Alex Shteynshlyuger, a urologist with a observe in New York Metropolis, feels surrounded by UnitedHealth Group. He has seen the corporate gobble up personal practices and says it’s sluggish to pay claims. It additionally began providing cash-flow providers that, Shteynshlyuger says, really feel loads like payday loans.
UnitedHealth Group is the largest employer of physicians in the US. And it’s rising.
Has the corporate turn out to be too massive?
On this episode of “An Arm and a Leg,” host Dan Weissmann seems to be into this “behemoth” firm and the obstacles antitrust regulators face in maintaining with its speedy progress.
Dan Weissmann
Host and producer of “An Arm and a Leg.” Beforehand, Dan was a workers reporter for Market and Chicago’s WBEZ. His work additionally seems on All Issues Thought of, Market, the BBC, 99 % Invisible, and Reveal, from the Middle for Investigative Reporting.
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Emily Pisacreta
Producer
Adam Raymonda
Audio Wizard
Ellen Weiss
Editor
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Transcript: A ‘Payday Mortgage’ From a Well being Care Behemoth
Notice: “An Arm and a Leg” makes use of speech-recognition software program to generate transcripts, which can comprise errors. Please use the transcript as a software however examine the corresponding audio earlier than quoting the podcast.
Dan: Hey there–
Final month, I noticed a wild tweet from a physician in New York — and many different folks noticed it too. It made the rounds.
It stated that Optum — a subsidiary of UnitedHealth Group, higher identified for working the massive insurance coverage firm UnitedHealthcare– quote, “is now working a payday mortgage enterprise concentrating on medical practices.”
This physician wrote that United “denies and delays” funds to docs– in different phrases, hurting their money move, making them targets for a “payday mortgage enterprise.”
One factor checked out instantly: Optum is providing loans to docs and different suppliers, at curiosity. And the pitch is money move.
Voiceover: Optum Pay Advance is constructed for healthcare organizations like yours. We’ve developed a personalized money move answer that offers straightforward and quick entry to funds.
Dan: The web site offers an instance the place a $100 “mortgage” means $65 to you upfront, and them maintaining $35.
The doc who tweeted it known as the thought “Genius!,” exclamation level.
You already know, genius like in “evil genius.” It gave the impression of my boss telling me:
“Hey, Dan. Payday’s Friday. And I’ve acquired unhealthy information and excellent news. The unhealthy information is, I’m not gonna pay you Friday. I’m gonna do a deep dive in your timesheet, and I’ll ask you for a bunch of supporting paperwork. Actually, I don’t know the way lengthy it’ll take, or how a lot I’m really going to pay you. So, , that’s the unhealthy information. The excellent news is: I can entrance you a few of the cash. I’ll simply take it out of any future paychecks, plus just a little one thing for my hassle. Say, 35 p.c?”
I talked with the physician who posted the tweet: Alex Shteynshlyuger, a urologist in New York.
Dr. Alex Shteynshlyuger: In order that’s an unimaginable marketing strategy. It’s important to be… actually artistic, to give you that enterprise thought. You additionally need to have metal balls to truly suggest that publicly. I imply, it’s important to not have any ethical compass in any respect.
Dan: Now, having seemed into it, I’ve gotta say: It might not be EXACTLY that straightforward. UnitedHealth Group operates an enormous net of well being care enterprises, not simply insurance coverage. These “payday loans” are in a unique a part of the online from the insurance coverage facet.
However that seems to be the story: The dimensions and complexity of that net — the way in which it surrounds docs like Alex Shteynshlyuger, the way in which it retains getting tighter, round all of us, and what that appears to price us– that’s the story right here. UnitedHealth Group will not be the one firm weaving a large net, nevertheless it seems they’re the most important.
And, so far as I do know, they’re the one ones providing payday loans to docs. So let’s make them our case research.
That is An Arm and a Leg, a present about why well being care prices so freaking a lot, and what we will perhaps do about it. I’m Dan Weissmann. I’m a reporter, and I like a problem. So the job we’ve chosen right here is to take one of the vital enraging, terrifying, miserable components of American life, and produce you one thing entertaining, empowering, and helpful.
So, let’s begin with Dr. Shteynshlyuger. He began his personal observe about ten years in the past, and after a couple of years, he determined to exit of community with most insurance policy.
Dr. Alex Shteynshlyuger: I nonetheless would like to be in community as a result of it’s a lot simpler to observe in a means. It lowers prices to the sufferers, which make them extra prone to come and see me.
Dan: He’d wish to, however there was an issue. The charges insurers paid for his providers.
Dr. Alex Shteynshlyuger: I don’t have a market energy to barter with insurance coverage firms, so what they do is they provide me the kind of charges the place you possibly can’t stand and keep in enterprise.
Dan: With one insurer, he says he misplaced cash on each case. He says he requested to barter.
Dr. Alex Shteynshlyuger: I didn’t even get a counter proposal. I simply acquired a, a couple of sentence response that we don’t negotiate.
Dan: Full disclosure: I haven’t seen a replica of that response. However what he’s saying echoes tons of different reporting. Insurers pay increased charges to greater entities.
Loads increased.
For one of many first episodes we ever did, I talked with Jenny Gold, who was a reporter for KFF Well being Information [and of course they’ve since become our co-producers on this show]. She had mixed two databases to research 1000’s of circumstances.
She was taking a look at costs for delivering infants within the Bay Space, and he or she discovered
that when it was a giant native hospital system billing, versus a physician in solo
observe, insurance coverage paid double — generally greater than thrice as a lot —
for the very same service.
Her conclusion was: Massive methods have a number of clout. And small fry get advised “take it or depart it.”
That’s the form of factor Dr. Shteynshlyuger says he was up in opposition to. So he decides he can’t survive on these take-it-or-leave it charges, and he goes out of community.
However it’s not like this takes out of the world of coping with insurance coverage firms:
His sufferers have insurance coverage with out-of-network advantages, so he information a number of claims for them. He says he doesn’t all the time receives a commission– and infrequently when he does receives a commission, he says it takes a very long time, and a number of work.
Dr. Alex Shteynshlyuger: They will throw up numerous boundaries saying we want medical information and after they get medical information which might be clear reduce, like day and night time, you possibly can’t, a blind man can’t make, , uh, an error judging that the care was offered. They nonetheless discover A motive to disclaim.
Dan: What he’s saying strains up with what others have discovered.
As an illustration, in accordance with information compiled by KFF, UnitedHealthcare reported to the federal authorities that they denied 23 p.c of claims. They usually’re in the midst of the pack. Some insurers deny much more.
However 23 p.c — that’s virtually one in 4.
Think about if one out of each 4 paychecks, your boss was like, “Naaah, I don’t assume you actually labored these hours.”
And there’s an appeals course of. However in the event you’re listening to this present, you might have had the expertise of interesting an insurance coverage denial while you’re the affected person. Otherwise you’ve heard the tales, perhaps right here, perhaps from folks .
It’s no person’s thought of time, or a fast course of. And a few fights, you possibly can’t win.
Now, think about you needed to combat like that for each fourth paycheck.
The consequence, Dr. Shteynshlyuger says, is that docs like him are leaving personal observe. And infrequently becoming a member of larger entities, with extra clout.
Dr. Alex Shteynshlyuger: There was once a number of urologists in personal observe after I began. And right this moment, you possibly can barely depend them on one hand.
Dan: And we did discover a research displaying that there have been loads fewer urologists in personal observe in New York than just some years in the past.
… and writ giant: The variety of docs in personal observe is shrinking, shortly, throughout the nation.
In line with the American Medical Affiliation, 2020 was the primary yr when docs in personal observe turned a minority. Lower than a decade earlier than that, the quantity had been 60 p.c.
And who has been shopping for up doctor practices like no person’s enterprise? UnitedHealth Group’s’s Optum Well being. Two years in the past, they caught as much as the 2 greatest hospital chains as employers of docs, at 50,000. They usually’ve stored going. Now they’re as much as 70,000.
Dr. Alex Shteynshlyuger sees this as one massive circle:
Dr. Alex Shteynshlyuger: So what they sometimes do is that they run the observe into the bottom after which they purchase it.
Dan: This seems like a conspiracy: Squeeze your opponents, so while you come providing to purchase, you’ve acquired a … motivated vendor.
And I’m not satisfied it’s that… coordinated. United Healthcare’s not the one massive insurance coverage firm that squeezes small practices with low charges and many denials. And docs have complained about it for a LONG time.
They usually’re not the one ones shopping for up small practices– hospitals and personal equity-backed firms have been doing the identical factor, for lots longer than United.
Equally, when Dr. Shteynshlyuger describes what he calls the payday mortgage
setup, he talks about it like principally a conspiracy.
Dr. Alex Shteynshlyuger: I imply, who can give you one thing like that? First, you don’t pay docs or make them unable to fulfill the payroll. And then you definitely provide them the mortgage from the cash that you just haven’t paid them.
Dan: UnitedHealth Group disagrees. They wouldn’t go on tape with us– and we requested– we had a number of questions. However they despatched me an announcement, and it reads, partly:
Optum Financial institution’s Working Capital mortgage provides suppliers an choice to entry capital at market aggressive phrases. The speculative theories shared with us don’t have any advantage.
And really, it’s not fairly as simple as Dr. Shteynshlyuger says:
Loaning out precisely the money they’d be paying him.
Technically, a minimum of, the cash behind Optum Payday Advance doesn’t come
from insurance coverage premiums.
However from Dr. Shteynshlyuger’s perspective, it’s like UnitedHealth Group is surrounding him on a number of sides: They’re the insurance coverage firm he’s sending payments to, and combating with.
And by gobbling up so many medical practices– together with a couple of native urology practices — they’ve additionally turn out to be HIS DIRECT COMPETITOR. And now, there’s what he calls this “payday mortgage enterprise.”
UnitedHealth Group doesn’t need to conspire in opposition to him. They’re already throughout him. And United — and different large entities — are more and more surrounding each well being care supplier we would need to see.
Surrounding them with an internet that’s getting larger and thicker on a regular basis.
I’m calling it an internet, however one skilled provides a unique picture:
Lawton Robert Burns: One in every of my colleagues calls United a behemoth.
Dan: That’s coming proper up. This episode of An Arm and a Leg is produced in partnership with KFF Well being Information. That’s a nonprofit newsroom masking healthcare in America. Their work wins all types of journalism awards yearly. I’m honored to work with them.
So, it’s time to get a birds’ eye view. Let’s hear from an skilled. Let’s hear from…
Lawton Robert Burns: Lawton Robert Burns. I’m a professor in well being care administration on the Wharton Faculty on the College of Pennsylvania. I principally research all the things about well being care and have been doing so for over 40 years. And as I like to inform folks, I’m simply starting to grasp it.
*Dan and Lawton chuckle*
Dan: He’s the writer of books like “The Well being Care Eco-System.” The Senate Finance Committee requested him to return and discuss in March. So, I feel he ought to be ok for us.
He says UnitedHealth Group will not be the one firm attempting to weave an internet.
Lawton Robert Burns: There are six or seven different gamers on the market who’re doing the very same factor.
Dan: However United’s the most important. Largest insurance coverage firm. Largest employer of physicians. Largest at a bunch of technical back-end stuff.
Lawton Robert Burns: One in every of my colleagues calls United a behemoth.
That’s in all probability one of the simplest ways to explain – they’re a behemoth.
Dan: And everyone else — any participant of any measurement– needs to be one.
Lawton Robert Burns: All people needs to get larger. And that’s the company technique of everyone in healthcare. Simply get massive. Do you bear in mind who Al Davis is?
Dan: So, I didn’t. However he was a legendary proprietor and supervisor of the Oakland Raiders like 40 years in the past, after I guess they had been successful a number of Tremendous Bowls. And there’s a well-known clip of him.
Lawton Robert Burns: A press convention held proper after they received the Tremendous Bowl. Al Davis is sitting there receiving the Tremendous Bowl trophy.
Dan: And the announcer asks: How do you retain successful like this? And Al Davis says, you’ve gotta have nice coaches
Al Davis: Then, after you could have nice coaches, you get nice gamers, you could have an awesome group,…
Lawton Robert Burns: It’s important to have good administration, and also you inform them one factor…
Al Davis: Simply win. Simply win, child.
Lawton Robert Burns: And he’s acquired this massive grin on his face. Simply win child. And so I’ve taken that and I stated, okay, all these gamers in well being care have taken a web page out of Al Davis’s ebook and it’s known as simply develop child. So if you wish to know what’s happening, I simply bear in mind Al Davis. It’s simply develop child. And that’s all that every one of those individuals are doing. It’s not be extra environment friendly or have increased high quality or to enhance entry to well being care. All these items is window dressing and a canopy for what’s actually happening. What’s happening right here is it’s simply develop child.
Dan: And Lawton Robert Burns will not be so massive on progress. His most up-to-date ebook is known as “Massive Med: Megaproviders and the excessive price of well being care in America.” He’s fast to level out, that ebook doesn’t have a look at United, which is now arguably the most important megaprovider. That ebook solely seems to be at hospitals consolidating– merging into Massive Med.
Lawton Robert Burns: The hospital sector is the place now we have extra proof.
Than anyplace else. And the outcomes there present that costs go up. When
hospitals consolidate, prices go up when hospitals consolidate, high quality stays
the identical or declines when hospitals consolidate, it’s not a reasonably image.
Dan: There’s much less information for different kinds of gamers in well being care, however he’s checked out what information there’s.
Lawton Robert Burns: Throughout virtually all sectors, there’s little or no excellent news about what occurs when these organizations. or these sectors of well being care get larger.
Dan: What concerning the claims from massive firms like United that they supply higher service as a result of they will coordinate, I imply right here’s what United stated within the assertion they gave me:
“We’re dedicated to bettering the well being system for everybody, advancing evidence-based observe and aligning incentives throughout the system to make sure folks get the appropriate care on the proper time in the appropriate place.”
Lawton Robert Burns: Who’s not going to say that? Come on?
Dan: What concerning the thought of economies of scale? Like, you purchase one million stethoscopes, you get a greater deal. He’s like, yeah. Economies of scale, huh?
Lawton Robert Burns: it’s the one most invoked rationale for getting larger, however there’s little or no proof that it exists. Right here’s what I inform my college students: If you hear the expression economies of scale, assume BS.
Dan: So, Lawton Robert Burns will not be seeing the upside. And he’s not seeing any controls.
Lawton Robert Burns: The regulatory companies, each the federal and the state stage don’t have, , all of the horses on the planet to pursue all the things that’s happening. They’re simply too many of those offers happening massive and small, involving hospitals, docs, insurance coverage, different, , they don’t have the horses. To, like, do something about it, not to mention monitor it.
Dan: Yeah. And so it leaves me, involved
Lawton Robert Burns: Yeah, you’re proper.
Dan: Erin Fuse Brown is worried too. She’s a legislation professor at Georgia State. She research consolidation within the well being care enterprise, and he or she’s a pal of the present, so she’s just about the primary individual I known as for a tackle what Dr. Alex Shteynshlyuger calls the payday mortgage proposition.
Erin Fuse Brown: Okay, let’s see if I might be kind of, uh, politic about this. It
sounds completely loopy.
Dan: If Lawton Robert Burns is skeptical of behemoths– like, doesn’t see the proof that they’re good — legislation professor Erin Fuse Brown is able to see the harms.
As a result of this can be a entire space of legislation: It’s known as antitrust, proper? The thought is, firms can get too massive for anyone’s good. They will choke out competitors and simply milk everyone for revenue.
And United Well being Group as a behemoth — greatest insurer, the most important supplier — opens up an entire new form of antitrust query.
Erin Fuse Brown: That simply blows my thoughts, I don’t even know what occurs when these two issues occur, like collide into one entity, these two issues occur, like collide into one entity, um, I, I, I don’t know. I’m just a little afraid, proper? Like I feel that we’re going to get it on each side, like our premiums are going to go up, our costs are going to go up, and so they’re those who’re taking advantage of all of that.
Dan:And their earnings are SUPER-high proper now. The inventory worth is thru the roof. Erin Fuse Brown says, it’s an issue that regulators can’t sustain with the tempo of offers that flip an organization right into a behemoth.
Erin Fuse Brown:. As soon as it’s shaped, antitrust has little or no potential to interrupt it up or restore competitors to a market.
Dan: So, that’s regarding. However the issue isn’t simply that antitrust regulators can’t sustain with the tempo of those offers. It’s that anti-trust regulators don’t have a great way to combat sure sorts of offers which might be changing into frequent.
Erin Fuse Brown: Antitrust has not been doing a very good job of policing or going after transactions which might be vertical in nature.
Dan: Vertical in nature. That is the way in which anti-trust of us discuss what firms like United Well being Group are doing: Spinning an internet that covers a number of completely different sectors.
So, HORIZONTAL consolidation could be United shopping for one other insurance coverage firm.
VERTICAL consolidation is United using tens of 1000’s of docs.
Erin Fuse Brown: Antitrust has observe file of a horizontal hospital in a single metropolis shopping for one other massive hospital in the identical metropolis. That antitrust is able to, , of combating. However there isn’t any observe file in well being care of a profitable vertical problem.
Dan: And she or he says the dearth of a observe file is form of a self-perpetuating downside.
Erin Fuse Brown: nobody needs to be the primary mover. No choose needs to rule with out precedent, even when the financial proof is beginning to pile up that these vertical consolidations are Simply as competitively dangerous.
Dan: And recognizing that downside, regulators convey fewer circumstances.
Erin Fuse Brown: The antitrust companies don’t need unhealthy precedent. And they also’re, they’re hesitant to convey these circumstances. I imply, it’s straightforward to sit down in my ivory tower and, and dare the Division of Justice and the, and the FTC to be extra daring, um, however to truly begin bringing these circumstances, , construct up the proof base. Like they need to get a win on the board so as to have the ability to, um, go after these mergers and I, and in the event that they don’t, and the issue is, is just like the one time they’ve tried, um, I feel in latest reminiscence, which was the United Change case, they misplaced.
Dan: Yeah, UnitedHealth Group needed to purchase an organization known as Change Healthcare, which does a bunch of back-end stuff to resolve insurance coverage claims. They do it for many insurance coverage firms.
And the feds stated: Whoa, maintain up. No. That’s gonna allow you to see what all the opposite insurance coverage firms are doing. You’ll have entry to all their most delicate information.
The feds introduced that case.
United stated in courtroom: It could completely by no means exploit that information.
Erin Fuse Brown: it’s saying it’s not going to take a look at its opponents information
for anti aggressive benefit,
Dan: United stated it already had entry to tons of delicate information — from different back-end features it was already performing for different firms.
If these opponents trusted them, why shouldn’t the courtroom? The choose purchased that argument, and the feds misplaced. That was simply final yr.
Erin Fuse Brown: And I feel that has some unfavorable results as properly, it emboldens it.
Dan: So we find yourself with these rising behemoths, with an increasing number of “market energy.”
Erin Fuse Brown: As soon as they kind, there’s little or no one can do to cease them from utilizing that market energy to extend costs or, scale back entry or, or no matter unhealthy impact would possibly then ultimately attain the patron.
Dan: Which does. Not. Sound. Nice.
However– I seemed up the essay that labeled United a behemoth.
And the writer– a man named Jeffrey Goldsmith– famous that behemoths don’t essentially final perpetually. He wrote:
United has grown to its current immense scale largely with out public data.
People are suspicious of huge enterprises, as companies from Customary Oil, US Metal and ATT to Microsoft and Fb have realized.
He thinks United is “extremely weak” to the danger {that a} large information occasion will crystallize public opinion in opposition to them — will verify the narrative “that United is especially about maximizing its personal earnings, not about bettering the well being of its subscribers or the communities it serves. It’s not clear how lots of the tens of tens of millions of United subscribers have heat and fuzzy emotions about their large well being insurer.”
Me, I’m guessing: Not too many.
For now, for these of us who could NOT have such heat, fuzzy emotions, we’ve
made a begin: We’re beginning, proper right here, to construct extra public data, our
personal data, about UnitedHealth Group’s immense scale.
And data is the start of energy.
I’ll catch you in a couple of weeks.
Until then, deal with your self.
This episode of An Arm and a Leg was produced by me, Dan Weissmann, with assist from Emily Pisacreta and edited by Ellen Weiss.
Massive thanks this time to the author, journalist, and activist Cory Doctorow. This story jogged my memory of themes from his work, together with his latest ebook, Chokepoint Capitalism, and Cory was type sufficient to speak with me.
I didn’t fairly handle to make these conversations a part of this episode, however: For those who don’t know Cory’s work, it’s spectacular.
I’ll have some hyperlinks wherever you’re listening — and extra in our publication:
You possibly can enroll at arm and a leg present dot com, slash, publication.
Daisy Rosario is our consulting managing producer.
Adam Raymonda is our audio wizard.
Our music is by Dave Winer and Blue Dot Classes.
Gabrielle Healy is our managing editor for viewers. She edits the First Assist Equipment E-newsletter.
Bea Bosco is our consulting director of operations.
Sarah Ballema is our operations supervisor.
And we’ve acquired a summer time intern: Welcome, Bella Czajkowski
An Arm and a Leg is produced in partnership with KFF Well being Information–previously referred to as Kaiser Well being Information.
That’s a nationwide newsroom producing in-depth journalism about well being care in America, and a core program at KFF — an unbiased supply of well being coverage analysis, polling, and journalism.
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