Hospitals and the concentration of wealth
Title: For-profit hospitals bill bigger
Date: June 10, 2004
From the article:
- "'Investor-owned hospitals charge outrageous prices for inferior care,' Woolhandler said in a statement.
'The for-profits skimp on nurses, but spend lavishly on their executives and paper-pushers.'
Himmelstein pointed to fraud cases involving for-profit health care companies including Columbia/HCA Healthcare Corp. , which was hit by a Medicare scandal in 1997; Tenet Healthcare Corp., which is being investigated for allegedly overbilling Medicare; and HealthSouth , where 15 former executives have pleaded guilty to criminal fraud charges."
- In a commentary published in the journal, Dr. Steffie Woolhandler and Dr. David Himmelstein of Harvard Medical School commented that 13 percent of all U.S. hospitals are for-profit, and said converting them to nonprofit status could have saved $6 billion of the $37 billion spent on care at investor-owned hospitals in 2001.
- "The reality is that for-profits face significant economic challenges. The first is they have to generate revenues that will satisfy shareholders," Devereaux said.
"Second, they have high executive bonuses. Thirdly, they are very top-heavy and have high administrative costs. Also, they have to pay taxes. That is a lot of extra money that they have to come up with," Devereaux added.
What if you applied this type of analysis to the medical industry as a whole? For example, to drug companies. The top five drug companies in the U.S. pay over $10 billion per year simply in dividends. That's just one piece of the puzzle, and just that one little piece costs us $100 per household in the U.S. Then add to that the shocking executive salaries (Henry A. McKinnell -- just one executive out of tens of thousands in the pharmaceutical industry -- received $28,151,481 in 2003 from Pfizer, for example), the bonuses, the stock grants, the jets, the lavish office buildings, the top-heavy administration costs, the billions spent on advertising, that amazing price gouging (prices in Canada for the same drugs are consistently lower by a factor of 50 percent), etc, etc.
These are the costs of the concentration of wealth. If we were to eliminate these costs across the entire health care industry, the savings would, at a minimum, total $1,000 for every man, woman and child in the U.S.