For the Love of Profit
August 7, 2009 - 10:37am ET
There is a simple answer to the far right's new favorite chant against health care reform — "What's Wrong With Profit?". Nothing. There is nothing inherently wrong with making a profit. But their question misses a point that I recall from my Baptist upbringing and my days as a Sunday school teacher.
It's not money that's "the root of all evil," as the most common misquoting of particular bit of scripture would suggest. It's the love of money that's the "root of all evil." Money itself is neither bad nor good. Money, or profit, is not the problem. It's what we do with it, and what we do for it, that makes the difference. If it becomes our only reason for doing anything we are, as a country, lost.
Profit, for a while now, hasn't been a problem for the health insurance industry. During the 20 years or so between our attempts at reforming health care, the industry's done quite well. CEOs like United Health's Stephen Hemsley — with $13.2 million in earnings from 2007, and stock options totalling three quarters of a billion dollars — have done quite well. He's in good company.
In the same year, the CEOs of the top seven for-profit insurers averaged $14.2 million in compensation. According to one report, the industry's profits were $65 billion in 2007, down from $67.6 billion in 2006, but well above $48.8 billion in 2005. In 2003, they doubled their profits from 2002.
In 2003, HMOs nearly doubled their profits from just a year before, adding $10 billion to their bottom line. That year, top executives at the 11 largest health insurers made a combined $85 million in one year. In the first three quarters of 2004, HMO profits increased by another 33 percent. The sheer numbers behind these profits are staggering: In 2004 alone, the four biggest health insurance companies reported $100 billion in revenues. That’s $273 million a day, every day, 365 days of the year.
They should be doing well. The last time a president tried to reform health care, Americans' health care spending totaled $912 billion. Today, we spend $2.5 trillion — and we still have upwards of 50 million uninsured. Since September, nearly five million Americans have lost health insurance, mainly because 6.5 million of us have become employed since late 2007, and most Americans get their health coverage through their employers.
They get less of it, though, and pay more for it. Citing the recession, employers now offer fewer health care plans — with fewer options and higher deductibles, at that. Those of us who still have jobs have seen our share of health care costs go up 10.6% since last year. They went up 34% from 2004 to 2007. We can expect costs to go up in 2010, since employers are expected to see a 9% increase in health care costs. Most of them will pass that cost on to employees who are already struggling with health care costs.
We're struggling with paying for our own care, and at the same time paying an average of $1,000 extra per household each year to cover the health care costs of the uninsured. And we face an avalanche of health care costs when we become uninsured through losing our jobs.
With unemployment rising to its highest level in more than a quarter century, more Americans are confronting the double crisis of losing both their jobs and their employer-sponsored insurance, which covers 177 million people.
Many unemployed Americans say they cannot afford the high premiums insurance companies charge for personal policies. People like Furchak and Drake who have pre-existing medical conditions have a tough time even finding coverage.
A recent study by the Robert Wood Johnson Foundation said the number of uninsured Americans could jump to more than 65 million in 10 years as healthcare costs more than double. The U.S. Census Bureau says about 46 million Americans are currently without insurance.
So we postpone costs by postponing care until we end up crowing the emergency room.
Medical bills are behind more than 60 percent of U.S. personal bankruptcies, U.S. researchers reported on Thursday in a report they said demonstrates that healthcare reform is on the wrong track.
More than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts, the team at Harvard Law School, Harvard Medical School and Ohio University reported in the American Journal of Medicine.
"Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy," Harvard's Dr. David Himmelstein, an advocate for a single-payer health insurance program for the United States, said in a statement.
"For middle-class Americans, health insurance offers little protection," he added.
But a dwindling number of insured people paying higher premiums can't account for the health insurance industry's incredible growth in profits. That's got more to do the employees they've added to their payrolls.
Between 2000 and 2005, the number of Americans with private health insurance coverage fell by 1 percent. But over the same period, employment at health insurance companies rose a remarkable 32 percent. What are all those extra employees doing?
Now we know at least part of the answer: they’re working harder than ever at identifying people who really need medical care, and ensuring that they don’t get it. In the past, they mainly concentrated on screening out applicants likely to get sick. Now, it seems, they’re also devoting a lot of effort to finding pretexts for revoking insurance after they’ve already granted it. They typically do this by claiming that they weren’t notified about some pre-existing condition, even if the insured wasn’t aware of that condition when he or she bought the policy.
It's practices like these:
And stories like these:
That add up to the kind of paydays that Hemsley and other insurance CEOs have enjoyed.
And that's the problem.
It's not the profits. It's that profits are prioritized over people. It's the logical extreme and inevitable end of the notion that profit is the only reason to do anything.
How about this for a New Rule: Not everything in America has to make a profit. It used to be that there were some services and institutions so vital to our nation that they were exempt from market pressures. Some things we just didn't do for money. The United States always defined capitalism, but it didn't used to define us. But now it's becoming all that we are.
...And finally, there's health care. It wasn't that long ago that when a kid broke his leg playing stickball, his parents took him to the local Catholic hospital, the nun put a thermometer in his mouth, the doctor slapped some plaster on his ankle and you were done. The bill was $1.50, plus you got to keep the thermometer.
But like everything else that's good and noble in life, some Wall Street wizard decided that hospitals could be big business, so now they're run by some bean counters in a corporate plaza in Charlotte. In the U.S. today, three giant for-profit conglomerates own close to 600 hospitals and other health care facilities. They're not hospitals anymore; they're Jiffy Lubes with bedpans. America's largest hospital chain, HCA, was founded by the family of Bill Frist, who perfectly represents the Republican attitude toward health care: it's not a right, it's a racket. The more people who get sick and need medicine, the higher their profit margins. Which is why they're always pushing the Jell-O.
Because medicine is now for-profit we have things like "rescission," where insurance companies hire people to figure out ways to deny you coverage when you get sick, even though you've been paying into your plan for years.
When did the profit motive become the only reason to do anything? When did that become the new patriotism? Ask not what you could do for your country, ask what's in it for Blue Cross/Blue Shield.
It's not profit that's the problem. It's what people are willing to do with it and for it that's the problem.
It's the love of profit, the pursuit of profit, and the protection of profit above all else — including people — that's the problem.
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