Should Institutional Providers Be Incentivized by Profit under Medicare for All?

By Lambert Strether of Corrente.

I’ve avoided writing about hospitals and other institutions, because my focus has always been on the patient, and whether they get, or don’t get, health care under our horrid mixed system of Medicaid, private insurance, and Medicare (subject to a neoliberal infestation though it may be). However, as Medicare for All approaches the reality of House hearings and alternatives emerge to HR676 and S1804, the two bills now on the table, a greater focus on institutions beyond the health insurance industry becomes inescapable.

One key difference between health care institututions is whether they are profit or non-profit (caveating that a non-profit institution can be profit-making in all but name). As Naked Capitalism readers know, on difference between HR676 and S1804, is that the latter bill, sponsored by Senator Bernie Sanders, allows investor-owned entities to be reimbursed for services delivered, like today’s Medicare. The House bill, by contrast, does not. Since it’s likely that a combination of ideology, donor class “speech,” Congressional sausage-making, and liberal Democrat duplicity will bias the process toward investors, it’s worth asking whether we should incentivize institutional providers with profit, or not. Incentives matter, after all! I think doing so is bad idea, for three reasons: (1) Profiteering inflates costs; (2) Profiteering increases patient mortality; and (3) The goal of a health care system should be health care, not profit. (Note that, politically, this means opposing Sanders as, in essence, too much of a moderate). I will take up these points in order, but first let me give more details on payment systems proposed by the two bills we do have (since we have not seen how Representative Pramila Jayapal will rewrite HR676). From Stephanie Woolhandler and David Himmelstein in Health Affairs:

While both bills would cover all Americans under a single, tax-funded insurance program, they prescribe different provider payment strategies. The Senate version largely adopts Medicare’s current payment mechanisms; the House bill’s is modeled on Canada’s single-payer program, also called “Medicare,” which pays hospitals global budgets (much as a fire department is paid in the U.S.) and sharply constrains opportunities for investor-owned care.

But these divergent payment strategies would create very different financial incentives for providers… The Senate version would, like Medicare, pay hospitals and other institutional providers on a per-patient basis, intermixing payments for current operating expenses with funding for future capital investments and profits. As at present, hospitals’ success, and even survival, would depend on generating profits (“surpluses” in non-profit facilities). Hospitals with a favorable bottom line could invest and add new buildings and programs, while unprofitable ones couldn’t modernize or expand, risking a downward spiral toward takeover or closure.

In contrast, the House bill would abolish per-patient billing by hospitals and other institutions, and its global budget payments would cover only operating costs; hospitals would be prohibited from retaining surpluses, and capital investments would be funded through separate government grants. The bill would also explicitly proscribe payments to investor-owned facilities, and it calls for their conversion to non-profit status financed by issuing bonds.

Summarizing, at least as far as the capital investment goes, S1804 puts markets first, where HR676 democratizes the process. So, as you can see with a little thought, these dry-as-dust “provider payment strategies” will really affect the quality of health care that you get under Medicare for All. Let’s see how.

Profiteering Inflates Costs

Here again we turn to Woolhandler and Himmelstein, who compare and contrast the payment mechanisms for S1804 and HR676:

Medicare’s payment approach requires hospitals to bill for and justify each hospitalization, a requirement that persists in value-based payment schemes like ACOs and would continue under S.1804. [Under S1804] hospitals would have to maintain much of their current wasteful billing, documentation, and internal cost-tracking systems….

Instead of bundled payment arrangements tied to individual patients, the House version would substitute an institution-wide bundled payment, i.e., a global budget covering all operating costs. As noted above, that approach has streamlined hospital administration in other nations, which have been more effective than the United States at restraining overall costs. In contrast, ACOs have increased providers’ administrative costs by about $200 per patient annually, and have generated trivial or no savings after accounting for Medicare’s “shared savings” bonus payments. Similarly, Medicare’s (and other payers’) pay-for-performance initiatives impose substantial administrative costs on providers, with no evidence that they’ve improved patients’ outcomes in any setting.

In sum, the financial viability of a single-payer reform turns on cutting administrative costs and minimizing incentives for financial gaming. Maintaining Medicare’s current payment strategies, as under S.1804, would be substantially costlier than adopting the non-profit global-budgeting strategy used in several other nations.

(Note that the requirement to “to bill for and justify each hospitalization” enables upcoding; see NC here and here.)

Profiteering Increases Patient Mortality

A notorious recent article, “Goldman Sachs asks in biotech research report: ‘Is curing patients a sustainable business model?’” poses the question of profit-driven health care from the investor/owner perspective in a pleasingly open and direct manner. Nevertheless, the question of whether profit-driven institutions like hospitals increase mortality relative to non-profit institutions is an empirical one, and naturally highly contested; the best studies I could find indicate that it does (as will, I am sure, many anecdotes from readers here and from the literature generally; I remember my doctor, who and whose institution I actually rather like, trying to upsell me on tests for the sort of disease old codgers like me die with, and not of; he was quite excited about the technology, though I was not). I’ll quote the studies in chronological order, and then give some caveats about them:

1) Janice Hopkins Tanne, “Mortality higher at for-profit hospitals,” BMJ. 2002 Jun 8:

Patients in for-profit hospitals in the United States are more likely to die than those in non-profit hospitals, a new systematic review and meta-analysis says. The study, by researchers at McMaster University in Hamilton, Ontario, and the University of Buffalo, New York, has been published in the [CMAJ].

The study compared mortality in private, for-profit and private, non-profit hospitals in the United States between 1982 and 1995. It reviewed 15 observational studies that included 26000 hospitals and 38 million patients.

Patients treated at for-profit hospitals had a 2% increased risk of death (relative risk 1.020, 95% confidence interval 1.003 to 1.038), the report says.

In the United States, said co-author Dr Holger Schönemann, assistant professor at the University of Buffalo, a 2% increased risk means that 14000 people die each year at for-profit hospitals who would have lived if treated at non-profit hospitals.

The higher death rate at for-profit hospitals occurs for two reasons, Dr Devereaux said: “Shareholders expect a 10% to 15% return and the hospitals have to pay taxes. Funding is fixed [from Medicare and other schemes in the United States and from national health insurance in Canada], so they cut corners on skills.”

Here is a methodological critique of the Devereaux study cited by Tanne:

[T]he authors may, if anything, have weakened their case by generating a pooled estimate of the for-profit effect. Even without aggregation of the data, there are 3 compelling reasons to believe the overall result.

First, the finding of excessive mortality associated with for-profit hospitals recurs in one study after another. It also recurs in most of the studies that were excluded and is evident with multiple modelling techniques.

Second, these studies are not clustered in one time or place. Excess mortality associated with for-profit hospitals is evident in separate comparisons covering most of the United States, over more than a decade in which the US health care system underwent a major transformation in finance and organization.

Third, the authors’ secondary findings lend strong plausibility to the overall conclusion. For example, individual study findings are consistent with the literature showing outcome advantages for teaching hospitals. The authors also astutely separated out variables that might be under the control of hospital administrators and found that adjustment for staffing levels diluted the advantage of the not-for-profit hospitals. Other research suggests that, ceteris paribus, excessive cuts to the number of skilled bedside nurses lead to an increase in adverse in-hospital outcomes.

2) Richard C Lindrooth, Tamara Konetzka, Amol S Navathe, Jingsan Zhu, Wei Chen, and Kevin Volpp, “The Impact of Profitability of Hospital Admissions on Mortality,” Health Serv Res. 2013 Apr:

We modeled risk-adjusted 30-day mortality of patients discharged from 21 hospital service lines as a function of service line profitability, service line time trends, and hospital service line and year-fixed effects. We simulated the effect of alternative revenue-neutral reimbursement policies on mortality. Our sample included all Medicare discharges from PPS-eligible hospitals (1997, 2001, and 2005).

The results reveal a statistically significant inverse relationship between changes in profitability and mortality. A $0.19 average reduction in profit per $1.00 of costs led to a 0.010–0.020 percentage-point increase in mortality rates (p < .001). Mortality in newly unprofitable service lines is significantly more sensitive to reduced payment generosity than in service lines that remain profitable. Policy simulations that target service line inequities in payment generosity result in lower mortality rates, roughly 700–13,000 fewer deaths nationally.

3) Manish Mittal, Chih-Hsiung E. Wang, Abigail H. Goben, Andrew D. Boyd, “Proprietary management and higher readmission rates: A correlation,” PLOS One, September 18, 2018:

Multiple studies have shown that ownership structure of Health Care organizations (HCOs) affect the performance of providers and patient outcomes [7–14]. While hospitals are different than many other HCO’s, we compare the literature to other HCO as few studies on HCO ownership have been published. Similar to our study, Horwitz et al. have reported higher readmission rates for patients at for-profit hospitals among the 4474 hospitals analyzed for Medicare beneficiaries from July 2013-July 2014 [16]. Daras et al. have reported higher readmission rate for rehabilitation patients in the for-profit IRFs (Inpatient Rehabilitation Facilities) than the non-profit IRFs [8]. Although, the authors also reported geographical variation in their study with more readmission rates in IRFs in the South Atlantic and South Central regions than the New England, these readmissions were related to all cause-unplanned population which may have different mix of patients than what was observed in this study [8]. In another study, Devereaux et al. performed the meta-analysis of published and unpublished observational studies from 1973 to 1997, to compare the mortality rate of patients in for-profit vs not-for-profit dialysis centers, and reported significantly higher mortality risk associated with for-profit dialysis centers [9]. Another meta-analysis study based on 82 articles, performed by Comondore et al., from 1965–2003, reported higher quality of care in non-profit nursing homes compared to the for-profit facilities [10]. The non-profit nursing homes were associated with higher quality staffing and lower pressure ulcer prevalence compared to the for-profit nursing homes [10]. Hillmer et al. similarly reported better quality of care associated with non-profit nursing homes using qualitative systematic review of 38 studies from 1990–2002 [11]. Rosenau et al. reported that non-profits were judged 59% of the time superior, whereas for-profits were judged to be superior only 12% of the time [12]. Their study was based on the systematic review of two decades of articles published since 1980–2003 [12]. Some of the studies, however, have reported better care quality in for-profit institutions [13–14]. Leleu et al., for instance, have shown reduced readmission in for-profit teaching and fully integrated hospitals than their counterparts [13]. Akintoye et al., have reported reduced mortality in for-profit hospitals among HF patient from 2013–2014 nationwide [14]. There could be multiple reasons ascribed to this discrepancy such as specificity to a particular disease category*, temporal differences or use of different database.

NOTE * Or, more pointedly: “concentration on the most lucrative services, such as elective cardiac and orthopedic services.”

And now some caveats: The meta-study with the largest n, #1, reviewed data from 1982 and 1995, although work from 2013 (#2) and 2018 (#3) reinforces both the institutional logic it reveals, and its conclusions. The point could be made that HMOs/AOCs, CMS regulations, and various quality initiatives render that data obsolete. In response, I would argue that we should therefore regard 1982–1995 as a “state of nature,” as it were, and that every kludge installed to mitigate that state — highly-salaried “leadership,” for example — falls under the heading of inflated costs, as outlined in the first section of this post. It’s hardly a victory if you tame a market at high cost when the market doesn’t need to exist in the first place. Finally, the two studies I found that contradict the material presented above have very small ns, and cover limited geographic areas (here; here).

The Goal of a Health Care System Should be Health Care, not Profit

David Graeber’s famous concept of “everyday communism” has some theoretical issues, to say the least, but I think at a pragmatic and intuitive level it makes a lot of sense. From Graeber’s “On the Moral Grounds of Economic Relations” (PDF). I’ve helpfully added material in square brackets to make the relevance of Graeber’s passage more evident:

Whenever action proceeds “from each according to their abilities [doctor, health care institution], to each according to their needs [patient]”—even if it is between two people—we are in the presence of “everyday communism”. Almost everyone behaves this way when collaborating on a common project [the alleviation of suffering or restoration of health]. If someone fixing a broken water pipe [or bodily organ] says “hand me the wrench” [or scalpel], their co-worker will not usually say “and what do I get for it?”… This is why in the immediate wake of great disasters—a flood, a blackout, a revolution or economic collapse [or medical emergency]—people tend to behave the same way [leaving aside health insurance administrators], reverting to a kind of rough-and-ready communism…. Anyone who is not an enemy can be expected to respect the principle of “from each according to their abilities…” at least to some extent: for example, if you need to figure out how to get somewhere [health], and they can give you directions [treatment], they will.

Citizens and patients are used to our profit-driven health care system denying care, whether through lack of insurance, or through health insurance gatekeepers. Heck, that’s what GoFundMe is for. They are not used to thinking of health care institutions and personnel doing the same thing. They imagine, that is, they when they ask a hospital for directions (treatment) the hospital won’t send them deliberately astray (to Pain CIty as opposed to Happyville). But if profit is the driver, and there are investors to think of, it is in fact their fiduciary duty to do just that.[1]


In short, HR676 and S1804 propose two different modes of managing capital for hospitals, S1804 proposes that health care institutions accumulate profit and allocate it themselves. HR676 proposes that capital for health care institutions be treated as a public good and allocated by the government through our process of representative democracy. Because profiteering inflates costs, increases patient mortality, and renders the doctor-patient relationship morally suspect, I think that HR676 has the right approach. Representative Jayapal should retain that approach when she rewrites the bill.


[1] Reputational damage? Don’t make me laugh.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. KB

    Thank you Lambert. Let’s hope Jayapal retains the original bill. Kip Sullivan is not so sure. He has asked Jayapal to respond to pertinent questions and so far I haven’t seen a response from Kip….I am deeply concerned, but agree HR676 at this point is far superior.

  2. Susan the Other

    Thanks once again for this good logic Lambert. Of course. Of course HR676 should be the law of the land. In no uncertain terms; eliminating the incentive of profit is the only way to create a new alternative incentive – that of dedication and equality. After all the nonsense we have suffered for 40 years, the Senate wants to prolong it. And I’m disappointed it is Bernie’s bill. When the two bills come together to be shuffled and stacked into something that will pass both houses it will be interesting to listen to the debates. Medicare for all cannot survive as Profit for Medicare. It’s disgusting to even consider. I can see the menu of snake-oil remedies already. I’m sure there will be a sleazy push to create some kind of PPP as consolation if the Senate bill loses out. That would also be a travesty. The only solution for die-hard profiteers is to go 100% private and take no government money at all. But to that end all breakthroughs in medical care and pharma and genetics should be controlled by the government for the benefit of all people. Etc.

  3. Jfree

    (1) Profiteering inflates costs;

    No it doesn’t and the idea is laughable. Institutions make VERY different decisions w/in profit or non-profit environment. Anyone who has worked in both knows this. Profit institutions continually reduce operating costs because those reductions (over and above competitive) are where profits actually originate. Profits do not originate in being more expensive than the competition. Non-profits otoh do not reduce operating costs except in response to (ie after-the-fact) some other institution reducing costs. To the degree that non-profits have a surplus at the end of the year, they plow it into capital equipment (in the case of hospitals) with little ROI analysis to even determine if it is needed. And if that capital equipment is underutilized, then the overhead costs of that are added to everyone’s hospital bill the following year. And the existence of that equipment then incentivizes the overutilization or misutilization of it. That dynamic is why our hospitals are excessively capital intensive and why so much of our medical care is overutilized/misutilized.

    (2) Profiteering increases patient mortality

    Bad medical care increases patient mortality. Period. Has nothing to do with the profit/nonprofit status of the institution but with the capability of the doctors/staff. Some nonprofits are phenomenal (Mayo, research centers affil w universities) – some will kill you (VA). For-profits will tend to be in the middle range for ‘normal’ care or they don’t survive.

    (3) The goal of a health care system should be health care, not profit.

    No argument from me but this seems a rather banal statement that leads nowhere – where the only purpose is to stir up a crowd rather than to actually develop a better health care system.

    IMO – neither the House or Senate bill will do a damn thing to either improve healthcare outcomes or reduce costs because neither ‘Medicare’ nor ‘Canada’ are a very good model for changing the healthcare system that we actually currently have into something better. Put bluntly – Medicare has proven an abject failure in predicting/managing the healthcare requirements of the elderly population (nowhere near enough geriatricians after 50+ years of Medicare being the single decision-maker for that demographic) – and Canada only works with a strong base of GP-type physicians (we have the opposite problem of nowhere near enough GP’s and far too many specialists). Those problems can’t simply be willed away by clicking our heels three times and uttering magic phrases.

    And btw – 7 of the 10 ‘most-profitable’ individual hospitals in the US are actually non-profits. Is based entirely on whether they have local competition or are part of a bigger system to save some overhead

    1. Jeremy Grimm

      I’ll bite:
      Profiteering does inflate costs. — Let’s take the case of hospitals … have you visited a hospital E.R. lately? And are you arguing about how real-life hospitals work or some kind of Market-based optimal hospital? Profit and non-profit hospital work to make a profit. Hospitals that lose money eventually must close.

      “Profits do not originate in being more expensive than the competition.” That’s definitely true since profit is defined as the difference between gross revenue and expenses. I have no idea what ‘competition’ you think there is between hospitals. Hospitals, like supermarkets, enjoy a position of geographic monopoly or near monopoly. If two hospital are close enough to ‘compete’ — what makes you think competition means price competition? Did you ask for an itemized estimated cost for your recent E.R. visit? Did you quickly call up the ‘competition’ and ask each of them for a bid on the same package of services? [Don’t try that if your injury is losing a fair amount blood as you do your shopping.] Suppose your hospital E.R. wants to take two chest X-rays — using old well-used and long ago amortized X-ray machines along with MRI scans of the head injury you came in for … along with a battery of obscure blood tests. Do you question the necessity for this treatment from the comfort of your guerny? Having worked in a couple of hospitals in my dim past I never noticed a lack of poor investment decisions by the hospital management. At one of the hospitals where I worked, definitely a for profit hospital, “Hal” — a super-duper and very expensive monitoring machine for the ICU — sat in a corner gathering dust because his manual and buttons were all written in German.
      [The word ‘profiteering’ has many very negative connotations. I’m surprised you didn’t start by questioning Lambert’s heavily rhetorical choice of words.]

      Profiteering increases patient mortality — When you went to the hospital E.R. was their first question “Where does it hurt?” or did they ask “How are you going to pay for service?” Since you are commenting I trust your injuries weren’t too serious and you had platinum insurance and a credit card to match.

      The goal of a health care system should be health care, not profit. — “…this seems a rather banal statement that leads nowhere – where the only purpose is to stir up a crowd rather than to actually develop a better health care system.” What seems rather banal to you seems quite to the point to me. “…neither ‘Medicare’ nor ‘Canada’ are a very good model for changing the healthcare system that we actually currently have into something better” OK — suggest a better model for improving the healthcare system we actually currently have — I’m all ears. After years of very expensive health insurance available from my employer, which was considered excellent health insurance when compared with the insurance other employers provided, I finally retired and qualified for Medicare. I can say without qualification its much much less expensive, better, easier to use, and much less worry. I can also say I don’t give a damn about health insurance per se … but I care very much about receiving good health care.

    2. Lambert Strether Post author

      > 7 of the 10 ‘most-profitable’ individual hospitals are actually non-profits

      Actually, I see that you got no further than the second paragraph:

      One key difference between health care institutions is whether they are profit or non-profit (caveating that a non-profit institution can be profit-making in all but name).

      The key institutional distinction is not formal or legalistic, but rests on how capital is accumulated and deployed. In S1804, privately by the institution based on its profits, or as in HR676, as a public good.

  4. naxos

    I think some of the analysis here misses an important point. In particular, there is a mis-incentive danger with “institution-wide bundled payment, i.e., a global budget covering all operating costs”. Such a payment model incentivizes health care providers to increase profits by restricting care, since the less healthcare they provide the lower their costs and higher their profit relative to the fixed payment they receive.

    There is a spectrum of payment models. On one end, a hospital gets paid for each procedure they do. On the other end, the hospital gets a fixed payment to cover each individual. The first incentivizes overprovision of care (i.e., providing unnecessary procedures), while the second incentivizes underprovision of care (i.e., not providing necessary procedures). I think somewhere in between would be the ideal model, which I think is what the Senate version tries to do.

  5. Cal2

    Hell No!

    Is fresh water and sewage treatment part of our health care system?

    Is sewage treatment for profit? Or, is it a public utility, paid for by a fee by everyone, rich and poor?

    The analogy to healthcare insurance profits is privatized water suppliers.
    Cal American Water provides water to the Monterey, California region.
    Horrible service, poor water, ridiculous expenses. Have a complaint about your bill or service? You have to call Kansas.

  6. marym

    Wasn’t it the profiteers, rather than any legal definition of fiduciary duty, who indoctrinated us with the idea that the supreme task of a for-profit entity is profits, taking precedence over goals like product quality, customer service, hiring and retention of a quality workforce, responsibility to the community, or keeping jobs in the US?

    The capitalists decided that’s how for-profit entities function. If we want entities that serve other goals, they’re not going to provide them. With HR 676 our national healthcare insurance and our healthcare provider institutions are no longer investor-owned enterprises with “shareholder value” taking precedence over all other goals. This seems like a better path than haggling with for-profit entities to carve out our other-than-profit goals.

    HR 676 is just called the Expanded and Improved Medicare for All Act now. Language referencing a national healthcare program has been lost, but here’s what it was in the 111th (2009-10) Congress version/vision:

    United States National Health Care Act or the Expanded and Improved Medicare for All Act – Establishes the United States National Health Care (USNHC) Program to provide all individuals residing in the United States and U.S. territories with free health care that includes all medically necessary care, such as primary care and prevention, prescription drugs, emergency care, long-term care, mental health services, dental services, and vision care.

    (a) Short Title.—This Act may be cited as the “United States National Health Care Act or the Expanded and Improved Medicare for All Act”

    The short title in the 115th Congress was just the “Expanded & Improved Medicare For All Act” and the short title of the Sanders bill S 1804 was the “Medicare for All Act of 2017”.

    So some loss of vision already, whatever Jayapal and friends have in mind.

  7. Jeremy Grimm

    How we provide and allocate medical care should be a matter of Values — not costs or monetary returns.

    I am growing disturbed by the ease with which we all seem to slide into arguing about matters like health care and health insurance using the language of the Neoliberal Market and tacitly accept the underlying assumptions of that ideology by discussing the issue within the Neoliberal frame. The medical profession in the US is controlled by an ancient guild adhering to ancient codes, and variously adapted methods for selecting, hazing, and protecting its members. The Pharma Industry, hospitals, and nursing care have origins predating the Physicians Guild and hold an ancient and venerable place in human society. All have enjoyed a special regard even reverence since ancient times. An ancient principle at the heart of all Medicine — though variously adhered to — is that the practice of medicine is a sacred trust which should and must not be pursued for profit. Those who profess their devotion to this art merit special respect and honor and should receive sufficient income to live well. Fees to the wealthy were supposed to offset the discounts made to the poor. The Medical Industrial Complex based on the Neoliberal Market completely violates the ancient trust Medicine was based upon. How very well the Neoliberal Market deconstructs and devalues our society.

    Medical Insurance is little more than the latest parasite (or symbiote?) to find place on the backside of our monopolistic, extractive, heartlessly rapacious Medical Industrial Complex. The administration of Medicine with its focus on ROI, a measure as imponderable as any subjective assessment of Value, is only slightly less repugnant. It sucks far more out than it contributes. The abhorrent state of our Medical Industrial Complex makes a damning indictment of our Society and its ‘values’.

    1. Summer

      “I a7m growing disturbed by the ease with which we all seem to slide into arguing about matters like health care and health insurance using the language of the Neoliberal Market and tacitly accept the underlying assumptions of that ideology by discussing the issue within the Neoliberal frame… ”

      It is using the same kind of thinking that caused the mess to get out of it.
      And if the economics of healthcare need to be discussed, a major change in the frame would be global price comparisons for medical procedures, drugs, and equipment. Constant and thorough compaisons….among hospitals, clinics, etc.

      Affordable healthcare would obviously be healthcare at prices you don’t need insurance for.

      1. Jeremy Grimm

        Healthcare — Medicine — does not belong in a Market and discussions of cost too easily become discussions of ROI and too easily become exercises in somehow quantifying “Returns” to plug a number into the formulas. Medicine is a matter for Values and not Returns and Costs. Why have affordable healthcare? Why not free healthcare available to those who need it? To drag in an old chestnut in these sorts of argument and twist it a little — we support Defense as a Common Good and could do the same for Medicine. Which Common Good do we truly support with our “democracy” and to what extent? What are the Values of our Society?

  8. Carla

    Profits have NO PLACE in healthcare. It is disturbing, and very telling, that Bernie Sanders felt a need to write his own — far inferior — Senate bill rather than strictly adhering to HR-676. My own doctor supported and conferred with Dennis Kucinich as he and John Conyers built HR-676. Expanded, Improved, Medicare for All is what the country needs now, and we will accept nothing less. Between her support for PAYGO and leaning toward the Sanders healthcare legislation, Pramila Jayapal is proving to be quite a big disappointment.

  9. Larry Coffield

    CEOs would breach their fiduciary obligation to shareholders if healthcare weren’t subordinate to maximizing returns. That’s why Wall St. gives recession points for denying a sixty-year old healthcare because she used acne creams as a teen but failed to report it. Similarly we are gouged by monopoly syndicalists for pharmaceuticals that our tax dollars underwrite.

    Nobody needs to nurture cartels and their rent-seeking parasitism, All of our antibiotic are made in China so transnational monopolies can arbitrage slave production.

    Nice work Lambert.

  10. jackiebass

    I’m 77 and have Medicare and a private supplemental insurance policy. I’ve not had a single problem with Medicare questioning something and not paying. On the other hand my supplemental insurance has several times not paid their small copay amount. One common excuse is that the provider isn’t in network. Another is the procedure isn’t covered under the policy. The appeal process is so complicated and time consuming that I just pay the bill. It is always a small amount. Most of the time’s under $50. I think that any health insurance that has private companies as part of it isn’t good for patients. They make decisions based on profit, not good medical practices.

  11. ChrisAtRU

    Thanks so much for this, Lambert. When I’m muttering angrily to myself about the state of our current kleptocracy, I often give voice to the notion that [profiteering] in health care should be considered in play when it comes to reducing the scope of capitalism. I always go back to Wrays “What the Govt Ought To Do” installment of the Modern Money Primer. Once one understands the power of the public purse, then it becomes apparent that ceding ground to the capitalists (as owners/providers of entire sectors of the economy) is tantamount to diverting state benefits from the public to the capital class. When people like Nancy Pelosi, Liz Warren and Ben Jealous commit to capitalism in word, they are effectively saying that the government (of which they are part) has a greater responsibility to ensure the health of the capitalist class. Your conclusion is spot on, and the entire exercise could be repeated for things banking, housing and education.

    1. Charles A.

      “Why does Jayapal think HR676 needs rewriting?” Excellent question. Similarly, why didn’t Sanders just introduce the text of Conyers’ HR 676 in the Senate? His silence, as well as the silence of those who should ask him but do not, speaks loudly.

  12. divadab

    The Canadian system is based on an entirely socialized system – hospitals are all non-profit and mostly owned by the government – and sustained by grants both operating and capital. Doctors are still independent professionals but their income is regulated by standard payments – all doctors are paid the same amount per procedure, exam, and treatment, and most have their incomes capped on an annual basis. (some specialties are not capped such as surgeons and oncologists).

    The process of socialisation was a long one – most hospitals prior to medicare introduction in 1966 were owned and operated by religious institutions or non-profit foundations that were originally donor-funded. This aspect still exists – as hospital capital programs are significantly funded by donors, the largest getting naming rights (eg. the Joe Blow Cancer Center – every hospital has many such).

    Honestly I see the profit v. non-profit debate as a red herring – if medicare for all pays the same rate to whichever provider, who cares about the ownership structure? All you are doing by making it an issue is politicising the debate further and for what? The over-billing greedy profiteer minority among doctors can be controlled with an annual cap on billings as in Canada and a hospital is paid the same amount per stay, procedure, test, etc. whatever its ownership structure.


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