Jul 26, 2009
Unhealthy Profits
Everyone agrees that reforming American healthcare requires reducing costs. We spend far more per capita than any other modern country, with significantly poorer outcomes, including millions of citizens without insurance.
Of course, there’s less agreement about which costs most need cutting. Defenders of the status quo oppose anything that might impact their already adequate care. They offer little in the way of solutions and would prefer to table the issue for another twenty years.
Single-payer advocates point out that the major difference in America’s healthcare bill, compared to other nations, is that some 20% of every healthcare dollar goes to administration. Most other nations (and our own medicare system) spend less than 5%.
Sounds bad, but calling it “administrative costs” conjures a picture of large bureaucracies filled with secretaries, clerks, and mid-level managers who spend all day doing paper-pushing tasks in wasteful, inefficient ways.
Actually, “administrative costs” = corporate profits. The 20% of healthcare costs that only Americans have to contend with is the money that goes to mega-salaries for insurance, pharmaceutical, and HMO “administrators”, plus the dividends these industries pay to their stockholders, along with the necessary costs of maintaining such profitable businesses — advertising, public relations, and political lobbying.
For instance, during these months of healthcare reform, the pharmaceutical and insurance industries are spending millions every day on lobbying, the money targeted to legislators on key committees. But those aren’t bribes — they’re administrative costs.
Let’s be clear: this huge bucket of money going to “administrative costs” has nothing to do with delivering healthcare — does not pay for a pill, or build a hospital, or compensate a doctor or nurse. Yet it is wrapped into the we-pay costs of insurance, pharmaceuticals, and doctor visits. Fifteen to twenty percent of every dollar we spend on healthcare goes to people who do not contribute to actual patient care. They are the lucky owners of lucrative financial rackets: money-making machines that transfer cash from the pockets of the many to the tax shelters of the few.
They represent the very antithesis of “health care”: they do not care about anyone but themselves and their actions produce sickness at every level of American society.
Which is why a public, non-profit option is essential to any real reform. First, because it eliminates virtually all of the “costs of doing business”: a public-run, non-profit system would not have to spend money selling itself or buying politicians, would pay no huge salaries, and would pay no shareholder dividends — the American public would be the shareholders and our dividend would be decent, affordable care for all.
Second, it eliminates the profit-motive. Beyond the dicey morality of profiting on human misery — as when insurance companies deny life-saving patient-care to boost shareholder dividends; or drug companies charge ridiculous sums for their pills while blocking access to much cheaper generics — it’s terrible economics.
When powerful elites control a vital human need such as healthcare, free market capitalism becomes a total sham. The notion that sick people will shop around looking for the best deal on heart surgery, or that the insurance and drug companies compete to deliver their goods at the lowest possible price, is pure fairy tale, though more Grimm than Disney.
What really happens is that desperately ill people will pay whatever it costs to get better. No time for shopping around, or negotiating, or moving to a better market. Healthcare profiteers take advantage of that desperation and charge as much as they can get away with. Greed trumps compassion and healthcare costs keep rising.
Every penny of profit that someone takes from a healthcare transaction is a penny less that goes to helping sick people. The soaring of corporate profits in the healthcare sector coincides precisely with the fast rising costs and the fast increasing ranks of the uninsured.
This does not mean that those engaged in the actual work of delivering healthcare should not be well-payed (though nobody should be making millions). Like other essential social needs, healthcare should be managed as a public utility, with prices and wages regulated for the greater good.
Instead, we’ve let healthcare become a private utility, managed by corporations. Corporate profiteering has ruined healthcare in America. It has taken what should be a basic human right and turned it into a selfishly protected privilege for the few.
The overfed and well-insured warn of government-run medicine, of rationing care, of long lines, of bureaucrats getting between you and your doctor. Yet corporate-run, profit-driven medicine has led to those very results. And it will only get worse until — like every other advanced nation in the world — we remove all profiteering from the practice and delivery of medical care.
Michael Sky | CommonHealth
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