America Is Purple

The Voice of an American Centrist

Entries from July 2009

Profit: How the search for more money is crippling our country

July 25th, 2009 · No Comments · Category: The Economy

The raging health-care debate going on in our nation’s capital is bringing to the fore another debate that has been simmering beneath the surface of our culture for years: Capitalism vs Socialism.  Thanks to intrepid capitalists, socialism is considered a dirty word in American politics despite places like Sweden and France whose socialist health-care systems function quite well (at least when compared to the broad spectrum of American health-care for both insured and uninsured)  A socialist health-care system in America might well work better for more people than the current system, but we will never have a socialist health-care system in America.  What we will end up with, what congress will push through and the president will sign into law, is a compromised system that may succeed in lowering costs a bit, but will certainly not be universal and will no doubt be underfunded.  And that is the unfortunate downfall of any attempt at socialism in America, in order for socialism to work, everyone must commit to it and agree to pay for it and that is just not possible in America today.  Once again, California leads the way with their push for ever-increasing social programs while rejecting any attempt to raise taxes to pay for them.

But really, if the goal is to improve the affordability of health-care and increase the level of care patients receive, there are other options.  Unfortunately, the majority of those options (the ones that don’t simply give the middle-finger to poor people) upset the sacred cows of capitalism: profits.  But really, if the goal of a health-care system is anything other than making sick people well, it has lost it’s way.  Our health-care system has the added goal of making money.  This should scare you.

Ostensibly, an insurance company would take good care of clients so as to not get sued and to attract more clients.  But what if your health became a liability to their bottom line?  Suddenly, you have a preexisting condition and your insurance has gone bye-bye.  In the war of priorities, your health has lost out to mega-insurance-corps’ profit margin.  The problem with health care right now, as well as energy, prisons, and countless other institutions that we rely on is that we have allowed them to be run for profit.

Anyone remember RoboCop?  In that movie, the city of Detroit has outsourced its police force to a huge corporation.  It seems like a ridiculous idea except we’ve already done that with many of our prisons.  And now we have the companies running said prisons lobbying for stiffer penalties, which is of course meant to keep us safe and has nothing to do with getting more money for having more clients (IE: prisoners.)

Socialized health-care would solve the profit problem but would create a large set of other problems (for instance, how to pay for it.)  There is a solution closer to the center, however: The Non-Profit.  It may be difficult, but imagine a non-profit insurance company.  What would that look like? By buying in to a non-profit insurance plan, the insurance company pools the resources and insulates you from the cost of health-care should you need it.  It’s what an insurance company is supposed to do, but because for-profit insurance companies must also look at the bottom-line they may refuse to allow you a needed procedure (or at least refuse to pay for it which is, for most people, the same thing.)  The non-profit insurance company would be free of that secondary (or in many cases primary) obligation to make money for their investors, and would be free to offer the best level of care possible.

The majority of hospitals in America are non-profit.  Any profits they make go straight back into the hospital to purchase the best equipment and to allow them to hire the best people available.  Non-Profit organizations like the Mayo Clinic are world-renowned for their care.  Why not have a non-profit insurance company working towards that same goal? The goal of making sick people well and keeping healthy people from getting sick?

The same principle can be applied to many other areas of our country.  If profits are not the goal, companies can focus on treating their employees better which in turn leads to better service of customers.  Better service of customers leads to more customers and higher profits.  Ironically, the best way to make profits is to not worry about profits.   We in America have completely lost this.  Our corporations’ obsession with profit margins have lead them to take unnecessary risks, cut costs any way they can (usually from customer service and/or by lowering the quality of their products.  See: GM and planned obsolescence for the later, AT&T and Comcast for the former),  and to treat the customer like the enemy.  Let’s face it, if you’re an insurance company with the goal of making money and someone makes a claim, they are directly interfering with your goal.  Even if responding to that claim is the stated purpose of your company, you’re going to fight it as best you can and  make the customer jump through as many hoops as possible to get anywhere.

We need our companies to stop looking at the bottom-line and start serving their customers.  If profits get immediately put to use growing the company, most companies would benefit and investors would get more money in the long term.  It’s a smaller slice of a much bigger pie.  Would you rather have 2% of a million dollars or 50% of $30,000?  Looking at the landscape of our economy the last couple years, it’s clear that companies have done far more harm to themselves and their reputations and their profit margins by seeking more and more profits than they would have even by taking a slight loss to better serve their customers, clients, and employees.  Their stock prices over the last year certainly show it.

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