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.

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