The high cost of “for-profit” medicine
By Jack E. Lohman
Everybody has an opinion about the trend toward “for-profit” healthcare. Some say the free-market delivery of medicine will reduce costs, while others claim that the profit motive diminishes quality and increases costs. The evidence supports the latter.
Dr. John Geyman, in his heavily sourced book, The Corrosion of Medicine, points out that the for-profit hospital chain “Tenet has hospitals in California that mark up their operating room charges by 800 percent and charge more than 12 times as much for chest x-rays (two views) than public hospitals.”
So much for private being less expensive than public.
Geyman points to the quality pitfalls of investor-owned health care versus not-for-profit care:
- For-profit hospital costs run 3 to 13 percent higher, with higher overhead, fewer nurses, and death rates 6 to 7 percent higher. (18-23)
- For-profit HMOs have higher overhead (25 to 33 percent for some of the largest HMOs); worse scores on 14 of 14 quality indicators reported to National Committee for Quality Assurance. (24-26)
- For-profit Dialysis Centers have death rates 30 percent higher, with 26 percent less use of transplants. (27-28)
- For-profit Nursing Homes have lower staffing levels and worse quality of care (30 percent committed violations that caused death or life-threatening harm to patients). (29)
- In for-profit Mental Health Centers, Medicare expelled 80 programs after investigations found that 91 percent of their claims were fraudulent(30); for-profit behavioral health companies impose restrictive barriers and limits to care (e.g., premature discharge from hospitals without adequate outpatient care). (31)
So much for private being higher in quality than public.
These stories persist across the country, and for logical reason. CEOs of for-profit hospitals, HMOs, PPOs, nursing homes and dialysis centers are, by law, required to do everything in their power to maximize profits for investors. Even without a law executives will maximize their own salaries, bonuses and stock value.
That means cutting costs, which translates to denying patient care wherever possible, either by denying costly procedures like cancer treatments and transplants, or needed tests like MRIs and nuclear scanning, or by cutting their nurse-to-patient ratios (which is driving nurses out of the industry).
Physicians can advocate on behalf of the patient, but now that they are becoming employees of the for-profit hospitals, even they are walking on thin ice.
The argument goes that politicians should not control health care because they can’t do anything right. And that’s usually true because they are bought off by special interests that want them to do everything wrong. The current healthcare system is evidence of that.
But put them and their families under the same health care system everybody else has, as Healthy Wisconsin does, and they’ll do it right. At least they can be trusted more than the private executives that are paid on the basis of how much care they can deny.
Put congressmen under Medicare and even that system will be cleaned up overnight!
Better yet, put every U.S. citizen under Medicare and let’s totally eliminate the 31% of waste caused by the insurance bureaucracy! Eliminate all of the other bureaucracies like Medicaid and BadgerCare, and let’s get this system fixed once and for all so we can move on to other major national challenges!
A Medicare-for-all system, covering even government employees, will not only reduce health care costs for us all, it’ll reduce the extra taxes we pay for public employee healthcare. How can that be argued against?
Yes, there are things that must be fixed in Medicare, like fraud and overuse. But those are far worse under the private system that does not punish offenders with jail time.
But — and you must be as tired of hearing this as I am of saying it — the politicians are being paid off by the healthcare industry to NOT fix the problems.
I’ll put my money on the special interests winning this before we do.
Sources from Dr. Geyman’s book:
18. Chen J, et al. Do “America’s Best Hospitals” perform better for acute myocardial infarction? N Engl J Med 340:286, 1999
19. Hartz A. J., et al. Hospital characteristics and mortality rates. N Engl J Med 321: 1720, 1989.
20. Kover C. & Gergen P.J. Nurse staffing levels and adverse events following surgery in U.S. hospitals. Image J Nurs Scholarship 30:315, 1998.
21. Silverman E.M., et al. The association between for-profit hospital ownership and increased Medicare spending. N Engl J Med 341:420, 1999.
22. Woolhandler S. & Himmelstein D. U. Costs of care and administration at for-profit and other hospitals in the United States. N Engl J Med 36:769, 1997.
23. Yuan Z. The association between hospital type and mortality and length of stay: A study of 16.9 million hospitalized Medicare beneficiaries, Med Care 38:231, 2000.
24. Himmelstein D. U., et al. Quality of care in investor-owned vs not-for-profit HMOs. JAMA 282:159, 1999.
25. HMO honor roll. U.S. News and World report October 23, 1997, p62.
26. Kuttner R. The American health care system: Wall Street and health care. N Engl J Med 340:664, 1999.
27. Devereaux P.J., et al. Comparison of mortality between private for-profit and private not-for-profit hemodialysis centers: A systematic review and meta-analysis. JAMA 288:2449, 2002.
28. Garg R.P., et al. Effect of the ownership of dialysis facilities on patients’ survival and referral for transplantation. N Engl J Med 341:1653, 1999.
29. Harrington C., et al. Does investor-ownership of nursing homes compromise the quality of care? Am J Public Health 91(9):1, 2001.
30. Wrich J Brief Summary of Audit Findings of Managed Behavioral Health Services. Chicago: J. Wrich & Associates, 1998.
31. Munoz R. How health care insurers avoid treating mental illness. San Diego Union Tribune, May 22, 2002.
This is an absolutely excellent book, and the above reflects perhaps .01% of its useful data. If you are serious about what’s wrong with healthcare, you’ll find the answers here.
– Lohman is a retired business owner from Colgate and publishes http://MoneyedPoliticians.net. He authored “Politicians – Owned and Operated by Corporate America” and can be reached at jlohman@execpc.com.
Thanks for this information. I believe that EQUAL HEALTH CARE FOR ALL offers common sense solutions to all of these problems.
R. Garth Kirkwood MD
http://www.equalhealthcareforall.com
doctork@equalhealthcareforall.com
I agree 100%, DoctorK. I’ve read your book and it also offers common sense solutions. But that seems to be the problem nowadays. Common sense solutions is not what the insurance industry wants, and it is they who are funding the elections for the politicians that are writing the laws. Too bad we have a pay-to-play political system.
Red Alert, Red Alert!
Dr. Garth, in his post #1 states “EQUAL HEALTH CARE FOR ALL”.
Don’t anyone forget he includes the millions of ILLEGAL ALIENS in that statement. In my opinion, Dr. Garth proposes giving aid and comfort to the invaders of our nation. I wonder if that is a treasonous proposal? I wonder if Dr. Garth is a TRAITOR to the United States?
And is Jack Lohman recommending the same? Are we dealing with two Traitors here?
Red Alert, Red Alert!
No, Hugh, you’re dealing with two people who have compassion for humanity. “Compassion” is not owned by conservatives, and in fact seems even to be missing in some. Sounds like even in yourself.
Yes, we absolutely must deal with the illegal immigration issue, but not by denying health care to children and immigrant families.
And people who have studied this issue realize that we ALREADY ARE providing health care to immigrants, it’s just very expensive emergency room care. It’s all a part of the $2.1 trillion we are spending every year, yet we can provide first class care to every person in the US for the same dollars.
Yes, even the immigrants that we eventually will send home. But while they are here they will be treated humanely.
I guess you call that being a traitor.
And aside from your bigoted view, Hugh, when are you going to be leaving the US and giving your ill-gotten land back to the indians?
Come on Jack. Everyone knows that God wanted us to kill all of the Indians and take their land.
As for healthcare, everyone knows its much more effective to end our health programs and simply route all care through the emergency room. If it’s not an emergency then go take an aspirin.
The problem with socialists is they’re never satisfied to set up their own little collective, because like Stalin, they’ll always blame the failures on the area outside the iron curtain. Socialists and Communists are the worst hate filled mass murderers of the twentieth century.
Thanks for the light side, captain_menace, and to the dark side, Bill. Of course, when you already have your job and health insurance it’s easy to shun all common sense fixes.
Personally I’m not in the insurance industry although I could be since I passed the exam when I was involved with worker’s comp related sales. In fact I have no vested interests whatsoever. But I have my doubts about Doc Kirkwood and Jack Lohman.
Bill, your doubts about Lohman and Kirkwood are appropriate! It’s not worth my time to answer posts #4 and 5 above, especially since Lohman appears to want to give the U.S. back to the Indians. Where does one even begin with someone holding such views? Talk about being on different planets! But the scary thing is Americans are so dumbed down today that a goodly percentage of them will buy into such tripe! We as a people no longer use our God given brains and critically think through issues. We are thus so susceptible to the likes of Lohman and Kirkwood.
Please guys, don’t wonder for a moment. You can see my brief resume here: http://moneyedpoliticians.wordpress.com/about/ and a more complete one here:
http://www.throwtherascalsout.org/disclosure.htm
Jack,
Thanks for the links.
I applaud your prior professional accomplishments! I also applaud you stating your many positions.
But with that said, my suspicions were correct – you and I are on different planets. You support McCain – I consider McCain to be a Traitor to the United States.
You want more legal immigration – I want a moratorium for perhaps 10 years, then we can re-examine.
You are falling for “baby waving”, a technique used in the past to use children to advance an agenda. Of course it’s costing us a ton of money by using our emergency care for the illegals. But the answer is not to start paying for them – the answer is to humanly send them home.
I could go on, (you appear to have a soft spot for Obama, for example). And of course, I’m used to the label of “bigot” – it’s often used when the argument is lost (or not even properly debated!).
McCain a Traitor to the United States? That’s wild. But so is Dr. Kirkwood so I consider myself in good company.
You want a moratorium on illegal crossings? I see.
I support the fence, but I do not support deporting 20 million immigrants. I have a calculator. Our housing market couldn’t take another 5 million empty houses.
And since you’ve provided zero disclosure I guess we can only assume that you support Louis Farrakhan.
Hugh
I these guys may be well meaning folk but just look at how they think. ZERO cred on the border or rule of law as it pertains to illegals, not much passion about anything constitutional (like our rights) and the old Indian reference whenever everything else fails. Of course we realize that population control through border security and national sovereignty would solve many of these issues which in fact puts US on the same side with the AMERICAN INDIANS!!
Bill, only when you put it that way did I realize how only you and Hugh could have the right answers. You guys are really brilliant. You should take a bow.