Premier Medical Journal Scrutinizes Corporatization of US Health Care

July 4, 2025

Defining Health Care “Corporatization”
The New England Journal of Medicine
June 28, 2025
By Erin C. Fuse Brown

In Paul Starr’s seminal 1982 work, The Social Transformation of American Medicine, he observed the corporatization of health care proceeding along five dimensions: the shift from non-profit and government organization to for-profit companies; horizontal consolidation of locally controlled entities to nationally or regionally controlled corporations; the shift from state single-unit and single-market firms to conglomerate enterprises; vertical consolidation among levels of care delivery and payers; and increasing concentration, size, and scope of organizations. In the four decades since the publication of this work, the U.S. health care system has progressed further along every one of these dimensions toward greater corporatization.

Insurance conglomerates, such as UnitedHealthcare and CVS-Aetna, now control physicians, home care, pharmacies, and pharmacy benefit managers. Vertical consolidation was spurred by the rise of managed care and its value-based progeny, particularly as private insurance companies have assumed a growing role in publicly financed health programs. The term “corporatization” now refers to the general trend throughout the health care industry toward higher levels of integrated control by consolidated profit-seeking enterprises.

Two key elements of this definition are worth highlighting. First is the elevation of profit generation as the primary goal of health care enterprise. Embedded in the term “corporatization” is the concept of shareholder primacy, advanced by neoliberal economists, that the primary duty of the corporation is to maximize shareholder profits. Shareholder primacy subordinates the interests of other stakeholders, such as patients, the health care workforce, or the community.

The second key element of corporatization is consolidation. The sheer size of conglomerate health entities makes them systemically critical and “too big to fail.” 

Recently, the term “financialization” has been used to describe the growing involvement of financial institutions, such as private equity firms, using financial tactics to extract wealth from health care companies for investors.

Although profit motive has always existed in medicine, the control that large profit-seeking conglomerates have over the people and entities engaged in health care delivery has intensified and spread to every corner of the health care system. Corporatization has produced a system that is incredibly profitable for investors but increasingly unaffordable, inaccessible, and uncaring for everyone else.

Public satisfaction with the health system is low. Future health policy efforts must confront the fundamental question of whom our health care system is meant to serve: corporate giants or the members of our society as a whole.

 

Comment by: Don McCanne

The New England Journal of Medicine just released the first article in its series on the corporatization of US health care. Excerpts appear above. Since you, as a reader of Health Justice Monitor, are well-informed on health policy, you likely are unsurprised for corporatization to be described as a scourge for health care.

In an accompanying editorial, Debra Malina et al state, “Despite the fact that the United States leads the world in health care expenditures, American life expectancy at birth is 4 years lower than the average life expectancy in peer countries.”

Tweaking the corporate model will not be adequate to fix this problem. We not only need to replace our private insurance model with a publicly financed and administered model (single payer), we also need to shift the expenditures for health care away from private investors and into financing the health care system itself. We can do this through mechanisms such as public provisioning of health care (i.e. public and truly non-profit ownership of the health care delivery system), and by adopting regulatory oversight that prevents diversion of our health care dollars through nefarious financial gimmickry such as private equity usurpation of the delivery system.

How are we doing? This week we witnessed the passage and signing of federal legislation that will immediately produce massive tax benefits for the most affluent members of our society while mandating reduction or elimination of medical care and other social programs desperately needed by low-income and indigent individuals. These measures will exacerbate the negative effects of corporatization on health care. The GOP knows the cuts are unpopular, and hopes to elude electoral repercussions by deferring implementation until after the 2026 mid-terms.

It is fine to follow the monthly NEJM series, but don’t wait until the end of the series to begin thinking about what we need to do. Begin immediately with the transformation of the insurance system from private to public, and start on the long and arduous path to shifting our health care dollars away from wealth creation for the intermediaries to paying for the legitimate costs of the services and resources that are needed to provide an optimal health care system for all of us.

Unfortunately, our political system has just demonstrated, once again, that we need to select our leadership based on beneficial public policies that we support rather than on whether or not you enjoy leadership led by arrogant, pompous, blowhard personalities who value their personal wealth far above the fate of the rest of us.