The former health insurance executive turned whistleblower Wendell Potter provides outstanding service on his substack “Health Care un-Covered” by revealing abuses within the insurance and greater healthcare industry (well, abuses to him and to me; SOP to the companies!). Recently, Trudy Lieberman, a past president of the Association of Health Care Journalists posted there “Deny, Defend, Depose”, words made famous by being inscribed on the bullets used to kill UnitedHealthcare CEO Brian Thompson. She discusses early meetings in the 1990s when health insurance coverage was migrating from covering “major medical” to “managed care”, where the company paid for – and sometimes controlled directly – all the care you received. Managed care, as a concept if not a term, existed way back in the 1950s, when “consumer cooperatives” like HIP in New York, Ross-Loos in Los Angeles, Group Health in Seattle were established to reduce the cost of healthcare by eliminating the middleman – the insurance company – and could either provide more care to members for the same money, or similar care for less money. When, first under Nixon and then Reagan, this concept was expanded, many people (like me) were fine with it because of our positive experience with the consumer cooperative version.
Under the new version, however, a different type of managed care emerged which, rather than excluding the insurance companies, was owned by the insurance companies, often even employing the physicians and other clinicians who provided care. Thus, a third option emerged: rather than either saving consumers money or providing them with more care, these companies could provide less care and pocket the savings! She writes
New perils came with that new age of health coverage. In the quest to save money while ostensibly improving quality, there was always a chance that the managed care entities and the doctors they employed or contracted with – by then called managed care providers – could clamp down too hard and refuse to pay for treatments, leaving some people to suffer medically.
And this is what happened and continues to happen. UnitedHealth is not the only company to profit handsomely (an understatement) from this setup, but it is the largest. The three words in the title (and on the bullets) summarize the strategies used – deny claims for healthcare, defend any challenges in court (these costs being less than the profits) and depose patients, making their lives miserable.
When these changes were being instituted, there were many in the policy arena who advocated for them as a means of cost control, citing the “overuse” of healthcare by Americans as the main reason for the high cost of our health system compared to that of other countries, which needed reining in by supposedly responsible bureaucrats. They were wrong then, and they are wronger now, when it is clear that the cost to the system of people “overusing” healthcare (whatever that means) is miniscule compared to the amount of money being taken out of the rest of the economy in terms of profits for health insurance companies, and to some degree to providers (e.g., hospital systems). The cost of US “healthcare” compared to other countries has risen, although the amount of actual healthcare we get has not, has gone down, demonstrated by the lower health status and increasing mortality rate of Americans.
In a post written by Potter he describes one of the main ways that UnitedHealthcare (and others) siphons money from the public sector, Medicare, into its pockets by not only the “3Ds”.
UnitedHealth has taken a unique approach to Medicare Advantage: directly employing thousands of doctors and arming them with software that generates diagnosis checklists before they even see patients.
This is a tactic to enhance the strategy of upcoding, ensuring that they get more money by documenting every possible problem a person might have, even if not relevant to the reason that they are being seen. In Medicare Advantage (managed care for Medicare patients, in which UnitedHealth is the largest player) this is even more insidious; in MA plans Medicare pays the insurers not for the care provided but by capitation, paying more for sicker patients. Thus, documenting every potential sickness makes them more money. Of course, the theory is that sicker people cost more, and so the insurers need more money for them. That would be good, but UnitedHealth and other insurers have figured out how to get more money to go in their coffers, however, not to the care of patients, by often using extraneous diagnoses that do not increase the amount of services rendered or the care people receive.
In a related documentation of abuse by players (insurers, providers, drug companies) in the “health sector”, Becker’s Hospital Review reports on the Shkreli Awards given out by the Lown Institute. Named after Martin Shkreli, the Turing Pharmaceuticals CEO who in 2015 “acquired a 62-year-old drug called Daraprim and, overnight, increased the price from about $13.50 per pill to $750” (discussed by me in Drug prices and corporate greed: there may be limits to our gullibility, Sept 27, 2015). I suggested that there were limits because “in 2017, he was convicted in federal court on two counts of securities fraud and one count of conspiring to commit securities fraud, resulting in a 2018 sentence of seven years in prison. In 2022, a federal judge ordered Mr. Shkreli to repay $64 million for hiking the price of Daraprim and imposed a permanent ban on his executive roles in public companies and a lifetime ban from the pharmaceutical industry. He was released early from prison that same year.”
But that was then. Based on the activities described for the recipients of this year’s Shkreli Awards, including UnitedHealthcare, which came in #2, Shkreli himself was a piker. BTW, the #1 spot went to Former Steward Health Care CEO Ralph de la Torre, MD.* So I guess the idea that there are limits to our gullibility, or to the greed of these people and corporations, and the willingness of “regulators” to tolerate or even enable it, was optimistic.
However, a positive is that the Consumer Financial Protection Bureau (CFPB) has finalized a rule that would bar medical debt from appearing on Americans' credit reports. Potter observes that
“This progress did not happen in a vacuum. Addressing the medical debt crisis has been a growing priority for policymakers, patients and organizations like Be A Hero, Undue Medical Debt and the Lower Out-of-Pockets (LOOP NOW) Coalition, which I lead.
My team and I, through LOOP NOW, had the honor of helping facilitate a White House event in which Vice President Harris and CFPB Director Rohit Chopra laid out the administration’s plans to address the crisis. That event wasn’t just about policies — it was about amplifying the stories of people like Lindsay, a single mother saddled with $50,000 in medical debt after her insurer denied coverage for her child’s life-saving brain surgery.”
Potter notes that “This single action could wipe $49 billion in debt from the credit reports of 15 million people, offering relief to individuals and families that have had their financial futures derailed by the unforgiving realities of our health care system. If you’ve ever struggled with medical debt—or know someone who has—this is a moment worth celebrating.”
And indeed it is. Until the new Trump administration reverses it, as they probably will, along with abolishing the CFPB altogether.
*”Lown Institute awarded Dr. de la Torre the top spot for bad behavior in 2024, which was the demise of Dallas-based Steward Health Care. The for-profit chain was on a buying spree in recent years. Four days into 2024, hospital landlord Medical Properties Trust reported Steward was $50 million behind on its rent. When The Boston Globe published local reporting on the state of affairs at Steward's Massachusetts hospitals, lawmakers and officials started to pay closer attention and the house of cards began falling apart. By May, Steward reported $9 billion in debt and put all of its hospitals up for sale. Dr. de la Torre resigned in September, days after the full Senate voted unanimously to hold him in contempt after he did not comply with a Senate subpoena.”
