Health Care Systems Should Not Be Run For Profit, But Rather For People's Health

Josh Freeman | Medicine and Social Justice | February 2, 2014

I wrote in a recent blog (“How can a health care system lead not to ruin but to, actually, health?”, December 28, 2013) that our health care system ”…is a parallel to our financial services industry: private enterprise is given a license to make money from everyone, and the government finances it. The only difference is that for financial services, the government steps in to bail them out only after they have already stolen all our money, while in health services the profit margin is built in from the start.” A recent article in the New York Times, “Hospital chain said to scheme to inflate bills”, by Julie Creswell and Reed Abelson (January 24, 2014) takes this a bit farther.

Discussing the Department of Justice’s decision to join several whistleblower (“qui tam”) lawsuits against the for-profit hospital chain HMA (not to be confused with the nation’s largest, HCA) for aggressive policies that seek to maximize profits by “encouraging” (at threat of termination) doctors to over-admit patients, they quote Sheryl R. Skolnick from CRT Capital, who wrote “Investors seem to think that D.O.J. investigations, qui tam suits and allegations of serious Medicare fraud are simply a cost of doing business.” That’s right. Illegal activity has a price – fines – but the fines are small enough that they do not discourage the illegal activity. The authors write “Many settlements run only into the tens of millions of dollars. That’s a corporate slap on the wrist for companies whose stocks typically soar when executives push the profit envelope. Only if the penalty is at least $500 million, Ms. Skolnick said, are corporations likely to find the cost a deterrent.” Or, of course, if the heads of these corporations are sent to prison, but in another parallel with the financial services industry, this is not happening. Not to Lloyd Blankfein of Goldman Sachs or other financial titans (such as CEO Jamie Dimon of JPMorgan, featured in the same issue of the Times, “JPMorgan, fined billions, approves raise for its chief”!), or to Rick Scott, former head of Columbia/HCA when it was fined $1.7 billion in 2003 for massive Medicare fraud). Scott, of course, is now the Governor of Florida.