Medical topics for 2025. Happy New Year, readers! You may have noticed that I skimmed through the holiday season without writing anything here. Nevertheless, I have been thinking of topics to be considered in 2025.  I plan to focus more on medicine, medical costs, and various methods believed to prolong lives, and to healthy living, among other subjects.

Today, I’ll focus on one of the more depressing related topics, namely the sad truth regarding certain healthcare costs.  If you’ve read my previous post on absurd prescription drug costs, you know how Congress helped create the sorry tangle of prices we pay for our medicines, not to mention the huge profits made by companies acting as “middlemen” and who distribute our prescription medications (see here for that post).

Our health care costs are also screwed up. Yesterday’s Wall Street Journal published an extensive article on the medical insurance business, specifically Medicare Advantage programs. Its headline: UnitedHealth’s Army of Doctors Helped It Collect Billions More From Medicare (see here)

Here’s some background: The government’s Medicare Advantage system makes use of  private insurers to provide health benefits to seniors and disabled people. It works like this, the sicker the patients are, the more money the insurers collect from the government. But how does the government know how sick the patients are? Well, by how many illnesses they are diagnosed as having. In short, the more sicknesses diagnosed by doctors and submitted by insurers, the more money the government pays the insurance company. What could go wrong? Plenty, it seems.

As the WSJ article points out, in the case of UnitedHealth, many of those doctors work directly for UnitedHealth, an industry pioneer in directly employing large numbers of physicians. Its Optum unit now employs about 10,000 physicians, its top executive has said, making it one of the nation’s largest employers of doctors. It contracts with tens of thousands more. No other national insurer has acquired and hired doctors on that scale.

Checklist of potential diagnoses

The company frequently prepared its doctors with a checklist of potential diagnoses before they ever laid eyes on their patients, but only for those patients specifically covered by the Medicare Advantage program. One physician reported its software wouldn’t let him move on to his next patient until he weighed in on each diagnosis, some of which were exceedingly rare. How did this work out?

According to the WSJ article, sickness scores of patients were increased when they moved from traditional Medicare to Medicare Advantage, leading to billions of dollars in extra government payments to insurers. And patients examined by doctors working for UnitedHealth had some of the biggest increases in sickness scores when they made that specific move, according to the Journal’s analysis of Medicare data between 2019 and 2022.

Sudden increase in sickness scores in Advantage plans

Sickness scores for those UnitedHealth patients increased 55%, on average, in their first year in the plans, the analysis showed. That increase was roughly equivalent to every patient getting newly diagnosed with HIV, the virus that causes AIDS, and breast cancer, the analysis showed. That far outpaced the 7% year-over-year rise in the sickness scores of patients who stayed in traditional Medicare, according to the analysis.  As described in the WSJ article:

Patients who both saw UnitedHealth doctors and were enrolled in UnitedHealth plans had the highest average sickness scores in the Journal’s analysis of claims from 2019 to 2022. Those higher sickness scores triggered about $4.6 billion more in Medicare payments than UnitedHealth would have received if those patients’ scores had been in line with the average for the company’s other Medicare Advantage patients. (My thought: That extra $4.6 billion came from the pockets of us taxpayers.)

UnitedHealth response

A UnitedHealth spokesman said that the company’s practices lead to “more accurate diagnoses, greater availability of care and better health outcomes and prevention, including less hospitalization, more cancer screenings and better chronic disease management.” The company’s approach, he said, helped to avert more serious health problems later, and to achieve Medicare Advantage’s goals of improving quality and reducing costs. The company also said Medicare’s system of paying for diagnoses was developed by the government, not any one insurer, “to help ensure fair and accurate payments.”

The WSJ piece also included this response from a spokeswoman for the Centers for Medicare and Medicaid Services which indicated the agency is studying relationships between Medicare Advantage insurers and medical providers, adding that Medicare Advantage insurers are required to ensure the accuracy of diagnoses they submit, and also that the agency had overhauled the list of diagnoses that trigger extra payments.

More tidbits from WSJ article

When Dr. Naysha Isom started working at a UnitedHealth medical group in the Las Vegas area in 2019, she said, she got two days of training on how to record diagnoses. At the training, a UnitedHealth employee suggested that Isom, who had practiced for more than a decade, should consider diagnoses she had never made before.

Isom said she was told that signs of bruising could be recorded as senile purpura, a condition that generated payments in Medicare Advantage but generally didn’t require treatment. Isom saw no point, since the finding didn’t change patients’ care: “OK, wear some sunscreen. Maybe stop bumping the wall.”

Bonus pay

A December 2023 compensation plan for one UnitedHealth-owned practice offered doctors bonuses of up to $37.50 a year for each of their Medicare Advantage patients if they confirmed or ruled out more than 90% of the suggested diagnoses. That means a doctor seeing 800 Medicare Advantage patients in a year could see a bonus of as much as $30,000 a year.

Like other Medicare Advantage companies, UnitedHealth also contracts with outside doctors in ways that can increase their payments when they diagnose more conditions. That includes arrangements where doctors receive a portion of the Medicare payments insurers get for their patients. . . In some contracts with independent doctors reviewed by the Journal, UnitedHealth linked bonuses to sickness scores and quality ratings derived partly from patient surveys. For patients with sickness scores 20% higher than average and good quality ratings, doctors could get an extra $40 per patient each month, one contract shows. Scores 50% above average and top quality ratings could yield $65 per patient a month. For a doctor with 100 patients covered by the contract, that would amount to a $78,000 annual bonus.

Final thoughts

The article that stimulated this post contains other shocks. Check it out if you’re interested (see here). In the meantime, stay tuned for more medical topics in 2025.