Value-based care is a red flag that a healthcare CEO was not thinking things through.
Everyone else notices how this “value-based care” idea will lead to grotesquely perverse incentives, right? Physicians for a National Health Program at least recognized the problem.
I’m sorry if this seems like victim blaming, but I do think this demonstrates that people who become CEOs of giant healthcare corporations should definitely not be assumed to be particularly clever or insightful, I also think they shouldn’t be trusted with responses to disasters or “innovations” to any systems for that matter. It does seem like common sense that the CEO of a health insurance company that spends all its time and resources to avoid paying for people’s healthcare should’ve shown a little less hubris. (Of course elites always panic about the wrong things, even if it hurts their own interests, this is a known pattern.) I would’ve assumed that a person in that situation would be aware that the company is likely on the shitlist of any number of wronged and angry patients. But wait, there’s more - while some major media outlets have repeated the idea that this guy kept a “low profile” (do better, AP and PBS!), in fact in a newsletter from Payday Report, Mike Elk reported that this guy was being sued by Hollywood Firefighters union, saying “The union sued Thompson for failing to reveal that United Healthcare was under DOJ investigation. As a result, the pension fund lost $25 billion in value. Meanwhile, Thompson had cashed out over $15 million in stock while selling the stock to pension funds like those of the Hollywood Firefighters union.” and pointing to Ken Klippenstein’s report. So the list of people with axes to grind is numerous. Not what I’d describe as a low profile, but whatever.
The lack of judgement that stood out to me though was in another article which mentioned that: “At an investor meeting last year, he outlined UnitedHealth's shift to "value-based care," paying doctors and other caregivers to keep patients healthy, rather than focusing on treating them when they get sick.”
Who is Brian Thompson, the UnitedHealthcare CEO shot dead in Manhattan? By Megan Cerullo Edited By Anne Marie Lee Updated on: December 4, 2024 / 8:22 PM EST / CBS News For a top executive at a $562 billion company that affects how millions of Americans get health care, Thompson kept a relatively low profile. At an investor meeting last year, he outlined UnitedHealth's shift to "value-based care," paying doctors and other caregivers to keep patients healthy, rather than focusing on treating them when they get sick.
This “value based care” sounds quite obviously like a recipe to get doctors to fail to notice or even note any signs of serious disease. It sounds like an incentive to not document anything well, and to deliberately not notice any problems. Instead of being paid to cure and treat illness and relieve suffering, they would be incentivized to have patients with no sickness documented. Just sweep it under the rug! And if the patient dies, so be it because then they’re not a patient anymore and not covered by health insurance anymore, so they wouldn’t count in the metrics. And try to recruit mostly healthy people into your patient pools, and avoid taking on patients with chronic illness or any serious condition. Similar to the madness of “high risk pools” in privatized insurance. And already we have this problem with networks where some providers that are in-network are begrudging about it, and have their clerical staff make it as hard as possible to make an appointment if they have the “undesirable” insurance. I can’t prove this happens but it sure seems like it does since I’m not the only person who’s talked about running into this type of treatment and runaround when a specialist seems like they don’t want you as a patient even though they’re accepting new patients nad supposedly are in-network.
Obviously an optimistic person might think that there would be an incentive just because not all patients die outright, and surely to mitigate downturns would be desirable. But that’s where loss aversion comes in, and also that market incentives are known for absolutely stinking at long-term goals, seemingly always favoring the short term. Andt if the patient takes a huge downturn and becomes disabled because of a preventable condition doctors failed to document, report, or treat, the patient will likely be shoved off the private healthcare insurance when they lose their job, and into Medicaid and maybe eventually Medicare, so then, again, not the problem of the private health insurance company. It’s all about socializing the losses and privatized profits.
I was astonished that this concept could be taken seriously given this glaringly obvious flaw. It’s so obvious that this would NOT be an improvement. Especially in the system we have that’s rife with perverse incentives already. I was relieved to find that Physicians for a National Health Program recognize the problem, and that there’s a published article from 2016 on the “countervailing incentives” and behavioral economics involved, and it articulates how the cognitive bias of loss aversion works so that people are more motivated to avoid loss than to seek gain. They didn’t articulate the gruesome corruption that I just envisioned. But anyone who’s worked in or adjacent to any kind of healthcare or health insurance in the trenches will know how the violence of the system plays out. It’s quite obvious this scheme would benefit the most lurid and ruthless of healthcare providers, and it would force even decent caring doctors into morally injurious situations as they would be pressured by employers to hide disease more than to prevent it or maintain health in patients. We already see how this works in these bureaucracies. If they’re looking for a solution to “upcoding”, which is a legitimate problem in the current payment system, then I suggest better oversight by patient advocacy oriented regulation makes sense. There’s no market solution here that would “naturally” benefit patients with the “invisible hand” they set up.
We need not just to let go of that idea, but to call it out, and reject it outright.
Lawsuit Against Murdered CEO - Firefighters pension accused UnitedHealthcare CEO of fraud, insider trading Ken Klippenstein Dec 04, 2024 In May, the Hollywood Firefighters’ Pension Fund had filed a lawsuit against Thompson, alleging he had sold over $15 million of UnitedHealth stock despite being aware of an active Justice Department antitrust investigation into the health insurance company that he did not disclose to investors or the public. Though UnitedHealth, the lawsuit alleges, was aware of the Justice Department investigation since at least October 2023, the public would only learn of the case when the Wall Street Journal published a story about it on February 27, 2024. When news of the investigation broke, it erased almost $25 billion in shareholder value. But by that time, Thompson had already cashed out, selling over $15 million in personally held UnitedHealth shares, per the suit. If true, the account affirms the countless internet memes’ depiction of Thompson as a rapacious health insurance executive fat cat. Literally none of the news media coverage I’ve seen about the murder has included this context, instead tugging at heart strings about the two sons he’ll be leaving behind. Members of Congress have likewise issued anguished statements about the tragic loss of life, remarks that decline to mention the allegations against him or the vast sums of money the company he oversaw has contributed to them and other politicians.
Behavioral economics and countervailing incentives in value-based payment - By Daniel R. Arnold Healthcare, May 17, 2016 But there is mounting evidence that extrinsic rewards can undermine intrinsic motivation. Of the numerous findings that relate to the crowd-out of intrinsic motivation, two seem particularly relevant to physicians: (1) negative effects of monetary rewards are strongest for complex cognitive tasks and (2) motivational crowd-out spreads to work that is not directly incentivized. With respect to complex cognitive tasks, even very large financial incentives undermine performance. For example, rural villagers in India offered half their annual money income experienced worsened performance on complex memory and puzzle-solving tasks. The spread of motivational crowd-out to work not directly incentivized has been observed in England. In 2004, the U.K. government introduced a pay-for-performance scheme with 136 indicators for family practices. By 2007, improvement for incentivized measures had plateaued, and quality deteriorated for two measures that were not incentivized.
PBS - Hacking Your Mind - Weapons of Influence Episode 102 | Marketers and politicians hack into your autopilot system — learn how to fight back. Aired 08/05/2020 | Expired 09/10/2024 | (transcript) One of the field's key insights is that gut feelings like loss aversion lead consumers to make predictable mistakes, and companies in a market economy make a lot of money by encouraging us to make those mistakes. Until then, the widely accepted view had been that markets actually protect consumers from their mistakes. “And so I would often hear something like the following -- "Yes, yes. I understand that the people in your experiments and some of the people I know do foolish things, but in markets, then -- and then I claim..." They could never quite finish this sentence without literally waving their hands, and the argument is somehow if you choose the wrong career or fail to save for retirement, that the market will somehow push you back toward being rational. There's a reason why no one can make this argument without waving their hands, and that's because the argument is just silly. You know, if you don't save enough for retirement, what happens to you? You're poor when you're old. The market doesn't discipline you. Suppose people have a weakness for gambling. What's going to happen? Will people build casinos, or will they offer programs to help people curb their gambling addiction? Well, people have made a lot more money on casinos than on programs to stop gambling.”