Economic Boundaries of Health Care: Factors Influencing Reform Proposals

This paper offers a theoretical framework for understanding the crisis of the U.S. health care system and the mainstream debate to restructure health care financing and delivery system. It argues that the crisis of the health care system is a cause and a consequence of the long-cycle of structural changes in the U.S. economy that has occurred since World War II. It is further shown that the mainstream debate on how to reform the health care system has been dominated by the relentless effort to overcome the restructure the U.S. economy. The Clinton plan was designed to combine cost containment with increased access to enhance the efficiency of the health care system in order to boost profitability. Its conservative rivals focused mostly on cost reduction. It is shown how rapidly rising costs, diminishing access, and relatively poor health outcomes pose a threat to capitalist accumulation and reproduction. After distinguishing between high level and fast rate of costs, it is argued that the latter is best understood from the perspective of the labor theory of value. In this context, it is shown how the fast rate of growth of health care costs poses a definite limits on proposals to reform the health care system. The mainstream debate around the Clinton plan is then revisited to show how these proposals were a part of the overall effort to resolve the long-term problems of the U.S. economy. It is argued that the defeat of the Clinton plan was due to its concerns with efficiency of the health care system in the face of the demand by a majority of the U.S. capitalist class to cut costs.