A December 21, 1994 Wall Street Journal article described how the health maintenance organization (HMO) industry had amassed so much cash – 9 billion dollars to be exact – that they couldn’t figure out what to do with it all. Good news: they figured it out. Bad news: they invested in the tobacco industry.
According to tobacco companies’ filings with the Securities and Exchange Commission, Prudential Insurance Company (the largest supplier of health insurance and the largest owner of for-profit HMOs in the United States) has $248 million invested in tobacco stocks; Travelers, $88 million; CIGNA, $77 million; MetLife, more than $15 million.
A July 8 article written by Harvard physicians in the British medical journal Lancet likened this investment strategy to the slogan of a combination veterinarian-taxidermist: “Either way, you get your dog back.”
Some may say, “Morality aside, isn’t this a good investment?” Darn right it is. You figure a pack of cigarettes nets a large profit, has incredible brand loyalty, and it’s addictive. Furthermore, even though 1,000 U.S. smokers die each day from their addiction, the industry recruits 1,000 replacements daily by promoting their wares to children and people in the Third World.
What child could possibly resist the fabulous Joe Camel? Apparently not many. A study of children found that a staggering 91 percent of six year olds identifies Joe Camel as a symbol of smoking, and in the past four years smoking among eighth-graders rose 30 percent.
But to be fair to the HMO investors, they are flooded with profits, have billions of dollars to invest, and “have no choice but to invest in what the Standard & Poor’s index invests in” (according to a CIGNA spokesman in a July 8 Associated Press article). And after all, the market is amoral. Corporations answer to the shareholders, not patients.
Medicare and Medicaid programs are subcontracting to for-profit HMOs, Blue Cross plans (formerly not-for-profit) are selling themselves to investors, and Columbia/HCA (the world’s largest hospital chain) gobbles up hospitals faster than you can say “Philip Morris”.
Let’s face it: America is on a fast track toward becoming the world’s first corporate-run, for-profit health care system. We’re at a crossroads in health care, and the incongruity of the health insurance-tobacco connection epitomizes the collision of values.
I recently attended a forum on healthcare reform at the University of Texas at Austin. Dr. John Howe, president of UT Health Science Center in San Antonio, decried the effects of market-based changes on physician practice. Pharmacist Lee Strandberg discussed healthcare rationing in Oregon. Dr. Ron Anderson from Parkland Hospital lamented adverse market changes on hospitals. Dean Dolores Sands from UT-Austin Nursing School spoke from the heart and deplored the effects on patients and their families.
Last, Dr. Reuben McDaniel, a stately gentleman and professor at the UT-Austin Business School came to the podium and said, “If any of you in the audience were to keel over, I am the only one up here who cannot help you…. Since the medical community allowed costs to sky-rocket out of control, and government attempts at healthcare reform failed, that left business – the insurers – holding the reins. By default, we make healthcare policy and decisions.” What a sobering moment that was.
Be that as it may, it must never be forgotten that health care is a human service, not just a widget to be callously bought and sold. It is wrong for a healthcare interest to encourage and participate in the prosperity of tobacco companies, whose products addict and eventually kill people. Business that profits at the expense of society should at the very least feel our scorn. After all, shareholders and consumers also represent a principled citizenry.
Austin, Texas