Corporate mergers, retail clinics, and monopoly capital

Two huge mergers have recently been announced in the health insurance sector. First, Aetna announced its intention to acquire Humana for $35 billion, creating a behemoth. Not to be outdone, Anthem (the enormous group of formerly non-profit Blue Cross/Blue Shields that have gone for-profit) announced it will buy Cigna for $47 billion. Consolidation in the industry is moving fast, and soon there will be oligopoly. Robert Reich, in his July 5, 2015 article The Choice Ahead: A Private Health-Insurance Monopoly or a Single Payer discusses these mergers, observing that

Executives say these combinations will make their companies more efficient, allowing them to gain economies of scale and squeeze waste out of the system. This is what big companies always say when they acquire rivals.

Yes, indeed. They always say it, and while sometimes they achieve efficiencies-- this usually involves firing people -- it almost never benefits the consumer; prices almost always go up. Remember airline mergers? Bought a ticket lately? Despite the rhetoric of capitalism about competition, virtually all companies would prefer to be monopolies, control the industry, and set prices, guaranteeing huge profit. If they cannot, the next best thing is oligopoly, control by a few companies, with collusion so that they all make huge profits. Competition is their bugbear. Yes, we have federal regulators, but the result of their regulation has been those airline mergers. And telecommunications mergers. And financial services mergers. And banks too big to fail. So don’t count on them.

Health insurance companies are not the only mega-corporations profiting from “health care” by siphoning off money that could actually be spent improving health, or at least providing medical care. Obviously, there are drug companies (as I recently discussed in Chemotherapy, Quality of Life, and Corporate Profit on July 26, 2015), but also big pharmacy chains (like CVS, Rite Aid, and Walgreens) as well as other retailers that usually have a pharmacy (like Walmart, Kroger and Target) that have now branched out into providing health care, through what are known as “retail clinics”.

In the New England Journal of Medicine on July 15, 2015, John Iglehart writes about “The expansion of retail clinics—corporate titans vs. organized medicine”.[1] Here the case against the corporations is less clear, or at least the case in favor of organized medicine is. Iglehart points out that the opposition from organizations like the AMA, the American Academy of Family Physicians (AAFP), and American Academy of Pediatrics (AAP) have focused on the lack of continuity of care and “disruption of the patient-physician” relationship. Recently, opposition has softened (I guess folks know when they’ve lost) except from the AAP. It seems to me that these clinics provide a menu of services that primarily is focused on acute care for relatively minor infections and injuries, immunizations, and monitoring of chronic diseases like high blood pressure, and are pretty popular with the people who use them. They are conveniently located (for the people who use them), generally have little or no wait, and are staffed by professionals (usually nurse practitioners) who know what they are doing.

The problems with such retail clinics fall into two broad categories. First, when people use them inappropriately, not for acute or minor conditions, but as their usual source of care. For healthy younger people, this may be all they need. For older folks and others with chronic conditions such as high blood pressure, diabetes, hyperlipidemia, chronic lung disease, heart disease, etc., they are not sufficient. The danger is when people only seek care when they have symptoms, such as (particularly) pain, whether to such a retail clinic, traditional physician’s office, or emergency room, and ignore prevention and management of their chronic conditions. I do not fault the providers in these settings; there is evidence that they urge people with such needs to follow up with their primary provider. But, once the acute symptoms are gone, they may not. Some of this, sadly, may be financial.

The other problem is more interesting, and gets back to the financial issue. Providers and the organizations representing them (“organized medicine”) has real concerns because such retail clinics “cherry pick”, or skim the easy cases that pay for (or more than pay for) themselves, leaving physicians with the care of patients with diseases that take more time and are reimbursed less per hour (or minute) of work; this destroys the business model of primary care practice. As long as we depend upon a fee-for-service, reimbursed-for-care-provided, private medical model, this puts a real burden on physician practices which, while looking bigger than the small retail clinics, are usually tiny compared to the corporations that own those clinics.

Another medical area in which there is a clearer case of fear of competition disguising itself as virtue is in the shrill hostility of US-based medical schools, represented by the Association of American Medical Colleges (AAMC) to off-shore (mainly Caribbean-based) medical schools, as described by Robert Goldberg in Discrimination against foreign medical schools is bad for your health in the online publication “The Hill”. The argument against such schools from the AAMC is in part that the students are “lower quality”, the ones rejected by US medical schools. The flaw here is that there are many highly-qualified students who do not get into US medical schools, demonstrated by the recent dramatic expansion of the number of US schools and the class size of existing schools. Are there Caribbean schools of poor quality? Yes. Is the academic preparation of students in Caribbean schools, on average, lower than those in US schools? Probably. Is this a reason to try to put them out of business, by both bad-mouthing and trying to limit the access that their students have to educational loans? I don’t think so.

Our US medical schools get talented students, and then put them through a process that ends up producing doctors underrepresented in the primary care specialties and overrepresented in urban – and especially suburban – areas. As I have often pointed out, we produce the wrong mix of doctors who practice in the wrong mix of places. If (and it is, of course, an if) graduates of off-shore medical schools are likely to fill the medical needs not being met by graduates of US medical schools, then the title of Goldberg’s piece is correct. The same might be said for retail clinics, if indeed they were mostly present in underserved communities, but, based on the business models of their owners, they are generally not.

So, then, we see a spectrum of corporate involvement in health care ranging from the off-shore, for-profit medical school, to the acute care clinics run by large retailers, to the consolidation into oligopoly of health insurance companies, to the large pharmaceutical manufacturers. We also see a response of tepid regulation of the latter two, and protectionism by organized medicine and organized medical schools to the first two. None of these are good for our health. What would be good for our health would be the rational use of health care dollars to provide health care, for everyone, of the right kind in the right setting.

Reich ends his article with

If we continue in the direction we’re headed we’ll soon have a health insurance system dominated by two or three mammoth for-profit corporations capable of squeezing employees and consumers for all they’re worth – and handing over the profits to their shareholders and executives. The alternative is a government-run single payer system – such as is in place in almost every other advanced economy – dedicated to lower premiums and better care.

Which do you prefer?

I feel like raising my hand and waving it in the air saying “I know, I know!”

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[1]Iglehart JK, The expansion of retail clinics—corporate titans vs. organized medicine, NEJM 15 Jul 2015;373(4):301-303

Caribbean medical schools: "second chance" or serving a real need?

“Second chance med school”, by Anemona Harticollis in the New York Times July 31, 2014, is the most recent treatment of the topic of for-profit Caribbean medical schools that train American students who, in most cases, were unable to gain admission to traditional US-based schools. This is not the first time Ms. Harticollis has covered the story; they are also the subject of her article in the Times from December 22, 2010, “Medical schools in region fight Caribbean flow”, which focused on the fear of US schools that these Caribbean schools are willing to pay for the use of clinical teaching spots in hospitals that these US-based schools have been using for free. This most recent piece focuses on St. George’s University in Grenada, one of the more established and better-regarded Caribbean schools. It was briefly famous when protection of its students was one of the justifications for President Ronald Reagan’s invasion of that country in 1983. The article also mentions the other three schools that have been approved for US loans by the Department of Education. However, beyond this, and despite Harticollis’ efforts, the discussion gets murky on two counts: which Caribbean schools are under discussion, and what are the issues of concern.

 Harticollis notes that

There are more than 70 medical schools across the Caribbean, about half of them catering to Americans. A handful — including St. George’s, Saba University, Ross University in Dominica and American University of the Caribbean in St. Maarten, all of which are for-profit — have qualified for federal financial aid programs by demonstrating that their standards are comparable to those in the United States. And they report that high numbers of their test-takers — 95 percent or more — pass the United States Medical Licensing Exam Step 1, a basic science test.

But quality is all over the map in the Caribbean. A 2008 study in the journal Academic Medicine looked at 14 schools and found that the first-time pass rate on the exam ranged from 19 percent to 84 percent. Countries whose schools performed lowest were the Cayman Islands, Haiti, Cuba, Aruba, Dominican Republic, Antigua and Barbuda and, the lowest, St. Lucia, which hosted four medical schools at the time. High performers were in Jamaica, Barbados, Dominica and, the highest, Grenada.

It is irrelevant to the discussion of American medical students going to the Caribbean to look at the national medical schools in Caribbean (or any other) countries; it is only relevant to look at those which were created to educate Americans, and for the purpose of this discussion to limit it to the four that have Department of Education approval. The next thing is to understand that what is “good” or “bad” about any of these schools, or whether they should exist altogether, depends on who is looking and what their interests are. From the point of view of the individuals or companies that own these schools, the motivation is profit, but having a high-quality product increases their enrollment. From the point of view of students enrolling, the motivation is a chance to become physicians and practice in the US. From the point of view of those who are responsible for the academics of the schools themselves, it is to support students, provide a good education, and help them to be successful. From the point of view of many American medical schools, it may be to limit competition, whether that is for clinical teaching spots in hospitals such as those of the New York City public hospitals or for good students.

Most US allopathic medical schools, and their trade association, the Association of American Medical Colleges (AAMC), disparage the Caribbean medical schools in terms of quality of the students that they accept, since the majority of those attending such schools have failed to gain admission to AAMC member schools. However, since most of these AAMC schools have recently or are in the process of expanding their own classes, they must believe that there are well-qualified students who are not currently being admitted, and many of these have ended up in Caribbean schools. When AAMC campaigns to disparage the Caribbean schools, they tend to lump them all together, rather than looking at individual schools or only the 4 listed above. Unquestionably, students even at these four schools have, on average, lower grade-point averages (GPAs) and Medical College Admissions Test (MCAT) scores, and may, on average, not do as well on the USMLE exams as those from US allopathic schools, but there is great overlap. On the other hand, what is perhaps the most concerning part of education at the Caribbean schools is their clinical training – where they learn clinical medicine in the last two years of school. Are the doctors teaching them and the institutions in which they practice of high quality? Is there a well-defined curriculum? Is there standardization of the curriculum so that they can be confident that students are learning what they need to whether they are doing, say, a surgery clerkship in a NYC public hospital or a community hospital in Michigan? However, when AAMC schools are fighting with them about whether they should be able to have spots at the same places US medical schools use – say, NYC public hospitals – this point is also moot.

The most important perspective, of course, is not that of the students, the owners or faculty of the Caribbean schools, or that of the US schools and the AAMC. It is that of the American people and whether they will have access to physicians who will provide excellent care for them. The measures that are usually used for assessing the “quality” of applicants and students – MCAT and GPA and USMLE Step 1 scores – are at best peripheral, since, as I have often argued, they are scarcely relevant to being a good doctor. Does it matter that a doctor didn’t focus when they were a freshman in college and so got C’s, and so even after doing well for 3 years had a lower GPA than another? Should the chance to become a doctor be a reward for having your nose to the academic grindstone your whole life without surcease, or an opportunity for those with skill, passion, and commitment? I have often argued that the way to judge a medical school is by what its graduates do with their lives, and that the percent that enter primary care and practice in underserved areas is a major criterion. It is fine to have some of your graduates doing laboratory research or entering narrow subspecialties, but a school should be judged on its overall output and how well it provides for the needs of our nation.

There is some concern that because of recent agreements between the Accreditation Council for Graduate Medical Education (ACGME), which accredits allopathic (MD) residencies and the American Osteopathic Association (AOA), which accredits DO residencies, that osteopathic graduates will be more welcome in allopathic residencies, tending to crowd out Caribbean graduates. I would doubt that this will be an issue in the Midwest, where osteopathy is strong and most residencies already tend to prefer DOs to Caribbean grads, but it might have an impact in the East, where osteopathy is less present, and where I hear that information pre-med students get from peers (and perhaps sometimes pre-med advisors) is that Caribbean schools are preferable to US-based osteopathic schools.

Like osteopathic schools, Caribbean medical schools, including the 4 DOE-certified schools, place a much higher percentage of their graduates into primary care than do US-based allopathic schools. Is this just a result of the fact that primary care residencies are less competitive than many other specialties, so easier for students from Caribbean schools to get into? Unquestionably, this is part of the explanation, but there is also more encouragement for primary care in these schools, which do not boast a huge research enterprise or maintain tertiary-care hospitals. It also doesn’t change the fact that graduates of these schools, like many international graduates who were not US citizens, are serving the needs of our country because the US schools are not stepping up to the plate. US medical schools are very selective about taking students with high grades, and putting most of them into oversupplied specialties.

The education at Caribbean schools varies, and it would be a mistake to say that they are doing a better job than US allopathic schools. However, US schools are doing a poor job of training the doctors America needs, of ensuring that all people have equal access to quality health care, and the students graduating from Caribbean schools are often filling the holes that they leave.

Those who live in glass houses…