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Corporate Influence Over Politics. Peter Tran, Rayko Diaz, Jessica Toribio, Chang-Ting Yu, Keenan Hall. Healthcare From the 1960s – 2000s. Healthcare – 1960s.
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Corporate Influence Over Politics Peter Tran, Rayko Diaz, Jessica Toribio, Chang-Ting Yu, Keenan Hall
Healthcare – 1960s • In the 1950s, the price of hospital care doubled. Now in the early 1960s, those outside the workplace, especially the elderly, have difficulty affording insurance. • Over 700 insurance companies selling health insurance. • Concern about a "doctor shortage" and the need for more "health manpower" leads to federal measures to expand education in the health professions. • Major medical insurance endorses high-cost medicine. • President Lyndon Johnson signs Medicare and Medicaid into law. • "Compulsory Health Insurance" advocates are no longer optimistic'. • The number of doctors reporting themselves as full-time specialists grows from 55% in 1960 to 69%
Healthcare - 1970s • President Richard Nixon renames prepaid group health care plans as health maintenance organizations (HMOs), with legislation that provides federal endorsement, certification, and assistance. Healthcare costs are escalating rapidly, partially due to unexpectedly high Medicare expenditures, rapid inflation in the economy, expansion of hospital expenses and profits, and changes in medical care including greater use of technology, medications, and conservative approaches to treatment. American medicine is now seen as in crisis.
Healthcare – 1980s • Corporations begin to integrate the hospital system (previously a decentralized structure), enter many other healthcare-related businesses, and consolidate control. Overall, there is a shift toward privatization and corporatization of healthcare. • Under President Reagan, Medicare shifts to payment by diagnosis (DRG) instead of by treatment. Private plans quickly follow suit. • Growing complaints by insurance companies that the traditional fee-for-service method of payment to doctors is being exploited. • Capitation payments (payments made every month from users of HMO) to doctors become more common
Healthcare – 1990s • Health care costs rise at double the rate of inflation. • Federal health care reform legislation fails again to pass in the U.S. Congress. • By the end of the decade there are 44 million Americans, 16 % of the nation, with no health insurance at all.
Healthcare – 2000s • Health care costs are on the rise again. • Medicare is viewed by some as unsustainable under the present structure and must be "rescued". • Changing demographics of the workplace lead many to believe the employer-based system of insurance can't last. • Direct-to-consumer advertising for pharmaceuticals and medical devices is on the rise.
The average American in 2003 spent about $5,440 on health care, making the total amount spent throughout the United States that year to $1.6 trillion. • The United States spends 50% more per capita on health care on health care than any other country. • Considering this, it seems as though Americans would at least be the healthiest people on Earth. However, that is not the case. • In fact, the life expectancy of the United States is shorter than that of Western Europe, Canada, and Japan. Also, the infant mortality rate in the U.S. is higher than that of the same countries mentioned above.
The United States health care system is driven primarily by profit. • What happens to be profitable for drug companies, hospitals, and insurance companies is not the most efficient at generating good health. • There are hundreds of insurance companies that have different forms and regulations. Therefore, the system is basically ineffective. • Defensive medicine is practiced by many physicians in the U.S. which means they perform tests and procedures in order to protect themselves from lawsuits. • Lawsuits asserting malpractice on pharmaceutical companies, hospitals, and physicians account for about 4 percent of the total health care costs in America. • Science just keeps inventing new tests and treatments that are more expensive than former tests and treatments. • Prescription drugs are the most expensive portion of the health care bill ($200 billion a year & growing at a prate of around 12 percent each year.) - It is important to keep in mind that in other countries, the same exact drugs are cheaper than in the U.S. (an average of about $.57 for each $1.00 paid in the U.S.)
One major problem with health care in the United States is that it is measured on the basis of the ability to pay. Therefore, people in poverty who do not have enough money to even pay their bills have essentially no chance at receiving adequate health care. As you can see, this is a portion of evidence that we are living in a capitalistic society where the rich get richer and poor get poorer. - About 45 million people in the United States are uninsured. - It is obvious there is something wrong with our health care system when a child can die from a toothache because his family doesn’t have the money to get him care. Yet, we live in the most “powerful” country in the world. These two facts do not add up. - A common thought is that the poor are responsible for their bad health. For example, many people believe that their lack of education and knowledge leads to poor health practices. In reality, you do not have to have much knowledge to know that you need to exercise or that you are having stomach pains and you need to get to a doctor.
In the past, hospitals in America have been nonprofit organizations run by universities, churches, and municipalities. The key word here is nonprofit. Ever since the mid 1960’s, private profit-oriented hospitals and hospitals chains have appeared. - An example of how much power corporations now have over health care is Columbia Healthcare Corporation. This corporation is the world’s largest profit-oriented hospital chain. This corporation owns the following: - 350 hospitals (in 1997- 10% of the nation’s hospitals) - 133 outpatient diagnostic and surgery centers - hundreds of nursing homes, home care units, blood centers, and psychiatric facilities. - In 1997: this corporation alone was worth $20.2 billion, employed 285,000 people, and operated in 38 states. • The strategy of this corporation is to buy nonprofit hospitals, create quasi-monopolies, then hack basic services and increase the price of services in order to boost their profits. - The co-founder of Columbia Healthcare Corporation, Richard E. Rainwater, calls their strategy “the Wal-Mart approach to health care.”
Avoid low-income areas by locating in states and neighborhoods with well-insured populations. • Build hospitals without emergency rooms, neonatal intensive units, or burn units because these facilities often lose money. • Special interest in minimizing their care for emergency patients because they attract Medicaid and charity cases • Federal law requires that hospitals care for all emergencies, including patients who have no insurance. Therefore, hospitals without emergency rooms or with insufficient emergency facilities can “dump tens of thousands of patients a year on the doorsteps of public hospitals. • Purchase hospitals that are nonunion, allowing them to keep salaries and wages fairly low • Skimp the quality of supplies, the level of cleanliness, and the level of staffing.
Common Divisions between For-profit and Not-for-profit health care organizations
For-Profit • The corporations are owned by investors - The corporations are allowed to distribute some portion of the profit to the owners - They pay property, sales, and income taxes - Sources of finances include: - Equity capital from investors -Debt - Retained Earnings (depreciation & deferred taxes) - Return-on-equity payments from third party payers (ex. Medicare) - Management is conclusively liable to stockholders • Purpose of the organization: - Obligated to boost the wealth of shareholders within the law - They do this by providing services • Mission of the organization - This is commonly stated in terms of growth, efficiency, and quality
Not For-Profit • The corporations are without owners or are owned by “members.” • These corporations cannot distribute surplus to the people who control the organizations. • They are almost always cleared from paying taxes • Sources of finances include: - Charitable contributions - Debt - Retained earnings (depreciation) - Government grants • Management is liable to voluntary boards which are often perpetual. • Purpose of the organization - Legal obligation to accomplish a stated mission (provide services, research, teaching, etc.) - These corporations must continue and maintain economic viability in order to achieve this purpose.
Conclusion • There is a myriad amount of differences between the two, and the main difference is the purposes of these two corporations. For example, the purpose of the For-profit corporations is merely to help the rich get richer (to enhance the wealth of shareholders); thus, causing the poor to get poorer. On the other hand, the purpose of the Not-for-profit organizations is simply to provide services and research to the people who actually need it. • One advantage of the Not-for-profit organizations is the fact that they are usually cleared from paying taxes, whereas the For-profit corporations have to pay property, sales, and income taxes. However, a disadvantage of this type of corporation is that they cannot distribute surplus to those who control the organization.
Rex Tillerson - CEO • Joined in 1975 as an engineer • In 1995, he became president of Exxon Yemen Inc • In 1998, he became a vice president of Exxon Ventures (CIS) and president of Exxon Neftegas limited with responsibility for Exxon's holdings in Russia and the Caspian Sea • In 1999, merger b/t Exxon and Mobil named Executive Vice Pres. Of ExxonMobil Development Company • In 2001, he became President of Exxon Mobil Corporation • 6th most powerful person in business Fortune ahead of Bill Gates • Tillerson is Chairman and a member of the Executive Committee and Policy Committee of the American Petroleum Institute • Member of Business Roundtable and its Energy Task Force - BR: is a prestigious group formed to promote pro-business public policy and made up only of chief executive officers of major U.S. corporations. • The Task Force: - Advocates for policies and activities across all sectors that will ease the energy crunch and grow the economy. - Makes the case for greater investment in research and development of new energy sources and new energy efficiency technologies. - Educates policymakers and the public on the importance of energy market solutions to maintain and stimulate economic growth.
Political Bankroll • Is an industry captain in both lobbying expenditures and campaign contributions • The oil and gas industry has donated a total of $180 million since 1989 to political candidates. • Since 2000, ExxonMobil alone has been able to give more than $4 million to political candidates. • The oil industry certainly favors republicans in order to push its agenda on Capitol Hill. • In 2006, a total of 89% of ExxonMobil’s donations went to the republicans. • These great amount of campaign contributions are - A factor that influences how a dependable Exxon-backed Congress will choose to vote - A trend that establishes how campaign contributions are a key factor in who gets elected and who remains in office.
Lobbying Legacy • From 1998-2005: ExxonMobil spent about $67 million on lobbyists • Out of all the companies and organizations that were lobbying in Washington D.C. in 2004, ExxonMobil was ranked the twelfth highest spender, spending $7.56 million. • In 2005, ExxonMobil spent $7.14 million compared to Shell who spent only $1.4 million on lobbying (giving an example of how much more Exxon spends compared to other gas and oil companies)
Political Spending • What does the oil and gas industry get in return for the millions of dollars that it spends on lobbyists and campaign contributions? -The industry as a whole receives up to $113 billion per year in direct federal subsidies. - The 2005 Energy Bill is also a great example of how political money turns into legislation. - In effect until 2010, the Energy Bill authorizes $4 billion in federal subsidies to the oil and gas industry.
ADVANTAGES FOR EXXON FROM 2005 ENERGY BILL • The Energy Bill gave Exxon $1.5 billion in oil subsidies for ultra-deepwater activities (which Exxon is the self-declared leader of & claims it will be responsible for 20% or more of production of deepwater oil and gas by 2010). • Oil companies allegedly pay a royalty to the government for the authorization of extracting resources off public land owned by Americans. • Energy Bill gave billions of dollars worth of unnecessary “royal relief” for ExxonMobil and other oil and gas organizations. • At the same time, Exxon has already settled a number of lawsuits for $52 million for not paying or underpaying their royalties. • Also, the Alabama Exxon was found guilty of royalty fraud and fined $3.6 billion. (they have been appealing this conviction since 2000) • The Energy Bill also changed the rules so that the state has no right anymore to determine the location of Liquefied Natural Gas facilities. • Instead, the location assessments will be done by federal agencies, who are ironically more industry-friendly.
Why It All Matters • America obviously needs an urgent separation of oil and state. • ExxonMobil’s policies seem to be acting like an anchor holding down America from achieving a safer and cleaner energy future. • Exxon is the only major oil giant that is arguing that renewable energy is wrong and bad investment, that global warming really isn’t a threat at all, and that the U.S. being energy independent is undesirable and impossible. • Exxon CEO Rex Tillerson says that renewable energy is “uneconomic.”
Exxonsecrets.org Global Warming Debate
The oil companies would rather not have Americans be concerned about the Global Warming crisis. Burning fossil fuels is the leading cause of greenhouse gas emissions, which lead to the warming of the Earth. It would simply be bad business for oil companies to admit that their products are putting humanity's survival at risk, so they spend billions of dollars trying to debunk global warming as "myth" and as a "hoax." Quite like the cigarette companies when they denied the harmful effects of smoking to the Supreme Court, oil companies like ExxonMobil are denying the tried and proven science behind global warming. If they admitted to fossil fuel and greenhouse gas global warming, they would lose more billions of dollars than they use to deny the facts in international restrictions and taxes.-ExxonMobil, the largest oil company in the world, pays thousands of environmental scientists and hundreds of think-tanks to try to disprove global warming: • The National Center for Policy Analysis's "E-Team" analyzes environmental policy. The global warming "experts" on the team are climate skeptics who opposed the Kyoto Protocol and continue to oppose any regulation of greenhouse gases. Coincidentally, the NCPA has received at least $465,900 from Exxon since 1998, including $75,000 per year for the past several years. Adjunct Scholar Deming of the NCPA says that "Global Warming has long since passed from scientific hypothesis to the realm of pseudo-scientific mumbo-jumbo."
The NCPA has joined forces with eleven "think-tanks", including the Heritage Foundation, the Cato Institute, and the Heartland Institute. The Heritage Foundation is one of the oldest and most influential conservative think tanks. The Heritage Foundation's purpose is to "formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense" (from Heritage "About Us" website). Simply, if the U.S. were to go through a radical energy transition now, the Heritage Foundation would state that our economy would crumble and destroy the U.S and they would spend millions to make us believe them. Though probably they would be getting the money from ExxonMobil. • The Cato Institute, a libertarian think tank based in Washington DC, was founded by Edward Crane and Charles Koch, the billionaire co-owner of Koch Industries. The Cato Handbook for Congress states, "No known mechanism can stop global warming in the near term. International agreements, such as the Kyoto Protocol to the United Nations Framework Convention on Climate Change, would have no detectable effect on average temperature within any reasonable policy time frame of 50 years or so, even with full compliance." This is unsurprising coming from co-founder Charles Koch because Koch Industries is the largest privately held oil company in the U.S. • The Heartland Institute has taken the campaign against the proponents who prove global warming exists. The Heartland Institute competes single-mindedly against one of the most influential liberal forces in the field of global warming and conserving the environment, Al Gore . The Heartland Institute also filed a lawsuit against President Clinton when he expanded the scope of, and increasing funding for, a report on climate change by the US Global Change Research Program. The think tank also wrote to President Bush, discouraging him from attending the UN Summit on Sustainable Development. Bush did not attend. In total, the Heartland Institute has received $791,500 from ExxonMobil alone. Not bad for a think tank that has only been working with the oil company for eleven years.
Conclusion How the Healthcare and Oil Industries Relate
They are both driven solely on the aspiration of making more money for themselves and bringing in an increasing amount of profit each year. • They are both extremely powerful organizations now due to their large sums of profit, making it hard to take any power away from them or persuade them that change is needed. • Neither of them seems to care about the negative impact that they are having on the citizens of the United States. - For example, the strategy of the for-profit health care organizations is to buy nonprofit hospitals, create quasi-monopolies, then hack basic services and increase the price of services in order to boost their profits. This increase in the price of services makes it much harder for citizens to pay for adequate health insurance, and causes many people to be unable to get any services at all. - Other strategies include: (1) avoiding low-income areas by locating in states and neighborhoods with well-insured populations, (2) build hospitals without emergency rooms, neonatal intensive units, or burn units because these facilities often lose money, and worst of all (3) to skimp the quality of supplies, the level of cleanliness, and the level of staffing.
