The Medical-Industrial Complex: Why Doctors Should Start Getting MBA’s

A map of the US composed of red and white pills.

A piece I wrote for my Medical Sociology course.

Humankind is marked by progress.

A historian would be hard-pressed to prove that the Middle Ages was more progressive than our current era. Indeed, it seems that with each coming year, people are confronted with advancements in nearly every scope of life: technological, recreational, and, as will be addressed in this paper, medical. The medical industry is rife with discovery and advancement, supported by its approximate $3 trillion a year net worth, with healthcare costs approaching 18% of GDP in 2012 (Mills, 2012). However, the subtle term “industry” carries far more weight than expected.

President Eisenhower once warned the country about the threats of “undue influence of industry on government” when speaking of the military-industrial complex most applicable to that time. Parallel concerns are being raised about the industrialization of healthcare and these concerns are not unjustified (Mills, 2012).

The aptly named “medical-industrial complex” in theory attempts to empower patients but in practice, leads to a routine of medicalization that renders patients and doctors powerless in the face of pharmaceutical companies and managed care. At the root of this discrepancy lie deep sociological problems prevalent in other areas of society in dire need of attention and possibly, the redesigning of the healthcare system.

The increase of medicalization and the development of the medical-industrial complex to deal with medicalization is new to our society, coming to national attention only in the past 40 years. The concept was first introduced by Barbara Ehrenreich in her 1971 book, “The American Health Empire: Power, Profits and Politics.”

She referred to the health industry as “collections of multibillion-dollar businesses with dozens of components: doctors, nurses, hospitals, specialty centers, nursing homes, insurance companies, managed care companies, device manufactures, drug manufacturers, suppliers, consultants and banks” (Mills, 2012).

Moreover, the focus of medicalization has manifested itself through “rapid growth and consolidation of the industry into larger organizations, development of multi-organizational systems through horizontal integration, vertical integration amongst various parties, and significant movement from government to private (non-profit and for-profit) organizations” (Mills, 2012).

In terms of funding the medical-industrial complex, health insurance did not exist until the 1930’s, when patients had to be covered during the Depression. Factory expansion in the 40’s, coupled with worker shortages, allowed labor unions to negotiate with employers to include health insurance benefits.

Shortly after in the 60’s, the costs of diagnostic advancements and treatment options was beyond the ability of Americans without employer-based insurance, resulting in Medicare and Medicaid. As costs soared, the market of for-profit health insurance blossomed, with HMO and PPO plans being created in the 80’s and 90’s to keep costs in line with the consumer price index.

In present day, employers and consumers justifiably want to lower their costs and in turn, insurance companies are adding wellness discounts, health savings accounts, and self-funded plans. All in all, “investment and profit has become the driving force as healthcare has fully come into the age of capitalist production’’ (Mills 2012).

What used to be a professional domain has now become a market domain (Conrad and Leiter, 2004). Where before it would have been strange to liken the medical world to an industry, it was now being called an empire and subsequently, a type of market.

The development of medical markets is evident in the recent ways that “medical products, services, and treatments are promoted to consumers to improve their health, appearance, or well-being.” Thus, there was a supply side: the pharmaceutical companies, and a demand side: physicians and patients.

In other words, the public constitutes potential consumers who are shaped into a market, creating demand through direct-to-consumer advertising which ultimately does more harm than good by inducing self-labeling of problems as medical entities and encouraging mindless seeking of medical service.

An amalgam of factors contributed to this development, including the “development of managed care, corporatized medicine, and the rise of the biotechnology industry” (Conrad and Leiter, 2004). It is here, in the analysis of medical markets that the discrepancy between the theory of medical markets and its success in practice is brought to light.

The medical market is defined as a theoretical anomaly. This is due to medical markets being incapable of meeting the classic elements of a competitive marketplace. A free market allows consumers to have bargaining power, free choice about buying, and the ability to discern differences in quality of their options, as well as being informed of their options in the first place (Conrad and Leiter, 2004).

Similarly, the theory behind medicalization, which is a pervasive sociological issue in and of itself, was meant to increase the information given to patients, and has succeeded to a certain extent. Patients have increased advocacy and accountability in recognizing their illnesses and addressing them by asking for certain prescriptions to treat illnesses, whether by researching their problems, or seeing advertisements created for them.

Furthermore, pharmaceutical companies–colloquially coined as Big Pharma, perhaps as a subliminal hint at their “Big Brother” approach to the medical industry–claim that “direct-to-consumer advertising has an educational function that creates better informed consumers, encouraging consumers to consult their physicians about underdiagnosed symptoms and treatment options, and enabling patients to make better choices” (Conrad and Leiter, 2004).

Moreover, the definition of medical problems was meant to be expanded, where previously non-medical problems would be objectively considered as new illnesses worth researching and treating. This would serve a dual function: the stigma and ostracism patients may have felt from having a non-recognized medical problem would be alleviated as patients had proof that their illnesses were backed by expert opinion and could be treated using biomedical drugs (Ireland, 2009).

Secondly, the medical-industrial complex was ensured to survive as money was (and is) being poured in for research and the development of drug therapies for each new and defined illness. Thus, the theory behind the medical-industrial complex and its goals of increasing patient advocacy and expanding the definitions of medical issues has been somewhat successful in practice.

However, unlike free markets, the medical market is plagued by an “asymmetry of information and uncertainty in the definition, recognition, and diagnosis of disease states,” with both patients and doctors uncertain of their role in the large medical-industrial complex (Conrad and Leiter, 2004). All that these doctors know are that they are encouraged to support research and Big Pharma by advocating their products while patients are told to dutifully trust in their doctors.

One may ask, why are these physicians and ultimately, patients enabling further medicalization despite their uncertainty in the system? While patients have certainly become more knowledgeable, demanding, and critical of medical care, the medical field still remains extremely trustworthy. With each year, less emphasis is placed on religion and more faith resides in rationality and science, as well as the humanitarian trend sweeping western societies (Conrad and Leiter, 2004).

Consequently, the medical profession has an increased power and prestige as well as a cultural authority that ultimately sways patients to trust in it. By way of this professional dominance, corporations and insurers, which are significant determinants in medicalization, are able to influence physicians and through them, patients.

In practice, a patient-centered perspective has certainly led to more patient advocacy. Patients are now seen as active agents in their treatment rather than as “passive and obedient recipients of medical instructions” (Conrad, 1985). More and more, patients are evaluating doctors’ actions and any prescribed drugs in comparison to what they know and believe about illness and medication. However, sociological research asserts that the doctor-patient interaction comes down to the doctor controlling the flow and topics exchanged.

In fact, the medical interview conducted between doctor and patient is more of a “socially structured speech exchange system, organized hierarchically into phases and sequentially into provider- initiated questions, patient responses, and an optional comment by the physician” (Anspach, 1988). Thus, it may just seem like there is a more efficient communication between doctor and patient with the advent of medicalization. Supposedly, patients can better communicate their needs and doctors can more efficiently define and treat their problems in the context of drug therapy.

However, given the structure of medical interviews, doctors seem to be creating a more detached care, with sociological research pointing to a more “blunted capacity to care and a deeply dehumanizing orientation to patients which blames them for their illness, views them as potential learning material, and jeopardizes their care” (Anspach, 1988).

It comes down to a somewhat cultural barrier, where doctors are no longer able to relate to their patient and sociologically, this manifests itself into an assimilation process where patients are forced to oblige by the system doctors create and doctors in turn, must fit into the medical-industrial complex’s system.

Although doctors are made out to be at fault in this given scenario, it could be the pressure physicians feel from the medical-industrial complex that makes them exercise such dehumanizing social control.

One of the earliest uses of the term “medicalization” and the concept of medicalization being used as social control was by philosopher Ivan Illich in “Limits to medicine: Medical nemesis” in 1975. He argued that “the medical profession actually harms people in a process known as iatrogenesis, where there is an increase in illness and social problems as a result of medical intervention” (Biley, 2010).

He contended that the general public can be made docile and reliant on the medical profession to help them cope with their life. This was achieved through Western medicine’s notions of issues of healing, aging, and dying as medical illnesses, which was “medicalyzing” human life and rendering “individuals and societies less able to deal with these ‘natural’ processes’” (Biley, 2010). It follow that ultimately, the authority of certain social institutions, such as the medical-industrial complex, rather that the objectivism of nature, is what begins to determine what is truly defined as disease or health (Ireland, 2009).

In practice, medicalization seems to not ease patients’ access to healthcare, but instead intrude upon the experience of everyday life. Ironically, unlike the aforementioned benefits to the theoretical application of medicalization, the labeling of illness may actually create a stigma to the individual being labeled, which further increases the individual’s experience of life as “sick” or “disordered.”

For example, what used to be shyness has now been recently categorized under disorders such as “avoidant personality disorder,” which is a label capable of negatively affecting one’s self-perception (Ireland, 2009). The sociological transition of such social problems becoming public problems and publicly defined has certainly led to a narrowing of what is deemed normal in society (Conrad and Leiter, 2004).

Another “in-practice” criticism aimed at the medical-industry complex is its main goal of increasing profit in the drug industry. Indeed, research shows that “with the appearance of new diseases come new drugs as well, and thus a more profitable market for drug companies” (Biley, 2010).  This is due in part to the Federal Drug Administration Modernization Act of 1997 where biotech and pharmaceutical companies can now advertise with more freedom and appeal to patients, parading their agenda to be one of increasing patients’ medical knowledge but in reality, aiming to increase profit (Conrad and Leiter, 2004).

The pervasiveness of the medical-industrial complex is due to its multi-functional approach. As discussed, there are many key players that keep the complex intact but it is where the complex is positioned in society that determines its survival and success: between healthcare and business.

Two of the most prestigious and successful fields, healthcare and business–in the form of Big Pharma and insurance agencies–merged together creates the ultimate elixir for reaching doctors in the workplace with business in mind, and advertising to patients, with healthcare in mind. Obviously, the complex’s agenda is not so single-minded and always involves a mix of business with healthcare.

For instance, there is the recent trend of standardizing services into product lines like offering payment plans with cosmetic surgery (Conrad and Leiter, 2004). On any account, maneuvering the medical-industrial complex would take a large restructuring of the healthcare system and given its influence on two powerful social spheres, such an upheaval would be colossal.

The complexity of our healthcare system does not overwhelm just the average layperson, but the “most sapient amongst our ranks” are rendered “infirm of purpose to effectively impact the healthcare reform debate at hand” (Mills, 2012). The sociological issue of inequality becomes extremely pervasive as the medical-industrial complex, and oftentimes doctors, are so financially far removed from patients that an asymmetry of knowledge, background, and interests only hinders the reformation of the healthcare system.

Such reform should start during medical school, with to-be physicians trained to navigate the business sector they will unwittingly work within. Given the current absence of such training, where doctors are taught that “medicine is not a business,” it is no wonder that physicians are unknowingly swept up in the medical-industrial complex and left to manage by imparting their medicalization-tainted recommendations unto their trusting patients (Mills, 2012). As long as profit remains the main agenda of the medical-industrial complex, innovation, creativity, and research may diminish in importance and will be selected against because they cost money.

America’s position as a leader in biotechnology only puts more pressure on the complex to create profit at the sake of marginalizing physicians and their patients as tools to manipulate for its agenda. How are physicians and patients going to objectively evaluate new treatments when they are bombarded with “lush advertisements from companies with obvious vested interests, and authoritative testimonials from biased investigators who presumably believe in their own work to the point of straining credulity and denying common sense” (Glatstein and Stevens, 1996)?

I believe any improvement upon the healthcare system should work on better educating physicians and patients about the business side of healthcare. When one is overwhelmed, it is easy to be swayed by outside influences, which is exactly what happens when the psychologically-overwhelming advertisements of the medical-industrial complex grab hold of their target audiences.

Doctors and patients must realize that the medical-industrial complex has profit in mind and not healthcare, shown by many examples and further proven by the fact that in order to increase profits, new medical equipment, which is in a period of stasis, will be “exploiting issues of convenience, efficiency, and increased throughput (translate: economic improvement, not biological superiority)” (Glatstein and Stevens, 1996).

In other words, the machines we have now are fully capable of screening for certain illnesses and yet, due to their economic benefits, useless improvements will be made where money could be going elsewhere. Once doctors and patients–these mere “cogs of the machine”–become more critical and knowledgeable about the system, the medical-industrial complex will be hard pressed to brainwash its audience into submission.

It would be difficult to require all patients to undergo business classes but educating doctors while in medical school and incorporating such knowledge in their interactions with patients would be a first step. Although the doctor-patient interaction has its own flaws, at least physicians could impact their patients and exert positive social control.

Where before physicians were discouraged from getting involved in the business of medicine, sidelining their ability to impact the pressing issues of patients’ access to care, the escalation of costs, and true patient advocacy in terms understanding the industrial side of medicine, they would now be able to make a difference.


Anspach, R. R. 1988. “Notes on the Sociology of Medical Discourse:

The Language of Case Presentation.” Journal of Health and Social Behavior 29: 357-37.

Biley, F.C. 2010.  “The ‘Sickening’ Search for Health: Ivan Illich’s revised thoughts on

the medicalization of life and medical iatrogenesis.” Holistic Healing Publications 10(2).

Conrad, P. 1985. “The Meaning of Medications: Another Look at Compliance.” Sot. Sci.

         Med. 20(1):29-37.

Conrad, P. and Leiter, V. 2004. “Medicalization, Markets and Consumers.” Journal of

        Health and Social Behavior 45:158-176.

Glatstein, E. and Stevens, C.W. 1996. “Beware the Medical-Industrial Complex.”

       Oncologist 1(4): IV-V.

Ireland, Corydon. “Scholars Discuss ‘medicalization’ of Formerly Normal

Characteristics.” Harvard Gazette 28 Apr. 2009. Print.

Mills, M. R. 2012. The Medical Industrial Complex: Understanding the Business of

Medicine. Maricopa County Medical Society. Retrieved May 5, 2013.    




Sonia Lipov

My purpose for the blog is to create awareness, in all its forms. I approach all topics with humor but don't let it detract from the essence. I hope that you read or watch each post and take a moment to ponder its meaning. And if you want to engage in conversation, I am SO there.

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