Health Jake Johnson Politics

Congress ‘Asleep at the Switch’ as Biden Continues Trump-Era Ploy to Privatize Medicare

Sign at Walmart welcoming Medicare customers
(Mike Mozart / Flickr)(CC BY 2.0)

By Jake Johnson / Common Dreams

A Trump-era pilot program that could result in the complete privatization of traditional Medicare in a matter of years is moving ahead under the Biden administration, a development that—despite its potentially massive implications for patients across the U.S.—has received scant attention from the national press or Congress.

On Tuesday, a group of physicians from around the nation will try to grab the notice of lawmakers, the Biden White House, and the public by traveling to Washington, D.C. and demanding that the Health and Human Services Department immediately stop the Medicare experiment, which is known as Direct Contracting (DC).

The doctors plan to present HHS with a petition signed by more than 1,500 physicians who believe the DC pilot threatens “the future of Medicare as we know it.”

Advocates have been publicly sounding the alarm about the DC program for months, warning that it could fully hand traditional Medicare over to Wall Street investors and other profit-seekers, resulting in higher costs for patients and lower-quality care.

“Everything we know about Direct Contracting should be cause to halt the pilot,” Diane Archer, the founder of Just Care USA and the senior adviser on Medicare at Social Security Works, told Common Dreams in an email. “Direct Contracting effectively eliminates the more cost-effective traditional Medicare program designed to ensure that people with complex health conditions get the care they need.”

“The Direct Contracting experiment is likely to be both a healthcare policy and a political nightmare,” Archer argued. “We already know from the Medicare Advantage experiment that Direct Contracting won’t save money, nor will it be able to show improved quality.”

But healthcare campaigners’ concerns have fallen largely on deaf ears in Congress and the Biden administration, which has allowed much of the pilot program to proceed as planned.

In a phone interview with Common Dreams ahead of Tuesday’s demonstration at HHS headquarters, Dr. Ed Weisbart—chair of the Missouri chapter of Physicians for a National Health Program (PNHP)—said that Congress is largely “asleep at the switch” as Wall Street-backed startups and private insurance giants close in on traditional Medicare, a 56-year-old program that covers tens of millions of U.S. seniors.

“People don’t know that it’s happening,” Weisbart, one of the physicians traveling to the nation’s capital, said of the DC experiment. “Most people in Congress don’t know that it’s happening. We’ve started having some of these conversations with congressional staff, and we’re hoping to have many more of them next week when we’re there, but it’s not on their radar either.”

“That’s the disturbing part,” he added. “How radical the transformation of Medicare is becoming under this new model, how widespread it will be—it’ll be the entire book of business—and yet that’s occurring with neither the awareness nor consent of Congress.”

The DC program was established by the Center for Medicare and Medicaid Innovation (CMMI) during the waning months of the Trump administration, which included former pharmaceutical industry executivesWall Street bankers, and right-wing policy consultants notorious for gashing public health programs.

Under the DC model, so-called Direct Contracting Entities (DCEs) are paid monthly by the Centers for Medicare and Medicaid Services (CMS) to cover a specified portion of a patient’s medical care—a significant shift from traditional Medicare’s direct reimbursement of providers.

DCEs are allowed to pocket the funding they don’t spend on care, an arrangement that critics believe will incentivize the private middlemen to skimp on Medicare patients—many of whom could be auto-enrolled into DCEs without their knowledge or permission.

According to a policy brief released by PNHP, “Virtually any company can apply to be a DCE, including investor-backed startups that include primary care physicians, [Medicare Advantage] plans and other commercial insurers, accountable care organizations (ACOs) or ACO-like organizations, and for-profit hospital systems.”

“Applicants are approved by CMS without input from Congress or other elected officials,” the group notes.

At present, the pilot includes 53 DCEs in 38 states, Washington, D.C., and Puerto Rico. Drs. Richard Gilfillan and Donald Berwick pointed out in a September article for Health Affairs that 28 of the current DCEs are controlled by investors, not healthcare providers. A second tranche of DCEs is expected to debut in January 2022.

Dr. Ana Malinow, a physician from San Francisco who is taking part in Tuesday’s petition delivery, said in a statement that “Medicare Advantage—the first wave of Medicare privatization—showed us that inserting a profit-seeking middleman into public coverage does not save money for taxpayers, but rather costs more money while also taking away care choices from seniors.”

“If left unchecked, the Direct Contracting program will hand traditional Medicare off to Wall Street investors, without input from seniors, doctors, or even members of Congress,” said Malinow. “Health and Human Services Secretary Xavier Becerra has the power to stop this Trump-era program in its tracks, and must do so now.”

The DC experiment was launched by the Trump administration but actually has its roots in the Affordable Care Act (ACA), which established CMMI with the stated goal of identifying “ways to improve healthcare quality and reduce costs in the Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) programs.”

The ACA granted CMMI, also known as the Innovation Center, the authority to test alternative payment and service delivery models on a national scale without congressional approval—latitude that, in the hands of the Trump administration, ultimately spawned the DC pilot program.

CMMI is currently headed by Elizabeth Fowler, who previously served as vice president of public policy and external affairs for WellPoint, Inc.—a health insurance giant that later became Anthem. Fowler also worked as chief health counsel to former Senate Finance Committee Chair Max Baucus, a right-wing Democrat who infamously had single-payer proponents arrested in 2009 and helped ensure that the ACA did not include a public option.

Weisbart told Common Dreams that while the creation of CMMI may have been well-intentioned, the body’s ability to “so fundamentally and radically transform a public health program that so many Americans rely on” without congressional approval or oversight is a real danger that lawmakers must take seriously.

“Someplace there needs to be congressional oversight,” Weisbart said. “When the public does finally find out that [lawmakers] were asleep at the switch, they’re not going to be happy. This is your chance to do what democracy is intended to do.”

The Biden administration paused the most extreme form of Direct Contracting—known as the Geographic (GEO) model—in March, but it is allowing the Global and Professional Direct Contracting (GPDC) pilot to move forward. According to CMS, the GPDC pilot is expected to play out over a six-year period.

While lawmakers have largely been quiet about the Medicare experiment, a handful of Democratic members of Congress have echoed grassroots demands for an immediate end to the DC program in recent months.

“We appreciate that you paused implementation of the Geographic model,” Reps. Lloyd Doggett (D-Texas.) Bill Pascrell (D-N.J.), Mark Pocan (D-Wis.), Lloyd Doggett (D-Texas) wrote in a May letter to Becerra and then-Acting CMS Administrator Elizabeth Richter. “However, we remain worried that the 53 DCEs participating in the GPDC model, a policy launched under the Trump administration, lacks oversight to protect Medicare beneficiaries’ care.”

“As members of Congress committed to protecting Medicare beneficiaries,” the lawmakers continued, “we ask that CMS immediately freeze the harmful CMMI DCE pilot program including the Geographic model and the Global and Professional Direct Contracting Model and evaluate the impact to beneficiaries.”

In September, Porter took part in a PNHP-hosted webinar that spotlighted the potentially far-reaching harms of the DC pilot.

“This program was supposed to make Medicare more efficient,” said Porter. “But actually it does just the opposite. Rather than allowing patients to go to providers directly under traditional Medicare, DCEs invite insurers and investors to step in and interfere with the care that Americans get.”

“This Direct Contracting Entity model is just one more example of the Trump administration’s many attempts to wreck a functioning, successful, popular government program for the sake of lining the pockets of its corporate donors,” Porter added. “The bottom line for Direct Contracting Entities is not to improve the quality of care. They drive up costs for patients to maximize their profits.”

In a column earlier this month, the Houston Chronicle‘s Chris Tomlinson argued that the Biden administration’s decision to allow the DC program to continue “reflects for-profit health companies and investors’ power over both political parties.”

“Direct Contracting is also likely to kill any chance for progressive Democrats to make Medicare an option for any American who wants to enroll,” Tomlinson added. “If the government puts private companies in charge of all Medicare patients, it will eliminate any opportunity to overhaul our healthcare system truly.”

“Next year,” he added, “millions more Americans will find themselves in privatized Medicare, and most will never know what happened.”

12 comments

  1. They all want mea culpas, no? Perkins, “Confessions of an Economic Hitman,” and, well, Mr. Wendell Potter, former executive of Cigna Health (sic).

    Amazing how an Eichmann or two or fifty million, might see the light, but most probably will not.

    MARTIN (NPR, National Propaganda Network) : So let’s talk about your role in this. In one of your tweets, you say, “here’s the truth. Our industry PR and lobbying group, AHIP, supplied my colleagues and me with cherry-picked data and anecdotes to make people think Canadians wait endlessly for their care. It’s a lie. And I’ll always regret the disservice I did to folks on both sides of the border,” unquote. Did you know at the time these things were lies? Or is this something you subsequently learned?

    POTTER: I was becoming concerned, as it was necessary for me to spread this misinformation, and it really began in 2006. And that was sort of when my crisis of conscience began, and it pertained to the premiere of Michael Moore’s movie “Sicko.” And part of our campaign to push back against that movie was to spread misinformation about Canada or use cherry-picked data and anecdotes. For example, AHIP sent me and my counterparts at other insurance companies a binder just as that movie was premiering with bullet points of things that we should say in our conversations with reporters and others about the Canadian system or the British or French system for that matter but, particularly, the Canadian system. These really were cherry-picked data points and was not in any way painting an accurate portrayal of the Canadian health care system.

    MARTIN: So why did you do it?

    POTTER: You know, I was believing my own PR for a long time. I rose up through the ranks. I had a good job. I was leading corporate communications at Cigna when I left. I was able to kind of compartmentalize as well, too, but also keep myself removed from the problems that so many people in this country are facing when it comes to getting care that they need and can afford. But on the other hand, if I hadn’t done that, I wouldn’t know what I know. And I’ve been one of the very few people who has some insider information to share with the public and with policymakers. I’ve testified before Congress many times and written lots of columns and done lots of media work to try to help people understand our system better and how it compares and contrasts to other systems around the world.

    MARTIN: What was that aha moment for you? Do you remember it?

    POTTER: Oh, I sure do remember it. There were two or three. But the real aha moment for me came when I went back home to visit my family in east Tennessee, where I grew up. I just happened to read about something that was called a health care expedition that was being held at a county fairground close to where I grew up. And I’d never heard of it because I lived away from there for many years and just happened to be there that weekend. And it said people would be driving from hundreds of miles away to get care that was being provided at this county fairground over three days, and it was free. And it said people typically would spend two or three nights in their cars waiting to get in to get treated.

    I went there out of curiosity. And when I got there, I just was absolutely stunned at what I saw. I just couldn’t imagine that I was still in the United States. When I walked through the fairground gates, I saw people who were lined up by the hundreds waiting to get care, and it was truly an epiphany. I also realized that what I was doing for a living – I had to take some responsibility for that because I was perpetuating myths about the Canadian health care system, myths about this health care system in this country, spreading this information to protect profits for my company and for the industry. And I was a journalist in my first career, a newspaper reporter. And I realized, also, that what I was doing for a living was in many ways the exact opposite of what I tried to do as a reporter, which was to be accurate.

    And I just for various reasons felt, gosh, I – what happened to me? I looked in the mirror at one point. I said, what happened to you? How did this happen? And I made a decision soon after that that I would have to find some other way to earn a living. And it wasn’t too long after that that I did leave.

    https://www.npr.org/2020/06/27/884307565/after-pushing-lies-former-cigna-executive-praises-canadas-health-care-system

    https://wendellpotter.com/the-potter-report/

  2. Congress is not “asleep” regarding this issue; they work for these insurance companies just like they work for their other donors. Privatization of public resources and services has only been allowed to fester and metastasize because of that.

    Our fight should be to eliminate all private campaign contributions. Instead, we waste time, energy, and money fighting the bad results of allowing them, like this one.

  3. We have the technology and capacity right now to eliminate money from our lives and to have a great abundance of goods and services, without having to pay for them for all of mankind, and also experience rapid growth in medicine and science by simply providing all of the basic necessities of life to all people for free. Now this contemplates that each person will contribute some time and effort so they can participate in this society, but everyone will be on the same playing field. And the Human potential will soar.

  4. All we need it to make the US “healthcare system” worse than it is now!
    What is very sad is that the UK’s NHS, beloved by the people and for many years so effective and appreciated, is being privatized piece by piece and the US “healthcare companies” are being paid to help it happen.

  5. Asleep at the switch, or dead in the water ….
    Both “major” parties have been taking a whack at Med/SS for some time …
    We owe Monica for derailing Clinton’s desire to “reform” Med – he got distracted by his impeachment problem, realized he needed all the help he could get and knew that efforts to fiddle with Med would be quite unpopular with his base
    And, surprise, surprise, we owe the Reps for derailing Obama’s attempt with his “Catfood commission” (remember that?) because they were intent on saying NO to ANYTHING Obama proposed, even if it actually furthered their own program.
    So it should be no surprise that this Admin and its sycophants in Congress would be pulling this stunt – if their excuse is that they are “unaware” (sound familiar?), we all need to make them “aware” – I just called my Sen.s in NY and told them NO! – so if it proceeds it is only because they want it to and we will be very “aware” that they do …

  6. Privatization has never met its stated goals of continued if not improved service at a lower cost. Instead it has always resulted in less and corrupted service at increased cost. Furthermore, there is no administrative oversight, which has led to the theft of employee retirement funds and the deterioration of facilities.

  7. Congress is not asleep, it is as though they have nothing better to do than wreck stuff. Be it forever war or the Constitution, erode erode erode.
    Biden proclaiming he’s a capitalist in MN yesterday, just like Pelosi,
    it’s a shit show pure and simple

  8. The purpose of privatization has always been to divert the stream of public
    tax dollars into the maw of parasites. Karl Marx, or someone like him, said that
    the last stage of capitalism would feature the cannibalization of all that it had
    built up. This is happening right now.

    The only profits that are getting sustained are the artificial ones due to
    free loot provided by government. It won’t be long until the privatized entities
    are bled dry. At that time, only violent oppression will remain.

  9. Zzz…it’s another sleeper from Common Dreams. How do you keep people sedated enough to not notice another assault of class war – persisting across different regimes of partisan political theater – upon what little public wealth or welfare remains in the commons rather than being privatized by the free marketeers who are out to own it all, and us with it?

    Put it on stage with the old representative government routines. Like congressional clones of big bizzness being ‘asleep at the switch’ when it comes to representing us rather than the corporate lobbyists and nonprofits, from K Street to the revolving doors between public office and private capital, which truly make the beltway bubble the nation’s capitol of corruption and criminality.

    The only ones asleep at the switch are us. Or rather those of us who have been sleeping through a slow-motion fascist coup for a long, long time, thanks to political pretenses of corporate state rule like representative government throwing ever-thinning veils over ever-dwindling remains of what little benefits popular struggle have won.

    Will enough of us wake from the American Dream to pay attention to the final closing of the cage that’s now underway with the accelerated coup of covid-1984? The same fascist corporate state which has steadily been dispossessing the public of health now rolling out with warped speed a ‘vaccine’ campaign for ‘public health’? If you buy that, the bands of robbers who manage the bizzness of the body politic have a plan for you.

  10. medicare is entangled with AMA, insurance, big Pharma and the hospital industry. per unit of service no nation pays half that compared to USA, yet health outcomes are inferior to all…US is the only industrialized nation where life expectancy rapidly declining. there is little incentive to provide comprehensive care—assembly line medicine is here to stay

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