"Health Care Un-covered": Covering the abuses and heartlessness of the health insurance industry is a big job!

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.”

Murder of a Health Insurance CEO: People HATE the companies and the people who run them

A few days ago, Brian Thompson, CEO of UnitedHealthcare, was murdered on the streets of Manhattan outside the New York Hilton, where a stockholders’ meeting was to take place. Some newspaper articles referred to it as an assassination. I’m not sure what the difference is, but I think assassinations usually target someone famous or important, and often have dramatic results (think WWI after the assassination of the Austrian Archduke, or JFK). Thompson may not have been particularly famous, but he was important, being in charge of one of the largest health insurers in the US and a leader in denying claims. Thompson himself is credited with instituting (he probably didn’t actively develop) a system using artificial intelligence (AI) to deny claims.

Most people, patients and physicians, don’t like having a claim for their medical treatment denied, whether by AI or a human being. In general, insurance companies denials are first done by a lower-level employee (or even, as at UnitedHealth, AI). Then if it is appealed by the patient or the physician (which it often, even usually is not, because it takes time; this is what the insurer counts on) it may go to a physician reviewer to decide. That physician does not necessarily have the expertise to make a medical decision regarding the treatment, and often doesn’t, but is strongly motivated by various insurance company practices to deny. These practices include pressure to review lots of cases, to deny a certain (high) percent, and bonuses for high denial rates, which have been well-described by many former physician reviewers (e.g. https://kevinmd.com/2021/10/for-doctors-leaving-clinical-practice-consider-utilization-review-jobs.html) and former health insurance executives like Wendell Potter.

The “principle” behind delaying and denying claims is that this makes them more money, so there are people who think it is good -- the owners and executives of insurance companies – if they can be assured that their privileged position means that it will not happen to them or to their families when they are sick. We read that the cartridges found from the assassination had words including “deny” and “delay” scratched on them; this is pretty good evidence that the killer was motivated by the same angry frustration that so many of us have, even if we would not commit murder. To be sure, Thompson – and his ilk, it is not just him, and he will be replaced by another heartless monster – were also murderers, killing hundreds or thousands by denying the care that their doctors said they needed. We imagine that if the killer is caught, we will find out that his child or spouse died as a result of such UnitedHealth action. It is, frankly, unconscionable and is a system that does not exist in other countries.

The almost unanimous reaction that people have had to the murder exposes the depth of the hatred we have of the health insurance industry and the system of denial and delay that is at its core. While few would commit or even condone murder, there is an almost universal feeling that Thompson was a really bad guy. The extent and breadth of this reaction is, I think, much greater than that leaders of insurance companies and their stockholders and the politicians in their employ expected. I mean, they don’t think that they are really bad guys (and note that several of the health insurance CEOs are women). They just think that they are doing their job, and following the dictates of capitalism, making the most money possible for their companies. And, yeah, getting well paid for it (at about $10.2 million in 2023, Thompson was not even in the top tier of “healthcare” CEO pay, many of whom made over $20 million, including his boss at UnitedHealth Group, Andrew Witty). We even see posts like the one below describing a sudden (although, I am certain, quite temporary) drop in denials in the last few days.

I have written about the benefits of single-payer universal health, the usual standard in every other developed country in the world, often. I have urged eligible people (mostly seniors) to take advantage of and enroll in one of the few single payer opportunities that we have, traditional Medicare, rather than put themselves back into the mercy (as if!!) of the private for-profit health insurance industry by opting for Medicare “Advantage” (UnitedHealth insures about a third of MA patients). I have recently also noted that, short of this, we could cap the amount of out-of-pocket cost that anyone could be liable for to a reasonable amount (Health Insurance is not Healthcare: Everybody in, nobody out!, November 23, 2024). I add that what could be done now would be to make profit in health insurance illegal. Think what that would drive! As I noted in that Nov 23 piece, in places like Switzerland there are competing insurance companies, but they are highly regulated, have to provide the same benefits, charge the same prices, and cannot make a profit – so, amazingly to us, compete on customer service!

Note to health insurance company executives: people HATE you. They really hate you. They hate you worse than thieves and murderers because you are effectively that on a grand scale. We may disapprove of thieves and murderers in the abstract, but especially if they steal from or kill someone we know or love; health insurance companies have spread the impact of their evil far and wide. People may, like me, not advocate killing you in the street but most would be absolutely thrilled if you went to prison for a really long time. Even more would love it if you lost all your money and power. But what they would really love is if you and your companies would go away and stop interposing yourselves between them and the health care that they need, sucking their money into your maws like vampires. Speaking of which, we could add healthcare insurance executives, the Snidely Whiplashes that they are, to the Nazis and aliens and vampires and zombies that are now most of our movie villains. No one but their families would think that odd. People HATE you, and they hate you for good reason, because you have been responsible for the deaths of those they love. It is not just the companies, it is the people who run the companies who are doing evil!

The New Yorker has an article by Jia Tolentino, A Man Was Murdered in Cold Blood and You’re Laughing? (Dec 7, 2024). The title emphasizes the murder rather than all the evil that the victim and his ilk had perpetrated. But it tells us

On LinkedIn, where users post with their real names and employment histories, UnitedHealth Group had to turn off comments on its post about Thompson’s death—thousands of people were liking and hearting it, with a few even giving it the “clapping” reaction. The company also turned off comments on Facebook, where, as of midday Thursday, a post about Thompson had received more than thirty-six thousand “laugh” reactions.

Tolentino also reports that a

2023 class-action lawsuit alleges that the NaviHealth algorithm [that Thompson brought into use at UnitedHealth] has a “known error rate” of ninety per cent [!!] and cites appalling patient stories,’ and ‘that Thompson was one of several UnitedHealth executives under investigation by the D.O.J. for accusations of insider trading.

Read it to see those stories. This was a truly bad man, and the real evil is that which he and his compatriots have done to the American people. Not everyone who does a bad thing is a bad person, but if you do enough bad things, and they are bad enough, often enough, then you are.

Thompson and his colleagues would probably say something like “this is how capitalism works, everyone tries to maximize profit”. That would be correct and it is an indictment of our whole unfettered capitalist system (in Noam Chomsky’s words, “gangster capitalism”). But the actions of health insurance company executive are seen as particularly egregious because their product is literally denying care to people and thus hurting or killing them. Per the New Yorker article

‘There had been prior threats against Thompson, his wife told NBC News, motivated, she said, by, “I don’t know, a lack of coverage? . . . I just know that he said there were some people that had been threatening him.”’

She doesn’t know?? These people live in a golden bubble; she thinks her husband is a good guy. You know, like Vito Corleone or Tony Soprano or El Chapo!

What is amazing is how unlikely the system is to change. While it did, significantly if not enough, under some Democratic administrations (Medicare under Johnson, ACA under Obama) it never went as far as eliminating for profit insurance companies and the drain they place on the dollars ostensibly spent on healthcare, or for that matter the entire economy; it is even less likely under the incoming Trump administration. Too many of the members of Congress are dependent on their contributions.

It is a little bit circular. If they had fewer dollars, if they had to be nonprofit, if they had to actually cover appropriate procedures as traditional Medicare does, they would have much less to contribute to and thus own our legislators.

Maybe then Congress would listen to, and do things that would benefit, us.