Author: Health Justice Monitor

The end of “non-profit” health systems

This post originally appeared in the Health Justice Monitor.

The Financialization of “Non-Profit” Health Systems

Health Systems With Largest Private Equity Investments.
Modern Healthcare
May 3, 2021

Largest Health System Investors in Hedge Funds
Modern Healthcare
May 3, 2021

Both charts are behind a paywall.

From the Charts:

Health System	Private Equity Investments	Hedge Fund Investments
Kaiser Health Plan	$10.180 bil.	$2.820 bil.
Mayo Clinic	$3.869 bil.	$3.421 bil.
Cleveland Clinic	$2.061 bil.	$3.335 bil.
Mass General Brigham	$1.140 bil.	NA
Indiana U. Health	$0.802 bil.	$1.218 bil.
Sutter	$0.414 bil.	$1.132 bil.

Comment by: David Himmelstein and Steffie Woolhandler

We and others have noted the worrisome commercialization of health care, and particularly private equity firm purchases of physician practices, hospitals, and nursing homes.

But commercialization is also reflected in “non profit” health systems’ increasing focus on financial gain. Profits on patient care undoubtedly account for the vast majority of the surpluses they invest, as well as their executives’ multimillion dollar pay packages. This thirst for profit distorts priorities: mental health, primary care, and care for the poor are money losers, while delivering high tech cardiac and orthopedic procedures to affluent patients is the road to riches.

All payments for patients’ care should go for care, not to augmenting institutional wealth and power.

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Comment by Diane Archer: It would be very hard, if not impossible, to undo these private equity and hedge fund investments. But, it would be relatively easy to make them unattractive, if Congress had the will. We would move to a system in which everyone in the US is guaranteed access to care, and the government sets rates for all procedures. If the US were to adopt strategies used in other wealthy nations for ensuring access to care for all, investors would have relatively little interest in health care because the opportunity for profit would be tiny. Today, it appears that the sky’s the limit. And because Congress continues to allow price gouging by insurers, providers, pharmaceutical and durable medical equipment companies, it is effectively sanctioning the premature deaths of thousands of Americans who are forced to go without needed care, every day. Talk about health inequities.

Here’s more from Just Care:

August 23, 2021

U.S. health system implosion/Tipping point
This post was originally published on the Health Justice Monitor.

U.S. longevity down to 78.5 years, other nations 81-84.
U.S. pervasive race disparities in private insurance and health.
U.S. health spending twice the wealthy country average.
U.S. uninsured = 33 million pre-COVID; underinsured = 1/3 of insured.
U.S. healthcare access & outcomes the worst among wealthy countries.
U.S. financial barriers to care for sick high in Medicare Advantage.
U.S. medical debt skyrocketing, impoverishing and imperiling lives.
U.S. insurer profits skyrocketing for years and during COVID.
U.S. ambulance services separate, costly, & unreliable.
U.S. doctors burning out from billing-laden EHR.

Comment: by Jim Kahn
Our “system” is no system.
Thousands of health plans, summing to premature death and massive profits.
By no useful metric is it succeeding.
Unbridled corporate greed prevails.
It’s imploding in front of us.

Is it sustainable?
It can’t be.
When is the tipping point?
To a simple, logical, efficient & generous, equitable, humane solution.
Single payer.
Now.

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Comment: by Diane Archer

We have reached the tipping point. Even small steps now could make a big difference. Negotiated prices for all health care services and treatments, including prescription drugs. A low cap on out-of-pocket costs. A global budget.
Here’s more from Just Care:
August 17, 2021
It’s time Medicare covered dental care
This piece was first published in the Health Justice Monitor.

Medicare and Dental Coverage
KFF
July 28, 2021
By Meredith Freed et al.

Key Findings:
- Nearly half of Medicare beneficiaries (47%), or 24 million people, do not have dental coverage, as of 2019.
- Almost half of all Medicare beneficiaries did not have a dental visit within the past year (47%), with higher rates among those who are Black (68%) or Hispanic (61%), have low incomes (73%), or who are in fair or poor health (63%), as of 2018.
- Average out-of-pocket spending on dental services among Medicare beneficiaries who had any dental service was $874 in 2018. One in five Medicare beneficiaries (20%) who used dental services spent more than $1,000 out-of-pocket on dental care.
Comment by: Isabel Ostrer

The Medicare website explicitly reads, “Medicare doesn’t cover most dental care, dental procedures, or supplies, like cleanings, fillings, tooth extractions, dentures, dental plates, or other dental devices,” so it’s no wonder that a recent analysis by the Kaiser Family Foundation (KFF) found that 24 million Medicare beneficiaries lacked dental coverage in 2019. These disparities in access to dental care are even greater for non-white and low-income Medicare beneficiaries.

As Dr. Sanjeev Sriram said during a rally on July 30th marking the 56th anniversary of the Medicare program, “Your eyes, your ears, and your teeth are connected to your body… These things are not luxury items. Your teeth are not luxury items.” Why, then, in the richest country in the world, do we separate dental care from health care?

The simple answer boils down to an historical anomaly: dentistry has its roots in the barber profession – until the 1800s barbers routinely pulled painful teeth after they finished trimming a patron’s hair – and was consequently shunned by the medical profession. When the first medical schools were created dentistry was not recognized. Subsequently, when Medicare was enacted in 1965 dental services were not covered.

This history ignores that oral health is intimately tied to overall health and well-being. Dental pain is a leading reason for emergency department visits. Poor oral health is associated with numerous medical conditions, including cardiovascular disease and rheumatoid arthritis.

As Congress works towards passing a trillion dollar infrastructure bill that includes Medicare reform, adding vision, hearing, and dental benefits should be a top priority. But while we’re at it, we should push for sweeping health reform. Medicare for All would ensure that all Americans – not just seniors – have access to comprehensive benefits including dental coverage.

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Note: Most dental coverage is extremely limited. People in Medicare Advantage plans that offer dental benefits have very high out-of-pocket costs. As a result, people with dental coverage tend to access dental care at the same frequency or infrequency as people with dental coverage. We should not think that having dental coverage is valuable unless it is comprehensive dental coverage.

Here’s more from Just Care:
August 3, 2021
UnitedHealth Group profits by restricting people’s coverage

This post was originally published in the Health Justice Monitor.

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

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

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

* Specialty Pharmacy Services: In many parts of the country, United has been rolling out coverage restrictions that no longer permit patients to access specialty pharmacy therapies in a hospital outpatient department even if that is where their doctors practice.

* Surgeries: United will no longer cover a large number of surgical procedures performed in hospital outpatient departments.

* Lab and Radiology Services: United has announced plans to restrict coverage for many lab and radiology services provided by hospitals and outpatient departments.

* Primary Care and Specialty Services: United, the nation’s largest employer of physicians, says it will begin restricting coverage for most physician evaluation and management services provided in hospital outpatient departments, including provider-based clinics.

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

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

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

So what does a well-heeled insurer do amid such a windfall? It seeks to reduce people’s coverage, of course.
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The insurer won’t cover nonemergency treatment at non-network facilities outside a policyholder’s service area, which is defined as your state of residence and adjoining states.

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

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

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

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

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

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

Comment by Don McCanne

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

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

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

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

July 27, 2021
Private sector can’t fix health care; we need government

This piece was originally published on the Health Justice Monitor.

How Amazon, JPMorgan, and Berkshire Hathaway took on America’s health care system—and lost, FORTUNE, June 1, 2021, By Erika Fry

Was it a press release, or a declaration of war?

How else to explain the media and market frenzy that followed the announcement, issued on Jan. 30, 2018, that Amazon, Berkshire Hathaway, and JPMorgan Chase — three of the nation’s largest, most high-profile, and best-run companies, then with some $534 billion in revenues between them — were teaming up to take on the ever-more-expensive, ever-more-complex problem that is American health care.

To those who had toiled in the world of employer-sponsored health care for decades, trying but never really succeeding to come up with new ways to control costs and improve outcomes … the statement, from three powerful CEOs, was cause for celebration.

Five months in, the team announced another star would lead the venture: Atul Gawande, the surgeon and influential New Yorker writer whose clear-eyed analysis of America’s dysfunctional health care system had earned him the admiration of Barack Obama and Buffett. In March 2019, the venture finally got a name, Haven.

The project officially sputtered to an end earlier this year. Even with its star power, Haven couldn’t break the black box that is U.S. health care.

So, did Haven make a difference? Some argue the effort undermined progress by raising the obvious question: If they couldn’t do it, who can? In a recent Kaiser Family Foundation survey of very large employers, 85% of top executives think government support will be necessary to control costs and provide coverage.

Gawande goes further and has recently argued that the employer-sponsored system can’t be fixed. Noting how many Americans lost their health insurance in a global pandemic, he said, “A job-based system is a broken system.”

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Comment by Don McCanne

I contend that the Haven health reform effort of Warren Buffett, Jeff Bezos and Jamie Dimon, along with Atul Gawande, was a spectacular success, as an experiment in health policy. They proved beyond any reasonable doubt that the private sector is incapable of fixing our highly dysfunctional health care financing system. The only model that has shown promise is a single payer Medicare for All system. But you cannot set that up as an employer-sponsored system; it will have to be a public system for all the people.

June 14, 2021
How should we pay physicians?
There is not, and there will never be, a perfect system for paying health care providers. Capitated payments, which are upfront, regardless of the number and cost of services physicians deliver, creates an incentive for providers to avoid treating people with costly conditions. Fee-for-service, which pays physicians for services they deliver, creates an incentive for them to deliver more care than necessary. Paying physicians a salary can lead them to be lazy, since they will get paid anyway, or not.

Medicare Advantage, Medicare benefits offered through private health insurers, was an experiment to see whether paying insurers a capitated fee offered any value. To date, it has cost taxpayers and people with Medicare more and there is no evidence that the for-profit health plans deliver as good care as traditional Medicare. In fact, the evidence, to the extent it is available, should elicit grave concern. How can we think a health insurance model like Medicare Advantage for older and disabled Americans, which does not compete to attract members with complex and costly conditions, has any worth?

The federal government also has been testing ways in traditional Medicare to incentivize physicians and hospitals to deliver better care at lower cost and move away from fee-for-service payments. Some of its experiments reward providers financially. To date, there is little evidence that these financial incentives lead to improved quality or lower costs. New research shows that they might be harming some patients. The post below is reprinted from the Health Justice Monitor.

Time and Financial Costs for Physician Practices to Participate in the Medicare Merit-based Incentive Payment System: A Qualitative Study, JAMA Health Forum, May 14, 2021, By Dhruv Khullar, Amelia M. Bond, Eloise May O’Donnell, Yuting Qian, David N. Gans, and Lawrence P. Casalino

“Participating in the MIPS program results in substantial financial and time costs for physician practices. We found that, on average, it cost practices $12 811 per physician to participate in MIPS in 2019. We found that physicians themselves spent a considerable amount of time to participate in MIPS. In 2019, physicians spent more than 53 hours per year on MIPS-related activities, which translates to nearly $7000 per physician. If physicians see an average of 4 patients per hour, then these 53 hours could be used to provide care for an additional 212 patients a year—equal to more than a full week’s work for a physician.”

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Comment by Adam Gaffney

Pay-for-performance (P4P) is an increasingly central part of the American healthcare landscape. The Affordable Care Act added a multitude of new P4P programs to Medicare, including the Hospital Readmissions Reductions Program (HRRP) and the Hospital Value-Based Purchasing Program (HVBP). Then, the Medicare Access and CHIP Reauthorization of 2015 gave us the Merit-based Incentive Payment System (MIPS), a new P4P program that imposes financial sticks and carrots on individual clinicians across the country based on a slew of complicated performance metrics.

Much research suggests that these programs have little effect on patient outcomes. The HRRP was much lauded for apparently reducing readmissions, but later research attributed much (or all) of this apparent reduction to changes in diagnostic coding. There is also some evidenceHRRP may have harmed some cardiac patients. Meanwhile, studies of the HVBP have found virtually no impact. Fewer studies, however, have examined the costs of such programs.

That’s what makes this study, led by Dr. Dhruv Khullar at the Weill Cornell Medical College, so valuable. The researchers interviewed the leaders of 30 physician practices across the nation who participated in the MIPS, and quantified the costs of participation in the program. Overall, they found that we spend more than $12,000 per physician annually to cover the administrative costs of participation in MIPS. Additionally, “MIPS-related activities” suck up over 200 hours of labor per year from practice staff, including 53.6 hours from frontline clinicians. And this is merely for a single P4P program.

There is little evidence, in other words, that P4P programs substantively improve care — and growing evidence that they further inflate our already enormous administrative costs while sapping the time and energy of practicing doctors. For these reasons, P4P should not be included in a Medicare for All reform. Notably, the House Medicare for All Bill excludes this payment mechanism. The underlying political idea of P4P is a fundamentally neoliberal one: the idea that we are all motivated only by pursuit of the dollar. Instead, doctors want to provide the best care they can. That it is not to say that there isn’t room for quality improvement in our healthcare system — far from it — but a paucity of profit incentives is not the culprit. Further, an increasing number of studies show that P4P is redistributive — shifting funds from providers that care for poorer patients (who tend to have worse outcomes) to the providers of the wealthy.

Here’s more from Just Care:
June 8, 2021
Profit motive among hospitals and group practices poses huge risk to patients

This post was originally published on the Health Justice Monitor.

Recent Changes in Physician Practice Arrangements: Private Practice Dropped to Less Than 50 Percent of Physicians in 2020, AMA Economic and Health Policy Research, May 2021, By Carol K. Kane

“2020 was the first year in which less than half (49.1 percent) of patient care physicians worked in a private practice—a practice that was wholly owned by physicians. This marks a drop of almost 5 percentage points from 2018, when 54.0 percent of physicians worked in physician-owned practices, and a drop of 11 percentage points since 2012. In 2020, almost 40 percent of physicians worked directly for a hospital or for a practice at least partially owned by a hospital or health system.

The shift toward larger practice size, which has been ongoing for many years, also appears to have accelerated between 2018 and 2020. The percentage of physicians in practices with at least 50 physicians increased from 14.7 percent in 2018 to 17.2 percent in 2020.

Fifty percent of physicians were employed, 44.0 percent had an ownership stake in their practice, and 5.8 percent were independent contractors in 2020. The employee percentage was up from 47.4 percent in 2018 and 41.8 percent in 2012.”

Comment by Steffie Woolhandler and David Himmelstein

The rapid shift from private practice to employment by large corporate organizations – a shift that’s even more marked among doctors under 40, 70% of whom were employees by 2020 – has important implications for health care reform. Insurers’ profit-seeking is the main threat to the clinical independence of doctors in private practice. But pressure from employers seeking to bolster their bottom line is an additional threat – sometimes the main one – for those whose paycheck comes from a hospital, health system, group practice or private equity firm. Private practitioners lose income if they offer free care to an uninsured patient, open their practice to Medicaid patients who bring scant reimbursement, or advise patients to hold off on undergoing a lucrative procedure. Employed doctors risk losing their jobs for repeated offenses against their organization’s profitability.

Hence, this latest AMA survey data highlights the importance of eliminating profit incentives that bend clinical priorities in both non-profit and for-profit health care institutions. For-profits should be banned, as Medicare used to do in its home care program. Non-profits should be paid global operating budgets and prohibited from retaining any surpluses or using the money not spent on patients for outrageous executive compensation or profit-based bonuses for employees.

May 31, 2021
Learning from Covid-19: Public Funding of Drug Development

This post was originally published on the newly launched Health Justice Monitor.

The covid-19 vaccine patent waiver: a crucial step towards a “people’s vaccine”, BMJ blog, May 10, 2021, By Gregg Gonsalves and Gavin Yamey

“An IP waiver would allow other producers to step in and make raw materials for export for all the current vaccines, industrial parts, and components. It would also simplify agreements for eventual production of more doses. But an IP waiver alone will not solve the covid-19 vaccine access challenge. Two further steps will need to be taken to reach a people’s vaccine. Step two is a transfer of technical know-how from vaccine makers in the global north to regional hubs or directly to manufacturers in the global south. Step three is vast subsidization of manufacturing in LICs and LMICs.

Thousands of lives can be saved immediately through a donation model. But at the same time, we need to get going now on a people’s vaccine, since the ramp-up of vaccine manufacturing will take time. Companies in LICs and LMICs are hungry to get going. When the WHO recently announced it was seeking LIC/LMIC manufacturers who want to produce mRNA COVID-19 vaccines, it was inundated with proposals. Right now, the world’s scientists and politicians need to pull together to figure out how to get the next steps done. Technology will need to be transferred to a set of potential new producers, which will require experts to be mobilized for this task, many at the originator companies themselves. New financial resources must be mobilized to support building new factories or retrofitting old ones and to coordinate supply chains and other operational tasks at a global scale. The sooner we start, the faster we bring an end to the pandemic.”

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Comment by Adam Gaffney

Two weeks ago, England saw zero deaths from COVID-19, a testament to the efficacy of vaccines and to the NHS’ efficient vaccination campaign. Similarly, with a majority of its population vaccinated, Israel (but not the neglected Occupied Palestinian Territories) has seen a remarkable retreat of SARS-CoV-2. And the US appears to be following — my state of Massachusetts announced zero COVID deaths on May 10th. Meanwhile, the pandemic is continuing its horrifying course in nations including India and Brazil. Global vaccine apartheid is, in part, to blame for these divergent paths.

COVID-19 vaccines should have been delivered and distributed, on the basis of need, to every nation on Earth; instead, rich nations (including the US) have signed contracts with pharmaceutical firms allowing them to horde vaccine supplies far in excess of population needs.

As public health experts Gregg Gonsalves and Gavin Yamey noted in the British Medical Journal, vaccine donations to low-income nations could save lives immediately. However, as they also argue, controlling the pandemic worldwide requires ramping up global production of a “People’s Vaccine” unrestrained by patent protection.

Intellectual property regimes have long resulted in artificial shortages of needed pharmaceuticals. The COVID-19 pandemic is no exception, but this could have been avoided. As Physicians for a National Health Program’s 8-point COVID-19 response plan noted more than a year ago.

“…the US should eliminate intellectual property constraints like patents and trade agreements that might restrict the low-cost production and distribution of essential drugs and vaccines, including those developed from publicly-funded research.”

The Biden administration took a step in the right direction last week when it endorsed a waiver of patent rights on COVID-19 vaccines. However, as Gonsalves and Yamey note, this is not enough. While removal of patent protections allows generic drug manufacturers around the globe to cheaply produce small molecule pharmaceutics, the production of more complex biologic agents, including vaccines, additionally requires a transfer of technology, e.g.. the knowhow and trade secrets that go into the production process, as well as financial support. But this is something that we can do — indeed, it should have begun already.

Some have questioned the utility of this approach, or decried “patent busting” more broadly. However, as James Love’s Knowledge Ecology International (KEI) has shown, “companies with pre-existing drug and vaccine manufacturing capabilities can start producing COVID-19 vaccines relatively quickly, if technology transfer is made.” KEI has compiled a database of outsourcing agreements involving technology transfer for COVID-19 vaccine production, and concluded: “In almost all of the cases where information is available the manufacturer said that they were going to make the first delivery, or actually started delivering [vaccines], within six months from the deal announcement date.”

The lessons to be drawn from this episode should extend beyond the pandemic. A drug development system driven by windfalls from intellectual property ownership is neither just nor efficient — nor is it necessary. We already publicly-fund much of the basic research that underlies drug development; we could publicly-fund the whole pipeline — including clinical trials — as well. As PNHP’s comprehensive pharmaceutical proposal, published in the British Medical Journal in 2018, set forth, we need a path of full public funding of pharmaceutical development by the National Institutes of Health. Such a program would deliver agents that would be in the public domain immediately — for the benefit of the entire global community.

May 27, 2021