Oregon has become part of an accelerating national trend in which huge insurance conglomerates, retail chains and private equity investors are buying up physician practices and other parts of Oregon’s health care infrastructure. These trends represent an alarming acceleration of health care “corporatization”— the transfer of power away from patients and their doctors to Wall Street and other financial investors [See: The Hostile Takeover of Oregon’s Health Care System.]
To illustrate the problem, let me use UnitedHealthcare, the largest for-profit health care company in the U.S. by revenue, and its subsidiary, Optum. Over past three years, Optum bought both GreenField Health in Portland and the Oregon Medical Group in Eugene, acquiring some 120 providers
Three months ago, Optum set its sights on the Corvallis Clinic, the largest independently owned physician practice in the mid-Willamette Valley. The purchase is opposed by the Corvallis community, and concerns were raised by then-Speaker of the Oregon House Dan Rayfield, who lives in Corvallis. Until last week, the proposed acquisition was being reviewed by the Health Care Market Oversight process, within, the Oregon Health Authority (OHA).
In 2022, two years after Optum bought the Oregon Medical Group, its parent company UnitedHealthcare, also bought a company called Change Healthcare, after prevailing in a lawsuit brought by the Department of Justice to block the acquisition over anti-competitive concerns. Change Healthcare, provides revenue and payment cycle management, for providers, payers and patients across the country,
Last month, a cyberattack on Change Healthcare, left providers across the country—including the Corvallis Clinic—unable to bill payers (like UnitedHealthcare) for their services, creating a sudden and serious cash flow problem.
The embedded conflict of interest in this situation, is that every dollar that a physician practice is unable to collect, stays in the pocket of the payer. In short, UnitedHealthcare, is sitting on millions of dollars of revenue owed to providers, because of the cyberattack on its own subsidiary. And because the Corvallis Clinic uses Change Healthcare to process its claims, it has no way to collect the revenue, and was reportedly pushed to the brink of insolvency.
Instead of assuming any responsibility or accountability for its significant contribution to this fiscal crisis, it appears—if reporting it correct—that UnitedHealthcare pushed its advantage over the cash-strapped Corvallis Clinic, by demanding—and receiving from the Oregon Health Authority —an emergency exemption. This emergency exemption was granted by the OHA on Wednesday, March 13th. There was no public comment period on the exemption, and the agency has kept all the details of the negotiation with Corvallis Clinic confidential, both before the approval of the acquisition, and now.
This “emergency” subversion of our state’s oversight procedure undermines the public scrutiny that a purchase of this scale merits, as well as our commitment to ensure that state agencies operate transparently. We clearly need some answers about the opaque process that was used to approve this acquisition. Why wasn’t the deal accepted with conditions when initially offered? Did OHA want the emergency exemption or did UnitedHealthcare? If Change Healthcare precipitated the approval, why didn’t the state feel as if it could impose conditions? With such robust engagement from the community, and nearly all of it opposing the transaction, we deserve to know what happened here.
But it gets worse. In what appears to be more than coincidental, no sooner had the ink dried on the purchase of the Corvallis Clinic, Optum sent out a letter to 10,000 patients of the Oregon Medical Group in Eugene, notifying them that there is no longer capacity for them at the clinic and that they will need to find a new doctor. Two of the clinic’s five locations are apparently going to be closing, scheduling has been centralized to Minnesota (where both Optum and UnitedHealthcare are headquartered), and some patients are reportedly being told that they can stay if they switch their insurance to UnitedHealthcare.
Apparently, some physicians are also being required to attend “risk coding” training, instead of seeing patients. Fraudulent “upcoding” of risk in Medicare Advantage is the cause of tens of billions of dollars in overpayment in the program, and has led to numerous lawsuits by the U.S. Department of Justice. Not surprisingly, physicians are leaving the Oregon Medical Clinic in droves, and it is hard to replace them because few physicians are willing to tell a prospective doctor that it is a good place to work.
This is the same corporation that just purchased the Corvallis Clinic under an emergency exemption, granted by the Oregon Health Authority with no public input and zero transparency. The policy questions here are unambiguous.
- Do we, as Oregonians believe that out-of-state publicly traded corporations are better suited to control the practice of medicine in Oregon, then our own local physicians?
- Do we believe that health care resources should flow from our communities and into the coffers huge publicly traded corporations?
- And, most importantly, do we believe that the health of Oregonians is no more than an economic commodity to be bought and sold on the stock market?
I believe that all Oregonians—including our elected state and federal officials— should be deeply concerned about where this is headed, and its implications for the cost, quality and timely access to health care for the people of our state.
