The People's Perspective on Medicine

Show 1114: How Health Care Became Big Business (Archive)

In this interview originally broadcast March 17, 2018, learn how the business of medicine fails to help doctors take care of patients. What is driving the high prices, and what can we do about it?
Dr. Elisabeth Rosenthal, author of An American Sickness
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How Health Care Became Big Business (Archive)

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The American health care system is a $3 trillion mess. Although it has significant technological sophistication, this big business doesn’t seem consistently able to get appropriate treatments to the patients who need them. Millions of people have no insurance, or the insurance they have doesn’t cover the care they need. Increasing premiums and unexpected bills can put families under great economic pressure or even send them into bankruptcy.

Medicine as Big Business:

We look at the business of medicine and how it evolved. Health care was once considered a nonprofit industry. How did profit come to dominate it so thoroughly? Now, some cancer centers may charge nearly half a million dollars for a new treatment. Few individuals can afford that, and eventually insurance companies will find it challenging to pay. Is there anything that can be done to change this situation?

An American Sickness:

Dr. Elisabeth Rosenthal has examined the conditions that culminated in our current health care system. She has also looked at the consequences for American health. You’ll definitely want to hear about the rules that the dysfunctional economic system of health care uses.

In addition to analysis, she offers suggestions for both individual and collective action to turn health care around. How can you make sense of your hospital bills? What can you do to reduce the chance of an unexpected out-of-network charge? Learn what political action could take health care back from big business.

This Week’s Guest:

Elisabeth Rosenthal, MD, is editor in chief of Kaiser Health News, an independent newsroom focusing on health and health policy journalism. Before that, Dr. Rosenthal earned her medical degree from Harvard Medical School and practiced as an emergency physician. She spent twenty-two years as a reporter, correspondent and senior writer at The New York Times.

Her book, out in paperback, is An American Sickness: How Health Care Became Big Business and How You Can Take It Back.

The photo of Dr. Rosenthal is by Nina Subin.

Listen to the Podcast:

The podcast of this program will be available the Monday after the broadcast date. The show can be streamed online from this site and podcasts can be downloaded for free. CDs may be purchased at any time after broadcast for $9.99.

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About the Author
Terry Graedon, PhD, is a medical anthropologist and co-host of The People’s Pharmacy radio show, co-author of The People’s Pharmacy syndicated newspaper columns and numerous books, and co-founder of The People’s Pharmacy website. Terry taught in the Duke University School of Nursing and was an adjunct assistant professor in the Department of Anthropology. She is a Fellow of the Society of Applied Anthropology. Terry is one of the country's leading authorities on the science behind folk remedies. .
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The fee for service (productivity) model leads to provider burn out, lower level of care and shortage of providers, especially in the low-procedural fields like primary care, psychiatry and neurology.

Stop all TV advertising, the power of suggestion is too influential to the general public creating a hypochondriac society which then feeds off of the pharmaceuticals. It’s a sick cycle in our society.

Why do we need to get a doctors permission slip for whatever meds anyways? Free people need only a consult w/ an advisor or do their own detailed research. Internet nowadays allows for some excellent resources. Global source of whatever you need or desire for your own self-determined treatment plans. THIS is what would get the price down, true competition. Doctors would be useful consultants, and totally bypassed if not needed by the client. Much like a good haircut, you can trim your own hair pretty well if you are aware of the cowlicks, or if it’s going to be too tricky, you select to go to a professional haircutter.

Before we add medical care for everyone, there are steps that need to be taken. I live in Phoenix and Dallas. Just to get an appt with a Dr is a good month out. A specialist is 3 to 6 months. If we have free care for everyone, the wait would be a lot longer. Enrollments in medical schools are down. I think we need more medical schools such as one in every state, paid by the Govt. I agree that their tuition should be at a lower rate. If something like this isn’t in place before free medical care, it will be very. chaotic!

The medical system has been broken for years as has our food supply and insurance. It is all about money and greed.

Medical education, under the pharmaceutical industry, learns to treat symptoms not the problem. This does not create good health.

We are what we eat. Good Food needs to be our medicine –not synthesized drugs that are unnatural in our system, cause more problems and often allow the original problem to continue. We have lost the meaning of good health.

Our food needs to come from sustainable organic farming. Toxic pesticides have no place in food. What can kill insects can kill birds, can eventually kill us and kills the soil.

Our health is our own responsibility. A focus on educating doctors and all of us on good nutrition and supplying good food would do much to improve health and reduce medical costs.

Single payer healthcare including alternative medicine (the real traditional medicine) would lift our economic, health, and survival position in the world. We have lost the meaning of care.

People with serious medical issues need the focus on their healing, not the worry of going into debt. Insurance seems to exist to pay insurance people and to say No to medical issues.

We can make a difference one by one by educating ourselves (thank you People’s Pharmacy), by how and what we eat, and where possible, growing our own food.
If we do this we will be able to afford pharmaceutical drugs that provide necessary and amazing healing for more limited conditions. We will avoid unnecessary hospitalization and insurance might have to lower their fees and return to the more humble reason for their existence: that no one will lose their shirt over a ridiculously high medical cost.

My suggestions: 1. Introduce a universal, gov’t sourced single-payer health care system with option to supplement with private insurers. 2. Instead of “fee-for-service, Doctors shall be salaried. 3. Cost for attending med. school shall be gov’t paid in exchange for practicing where needed for 3-5 yrs. 4. Allow gov’t to negotiate drug prices. 5. Disallow TV drug ads. Doing all this “may” bring us somewhat in line with what the rest of the world is paying for health care.

We really appreciate the sage words of your show and are glad that our local public radio station has picked up your show again. Today’s show is one that every elected representative should have to listen to. As we read through the other comments we wanted to credit them, but then we realized we have to credit everyone commenting here. Healthcare and Pharma are corrupt beyond what most of us could ever conceive. We are both in our 70’s and have seen a lot. Like Allie, we have a similar problem, likely we have the same provider and closely examining their billing, we’ve found they are frequently double billing. In a billing we are currently disputing; First, they billed at their unreal rates what appears to be legitimate, but then they submit a second billing using a code 99213, and a code 99213-15, and then another of 99213-25. All of the subsequent billings using a variation of the 99213 code are “FRAUDULENT” as they are a billing for an office visit of short duration for a minimal service provided and which Medicare rejected saying that they were already paid for the use of the office/facilities and services under another claim on the same day. We cannot encourage you enough to challenge corruption in the billing, but here in Wisconsin you have to notify the provider that you are challenging the billing and we recommend you do so in writing otherwise they can and will send it to collection and you will have another bunch of “crooks” to deal with. This corruption includes not only Pharma, Healthcare, but it is embedded all they way into State and Federal government and while we would like to see a real “single payer system” or a “medicare for all” we do not see a lot changing until the country is at the step of total collapse as we were in 2001 with banking and insurance. We cannot any longer continue to say we are too poor to pay attention, we must pay attention and get out to vote to end the current corruption.

Your show #1114 (re-run today, 7/6/19) was especially poignant to one who has been involved in American healthcare since graduating medical school in 1968. I have observed healthcare delivery from the perspectives of orderly in a community hospital (when a semi-private room cost the patient $15/day), medical student, pediatric house officer, US Army healthcare delivery, private practice, specialty consulting practice, healthcare in four teaching medical centers, healthcare from the pharmaceutical industry perspective and from the perspectives of a patient whose experiences have spanned a fifty-year history of healthcare evolution. I can tell you that this evolution has not been in a positive direction. I can also tell you that at present, healthcare seems driven by billable codes, not necessarily what the patient needs.

When we married in 1962, Blue Cross/Blue Shield insurance cost $15/month and covered everything, including maternity, with no co-pays.

When I was in med school Medicare became the law of the land (1968) – a professor predicted at the time that Medicare would be the beginning of the end of cost-effective healthcare in the US. His premise was that with all the money that would become available, the insurance companies, hospitals and other related-industry executives would begin to drive prices up and skim profits as much as they could get by with. In his words, organized crime would move in and take over.

In 1975, when I was teaching pediatric infectious diseases and seeing referred patients with life-threatening infections, I saw first-hand, bills sent to my patients that contained items I had not ordered – I was able to get them removed by advocating for my patients with the billing department.

Of course, lobbying assistance (sanitized organized crime) was needed to change the laws that restricted excessive price escalation, in other words make what was then criminal “legal.” Example: We were taught that to ask if the patient could afford their health care was unethical. Now it is the first question asked when one goes to any healthcare delivery facility.

When I joined the drug industry in 1973, the CEO of Parke-Davis made a salary of $169,000, and there were no bonus plans or stock options available to inflate his compensation package. I need not remind the reader that CEO’s now receive compensation packages in excess of $20,000,000, and that is a conservative figure! The most amazing part was that the healthcare industry was thriving at a time when it was noteworthy when the first dug-cost (retail price!) exceeded $1 per pill! Now single doses of single “drugs” can be in the $500,000 range!

How things have changed, and NOT for the better! The basic problem seems to be that we have a Congress that no longer works for their constituency, but rather for the various aspects of the healthcare industry that skims profit from several levels, profits that offer no value to the quality of healthcare, while depriving the system of the funds needed to deliver high-quality care. Show #1114 advised patients of ways they could advocate for themselves. So long as that is the proposed solution, we will continue to lose out to the vested industry lobbyists. It is time for a peoples’ revolution that would return Congress to its original purpose of representing its constituency.

It is no mystery why we find ourselves where we are. How to fix a system that has become so completely corrupted with money and diversion of congressional responsibility is beyond my expertise, and not likely to happen within my lifetime. Maybe The Peoples’ Pharmacy and other peoples’ advocates can apply pressure to get the attention of concerned Congress-people and start the ball rolling toward a peoples’ solution!

I am a great partisan on behalf of your program. Almost weekly I find myself encouraging someone to listen. This week I find myself disappointed. Dr. Rosenthal seems to be grinding a political grist. She is a partisan of a different grate.

Rosenthal’s commentary is almost free from statistical support but rich in anecdotes. The exception seems to be a 50% billing error rate she attributes to hospitals– I’d like to know what source she neglected to cite. She also is selective in her statement of facts. Middle-class Canadians (like truck drivers) pay 52% of income in taxes for services including the health care she touts and wait patiently until the scarcity of specialists can treat them. In the UK despite having free public health care, 11% of all Brits pay for private health coverage too. That says something about the dissatisfaction of the British public with the single payer option. Some public health care systems focus on preventative care, some on clinics (like the Russian system). That she was treated somewhere for a broken bone in an emergency room at a reasonable cost doesn’t surprise me but it doesn’t tell the whole story either. She makes no mention of the costs of drug development, testing and regulation in the pricing of American drugs that other countries then can exclude from public pricing. There was no mention of how the ACA bargained away competition in Health insurance (there are only three merged megaliths left in the market) in exchange for massive regulation.

I am indifferent to Rosenthal’s political ambitions, but I do hope that your fine program with avoid such partisan monologs or offer a more balanced discussion of the topic.

This American and my husband both support a single payer system and price transparency!

I am an 80 year-old woman. I have peripheral neuropathy, IBS, osteo arthritis, fibromyalgia, chronic back pain, and other pain in my legs that MRI tests fail to label but sometimes they collapse, and I’m on the floor! Each day I hope I’ll die…(today please). I’ve been in a deep depression for over three years and finally decided that I’m not going to die so I must get psychriatic help. The one psychiatrist near me won’t accept new patients if they are taking Ambien. I am. I’d thought people chose medicine to help people because they had love and compassion for their brothers and sisters in this lifetime here on earth. Well, that shows how much I know!

I really enjoyed this presentation and reserved Dr Rosenthal’s book through my library. It certainly seems like our chosen leaders are, and have been, “spinning their wheels” on these issues for many years.

This is cost-effectiveness from a RURAL physician’s point of view while promoting:

1) Community-driven Direct Primary Care (DPC) with support for 24 x 7 Doctor-Patient relationships versus current Top Down Profiteering. Activate DPC as is currently in ACA law NOW with “wrap around” catastrophic care coverage by MUTUAL Health Insurance Company using progressively subsidized Health Savings Accounts (HSA’s) from birth + HSA Banks with tax free in and fax free out rational investment for a) fully vested HSA’s.; b) education funds for achieving the maxim: “Every person is a Community Health Worker; c) fully vested pension fund supplement to Social Security with incentives for fitness and wellness.

2) Community-driven Entrepreneurship with off the www and off THE GRID HIT / Energy production & distribution, sustainable Switch Grass conversion into levulinic acid biofuel working in low emission/high efficiency Engine Generator +/- Biodigestor +/- pyrolysis unit +/- E-BC (Electrobiocommodity) Unit to produce biogas, Biochar (with net CO2 sequestration!), Electrocommodities;, coupled with EMR-EHR-HIE-CDSS + COMMUNITY catalyzed e-note/book, HIT, tool, vehicle, shoe, clothes, DME/OTC, eco-friendly concrete and housing, gardening (with raised bed eco-friendly construction), pharmaceutical, marketing interventions for Comparative Effectiveness Trials in Primary Care;

3) Community education of Clinical Medical Assistant, Community Health Worker, Comparative Effectiveness Facilitator, Psychiatric Social Worker, Clinic Tech, Mesh-networking Specialist + cost-effectively trained primary care doctors FOR multilingual self- family- community-care using Team + Goals + Biopsychosocial Model + Pathophysiology (e.g., oxidative stress) + Cost-effectiveness + Efficacious Intervention + Outcome Analysis + on-time Feedback & Surveilance (for epidemic) Foci.

I have been in health care at a large medical center for 40 years. I am appalled at what I see going on. Corruption is rampant and it is obvious to the older employees. Hospitals have so much money they don’t know what to do with it. I just want out.

Single-payer is the only way out of this mess but I don’t think it will happen.

I am a 77years young Afro American that went to Wake Med emergency room with a laceration. I received a cat scan, some antiseptic and a large bandaid. Two days later I was back at the emergency room because my laceration hadn’t stopped bleeding. I informed the doctor that I was on one aspirin a day and that may have something to do with the bleeding. They gave me another bandage and said keep it on for three days. The bill was $6000 plus for the first visit and $700 plus for the second.

One small observation on the topic, re “how the heck do you read the hospital bill?” For decades, the insurance company’s EOB (explanation of benefits) was a readable, compact, indispensable tool for figuring out medical bills. Suddenly, it went away, at least, my insurer, Geisinger , replaced it with an utterly stupid, useless four or five page unreadable mess, that leaves off the date of the document itself, and refuses to show you account numbers for the bills from doctors and hospitals, so that it is almost impossible to figure out which are legitimate bills. There was a time when even that was not a big problem, but then a local mega-corporation hospital outfit that has bought up every physician practice in its sight, started billing us for things that it had no right to bill us for under the insurance contract we had. Illegal, you suspect? NO. The feds have allowed as to how it is perfectly legal to do that. According to Geisinger, it is also the feds who wanted them to change their functional two page EOBs into useless five page piles of dreck that have no earthly use. We dropped all the doctors who were owned by LVH and went over to another hospital, St. Luke’s, that at least bills honestly, even tho it is also building a far-flung empire of hospitals and practices.

After what I just read, it is so sad for patients to have to go through this. I am 75 years old and, by God’s grace, I don’t have to go through all this. A long time ago, I was informed by a “health-nut” that “Death Begins in the Colon”. I firmly believe that “health-nut” was right. That is why I use my “Fountain (Syringe) of Youth” daily to keep my colon clean. I do not “poison” my body with a multitude of pills and then have to worry about their side-effects, which could possibly lead to death. Instead I use 2 quarts of warm water in a fountain syringe in order for me to stay as young and healthy as I can be. A healthy and cleaned-out body has so many benefits as one can imagine. The “Fountain (Syringe) of Youth” definitely works for me and it may just work for you.

Why it’s even tlerated here to publish snake oil products ???

We need a class action suit to be brought against pharmaceuticals, private health insurance and all those in the medical industry that aid and abet the outrageous profiteering that takes place on a daily basis in the USA. Health insurance and the cost of drugs have been on the rise for decades and our Congress is incapable of fixing it.

The healthcare industry is bloated with people who do not actually provide care or have patient contact. To get costs down, we have to consider the entire spectrum from development & manufacture to the delivery of the care. Right now, to save costs, patients are asked to do with less and direct care providers are asked to do more in the same amount of time. Meanwhile executives get bonuses on the pain and suffering of the consumers. Thank you capitalism.

Wow, wish I had heard this before my surgery. Very informative

Dr. Elisabeth Rosenthal shared that there was a generic drug being tested to benefit diabetes. Please tell me the name of the drug.

We don’t know for sure. It may be salsalate.

I am glad I caught the show today, as I have been trying to find a way to dispute charges from my local health care clinic. I get a yearly STD test at Planned Parenthood, where the costs are covered, but this year I moved and asked my physician at the local clinic. When I went to schedule my tests, I asked if there was any way to find out if my insurance was going to cover the costs, and all they said was that they take most insurances, and since I had Blue Cross Blue Shield it should be covered. I later received a bill of $1,181 for the office visit and the various tests. I was never advised of this additional cost, and had I known, I would have opted against the test. This amount is a significant percentage of my income for an elective medical procedure that I would have opted out of had I known the extreme cost. I will be renting Ms. Rosenthal’s book, but any advice would be much appreciated. Thanks for shining light on the topic and for all of your insightful conversations. I appreciate the show and enjoy learning from you.



I believe we should have a two-tier medical care system, free to every citizen of this country.

The first tier would be the existing system with insurance and independent medical providers.

The second tier would be free to all citizens, staffed by the same method as the old draft and volunteer system. The government would draft and train for all positions required, through doctors, being supplemented by volunteers of all positions. Wages for all would be commensurate with their duties, however no goldbricking, only pay for performance, with minimal wage difference from top to bottom. Just as in the armed service, all positions would start at the bottom with minimal wage, third shift, no exceptions. In this system, you may work your way from entry to the top physician with the government supplying your education as qualified, as desired, as required. Each entry into a new level of service would put the individual at any slot required by the system, probably at a third-shift position. I believe this would build camaraderie among all our citizens and eventually supplant the tired old system owned by the millionaires and for the millionaires.

Fabulous speaker and probably the most informative and riveting guest and subject I have heard on the People’s Pharmacy – and I am a devoted listener. WOW! Please…more.

Great show. Thanks so much.
See also: Brown, E. Richard, Rockefeller Medicine Men: Medicine and Capitalism in America, ISBN: 0520038177 9780520038172.
This book is as relevant today (2015) as it was in 1979. The players are still the same: foundations, corporations, and government. If anything the political-economic process of healthcare reform is even more complex today.
“This book explains how controlled the medicine industry is, how it became that way, and why America has the highest costs in the world for less than adequate medical care.” — Reader’s Comment
“Historical epidemiological evidence overwhelmingly supports the conclusion that medical science has played a relatively small role in reducing morbidity and mortality.” (p. 219)
“Medical science rescued the medical profession, in particular the practitioners, from the widespread lack of confidence in their effectiveness.” (p. 77)
Capitalists and corporate managers “embraced scientific medicine as an ideological weapon in their struggle to formulate a new culture appropriate to and supportive of industrial capitalism.” (p. 10)
“For members of the corporate class, technological medicine has legitimized their economic and political dominance by diverting attention from the consequences of their control — that is, from such ‘social costs’ as class inequalities, domination based on race or sex, occupational hazards, and environmental degradation. For the medical profession, the knowledge generated by medical science and the techniques of medical technology provided the basis for physicians’ claims to a monopoly of authority over the practice of medicine.” (p. 239)
“As medical science won public and professional credibility, it also solved the second and fundamentally more serious problem facing the profession in the nineteenth century: competition. . . . The overall impact of scientific medicine within the profession was to legitimize control by elite practitioners and medical school faculty.” (p. 80)
“Health care could be more effective in improving health if its research and action were directed at environmental conditions in about the same proportion that those conditions contribute to sickness and death.” (p. 240)
“If you have read and ‘got’ anything by Noam Chomsky, or Howard Zinn, you will ‘get’ this book.
“After being award an MBA from Stanford (hence, I can confidently say I very well understand the ‘business’ of medicine), and practicing medicine for 20 years in both the public and private sector, I have come to the conclusion that Mr. Brown’s thesis is on the money. — Reader’s Comment

Terry and Joe, this was one of your best shows EVER. I would like to put a stellar review of it on iTunes, but I don’t know how to navigate iTunes. When I go to it, I am overwhelmed by loud pictures of Hip-Hop artists. Are you able to put a link on your site that takes us directly to the part of iTunes where we can review your show? I was particularly struck by Dr. Rosenthal’s discussion of how, if the current medical model were in place 50 years ago, we would not currently have had an inexpensive polio vaccine: instead we would have iron lungs in 6 colors with iPhone plug-ins! And the fact that Pharma has surpassed Defense as the strongest lobbying presence in Washington is sobering. I plan to buy multiple copies of the CD of this show and give it to everyone I know with a family member in the hospital. Thank you, thank you, thank you. Warm regards from Virginia.

After moving from the UK to the USA, it’s depressing to see how out of control the healthcare costs are over here, not to mention how we’ve allowed companies to pay off the politicans to push their industry into one big monopoly. The products of someone’s labor may not be a guaranteed right, but the free market is, which includes buying across state borders.

I have to consider myself very fortunate to reside in the United Kingdom where we have the NHS. The National Health Service is excellent despite the strain it is undergoing. No fear to have to call 111 for advice or 999 for emergency doctor or ambulance and at no charge. At some point, increased taxation may be necessary, but this institution is to be cherished. We have free doctor consultations and prescriptions for the young and retired and for some other catagories. Otherwise, there is a charge for prescriptions.

There is the optional private insurance sector if the NHS waiting list for hospital treatment is considered to be too long, and one is in discomfort. I find that primary health care is covered fairly quickly, approximately two weeks under the NHS. The option for private care can follow if desired.

As a retired physician, Ex-RWJF fellow, student of our healthcare system compared to what I learned about English healthcare during 4 years living in Cambridge, England while being a Pediatrician in the USAF, and traveling to other EU countries and Russia, I am pleased to see Dr. Rosenthal and others writing about our expensive and struggling healthcare system. We DO NEED many positive changes.

I work as a biomedical equipment technician and wonder which efforts contributed more to the medical industrial complex; the the Ralph Nader related efforts or the fact that the military has a biomed program or that there are healthcare aspects to the military Nuclear efforts. Curiously the VA hospital system does not seem to play a big role in this development.

I have said for years it is just a money making business. I have diabetis 2 , and I have to go to dr every 6 months or I don,t get my medicine. Now this is hurtful for seniors on s. security . Having to drive in there and then set for hours if terrible. Wish there was something I could do.

Yes my premium for HEALTH OPTIONS supplemental ins. from AARP keeps going up, first 200 isn’t covered, most docs here don’t take insurance. What’s wrong with this picture? we pay health insurance, medicare, etc. and still have to pay out of pocket for dental work as we age which is super expensive. Crazy. This country needs an attitude adjustment!! Why pay for insurance when all the doctors want is cash?

We have about 5-6% of the world’s population and about 50% of world wide medical costs. The system is totally rigged in favor of Big Pharma, hospitals and doctors and insurance companies. As consumers, we are paying for CEO multi-million dollar salaries and bonuses…and all this to be part of a broken system that in the majority of cases can’t even fix your disease or affliction.

The cost of my health insurance that I pay out of pocket is putting my financial future at risk. I pay $887. per month for health insurance for my daughter and myself (up from $660 per month in 2017). Unfortunately, the coverage is minimal with a high deductible. I am diverting $$ I was putting toward my retirement now to pay for monthly health insurance coverage. Plus, I need to have some extensive dental work done to my teeth. I can’t afford it. I have to choose between repairing my teeth and keeping my health insurance. Being 50 years old I am worried about not fixing my teeth but also forgoing health insurance to pay for it.

I feel I do not have any options. When I figure out how much I pay in taxes and add in the amount I pay out of pocket for health insurance. I pay more than 42%. Single payer insurance that covers everyone sounds like a good idea to me. At least it might cover a procedure that I have done. I had a minor surgical procedure a few years ago that was ordered by a doctor. My insurance covered $0.00 because I hadn’t met my deductible. I had to pay $3500 additional to cover the surgical center and doctors.

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