Can health care and capitalism coexist?

Recent news of a hedge fund manager purchasing a small pharmaceutical firm and raising the cost of a medication 5,000 percent thrust the rising cost of health care back into the headlines—for a few days. The medication in question was developed in the 1950s and has served the world well for the more than 60 years it has been on the market. The CEO’s justification for raising the price so outrageously? The profits will be used to develop new and better drugs.

What is this 30-something former hedge-fund manager’s motivation? I find it difficult to believe that it is altruism. Given his background, I suggest it is, as Pope Francis calls it—“the dung of unfettered capitalism,” otherwise known as profit.

Pogonici/iStock

Until recently, one of the few sectors doing well in the current economic environment was the pharmaceutical industry, and stocks leading the pack have been, by far in that sector, the small companies. This is because, as in many other sectors and has been the case for decades in the United States, it is the small companies that innovate.

People like this former hedge fund manager turned CEO purchase these small companies speculating that large pharmaceutical companies will purchase them at an obscene price in hopes that one of the drugs in the smaller company’s pipeline will be the next multibillion dollar seller. When this inexperienced CEO raised the price on a newly acquired drug so dramatically, however, stock prices of most pharmaceutical companies tanked. Why, you ask. The answer is simple—fear of regulation.

Since passage of the Affordable Care Act (ACA), the cost of pharmaceuticals in many cases—if not most—has risen more than 100 percent. These are commonly used, effective drugs that have served—and will continue to serve—humanity well. Examine stock market trends and you’ll find that on any day there is some affirmation that the ACA will remain in place—Supreme Court rulings and the like—stock prices across the health care sector jump. Why, you ask. Again, the answer is simple—profits. Investors know that events that affirm the ACA prompt the U.S. government to throw more unregulated cash at a health care system that ranks 37th in the world—based on outcomes—at a cost dwarfing its closest competitor.

There is, without a doubt, need for innovation in health care, but innovation should not be solely for innovation’s sake and increasing profits. Why do we need new and improved drugs if an existing product works well? When there is need for innovation, it needs to be incentivized. Expectation of profits is one way to do that. However, in other sectors, innovation funded by capital markets results from expectation that a product will stand on its own in being adopted and creating profits. You don’t see Elon Musk, founder of Tesla, buying a small car company for the purpose of raising prices to fund development of electric-powered cars. Why, you ask. Another simple answer: These sectors can’t count on unfettered capital being bestowed upon them by the government.

We can no longer allow capitalism to run roughshod over our health care system. The result, predicted by many moderate economists, will be bankruptcy of our nation. Along about now, you may be asking yourself, “Who is this guy making these claims?”

I am a capitalist and an entrepreneur. I am the former CEO of a high-tech company telling you that innovation can still occur the old-fashioned way. I created jobs. I founded a successful—and profitable—health-care IT company that positively impacts patient outcomes. We built our company the old-fashioned way, through hard work. We did not raise capital, thereby becoming beholden to investor whims and quarterly-earnings expectations. Yes, it still can be done. The American Dream is still alive. And that dream does not—and should not—have to come on the backs of the American taxpayer.

I could share my thoughts on finding a solution to what is truly a crisis, a crisis below the radar of the average citizen, but that has never been the purpose of this blog. I want to hear from you.

What are your thoughts? How can the United States, leveraging a capitalist system that has made it the most innovative country on the planet, but which also may contain the seeds of its demise, repair its broken health care system?

For Reflections on Nursing Leadership (RNL), published by the Honor Society of Nursing, Sigma Theta Tau International. Comments are moderated. Those that promote products or services will not be posted.

The Affordable Care Act and beyond

In today’s frenetic Information Age, the speed at which society is inundated with data leaves little time, or even inclination, to question operational definitions of terms at the center of the most significant social issues of our time—whether on Wall Street, where bankers use “credit default swaps” to bet against clients with their own money, or in health care, which, by definition, is the antithesis of what is provided to the American public. Many economists have stated that the current system is unsustainable. It’s time we get real about health care, before the current system bankrupts the economy of the United States.

We all perform preventive maintenance on things we acquire. From our homes to our cars to our children’s bicycles, all the things that “make life good” require preventive maintenance to perform their functions longer, thereby making life good for a longer period of time. The same is true of the human body.

It's not on my policy!
When was the last time you sent a bill for your oil change to your auto-insurance carrier? My guess is never. If you did, I’m confident your claim would be denied. Does that keep you from changing the oil in your automobile? I assume not. Factors that play into one’s decision to do preventive maintenance on a motor vehicle, which is nearly a necessity in most families’ lives, are that the cost is transparent and within reach of the consumer. I respectfully suggest that the same factors apply to health care. Until there is cost transparency and the most basic services—including an annual physical—are within the ability of 95 percent of the people in America to pay for out of pocket, our system for treating illness will remain on a collision course with collapse.

Nurses need to light the way! 

Photo credit: scyther5/iStock/Thinkstock

There is no doubt that the Affordable Care Act (ACA) has placed more Americans on an insurance plan and appears to be slowing the rate of cost growth, but is anyone receiving more health care? When I reviewed many of the health care exchanges, I found that, for the premiums to be within reach of the average American family, the deductible is so high as to discourage participants from seeking preventive care. (It is true that many of the plans do include an annual physical.) However, I have been unable to locate evidence—perhaps it’s not available yet—that indicates utilization of preventive health care services has increased following implementation of the ACA. I suggest we will not see that benefit in the near future, because the system that we are trying to move away from has not promoted preventive maintenance. It is imperative, therefore, that we, as nurses, promote and model wellness as part of our overall efforts to drive health care reform.

Health care reimbursement reform is not health care reform, regardless if that is how it was positioned. Although the ACA is well intended, without true care-delivery reform with an emphasis on prevention and a system that supports such a model, the ability of the United States, the economic powerhouse of the world, to deliver care on par with nations that have far fewer resources, will remain out of reach. As a nurse, I believe all Americans should have access to basic health care, that it should be as much within their means as oil changes are for their cars. I also believe that this right to health care comes with responsibilities.

Needed: Men and women of the lamp
Our responsibilities as nurses are clear. We must continue to advocate for migration away from the unsustainable system of the past to true health care reform that results in holistic health care, not just treatment of illness. Furthermore, we have the responsibility to educate the public that their right to health care comes with responsibilities and that they must be active participants in their own wellness and health.

The Affordable Care Act set the country’s system of disease treatment on the road to change. We have taken just the first steps on that road. Where that road leads is yet to be illuminated. To assure the health and wellness of our fellow citizens, a holistic approach must be taken. Who better than nurses to advocate for such a holistic approach?

To effect changes needed—delivery, financing, and legal—to stop treating disease and start providing for wellness, nurses must remain knowledgeable about the latest practice and policy evidence and be present everywhere, from the halls of academia to the front lines where care-delivery models are improved to board rooms where resource decisions about care delivery are made to legislative halls where regulatory laws are enacted. We were handed the lamp, and it is our duty to continue lighting the road, because the journey is far from over.

For Reflections on Nursing Leadership (RNL), published by the Honor Society of Nursing, Sigma Theta Tau International. Comments are moderated. Those that promote products or services will not be posted.