The Carcinogens That Come in Pay Envelopes

Cancer kills. Every American knows that. What every American doesn’t know: Cancer is also helping some Americans become exceedingly rich. And these Americans will do most anything to keep their windfalls coming, even prey on the fragile psyches of the families cancer strikes.

Truth in Advertising, a nonprofit consumer group, has a new report out that quantifies how rapidly this preying is escalating. Top cancer treatment centers, the research group charges, are “deceptively promoting atypical patient experiences through the use of powerful testimonials.” Back in 2005, U.S. cancer centers spent $54 million showcasing these deceptive testimonials via TV commercials and online. By 2014, that annual outlay had more than tripled to $173 million.

One typical testimonial in this advertising barrage features an effusively grateful patient named Carl, a pancreatic cancer survivor. What the ad leaves unmentioned: Pancreatic cancer five-year survival rates run just 8.5 percent.

“Any cancer center can find a patient who has beat the odds,” notes the new Truth in Advertising report, The Deceptive Marketing of Hope. “But using that atypical experience to play on the hopes and fears of such a susceptible patient population has real consequences.”

Cancer patients deciding where to go for treatment, for instance, may be so impressed by a testimonial that they stop looking for treatment alternatives and travel out-of-state, ignoring “closer, better, or less expensive options” much closer to home.

The bad actors that Truth in Advertising calls out in the group’s new study include, as we might expect, many of the for-profit cancer centers that now dot the American health care landscape, outfits like the five-hospital Cancer Treatment Centers of America chain.

This CTCA chain has spent an average of over $90 million annually over the past three years on advertising. Truth in Advertising has tracked down over 130 CTCA ads that portray a cancer patient with a life-threatening diagnosis doing well after receiving treatment at one of the company’s treatment centers. None of the ads carry the “material information that the majority of cancer patients with the same diagnosis do not survive five years.”

Misleading marketing is working exceedingly well — for the top brass at Cancer Treatment Centers of America. The company has relocated its headquarters to Boca Raton, a prime South Florida wealth magnet. The CEO who engineered the Boca Raton relocation, a former luxury hotel executive, celebrated the move by picking up a new $2-million waterfront home.

The company’s founder and current chairman, Richard Stephenson, has found the cancer treatment business particularly rewarding. This Illinois mega-millionaire, points out Johns Hopkins University biomedicist Steven Salzberg, has used “the profits from his cancer hospitals to support his favorite right-wing causes.”

In 2012 alone, the Washington Post reports, Stephenson poured $12 million into a major national Tea Party group.

But the bad actors pumping out misleading cancer treatment ads also include, somewhat surprisingly, many of the nation’s most prominent cancer-treatment not-for-profits. Four of the top five cancer treatment advertisers last year, Truth in Advertising researchers have found, held nonprofit status.

The most celebrated of these, the Memorial Sloan Kettering Cancer Center in New York, shelled out $11.7 million last year marketing testimonials from survivors like “Joanne S.,” a stage-four lung cancer patient. Such patients overall have a 4.7 percent survival rate.

Why are nonprofit cancer-treatment execs mimicking the misleading marketing of their for-profit brethren? Misleading cancer patients can turn out to pay quite handsomely for nonprofit execs, too. Memorial Sloan Kettering CEO Craig Thompson pulled down $6.7 million from his day job in 2016 and nearly another $600,000 last year serving on the corporate boards of two pharmaceutical companies.

Outrageously excessive executive pay, numbers like these suggest, amounts to an economic “carcinogen,” a cancer-causing agent that first takes hold in the for-profit private sector, then spreads throughout our body politic, corrupting everything it touches.

That touching can at times get as literal as the handshakes executives at for-profit corporate health industry giants share with the nonprofit health-care execs who sit on their corporate boards. The nonprofit execs see the multiple millions their for-profit peers are making and wonder why they can’t make those millions, too.

Over time, the more that nonprofit execs rub shoulders with their for-profit counterparts, the more they imbibe the for-profit sector’s standard operating procedures, misleading marketing included. Last month, Memorial Sloan Kettering CEO Thompson resigned under pressure from his two corporate boards after a New York Time exposé revealed that his nonprofit’s chief medical officer “had failed to disclose millions of dollars in payments from health and pharmaceutical companies in medical journal articles.”

Eight other Memorial Sloan Kettering executives still sit on corporate boards, a situation, medical ethicists believe, that “can shape the way studies are designed and medications are prescribed to patients, allowing bias to influence medical practice.”

The best way to protect against that bias? We could, of course, insist that nonprofit execs simply cut their compromising ties with the corporate health care sector. A more thorough-going approach to reform would be to directly discourage the outrageous executive pay that gives so many executives an incentive to behave outrageously.

We could start this discouraging by leveraging the power of the public purse against enterprises that pay out excessive rewards to their execs. One example: The for-profit Cancer Treatment Centers of America chain qualified for $2.4 million in state and local government subsidies when the company relocated to Boca Raton in 2014. Lawmakers could pass legislation that denies subsidies to companies that pay their top executives over 25 times what their typical workers are making.

Localities, states, and the federal government could also deny government contracts to enterprises, for-profit and nonprofit alike, with wide pay gaps between their CEOs and workers— or tax these companies at a higher rate than companies with more modest CEO-worker pay ratios.

Legislation along these lines has already come before five states, and one city — Portland, Oregon — has this year put in place a pay-ratio inequality tax. Corporations doing business in Portland that pay their execs over 100 and 250 times what their typical workers are making pay corporate taxes at a higher rate. Similar moves are also gaining lawmaker interest in Congress.

Big-time corporate execs in the United States currently average over 350 times what average workers are taking home. We may not ultimately be able to vanquish cancer. But we can certainly vanquish the CEO pay excess that so exploits cancer’s victims.

Sam Pizzigati co-edits Inequality.org. His latest book, The Case for a Maximum Wage, has just been published. Among his other books on maldistributed income and wealth: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. Follow him at @Too_Much_Online.