Market Failures in US Medicine

Monthly Review, Feb, 2001 by W. T. Whitney Jr.

Business interests increasingly call the shots in medical education and research. Such a trend is surprising, because medical education and research are costly, offer delayed results, and, ideally, benefit all--hardly, it would seem, the venue for profiteering.

An editorial in the May 13, 2000 issue of the Lancet, a British medical journal, reports on the emerging crisis in medical education.

Over the past decade academic medical centers in the USA have been struggling to adapt to an increasingly competitive, market driven health care system. To cut costs they have reduced staff and streamlined operations. It now seems that some of the country's 125 academic medical centers are destined to go out of business...others whilst surviving, are finding it increasingly difficult to fulfill their traditional missions of training young doctors, nurses, and other health workers, conducting basic and clinical research, and providing care to the patient.

The writer attributes this situation to high costs, the realities of managed care, and reduced support from the US Government--the latter a result of the 1997 Balanced Budget Act. Hospital care in university centers is usually expensive because patients there tend to be poor and have illnesses that are expensive to treat, due in part to delayed access to care. Faculty teaching time has been reduced, professors and researchers have moved into the private sector, and patient care experience for students has been cut, mainly because of early hospital discharges due to cost control measures. In some centers, the quality of education and care is already marginal, according to the Lancet editorial.

A New England Journal of Medicine editorial on May 18, 2000, notes changes in the conduct of medical research. The writer, Marcia Angell, M.D., comments on two articles that appeared in the same issue of the magazine. In one, a study on depression, the usual listings of the authors' ties to drug companies were so extensive that they had to be left out because of space considerations. The other article looked at problems associated with the shift of drug research from universities to private companies. Reluctance to release unfavorable data was noted, as was hesitancy to publish negative results and manipulation of drug trials so as to favor the products of private companies. The manufacturers were accused of using professional medical writers to ghostwrite scientific articles and of listing prestigious scientists as authors of studies in which they had no involvement.

Angell condemns the rise of partnership arrangements between pharmaceutical companies and academic centers. Many academicians have shifted research work to private companies, who in turn have made large payments to financially strapped universities. The companies gain the prestige of academic affiliation plus the ability to design and administer their own research projects. Angell notes:

The ties between clinical researchers and industry include not only grant support, but also a host of other financial arrangements. Researchers serve as consultants to companies whose products they are studying, join advisory boards and speakers bureaus, enter into patent and royalty arrangements...promote drugs and devices at company sponsored symposiums, and allow themselves to be plied with expensive gifts and trips to luxurious settings. Many also have equity interest in the company.

Angell reports that drug companies provide free meals and gifts to doctors in training. They attend lavish social events disguised as educational presentations. She continues:

When the boundaries between industry and academic medicine become as blurred as they are now, the business goals of industry influence the mission of the medical schools in multiple ways. In terms of education, medical students and house officers, under the constant tutelage of industry representatives, learn to rely on drugs and devices more than they probably should...young physicians learn that for every problem there is a pill (and a drug company representative to explain it)....The academic medical centers, in allowing themselves to become research outposts for industry, contribute to the overemphasis on drugs and devices. Finally, there is the issue of conflicts of commitment. Faculty members who do extensive work for industry may be distracted from their commitment to the school's educational mission.

The public health impact of the commercialization of education and research is still unknown. If market forces affect education and research the way they have influenced healthcare itself, then the prognosis is grim.

From the point of view of both fairness and effectiveness, healthcare, US style, has to be seen as a disaster. Access is severely limited; forty-four million US citizens--16 percent of the population--have no health insurance. Millions more have inadequate coverage. Statistical indicators of health outcome give the United States low rankings compared to other industrialized countries, specifically thirty-seventh place among 191 other health systems in a World Health Organization survey released on June 20, 2000. African-Americans, Latinos, and poor people in general are sicker, more vulnerable to serious accidents, and die earlier than the rest of the population. The life expectancy of black males is ten years less than that of white males. The 1997 infant mortality rate for African-American babies was 14.2 deaths per thousand babies in their first year of life; the rate for white babies was 6.0 deaths per thousand.