There are a variety of reasons for the expense of our health care system — and I cannot begin to summarize them in 500 words or less. Arguably, the existence of investor-owned health care systems and insurance companies plays a major role. Making a profit from disease has not served our country well.
Way back in the 20th century, hospital systems were mostly charitable institutions. Aggressive business practices pushed by hospital administrators trained in schools of business changed this. The rise of for-profit health care systems has exacerbated the excessive rise in charges, as well as encouraging corruption.
Today, organizations like the Hospital Corporation of America dominate the health care scene. HCA is a publicly traded company with annual profits approaching $3 billion. It paid over $2 billion in fines and settlements to the federal government to resolve Medicare and Medicaid fraud in 2002. Because of this malfeasance, the chief executive, Rick Scott, was forced to resign. Today, after spending $75 million of “his own money,” he is governor of Florida.
More recent examples show the pillaging continues. This year, Florida eye doctor Salomon Melgen was sentenced to 17 years in prison for health care fraud, submitting false records and falsifying patient records. He was ordered to pay $42.6 million in restitution. In a separate case, the charges against Sen. Bob Menendez were dropped after a New Jersey trial ended with a hung jury. Today, he sits on the Senate Finance Subcommittee on Health Care.
In Texas this year, the Mayor of Rio Bravo and three others were charged by the U.S. Department of Justice with a $150 million fraud and money laundering scheme. Last year, a Fort Worth doctor was convicted in a $50 million Medicare fraud scheme. I believe this would be far less likely if service rather than profit was the measure of success.
For those who believe it is a Medicare problem, recognize that for-profit insurance companies can simply raise premiums to cover losses. Does fraud occur among private Texas companies? Who knows? The Texas Department of Insurance, since 2016, has successfully prosecuted only four fraud cases related to health care. The combined restitution was just over a million dollars with two individuals going to jail. Clearly, they are less observant than the federal government in pursuing Texas fraud.
Can this be alleviated? Certainly, but this requires the will to demand that health care and health insurance become closely regulated. Specifically, the profit motive for health care must be removed. This means that the insurance companies would compete by offering better service. Similarly, the health care systems would once again focus on delivering quality care. A corollary to removing the profit motive would be to cap senior executive salaries.
Finally, Texans should require the Department of Insurance be more aggressive in pursuing health care fraud. In countries where health systems remain as charities and government mandates insurance, treatment is available to all. This might reduce the tragedy of health care in America.