How for-profit medicine is harming health care
August 8, 2024 – In a July 29 opinion piece in CommonWealth Beacon, John McDonough, professor of the practice of public health at Harvard T.H. Chan School of Public Health, wrote about how profit-focused decisions by companies including Steward Health Care, UnitedHealth Group, and drugstore chains Walgreens and CVS, are damaging medical care in Massachusetts. Here, he explains how the situation got so bad and how it might improve.
Q: Is for-profit medicine inherently problematic?
A: For-profit dynamics have always existed in American medicine, as well as conflicts of interest. For example, in the 19th century, some physicians pushed potions and cures for conditions with zero evidence that those cures worked. They did it to make money. The nursing home and pharmaceutical industries have always been largely for profit.
Pecuniary malevolence in U.S. medical care reached a different stage in the 1970s and 1980s, with the rise of what Arnold Relman, late editor of the New England Journal of Medicine, called the rise of the “medical industrial complex,” when we saw the aggressive entry into medicine of for-profit entities with shareholders. From then on, the problem has been this: If the bottom line obligation of for-profit companies is highest return to its shareholders, and the essential obligation of medicine is patient-centered care, you have two masters. This conflict has never been reconciled—because it’s irreconcilable.
Q: Can you explain what happened with Steward Health Care in Massachusetts?
A: Steward Health is the for-profit hospital system created in 2010 after Cerberus Capital Management, a private equity firm, bought the struggling Caritas Christi hospital chain from the Archdiocese of Boston. Until 2015, Cerberus was under oversight by the Massachusetts attorney general. In 2016, Cerberus sold off Steward’s buildings and property to a real estate investment trust (REIT), Medical Properties Trust, using the proceeds to buy more hospitals outside Massachusetts and to enrich its investors. From that point forward, the hospitals, which previously had owned the property on which they stood, had to pay excessive extortionist rents to the REIT.
In May, Steward filed for bankruptcy protection, and in July announced that it would close two of its Massachusetts hospitals—Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer—at the end of August.
Q: Is there anything the state of Massachusetts can do to address the Steward situation?
A: The state is doing something. Their plan is to advance $30 million in Medicaid payments to facilitate the sale of Steward’s remaining six hospitals for which there are bidders. As for the two hospitals slated to close—Carney and Nashoba Valley—some have suggested putting them into state receivership, though it’s not clear if that would make difference if no qualified entity wants to buy them. The Healey Administration is reluctant to take on an uncertain commitment.
Q: What is the issue with UnitedHealth Group?
A: In 2022, UnitedHealth bought the former nonprofit physician and health center system called Atrius Health. Now Atrius is part of the largest for-profit health corporation in the history of the country. They are cutting costs, shortening the time you can see your physician and eliminating services. They have their physicians seeing more patients for shorter visits, all in the interests of enriching their shareholders.
Q: What is going on with the pharmacy chains?
A: The chains are closing outlets. CVS is by far the biggest chain. It has its own pharmacy benefit management firm, which has been exposed in the New York Times and the Wall Street Journal in the past several months as engaging in activities that harm health care access and raise the costs of prescription drugs for consumers.
All of these pieces—hospital closures, squeezing doctors’ and nurses’ time with patients, and closing pharmacies while drug costs go up—fit together to show a medical care system that is losing its soul and becoming more aggressively for-profit at the expense of patient needs.
Q: Do you see hope on the horizon that the nationwide issues with for-profit medicine can be addressed?
A: The scandal of for-profit medicine cries out for national and state-level solutions. Right now, little can happen at the Congressional level because of the divided government. We’ll see how that looks after the election on November 5.
Essential to effective action are the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ). For example, I’d like to see the FTC and the DOJ split up UnitedHealth into separate companies, including an insurance company, a health care delivery company, and a pharmacy benefit company.
We didn’t get to this current situation overnight and it’s not going to turn in another direction quickly. And history teaches that determined and sustained action by the federal government can make a real difference.
Antitrust is important because concentration and monopolization across American society have totally infected U.S. medical care. Everybody who cares about our health care system’s future has a stake in this fight.
Photo: iStock/shipov
