Why our healthcare system is broken

25 June 2024
A medical scientist

A friend who has diabetes recently called, worried that his blood sugar was “a bit high”. It turned out it was so high he was at risk of the complication known as ketoacidosis. That’s when the body produces excess blood acids. Left untreated, it can kill. I told him to go to the emergency room. Fortunately, he’s now okay.

What’s most troubling about this story is that he called me, rather than a doctor. Why? Because he couldn’t get in to see any of the bulk-billing GPs in his area, nor could he afford one that doesn’t bulk bill, let alone a specialist.

Reality makes a mockery of the idea that we have universal health care in Australia. The average out-of-pocket cost of seeing a GP last year was $42.55 per visit, and $108.22 for specialists. For people with diabetes, who need several visits per year, on top of paying for the medicine they need to survive, this can quickly become unaffordable.

And costs are increasing, Labor’s latest budget contained only metaphorical bandaids for the gunshot wound that is Australia’s ailing healthcare system. Allocating money to ensure adequate health care for those who aren’t rich enough to pay isn’t a priority for the managers of Australian capitalism. But their pockets are deep when it comes to channelling money to the pharmaceutical industry.

Take the example of a new drug for the treatment of diabetes—the “SGLT2” inhibitor. The drug prevents people from developing heart or kidney failure, so it’s a life saver. The production cost of the drug works out at about $3-5 per person per month, according to a 2024 economic evaluation in the Journal of the American Medical Association. Yet the government negotiated a price of $55-60 per month with the pharmaceutical companies.

Why does the government pay so much? The reason is that some big pharmaceutical companies own the intellectual property rights for the drugs, making it illegal for anyone else to produce them, and allowing the rights holder a monopoly and significant control of the price. In other words, capitalists, in collaboration with the state, which enforces the intellectual property laws, prioritise profits over people’s health—and lives.

And it’s not just people with serious illnesses like diabetes who suffer.

Another example is a new vaccine for heart disease—the leading cause of death in much of the industrialised world. A recent study in the journal PharmacoEconomics found that if young adults were given the vaccine, their lifetime risk of suffering a heart attack would be cut in half.

Why has no-one heard of this amazing new vaccine? Well, one reason is that the company that makes it is currently charging almost $2,000 per dose. And because most of the benefits will come after people have retired (that is, the vaccine will help people live longer, but not help them work longer), the price is considered too high for governments to subsidise it, except for the sickest people.

The rationale for letting drug companies charge so much is that they have to spend lots of money on research and development. But the industry is one of the most profitable in the world. For example, a 2020 review article published in the Journal of the American Medical Association estimated that US pharmaceutical company profit rates are almost double those of non-pharmaceutical companies.

Moreover, it’s misleading to say that drug companies fund all the research and development. In Australia, just under half of research and development funding comes from the government. That’s not including all the money spent on decades of state-funded education scientists receive prior to undertaking the research.

So, we collectively pay for much or even most of the research, but the state allows drug companies to privatise the profits when the research leads to something good. On the other hand, governments cry poor when it comes to making available the nurses, allied health professionals, GPs and specialists for those who can’t afford them under the current system.

In this way the state shows its true colours: it’s there to protect and grow the profits of the capitalist class, not to improve the lives of most of the population.

Our healthcare system is broken. But for the rich and powerful, it is working fine: workers are still healthy enough to show up for work, and capitalists make massive profits selling overpriced medicine.

It doesn’t have to be like this. Today’s medical breakthroughs, like those of the past—insulin, the polio vaccine, antibiotics and so on—are the result of the collective effort of scientists building on the knowledge obtained over centuries.

The pharmaceutical companies take the collective knowledge of human society and use it to make obscene profits, while in effect denying poorer people access to the latest drugs.

We need a different system—one that serves the interests of the majority, not a profit-seeking minority who hold our lives for ransom.

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