Turns Out That What You Don’t Know Can Hurt You
Commercial Health Insurance companies operate as investment banking firms and Private Equity funds - What are the costs to our health and wellbeing? | By Greg Heller May 29, 2024
Dr. Peeno is right, of course. She shines a light on some hard truths that billion-dollar healthcare conglomerates would rather keep in the dark, and speaks with a moral courage and clarity that we do not deserve.
I want to offer a different perspective, one that comes from my position as a lawyer sitting outside of the healthcare system. The situation is, if anything, even more dire than Dr. Peeno says, because the problems she identifies are woven so deeply and perhaps ineradicably into our financialized healthcare landscape. But it is also, in a way, more hopeful, because systemic problems are susceptible to systemic solutions, and the last time I checked, the people still ran this country.
Back in the 1990s, the “5 whys” framework found its way into popular culture. It’s still useful, and maybe essential. The basic idea is that if you ask a series of “why” questions you will eventually find your way down to the root causes of a problem–to insights deep enough to allow us to chart a more certain course to real solutions. The first why is never enough.
My colleagues and I are patient safety lawyers. We try to help families who are harmed by system failures in healthcare, and by reckless decisions made by doctors who know better. In other words, by malpractice. We spend part of every day talking to people about bad health outcomes, and trying to figure out how and why it happened. Sometimes, we get to ask “why” questions of smart nurses and doctors, under oath. Almost always, we have the privilege of just listening to families, as they navigate and report on their experiences with the health care system.
It’s a skewed sample. I get that. Nobody comes to see us when things go well. But for the situations that do end up in our office, I find a common, almost universal, theme a few whys down. At some point in the chain of events leading up to catastrophe, there was a decision, or a series of decisions, that had absolutely nothing to do with a doctor’s individualized decision about what the best course of action was for this specific patient in this specific situation. Instead, there were decisions driven by whole suites of invisible (to us) incentives, and by decisions that are coming from anything but the doctor-patient relationship.
“This is not an accident. By and large, these things are hidden because they have to be. As Dr. Peeno reminds us, we cannot make the necessary corrections if we do not have a systematic understanding of what is going on, and why we are so off course. The current state of affairs needs secrecy to survive.”
-Greg Heller
A patient with Stage IV cancer suddenly goes from a chemotherapy drug that is working to a previous-generation drug that might or might not work. Why the change? Well, that’s because the copay went from $40.00 to $400.00, and they cannot afford the more expensive drug. Why did the copay go up? Because there was a formulary change. Why the formulary change? Well, if you’re reading these articles, you know exactly why. Somebody upstream decided that the formulary change would increase profits or drive away less healthy–which, as used here, means less profitable–patients. Or both. (And no, we didn’t need to get all the way up to five. You rarely do, once you know what you are looking at.)
The patient with a condition inside the eye that is not photographed, which means that subtle changes in future visits cannot be detected or noted by the doctor? Well, that’s because it was a routine visit. Why does that matter? Well, that’s because the reimbursement schedule for a routine visit does not cover intraocular photographs. Why does a routine visit not cover photographs? Well, that’s because there’s an exhibit to a secret contract (one the patient never sees) that says so.
Why was this baby born with brain damage? Well, that’s because of an overdose of pitocin that squeezed off oxygen to his brain during birth. But why was there an overdose of pitocin? Well, that’s because the overnight nurses weren’t properly trained on the hospital’s pitocin policy. Why weren’t they properly trained? Well, that’s because of staffing shortages and turnover. And why were there staffing shortages and turnover? Well, that’s because a private equity firm bought the hospital, and was basically stripping it for parts.
Why was the patient’s sarcoma missed? Because the patient and his doctor did not notice the difference between usual aches and pains and a persistent, localized, progressively worsening problem. How did they miss that? Because the doctor didn’t spend enough time with the patient. Why didn’t the doctor spend enough time with the patient? Because he couldn’t. Why couldn’t he? Because there is only so much time in the day, and because of documentation burdens. But why did those barriers exist? Because of the practice’s contracts with managed care organizations.
I could do this all day long.
It is the rare situation indeed that does not lead, on sufficiently careful examination, to a foundational “why” that involves or arises out of the financial relationships that define our healthcare system. And what is striking about all of these financial levers and incentives–the diamond-bright, arrow-straight through-line–is that they are not accessible to or fully understood by the only two people who really matter: the doctor and patient facing each other in a room. (If the doctor is facing the patient at all and not looking at a computer screen. Apparently even our metaphors cannot survive the broader forces of financialization and the sort of short-term, this-quarter expediency that is passed off as efficiency these days.)
This is not an accident. By and large, these things are hidden because they have to be. As Dr. Peeno reminds us, we cannot make the necessary corrections if we do not have a systematic understanding of what is going on, and why we are so off course. The current state of affairs needs secrecy to survive.
We need to not be lulled by fake transparency. Your Medicare Advantage prescription plan might have a list of drugs and copays. Useful, for sure, to a subset of informed consumers with known conditions. But unless you have a time machine and know how and when you are going to get sick, plus a comprehensive view of what new medications are coming down the pike and what new indications for existing medications are on the way, this is always going to be a rigged game. Your health insurer might have a well-designed list of policies. But just try to get access to the financial schedules and incentives that really drive utilization. Your insurance company might do what mine did, and proudly announce that some company you never heard of is now going to manage some of your benefits. Just try to get access to the contract with that company, and to the financial arrangements and incentives that are the inescapable drivers of the company’s behavior. It’s not going to happen.
Things do not have to be this way.
Most doctors and patients embrace traditional Medicare. As compared to any funding mechanism out there, it is demonstrably and unassailably the most cost-effective way to get dollars to patient care, and keep those dollars out of the hands of middlemen. At the end of the day, I think, the fundamental and foundational reason for this is not because Medicare is, by and large, designed and operated by a lot of gifted, well-trained, dedicated people–although that is certainly true. But that’s the result, not the foundational why or at least not the only one. The foundational why is because Medicare is operated in a way that is open, transparent, and subject to the checks and balances of our democratic system of government. On the day that I’m writing this paragraph there happens to be a national conversation about mammograms for breast cancer screening–a couple of House members have sponsored a bill that will expand its availability for at-risk populations, but there will be another issue on the day that you are reading this paragraph. Traditional Medicare’s systems and criteria are, by and large, the subject of an impressively rigorous and well-defended process, with both the decisions and the analysis that created them accessible to anyone with an internet browser. You might not like the result, but you are going to know how they got there and how to contribute to efforts to change it. And it’s going to happen in daylight.
Contrast that with Mr. (Andrew) Witty’s company, UnitedHealth Group (UnitedHealthcare and Optum included), or indeed any other commercial health insurer. Just try to get Medicare-level transparency with the Milliman Care Guidelines that a private health plan is using, to determine whether or not a sick parent will be admitted to the hospital. (After you hit that wall, go ask their owners at the Hearst Foundation.) Try it with Quartet, the Private Equity-backed gatekeeper that sits like a mute sphinx between someone’s kid and the behavioral health care that their doctor says they need. And try to get visibility into the impossible demands that for-profit insurers place on doctors who want to be the thoughtful, patient, careful clinicians described by Dr. Peeno. You might get a few clicks deep–but trust me, you are only seeing what they want you to see.
Viewed through this lens, parts of our necessary national conversation around healthcare funding are seriously incomplete. The moral failings that Dr. Peeno puts on such stark display are of course true. But they are not a complete account of the fundamental why–or at least a complete account of the fundamental whys that we can alter. Mr. Witty could undergo a Damascene conversion and resign in shame tomorrow, and there would be a gaggle right behind, elbowing each other aside in a bid to take his place.
Nor is the economic conversation enough to carry the day. Traditional Medicare is demonstrably the best way to get the largest piece of every dollar to patient care. And that dollars and cents argument has not, collectively, moved us to effective change.
If one of the fundamental whys is secrecy, then perhaps we should be talking more about that. Why is it okay that national efforts to enforce mental health parity invariably run into a gray fog of incomplete and inadequate information provided by insurers and health plans? Why aren’t we allowed to see, analyze, and understand every secret lever that is shaping the care and attention that we get from our doctors? Why are we trusting our health–this one precious life–to secret contracts entered into by others?
“This is not, of course, the world that we currently live in. But it is absolutely one that we have the power to choose.”
-Greg Heller
And there is a next step to this, perhaps even more ominous. UnitedHealthcare, CVS/Aetna, and their ilk are wreaking all the havoc they are wreaking notwithstanding the fact that they are publicly traded companies–just as the Blue Cross companies are doing everything that they do with at least a legacy veneer of broader public purpose.
Private Equity—an industry defined by secrecy—looks at the changes and constrictions caused by these publicly traded companies and the Blues and says “hold my beer.” Private Equity is exploding across the healthcare landscape, and there is a growing body of evidence, anecdotal and otherwise, that this is harming patient care. And it’s not just patients: “Anecdotal and journalistic accounts link the corporatization from PE with physicians’ deep moral and health crisis.”
But if Private Equity’s secrecy is an essential element enabling its predations, that also suggests a path to safety for the rest of us. If you are going to buy up a local pediatric practice, a hospital system, or a group of behavioral health clinics, or if you are going to team up with a Private Equity company to “manage” health benefits, we get to see what changes that causes in the provision of services and health outcomes, we get to see what deals have been struck, and we get to see where the money goes.
This is not, of course, the world that we currently live in. But it is absolutely one that we have the power to choose.
ABOUT THE WRITER
Greg Heller is a partner at Feldman Shepherd Wohlgelernter Tanner Weinstock Dodig, LLP in Philadelphia.
CITATIONS
Erin Fuse Brown and Mark Hall, Private Equity and the Corporatization of Health Care, 76 Stanford L. Rev. 527, 546 (2024).
ADDITIONAL RESOURCES
The Private Equity Stakeholder Project
In April 18, 2024 the World Health Organization launched a Patient Safety Rights Charter at the Global Ministerial Summit on Patient Safety. It is the first Charter to outline patients’ rights in the context of safety, and will support stakeholders in formulating the legislation, policies and guidelines needed to ensure patient safety. Patient safety refers to the processes, procedures and cultures established in health systems which promote safety and minimise the risk of harm to patients. Everyone has the right to safe health care, as established by international human rights standards, regardless of their age, gender, ethnicity or race, language, religion, disability, socioeconomic status or any other status.