Sunday, August 09, 2009

Profit Has No Place in Health Care?

At recent townhall-style forums held by members of Congress or administration officials, some belligerent tea-baggers have held up signs saying, "What's wrong with profit?" The answer is this: It has no place in the health insurance industry. It distorts and disrupts the provisions of health care, adding costs without adding quality of care.

The health care market doesn't function like the market for automobiles or artichokes or flat-screen TVs. If you don't like the price, you just don't buy. But you walk away from expensive health insurance at your own risk.

~Cynthia Tucker

MP: Where to start? First, if our employers and the government provided us with "free" automobiles, food and TVs the way they provide us with "free" health insurance, those markets would be pretty distorted, too. That's a start, I'm sure you all have something to say....

Originally posted at Carpe Diem.


At 8/09/2009 4:58 PM, Anonymous Kevin said...

Ms. Tucker is major league many of these people don't know squat about the health care industry or business world in general.

At 8/09/2009 5:40 PM, Blogger PeakTrader said...

Profit is needed to create efficiencies and capital. The WHO, which rated U.S. health care below Cuba, admitted U.S. health care is #1 in the world in both labor (e.g. doctors and nurses) and capital (e.g. hospitals and medical equipment).

Government can be useful in providing information on various health care plans and exposing fraud. Also, it can collect information on individuals who use health care, but fail to pay for it. Moreover, it can help reduce medical lawsuits and awards, and lower standards to practice medicine (to increase labor).

Linking health care insurance with auto insurance may be an improvement, although many people drive without auto insurance.

At 8/09/2009 6:51 PM, Blogger gadfly said...

Cynthia Tucker is not a nice lady. She is very much like Rachael Maddow, whom Lou Dobbs described as "a lunatic among the lily-livered, lefty lemmings." Both Maddow and Tucker used the sexually obscene term "teabaggers" to describe those attending Tea Party protests.

Further, "Sweet Cynthia" had this public conversation with Chris Matthews:

"CHRIS MATTHEWS: Put 100 of these people in a room. Strap them into gurneys. Inject them with sodium pentathol. How many of them would say "I don't like the idea of having a black president"? What percentage?

CYNTHIA TUCKER: Oh, I'm just guessing. This is just off the cuff. I think 45 to 65% of the people who appear at these groups are people who will never be comfortable with the idea of a black president."

But back to profits. Our socialist Americans who have not lived under Socialism, would have us believe that health care is a right and caring for our fellow man requires that we donate our time and effort to heal the world altruistically.

These are the same folks who collect their own "profits" through paychecks but do not think that health care providers are entitled to the same kind of remuneration.

College degrees are becoming less and less valuable for liberals. Perhaps Professor Mark can tell us whether this is the fault of the students or their liberal instructors.

At 8/09/2009 8:42 PM, Blogger The Daily Pander said...

If all of 2008's post-tax profits from Wellpoint, Aetna and United Healtcare (and they collectively insure about 80M policy holders) were distributed evenly among their policy holders, each one would get a check for about $80.

Clearly, profit is the problem.

Check out my math here:

At 8/09/2009 9:30 PM, Blogger KO said...

Yet another Pulitzer Prize winning idiot.

Yeah, let's remove profit from health care. I'm sure the next MRI or arthroscopic tool will just be developed by some selfless do-gooder with millions to burn.

Same of course with new drugs. People will spend years of their lives and hundreds of millions of R&D dollars developing drugs just for the satisfaction of helping humanity.

But of course, outside of journalism fantasy land people don't take such leaps of time and capital without expecting to get some return.

Even under the non-profit Medicare program, things like those electric wheelchairs that are advertised all over TV, are surely not provided by non-profits. Same with even the bandages, tongue depressors, cotton balls, syringes, iv bags, EKG paper, clipboards, time of the doctors and nurses, paper, magazines in the waiting rooms....

At 8/10/2009 12:10 AM, Blogger Hamster said...

Socialism is creeping into American society. Conservatives need to recognize it...and stop it.

One of the most insidious forms of socialism is "insurance".

Insurance? .....Socialism?? How can that be?

The insurance industry claims that insurance is just a way to spread the risk.
But what it really is socialism.

Take me. I've been paying fire insurance for over 30 years.
I've never had a house burn down...never filed a claim.

So I called my insurance agent and ask to know "Where's all those premiums I've been sending you year after year ?"
You know what he told me? He said his company had already given it to some guy I didn't even know!!!
"Who did you give it to?"
"This guy whose house burned down.",my agent informed me. "He went on vacation and left the stove on. The whole place burned to the ground"

"So I should have to pay for someone else's stupid mistake?".

" I don't think so. I want my money back." I demanded.

"Sorry. But That's the way insurance works." My agent said. "We take money from those whose houses didn't burn down and give it to those who have had a fire.

We take money from the young and healthy and use it to pay the old and sick.

We take money from good drivers and give it to some guy who totaled his car while driving too fast.

We are spreading the risk. We take money from those who don't need it and give it to those who do. "

That's socialism in a nutshell. Take from those that have and give to those who don't???

That's right. Those hidden forms of socialism have slowly seeped into our society and now threaten to infect every area of our lives.

Time to put an end to insurance. Time to end socialism

At 8/10/2009 6:06 AM, Blogger Colin said...

Well, first off, I believe that insurance industry profit margins are about 3%, so they aren't making money hand over fist:

Second, the products and services that I find most useful tend to be run by profit-oriented organizations. Indeed, those that care least about making profits, such as the USPS, also tend to result in sub-par experiences.

At 8/10/2009 7:02 AM, Blogger Braxton Hicks said...

Let's see...
Free to one user doesn't mean it is free to everybody. Somebody is paying for the healthcare received. It may be the wealthy who pay for the service, or it may be the general population paying, but nothing is free if a service is provided or an item is received.

At 8/10/2009 11:23 AM, Anonymous Anonymous said...

I don't want a 'black' president. I want a COMPETENT and EXPERIENCED president, regardless of color. I want a president who understands and abides by the Constitution. Show me exactly WHERE in the Constitution the federal government was empowered to get into the health insurance business.

The people who need sodium pentathol are liberals. Ask them, 'Do you really want America to become socialist or a social welfare state?'

The only way liberals get elected to public office is by LYING about what they truly believe.

At 8/10/2009 11:42 AM, Anonymous Anonymous said...

Hamster, get a freaking clue before you blabber.

Socialism is defined as government ownership or control over the means of production. It is often characterized by redistribution of wealth.

Insurance is a mechanism for spreading risk. If you think your insurance is a ripoff, then don't get any. But be prepared to DIE if your number comes up.

In no way, shape or form does insurance resemble any aspect of socialism. Socialism, on the other hand, attempts to mimic insurance with its 'social safety net.' You're confused about which is real and which is a bad forgery. Insurance companies don't behave like their risk of ruin is zero.

Insurance companies charge higher premiums (when they're allowed) for higher risks.

If you are 'forced' to insure your home and car, then don't own a home or car. Problem solved. With a house you are not insuring YOU. You are insuring the lienholder. For a car, collision is required only when there is a lien. Otherwise liability is mandated because the damage you might cause is enormous. Liability insurance is dirt cheap.

Your insurance story is bogus. You can shop for lower rates based on your good driving record, putting yourself in a better risk pool. If everyone was an equally careful driver and homeowner, there would still be catastrophic accidents. That's why we call them accidents.

Get an education before you damage our eyesight any further.

At 8/10/2009 12:19 PM, Anonymous Anonymous said...

SHE IS RIGHT, but not for the reasons that she realizes. She is right only in the sense that if providers of Healthcare act as free enterprise profit maximizers while the services are delivered in a command & control/socialist style third party payment system, you have the worst of both worlds...

If a Healthcare supplier is a profit-maximizer in a system where price is not even a factor in the mind of a healthcare consumer, then the Healthcare supplier has an incentive to sell as much unnessecary & expensive "stuff" that he/she can...

Read this New Yorker piece ( that illustrates this perfectly, although the author comes to the incorrect and worst conclusion. The problem is not that some Healthcare suppliers/providers are profit-maximizers. Instead, the problem is that price & cost is not a factor in consumer's mind. The problem gets exacerbated when Healthcare providers attempt to maximize profits in a system where cost is not an input in consumer decisions.

We need a system first and foremost where where price and cost are important factors to consumers when determining how to consumer Healthcare services.

Don't give me any of this nonsense that Healthcare is not the same kind of good as other consumer goods. It is...but the system is set up in a way that you don't realize it...Healthcare only looks unique, because information about costs, quality, prices, etc is not readily available or even needed by consumers. We do whatever the man in the white coat says and rarely pay attention to any costs, because we rarely foot our own bill and have no incentive to try to save money.


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