Medicine and Lucre

While looking at three recent books, physician Luke Messac explains why the public has legitimate reasons to distrust our healthcare system.

By Luke MessacApril 14, 2025

• Science & Technology

• Economics and Finance

IN THE 1990s, when I was a child growing up in a Catholic community outside Boston, medicine was a calling akin to joining the clergy. Hospitals were monuments to the incalculable dignity of each human life. And like the priest, the doctor was an authority figure graced with what were—surely—blameless motives. (These were, I should note, the years prior to the widespread acceptance of the reality of sexual abuse in the church.) To be a leader in medicine was, then, to be tasked with a kind of sacrosanct stewardship. This led, predictably in hindsight, to some rigid hierarchies and abuses of patient autonomy. Yet while physicians and hospital leaders were allowed the vanities of status and the promise of material comfort, theirs was not a path to stupendous wealth. They had been entrusted with something awesome but fragile, and woe unto them if they destroyed it and the destruction could be linked to avarice.

To be honest, though, there were never any truly golden days in medicine. The history of medicine is laden with malign neglect and deliberate exploitation, admixed with truly heroic efforts—like the charitable hospital and the academic laboratory. These were noble dreams, if incompletely realized. It can be hard to explain why profit maximization is still so distasteful to many people involved in patient care or medical research, but much of it stems from tradition. The nonprofit hospitals that now sue the destitute sick and garnish their meager wages were born of almshouses, religious orders and community associations. Many of the mid-20th-century inventors of the vaccines and antibiotics that saved millions sought to claim few financial rewards for their decades of toil in obscurity and even penury. When, on a CBS television interview with Edward Murrow in 1955, Jonas Salk was asked who owned the patent to his lifesaving polio vaccine, he replied, “Well, the people, I would say. There is no patent. Could you patent the sun?” Even the American Medical Association, long an opponent of single-payer healthcare, included the following statement in its ethical code: “The practice of medicine should not be commercialized, nor treated as a commodity in trade.” The AMA removed this statement in the 1980s, after courts challenged professional organizations’ ability to limit members’ incomes.

The old monastic ethos is now an anachronism. Medicine, according to a prevailing 21st-century American perspective, does not differ from every other aspect of American capitalism—success is measured in dollars. States may still have laws against the “corporate practice” of medicine, but these are increasingly being interpreted in implausible and torturous ways to allow the very things they forbid.

There are few better demonstrations of this change than the hospital where I was born in 1986: St. Elizabeth’s Hospital, founded by women in the Third Order of Saint Francis in 1868, was sold by the Archdiocese of Boston in 2010 to Cerberus Capital Management, a private equity firm named after the three-headed dog of Greek myth who guards the gates to the underworld. The new CEO, a cardiac surgeon named Ralph de la Torre, sold the land from underneath the hospital, making the hospital a tenant. The firm refused to pay its vendors so often that a woman died for want of a repossessed device to stop a hemorrhage after she gave birth. The hospital soon went bankrupt and had to be rescued by the state and the nonprofit Boston Medical Center. De la Torre, for his part, kept his riches, including a 190-foot yacht.

The physician and patient safety advocate Donald M. Berwick was right when he declared this the era of “salve lucrum” (hail profit). There is no longer any such thing as “selling out.” Working in healthcare for private equity companies that send surprise bills and sue low-income patients in debt is simply the most logical way to pay back your own crushing medical school debts before your family, too, is swallowed whole by medical bills. Physicians were once independent professionals. For better or worse, they decided on standards of practice and ruled their private practices and hospitals like royals. Today, financial executives hold a plurality of board-of-directors seats at the nation’s most prestigious hospitals. Physicians, for their part, hold only 13 percent of board seats, and nurses not even one percent. This is not without consequence; hospitals with fewer physicians on the board tend to set less generous criteria for free care for low-income patients.

The triumph of lucre was in evidence when I testified before Senator Bernie Sanders’s Committee on Health, Education, Labor and Pensions on July 11, 2024. He asked the panel assembled to tell him what, in their eyes, is the purpose of a healthcare system. One of the panelists declared, without a hint of irony, “Everybody wants to be rich!”

The consequences of this shift are visible in the lives and deaths of our patients. Patients can, for example, end up in liver failure through chronic hepatitis C infection, which slowly fills the liver with fibrous tissue. When this happens, their hands flap uncontrollably, their skin and eyes become jaundiced, their abdomens distend, and their brains are awash in toxins. They cannot carry on a logical conversation. These patients’ livers do not make enough of the factors needed for blood to form clots; when they start hemorrhaging internally or vomiting blood, they are unlikely to stop on their own. They do not make the proteins needed to keep fluid in the blood vessels, so they do not get enough oxygen to the kidneys, brain, and heart. Absent a liver transplant, demise is certain and terrible.

Over the last decade, such deaths have become unnecessary. A new treatment called sofosbuvir became available in 2013. It has far fewer side effects than previous treatments, and it can, in theory, cure virtually all cases of hepatitis C. Yet for the four million patients in the United States with hepatitis C—half of them under the care of public systems such as Medicare, Medicaid, Veterans Affairs, Indian Health Service, and state prison systems—this cure remains hopelessly out of reach. As a result, even with vast increases in spending by public payers, only one-tenth of patients with hepatitis C received the new treatment in the first two years after its release. During this time, new infections increased, and doctors across the country contended with enormous waiting lists for the breakthrough treatment.

Most biotech investors first heard of the compound that became sofosbuvir when Pharmasset, the company that owned it, was purchased by Gilead Sciences in 2011 for $11.2 billion. Gilead completed the late-stage clinical trials and, two weeks before its release, announced its price: $84,000 for a three-month course. The drug was an immediate blockbuster, with the lucre going to Gilead’s shareholders—who saw the company’s share price rise from $11 in November 2011 to $122 in June 2015, due in large part to the commercial promise of the new drug. Behind this private fortune lay decades of public funding; the researchers who made the key discoveries leading to the synthesis of sofosbuvir had been funded by the National Institutes of Health, Veterans Affairs Office of Research & Development, Emory University, the German Ministry of Education and Research, the British Medical Research Council, the European Research Council, and the Belgian government.

In Capitalizing a Cure: How Finance Controls the Price and Values of Medicine (2023), physician-sociologist Victor Roy chronicles the story of sofosbuvir. Even though it is a character-driven narrative, scientific investigators, patients, and medical professionals are in the background. The actual protagonists are the financial executives who decide how to price and market the new drug to maximize short-term shareholder value. Their internal deliberations, revealed in large part by a Senate Finance Committee investigation, bear little resemblance to Gilead’s public pronouncements. While lobbyists have long tried to convince lawmakers and regulators that astronomical drug prices constitute a just recompense for the risks of research, Roy convincingly shows how Gilead set the price of sofosbuvir with a completely different logic in mind. Instead of tallying the costs of development, Gilead based its price on the breaking point for insurers. The company hired consultants to canvas officials in public and private health systems to determine just how much they would be willing to pay for the new therapy before refusing to cover the medication at all. The draining of public coffers is not incidental to price-setting for new blockbuster drugs; it is precisely the point.

Roy also demonstrates how the hunt for “shareholder value” (i.e. short-term growth in stock prices and large dividends) frustrated the realization of medicine’s holy grail. Though the drug was capable of eradicating hepatitis C from the planet, its cost led to rationing: only patients with advanced liver fibrosis were given access. But in the eyes of some financial analysts, this was not such a bad thing. Allowing the disease to spread, they argued, would necessitate continued purchases. As Michael Yee, an investment analyst at RBC Capital Markets, a Canadian investment bank, explains in the book, “[I]f anyone including Medicaid starts to limit [the treatment] to only sicker patients, this wouldn’t dramatically worry us and could be better long-term.”

Roy shows how the high price of new drugs is justified through assessments of “value.” This logic, promulgated in health policy papers funded by the pharmaceutical industry, compares the utility of a given treatment against existing, exorbitantly priced but less efficacious therapies. The result is a “pricing escalator” that runs ever upward. Past price-gouging justifies yet more. The rising tide of prices funnels the biotech sector toward the market-beating short-term returns on capital sought by venture capital firms, hedge funds, pension funds, and other investors. Through both government insurers and private health insurance premiums, the public pays the price.

The exploitation of public largesse by private actors is a focus of Colleen M. Grogan’s Grow and Hide: The History of America’s Health Care State (2023). Healthcare in the United States, she contends, has always been a largely publicly financed venture, but both public and private actors have had a stake in obscuring the government’s role. The reason for obfuscation: Private actors capture a disproportionate share of the gains. One example in particular demonstrates the pathologies inherent in this dynamic. In the popular understanding, large nonprofit hospital systems build new facilities through the generosity of donors, whose names adorn the walls of every atrium. After changes in federal law in the 1960s, however, hospitals relied less and less on donors to pay for new construction, explains Grogan, and ever more on tax-exempt bonds, which they could issue for relatively low interest rates because bondholders would not have to pay federal income tax on the proceeds. This tax-subsidized instrument became the primary means by which hospitals paid to update equipment and facilities. But because the ratings (and subsequent interest rates) for such bonds are tied to the “payer mix” of the hospitals that issue them, more favorable financing is available to facilities with wealthier, privately insured patients in white neighborhoods than to those with publicly insured or uninsured patients in majority-minority areas. This financing mechanism allows already-wealthy hospitals to construct ever more well-appointed buildings, and to push safety net hospitals into decrepitude or bankruptcy. While New Deal–era redlining by the Federal Housing Administration has, in recent years, become the case study through which Americans acknowledge their country’s history of structural racism, the tax-exempt hospital bond perpetuates an eerily similar practice.

Grogan makes a compelling case that liberal advocates are too often unversed in the history of capital markets, which allows momentous and harmful changes to take place without public scrutiny or outcry. Take, for instance, the move toward hospital mergers during the late 1990s and early 2000s. This trend was driven by hospital executives seeking access to bond markets. The executives learned quickly that more favorable lending terms were available to larger hospital systems. This drove a wave of mergers, including “nonprofit conversions” in which for-profit hospital systems purchased what previously had been nonprofit hospitals. Investment bankers incorporated the relatively low margins and lower prices charged by nonprofit hospitals into the price of the formerly nonprofit facility, giving the for-profit buyer the windfall of a bargain purchase. The buyers benefited from discount prices for nonprofit facilities that had been built with federal grants and other public funds, and maintained and upgraded with tax-exempt bonds, tax-deductible private donations, and tax-exempt operating budgets. Grogan marvels at the paucity of debate over these sales, which once again turned public spending into private lucre.

Though profitable, the political economy of healthcare described in these books is inefficient: the free market cannot work the magic promised by neoclassical economists in healthcare. The conditions for efficiency, defined as a state in which no one can be made better off without making someone else worse off, do not hold in medicine. As Nobel Prize–winning economist Kenneth Arrow argued in 1963 in what is considered the founding text of health economics, “Uncertainty as to the quality of the product is perhaps more intense here than in any other important commodity.” People who are sick usually lack both the wherewithal and the knowledge to shop around for the best deal. Competition is severely limited by barriers to entry such as licensing as well as by government-granted monopolies by patent-holders. Practitioners of the medical craft, Arrow observed, deliberately eschew profit maximization by caring for those with little ability to pay. Healthcare, in his formulation, was more than a simple commodity. Due to structural necessity and social norms, it occupied a realm outside the hurly-burly of capitalist profit-seeking.

Even those companies with warm public reputations may not be worthy of our esteem. In No More Tears: The Dark Secrets of Johnson & Johnson (2025), investigative reporter Gardiner Harris unmasks scandalous cover-ups at one of the nation’s most lauded companies. The lengths to which the company’s executives have gone to defend profitable yet dangerous products are staggering. Harris delves into a number of cases, including that of talc-based baby powder, a longtime American household staple. In the mid-1970s, a careful researcher named Arthur M. Langer at Mount Sinai School of Medicine confirmed a finding he had made almost a decade earlier: Johnson & Johnson’s baby powder contained asbestos, a known carcinogen. J&J executives successfully harangued Mount Sinai’s president to publicly contradict the findings. A decade later, a company executive signed an affidavit swearing that asbestos had never been found in any talc mine owned by the company, even though company memoranda had mentioned asbestos in those mines as early as the 1960s. In 2018, when a lawsuit filed by 22 women claiming to have contracted ovarian cancer from baby powder succeeded, garnering over four billion dollars in punitive damages, J&J tried to limit payments to plaintiffs. The company only stopped selling talc-based baby powder in 2023.

It is much more difficult to study private sector malfeasance than public corruption. Without recourse to public records requests and public archives, Harris had to cajole insiders to hand over confidential documents, often at great personal risk. What this reader found most depressing in these secret pages is not the salaciousness of the scandals but the casual mendacity they reveal. After commissioned reports by scientists about the dangers of talc-based baby powder were altered to preserve sales, the major worry was not the act of lying itself, but whether lying was a sustainable corporate strategy in the long term. One suspects that versions of this sordid story could be written about many large companies in healthcare.

By deftly exploiting the limits on both competition and information, people devoted not to caregiving but to the imperatives of salesmanship and profit maximization have successfully claimed a massive share of the profits in healthcare. Their stories, related in these books, explain precisely how healthcare in the United States is at once bloated and woefully inadequate. They also explain why the public has legitimate reasons to distrust our healthcare system.

The idea that healing can be removed from the realm of the sacred and turned into a mere commodity is of relatively recent vintage. The physician and ethicist Richard Gunderman detected this shift in values in the mid-1990s upon hearing a premedical student readily admit, with surprising candor, that his main motivation for becoming a doctor was to get rich by setting up a cosmetic surgery practice in a wealthy neighborhood. “[T]he coin of commerce,” Gunderman lamented, “serves increasingly as the common currency of medical discourse. Patients have become ‘health care consumers,’ ‘clients,’ or even ‘customers.’” Such language is now the norm.

Yet even in these books chronicling our present illness, there are actions worth emulating, typically found in other nations’ systems. In Egypt, for instance, where 10 percent of the population contracted hepatitis C after inadvertent inoculation through reused glass syringes in campaigns against schistosomiasis between the 1950s and 1980s, Gilead sold sofosbuvir at one percent of its US list price, a figure that still allowed for substantial profits. Even if drug companies cannot be induced or impelled to emulate this example, there are alternatives. Roy, who counts among his mentors the economist Mariana Mazzucato, is an advocate for increased state capacity in research and development of essential pharmaceuticals. He is part of a growing cadre of physicians, lawyers, economists, and advocates who look to the state to do more to reduce the stranglehold of finance on the final stages of pharmaceutical development and production. These advocates argue for a public option for medicines, a government program with the ability to conduct clinical trials and manufacture vaccines and therapeutics. This would, its exponents argue, accelerate the pace of invention while ensuring that the rewards of such invention are spread more broadly.

These authors assume that medicine ought to be the last redoubt of mutuality in a world of naked individualism. Harris, for instance, describes the actions of Johnson & Johnson executives as “deviant,” but that raises the question: deviant from what? A basic notion of decency is implied here that lies outside the single-minded pursuit of lucre. Does such a notion still exist? Perhaps it does, as evidenced by the popular reaction to the 2024 murder of UnitedHealthcare’s CEO.

To stake our hopes on legislators and administrators of government programs not beholden to private interests is an uncertain prospect. The real power in our health system lies not with elected representatives, who must make hours of calls each day to raise funds from rich donors. Even less does it reside with the nurses who, in a single shift, place IVs, dress festering wounds, perform chest compressions, and comfort the dying, all while ministering to far more patients than they should safely be assigned. It does not lie with the physicians, who train for decades to practice a certain standard of diagnosis and treatment that they are not allowed to meet once in the trenches. The power is not with patients, who pay a huge portion of their salaries and taxes toward care they cannot afford. It resides, instead, with the captains of finance and industry who decide that, in the name of a share price, one-third of the globe’s population simply cannot have access to the COVID-19 vaccine, even though it was invented and purchased with government funding. It lies with the private equity titans who methodically bleed the funds from centuries-old hospitals, then sail away on their yachts.

During my childhood, the sermons in my suburban church seemed all too ready to mollify the guilt of the comfortable. The Bible’s proclamation that “it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God” was, we were told, not what it sounded like. The wealthy need not worry. I most admired those exemplars who could combine medical practice with a morally demanding theology of social justice. As an undergraduate at Harvard, I followed the physician-anthropologist Paul Farmer around like an apostle. And I was not the only one. Many of his acolytes spent years working with his organization, Partners in Health, in rural Haiti, in Navajo Nation, in Siberian prisons, and in the slums of Lima, Peru.

Drawing upon Latin American liberation theology, Farmer called for a “preferential option for the poor” in medicine. He worked with public sector medical facilities to treat complex conditions, including AIDS, multidrug-resistant tuberculosis, and advanced cancer, previously considered outside the reach of clinical practice in poor countries. Three years after his death, he continues to inspire thousands in medicine and public health. Figures like these can be our lodestars. Imagination and ambition are necessary for the salvage of medicine, a field that is, at its best, a wonderful amalgamation of religious devotion and humanistic inquiry. The money changers are in the temple; it is time to cast them out.