Alex Shteynshlyuger, a urologist with a apply in New York Metropolis, feels surrounded by UnitedHealth Group. He has seen the corporate gobble up personal practices and says it’s gradual to pay claims. It additionally began providing cash-flow companies that, Shteynshlyuger says, really feel lots like payday loans.
UnitedHealth Group is the most important employer of physicians in america. And it’s rising.
Has the corporate grow to be too large?
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 fast progress.
Dan Weissmann
Host and producer of “An Arm and a Leg.” Beforehand, Dan was a employees reporter for Market and Chicago’s WBEZ. His work additionally seems on All Issues Thought of, Market, the BBC, 99 P.c Invisible, and Reveal, from the Middle for Investigative Reporting.
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Emily Pisacreta
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Adam Raymonda
Audio Wizard
Ellen Weiss
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Transcript: A ‘Payday Mortgage’ From a Well being Care Behemoth
Be aware: “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 device however test 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 individuals noticed it too. It made the rounds.
It stated that Optum — a subsidiary of UnitedHealth Group, higher recognized for operating the massive insurance coverage firm UnitedHealthcare– quote, “is now operating 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 circulation, making them targets for a “payday mortgage enterprise.”
One factor checked out straight away: Optum is providing loans to docs and different suppliers, at curiosity. And the pitch is money circulation.
Voiceover: Optum Pay Advance is constructed for healthcare organizations like yours. We’ve developed a custom-made money circulation 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 conserving $35.
The doc who tweeted it referred to as the thought “Genius!,” exclamation level.
, genius like in “evil genius.” It appeared like my boss telling me:
“Hey, Dan. Payday’s Friday. And I’ve bought dangerous information and excellent news. The dangerous information is, I’m not gonna pay you Friday. I’m gonna do a deep dive in your timesheet, and I could ask you for a bunch of supporting paperwork. Actually, I don’t understand how lengthy it’ll take, or how a lot I’m truly going to pay you. So, you understand, that’s the dangerous information. The excellent news is: I can entrance you a number of the cash. I’ll simply take it out of any future paychecks, plus slightly one thing for my bother. 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. You need to be… actually inventive, to give you that enterprise concept. You additionally should have metal balls to truly suggest that publicly. I imply, it’s a must to not have any ethical compass in any respect.
Dan: Now, having appeared into it, I’ve gotta say: It might not be EXACTLY that easy. 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 aspect.
However that seems to be the story: The scale and complexity of that net — the best way it surrounds docs like Alex Shteynshlyuger, the best way 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, but it surely seems they’re the largest.
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 elements of American life, and convey you one thing entertaining, empowering, and helpful.
So, let’s begin with Dr. Shteynshlyuger. He began his personal apply about ten years in the past, and after a couple of years, he determined to exit of community with most insurance coverage.
Dr. Alex Shteynshlyuger: I nonetheless would like to be in community as a result of it’s a lot simpler to apply in a method. It lowers prices to the sufferers, which make them extra prone to come and see me.
Dan: He’d prefer to, however there was an issue. The charges insurers paid for his companies.
Dr. Alex Shteynshlyuger: I don’t have a market energy to barter with insurance coverage corporations, so what they do is they provide me the kind of charges the place you may’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 bought a, a couple of sentence response that we don’t negotiate.
Dan: Full disclosure: I haven’t seen a duplicate of that response. However what he’s saying echoes tons of different reporting. Insurers pay larger charges to larger entities.
Loads larger.
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 investigate 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 an enormous native hospital system billing, versus a physician in solo
apply, insurance coverage paid double — typically greater than 3 times as a lot —
for the very same service.
Her conclusion was: Massive methods have plenty of clout. And small fry get instructed “take it or depart it.”
That’s the sort of factor Dr. Shteynshlyuger says he was up towards. 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 corporations:
His sufferers have insurance coverage with out-of-network advantages, so he information plenty of claims for them. He says he doesn’t all the time receives a commission– and sometimes when he does receives a commission, he says it takes a very long time, and a variety of work.
Dr. Alex Shteynshlyuger: They’ll throw up varied boundaries saying we want medical data and after they get medical data which are clear lower, like day and night time, you may’t, a blind man can’t make, you understand, uh, an error judging that the care was supplied. They nonetheless discover A purpose to disclaim.
Dan: What he’s saying traces up with what others have discovered.
As an example, in keeping with knowledge 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 nearly 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 for those who’re listening to this present, you might have had the expertise of interesting an insurance coverage denial whenever you’re the affected person. Otherwise you’ve heard the tales, perhaps right here, perhaps from individuals you understand.
It’s no person’s concept of a very good time, or a fast course of. And a few fights, you may’t win.
Now, think about you needed to struggle like that for each fourth paycheck.
The consequence, Dr. Shteynshlyuger says, is that docs like him are leaving personal apply. And infrequently becoming a member of greater entities, with extra clout.
Dr. Alex Shteynshlyuger: There was a variety of urologists in personal apply once I began. And as we speak, you may barely depend them on one hand.
Dan: And we did discover a research exhibiting that there have been lots fewer urologists in personal apply in New York than just some years in the past.
… and writ massive: The variety of docs in personal apply is shrinking, rapidly, throughout the nation.
In line with the American Medical Affiliation, 2020 was the primary 12 months when docs in personal apply grew to become a minority. Lower than a decade earlier than that, the quantity had been 60 p.c.
And you understand 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 large circle:
Dr. Alex Shteynshlyuger: So what they usually do is that they run the apply into the bottom after which they purchase it.
Dan: This seems like a conspiracy: Squeeze your rivals, so whenever you come providing to purchase, you’ve bought a … motivated vendor.
And I’m not satisfied it’s that… coordinated. United Healthcare’s not the one large 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 corporations 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 mainly 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 satisfy the payroll. And then you definitely supply them the mortgage from the cash that you simply haven’t paid them.
Dan: UnitedHealth Group disagrees. They wouldn’t go on tape with us– and we requested– we had plenty of questions. However they despatched me a press release, and it reads, partially:
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 benefit.
And really, it’s not fairly as simple as Dr. Shteynshlyuger says:
Loaning out precisely the money they’d be paying him.
Technically, not less than, 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 grow to be HIS DIRECT COMPETITOR. And now, there’s what he calls this “payday mortgage enterprise.”
UnitedHealth Group doesn’t should conspire towards him. They’re already throughout him. And United — and different big entities — are more and more surrounding each well being care supplier we’d need to see.
Surrounding them with an online that’s getting greater and thicker on a regular basis.
I’m calling it an online, however one knowledgeable 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 protecting 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 knowledgeable. Let’s hear from…
Lawton Robert Burns: Lawton Robert Burns. I’m a professor in well being care administration on the Wharton College on the College of Pennsylvania. I mainly research every part about well being care and have been doing so for over 40 years. And as I really like to inform individuals, 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 speak in March. So, I believe he must be adequate for us.
He says UnitedHealth Group will not be the one firm making an attempt to weave an online.
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 largest. 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 most likely the easiest way to explain – they’re a behemoth.
Dan: And all people else — any participant of any dimension– desires to be one.
Lawton Robert Burns: Everyone desires to get greater. And that’s the company technique of all people in healthcare. Simply get large. 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, once I guess they have been profitable a variety 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 profitable like this? And Al Davis says, you’ve gotta have nice coaches
Al Davis: Then, after you may have nice coaches, you get nice gamers, you may have an incredible group,…
Lawton Robert Burns: You need to have good administration, and also you inform them one factor…
Al Davis: Simply win. Simply win, child.
Lawton Robert Burns: And he’s bought this large 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 guide and it’s referred to as simply develop child. So if you wish to know what’s occurring, I simply bear in mind Al Davis. It’s simply develop child. And that’s all that each one of those persons are doing. It’s not be extra environment friendly or have larger high quality or to enhance entry to well being care. All these things is window dressing and a canopy for what’s actually occurring. What’s occurring right here is it’s simply develop child.
Dan: And Lawton Robert Burns will not be so large on progress. His most up-to-date guide is known as “Massive Med: Megaproviders and the excessive price of well being care in America.” He’s fast to level out, that guide doesn’t take a look at United, which is now arguably the largest megaprovider. That guide 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 fairly image.
Dan: There’s much less knowledge for different kinds of gamers in well being care, however he’s checked out what knowledge there’s.
Lawton Robert Burns: Throughout nearly all sectors, there’s little or no excellent news about what occurs when these organizations. or these sectors of well being care get greater.
Dan: What concerning the claims from large corporations like United that they supply higher service as a result of they’ll 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 apply and aligning incentives throughout the system to make sure individuals get the suitable care on the proper time in the suitable place.”
Lawton Robert Burns: Who’s not going to say that? Come on?
Dan: What concerning the concept of economies of scale? Like, you purchase 1,000,000 stethoscopes, you get a greater deal. He’s like, yeah. Economies of scale, huh?
Lawton Robert Burns: it’s the only most invoked rationale for getting greater, however there’s little or no proof that it exists. Right here’s what I inform my college students: Once 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 businesses, each the federal and the state stage don’t have, you understand, all of the horses on the planet to pursue every part that’s occurring. They’re simply too many of those offers occurring large and small, involving hospitals, docs, insurance coverage, different, you understand, 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 regulation 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 referred to as for a tackle what Dr. Alex Shteynshlyuger calls the payday mortgage proposition.
Erin Fuse Brown: Okay, let’s see if I will be form 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 — regulation professor Erin Fuse Brown is able to see the harms.
As a result of this can be a entire space of regulation: It’s referred to as antitrust, proper? The concept is, corporations can get too large for anyone’s good. They’ll choke out competitors and simply milk all people for revenue.
And United Well being Group as a behemoth — greatest insurer, the largest supplier — opens up an entire new sort 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 slightly afraid, proper? Like I believe that we’re going to get it on either side, like our premiums are going to go up, our costs are going to go up, and so they’re those who’re making the most of all of that.
Dan:And their income are SUPER-high proper now. The inventory value 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 capability 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 struggle sure sorts of offers which are changing into widespread.
Erin Fuse Brown: Antitrust has not been doing a very good job of policing or going after transactions which are vertical in nature.
Dan: Vertical in nature. That is the best way anti-trust of us speak about what corporations like United Well being Group are doing: Spinning an online that covers plenty of completely different sectors.
So, HORIZONTAL consolidation can 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 a very good monitor document of a horizontal hospital in a single metropolis shopping for one other large hospital in the identical metropolis. That antitrust is able to, you understand, of combating. However there isn’t a monitor document in well being care of a profitable vertical problem.
Dan: And he or she says the dearth of a monitor document is sort of a self-perpetuating drawback.
Erin Fuse Brown: nobody desires to be the primary mover. No choose desires 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 drawback, regulators convey fewer circumstances.
Erin Fuse Brown: The antitrust businesses don’t need dangerous precedent. And they also’re, they’re hesitant to convey these circumstances. I imply, it’s straightforward to take a seat 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, you understand, construct up the proof base. Like they should 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 believe in latest reminiscence, which was the United Change case, they misplaced.
Dan: Yeah, UnitedHealth Group wished to purchase an organization referred to as Change Healthcare, which does a bunch of back-end stuff to resolve insurance coverage claims. They do it for many insurance coverage corporations.
And the feds stated: Whoa, maintain up. No. That’s gonna allow you to see what all the opposite insurance coverage corporations are doing. You’ll have entry to all their most delicate knowledge.
The feds introduced that case.
United stated in courtroom: It will completely by no means exploit that knowledge.
Erin Fuse Brown: it’s saying it’s not going to have a look at its rivals knowledge
for anti aggressive benefit,
Dan: United stated it already had entry to tons of delicate knowledge — from different back-end capabilities it was already performing for different corporations.
If these rivals trusted them, why shouldn’t the courtroom? The choose purchased that argument, and the feds misplaced. That was simply final 12 months.
Erin Fuse Brown: And I believe that has some adverse results as properly, it emboldens it.
Dan: So we find yourself with these rising behemoths, with increasingly “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, cut back entry or, or no matter dangerous impact may then ultimately attain the buyer.
Dan: Which does. Not. Sound. Nice.
However– I appeared 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 information.
Individuals are suspicious of huge enterprises, as companies from Normal Oil, US Metal and ATT to Microsoft and Fb have discovered.
He thinks United is “extremely weak” to the chance {that a} big information occasion will crystallize public opinion towards them — will verify the narrative “that United is especially about maximizing its personal income, 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 big well being insurer.”
Me, I’m guessing: Not too many.
For now, for these of us who might NOT have such heat, fuzzy emotions, we’ve
made a begin: We’re beginning, proper right here, to construct extra public information, our
personal information, about UnitedHealth Group’s immense scale.
And information is the start of energy.
I’ll catch you in a couple of weeks.
Until then, maintain 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 guide, Chokepoint Capitalism, and Cory was variety sufficient to speak with me.
I didn’t fairly handle to make these conversations a part of this episode, however: Should you don’t know Cory’s work, it’s spectacular.
I’ll have some hyperlinks wherever you’re listening — and extra in our e-newsletter:
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Daisy Rosario is our consulting managing producer.
Adam Raymonda is our audio wizard.
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Gabrielle Healy is our managing editor for viewers. She edits the First Help Package E-newsletter.
Bea Bosco is our consulting director of operations.
Sarah Ballema is our operations supervisor.
And we’ve bought a summer season 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.
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