Study says "For Profit" hospitals cost more than non-profits

[Harry Tuttle]

Originally posted by KrazyHorse


Depends on how you count revenues and how you count expenditures. If you're doing a cost efficiency analysis you count certain things as expenditures which may be funded by a source not generally counted as revenue (his example was grants of equipment and private donations, IIRC)



Why? It doesn't matter where the money's coming from, it just matters how much money they each spend (including all sources of expenditures).

Too lazy to even read the rest of the standard 10 page Berzerker reply.

Well I would have gone ino immense detail, but your answer to my intial post wasn't very inspiring.

Also, have you taken the issue of "risk" into your calculations? A Non-Profit that has its utility costs subsidized has a very free hand to spend its money elsewhere.

Remember, revenues may not be taken directly into your cost efficiency model, but the impact of revenues and cash flow on the ebb and flow of the accounts in your model are immense.

EDIT: deleted "account"

[Asher]

Originally posted by Aeson
CostOfProduction, while a variable, is the same across both equations.

It most certainly is not. CostOfProduction depends on the market situation, which is dramatically different across both situations.

[Berzerker]

Remember, revenues may not be taken account directly into your cost efficiency model, but the impact of revenues and cash flow on the ebb and flow of the accounts in your model are immense.

Exactly! Money is fungible, and one of the complaints about comparing Catholic schools with public schools is that the Church heavily subsidises it's schools thereby lowering tuition.

Why? It doesn't matter where the money's coming from, it just matters how much money they each spend (including all sources of expenditures).

But if they don't have the same input, comparing the output becomes problematic.

Too lazy to even read the rest of the standard 10 page Berzerker reply.

Were you too lazy to read the article? Most of my post addressed the article, are you going to complain to Sava for posting a lengthy article now?

[KrazyHorse]

The for-profit spends money on insurance. If the government is effectively a free insurance provider to the non-profit then why can't this expense be taken into account?

Non-profits (at least in Canada) have a similar or even bigger problem when it comes to revenue uncertainty. The government does not write a big blank cheque to cover all expenditures; it authorises a certain amount of money to be spent by each hospital, pays doctors a certain amount per patient up to a limit of billable hours per year etc. If you have to treat more patients than normal then you run into very serious trouble.

At least a for-profit knows that every time it treats a patient it gets money (excluding bad debts, which are certainly covered by yet another insurance policy).

[notyoueither]

Originally posted by Berzerker

"It should be driven by evidence, not people's ideology."

Woolhandler and Himmelstein, both prominent in a group called Physicians for a National Health Program, have long argued for comprehensive, nonprofitmaking health insurance for all Americans.

It took this long for someone to notice that? Heh.

[Aeson]

Originally posted by Asher

It most certainly is not. CostOfProduction depends on the market situation, which is dramatically different across both situations.

It should be simple for someone like you with a computer background. You define a variable. Whatever that variable is, while unchanged, remains unchanged... imagine that. My use of CostOfProduction, without modifiying CostOfProduction between uses, obviously means CostOfProduction remains the same between equations. Yet you disagree that it is the same thing in my equation.

Now, I think what you were trying to say is not that "[CostOfProduction] most certainly is not [the same across both equations]", but rather that "CostOfProduction should not be used in both equations without modification to accurately model all factors involved."

I would agree with that statement, and as I have noted (and you have failed to acknowlege), the intent of my statement was not to model every factor, but to make a specific reference to the direct link between profit margin and price.

Do you suggest that profit margin and price are not linked?

[notyoueither]

Originally posted by KrazyHorse
Why? It doesn't matter where the money's coming from, it just matters how much money they each spend (including all sources of expenditures).

Yes, it does.

If a non-profit or state owned entity is assured to be there tomorrow and next year due to stipends from the public purse, they will behave in different ways than would a private enterprise which has to constantly justify it's continued operations to either a bank or shareholders, or both. So, a private enterprise hospital might have to invest heavily in marketing and advertising, which is something a state-suckling entity would not do much of at all. Bang, up go your costs and down goes your 'efficiency'.

I'm not an expert on hospital administration, but I'd bet my left nut that adminstrative expenses could also be lessened by pooling some functions among the various publically funded hospitals in a region, rather than having each fend for itself. Of course, that might also be offset if there were large combines of privately run facilities in the same geographical area, but if not... Bang, up go your costs and down goes your 'efficiency'.

[notyoueither]

Originally posted by Aeson
CostOfProduction, while a variable, is the same across both equations.

No, it's not. See above.

Tax status (among other things) has been left out of the equation. I've noted it isn't an equation designed to simulate the universe. It's just to point out a simple factor involved. Increasing profit margin, while cost of production remains the same, increases price. How doesn't that make sense to you?

OK, but you are discussing apples-apples equations in an apples-oranges situation.

[Asher]

Originally posted by Aeson
It should be simple for someone like you with a computer background. You define a variable. Whatever that variable is, while unchanged, remains unchanged... imagine that. My use of CostOfProduction, without modifiying CostOfProduction between uses, obviously means CostOfProduction remains the same between equations. Yet you disagree that it is the same thing in my equation.

What I'm saying is there's no point in saying it unless they were the same, and they are clearly not the same.

You are either trying to mislead people, or you were stupid and now are trying to backtrack.

Simple stuff.

My computer background tells me what you wrote is an unreachable branch, and would be discarded by the compiler in an optimization stage.

[Aeson]

Your computer background is misleading you then.

To analyze a factor you must first isolate it. You isolate the factor by minimizing the impact of all other factors. Here is a very simple example for you: (I'm sure you'll see where this is going right off )

What temperature does water boil at?

[Asher]

Your computer background is misleading you then.

To analyze a factor you must first isolate it. You isolate the factor by minimizing the impact of all other factors. Here is a very simple example for you: (I'm sure you'll see where this is going right off )

What temperature does water boil at?

Do you have any clue what's going on?

The problem was your statements are unrealistic, misleading, and completely ficticious. It's fine as far as fantasy land mathematics go, but that's not what the context was. Deal.

[notyoueither]

Originally posted by KrazyHorse
The for-profit spends money on insurance. If the government is effectively a free insurance provider to the non-profit then why can't this expense be taken into account?

Non-profits (at least in Canada) have a similar or even bigger problem when it comes to revenue uncertainty. The government does not write a big blank cheque to cover all expenditures; it authorises a certain amount of money to be spent by each hospital, pays doctors a certain amount per patient up to a limit of billable hours per year etc. If you have to treat more patients than normal then you run into very serious trouble.

At least a for-profit knows that every time it treats a patient it gets money (excluding bad debts, which are certainly covered by yet another insurance policy).

Except, we aren't allowed to have for-profits that deliver anything on the covered services list, and then there are even more restrictions. Like hip replacements.

Throw the above into the equation with your only so many billable hours bit, and you might see why we have waits measured in months and years for procedures that take days and weeks in the States.

Also, since the funding for beds by the government is a choke on the system, no entity running a hospital in Canada could ever be short of clients. The demand is that high. A private hospital in our system would make a killing delivering high quality services, fast. They wouldn't have to advertise. That is why the unions are so paranoid about even the possibility of the field being opened up. They prefer the system where they are assured jobs, and Joe Public can die for all they care if he can't last through the waiting line.

[Aeson]

Yes, you are avoiding all my questions. That is what is going on.

[Asher]

Originally posted by Aeson
Yes, you are avoiding all my questions. That is what is going on.

What's going on is you're clearly insane. I don't see what point there is to answering when water boils.

[Aeson]

To illustrate a principle in a manner which I feel you can understand.