Sara Beth Campos, left, a clinic educator, trains Katie Robertson, a new nurse assistant, at Neighborhood Health Center in Oregon City, Ore., March 23, 2023.
And there’s an added lure: The growing privatization of Medicare, the federal health insurance program for older Americans, means that more than half its 60 million beneficiaries have signed up for policies with private insurers under the Medicare Advantage program. The federal government is paying those insurers $400 billion a year.
Insurers say their purchase of medical practices is a step toward what is called value-based care, with the insurer and doctor paid a flat fee to care for an individual patient. The fixed payment acts as a financial incentive to keep patients healthy, provide more access to early care and reduce hospital admissions and expensive visits to specialists.
UnitedHealth Group is a sprawling example of consolidated services. It owns the major insurer that has nearly 50 million customers in the United States and oversees its ever-expanding subsidiary, Optum, which has bought up networks of doctors and medical sites. Optum can send patients from one of its roughly 70,000 doctors to one of its urgent care or surgery centers.
For example, Kaiser Permanente, the giant nonprofit health plan that also owns physician groups, settled a malpractice case for nearly $2.9 million last year with the family of Ken Flach, a former tennis player who contracted pneumonia and died from sepsis after a Kaiser nurse and doctor would not send him for an in-person visit or to the emergency room, despite the urgent pleading of his wife.
In promoting the benefits of buying Oak Street clinics to investors, Karen S. Lynch, the CEO of CVS Health, said primary care doctors lower medical costs. “Primary care drives patient engagement and positive clinical outcomes,” she said. “Envision exercises profound and pervasive direct and indirect control and/or influence over physicians practice of medicine, ” according to the lawsuit. The suit maintains that Envision controls the doctors’ billing and establishes medical protocols.
Regulators are already flagging questionable methods employed by some practices. In November 2021, Oak Street disclosed that the Justice Department was investigating sales ploys like free trips to its clinics and payment of insurance agents for referrals. One doctor at a center described recruiting patients with “gift cards, swag and goody bags,” according to a shareholder lawsuit against Oak Street.