American's Health Care System: Driven By Profit, Not Patient Care

If nothing else, the murder of Brian Thompson, the C.E.O. of UnitedHealthcare has prompted an outpouring of rage against insurance companies and America's broken health care system that increasingly is driven by profits - the higher the better - rather than true patient care.  Hospital systems and for profit corporations have bought up medical practices and control medical care by doctors and for profit hospitals focus ultimately only on the bottom line.   "Non-profit" hospital systems are little better as the engage in monopoly wars with competing systems (years ago I did legal work for a hospital system little focus was on medical care and instead on competing with a rival system that ultimately gobbled up my client) and direct captive medical practices to refer patients to the hospital system even if better treatment options are available through other providers or systems. Then there is the systematic denial of claims by health insurers aimed at boosting profits.  It is ALL about the money even before one factors in the over billing and procedure coding games that drain taxpayer dollars from Medicare and other programs.  America has the most costly health care of any advanced nation and serves the smallest percentage of its citizens compared to other nations.  Sadly, the trend towards profit motive alone is worsen as a long piece in the New Yorker lays out.  Here are highlights:

In 2010, a private-equity firm called Cerberus Capital Management, which is named for the three-headed dog that is said to guard the underworld, bought six Catholic hospitals in Massachusetts and christened the chain Steward Health Care. The state’s attorney general blessed the deal on multiple conditions, including that, during a five-year review period, the hospitals stayed open and their workers stayed employed. A few months after the period ended, however, Steward started selling the land on which the hospitals stood. A $1.25-billion-dollar deal, in 2016, helped to finance more acquisitions. Many facilities, asked to pay rent on land they’d previously owned, struggled.

According to a recent report published by Massachusetts Senator Ed Markey’s office, which covers the period between 2017 and 2024, some Steward facilities had to forgo key investments in staffing, surgical equipment, elevator repairs, and even clean linens. Patients increasingly languished in emergency rooms; many left without receiving care; and mortality rates for common conditions climbed sharply. . . . . A hospital in Florida developed a bat infestation, and another, in Texas, was cited for placing potentially suicidal patients in rooms with materials with which they could hang themselves. Employees at Steward’s Carney Hospital, in Massachusetts, began calling their workplace “Carnage” hospital.

In May, Steward filed for bankruptcy. It has closed two hospitals and plans to sell thirty-one others. Steward’s C.E.O., Ralph de la Torre, who in 2011 purchased a forty-million-dollar superyacht, was subpoenaed by a Senate committee but failed to show up; he was held in contempt of Congress and resigned from his position. . . . . Nonetheless, Cerberus realized a profit of seven hundred and ninety million dollars from its investment in Steward.

Meanwhile, in some places in the U.S., private-equity firms now own more than half of all medical practices within certain specialties. “We are being picked clean by private equity,” a New Jersey-based radiologist said at a recent meeting of the American Medical Association.

2024 was arguably the year that the mortal dangers of corporate medicine finally became undeniable and inescapable. A study published in JAMA found that, after hospitals were acquired by private-equity firms, Medicare patients were more likely to suffer falls and contract bloodstream infections; another study found that if private equity acquired a nursing home its residents became eleven per cent more likely to die. Although private-equity firms often argue that they infuse hospitals with capital, a recent analysis found that hospital assets tend to decrease after acquisition. Yet P.E. now oversees nearly a third of staffing in U.S. emergency departments and owns more than four hundred and fifty hospitals.

Erin Fuse Brown, a professor at the Brown University School of Public Health, told me that private-equity firms have learned that they “don’t have to make things better or make them more efficient. You can just change one small thing and make a ton more money.” They are hardly the only corporations to learn this lesson. Increasingly, health insurers, private hospitals, and even nonprofits are behaving as though they aim first to extract revenue, and only second to care for people. Patients often are viewed less as humans in need of care than consumers who generate profit.

In 1873, Mark Twain co-wrote the novel “The Gilded Age: A Tale of Today,” which satirized an era that was marked by inequality, greed, and moral decay but was painted in a veneer of abundance and progress.

New technologies and treatments sustain the impression that patients have never been healthier, but corporations and conglomerates wield immense power at the expense of the people they’re meant to serve. Welcome to the Gilded Age of medicine.

In recent years, health-care corporations have embraced an approach that can only be described as gamification. In the U.S., all seniors over sixty-five are entitled to health insurance through Medicare, and, for several decades, private companies have offered plans through programs such as Medicare Advantage. The government pays insurance companies a fixed sum based partly on how sick those patients are. The sicker the patients, the bigger the potential payments. But who’s to say, really, how sick a patient is? Let the games begin.

This year, the health-news site STAT revealed that UnitedHealth, the country’s largest private insurer, had set up dashboards for practices to compete on how many conditions they could diagnose in patients. Doctors who completed the most appointments with seniors in Medicare Advantage were eligible for ten-thousand-dollar bonuses, and patients were offered seventy-five-dollar gift cards for getting checkups at which their medical histories could be recorded.

These strategies rack up so many additional diagnoses that, in 2023 alone, the federal government made $7.5 billion in “overpayments” to insurers, according to the U.S. Office of the Inspector General. Insurers are “pouring tremendous resources into developing the capacity to code patients in a way that nets more money from Medicare,” Donald Berwick, a former head of the Center for Medicare & Medicaid Services, told me. “That’s taxpayer money being siphoned away from people who need it.”

Berwick said that his own physician’s practice had recently been acquired by UnitedHealth. One day, he asked his doctor, “Anything different now?” “Two things,” the doctor replied. “I have to see more patients each day. And my patients have new diagnoses that I didn’t put there.” . . . . It did, however, generate higher payments from Medicare. Ask not what your insurer can do for you—ask how much revenue you can generate for your insurer.

The insurance companies in Medicare Advantage tend to argue that they’re simply recording diagnoses, not making them up . . . . But according to the Medicare Payment Advisory Commission, a nonpartisan agency that counsels Congress, private Medicare Advantage plans will cost the federal government eighty billion dollars more per year than if those patients had been in the traditional Medicare program. “You might as well flush most of that eighty billion dollars down the toilet,” Berwick told me.

On December 4th, after I drafted this piece, Brian Thompson, the C.E.O. of UnitedHealthcare, was fatally shot in midtown Manhattan. In the days that followed, the public response was not just one of shock but also of frustration and even rage against the health-insurance industry. . . . . Thompson had become a symbol of a broken system; people who devalued his life, it seemed to me, were engaging in a version of the dehumanizing behavior that they found objectionable within the health-care industry.

It would be nice if nonprofit health care were the antidote to corporate health care. Instead, each year, it seems to look more like for-profit medicine. The Times recently reported that Providence, one of the nation’s largest not-for-profit health-care organizations, sicced debt collectors on poor patients who were entitled to free care. Providence, which was founded in the eighteen-fifties by nuns committed to “serving all, especially those who are poor and vulnerable,” recorded annual revenues in excess of twenty-seven billion dollars in 2021. Like other nonprofits, it benefitted from enormous tax breaks, yet only one per cent of its expenses went to charity care. . . . . other hospitals still have policies of suing patients, obtaining court orders to garnish their wages if they fail to pay, and even placing liens on their homes.

Meanwhile, an increasingly consolidated health-care industry has engendered the kinds of too-big-to-fail behemoths that can single-handedly paralyze the system. Health care accounts for more than seventeen per cent of the U.S. economy, or around four and a half trillion dollars, but the revenues of just two companies—CVS/Aetna and UnitedHealth—account for nearly one in every seven dollars the nation spends on health care.

It’s not that any talk of money should be rejected—hospitals and clinics need to keep the lights on, after all. But we need counternarratives to revive medicine’s social contract and to help curb the kind of financial gamesmanship that has become accepted and pervasive.