'Corporatization of Healthcare Spotlighted in New NEJM Series'

 The corporatization of healthcare will take some heat as the subject of a new essay series from the New England Journal of Medicine (NEJM).

The series will try to define and untangle elements of healthcare corporatization in the U.S. and explore how the system can better move forward. Some elements of corporatization include increasing "corporate ownership of healthcare organizations, market consolidation and concentration, and emphasis on the bottom line" that benefit corporations and shareholders over doctors and patients, wrote NEJM editors led by Debra Malina, PhD, in an introductionopens in a new tab or window to the new series.

Malina's group noted that healthcare corporatization is often judged as the "vast and nebulous" culprit of issues such as physician burnoutopens in a new tab or window, frustrating experiences for patientsopens in a new tab or window navigating the system, or health disparities in the country compared to other wealthy nations.

The positives of the trend will still be acknowledged. "These essays will critically assess both negative and positive consequences of corporatization and how these consequences may inform broader goals for healthcare reform," Malina's group wrote.

"With this series, we aim to examine the corporatization of U.S. healthcare – the shift towards business models, financial priorities, and market consolidation – and its impact on patients, physicians, and the delivery of care," series editors told MedPage Today. "Through contributions from expert authors with varied viewpoints and areas of expertise, the series will explore both the benefits and drawbacks of corporatization and help inform efforts to strengthen the healthcare system for all."

Each month, 'experts' will explore a specific aspect of healthcare corporatization. Erin Fuse Brown, JD, MPH, of Brown University School of Public Health in Providence, Rhode Island, wrote the first perspectiveopens in a new tab or window in the series homing in on the definition of corporatization.

Brown cited "The Social Transformation of American Medicine," a 1982 book by Princeton sociologist Paul Starr, PhD, which identified healthcare corporatization as expanding across five dimensions: shifting from nonprofit and government to for-profit; horizontal consolidation; the rise of conglomerate enterprises; vertical consolidation; and the increasing size, scope, and concentration of organizations -- all of which have accelerated in the decades since Starr's seminal work was published.

Brown argued that 40 years on, corporatization "now refers to the general trend throughout the healthcare industry toward higher levels of integrated control by consolidated profit-seeking enterprises."

While profit motive has always existed in medicine, Brown noted that "corporatization has produced a system that is incredibly profitable for investors but increasingly unaffordable, inaccessible, and uncaring for everyone else," creating "a Gilded Age of medicine."

Shareholder primacy is one key element here, which she said "subordinates the interests of other stakeholders, such as patients, the healthcare workforce, or the community."

Another essential component of corporatization is consolidationopens in a new tab or window, which "both increases the size of the firm and relocates the decision-making power from the local producers of goods and services to the officers and investors of the corporate parent," hence insulating them "from reputational or market discipline," Brown explained.

She offered the collapse of private equity-backedopens in a new tab or window Steward Health Care and the sprawling conglomerate of UnitedHealth Group as just two high-profile examples of how healthcare corporatization has reached a boiling point. Ultimately, Brown calls for novel reforms to disrupt corporatization and reorient the system towards the benefit of society -- rather than profit for corporate giants.

Other essays from the NEJM series will detail how corporatization is not new and has roots going back a century. Some will focus on the economic drivers and stakeholders, or corporatization's effects on specific sectors within the healthcare system "from hospitals and nursing homes, to clinics, to the health insurance industry, to medical training, to health and healthcare equity," according to Malina and colleagues.

Later on, the series will turn to "possible responses and alternatives to corporatization that could help right the ship of U.S. healthcare, alleviate problems caused by this historical transformation of the system, and better leverage its positive effects."

https://www.medpagetoday.com/publichealthpolicy/generalprofessionalissues/116368