Inequality is Weakening Social Security. Here’s How We Fix That.
When Congress set the cap on Social Security contributions in 1983, they didn’t anticipate forty years of rising inequality. And it’s cost us — a lot.
by Rex Weiner
“‘Not Fair’: Insiders Say Hospitals Favor Rich and Famous,” headlined the exposé by NBC’s Los Angeles-based I-Team, delivering an inside look at inequality in the American healthcare system. Airing on May 8, 2017, the report featured concerned doctors, the irate head of a hospital worker union, and outraged patients, all confirming on camera that wealthy people get preferential treatment and regularly jump the line for healthcare at hospitals in Los Angeles and across the country.
NBC’s I-team based their segment on my story, “Healthcare vs. Wealthcare,” previously published by the nonprofit investigative news group Capital & Main. That piece reflected two years of research into how privilege is working to subvert our best public healthcare institutions.
“If rich people had to wait in line for an MRI like everyone else,” one doctor told me, “the American healthcare system would be changed overnight.”
“If rich people had to wait in line for an MRI like everyone else, the American healthcare system would be changed overnight.”
My Capital & Main piece began with a deathbed promise to a friend, not the usual way I start assignments.
My friend, a man in his mid-sixties, was dying from a terminal form of cancer. His oncologist had prescribed a risky treatment that, my friend understood, might kill him. But only a single busy specialist, impossible to see, offered that experimental treatment at the UCLA Medical Center, a public institution with an impossibly long waiting list. My friend figured he’d probably never get the chance to take that treatment.
For anyone else, a mortal countdown would have commenced. But a call from my friend’s savvy doctor got his patient admitted quickly to UCLA’s world-renowned, top-ranked Ronald Reagan Hospital.
Appointment with the specialist scheduled, treatments began, and things went well, with the kind of first-class care and extraordinary attention you’d expect more from a private clinic than a nonprofit, taxpayer-supported teaching hospital like UCLA.
Then a hint of a quid pro quo soon emerged: an invitation out of the blue for my friend and his wife to lunch with UCLA’s dean. Not a UCLA alum, my friend wondered what was up. My wealthy friend, his savvy doctor explained, was about to be solicited for a large donation.
In the meantime, the red carpet treatment at UCLA continued. My friend found himself ushered ahead of roomfuls of waiting patients because, he was told by the hospital staff, “you’re on the list.”
What list? Born in modest circumstances, my friend’s business success over a lifetime of entrepreneurship allowed him a first-class lifestyle. He enjoyed the luxury he’d earned. But my friend also possessed a fierce sense of right and wrong. He had directed a considerable portion of his financial resources to philanthropy, underwriting social welfare organizations around the world. Now his life might be saved because he was rich enough to be “on the list” — and the basic unfairness bugged him.
That unfairness bugged my friend’s doctor, too. His wealthier patients received life-giving treatment in quick order while others less fortunate had to wait their turn. Frustrating for the doctor. Too often, fatal for the patient.
In fact, the inequity of the situation had become this particular doctor’s obsession. For several years he’d amassed information documenting what he saw as a fundamentally unfair and possibly illegal system of favoritism for high-net-worth patients at the UCLA Medical Center, a California state-chartered institution.
If only he could get a reporter interested, the doctor said to my friend, he was sure this privileged treatment would become a big story.
“I know a reporter,” my friend said.
Mostly as a favor, but also out of curiosity, I agreed to meet with the doctor. At dawn over lox and bagels at a local deli, we took a corner booth. A grey-haired, sixty-ish ringer for Spielberg, the doctor scanned the room, making sure we weren’t somehow being watched.
“You never know,” he said, lowering his voice before pulling documents from a fat file and making his case against the American system of healthcare generally and UCLA specifically. He described the UCLA list as “a workaround for the very people with the money and power to change the system.”
“We have one healthcare system for the 1 percent and another for everyone else,” the doctor noted. “I call it wealthcare.”
“We have one healthcare system for the 1 percent and another for everyone else. I call it wealthcare.”
The doctor had delved into state public records, noting the suspiciously outsized salaries of certain UCLA executives and medical center doctors involved in fundraising. He had collected articles about lawsuits charging abuses and favoritism in the UC system over the years and compiled impressive amounts of data on our dysfunctional American healthcare system.
Plenty of intriguing leads, but none of them provided evidence of any UCLA wrongdoing. So I remained skeptical, even as we kept meeting over a period of months. But I’d promised my friend — and saw something genuine in this doctor. The son of a rabbi, the doctor held equality as a basic tenet in his worldview. He considered getting this story told his duty, a mitzvah. This good doctor — I’ll call him Dr. Tikkun — truly believed in that long “moral arc of the universe,” as Rev. Martin Luther King described it, bending toward justice.
I’d been a journalist all my life — on staff at Variety for many years as a feature writer and business reporter, a freelancer for magazines ranging from Vanity Fair to the Italian edition of Rolling Stone. But this would be, if I took this story on, my first healthcare story.
A rookie reporter new on the beat, I’d have to develop sources, learn new lingo, educate myself on basics, from the ins and outs of federal and state healthcare policy to the intricacies of hospital finance and medical accounting. A lot of work not likely to pay my rent anytime soon.
I would need time to prove — or disprove — Dr. Tikkun’s claim that an organized VIP program at the UCLA Medical Center was unfairly — and perhaps illegally — benefiting rich folks. My friend might not live long enough to read the final story.
And what brave editor would be willing to publish the piece? UCLA rates as a big-time advertiser in Los Angeles and generally holds a reputation as a positive force in the community.
Of course, I could just call UCLA and ask: Do you maintain a list of donors who receive preferential care? And so I did. Calling the main number, I described myself as a rich person looking for special medical care. The receptionist directed me to the UCLA website and an “Executive Care” program that required a fee and catered to corporations providing a special annual checkups as a perk for busy CEOs.
I called asking how I could get on “the list.” No list existed, the told me. Everyone just paid the Executive Care fee and was accepted. Nothing wrong about that.
I went back to square one, spending weeks just looking for a clue. I joined the Association for Health Care Journalists and used that group’s excellent network to find out if anyone had previously done articles on special medical treatment for people with money.
That phenomenon, I quickly discovered, had several labels: “concierge care,” “boutique medicine,” “retainer care.” I learned that doctors across the country were reducing their workloads, dropping patients at the low-end of the financial scale, and boosting their incomes by charging wealthier patients a fee above the usual insurance costs. These doctors offered a variety of amenities: nicer office décor, valet parking, decaf lattes, and no waiting.
Journalists had spotted the trend a few years earlier. Their articles described concierge services that included everything from deluxe menus to $10,000/night maternity rooms. Most of the coverage spotlighted private institutions and either simply shrugged at celebrity excess or treated the lavish interior décor of boutique medicine with wide-eyed, Town & Country-style awe.
A local TV reporter in Texas did turn up an “A-list” of 6,400 “preferred patients” at the University of Texas Southwestern Medical Center, causing a bit of a scandal back in 2008. The list supplied by a whistleblower included assorted top politicians, sports team owners, and the publisher and the editor of the Dallas Morning News, not to mention a hedge fund impresario or two and a billionaire former presidential candidate.
Like the UCLA Medical Center, the University of Texas Southwestern operated as a taxpayer-supported, state institution. Texas residents should have been outraged. But the scandal faded quickly from the media, despite a state audit that caused a UT executive’s resignation. The eventual fallout included the firing of the TV reporter who broke the story in the first place.
Beyond that less-than-encouraging journalistic precedent, I could not find much previous reporting on nonprofit public hospitals offering concierge care.
My research also opened up the world of medical ethics, where a fierce debate was raging. A slew of academics and policy experts were decrying concierge medicine, pointing out the unfortunate consequences of a rapidly developing two-tier healthcare system: privileged access for the wealthy and care of lesser quality for everyone else.
“Concierge medicine is fundamentally unjust,” notes Arthur Caplan, the frequently quoted head of the Division of Medical Ethics at New York University. “Concierge medicine is more a symptom of a broken system than it is a solution.”
Concierge medicine also raises legal issues. The IRS has strict rules for nonprofits that receive quid pro quo contributions. Concierge medicine, as a study in the Journal of Health and Medicine points out, “raises risks of violating various Medicare rules, state insurance laws, and private insurance contracts.”
My favorite ethicist turned out to be Taryn Vian, a professor of global health at the Boston University School of Public Health and co-author of Anticorruption in the Health Sector: Strategies for Transparency and Accountability.
Vian sees the money paid above standard medical fees as a kind of bribery, and she cites these fees as a feature of dysfunctional healthcare systems in the Third World that undermines attempts to reform these systems.
The expanding practice of concierge care in the United States, other analysts add, amounts to triage. Rich people live longer and healthier lives, while poor people get sicker and die sooner.
I found this avenue of inquiry educational, yet ultimately useless. Hard facts about wrongdoing — that’s what I needed to have an article I could sell to an editor. Meanwhile, I had to make a living. Months went by as I tackled other subjects, other assignments.
But three breakthrough moments would pull me back into the story. The first involved a man who’d made an offhand comment to his doctor — Dr. Tikkun — about a recent incident that had raised his blood pressure.
A wealthy accountant and money manager, this man had been playing golf at his country club with a couple of clients. They’d been discussing their medical issues, as middle-aged men do, when one of his clients pulled a card from his wallet and waved it around. The card, said the client, guaranteed him first-class treatment at UCLA as a major donor.
“I got mad,” said my source, after Dr. Tikkun connected us by phone. “I’ve got money, maybe not as much as this guy, but I’m not poor. And here’s this guy with this card that’s gonna save his life, while I’m waiting on line, dying, like every other shmuck?”
A membership card! This was the first evidence I’d found that a VIP system actually existed at UCLA, as Dr. Tikkun claimed. But what did the card say? What benefits did it grant? My accountant source could not recall and couldn’t say, suddenly becoming too nervous and afraid to share anything more — especially not the names of his golfing-partner clients.
But that reticence turned out not to matter. In my off-hours, just googling around certain terms, one idle search turned up photos of gala fund-raising dinners and PR events for the UCLA Medical Center.
Pursuing the names and titles further, the outlines of a fundraising structure began to appear — wealthy donors and VIPs, some of them corporate high-rollers, some Hollywood entertainment industry names, one of them the former CEO of a Las Vegas casino empire, all of them beaming for the cameras with the self-satisfied smiles of philanthropists “giving back” to the community.
“You’re on the right track,” said Dr. Tikkun one day over breakfast, many months into my research phase. Some of the fat cats in the photos I showed him had been his patients (he would not say which ones).
“But here’s the key to your story,” he said, handing me a book authored by UCLA’s previous provost.
Never Be Afraid To Do The Right Thing, by former UCLA Medical Center dean Gerald Levey, comes across as part memoir, part business advice for administrators of academic health care institutions. Dr. Levey outlines the process by which, over his 15-year tenure, he approached fundraising for UCLA. The basic “insight” he restates several times throughout the book: “Donors to AHCs expect quid pro quo for their gifts: access to the best medical care.”
“He confesses right there!” Dr. Tikkun insisted, pointing to his annotated and Post-It marked copy.
Indeed, the former dean, his prose alternating between personal pride and professional modesty, relates in his book how he gave out privileged access to healthcare in return for big contributions.
Dr. Levey, who had retired in 2010, did not choose to chat with me about his book. I had to prove independently that the practice Levey described was still going on.
Still struggling through his painful treatments, my friend was happily following my progress. The obvious irony: His life was being prolonged by the very thing — the privileged access — my story was targeting.
We considered this privilege somehow wrong. But people I talked to about the story — at dinner parties or in conversations with colleagues — often shrugged, expressing doubt that the special access raised any serious issue.
My friend’s life was getting saved, lucky man, so what’s the fuss? The well-heeled have always been granted special treatment — luxury rooms, the finest cuisine, advance medical care. Private institutions in Los Angeles such as Cedars Sinai and St. John’s and other health facilities across the country have long exchanged privileged access to live-saving medicine for a price. So what’s the big deal?
Others did see a big deal. I spoke to the head of the union that represented UC hospital workers, who confirmed that the VIP practice at UCLA was well-known — and widely resented — by hospital staffers.
A union rep helped round up a group of workers from various UC hospitals. They told me first-hand how managers informed them which VIP patients were to receive special attention, and how that information impacted their performance. But all were fearful of losing their jobs, and only one would go on the record.
The next breakthrough: a press release I found online announcing the first annual meeting of something called the UCLA Health Board in November 2012. I called the phone number on the release and reached a woman described as the head of development for the UCLA Health Foundation. She was curious about my purpose in calling. Off the top of my head, I told her I represented a wealthy client who was interested in contributing to the foundation and becoming an active member of the board.
“Oh, really?” she said, becoming friendlier.
I said that my client wished to “give back” and wanted to know how to go about it — what was required and what the benefits were. Two weeks later I received a phone call from the person who had become the new head of development. She described how the UCLA Health System board is actually one of five different boards serving the UCLA Medical Center overall. Each “philanthropic board” has no operational functions or governing powers other than fundraising. Board members didn’t need to attend board meetings. They did need to make a significant contribution.
“Members have access to patient and guest services,” the development head explained. “They receive assistance with appointments, direct action, a personal touch on services.”
“It’s high-level access,” she continued. “Members have a special number they can call.”
“Some doctors are hard to get to,” she added. “If the member needs to see a specialist who might not be seeing patients, we can help with that.”
I later sat in the living room of a posh Bel Air manse, listening to a major UCLA benefactor describe how she’d put in a call to Dean Levey, whose personal phone number was doled out as a perk to wealthy donors, on behalf of a friend in a dire emergency.
I would go on to learn, from the UCLA Medical Center spokesperson Tammi Dennis — who used to report on healthcare for the Los Angeles Times — that the Center’s privileged access program had approximately 260 to 270 members and “is not actively promoted,” she explained, “to prevent creation of demand beyond capacity.”
In other words, the program’s services are reserved for a small number of people.
If California’s UC system wasn’t so short on beds (3,666 beds for a population of 39 million), if the state’s healthcare system wasn’t already so overburdened, if UC hospital workers weren’t ordered to prioritize VIP patients, if California’s taxpayers weren’t forced to subsidize wealthy people’s healthcare, maybe this privileged access program would be okay. But the UCLA Medical Center kept the program under wraps, a move that seemed to acknowledge that this privileged access was not okay.
And so my editors at Capital & Main were satisfied that my research had uncovered a practice that appeared highly unethical, if not outright illegal, and my article was published last fall, carrying forward their ongoing coverage of growing inequality in America.
Amy Corral, a producer from NBC’s local LA investigative “I-Team” approached me, once “Healthcare vs. Wealthcare” was published, interested in doing a report on the issue. I met with her, discussed my research and gave her access to my sources, several of whom spoke on camera. But when the segment aired, the report carried no mention of the Capital & Main story. Corral said in an email she was sorry.
But Dr. Tikkun was happy to see the issue getting exposure. He mailed copies of my story to every state official in California.
And my friend? He didn’t live to see the story unfold in its long, hopeful arc. But I felt sure that he would have been pleased. Sometimes a promise is the most a reporter gets to keep.
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