August 25th 2001

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Articles from this issue:

COVER STORY: Cloning: time for PM to take a stand

LAW: AFA joins High Court action over IVF

CANBERRA OBSERVED: 2001 Census: strange role of Bureau of Statistics

National Affairs: New business and agriculture lobby launched (FABA)

Agriculture: Apple import decision to be reviewed

Straws in the Wind

Trade: Minister's equanimity as US lamb exports get the chop

Government is committed to manufacturing: Senator Minchin

Historical Feature: Rural movement has message for today

Comment: Bendigo puts the 'bank' back into rural and regional Australia

Health: The bottom line and medical ethics clash

MEDIA: Vanishing trick; Abbott: the latest round

BOOKS: 'PC, MD' by Sally Satel - Political correctness in the medical profession

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Health: The bottom line and medical ethics clash

by Bob Browning

News Weekly, August 25, 2001

More than 2,500 of Australia's doctors now work for big health care corporations. An increasing number finds the offers for their medical practices too lucrative to resist.

Corporations, like Mayne Nickless, are not as yet contractually requiring doctors to adhere to specific referral patterns. But the essence of corporatisation is to achieve "vertical integration" - the lucrative linking of medical practices with pathology, radiology, pharmaceutical and other ancillary services, takeover bids to incorporate health insurance funds as well look to be on the corporate horizon. Eventually they could be in a position to make doctors offers they can't refuse.

The Lucky Country's health system used to be the envy of others around the world. Its balance of public and private medicine clearly provided far greater equity, universality and overall affordable quality than either the nationalised British system or the American corporate system were able to achieve.

Even today, the US system leaves 40 million Americans without any form of health care whatsoever. The rest are plagued by corporate "managed care" that limits treatments in the quest for shareholder profit.

Popular demand for a bill of Patients' Rights to control managed care companies and for an effective universal health care system has become an on-going if largely unsuccessful theme of US domestic politics. Corporations still dominate the commanding heights of political power in Washington.

The private sector of the Australian health system used to be conducted predominantly at the level of personal practices. Private hospitals and clinics were mainly operated as small businesses, often by doctors themselves. Hippocratic professionalism permeated the training and organisational behaviour of Australian doctors. It ensured an appreciable degree of internalised as well as organisational control over individual greed. Professional ethics was a powerful factor in keeping clinical decisions predominantly in the patient's interest.

Now, however, national health policy is driven increasingly by the mantra of privatisation, corporatisation, deregulation, and so-called competition policy. Policy pressure is towards deprofessionalisation - pushing doctors to become just another modern "flexible workforce" of skilled technicians at the beck and call of corporate managers applying the usual "rational" profit-maximising priorities.

Ideological belief rather than evidence convinces economic rationalists that their policies constitute the magic cocktail that will cure all health system ills. As for consenting doctors, they may yet find they have been sold a lemon. The lucrative offers dangled before them now may well turn to squeeze as corporations secure their grip over private practices - especially if the corporate tentacles draw private health insurance into their vertically-integrated nets.

If current trends proceed unchecked, a possible, if worst case scenario for Australia's health system is that a small number of big corporations, even an oligopoly of vertically integrated multinational corporations, may come to dominate our health system. Both Medicare and the medical profession as we knew it will be dead ducks. The driving force of health care priorities and decision-making could become the corporate bottom line, not the needs of individual patients and the nation's overall health status.

"Big Pharma"

The giant pharmaceutical corporations constitute yet another force in the commercial erosion of traditional medical professionalism.

Drug companies are already well known for trying to sway doctors' clinical decisions. Company representatives - often bearing gifts - constantly visit doctors' surgeries. Hardly a local meeting, let alone an overseas medical conference, occurs without drug company sponsorship. Conferences are generally held at elite tourist locations, sometimes with subsidised fares and accommodation for wives and children.

Recently, overseas drug companies, mostly American, drew media headlines over their attempts to influence the Federal Government's selection and pricing of products under the Pharmaceutical Benefits Scheme.

Evidence is emerging that Big Pharma has also been exerting influence over some of the world's most prestigious medical journals.

At an international meeting this year in Philadelphia, all the leading medical journals, including The Lancet, The New England Journal of Medicine, The Annals of Internal Medicine and The Journal of the American Medical Association, teamed up to challenge the giant drug companies.

The journals intend to publish a joint editorial in September sounding the alarm over inappropriate drug company control over medical research, including attempts to misuse prestigious medical journals for their own special interest purposes.

Their action is a response to recent cases in which defiant and whistle-blowing medical researchers charged drug company sponsors with withholding results of their research or trying to have medical journals present the results in the most favourable way.

Ethical medical research has traditionally been based on research community cooperation and open publication rather than commercial-in-confidence competition. The aim of the ethically-motivated has been to encourage and accelerate new research developments for the public good rather than control development for private interest. The research ideal was more an open co-operative of scholars rather than the secretive rivalry of businessmen.

Commenting on drug corporation attempts to utilise the medical journals for commercial marketing and defensive propaganda, The Washington Post said (August 6, 2001):

"The authors who receive top billing on drug studies published in respected, peer-reviewed journals are usually medical school professors who are experts in their field, but much of the research is paid for, and in large measure carried out by drug companies with an enormous financial stake in the outcome. Company employees usually collect and analyse the data, and they often decide how it should be presented and write the reports."

Drug companies dominate the funding - and therefore the nature and direction of much bio-medical research. This extends even to some large studies that purport to test the safety and effectiveness of medicines scientifically.

Thanks to the often maligned activist groups like Oxfam and Medicins Sans Frontiers, we now know, for example, that only 11 of the 1223 new chemical entities developed in the two decades to 1996 were for treating the ailments afflicting the poor majority of the world's population - resurgent TB, malaria, meningitis, and other virulent epidemics.

Desperate need is not the motivator of the brunt of medical research these days but rather economic demand - the preparedness and ability of potential buyers to pay the prices. Many prices are set by the market power of corporations rather than by the free market competition that neo-liberal rhetoric insists its policies are producing.

Ideologically anti-statist policies discourage independent taxpayer-funded research. There is an on-going decline in the number and the resourcing of public not-for-profit institutions where the agenda and priorities are more likely to be transparent and accountable in the public interest. Funding is inevitably associated with influence. Corporate funding now extends even into university medical research faculties.

Both the local corporatisation of doctors and the international corporatisation of medical research adds to the fears of those who think that today's so-called rational economic policies erode the ethical and moral institutions on which capitalism itself, let alone the public good, depends.

In order for capitalism to be more creative than destructive, obsessive concern for profit-maximisation needs to be tempered by an understanding of what human societies need to thrive and how non-commercially orientated institutions and their ethics must continue to be able to contribute.

Previous articles by Bob Browning are available at

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