5.2.1 The EU
220.127.116.11 General Characteristics of the European Healthcare Sector in 2018
Notwithstanding the previously cited remark by Assa and Calderon (cf. Sect. 18.104.22.168.), thanks to a relatively recent report by the OECD and the EU Commission working together, a fairly good picture of the state of affairs in European healthcare in 2018 is available.Footnote 70
This 2018 special report entitled “Health at a Glance: Europe 2018”, provides an in-depth, comparative analysis of the health status of EU citizens and the performance of the health systems of the 28 EU Member States, 5 candidate countries and 3 EFTA countries. The authors themselves considered the report a first, important step in the “State of Health in the EU cycle of knowledge brokering”.Footnote 71
The report is in two parts: Part I consists of two thematic chapters, the first of which is devoted to the need for joint efforts to promote better mental health, and the second—which can hardly be surprising, given the EU neoliberal health policy’s emphasis on “austerity”—on “outlining possible strategies for reducing wasteful health expenditure”. Part II of the report covers what the EU Commission considers to be the “most recent trends in key indicators of health status, risk factors and health spending”, together with a discussion of progress in “improving the effectiveness, accessibility and resilience of European health systems”.Footnote 72
The EU’s emphasis on austerity measures is already evident from the first pages of the 2018 report.
In the following overview, we shall refer to and discuss a number of elements of this 2018 report that are relevant in light of the aims of this book. This does not preclude the whole of the report from being commendable literature, not only because of the richness and detail of the data provided, but also because it exposes how proud the supra-national, neoliberal institutions behind this report (in particular, the OECD and the EU Commission) are of their many neoliberal austerity achievements of the past decades. Indeed, the common thread that appears throughout the 2018 report concerns the extent to which the healthcare sector has, in the recent past, been the object of increasingly stringent austerity measures.
Even the modern-day models of “inclusive healthcare”—basically aimed at keeping (poor) people out of healthcare facilities as much as possible, to the extent that medical treatment in such facilities is simply too expensive, and neoliberal authorities prefer especially poor people to be sick at home and be cared for (or not) by relatives or by the local neighbourhood, so no expensive treatments are wasted on them—are dealt with in a detailed manner in the 2018 report (on the theoretical arguments for this so-called intrusive healthcare model; cf. Sect. 22.214.171.124.).
It is also remarkable that, notwithstanding the very high degree of thoroughness of the 2018 report which aimed to provide a detailed overview of the overall state of affairs of health policy in Europe, not a single word is said about the subject “prevention or preparation for an epidemic or pandemic”. Indeed, despite prominent, international businessmen (such as Bill Gates) had been calling for years on the governments of (Western) countries to start preparing for the possibility of outbreaks of epidemics or pandemics,Footnote 73 it does not appear from the 2018 OECD/EU report that this was a theme that had already captivated the interest of the EU leadership. In view of neoliberalism’s aversion to any form of planning (the so-called “laissez-faire, laissez-passer” principle; cf. Sect. 2.2.4.), this is hardly surprising at all.
The list of special “risks factors” to which special attention was paid in the 2018 report speaks volumes:Footnote 74
Smoking among children.
Smoking among adults.
Alcohol consumption among children.
Alcohol consumption among adults.
Illicit drug consumption among children.
Illicit drug consumption among adults.
Obesity among children.
Obesity among adults.
Mortality due to air pollution and extreme weather conditions.
For wealthy Europe, which prides itself on being one of the strongest economies on the planet, characterized by a perceived deep—albeit untruthful—concern for the interests of its citizens, it is significant that the specific “risk factors” of public health which were deemed of importance in 2018, all encompass luxury problems—such as drugs, alcohol, obesity and pollution—caused by what Galbraith,Footnote 75 in the past, has described as “the affluent societies”, i.e. societies that are completely subject to the capitalist working methods and in which the generic population but serves to support the capitalistic “production-for-production’s sake-machinery” (and, therefore, the “consumption-for-the-sake-of-consumption” model),Footnote 76 where the view on man is that of what Herbert Marcuse has, in the past, described as the “one-dimensional man”, a “being” which only serves the interests of an economic model, without any aptitude and ability for critical thought and oppositional behaviour whatsoever.Footnote 77
Such a “one-dimensional human being” still only exists in a socioeconomic dimension, thereby primarily fulfilling the following societal functions:Footnote 78
The function of “working” from morning till evening, with little time for anything other than working, until as old an age as possible.
The function of working for one central external purpose, namely for making the shareholders of the entrepreneurial sector as rich as possible.
The function of “consuming” as much as possible, as all one’s income should be spent on paying for the goods and services provided by the capitalist “production for production’s sake” economic model, notwithstanding the fact that many such goods and services are intrinsically useless and, often, harmful to both humanity and the environment.
The function of “credit taker”, which helps to ensure that: (1) people consume more than their income allows for; (2) the prison of one’s “duty to perform labour” is ever-more fortified (as credit taken has to be paid back); and (3) that one’s income is certainly not spent on anything else than expenses that make the rich of the planet ever richer.
The function of eternal “taxpayer”, as states obtain their income mainly by taxing the working classes.
The function of being employed by a repressive (capitalist) state, i.e., of being part of a bureaucracy that helps perpetuate such a (capitalist) socioeconomic order.
The function of being (medically or otherwise) cared (and generally looked out) for, obviously, does not appear on this list, as under the logic of neoliberalism every individuals are themselves responsible for their healthcare and that, at best, society could start organizing intrusive care systems.Footnote 79 (Compare Sect. 2.1, where it has been described in some more detail how this ideological approach has gradually conquered Western health policy as of the 1960s.)
Suffice here further by referring to the following quote of the work “One-Dimensional Man: Studies in the Ideology of Advanced Industrial Society” of Herbert Marcuse, bearing in mind that this was written already in 1964:Footnote 80
The productive apparatus and the goods and services which it produces “sell” or impose the social system as a whole. The means of mass transportation and communication, the commodities of lodging, food, and clothing, the irresistible output of the entertainment and information industry carry with them prescribed attitudes and habits, certain intellectual and emotional reactions which bind the consumers more or less pleasantly to the producers and, through the latter, to the whole. The products indoctrinate and manipulate; they promote a false consciousness which is immune against its falsehood. And as these beneficial products become available to more individuals in more social classes, the indoctrination they carry ceases to be publicity; it becomes a way of life. It is a good way of life – much better than before – and as a good way of life, it militates against qualitative change. Thus emerges a pattern of one-dimensional thought and behavior in which ideas, aspirations, and objectives that, by their content, transcend the established universe of discourse and action are either repelled or reduced to terms of this universe. They are redefined by the rationality of the given system and of its quantitative extension.
The above-mentioned “elements” or “health risks” of concern that drew the attention from the 2018 OECD/EC report’s authors are almost all generated by capitalism itself, and in particular by excessive consumption of things that, in a more normal world, would most likely not even be produced or traded to begin with (e.g., cigarettes, alcohol and industrially prepared food). Many of these products are, moreover, so-called “created wants”, consumed simply as a form of escapism, to cope with unhappiness. Not only does ruthless capitalism ensure that these products are massively produced and traded, but the system is also very aware that these products lie at the root of numerous diseases and broader societal ills.
In light of the content of the 2018 OECD/EC report and the consequences of neoliberal health policy it reveals (in particular, decades of sustained austerity, in addition to an emphasis on the development of “inclusive models of healthcare”, basically a polite way to say that those who are poor and sick, have to take care of their own), it is hardly surprising that when, at the end of January 2020, Covid-19 reached the European continent, no policy level or healthcare institutions were actually prepared for this: Not the EU (through the EU Commission, or one of the many European institutions, albeit all manned with an army of well-paid civil servants), not the national governments of the EU member states (nor those of the United Kingdom that had recently departed from the EU itself; cf. the so-called “Brexit”), not the numerous regional, local or community administrations to which neoliberal central authorities had “detached” many specific tasks of healthcare over the years, and not even the hospitals and nursing institutions themselves, to the extent that these had, in many countries, suffered way too much for many years under a sustained austerity policy.
In fact, if all these many governing authorities and healthcare institutions have one thing in common, it is that none of them had given much attention to crisis prevention and preparation at all.
We shall take a closer look at the neoliberal public policy, with its emphasis on austerity measures, which has caused all of this, in Sect. 126.96.36.199 below. But first, let us take a closer look at some of the findings of the health policy assessment regarding the EU and its member states as made in 2018 by the OECD (and the EU Commission itself) and as based upon the findings of their above-quoted report.
188.8.131.52.2 Health Insurance Coverage
By and large, the financing of a universal health coverage can happen through two main models that prevail in Europe:Footnote 81
The social democratic or “Nordic” model, in which health insurance—as most other public services—is funded predominantly from taxation. This model prevails in countries such as Norway, Finland, Sweden, Denmark and Iceland. Not by coincidence, these countries also count among the happiest on Earth. (Cf. Sect. 2.1.3.)
The social insurance or “Bismarckian” model, in which health insurance—besides a wide variety of other social security systems, such as income support—is largely funded through employer and personal (mandatory) contributions.
According to the 2018 OECD-EC report, in 2018, most European countries had universal (or semi-universal) health care that at least covered basic health care services, such as consultations with doctors, tests and examinations and hospital admittance.Footnote 82 However, in practice, coverage of these “core services” might not have been as “universal” in some countries.Footnote 83
Still, in three European countries (notably Cyprus, Bulgaria and Romania), at least 10% of the population was still not universally covered for health services by 2018.Footnote 84
The basic coverage of primary health care in most EU Member States included a well-defined set of services, but in many cases based upon a model of “shared costs”. In some countries, supplementary health insurance could be taken out via private insurance in order to (1) cover costs remaining after the basic coverage (= so-called “complementary insurance”), (2) add additional services (= so-called “supplementary insurance”), or (3) provide faster access or a wider choice of health care providers (= so-called “duplicate insurance”). In most EU countries, only a small proportion of the population had opted for one or more forms of such additional private health insurance. But in five countries (France, The Netherlands, Slovenia, Belgium and Croatia), half or more of the population had reportedly opted for such additional private coverage.Footnote 85
The development of private health insurance was linked to several factors in the 2018 OECD-EC report, including gaps in access to publicly funded services, government interventions targeting private health insurance markets, as well as historical development.Footnote 86
184.108.40.206.3 Extent of Healthcare Coverage
One of the first matters that have been investigated in the above-mentioned 2018 report from the OECD and the European Commission and that have been quoted in this book, deals with the extent of healthcare coverage that was achieved throughout the EU by 2018.
From said study, it appeared that across the EU, inpatient services provided in hospitals were among those most comprehensively covered than any other form of medical care in 2018. It, more precisely, appeared from this study that, across the EU, 93% of all the costs related to such inpatient care were borne by public authorities or by mandatory insurance schemes. In many countries, patients even had access to completely-for-free acute inpatient care. This appeared to be the case, e.g., in Denmark, Hungary, Poland, Spain and the United Kingdom, where the government and/or mandatory health insurance systems covered more than 90% of these inpatient costs at the time. In The Netherlands, these inpatient services were also free once an annual general excess was reached. However, in Cyprus, Greece and Ireland, the financial coverage of the costs related to hospital inpatient care was by contrast lower than 70%.Footnote 87
Regarding outpatient care expenditure, it appeared from the same study that, in 2018, more than 75% of the costs were borne by public authorities and/or mandatory healthcare financing Schemes (77%). When excluding Bulgaria and Cyprus, it appeared that at least half of all the costs for outpatient medical care in EU countries were paid for by mandatory third-party payers. There were even a number of EU countries where all outpatient primary and specialist medical care was generally free “at the point of service”, implying that a physician affiliated with the mandatory program had to be consulted at a fixed co-payment. In this group of countries, user fees borne by the patient himself, moreover, still applied for specific services and/or when consulting unqualified providers. Such a system, e.g., applied in Denmark, where 92% of the total outpatient medical cost was covered by the mandatory health programmes, but charges were still made for visits to health providers functioning outside these mandatory schemes, such as psychologists and physiotherapists. A similar system applied in the United Kingdom (84%), where outpatient care outside the services ordered under the NHS system was not covered.Footnote 88
Government or mandatory health insurance coverage for medicines was in the EU generally less extensive than coverage for costs for inpatient and outpatient medical care. According to the study from the OECD and the CE, across the EU, about 64% of all medicine costs were born by government and/or mandatory health insurance schemes in 2018. So-called “over-the-counter medicines”—which are obtainable without a prescription from a physician, and which are usually not covered by a government or otherwise mandatory health insurance scheme—were of major importance in some EU countries. E.g., in Cyprus and Bulgaria, less than 20% of all medication costs fell under public or mandatory health insurance schemes. By contrast, in Germany, this percentage amounted to 84%, with only moderate cost-sharing requirements in accordance with which patients generally had only to pay a co-insurance rate of 10% for each prescribed medicine, up to a maximum of EUR 10 per item within an annual co-insurance cap.Footnote 89
220.127.116.11.4 Availability of Doctors
According to the study from the OECD and the European Commission, in (or in the time period preceding) 2018, the number of doctors per capita showed huge differences between EU countries.Footnote 90
According to the study, in 2016, Greece was among the EU countries with the highest number of doctors per 1000 population, namely 6.6. However, the study also mentioned that this number might have been an overestimation, as it included all doctors licensed to practice (including retired physicians and those emigrated to other countries). Other countries that still had high numbers of general practitioners were Austria and Portugal, however in Portugal these numbers were assumed to be an overestimation for the same reason as Greece (even implying that when disregarding this overestimation, the number of practicing physicians in Portugal would probably have been just under the EU average). According to the OECD and CE study, the number of physicians per capita was the smallest in Poland, the United Kingdom and Romania.Footnote 91
From the study, it also appeared that, since 2000, the number of physicians per capita had risen in all EU countries, except in France, Poland and Slovakia, where the numbers had stayed stable. On average across EU countries, the number of physicians per capita was reported to have risen from an average of 2.9 doctors per 1000 inhabitants in 2000, to 3.6 in 2016. In most EU countries, the financial crisis of 2008 had not been of much impact on the growth figure regarding physicians.Footnote 92
In many EU countries, there was already for more than a decade a shortage of general practitioners, with concerns that this problem would not be solved in the near future. This was particularly more the case in rural and remote areas than in urban areas. While the total number of physicians per capita had during the years preceding 2018 increased in almost all EU countries, the proportion of general practitioners had in many countries stagnated or even declined.Footnote 93 Physician density was, moreover, consistently higher in urban regions, reflecting a higher availability of specialized medical services, such as access to surgery, and physicians’ own preference for settling in an urban environment. The differences in the number of available physicians between urban and rural regions were reported to be the highest in the Slovak Republic, the Czech Republic and Greece. Many countries also reported having resorted to several forms of financial and other stimuli to attract and retain doctors in such “underserved areas”. Examples of such stimuli were one-time subsidies to help general practitioners start their practice, as well as recurrent payment schemes, amongst which income guarantees and bonuses. Some EU Member States also had resorted to a policy of stimulating students from underserved regions to start medical school.Footnote 94
18.104.22.168.5 Availability of Nurses
By 2018, the number of nurses per capita far outnumbered the number of doctors in most EU Member States, with a ratio of on average two to four nurses per physician in most EU Member States. According to the OECD and CE-study, nurses play a crucial role in the delivery of healthcare, not only in hospitals and long-term nursing facilities (such as retirement homes for the elderly), but to an increasing extent also in primary care and home care schemesFootnote 95 (cf. already Sect. 22.214.171.124, re the “inclusive care model”, which has during the past decades to an increasing extent been promoted and embraced by neoliberal governments in light of their austerity policies).
Notwithstanding the foregoing, many EU countries were increasingly dealing with likely future shortages of nurses, as the need for (more) nurses was expected to increase in a context of an ageing and retiring “baby boom” population in general, and a generation of “baby boom” nurses in particular. This concern had already by 2018 made many EU countries to resort to measures for improving the schooling of new nurses. Other EU countries even started addressing the nurse shortages by attracting nurses from third countries.Footnote 96
On average, there were 8.4 nurses per 1000 inhabitants in all EU countries in 2016, up from 6.7 in 2000. The number of nurses per number of inhabitants was reported to be the highest in Denmark and Finland. However, about a third of the nurses employed in the two latter countries were at the same time reported to be trained at a less advanced level than general nurses and to be performing lower tasks. Switzerland and Iceland were facing a similar situation. In some other countries, such as Italy and Spain, many so-called “health care assistants” (or “nursing auxiliaries” or “nursing aids”) were hired to assist qualified nurses. Greece was reported having the lowest number of nurses per capita among EU countries, but the data available for Greece only included nurses serving in hospitals. Bulgaria, Latvia, Poland and Cyprus also reported relatively low numbers of qualified nurses.Footnote 97
Since 2000, the number of qualified nurses per capita had risen in most EU Member States. Exceptions on this general trend concerned the Baltic countries (Estonia, Latvia and Lithuania), where the number of nurses per capita was reported to have remained stable, and Slovakia, where the number of nurses was reported to have decreased both in absolute numbers and per capita. Most of this decline regarding Slovakia was reported to have taken place between 2000 and 2010.Footnote 98
In other EU countries, there had by contrast been an increase in the number of qualified nurses. This increase in the number of qualified nurses per capita was highest in Denmark, Finland, Germany, Luxembourg, France and Malta. Malta was thereby reported to have resorted to a series of unusual measures for both educating more nurses locally and attracting more nurses from abroad to deal with shortages of the past. E.g., the university training to become a qualified nurse in Malta had become free for students; and after students graduated, they were stimulated to take an educational leave while receiving at least part of their salary.Footnote 99
According to the OECD and CE-study, most nurses in EU Member States serve in hospitals. Relative to the total size of the general population, the number of qualified nurses serving in hospitals, both in absolute numbers and regarding full-time equivalents, had in the decade leading up to 2018 increased in most EU countries (e.g., in Austria, Belgium, Denmark, Germany and Malta). In France, the total number of qualified nurses serving in hospitals per capita had also risen slightly, although the number of full-time equivalents had more or less stayed the same, implying that the average number of laboring hours performed by qualified nurses had decreased slightly. In many EU Member States, the ratio of full-time equivalents to the absolute number of nurses was reported to range from 0.80 to 0.95, with this ratio having remained relatively stable over time. However, this average ratio was reported of being much lower in Belgium and Germany (0.70–0.75), implying that qualified nurses in these countries worked fewer hours.Footnote 100
Many countries also reported a growing number of qualified nurses working in so-called primary care. In response to shortages of GPs, some EU Member States had resorted to introducing or expanding advanced nurse practitioner roles to ameliorate access to primary care. Assessments of experiences with such (advanced) nurse practitioners in Finland and the United Kingdom thereby demonstrated that such schemes could improve access to care and reduce waiting times for medical treatment, while at the same time providing a comparable quality of care as physicians for a range of patients (e.g., patients with minor illnesses or patients requiring only routine follow-up).Footnote 101
126.96.36.199.6 Hospital Beds
One of the most vital sets of data in light of the Covid-19 pandemic is most likely the number of hospital beds.
This number gives an indication of the means that are generally available for providing health care services to hospital patients. The impact of the availability of hospital beds on the number of hospital admissions has thereby been extensively documented. From this research, it appears that a greater supply of hospital beds, in general, leads to a lower threshold for hospital admission (the so-called “Rohmer’s law” that a “built bed is a filled bed”).Footnote 102
It must in this regard be underlined that under neoliberal austerity measures of the past decades, EU authorities and EU member state governments aimed at keeping the number of hospital beds as low as still deemed acceptable, which has been one of the most main reasons for the disastrous impact Covid-19 has had in both the countries of the EU and the United Kingdom.
According to the already above-mentioned OECD and CE-study, by 2018, Germany, Austria and Bulgaria still reported the highest amounts of hospital beds per capita, having more than seven beds per 1000 inhabitants in 2016, which was considerably above the EU average of just over five beds per 1000 inhabitants, and more than twice the number of available beds in Sweden, the United Kingdom and Denmark.Footnote 103
Since 2000, in the light of the neoliberal austerity policies that had been strongly geared towards this criterion, the number of hospital beds per capita had drastically fallen in all EU countries. On average, the number was reported to have fallen by no less than 20%Footnote 104 (= which implied that every five beds had been reduced to four). This reduction in the supply of hospital beds had in particular marked in Finland, Estonia, Latvia and Lithuania. The reduction had, moreover, been accompanied by a fall in the number of actual hospital admissions in various EU Member States and by a fall in the average duration of stay in almost all EU countries,Footnote 105 which forms but one illustration of how much the EU prefers austerity above the interests of patients (and thus, ultimately, its general population).
Hospital admissions were by 2018 still the highest in the three countries with the largest amount of available hospital beds: Bulgaria, Germany and Austria. While differences in patients’ clinical needs may present an explanation for some small part of the differences in admission rates, these variations likely mostly reflected other factors, such as differences in hospital bed supply, clinical practices and payment systems.Footnote 106
In all EU Member States, the main diseases resulting into hospital admittance in 2016 were: circulatory diseases, pregnancy and childbirth, injuries and other external causes, diseases of the digestive system, respiratory diseases and cancers.Footnote 107
Hospital admittance rates not only varied between EU Member States but even within countries. In various EU countries (e.g., Finland, Germany, Italy, Portugal, Spain and the United Kingdom), hospital admissions (except those for surgical interventions) varied more than twofold between different regions within the same country. This was believed to be due not only to differences in the availability of hospital beds, but also in the supply and quality of primary care services.Footnote 108
Hospital bed occupancy rates were, moreover, reported to have risen over time in some EU countries with a relatively low amount of hospital beds. This was particularly the case for Ireland, having a curative (acute) care bed occupancy approaching 100% in 2016, well above the number of all other countries. In countries such as Belgium and Germany, bed occupancy had remained relatively the same since 2000, at around 80%. The EU average had also remained stable at around 77%.Footnote 109
Figure 5.1 gives an indication of the number of hospital beds per 1000 population, in 2000 and 2016 (or nearest year) in some European countries. Figure 5.2 gives a similar overview of the occupancy rate of curative (acute) care beds, in 2000 and 2016 (or nearest year).
188.8.131.52 Impact of EU Neoliberal Austerity
184.108.40.206.1 EU Monetary and Fiscal Policy as a Method of Inciting EU Member States to Take Austerity Measures Regarding Their Healthcare Sector(s)
In March 2020, Gerrit Zeilemaker made his own, more critical assessment of the past decades of neoliberal policy applied to the EU healthcare sector.Footnote 110
This author started his assessment by pointing out how, for more than a decade already, the EU Commission in its “country-specific recommendations”, insisted that EU member states should continue reducing healthcare costs and expenditures.Footnote 111 According to Zeilemaker, through this policy of austerity “recommendations”, healthcare in EU countries, over the past years, has become completely subordinated to the so-called “Maastricht (budgetary) convergence criteria”. The budget constraints imposed on EU countries as part of the Growth and Stability Pact (cf. Sect. 220.127.116.11.) have in this manner been increasingly used as a leverage to cut down on healthcare. According to Streeck, such a policy is a manifestation of an increasing willingness shown by the EU, to decouple its fiscal and monetary policy form national democracy, as demanded by the financial markets.Footnote 112
In 1992, said convergence criteria had been put in place to measure progress in countries’ preparedness to adopt the euro, and defined as a set of macroeconomic indicators, which focus on:
Sound public finances (with a policy emphasis on keeping these “sustainable”).
Exchange-rate stability aimed at demonstrating that an EU and euro area member state can manage its economy without recourse to excessive currency fluctuations.
Long-term interest rates, which are an indication for assessing the durability of the convergence.
Table 5.1 gives a schematic overview of the main characteristics of the four Maastricht convergence criteria.
The Treaty on the Functioning of the European Union (TFEU, Article 140Footnote 113) stipulates that, at least once every 2 years, or at the request of a Member State with a derogation (not participating in the euro area), the European Commission and the ECB must report to the EU Council on the progress made towards convergence.
Article 140(1) TFEU requires these reports to include an examination of the compatibility of national legislation, including the statutes of the national central bank, with Articles 130 and 131 TFEU and the Statute of the European System of Central Banks and of the European Central Bank (also referred to as “ESCB/ECB Statute”). The reports must also examine whether a high degree of sustainable convergence has been achieved in the Member State concerned, by reference to the fulfilment of the convergence criteria (i.e., price stability, public finances, exchange rate stability, long-term interest rates), and by taking account of the other factors mentioned in the final subparagraph of Article 140(1) TFEU. The four convergence criteria are developed further in a Protocol annexed to the Treaties (cf.; Protocol No 13 on the convergence criteria).
The most relevant convergence criterion, (purportedly) justifying the EU’s severe neoliberal austerity policy, is the one dealing with public finances and is defined in the second indent of Article 140(1) TFEU as:
the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article 126(6).
Furthermore, Article 2 of the Protocol on the convergence criteria states that this criterion implies that:
at the time of the examination the member state is not the subject of a Council decision under Article 126(6) of the said Treaty that an excessive deficit exists.
The assessment of convergence in the fiscal area is hereby directly linked to the excessive deficit procedure as specified in Article 126 of the Treaty and further clarified in the Stability and Growth Pact (cf. in particular the excessive deficit procedure, as reinforced by the 2011 reform of the Stability and Growth Pact).Footnote 114 The details of the excessive deficit procedure are set out in Regulation 1467/97, as amended in 2005 and 2011, which establishes how government deficit and debt are to be assessed in order to determine whether an excessive deficit exists, in accordance with Article 126 TFEU. The assessment on fiscal convergence is thus made on the basis of whether the Member State is the subject of a Council decision under Article 126(6) on the existence of an excessive deficit.Footnote 115
18.104.22.168.2 Methods of Deploying EU (Monetary and Fiscal) Austerity Policy in Practice
According to the Corporate Europe Observatory, there are many (both formal and informal) routes “from Brussels to EU capitals” based on the above-quoted EU principles and regulations. Consequently, the enforcement of economic and fiscal policy rules is carried out through a plethora of procedures, with the health sector having been forced to deal with all of them in recent years.Footnote 116
Even the European Commission itself reported that the pressure to cut healthcare costs can be most clearly seen in loan agreements, such as those between the EU and Greece and Portugal in the aftermath of the financial crisis of 2008.Footnote 117 E.g., in Portugal’s 2011 loan agreement (i.e., a “Memorandum of understanding”), the reduction of costs in the health sector was high on the list of demands of EU creditors. As a result, staff expenditure in the Portuguese health sector was reduced by as much as 27% between 2010 and 2012.Footnote 118 In the same vein, in Greece, three consecutive loan-linked adjustment programmes between 2010 and 2016 led to a similar sharp drop—by about 40%—in per capita health expenditure (according to World Bank data).Footnote 119
22.214.171.124.2.2 A Letter from the ECB to Italy on 5 August 2011
Italy, though severely impacted by the financial and economic crisis of 2008, had not immediately been subject to an EU fiscal adjustment program by e.g., the European Commission or the EU Council. Instead, it was the European Central Bank (ECB) itself that would start putting pressure on the Italian government to reform health care spending. This happened under the form of a letter from the ECB addressed to the Italian government, of 5 August 2011 that urged for swift reforms, including austerity measures in healthcare.Footnote 120
Said letter has been described as “a government program”, and a “diktat”, yet there have also been those who questioned its existence at the time. The “secret” letter sent to the Italian government on 5 August 2011 by the (at the time) president of the ECB, Jean-Claude Trichet, and by his successor “in pectore”, Mario Draghi (the later governor of the “Banca d’Italia”—the Italian central bankFootnote 121), was reported to have soon afterwards inflamed the political debate of the summer of 2011, as it implied a public finance manoeuvre never seen before in the history of the Italian Republic. The letter concerned a “strictly confidential” document, which was also intended to remain confidential. Still, the newspaper “Corriere della sera” managed to obtain a copy of the letter and published in its original English text, as well as in an Italian translation, so that everyone could get a clear idea of the (dictatorial) working methods applied by some of the highest EU officials. The letter is uncharacteristically precise and punctual compared to the classical scheme of the liturgy of central banks.Footnote 122
To clearly demonstrate how, through its monetary and fiscal policy, the EU (in this case through the ECB) may call for “marketization” and “privatization” reforms, even in policy domains completely outside the scope of its competences, the letter has been quoted hereafter (in full) in its English version:Footnote 123
Frankfurt/Rome, 5 August 2011.
The Governing Council of the European Central Bank discussed on 4 August the situation in Italy’s government bond markets. The Governing Council considers that pressing action by the Italian authorities is essential to restore the confidence of investors.
The euro area Heads of State or Government summit of 21 July 2011 concluded that “all euro countries solemnly reaffirm their inflexible determination to honour fully their own individual sovereign signature and all their commitments to sustainable fiscal conditions and structural reforms”. The Governing Council considers that Italy needs to urgently underpin the standing of its sovereign signature and its commitment to fiscal sustainability and structural reforms.
The Italian Government has decided to pursue a balanced budget in 2014 and, to this purpose, has recently introduced a fiscal package. These are important steps, but not sufficient.
At the current juncture, we consider the following measures as essential:
1. We cf. a need for significant measures to enhance potential growth. A few recent decisions taken by the Government move in this direction; other measures are under discussion with social partners. However, more needs to be done and it is crucial to go forward decisively. Key challenges are to increase competition, particularly in services to improve the quality of public services and to design regulatory and fiscal systems better suited to support firms’ competitiveness and efficiency of the labour market.
a) A comprehensive, far-reaching and credible reform strategy, including the full liberalisation of local public services and of professional services is needed. This should apply particularly to the provision of local services through large scale privatizations.
b) There is also a need to further reform the collective wage bargaining system allowing firm-level agreements to tailor wages and working conditions to firms’ specific needs and increasing their relevance with respect to other layers of negotiations. The June 28 agreement between the main trade unions and the industrial businesses associations moves in this direction.
c) A thorough review of the rules regulating the hiring and dismissal of employees should be adopted in conjunction with the establishment of an unemployment insurance system and a set of active labour market policies capable of easing the reallocation of resources towards the more competitive firms and sectors.
2. The government needs to take immediate and bold measures to ensuring the sustainability of public finances.
a) Additional-corrective fiscal measures is needed. We consider essential for the Italian authorities to frontload the measures adopted in the July 2011 package by at least one year. The aim should be to achieve a better-than-planned fiscal deficit in 2011, a net borrowing of 1.0% in 2012 and a balanced budget in 2013, mainly via expenditure cuts. It is possible to intervene further in the pension system, making more stringent the eligibility criteria for seniority pensions and rapidly aligning the retirement age of women in the private sector to that established for public employees. Thereby achieving savings already in 2012. In addition, the government should consider significantly reducing the cost of public employees, by strengthening turnover rules and, if necessary, by reducing wages.
b) An automatic deficit reducing clause should be introduced stating that any slippages from deficit targets will be automatically compensated through horizontal cuts on discretionary expenditures.
c) Borrowing, including commercial debt and expenditures of regional and local governments should be placed under tight control, in line with the principles of the ongoing reform of intergovernmental fiscal relations.
In view of the severity of the current financial market situation, we regard as crucial that all actions listed in sections 1 and 2 above be taken as soon as possible with decree-laws, followed by Parliamentary ratification by end September 2011. A constitutional reform tightening fiscal rules would also be appropriate.
3. We also encourage the government to immediately take measures to ensure a major overhaul of the public administration in order to improve administrative efficiency and business friendliness. In public entities the use of performance indicators should be systematic (especially in the health, education and judiciary systems). There is a need for a strong commitment to abolish or consolidate some intermediary administrative layers (such as the provinces). Actions aimed at exploiting economies of scale in local public services should be strengthened.
We trust that the Government will take all the appropriate actions.
Mario Draghi, Jean-Claude Trichet.
The message from the ECB top officials to the State of Italy left little to the imagination, not to say that, by their letter, they practically summoned the Italian government to immediately comply with the dictates of EU bureaucracy, and already imposed a blueprint for far-reaching, socioeconomic reforms that Italy was instructed to undertake, amongst other things regarding its healthcare sector.Footnote 124
E.g., the secret letter of 5 August 2011 underlined the need to tighten the criteria for obtaining retirement pensions and to extend the retirement age of women in the private sector, in light of budgetary savings already to be accomplished in 2012. The letter also ‘imposed’ to “significantly” reduce the costs of the public service sector, by strengthening the rules on turnover and, “if necessary, by reducing wages”. In order to accelerate the growth of the Italian economy, Trichet and Draghi also explicitly recalled the need to review the rules on the hiring and dismissal of employees in private enterprises.Footnote 125 These policy dictates clearly resonate with the classical “Iron Law of Wages”—the idea that the wages of the members of the working class should be kept as low as reasonably possible—one of the corner stones of both eighteenth century liberal and present-day neoliberal economic thinking.Footnote 126
But even that was not considered enough. According to Trichet and Draghi, economic growth requires a “full liberalization” of professional associations and local public services, providing for their “large-scale privatization”. Next to a “serious commitment” to abolish or consolidate some intermediate administrative levels, “such as the Provinces”.Footnote 127 In view of the severity of the at the time prevailing financial market situation, the imposed upon measures were, moreover, to be included in a decree law to be passed as soon as possible and approved in Italy’s Parliament by the end of September 2011.Footnote 128
Trichet and Draghi did not go as far as calling for the assembly of the Italian Parliament themselves, albeit coming very close in doing so.
All these “interventions” were considered of an “essential” nature in order to strengthen the reliability of the sovereign signature, the value and the creditworthiness of Italian government bonds.Footnote 129
In the following years, the Italian government did precisely what it had been instructed. At first with some reservation, the Italian government then quickly summoned the Italian social partners, making known the existence of the letter of 5 August 2011 however without revealing it. And on Saturday, 13 August 2011, only a week after, the Italian government went ahead with drafting a balanced budget in accordance with the dictates of the EU central bank leadership. Three days later, when the markets reopened, the ECB and the European system of central banks, whose governors had been immediately informed of the letter and its contents, intervened on the Italian markets.Footnote 130
The type of letter Trichet and Draghi send to the Italian government on 5 August 2011 demonstrates that, once a member state needs monetary or fiscal support, it is no longer its democratically elected parliament—or the government that such a parliament has appointed—but the ECB (as itself driven by the financial markets) that starts determining the socioeconomic policy of such a member state.Footnote 131
One legacy from this era of austerity has been the lowering of the number of hospital beds and ICU beds in Italy: Indeed, in light of the austerity policy dictated by the EU, the number of hospital beds for acute medical care per 100,000 inhabitants had dropped by 13% in the period from 2010 until 2015, a trend that was still ongoing when Covid-19 started hitting Italy.Footnote 132 This fact is, obviously, of severe importance for the Covid-19 pandemic, as higher hospital bed capacity has been considered one of the main conditions for lower Covid-19 mortality rates.Footnote 133 One simply has to compare the numbers of Covid-19 deaths in countries with a high number of hospital beds (e.g., Germany) with countries with a lower number of hospital beds: While Italy and Germany still had been reported of having a similar number of hospital beds per 1000 inhabitants in 1990 (Italy 7, Germany slightly higher), after 10 years of post-2008 crisis EU austerity, in which Italy’s health budget had been slashed to comply with EU fiscal rules, the number of hospital beds in Italy had dropped to 2.6 per 1000 inhabitants, while the number of hospital beds in Germany had remained well above 6. During that same period, from 2008 until 2018, Germany had moreover nearly doubled its total public healthcare expenditure (in nominal terms, i.e. including inflation effects), while Italy’s total healthcare expenditure had only increased by 5.3%.Footnote 134
126.96.36.199.2.3 European Semester
The economic governance procedure that affects all EU countries in the most direct manner concerns the so-called “European Semester”. This system for deploying EU fiscal policy had already been set up during the early stages of the financial crisis of 2007–2008. The European Semester was thereby intended as a policy tool for guiding the economic and fiscal policies of the EU Member States. The system of the European Semester, more precisely, implies that the EU Commission draws up recommendations for each Member State on an annual basis (except for those Member States that already have an adjustment programme, e.g., linked to a loan agreement, cf. Sect. 188.8.131.52.2.1.). The drafting of this document is then followed by a discussion in the EU Council, which is tasked with adopting the final recommendations. This usually happens in June or July. In practical all cases, these final recommendations are identical or similar to those of the EU Commission (and thus also to those of the EU bureaucracies on which it relies).Footnote 135 For the governments of fiscally compliant Member States, these recommendations are usually of little importance, but for others—countries that are facing economic or fiscal problems—they can contain very serious messages.Footnote 136
The European Semester is considered as an important policy tool enforcing the EU’s “economic governance”. It is primarily designed to prevent EU Member States from breaching fiscal rules on topics as: public deficits, public debt and the public-debt to GDP ratio, besides a variety of so-called “macroeconomic imbalances”, for some of which the EU Commission can even impose a fine. Usually it is EU Member States whose economies are for some reason in a bad state that receive recommendations, specifically addressing the problem areas these countries are facing. This usually involves bringing public spending under control through austerity, but it can also involve implementing labour market reforms in order to make collective bargaining less feasible. This was e.g., the case for France in 2016.Footnote 137
Especially the restructuring of the healthcare sector has reportedly been an important and recurring topic since the first European Semesters were issued in 2011. It has in this regard, e.g., been observed that, by mid-2020, the EU Commission had already issued 107 recommendations concerning the health (care) sector in a broad sense of the word (including “long-term care (or nursing)”). Taking into consideration that each EU member country usually receives four to five recommendations per year, the foregoing demonstrates that health care (and especially the marketisation and privatisation of health care service providing) is an issue high on the agenda of the EU authorities. In practically all EU recommendations, health is said to have been a standard theme, and when ranking the EU proposals, health sector reforms, together with those of the pension system (which are treated as one cluster), they have ranked third or fourth every year since the start of the European Semester system in 2011 (preceded by “tax reforms” and “business environment/regulation”).Footnote 138 Again according to the Corporate Europe Observatory, 76 out of 107 European Semester recommendations adopted between 2011 and 2019 proposed to improve the “cost-effectiveness” of the healthcare system or simply to make cuts in public spending of health care. As in many other areas of socio-economic life, the most frequent recommendation is one relating to the so-called “cost-effectiveness” of the healthcare system, a recommendation that the EU Commission is reported to have proposed and adopted 39 times as of 2011. By contrast, in the list of areas considered for more investment, health care has appeared in a very limited number of cases. In the opinion of the Corporate Europe Observatory, this suggests that the term “cost-effectiveness” is in most cases little more than a “call for cuts” in public spending—as has appeared on many occasions and from many events.Footnote 139
Also regarding the example of Italy, whose as of 2011 ever shrinking hospital system would shortly afterwards be completely overwhelmed during the first wave of the Covid-19 pandemic (cf. Sect. 184.108.40.206.4.1), the EU Commission in its “2019 Joint Report on Healthcare and Long-Term Care Systems and Fiscal Sustainability” made the following strict austerity recommendations:Footnote 140
The analysis above shows that a range of reforms have been implemented in recent years, for example, to strengthen primary care provision and its use, to improve efficiency, to improve data collection, information and monitoring systems and the use of ICT solutions, to control overall expenditure and pharmaceutical expenditure while delivering quality healthcare. They were to a very large extent successful and, therefore, Italy should continue to pursue them. The main challenges for the Italian healthcare system are as follows:
To continue increasing the efficiency of healthcare spending, promoting quality and integrated care as well as a focusing on costs, to tackle the impact on spending due to population ageing and non-demographic factors.
To extend the possibilities of hospitals to provide ambulatory and day care as well as to transfer more healthcare services into the ambulatory sector in order to reduce the number of inpatient care treatments, as well as to strategically direct more resources towards providers of lower levels of care, to increase efficiency.
To tackle unwarranted regional variation in waiting times and resource distribution. In particular, monitor and correct potential uneven distribution of hospital beds (follow-up and long-term care), to free-up capacity in acute settings as a driver of lower waiting times. To the same end, further develop ICT solutions to increase service efficiency of operations.
To re-think the current mix between doctors and nurses, to favor solutions that relying less heavily on doctors, in the cases where nurses can represent a substitute, consistently with a more primary-care oriented system.
To further the efforts in the field of pharmaceuticals by considering additional measures, both on the side of patients and of healthcare professionals, to improve the rational prescribing and usage of medicines. The policies could help reducing the high level of out-of-pocket payments and improving access to cost-effective new medicines by generating savings to the public payer.
To ensure a greater and nationally coordinated use of health technology assessment to determine new high-cost equipment capacity, the benefit basket and the cost-sharing design across medical interventions.
To implement the National Health Information System across all regions and sub-regional levels which has a strong potential to monitor and relate expenditure with activity and with outcomes and in identifying good practices and areas for improvement.
To encourage debate, information exchange, and peer reviews between regions once the system is fully implemented. In this context, the patient e-card (Tessera Sanitaria) should be fully exploited.
To continue to monitor regional expenditure policies making regions showing deficit in the health sector budget restore the balance and ensure efficiency and appropriateness in the provision of LEAs. To continue to improve accountability and governance of the system and identify possible cost-savings in the health sector administration, as it currently involves national and regional institutions.
To further the efforts to support public health priorities and enhance health promotion and disease prevention activities, i.e. promoting healthy life styles and disease screening.
A similar conclusion (including a set of recommendations) was reached regarding Italy’s (at the time prevailing) systems of long-term care/nursing (including the sector of the nursing homes for the elderly).Footnote 141 We shall readdress the latter in Chap. 6.
220.127.116.11.2.4 Further Implementation of the Neoliberal Austerity Agenda on Healthcare
The EU’s direct intervention in domains of socioeconomic life for which it has, as such, no defined authority, e.g., the healthcare sector, is hardly surprising. It is but one of the many illustrations of how the EU bureaucracy is fixated on implementing a neoliberal agenda throughout all of its member states.
As some academics, quoted in the above-mentioned report of the Corporate Europe Observatory, already had remarked in a paper of 2015:Footnote 142
The hierarchy and subordination of policies within the European institutions is not something new and has been reported elsewhere confirming the observed tendency of linking health goals more closely to the EU’s economic growth narrative rather than valuing the health policy objectives in their own right. Despite the existence of official documents supporting the need to invest in health, investments in health infrastructure and human resources as a prerequisite for economic growth do not feature as a priority.
According to the Corporate Europe Observatory, the EU fiscal policy deployed in the past decades has had enormous consequences for the socioeconomic impact of Covid-19. The European Corporate Observatory even claims that if European health systems had been better equipped to deal with a pandemic, the health and socio-economic consequences of Covid-19 would most likely not have been so severe. E.g., better-equipped health facilities, with sufficiently trained nurses, hospital beds, PPE, etc., would obviously have been at less risk of being overwhelmed. This would in turn have reduced the need for strict lockdowns, reducing their disastrous economic consequences. However, in the opinion of the Corporate Europe Observatory, precisely the establishment of such well-equipped public health facilities had actively been discouraged under the neoliberal, short-sighted policy approach as laid down in the European semester reports of the past decade, which have all been characterized by a policy approach that insists on solutions that keep expenditure from rising, and on cutting back on expenses even if this goes to the detriment of public health services.Footnote 143 The significance of the European Semester hereby largely depends on how a EU member country is generally doing with the rules on public debt and deficits, besides a variety of other macroeconomic indicators that have been determining the content of the European Semester in the past.Footnote 144
This policy objective of reducing (public) health care expenditure is often explicitly mentioned in the semester-reports: again according to the information provided by the Corporate Europe Observatory, in the recent past, six EU member countries had been explicitly asked to restrict access to early retirement, while an explicit recommendation to reduce hospital costs (e.g., by reducing hospital treatment and by replacing it with outpatient care, or by introducing activity-based financing) had been issued to four countries (Lithuania, Bulgaria, Romania, and Ireland).Footnote 145
On a practical level this implied that when Covid-19 first hit the European continent, many EU Member States had shortly before been reducing the amount of their hospital beds: according to Eurostat, between 2012 and 2017, the number of hospital beds in the EU-28 had fallen by 3.3%, in some cases at a very fast pace.Footnote 146
Spain is one of the most telling examples of how far-reaching the impact of the European Semester can be: A 2012 loan agreement, entered into to support the country’s financial sector, required the Spanish government to “fully implement the recommendations to address macroeconomic imbalances under the European Semester”. This short and innocent sounding sentence in reality opened the door for years of very direct interference from the part of the European Commission with decision-making in Spain, including on the health budget. Recommendations in 2013 and 2014 urgently called for more “cost-effectiveness” in the Spanish health sector, a policy approach that would have nasty consequences: E.g., in 2012, the Spanish government submitted a law to reduce public spending in the health sector (cf. Royal Decree Law 16/2012). The preamble of this law, more precisely, stated that the immediate application of the law was “necessary, in the prevailing socio-economic context”, and that the measures resorted to by the law were necessary to respond to a variety of factors, including the “viability required by the European Union”. Between 2012 and 2014 alone, this policy approach subsequently resulted into a reduction of no less than 28,500 staff members in the Spanish public health sector (whereas the total number before that time had amounted to around 477,000 such staff members). This also has been of fundamental significance during the Covid-19 crisis, where a lack of staff members has been indicated as one of the main problems the overwhelmed Spanish hospitals have been dealing with throughout the Covid-19 pandemic, ultimately attributing to Spain’s high mortality rates.Footnote 147 (Cf. Sect. 18.104.22.168.3.)
Moreover, the Corporate Europe Observatory explicitly shared its belief that the days of the European Semester’s interference with the health policies of EU Member States are far from over. An indication for this was derived from a recommendation issued by the EU Council of June 2020, hence of the midst of the Covid-19 pandemic. In this recommendation, the EU Council stressed that the suspension of the most binding rules on public budgets, debts and deficits, had been of a temporary nature only. This implied that, once the Covid-19 crisis would be over, the “moratorium” on neoliberal austerity would be lifted again, with EU Member States again having to go back to “normal” and to start working on keeping public debt and deficits within the EU targeted ranges, a policy that will most likely imply cutting on public services. What the EU Council seems to have implied is that when European countries would again emerge from the Covid-19 pandemic, albeit in a poor economic shape, the EU’s economic governance rules would again be reactivated in full, which will likely require more cuts in public spending, including in the health sector. However, in the opinion of the Corporate European Observatory, if the Covid-19 pandemic has taught one lesson, it is that exactly the opposite needs to be done, especially considering that scientists globally started warning that further pandemics may be very likely due to a variety of factors, such as variants of the Covid-19 virus itself, as well as the rate of destruction of biodiversity which may lead to new virus outbreaks (cf. Sect. 2.2.2.).Footnote 148
22.214.171.124.3 The Resulting Outlook of the Healthcare Sector (by the Time Covid-19 Hit the European Continent)
Although health(care) is as such not a formal competence of the EU, the EU has, through the fiscal policy tools mentioned above, at least indirectly, considered it to be an economic activity, thus at the same time justifying its subjection to EU internal market rules (in particular the principles of free movement of goods, persons, capital and services, besides public procurement and state aid rules).Footnote 149
Moreover, as has been made clear in the previous Sects. 126.96.36.199.1 and 188.8.131.52, the healthcare sector has been subject to severe scrutiny in the context of EU austerity measures for at least the past decade.
This has, furthermore, attributed to an increasing degree of “marketisation” and privatisation of health care, which in turn started to further erode the public character of health care. The public health sector was opened up to a variety of further (neoliberal) practices, such as outsourcing, encouraging competition among different providers, public-private partnerships, besides a wide variety of other marketisation and privatisation policies, ultimately even going as far as selling public hospitals and nursing or care homes to private investors.Footnote 150 Private market-oriented reforms such as the People’s Health Movement (PHM) were hereby “undertaken under the guise of increasing efficiency and quality through competition and choice”, but, again in the words of the Corporate Europe Observatory, in reality “contributed to a significant rise in inequalities in health and access to health care” and “weakened the public healthcare systems”.Footnote 151
The Corporate Europe Observatory even made the remark that, as part of this EU-initiated marketization and privatization gulf, private for-profit providers started to lobby for what they referred to as a “level playing field” for both private and public health care providers. This implied that the new generation of private health care providers started making claims for their “fair” share of public funds. This was partly due to a wrong assessment from the start, as policymakers assumed that private health care has to be sufficiently profitable, apart from a select minority of rich clients that are sufficiently wealthy to pay for the full costs and private sector profit margins. This does not comply well with the fact that those who need health care the most, are often the ones least able to pay the “market price” for it.Footnote 152
Several of the neoliberal governments of EU member states, for their part, made use of the frenzy provided to them by the neoliberal, EU austerity policy in order to push unpopular savings policies in their country even further. The result for the healthcare sector has been: (1) continuous cutbacks (including on staff members), (2) increased workload compared to lower wages for the remaining medical staff (esp. nurses), (3) fewer and fewer available hospital beds (cf. Sect. 184.108.40.206.), (4) bankruptcies of hospitals (and care and nursing homes), and (5) ever-more privatizations in the EU healthcare system.Footnote 153
In recognition of the need to “improve access” to care outside of hospitals, many EU countries also started taking desperate steps to increase the availability of so-called “primary” and “community” care, as well as to introduce new models of so-called “intermediate care”, as alternatives for (often more decent) medical care provided in hospitals or care and nursing homes.Footnote 154 (Cf., furthermore, Sect. 220.127.116.11, on the theoretical background for this so-called “inclusive model” of health care.) One of the perceived problems of the past years had been that many people started reporting to hospitals because their primary care providers were unavailable (or were over-demanded).Footnote 155 A growing number of EU countries thereby started to adhere to the opinion that, in order to remain able to effectively respond to the needs of their ageing population, characterized by an increasing burden of chronic diseases, further efforts would be needed both to improve access to primary care and to provide more continuous and coordinated care outside hospitals and nursing homes.Footnote 156
EU austerity policy, furthermore, started to focus on “measuring and addressing overuse in hospitals”. This was based on a growing belief that many medical services provided for in hospitals only result in modest benefits for patients, or for only a limited number of patients.Footnote 157 Another comparable trend for both justifying and implementing EU austerity measures was based on the notion of “unlocking the potential of outpatient surgery”. It was assumed that outpatient surgery may help reduce the (ab)use of hospital resources, with the added belief that most patients prefer outpatient surgery anyhow, as it allows them to go home on the same day of their medical procedure. Advances in surgical and anaesthetic techniques also played a role here, but we cannot ignore the significant institutional factors supporting a marked increase in the use of day surgery in all EU countries during the past decade. Still, the spread of this preference for day surgery varies, with some countries leading the way in advocating day surgery as an easier and faster alternative to ever more complex medical interventions.Footnote 158 This practice, in its own turn, became a further argument for reducing the number of hospital beds even more (with all the adverse consequences this entails).
The effects of economic recessions on health inequalities also differ according to the policy response of national governments. E.g., countries such as the United Kingdom, Greece, Italy and Spain, that implemented severe austerity measures in the aftermath of the financial crisis of 2008 (amongst others, through significant cuts in health and social protection budgets), experienced far worse health outcomes than countries, such as Germany, Iceland and Sweden, that had chosen to keep relying on public health care spending and social safety nets. Older research has, in a similar manner shown that countries with a high level of social protection (such as Sweden) did not experience an increase in health inequalities during the economic recession of the 1990s. Similarly, in the United Kingdom, old age pensions were protected from austerity in the aftermath of the financial crisis of 2008, and this has prevented health inequalities among the elderly population. Such findings are consistent with other research on the effects of public sector and welfare state retrenchment and expanding trends in health inequalities, as seen in countries such as the United Kingdom, the United States and New Zealand. It has, e.g., been pointed out that inequalities in premature mortality and infant mortality by income and ethnicity in the United States had declined during the period of wealth expansion (i.e., the so-called “war on poverty” era between 1966 and 1980), but had again risen during the Reagan-Bush period (from 1980 until 2002) when under the impulse of the neoliberal wave, welfare provisions and health coverage had been scaled back. Similarly, in England, inequalities in child mortality rates had decreased as child poverty had declined during a period of public sector and welfare state expansion (i.e., mostly between 2000 and 2010), to drastically increase again as soon as austerity measures were implemented, with child poverty rates increasing again from 2010 until at least 2017.Footnote 159
According to Sumonja, economic neoliberalism has gradually entered an “authoritarian” phase after 2008. As a result, it has broken with elements of formal democracy and even started to violate fundamental rights (or at the very least stopped caring about these).Footnote 160 The evolution of the healthcare sector is a clear example of this evolution. This is undoubtedly at the same time one of the main socio-economic factors that contributed to the disastrous way in which the EU and its Member States responded to the Covid-19 crisis. We shall look at this in more detail in the next sections.
18.104.22.168.4 Further Data on the Impact of EU Austerity Policy in the Healthcare Sector in Some EU Member States
In 2011, the EU applied its austerity-driven approach to Italy, only providing ECB-support against normal interest rates if severe cuts were made in the healthcare sector.Footnote 161 (Cf. Sect. 22.214.171.124.2.)
The Italian government implemented these EU imposed reductions, resulting in the closing of 15% of Italian hospitals in a mere decade. After this savings operation, Italy was left with 3.2 beds per 1000 inhabitants, while Germany still had 8 and France still 6. Since then, Italy spent less than USD 3500 per year per person on healthcare, to which the government contributed only about USD 2500, the lowest amount in Western Europe.Footnote 162
Zeilemaker has pointed out that, when, at the end of February 2020, Italy was as one of the first European countries faced with the outbreak of Covid-19 on its territory (cf. Sect. 126.96.36.199.1.), the country immediately asked the EU for support for its healthcare under the argument that this had been “over-rationalized” during the preceding years at EU insistence. No aid whatsoever followed. No European country responded by sending urgently needed medical equipment or medical staff. An explicit emergency call from the Italian ambassador to the EU remained completely ignored. Christine Lagarde, President of the European Central Bank, furthermore, refused to cut interest rates to help Italy; it was a statement that many Italians perceived as a sign of utter contempt. Neither the EU, nor other EU member states, showed any willingness to help Italy, although part of the problems the country was facing had been the direct result of EU policy. The Czech Republic and Poland even kept for themselves medical urgency equipment provided by Russia and destined for Italy. Germany, for its part, held back 800,000 face masks ordered by Italy in China for two weeks because of “customs control”.Footnote 163
In the recent past, also Spain had to commit to a severe EU imposed austerity program. (Cf. Sect. 188.8.131.52.2.) As a result, healthcare costs had to be decreased by 5.7% in 2012 alone. Spain thus became one of the four EU member countries that had to cut and privatize healthcare the most in the aftermath of the financial crisis of 2008. While at the beginning of 2020, the country spent on average, 3300 EUR per inhabitant on healthcare, that figure amounted to 6000 EUR in Germany. In Spain, 30.1 per 1000 inhabitants worked in medical facilities and hospitals; in Germany this number amounted to 71. And while Spain had 9.5 intensive care places per 100,000 inhabitants, in Germany there were about 34. Moreover, many of Spain’s retirement homes for the elderly had been privatized in the aftermath of the financial crisis of 2008, often falling into the hands of investment funds. Zeilemaker has illustrated the severity of this situation by pointing to the fact that when Covid-19 hit Spain in March 2020, most nursing home operators simply remained silent for weeks about the circumstances in these homes. When shortly after the military started disinfecting retirement homes, soldiers were reported to have found not only seriously ill people, but also dead people lying unattended in their beds.Footnote 164
We shall come back to this disaster in the Spanish nursing homes for the elderly in the next Chap. 6. (Cf. Sect. 184.108.40.206.2.)
Obviously, Greece is known to have been among the countries hit the hardest by the financial crisis of 2008. According to Zeilemaker, Greece became because of this subject to a severe austerity program implemented by both the EU and the IMF, resulting in government contributions to the health sector being cut in half, from 16.2 billion EUR, to 8.6 billion EUR between 2009 and 2016. In this period, more than 13,000 physicians and more than 26,000 other healthcare workers were simply fired. 54 of the country’s 137 hospitals were closed, and the budget for the other hospitals was reduced by 40%. Between 2011 and 2016, on a population of 11 million Greeks, more than 3 million found themselves completely outside the scope of any health insurance protection. According to Zeilemaker, the message “Austerity kills,” was painted on a wall in the Athenian city centre. At a time when entrepreneurs still received substantial government support in Greece, workers and civil servants were asked to give up half of their wages.Footnote 165
Notwithstanding outstanding official figures on both the Covid-19 contamination and death cases, the real impact of Covid-19 in Greece remains unclear. Upon the arrival of Covid-19 in Greece, the country completely locked down, but testing in remained minimal because of a lack of testing material. Results were often delayed or simply not provided. It is therefore assumed that the official (and very low; cf. Sect. 220.127.116.11.2.) Covid-19 contamination numbers may be of a merely symbolic nature. In private clinics, on the other hand, there were enough Covid-19 tests available for those who could afford them. The Greek neoliberal government even made 30 million EUR available for testing in private hospitals alone. The same government also increased the reimbursement for the use of intensive care beds in private clinics from 800 to 1600 euros per day. In the meantime, state hospitals did not receive any testing material at all.Footnote 166
According to Zeilemaker, not only southern European countries suffer from a broken healthcare system. In Germany as well, trade unions, professionals and patient associations have been reporting nursing staff shortages going back to 2008. Against the background of a general decline in healthcare, nursing staff was believed to have been reduced by approximately 50,000 staff members. This also implied that the number of patients per care provider increased and working conditions deteriorated, all due to an increasing shortage of nurses. After the outbreak of Covid-19, Germany also faced a shortage of protective gear and testing equipment.Footnote 167 (Cf. Sect. 18.104.22.168.3.)
Zeilemaker, furthermore, pointed out that, under pressure from the same EU, also Ireland became the victim of severe cuts in healthcare during the past decade. In reaction to the Covid-19 outbreak, the Irish state simply decided to nationalize private clinics, following a similar example of Spain, in order to make sure that a minimum of healthcare would still be provided.Footnote 168
Foulon has pointed to the fact that Belgium’s healthcare system has long been well regarded. However, based on several health indicators from 2015, this does not appear to be the case (anymore). According to Foulon, the statistics speak for themselves. E.g., mortality within 30 days of hospital admission after a heart attack or stroke is in Belgium above the European average. Belgium also has less than average nurses per hospitalized patient. Belgium is, moreover, characterized by a high rate of suicides and an alarming use of antidepressants, both factors indicating that the situation in Belgium is not as rosy as people are made to believe. Note a telling statistic: the average life expectancy at birth in Belgium is also below the European average.Footnote 169
Foulon has, furthermore, pointed to the fact that the proportion of care that patients have to pay themselves (= the so-called “patient contribution”) is in Belgium quite high compared to other European countries, while the intended health effect of this co-payment system, namely to reduce overconsumption, is small. According to Foulon, the latter is due to the overlooked fact that overconsumption often originates with the healthcare provider, and not with the patient. The Belgian healthcare system also lacks all openness about the quality of healthcare providers and hospitals to guide healthcare choices.Footnote 170
A recent element that has been detrimental in the development of European healthcare in general and the one of Belgium in particular, has been the rising costs. Both countries that based their healthcare system on private insurance, such as Switzerland, as countries which have resorted to collective health insurance and health insurance funds, such as Belgium, have been subjected to this increase. While this phenomenon is often attributed to the ageing population in European countries, this is only true to a limited extent. The real causes for the rising costs of healthcare all over Europe, are new treatments and the use of new medicines.Footnote 171 According to Foulon, also regarding drug pricing, there is a clear lack of transparency. E.g., pharmaceutical companies that bring a new drug to market can freely determine its price as long as the patent is running. The cost price of some innovative drugs is hereby in most cases not proportional to the development cost.Footnote 172
A further element of the Belgian situation that, still in the opinion of Foulon, needs to be reconsidered is how the government determines the budget reserved for healthcare. Often budgetary works start from the existing expenditure of preceding years to which 1% is simply added or subtracted. For Foulon, this system does not work properly. There should be an open societal debate about the size of this government budget, where the priorities should lie and where exactly savings can be made if necessary.Footnote 173
22.214.171.124.5 Some Specific Facts and Opinions on the Impact of the Austerity Policy in the Healthcare Sector of the United Kingdom, as Assessed by Viens
As reminded by Viens, neoliberal economic policy is based on the idea of perpetual economic growth,Footnote 174 implying that austerity measures resorted to in times of economic difficulty (mainly by cutting on social expenditure), are explained as a natural response that has to be put in place for the economy to recover. According to this author, this neoliberal viewpoint has been clearly showing in much of the policies of the Conservative government(s) in the United Kingdom during the past decade(s).Footnote 175
Still according to Viens, while the pervasiveness of the ideology of economic neoliberalism, as adhered to by the governments of many Western countries, makes a resort to austerity seem completely inevitable, it is nevertheless but a political choice guided by a given political morality, or, to phrase it in another manner, by a given ideology.Footnote 176 For Viens, the conclusion from this insight is clear: neoliberal austerity is a huge policy failure, and its consequences are totally morally reprehensible, especially because of its direct and indirect detrimental effects on a wide variety of social issues, amongst which health and health equity. This is, moreover, not only true in the United Kingdom itself, but for the whole capitalist world.Footnote 177
The pains caused by neoliberal austerity are, simply put, not distributed in a fair manner throughout society, and not even in such a manner that the burden of such austerity would fall mostly on those best able to bear it, namely the rich. Instead, in countries, such as the United Kingdom, that have suffered the most from the doctrines of economic neoliberalism during the past decades, it is precisely the economically and socially most deprived who have suffered the most. This happened after the financial crisis of 2008, but, as Viens shows, this kind of policymaking can be traced back much earlier in UK history, all the way back to the neoliberal governments of ThatcherFootnote 178 that had stifled economic growth, cut tax revenues (to the benefit of the rich), increased public deficits and, on health care, cut funding for the National Health Service.Footnote 179
Needless to say that, even before the outbreak of Covid-19, the impact of austerity in the United Kingdom on health and health equity has been devastating. According to Viens, the following effects, amongst others, of neoliberal healthcare policy have occurred: (1) mortality rates have risen (including so-called “preventable deaths”), (2) life expectancy has stagnated, (3) social and health care in general became grossly underfunded, (4) child and pensioner poverty has been dramatically on the rise, (5) the number of homeless people has increased dramatically, and (6) dependence on food banks has increased drastically.Footnote 180 Moreover, the effects of both past cuts in social expenditure and current public deficits continue to have a negative impact on health and well-being.Footnote 181
While the cuts in social expenditure are a clear illustration of the characteristics of the neoliberal determinants for health and health (in)equity, the neoliberal political approach in the United Kingdom, even beyond these cuts, has taken a significant and extremely worrying toll on the country’s health systems. Neoliberal agendas for cutting taxes (to the benefit of the rich) drive up public debt and deficits even further which, under the logic of economic neoliberalism, then justifies the need for more austerity, as well as the need for charging user fees (for public services that in the past were for free) or for the acceleration of privatization programmes, with the poor at the same time continuously being told that the United Kingdom can no longer afford health and social programmes. According to Viens these are all factors designed to strengthen the insidious political morality hidden under the ideology of economic neoliberalism.Footnote 182
126.96.36.199 Provisional Conclusions
It is clear from the foregoing that the catastrophic EU neoliberal austerity measures of the past decade have dangerously weakened healthcare in Europe. Even after the financial crisis of 2008, much to the surprise of a wide variety of academics and left-wing politicians who believed that the events of 2008 would make people think and look for other solutions than those presented by crisis-prone neoliberalism,Footnote 183 neoliberal policy has, regretfully, been further propagated.Footnote 184 Because of Covid-19, the populations of entire countries have now been able to experience how they are all paying the price for this politically and economically elitist and morally wrong socio-economic model;Footnote 185 perhaps this time, it will make people think if they still want to adhere to it.Footnote 186
Nevertheless, no matter how bad the crises caused by economic neoliberalism may become, there seems to remain great disinterest for socio-economic themes that among the populations of Western countries. Just as the 2008 financial crisis failed to bring about such a sufficient drive for change, it cannot be assumed that post Covid-19, the neoliberal socio-economic model will be sufficiently questioned.
We shall come back to this under Chap. 11.
5.2.2 Looking for an Equilibrium Between Marketization and Governance Aid in the United States
188.8.131.52 Healthcare in the United States Before 2008
In the 1980s, one of the biggest, earliest exercises in implementing the ideology of economic neoliberalism concerned so-called “Reaganomics,” especially President Reagan’s 1981 “Program for Economic Recovery” and “the Economic Recovery Tax Act”. Under these socioeconomic policies, the Reagan administration reduced both government spending and regulation, while at the same time cutting taxes to the benefit of (big) corporations and the rich.Footnote 187
Since this early-day implementation of neoliberal policies as of the 1980s, one of the sectors affected most by neoliberal ideology has undoubtedly been the healthcare sector. More specifically, under Reagan-era policies, the US healthcare industry was largely marketized and partly privatized, and this is how it has remained ever since.Footnote 188
This marketization of healthcare in the United States was aimed at giving people the freedom for choosing their own physicians, while at the same time accomplishing shorter waiting times, as well as (purportedly) better health care facilities. In reality, marketized healthcare soon left 15% of the Americans without healthcare. It also resulted in higher costs for individuals and households and created huge inequalities between rich and poor regarding access and quality of health care.Footnote 189
According to some, since the Reagan era, the United States, has become of the few industrialized countries in the world that almost completely relies on private, largely investor-owned corporations for providing a wide variety of healthcare services. The United States, in this manner, became one of the first industrialized countries that started treating healthcare like any other free market commodity, instead of as a public or social service.Footnote 190 Through this, healthcare in the United States largely started functioning in accordance with free market principles.Footnote 191
As a first consequence of subjecting healthcare to Reaganomics, healthcare no longer got distributed in accordance with medical need, but rather in accordance with financial capability of the patient who moreover got gradually referred to as “the consumer of health care services”. This, obviously, created a fundamental mismatch between medical need on one side and actual access to and availability of medical treatment on the other side. This policy approach, moreover, implied that, in many cases, those with the greatest need of medical care were at the same time those least able to pay for it.Footnote 192
In the opinion of Sahoo, although free markets may be good for some things, they are not a good method for distributing healthcare. The simple truth is that businesses’ first aim is to increase revenues and maximize profits (to the benefit of their shareholders).Footnote 193 A symptom of this fact is that corporate hospitals in the United States, e.g., often advertise their services. This is not a coincidence, but rather because, like all businesses, corporatized hospitals want more, not fewer customers—but only if the latter can pay their increasing bills. According to this author, submitting healthcare to these principles has, obviously, resulted in a completely unfair—and even unethical—healthcare distribution: As an example the author points to the fact that, especially before the enactment of the ACA (cf. Sect. 184.108.40.206.), people who are wealthy, or well insured, are in the United States likely to get an MRI (i.e., a “Magnetic resonance imaging”) upon request, even if they do not need it, whereas those without money and insurance, are as likely not to get an MRI that they actually do need.Footnote 194
Since the United States first started to subject health care to free market methods, in practice, most Americans under 65 who have a (good) job (still) receive (tax-free) health insurance from their employers. Employers usually choose the insurance companies, as well as the health insurance programmes that will be provided to their employees. Employers usually have to pay a part of the insurance premiums. The employees (i.e., the insured) in most cases do not have much say in this, but are still expected to pay their own share of the premiums, based on a “take-it-or-leave-it” approach. Furthermore, offering such insurance benefits happens on a strictly voluntary basis as there is no legal duty to do so, as a further consequence of which not all employers want to commit to this “best practice”. When they do, benefits may in some cases be incomplete as employers want to keep the costs for insuring their personnel within (in their eyes) reasonable boundaries. One evolution in this regard has been that, in order to cut expenses, employers started capping the contributions that they are willing to pay themselves, implying that the burden of rising insurance costs in most cases falls on the employees themselves. The latter, in turn, may be inclined to turn down such health benefits in cases that they cannot afford to pay their own (increasing) part of the insurance premiums.Footnote 195
At the other side of the contractual spectrum, the private insurers with whom employers conclude insurance contracts are usually for-profit companies owned by private investors who are after a return on their investment. As private insurers try to keep premiums low and profits high by limiting risks, this business model may have serious detrimental effect on the access to medical services. In reality, the best way for private insurers to remain competitive on the private market, is to not insure high-risk patients. This practice of avoiding high-risk people as clients has been referred to as “cherry picking” or “cream skimming”, and is often rationalized by claiming that this is the only method for limiting the costs of insuring other illnesses. As a consequence, a lot of the insurance programs offered by employers to their employees exclude (rare) illnesses (both for the insured employee himself as for his dependents) for which the treatment requires expensive medical services, such as a bone marrow transplantation. Moreover, the whole insurance system, including the choice for the insurance programme actually offered, is in general based on marketing, bookkeeping and taxation practices, under which a substantial part of the actual costs for medical treatment is still passed on to patients under the form of deductibles, co-payments and denied claims.Footnote 196 This brought Angell to the observation that one even could have the impression that—certainly before the introduction of the ACA—the United States actually had/has a healthcare system based on avoiding that (too) sick people get access to it.Footnote 197
The American private insurance-based health care system also greatly increases administrative overhead costs, because a system based on private insurers requires a lot of paperwork between all contracting parties concerned. Private insurers also need creative marketing in order to select and attract the wealthy and healthy as their clients, and to avoid the poor and ill.Footnote 198
220.127.116.11.1 General Characteristics of Medicare
Before the presidency of Barack Obama, the best-known and probably most popular part of the American healthcare system has been the government-managed system for Americans over the age of 65 years, called “Medicare”.
On its own website,Footnote 199 Medicare is described as the federal health insurance programme for:
People who are 65 years of age or older.
Certain young people with disabilities.
People with End-Stage Renal Disease (i.e., permanent kidney failure requiring dialysis or organ transplantation, also known as “ESRD”).
When it was first installed, Medicare clearly answered a practical need: as explained in the previous Sect. 18.104.22.168, for people under 65 who are still working, it is assumed that their employer will provide for an adequate private insurance. In this sense, Medicare was intended as an alternative system for people who are no longer working and in most cases are not sufficiently well-off to be able to finance private insurance themselves, while on the other hand, the age of 65 is the age from which medical care becomes increasingly necessary.
Although managed by the federal government, Medicare is still, in essence, a single-payer health coverage programme that is subjected to free market logic. It is at the same time considered to be one of the most efficient parts of the American healthcare system, with estimated government overhead of only about 2%. The system includes as good as everyone over the age of 65. It also grants everyone who subscribes to Medicare the full range of benefits offered, as the system cannot be manipulated to avoid the high-risk or chronically ill.Footnote 200
22.214.171.124.2 A Brief History of Medicare
In the United States, the discussion about installing a national health insurance programme open for all Americans already dates back to the presidency of Theodore (Teddy) Roosevelt. When Roosevelt, who had been president from 1901 until 1909, had again run for president in 1912, his election manifesto had included general health insurance. As Roosevelt did not get re-elected, the idea of a general, national health care program for all Americans would again be buried, until it would be picked up by President Harry S. Truman (president from 1945 until 1953).Footnote 201 More precisely, on 19 November 1945, just seven months into his presidency, President Truman sent a message to the American Congress in which he called for the creation of a national health insurance fund that would be open for all Americans. The plan that President Truman proposed was to provide health insurance for individuals and would cover all typical medical expenses, such as visits to or from physicians, hospital visits, laboratory services, dental care and nursing care.Footnote 202 Although Truman worked hard to pass a bill for implementing his plan during his time in office, he regretfully did not succeed.Footnote 203
President John F. Kennedy was the next president (from 1961 until 1963) to make his own failed attempt to establish a national health care programme, although his plan was less ambitious and remained limited to senior Americans. Kennedy launched this proposal after it had appeared from a national study that 56% of the American people over 65 had no health insurance at all.Footnote 204
But it was not before 1966 that Medicare finally took effect. This occurred after President Lyndon B. Johnson (1963–1969) on 30 July 1965 signed the “Medicare law” or “H.R. 6675”, in Independence, Missouri. During the signing ceremony, former President Truman was presented with the very first Medicare card, and his wife Bess with the second. In 1965, the first budget for Medicare amounted to approximately USD 10 billion.Footnote 205
Since then, of course, numerous changes have been made to Medicare.Footnote 206
The introduction in 1965 of Medicare (for elderly American residents) and Medicaid (for some low-income American residents) managed to reduce the percentage of uninsured people by about half. Despite initial expectations that a sequence of additional reforms to the Medicare law would gradually result in a real “universal health system” (UHC), the election of President Reagan in 1980 and the neoliberal agenda that his presidency pushed through, would completely destroy these hopes. Instead, Reagan’s health policy has even been qualified as foreshadowing the attempts of President Trump to completely privatise Medicare and Medicaid, cut services in low-income communities, and generally deregulate health and medical care provision. Under Reagan himself, a mix of government spending cuts and pro-free market policies was touted as the miracle cure for what was referred to as medical inflation. In reality, healthcare spending would increase during the Reagan presidency, with a variety of treatments becoming inaccessible for the poor, while the American health care system in general started at the same time to drastically diverge from that of other high-income countries that managed to uphold the principles of the welfare state model to a much larger extent.Footnote 207
President Clinton’s (1993–2001) attempt to expand health insurance coverage in 1994 again failed. This would stifle any further progress regarding the creation of a universal health care system, until the election of President Obama in 2008. Under Obama’s presidency, the Democrats finally succeeded, albeit only after fierce discussions in Congress and under harsh resistance from Republican legislators, in passing the so-called “ACA” (cf. Sect. 126.96.36.199.).Footnote 208
Over time, Medicare has proved successful and became one of the cornerstones of American health policy, while the main problem remained that it was only accessible to people aged 65 and older (in addition to certain other people with specific diseases or disabilities). Pleas for a universally accessible federal healthcare system have been made ever since, but this was met with stubborn resistance from conservative politicians (especially Republicans).
Nevertheless, at the beginning of 2019, it was reported that there were 60.6 million people receiving health coverage through Medicare. Medicare spending was reported to have amounted to USD 705.9 billion in 2017, which equalled about 20% of total healthcare spending in the United States in that year.Footnote 209 Although Medicare spending projections are said to fluctuate over time, in 2018, Medicare spending was projected to account for 18% of total federal spending in the year 2018, up from 15% in 2017.Footnote 210 Per capita Medicare spending was also reported to have grown, albeit at a much slower pace in recent years, averaging 1.5% between 2010 and 2017, as opposed to 7.3% between 2000 and 2007. This per capita spending was however expected to grow faster in the next decade, but not as fast as during the first decade of the twenty-first century.Footnote 211 In February 2019, there were approximately 60.6 million people enrolled under Medicare. This implied a huge increase compared to the year 2014, when fewer than 50 million people had been enrolled. One of the main reasons for this huge increase has been that people belonging to the baby boom-generation started to turn 65.Footnote 212
However, Medicare is by no means perfect and has, moreover, suffered from changes brought about by the Bush and Trump administrations. E.g., by 2008, out-of-pocket costs for Medicare beneficiaries were significant and still rising. In addition, because Medicare payments are made in a market-based private insurance system, it experiences many of the inflationary forces that affect private insurance in general. Regarding health insurances, these e.g. concern profit-maximising physicians working in (large, for-profit) hospitals or in physician groups. Moreover, physicians’ fees remain structured in such a manner that highly paid specialists are rewarded for performing as many expensive procedures as possible. Because of this, inflation endured by the Medicare system is said to be as high as other private insurance forms, and equally unsustainable.Footnote 213
Medicaid (“Title XIX of the Social Security Act”) was created in 1965, along with the Medicare programme (“Title XVIII”) itself, but with a different purpose.Footnote 214
On the one hand, the Medicare program was set up as a federally funded and managed health insurance program for retirees (i.e., people over the age of 65), disabled workers and their spouses and dependents. On the other hand, Medicaid was set up as a joint federal-state program through which states, the District of Columbia and the territories, have access to federal financial means intended for sharing the costs for providing health and long-term care services to low-income families and individuals that are federally eligible for this kind of support.Footnote 215 Medicaid was, phrased differently, intended to expand access to regular health care for low-income individuals and families. The underlying idea was that the federal government would grant money to states to cover half or more of the costs of providing medical and health care services to these eligible beneficiaries. The programme was at the same time designed to grant states considerable leeway in designing their more specific medical assistance programmes.Footnote 216 The Medicaid programme accomplishes these goals by combining federal mandates with options chosen by the states themselves as to who is eligible for receiving services and for defining what services can be offered.Footnote 217
Over the past decades, there have, obviously, been many changes to the Medicaid law as well. These include changes regarding eligibility, benefits, payment arrangements and a wide variety of other administrative details. The effect of these alterations—in combination with states’ own decisions about the scope of their programmes—has been that Medicaid got expanded beyond its original focus on providing primarily acute care services to those eligible for public assistance. As a result, Medicaid has also become the primary public funder of long-term care for people suffering from disabilities. Despite many such changes in the federal law, the fundamental organisational nature of the programme, namely its relationship between the federal government providing financial assistance and the states defining eligibility, has not changed substantially.Footnote 218
By September 2018, nearly 73 million people had been enrolled in Medicaid. By 2017, the programme was reported to account for 17% of national healthcare spending.Footnote 219 Medicaid hereby covers the most common forms of medical and health care. Medicaid is said to cover at least the same health care services as Medicare, besides some other services targeted at people suffering from disabilities that Medicare does not cover. Medicaid can also pay Medicare premiums, deductibles and co-payments for people who are enrolled under both programmes. A separate section of Medicaid covers long-term nursing home care. The income and asset rules for these long-term home care programs are usually more relaxed than those applying to regular Medicare programs.Footnote 220
188.8.131.52.1 Enactment of the ACA/Obamacare
To address some of the major shortcomings of the American healthcare system, the Obama administration developed the so-called “Obamacare” legislation in 2010.Footnote 221 This led to the “Patient Protection and Affordable Care Act” (generally abbreviated as “ACA”) of 2010, commonly known as “Obamacare”, a federal law that aimed to (1) extend health coverage to most Americans, (2) reduce costs, and (3) improve the quality of already existing health care systems. As of 1 January 2014, most US citizens are required to have a basic level of health coverage under the said ACA.Footnote 222
The main goal of President Barack Obama’s reform initiative was to make healthcare more affordable for every American citizen, especially by reducing costs for those who could not afford them. A second goal of the ACA was to ensure universal access to medical care. Before the ACA, insurance companies could, e.g., exclude people with pre-existing medical conditions; the ACA aimed to end these exclusionary practices.Footnote 223 Also before the ACA, poor people—often those most in need of health care—sometimes had to abstain from getting insured, or settle for an insurance policy that did not cover a pre-existing medical condition. Because these people could in many cases not afford regular doctor’s visits as well, they often showed up in hospital emergency rooms and, in many cases, could not pay for the cost of the treatments they needed. In order to deal with this huge societal problem, the ACA required everyone to have health insurance, or pay a tax penalty. At the same time, the ACA aimed to make health insurance costs more affordable for people with low incomes, based upon programmes for subsidising these costs.Footnote 224 These subsidies were mainly made available through “premium tax credits” that reduced costs for households whose income ranged between 100% and 400% of the official federal poverty level.Footnote 225 One of the further objectives of the ACA was to curb the rising costs of health care in general.Footnote 226
Under the ACA, Medicaid was expanded to people earning up to 138% of the official federal poverty level.Footnote 227 However, by 2020, 14 states had chosen not to expand Medicaid, in this manner limiting access for their residents. These states were mostly Southern states.Footnote 228
In order to ensure that insurance companies could afford to grant insurance to people with pre-existing medical conditions, the ACA also aimed to ensure that healthy people would participate as well, by initially requiring everyone to take health insurance for at least nine of every 12 months, or, by means of a penalty for non-compliance, to face a tax (the so-called “mandate”). In this manner, it was ensured that the risk pools of the private insurers would be sufficiently diversified to amount to sound business models. However, in December 2017, the US Congress repealed this penalty, effective 2019, through the so-called “Tax Cuts and Jobs Act”. Although, since that time, the ACA mandate no longer applies, some other taxes related to Obamacare still remained in effect.Footnote 229 Although by repealing the mandate, the US Congress has cut one of the legs under the ACA, people can still benefit from the parts of the ACA that are still in force.Footnote 230 E.g., the so-called “health insurance exchanges”—considered of being the most important part of the ACA—have remained open for enrolment between 1 November and 15 December of each year.Footnote 231
Under the presidency of Donald Trump, the American Congress made some further major changes to Obamacare (or tried to do so). Still, the ACA is believed to stand strong.Footnote 232 Perhaps this is the reason why, in June 2020, the Trump administration requested the Supreme Court to simply overturn Obamacare. The Supreme Court’s decision on the matter was on 15 May 2021 not yet announced.Footnote 233
184.108.40.206.2 Main Impact of Obamacare on the US Healthcare System
The ACA is widely believed to have drastically changed the American healthcare system, especially by extending health insurance to 20 million Americans and in this manner having saved numerous lives.Footnote 234
Starting in 2010, the ACA led to one of the largest increases of health care coverage in American history. In 2010, 16% of all Americans were reported to be uninsured; in 2016, this number was already down to 9%. An estimated 20 million additional Americans are reported to have gained health insurance since the ACA went into effect. This, moreover, happened across all income levels and to the benefit of both children and adults. The ACA also reduced coverage disparities among racial and ethnic groups.Footnote 235
Two of the ACA’s largest coverage expansion provisions came into effect in 2014: the expansion of “Medicaid” on one side, and the launch of the “health insurance marketplaces for private coverage” on the other side. By 2020, these two programmes together were reported to cover tens of millions of Americans. In 2019, considered on a national level, 11.4 million people had enrolled in coverage plans through the ACA health insurance marketplaces. By 2020, the Medicaid expansion covered an additional 12.7 million people who had become eligible through the ACA for the first time.Footnote 236
The ACA also aimed at ending the practice of “medical underwriting”. This practice, that was common before the enactment of the ACA, implied that private insurers routinely set prices and insurance conditions regarding the exclusion of benefits, and denied coverage to people based on their health status. On a practical level, this had as a result that, to the extent that nearly one in two non-elderly adults in the United States suffers from a pre-existing medical condition, half of the adult population was discriminated against on the basis of their medical history if they sought insurance on their own.Footnote 237
Evidence has shown that better affordability has effectively translated into more and better access to medical care services. In short, according to Rapfogel et al., the ACA has ensured that millions of Americans obtained access to insurance coverage. This programme was not only lifesaving, but lifechanging for millions of people who were previously uninsured, had lower incomes, or had pre-existing medical conditions.Footnote 238
Yet major gaps in insurance coverage and access remained: at the time of Donald Trump’s election, 28 million people were still uninsured, a fact that has been held responsible for an estimated 37,000 premature deaths in 2017. Moreover, the ACA also failed to stop a growing trend of “underinsurance” (i.e., insurance coverage with such high cost-sharing conditions that enrolees are still unable to pay off medical care). As a result, in 2016, still more than one-third of adults under the age of 65 (including 25% of those insured) suffered problems with medical bills or medical debt, and a similar proportion of the American people reported waiving necessary medical care because of the costs involved. Meanwhile, bankruptcies due in whole, or in part, to illness remained commonplace even after the ACA had been implemented.Footnote 239
220.127.116.11 The General Outlook of the US Hospital Sector
In the 1980s, hospitals in the United States were still largely not-for-profit institutions that generally operate in accordance with a set of professional and ethical standards that restrict their behaviour for the benefit of patients.Footnote 240 The hospital sector in the United States had not yet been subject to an as far-reaching degree of “corporatisation” as the nursing home sector.
By 2021, most hospitals in the United States were still of a non-profit nature. Their (in most cases) tax-exempt status generally requires them to offer community-based health programmes, and to assist all patients, regardless of their financial status.Footnote 241 Of the approximately 5200 non-federal hospitals, about 3000 belong to this group of not-for-profit hospitals.Footnote 242 These non-profit hospitals mainly serve people who need ambulatory surgical care, inpatient surgery, or other usual hospital services.Footnote 243 The concentration of not-for-profit hospitals varies by geographic location. In general, there are more not-for-profit hospitals in the West, Northeast, Southwest and Midwest compared to the South. While for-profit hospitals have to put the interest of their shareholders and investors first, a not-for-profit institution can, by contrast, put the interests of its patients first.Footnote 244
The large number of not-for-profit hospitals, which are considered charitable by the IRS (under the condition that they meet the guidelines for non-profit organisations, such as providing certain benefits to the community), do not pay federal income tax or state and local property tax. Moreover, in keeping with their charitable purpose and community focus, non-profit hospitals are often affiliated with a particular religious denomination.Footnote 245 As one would expect, non-profit hospitals, on average, provide more unrelated care than for-profit hospitals. Contrary to what one might expect, however, for-profit hospitals also tend to serve lower-income populations, while not-for-profit hospitals tend to be located in communities with less poverty, higher incomes and fewer uninsured patients.Footnote 246
On the other hand, for-profit hospitals are more specialised in the latest medical technologies and are thus often better suited for advanced care. E.g., in Florida, Nevada and Texas, for-profit hospitals make up more than 50% of the facilities.Footnote 247 For-profit hospitals are usually owned by private investors or by a publicly traded company.Footnote 248 In many of these for-profit hospitals, private equity investors resort to economies of scale for increasing efficiency. This has led to corporate chains buying up multiple hospitals in order to consolidate back-office functions, such as sending out bills and accounting. On the downside, such investor-owned hospitals show a tendency of offering a narrower range of medical services and of sending patients with particular or complex medical needs to non-profit facilities that still provide such non-profitable care. E.g., many for-profit hospitals no longer offer neo-natal intensive care or perform organ transplants, as such services are too expensive and do not generate profits. Another problem reported regarding to for-profit hospitals is that they do not always succeed in attaining the level of required efficiency; in such cases, they will often simply dispose of facilities when these have become too leveraged without generating the aspired for profits. Fraudulent billing has been indicated as another major problem, as for-profit hospitals may try to make a profit by overbilling third payers such as Medicare or private insurers.Footnote 249 (Illegal) practices that have been reported in the past, include the systematic referral of patients with diseases that are not profitable enough, besides exploiting Medicare loopholes for making claims for unearned payments in the hundreds of millions.Footnote 250
Like all capitalist businesses, investor-owned hospitals, moreover, aim to maximise profits and minimise costs. However, such strategies that increase profitability often degrade efficiency and quality. In addition, managers of for-profit institutions in many cases are mostly concerned with reaping princely rewards, diverting money from healthcare services themselves. These huge CEO incomes explain part, but not all, of the high administrative costs which in investor-owned healthcare companies are usually much higher than in not-for-private institutions. This implies that investor-owned hospitals may spend much less on nursing than not-for-profit hospitals, while their administrative costs are generally higher (presumably due to their closer attention to financial details).Footnote 251
According to Woolhandler and Himmelstein, even for honest for-profit institutions, the careful selection of lucrative patients and medical services is the key to success, while meeting the general needs of the community may often pose a threat to profitability.Footnote 252 In recent years, encouraged by the ACA imposed shift to value-based purchasing, large health institutions have increasingly bought up independent hospitals and physician practices, in order to use their thus acquired monopoly power to negotiate higher service rates. However, as a result of such large mergers and acquisitions, hospital profits have risen, while the availability of primary care and other services has declined, promised quality improvements have not materialized, and overall patient experience has deteriorated.Footnote 253
In February 2021, investor-owned for-profit healthcare companies were reported to employ tens of thousands of doctors. The market share of for-profit hospitals, moreover, increased by 8 percentage points over the past 15 years. By February 2021, most outpatient haemodialysis centres, nursing homes, psychiatric inpatient facilities, health maintenance organisations, and even hospices in the United States were reported to be for-profit organisations.Footnote 254
Meanwhile, data on the clinical and cost implications of private investor ownership are worrying. E.g., mortality rates in for-profit dialysis facilities are reported to be higher than in not-for-profit facilities, with the differences implying that for-profit ownership is associated with up to 3800 additional deaths per year in the United States. Research also suggests that quality of care is, in general, inferior in for-profit nursing homes and home health agencies, and that for-profit hospitals still have a tendency of shunning unprofitable patients. Venture capital and private equity firms have been reported of forcing the dermatologists they employ to increase their income by promoting (unnecessary) cosmetic procedures, introducing billing practices that saddle emergency patients with huge and unexpected bills, and closing urban hospitals sitting on valuable real estate.Footnote 255
18.104.22.168 Further Decline of the Healthcare Sector Under President Donald Trump
22.214.171.124.1 General Assessment of Trump’s Healthcare Policy
At the time of President Donald Trump’s inauguration, in January 2017, the health of the American population was reported to be in a downward spiral for the first time in almost a century. Average life expectancy in the United States had, more precisely, fallen from 78.9 years to 78.7 years between 2014 and 2018, a time period that included the first 3-year drop in life expectancy since World War I and the flu pandemic of 1918.Footnote 256 Health progress in the United States had thus stalled during the longest period of sustained economic expansion (i.e., between June 2009 and March 2020) in American history, which implied an unprecedented disconnect between the health of the general population and GDP growth.Footnote 257
For much of its history, the United States has been characterized by a far more even distribution of income and wealth than most of Europe. Since the 1980s, however, inequality between socioeconomic classes has widened, as high-paying manufacturing jobs disappeared in the wake of trade liberalization and the resulting delocalization of industries, trade unions had been stifled, and tax and social policies increasingly started favouring the rich to the detriment of the rest of society. Despite a booming stock market and low unemployment rates, many people in the United States were forced into meagre jobs with low pay and no or insufficient (health) benefits. The resulting income inequality, obviously, also increased inequality of access to health care.Footnote 258
Although in the opinion of Woolhandler et al., Donald Trump’s rise to power was driven by a mix of irrational tendencies appealing to man’s dark side, such as racism, nativism and fear of deprivation, his policies themselves were a well thought out, deliberate and intensified attack on both the health and general well-being of people in the United States and elsewhere. (Cf. Sect. 2.1.4.) In the best of neoliberal traditions, one of Trump’s most important legislative achievements, namely a trillion-dollar tax cut for the rich, caused a hole in the American public budget, that then served as a further argument for justifying the cutting in food and housing subsidies that had before in recent history been installed to prevent malnutrition and homelessness for millions of people throughout the United States; as a result, the number of homeless schoolchildren alone increased by 150,000 during the first year of Trump’s presidency.Footnote 259
Between 2002 and 2019, the share of spending on public health in the United States fell from 3.21% to 2.45% (which amounted to about half the share of public health spending in Canada or the United Kingdom). Meanwhile, funding for the “Public Health Emergency Preparedness Programme” (which has been indicated as the main source of federal support for public health emergency capacity at the state and local level) fell by a third. As a result of these funding shortfalls, state and local public health authorities lost 50,000 jobs, which represented a 20% reduction in the front-line workforce for combating epidemics.Footnote 260
Since 2003, the resources, but also the independence and the scientific authority of the Centers for Diseases Control and Prevention (CDC) have been gradually eroded, initially by the instalment of a business model and the resulting departure of experienced scientists from the agency, as well as by a 10% (inflation-adjusted) budget cut. A further recruitment freeze in 2017 simply left hundreds of CDC positions for researchers and officials vacant. In 2018, cutting measures deployed by Trump’s administration went as far as simply transferring the already partially depleted “Strategic National Stockpile” of drugs and medical supplies from the CDC, to the Office of an Assistant Secretary of the Department of Health and Human Services.Footnote 261
In the early years of Trump’s presidency, the public health emergency response capabilities of several other federal agencies were also drastically eroded. In 2018, e.g., the White House scrapped the National Security Council Directorate for Global Health Security and Biodefence, an agency that had been established as recently as 2014 in order to coordinate reactions to the Ebola virus and similar global disasters. Moreover, in 2019, almost half of all scientific leadership positions in federal agencies remained vacant. (Cf. Sect. 126.96.36.199.)Footnote 262
Access to medical care, which—as has been explained in the previous sections—has never been fully adequate in the United States in the first place, continued to shrink even more during the Trump administration. As a result, one million healthcare workers and a large (but undetermined) number of migrant workers at high risk of Covid-19 exposure, were un- or underinsured at the start of the Covid-19 pandemic in February 2020.Footnote 263
In 2017, the Trump administration also halted the Occupational Safety and Health Administration’s nearly completed effort to develop airborne infection control standards for workplaces, which were to be released in October 2017.Footnote 264
All of these problems caused by the policy of the Trump administration during the first years of Trump’s presidency, would be exacerbated even more by the Covid-19 pandemic. Woolhandler et al. have attributed this to the following factors:Footnote 265
An insufficiently coordinated federal leadership led to delayed or inconsistent guidelines for both national and local response.
Due to the dependence on free market forces for the supply of all essential equipment to both prevent (e.g., face masks and protective gear) and treat (e.g., respiration devices) Covid-19, states and hospitals had to compete with each other, and sometimes even with the federal government itself, for acquiring such material.
The Trump administration rejected test kits from the WHO in anticipation of the production of American tests. This obviously hampered both testing itself and testing capability. Other bottlenecks (e.g., insufficient capacity to carry out and analyse diagnostic tests) further delayed the policy response to Covid-19.
Public health authorities were continuously discredited by senior government officials, amongst which the president himself, leading to: (i.) an increasing disregard for scientific expertise, (ii.) misleading public communications, (iii.) official (i.e., originating from President Trump himself, and/or from the US Food and Drug Administration) approval of therapies without any proof of efficacy, (iv.) the promotion of unproven theories about Covid-19, and (v.) President Trump’s refusal to wear a face mask, engage in physical distancing or avoid mass meetings (cf. Sect. 2.5.).
In an unprecedented show of distrust for scientific advice, many states did not follow recommendations provided by the CDC and instead joined multi-state coalitions from April–May 2020 to actively proclaim policies to reopen the economy and schools.
Many people lost their health insurance due to the loss of jobs as a result of the Covid-19 pandemic.
According to Woolhandler et al., the combination of these policy problems caused by the Trump administration and the structural inequalities of the American health care system, have caused that the death and the misery of Covid-19 has fallen most heavily on the following categories: people of colour, workers in low-paid jobs where physical distance was challenging, people in prison, and nursing home residents and others of poor health.Footnote 266
We shall come back to this in Sect. 5.3.2.
188.8.131.52.2 ACA Under Trump
184.108.40.206.2.1 Neoliberal Healthcare Policy of the Trump Administration in General
In 2014, a year before Donald Trump announced his presidential candidacy, one of the most important achievements of his predecessor Barack Obama, the ACA, had been successfully implemented.Footnote 267 (Cf. Sect. 220.127.116.11.) By the time Donald Trump became president in January 2017, as a result of the ACA, 20 million additional American residents had enlisted for new health coverage, although 28 million were still uninsured.Footnote 268
According to Woolhandler et al., it was against this backdrop that President Trump’s health care policy—in essence aimed at limiting health coverage—may at first glance seem like an aberration, more precisely as a diversion from the path to greater health protection. However, still in the opinion of Woolhandler et al., the truth is more complicated: Although Trump’s policies vary from those of several previous administrations, they have in essence picked up with the neoliberal traditions of deregulation, privatisation and austerity (for low-income communities) that had already been established as of the 1980s.Footnote 269 President Donald Trump’s efforts to reform the health sector are, therefore, much closer to the ideological underpinnings of President Ronald Reagan’s neoliberal policies of the 1980s, than to the continuation of the efforts of predecessors, such as Presidents Bill Clinton and Barack Obama, to establish universal health coverage.
18.104.22.168.2.2 Attempts to Repeal the ACA
The debate over abandoning the ACA had already been ongoing before President Trump’s inauguration.Footnote 270 The ACA had, more precisely, never been taken for granted by right-wing elements of the American society. Going back to the architects of American neoliberal thinking, the idea of a universal, public healthcare system was by some even considered an aberration: Under their ideology—and even general life philosophy—everyone must take care of himself, also regarding matters of healthcare (e.g., by resorting to private health insurance, instead of depending on publicly installed health insurance systems). This had, for instance, been the popular line of thought of Ayn Rand, whose influence on the public policy of the Reagan administration had been huge. (Cf. Sect. 2.5.2.) Rand was, in general, completely opposed to the idea of a public insurance system, even though, when she suffered from cancer at a late age because of years of heavy chain smoking, she still approached the public health services herself in order to have her medical treatment financed.Footnote 271
In the assessment of Jones on this apparent contradiction between Rand’s teachings and her actions:Footnote 272
In the simplest terms, Rand discovered at the end of her life that she was only human and in need of help. Rather than starve or drop dead — as she would have let so many others do — she took the help on offer. Rand died in 1982, as her admirer Alan Greenspan had begun putting her ideas into practice in Reagan’s administration, making sure (…) that the system was “more favorable to the creators and entrepreneurs who were more valuable to society,” in his Randian estimation, “than people lower down the ladder of success.” After well over three decades of such policies, we can draw our own conclusions about the results.
But for right-wing America, these were just details that hardly stood in the way of their ongoing aversion to public service systems in general, and public health systems specifically. This aversion to public health insurance focused particularly on the ACA, which to many Republicans had become the nexus of everything that went wrong in the United States. Hence, it is no surprise that, already before the presidency of Donald Trump, US Republicans had repeatedly introduced bills to repeal the ACA, even dating back to President Obama’s own time in office, although the assurance of a veto from the part of President Obama had rendered these past initiatives purely symbolic. It was against this background that (the proposal for) the “American Healthcare Act” (abbreviated as “AHCA”) which the Republicans initiated in March 2017, for the first time posed a real threat to the efforts previously made towards a universal healthcare coverage. E.g., if the AHCA would have become law, it would especially have reduced federal Medicaid expenditure by USD 839 billion over the period of one decade, slashed subsidies to low-income households and individuals for acquiring private insurance, and decreased protections for people with pre-existing medical conditions.Footnote 273 The “Congressional Budget Office” (abbreviated as “CBO”) at the time made an estimation that the enactment of the AHCA would nearly have doubled the number of people without health insurance.Footnote 274
In May 2017, the AHCA successfully passed the American House of Representatives. However, its counterpart bill was defeated by narrow margins in the US Senate after a last-minute defection by some Republican senators. This defection was inspired by the bill’s unpopularity among the American people (as it, e.g., had appeared from a poll that only 17% of the American population was in support of the AHCA), in addition to a wave of “grassroot” opposition: in one dramatic moment, disabled activists had to be dragged out of the offices of Republican members of Congress while still in their wheelchairs.Footnote 275
After the AHCA had failed, the Republicans abandoned their attempts to reform the American healthcare system through one sweeping piece of legislation. Instead, they started resorting to executive action and to small legislative steps with the overall intent of gradually weakening the ACA and bringing forward a more free market-oriented view on healthcare issues.Footnote 276
In 2016, then-presidential candidate Donald Trump had conducted his electoral campaign on a promise that, if elected, he would already start repealing the ACA on his first day in office.Footnote 277 Therefore, on 20 January 2017, the day President Donald Trump effectively took office, he signed his first of several presidential, executive ordersFootnote 278 on health care financing (cf. Table 5.2). This concerned “Executive Order 13,765”, entitled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” a title that clearly made reference to the president’s campaign promises. It was, moreover, the first executive order signed by Trump in his capacity of American president, a fact that further underlined the symbolic importance of the measure. The presidential order not only confirmed the Trump administration’s persistent intention to repeal the ACA,Footnote 279 but, in addition, gave the head of the US Department of Health and Human Services (abbreviated as “HHS”), besides the heads of several other federal agencies, broad powers to grant waivers, deferrals and/or exemptions, all with the overall attempt to delay parts of the ACA that could result in what the Trump administration referred to as “fiscal or regulatory burdens on individuals, providers or government entities”.Footnote 280 The presidential order confirmed Trump’s intent to simply disregard parts of the ACA until it would no longer be law, while at the same time looking ahead to a “free and open market in (…) health care services and health insurance”.Footnote 281
Already in the same year 2017, the Trump administration abruptly put an end to the funding of governmental advertising that encouraged the general public to enrol in ACA programmes.Footnote 282 Starting in 2017, Trump also began subjecting the ACA to relentless—and often factually incorrect—rhetorical downsizing. Woolhandler et al., even made the observation that, during the period from January 2017 until April 2019, President Trump made 662 misleading or outright false statements about the American healthcare system, nearly half of which concerned downsizing the stability of the ACA and/or the need for repealing it as soon as possible.Footnote 283 President Trump additionally shortened the length of enrolment periods for ACA insurance during the years 2017–2018. The president also cut funding for so-called “navigators” (i.e., agencies that assist individuals in navigating the ACA’s complicated enrolment process).Footnote 284
Another central executive order by which President Trump aimed to further “marketize” health insurance coverage concerned the Presidential Executive Order 13,813, which was signed on October 12, 2017.Footnote 285 With this directive to federal agencies that only counted approximately 1100 words, President Trump laid the groundwork for a growing collection of health insurance products, primarily (1) comprehensive plans to be offered through small employer associations, besides (2) a greater reliance on the use of short-term medical coverage. This presidential order was the first attempt since efforts to repeal the ACA had failed in the American Congress, that Trump undertook for implementing his vision on how to rebuild the American health care system by resorting to executive presidential powers. Said Presidential Executive Order 13,813 immediately sparked a debate over whether the measure would fatally undermine the ACA’s marketplaces or imply welcome alternative choices for consumers who had complained about too high insurance premiums and too little choice.Footnote 286
Section 1(b) of Executive Order 13,813, furthermore, provided that of the myriad areas where the prevailing ACA regulations limited both choice and competition, the Trump administration would prioritize three areas for improvement in the near future: (1) association health plans (AHPs), (2) short-term limited-duration insurance (STLDI), and (3) health reimbursement plans (HRAs). Similarly, Executive Order 13,813 stated in its section 1(c) that the Trump administration would continue to focus on promoting competition in healthcare markets and on limiting excessive consolidation in the healthcare system.Footnote 287
One of the basic premises of Executive Order 13,813 was that individuals and small businesses would be allowed (and encouraged) to group together to insure themselves, or to buy a large group health insurance policy. Presumably, this would help small enterprises in overcoming a competitive disadvantage that the ACA had imposed on them, by allowing them to enhance the terms and conditions of their health insurance policies. The Executive Order was also aimed at helping small enterprises in circumventing certain burdensome ACA requirements. Most importantly, the Trump administration saw AHPs as a means of providing more affordable health insurance options for poor Americans, whereby these groups would be able to negotiate better health insurance terms because of a greater ability to spread risk and share administrative costs.Footnote 288
In practice, the Presidential Executive Order 13,813 implied that the Department could grant employers operating in the same industries more flexibility to offer group insurance to their collective employees across state lines, giving them access to a far wider range of insurance policies at lower rates.Footnote 289 Another practical implication of the Presidential Executive Order 13,813 was that, although short-term limited duration insurance (STLDI) was intended to function as transitional coverage—e.g., to the benefit of workers finding themselves between jobs—an increasing number of Americans simply began using this possibility as an alternative to traditional, long-term insurance products.Footnote 290 A final priority area outlined in the Presidential Executive Order 13,813 dealt with so-called Health Reimbursement Arrangements (HRAs). These HRAs were to be distinguished from Health Savings Accounts (HSAs), the latter indicating the most widely promoted products in conservative health policy circles. Basically a payment mechanism for health care, HRAs were in fact tax-advantaged accounts that offered employers an enormous degree of flexibility. In these HRAs, employers had the greatest possibilities for recovering healthcare costs, through a wide range of options, such as choosing eligible expenses, deciding whether or not funds could be carried over, and considering whether or not to fund the accounts in the first place. It was the Trump administration’s further intention to propose even more lenient regulations and/or to revise the manual on how to make it easier for employers to offer such HRAs to their employees.Footnote 291 One of the ultimate ideas behind this all was to expand on the ability for employers to simply give employees an amount of money through such HRAs in order to allow them to buy their own coverage on the market.Footnote 292
But while Presidential Executive Order 13,813 was in fact the Trump administration’s preliminary thinking document on expanding choice on the insurance market, a purportedly much more impactful action on the insurance marketplace was launched through a press release issued by the Department of Health and Human Services (HHS). The referred decision to immediately stop paying cost-sharing reductions (CSRs)Footnote 293 would not only have significant implications for the open enrolment period, but also for the wallets of some of the most vulnerable Americans.Footnote 294
In response to these measures, six renowned physician groups, including the American Academy of Family Physicians expressed their concerns that:Footnote 295
allowing insurers to sell narrow, low-cost health plans likely would cause significant economic harm to women and older, sicker Americans who stand to face higher-cost and fewer insurance options.
By contrast, many health insurers simply remained silent on the measures contained in the Executive Order 13,813. Only a small minority of health insures expressed their concern that the approach laid down in the Executive Order 13,813 could destabilise the whole market.Footnote 296
However, most of the changes brought along by the Presidential Executive Order 13,813 could only be made through further regulations decided upon by federal agencies for its implementation. This implementation process, which includes a period of consulting the public for comments, was expected to take months. This at the time implied that the Presidential Executive Order was unlikely to still affect insurance coverage for 2018, albeit it could lead to major changes as of 2019.Footnote 297
To undermine some of the ACA’s basic requirements that private insurers must cover essential benefits and enrol applicants regardless of health status, the Trump administration also widened certain loopholes that exempted some insurance plans from those rules. These “exempt plans” (cf. Table 5.2) allowed for the charging of lower premiums and for offering meagre coverage (e.g., excluding maternity care). These exempt plans tended to attract more healthy enrolees who expected to need little medical care, soon raising concerns that the exempt plans would ultimately pull such healthy enrolees away from the ACA marketplace, thus destabilising its risk pool. The Trump administration additionally tried to end payment schemes for compensating ACA marketplace insurers for the cost-sharing subsidies they had to offer to eligible low-income enrolees (a move that was however blocked by the courts). Meanwhile, the then Republican-controlled Congress eliminated the ACA penalty for remaining uninsured, i.e. the so-called “mandate”, the part of the legislation that also provided new tax breaks to high-income individuals and enterprises, including pharmaceutical companies.Footnote 298
Fortunately, the Trump administration’s various attacks on the ACA had less effect than had been feared when Trump had initiated his attempts of bringing the ACA down. E.g., the elimination of the individual mandate and the expanded availability of substandard, exempt insurance forms and plans did not end up luring a large amount of people away from the regular ACA marketplaces. This is probably because subsidies continued to make marketplace premiums sufficiently attractive. Nevertheless, all of these deregulatory actions revealed Trump’s underlying, neoliberal agenda of wanting to establish a transformation of healthcare into a free market commodity available to those who can afford the price for it, rather than at establishing a universal health care system, supported and funded by the entire American community, as some of Trump’s predecessors had pursued.Footnote 299
Table 5.2 gives an overview of some examples of executive orders and actions on health-care financing during the Trump era.
22.214.171.124.2.3 Attacks of the Trump Administration on Medicaid
Unfortunately, Trump’s attempts to undermine Medicaid would prove to be far more consequential than his largely failed attempts to repeal the ACA.Footnote 300
In March 2017, government officials reportedly sent a letter to the country’s governors urging them to make alterations to Medicaid that previous governments had banned. These alterations included imposing new out-of-pocket costs for low-income enrolees, besides a requirement that adult enrolees, notwithstanding their disability, should perform work amounting to at least 80 h a month, or else actively seek employment.Footnote 301 In response to this letter by the Trump government, many states applied for and effectively obtained waivers under the Medicaid law, allowing them to implement these alterations. At the same time, however, the work-related requirements were blocked by the courts.Footnote 302
In the period before the Covid-19 pandemic, the Trump administration had already proposed to cut USD 920 billion from Medicaid over the decade to come. The Trump administration was also on the verge of imposing a series of onerous eligibility checks and tightened standards under which older working people with disabilities could still apply for Medicaid support. The Trump administration also hoped to replace indefinite federal funding commitments by far stricter block grants in some states.Footnote 303
During the first 3 years of Donald Trump’s presidency, the number of American residents without coverage increased by 2.3 million, mainly due to a reduction in the Medicaid coverage itself. The trend for coverage of children (<19 years) especially raised concern, to the extent that an additional number of 726,000 children had become uninsured. Even before the outbreak of the Covid-19 pandemic, the CBO had projected a steady increase in the number of uninsured Americans to 35 million by 2027. However, this projection did not consider the millions of Americans who lost their jobs and/or work-related coverage due to the Covid-19 pandemic itself. This implies that, since then, the exact extent of coverage loss has remained unknown.Footnote 304
It was, moreover, feared that even more people would lose their coverage if the US Supreme Court would decide to invalidate the ACA. In a former 2012 decision, the Supreme Court had upheld most of the ACA, reasoning that the US Congress’ constitutional power to tax also allowed it to impose tax-based fines for not purchasing insurance. However, after the US Congress had reduced this fine to USD 0, a federal court in Texas had ruled that the entire ACA was unconstitutional. The case was still on appeal to the US Supreme Court by 15 May 2021, with Trump’s Justice Department having jumped in to support the position of Texas.Footnote 305
126.96.36.199.2.4 Trump’s Healthcare Financing Vision and Some Further Implications of Trump’s Healthcare Marketization Efforts
The further healthcare reform plans of President Trump, as based upon a mixture of conservative and neoliberal ideas, were set out in a little-noticed October 2017 white paper that advocated “choice and competition in health-care markets”, rhetorical cover for a policy aimed at deregulation, privatization, marketization and commercialization of health services.Footnote 306
This White paper was intended to complement Trump’s healthcare budget proposal of 2017.Footnote 307
The White Paper focused on (1) Medicare reforms; (2) Medicaid reforms, and (3) FDA activities. The bulk of the reforms that were proposed in the white paper related to the Medicare and Medicaid programmes.Footnote 308
Regarding Medicare, the Trump administration’s proposals largely focused on (1) aiding beneficiaries who face high out-of-pocket costs, and (2) redirecting incentives to change prescription practices and reimbursement policies.Footnote 309
Trump’s White Paper also called on the government to expand the supply of physicians, hospitals and other healthcare providers, by deregulating the sector (e.g., by relaxing professional licensing standards). The White Paper similarly called for a far-reaching deregulation of the private insurance sector, under the assumption that the exorbitant cost of healthcare in the United Sates was mainly caused by state and federal government requirements (notably the ACA itself) that were criticized for forcing private insurers to provide excessively generous benefits (a neoliberal claim that was hard to comprehend by America’s more than 41 million uninsured residents). To combat this wasteful use of health care, the White Paper suggested to limit benefit packages, increase coverage rates, and encourage patients to seek cheaper providers.Footnote 310 President Trump also wanted to remove subsidies to health insurance companies for helping to pay the out-of-pocket costs of people on low incomes.Footnote 311 Without these subsidies, insurance markets would have quickly unravelled. Insurers responded by saying that these proposals would result in higher premiums and that they might pull out of the insurance exchange markets set up under the ACA if the subsidies were to be ended.Footnote 312
During the following years of Trump’s presidency, the Trump administration gradually advanced its free-market-based agenda, e.g., leading to attempts to use funds from the Veterans Health Administration (abbreviated as “VA”) for purchasing private care programmes for veterans and, even more strikingly, by continuing what has been referred to as “the creeping privatization” of Medicare that had already decades before been initiated by the Reagan administration (in an attempt to mirror British strategies of undermining Britain’s National Health Service, as these strategies had been deployed by Margaret Thatcher in the 1980s). In the end, many American government officials simply hoped to replace Medicare’s uniform benefit guarantee with a (far cheaper) system of vouchers that would allow older enrolees to shop around for private health insurance, with affluent seniors being able to top up their vouchers through their savings in order to buy broader coverage and preferential access to care.Footnote 313 (Cf. Sect. 188.8.131.52, on the underlying ideological ideas that form the basis for such a voucher system.)
As damaging as Trump’s healthcare policies have been, Woolhandler et al., have, in light of the foregoing, assessed them as a merely more aggressive continuation of decades-old neoliberal tendencies towards deregulation and towards deploying free market-based alternatives for public services. Obviously, such a policy approach favours large private organisations and drives up costs for the consumers making use of these marketized services which, ultimately, benefits the shareholders of the private service providers.Footnote 314
To conclude this section, we refer to the following quote from the study from Woolhandler et al., of 2021, titled “Public policy and health in the Trump era”, who have summarized the legacy of the health care policy of the Trump administration in the following catching manner:Footnote 315
The Trump administration’s regulatory rollbacks have increased disease, injury, and death among workers in the USA.
Ironically, the negative effects of the Trump administration’s environmental and occupational rollbacks have taken their largest toll in states whose voters heavily supported President Trump in the 2016 election. By contrast, comparatively progressive states that have maintained robust state-level protections have lessened the effect the rollbacks have had on health (…).
The adverse health effects of the Trump administration’s deregulatory actions are concentrated in the states and demographic groups most affected by rollbacks in health insurance coverage. Therefore, these harms are compounding one another and are widening disparities in health by race, social class, and geography.