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The Synergy of Clinical and Social Care in the US

The Synergy of Clinical and Social Care in the US

Eric Reinhart, a thoughtful commentator on the need for patient-oriented transformation of our health care system, now broadens his (and our) view to the critical need to also address fundamental social-economic needs.

Money as Medicine – Clinicism, Cash Transfers, and the Political-Economic Determinants of Health, New England Journal of Medicine, April 10, 2024, by Eric Reinhart

[HJM bolding]

Clinicism is the reduction of health to individualistic biomedical paradigms that overemphasize clinical perspectives and interventions (even though clinical care is estimated to account for only 10 to 20% of modifiable factors shaping health in the United States) while normalizing existing social conditions and neglecting to prioritize preventive policies that target other key drivers of health and disease. These include, for example, policies affecting labor and environmental conditions, poverty and associated housing and food insecurity, social isolation, and public infrastructures for community-building social care involving supportive interpersonal relationships. Despite its limitations, clinicism pervades US public health efforts, which are primarily led by physicians more familiar with biologic and clinical sciences than with political economy and associated social services. Many scholars, recognizing this shortcoming, have called for greater attention to social determinants of health, including research on structural violence and the causes of the causes, commercial determinants, and “capitalogenesis” of disease. Such paradigms, however, generally remain descriptive academic projects that have not been translated into prescriptive policy action and the political organizing such action requires.

One reason for this lack of application is that scholars, university and health systems administrators, and public health officials face incentives, imposed by philanthropic funders and politicians, to abstain from foregrounding the political-economic determinants of health or insisting on specific policies to address economic inequality. In many cases, acting otherwise would entail challenging policies that have been embraced since the 1980s by both Republican and Democratic administrations that have overseen historic increases in inequality while defunding public support systems, empowering in their place private businesses or charitable organizations dependent on wealthy benefactors, and fueling the growth of an inefficient health care industry providing inequitable and limited benefits.

Though the Covid-19 pandemic laid bare the consequences on long-standing U.S. health policy norms and partisanship, it also temporarily disrupted the status quo by provoking overwhelmingly popular emergency measures that illustrated both the potential of supportive social policies to improve health and the necessity of approaching health, safety, and economic policy as intertwined. One early pandemic policy in particular, cash transfers, demonstrated the promise of a policy tool that could enable health scholars, clinicians, administrators, and public health officials to collectively overcome undue clinicism and expand health policy beyond just health care, rebuild trust in public health institutions, and directly address the political-economic determinants of health.

Beyond a staggering global death toll, one of the most concerning consequences of failed pandemic control was the rapid expansion of poverty. In 2021 alone, after three prepandemic years of annual reductions in the global poverty rate, an estimated 115 million people – nearly all in formerly colonized countries – were pushed into extreme poverty (i.e., subsisting on less than $2.15 per day), which brought the global population living in extreme poverty to nearly 700 million people. But in the United States, where estimates suggest that poverty was the fourth-leading risk factor for death, the pandemic led to sharp reductions in poverty owing to the expansion of eligibility for public aid in addition to emergency cash disbursements to large swaths of the population. Federal household subsidies in 2021 – nearly $570 billion in pandemic stimulus checks plus improved unemployment insurance and child tax credits – led to a historic 50% reduction in the child poverty rate and a 15% decrease in overall poverty.

The changes to the child tax credit that contributed to this shift were particularly effective – and instructive for health policy. Suddenly, the lowest-income families were receiving the same government benefits afforded to middle-class families, bureaucratic obstacles were largely eliminated, and more cash was directed to the households and local economies that most needed it. For many of the 40 million U.S. residents living in poverty, this provision of public support in the form of basic income didn’t merely reduce poverty; it had a dramatic stabilizing effect and substantially improved their health and experience of everyday life.

Financial insecurity is a major driver behind cycles of poor mental health, disease, violence, crime, and incarceration – all of which, in turn, further entrench poverty, destabilize families, undercut public health and childhood education, and constrain people’s life opportunities. Historically, most U.S. policymakers have ignored this reality, constructing one of the most insufficient, inefficient, and onerous welfare systems among wealthy countries, exacerbating instability for people living in poverty and making receipt of public support unnecessarily restrictive, time-consuming, unpredictable, and stigmatizing. This failure has wide ranging consequences for the country as a whole, affecting everything from public health to economic growth and the declining competitiveness of the U.S. workforce.

Guaranteed basic income, by providing financial predictability to people and families who have been deprived of it, has the potential to mitigate much of the economic, medical, social, and psychological harm that inadequate U.S. welfare programs alongside tax breaks for the rich have enforced. People who care about addressing poverty should stop talking about basic income as simply an antipoverty policy. Investments in such programs also return major benefits for shared public health, public safety, and collective economic prosperity – population-wide gains that improve quality of life for everyone. We can’t effectively build any of them without building all three.

Many studies have shown that cash-transfer programs lead to substantial reductions in homicide, assault, intimate partner violence, property crimes, recidivism, and overdose deaths.

As the popularity of federal initiatives such as Social Security, child tax credits, earned income tax credits, and unemployment insurance reflects, the United States has a long history and widespread support for using cash transfers to mitigate and prevent financial hardship. The truth is that cash-transfer programs don’t represent a radical shift from conventional US policy; they’re a continuation and expansion of what have long been America’s most effective and popular government programs. What has often been missing from public perception of such programs is recognition of their importance not only for their direct beneficiaries, but also for everyone else.

Delivering effective clinical care and ensuring robust public systems for social care are interdependent and synergistic projects. It is difficult to care for patients as effectively as possible without addressing root political-economic causes of sickness and death, from poverty, malnutrition, homelessness, and mass incarceration to health care exclusion. In the United States, medical institutions have often neglected this reality and sometimes even leveraged their political influence to oppose investments in social care that they saw as threats to their economic interests. This attitude has undermined both public health and the medical profession, which is now facing a related crisis of demoralization and attrition. For the sake of the profession and our patients, it is time to reassert a concept of medicine that goes beyond the clinic alone to advance supportive social policies without which our work cannot succeed.

Comment:

By Don McCanne, M.D.

At Health Justice Monitor we have previously visited the astute writing of Eric Reinhart, once in JAMA when he explained why physicians need to become a progressive force in transforming our health care system and again when he explained in the New York Times how physicians are being demoralized by forces primarily interested in extracting profits from the health care system.

We now revisit his writing in the New England Journal of Medicine wherein he makes the very important political-social-economic case that the health of individuals and society is not just the result of mere “clinicsim” or the overemphasis of clinical perspectives and interventions, but rather should be the result of delivering effective clinical care synergistically with robust public systems for social care, with guaranteed basic income and other appropriate, proven cash-transfer programs that result in major benefits for shared public health, public safety, and collective economic prosperity – population-wide gains that improve quality of life for everyone.

We are spending a lot of money on health care but we are falling terribly short. So what lessons can we learn by applying this “social” approach of Reinhart?

We should include everyone.

It should be affordable for each individual.

The services should be comprehensive and accessible.

The stewards should design it to provide needed services for the people, not profits for investors.

Essentially it would be a social program designed by the people’s stewards to serve all of the people.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Labor Forum with Dianne Mathiowetz

Interview with Jonathan Michels and Will Cox

WRFG Atlanta, May 8, 2024 … (interview starts at 5:37)

PNHP national board member Jonathan Michels and Will Cox discuss their recent piece in Jacobin, “The UAW’s 2028 National Strike Should Center Medicare for All.”

For Americans who receive health coverage through their work, Michels and Cox issue this stark reminder:

“Your employer—your boss—has the power of life and death over you or your family. When you remove those things [under single payer], think about your ability to strike, to stand up, and to have a voice in the workplace.”

https://www.mixcloud.com…

News Flash: Other Wealthy Nations Have Better Health Coverage Than U.S.

Aaron Carroll, a prominent health policy analyst, blogs that “All other high-income countries have … a system of universal coverage” and discusses how they do it. Excellent start. We note the key shared features that smooth system functioning for patients and providers.

Rethinking Health Care from a Global Perspective: Looking Abroad, The Commonwealth Fund Blog, May 2, 2024, by Aaron Carroll

All other high-income countries have adopted a universal health coverage system, and many middle- and low-income countries are also moving in this direction.

The American health care system is broken. Life expectancy is dropping, maternal mortality is on the rise, disparities abound, and it costs way, way too much. But when we discuss fixing it, the debate is a pendulum swinging between two extremes: maintaining the status quo and adopting a single-payer system. But what if we’re asking the wrong questions? What if the answers lie not in the extremes but in the nuanced experiences of other countries?

At its core, the concept of insurance is a social contract. We pool our resources so that no individual must bear the brunt of an unexpected health crisis alone. This serves two goals: people do not avoid care because of costs, and unexpected illness doesn’t lead to financial ruin.

The Affordable Care Act expanded health coverage to millions of Americans in the U.S., but 26 million remain uninsured. All other high-income countries have adopted a system of universal coverage, and many middle- and low-income countries are also moving in this direction. In the past few years, I’ve had the privilege of visiting some while on a Commonwealth Fund/AcademyHealth study tour. Let’s look at how they achieve their goals.

[HJM bolding]

Switzerland entirely eliminates government entitlement programs like Medicare and Medicaid; everyone is on private insurance from birth to death. Plans are tightly regulated and decoupled from employment. Out-of-pocket expenses are relatively high to combat the moral hazard (i.e., people are more likely to spend an insurance company’s money than their own), but the system ensures everyone has some coverage. The private insurance market is highly competitive, with more than 60 insurers offering basic health insurance. Insurers cannot earn profits from basic insurance but can offer supplemental insurance for additional services and amenities….

Canada has a single-payer system. The country’s Medicare system is funded mainly through general taxation, and the federal government sets national standards for health care in all provinces. The provincial and territorial governments, however, are responsible for managing, organizing, and delivering health care services for residents. Medicare covers all medically necessary services provided by hospitals, physicians, and dentists but does not include prescription drugs, eye care, or dentistry for adults.

Australia’s system functions much like Canada’s if people stay within the public delivery system. However, it differs from Canada in that patients can opt for a private system; doing so incurs costs. This dual approach allows people to choose better access based on their needs and willingness to pay more. The public system, also known as Medicare, covers most of the costs of hospital and physician services and some preventive and community health services. It’s funded by general taxation, a specific income-based tax, and copayments by those seeking care. About one-third of Australians have private health insurance. Such insurance can provide access to private hospitals and specialists and cover services not included in Medicare, such as dental care, optical care, and physiotherapy.

New Zealand’s system is like Australia’s but with unique features, such as a stronger focus on community-based care and public health initiatives. This approach aims to reduce the burden on hospitals and provide more holistic care. The public system offers universal coverage for a range of services, including hospital care, primary care, prescription drugs, mental health care, and disability support services. The system is funded mainly by general taxation and copayments. A private system also plays a supplementary role by offering faster access to elective surgery and specialist consultations, as well as covering services not funded by the public system, like dental care and cosmetic surgery. About one-third of New Zealanders have private health insurance.

In France, the insurance provided by the statutory system sets a good baseline for all, but people are encouraged to spend more if they wish. The public system, known as Social Security, covers most of the costs for hospitals, physicians, long-term care, and prescription drugs. The system is funded primarily by payroll taxes, a national income tax, and tax levies on specific industries and products. The government sets the national health strategy and allocates budgeted expenditures to regional health agencies responsible for planning and service delivery. Patients are responsible for coinsurance, copayments, and balance bills for physician charges that exceed covered fees. However, almost all citizens have supplemental insurance to help with these out-of-pocket costs and dental, hearing, and vision care. Private insurers provide this supplemental insurance, most of them nonprofit.

In England, the National Health Service (NHS) provides health care to all residents, covering hospital, physician, and mental health care without any cost at the point of care. The NHS is funded mainly through general taxation, and the government sets a global budget for health spending. This global budget allocates resources to health services and trusts responsible for local planning and care delivery. There are trade-offs in terms of wait times and sometimes even quality. Still, this approach effectively removes financial barriers to care and eliminates any risk of health care–related bankruptcies.

Comment:

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

Dr. Carroll gets it right – other wealthy nations use predominantly public (or not-for-profit private) systems to assure universal “basic” medical coverage, with limited and variable supplemental roles for private insurance.

Here are a few additional features, regarding the patient and provider experience:

Patients:

  • The “basic” insurance is quite comprehensive and standard. Thus the population broadly has high quality consistent coverage. Voluntary private insurance spending is optional and at the margin, just <1% to 13% of total health spending.
  • Deductibles are imposed in only 14% of wealthy nations, and only a few hundred dollars – FAR less than the thousands in the US. In 90% of these nations, there is either no cost-sharing all, or exemptions for poorer individuals and annual caps. Medical bankruptcy is not a thing.
  • In the vast majority of wealthy nations, patients have free choice of physicians. No restrictive networks.

Providers:

  • Providers know that patient care is broadly and consistently covered, using standard payment rates. This simplifies their lives – no long hours on billing and prior authorizations. No moral hazard.
  • Providers use a standard drug formulary, and standard or at least well-integrated electronic health records. Again, simplicity … enhancing their clinical focus.
  • Two-thirds of these nations use global budgets for the system (and for hospitals). Thus, no pressure to manipulate data to justify higher capitation rates or to stint on care.

Who wouldn’t want to emulate the other wealthy nations’ successful approaches? Oh, yeah, the profiteers … insurers, PBMs, private equity, and pharma. We must wrest control of our health care, following the model amply proven around the world.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Philip R. Lee’s 1986 Call for National Health Insurance

A UCSF and US titan of health policy, Philip R. Lee, nearly 40 years ago described our health insurance options, and wisely preferred national health insurance. Our country chose differently, relying heavily on private insurers and incremental fixes that missed the opportunity for efficiency and heath justice. We must fight for Dr. Lee’s choice.

This Date in UCSF History: National Health Insurance Ahead?, Synapse, UCSF Student Voices, April 23, 2024

(Originally authored by Dr. Philip R. Lee — a UCSF professor of social medicine and director of the Institute for Health Policy Studies — and published in Synapse on April 24, 1986.)

Twenty years ago, states throughout the country began to implement federal legislation (Title XIX, Social Security Act) establishing a national program for medical care for the poor (Medicaid). In the same year, 1966, the federal Medicare program began providing hospital and medical insurance for the elderly.

With these two public programs, the public sector began to fill the major gap in private health insurance.

Private health insurance was largely provided on a group basis, through employment, with employers paying the bulk of premiums.

In the 1960s and early 1970s the idea that access to health care was a merit good or a right of citizenship was widespread.

It seemed only a matter of time before the remaining gaps would be filled by universal health insurance, albeit with a mixture of public and private payment mechanisms.

In the 1970s and early 1980s, as costs of health care rose rapidly and as efforts to contain costs seemed ineffective, the idea took hold that national health insurance was impossible and that health care was not a merit good.

Instead, many advocated that health care should be treated like other goods and services, and that price competition and the marketplace should be the primary approach to resolving the problems of cost, access and quality.

Policies established by Congress and the Reagan administration have strongly supported this approach.

Many states, including California, have adopted pro-competitive policies. The results of the recent policy changes have been mixed.

The rate of increase in health care costs has slowed, hospital admissions have declined, length of hospital stay has been shortened and hospital occupancy has been reduced. All this seems to be for the better, but patients have found themselves discharged from hospitals “sicker and quicker.”

Posthospital services, described as a “no-care zone” by UCSF Professor Carroll Estes, have been unable to cope adequately with the changes.

The number of people who are uninsured or underinsured has risen rapidly and local governments, such as San Francisco County, have found themselves obliged to care for increasing numbers of sick, disabled and poor.

Three future scenarios seem possible given the current environment:

  • Continued reliance on price competition and the marketplace with the evolution of a “three-tiered” system of care consisting of fee for service, HMOs and public sector.
  • A variety of incremental strategies to fill the gaps in coverage at the state level through mandated private insurance coverage, state funds to cover the uninsured and an expansion of Medicaid.
  • Publicly funded national health insurance, along the lines of the Canadian model.

Although the odds are against national health insurance, this proposal would provide the most equitable solution to health care access with effective means to control costs while assuring freedom of choice for consumers and providers.

Personally, I believe it is the preferred solution.

Comment:

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

Philip Lee was an icon of health care justice, perhaps most noted for his role in implementing Medicare. Particularly noble was his use of Medicare funding as a lever to eliminate segregation in the nation’s hospitals and, by extension, throughout the medical system. Over his career, he remained a champion of health equity and justice for all. Thus, his commentary authored 38 years ago comes as no surprise to us.

Let’s review the challenge he described from today’s perspective, nearly four decades later. Of the three scenarios Dr. Lee described, the US followed a mix of free market and incremental changes; not the national health insurance option he preferred. Dr. Lee was prescient. As a result, we accumulated decades of fraught experience – high costs, low health care access, and high mortality.

Dr. Lee’s “publicly funded national health insurance, along the lines of the Canadian model” has proven to be quite effective in other wealthy nations. We should have chosen the option that, as he describes, would combine equity, choice, and cost control. Health justice for all, efficiently.

Clearly the market approach and mandated private insurance succeeded in creating wealth for health care investors but was certainly ineffective in ensuring affordable, comprehensive care for everyone.

Philip Lee bestowed on us this powerful message of health justice. We should act on his advice. It’s not too late.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Cutting Back Medicare & Medicaid Would Kill Tens of Thousands

Analysis by a team based at Yale University finds that proposals to delay Medicare eligibility, undo COVID Medicaid growth, and impose work requirements on Medicaid would result in an estimated 25,000 – 33,000 additional deaths in coming years, as well as increasing morbidity for hundreds of thousands.

Study: Proposed changes to Medicare, Medicaid could cost thousands of lives, Yale News, April 22, 2024, by Mallory Locklear

Proposed changes to the United States’ Medicare and Medicaid programs could lead to thousands of additional deaths each year, a new Yale study reveals.

Recent proposals to reduce program costs include a recommendation to raise the eligibility age for Medicare from 65 to 67 – put forward by a 2022 report from the House of Representatives’ Republican Study Committee – and a proposed work requirement for Medicaid coverage – a recurring Congressional consideration during federal budget negotiations.

While neither of those have yet been adopted, one major change to Medicaid is already underway: A provision authorized at the start of the COVID-19 pandemic that required states to keep existing Medicaid recipients enrolled in the program expired last year. Since then, states have begun disenrolling Medicaid recipients who no longer qualify or are unable to complete the renewal process.

Such changes will drive up the number of uninsured people in the U.S., said Alison Galvani, the Burnett and Stender Families Professor of Epidemiology (Microbial Diseases) at Yale School of Public Health (YSPH) and senior author of the study. The study was published April 22 in the Proceedings of the National Academy of Sciences.

The Congressional Budget Office has assessed two strategies for raising the eligibility age over time – by two months or three months each year until the eligibility age reaches 67. According to the new study, the approaches would result in an additional 17,244 deaths or 25,847 deaths respectively during the transition.

A separate proposal to institute work requirements for Medicaid recipients, meanwhile, would lead to an additional 613 deaths per year among U.S. adults, the researchers report. Further, the ending of continuous Medicaid enrollment in 2023 could lead to 7,900 additional deaths each year.

They found 456,966 people with diabetes under the age of 65 could lose access to health care following the end of continuous Medicaid enrollment, and 325,613 seniors would lose care if the Medicare age were raised.

“Working in the field of public health, it can be frustrating to see policymakers propose strategies that ignore evidence-based solutions capable of saving lives, boosting prosperity, and reducing health care costs,” said Galvani.

In a previous study, Galvani and her colleagues found that a single-payer universal health care model would save more than 68,000 lives and $450 billion annually, while the current proposal to raise Medicare eligibility age would save a maximum of $25.5 billion across five years and cost thousands of lives.

“It’s disheartening to see people in positions of power who have access to all of this information argue that retractions in health care are for the benefit of the country,” she said. “If policymakers want to save lives and costs, our analyses have shown single-payer universal health care is the solution.”

Comment:

By Don McCanne, M.D.

No comment need be appended to these excerpts since Alison Galvani and her team have said it all. Ridiculous proposals that reduce health care and cost lives should be rejected, especially when we know that the single-payer universal health care model, structured properly, would save both lives and money. If only Congress and the President could get on our wavelength.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Medicare Advantage and Vertical Consolidation in Health Care

By Hayden Rooke-Ley
American Economic Liberties Project, April 30, 2024

A new wave of health care consolidation is underway. Health insurance and retail conglomerates are rapidly acquiring providers, from primary care practices and surgery centers to home-based and post-acute care. UnitedHealth Group (UnitedHealth), for example, is now the nation’s largest insurer and the largest employer of physicians. Humana is now the largest provider of “senior-based” primary care and in-home care. CVS Health, Walgreens, and Amazon, which have been aggressively consolidating the prescription drug supply chain, are now acquiring physician practices. And private equity investors—looking to consolidate industry segments and then sell to these conglomerates as an eventual exit—are accelerating these rollups.

With dominant market power, the new health care conglomerates can dictate which physicians patients can see, which medications are prescribed to them, and which insurance plans they enroll in. By acquiring medical practices, these corporate employers can shorten visit times, require more clinical coding and box-checking, and replace physicians with lower-cost clinicians. Meanwhile, by coordinating across lines of business, conglomerates like UnitedHealth can squeeze out independent practices and community pharmacies. They can also shuffle money between subsidiaries and use other financial tactics to skirt regulations and exploit payment loopholes, increasing health care costs.

This paper details the causes and costs of this new frontier of consolidation and offers a set of solutions to address it. In short, sweeping changes in health care financing policy are causing insurers and retailers to restructure as vertically integrated conglomerates. While technical, how the government pays providers and insurers fundamentally shapes the business strategies of health care companies. As the government continues to privatize Medicare and Medicaid, it is significantly overpaying insurance companies to administer benefits. With this excess capital, these insurers are acquiring providers, gaining control of key points in the delivery system that enable them to capture greater government payments and minimize spending on patient care. To take one prominent example, control over primary care clinicians allows these corporate owners to manipulate billing and coding practices to make patients appear sicker to the government, thereby increasing payments.

Part I of this paper explains how government policy over the last two decades has transformed health care financing. In an attempt to solve health care’s value problem— high spending and poor health outcomes—policymakers have steadily abandoned “fee- for-service” financing, in which medical providers are reimbursed for each service that a patient receives. Instead, public programs have increasingly adopted “capitation-based” financing. In this model, the government pays a fixed budget to a “risk-bearing entity”—an insurance company, hospital system, or group of physicians—to manage the total health care costs for a patient. The risk-bearing entity turns a profit if it keeps costs below the established budget, which is adjusted based on the perceived sickness of the population and metrics of care quality. In this paper, this policy agenda and its underlying ideological framework are referred to as health policy’s “Capitation Consensus.”

Medicare Advantage, the privatized version of Medicare that now covers more than half of Medicare beneficiaries, is the most prominent example of the Capitation Consensus. But this financing approach has spread across public health care programs: nearly all of Medicaid has moved to capitation-based financing, and Medicare’s prescription drug benefit, Part D, operates entirely on capitation. In the last decade, traditional Medicare— the historically fee-for-service model of Medicare—has been integrating versions of capitation through accountable care organizations and other value-based care models. Despite high hopes, the shift to capitation has yet to deliver on its primary objective of cost reduction. Most concerning is that Medicare Advantage now costs taxpayers anywhere from $75 billion to $140 billion annually in over-subsidization relative to traditional Medicare.

Part II of this paper explains how the Capitation Consensus is driving vertical consolidation. With excess capitation payments, Medicare Advantage insurance conglomerates are plunging capital into provider acquisitions, and retailers and private equity investors are following suit. As noted above, owning physician practices enables conglomerates to inflate the perceived disease burden of patients, thereby enhancing capitation-based payments from the government. Vertical consolidation also enables patient steering: conglomerates can push patients to receive care at their own provider subsidiaries. In doing so, these companies squeeze out local providers, such as independent physician practices and community pharmacies. Steering also generates “captive revenue,” which allows conglomerates to game federal regulations requiring that government payments are spent on patients, not profits. Further, these conglomerates use their insurance-side subsidiaries to pressure independent practices to sell to their provider-side subsidiaries, effectively “flipping” new patients to their own medical practices and insurance plans.

Turning to solutions, Part III of this paper argues for an alternative policy framework— aimed at a new “industrial policy” for health care—that would depart from the Capitation Consensus and center at least three principles. First, this approach would be suspicious of concentrated corporate power—whether horizontally or vertically combined—and would promote the autonomy and collective power of clinicians. Second, it would revive a legal and policy focus on the ownership structure and governance of health care providers, protecting the medical profession from corporate influence and minimizing financial strategies that increase prices and administrative costs. Third, a proactive health care industrial policy would emphasize the “supply side”: how policymakers, particularly in Medicare, can exercise greater control of public money and directly rationalize the production and allocation of health care capacity.

The paper offers two sets of policy recommendations. The first would directly combat the emerging forms of vertical consolidation that are fueled by the Capitation Consensus. The second set of policies offers alternatives to large-scale, investor-driven health care. These proposals are geared toward building robust health care infrastructure—owned by clinical providers and local communities—that meets growing care needs and is insulated from corporate consolidation.

full policy brief:
http://www.economicliberties.us…

A Doctor at Cigna Said Her Bosses Pressured Her to Review Patients’ Cases Too Quickly. Cigna Threatened to Fire Her.

Cigna tracks every minute that its staff doctors spend deciding whether to pay for health care. Dr. Debby Day said her bosses cared more about being fast than being right: “Deny, deny, deny. That’s how you hit your numbers,” Day said.

By Patrick Rucker and David Armstrong
ProPublica, co-published with The Capitol Forum, April 29, 2024

In late 2020, Dr. Debby Day said her bosses at Cigna gave her a stark warning. Work faster, or the company might fire her.

That was a problem for Day because she felt her work was too important to be rushed. She was a medical director for the health insurer, a physician with sweeping power to approve or reject requests to pay for critical care like life-saving drugs or complex surgeries.

She had been working at Cigna for nearly 15 years, reviewing cases that nurses had flagged for denial or were unsure about. At Cigna and other insurers, nurses can greenlight payments, but denials have such serious repercussions for patients that many states require that doctors make the final call. In more recent years, though, Day said that the Cigna nurses’ work was getting sloppy. Patient files that nurses working in the Philippines sent to her, she said, increasingly had errors that could lead to wrongful denials if they were not corrected.

Day was, in her own words, persnickety. If a nurse recommended denying coverage for a cancer patient or a sick baby, she wanted to be certain it was the right thing to do. So Day said she researched guidelines, read medical studies and scrutinized patient medical records to come to the best decision. This took time. She was clearing fewer cases than many of her peers.

Some of her colleagues quickly denied requests to keep pace, she said. All a Cigna doctor had to do was cut and paste the denial language that the nurse had prepared and quickly move on to the next case, Day said. This was so common, she and another former medical director said, that people inside Cigna had a term for these kinds of speedy decisions: “click and close.”

“Deny, deny, deny. That’s how you hit your numbers,” said Day, who worked for Cigna until the late spring of 2022. “If you take a breath or think about any of these cases, you’re going to fall behind.”

In a written response to questions, Cigna said its medical directors are not allowed to “rubber stamp” a nurse’s recommendation for denial. In all cases, the company wrote, it expects its doctors to “perform thorough, objective, independent and accurate reviews in accordance with our coverage policies.” The company said it was unaware of the use of the term “click and close” and that “such behavior would not be tolerated.”

During Day’s final years at Cigna, the company meticulously tracked the output of its medical directors on a monthly dashboard. Cigna shared this spreadsheet with more than 70 of its doctors, allowing them to compare their tally of cases with those of their peers. Day and two other former medical directors said the dashboard sent a message loud and clear: Cigna valued speed. (ProPublica and The Capitol Forum found these other former Cigna doctors independently; Day did not refer them.) One of Day’s managers in a written performance evaluation called the spreadsheet the “productivity dashboard.”

Measuring the speed and output of employees is common in many industries, from fast food to package delivery, but the use of these kinds of metrics in health care is controversial because the stakes are so high. It’s one thing if a rushed server forgets the fries with your burger. It’s another entirely if the pressure to act fast leads to wrongful denials of payment for vital care. Walgreens in 2022 dropped measurements of its pharmacists’ speed from their performance reviews after some alleged that practice could lead to dangerous mistakes.

ProPublica and The Capitol Forum examined Cigna’s productivity dashboards for medical directors from January and February 2022. These spreadsheets tallied the number of cases each medical director handled. Cigna gave each task a “handle time,” which the company said was the average amount of time it took its medical directors to issue a decision.

Day and others said the number was something different: the maximum amount of time they should spend on a case. Insurers often require approval in advance for expensive procedures or medicines, a process known as prior authorization. The early 2022 dashboards listed a handle time of four minutes for a prior authorization. The bulk of drug requests were to be decided in two to five minutes. Hospital discharge decisions were supposed to take four and a half minutes.

“Medical directors would message me and say, ‘We can’t do these cases in four minutes. Not if you want to do a good job,’” Day recalled.

As ProPublica and The Capitol Forum reported last year, Cigna built a computer program that allowed its medical directors to deny certain claims in bulk. The insurer’s doctors spent an average of just 1.2 seconds on each of those cases. Cigna at the time said the review system was created to speed up approval of claims for certain routine screenings; the company later posted a rebuttal to the story. A congressional committee and the Department of Labor launched inquiries into this Cigna program. A spokesperson for Rep. Cathy McMorris Rodgers, the chair of the congressional committee, said Rodgers continues to monitor the situation after Cigna shared some details about its process. The Labor Department is still examining such practices.

One figure on Cigna’s January and February 2022 dashboards was like a productivity score; the news organizations found that this number reflects the pace at which a medical director clears cases.

Cigna said it was incorrect to call that figure on its dashboard a productivity score and said its “view on productivity is defined by a range of factors beyond elements included in a single spreadsheet.” In addition, the company told the news organizations, “The copy of the dashboard that you have is inaccurate and secondary calculations made using its contents may also be inaccurate.” The news organizations asked what was inaccurate, but the company wouldn’t elaborate.

Nevertheless, Cigna said that because the dashboard created “inadvertent confusion” the company was “reassessing its use.”

Day was afraid to look at the dashboards. Anyone could see that by Cigna’s measures, she was a laggard. In January 2022, only a third of her peers had lower scores, and in February 2022, it was just a quarter.

In a recorded phone call and in emails with supervisors, Day complained that Cigna’s metrics failed to account for the quality of decisions. She said she and others asked higher-ups how often medical director decisions were overturned on appeal but nobody would say.

Day gave Cigna written permission to discuss her employment with ProPublica and The Capitol Forum.

The company described Day as a “disgruntled former employee” and said her “personal view is not an accurate representation of the work of the many medical directors and clinicians we employ.” Cigna added that prior authorization requests are often time-sensitive and the company’s “mission is to ensure our patients receive the right care as quickly as possible.”

Cigna rejected the assertions that denying cases was an effective way of working faster. “Even if medical directors were incentivized to review more claims — which they are not — it makes no sense to suggest that this incentivizes denials; it would be far quicker to approve all claims,” the company spokesperson wrote. The insurer said that denials take more time because they require a deeper review of clinical data, potentially requesting additional reviews by senior clinical directors, drafting denial letters and possibly phoning the treating physicians.

But another doctor who had worked at Cigna also said that denying a request for payment was far quicker than approving one since the nurses served up language that could be used to justify the denial. That former Cigna medical director said, “Sometimes you just have to accept the nurse and click and close if you had too much work.” (That doctor asked not to be named because they feared repercussions if they commented publicly.)

When Debby Day got her job at Cigna in November 2005, she thought it was a godsend.

She had been working for a health insurance startup in North Carolina. The charismatic founder of the company, Day said, had told her and a handful of principal executives to expect a windfall when the company went public. That never happened, and Day was eventually left with no job and no severance.

When a recruiter mentioned the medical director job at Cigna, it sounded like a perfect fit. The job was based in North Carolina, but Cigna didn’t mind that she was licensed in California, where she did her residency at Harbor-UCLA Medical Center. She was ready to leave the executive track, and the position allowed her to put her medical training to good use without the daily grind of working in a clinic.

The daughter of an ophthalmologist, Day had watched her father perform eye surgery when she was a child, and she found medicine fascinating. When Day started practicing, she learned quickly that while she enjoyed the intellectual challenges of medicine, the hands-on work of seeing patients drained her. As a medical director, she said, “I could really take care of patients without having to talk to them all day long.”

Cigna, like all health insurers, makes patients get approval in advance for certain treatments. Day became one of the people who reviewed these prior authorization requests, deciding what to cover and what to deny. Everyone Day worked with was under one roof in Raleigh, North Carolina. The office buzzed with conversations among colleagues, and she was able to consult with specialists on complex cases.

She never felt pressure to do anything but make the right decision for the patient. At the same time, she said, she didn’t hesitate to reject treatment she thought was improper.

A couple years into her time at Cigna, Day noticed some doctors prescribing a costly treatment called intravenous immunoglobulin, or IVIG, that helps patients with weakened immune systems fight off infections. Only she found they were prescribing it in cases where it didn’t make any medical sense. That wasn’t good for patients or for Cigna. “Some of these guys were pouring it into every patient they could get their hands on and then making hundreds of thousands of dollars billing for it,” she recalled.

At the time, Cigna didn’t have a policy for when IVIG should be used, so Day developed one based on the scientific evidence available at the time. Day said this saved millions of dollars and that Cigna rewarded her with bonuses and stock options.

“In my head I truly believed that you could marry good health care with business,” she said.

As Day neared the end of her first decade at Cigna, the company closed regional offices in favor of a nationwide review system, she said. With medical directors working from home, Day could no longer pop down the hallway to consult with doctors in other specialities.

Cigna had used a productivity dashboard for years, but by 2019, these metrics began playing a more prominent role in the company’s evaluations of medical directors, Day said. Now, making a fast decision seemed more important than making the right decision, she said. In February 2019 emails to her managers, Day openly questioned this system.

Her boss responded: “We all understand that many cases are involved and take more time,” he wrote. “We have tried to account for that additional time in the allotment allowed for certain cases.”

Still, he made it clear that transaction volume — the metric on the dashboard that was similar to a productivity score — was one of the factors “we use to determine merit raises, bonus” and stock awards. When asked about this, Cigna said that “any assertion that our Medical Directors’ compensation (cash or stock) is tied to denials or their handle time for cases is false.”

In that same 2019 email, Day’s boss added, “We want to assist every medical director who wishes to improve his or her efficiency.”

Day shot back, “Some of our newer MDs are quite terrified of the ‘counting,’” she wrote. “All ask — ‘how is quality measured?’”

Soon, Day realized that her boss wasn’t talking in the abstract about improving efficiency; he was talking about her. She learned that managers were going to help her pick up the pace of her reviews.

When bosses reached out, they didn’t discuss whether she was making the right call, only how long it took her to decide, she said.

By then, Day said, Cigna had shifted much of the nursing work to the Philippines. She found mistakes in the case files that these nurses sent. In an email to Day, a fellow medical director lamented the amount of time it took to untangle one case and said the reports by “the overseas nurses” were “messes.”

Some of the more astonishing problems that Day spotted have stayed with her. In a case involving a newborn who needed an epilepsy evaluation, Day noticed that a Cigna nurse had listed the mother’s name as the patient, rather than the baby’s. Day fixed that mistake, avoiding what certainly would have been a denial. In another case, a nurse recommended denying payment for an ultrasound of the neck because the treatment wasn’t medically necessary. But the nurse had gotten the body part wrong. It was a hip that was injured, and the imaging was needed. An appeal that landed on Day’s desk involved Cigna’s decision to reject payment for a test because it wasn’t medically necessary for a patient with a sexually transmitted disease. But Day figured out that the patient had toenail fungus, not an STD.

Day said her bosses didn’t want to hear that she was catching errors. By October 2020, Cigna had placed Day on a performance improvement plan that required her to raise her “productivity level” — referring to the score on the dashboard — to at least 70%, which would be a significant jump for her but was slightly below the median for medical directors. The company made the consequences crystal clear: If she failed to successfully complete the plan, she could be terminated.

ProPublica and The Capitol Forum asked Cigna how it calculated that score, but the company wouldn’t say. “Transaction volume helps gauge productivity and efficiency — the amount of work done, not the speed at which it is done,” a Cigna spokesperson wrote. The company said this metric measured the time a medical director spent on tasks involving medical judgment versus other work, such as internal meetings or training.

On the early 2022 productivity dashboard, though, a different calculation could explain Day’s score, and this math reflects how fast medical directors reviewed cases. ProPublica and The Capitol Forum multiplied the number of cases Day handled by the time Cigna allotted for each type of case, then divided that total by the hours she worked that month. The resulting percentage equaled her score. Medical directors who spent every available minute of their workdays clearing cases within the time constraints Cigna set would score at least 100%. Indeed, some medical directors had scores greater than 100%, meaning they cleared cases in even less than the allotted time. The newsrooms’ formula accurately reproduced the scores of 87% of the Cigna doctors listed; the scores of all but one of the rest fell within 1 to 2 percentage points of the number generated by this formula. When asked about this formula, Cigna said it may be inaccurate but didn’t elaborate.

Day said her bosses told her that the way to boost her score was to review more cases during her normal work hours.

Responding to questions, Cigna said the productivity dashboard was “primarily used to ensure that we have enough medical directors to perform the amount and type of work that needs to be done.” It is not used, the company said, to evaluate the performance of medical directors or track the speed at which individual doctors do their work.

Cigna, however, later said of the dashboard that “in the unusual situation that a medical director is a significant outlier to peers performing similar types of reviews, managers might use this metric as one data point to understand and discuss the variance with the medical director.” It also said Day was placed on a performance improvement plan “to help her meet the most basic standards to support patient care.”

During the time Day spent on the performance improvement plan, she refused to change her approach, which she felt was necessary to make the right call.

In December 2020, she appealed to the human resources department, figuring that colleagues there would see that it was wrong to fire a medical director for taking care to decide critical medical questions.

She was wrong.

“You feel that the time constraints/metrics, which are in place to review these cases are unreasonable, for some cases are very complex consisting of multiple pages to review,” a Cigna human resources employee wrote, summing up Day’s feelings as the matter escalated.

And while Day’s supervisor “appreciates your attention to detail,” the human resources employee wrote, he “also realizes that there are metrics in place that he must hold everyone to.”

When asked about this, Cigna said, “Dr. Day raised questions about her performance improvement plan through appropriate internal ethics channels available to all employees, and there was no wrongdoing found.”

Eventually, the daily stress of being pushed to work faster coupled with the threat of being fired took a toll on Day. Sleepless and fighting depression, Day was at the breaking point.

“I actually sort of had a mental breakdown,” she recalled.

On a recorded call with her boss about her lagging productivity score, Day brought the subject back to the quality of the decisions she was making. Her boss made it sound like Day was a broken record.

“We have the same discussion every time we talk,” he said. While saying “nobody’s asking you not to do quality work,” her boss said, “you must know I just have to redirect our discussion.”

But Day continued: “When there is no measurement of quality, then the discussion will continue to have that element to it.”

The supervisor said he heard Day’s concerns “loud and clear” but warned that “at the end of the day, we need to get your productivity up and we don’t have a lot of time to do that.”

The focus on metrics was proof Cigna was losing its way, Day told her boss. When she started working at Cigna 15 years earlier, there was a “commitment to quality and taking care of our customers.” Day said that it was still important to her and other medical directors that “we go home at the end of the day and think we’ve done a good job for Cigna.”

In a response to questions, Cigna said the supervisor, who works in California, was unaware that he was being recorded and that under that state’s laws, it is illegal to record a private phone call without all parties’ consent. Day said that she was in North Carolina during the call and that North Carolina law allows a person on a call to record without getting the consent of others.

Day took a monthslong leave from the job in mid-2021 that allowed her to work part time, and she found a therapist who helped her manage the depression. When she returned, Day said, it was more of the same.

In the late spring of 2022 she decided to retire from Cigna.

Maya Miller contributed reporting.

https://www.propublica.org…

Medicare for All Individual Cost Calculator

Medicare for All saves money overall … but what will it mean financially for specific individuals and families? That’s the question this new calculator answers for national M4A, in just a few minutes.

Congresswoman Pramila Jayapal, Email to supporters, April 25, 2024

Republicans HATE Medicare for All and they’re doing everything in their power to protect Big Pharma and our private, for-profit health care system.

This 100% free and accessible calculator compares the information you give for current spending on health care and your Medicare for All spending based on a progressive tax model proposed to fund the program. All you need to do is click here to get started ››

Use the Medicare for All Calculator ››

You may be asking yourself, what would Medicare For All accomplish?

The answer is: SO MUCH! Medicare for All will pay for all medically necessary care. Just look at everything it would cover:

  • Inpatient, outpatient, emergency, and preventive care
  • Dental, vision, and hearing care
  • Prescription drugs
  • Lab and diagnostic services
  • Medical devices
  • Reproductive health care such as abortion, prenatal care, infertility treatment and more
  • Gender affirming care
  • Physical therapy and rehabilitation
  • Emergency and necessary transportation
  • Long term care supports and services
  • Hospice care
  • Mental health care
  • Telehealth
  • AND MORE!!!

Our calculator is an accessible tool for disassembling Republican disinformation and fear mongering about Medicare For All. Using this calculator is incredibly easy and FREE. So please, take a moment and use our new Medicare For All calculator! ››

Comment:

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

The many economic analyses which demonstrate that single payer would reduce US health care costs fall short in one crucial way: they don’t indicate how any particular person or family will fare financially. Understandably, people want to know – how will this kind of program affect my costs? Since there will be some new taxes, maybe I’m at risk of paying more.

That’s the question the on-line calculator is designed to answer. Full disclosure – I led the technical team that worked with Congresswoman Jayapal and her staff to implement this calculator.

The calculator uses estimates from the Congressional Budget Office of how much new revenue the federal government would need to fully fund Medicare for All as specified in Rep. Jayapal’s bill. We designed a tax strategy to generate that revenue. It includes a 1.65% payroll tax; a progressive income tax starting at 1% at $178,000 for joint filers and $89,000 for single filers, and rising to 11%; a 15% tax on corporate profits; and a 3% wealth tax on individuals with >$30 million in assets.

The calculator asks for the user’s prior year costs – premiums and out-of-pocket spending. And asks for income; this determines the new taxes. And then, simple math, the calculator compares the two, yielding net savings (or costs).

We did a California calculator in 2022. This national calculator is very similar, with a refined tax strategy and two additional questions. As we reported in HJM for California, “Four thousand individuals reporting current healthcare spending and income reveal that … nearly 9 in 10 will save money, more than $5000 per year on average, with single payer.”

We’re eager to see the results on the national level. So — visit and use the site!

Geek comment: we’ll be able to explore the impact of different tax strategies on the distribution of savings and costs.

We hope the calculator will be a valuable organizing tool – to inform, energize, and advocate for Medicare for All. Please share information about the calculator widely via email, social media, and other channels.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

The Tragicomedy of Medicaid

Millions have been disenrolled from Medicaid, nominally due to the “unwinding” of COVID eligibility rules … but also due to administrative glitches. Lots of other problems with Medicaid. It’s a crisis, worthy of the deep scrutiny and biting wit of John Oliver.

Medicaid: Last Week Tonight with John Oliver (HBO), (28 minute video), April 18, 2024

John Oliver discusses why millions of people have been kicked off of Medicaid, why Medicaid access was difficult even before the current “unwinding”, and what would happen if fruits and vegetables could talk.

[Alert: Oliver uses profanity for emphasis]

Comment:

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

It’s so tragic it’s comic. Medicaid – health insurance for 90 million US poor – is a vivid example of the chaos and inefficiency that result when a program is designated and designed for individuals who lack political power and social standing. The beneficiaries are disrespected and poorly served. As HJM discussed, in most states private “managed care” insurers exploit the massive Medicaid cash cow to extract profits via restricted services and higher government spending. This essential health insurance lifeline is frayed.

What we need is a public insurance system that serves everyone, and thus is subject to natural quality control. Everybody needs it, so it works. Think social security, fire departments, and highways. They function well, fulfilling important societal functions.

In the health insurance arena, that’s single payer / Medicare for All. Successfully implemented around the world. Generous, equitable, and efficient. Advocated by John Oliver.

Oliver’s plea in this video for better management of Medicaid unwinding is appropriate, but IMO doomed to succumb to the dysfunctional dynamics of the Medicaid system. Hence my – and Oliver’s – plea for real system reform.

Universal public insurance is a heavy political lift, due to all the private entities – most of all insurers – who will lose tens of billions in profits. So we need to keep up the fight. John Oliver is our best cheerleader.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Political Party Split vs. Concurrence on Government Guarantee of Health Care

The Dem and GOP party split is nearly equal. Yet, we largely concur on worries about health care availability and affordability, and on a government role to assure we all have health care. Medicare for All / single payer is the path.

Changing Partisan Coalitions in a Politically Divided Nation, Pew Research Center, April 9, 2024

The combined effects of change and continuity have left the country’s two major parties at virtual parity: About half of registered voters (49%) identify as Democrats or lean toward the Democratic Party, while 48% identify as Republicans or lean Republican.

The continuing close division in partisan identification among voters is consistent with the relatively narrow margins in the popular votes in most national elections over the past three decades.

American Anxieties, GALLUP, April 9, 2024

Tell me if you personally worry about this problem a great deal, a fair amount, only a little or not at all.

The availability and affordability of healthcare [fifth item on the list]

  • 51% – A great deal
  • 27% – A fair amount
  • 21% – Only a little/Not at all

Comment:

By Don McCanne, M.D.

Over three-fourths of our nation (78%) is concerned about the lack of availability and affordability of health care. And yet the political activity we see is some nominal support of private insurance patches on the part of Democrats, when private insurance is proving often to be a detrimental method of funding health care, and Republican proposals to pass more of the costs on to patients through high deductibles and schemes such as health savings accounts. These political “solutions” actually result in the perpetuation of problems with both the availability and affordability of health care.

With three-fourths of the nation quite concerned, that certainly includes both Republicans and Democrats. Surely most of them do not believe that health care reform calls for a mandate of a private sector solution because that is what is available to everyone right now through the private insurance market. Without insurance, most cannot afford to pay for a major medical event or at least do not want it to displace other expenditures such as a down payment on the home they wanted to buy, the kids’ college education expenses, or funding of their retirement programs. But today, the private insurance industry and other intermediaries have become additional major sources of increased expenses and barriers to health care since those entities are on a mission to prioritize increasing investor wealth over patient health.

The majority of Americans want the federal government to guarantee health care and don’t trust insurers. Almost everyone approves of the government making health care available and affordable for people over 65, in the form of Medicare. In recent years, efforts have been made to privatize Medicare and that needs to be reversed by eliminating private insurers in order to return to patient care as guiding priority. Also, the benefits need to be expanded (vision, hearing, long term care, etc.) and deductibles and copayments should be eliminated so that Medigap insurance would no longer be necessary. Then, with other improvements, this version of Medicare should be expanded to include absolutely everyone, and it would be made equitable by funding it with progressive taxes, recovering some of the excessive revenues that have been moving into the coffers of the billionaires and the mega trillion dollar corporations.

Surely the large majority of us who are concerned about the availability and affordability of care can see the fairness in the rewards of our productivity that have been siphoned off by the super-rich being returned to us in funding for health care for all. No more silly knee jerk reactions against the labels “single payer” or “Medicare for All.” They will be labels that we can all be proud of because we earned them.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Medicare for All Explained Podcast: Episode 110

We don’t Need Health Insurance Companies

April 15, 2024

Podcast host Joe Sparks relates a recent experience filling a prescription at Costco to remind us that corporate health insurers add nothing of value to U.S. health care.

When he asked his pharmacist how much his prescription would cost if he paid out of pocket, he was surprised to learn that, “I paid four times less when I did not use my insurance.”

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

https://medicareforallexplained.podbean.com

Big corporations are quietly taking over your medical practice. Some doctors and experts say it’s ruining healthcare.

By Shelby Livingston
Business Insider, April 11, 2024

  • Big businesses such as hospital systems, insurers, and PE firms are gobbling up medical clinics.
  • Some doctors and industry experts fear corporate owners could prioritize profits ahead of patients.
  • The federal government is dialing up scrutiny of PE firms and other corporate owners in healthcare.

Independent doctors are almost a thing of the past.

UnitedHealth Group struck a deal in March to buy the nine-state doctor group of the struggling hospital system Steward Health Care. The same month, the powerful healthcare conglomerate, which owns the nation’s largest health insurer, got the green light to take over a decades-old independent Oregon medical practice, adding another 100 healthcare providers to its roster. It picked up a 400-doctor group in New York about a year before.

These are just the purchases we know about; there could be many more. Physician practice deals often go unannounced and get little attention from regulators, but they add up. Near the end of 2023, UnitedHealth’s Optum, the business unit housing its clinics and surgery centers, said it employed or was affiliated with 90,000 doctors. That’s a whopping 10% of all doctors in the US.

Though it’s the hungriest, UnitedHealth is just one buyer in the market for physicians. Little by little, big businesses have taken over healthcare in the US.

Hospitals have been scooping up medical practices for decades to create giant health systems. Insurance companies fought back with their own clinic purchases. Private equity firms increasingly staked claims to nursing homes and groups of specialists such as emergency physicians and dermatologists.

And in the last few years, tech companies and retailers like Amazon, CVS Health, and Walgreens added thousands of doctors to their payrolls when they bought primary-care chains.

Nearly 78% of US doctors are employed by hospitals or other corporate entities, such as insurers and PE firms, according to research from consultancy Avalere and the Physicians Advocacy Institute. For the first time, more medical practices were owned by corporate entities (30%) than hospitals (28%) as of January 2024, the research found.

There’s mounting evidence that this trend toward corporatization could harm patients. Research has found that prices go up when hospitals and private-equity firms buy medical groups. Sometimes, care gets worse, but there’s still much unknown about how corporate ownership affects medical care, especially when it’s a giant like UnitedHealth or CVS doing the buying.

Some doctors and experts in the industry fear corporate owners could prioritize their investors and profits ahead of patients, and doctors could lose the ability to make their own decisions about what’s best for a patient.

“The big guys aren’t cheaper. They don’t deliver better customer service, they aren’t more timely, none of that. They’re just able to negotiate higher prices,” said Farzad Mostashari, the CEO of Aledade, a company that aims to help primary care practices stay independent.

The federal government is starting to pay attention. In March, it launched an inquiry into PE firms and other corporate owners’ “increasing control over healthcare” and how this might threaten patients’ access to affordable and quality care.

The feds also zeroed in on UnitedHealth, reportedly facing an antitrust investigation by the US Justice Department into how its medical group acquisitions affect consumers and competitors. News of the probe surfaced before a cyberattack on UnitedHealth’s technology business, Change Healthcare, caused hospitals and clinics nationwide to forgo billions in payments — raising more questions about UnitedHealth’s chokehold on the healthcare industry.

Doctors are hot commodities

It’s tough to lump the many buyers of medical practices together, as they’re pursuing different strategies. But, in essence, they’re all hiring doctors for their relationships with patients, who bring opportunities for more profits. US healthcare spending reached $4.5 trillion in 2022, representing almost a fifth of the national GDP.

Hospitals rely on doctors — especially those who provide primary care — to refer patients for lucrative procedures or surgeries. Insurers like UnitedHealthcare and CVS’ Aetna are required by federal law to spend most of the money they collect in premiums on medical care. Still, they can pocket more of those premiums by sending patients to clinics they own.

Pharmacies hope that buying medical practices will give more prescriptions to fill and get more customers to buy over-the-counter products at the front of the store.

“They all realize that patients will follow what their doctors tell them to do or where their doctors tell them to go,” said Chas Roades, a longtime healthcare consultant. “So it allows them to both drive traffic to a downstream profit model that they’re interested in growing, and I think it also is a way to get consumers to trust them.”

Meanwhile, independent doctors have a tough time going it alone. Reimbursement is shrinking, and small practices don’t have the ability to negotiate higher rates as big hospital systems do. Plus, running a modern medical practice is expensive, requiring investments in staffing, technology, and electronic health records. The pandemic made things even more challenging, spurring many doctors to sell their private practices.

The quiet takeover of physician practices

Much of the takeover of physician practices has slid under the radar. That’s because acquisitions valued below $119.5 million don’t have to be reported to federal regulators, and many practice purchases don’t meet that threshold. Publicly traded UnitedHealth, for instance, rarely announces its purchases of medical groups and surgery centers.

“We’re really flying blind here with respect to understanding how many acquisitions by which entities and what geographies and what specialties,” said Yashaswini Singh, an assistant professor at Brown University who studies healthcare consolidation.

This lack of disclosure has made consolidating doctor practices difficult to study. Research into private equity’s effects on healthcare is just emerging, and there’s little to no academic, peer-reviewed research on how other corporate owners’ acquisitions affect healthcare prices and quality, Singh said.

Studies, including Singh’s research, have shown, however, that PE ownership leads to steeper prices and more utilization, meaning patients may have more frequent doctor’s appointments. Together, that drives healthcare costs higher. Research also suggests that PE ownership of nursing homes and hospitals worsens the quality of care. One paper found that patients who went to nursing homes owned by private equity firms had a 10% greater chance of dying.

And yet, private equity companies are rapidly expanding their presence in healthcare. A 2023 study found that one private equity firm owned 30% of the market share for physician practices in over a quarter of metropolitan areas across the US. A single PE firm owned over half the market share in some areas.

‘An unsatisfying way of practicing medicine’

Acquisitions by other corporate giants might not produce the same outcomes as PE firms, said Zirui Song, an associate professor of healthcare policy and medicine at Harvard Medical School who studies private equity in healthcare. PE firms are unique in holding on to their acquisitions for only a few years and saddling their acquired companies with debt and fees. Owners who hang on to their medical groups might be more motivated to improve services, he said.

Anecdotally, though, many doctors don’t like working for corporate overlords, Roades said. Older physicians who own equity in their medical practice get a nice payday when they sell, but the younger ones left behind are closely managed and measured in terms of cost and productivity, he added.

It’s “an unsatisfying way of practicing medicine. We’re seeing a growing number of disgruntled early and mid-career physicians in these groups who find themselves suddenly working for large corporations, and this is not what they wanted to do with their lives,” he said.

After a few years working at Optum-owned Oregon Medical Group, Dr. Nick Jones opened a direct primary care practice, a type of clinic that charges a monthly fee instead of billing insurance. He said there’s a sense of powerlessness for primary-care doctors in the traditional healthcare system — whether they’re employed by Optum, a large hospital system, a private-equity firm, or a nonprofit clinic.

With thousands of patients to treat, they face a mountain of administrative paperwork and have no control over their schedules. These problems stem from the fact that primary-care doctors are underpaid in the traditional “fee-for-service” healthcare system, in which doctors are paid for every visit, he said.

While he felt supported at his previous Optum-owned clinic because of his office manager, “the financial underpinnings and the economics of medicine” made it unsustainable and stressful, Jones said. “There was a three or four month wait for patients to see me. There was still too much on our plate to do, and [during the pandemic] there weren’t enough medical assistants or case managers or nutritionists or other support to make 20 patients a day feel like the right thing to do.”

Doctors worry corporate giants put profits over patients

The insurers and retailers say care is better and cheaper when integrated under one roof, connected to the health plan, pharmacy, or other provider organizations.

For its part, Optum says it wants to improve the health and well-being of people and lower the cost of care with integrated care teams and better technology. It says it’s helping clinics transition to providing “value-based” or “accountable” care, which means that its doctors get paid fixed fees upfront that, in theory, encourages them to keep patients healthy and order fewer unnecessary tests.

Optum said in a statement it continues “to focus on supporting physicians, advance practice clinicians, and nurses in closing gaps in care and helping the health system perform better for everyone.”

A spokesperson pointed to a study by Optum published in JAMA Network Open in December 2022 that found seniors in value-based care arrangements were less likely than seniors in traditional payment models to visit the emergency room, or be admitted at the hospital for COPD, asthma, stroke, or heart attack.

But there are potential dangers. Patients may end up with fewer choices as bigger companies edge out competitors.

California health system Emanate Health sued Optum in 2023 for anticompetitive behavior. It alleged that Optum canceled its contracts with Emanate hospitals and steered patients away after Emanate refused to agree to certain terms. Among the terms: Emanate primary-care doctors would serve only Optum patients, and Optum would get first dibs if Emanate decided to sell its primary-care practices.

Care might also feel less personal. Some One Medical patients complained that since the chain folded into Amazon, their appointments were shortened, and certain features for seniors, like having health coaches available during patient visits, went away, according to a report from The Washington Post.

Patients could end up spending less time with doctors and face higher costs

Dr. Mitch Li, an emergency physician who started Take Medicine Back, a group that opposes corporate owners pushing into healthcare, said patients will spend less time with their doctors and potentially face higher costs from predatory billing practices.

“The corporate practice of medicine is the reason why healthcare costs are out of control,” Li said.

Above all, some doctors fear having to make decisions that benefit the owner’s bottom line, even though they may not be the best option for a patient.

Dr. Michelle Cooke, a primary-care physician, previously practiced at an Atlanta clinic owned by a hospital system. Though the system was not-for-profit, it didn’t operate like that, and over time, the job became unbearable, she said.

She had more than 3,000 patients assigned to her care — far more than typical — and appointments were too short, especially for the chronically ill, she said. The hospital system would prioritize lucrative physicals for Medicare patients rather than seeing patients with an urgent need.

“It really got to the point where I feel like I was working to feed the corporation,” Cooke said. “It really wasn’t incentivizing what the patients needed.”

Cooke has since opened a direct primary care practice, where she sees just a few hundred patients and can spend more time with them. She said she’s found that she prescribes less medication now because she has time to educate patients on lifestyle habits and nutrition.

The federal government and states are dialing up the scrutiny

The Federal Trade Commission, the US Department of Justice, and the Department of Health and Human Services are stepping up scrutiny of healthcare deals, particularly those backed by private-equity firms. The agencies also signaled that they want to look at smaller deals that typically wouldn’t trigger an antitrust review.

Several states have also increased their oversight of local healthcare consolidation. Some state lawmakers are also trying to strengthen laws prohibiting corporations from practicing medicine. Most states have these bans on the books, but companies have found various ways around them.

It’s unclear if any of these efforts will meaningfully slow the corporatization of healthcare. And, to be sure, some physician practices may not have survived without an infusion of capital from a corporate buyer.

A bill introduced by Oregon State Rep. Ben Bowman would have closed certain loopholes and put more distance between corporate entities and their medical practices. Bowman told Business Insider he wanted to prevent big businesses from eroding doctors’ autonomy.

“A physician who went to medical school who took an oath — their highest ethical duty is to care for their patients. Whether it’s a private equity firm or a large corporation, their highest ethical duty is to generate a return on investment for their shareholders. Those two incentives are fundamentally at odds,” Bowman said.

The bill, opposed by Amazon and CVS, died in March, but Bowman said he plans to reintroduce it in 2025.

Around the same time the bill died, UnitedHealth’s Optum and The Corvallis Clinic — the small Oregon medical practice that Optum struck a deal to buy — requested that their tie-up receive an emergency exemption from state review because of the Oregon clinic’s deteriorating finances.

The proposed acquisition, first announced in December, had received plenty of pushback from state residents. The request also came as hospitals and clinics nationwide faced cash shortfalls because of the cyberattack on UnitedHealth’s Change Healthcare.

A week later, Oregon’s health authority approved the request.

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