Salve Lucrum: The Existential Threat of Greed in US Health Care

Berwick DM.

JAMA. 2023;329(8):629–630.

doi:10.1001/jama.2023.0846

Here is an excerpt:

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 the ways in which 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 8 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. A patient was billed $73 800 at the University of Chicago for 2 injections of Lupron depot, a treatment for prostate cancer, a drug available in the UK for $260 a dose. To drive up their own revenues, many hospitals serving wealthy populations take advantage of a federal subsidy program originally intended to reduce drug costs for people with low income.

Recent New York Times investigations have reported on nonprofit hospitals’ reducing and closing services in poor areas while opening new ones in wealthy suburbs and on their use of collection agencies for pursuing payment from patients with low income. The Massachusetts Health Policy Commission reported in 2022 that hospital prices and revenues increased during a decade at almost 4 times the rate of inflation.

Windfall profits also appear in salaries and benefits for many health care executives. Of the 10 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.

The info is here.

My summary and warnings are here:

Greed is not good, especially in healthcare. This article outlines the concerning issue of greed pervading the US healthcare system. It argues that prioritizing profit over patient well-being has become widespread, impacting everything from drug companies to hospitals. The author contends that this greed is detrimental to both patients and the healthcare system as a whole. To address this, the article proposes solutions like fostering greater transparency and accountability, along with reevaluating how healthcare is financed.

The Sacklers were drug dealers who put money over morality.

Chris McGreal
The Guardian
Originally published September 17, 2019

If only we could feel Purdue Pharma’s pain.

The directors and owners of the company that did so much to create America’s opioid epidemic are professing distress and bewilderment at the rejection of what they claim are its good faith efforts to help the victims.

Even as Purdue announced plans late Sunday night to file for bankruptcy, its top officials were making unctuous claims that their concern was to combat an epidemic that has claimed more than 400,000 lives. Anyone who stood in the way was depriving suffering Americans of the help they need, they claimed.

Members of the Sackler family who own Purdue have offered to turn over the company to a trust which would funnel future earnings to treatment and other measures to deal with the tragedy. They would also sell Mundipharma, a British-based sister company, and hand over the payment. The Sacklers even said they would give up a part of the huge profits of OxyContin, which made the family multibillionaires.

Some of the state attorneys general and cities suing Purdue have accepted the deal as the best prospect for getting anything out of the company and said the bankruptcy filing was part of the arrangement.

Other attorneys general rejected the move, claiming it was an attempt by Purdue’s owners and executives to hang on to the bulk of the profits of drug dealing and buy their way out of individual accountability. Some of those states are also suing the Sacklers directly.

The info is here.

Trump EPA official who was indicted on ethics charges has resigned

Brady Dennis
The Washington Post
Originally posted November 19, 2018

A regional administrator for the Environmental Protection Agency, indicted in Alabama last week on violations of state ethics laws, has resigned.

Trey Glenn, who oversaw eight states in the Southeast as the EPA’s Region 4 leader, faces charges of using his office for personal gain and soliciting or receiving a “thing of value” from a principal or lobbyist, according to the Alabama Ethics Commission. He was booked at the Jefferson County Jail on Thursday in Birmingham and later released on a $30,000 bond, records show.

The charges against Glenn and a former business partner appear to stem from work helping a coal company fight liability in an EPA-mandated cleanup of a polluted site in north Birmingham. Glenn has denied wrongdoing, but he submitted his resignation over the weekend to acting EPA administrator Andrew Wheeler.

The info is here.

Editorial note: Just another example of how the swamp only deepened in the current administration.

Huge price hikes by drug companies are immoral

Robert Klitzman
CNN.com
Originally posted September 18, 2018

Several pharmaceutical companies have been jacking up the prices of their drugs in unethical ways. Most recently, Nirmal Mulye, founder and president of Nostrum Pharmaceuticals, defended his decision to more than quadruple the price of nitrofurantoin, used to treat bladder infections, from about $500 to more than $2,300 a bottle. He said it was his "moral requirement to sell the product at the highest price."

Mulye argues that his only moral duty is to benefit his investors. As he said in defending Martin Shkreli, who in 2015 raised the price of an anti-parasite drug, daraprim, 5,000% from $13.50 to $750 per tablet, "When he raised the price of his drug he was within his rights because he had to reward his shareholders."

Mulye is wrong for many reasons. Drug companies deserve reasonable return on their investment in research and development, but some of these companies are abusing the system. The development of countless new drugs depends on taxpayer money and sacrifices that patients in studies make in good faith. Excessive price hikes harm many people, threaten public health and deplete huge amounts of taxpayer money that could be better used in other ways.

The US government pays more than 40% of all Americans' prescription costs, and this amount has been growing faster than inflation. In 2015, over 118 million Americans were on some form of government health insurance, including around 52 million on Medicare and 62 million on Medicaid. And these numbers have been increasing. Today, around 59 million Americans are on Medicare and 75 million on Medicaid.

The info is here.

Pharma exec had 'moral requirement' to raise price 400%

Wayne Drash
CNN.com
Originally published September 12, 2018

 A pharmaceutical company executive defended his company's recent 400% drug price increase, telling the Financial Times that his company had a "moral requirement to sell the product at the highest price." The head of the US Food and Drug Administration blasted the executive in a response on Twitter.

Nirmal Mulye, founder and president of Nostrum Pharmaceuticals, commented in a story Tuesday about the decision to raise the price of an antibiotic mixture called nitrofurantoin from about $500 per bottle to more than $2,300. The drug is listed by the World Health Organization as an "essential" medicine for lower urinary tract infections.

"I think it is a moral requirement to make money when you can," Mulye told the Financial Times, "to sell the product for the highest price."

The info is here.

America is spiritually bankrupt.

Cornel West
The Guardian
Originally published January 14, 2018

Here are two excerpts:

The distinctive features of our spiritual blackout are threefold.

First, we normalize mendacity and naturalize criminality. We make our lies look like the normal order of things. And we make our crimes look like the natural order of things. We too often say Wall Street is a good servant – rather than a bad master – of the common good. Then we look away from the criminal behavior of big banks because they are too indispensable to prosecute.

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Second, we encourage callousness and reward indifference. We make mean-spiritedness look manly and mature. And we make cold-heartedness look triumphant and victorious. In our world of the survival of the slickest and the smartest, we pave the way for raw greed and self-promotion. We make cowardice and avarice fashionable and compassion an option for losers. We prefer market-driven celebrities who thrive on glitzy spectacles and seductive brands over moral-driven exemplars who strive on with their gritty convictions and stouthearted causes.

Third, we trump the moral and spiritual dimensions of our lives and world by applauding our short-term gains and superficial successes. This immoral and brutal disposition reinforces – and, in part, is a result of – the all-encompassing commodification of a predatory capitalism, running out of control in our psyches and societies.

The opinion is here.

A worm in the heart

A whistleblower’s account of a small town municipality riddled with corruption

By Niki Moore
The Daily Maverick
Originally posted July 25, 2014

Here is an excerpt:

“Everyone in this municipality, everyone, is corrupt,” he said, in an extremely emotional telephone interview. “The word has spread through the town, and if you want services cheaply, or you want to have your debt scrubbed, you go and speak to someone in the council. Make a small payment, and you will get whatever you want.”

Council employees, says Mervyn, have become expert at diverting fees that should be paid to council, into their own pockets.

The entire story is here.

Does Studying Economics Breed Greed?

By Adam Grant
Author of Give and Take
LinkedIn article
Published October 21, 2013

In 1776, Adam Smith famously wrote: “It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.”

Economists have run with this insight for hundreds of years, and some experts think they’ve run a bit too far. Robert Frank, an economist at Cornell, believes that his profession is squashing cooperation and generosity.  And he believes he has the evidence to prove it.

Consider these data points:

Less charitable giving: in the U.S., economics professors gave less money to charity than professors in other fields—including history, philosophy, education, psychology, sociology, anthropology, literature, physics, chemistry, and biology. More than twice as many economics professors gave zero dollars to charity than professors from the other fields.

More deception for personal gain: economics students in Germany were more likely than students from other majors to recommend an overpriced plumber when they were paid to do it.

Greater acceptance of greed: Economics majors and students who had taken at least three economics courses were more likely than their peers to rate greed as “generally good,” “correct,” and “moral.”

The entire article is here.

Whistle-Blower’s Letter Led to Charity’s Firing of Chief Executive

By RUSS BUETTNER and WILLIAM K. RASHBAUM
The New York Times
Published: September 15, 2013

Here is an excerpt:

The charity’s chief executive, William E. Rapfogel, had been conspiring with someone at the insurance brokerage, Century Coverage Corporation, to pad the charity’s insurance payments by several hundred thousand dollars a year, according to a person briefed on the investigation.

Mr. Rapfogel, whose annual compensation package exceeded $400,000, pocketed some of the money and was involved in getting the rest to politicians who supply the government grants to the nonprofit organization, the person said.

The charity, widely known as Met Council, informed state authorities of its findings, and more formal inquiries began.

The entire story is here.

The Charitable-Industrial Complex

By PETER BUFFETT
The New York Times - Opinionator
Published: July 26, 2013

Here are some excerpts:

Because of who my father is, I’ve been able to occupy some seats I never expected to sit in. Inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left. There are plenty of statistics that tell us that inequality is continually rising. At the same time, according to the Urban Institute, the nonprofit sector has been steadily growing.

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As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to “give back.” It’s what I would call “conscience laundering” — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.

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I’m really not calling for an end to capitalism; I’m calling for humanism.

The entire story is here.