Introduction to Noprofithealthcare – The Health Care Blog

First, the basis for this commentary: It stems from a personal belief that health care should be a basic and readily-obtainable protection for all the citizens of a prosperous country, like defense from foreign invaders, from crime, from fire, etc. Not that this protection from illness and mortality can be provided without cost to the society or individual–we pay for all of the aforementioned protections.

I’ve been involved in health care more than 30 years, over 20 of them as a hospital CEO, mostly in for-profit companies. What I’ve observed firsthand is what engendered my thinking about the costs of services. I’ve seen what’s provided, and who profited (including me). As a for-profit CEO, I was directly involved with a number of changes, and have witnessed the pronounced cost increases over the years.

It’s well known that health care costs have risen dramatically over the past decades. In America, they’ve tripled in the past 30 years, and also doubled as a percent of GDP over the same period.

There are a number of reasons commonly given for the current situation, which I plan to detail within this website, but it is my opinion that a sizable portion of the increases can be ascribed to expanded PROFITING by health care insurance, services and products, hence the name of this domain.

As late as the 1970s, health services were almost completely in the realm of not-for-profit (NFP) organizations and institutions. These were on a mission to help people out of a sense of purpose, rather than pure financial gain. However, once health care organizations caught the scent of money, greed took over. Sound familiar? Even the not-for-profits have climbed on the gravy train. For example, a Dallas NFP paid their CEO well over $5M in annual compensation. A California NFP CEO collected nearly $7.5M in 2008. I had thought that a 501-(c)(3) organization could lose tax-exempt status for a number of reasons, including overly compensating individuals within. If correct, I wonder what happened to the enforcement of those standards?

Future essays will attempt to show how profits have contributed greatly to the mushrooming of health care costs, and how it came to be that consumers, government and non-health care businesses have shouldered the brunt of the increases.

The problem has multiple participants: insurers, pharmaceuticals, hospitals, other providers, physicians and the government (including Medicare). All have intensified the cost/profit problem, helping us to sink deeper in the bog of (hopefully) unintended consequences.

In general, people can behave predictably in certain circumstances, particularly when confronted by powerful reinforcers, like money. If there is an obvious way to make money, it will be exploited, and greed being what it is, sometimes over-exploited, to the detriment of the society.

When the health care profit door was opened, the lines formed quickly. Reversing this trend will take considerable effort, but the choices seem limited, as the more money you acquire, the more you can influence the relevant political processes.