The Perils of Privatized Healthcare

The Perils of Privatized Healthcare

Dr. Marc regularly answers readers’ questions on matters relating to medicine, healthcare and politics. To send a query, click here.


From all the reading I’ve been doing on healthcare lately it has dawned on me that medicine should not be a business. Education, which is vital to a strong democracy, is not treated as a business (except for those “voucher” people), and healthcare is even more vital. A couple of months ago I was wondering if health insurance was really good for us and tried to discover how much those companies made in net profits–wondering if it would be enough to finance “universal healthcare” as opposed to “health insurance.”

After searching the Internet for two days I discovered that the companies who were publicly traded made gobs of money, but without the profits of all the other health insurance companies which aren’t publicly traded, I really couldn’t reach an informed conclusion.

Today I found a couple of reports that made my eyes cross. Consumers Union and Families USA have put together some shocking numbers. Since you are concerned about Medicare, you may want to read these reports. One telling statistic that I came across showed that the per-case cost of administering healthcare by the government was in the neighborhood of 15 cents, compared with $1.25 for the same work done by health insurance companies. The reports I’m sending you links for tells why. The other concern about the cost of healthcare is prescription drugs, of course. I’m still working on that, but if Canadians can get drugs for 25-50 percent of what Americans are paying, I’m feeling fairly confident that “reform” is greatly needed. Here are a few numbers in the reports:

Total Compensation to CEOs of Health Insurance Companies (2002)
   Norman Payson, M.D., CEO of Oxford Health Plans: $76,010,825
   Leonard Schaeffer, CEO of WellPoint: $21,765,532
   D. Mark Weinberg, executive VP of WellPoint: $14,046,201

The total of the twenty highest-paid executives in 2002 annual compensation, not including stock options: $237,907,917! Add to that the stock options: $1,153,864,691! Yes, that is a billion dollars! Together you are looking at $1.75 billion that went to twenty people in that industry in 2002. I think that answers the question I had about the profitability of health insurance companies.

On the subject of drugs: Public Citizen found that in 2002 the drug industry hired 675 different lobbyists from 138 firms in 2002–nearly seven lobbyists for each US senator. The industry spent a record $91.4 million on lobbying activities in 2002, an 11.6 percent increase from 2001.

For the Health Insurance reports go to:

My question: Why don’t we eliminate the insurance part of healthcare?

Corona, CA

Dear Teddi,

This is so informed that all I can say is RIGHT ON! I will publish your letter without a qualification from me except to say that my concerns are the same as yours, and my frequent points about the perils of privatized healthcare are complementary to your analysis.

Would you be so kind as to share your observations regarding any possible psychiatric problems that could result from overuse of the Internet and other forms of electronic telecommunication?

Auckland, New Zealand

Dear Evelyn,

The word that comes to mind for overusers of the Internet is “depersonalization.” The medium provides a great way of reaching out across oceans and across conceptual barriers, but, as with all two-dimensional mediums, it can be abused, with the risk of a loss of a sense of what’s real. Emotions may become fractured, or anesthetized.

I am a federal employee with numerous work-related afflictions that are mostly physical in nature. My problem is that my insurer requires considerable paperwork to document the necessity of my treatments, and most physicians I’ve encountered are not good technical medical writers. Since most MDs also don’t like to spend much time with worker’s comp claims, and in particular federal claims, it becomes very difficult to get help with written claims, which I need for reimbursements. How can I help my doctor?

Port Orchard, WA

Dear Jeffrey,

Like any branch of medicine, you will do best with a specialist or doctor who tends to focus in the area you are concerned about. One of the problems with the work-related injury field is that not all physicians are experts in this sort of medicine. I suggest finding a physiatrist, or specialist in rehabilitation medicine, who makes these kinds of evaluations–and has to write them up regularly–on a daily basis.

Why do the majority of doctors, insurers and politicians ignore the issue of disease prevention and physical fitness? Like many things in our society, healthcare seems to focus on repairing the damage done. We have no focus on exercise, diet and other beneficial factors, such as relaxation. In the 1960s the Kennedy Administration started a national fitness program for elementary school children. This seems to have disappeared. President Bush seems to relish exercise and fitness, but he makes no attempt to pass it on to the plebes. Couldn’t we save many billions simply by cutting down on obesity?

Denver, CO

Dear Tom,

No question that our society would do well to stress regular exercise far more than it currently does. The Atkins diet is for couch potatoes. Exercise and water are a lot less expensive than medicines and coffee. Our use-em-up philosophy works against us, as we use ourselves up and then seek replacement parts. And there are even numerous little things that most Americans can do without any radical changes in their lives–walking up stairs rather than taking an escalator, for instance. Or walking a few blocks for that pint of skim milk, rather than driving. You don’t need to join a gym to derive the benefits of simple exercise.

I’m an honorably discharged veteran who uses the VA as my primary healthcare provider. About two years ago I underwent radiation and chemotherapy treatment for sqamous-cell carcinoma for a tumor in my mouth at the Dallas VA. Since the treatment, I’ve been going through depression, which I’ve been told is not abnormal, considering the treatment. I’m scheduled to see a psychologist (I think that’s what he is) in regard to my mental health. Is there any way the Bush Administration can “play” with the entitlements I was promised upon discharge? Bush seems to be cutting military benefits every chance he gets, and after what he did to our combat troops in Iraq, concerning a cut in combat pay, I’m beginning to wonder.

Ft. Worth, TX

Dear Rick,

Thanks for your refreshing perspective and honesty. And I wish you well in terms of your healthcare. As far as I know, VA benefits have not yet been touched, and in the current political climate, I doubt anyone would take such a chance–though you never know what can be done either to manipulate the media or to slide under its radar.

Can you advise me as to the best health insurance to get if I am self-employed, or direct me to a reliable source for this information? I remember that a few years back, the MacArthur Foundation awarded one of their “genius” grants to a woman studying the issue of insurance for the self-employed, and/or organizing group packages for freelancers.

Palm Springs, CA

Dear Pam,

I see that you live in California, so I will be chastised by some of my readers if I fail to point out that many of the Western HMOs are not-for-profit, and are motive-distinguishable from the for-profit HMOs—the anti-Robin Hoods of healthcare. That said, I really can’t recommend one particular insurance over another, though I do believe that if you have a physician whom you trust, his or her office manager would probably have that information for your area. And that MacArthur grantee you’re referring to was Sarah Horowitz, founder of a group called Working Today, which can be found at

I just read the letter from your reader who caught tinea versicolor. My experience with travel in warm and/or tropical climates taught me how to deal with another skin fungus: heat rash. The secret is, don’t use soap on one’s body. Soap leaves a residue that creates an environment for fungus growth under hot and humid conditions. The letter writer lives in Maryland, a place that’s hot and humid in summer. He might be using regular soap on the body when he bathes. In that climate, it would be safer to use a mild detergent like phisoderm, which washes off completely and does not leave residue.

Austin, TX

Dear Jo,

Thanks! I think your advice is sound, though the rash one may develop from soap residual is often allergic in nature rather than fungal.

I’m the new parent of a 2-month-old boy, and soon it’ll be time to decide on vaccinations. Until I started researching the issue, I thought everyone agreed that it was best to give shots to infants. But it seems that some possibly credible folks have serious reservations about doing so, stating that numerous shots aren’t needed and/or could be harmful to children. Should I get vaccinations for my child, and if so, which ones and when?

Wooster, MA

Dear Zoe,

It’s a complex issue, because much of the purpose of the childhood vaccines is to help stamp out a serious disease across society, which doesn’t necessarily mean that your child will contract a given disease if not vaccinated. Many of the childhood diseases are rarer these days than they used to be. However, when the National Health Service stopped giving the measles vaccine in Britain for a period of months in a trial of new policy, the incidence of the disease increased, and they went back to regular vaccinations.

Overall, I am in favor of all the recommended vaccines for infants and feel that they are safe. There is always room for further study, but at this point, the good seems to me to far outweigh the potential harm. (On a side note, I do not believe these vaccines should include serum made from bovine products in Europe.)

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