Let’s *Really* Solve Health Care in the U.S.

Posted on June 15th, 2013 in Commentary by EngineerBoy
Sick Profits

Sick Profits

The Affordable Care Act (aka Obamacare) is the latest MacGuffin in the decades-long struggle to figure out health care in the United States.  Meaning, in the current debate it appears that the key to solving health care lies in enforcing and/or fixing and/or repealing Obamacare.  However, I think our focus has been misdirected from the true underlying issue, which is that over the last several decades we have moved to a health care infrastructure that is primarily for-profit.

To illustrate, picture if you will a theoretical health care organization, let’s call it Proactive Preventative Health Associates (PPHA).  Now picture that PPHA lives up to their name in that they proactively manage the health of their patients and foster proven preventative measures to significantly reduce the incidence of manageable health issues (cardiovascular problems, diabetes, cancer, etc).

If PPHA is a for-profit organization, their success in creating a healthy customer base will result in a reduction of profits, and the better PPHA does at reducing or preventing recurring, long-term, expensive health care issues the worse they will do as a business entity, until such time that they could conceivably put themselves out of business by being good at what they do.

If PPHA is a non-profit organization, however, the improvement of the health of their patients means they are successful, and frees their resources to focus on more urgent or needy patients and issues, because there are no stockholders or investors watching the bottom line.

So, a for-profit health care organization has two conflicting and irreconcilable motivations.  First, the (assumed) goal of maximizing the health of their patients, and second, the fiduciary goal of maximizing the health care expenses and profitability of their customers.

These two adversarial forces cannot be reconciled – they simply cannot.  Health care and profits do not go together, because if they are combined we are creating a situation where those who we trust to keep us healthy will actually be motivated to maximize our healthcare spending.

These are not theoretical noodlings, fyi.  If you were to read this article, you would find a case of a for-profit hospital that was allegedly sedating patients until they had trouble breathing, and then performing unnecessary tracheotomies at great expense (and profit).  Not only would this constitute fraud, it also may have resulted in the deaths of patients who would have otherwise survived.

Less sinister, but also illustrative, this article discusses (among other things) a study that indicated that for-profit nursing homes appeared to use significantly more sedatives and significantly fewer staff to manage those in their care.  While this might be good news to a profit-motivated investor, it would be disheartening if it were your mother they were keeping sedated because it was cheaper than creating an active and engaging environment for her.

You may find the concept of a completely non-profit health care infrastructure to sound bizarre and potentially socialistic.  While it would be a radical change, it is not without precedent in our everyday lives.

To wit, picture again another theoretical organization – Premier Fire Fighting Services, Inc. (PFFSI).  PFFSI is a for-profit firefighting service that exists in your community instead of your current Fire Department.  PFFSI charges for every fire they put out, and the bigger the fire the larger the charges (and profits).  Also, other than instances where lives are in immediate danger, PFFSI has no requirement to help you if you don’t have approved fire insurance that they accept.

Now, if PFFSI worked hard in the community to educate the populace on proper fire safety procedures, and worked with governmental agencies to enact and enforce stringent fire codes, they would cripple their business and reduce their profits.  But from society’s perspective, if a fire is allowed to burn then it can spread, causing even greater damage, so it is in the shared interests of society to respond aggressively to any and all fires, lest they spread and cause damage (physical, emotional, financial) across the larger community.  This is, again, not a theoretical noodling, and an eerily similar situation is discussed in this article.

Similar things happen with the privatization of prisons, where within a few short years we already have prison companies bribing judges to send more children to youth detention, in some cases ruining lives with false charges and life disruption, all for a few dollars.

Now, in any endeavor there will always be people who will break laws in order to make money.  However, in the case of health care (and fire fighting and prison operation), there are common ethical, societal, and fiduciary responsibilities that are directly at odds:

  • The service is necessary for a functional society
  • The service is unavoidable by any realistic means
  • The goal of each service should be to minimize the need for such service
  • If the service is for-profit, there is no motivation to reduce the need for such services, and there is a great motivation to increase (sometimes fraudulently) the consumption of such services

Bottom line – my take is that we need to step back from the debate over Obamacare and discuss the larger issue of profit-motivated health care, and if that’s the paradigm we want driving our health care.  Remember, nobody, and I mean NOBODY, directly profits monetarily if an individual remains healthy (and/or their house doesn’t burn and/or they don’t get sent to prison on exaggerated charges).

However, we as a society profit greatly, albeit indirectly and immeasurably, if the use of these services are minimized.  Once we have reduced (or eliminated) the profit motive from direct patient health care, we will then be positioned to tackle the subsequent issue of how we address health care for all Americans.

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