Health Insurance Companies: The Hidden Virus

Where should I even start?

Should I start with the stories of Dr. Salerno, Dr. Wassef, or the hundreds of other doctors that health insurance giants are dropping?

Or should I start by highlighting how these insurance giants are monopolizing healthcare?

Or maybe how these companies are growing in profit while medically underserved regions and low- income patients are suffering for it?

To be honest, it doesn’t matter how I start, the fact that health insurance companies are ruining healthcare is not going to change. But I do have to start somewhere, though.

Let me tell you a story. In 2017, UnitedHealthcare recognized the efforts of a doctor in New Jersey. His name is Alexander Salerno. They praised him for delivering healthcare services consistently and innovatively. Two years later, in 2019, the doctor received a bonus of $130,000 from the UHC, again recognizing his exceptional work to patients. This seems all good, right? But, trust me, things are about to get really ugly.

The UHC is currently seeking to drop hundreds of doctors from its Medicaid network in New Jersey. Amongst the hundreds of doctors that will be affected by this is Dr. Alex Salerno. Yes, the same doctor the UHC praised and gave a $130,000 bonus just last year. What could possibly have gone wrong? Well, there’s a plot twist.

In 2018, Riverside Medical made an offer to Dr. Salerno to buy his group practice. He turned down the offer. This doesn’t sound dodgy at all, right? You just wait for it. Things become a little interesting when you consider that Optum owns Riverside Medical. Optum is a sister company of UHC, both of which are subsidiaries of which healthcare insurance company? You guessed it, UnitedHealth Group!

Get this. The UHC recognized the efforts of a doctor in 2017, they paid him a bonus in 2019, and now they are seeking to drop him in 2020. This doesn’t make sense in first viewing, but when you add in the fact that Riverside Medical – a subsidiary of UnitedHealth Group – made a futile effort to buy off Dr. Salerno’s group in 2018, things start to make sense. If you still don’t get it, I’ll spell it out for you: they either buy you off, or they cut you off.

The story of Dr. Salerno is not an isolated incident. The UHC is planning to drop off many other doctors the same way. This way, the UHC will ‘force’ patients to transfer to doctors it controls. And this is where problems arise. In medically underserved regions in states like New Jersey, many of the patients have built trust between themselves and their doctors. This trust dates back decades in some cases.

Let us consider the case of Dr. Wassef, who the UHC is also seeking to drop. She is a pediatrician. But the focus this time around is not going to be on Dr. Wassef, it’s going to be on Rasha Salama. Rasha Salama is a low-income patient living in Bayonne that has been taking her two kids to Dr. Wassef for five years now. Salama and Dr. Wassef have built a rapport because of the convenience in delivering healthcare services to her children. But now that the UHC is seeking to drop Dr. Wassef, Salama has to sever those ties and look for other pediatricians, who can offer the same services and at the same convenience levels, which is an arduous, if not impossible, task given her financial situation. Many other patients like Salama will be affected by this decision.

You may think that insurance companies separate from doctors all the time, so why should this be an issue? It’s simple. This time around the cause of the separation is the power thirst of insurance companies, UHC in particular. They want to control both the payers and the providers, see it as operating from both sides of the pendulum. They are creating a monopoly, and that is bad. Very bad. You need to understand that these insurance companies are not in themselves bad in insuring health, far from it. UHC for one is of the best, if not the best out there. But it seems their focus is starting to shift to profit. You know what, ‘starting’ is probably not the right term. Let’s say, their focus seems to be intensifying solely on profits now. Over the last decade, their status has changed from ‘profit-oriented’ to ‘aggressive profit-mongering.’ That’s more like it.

Let’s sprinkle a little bit of economics into this. There is something known as vertical integration in business. Don’t get confused, I’ll explain. Vertical integration is said to occur when a business enlarges by buying another business that operates before or after them in the supply chain. Consider this illustration. In the car industry, a company that deals with the manufacturing of cars may decide to buy a company that produces tires, or one that deals with the assembling of final parts of the car. That way, they are eliminating competition and controlling the market.

The same is what insurance companies are trying to do, but what makes this far worse is that human lives are on the line. They just don’t seem to care. While they are lining their pockets, emergency rooms are lining their beds. And I’m not exaggerating it one bit. UHC has seen its stock price and profit rise tenfold over the last ten years. Their revenues this year alone is set to pass the $260 billion mark. $260 billion! But at what cost?

The creation of a monopoly will lead to them controlling the healthcare market, throwing the relationships that many doctors and patients have taken years to build down the drain. The implication of this is the start of a vicious cycle. Patients will stop going to doctors, adherence to medications will be significantly reduced, cases that require proactive care like cancer, diabetes, hypertension will increase, leading to severe medical conditions, and this will cause the state to spend more in reactive medicines, apart from the obvious fact that those patients may lose their lives. It’s a very slippery slope from the onset of monopoly.

If these insurance companies have their way, it would be utterly devastating, especially to low-income patients and people in medically underserved regions. Dr. Salerno and Dr. Wassef understand this. They are championing lawsuits against UHC in a bid to restore some normalcy and sanity to the healthcare industry. They cannot do it alone, though. We all need to join the fight, one way or the other. Failure to do so may be signing the death of many people, and again, I am not exaggerating this. Don’t call me pessimistic; I’m not. I am just proactive, as we all should be.

We are in the middle of one the worst health crisis in a century, the Coronavirus, which has claimed hundreds of thousands of lives. But there is another virus no one is talking about. It’s the fact that health insurance companies are monopolizing healthcare and removing physicians from truly providing quality care to patients. No one foresaw the Coronavirus, and thousands have died. This doesn’t have to be the case with health insurance companies. It doesn’t have to.

I hope we win this fight. I’m not banking on it, though.


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  8 comments for “Health Insurance Companies: The Hidden Virus

  1. Kurt
    July 30, 2020 at 8:18 pm

    I’m 63.7 years old and the hospital administrator offered to cover my health insurance until I hit Medicare age under Cobra. I grabbed it as I was sick and tired of the office, hospital and on call grind. May God condemn to Hades anyone who tells med students that primary care medicine is a good way to go with a career. It now sucks!
    Got prostate cancer in 2016, had robotic resection but psa didn’t go to zero so had a choline PET scan that showed “a little beet leaked out on the left side”. Got blasted with radiation and was Luproned for 2 years. Now the psa is staying effectively at zero.
    I’m absolutely so glad I was able to retire and get out of this circus. It’s a bad scene and I feel sorry for those that still have to put up with it.
    Health insurance Doctors? They’re whores period and I will say not anything more as Doug would have to censor me.

  2. Benjamin Van Raalte
    July 29, 2020 at 9:17 pm

    United Health Care was run by a former pulmonologist who quit medicine because it was too hard. He paid himself ONE BILLION DOLLARS. No that is not a Mike Myers movie but a true fact. At the same time he paid solo specialists less than Medicare. They would sign up the near retirement doctor, who was out of date, who did not do emergencies and was glad to get cases. Then the emergencies would go to the non participants and still be paid poorly because they would claim their payment was U and C.

    • Gary Pearce MD
      July 30, 2020 at 9:53 am

      What I perceive as making my job “too hard” is not the patients. It is the EHR, the hounding by insurance companies, the patient’s common expression that there must be something wrong with me and my office since they pay an arm and a leg for their insurance (this is the ingrained perception that they are not responsible for their own health care expenses since they do have insurance) and it is obviously my problem that I am not getting paid by the insurance company THEY contracted with, and finally how to profitably run a solo practice in the midst of constantly declining reimbursements and unreasonable patient expectations.
      Yes, I am a surgical specialist. I can make more money by just staying in my office, having patients come back for repeated office visits, and postponing many elective procedures. Medicare reimbursal next year for standard cataract surgery makes it basically a charity procedure. Nobody needs to shed a tear for me as i am 67 and lived through the years when there was a lot of fat in the system. But now the way the pendulum is swinging, there are only a few crumbs left on the floor for us…….and we are the gateway for most everyone! So I guess the gates will swing shut for all but the wealthy who can afford a concierge practice where a doctor is really paid to care for you by you. United has become an elephant.

  3. Stewart
    July 29, 2020 at 11:33 am

    One wonders if the ACP and the AAP are doing anything to support Drs. Salerno and Wassef, or are they too completely intimidated by UHC to act?

    I know that the AAFP has a 100% perfect record in failing to deal with the abuses of insurers.

    • Gary Pearce
      July 30, 2020 at 10:04 am

      Empathy for physicians?
      Any presidential candidates on our side?
      I hope they keep publicizing the doctors and nurses who have given up their lives working through this pandemic. And the doctors and med students with PTSD and SUICIDE.
      Heroes……..maybe we can have a statue put up to show respect…..that will be something we will have over the attorneys and wall street hedge fund managers and dot-commers.
      How about a little respect?
      Is Fauci getting any respect? I think he was banned from the White House.

  4. Gary Pearce
    July 29, 2020 at 10:57 am

    I really hate to tell you all what I have concluded in the horrible times in which we now live. I started my practice in the golden years of the 1980’s when fee schedules were UPDATED annually using a “usual, customary, and reasonable” model. That disappeared after the pioneering work of Uwe Reinhardt and Dr Hsiou- I know I cannot spell his name. Then the bean counters basically commoditized each CPT and the government set aside a pot of money that basically remained unchanged each year. So as more money was spent on medical care due to rising technology and increased utilization, we all basically got paid less, so we were on a treadmill where we each had to work harder to sustain our incomes. Then the first wave of managed care started in the 1990’s and practices started being bought and sold. Someone got smart and decided that all the risk needs to be shifted to the providers- why not, the patients first enter the health care system through our doors! Many of these contracts did not have adequate productivity incentives, so smart doctors sold their practices and then stayed on and provided little service- most anything but emergencies can be postponed, right? There were then several decades where we lived with constant fear that there would not be annual increases in our payments, at least COLA, right? So every expense in our office went up but our income went down. Instead of increasing reimbursals, we were dinged with (I am unsure of the exact amount) a 2% holdback applied to all federal contracts. Then Mr W Bush started allowing private insurance companies to write MA plans- and they were very smart, trying to give policies to only the healthiest of patients- and we were cheated because their fine print was different from the standard Medicare we were so used to. Then the very brilliant Mr Obama got his plan through Congress with the assistance of insurance companies by basically promising them they would have a lot more customers. So in addition to numerous insurance companies, all trying to develop their own networks, we now have a multitude of plans, and Joe Namath on TV telling our senior citizens that they are entitled to benefits they may not even know about (but what he does not say is that by calling that number you are basically signing up for a plan that is taking away your Medicare!)
    So my crystal ball says that in the future doctors and patients alike will all ask for a single payer (unless you are in a concierge practice).
    Our government is unable to control insurance companies- too much lobbying money. the same goes for Big Pharma. I think COVID may finally break the camel’s back. Nobody talks about how much this is projected to cost our country and the world. I see miniscule revenue savings from Social Security and Medicare no longer being paid to those who die, but I am being macabre.
    I pity our younger physicians…..I cannot predict how everything will change….will medical school be free, will all student loans be forgiven, will all doctors become government employees, will we all be paid the same (and how can we guarantee that proceduralists continue to do procedures…..I do hope we can then unionize and at least guarantee a 40 hour workweek with pension and benefits and a guaranteed lunch hour! And of course, being government employees, we will no longer need malpractice insurance……you can’t sue the government, can you?

    • Benjamin Van Raalte
      July 29, 2020 at 9:19 pm

      The Reinhart model was a 1 million dollar study at Harvard that essentially determined several trillion dollars in reimbursement. It should have been restudied and reassessed

      • Gary Pearce
        July 30, 2020 at 10:08 am

        That is not going to happen- you do realize that.
        But the patients will miss us when we are gone. I truly believe i have a little more to offer someone with an eye disease than an ER doctor, an optometrist, an NP.

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