Humana Inc., a company with $2.3 billion in annual revenues and more than 17,000 hospital beds, has made a major commitment to artificial heart implants, underwriting more than 100 such operations over the next several years. Humana officials acknowledge that the artificial heart program offers them a "priceless public relations opportunity."
What Humana has done, in a move destined for the public relations textbooks, is to divert public debate away from the real issues involved with for-profit medicine. Humana has shown that, when a for-profit hospital chooses to, it can provide high- quality care, invest in medical research and even subsidize medical care. Those capabilities were never in question. The real question is, how deep does the investor- owned corporation's commitment run when there's no public relations value in fulfilling a need, whether it's medical research, education or care for the poor?
A remarkable feature of the growth of the for-profit companies -- they now own nearly 10 percent of the nation's hospital beds -- is the underlying assumption that free enterprise and the profit motive are natural partners of good medical care. It implies that as a society we are ready to regard our hospitals as just another business.
However, as long as such issues as care for the poor, access, quality and cost of care are important to the American public, the balance between profit and community need must be constantly weighed. These issues should take on special significance in Washington, where George Washington University is considering the sale of its teaching hospital to American Medical International, a $1.3 billion Los-Angeles-based company with 14,000 hospital beds, or other for-profit hospital chains.
Millions of charitable dollars are spent each year by not-for-profit hospitals in caring for the indigent, the low-income elderly, the uninsured, the underinsured and the chronically ill -- care that is obviously not profitable. Because for-profit hospitals do not provide care that does not pay, care for the poor is shifted almost entirely onto the shoulders of neighboring community hospitals.
Both the states of Florida and North Carolina have collected comparative data on the delivery of indigent care. Florida, where for-profit hospitals now make up nearly 50 percent of hospitals, found that for-profit hospitals account for only 4.2 percent of the state's care for the poor. North Carolina, too, found reduced care to the poor in for- profit takeovers of public hospitals. Both states have enacted legislation designed to require the for-profits to bear a more equitable share of the burden of indigent care. The for-profit hospital industry claims that increased efficiency is the reason for its profitability. Detractors point to higher prices, hospitals' locations in well-to-do areas, their transferring or turning away of patients who cannot pay.
Existing studies -- such as those by Lewin and Associates, the California study supported by the Department of Health and Human Services and the report from the Florida Cost Containment Board -- demonstrate that for-profit hospitals charge more for services and use more tests and ancillary services per patient than not-for-profit hospitals. When a for-profit chain took over the Duke psychiatric hospital, prices reportedly rose 300 percent (in a hospital already operating in the black).
One has to wonder what the role of teaching and research would be in the for-profit environment. Most medical research has little public relations value and does not make money. Years and vast amounts of money were spent on development of the medical care and technology basic to sophisticated cardiac surgery. What Humana bought with its multimillion-dollar investment was the glamorous part, piggybacked on the efforts of the not-for-profit sector. Humana was neither equipped to engage in the multidisciplined research nor was it willing to fund the expensive, and unprofitable, years of medical trials that allowed the University of Utah and other major not-for-profit medical centers to bring about the artificial heart implant.
The not-for-profit ethic has tapped the finest instincts in us -- of charity, philanthropy and community self-help. It has sustained teaching and research; it has produced the finest medical care in the world. Are we now prepared to leave the training of the next generation of physicians, future technological developments and basic biomedical research to the largess of boards of directors of multibillion-dollar corporations answerable to public stockholders whose interest in the end is profit?
The reason for raisinthese points is not to detract from the wonder of the artificial heart or from the wonder of Humana's well-managed and spectacular growth over the past several years. The reason is to question publicly whether the growth of the for-profit hospital industry is a positive thing for us and our communities and to ask what effect it is having on the delivery, quality and access to medical care across the country. Is what's good for Wall Street necessarily good for Main Street too?