I’m subscribed to a service that sends out daily emails about philanthropic funding in healthcare. It’s full of regional and national foundations who, with the best of intentions, are trying to make our healthcare system better.

Most of the funding falls under two categories: 1) infrastructure building such as new wings or units of hospitals, or 2) research to find a better treatment or cure for something. Of course the unintended consequence of the second endeavor is that the new treatments that the basic scientists want to invent might cost over $100,000 per treatment to extend a life four months, which only serves to make healthcare less affordable for everyone.

I’m asking those who really want to improve the lives of our children to consider a different set of priorities in healthcare philanthropy.

First, there should be more funding explicitly to find less expensive treatments for a whole host of diseases. What works better to ease the pain of diabetic neuropathy, the 13 cent pill or the 4 dollar pill? No one knows. The research has never been performed. The FDA does not require that new pills prove they are better than existing treatments, only placebos. Philanthropy could add to efforts underway in the Comparative Effectiveness Research program.

Second, people in a region who really care about lowering the cost of healthcare should be willing to help with the upfront costs of creating viable non-profit health insurance companies. Some of my virtual health reform think tank friends might disagree with this, but there are two reasons I believe this: 1) Before the HMO era wiped out the non-profit insurance companies, these companies spent about 94% of the premium dollar on healthcare services and 6% on administration and marketing. The for-profit companies spend about 79% on healthcare services and 21% on administration and marketing. 2) I believe the entities that ultimately decide which healthcare services are paid for and which aren’t should have a soul, or at least a conscience. The board of a non-profit is more likely to bring this to policy table.

Businesses exist to make a profit for their shareholders and there’s nothing inherently evil about this reality. But no one should be surprised when a for-profit entity puts profits ahead of all other considerations.

Tags: health insurance, healthcare costs, insurance companies, philanthropy

This entry was posted on June 10, 2012 at 9:27 am and is filed under Blog. You can follow any responses to this entry through the RSS 2.0 feed.