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.
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.
