Summary: Private equity is consuming US health care from the inside out, weakening its structure and strength, enriching investors at the expense of patient care and patients. Incremental health reforms have failed. It’s time to move past political barriers to achieve consensus on real reform.

Termites in the House of Health Care, Milbank Quarterly, November 14, 2022, by John E. McDonough

Private equity firms are financial termites devouring the woodwork and foundations of the US health care system. As Laura Katz Olson documents in her new book, Ethically Challenged: Private Equity Storms US Health Care, “PE firms are gobbling up physician and dental practices; homecare and hospital agencies; substance abuse, eating disorder, and autism services; urgent care facilities; and emergency medical transportation.”

Just as termites are characterized as “some of the most successful insects on earth,” private equity has become a growing and diversified part of the American health care economy. Demonstrated results of private equity ownership include higher patient mortality, higher patient costs, fewer jobs, poorer quality, and closed facilities.

Dr. Arnold Relman, late editor of the New England Journal of Medicine, presciently wrote in 1980 of an emerging “medical-industrial complex.” As “vast new funds were moving into medical care,” wrote Relman, “the health care system was rapidly changing from a professional service primarily devoted to the care of the sick into a lucrative and competitive marketplace for investors and investor-owned corporations.”

Private equity is not the only force in US health care needing reform. Health insurers, hospitals, drug makers, pharmacies, and others have placed financial interests ahead of patient needs.  No other part of the system, though, is designed so thoroughly to maximize short-term financial benefit to shareholders above all else. Action is overdue to stop the rot.

John E McDonough is a Professor of Practice at the Harvard T. H. Chan School of Public Health

Comment:

By Don McCanne, M.D.

John McDonough has always supported universal health care coverage, but has recognized the political barriers, and thus was an active supporter of first the Massachusetts health reform law and then the Affordable Care Act as incremental approaches to reform.

As recent as February 2020, he wrote an article in Health Affairs on why Medicare for All remains a virtual political impossibility. Health Affairs published my comment in response making the point that “when you have the right policy and the politics are wrong, you don’t change the policy to comply with the dysfunctional politics, you change the politics instead.”

In the meantime, our quest for health care justice through a universal, publicly funded, equitable single payer financing model labeled Medicare for All has evolved into an inadequate approach as we stated in The Nation, as private corporate control takes over much of health care. Laura Katz Olson in her book, “Ethically Challenged” explains how private equity is stripping the health care system of its assets – the “termites” that McDonough cites. Medicare is increasingly becoming privatized as Medicare Advantage plans divert health care dollars to their own investors and ACO REACH threatens a corporate exploitation of traditional Medicare.

Well, where does this lead us? The incremental approaches have been a disaster – perpetuating profound inequities in health care, with far too many uninsured and underinsured. The inattention to public financing has allowed health care dollars to be diverted to wealthy investors, leaving tens of millions without means of paying for the health care that they need.

We need to redesign the system so that it works on both fronts: an equitable financing system for all, and devoid of the “termites.” Then we need to intensively publicize our results such that essentially all rational citizens will recognize the clear superiority of the public financing solution to our health care quagmire. Even John McDonough should agree that it is time to overcome political hurdles, and adopt the best policy for all of America.

http://healthjusticemonitor.org…

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Summary: Three recurring health insurance news themes are so potent, they should become a meme: 1) Private insurers pursue profit via manipulation; 2) Even insured patients bear massive cost burdens; and 3) There’s strong popular support for fundamental reform. Let’s roll with this meme!

How Medicare Advantage Scams Seniors | Opinion, Newsweek, Nov. 15, 2022, by Rep. Jan Schakowsky and Wendell Potter

Where billions of dollars flow, deceptive actors follow. And nowhere does deception run deeper than how health insurers lure seniors into Medicare Advantage plans—only to leave many retirees struggling to cover their out-of-pocket requirements when their incomes are their lowest. …

Medicare Advantage is a health insurance program in which private health insurers are reimbursed generously by the federal government for providing insurance coverage, sometimes with additional benefits, to retired Americans. This incentivizes insurers to sign up as many elderly folks as they can. While many Medicare Advantage plans provide some coverage for dental, vision and hearing and discounts on gym memberships, their ads obscure the often-life-threatening restrictions and bank-account draining demands that are common in Medicare Advantage plans….

One in four Medicare Advantage plans are being falsely advertised. …

In just one year, [diagnostic] upcoding accounted for $12 billion in additional payments to Medicare Advantage plans.

Financial Outcomes After Traumatic Injury Among Working-Age US Adults With Commercial Insurance, JAMA Health Forum, Nov. 11, 2022, by Scott JW et al.

Results: The 3165 working-age adults in the postinjury cohort were similar demographically to the 2223 patients in the comparison [pre-injury] cohort. The postinjury cohort had a 23% higher likelihood of having medical debt in collections (754 [23.8%] vs 429 [19.3%]; a 70% higher amount of medical debt in collections ($2087 vs $1227), and a 110% higher bankruptcy rate (39 [1.2%] vs 13 [0.6%]). No significant differences were found regarding credit scores or nonmedical debt in collections.

Oregon Voters Approve Ballot Measure To Recognize Health Care As A Human Right, DailyWire.com, Nov. 15, 2022, by Dillon Burroughs

Oregon voters have approved [50.6%] a measure that recognizes health care as a human right.

“It is the obligation of the state to ensure that every resident of Oregon has access to cost-effective, clinically appropriate and affordable health care as a fundamental right,” the amendment reads.

Comment:

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

Over the 1.5 years of HJM posts, patterns emerge. As I was perusing topics for today’s blog, I encountered a strikingly familiar trio of important stories: private insurers mislead, beneficiaries become indebted, and people want real change. This trifecta is a meme.

The Newsweek op-ed by Schakowsky and Potter highlights how private insurers – who run Medicare Advantage plans – mislead beneficiaries with overblown promises of coverage and bilk the government of tens of billions a year with exaggerated diagnoses. This is a persuasive synthesis of recently reported misbehavior by Medicare Advantage, the predominant source of growth for private insurers. ACO REACH in traditional Medicare poses similar privatization risks.

The JAMA Health Forum article reveals the high medical debt and bankruptcies borne by privately insured patients who experience traumatic injury. This is a compelling clinical example of data on the general population: 40% of adults have medical debt (average $2,500) and there are >250,000 annual medical bankruptcies.

The news from Oregon confirms that voters support a fundamental commitment to health care justice. The margin was narrow, and operational details were omitted, but the statement of values aligns with polling that indicates two-thirds support for government funding of health care.

Insurer profits, patient debt, and a popular craving for real reform: this is where we are in 2022.

Memes are motivating. Let’s use this one to help us achieve the change that would make it anachronistic.

http://healthjusticemonitor.org…

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Summary: A communist perspective on health pushes the boundaries of reform. For many progressives, it’s too much. But it’s a legitimate and valuable part of the discussion. Let’s meet in the Town Square to see how we can reconcile our perspectives, unite our caring, and agree on a solution.

Health Communism, Verso 2022, by Beatrice Adler-Bolton and Artie Vierkant

Excerpts:

Capital has been allowed to define the meanings, terms, and consequences of “health” for long enough. We articulate how health is wielded by capital to cleave apart populations, separating the deserving from the undeserving, the redeemable from the irredeemable, those who would consider themselves “workers” from the vast, spoiled “surplus’ classes. We assert that only through shattering these deeply ingrained binaries is the abolition of capitalism possible.

Some readers may be surprised to find little attention devoted in Health Communism to the question of health insurance. We understand health insurance companies for what they are: principally, they are financial institutions, concerned as they are only with payments for services rendered and the endless, bureaucratic, deadening, management of risk. There is no place for them in society.

It is important to recognize that, even as we fight in the US for policies like Medicare for All, the task at hand is much greater than one program could capture. It is the total reformation of the political economy of health, and in so doing, the total reformation of the political economy.

Capital has emphasized and corrupted the delineations between surplus classes for its convenience; it is immeasurably threatening to capital to see a group of those it has deemed to be waste come together in solidarity.

We are each of us ripped and maimed, strangled and buried by capital, in one way or another. That entire industries exist in plain sight to see us along this vast process of endlessly iterative life chances, to then subject us to extraction when we are surplus and no longer of use, and to eke out slivers of profit from our eventual deaths, is capital’s greatest sleight of hand. We are all surplus.

The host-body relationship of health and capital can be understood through an analysis of the social determinants of health and their direct relationship to the broader political economy. It is present in each of the accounts we have demonstrated throughout Health Communism; with each stage, with every evolution of the political economy of health, capital has come to occupy and replace more and more components of its host. But capital cannot kill its host body, or it would have nowhere to hide, nothing to exploit, a barren universe. It is for this reason that capital only fears health. It is up to us to separate them.

Comment:

By Don McCanne, M.D.

There is a great need to increase communication on the concepts that will bring health care justice to all. The title and rhetoric of Health Communism may not seem like it would fall in line with this goal, but it clearly does. Understanding the views of those who sincerely care about the health of all of us is important, and so it is important for us to make a sincere effort to understand those views no matter what ideological and rhetorical frames they adopt.

What about understanding the views of those who don’t seem to care? The capitalists. Rather than not caring, it is much more likely that they communicate amongst themselves, distracted by payment methods and the like, developing modes of behavior and rhetoric that merely suggests that they don’t care. Maybe we should be having more conversations with them, asking them questions that would bring out answers to show that they really do care.

Maybe it’s time to agree to meet again in the Town Square and bring all of our ideas together so that we can develop that system that will work for all of us. Of course, if we’re all there to ensure health care justice for all, it is likely we would end up with a universal social insurance system: single payer. We would also address the social roots of health inequity. And as we have suggested before in HJM, Medicare for All may not be enough: we may need to take on capital interests more broadly. That’s a tough but necessary conversation in the Town Square.

http://healthjusticemonitor.org…

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Summary: Tuesday’s midterm elections pitted Dem efforts to build social welfare and protect abortion rights and democracy against GOP blaming Biden for inflation and crime, and advocating for limits on abortion. The Dems performed strongly, but threats to democracy loom. We explore how the fights for democracy and single payer align.

Comment:

By Jim Kahn, M.D., M.P.H. and Kenneth Colón

What the midterm election told us:

The nation averted the “red wave” endorsement of MAGA politics, with the best first midterm result for a Democratic president in decades. Voters responded to appeals to protect abortion rights and democracy, and largely didn’t blame Biden for post-COVID inflation. Yet it’s not time for complacency: American democracy remains in danger.

CNN reports that of the 34 Republican candidates for Secretary of State or Governor who rejected, questioned, or tried to overturn the results of the 2020 election, 11 are projected to win their races. The Republican National Committee has supported 70+ “election integrity” lawsuits, intending to suppress votes and systematically deprice Dems of full representation, as in the case of hyper-aggressive gerrymandering. A GOP Senate, if that happens, will obstruct Dem appointments to courts and agency oversight boards. The US House of Representatives will likely be GOP-controlled. This will likely lead to nearly nonstop hearings attacking Biden and other favorite targets of the Right to build support for a 2024 GOP presidential win. With a GOP president, traditional norms on stability of domestic and foreign policies will be jettisoned via bureaucratic subterfuge (a reclassification of civil servants as “policy making” thus depriving them of job protection, affording the president massive power to enforce loyalty over law). Meanwhile, the US Supreme Court will consider a case next month that may put control of federal elections solely in the hands of state legislatures — some of which, as a byproduct of extreme gerrymandering, deviate sharply from the views of their constituents. A Dem presidential candidate may win more votes, yet the state electors go to the GOP.

To be sure, there are encouraging signs in the mid-terms. Support was high among young Americans, who leaned very Democratic due to progressive values and favoring student debt relief – helping achieve impressive Dem overall and progressive results. We also elected our first Gen Z member of Congress. More and more, it appears that voters are recognizing and reacting to the threats to democracy. This offers hope of further broadening of resistance to GOP efforts to undermine majority rule.

Where does health reform fit in?

Small changes nudge us in a good direction, e.g. in the Inflation Reduction Act: more subsidies for the ACA, and Medicare drug price negotiations, constraints, and out-of-pocket spending limit. Yet single payer would do much better at controlling overall health care costs and save families thousands of dollars.

Beyond that, single payer is the health reform that most faithfully embodies the democratic values we’re fighting for. Equality would jump as universal, high-quality insurance replaces being uninsured, under-insured, or insured by under-funded programs for the poor. Liberty would rise by delinking work and insurance coverage, and offering real, unfettered choice of providers — not false choice among over-priced insurance plans. Small businesses and entrepreneurship could flourish as a result. Community would blossom by fostering the shared experience of access to care and elimination of medical debt. Americans could live longer, healthier, more fulfilling lives.

Is there a viable link between promoting single payer and saving democracy?

Single payer proposals engender massive attacks as “socialism” and “government takeover”. It isn’t, of course — it’s public financing of private care. Notably, even modest and inadequate reform ideas like a public option are similarly attacked, so we might as well think big, aiming for an approach that would really solve health care financing problems. Fortunately, people are increasingly recognizing the fundamental failings of our fractured insurance mess and thus the need for real reform.

So, how can we link the fight for single payer with the fight for democracy? Here are some ideas:

1. Understand the links – where do the values overlap? We started above and are exploring other shared values. But we’d like to broaden the discussion and disseminate this idea.
2. Explore alliances – convene organizations working on single payer and democracy preservation for structured discussion and mission coordination.
3. Scrutinize the idea that the Dems should focus on small-bore incremental health reforms rather than single payer, which generates vigorous attacks from the GOP interests vested in our current health system. One potential counterargument is that only comprehensive health care financing reform broadly and powerfully advances democratic values. It’s the only way to control costs globally and for families. Another is that all healthcare reforms proposed by Dems will be condemned by the GOP anyway, so Dems should not let the GOP guide their healthcare strategy.
4. Broaden political involvement. For people excited about these issues and energized by midterm results, and perhaps thinking about working with the local political party, or volunteering in elections – now is a great time to start.
5. Encourage discussion. With friends, family, neighbors, anyone who will engage. Spread the word, but also listen well to their thoughts, beliefs, and concerns.

Let’s make meaningful progress on the parallel and aligned fronts of democracy and health care justice!

http://healthjusticemonitor.org…

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Summary: A US Senate committee issued a report documenting and condemning “widespread” abusive marketing practices for the private health plans known as Medicare Advantage. This follows NYT reporting on the Medicare Advantage “cash monster.” It’s time to recognize the failure of privatizing Medicare … and instead embrace single payer.

Deceptive Marketing Practices Flourish in Medicare Advantage, November 3, 2022, by the Majority Staff of the U.S. Senate Committee on Finance

Part I: Executive Summary

The Centers for Medicare and Medicaid Services (CMS) revealed earlier this year that the number of Medicare beneficiary complaints about private sector marketing for Medicare Advantage (MA) plans more than doubled from 2020 to 2021. The Senate Finance Committee … launched an inquiry in August 2022, collected information on marketing complaints from 14 states and found evidence that beneficiaries are being inundated with aggressive marketing tactics as well as false and misleading information, such as:

Seniors shopping at their local grocery store are approached by insurance agents and asked to switch their Medicare coverage or MA plan.

Insurance agents selling new MA plans tell seniors that their doctors are covered by the new plans. Seniors who switch plans find out months later that their doctor is actually out-of-network, and they have to pay out-of-pocket to visit their doctor.

Seniors receive mailers that look like official business from a Federal agency, yet the mailer is a marketing prompt from an MA plan or its agent or broker.

An insurance agent calls seniors 20 times a day, attempting to convince them to switch their Medicare coverage.

Widespread television advertisements with celebrities claim that seniors are missing out on benefits, including higher Social Security payments, in order to prompt seniors to call MA plan agent or broker hotlines.

Each one of these vignettes represents documented instances of aggressive or deceptive MA and Part D marketing practices that this investigation found to be widespread, not isolated events. Other examples submitted by the states are documented in this report.

The Committee received evidence of fraudulent and misleading marketing practices from states and other stakeholders – painting a consistent national picture. These issues were reported more frequently with respect to MA plans compared to stand-alone Part D plans. In addition, nine of the ten states reporting quantitative complaint information found an increase in complaints from 2020 to 2021 that mirrored the trend found by CMS.

Information submitted by states demonstrates that beneficiaries are inundated with fraudulent and misleading communications across all modes of communication (in-person, television, telemarketer, and robo-calls). An egregious example submitted by the states includes marketing materials designed to look like official communications from Federal agencies. A number of states also raised concerns with the use of “Medicare” in the naming and branding of marketing companies to suggest that a marketing company is representing the Medicare program. These practices are intentionally deceptive as they blur the lines between official government communication and private health plan marketing.

The investigation also uncovered a range of predatory actions. Agents were found to sign up beneficiaries for plans under false pretenses, such as telling a beneficiary that coverage networks include preferred providers even when they do not. Of particular concern to the Committee were reports across states of agents changing vulnerable seniors’ and people with disabilities’ health plans without their consent.

The burden of deceptive and predatory marketing practices falls unequally across the already vulnerable Medicare population. The Committee heard that unscrupulous actors are targeting individuals dually eligible for Medicare and Medicaid (so-called “dual eligibles” who are allowed to switch MA plans once every quarter) as well as individuals with cognitive impairments. False and misleading marketing advertisements and fraudulent sales practices undermine access to care and the trust beneficiaries have in the Medicare program.

Comment:

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

As I approached my 65th birthday in May, the calls began. “This is the Medicare Medical Care Help Center” was the frequent opener. Guess what? They were not from Medicare, instead were telemarketers peddling Medicare Advantage plans. I also received – and continue to receive – numerous mailings. Lucky for me, I’m not cognitively impaired, and my University of California retirement supports a generous health plan that works for me and my family. I recognized this marketing blitz as high pressure sales, and ignored it. Reading the impressive Senate report, it turns out that CMS prohibits many of these marketing practices (such as private brokers using the “Medicare” name). Countless seniors have been fooled and harmed.

So, can we fix these problems? That’s what the Senate report recommends – better oversight. I excluded that portion of the Executive Summary, because I believe the problems with Medicare Advantage are far too pervasive and structurally embedded to be remedied with fine-tuning.

Medicare Advantage (MA) is a fundamentally flawed idea. As reported in the NY Times, MA plans overbill the federal government by tens of billions of dollars per year. Financial barriers to care for sick individuals are greater in MA than in traditional Medicare. Mortality for MA beneficiaries is highly variable, hurt by lower spending, and unrelated to quality measures. Recent letters to CMS list the problems (here & here).

Traditional Medicare is also under privatization assault. ACO REACH, despite its clever “equity” marketing, echoes the flawed MA model: it uses corporate “direct contracting entities” that will reap billions in profits as fiscal agents for capitated coverage. See here, here, and other HJM posts.

We’ve seen abundant evidence that privatization of Medicare is a disaster masquerading as a solution, to address a problem that never existed. Traditional (non-privatized) Medicare was and remains better – it is cheaper and has greater access to care.

Single payer – improved Medicare for All – is the right solution.

http://healthjusticemonitor.org…

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Summary: Evidence from around the world and in the US confirms the value of primary care for health care access, quality, and outcomes. Yet through inadequate financing we cause its shrinkage and stresses over time. Single payer would remedy this critical imbalance.

Is Primary Care in Critical Condition?, Medical Economics, October 28, 2022, by Timothy Kelley

In 2006 the American College of Physicians (ACP) declared that primary care, “the backbone of the nation’s healthcare system, is at grave risk of collapse.” That year, in a landmark New England Journal of Medicine article, Thomas Bodenheimer, M.D., M.P.H., a professor at the University of California, San Francisco (UCSF) and founding director of its Center for Excellence in Primary Care, identified “a confluence of factors that could spell disaster.” Patients are increasingly dissatisfied with their care, he wrote, and primary care physicians are unhappy with their jobs. “The quality of care is uneven; reimbursement is inadequate; and fewer and fewer U.S. medical students are choosing to enter the field,” says the Bodenheimer jeremiad.

Other countries seem to get it even if the U.S. doesn’t. Study after study has shown that other wealthy countries outperform the U.S. on almost any healthcare metric you might imagine while devoting a far smaller share of their gross domestic product to healthcare. One explanation: They put more emphasis on primary care.

With an extra medical assistant on the core team working as a scribe, says Bodenheimer, physicians can see more patients because they’re relieved of many of the documentation tasks that overwhelm their days and that they often take home to work on after a long workday is over. The nonphysician members of interprofessional teams, he says, can save physicians even more time by seeing some patients themselves “if you let them do what they’re capable of doing,” he says. Some studies have shown that pharmacists can do a better job of taking care of people with diabetes than physicians and that physical therapists can do the same for people with musculoskeletal problems, says Bodenheimer.

However, recent innovations such as the accountable care organization (ACOs) and the patient-centered medical home (PCMH) have failed to transform primary care as many had envisioned …. PCMHs, in particular, get low marks from Bodenheimer: “They’ve been pretty much a flop.”

Bodenheimer notes that annual U.S. healthcare expenditures totaled more than $4 trillion in 2020, with just 5% of that spending going to primary care compared with 12% in European countries. “Primary care really should get 10% of the healthcare dollar rather than 5%,” he says. “If we do that, we’ll have enough money to hire the people — the nurses and pharmacists and physical therapists, for example — to be on teams that can help the physicians take care of their overly large panels and make life a lot better for the physician. And that would attract more medical students to go into primary care and could reverse the whole downward trend.”

So there it is. Just move $200 billion around, and you’ll get many more physicians eager to embrace what is arguably U.S. healthcare’s most crucial, most problematic — and potentially most rewarding — challenge.

Comment:

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

There is a consensus that we should be doing better with primary care if we want to achieve our goal of higher quality care for everyone and better outcomes. International evidence supports this. And within the US more primary care translates to lower mortality.

However, our health care infrastructure is set up with models catering more to the business of medicine rather than to the medical care of the patients.

Tom Bodenheimer suggests that the answer is in spending health care dollars more appropriately on the primary care team designed to provide optimal care rather than on service models more appropriate for building income and wealth.

He has been distributing his message for some time now. Isn’t it time that all of us become more aggressive in applying it?

Single payer would permit us to support and grow primary care through appropriate financial support and reward for this fundamental pillar of health care.

http://healthjusticemonitor.org…

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