Private Profit and the Public's Health: Which is More Important?

Health care is pretty complicated, and insurance coverage is even harder to understand.This is the message that comes through clearly from the interviews being done by Dr. Paul Gordon and recorded on his blog, https://bikelisteningtour.wordpress.com. Dr. Gordon is taking a unique sabbatical, riding his bicycle across the country from Washington (DC) to Washington (state), interviewing regular people, mostly in cafés and such, about their take on Obamacare. 

The economic status of these people varies from poor to pretty well-off (but none really wealthy), from well insured to uninsured. Their political perspectives range from “everyone should be covered” to “benefits just make people lazy”. Three recent quotes: ‘People use Medicaid as a crutch’, ‘You can’t penalize someone for not having health insurance when it’s so expensive and the economy is doing so poorly’, ‘Here’s my take on it – everyone should have insurance’. What they share with each other, and with most of us, is a general lack of understanding of how Obamacare works (or doesn’t) and why. The flaws in Obamacare are the result of the political tradeoffs that allowed insurance companies to continue to have control and make huge profits, but this is often not clear to most people.

Here is something that is easy to understand, however: when you call “911” as you have been trained to do in an emergency, and they don’t come. Or they don’t come for a long time. Or they come with inadequate supplies. Who do you get angry with when you, or your loved one, dies? The government? They are surely in part at fault, even though they probably contracted the service out, to save money, probably because voters want to pay less tax. But there is another reason, explained in an excellent special article in the New York Times, “When you dial 911 and Wall St. answers” (June 26, 2016). The piece, by Danielle Ivory, Ben Protess, and Kitty Bennett, details how many city services, including ambulance services, are provided by companies that are owned by “private equity firms”. These are companies whose investment capital comes from wealthy individuals and particularly from pension funds, unlike banks whose money comes from depositors. They are even less regulated than banks, and thus more able to pursue their core mission, making profit:

Unlike other for-profit companies, which often have years of experience making a product or offering a service, private equity is primarily skilled in making money. And in many of these businesses, The Times found, private equity firms applied a sophisticated moneymaking playbook: a mix of cost cuts, price increases, lobbying and litigation.

Whoa. This is starting to get complicated again. Banks vs. “private equity” vs. just plain old for-profit businesses? They are really just different forms of for-profit, and provide a stepwise progression, from public services operated by government for the benefit of the people, to private companies that are contracted by government to do a service but might care about doing it well, to having those companies owned by banks who really just want to make a profit, to having them owned by private equity companies who care about nothing but making a profit. The photo accompanying the Times article is of Lynn Tilton, owner of Patriarch Partners (an ironic name, given that she is a woman), which owned the emergency services company TransCare that served many East Coast communities. TransCare went bankrupt, leaving those communities without emergency medical services. Ms. Tilton’s picture is accompanied by the quote from her reality television stint “It’s only men I strip and flip.” As a poster child, she could become the Martin Shkreli of ripping off necessary public services the way he was of ripping off consumers of life-saving drugs.

“The business of America,” Calvin Coolidge is often paraphrased as saying, “is business.” This perspective, that it is not about doing things that are best for the American people, is based in a belief that capitalism – “business” – will, through the magic of the market, eventually meet those needs. OK, maybe not those of people at the margins, people too poor to buy, so maybe we need a safety net. But most people. A similar statement appeared today in the print edition of the Kansas City Star from KC Mayor Sly James, discussing the controversy over replacing the terminals at Kansas City International Airport with one big, new terminal. Surveys consistently show that the large majority of Kansas Citians (84% in this article, “Regarding KCI’s future, city ponders a new flight path”) like the current arrangement, with short security lines and easy access in and out from one story terminals, but the airlines and big businesses do not. In the large-type quote accompanying his picture in the print edition (but, along with the photo, left out of the online edition), Mayor James said “The people of this city need to be convinced of what I believe is a basic reality, that this airport is about a lot more than ‘how fast can you get out of your car and get to your gate?’” Right. Business interests first. Take that, 84% of Kansas Citians!

Because they most obviously involve life and death, emergency medical services and firefighting (yes, firefighting too has been contracted out to companies owned by private equity firms!) get the greatest play in the Times article, but many other services (like water!) are in the same situation: controlled by companies whose goal is to make a profit rather than to provide effective service for people. This is what happens when municipalities are starved of funds because people vote to cut taxes.

Whether it is health insurance or emergency medical services or municipal water, the system becomes very complicated and hard to understand when it is trying to meet conflicting agendas. When the need for people to receive critical, health-producing service (fire and police protection, clean water, garbage collection, ambulances) is compromised by provisions built into contracts (or the law) for companies (insurance companies, banks, private equity firms) to make profit. I guess it is fine if these services can be effectively and reliably provided by for-profit companies, but when their pursuit of profit through “a mix of cost cuts, price increases, lobbying and litigation” conflict with actually providing services, there is a big problem. In the case of emergency medical services, the problem was that “…many newly insured Americans turned out to be on Medicaid, according to the Kaiser Family Foundation. Medicaid restricts some of the most aggressive billing tactics.”

A variety of other difficult to understand strategies are also employed at the macro level to place the interests of wealthy corporations above those of the people. These include the unlimited political contributions permitted by the Supreme Court’s Citizen’s United decision, incredible gerrymandering of congressional districts so that we have states where the majority of voters vote for Democrats but most districts are solidly Republican (see the New York Times Book Review “Where votes go to die”, June 26, 2016), and the provisions of the Trans-Pacific Partnership (TPP) that prevent national governments from regulating multi-national corporations.

We could solve this if there was a single, over-arching principle, always codified into law, that the interests of the people as a whole always trumps the profit potential of corporations. I vote for that.

Precision medicine, trade policy and the cost of drugs: benefiting people or profit for business?

In a recent (January 29, 2015) New York Times Op-Ed, Mayo Clinic anesthesiologist Michael Joyner writes that “’Moonshot’ medicine will let us down”. What Dr. Joyner is referring to is what is now most commonly called, particularly in the large academic medical centers that have bought into it in a big way, “precision medicine” or occasionally “personalized medicine”. This is the concept that, by knowing your individual genetics, medicine can devise targeted treatments for diseases (most of the emphasis is on cancer) that will work for you, but maybe not for other people. Maybe the treatment most commonly used for the disease isn’t right for you; this would find it out.

It is a very attractive concept, and one that has clearly gained traction since the first complete sequencing of the human genome in 2003, moving from a science fiction idea to a mainstream investment by many institutions. As Dr. Joyner notes, “President Obama’s new budget is expected to include hundreds of millions of dollars for so-called precision medicine. The initiative, which he introduced last week in his State of the Union address, has bipartisan support and is a bright spot in the otherwise tight funding environment for medical research.” That is the “moonshot” part – hundreds of millions of dollars. When other funding for research is stagnant or being cut. Because it sounds cool, exciting, really like something cutting edge, a step toward the day when disease will no longer bedevil the human race. However, Dr. Joyner adds: “Unfortunately, precision medicine is unlikely to make most of us healthier.” Bummer.

Maybe he is wrong. Maybe the medical centers investing heavily in precision medicine, and the federal government which will fund it (of course, the “investing heavily” is not unrelated to the “hundreds of millions in federal funding) are right. “Star Trek” here we come! But let us look at the evidence that Dr. Joyner presents. He notes that most common diseases that affect people, even those with clear association with families and thus likely genetics, such as Type II diabetes, are not the result of a single or even a few genes that could be targeted if they could be fixed. There are multiple genetic characteristics that impact whether someone has a tendency to get DM2. Moreover, whether it actually occurs is a result of a complex interplay between those genetic risks and actual behaviors such as diet and exercise. He argues that it is obesity, caused by behaviors but certainly abetted by social changes in our lives, jobs, and easily availability of cheap high-calorie food leading to obesity, that has been the major culprit, given that DM2 (and obesity) is an epidemic of the last half-century, therefore not a result of any genetic change. In addition, even when there are genetic factors for differences between people in their response to treatment, it turns out that these do not explain most of the difference (“missing heritability”), such as in response to the anticoagulant warfarin (a so-far failed effort to use precision medicine to choose treatment). Treatment of chronic diseases like cystic fibrosis by genetic intervention has been unsuccessful, and cancer (like microbes) mutates a lot faster than genetically normal cells.

Joyner also raises the very real concern that people’s behaviors will change in ways that work against their health when they learn their genetic risk. Some people will use the information that they are at lower genetic risk to adopt risky behaviors. This has been described in many areas, everything from people with negative cardiac tests continuing to smoke and overeat to men who have had negative HIV tests and circumcision to decrease their risk of spreading HIV increasing their unsafe sex practices. He also notes that the opposite test result, finding yourself to be at greater genetic risk, can also lead to unsafe practices because you figure you’re doomed anyway. In addition, he notes that there are some people (“worriers”), “…who might embark on a course of excessive tests and biopsies ‘just in case.’ In a medical system already marked by the overuse of diagnostic tests and procedures, this could lead to even more wasteful spending.”

The main message here is only in part that “precision medicine” is something whose time has not yet come and may or may not ever come. More important thing is that, despite this, the government is planning to invest hundreds of millions of dollars in it. Most important is that money is not being spent on implementing treatments for conditions that we do know how to treat. People who are poor or uninsured cannot access many already available – and often incredibly expensive – treatments for diseases like cancer (see my piece “Squeezing the needy: a truly flawed financing system for healthcare”, March 2, 2013) or hepatitis C or many neurologic diseases. “Precision medicine” treatments are certainly going to be even more costly. In addition, we do not spend the necessary money to address the social determinants of health--housing and food and warmth and education--that make more of a difference in health than all of health care.

Indeed, we invest large amounts of money, public as well as private, in programs that effectively make our health worse. Sometimes this is in subsidies to major environmental polluters (BP, anyone? How about fracking and the Keystone XL pipeline?), and sometimes it is more direct, when we actually invest government funds in making treatments more expensive and less accessible to people, albeit to the benefit of the drug companies? Noted economist Joseph Stiglitz takes this on in another recent Times Op-Ed, “Don’t trade away our health” (January 30, 2015). He describes how the US Trade Representative, who negotiates trade agreements “supposedly on behalf of the American people”, is in fact consistently working on behalf of big corporations. In the case of the Trans-Pacific Partnership, this will mean increased obstacles to lower-cost generic drugs by making competition more difficult. “Just the availability of generics drives prices down: In generics-friendly India, for example, Gilead Sciences, which makes an effective hepatitis-C drug, recently announced that it would sell the drug for a little more than 1 percent of the $84,000 it charges here.”  This competition should be encouraged; it is the essence of capitalism. But our trade representative is representing big business, not people.

Of course, high drug costs are already a reality. On January 28, 2015, the Times’ Business Section previewed a study coming out in the New England Journal of Medicine from Harvard. “Study finds HIV drugs priced out of reach”. Much of the great advance made against HIV in the last few decades come from effective and more tolerable drug regimens. Atripla, for example, is a once-daily combination of 3 drugs (2 made by Gilead, one by Merck), that is extremely effective. But this study shows that the “flexibility” available to insurers under ACA will mean that folks with worse insurance (usually poorer people) will have to pay $3,000 a year more for Atripla than those with better policies. Again, the poor pay more.

Precision medicine may sound good, and certainly cool, and sexy. It may even benefit some people, if at very high cost, in the future. But right now, today, there are lots of conditions we know how to treat and lots of people who are not getting that treatment because they don’t have the money, are not desirable, have diseases not in the most preferred “product lines”. And we are spending federal money on making some of the drugs that we have that we know are effective less available.

Despite publicity about or funding for precision medicine or any other “new idea”, the fatal flaw is that our health system is not about improving our health, it is about profit. This is intolerable.