Swedish Hospital and what it tells us about the state of medicine

As a cancer survivor the issue of health care is one very dear to my heart. This is in part a selfish motivation of wanting to have the freedom that a universal system would provide to me, and partly an outgrowth of my liberal bias filtered through a direct and personal experience with the health care system.

Recently one of the major hospitals in Seattle, Swedish Hospital ended a contract with an insurer that will affect about 14,000 families in the area. The reason for this was for a variety of reasons the primary one was that the insurance company United Health care didn't want to increase its payments to the level that Swedish administration demanded. I think that while this development doesn't necessarily spell doom it does illustrate several problems with a privately founded system.

The largest problem is the way in which profit is viewed. Not making a profit isn’t a bad thing. Ok, I know that makes me sound like a Communist, but covering cost means every one gets paid, and your business operates well. The value of the company and the stocks don’t necessarily drop. You maintain. It’s all good. Also increase in staffing and technology, are kept as costs, profit normally vanishes from the company in the form of extra payment to investors, or owners, rather then manifesting as new capital, or a reserve. Investors and owners also have the expectation of the unlimited growth of profit. This drive to increase profit means that costs will inflate every year above the rates of normal inflation. In some respect this increase in costs is a direct response to increasing costs, implementation of new technology and techniques, and the hiring of new staff. But as the Swedish case illustrates, often it’s a move to increase the profit margin.

A second problem illustrated by the Swedish case is that in a private system, the government has to step in to pay for the nation’s underclass. This isn’t the lower class but it’s the old, and the extremely poor. In recent years (Yay, Bush!), the government has cut back on Medicare, and Medicaid payments, which is a huge source of funding for a large urban hospital like Swedish, as a result profit margins have shrunk (see earlier paragraph). Now this isn’t a big deal in my book as they are still making money, but think of hospitals that aren’t able to make a profit. The pendulum swing of government money determines the level of services. In a socialized system this still exists, however, in such a system healthcares stats as a public good relegates the swing of public fund to a minimum. The reason for this is that healthcare being a good of primary importance, to you know life, means that the demand for quality will balance out the drive to cut spending because we live in a representative democracy. In other wards politicians are sort of the corporation for selling us public goods, and if those goods go bad, we should vote the bums out of office. Unfortunately, we still haven’t figured that out here. But that’s largely due to a drive over the past 30 or so years to diminish greatly the amount of public good provided to the people.

A final and third problem illustrated in this particular example is a general shift away from “bulk” business in medical care. This sounds good, like we all get better more personalized service, but in the case of hospitals it really just means less people get served. I guess I should be happy cause my level of care is going up. However, the image of little kids with pale skin, yellowed and texture of old parchment sitting in a wheel chair in the hospital, too sick to play. Sitting there waiting while a social worker meets with their uninsured parents to figure out how the family will pay for, hopefully, their child’s life without going bankrupt. Even worse, a life of perpetual dept now that bankruptcy is harder to go into, especially as a result of medical care, then in the past. Thanks big business. This image and my own experience spending a large part of my teens in hospitals has given me the impression that health care is a right. But then you know there is that whole universal declaration of human rights that we signed on to.

Article 25.
(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
Ah… good old article 25 section 1. and I know its not constitutional amendment but consider how something like this would play into US Constitution Amendment 9. Also consider that the clinic and medicine as we know hadn’t been created yet. I think you see where I am going. Even congress has recognized the right to care, passing laws which make it illegal for hospitals to deny care. Thus, I think it fair to say that healthcare is a right, and that even the chilling effect that our country creates with our system is unconstitutional.


From Puget Sound Business Journal
"Swedish's ratio of operating income to revenue is much smaller than it wants. "Our operating margin now is less than 2 percent," Veilleux said, "and 2 percent is not sustainable for the long-term. We need 3 to 5 percent."

Leo Greenawalt, president of the Washington State Hospital Association, noted that a number of years ago hospitals signed a lot of "disadvantageous" contracts with health insurers, accepting payment terms close to the cost of caring for patients, thinking that they " just needed to have the business for the volume."

Now, hospitals are "doing everything they can to get out of those contracts," Greenawalt said, because they need more revenue from private insurers to make up for low payments from Medicare and Medicaid.

With "the government paying worse and worse," he said, hospitals are "struggling with survival."