Universal healthcare proposals have been around since the beginning of the 20th century as have concerns about rising healthcare costs. A quick Google search will get you all kinds of history if you should want it. Seemingly all proposals are about health insurance affordability rather than the rising cost of healthcare services. It seems that our elected officials seem to think that the health insurance industry can fix the problem of rising healthcare costs. Even the Affordable Care Act, (ACA), aka Obamacare, was about health insurance for all, believing that would control healthcare costs. It did not, has not and will not work.
I am not opposed to the ACA; in fact, I have gotten my health insurance through the exchanges for the past few years. I think it is a good program and a good way to get health insurance if you are not eligible for an employer provided plan but it has not controlled rising healthcare costs. If we, as a country, are going to get healthcare costs under control then reform is needed for the entire healthcare industry. Reform must include healthcare providers, health insurance providers and pharmaceutical companies. The list in not all inclusive but it is a good start.
Many, if not most, companies in the healthcare industry are listed on the stock exchange and pay dividends or otherwise distribute profits to shareholders. Nobody, business or person, should profit from peoples misfortune or ill-health. This should include at a minimum all providers of health care, pharmaceuticals and health insurance. It should be noted that many of the largest hospital chains are non-profit entities but the CEO’s of some of these non-profit entities have annual compensation packages well into the millions of dollars.
There is so much money available in the healthcare industry that makes generating a profit an easy target for sometimes less-than-ethical entrepreneurs. Healthcare needs to be understood as a moral issue not an opportunity for profit. Step one to reducing healthcare and health insurance costs is to mandate that all hospitals, health insurance providers, pharmaceutical companies be non-profit entities.
One of the largest hospital chains, if not the largest hospital chain in the United States is the Hospital Corporation of America, more commonly known as HCA Hospitals. It is a for-profit business with stockholders who are paid dividends or get other financial compensation based on the profits of the business. The Chief Executive Officer has an annual compensation package close to $24 million annually. Most other hospital chains are non-profit entities.
One of the largest health insurance providers based on premiums collected is United Health Group. It is a for-profit business with stockholders who are paid dividends or get other financial compensation based on the profits of the business. Most anyone with a television set has seen United Healthcare ads. The Chief Executive Officer of United Health Group has an annual compensation package a little over $26 million. Unlike most hospital chains, most health insurance providers are for-profit entities.
An example of a large non-profit healthcare insurance provider is Kaiser Permanente. The Chief Executive Officer annual compensation package is estimated around $13 million. An example of a large non-profit hospital chain is Ascension Health. The Chief Executive Officer’s annual compensation package is estimated to be between $13 million and $14 million.
Even more nauseating are the compensation packages of pharmaceutical companies Chief Executive Officers which are estimated to be up to $300 million annually. In all cases, other top executives at these health providers earn equally excessively high salaries.
I used the word nauseating to describe the compensation package not because I have an issue with large CEO salaries but because I have an issue with large CEO salaries in an industry responsible for the health and well being of us humans. As previously stated, I believe healthcare is a moral issue. There should not be profit in caring for sick, injured or otherwise impaired people. There is no way to morally justify these kinds of salaries in the healthcare industry.
The salaries of the Executive Director and executive staff should be no more than that of our elected officials. The Chief Executive Officer (CEO) should not be more than that of the President of the United States and the executive staff of the organizations should make no more than our congressmen and senators. This should be true for all non-profit entities. CEO’s and others seeking multimillion dollar salaries need to get into another industry. There is no place in the healthcare industry or any other nonprofit entity for them.
Marketing should be limited to an equal footing and not paid for through consumer or subsidy payments, i.e. any amount paid with the intent to be paid as a regular payment of the health insurance premium. Maybe there should be an annual publication with all providers, insurance options and cost. The expenses spent on marketing now cannot be justified. Commercials and telemarketing are expensive to create, develop and air. It is not unusual to see 20 to 30 advertisements for health insurance during an afternoon watching TV or receive 8 to 10 phone calls per day from telemarketers selling various health insurance plans. There are an endless number of ads promoting drugs for every ailment by pharmaceutical companies. All of these add to the costs of healthcare.
While the argument will certainly be made that competition reduces prices, it cannot be argued that in the case of health care costs the free market has not worked. Moreover, competition exists nearly as much amongst non-profit agencies as private companies so the “free market competition” argument is not valid. No need to bring that back into the conversation.
Nonprofit regulations are already established and greatly detailed by the Internal Revenue Service (IRS) through Section 501(c)(3) of the IRS Code. Nonprofit organizations are regulated, tax exempt and restricted from partisan politics already. (Political nonprofit entities are regulated by a different code). Something needs to be added to the code to control salaries of nonprofit executives or they will spiral out of control as they have in the private sector. Nonprofits already require all volunteer boards which will save untold additional dollars in healthcare costs.
Nonprofits marketing generally are limited to fund raising ventures or education which should substantially reduce the amount of healthcare dollars spent on television ads and telemarketing. If marketing costs continue to be excessive then regulation would be necessary but that seems unlikely.
Any proposal to reduce healthcare costs will inevitably lead to calls to reduce Medicare and Medicaid spending. Some politicians advocate privatizing those programs but that is never going to happen and it should not happen. There will always be government funding in healthcare, a lot of it. Its true in every first world country and its true in the United States. No different than why we need the Food and Drug Administration and the Department of Health and Human Services to help ensure safe healthcare practices through regulation and monitoring, we need government funding in the system. It helps ensure stability of the entire healthcare system.
The proposals I have suggested are just one step in a true attempt to reform healthcare and health insurance and reduce the spiraling costs. Taking profit out of healthcare and health insurance costs is the moral thing to do. There are plenty of other things that profit minded businesses can make money doing, building or selling. Healthcare should be off the table for profiting though. Multimillion dollar salaries, paying dividends or otherwise distributing profits, multimillion dollar marketing campaigns to sell medications or health insurance do not belong in the healthcare industry.
If our elected leaders are serious about reducing healthcare and health insurance costs then they will take this proposal as a place to start true reform. If not, we should elect new leaders.
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