America's health care system requires two parties to uphold their commitment to patients.
Under federal law, doctors must care for patients, specifically when seeking emergency care. Insurance companies must cover the cost of care for their policyholders.
If they don't, the system cannot sustain itself.
Therein lies the problem. In recent years, insurers have repeatedly been exposed for refusing to pay for medical care. They ask patients, doctors, hospitals, and other medical providers to eat the cost.
At the same time, the largest health insurers are also purchasing medical practices to funnel more of the insurance premiums they collect from workers, families, and taxpayers back into their own pockets. The Federal Trade Commission (FTC) should investigate this blatant antitrust violation.
Health insurers are by far the most profitable entities in the health care industry. UnitedHealthcare (United), the country's largest insurer, earned $22.4 billion in profits last year. United was ranked as the fourth most profitable company in the U.S. according to Fortune 500.
United is also the largest employer of clinicians in the country. Through its Optum division, United has about 90,000 employed or affiliated doctors, which amounts to approximately 10% of all the country's working physicians. United has spent $5 billion to acquire physician practices. Still, the company has not had to disclose these acquisitions to antitrust regulators because most of these deals fall under current regulatory thresholds.
As United brings more doctors under its control, it is systematically underpaying other doctors to tip the scales of the marketplace, leveraging its financial power to drive further consolidation.
Last year, an arbitration panel found that United engaged in "underpayment of essential medical care" in response to a lawsuit filed in Tennessee. The panel awarded $91 million to the medical provider group Envision health care.
In 2021, a jury found United guilty of underpaying another provider group for care in Nevada. In that case, TeamHealth claimed $10.5 million in underpayments, and the jury determined that United's actions were so egregious that it awarded $60 million in punitive damages. The underpayments in question were to emergency room clinicians who treated victims of America's deadliest mass shooting.
Who ultimately pays while insurance companies get richer and control more of the health care delivery sector? Patients.
If insurers fail to cover the cost of patient care, that leads to more consolidation, fewer medical practices and fewer hospitals. It also leads to smaller insurance networks, meaning patients have less access to medical care and will pay more money out of their own pockets. Eventually, the only remaining option will be treatment from a United-owned doctor who is incentivized to drive down costs and not provide the best care.
In early 2023, ProPublica published an in-depth look at how United tried to deny coverage to a chronically ill patient suffering from ulcerative colitis. He fought back, exposing the insurer's inner workings.
Court records show United lied by claiming the patient's doctor had agreed to lower the doses of his medication. A doctor paid by United concluded that denying payments for the patient's treatment could put his health at risk, but the company buried his report and did not consider its findings.
There is little doubt that insurance companies like United are engaged in a wide-ranging, ongoing scheme to enrich themselves. They intentionally fail to provide fair compensation when patients are treated in emergencies. Underpaid doctors are then forced to join United, allowing the insurer to collect the premiums they are supposed to pay out.
FTC Chair Lina Kahn has vowed to go after "roll-up" acquisitions in health care. Her FTC should start with United's aggressive "roll up" of physician practices and enforce antitrust laws on the books. This is the only way to end their shameless behavior.
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Sean Shaw, the former Insurance Consumer Advocate of Florida, is the founder and president of People Over Profits.
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