Corporate misbehavior in the health-care sector is widespread: irresponsible opiate marketing, misrepresentation of research data, price gouging, and on and on. Some see it as capitalism run amok.
In one sense, this isn’t surprising. As the Business Roundtable acknowledged in a recent statement, American companies have too long prioritized shareholders and profits over the interests of employees, customers, and communities. Health-care companies are businesses, so why shouldn’t we expect them to act the same way?
Why? Because health care isn’t just another consumer product. It is more than that. The Hippocratic ideals of putting patients first are ingrained in our culture and reflected in the regulation of medical licenses and malpractice law. But although Hippocratic ideals have long been the basis of expectations for medical professionals, they haven’t yet been formally applied to health care companies. This is a major shortcoming in an era when the actions of large health systems, pharmaceutical companies, device companies, and insurance companies can have even greater effects on patients than the actions of individual clinicians.
All of which is why I, a physician working in the clinical laboratory industry, am excited about the growing interest in stakeholder capitalism that the Business Roundtable laid out: for a business to be sustainable over the long term, it must explicitly address the interests of all major stakeholders. Owners (shareholders) are an important stakeholder group, but so are customers, employees, and the community in which the business operates.
Of all industry sectors, I am convinced that health care has the most to gain from this model. Health care may also have the clearest path to stakeholder capitalism due to some of its distinctive characteristics.
First, the health-care industry includes groups that share a common ethical culture and language. These include physicians, nurses, scientists, and other professionals, all of whom are schooled in medical ethics during training. It also includes mission-driven hospitals and health systems, including many with religious affiliations.
Second, health care will find it easier than many other industries to find the right balance among its various groups. The doctrine of shareholder supremacy has a certain elegance in that it simplifies the decision about which group comes first — shareholders. Medical ethics and patient-centered capitalism offer an equally elegant solution: patients come first and all others, including shareholders, come second.
Third, health care has a mature and well-defined set of ethical principles against which to measure corporate behavior. The ethical codes of the American Medical Association and the American Nurses Association are well-known examples, though they are worded specifically for individual practitioners. Another example is the Belmont Report, commissioned by the U.S. government in 1978, which laid out rules for conducting research on human subjects. All of these codes are based on three core principles: respect for persons, beneficence, and justice.
Respect for persons includes autonomy and informed consent. If medical device manufacturers followed this principle, they would have to disclose to patients how likely they will be to actually benefit from a particular hip replacement or pacemaker or cardiac stent. They would also have to disclose whether there might be a competing device with a higher success rate and a lower complication rate.
Beneficence includes the Hippocratic maxim of “Do no harm.” If oxycodone and fentanyl manufacturers had followed this principle, they would not have downplayed the abuse potential of these drugs in their marketing messages to doctors.
Justice involves fairness for all patients. Health insurers following this principle would need to ensure equitable coverage across all ages, genders, disease categories — including mental health — and among vulnerable populations.
Fourth, health care guided by patient-centered capitalism offers a rich set of structural opportunities for accountability to all stakeholders. Large health systems and group-purchasing organizations, for example, have enormous market power over suppliers of medical products. This power is currently leveraged mainly to obtain lower prices, but it can just as easily be used to preferentially choose suppliers whose marketing meets scientific standards of objectivity, who contribute all clinical data to public registries, and who meet other defined standards.
Likewise, medical professionals such as physicians and nurses have enormous potential influence on health care companies. They can openly — and ideally collectively — declare their expectations regarding the companies they work for and whose products they use, and then back up these statements with their career choices and medical product choices.
There is an obvious accountability role for regulatory agencies in patient-centered capitalism such as the Food and Drug Administration and the Centers for Medicare and Medicaid Services, but distributed mutual accountability will be more robust than one-directional regulation alone.
Changing corporate culture across an industry as huge as health care will take time. But the barriers can be overcome. And the Business Roundtable just took away one of them — the business doctrine of shareholder supremacy — or at least signaled a willingness to do so.
The public expects and deserves ethical actions not just from individual health care workers but also from the organizations and companies in this sector. It’s time we make this happen. Patient-centered capitalism can point the way.
Brian R. Jackson, M.D., is an associate professor at the University of Utah School of Medicine, as well as a medical director at ARUP Laboratories, a nonprofit enterprise of the University of Utah.