Private health care providers in US drive up costs through blatant theft

US health care system is good for business but not for Americans

The US spends more than twice the OECD average on healthcare, about $450 billion more than other countries and that extra money delivers a lower life expectancy and higher infant mortality rate than many of them including Cuba. (See more health care stats: here.)  In 2008, the average premium for a family plan purchased through an employer was $12,680, nearly the annual earnings of a full-time minimum wage job and there seems to be no end in sight.  It has been estimated that 18,000 Americans die every year through lack of health care so in the US our health care costs us more and we get less in return than any other advanced economy.

Health care in the US is a business, and the bottom line for a business is to make profit. We wrote about our objections to this when it comes to public services which is what health care should be, in a blog on the postal service a few days ago.  The US government program that provides health insurance for people over 65 and for the permanently disabled under 65 is called Medicare and was signed in to law by Lyndon Johnson in 1965.  Along with Medicaid, a program for the low waged, they represented 23% of the 2010 federal budget at a cost of $793 billion ($524 for Medicare). Before Medicare, only 51% of people aged 65 and older had health care coverage, and nearly 30% lived below the federal poverty level.

Like the postal service and all public services, the capitalist class wants to cut Medicare costs while increasing the private sector’s role in the industry.  And as is always the case whenever capitalist politicians manage public services, whether it’s a response to a disaster like Katrina or the health industry, the huge amounts of cash involved are simply another opportunity to get their snouts deep in the public trough.

A US Senate Finance Committee investigating abuse in Medicare payments to private health providers has found examples of massive waste and outright fraud on the part of the three largest home health companies in the US according to the Wall Street Journal.

These firms get most of their revenues from home health care, a part of the Medicare program where they send nurses to patient’s homes. The program was introduced to “cut costs” which seems like a good idea on paper as and probably better for the patient as they can receive treatment in the relative comfort of their own homes.

But it turns out that these companies were dispensing care to these patients in such a way that guaranteed greater profits.  The patients were receiving a high number of “profitable” home therapy visits and fewer and fewer of the least profitable ones. They also encouraged their employees to “make enough home therapy visits to reach thresholds that triggered bonus payments, whether or not the payments were medically necessary.”

One of the companies, LHC group just reached a $65 million settlement with the US justice department after an individual filed suit accusing LHC of “improperly” billing for treatment that wasn’t “medically necessary” and for “care provided to patients that weren’t homebound.”

And here we are again where LHC and two other firms are accused and found to be encouraging therapists to ”target” the most “profitable number of therapy visits” even when the patient’s need didn’t “justify” it.  A word about these bonus payments after the “threshold” is reached.  In a civilized system, they make sense as they were instituted to ensure that providers didn’t skimp on visits.  In other words, they would be in the patient’s interests. But when the service is for profit, reaching the threshold and achieving bonus status is good for business, regardless of the patient’s needs or the cost to the taxpayer.

When Medicare changed the number of visits required for bonuses to kick in, the largest of the three companies changed its “clinical protocols” to match the change and increase profits. In one example, the company stood to make more than $880 per patient visited while another company figured out it could earn an extra $11 million by changing its visits to match the Medicare changes and that by “increasing therapy visits by an average of 2 visits per patient” it could bring in another “$350 to $550 per episode” of care.

I found myself getting angrier and angrier as I read the details of this scam on the US taxpayer and the elderly, sick and disabled among us. These people are scum.  In an email from one company therapist to another he boasts about coaching a colleague on how to bring in the dough, “There are several old tricks up my sleeve that I told him about from a clinical standpoint that he should feel better about using to get 10 visits” he writes.

The reason for investigating this stuff at all has nothing to do with the Wall Street politicians or the Wall Street Journal, which is owned by the thug Rupert Murdoch, caring about the sick and elderly.  The mood in society is such that they are very concerned about social unrest and a further radicalization of the working class, so they want to give the impression they are doing something on the one hand and also they want to try to undermine public expenditure and management on health care and hand over the task to private business.

When we think of how they deal with workers that violate or who are accused of violating their laws the way they deal with this blatant theft which also leads to more death and misery than any terrorist group has inflicted on Americans stands out as the charade that it is.  The findings, the Finance Committee panel concludes, at best “represent abuses” and “at worst, they may be examples of for profit companies defrauding “ Medicare and the US taxpayer. From what I read it is clear what is going on, much clearer than the evidence they had that led them to execute Troy Davis a few weeks ago.

The yardstick for payments, the committee concludes, should be “patient well-being and health characteristics.”  Max Baucus, the Democratic Chairman of the Senate Finance Committee had a few words to say but don’t laugh, his knows how to play the game and protect his friends by throwing a bone to the public that might be following the events, The actions of these companies “represents serious abuse of the home health program” he says adding that elderly patients, “should not be used as pawns to increase a company’s profits.”

While I was in London I blogged about how some folks in Europe wonder how it is that Americans are fooled by billionaires who put on a cowboy hat or who say “y’all” on TV can suddenly be accepted as just one of the guys. The truth is that many Americans are not fooled by that and they are not fooled by Max Baucus making statements about how profits shouldn’t be made off the backs of the sick and elderly.  Of course profits should be made off the back of the sick and elderly.  Profits should be made wherever they can be made, the sicker, the older, the younger the more helpless the better.

The biggest problem here is that people do not know what to do about it and given the absence of any counter to such nonsense by the heads of organized Labor, many working class people have felt that they just have to stick it out and hope for the best.  Even many black folks, especially older workers, who know only too well the violent nature of US society will say that they are better off here than anywhere else, a conclusion made easier by the fact that the US is a very insulated and closed society cut off in many ways form the rest of the world and with the most censored mass media of the advanced capitalist economies.

This tale of the massive fraud and theft in Medicare is but the tip of the iceberg.  The Wall Street Journal, as the dominant organ of US finance capital but even more so the mass media will portray such activity as the work of “crony capitalists”, “greedy individuals” and a few” bad apples”.  But this is not the case.  It is the system that is the cause of this. It is social health care being in the hands of private individuals and run for profit that is the cause of the massive waste and inefficiency of such a program, not the people that it is designed to serve or the people on the ground, the millions of social workers, orderlies, nurses and carers who devote much of their lives to helping those of us that need it the most. 

Reinvesting the wealth our Labor creates back in to our communities and social services that contribute to a better life is not money wasted; the word “profit” doesn’t apply. And while how this capital is allocated and distributed in society is something that is important it cannot be done on the basis of profit but by those that work in and receive the services of such public expenditure.

Health care in the US is a business that is why it is the most expensive and provides the worst care of all the industrialized nations; we are cheated.  It is not the quality of the employees in it or the abuse of the users but the rapacious quest for profit of those that own it.