Philadelphia: Why are Corporations closing a Hospital and an Oil Refinery?

This past week the Philadelphia Inquirer reported that Hahnemann Hospital, as well as the Philadelphia Energy Solutions oil refinery are shutting down. If the corporations that own these facilities get their wish, thousands of jobs will be eliminated.

The closing of the oil refinery comes after a major fire at the facility. That fire had the potential of releasing hydrogen fluoride gas. This kind of leak could have affected 1.1 million residents in a seven-mile radius. Hydrogen fluoride is extremely dangerous and potentially fatal.   

The Inquirer also reported that because of the refinery closing, the already exorbitant gasoline prices will increase. Today, waiting times in emergency rooms might be as long as twelve hours. Because of the hospital shutdown, those waiting times might become even longer. The question that I ask is: Why?

In the capitalist system goods and services are produced because of a policy known as supply and demand. Corporations hire workers to produce goods and services to supply the demand of the market. What the press and the educational system rarely mention, is that the demand for commodities is different from what people actually need.

Certainly there is a need for health care. People also need gasoline to operate our cars. So, if there is a demand for these goods and services, why are corporations closing these facilities?

The answer to this question lies in the fact that corporations will only invest in providing goods and services when there is a profit to be made. This raises another question. If prices are exorbitantly high, why aren’t corporations profiting? We can begin to answer this question by looking at how hospitals function.

Economics of Health Care

An appendectomy is one of the most basic surgeries. About 47 corporations profit from that procedure. Those corporations are financed by banks that collect interest on their investments. The procedure is usually paid for by insurance companies, that also profit. Then, there are the advertising agencies that promote all those corporations. We might keep in mind that while banks, insurance companies and advertising agencies profit off of health care, no one who works in these enterprises actually cares for patients. 

Then, there are the drug companies that are some of the most profitable corporations. In other words, hospitals are only one of many corporations that profit because of the routine functioning of health care in this country. In addition to this, Hahnemann Hospital receives more than $57 million from the federal government to train 100 residents every year.

When we look at this enormous amount of money used for health care, we see why the United States spends more money, per person for health care, than any other nation in the world. One difference between health care in this country and other nations is that here health care here is much more profitable.

The closing of Hahnemann Hospital follows the closure of hundreds of hospitals in this country. Before this closure, several other hospitals closed in Philadelphia that include: St. Joseph’s Hospital, Parkside Hospital, Metropolitan Hospital, Germantown Hospital, Medical College of Philadelphia, and Graduate Hospital. About fourteen maternity wards have also closed in this area. I don’t think it is unreasonable to speculate that patients have, and will continue to die, because of these hospital closures.

Years ago, there was a shortage of nurses, and hospitals gave out sign-on bonuses to attract nurses. Now, many of those nurses will need to look for jobs in a job market that is saturated. Yet, the President argues that the economy is doing great and the stock market is climbing to new heights. In fact, none of the candidates running for office has any proposals for keeping the hospital or the refinery open.

We might also consider that workers produce all of the wealth that exists in the world. Without doctors, nurses, housekeepers, dietary workers, and maintenance workers, hospitals wouldn’t function. The owners of hospitals rarely, if ever, provide any of these services. Yet those owners, of all the health care related corporations, profit from health care in this country.

I worked as a housekeeper in Philadelphia area hospitals for ten years. I can testify that the work is stressful, and demanding for all of the workers. The rate of pay clearly doesn’t keep up with rising costs.

Philadelphia and the crisis of overproduction

There is a construction boom in the city, and new town houses are going for $400,000 and up. There are two Comcast buildings in the city worth over one billion dollars each. Because of a tax abatement plan, the owners of all of this new construction will not have to pay city taxes for ten years.

Yet, hundreds of thousand of people in this area don’t have enough food to eat, or a place to live. The educational system in the city has been cut back to the tune of hundreds of millions of dollars. Philadelphia happens to be the poorest of the largest cities in the nation.

I also worked for twenty-one years in two auto parts factories. Both those factories closed down, eliminating thousands of jobs. The Philadelphia Inquirer reported on the reason for one of those plant closings. They wrote that there was an “excess capacity.”

This is the fundamental reason for the hospital and refinery closures today. There is more health care available than can be profited from in this country. There is more gasoline on the market that can be profited from.

In other words, a central problem with capitalism is the crisis of overproduction. Economic crisis’ erupt because there are more commodities on the market than can be sold at a profit. Karl Marx and Fredrick Engels mentioned this in their Communist Manifesto. They argued in the year 1848, that in capitalism there is a disease of “overproduction.”     

This is why corporations invest hundreds of billions of dollars every year in advertising. They need to continually increase sales to counteract their declining rate of profit. When the supply is more than the demand, at their prices, they eliminate jobs.

We might consider that Native Americans lived under a completely different system. Yes, their system was difficult in many ways. However, when the Native Americans had an overabundance of the things they needed, they had a party and celebrated. Today, when the capitalists feel they overproduce, they eliminate jobs and actually create conditions of scarcity.

Recently the United States government stiffened the trade embargo against Cuba. They have also increased trade restrictions against Venezuela and have frozen their assets in this country. The government then threatened war against Iran. Finally the government has placed thousands of immigrant children in concentration camps.

I believe there is another way. In January of this year, there was a column in the New York Times by Nicholas Kristof about the Cuban health care system. Kristof argued that Cuba has three times more doctors per capita as the United States. Infant mortality in Cuba is lower. This means that about 7,500 children die every year because the United States doesn’t have Cuban health care.

Clearly the health care system in the United States is more technologically advanced. However, Cuban doctors give routine checkups to all pregnant women and children. This is the primary reason why Cuba has a lower rate of infant mortality than this country.

The inescapable conclusion to this state of affairs is that we need a government that makes human needs our top priority. In this country, the closures of Hahnemann Hospital and the Philadelphia Energy Solutions Refinery are clear examples of how people who have power believe that profits are more important than human needs. Today working people have a legitimate right to demand that Hahnemann Hospital remain open. This blog gives the facts that show how the argument that health care in this country is not profitable is absurd and nonsensical.