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Commentary

Why Making a Profit in Health Care Is Good



What Adam Smith said about the butcher, the brewer and the baker is equally true in health care. You can’t be successful in the medical marketplace unless you are meeting other peoples’ needs. The more needs you meet, the more successful you will be. Profit is one measure of how much good you are doing.

A profitable medical enterprise is one that takes resources that have a value elsewhere in the economy (as measured by the cost) and creates even greater value for consumers/patients (as measured by the revenue). By contrast, a loss implies that resources are being used in a way that is less valuable than their use in producing something else.

[There is such a thing as charity care. But in this day and age, most hospitals have found a way to make a profit by being charitable! That’s a subject I’ll reserve for another day.]

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John C. Goodman is a Senior Fellow at the Independent Institute, President of the Goodman Institute for Public Policy Research, and author of the widely acclaimed Independent books, A Better Choice: Healthcare Solutions for America, and the award-winning, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and the National Journal, among other media, have called him the “Father of Health Savings Accounts.”


New from John C. Goodman!
A BETTER CHOICE: Healthcare Solutions for America
Obamacare remains highly controversial and faces ongoing legal and political challenges. Polls show that by a large margin Americans remain opposed to the healthcare law and seek to “repeal and replace” it. However, the question is: Replace it with what?







  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org