Should Major Health Care providers be profit driven?

[erik_blank]

I have heard from various sources that not too long ago (50+ years?) the majority of major health care providers (i.e. Hospitals and HMO's) were mostly either non-profit or not for profit. In the early 80's near the height of the HMO push to take over the insurance industry with a generally real reduction in cost to the participants (with a subsequent slow down in immediate access to care) the business model moved from a not-for-profit one to that of a for profit model after lobbying by some of the larger HMOs changed the laws that regulated their industry.

Obviously, from what I've written above, I've got a rather slanted view of what happened in the past, but really don't have any hard facts. (just remembered snippits from listening to NPR in HS, and a questionable reference in Wikipedia...)

So here's my questions: Does anyone have references to how the medical industry worked in the period between 1940 and 1980? Was it actually primarily comprised of independent doctors and non-profit hospitals, or was it a much more integrated system than I have been lead to believe with large conglomerates controlling the majority of medical access?

Does anyone have any hard studies about the quality of care versus the ability to access care during what I have imagined to be the heyday of easy access and low costs health care and now?

Is it in fact a better world today now that the medical industry has turned to a for-profit business model, and I'm just not seeing it?

[Sins of the Fleche]

Medicine is better as a whole today than it was a few decades ago because we've made strides forward in technology and understanding. With our understanding of genetics, etc. that's so much deeper than it was back in the 50's, 60's, 70's, etc., there's really no comparison between medicine today to that of 20 so years ago.

However, medicine isn't completely profit-driven. If it were, every single ER and physician would turn away those without insurance and/or the ability to pay out of pocket, because why admit and work-up a patient presenting with chest pain in the ER if that patient can't pay 1/10th of the cost involved? While I would agree those with a good policy or can pay get much better care, medicine isn't completely profit driven yet.

That being said, I do think the health insurance industry and a good deal of hospital networks and health provider networks are more driven by dollars than anything else. Something should change, but I think it can't just be in medicine. Costly procedures are done simply to cover hospitals and physicians from overzealous and greedy lawyers seeking an easy malpractice suit and score. Patients are forced to have expensive visits because they eat trans-fats and smoke like a freight train for 30 years. Our society and lifestyle is largely to blame for the costs, and our overall societal philosophy on doing well financially promotes a profit-driven mentality.

Do I think we have a perfect system right now? No. Is it even a good system? Maybe. I think the secret will be to find a middle ground between focusing on profits versus pure healthcare provision. Hospitals and physicians need to make money to cover expenses and provide for their loved ones, but not at the expense of pricing patients out of getting healthcare.

Just my 2 cents.

[keith]

Costly procedures are done simply to cover hospitals and physicians from overzealous and greedy lawyers seeking an easy malpractice suit and score.

Although it should be noted that since nearly all hospital physicians are not salaried they also gain financially.

A cynic might suspect collusion.

[Inquartata]

I have heard from various sources that not too long ago (50+ years?) the majority of major health care providers (i.e. Hospitals and HMO's) were mostly either non-profit or not for profit. In the early 80's near the height of the HMO push to take over the insurance industry with a generally real reduction in cost to the participants (with a subsequent slow down in immediate access to care) the business model moved from a not-for-profit one to that of a for profit model after lobbying by some of the larger HMOs changed the laws that regulated their industry.

Interesting. I had not thought to look into the history angle.

However, health care was never "mostly nonprofit or not-for-profit", I think. My grandfather's second wife, who recently died at the age of 108, was an LPN and owned and operated a private nursing home for many years before and after WWII. So the for-profit model did exist.

OTOH, the GAO report cited here: http://en.wikipedia.org/wiki/Non-profit_hospital

alleges that today much of some sectors of the health care industry are non-profit or not-for-profit:

"In 2003, of the roughly 3,900 nonfederal, short-term, acute care general
hospitals in the United States,9 the majority—about 62 percent—were
nonprofit. The rest included government hospitals (20 percent) and for-
profit hospitals (18 percent)."

So if Medicare, Medicaid, VA health care, Indian Affairs health care, and so on, forms the majority of the health care provision system in this country, and the great majority of hospitals are non-profit...we seem already to have a "public health care system". And yet these, quite without the horrid, filthy profit motive, have still managed to see costs run amok!

And this is to be remedied by---increasing public control and market share still more?

Plus, from some of what I've been reading, it looks as though maybe the rise of big HMOs and the whole insurance issue can in large part be traced back to the government making premiums tax deductible to employers during WWII, making insurance an even more valuable fringe benefit than it already was to circumvent wage controls and help attract workers in a chronically labor-short environment.

Maybe we are being led down the garden path, when we are told that government is the solution?

[Hauptman]

Plus, from some of what I've been reading, it looks as though maybe the rise of big HMOs and the whole insurance issue can in large part be traced back to the government making premiums tax deductible to employers during WWII, making insurance an even more valuable fringe benefit than it already was to circumvent wage controls and help attract workers in a chronically labor-short environment.

Maybe we are being led down the garden path, when we are told that government is the solution?

You're right, tax exemptions are never the answer. If one person gets a tax exemption (deduction) then someone else has to make up the difference.

So no more tax deductions for homeowners!! I'm a renter and I'm tired of subsidizing them!!

And no more tax deductions for having kids!! I don't have kids to deduct so why should I subsidize those who want them? Hell, why shouldn't they have to pay MORE taxes for those kids? Aren't those kids benefitting from the gov't spending of those taxes like everyone else?

[Inquartata]

Well said, sir!

They should also pay a tax whenever they are on my lawn!

[jeff]

I checked off several of the "for profit" boxes, as well as the mandatory "this poll is flawed".

Profit motive can lead to innovation and all kinds of good things, yet it's not the only way (Penicillin was not discovered as part of a profit making venture) and it can also lead to knowingly covering literally fatal flaws in a product (eg: Vioxx) or the situation reported today at http://www.nytimes.com/2009/08/05/he...t.html?_r=1&em where unnamed ghostwriters "emphasized the benefits and de-emphasized the risks" of hormone treatment in articles for technical journals - the writing and treatments both paid for by Wyeth, and the connection between the actual authors and the manufacturer unknown to the journals.

More notably, profit motive can lead to both over-treatment ("the patient has money or good insurance so let's do a wallet biopsy") and under-treatment ("reimbursals are too low or the patient has no money, so to heck with him") as well as outright refusal to provide service ("patient has preexisting condition").

So, while profit motive can be grand, unchecked it can also be harmful, and people can and do die because of it. Moderation in all things - profit motive checked by regulation and public sector for the gaps and unprofitable parts. All of one or all of the other would not be the right answer.

[Bayou Bum]

(Penicillin was not discovered as part of a profit making venture)

I'm not sure I agree that Flemming had no profit motive. I do think it is interesting to note that if it weren't for his inheritance he wouldn't have had the finances for his research and if he hadn't been on the rifle team he wouldn't have gotten into research.

So, with Obama's Estate Taxes or Death Tax and the left's desire to outlaw guns, Flemming would not have discovered penicillin.

I am also pretty sure that almost all the research and great strides in medicine and health care have been due to profit motive.

[jeff]

I'm not sure I agree that Flemming had no profit motive.

Who cares if you agree?

Do you have a shred of evidence that he had a profit motive? here? Sir Fleming worked as a researcher his entire career without "going commercial". If turning a buck was his motive, he certainly gave no sign of it. He didn't patent it, nor did the previous researcher who noted that effects of penicillium on bacteria.

BTW, it's "Fleming", not "Flemming". If you're going to make up weird claims about him it kind of harms your credibility if you can't even spell the man's name.

I do think it is interesting to note that if it weren't for his inheritance he wouldn't have had the finances for his research and if he hadn't been on the rifle team he wouldn't have gotten into research.

So, with Obama's Estate Taxes or Death Tax and the left's desire to outlaw guns, Flemming would not have discovered penicillin.

Oh boy is that a bizarre stretch. Inherited money won't go away because of estate taxes. Are you quite sure that no taxes were levied on the inheritance that came to Fleming? No, I didn't think so.

And the coincidence of the rifle team being crucial to his research - oh, that's really tin-foil hat territory. Nice going.

I am also pretty sure that almost all the research and great strides in medicine and health care have been due to profit motive.

You have evidence to support this? Probably the biggest strides have been due to proper sanitation and water supply - municipal services not particularly connected to profit. Hm.

It certainly wasn't in this case - penicillin. the major breakthrough of 20th century antibiotics were (gasp!) government projects: penicillin was mass-produced for WW II as were the other bacteriostatic drugs.

Further examples to show how wrong you are: Louis Pasteur, Robert Koch. Paul Ehrlich, Walter Reed, Albert Sabin, Jonas Salk. Academics, physicians and researchers, not visibly motivated by Mammon.

So, yah - profit motive has a useful part, but it's definitely not the exclusive driving thought you think it is. Funny as it may now seem in these days where "money is everything", a lot of medicine has been driven by altruistic people who wanted to better all of our lives rather than as a way to get rich. What an odd thought that seems to some people.

[Inquartata]

Profit motive can lead to innovation and all kinds of good things, yet it's not the only way (Penicillin was not discovered as part of a profit making venture)

You'd prefer to leave them to accident? From what I've read, Fleming's discovery was almost entirely serendipitous...

And I don't know how it was in the 19th century, but today even academic researchers tend to keep an eye peeled for possible commercial applications of their work. Successful ones can bring in big grants and yes, profits for universities and hospitals, and can make careers as a consequence.

I'd call that a pretty strong profit margin, myself, even if the "profits" are not always entirely monetary. It's not much of a stretch to wonder whether scientists choose what they will do based at least partly on the rewards breakthroughs can reap.

and it can also lead to knowingly covering literally fatal flaws in a product

Yes.

Of course, so can many other things, including ones which operate quite without the conventional profit motive.

More notably, profit motive can lead to both over-treatment ("the patient has money or good insurance so let's do a wallet biopsy") and under-treatment ("reimbursals are too low or the patient has no money, so to heck with him") as well as outright refusal to provide service ("patient has preexisting condition").

Sure.

But I can't see how any of the proposed reforms address this. Much less over-treatment due to fear of malpractice suits or at least lost patients, and government programs like can Medicare also motivate either practice as easily as can private ones...

[jeff]

You'd prefer to leave them to accident? From what I've read, Fleming's discovery was almost entirely serendipitous...

As soon as we can produce serendipity at will we'll have that problem licked

Seriously: these are two completely different and unrelated things: (1) motivation for research, and (2) how research discovers things. Consider that the invention of the Post-It note (is there a "TM" symbol here somewhere?) - a for-profit item - was also an accident.

In both the private sector "doing it to make money" and in the public sector, non-profit, doing for reasons other than money" discoveries and inventions can be due to serendipity/luck or diligent and exhaustive search. They are - here comes that word again! - orthogonal.

And I don't know how it was in the 19th century, but today even academic researchers tend to keep an eye peeled for possible commercial applications of their work. Successful ones can bring in big grants and yes, profits for universities and hospitals, and can make careers as a consequence.

Yes, that has been a trend that really emerged in the last 20-30 years. There are advantages: money flows to academic institutions for research (and researchers) they otherwise could not afford. There are disadvantages: academic integrity has been compromised because the results were influenced by the sponsors. It's neither wholly good nor wholly bad.

I'd call that a pretty strong profit margin, myself, even if the "profits" are not always entirely monetary. It's not much of a stretch to wonder whether scientists choose what they will do based at least partly on the rewards breakthroughs can reap.

Oh no - it surely can't just be money alone. Ego, fame, adulation, that shiny Nobel prize. There are lots of motivations besides the itch of curiosity (I think that's the indispensable one) or the desire to heal the sick, etc.

Why does Superman do all that goody-goody stuff? Surely he could make major bucks farming out his superpowers? I'm just sayin'

Yes.

Of course, so can many other things, including ones which operate quite without the conventional profit motive.

Yes indeed. I just have concern about the risks when an individual or company stands to personally make or lose a lot of money by covering up or revealing the truth. That's a substantial risk factor....

Sure.

But I can't see how any of the proposed reforms address this. Much less over-treatment due to fear of malpractice suits or at least lost patients, and government programs like can Medicare also motivate either practice as easily as can private ones...

Right - healthcare reform is not only "who is covered and how is it paid for", but also tort reform and a host of other important topics.