Health Care vs. the Profit Principle

It’s always nice to see the President take a principled stand on something. The man formerly known as “43,” and now perhaps better named “29” for his record–breaking approval rating, is promising to battle any expansion of government health insurance for children – and not because he hates children or refuses to cough up the funds. No, this is a battle over principle: private health care vs. government-provided health care. Speaking in Cleveland this week, Bush boldly asserted:

I strongly object to the government providing incentives for people to leave private medicine, private health care to the public sector. And I think it's wrong and I think it's a mistake. And therefore, I will resist Congress's attempt … to federalize medicine…In my judgment that would be -- it would lead to not better medicine, but worse medicine. It would lead to not more innovation, but less innovation.

Now you don’t have to have seen “Sicko” to know that if there is one area of human endeavor where private enterprise doesn’t work, it’s health care. Consider the private, profit-making, insurance industry that Bush is so determined to defend. What “innovations” has it produced? The deductible, the co-pay, and the pre-existing condition are the only ones that leap to mind. In general, the great accomplishment of the private health insurance industry has been to overturn the very meaning of “insurance,” which is risk-sharing: We all put in some money, though only some of us will need to draw on the common pool by using expensive health care. And the insurance companies have overturned it by refusing to insure the people who need care the most – those who are already, or are likely to become, sick.

I once tried to explain to a Norwegian woman why it was so hard for me to find health insurance. I’d had breast cancer, I told her, and she looked at me blankly. “But then you really need insurance, right?” Of course, and that’s why I couldn’t have it.

This is not because health insurance executives are meaner than other people, although I do not rule that out. It’s just that they’re running a business, the purpose of which is not to make people healthy, but to make money, and they do very well at that. Once, many years ago, I complained to the left-wing economist Paul Sweezey that America had no real health system. “We have a system all right,” responded, “it’s just a system for doing something else.” A system, as he might have put it today, for extracting money from the vulnerable and putting it into the pockets of the rich.

But let’s not just pick on the insurance companies, though I wouldn’t mind doing that-- with a specially designed sharp instrument, over a period of years. Sunday’s Los Angeles Times featured a particularly lurid case of medical profiteering in the form of one Dr. Prem Reddy, who owns eight hospitals in Southern California. I do not begrudge any physician a comfortable lifestyle – good doctoring is hard work – but Dr. Reddy dwells in a 15,000 square foot mansion featuring gold-plated toilets and keeps a second home, valued at more than $9 million, in Beverly Hills, as well as a $1.4 million helicopter for commuting.

The secret behind his $300 million fortune? For one thing, he rejects the standard hospital practice of making contracts with insurance companies because he feels that these contracts unduly limit his reimbursements. (In a battle between Aetna and Reddy, it would be hard to know which side to cheer for.) In addition, he’s suspended much-needed services such as chemotherapy, a birthing center and mental health care as insufficiently profitable. And his hospitals are infamous for refusing to treat uninsured patients, like a patient with kidney failure and a 16-month-old baby with a burn.

But Dr. Reddy-- who is, incidentally a high-powered Republican donor – has a principled reason for his piratical practices. “Patients,” the Los Angeles Times reports him saying, “may simply deserve only the amount of care they can afford.” He dismisses as “an entitlement mentality” the idea that everyone should be getting the same high quality health care. This is Bush’s vaunted principle of “private medicine” at its nastiest: You don’t get what you need, only what you can pay for.

If government insurance for children (S-CHIP) isn’t expanded to all the families that need it, there is no question but that some children will die – painfully perhaps and certainly unnecessarily. But at least they will have died for a principle.

Comments

[shari]

Since restructuring my practice, I estimate my hourly wage at approximately 35/hour. This puts me in the upper third of my specialty, rather than in the lower 10%.

What is the hourly wage of the folks who post on this board? If they believe that physicians should work for free (in the ER or elsewhere) do they believe that everybody should be forced to spend approximately 30% of their time engaging in charity work (compulsory work at soup kitchens or cleaning up slum dwellings for example)?

Or is it only physicians who should be forced to work for free (as they are, in ERs)?

[shari]

Posters of hourly wages should include their "start up costs". For example, my teenager who is a lifeguard at the local pool has an hourly wage of 6.50 but had a start up cost of about 50 dollars (compared to a physician start up cost of over 200,000 dollars). She paid 35 dollars for the course, 12 dollars for a drug screen and 5 dollars for a t-shirt.

So. Lets hear it beginning with Barbara Ehrenreich.

What is your hourly wage?

How much do you pay for your office staff, rent, liability and the minimal education necessary to get your job?

What percent of your time is spent working at your usual trade for free (for example since you are a journalist, what percent of the revenues of your writing projects are given entirely to charity (for which you take no tax write off). Physicians, remember, can't write off their time.

Please notice, that I am not calling "charity" the vocational work that most Americans do because we enjoy it. I too volunteer to flip pancakes at my local church, teach bible study, and in the past I enjoyed tutoring local kids for free. I hope to do more of that when I am no longer a physician, and am a teacher with more time to call my own.

[buena]

Back up a minute: why, in this most prosperous and wonderful country, should anyone graduate with $100,000 to $200,000 worth of debt? There's no excuse for that.

[shari]

www.ama-assn.org/ama/pub/category/5349.html

As the above link will tell you, the average educational debt for the class of 2006 was 130,571

72% of graduates of US medical schools carry educational debt of at least 100,000

This debt is largely used to offset uncompensated care (read medicaid and uninsured) at hospitals in the university system. It is NOT paid to faculty.

I personally volunteer to teach medical students. They shadow me in clinic and on the ward. They are NOT useful, but they do keep me sharp. Last year, I was paid a total of 1,500 dollars for this work, as well as to give them two lectures. It is meant to be a token. Everyone who teaches medical students does so because we love medicine. My real salary comes from the patients I see.

[Solo]

After spending over 20 years working in the business side of healthcare services, I'm very familiar with "docs" and their problems and attitudes.

It's insane that anyone attempting to obtain a higher education is now saddled with enormous debt. It's not only the high income professions like doctors and lawyers that are graduating owning tens (or hundreds) of thousands of dollars.

The paperwork and regulation load is a real burden, but one that can be managed, especially in a group practice.

We live in a culture in which run-a-way capitalism has changed the nature of our society. It's it the extreme manifestation of the "me" generation and "rugged individualism" myth.

As for ER docs not getting paid that may apply to residents, but not those "hired guns" who work in ER under contract. Which since most of these "lease a doc" companies don't contract with insurance companies the doc fee is billed at the highest rate with each "service" (history, exam, procedure) charged separately.

Years ago it would have been possible, if she was willing, for Dr. Shari to pay off her debt by working in a rural or low income area. Remember the TV show Northern Exposure? Unfortunately, most of those opportunities no longer exist.

We are begining to see more and more physician groups publicly sponsoring universal health care. They understand as do the physicians who are part of Doctors without Borders and similar groups that healthcare is a basic human right, not a resource to be apportioned among the rich.

[shari]

I'm a neurologist. Federal regulations require that anybody who comes to the ER receive whatever care the hospital can provide, regardless of legal status or ability to pay. Everybody needs to be screened, even if they are using the ER in order to avoid an office visit (which would cost them).

Thus, if the ER physician says you need to come in and evaluate the patient, one needs to do this. To fail to do this, results in an automatic 50,000 dollar fine that is not picked up by malpractice insurance.

It doesn't matter that you are the only physician on call, and you had no sleep the night before.

It doesn't matter that it's your own child has been punched in the eye by the neighborhood bully and wants her mommy there to hold her while she cries.

You have to go in anyway.

Although hospitals do pay their ER physicians, and their hospitalists, the don't pay their consultants. Consultants bill whatever insurance or lack of insurance the patient carries. Mostly, due to the high number of illegal immigrants, none of whom carry health insurance, it is lack of insurance.

In my last practice there were two neurologists and we were on every other night. I left, and the remaining neurologist is now on every night (She has already handed in her resignation). I am currently in a practice with three neurologists and we are on every third night. We usually get 2 new patients each night for which we need to go in, and 5 phone calls spaced about every two hours during the wee hours of the morning. This is not paid for.

I believe that a national health system could work, but only if physicians had amnesty, like police officers and fire fighters. Regulation will also need to be slashed, because if you can't raise prices, then you need to cut costs.

Finally, while it may be true that "health care is a basic human right" so is sleep, and the right to have some time to spend with one's family.

We should have some rights too.

If my time can be confiscated by the state, then so should everybody's time. If physician's times can be confiscated by the state because health care is a "right" then journalists times should be confiscated by the state. Let Barbara Ehrenreich (who has not yet posted her hourly compensation) as well as all journalists, free lance writers, and other literate persons be forced under a 50,000 dollar penalty, to spend every third evening and weekend in the local elementary school tutoring underpriveledged kids in writing. After all an education is a "basic human right". Why should the children of the poor have less access to education than the children of the wealthy? Education is a basic human right, not to be apportioned among the rich. Yet few inner city children can write well. Wealthy parents do not send their kids to the NY city schools.

Let every lawyer be forced to spend every third weekend, and every evening preparing legal defenses for those unable to pay. Let them be fined 50,000 dollars each time they refuse to work for free, whether or not their child has a soccer game, whether or not their child is ill, whether or not they themselves are ill.

After all "justice" is a basic human right. Why should justice be apportioned among the wealthy? We should all have public defenders, and the lawyers should be enslaved to provide this free of charge.

Every right assumes a responsibility to pay for it.

So lets hear it Solo:

What is your hourly compensation, how much time do you spend taking care of the underpriveledged for free, and what are/were your start up costs?

What right have you to tell me that I should operate (flawlessly lest I get sued) on 5 hours sleep, and forgo most weekend activities with my children, so that you can indulge your "right" to whatever medical care you think you nee

[Solo]

Unfortunately, you appear to have chosen the wrong profession. You are obviously angry, overwhelmed,and burnt out.

Would you grant amnesty to the Dr. Swango(s) of the profession?

Of course, their should be provisions that only GROSS negligence or similar disgregard for the health and life of the patient should put a doctor's license / income in jeopardy.

I agree that all professions should provide some pro bono services.

And, when you start talking about responsibilities attached to rights, you're preaching to the choir.

However, I respectively suggest that you examine the reasons why you became a physician. From what you write it my be your vocation but it's not your calling.

[shari]

If a policeman commits murder he goes to jail. He does not get sued.

Similarly if a physician deliberately kills a patient he should go to jail. If he accidently kills a person due to incompetance he should lose his licence.

However the tort system is in place to enrich lawyers.
Police officers who fail to protect people because they arrived late to a domestic disturbance aren't sued for malpractice. Doctors are. Lawyers don't go into jails to learn if a criminal was roughed up so that that criminal can sue for pain and suffering.

As to my vocation, I've been a neurologist for 20 years. I have five separate specialty board certifications and 30 papers. But I didn't try to combine it with children when I was younger, and the hours in neurology have approximately tripled, while the compensation has dropped. You are right. I can't do it any more, but I am torn. When I retire, the only person in 300 miles who sees medicaid kids will be gone.

When I leave, somebody will die.

But at least my own kids will have their mother back. That's important too. I now know three collegues who have had children who commited suicide.

I wont let that happen to my kids. I can be a good teacher.

So. what is your hourly compensation, and what pro bono services do you provide?

[WW]

Wow.
I've been checking the archived comments for this site - intriguing discussions and debates.

Monica - if you are still reading this blog - would you happen to sympathize with the Christian Reconstructionists? I am getting that impression from reading your entries.

Barbara - I'm quite the devoted fan, having devoured both of you recent books (N&D, B&S) in a single manic evening of intense reading. Keep on keeping on!

WW

[Arwen]

Shari - The american system is brutally inefficient. The fact that medicaid pays so poorly is because they don't want doctors supporting medicaid. With greater societal input into training doctors and caring for the population, you wouldn't have such a horror story.
That's not to say that Canadian or British doctors don't have a complaint or two. They're not forced, however, to sell their soul to feed their children and pay off their student loans at the same time.

Universal health care is NOT as sloppy, inefficient, and hard on doctors and patients as Medicaid. That's exactly the point.

[shari]

Universal health care works in Canada and the UK because it is understood that patients can't get everything they want. If they go to an ER in the UK with a stroke they will be seen, but they wont receive clot busters in the 3 hour window. There is a neurologist shortage in both UK and Canada and therefore if the service is unavailable, it will not be provided, and people understand that you can't sue because something is not available.

Similarly, in the US if you need IV-IG for inflammatory neuropathy you will get it, whether or not you can pay. In the UK you won't. There is a list of procedures and therapies that are permitted and those that are not. There is explicit rationing.

Personally I favor explicit rationing. I think it is better than rationing by hassle factor which is the kind of rationing that happens in the US. However the American people have not been willing to accept limitations on care, and the American legal system, backs up their "right" to whatever care they want by law suits freely scattered.

I too favor universal health care. However the care delivered will not be as good as the care delivered now, and waiting lists for all people will become similar to waiting lists for medicaid now.

Since folks don't wish to hear this, they will not vote for politicians who tell them this, and instead prefer to believe that the lack of accessible health care is due to "greedy doctors" and "fraud and abuse".

By the way, I had a collegue who just paid about 100,000 to medicare for "fraud and abuse". His "fraud" consisted of letting patients who did not have health insurance pay only 10 dollars or simply writing it off. That's not allowed under federal guidelines. You can't have different payments for folks who can't pay. All you can do is to refuse to see them.

Shari

[shari]

Universal health care works in Canada and the UK because it is understood that patients can't get everything they want. If they go to an ER in the UK with a stroke they will be seen, but they wont receive clot busters in the 3 hour window. There is a neurologist shortage in both UK and Canada and therefore if the service is unavailable, it will not be provided, and people understand that you can't sue because something is not available.

Similarly, in the US if you need IV-IG for inflammatory neuropathy you will get it, whether or not you can pay. In the UK you won't. There is a list of procedures and therapies that are permitted and those that are not. There is explicit rationing.

Personally I favor explicit rationing. I think it is better than rationing by hassle factor which is the kind of rationing that happens in the US. However the American people have not been willing to accept limitations on care, and the American legal system, backs up their "right" to whatever care they want by law suits freely scattered.

I too favor universal health care. However the care delivered will not be as good as the care delivered now, and waiting lists for all people will become similar to waiting lists for medicaid now.

Since folks don't wish to hear this, they will not vote for politicians who tell them this, and instead prefer to believe that the lack of accessible health care is due to "greedy doctors" and "fraud and abuse".

By the way, I had a collegue who just paid about 100,000 to medicare for "fraud and abuse". His "fraud" consisted of letting patients who did not have health insurance pay only 10 dollars or simply writing it off. That's not allowed under federal guidelines. You can't have different payments for folks who can't pay. All you can do is to refuse to see them.

Shari

[shari]

Universal health care works in Canada and the UK because it is understood that patients can't get everything they want. If they go to an ER in the UK with a stroke they will be seen, but they wont receive clot busters in the 3 hour window. There is a neurologist shortage in both UK and Canada and therefore if the service is unavailable, it will not be provided, and people understand that you can't sue because something is not available.

Similarly, in the US if you need IV-IG for inflammatory neuropathy you will get it, whether or not you can pay. In the UK you won't. There is a list of procedures and therapies that are permitted and those that are not. There is explicit rationing.

Personally I favor explicit rationing. I think it is better than rationing by hassle factor which is the kind of rationing that happens in the US. However the American people have not been willing to accept limitations on care, and the American legal system, backs up their "right" to whatever care they want by law suits freely scattered.

I too favor universal health care. However the care delivered will not be as good as the care delivered now, and waiting lists for all people will become similar to waiting lists for medicaid now.

Since folks don't wish to hear this, they will not vote for politicians who tell them this, and instead prefer to believe that the lack of accessible health care is due to "greedy doctors" and "fraud and abuse".

By the way, I had a collegue who just paid about 100,000 to medicare for "fraud and abuse". His "fraud" consisted of letting patients who did not have health insurance pay only 10 dollars or simply writing it off. That's not allowed under federal guidelines. You can't have different payments for folks who can't pay. All you can do is to refuse to see them.

Shari

[shari]

dunno how that happened. sorry for the multiple posts

[Promentalbackwash]

Shari's posts bring up an interesting point. To what degree is the "debtor" model for education -- particularly for health care professionals -- screwing up health care in this country? When clinicians routinely start out their careers an eighth or a quarter million in the hole, before they ever earn a dime, of course it's going to impact the quality of care. No question about it.

The entire debtor model for education, IMHO, needs to be junked, and in particular nurses and doctors should be able to be trained for free or close to it. You can be your own lawyer if need be. You can't be your own doctor or nurse.

[stacy]

Everybody else pays for their education and is in debt. Why should we pay for Dr. Reddy's education? If college is free will that mean that taxes will be raised on people who didn't go to college?

[stacy]

Everybody else pays for their education and is in debt. Why should we pay for Dr. Reddy's education? If college is free will that mean that taxes will be raised on people who didn't go to college?

[shari]

Presumably. College and medical school is free in much of Europe, and taxes are more than double what they in the US. "Free medicine" is expensive.

[Promentalbackwash]

That's exactly what I mean, Stacy. No one should have to go into serious debt in order to get an education. The amount of debt people carry from that in this country is absolutely ridiculous.

[shari]

If college is free, (as it is in some countries) then somebody needs to pay for it. That usually means either increased taxes (Europe's taxes average 70% of income for the middle class) or printing money. Printing money causes runaway inflation (see Zimbabwe or Argentina).

If students (as in France) were paid to study and had free schooling, then somebody has to pay for it. In France this is achieved by high taxes on the nonliterate population (many of whom are islamic immigrants).

What I see is that everybody in the US is hurting and has noticed a gigantic drop in their standard of living. The reason for this is because the US government has been inflating the money supply by running up the national debt to pay for both her wars and for the Great Society programs. Thus, the value of the dollar now buys only about 10% of what it used to. The reason that this has not shown up in the official inflation index is that the official inflation index excludes energy, food, health care, and education. The dollar has been debased since Nixon took us off the gold standard (and had previously been debased when FDR confiscated gold and devalued the dollar then.

This will only get worse as the boomers retire, as the US government will be forced to print even more money to pay for their promised benefits. However the solution to this problem does not seem to be to be promising more benefits. The solution, would seem to be reducing debt, by living within our means.

As for solving the problem of medicine by making education free, don't make me laugh. The ONLY reason most residents remain in medicine is because they realize they can't do anything else until they pay off their student loan. They have to work the insane hours because if they switched and tried to get that "50,000 dollar a year public relations job" that Barbara was going after they would find themselves lucky to get a 20,000 dollar a job working at Office Depot. Then, that 150,000 dollar student loan would bancrupt them.

Similarly truck drivers (most of whom are independant) are now required to work about 120 hours a week in order to make 40,000. The reason they do so is to pay off their trucks.

It is debt that is killing our generation, and debt is what is tying people to jobs that have turned pretty horrible.

This includes not just our own debts, for student loans, mortgages or toys, but the debts our government took on to pay for the things we said we wanted.

Possibly we should consider doing without? When my grandfather developed crippling arthritis, he told me once "well, the doctors said there was an operation that might help, but I don't think so. Anyway there was your father in college."

It used to be that people didn't expect to retire.

Personally, my goal is to be free of all debt (including mortgage debt) in 3 years, and to have my kids college funds paid up. Then I plan to leave medicine, get a very much lower paying job, and live cheaply, maintaining my health insurance for as long as my kids are dependant on me. After that, I will probably give up my health insurance, but plan to die if I get ill. After all, by that time it wont matter what happens to me, the kids would be on their feet, and will be debt free.

That is the way my grandfather thought of money. He was right.

Shari

[mel]

Dennis Kucinich has proposed universal health care - no more profit for insurance companies.

[Anarcissie]

Generally, the opportunity for profit usually attracts entrepreneurs. As increasing numbers of them exploit it, and apply technology to production, the product or service become commodified and its price drops due to competition.

Obviously, this has not happened to medical care. That implies that profit per se is not the problem.

[Anarcissie]

shari: '... The ONLY reason most residents remain in medicine is because they realize they can't do anything else until they pay off their student loan. ...'

This doesn't explain why the residents got into medicine in the first place, if it was going to burden them with crippling debt. Same for the truck drivers.

[shari]

Residents get into medicine for the same reason that I went into medicine.

The subject was fascinating, medicine used to be both prestigious as well as an opportunity to do good, and we expected to pay off our costs relatively quickly.

For the most part, once we were accepted, we were never told about the debt. There were three thousand forms to sign and we signed them. We were also told that once we graduated it would be no problem paying off the debt. This is the reason that many undergraduates pay big bucks for college. They are not carefully instructed in what the alternatives are. In point of fact, both in time and in money I would have done better had I taken the price of my education (much less in those days) and bought a laundromat with it. I have suggested this career option to my kids, but right now one wishes to be a teacher, and the other is considering being a vet.

Why do most people get into debt? Because they believe that the money they spend, whether on a truck or on a career will be returned with a premium. It is the same reason that some folks get into debt to buy stocks.

However I think it is a mistake. I will be paying in cash once I pay off my mortgage, and I will be encouraging my children to do likewise.

[shari]

The reason that prices have not dropped in medicine is that we don't have a free market in medicine.

There are some segments of medicine that are profitable and are in fact being commodified. Urgent care is one of them, and increasingly physician extenders, and nurses are being trained to provide it on a cash on the barrel system. I imagine that the price of the routine ear infection will drop sharply, and that there will in time be as many cahs only-urgent care centers on each street as there are chiropractitioners. Chiropractitioners also enjoy a free market with people willing to pay cash on the barrel.

However serious medicine, when you have a stroke, when you have multiple sclerosis, when you have breast cancer is expensive. There are drugs that cost money, nursing care that costs money, and it requires frequent physician visits, not a single one. Since insurance is tied to work in this country, when somebody gets a serious illness like cancer, they become unable to work, and are likely to lose their health insurance immediately thereafter. If they qualify for disability (rare, and late) they will get medicaid. Otherwise they will be uninsured. Since Medicaid does not pay for costs, their care is subsidized by the folks who do have insurance. This drives up their costs, and drives down physician profits.

This is why Dr. Reddy does not wish to have a chemo center. All cancer centers (like trauma centers and burn centers) lose money. That money comes from patients who have more profitable diseases (like heart disease)that are likely to allow them to keep working, and hold on to their insurance.