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Diving briefs:
New research shows that shareholder payments from large transported healthcare companies jump three or more times between 2001 and 2022, and healthcare companies report to shareholders who reinvest their income in improving patient care. It suggests that being a priority. Over these 20 years, shareholder payments rose 315% from $54 billion in 2001 to $170.2 billion in 2022, a survey published in JAMA Internal Medicine published. In total, shareholder payments over that time frame reached $2.6 trillion. Overall, the healthcare industry allocated 95% of its total net profit to shareholder payments, but in three sub-sectors: healthcare facilities, distributors and pharmaceuticals, shareholder payments actually exceeded net profits .
Dive Insights:
It is not always clear what a company is doing with profits. However, new research shows that large, publicly traded healthcare companies reinvest in revenue in drug development, healthcare, or other areas that can improve costs or access to healthcare, but instead It suggests that the portion is being sent back to Wall Street investors. American patients.
Publicly available companies distribute ownership to the public in the form of stocks on the stock exchange. Companies frequently repay capital to shareholders and increase the value of the remaining shares by direct payments called dividends or by buying back their shares.
Yale University research teams are interested in analyzing their payments in light of rising patient costs, taking into account the fact that the government funds most of U.S. health services.
To that end, we investigated data from the Refinitiv Workspace, which provides historical information about the S&P 500 Healthcare Index companies, according to the research methodology.
The team has seen a sharp increase in shareholder payments over the past 20 years, surpassing the total net profit of a few subsectors.
Essentially, companies are pouring profits into shareholders instead of investing in their healthcare systems. The findings complicate the claims of drugmakers, for example. For example, high drug prices are required to recover initial spending on research and development.
“Shareholder payments have material implications,” said Victor Roy, lead author of the study, in a statement. Roy is currently an assistant professor of family medicine and community health at the University of Pennsylvania, but was a national clinical scholar at Yale while his research was completed.
“An increase in capital distribution to shareholders of publicly available companies may be related to higher prices and may not be reinvested in improved access, delivery or research and development,” Roy said. I said that.
The researchers proposed that policymakers encourage reinvestment in patient care and limit stock buybacks based on the findings.
Healthcare companies already grow to bring hundreds of millions of dollars in revenue and billions of dollars in profits each year, making a claim focused on patient benefits. It has already faced enduring criticism about it.
According to CMS data, this growth corresponds to snowball spending on healthcare in the US, with experts increasing prices for goods and services by 7.5% in 2023, up $4.9 trillion.
That's $14,570 per person when many Americans report struggling to provide prescription drugs, insurance premiums and other medical expenses.
Condemnation is being utilized by drug makers amid the ever-growing prices of medication, sudden or unexpected medical costs, health insurance companies' medications and hospitals' growing prices due to delays or rejections.
Criticism of health insurance companies in particular has intensified since the death of Brian Thompson, CEO of UnitedHealth payer business UnitedHealthcare. Thompson was killed in New York City in December for a crime he believed to have been motivated by anger towards a health insurance company. The killing caused a wave of anti-insurer Animus online.
Many major health insurance companies have pledged to reform their business practices following Thompson's death.
