A ‘Payday Mortgage’ From a Well being Care Behemoth

Alex Shteynshlyuger, a urologist with a observe in New York Metropolis, feels surrounded by UnitedHealth Group. He has seen the corporate gobble up non-public practices and says it’s gradual to pay claims. It additionally began providing cash-flow companies that, Shteynshlyuger says, really feel quite a bit like payday loans.

UnitedHealth Group is the largest employer of physicians in america. And it’s rising.

Has the corporate turn into too massive?

On this episode of “An Arm and a Leg,” host Dan Weissmann appears into this “behemoth” firm and the obstacles antitrust regulators face in maintaining with its speedy development.

Dan Weissmann

@danweissmann

Host and producer of “An Arm and a Leg.” Beforehand, Dan was a workers reporter for Market and Chicago’s WBEZ. His work additionally seems on All Issues Thought-about, Market, the BBC, 99 P.c Invisible, and Reveal, from the Heart for Investigative Reporting.

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Emily Pisacreta
Producer

Adam Raymonda
Audio Wizard

Ellen Weiss
Editor

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Transcript: A ‘Payday Mortgage’ From a Well being Care Behemoth

Observe: “An Arm and a Leg” makes use of speech-recognition software program to generate transcripts, which can include errors. Please use the transcript as a device however verify 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 folks noticed it too. It made the rounds.

It mentioned that Optum — a subsidiary of UnitedHealth Group, higher identified for operating the large insurance coverage firm UnitedHealthcare– quote, “is now operating a payday mortgage enterprise focusing on medical practices.”

This physician wrote that United “denies and delays” funds to docs– in different phrases, hurting their money stream, making them targets for a “payday mortgage enterprise.”

One factor checked out instantly: Optum is providing loans to medical doctors and different suppliers, at curiosity. And the pitch is money stream.

Voiceover: Optum Pay Advance is constructed for healthcare organizations like yours. We’ve developed a personalized money stream answer that offers simple and quick entry to funds.

Dan: The web site provides an instance the place a $100 “mortgage” means $65 to you upfront, and them preserving $35.

The doc who tweeted it known as the thought “Genius!,” exclamation level.

You already know, genius like in “evil genius.” It gave the impression of my boss telling me: 

“Hey, Dan. Payday’s Friday. And I’ve acquired unhealthy information and excellent news. The unhealthy information is, I’m not gonna pay you Friday. I’m gonna do a deep dive in your timesheet, and I’ll ask you for a bunch of supporting paperwork. Actually, I don’t know the way lengthy it’ll take, or how a lot I’m truly going to pay you. So, you already know, that’s the unhealthy information. The excellent news is: I can entrance you a few of the cash. I’ll simply take it out of any future paychecks, plus somewhat 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 unbelievable marketing strategy. It’s a must to be… actually inventive, to provide you with that enterprise thought. You additionally should have metal balls to really suggest that publicly. I imply, it’s a must to not have any ethical compass in any respect.

Dan: Now, having regarded into it, I’ve gotta say: It might not be EXACTLY that straightforward. UnitedHealth Group operates an enormous internet of well being care enterprises, not simply insurance coverage. These “payday loans” are in a special a part of the online from the insurance coverage facet.

However that seems to be the story: The scale and complexity of that internet — the best way it surrounds medical doctors 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 just isn’t the one firm weaving a large internet, but it surely seems they’re the most important.

And, so far as I do know, they’re the one ones providing payday loans to docs. So let’s make them our case examine.

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 crucial 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 observe about ten years in the past, and after a number 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 observe 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 firms, so what they do is they provide me the kind of charges the place you’ll be able to’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 acquired a, a number 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 greater charges to larger entities.

Rather a lot greater.

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 hundreds of circumstances.

She was costs for delivering infants within the Bay Space, and she or he discovered

that when it was a giant native hospital system billing, versus a physician in solo

observe, insurance coverage paid double — generally greater than 3 times as a lot —

for the very same service.

Her conclusion was: Large programs have a lot of clout. And small fry get informed “take it or go away it.”

That’s the sort of factor Dr. Shteynshlyuger says he was up in opposition to. So he decides he can’t survive on these take-it-or-leave it charges, and he goes out of community.

Nevertheless it’s not like this takes out of the world of coping with insurance coverage firms:

His sufferers have insurance coverage with out-of-network advantages, so he information a lot 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 quite a lot of work.

Dr. Alex Shteynshlyuger: They’ll throw up numerous limitations saying we want medical information and after they get medical information which can be clear reduce, like day and evening, you’ll be able to’t, a blind man can not make, you already know, uh, an error judging that the care was supplied. They nonetheless discover A cause to disclaim.

Dan: What he’s saying traces up with what others have discovered.

For 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 suppose you actually labored these hours.”

And there’s an appeals course of. However in the event you’re listening to this present, you might have had the expertise of interesting an insurance coverage denial while you’re the affected person. Otherwise you’ve heard the tales, perhaps right here, perhaps from folks you already know.

It’s no one’s thought of a superb time, or a fast course of. And a few fights, you’ll be able to’t win.

Now, think about you needed to combat like that for each fourth paycheck.

The outcome, Dr. Shteynshlyuger says, is that medical doctors like him are leaving non-public observe. And infrequently becoming a member of greater entities, with extra clout.

Dr. Alex Shteynshlyuger: There was quite a lot of urologists in non-public observe once I began. And at the moment, you’ll be able to barely depend them on one hand.

Dan: And we did discover a examine displaying that there have been quite a bit fewer urologists in non-public observe in New York than only a few years in the past.

… and writ giant: The variety of medical doctors in non-public observe is shrinking, rapidly, throughout the nation.

In response to the American Medical Affiliation, 2020 was the primary 12 months when medical doctors in non-public observe turned a minority. Lower than a decade earlier than that, the quantity had been 60 p.c.

And you already know who has been shopping for up doctor practices like no one’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 medical doctors, at 50,000. They usually’ve saved going. Now they’re as much as 70,000.

Dr. Alex Shteynshlyuger sees this as one massive circle:

Dr. Alex Shteynshlyuger: So what they usually do is that they run the observe into the bottom after which they purchase it.

Dan: This appears like a conspiracy: Squeeze your rivals, so while you come providing to purchase, you’ve acquired a … motivated vendor.

And I’m not satisfied it’s that… coordinated. United Healthcare’s not the one massive 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 firms 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 principally a conspiracy.

Dr. Alex Shteynshlyuger: I imply, who can provide you with one thing like that? First, you don’t pay medical doctors or make them unable to fulfill the payroll. And then you definitely supply them the mortgage from the cash that you just haven’t paid them.

Dan: UnitedHealth Group disagrees. They wouldn’t go on tape with us– and we requested– we had a lot of questions. However they despatched me an announcement, and it reads, partly:

Optum Financial institution’s Working Capital mortgage provides suppliers an choice to entry capital at market aggressive phrases. The speculative theories shared with us haven’t any benefit.

And truly, it’s not fairly as easy as Dr. Shteynshlyuger says:

Loaning out precisely the money they’d be paying him.

Technically, a minimum of, 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 number of native urology practices — they’ve additionally turn into HIS DIRECT COMPETITOR. And now, there’s what he calls this “payday mortgage enterprise.”

UnitedHealth Group doesn’t should conspire in opposition to him. They’re already throughout him. And United — and different large 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 skilled provides a special picture:

Lawton Robert Burns: Considered one 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 masking healthcare in America. Their work wins every kind 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 skilled. 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 principally examine all the pieces about well being care and have been doing so for over 40 years. And as I like to inform folks, I’m simply starting to know it.

*Dan and Lawton chuckle*

Dan: He’s the creator of books like “The Well being Care Eco-System.” The Senate Finance Committee requested him to return and discuss in March. So, I believe he needs to be adequate for us.

He says UnitedHealth Group just isn’t 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 most important. Greatest insurance coverage firm. Greatest employer of physicians. Greatest at a bunch of technical back-end stuff.

Lawton Robert Burns: Considered one of my colleagues calls United a behemoth.

That’s most likely the easiest way to explain – they’re a behemoth.

Dan: And everyone else — any participant of any measurement– desires to be one.

Lawton Robert Burns: All people desires to get greater. And that’s the company technique of everyone in healthcare. Simply get massive. 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 quite a lot 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 will have nice coaches, you get nice gamers, you will have an ideal group,…

Lawton Robert Burns: It’s a must to have good administration, and also you inform them one factor…

Al Davis: Simply win. Simply win, child.

Lawton Robert Burns: And he’s acquired this massive grin on his face. Simply win child. And so I’ve taken that and I mentioned, okay, all these gamers in well being care have taken a web page out of Al Davis’s ebook and it’s known as simply develop child. So if you wish to know what’s happening, 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 greater high quality or to enhance entry to well being care. All these things is window dressing and a canopy for what’s actually happening. What’s happening right here is it’s simply develop child.

Dan: And Lawton Robert Burns just isn’t so massive on development. His most up-to-date ebook is named “Large Med: Megaproviders and the excessive price of well being care in America.” He’s fast to level out, that ebook doesn’t have a look at United, which is now arguably the most important megaprovider. That ebook solely appears at hospitals consolidating– merging into Large Med.

Lawton Robert Burns: The hospital sector is the place we’ve got extra proof.

Than wherever 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 reasonably image.

Dan: There’s much less knowledge for different kinds of gamers in well being care, however he’s checked out what knowledge there may be.

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 in regards to the claims from massive firms like United that they supply higher service as a result of they will coordinate, I imply right here’s what United mentioned within the assertion they gave me:

“We’re dedicated to bettering the well being system for everybody, advancing evidence-based observe and aligning incentives throughout the system to make sure folks get the best care on the proper time in the best place.”

Lawton Robert Burns: Who’s not going to say that? Come on?

Dan: What in regards to the thought of economies of scale? Like, you purchase one million 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: While you hear the expression economies of scale, suppose BS.

Dan: So, Lawton Robert Burns just isn’t 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 already know, all of the horses on the planet to pursue all the pieces that’s happening. They’re simply too many of those offers happening massive and small, involving hospitals, medical doctors, insurance coverage, different, you already know, 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 anxious too. She’s a legislation professor at Georgia State. She research consolidation within the well being care enterprise, and she or he’s a pal of the present, so she’s just about the primary particular person I known as for a tackle what Dr. Alex Shteynshlyuger calls the payday mortgage proposition.

Erin Fuse Brown: Okay, let’s see if I could 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 — legislation professor Erin Fuse Brown is able to see the harms.

As a result of it is a entire space of legislation: It’s known as antitrust, proper? The thought is, firms can get too massive for anyone’s good. They’ll choke out competitors and simply milk everyone for revenue.

And United Well being Group as a behemoth — greatest insurer, the most important supplier — opens up a complete 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 somewhat afraid, proper? Like I believe that we’re going to get it on each side, like our premiums are going to go up, our costs are going to go up, they usually’re those who’re making the most of all of that.

Dan:And their earnings 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 fashioned, antitrust has little or no means 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 combat sure sorts of offers which can be turning into frequent.

Erin Fuse Brown: Antitrust has not been doing a very good job of policing or going after transactions which can be vertical in nature.

Dan: Vertical in nature. That is the best way anti-trust people speak about what firms like United Well being Group are doing: Spinning an online that covers a lot of totally different sectors.

So, HORIZONTAL consolidation could be United shopping for one other insurance coverage firm.

VERTICAL consolidation is United using tens of hundreds of medical doctors.

Erin Fuse Brown: Antitrust has a superb observe file of a horizontal hospital in a single metropolis shopping for one other massive hospital in the identical metropolis. That antitrust is able to, you already know, of combating. However there isn’t any observe file in well being care of a profitable vertical problem.

Dan: And he or she says the dearth of a observe file is sort of a self-perpetuating downside.

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 downside, regulators convey fewer circumstances.

Erin Fuse Brown: The antitrust businesses don’t need unhealthy precedent. And they also’re, they’re hesitant to convey these circumstances. I imply, it’s simple 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 really begin bringing these circumstances, you already know, 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 needed to purchase an organization known as Change Healthcare, which does a bunch of back-end stuff to resolve insurance coverage claims. They do it for many insurance coverage firms.

And the feds mentioned: Whoa, maintain up. No. That’s gonna allow you to see what all the opposite insurance coverage firms are doing. You’ll have entry to all their most delicate knowledge.

The feds introduced that case.

United mentioned in courtroom: It will completely by no means exploit that knowledge.

Erin Fuse Brown: it’s saying it’s not going to take a look at its rivals knowledge

for anti aggressive benefit,

Dan: United mentioned it already had entry to tons of delicate knowledge — from different back-end features it was already performing for different firms.

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 damaging results as properly, it emboldens it.

Dan: So we find yourself with these rising behemoths, with an increasing number of “market energy.”

Erin Fuse Brown: As soon as they type, 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 unhealthy impact may then finally attain the patron.

Dan: Which does. Not. Sound. Nice.

However– I regarded up the essay that labeled United a behemoth.

And the creator– a man named Jeffrey Goldsmith– famous that behemoths don’t essentially final ceaselessly. 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 susceptible” to the chance {that a} large information occasion will crystallize public opinion in opposition to them — will affirm the narrative “that United is principally about maximizing its personal earnings, not about bettering the well being of its subscribers or the communities it serves. It’s not clear how lots of the tens of hundreds of thousands of United subscribers have heat and fuzzy emotions about their large 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 number 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.

Large 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 ebook, Chokepoint Capitalism, and Cory was type sufficient to speak with me.

I didn’t fairly handle to make these conversations a part of this episode, however: In case you don’t know Cory’s work, it’s spectacular.

I’ll have some hyperlinks wherever you’re listening — and extra in our publication:

You’ll be able to join at arm and a leg present dot com, slash, publication.

Daisy Rosario is our consulting managing producer. 

Adam Raymonda is our audio wizard. 

Our music is by Dave Winer and Blue Dot Classes.

Gabrielle Healy is our managing editor for viewers. She edits the First Help Equipment Publication.

Bea Bosco is our consulting director of operations. 

Sarah Ballema is our operations supervisor.

And we’ve acquired a summer time intern: Welcome, Bella Czajkowski

An Arm and a Leg is produced in partnership with KFF Well being Information–previously generally known as Kaiser Well being Information.

That’s a nationwide newsroom producing in-depth journalism about well being care in America, and a core program at KFF — an impartial supply of well being coverage analysis, polling, and journalism.

And sure, you probably did hear the identify Kaiser in there, and no: KFF isn’t affiliated with the well being care large Kaiser Permanente. You’ll be able to study extra about KFF Well being Information at arm and a leg present dot com, slash KFF.

Zach Dyer is senior audio producer at KFF Well being Information. He’s editorial liaison to this present.

Due to Public Narrative — That’s a Chicago-based group that helps journalists and nonprofits inform higher tales– for serving as our fiscal sponsor, permitting us to simply accept tax-exempt donations. You’ll be able to study extra about Public Narrative at www dot public narrative dot org.

And because of everyone who helps this present financially.

In case you haven’t but, we’d love so that you can be part of us. The place for that’s arm and a leg present dot com, slash help.

Thanks!

“An Arm and a Leg” is a co-production of KFF Well being Information and Public Street Productions.

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