Biden is continuing Trump's privatization of Medicare. Here's what you need to know.

The most devious part: they've made it easier for seniors to be placed into a for-profit Medicare plans without their knowledge.

You may have heard that President Biden is supporting the continuation of a program started under the Trump administration that will further privatize the Medicare program. If you have indeed heard about it, it likely is not because of media coverage of the scheme itself but because of the alarm raised by Physicians for a National Health Program and the efforts the organization has made to get the Biden administration to scrap it. 

Veteran health care journalist Trudy Lieberman has just written one of the best pieces I’ve read yet that explains what is going on, what is at stake, and what PNHP, some Democrats in Congress, and now other advocacy groups are doing to pressure the Biden administration to put an end to what the Center for Medicare and Medicaid Services euphemistically (and I would argue deceptively) calls ACO REACH, which stands for Accountable Care Organization Realizing Equity, Access and Community Health. 

That’s actually a new name for a somewhat “redesigned” program that under Trump was called the Global and Professional Direct Contracting (GPDC) Model. CMS announced the new name in a February press release. CMS said at the time that the program was being renamed and rejiggered “to advance Administration priorities, including our commitment to advancing health equity, and in response to stakeholder feedback and participant experience.”

But as Lieberman wrote in her article, published by the University of Southern California Center for Health Journalism:

The shift would also complete the privatization of what has been a popular and successful social insurance program since 1965. Whether that underlying goal will be realized remains to be seen, but at the very least, millions of seniors still in the traditional fee-for-service program and presumably happy with their care need to know what’s in store for them. 

It would be cause for concern if only nonprofit health care organizations were being invited to participate in the ACO REACH program. Instead, the door is being opened wide to include the for-profit insurers I used to work for as well as private equity firms. As Lieberman noted:

Insurance companies and private equity firms are now teaming up with physician groups to invest in these new accountable care businesses, generating profits for all involved if they can save money for the government. 

Republicans have been lukewarm about the traditional Medicare program from the very beginning. When Congress approved an amendment to the Social Security Act to create Medicare in 1965, more Republican Senators voted against it than voted for it.  Over in the House, 70 Republicans either voted against it or didn’t vote, while the same number voted for it. Had it not been for the fact that Democrats at the time enjoyed filibuster-proof majorities in both chambers and a Democrat, Lyndon Johnson, was in the White House, the much-loved government-run Medicare program likely would never have been created. And ever since then, many Republicans in Congress have tried to get rid of it or, failing that, completely privatize it. As Lieberman wrote:

Transforming Medicare into a program managed by private insurers has been a long-sought goal of politicians, dating back to House Speaker Newt Gingrich in the 1990s and embraced by successive administrations. The Biden administration is no exception and has set a goal of placing all Medicare beneficiaries in one of these so-called “value-based care” arrangements by 2030. In my view, such a move would fulfill Gingrich’s prophecy of letting “Medicare wither on the vine.”  

Back to the current debate over what CMS under Biden is doing. Lieberman wrote that critics of the privatization efforts “fear that these programs will seek to save money by limiting health care services, some perhaps unnecessary but others not. If they succeed, investors can keep a portion of the savings as profit.” She added that:

Despite the bullish rhetoric that has historically been attached to accountable care organizations — improving the quality of patient care, lowering health care costs — private equity firms are not known for their social altruism or desire to pare government expenditures. Critics of these programs fear that these programs will seek to save money by limiting health care services, some perhaps unnecessary but others not. If they succeed, investors can keep a portion of the savings as profit. 

Among those critics is Dr. Ed Weisbart, who once served as chief medical officer of Express Scripts (now part of Cigna, where I used to work) and is now chair of the Missouri chapter of PNHP. Lieberman quoted Weisbart as saying: 

“The middlemen are more interested in their own financial well-being than the health of the people they are managing. The investment community is not investing for some noble interest. They’re not investing to improve the public’s health.”   

Lieberman concluded with these insightful observations and questions:

The core issue in this debate is as it always has been: How should doctors be paid and who should profit most in a health system that is basically a for-profit endeavor rather than a public good as in most other peer countries? 

That raises the underlying but key question: Will this latest Medicare experiment, which brings in more private equity firms that want a piece of the program, really solve Medicare’s cost problem, or will it simply hand over more of the program to private companies seeking to grow their profits? Is this solution really in the best interest of America’s seniors and their health, or another clever instance of American companies mining the health care system for fresh profits?

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