August 8, 2024 – John McDonough, professor of public health practice at Harvard T.H. Chan School of Public Health, wrote in a July 29 opinion piece in the Commonwealth Beacon that profit-driven decisions by corporations like Steward Health Care, UnitedHealth Group and drugstore chains Walgreens and CVS are damaging health care in Massachusetts. Here, McDonough explains why the situation has gotten so bad and how it can be improved.
John McDonough
Q: Is for-profit health care inherently problematic?
A: There have always been profit dynamics as well as conflicts of interest in American healthcare. For example, in the 19th century, there were doctors who peddled drugs and treatments that had no evidence of effectiveness, all in the name of making money. Nursing homes and the pharmaceutical industry have always been primarily profit-driven.
Financial malice in American health care reached another stage in the 1970s and 1980s with the rise of what the late editor of the New England Journal of Medicine, Arnold Relman, called the rise of the “medical-industrial complex,” in which for-profit entities with shareholders entered health care aggressively. Since then, the problem has become this: If the ultimate imperative of a for-profit corporation is to maximize profits for its shareholders, and the essential imperative of health care is patient-centered care, then you have two masters. This conflict has never been reconciled, because it can never be reconciled.
Q: Can you explain what happened at Steward Health Care in Massachusetts?
A: Steward Health is a for-profit hospital system formed in 2010 after private equity firm Cerberus Capital Management bought the struggling Caritas Christi hospital chain from the Archdiocese of Boston. Until 2015, Cerberus was under the supervision of the Massachusetts Attorney General. In 2016, Cerberus sold Steward's buildings and assets to Medical Properties Trust, a real estate investment trust (REIT), and used the proceeds to buy more hospitals outside Massachusetts, enriching investors. Since then, the hospitals that owned the properties that formerly housed the hospitals have had to pay exorbitant rents to the REIT.
Steward filed for bankruptcy in May and announced in July that it would close two Massachusetts hospitals — Kearney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer — at the end of August.
Q: Can Massachusetts do anything to address Steward's situation?
A: The state is doing something. Their plan is to upfront $30 million in Medicaid payments to facilitate the sale of Steward's six remaining hospitals, for which there are bidders. As for the two hospitals slated for closure (Kearney and Nashoba Valley), some have suggested putting them under state control, but it's not clear whether that would change anything if no eligible entity wants to buy them. The Healey administration has been reluctant to take on uncertain commitments.
Q: What is the issue with UnitedHealth Group?
A: In 2022, UnitedHealth acquired Atrius Health, a former nonprofit physician and medical center system. Now Atrius is part of the largest for-profit healthcare corporation in U.S. history. The company is cutting costs, shortening doctor visits, and eliminating services. The company is enabling doctors to see more patients in fewer visits, all in the service of shareholder profits.
Q: What's happening with pharmacy chains?
A: Chains are closing stores. CVS is by far the largest chain. CVS has its own pharmacy benefit management company, which has been exposed in recent months by The New York Times and The Wall Street Journal for engaging in activities that reduce access to health care and raise prescription drug costs for consumers.
Hospital closures, reduced doctor and nurse time with patients, pharmacy closures amid soaring drug costs — all these combine to suggest a health care system that has lost its soul and become more aggressive in its pursuit of profit at the expense of patient needs.
Q: Do you see any hope that the national problem with for-profit health care will be resolved?
A: The for-profit health care scandal requires a solution at the national and state levels. Currently, due to a divided government, very little can be done at the congressional level. We will see what happens after the November 5th election.
Critical to an effective response are the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ). For example, I would like to see the FTC and DOJ break up UnitedHealth into separate companies that include an insurer, a health care provider, and a pharmacy benefits company.
This situation didn't happen overnight, and it won't get better anytime soon. History shows us that decisive and sustained action by the federal government can make all the difference.
Antitrust law is important because concentration and monopoly across American society have completely permeated American health care. Everyone who cares about the future of our health care system has a stake in this fight.
– Karen Felsher
Photo: iStock/shipov
