Friday, October 05, 2012

Don't Cry for Me, Brazil - UnitedHealth May Buy Brazilian Managed Care Company

While Health Care Renewal's bloggers are at the moment all Americans, and hence tend to focus on the wild and crazy US health care system, we have suggested that many of the issues we discuss have global implications.  In fact, the first article I managed to publish on health care dysfunction was in a European journal, and framed the US experience as a cautionary tale for other countries. [Poses MD. A cautionary tale: the dysfunction of American health care.  Eur J Int Med 2003; 14: 123-130.  Link here.]

The Possible Acquisition by UnitedHealth of Brazil's Leading Managed Care Company

However, sometimes it appears that the US experience might be directly exported.  Today Bloomberg reported,

UnitedHealth Group Inc., the biggest U.S. health insurance company, is in talks to buy a stake or all of the Brazilian insurer and hospital operator Amil Participacoes SA, according to people familiar with the matter.
Acquiring all or part of Brazil’s biggest managed-care company, which carries a market value of 9.01 billion reais ($4.47 billion), would give Minnetonka, Minnesota-based UnitedHealth access to a growing private-insurance market in the world’s second-biggest emerging economy. It also may generate more opportunities for UnitedHealth’s Optum unit, which provides technology and consulting to health systems in India, China, the U.K. and elsewhere.
UnitedHealth's Ethical Record

UnitedHealth would be the company whose CEO once was worth over a billion dollars due to back dated stock options, some of which he had to give back, but despite all the resulting legal actions, was still the ninth best paid CEO in the US for the first decade of the 21st century (look here). UnitedHealth would be the company whose current CEO made a cool $106 million in 2009 (look here).

Moreover, UnitedHealth would also be the company known for a string of ethical lapses:
- as reported by the Hartford Courant, "UnitedHealth Group Inc., the largest U.S. health insurer, will refund $50 million to small businesses that New York state officials said were overcharged in 2006."
- UnitedHalth promised its investors it would continue to raise premiums, even if that priced increasing numbers of people out of its policies (see post here);
- UnitedHealth's acquisition of Pacificare in California allegedly lead to a "meltdown" of its claims paying mechanisms (see post here);
- UnitedHealth's acquisition of Sierra Health Services allegedly gave it a monopoly in Utah, while the company allegedly was transferring much of its revenue out of the state of Rhode Island, rather than using it to pay claims (see post here)
- UnitedHealth frequently violated Nebraska insurance laws (see post here);
- UnitedHealth settled charges that its Ingenix subsidiaries manipulation of data lead to underpaying patients who received out-of-network care (see post here).
- UnitedHealth was accused of hiding the fact that the physicians it is now employing through its Optum subsidiary in fact work for a for-profit company, not directly for their patients (see post here).

Exporting Health Care Dysfunction

So while the deal discussed above might be good for UnitedHealth, it is not so clear that it would be good for Brazil, as it would give a big toe-hold in Brazil to a US company whose actions have not always been exemplary, and hence may give Brazil a whiff of US health care dysfunction.

Health care dysfunction in the US has been manifested by continuously rising costs while access and quality have been threatened.  While it is possible that our recent Affordable Care Act reforms will improve access, and perhaps quality, it is likely the country will continue to lag other developed countries in providing health care value (for examples, look at this Commonwealth Fund site including international comparisons.) 

Moreover, health care dysfunction may have resulted in a uniquely distressed physician population in the US compared to those in other countries.  Here we discussed a recent large-scale survey showing nearly half of all US physicians, and more than half of generalist physicians are burned-out.  Here we discussed another recent large-scale survey showing that more than a third of US academic physicians want to quit their institution and/or academia. That survey may have suggested that their dissatisfaction was due to concerns that their leaders did not share their values about patient care and academics, their leaders may put revenue ahead of these values, their leaders may have suppressed dissent, free speech, academic freedom, and whistle-blowing, and their leaders may have acquiesced to a culture of dishonesty and deceit.

 On Health Care Renewal, we have postulated that our unique mix of health care misery may be due to a witch's brew of  concentration and abuse of power in health care, bad (that is, ill-informed, incompetent, mission-hostile, self-interested, conflicted or corrupt) leadership of health care, tactics used by bad health care leadership such as use of perverse incentives, creation of conflicts of interest, deception, disinformation, propaganda, intimidation, etc

Thus we would not recommend that other countries look to our health care system as a role model, and that their citizens should be very skeptical of US health care organizations, particularly large, for-profit health care corporations with spotty ethical records, when they come calling. Meanwhile, we in the US must do a better job solving our own health care problems, and should avoid trying to export them.

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