Healthcare: Never doubt patterns

American healthcare is too profitable. It’s advantageous because Americans don’t take care of themselves and because there are too many companies between patients and doctors.

The pattern in healthcare can be summarized in one word: profits. Pharma takes a lot of heat, but PBMs, hospitals, and insurers are raking in cash. Even hospice facilities are getting into the money business.

According to the New Yorker, it might be counterintuitive to run an enterprise wholly dependent on clients who aren’t long for this world. Still, companies in the hospice business can expect some of the most significant returns for the least effort of any sector in American health care. Medicare pays providers a set rate per patient daily, regardless of how much help they deliver. Since most hospice care takes place at home and nurses aren’t required to visit more than twice a month, it’s not challenging to keep overhead low and to outsource the bulk of the labor to unpaid family members—assuming that willing family members are at hand.

Then there are the Medicare Advantage plans being advertised by former celebrities. Over the past two decades, it has become clear that Medicare Advantage does not result in improved care for less money. Instead, it will come as no surprise to Americans familiar with the health insurance industry that insurers turned it into another profit center while putting bureaucratic roadblocks in the way of patients.

Insurers in Medicare Advantage are paid a flat fee by the government based on the enrollee’s health. These insurance companies often want their members to appear as ill as possible — at least as far as the Feds are concerned. They might “upcode,” in doctor speak, maximizing the money they receive. (The federal government calls that practice “fraud” and has sued several of the largest insurers in federal court for it, including Anthem and Cigna, in ongoing cases.)

Multiple studies have found that seniors on Medicare Advantage cost the government more than those in the traditional program, exactly the opposite of what is intended. A government advisory panel recently estimated the overpayment was $12 billion in 2020.

That’s $12 billion

Washington Post

Justice Department allegations are playing out in federal courts against UnitedHealth Group, Cigna, and Anthem. The government’s Office of Inspector General has audited Humana and found it overbilled the government. United Healthcare, which is under the umbrella of UnitedHealth Group, and Kaiser Permanente denied any improper conduct.

Then there is the swamp called electronic health records. EHRs were supposed to make it easy for patients to share their medical records with doctors. That only happens if your doctors are in the same network. If you move or see an out-of-network physician, chances are you’re going to be sending in request forms and following up via a phone call.

The profit motive in health care can be a very bad thing. The incentive to maximize financial gain — and not always for the benefit of patients — can bring us too many surgeries and insufficient primary care providers. At its worst, it has led to massive fraud and abuse.

A paper, Financial Profit in Medicine, says, “in recent years, we have seen health care become increasingly business-oriented with more for-profit entities and private equity investments,” said Thomas G. Cooney, MD, MACP, chair, Board of Regents, ACP. “We need to be sure that profits never become more important than patient care in medicine.”

Clearly the love of profits are more important than people.