Because it is so central to the global economic crisis, a full page must be devoted to the healthcare crisis in America, and a thorough review of the history of its related medical infrastructure collapse.

America’s healthcare crisis is the result of 28 years of “managed care” looting of the healthcare system, and the subsequent collapse of infrastructure that had been built up over the 1946-1970s period, under the Hill-Burton Act. Hill-Burton, the 1946 Hospital Survey and Construction Act (named for its sponsors Sens. Lister Hill [D-Ala.] and Harold Burton [R-Ohio]) was committed to mandate and fund hospital-centered care logistics for all citizens.

In 1973, the destruction of the Hill-Burton system was signed into law by President Richard Nixon, as the Health Maintenance Organization and Resources Development Act. This Federal policy shift allowed private financial interests to interpose themselves between citizens and their providers of health care. In the guise of being care “managers,” these financial interests could profiteer by delimiting the care patients received and the amount of compensation given to hospitals, doctors, and others. In this way, the private financial interests precipitated the collapse of infrastructure.

- Hill-Burton Infrastructure Build-Up -

Near the end of World War II, on Feb. 26, 1945, Sen. Lister Hill told the Senate, that there must be a “long-range, scientifically planned health program … to the end that scientific health care is readily available to all our people….” The prerequisites, he said, include “adequate hospital and public health facilities.”

On Aug. 13, 1946, Law 725, known as the “Hill-Burton Act,” went into effect, as an amendment to the existing Public Health Service Act. Only nine pages long, the Hill-Burton Act mandated Federal and local cooperation and funding, to achieve the goal of having a community hospital in every county, and to guarantee hospital and related care to all citizens. In rural areas, the mandate was a ratio of 5.5 beds per 1,000, and in urban areas, the ratio was set at 4.5 beds per 1,000. During the initial years, 1946-50, 600 new general hospitals opened, with an average of 40 hospitals added per year through the mid-1960s.

At the same time that this hospital construction boom was providing many of the 3,089 U.S. counties with their first hospital ever, various public-health services and applied medical R&D programs were expanded. Polio and TB were all but eliminated, and other diseases were reduced. By the mid-1970s, the Hill-Burton goal of 4.5 beds per 1,000 was nearly reached as the national average. Amendments to the Hill-Burton Act in 1954 authorized funds for chronic care facilities, and, in 1965, the Medicare and Medicaid health insurance programs were begun.

Then came the shift.

In February 1971, President Nixon called for establishing health maintenance organizations, following a “cost containment” script provided by international financial circles which, in the same period, succeeded in imposing a series of globalization-serving measures. These included deregulation of utilities, privatization of traditional government functions, and international floating exchange rates—all intended to undermine national economies, while strengthening the economic position of the financial circles.

On Dec. 29, 1973, the new law allowing pilot-project HMOs went into effect.

Over the next 20 years, more laws and court decisions furthered the spread of “managed care.” The 1973 act gave a grant of $375 million for pilot HMOs, under the nominal excuse of “cost containment.” In 1975, this funding was expanded, overriding President Ford’s veto, and it continued until 1981. In 1976 and 1978, Congress gave HMOs more freedom of operation, including leeway to refuse to pay for certain treatments.

HMO enrollment grew steadily, using the inducement of lower premium rates. In 1978, there were 168 HMOs in operation, with 6 million enrolled. By 1990, there were 652 HMO plans, covering 34.7 million people; in 1996, 60 million. Today, an estimated 154 million people are enrolled in managed care; of these, 109.7 million are in PPOs (preferred provider organizations) and 44.3 million in HMOs.

- Corporate Health Control—and Profits -

The 50 largest HMO’s control 60% of the managed health-care market. The top five of these, according to Fortune, for 2009, are UnitedHealthGroup ($81 billion in revenue); Wellpoint ($61 billion); Aetna ($31 billion); Humana ($29 billion); and Cigna ($19 billion). Behind these companies stand echelons of the very same financial institutions now stealing tax money through the TARP and other bailout swindles.

In a sample of active HMOs at present, six banks show up among the top institutional owners: Bank of America, Bank of New York Mellon, Goldman Sachs, J.P. MorganChase, Morgan Stanley, and State Street. Also on the list is Barclays, the British giant which received U.S. bailout money via the AIG backdoor-bailout scheme.

“Managing” care, in order to make profits takes vast layers of personnel, time-consuming paperwork, and, of course, mega-salaries for top officials. The conservative estimate is that 30% of private “managed” health-care costs are for administration, and it may be as high as 50%.

In contrast, the administrative costs for the Federal Medicare program run at 2%. A 1990s Government Accountability Office study found that the United States could fund a single-payer national health program to cover all uninsured Americans simply with the savings in administrative costs.

In the 1990s, dozens of states passed laws against notorious HMO practices, because Washington refused to protect the public interest. States took rearguard actions to outlaw “drive-by” childbirth, and prohibit HMOs from rewarding doctors for denying expensive treatments, and so forth.

Despite this, Washington consistently gave sweetheart deals to the financial crowd behind the HMOs, including entry into Medicare and Medicaid programs. The HMO Act of 1976 began to offer HMOs as an option under Medicare, and this was expanded in 1983. In 1997, came the Medicare “Advantage Plan” of managed care. On Dec. 8, 2003, Bush signed into law the “Medicare Prescription Drug Modernization Act,” which began Medicare Part D “managed” prescription purchases in 2006. At the same time, government payments to non-HMO Medicare and Medicaid care providers have been cut.

The reality is, that the U.S. system of health-care delivery—based on regional networks of hospitals, anchoring programs of education, sanitation, and epidemiology, as well as screening and treatment—is falling apart, because of the economic crisis, and the cumulative impact of the “managed care” HMO swindles. State and local officials are fighting rearguard skirmishes to keep the doors open. The number of community hospitals has fallen from nearly 7,000 in the late 1970s, at the culmination of the Hill-Burton drive, down to under 5,000 today. The national average ratio of beds-per-1,000 persons has dropped from 4.5 in the 1970s, down to 3 today. Hundreds of counties have lost their last community hospital.

The lack of medical emergency rooms is now itself an emergency. From 1992 to 2003, the nation’s emergency departments decreased by 15%, while over the same time period, millions more people have been seeking emergency room treatment, according to the American College of Emergency Room Physicians. Public-health services, diagnostics, and all kinds of other programs are likewise in sharp decline. For example, mammography X-ray procedures have dropped 16% from 2000 to 2008. The number of certified mammography screening sites has also dropped 13% from 9,910 in 2000, down to 8,670 in 2008.

There are staff shortages of all kinds. As of 2000, the total U.S. public health-care workforce numbered 448,000, which was 50,000 fewer than in 1980. Looked at per capita: in 1980, there were 220 public-health workers per 100,000 U.S. residents; but in 2000, this had fallen to 158 per 100,000. It has not improved since then.

The reality of the present day crisis is that President Obama’s “Health Care Reform” is in effect an even more austere ”cost containment” script than the one provided to Nixon in the 1970′s, this one being embellished by the HMO’s themselves, who Obama invited to the White House in May of 2009 for the purpose of applying HMO best (looting) practices into public policy under the guise of cost containment.

Even more disturbing than the administration’s alliance with the predatory HMO’s is the new “comparative effectiveness” healthcare mantra being driven by Peter Orszag at the OMB which resembles the sort of health care rationing proposed by Adolph Hitler during the economic crisis following the treaty of Versailles (which brought into power the Nazi regime).

Though it will offend many readers to compare Obama’s healthcare reform to the T4 policies of Nazi Germany, the economic and political parallels, unintentional or otherwise, are alarming.

In closing, I leave it to you, the reader, to explore the facts, the history and the parallels between the economic crisis of 1929, and the political responses to that crisis, with the political response to today’s economic crisis, and its impact on one of the most critical government functions as a guardian of the public welfare – public heath care. This article is merely a primer for those considerations.

(excerpted, paraphrased and edited from the May 2009 issue of Executive Intelligence Review)