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Is market-driven medicine bankrupt?

By Jeffrey Barg

At least since the demise of the Clinton Health Reform Plan in 1994, laissez faire market-driven medicine has dominated the scene. Health insurers have merged with health insurers, which in turn have acquired hospitals, which have merged with other hospitals, which have acquired physician practices and on and on.

Have these corporate entities had any more success than our politicians at containing health care costs while ensuring quality of and access to health care? In a system where the financial incentives are weighted toward providing less care, should we expect that monopolistic and monopsonistic corporations will put patients’ interests ahead of shareholders’ interests?

The sad spectacle of Allegheny’s nine Philadelphia-area hospitals losing tens of millions of dollars a month, jeopardizing tens of thousands of jobs and the care of thousands of patients, should give us pause.

Unpaid suppliers have reportedly cut off Allegheny. Nursing staff levels are dangerously low. Resignations, layoffs, pay cuts, hospital sales and closings, and bankruptcy filings are subjects of speculation in a drone of daily press accounts.

Little attention is paid, however, to a system which has permitted this to happen not once, but twice in Philadelphia over the past few years. (First with Graduate Health System and now with Allegheny.) Little attention is paid to the economic and health impact of a meltdown at Allegheny’s hospitals. And little attention is paid to what might be done—for example, some emergency public financing—to prevent a meltdown.

But in all likelihood, these issues will only be addressed by the final arbiter of laissez faire capitalism: bankruptcy court.

Perhaps it is time to consider if there is not a better way.

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