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What Happens to American Healthcare After November?

What Happens to American Healthcare After November?

While Trump’s platform is a serious threat, Harris’s remains uncertain.

By Adam Gaffney, M.D., M.P.H.
The Nation, July 31, 2024

President Biden’s exit from the Democratic ticket and Vice President Kamala Harris’s emergence as the presumptive nominee has, perhaps, escalated the stakes of the November election for healthcare. Trump’s schemes are, of course, unchanged: A unified Republican government could shred the nation’s healthcare safety net, accelerate the (ongoing) privatization of Medicare, and further restrict or even ban abortion nationwide. In contrast, like a second Biden administration would have, a Harris administration might mostly mean continuity—allowing her to consolidate some real gains (like Biden’s landmark Medicare drug negotiation reform) without confronting the broader injustices and galloping corporatization of US healthcare. But in some quarters, hopes are rising that a Harris administration could go a step beyond Biden—and even open the door to a progressive shift on health policy.

Harris has been to Biden’s left on abortion, supporting a measure in 2019 that would have gone beyond Roe by curtailing state-level abortion restrictions; she is also the first vice president to visit an abortion provider. As a California senator, she endorsed Senator Bernie Sanders’s landmark 2017 Medicare for All bill, a far more expansive reform than anything Biden has put his name on. Yet Harris backtracked on Medicare for All, and the political pressure her administration would face in any major reform effort from both right and center would be daunting, particularly without a powerful grassroots movement pushing the cause, once again, to center stage. Such a mobilization is precisely what we need regardless of the election’s outcome—to advance progressive reform if possible and to fight calamitous policies if necessary.

Forecasting the impact of a second Trump administration requires distinguishing his rhetoric from the reality of his rule. Recall that in the 2016 presidential primary, Trump ran on vaguely popularist promises to protect public health insurance programs, while maligning Obamacare and promising to replace it with something better. “They’re gonna cut Social Security, they’re gonna cut Medicare, they’re gonna cut Medicaid,” Trump said of his Republican primary competitors in 2015. “I’m the one saying that’s saying I’m not gonna do that!” He also famously accused pharmaceutical companies of “getting away with murder” in how they priced their products, causing pharma stocks to briefly tumble.

Given the popularity of Medicare and Social Security even among Republican voters, such claims may well have helped pave the road to the White House for Trump. But as we know, once in office, he governed as a hardened healthcare right-winger, joining congressional Republicans’ nearly successful campaign to dismember Medicaid and dismantle preexisting conditions protections. Even after the Obamacare repeal effort failed, Trump’s budgets continued to call for devastating Medicaid cuts.

A second Trump administration could well give us something of a rerun. As in the past, Trump continues to deride Obamacare, but his platform’s healthcare provisions are reminiscent of his prior popularist claims. “FIGHT FOR AND PROTECT SOCIAL SECURITY AND MEDICARE WITH NO CUTS,” it promises, along with nebulous words about competition and transparency and some virulent threats to “protect” Medicare from immigrants. But if history is any guide, once in office, Trump will again serve as a right-wing standard-bearer on healthcare. Indeed, though he has distanced himself from the Heritage Foundation’s Project 2025 blueprint, his administration’s actions seem more likely to be guided by this conservative wish list—whose contributors include numerous members of his last administration, including six cabinet secretaries—than by his hazy populism. The document calls for sweeping conservative change, including gutting cuts to Medicaid via block grants and lifetime caps on benefits (i.e., kicking people out of the program even if they remain poor) “to disincentivize permanent dependence.” The Center for American Progress estimated that as many as 18.6 million enrollees could be at risk of losing coverage if the latter provision were to become reality. Project 2025 also proposes making privatized Medicare Advantage the “default enrollment option” for seniors, which would no doubt be the death knell for public Medicare.

Yet if Trump’s designs seem plain as day, the meaning of a Harris administration for healthcare seems underdetermined. “We believe in a future…where every person has affordable health care,” Harris said at a recent speech, without further details. The party’s platform has yet to be released, and Harris’s prior stances on healthcare issues have varied significantly. Her aforementioned cosponsorship of Sanders’s 2017 Medicare for All bill was no small thing; the senator’s last single-payer bill prior to the 2017 bill was launched with precisely zero cosponsors. But the progressive energies unleashed by his campaign, years of single-payer activism, and the galvanizing effect of Trump’s ascent to the White House (along with his attack on Obamacare) brought not just Harris but a historic 16 senators on board for the 2017 bill. (Similarly, Representative Pramila Jayapal’s 2019 Medicare for All bill, reintroduced last year, was ultimately cosponsored by two-thirds of House Democrats.) Yet, after endorsing Sanders’s bill, Harris backtracked, putting out her own plan that would give insurance companies a major role in providing universal coverage—an approach many of us criticized at the time for its accommodation of corporate interests. On Wednesday, a Harris spokesperson told NBC News that “The VP will not push single payer as President.”

Those years were something of a high watermark for M4A: The arrival of the Covid pandemic and the end of the Democratic primaries saw the issue’s prominence fade. But as we look ahead to the November election, it’s critical to realize that the dynamics that drove it to the forefront of the national political discussion are no less pressing today. A Trump administration would cruelly degrade healthcare coverage for the sick and working class, while accelerating the corporate corruption of care. Yet, even without such a regressive shift, US healthcare remains deeply inequitable and under siege from corporate power: The number of uninsured fell during the pandemic but is predicted to rise 32.8 million by 2032; one in four adults go without needed medical care, and one in five without a prescription drug, because they cannot afford it; private equity firms are strip-mining the nation’s hospitals; private insurance companies are gobbling up Medicare; and vertically integrated insurer-pharmacy-provider behemoths like UnitedHealth are increasingly subordinating the healing mission of medicine to their corporate bottom lines.

Harris is no doubt aware of these issues: As attorney general of California, she helped block a merger between two massive insurance giants, and, though she backtracked, her endorsement of Medicare for All demonstrated that she was responsive to the progressive constituencies that mobilized behind it. A Trump victory, make no mistake, would be a deadly disaster for our nation’s health—and something we must be prepared to fight. But it is important to be clear-eyed about a Harris victory: It will be an opening if and only if a progressive grassroots movement is able, once again, to put real universal healthcare back on center stage.

Dr. Adam Gaffney is a critical care physician and an assistant professor at Harvard Medical School, and past president of Physicians for a National Health Program.

https://thenation.com…

The experiment of Medicare privatization has failed

For its 59th birthday this year, let’s protect Medicare from the corporate raiders

By Priya Pal, M.D., Ph.D.
Missouri Independent, July 30, 2024

It may seem like it’s always been a part of America, but Tuesday is Medicare’s 59th birthday. We should pause, celebrate its success and commit to stopping the corporations who are pilfering it for their own profits.

Health care in the United States remains unaffordable and inaccessible despite costing Americans $4.7 trillion a year.  Medical costs are the leading cause of personal bankruptcy for Americans, and the problem is even more dire among seniors.

Those older than age 55 represent 31% of our country but account for 55% of health care spending. When Medicare was signed into law 59 years ago in Independence, it offered the hope that our population’s elderly and disabled could access health care and age with dignity. It’s lived up to that promise for generations now.

The attack on Medicare began in the 1970s with a proposal to turn the nation’s best public health program over to profit-centric corporations and privatize Medicare. The false premise was that the free market would create competition that could drive down health care costs and turn a profit for the investment community.

That strategy works in many parts of the economy, but not in health care.

Health care by nature cannot be a free market good. It isn’t like purchasing a cell phone where you can identify prices, compare specs of different models, read reviews and ultimately choose to walk away if you don’t like the options. Patients don’t wake up in the morning and choose to take medications because they want to, but because they need to.

Health care emergencies like heart attacks and strokes don’t afford patients or their families the luxury to price shop, compare facilities or reviews. Health care can only turn a profit at the expense of quality care. This is exactly what so-called Medicare Advantage (“MA”) plans have demonstrated every year since their creation in 2003.

MA corporations restrict access to care through small networks, ghost networks, limited out of network coverage, and referral requirements for specialty care — none of which exist in Traditional Medicare.

MA plans typically refuse access to more than half of the physicians in a community, sometimes excluding up to 70% of providers, and cover only half of hospitals in a county. Because these plans force patients with many types of cancer to delay their care and block them from going to “Centers of Excellence”, these critically ill patients are more likely to die after their cancer surgery than similar patients in traditional Medicare.

No one warns patients about these barriers to care, and in fact MA plans grossly mislead people about what they cover. MA network directories frequently include providers who are retired, deceased or simply don’t exist. These limitations are even worse for those living in rural areas where access is already limited.

Even when patients go to in-network providers, they are then faced with prior authorizations and claims denials that further delay access to care.

In 2018 the Office of Inspector General (OIG) published a report showing 75% of appealed claims denied by MA plans were overturned on first repeal. Analysis by KFF found that in 2021, 82% of appealed denials were approved. These high successful repeal rates suggest that many of the denials should have never happened in the first place.

Unfortunately, the appeals system for claims denials is so convoluted that only 1-6% of claims are ever attempted to be appealed, allowing companies to reap massive profits just by denying care. These coverage restrictions have also extended to physician administered medications; in reviewing the 20 most commonly prescribed medications between 12-17 of 20 had access restricted with prior authorizations in 2018.

By 2020, CVS/Aetna and Humana only retained four of the 20 most commonly used physician administered medications on their formularies, Kaiser covered 6 and United Healthcare covered only 2.

One of the shiny selling points for an MA plan over traditional Medicare plans is the inclusion of vision, hearing and dental benefits that aren’t part of traditional Medicare, but on closer look most of these plans have dollar limits that result in thousands of dollars in out-of-pocket costs, making it hard to see much true benefit.

With all the harms noted for MA plans over traditional Medicare plans, one might expect that if the plan were truly bad in a free market, patients would switch away from MA plans. Unfortunately, consumers don’t get a choice, since health care is not a true free-market commodity.

Those with higher health care needs do in fact switch out of MA plans at significant rates, but this option isn’t accessible to everyone. Protections against pre-existing conditions in pricing of Medigap policies only exist for the first 6-12 months in most states, including Missouri. Switching out of MA plans after the first year can be cost prohibitive, trapping patients in a vicious cycle of care delays and denials.

The experiment of privatization of Medicare is a failed one. In addition to the actual patient harms that have come from privatized Medicare, MA plans are inefficient, have high administrative burden and more costly to taxpayers. The government pays more per person in MA plans than in TM plans, at a conservative estimate of 140 billion dollars a year in excess payments.

If that money instead went towards improving traditional Medicare, we could eliminate the need for people in traditional Medicare to purchase Medigap (a $5,000 out-of-pocket maximum would cost $39 billion); we could include hearing, dental, vision for everyone in Medicare and Medicaid ($84 billion), or free people from having to pay a premium for Medicare Part B ($131 billion).

For its 59th birthday this year, let’s protect Medicare from the corporate raiders, call for an end to the subsidies and make the best thing (Medicare) even better.

Dr. Priya Pal is an instructor within the Division of Infectious Diseases at Washington University School of Medicine.

https://missouriindependent.com…

To Win ‘Medicare for All,’ First Reclaim Medicare From Profiteers

If we want to build on the promise of Medicare, then we’re going to have to grapple directly with the power of corporate health insurance: That starts with taking on the so-called “Medicare Advantage” program.

By Ed Weisbart, M.D.
Common Dreams, July 30, 2024

Fifty-nine years ago today, President Lyndon Johnson signed Medicare into law—a high-water mark in the fight for universal healthcare that had started decades before and that continues to this day.

Ever since Medicare became law, it has been a shining example of what is possible in U.S. healthcare: a truly public, truly universal program that has saved countless lives and prevented untold financial ruin among America’s seniors. But alongside this success, corporate health interests have also grown immeasurably more powerful. Insurers like UnitedHealthcare and Blue Cross Blue Shield have erected cruel barriers to care and are laughing all the way to the bank.

If we want to build on the promise of Medicare—and win the best possible version of Medicare for All—then we’re going to have to grapple directly with the power of corporate health insurance. That starts with taking on the so-called “Medicare Advantage” program.

The Strategic Importance of Medicare Advantage

Single-payer advocates understand that there can’t be “Medicare for All” if there is no “Medicare.” And no, Medicare Advantage (MA) doesn’t count as Medicare. The health insurance corporations that run these plans have a business imperative to prioritize profits above all else; this is anathema to any public health program.

Physicians for a National Health Program (PNHP) has compiled overwhelming evidence that MA insurers are harming patients, physicians, and hospitals by delaying and denying care—harms that are virtually unseen in Traditional Medicare. Nor is this cruelty even a trade-off for lowering the cost of healthcare. In fact, these corporations are paid far more than what is spent for similar patients in Traditional Medicare—up to $140 billion per year, or as much as 35% above the funding levels of Traditional Medicare.

There is no road to Medicare for All that ignores this existential threat.

Thankfully, support for eliminating overpayments to MA extends far beyond those who are already committed to single payer. This fight builds our movement by mobilizing a wide range of people who understand, or can be educated about, the damage insurance companies are doing to patients. When we find common ground, we should walk together.

For that reason, PNHP is exposing MA overpayments and demanding a more fiscally responsible approach from policymakers. We are working closely with several organizations to change the national conversation and provide a badly needed counterweight to the lobbying might of big insurance.

When MA was created, way back in 2003, corporate insurers promised to reduce the cost of healthcare by improving care coordination and health outcomes. A healthier population, they claimed, would be less expensive. We should demand that MA corporations live up to these lofty promises without billions of dollars in overpayments.

We’d like to see them try.

Improved Medicare … for ALL

Winning back $140 billion in annual overpayments begs a tantalizing question: How can we use those funds to improve Medicare for all seniors?

Instead of the paltry benefits that MA plans offer, those funds would help us add robust hearing, vision, and dental benefits; totally eliminate Medicare Part B premiums; and fold in the Medicare Part D prescription drug benefit. Imagine the relief a senior on Medicare Advantage would feel when enrolling in a plan that actually covers the full range of dental care, while also freeing themselves from the narrow provider networks and prior authorization requirements imposed by MA plans.

Most critically, we need to establish a low out-of-pocket maximum for Medicare. Insurance corporations lure seniors and people with disabilities into the MA trap by selling lower up-front costs while hiding substantial barriers to care. It’s a classic bait and switch. Eliminating the need to purchase Medigap would level the playing field and allow everybody to remain in Traditional Medicare.

Well, not everybody—but that’s our ultimate goal. PNHP advocates for a national single-payer health insurance program, and what better way to get there than through an improved version of the already popular Medicare program?

Where we see middlemen standing between patients and the care they need, we should remove them. Where we see limited provider networks, we should expand them. Where we see piles of pre-authorization paperwork, we should shred them.

We should also expand benefits to include all medically necessary care, and ultimately eliminate out-of-pocket costs that deter people from seeing a doctor. Once these improvements are in place, we will have a program that’s truly worthy of the name Medicare for All.

The advocacy work for these priorities—ending MA overpayments, improving Traditional Medicare, and realizing our vision for single payer—overlap and build on one another.

Let’s work to build a movement of seniors, physicians, students, people with disabilities, and everybody else who cares about Medicare. Together, we can take on the corporate insurers that are wreaking so much havoc in our lives and lay the groundwork for winning a single-payer program that brings everybody in and leaves nobody out.

Dr. Ed Weisbart is a retired family physician in Missouri and board secretary of Physicians for a National Health Program.

https://commondreams.org…

Not-for-Profit Care Begets Profits

In our profit-permeated health care system, even charitable care often covers for raking in massive profits and exorbitant CEO salaries.

Why Many Nonprofit (wink, wink) Hospitals Are Rolling in Money, The Washington Post, July 22, 2024, by Elisabeth Rosenthal

One owns a for-profit insurer, a venture capital company, and for-profit hospitals in Italy and Kazakhstan; it has just acquired its fourth for-profit hospital in Ireland. Another owns one of the largest for-profit hospitals in London, is partnering to build a massive training facility for a professional basketball team, and has launched and financed 80 for-profit start-ups. Another partners with a wellness spa where rooms cost $4,000 a night and co-invests with “leading private equity firms.”

Do these sound like charities?

These diversified businesses are, in fact, some of the country’s largest nonprofit hospital systems. And they have somehow managed to keep myriad for-profit enterprises under their nonprofit umbrella — a status that means they pay little or no taxes, float bonds at preferred rates and gain numerous other financial advantages. Through legal maneuvering, regulatory neglect and a large dollop of lobbying, they have remained tax-exempt charities.

To be sure, many hospitals’ major source of income is still likely to be pricey patient care. Because they are nonprofit and therefore by definition can’t show that thing called “profit,” excess earnings are called “operating surpluses.”

The truth is that a number of not-for-profit hospitals have become wealthy diversified business organizations. Seven of the ten most highly paid nonprofit CEOs in the United States run hospitals and are paid millions, sometimes tens of millions, of dollars annually.

Today’s big hospital systems do miraculous, lifesaving stuff, but they are not channeling Mother Teresa.

A California Medical Group Treats Only Homeless Patients – And Makes Money Doing It, KFF Health News, July 19, 2024, by Angela Hart

“The biggest population of homeless people in this country is here in Southern California,” said Sachin Jain, CEO of SCAN Group, a Medicare Advantage insurance plan. Jain’s organization created Healthcare in Action, a medical group that sends practitioners into California’s streets solely to care for homeless people.

Street medicine in most of the country is practiced as a charitable endeavor. “It’s really innovative and entrepreneurial to take all this energy and grit to try and improve things for a population that is too often ignored,” said Mark Duggan, a professor of economics at Stanford University. “Financial incentives matter massively in health care. It’s everything.”

Healthcare in Action and SCAN’s Medicare Advantage generate revenue in multiple ways: billions of dollars in Medicaid money, charitable donations from some hospitals and insurers, partnering with cities and hospitals to provide services, and enrolling low-income, older people in SCAN’s Medicaid and Medicare programs.

Jim Withers, who coined the term “street medicine,” cautioned against a model with financial motives. “I do worry about the corporatization of street medicine and capitalism invading what we’ve been building, largely as a social justice mission outside of the traditional health care system. But nobody owns the streets, and we have to figure out how to play nice together.”

Comment:

By Don McCanne, M.D.

One of the beauties of a well-designed single payer system is that everyone can receive the health care that they need, and it is automatically paid for through an equitable financing pool that is affordable for everyone.

Sadly, even though we have the most expensive healthcare system, many are not adequately covered and are dependent on charitable sources, whether or not the government is a source of that charity. Even though we could have fixed that through adoption of single payer, we did not.

Instead, we allow business interests to divert even more of our healthcare dollars to their own interests. Examples above of so-called charity care include allowing nominally non-profit hospitals to divert public health care dollars to profit-making ventures, fattening their coffers & salaries … or converting the social justice mission of street medicine into a business opportunity to divert public funds to passive investors.

Rather than avoiding “channeling Mother Teresa,” we can “play nice together” by advocating for the establishment of a single payer system which would provide comprehensive, affordable health care for all of us. What is stopping us?

https://healthjusticemonitor.org…

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How UnitedHealth harnesses its physician empire to squeeze profits out of patients

Investigation: Health Care’s Colossus

By Bob Herman, Tara Bannow, Casey Ross, and Lizzy Lawrence
STAT News, July 25, 2024

UnitedHealth Group started out as a small, Minnesota health insurance company and has since morphed into a modern-day Standard Oil, exerting unmatched dominance over health care in the United States.

It’s no secret that UnitedHealth is a colossus: It’s the country’s largest health insurer and the fourth-largest company of any type by revenue, just behind Apple. And thanks to a series of stealthy deals, almost 1 in 10 U.S. doctors — some 90,000 clinicians — now either work for UnitedHealth or are under its influence, more than any major clinic chain or hospital system.

But behind those statistics, there’s a lot UnitedHealth doesn’t want you to know. A STAT investigation reveals the untold story of how the company has gobbled up multiple pieces of the health care industry and exploited its growing power to milk the system for profit. UnitedHealth’s tactics have transformed medicine in communities across the country into an assembly line that treats millions of patients as products to be monetized.

Central to these tactics is UnitedHealth’s unrivaled leverage over physicians, whose diagnoses help determine how much private insurers get paid for covering older adults. Dozens of former doctors and employees at UnitedHealth medical practices told STAT how they became enmeshed in UnitedHealth’s strategy to make their patients seem as sick as possible. Doctors said the company had a fixation with medical coding to generate more revenue — encouraging clinicians through bonuses and performance reviews to identify more health problems in patients, even if those conditions seemed dubious.

By controlling doctors, UnitedHealth can lean on them to practice in ways that benefit the insurer, and use its insurance arm to funnel cash back to its clinicians — similar to how Standard Oil amassed power as both the buyer and seller in oil refining. Through these efforts, and by adeptly navigating the Medicare Advantage payment system, UnitedHealth has squeezed potentially tens of billions of extra dollars from taxpayers over the past decade, according to STAT estimations based on federal data. The relationship between UnitedHealth’s insurance company and physician practices is the focus of an ongoing Department of Justice antitrust probe.

Doctors interviewed by STAT said they were initially seduced by the company’s sales pitch that it would be hands-off and help them provide high-quality care, but they quickly became disillusioned. UnitedHealth has required some physicians to see as many as four patients per hour, a difficult task if any of those patients are new to a clinic, they said. Patients, meanwhile, are wondering why their doctors are rushing through their appointments — if they can get seen at all — and have expressed alarm when concerning diagnoses pop up in their medical records, many of which were never mentioned by their physicians.

Susan Baumgaertel experienced the shift firsthand. She is an internal medicine physician who spent 25 years — almost her entire career — at The Polyclinic, a large multispecialty group in Seattle. After UnitedHealth took over in 2018, Baumgaertel said the company pressured her and her colleagues to code patients for certain conditions, including some that the doctors didn’t think applied. She quit in 2021.

“We were not truly caring for patients anymore,” Baumgaertel said. “We were just micromanaging their care to bring in money. It just felt so unconscionable.”

She’s become an unofficial therapist for dozens of her colleagues who still work at UnitedHealth practices, dispensing advice and words of comfort over hours-long walks or coffee dates. Recently, Baumgaertel was on the phone with another physician who worked at a UnitedHealth-owned clinic at the time, and had just pulled up in front of her house.

“She was crying in her car. She said, ‘Susan, I can’t leave. I’m the breadwinner. I have to have insurance. My husband is a stay-at-home dad,’” Baumgaertel recalled. She could hear her friend’s kids knocking on the car window. “She felt trapped. I hear this over and over again.”

STAT’s reporting is based on interviews with more than two dozen current and former UnitedHealth doctors and executives conducted over the past six months. STAT also spoke with health policy experts and patients, examined court records, and read UnitedHealth’s 600-page medical coding bible. Many of the UnitedHealth doctors and executives, and even some patients, asked for anonymity — expressing concerns the company could take them to court, derail their careers, or alter their care.

Accounts from clinicians like Baumgaertel challenge UnitedHealth’s stated rationale for its increasing control over health care. The company says owning medical groups, while also being the insurer, will allow for better preventive care that is “value-based.” Why wait for people to show up in the emergency room with serious, costly issues when you can keep an eye on them in the clinic and intervene earlier?

UnitedHealth declined to make executives available for interviews and did not answer a detailed list of questions. In a statement to STAT, spokesperson Eric Hausman said the company’s “providers and partners make independent clinical decisions, and we expect them to diagnose and document patient information completely and accurately in compliance with [federal] guidelines. We provide training and other practice support to providers because it leads to better care management, coordination, and patient follow-up. Regulators routinely audit this documentation.”

From the start, the takeover of physician practices by the nation’s largest health care company has been carefully choreographed.

UnitedHealth’s leadership team is filled with people who have stayed at the company a long time, and have enriched themselves by doing so. Those executives have leveraged a system that has put patients’ medical charts at the center of how companies get paid. They have lobbied the government over policies that further entrench UnitedHealth’s market power. Several executives have held powerful federal health care positions of their own. And they have capitalized on the government nudging more older adults to enroll in privatized Medicare Advantage plans. UnitedHealth’s clinics and outpatient centers now provide care for about 103 million Americans, according to the company’s own estimates.

In 2007, at a Wall Street conference in a posh midtown Manhattan hotel, UnitedHealth’s then-CEO Stephen Hemsley telegraphed that UnitedHealth — already a rapidly expanding health care company — saw itself as much more than just an insurer. “I would ask you to begin to think about UnitedHealth Group and the construct of its business, its capabilities, its reach in the marketplace, as a health care system unto itself,” he said.

That same year, UnitedHealth struck a deal for an insurance company that owned Southwest Medical Associates, a group of clinics located throughout Nevada — the company’s first large medical group. This happened as the health care industry was on the cusp of its biggest transformation since the advent of Medicare nearly five decades earlier — changes that would ultimately reinforce UnitedHealth’s new direction and spur it to double down on doctors.

The Affordable Care Act, which President Barack Obama signed into law in 2010, limited the amount of profit insurers could make on health insurance. That encouraged many insurers to branch into other lines of business where profit wasn’t capped — such as providing medical care. The law also sought to tweak how doctors and hospitals got paid by adding incentives for keeping patients healthy instead of just paying for every visit or procedure. That meant, of course, more collaboration between providers and insurers.

The result was consolidation across all corners of the industry: Insurers bought insurers. Hospitals bought hospitals. And doctors — many of them overwhelmed by new rules around documentation and using electronic health records — flocked to hospitals, private equity firms, and insurers that could handle the administrative burden. UnitedHealth’s Optum subsidiary was one of the biggest players in the feeding frenzy, bringing tens of thousands of doctors under its umbrella. Today, less than half of the country’s doctors work at physician-owned practices, according to the American Medical Association.

As for UnitedHealth, Hemsley, along with former Optum CEO Larry Renfro and several other top executives, positioned themselves as architects of the company’s physician empire. Hemsley still serves as UnitedHealth’s board chair and has his own investment firm. Renfro, who led Optum from its reorganization in 2011 until 2018, now works at UnitedHealth’s venture capital firm.

While UnitedHealth expanded in patient care, it also grew its dominance in Medicare Advantage, the alternative to traditional Medicare that is run by private insurers and now covers more than half of all Medicare beneficiaries. UnitedHealth has had the biggest slice of enrollment in the program for more than a decade, growing from 20% of Medicare Advantage enrollees in 2010 to almost 30% in 2023.

That simultaneous growth was no accident. Medicare Advantage insurers depend on clinicians to enter diagnosis codes into patients’ medical records. Those codes turn into risk scores that explain how sick the patient is and, in turn, how much money the government pays their insurer for their medical care.

Medicare Advantage insurers have gamed the system by excessively coding their members, resulting in massive overpayments to the companies. Overpayments based on coding alone are expected to total $50 billion this year, more than the Department of Justice’s entire budget, according to the Medicare Payment Advisory Commission, a group of experts that advises Congress on Medicare. Since 2007, MedPAC estimates Medicare Advantage insurers have reaped $217 billion in coding overpayments from the federal government.

As the country’s biggest Medicare Advantage insurer and its biggest physician group, nobody is better positioned to extract massive sums from the program than UnitedHealth. The company is still facing a federal lawsuit alleging it continued to collect government money based on millions of patient diagnoses it knew were incorrect. UnitedHealth has disputed the allegations and continues to contest them in court.

While UnitedHealth operates in a completely different industry than did Standard Oil, they have unmistakable similarities, starting with their ambitions to stealthily expand. When Standard Oil was acquiring competing oil refineries in the 1860s and 1870s, the conglomerate did so with little trace. Under its founder John D. Rockefeller, Standard Oil scooped up nearly all the refineries in the Cleveland area, but few newspapers were aware of the growing monopoly.

“It had all been accomplished in accordance with one of Mr. Rockefeller’s chief business principles — ‘Silence is golden,’” journalist Ida Tarbell wrote in “The History of the Standard Oil Company.”

UnitedHealth rarely announces its takeovers of physician clinics and outpatient centers. In part, that’s because the acquisitions are small compared with its overall size and therefore don’t have to be disclosed to financial regulators. It also has downplayed the number of physicians it controls through employment and other financial agreements.

Of UnitedHealth’s 90,000 physicians, 10,000 are employed, and the others are affiliated through “value-based care arrangements,” the company said. It’s unclear what the financial parameters of those affiliations are, and UnitedHealth declined to clarify. In a statement, UnitedHealth’s Hausman said, “The vast majority of the physicians we work with are independent and choose to work with us,” reiterating CEO Andrew Witty’s remarks to Congress.

But UnitedHealth has clearly targeted specific, important medical groups and outpatient surgery centers in markets where it also has the most Medicare Advantage enrollees. The company’s strategy goes like this: If UnitedHealth could get more of its insurance members to go to its own physicians, the company would get to pay itself with money that previously would have gone out the door.

“Controlling the physicians is incredibly lucrative for maximizing risk-coding payments. It’s hard to overstate just how lucrative this can be,” said Hayden Rooke-Ley, an Oregon-based attorney and senior fellow for health care at the American Economic Liberties Project. He has written about the risks of insurers owning physician groups. “This is the singular explanation for why insurance companies are getting into the business of care delivery, particularly of primary care.”

At the core of amassing its doctor empire was luring physicians. UnitedHealth quickly found the surest approach: Money, and a lot of it.

Some groups needed cash to invest in new electronic health records and other technology, or were facing financial distress. Physicians who bought into the idea of less wasteful care and more prevention opted to sell to UnitedHealth rather than to private equity or their local hospital systems. Plus, physicians nearing retirement were looking for a golden parachute, and UnitedHealth in some cases dangled huge sums of cash, according to multiple former physicians who sold practices to UnitedHealth and other employees.

“The doctors wanted the moolah, especially the older physicians,” said a former employee of a UnitedHealth clinic in the western U.S.

Six former UnitedHealth doctors said that when UnitedHealth took over medical groups, nothing would immediately change. But as the weeks and months passed, UnitedHealth would begin to overhaul their schedules: They were expected to see more patients, perform more physicals, and conduct more annual wellness visits. Some said they were required to see three or even four patients per hour.

In 2022, UnitedHealth acquired Atrius Health, then the largest independent doctor group in Massachusetts. Eleanor Hobbs, an urgent care physician, soon began dreading her shifts because her new corporate owner required her to see patients every 20 minutes. Previously, she saw a patient every 30 minutes. Hobbs, 76, had planned to work longer, but instead retired earlier this year.

“When I retired, my feeling was: I feel just like an Amazon warehouse worker, where all I’m doing is 20 minutes, 20 minutes, 20 minutes, 20 minutes,” Hobbs said. “Just do it. Don’t ask how the patient feels about it. Don’t ask what kind of a moral injury it feels like to me. It was awful.”

The pressure to treat patients as if they were fields of medical codes to be harvested, instead of people who have complex histories, soon followed. More than a dozen former doctors and employees from seven different practices nationwide described how UnitedHealth pushed its clinicians to document as many ailments as they could by offering bonuses or reviewing the performance of those who were not coding as much as their peers.

“If your numbers aren’t great, they meet with you individually. It just felt like at every avenue possible, you were reminded of it,” a former Polyclinic provider said.

Nine clinicians told STAT they were instructed to document conditions they didn’t believe applied. Six former UnitedHealth physicians said the shift has been most apparent since the Covid-19 pandemic, as they’ve been encouraged to catch up on coding after patients stayed at home instead of going in for routine checkups.

“It’s very frustrating to me as a physician to see something that was really intended to be a way to pay primary care doctors to do good, preventive risk assessment,” a physician formerly at UnitedHealth’s New West Physicians group in Colorado said of risk scores and coding. “And it’s turned into this coding vehicle where, ‘How do we drop as many codes as we can?’”

Potentially improper coding routinely came up in the same categories, such as peripheral vascular disease and chronic kidney disease, former UnitedHealth doctors said. One study from 2022, crafted by UnitedHealth’s own physician researchers, shows that UnitedHealth’s physicians coded Medicare Advantage patients as having lung disorders, vascular conditions, and kidney disease at more than two times the rate of those in the traditional Medicare program.

A separate review of provider data suggests the trend was broader than just UnitedHealth. It shows the rate of vascular disease testing and diagnosis across providers in a national dataset more than doubled between 2018 and 2023 among patients aged 50 and older. The analysis, based on electronic health record data and conducted by the health analytics company Truveta for STAT, also showed the rate of testing and diagnosis decreased in spring 2024, after Medicare eliminated a particularly lucrative code for patients with peripheral vascular disease without complications.

Part of the issue is the difference in the federal programs. Traditional Medicare pays doctors for each service they provide, while the government pays Medicare Advantage insurers based on how sick their members are, as determined by codes from doctors. Health policy experts say traditional Medicare undercounts older adults’ ailments. Coding and documentation also can be more of an art than a science at times, especially for complex patients who have a lot of medical problems. But within Medicare Advantage, conditions that can be open for interpretation can be exploited.

“There are probably a subset of diagnostic codes that are kind of squishy. They’re kind of subjective. They’re kind of game-able,” said Chris Pope, a senior fellow at the Manhattan Institute, a conservative think tank, who has studied Medicare Advantage coding.

Four doctors told STAT it was common to get panicked calls from patients. They wanted to know why their online medical charts said they had chronic kidney disease or vascular disease even though their doctors hadn’t mentioned it during their visits. When Baumgaertel got those calls, she said she always tried to tell patients the truth, as uncomfortable as it was: I don’t really think you have that condition, but I’m supposed to code you as having it so that I get paid more.

“It was almost to the point of being embarrassing,” she said. “These are people I’ve known for a long time, and they’re like, ‘Susan, what’s going on?’”

Doctors said that UnitedHealth medical directors and administrators pressured them to increase codes for a variety of different ailments, even if they thought those codes didn’t fit patients’ conditions. As one example, more than a half dozen clinicians said UnitedHealth used an unreliable device to screen nearly all of its Medicare Advantage patients for peripheral arterial disease as a way to boost vascular disease diagnoses.

Another example is chronic kidney disease. It’s normal for people’s kidney function to decline as they age, but five doctors said UnitedHealth pushed them to code for that condition even if they felt the patients’ diminished kidney function was appropriate for their age and unlikely to cause harm.

“The number of elderly patients I had who had legit panic episodes when they went to their chart and found out they had chronic kidney disease,” a former Polyclinic doctor said. “I’d have to have this whole conversation with them about like, ‘No, your kidney function is actually not that abnormal for your age, but because of this coding thing, blah blah blah.’ That was awful.”

Daniel Weiner, a nephrologist at Tufts Medical Center, said many older adults meet the technical definition of having chronic kidney disease based on tests that examine their kidney function. The problem is there’s a limited number of codes for chronic kidney disease that cover a large group of people.

“There are clearly financial reasons to code people with chronic kidney disease, as some of these patients have extremely complex medical issues, but others, with the same code, are far healthier,” he said.

Nick Jones, a primary care physician who joined Oregon Medical Group in Eugene just before UnitedHealth bought the practice, said the inaccurate code he saw most frequently in patients’ records was long-term management of insulin. In some cases, he said, this code was applied to patients who received insulin once to lower their blood sugar before a surgery, but who never needed the drug again.

Jones said he finally got fed up when the Oregon Medical Group’s electronic health record started making it mandatory that doctors attest to whether patients’ Medicare Advantage codes had been checked off before they could close out a visit. The system gave the option to deny the codes, but that was more labor-intensive because it required an explanation for why the codes were wrong, he said.

UnitedHealth would regularly host educational sessions where company representatives spent hours teaching Oregon Medical Group doctors how to code Medicare Advantage patients, Jones said. He found it frustrating because the sessions never covered new research into specific conditions or resources available for patients, like nutritionists or case managers.

“I don’t give a damn about what reimburses for what,” said Jones, who now runs a practice called Clear Health Direct Primary Care. “I’m just going to code what I addressed during that visit.”

Even surgeons were roped in, according to one who used to work at The Polyclinic.

“It just didn’t make a lot of sense for a surgeon to talk to patients about chronic illnesses that didn’t necessarily have a lot to do with their presenting complaint,” he said. “We’re not frankly specialized or qualified to do it.”

Nine doctors reported being rewarded with bonuses if they met UnitedHealth’s coding expectations. One former Polyclinic surgeon said it could be upwards of $30,000 per year. But if doctors didn’t comply, it affected their entire department, that surgeon said. UnitedHealth declined to respond to questions about whether it encouraged coding through bonuses and performance reviews, and whether it encouraged doctors to use specific codes that exaggerated patients’ conditions.

“So are you going to be the turd — sorry — are you going to be the doctor, who is not compliant and causing your partners to lose thousands of dollars? No. And ultimately, that’s what got me to be compliant,” the former Polyclinic surgeon said. Eventually, he and his colleagues left for a different medical group.

Top UnitedHealth executives have gushed to investors over the past 15 years that thoroughly documenting patients’ conditions is an untapped line of recurring revenue. UnitedHealth has become such an expert on the topic that it sells a coding bible to the medical community for $165.95. The 592-page book explains how the government’s payment system works and provides advice on how to “capture” more conditions.

The tips give a sense for how the company views coding and documentation: as a way to distill patients to a series of numbers and decimals that translate into big dollar figures. Coders are taught that every 0.1 in coding equates to $1,000, more or less, from the government per year.

Does a patient have diabetes? That adds 0.166 to the risk score, according to the government’s 2024 risk adjustment system, equating to $1,700 in annual Medicare payments. Congestive heart failure? That’s another 0.36 to the patient’s score, or $3,600. Severe obesity, cocaine use, Medicaid eligibility — all descriptors that lead to more money.

Some may assume Medicare Advantage insurers push for more documentation of these diagnoses because of a “desire to make a profit,” UnitedHealth’s 2024 coding guide reads. “This is a half-correct assumption,” the guide concedes, before saying coding also ensures companies get enough money from the government to cover care.

UnitedHealth’s guide emphasizes how coders should scour physicians’ notes to see if there are other illnesses that aren’t being captured. For example, it says doctors should mark down a patient’s cancer diagnosis when they come in for an unrelated issue like a high cholesterol reading if that patient’s records show they are actively seeing an oncologist and on cancer medication.

Richard Lieberman, a medical coding expert who helped develop the government’s risk adjustment system, said there is “far too much gaming of risk coding, but also of documentation.” Big companies like UnitedHealth have insulated themselves from more sweeping government investigations by justifying everything in medical charts, even if the diagnoses are wrong or based on flawed diagnostic tools, he said.

“It becomes sort of like a ‘Catch Me If You Can’ kind of scenario,” Lieberman said. “Only when you get audacious is your number often up.”

One doctor who used to work at UnitedHealth’s WellMed practice in Florida told STAT that managers set a troublesome expectation that risk scores could only go up, not down. UnitedHealth’s guide also explains how doctors and coders can “recapture” as many prior health conditions as possible. Things like fractures that have healed will fall off, but chronic conditions are expected to carry over. The assumption is that as people get older, they will have more diseases.

“There are a lot of targets that are just set to meet some obvious financial endpoint. They were unrealistic,” the former WellMed physician said. “People like me didn’t feel comfortable that these targets are the ones that we are getting our bonus based on, or people will even chase you and get you out of the company if you’re not producing like other physicians.”

UnitedHealth’s coding book attempts to help people determine if conditions are appropriately documented. All they have to do is remember this mnemonic device: treatment, assessment, monitor, plan, evaluation, and referral — or TAMPER.

Hundreds of people across the country have taken to Yelp and Google to gripe about longer waits for appointments and doctors quitting after UnitedHealth assumed control of their clinics. It became tough to get a real person on the phone, even after waiting for hours on hold. Billing mistakes became more common and difficult to resolve. Appointments felt rushed.

At the Polyclinic in Seattle, patient Todd Anderson said that after UnitedHealth took over, it became clear the company was trying to cut costs in every way possible. Check-in became centralized in a way that created a lot of confusion. Then came easily avoidable mistakes. The clinic sent the Seattle retiree’s bill to the wrong health insurer, so it was rejected. Despite Polyclinic’s repeated promises to fix the problem, Anderson was sent to collections. Then he was told if he wanted to stay on as a patient, he’d have to switch from his Aetna Medicare Advantage plan to a UnitedHealthcare one.

“Things changed rather dramatically, and it was pretty visible,” Anderson said.

For some patients, waiting longer to be seen had serious consequences. Connecticut resident Sharon Maloney believes her husband might still be alive if he’d been able to see his doctor right away, as he’d been able to before UnitedHealth took over ProHealth Physicians in 2015. In the past, she said, ProHealth had reserved time for sick patients to be seen the same day.

Maloney’s husband had several health issues, and he was taking medications for ulcerative colitis, chronic inflammation of the large intestine or rectum, that made him more susceptible to infections. In October of 2022, Maloney’s husband had all the telltale signs of a UTI, but ProHealth couldn’t get him in for three days. The day after he called ProHealth, his symptoms got so bad, Maloney took him to the hospital. By then, the infection had spread into his kidneys, leading to sepsis, antibiotics, a hospital-acquired infection, and, ultimately, his death last year.

“If he had been able to get a visit that day, if they had been able to identify the culture, and if they had gotten him on the antibiotic in the first couple of days, this slope would not have even started,” Maloney said.

UnitedHealth didn’t respond to questions about the care of Maloney’s husband.

Former longtime Polyclinic patient Mary Woodbery said things that used to be simple now require a maze of specialist referrals and seemingly unnecessary tests. One time, her teenage son had a tiny cyst on his neck that she suspected was an ingrown hair. Instead of letting him see a dermatologist straight away, The Polyclinic first made him see a radiologist who performed an ultrasound and then a neck specialist. Finally, a dermatologist confirmed it was an ingrown hair. Woodbery was exasperated.

“They have answers. They just don’t want to give them to you because they want to drag you through this endless chain of referrals so they can make sure all their departments are utilized,” said Woodbery, a speechwriter living in Seattle who had seen the same Polyclinic doctor for over two decades before that doctor left.

UnitedHealth continues to absorb medical groups, including a contentious battle over The Corvallis Clinic in Oregon. Regret is starting to set in for some physicians who took UnitedHealth’s offer. The coding dictates became too much for many to handle. For one former ProHealth physician in Connecticut, remorse builds even more after hearing from longtime patients who are wondering why they can’t get an appointment or why they have been mistakenly billed.

“Everybody thinks it was a catastrophe,” the former ProHealth physician said. “They destroyed our practice.”

https://statnews.com…

Dr. Diljeet Singh on “HEALTH CARE un-covered”

PNHP Vice President Dr. Diljeet Singh spoke with Wendell Potter’s “HEALTH CARE un-covered” for a video that was posted on July 24, 2024. Dr. Singh discussed how so-called “Medicare Advantage” plans are fleecing taxpayers to the tune of $140 billion each and every year—and routinely delaying or denying care, with often deadly results.

“I try to help people understand Medicare Advantage will make it hard for them to get health care,” said Dr. Singh. “They have a very good chance of having prior authorizations lead them to getting their care delayed unnecessarily—or even just denied.”

Medicare for All Prospects in a New Presidential Administration

Medicare for All received partial and ambiguous endorsement in the past by one presidential candidate. The major challenge ahead is achieving overwhelming and irresistible public support for the pure single payer system we need.

Where Kamala Harris stands on health care issues, The Hill, July 22, 2024, by Nathaniel Weixel

While running against Biden in the 2019 Democratic primary, Harris tried to present herself as someone between moderates like Biden and progressives like Sens. Elizabeth Warren and Bernie Sanders. She endorsed the Medicare for All bill introduced by Sanders, but also backed an array of moderate alternatives, including a “private option” plan that would transition to Medicare for All by allowing private insurance plans to compete with public plans.

Still, experts agree, she Is a staunch supporter of expanding ObamaCare and making health care more affordable for millions of Americans – something that is likely to be one of the biggest health care fights in Congress in 2025.

“Harris’ previous support for Medicare for All with a private insurance option is suggestive of her values, but I doubt it will be a big emphasis for her in the current campaign,” Larry Levitt, executive vice-president for health policy at KFF, said in an email. “I think Harris will lean much more into the Biden-Harris record on health care than policies she proposed in the 2019 primary. The political and policy context have changed quite a bit since 2019.”

Comment:

By Don McCanne, M.D. and Jim Kahn, M.D., M.P.H.

So does Kamala Harris support single payer / Medicare for All strongly enough to move it forward were she elected president? Many politicians include Medicare for All in the list of policies they support, but, after they are elected, it is moved off their desks as they deal with other pressing policies.

We must also note that including a private insurance option has major downsides. First, if private plans recruit and retain lower cost individuals while avoiding costly ones (in geek speak, risk selection), the system might split into a financially challenged public system for the sickest, and a highly profitable private system for the healthier. In addition, the added billing and insurance-related burden on providers and insurer profits would deprive our health care system of the efficiency we need and deserve to cover everyone while still controlling costs. So, from a technical perspective, all-in public insurance is best, as seen in many wealthy nations. Finally, a split system attenuates public insistence on an optimally functioning public system.

There is also an advocacy challenge. The enthusiasm for single payer in 2019, and still today, is high, about 2/3 of adults in fair polling questions. But under assault it is not as robust as we advocates would like. As an example, a panel debate including former PNHP president Adam Gaffney and the Pacific Research Institute’s Sally Pipes showed that, in spite of an excellent presentation by Gaffney, the audience support for Medicare for All declined significantly (YouTube video and transcript). This type of debate + polling is tricky to generalize, but is nonetheless a harbinger of fights ahead of us when single payer is under serious consideration.

We still have a lot of work ahead to persuasively convince the public of the clearcut advantages of properly public health insurance that would provide comprehensive care equitably to absolutely everyone, at a lower cost than the vast majority of us are paying now, thanks to progressive financing. Once these ideas are fully grasped by the public – which then raises voices in unison demanding its enactment and implementation – a President Harris would very likely respond positively.

https://healthjusticemonitor.org…

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Three Crumbling Health Insurance Pillars

Three recent stories remind us that fundamental pillars of successful health insurance—affordability, provider payment, and use of resources for care—are egregiously failing.

Healthcare Affordability and Value Indexes 2021-2024, West Health-Gallup, July 2024

Cost security among U.S. adults dipped to its lowest level ever in 2024, down 6 points since 2022, to just 55%. This decline mainly reflects adults aged 50 to 64 (down 8 points to 55%) and 65 or older (down 8 points to 71%). Adults under 50 dropped 5 points to 47% in 2024. For all three groups, these are historic lows.

Cost Insecure (37%): Recently unable to pay for care or medicine or to easily access quality care. 3-4 times more likely to cut back on basic household spending and to skip a medical procedure due to the cost.

Cost Desperate (8%): Recently unable to pay for care or prescribed medicine and feel that they lack access to affordable quality care. Half are “extremely concerned” about being able to pay for prescriptions and healthcare in the next 12 months.

2025 Proposed Medicare Physician Fee Schedule Highlights Urgent Need for Medicare Payment Reform, Press Release from Steven P. Furr (President, American Academy of Family Physicians), July 10, 2024

The Medicare program is essential in helping millions of people access comprehensive, continuous primary care. While the proposed 2025 Medicare physician fee schedule includes some proposals to strengthen primary care, its 2.8% reduction in the Medicare conversion factor once again highlights the urgent need for congressional action to ensure that physician payments keep up with the costs of running a practice.

Family physicians provide high-quality care to our patients and communities, but inadequate, falling Medicare payment rates create barriers to care for beneficiaries and strain physician practices. As a first step, Congress must enact an annual inflationary update to help physician payment rates keep pace with rising practice costs. Any payment reductions will threaten practices and exacerbate workforce shortages, preventing patients from accessing the primary care, behavioral health care, and other critical preventive services they need.

Private Medicare Plans and Vertical Integration Yield UnitedHealth $15.8 Billion in Profits Between January and June, HEALTH CARE un-covered, by Wendell Potter, July 15, 2024

UnitedHealth Group, the largest health insurance conglomerate by far, continues to show how rewarding it is for shareholders when corporate lawyers find loopholes in well-intentioned legislation – and game the Medicare Advantage program in ways most lawmakers and regulators didn’t anticipate and certainly didn’t intend – to boost profits.

UnitedHealth announced this morning that it made $15.8 billion in operating profits between the first of January and the end of June this year. That compares to $4.6 billion it made during the same period in 2014. One way the company is able to reward its shareholders so richly these days is by steering millions of people enrolled in its health plans to the tens of thousands of doctors it now employs and to the clinics and pharmacy operations it now owns. This is the result of the hundreds of acquisitions UnitedHealth has made over the past 10 years in health care delivery as part of its aggressive “vertical integration” strategy.

Comment:

By Jim Kahn, M.D., M.P.H.

Three pillars of functional health insurance are: (1) assuring financial access for patients, (2) paying providers fairly, and (3) directing financial resources to care.

But these pillars are crumbling:

(1) Nearly half of adults lack secure financial access due to lack of insurance and under-insurance, with one in 12 “cost desperate”.

(2) In Medicare, while Medicare Advantage plans overcharge by >$100 billion per year, front-line doctors face pay cuts. I think this reflects a CMS determination (terribly misguided) to grow Medicare Advantage. There are similar or worse underpayments in Medicaid (health care for the poor) across the nation. While there are discussions of payment reform, they typically steer clear of single payer.

(3) Insurer-conglomerates rake in tens of billions in profits, enriching shareholders while stiffing providers, patients, and pharmacies. (Add to this the administrative burden on providers of dealing with hundreds of insurance plans.)

We’ve reported elsewhere on falling longevity in the US, worse than in other nations.

The failure of our fragmented, profit-driven insurance couldn’t be clearer. The success of unified, not-for-profit insurance in >30 other wealthy nations couldn’t be clearer. It is efficient and humane to cover everyone with the same excellent insurance. Patients prosper, providers prosper. Investors play in other economic sectors.

Alas, too many groups have an ideological and/or financial stake in the current exploitive and deadly mess. We must stay the course; eventually sanity and single payer will prevail.

https://healthjusticemonitor.org…

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The Real Impact of Medicare Advantage for Beneficiaries and Medicare Funding

By David Lipschutz
Center for Medicare Advocacy, Special Report, July 18, 2024

At a time when over half of all Medicare beneficiaries are enrolled in Medicare Advantage (MA) plans, the MA program is costing significantly more than what traditional Medicare spends on a given beneficiary, adding stress to Medicare’s finances. As discussed below, this extra spending, however, does not translate to better health outcomes or more affordable care for those enrolled in MA plans. Funds from reining in excessive and wasteful payments to MA plans would be better spent shoring up the traditional Medicare program, which would benefit all Medicare beneficiaries – including those in MA plans.

Overwhelming Evidence of MA Overpayments

As described in a recent Health Affairs Forefront article titled “Estimating Overpayments To MA Plans: MedPAC Critics Get It Wrong” by Steven M. Lieberman, Paul B. Ginsburg, Donald M. Berwick and Richard Gilfillan (July 1, 2024), the Medicare Payment Advisory Commission (MedPAC) concluded in their March 2024 report that,

upcoding and favorable selection paid MA plans $83 billion (22 percent) more than what Medicare would have paid if MA enrollees were in [traditional Medicare]” in 2024 alone.

In describing “upcoding” in the current risk-adjusted payment system for MA plans, the authors note that “[r]eporting more diagnoses can increase risk scores, and higher risk scores increase monthly capitation payments. Many MA plans provide financial incentives to physicians and use other mechanisms to generate additional diagnostic codes that increase revenue.” The authors also describe MedPAC’s evidence for finding “substantial favorable selection into MA and sicker beneficiaries being more likely to disenroll from MA, as well as describing in detail its modeling methodology and assessing other studies of favorable selection. Extensive evidence shows [traditional Medicare] beneficiaries are, on average, sicker than MA beneficiaries, even after risk adjustment, not the other way around.”(Emphasis added.)

The Wall Street Journal recently published findings of their own investigation into MA upcoding.  An article titled “Insurers Pocketed $50 Billion From Medicare for Diseases No Doctor Treated” by Christopher Walker, Tom McGinty, Anne Wilde Mathews and Mark Maremont (July 8, 2024) describes the paper’s analysis, which finds that:

[p]rivate insurers involved in the government’s Medicare Advantage program made hundreds of thousands of questionable diagnoses that triggered extra taxpayer-funded payments from 2018 to 2021, including outright wrong ones […] [t]he questionable diagnoses included some for potentially deadly illnesses, such as AIDS, for which patients received no subsequent care, and for conditions people couldn’t possibly have […] [o]ften, neither the patients nor their doctors had any idea.

The Journal’s analysis found that “Medicare paid insurers about $50 billion for diagnoses added just by insurers in the three years ending in 2021…” The analysis suggests that in the current MA risk-adjusted payment system, insurers seek out diagnoses that pay the most extra money.  The analysis found, for example, that “[i]nsurer-driven diagnoses by United Health for diseases that no doctor treated generated $8.7 billion in 2021 payments to the company…” UnitedHealth, the largest MA insurer, “added diagnoses at a far higher rate than other major insurers.”  For example, the reporters found that UnitedHealth members were about 15 times as likely to be diagnosed with diabetic cataracts as the average patient in traditional Medicare, one of the “most heavily used diagnoses” to increase MA payment.

A recent Journal of American Medical Association (JAMA) Viewpoint article juxtaposes MA overpayments with how much plans actually spend on medical services, given significant overhead and restrictions on care such as limited provider networks and prior authorization. The article, titled “Less Care at Higher Cost – The Medicare Advantage Paradox” by Adam Gaffney, Stephanie Woodhandler and David Himmelstein (June 10, 2024) opens by citing a declaration by insurance industry trade group AHIP that MA is “a good deal for members and taxpayers” and responds that “[t]he first part of the claim is debatable, while the second part is false.”  The article cites diagnosis upcoding along with “cherry picking” healthier enrollees and “lemon dropping” sicker and more expensive ones as contributing to MA overpayments. The authors state:

Paradoxically, despite those overpayments, MA plans spend 9% less on medical services than FFS Medicare spends for comparable enrollees. Most MA plans offer helpful supplementary benefits, for example, eyeglasses, some dental coverage, and reduced Part D (and occasionally Part B) premiums and out-of-pocket costs. But their savings from managed-care techniques, including network restrictions, prior authorization requirements, and financial incentives for health care centers and clinicians to curtail expensive care, more than offset MA plans’ extra spending for supplementary benefits. Unfortunately, MA’s managed-care techniques reduce both high-value and low-value services, that is, MA is a “blunt instrument for reducing health care utilization.” But even blunt instruments can inflict harm, especially on vulnerable patients. [citations omitted]

Citing a 2023 report by Milliman, the JAMA article notes that MA plans “incur extra expenses for television advertisements, health care network management, benefit design, executive salaries, health care utilization review, prior authorization, and shareholder profits, driving their overhead up to 14% (just below the limit set by the Affordable Care Act).” Based on CMS, GAO and Milliman data, the authors state that “MA overhead for 2007 to 2024 totals $592 billion— equivalent to 97% of taxpayers’ $612 billion overpayments to them during that period.” (Emphasis added.)

An article in Common Dreams titled “A $600 Billion Swindle: Study Makes Case to ‘Abolish’ Medicare Advantage” by Jake Johnson (June 10, 2024) describes the JAMA article and quotes the lead author, Dr. Adam Gaffney from Harvard Medical School:

Money that could be used to eliminate all copayments or shore up Medicare’s Trust Fund is instead lining insurers’ pockets,” said Gaffney. “And the private insurers keep Medicare Advantage enrollees from getting needed care by erecting bureaucratic hurdles like prior authorizations and payment denials.

The JAMA authors conclude: “We think the time has come to declare MA a failed experiment and abolish it. That would allow redeploying the $88 billion taxpayers will overpay MA this year to upgrade benefits for all Medicare beneficiaries.”

Health Outcomes Not Better, Not More Affordable for MA Enrollees

Overwhelming evidence shows that wasteful overpayments to MA plans cost the Medicare program more than traditional Medicare.  But what do MA enrollees get, in turn?  In response to the Wall Street Journal’s analysis of MA overpayments due to unconfirmed diagnoses described above, a UnitedHealth spokesperson disputed the Journal’s findings, and was quoted in the article offering a common insurance industry retort to claims that plans are improperly paid – “that Medicare Advantage ‘provides better health outcomes and more affordable healthcare for millions of seniors’ than traditional Medicare.” As outlined below, neither of these claims holds up.

“Better” Health Outcomes?

The JAMA Viewpoint article by Gaffney, Woodhandler and Himmelstein discussed above notes that according to MedPAC, “data limitations preclude drawing conclusions about MA’s effect on overall quality of care” but notes that “MA enrollees requiring complex cancer surgeries are less likely to be treated at specialized centers, experienced longer delays and higher mortality than beneficiaries in [traditional] Medicare.”

When putting aside insurance industry-funded and promoted reports about health outcomes of MA enrollees, the results are decidedly mixed. As noted by the Commonwealth Fund in their “Medicare Advantage: A Policy Primer” (January 2024):

Most evidence shows that the quality of care delivered through Medicare Advantage plans and through traditional Medicare is equivalent overall. However, some studies suggest that Medicare Advantage plans, on average, are associated with better-quality care on certain metrics, particularly those related to preventive care and unnecessary hospital admissions. Other evidence suggests that Medicare Advantage does not outperform traditional Medicare on several significant measures, including mortality, readmission rates, patient experience, and racial and ethnic disparities [citations omitted].

Similarly, in September 2022 KFF published a report titled “Beneficiary Experience, Affordability, Utilization, and Quality in Medicare Advantage and Traditional Medicare: A Review of the Literature,” which examined 62 studies published since 2016 that compare Medicare Advantage and traditional Medicare based on measures of beneficiary experience, affordability, service utilization, and quality. KFF noted that:

We found few differences between [MA] and traditional Medicare that are supported by strong evidence or have been replicated across multiple studies. Both [MA] and traditional Medicare beneficiaries reported similar rates of satisfaction with their care and overall measures of care coordination. [MA] outperformed traditional Medicare on some measures, such as use of preventive services, having a usual source of care, and lower hospital readmission rates. However, traditional Medicare outperformed [MA] on other measures, such as receiving care in the highest-rated hospitals for cancer care or in the highest-quality skilled nursing facilities and home health agencies. Additionally, a somewhat smaller share of traditional Medicare beneficiaries than [MA] enrollees experienced a cost-related problem, mainly due to lower rates of cost-related problems among traditional Medicare beneficiaries with supplemental coverage. Several studies found lower use of post-acute care among [MA] enrollees but were inconclusive as to whether that was associated with better or worse outcomes [emphasis added].

“More Affordable”?

The insurance industry often promotes self-funded research that purports to show that MA enrollees spend less than people in traditional Medicare. For example, as discussed in a HEALTH CARE un-covered post titled “While an Insurance Industry Front Group Pushes Against Medicare Advantage Scrutiny, Rural Hospitals Remain Unswayed” by Trudy Lieberman (July 8, 2024), an insurance industry advocacy group published a report claiming that traditional Medicare beneficiaries living in rural areas spend significantly more on health care premiums and out-of-pocket costs than people enrolled in Medicare Advantage plans.  Lieberman contrasts this claim with reports of hospitals and other providers in rural areas dropping their contracts with, and issuing general complaints about, MA plans.  The Nebraska Rural Health Association, for example, released a report that “warned that Nebraskans with Advantage plans ‘have created such a financial burden for rural residents’ that when they get sick, those with Medicare Advantage coverage ‘represent the largest growing segment of charity care for Nebraska’s rural hospitals.’”

Analyses independent of the industry paint a more damning picture. An article in The Guardian titled “Delays, Denials, Debt and the Growing Privatization of Medicare” by Micheal Sainato (June 3, 2024), for example, notes that “[o]lder adults with Medicare Advantage are significantly more likely to struggle with medical bills or debt than those under traditional Medicare plans, according to a 2023 report by the Commonwealth Fund.”

More recently, the Annals of Internal Medicine published a study titled “Association of Medicare Advantage Enrollment With Financial Burden of Care” by Sungchul Park, PhD; David J. Meyers, PhD; and Amal N. Trivedi, MD, MPH (June 25, 2024) which examines whether the financial burden of care decreased for people switching from traditional Medicare to Medicare Advantage relative to those who remain in traditional Medicare.  While the study concluded that differences in financial outcomes between these groups “were small,” the authors found that out-of-pocket costs increased for those switching to MA and, rather alarmingly, “we found that switching to MA was associated with increased financial burden among vulnerable populations, especially those with low incomes [emphasis added].” The authors note:

Our findings contrast with the notion that MA’s apparently more generous health insurance benefits lead to financial savings for enrollees. Surveys and focus groups of Medicare beneficiaries suggest that a primary driver of MA enrollment is the perception of lower out-of- pocket costs. This claim is also touted in MA insurers’ marketing materials [citations omitted].

In an accompanying Editorial published in the Annals of Internal Medicine titled “Medicare Advantage: High Costs and Poor Protection” by Steffie Woolhandler and David Himmelstein (June 25, 2024), the authors ask what people get in return for an estimated $83 billion in overpayments to MA plans this year, stating that, according to the study cited above, it is “[n]ot financial protection,” Describing how the researchers analyzed data, the Editorial notes that in the second year after people who switched from traditional Medicare [TM] to MA,

beneficiaries switching to MA were no better insulated from medical costs than those remaining in TM. Indeed, nonsignificant trends suggested that, if anything, MA offered worse protection, particularly for lower-income enrollees.

As explained in an article published by MDedge titled “Medicare Advantage Plans Not Always Advantageous” by Diana Swift (June 24, 2024) that examines both the study and the editorial published in the Annals, the researchers found:

Although the overall out-of-pocket differences for MA were minimal and amounted to less than 1% of total healthcare expenses, MA was associated with a greater financial burden in vulnerable, especially in low-income populations. For every 100 beneficiaries with family incomes below 200% of the federal poverty level, one to six more switchers faced a catastrophic financial burden, with their out-of-pocket costs consuming more than 40% of household income in the year after switching. (Emphasis added.)

Conclusion

Wasteful overpayments to Medicare Advantage plans do not serve any public good. Despite some recent attempts by the Centers for Medicare & Medicaid Services (CMS) to address some of the factors leading to overpayments, most policymakers continue to look the other way.

The authors of the Editorial in the Annals of Internal Medicine, cited above, conclude:

The privatization of Medicare through MA has been costly for taxpayers yet has offered seniors little or (per Park and colleagues’ findings) no respite from burdensome costs. Redeploying MA overpayments to improve TM coverage would better serve seniors and impede the accretion of medical resources by investors whose profit seeking too often overrides patient care priorities. (Emphasis added.)

Advocates for beneficiaries and the welfare of the Medicare program concur. It is past time to fix wasteful Medicare Advantage policies and practices.

https://medicareadvocacy.org…

Medicare for All Explained Podcast: Episode 113

The Missing Criteria for Health Insurance Companies

July 15, 2024

Podcast host Joe Sparks laments the growing use of artificial intelligence to deny claims in the so-called “Medicare Advantage” program—a technological advance that aligns with health insurers’ business interests, but actively harms patients.

“Health insurance companies are mostly worried about profit,” he says, “and one of the best ways to increase profits is to deny care.”

Additional episodes will be uploaded monthly. Subscribe in iTunes, or access a complete archive of the podcast, below.

https://medicareforallexplained.podbean.com

Critiquing Project 2025: Medicare

Project 2025 proposes building Medicare Advantage and value-based care, and an all-in focus on free market methods proven not to work in health care. It’s a recipe for increasing costs and maximizing profits for corporations.

Project 2025 Mandate for Leadership: The Conservative Promise, April 2024, The Heritage Foundation & partner organizations, Chapter 14: Department of Health and Human Services

Medicare (p. 463-469)

Medicare should be reformed according to four goals and principles:

Increase Medicare beneficiaries’ control of their health care. Patients are best positioned to determine the value of health care services, working with their health care providers. They also benefit from increased choice of doctors, hospitals, and insurance plans. Access to reliable information with respect to physicians, hospitals, and insurers is therefore essential.

HJM comment: Choice of provider, yes! However, it’s a debunked myth that valuing health care is like valuing cars or phones. Health care is complex and often emotionally fraught. It’s unsuited for a free market approach (Ken Arrow got a Nobel for this insight). Let’s stop pretending that a “free market” can fix health insurance.

Ensure sustainability and value for beneficiaries and taxpayers. Prices are best for patients when determined by economic value rather than political power and when they are known in advance of the receipt of services. Government’s use of non-market-based methods to determine reimbursement leads to overspending on low-value services and products and underpayment for high-value services and products, stifles beneficial innovation, and because of Medicare’s size distorts payments throughout the health care system. Intermediate entities that can manage financial risk and ensure quality of care are important in transitioning to value-based care within the Medicare program.

HJM comment: With a free market not up to the task, the government has a key role to play. Indeed, there are proven methods to assure both sustainability and value – used in 32 other wealthy nations. In contrast, “Intermediate entities” – Medicare Advantage plans and direct contracting entities like ACO REACH – shift funds from care to profits and increase costs for taxpayers, with a mixed record on quality.

Encourage more direct competition between Medicare Advantage and private plans. Medicare Advantage (MA), a system of competing private health plans, is the major alternative to traditional Medicare for America’s large and growing cohort of seniors. The program provides beneficiaries with a wide range of competitive health plan choices—a richer set of benefits than traditional Medicare provides and at a reasonable cost. Equally as important, the MA program has been registering consistently high marks for superior performance in delivering high-quality care. Critical reforms are still needed to strengthen and improve the program for the future. Specifically:

  • Make Medicare Advantage the default enrollment option.
  • Give beneficiaries direct control of how they spend Medicare dollars.
  • Remove burdensome policies that micromanage MA plans.
  • Replace the complex formula-based payment model with a competitive bidding model.
  • Reconfigure the current risk adjustment model.
  • Remove restrictions on key benefits and services, including those related to prescription drugs, hospice care, and medical savings account plans.

HJM comment: We’ve written extensively about problems with Medicare Advantage (MA). It incurs > $100 billion per year in excess costs for CMS and beneficiaries, and has a mixed effect on quality (with some distortion by bias). MA plans already have a marketing edge over traditional Medicare; don’t boost that. MA needs more, not less, management. The current payment bidding incorporates, in a complex way, competitive elements. Overall, we need less MA, not more. And ultimately, no MA – no for-profit intermediaries!

Legacy Medicare Reform. Legislation reforming legacy (non-MA) Medicare should:

  • Replace the bureaucrat-driven fee-for-service system with value-based payments to empower patients to find the care that best serves their needs.
  • Codify price transparency regulations.
  • Restructure 340B drug subsidies toward beneficiaries rather than hospitals.
  • Repeal harmful health policies enacted under the Obama and Biden Administrations such as the Medicare Shared Savings Program and Inflation Reduction Act.

HJM comment: Value-based payments (e.g., ACOs) have not worked to reduce net costs or improve quality; they should be dropped. Price transparency efforts have failed mainly due to complexity; again, medical care is not a viable free market, and our fragmented insurance system undermines even good ideas like price transparency. The other points are too in the weeds or vague. “Legacy” i.e., traditional, fee-for-service Medicare has much to recommend it, most of all free choice of providers and avoiding insurer risk gaming. It’s the foundation for an improved Medicare-for-All single payer system.

Medicare Part D Reform. The Inflation Reduction Act (IRA) created a drug price negotiation program in Medicare that replaced the existing private-sector negotiations in Part D with government price controls for prescription drugs. These government price controls will limit access to medications and reduce patient access to new medication.

This “negotiation” program should be repealed, and reforms in Part D that will have meaningful impact for seniors should be pursued. Other reforms should include eliminating the coverage gap in Part D, reducing the government share in the catastrophic tier, and requiring manufacturers to bear a larger share. Until the IRA is repealed, an Administration that is required to implement it must do so in a way that is prudent with its authority, minimizing the harmful effects of the law’s policies and avoiding even worse unintended consequences.

HJM comment: Ironically, this section undermines the one free market tool that could work in our dysfunctional system: direct price negotiations for a discrete product, medications. Private sector negotiations fail because the sellers (Pharma) have too much power. Further, the medication supply line is distorted by a superfluous profiteering intermediary, pharmacy benefit managers. Although these price efforts are baby steps, they are in the right direction. Other nations negotiate drug prices, as would single payer. The last sentence implies subverting the law’s intent.

P.S. On a positive note, I agree with closing the Part D coverage gap!

Comment:

By Jim Kahn, M.D., M.P.H.

The Project 2025 Medicare vision focuses on free-market ideas like price transparency and the interaction of supposedly well-informed consumers and providers. This falls way short in light of many decades of evidence that a free-market approach fails in medical care, because it is unlike other goods and services. Kenneth Arrow was the first to point this out, for which he received the Nobel Prize. Others have written similarly. We see repeatedly how our fragmented system, attempting to use free market ideas despite the evidence, costs too much and provides too little care.

Project 2025 would have us believe that further steps in the free-market direction would remove the glitches. But they will not. The one free market strategy that would work – negotiating prices for a standard commodity (drugs) – is rejected by Project 2025.

As seen in wealthy nations around the world, the solution lies in a single insurance plan for everyone with no profit-making insurers, and national oversight. Health care is too complex logistically and emotionally to work like other parts of the economy.

See my detailed point-by-point critique above. The report also offered a couple of good ideas, e.g., reducing regulatory burden on doctors and gaming of payment rates, but these do not mitigate the serious harms which would accrue from the overall approach.

In coming days, I’ll concisely summarize my recent 3 critiques of Project 2025 (Medicaid, Private Insurance, and Medicare).

https://healthjusticemonitor.org…

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