We have a crisis of violent crime in America. We have a crisis of mental health in America. We have an explosion of homelessness in America. These crises are all related.

David Oshinsky, writing in The Saturday Essay for The Wall Street Journal, says, “The ongoing saga of the severely mentally ill in America is stirring attention again in a sadly familiar way. In Los Angeles in early 2022, a 70-year-old nurse was murdered while waiting for a bus, and two days later a young graduate student was stabbed to death in an upscale furniture store where she worked. That same week in New York City, a 40-year-old financial analyst was pushed onto the subway tracks as a train was arriving, killing her instantly. All three assaults, random and unprovoked, were committed by unsheltered homeless men with violent pasts and long histories of mental illness. In New York, the perpetrator had warned a psychiatrist during one of his many hospitalizations of his intention to commit that very crime.”

Fast forward to this May, 2023, when Jordan Neely, a homeless and schizophrenic man, threatened violence on a Manhattan-bound subway car.  Neely has spent most of his adult life in and out of emergency rooms, psychiatric wards and prison. He had 42 prior arrests, mostly for nuisance crimes, but also for assault. He’d recently pleaded guilty to punching an elderly woman in the face, fracturing her eye socket. Neely died subsequently when subdued by a former Marine, who is now on trial charged with second-degree manslaughter. Many of the witnesses on that subway car are referring to him as a hero. Oshinsky says, “Most of all, Neely’s death highlights the failures of a mental health system that allows profoundly disturbed people to slip through the cracks.”

How did we get to this failure of our mental health system?

In 1977, I was a third-year medical student when I spent three months on a psychiatry rotation at the Eastern Pennsylvania Psychiatric Institute in Philadelphia. The hospital was a state-run psychiatric facility for voluntary and involuntary treatment of the mentally ill. Most of my patients were diagnosed with schizophrenia. A recently developed drug, called Thorazine, showed great promise in treating these people – as long as they took their medications. Unfortunately, there were many uncomfortable side-effects that caused many of the patients to stop their medications unless they were in a hospital setting.

However, the promise of Thorazine was that these patients could be managed as out-patients, reducing the need for state-run psychiatric institutions – asylums as they were often referred to. Although the term “asylum” actually implies “refuge” for those in distress, the term has sometimes had a negative connotation due to reports of patient abuse and Hollywood versions such as “One Flew Over the Cuckoo’s Nest” with the famous “Nurse Ratched.”

Therefore, pressure mounted to close these institutions. This began actually in October, 1963, when President John F. Kennedy signed his last bill called the Community Mental Health Act, which aimed to demolish the walled-off world of the asylum in favor of 1,500 local clinics where patients could receive the drugs and therapies they needed. It seemed like a good idea at the time – and then reality set in.

Surveys of those released from state asylums found that close to 30% were either homeless or had “no known address” within six months of their discharge. One critic called it “a psychiatric Titanic.” The problem is these mentally ill patients need to take their medicine to avoid psychotic episodes, but without a stable family home with someone to make sure they took their medicine, most were off their medications in weeks. Homelessness became their new way of life.

On an average night, according to the U.S. Department of Housing and Urban Development, close to 600,000 people in the country will be homeless—a figure seen by many as an undercount. More than 40% will be “unsheltered,” or “living in places not suitable for human habitation,” and about 20% will be dealing with severe mental illness. Experts sharply disagree about the contribution of homelessness to rising crime rates. Some emphasize that most of these crimes are low-level victimless offenses, such as loitering or public urination. But others note the disproportionately high level of all crimes, including assaults and homicides, committed by those battling homelessness and mental issues simultaneously.

Oshinsky says, “Had Jordan Neely and the others been born a generation or two earlier, they probably would not have wound up on the streets. There was an alternative back then: state psychiatric hospitals_, popularly known as asylums. Massive, architecturally imposing, and set on bucolic acreage, they housed close to 600,000 patients by the 1950s, totaling half the nation’s hospital population. Today, that number is 45,000 and falling.”

This explosion of homelessness and violent crime was predictable. In 1973, a Wisconsin psychiatrist named Darold Treffert wrote an essay about the dangerous direction in which his profession was headed. His colleagues had become so fixated on guarding the patient’s civil liberties, he noted, that they had lost sight of the patient’s illness. What worried him was the full-throated endorsement of recent laws and court decisions that severely restricted involuntary commitments. What purpose was served by giving people who couldn’t take care of themselves the freedom to live as they wished? He titled his piece, “Dying with Their Rights On.”

The impact of deinstitutionalization of the mentally ill on them, as well as society as a whole, is hard to measure, but the statistics are frightening. The role once occupied by the asylum has been transferred to the institutions perhaps least able to deal with mental health issues – prisons and jails. The number of inmates in the U.S. in 1955 was 185,000; today that figure is 1,900,000. Unsurprisingly, the nation’s three largest mental health facilities are the Los Angeles County Jail, the Cook County Jail in Chicago, and Rikers Island in New York City. Approximately one quarter of their inmates have been diagnosed with a serious mental disorder.

This is no way to treat the mentally ill, nor to treat society as a whole. It’s time to bring back state-run mental health institutions to treat the thousands that need in-patient treatment. The cost of not doing this far exceeds the cost for taxpayers to run these institutions.

If you’re a regular reader of this blog, you know I’ve been talking lately about the moral crisis in healthcare affecting physicians and nurses. (Doctors Facing a Moral Crisis – Parts I-IV). This is being experienced by those healthcare providers who work for large hospitals or corporations. Today, we’re going to talk about the driving influences behind the trend for these healthcare providers to leave private practice and join these institutions.

While the trend in medicine has been a slow but steady increase in the number of physicians employed by hospitals and large corporations, the numbers have increased dramatically in the last few years. In 2019 and 2020, 48,400 additional physicians left independent practice and became employees of hospitals or other corporate entities. Nearly half that growth occurred after the onset of Covid-19, according to HealthcareFinanceNews.com.

The result of this movement of physicians is nearly 70% of U.S. physicians were employed by hospital systems or other corporate entities, such as private equity firms and insurers, leaving just three out of 10 of the nation’s physicians practicing in independent medical practices. This data is from early 2021, and others, such as Becker’s Hospital Review, peg the number in private practice at only 26% as of July, 2022.

Hospitals and other corporate entities acquired 20,900 additional physician practices over the two-year period, resulting in a 25% increase in corporate-owned practices. Meanwhile, 18,600 additional physicians left independent practice to become hospital employees with 11,400 from that shift making the move after the onset of Covid-19. In addition, hospitals acquired 3,200 additional physician practices over the two-year period, resulting in an 8% increase in hospital-owned practices.

Corporate entities acquired 17,700 additional physician practices over the two-year period, resulting in a 32% increase in corporate-owned practices, and 29,800 additional physicians left independent practice and became employees of corporate entities; 11,300 of those did so after the onset of Covid-19.

Why is this happening?

The private practice of medicine is getting tougher. When I started my career in private practice in 1984, there were no real hurdles to opening your own practice. Sure, I needed to learn the business of medicine, which is not taught in medical school, but I was young and eager to make a name for myself and I wanted to make my own decisions. I understood there would be some lean years until I established my reputation in the community, but I was sure to make more money than I had as a resident physician and I was willing to work hard and wait for better paydays ahead.

Managed care medicine was just beginning in 1984 and there were no real barriers to being on every healthcare plan that was offered in my community. People still had the freedom to go to any doctor they chose by reputation or word-of-mouth from their friends and neighbors. A young doctor in a fast-growing community like Orlando still had a good chance to grow his practice.

All that has changed today. First of all, most recent residency graduates aren’t looking to start their own practice. Today’s generation of new doctors want guaranteed salaries, fewer working hours and more weekends free, good benefits, and someone else to run the business of medicine. They are less interested in building their own business or reputation; they just want to practice medicine for a predictable number of hours a week and then have plenty of free time for themselves away from medicine.

Second, the growth of managed-care medicine has made all doctors dependent on the insurance contracts they need to stay in business. You can be a great doctor, but no one will be able to come to you if you’re not on their healthcare plan. The best contracts are snapped up by the most sophisticated medical practices with their own business managers who are experienced in negotiating these contracts. Young doctors starting out on their own are ill-prepared to negotiate contracts and even less equipped with the leverage needed to get these contracts. In short, they are left out in the cold, accepting the worst contracts available. For this reason, most new graduates gravitate to large private practices or succumb to hospital or corporate entities.

All this got worse when Covid-19 hit the medical profession. Most private physician practices suffered devastating financial losses as elective surgeries were cancelled, patients avoided crowded doctors’ waiting rooms, and generally avoided hospitals except for treatment of Covid-19.  I personally was working part-time to help a friend expand his growing hand surgery practice until the pandemic hit and he had to lay off many of his employees including me as the practice suffered 50% or greater losses in revenues.

In response to this added economic uncertainty, many physicians have left private practice seeking the economic stability of being hospital or corporate entity employees. Unfortunately for many, this has led to the moral crisis my recent series discussed, which is plaguing our healthcare system and its providers. In my last post, I recommended more physicians return to the private practice of medicine, but this will not be easy.

The best course will be for physicians to form more large private groups, giving them the business tools for success, while preserving their freedom to make their own medical decisions. The quality of healthcare in the future depends on it.

This is the fourth in a series of posts regarding the moral crisis doctors and nurses are facing in today’s healthcare system. This dilemma is largely experienced by those healthcare providers employed by hospitals and large corporations, who dictate the policies these providers must follow when treating their patients. I strongly encourage you to read the first three parts of this series before reading the fourth. They can all be found on my blog home page on the left side of the screen.

In Part III, I discussed how the corporate world is taking over medicine through large hospital systems and large corporate healthcare providers. Profits are driving the decisions doctors must make or risk losing their jobs. This has created a moral injury when their treatment decisions violate their moral values and medical training. This leads to early retirement, career changes, and even suicides. There is some evidence that these healthcare providers may be experiencing suicide rates approaching the rates of military veterans suffering from PTSD.

This phenomenon is driven by the increasing number of physicians leaving private practice and entering into employment contracts with hospitals and large corporations. Some surveys have estimated only 26% of physicians remain in private practice today. Over 135,300 physicians are now employed by hospitals or large corporations. This is a paradigm shift in the practice of healthcare.

What impact has this paradigm shift had on careers in medicine?

Eyal Press, writing in The New York Times, says, “As the focus on revenue and the adoption of business metrics has grown more pervasive, young people embarking on careers in medicine are beginning to wonder if they are the beneficiaries of capitalism or just another exploited class. In 2021, the average medical student graduated with more than $200,000 in debt. In the past, one privilege conferred on physicians who made these sacrifices was the freedom to control their working conditions in independent practices. But today, 70 percent of doctors work as salaried employees of large hospital systems or corporate entities, taking orders from administrators and executives who do not always share their values or priorities.

Philip Sossenheimer, a 30-year-old medical resident at Stanford, told me that these changes had begun to precipitate a shift in self-perception among doctors. In the past, physicians “didn’t really see themselves as laborers,” he notes. “They viewed themselves as business owners or scientists, as a class above working people.” Sossenheimer feels that it is different for his generation, because younger doctors realize that they will have far less control over their working conditions than their elders did — that the prestige of their profession won’t spare them from the degradation experienced by workers in other sectors of the economy. “For our generation, millennials and below, our feeling is that there is a big power imbalance between employers and workers,” he says.”

This sense of powerlessness has led many resident physicians to form unions. At Stanford, the medical resident voted to form a union by a tally of 835 to214. This has led to others forming unions in an attempt to have some measure of control over their environment and working conditions.

Forming unions is just one way that patient advocates are finding to push back against such inequities. Critics of private equity’s growing role in the health care system are also closely watching a California lawsuit that could have a major impact. In December 2021, the American Academy of Emergency Medicine Physician Group (A.A.E.M.P.G.), part of an association of doctors, residents and medical students, filed a lawsuit accusing Envision Healthcare, a private-equity-backed provider, of violating a California statute that prohibits nonmedical corporations from controlling the delivery of health services. A.A.E.M.P.G.’s aim in bringing the suit is not to punish one company but rather to prohibit such arrangements altogether. “We’re not asking them to pay money, and we will not accept being paid to drop the case,” David Millstein, a lawyer for the A.A.E.M.P.G. has said of the suit. “We are simply asking the court to ban this practice model.” In May 2022, a judge rejected Envision’s motion to dismiss the case, raising hopes that such a ban may take effect.

But the solution is not in litigation; it is in returning to the private practice of medicine. Physicians who have entered into employment agreements with hospitals or large corporations have done so because they were attracted by guaranteed salaries and benefits, freedom from the business of medicine, and regular working hours. But they didn’t recognize they were paying a high price for those benefits – the loss of freedom to make their own medical decisions. That’s a price I would never agree to pay and neither should other physicians. When they realize the price was too high, they will return to the practice of private medicine and both they and their patients will be happier.