The Biden administration’s recent entrenchment and expansion of the Trump administration’s efforts to privatize Medicare is helping a shadowy set of big-business beneficiaries: private equity firms and major health care companies, including one that previously employed the government official overseeing the privatization plan, a Lever analysis shows.

In April last year, the Biden administration contracted with 53 third-party companies to mandate privatized health care plans through Medicare. The resulting health care options are effectively Medicare Advantage plans, or private coverage offered through the national health insurance program for seniors and people with disabilities — but with one wrinkle: Patients are being assigned to these new plans without their consent.

The 53 participating companies — called “direct contracting entities,” or DCEs — are allowed to offer benefits beyond traditional Medicare, like gym membership coverage. But as for-profit businesses that receive a set payment from Medicare no matter how much care they approve, these DCEs are incentivized to limit the care that patients receive, especially when they are very sick. The first DCEs were launched by President Donald Trump in 2019, and so far, at least 350,000 seniors have already been moved onto these privatized Medicare plans.

Now, a new Lever analysis of the 53 DCEs found additional cause for concern: 15 of these entities, or slightly more than a quarter, are backed by private equity firms, which are known for extracting profits at the expense of workers, the environment, and even their own pension fund investors. The firms include big-name firms like the Carlyle Group, General Atlantic, Clayton, Dubilier & Rice, Benchmark Capital, and Warburg Pincus. What’s more, another 15 DCEs are linked to big health care companies — including one with a direct connection to the Biden appointee in charge of the new privatized Medicare scheme.

Wall Street’s encroachment into Medicare is the latest example of private equity’s aggressive expansion into health care, which has ranged from hospitals to ER doctor groups. In 2021, private equity managers deployed $172 billion in capital in the health care sector — nearly four times the total budget of the National Institutes of Health.

Biden himself has lambasted the for-profit industry’s takeover of elder care services, noting during his State of the Union address in March: “As Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up. That ends on my watch.”

Biden apparently doesn’t have the same concerns about Wall Street’s growing role in Medicare — a development that could lead to higher medical bills for patients. The financial industry has already demonstrated its willingness to take a forceful approach to generating health care profits; private equity waged an aggressive campaign to derail legislation designed to stop so-called “surprise” medical bills, which formed a significant part of their hospital staffing firms’ bottom line.

Now, as private equity muscles into privatized Medicare, industry lobbyists are likely to push for more generous payment structures that benefit for-profit firms at the expense of Medicare patients. The Medicare Payment Advisory Commission, an independent body that advises Congress on Medicare, hinted at this scenario while discussing private equity’s role in the Medicare Advantage space at an April 2021 hearing.

“The end result might or might not be better for consumers, but I think that it does have an impact on Medicare payment policy,” said commissioner Pat Wang.

Experts fear that the Medicare space could be especially vulnerable to Wall Street’s predatory approach.

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https://www.levernews.com/how-wall-street-is-taking-over-medicare/

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BY Stephen Leeder

Loss of public funding for specific aspects of health care despite overall (public and private) increases in expenditure, as detailed recently by John Menadue, has already happened out of sight.

Marcus Aurelius is remembered both as a mighty Roman emperor and soldier and as a devotee and exponent of Stoic philosophy and ethics.

He ruled over a sprawling empire that required him often to go to war, especially with the Germans, committing acts of bravery some of which would qualify today as wars crimes. But he was also a man of virtue and compassion and left volumes of his meditations as legacy. He was torn between two personae – emperor and philosopher. But as a mentor said to him, ‘Even if you succeed in attaining to [great] … wisdom, yet against your will, you must put on the purple cloak [of emperor], not the philosopher’s tunic of course wool’. He would empathise with ministers for health.

The tone of Marcus’ Meditations, according to Robin Waterford, a British classical scholar, ‘is that of an aspirant, someone who urgently wants to do better and live as a philosopher but who is constantly thwarted by events and his own weaknesses.’ I think Marcus would not be unhappy if he were to inspect Australian Medicare. We have had to contend with many changes, but the equity and fairness values of Medicare remain. Yes, there are more bloody battles to be fought, but we need also to remember what the fundamental purposes of health care are for individuals and the nation.

International comparisons of health care often favour Australia. The Commonwealth Fund, a New York think tank, has compared health care in 11 wealthy nations and repeatedly finds Australia to be doing well.

As the Commonwealth Fund Report for 2021 says, “The top-performing countries overall are Norway, the Netherlands, and Australia. The United States ranks last overall. Four features distinguish top performing countries from the United States: 1) they provide for universal coverage and remove cost barriers; 2) they invest in primary care systems to ensure that high-value services are equitably available in all communities to all people; 3) they reduce administrative burdens that divert time, efforts, and spending from health improvement efforts; and 4) they invest in social services, especially for children and working-age adults.”

It is comparisons such as these that make assertions that we cannot afford Medicare and that we should privatise and become more like the US puzzling if not weird, especially given that the US system costs far more than what we pay per head for Australian Medicare.

The Conversation invited responses from readers about matters of concern at this election through its #SetTheAgenda and received over 10,000 responses predominantly from NSW and Victoria. Climate and the environment topped the poll and health, and aged care were much further down, despite commonly voiced worries and bad experiences.

Not much has been said about Medicare so far in the campaign. The word ‘Medicare’ did pop up in the first televised debate between Scott Morrison and Anthony Albanese. It led to discussion about whose idea Medicare was (Labor’s) and who made it work (the Coalition). That was it. In fact, there are several ‘coathangers’ on which matters about Medicare deserving comment could be arrayed.

Labor has proposed 50 Medicare Urgent Care Clinics that will cater for patients with strains and fractures to take pressure off hospital emergency departments (EDs) – something of a reprise of the $400million GP Superclinics of 2007 and 2009 that were designed to last 20 years but which received mixed reviews from the National Audit Office and did not fulfil their purpose and by 2014 had all but disappeared.

Perhaps the new clinics might choose to avoid the complexities faced by the Superclinics of the 70s by not providing non-acute care for older patients with multiple, chronic conditions who are often socially-disadvantaged and who in crisis use the ED as a last resort. These people put a lot of pressure on EDs. Their visit to the ED may have been prevented by linked-up, socially-comprehensive and integrated care, including timely general practice, a form of service delivery that has yet to reach maturity in Australia. That may be a better investment than more clinics.

Co-payments on prescribed pharmaceuticals are set to fall whichever contestant wins. We know that high prescription drug costs lead poorer patients quite frequently to not get the script filled.

Progressively rising costs to the patient of prescriptions is one of the several parts of ‘privatisation by stealth’ of Medicare, a phenomenon that John Menadue drew attention to in detail recently. The regression caused by privatisation (back to pre-Medicare days) infringes the basic concept of Medicare – making essential care publicly funded and available to all on the basis of need, not ability to pay.

Also, the privatisation of much surgery has occurred steadily over the past decades, and like dental care, has meant that those who cannot afford to pay delay or entirely miss out on care. This would be a courageous topic for an election comment but it is vitally important. If not discussed now, it should be on the agenda for whichever political party comes to power.

Labor has also said that if elected it will make recruitment of doctors and other health staff easier for regional communities. This is a worthy aim that will require additional investment to create the necessary incentives.

Labor’s proposal to establish a national Centre for Disease Control to coordinate our response to future pandemics may, post-COVID, receive more favourable treatment by the professional groups likely to be affected by it than it has when it has been considered previously. We can hope.

We hear of the distress of patients in the regions having to relocate to larger centres for treatment for cancer. It would be good to know what the political parties think might be done to make this distressing reality more bearable. The cost would not be great, especially when compared with other proposed expenditures.

With increasing sophistication of many treatments for cancer (as an example) we must accept that their use will require centralised, sophisticated equipment and highly skilled staff. So, the answer lies in better, coordinated care for patients coming from out of town, including travel arrangements, psychological support, accommodation, and advocacy.

Surveys of voters show how concerned we are about climate change and cost of living, but health care costs are also worrying many, as they find they are paying higher co-payments for surgery.

Medicare, like universal health care arrangements in Canada and the Scandinavian countries, and for American veterans and older citizens, was built on the assumption that illness and injury are capricious and largely beyond the control of the individual. You may be lucky and remain well or you may be unlucky and develop a major health problem or have an accident quite out of the blue. Double jeopardy applies when a citizen is not only sick or injured, but then may be financially disadvantaged if he or she then needs to pay for care. This occurs in extreme form in other countries such as the US where health care costs are among the top causes of bankruptcy.

Even in Australia we now hear of people who have cashed in their super or used their savings to pay for care because it was not available through the publicly funded system. We have heard it said ‘we cannot as a nation afford to meet all these costs’. This is a piece of pure nonsense: we can afford whatever we want to afford as we are the masters of national debt and expenditure, as we saw in the pandemic or the AUKAS submarine proposals.

If we choose not to afford universal care, or continue down the pathway of privatisation by stealth, then we should say so and allow the voters to decide whether that is an ethically acceptable position. Loss of public funding for specific aspects of health care despite overall (public and private) increases in expenditure, as detailed recently by John Menadue, has already happened out of sight.

Medicare has existed since 1984. It is an important, though not exclusive, part of paying for health care. Huge changes and spectacular progress – think scans, IVF, new generation cancer drugs, improved surgical and anaesthetic techniques, telehealth, IT, robotics, and artificial intelligence – have arrived on the scene since.

Both Labor and the Coalition, rather than committing now only to fragmentary budget allocations, might consider a proposal to look long and hard at the challenge of paying for and organising health care after the election that both honours the concern for universal, unimpeded access to health care and improvements in productivity. It would require a large round table. A priority would be to consider how we pay for health and the inappropriateness of fee-for-service remuneration for anything other than acute, minor illnesses.

This would be a bold undertaking because of the magnitude of health care financing and the myriad vested interests. But as Marcus found from time to time, it IS possible to be an ethical boss of the empire and do good deeds for the people. You need to remember the important ethical foundations – and carry a sharp sword.

READ MORE:

https://johnmenadue.com/do-we-continue-down-the-pathway-of-privatisation-of-health-by-stealth-need-to-fix-link-in-first-para-jm/

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