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Commercialization And Profit Making Incentive In Healthcare Economics Essay

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Commercialization and the profit making motive in healthcare has been an issue for heated debate in recent times. Should the healthcare industry be regarded as a ‘for profit’ enterprise or retain the philosophical approach intended which should be to treat sick patients at the barest minimum available price? I will with this essay present an argument against commercialization or a profit making incentive by looking at it from the perspective of the physician, the economy, the patient and all other stakeholders in the sector.

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As far back as ancient China, a member of a family was expected to be proficient in the art of medicine in other to meet the health demands of his kin. This has eventually evolved into receiving a financial reward for this expertise and hence the emergence of the ‘medical profession’ as we have known it to be. A doctor sees a patient and receives a fee for treatment offered. This is in itself not a bad thing as quite agreeably, a service has been offered and like most services, should involve remuneration. Only problem with this is that unlike most other types of services, healthcare is quite a peculiar form of service as it doesn’t follow the normal laws of economics. For example, a hotelier can decide not to accommodate an individual without the financial capacity to pay for a room but it screams out against all the medical profession has stood for in all these years to turn an individual (who for the sake of strengthening this argument, needs a minimal intervention to prevent a life threatening catastrophe) without the financial capacity away from the hospital. Needless it is to mention that the medical profession is one that has been governed by ethics and rules, the very foundations that make the profession a noble one. A profit making motive serves to do a whole lot more damage than good.

Basic definitions

Before resuming this essay, it will be important to understand the basic definitions of to concepts which will be the sole foundations of this argument.

Profession: As Hodson and Sullivan explain, a profession is a knowledge-based occupation with high status that has four principal characteristics: specialized knowledge, autonomy, and authority over other subordinate occupational groups, and a degree of altruism (Hodson and Sullivan, 2002). These four characteristics can be said to serve as the basic ideologies which define a profession.

Commercialized healthcare: Provision of healthcare services through market relationships to those who can afford it; investments in and production of services and of inputs to them, for cash income to profit, including private contracting and supply to publicly financed health services; and healthcare finance by individual payment and private insurance. (UNRISD, 2005)


It has been effectively argued that putting a price on health will reduce number of patients who seek unnecessary procedures or surgeries such as in the case of cosmetic surgery, or even more positively make people more health conscious for example people will avoid being morbidly obese as they know that the cost of a gastric by-pass surgery will be overwhelming, and will do all they can to get into shape, eat healthier and live a relatively healthier life than if it wasn’t expensive.

However, the relationship between a physician and the patient is one of trust, where the patient subjects him/herself to the judgement of the physician, judging that the physician’s decision about his/her health will be solely guided by the patient’s best interest at heart, a vulnerable position, very open to abuse and can encourage to promote profit producing drugs, unnecessary surgeries, tests and treatment. In this situation, the possibilities for manipulation and abuse of the trust are limitless. Studies have shown reduced trustworthiness amongst for-profit institutions (Schlesinger et al., 2005). There have been cases heard of doctors keeping patients on dialysis earlier than they should be so that more money can be made, or refusing/not suggesting a kidney transplant which can stop the dialysis altogether. In particular, the relationship between the provider and consumer in this case cannot be compared to what gives under normal economic market forces. This is because the healthcare consumer is not sovereign and lacks the medical know about their condition and what they exactly require. Besides the sick or frightened patients do not regard their physicians as they would normal purveyors of goods and services nor do they regard the hospital as a department store.

This is all without mentioning the economic impact it will have on the patient, who might be made to pay for what is relatively cheaper, or even totally unnecessary and that might not be beneficial to the patient’s health at all. In a for-profit enterprise, treatments and procedures lacking an opening for profit, however effective and cost saving will be disregarded to make way for newer and sometimes even unreliable but far more profitable procedures and treatment.

One of the most pressing issues in this is the health inequality gap this creates especially amongst socio-economic groups. Richer individuals who are able to afford the large sums required for their treatment will ultimately survive longer than those who are less privileged. Even the UK health system, which commenced a comprehensive free healthcare system by the mid twentieth century funded by tax revenue, still faces issues with health inequality, how much more a system where healthcare is out of pocket service and with the possibility of profit making motive.


The medical doctor is one who has gone through gruelling training to acquire medical skill a supporter of commercialization can easily argue. The cost of training a doctor varies in different countries but arguably tops the list in these countries nonetheless as the training takes longer than a regular undergraduate programme, and of all professions, it is the one that requires constant reading and updating, after all, we are dealing with human lives here. And so, it has been said that well paid professionals, who have no need to worry about their daily needs, and/or catering for their families tend to be the most effective. It is argued that they will be able to concentrate on their jobs fully and perform most efficiently.

While comfort cannot be ignored as comfort brings happiness and happiness leads to efficiency, this has never been the backbone of the medical profession. I believe the healthcare provider should be adequately compensated, but not like businessmen, or else the consumer will be perceived as a commodity and no longer as a sick patient in need. For example a healthcare deliverer who is driven for profit, will be biased in the provision of his services, where he/she will have more zeal and attention to a ‘profitable case’ than he would in a ‘non-profitable one’. The physician’s oath, which with its third line declares that ‘I will practise my profession with conscience and dignity; the health of my patient will be my first consideration’, must always be at the back of his/her mind.

Commercialization will lead to leaving certain values and morals that are necessary to a community, such as caring, compassion, charity. The idea of altruism should be perpetuated by all healthcare providers and their primary concern has to be the alleviation of human suffering and the restoration of health. Society must not allow such important and fragile virtues to be extinguished by the self-interest that drives for-profit enterprise.

Furthermore, as a marketing scheme, multinational drug companies spend more and more on education in medical schools, and also on doctors with the aim of eventually influencing the physicians decision making, tilting to favour the companies sometimes at the expense of the patient.


Health is one of the main priorities of a country and the provision of affordable healthcare and a good welfare system should not be a privilege to any member of a large society. Unfortunately, this will not be seen in a profit oriented health setting. Solicitors of for-profit health institutions will argue that with the advent of managed care, less and less will be spent on healthcare. This is by introducing policies of insurance into healthcare because the more people subscribed to the system, the cost for healthcare will be spread over all of them. Physicians under this programme will be advised to use less expensive treatment and sometimes at the expense of the patient.

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The cost to the workforce of sick patients who are unable to carry out normal daily activities will be very obvious. Also, when the financially capable are the ones who are more likely to get medical attention and the ones who cannot are left out to dry, it further increases the upper-lower class margin creating a terrible inequality that should not be accepted.


One of the major driving forces of commercialization of healthcare is the introduction of investor owned institutions. Now everybody wants a dip of this now largely rewarding enterprise ranging from bankers to insurance managers, stockbrokers, economists and so on. This has only done nothing but to undermine the authority of the health care provider as he/she is now subject to higher authority; the authority of investors. This will not allow him/her make the best decisions in favour of the patient as his decisions will become profit oriented.

There is also the issue of unfair competition for non profit health institutions. When for profit institutions agree to take only the wealthier clients and those who are able to pay, this indirectly shifts all those who are unable to pay to the non profit health care providers causing an undue and unfair burden on them. In some cases it can also turn non-profit institutions into for profit ones, and cycle continues gradually phasing the non-profit institutions out of existence.

The medical establishment works closely with the drug multinationals whose main objective is profits, and whose worst nightmare would be an epidemic of good health. Lots of drugs must be sold. In order to achieve this, anything goes: lies, fraud, and kickbacks. Doctors are the principal salespeople of the drug companies. They are rewarded with research grants, gifts, and lavish perks. The principal buyers are the public – from infants to the elderly – who must be thoroughly medicated and vaccinated…at any cost! Why do the authorities forbid alternative medicine? Because they are serving the industry, and the industry cannot make money with herbs, vitamins, and homeopathy. They cannot patent natural remedies. That is why they push synthetics. They control medicine, and that is why they are able to tell medical schools what they can and cannot teach. They have their own sets of laws, and they force people into them. The healthcare industry has become so reliant on the big multinational companies that these funders exert authority over the healthcare providers, and cause them to violate precepts of medical ethics (Grouse, 2008).

Misplaced attention driven by profit making incentive is another issue. Multinational pharmaceutical companies focus their research and development on high profile, profit-making drugs like Viagra instead of developing cures for life threatening diseases in poorer countries.


The UK as earlier mentioned started a comprehensive free medical coverage for its citizens by 1948. The system is sponsored by tax revenue from its citizens. And as such, healthcare is fully monitored by the government through one body; the NHS which is England’s public health service provider, leading to the provision of free healthcare to its citizens. There are private health institutions for those who will want to pay for services but this is said to be patronized by just about 8% of the total population. Some of the disadvantages of this healthcare system are longer waiting lists as everyone has equal access to healthcare, questionable quality of service as the healthcare providers might sometimes forget that the patient has paid for the service required already through taxes. However, this system has the advantage of free healthcare and nothing beats that.

The United State in comparison is largely owned and operated by the private sector. Healthcare insurance is provided largely by the private sector as well except for some health programmes such as the medicare, Medicaid, tricare, the children’s health insurance programme and the veteran’s health administration which in all are unable to cater for an appreciable percentage of the total population. This kind of healthcare system that is largely dominated by the private sector allows for the profit making incentive to be a common trend.

Both systems their strengths and weaknesses

Commercialisation of healthcare is something that has been thoroughly scorned on by members of the profession itself. Various medical associations have risen up to fight this threat to the profession.


It is true that a lot of investment goes into the training of a doctor or any healthcare specialist at that and that they need to be well remunerated for their services, however this should not be a primary focus of the service provider because as this essay has shown, the health market differs from all other markets and that the patient doctor relationship is one built solely on trust; trust that the right, best intervention is given to the patient.

Perhaps most importantly, professionals must have an ideology that assigns a higher priority to doing useful and needed work than to economic rewards, an ideology that focuses more on the quality and social benefits of work than its profitability. This ideology is one that should be preserved for the sake of the profession. The younger generation of health care providers should also be considered so nobody should go into this profession with the aim of amassing wealth, so that the altruistic nature of the profession, which stands as one of its core values, will be preserved. Healthcare is a right and not a privilege and it goes without saying that every society is morally obliged to provide healthcare to its members. An increase in for-profit health care provision however, will only exacerbate the growing problem of accessibility to healthcare.

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