doctor holding hand of patient

We cannot have both maximal profits and optimal patient care

If a 63-year-old male somewhere in America goes hiking and becomes lost, he can call for publicly funded emergency services and will likely be rescued at public expense. 

A homeowner can forget to turn off a burner on her stove, leave the home unattended, and return later to find that the local fire department has responded to an emergency call and put out a fire, saving most of her house and possessions, at public expense. 

There is no enrollment required for these public services, nor any premium, deductible, co-payment, or co-insurance. 

It is the policy of the American people that our neighbors in need, whether citizens or not, should not suffer from an emergency because of inability to pay for the rescue. The emergency services personnel who respond to these calls for help selflessly throw themselves into danger in order to provide a desperately needed service.  They are often public employees with modest salaries, or sometimes volunteers. 

Altruism, not profit, is what motivates emergency personnel to serve.  These services are rendered by every level of American government: federal, state, and local.  They are paid for through taxation.  Overhead is low, administrative waste is uncommon, and quality improvement in service delivery highly sought. 

Because health care delivery should share these same goals and aspirations, the business of health care in America should be the care of people needing help because of illness or injury.  But that is not the case.

Business as usual in American health care is highly profitable. 

Pharmaceutical firms routinely outstrip median Fortune 500 company profits as a percentage of revenues by a factor of two- to four-fold, with total profits over $50 billion in 2020 alone. 

For profit health insurers are having their most profitable year yet in 2022, mostly through increasing their revenues from public health programs like Medicaid and Medicare.

For-profit ownership is now the dominant business model for most hospices (70%), home care companies (77%), skilled nursing facilities (82%), surgical or urgent care centers (89%), dialysis centers (94%), and free-standing laboratory or imaging facilities (100%).  Investor acquisitions of public and rural hospitals, as well as physician practices, have become common.  

More than 100 healthcare CEOs collected eight-figure paydays in 2021, the same year the US health care system pushed millions of people into medical debt, spurred patients to ration medications, and devoured more of the paychecks of American workers. There is no debating the assertion that the United States has the most profitable health care system in the world.

 There is also no doubt that among developed nations American health care costs are the highest, now over $12,000 per person annually. 

Americans have the highest health care taxation rate in the world, amounting to $8000-$9000 per person per year, which is more than the annual per capita cost for health care in any other country without counting the out-of-pocket costs for health care paid by US employers and patients. 

Despite paying these highest in the world health care taxes and out of pocket costs, American patients commonly have no financial backing when sick or injured.  Tens of millions of Americans are completely uninsured, and more than 100 million Americans are underinsured.  The most common cause of personal bankruptcy in the US is the cost of illness or injury care, even though ¾ of those driven to medical bankruptcy had some form of insurance at the time of onset of their ailment.  

 Virtually all Americans know that things commonly go wrong when they seek health care.  Medical bills are confusing and opaque, and sometimes carry arbitrary and hidden costs, such as the surcharge that hospitals call ‘facility fees’. 

Insurance companies commonly deny claims without offering a reason.  Claims denials force patients, meaning the sick and injured, to wage drawn out fights with insurers or simply pay hefty bills.  Costs for procedures, medications, health insurance, medical devices, and consultations vary so widely and have such arcane hidden features that even patients who attempt to carefully look into pricing commonly end up with bills far larger than expected. 

The American public is generally aware that no one in the US is protected against high health care costs—we are a health insecure nation.

 American dependence on for-profit health care ownership is a big part of our health care problems.  For profit hospitals have the highest readmission rates for every condition, deliver more low value care, and have the highest overhead. 

For profit dialysis centers have higher death rates and discourage kidney transplants.  For profit home care companies deliver lower quality care at a higher cost. 

For profit nursing homes feature less nursing care and have higher death rates and hospital readmissions. 

For profit hospices shun unprofitable patients and minimize the care they do deliver.  Drug prices are higher in the United States than anywhere else in the world.  Overall, the American health care system is least likely in the developed world to be able to prevent mortality amenable to health care intervention—but we do make a lot of money off of the care of the sick and injured.

 The leaders of for-profit health care companies do not have a fiduciary duty to patients.  Americans are health insecure because the managers of hospitals, nursing homes, hospices, health insurers, and all other health enterprises, are held to account not for meeting the needs of patients, but for making as much money as possible for stockholders. 

We Americans cannot have both highly profitable medical businesses and optimal patient care.  What optimizes profit is not what makes for best patient care practice.  Health insurers are more profitable when they can avoid insuring people who are likely to need care and when they are able to deny funding care for people who are able to acquire an insurance policy. 

Neither of these business practices inure to the benefit of patients.  Hospitals make more money by selling highly intensive services rather than finding a way to prevent patients from becoming so sick that they need highly intense services. 

Hospitals also make more money when they reduce labor costs associated with highly intense services by placing too many patients in the care of each nurse, threatening the well-being of the worker and increasing the risk of neglect and injury for the patient. 

Pharmaceutical firms seek blockbuster profits by jacking up the price of medications, such as insulin, that certain patients must have no matter the cost.  They follow this business practice even though they know that many patients will fail to be able to finance the purchase of life saving medication and will die.  Or they simply fail to develop needed new medications, like antibiotics, simply because that class of medication will not ever produce maximal profits, condemning an ever-increasing number of patients with antibiotic resistant infections to premature death. 

We cannot have both maximal profits and optimal patient care.

The transformation of American health care to a system that puts the patient first does not require a radical change in our values, or a massive increase in public funding.  We Americans have been trying for decades to give the gift of health care to ourselves. 

We have built hospitals with public funds, organized publicly funded medical research, paid for the training of doctors and nurses, and always sought a way to finance the care of the sick and injured, including for the elderly and those with kidney failure (Medicare), for the poor and disabled (Medicaid), for children (CHIP), for veterans (VHA), for Native Americans (IHS), and for populations served by an acronym soup of government programs (NHSC, FQCHC, Ryan White Fund, ACA, OPTN, etc., etc.) . 

We value public funding for health care and that is the way we have principally chosen to pay for the care we all need—we tax ourselves more for health care than does any other citizenry.  We also value private health care delivery.  We want to choose for ourselves who will be our doctor.  We want administratively simple, low overhead, public health care financing—which is why Medicare has been so popular since its inception.  Seniors on traditional Medicare have ease of registration, are never kicked off the Medicare rolls, and can choose any doctor they would like to see.  

Real and sustainable health system reform in America will permanently change the way we do health care business by replacing the for-profit motive with a drive to serve our patients the way fire departments already serve the public. 

Public taxation for health care already provides the revenues needed to support payment for medically necessary care for every man, woman, and child living in the United States; no additional revenues will be needed. 

Enrollment and other administrative burdens of private for-profit health insurance will be eliminated—everyone will be automatically enrolled in the public program and never denied needed care or disenrolled—saving $500 billion each year in currently wasteful overhead. 

Better care—through appropriate staffing, use of primary care and mental health services now neglected, increased patient safety, and many other changes made possible by focusing attention on how best to serve patients instead of grasping for higher and higher profits—will keep American patients healthier and save an additional $500 billion each year over today’s poor quality US sickness-oriented system. 

Patients will be freed from the financial and bureaucratic barriers of current health care delivery; when care is needed each patient will be free to choose among all licensed physicians, therapists, dentists, audiologists, and health care institutions.  Financing for health care will no longer be a function of employment, freeing employers to go about doing what they do best: making and selling goods and services.

It’s time for common sense in health care reform. 

Let’s put patients first in our health care system.  Let’s use our public health care dollars, now approaching $3 trillion per year, exclusively in the best interests of our patients.  Let’s cut out the profiteering middlemen, the private, for-profit health insurance industry. 

No one needs coverage or health insurance, everyone needs health care. 

Let’s turn our doctors and nurses loose to attend to the needs of patients.  We should insist that hospitals, nursing homes, and all other clinical enterprises focus on what patients need, not what pays the most. 

Join us at Common Sense Health Care for Utah.

Dr Joseph Q Jarvis

Joseph Q. Jarvis, M.D., is a public health physician and the author of two books about American health system reform: “The Purple World: Healing the Harm in American Health Care” and “For the Hurt of My People: Original Conservatism and Better, Simpler Health Care.”