When JAMA points out the greed in health care, you know we have a problem. “The grip of financial self-interest in US health care is becoming a stranglehold, with dangerous and pervasive consequences. No sector of US health care is immune from the immoderate pursuit of profit.”
Rapidly increasing pharmaceutical costs are now familiar to the public. Pharmaceutical companies have used monopoly ownership of medications to raise prices to stratospheric levels, and not just for new drugs. Flaws in US patent laws leave loopholes allowing profiteering drug companies to gain control of some simple and long-known medications and to raise prices without constraint.
JAMA says, “particularly costly has been profiteering among insurance companies participating in the Medicare Advantage (MA) program. Originally intended to give Medicare beneficiaries the choice of access to well-managed care at lower cost, MA has mushroomed into a massive program, now about to cover more than 50% of all Medicare beneficiaries and costing far more per beneficiary than traditional Medicare ever has. By gaming Medicare risk codes and how comparative “benchmarks” are set for expected costs, MA plans have become by far the most profitable branches of large insurance companies. According to some health services research, MA will cost Medicare over $600 billion more in the next eight years than would have been the case if the same enrollees had remained in traditional Medicare. Opinions differ about whether MA enrollees experience better care and outcomes than those in traditional Medicare, but the weight of evidence is that they do not.”
Hospital pricing games are also widespread. Hospitals claim large operating losses, especially in the COVID pandemic period, but large systems sit on balance sheets with tens of billions of dollars in the bank or invested. Hospital prices for the top 37 infused cancer drugs averaged 86.2% higher per unit than in physician offices.JAMA
Windfall profits also appear in salaries and benefits for many healthcare executives. Of the ten highest paid among all corporate executives in the US in 2020, 3 were from Oak Street Health, and salary and benefits included, reportedly, $568 million for the chief executive officer (CEO). Executives in large hospital systems commonly have salaries and benefits of several million dollars a year. Some academic medical centers’ boards allow their CEO to serve for 6-figure stipends and multimillion-dollar stock options on outside company boards, including ones that supply products and services to the medical center.
Profit may have its place in motivating innovation and higher quality in health care, as in any industry. But klepto capitalist behaviors that raise prices, salaries, market power, and government payment to extreme levels hurt patients and families, vulnerable institutions, governmental programs, small and large businesses, and workforce morale. Those behaviors, mostly legal but nonetheless wrong, have now accumulated to a level that poses an existential threat to a sustainable, equitable, and compassionate healthcare system.
Greed harms the cultures of compassion and professionalism that are the bedrock of healing care. Healthcare executives and board members who know better feel compelled to play the games of pricing, acquisition, and revenue maximization that others do.
What to do?
1ne: Healthcare professionals and people who work in the industry need to become noisier about the conflict between unchecked greed and the duty to heal. Extortionate drug prices, exploitation of market consolidation, coding games, excessive executive compensation, and promulgation of unnecessary care ought not to be met with silence. Silence is consent.
2wo: Healthcare professionals should insist that their guilds and trade organizations demote the pursuit of higher payment among their priorities. They should insist that resources flow to the neediest in our society. Protecting patients—all patients—is the first and highest calling, including protection against onerous medical debt and bankruptcy.
3hree: Healthcare leaders and professionals should lobby Congress to pass legislation to rein in greed. Reforming patent laws, changing coding and billing rules, strengthening antitrust enforcement, expanding price transparency, and accelerating global budgets for the care of populations are agendas that have languished without strong action in Congress for years because the money of incumbents drowns out the greater public interest.
4our: Healthcare professionals should insist that their organizations invest actively in improving social influences on health. America’s hospitals should bring a fair share of their resources to mitigating the natural causes of illness, injury, and disability.
Of course, nothing will change until healthcare leaders determine that their practices are killing people and we get the lobbying money out of healthcare.