DAILY TRIFECTA: The Profit Motive, The Means & The Opportunity

The health care business is killing it

TITLE: In Texas, a glitzy medical school took priority over the poor
https://www.statnews.com/2024/01/02/unitedhealth-rehab-restriction-health-care-inc/

EXCERPT: County officials in Austin proposed this deal to taxpayers more than a decade ago: Pony up $35 million every year so the city can get a new medical school and teaching hospital, and in return, indigent patients would get cutting-edge health care services. And hey, a whole bunch of economic development will follow, too.

It turns out the deal was too good to be true.

My colleague Rachel Cohrs traveled to Texas and found a bunch of broken promises. While there is a new, state-of-the-art medical school — Dell Medical School at the University of Texas at Austin — low-income patients say they have no access to physicians at the university’s clinics for cancer and multiple sclerosis, for example. Some patients, like one who had been forced to choose between medications and food, are now suing a county agency to make sure money is only spent on care for the poor. Plots of land that were earmarked for new biotech and health care offices, meanwhile, sit vacant.

“The quandary in Austin underscores how the U.S. safety net has become fragmented, and often arbitrary, for the tens of millions of Americans living below the poverty line, even in liberal cities like Austin,” Rachel writes. Read her entire special report.

Oh, and the entity that owns the medical school’s affiliated hospital? It’s Ascension, the behemoth Catholic hospital system. Read Rachel’s separate dispatch on the nasty legal battle between Ascension and local government (the government alleges Ascension had monthly caps on surgeries for low-income patients), and how the county may try to buy back the hospital.

TITLE: Nevada’s health care industry faring well; health care consumers, not so much 
https://thisisreno.com/2024/01/nevadas-health-care-industry-faring-well-health-care-consumers-not-so-much/

EXCERPT: Nearly two-thirds of Nevadans experienced health care affordability burdens in 2022, forgoing health insurance, struggling to pay medical bills, and delaying medical visits for dental care, addiction treatment, and mental health care. 

The health care industry was doing well in 2022 though, according to a recent analysis by the United States of Care, a non-partisan non-profit dedicated to improving access to quality health care, released at the end of November.  

Health care premiums in Nevada grew at a significantly higher rate than the cost of covered insurance claims, contributing to record-breaking health insurance company profits. The Nevada Depart of Insurance (DOI) does not oversee provider and hospital rates, but does oversee the rates for small group and individual insurance plans in Nevada. 

And Nevada hospitals saw patient revenues outpace operating expenses, according to an analysis by the United States of Care, a non-partisan non-profit dedicated to improving access to quality health care released in November.

“The findings are stark. You see on one hand people who really struggling with affordability in really profound ways and on the other hand, you have a health care industry that is profiting and doing financially very well,” Liz Hagan, director of policy solutions at United States of Care, said in an interview.

Nevada’s insurance companies and hospitals both saw profit margins upwards of 15%, according to the report. 

The state’s largest private health insurance companies, UnitedHealth Group, Centene, and Anthem Blue Cross Blue Shield, are some of the most profitable Fortune 500 companies. UnitedHealth Group earned $28.4 billion in national profits in 2022, a 19% increase from 2021, according to the report.

In addition to revenues from the individual insurance market, the three companies cover 900,000 Nevadans who pay for Medicare Advantage plans, with sales each estimated to be worth $2 billion each. They also cover a bulk of the 46% of Nevadans with employer coverage. 

Representatives from UnitedHealth Group, Centene, and Anthem Blue Cross Blue Shield did not respond to requests for comment.

Compared to most of the rest of the nation, Nevada’s hospital industry is substantially more privatized.  At 55.3%, the state ranks 13th for the highest percentage of for-profit hospitals, according to 2021 data, which is the most recent cited in the analysis by the United States of Care.

The analysis cites this as one of the reasons for higher health care costs in the state, noting that despite the COVID-19 pandemic disrupting hospital operations, hospitals recovered financially with the help of federal relief funding and that the for-profit hospital’s patient revenues in the state have outpaced the amount they spend on operating.

Sunrise Hospital and Medical Center, owned by the largest for-profit health system in the US, Hospital Corporation of America, charges patients the second highest prices versus the actual cost of care of any hospital in the nation, at an average bill mark-up rate of  12.9.

Representatives from Sunrise Hospital and Medical Center did not respond to requests for comment.

These profit margins don’t translate into better care — Nevada ranks 41st on overall health system performance, and last on prevention and treatment, according to the report. Nor do the poor rankings translate into stagnant prices —in 2023, Nevada consumers faced a 9% increase in health insurance premiums, according to the report. 

TITLE: Care riskier for patients at private equity hospitals
https://news.harvard.edu/gazette/story/2024/01/healthcare-riskier-for-patients-at-private-equity-hospitals/

EXCERPT: After a hospital was acquired by private equity, admitted Medicare patients had a 25 percent increase in hospital-acquired complications, compared with patients admitted before acquisition. Patients also had 27 percent more falls and 38 percent more bloodstream infections caused by central lines, which are temporary surgically inserted ports that allow easy intravenous access for patients receiving repeated drug infusions or other treatments.

The increase was seen despite private equity hospitals’ placing 16 percent fewer central lines than before the buyout. All of these results were calculated while taking into account changes, trends, and patterns over the same period of time at peer hospitals not owned by private equity to isolate the differences that were due to the change in ownership.

Curiously, the study found a small drop in hospital deaths at private equity hospitals. This, the researchers said, may be due to social and demographic factors — private equity patients were younger and less disadvantaged than those at peer hospitals not owned by private equity. It may also be due to patients getting transferred more often out of private equity hospitals. When the researchers followed patients longer after discharge, the small decrease in deaths dissipated within a month after leaving the hospital.