Consequences of the Privatized Funding of Medical Care and the Privatized Electoral Process

By Vicente Navarro, M.D.
American Journal of Public Health, Jan. 14, 2010 

The current state of health care reform in the United States reveals the enormous limitations of democracy in this country, unparalleled in the western world. Why is there such a large gap between what people want from their representatives in Congress – including universal access to health care as a matter of right – and what they get? 

To answer this question, we first need to look at what is happening in the U.S. medical care sector. I think it’s fair to say that what we see there is also unparalleled in the western world. Forty-seven million people are without any form of health insurance coverage (and a million more are added each year) and 102 million have insufficient coverage (and many aren’t aware of how limited their coverage is until they find out that an illness or needed test is not covered).1 The clearest indicator of the inhumane system of funding and organizing medical care in the United States is that 40 percent of people in the terminal stages of illness say they are worrying about how to pay their medical bills.2 No other major country comes even close to this level of inhumanity. 

The root of the problem is the privatization of the funding and organization of medical care. Most of the funds are collected and services administered by private insurance companies. This system is rooted in the Taft-Hartley Act (the same act that forbade the working class to act as a class, by forbidding sympathy strikes that would allow workers from different employment sectors to strike to defend their class interests). Taft-Hartley shifted the responsibility for working people’s health benefits coverage to highly decentralized collective bargaining agreements, which explains the great variability in coverage. One consequence is that when American workers lose their jobs, they lose not just income but health benefits for themselves and their families. It is not surprising that the United States has the fewest working days lost to strikes. Workers are afraid to make trouble in the workplace, because getting fired could mean losing medical care for their families.3 

It has been a traditional demand of the labor movement to get rid of the consequences of the Taft-Hartley Act. The demand for universality of health care, with every American having the right to access care, has been a constant in the labor and progressive movements. The majority of Americans agree with this demand, but they are unlikely to get it.4 

The reason for this gap between what people want and what people get is, again, privatization – a privatized electoral process, in which most campaign funding of candidates for political office comes from private sources. That private money does not mainly come (as myth would have it) from multitudes of average Americans sending in $50. The great majority comes from huge economic interests (components of the “Corporate Class”), including the insurance, pharmaceutical, and medical equipment companies; the professional associations; and other components of the medical-industrial complex. The six key members of the Senate Finance Committee, chaired by Sen. Max Baucus (D-Mont.), have received support from these interests. They received a million dollars each.5 

To further compound the problem created by a privatized electoral process, U.S. democracy is a nonproportional type of democracy— that is, the population is not represented in Congress in proportion to the size of the electorate. Each state is represented by two senators, regardless of its size, which gives enormous power (as the country’s founders intended) to rural, conservative states. The six key senators on the Finance Committee represent rural states that, in sum, include only about 3 percent of the U.S. population, and these senators have the future of health care reform in their hands. 

Democracy in the United States is indeed extremely limited. The opening of the nation’s founding document, the U.S. Constitution, suggests that it is “We the People . . .” who make decisions, but it should include a footnote saying “or Corporate America.” Furthermore, those who do decide are not fully representative of the population. Still, the United States is not a dictatorship, but a democracy so tilted in favor of corporate and conservative interests that an enormous effort is required to create change. The election of President Obama seemed to be such a change and a sign of hope, because this was the trademark of his campaign. But since coming into office, he seems to have been poorly advised on his strategy for implementing the promised change. He has made several big mistakes. 


1. An emphasis on the issue of economic viability of the system, stressing that medical expenditures (private and public) are increasing too rapidly and enlarging the federal deficit. This message has been repeated in many different ways, emphasizing that a primary goal of health care reform is to reduce the federal deficit. Most of the reforms the administration is calling for (which will, undoubtedly, cost money) will be funded by increasing the efficiency of the current public and private programs. People’s well-founded skepticism about Congress explains why so many (including Medicare beneficiaries) have expressed their concern about the meaning of “increasing the efficiency,” which they interpret to mean reducing their benefits. It is not surprising that the major opposition to the Obama reform proposal comes from the beneficiaries of these public programs, especially Medicare. 

2. The concern about costs and the need to improve efficiency expressed together with an emphasis on covering the uncovered as a moral problem that needs to be resolved. This is indeed a moral issue. But, when Obama adds that he plans to pay for this expansion of coverage by increasing the efficiency of current programs, he is calling on people’s compassion, with the possibility of most people (who do have coverage) seeing their benefits reduced to take care of the uncovered. We have plenty of experience (with antipoverty and other means-tested programs) to show that compassion is not a good motivator. Solidarity (I take care of you on the condition that you take care of me) is a much better motivator. 

What Obama should have done is expand and improve the Medicare Program to all Americans. This would resolve the problems of the uncovered and of everyone else. The call for a universalism mandated by government (not a mandate that individuals must buy their own health insurance, just as they have to buy car insurance) is far more ambitious (and more realistic) than a gradual path to universalism, which is likely to fail. 

3. Antagonizing the left. Achieving a universal right to health care requires a huge mobilization, comparable to that which got Obama elected. For this the president needs the left. Obama could not win only by mobilizing the left, but he could not win without it. He has antagonized the left by excluding single-payer health care from the negotiating table. I can understand why he changed his mind and decided not to support the single-payer option, but I cannot understand (because it was a tactical error) why, after saying that all options would be included, he excluded the single-payer option – the alternative preferred by the trade unions, the major social movements (such as the civil rights, feminist, and green movements), and others who were the core of his support and are the grassroots of the Democratic Party. To make things worse, he is ready to eliminate even the public option, which is seen as a way of introducing the single-payer option through the backdoor. So, it is not surprising that the left is feeling frustrated, angry, and demoralized (and did not show up at the town hall meetings). 

All of this reminds me of what I saw during and after my time on the Clinton White House health care reform task force (as the “token single-payer expert”). Clinton had won the election of 1992 with a commitment to provide universal coverage. But once in office, he gave priority to reducing the federal deficit (not even in his campaign program), under pressure from Wall Street through Treasury Secretary Robert Rubin, and to approving the North American Free Trade Agreement, which was opposed by the trade unions and the majority of the Democratic Party. This antagonized the left of the party, and large numbers of Democratic voters stayed home in the 1994 congressional elections. The “Gingrich Revolution” was a consequence of this abstention of the Democratic grassroots. The Republicans received about the same number of votes in 1994 as in 1990 (the preceding nonpresidential election year). There was no increase in the Republican vote, but rather a decline in the Democratic vote. I am afraid that the same could happen in 2010. 

Vicente Navarro is with Johns Hopkins University, Baltimore, Md. Correspondence should be sent to Vicente Navarro, M.D., Ph.D., Professor of Health Policy, The Johns Hopkins University, 624 N. Broadway, Rm 448, Baltimore, MD 21205 (e-mail: 

This article was accepted November 11, 2009. doi: 10.2105/AJPH.2009.187633 


1. Hellander I. The deepening crisis in U.S. health care: a review of data, Spring 2008. Int J Health Serv. 2008;38(4): 607–623. 

2. Ann Intern Med. 2000; :132– 145. 

3. Navarro V. Dangerous to Your Health. Capitalism in Health Care. New York, NY: Monthly Review Press; 1993. 

4. Washington Post/ABC News. 2008. 

5. Kaiser RG. So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government. New York, NY: A Knopf; 2009.