Accountability

Current Issues

The epidemic of profit-driven care

It’s no secret that the US spends more on health care than any other developed country, despite not providing access to health care for all. Why do we spend so much and get so little? Part of the answer is that our health care system is built for the purpose of making profits, not creating a healthy society, and we do not hold our health care institutions and companies accountable for providing the right care at an affordable price.

The lack of accountability in our health care system puts many Americans at risk of physical and financial harm. A study in the American Journal of Medicine analyzed almost 10 million new cancer cases from 2000 to 2012 in people age 50 or older, and found that a staggering 42.4% had depleted their entire life savings within two years of being diagnosed. Half of American adults have put off health care services because of cost. Many families are sacrificing spending on basic necessities like food and clothing to pay medical bills.

Hospitals

Hospitals serve as the locus of emergency care, acute care, major elective surgery, and the training of the next generation of clinicians. Nearly one-third of the $3 trillion the U.S. spends on health care each year will go towards paying for services delivered by hospitals, 42 percent of which was covered by taxpayers. Non-profit hospitals in the U.S. enjoy tax-free status that was worth $24.6 billion in 2011.

Yet broad public scrutiny of hospitals, and the accountability it would foster, have been largely absent. For the most part, hospitals have been accountable only to accreditation organizations and to payers. Such issues as patient safety and outcomes, overtreatment, and hospital prices have not yet become the common prism that the public uses to assess hospitals, much less make choices about where to get their care. Even less attention has been paid to how hospitals have behaved as large employers, members of communities, and contributors to population health.

This longstanding lack of transparency has permitted hospitals to build reputations as good public citizens, without necessarily having to be good citizens. For example, only 62% of tax-exempt non-profit hospitals spend more on community benefits than they receive in tax breaks. Even more disturbing, many non-profit hospitals sue patients for unpaid medical expenses, although these hospitals are supposed to be providing charity care to those who can’t afford to pay.

Drug/Device Industry

Medications and medical devices have improved health and quality of life for millions of Americans. But the lack of regulation and transparency of drug and device companies has led to physical harm and financial stress for many more.

Reining in drug prices has become one of the most salient health care issues, with 79% of Americans calling drug prices “unreasonable” and nearly 25% of Americans reporting difficulty affording their prescription drugs. Unlike in other countries, the US government does not negotiate drug prices with pharmaceutical companies, so companies are able to charge whatever the market will bear. Price inflation of drugs has spiraled to the point where a $2.1 million gene therapy drug is not seen as out of the ordinary. Even the price of drugs created 100 years ago like insulin have become rapidly unaffordable, leading to tragic preventable deaths.

The US Food and Drug Administration approves new medications; however, their regulatory process is often lax. As pharmaceutical companies have become more involved in the approval process, by funding patient advocate groups and funding clinical trials, drugs like Eteplirsen for Duchenne Muscular Dystrophy and Esketamine for depression have been approved with little evidence to show that they actually work.

More cancer drugs than ever are being approved through the Accelerated Approval Process, which enables “earlier approval of drugs that treat serious conditions, and that fill an unmet medical need based on a surrogate endpoint.” Rather than prove a drug has a beneficial clinical outcome, such as improved survival or better quality of life, the drugmaker just has to prove that the drug improved a surrogate endpoint – a result that correlates with clinical benefit. The trouble with surrogate endpoints, however, is that they often fall short of predicting real clinical benefit. 

The process for approving medical devices is even less strict. About 80 percent of medical devices are approved through a process called the 510(k) pathway, which allows devices to be approved without a clinical trial, as long as the new device is similar enough to an already existing “predicate” device. Many devices are approved by the FDA and marketed widely before they have ever been tested in humans. For devices like metal-on-metal hips, sterilization devices, vaginal mesh, this has led to widespread harm.

Health Insurers/PBMs

Health insurance companies are supposed to negotiate with health care providers to reduce the cost of care for patients. However, the lack of transparency and accountability for health insurers can lead to insurers not covering needed care, or even making health care services more expensive for patients. For example, pharmacy benefit managers, which negotiate pharmacy benefits for beneficiaries, supposedly give patients “discounts” on medications, but often steer patients toward more expensive, branded drugs, and sometimes charge patients co-pays greater than the actual cost of the drug (called “clawbacks”).

Often, it is within the health insurer’s best interest to pay more for health care and stick patients with a high co-pay, because they can make up the costs later by raising premiums. This creates a spiral of higher and higher costs.
Additionally, outsourcing state Medicaid insurers to private companies has led to devastating cases in which care was not provided for patients with special health needs. The lack of regulation and oversight of these companies led to them skimping on treatments and medical equipment to boost profits.