July 11, 2025
Dear Interested Readers,
Coming To Grips With A Big Problem
My Fourth of July celebration was dimmed a bit by President Trump signing his “One Big Beautiful Bill.” I have learned recently that many of the portions of the bill that will damage lower income Americans were strategically scheduled to come on line after the 2026 mid-term elections. It is a very complicated bill that clearly benefits the wealthiest Americans while throwing a few peanuts to low-income families. When you get past all the smoke and mirrors and add in the substantial increases in the national debt necessary to fund the gifts to those who don’t need one and should be paying more, it adds up as a huge loss for those who are already underwater, and a real threat to the long term economic health of the nation. Lawrence Summers, a respected economist, a former president of Harvard University, and most significantly a former Secretary of the Treasury, summed up the downside of this bill that even drew the rath of Elon Musk in a New York Times opinion piece this week entitled “Lawrence Summers: This Law Made Me Ashamed of My Country.” As you can glean from his first two paragraphs, Summers was certainly upset by the bad and potentially disastrous fiscal policy that the bill is built on, but he was most upset by its impact on the lives of our poorest citizens, and the damage it will do to rural and small town healthcare. In the second paragraph, he reveals that he has learned a lot from his two daughters who live in New Hampshire. One is a physician, and one is a social worker. He begins by writing:
Last week, Robert Rubin and I warned of the many macroeconomic risks created by the domestic policy bill President Trump signed into law on Friday. I stand by our judgment that it will most likely slow growth, risk a financial crisis, exacerbate trade deficits and undermine national security by exhausting the government’s borrowing capacity. This is more than ample reason to regret its passage.
I want to return to the topic after conversations with health professionals, including my daughters, who practice medicine and social work in rural New Hampshire. They made me realize that a focus on macroeconomics, while valid, misses the human brutality that I now see as the most problematic aspect of the legislation. I don’t remember on any past Fourth of July being so ashamed of an action my country had just taken.
Yes, I did “bold” one sentence to enhance its impact. If you haven’t been paying much attention to the reams of articles about the downsides of the bill, I hope that you click on the link and read this one article. In case you don’t have a Times subscription or have used up the “free” articles the Times allows, I will present a few more of Professor Summers’ thoughts:
Because Medicaid is a state-level program and varies widely across the country, economists can evaluate the impact of alternative policies. A number of studies suggest that removing one million people from the rolls for one year could result in about 1,000 additional deaths. It follows that removing more than 11 million people for a decade would likely result in more than 100,000 deaths. Because this figure fails to take account of the degradation of service to those who remain eligible — fewer rides to the hospital, less social support — it could well be an underestimate.
Summers rightly points out that the damage won’t be limited to the poor. The indirect realities of taking millions of people off of Medicaid will impact everyone.
The cruelty of these cuts is matched only by their stupidity. Medicaid beneficiaries will lose, but so will the rest of us. The cost of care that is no longer reimbursed by Medicaid will instead be borne by hospitals and passed onto paying patients, only at higher levels, because delayed treatment is more expensive. When rural hospitals close, everyone nearby loses. Hospitals like the one where my daughters practice can no longer accept emergencies by air because those beds are occupied by patients with chronic diseases and no place to go.
Summers finishes by commenting about the delay in implementation as a possible reason for hope. I hope that he is right.
Because of the congressional instinct for political survival, the Medicaid cuts are backloaded beyond the 2026 midterms. Cynicism may have a silver lining. As more people realize what is coming, there is time to alter these policies before grave damage is done. TACO — Trump Always Chickens Out — is a doctrine that should apply well beyond financial markets.
Before reading the article by Summers on Tuesday, I had planned to abandon my discussion of the potential damage to our healthcare system created by the president’s new bill, his tariffs, and his anti-DEI policies. I was excited about discussing a new series of articles from the New England Journal of Medicine, which was announced in an editorial on July 3rd. The promised series will be entitled “The Corporatization of U.S. Health Care — A New Perspective Series.”
Over the years, I have written about many aspects of “corporatization,” a trend that continues to expand and often undermines the care of patients in favor of the corporate “bottom line and shareholder value” in publicly traded and privately held healthcare ventures. I will pass through to you many of the ideas the series presents. I hope that you will click on the links that I will provide and read many of the articles yourself. You usually don’t need a subscription to the NEJM to read “Perspective” articles. The editorial announcing the series begins with a reference to Sister Irene Kraus, who became a nun in the order of Daughters of Charity of St. Vincent de Paul after she graduated from high school at age 17.
Sister Kraus died of cancer at age 74 in 1998. Her order initially made her a school teacher, and then in her mid-twenties, she was directed to get a nursing degree. She transitioned from being an operating room supervisor to becoming a very skilled healthcare executive who was the first woman to serve as the Chairman of the American Hospital Association. Her New York Times obituary says that she preferred the title “Chairman” to “Chairwoman” because, ”I didn’t work this hard to get here and have my title changed.”
She founded the Daughters of Charity National Health System in 1986, which merged with the hospitals of the Sisters of St. Joseph to become Ascension Health in 1998 after her death. Ascension is one of the largest systems in the country, and though it is a nonprofit organization, it functions as a very large corporation. With over 100 hospitals, Ascension is one of our ten largest healthcare systems. Sister Kraus gained healthcare business fame when she coined the phrase, “No margin, no mission.” That phrase has been co-opted to cover a world of corporate transgressions. Sister Klaus’ true intent is explained in a 2022 article in Forbes. The author Sachin H. Jain begins:
No margin, no mission.
The phrase is usually attributed to Irene Kraus, the nun who led the Daughters of Charity National Health System, who used it to explain that her hospitals couldn’t rely on charitable donations alone.
These days the expression is frequently uttered in healthcare organizations to justify profit-making and revenue-maximizing behavior. The person uttering it is usually acknowledging the natural tension that exists between service to others and sustainability. Indeed, almost immediately after these words are uttered—in management team meetings, in board rooms, at conferences—everyone seems to nod knowingly in agreement and move on from whatever moral dilemma is being discussed.
“No margin, no mission” is the ultimate healthcare conversation stopper.
It’s also a form of healthcare business virtue-signaling. Margin, we are told, is the defender of the mission. And without it, there can be no mission. Therefore, margin—meaning profit—becomes the highest of all organizational virtues.
That is where the editorial in the NEJM begins:
Whether one is examining health disparities within the United States or between it and other high-income countries, probing U.S. patients’ frustrations with their health care experiences, or exploring the causes of widespread burnout among U.S. physicians and other health care workers, one quickly arrives at allegations against a single (if vast and nebulous) culprit: the corporatization of the U.S. health care system.
Though there is undoubtedly truth to the “no margin, no mission” axiom — without adequate ongoing funding, no health care system is sustainable — the trends toward corporate ownership of health care organizations, market consolidation and concentration, and emphasis on the bottom line are widely seen as primarily benefiting corporate executives and their shareholders. Clinicians are becoming increasingly demoralized and are either seeking viable ways out of a system that they feel treats them as cogs in a wheel or attempting to fight back with collective bargaining. Patients of financial means are following their doctors to concierge practices. And lower-income patients are getting increasingly lost amid ballooning patient panels, the prioritization of checklists and billing over humanistic care, byzantine insurance requirements and administrative burdens, and ever narrower provider networks.
Those two paragraphs are an indictment of the status quo that has evolved over the last forty years. As we continue to read the editorial, we learn more about what we have lost to “shareholder value.” We have been much like the fictitious frog that stays in gradually warming water until it is boiled alive:
In this issue of the Journal, we launch a new Perspective series called “The Corporatization of U.S. Health Care” to delve into these trends and draw out their ramifications for physicians, patients, and health. We begin with an article by Erin Fuse Brown, laying out some essential definitions — including what’s meant by “corporatization” — and providing a snapshot of the current landscape.
Those first few words of the editorial are a “40,000-foot” perspective on the pain and confusion that defines much of healthcare these days, whether you are a part of “the system” or one of its income opportunities. For those millions who don’t have access to healthcare now, or if you will be one of the millions who will eventually lose access to care in the wake of Trump’s One Big Beautiful Bill (OBBB), it probably doesn’t make much difference to you if healthcare is corporatized or not. My opinion is that when Dr. Ebert opined in 1965 that the future health of the nation did not depend upon spending more money or building more facilities but rather finding better ways of delivering and financing care, he was not suggesting that we turn over the future of care to those seeking to make a profit off the misery of others. It is my bias that we have seen a growing menace to our nation’s future as healthcare has become more and more “corporatized,” resulting in a decline in life expectancy and an increasing financial burden, coupled with a declining satisfaction for those who still have access to care, while those providing care face burnout and “moral injury.”
In the same issue of the NEJM, we find the first of the promised monthly “Perspective” articles. The initial article is entitled Defining Health Care “Corporatization,” written by Erin C. Fuse Brown, J.D., M.P.H. She begins by referring to the prescient writing of Paul Starr from 1982, who saw that:
…health care was on the cusp of another major transformation, shifting toward a future in which corporations consolidate ownership and control until the health care system becomes “an industry dominated by huge health care conglomerates.”…
…Starr observed the corporatization of health care proceeding along five dimensions: the shift from nonprofit and government organization to for-profit companies; horizontal consolidation of locally controlled entities to nationally or regionally controlled corporations; the shift from single-unit and single-market firms to conglomerate enterprises; vertical consolidation among levels of care delivery and payers; and increasing concentration, size, and scope of organizations.
Well, he was right.
In the four decades since the publication of this work, the U.S. health care system has progressed further along every one of these dimensions toward greater corporatization. According to the American Hospital Association, the share of for-profit community hospitals increased from 13.1% in 1983 to 23.7% in 2023. Meanwhile, health care entities have expanded their size, scope, and market concentration by means of a combination of horizontal and vertical consolidation. The percentage of hospitals owned by companies controlling three or more hospitals increased from 11.6% in the 1980s to 56.1% today, according to the Department of Health and Human Services, and now nine megahospital chains own more than 50 hospitals each. In the early 1980s, three quarters of U.S. physicians owned their practice, whereas in 2023 a similar proportion of physicians was employed by hospitals or corporate entities, including private equity funds.
That is not all of the change we have seen:
Insurance conglomerates, such as UnitedHealthcare and CVS–Aetna, now control physicians, home care, pharmacies, and pharmacy benefit managers (PBMs). Horizontal hospital consolidation has been pursued for the promise of economies of scale and market power. And vertical consolidation was spurred by the rise of managed care and its value-based progeny, particularly as private insurance companies have assumed a growing role in publicly financed health programs. As managed care shifted financial risk to physicians and other providers of care, the financial and technological burdens pushed them to consolidate into larger conglomerates.
I think that the sentence that I have bolded in the last paragraph is primarily a veiled reference to the Medicare Advantage programs. Twenty years ago, I saw Medicare Advantage as a path back to the early virtuous days of capitation and HMOs before those processes were abused and ultimately abandoned because they became a mechanism for profit-oriented entities to deny care.
The transformation of consolidation and vertical integration that Starr predicted has been justified as offering benefits in cost and patient convenience that have rarely been realized. What it has done is to produce billions, probably trillions, of profit at the expense of quality for patients and job-doability for providers. I continue “bolding” points that stand out for me as she continues:
Drawing on Starr’s iconic conception, I offer an updated definition of corporatization that reflects the trends over the past 40 years. The term “corporatization” now refers to the general trend throughout the health care industry toward higher levels of integrated control by consolidated profit-seeking enterprises.
Two key elements of this definition are worth highlighting. First is the elevation of profit generation as the primary goal of the health care enterprise. Embedded in the term “corporatization” is the concept of shareholder primacy, advanced by neoliberal economists, that the primary duty of the corporation is to maximize shareholder profits. Shareholder primacy subordinates the interests of other stakeholders, such as patients, the health care workforce, or the community…Yet even nonprofit hospitals can become corporatized as they grow in size and organizational scale. Most geographic areas are dominated by large health systems comprising multiple hospitals, physicians, and outpatient clinics, insurance divisions, subsidiaries focused on revenue-cycle management (tracking and managing revenue from patient care, from scheduling, coding, and billing to collecting payment), and for-profit investment funds. Despite their nonprofit status, once possessed of market power, these entities can command substantial profits, which may become a self-perpetuating reward. Thus, powerful nonprofit health systems may come to prioritize revenue over patient and community welfare, evidenced by inflated prices, insurance network exclusions, medical debt–collection actions against patients, facility closures in low-income areas, and cuts to staffing levels and pay.
My primary concern as the CEO of Harvard Vanguard and its parent, Atrius Health, was the search for ways our relatively small practice could survive and pursue the Triple Aim while improving the professional lives of our providers in a market dominated by the consolidation the Mass General and the Brigham plus their affiliated hospitals and outpatient services and programs. Like their counterparts in for-profit systems, their CEO and corporate officers, and the CEOs and corporate officers in other “nonprofit” systems across the nation draw “market-driven” salaries of seven digits, and some even eight digits, on par with or not far below the salaries of their “for-profit” counterparts. Indeed, there is “nonprofit corporatization.” She continues:
The second key element of corporatization is consolidation. The U.S. health care system has experienced vast horizontal and vertical consolidation of ownership and control from individual firms in single markets to conglomerate enterprises that span multiple markets. Consolidation both increases the size of the firm and relocates the decision-making power from the local producers of goods and services to the officers and investors of the corporate parent. Conglomerates’ market dominance, diversification across platforms, and change in locus of control insulate them from reputational or market discipline. The sheer size of conglomerate health entities makes them systemically critical and “too big to fail” — meaning that politicians and governments will step in rather than allow the system to falter…
…Large companies prioritizing profits over patients have come to dominate the health care system while amassing political power and dodging accountability. The centralization of health care governance away from locales reduces hospitals’ commitment to their communities, particularly low-income patients and workers, which enables the closure of less-profitable facilities or services in poor or rural areas.
You might remember my recent discussion of the closure of obstetrical and pediatric services of many rural hospitals in New Hampshire and other rural states. The other huge impact is on the work-life and professional satisfaction of care professionals.
I should clarify that, fundamentally, it is the delivery of care from the profit-driven systems that most concerns me. I see some benefit to the for-profit businesses that develop products like medications and medical devices used by delivery systems. In these aspects of healthcare, profits are often excessive, but there are underutilized regulatory opportunities to prevent predatory pricing. The upside is that if widely distributed and properly utilized, new drugs and devices could lower the cost of care and advance relief from cripling and fatal diseases.
Her next point is the most significant downside of the corporatization of care for medical professionals.
Corporate control over medical practices and the drive for profit have undermined many clinicians’ professionalism, autonomy, trust, and morale.
Following her indictments, she has some suggestions:
Confronting corporatization may require a fundamental reorientation of the industrial organization of the health system. ..Furthermore, rules for governance and ownership of health care entities might be revisited to require, for example, higher standards for nonprofit tax exemption, clinical and community representation on governing boards, fiduciary duties beyond shareholder primacy, or increased parent-company or investor liability for operational choices that harm patients or the community’s access to care.
But, the realities of the moments may make change easier to advocate than to actualize:
The political appetite for such reforms may currently be at a nadir, but public satisfaction with the health system is similarly low. Future health policy efforts must confront the fundamental question of whom our health care system is meant to serve: corporate giants or the members of our society as a whole.
I am eagerly awaiting the next installment in the series. I hope that you will take the opportunity to read these important essays for yourself.
Summertime, Finally
We have had a week of pretty nice weather. The local weatherman has declared that “Summer is in full swing.” For my birthday, family came from California, New Mexico, Georgia, Florida, and Maine. All my children and grandchildren were here, along with both of my sisters and their husbands. All but one family of travelers either had a cancelled flight, hours and hours of delay, or lost baggage. One traveler had all of those miseries and finally settled on a reroute to Providence, Rhode Island, when there was no open seat to Manchester or Boston for several days after his connecting flight was canceled, and he spent a sleepless night in the Baltimore airport. I remember when air travel was pretty special and was more exciting than frustrating. Now it is more like Russian roulette or a game of chance.
Once here, everyone had fun. We were joined for my birthday celebration last Saturday afternoon by local friends and other friends from Massachusetts. I was delivered into my ninth decade by much love and kindness.
The best birthday gift was time with my grandchildren. My two California grandsons enjoyed fishing, swimming, kayaking, wake surfing, and sailing. My toddler grandson’s antics were a constant source of entertainment. Today’s header is a shot of my oldest grandson and me enjoying a gentle breeze coming in from a sail across the lake and back. Yes, we do have a huge inflatable loon tethered off our swim platform. I hope that your Fourth was great despite Trump’s signing of the OBBB, and that this weekend will be another pleasant summer interlude for you.
Be well,
Gene
