307 – Against the “medical-industrial complex”

Posted on November 23, 2014 by


Contrary to the XIXth century, whose Zeitgeist could be captured in pro-active “Progress,” we live in an age of sensible “Security.” Admittedly, the state has remained melioristic in outlook. The foremost social task, however, is perceived to be (a) preventing, (b) reacting, (c) building or re-building[1] rather than creating eutopia on the Aare.

In theory, one may agree with such a precautionary stance. In practice, things look a lot different. I would like to show the difficulty in the case of health policies. For, these preventive policies have given rise to the “medical-industrial complex,” a phenomenon that is likely to affect our future most severely.

My choice of the term is not innocent. It evokes a military precursor, with which it shares the aim of “prevention” and “security,” and which has arguably shaped the development of the hegemonic state ever since WWII. President D. EISENHOWER warned in 1961 about the dangers of the “military-industrial complex.” He worried that the preventive character of the defense system, once in place, would be self-perpetuating and endangering his country’s democratic processes.

The American president’s worry has eventuated: defense expenditures grew to heights of MADness. Surprisingly, it showed unexpected staying powers despite profoundly changing strategic security circumstances – a clear case of “path-dependent outcome.” The complex grew chaotically and even erratically during the Cold War in response to perceived (and often overblown) fears.[2] After the fall of the Berlin War it successfully morphed from massive reciprocal deterrence between states to prevention of asymmetric warfare. In fact, we live in a permanent “quasi-war” setting; “national security” is now a domestic as well as international concern, including ongoing worldwide surveillance of communications and militarization of police forces.

Now back to health care. Curing people of accidents and disease took off after WWII, when powerful anesthetics and antibiotics emerged. Demand for health services sky-rocketed. The provision of health care became a priority both for the state and the markets. Today the US spends 17.9 % of GDP on health care[3] followed by numerous developed countries with over 10 % (the EU as a whole spends less than 10%). By 2050, OECD countries could be spending 14% of GDP on both health and long-term care.[4] End-of-life treatment as well as care accounts for an important amount.[5] Health care expenditure dwarfs military expenditure (< 5% of GDP[6]) as well as education (5 – 7 % of GDP, but based on fragmentary data[7]).

Even more than improved medical treatment, better public health policies have led to the aging of the world population.[8] “According to the UN Population Division, 1 in 5 people are expected to be 65 or older by 2035.This dramatic growth in numbers and proportions, increased life expectancies, and energetic lifestyles, now enables us to live 20 to 25% of our lives in active retirement.”[9] – drawing on personal entitlements (pensions and health insurance). Not only have we created a novel “rentier” class – the old: we have put in place a system where “end-oflife” expenditures take up a significant part of society’s resources. Atul GAWANDE argues, [10] “We’ve created a multi-trillion-dollar edifice for dispensing the medical equivalent of lottery tickets – and have only the rudiments of a system to prepare patients for the near-certainty that those tickets will not win.”


Given the size of the health sector, one might legitimately wonder whether we have not created a “medical-industrial complex” surpassing even the military-industrial one in its impact on society. They share certain characteristics.

Like security from war, health is a basic aspiration of the society as a whole: we are all ready to spend “what it takes.” While war might be (hopefully) prevented, even at the cost of spiraling expenditures, death is inevitable for each of us. There is a point of no return, or a point where prolongation arrives with a substantial drop of quality of life. This transition point from curative to end-of-life medicine is difficult to ascertain. Treatments are meted out well beyond what would be wise to do.

Information asymmetries. Just like military expertise, medical knowledge is highly specialized. Few can judge an appropriate diagnosis, therapy, and end-of-life treatment. Meanwhile, we have moved from an authoritarian stance (doctor knows best) to an informative one (client chooses best, if properly informed). Perversely, this may lead to “doctor- and therapy-shopping”[11] and denial of one’s medical situation; an increase in end-of-life expenditure ensues. A corollary is also adversary-defensive medicine, which significantly increases costs.[12]

Third party payor system. Just as in warfare, where the costs are borne by society as a whole, insurance models underlay all health care expenditure: the tendency to want “the best” is wide-spread. In addition, neither doctors nor patients are directly confronted with the economic consequences of treatment choices. Complexity is taken as an indicator of quality, crowding out more appropriate treatments. Overspending is systemic.

Fixed-cost-driven provision of care. Health care, as an industrial enterprise, requires huge infrastructure investment and training of personnel; they represent sunk costs – to be recovered over many years. Once such investments have been made – often in a competitive fashion – there is a tendency to push for their use irrespective of necessity[13] or desirability.

Manias and panics. Given the speculative character of all preventive measures, mass media emerge as agenda-setting (do we talk about the problem?) and agenda-framing (what options are on the table?) instruments of public discourse.

The very success of health care is creating huge unforeseen problems: people live longer in retirement, and their end-of-life expenditures grow in no relation with the outcome. Fixed-cost rigidities  challenge our ability to change strategy. The drain on national resources, on the other hand, could overwhelm aging societies, particularly if sustainable growth should be below the level needed to fund the health care system. The votes of the “retired block,” incidentally, might challenge political efforts to renegotiate entitlements.

The “medical-industrial complex” is not narrowly marketing itself to the aged. Increasingly, it is diversifying and targeting rare or extreme conditions among the young, for which it develops profitable markets.[14]

The economics of the search for extreme cures also grounds in our refusal to develop a heuristic for the value of life itself (though society has put an implicit value of the consequences of death[15]). This emotionality has led to erratic to absurd patterns of spending. We have a situation where millions may die for lack of basic and cheap medical care; meanwhile society is prepared to award $ 89 million to the estate of a 38-year old woman with advanced metastatic breast cancer, whose health insurance company had refused to cover further highly questionable and expensive treatment.[16]

What lies ahead? Contrary to the case of military expenditures, where the state makes decisions for all citizens, in the realm of health individuals have a voice in determining the experience of their death. Horrific encounters of their loved ones with the “medical-industrial complex” are turning away many people. The wish for best possible “quality-of-end-of-life” is spearheading the drive, though economic considerations hover in the background. The hospice movement, which emerged in the UK in the 60s, is spreading fast in many countries – including the US. Palliative care is emerging as an alternative.[17] Much spontaneous self-help is on the way. One of the perverse effects of the “medical-industrial complex” is to neglect the training of geriatric specialists (in the US, not enough are trained to replace those retiring).

Once more, I might say, we have an instance where experience, and not discourse, is likely to carry the day in the end. Moral and political leaders in my country are showing the way. Successful referenda on aspects of the matter are harbingers of an emerging popular consensus in this direction.

Rational discourse, which reflects the deep-seated conservatism of culture, is likely to slow down the process, but not change it. On the other hand, the ensuing polarization may render unmentionable certain widespread practices. Aporia might ensue- not for the first time. Imperfectly, birth control was practiced widely in the XIXth century already.[18] It remained an unspoken “taboo” until the pill made it the self-evident life-style, obviating the discourse about it as well.


[1]           In the international sphere this it is framed in terms of “Responsibility to prevent.” http://bit.ly/1v2grNQ For its application, see e.g. Walter C. SODERLUND – E. Donald BRIGGS (2014): The independence of South Sudan: the role of mass media in the responsibility to prevent.  Wilfried Laurier University Press, Waterloo, Ontario.

[2]           See e.g. Eric SCHLOSSER (2013): Command and control. Allen Lane, London. Also: Andrew J. BACEVICH (2010): Washington rules. America’s path to permanent war.  Holt, New York.

[3]           http://bit.ly/1zj813j The outcomes in the US do not seem to justify the overhang of expenditures as compared with other OECD countries. http://bit.ly/1GOdHri

[4]           Across all Organisation for Economic Co-operation and Development nations, public health care spending is projected to rise from 5.7 per cent in 2005 to between 7.7 per cent and 9.6 per cent by 2050, and long-term care could more than double or possibly treble to between 2.4 per cent and 3.3 per cent of GDP over the same period. http://bit.ly/1v2x6Sj http://bit.ly/1oKfGXJ

[5]           “The roughly 6 percent of Medicare patients who die each year make up a large proportion of Medicare costs: 27 to 30 percent.” http://nyti.ms/10YlrWL

[6]           http://bit.ly/11h22kz

[7]           http://bit.ly/1u0ZnVx

[8]           “In the more developed regions, the population aged 60 or over is increasing at 1.0 per cent annually before 2050 and 0.11 per cent annually from 2050 to 2100; it is expected to increase by 45 per cent by the middle of the century, rising from 287 million in 2013 to 417 million in 2050 and to 440 million in 2100. In the less developed regions, the population aged 60 or over is currently increasing at the fastest pace ever, 3.7 per cent annually in the period 2010-2015 and is projected to increase by 2.9 per cent annually before 2050 and 0.9 per cent annually from 2050 to 2100; its numbers are expected to rise from 554 million in 2013 to 1.6 billion in 2050 and to 2.5 billion in 2100.” http://bit.ly/1xsfkFC

[9]           http://bit.ly/1yyjnzu

[10]          Atul GAWANDE (2014):  Being mortal. H. Holt, New York. (pg. 171)

[11]          A good example is the increase in C-sections. While no “optimal percentage” may be ascertained, it is doubtful that medical necessity underlies the fact that in Italy C-sections are four times those in Holland (where home delivery is prevalent). Huge differences obtain between regions in Italy, with Naples topping the pack at over 50%. http://bit.ly/1umuL27 See also: http://bit.ly/1vzzNLj

[12]          Development of ubiquitous “best practice” standards and documentation of procedures leads to increased cost levels. Litigation adds another significant layer to this situation.

[13]          Particularly in surgery, doctors are under pressure to meet operating room and bed occupancy “targets.”My amusing example is the hospital system of the Canton of Bern. In 1870, a law was passed that all citizens should be able to reach a hospital after a half-an-hour ride. Hospitals were scattered across the landscape accordingly. They still stand, and many of them are being upgraded. The private system has added new ones. In the eventuality, people will go to the “best,” not the nearest hospital.

[14]          Examples to my mind are the attempts to extend human reproduction beyond the limits of age or other physiological or psychological disabilities. Surrogate motherhood is but one example. Career planning may now force potential mothers to freeze eggs for later re-implantation http://bit.ly/1uNHDPq

[15]          See e.g. Cass R SUNSTEIN (2005) : Laws of fear. Beyond the precautionary principles.  Cambridge University Press, Cambridge.

[16]          Atul GAWANDE (2014):  Being mortal. H. Holt, New York. (pg. 175)

[17]          See e.g. Gian Domenico BORASIO (2012): Über das Sterben. Was wir wissen – Was wirb tun können – Wie wir uns darauf einstellen. Dtv, München.

[18]          Theodore ZELDIN (1970): Conflicts in French society. Anticlericalism, education and morals in the XIXth century. Allen & Unwin, London.

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