Letter to the Editor of the New York Times

A Second Opinion: Health Care and Profits

By Howard J. Berman and Bruce McPherson, Submitted on January 22, 2013

In a January 8, 2013 Opinion, Eduardo Porter comments on health care and profits.

Without sound reasoning grounded in facts, he makes two points. First, the pursuit of profits distorts, from a patient and societal perspective, the quality and perhaps even the effectiveness of health care delivery. In this conclusion he is at least partially right, as virtually all of the research shows that nonprofit health care providers and health plans on an aggregate basis have out- performed their for-profit counterparts in terms of special services for their communities, quality, service and in some instances even efficiency.

He fails to acknowledge or realize, however, that nonprofit should not be confused with no profit. While nonprofit health care providers and health plans are driven by the need to maximize their community benefit, not profit, they still must generate at least some level of profits. Profits are needed not to line someone's pockets, but to replace buildings and equipment, acquire advancing technology and address growing community needs. Profits are not the villain. Rather, it is how profits are pursued and used that can distort performance. Porter does not seem to appreciate this distinction.

His second point is that government would be a better alternative than the private sector, either the nonprofit or for-profit variety, for meeting the nation’s health care or other social needs. He simply posits this as an opinion, not buttressed by evidence.

Certainly, experience has taught us that government has a role and that the reach of the private sector is not unlimited. The same experience has also demonstrated the power of public/private sector pluralism.

Recognizing where we are in the implementation of the Affordable Care Act, (ACA) these lessons must be remembered and built upon. Now is not the time to try to pick sides or argue about who is best. Time and energy would be better spent in reenergizing constructive pluralism, the kind that made access to hospital care a reality in the 1950s, Medicare and Medicaid an operational realities in the 1960s , and some real HMO successes in the 1970s. ACA provides the opportunity for reengineering public/prive partnerships, through patient-centered medical homes, accountable care organization arrangements, joint efforts to reduce health care-acquired infections and other medical errors, and other collaboratives.

That is the right path for America.

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Howard Berman is Board Chairman of the Alliance for Advancing Nonprofit Health Care and a Retired President and CEO of The Lifetime Healthcare Cos., based in Rochester, NY.

Bruce McPherson is President and CEO of the Alliance, based in Washington, DC.