Facing intense criticism from hospital executives and emergency physicians, the nation’s largest health insurer, UnitedHealthcare (UHC), delayed the implementation of a controversial policy aimed at reducing what it considers to be unnecessary use of emergency services by its enrollees.
The policy, which would have gone into effect next month, would have denied payment for visits to hospital emergency departments for reasons deemed to be “non-emergent” after retrospective review. Similar to a policy implemented by insurer Anthem several years ago, which led to litigation and Congressional scrutiny, the UHC measure would have exposed patients to potentially large financial obligations if they “incorrectly” visited a hospital ED.
Critics pointed to longstanding statutory protections intended to shield patients from this kind of financial gatekeeping: the so-called “prudent layperson standard” came into effect in the 1980s following the rise of managed care, and requires insurance companies to provide coverage for emergency services based on symptoms, not final diagnosis. UHC now says it will hold off on implementing the change until after the COVID-19 national health emergency has ended, and will use the time to educate consumers and providers about the policy.
Like many critics, we’re gobsmacked by the poor timing of United’s policy change—emergency visits are still down more than 20 percent from pre-pandemic levels, and concerns still abound that consumers are foregoing care for potentially life-threatening conditions because they’re worried about coronavirus exposure. Perhaps UHC is trying to “lock in” reduced ED utilization for the post-pandemic era, or perhaps they never intended to enforce the policy, hoping that the mere threat of financial liability might discourage consumers from visiting hospital emergency rooms.
While we share the view that consumers need better education about how and when to seek care, combined with more robust options for appropriate care, this kind of draconian policy on the part of UnitedHealthcare just underscores why many simply don’t trust profit-driven insurance companies to safeguard their health.
The state will bid out the business to private insurance carriers instead of doing the work in-house. Medicaid managed care organizations will be required to submit a bid.
Nevada’s plan to launch a public option health plan hinges on participation from the state’s Medicaid managed care organizations.
After passing both houses of the legislature, Democratic Gov. Steve Sisolak told reporters Tuesday he will sign the bill that will likely crown Nevada as the second state to pass a public option — a government-run plan that promises to lower premiums and increase access to care by creating an additional insurance option for residents.
To achieve its aims, Nevada’s public option plan requires premiums to be 5% lower than the benchmark silver Affordable Care Act plan in each ZIP code and, ultimately, premiums must be reduced by 15% over a four-year period. At the same time, reimbursement to providers must not go below Medicare rates.
Coverage under the public option would begin in 2026. The bill is just the beginning of a process in which Nevada will seek a waiver from the federal government to enact the public option plan. In short, the state is asking to capture the savings it may generate for the federal government.
Similar to other public health programs, the state of Nevada will bid out the public option business to insurance carriers instead of doing the work in-house. The state will rely heavily on Medicaid managed care organizations, at least at first, as it tries to spur participation.
“As a condition of continued participation in any Medicaid managed care program,” Medicaid MCOs will be forced to offer a public option plan if they want a Medicaid contract with the state, according to the bill sponsored by a Democratic state senator and Nevada’s majority leader, Nicole Cannizzaro, which passed the body earlier this week.
The bill says Medicaid MCOs must submit a “good faith proposal,” in response to an eventual RFP.
Sabrina Corlette, a research professor at Georgetown’s Center on Health Insurance Reforms, said she “assumed they wanted a guaranteed pool of potential bidders for the public option. Maybe they were afraid that if they didn’t require some bidders, they might not get any.”
None of the companies responded to a request for comment.
The Nevada bill comes at a time when there is a renewed interest at the federal level for a public option plan, and a push from a handful of other states interested in creating an affordable health plan option for residents who have found themselves ineligible for Medicaid but unable to afford a marketplace plan.
Washington was the first state to implement a public option plan, which went live this year.
President Joe Biden is a proponent of a public option plan — instead of “Medicare for All” — as it would build on the ACA, a law he helped usher in under former President Barack Obama, instead of dismantle it.
The insurance lobby is strongly opposed to a public option and previously expressed concern over Nevada’s plan via an opposition letter dated May 3 and addressed to Cannizzaro and the state’s Health and Human Services Committee.
AHIP, America’s Health Insurance Plans, took aim at the way in which the bill requires premiums for the public option plan to be lower than certain competitive plans on the exchange. AHIP characterized it as arbitrary “government rate setting.”
The tactic of prodding insurers into offering a separate business line in a specific state is not new.
The exchanges, launched under the ACA, relied on insurers to voluntarily sell plans to a relatively new market. At times, some counties were at risk of having no exchange plan at all. Some states tried to alleviate this problem by creating incentives for Medicaid MCOs if they also offered an exchange plan.
In a more extreme example, New York banned insurers from providing plans to any other program, including Medicaid, if they exited the exchange, according to a 2017 executive order from Gov. Andrew Cuomo.
Over time, the exchanges have become a core business for Medicaid MCOs.
Selling exchange plans is a complementary business for Medicaid MCOs that traditionally contract with states to care for Medicaid-eligible members. By selling exchange plans, Medicaid MCOs attempt to attract the Medicaid members they were serving as they churn off the program as their income fluctuates. It’s a key strategy for players like Centene.
However, if they’re forced to participate in the public option plan they will have to undercut their own premium prices on the exchange.
In Nevada, UnitedHealthcare and Centene command the largest market share on the exchange, according to the Kaiser Family Foundation.
The nation’s largest commercial insurer is taking a closer look at whether visits to the emergency room by some of its members are necessary. Starting July 1, UnitedHealthcare will evaluate ER claims using a number of factors to determine if the visit was truly an emergency for its fully insured commercial members across many states, according to a provider bulletin.
If UnitedHealthcare finds the visit was a non-emergency, the visit will be “subject to no coverage or limited coverage,” the provider alert states.
However, a statement provided to Healthcare Dive said the insurer will reimburse for non-emergency care according to the member’s benefit plan. In other words, the amount paid by UnitedHealthcare may be less if deemed a non-emergency.
Dive Insight:
Patients seeking out the pricey ER setting for minor illnesses that could have been treated elsewhere has been a perennial issue for the healthcare industry.Misuse of the nation’s emergency departments for minor ailments costs the nation’s healthcare system $32 billion a year, according to a previous report from UnitedHealth Group, the parent firm of UnitedHealthcare.
Providers worry such policies will lead to a chilling effect, causing patients to hesitate even in a true emergency such as a heart attack or stroke. Some of those concerns about the effects on patients were aired on Twitter this week after the provider bulletin became public.
UnitedHealthcare’s policy contains exclusions, including observation stays, visits by children under the age of two and admissions from the ER. It’s not clear precisely how many patients will be impacted but UnitedHealthcare had a total of 26.2 million commercial members at the end of 2020.
The insurer said this is an attempt to ensure healthcare is more affordable. To curb costs, they want patients to seek out treatment in a more “appropriate setting” like an urgent care facility.
Other major insurers have enacted similar policies in the past and faced pushback from the public and providers.
Anthem in recent years has also enacted policies that put patients on the hook for the ER bill if they sought care that didn’t warrant a trip to the ER. The policy also attracted scrutinyfrom then Senator Claire McCaskill, a Missouri Democrat, who requested Anthem turn over internal documents over the policy and the Blues player ultimately scaled back some of its policies amid pushback from doctors and others.
Providers have argued these policies collide with federal law that require emergency rooms to treat any patient that shows up, regardless of their ability to pay.
UnitedHealthcare does have a process in place for those to contest a visit that was deemed a non-emergency.
HCA Healthcare, the nation’s largest for-profit hospital chain, which operates 185 hospitals and more than 2,000 care sites across 20 states, announced a landmark deal with search giant Google this week, aimed at extracting and analyzing data from more than 32M annual patient encounters.
The multiyear partnership will involve data scientists from both companies working together to develop care algorithms and clinical alerts to improve outcomes and efficiency. Data from HCA’s electronic health records will be integrated with Google’s cloud computing service, and the companies have pledged to adhere to strict limitations to protect individual patient privacy—a key concern raised by regulators after Google announced a similar partnership with another national health system, Ascension, at the end of 2019.
Despite those assurances, some experts pointed to this week’s announcement as further evidence that existing privacy protections are insufficient in the face of the deepening relationships between tech companies, like Google and Microsoft, and healthcare providers, who manage the sensitive health information of millions of patients.
We’d agree—we’re overdue for a major rethink of how patient privacy is handled. The healthcare industry spent much of the last decade “wiring” the health system, converting from paper records to electronic ones, and building vast storehouses of clinical data along the way. We’ve now reached a new phase, and the primary task ahead is to harness all of that data to actually improve care. That will require extensive data sharing, such as a recently announced initiative among several major health systems, and will also entail tapping the expertise of “big data” companies from beyond healthcare—the very same companies whose business practices have sometimes raised privacy concerns in the broader social context. But health information is different—more personal and more sensitive—than data about shopping preferences and viewing habits, requiring more rigorous regulation.
As more big data deals are inked in healthcare, the question of patient privacy will become increasingly pressing.
Average benchmark premiums for plans on the Affordable Care Act’s exchanges have fallen for the third straight year, according to a new analysis.
Researchers at the Urban Institute, a left-leaning think tank, found that the average benchmark premium on the exchanges fell by 1.7% for 2021. That follows decreases of 1.2% in 2019 and 3.2% in 2020.
By contrast, premiums for employer-sponsored plans increased by 4% in both 2019 and 2020, according to the report. Data for 2021 on the employer market are not yet available, the researchers said.
The national average benchmark premium was $443 per month for a 40-year-old nonsmoker, according to the report, before accounting for any tax credits.
The researchers found much significant variation in premium levels between states, though the difference in growth rates was smaller. Minnesota reported the lowest average benchmark premium at $292 per month, and the highest was in Wisconsin at $782 per month.
Average benchmark premiums topped $500 in 10 states, according to the report.
One of the key trends that’s slowing premium growth is increasing competition in the exchanges, as many insurers are expanding their offerings or returning to the marketplaces to offer plans, according to the report.
“New entrants included national and regional insurers, Medicaid insurers, and small start-up insurers,” the researchers wrote.
“Medicaid insurers are those who operated exclusively in the Medicaid managed-care market before 2014; they have increased their participation in the Marketplaces over time. Medicaid insurers are experienced in establishing narrow, low-cost provider networks that allow them to offer lower premiums than other insurers.”
UnitedHealthcare, for example, participated in just four regions included in the study in 2017, but had upped its participation to 11 for 2021. Aetna participated in three regions included in the study in 2017 before fully exiting the exchanges; CVS Health CEO Karen Lynch told investors earlier this year that the insurer plans to return to the marketplaces in 2022.
Several states have also launched programs that aim to lower premiums, according to the report. These include reinsurance programs, which have been rolled out in 12 states as of this year. Some states have also expanded Medicaid in recent years, which leads to some low-income people with costly health needs switching to that program, the researchers said.
Surgical Care Affiliates, which is part of UnitedHealth Group’s Optum division, hit back at the Department of Justice’s defense of a federal case accusing SCA of agreeing with competitors to not poach senior-level employees.
In a May 14 proposed reply brief supporting its bid to dismiss the case, SCA argued the Justice Department’s defense is unlawful and violates due process rights.
“The government seeks to criminally prosecute as a per se Sherman Act violation an alleged agreement not to solicit another company’s employees, even though no court in history has ever definitively found such an agreement unlawful under any mode of analysis,” according to the proposed reply brief. “Not only is this kind of agreement not illegal per se, but subjecting a practice to per se condemnation for the first time in a criminal prosecution would violate bedrock guarantees of due process.” [emphasis in original]
In January, a federal grand jury charged SCA and its related entities, which own and operate outpatient medical care centers, with entering and engaging in conspiracies with other healthcare companies to suppress competition between them for the services of senior-level employees.
In an email statement to Becker’s Hospital Review, SCA said at the time of the charges: “This matter involves alleged conduct seven years before UnitedHealth Group acquired SCA and does not involve any SCA ambulatory surgery centers, their joint owners, physician partners, current leadership or any other UnitedHealth Group companies. SCA disagrees with the government’s position, and will vigorously defend itself against these unjustified allegations.”
The charges are the first from the department’s antitrust division in its ongoing investigation into employee allocation agreements. Violators of the Sherman Act can face a maximum $100 million fine, or twice the gain derived from the crime or twice the loss suffered by victims if the amount is greater than the maximum.
We’ve closely tracked Colorado’s pursuit of its own public option insurance plan, which seems now to have reached a compromise that will allow a bill to move forward, according to reporting from Colorado Public Radio. The saga began two years ago when state legislators passed a law requiring Democratic Governor Jared Polis’ administration to develop a public option proposal. Amid the pandemic and broad industry opposition, progress stalled last year on the proposal. Lawmakers picked up the proposal this session, and have made progress on a compromise bill now poised to pass the state’s Democratic legislature.
Unlike the earlier version, the new legislation would not lay the groundwork for a government-run insurance option, but rather would force insurers to offer a plan in which the benefits and premiums are defined and regulated by the state. The bill would also allow the state to regulate how much hospitals and doctors are paid.
In the current version,hospital reimbursement is set at a minimum of 155 percent of Medicare rates, and premiums are expected to be 18 percent lower than the current average. While state Republicans and some progressive Democrats are still opposed, the Colorado Hospital Association and State Association of Health Plans are neutral on the bill, largely eliminating industry opposition.
The role hospitals played in fighting the pandemic surely paved the way toward the compromise bill, which is viewed as much more friendly to providers than the previous proposal.With the Biden administration unlikely to pursue Medicare expansion or a national public option, we expect more Democratic-run states to pursue these sorts of state-level efforts to expand coverage.
In the wake of the pandemic, providers are well-positioned to negotiate—and should use the goodwill they’ve generated to explore more favorable terms, rather than resorting to their usual knee-jerk opposition to these kinds of proposals.
Just as other industries are rolling back some consumer-friendly changes made early in the pandemic — think empty middle seats on airplanes — so, too, are health insurers.
Many voluntarily waived all deductibles, copayments and other costs for insured patients who fell ill with covid-19 and needed hospital care, doctor visits, medications or other treatment.
Setting aside those fees was a good move from a public relations standpoint. The industry got credit for helping customers during tough times. And it had political and financial benefits for insurers, too.
But nothing lasts forever.
Starting at the end of last year — and continuing into the spring — a growing number of insurers are quietly ending those fee waivers for covid treatment on some or all policies.
“When it comes to treatment, more and more consumers will find that the normal course of deductibles, copayments and coinsurance will apply,” said Sabrina Corlette, research professor and co-director of the Center on Health Insurance Reforms at Georgetown University.
Even so, “the good news is that vaccinations and most covid tests should still be free,” added Corlette.
That’s because federal law requires insurers to waive costs for covid testing and vaccination.
Guidance issued early in President Joe Biden’s term reinforced that Trump administration rule about waiving cost sharing for testing and said it applies even in situations in which an asymptomatic person wants a test before, say, visiting a relative.
But treatment is different.
Insurers voluntarily waived those costs, so they can decide when to reinstate them.
Indeed, the initial step not to charge treatment fees may have preempted any effort by the federal government to mandate it, said Cynthia Cox, a vice president at KFF and director for its program on the Affordable Care Act.
In a study released in November, researchers found about 88% of people covered by insurance plans — those bought by individuals and some group plans offered by employers — had policies that waived such payments at some point during the pandemic, said Cox, a co-author. But many of those waivers were expected to expire by the end of the year or early this year.
Some did.
Anthem, for example, stopped them at the end of January. UnitedHealth, another of the nation’s largest insurers, began rolling back waivers in the fall, finishing up by the end of March. Deductible-free inpatient treatment for covid through Aetna expired Feb. 28.
A few insurers continue to forgo patient cost sharing in some types of policies. Humana, for example, has left the cost-sharing waiver in place for Medicare Advantage members, but dropped it Jan. 1 for those in job-based group plans.
Not all are making the changes.
For example, Premera Blue Cross in Washington and Sharp Health Plan in California have extended treatment cost waivers through June. Kaiser Permanente said it is keeping its program in place for members diagnosed with covid and has not set an end date. Meanwhile, UPMC in Pittsburgh planned to continue to waive all copayments and deductibles for in-network treatment through April 20.
What It All Means
Waivers may result in little savings for people with mild cases of covid that are treated at home. But the savings for patients who fall seriously ill and wind up in the hospital could be substantial.
Emergency room visits and hospitalization are expensive, and many insured patients must pay a portion of those costs through annual deductibles before full coverage kicks in.
Deductibles have been on the rise for years. Single-coverage deductibles for people who work for large employers average $1,418, while those for employees of small firms average $2,295, according to a survey of employers by KFF. (KHN is an editorially independent program of KFF.)
Annual deductibles for Affordable Care Act plans are generally higher, depending on the plan type.
Both kinds of coverage also include copayments, which are flat-dollar amounts, and often coinsurance, which is a percentage of the cost of office visits, hospital stays and prescription drugs.
Ending the waivers for treatment “is a big deal if you get sick,” said Robert Laszewski, an insurance industry consultant in Maryland. “And then you find out you have to pay $5,000 out-of-pocket that your cousin didn’t two months ago.”
Costs and Benefits
Still, those patient fees represent only a slice of the overall cost of caring for a hospitalized patient with covid.
While it helped patients’ cash flow, insurers saw other kinds of benefits.
For one thing, insurers recognized early on that patients — facing stay-at-home orders and other restrictions — were avoiding medical care in droves, driving down what insurers had to fork out for care.
“I think they were realizing they would be reporting extraordinarily good profits because they could see utilization dropping like a rock,” said Laszewski. “Doctors, hospitals, restaurants and everyone else were in big trouble. So, it was good politics to waive copays and deductibles.”
Besides generating goodwill, insurers may benefit in another way.
Under the ACA, insurers are required to spend at least 80% of their premium revenue on direct health care, rather than on marketing and administration. (Large group plans must spend 85%.)
By waiving those fees, insurers’ own spending went up a bit, potentially helping offset some share of what are expected to be hefty rebates this summer. That’s because insurers whose spending on direct medical care falls short of the ACA’s threshold must issue rebates by Aug. 1 to the individuals or employers who purchased the plans.
A record $2.5 billion was rebated for policies in effect in 2019, with the average rebate per person coming in at about $219.
Knowing their spending was falling during the pandemic helped fuel decisions to waive patient copayments for treatment, since insurers knew “they would have to give this money back in one form or another because of the rebates,” Cox said.
It’s a mixed bag for consumers.
“If they completely offset the rebates through waiving cost sharing, then it strictly benefits only those with covid who needed significant treatment,” noted Cox. “But, if they issue rebates, there’s more broad distribution.”
Even with that, insurers can expect to send a lot back in rebates this fall.
In a report out this week, KFF estimated that insurers may owe $2.1 billion in rebates for last year’s policies, the second-highest amount issued under the ACA. Under the law, rebate amounts are based on three years of financial data and profits. Final numbers aren’t expected until later in the year.
The rebates “are likely driven in part by suppressed health care utilization during the COVID-19 pandemic,” the report says.
Still, economist Joe Antos at the American Enterprise Institute says waiving the copays and deductibles may boost goodwill in the public eye more than rebates. “It’s a community benefit they could get some credit for,” said Antos, whereas many policyholders who get a small rebate check may just cash it and “it doesn’t have an impact on how they think about anything.”
Optum, a subsidiary of UnitedHealth, provides data analytics and infrastructure, a pharmacy benefit manager called OptumRx, a bank providing patient loans called Optum Bank, and more.
It’s not often that the American Hospital Association—known for fun lobbying tricks like hiring consultants to create studies showing the benefits of hospital mergers—directly goes after another consolidation in the industry.
But when the AHA caught wind of UnitedHealth Group subsidiary Optum’s plans, announced in January 2021, to acquire data analytics firm Change Healthcare, they offered up some fiery language in a letter to the Justice Department. “The acquisition … will concentrate an immense volume of competitively sensitive data in the hands of the most powerful health insurance company in the United States, with substantial clinical provider and health insurance assets, and ultimately removes a neutral intermediary.”
If permitted to go through, Optum’s acquisition of Change would fundamentally alter both the health data landscape and the balance of power in American health care. UnitedHealth, the largest health care corporation in the U.S., would have access to all of its competitors’ business secrets. It would be able to self-preference its own doctors. It would be able to discriminate, racially and geographically, against different groups seeking insurance. None of this will improve public health; all of it will improve the profits of Optum and its corporate parent.
Despite the high stakes, Optum has been successful in keeping this acquisition out of the public eye.Part of this PR success is because few health care players want to openly oppose an entity as large and powerful as UnitedHealth. But perhaps an even larger part is that few fully understand what this acquisition will mean for doctors, patients, and the health care system at large.
If regulators allow the acquisition to take place, Optum will suddenly have access to some of the most secret data in health care.
UnitedHealth is the largest health care entity in the U.S., using several metrics. United Healthcare (the insurance arm) is the largest health insurer in the United States, with over 70 million members, 6,500 hospitals, and 1.4 million physicians and other providers. Optum, a separate subsidiary, provides data analytics and infrastructure, a pharmacy benefit manager called OptumRx, a bank providing patient loans called Optum Bank, and more. Through Optum, UnitedHealth also controls more than 50,000 affiliated physicians, the largest collection of physicians in the country.
While UnitedHealth as a whole has earned a reputation for throwing its weight around the industry, Optum has emerged in recent years as UnitedHealth’s aggressive acquisition arm. Acquisitions of entities as varied as DaVita’s dialysis physicians, MedExpress urgent care, and Advisory Board Company’s consultants have already changed the health care landscape. As Optum gobbles up competitors, customers, and suppliers, it has turned into UnitedHealth’s cash cow, bringing in more than 50 percent of the entity’s annual revenue.
On a recent podcast, Chas Roades and Dr. Lisa Bielamowicz of Gist Healthcare described Optum in a way that sounds eerily similar to a single-payer health care system. “If you think about what Optum is assembling, they are pulling together now the nation’s largest employers of docs, owners of one of the country’s largest ambulatory surgery center chains, the nation’s largest operator of urgent care clinics,” said Bielamowicz. With 98 million customers in 2020, OptumHealth, just one branch of Optum’s services, had eyes on roughly 30 percent of the U.S. population. Optum is, Roades noted, “increasingly the thing that ate American health care.”
Optum has not been shy about its desire to eventually assemble all aspects of a single-payer system under its own roof. “The reason it’s been so hard to make health care and the health-care system work better in the United States is because it’s rare to have patients, providers—especially doctors—payers, and data, all brought together under an organization,” OptumHealth CEO Wyatt Decker told Bloomberg. “That’s the rare combination that we offer. That’s truly a differentiator in the marketplace.” The CEO of UnitedHealth, Andrew Witty, has also expressed the corporation’s goal of “wir[ing] together” all of UnitedHealth’s assets.
Controlling Change Healthcare would get UnitedHealth one step closer to creating their private single-payer system. That’s why UnitedHealth is offering up $13 billion, a 41 percent premium on the public valuation of Change. But here’s why that premium may be worth every penny.
Change Healthcare is Optum’s leading competitor in pre-payment claims integrity; functionally, a middleman service that allows insurers to process provider claims (the receipts from each patient visit) and address any mistakes. To clarify what that looks like in practice, imagine a patient goes to an in-network doctor for an appointment. The doctor performs necessary procedures and uses standardized codes to denote each when filing a claim for reimbursement from the patient’s insurance coverage. The insurer then hires a reviewing service—this is where Change comes in—to check these codes for accuracy. If errors are found in the coded claims, such as accidental duplications or more deliberate up-coding (when a doctor intentionally makes a patient seem sicker than they are), Change will flag them, saving the insurer money.
The most obvious potential outcome of the merger is that the flow of data will allow Optum/UnitedHealth to preference their own entities and physicians above others.
To accurately review the coded claims, Change’s technicians have access to all of their clients’ coverage information, provider claims data, and the negotiated rates that each insurer pays.
Change also provides other services, including handling the actual payments from insurers to physicians, reimbursing for services rendered. In this role, Change has access to all of the data that flows between physicians and insurers and between pharmacies and insurers—both of which give insurers leverage when negotiating contracts. Insurers often send additional suggestions to Change as well; essentially their commercial secrets on how the insurer is uniquely saving money. Acquiring Change could allow Optum to see all of this.
Change’s scale (and its independence from payers) has been a selling point; just in the last few months of 2020, the corporation signed multiple contracts with the largest payers in the country.
Optum is not an independent entity; as mentioned above, it’s owned by the largest insurer in the U.S. So, when insurers are choosing between the only two claims editors that can perform at scale and in real time, there is a clear incentive to use Change, the independent reviewer, over Optum, a direct competitor.
If regulators allow the acquisition to take place, Optum will suddenly have access to some of the most secret data in health care. In other words, if the acquisition proceeds and Change is owned by UnitedHealth, the largest health care corporation in the U.S. will own the ability to peek into the book of business for every insurer in the country.
Although UnitedHealth and Optum claim to be separate entities with firewalls that safeguard against anti-competitive information sharing, the porosity of the firewall is an open question. As the AHA pointed out in their letter to the DOJ, “[UnitedHealth] has never demonstrated that the firewalls are sufficiently robust to prevent sensitive and strategic information sharing.”
In some cases, this “firewall” would mean asking Optum employees to forget their work for UnitedHealth’s competitors when they turn to work on implementing changes for UnitedHealth. It is unlikely to work. And that is almost certainly Optum’s intention.
The most obvious potential outcome of the merger is that the flow of data will allow Optum/UnitedHealth to preference their own entities and physicians above others. This means that doctors (and someday, perhaps, hospitals) owned by the corporation will get better rates, funded by increased premiums on patients. Optum drugs might seem cheaper, Optum care better covered. Meanwhile, health care costs will continue to rise as UnitedHealth fuels executive salaries and stock buybacks.
UnitedHealth has already been accused of self-preferencing. A large group of anesthesiologists filed suit in two states last week, accusing the company of using perks to steer surgeons into using service providers within its networks.
Even if UnitedHealth doesn’t purposely use data to discriminate, the corporation has been unable to correct for racially biased data in the past.
Beyond this obvious risk, the data alterations caused by the Change acquisition could worsen existing discrimination and medical racism. Prior to the acquisition, Change launched a geo-demographic analytics unit. Now, UnitedHealth will have access to that data, even as it sells insurance to different demographic categories and geographic areas.
Even if UnitedHealth doesn’t purposely use data to discriminate, the corporation has been unable to correct for racially biased data in the past, and there’s no reason to expect it to do so in the future. A study published in 2019 found that Optum used a racially biased algorithm that could have led to undertreating Black patients. This is a problem for all algorithms. As data scientist Cathy O’Neil told 52 Insights, “if you have a historically biased data set and you trained a new algorithm to use that data set, it would just pick up the patterns.” But Optum’s size and centrality in American health care would give any racially biased algorithms an outsized impact. And antitrust lawyer Maurice Stucke noted in an interview that using racially biased data could be financially lucrative. “With this data, you can get people to buy things they wouldn’t otherwise purchase at the highest price they are willing to pay … when there are often fewer options in their community, the poor are often charged a higher price.”
The fragmentation of American health care has kept Big Data from being fully harnessed as it is in other industries, like online commerce. But Optum’s acquisition of Change heralds the end of that status quo and the emergence of a new “Big Tech” of health care. With the Change data, Optum/UnitedHealth will own the data, providers, and the network through which people receive care. It’s not a stretch to see an analogy to Amazon, and how that corporation uses data from its platform to undercut third parties while keeping all its consumers in a panopticon of data.
The next step is up to the Department of Justice, which has jurisdiction over the acquisition (through an informal agreement, the DOJ monitors health insurance and other industries, while the FTC handles hospital mergers, pharmaceuticals, and more). The longer the review takes, the more likely it is that the public starts to realize that, as Dartmouth health policy professor Dr. Elliott Fisher said, “the harms are likely to outweigh the benefits.”
There are signs that the DOJ knows that to approve this acquisition is to approve a new era of vertical integration. In a document filed on March 24, Change informed the SEC that the DOJ had requested more information and extended its initial 30-day review period. But the stakes are high. If the acquisition is approved, we face a future in which UnitedHealth/Optum is undoubtedly “the thing that ate American health care.”
HENRY KOTULA 