Notes From Babel

Can Health Care Survive Without a Profit-Motive?

with 3 comments

Every now and then, Bill Maher makes an interesting point.  I actually watch his program pretty regularly.  Often he will have a quality conservative on his panel (though sometimes off-set by Janeane Garafalo). And last week he had Congressmen Darrell Issa and Jack Kingston (though, again, off-set by Arianna Huffington).  Still, some quality discussion.  One other point in Maher’s favor: he concedes that Democrats are responsible for the grossly expanded interpretation and politicization of the Senate’s “advise and consent” role in judicial nominations.

A couple weeks ago, Maher’s monologue argued that the “profit-motive” was encroaching on areas traditionally reserved to the state, such as war mercenaries (e.g., Blackwater), private prisons, television news, and yes, hospitals.  The monologue is reprised in this article at Huffington Post.  I cannot quickly dismiss the first two examples—there’s certainly something unnerving about mercenaries and prisons-for-profit.  Then again, these functions go directly to the purposes of government.  A state is created to protect individuals from threats foreign and domestic.  Soldiers and prisons are integral here.  But the state is not formed to keep us free from disease, pestilence, or even the cavity creeps (though we have tried, unsuccessfully, to make it do so.

I’d suggest our problem is too much trust in isms, whether it be capitalism or egalitarianism.  There is a third repository of power beyond markets and governments, and that is the source where all power derives in the first place: the self.  To quote Ferris Bueller, “Isms in my opinion are not good. A person should not believe in an ism – he should believe in himself.”

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Written by Tim Kowal

August 15, 2009 at 1:13 am

3 Responses

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  1. Being a business grad student and proponent of Friedman, I say you have to have profit and that truly well run companies will not put pure profit motive over actions that are better in the long run… such as not screwing your customers.

    But as Friedman also instructs us, you need as few distortions in the market as possible, and this is where government is complicit in making companies solely profit-motivated. Privately run prisons are no problem with me… but when you have lobbying from prison guard unions arguing for stricter laws against harmless crimes you are going to get more jails not less. The less and less that government has the ability to give away, the less distorting measures you will find in the market, and businesses will be forced to play fair.

    Mark

    August 18, 2009 at 10:18 am

  2. One of the examples of market failure that occurs is rescission abuse. When you show your health insurance card at the hospital, the hospital runs a contractually required check with the insurer. The insurer gives a preliminary approval that you are indeed covered, and at that point, the hospital is contractually required to provide you with certain services. Later, the insurer might determine that you obtained your policy by “fraudulently” withholding certain medical conditions. In many cases, there is no fraud, even if such conditions exist–patients often don’t know how to interpret their medical history. But the law only requires that you knew the information, not that you had any actual intent to “defraud,” per se. So this leaves the hospital with thousands of dollars in already-provided services that the insurer now will not provide, and that the patient certainly cannot pay.

    But the mechanics of the health care “market” are so convoluted and ephemeral that the consumers’ traditional market checks have no force. It’s difficult to just take your business up the road. And in cases like this, it’s hard to know who even wronged you–the patient is probably as likely to think ill of the hospital, even though it’s the insurer who’s the crook.

    In short, it’s hard to take a “pure market” approach to health care, or any industry that is so convoluted that the consumer’s power is so markedly diminished.

    Tim Kowal

    August 18, 2009 at 6:50 pm

  3. […] The problem with Klein saying things like we should pass clumsy and ineffective and bloated laws because “once the programs [are] passed into law, they [will] slowly and continually improve[]” is that democracy, by design, does not work that way.  Society may prosper despite far-reaching, complex and often counter-productive legislation, but America’s famous prosperity was certainly not earned because of such legislation.  Moreover, such legislation could not even hope to inure to Americans’ benefit where “the general tendency of the law” compliments—or at least does not injure—the Americans’ natural genius in industry and economic activity.   The Democrats’ health care plan is the opposite—by design.  As Bill Maher, for example, has repeatedly said, health care is no place for the profit-motive. […]


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