Is ‘Profit’ a Nasty Word in Healthcare?

I am sitting in a room with a prospective medical student, who has come with dutifully prepared answers on why he wants to be a doctor and why he has chosen my medical school for his application.

He is less prepared when I ask him for an opinion on the state of United States healthcare reform.

“Well,” he stammers, “a lot of it is because insurance companies are all about the dollar. All we need to do is get profits out of the picture, and then focus on people’s health.”

Got it. Case closed.

The stories of highly-paid health insurance company CEOs, as compared to the plights facing the individuals covered by that company’s insurance plans, are ubiquitous. To read more, just look here, here, or - especially - here.

It’s not just the health insurance companies facing accusations of avarice, but also hospital systems, health technology companies, and the pharmaceutical industry that face heat. And, you may be surprised to hear - physicians like you and me.

So it goes with this uniquely intimate and unpredictable commodity that is My Health.

While most of us might agree that each life is equally valuable, most of us would go to extreme lengths to secure the best healthcare and the best access for ourselves. And, less often but still frequently, the best remuneration to support our families.

The negotiation, and viability, of our for-profit health care model remains highly uncertain, because only slightly less important and intimate than My Health is My Financial Well-Being.

Here is an absolute, inescapable certainty, be it for private or public financing of health care: The system(s) need to take more money in than is put out. Whether this is Blue Cross, who may pay out $0.70 for every dollar taken in*, or the federal government, who may pay out $0.90 per dollar*, the ultimate goal is sustainability.

Medicare, like Social Security, is at risk, because there is a bad input/ output balance. Medicare needs more “profit,” through more money in or less money out.

And, similarly, in any for-profit system, individuals will strive (generally speaking) to make lots of profit. In doing so, they will certainly point fingers elsewhere to identify sources where the real cost mismanagement lies. As Aetna does here.

Apparently, if everyone else does their job right, then everyone would be better off. Mr. (or Mrs.) CEO could make my tidy profit and you’d be paying lower premiums.

How much is too much profit? Maybe a CEO making $9 million dollars a year is egregious, when little Johnny’s mother can’t afford the co-pay on his albuterol. What about $1 million dollars a year? Or, $500,000?

What about the surgeon (or, less commonly, pediatrician) who makes $500,000 a year and puts a family on a payment plan to remunerate physician fees for a surgical procedure only partially covered by insurance?

Is anyone out there willing to cut his or her salary to set the example? I recognize that the family practitioner working in a rural area has effectively cut her salary by the practice choice she made, but she is likely still fairly wealthy by common measures. Is she right to limit the number of Medicaid patients she sees, or expect copay at the time of service, if she makes $100,000 a year?

What about concierge care?

To simplify the healthcare dilemma as merely an offshoot of the drive for “profits” is certainly to understate the problem, though the words are not entirely off base. In one way or another, we all seek profitability and stability and generational security.

The accusation of greed cannot be too pointedly delivered. Instead, it winds up subjected to a gray area discussion about what is too much money, who deserves the most money, and defining the role of personal responsibility.

* These numbers are for illustrative purposes only.

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