Summary: UnitedHealth proposes a $13 billion acquisition of other insurers’ billing data, which they swear they won’t use for business purposes. Hospitals farm out unpaid patient bills to high interest lenders owned by private equity firms and banks. Once again, untrammeled profit-seeking hurts patients.
What Will UnitedHealth’s New Trove of Claims Data Mean for Consumers?, ProPublica, November 16, 2022, by Cezary Podkul
Data from Change [a medical claims processing company] could yield “improved medical policy and benefit design” for UnitedHealthcare, the UnitedHealth deal team wrote in a memo. The data could also help UnitedHealthcare track the pricing of medical procedures and expand insurance underwriting. There was just one problem: Using Change’s data in some of these ways could raise “antitrust concerns,” according to an internal UnitedHealth document. …
UnitedHealth announced plans in January 2021 to buy Change for $13 billion. …
[At antitrust trial, the judge accepted] UnitedHealth’s claims that the company would never do such a thing. …
“it’s clear that they are finding ways to use data to make money,” Prof. Fuse Brown said. That applies to the Change Healthcare deal, she said: “You have to wonder: What is the value proposition? Why is United spending so much money to buy this company?”…
Wall Street seems to have viewed UnitedHealth’s recent ambitions through that prism. Since the merger was first announced on Jan. 6, 2021, UnitedHealth’s stock has far outpaced the broader stock market, rising 46% vs. 17% for the health care sector and 7% for the S&P 500. JPMorgan Chase analysts predicted in a research note that insights from Change’s data will benefit UnitedHealth’s insurance arm as well as Optum’s other customers. Analysts at Deutsche Bank … called UnitedHealth’s courtroom victory a “positive leading indicator” for more consolidation in the health care sector.
How Banks and Private Equity Cash In When Patients Can’t Pay Their Medical Bills, KHN, November 17, 2022, by Noam N. Levey and Aneri Pattani
Patients at North Carolina-based Atrium Health get what looks like an enticing pitch when they go to the nonprofit hospital system’s website: a payment plan from lender AccessOne. The plans offer “easy ways to make monthly payments” on medical bills, the website says. You don’t need good credit to get a loan. Everyone is approved. Nothing is reported to credit agencies….
As Americans are overwhelmed with medical bills, patient financing is now a multibillion-dollar business, with private equity and big banks lined up to cash in when patients and their families can’t pay for care. By one estimate from research firm IBISWorld, profit margins top 29% in the patient financing industry, seven times what is considered a solid hospital margin. …
Patients enrolled in a CareCredit card from Synchrony, the nation’s leading medical lender, face a nearly 27% interest rate if they fail to pay off their loan during a zero-interest promotional period. The high rate hits about 1 in 5 borrowers, according to the company….
In February 2020, records show, just 9% of UNC patients in an AccessOne plan were in a loan with the highest interest rate of 13%. Two years later, 46% were in such a plan. Overall, at any given time more than 100,000 UNC Health patients finance through AccessOne.
Comment:
By Jim Kahn, M.D., M.P.H.
As I sit at my son’s house in Colorado, sated by a delicious Thanksgiving feast, I’m extremely thankful for a loving and healthy family, and the recent improvement in US political prospects.
The health news that caught my attention elicited a more ambivalent thought: US healthcare is a playground for corporations, rife with opportunities to exercise business prowess – often at the expense of beneficiaries.
What should a health care system do? IMO: offer easy access to high quality care, with no financial barriers or burdens. Profits must not displace care. We are, of course, falling far short of this ideal. The news provides two clear examples.
UnitedHealth – the largest private insurer, with 15% of the national market – is trying to purchase the company that handles billing (claims processing) for many insurers. Why would they spend $13 billion for this? Company analysts told the CEO that they could use the claims data to track provider prices and strengthen underwriting (predicting medical “losses”). This raised anti-trust concerns and led to a trial, in which UH promised not to do the very actions used to justify the acquisition. They won; the government is appealing.
What’s lost in these deliberations is that the aim of anti-trust regulation – helping consumers – is futile when the very fact of a for-profit insurance industry results in severe harm to patients.
The other story is about hospital tactics to offload management of patient debt onto credit companies owned by private equity firms. One large company structures interest rates to offer 0% for debtors paying the highest amounts most consistently, and 13% for those who can’t accomplish that. Which means that the least financially able pay extra by one-third, $2,500 in interest on top of a $7,000 original debt. Some lenders charge more than 25% if payments are missed. This loansharking (that’s what it is) exacerbates the underlying problem of pervasive medical debt. And the care credit business generates 29% profits.
I’ll reserve my deepest thanks for the day that the US follows the example of dozens of other countries which provide universal comprehensive care with no profit-taking, saving money and lives.
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