Some More News - SMN: The Perverse Incentives of The Healthcare Industry

Episode Date: August 17, 2022

Hi. Boy oh boy, the pursuit of profit has really screwed up healthcare in America. It screwed up a lot of other things, too, but this episode is about healthcare. This is Part 2 in our series looking at how the Profit Motive creates bizarre and often grotesque incentives that push industries to do the opposite of what they should. Get your BETTER THINGS ARE NECESSARY AND POSSIBLE merch here: https://www.teepublic.com/t-shirt/207... Check out our new compilation series, CODY COMPS here: https://www.youtube.com/playlist?list... Please fill out our SURVEY: https://kastmedia.com/survey/ Check out our new series SOME THIS! - https://www.youtube.com/playlist?list... Support us on our PATREON: http://patreon.com/somemorenews Check out our MERCH STORE: https://www.teepublic.com/stores/some... SUBSCRIBE to SOME MORE NEWS: https://tinyurl.com/ybfx89rh Subscribe to the Even More News and SMN audio podcasts here: Apple Podcasts: https://podcasts.apple.com/us/podcast... Spotify: https://open.spotify.com/show/6ebqego... Stitcher: https://www.stitcher.com/show/even-mo...  Get an immune-supporting FREE 1 year supply of Vitamin D AND 5 free travel packs with your first purchase if you visit athleticgreens.com/morenews and try AG1 today. Don't mail and ship the hard way. Sign up with Stamps.com today. Sign up with promo code MORENEWS for a special offer that includes a 4-week trial, plus free postage and a digital scale. No long-term commitments or contracts. Just go to Stamps.com, click the microphone at the top of the page, and enter code MORENEWS.  Secure your online data TODAY by visiting http://expressvpn.com/somenews. That's http://expressvpn.com/somenews and you can get an extra three months FREE. SOURCES: https://docs.google.com/document/d/1fsa4rkMWgZTPdro1NmRcCSkvkCQ3VeQu1ImQJ1aw8Cw/edit?usp=sharing   Support the show!: http://patreon.com.com/somemorenewsSee omnystudio.com/listener for privacy information.

yeah well your mom needs to repay her debt in full by the end of the month or face substantial legal consequences so oh no oh no i'm so sorry i didn't know i didn't i didn't know that sucks oh hi what's up didn't see you there how long have you been watching? Were you here when I was crying? I wasn't crying. Welcome back to fucking some more news, I guess, except we don't have any news because in order to do the news, you need to have money. And we don't have any money due to the fact that our sponsor from last week has not only decided to stop sponsoring us, but is also suing us for defamation. Turns out companies don't like it when you call them an evil soulless industry that prioritizes money over human wellbeing

or any genuine pursuit of justice. Also, Katie has continued her research trip, but is very upset about the situation. In fact, she's so cross that she extended her trip another few weeks while she attends a producer conference at some guy's chateau on international waters. Oh, that's gotta to be here now okay hey prison boy all right can you look up the odds for russian roulette with 10 people also

i solved our financial issues no need to stop doing this show that's great okay it looks like she's sending the information over the teleprompter lizard is just loading it up. And here we go. Hey, news fan or fans, huh? How would you like some exclusive limited edition, some more news merch? That's right, idiots. Come on.

We're giving away such memorable collectibles like our old backdrop, Wormbo's entire face, and Cody's shoes, and front door, all for the incredible price of $350,000 per item? I mean, I guess I can buy a new front door for less, but who's gonna... Someone has just purchased the door. And there it goes.

Someone just took my front door. Okay, that was wacky, but I guess we can now afford to do this episode in our series about the quest for profit infiltrating our basic human needs. An episode that I guess is gonna cost $350,000. Not sure where that money's going. It's Katie again.

Hey, doorless, no need to look up those odds going. It's Katie again. Hey, doorless. No need to look up those odds anymore. It solved itself. Also, does the TSA have any policies against anteaters? Profit over lives. The healthcare industry. All right, the title monkey's back. I mean, we are dating after all,

according to the narrative that we have laid out, which is not to say that I need fan art of that so you can stop sending us fan art of that. Also, there's a strange dog in my house now because I have no door. Okay, game face, all right? It's time to talk about healthcare in America. Fuck us.

This is of course a complicated subject. So before we start talking about the nitty gritty sicky committee, here's a basic summary of all of the working parts. The first group involved are the hospitals, doctors, pharmacies, and any other organization that actually does the work of providing healthcare, which is why we call this group the providers.

Basically any medical facility in the country falls under this group, which can get confusing because we sometimes talk about employers providing insurance, but that's not what we mean by capital P providers. In America, while there are some government run hospitals, the majority of all providers are privately owned with about 56 to 58% of those being nonprofit

and the rest being run as for-profit industries. The next group, the group receiving the healthcare, we will call patients. That group seems pretty self-explanatory. It's like us and junk. The third group is the insurance companies, either private or public sector. This group is called the insurers or the payers,

because in theory, they pay the providers large sums of money for their medical services. These payers handle the oftentimes complicated financial transactions with the providers so that patients don't have to do it. And in return, they get paid an ongoing fee called a premium, either directly by the patient or as is most common in the United States,

by group four, the employers. Or let's call them ployers here because come on, we're on a P roll. So we gotta keep that going. So the ployer pays the payer, the payer pays the provider, the provider treats the patient, the patient works for the ployer

and the antelopes eat the grass. Circle of life, plurkle of life. We lost our P-roll and I'm sorry. Anyway, it sounds simple and in an ideal world, it would be. But because we live in this, let's call it world, it isn't simple at all. And I'm going to spend the next 30 to 500 minutes explaining to you why that is.

There's literally no way for me to know someone already stole my wall clock because I have no door. Let's start with the basics. Healthcare in the United States is fucked up its holes. All right, basics over. Let's now expand on that. Contrary to common sense, the healthcare industry is one of the most costly industries

in the country, and the US is an outlier when it comes to GDP per capita, as well as healthcare consumption per capita. America spends on average around $12,000 per person per year. The next closest country, Switzerland, spends around $7,000, which I'm almost positive is less than 12,000. When compared to nine other wealthy countries, including Canada, the UK, and Australia, the US spends the most on healthcare as a percentage of GDP, yet comes dead last in overall healthcare performance, is the least affordable, and ranks last in equity. However, despite these frankly abysmal outcomes,

healthcare is still somehow one of the most profitable, if not the most profitable industry in the United States. According to IBIS, an analytics and consulting company, the healthcare industry has one of the highest grossing revenues in the US, already bringing in hundreds of billions of dollars this year. So to recap there, American healthcare costs the most,

does the least, and yet is one of the most profitable industries. I wonder where all that money is going. It must be that money monster we've covered in the past. One of these days, we're gonna get him. Coney, I'm gonna get you, you money monster. Pow, zip, zap. Okay. Shit on a light bulb.

How exactly did we get here? Let's start with the book, An American Sickness, written by physician and journalist Elizabeth Rosenthal. It details how the archetype for today's patient hospital insurance employer model was developed at Baylor University Medical Center in Dallas when sometime in the early 1920s, the medical center realized the hospital was carrying a huge number of unpaid

bills. They then devised a system with the local teachers union wherein teachers could pay $6 a year in return for a guaranteed 21 day stay at the hospital, which at the time would have cost $525 without the insurance. The model quickly spread and was called Blue Cross Plans, a name you might still recognize today if you're lucky to have decent insurance. Blue Cross Plans were not originally intended to make money. At this point, healthcare was still considered a charitable endeavor. So rather, the goal was to protect patient savings and keep hospitals afloat,

an admirable goal that I hope lasts. It doesn't. Ah, spoilers! I'm burning! Anywho, as medical technology improved, so too was the insurance business forced to adapt. The invention of ventilators and development of the first anesthesia

suddenly meant that far more people could be saved from disease and injury, huzzah! It was super convenient because the 1930s and 40s had a bunch of wars and epidemics and everyone ate asbestos straight out of the can. So flaky and dry. Try some asbestos. Never, don't do it.

So suddenly, 21-day stay, $6 a year plans were no longer good enough. Americans needed insurance plans that could provide continual coverage of their medical needs. So when the National War Labor Board froze salaries during World War II, companies realized they could attract workers by offering health insurance,

which the government liked so much that they ruled that money spent on health benefits wouldn't be taxed. A win-win for everyone. All we had to do was not fuck anything up with like, greed. Shouldn't be too hard, you know? It's not like greed is on some really popular list of bad things people always do.

I don't know what they'd call it. Like seven mind-blowingly bad things we don't want people to do. Parentheses, doctors hate number six. Of course, at this point, Rosenthal explains, Blue Cross and its partner, Blue Shield, were basically the only major insurers in existence. And because they were prioritizing actually helping people,

the number of insured Americans skyrocketed. Between 1940 and 1955, the percentage of Americans with health insurance went from 10% to over 60%, which is a pretty big deal. This jump was absolutely due to the fact that Blue Cross Blue Shield accepted everyone who wanted to sign up and charged all members

the same rates, no matter how old or sick. If, like me, this seems to you like the only reasonable way to handle something as important as healthcare, then boy oh boy, do I have some extremely unsurprising and unfortunate news for you coming up. You said no spoilers! I can change my mind.

Despite the two blues charitable models and their popularity, the new demand for health insurance presented a business opportunity for other less magnanimous companies to swoop in and begin offering insurance on their own terms. For example, accepting specifically young, healthier patients that they knew could make them a profit. Because you see, actually having to provide medical care

to a sick person isn't nearly as cost-effective as charging a healthy 20-something a monthly rate in perpetuity. This is, of course, why young people are cooler than us olds and also why we need to harness their youth for our own eternal replenishment. One day! These new companies charge different rates

depending on things like your age or whether you had a preexisting condition. They also offer different policies for different costs, which offer different levels of protection. Hey, weird, that seems like a way worse system designed to run the country into the ground for the sake of profit. So obviously that's the system that stuck

because capitalism without government regulation simply rewards the companies that make the most money, which is why some industries that we need to survive should perhaps be exempt from that system. Even the blues eventually caved, becoming for-profit in the 1990s. And as insurance companies became more and more profit-focused, insurance started to become more and more expensive.

In America in 1970, per capita spending was just $353 per person, or around $2,700 in 2022 money. Contrast that to today, where, as we previously mentioned, the per capita spending is over $12,000. And of course, all of that extra money is going exactly where you think it's going, to the people at the top of the insurance companies. UnitedHealth Group, the largest health insurance company with a 15% market share,

made $17.3 billion in profits in 2021. Their CEO, Andrew Witte, made a shit ton in total compensation the previous year, $418,000 in salary, $1,470,000 in bonuses, $8,025,000 as stocks, $2,675,000 as stock options, which I guess are different from stocks somehow, and $268,000 in other types of compensation. What the fuck that means. Maybe he swept up around the offices or something as well. That was nice of him. Oh, thanks, Andrew.

All in all, Witte's compensation totaled $12.9 million goddamn dollars in a single year. Anthem, the second largest insurance company, made $6.1 billion in 2021, and their CEO received $17.1 million in compensation in 2020, while Aetna, the third largest insurer, made $7.1 million in compensation in 2020. While Aetna, the third largest insurer, made $7.9 billion in profits and provided their CEO with $20.4 million in compensation. Aetna is also owned by CVS and uses its leverage as,

you know, a healthcare provider to funnel its patients towards its own goddamn pharmacies. Weird how we're just allowing that to happen. Then again, pretty weird we let any of what I just said to happen. Seems like we've allowed a bunch of large corporations to hold us all hostage so they can make an obscene amount of money

because we all need insurance. And so it's really fucking weird. We've slowly been eliminating all of our not-for-profit options. And by we, I actually mean politicians in the upper class, so I guess it's not actually that weird. It's kind of like selling off your front door in that it helps you in the short term,

but retrospectively, it causes a lot of problems. Speaking of which, my shoes appear to be gone, not because we sold them. Someone just crawled in my house and took them off my feet while I was talking. Also, no bitters for the backdrop, huh? You wanted my door, but not the backdrop? Looks like Katie also wants to put my tie on sale

for just 2,500 payments of 2,999. That seems reasonable. I guess now we wait for more money to roll in. I kind of assumed we had enough to do the episode, but apparently Katie needs more money for some reason. In fact, do you have any like ads to run? Let's run some ads. Maybe someone will buy my tie

and then perhaps that'll be enough for Katie. Honk, honk, beepa beepa. Cody Johnston here to tell you about ExpressVPN. You know, after a long day in the news crypts, I like to unwind by drinking a tall glass of strawberry milk and popping on Police Academy 5, colon assignment, colon Miami Beach. Unfortunately, Police Academy 5,

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Police Academy 5, colon, assignment, colon, Miami Beach. Bleep bloop. Kapow. Vroom. Vroom. Vroomba. Vroom! Varoom! Varumba! Varumba! Mesa! Copper! Beep ya! Bang! Bang! Bang! Bang! Hiya folks, Katie Stoll here. Boy oh boy, it sure is hard to eat right these days. What with all these tempting grain silos spread all over America's heartland.

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Again, simply visit athleticgreens.com slash more news to take control of your health and give AG1 a try. Live health like Katie, devourer of worlds. Aha! And we're back. Ty got sold off. I really miss it. My neck feels exposed, you know?

Cause my tie normally goes all the way around my neck, like here on the show. Also, here's some other things. Katie has now listed on our Some More News auction site that apparently exists. Original Some More News news artwork studio cameras sound equipment seems like we need those exclusive some more news brand keys to cody's car some more news brand floorboards official some more news news dude pants production scripts semen doesn't say

whose and finally it just says manual labor by bearded grunt, comma, various tasks, safety slash dismemberment, not a concern. Great, I'm sure that'll all be fine. Okay, so now we've covered how insurance companies are, to put it lightly, really expensive and how that wasn't always the case. That's the payers. Now let's talk about the providers

or rather the doctor side of things. As you likely knew before I started talking, that wasn't always the case. That's the payers. Now let's talk about the providers, or rather the doctor's side of things. As you likely knew before I started talking, an uninsured hospital bill in the United States has become unbelievably expensive. In terms of healthcare in general, between 1993 and 2013, overall spending has grown an average of 6% each year. But hospitals specifically have grown in price

at a disturbing rate. According to one study, between 2007 and 2014, prices for hospital inpatient care grew 42% compared to only 18% for physician prices. You can obviously see this the most when it comes to pooping out kids from your butt. Here's an article from 1994 complaining that giving birth now costs over $7,000.

And now here's an article from this year putting the average at nearly $19,000. Pretty steep considering you can't even use them in coal mines anymore, you know, like we could in the 90s. And of course, prices can vary wildly from hospital to hospital, depending on the prestige of the institution, what state you live in,

and as always, the quality of the patient's insurance. In America, the country we've been talking about, many hospitals and doctor's offices got their start as religious charities. And in fact, many hospitals are still connected to religious institutions. Did you know that between 2001 and 2016, the number of American hospitals affiliated

with the Catholic Church grew by 22%? That's not particularly relevant to the episode that we're doing now, but it's weird, right? Get the fuck out of my doctor's office, Pope! I don't know his name. Pope Jeff! Or whatever. Yeah, Jeff. Originally, these institutions helped the poor name, Pope Jeff or whatever. Yeah, Jeff.

Originally, these institutions helped the poor and the sick over all else. Imagine that. And kept their fees as low as possible. Once insurance really took off as an idea though, that all changed. In the late 60s to early 80s, the number of Americans under 65

covered by good private insurance was at its peak, around 80%, which meant that patients were no longer paying directly out of pocket for medical services, which meant that hospitals could begin to charge much higher rates while remaining confident that they'd get paid. After all, insurers typically paid whatever was asked of them. If you'll recall, the original blue insurance plans had paid by the week for hospitalization, but once private insurance became more widespread,

and especially after the advent of Medicare in the 60s, hospitals began to charge per service, and thus begins the creep toward $18 aspirins. And so with all this new money just flopping around, there was suddenly an opening for a new set of roles at hospitals. Some kind of sex doctor? A super nurse?

No, I mean people needed to manage the money. These administrators cared more about the bottom line than about actually practicing medicine and began to make all kinds of wacky changes to the system. For example, an extremely drawn out will they, won't they plot line. Ooh, who's it gonna be? Physicians started to be told which procedures to conduct

to ensure better care. Maybe that's the one. Is that what it's gonna be? No? Better revenue. And they'd even receive statements comparing how much revenue they brought into that of their colleagues. At some hospitals, doctors even stopped getting paid

a salary, being treated instead as independent contractors. This forced the physicians themselves to start treating their profession as a business, if only to ensure that they didn't get screwed over. Doctors negotiated contracts to determine what percentage of their revenue they would receive, and the medical industry as a whole moved more and more towards a profit-centric model.

Suddenly, everyone wanted to get rich or die trying. Except it's not them who are dying. But for a brief glorious moment, this system worked super well for the hospitals. Between 1967 and 1983, insurers basically paid whatever the provider asked for and Medicare payments to hospitals increased from 3 billion to37 billion nationwide.

Eventually, though, the insurance companies decided that no, actually, they didn't really want to pay ever-increasing prices. In Medicare's case, the program originally paid hospitals whatever they charged. But in the 80s, they switched over to a diagnostic model. That meant the payment for a hospital stay would be a fixed rate based on the diagnosis, not the treatment. What that means is that hospitals would make more of a profit if they got their patients out of the hospital as fast as possible, regardless of whether or not they were actually ready to leave. Imagine paying a plumber an hourly rate versus paying them per leak that they fixed. The hourly rate encourages them to take their time with your pipes

while the fixed rate compels them to get the job done fast and cheaply. And by job, I mean sex, because in this scenario, it's a porn plumber. Anyway, while commercial insurers never really adopted this exact model, they figured out plenty of other ways to avoid paying the entire bill,

including hiring care managers for patients who would review elective surgeries and decide whether or not they were worth paying for, and negotiators to argue with the hospital about how much of the bill the insurer was going to pay. One side effect of this was that providers realized that even if they couldn't convince Medicare or one of the big insurance companies

to pay the high rates they were asking for, they could still bully smaller insurers and worse, uninsured Americans into paying exorbitant rates. And so as the situation snowballed, everything became more and more complex with separate rules, funding, enrollment dates, and also out-of-pocket costs for employer-based insurance, private insurance, Medicaid, and Medicare. Each of these sectors requires consumers to make a bunch of complicated choices. And for providers, this means dealing with a shit ton of regulations

about usage, coding, and billing. This is why the US spends about 8% of its healthcare dollar on administrative costs compared to the 1% to 3% in other countries. When your system is unnecessarily complicated, you gotta pay math nerds to do all your boring math stuff. And no one likes supporting math or math nerds. It's very much like the movie Brazil

in that we created this tangle of bureaucracy that led to its own sub bureaucracy. And now so much money and jobs are dependent on this web of horse shit that is now load bearingbearing to our economy. It's a job-creating industry of jobs that we definitely need. Even the job of boring ghoul determining how much debt a person needs to go into in order to not die. It's a Jenga tower of unnecessary costs. Speaking of, another thing we pay more for than other countries is doctors and nurses.

The average US family doctor earns upwards of $200,000, while specialists usually make over $300,000, way above the average in other industrialized countries. American nurses make considerably more than elsewhere too. The average salary for a US nurse is about $75,330 compared to $64,793 in Switzerland and 69,699, nice, nice, in Australia. For the record, I'm not saying we should be paying doctors

and nurses below what they deserve, except for that one guy who said I had weird feet. You have weird feet. But if that cost becomes prohibitive to Americans actually receiving care, then we clearly need to figure something out. Maybe if we had a system where things like daycare and healthcare and all of them,

income inequalities were fixed, then medical professionals wouldn't need a higher pay. I don't know. Again, this is all one big Gilliam-esque unchecked Jenga tower that can only be repaired by bulldozing the entire system. Hospitals like to point the finger at insurance companies for all the high costs, but rest assured,

they're both terrible and at fault. In 2021, the head of the American Hospital Association called out United Health Group, the largest insurance company in the market for its quote, jaw dropping profits. However, an investigation by Axios found, well, United Health posted a net profit of $4.3 billion. A system of 24 major tax exempt hospital systems

had a combined net profit of $11.9 billion, or nearly three times United Health's net profit in the quarter. This absolutely doesn't absolve United Health. $4.3 billion is still too much profit to be making off of a medically necessary industry that thrives on the misfortunes of the public. But it does demonstrate that hospitals are also terrible.

It's all just terrible. Boo to what I've been saying. Boo. And so just to do a recap, as more Americans become insured, hospitals saw that as an opportunity to raise their prices. Meanwhile, as insurance companies tilted toward a for-profit model,

they sought out ways to avoid paying these high rates. And so in the end, this all fell on the patients. Instead of this checks and balances system where hospitals and insurers work together to ensure with an E that they can provide medical help for everyone, each side tried to exploit the balance for their own gain. It's like two parents both assuming the other one

is watching the kid that's currently face down in the pool. Good luck paying for an ambulance. And hey, while we're here, let's look a little bit more closely at that phrase tax exempt hospital systems. It turns out nearly two thirds of the 5,000 hospitals in this country call themselves nonprofit. And much like nonprofit companies in general,

nonprofit hospitals pay no taxes. They pay no property tax, no state or federal income tax, and no sales tax. In theory, this is because those hospitals are charitable institutions and provide a public good. Tax exemption is supposed to help hospitals lower overall healthcare costs or provide free care to the people who can't afford to pay at all. But you know what's coming.

That is so clearly not what is happening. Those tax breaks just contribute to that $11.9 billion profit margin we just mentioned, which in turn goes into executives' pockets to pay for things like extravagant galas, private jets, and offshore bank accounts. Tom Thomas, founder of the Association of Independent Doctors,

calls this the biggest abuse of the US tax code by far. Silly name, but he probably has a point. Thank you, Tomas. In fact, a study by researchers at Yale, the University of Pennsylvania, Carnegie Mellon, and the London School of Economics found that nonprofits don't price any less aggressively than for-profits at all. Not only that, but these hospitals avoiding paying taxes do more harm to their communities than just the effects of high healthcare costs. After all, it's also a major industry that doesn't contribute its share to the local tax pool. In 2016, the Orlando Sentinel looked into what two non-profit hospitals would

pay in property taxes in just five central Florida counties and found that if these institutions paid property taxes alone, the community would net an additional $45 million a year. In a mid-sized Metro like Orlando, $45 million could pay for school teachers, community healthcare and financial aid for those who need it. Or maybe a bitchin' water park. Orlando needs more parks, right?

Water style? Or I guess more likely the money would go towards prisons and cops, but it could be for those other better things. Again, it's a Jenga tower. It's complicated. Burn it all down, etc. Figuratively and so forth. So not only have health insurance companies become fixated on profit above all else, they've also corrupted the actual practitioners of medicine away from their original goal of helping people like Sauron or Christian Slater in the film Heathers. Either way, it ends with something blowing up. I think it's Katie again. Hold on.

Hey there, weird feet. The auction is going great, but we're still not making a big enough profit. Sending info to the teleprompter lizard we've always had. Okay, really scraping rock bottom anyway. What's next? What could possibly be left to sell? I will read the goddamn... Hello, news sluts. It's me, Katie, speaking through Cody. One of the biggest comments from our many message boards

is that people from around the world would love us to do a live show. And so in response, we are now selling samples of Cody's blood. I'm sorry. Oh, hold on. Oh God. Okay, there's a dude coming to your door

with a bunch of plastic bags and a siphon pump. Be sure to let him in. Oh, wait, you don't have a door anymore. Have fun getting drained like a boxed wine at a teenage fuck party. By the way, weed is so much more expensive in Japan. It's wild. Okay, bye. Okay, well, I'm gonna go drag my furniture against the hole where my front door was.

So everyone, please enjoy these ads. Be right back. Hopefully still with my blood. Booyah! Katie Stoll here with the truth bomb for ya! You know, not everyone you know is on social media. And that's why I print out all my tweets and mail them to my friends and family. It's easy when you have stamps.com. They give you access to all the post office and

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ha ha ha. Hi. Hey, everyone. at the top of the page and enter code more news hi hey everyone nice to see you again we know each other right so i'm sorry i i failed at stopping that guy from coming in so i lost a lot of my blood just now buy my blood i guess no send it back to me but if you of my blood just now. Buy my blood, I guess. No. Send it back to me. If you bought my blood, you give it back, and then I'll just jam it back in there. Get in there, blood. I need you. News.

News. Hey, news. You know what else is kind of fucked up? The pharmaceutical industry. That shit is bad. We're still talking about healthcare, right? Yeah, I should actually grab like a cookie or something. Well, I ate something. Might've been part of a book.

Speaking of books, in an American sickness, that book from before, Elizabeth Rosenthal explains how, unlike with hospitals and the insurance industry, the pharmaceutical industry didn't get its start as a charitable endeavor, but rather grew out of 19th century small business, which relied on a little bit of science and a heavy dose of marketing.

In 1906, Congress passed the Wiley Act, also known as the Pure Food and Drug Act, which gave the Bureau of Chemistry the responsibility of regulating drug safety. Though in an era where most medicine was just cherry flavored heroin, their focus was mostly on making sure the chemicals in the pills wouldn't immediately kill people

rather than ensuring that they actually worked. It was replaced in 1938 by the Food, Drug, and Cosmetic Act, which enhanced the protections of the Wiley Act and also required testing of drugs before they could be marketed, a rule which feels pointlessly obvious now, but hey, those 1920s were a harrowing time

for medical illiteracy. Not like these new 20s. We're all on the same page in these 20s. The new law required manufacturers to prove to the FDA, at the time a relatively new government organization, that a drug was safe before it could be sold. The entire industry rebranded itself as Ethical Pharmaceuticals in an attempt to distinguish itself from its snake oil predecessors,

but the industry never really lived up to the name. In the late 50s, Senator Estes Kieffover launched an investigation that argued that medicines, like healthcare, were a public good and should therefore put limits and restrictions on marketing. Most importantly, Kieffover pushed for there to be more of an effort to make sure that the medicines were not only safe,

but actually did the thing they were supposed to do. Unfortunately, that last part never quite happened. In 1962, Congress enacted the Kiefer-Harris Drug Amendments to the Food, Drug, and Cosmetic Act, and pushed FDA guidelines that focused entirely on a quantitative approach to evaluating new drugs. To quote Rosenthal's book, book, I eat the book.

Book, concerns about value vanished. And so to get new products approved, firms had to prove that their medicines were safe and effective, which sounds cool and good until you read the fine print and realize that effective only meant more effective than nothing. Additionally, while early drug inventors rarely put much effort into patenting their products, that mentality eventually became

archaic. According to an economist at the University of Minnesota and director of a pharmaceutical research institute, the average number of patents per drug arose from 1.9 in 1982 to 3.3 in 2000. This was partly due to 1984's Hatch-Waxman Act, another amendment to the Food, Drug, and Cosmetic Act. The goal of Hatch-Waxman was to clarify the extent to patent protections for drug makers and to incentivize the makers of generic drugs to bring their cheaper versions to market

as soon as the patents expired. Like with many well-intentioned pieces of legislation, though, savvy businessmen learn to manipulate the law for their own gain. Despite its noble origins, the result of Hatch Waxman was that every generic entry is now preceded by a multimillion dollar lawsuit that delays the generics entry to the market

and drives up prices to boot. By the mid nineties and onward, America dominated the pharmaceutical industry due to our strong patent system and no pricing restrictions. You know, as opposed to those disgusting socialist freaks in Europe who set price maximums for medication. It's terrifying stuff.

Ah, I'm scared. By 2002, 82% of the global drug maker market could be found in the US. And our pharmaceutical industry has grown twice as fast as the economy at large since 1990. And like with the other examples we've looked at today, industry growth means an increased focus on profits, which means a decreased focus on public good.

Rosenthal quotes Dr. Marcus Ridenberg, a former editor in chief of clinical pharmacology and therapeutics who says, "'In the 1980s, people running pharmaceutical companies "'were still interested in social impact as well as the money. Now, money managers are in charge and these are pure business decisions.

Very funny how this quote seemingly pines for the good old days of the 80s when companies were interested in getting incredibly rich and also the social consequences. Those were the slightly less bad days. I'm fine, just pieces of book. So the ultimate poster child for this, let's say new business first attitude

is famously Martin Shkreli, who in 2015 bought the rights to Daraprim, a drug used to treat parasites that had been on the market for years and raised the price from $13.50 to $750 a pill. This pissed everybody off so bad that Shkreli ended up going to prison

for an entirely unrelated crime. Kind of like Al Capone, except at least Al Capone looked kind of cool while he did his crimes with the hat and suit and shit. Skrulli just looks like a smug wraith. Dude looks like Frodo's sickly cousin who never left the Shire and spends all of his time blogging about big titty goth mog girls. Brodo!

And while Brodo may be the most famous example, he is by far not the only one. Around the same time as the Daraprim price hike, Rodelis Therapeutics acquired cycloserine, a drug used to treat dangerous multi-drug resistant tuberculosis, and raised its price from $500 for 30 pills to, get this, $10,800. Did I get that right?

Or is the darkness taking me? Probably both, honestly. More book. Thankfully, in this one instance, that hike was actually rolled back after mass outrage caused the US Senate to investigate Rodelis' behavior. Yay, marginal accountability.

Boo, $10,800 bottle of 30 pills. Pharmaceutical companies claim that their exorbitant costs are all to fund the research and development of these and other medications. And that if prices were lower, they wouldn't be able to produce medicine as quickly or as safely. Aw, shucks.

This is a pretty shaky claim, though, since their profit margins far outpace their R&D spending. According to Rosenthal, these companies like to say it takes well over $1 billion to break a new drug to market. But she suspects much of that estimate is actually put towards testing markets, advertising, and promotion. Like everything else business-oriented that we've mentioned already, direct-to-consumer drug advertising has exploded in the past few decades, with national spending going from $166 million in 1993 to $4.2 billion in 2005. In 2006, direct-to-consumer advertising made up 40% of total pharmaceutical promotional spending. If the thought you're having right now is,

isn't it kind of gross and bad to market drugs directly to consumers? You're right, it is. America is actually only one of two countries that allow it at all, along with New Zealand, home of Brodo. Despite this, the Supreme Court has definitively protected drug advertising under the guise of free speech. And as we all know, the Supreme Court is a perfect and flawless institution

that has never made a bad call. Like with the hospitals, the drug industry has also tried to blame insurance companies for high prices. And like with the hospitals, it's absolutely both parties' fault. Look, I really can't make it clear enough how huge of a problem this is.

And it's continuing to get worse. 23 million people, nearly one in 10 adults in the US is in significant medical debt. And that number is only going to get larger. That's especially if the ongoing medical crisis that is the COVID pandemic continues to be a part of our lives, which at this point, it really, really, really,

really seems like it's going to. There's also the opioid epidemic, which is a massive problem that we haven't even mentioned yet, and honestly probably deserves its own episode. OxyContin, an opioid developed and marketed directly to the public by the Sackler family, has netted the family $10 billion in profit,

and also has led to the deaths of at least 500,000 people since 1999. Seems like someone should go to jail for that fact. Actually, it seems like a lot of people should go to jail for a lot of facts in this video. On that subject, last week we talked about how the prison industry probably shouldn't be an industry at all because if there's any type of system

that's devoted to making judgments that will affect people's health or freedom, that system probably shouldn't be run by individuals solely interested in making personal profits. Or at the very least, that system needs to be highly regulated in order to counteract the greed of the individuals running it.

And not to take away from the importance of that last video, but the healthcare industry is quite literally about life or death decisions that in no way should be made with profit in mind. And it's sort of amazing when you stand back from it, that America hasn't rectified this problem. And not only that, have instead politicized this in a way that's convinced a portion of America

that getting universal healthcare is somehow bad and socialist and like what the Nazis did or some fucking nonsense. And boy, even weirder that we managed to do this with the energy industry as well. And during an oncoming climate catastrophe being exacerbated by greedy individuals willing to risk life on this planet to make some extra cash.

Hey, that could make a good video. So yeah, I could talk about how single payer healthcare is a step in the right direction or how the Affordable Care Act put a few good band-aids on the problem, medical reference. There are obviously a bunch of practical proposals for a healthcare system in the US that would actually put health over profit.

But ultimately, none of that really matters if we don't fix that underlying issue that ties this, the prison industrial complex, and perhaps a future video about the energy industry altogether, which is the fundamental refusal of the powerful to cast aside capitalist ideas, even when it's literally killing us.

And even more importantly, we need to fix the perception that ideas like universal healthcare will be some kind of disaster for America. Because let me tell you, it's already a disaster now. It needs to change now, like today, because I think I might need to go to the hospital today. I'm very dizzy. Oh, good. It's from Katie. That's good. That'll be fun. I love her texts. Great news. I sold all your blood to a single anonymous pervert.

Even better news. They're interested in buying even more blood. Sending a dude over now to drain you, but not in the sex way unless you're into blood stuff. That's bad. Hey, I think that might kill me. That's bad. Hey, I think that might kill me. It's just an emoji of a gravestone next to a stack of cash, god damn.

Is there anything else they might want besides my blood? Kinda willing to do anything not to die. I'm sorry you all have to see this. Consider it a little behind the scenes look at how, ooh. Well, there is one thing. Good. That's not ominous. It's an emoji of a shaving razor. I don't know. Well, on the upside, I guess there's nothing left for them to take so... Hey Vincent! You sure this is the place?

Yeah the chick said it was in the house with no door and some sad looking baby face stick sitting at a stupid desk. Oh! Quit yapping and get that crowbar jamming. Yeah, that's it. Get all them floorboards out of here. Take the pictures off the walls too. Not bad, actually. Nice, solid, clean shave.

They killed my boy! From movies. Thanks for watching. Make sure to like and subscribe and leave a comment, positive preferably. And check out our podcast called Even More News. We've got another podcast called Some More News. It's the show you just watched,

but with your ears, you can just listen to it instead of watching me and my noble sacrifice. Looking good. We've got a patreon.com slash some more news for support that wise and merch if you want shirts made out of my hair a hair shirt it's an rem reference for you what else can i reference life you know the ultimate reference