Where's my healthcare?

Short answer, in someone else's pocket. The long answer is that we have the best health care system in the world. Of course if affordability is part of the quality equation, our health care system doesn’t seem so good. Begin by asking your self what the money goes for when you have had a hospital stay.

If you were to look at the books of a non-profit hospital or a for profit clinic, you would find accounting for wages, facilities and instrumentation. You may also find debt service relating to mergers and acquisitions. You will find that merger and acquisition activity is highly correlated with spikes in healthcare cost.

Two things go on when for profit or non-profit corporations merge. Upper management rewards themselves with raises and bonuses for being so clever, and the resulting entity borrows cash to pay for executive salaries, bonuses and merger/acquisition related legal expense, and any of myriad restructuring costs, up to and including employment termination costs. For an example, see http://www.sco.ca.gov/eo/pressbox/2005/10/merger1017.pdf.

In addition to this, when companies merge, even non-profit corporations, many platitudes are spun to reassure the public of the benefit to society. What is true is that monopolistic entities are formed and that these entities have been widely known to extort higher payments, sometimes double, from payers/insurers for the same service based on a threat to deny them access to their market. Pretty nasty huh? And, the concomitant medical entities just simply follow suit and ask for more. See: http://www.ftc.gov/ogc/healthcare/. It is not the single payer system that is at fault, it is the single payee's that are at fault.

Why would an ostensibly non-profit corporation be concerned about cash flows and, essentially, profit? The answer is traced to the corruption of its executives, their contractual incentive plans and salaries.

It is probably impossible to track down and audit the amount of cash that has been siphoned out of the health industry by executives, corporate attorneys and board members. What is possible is to reverse engineer their books and see how much the direct expenses of health care are, i.e. the cost of wages, facilities and instrumentation. Everything else on the books is theft. To my knowledge, this has never been done by anyone answerable to the public.

Republicans have already spun this as being the fault of a single payer system. Nothing could be further from the truth. It is the fault of corrupt executives.

The answer to this is not regulation and oversight of an industry that is the most crucial to the well being of our citizens. That would add to the expense of health care to society. The answer is to convert Medicare to cover everyone. Corruption would still exist, but corruption is an opportunity crime and opportunities for corruption only exist in transactions. The fewer transactions there are, the less chance there is for corruption. A single monolithic health care system would eliminate all but the most essential transactions.

Another source of high health costs is technology. More precisely, costs are impacted by duplications in high tech equipment. Why, in for instance a region where every single patient with a condition requiring specialized equipment could be served by one installation in one health facility, are there installations of the same equipment in all of the health facilities? The answer reverts back to the profit motive of administrators. If you ever hear a hospital administrator express concern about rising costs in health care, you should laugh out loud if not throw something.

To be continued…Is malpractice law driving up costs?

Nationalize healthcare, or

Ban mergers and acquisitions in the industry.

Ban advertising and marketing and other efforts to grow market share.

Ban for profit re-billing operations.

Re-examine the books of every corporation that has had merger or acquisition activity in the past 20 years and account for related expenses, and publish the findings.

Regulate capital investments in technology.