John Geyman on Profiteering Corruption and Fraud in US Health Care

Profiteering, corruption and fraud are emblematic of our profit-driven, corporatized marketplace. The three bleed into each other in an entangled way, and they are ever increasing.

Dr. John Geyman

We have to ask ourselves and answer – who is the health care system for? The for profit health care corporations, their shareholders and Wall Street traders and investors?

For the corrupt and fraudulent scammers?

Or for the patients, their families and taxpayers?

These questions are at the heart of Dr. John Geyman’s new book – Profiteering, Corruption and Fraud in U.S. Health Care.

You have written many books on health care. Why now a book on corporate crime in health care?

“There is so much of it and it is such a big problem,” Dr. Geyman told Corporate Crime Reporter in an interview last week. “It raises the cost of care and makes it less affordable. It is not accountable. We have a free wheeling corporatized market system where anything goes. We are seeing weakened oversight or regulation especially in this administration. As Dr. David Himmelstein and Dr. Steffie Woolhandler put it – it’s capitalism run amok in health care.” 

“We have to get a handle on it. It’s totally exposed now with the COVID -19  pandemic.”

And with the COVID-19 pandemic, you are seeing many more people thrown off of health insurance because they are losing their jobs and their health insurance is tied to their jobs. Do we have a sense right now how many people are uninsured and underinsured?

“It’s a moving target of course. When we had the Affordable Care Act ten years ago, that left us with 30 million uninsured before the pandemic. We have 87 million underinsured. But then the pandemic hits. Up to 43 million are losing health insurance during the pandemic. It’s a huge number.”

“We already knew that employer based insurance was not a solid rock to stand on. And most people don’t know that it is subsidized with hundreds of billions of dollars from the federal government. It has been bailed out for a long time. And it’s not a solid rock to stand on. Look at all of the people who are losing insurance. Plus, employers are charging more and paying less themselves or putting more of it on the employees. It’s just a bad deal.”

You make the point in your book that by setting up the system so that the government takes care of the poor through Medicaid and the elderly through Medicare, you left the most healthy population to the for profit health insurance industry and saddled the public with the least healthy populations – the poor and the elderly. 

Wasn’t that a prescription for disaster?


In the 1960s, President Johnson and the Democrats could have covered everyone but didn’t.

“Medicare for All didn’t really come up back then and it has been avoided in the subsequent efforts on health care reform. The Clinton health plan in the late 1990s was very complicated. In the lead up to the Affordable Care Act, Medicare for All didn’t become part of the equation. I do include in the book some of the historical lessons we should have learned by the failure of these past efforts at health care reform.”

“For example, under the Clinton health plan and the Affordable Care Act, the tendency was to get all of the corporate stakeholders in the room to see how they can work things out. In the room you  had Big Pharma. You had the insurance industry. You had the hospital industry. And it’s no surprise you don’t get Medicare for All with universal coverage, price controls and any real accountability.”

Where are the significant corporate crime problems in health care?

“President Dwight Eisenhower warned about a military industrial complex. The same thing happened with health care – we got a medical industrial complex.”

“I  look across the medical industrial complex and you see corruption and fraud everywhere with limited oversight. Hospitals merge into ever larger hospital systems that get near monopoly levels. And they can charge what the traffic will bear. As they get bigger, the prices of course go up. And then they have it gamed with upcoding for what services are provided. They have ways of sending people in to do chart reviews to find out other codes for other conditions that they can bill for in a visit, even though care wasn’t provided for.” 

“They can keep people in observation status for days and days and not admit them. They can repeat a CT scan in an ER even though one was done a few weeks earlier. Things like that.” 

“Costs of air ambulances have soared since private equity firms began buying up ambulance companies. This whole thing about surprise medical bills from hospitals and ambulance services is a huge problem.”

“Nursing homes are another big drain of money. Private equity firms have systems of pooling money from investors, borrowing more, then buying, revamping and selling off nursing home companies maybe four to five years later. But before that, they cut staff and expenses, driving down care and then they file for bankruptcy.”

“Most nursing homes are now in big chains. One of the big chains is Life Care of America. We had one of their nursing homes here on San Juan Island. The same things happened. They cut nursing staff. The care got worse. And then they left with three weeks notice to patients and their staff even. It’s a bad deal.”

“With the pandemic, the nursing homes are epicenters for more deaths. Their infection control is terrible. They have been warned by federal regulators to rein in their bad habits. But no. It’s all about money.”

“Then you look at Big Pharma. We know how exorbitant their drug prices have been. There have been secret deals with drug makers and pharmacy benefit managers such as CVS Caremark and Express Scripts. They drive up prices.”

“Then you say – why haven’t physicians and organized medicine stood in the way of some of this? But they are complicit. Some physicians buy into facilities themselves and own speciality hospitals or ambulatory surgery centers. Physicians haven’t stood up well enough.”

“The private health insurers – it’s a long story. But they make lots of money by privatizing Medicare and Medicaid managed care plans. They impose higher copays and deductibles. They restrict choice through narrowing the networks of physicians and hospitals.”

You quote Malcolm Sparrow the Harvard researcher who wrote the classic book License to Steal about fraud in the health care industry. 

I interviewed him ten years or so ago about health care fraud and asked him – would fraud under a single payer be reduced? And his answer wasn’t yes. He was not convinced. 

“It depends on how it is administered. It would have to be a full court press to pass Medicare for All and then have the administrative competence and integrity to make it happen.”

“Uwe Reinhardt was an economist at Princeton for more than 40 years. He died just a year ago. He was a supporter of universal coverage. But he thought the USA is too corrupt a country and a government to ever make it happen. That is an open question – how competent we would be?” 

Even with the pandemic and all of the suffering, you would think that the first thing the Democrats and Republicans would do would be to have Medicare for All at least through the pandemic. Trump did extend Medicare to anyone facing a COVID-19 illness. But why haven’t the Democrats put forth full Medicare coverage for everyone – at least through the run of the pandemic?

“They are not bold enough. To an extent they beat themselves. Think back to ten years ago. They could have gone for Medicare for All. But no. The amount of lobbying inside the beltway is huge. Both sides of the aisle are bought off. The middle of the road Democrats – Democratic Congressional Campaign Committee (DCCC) – are facing down the progressives. The Democrats can’t get their act together very well. Many of them are pretty much bought off.” 

“I go into this in my books – how much money legislators on both sides of the aisle get from the medical industrial complex lobbyists. It’s just huge.  The Democratic Party platform should have Medicare for All, it doesn’t.”

You say the medical industrial complex has corrupted both political parties.

“The most Joe Biden can do is lower the age for Medicare to 60. He’s not moving off that. And that disappoints me.” 

Why won’t these piecemeal solutions – lower the age of Medicare eligibility, Obamacare – work?

“Because it leaves the private for profit health insurance industry in charge and ripping us off with administrative overhead four and five times traditional Medicare. Traditional Medicare runs with less than three percent overhead. Private insurers run 18 to 20 percent.”

“Health care became a commodity for sale in an open market. As the years went by, health care became more and more controlled by a smaller number of larger stakeholders. They developed monopoly or near monopoly control of their markets. There are not very many independent hospitals anymore, except some in rural areas and low income areas, where a for profit hospital doesn’t want to go.”

[For the complete q/a format Interview with Dr. John Geyman, see 34 Corporate Crime Reporter 21(13), Monday May 25, 2020, print edition only.]

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