Primary Care, Private Equity, and Profit: How to ensure poor quality care for the American people

 I -- and many others -- have written (frequently and recently) about the abuses of for-profit companies, and especially private equity companies, and “non-profits” that act like for-profits in health care (Private equity, private profit, Medicare and your health: They are incompatible, May 11, 2023; Privatizing Medicare through "Medicare Advantage" and REACH: The Wrong Way to Go!, Jan 20, 2023; "Private Equity": Profiteers in nursing homes, Medicare Advantage, DCEs, and all of healthcare, Sept 16, 2022). But despite our efforts, it doesn’t get any better. Indeed it gets worse.

Drs. David Himmelstein, Steffie Woolhandler, Adam Gaffney, Don McCanne, and John Geyman, have been leaders in the campaign for a national health insurance plan (e.g., Medicare for All), published an article 18 months ago in ‘The Nation’ (March 31, 2022) titled ‘Medicare for All is Not Enough’. They go through the ways in which the ownership of our health system has changed, particularly over the last decade, to focus on profit for the private owners rather than “health care”. That is to say, while a single-payer Medicare for All program would be a great thing and would limit the negative impact that for-profit insurance companies wreak on our collective health – which is considerable – as long as for-profit companies continue to own, and to increase their share of, our actual health delivery systems (hospitals, nursing homes, pharmacies, and physician practices) there will be terrible consequences, with those single-payer dollars flooding into investors’ pockets rather than patient care.

Insurance companies like United Health and giant pharmacy firms like CVS own large portions of our practice and health delivery sector. And the role of private equity companies and investors, with their “buy ‘em and burn ‘em” approach to acquisition and profit, in taking over our delivery system is at least as terrifying. As the authors state:

At least UnitedHealth and CVS plan to stay in business for the foreseeable future, and may be constrained by the worry that substandard care will damage their reputation. Private equity companies face no such constraints. They promise investors quick profits, and often sell off the businesses they’ve bought within five years, often after stripping their assets and loading them with debts that hobble future operations.

On top of who will own our care provision, there also is the issue of who will provide the care. Most developed countries, with more rational health delivery systems, rely on primary care physicians and other clinicians far more than the US does. In those other countries primary care is at least 30-40% of the physician workforce, while here it is closer to 20% and dropping, an issue I have written about often (see, for example, What is the problem with Primary Care? The US health system!, March 22, 2022).  Primary care clinicians – family physicians, pediatricians, and general internists, and the NPs and PAs who work with them – can provide not only cost-effective care but care that is comprehensive, continuous, and reassuring to people and families because they know the person who is providing it and have a relationship with them. And the cost-effectiveness is not (only) about the fact that they earn less money (see below) but because they are in a position, as a result of taking care of the “whole person” and having a long term relationship, to more wisely utilize resources when necessary. Nonetheless, there is a definite shortage of primary care clinicians, as anyone who has tried to find one recently, because they moved, or their physicians retired or had their practice bought out by a large company like Optum (a subsidiary of United Health Care, which has become UHC’s major profit center as documented by former insurance executive Wendell Potter in his “Health Care Un-covered” substack) or, sometimes in response, went into a “concierge” or “boutique” practice, can testify. Elisabeth Rosenthal, editor of Kaiser Health News, documents this in a recent piece in the Washington Post, “The Shrinking Number of Primary Care Physicians is Reaching a Tipping Point”. She notes that “fewer medical students are choosing a field that once attracted some of the best and brightest because of its diagnostic challenges and the emotional gratification of deep relationships with patients.” And she makes the important point that

One explanation for the disappearing primary-care doctor is financial. The payment structure in the U.S. health system has long rewarded surgeries and procedures while shortchanging the diagnostic, prescriptive and preventive work that is the province of primary care.

Don’t forget that one. Rosenthal discusses the terrible experience of colleague Bob Morrow, MD, who, under financial pressure, finally had to sell his decades-old practice, and then, watching how the new owner ran it (suffice it to say, not in the best interests of the patients), leave medicine. Morrow is not a depressed person, but reading about what has happened to him and thousand of other primary care doctors is enough to make you depressed.

In a data-driven “Report Card” on primary care in the US, the Milbank Memorial Fund ranks it poorly on all front, although not on the quality of the physicians:

This first national primary care scorecard finds a chronic lack of adequate support for the implementation of high-quality primary care in the United States across all measures, although performance varies across states. The scorecard finds:

1.      Financing: The United States is systemically underinvesting in primary care.

2.      Workforce: The primary care physician workforce is shrinking and gaps in access to care appear to be growing.

3.      Access: The percentage of adults reporting they do not have a usual source of care is increasing.

4.      Training: Too few physicians are being trained in community settings, where most primary care takes place.

5.      Research: There is almost no federal funding available for primary care research.

The  report card, created for Milbank by the Robert Graham Center (the policy arm of the American Academy of Family Physicians, AAFP), not only identifies these deficits, but also the importance of solving them for the health of the American people. 100,000,000 people without a primary care doctor, only able to see a physician (if they can see any physician) who has a narrowly focused, disease-based practice is a real problem. We need those specialists for when we are diagnosed with a particular condition that requires their expertise, but they are often not knowledgeable about conditions outside it. Moreover, the primary care clinician does not only care for many conditions; much more important is that they care for the person who has those conditions.

The report also endorses the conclusions from the National Academy of Science, Engineering, and Medicine (NASEM) from 2021, recommending that the US:

1. Pay for primary care teams to care for people, not doctors to deliver services.
2. Ensure that high-quality primary care is available to every individual and family in every community.
3. Train primary care teams where people live and work.
4. Design information technology that serves the patient, family, and interprofessional care team.
5. Ensure that high-quality primary care is implemented in the United States.

Finally, for the moment, an effort is actually being made in Congress to try to increase the number of primary care clinicians.  In an uncommon bipartisan effort, the bill is cosponsored by Bernie Sanders (I, VT), chair of the Senate HELP Committee and Roger Marshall, MD, an OB/GYN and conservative Republican from Kansas, as reported by Jake Johnson in Common Dreams, Sept 14, 2023. It’s a good thing to have bipartisan support, but it is, sadly, unlikely to have a major effect on increasing the primary care physician supply. Funding in the bill – about $6 billion -- goes mainly to Community Health Centers (CHCs), especially Federally-Qualified Health Centers (FQHCs). These centers can be, and usually are, good. They provide care to lower-income people and communities where access to other clinicians is difficult. Republicans like them because they are not actually “government” programs, but responsible only to their boards of directors. But, while they often rely heavily on primary care, and expanding them will increase the number of jobs for primary care clinicians, it does nothing to increase the supply of those clinicians, to convince medical students to enter family medicine, pediatrics, and general internal medicine instead of much higher-paying subspecialties.

I mention money, the Milbank report mentions money. It is a lot about money. It is increasingly difficult to convince students to enter fields where their income is likely to be a fraction of that of subspecialists (even if much better than that of most Americans), especially in the context of huge educational debt (frequently over $250K), and the lack of respect given by the medical profession and often the society at large to primary care. And, not at all to be minimized, the takeover of so many practices by for-profit corporations and private equity, with situations like Dr. Morrow’s becoming the norm rather than the exception. Some subspecialties make 2-3 or more times that of primary care doctors, which makes it increasingly difficult for students to decide to enter primary care. And while some of these subspecialties have grueling work hours (e.g., general surgery) others have much more circumscribed work hours, often shift work and little call.

There IS certainly something the federal government could do. The Center for Medicare and Medicaid Services (CMS) sets the relative reimbursement for physician services (office visits, procedures, etc.) and virtually all private insurance companies reimburse based on multiples of the Medicare rate (traditionally more, but now often less). So all CMS has to do is to revise its fee schedule, increasing the relative value of primary care visits relative to procedures. Of course, there will be great opposition from other specialists; indeed the “RUC”, a non-government committee that advises CMS on this ratio is completely dominated by subspecialists (Changes in the RUC: None.. How come we let a bunch of self-interested doctors decide what they get paid?, July 21, 2013). CMS is not required to follow the recommendations of the RUC although it usually does; CMS could ignore or adjust what the RUC recommends, or reconstitute the membership of the RUC to have more primary care doctors. Primary care physicians do not need to make as much as the highest-paid subspecialists (indeed neither do those subspecialists!) but the difference needs to be decreased. Studies have indicated that if primary care doctors earned 70% of what subspecialists do, income would no longer be a significant factor in specialty choice.

Addressing this income gap is critical for increasing the number of primary care clinicians. Then there is a lot else to do, like getting for-profit corporations and private equity out of healthcare altogether.

 

For a “humorous” depiction of the takeover of primary care by for-profit companies like Optum, check out this short piece by the brilliant Dr. Glaucomflecken: https://twitter.com/i/status/1706339952857149895

The problems with our US 'Healthcare' system are well documented. We need to start with the solution!

Many sources of news have provided information that should be shocking on the abuses of the US “healthcare” industry. They include newspapers like the New York Times, Washington Post and the Guardian, non-profit policy organizations like the Commonwealth Fund and the Kaiser Family Foundation (KFF), and many smaller podcasts, substacks, and blogs (well, like this one). The rapacious profit-taking by corporations from dollars ostensibly allocated to provide our healthcare by the federal and state governments (through Medicare and Medicaid), our employers and, not least, ourselves, is regularly siphoned off for profits and administrative costs (like multi-million dollar C-suite salaries).

That this continues to happen and is built into the way our “system” (or better “non-system”) works seems to completely mystify our government and policy wonks. Their response is a hodge-podge of regulations that seek to try in some way to limit the negative health effects of our system, and to limit the number of people who are unable to access care because they have little money, no insurance, poor quality insurance, or have been excluded for reasons such as prior disease. The obvious solution – one single-payer health insurance system that automatically includes every single person of every age – has been anathema to them, despite the overwhelming evidence of it being pretty successful in every other developed country. And, even when far from perfect, always better than the US in terms of health access, health outcomes, and cost. We presume the reason is, essentially, corruption – that, as a result of getting fat and wealthy at the public (and our private) trough, these corporations give lots of money to politicians.

Just a few recent examples of what is wrong with not having single payer:

·        The NY Times reports on a “glitch” in many states incorrectly disenrolling children from Medicaid. Whoops.

 

·        The Healthcare Un-Covered substack takes a good long look a the practices of health insurance companies.

In the “good old days”–let’s call that period pre-2008–the majority of commercial insurance was full-risk: increases came out of payor profitability rather than employers’ and consumers’ pockets, and patients were protected from high out-of-network/out-of-pocket costs. In 15-20 years, everything has changed.  A lot.

Sure has. Its “poster child”, United Health Group, makes lots of money on its insurance business per se, denying people (whether on “regular” insurance or on Medicare-substitute plans like Medicare Advantage). Even more, it is making its most money on its owned physician practice subsidiary, Optum, as well as their pharmacy benefit mangers, using what is called “intercompany eliminations” to have one of its subsidiaries pay more to another of its subsidiaries than to competitors. Plus the Optum practice groups do not have the caps and regulations affecting the insurance group.

Practically, this means UnitedHealth Networks can pay its own physicians, UCCs, ASCs and the care delivery sites it owns above market rates–through something called intercompany elimination–then starve other providers with low rates. This accomplishes two things: it makes the starving providers more likely to sell their practices to Optum, and it allows UnitedHealth to post amazing profitability and stay under federal MLR caps. This is what we call “a good problem” in business.

Good problem for United Health. Big, bad problem for everyone else, including the providers in other groups and mostly the people (that is the English word for “patients”) who seek care.

·        The administration announces the first 10 incredibly-overpriced drugs that Medicare will negotiate the prices of.  Allowing Medicare to negotiate drug prices is one of the most popular issues in the US, across party lines; KFF found ‘in a survey late last year, 89 percent of Democrats and 77 percent of Republicans said they favored the plank of the Inflation Reduction Act that authorizes negotiations.’ Pharmaceutical companies of course push back, with completely bullshit claims that it will limit the number of new drugs. What it will, of course, threaten, is not whether they make a profit, but only the incredibly amount of money these companies are raking out of the economy in grossly excess profit. One good example of the vicious, avaricious abuses is found in The Lever, “Big Pharma’s American Con”, documenting how they rip us off while charging much less in the regulated environments in other countries.

·        The new administration regulations on nursing home staffing have angered both the operators (whose costs will go up, and also have trouble finding staff – at the salaries they pay) and the patient-advocacy groups who point out that they are far too little (patients have to be seen by someone 33 min a day??).

·        And on and on.

What do all these issues – and many more -- have in common? Well, of course, they are manifestations of insatiable and unregulated greed by corporations, and the willingness of our government to allow money that is supposed to be for our health go into corporate pockets. But they also have in common the fact that they can only exist in the absence of a single, rational, health insurance system for the American people. What can we do? We can – and I have, in this post and in many others – document and decry the absolute ripoff of the American people. For example, Medicare Advantage, which is great if you are pretty healthy and doing well, but not so much if you are sick and they deny you care, that are funded (even overfunded, paid more per recipient than is given to traditional Medicare) with the dollars that you have contributed over your working life to the Medicare trust fund. Of course, it is facilitated by the revolving door with government functionaries who are supposed to be regulating them but don’t, and facilitate their greed, and are rewarded by leaving the government and going to work for them for beaucoup bucks. One example is Billy Tauzin, the former Louisiana congressmen who chaired the committee that passed Medicare Part D and included a prohibition on Medicare negotiating drug prices, who became CEO of PhRMA. Or Tom Scully, the Center for Medicare and Medicaid Service director who oversaw  the development of privatized Medicare, who went on to join a major health private-equity firm and made out like the bandits he and they are, as detailed in American Prospect. The list of what is wrong seems endless.

So, I think, it is time to stop leading with all the skullduggery, rapacious, thievery, failure of public trust, and outright killing of people, and start with the solution. A single-payer health system. Everybody in, nobody out. Birth to death. No one is excluded, and no one can be “thrown out”. It covers the same things for everyone, regardless of income. If it is something people need for their health, it is covered; if it is unneeded, frivolous, or harmful it is not. Glasses, hearing aids, mental health, dental, long-term care. No out of pocket costs.

How can we pay for this? See above, all the money going to not-health-care. It would cost much less! Do not let your legislators off the hook. For example, Phoenix congressmen Ruben Gallego has co-sponsored Medicare for All legislation for years. Now he is running for Senate against wolf-in-sheep’s-clothing Democrat-turned-Independent Kysten Sinema and whatever yahoo the GOP drags up. But this year he has not signed on to the Medicare for All bill, HR 3421. I have made it clear in response to his daily solicitations that unless he does, no more money from me.

Demand a universal healthcare insurance system. Now.