Health Care Reform Articles - December 5, 2023

Editor's Note -

The following essay was posted in an online newsletter called "Persuasion". For many years, I have thought of modern medicine, in the embrace of the medical- industrial complex, as "the largest and most successful extortion racket ever invented", and wondered whether it's killing more people than it's keeping alive.   

Read the following essay and see what you think.  Needless to say, my thoughts on this subject have not always been received enthusiastically by my colleagues and their corporate masters.

- SPC

The Crisis in Medicine: A Provocation

A cardiologist argues that contemporary medicine may harm as much as help.

by Akshay Pendyal - Persuasion - November 22, 2023

I was the only one of my group of friends from college to go to medical school—something I thought about often in my twenties, when I was confined to a library cubicle and trying to memorize the names of obscure diseases. During brief and infrequent phone calls to catch up, I’d hear about their lives in Manhattan and Chicago, which seemed to consist, when not trading derivatives, of sipping expensive cocktails. After hanging up, I’d feel bitter and envious. On more than one occasion, I contemplated dropping out. 

Probably as a coping mechanism more than anything else, I began to tell myself a certain sort of story. At least I was doing something to better the human condition; my college buddies, friends though they were, were simply manipulating 1s and 0s and making the rich richer. At one point, I remember coming across an interview with Jonathan Safran Foer in the New Yorker. “For a long time, I thought I would like to be a doctor,” he said. “Such a good profession. So explicitly good. Never a waste of time. No obstetrician goes home at the end of a long day and says, ‘I delivered four babies. What’s the point?’” He’s right, damnit, I thought. This sucks, but it matters. 

This conviction carried me for several years—through my internship and residency, even past my fellowship. But now that I’ve been out in practice for a few years, it has begun to feel a bit less ironclad. At times, I’ve begun to wonder if medicine may be less meaningful, its mission less unassailable, than we like to let on. 

This is, admittedly, a bit of a provocation. Modern biomedicine has, of course, delivered breakthrough treatments over the past century, treatments which have transformed the care of diseases which were once considered incurable. Aspirin for heart attacks. Insulin for diabetes. Potent antibiotics to treat infections caused by highly virulent organisms. These interventions are true marvels of the modern age: they're safe and effective for conditions that affect millions. We should rightfully celebrate such treatments and work to make them widely and freely available.

The problem is that for other types of treatments—treatments which now constitute the bulk of medical care—the outlook is far less sanguine. This seems especially pronounced in my field, cardiology. To take just one example: trial after trial has demonstrated the limited effectiveness of stents for many patients with blocked or narrowed heart arteries. But, undeterred, cardiologists have plowed ahead, depositing these little expandable tubes via catheters into hundreds of thousands of patients every year, committing them to long-term medications, and, quite often, setting them up for a lifetime of continued unnecessary testing.

At times, I even find myself wondering whether we’ve reached a hard limit on progress, at least when it comes to the sorts of “blockbuster” treatments I mentioned earlier—treatments like insulin, which, though it was discovered more than a lifetime ago, has prolonged the lives of and alleviated the suffering of millions. 

Now, our most highly-touted novel treatments also seem to have the nasty habit of failing to replicate in large clinical trials. It’s a familiar scene: a “late-breaking” trial at an international medical conference, the audience waiting with hushed anticipation for the big reveal. A two-fold decrease in mortality! A 30% reduction in hospitalizations! The story gets picked up by all the newswires, the TV commercials for drug X (“ask your doctor about…”) start to appear. Never mind that a subsequent trial—or two, or three—enrolling more patients and performed the following year demonstrates no effect. No matter, use of the device will continue to increase, as health care expenditures in the United States inch ever closer to 20% of GDP.

And then there’s the work itself. Consider the transformation that medicine, as a vocation, has undergone. As the sociologist Paul Starr wrote in the 1980s, physicians will come to experience “more regulation of the pace and routines of work.” They will be required to meet “standard[s] of performance, whether measured in revenues generated or patients treated per hour.” Starr was prophetic. These days, the job often resembles middle management: the day to day drudgery, the hours in front of a computer, the electronic health record-keeping systems which inflict “death by a thousand clicks.” The operative term in healthcare now is “productivity”: the work of trying to make people better reduced to the “relative value unit,” or RVU, which, along with the QALY, or “quality-adjusted life-year,” have conveniently allowed us to mathematize human flourishing and suffering. 

But wait, you might ask, does any of this really make medicine any less meaningful? Could this not simply be a function of the field’s bureaucratization and corporatization; of the well-known incursion of drug and insurance companies into what should be a publicly funded enterprise for the collective good; of misplaced research priorities; of the “publish or perish” mentality that dominates biomedical research (and therefore results in volumes of low-quality, duplicative work)? These well-known factors are surely responsible for the degradation of the job as well as the experience of the patient, you might say, but they hardly make the job itself worthless.

Perhaps. But I do worry that there may be something deeper going on here. Along with the diminishing efficacy of our treatments and the proletarianization of the work of healing is the nagging sense that we may actually be hurting people. And—critically, depressingly—we may be hurting them just as much as we are helping.

Over twenty years ago, the Institute of Medicine famously estimated that nearly 100,000 patients die yearly in hospitals due to medical errors. An egregious figure, and one that doesn't even really capture the scope of the problem. Giving the wrong dose of a medication, or overlooking a severe allergy—these are certainly elements of the healthcare system’s proclivity to harm. But a more apt descriptor may be what the philosopher and theologian Ivan Illich described as “iatrogenesis”—the tendency of an industrialized society to medicalize all of its inhabitants, to see people as either diseased or pre-diseased and treat them as such. In this way, says Illich, “the medical establishment has become a major threat to health.”

An elderly patient I saw recently had a severe narrowing of one of her heart valves, which had been present for several years. She felt fine but nevertheless underwent an elective catheter-based procedure to receive a new valve. The new valve tore her aorta, and she was rushed to the OR for emergency open heart surgery. Postoperatively, her kidneys failed, rendering her dialysis-dependent. The blood thinners she had been prescribed caused bleeding in her brain and she was wheelchair-bound. What did I have to offer this patient at our first visit following her protracted hospitalization? Perhaps the most important treatment of our contemporary era: combing through her medication list and eliminating extraneous prescriptions (high cholesterol, at this juncture, felt like the least of her problems) and telling her that I was sorry.

The medical meliorist will be quick to cry foul, to say that this is an extreme example, hardly representative; that complications happen. All of this may be true. But even seemingly benign procedures—all of those “routine” heart catheterizations I alluded to above—carry silent consequences, the severity of which we are only beginning to realize.

There are certain boilerplate policy prescriptions that tend to be trotted out in response to these sorts of criticisms. A common one is that this is all simply a problem of supply-demand mismatch. Increase the number of doctors, the argument goes, and you would relieve the pressure that doctors face to churn through patients and overtest and overtreat. It’s a simple problem of elasticity. 

But the economics of healthcare are unlike those of, say, automobiles, as Kenneth Arrow argued sixty years ago. In particular, he wrote, “[t]he special economic problems of medical care can be explained as adaptations to the existence of uncertainty in the incidence of disease and the efficacy of treatment.” Old illnesses recede, new ones emerge. Complex, high-dollar treatments are hailed as the “next big thing,” only to have their unforeseen and untoward effects discovered years—often decades—later. By then, of course, it’s too late. The funhouse-mirror economics of healthcare will have done its work, where the mere existence of a new therapy and its inevitable increase in supply will paradoxically result in an increase in demand. Hundreds of thousands of devices implanted and drugs prescribed, only to be eventually recalled and pulled from shelves. 

So what, then, are our choices? How do we resist these forces, in order to ensure that the work of healing remains meaningful? Because for all its faults—and despite the near-fatal flaws I’ve spent the last couple thousand words enumerating—it’s still hard to imagine doing anything else.

When it comes to medicine, I can speak only to the approach that I’ve come to adopt in recent years: do less. In fact, don’t be afraid of doing nothing at all. As medical students, we all solemnly took Hippocrates’ famous oath, but we would also do well to remember his “rule of thirds”—one third of patients will get better if left alone; one third won’t respond to treatment; and it’s only the remaining third who will derive some (often marginal) benefit from our armamentarium of pills and machines.

Finally, and perhaps most importantly, recognize that ordering tests and performing procedures is no substitute for treating people with dignity, for understanding their station in life and meeting them accordingly. The smallest of interventions, but one that has the potential to be the most consequential. And one, I’m afraid, that may be our only hope.

Akshay Pendyal is a physician and writer living in North Carolina.

https://www.persuasion.community/p/the-crisis-in-medicine-a-provocation?utm_source=post-email-title&publication_id=61579&post_id=139056080&utm_campaign=email-post-title&isFreemail=true&r=86953&utm_medium=email 

 

Why Are Nonprofit Hospitals Focused More on Dollars Than Patients

By Amol S. Navathe - NYT - November 30, 2023

Nonprofit hospitals have been caught doing some surprising things, given how they are supposed to serve the public good in exchange for being exempt from federal, state and local taxes — exemptions that added up to $28 billion in 2020.

Detailed media reports show them hounding poor patients for money, cutting nurse staffing too aggressively and giving preferential treatment to the rich over the poor. Nurses and other workers recently resorted to strikes to improve workplace safety at Kaiser Permanente and the Robert Wood Johnson University Hospital in New Brunswick, N.J.

That’s not the end of it. Nonprofit executives have embarked on an acquisition spree, assembling huge systems of hospitals and physician practices to raise prices and increase profits. Ample evidence indicates that the growth of these giant systems makes health care less affordable for patients, families and businesses.

Over the past year, a new hospital strategy has come to the fore, the cross-market merger. In the past, most mergers and acquisitions involved hospitals or physician groups in the same geographic area. Now health care systems are reaching far and wide to find other hospitals to acquire. This is exemplified by the California-based Kaiser’s acquisition of Geisinger Health in Pennsylvania announced in April. Since then, hospitals in Missouri, Texas and New Mexico were involved in two other cross-market mergers. In another example, Advocate Aurora Health’s merger late last year with Atrium Health created a juggernaut with 67 hospitals strung across six states, from Wisconsin to North Carolina. We are witnessing the advent of the new American megahospital system.

Calling these hospitals nonprofits can be confusing. It doesn’t mean they can’t make money. What it means is that they are considered charities by the Internal Revenue Service (as opposed to being owned by investors, like for-profit hospitals). And in return for their tax exemptions, these institutions are supposed to invest the money that would have gone to taxes into their communities by lowering health care costs, providing community health services and free care to those unable to afford it and conducting research. These hospitals proliferated after federal tax rules about 50 years ago made it easier to qualify for tax exemptions. They now make up more than half of the nation’s hospitals.

So why are nonprofit hospitals behaving in ways that seem to focus more on dollars than patients? Hospitals are undergoing a reckoning about their role in the national health system. The United States will require fewer hospital beds in the future if current trends continue. This looming likelihood, plus financial challenges from the pandemic, a severe worker shortage, rising inflation and stock market volatility have put nonprofit hospitals in survival mode.

Accordingly, they have prioritized protecting their finances, focusing on scale and market power. Unfortunately, these actions too often come at the expense of their mission to serve their communities. This has meant less charity care for patients who cannot afford expensive surgeries or emergency room visits and higher prices for those who can.

How do we get hospitals to refocus on their communities rather than on profits? Through their boards of directors. Their role is to tell hospital executives what to focus on and prioritize. And you would think that focusing on the mission would be the top priority, though boards aren’t doing this consistently.

The key is getting boards to act in service of the mission. They need greater accountability. And that’s where lawmakers and policymakers can help, by finding ways to encourage or require boards to resist the growth interests common to organizations. Hospital systems, like living organisms, tend to put survival and proliferation above all else.

A good first step is to reform how boards reward hospital executives to accomplish the mission. Instead of paying leaders to pursue conventional financial goals, executives’ compensation should be tied to metrics reflecting the mission. Perhaps the most visible example of this is the heavy focus of nonprofit chief executive compensation on financial performance. A survey by the American College of Healthcare Executives noted that only about a quarter of nonprofit hospitals tied chief executive bonuses to community services. This prioritizes revenue from patient care over caring for patients. Instead, health care organizations should tie meaningful amounts of executive compensation to metrics like reducing disparities in care.

This is feasible. As the same survey indicates, some hospitals are already doing this. We need capable leaders charged with executing the mission, even if it means making a hospital smaller.

And policymakers can help, too, by creating clearer standards for measuring community benefits. This will help nonprofit boards to provide incentives to executives around community-based objectives. A study published last year in the journal Frontiers in Public Health found that for most hospitals, expectations are vague and what is considered community service is difficult to document, quantify and assess.

Policymakers can also hold boards more accountable. The I.R.S. and state and local governments can look more closely at whether hospitals are rewarding their executives to deliver community benefits. Regulatory action may be required. And there are examples of this. In Pennsylvania, four hospitals lost their exemptions from local property taxes in part because eye-popping chief executive compensation didn’t align with its nonprofit mission. It is undeniable that executives will prioritize what they get paid to accomplish.

A second related issue is that too many boards are full of members who have financial skills or have made big donations. To shift toward their mission would almost certainly require hospitals to reconstitute their boards. They would need to replace some financially minded members with community-minded ones. And regulators like the I.R.S. may need to remove the tax-advantaged status for egregious actors so that boards take this threat seriously, just as in Pennsylvania.

While more regulation is not the panacea for U.S. health care, nonprofit boards may need even more help to reprioritize if they cannot do it themselves. There is an argument to put limits on profits for nonprofit organizations. Unlike health insurers, whose administrative costs and profit margins are capped at 15 to 20 percent, nonprofit hospitals have no limits. This could be fixed through legislation by Congress.

Ultimately, we need hospital boards to step up and chart their own courses. It is precisely because there is no one-size-fits-all solution that we need boards to organize around the mission. The needs of a rural community are different from those of an urban area around an academic center. Further, hospitals in rural areas often provide not just care but also much-needed jobs. But that’s why our best chance to fix hospitals may lie in activating boards for the common good.

Amol S. Navathe is an assistant professor of health policy and medicine at the University of Pennsylvania. 

https://www.nytimes.com/2023/11/30/opinion/hospitals-nonprofit-community.html 

 

Why Doctors and Pharmacists Are in Revolt

by Noam Scheiber - NYT - December 3, 2023

Dr. John Wust does not come off as a labor agitator. A longtime obstetrician-gynecologist from Louisiana with a penchant for bow ties, Dr. Wust spent the first 15 years of his career as a partner in a small business — that is, running his own practice with colleagues.

Long after he took a position at Allina Health, a large nonprofit health care system based in Minnesota, in 2009, he did not see himself as the kind of employee who might benefit from collective bargaining.

But that changed in the months leading up to March, when his group of more than 100 doctors at an Allina hospital near Minneapolis voted to unionize. Dr. Wust, who has spoken with colleagues about the potential benefits of a union, said doctors were at a loss on how to ease their unsustainable workload because they had less input at the hospital than ever before.

“The way the system is going, I didn’t see any other solution legally available to us,” Dr. Wust said.

At the time he and his colleagues voted to unionize, they were one of the largest groups of private-sector doctors ever to do so. But by October, that distinction went to a group that included about 400 primary-care physicians employed in clinics that are also owned by Allina. The union that represents them, the Doctors Council of the Service Employees International Union, says doctors from dozens of facilities around the country have inquired about organizing over the past few years.

And doctors are not the only health professionals who are unionizing or protesting in greater numbers. Health care workers, many of them nurses, held eight major work stoppages last year — the most in a decade — and are on pace to match or exceed that number this year. This fall, dozens of nonunion pharmacists at CVS and Walgreens stores called in sick or walked off the job to protest understaffing, many for a full day or more.

The reasons for the recent labor actions appear straightforward. Doctors, nurses and pharmacists said they were being asked to do more as staffing dwindles, leading to exhaustion and anxiety about putting patients at risk. Many said that they were stretched to the limit after the pandemic began, and that their work demands never fully subsided.

But in each case, the explanation runs deeper: A longer-term consolidation of health care companies has left workers feeling powerless in big bureaucracies. They say the trend has left them with little room to exercise their professional judgment.

“People do feel put upon — that’s real,” said John August, an expert on health care labor relations at the Scheinman Institute at Cornell University. “The corporate structures in health care are not evil, but they have not evolved to the point of understanding how to engage” with health workers.

Allina said that it had made progress on reducing doctors’ workloads and that it was partnering with health care workers to address outstanding issues. CVS said it was making “targeted investments” in pharmacies to improve staffing in response to employees’ feedback, while Walgreens said it was committed to ensuring that workers had the support they needed. Walgreens added that it had invested more than $400 million over two years to recruit and retain staff members.

Professionals in a variety of fields have protested similar developments in recent years. Schoolteachers, college instructors and journalists have gone on strike or unionized amid declining budgets and the rise of performance metrics that they feel are more suited to sales representatives than to guardians of certain norms and best practices.

But the trend is particularly pronounced in health care, whose practitioners once enjoyed platinum-level social status at high school reunions and Thanksgiving dinners.

For years, many doctors and pharmacists believed they stood largely outside the traditional management-labor hierarchy. Now, they feel smothered by it. The result is a growing worker consciousness among people who haven’t always exhibited one — a sense that they are subordinates constantly at odds with their overseers.

“I realized at end of the day that all of us are workers, no matter how elite we’re perceived to be,” said Dr. Alia Sharif, a colleague of Dr. Wust’s at Allina who was heavily involved in the union campaign. “We’re seen as cogs in the wheel. You can be a physician or a factory worker, and you’re treated exactly the same way by these large corporations.”

The details vary across health care fields, but the trend lines are similar: A before-times in which health care professionals say they had the leeway and resources to do their jobs properly, followed by what they see as a descent into the ranks of the micromanaged.

As a pharmacy intern and pharmacist at CVS in Massachusetts beginning in the late 1990s, Dr. Ed Smith found the stores consistently well staffed. He said pharmacists had time to develop relationships with patients.

Around 2004, he became a district manager in the Boston area, overseeing roughly 20 locations for the company. Dr. Smith said CVS executives were attentive to input from pharmacists — raising pay for technicians if there was a shortage, or upgrading clunky software. “Every decision was based on something that we said we needed,” he recalled.

Dr. Wust looked back on his days in an independent practice of about 25 doctors with a similar wistfulness. “We were all partners,” he said. “It was relative workplace democracy. Everybody got a vote. Everybody’s concerns were heard.”

Over time, however, consolidation and the rise of ever-larger health care corporations left workers with less influence.

As so-called pharmacy benefit managers, which negotiate discounts with pharmacies on behalf of insurers and employers, bought up rivals, retail giants like Walgreens and CVS made acquisitions as well, to avoid losing market power.

The chains closed many of their newly owned locations, driving more customers to existing stores. They sought to cut costs, especially labor costs, as the benefit managers reined in drug prices.

Around 2015, Dr. Smith stepped down from his role as a district manager and became a frontline pharmacist again, reluctant to supervise co-workers under conditions he considered subpar. “I couldn’t ask my pharmacists to do what I couldn’t accomplish,” he said.

Among his frustrations, he said, was the need to strictly limit the number of workers each pharmacy could schedule. “Every week that you’re over your labor budget, you get a call, regardless of prescription volume, from your district manager,” Dr. Smith said. “If your budget for tech hours is 100 and you used 110, you get a phone call. It’s not much money — maybe $180 — but you’re getting a call.”

Asked how labor budgets were applied, CVS said managers were “provided guidance” based on expected volume and other factors, with adjustments made to ensure adequate staffing.

Dr. Smith and other current and former CVS and Walgreens pharmacists said their stores’ allotment of hours for pharmacists and pharmacy technicians had dropped most years in the decade before the pandemic.

The pharmacists also described being held to increasingly strict performance metrics, such as how quickly they answered the phone, the portion of prescriptions that are filled for 90 days rather than 30 or 60 days (longer prescriptions mean more money up front) and calls made urging people to fill or pick up prescriptions.

For years, Walgreens and CVS pharmacists could largely ignore these narrower metrics so long as overall profits and customer satisfaction stayed high. But in the early to mid-2010s, both companies elevated the importance of these indicators, several pharmacists said.

At Walgreens, many pharmacy managers began reporting to a districtwide retail supervisor rather than a supervisor trained as a pharmacist. “It coincided with more pushing of the metrics,” said Dr. Sarah Knolhoff, a Walgreens pharmacist from 2009 to 2022.

“Never having been a pharmacist, they would push the pharmacy the same way they would push the front end,” Dr. Knolhoff added, alluding to the rest of the store.

CVS said that performance metrics were needed to ensure safety and efficiency for patients but that in recent years it had reduced the number of metrics it tracked. Walgreens announced last year that it would no longer rely on “task-based metrics” in performance reviews for pharmacy staff members, though it still used them to track store-level performance.

‘Corporate tells you how to manage your patient.’

The transition for doctors and nurses came around the same time. As independent medical practices found they had lost leverage in negotiating reimbursement rates with insurers, many doctors went in house at larger health systems, which could use their size to secure better deals.

The passing of the Affordable Care Act in 2010, along with federal rule-making efforts, rewarded bigness by tying reimbursement to certain health outcomes, like the portion of patients who must be readmitted. Getting bigger helped a hospital system diversify its patient population, the way an insurer does, so that certain groups of high-risk patients weren’t financially ruinous.

Administrators increasingly evaluated their medical staff according to similar metrics tied to patients’ health and put a variety of incentives and mandates in place.

Doctors and nurses chafed at the changes. “Corporate tells you how to manage your patient,” said Dr. Frances Quee, president of the Doctors Council, which represents about 3,000 doctors, most of them at public hospitals. “You know that’s not how you’re supposed to manage your patient, but you can’t say anything because you’re scared you’re going to be fired.”

At Allina, primary care doctors are given incentives to talk to patients about their high-risk or chronic medical conditions, even if those conditions are well managed and aren’t relevant to a visit.

“Is that a valuable use of our 25 minutes together?” said Dr. Matt Hoffman, a primary care doctor at an Allina clinic that unionized in October. “No, but it means Allina gets more money from Medicare.”

Dr. Wust said hospital administrators increasingly relied on management theories borrowed from other industries, like manufacturing, that sought to minimize excess capacity.

For example, he said, obstetricians at Allina had one or two hold spots a day of 15 minutes each, in case of a patient emergency, when he began working at the system. Several years ago, Allina took away these buffers, instructing obstetricians to double book instead.

Asked about the hold spots, Allina said, “We’re always looking at how we’re using our resources to deliver high-quality care.” It said the incentives tied to high-risk conditions could still be achieved if a doctor stated that the problem was no longer relevant. Dr. Josh Scheck, another Allina primary care doctor, said he found the nudge helpful and not very time consuming to address. He said the health system had allowed his clinic to experiment with ways to make its work flow more efficient.

Other health workers complained that some of the metrics they’re evaluated on, like patient satisfaction, made them feel like retail clerks or dining employees rather than medical professionals.

Adam Higman, an expert on hospital operations at the consulting firm Press Ganey, said consolidation and the increased use of metrics had arisen in response to a need to lower U.S. health care costs, long the world’s highest per capita, and ensure that the spending actually benefits patients.

He pointed to data showing that more empathetic and communicative doctors and nurses — factors that affect patients’ experience — lead to healthier patients.

But Mr. Higman acknowledged that many health systems had increased tensions with doctors and nurses by failing to involve them more in developing and putting in place the system of metrics on which they are judged. “The progressive, smart health systems and medical groups are listening to physicians, looking at their experience and turnover and creating venues to have discussions,” he said. “If not, that’s one of the contributing factors to organizing.”

‘I would not have put unions and physicians in the same mind.’

The pandemic magnified these strains.

As retail chains rolled out Covid-19 vaccines, pharmacists complained of being overworked to the point of skipping bathroom breaks and said they worried constantly about making mistakes that could harm patients. (CVS said it began closing most pharmacies for 30 minutes each afternoon last year to give pharmacists a consistent break. Walgreens said “dedicated pharmacist meal breaks” began in all stores in 2020.)

Doctors and nurses found that their already backed-up inboxes were suddenly bursting, as frightened patients clamored for medical advice. Administrators sought to squeeze more patients into overloaded hospitals and clinics.

The breaking point came when the height of the pandemic passed, but conditions barely improved, according to many workers. Although health systems had promised to add staffing, many found themselves running deficits amid inflation and a shortage of doctors and nurses.

Professionals who had never considered themselves candidates for union membership began to organize. When she started at Allina in 2009, Dr. Sharif said, “I would not have put unions and physicians in the same mind — it would have been a totally alien concept.” She reached out to the Doctors Council last year for help unionizing her colleagues.

Dr. Quee, the union president, said that inquiries from doctors were up more than threefold since the second group of Allina doctors unionized last month — and that as a result, the Doctors Council was hiring more organizers. (Allina is appealing the outcome of the union vote at the hospital but not at its clinics.) Even pharmacists are reaching out. “Two days ago, pharmacists called me from Florida,” she said. “We’ve never done pharmacists before.”

In September, Dr. Smith, who long ago shifted from CVS district manager to frontline pharmacist, took on an additional role: labor organizer. After CVS fired a district manager who had refused to close some stores on weekends to address understaffing, Dr. Smith helped organize a series of coordinated sick days and walkouts in the Kansas City, Mo., area, where he has worked for the company in recent years.

The walkouts affected roughly 20 locations and drew the company’s chief pharmacy officer and a top human resources official to town for a meeting with the renegades. A few weeks later, CVS said it would rein in vaccination appointments and add work hours for pharmacy technicians, though it had not increased their pay.

CVS said several Kansas City-area pharmacists had called in sick on certain days in September, “resulting in about 10 unexpected pharmacy closures” on one day and part of another. In response, it said, executives met with pharmacists to listen to and address their concerns.

During an interview in October, while Dr. Smith and his colleagues were still awaiting the company’s response, he made clear that his patience had run out. “I’ve been asking and asking and asking for improvements for years,” he said. “Now we’re not asking any more — we’re demanding it.”

https://www.nytimes.com/2023/12/03/business/economy/doctors-pharmacists-labor-unions.html#commentsContainer 

 Editor's Note -

I encourage readers to click on the above hot-link, and read the readers' comments.

As for the following clipping, mergers are affecting al lot more than airlines.  Merger-mania is running rampant in health care.

- SPC

 

Opinion | Mergers Like JetBlue’s Proposed Acquisition of Spirit Usually Turn Out to Be Bad

by Tim Wu - NYT - December 3, 2023

If there’s one lesson we’ve learned from the recent history of the airline industry, it’s this: The bigger airlines get, the worse they become. The prices get higher, the seats smaller, the service ever snarkier.

The mergers over the past 15 years that produced the “big three” of United Airlines, Delta Air Lines, and American Airlines (eliminating Continental, Northwest and US Airways) — which, along with Southwest Airlines, now dominate the market — have not done Americans any favors. We’ve ended up with airlines that offer less for more and have become better than ever at getting bailouts from Congress.

That’s the context in which JetBlue Airways is now seeking to buy Spirit Airlines, the nation’s largest ultra-low-cost airline. The deal, if permitted to go through, would make JetBlue the fifth-largest airline in the country and further reduce competition in the industry.

Anticompetitive mergers are illegal under federal antitrust law, so the Justice Department has sued to block the deal. At trial last month in federal court in Boston, JetBlue argued, contrary to common sense and basic economic logic, that eliminating an ultra-low-cost carrier would bring prices down. In fact, it was revealed at trial that JetBlue’s own analysts have estimated that when Spirit stops flying a route, the average fare goes up 30 percent.

This should be a straightforward case. The judge presiding over the trial, William Young, who will make the final determination, ought to side with the government.

But that doesn’t mean he will. In recent decades, corporate executives have repeatedly attempted blatantly anticompetitive mergers in the hope — very often realized — that the case would come before a favorable judge. The strategy has proved to be low-risk and immensely profitable over the past two decades, not to mention personally enriching for many executives.

As a result, we now have an economy of consolidated sectors, including not just airlines, but also such key areas as health insurance, big tech and agriculture. Consolidation often yields high corporate profits, but also higher prices for consumers and lower wages for employees, contributing to economic inequality and fueling a pervasive popular feeling that the system is unfair.

Congress never meant for the merger laws to be so lax. The Clayton Antitrust Act of 1914 and the Anti-Merger Act of 1950 command the executive branch and the courts to ban mergers that “substantially lessen competition” so as to stop “economic concentration in the American economy.”

Yet since the 1980s, the judiciary has fallen into the bad habit of deferring not to the original letter or spirit of the federal antitrust statute — but rather to the testimony of economic experts paid to argue that nearly any given merger might actually be good for consumers. In the hands of highly talented economists, even mergers that anyone can see will limit competition can be depicted as somehow generating more of it.

Most of the time, however, mergers that seem bad really are bad. A comprehensive meta-analysis of 50 studies covering more than 3,000 contested mergers in the United States in recent decades found that “most studied mergers result in competitive harm, usually in the form of higher price.” Whether it’s the combination of Ticketmaster and LiveNation to dominate event ticketing, the acquisition of Sprint by T-Mobile, the buyout of Instagram by Facebook or the consolidation of meatpacking and agricultural products, too many plainly competition-stifling mergers have been greenlit.

And now we have the effort to eliminate Spirit. How does JetBlue purport to argue that the merger won’t “substantially lessen competition”? Its lawyers and lobbyists have constructed a narrative about how, after it acquires Spirit, a larger JetBlue will compete more effectively with Delta, United and American — and thus eventually bring prices down.

But this story of the little guys joining forces to fight the big guys is a made-for-trial fantasy. JetBlue’s largest shareholders are also, it happens, major owners of United, Delta and American. It is in neither the investors’ nor JetBlue’s management’s interests to pick a fight with the big guys. They would benefit more from working in harmony to reduce the number of seats available, keep prices high and downgrade frequent flier points. That is the proven path to profit in the industry.

That JetBlue operates at the mercy of its main investors has been clear since 2014. There was a time, back at the turn of the century, when JetBlue was a genuinely innovative airline. Its first chief executives, David Neeleman and David Barger, were idealists of a sort, delivering leather seats in economy class with comfortable legroom. The early JetBlue was popular: small and friendly and cheaper than, say, American.

It was also profitable — but not profitable enough. In 2014, Wall Street analysts turned on JetBlue and its chief executive at the time, Mr. Barger, accusing the company of being too consumer-focused. Investors demanded more fees and the cutting of less profitable routes. Unfortunately for customers, Wall Street won, Mr. Barger was thrown out and JetBlue started charging fees for all sorts of things. It is now just as money-grubbing and unexceptional in service as the bigger airlines.

What JetBlue wants now is what Delta, United and American have: the ability to participate in what looks like price-fixing without going to jail for it. For years, the big airlines have been accused of coordinating on prices and jointly controlling the supply of airline seats on key routes. Corporate earning calls have even been shown to result in reduced seating capacity. That yields high profits in good years. In bad years, the airlines turn to Congress for multibillion-dollar bailouts. Airlines like Spirit pose a problem for this cartel; JetBlue is looking to do everyone a favor, and to join in the profits, by eliminating it.

Companies cannot be expected to discipline themselves when the rewards from reducing competition are so large. That’s why we have laws to protect the public — specifically, those that prohibit mergers that “substantially lessen competition.” But we don’t really have these laws if the judiciary follows economic fashion instead of congressional directive.

Enforcement agencies like the Justice Department and the Federal Trade Commission have also contributed to this failure over the years — but these agencies, to their credit, have recently seen the error of their ways. The courts need to follow suit and respect what Congress wanted when it passed the law.

https://www.blogger.com/blog/post/edit/3936036848977011940/6095912153637714112