Eric Harrington – Who Profits from For-Profit Healthcare?

Why is Healthcare operated for profit?  The free-market fundamentalists tell us that free market competition will always improve the result to the consumer through competition.  And yet, in the very same breath, they will insist that creating a government run non-profit health insurance plan would make it impossible for insurance companies to compete because they have to make profits. They said the same exact thing about Medicare 50 years ago. It wasn’t true then, and it isn’t now.  There is nothing an insurance company can innovate or improve really through competition. They only pool OUR money, and estimate the risk. Costs go up, they simply pass it along.  Only the investors win and they win BIG in for-profit American healthcare.

It is ironic that about half the hospitals in the U.S. seem to be able to operate non-profit quite handily, and they have not ended capitalistic life as we know it. And in general, the quality of non-profit hospitals is better than their for-profit competitors. Their mission is service, not profit, and that is the long standing tradition in healthcare, one only recently challenged by aggressive profit motives.  But non-profit hospitals haven’t put the for-profit sector out of business, (although they should have, if the consumer was better informed) they just consistently gave their patients better quality care for the same money.. They are the best hospitals, the best places to work, the best environments for care.  They are running into serious financial challenges, but those challenges are a product of our damaged, for-profit health system, and in particular the insurance industry, not the hospitals themselves. They have become fiscally inefficient, but that inefficiency has been caused by the system they operate in.  A huge portion of a hospitals operating budget is spent simply trying to get the insurance companies to PAY.

It is the profit motive that has devastated our healthcare system.  In most types of business, for-profit competition drives down costs. Often quality as well, but at least it does get less expensive, and the company wins by reducing costs.  But for the healthcare insurer,  the more our healthcare costs go up, the higher the insurance profits go up, for their profit margins are easily preserved by simply raising premiums.  The more it costs, the more they make for the same work.  So there is little incentive to drive down costs, because it costs them money. Reducing costs only saves the customer money.

WE MUST MAKE HEALTHCARE NON-PROFIT.  Across the board.  Whether it’s a national single payer system, private non-profit, or a government operated non-profit insurance, running our healthcare system as a for-profit business is counter productive to the health of our nation.

~ by Eric Harrington on August 29, 2009.

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