In the for-profit health care industry there is constant pressure to deny healthcare to maximize profits for the shareholders and CEO's, however, there is a price society is paying for these huge profits of the for profit healthcare system. As the industry racks in billions of dollars to maximize profits for its CEO's and shareholders on Wall Street, consequently, millions are going without health care, thousands are losing their health care everyday, not to mention the hundreds of thousands that go bankrupt, lose their homes, their livelihoods and ultimately, their will to go on.
James Gwartney in his book entitled, Microeconomics, talks about a concept called externalities, which are the costs of the spillover effects of a corporation that influences the well-being of non consenting third parties (p.111). Ultimately, you can have either external cost or external benefits.
Obviously in the case of the for profit health care system it would be the spillover cost to our society that reduces the well-being of the citizens in this country. When an activity such as this imposes external cost on our society the result will be beyond the economically-efficient level. Indeed, the cost of the for-profit health care system far exceeds the value that is provided to consumers and is not economically efficient.
Where are the millions if not billions that we pay in premiums going? According to Joel Bakan in his book entitled, The Corporation, after a court settlement in 1916 (Dodge v. Ford) it is the law of the land that it is the CEO's legal duty to put shareholdersí interest above all others and they have no legal authority to serve any other interest - corporate social responsibility is thus illegalóat least when it is genuine (p.36). Sadly, it is all about profits, not economic efficiency, or the morally right thing to do. Again, where do our premiums go?
According to Richard Greenwald in his film entitled, Angela BralyCEO/WellPont, WellPointís CEO Angela Bralyís salary is 9.8 million.
WellPoint alone spends $10 million a year in lobbying fees, which relates to $10 million in fees charged in premiums to members and patients. In 2009, WellPoint has spent 752 family's yearly premiums on lobbying. The average payment to WellPoint lobbyist would cover 49 individual yearly premiums. Certainly, I could go on and on. CIGNA, United Health Care, Anthem, etc, are no exception, however, I believe, I have made my point.
Ultimately, you have a for-profit health insurance monopoly which has externalities that are reducing the well-being of society and the citizens in it. No doubt the millions or even billions that is spent on health care (CEO's, lobbyist, shareholders, etc, etc, etc) well exceed the value of health care that is provided. According to Maggie Fox the health and science editor for Reuters as of the latest reportAmericans spend twice as much as residents of other developed countries on healthcare, but get lower quality, less efficiency and have the least equitable system.
