Understanding the Forces Shaping US Health Care

Dr. Jason Crowell talks with Dr. John McDonough about the historical and economic factors shaping the US healthcare system and why understanding these systemic forces matters for neurologists and patient care. 

Read the related article in The Harvard Gazette. 

Disclosures can be found at Neurology.org. 

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Podcast Transcript: 

Dr. Jose Merino:
This is Jose Merino, Editor-in-Chief of the Neurology Family of Journals. The Neurology Podcast provides practical information to neurologists and other clinicians to help them provide better care for their patients. Thanks for listening and have a great week.

Dr. Jason Crowell:
Hey, this is Jason Crowell from Norton Neuroscience Institute in Louisville, Kentucky. Thanks for listening to today's Neurology Podcast. Most of our audience members are practicing neurologists, you're in training or you're in an academic setting or in private practice. And for those of us who are in practice, we are well aware of the challenges of helping our patients access drugs, getting prior authorizations approved, the other areas of friction that exist in our healthcare system. And I would say that whether we realize it or not, these areas of friction are symptoms of larger choices about how our hospitals and clinics operate.
And so to help us think about these things, today we've invited John McDonough to join us. John is a professor of public health practice at the Harvard T.H. Chan School of Public Health. We recently read an article about John's work published August 18th, 2026 in the Harvard Gazette and wanted to invite him to join us today.
So John, thank you so much for your time.

Dr. John McDonough:
Pleasure to be here with you, Jason. Thanks for inviting me.

Dr. Jason Crowell:
So John, in this piece that I read in the Harvard Gazette that was describing some of the work you've done, you point to a specific historical pivot around 1980 when US healthcare spending grew at a pace that's disconnected from the rest of the industrialized world. And that was 40 to 50 years ago, so most of our audience does not have experience with the practice of medicine prior to that time. The title of your upcoming book is America's Wrong Turn: US Healthcare in the Neoliberal Era. Can you help summarize what you mean by this wrong turn that happened? And also, can you just give us some background about what you mean by this neoliberal era?

Dr. John McDonough:
So I've been influenced by a Yale political scientist, Stephen Skowronek, who suggests that there's a helpful way to look at American political economic history, not through the lens of individual presidential terms like say the Nixon era or the Reagan era or the Obama era, but to look at larger multi-decade politico economic eras where there are dominant political strains. And Skowronek says we've had five of these eras over the 250 years.
But just to talk about the two most modern ones that are most relevant to our discussion here. The first one started in 1933 with Franklin Delano Roosevelt's inauguration as president in the midst of the Great Depression. And inaugurating an era that became known as the New Deal era, which was an era of muscular federal and state governmental leadership and guidance in terms of steering the economy toward greater productivity, toward higher wages, toward all different kinds of innovations like social security and Medicare and Medicaid.
That era didn't end when FDR died. It went on until 1980 when it collapsed in the end of the Jimmy Carter presidency with upset and anger over what was then called stagflation, the Iran hostage crisis, the gas crisis from the Middle East with OPEC. So it was succeeded in 1980 with the inauguration of Ronald Reagan. And Ronald Reagan came in openly talking about let's move away from the New Deal era. It's not working anymore. We have to go forward. And that era was in some ways, people call it the neoliberal era because it was an era defined by a set of economists like Milton Friedman, Friedrich Hayek, other folks, Robert Bork, James Buchanan and others.
And it represented a move toward let's have a much more muscular free market defining all manner of sectors of American economy and American society. Let's de-emphasize government to the maximum extent possible and just allow the free market to run. We have a professor at Harvard in the college, Naomi Oreskes, who refers to the era as the free market fundamentalist era. That's her label. I prefer neoliberal just because neoliberalism was actually a global movement in the '70s, '80s and beyond. It still lives on today in many places and in many ways.
And it was not aimed at trying to transform American medical care or our healthcare system, but healthcare and medical care in the US is so huge and so important that it's really impossible to imagine that we would go through this societal revolution and medical care would go untouched. So my premise is that it did get touched quite a bit in a series of ways that I look at and say it created a lot more harm than benefit. And so inviting people to look at the neoliberal phenomenon in terms of its impact on health and medicine in the United States.

Dr. Jason Crowell:
One of the key shifts that you highlight is the massive market consolidation that has occurred here in the healthcare system. And we've seen this in our own neurology practices. Small independent subspecialty practices are very rare these days. Many of them have been bought up by health systems or private equity firms. And we understand that when healthcare merges occur, the claimed value is in regards to more efficiency, less overhead, but you cite research that shows prices actually increase following hospital mergers. So has this consolidation in healthcare, how has it affected the delivery of healthcare?

Dr. John McDonough:
So antitrust, anti-monopoly, anti-oligopoly began in earnest in the United States in the 1890s after the passage of the Sherman Antitrust Act. And over the succeeding 90 years, we had a belief that big corporate concentration in any sector, whether it's a humongous sector like steel or railroads or even relatively minor sectors that mattered in the economy, had to be confronted and addressed when you had companies that were growing by consolidating, swallowing up hostile takeovers that created then market dominance for one or several firms.
And in the 1970s, and this came straight out of the neoliberal era, it was led by a man by the name of Robert Bork, who many people have probably heard of, former Solicitor General under President Richard Nixon, failed candidate for the Supreme Court in the mid-1980s. But in the 1970s, he took on the antitrust consensus that had governed the nation for 80 to 90 years. And he said, "We've got it all wrong. Big is not bad. If companies get big, it's because they deserve to be big and we should just let that happen. And if they get beaten up by the market, that'll take care of it, the discipline of the market."
And he put these ideas together into a book and the book was called in 1978, The Antitrust Paradox. And he proposed what he called the consumer welfare theory of antitrust, which says that if two companies want to come together and they can demonstrate that consumers will benefit from lower prices, then it should be a green light. Do what you want, go ahead. And in the early 1980s, they rewrote fundamentally the federal antitrust guidelines, which provide the consensus to federal judges, federal prosecutors, states, everybody. Here's how we see it. And they rewrote them in 1981 and '82 to bring the consumer welfare hypothesis of Robert Bork into the mainstream in terms of this is how we look at antitrust.
And so we had about 40 years of diminished antitrust enforcement kind of going into hibernation that affected the medical and healthcare community. So by the year 2020, in US counties, about 95% of US counties had what's called highest levels of corporate concentration. And with medical specialization at that point, it was about 65%. It's more now. For insurance companies, it was 75% highly concentrated markets all over the country. And there's a lot of newer economic research over the past several years that says that if we really want to understand why medical care, healthcare prices, insurance premiums, everything else is going up so much, they're looking at it. They're saying the extraordinary degree of corporate concentration over these decades has to be considered one of the prime, if not the most important culprit in terms of explaining what went on and how we got so consolidated relative to today versus where we were in the late 1970s.

Dr. Jason Crowell:
Let's turn to drug costs for a second. We have talked about drug costs on this podcast for several years. We have closely followed the work of ICER, the Institute for Clinical and Economic Review, and the work that they've done in helping us understand the value of drugs. Our multiple sclerosis colleagues are very familiar with the high cost of drugs. We now have these anti-amyloid therapies available for patients with certain neurodegenerative disorders that our cognitive neurologists are using.
And of course we celebrate these new drugs for our patients with neurological diseases, but the price tags that come with some of these drugs can be staggering and are often associated with significant friction in terms of accessing them. So whether it's step therapy or prior authorizations or large out-of-pocket copays. Would you say that these administrative frictions are a deficiency of our current system, or a necessary feature to contain the cost?

Dr. John McDonough:
They are to some extent signs of dysfunction in the system in the sense that they've led to outcomes that have significantly diminished the level of competition and competitiveness. Just one data point for you, between 1985 and 2002, the market share of the top 10 firms in the pharmaceutical industry more than doubled from 20% in 1985 to 48% in 2002 in global sales, and it's gone up even more today. So we've seen the same story of heavy corporate consolidation. We see that far more than the money that pharmaceutical companies spend on research and development, which is the claim of what they need all this money, is substantially greater amounts of money sent out to their shareholders in terms of dividends and financing stock buybacks to an extraordinary extent that we've never seen before.
Stock buybacks are when a company basically just buys back shares from stock owners just to shrink the share so that everybody's price then rises. Prior to the 1980s, since the 1930s, the New Deal era, buybacks were illegal. They were outlawed. They were considered to be corporate exploitation and manipulation that should not be permitted. And now it is just a regular feature that is part of another related growing phenomenon that we've seen over these past 40 to 50 years, which is the term financialization. That across the medical care sector, more and more of what is done is not being done with the prime purpose of creating products, improving care, improving people's health.
It's being done to increase the financial wealth of the holders of capital to an extent that we have never really seen since way early in the 20th century, a long time ago. And so we see it in pharmaceuticals, we see it in medical devices, we see it across the board, we see it in hospitals. We even see it to a significant extent in the nonprofit hospital sector where we have had the creation of what we call mega providers who are now no longer just care delivery organizations, but they are major research institutes.
And that has advantages and that has a role, but it is like everything else there's sometimes something called too much of a good thing. Or too much of the magic of the market in a way that then has harmful side effects and harmful results in terms of what people most want. We've had 40 years of tremendous growth in the size of our healthcare system in the United States as we have seen life expectancy still continue to grow, but grow way, way behind all of the other leading advanced industrial nations. And if we're not here about improving life expectancy, what are we here for?

Dr. Jason Crowell:
To quote you, you said it's going to take radical action, quote, "Radical action to make changes that fix the system." So I would ask if you were advising healthcare policymakers today, what's the top two or three things, the top interventions that you would provide to improve the lives of our patients? Or by proxy to help us as neurologists and physicians who are trying to help these patients?

Dr. John McDonough:
I would say right now that we are in an incredibly vital and dynamic period right now in 2026. In some ways it reminds me of 2005 and '06 when people were thinking about the next wave of health reform in the United States, which ended up resulting in the Affordable Care Act. But the people were looking three and four and five years ahead and starting to ask the questions, what's most important? What would have the greatest impact? I see us in a similar phase right now, and so there are loads of individual ideas. I put them into categories.
We really need to re-empower patients and consumers in this system who have been turned into widgets for the financialization of the whole sector. We need a brand new patient bill of rights in the United States that gives patients protections around prior approvals, around excessive cost sharing, around various forms of manipulation by the market. Signing non-disclosure agreements and mandatory arbitration, rather than being able to take grievances to court, for example, that is now almost universal.
We need a new set of protections for physicians, nurses, and other parts of the healthcare workforce to be able to exercise their rights and protect their professional values and identities in the face of a corporate takeover of so many parts of American medicine. We're dealing so much with moral injury to providers who find themselves at the wrong end of the stick of private equity, for example, and other kinds of corporate irresponsibility.
We need a new code of conduct for corporations. We need a much more aggressive attitude toward market consolidation, whether it's monopoly or oligopoly or whatever. And we saw that, we started to see that in the first four years of this decade when President Biden put in a woman named Lina Khan in charge of the Federal Trade Commission and Jonathan Cantor in charge of the Justice Department's anti-monopoly division.
We saw over those four years, and it was too brief a time to take full hold, but an extraordinary turning of the tide in terms of the ability of the large companies to take over at will anything that they wanted and to be able to merge and consolidate in ways that has been harmful, particularly looking at the vertical integration of major companies such as, for example, United Health Group or CVS. We've seen no longer just growing in their own spaces, but so United Health taking over providers, taking over pharmacy benefit management, taking over health data in ways that are just, it's too much power in one entity.
And it has the tail wagging the dog and probably at this point, the tail is larger than the dog itself in many ways. Lots of categories also. We need to really rethink access to care in the United States, how people obtain it. And so a lot of not just individual interventions, we're going to need whole categories. We didn't get to this place through one or two or three or four policy changes. We saw 40 years of policy changes inside and adjacent to the medical care sector, and that needs to be addressed, but it's not going to happen overnight.
It's a long-term project. And it's not about moving backwards to where we used to be 50 years ago. It's about a new vision of where we have to move forward in this age, in this era right now.

Dr. Jason Crowell:
And John, as we wrap up here, I started by saying most of our audience members are busy in clinical care, maybe some do research, but we see a lot of patients, inpatient hospital duties. It can be easy to hear about these massive, very large scale policy issues and feel ill-equipped to make any difference. And so for the neurologist who's listening to this podcast on her commute home, who wants to provide great care, but she feels overwhelmed by the surrounding systems of care, do you have any recommendations about what she and all of us can be doing to meaningfully engage with or push back against some of these issues we face?

Dr. John McDonough:
I know people in your specialization, Jason, are incredibly challenged keeping up with the fast pace of innovation in terms of research and innovation and discovery, and find it hard to keep up with that in many ways because of how fast things are moving in this new environment. I would suggest that it's also important to pay attention to the political and economic factors that surround your specialization. To understand and think about how changes going on in these areas that are adjacent to medical care practice and to surgical practice today are having real impacts in terms of how people are able to deliver care in ways that they think is most effective and efficient for their patients.
And so I'd say that paying attention to some of these economic and political factors, weighing in with members of Congress who are considering perhaps changes to the rules around monopoly and consolidation or private equity, or other manifestations of the financialization and corporatization of American medical care, it's very important to do some education. For example, if you want to understand where we are or where we've come from in terms of market concentration and monopoly, I just recommend a single book called Goliath by a guy named Matt Stoller, S-T-O-L-L-E-R. Which is a 140 year history of monopoly and antitrust in American society. A different explanation, one that I find quite compelling and quite important.

Dr. Jason Crowell:
Terrific. We really appreciate you joining us today, John. Again, I've been speaking with John McDonough. He's a professor of public health practice at the Harvard T.H. Chan School of Public Health. We came across his work that was described in the Harvard Gazette published back on August the 18th. John, thank you again for your time and your expertise. We really appreciate it.

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