Financial capital drives the COVID-19 pandemic

© Meredeth Turshen and Annie Thébaud-Mony

Since the Declaration of Alma Ata, a ground-breaking call for “Health for All by the Year 2000” issued by WHO and UNICEF in 1978, the UK, France and the US have moved in the opposite direction. Rejecting demands for strong public health systems and government-run, universal, comprehensive services based on democratically-managed primary health care, these countries pursued, at differing speeds, first privatization, then commercialization and finally financialization of health services. Financialization leverages private sources of capital and turns exchanges of goods and services into financial products. Embedded in a philosophy of medical neoliberalism, financialization drives the flawed response to the COVID-19 pandemic, deepening income, class, racial and ethnic divides. Though not the only factor, financial capital accelerates this public health crisis in nursing homes, endangering communities at large.

Trends in health service systems: UK, France and US

The UK created the National Health Service (NHS) in 1948 as a publicly funded, publicly delivered and publicly accountable health care system. It has since veered far off course. Margaret Thatcher laid the groundwork for private sector management and marketization of the NHS in the 1980s. Outsourcing was introduced in 1983, requiring health authorities to set up competitive bidding arrangements for their cleaning, catering and laundry services—and some social care services. The NHS and Community Care Act of 1990 expected NHS hospitals and community health services to operate as trusts and function like businesses in a marketplace. Financialization came with the introduction of the Private Finance Initiative (PFI) in 1992. Here’s how it works: a consortium of bankers, builders and service operators raises money on the government’s behalf in return for contracts to design and build hospitals and operate the supporting facilities for 30 years. Each hospital they build is liable for the debt incurred, while the PFI consortia profit. In 2012 the Health and Social Care Act effectively dismantled the NHS and replaced it with a new agency, Public Health England.

The French health care system is a model of compulsory national health insurance that provides health care coverage to all legal residents. It combines public and private health care financing with a public-private mix in the provision of health care services. Since the 1990s, financial actors have transformed the system, becoming the chief providers of funds for debt refinancing, short-term needs and capital expenditures; they also introduced financial language, metrics and priorities to enable shifts in financing. These changes undermined the stability of the system, which faced a debt estimated at $37 billion in 2020. In June 2019, even before the COVID-19 pandemic exposed great service disparities across economic and ethnic lines, strikers at more than 50 hospitals around the country warned that budget cuts were leading the health system to the brink of collapse and putting patients’ lives at risk. The underlying problem is the debt incurred by reliance on private equity financing.

The United States has repeatedly rejected legislation to establish either a national health service or national health insurance, maintaining instead a mix of public and private, for-profit and “nonprofit” insurers and health care providers. The 2010 Affordable Care Act (ACA or Obamacare) legislates a marketized system based on private health insurance subsidized by the government. The ACA health insurance exchanges generated successive waves of mergers in the health insurance market, decreasing competition among insurers and raising health insurance premiums, the opposite of what ACA intended. According to a Rand Corporation study, private insurers paid hospitals an average of 247% more for services than what Medicare would have paid. Despite ACA, 29.2 million people under the age of 65 have no health insurance (10.8 percent of the 2019 population), a figure thought to have increased by over 5 million as people lost jobs that carried health insurance. Mergers across the health care industry followed the repeal in 1999 of the Glass-Steagall Act of 1933. As commercial banks, investment banks, securities firms and insurance companies consolidated, private equity firms assembled medical empires, leading to hospital closures, higher prices and suffering, especially in underserved communities.

COVID-19 deaths in nursing homes

These different health care systems have in common the growing privatization of facilities that care for the aged. Deregulation policies enabled the transformation of a public service for the elderly into a for-profit enterprise. The value of the global long-term care market, which is highly privatized and financialized, was $1 trillion in 2019. The ownership and business models of residential care providers play a central role in the financial instability and mission failures of these homes, where a disproportionate number of COVID-19 deaths have occurred.

As of 26 October 2020, the US leads the world with 8,635,966 confirmed cases of COVID-19 and 225,229 deaths (about 67 deaths per 100,000 population); in France, there were 1,130,143 cases and 34,673 deaths (52 per 100,000); and in the UK, 876,840 cases and 44,986 deaths (68 per 100,000) (Johns Hopkins University data). Although it is difficult to find firm numbers, nursing home residents and staff account for perhaps 50% of coronavirus deaths in each of the three countries. Nursing home financing offers a better analysis of these statistics than does the usual ascription of old age and underlying health conditions. The UK leads in private ownership; in 2019, the private sector provided 84% of care home beds. In the US, 70% of certified nursing facilities were for profit; and in France, 30% of EHPAD (Etablissement d’hébergement pour personnes âgées  dépendantes), the most common type of residential care for senior citizens, belonged to the private sector.

Three factors are determinant in care homes’ high numbers of COVID-19 deaths: for-profit operation, government failure to enforce regulations, and poor management. Linkages between ownership and quality are well documented. To keep costs low and profits high, for-profit homes understaff their facilities, underpay their workers, and provide lower-quality care. Even during the pandemic, regulators have not enforced infection control standards, and managers do not provide adequate training or protection for staff and patients. These determinants of morbidity and mortality are salient in care homes in the three countries.

For-profit operation: From 1990, the UK required local councils to spend 85% of their funding on purchasing care services from private providers. At the same time, the government targeted the care sector for austerity policies, leaving providers without their main source of funding to face financial collapse. Private equity stepped in, and care homes began to borrow heavily, employ complicated corporate structures, and use cost-cutting measures such as tax avoidance. This business model, which insulates the equity firms from responsibility for debt repayment, was initially successful, but it left the homes unstable and liable to financial turmoil. When a company fails, it leaves people at risk. In 2011 Southern Cross, a large national care home provider that had 9% of the market nationally and 30% of all placements within the northeast, went under, leaving underfunded local councils to accommodate 37,000 people.

Failure of government regulation: The US government has oversight over most nursing homes–about 2.5 million residents–because Medicaid funds 60% of long-term care. When President Trump took office in January 2017, work stopped on new federal regulations that would have forced the health care industry to prepare for an airborne infectious disease pandemic such as COVID-19. To date no specific federal regulations protect health care workers. The nursing home industry is a target of the administration’s aggressive deregulation agenda, and nursing homes have seen reduced regulation, less frequent inspection, lower fines for violations, and decreased regulatory spending. Simultaneously, the nursing home industry deploys a battery of lobbyists, many with close ties to the administration, in its pursuit of tax breaks, federal cash infusions, and protection against lawsuits.

Only in May 2020 did the federal government start tracking COVID-19 infections and deaths in nursing homes. Each of the five biggest for-profit companies—Genesis HealthCare, Life Care Centers of America, Ensign Group, SavaSeniorCare and Consulate Health Care—which operate more than 850 facilities in 40 states, has seen coronavirus outbreaks at multiple facilities. Genesis HealthCare, the nation’s largest nursing home operator, has reported more than 1,500 deaths across 187 facilities. In May 2020, Genesis received $300 million in grants and loans from the government. Staffing levels are the most critical factor in providing quality care to residents, and workers complain that Genesis provides grossly substandard nursing care. Private equity nursing homes have a disproportionate share of COVID-19 cases and deaths among staff.

Poor management: In France, “Government carelessness in managing the health crisis has taken a tragic turn in these establishments,” writes Philippe Baqué of the coronavirus deaths in EHPADs. Nursing homes have long faced a lack of resources; in the current crisis, the shortage of tests and personal protective equipment and the denial of patient access to specialized treatment raised illness and death rates. The French government underestimated the severity of the epidemic and was late in taking into account the rapid spread of the virus in care homes.

The largest private groups managing EHPADs in France are Korian (25,000 beds), Orpea (20,000 beds) and DomusVi (17,000 beds). Korian is the leader and among the most profitable: in the first half of 2020, its revenue rose 6.2% ($2.2 million), its real estate portfolio is valued over $2.7 billion. Reports of serious deficiencies in Korian nursing homes were all over the French news at the height of the pandemic in April. Korian refused to recognize the existence of COVID-19 cases in Clamart. In a nursing home managed by Korian in Mougins, there were 37 deaths. At a Korian home in Mée-sur-Seine at least 20 residents died. In Korian’s EHPAD in Marseilles, respiratory infections began circulating in early March, but only staff were tested; management refused all questions from family about workers testing positive and cases and deaths among residents. On April 26, the Korian CEO announced 606 deaths in EHPADs managed by Korian. On May 19, a joint criminal investigation was opened following complaints from families concerning several nursing homes in Hauts-de-Seine.

The US, France and UK are among the governments that choose to protect the financial interests of conglomerates over the lives of elderly care homes residents and the nursing assistants, as well as support staff like cleaners, garbage collectors — so-called essential workers who have to leave their homes and take mass transport to their jobs every day, leading to an inequitably experienced health disaster that could have been avoided.

As the global death total tops 1.1 million, the growing COVID-19 pandemic is out of control, and many unknowns remain about its evolution. We need to understand the role of private equity in this crisis. Governments disguise their failure to organize coherent care, and private health care providers divert our attention to the economic fallout of lockdowns. Health workers have taken their demands to the streets; trade unionists in the US, UK and France recognize their dual roles as essential workers and citizens, and, concerned about the choices being made in the organization of work and working conditions, are demanding relief.

The real needs are for massive government investment in expansion of the public health sector, health worker training and recruitment, an overhaul of working conditions, and the creation of a health democracy to oppose an inhuman bureaucracy. Health professionals must build a common front with users of health services to demand that the health and human needs of patients, as well as the working and living conditions of caregivers, be placed at the heart of a reorganized public health system. Prevention cannot depend solely on a vaccine; it also requires reducing social inequities in health and health care. These policies should be national and international social and economic priorities in accordance with the principles of the Alma Ata Declaration.

Meredeth Turshen is Professor Emerita, E.J. Bloustein School of Planning & Public Policy, Rutgers University, turshen@rutgers.edu

Annie Thébaud-Mony is Emerita director of research at the National Institute of Health and Medical Research of France (INSERM), specialist in occupational health (http://iris.ehess.fr/index.php?115), annie.mony@gmail.com

To the Editor of the New York Times:

I beg to differ with Donald G. McNeil’s article, “Drug companies focus on the poor” (N.Y. Times June 25, 2019). McNeil claims that the pharmaceutical industry has lowered prices and is now helping poor countries buy needed medications. Two examples (out of thousands) illustrate the opposite. In 2018, U.S. officials threatened negative aid and trade consequences for Ecuador if the country introduced a resolution to the World Health Assembly to encourage breast-feeding; behind the scenes, the infant formula industry was lobbying the U.S. government to defeat any proposal that might threaten their profitable bottle-feeding products. In 2014, U.S. pharmaceutical companies and pro-business groups created the “astroturf campaign,” a fake grassroots movement to undermine South Africa’s efforts to lower drug prices through an amendment of its intellectual property law.

By using their power and influence to keep the costs of medicines high, and by systematically hiding their profits in overseas tax havens, pharmaceutical companies put poor people’s health at risk and deprive governments of billions of dollars in taxes that could be used to invest in healthcare. 

In these days of white supremacists talking about “the great replacement” – their fear that the white “races” will be overtaken by people of color – it is good of Clarence Thomas* to remind us of the ugly history of eugenics. Described misleadingly as the science of improving human populations by controlled breeding to increase the occurrence of desirable heritable characteristics, eugenics became the policy of forced sterilization, segregation or miscegenation in 32 states. The eugenics movement claimed it was dedicated to ameliorating the human race; but, impatient with the slow pace of voluntary compliance, it turned to compulsory measures to achieve its true aims — a whitening of the gene pool and the elimination of disabilities, many of which were wrongly thought to be inherited. No one should forget the Nazi use of eugenic arguments to justify sterilizations, the killing of “defective” children and adults and the mass murder of “undesirable” people. But to reject birth control today because Margaret Sanger allied with the eugenics movement in the early history of the family planning movement is tantamount to rejecting the science of genetics today based on the aberrant history of eugenics.

Eugenical policy makers mandated forced sterilization, segregation or miscegenation to achieve their aims. Involuntary sterilization, as administered under eugenical sterilization laws, is now recognized as a violation of human rights. It bears no relation to voluntary abortion. The voluntary termination of pregnancy by medical or surgical methods is a decision taken by a woman, in consultation with her physician, for a range of reasons extending from fetal abnormality and endangerment of the woman’s life or health to economic or social determinations. The denial of abortion, however, amounts to state enforced compulsory childbirth and is comparable to coerced sterilization. Forced pregnancy contradicts reproductive freedom and sexual autonomy; it is a condition suffered exclusively by women; and it is a crime against humanity in international law, spelled out in the Rome Statute. The crime is rooted in longstanding ideals of autonomy and equality and the idea that reproductive choice is a basic human right. To endorse forced pregnancy by excluding rape and incest as exemptions in a vulgar attempt to get the Supreme Court to overturn Roe v Wade is an egregious violation of international human rights law and women’s human rights.

Forcing a woman to continue an unwanted pregnancy is reproductive coercion, defined as behavior that interferes with the autonomous decision-making of a woman with regard to reproductive health; coercion includes the threat of consequences for noncompliance with a demand, in this case punishment under the law. In El Salvador, the ban on abortion is total, imposing harsh criminal penalties on both women and physicians. Under current Salvadoran law, anyone who performs an abortion with the woman’s consent, or a woman who self-induces or consents to someone else inducing her abortion, or who is suspected of having had an abortion after seeking medical attention for serious pregnancy complications, can be imprisoned for up to eight years. In reality, most women end up being prosecuted and sentenced for aggravated homicide, which is punishable by up to 30 years in prison. Abortion bans that mandate punishment of the woman or of the physicians who perform the abortion are contrary to international law.

Clarence Thomas correctly points out that more African-American than white women request abortion, attributing the differential to racism. He is right, for the wrong reasons. Racism today is embedded, not in eugenical social engineering, but in the inexcusably higher rates of black than white maternal and infant mortality, the injustice of black/white wealth and income differences, in the injustice of different rates of homelessness and home ownership, in the unfairness of African-American families’ inability to find and afford nutritious food, and in the inequity of contrasting black/white unemployment rates. Black women demand reproductive justice—the right to bear children and raise them with dignity in safe, healthy, and supportive environments; it is the inability to do so that leads so many to terminate an unwanted pregnancy.

Justice Thomas’s arguments about genetic manipulation are wrongly directed at abortion and better aimed at the fertility industry, which uses an ever-wider variety of techniques to create pregnancies tailored to the wishes of those who will raise the children. One figure gives some idea of how large this industry has become: the global market for invitro fertilization (IVF) was valued at $16.68 billion in 2018. Since the world’s first baby was conceived invitro in 1978, more than 8 million babies have been born with this technique. It is unimaginable that we would return to the days when there was no hope for infertile women and men. To justify the denial of the possibility of family on the grounds of social engineering is inconceivable

* Justice Thomas’s concurring opinion in the case of Box v. Planned Parenthood of Indiana and Kentucky, Inc. can be read athttps://www.supremecourt.gov/opinions/18pdf/18-483_3d9g.pdf

© Meredeth Turshen 5 June 2019

This article debates the proposition that artistic production mirrors humanity’s maturation from primitive superstition to scientific rationality. This effort sits at the intersection of demography, political economy and aesthetics. According to traditional demographic theory, primitive peoples are caught in a poverty trap of high birth rates, a condition inimical to industrialization, well-planned urbanization, universal education, women’s emancipation and cultural production. The analysis focuses on three dynamics: the demographic effects of mass migration on creativity: the trajectories of declining populations and their places in cultural hierarchies; and slavery and colonialism’s reduction to penury of skilled artists in pre-industrial societies. The method interrogates self-reinforcing trends of the canons of demography, political economy and aesthetics and the resulting concurrence on the path of progress, which assumes that art is a reflection of liberal historical advancement. The overarching argument of the article is that by setting the criteria and suppressing alternative accounts of the history of African art, these canons narrow and misrepresent our global cultural legacy. Background: sub-Saharan African art is classified as “primitive” according to the canons of art history, demography and political economy. This label is problematic because it conveys faulty demographic assumptions about sub-Saharan Africa and reflects the ways in which theories of human progress reinforce analyses underlying the designation of primitive. The proposition advanced is that these canons narrow, suppress alternative accounts of the history of African art, and misrepresent our global cultural legacy.
Journal of Arts & Humanities Volume 06, Issue 09, 2017, 16-22; DOI: http://dx.doi.org/10.18533/journal.v6i9.1251

Labor force futures
30 June 2017
© Meredeth Turshen

Over the past decade technology has disrupted (and in some cases, dismantled) high-paying jobs that required a college degree: the publishing, music, retail and service industries have all seen automation-related cuts in their workforce. Automation is replacing some jobs of college-educated workers in banks, financial firms, law offices and pharmacies. Sportswriters and business journalists find themselves outsmarted by machine-generated stories: a company called Narrative Science can feed data into a computer and print out a story in minutes.
According to the New York Times (“New collar jobs are giving people with tech skills but no degree a chance at better pay”, June 29, 2017), programs now hire adults without college education for middle level jobs in technology. All of the people interviewed for the Times article were under age 35. What does the future hold for adults aged 45 to 55 looking for a job? (This is one of the groups hardest hit by the opioid epidemic.)
Boston Consulting Group predicts that by 2025 up to one-quarter of jobs will be replaced by either smart software or robots, while a study from Oxford University suggests that 35% of existing UK jobs are at risk of automation in the next 20 years.
What does this trend mean for the future of college education? (The Times article says one-third of US adults hold a four-year college degree.) There are two aspects to this question: one, as states withdraw funding from public colleges and the costs of tuition rise, what happens when automation replaces the kind of job that enabled high-school graduates to work their way through college? The Center on Budget and Policy Priorities (August 18, 2016, http://www.cbpp.org/research/state-by-state-fact-sheets-higher-education-cuts-jeopardize-students-and-states-economic) says the decline in state funding of higher education has reached over 50% in Arizona and Illinois and over 30% in AL, ID, KY, LA, NH, NM, PA and SC).
The second aspect is, what kinds of work are college graduates going to find in the job market that will enable them to pay off student loans and establish independent lives? One possibility is work that has a direct impact on another human being; but only the current limits of robotics leave this opening. Machines may not yet do jobs that depend on personal interaction, but the Japanese are already experimenting with robots that care for the emotional as well as physical needs of the elderly in nursing homes (November 20, 2016 http://www.roboticstrends.com/article/japan_to_create_more_user_friendly_elderly_care_robots/medical). Work that combines high levels of dexterity with sophisticated decision making are being accomplished by systems like Johnson & Johnson’s Sedasys, already FDA approved, which can automate delivery of low-level anesthesia in colonoscopies at a fraction of the cost of an anesthesiologist. Jobs that require an ability to persuade, negotiate and think creatively may not be way off for the most advanced software; automation is no longer about replacing repetitive work that involved very little real-time decision making.
As a university professor, I worry about my students, many of whom work full-time jobs to pay tuition; they are counting on their degrees to provide passports to professional careers. Automation debases the college degree. Politicians who are voting to cut funding for public education, who disrespect the teaching profession, who ridicule the arts and humanities as irrelevant, are opting for a soul-less mechanical society of people who will be unable to distinguish fascism from freedom.

Exhibition Opening
Saturday, October 15th at 6:30pm

Alfa Art Gallery

108 Church Street – New Brunswick, NJ 08901 – (732) 296-6720

gallery hours: Tuesday-Saturday, 11am – 6pm

NAWA exhibit at Beamesderfer Gallery

6 N 2nd Ave, Highland Park, NJ 08904

1 October – 19 November 2016

Reception, Saturday, 1 October 5:30-7:30pm