At the root of the debate over ObamaCare is the Marxist notion that all profit is waste, and if we can just take profit out of health care, we can reduce costs and improve services.
–Congressman Tom McClintock R-Calif. (4th District) April 26, 2013Explore This Issue
ACEP News: Vol 32 – No 06 – June 2013
Over the last several decades I’ve become accustomed to the dismissal of wacko notions from California as emanating from the “fruit and nut crowd.” I’ve also become keenly aware that there are nuts on both the left and the right.
I don’t know much about Congressman McClintock, so I won’t characterize him as too right-wing, especially since some of my best friends might describe me that same way. But if he thinks what this quotation suggests he thinks about profit in health care, he is too far off.
I am inclined toward the very non-Marxist idea that the profit motive drives efficiency, innovation, and a strong inclination for a business to find out what the customer needs or wants and to supply it at the lowest possible price, assuming sufficient competition. In the case of Apple, led by the visionary Steve Jobs, it even drove the company to figure out what the customer wanted but didn’t yet realize he wanted.
But after three decades practicing medicine, I am convinced that the profit motive in health care yields many behaviors that are counterproductive.
It is sometimes difficult to tell whether profit-driven behavior is real or merely suspected by the cynical. Would a gastroenterologist really recommend a procedure for which he gets paid well by a patient’s insurance when the patient could clearly do just as well without it?
That has been the assumption underlying some of the decisions made by governmental policymakers. They have, for example, tried since the Carter Administration to limit the supply of doctors, based on the belief that in health care supply generates demand – instead of the way it works in other parts of the economy, in which abundant supply relative to demand drives down prices. Only recently have they realized that this muddle-headed approach created a shortage of doctors, with dire consequences.
From that same perspective the feds created the sustainable growth rate formula, in which increases in the volume of services provided to patients by doctors are compensated for by lowering what doctors get paid by Medicare for providing those services if certain targets are exceeded. This assumes that doctors have complete control over how much they do for patients. For doctors in my specialty, emergency medicine, who have absolutely no control over how many patients we see or how much care they require, and who are generally driven to practice as efficiently as possible so we can take care of everyone who comes to see us, this is singularly ridiculous.
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