The fiduciary responsibility of a corporation is to maximize profits for its shareholders. Irrespective of the product, corporations will accomplish this by selling more products, increasing the efficiency of its production, and minimizing the labor cost to produce said product. It is for these specific reasons that the model for the delivery of healthcare should not be treated as any other product. The market simply does not work for the delivery of healthcare.
Given that the major tenet of the market is the efficient allocation and utilization of resources, it makes it impossible to provide humane healthcare. In a pure market, diseases like Lupus and other diseases that do not affect as many as cancer or diabetes would receive no research. Older unproductive people would receive less care.
Government dollars have made research on diseases that would have otherwise been ignored possible. Government dollars have made the care of the elderly, the unproductive, and the poor possible.
The healthcare system is a classic case of the privatization of profits and the socialization of expenses and losses. Private insurance is used to skim profits from premiums. Private insurance has even infected Medicare, the most efficient single payer system in America so far, with Medicare Advantage which is no more effective than regular Medicare, but costs 20% more (the profit skim). The immorality of this system was touched on in the op-ed “Immorality of Health Insurance”.
The 60 Minute piece aired on December 2nd, 2012 titled “Hospitals: The Cost of Admission” included below, presents the clearest case why the healthcare delivery system does no work. Steve Kroft investigates allegations from doctors that the hospital chain they worked for pressured them to admit patients regardless of their medical needs.
The healthcare system can only be efficient with robust and effective government regulations that provide standards of care for particular illnesses, whether it be requisite tests, admissions, or other facets of care. Absent this, corporate profit maximization for the benefit of the shareholder and not the interest of the patient or tax payer will be the sole outcome.
The reality is that fixing the healthcare system is not difficult at all. The complexity is in creating a rational for keeping portions that should not be for profit in the hands of private skimmers. Private insurance makes no sense. Private insurance has two purposes; firstly to pay a claim, and secondly to minimize the risk of having to pay a claim. It minimizes risks by attempting to insure only healthy people, thus leaving a pool of the unhealthy virtually uninsured but ultimately government covered (privatizing profits socializing losses). Moreover because there are several insurance companies, they all have their own presidents, executives, advertising, headquarters, shareholders’ dividends, and other fixed costs that have nothing to do with healthcare or paying a bill. A single payer system eliminates all these costs.
Robust regulations that uses crowd sourcing techniques for most effective care brings down cost and eliminates much opportunity for fraud. The problem is that in the chaos that is the healthcare system today, corporate pilferers are more able to profit. They used that power to make Obamacare less than it could be and made single payer but a long term dream.