An American Sickness: How Healthcare Became Big Business and How You Can Take It Back

by Elisabeth Rosenthal

In 2014 a luxurious three-bedroom, 2,600-square-foot condominium at the Ayer Building in downtown Philadelphia was put up for sale for just under $2 million. The owner of this property was the foundation of the American Board of Internal Medicine (ABIM), an offshoot of the nonprofit back-office group whose official task is certifying medical doctors. In 1998 the American Board of Internal Medicine declared $17 million in revenue. By 2015 its revenues had increased to $58 million, almost all of it earned by testing and certifying physicians. Each year, a hefty chunk of that revenue was passed on to its affiliate, the ABIM Foundation (the condo’s owner), a nonprofit foundation that the nonprofit ABIM created around 2000 to promote “medical professionalism.” It has become common in the world of healthcare that nonprofit hospitals and medical societies set up secondary nonprofit foundations. These foundations sometimes do good works: the ABIM Foundation initiated a campaign called “Choosing Wisely” to encourage doctors to be more judicious in their use of expensive and unneeded medical interventions. But they often seem like outposts for vanity projects or just places to keep cash. The officers of the ABIM and the officers of its foundation were the same, and received salaries from both organizations. The exact details of how the money is earned and spent are opaque, said Charles Kroll, a forensic accountant who investigated the links, because the two Philadelphia-based nonpro...