A Gilded Age for Patients? The Broken Promises of Profit-Driven Medicine, From the Series: The Corporatization of U.S. Health Care, The New England Journal of Medicine, August 2, 2025, by Nancy Tomes
Between the 1920s and the 1960s, the American medical profession developed a new doctor-controlled business model of care delivery, dependent on continual investment in new drugs, technologies, and procedures. That model created the profit opportunities that enticed corporate stakeholders to invest in health care in the 1970s and 1980s. But as the corporate presence increased, physicians lost control of their business model.
Hospitals had to function in a more efficient, businesslike fashion. That ethos spread to private practice as well. This financialization led to dynamics whose negative consequences persist to this day. Even the middle-class patients, who were expected to benefit most from medicine’s new model, found the costs hard to budget for and the world of medical specialization difficult to navigate. These discontents created the opening for new business partners: insurance companies, which in the late 1930s figured out how to profitably pool savings for unpredictable expenses.
The “merger movement” in hospital and physician services enabled health care organizations to benefit from economies of scale while minimizing direct price competition. Hospitals and physician practices slowly fused into chains.
Although it may seem obvious that health care doesn’t work like a restaurant chain, many powerful health care industry stakeholders still believe allowing corporate interests freer rein will produce that “golden age for patients.” The health care economy’s fragility suggests otherwise.
No market solution has arisen for the most critical determinant of poor health and health care outcomes in the United States: extreme income inequality. The Trump administration appears intent on blowing up our fragile health care system in the name of an unrestrained “free market” and corporate profiteering. Many people will suffer if the system collapses completely, but perhaps a more sustainable health care system can be built from the rubble.
Comment:
By Don McCanne, M.D.
With Trump’s affinity for gold Rococo, it seems like he may believe that this is “the golden age,” but not for patients, just for the billionaires. For patients, he would perpetuate “the most critical determinant of poor health and health care outcomes: extreme income inequality.”
There is no need to further elaborate on why we have the most expensive but poorest performing health care system. Historian Nancy Tomes provides a succinct summary. But based on decades of inertia in producing the reforms that would reverse the high cost/poor performance ratio, there is a clear need to reinforce the public’s understanding that there is a well-documented model of reform that would provide high quality care for absolutely everyone at a cost that each of us could afford. Need we say it? Of course that is a single payer national health program, sometimes referred to as an improved Medicare for All.
Isn’t it about time that we got with the program?
https://healthjusticemonitor.org…
Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.