ER Docs go on strike in Detroit, United Health Group Pays Ransom

Episode 85 Recap of the FLATLINING Podcast

In this episode, Ron and Matthew start off discussing the continued fallout from the Change Healthcare cyber-attack. They discuss the announcement that United Health Group (UHG), the parent company of Change Healthcare, may have paid somewhere in the vicinity of $20 million in ransom to get Change Healthcare back online.

Ron pointed out that this information begs additional questions about UHG’s actions. Given the damage that the cyber-attack had on physician groups and patients, he thought that UHG should answer to things like, why it took so long for them to respond and get Change Healthcare back up and running. Also, according to Ron, given that UHG purchased several struggling physician groups that were severely damaged by the attack, did the attack result in a benefit for UHG?  Additionally, he said, the attack was profitable for them by delaying payments to physicians from the healthcare giant. He said all these are valid questions to ask UHG leadership.

That opportunity will come this week as Matthew shared that UHG CEO, Andrew Witty, will be testifying in front of the Energy and Commerce (E&C) Oversight and Investigations Subcommittee on May 1^st.  He shared a quote from the E&C press release that stated the disappointment of the committee’s chair that UHG did not participate in the committee’s recent cyber security hearing. E&C Chair Rep. Cathy McMorris Rodgers did say in her opening comments of that hearing that UHG would testify in a future hearing, that is set for May 1st at 2 pm, you can watch it here:

The discussion shifted to a new portal launched by the Department of Justice (DoJ) to allow patients and others a chance to report on what they perceive as “Healthcare anti-competitive behavior.” Our team at Fulcrum has talked about the DoJ going after United HealthCare (UHC) for anti-trust violations in the past.  Ron shared that since the McCarran-Ferguson Act, the federal law that exempts the business of insurance from most federal anti-trust laws has become more watered down, insurance companies in many ways are fair game to the DoJ. Ron thinks the portal is set up for two key reasons, the first is to gather information from people so the DoJ can point to these complaints about how anti-competitive behavior is impacting patients, but also he thought it might be for DoJ to find areas they had not considered where Anti-competitive behavior is occurring.

Ron also said that insurance companies should take note as this interest from the feds is not likely to go away.  The justification for looking at insurance is straightforward forward he said when you consider how much of the U.S. Economy is flowing through health insurance companies. To put into perspective, he said the U.S. Healthcare Industry is the biggest single part of the U.S. economy, making up for about one-third of the overall economy. He continued, “Insurance companies now are about 30% of total dollars flowing through the U.S. Healthcare industry overall.” Most states are beyond what they think is a competitive environment when it comes to health insurance.

Matt said in his review of the portal, that frequently asked questions seem to point toward this being more patient-centric, but he read one prompt that discussed pricing information being kept from patients or the general public. Ron said this really comes down to the government wanting more transparency, but he did point out, what many in the healthcare industry know, that pricing is not straightforward before a medical procedure.  Not all cases are the same, he said, some get complicated with longer hospital stays, etc. Even considering this, he pointed out that it isn’t fair to patients to hide behind non-disclosure agreements and then only provide the cost after the fact. This transparency could inject some free market options for patients to make some decisions in their healthcare choices he said.  Matthew pointed out that price can also impact quality. Ron shared that in a free market, patients would know the cost and have some idea of quality. He said we do those comparisons all the time when we shop, it’s just harder right now with the information available for patients to make that decision.

Ron thinks that this portal could impact some providers, hospitals, or groups, mainly those that hold dominant positions in their market. The DoJ may question if a practice or hospital is using its dominance in the market in an anti-competitive way, but he thinks it will be harder for the feds to look at individual medical groups for this kind of behavior.  Hospital groups may be another story as there are some counties where they are the only hospital, but in the end, he said the carriers are the most likely focus of the feds interest.

In the last segment, Ron and Matthew discuss the recent walkout of physicians employed by TeamHealth, a private Tennessee-based physician and hospital management company. Ron provided a primer on how these Private Equity (PE) firms work in the healthcare space. The Fulcrum team has discussed this topic before and both our hosts are not fans of PE in medicine, mainly because the PE group is looking to turn a profit and that, they said is not always good for the patient.

In this case, the ER docs are claiming they are understaffed. Ron explained that one of the ways PE firms make money, particularly when they buy up ER groups, is they save expenses by cutting staffing. The result of staff cuts increases wait times, the article in the Detroit Free Press quoted one doctor discussing wait times of seventeen hours. That Ron said, is unfortunately not uncommon when there are staffing cuts but almost any ER physician will tell you that seventeen hours is not good medicine. In emergency rooms he said, some days may be slow or others when you need everyone you got, “You can’t predict the load” he said.

Matthew pointed out the doctors voted to unionize last year and TeamHealth said they are dedicated to negotiating in good faith with the union and are inviting the union back to the bargaining table.  According to the Detroit News, TeamHealth pointed out that its median door-to-door wait times at the St. John Emergency Department was 25 minutes in 2023 and that has dropped to 15 minutes in 2024.

Matthew asked Ron who gets hurt when this happens. Ron said other than the public relations challenge TeamHealth is not really hurt, but the hospital must figure out how to staff the ER and the patients are impacted as well. Ron said he understood in this case the ER group let the hospital know when they were walking out, so the hospital could make other arrangements, pointing clearly to the fact that the physicians did not want to walk out of the ER leaving patients with no care. He reflected that he was not aware of any physician group that ever participated in a protracted strike that would put patients at risk. Ron said he hopes that companies like TeamHealth don’t take advantage of doctors’ good nature in caring for their patients, because if doctors walked out like workers in other industries, it would be really bad for all of us.

You can read the full articles in this podcast by checking out the show notes.