PNHP

Private Equity Endangers Patients

Private Equity Endangers Patients

An article in US Right to Know – motto “Pursuing truth and transparency for public health” – reviews the powerful evidence of harm inflicted by private equity ownership of medical care providers. We need community ownership along with single payer.

Private equity in health care puts patients’ lives in danger, studies show, U.S. RIGHT TO KNOW, April 28, 2025, by Pamela Ferdinand

Private equity firms claim their investments in U.S. health care modernize operations and improve efficiency, helping to rescue failing healthcare systems and support practitioners. But recent studies build on mounting evidence that suggest these for-profit deals lead to more patient deaths and complications, among other adverse health outcomes.

Recent studies show private equity (PE) ownership across a wide range of medical sectors leads to:

Poorer medical outcomes, including increased deaths, higher rates of complications, more hospital-acquired infections, and higher readmission rates.

Staffing problems, with frequent turnover and cuts to nursing staff or experienced physicians that can lead to shorter clinical visits and longer wait times, misdiagnoses, unnecessary care, and treatment delays.

Less access to care and higher prices, including the withdrawal of health care providers from rural and low-income areas, and the closure of unprofitable but essential services such as labor and delivery, psychiatric care, and trauma units.

Dr, Stephanie Woolhandler, a distinguished professor of public health at Hunter College and co-founder of Physicians for a National Health Program, isn’t surprised by the findings.

“Private equity’s track record in health care is so consistently bad that regulators should ban new private equity purchases in the health sector and impose stringent oversight on the health resources private equity already owns,” she says.

A landmark review in The BMJ analyzed 55 studies across eight countries, primarily in the U.S. It detailed how PE ownership in health care was most often associated with higher costs to patient or payers and “mixed to harmful” impacts on quality of care.

Now, new peer-reviewed research reinforces these findings and reveals a troubling pattern, especially in the absence of effective regulation and oversight: Patients treated at PE-owned facilities, whose numbers have skyrocketed, continue to experience worse or mixed outcomes – from higher mortality rates to lower satisfaction – compared to those treated elsewhere.

In fact, no study to date has found significant improvements to health care quality, efficiency, costs, or access as a result of private equity’s entrance into health care, according to a March 2024 report from Stanford Law Review.

“The drive for quick revenue generation threatens to increase costs, lower health care quality and contribute to physician burnout and moral distress,” they say.

Another study, published last year (July 2024) in JAMA, found hospital assets decreased by 24% in the two years after private equity purchases, leaving facilities less equipped to care for patients. The loss of land, buildings, major hospital equipment, and information technology – equivalent to $28 million in total assets per hospital – means fewer resources for effective patient care, experts say.

“It’s a very striking finding and should change the way people think about private equity in hospitals. The PE firms say, ‘We bring new capital into hospitals.’ It turns out that’s not quite true,” Woolhandler, a co-author of the study, told NBC News. “There are real dangers to the health care that people get if you deplete all of the capital from a hospital.”

Comment:

By Don McCanne, M.D.

To achieve affordable, high quality health care for everyone, the need for single payer has been recognized for decades. Our failure to act has resulted in an intolerable expansion of wasteful expenses without solving the problems of impaired access and individual financial hardship.

In recent years, the menace of private equity has crept into our health care system, greatly compounding its high costs and dysfunction. The “U.S. RIGHT TO KNOW” article convincingly demonstrates this.

Three years ago we wrote an article in The Nation explaining that mere enactment and implementation of a single payer Medicare for All program would no longer be satisfactory because entrepreneurial interests had gained too much control through provider ownership: insurance reform would no longer be enough to ensure that everyone would have access to affordable, comprehensive, high quality health care. We still need single payer, but we must also address ownership of the health care delivery system. We must agree that the system belongs to all of us — community-ownership of hospitals, clinics, and other health care resources.

What have we accomplished in the last three years? Incremental changes have had a negligible impact, allowing the status of our health care system to deteriorate even more. If we continue with our inertia, things can only get worse since private equity is a one-way street in the wrong direction.

You saw the images of the Medicare for All signs at the huge Sanders-AOC rallies. It’s time! Citizen action now!

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 Act Reintroduced in Congress

Yesterday progressive Congressional leaders submitted the 2025 version of Medicare for All. In this time of oligarchic dominance, the symbolism remains powerful, even if there are no short-term prospects for passage. The fight for just and efficient health insurance continues.

Progressive Democrats Join Sen. Bernie Sanders’s Reintroduction of Medicare for All Act, Democracy Now!, Headline, Apr. 30, 2025

Democratic Congress members Pramila Jayapal and Debbie Dingell joined Vermont independent Senator Bernie Sanders on Tuesday in reintroducing the Medicare for All Act, which would provide universal single-payer healthcare based on patient needs, not industry profits.

Sen. Bernie Sanders: “Our legislation would provide comprehensive care to all Americans — rich, poor, young or old — with zero out-of-pocket expense. It would provide full freedom of choice regarding healthcare providers: You go to the doctor or the nurse that you want to. No more insurance premiums, no more deductibles, no more copayments, no more filling out endless forms!”

Sanders, Jayapal, And Dingell Press Conference About Reintroducing Medicare For All, Forbes Breaking News, Video (47 min), April 29, 2025

Comment:

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

Amidst the current oligarchic turn of national politics, with cynical performative gestures toward efficiency obscuring the billionaire pursuit of government largesse, it is critical to reassert our quest for Medicare for All — the powerfully synergistic combination of efficiency and generosity designed to help everyone.

M4A, aka single payer, is the magical yet real and practical strategy that would trim away hundreds of billions of dollars in profits and administrative burden, facilitating directing our massive spending on health care to … health care! (instead of executives and shareholders). Families will save money, and hundreds of thousands of deaths will be averted.

Many thanks to our progressive Congressional leaders, for again promoting this admirable vision in legislative form.

To learn more, and to urge your elected officials to co-sponsor the bills, consult the PNHP website.

And stay the course. We will, eventually, guide US policy to the commonsense solution used around the world: simple and comprehensive health insurance for everyone.

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.

Want to find the real waste in health care spending? Look at Medicare Advantage

By Rohit Prasad and Kaitlyn Castro
Austin American-Statesman, April 30, 2025

Elon Musk’s “Department of Government Efficiency” has made its way to health care and Congress has placed one critical program on the chopping block: Medicaid. This is the wrong approach. Medicaid is efficient and cheaper than private insurance.

The real waste in health care is in Medicare — namely Medicare Advantage.

Medicare Advantage plans cost us more without improving people’s health, all while private companies turn a profit on taxpayer money.

In traditional Medicare, the federal government operates as your insurance provider. In Medicare Advantage, the government instead sends that money to a private insurance company, such as Humana or UnitedHealthcare, to give people worse care.

Medicare Advantage costs the government 122% more per person than traditional Medicare. This amounted to $83 billion more in spending to the federal government last year alone.

This setup is sending our Medicare program on the path to financial failure. And all that spending isn’t even for our care. Approximately 14% of spending in Medicare Advantage goes toward things like television advertisements and executive salaries. On top of that, the private companies that deliver these plans pocket an average of $1,730 in profits per enrollee.

Despite this spending, there aren’t really any major differences in health between folks on Medicare Advantage and traditional Medicare. For example, blood sugar control among diabetic Medicare recipients was the same between patients on either coverage option.

As health care providers, we routinely see patients on Medicare who need, and deserve, a lot of care. In fact, more than 30% of Medicare patients see five different doctors each year. On top of managing chronic conditions such as diabetes or heart disease, many need cancer screenings like colonoscopies and CT scans. Not to mention the surgeries that come with growing older: knee surgery, hip replacements and cataract surgery.

We need our Medicare program to make sure this care happens efficiently, so folks can spend less time in doctor’s offices and more time doing what they love.

Unfortunately, compared to traditional Medicare, people in Medicare Advantage programs have:

  • More delays in care due to insurance approvals
  • Greater amounts of administrative paperwork to access services
  • Higher costs associated with copays and deductibles
  • Limited access to treatment options due to restrictive provider networks

Furthermore, some Medicare Advantage plans have landed in hot water for using artificial intelligence, not real qualified doctors, to authorize payments for care. Some Medicare Advantage plans have cut off care for patients recovering from cancer, strokes and amputations simply because a computer algorithm decided that care was no longer necessary. That’s why these companies are facing a class-action lawsuit and even congressional action demanding greater regulations.

The bottom line is Medicare Advantage is the least efficient part of our public health care. Medicare Advantage leads to delays in care, administrative hurdles, possible denials by computer algorithms and higher costs without actually improving people’s health. Not to mention that while patients deal with these barriers, the private Medicare Advantage companies rake in profits on the taxpayer’s dime. Unfortunately, though, this administration seems primed to double-down on the wasteful program.

If the federal government truly aims to improve the efficiency of healthcare spending, it is time to shift the focus to Medicare Advantage instead of forcing critical programs like Medicaid to pay the price.

Rohit Prasad and Kaitlyn Castro are medical students at the University of Texas Dell Medical School and members of the national advocacy organization Physicians for a National Health Program.

https://statesman.com…

Medicare Enrollment Proposals Would Speed Shift to Private Care

By Tony Pugh
Bloomberg Law, April 29, 2025

Medicare’s shift toward privatization could get a significant boost if the Centers for Medicare & Medicaid Services embraces either of two conservative proposals that could increase enrollment in the program’s bulging managed care option.

Project 2025, the Heritage Foundation’s national policy blueprint, calls for all new Medicare-eligible adults to “opt-in” to the program through a private Medicare Advantage plan rather than the traditional fee-for-service program, the historic landing spot for new enrollees since the program’s inception.

The Paragon Health Institute, a conservative think tank, wants to require newly eligible beneficiaries to “affirmatively choose” one or the other.

With strong Republican support of Medicare Advantage and GOP control of Congress and the White House, “I think the stars are properly aligned for something like this to take place,” said Robert Moffit, senior research fellow at the Heritage Foundation’s Center for Health and Welfare Policy. He said either proposal would be an improvement over the current system.

Fifty-four percent of eligible beneficiaries are already enrolled in Medicare Advantage plans, which are offered by private insurers like UnitedHealth Group, Humana, and CVS Health. The Congressional Budget Office expects that to reach 64% by 2034.

Both sign-up proposals would likely increase or hasten those MA growth projections, said Moffit and David Lipschutz, litigation director at the Center for Medicare Advocacy.

“The thumb is already firmly on the scales in favor of Medicare Advantage enrollment, and implementing either of these policies would just exacerbate that,” Lipschutz said.

But if either proposal is adopted without accompanying changes in the MA payment system, Moffit, Lipschutz, and others said the change could also weaken Medicare’s overall finances just as millions of aging baby boomers are swelling program ranks, and fewer working-age adults will be around to fund the program.

“You’re going to be stuck with a problem,” Moffit said, if the proposals become policy without addressing MA’s “flawed” risk adjustment system, and “broken” payment system, which can inflate plan reimbursements. “And they are going to fester as fiscal problems,” he added later.

Oz and Medicare Advantage

The proposals are receiving fresh attention because CMS Administrator Mehmet Oz is a longtime supporter of the MA program.

Earlier this month, the CMS boosted payments to MA plans by an average of 5% for 2026, even though MA coverage will cost 20% more per enrollee this year than fee-for-service Medicare, the Medicare Payment Advisory Commission estimates.

That’s $84 billion more to care for beneficiaries than if they were in traditional Medicare. The federal government is projected to pay MA plans $538 billion this year, up from $494 billion in 2024.

“Although he hasn’t spoken much, prior to his appointment, about his policy intentions and what he wants to do to improve health care in America, the one thing” Oz has “been very clear about is that the privatization of Medicare is high on his agenda,” said Donald Berwick, senior fellow at the Institute for Healthcare Improvement and a former CMS administrator.

Officials at the Department of Health and Human Services did not respond to questions about either proposal, but said HHS is committed to strengthening Medicare by promoting greater choice, competition, and affordability for American seniors. The agency’s focus remains on advancing reforms that align with President Donald Trump’s vision of improving health outcomes, empowering beneficiaries, and delivering better value across the Medicare program, according to the official.

Constraining Medicare Spending

An influx of aging baby boomers, greater use of medical services, and inflation are expected to drive 7% to 8% annual increases in Medicare spending over the next decade, as program costs nearly double from $1 trillion in 2023 to $1.9 trillion in 2032, the commission estimates.

That means 22% of personal and corporate income taxes will be needed to fund Medicare prescription drug and outpatient benefits in 2030 compared with 17% in 2023. Yet by 2029, only 2.5 workers per beneficiary will fund the program, down from 2.8 in 2023, the commission said. That reality makes constraining Medicare spending a high priority.

In a tradeoff for lower premiums and provider networks, Medicare Advantage provides a cap on catastrophic health-care costs, and offers supplemental benefits such as vision and hearing coverage that FFS doesn’t offer. Unlike traditional Medicare, which pays for each medical service provided, private MA plans receive monthly payments to cover each beneficiary’s cost of care.

The higher costs for MA care result mainly from “favorable selection,” when plan payments exceed predicted medical costs, and “coding intensity,” the inflated diagnosis of patient ailments.

‘Basically an Antique’

Lawmakers and policy makers “should ask themselves why traditional Medicare should be the default” enrollment “option when it’s based on a 1965 Blue Cross Blue Shield model,” said Moffit, a former HHS deputy assistant secretary.

“You’re talking about something that is basically an antique,” he said of traditional Medicare. “Who would buy today, with their eyes open, a health policy that doesn’t have any protection against the financial devastation of a catastrophic illness? We just keep doing it because we’re used to doing it.”

Since managed care has become the dominant form of job-based health coverage, “if you’re becoming eligible for Medicare and you already have a managed care plan from ‘company x,’ a lot of people just say ‘well, I’m not thrilled with it, but I’ll stick with what I know,” and go with Medicare Advantage, Lipschutz said.

But Berwick said “traditional Medicare is a better place for most patients,” because unlike MA, it has no provider network restrictions or pre-authorization requirements.

Both enrollment proposals are “bad policy,” he said. “And if we allow this continued slide into privatization to occur, which appears to be the intention of this administration, a lot of beneficiaries are going to be hurt.”

Any change in the enrollment of new beneficiaries would necessitate enrollee information so people with diverse needs and ailments could decide which MA plan to select, whether to opt out, or whether to go with fee-for service coverage instead, said Carrie Graham, director of the Medicare Policy Initiative at Georgetown University.

The debate offers an opportunity, Graham said, to weigh adding a catastrophic out-of-pocket spending cap to fee-for-service Medicare to help even the playing field with MA coverage.

https://news.bloomberglaw.com…

Doctors welcome the Medicare for All Act of 2025

We need a universal health care system that guarantees care for all—free of copays, deductibles, and job-based coverage restrictions

FOR IMMEDIATE RELEASE: April 29, 2025

Media Contact: Anika Thota, PNHP Policy & Communications Specialist, anika@pnhp.org

WASHINGTON, D.C. — Physicians for a National Health Program (PNHP), which represents more than 25,000 doctors nationwide, enthusiastically welcomes the launch of the Medicare for All Act. This bill, which is being introduced by Representatives Pramila Jayapal and Debbie Dingell in the House and Senator Bernie Sanders in the Senate, will finally establish a single-payer national health program in the United States. 

The Medicare for All Act arrives at a critical moment, as Medicaid cuts loom, public health infrastructure is being dismantled, and dangerous rhetoric from political leaders seeks to rewrite the meaning of “health care reform.” 

Under the false promise to “Make America Healthy Again,” politicians are threatening to gut safety net programs like Medicaid, and are already funneling billions of taxpayer dollars to corporate insurers through their privatized “Medicare Advantage” plans. 

So-called “Advantage” insurers are already overpaid by an estimated $140 billion annually, and impose widespread harm on patients, particularly those with cancer and other serious conditions, by delaying and denying care in the name of profit. This makes it especially galling that the Trump administration boosted MA payments by an additional $25 billion for 2026—money that could and should be used to fund patient care. 

“The Trump administration has somehow not heard the voices of Americans who are angry and frustrated with a healthcare system that is built to make profits for the few and to delay and deny care to the rest of us,” said Dr. Diljeet Singh, President of PNHP. “We need a universal health care system that guarantees care for all—free of copays, deductibles, and job-based coverage restrictions. With the passage of the Medicare for All Act, patients can get the care they need without fear of crushing medical bills and physicians can focus on healing patients, not battling insurers over denials and delays.” 

Across the country, physicians are also sounding the alarm on Trump administration policies, and making it clear that they want to practice in a system that puts patients before profits. 

“As a future physician, I want a health care system in which I can base my patient care and clinical decision-making on my patient’s needs, not on their insurance,” said Rachel Fox, a student leader with Students for a National Health Program (SNaHP). “Our current system benefits no one but the shareholders of private health insurance companies, and a universal, single-payer system like Medicare for All is the only sustainable option for long-term reform of our broken health care system.”

The Medicare for All Act of 2025 would provide health coverage to every U.S. resident—including comprehensive medical, dental, vision, mental health, and reproductive care—with no out-of-pocket costs, copays, or deductibles. By eliminating waste and corporate profiteering in health care, the bill would save hundreds of billions annually that could be invested in actual health care, resulting in better, more equitable health outcomes. 

“Physicians are calling for Medicare for All because we see, every day, the harm that our profit-driven system inflicts on our patients,” said Dr. Singh. “We need a system where health care is guaranteed, not denied and delayed for corporate profits.”

Physicians for a National Health Program is a nonprofit research and education organization whose more than 25,000 members support single-payer Medicare for All reform.

US Mortality High & Strongly Linked to Wealth

A new cross-national study highlights two stark facts: Mortality is substantially higher in the US than in counterpart European nations, and it is more closely associated with wealth stratum (inversely, of course). Health insurance and wealth inequality play central roles.

Association between Wealth and Mortality in the United States and Europe, New England Journal of Medicine, April 2, 2025, by Sara Machado, et al

In the United States, there has been a massive transfer of wealth from the middle class to the wealthy in the past 60 years, which has increased wealth inequality. Other high-income countries have seen concurrent growth in wealth inequality, but these have been less pronounced than in the United States. Life expectancy in the United States is also lower than in other high-income countries, and it is decreasing. These are of key concern, particularly because increases in mortality are most pronounced among the poorest people.

Interpretation: Survival over time among adults 50-85 years old is lower in the US than in Northern / Western Europe, with more spread by wealth level.

From the Discussion:

We found that wealth was associated with mortality across the United States and Europe and that the difference in mortality between the top and bottom quartiles of wealth appeared to be larger in the United States than in Europe. Mortality in the United States was higher than in Europe, even at higher wealth levels.

Comment:

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

We have reported often that the US can greatly increase the access and affordability of health care by enacting and implementing a well-designed, single payer, improved version of Medicare that is provided to all.

However, as this study indicates, our health is also broadly linked with economic disparities. The well recognized problem of wealth inequality in the US is associated with reduced life expectancy, especially afflicting lower-wealth individuals, far more than in European nations. At the same time, when compared to those nations – with comprehensive universal health care systems – all US wealth levels have higher mortality, even at the top tier. So the wealthy should understand that they will gain life expectancy if the system is fixed overall. Single payer is not about trade-offs, it’s about improvements for everyone.

What does this tell us? Clearly, as we have said for decades, our nation’s overall health would improve with an improved system of Medicare for All. But it also demonstrates that we need a more equitable distribution of wealth which would be more likely if we also had an equitable system of income distribution. The study showed that life expectancy was related to wealth. However, it is very difficult to see how wealth could be made more equitable without ensuring adequate income for everyone. We also really need a progressive wealth tax if we are going to correct the profound inequities created by today’s preoccupation with the accumulation of mega-wealth.

This is not the same as calling for equal income and wealth. Instead, it is a plea for fairness and justice in income and wealth distribution instead of the creation of centi-billionaires made possible by denying middle- and lower-income workers their fair share of society’s productivity. This, of course, requires effective government oversight, unlike the inhumane, slash-and-burn administration we have today.

What can we do? In just 100 days, extensive damage has been initiated to our socioeconomic and legal systems, and much more is threatened. So reversing the current politics and policy is an emergency. Once we have control of the situation, we can move forward with changes that will let us function like our European friends, perhaps even better. Solving our major challenges would enhance our nation’s well-being and return us to a place of leadership and admiration in the world. Our progress will increase global well-being! But it’s up to the people to act.

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.

Stand-Up for Simple Health Insurance

In just 90 seconds, this highly entertaining comic conveys the absurd complexity of health insurance out-of-pocket costs. It’s a potent tragi-comic case for affordable, simple health insurance. Finally, the difference between HSAs and FSAs is clear!

“Oh my God, like what is going on with the healthcare system?” or on YouTube, 1.5 minute video, April 15, 2025, by Darlene Bereznicki

Comment:

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

Ms. Bereznicki starts her riff with “When the Luigi Mangione thing went down, my Canadian friends asked … OMG what is going on with the healthcare system?” That’s the question we’re all asking ourselves, all the time. Leave it to a professional comedian to answer to that question so well and amusingly, in just a minute and a half. Maybe she should delivery my health policy talks!

Deductibles, copays, out of pocket maximums, etc – she quickly covers the gamut. This routine even alerted me to the fundamental difference between HSAs (health savings accounts, which roll over tax-free to retirement*) and FSAs (flexible spending accounts, use them or lose them).

Note the massive attention to the Instagram video in just five days, and all the supportive comments. (The YouTube video was just uploaded by Ms. Bereznicki, as a favor to HJM readers.)

Why did this resonate so widely? Because we’re all fed up with a laughably convoluted and inefficient – plus unfair and harmful – set of clunky mechanisms to pay for health care. Ms. Bereznicki and her Canadian friends would agree I’m sure: the US needs a single public payer, with minimal or no cost sharing.

* HSAs are a major gift to the healthy and wealthy, and undercut insurance markets…

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.

Dr. Diljeet Singh on More Perfect Union

PNHP president Dr. Diljeet Singh spoke to More Perfect Union for a video segment that was posted on April 15, 2025.

She talked about the blatant conflicts of interest that should have been a red flag for senators voting on the nomination of Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services—especially his enthusiasm for the so-called “Medicare Advantage” program, and his investments in firms like UnitedHealthcare.

“Every single health care dollar should go to health care,” said Dr. Singh, “not profit and not shareholder dividends.”

MA Insurers Reap $60 Billion from Premium Boost & Inflated Diagnoses

The 2026 CMS premium increase and a new study together highlight how Medicare Advantage plans fleece tens of billions from the government. Trump’s CMS raised premiums by $25 billion from Biden-era plans, and diagnostic up-coding generates $33 billion in excess payments annually.

Summary: The 2026 CMS premium increase and a new study together highlight how Medicare Advantage plans fleece tens of billions from the government. Trump’s CMS raised premiums by $25 billion from Biden-era plans, and diagnostic up-coding generates $33 billion in excess payments annually. Read this online here.

Trump’s CMS dramatically raises payments to Medicare Advantage plans, Healthcare Dive, April 8, 2025, by Rebecca Pifer

The Trump administration handed Medicare Advantage plans a massive gift on Monday, finalizing payment rates for 2026 significantly higher than what regulators in the Biden administration sketched out.

The 5.1% benchmark increase should accelerate margin recovery for the privatized Medicare plans … Insurer stocks soared [up to 16%] after the payment notice was announced.

The 5.1% rate increase for MA plans is the largest rate increase in the past decade, and is up significantly from the 2.2% increase proposed by the Biden administration in January.

Overall, it should result in more than $25 billion in additional payments going to MA plans next year, according to the CMS.

However, the real sum will be higher, given the CMS’ estimate doesn’t include the impact of plans’ coding practices. The expected change in revenue for MA plans jumps from 5.1% to 7.2% including the impact of risk scoring.

“This reads very positive” for insurers, Mayo said.

“Overall, we view the [2026] Final notice as a best-case scenario,” Ryan Langston, analyst with TD Cowen, wrote in a Monday note.

Insurer-Level Estimates of Revenue from Differential Coding in Medicare Advantage, Annals of Internal Medicine, April 2025, by Richard Kronick et al.

Background: Medicare Advantage (MA) plans report diagnoses more intensely than providers in traditional Medicare (TM), and there is wide variation in coding intensity across MA plans.

Participants: 697 MA contracts offered by 193 insurers.

Results: In 2021, the average risk score was 1.26 in MA vs 1.07 in TM. … The risk score at UnitedHealth Group was 0.28 higher than it would have been if its plans had coded identically to TM. … Kaiser Permanente coded only slightly more intensely than TM. Due to differential coding, MA plans received an estimated $33 billion in additional payment in 2021, 42% of which went to UnitedHealth.

Comment:

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

We linked these two stories because they reveal a common theme: regulatory capture to add profits and shareholder value for the private insurers that operate Medicare Advantage. The big premium hike reflects MA lobbying power, especially in a GOP administration; the diagnostic upcoding suggests confidence that CMS will never clamp down on this misbehavior (recent efforts were beaten back, see here and here),

The overpayments are huge. The $60 B total annual cost of generous premium-setting plus over-diagnosis is 6-30 times higher than all DOGE cuts, according to estimates of true DOGE efficiencies from the American Enterprise Institute ($10 billion) and the Financial Times ($2 billion). Thus, while the Trump administration pretends to find efficiencies, it overpays insurers many times more. They don’t really care about efficiency, they care about enriching wealthy companies and individuals. (Of course, looming Medicaid cuts may reach $90 billion per year … but that’s not an “efficiency” instead a reduction in medical access and care.)

What is alarming for the future is that the Trump administration appears to be injecting new life into Medicare Advantage private insurers as a prelude to fully displacing traditional Medicare. Privatizing Medicare would have the adverse consequences of handing even more tax funds to private insurers, while increasing care costs for patients. We would lose choice of providers, forced into narrow networks and declining access to specialized services for complex medical conditions, as is frequent in MA. The model favored by current CMS leadership (Mehmet Oz) will encourage private insurers to tailor their plans for a competitive marketplace by adding benefits of limited value such as current dental, vision, and hearing care – thus appearing to offer generous benefits when, in fact, they shift costs to patients via stricter prior authorization requirements and increased claim denials. They’ll also shorten the list of medical benefits, claiming that many legitimate treatments are still experimental and lack sufficient scientific support to be covered.

Geek Notes: In the graph, appreciate the strikingly high jump from “advance” (under Biden) to “final” (under Trump) for 2026. Kronick’s estimate of $33 B due to diagnostic coding intensity is up from the $20 B previously discussed in HJM, despite being for 2021, several years out of date. In theory CMS is revising diagnostic coding practices, to reduce the overage, but such efforts have been dismally unsuccessful in the past.

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.

Physicians condemn irresponsible and dangerous rate hike for “Medicare Advantage” corporations

“This misuse of taxpayer dollars is all the more egregious in the face of how much harm these insurance corporations inflict on millions of seniors”

FOR IMMEDIATE RELEASE: April 9, 2025

Media Contact: Anika Thota, PNHP Policy & Communications Specialist, anika@pnhp.org

On April 7, 2025, the Centers for Medicare & Medicaid Services (CMS) finalized a 5.06% increase in payments to Medicare Advantage (MA) plans for 2026—more than double the 2.23% increase originally proposed in February based on CMS’s own actuarial projections.

Physicians for a National Health Program (PNHP) strongly condemns the hike, which is the direct result of aggressive lobbying from health insurance corporations that demanded and secured billions of Medicare dollars at the expense of the American public.

“For the first time in our nation’s history, Congress has hired a licensed insurance broker to be in charge of Medicare,” said Dr. Ed Weisbart, PNHP’s national board secretary. “It should come as no surprise, then, that within less than one week of his being confirmed by the Senate, he authorized the single largest increase in payments to Medicare Advantage for more than a decade.”

Corporate MA insurers already receive an estimated $140 billion in annual overpayments, driven by upcoding, favorable selection, and manipulation of bonus payments—with patients and doctors ultimately paying the price.

Medical practitioners now spend an estimated 11 to 20 million hours every year navigating prior authorization requests from MA plans. These administrative barriers directly contribute to delayed care, with MA enrollees nearly twice as likely to report care delays compared to those in traditional Medicare. At the same time, over 11 million beneficiaries are trapped in narrow networks that exclude most physicians in their area. And despite promises of “affordability,” at least 7.3 million enrollees are underinsured, facing high out-of-pocket costs for needed care.

“This misuse of taxpayer dollars is all the more egregious in the face of how much harm these insurance corporations inflict on millions of seniors, people with disabilities, rural hospitals, and physicians and other clinicians across the United States,” said Dr. Weisbart.

Against this backdrop of widespread denial, restriction, and profiteering, CMS’s decision to raise payments even further is not just irresponsible—it’s dangerous. The 5.06% rate hike rewards an already failing and exploitative system, pouring billions more into plans that consistently underdeliver on access, equity, and care.

Physician leaders from PNHP are available for interviews to speak on the implications of this decision and the urgent need to end Medicare Advantage overpayments. Please contact PNHP Policy and Communications Specialist, Anika Thota at anika@pnhp.org for interview requests.

Physicians for a National Health Program (pnhp.org) is a nonprofit research and education organization whose more than 25,000 members support single-payer Medicare for All reform.

Poll Shows Rising Health Cost Insecurity

New national polling finds a drop in adults’ ability to access and pay for quality health care. Worst off are low earners and racial/ethnic minorities. Half of US adults – more than 125 million people – are “cost desperate” or “cost insecure” regarding health care.

In U.S., Inability to Pay for Care, Medicine Hits New High, Gallup, April 2, 2025, by Dan Winters and Ellyn Masse

The percentage of U.S. adults who have recently been unable to afford or access quality healthcare has reached 11% — equivalent to nearly 29 million people — its highest level since 2021, according to new findings from the West Health-Gallup Healthcare Indices Study, which classifies these individuals as “Cost Desperate.”

The most notable increases since 2021 have occurred among Hispanic adults (up eight percentage points to 18%), Black adults (up five points to 14%,) and the lowest-income households, earning under $24,000 per year (up 11 points to 25%). Meanwhile, there has been no meaningful change in the proportion of White adults or middle- to high-income earners facing the same level of struggle. As a result, disparities in access to healthcare based on race, ethnicity and income are also at their highest point since surveying began.

“Cost Desperate” individuals lack access to quality, affordable care and have recently been unable to pay for needed care and medicine.

“Cost Insecure” individuals lack access to quality, affordable care or have recently been unable to pay for either needed care or medicine.

“Cost Secure” individuals have access to quality, affordable care and can pay for needed care and medicine.

The percentage of adults [who are “Cost Secure”] has reached its lowest level, with only about half of Americans (51%) falling into this category. The demographic groups who saw the biggest drops are Hispanic adults (down 17 points to 34%) and Black adults (down 13 points to 41%).

While households earning under $48,000 annually have always reported more difficulty accessing affordable healthcare, the difficulty has worsened considerably in the past year, climbing by 11 points (to 64%) among those in households earning under $24,000 and 12 points (to 57%) among those in households earning $24,000 to less than $48,000.

Implications:

The erosion of cost security in healthcare comes with serious practical implications for the American public. Recent research from West Health and Gallup shows that 12% of U.S. adults report borrowing money to pay for healthcare last year, amounting to an estimated $74 billion borrowed, and nearly 60% of U.S. adults report feeling “somewhat” or “very” concerned about going into debt due to a major medical event. Other common effects of care unaffordability include significant stress for household members, having to cut spending on basic items such as food, transportation and utilities to pay for care, and staying in an unwanted job solely for the health benefits.

Comment:

By Don McCanne, M.D.

In spite of the fact that the United States spends more than any other nation on health care, our financing system leaves more people exposed to unaffordable costs, and this study shows that it is getting worse.

What is the outlook? The current administration wants to reduce government spending in order to provide large tax cuts for the wealthy. Medicare is likely to be further privatized, shifting more profits and administrative expenses to the private insurers which would be paid through increased premiums, cost sharing, and taxes. Many states are electing to reduce spending on the Medicaid program, leaving patients responsible for more of the costs. The Republicans have made repeated efforts to reduce government spending on the Affordable Care Act and are likely to continue in their efforts. These measures would further reduce the affordability of health care for those enrolled in these programs.

This is so unnecessary. We have a plethora of studies that show that we can provide affordable health care to everyone and pay for the increases in care with the efficiencies inherent in a well-designed single payer system – an improved Medicare for All.

We’ve been saying this for years. Isn’t it about time that we actually do it?

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