United Healthcare and CVS Caremark Make Today's News: It Isn't Good for Them and It Certainly Isn't Good for Us
The resignation of United Healthcare's CEO and the Caremark decision to stop coverage for Zepbound reflect what is wrong with how we pay for and manage healthcare in this country.
As Howard Beale cried out in the 1976 film Network (also here):
“I’m mad as hell and I’m not going to take this anymore!”
That’s what I thought of this morning as a read two news stories about healthcare. My blog on longevity would have to wait for another day.
Why are these two stories important? Because for me they reflect on what I believe is wrong with our health care system (or non-system) and the corporations that direct our medical care and how we pay for it.
For starters, take the sudden resignation of Andrew Witty as CEO of United Healthcare, the largest health care insurer and provider of care in the United States. There is no arguing that United has huge control over what happens to many of us every day. Just ask the folks who take care of you and your health.
Some might argue that United does a great job in a difficult situation. A lot of other folks don’t agree.
Mr. Witty took almost everyone by surprise when the announcement of his resignation hit the wires this morning. “Personal reasons” was the explanation, but we will likely never know what really happened.
If it was for truly for “personal reasons”, that should remain private. Hopefully, it wasn’t a tragic diagnosis or illness. But if it was for business reasons then it says something about our current state of health affairs.
The massive hack of personal information in United’s possession that occurred over a year ago was exhibit one of what should have never happened to a company as massive as United. And they skated by without much effect on their business. Even their stock barely flinched. In fact, a couple of months later the price remarkably (to me) increased:
Talk about victory being pulled from the jaws of defeat…
That hack exposed millions of us to exposure of our most private personal information. It literally shut down payments for healthcare and put many organizations and physician practices in dire situations when they couldn’t meet their financial obligations. What made it worse was that it may have been due to something as simple as not requiring two factor identification to access their systems—an open-door invitation to hackers everywhere.
Whatever the cause it was an unmitigated disaster that left me feeling United didn’t give a damn about the public—people like you and me. That effects were massive. And there was no external evidence that heads rolled or that anybody said, “We apologize. This should not have happened”.
Nope, just go on with business as usual and try to limit the damage. PR 101.
Heads should have rolled, and quite honestly at the time I thought Mr. Witty’s should have been one of the first on the chopping block. It happened on his watch. Too bad, so sad.
I realize full well he didn’t personally orchestrate the failure to put safeguards in place nor did he engineer the hack. But he was the person in charge, he set the culture of the company and the expectations. And sometimes—as noted by Doonesbury—life is hard at the top. Perhaps his exit at that time would have only been symbolic, but it certainly would have sent a message that needed to be sent. A lot of people suffered because of that hack. United deserved to share in the carnage.
What got Mr. Witty shown the door? Spending too much for the medical treatment of older folks on Medicare Advantage was certainly high on the list.
Notwithstanding the significant increase in payments that Medicare recently granted the Medicare Advantage plans, it wasn’t enough to save Mr. Witty. United’s stock price has fallen precipitously, and that is the holy grail of the investment community. Out you go for failing to make enough profit paying for the care that folks need every day.
Then there is the investigation into United’s practices of buffing the medical records so they could score billions in extra payments from Medicare. Kudos to the Wall Street Journal for bird-dogging this story of how United hounded docs to change diagnoses to earn more from the government or gave patients money and sent nurses to their homes to create needless diagnoses to conform to “illness complexity” requirements from Medicare. More profits, less care, and patients saddled with medical diagnoses that their treating physicians didn’t recognize and didn’t influence the health of the patients, because they really didn’t require treatment.
Whoopee! Let the good times roll as the money flows in the door.
Mind you: I am a capitalist. I am an investor. I believe in American business. But I also hold the old-fashioned idea that business succeeds by doing right by its customers and sometimes that means less profit and better decisions for the customer, who in this case should be the patients and not the shareholders.
Shaving a dollar here and there to increase profits may be good for Wall Street but when you operate for the public good in the public square it is not a good strategy for Main Street and the health of the nation.
So, no tears from me for Mr. Witty as he goes out the door.
The other news story today is the recent decision by Caremark CVS to stop paying for Zepbound, a drug a whole lot of folks depend on to lose weight. Instead, CVS has chosen to only pay for Wegovy since Novo Nordisk offered Caremark a better deal than Eli Lilly.
The situation is well reviewed in an article in the New York Times. I won’t repeat all the information that is behind the CVS decision. You can read that yourself.
What I will say is that the decision flies in the face of evidence and the reasonable choices that people like me should be able to make about their health care as opposed to the profits the pharmacy benefits managers (PBM’s) make by pitting one expensive drug against another.
I care about this because I have reason to care about it: I am one of those fortunate folks who have lost a whole lot of weight because of Zepbound. And I chose Zepbound—as do a lot of other folks—because there is reason to believe that it is a more effective drug. Just ask the researchers, as described in scientific studies such as one recently published in the New England Journal of Medicine.
My hunch is that a lot of folks are going find themselves caught in the crossfire of the Caremark decision. And right now, there isn’t much they can do about it except worry about the outcome. And many of those folks who have been successfully treated with one drug are going to have to switch to the other drug which may not produce the same results. (News flash: they have reason to be concerned since they are not the same drug, no matter how much the business folks at CVS tap dance otherwise.)
Clinicians and patients have been fighting these problems with the insurers and the payers for years.
Every January PBMs change their formularies and require everyone to bring different partners to the dance to meet the contract needs of the PBMs and their desire to maximize profits. Disruption rules the day, and it doesn’t appear likely to change any time soon. Today’s announcement is just one more song on the playlist.
Profits over patients and common sense has been a longstanding theme in healthcare. Many of you have experienced the fallout directly, and you are left desperate and in distress over the consequences. The frustrations of the clinicians taking care of you are also immense. Many docs and others who provide patient care are incredibly frustrated with the barriers and nonsense they face every day as they try to do what’s right by those who depend on them for their health and sometimes their lives.
With the United Healthcare revelations even the federal government is concerned. Talk about waste, fraud and abuse: this isn’t an unknown company. It is a pillar of the business community, a vaunted stock among the chosen few in the Dow Jones Index of all things, confirming its ranking as one of the best of the best in business!
I don’t expect any great reformation or mea culpa from Mr. Witty’s departure. I don’t expect Caremark to modify or reverse its decision, no matter how much clamor is made by clinicians and their patients. Some of us will continue to plead the case, but many view the situation as too complicated to understand and digest, let alone influence to a better direction and outcome.
That is not a reflection on you. It is a deliberate process by those at the top to make things as complicated as possible so normal folks can’t get understand the structured complexity they have engineered and perfected over years, while allowing the perpetrators to point fingers at the “other guy” as responsible for the problems.
Getting back to Howard Beale:
When are we going to stand up and say we are mad as hell about what these companies are doing to us and our health?
Or maybe we should embrace the concept embodied in “Illegitimi non carborundum” which is loosely translated as: “Don’t let the bastards grind you down”.
Maybe today is a good time to get mad as hell and start pushing back against the grinding.