There is much conversation, at least among Democrats, about the need to change the health care system from one which is based on private insurers to one which is a single payer government system …Medicare For All. But what that would look like and how we get there is not the topic of this post.
The reform that is addressed by this post is the transformation of the health care industry, and it is an industry, from a for-profit model to a non-profit model. The model would still be capitalist, private-owned. This is not socialism.
Why is this transformation critical, separate and apart from the need to provide universal coverage through a government insurance system.
1. Drug/therapy development/production is currently constricted. Under the current system, pharmaceutical companies have no interest in exploring drugs to treat illness unless they would provide, if successful, a financial bonanza. Corporations not only have to make money, they have to keep on increasing their profits in order to please investors.
They thus have no financial incentive to test whether an existing drug, certainly one that is available as a generic, can effectively treat an illness. They also have no interest in producing a drug if they don’t make enough profit from it.
This problem has resulted in a serious shortage of drugs to treat a broad range of illnesses. And the development of new drugs/approaches that are extremely expensive. It has also led to marketing ploys to increase use and thus profits.
2. The capitalist approach is not appropriate. When it comes to making decisions that impact an individual’s or the nation’s health, whether it regards insurance coverage of a procedure or drug research, the profit motive is not appropriate. It should not be part of the decision process.
Now it must be truthfully acknowledged that even in a nonprofit atmosphere or with government insurance, there will be a need to take account of the cost of a procedure or a drug. Because the availability of money is not infinite.
But the decision will be made not on the basis of it’s impact on a company’s profit, but rather whether looking at the good of all it is the best use of resources. For example, under the current system, the last days/weeks of life are the most expensive medically and yet they give no hope of recovery; they merely postpone, often with suffering, the inevitable end. Many will object to what is viewed as "rationing" health care, but is this the right or even compassionate use of resources?
3. Competition is wasteful. Since most hospital centers are for-profit institutions, they compete with each other for business just like all other corporations. As a result each hospital feels the need to have the latest technology across a broad range of fields. This is a very inefficient use of very expensive technology and drives up our health care costs.
The model instead should be one of regional planning, with all hospitals having a core competence but specialization and the expensive technology that supports it being divided up among the region’s hospitals. While that would not provide the greatest convenience for the patient, it would provide significant cost benefits for the system and thus for the patient/consumer who is ultimately paying for the system either through insurance or taxes.
For these reasons, the law should be changed so that any business involved in the health care system … insurance companies, hospitals, doctors offices, pharmaceutical companies … should be required to be organized on a nonprofit basis.
