Health Care and the Profit Motive: Can Big Capitalists be Right?


In recent weeks we have heard news that three corporate titans of America, Jeff Bezos, Warren Buffet, and Jamie Dimon, have banded together to form a healthcare company that is “free of the profit motive” to serve, at least initially, the hundreds of thousands of individuals employed by Amazon, Berkshire Hathaway, and JPMorgan Chase. While this may sound a bit surprising coming from three of the most successful capitalists in the world, the idea has merit.  Details of the endeavor are understandably lacking, but in the absence of those details we can speculate about what a healthcare system free of a profit motive might look like.

First, we must ask if such a vision is attainable. The answer is absolutely and unequivocally yes, and at some level people know this—hence the dramatic dip in the stock value of for-profit insurors after the Bezos/Buffett/Dimon plan was announced. Most industrialized nations already have in place healthcare systems that are more rationally apportioned and deliver better and more affordable care than the U.S. The specter of the single payer health system, long the bugaboo of those fearing government intrusion into health care, has pretty much been abolished as myth. No industrialized nation relies solely on a single payer health system; all offer some blend of private-public options. As a nation that is still debating whether health care is a fundamental right or a fundamental obligation of government, or both, the U.S. sadly stands alone among our industrialized peers.

So we have a lot of room to grow. As I noted, we lack details of the free from the profit motive (not an inherently bad motive, as our three titans would no doubt hasten to assert, but one that is misapplied in the healthcare marketplace) plan that Bezos/Buffet/Dimon have proposed. In the absence of such details, we have ample room to speculate about the type of regulatory and practice changes that might be implemented to optimize American health care. Given such an opportunity, what would you prioritize? Here’s where I would start:

1. Ensure that extant parity laws are appropriately and rigorously enforced so that patients and providers are no longer arbitrarily denied coverage or given only very restricted coverage for mental disorders.

2. Bring back the individual mandate. While I have in the past argued that the moral hazard argument in health care is spurious (and it is—people simply do not consume health care in the same way they consume expendable commodities), there is merit in the idea that all of us should share some personal responsibility in the provision of health care. The individual mandate is a fundamentally conservative idea that encourages individual responsibility, which is why it is highly perplexing to see so-called conservative legislators argue against it.

3. Allow psychologists and other providers to practice at the level to which they have been trained. For too long, guild interests have governed the provision of health care. This is anti-competitive and like all anti-competitive strategies it restricts options and drives up costs. For example, appropriately trained psychologists should be allowed to prescribe psychotropic drugs. This makes sense not only on the basis of choice and competition, but also because we know that the medical model of psychotropic drug use is fundamentally flawed. A model that puts biological and non-biological constructs of mental disease on (more or less) an equal footing will drive better patient outcomes. This also will result in lowered cost of care. In jurisdictions like Colorado, for example, that have mandated a biopsychosocial approach to pain management, government costs for treating patients with chronic pain have declined substantially.

4. Restrict or eliminate reimbursement to the extraordinarily expensive for-profit inpatient substance abuse treatment centers that are currently capitalizing on opiate dependence. These “treatment” centers often warehouse patients and do not offer evidence-based interventions—at tremendous financial and personal cost to families and individuals and, where covered, insurors. In a like fashion, for-profit nursing facilities have long been demonstrated to provide lower quality of care than not-for-profit facilities. We must accept, however, that nonprofit status is not a panacea. Nonprofit hospitals can be just as aggressive as their for-profit peers in rate setting and bill collection strategies. Nevertheless, the removal of the for-profit mandate to increase shareholder value will fundamentally realign how resources are allocated.

5. Consolidate, to the greatest extent possible, the very significant portion of U.S. health care that is directly controlled by the federal government. An estimated 30 million people are currently eligible for care in the Veteran’s Administration and Department of Defense. Quality of care in the VA and DoD is the same or higher than in comparable civilian facilities, but we have created artificial inequities that add to cost and fragment care. In general, one cannot, for example, engage spouses or families in treatment in VA mental health or substance abuse programs (some exceptions to this rule exist). Service members seen in DoD facilities may or may not be eligible for care in VA, and vice versa. There are currently around 21 million patients eligible for care in the VA system, and of these, around 9 million veterans have enrolled in a VA. The DoD extends coverage to approximately 9.5 million service members and their families. Creating a unified system that would provide coverage to a minimum of 30 million Americans would significantly streamline health service provision in a not-for-profit environment. The DoD is moving rapidly towards unification of healthcare systems that had previously been fragmented among the Army, Navy, Air Force, and Coast Guard. There is no reason that such consolidation cannot occur more broadly in the federal sector. Making the VA a part of the TRICARE provider network would be a significant step forward.

6. Make most prescription drugs available over the counter. Physicians in America did not gain control over the prescription pad by divine fiat. Rather, successive versions of the Pure Food and Drug Act, initially promulgated to end hazards created by an unregulated patent medicine industry, gradually consolidated physician control over therapeutic drugs. But the pendulum has long swung too far. Although the putative rationale for physician prescribing is as a guarantee of safety, we know this is not the case. Authorized non-physicians prescribe medications as safely and effectively as physicians. Most industrialized nations allow pharmacists to prescribe independent of physician oversight with no safety concerns. We don’t know exactly how many physician visits occur simply to refill a prescription or seek a new prescription for a minor complaint, but the number is surely considerable. Making most drugs available over the counter would remove a significant expense and patient inconvenience. Now it must be allowed that certain drugs are highly toxic and their use must be restricted to those who have the appropriate knowledge to use them therapeutically. For example, chemotherapy agents or immunotherapy drugs should never be administered without close provider oversight. But most drugs simply don’t fall into this category. As to the safety issue, it can reasonably be argued that if a drug is more toxic, habit forming, or dangerous in overdose than alcohol or nicotine (dose for dose, one of the most potent toxins around), then it should be a prescribed drug. How many would this leave?

7. Ensure that Social Determinants of Health are truly incorporated into our health care system, from the first day of graduate education in psychology or medicine, the first day of a legislative session allocating healthcare funds, the first prenatal visit, and the first well-baby check. For too long we have focused on treating the extraordinarily deleterious but extraordinarily predictable effects of poverty, lack of education, environmental degradation, and other social issues, rather than simultaneously addressing these issues as causal. Reducing the burden of social determinants is no Pollyanna-ish vision. While societal inequities abound and will always be with us, data are convincing that if we take even small measures towards addressing inequities, such as providing low income patients with access to healthy food choices or providing homes for homeless people, costs go down and healthcare outcomes change for the better.

8. Establish national standards for health provider licensure at the federal level. While only a pie-eyed optimist would hope that states and territories will ever give up the right to regulate the provision of health care within their jurisdictions, the adoption of uniform national standards underlying licensure in each jurisdiction will standardize education and training, allow the imposition of evidence-informed curricula and training experiences, and smooth the path towards greater reciprocity between individual jurisdictions.

Is this too much to ask for? No, too little. This list doesn’t even begin to address a lengthy roster of changes that could make American health care less costly and more effective. None of the solutions I have proposed are beyond our capabilities. Some may be politically hazardous, and most will encounter fierce opposition from firmly entrenched guild and corporate interests. But consider this: We did not set out to design a costly, inefficient, and mediocre healthcare system, and none of us, save those who profit from the current inefficient system, desire to perpetuate it. American capitalism has created the greatest economic engine in recent human history. Its success has not extended to our healthcare system. Effective healthcare delivery systems are deliberate, planned, and iterative. There is much to learn from those industrialized nations that have engaged in this planful process. It’s high time we started ourselves.

Copyright © National Register of Health Service Psychologists, All rights reserved.

1200 New York Ave NW, Ste 800

Washington DC 20005

p: 202.783.7663

f: 202.347.0550

Endorsed by the National Register