Posted by Bill Sandweg on 27 February 2023.
Last month I wrote about how greed in health care led to selling drugs and fleecing Medicare. Today’s post is about practices that are even worse and harm far more people. It relates to the purchase by private equity of many providers of health care from doctors’ practices to emergency departments to nursing homes. Private equity has invested trillions in the purchase of health care providers and wants a return on its investment. This is bad news for all of us.
When there is a drive for profit and return on investment, patient care must, of necessity, take a back seat. One of the most common tactics private equity uses to increase “efficiency” in a medical practice is to insist that the doctors and staff see more patients. It is already difficult for patients to get enough time with a health care provider without the corporate bosses demanding that even more patients be run through the system. Anyone not willing to help push more patients through is shown the door.
Another tactic to increase “efficiency” is to reduce staff. Another is to replace highly trained staff with less experienced and less well-trained people who don’t need to be paid as much. Fewer staff and less well-trained staff mean lower quality of care for the patients.
Still another way to increase returns is to “upcode” the visit. “Upcoding” refers to the practice of making the visit and the treatment given sound more complicated than it really was. To make billing easier, there are billing codes used to describe what went on. There is a fixed reimbursement amount for each treatment code. By using a more expensive code to describe what was done will result in a larger reimbursement.
Our old friend “unnecessary care” is never far away when people are looking for a way to make more money from health care. We are used to being upsold when we go to the car lot or when talking to insurance salespeople. We expect it and we are ready for it. We know to say “No.” We are not expecting it at the doctor’s office so when we are told we need this medicine or that medical procedure, we usually trust the doctor and say “Yes.” A little two-year-old Yuma boy died not too long ago after his parents were convinced to allow a dental group to do root canals on his baby teeth and to put crowns on six of them. The death was due to a failure to monitor him after anesthesia but he never should have had the procedures and never should have needed anesthesia in the first place.
Pregnant and in labor? At some hospitals now before they will let you enter the Labor and Delivery unit, they will insist you stop by the emergency department for a quick examination to make sure you are really in labor. How thoughtful you think until you get the bill for an emergency department visit that you did not need and did not expect to be separately billed for.
In some cities, private equity has purchased so many of the anesthesia practices or gastroenterology practices that they can raise prices without worrying about another doctor group offering to do the same thing for less money. The care has not improved but what we pay for it has gone up.
There is big money to be made from older Americans and from the nursing homes in which so many of them are living. Private equity has been buying up nursing homes and making them more “efficient.” Staffing cuts and other cost saving measures were almost certainly a contributing factor to the high death toll at nursing homes across the country during the early stages of the pandemic. Poorly trained and short staffed nursing homes are no place to live and give rise to horror stories about residents left in their own body waste and bed sores that go all the way to the bone.
We deserve better. We will only get it when we demand more from our providers and from the politicians who are supposed to be protecting us from the worst impulses of the free market.