3 Cs: Corporatization, consolidation, commodification

Having the privilege of serving as Chair of ACP's Board of Regents has highlighted critical aspects of our health care system and our roles as internists within it.

First, I am immensely proud of the essential role internal medicine (#IMEssential) has played during this prolonged COVID-19 pandemic. From our primary care colleagues, who quickly pivoted to telemedicine at the outset and now are navigating the complexity of coordinating the outpatient care of this recent deluge of COVID-positive patients, to our hospitalist and critical care colleagues, who have faced repeated surges of severely ill patients under the most challenging conditions, we have demonstrated the extraordinary importance and value of internal medicine to health care here and abroad.

I also am prouder than ever (#IMProud) of ACP's unfailingly evidence-based, principles-driven advocacy on behalf of our patients and our profession. Under Bob Doherty and Shari Erickson's leadership, our D.C.-based Division of Governmental Affairs and Public Policy has earned the trust of legislators on Capitol Hill and policymakers at key agencies such as CMS. We have developed strong collaborations with other large medical societies, collectively representing over 590,000 physicians, routinely advocating together as the Group of Six (ACP, American Academy of Pediatrics, American Academy of Family Physicians, American College of Obstetricians and Gynecologists, American Psychiatric Association, and American Osteopathic Association) on issues of common interest. ACP now is also the largest delegation in the AMA's House of Delegates, where we have been very effective in influencing policy development, which drives AMA's own advocacy work.

Yet, moving forward, we face other challenges. Despite spending more per capita than any other country, our country's spending generally does not correlate with better health outcomes. The United States consistently ranks last or near last in access, administrative efficiency, equity, and health care outcomes. The U.S. continues to underinvest in primary care: Peer countries spend an average of 14% on primary care while the U.S. averages 5% to 7%. We see little evidence of the system-level reforms needed to address these issues, leaving changes in U.S. health care largely in the hands of the marketplace.

In October 2021, ACP published “Financial Profit in Medicine: A Position Paper from the American College of Physicians” in Annals of Internal Medicine. The paper noted: “The steady growth of corporate interest and influence in the health care sector over the past few decades has created a more business-oriented health care system in the United States, helping to spur for-profit and private equity investment.” This groundbreaking paper thoroughly explored the implications of what I, for purposes of brevity, will describe as the corporatization of health care, with the emphasis on profitability, market share, return on investment (ROI), and the imposition of business practices often at odds with equitable, high-quality, patient-centered care. As ACP's paper emphasizes, “The pursuit of profit is not inherently negative unless it compromises the patient-physician relationship, worsens health outcomes, or exacerbates health disparities.”

Corporatization of health care, the first “C,” is not a new phenomenon in the U.S. and has been under way for over 50 years. Additionally, the distinction between nonprofit and for-profit health care organizations is often not apparent. In April 2021, Health Affairs published an analysis finding that “nonprofit hospitals spent $2.3 of every $100 in total expenses incurred on charity care, which was less than government ($4.1) or for-profit ($3.8) hospitals [spent].” They spent less despite the obligation nonprofits have to maintain their tax-exempt status by meeting a community benefit standard (CBS) to determine whether they are “organized and operated for the charitable purpose of promoting health” and “serve a public rather than a private interest.”

Another trend that has accelerated in recent years is consolidation (or concentration), the second “C,” which has impacted every aspect of health care (e.g., insurers, hospitals and health systems, nursing homes, dialysis centers, pharmacies, independent physician practices) and has taken many forms (mergers, acquisitions) and structures (vertical and horizontal integration). Although consolidation can in theory produce economies of scale, reducing costs and even increasing quality, there is scant evidence that this occurs routinely. What does occur routinely is that prices increase due to reduced competition and absence of price controls.

Physicians are directly impacted, often becoming employees of these consolidated systems. As reported in Health Affairs in an article published in August 2020, “More than half of US physicians and 72 percent of hospitals were affiliated with one of 637 health systems in 2018.” The employed-physician ecosystem is highly complex and varied, ranging from government-owned entities (e.g., Veterans Health Administration) to large integrated health systems (e.g., Permanente Medical Groups, Tenet Healthcare) to independent for-profit primary care companies (e.g., Iora Health). We clearly need to better understand this complex ecosystem and its impact on physicians and our patients.

The most striking aspect of consolidation has been the entry of private equity into the health care marketplace, “raising questions about incentive alignment and downstream effects on patients,” as described in the May 2021 Health Affairs. Based on the expectations of their investors, “private equity firms often introduce structural changes to the operational and business model of acquired companies to increase value, increase revenue growth potential, and engineer a higher sale price,” the authors wrote. Consider the language included in the 2021 Bain and Company Global Healthcare Private Equity and M&A Report: “Providers: New roll-up candidates and a new look for risk-bearing providers” or “risk-bearing providers offering opportunities for outsized returns when they have a proven model for managing costs.” Physicians and their patients are reduced to market opportunities.

This in turn leads us to our final “C,” commodification, the transformation of goods, services, personal information, even people into objects of trade. In economics, a commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Writing in the Journal of Medicine and Philosophy in 1999, the medical ethicist Edmund D. Pellegrino, MD, MACP, raised serious concerns in his article “The Commodification of Medical and Health Care: The Moral Consequences of a Paradigm Shift from a Professional to a Market Ethic.” He cautioned that “health care is not a commodity, that treating it as such is deleterious to the ethics of patient care, and that health is a human good that a good society has an obligation to protect from the market ethos.” More recently, in a study published in Inquiry in 2018, researchers explored the impact of commodification of health care on trust in physicians by patients in 23 countries and found that patients “in the health care-commodified countries were approximately half as likely to trust physicians.”

Physicians themselves are increasingly treated as a commodity, a fungible “product,” interchangeable with any other “provider,” regardless of their education, training, or experience. ACP President Emeritus Robert M. McLean, MD, MACP, cautioning us about its corrosive effect, wrote in ACP Internist in September 2019, “The patient-physician relationship does not consist of simple transactions where we provide and patients consume. That marketplace terminology implies that health care can be conceptualized as just another commodity.”

These trends we see in health care, induced by corporatization, consolidation, and commodification, emphasize just how important our continued advocacy efforts are for our patients and our profession. Despite these challenges, I remain optimistic about the future of internal medicine, whose essential role in health care has been amplified by recent events. We will continue to speak forcefully and advocate aggressively for the best interests of our patients and our members. In January 2020, ACP carefully elaborated our path forward in “Envisioning a Better U.S. Health Care System for All: A Call to Action by the American College of Physicians.” We remain steadfast in our belief that better is possible.