcement of a higher social standard was blocked. Social policy should remain a national affair in the scope of the subsidiarity principle… The interest of the insured would coincide with the general capital interest where rationalization of the drug supply and health services are possible without lowering the service level and service quality. This runs counter to the interests of physicians’ associations, the pharmaceutical industry and the industry of medical technology. The appropriation- and valorization processes of these sectors are based on corruption…

The question what kind of medicine is desirable is often repressed alongside the financing questions that dominate in the present discussion of health policy. The development of medicine is stylized as a natural process that cannot be controlled socially and politically. However this development like our understanding of health and sickness is influenced considerably by political-economic powers.

The unsuccessful strike for the 35-hour week could represent a turning point in the development of industrial relations in Germany. The long-term effects of this strike are unforeseeable.