Death and Despair
Medicare
Once upon a time, part of my job involved creating advertisements to encourage seniors to enroll in Medicare. For those of you unfamiliar with how Medicare works: every American can enroll in a government-subsidized health insurance system at 64.5 years old. The number of plan and coverage options are dizzying (by design) but suffice it to say, seniors are forced to navigate a complex and often opaque insurance system, run by private, mostly for-profit companies.
Loosely speaking, the government sets pricing and reimbursement amounts for Medicare, and private insurance companies issue policies that abide by those criteria. The government tells insurers how much they can bill for certain care and procedures, and which things must be covered under each plan. Private companies are paid by government to administer these plans. It’s about as close to socialized medicine as we ever got in this country, and it’s not very popular with the general public - though a majority of Americans support making changes to improve the program.
So, for a few years it was my job to make advertisements to enroll newly-minted seniors in Medicare, or encourage them to re-enroll during the Open Enrollment Period (OEP) running each year from October to December. I placed ads on Facebook and Google and people filled out forms or called one of our call centers to speak to someone about a Medicare plan. Undoubtedly, many of them thought they were talking to an insurance company, or the government, but they were not. They were instead beginning at what the industry calls the ‘top of the funnel’ and being passed through a series of marketing companies, brokers, and eventually to a licensed agent who might be licensed to write policies for one or more Medicare insurers. Everyone along the way is paid some form of commission, because of course they are.
Ostensibly, there were rules about what I could and could not say in my advertisements, but practically speaking there were not. Because I worked for an independent marketing company aka a ‘lead generator’ I was a few hops away from any form of regulatory scrutiny. Sure, there was a daisy chain of indemnity clauses in various contracts that would allow the upstream buyer of said leads - the insurance company or broker - to come after my employer for damages if I made ads full of wild lies about Medicare (I did not) but in practice this almost never happened. I made the ads, people filled out forms, my company was paid a commission based on performance, I was paid a salary, etc.
This has been the status quo for a couple of decades, but things may be about to change for the better:
Federal health officials are proposing an extensive set of tougher rules governing private Medicare Advantage health plans, in response to wide-scale complaints that too many patients’ medical claims have been wrongly denied and that marketing of the plans is deceptive.
[…]
In November, Senate Democrats issued a scathing report detailing some of the worst practices, including ads that appeared to represent federal agencies and ubiquitous television commercials featuring celebrities.
This is a decent start, though it should be expanded to include social media and search ads as well as television - it makes sense a Congress full of rich Boomers would move to regulate TV first.
Another thing we did at my old job was aggressively remarket to existing leads - people who had given us permission to contact them during the prior enrollment year. These people are a Medicare marketer’s most valuable assets - if they can be convinced to reenroll each year it’s nearly pure profit. Said convincing typically involved retargeting of ads (we had their email) and a barrage of marketing phone calls (and their phone number!) and fortunately for these poor folks the new rules may allow them to opt out of this yearly misery:
The proposal would also allow beneficiaries to opt out of marketing calls for plans and would limit how many companies can contact a beneficiary after he or she fills out a form asking for information. The Senate report described patients who had received dozens of aggressive marketing calls they did not request.
They were probably lucky if they only got dozens, because the marketing company, broker, and insurer were all hammering their phones for the same reason - every year they transform back into an unwitting host for the industry’s jars of leeches.
If you have read this newsletter at all, you might recall that Medicare providers often do multibillion dollar frauds, which the piece drily points out:
And nearly every large insurance company in the program, including UnitedHealth Group, Elevance Health, Kaiser Permanente and Cigna, has been sued by the Justice Department for fraudulently overcharging the government.
Not great! This is because it is easier for insurers to overbill the government billions of dollars, eat the lawsuits and fines, and keep the gravy train rolling. The government, for its part, can’t simply drop the country’s largest insurers because they need them to administer Medicare plans. So the marketing is shady, the brokers and insurers milk the government for unnecessary treatments and illegally deny care to patients, and each year they put tens of millions of seniors and retirees through the same miserable gauntlet. Very cool system!
Hospice
Did you know that half of Americans die in hospice care? The concept dates back to the 1960s when an English doctor convinced people it was far more dignified to die comfortably at home than alone in a hospital bed. This seems very reasonable, and helps relieve the strain on our hospital and medical systems, allowing for less intensive, managed care at home or amd assisted living facility.
However, we live in America, and I think you know where this is going:
For-profit providers made up 30% of the field at the start of this century. Today, they represent more than 70%, and between 2011 and 2019, research shows, the number of hospices owned by private-equity firms tripled. The aggregate Medicare margins of for-profit providers are three times that of their nonprofit counterparts.
Hell yeah! Over the last twenty years, for-profit companies and private equity have sniffed out the margins in literal corpses and swooped in like the vultures they are:
Under the daily-payment structure, a small hospice that bills for just 20 patients at the basic rate can take in more than a million dollars a year. A large hospice billing for thousands of patients can take in hundreds of millions. Those federal payments are distributed in what is essentially an honor system.
Excellent. Medicare’s hospice reimbursement system has created a host of perverse incentives, many of which are loosely regulated if at all, and the few rules they do have are easily gamed.
Let’s start with daily payments - Medicare pays a hospice company a per diem for each hospice patient they have in their care. The intent of the system is for people with six months or less to live to receive necessary end of life care. But! Medicare bases reimbursement on an average across all patients within a system. As hospice companies grew, they could simply enroll new patients and bring those numbers down:
One day in 2008, facing the possibility of a repayment, AseraCare asked some of its executive directors to “get double digit admits” and to “have the kind of day that will go down in the record books.” A follow-up email, just an hour later, urged staff to “go around the barriers and make this happen now, your families need you.”
Grim. Another tactic hospice companies used to keep averages low was dumping patients they expected to live longer - often leaving vulnerable seniors and the critically ill without medical services to which they’d become accustomed or upon which they were now dependent.
Anyone can start up and run a hospice. No medical background is required - though doctors must sign off on a ‘terminal’ diagnosis to trigger the Medicare funding - and operations are subject to government review every three years, which rarely result in penalties or sanctions despite a government reporting showing the majority of hospices had serious deficiencies.
It is a thorny issue, understandably, because government regulators do not want to be seen as denying humane end-of-life care to the elderly and sick. However, by allowing profit-seeking corporations into the industry who think nothing of threatening their own employees to meet enrollment quotas or engaging in shady marketing and outright fraud, Medicare is allowing the worst, least scrupulous people to commodify the act of dying.
Politics
Health care, like everything else in this country, is synonymous with politics and policy. Over the last forty years or so, it has been the general policy of the American government to subsidize private profits in the name of health care, drug research, etc. For a time, this method and our status as a world power created some good outcomes - while our care inequality is awful, we are very good at treating serious diseases.
We talk a lot around here about government(s) working against the needs or best interests of citizens. This has been nakedly obvious during the COVID-19 pandemic (still happening!) when Republican-led states fought or refused to enact public health measures and more people died of the virus as a direct result. Prior to the pandemic, a failure to expand health services in GOP states may have cost tens of thousands of lives.
New data indicates that, in addition to melting our brains and ruining family dinners, politics is literally killing Americans:
The October report found that if all states implemented liberal policies on the environment, gun safety, criminal justice, health and welfare, labor, marijuana, and economic and tobacco taxes, more than 170,000 lives would have been saved in 2019. On the flip side, if states went with conservative versions of those policies, there would have been about 217,000 more deaths that year — “the equivalent of a 600-passenger airplane crashing every day of the year,” the study said.
Our life expectancy is falling, we’re paying more for access to worse health care, infrastructure, and public services, and in many states political leadership is enacting policies to make life unhappier, more dangerous, and potentially lethal. The fallout from the culture war impacts the poor and communities of color, and most recently half the country’s women.
Studies like this prove out a thing we instinctually know - cruel policies lead to worse outcomes, sickness and death, etc. One of our two political parties - though both are happy to take part in the cruelty - has made exacerbating this inequality their core principle, and their recent victory in the federal midterms ensures we’re in for two or more years of this. The body count has nowhere to go but up.
Wells Fargo
If corporations were actually people, and you believed in prison for repeat, unrepentant criminal offenders, Wells Fargo would be serving the world’s longest prison sentence. Practically since I began writing this newsletter I have been writing about Wells Fargo doing things like:
Creating millions of fake bank accounts
Opening millions of unwanted credit cards
Overcharging customers for fees and services
Paying executives hundreds of millions for incentivizing fraud
You know, normal bank stuff. Wells Fargo has, according to marketing materials, over 70 million customer across the United States. So when the CFPB announced a record $3.7 billion dollar fine against the bank for a litany of legal and civil violations, this number stuck out(emphasis mine):
Under the terms of the order, Wells Fargo will pay redress to the over 16 million affected consumer accounts, and pay a $1.7 billion fine, which will go to the CFPB's Civil Penalty Fund, where it will be used to provide relief to victims of consumer financial law violations.
If you have 70 million customers and do fraud to nearly a quarter of them, it does not seem like you should be allowed to bank the other fifty-some million, right? Wells says is all just a big misunderstanding or computers not talking to each other or some combination of bad luck and poor oversight, which is what you’d say if you just paid the GDP of a small island nation in fines.
Some highlights from the order:
$1.3 billion in harm over 11 million auto loans, charging fees and interest, and wrongfully repossessing vehicles
Denying thousands of mortgage loan modifications
Illegal overdraft fees (the bank has announced it is changing its policies)
Unlawful freezing of 1 million accounts
Any of these errors, frauds, whatever you want to call them can upend a person’s life - losing your car, being unable to access your bank account, or paying erroneous fees and interest can send a person or a family into a debt spiral that can be difficult or impossible to recover from. All this harm was done, allegedly, because Wells Fargo is simply too big to be an effective bank to its customers, and its billions can’t pay for computers that talk to one another or don’t accidentally freeze a million accounts because no one caught the error in the code.
On some level, a bank should be able to keep track of how much money you have, whether you are paying your loans, or what its fee and interest charges are. These are basic functions of being chartered (and regulated) as a bank. The fact that Wells Fargo not only cannot comply with basic banking regulations but has repeatedly flouted them while richly rewarding its executives and shareholders indicates it should probably no longer be allowed to bank seventy million customers. But, because this is America, they will pay their nearly four billion dollar fine and promise to do better (again). The Supreme Court and Republicans will probably eliminate the CFPB soon, so who knows if this punishment will even stick. Wells Fargo’s stock is down 18% this year but the markets still believe it’s a 150 billion dollar company so, lesson learned I guess?
Short Cons
NBC Bay Area - “A 19-year-old man designed fake parking tickets and put them on cars near the beach in Northern California last week in the hopes of collecting real payments, authorities said.”
CNBC - “Facebook parent Meta has agreed to pay $725 million to settle a class action lawsuit that claimed the social media giant gave third parties access to user data without their consent.”
NYT - “Federal prosecutors in Manhattan said he solicited money from victims, including a retired parishioner, through threats or false promises of enriching them, then kept it.”
Have a friend thinking of starting a fraudulent hospice business to bilk the government and grieving families out of millions? Send them this newsletter!