HCM 12 PDF - Prospects for the U.S. Health Care System

CHAPTER 12 PROSPECTS FOR THE U.S. HEALTH CARE SYSTEM LEARNING OBJECTIVES After completing this chapter, students will be able to: Discuss the status of the Affordable Care Act (ACA) and changes since the end of the Obama administration. Describe trends in the role of the private and public...

CHAPTER 12 PROSPECTS FOR THE U.S. HEALTH CARE SYSTEM LEARNING OBJECTIVES After completing this chapter, students will be able to: Discuss the status of the Affordable Care Act (ACA) and changes since the end of the Obama administration. Describe trends in the role of the private and public sectors in the U.S. health care system. Describe trends in consolidation in health care. Describe trends in use of technological advances in health care and their impacts. CURRENT STATE OF U.S. HEALTH CARE SYSTEM With enactment of the Patient Protection and ACA of 2010 under President Obama, we saw comprehensive reform in the U.S. health care system for the first time. Yet, consistent with the American context discussed in Chapter 8, Debates That Have Structured Health Care System Change, the overhaul of the health care system maintained the mixed public and private system. All previous private-sector participants in health care delivery remained, even though governmental involvement was expanded through mandates on in- dividuals; employers; health insurance companies; health care providers, including physicians, hospitals, and long-term care facilities; and pharmaceu- tical companies. An example of the reach of the bill’s mandates is the overall approach to expanding access to health care coverage: Require most U.S. citizens and legal residents to have health in- surance. Create state-based American Health Benefit Exchanges through which individuals can purchase coverage, with premium and cost sharing credits available to individuals/families with in- come between 133–400% of the federal poverty level (the poverty level is $18,310 for a family of three in 2009) and create separate Exchanges through which small businesses can purchase coverage. Require employers to pay penalties for employees who receive tax credits for health insurance through an Exchange, with exceptions 415 416 II: The Changing U.S. Health Care System for small employers. Impose new regulations on health plans in the Exchanges and in the individual and small group markets. Expand Medicaid to 133% of the federal poverty level. (Kaiser Family Foundation, 2013, para. 2) In addition, there was an expansion of the public programs—Medicaid and the Chil- dren’s Health Insurance Program (CHIP)—under the ACA, as well as creation of state- based health insurance exchanges—American Health Benefit Exchanges and Small Busi- ness Health Options Program (SHOP) Exchanges—that were to be “administered by a government agency or nonprofit organization and (through) which individuals and small businesses with up to 100 employees could purchase qualified coverage” (Kaiser Family Foundation, 2013, para. 17). Therefore, we can say that under the original ACA, public-sector involvement in the health care delivery system was substantial, although the private sector was very involved as well. Zigzag Theory of U.S. Health Care Reform However, as discussed in Chapter 11, passage of the ACA was not the end of the story. The drama of health care reform continued, following a familiar zigzag pattern. Increased public-sector involvement in the health care system under the ACA brought about a re- action to turn back or moderate this outcome. Policy took a zig toward increased public involvement with the ACA and then a zag back toward asserting more private-sector engagement. Beginning in the period after the ACA was enacted and through the Trump administration that followed, the rhetoric of Americans who wished to limit government was perhaps more explicit and strident than at any time in memory, and antigovernment sentiment appeared more widespread and powerful. The rise of the Tea Party as the most influential representative of conservative America was a hallmark of this period. The mis- sion and core principles of the Tea Party movement, in its own words, are: At its root the American Dream is about freedom. Freedom to work hard and the freedom to keep the fruits of your labor to use as you see fit without harming others and without hindering their freedom. Very simply, three guiding principles give rise to the freedom necessary to pursue and live the American Dream (Tea Party Patriots, 2020, para. 1): Personal Freedom Economic Freedom Debt-Free Future The ideas of the Tea Party Patriots were not new. Indeed, they arose from a concerted effort since the 1980s of a few extremely wealthy families—including the Koch brothers, the Coors brewing family, the DeVos family that founded Amway, and others—to change the direction of American policy, including health policy: They challenged the widely accepted post-World War II consensus that an ac- tivist government was a force for public good. Instead they argued for “limited government,” drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry, particularly in the environmental arena. (Mayer, 2016, p. 7) Republican politicians and the Republican Party were their means to success through the large political donations they received from these affluent donors.  12: Prospects for the U.S. Health Care System 417 Thus, it is not surprising that, after the ACA was passed and for the remainder of the Obama administration, Republicans in Congress repeatedly attempted to repeal the legisla- tion. They explained themselves in the “Pledge” on Health Care: “Because the new health care law kills jobs, raises taxes, and increases the cost of health care, we will immediately take action to repeal this law” (Kaiser Family Foundation, 2010, para. 11). This assertion was without basis in fact, but was part of the “calculus of deceit” practiced by radical oppo- nents of the ACA. Mayer (2016) describes a campaign developed by the Koch brothers and their allies, which illustrates this practice: Rather than respectfully debating Obama’s health care plan as a policy issue, the Kochs and their allied donors poured cash into a dark-money group called the Center to Protect Patient Rights, which mounted a guerrilla war of fear- mongering and vitriol. Television ads sponsored by the group featured the false claims that Obama’s plan was “a government takeover” of health care, which PolitiFact named “the Lie of the Year” in 2010. Meanwhile, a spinoff of Amer- icans for Prosperity organized anti-Obamacare rallies at which protesters un- furled banners depicting corpses from Dachau, implying that Obama’s policies would result in mass murder. (Mayer, 2016, p. xx) When repeal of the ACA was unsuccessful, opponents found ways to weaken the legis- lation in the remaining years of the Obama administration. Republicans in Congress found bipartisan support to delay important provisions of the ACA, including the tax on generous health plans and a separate tax on health insurance providers. The excise tax on manufactur- ers of medical devices, which took effect in 2013, was suspended through 2017. The White House and many economists defended the “Cadillac tax” on high-cost employer-sponsored health plans as a way to reduce health costs and make the health care system more efficient (Herszenhorn & Pear, 2015). The Commonwealth Fund explains, A last-minute deal in Congress delayed or suspended some of the taxes includ- ed in the ACA—one on medical devices, one on health insurers, and one on high-cost health plans. Estimated cost: $35.8 billion in lost revenue. To be clear, most of the ACA’s funding comes from general revenue, and so isn’t directly impacted by these taxes. (Blumenthal & Squires, 2015, para. 5) In addition, many states rejected the Medicaid expansion, which is a feature of the ACA whereby the income eligibility criteria are expanded to include more people and the costs of adding health care for a greater number of people is paid by the federal government at first. This was a blow for the goal of attaining full health care coverage. Another disappointment concerning the ACA was the performance of the Consumer Operated and Oriented Plan Program (CO-OP). “The Affordable Care Act calls for the establishment of the Consumer Operated and Oriented Plan (CO-OP) Program, which will foster the creation of qualified nonprofit health insurance issuers to offer competitive health plans in the individual and small group markets” (Centers for Medicare & Medicaid Services [CMS], 2015, para. 1). A Commonwealth Fund report discussed the demise of the CO-OP program: Underfunding for risk corridor programs designed to stabilize premiums, un- manageable deadlines, restrictions on marketing, the difficulty of setting up brand 418 II: The Changing U.S. Health Care System new insurance companies—there are many culprits behind the collapse of 12 of the 23 ACA-funded CO-OPs (Consumer Operated and Oriented Plans). But evi- dence that the folding CO-OPs are a harbinger of a broader collapse of the ACA exchanges remains scant. Rather, the CO-OPs’ struggles have highlighted the sub- stantial barriers to injecting competition into insurance markets—and how both economics and politics can get in the way. (Blumenthal & Squires, 2015, para. 7) The zag toward strengthening private-sector involvement in the health care system continued, and even accelerated when President Trump took office in January 2017. The 2016 election brought Republican majorities in both houses of Congress and provided Republicans with the opportunity to overturn the ACA. However, the Republican ma- jorities were unable to pass an alternative to the ACA. Instead, executive actions by the president, federal legislation, and legal actions were used during the Trump administra- tion to weaken the ACA and its provisions to increase public involvement in health care. These are described in Chapter 11, along with efforts by President Biden, who took office in 2021, to reverse some of the policies that weakened the ACA. Medicare provides a summary example of the zigzag in U.S. health care reform. After the original Medicare legislation was enacted in 1965, each of the subsequent modifications expanded private-sector participation in the program (Patel & Guterman, 2017). 1965—Medicare was passed to provide health care for people aged 65 years and older. This legislation designated the CMS to administer the Medicare program and pay health care providers directly on a fee-for-service basis. This plan is called tra- ditional or original Medicare, and it has two parts: Part A (hospital insurance) and Part B (other medical insurance including provider services and outpatient care). Prior to this legislation, there were no government health care programs for seniors. 1997—Medicare+Choice (also referred to as Part C and currently called Medicare Ad- vantage [MA]) was passed to develop a managed care option within the Medicare program aimed at lowering its costs. This legislation—the Medicare Balanced Budget Act (BBA) of 1997—created Medicare+Choice as an alternative to traditional Medi- care. Unlike traditional Medicare, CMS provides funds to private companies, which then administer the Medicare+Choice plans. Traditional Medicare (Parts A and B) remained a choice for Medicare-eligible seniors. 2003—The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 (also referred to as Part D) was passed to assist seniors with the rising cost of drug therapies, which were not covered by the Medicare plans at that time. Part D followed the design of Medicare+Choice: CMS provided funds to private com- panies, which then administered the program. 2019—Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors was issued on October 3 to expand the MA Plan (formerly Medicare+Choice), which is contracted to private companies, and make it more attractive than traditional Medicare for Medicare beneficiaries (Lipschutz, 2019). U.S. HEALTH CARE SYSTEM TRENDS The ACA provided a comprehensive framework for health care delivery, but this did not halt change. Because the U.S. health care system remains a decentralized mix of public and private stakeholders—payers, providers, employers, researchers, pharmaceutical and  12: Prospects for the U.S. Health Care System 419 medical equipment suppliers, policy makers, and others—innovation continues in what might be called “creative chaos.” Trends in consolidation, consumerism, technological ad- vancement, and payment reform are among the areas that are changing health care deliv- ery, and they are affecting the system, regardless of the ACA or with its help. Much is being done to improve the quality and efficiency of health care and provide value to patients within and outside the ACA framework. Even if the ACA was overturned, many of its policies would remain, as they represent trends that were underway before passage of the bill and still have much support in all sectors of the health care system. Following is a brief description of major trends in the U.S. health care system at this time. Consolidation in the Health Care System Consolidation has been an ongoing theme, continuing the trend of the past 20 years. As the 2015 Commonwealth Fund report notes, It seemed like every week in 2015 brought news of a mega-merger between two drug companies, hospital systems, or health insurers. This arms race in market size has attracted scrutiny from regulators and calls for greater anti- trust enforcement. Such calls are likely to grow louder in light of new evidence linking high regional private health spending to market concentration, and indications that competition in insurance markets lowers premiums. (Blumen- thal & Squires, 2015, para. 6) This is as true today as in 2015. Consolidation continues to take place across three dimensions: vertical with payers and providers horizontal with the creation of larger systems of providers such as hospitals continuum of care from primary care through postacute care In consolidation, national payer chains dominate, including United, Aetna, and Blue Cross Blue Shield. Also, national health care delivery chains dominate, including Community Health Systems (CHS), HCA Healthcare, and Tenet Healthcare. State- and regional-based organizations are not the dominant players. Federal regulations rather than state regulations are tending to predominate; as a result, the trend is toward nationalization of payers and providers. Big Data and Health Information Access to more and better data, with the ability to manage and analyze it, has and will continue to transform the health care system: Complete, longitudinal electronic health records will allow a previously inconceivable level of data mining, enabling new levels of understanding about how genomics/ biome, environment, and behavior affect health and medical care. Access to data will increase the emphasis on quality reporting and pay for perfor- mance, which will bring about improvements in quality of care, some improvements in costs, and eventually improvements in outcomes. Evaluations of medical procedure effectiveness, and resulting protocols, will contin- ue to improve as a result of new data systems that include machine learning and advanced analytics for system optimization. 420 II: The Changing U.S. Health Care System Prevention and Mental Health Mental health, behavioral health, and physical health have and will continue to be more tightly linked in diagnosis and treatment. There is continuing interest in prevention in order to control health care costs. This trend also links primary care and public health, in order to foster prevention and to diagnose early. The health care systems has and will continue to become more oriented toward promoting health in populations (population health). Cost of Prescription Drugs Under Scrutiny The “correct pricing” of pharmaceuticals will continue to be a big issue in order to control cost, including inpatient care, resulting from, for example, coronary events (e.g., Lipitor) and liver failure (e.g., new hepatitis cures, although expensive, are cheaper than transplants). Hospital Versus Ambulatory Care There will continue to be widespread use of ambulatory, home, and community care in place of inpatient services and expanded use of new communication and monitoring techniques. Medical devices have become more portable and sophisticated, making it possible to treat and monitor chronic conditions outside the hospital. A sig- nificant number of devices including infusion pumps, ventilators and wound care therapies are now being used for home care. Given the growing number of home medical devices, the Food and Drug Administration plans on developing procedures for makers of home-care equipment. Procedures will include post- marketing follow-up and other things that will encourage the safe use of these devices. (American Hospital Association, 2011, para. 3) Consumerism People have historically been their own first line of defense against disease, and “self care” remains most people’s care the majority of the time. Given that much of most people’s health is tied to nonmedical factors and, conversely, control over one’s health may feel syn- onymous with control over one’s body and life, patient empowerment and consumerism have strong appeal. Choosing Complementary Medicine A tremendous amount of out-of-pocket money is spent by Americans each year on com- plementary or alternative medical care, that is, nonallopathic medicine. A growing trend in hospitals is to add complementary medical therapies to their offerings. These include acupuncture, massage therapy, guided imagery for stress reduction, pet therapy, and music/art therapy. The National Center for Complementary and Integrative Health (NCCIH) and the Centers for Disease Control and Prevention (CDC) reported that in 2012, Americans spent: US$14.7 billion out-of-pocket on visits to alternative health providers, including chiro- practors, acupuncturists, and massage therapists. This amount was about 30% of what was spent out-of-pocket for conventional physicians. US$12.8 billion out-of-pocket on natural product supplements. This amount was about one-quarter of what was spent out-of-pocket on prescription drugs (Nahin et al., 2016).  12: Prospects for the U.S. Health Care System 421 Andrews (2011) observed that “As hospitals elbow one another to attract patients, in- creasingly they’re hoping to tap into Americans’ interest in—and willingness to spend money on—complementary and alternative therapies such as acupuncture and massage. … [H]ospitals aren’t blind to the opportunity these therapies present to attract patients and perhaps make some money” (Andrews, 2011, para. 2). One explanation for the rise of complementary and alternative medicine (CAM) is the perceived empowerment and open relationships between consumers and CAM practitioners (Emmerton et al., 2012). Additionally, consumerism can be seen as peo- ple often seek alternatives to conventional medical care after experiences with con- ventional medical care that fall short of meeting their needs and expectations (Sirois & Purc-Stephenson, 2008). Impact of New Technology The pursuit of improved quality and efficiency in the health care system continues to drive application of technological innovations and policy changes. Technological improvements will continue to address cost or cost and quality. Automation is taking hold—starting with eliminating lower-level jobs like phle- botomists and coders while accelerating/supplementing higher-level jobs like RNs and physicians, for example, through computer-assisted diagnosis, computer-as- sisted documentation, and continuous patient assessments. Genomics and proteomics continue to increase the availability of personalized treat- ments and protocols in the short term and begin to revolutionize the approach to medicine and health in general over longer time periods. We will grow what we used to manufacture. This is already happening with knee implants. We will inject stem cells, nanobots, or other biologics to regrow new body parts and replace surgery. Medical devices and drugs will be personalized so that they need to be evaluated like a medical procedure—based on effectiveness of the approach rather than a particular chemical compound or manufactured device. Shorter term new technology and understanding is allowing more “site of service” optimization: hospital → outpatient → home care → telemedicine. Individualized and predictive medicine will be more highly developed. Gene therapy will become more common. Intellectual property reforms around life-saving therapies will be a goal. The goal is: Hospitalization as a Never-Happen Event. Patient Access to Medical Records Through the Health Insurance Portability and Accountability Act (HIPAA) of 1996 and, later, the Health Information Technology for Economic and Clinical Health (HITECH) Act, which was part of the American Recovery and Reinvestment Act of 2009, a patient’s right to view, download, transmit, and otherwise gain access to their medical records was passed into law and promulgated in regulations that followed (e.g., U.S. Department of Health and Human Services [DHHS], 2000, 2017). The impact of these pieces of legislation was imperceptible at first for various reasons, not the least of which were the relatively small amount of health care data in digital form in 1996 and relatively low benefits for providers to share these data at that time. Howev- er, they have the potential to empower patients to control their health care journey and 422 II: The Changing U.S. Health Care System bring their data with them as never before. Additionally, they create the potential for consumer-oriented third parties to assist patients in new ways or provide new insights into their health (or even enable research that was not practical before; Blumenthal & Chopra, 2018; Christensen et al., 2017; Sullivan, 2018). It should be noted that to the extent that devices (e.g., smartphones) empowered with patients’ data qualify as medical devices (as outlined in Chapter 4, Medicines, Devices, and Technology), they would still be subject to regulation as such by the U.S. Food and Drug Administration (FDA). ZIGZAG OR A PRIVATE SYSTEM? In the ninth edition of Jonas’ Introduction to the U.S. Health Care System (Goldsteen et al., 2021), we wrote this section on “Zigzag or a Private System?” In it, we discussed the ten- sion between public and private sectors for dominance of the U.S. health care system and questioned whether the system would continue to “zig” toward the private or take another “zag” back to the public sector. This is what we said: The strong, historical incentives to maintain a mixed health care system have prevented the United States from following our peer countries. All of them have primarily public systems, whereby the government ensures health care for all residents through direct provision of services (e.g., United Kingdom), universal health insurance (e.g., Canada), or a mix of these methods. However, there are signs that the United States may be on the threshold of developing a nonmixed health care delivery enterprise (Pellegrino, 1999). Playing to a strong current of antigovernment sentiment in the United States since the 1980s, conservative stakeholders have pressed toward privatization of public functions. Although antigovernment sentiment among Americans is not uncritical or necessarily a primary motivation (Goldsteen et al., 1997), it has been a useful political device for ideologues to promote a private sector– only agenda. The “framing” of issues in antigovernment terms has succeeded in limiting public-sector involvement in health care, as well as other areas. This “crafted approach” is working to move health care and other public activities away from the mixed enterprise system. We are in an era in which privatization of public-sector functions is wide- spread. There is “privatization creep” in health care as well as other sectors. For example, private companies have been given long-term leases for public roads in Northern Virginia on the Dulles Greenway, in Indiana on the East–West Toll Road, and on a 157-mile highway running east from Chicago to the Ohio border. The idea has been considered in New Jersey, Illinois, Ohio, Texas, and other locales. Commodification of water is occurring throughout the world, including the United States. Many municipalities are looking to private corporations for long- term leasing of water supplies. The transnational private water corporations, including Suez, Vivendi, and Nestlé/Perrier, have annual revenues of over US$1 trillion and have privatized many formerly public water sources. As wa- ter shortages and conflicts increase, water is more and more being transformed from a public good to a privately owned commodity that is sold and traded for profit. It is an increasingly alluring idea to municipalities faced with expensive infrastructure costs.  12: Prospects for the U.S. Health Care System 423 Major functions of the military have been privatized in recent years. There are advocates for privatizing military maintenance and other functions tradi- tionally performed by the military itself. Blackwater USA, by its own statement in 2007, “the most comprehensive professional military, law enforcement, secu- rity, peacekeeping, and stability operations company in the world” (Blackwater USA, 2007, para. 1; since 2009, Xe Services, doing business as Academi), was used heavily in the Iraq War and other military conflicts. A review of privatizing military training by Avant (2005, p. 1) summarizes the current situation: Private military companies (PMCs), performing an array of security tasks for a variety of clients, have proliferated. In pursuing its war on terrorism, the Pentagon is increasingly relying on the services of PMCs, as overseas training programs expand. Although PMCs have long performed covert and unsavory tasks, today’s PMCs are seeking to polish their image as legitimate firms. In the realm of health care delivery, changes to the Medicare program over the years are examples of privatization creep into this originally public plan. This is discussed earlier in the chapter as the zigzag between public and pri- vate control of health care programs. Indeed, the motivation for the Medicare Advantage plans was clearly not fiscal restraint, but the desire to move health care delivery to the private, for-profit sector, as evidenced by its excess cost, as reported by Krugman (2007). A study by the Medicare Payment Advisory Com- mission, an independent federal body that advises Congress on Medicare is- sues, found that the cost of Medicare Advantage was 11% more per beneficiary than traditional Medicare. “According to the Commonwealth Fund, which has a similar estimate of the excess cost, the subsidy to private HMOs cost Medicare $5.4 billion in 2005” (Krugman, 2007, para. 6). It seems likely that the private sector will continue in traditional service areas, such as supply of therapeutics and equipment, and provide new services such as information technology. There is also little doubt that the public sector will continue supporting medical research, health workforce training, and pub- lic health functions such as epidemic control because of their high cost and lack of profitability. At issue is whether the mixed system will prevail in the direct provision of health care—ambulatory, hospital, long-term care, and so forth. The balance between private and public for the delivery of direct services to the general population may be shifting in favor of the private, for-profit sector. Although we could address the problems of quality, equity, and efficien- cy by expanding the highly successful Medicare program to all Americans, we may be moving instead toward a totally integrated delivery system owned by a few large companies, such as Humana, Triad, and UnitedHealth Group, and a small public sector to serve those deemed “unaffordable” by the private-sec- tor companies. Employer-based health insurance, the private health insurance market, and public programs for special groups, such as the poor, elderly, and veterans, would be eliminated. Thus, health care delivery might be integrated and “single payer,” but the provider would be a for-profit corporation rather than a public or nonprofit entity. 424 II: The Changing U.S. Health Care System As a result of the extreme schism between Americans with a strong anti- government orientation and those who desire a strong role for the public sector in health care and other endeavors, we are unable to say how the health care system will change in this regard.... Health policy in the United States is still pulled taut between those who want government to take an active role in as- suring equal rights and opportunities for Americans and those who believe that equalities will occur naturally, with little governmental action, as an offshoot of private enterprise. (Goldsteen et al., 2021, pp. 376–377) MORE PRIVATIZATION IN HEALTH CARE Today, as we complete the 10th edition of Jonas’ Introduction to the U.S. Health Care Sys- tem (2025), we respond to questions we posed the previous edition about privatization and health care in the future. As perhaps should have been apparent to us then, there are different forms of privatization, some more aggressive than others. Here is our view today: Traditionally, health care was a primarily nonprofit sector, with some for-profit orga- nizations, particularly in specialty hospitals, dialysis units, ambulatory surgical centers, and imaging companies. But in an unmistakable turn toward the private sector, the pres- ence of profit-making organizations in the U.S. health care system has been increasing. There are two forms of private investment: public, investor-owned companies that trade on a stock exchange; and private investor-owned organizations not traded on public markets and not subject to the same regulations as public companies. The latter—private equity investors—have been increasing substantially. Their investing methods and strat- egies in health care are described in a report by The Commonwealth Fund (Blumenthal, 2023): There have been two key shifts in recent years. The first is in who’s doing the investing. Instead of physicians or small groups of investors using their own funds, investors now also include firms that manage funds for large groups of wealthy individuals or institutions. Fund managers and their investors may have little knowledge of health care, viewing it as just another market oppor- tunity. The second change relates to how they’re investing. Aggressively pursuing quick profits, some private equity firms are taking out loans, using their newly acquired health care facilities as collateral. The loans are used to pay back in- vestors quickly and handsomely, while the health care organizations carry the debt. Another strategy is to sell the health care organization’s land, facilities, and other capital assets to other investors. The proceeds from the sales generate returns for fund managers and their investors. Health care organizations then rent those assets back from the new owners. A third approach to getting a quick return is to flip the asset — selling the newly purchased health care organization to another buyer, such as a public- ly traded company like CVS or Amazon, for a large multiple of the original price. To attract such a buyer, however, the private equity firm must boost the  12: Prospects for the U.S. Health Care System 425 organization’s profits, which usually requires rapidly cutting costs, raising pric- es, or increasing the number of services provided. All these strategies are legal, but until recently they hadn’t been deployed as widely or intensively in health care. (Blumenthal, 2023, paras. 9–12) Health Care Values In Chapter 3, we pointed out that common to all health care occupations is a stated obli- gation to ethical standards of practice. People who provide health care commit to placing patient well-being at the heart of their practice. The American Medical Association (AMA) Principles of Medical Ethics is the leading example of a declaration of practice ethics and one that has guided other health professions: The medical profession has long subscribed to a body of ethical statements de- veloped primarily for the benefit of the patient. As a member of this profession, a physician must recognize responsibility to patients first and foremost, as well as to society, to other health professionals, and to self. The following Principles adopted by the American Medical Association are not laws, but standards of conduct that define the essentials of honorable behavior for the physician. (AMA, 2019, para. 1) The oaths or declarations of ethical conduct that are prescribed for all health profession- als today have their origin in the Hippocratic Oath. Even though modernized, these oaths retain the central tenets of the original. As Limentani (1998) wrote in the British Medical Jour- nal, “Ethics are not optional in medicine: they are an essential and integral part of health care” (p. 1458). A few precepts guide behavior in the health care occupations, including “do no harm,” provide competent care, maintain the confidentiality of patients and their records, respect patient autonomy and primacy, and engage honestly with patients and fellow workers. See the AMA Principles of Medical Ethics in Box 12.1 (AMA, 2019, para. 2). In fact, their foundational values and beliefs motivated nurses, doctors, and oth- er health care providers to place themselves in danger in order to care for patients with COVID-19—even before there was a vaccine or effective treatments. Indeed, many died caring for these patients, some from COVID-19 infection and a few from violence for treat- ing them conventionally. It is commitment to the ethical principles of care expounded in the Hippocratic Oath and its descendants that leads many health care providers to view their occupation as a “calling.” The ethical principles of practice form one side of the social contract between society and health care. As Khan and colleagues (2022) state: That social contract has, for generations, formed the bedrock of healthcare in America. Defined as a foundational understanding between medical profes- sionals and society that forms the underpinning of "professionalism," that social contract implores physicians, nurses, and other health professionals to fulfill their role as healers—thereby ensuring competence, altruism, morality, integri- ty, and promotion of the public good. In exchange, society grants medicine trust and high social prestige, the ability for the profession to self-regulate, and shares in the responsibility for improving public health and ensuring that our healthcare infrastructure and systems are resourced and supported. (Khan et al., 2022, para. 5) 426 II: The Changing U.S. Health Care System BOX 12.1 PRINCIPLES OF MEDICAL ETHICS I. A physician shall be dedicated to providing competent medical care, with compassion and respect for human dignity and rights. II. A physician shall uphold the standards of professionalism, be honest in all professional interactions, and strive to report physicians deficient in character or competence, or en- gaging in fraud or deception, to appropriate entities. III. A physician shall respect the law and also recognize a responsibility to seek changes in those requirements which are contrary to the best interests of the patient. IV. A physician shall respect the rights of patients, colleagues, and other health profession- als, and shall safeguard patient confidences and privacy within the constraints of the law. V. A physician shall continue to study, apply, and advance scientific knowledge; maintain a commitment to medical education; make relevant information available to patients, colleagues, and the public; obtain consultation; and use the talents of other health pro- fessionals when indicated. VI. A physician shall, in the provision of appropriate patient care, except in emergencies, be free to choose whom to serve, with whom to associate, and the environment in which to provide medical care. VII. A physician shall recognize a responsibility to participate in activities contributing to the improvement of the community and the betterment of public health. VIII. A physician shall, while caring for a patient, regard responsibility to the patient as paramount. IX. A physician shall support access to medical care for all people. Adopted June 1957; revised June 1980; revised June 2001. SOURCE: American Medical Association. (2019). AMA principles of medical ethics. https://code-medical -ethics.ama-assn.org/principles Health Care Values and Privatization Thus, it is a serious concern that more and more evidence suggests that corporate own- ership in the health care system—both public investor and private equity—inhibits the ability of providers to care for patients in a manner consistent with their commitment to ethical practice. Several examples follow. A study of 1,000 physicians conducted by the Physicians Advocacy Institute and the National Opinion Research Center (2023) found substantial dissatisfaction among physi- cians employed by corporate-owned practices including hospitals, health systems, health insurers, and private equity firms. Almost 60% reported erosion in clinical autonomy and negative changes to patient care quality as a result. 47% said that practice policies or incentives frequently led them to change treatment options to reduce costs. 61% said they had moderate or low autonomy to refer patients outside of their own- ership structure/system. 45% reported that ownership changes worsened their relationships with patients, with decreased visit time and communication reported as top negative impacts of ownership changes.  12: Prospects for the U.S. Health Care System 427 A letter from Christopher Kang, president of the American College of Emergency Physicians, to the Senate Committee on Finance provided comments for the hearing “Consolidation and Corporate Ownership in Health Care: Trends and Impacts on Access, Quality, and Costs.” The letter conveys a deep dissatisfaction with the effects of corpora- tization on the practice of emergency medicine, which include: interference with provider autonomy to make independent medical decisions that benefit their patients; inability to find a job or undue imposed restrictions on ability to switch jobs (if dis- satisfied); practices, such as the use of a less-skilled health care workforce, that put profits over patient care; and reduced wages and/or noncash benefits and infringement of the right to due process (Kang, 2023). In another instance, Senate hearings have been convened to investigate the impact of private equity’s impact on the health care system. The hearings were prompted by the collapse of hospitals serving vulnerable Americans after their purchase by private equity firms. Senator Whitehouse, chairman of the investigating committee, said: From facility closures to compromised care, it’s now a familiar story: private equity buys out a hospital, saddles it with debt, and then reduces operating costs by cutting services and staff – all while investors pocket millions. Before the dust settles, the private equity firm sells and leaves town, leaving com- munities to pick up the pieces. (U.S. Senate Committee on the Budget, 2023, para. 3) However, it should be noted that private, nonprofit health care organizations can also ignore the social contract and the values of their workforce, with outcomes matching for-profit and private equity investors. Kaiser Permanente, a large nonprofit health system, provides an example. As reported to the Justice Department, Kaiser Permanente called doctors in during lunch and after work and urged them to add additional illnesses to the medical records of patients they had not seen in weeks. Doctors finding enough new diag- noses could earn gifts—bottles of Champagne or a bonus in their paycheck. This strategy, described by the Justice Department in a lawsuit against Kaiser, led to diagnoses of serious diseases that might have never existed or were no longer relevant to the patient’s health condition. But adding diagnoses resulted in a profitable outcome for Kaiser. It increased the money Kaiser could collect from the federal government’s MA program (Abelson & Sanger-Katz, 2022). As discussed in Chapter 7, the U.S. health care system’s performance is not optimum in terms of desired performance goals—quality, equity, and efficiency. As an example, the Organisation for Economic Co-operation and Development (OECD) member countries include wealthy, developed nations such as the United States, Germany, Japan, and Aus- tralia, as well as those less developed but with similar democratic values and economic goals, such as Poland, Mexico, Turkey, and Estonia (OECD, n.d.). Unfortunately, the Unit- ed States’ performance on important indicators is near the bottom, more comparable to countries that are far less developed and have far fewer resources. We spend far more than any other country and achieve worse outcomes. 428 II: The Changing U.S. Health Care System Improved efficiency and lower costs are often the rationale for accepting private sector relationships in health care delivery. And, of course, there is the American preference for maintaining the private and public sectors in health care, as discussed in Chapter 8. Yet, by most measures, the U.S. system needs improvement. The increase in private invest- ment has not produced the efficiencies, quality, and equity that would be expected given the enormous amount of money expended. Rather, increased privatization threatens to undermine professional values and the social contract between health care and society in order to increase profits for investors. At this point, a loosely regulated private sector is trending toward extracting maximum profit from the health care system at the expense of health care workers—their ethical commitments, autonomy, wages, and working con- ditions—and ultimately the quality and equity of care they provide to patients. Continued emphasis on profit maximization over traditional health care values threat- ens to create mistrust in this essential sector of society. Trust in our institutions binds us together. Public trust builds belief in the legitimacy of institutions, which then confers authority on them and nurtures cooperation and support with them. We risk losing public trust in health care institutions if profit maximization—rather than health care values and the social contract—is seen as the basis for health care decision-making. Therefore, we ask: Can the U.S. health care system be reimagined so that both private and public sectors contribute to improving quality, equity, and efficiency, while maintaining the primacy of ethical practice and the social contract between health care and society? There are other organizational models in peer countries—for instance, health care sys- tems that emphasize primary care (Andrews, 2023; Fitzgerald et al., 2022). There are other regulatory methods that could reduce costly and inefficient excesses. We are not bound to an unsatisfactory health care system in the United States. We can use our imaginations and tenacity to do better. REVIEW QUESTIONS 1. What events suggest that the current roles of the private and public sectors in the U.S. health care system may be changing? 2. 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