Health Care vs. the Profit Principle

It's always nice to see the President take a principled stand on something. The man formerly known as "43," and now perhaps better named "29" for his record-breaking approval rating, is promising to battle any expansion of government health insurance for children -- and not because he hates children or refuses to cough up the funds. No, this is a battle over principle: private health care vs. government-provided health care. Speaking in Cleveland this week, Bush boldly asserted:

I strongly object to the government providing incentives for people to leave private medicine, private health care to the public sector. And I think it's wrong and I think it's a mistake. And therefore, I will resist Congress's attempt ... to federalize medicine ... In my judgment that would be -- it would lead to not better medicine, but worse medicine. It would lead to not more innovation, but less innovation.

Now you don't have to have seen "Sicko" to know that if there is one area of human endeavor where private enterprise doesn't work, it's health care. Consider the private, profit-making, insurance industry that Bush is so determined to defend. What "innovations" has it produced? The deductible, the co-pay, and the pre-existing condition are the only ones that leap to mind. In general, the great accomplishment of the private health insurance industry has been to overturn the very meaning of "insurance," which is risk-sharing: We all put in some money, though only some of us will need to draw on the common pool by using expensive health care. And the insurance companies have overturned it by refusing to insure the people who need care the most - those who are already, or are likely to become, sick.

I once tried to explain to a Norwegian woman why it was so hard for me to find health insurance. I'd had breast cancer, I told her, and she looked at me blankly. "But then you really need insurance, right?" Of course, and that's why I couldn't have it.

This is not because health insurance executives are meaner than other people, although I do not rule that out. It's just that they're running a business, the purpose of which is not to make people healthy, but to make money, and they do very well at that. Once, many years ago, I complained to the left-wing economist Paul Sweezey that America had no real health system. "We have a system all right," responded, "it's just a system for doing something else." A system, as he might have put it today, for extracting money from the vulnerable and putting it into the pockets of the rich.

But let's not just pick on the insurance companies, though I wouldn't mind doing that -- with a specially designed sharp instrument, over a period of years. Sunday's Los Angeles Times featured a particularly lurid case of medical profiteering in the form of one Dr. Prem Reddy, who owns eight hospitals in Southern California. I do not begrudge any physician a comfortable lifestyle - good doctoring is hard work - but Dr. Reddy dwells in a 15,000 square foot mansion featuring gold-plated toilets and keeps a second home, valued at more than $9 million, in Beverly Hills, as well as a $1.4 million helicopter for commuting.

The secret behind his $300 million fortune? For one thing, he rejects the standard hospital practice of making contracts with insurance companies because he feels that these contracts unduly limit his reimbursements. (In a battle between Aetna and Reddy, it would be hard to know which side to cheer for.) In addition, he's suspended much-needed services such as chemotherapy, a birthing center and mental health care as insufficiently profitable. And his hospitals are infamous for refusing to treat uninsured patients, like a patient with kidney failure and a 16-month-old baby with a burn.