Money-Driven Medicine: Mahar Criticizes Market Myths

A few years ago, Harvard Business School professor Regina Herzlinger wrote a breezy and influential book, Market-Driven Health Care, claiming that too little capitalism and consumerism are what ail American medicine. Her cheery book claims that the medical consumer needs to be informed and empowered. Then, a smart, masterful, penny-pinching consumer will demand greater convenience, productivity, and quality from the medical establishment, transforming healthcare for the better. Ideas like hers about the magnificence of market competition and consumer choice now dominate the Washington conservative healthcare agenda: from the Medicare Part D benefit structure to proposed Medicaid changes to “pay-for-performance” to “consumer-directed healthcare" schemes.

In pointed disagreement with Herzlinger’s book, financial journalist Maggie Mahar’s 2006 book, Money-Driven Medicine: The Real Reason Health Care Costs So Much, focuses on the day-to-day reality of what markets can do to American medical care. Herzlinger presents a fairy tale, a charming story of “focused factories” and consumer convenience. Mahar looks at the nitty-gritty reality of corporate medicine and how focus on shareholder returns distorts and worsens medical care and medical practice, to the frustration of worker-bee physicians and other medical professionals. Grimmer, more detailed, and more realistic than Market-Driven Medicine, it is well worth reading.

• Competition improves medicine? In a cutthroat competitive environment, a Houston hospital declined to share details of its methods for improving pneumonia care, because excellence in that area offered the hospital local competitive advantage. And pharma tests new drugs not against best available therapy but in other ways that showcase their product best.
  

• Corporate discipline, structure and targets improve medicine? At the extreme, Mahar recounts the instructions in internal memos of shareholder-pleasing executives at NME to “go out and hire sleazeballs,” executives willing to countenance kidnap and abuse of patients in psychiatric hospitals to amass shareholder dollars. Later, after changing its name to Tenet, the corporation rewarded doctors who performed unneeded cardiac operations in Redding, California, ruining numerous lives. But Mahar also recounts the more-ordinary, subtler, and broadly-destructive ways corporate practices undermine good healthcare and drive up medical costs, forcing even non-profits to act similarly just to stay in existence. Non-profits, for example, typically need to finance expansion through bonds -- and as one section title proclaims: “S&P Doesn’t Give Points for Charity Care.”
  

Mahar reminds us that financial rewards for excellence indicators can undermine the genuine motivation most workers intrinsically have – when not driven and thwarted – to provide good care. She prefers relying on the “will to excellence” that physicians and others generally bring to their professions and on intrinsic satisfactions of working in a cooperative environment. Mahar cites greater Department of Veterans Affairs achievements in information technology than have been possible in the private sector in this country as resulting from some degree of insulation from capitalistic pressures.

Mahar's book has one major weakness. In reaction to Herzlinger’s focus on consumerism, Mahar chooses to derogate the ability of patients to play an active role in shaping the medical system and their own medical care. Medicine, she claims, is uniquely dependent on trust in one’s physicians and letting them ultimately make the decisions. When she claims that it is psychologically difficult for many people in medical crisis situations – even people who are doctors themselves – not to simply hand over authority to their carers, she is correct; and she is also correct on condemning those few bad doctors who deliberately abuse this situation to provide unneeded care. But I believe her entirely mistaken in making only professionals responsible for the quality of health care. It may be the rare patient who – like a soldier on the battlefield being shot at – can keep his head and make good medical decisions – but that patient does better than the close-my-eyes-and-trust kind. Two fine books – Patienthood: The Art of Being a Responsible Patient by Miriam Siegler and Humphry Osmond (MacMillan, 1979) and Making Miracles Happen by Gregory White Smith and Steven Naifeh (Little Brown, 1997) – argue this point much better than I have room for here.

Siegler and Osmond compare patients to elephant trainers.

“Elephants,” they say, “are like doctors in that the very qualities which make them so useful – their power, strength, and sagacity – also make them dangerous. Patients are like [elephant trainers], in that they need the elephants and can get essential services out of them, but they must learn how to manage them and how to avoid being trampled upon.”

And patients of this kind have changed medicine. Rose Kushner, who under pressure of a breast cancer diagnosis (influenced by a book she found at the public library written by surgeon Barney Crile) sought to avoid Halsted radical mastectomy and consulted 19 surgeons before getting Thomas Dao to perform a less drastic operation, was just as responsible through her writings and activism for much-needed changes in breast cancer management that finally came to pass as Crile or any other doctor.

Yes, Herzlinger’s money-and-convenience-driven super-consumer-patient is a destructive fantasy. But I wish Mahar had not seen fit to counter that by an emphasis on a supposedly-inevitable patient ignorance and ineptness at making medical judgments and decisions. A skepticism about a role for shareholder-held corporations in medicine is not intrinsically allied to a distrust of patient intelligence and ability. If we frame it like that, we just contribute to the myth that popular, conservative voices advocating allegedly-desirable healthcare system changes actually do promulgate people power – as they claim to while they blather on about “consumers” and “choices.”

All the same, read Mahar’s book. Grit your teeth – I did!– when she explains how blind trust in physicians is desirable and inevitable. But read it for the detailed, real-life stories about money and medicine, which provide a superb antidote to a near-religious faith in the invariable virtues of markets and financial incentives.