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SINGLE PAYER LINKS #362

Posted 20 SEP 2024

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This week’s focus is the Steward Health rolling debacle, a particularly egregious example of how private equity sucks wealth out of the healthcare industry. While Steward is a mind-boggling grift, it is not untypical as an example of boundless greed financing the purchase of yachts. We saw it all on “The Sopranos,” which was pretty accurate except that it made Tony’s crew too nice.

Due to internet issues, I am unable to include a podcast version this week. If it gets solved, I will add it later. —Tim

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Maureen Tkacik, “Let them eat invoices,” American Prospect, Aug 13, 2024 Read!

Steward CEO/Grifter-in-Chief Ralph de la Torre, probably under criminal investigation on two continents, was recently “spotted at Versailles, viewing equestrian events at the Olympics.” De la Torre extracted hundreds of millions from his hospital chain while short-staffed nurses and doctors scrambled and patients died for lack of essential supplies. Steward followed a well-known playbook: buy up struggling hospitals, sell off the real estate (to a related company), and pay yourself huge dividends from the proceeds while the hospitals are saddled with unpayable rents and condemned to eventual bankruptcy. Anyone who tried to look under the hood and blow the whistle faced “top-shelf corporate black ops in hopes of scaring short sellers and critics off their trail.” Hanging in the balance: 29 hospitals in various states; two in Massachusetts have already closed because they were too far gone to save. Bernie calls it an “elaborate Ponzi scheme.” Will these crooks ever face justice? Don’t count on it. “There are no apparent consequences for owning an LLC that systematically rips off small businesses and suppliers.”

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Dietrich Knauth, “Steward Health to close two Ohio hospitals, Pennsylvania hospital at risk,” Reuters, Aug 22, 2024 Read!

A bankruptcy judge stopped one Steward closure in Pennsylvania, allowed two others in Ohio to proceed. Each one means the loss of hundreds of jobs and the creation of a new hospital desert in an already underserved region.

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Shannon Firth, “Nurses blast Steward Health Care’s greed: ‘It ruins you,’” MedPage Today, Sep 13, 2024 Read!

Steward boss De la Torre ignored Sanders’ Senate committee’s subpoena, but witnesses testified to hospital hell in both blue Massachusetts and red Louisiana. In fact, elected officials from LA were outdoing Bernie. Louisiana State Rep. Michael Charles Echols (R) said the financial footwork was a “criminal enterprise” and those responsible should be locked up. “It is glowingly clear to me that the executives of Steward Health are healthcare terrorists. They are killing our patients; they are killing our communities.” Steward Health Care was born in November 2010 when the global private equity firm Cerberus Capital Management bought six Massachusetts hospitals and christened it. It eventually acquired and “ran” 37 while de la Torre spent $160 million on “a yacht, two private jets, a luxury fishing boat, and a donation to an elite preparatory school.” Now bankrupt, Steward proposes to sell its 5,000-physician group active in 10 states—to another PE firm.

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Dave Muoio, “Sanders, Cassidy promise to hold Steward Health Care CEO in contempt after no-show,” Fierce Healthcare, Sep 12, 2024 Read!

Sanders’ committee, Health, Education, Labor, and Pensions (known as HELP), hadn’t issue a subpoena in 40 years, but they wanted to hear from De la Torre so that he could explain why all his hospitals went belly up while he made millions. Sanders was backed up by his ranking minority member, a senator from Louisiana (see above on how that state feels about Steward). “What finally blew the lid off all this was the death of a 39-year-old woman who came to the hospital for an absolutely normal childbirth,” testified a nurse. “She needed an embolism coil. They had been repossessed by the vendor. She died.” Meanwhile, Massachusetts expects to pony up nearly half a billion to salvage the ruined Steward units. The state has already lost 1,200 hospital jobs.

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Louisa Moller, “Steward Health Care’s closing of Carney Hospital will not be stopped by Boston or state of Massachusetts,” CBS News/WBZ, Aug 14, 2024 Read!

Two of Steward’s hospitals in Massachusetts couldn’t be saved. Boston’s city council tried for a declaration of public health emergency to keep Carney Hospital in Dorchester neighborhood alive, but the mayor nixed the idea.

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Rick Mayer, “Orlando Health bids $439M to bankrupt Steward Health for 3 Florida hospitals,” Health News Florida, Aug 15, 2024 Read!

Orlando Health will move in to absorb the failed Steward hospitals in Florida as it grows into a new hospital cartel.

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Michael Kaplan, Sheena Samu & Pat Milton, “Whistleblower tells Congress Steward Health Care CEO Ralph de la Torre bragged he could sway foreign officials with ‘brown bags’ of cash,” CBS News, Sep 5, 2024 Read!

De la Torre’s sudden move to Versailles might be related to his entrepreneurial activity in the EU where a whistleblower alleges Steward bribed its way into Malta’s hospital business. The complainant’s company had won a contract to run three of Malta’s public hospitals in 2015, but he says Steward shoved him aside with gangster tactics. “According to the [500-page] complaint, the conspiracy allegedly involved an effort to have [whistleblower] Tumuluri arrested and included repeated death threats aimed at him.” And in Malta, you take death threats seriously [see Read!

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Maya Goldman, “California weighs blocking private equity health deals,” Axios, Aug 22, 2024 Read!

How about acting to close the barn door while the horses are still inside? “Eleven states have passed laws requiring some level of state review over private equity and health care deals.” A proposed federal ban isn’t getting traction in Congress.

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Andrew R. Jones, “More than half of Mission’s remaining staff neurologists say they are resigning, citing burnout, ‘nausea and fury,’” Asheville Watchdog, Aug 23, 2024 Read! and Andrew R. Jones, “HCA chased Mission doctors away and made a ‘debacle’ of emergency department, draft academic report says,” Asheville Watchdog, Aug 17, 2024 Read!

Another hospital takeover that quickly went south: Mission Hospital in Asheville NC once had a distinguished neurology unit that could give stroke victims the kind of quick response that is so crucial. “The neurology group was really one of a kind in this country.” After acquisition by hospital Godzilla HCA Healthcare, the specialist MDs are burnt out: “It was rare that we could conclude one emergency without being interrupted by another emergency.” Over 200 doctors have left from other departments, unable to function under constantly increasing patient loads. A scathing report from a local university researcher called HCA management “a multi-faceted debacle.” But HCA makes tidy profits from the acquired unit. HCA promised to behave in an Asset Purchase Agreement when it took over the Asheville hospital in 2019, and NC’s attorney general sued HCA last December for breach of contract. So they pay a fine, big deal.

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Paul Cuno-Booth, “Why nurses from North Carolina are trying to stop a New Hampshire hospital merger,” New Hampshire Public Radio, Aug 8, 2024 Read!

The North Carolina example has focused the minds of some in New Hampshire as HCA Healthcare sets its sights on a major hospital there. “The community needs to know what happened to our hospital because the same thing will happen to their hospital,” said Kelly Coward, a nurse and union rep at Mission Hospital in Asheville. New Hampshire should know what it’s getting into: “HCA has also run into trouble with state regulators. When it purchased Frisbie Memorial Hospital in Rochester [NH] in 2020, the company promised to continue labor and delivery services for at least five years––then announced it was ending those services two years later.” HCA paid a fine of $750,000. Meh. Couch lint.

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Brett Kelman, “Tennessee tries to rein in Ballad’s hospital monopoly after years of problems,” KFF Health News/States Newsroom, Sep 18, 2024 Read!

Tennessee and Virginia agreed to allow the formation of Godzilla hospital monopoly Ballad Health covering a 29-county Appalachian region where people would have no alternatives. Huge surprise: “Ballad has consistently fallen short of the quality-of-care goals” agreed to when the monopoly got the green light. The FTC warned against it, was ignored. Do state regulators and elected officials really believe these deals will work out in the face of overwhelming contrary evidence, or are they paid off? Doesn’t really matter.

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Adriel Bettelheim, “Surprise billing law helped PE-backed providers,” Axios, Aug 26, 2024 Read!

The No Surprises Act was supposed to protect patients from the out-of-network scam when hospitalized. That’s where a doctors group bills separately, so one’s careful planning to stay in-network is outfoxed by private equity-backed physician practices. Guess who is doing great under the act’s enforced arbitration? “About 70% of the 657,000 new cases submitted to arbitration in 2023 came from just four organizations, all backed by private equity: Team Health, SCP Health, Radiology Partners, and Envision.” They win most of their cases and carry home big awards. Insurers can’t be happy. “Such findings suggest being out of network may be more attractive now because patients are no longer the ones being hit with big bills.”

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Paige Minemyer, “Express Scripts files suit against FTC, demands retraction of report on PBM industry,” Fierce Healthcare, Sep 17, 2024 Read!

What do you do when a government report makes you look bad? Sue them, of course! Could be an interesting opportunity for discovery of internal PBM communications in a courtroom. The FTC report mildly suggested that the three-PBM oligopoly is so dominant that it puts “both consumers and independent pharmacies at a disadvantage” and called for “further scrutiny.” Egad, regulation of our businesses—the horror!

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D. Lipschutz, “Medicare Advantage industry launches campaign to protect profits and avoid oversight,” Center for Medicare Advocacy, Aug 29, 2024 Read!

Expect a huge ad blitz by insurers wailing about “cuts” to Medicare that aren’t. Reducing excess payments to for-profit Medicare Advantage plans is not a cut, but a fix to manipulations of the risk-adjusted payment system. Now that MA is coming under fire for care denials, burdensome pre-authorization requirements, and payment delays, the insurers will have to spend big to neutralize the bad PR and protect their excess profits. The upcoming campaign is an annual insurer grievance-fest: “The industry will blame their benefit and service area reductions on inadequate payment while collecting payment rates that far outpace traditional Medicare spending.”

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Paige Minemyer, “Insurers set to rake in $11.8B in Medicare quality bonus payments for 2024,” Fierce Healthcare, Sep 16, 2024 Read!

MA plans will take in $11.8 billion in “quality bonus payments.” That’s down some from the previous year as certain Covid-era policies are phased out. The upward trend will restart unless Congress acts. Biggest beneficiaries: UnitedHealthcare ($3.4 billion), followed by Humana ($2.5 billion) and Kaiser Permanente ($976 million).

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Rebecca Pifer, “Elevance, Clayton Dubilier and Rice unveil primary care venture Mosaic Health,” Healthcare Dive, Aug 14, 2024 Read!

Insurer Elevance and its PE partners now have a “care delivery platform” called Mosaic Health, “following in the footsteps of rivals UnitedHealth, CVS, and Humana, all of which have invested heavily in building out their provider networks, including through acquisitions. By operating extensive care delivery assets, insurers can nudge their members to owned clinics, essentially paying themselves for providing healthcare.” Vertical integration enables the healthcare Godzillas to collect up and down the medical continuum. What could go wrong?

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“Agreement to cancel medical debt for 193,000 needy patients in Southern states,” Associated Press, Aug 22, 2024 Read!

New Orleans-based Ochsner Health (46 hospitals in three states) is working with the nonprofit Undue Medical Debt to buy up and erase millions in medical debt, using a relatively modest investment from a federal Covid-era program, plus private donations. The unpayable debt comes cheap, about 1 cent on the nominal dollar. But it doesn’t address the underlying question: Why is there medical debt? And its corollary: How long will it be until just as much new debt builds up?

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Noam N. Levey, “These Alabama workers were swamped by medical debt. Then their employer stepped in,” KFF Health News/NPR, Sep 19, 2024 Read!

To conclude on a positive note: A window-screen company got tired of spending its profits on health insurance and seeing its workers saddled with huge medical debts. It set up an in-house clinic. “The strategy has paid big dividends. Phifer Corp. has saved so much on health care that the company was able to open a free summer camp for the children of employees. Workers have dramatically boosted retirement savings, too.” As employer-sponsored insurance becomes increasingly unsustainable, people will find ways around the system—or out of it. And whaddaya know, the workers feel better about their jobs. “It makes you want to take care of yourself and do better for the company,” said a long-time employee who calls himself “old-school.” Or new school?

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