Health Care Sector Shareholder Payouts Up 300% Over 20 Years: Study

Shareholder payouts among large, publicly traded health care companies increased more than threefold between 2001 and 2022, according to a new research letter published in JAMA Internal Medicine.

"Shareholder payouts have critical implications for shareholders, especially patients," wrote lead author Victor Roy, MD, PhD, assistant professor of Family Medicine and Community Health at the University of Pennsylvania, who was a National Clinician Scholar at Yale at the time of the study's completion. "Increasing capital distributions to shareholders of publicly traded companies may be associated with higher prices and may not be reinvested in improving access, delivery, or research and development."

The Yale team examined data from Refinitiv Workspace on all health care companies listed on the S&P 500 for at least 1 quarter between December 1, 2001 and December 31, 2002. Researchers say over that span, the average number of health care companies on the S&P 500 increased from 30 to 60 per given year. Shareholder payouts increased 315%, from $54 billion in 2001 to $170.2 billion in 2022, with 19 (of 92) companies accounting for 80.4% of payouts. On average, S&P 500 companies in the health care sector allocated 95% of net income to shareholder payouts.

"This is a study that 'follows the money,'" said Cary Gross, MD, professor of medicine at Yale School of Medicine (YSM) and senior author of the study. "There has been a great deal of concern about the 'privatization' of the healthcare system, with for-profit companies taking on a larger and larger role. An important question is where does the money that flows through the healthcare system, and to these for-profit companies, go?"

Other study authors included Victor Amana and Joseph S. Ross.