Under the Microscope: Exposing the Healthcare Industry’s Profit-Driven Strategies

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Under the Microscope: Exposing the Healthcare Industry’s Profit-Driven Strategies

The American healthcare system has gone awry, increasingly motivated more by financial incentives and corporate profiting through the practice of medicine than a core mission of providing quality, affordable care for patients. From massive insurance conglomerates to renowned hospital chains to cyberattacks that affect access to medication and the ability of physicians to practice and pay their rent and employees, too many players have put profit as the priority over their fundamental purpose of promoting health and healing.

Yet while the US spends far more on healthcare compared to other countries, it still comes in far lower when measuring healthcare outcomes such as life expectancy, infant mortality, and maternal mortality rates. This begs the question: are American healthcare patients truly getting the most value out of the country’s healthcare system?

Enterprising physicians like Dr. Sulagna Misra, from Misra Wellness in Los Angeles (and soon to be NYC), have witnessed this travesty unfolding firsthand and are charting a new path forward. “We’re all hemorrhaging, and no one cares,” she remarks of the current status quo’s failures. Dr. Misra advocates for restoring the sacred and essential doctor-patient relationship by cutting out the cumbersome insurance middlemen through Direct Primary Care (DPC) practices.

DPC represents a promising model of delivering personalized, transparent healthcare while avoiding the perverse financial incentives that have mutated and devolved the current mainstream system. “Bringing the relationship back to the doctor and patient, and not including the insurance companies,” is how Dr. Misra describes her innovative approach at her pioneering DPC Los Angeles clinic.

As US healthcare expenditures continue skyrocketing, patients deserve to understand what underlying forces are driving these ever-increasing costs. This in-depth examination, featuring insights from Dr. Misra and other leading voices, pulls back the curtain on the profit-focused forces that have transformed a once noble mission into an unaffordable, opaque crisis for American families.

Though the prognosis is challenging, Dr. Misra and like-minded reformers offer a promising potential cure by aligning incentives with patient needs through the DPC model of truly affordable, personalized care.

The rising cost of healthcare

The rapidly escalating costs of healthcare in the US have become an inescapable and undeniable burden on individuals, families, employers, and the entire economy. According to a 2020 research study, per capita healthcare spending has nearly quadrupled over the past few decades, soaring from $2,900 per person in 1980 to a staggering $11,200 per person in 2018 (measured in 2018 dollars). That amounts to an annual growth rate of 3.6 percent over nearly 40 years, meaning the average spending per person is now $13,850 — if not higher.

While part of this increase can be attributed to factors like the aging population and growing treatment capabilities, experts — including America’s dwindling population of physicians — widely agree the main driver is the unique dysfunction within America’s healthcare system itself. The US spends nearly triple what other wealthy, advanced nations pay for healthcare on a per capita basis.

According to that same study, in 2017, total US healthcare expenditures reached 17.1 percent of gross domestic product (GDP), dwarfing other industrialized nations like Germany (11.2 percent of GDP), Canada (10.7 percent), and the United Kingdom (9.6 percent) — even though these countries provide universal healthcare coverage for their citizens. Public spending alone by the US government equaled 8.3 percent of GDP, roughly in line with other countries’ total expenditures.

Incredibly, despite wildly outspending peer nations, the US consistently ranks poorly on healthcare outcome metrics. The evidence is clear — American patients are simply not getting their money’s worth.

The sources of America’s healthcare spending crisis are multifaceted, “but one reality is clear,” notes Dr. Misra. “These exorbitant and ever-increasing prices are creating an unbearable strain that demands meaningful reform to rein in costs and refocus on prioritizing patient care over profits.”

Dr. Misra’s Mission

At the core of America’s healthcare spending crisis is a fundamentally misaligned system of incentives that frequently puts profits ahead of patient interests. The lucrative nature of the healthcare business has created a perverse dynamic where larger financial rewards flow to industry players that capitalize on opaque pricing and maximize revenues, rather than those providing the most efficient, effective care.

Insurance giants don’t actually benefit from reducing overall healthcare costs, as their profits are derived from accurately predicting expenditures and pricing premiums with an ample cushion for overhead and profit margins. If anything, an insurer stands to make more money by allowing high costs to increase the total pool of premiums it collects.

“The system is stacked against the patient,” says Dr. Misra, who has made it her mission to disrupt this profit-focused model through Direct Primary Care. DPC practices like Misra Wellness cut out the insurance middlemen as much as possible, attempting to restore the simpler, more personalized doctor-patient relationship with transparent pricing and no surprise costs.

“Bringing the doctor and patient back together, and not including the insurance companies”, is how Dr. Misra describes her empathetic approach. Through comprehensive primary care memberships, she can spend more quality time with her patients, focusing on education, prevention, and tailored treatment plans rather than pushing services to drive profits.

This aligns incentives properly for quality, cost-effective care by allowing doctor compensation to come directly from patients for keeping them healthy, not from industry players benefitting from greater treatment volumes or higher prices. It’s a model that has shown great promise, if only the rest of the healthcare system could be restructured around the needs of people over corporations’ bottom lines.

A path forward

Lowering America’s bloated healthcare costs and refocusing the system on patients over profits will require comprehensive reforms attacking the issue from multiple angles. For example, Oregon is attempting to pass House Bill 4130, which essentially states that medical professionals have more autonomy for their patient care without private entities interfering. As of February 22, the bill passed the House but has yet to pass the Senate. However, there are still several key solution areas that have emerged from experts and trailblazing providers.

The first is enforcing true price transparency across the entire healthcare supply chain. Patients currently have little ability to understand costs and compare options before receiving care. Requiring upfront disclosure of negotiated rates between insurers and providers could promote competition and empower consumer choice.

Additionally, the perverse incentives created by existing regulations like medical loss ratio rules must be re-evaluated. As constructed, these policies unintentionally reward insurers for operating with higher costs that increase premiums and overall revenues. Realigning regulations to truly incentivize cost reductions could help control spending while inciting the prevention of disease, rather than the apparent current opposite.

Perhaps most importantly, innovative models of delivering care outside the constraints of the traditional insurance-based complex must continue being developed and scaled. The DPC approach practiced by advocates like Dr. Sulagna Misra has shown immense promise by restoring the primacy of the doctor-patient relationship and eliminating entire layers of administrative bloat. By empowering physicians to provide streamlined, personalized care through simple, affordable monthly memberships, DPC aligns incentives appropriately for both providers and patients to prioritize health through education, prevention, and comprehensive treatment planning.

While a long road remains, the path forward is clear. Only by holding the entire medical industry accountable through educating physicians and patients regarding insurance payments (or lack thereof), realigning financial motivations, and scaling patient-focused care models can the United States finally escape the incumbent system’s perpetual hemorrhaging of costs. 

Physicians like Dr. Misra represent the core ideals of care over profits to which the entire healthcare ecosystem must return. The prognosis is challenging, but achievable through the intensive treatment required to heal a healthcare complex mired in misguided priorities.