An EO reader communicated her belief that making a profits and/or ROI (return on investments made) as being un-ethical nor moral. Her view is that no one should make money when providing health care services. Her view is that, “It’s not right…in fact it’s not moral or ethical to take advantage of human misfortunes such as an unfortunate’s illness.”
Her family has experienced becoming impoverished as an outcome of a family member’s long chronic illness which included extended hospitalization care-costs which were incurred during the dying and death process. The bills from hospitals and medical professionals were enormous. Several invoice charges were not easily understood nor covered by our insurance policies.”
In this community, the Sisters of Charity, whose values reflected the teachings of St. Francis of Assisi, operated O’Connor Hospital, St. Louise Hospital and Seton Hospital (Daly City). Their application of Good Samaritan stewardship resulted in bankruptcy. The County of Santa Clara’s Board of Supervisors recently voted to assume ownership of two of these hospitals. A consultant I know had examined these three hospitals. His conclusion was that these three hospitals were operated well, however, all three needed to establish an effective billing & collections section in their financial departments.
Today, “Billings and Collections” are essential in getting paid for health care services delivered. Payments from state, federal programs and commercial health insurances were not effectively collected. This resulted in cash flow shortages resulting in bankruptcy. Using the values of St. Francis of Assisi, the Sisters of Charity tried to keep these three hospitals open to serve the poor of this community.
Today, health care must be operated as a business as first recommended by former President Ronald Reagan (1975). And today, it is the health care insurance industry which is trying to stay in business because if Comprehensive Health Care (Single Payor) or Medicare for All programs are established by the U.S. Congress, then the health insurance business is not necessary anymore.
However, health care services, prescription drugs, needed medical equipment, etc. will need to develop standards of payment for the services provided by doctors, nurses and allied health professionals. These along with clinics, professional offices, hospitals, etc. will need to operate as non-profit businesses whose cash flow requirements need to include an allowance for costs resulting from theft, breakages, and the wearing out of equipment and buildings (called depreciations).
These realities result in the requirement that any health care production and delivery service must be operated as a non-profit which earns a surplus (i.e., a profit) which is re-invested in the same organization. Nothing, not even Good Samaritan stewardship may provide health care to anyone for free. Costs are incurred and must be underwritten. Some 2,600 health care professions exist today, and it behooves all of us to look into becoming prepared to be employed in this sector of our domestic economy. Most of these jobs will ever go offshore (exceptions being fiscal and medical records where data bases may be electronically transferred offshore to locals where required expertise cost less.
A major policy decision must be reached on What is a fair profit in the health care industry. Today the data processing capability exists to examine the cost of inputs. It is possible to determine a pricing policy especially if and when a uniform comprehensive health care national program (Federal) is ever undertaken. The health care business will become a publicly owned and operated business whose operations and costs can be documented, analyzed, and managed so as to cover all costs of operations. That is not possible today because all private sector medical professionals, clinics, hospitals, etc. do not release their proprietary information to the public. Any future public program such as Medicare for All (or today’s Medicare/Medicaid) must be operated as a transparent business operation meaning its data bases must be accessible for public scrutiny and monitoring.
Today, health care services accounts for 19% of the Gross Domestic Product. I am convinced that if ever health care costs are to be controlled to reasonable direct operational expenses, then this nation must have a single comprehensive health care program.
The prescription drug industry, including its Generic Drug Sector must be subjected to FDA monitoring to eliminate those alleged price fixing schemes recently the object of extensive examination by Connecticut’s Attorney General. There have been recent incidences of profiteering and price fixing. Reference is made to the EO Op-Ed published 05.17.2019 (available online).
The challenge will continue to exist on the question What is a reasonable profit margin? When a national comprehensive health care program is established, it may be possible to use health care data bases to estimate a fair and reasonable profit margin. In my reasoned estimation, it must exceed 5% because the annual 3.5% Cost of Living Adjustment (Federal) happens annually. Then there is the cost of shrinkage (stuff stolen or borrowed by employees); breakage and physical loss of materials.
By establishment of a National Comprehensive Health Care Program where “We, The People” are the guarantors who ensure that basic operational costs are paid, it will be possible to ensure control of health care costs. This proposed national program will eliminate the unknown profit margins; ultra-high executive salaries and stock options; and privileged access. These cost reductions are not possible as long as a private sector exists.
This future program must also provide for medically essential abortions needed by women. The current legislative intrusion by several states (Alabama, Missouri, Mississippi, etc.) violates the natural right of each woman to be mistress of her own body. A public policy that prohibits abortions invariably has extreme negative consequences. Each individual woman must be allowed to do what is the best for her health and that resulting from family planning. A woman would be well advised to consult her partner; her pastor; and her personal gynecologist before making any decisions.
So, any comprehensive health care national program must include permission to allow a woman to make reproductive decisions in her own best interests. After all, a woman who begets a child is committing herself to a 9-month gestation period (during which incidents may happen); and 18 years of nurturing, educating, and being the mom. And a family unit which involves a committed father, mother, and the children is where the best outcomes of relationships, social skill training, and communication skills; compliance and discipline are first taught. Many good family memories happen in an established family unit.
This weekend is Memorial Day weekend. At 3:00 PM Monday, take a silent moment of remembrance of all those individuals who died while serving in our military forces. This Memorial Day Holiday is very special because I would recommend that each of us communicate with our elected officials in the White House and U.S. Congress that the American ideals, especially the rule of Law and Order requires visible civil order, debates, negotiation and compromises which create the greatest common good for the greatest number.
American ideals require establishment of world peace in which many resources used up in war may be re-allocated towards taking care of people, their cultural values, and peaceful inclusion in a very diverse worldwide community. America’s military-industrial complex must work towards establishment of world peace wherein all of us may live and prosper in safety and security. This is the desired fair return on investments (lives and materials) being made by, “We, The People”.