Well-run, profitable businesses, along with our sense of decency, democratic institutions, education and free enterprise systems, and adherence to the rule of law, have made the United States the most extraordinary nation in recorded history. Together they have unleashed the talents, creativity and productivity of our people, generated enormous sums of capital, and created unheard of social, economic, scientific and political advances.
Is there anything nobler than providing the environment and opportunity for people to fulfill their potential and achieve their dreams, and for providing the goods and services that enable people to raise their standard of living? Not even the practice of medicine can do so much good for so many people. But that’s precisely what businesses do. (That also may explain why far more Americans today are interested in job creation than restructuring healthcare.)
In our system, an individual has an idea, attracts capital, and hires people to build a product or provide a service. When they meet a need, they prosper – and attract more capital and hire more people. Everybody wins. If they fail, they alone suffer the consequences. That’s what capitalism is all about and that’s what has made America great.
Sure, there are ups and downs. Some caused by business cycles, some by global competition, some by excesses on the part of companies and individuals. Unfettered competition can be terribly harmful and that’s where government comes in. Government must ensure there is a level playing field so businesses and individuals have equal opportunity and can compete fairly. Additionally, government should protect against harmful excesses, and apply monetary and fiscal policies to moderate the ups and downs.
The last thing we should do, however, is abandon the very values and forces that have made America great. We should improve not destroy them, so let’s stop bashing businesses and profits.
For example, many think it crass and wrong for insurers, pharma or other healthcare vendors to earn a profit — so they want to get rid of profits. But where will capital to support these activities and innovation come from if investors (who include Wall Street and Main Street investors alike) can’t earn a return on their capital? From the government? Hardly. The government today doesn’t have reserves to fund the $37± trillion in future Medicare liabilities or our massive deficits. Our children and grandchildren will have to meet them. And how much in additional liabilities can our economy carry before our cost to borrow capital becomes prohibitive and we default on our debt? At least the insurance companies have reserves to back their obligations – so shouldn’t we force them to compete fairly rather than disband the concept of private insurance?
Similarly, many docs who consider the pursuit of their calling as noble and the pursuit of profit unseemly, apparently don’t understand that they are just as driven to earn a profit and return on their investment as profit-focused companies are – only they use different words to describe what they do. They claim they provide a noble service and therefore are entitled to large incomes because they have invested years of their lives and lots in tuition to develop their expertise. Described in other terms, isn’t their expertise their trade, and aren’t their practices really small businesses? In truth, aren’t they demanding a return on their investment – just like all businesses do? (If they don’t, their practices won’t survive.) And how much income does one have to earn before part of it is recognized as a return on investment?
Don’t misunderstand. I recognize that all businesses, like all doctors, aren’t noble, and I don’t support the power of insurers today to dictate what they will pay doctors for their services, or most of the other distortions in our healthcare system. But let’s stop the profit and business bashing. Properly directed, the pursuit of profits just might solve our healthcare problems.
Merle Bushkin is Founder, President and CEO of Health Record Corporation, creator of the MedKaz®, a unique, patient-focused medical record system supported by a unique business model, that aggregates a patient’s lifetime health record on a device the patient owns, controls and carries on a key chain, and is updated by care providers. A career investment banker and financial executive, he is an Incorporator of Mt. Ascutney Hospital and Health Center in Windsor, VT.