Making people healthy or making money: What should be the goal of our health system?

In the February 16, 2023 issue of The Nation, epidemiologist Gregg Gonsalves writes about The Fight for the Soul of American Medicine. It is a particularly good and thorough review of the corruption of American medicine by the quest for profit, and the growing resistance of many physicians to its adverse effects on themselves and, more important, the health of their patients.

He cites several other recent articles that emphasize different aspects of this situation. Eric Reinhardt, writing in the New York Times about physician burnout, calls for increased unionization of physicians to counter the power of the corporate controllers of US medical care. Gonsalves also cites a JAMA Viewpoint by former CMS administrator Don Berwick calling out the many ways that greed perverts and destroys American healthcare, using the old Pompeiian phrase Salve lucrum, “Hail Profit”, and naming it an existential threat. Finally, he cites an article in the Journal of General Internal Medicine by Gondi, Kishore, and McWilliams called “Professional Backgrounds of Board Members at Top-Ranked US Hospitals” which identifies the fact that US hospitals are run by people with finance, not healthcare, backgrounds:

At top-ranked US hospitals, the most common professional background for board members is finance, far exceeding representation from physicians, nurses, and other health care workers. Over half (~56%) of board members are from finance or business, while a small minority (~15%) have clinical training or are from the health services sector.

Gonsalves notes how the perversion of healthcare, particularly medical care, by an explicit profit motive leads to the US having both the greatest cost and the worst health outcomes of the wealthy countries of the world, but then goes beyond that to further criticize our reliance on medical care as the avenue to people’s health. He cites the National Academy of Sciences estimate that medical care accounts for only 10-20% of health, with social determinants (and, one could convincingly argue, social determination) accounting for the other 80-90%. Social determination is found in the structure of our society, conceived perversely on democracy and plutocracy, rooted in the extermination of one set of peoples and the enslavement of another, and the racist roots that continue to poison our social structures today. Social determinants – including poverty, housing, food, education, childcare, and others -- are well documented, and are profoundly poorly addressed by us in the US.

This is more than coincidental. Gonsalves refers to a book by Bradley and Taylor, The American Health Paradox: Why spending more is getting us less (which I discussed, along with a NY Times op-ed they wrote, in a blog post To improve health the US must spend more on social services Dec 18, 2011). The essential point of that book is that, while the US spends far more than other wealthy countries on medical care (twice as much as a few and three times or more as much as most others), it spends far less on other social services and social supports. Furthermore, as Bradley and Taylor document, the US is unique in that of all its spending on social service and medical care, the vast majority is on medical, dwarfing expenditures on food, housing, childcare, job training, and social supports that are far more important in maintaining health and preventing disease, while medical care is focused on treating disease once it is there (for those who can access it, at enormous cost).

These are all true things. Our society spends most of its “social services” money on medical care, and it is directed at the most expensive types of care, those that generate the most profit for the big corporate and venture capital players in the hospital, nursing home, and ambulatory care fields as well as the better-documented profiteers in the pharmaceutical and insurance industries. The burnout of physicians from overwork is real and is simply what industrial workers used to call “speed-up”, the demand for more production in the same hours (and for the same pay). In industrial workers, speed-up was and is well known to increase the rate of accidents, both minor and major, and to destroy the psychological health of those workers, so that it is unsurprising that it does the same to doctors and other health workers. What is more surprising is that it has taken so long for them to realize it; over a few decades corporations have taken over almost all of health care delivery, with independent physicians and physician groups that own themselves almost disappearing.

Most hospitals, or “health systems”, are controlled by large corporations – or so they are called if they are for profit. The non-profit health systems, however, including academic health centers, behave scarcely less like corporations, chasing increased revenue (if not “profit” per se), and are, as Gondi et al., demonstrate, just as likely to be led by people with financial backgrounds, rarely medical ones. The good aspect of for profit relative to non-profit hospitals is that they, at least, pay taxes rather than be the recipients of government largesse through being tax-free in return for ostensible, and increasingly unrealized, community benefit. The bad side is that they provide even less community benefit, and generally have worse quality care, than non-profits. In addition, the positive side of the non-profit ledger is enhanced by inclusion of those hospitals in rural areas and inner cities that actually do care for the needy. These, however, are the very ones that are at greatest risk of going bankrupt, and closing because their patients are uninsured or are underinsured, including by Medicaid and even Medicare. A NY Times article recently addressed the increasing closure of rural hospitals, and an even more recent one documents how many rural hospitals are closing their maternity units, because it is a high-cost, low-revenue “service line”, causing rural women to have to travel dangerous distances for pregnancy care and delivery.

In terms of other healthcare operations, such as physician practice groups and nursing homes, “private equity”, venture capital groups, are playing a larger and larger role. Nursing homes have long been primarily private, and of generally poor quality, but they are increasing being acquired by such private equity or health corporations. Those physician practice groups that are not already owned by hospital systems (including academic ones) are often being acquired by the same groups. The results can be disastrous for their patients, particularly when encouraged by the government, as in the ACO/REACH program which I recently discussed (Privatizing Medicare through "Medicare Advantage" and REACH: The Wrong Way to Go!, Jan 20, 2023). Of course, one reason these (misad-)ventures are successful is that their downsides tend to only be apparent once you need care, when you are sick, when the less obvious odious characteristics of such arrangements can stymie you effective access to care. And, of course (and thankfully!) most of us are not sick at any given time.

I have often written that profit, in any form, does not belong in health care. This is absolutely true. The most egregious forms are the corporations that make and sell pharmaceuticals and the insurance companies that existence as parasitic middlemen between health care and patients, not only sucking off money but also limiting care in ways that actually and frequently harm people. But that is only the tip of the corrupt iceberg. Being “non-profit” does not prevent a health system from acting in the same fashion, to maximize revenue, and reward “successful” (i.e., money-making) management accordingly in seven figures.

It is time to have no incentives of any kind that allow any person or organization in health care to make money beyond that which is required to run a high-quality operation and pay workers a reasonable salary or wage. Indeed, the impact on the health care of patients should be the sole criterion for anything that is done or reimbursed.

AND, then, we need to start taking much of the money saved by having less or none going to insurers, pharma, and hospitals and health systems and spending it on ensuring everyone has good financial health care coverage and the social systems needed to support the social determinants of health are in place.

Universal health coverage would save money. And lives. And make life a lot better for people.

Two recent Gallup polls confirm long-standing problems with the US health system. Americans Sour on U.S. Healthcare Quality finds that 

For the first time in Gallup’s two-decade trend, less than half of Americans are complimentary about the quality of U.S. healthcare, with 48% rating it “excellent” or “good.” The slight majority now rate healthcare quality as subpar, including 31% saying it is “only fair” and 21% -- a new high -- calling it “poor.” 

It is important to read that carefully; it does not say that “for the first time in two decades, Americans find problems with U.S. healthcare”. It says that for the first time fewer than half rate it as “good” or “excellent”. And “a new high”, 21%, say it is poor. This is very significant because the opinion one has about healthcare varies tremendously depending on whether one has needed it or not. If you, and your family, have been healthy, and have rarely if at all needed anything other than, perhaps, immunizations or checkups, then you are likely to perceive the system as better. Even then, you probably had some difficulty getting an appointment, getting through to find out the results of any tests you had, and difficulty communicating in general. And it likely cost a lot. If you were just a little sick, it can be irritating, frustrating, and even risk your health to some degree. But if you are really sick, and especially if you need to be in the hospital, it is very unlikely that your experience was even “fair”.

This is something that a lot of people, and a lot of pundits miss. When you don’t need health care, everything is fine, and your insurance is good and pays for all of the nothing you use; indeed even being uninsured is fine. It is just that pesky problem of it not being fine when you need it. Like anything; you don’t regret not having a down coat on a balmy Spring day, or an umbrella when it is dry. There is an old story about a traveler coming across someone whose roof is leaking in the rain. The traveler asks why he doesn’t fix it. The man responds that when it is raining it is too wet to get up on the roof, and when it isn’t, “my roof is as dry as anyone’s.” This is fine as a joke, but not as  healthcare strategy. When you or a family member is in a car accident, or gets a cancer diagnosis, or needs major (or even minor) surgery, or your newborn needs to be in the intensive care unit, is not the time to start to think about your health coverage.

And, yet, that is what many people do, are forced to do, to depend upon hope and prayer. While for some this could be in part an issue of distorted priorities – health insurance is expensive and I could be buying a nicer house or a bass boat –this is not the usual reason. It is more often “health insurance is expensive and I need to pay the rent and buy food and put shoes on my children’s feet”. And if their budget allows them to actually buy health insurance, it tends to naturally be the one that the buyer can afford – and is often inadequate, and have high patient responsibility (co-pays, maximums, and other costs). Thus “having health insurance” deludes you (and many pundits and policy makers) into thinking that you have taken care of this issue. Until you need it.

Which brings us to the results of another Gallup poll, released at the same time, “Record High in U.S. Put Off Medical Care Due to Cost in 2022”. “The latest reading, from Gallup’s annual Health and Healthcare poll conducted Nov. 9-Dec. 2, is the highest by five points and marks the sharpest year-over-year increase to date.” Not a surprise given the information above. You can put off going to the doctor for a checkup, or a cold, or a vaccine, or even for treatment for a significant chronic disease like diabetes, high blood pressure, heart disease – at least if is not bothering you too much – but it is not very wise, since ignoring such conditions is one way to get you really sick, and into the hospital, and maybe into intensive care, and maybe, even, die. However, since we don’t have a universal health program in the US, too many people simply cannot afford to get healthcare, especially anything that is costly. I am tempted to say that there is a price list, and, like buying a car or a house or a coat, you shop within your means. Except, of course, there is no price list, and you hardly ever know what a medical procedure will cost. And there are often no good alternatives to the expensive treatment; in this way it is definitely not like buying a perfectly functional, if less fancy, car.

A third important article was published in June 2022 in the Proceedings of the National Academy of Sciences USA. “Universal healthcare as pandemic preparedness: The lives and costs that could have been saved during the COVID-19 pandemic”  by Galvani, Parpia, Pandey, and Fitzpatrick, estimates that during the pandemic a universal healthcare system would have saved 212,000 lives and $105.6B from COVID alone, in 2020 alone. This would have risen to about 338,000 lives through March 2022, as reported on in the Scientific American, and would have been on top of another $438B saved from other causes besides COVID. That is a lot of money. And a lot of lives. More than 100 times the number of lives lost in the World Trade Center attack. And (see the polls from Gallup) that is not counting the people who didn’t die, but could have. Who lost their health, their ability to work, their life savings, their ability to provide for their families.

So what is this “Universal Healthcare” thing? Some kind of pie-in-the-sky dream of liberals that would bankrupt the US? No, it is what they have in every other wealthy country in the world, and many that are not so wealthy. Those countries that don’t consider health and healthcare to be a consumer luxury, that consider it to be about people’s health rather than something for the private sector to profit from. Remember, that $105,600,000,000, and that $438,000,000,000 (2020 alone) is not going into the garbage. It is going to health insurance companies, and health care providers (by which we mean not only – or even mainly – doctors, but rather hospitals and “health systems”) and their suppliers, especially drug companies. This is detailed in the latest publication on this topic (regularly updated, and rarely improving) from the Commonwealth Fund. “U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes” shows that the US is the only wealthy country that does not guarantee health care coverage to all its people, and still spends 2-4 times as much as those other countries. The money goes, of course, to private profit. There is a name for this: corruption and graft. And words for it. Mostly obscene.

So why don’t we do something about it? We have tried – President Truman tried to get a national health insurance system in 1948. Defeated, sadly, with support from labor unions who thought it would undermine their success in getting health insurance through negotiations with employers (there’s a quaint memory). Medicare, a national health insurance system for seniors and the disabled, was passed in 1965 under President Johnson. So was Medicaid, a state/federal partnership to provide coverage for many (but certainly not all!) poor people. In 2010, under President Obama, ACA (Obamacare) was passed, which extended health coverage to many (but certainly not all!) of those left out, who were unable to afford individual health coverage but were not poor enough to get Medicaid (and in most states that is desperately poor!).  But nothing comprehensive, nothing that covers everyone, nothing that guarantees you won’t be broke and in debt at the end. Nothing that resembles the systems in any other OECD (i.e., wealthy) country.  Why?

Because private corporations make lots of money, from you, and from your employer, and from the government, and very much do not want that to go away. Indeed, as I discussed recently (Privatizing Medicare through "Medicare Advantage" and REACH: The Wrong Way to Go!, January 20, 2023), the private sector is expanding its leech-like sucking of public funds through privatization of Medicare by programs like Medicare Advantage and ACO/REACH. And are willing to spend some portion of that huge amount of money on lobbying – and making contributions to – members of Congress, to make sure that their profits are maintained at the expense of the health and lives of the American people, not to mention their money.

It is  that simple. The health and lives of people vs. the profit of corporations. Don’t be fooled by liars or obfuscators. It is time to end this incredibly expensive boondoggle that costs the lives and health of so many of us. Write your Congresspeople and demand Medicare for All, or any form of completely universal healthcare, now.

Or sooner.

Privatizing Medicare through "Medicare Advantage" and REACH: The Wrong Way to Go!

The things to remember about “Medicare Advantage” plans is that 1) they are not Medicare, and 2) they may offer little or no advantage. They are a form of private insurance, cost Medicare a lot of money, and in some situations (especially when you are sick) can indeed hurt you.

Let’s get to the first. Medicare was created in 1965 to provide universal health care to senior and disabled people. It was a tremendous victory for those who had fought for decades to have a universal health insurance system in the US. It was also strongly opposed by those who thought their pocketbooks might be hurt, specifically the AMA, as well as other right-wing forces that just opposed everything that might actually help most people (and thus most Great Society, and even New Deal, programs). The supporters never envisioned that Medicare would be the end of the road, especially when, in the same year, Congress passed Medicaid, a federal-state collaborative program that was aimed at helping the poor access health care. They assumed that it would be expanded to finally include all Americans.

Of course, many of the opponents of Medicare didn’t give up either. The AMA, while never contrite, shut up about it after it became clear that rather than hurting physicians’ incomes, Medicare was a bonanza for them, ensuring payment for services had often previously been unable to collect for. Those who hate programs that benefit people, of course, are still around. But the most insidious and dangerous threat is from those who see any government program as a way to make lots of money, especially if it can be privatized without much risk to the private sector investors. This is really how Medicare (and many other public programs) have been most insidiously and effectively attacked -- by privatizing its programs to guarantee lots of money for the profit of the private companies, and largely insulate them from risk.

Enter Medicare Advantage (MA).  MA plans are largely run by insurance companies (and sometimes by venture capital groups) and are called “Part C” of the Medicare program, but they essentially take people out of Medicare and put them in a private managed care program. These companies then get the money that would have gone to the Medicare program (we’ll call it Traditional Medicare, or TM) for you. Plus they get extra money. Why do private companies caring for you under MA get more money than TM allocates for you? Because they do, right. Because the pro-for-profit “caucus” (PFPC) of the Congress, from both parties, wanted to increase the portion of people in Medicare entering MA. So these companies could make more money. And contribute more to the members of the PFPC.

Remember the old phrase “feeding at the government trough”? That is what these companies do, very well. Virtually no public function that is privatized becomes more effective at delivering service, since the amount of profit generated is increased by providing less service. To the extent that it sometimes seems to look better, it is almost always because of 2 things: that the public services were starved for funding in the first place, making them look bad and justifying the call to privatize them, and that private companies’ inefficiency, corruption, and overall bad acting is harder to ferret out than government agencies’.

How do MA plans make more money? In the traditional HMO manner, they limit access to a “panel” of doctors and hospitals. These are not necessarily the worst ones in your area, but they are the ones that the plans have negotiated the best deals with, for which they pay the least. They attract members with some perks like vision care, hearing care, etc., which can be useful if one is generally healthy. And of course, MA plans vary in quality and in performance; some of those covering state employees by contract have performed better possibly because of having a more educated, informed, and influential client base. But this is not always the case; see the example of city workers’ resistance to Mayor Eric Adams of NYC trying to push retirees into MA.  

And do not consider for a moment that the goal of any of these programs is to provide excellent health care: it is to make money. And that they make money is demonstrated by the aggressive marketing that Medicare-eligible people get from these companies, not to mention television advertising. The Commonwealth Fund recently published a piece called “The Role of Marketing in Medicare Beneficiaries’ Coverage Choices”, which describes this in detail. ‘Soaring private plan enrollment has led to a sharp increase in marketing and sales efforts, some misleading and inaccurate.’ It goes on to explain in how MA works and how they market. It also notes that about 1/3 of Medicare beneficiaries used an insurance broker; a boon to that private sector industry as well. MA plans can keep 15% of the money they get for profit and overhead, having to spend only 85% on actually delivering care (which they call the “medical loss ratio”!)

The way that MA plans make money is enrolling lots of people, many of whom are healthy (Wow! Free gym membership!) and don’t cost them much, and then submitting bills that make their patients look like they are as sick as possible thus inflating their bills (called “upcoding”). At best this an effort to maximize revenue from Medicare, which there is no incentive to do in TM. Plus, if they can get certain poor people enrolled, they can collect an additional $350 for each one regardless of whether they actually provide any care! This was implemented with the theoretical idea of increasing equity by incenting the enrollment of poor people, but really has the opposite effect since those folks now have their care restricted when they are sick by the private insurance company, while under TM it would not be. And, of course, they make money by fraudulently overbilling Medicare for billions of dollars, winning the Lown Institute’s 2022 “Shkreli Award” for bad behavior by corporations!

 

MA is not the only way Medicare is being privatized. As I have written before ("Private Equity": Profiteers in nursing homes, Medicare Advantage, DCEs, and all of healthcare, Sept 16, 2022; Direct Contracting Entities: Scamming Medicare and you and bad for your health!, Feb 7, 2022), the Center for Medicare and Medicaid Services Innovation Center (CMMI) implemented Direct-Contracting Entities (DCE), which was renamed REACH as of January 2023 (without any other significant change). REACH has allowed the creation of mostly investor-owned companies that contract with primary care practices (often already owned by corporations, not owned by the doctors) and voilà, all of those doctors' patients are in their REACH group, which then gets the money that Medicare would have paid for you. What is really tricky is that, unlike MA, you didn’t have to choose it; they choose for you by contracting with the group (often corporate) that owns your primary care practice! And your doctor may not even know that s/he is in one! You can only get out if you can find another doctor who is not in one – particularly difficult in rural or urban underserved areas where even finding a doctor is hard. Not to mention that REACH is even more lucrative than MA, as it allows the private company to keep 40% of its take as profit and overhead, spending only 60% on patient care!

The effort to privatize Medicare is absolutely the wrong way to go. The way to go is to keep the structure of Traditional Medicare, where anyone can use any doctor or hospital, where there is no profit taken out, and overhead is about 2%. And then increasing its benefits so that it covers 100% (not 80%) of approved charges so people don’t have to get a Supplement Plan, as well as cover dental, vision, hearing, etc. This is affordable, since it could be funded by money now used to generate huge profits for private investors, but could actually be used to improve our healthcare. While we still need to address access in terms of geography and specialty distribution, eliminating the profit motive will make major steps toward access and improved quality.

Then we can have Healthcare for All.