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Profiteering, Waste, Corruption, And Fraud in U. S. Health Care: Worse Than You Think

Written by jgeyman   
Monday, 19 November 2018 07:00

Corporatization and growth of for-profit health care have been rapidly increasing in this country for many years, but are much worse under TrumpCare, which has relaxed many of the previous restraints that gave some protections to patients and their families under the Affordable Care Act (ACA). Here we describe some of the ways that profiteering, waste, corruption and fraud reduce monies available for patient care.


These examples, among many, illustrate how pervasive profiteering has become across all parts of our health care system.

Health care companies

  • Since the ACA was enacted eight years ago in 2010, more than 100 heads of the largest health care companies took in $9.8 billion in compensation, with an average of $20 million a year.

Private insurers

  • A national study by Covered California projects that premium increases in the individual market will range from 35 percent to more than 90 percent from 2019 to 2021.
  • The second-quarter premiums in 2017 of Aetna, the nation’s third largest insurer, spiked by 52 percent even as it scaled back ACA coverage.
  • Overpayments to private Medicaid plans are endemic in more than 30 states, often involving unnecessary or duplicative payments to providers.
  • Centene Corp., the largest private Medicaid insurer in the country, took in $1.1 billion in profits between 2014 and 2016 in California, even as its plans were among the worst performing in the state.

Nursing homes

  • “Related party transactions” bring higher profits to three-quarters of the nation’s 11,000 nursing homes without being recorded in their financial records even as they cut nursing staff and put patients at increased risk.
  • Nursing homes are increasingly providing well-reimbursed rehabilitative services to patients in their last 30 days of life; this practice is twice as common in for-profit facilities than in not-for-profits.

Drug industry

  • Big PhRMAmaximizes its profitsin many ways, including direct to consumer advertising (banned in many countries), non-rigorous “research” for marketing purposes, and lobbying against negotiated prices and importation of drugs from other countries.


  • Administrative costs, about two-thirds for billing transactions in our multi-payer system, account for 25 to 31 percent of total health expenditures, twice that in Canada and much greater than in other OECD countries; the average primary care physician in independent practice (now increasingly uncommon) spends $99,000 a year on billing costs.
  • Despite Trump’s issuance of an executive order one week after his inauguration titled “Ethics Commitments by Executive Branch Appointees.” there were 74 lobbyists working in his administration six months later, 49 of whom in agencies they once lobbied on behalf of clients
  • Despite that executive order, Trump has issued many waivers of these ethical standards for his appointees, usually to individuals who had been retained by for-profit clients and dealt with matters that could benefit those former clients.
  • Mick Mulvaney, Trump’s director of the Office of Management and Budget, admits that he has a hierarchy of whom he will talk with in a “pay or play” operation, with willingness to see lobbyists who have given him campaign donations but not those who did not.


  • Freedom Health, a private Medicare Advantage insurer in Florida, paid almost $32 million in 2017 to settle allegations that it exaggerated how sick patients were to increase profits while dropping others who were costing them too much.
  • Private Medicaid insurers in Florida received $26 million over five years for coverage of dead people, mostly because of outdated information in state data bases and lack of coordination among different agencies.
  • Cheaper association health plans, promoted by the Trump administration for employers, have a long history of fraud that has left hundreds of thousands of people with unpaid claims.
  • Two of the biggest distributors contributed to the opioid crisis by shipping more than 12 million doses of Oxycontin to a single pharmacy in a West Virginia town of less than 3,200 people over an eight-year period.
  • Today, after the opioid epidemic has claimed the lives of more than 200,000 Americans, and after the drug industry had long touted the safety of hydrocodone and oxycodone for chronic pain, federal lawsuits are pending in five states alleging fraud, racketeering and unjust profits made by defendant companies.


Despite all this bad news, there is a fix to what has become a long-term massive problem of profiteering, waste, corruption, and fraud, made even worse under the Trump administration. Single-payer expanded and improved Medicare for All, with universal coverage for all Americans, would contain costs, ensure access to quality of health care, and rein in the above abuses in a simplified system serving the common good, not the greed of corporate interests.

William Rivers Pitt, senior editor and lead columnist at Truthout and bestselling author of four books, had this to say after experiencing his own very expensive bout with our health care system:

Health care is an unalienable right, up there with freedom of speech, and it is front and center in our founding document [the Declaration of Independence]. Treating it as anything else and especially treating it as a cash machine fed by illness and injury, should be considered a criminal act. Ultimately, the solution is not to be found by expanding the reach of the insurance industry, or any other reform that keeps health care a for-profit phenomenon. The solution, as it turns out, is simplicity itself [single payer Medicare for All], and has been adopted by a vast majority of the world’s developed nations to excellent effect.

Adapted in part from my new recently released book, Trumpcare: Lies, Broken Promises, How it is Failing, And What Should Be Done

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