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How Wall Street Is Taking Over Medicare

Published by Anonymous (not verified) on Wed, 11/05/2022 - 8:39pm in

How Wall Street Is Taking Over Medicare

The Biden administration’s recent entrenchment and expansion of the Trump administration’s efforts to privatize Medicare is helping a shadowy set of big-business beneficiaries: private equity firms and major health care companies, including one that previously employed the government official overseeing the privatization plan, a Lever analysis shows.

In April last year, the Biden administration contracted with 53 third-party companies to mandate privatized health care plans through Medicare. The resulting health care options are effectively Medicare Advantage plans, or private coverage offered through the national health insurance program for seniors and people with disabilities — but with one wrinkle: Patients are being assigned to these new plans without their consent.

The 53 participating companies — called “direct contracting entities,” or DCEs — are allowed to offer benefits beyond traditional Medicare, like gym membership coverage. But as for-profit businesses that receive a set payment from Medicare no matter how much care they approve, these DCEs are incentivized to limit the care that patients receive, especially when they are very sick. The first DCEs were launched by President Donald Trump in 2019, and so far, at least 350,000 seniors have already been moved onto these privatized Medicare plans.

Now, a new Lever analysis of the 53 DCEs found additional cause for concern: 15 of these entities, or slightly more than a quarter, are backed by private equity firms, which are known for extracting profits at the expense of workers, the environment, and even their own pension fund investors. The firms include big-name firms like the Carlyle Group, General Atlantic, Clayton, Dubilier & Rice, Benchmark Capital, and Warburg Pincus. What’s more, another 15 DCEs are linked to big health care companies — including one with a direct connection to the Biden appointee in charge of the new privatized Medicare scheme.

Wall Street’s encroachment into Medicare is the latest example of private equity’s aggressive expansion into health care, which has ranged from hospitals to ER doctor groups. In 2021, private equity managers deployed $172 billion in capital in the health care sector — nearly four times the total budget of the National Institutes of Health.

Biden himself has lambasted the for-profit industry’s takeover of elder care services, noting during his State of the Union address in March: “As Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up. That ends on my watch.”

Biden apparently doesn’t have the same concerns about Wall Street’s growing role in Medicare — a development that could lead to higher medical bills for patients. The financial industry has already demonstrated its willingness to take a forceful approach to generating health care profits; private equity waged an aggressive campaign to derail legislation designed to stop so-called “surprise” medical bills, which formed a significant part of their hospital staffing firms’ bottom line.

Now, as private equity muscles into privatized Medicare, industry lobbyists are likely to push for more generous payment structures that benefit for-profit firms at the expense of Medicare patients. The Medicare Payment Advisory Commission, an independent body that advises Congress on Medicare, hinted at this scenario while discussing private equity’s role in the Medicare Advantage space at an April 2021 hearing.

“The end result might or might not be better for consumers, but I think that it does have an impact on Medicare payment policy,” said commissioner Pat Wang.

Experts fear that the Medicare space could be especially vulnerable to Wall Street’s predatory approach.

“We have lots of evidence from many other situations in which private equity puts profits before patients,” said Eileen Appelbaum, co-director of the Center for Economic and Policy Research and co-author of Private Equity At Work: When Wall Street Manages Main Street. “They are looking for a place where it's easy to make money — and it's easy to make money when it’s the taxpayer footing the bill.”

Big Players, Big Profits, And A Big Conflict

While the DCE program was launched under President Trump, Biden expanded the effort in February under a new name: the Accountable Care Organization Realizing Equity, Access, and Community Health program, or “ACO REACH.” Now, hospital-backed for-profit health benefit programs are also allowed to automatically enroll Medicare patients into their health care plans.

Like providers of Medicare Advantage plans, these new firms receive a set payment from Medicare for their offerings, supposedly to incentivize more holistic and better care. In exchange, these firms acquire Medicare patients in their plans — often  without the patients realizing what is happening.

In March, The Lever reported on how one Medicare beneficiary who was quietly assigned to a DCE initially misinterpreted a message she received about the shift as a health-related communication from her doctor — despite being an experienced health policy expert.

Along with the 15 private equity-backed companies, the list of approved DCEs the Biden administration released in April 2021 includes 15 operations owned by health care giants, such as insurers Humana, UnitedHealth, and Anthem, the pharmacy chain Walgreens, and the dialysis provider DaVita.

Experts say these connections raise serious questions about conflicts of interest. For example, the DCE program is being led by a little-known federal entity, the Centers for Medicare & Medicaid Services’ (CMS) Innovation Center, headed by Liz Fowler — the former vice president of public policy for the insurer WellPoint, now known as Anthem.

In response to a request for comment from The Lever, a CMS spokesperson said that Fowler was not involved in the approval process for DCEs. They additionally asserted that many of the entities identified by The Lever are not private equity-backed because they are public companies.

But several of these public companies have received substantial investments from private equity firms, also known as “private investment in public equity.” For example, while 1LifeHealthcare — a primary care provider that owns one of the DCEs, One Medical’s Iora Health — is publicly traded, the major private equity firm Carlyle Group owns more than 7 percent of its shares.

Critics say Fowler has a history of crafting policy to help her private-sector contacts.

“Honestly this just seems to add to the pattern we've observed with Liz Fowler,” said Fatou Ndiaye, a research assistant with the Revolving Door Project, which monitors the revolving door between the public and private sector.

Ndiaye pointed out that before she lobbied for WellPoint, Fowler worked for Sen. Max Baucus (D-Mont.), where she helped draft Medicare Part D, a program critics said was a huge giveaway to the pharmaceutical industry because it created massive new drug benefits without controlling prices.

After working for Wellpoint from 2006 to 2008, Fowler rejoined Baucus’ staff, where she helped draft a version of the Affordable Care Act (ACA) that excluded the public health insurance option promised by Democrats, resulting in huge profits and no public-sector competition for private insurers.

“A year after [ACA’s] passage, Wellpoint’s profits increased by 91 percent to $2.3 billion,” said Ndiaye.

Private Equity Muscles In

The fact that private equity now backs more than a quarter of all companies in the DCE space stands in stark contrast to the fact that private equity owns just two percent of all for-profit Medicare Advantage programs.

While Medicare Advantage options have been criticized by health advocates because of their extremely high costs, the fact that private equity is focusing its attention on this new kind of non-voluntary privatized Medicare scheme suggests that Fowler and the Biden administration could be setting the stage for substantially larger private equity involvement in the national health insurance program.

Examples abound of problems arising when private equity takes over health care operations. Just last month, Buzzfeed News reported that BrightSpring, a group home operator acquired by private equity mega-firm KKR in 2019, has since been plagued by serious problems at its group homes for people with disabilities, leading to residents being seriously injured and in some cases dying.

The Carlyle Group, which has an ownership stake inOneMedical, the parent company of Iora Health, has a particularly disturbing history in health care. After Carlyle acquired HCR Manorcare, a nursing home chain, the company was plagued by serious lapses in standards of care until it went bankrupt 11 years later.

Other private equity-backed operations approved for the new DCE program have major connections to the Democratic Party establishment. The private equity firm Warburg Pincus, which backs a DCE called Excelera, was co-founded by the father of current Secretary of State Antony Blinken, and boasts former Obama Treasury Secretary Tim Geithner as its president.

Laura Katz Olson, a professor at Lehigh University and author of the recently published Ethically Challenged: Private Equity Storms U.S. Health Care, said that private equity’s role in Medicare privatization raises significant concerns.

“If you understand the private equity playbook, the dangers are fairly obvious,” said Katz Olson. “They're borrowing money so they have to pay off debt. They're taking money into their pockets through fees. You would have to be a magician to keep up quality of care doing all of these things.”

She added, “Private equity is bad for health care, period, so I can’t imagine that it would be good for Medicare Advantage. I’m actually in a state of surprise that they're even thinking about it.”

Our news organization relies on readers pitching in to support our journalism. If you like this story, please support our work.

Abortion Drugs Fundamental to Ancient Economies, Argues Historian

Published by Anonymous (not verified) on Wed, 04/05/2022 - 8:01pm in

Ancient and medieval herbal abortifacients were effective and important to those economies.

Medicare Surprise: Drug Plan Prices Touted During Open Enrollment Can Rise Within a Month

Published by Anonymous (not verified) on Wed, 04/05/2022 - 7:15pm in

Yet another Medicare grift. And there's little you can do to get out of its way.

Fresh Signs of Mosquito Insecticide Resistance in South Africa

Published by Anonymous (not verified) on Mon, 02/05/2022 - 8:54pm in

South Africa could soon join the list of countries that have relegated malaria to history - although this post highlights the worrying possibility that a spike in malaria cases might occur, as a consequence of insecticide resistance

Assisted Suicide Laws Increase Suicide Rates, Especially Among Women

Published by Anonymous (not verified) on Fri, 29/04/2022 - 11:55pm in

A study on an important new legal right in some states, assisted suicide, suffers from a glaring methodological flaw.

Will Pfizer’s Paxlovid Be the Game-Changer that Saves Biden’s “Test to Treat” Program?

Published by Anonymous (not verified) on Fri, 29/04/2022 - 3:58am in

First we had "shots in arms." Now we have "pills in mouths."

Will Biden’s New COVID Czar Protect The World Or Big Pharma?

Published by Anonymous (not verified) on Wed, 27/04/2022 - 8:31pm in

Will Biden’s New COVID Czar Protect The World Or Big Pharma?

Earlier this month, Dr. Ashish Jha started his job as the White House’s new COVID-19 Response Coordinator, the crucial point person who coordinates all federal health agencies and brings finalized pandemic-related proposals to the president’s desk.

A longtime physician, public health researcher, and skilled public communicator, Jha could use his nascent power to meet the moment and push for greater global vaccine equity. Only two-thirds of the global population have received at least one COVID vaccine dose, and many of those doses aren’t the powerful mRNA vaccines needed to combat novel variants. But Jha has a questionable history when it comes to picking fights for the sake of the public good, particularly on subjects like waiving intellectual property rights and holding Big Pharma accountable.

In his gig as a global health consultant at a powerful D.C. business strategy firm that has financial ties to one of the two major COVID-19 vaccine manufacturers, Jha has kept his client roster under wraps despite publicly promising to release a client list.

And during an interview last fall, Jha indicated he might be willing to let drugmakers off the hook when it comes to taking responsibility for preventable deaths caused by their reluctance to share the profitable secrets and technology behind their mRNA COVID-19 vaccines. Such factors don’t bode well for those who hope that Jha might be willing to accomplish what his predecessor refused to do: pressure Big Pharma to help beat COVID-19 once and for all.

In his first few weeks on the job, Jha hasn’t helped matters by adopting a sanguine attitude toward the ongoing pandemic.

“I think we’ve got to be careful, but I don’t think this is a moment where we have to be excessively concerned,” Jha said during a Today Show appearance on his first day. That lax sentiment was largely echoed by Jha throughout his media blitz, as he conveyed that the pandemic is under control, and there need not be “substantial changes in what we should be doing.” Notably, Democratic Senators Ron Wyden and Chris Murphy and Vice President Kamala Harris tested positive just a few weeks later, grinding key Senate activities, like confirming Biden’s Federal Reserve nominees, to a halt.

Between his history of playing nice with pharmaceutical interests and his laissez-faire response to the pandemic, experts are concerned that Jha could be unwilling to take the necessary steps to see the country — and the world — to the other side of COVID.

“It is unlikely that the Biden administration will adopt a more protective public health response at this point — all of their recent policies have pushed to normalize high levels of coronavirus spread and the high mortality rates that follow,” Justin Feldman, an epidemiologist and Health and Human Rights Fellow at Harvard University, told The Lever. “Nothing about Jha suggests that he will try to push the White House hard on policy questions or advocate for stronger public health measures. Perhaps the best we can hope for is that Jha will use his influence to advocate for minor improvements.”

Jha did not respond to multiple interview requests sent to the White House press office.

Jha’s Journey To D.C.

Jha’s penchant for translating wonky health data into broadly accessible information has made him a regular on cable news during the pandemic. Unlike his predecessor — the more camera-shy Jeffrey Zients, a management consultant and private equity investor who left the job several months after botching the administration’s response to COVID’s Omicron variant — Jha’s public communications focus is likely one of the main reasons he nabbed the COVID-19 czar gig in the first place.

But schmoozing on English-speaking cable news shows might not help Jha reach the people who actually need information about the virus. “I would be focusing on low-income populations and populations that speak other languages,” said Julia Raifman, an assistant professor of health law, policy, and management at Boston University’s School of Public Health, who noted that the Biden administration has so far failed to keep its promise to launch a multilingual vaccine information campaign.

Experts also hope Jha will address looming policy deadlines that could leave millions of Americans at risk of medical and financial disaster.

Feldman said if he were in Jha’s shoes, he would focus on “extending the Public Health Emergency, which may expire as soon as July 15. Among other things, allowing the emergency period to expire would push millions of Americans off of Medicaid, leaving many uninsured.”

But Jha’s track record suggests he might be unwilling to make such decisions or other moves without the White House’s full consent, since he tends to operate in lockstep with the Biden team. During the Omicron surge, he called it “terrific” and “consistent with the evidence” for the administration to support isolating COVID-positive people for only five days.

Later, the White House gave him early access to a February 2022 policy modification that shifted the government’s main COVID success metric from total case numbers to strain on hospital capacities, a change that coincided with the administration aiming for “living with the virus,” in the words of Dr. Anthony Fauci, rather than total prevention. That access allowed Jha to write a gushing review of the shift for the New York Times the day the policy was released — a move that prompted some back-patting from White House officials on Twitter.

A Missing Client List

But while Jha seems to be relishing his time in the limelight, much about his business links remains in the shadows — including his potential connections to Pfizer, the company that developed one of the world’s two mRNA COVID-19 vaccines.

For the last two years, Jha has been a consultant for Albright Stonebridge Group’s “Global Health Solutions” practice, which according to its website works on “pandemic-related recovery, transition, and long-term planning and resiliency efforts.” The website also says the practice advises on broader health care topics, like “digitally distributed care, workforce deployment, medical education, public health collaborations, medical research ecosystems, [and] regulatory reform.” Pfizer is a client of Albright Stonebridge, though not necessarily of the Global Health Solutions practice where Jha worked. Mark Elliott, a senior vice president at Albright Stonebridge, was Pfizer’s global head of lobbying before joining the consultancy.

While Jha claims he hasn’t received a penny of compensation from Albright, he hasn’t clarified what work he has undertaken for the firm. He promised on social media last year to release a client list, but has not yet done so. Brown’s School of Public Health, which employs Jha, also doesn’t disclose any of its corporate donors. Brown’s biology department has a program for Pfizer employees, but that department isn’t affiliated with the public health school led by Jha.

It's unclear just how long Jha will remain in the White House, and the Biden administration might try to dismiss concerns about potential conflicts of interest if his stint is short-term. Brown University’s press release about his appointment says Jha is taking “a short-term leave from the School of Public Health for the temporary special assignment.” This may indicate that the White House is winding down aspects of its COVID response team, in keeping with an overall policy shift toward pushing COVID into the background of American life.

If Jha’s stay in the West Wing is temporary, he might be considered a “Special Government Employee,” which could exempt him from having to file financial disclosure reports that might shed light on his pharmaceutical links. Zients, who worked at the White House for over a year, did file financial disclosures.

Soft On Big Pharma

As a public health expert, Jha should be keenly aware that only 66 percent of the global population has received at least one dose of any COVID-19 vaccine. African nations are particularly undervaccinated: Less than 17 percent of Africans have received even one dose. One estimate from the global public health advocacy group ONE finds that only 12.4 percent of people living in countries that the World Bank classifies as “low income” have been fully vaccinated.

Moreover, not all of the doses that have been administered are mRNA vaccines, which appear to offer the best protection against the virus, particularly against the variants that have emerged since 2019. Studies suggest that booster doses from mRNA vaccines are the best prevention against variants, meaning it is crucial for countries to administer multiple doses to unvaccinated populations as soon as possible.

Currently, however, only two of the 29 COVID-19 vaccines in circulation worldwide use mRNA technology — and those vaccines, developed by drug makers Pfizer and Moderna, have been overwhelmingly sold to the United States and other wealthy nations that can afford the high prices demanded by the pharmaceutical giants.

“​​[mRNA] vaccines provide the best protection against Omicron and are relatively easy to update for future variants,” said Feldman. “I would focus on ensuring the Global South has access to mRNA vaccines, which involves waiving intellectual property protections and helping transfer technical knowledge so that countries like Brazil and South Africa could manufacture them.”

This heightens the stakes of whether policymakers will move to waive international trade rules and force drug companies to share their mRNA COVID-19 vaccines and treatment recipes with the world. Notably, many of the scientific advancements which led to mRNA vaccine technology were funded by the federal government over the course of decades. The federal government also spent billions supporting clinical trials, ensuring domestic manufacturing capacity, and pre-purchasing doses to encourage companies to produce large numbers of vaccines immediately.

India and South Africa have proposed waiving the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for COVID-19 treatments. This would allow any capable manufacturer to produce the Pfizer and Moderna vaccines, and mandate technology transfers to poorer countries that request them.

While the Biden administration won plaudits last year for announcing it would support waiving trade rules to facilitate global vaccination efforts, so far Biden officials have refused to endorse the specific proposed TRIPS waiver under consideration at the World Trade Organization — and wealthy European countries have actively opposed the proposal. As Biden has hemmed and hawed on the issue, at least 4 million people died of COVID-19 worldwide throughout 2021, according to data from Lancet.

A new COVID-19 Response Coordinator could be instrumental in moving forward on the issue — but Jha hasn’t given much indication that he is willing to diverge from the status quo.

“The one sort of simple, simplistic thing that people often say, [is] ‘Oh, this is all about intellectual property and we should just take these patents and make them public,’” Jha told The New York Times’ Ezra Klein in a March 2021 interview. “It’s not about that. There aren’t that many companies that can make these things. They’re actually complicated to make.” But in fact, sites worldwide could be converted to produce mRNA vaccines relatively quickly, if Pfizer and Moderna initiated technology transfer.

This isn’t the only example of Jha refusing to take a strong stand on waiving intellectual property protections to aid global vaccination efforts. Last October, Jha interviewed Noubar Afeyan as part of a series run by Brown University. Afeyan is co-founder and the board chairman of Moderna, the company behind the other revolutionary mRNA COVID-19 vaccine, from which it made $11.3 billion in 2021 alone. Afeyan is also the CEO of Flagship Pioneering, a venture capital firm that boasts Moderna as its most famous portfolio company.

Jha’s interview with Afeyan mostly involved flattering the CEO. But prompted by an audience question, Jha asked Afeyan about whether the need to save lives outweighed the company’s perceived right to profit. In other words, he was putting forward the question he should now be asking as the federal government’s chief COVID official — but he did so with a very light touch.

“I do not have to tell you that there has been frustration — and I want to talk about whether rightly or wrongly — with the companies that have built these incredible, life-saving vaccines,” said Jha, adding that he felt “incredibly blessed” to have personally received the Moderna vaccine. “As an entrepreneur and as a person who looks at billions of dollars in private investment and think[s] ‘you have to recoup it,’ and ‘you have to have the private markets work,’ how do you deal with the fact that we’ve got to do a better job in general improving access to lifesaving medicines?”

Jha received a defensive response from Afeyan.

“Before we had a vaccine that was authorized, we, Moderna, unilaterally announced that we would not enforce our intellectual property during the pandemic for anyone who uses our intellectual property to fight the pandemic,” said Afeyan. “We own a vast amount of intellectual property in the use of mRNA for vaccines. Predates everyone by many years. And we took that step unilaterally.”

But Moderna only proposed waiving enforcement of its patents to allow other developers to develop their own vaccines, not to allow manufacturers to copy Moderna’s specific COVID-19 vaccine for free. “Beyond Moderna’s vaccine, there are other COVID-19 vaccines in development that may use Moderna-patented technologies [...] while the pandemic continues, Moderna will not enforce our COVID-19 related patents against those making vaccines intended to combat the pandemic,” Moderna said. Allowing other companies to try to develop their own vaccines is not the same as allowing anyone to build Moderna’s proven COVID-19 vaccine.

Moreover, five months after Afeyan’s conversation with Jha, Moderna announced a partial reversal of that open-door intellectual property policy, saying that outside of Africa, “vaccine supply is no longer a barrier to access. In these countries, the Company expects those using Moderna-patented technologies will respect the Company's intellectual property.” The original version of the “unilateral announcement” that Afeyan trumpeted is no longer on the Moderna website.

More importantly, providing access to intellectual property does little good without also providing access to the technology needed to apply it. A doctor might be able to learn the formula for Moderna’s vaccine, but unless Moderna shares how it built the relevant machinery and used it to construct its serum, more vaccines won’t be created in the next year or two.

In his interview with Jha, Afeyan stayed on message, implying that there’s no need to transfer technology if Pfizer and Moderna eventually can provide enough doses. Even accepting the risky assumption that there are enough vaccines for the world, there remains the problem of distribution. Neither Pfizer nor Moderna have donated the number of doses they promised to in 2020, and an October 2021 report from the People’s Vaccine coalition found wealthy nations’ governments had donated just 14 percent of the doses they originally promised.

As a longtime public health expert, Jha is vastly more qualified than the White House’s last COVID czar. But he must recognize that there is a fight underway between Pharma’s thirst for profit and the imperative to end the pandemic and save lives at home and abroad. With the full power of the entire federal health apparatus behind him, he will have to pick a side — and millions of lives depend on his decision.

Our news organization relies on readers pitching in to support our journalism. If you like this story, please support our work.

Complex Eligibility Requirements, Much-Beloved of Liberal Democrats, Are Lethal When They Take the Form of Medicare Co-Pays and Deductibles

Published by Anonymous (not verified) on Mon, 25/04/2022 - 3:55am in

Small increases in cost cause patients to cut back on drugs with large benefits, ultimately causing their death.

Various Covid Updates

Published by Anonymous (not verified) on Sat, 23/04/2022 - 8:34pm in

Some Covid news, not encouraging but not yet alarming.

DOJ Files Perfunctory Appeal to Revive Travel Mask Mandate

Published by Anonymous (not verified) on Thu, 21/04/2022 - 7:41pm in

The CDC, which requested the mask mandate appeal, said "an order....remains necessary for the public health."

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