David Dayen reports on former Center for Medicare and Medicaid Services (CMS) head, Tom Scully, privatized and destroyed Medicare for The American Prospect.
Back in 2002, Scully, the administrator at CMS under President George W. Bush, attacked the incentives in the Medicare program. At the time, he was focused on hospital incentives to inflate patient costs, saying “People follow the money, and they’ll find the little niches in the program and they’ll game it, and that’s what happened here.”
Scully, himself, has taken advantage of these “niches” since leaving government in 2003 for private equity. Scully’s view about health care is Darwinian. People should pay out of pocket for their health care, as they do for their vegetables–survival of the fittest–with help only for the poor.
Scully doesn’t recognize the value of Medicare negotiating prices for physicians and hospitals. Of course, that’s what has kept Medicare spending down for older Americans and people with disabilities. It’s also one key way other countries get value from their health care systems. In Scully’s view, if you get sick, you should pay for it.
It’s thinking like Scully’s that has pretty much destroyed our health care system. Physicians and patients have suffered as private equity and big corporations have seen their profits soar. “Scully’s fear of big-government price-fixers has led to the triumph of big private profit-takers, at the cost of doctors, nurses, and patient care.”
The corporate takeover of health care has also made navigating the system challenging. It’s now so complex. Choice and competition are meaningless. They have not improved quality and they have only increased costs. Unlike with airline travel, restaurants, housing or automobiles, you have virtually no idea if the health plan you choose will deny and delay your care and endanger your health. All you know is that there’s a decent chance that your insurer will not cover your care.
Health care corporations are in business to help their investors first and foremost. And, in the health care space, they can do so pretty easily, with little accountability, by simply extracting money from the system. Scully knows this full well and helped conceive, design and implement the algorithms that now power NaviHealth–a software AI system that helps insurers to keep more of their government payments by denying or limiting home health, nursing and rehab coverage.
Scully sold NaviHealth before it was bought by Optum, a division of UnitedHealth. He then went on to push Congress to allow for-profit PACE programs and to invest in InnovAge, which was buying up PACE programs. Soon after, CMS addressed allegations that InnovAge was denying thousands of PACE patients medically necessary services and suspended enrollment in many of InnovAge PACE programs for a time.
As former head of the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services, Rick Gilfillan, explains: “When you privatize social goods like health care, you end up getting the worst of both worlds. Because it’s seen as a public good, you can’t let the marketplace operate as it normally would … you get captured regulatory processes that end up facilitating the extraction of wealth by the private sector.”
Here’s more from Just Care:
- PACE helps older adults stay in their community
- For-profit PACE programs: Cause for worry?
- 19 Leaders Support CMS Medicare Advantage Proposed Payment Changes using data from United Health Group’s Study
- Congress must overhaul the way it pays Medicare Advantage plans
- Medicare Advantage plans are an “Insatiable Cash Monster”