UnitedHealth
Group Haunts Obamacare
By Phil Mattera in Dirt Diggers Digest
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| Click here to see who can fix the Obamacare website. For more cartoons by Ruben Bolling, click here. |
Kathleen Sebelius’s “hold me accountable” line at the latest
House hearing on the botched rollout of Healthcare.gov was a deft political
move. It flummoxed Republican interrogators who expected the HHS Secretary to
pass the buck.
Yet the line was dismaying in that it continued the Obama
Administration’s practice of deflecting most criticism away from the
contractors that were responsible for building the portal, at a cost of
hundreds of millions of dollars.
The anointed company is QSSI, previously an obscure player in
the world of healthcare IT. What makes the kid-glove treatment of this firm all
the more galling is that QSSI is owned by UnitedHealth Group, also the parent
of UnitedHealthcare, one of the two behemoths (the other is WellPoint) of the
private health insurance industry.
In other words, one of the large corporations that the
Affordable Care Act is propping up (despite their abysmal record) is now
profiting from cleaning up the mess that one of its unit caused in trying to
create a system designed to help people enroll in plans sold by its own parent
company and its competitors.
If this were not bizarre enough, it is worth recalling that this
is not the first time a UnitedHealth subsidiary has been involved in a scandal
involving a healthcare database. In 2008 the company’s Ingenix unit was the
target of allegations that its tool for determining how much patients should be
reimbursed for out-of-network medical expenses was seriously flawed.
Then-New
York Attorney General Andrew Cuomo brought suit against UnitedHealth, calling the widely used Ingenix database
part of a scheme to “to deceive and defraud consumers.”
In 2009 UnitedHealth settled with Cuomo by agreeing to spend $50 million to build a
new database and then agreed to pay $350 million to settle
class action lawsuits that had brought over the issue. Ingenix subsequently
changed its name to Optuminsight, which by the way is now the parent of QSSI.
Another UnitedHealth subsidiary, Lewin Group, has generated
controversy of another sort: presenting itself as an impartial healthcare
consulting company when it is part of a corporation with a big vested interest
in the policy options Lewin evaluates.
During the Congressional deliberations
over healthcare reform in 2009 Lewin produced analyses
concluding that the adoption of a public option would result in a mass exodus
from private plans and jeopardize their future.
A Lewin executive made the alarmist statement that the
private insurance industry “might just fizzle out altogether” and helped to
sway lawmakers to omit the option from the Affordable Care Act. Like QSSI, the
Lewin Group is a unit of Optuminsight.
UnitedHealth is also tied to what is emerging as the new focus
of anti-Obamacare rage: reports that insurance companies are cancelling large
numbers of policies. This is being portrayed as a betrayal of Obama’s earlier
promise that people with coverage would be able to keep it. Yet what is really
going on is that insurers are complying with provisions of the ACA that bar
them from continuing to sell substandard policies.
Those policies—with huge deductibles and big holes in
coverage—were sold not only by fly-by-night companies. Aetna, for example, was
pushing these bare-bones plans as early as 1999. UnitedHealth Group made a big
push into this market in 2003 when it acquired Golden Rule Financial, which
specialized in low-cost individual plans, for $500 million. The spread of such
policies was one of the main justifications for healthcare reform.
The repeated appearances of UnitedHealth subsidiaries amid the
tribulations of the ACA are reminders that the Obama Administration made a
Faustian bargain with the private sector in designing healthcare reform. The
question now is whether it can reclaim its soul.
Note: This piece draws from my new Corporate Rap Sheet on
UnitedHealth Group, which can be found here.