Some critics charge that nothing short of a radical transformation of the health care “system” will stanch the hemorrhaging (see “The Growing Crisis of Health Care”), but what most people fail to realize is that a radical transformation of these institutions has quietly been underway for quite some time and now appears to have entered an accelerated phase, in which the commitment of public resources to public institutions is openly being absorbed into private, political “shadow” organizations.

The upheavals in health care may not be for the best, but even proponents of these changes would have to agree that they are radical, indeed.

These self-interested shadow organizations (HMOs, Big-Pharma, not-for-profit think tanks, venture capital spin-offs, etc.) have had a self-perpetuating, snowball effect on this process of change. These various components of institutional health care appear so massive and complex that they are beyond the scope of critical analysis. Perhaps the place to begin an investigation is here in this community: to ask who represents these agents of radical change, and to look at what they’ve been up to in our own backyard.

It’s All About Outsourcing: Roswell & Kaleida

In the early nineties, the elimination of civil service at Roswell Park went hand in hand with the establishment of a public benefit corporation, a new governance structure that allowed more “flexibility” in hiring and firing. This was an important milestone, placing MBA managerial positions above physicians in the health care hierarchy at the oldest cancer research center in North America.

Kaleida Health was then formed in 1998. Its chief executive, Tony Gioia, was a veteran of the Roswell Park privatization project. The shadow organization for Kaleida was called Chimilgen for the three hospital systems that it absorbed (Children’s, Millard Fillmore, and Buffalo General). This not-for-profit was set up as the paymaster for numerous six-figure salaries of non-medical, administrative “experts.”

Gioia was subsequently named as George W. Bush’s ambassador to Malta, not for his medical expertise but for his political fundraising prowess.

The conversion of institutional health care to a “business” reinforced itself as political contributions led to complete control over the process. While many health care critics ardently believe that something’s got to give and soon, the reality is that there are profit centers that have yet to be exploited. Public relations campaigns will continue to provide the sugarcoating for rather strong medicine.

The financial outsourcing that began with HMOs in the eighties has reached a point at which the real power over health care institutions has been externalized into quasi-governmental public benefit corporations and other somewhat parasitic, not-for-profit structures that act as shields from public criticism and oversight.

ECMC: A Business That We Don’t Need

Converting the Erie County Medical Center to a public benefit corporation became an imperative, when the state refused to absorb the skyrocketing costs of health care at that hospital, which traditionally shouldered the burden of treating the poor, indigent, and uninsured with funding from the county.

"I don't believe ECMC should be a county-run, stand-alone facility. We don't need to be in the direct business of delivering that type of health care," County Executive Joel Giambra told Business First in late January of 2002. That statement reinforced the concern with profits that now drives the public health agenda in this country.

The Giambra administration steadfastly refused to commit the county to future funding of ECMC beyond the next two years. This was part of the desired flexibility of the public benefit corporate structure.

John Orlando, president of AFSCME Local 1095 at ECMC, spoke to Alt in an interview last year about the crisis. “They can’t guarantee anything,” he said, “and that’s the problem. Everyone seems to want this PBC but no one knows if it’s going to raise revenues or not.”

The county will no longer be directly responsible for ECMC. Theoretically, the PBC will be able to fund itself, but no one knows for sure. A fiscal crisis that was largely a product of politics drove the change.

Clearly, there are moneymaking treatment centers within ECMC. These could wind up getting cherry-picked. One example of that is the cardiac treatment center, which has been somewhat profitable for ECMC in the past. And the man that Giambra charged with giving ECMC the once over for winners and losers is Neal Fatin. Coincidentally, Fatin is also on the board of Buffalo Cardiac Group. Could there be some outsourcing of this specialty in ECMC’s future? Stay tuned.

Bioinformatics: A Genetic Approach To Power Aside from casino gambling, the only major economic revitalization package being touted for this area by Governor George Pataki has been bioinformatics. The price tag is expected to exceed a quarter of a billion dollars before it’s all over. But will this investment result in increased jobs or more affordable health care?

One reason that few have been able to critically penetrate Governor George Pataki’s media hype surrounding UB's “Center for Excellence in Bioinformatics” is the rhetorical strength of an appeal to higher authority, in this case the scientific “genius,” Jeffery Skolnick.

Skolnick’s work, most recently at the Danforth Plant Science Center in St. Louis, focuses on creating shortcuts that will help determine the function of proteins in plants. One cause of immediate concern is the fact that the Danforth Plant Science Center’s only non-university partner is the Monsanto Corporation, the worldwide leader in genetically modified foods. The CEO and president of Monsanto, Hendrik Verfaillie, also sits on its board of trustees, along with representatives of other agro-biz companies and, of course, the World Bank.

The research center being founded here will compete with numerous other well-established facilities engaged in this same endeavor. Launching a pre-emptive strike against critics who might ask whether this whole initiative is just another high tech crapshoot, Skolnick declared in The Buffalo News that, “Failure is not an option.”

What, then, is the measure of success for this new wrinkle in public health spending? We still don’t know, but it would not be unreasonable to guess that it might be the rollout of a profitable medical product for a company outside of Buffalo that obtains the intellectual property rights at a fraction of their true cost.

What Does It All Mean?

The buzzword “bioinformatics” may have attained its current level of effectiveness through the fact that it is meaningless. In a committee meeting of the Erie County Legislature last year, one of the Republican legislators dutifully asked Erie Community College President Bill Mariani what the school was doing to prepare its students for careers in the burgeoning field of bioinformatics. Mariani was caught off guard. Perhaps he didn’t realize that it was essentially a rhetorical question.

“I’ll bet if I went around the room and asked everyone for a definition of ‘bioinformatics,’ I’d have ten or twelve different definitions,” Mariani replied. He went on to say that ECC couldn’t formulate a curriculum without any communication on what was required.

Despite the investment of massive amounts of public money, we’re still not sure of what we’re buying.

The ethical quagmire of genetic engineering that the bioinformatics movement in Buffalo has not addressed publicly, to date, reflects the same rush to judgment that we’ve seen in other political spheres. In the case of bioinformatics, it’s another case of playing catch-up, this time in the race for genetic patents that will maintain and reinforce the model of remote control over public health.

*** The market-driven orientation of health care continues at a breakneck pace. What this means for people requiring low-cost access to health care is that, as customers, those entering into the system become part of the product cycle. What this “industry” will create in the long run is tertiary to the bottom line in the present. Can health care as we know it be hazardous to your health? It can, indeed, as long as enough people continue to believe that it’s a guaranteed right under the current system. By John McMahon

“It seems to me that the real political task in a society such as ours is to criticize the working of institutions which appear to be both neutral and independent; to criticize them in such a manner that the political violence which has always exercised itself obscurely through them will be unmasked, so that one can fight them.” – Michel Foucault. Detailed discussions about “the health care crisis” can cause one’s eyes to glaze over. In the nineties, major health care reform was boiled down to a referendum on the character of Hillary Clinton and then disappeared. Now, the debate du jour is over whether Sen. Edward Kennedy will side with Republicans to make a deal on a prescription drug plan.