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COVID-19 and Privatization in Germany


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Source: Counterpunch

The Covid-19 crisis and the privatization of many healthcare systems are by no means separated entities – the one speeds up the other. While health politicians tell us, the health of our people is important, the privatization of our health system continues unabated. Despite its public perception as a welfare state, this applies very much to Germany as well.

Health privatization follows one of neoliberalism’s key ideologies: the Privatization of Everything. This is supported by the simple but effective hallucination that the private does it better than the public system. There is less bureaucracy, no red tape, no nanny state, etc. Meanwhile in the UK, the impact of neoliberalism has become clear on Britain’s NHS.

Sometimes, one gets the impression that Germany’s public healthcare system has been reduced to such an extent that there are no significant capacities left to cope with the Coronavirus pandemic. Today, public health is measured in available ICU beds – no longer on the health of the people.

Privatization means that democratic control is taken out of the equation as the state. The democratic state is disempowering itself. This is engineered by neoliberal parties, politicians, and supportive mass media.

The reason that hospitals in many countries cannot cope with Covid-19 patients is not an unfortunate circumstance. It is the outcome of four decades of systemic mismanagement concocted on the backdrop of neoliberalism.

To camouflage the often unnecessary suffering of Covid-19 patients in an insufficient and deliberately under-prepared health system, politicians tell us that, these are unfortunate circumstances as if the planned, and systematic downgrading and thinning out of public health were dependent on some illusionary fortune or misfortune.

The actions of Germany’s federal government during the Coronavirus pandemic are inextricably to its privatization policy. It all started when neoliberalism was first introduced to Germany by Merkel’s ideological predecessor, Helmut Kohl (1982 to 1998). Social-democratic Gerhard Schröder’s action who followed super-corrupt Kohl, continued the process of neoliberal privatization.

Kohl’s girl, as Merkel is known in Germany, followed Schröder. All three: Kohl-Schröder-Merkel are responsible for decades of privatization. None of this can be seen simply as unfortunate. Instead, what Germany faces since the beginning of the Coronavirus pandemic is the outcome of a systemic mismanagement based on privatization.

It is based on a sheer endless chain of policy decisions that introduced several variations – if not waves – of privatizations. This did not happen isolated from neoliberalism. Instead, hospital privatization has to be seen in the larger context of neoliberalism.

In part, neoliberalism’s task is to take care of the profit interests of large capital organizers. This takes precedence over public health. Instead of social welfare, it furnishes the welfare of rafts of private consultants. To an ever increasing degree, they are not only involved in deciding what is going to be privatized. Today, they have been made the actual decision makers! Their decisions are later legitimized by politicians and carried out by for-profit corporations.

Germany’s federal and state governments, as well as its democratic parliamentarian system itself can no longer escape the logic of neoliberalism having followed it for four decades. As a consequence, public heath suffers and thousands die.

Yet, the health of the population is defined by the WHO. According to the WHO, health is to be understood as, “a state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity.” Under neoliberalism’s zealous and very missionary quest, this becomes less and less important as other considerations – efficiency, profits, shareholder, value, lean hospital management, etc. – take priority.

Yet, at the beginning of the Coronavirus pandemic, Germany was widely considered well-prepared. The media gave the impression that politics has been completely overrun by Corona – how unfortunate! Yet, Germany hadn’t prepared for such a kind of pandemic. In fact, Germany elected not to be prepared. In 2013, the WHO called for national preparations for the next pandemics due to an expected new SARS coronavirus.

Germany’s parliament, the Bundestag, decided in 2013 to conduct a pandemic risk analysis. This led to concrete precautionary measures. Masks, protective suits, disinfectants, and the like were purchased. But in a privatized system based on Managerialism’s cost-benefit ideology, the storage of medical materials (masks and protective clothing for health workers) – was deemed by the corporate apparatchiks of health management to be of no value under its cost-benefit ideology.

Preparing a population against a pandemic simply does not pay off in a privatized, profit-oriented system. Based on expert advice, i.e. neoliberal apparatchiks, the agreed preparation for the next pandemic was not carried out. Yet, the Coronavirus pandemic came. As a consequence, Germany’s government – just as the governments of the USA and other EU states – was able to assure the people to have done the right thing.

Often framed as “a leading institution” for epidemic and pandemic research in the western world, the private Johns Hopkins University (JHU) stated in its Global Health Security Index (GHSI) of 2019:

among 195 countries, the (most privatized) health system in the USA is in the very first place as best prepared for pandemics; the important EU states such as Germany were considered well prepared – far ahead of China, for example!

Incidentally, during the first months of the pandemic, the JHU also had more up-to-date and more complete figures of the infection process in Germany. It said, for example, that Germany’s Robert Koch Institute (RKI) is a competent authority. Forgotten is the fact that its Nazi past included human experiments on Jewish KZ inmates.

The elite JHU University, which is financed by multi-billionaire foundations (Bloomberg, Niarchos, Gates), has several times more staff than Germany’s RKI and the EU Medicines Agency (EMA) combined. For institutions like JHU and Germany’s RKI, privatization is almost a natural part of life.

Both provide support when private investors buy up public hospitals. They also agree when these investors – for a hefty return – merge these companies into large corporations built on dozens of small institutions. It pushes health monopolies.

This kind of privatization has been pursued for a long time in Germany. After the end of the “semi-socialist” GDR (East-Germany), the aforementioned chancellor Kohl sought the advice of McKinsey. It suggested the Health Structure Act which came into force in 1993. As a consequence, Germany’s longstanding cost recovery principle was replaced by Managerialism’s performance-based remuneration.

Since the time when neoliberalism and Managerialism held sway, the costs that are accumulating in German hospitals are no longer calculated according to treatment. Under Managerialism, they are calculated according to the technical, financial, managerial, and personnel costs for each individual case.

The managerialist accounting method was developed by the elite private, Yale University. Its system was introduced in the USA in 1983 under Ronald Reagan. Reagan was not only the ex-press secretary of General Electric – a very large manufacturer of medical equipment – he also gave the world the ideological hallucination that government is the problem, not the solution.

Imagine for a minute, the Coronavirus pandemic without a government. Today’s 5.6 million deaths would have been 560 million deaths – if not more – without a government, without government regulations, without government-ordered and -enforced lockdowns, mask-wearing, without government hospitals, without government’s financial support for people and businesses, and so on. Anti-government ideologies like neoliberalism’s the free market will fix it can kill people.

Meanwhile, the neoliberal concept of the lump-sum payment-oriented healthcare system is directed towards Managerialism’s ideology of productivity. This supports private investors who are only interested in a return of investment.

Under this, medical treatments that are deemed as being expensive by corporate health apparatchiks, are carried out as quickly as possible. It is done with the highest possible use of machinery and with the lowest possible involvement of human personnel. Germans call this Apparatemedizin– machine-medicine. It works to the determent of patients but is highly profitable.

Spiced up by Managerialism, Apparatemedizin also means, the faster a hospital bed is cleared of a human being (for the next case) – the more productive the hospital becomes. The individual is dehumanized to a figure on a managerial Excel spread sheet. Worse, many countries have adopted this model. Yet, it got worse.

With the Health Insurance Modernization Act (modernization implies neoliberalism’s pro-business regulation) of 2004, Germany’s social-democratic-environmentalist SPD/Green government under Chancellor Gerhard Schröder added even more privatization to the mix. As for German party politics, it was another milestone in the conversion of Germany’s former rather radical environmentalist Green party into neoliberal party suitable to be in power.

With this neoliberal policy in force, additional payments were forced onto patients for medicines and preventive examinations. They were added under neoliberalism’s user pay principle. Meanwhile, German health insurance companies were also allowed to abolish funeral benefits. Funerals must now be paid by the relatives of the deceased – a substantial cost for people, but a nice cost-cutting measure for insurance corporations.

Since that time, private investors were also increasingly permitted to buy up public hospitals and to combine them into large corporate entities with dozens of subsidiaries. The most known of them are Asklepios, Rhön clinics, Fresenius with FMC and Helios.

Incidentally, the famous Charité hospital in Berlin with an annual turn-over of €2.0 billion today, was once the traditional and the largest hospital in the GDR (East-Germany). After the demise of evil socialism, it quickly became one of the first organisation set to be part of the capitalism’s massive privatization during the takeover by West-Germany.

Today, the private Charité Facility Management (English titles are the latest fads in German Managerialism) includes numerous other private subsidiaries that provide catering, cleaning, laundry, logistics, mail service, laboratory services, patient documentation, transports, labour hire companies, etc.

This ensures handsome profits for investors and precarious and unhealthy, even hygienically dangerous working conditions for hospital staff, nurses, medical doctors, etc. The privatized Charité works closely with the private JHU. As a semi-governmental hospital, it provides virology advice to Germany’s government during a pandemic.

Unbeknownst to the public, Dutch private equity investor Waterland, for example, has bought up 120 rehabilitation clinics in Germany and formed a Median private rehabilitation chain from them. The chain’s corporate apparatchiks were assisted by McKinsey consultancy. Today, they are employing cheap doctors and low-wage nurses from impoverished countries in Eastern Europe. Thankfully, evil socialism is gone, so that rich countries can take their nurses and medical doctors to make even more money – perfect.

At the same time, corporate investors from Switzerland, France, the Netherlands, such as Ardian, Orpea, Korian, Atos, Diaverum, Omnicare, Sanoptis, Synlab, Colosseum Dental Group, Alloheim, Linimed, and Ameos bought more specialized clinics, nursing homes, nursing services, medical practices, and laboratory chains not just in Germany, but throughout Europe.

In Europe, as in Germany, health privatization has many faces. In 2015, for example, Germany’s government increased its contribution to the private Global Alliance for Vaccines and Immunization or GAVI to €600 million per year. GAVI was founded in 1999 by the Bill & Melinda Gates Foundation together with foundations of the major pharmaceutical companies. Germany’s Merkel government also made Germany part of the for-profit Coalition for Epidemic Preparedness Innovations (CEPI).

Last but not least, virtually all major digital corporations such as Microsoft, Amazon, Apple, Google, and Facebook belong to today’s largest investors such as BlackRock, Vanguard, State Street, Norges & Co. They also play a major part in the developing of for-profit digitized health services that are rapidly entering Germany.

Amazon’s subsidiary Amazon Care, for example, operates its own clinics and arranges appointments in medical practices. Yet, these corporations are also buying start-up companies that develop important projects in the field of tele-medicine, health monitoring, anti-aging programs, smart diapers and smart shoes, infection tracking, fitness and nutrition assistants, blood donation and organ donation platforms, as well as algorithms for collecting and evaluating disease data.

Of course, these corporations take advantage of the Coronavirus pandemic. Meanwhile, neoliberal-oriented governments are increasingly using their services – for a substantial fee. For the state overseeing the management of the pandemic, Germany’s government has engaged more private consultants as ever before.

Today, Germany’s health offices and administrative institutions remain asphyxiated in the ideology of neoliberalism fancying privatization. Never mind its negative consequences which can be off-loaded onto others under what neoliberal economists call “externalization”.

With the beginning of the Coronavirus pandemic, Germany’s public procurement law was virtually stopped – no more public tendering. Instead, Germany’s government has engaged even more private consultants who are now running the purchase of masks, video programs for universities, assisting health authorities, and even directing Germany’s ministry of health itself.

Worse, semi-fanatical privatizing politicians have been moored into Germany’s parliament. These were predominantly members of Merkel’s party, the conservative/neoliberal CDU. They push privatization in Germany’s Bundestag, its 16 state parliaments, and even in the EU parliament. Some of them are entrepreneurs and private consultants at the same time.

They not only “represent” (!) their voters, but also themselves as entrepreneurs, as well as for-profit companies. In fact, they are not only the best politician money can buy but they are also acting as privatization intermediaries.

Germany’s former health minister Jens Spahn is a privatization and digitization fundamentalist. Because of his intimate connection to the for-profit medic-corporation DocMorris (Netherlands/Switzerland), one of Germany’s prime medical journal, the Ärzteblatt, recently called Jens Spahn a DocMorris activist. Under the guise of democracy, capitalism rules.

Spahn had set up a department for digitization in his health ministry with managers from the privatized Bundeswehr-Informationstechnik GmbH(BWI). With the Appointment Service and Care Act (TSVG), Spahn drove the digitization of doctor’s appointments, electronic prescriptions, and digital health advices using AI, artificial intelligence.

His neoliberal privatization ideology suggested to him to use the Boston Consulting Group for Germany’s infection warning apps. The app itself was developed by SAP, Deutsche Telekom AG and Nexenio. Already in 2005, the German government under Chancellor Angela Merkel had founded the for-profit gematik GmbH.

Eager Spahn went one step further by spending €99 million Euros for consultations. Germany’s ministry of health and its ministry of economics have never spent as much on private consulting companies, as in the first Covid-19 year of 2020.

Spahn’s own ministry wasted €40 million on the notorious fraud-helper Ernst&Young (the fraudulent Wirecard). It organized the purchase of masks and protective equipment – for a handsome fee.

With the PR agency Scholz&Friends, Spahn signed a four-year contract for €22 million to give advice for public Covid-19 communication. Next to this, his conservative off-sider Altmaier (ministry of economics) paid €29 million to the for-profits IT service provider Init GmbH for a program to pay out Corona aid. Other consultants receiving German tax money are:

+ Accenture (the largest management consultancy in the world, which is restructuring Germany’s unemployment system and Germany’s job centers);

+ Bank Rothschild, McKinsey subsidiary Orphoz; and in addition to EY, there is also

+ Price Waterhouse Coopers (PWC), and Oliver Wyman, as well as the commercial law firms Noerr and Hogan Lovells.

Overall, Germany’s state not only sponsored for-profit companies and corporations, the ideology of privatization to legitimize all this came as part of the global master hegemony. Today, the ideology of neoliberalism has worked its way deep into Germany’s public health service.

The prime instrument of mass deception (Adorno) has been the unchallenged belief that “private industry is better, more efficient, and less wasteful.” This ideology has paved the way for a rampant deregulation – the synonym for pro-business regulation – of Germany’s health service leaving it unprepared for the current pandemic.

As a consequence, public health is no longer measured on public health needs. Now they are based on abstract formulas about hospital bed and ICU occupancy. This is designed to smokescreen the pathologies of a health system handed over to for-profit companies. As Chomsky once said, the mantra of Profit over People holds sway.

Thomas Klikauer (MAs, Boston and Bremen University and PhD Warwick University, UK) teaches MBAs and supervises PhDs at the Sydney Graduate School of Management, Western Sydney University, Australia. He has over 700 publications and writes regularly for BraveNewEurope (Western Europe), the Barricades (Eastern Europe), Buzzflash (USA), Counterpunch (USA), Countercurrents (India), Tikkun (USA), and ZNet (USA). His next book is on Media Capitalism (Palgrave).

Meg Young (GCA and GCPA, University of New England at Armidale) is a Sydney Financial Accountant & HR Manager who likes good literature and proof reading.

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