Over the past 25 years, power in our healthcare system has shifted from the physician to the corporation.
As a professional, the physician pledged to put his patient's interests ahead of his own financial interests. The corporation, by contrast, is legally bound to put its shareholders' interests first.
For the corporation, decisions about how to allocate healthcare dollars become marketing decisions. Drug makers, device makers, and insurers decide which products to develop based, not on patients' needs, but on what their marketers tell them will sell – at the highest profit.
As they compete for well-heeled, well-insured customers, even not-for-profit hospitals have learned to think like corporations. “Which will yield better return on investment,” CEOs ask themselves, “valet parking or palliative care?” “At hospital meetings, instead of talking about patient care, everyone talks about market share,” complains one physician. “But the odd thing is, the more we use the business model, the less successful we seem to be as a business. Healthcare is going broke.”[1]
Ideally, free-market competition would make our corporate healthcare system more efficient. Yet the best available evidence suggests that 1 out of every 3 healthcare dollars is wasted on unnecessary tests, unproven procedures, and overpriced drugs and devices that are no better than the products they have replaced.[1–5]
Why is money-driven medicine so wasteful?
First, because rather than collaborating, drug makers, device makers, and hospitals compete, duplicating each other's efforts. If one hospital buys a new MRI unit, neighboring hospitals feel that they must buy one, too. (And how do they pay for it? By using it.) Ultimately, in a for-profit healthcare system, what is good for business is more business: more drugs, more devices, more procedures, more tests, but while more healthcare equals greater profits, it does not necessarily lead to better health.
That's my opinion. I'm Maggie Mahar and I write about money and medicine.
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References
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