Eduardo Porter’s “Economic Scene” column for Wednesday’s New York Times Business Day was similarly titled: “Health Care And Profits, A Poor Mix.”
Porter, who previously covered economics as a reporter for the paper, showed his mistrust of the market to provide vital services like adequate health care and pensions, advancing his left-wing argument via a narrow 30-year-old study.
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.”
This behavior was hardly surprising. Hospitals run for profit are also less likely than nonprofit and government-run institutions to offer services like home health care and psychiatric emergency care, which are not as profitable as open-heart surgery.
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?
Go read the rest, but the main point here, to me is that Porter has no understanding of free markets, or reality. Let me explain Mr. Porter. If those insurance companies did not make any profit, they would go OUT OF BUSINESS! Then, they could insure NO ONE! How would that help sir? Of course, if we had YOUR Utopian version of health care. The government would run health care, and then when they run out of money, who could get health care? How about all the medicines that help Americans Mr. Porter? Guess what THOSE drug companies have to make profits too. See without making MORE money than they spend, companies do not prosper. They go belly up, and who does that help again Mr. Porter?