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As Long as We Remember...

August 6, 2009

Healthcare and The Pittsburgh Pirates

Tony Soltero

When I was younger, the Pittsburgh Pirates were a model baseball franchise, a team that contended almost every year and won its share of championships in the process. Thanks in large part to the Roberto Clemente connection, the Bucs were very popular in Puerto Rico, where I grew up.


It seemed like half my high-school classmates were Pirate fans. The team continued to thrive until the mid-1980s, when it collapsed under the weight of mismanagement and a serious drug scandal. The franchise revived briefly in the early 1990s, but crashed again after Barry Bonds' departure and has never recovered.


Today most serious baseball fans regard the Pirates as a punchline – the team hasn't registered a winning record in years, and it's caught in an endless cycle of on-field failure. Its system does develop good young players on occasion – but as soon as the player matures, he's traded off to a contender for a younger (cheaper) player. From the standpoint of the fan, there must be few teams more frustrating to root for; it can't be pleasant to have the rug pulled out from under you year after year.


But from the perspective of ownership, the Pirates have been a smashing success. With a new publicly-funded stadium (which management claimed it "needed" in order to attract and retain top-level talent; funny how that top-level talent has yet to arrive) and a determination to keep the payroll low, the Pirates franchise has generated healthy profits, as bad as the on-field product has been.


The performance of the team is almost irrelevant to the organization's bottom line; in fact, if the team does too well, the players responsible will be in a position to command large raises and multi-year contracts, and potentially impact profit margins. Management has made a perfectly rational calculation that the team's profits are maximized with a noncompetitive team on the field. And so, the interests of the fan – a winning team – have been completely decoupled from the interests of the organization – making money.


It wasn't always like this. When the bulk of a baseball franchise's revenues flowed from gate receipts, the organization had a strong financial incentive to put the best possible team on the field; bad teams don't put fannies in seats. And, thus, the more games a team won, the more money the team made.


The interest of the fan meshed perfectly with the interest of the organization – so teams did what they could to try to win. Those that didn't – the Philadelphia Athletics, the St. Louis Browns – saw their fan bases shrivel to the point that they had to move to a different city to survive. Losing games meant losing money.


The state of the Pittsburgh Pirates today is an instructive reflection of the state of the health-insurance industry in the nation today. The financial interests of insurance companies are completely at odds with the interests of their subscribers. The company wants to make money; the customer wants to secure medical treatment. The more treatment the patient receives, the less income the insurance company generates. And, thus, it is in the fiduciary interest of the company to authorize as little treatment as possible for the patient – which results in constant challenges to patient and doctor claims, and sometimes the out-and-out rescission of benefits. And if the patient dies, all the better for the company


This is why we hear so much right-wing propaganda about how America has the "best health care system in the world." When it's measured by the profits generated by the insurance and pharmaceutical industries, the United States indeed performs formidably; of course, when it's measured by the criteria that matters to patients – stuff like life expectancy, infant mortality, accessibility, et al – the U.S. drops to the bottom of the list among industrialized countries, and embarrassingly below a few third-world outposts.


 And this is directly due to the fact that under our for-profit healthcare system, the needs of the patient are deemed far, far less important than the needs of the insurance industry. (Interesting how the "sanctity of life" crowd all scatters whenever confronted with this idea. Wonder what they would have said if Terri Schiavo hadn't been insured.) While some might interpret this as a knock on the insurance industry, it really isn't; like the Pittsburgh Pirates, the insurance companies are acting completely rationally within the system as it is now. The problem isn't the players as much as it is the system itself. Quick deaths are good for the stock market.


So, any healthcare reform, in order to be effective, must challenge the existing system head-on, and find a way to re-align the interests of the people (staying healthy, getting treatment) with the interests of the insurance industry (making money).


Maybe this could be achieved by simply opening up the market to competition (there are states in which one insurer controls three-quarters of the market). Maybe this means that the concept of private insurance should go the way of the dodo bird, though that's not remotely likely; there will always be a market for private insurance, just like there is for private schools. But health care is for the patients – not for big Insurance


When baseball reforms its revenue structure so that teams like the Pittsburgh Pirates can no longer get rich by losing, Pittsburgh fans will have a reason to get interested again. And when we reform our healthcare system to put the needs of patients first, we'll improve the quality of life in America immeasurably.


Woodsboro - Walkersville Times
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The Covert Letter

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