Many Americans have lost trust in our health and medical care systems with only 28% expressing "a great deal" or "quite a lot" of confidence, according to Gallup's most recent survey, down from 78% in 1975. Americans are angry about record level insurance premiums, sky high amounts of consumer cost sharing and medical debt, massive corporate consolidation, financial exploitation by private equity firms, gaping inequities in care, and much more.
While most Americans view these dysfunctions as distinct problems, they miss the essential reality that all these manifestations are tied to the politico-economic revolution called "neoliberalism" that captured American society in the early 1980s. At the time of President Ronald Reagan's first election in 1980, many commentators called his win "the end of the New Deal," that era of progressive reform that President Franklin Roosevelt launched in 1933. That 48-year era saw the creation of Social Security, Medicare, Medicaid and other essential programs that helped working- and lower-class Americans to survive.
The term "neoliberal" refers to aggressive and free-wheeling capitalism sometimes called "free market fundamentalism." Economist Milton Friedman was the most recognized promoter of the neoliberal movement. He famously wrote a New York Times OpEd in September 1970 titled: "A Friedman Doctrine‐- The Social Responsibility of Business Is to Increase Its Profits" declaring that business had no obligations to customers, workers, communities, and only to their stockholders. While the nickname for the 1970s was "the 'me' decade," the attribute for the 1980s was "the greed decade," a period of economic deregulation that expanded aggressively in subsequent decades.
Reinventing medical care was not a dominant preoccupation for neoliberals. But the broad power to rewrite the economy's rules could not leave US medical care untouched in its wake. In Reagan's first year, his Federal Trade Commission and Department of Justice guardians rewrote the nation's anti-trust guidelines to make it easier for large corporations to swallow up lesser competitors. Between 1980 and 2020, the sky was the limit for most corporate consolidation. Today, many economists regard corporate consolidation as the primary cause of our out-of-control medical spending.
Those wanting to understand why and how American health and medical care systems got so dysfunctional must understand the neoliberal movement and how it transformed so many of American society's economic and political fundamentals. I considered counter hypotheses to explain medical system dysfunction: managed care and health maintenance organizations, government regulation of Medicare payment, fraud and abuse, along with others. None can compare with neoliberalism's impact.
"If change is to be for the better," wrote the late and renowned economist Victor Fuchs, "it should be based on an understanding of why things are the way they are." Americans want solutions to disappearing trust in our health and medical care systems. My goal is to help them understand how we got to this place and to offer ways forward from here.
