Privatizing healthcare and Medicare?
I’m on Medicare along with an Aetna Medicare Advantage plan for Illinois teachers that is partly subsidized by contributions I made before I retired from teaching.
My doctor prescribed medication that required pre-authorization from Aetna. The pharmacy I use is CVS, which is also owned by Aetna.
Aetna is also engaged in buying up individual medical practices.
CVS Health, a huge national pharmacy business and a major insurer Aetna, paid roughly $11 billion to buy Oak Street Health, a chain of primary care centers that employs doctors in 21 states.
Amazon’s bought One Medical, another large doctors’ group, for nearly $4 billion, in another such move.
Giant insurance companies understand that primary care doctors oversee vast numbers of patients who bring business and profits to a hospital system, to a health insurer and to a pharmacy like CVS.
So they want them as employees.
The growing privatization of Medicare with the growth of Medicare Advantage programs means that more than half its 60 million beneficiaries have signed up for policies with private insurers under the Medicare Advantage program.
And the growth of nurses and doctors who once were independent practitioners but are now along with thousands of other practitioners is part of the deal.
And it is very profitable.
The federal government is now paying those insurers $400 billion a year.
The consolidation, monopolization and privatization of healthcare has caught the eye of another player: Private Equity.
A report out this week by the Anti-Trust Institute explains what is happening.
Private equity firms have been increasingly acquiring physician practices across a number of physician specialties since 2012, increasing from 75 deals in 2012 to 484 deals in 2021, or more than six-fold increase in only 10 years.
In addition private equity firms are amassing high market shares in local physician practice markets.
At the local level individual private equity firms are acquiring competitively significant shares of physician practices. In particular, in 28% of metropolitan statistical areas (MSAs), a single private equity firm has more than 30% market share by full-time-equivalent physicians, and in 13% of MSAs, the single private equity firm market share exceeds 50%.
Hospitals and insurance companies have also bought out many independent physicians’ practices. Optum, an arm of the publicly traded UnitedHealth Group, which also owns one of the nation’s largest insurers, employs roughly 70,000 physicians. Studies have shown that these types of concentrated ownership of doctors in a given market are also associated with higher prices.
What does all this have to do with patient care and our health?
Absolutely nothing.