UnitedHealth Group Earnings: What They Suggest about Patient Access to Care, American Hospital Association, July 15, 2021, by Rick Pollack, AHA President and CEO

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Today UnitedHealth Group announced a jaw-dropping $6 billion in earnings in a single quarter. But not enough has been said about a big contributor to these profits: not paying for health care services. During the same quarter last year the company noted its $9.2 billion in profit was due in part to “broad-based deferral of care.” What that means in real-life: profit was earned off missed childhood vaccinations, reduced access to opioid misuse treatment and avoided emergency care for cardiac arrest. But even this isn’t the full story.

Throughout the course of the pandemic, United pursued a number of changes to its policies to further restrict patients’ coverage. United didn’t just profit from avoided care, it actively sought to scale back what care it would pay for at the same time.

• Specialty Pharmacy Services: In many parts of the country, United has been rolling out coverage restrictions that no longer permit patients to access specialty pharmacy therapies in a hospital outpatient department even if that is where their doctors practice.
• Surgeries: United will no longer cover a large number of surgical procedures performed in hospital outpatient departments.
• Lab and Radiology Services: United has announced plans to restrict coverage for many lab and radiology services provided by hospitals and outpatient departments.
• Primary Care and Specialty Services:  United, the nation’s largest employer of physicians, says it will begin restricting coverage for most physician evaluation and management services provided in hospital outpatient departments, including provider-based clinics.

United routinely rolls out these coverage restrictions throughout the year, meaning that enrollees purchase their health plans under one set of rules only to later learn that their providers and cost-sharing responsibilities have changed.

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Our top private health insurer is rolling in cash. And it’s reducing coverage, Los Angeles Times, July 20, 2021, by David Lazarus, Business Correspondent

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UnitedHealth Group, parent of UnitedHealthcare, the country’s largest private health insurer, earned $15.4 billion in profit last year. It took in more than $9 billion in profit during the first half of this year.

So what does a well-heeled insurer do amid such a windfall? It seeks to reduce people’s coverage, of course. …

The insurer won’t cover nonemergency treatment at non-network facilities outside a policyholder’s service area, which is defined as your state of residence and adjoining states.

This change mainly affects UnitedHealthcare members who want to travel to residential treatment facilities, rehabilitation clinics and other nonhospital healthcare providers.

Which is to say, if you’re a UnitedHealthcare member and you need rehab for any reason, you’d better stay in network and you’d better stick close to home. Otherwise, you’ll be footing the bill yourself. …

Coverage networks might save insurers a few bucks, but they’re not in the best interest of patients, who should be free to seek the best possible care from the best-qualified doctor or hospital.

Nor, for that matter, should people’s coverage be tethered to their jobs. Lose your job, lose your health insurance — what the hell kind of system is that?

We know from the experience of other developed countries that [insurance risk management] is done most effectively by creating a single risk pool comprising the entire population, and then having a single government program handle all claims consistently, fairly and transparently.

Studies have shown that the taxes paid into such a single-payer system — Medicare for all, say — would be less than the premiums, copays and deductibles that now constitute most out-of-pocket medical expenses for Americans.

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Comment:

By Don McCanne, M.D.

UnitedHealth Group has demonstrated that it has mastered its ability to increase profits by not paying for health care services. They are serving their corporate shareholders at a cost to their customers, aka patients.

Contrast this private insurer function to what the role of a publicly financed and publicly administered insurer would be. Passive insurer shareholders and profits would play no role. The goal would be to pay for necessary health care services, not avoid them.

Even David Lazarus – the Business Correspondent for the LA Times – sees what UnitedHealth Group does and in response sings the praises of single payer.

Based on Rick Pollack’s comments, the American Hospital Association should be a valuable team member in our efforts to achieve health care justice for all.

http://healthjusticemonitor.org…

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Hospital Prices Must Now Be Transparent. For Many Consumers, They’re Still Anyone’s Guess, KHN, July 2, 2021, by Julie Appleby

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The Health 202: Biden Says He’ll Enforce Trump-era Rules Requiring Hospitals to Post their Prices, Washington Post, July 12, 2021, by Alexandra Ellerback with Paige Winfield Cunningham

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“Ultimately, the unanswered question is whether price transparency will lead to overall lower prices.” – Appleby

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Comment:

By Hannah Leibson and Allison K. Hoffman, J.D.

Efforts to increase price transparency in health care have become a policy obsession of academics and policymakers alike, despite little evidence it provides any benefit to patients.

On January 1, 2021, the Trump Administration finalized the Transparency in Coverage final rule and drank the Kool-Aid. This rule requires hospitals to disclose publicly what they charge uninsured patients for items and services as well as the rates they negotiate with insurers. The Administration hoped that the rule would force insurers to compete with each for lower priced items and services, driving down the overall cost of health care.

The rule’s roll out has not gone as anticipated. Up to 83 percent of hospitals are not fully complying with the rule. For hospitals that have disclosed prices, they are often hidden deep on their websites – shielded from patients’ view. This week, the Biden Administration urged the Department of Health and Human Services to boost their enforcement of the rule.

But as Appleby and Ellerback have highlighted, the rule overlooks a key reality. Even when consumers have greater access to information, they generally do not use it to shop medical care as policymakers imagine. Empirical research has shown that consumers are unwilling to price compare, and even when they do, it does not drive their choices.

Instead, the role of referring physicians plays a far greater role in patient choice and decisionmaking. This is unsurprising. Price data says little about quality, which is just as or more important to people, and assessing quality and making price/quality tradeoffs is a herculean task for most of us. Various studies have shown that giving people price information, even in a fairly digestible form and even with regard to reasonably fungible services, does little. Consider just two:

One study examined the consumer choices of people with easy access to price shopping for lower-leg MRIs, where quality does not vary wildly. The researchers concluded that only 14 percent of consumers went to the lowest-cost MRI provider within thirty minutes of their home, often bypassing six lower-priced providers between their home and location of their chosen scan. They went to the location their doctor suggested.

Another recent study assessed whether consumers changed their behavior after a transparency tool was introduced in the California Public Employees’ Retirement System (CalPERS). The interface showed consumers the prices for lab tests, office visits, and imaging services. The researchers found that only 12 percent of people used the interface in the first fifteen months after it was introduced, and most did not choose a lower-priced service after use.

Given this reality, it is likely that the Transparency in Coverage final rule will have a trivial effect on lowering the overall cost of health care through consumer-driven behavior. Regulations like the Transparency in Coverage rule are rooted in a fallacy that when we make the market work better, patients can navigate in the front seat. And they perpetuate that fallacy.

More direct price regulation or central budgeting, like what occurs under the Medicare program, is the only way to rein in escalating prices going forward. Without such measures, we will continue to face rapidly rising health care costs.

http://healthjusticemonitor.org…

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When Is Tinkering with Safety Net Programs Harmful to Beneficiaries?, National Bureau of Economic Research, July 2021, by Jeffrey Clemens & Michael J. Wither

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Abstract

Interactions between redistributive policies can confront low-income households with complicated choices. We study one such interaction, namely the relationship between Medicaid eligibility thresholds and the minimum wage. A minimum wage increase reduces the number of hours a low-skilled individual can work while retaining Medicaid eligibility. We show that the empirical and welfare implications of this interaction can depend crucially on the relevance of labor market frictions. Absent frictions, affected workers may maintain Medicaid eligibility through small reductions in hours of work. With frictions, affected workers may lose Medicaid eligibility unless they leave their initial job. Empirically, we find that workers facing this scenario became less likely to participate in Medicaid, less likely to work, and more likely to spend time looking for new jobs, including search while employed. The observed outcomes suggest that low-skilled workers face substantial labor market frictions. Because adjustment is costly, tinkering with safety net program parameters that determine the location of program eligibility notches can be harmful to beneficiaries.

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Comment:

By Don McCanne. M.D.

Who should be deprived of health care? Likely most would agree that nobody should, and, ideally, everyone should agree.

With our dysfunctional, fragmented system of financing health care, a special funding program must exist to cover those who do not have the resources to pay for health care, thus we established Medicaid. But what threshold do we establish for eligibility? Is it all-or-none financing? Does minor tinkering invoke all-or-none decisions?

In the real-world example presented, an increase in minimum wage reduced the number of hours that a low-skilled worker could work and still maintain eligibility for Medicaid. The result was both less employment and less Medicaid. Such all-or-none decisions could be disastrous for the health care or income of an affected low-wage worker. Last year, evidence from Arkansas showed that a work requirement decreased Medicaid enrollment without increasing work.

Suppose we had a single payer Medicare for All system. Everyone would automatically have financial barriers removed from medical care. There would be no need to establish a special medical welfare program such as Medicaid. Controlling costs for the indigent would be accomplished by funding the entire system though progressive taxes. That way, everyone could have health care in a system that is affordable for each of us. The complexity and injustices of segregating patients into a Medicaid program would no longer be necessary.

http://healthjusticemonitor.org…

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