I just ordered a new hearing aid. I bought it from the same entity I pay health insurance to. Hospitals may be non-profit or for-profit, but the label isn't very helpful because any entity with salaries and overhead must focus on getting money or go bankrupt.
Americans are confused about "for-profit vs. non-profit" because they're not used to seeing actual sticker prices for healthcare services and because insurance has allowed diffusing ever-escalating costs. Such a system works only if more people are added to the same insurance pool each year, which gets trickier if true competition exists.
On paper, a for-profit entity has more incentives than a non-profit to be efficient and better at preventative medicine, thereby lowering long-term costs. Yet, even that basic premise is questionable if a non-profit has leadership that rewards employees for efficiency and reducing the number of unnecessary third-party tests. The trick is getting the balance between efficiency and customer service right.
Why do other countries seem to handle healthcare better? Reasons might be counterintuitive or simple. For example, they could be dealing with a population that drives less because of better public transportation, which increases daily walking time and therefore decreases heart disease rates. Maybe people are less stressed because they have less debt or more free time. Perhaps fewer people engage in excessive drinking or prefer wine to beer. (Even the "wine vs. beer" factor requires more analysis because the main difference might be that most wine is more expensive than most beer, encouraging less consumption and therefore fewer negative health effects.) Is the climate extremely hot, encouraging more showers and therefore more cleanliness, reducing disease transmission? Or does a hotter climate make it harder to walk more, increasing health risks?
The more we analyze complex problems, the more it becomes obvious that nothing can be fixed on a national level in any large country, and one reason smaller countries like Singapore are so successful is because they are smaller and can act locally and more quickly when problems arise. (Note: "democracy" isn't necessarily the answer to anything once you realize any system that encourages local solutions, accountability, and more humility works.)
Back to my hearing aid purchase. I've been severely hearing-impaired since birth. American health insurance doesn't fully cover hearing aids, even if medically necessary. Also, tax write-offs require such a high level of medical expenses, almost no one actually qualifies. (Meanwhile, a dollar spent on advertising creates an automatic, above-the-line deduction--the best kind of tax break.) I will be paying 1200 USD out-of-pocket for the most basic Oticon aid, labeled as "entry" level. I probably need two more functional aids costing 2600 USD each, but I tend to spend a lot of time alone (cue the chicken or the egg debate), and I'd rather use my money for more pleasurable experiences like eating out or even giving it to a friend who can pay off high-interest consumer debt.
Why do I share my experience with you? I want you to get a sense of why American healthcare is so problematic and why labels like "single payer" or "for-profit" don't help. When I made the appointment to purchase the new aid, I already had the benefit of a previous visit, where the audiologist explained the different options and price points to me. I was given a standard half-an-hour appointment, but I saw the system scheduled the next patient in 20 minutes, creating an incentive to minimize the time spent with me.
Not knowing about the 20 minute scheduling until my follow-up visit, I brought another aid I use as a back-up, which needed a simple tubing replacement. The audiologist looked at it and told me it's not common for Kaiser to work on an aid not purchased through its own service. She turned the aid over a few times and finally left for three minutes and returned with a tube.
A tube is just a piece of plastic attaching the earmold to the electronic aid that goes behind the ear, but if the five cent piece of plastic isn't replaced regularly, the expensive aid won't work optimally. Before Kaiser, I had a private audiologist, and it was standard procedure to clean or replace the tubing if requested. Unlike Kaiser, the private audiologist doesn't get an automatic stream of customers referred from the overall insurance pool, so it has incentives to treat customers well. It is a for-profit entity, while Kaiser Permanente is one of the nation's largest non-profit health plans. Before I go further, I want to say I like Kaiser. It has an integrated-care model, which is the future of healthcare--if we get it right.
Interestingly, the audiologist told me Kaiser's hearing aid unit was "for profit." I'm not a tax lawyer, and the idea of a non-profit entity with a for-profit subsidiary sounds odd, but it's possible the audiologist isn't a tax expert and mis-spoke. Later, I realized the audiologist's use of "for profit" might have been a way to subtly get out of performing a basic medical service. If you only have 20 minutes a patient, and if you don't need to attract new patients because they're part of an existing insurance network, why do extra work? What is the incentive to treat the patient as a whole person, regardless of whether your corporate structure is for-profit or non-profit?
Such problems aren't unique to healthcare. Even mid-sized law firms now require associates to charge 10 or 20 cents per copy, limiting copy machine use by requiring an electronic client billing code. In the past, firms would also charge an inflated flat rate to send faxes. As you might suspect, the incentive to nickel-and-dime clients in a for-profit system is high, which leads many people to advocate a non-profit system where the culture can, in theory, focus on seeing the person as a whole human being. Yet, here I was, in a non-profit entity, and the incentives clearly discouraged an audiologist from assisting me in a simple way. The lesson? Tax structures don't tell you anything about employees or their dedication. They don't tell you whether the employee is burned out or if she feels like a meaningless cog. They don't tell you if the employee wants to help you but is constrained by policies discouraging common sense.
A for-profit system might be better if it attracts the most ambitious, hard-working employees, especially if a non-profit system pays less or attracts burned-out employees. Indeed, even a non-profit system must manage patients efficiently, and software now handles day-to-day operations for most large entities, restricting flexibility and personal initiative.
Remember going to a doctor's office and waiting for 20 to 30 minutes after your appointment time? What if that inefficiency allowed the doctor to listen to patients more and give everyone the benefit of more personal service? What if technology has sacrificed our ability to feel useful and to take care of people in ways that build lasting relationships? What if tolerating technological advances that limit personal flexibility but increase efficiency has seeped into other parts of American culture, limiting our ability to think long-term?
I don't know the answers to the above questions, but removing personal discretion from employees and increasing hurdles to long-term customer relationships aren't the solutions. To be fair, the audiologist did give me extra options that answered other questions I had. However, by the time she showed me a catalog with useful add-ons, I didn't know if she was genuinely trying to help me, or if she had a sales quota.
Dealing with American healthcare is enough to make a diehard capitalist into a committed socialist. That should scare us all.
Bonus: "Despite all the false positivity, I find Americans to be generally the most stressed out and unhappiest people on the planet. Despite all the resources, and all the money they have, they are sadder than people I know who can barely make ends meet in other countries, but still know how to live in the moment." -- Benny Lewis
Americans are confused about "for-profit vs. non-profit" because they're not used to seeing actual sticker prices for healthcare services and because insurance has allowed diffusing ever-escalating costs. Such a system works only if more people are added to the same insurance pool each year, which gets trickier if true competition exists.
On paper, a for-profit entity has more incentives than a non-profit to be efficient and better at preventative medicine, thereby lowering long-term costs. Yet, even that basic premise is questionable if a non-profit has leadership that rewards employees for efficiency and reducing the number of unnecessary third-party tests. The trick is getting the balance between efficiency and customer service right.
Why do other countries seem to handle healthcare better? Reasons might be counterintuitive or simple. For example, they could be dealing with a population that drives less because of better public transportation, which increases daily walking time and therefore decreases heart disease rates. Maybe people are less stressed because they have less debt or more free time. Perhaps fewer people engage in excessive drinking or prefer wine to beer. (Even the "wine vs. beer" factor requires more analysis because the main difference might be that most wine is more expensive than most beer, encouraging less consumption and therefore fewer negative health effects.) Is the climate extremely hot, encouraging more showers and therefore more cleanliness, reducing disease transmission? Or does a hotter climate make it harder to walk more, increasing health risks?
The more we analyze complex problems, the more it becomes obvious that nothing can be fixed on a national level in any large country, and one reason smaller countries like Singapore are so successful is because they are smaller and can act locally and more quickly when problems arise. (Note: "democracy" isn't necessarily the answer to anything once you realize any system that encourages local solutions, accountability, and more humility works.)
Back to my hearing aid purchase. I've been severely hearing-impaired since birth. American health insurance doesn't fully cover hearing aids, even if medically necessary. Also, tax write-offs require such a high level of medical expenses, almost no one actually qualifies. (Meanwhile, a dollar spent on advertising creates an automatic, above-the-line deduction--the best kind of tax break.) I will be paying 1200 USD out-of-pocket for the most basic Oticon aid, labeled as "entry" level. I probably need two more functional aids costing 2600 USD each, but I tend to spend a lot of time alone (cue the chicken or the egg debate), and I'd rather use my money for more pleasurable experiences like eating out or even giving it to a friend who can pay off high-interest consumer debt.
Why do I share my experience with you? I want you to get a sense of why American healthcare is so problematic and why labels like "single payer" or "for-profit" don't help. When I made the appointment to purchase the new aid, I already had the benefit of a previous visit, where the audiologist explained the different options and price points to me. I was given a standard half-an-hour appointment, but I saw the system scheduled the next patient in 20 minutes, creating an incentive to minimize the time spent with me.
Not knowing about the 20 minute scheduling until my follow-up visit, I brought another aid I use as a back-up, which needed a simple tubing replacement. The audiologist looked at it and told me it's not common for Kaiser to work on an aid not purchased through its own service. She turned the aid over a few times and finally left for three minutes and returned with a tube.
A tube is just a piece of plastic attaching the earmold to the electronic aid that goes behind the ear, but if the five cent piece of plastic isn't replaced regularly, the expensive aid won't work optimally. Before Kaiser, I had a private audiologist, and it was standard procedure to clean or replace the tubing if requested. Unlike Kaiser, the private audiologist doesn't get an automatic stream of customers referred from the overall insurance pool, so it has incentives to treat customers well. It is a for-profit entity, while Kaiser Permanente is one of the nation's largest non-profit health plans. Before I go further, I want to say I like Kaiser. It has an integrated-care model, which is the future of healthcare--if we get it right.
Interestingly, the audiologist told me Kaiser's hearing aid unit was "for profit." I'm not a tax lawyer, and the idea of a non-profit entity with a for-profit subsidiary sounds odd, but it's possible the audiologist isn't a tax expert and mis-spoke. Later, I realized the audiologist's use of "for profit" might have been a way to subtly get out of performing a basic medical service. If you only have 20 minutes a patient, and if you don't need to attract new patients because they're part of an existing insurance network, why do extra work? What is the incentive to treat the patient as a whole person, regardless of whether your corporate structure is for-profit or non-profit?
Such problems aren't unique to healthcare. Even mid-sized law firms now require associates to charge 10 or 20 cents per copy, limiting copy machine use by requiring an electronic client billing code. In the past, firms would also charge an inflated flat rate to send faxes. As you might suspect, the incentive to nickel-and-dime clients in a for-profit system is high, which leads many people to advocate a non-profit system where the culture can, in theory, focus on seeing the person as a whole human being. Yet, here I was, in a non-profit entity, and the incentives clearly discouraged an audiologist from assisting me in a simple way. The lesson? Tax structures don't tell you anything about employees or their dedication. They don't tell you whether the employee is burned out or if she feels like a meaningless cog. They don't tell you if the employee wants to help you but is constrained by policies discouraging common sense.
A for-profit system might be better if it attracts the most ambitious, hard-working employees, especially if a non-profit system pays less or attracts burned-out employees. Indeed, even a non-profit system must manage patients efficiently, and software now handles day-to-day operations for most large entities, restricting flexibility and personal initiative.
Remember going to a doctor's office and waiting for 20 to 30 minutes after your appointment time? What if that inefficiency allowed the doctor to listen to patients more and give everyone the benefit of more personal service? What if technology has sacrificed our ability to feel useful and to take care of people in ways that build lasting relationships? What if tolerating technological advances that limit personal flexibility but increase efficiency has seeped into other parts of American culture, limiting our ability to think long-term?
I don't know the answers to the above questions, but removing personal discretion from employees and increasing hurdles to long-term customer relationships aren't the solutions. To be fair, the audiologist did give me extra options that answered other questions I had. However, by the time she showed me a catalog with useful add-ons, I didn't know if she was genuinely trying to help me, or if she had a sales quota.
Dealing with American healthcare is enough to make a diehard capitalist into a committed socialist. That should scare us all.
Bonus: "Despite all the false positivity, I find Americans to be generally the most stressed out and unhappiest people on the planet. Despite all the resources, and all the money they have, they are sadder than people I know who can barely make ends meet in other countries, but still know how to live in the moment." -- Benny Lewis
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