When the European authorities talk of structural reforms, they the American model, in which pension systems, health, education are largely characterized by market’s dominance.
In its attempt to deal with the crisis, the Frankfurt-Brussels axis is moving along a double track : austerity and structural reform. There is a point where the two tracks meet to become one, and the cut in public spending (austerity) meets the structural reforms. Across the EU, the pensions and health care are the two essential assaults on the Welfare State. In Italy the Monti’s technocratic government axed the pensions, bringing the retirement age to the threshold of 70 years. Now it’s the moment of the health care retrenchment In accordance with European Union requests.
When the European authorities talk of structural reforms, they mean the reduction of public expenditure and an increased doses of privatization of welfare. In other words, the American model ,in which pension systems, health, education are largely characterized by market’s dominance.
In the past weeks, while in Italy we were discussing the cuts to health care, the U.S. Obama’s healthcare reform was saved from cancellation by the Supreme Court, a big delusion for Mitt Romney, the Republican candidate for the presidential elections in November. It is worth briefly to remember the story of the reform and its outcome.
When Obama entered the White House, 47 million Americans were without health care. The easiest way to improve the situation, long cultivated by the liberals of the Democratic Party, would have been to include all citizens in Medicare , the system of public assistance established by Lyndon Johnson in the sixties for the aged 65 and over. It would have been a universal service at a significant lower cost. But the violent opposition of the powerful complex of health care private interests, led to a year long battle in Congress and in the country , with no holds barred. Barack Obama was accused of being a "socialist", and wanting to import in the U.S. European-like health care system. The end result was the compromise that now, providentially for Obama, the Supreme Court has endorsed.
On the basis of the reform, thirty-three million Americans, who now don’t have it, will get an health insurance. Of these, 17 million will be associated with Medicaid, public assistance for the poor, while 16 million more will benefit from a public subsidy through a tax credit related to income level. The reform also provides that insurance companies may not refuse or revoke the insurance in relation to medical history or pathology of the insured. In return for giving up a shamefully discriminatory method, insurance companies have sought and obtained a binding obligation for all adult citizens of contracting an insurance policy .
So, Obama has saved the reform and probably his second term. Yet, the reform, although greeted with understandable relief by Democrats , remains far from solving two fundamental problems of American health care system: the cost and the equality of treatment.
The cost keeps growing at an unsustainable pace. At the end of 2011 the health care total cost reached the fantastic amount of $ 2.7 trillion, 18 percent of U.S. GDP. And, according to the forecast, it is bound to hit 20 % of GDP, meaning that one dollar in five of the wealth produced in America will be conveyed to the health industrial complex. From 1999 to 2011 premiums have risen three times faster than workers’ earnings and four times faster than overall inflation. The average family health insurance premiums rose from $13,770 in 2010 to $15,073 in 2011, up 9 percent, according to Kaiser Family Foundation. And there is not only a problem of growing cost. Deep economic inequalities are hidden behind the average charge. It is obvious that a policy worth, say, 10 thousand dollar has an insurance content sharply different from the point of view of prevention and access to treatment than a bill of 20 thousand dollar. Therefore, for the private insurance system companies, even if the diseases, the disabilities and the care are the same, not all the patients are equal.
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The comparison with the European health systems with universal and, in principle, free entitlement , shows an average total cost that is about half that of the U.S., hovering around 9 per cent of GDP. In France and Germany with more expensive systems, the total expenditure is about 11, 5 percent of GDP. In Italy, where Monti’s government wants to cut the health care spending, the total health expenditure was 9.5 percent of GDP (last OECD comparative figures are related to 2009) below the European average (9.6), lower than the United Kingdom, and two points below the GDP of France and Germany.
According to an OECD ranking, European systems, such as the French and Italian ones , stand out for their excellence. The advantage of the public system is out of question. Yet, this does not mean that the public systems are free from inefficiency, waste and corruption . But, as the great economist Albert Hirshman taught us in his famous “The Rhetoric of Reaction” , it is a typical attitude of conservative ideologues to assault the democratic gains and, in particular, the welfare state, denouncing what they call the natural "perverse" effects of the reforms . What is needed is to correct the public systems to make it more effective, not to try to dismantle it with privatization.
The point is not to ignore or deny the failure or deterioration in the quality of public service that must meet the needs of all citizens : it is necessary to correct its malfunctions, not dismember it, and, more or less explicitly, set up its privatization in the name of a superior efficiency of the market, which, as the American example shows, is a pure ideological dogma, fueled by powerful vested interests.
In this respect, there could not be a more upsetting paradox. The American progressive politics has long envisaged either a Canadian or a European-like health care model. Instead , the technocratic Frankfurt-Brussels axis , allied to the rightwing governments who lead the majority of the European Union’s counties, tries to reduce social spending, masking the attack to the Welfare state behind the self-defeating couple austerity- structural reforms.