Health Care Delivery at a Crossroads

Health care delivery, like our democracy, is now at a crossroads between social progress and, alternately, chaos.

The Direct Contracting Entity (DCE) is a new model for health care finance currently being tested on Medicare recipients by the Center for Medicare and Medicaid Services. Payment via the DCE model will be based on outcomes rather on the number of individual services provided. The notion is: to improve the quality of health care while at the same time reducing cost. In truth, the DCE model is a disaster, designed to decimate Medicare and to privatize all medical care services.

Since the passage of the Affordable Care Act, there have been numerous attempts to remodel our health care delivery system. Progressive physicians, nurses, paramedical personnel and community groups have sponsored legislation to support Medicare for All. Other players in health care delivery and in the world of finance including special interest groups, such as the insurance and pharmaceutical industries, have sponsored Medicare Advantage plans and now DCEs. These models would serve more to increase corporate profit rather than to provide affordable health care.

Medicare for All at the national level is an uphill slog. The Jayapal bill (HR 1976) now has 117 co-sponsors in the House of Representatives. While there is great grassroots enthusiasm for Medicare for All, it is far from passage. By contrast, here in New York State we are at the cusp of success. Our bill for universal health care in our State, New York Health (S.5474; A.5248), has a majority of co-sponsors in both our Senate and Assembly. The goal of some advocates in 2022 is to push this legislation for floor vote in both chambers. Continued pressure from all New Yorkers on their local assembly members and state senators will push hopefully the bill forward.

With no consultation or input from its retirees, New York City is in the process of transferring the health insurance of its 250,000 retirees from Medicare to a Medicare Advantage plan. With Medicare Advantage the city will no longer pay the yearly cost for Medigap coverage for its retirees and thus save money. In the final analysis however, this will be of far greater cost to the beneficiaries. Medicare Advantage plans are administered by private insurance. Medicare allocates a lump sum of money to the plan for each patient’s care. Insurance companies then profit by denying as much care as possible.

Few readers can have missed either George Foreman or Joe Namath on TV assuring us that Medicare Advantage is for us. George and Joe both urge us to call a phone number to see if we qualify. Qualify? Yes. If we have good health and are not likely to require much medical care in the upcoming year, we qualify. If we have pre-existing illnesses, we do not qualify and are encouraged to remain in the traditional Medicare program. George and Joe also assure us that we can see any physician. False. Many physicians do not accept any Medicare Advantage plan because their reimbursement rates are unacceptably low and the hassles of prior authorization required by insurance companies are burdensome. Medicare Advantage networks limit the choice of physicians for the patient as well.

The DCE model is similar to Medicare Advantage but has two additional features. One, DCEs will be privately owned. Most will be owned by venture capitalists rather than insurance companies per se. That is, by Wall Street. Over the past few decades, venture capitalists have ventured into the business of health care delivery. They have purchased and milked many private hospitals. To maximize profit, they have reduced staff, neglected infrastructure and encouraged fraudulent billing practices among their physicians. In some instances, Hahnemann Hospital in Philadelphia for example, they have left the establishment in financial ruin and then sold the property to real estate developers. One could assume similar management tactics if venture capitalists were to own physicians’ practices.

Two, DCEs will negotiate directly with physicians to enroll patients. That is, if a physician or physicians’ group enrolls with a DCE, then all of the Medicare patients associated with that physician’s group will automatically be enrolled in the DCE. Those patients will have had their insurance privatized without their consent. It is ironic if not disingenuous that Medicare For All opponents often deride that program as being socialist and against freedom while they support DCEs.

The notion of Medicare for All is gaining traction in our society. Like democracy, however, it faces fierce opposition. We are at a crossroads.

Dr. Marc H Lavietes is secretary of Physicians for a National Health Program (NY Metro chapter).