Weapons of Mass Corruption (WMCs) Part IV: Legal Protections for Bad Behaviors

As is often the case, we somehow become our own worst enemies. While there are many unethical and immoral things happening in healthcare today, we shouldn’t tarnish the image and reputation of those who simply want to provide good healthcare. As is more often the case than not, systems comprised of good people become corrupted for structural reasons. For example, while I don’t know how any hospital CEO sleeps at night knowing they are billing lower-middle-income Americans at chargemaster rates that are many times the fair value of the services they provide, we have created a system that tells them that doing so is ok (in a later piece, I’ll explain why it is NOT legal and simply has not yet been adequately litigated). These hospital CEOs are not all greedy bastards, though there are exceptions. Instead, they rationalize their immoral actions. They convince themselves that they are being shorted elsewhere and have to make up for the lost revenue. They argue that it is “cost shifting,” albeit shifting costs to those who can least afford it. And of course, when compensation is based on profitability, we also provide them with the incentive to rationalize.

The bigger structural problem is that of our own making, or, better said, our government’s making. Start, for example, with the 1945 McCarran–Ferguson Act that exempts insurance companies from Federal antitrust laws. The law was enacted to allow states to regulate insurance companies, much like public utilities. At the time, the belief was that, “the business of insurance is neither commerce or interstate trade,” and thus the Federal Government had no business regulating it under the interstate commerce clause. Jump about to 2018 and ask yourself if that still applies.

Beyond the anti-trust exemption for insurers, there are the so-called “Safe Harbor” provisions granted to various healthcare group purchasing arrangements, exempting certain parties from laws against accepting kickbacks from suppliers. This is why there are so many games being played across the healthcare supply chain, including medical devices, pharmaceuticals, and basic supplies. Such exemptions were designed to assist benevolent non-profit organizations, but that was never written into the rules. So today, these protections are used as Weapons of Mass Corruption against employers and patients. This Wall Street Journal article, published yesterday, explains it much better than I can.

At the same time, it’s clear that the scream for transparency is increasing. Here is another piece from yesterday in USA Today. I believe many in the healthcare industry think they have avoided change for another year. They defeated a bill in Colorado and are well on their way to doing the same in other states. But the people haven’t been heard yet. In Colorado, we’ll be going to the ballot in November. And the chorus screaming for change is growing across the country. It also seems our new HHS Secretary is also joining in.

I hope you’ll join the fight for a healthcare system we can all trust and that works for all of us. We are collecting signatures at a fast clip, and we’re burning through money to do so. We still need over 100,000 more signatures between now and the first week of August. Please chip in and help ensure we get this done.

    Receive David's posts right to your inbox.Join our email list.

    We ask for your state to keep you posted on local changes and movements.