Should health care be profitable?

In the USA, health care results in massive profits.

Should it?

According to this Washington Post article, health care in the USA is “very much something people make money out of. There isn’t too much embarrassment about that [in the USA] compared to Europe and elsewhere.”

Profits have enabled us to look past the embarrassment of benefitting from others’ suffering.

This attitude pervades not only the health care establishment, but the military-industrial complex… but today let’s focus on the world of health care.

Non-Profit and For-Profit can coexist peacefully

I want income for health care companies. I want enough to make sure they are there when me and my loved ones need them. Every company, whether a non-profit or profit, needs income. And the people providing the extremely worthwhile service of healing people, and easing people’s pain, should be paid well.

And maybe some health care companies should have some profits. Look at the world of higher education: there are profit and non-profit institutions. Putting aside the questionableness of profit-based colleges (some of which are owned by the Washington Post!), they are legal and they serve… some kind of role.

So let’s say we allow for-profit health care providers, just like we allow for-profit educational institutions.


That means they will be profitable. But the ability to screw people over is so… there. Especially when we consider our existing for-profit health care system.

Profitable… but obscenely profitable?

A fantastic recent Time article by Steven Brill mentions how, on the bill of sale from a hospital stay, a single Tylenol pill cost $1.50… even though we can buy 100 of them for $1.49 on

And the Washington Post article showed an MRI costs about 4X more in the US than in France.

Why are hospitals charging so much?

Well, think about what you do for a living.

What if your customers did not know how much they should expect to pay? And what if you got paid the majority of the time, no matter what you charged? And say you did not need to even tell people how much your product costs until after the person has already purchased the product?

America’s Stockholm Syndrome to health care costs

One of the first phrases you learn as a tourist traveling in a non-English-speaking country is, “How much does that cost?”

Italian: Quonto costa?

Arabic: beh-KEM-deh?

German: Wieviel kostet das?

When you ask this question in the native language of a country, you will get a smile from the local salesperson. You have taken the time to learn a little bit of the local language, after all.

But say the same question – in English! – after you step inside a hospital in the USA, and prepare for gnashing of teeth.

The sentence “how much will that cost?” is unheard of in US hospitals.

I asked it recently when, after getting pretty routine blood work done, was told I should get an ultrasound, too.

An ultrasound… for symptoms that sure just seemed like a nasty cold or flu? I was confused, and with my high-deductible health care plan (maybe $2500 deductible over a year?), I didn’t really feel like paying loads of cash for something whose root cause could probably be unveiled by lower-tech methods… especially since I knew not all the possible blood tests had been run yet.

So as I stood in the hospital, still sleepy, early on a Saturday morning, I asked the question I’ve asked on three different continents to shopkeepers (always with positive results): “How much does this cost?”

The looks I got from the administrative assistants in the radiology department were a mix of:

  • shock (“Who asks that? Seriously??”)
  • fear (“Wait… can he pay? Will he just leave without paying??”)
  • disbelief (“Why in the world would he want to know the price? The doctor wants this test for him, why would he care what it costs? You need to get this done!”)

If the question “How much does this cost?” is not applicable to an entire industry, I give a HUGE tip of my hat to the marketers behind that industry: they have somehow made taboo the mere IDEA of ASKING to see a price list! To merely ask the most basic of questions of my captors is not culturally allowed.

Even though I can afford anything in a McDonald’s, I still like knowing how much the cheeseburger is compared to the chicken sandwich.

But in addition to getting my kudos, an industry that gets out of that question needs to be treated differently than other industries.

Health care: A unique industry

Health care is unlike any other industry. So we should be dealing with it differently, especially if our country is paying much more than other countries for the same service.

How much more? That’s a problem right there – hospitals don’t know. The ladies behind the counter that Saturday morning, after staring at me trying to parse my foreign question, and quickly paging through a thick 3-ring binder in a cupboard, said they truly do not know. And had no way for me to find out until Monday.

So before we can determine what’s a good price and what’s not, we better see and compare what everybody is charging.

The Affordable Care Act – known as Obamacare to both haters and supporters alike (what better way to steal your adversary’s thunder than to embrace the denigrating word they call you – classic grade school trickery use on both sides!) – has a provision in section 2718(e):

Each hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital


After a quick call to my senator’s office (on a Friday afternoon, no less!), I was informed that the format for these reports are not determined yet, nor are the reports’ specifics yet scheduled to be discussed by the oversight committee. Also, this ACA provision doesn’t kick in until 2014.

But thankfully, by 2014, we will at least have a little more transparency on how much different hospitals are charging.

I am going to do my best to have some influence over what goes into these reports.

I want the output to come out as nicely-formatted tabular data that I can easily process in a spreadsheet or a user-friendly website. Think of the nice websites that could pop up to help us understand how much different items cost, comparing one hospital to another… we deserve this comparison shopping opportunity in the health care world. And it will make more jobs!

I also want hospitals to have to report down to the smallest items, things like how much a single Tylenol costs, or an alcohol wipe. Too much detail? No. This is reasonable because, well, after decades of not asking how much these things cost, we have arrived at an industry that is charging us 100X markup.

And since health care is different than every other industry, I argue huge markup is not just personally unacceptable, but should be criminal. The government sets limits on how much loan companies – even the shady payday loan companies – can charge. Why don’t we limit the markup on incredibly important, essential health care related items?

A restaurant marks up liquor by a lot – I can buy a reasonably delicious bottle of wine for $10, but a single glass will often cost $9 at a restaurant. But this is a luxury that is easy to turn down.

Can I turn down that ultrasound? Not necessarily… but at least tell me how much it will cost!

When everything costs the same, everything is worth the same

What if health insurance’s pricing model applied to other things we buy, such as… food?

My cousin Adam Emter made a great comparison:

Just think if other aspects of our lives were paid for by some other entity, requiring very little outlay from us. My employer starts purchasing all of my family’s food, and only requires a $20/month co-pay. You think I’m going to still clip coupons, shop for good deals, buy items based on the nutritional and economical value, or control my calorie intake? Hell no – I’m eating steak 5 nights a week…

It’s no wonder that pricing has gone out of whack – we feel it when the price of milk, or the price of gas, goes up. The vast majority of us never directly feel when health care prices go up.

The health care industry is addicted to its own personal all-you-can-eat buffet of money, provided to them by health insurance companies (which, interestingly enough, don’t have too much markup).

When a person (and corporations are people, right, Supreme Court?) is caught abusing a substance, and his friends want to help him straighten out his life, friends need to know everything about his life, so they can see where to make adjustments to this person’s life decisions to help him back onto the road to well-being. The health care industry is that friend who needs an intervention, and ACA section 2718(e) is hopefully the tool that lets us see all his income and expenses to see how in the world he got so much money to begin with.

Ask “How much?” next time you’re at the clinic

We need to start educating ourselves on how overpriced our health care is. Let’s stop allowing a hospital to charge us $1.50 for a single pill that costs less than $0.02.

And let’s start that process by asking how much things cost.

By asking, we make the health care employees realize that at least one patient seems to care what these things cost… and this person wants to know *before* it’s done.

By asking, we make health care employees think about it a little more, and therefore the price may stick in their head a little more.

Ask how much. It’s a step we can all do.