Non-Profit vs. For-Profit health Care: How to Win the Looming Battle Over Cost Control

By Steven Hill
May 27, 2011 8:30 AM

The United States is facing some daunting economic challenges, not the least of which is our broken health care system. The U.S. spends nearly twice as much money per capita on health care as other developed nations, yet the metrics show that Americans end up with worse care and poorer health. Moreover, American businesses are spending way more on health care than their international rivals, making them less competitive in a global economy. In truth, our hodgepodge health care system is going to bankrupt the nation if we don’t figure out a better way.

The Obama health care plan was a step in the right direction, but only a minor one. By the time it is fully implemented in 2014, it will have increased access to health care for millions (though not all) of Americans who currently have no health care. But it will have done little to rein in costs. In theory, cost controls should be a goal that Republicans and Democrats can agree on, yet it will be an even bigger political battle than the previous one over access. That’s because to rein in costs it will not be possible to tinker around the edges of a broken system, as the 2010 health care reform did. It will be necessary to fundamentally overhaul the system in ways that powerful special interests will fight.

At the root of the grotesquely expensive and inefficient U.S. health care system is the fact that it is a for-profit system where corporations have incentive to charge premiums as high as they can get away with, while at the same time providing as few patient services as possible. That’s the basic formula for how any business maximizes profit — charge more and spend less. Yet those incentives result in perverse outcomes when the goal is providing health care for all Americans. In short, the U.S. health care system prioritizes profits before people, yet to deliver quality, affordable health care it is necessary to do just the opposite.emphasis added

Health care for people, not for profits

Americans could learn a great deal about how to design an efficient, cost-effective and humane health care system by looking across the pond. Europe has substantially achieved what America has yet to figure out — how to enact universal coverage and quality care at an affordable price. And surprisingly, many European nations have accomplished this without using a single-payer system, or “socialized medicine,” as it is sometimes called.
http://www.washingtonmonthly.com/ten-miles-square/2011/05/nonprofit_vs_forprofit_health029839.php