Read our essays

Jon Shaffer 1/23/23 Jon Shaffer 1/23/23

How US Healthcare is Killing the Planet

If US health care was its own country, it would be the 13th largest emitter of greenhouse gases.

By Peter Trinh

Image by Esther Moon and Jason Silverstein.

A few weeks ago, diplomats at the United Nation’s COP27 Climate Change Conference finally agreed to establish a “loss and damage” fund to compensate the poorest countries for damage from climate-related disasters. The fund represents an easy cause for celebration in the fight against climate change. However, such a deal comes at a time when Big Oil still reaps record profits, and no actual progress was made to address climate change’s root cause: greenhouse gas emissions. In the words of Manuel Pulgar-Vidal, who presided over the 2014 UN climate summit, “we cannot afford to have another climate summit like this one.”

To address climate change’s root cause, we must identify the primary culprits. Most Americans rightly blame oil and gas firms, but, as a resident physician who spends most of his time in the hospital, I want to highlight another guilty party: American health care. My fellow health care professionals and I work hard to care for our patients, but in doing so, we unwittingly contribute to a crisis that threatens the health of billions. American health care is responsible for roughly 8.5% of the nation’s greenhouse gas emissions; If health care was its own country, it would be the 13th largest emitter of greenhouse gases just behind Brazil.

American health care is responsible for roughly 8.5% of the nation’s greenhouse gas emissions; If health care was its own country, it would be the 13th largest emitter of greenhouse gases just behind Brazil.

This makes some sense: health care facilities are energy-intensive—hospitals run 24/7, requiring double the energy of commercial buildings—and that health care uses extremely potent greenhouse gases in both anesthesia and commonly used inhalers.

But American health care is also incredibly wasteful. We order around 14 billion laboratory tests each year, but up to one-third are unnecessary. That means millions of needles and test tubes go to waste. In the name of safety, health care workers (including doctors, nurses, technicians, janitors, and food services workers) also use unbelievable amounts of disposable products. Many of them, like protective gloves, are rightfully single-use, but others, like medical gowns, could be reused. Hundreds of thousands of disposable medical gowns are used every day—up to 85% of all gowns in US hospitals are disposable. Such high usage rates are nonsensical when recent studies have shown that reusable gowns are cost-effective, protect their users just as well as disposable gowns, and have much lower environmental footprints.

In some cases, health care professionals do not even use the disposable products before throwing them away. For instance, standardized single-use kits for various medical procedures, often contain unnecessary materials that doctors throw directly into the garbage.

All this waste is the byproduct of the siloed nature of health care and the lack of centralized leadership focused on sustainability. My colleagues care about sustainability and lament how wasteful we are in our day-to-day care of patients. However, many of the decisions that would influence the amount of waste we generate, such as what materials we use, are out of our control. Hospitals within the same health system and even medical departments within the same hospital largely function independently from each other, making organized grassroots action on sustainability very difficult to achieve. What American health care systems need are centralized leaders, or Chief Sustainability Officers (CSOs), dedicated to ensuring that health care practices are aligned with environmental sustainability. CSOs embody an institutional commitment to environmental sustainability and can bridge divisions between departments and drive sustainability initiatives across entire health systems. As of March 2021, 95 of US Fortune 500 companies employed a CSO, but zero hospitals or health systems had a CSO. They clearly need to catch up.

CSOs could both drive institutional change and help reduce Scope 3 emissions of hospitals and health systems. Scope 3 emissions are the indirect emissions generated by the supply chain of companies that manufacture and deliver medical supplies and medications, and they account for roughly 80% of the US health care system’s greenhouse gas emissions. Decreasing Scope 3 emissions is essential, and CSOs can help by exercising their institution’s purchasing power to create demand for greener products and more sustainable practices from suppliers and distributors.

Currently, sustainability is a blind spot in the health care supply chain. As part of a small pilot study at my hospital to reduce unnecessary laboratory tests, my team has been investigating the environmental footprint of basic lab tests, reaching out to our institution’s suppliers of lab reagents and materials to see what data they have on their products’ carbon footprints. We contacted major firms such as Roche Diagnostics, Stago Diagnostica, and Becton Dickinson. None had any product-level environmental data, and all were surprised by our inquiry. According to Manpreet Sandhu, the Sustainability Program Manager for the Health Industry Distributors Association (HIDA), manufacturers of medical products like McKesson and Cardinal might have facility-level data on their emissions but nothing at the product level. This dearth of data reflects how little sustainability has been valued within health care. CSOs can change that.

In June 2022, 61 of the nation’s largest hospital and health sector companies committed to cutting greenhouse gas emissions 50% by 2030 as part of the Biden administration’s Health Sector Climate Pledge. But seeing where the industry is now and what its leaders have vowed to accomplish, this Climate Pledge might only amount to lofty corporate greenwashing.

Peter Trinh is an internal medicine and primary care resident physician at Brigham & Women’s Hospital in Boston, MA, and a Blair and Georgia Sadler Fellow at Health Care Without Harm.

Support our writers & artists with a small Patreon subscription.

Jon Shaffer 1/23/23 Jon Shaffer 1/23/23

Gross Profit

Should you read Capitalizing a Cure before you die, or should you die first?

A book review by Jon Shaffer

Victor Roy, *Capitalizing a Cure: How Finance Controls the Price and Value of Medicines*. University of California Press, 2023. 245 pp. Open Access.

On August 16, 2022, Ashish K. Jha, the White House COVID Czar said that the government should “get out of the business of [providing free vaccines, treatments, and tests]” for COVID and instead hopes that “in 2023 you’re going to see the commercialization of almost all of these products.”

When the public sector "gets out of the business" of producing the sole product providing meaningful protection in the midst of a pandemic, we know that private corporations will happily crank up prices (to the tune of 4000%, thanks Moderna). But Moderna isn't alone.

In the new book Capitalizing a Cure, which is available late January 2023, physician-sociologist Victor Roy exhibits how the financial-sector takeover of the pharmaceutical industry enables pharma executives to extract every dime of profit they possibly can, the dead be damned. After all, they’re just doing their jobs.

Through an in-depth case analysis of the advent and pricing of a cure for hepatitis C, sofosbuvir, Roy reveals the pharmaceutical company corporate playbook that enabled Gilead to price sofosbuvir as the most expensive drug in human history: more than $84,000 for the three month regimen.

Gilead’s obscene pricing strategy has had deadly results. In response to Gilead’s pricing, “US state-run Medicaid programs instituted “eligibility requirements” that limited the treatments to those in the most advanced stages of disease. Patients faced delays and denials.” Texas has nearly universally denied Medicaid recipients access to the drug until as late as 2018, despite nearly half a million people currently sick from hepatitis C in the state.

Rationing sofosbuvir has been widespread: “At least thirty-three states, including states with large numbers of hepatitis C patients, such as California, Texas, and New York, restricted patients by the stage of their liver disease, giving access only to patients with advanced fibrosis. Many states also required that patients be alcohol and drug free in the month (or even the six months) leading up to treatment.” The poor, the especially sick, and many stigmatized populations, such as the incarcerated and people who use drugs, were often last in line.

Roy shows in exquisite detail why big pharma’s extreme price gouging isn’t solely the product of a few greedy bad actors—not simply the individual craven behavior of cartoon villains like Martin Shkreli—but instead is baked into the system. Hoovering capital from each of us, especially from our meager and beleaguered public payment systems, is their primary purpose and core objective.

The form of capitalism embodied by the pharmaceutical industry writ large, and which has metastasized throughout much of the world economy, is utterly dominated by the interests of short term financial investors. The stakes for innovation (developing new cures and medicines that save lives) and justice (who gets access to these life saving tools) could not be higher.

Perhaps many view the functioning of the pharmaceutical industry as benign, noble, or at least “just the way things are” in a society committed to free market capitalism.

This common, but incorrect, reasoning tends to go something like this: pharmaceutical companies employ an army of benchtop scientists, biomedical engineers, researchers, and process and industrial designers to identify promising molecules and biological interventions. They develop in vitro, in vivo, and clinical trials to test the safety and potential efficacy of these interventions. They then work with the FDA and other regulatory agencies to ensure public meeting trust and safety standards. These efforts are expensive and require significant financial investments by the companies, justifying high prices that enable them to recoup costs and earn significant profit return for their effort and ingenuity. Although we may not like the prices set by these companies to recoup costs and accrue reasonable profit, that’s just the cost of doing business.

Capitalizing a Cure smashes that popular conception. Instead, through the remarkable yet ideal-typical case of Gilead’s launch of sofosbuvir, Roy traces a three step process that all but guarantees exorbitant drug prices and an enormous transfer of wealth from an impoverished public to the investor class.

The first step is the transformation of “publicly financed and cumulative knowledge into private assets for financial markets.” This process—central to financialized drug development—would shape the trajectory and price of a potential breakthrough for hepatitis C.

In the case of sofosbuvir, the fundamental underlying science of the “replicon” (a research tool that enabled hepatitis C drug development to accelerate) was funded through a mix of financing from the German government and the U.S. National Institutes of Health. In sum, research by Roy and by Harvard’s Program on Regulation, Therapeutics, and Law have shown that at least $60.9 million of direct investment by the US government made sofosbuvir’s development possible.

This public investment in the replicon and other basic science leading to sufosbuvir, however, would not remain in the public domain. In the spring of 1998, early in sufosbuvir’s development trajectory, an Emory University scientist, Ray Schinazi, launched a company called Pharmasset. As Victor Roy writes,

From the very beginning, [Schinazi’s] intentions were clear… “It’s actually ‘pharmaceutical assets’ and the idea was to create assets that would be sold to companies. That was the initial business plan.”

Schinazi made use of a new law–the infamous Bayh-Dole Act–which enabled patented intellectual property to be owned by individuals and private corporations, even if the underlying science and knowledge were funded by taxpayers. The euphemism used is “technology transfer”* i.e. capital transfer from public to private hands.

The mega-giant pharmaceutical company, Gilead Sciences, Inc., was founded in 1987 and amassed a veritable Scrooge McDuck-sized swimming pool of liquid cash, to the tune of $10 billion, accumulated through the sales (and corresponding denial to the impoverished in Africa, South Asia, and elsewhere) of lifesaving antiretroviral medications for HIV/AIDS.

By 2010, the value of Pharmasset (over $5 billion, largely based on the early sofosbuvir compound), catalyzed by state investment, was fully tethered to the interests of a relatively small number of venture capital funds.

The second step in this ever rising drug “pricing escalator” centers on placating venture capitalists’ insatiable thirst for profitable returns on investment, even as Pharmasset’s own investment in the drug was marginal in comparison to the government’s. Roy writes, “as a small biotechnology business with no products or revenue, Pharmasset was structurally tethered to an array of external financial actors.” This was its sole purpose: construct a pharmaceutical asset to be sold to the highest bidder.

Pharmasset found just such an extraordinarily high bidder in Gilead: “On November 20, 2011, Pharmasset agreed to be bought for $137 per share, or $11.2 billion. This was the largest-ever price for the acquisition of a small biotechnology company at the time.”

But, according to this logic, there is no limit to what kind of price could be too high. How much is your grandmother’s life valued? Your son or daughter? Your spouse? What if you or the public system can’t afford these inflated prices?

But, despite the success Gilead found financially in the 1990s and 2000s, by the mid-2000s, their stock price per share was falling dramatically. A lack of new drug development and stagnant pipeline of new potential blockbuster medications meant that investors and business analysts were skeptical of Gilead’s long-term growth potential. They were, however, quite happy with the large “stock buy-back plan” which used a portion of its war chest to distribute to stock shareholders, artificially propping up the share price. Roy explains, “This short-term focus epitomizes the contradictions of financialized drug development: decrying the company’s lack of growth possibilities, while applauding it for distributing capital to share- holders that could have otherwise been reinvested to develop stronger pipelines.”

Gilead chose to move away from their historic “research and development” strategy, towards a high finance-driven “search and development” strategy, allowing them to ultimately profit from the outside development of compounds rather than invest in their own R&D programs.

Gilead was no longer a collection of industrious and innovative lab scientists struggling hard for the next big breakthrough; it was a sky-high stack of venture capital disguised in a lab-style trench coat and dark lab goggles, seeking to deploy that capital to capture the greatest future revenue returns possible.

Which brings us to the third step in the drug-development pricing escalator: the colonization of “future value” as the commonsense justification for exorbitant drug prices.

According to Gilead, paying higher—even extraordinarily higher—prices for the “value” of better future health should be obvious. Gilead’s view, according to Roy, was that “if public officials valued the health of patients with hepatitis C—and the improvement that future cures could bring—they should be willing to pay the price for that value.”

But, according to this logic, there is no limit to what kind of price could be too high. How much is your grandmother’s life valued? Your son or daughter? Your spouse? What if you or the public system can’t afford these inflated prices?

Jon Shaffer is a sociologist and organizer based in Baltimore who studies global health organizations, social movements, and their struggles over scientific knowledge. Follow him @jonshaffer.

Support our writers & artists with a small Patreon subscription.

Jon Shaffer 11/7/22 Jon Shaffer 11/7/22

Who Made Haiti a “Failed State”?

An interview with Cécile Accilien

Cécile Accilien, a scholar of Haitian studies and president elect of the Haitian Studies Association, spoke with our editor-in-chief Jason Silverstein about the racist myth of Haiti as a “failed state,” the need to place interventions in economic and historical context, and the media’s role in the colonial project.

JS: We are facing the prospect of yet another foreign intervention in Haiti. The media is shaping a very particular story. What should readers know?

CA: It’s unethical and dangerous to be having conversations about foreign intervention without placing them in a wider social, political, economic, and historical context. You cannot just look at Haiti currently, or Haiti in the last two months, or Haiti in the last 16 or 18 months, and say it just happened.

The concept that Haiti is a “failed state”? When you look at the failure of that state, why is it a failed state? Who is supporting or encouraging that failure?

It is important to understand that the U.S. was never interested in having a neighbor who had an ideal of democracy, similar to its own, but except Black. How dare a Black country have similar ideas of democracy?

People must remember that history. When Haiti became independent in 1804, the U.S. did not recognize that independence for nearly 60 years.

It is not useful or helpful for the U.S. and other countries, such as France and Canada, for Haiti to be stable.

When you look at the typical media, they say, these are a bunch of Black people who do not know what they are doing. That’s what the media wants to portray. So that it can justify its foreign intervention. We have a history of foreign intervention that has continuously failed.

When you talk about Haiti in the eighties, I’m not one to have nostalgia. I grew up under the dictatorship, part of my family disappeared. So this is very real for me. But there was a time when Haiti was able to feed itself.

When you look at the fact that the U.S. was sending extra crop, they completely destroyed the Haitian market. If you look at the rice debacle, what happened in the nineties. Thanks, Bill Clinton. U.S. rice cost so much less than the Haitian rice. This is how you destroy a country. Every time, they go under the guise of help.

JS: The narrative from the media right now is to manufacture the consent for intervention by saying, we're doing a good thing, we're going to help, and we're going to help people who can't help themselves.

CA: This is again the same colonial project that continues. When you look at the media, it's a way to justify that inhumane and unethical treatment of Haitians. This is all part of this colonial project.

Let’s present them as these people who are brainless, who are not capable of helping themselves.

The same thing happened after the earthquake. Supposedly all this money that was sent to Haiti, who was deciding? How insulting that it was Bill Clinton who was the co-chair of the committee, as if they were no Haitians who could do it. You have Haitians in Haiti and in the diaspora who are doctors, lawyers, policymakers. Why didn’t they say, let's look for someone who knows Haiti, who speaks the language? Let's look at who is at the table to have these conversations. Let's look at what language or languages these people are speaking.

To me this is all very telling, because it's perpetuating the stereotypes and the narratives of a failed state. It’s back to the U.S. occupation of Haiti from 1915 to 1934 that the average American knows nothing about. That the U.S. changed the Haitian constitution.

There are questions that need to be asked.

Haiti does not produce guns. Where are the guns coming from? Who is furnishing the guns? The gangs that have taken over Haiti. Who is supporting them?

JS: Now, the UN yet again wants to come help Haiti, even though they were responsible for the cholera outbreak in 2010. How do you respond to the UN’s offer that no one is asking for?

CA: The way we respond is, I think, Jason, is by looking at the work that the UN has done.

When the UN goes under the guise of stabilization and peacekeeping, they do the exact opposite.

The cholera outbreak, there has been no apologies, there has been no reparations at all.

Racism is the key to unlock all this. You have to look at racism, colorism, the paternalism.

The idea that when you read about the so-called failed state, all the vocabulary around Haiti, it is because Haiti is a Black country.

Hundreds of children born out of sexual assault by you and peacekeepers. Nobody's talking about that. They're not responding. How dare they. Just look at their records. They have done more harm than good.

This is because this is Haiti. The lack of respect, because Haitians are not seen as human beings. That's the bottom line with all this.

JS: It is because Haiti is a Black country.

CA: Racism is the key to unlock all this. You have to look at racism, colorism, the paternalism.

The idea that when you read about the so-called failed state, all the vocabulary around Haiti, it is because Haiti is a Black country.

It's this paternalism. The whites have to come and help Haiti. When you read the media from from the U.S., you will think that all the Haitians are just sitting around waiting for the white men to come save them, even though people are protesting.

When you dehumanize someone and you pretend that they are lesser than you — and that's what all these narratives contribute to.

Support our writers & artists with a small Patreon subscription.

Jon Shaffer 11/7/22 Jon Shaffer 11/7/22

The Great American Medical Debt Machine

How Medical Debt Became Big Business

By Luke Messac

The following is an excerpt of a forthcoming book, titled Your Money or Your Life: Debt Collection in American Medicine, to be published by Oxford University Press in 2023.

This is the story of how a few industry leaders made a fortune from medical debt collection.

In the past thirty years, medical debt collection has gone from a primarily in-house venture, done by hospitals’ own collections departments, to big business.

Michael Barrist bought his family firm, NCO Financial Systems, from his mother in 1986, two years after graduating from Drexel University with a degree in accounting. His mother had been running the company with three employees out of her home garage. They had only 60 clients and annual revenues of $40,000. Michael paid just $25,000.

Determined to make something more of the tiny operation, Barrist hired Charles Piola, a former high school teacher who had become better known as a leading area sales representative for debt collections. Piola was, according to Inc. magazine, the “king of cold calls.” He specialized in unannounced visits to office buildings, where he tried to convince executives to hire NCO to collect their debts. Driving a Mercedes and dressed in a double-breasted, pinstriped suit, a cashmere topcoat, freshly shined shoes, and cufflinks, he ambled into law offices, ophthalmology practices, insurance companies, banks, and almost any other business acting like he belonged until he found someone who looked like they controlled the books to strike up a conversation with. He attributed his success to his indifference to rejection. So devoted was Piola to this identity that when he eventually left the company, he became a motivational speaker. He promised to rouse business audiences with such themes as “Christ was a Cold Call Salesman.”

For his part, Barrist aimed to use software to partially automate the process of sending letters and making calls. Today these “collection management systems,” software platforms which, for a monthly subscription fee, help collectors track calls, payments, and discussion with debtors, are standard throughout the industry. But at the time, they were rare, and thanks in part to this innovation, NCO could offer lower contingency fees than the competition. The company would take as little as 11 percent of the debt collected, while other agencies would take at least 20 percent. With this combination of shoe-leather charm, cutting-edge software, and cut-rate offers, they were able to rapidly expand their client list.

And while those clients were many and varied, medical debt was the main focus. After an economic recession in the early 1990s, Barrist saw his clientele grow even faster. “A lot of doctors in the past year have decided to use collectors for the first time because they have to do it,” he told the Philadelphia Inquirer. In the company’s first few years, Piola had called hundreds of doctors’ offices, hospitals, and medical clinics looking for business, and his efforts had borne fruit. By 1991, the company mailed out 120,000 computer-generated collection letters every month for its 1700 clients, of which 70 percent were medical.

Barrist and Piola admitted that medical debt collection involved difficult conversations. Barrist lamented that “most people want to pay their bills, they just don’t have the money.” But the business model proved a smashing success, perhaps because so few physicians wanted to have any direct role in collecting bills at all. As Piola explained, most businesses “hate chasing after delinquent accounts. Professional people, especially doctors, lawyers and accountants, find it undignified to hound patients and clients who refuse to pay bills. That’s not their business. But it was our business, and over time we became very adept at it.”

Through aggressive collection tactics and buyouts of rival collection firms, the company grew so large that it became known as “the Wal-Mart of debt collection.”

Through aggressive collection tactics and buyouts of rival collection firms, the company grew so large that it became known as “the Wal-Mart of debt collection.” How did it go about collecting debts? A reporter for Inc magazine got the gist of it as he followed Piola through Wills Eye Hospital in Philadelphia, where the salesman was in his element, handing his business card to any administrator he could find. When Piola happened across a new manager of an ocular oncology practice, who told him about her frustration collecting bills, he described how NCO would collect from one of her delinquent patients: “After four or five months in our system he’s going to get 45 or 50 attempts [to collect]. We’ll send letters . . . We’ll get a neighbor to tell us where he works and go after him there.” Impressed, the manager offered Piola a contract.

Barrist took the firm public in 1996. In its initial public offering on the NASDAQ stock exchange, the firm was valued at $30 million. In the years that followed, Barrist’s star continued to rise. Shares of NCO nearly tripled in value in the first six months on the stock market. Revenues rose from $30 million in 1996 to over $100 million in 1998; during this period, it acquired 11 companies. The company, like many other large firms in the collection business, also offered hospitals the opportunity to outsource the entire billing process, even before bills were past due.

The local papers wrote of Barrist’s rise with wonder, even pride, befitting a local boy made good, with nary a word about the maladies and financial hardships that made his fortune possible. In 1998, Barrist was named the Greater Philadelphia Entrepreneur of the Year by Philadelphia Enterprise Magazine. “I never dreamed in a million years that NCO would be what it has become in size,” he told the Philadelphia Inquirer. But he was nowhere near satisfied. NCO was the fastest growing debt collection company and, the next year, after another round of acquisitions, it was the largest. By August 2001, the company had 8400 employees, and was worth $529 million.

Medical debt collection was a large part of NCO’s work. These were, in the words of Albert Zezulinski, executive VP of global portfolio operations at NCO, “fresh and fertile markets.” In 2007 the company devoted 2,000 of its 9,000 collectors to medical debt. Barrist wanted to go further. Rather than just collecting debt on a contingency basis, he wanted to buy the debt outright, and keep all the revenue from debt collected thereafter. On an earnings call, Barrist told analysts that he expected hospitals to begin selling large volumes of debt for two reasons. First, debt purchasers like him were trying to find new investments, “so they’re going to start waving larger amounts under these hospitals’ noses.” Second, hospitals facing budgetary woes “are going to have to face up to the fact that they need alternate means to generate cash in the door.” His “challenge” he explained, was “getting a hospital client to crack and basically let us buy [their debt].”

Barrist’s prediction came true. A few years later, a growing number of hospital executives had thrown away their old qualms about selling debt. Tenet Healthcare Corp. one of the largest for-profit hospital chains in the country, sold $1.2 billion in debt for $16 million. When a large public hospital put up its bad debt for sale, a reporter was asked why they were not hiring collection agencies so that they could retain more control over the tactics employed. The CFO was defiant. “We’re done with that. From now on, we’re going to sell the paper at 180 days. We’re not going to wait around for our money.” Hospital executives were eager to offload debt even though they would have to sell at a steep discount. Internal hospital collection departments tended to collect only 6 to 9 cents on the dollar from uninsured patients.

Large publicly traded companies, including Portfolio Recovery Associates and Acceptance Capital Corp, announced new units devoted to buying medical debt. Cargill, a Minnesota-based agricultural company and the largest private company in the United States, was best known on financial markets for grain dealing. But between 2002 and 2007, it purchased over $7 billion in healthcare receivables. Encore Capital Group, a publicly-traded company that was fast becoming one of the largest buyers and collectors of consumer debt in the US, started its medical debt buying business in 2005, when it spent $4.27 million to buy $274 million in face value of self-pay debt. To finance its mission to “build the leading company in the distressed consumer space,”

Even with all the powerful new entries, NCO remained the biggest player. In 2006, Barrist worked with One Equity Partners, the private equity unit of JPMorgan Chase, to buy out NCO for $1.26 billion. By 2007 NCO Financial was America’s largest debt collector. Drexel University, Barrist’s alma mater, named him to its alumni Hall of Fame.

But Barrist was eventually a victim of his own success. In part because the trade in medical debt had become so popular, its profitability fell. Cost-cutting and automation, the kinds of disruptions that Barrist had long championed, also pushed down fees. Meanwhile, hospitals were becoming more effective at collecting from the willing and able debtors before they went into default, so recovery rates for third-party debt collectors were also falling, from around 25 percent in the early 1980s to around 10 percent three decades later. In 2011, after the company had endured years of losses, NCO’s board reported it had “terminated” Barrist as CEO. He did receive a $3.4 million severance payment, and was allowed to remain as chairman.

The lucre of medical debt collection had grown so irresistible that it piqued the interest of some of the world’s richest people.

JPMorgan then combined NCO Financial Systems with other debt collection firms to form a holding company called Expert Global Solutions. This was, at the time, the largest debt collector in the world, with 42,000 workers at 120 call centers in the U.S., the Philippines, India, Canada, Barbados and Panama. Aside from the dazzling revenue and growth figures, NCO and its successor, Expert Global, became well-known for illegal collection tactics. In 2004, NCO had paid a $1.5 million fine to the Federal Trade Commission for failing to file timely records to clear debts from the credit reports of debtors who had paid what they owed. This was, at the time, the largest fine ever levied by the Federal Trade Commission. In 2012, the company agreed to pay $1 million in a settlement involving 19 states to refund customers who had been harassed into paying debts they did not actually owe. The next year, Expert Global set a new record for an FTC fine when it paid $3.2 million, this time for breaking the Fair Debt Collections Practices Act. The FTC complaint laid out the violations in detail. NCO collectors failed to verify that the people they were contacting were the actual debtors, even after the people contacted insisted that the debts were not theirs. They called multiple times per day, or at the debtors’ place of employment, or after being asked to stop, with what the FTC called an “intent to annoy, harass, or abuse.”

Barrist had been a trailblazer in medical debt collection, and other companies took his lead. As early as 2013, hospitals and health care providers were the largest group of customers for collection agencies and their largest source of recoveries in dollar terms. A 2018 survey of 100 hospital executives found that 54 percent used a third-party vendor for at least a portion of their bad debt recovery. Among nine major debt buyers, medical debt accounted for 28 percent of accounts purchased, trailing only credit card debt. Four years later, medical debt was the leading reason for being contacted by a debt collector, and accounted for 38 percent of debt collected. The lucre of medical debt collection had grown so irresistible that it piqued the interest of some of the world’s richest people.

One of those people would soon buy the operations built by Barrist. In 2014, the medical debt portion of Expert Global Solutions was placed under the aegis of Transworld Systems Inc (TSI) and sold to a private equity firm called Platinum Equity. This firm was headquartered in Beverly Hills and owned by the billionaire Tom Gores. As of July 2022, Gores was the 424th richest person in the world, just behind Twitter founder Jack Dorsey and Star Wars creator George Lucas. Gores is best known as owner of the NBA’s Detroit Pistons, and as a philanthropist. He was a member of the Board of Directors of the UCLA Medical Center, a donor to Children’s Hospital Los Angeles and to various causes in Detroit and Flint, Michigan, where he grew up. He was a giant of industry, and a fixture in the civic life of two great American cities.

In spite of this public image, Gores was the owner of a debt collection machine, a network of call centers and legal teams and software designed to chase down patients who owed medical bills.Under Gores’ stewardship, TSI was not nearly so charitable as his public image. In 2017, the Consumer Financial Protection Bureau fined the company $2.5 million for illegally suing people for student debt. Transworld hired a network of law firms to file and prosecute collection lawsuits, but consumers were sued for debt that companies could not prove was owed or that had passed the statute of limitations. According to the CFPB the affidavits filed by these firms falsely claimed personal knowledge of account records.

In medical debt collection, TSI did not have a better reputation. By 2017, it was the company with the most medical debt collection complaints on the CFPB’s database. One person in Georgia claimed TSI had called a friend to find him (which is allowed), but during that call had said the inquiry was in regard to a medical debt that he owed (which is not). A resident of Illinois complained that a negative action had been filed on his credit report by TSI for a medical debt that he had never heard of, and was sure he did not owe. He claimed he had tried to call TSI numerous times to settle the matter, but could never get anyone on the other end of the line. Another in Missouri claimed that despite his pleas that TSI contact him at home, they called his work cell phone so often that his supervisor became annoyed and passed him over for a pay raise.

Divorced from any clinical or social bonds to patients, collectors of debt are often draconian. As their tactics have become the norm, hospitals, too, have abandoned their erstwhile lenience, sometimes surpassing the third-party debt collectors in their relentlessness. Hospitals and their collectors report patients to credit bureaus, harming chances to qualify for home mortgages and jobs. They sue patients, adding legal woes to physical illness. After winning these cases, as they almost always do, hospitals garnish patients’ wages, seize their bank accounts, and even foreclose on their homes. In some cases, police show up at the homes of patients who do not appear in court for these cases to bring them to jail. To be destitute and sick is to be subjected to the same punishments levied against a violent criminal.

Patients are pursued for these debts even when they qualify for hospitals’ own charity care programs, often because they had not been informed or did not have the wherewithal to complete all the paperwork to apply. This unmerciful attitude to debtor-patients conflicts with the reigning vision of non-profit hospitals as pillars of community service and charity. In a rational response to the cascade of misery that could follow unpaid bills, low-income patients delay necessary care. Their wounds fester, their cancers metastasize.

In a rational response to the cascade of misery that could follow unpaid bills, low-income patients delay necessary care. Their wounds fester, their cancers metastasize.

As I discovered just how widespread aggressive collection tactics are, and how long debt collectors have been a plague on patients, I attempted to grapple with the overwhelming silence among physicians on the matter. There are, of course, physicians crusading against this problem, in particular the tens of thousands of members of Physicians for a National Health Program who have been calling for a single-payer system that is free at the point of care. And when asked directly about their own hospitals’ practices, doctors usually express solidarity with patients. But with the exception of periodic waves of short-lived interest in the issue, medical journals are not filled with stories and data about medical debt.

Part of the issue is that most of us have little to do with billing. We do not know the charges for our services, and we do not see patients’ bills. Physicians are busy enough with patient care and mounting bureaucratic demands. Many of us have no idea what kinds of collections practices our hospitals resort to, or the ins and outs of our financial assistance policies. Hospitals are not eager to share this information with physicians, particularly when the methods are harsh and assistance is paltry. When Marty Makary, the Johns Hopkins surgeon and writer, asked doctors at Carlsbad Medical Center about their hospital’s practice of regularly suing and garnishing the wages of their patients, “they had no idea their patients were being sued. When I showed the doctors what I had learned about the predatory billing practices, they said they detested what was happening.” Should we use this widespread ignorance as an excuse? No, particularly when our patients are being harmed by actions that result from our care.

There is, though, another reason doctors have been relatively absent from this debate. The physician as an independent professional is becoming a distant memory, seen in old television shows but rarely in real life. While there are plenty of private practices, more and more are being bought out by hospital systems and, more recently, private equity groups. By 2022, 74 percent of physicians were employed by hospitals, health systems, and other corporate entities, including private equity firms and health insurers.

We are no longer the masters of our own destiny. Particularly early in our careers, physicians are dependent on employment to pay back six-figure medical school loans. If we are willing to stomach working for a private equity-owned or for-profit facility, our pay is likely to be higher. In exchange, we agree, at least tacitly, to keep complaints out of the public square. Increasingly this agreement is no longer even tacit, as physicians found during the early days of the COVID pandemic, when some who spoke out about unsafe working conditions found themselves summarily fired.

In 1948, the former coal miner and labor organizer Aneurin Bevan was asked how, during his tenure as the Minister of Health in the UK, he had convinced reluctant doctors to agree to sign up for the government-run National Health Service. “I stuffed their mouths with gold,” he explained. He had, he elaborated, allowed physicians to keep seeing private pay patients so long as they also took NHS patients. American physicians today have also had our mouths stuffed with gold, though not by the government and for less noble ends.

Now is the time to choose: do we want to be in league with debt collectors, private equity, and business-minded hospital executives, or with patients? Debt collectors are not evil villains, but their natural incentives are antagonistic to those of people in debt. Every dollar they extract from the patient on the other end of the phone, or sitting across from them in a courtroom, is a dollar that patient won’t have to pay their rent, feed their children, or buy their medicine. We have to ask, in short, whether we want to be allied with predator or prey.

Luke Messac is an emergency physician and historian at Harvard Medical School. He studies the political economy of health financing in the United States and Africa. Read more about Luke’s work at lukemessac.com and connect with him on twitter.

Support our writers & artists with a small Patreon subscription.

Jon Shaffer 11/7/22 Jon Shaffer 11/7/22

Noam Chomsky on the Torture of Haiti

An interview with Noam Chomsky by Jason Silverstein

Noam Chomsky spoke with our editor-in-chief Jason Silverstein about the history of “benevolent” intervention in Haiti, manufacturing consent for those actions, and the need for massive reparations.

JS: You've written about the way that foreign interventions are advertised as benevolent, but those benevolent actions haven't had such benevolent outcomes for Haiti.

NC: The history is utterly grotesque. The United States joined with other imperial powers to try to crush the Revolution. For the U.S., it was particularly significant, because this was a revolution of free black men. Haiti was the first government of free men in the Western hemisphere. The United States was a slave state.

After trying to crush the Revolution came a series of interventions, every one of them more brutal the last. The worst was Woodrow Wilson in 1915. Wilson invaded and in effect restored slavery. His Secretary of State, William Jennings Bryan, was so racist. Wilson’s Marines kicked out the parliament, because they refused to accept an American law, which would have granted American corporations the right to own Haiti. So the Parliament was disbanded. Then a new Parliament was introduced to approve the American law — with, I think, 99% approval, maybe 5% voting.

The American troops were carrying out such horrifying atrocities. There were plenty of war crimes. The result was to leave the National Guard — the brutal, vicious National Guard — to suppress Haiti. If you look at the scholarly literature, this is regarded as a humanitarian intervention.

We go onto the Duvalier years. In the Reagan years, uprisings were suppressed. The younger Duvalier won the vote by the usual 98-99%. The Reagan administration hailed it as a great victory for democracy. Finally, they were kicked out.

In the first free election, it was taken for granted that the American candidate would win, a former World Bank official. Nobody was paying attention to what was going on in the hills and the slums. To everyone’s shock, Aristide won, a populist priest.

The international institutions, even the World Bank, hailed Aristide’s policies. A coup was inevitable. The coup came seven months later, which was basically supported by the United States, which then restored its close relations with Haiti. This goes on under Clinton.

The most shocking case, in my view, was 1995. I was in Haiti at this time. The terror. I’ve never seen such fear and misery as there was in Haiti, under the occupation.

The CIA was testifying that the US had blocked all oil shipments. On the ground, you could see that that wasn't true. The rich oligarchs who owned the place were building oil terminals.

Finally, the Clinton Administration agreed to send the Marines to “save” the Haitians. I was reading the AP reports. One of the reports was the Clinton administration had allowed the Texaco Oil Company to illegally ship oil to the military junta. No one covered it. It kept being reported over and over in the AP reports, but not a word in the press.

This is normal. The same after the US-French-Canadian kidnaping of Aristide in 2004 and sending him off to Central Africa, basically banning his party, so they could control the situation. Essentially no reporting. It is a 200 year record of horrors.

JS: What is the role of the media in manufacturing consent for the United States, the UN, Canada, and others to impose itself on Haiti with heroic military intervention?

NC: The media are private megacorporations, which produce a product that they sell to other businesses. They're very tightly linked with the state. You get the obvious conclusion: huge corporations selling consumers to other businesses tied to the government. What do you expect the media product to be? Something that represents the interests of the major force they are connected with.

My feeling is the intellectual community is no different. For example, places like Harvard, the liberal, intellectual elite, and how they handle things. I don’t think it is very different than the media. They are different kinds of pressures — you’ve been around Harvard, you know what the pressures are. You say the right things, you move up. You say the wrong things, you’re censured. A lot of pressures that lead to conformism. It is very effective.

You've read Animal Farm, of course, but it's very unlikely that you've read the introduction to Animal Farm, which was suppressed. It was found 30 years later in his unpublished papers. The introduction is addressed to the people of England. Now, I'm quoting, he said, in England, unpopular ideas can be suppressed without the use of force. He gave a couple of examples. One reason: the press is owned by wealthy men who have every reason to want these ideas to be suppressed. That’s Ed Herman’s argument. The other, he said, if you are properly educated, you just have it instilled into you that there's certain things it wouldn't do to say. That’s my side. There's certain things that it wouldn’t do to say and, after a while, not even to think.

JS: These invasions are discussed as bringing democracy, but they are usually democratic elections where the results are 98% for a candidate yet only 5% of population can vote. And so, you know, the United States does a magic trick — an illusion of democracy.

The United States, France, and Canada should be paying enormous reparations to Haiti for 200 years of brutal torture, and then let them run their own affairs. They tortured people for 200 years. They know what they should do.

NC: Thomas Carothers was in the State Department in charge of the Democracy promotion activities. He's a very honest guy. He did the most careful scholarly study of U.S. policies of democracy promotion. He concludes that all US leaders have a psychic disorder. They're all in favor of democracy but in practice they always oppose it. So, there's some psychic disorder somewhere. Then he goes into it in more detail. In Latin America, there have been advances in democracy, but they're in the South where U.S. influence is least. If you move closer, where U.S. influence is greater, progress is less. He says the reason is that the U.S. does defend democracy, but it has to be top-down democracy with elites in power which are favorable to U.S. interests. This is coming from a guy who is dedicated to democracy promotion.

JS: Frederick Douglas said, “Haiti is black, and we have not yet forgiven Haiti for being black.” How much is racism at the heart of this endless torture of Haiti?

NC: It’s a large part of it. It shows up very clearly in the Wilson invasions. The Haitian invasion was just vicious, and the Marines were very frank about it. In Haiti, it had been a slave country and now the slaves were free. It was intolerable in the United States. There was a lot of concern at the time about slave revolutions, one of the reasons for the second amendment. You had to have armed militias, something Antonin Scalia didn’t talk about.

JS: The media portrays Haiti as if it is unable to take care of itself, but that’s the desired product of foreign intervention, right? The perpetual need for foreign intervention. When the military comes to restore order, it is a very particular kind order they want to restore. If the desired product of foreign intervention is that there's always a reliance on foreign intervention, is there a way out of of this?

NC: The United States, France, and Canada should be paying enormous reparations to Haiti for 200 years of brutal torture, and then let them run their own affairs. We know exactly what ought to be done. They tortured people for 200 years. They know what they should do.

Support our writers & artists with a small Patreon subscription.

Jon Shaffer 10/24/22 Jon Shaffer 10/24/22

How Was the Officer Involved in the Shooting?

We ask police departments how their officers were involved in their officer-involved shootings.

By Jason Silverstein

In what follows, Peste Magazine asks police departments to clarify how their officers were involved in officer-involved shootings. We made a pie chart and we will update it as more data becomes available.

November 17, 2022: Santa Ana Police Department (California)

On November 17, the Santa Ana Police Department tweeted that there had been an “officer-involved shooting” in the 100 Block of South McClay Street. We asked them how the officer was involved in the shooting. They did not respond.

They said in a press release that “officers encountered a subject armed with a handgun and an officer-involved shooting occurred.”