Profits: Not the Problem

Posted by John LaPlante in Health Care on Nov 17th, 2009 | no responses

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The Association of American Physicians and Surgeons (that is, the group of doctors that hasn’t sold out or cowered to the federal government) has a series of short articles about various claims made by advocates of turning health care over to government.

A recent one tackles head-on the issue of profits: Are profit-grubbing companies the source of our health care woes?

Actually, the problem is that we have too little pursuit of profit, not too much: “Profit maximization combined with competition is the only reliable way we know to keep costs down.”

In addition, it’s not as if health care is loaded with super-profitable companies: “Health plans are the 86th most profitable industry ..  with a profit margin of 3.3%, about the same as home furnishing stores and heavy construction. Hospitals are 77th (with a margin of 3.6%). Brewers have a margin of 25.9%; major drug manufacturers, 16.5%; networking and communication devices, 16.3%; education and training services, 11.7%; and general entertainment, 6.8%.”

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