CAPITALISM HAS CORRUPTED HEALTH CARE
SUMMARY: Capitalism and its pursuit of profits have corrupted our health care system. Oligarchs have been allowed to reap huge rewards resulting in the most expensive health care system in the world but one that delivers poor outcomes. Three essential elements that have driven this corruption are corporate consolidation, private equity, and privatization. Some remedies are clear but require dramatic changes in our federal elected officials.
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Capitalism has corrupted our health care system. My previous two posts described more generally 1) how corporate America’s current brand of capitalism is corrupt and undermines democracy, while abetting oligarchy and fascism; and 2) how large, profitable corporations avoid paying taxes while paying their employees so little they have to rely on government assistance to survive.
The U.S. health care system does not provide high-quality health care and is not accessible and affordable because it has been corrupted by the pursuit of profits. As a result, Americans have the worst health outcomes among peer countries. Moreover, they face high costs for insurance and care, resulting in huge amounts of medical debt and many bankruptcies. Individual health care providers are burned out and have low morale because their managers are focused on maximizing profit.
The U.S. health care system has been corrupted by the “free market” revolution that began in the 1970s, took off under President Reagan in the 1980s, and has dominated the U.S. economic system ever since. This laissez-faire, deregulated, no-holds-barred brand of capitalism has been championed by wealthy “conservatives” and Republicans, and abetted by some Democrats. It has been dubbed neo-liberalism. It is a turbocharged version of capitalism that promotes deregulation of business and privatization of public goods and services. [1]
Oligarchs have been allowed to reap huge rewards from our health care system through financial manipulation, mergers and acquisitions, and what amounts to bribery of elected officials. The result has been huge mega-hospitals and vertically integrated insurers / providers, along with pharmaceutical giants and a mind-boggling number of middlemen. All these entities are focused on squeezing as much profit as possible out of the health care system, while patient outcomes and the well-being of individual providers are sacrificed.
The result is the most expensive health care system in the world but one that delivers poor outcomes.
There are three essential elements that have driven this corruption of our health care system: [2]
· Corporate consolidation: Deregulation and lack of antitrust enforcement over the last 40 years have led to huge health care corporations that have monopolistic power, which allows them to maximize profits at the expense of patients and individual providers. Almost every component of our health care system is rated as “highly concentrated.” [3] For example, 90% of dialysis is performed by just two companies, while 90% of hospital markets, 74% of health insurance markets, and 65% of specialized physician services are rated as highly concentrated.
· Private equity: Private equity firms (which I referred to as vulture capitalists [see background here]) invaded health care starting in the 2000s. In the decade from 2010 to 2020, private equity firms spent $750 billion buying health care entities. While these purchases have produced big returns for the private equity financiers, the results for patients have been higher prices, poorer quality, and less access due to the closing of facilities, while doctors and other personnel are disempowered and discouraged. (This is consistent with the standard practice of private equity firms in all sectors of our economy. See more here.)
Steward Health is perhaps the poster child for private equity’s harmful impact on health care. Among other negative outcomes, it delivered poor care as it cut corners to maximize profits. By filing for bankruptcy, patient malpractice awards (among other debts) won’t be paid or will be paid with pennies on the dollar, while executives and private equity owners walked away with fortunes.
· Privatization: Privatization and profits are the hallmarks of our neoliberal health care system. Notably, Medicare, which provides health insurance coverage for 65 million seniors and people with disabilities, is being increasingly privatized to the detriment of taxpayers and patients. A growing portion of Medicare enrollees are being seduced by slick advertising and short-term benefits to sign up for privatized Medicare Advantage plans, which now have 55% of the population.
The only long-term advantage of the plans is to the profits of private insurers, such as the giants UnitedHealthcare and Humana, which between them have 46% of all Medicare Advantage enrollees. Recently, these two corporations announced plans to boost their profits by dropping some “under-performing” markets and kicking more than a million seniors off their insurance plans.
Medicare Advantage (MA) plans cost the government over $500 billion a year and more per person than non-privatized, traditional Medicare, despite serving a healthier population. MA companies are notorious for denying payments for necessary care and for overbilling the government. Nonetheless, the Trump administration recently approved a substantial increase in payments to MA plans. [4]
Not surprisingly, another result of this corruption of our health care system has been that trust in the system has dropped dramatically from 79% in 1975 to 28% in 2026. [5]
Some of the remedies for our health care system’s dysfunction are clear but obviously would require dramatic changes in our federal elected officials:
· Strong enforcement of antitrust laws (as the Biden administration started to do for the first time in 40 years). The high concentration in many parts of the health care system will require breaking up some of the huge, monopolistic corporations that have been created.
· Banning private equity ownership from our health care system.
· Regulating drug prices, as they are in every other peer country.
· Implementing a single-payer, Medicare for All type system, like those in every other peer country.
· Establishment of a new patient bill of rights.
For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent good news Sunday post here.
[1] McDonough, J. E., 8/30/26, “The little-understood roots of the American health care catastrophe,” The Boston Globe
[2] McDonough, J. E., 8/30/26, see above
[3] Highly concentrated is defined in the merger guidelines of the Federal Trade Commission. More on its application to health care is in this American Medical Association publication: https://www.ama-assn.org/health-care-advocacy/access-care/95-us-health-insurance-markets-are-highly-concentrated
[4] Johnson, J., 9/10/26, “To boost profits, Medicare Advantage giants move to kick over a million seniors off their plans,” Common Dreams (https://www.commondreams.org/news/medicare-advantage-benefit-cuts)
[5] McDonough, J. E., 8/30/26, see above