Healthcare: Profit or people

Why is it that America, the world’s most powerful country, with all its immense financial resources, academic and technological prowess and human skills, has consistently failed to provide full health care cover to all its people? Why is it that, as yet, it has the single largest affliction of and damage from COVID-19? These questions assume special relevance not only because some advanced industrialised countries such as the Scandinavian states, but also poorer countries like Cuba have done a much better job in the health sector for their peoples and have also not suffered as remotely as much as America has from the virus. I seek the readers indulgence in offering a perspective that may seem old fashioned for our times.

Through most of history there was always a fundamental difference between callings that relied on learning and business. The purpose of the latter was profit. This was entirely legitimate and an entire eco-system of values and practices developed around commercial activities in practically all cultures. In the modern age this became undergirded with elaborate laws and rules so that business could be carried out smoothly and disputes could be formally resolved regarding contracts and associated matters through different forms of judicial processes.

The purpose of the calling relating to healing people was gaining knowledge and the service of humanity. Its aim was not profit though society and the political systems were expected to make sure that those who undertook such activity were well taken care of to lead a comfortable life. What is sure is that such people enjoyed high social status even though may not have possessed power and great wealth. This can be seen in many world cultures and through history.

In the modern age, callings relating to human health and also such as education and law became organised in Western countries as professions. Those who wanted to pursue careers in these areas where required to undergo rigorous study and training lasting for many years so that they acquired skills which were then certified through examining bodies. These professions were categorised as the ‘learned professions’. The distinction between the learned professions and business was fundamental. These professions followed strict codes of conduct decided among themselves and thereafter backed by law. One significant difference between them and business was that the professionals could not work for commissions but for a fee. Thus, while some practitioners could charge large fees and some did so they could not undertake work on the basis of, for example, profit sharing.

To return our focus exclusively to the health sector and to turn to its institutional aspects. These were not meant for making profits. Hence, they were generally run by governments or non-profit organisations; hence, not for profit. This is seen in some advanced countries still where the main part of the health care sector is in the hands of the state both in terms of hospitals and the staff.

The third aspect of the health care system is the manufacture of health care products, equipment and therapeutics and preventives. These were generally in private hands. In time pharmaceuticals became a big global industry. Advanced countries sought to stringently regulate it.

To sum up: the situation was that while the pharmaceutical industry worked for profit, health care institutions and medical professionals for a long time did not. This model began to be given up in America with business being allowed entry into owning and managing hospitals and associated health care infrastructure. So, what is the situation in the world’s most important country whose example is unfortunately and increasingly being followed in many countries.

While American doctors are highly qualified and professional in their conduct other aspects of the health care system like hospitals are often being run as businesses. This is inherently contradictory. It cannot but put pressure on the doctors for their professionalism and the objects of profit making of hospitals run on business models are not based on the same principles. And if this is combined with interests of the pharmaceutical companies to move their products then entire health care system moves away from the concept of welfare into the world of business. This is what has happened in America.

To keep the risks low, as in other business areas, insurance companies move in and all individuals are then supposed to get medical insurance for covering their potential health needs. This raises costs which is further raised by the courts ordering large financial compensations for medical or insurance malpractice.

Taking all this into account the question arises about why America is shy from getting the state involved fully in the health sector. The answer is that is unconsidered as contrary to the spirit of free enterprise which is one of the foundational principles of the American system. The upshot of all this is that large sections of the American people are unable to access the health care system. Successive American leaders have tried to address this problem but all have failed.

The COVID-19 crisis has brought the contradictions in American health care. There are numerous reasons for this but one is that a health care system essentially run as a business cannot be prepared to handle emergencies even with state intervention. Countries whose health care systems are getting influenced by the American model, reducing the involvement of the state, are going on the wrong path.