This article is densely packed with a detailed argument that U.S. healthcare has become so devastatingly bad because of monopoly conglomerates like UnitedHealth Care, not overconsumption,...
This article is densely packed with a detailed argument that U.S. healthcare has become so devastatingly bad because of monopoly conglomerates like UnitedHealth Care, not overconsumption, excessive physician payments, etc. There's a decades-long policy history of how we got here, which might be of interest to readers outside the U.S.
There's a long exploration of the conventional healthcare economics arguments - that patients will overconsume if given a "free" ride. I was exposed to this thinking in public health training - that there's a bottomless consumer appetite for longer life and less suffering. This makes sense on its face, but anyone who's spent time receiving treatment knows that it often comes with painful disincentives and diminishing returns. It's not candy everyone wants.
The U.S. traded the possibility of public, transparent healthcare allocation (I won't call it rationing) for private, opaque, lucrative denials and shortages.
Stoller attacks the disingenuousness of blaming patients and caregivers, then provides an explanation of how powerful, self-serving, and bloated the health-associated cartels have become.
Key quote:
Over the past twenty years, we have smooshed together lines of business in health care such that there is no such thing as a pure “health insurer” anymore. As I noted, United is the largest physician employer and the nation’s leader in value-based care. It’s like calling Google an email company. Sure it owns and runs Gmail, but it’s much more than that.
To understand why this view doesn’t make sense, it helps to start with some antitrust cases. The Biden Antitrust Division’s first merger challenge was UHG buying payment network Change Health in an $8 billion dollar deal. As I noted, that merger was a catastrophe; a year after the DOJ lost and the deal closed, Change got hacked and hospitals, doctors, and pharmacists lost access to cash flow, allowing UHG to buy up some of the providers it had crippled.
But that’s not the only challenge. In mid-November, the Antitrust Division sued UHG over its $3.3 billion dollar attempted acquisition of home health care and hospice provider Amedisys. So the first and last merger cases by Biden were both against UHG. And that’s not all, the Federal Trade Commission also sued UHG over its manipulation of drug pricing through its pharmacy benefit manager arm. Here’s a report released just before the lawsuit showing what these PBM subsidiaries did, according to one high-level executive.
“We've created plan designs to aggressively steer customers to home delivery where the drug cost is ~200 times higher,” he wrote. If you went to Costco, he went on to say, the cost was $97, so the plan didn’t recommend patients go there. If a patient went to Walgreens, which the plan did recommend, it was $9000. And if a patient chose home delivery via the PBMs own mail order pharmacy, it was $19,200. “The optics are not good and must be addressed,” he added. He didn’t need to say that the added revenue for PBMs, just for that one drug, was $902.1 million over a few years.
So UHG has been under a lot of legal heat. But notice something about these lawsuits? None of them have to do with health insurance. UHG was sued over its manipulation of drug pricing, for buying a financial company, and for trying to acquire a bunch of medical caregivers.
UHG, in other words, is not primarily a health insurer, but something new. It is the biggest employer of doctors in the nation, it has a significant software business, and it sits in the middle of the pharmaceutical pricing chain with its OptumRx pharmacy benefit manager and giant mail-order pharmacy. In 2020, when the U.S. government delivered tens of billions of dollars to hospitals, guess what financial conduit it used? Optum Bank, which is also owned by UHG. And it is now in the pharmaceutical production business, as is CVS.
UnitedHealth Group isn’t, as Noah Smith believes, spending $241.9 billion paying for medical costs, it is trying to figure out how to use that money from UnitedHealth Care - its insurance arm - to buy from Optum - its arm of everything else. UHG even has a term for this spending, ‘intercompany eliminations,’ which have now reached 27% of its revenue.
[Disclosure: I'm currently in professional contact with Optum Insight, the hospital IT services contracting (!) arm of the UHG octopus. It is not going well - "delay, deny, defend" applies, as well as offshoring.]
This all tracks with my experiences. But I'll suck it up and read the whole thing when I have some hope for the world left to lose later. Thanks for this
This all tracks with my experiences. But I'll suck it up and read the whole thing when I have some hope for the world left to lose later.
Very interesting read, densely packed for those of you who are interested. I would suggest to read Noah Smith's column article first, which is what Matt Stoller article is in response to. Mr....
Very interesting read, densely packed for those of you who are interested. I would suggest to read Noah Smith's column article first, which is what Matt Stoller article is in response to. Mr. Stoller's article explain the approach of medical care and the cost structure that has been used over the years. What I found helpful is using the analogy of big tech to explain to a laymen like myself the medical field.
It’s like calling Google an email company. Sure it owns and runs Gmail, but it’s much more than that.
I don't know if the proposed approach of breaking up large companies would "fix" our medical cost but I do appreciate improving my understanding.
This article is densely packed with a detailed argument that U.S. healthcare has become so devastatingly bad because of monopoly conglomerates like UnitedHealth Care, not overconsumption, excessive physician payments, etc. There's a decades-long policy history of how we got here, which might be of interest to readers outside the U.S.
There's a long exploration of the conventional healthcare economics arguments - that patients will overconsume if given a "free" ride. I was exposed to this thinking in public health training - that there's a bottomless consumer appetite for longer life and less suffering. This makes sense on its face, but anyone who's spent time receiving treatment knows that it often comes with painful disincentives and diminishing returns. It's not candy everyone wants.
The U.S. traded the possibility of public, transparent healthcare allocation (I won't call it rationing) for private, opaque, lucrative denials and shortages.
Stoller attacks the disingenuousness of blaming patients and caregivers, then provides an explanation of how powerful, self-serving, and bloated the health-associated cartels have become.
Key quote:
[Disclosure: I'm currently in professional contact with Optum Insight, the hospital IT services contracting (!) arm of the UHG octopus. It is not going well - "delay, deny, defend" applies, as well as offshoring.]
This all tracks with my experiences. But I'll suck it up and read the whole thing when I have some hope for the world left to lose later.
Thanks for this
Very interesting read, densely packed for those of you who are interested. I would suggest to read Noah Smith's column article first, which is what Matt Stoller article is in response to. Mr. Stoller's article explain the approach of medical care and the cost structure that has been used over the years. What I found helpful is using the analogy of big tech to explain to a laymen like myself the medical field.
I don't know if the proposed approach of breaking up large companies would "fix" our medical cost but I do appreciate improving my understanding.