UnitedHealthcare Cyberattack Underscores need for Increased Government Oversight, Medicare Advantage Reform

By Brian Murphy

I’ve been thinking about the disastrous cyberattack, which is costing providers a reported $100M per day. And what it means for the future of healthcare, including Medicare Advantage (MA).

UnitedHealthcare deserves no blame for the attack itself. We can blame its lack of preparedness. We should criticize its inadequate response. But they can’t be blamed for the existence of BlackCat and other very bad actors.

That’s a matter of national security.

Healthcare needs a hand at the tiller. It needs government oversight. The question is how much.

Today we are seeing the ill effects of too much power in the hands of too few, private entities. The hack is just one example. The shortcomings of MA—privately administered health plans with loose CMS oversight—is another.

Basic healthcare is a right. Healthcare services are not the equivalent of a product you can buy on Amazon (unless Amazon takes the whole thing over). We can’t shop for care the way we would a television set or an automobile. We often don’t have a choice at all, certainly not for emergency services.

But healthcare has gotten so large that we need the private sector to make it work.

Traditional, fee-for-service Medicare has been decried for decades for producing inefficient, wasteful, and fragmented care, leading it to the brink of insolvency. CMS needed the help of a network of contractors who could better coordinate healthcare and process healthcare claims more efficiently.

So we got MA. Which began with two stated goals:

  1. Expand Medicare beneficiaries’ choices to include private plans with coordinated care and more comprehensive benefits than traditional Medicare.
  1. Take advantage of efficiencies in managed care and save Medicare money.

MA has failed goal two, in part because the underlying motive for the largest plans is profit maximization and shareholder return. This leads to stifling prior authorization rules and upcoding to make patients appear sicker to increase payments. Healthcare has only gotten more expensive, and insurers are reaping sky-high profits.

Goal one? A mixed bag. Choice and benefits are better under MA, but care remains fragmented.

But in MAs defense if it’s going to provide better benefits than traditional Medicare, that requires more funding.

Those two initial two goals might be incompatible. Better, more coordinated care—at less cost? Not easy.

MA was launched with the best intentions but it’s teetering off course. It needs reform.

If the program is going to continue, CMS needs to step up. Reduce the upcoding incentives. Tie more tangible rewards to patient health and put more teeth into poor outcomes. And now, improve cyberattack crisis management.

Of course, the end result will never be perfect. Welcome to life. But it could and must be better.

References

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