The Myth of Greed in U.S. Healthcare
CEOs in Trouble for Doing Their Jobs Too Well
The U.S. healthcare system is often criticized for its high costs, limited access to care, and endless scandals involving massive executive compensation. Public outrage typically focuses on individual healthcare CEOs, who rake in millions while patients struggle with rising premiums and denied treatments. It's easy to see these CEOs as the villains of the story, driven purely by greed. But while greed plays a role, focusing solely on it lets us off the hook. It allows us to pretend that the problem is just a matter of personal morality when, in fact, the system itself is built to prioritize profit over patients.
This narrative of individual greed overlooks the deeper issue: healthcare CEOs are not acting outside the system—they are following its rules perfectly. The real problem lies in the legal and financial structures that demand profit maximization. Investors, too, are bound by their duty to seek returns, creating a cycle of exploitation that's much larger than any single executive. The greed myth, then, becomes a convenient way to avoid addressing the structural forces that truly drive healthcare's dysfunction.
The Comforting Story of Greed
It’s easy to think that if we just replaced a few greedy CEOs, things would improve. Consider the case of Andrew Witty, CEO of UnitedHealth Group, who earned $23.5 million in 2023 while the company made $25 billion in profit. Meanwhile, patients faced ever-increasing premiums and restricted access to care. These stories lead us to believe that the moral failings of individual executives are responsible for healthcare's dysfunction. But this narrative is overly simplistic and allows us to avoid questioning the system itself.
We act as if we just need more ethical leaders at the helm, but even the most well-meaning executives would face the same pressures under the current structure. U.S. healthcare is built around profit, and its leaders are legally obligated to prioritize shareholder returns. The problem isn’t just personal morality—it’s baked into the system’s design.
Fiduciary Duty: A System that Demands Profit
Healthcare executives can't simply "do the right thing" if it means making less money. They are bound by fiduciary duty—a legal obligation to maximize profits for shareholders. This forces them to make decisions that prioritize financial returns, even when those decisions negatively impact patients.
Take Gilead Sciences, for example, and their hepatitis C drug, Sovaldi, which they priced at $84,000 for a 12-week treatment. Many were outraged, calling it pure greed. But if Gilead had priced the drug lower, they could have been seen as failing their shareholders. The system demands that companies maximize profits—not because executives are particularly greedy, but because they are legally compelled to do so.
It’s not just the executives. Investors also have fiduciary duties, which create even more pressure for healthcare companies to deliver strong financial returns. It’s a cycle: investors demand returns, executives respond by cutting costs or raising prices, and patients suffer. Blaming individual greed helps us avoid questioning this entire system.
The Historical Shift to Profit-Driven Healthcare
To understand how U.S. healthcare became so profit-focused, we have to look at its transformation over time. Starting in the 1980s, neoliberal policies pushed deregulation, privatization, and a market-driven approach to healthcare. This shift turned healthcare from a service-oriented industry into a profit-driven enterprise, where financial returns often come before patient care.
As healthcare corporations mirrored broader capitalist trends, the focus shifted toward short-term profits and shareholder value. Fiduciary duties reinforced this shift, legally binding executives to prioritize profits over long-term care quality or access. Healthcare became commodified, and corporate leaders were required to pursue profit as a structural necessity, not just out of personal greed.
The Scapegoating of Executives
By focusing on individual CEOs, we create the illusion that punishing or replacing a few bad actors will fix the system. Consider Heather Bresch, former CEO of Mylan, who faced intense public backlash after the price of EpiPens increased by 500%. She became the face of corporate greed, and when she stepped down, it seemed like justice had been served. But Mylan's decision to raise prices wasn't just Bresch's fault—it was a product of the system's built-in incentives for profit.
When we scapegoat executives like Bresch or Witty, we avoid confronting the system itself. Removing a few "greedy" people doesn't solve the problem, because their replacements will face the same pressures to maximize profits. The greed myth makes us think the problem is fixed when a CEO steps down, but the underlying structures remain unchanged.
The Role of Investors: Demanding Returns at Any Cost
Investors play a crucial role in perpetuating the profit-driven nature of U.S. healthcare. Institutional investors, pension funds, and individual shareholders all invest in healthcare companies expecting financial returns. These investors, in turn, are bound by their own fiduciary duties to maximize returns for their clients and beneficiaries. This creates a feedback loop in which healthcare companies are continuously pressured to deliver strong financial performance, even if it means cutting costs, raising prices, or denying care.
The focus on individual greed distracts us from these structural forces. Executives don’t operate in a vacuum—they are responding to the demands of investors who expect consistent profits. Focusing on personal greed allows us to ignore how deeply financial imperatives are embedded in the system.
Power Dynamics: Reinforcing the Profit-Driven System
The structural imperatives that drive profit-maximizing behavior are further reinforced by the political power of the healthcare industry. Healthcare companies wield enormous influence over lawmakers and regulators through lobbying and campaign contributions. Organizations like PhRMA and the American Hospital Association (AHA) have successfully shaped legislation and regulation to favor their financial interests, protecting their ability to prioritize profits over care.
For example, Gilead Sciences spent millions lobbying against drug pricing reforms that would have threatened their profits. Investors supported this lobbying because it protected their returns, illustrating how deeply embedded profit maximization is within the political and regulatory structure of U.S. healthcare. This influence ensures that laws and policies continue to favor healthcare companies, allowing them to prioritize profitability, even when it comes at the expense of patients.
Moving Beyond the Greed Myth: Building Alternatives to Profit-Driven Healthcare
If we're serious about fixing U.S. healthcare, we have to move beyond the simplistic story of greed. Yes, greed exists in the industry, but focusing on it alone distracts us from the real issue—the system itself. The legal frameworks, investor demands, and political power structures are what truly drive healthcare's exploitation. To address these problems, we need to rethink how healthcare is structured.
This could mean embracing alternative models, like non-profit healthcare systems, single-payer programs like Medicare for All, or public ownership of hospitals and pharmaceutical companies. These systems would prioritize patient care over shareholder returns. But achieving this kind of reform requires challenging the immense political and economic power of the healthcare industry. It means addressing the structural forces that drive exploitation, not just the individual actors who benefit from it.
The greed myth allows us to pretend that fixing healthcare is easier than it actually is. It lets us believe that punishing a few greedy executives will make things better. But that's just not true. The U.S. healthcare system is built to prioritize profit over people, and unless we confront that reality, nothing will change.
To build a healthcare system that truly serves patients, we must move beyond the idea that greed is the root cause of the problem. The real issue is the system that mandates profit-maximizing behavior, regardless of who's in charge. Only by addressing these structural realities—legal mandates, investor pressures, and political influence—can we hope to create a healthcare system that puts people before profits.