The American health care system, as I see it, is undergoing a quiet, clinical decapitation. At the root of this crisis is a fundamental, irreconcilable conflict of interest: the presence of health care companies on the public stock market. While we like to believe our medical institutions are guided by the Hippocratic Oath, the reality is that once a company goes public, the Oath is replaced by a fiduciary duty to the shareholder. Some will find that argument offensive. Those profiting from the current arrangement certainly will.
In the high-stakes theater of the NYSE and NASDAQ, patient wellness is no longer the product. It is merely the raw material used to manufacture quarterly earnings.
The EPS trap: managing optics, not illness
In a private firm, the path to profit is simple: provide a service so valuable that customers pay for it. In the public market, that logic is inverted. Executives are no longer compensated for long-term clinical outcomes; they are rewarded for the optics of growth. When an executive’s net worth is tied to earnings per share and stock price volatility, the mission shifts from healing patients to navigating capital flows.
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The result is a board of directors that prioritizes financial engineering over medical engineering. They aren’t looking for the next cure; they are looking for the next share buyback.
The efficiency lie: when cost-cutting becomes lethal
Public markets demand “efficiency,” a term that has become a dangerous euphemism in a hospital setting. To hit the quarterly numbers that analysts demand, public firms engage in a predictable cycle of self-cannibalization:
- Staffing as a spigot: Nurses and technicians are treated as variable costs rather than essential infrastructure. Layoffs are timed to hit quarterly targets, leaving lean teams to manage heavy patient loads.
- The ghost of deferred maintenance: Testing, quality assurance, and equipment upgrades are pushed into the next fiscal year to make the current one look profitable.
- The automation degradation: Human expertise is replaced by low-cost, automated systems not because they provide better care, but because they scale without the burden of benefits and salaries.
Growth on command: the cancer of constant expansion
The most toxic demand of the public market is not just growth, it is continuous, predictable growth. Stable, healthy growth is viewed as a failure by Wall Street. This growth-on-command dynamic pushes health care organizations to roll out new service lines and technologies prematurely and to expand into markets before their clinical systems can support the load.
Private firms can afford the creative risk of a five-year research cycle. Public firms cannot. They avoid any risk that might create earnings volatility, leading to a stifling of actual innovation in favor of rent-seeking behavior and administrative bloat.
A systemic moral hazard
Quality care cannot survive a compensation structure that rewards substance-free optics. When we allow health care to be traded like tech stocks or oil futures, we are accepting a system designed to fail the vulnerable. A stock ticker measures extraction, while a hospital should measure restoration.
If we allow the 90-day fiscal clock to dictate the pace of medical care, we will continue to see the erosion of the patient-doctor bond. It is time to admit that the “invisible hand” of the market has its thumb on the scale, and it is the patients who are paying the price in more than just dollars.
The proposal
What I propose is simple to state and radical in consequence: policy that removes companies delivering health care, in any form, from the public stock market. The reasoning is straightforward. Health care is an ecosystem, and if even one element of that ecosystem becomes geared toward sheer profit-seeking, the incentive seeps into everything downstream, as it already has.
Health care is a public good, and applying a growth-on-command model to a public good inevitably degrades the good itself. To preserve the basic ethic of medicine, we must be willing to change the ownership structure of health care, from its most elemental services to its most complex systems, if we truly want a system designed to deliver health outcomes rather than earnings.
Yodhin Aggarwal is a health policy student.
