Health Care and Profits, a Poor Mix

[Scuba]

http://www.nytimes.com/2013/01/09/business/health-care-and-pursuit-of-profit-make-a-poor-mix.html?_r=0

Thirty years ago, Bonnie Svarstad and Chester Bond of the School of Pharmacy at the University of Wisconsin-Madison discovered an interesting pattern in the use of sedatives at nursing homes in the south of the state. Patients entering church-affiliated nonprofit homes were prescribed drugs roughly as often as those entering profit-making “proprietary” institutions. But patients in proprietary homes received, on average, more than four times the dose of patients at nonprofits.

Writing about his colleagues’ research in his 1988 book “The Nonprofit Economy,” the economist Burton Weisbrod provided a straightforward explanation: “differences in the pursuit of profit.” Sedatives are cheap, Mr. Weisbrod noted. “Less expensive than, say, giving special attention to more active patients who need to be kept busy.”

...

A shareholder might even applaud the creativity with which profit-seeking institutions go about seeking profit. But the consequences of this pursuit might not be so great for other stakeholders in the system — patients, for instance. One study found that patients’ mortality rates spiked when nonprofit hospitals switched to become profit-making, and their staff levels declined.

These profit-maximizing tactics point to a troubling conflict of interest that goes beyond the private delivery of health care. They raise a broader, more important question: How much should we rely on the private sector to satisfy broad social needs? From health to pensions to education, the United States relies on private enterprise more than pretty much every other advanced, industrial nation to provide essential social services. The government pays Medicare Advantage plans to deliver health care to aging Americans. It provides a tax break to encourage employers to cover workers under 65.

The article makes the case that privatizing social services results in lower quality, less equitable distribution and higher costs. Who's surprised?

[LisaLynne]

1. I would think anyone who has worked in the private sector would not be suprised.

I always wonder how people who have had jobs in private industry can think that the private sector is somehow less wasteful. Well, maybe they find ways to more fully screw their workforce.

And ultimately, I think anytime pure profit -- just the pure pursuit of making money, is the goal of any organization, bad things happen.

[leftstreet]

2. DURec

Interesting comments section

Thanks for posting this

[Waiting For Everyman]

3. Profit from the illness of others is vulturism.

Too many doctors now do no belong in the medical field at all, but go into it strictly for the overblown money to be made in it, which makes their advice completely untrustworthy. It's a train wreck, on a par with the banking industry.