"Profit" is not a necessity - a rant

[EstimatedProphet]

I was watching a backlogged recording of Oprah the other day - the Michael Moore episode - and they had a spokesliar for the health insurance oligarchy on. One of her points was that doctors have to make a profit.

WRONG!

Doctors have to make a LIVING, not a PROFIT. They are not the same. A living means they pay their expenses, take care of their bills, put food on their tables, raise their kids, etc. A profit means they make excess capital which can be reinvested somewhere.

One of the reasons Republicans have this country so screwed up is because they have changed and confused the meanings of words. This is another example. The average person doesn't understand the difference between making a living and making a profit anymore, so they hear dumbass statements like that and don't bat an eye. The health insurance thieves then get their false justifications made scot-free, and the end result is that we are once again argued into keeping a healthcare system that ensures people become ill, while the insurers take the public's money and run away with it. The distinction between profit and making a living may be a subtle difference, but it is still an important one. Everyone of course has to make a living, and no one wants to deny doctors that - even a luxurious living by the average person's standards. Saying that they have to make a profit is saying that they have to act so that their business expands and makes more money, instead of only breaking even on their expenses, which includes salary for the doctor and staff.

If we are ever to have the healthcare we need in this country, this is one of the ideas we will have to put to rest. socialized medicine doesn't mean that the doctors involved are required to live as poverty-stricken serfs, but making profits is for corporations and investors, and really doesn't have a place where people's health is on the line.

[nashville_brook]

1. moreover, she was saying that docs need to make a profit for her industry (insurance) not their own.

great rant. right on.

[EstimatedProphet]

2. And it really pissed me off that it slipped right by everyone there

Nobody challenged her on it.

[La Lioness Priyanka]

3. excellent point. had you not brought it up i wouldnt have realized it.

thanks.

[EstimatedProphet]

5. You're welcome

[aint_no_life_nowhere]

4. We're all supposed to be businessmen and businesswomen

Whether we're preachers, artists, doctors, lawyers, dentists, engineers, or anything else, we're supposed to identify ourselves as businessmen or businesswomen. We're supposed to be making a profit and investing that profit in stocks, real estate, land, or commodities and becoming entrepreneurs of our life. Our life itself is now a business and if we're not speculating and investing our money, we're falling behind.

When I was a kid, no one around me invested in stocks or land. None of my friends' parents dabbled in the stock market or bought extra homes. They had savings accounts in the bank maybe, or they bought U.S. government savings bonds. If their parents made money, they lived well, but they didn't have to become obssessed with placing their money well, just to keep up.

I fear that America has now become entirely too focused on finance and investment. We don't make as many things as we used to and our economy has geared up to become a financial services economy instead of a manufacturing economy. If we make anything, or provide a service, it's not a purpose or end in itself. Whatever we do as a living, from doctoring to plumbing, it becomes merely a means to acquire profits so we can investment them in our business, which is a our personal life.

[EstimatedProphet]

7. Good points

I have to wonder sometimes why it is more people don't see through the financial wet dream. Economies simply cannot grow forever - the system just doesn't work that way. If everyone invested and became a millionaire, what would being a millionaire mean? Who, having a million dollars in resources, in an economy where everyone else has a million dollars, would run a business where they charged normal prices for anything?

[tcfrogs]

6. I'll bite. Why would someone go into business without trying to make a profit?

:shrug:

[EstimatedProphet]

10. Shouldn't medicine be a service, rather than a business?

That's what the difference is. If people look at healthcare as a business, then by the nature of their outlook they will categorize it in business methods, and making a profit becomes a necessary part. But if healthcare is looked at as a service instead, then profit is no longer necessary, only making a living. without profit as the motive, the factors which make healthcare in this country substandard in the industrialized world diminish. Corporations would no longer be involved, so they would no longer make decisions based on profit rather than wel-being of their clients.

Besides, in my experience doctors rarely refer to themselves as businessmen first.

[MADem]

8. It's a motivator, though. That "not a necessity" idea worked not too well in the

USSR. And China. Which is why they have reformulated their economic sectors.

People are motivated to IMPROVE their lives. So, a doctor who is given three hots, a cot, and just "enough" for his or her family is going to go somewhere ELSE where he or she can make a little "profit" --if the government allows them to leave, that is--maybe get a nicer house, afford a better school, wear nicer clothes, get a better car, save for a nicer college for the children. A doctor can live just fine in India--but they can "make a profit" over here, live better, AND support their parents and a slew of assorted relatives back home. Who's going to pass that up if they get the chance, realistically?

Nothing wrong with a little profit. It's when the "little profit" becomes OBSCENE profit that you have a problem.

[EstimatedProphet]

12. OK, but I disagree with your interpretation of "profit"

Certainly people are motivated to improve their lives. When they're motivated to make a "profit", they are trying to make income which is above and beyond their needs or wants. I would expect them to want a higher standard of living - who doesn't? And who doesn't want to live more comfortably? But does that necessitate profit, or just covering those costs?

I guess what I am trying to get at is, when insurance liars talk about doctors needing to make a profit instead of a living, conflating the 2 ideas, they can use it as a tool to attack single-payer healthcare. They plant the idea that doctors will not be able to make a living unless they are making excess money.

[MADem]

14. I'm not "interpreting." I'm just using the old dictionary definition of the word.

http://www.merriam-webster.com/dictionary/profit

Main Entry: 1prof·it
Pronunciation: \ˈprä-fət\
Function: noun
Usage: often attributive
Etymology: Middle English, from Anglo-French, from Latin profectus advance, profit, from proficere
Date: 14th century
1: a valuable return : gain
2: the excess of returns over expenditure in a transaction or series of transactions; especially : the excess of the selling price of goods over their cost
3: net income usually for a given period of time
4: the ratio of profit for a given year to the amount of capital invested or to the value of sales
5: the compensation accruing to entrepreneurs for the assumption of risk in business enterprise as distinguished from wages or rent


The simple answer is that doctors CAN make a profit with single-payer. It's the INSURANCE COMPANIES that will no longer be able to make an OBSCENE profit. And that's why they are griping...follow the money.

[EstimatedProphet]

18. Alright. I think we agree in principle.

And that was a point glossed over by this presenter. By saying that doctors have to make a profit, she was avoiding the fact that the true profits in the system are going to corporate shareholders. The average person gets confused, and thinks that single-payer will not allow doctors to live at all, which is preposterous.

[scisyhp1]

19. What USSR really has shown is

that a vibrant dynamic society of people without any profit motive whatsoever
can in fact exist and even strive. The demise of Soviet Union had very little
to do with its people not being motivated by profit, or, if you wish, everything
to do with its enemies, most of all the US, being afraid of instructive value
of that example.

[eridani]

34. I think it had more to do with it being a one-party state

Where communists are in plain old regular political parties, they do a lot of good. Like in Kerala.

[bean fidhleir]

24. Rubbish. Very few humans are members of homo economicus, and they

usually display other pathologies, too.

Look at the cross-cultural research being done using the "ultimatum game": people around the world refuse to play the "better than nothing" role postulated by economic theorists. Instead, they choose to punish unfairness even at their own expense. To them, being treated fairly is more important than getting more money.

Look, too, at research into personality and motivation. Only a few percent of the population are pathologically focused on power and wealth the way you want to believe they are. For the rest of us, money is a "hygiene factor": above the amount needed to live moderately, it no longer motivates.

[OmahaBlueDog]

9. If all you'd get out of eight years of med school is a "living", I think few would do it

I'm not saying there aren't doctors who practice primarily out of decency or a desire to help people, but I think the huge sums of money, and the goodies that come with those sums (fancy cars, big houses, boats, lots of restaurant trips) are what attract top level talent to the profession in this country.

I'm not really disagreeing with your overall sentiment. I'm just saying that whatever medical plan we develop will have to ensure that docs remain very well paid.

[EstimatedProphet]

13. Really? I went through 12 years of college, and that's all I want

I'd stack bioscience grad school up against med school any day, too.

Again, I'm not arguing that they must live modestly. I'm arguing that making a living is not the same thing as making a profit. I don't see any issue against having them be very well paid. Profit though implies that they make disposable income. They can have all their expenses paid, and still have exhorbitant expenses, and still live very well off indeed without making a profit. Profit implies capitalistic growth.

[MADem]

17. It's not the quality of the education, it's the utility of it. Every community does not need

an attendee of "bioscience grad school." They do need a doctor, or a physician's assistant.

Level of difficulty is irrelevant, here. It's the skillset needed that drives the salaries.

[EstimatedProphet]

20. I agree. Not what I was getting at though.

[bean fidhleir]

26. Look at Cuba.

Doctors in Cuba are being paid less than they could make as, e.g., taxi drivers. Yet they continue to practice medicine. The intangible rewards are more important to them than money --which is why they went into medicine in the first place!

In general, doctors who are in it for the money have mediocre skills. There's only so much time in a day, and that group spend it improving their bank accounts not their ability to do medicine.

[La Lioness Priyanka]

27. in every other country people do

[eridani]

35. The British and French docs in SiCKO seemed to have very comfortable lives

And they probably like it a lot that the government picks up most of the tab on malpractice insurance as well.

[La Lioness Priyanka]

37. indian doctors are wealthy but not industrialist style wealthy, as well.

its a good living. great job security. respect.

[nichomachus]

11. The sad fact is that many doctors are not making a profit

Some are -- some are doing quite well -- but others, mostly GPs and Family docs get so little from the HMOs that they have to see tons of patients just to make a living. This is why you're in and out of there in four minutes flat.

Sometimes, when they see you, assuming you're in an HMO, they are not getting very much in the way of reimbursement. Much less than you might think.

[EstimatedProphet]

15. That's another aspect of the system that should be gotten rid of

People often don't see it either. HMOs not only rip off the insured, they rip off the providers. Another reason to get profit motives out of the profession.

Again though, I must stress: making a living is not the same as making a profit. Here's a good definition, from Wikipedia:

Pure economic profit is the increase in wealth that an investor has from making an investment, taking into consideration all costs associated with that investment including the opportunity cost of capital.

Certainly doctors should be well compensated for their services. But do they need a profit? Conflating the meaning of the two concepts, like it has been in America, only clouds the real issues, which works to the benefit of the healthcare insurance piggies.

[Spike89]

16. Many doctors do operate a small business

They own or partner in a small clinic and need to pay rent, pay employees, and yes, raise capital so they could weather a downturn or crisis. The word istself isn't a problem, and for the most part, Doctors are not the problem. The biggest problems in our health care system are the insurance industry and the support industries (pharma, diagnostic/treatment equipment).

Gut/outlaw the immoral health insurance cartels and the support industries will quickly come in line. It isn't a perfect or easy solution, but it beats continuing down the obscenely amoral path we're on.

[OmahaBlueDog]

22. I disagree: Doctors are part of the problem

The insurance industry and the support industries (pharma, diagnostic/treatment equipment) are elements of the problem -- I'll grant that. And when I say the Doctors, I'm not actually referring to the practicioners, but the folks that run the doctor's business offices.

Primary example of why the Doctors are a big part of the problem: If you are lucky enough to have insurance, take a look at the statement sometime. Doctors negotiate lower rates with insurance companies than individals can obtain on their own. I recently had a diagnostic procedure performed that would have cost about $6K if I'd shown up with a Visa card. As it was, the insurance carrier paid about $3.5K. Different insurance carriers negotiate different rates, and medicaire/medicaid may have entirely different fee schedules. Another example: I had a job transfer, and as part of the transfer, I had to switch from an HMO to a PPO. I immediately noticed that, with the PPO (which has a higher fee schedule), doctors offices suddenly weren't making me wait 3 months to get appointments for routine physicals -- I could come right in.

This gets to what I think is the true evil in the healthcare system now -- debt. A doctor charges a $1K for a procedure, the patient can't pay, the debt is (essentially) passed on to the other customers, and prices rise accoridingly, creating yet more patients who can't pay.

If we weren't going for single payer, the easiest solution to "ut/outlaw the immoral health insurance cartels" would simply be to require that all dmoestic health insurors be "mutuals", and to form a government corporation to reinsure them. A mutual is an insurance company jointly and severally owned by its membership. "Profits" are returned to the members in the form of credits, or reinvested for bad years to come. They'd have the private secor benefits of being responsive to the members of their group and finding innovative ways to cut cost, but would not be ruled by stockholder demands or profit pressures.

Another simple solution we could enable right now, without making a single solitary change otherwise, is to have all providers either a) publish a price list or b) use flat rate manuals much as mechanic shops do. This creates 2 benefits. First, everyone pays the same price for the same procedure -- whether they are an individual or an insurance company. Second, people could compare rates for work and judge providers on cost versus perceived ability.

[Spike89]

25. Actually, I think we mostly agree

I'll submit that you kinda have it backwards "Doctors negotiate lower rates with insurance companies than individals can obtain on their own." and say that insurance companies are negotiating the lower rates (for their own bottom line). The doctors often can't afford to not be on the "approved provider" list of the insurance company, so will take the lower payment just to survive. This means they will probably need to raise the rates for "cash" customers because they're getting low-balled by the insurance company.

You other point, debt, is purely a function of insurance being out of reach for so many. That isn't a doctor's fault (in fact, the "best" doctors are going to provide services even when they know payment isn't assured). Of course the doctor needs to charge enough to make a living, if 25% of his business is written of as bad debt, he needs to make sure the 75% that do pay will cover 100% of his revenue needs.

Reforming the insurance industry and regulating it (making them become mutuals is one way) still leaves many people uninsured and thus either lacking care or raising the costs for the ones who are insured. As for "finding innovative ways to cut costs" well, that seems to be what has lead us to where we are today...accountants rather than health care providers making the decisions on what makes sense medically.

Finally, the shop mechanic concept will never cause equal prices (see above) as long as uncovered people are fiscally unreliable when compared to the insured. When I ran my business, if I knew one customer type had a 90% payback history and another type had 100% payback, I tried to only deal with the sure thing, or I'd adjust my bids to reflect the risks I was taking.

[EstimatedProphet]

29. But:

when people start arguing that someone has to make a profit, as in they have to make a profit or they'll starve", the word DOES become a problem - it's not true.

[kwassa]

21. A profit does not mean excess capital that can be re-invested elsewhere

A profit may go towards many future expenses, or development of the future business, or paying down previously-incurred debt.

This might be where the doctor's salary lies, too.

My own physician sold his practice here in Maryland because he couldn't make enough money to send his kids to college, due to very high malpractice insurance premiums, and high cost-of-living. He bought into a practice in Idaho.

[EstimatedProphet]

28. Same thing in different terms, as far as this is concerned

The point I was trying to make is this: when someone says "a doctor has to make a profit, after all", what they are doing is equating making a profit to making a living, and they are not the same. The implication inherent in the statement is a) you either make a profit, or b) you starve. That's not true at all. You can say that about making a living, but making a living does not mean making excess capital. It can include excess capital, but it isn't a necessary condition. When the terms are conflated, the issue becomes confused. Should someone expect that they go into a career to bring in investment capital of some sort, other than typically assumed for the average person such as a retirement fund? If "profit" is stated to be a necessary condition for someone to stay in a career, that implies that they have to do far better than covering their expenses, however large those expenses are. That becomes a foundation for the insurance bandit argument, since they indeed do have to make a profit, because they have shareholders.

[kwassa]

31. I am not understanding your argument

Making a profit, and making a living, are not necessarily different.

it depends on how the doctor is paid. He is, after all, a small business owner with employees. His salary is what he can afford to pay himself, depending on how the business is set up, and what kind of partners he has. Many GPs are descending into the lower middle class.

All of us want to have investment capital, which only comes from income above basic needs. This is not unique to doctors. How many Americans hold stock?

We have extra from being unable to sell a townhouse ten years ago without losing money, and became landlords instead. We sold that 18 months ago, and bought another house to rent out. We hope to profit from an increase in value, as well as live in that house. This is above and beyond the house that we own that we live in and expect to hold on to. Is this wrong?

I think the idea that people go into medicine to make money is fading with the diminishing incomes.

[EstimatedProphet]

32. Let me try to explain...

There's an old saying: "You have to make a living." In other words, it's pretty much expected that people are supposed to work in exchange for the ability to pay their way through society. I.E. make a living. The better your ability to market your skillset, the better living you can make, which often includes stock options, investment income, etc.

Now, certainly making a profit can fall into this category as part of making a living. However, when the spokesperson for health insurance companies says that doctors have to make a profit - in place of saying they have to make a living - it's part of the argument that a for-profit healthcare system is the only workable solution for this country. We all know that that's not true. But by conflating the terms "profit" and "living", people will become confused about exactly why for-profit healthcare is such a bad thing. After all, it's necessary, right? No, it isn't, because profit in and of itself relates to excess capital made on selling an object or service for more than it is worth. Merriam-Webster:

the excess of returns over expenditure in a transaction or series of transactions; especially : the excess of the selling price of goods over their cost

If doctors meet their business expenses, including paying themselves a salary, however luxurious, and paying their staff, bills, college loans, etc. then they are still making a living, not a profit. No one begrudges them that. For someone to say "they have to make a profit, after all" is disingenuous, because they can easily make a good, even great living, and still not have to show a profit in their practice. It has nothing to do with the idea that they should or shouldn't be able to provide for themselves. It has to do with the idea that they are either expected to make a profit (i.e. increased income over their service value, which is after all the goal of the for-profit health insurers stockholders and CEOs) or fail. No they aren't. If they have ridiculously luxurious expenses in society, and still cover their expenses, but aren't making money above and beyond the value of those expenses, they still aren't making a profit even though they are wealthy. Planting the idea that profit is an obligation to which the alternative is failure justifies the for-profit healthcare system, and results in the mindset that insured people should be denied service in order to protect those profits, since the alternative in that mindset is bankruptcy.

I don't have an issue with the idea of doctors making money for their services, nor am I trying to argue that they are overpaid. I have an issue with the health insurance industry trying to protect their bloated profits - which they protect by the way by denying service whenever they can, thereby forcing their clients to pay money for nothing - by using the statement "you have to make a profit" in place of "you have to make a living", which confuses people.

[femrap]

23. And this 'Constant Growth' bullshit....

Don't people realize that growth can't last forever...there are down times and up times. Greedy shareholders (other corporations essentially) insist on more and more, higher and higher.

That's impossible. They need to set aside for the rainy days...Where the fuck has common sense gone? Oh, I remember, it left with that other thing....Shame.

[treestar]

30. If you are in business for yourself, you have to make enough to

pay the expenses of running the business. Then you have to make some over that to live on.

A business that does not show a profit eventually is going to fail.

[DU GrovelBot]

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[jmowreader]

36. You know where that "excess capital" gets reinvested

In a lot of cases, it gets reinvested in the doctor's own practice. If Doctor Smith wants to keep up with Doctor Jones, he's got to have the shiny new diagnostic machine that just hit the market--because Siemens Diagnostic paid an advertising company $40 million to tell all his patients to "ask their doctor" about getting diagnosed on the 3393 Bone Density Tester (or whatever it is) and they all are. Now he's got one, and if he runs four thousand more patients through it at $750 each he might break even on the unit. Doctor Smith is an ophthalmologist.

As long as "great new medical advances" come with two-comma price tags, profit in the medical field is a necessary evil.