Just before COVID hit, the influential German neo-liberal lobby organisation Bertelsmann Foundation (yes, the international publishing corporation) launched a campaign to radically reduce the number of hospitals in Germany and “Americanise” them and maximise profits. The campaign has disappeared – for the time being.
Roger Steer is a Management Consultant working in the Healthcare sector as well as an Advisor to Local authorities scrutinising NHS plans. He is based in France but active in the UK.
At first sight this appears as a preposterous suggestion. After all American Healthcare is renowned for being not only outrageously expensive but also socially divisive and excludes cover to the people who need it most. Inputs are more expensive, outputs worse and the processes overly complex and costly.
Why then is it possible to even consider the possibility that European healthcare may be slipping down a slope with that destination as a possibility?
Following the neo-liberal textbook described so well by Nancy McClean in “Democracy in Chains” nobody leads a campaign advocating the achievement of the clear objective of the Americanisation of healthcare in Europe. Simply put no one would vote for it. This is why other means are found for this task involving tapping in to the desires of professionals for more pay and prestige and the desire of politicians to answers to seemingly unsolvable problems of meeting the demands for more, better healthcare but without raising taxes.
Persuasion of healthcare professionals: America has the highest paid medical staff in the world and there is an understandable envy in Europe and high regard amongst many professionals shown to the arrangements in the USA that have made it possible. These include high levels of professional control of entry into the profession and high levels of specialisation within that profession. The benefits are obvious: of limiting competition and price maintenance. That this persuasion works is evident in the high level of professional complicity to Americanisation of healthcare in the UK and other countries.
Aggressive marketing of superior managerial expertise.
A typical example is this extract from an old edition of the Harvard Business review Why American Management Rules the World (hbr.org):
In proclaiming “The American Management Century” statements are made as follows:…
” when it comes to overall management, American firms outperform all others. This U.S. dominance occurs in the manufacturing, retail, and healthcare sectors … Japanese, German, and Swedish firms follow closely behind. In contrast, developing countries like Brazil, China, and India lag at the bottom of the management charts. Southern European countries like Portugal and Greece appear to have management practices barely better than those of most developing countries. In the middle stand countries like the UK, France, Italy, and Australia, which have reasonable but not brilliant management practices.
One of the biggest drivers of these differences is variation in people management. American firms are ruthless at rapidly rewarding and promoting good employees and retraining or firing bad employees. The reasons are threefold :
The U.S. has tougher levels of competition. Large and open U.S. markets generate the type of rapid management evolution that allows only the best-managed firms to survive.
Human capital is important. America traditionally gets far more of its population into college than other nations.
The U.S. has more flexible labor markets. It is much easier to hire and fire employees.”
This not only displays wilful blindness to the problems in the US (and the relative success of China) but ignorance of the reasons for the success of the healthcare sector, identified by Muzzucato in “ The Entrepreneurial State” as by far the most profitable in the US: capture of public policy and politicians by investment in lobbying and inducements to politicians.
Other examples of US boosterism flood from the World Economic Forum who show greater insight in identifying the route being taken by American multinationals.
“The healthcare sector is not only large and complex, but also heavily regulated. For these reasons, perhaps the most important enabler in the transition to a value-based health system is aligned public policy.”
In other words the healthcare sector has been targeted for aggressive marketing via access to the makers of public policy; politicians.
3. Exploiting Technology Hype
The large consultancies act not only for healthcare management companies but also for the technology giants. There is thus synergy for them in exaggerating the impact of technology and its ability to justify claims of healthcare “transformation”.
Morozov refers to solutionism as an unhealthy preoccupation with sexy, monumental and narrow-minded solutions to problems that are extremely complex, fluid and contentious. Design theorist Michael Dobbins describes solutionism as presuming rather than investigating a problem that it is trying to solve, reaching “for the answer before the questions have been fully asked”. In other words technology is a hammer looking for a nail.
Marc Robinson in his book points out that technological innovation has increased costs alongside savings. He concludes “the forces driving up costs have considerably outweighed those reducing them, giving technological innovation an overall expenditure increasing bias.”
It goes without saying there is no respect for honesty in admitting this from the consultancies as evidence and experience is not supportive of aggressive marketing of new models of care and technology based solutions. Rather the fact that everyone else is doing it and the overarching policy objectives are consistent are reason enough despite the National Audit Office in the UK failing to identify the evidence to support the integration policy which is used to mask the policy direction of outsourcing to managed care multinationals.
Capture of the public policy process, trade policy frameworks and procurement rules.
This involves investment in policy formation nudging in the US direction. For example in the UK the Kings Fund , the preeminent Health Policy body has as a chief executive an ex McKinsey consultant ; log-rolling and the revolving-door govern the attitudes of politicians and officials alike; and an extraordinary number of Parliamentarians have links with private healthcare interests.
Negotiations on Trade policies with the US always have access to healthcare markets as a key element, expressed in the phrase as the “the NHS being on the table” in talks concerning a future UK –US Trade deal. TTIP, the future EU-US trade agreement, was also concerned to promote opening markets for healthcare, before that was stopped by Trump in an attempt to enforce more bilateralism in trade talks with individual countries rather than proceed more slowly in open multilateral trade talks.
The attempt was clear however that TTIP was designed to liberalise markets for services, including publicly provided healthcare. This was why TTIP was opposed in the UK and across Europe by unions who interpreted the provisions within TTIP for contracting for public services as a one-way street for privatisations.
On public procurement the story is clear and well summarised. The opening of markets for government procured services has been a long term goal for the large multinational companies, predominantly US, but also European utilities companies. The driver has been the WTO who passed the directive on government procured services in 2014 and which was dutifully supported by the EU also in 2014.
The NHS is a prime target although it has fostered controversy and subsequent clarification gives wriggle room for countries that may not wish to follow compulsory procurement of public services and appears to have been drafted with the UK in mind.
In the UK the concern was that s75 of the 2012 Health and Social Care Act would drive a privatisation process. After pressure it is likely that this legislation will be replaced but it is not yet clear with what. The fear is that it will be pre-approved by US accountable care organisations intent on securing the lead contractor role promising to secure “savings” for the NHS.
Already the lead provider role envisaged for integrated care bears an uncanny resemblance to the role of accountable care providers as in the USA.
The conclusion that proceeds inevitably from this is that from a combination of professional envy, propaganda ( or more politely ,”thought leadership”) and careful manoeuvring the seemingly incredible proposition that European healthcare is proceeding in an American direction remains to be defeated rather than laughed out of court.
Objections that this is unduly alarmist and as an unfair description of plans to reduce the commodification and fragmentation of care introduced in the UK and other countries are made in my view by those ignorant of the bigger picture which this article attempts to reveal.