Profiting from patients
I don’t often write about the NHS. I don’t ever complain about it: my local GP and hospital are both excellent (and have been, unfortunately, well-used by my family). I figure if they can get it right here, in one of Britain’s poorest boroughs, it can be done anywhere. The NHS surgeon that saved my daughter’s life, in Georgeous‘s constituency next door, is no more salubriously sited.
But the best blog post I’ve read all year has given me a nudge. Specifically, this:
… to voice my entrenched views questioning the morality of making a profit from the provision of healthcare…
I guess this feeling is common. It probably forms the backbone of public opposition to “privatizing” the NHS. But why? Why do so many of us instinctively feel that profiting from healthcare is plain wrong?
We don’t have the same hostility to profiting from chocolate (rots teeth) or brewing (cirrhosis) or skateboard-making (broken wrists). But the people who put the ultimate impact of these right, we expect to work for love. It’s not an argument about funding limits: public healthcare expenditure per capita in France is higher than the UK, within a national insurance system part-provided by private contractors. It’s not, either, about healthcare being “free at the point of delivery” or involving co-payment. Both are compatible with wholly private, wholly public or neither-Arthur-nor-Martha provision.
And the finite-pot argument (that profit subtracts from the total available for patient care) is a fallacy, if multiple providers increase competition and therefore efficiency. When only one airline flew to Paris, nobody could afford to go. Now most of us can. Nobody seriously argues for a National Supermarket Service. And so on. This economic line of reasoning, the finite-pot argument, whether accurate or not, seems too instrumental anyway: the objection appears to be one people just feel.
But yet, in my experience, people working and being treated inside the NHS don’t just feel part of a giant civic institution, as they do in state education. There are no civic side-benefits, not any more. I just wanted the surgeon to make my daughter well. I didn’t care who paid her. The institutions that impacted daily on staff were teams, groups of colleagues, wards, units.
And we don’t just feel that doctors and nurses ought to work for board and lodging and no more. They are quite rightly allowed to make a profit from their labour. Yet companies involved in the business of making people better aren’t?
well, it’s a conflict of interest innit? Your penultimate sentence is the key because presumably without realising it you’ve made the quite controversial claim that people can make a profit out of their own labour.
Remember that “Profit” is a term with a precise meaning to those of us who have studied our Marx et al (and therefore to those on the left who haven’t done the hard time on the books but have picked up this usage out of context). A private doctor charges you and makes money out of providing you with healthcare, but it isn’t profit. Profit is the extraction of value from the process by an owner who is not part of the production process himself[1], and it is something which by its nature needs to be *maximised*. This was the big insight of “Capital” which was not in the literature before Marx and which was ubiquitous in the literature after Marx. The insight that the “profit motive” is a totalitarian one, so to speak – it is not possible (economically or psychologically – Marx would probably say “economically _and_therefore_ psychologically”) to be a little bit motivated by profit maximisation and a little bit by something else.
So I think the source of the problem is that it’s a conflict of interest. There is a real difference in kind between a private hospital run as a mutual (like BUPA) or a private hospital run by a for-profit company, and that difference is that the non-profit one can credibly claim to put its patients first whereas the for-profit one can’t and if it makes that claim it’s lying.
I also dispute that “increase competition and therefore efficiency” is an argument that one can help oneself to in the context of healthcare. The best and most competitive healthcare system in the world is quite probably the US one but it’s also ludicrously and notoriously inefficient (it’s the best because it has the most money spent on it). Not at all sure how you would measure or even define “efficiency” in this context; for flights to Paris you can measure it by inputs, outputs and profits but that is sort of the whole point.
[1] Of course it is possible to have an owner who does take part in the production process but the roles are logically separable and the owner’s total return can be conceptually be broken down into the “wages of supervision” and the “rewards of ownership”, it is amazing how many intelligent people get confused on this one and believe themselves to have come up with a devastating new critique.
Point taken on the Marxist economics. You’re right of course. I misused the word “profit”, which seeing as I’ve read and re-read Capital, I ought to have been shot for. Come the revolution, perhaps I will be.
Though all you’ve really given me is an argument that profit is immoral in some sense (or at least exploitative, which is quite different), not that it’s more immoral in healthcare than in aeroplane-building. Both have serious repercussions for user health if things go wrong.
You also open up something I hadn’t thought of: the widespread feeling that having healthcare turned over to mutuals like BUPA is also wrong. “Privatization by the back door”. They don’t turn a profit. So, why?
Competition and efficiency: I suppose you could compare the price of certain standard operations delivered by public and private provision. It’s not even nearly perfect, but back-of-the-envelope it might be interesting. I’d guess the fact that the NHS uses contractors widely for things like cataract ops. gives you a (partial) answer. But it’s not something I know a whole lot about, TBH.
I recall that there is something about the “cash nexus” which might be the Rosetta Stone that will turn my general boilerplate Marxist rant into something specific about healthcare (also, the purist in me wants to say that the healthcare industry doesn’t produce commodities in the normal sense because its output is, in a sense, labour-power itself) but my own Marxist chops are actually very weak when I stray outside the bits that intersect with Piero Sraffa.
My cynical suspicion is that the fact that the NHS uses outside contractors for cataract ops tells you more about fun and games and arbitrage between different budget pots in the NHS’ internal accounting system than it does about anything else, but it could definitely be argued the other way.
About two years ago I looked quite seriously into making an investment in a top-notch MRI scanner to rent out to NHS hospitals in a partnership with an NHS doctor. This project was a non-starter, foundering on the rocks of me not having as much money as I thought I did rather than anything else, but I certainly was intending to extract a reasonable profit from it. It certainly looked at that point as if the profit element would come from a blag on NHS capital budgeting (and to a limited extent bearing the financial risk associated with fluctuations in demand but this was really small), which I seem to remember gave me a few qualms.
This was because of the fixed-pot aspect rather than intrinsic awfulness of making a profit out of healthcare, but I suspect I might have gibbed a bit more if I was trying to get into business providing anything more “hands on” than what is basically a high end photo-me booth.
Maybe it’s the implied relationship between the owner and the workers; people don’t like the idea of having their basic needs attended to by alienated labour. This would also fit in with the fact that some people object to having their houses cleaned and children looked after by paid servants; personally I think that the correct position on this is that it’s not exactly bad but if you do it you should give up most of your ambitions to be considered a really top-notch “man of the left” and I think I feel the same way about for-profit healthcare.
Regardless of whether “profit” is the “correct” term to use here, it is still possible for doctors to have a conflict of interest in terms of income earned / work done. For example, by handing out antibiotics to people in order to get them to go away, and other laziness. I’ve not seen a Marxist analysis that deals with the laziness issue, presumably you have and can point me at one?
Not at all sure how you would measure or even define “efficiency†in this context; for flights to Paris you can measure it by inputs, outputs and profits but that is sort of the whole point.
Indeed. We can measure the inputs to medical systems easily in terms of money, but it is much harder to measure the outputs as some of them are very intangible. The care aspect of medical care, in particular.
And it’s the care aspect that people object to paying for, for much the same reasons that people object to paying for sex; it devalues the whole thing.
Personally I favour something more like the French system, where queues are virtually unheard of.
if you do it you should give up most of your ambitions to be considered a really top-notch “man of the leftâ€Â
I find that a bit bizarre. I’d have thought a definition of what it meant to be “on the left” would start and end with a commitment to an egalitarian society (in terms of wealth, power, etc.), or at the very least to the elimination of inequalities that were unfair, however defined, and in the meantime compensation for those on the wrong end of a shit deal. Whether you supported market relations as the best, or second-best, or most realistic, or only, or quickest, way to achieve that is irrelevant. Anyway, off topic…
it’s the care aspect that people object to paying for, for much the same reasons that people object to paying for sex; it devalues the whole thing.
Don’t buy that either. We pay for the NHS. And with private healthcare, it’s not exactly as if you’re expected to give the surgeon his cash as you go into theatre. In fact, the experience of going public and private is almost identical, just one has nicer sheets and a TV that can get Sky Sports.
some people object to having their houses cleaned and children looked after by paid servants
I’ll wager nowhere near as many as feel “for-profit healthcare” or “privatization by the back door” is wrong. In fact, compulsory nursery school is little more than childcare by paid servants and I’ve never heard a parent object to it.
These comments are totally bizarre, not just a little bit odd. Objections to healthcare coming from one type of provider rather than another on the basis of what some German guy said over a hundred years ago?! Objecting because it doesn’t fit nicely with self-identification on some arbitrary linear view of political allegiance?!
Surely the point of collective social funding of healthcare, however that care is actually provided, is that we get the best health outcomes for the least amount of money? Or, given a fixed budget, that we maximise the benefits from that pot? Why the fuck does it matter what Karl bloody Marx would have said about it?
The public objection to ‘privatisation’ of healthcare is easily explained, and it is simply that no-one, however hard-hearted, likes the idea of people not being able to afford life-prolonging or life-saving medicine/surgery/etc. That frame of mind probably comes from a feeling of ‘there but for the grace of God, go I…’
The ‘morality’ question then comes from having, potentially, to turn a blind eye to people falling through the cracks. It is yet another classic example of left-wingers taking heart from their good intentions, while their practical efforts continually fail those who need state services the most (see also: welfare dependency, sink schools, etc.).
Christ, that was a bit of a rant. Must start blogging again…
Why allow private companies to sell healthcare products (beds, medication etc)? Why not have all of it be state produced?
Or food. Why allow private farms? I think everyone should have access to food and healthcare (I think everyone else here does too, maybe not the deontological libertarians) as they are both essential to survival.
In all cases, farmers and bed/medication/etc producers care about profit, so they have no place in providing their products which are crucial to the lives of people (basic needs, as DD says).
Jarndyce, as to your question, perhaps people just don’t spend a lot of time trying to make their prescriptions into a coherent whole. Like the SUV driving socialist or the union president who also co-owned a restaurant and paid his employees minimum wage I know.
Whether you supported market relations as the best, or second-best, or most realistic, or only, or quickest, way to achieve that is irrelevant
Not if you believe, as a lot of people on the left do and with good reason, that a society based on market relations is intrinsically incompatible with this goal. I’m just saying here that if someone has a cleaner and a nanny and makes his money by owning a company that provides healthcare, then a lot of people are going to question his commitment to an egalitarian society, and his explanations of why his beliefs are consistent with his lifestyle are going to sound like unconvincing rationalisations (unless of course this hypothetical bloke comes up with a really brilliant argument I’ve not heard of yet).
if multiple providers increase competition and therefore efficiency.
Ah. If.
And who truly believes that it would work that way?
Capital abhors competition and will seek to avoid it in any way possible.
I mused upon this subject some time ago. The purpose of a NHS is to provide healthcare. The purpose of a private healthcare provider is to extract money from the taxpayer. Like bees and wasps, they appear superficially similar, but their behaviour is very different.
Not if you believe… that a society based on market relations is intrinsically incompatible with this goal.
I don’t.
a lot of people are going to question his commitment to an egalitarian society, and his explanations of why his beliefs are consistent with his lifestyle are going to sound like unconvincing rationalisations
Well, he might favour 60% taxation, explicit redistribution, free healthcare and education, no restrictions on the right to form unions, tight environmental regulation, and very high rates of inheritance taxation. I’m not sure the fact that he has a cleaner is in the least relevant.
Anyway, this is miles off topic.
Quix.: congratulations on zoning in on a word I italicized anyway and missing the whole point of the post.
The purpose of a NHS is to provide healthcare. The purpose of a private healthcare provider is to extract money from the taxpayer.
Eh? That makes just as much sense as:
“The purpose of a private healthcare provider is to provide healthcare. The purpose of the NHS is to extract money from the taxpayer.”
i.e. trivially true, but not nearly nuanced enough to be of any use.
Andrew: I don’t think we were objecting to healthcare based on Marx. I was merely having my hand smacked for fucking up the terminology. Quite right, too.
The ‘morality’ question then comes from having, potentially, to turn a blind eye to people falling through the cracks.
I’m not sure about that. Apart from a few crazies on your side and the entire Samizdata commentariat, nobody’s suggesting healthcare be other than universal and free at the point of delivery.
Good post.
Firstly, although we all moan about the deterioration in the NHS it is still sort of delivering, patchily. I am glad you experience is good.
I cannot enter into what doctors are paid becuase I am on, but I feel nurses are underpaid. And yes, thank you for pointing out that not only do we want to eat, but occasionally we want to go skiing or something.
But Tony’s cronies are allowed to make a profit out of the NHS : http://nhsblogdoc.blogspot.com/2006/01/it-doesnt-smell-at-all.html
and of course the managment consultants can, that is OK. And Loyd Grossman can, that is OK…but sod the nurses!
http://nhsblogdoc.blogspot.com/2006/01/calling-in-management-consultants.html
Dr John Crippen
Personally I think you have to be stark raving mad to think that the government should continue to run healthcare in this country. It’s not exactly going very well is it?
But then the Marxist madmen here think it’s OK so long as everyone suffers equally.
I take it you think the French are all madmen because they charge (IIRC) for GP visits?
I think the uneasiness may be the one expressed by Shaw in the preface to “The Doctor’s Dilemmaâ€Â:
Yes, Shaw’s quite staggeringly wrongheaded a lot of the time; the play and the preface both mostly push a downright dangerous campaign against vaccination. But his primary objection is one that still comes up against the US health system, and speaks to Dsquared’s “perverse incentives†thing.
Jar:
The point is that the people who ‘feel’ that marketisation of healthcare is wrong ‘feel’ this way because that they know that markets are at best amoral.
And theres no need to be a git, by the way.
Quix.: heh, yes, just read that back and it was a bit gittish. No need, as you say.
they know that markets are at best [or in essence?] amoral.
Which to me is their great advantage. Actually, I declare myself utterly un-evangelical on the wider “privatize the NHS” issue, which is why I didn’t direct the post at that. I plain don’t know what the best system would be, and I suspect nobody else does either.
BH: It’s not exactly going very well is it?
Not my experience, I’m afraid, as I wrote in the post. And in good empiricist style, better to trust what I’ve seen myself than what I read in the [insert personal journal of hate here].
Apt: An idealist is one who, on noticing that a rose smells better than a cabbage, concludes that it will also make better soup.
OK, on re-reading your post I see that your ‘if’ is of the ‘if wishes were horses’ variety. I must concede that, if you isolate this question from its real-world context, I can’t argue that there is any useful moral difference between a medic employed by one type of organisation and one employed by any other.
To clarify my own point, which you find insufficiently nuanced, I would argue that one who embarks upon a career in healthcare in order to improve the lot of fellow beings is morally superior to one who embarks upon a similar career in order to become wealthy.
But if we are going to go to the effort of imagining a scenario as you describe, why not imagine a well administered and efficient state-run service. Its just as likely.
I don’t.
well fair enough; I’m agnostic on the question myself. But a lot of people do, and there is reasonable if not conclusive evidence to support that belief, and they’re the ones who you need to be convincing because they’re the ones who think that profit is fundamentally incompatible with healthcare. That’s the answer to your question; people like Justin aren’t misguided or reacting emotionally rather than rationally, they just take a different and equally defensible view from your own on an important question about fundamental political principles.
Quix.: I partly addressed some of this right above your 9.24 post. Scroll up one click. You must have been writing when I posting. Anyway…
one who embarks upon a career in healthcare in order to improve the lot of fellow beings is morally superior to one who embarks upon a similar career in order to become wealthy.
Now who’s disappearing his argument into abstract (im)possible worlds? Obviously a decent surgeon fully expects to achieve a bit of both.
imagine a well administered and efficient state-run service
Name one.
DD: …people like Justin aren’t misguided or reacting emotionally…
Actually, when I asked why so many of us instinctively feel I meant “us” in the inclusive sense, i.e. the sense of me, too. I’m not saying anyone’s misguided.
“I’m just saying here that if someone has a cleaner and a nanny and makes his money by owning a company that provides healthcare, then a lot of people are going to question his commitment to an egalitarian society”
Marx himself employed servants thus undermining his “top notch man of the left” credentials as outlined by dsquared. That’s not to mention the hundreds of factory workers I used to employ – and between Karl and I, we invented Communism!
Perhaps you need some more “hard time” at the books comrade dsquared!
There’s nothing incompatible about wishing for an egalitarian society and having a cleaner – if one pays the cleaner fairly for their labour. Ditto the farmer, the bin man, the doctor, the electrician etc. There’s nothing intrinsically special or different about the field of domestic labour, except that it has historically been affordable only by the mega-rich and now isn’t.
“Cash nexus” was Thomas Carlyle, wasn’t it?
Not to dredge up the earlier point, but the discussion about profit skipped too quickly away from what Jarndyce said, which I fear missed the point.
Yes, doctors and nurses don’t have a ‘profit’ position, but the management of health organisations do (some of these being doctors or nurses). True, they don’t make folding-stuff profits, but they will still seek to maximise the value of the production process. They will seek, for example, to maximise security – discouraging anything risky, avoiding long-term commitments. They will seek, too, to increase their prestige and perks – often valued as much as hard cash, remember – and to maximise their superficial results to improve their career prospects.
Because of this, there’s a bit of a fallacy in the comparison of evil-capitalist-for-profit-hospital and sweetness-and-light-NHS-hospital. In truth, they will both be dominated by their own ‘profit’ seeking motives – it’s just that value is extracted by the ‘owners’ typically doesn’t come in pounds or pence. That’s not to say that many NHS managers aren’t good, professional people who combine these goals with a commitment to service. But then we shouldn’t assume all private managers are money-grubbing shysters, either.
Apart from a few crazies on your side and the entire Samizdata commentariat, nobody’s suggesting healthcare be other than universal and free at the point of delivery.
That isn’t the problem. The problem is that most of the, even non-crazy, people on your side misrepresent my side as wanting the poor to die in the streets.
And practically speaking, healthcare is neither universal nor free. That was my point. Good intentions don’t cure cancer.
I said:
Jarndyce:
I, as an individual, don’t pay for my use of the NHS. I pay my taxes, which are thouroughly decoupled from actual use, my condition, age, how organised or canny I am in choosing insurer, etc.
The private experience is certainly better, if you have the money. If you don’t, there’s a huge risk of thinking of your treatment in terms of the trouble you’re going to have to endure to pay for it, whether via debt or higher premiums in the future. And god help you if the insurer decides that you’re not covered, for whatever reason.
I pay my taxes, which are thouroughly decoupled from actual use, my condition, age, how organised or canny I am in choosing insurer, etc.
Exactly as it would be if the government was your (and everyone’s) insurer. As I said before, aside from the crazies, I don’t think anyone’s seriously suggesting cutting us all loose to sort out our own private health insurance.
Katherine,
How do you determine “fairly”? Shoudl the government centrally determine what each job’s fair wage is? If not, isn’t that letting exploitation be (in the instances where the government doesn’t determine the fair wage)?
The problem with private provision is that we risk creating a disease industry instead of a health service.
Private providers will make money by selling us operations and drugs that won’t be necessary, and won’t focus on the preventative aspect of medicine. Instead of telling people to eat healthily and do exercise to prevent illness the private provider has an incentive to just let us live unhealthy lifestyles and become ill so that it can make its money from treating us. As it is there is a general impression that GPs in the pockets of drug companies over-proscribe things like Prozac for people who don’t really need the drug.
Very true, Planeshift, though an overarching insurer (i.e. the government) has the opposite incentive: to keep us as healthy as possible to keep costs down.
[Marx himself employed servants thus undermining his “top notch man of the left†credentials as outlined by dsquared. ]
“I am not a Marxist”
— Karl Marx.
(more seriously, neither Marx nor Engels were interested in living outside history so this factoid is less interesting than it seems)
I think you’ll find “factoid” means something quite different to ‘little fact’ comrade. Look it up on Wikipedia.
*Mutters to self* Honestly, they boast about their book learning but they can’t even string words together properly. It was different in my day – children up chimneys, revolutions in all the European capitals etc etc…
baal_shem_ra, I was merely pointing out that I don’t think it is impossible for someone to have a cleaner and still be a socialist/Marxist/whatever, since there is nothing particularly special about a cleaner. Since I am neither a socialist nor a Marxist, the question doesn’t bother me in the same way.
Katherine,
Ok, never mind then.
Jarndyce,
Looking at my first post, I see I really didn’t answer frmo the angle you were looking for. Pehaps reticence is explained by the fact that healthcare is more open to abuse: the complexity of the information the costumer must deal with and therefore the reliance on the expert who is also providing the product, physicians being in shorter supply than food sources, the huge and sudden costs that can be incurred through healthcare. This makes it easier for someone in a bad spot to really get taken advantage of. Hence introducing the profit motive may seem to open the door to people a lot of that.
This post could not have been written in the U.S. We have predominantly for-profit health care. Let me assure you, it sucks. The entire object of the system is to extract the maximum dollars from sick people (and associated institutions). Hardly anyone working in the system can afford to have a provision of service or public benefit motive. Those luxuries are dead.
Be grateful and fight to improve what you have or we’ll make sure you get ours (which our companies will try to own.)
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> in good empiricist style, better to trust what I’ve seen myself than what I read in the [insert personal journal of hate here].
But no-one says that the problem with the NHS is that all its doctors are shite, so your personal good experiences are a straw man.
So you’re happy with your GP. Great. Let’s say you move house to, say, St Albans. Now, it’s not that far, really, and it’s pretty easy to travel from Hertfordshire to London. More to the point, if you’re willing to put up with the inconvenience, surely that’s your decision (as long as you don’t expect your GP to make home visits). And, having moved, you discover that the local GP in St Albans is bloody awful. The cost to the NHS is identical regardless of which GP you register with. According to the NHS, however, which doctor you see is not your decision; it is dependent on your postcode.
In other words, the fact that your experiences are good while others’ are bad is the problem. It’s a lottery. And, unlike in France or Germany or the US, if you’re one of the losers, you’re not allowed to join the winners. You’re just stuck with it.
> I would argue that one who embarks upon a career in healthcare in order to improve the lot of fellow beings is morally superior to one who embarks upon a similar career in order to become wealthy.
So what? If I’m choosing which surgeon should perform my operation, I’ll choose the one with the best performance, not the superior morals. Sometimes, those two are the same. Sometimes not.
janinsanfran,
Come to the UK, get ill, have some treatment, compare. Then see how grateful you are.
Alternatively, look up survival rates and life expectancies for various diseases in the UK and the US. Compare. Then tell us why we should be grateful.
Total expenditure on healthcare as percentage of national GDP (2003): US 15%: UK 7.7%
Life expectancy at birth: US 77.2 years: UK 78.5 years.
Infant mortality per 1,000 live births: US 7.0: UK 5.3
Source: OECD in Figures 2005: http://213.253.134.29/oecd/pdfs/browseit/0105061E.PDF
In cost-effective terms, Americans are getting a very bad deal on healthcare. But in Britain, we are concerned that average life expectancy is somewhat lower than in most other west European countries and infant mortality somewhat higher – which only goes to show how bad the US figures are compared with outcomes from healthcare in western Europe. But how does Marx/Marxism help to explain the better outcomes in western Europe compared with the US?
In France, I could drop into any GP’s surgery I happened to walk by for advice and prescriptions. I’d have to pay the GP for the advice and the pharmacist for medications but I could recover most of that from the state, occupational and private insurance. Presumably, the GP and the pharmacist are exacting “surplus value”, as is the company providing healthcare insurance. Even so, average life expectancy at birth is longer in France than in Britain and infant mortality is lower. All very puzzling . . ! Seems to me we ought to be focusing on healthcare outcomes and the comparative costs of attaining the outcomes and leave surplus value for the birds. Besides, whatever happened to the Knightian notion of “profits”?
http://www.econlib.org/library/Knight/knRUP.html
For briefs on the various healthcare systems of a select group of affluent countries, try:
http://www.civitas.org.uk/nhs/index.php
duress?proliferated governing subdued trickles .