I was deeply involved in hospice software, and specifically developing hospice revenue cycle solutions, about 15 years ago, and I can certainly confirm that the Medicare/Medicaid reimbursement formulas -- while in most areas arguably about as well-designed as you're going to get with such a program -- incentivize fraud because of the odd combination of up-front incentives and retrospective clawbacks. For well-run hospices, these aren't major issues (clawbacks aren't uncommon, but aren't financially controlling), but for hospice systems built to drain public cash out of dying patients, it's every bit as bad as the article says. (I did find that, using public Medicare hospice data, it was very easy to find providers that -- comparing my model to DOJ prosecutions -- were engaged in patient-stuffing and fraud by looking at their patient population data. Unsurprisingly, there was a significant correlation between questionable patient censuses and financial performance.)
Generally, hospice is a hard case -- I'd never put a loved one (and I didn't) through one of the major providers, while smaller hospices have their own issues even if they're well-run, because Medicare/Medicaid reimbursement isn't really sufficient at the small scale (many are non-profit for this reason). I'd like to see more money directed towards hospice while restricting hospice size (such as putting caps on total patient census) to try and reduce the incentives for fraud and gaming the system, but to be honest I don't think there's a good way to fix the problems inherent in the model.
(Also, the government should be a lot more aggressive, and licensing bodies more strict, on penalties against these companies. Yank the medical licenses from medical directors, slam some FTC decrees on named individuals, and put some execs in prison -- rather than, say, letting them go on to get elected to the Senate -- and the risks to medical fraud will start to outweigh the value for a lot of people.)
> (Also, the government should be a lot more aggressive, and licensing bodies more strict, on penalties against these companies. Yank the medical licenses from medical directors, slam some FTC decrees on named individuals, and put some execs in prison -- rather than, say, letting them go on to get elected to the Senate -- and the risks to medical fraud will start to outweigh the value for a lot of people.)
It's so incredibly depressing how the people at the "top" (the ones running the companies) always manage to skirt any consequences at all for their actions (and no, a fine that is a tiny % of the profit they made is not a consequence). I agree, we need to start sending CEO's and other C-level people to prison, pull their licenses, and not allow them to run companies in the future (or at least for a period of time) to disincentivize this disgusting behavior. And before I hear about how screwed up our prison system is: I know. We need major prison reform but keeping the rich/powerful out of prison does nothing to help that. In fact I'd argue it hurts it, the people who have means to fight against it never have to experience it themselves. Reform is needed but until then it'd sure be nice if we applied the law a little more evenly/equally. I'm not sure how some kid selling weed on a corner can end in prison but an exec that defrauds the government/public for millions/billions can walk away scot-free.
Interestingly, both HHS and IRS have law enforcement arms that are extremely effective and could be used more extensively in these cases, but they're overburdened dealing with things like opioid prescription crimes (which are worthy of prosecution, but could also be handled entirely within the DOJ). Folks I've known in those agencies are often frustrated by the fact that they're not spending their time going after complex white-collar frauds that they're specifically equipped to handle. Like you say, it's like Anatole France's old line about the "majestic equality of the law" forbidding rich and poor alike from sleeping under bridges.
Opioid crimes are weird. I’ve known several people who have self destructed on them.
I’ve also got horrific nerve pain that left me for years wishing for death.
Doctors constantly refused to give me anything other then occasional 30 day supplies.
Yet at same time they refused to discuss alternative treatments. Even when I would bring them articles and papers and support forums.
Finally I turned to sketchy website to get a fairly common drug LDN. That solved my pain problems which also makes it so that i can’t take opioids.
I still haven’t found an in person doctor that will prescribe it.
Pain management is weird, especially in the US, in that they'd rather let untold numbers of people suffer in pain just to attempt to prevent someone else from using the same substances without being in pain. Imagine if crime was handled this way. "Well, we understand that you might not be guilty, but what message would letting you go send to those who are guilty?"
> Folks I've known in those agencies are often frustrated by the fact that they're not spending their time going after complex white-collar frauds that they're specifically equipped to handle.
Well, that would expose people who don't want to be exposed, and who conveniently (for themselves) also control the funding of these agencies.
I'm intrigued about your research and would love to hear more. I'm a physician interested the effect of for-profit care on health care and outcomes.
As an example, we showed that for-profit dialysis facilities in the US have about a 7% higher mortality rate. We did a meta-analysis and every study barring one found higher mortality in for-profit dialysis facilities. Other studies suggest one reason is lower referral rates for kidney transplantation. Higher mortality has also been shown in for profit hospitals.
It was a long time ago, so I'm operating off questionable memory here, but IIRC the major tell was looking at patient longevity (questionable hospices had longer patient tenure, presumably because of more aggressive recruitment of non-EOL pts) and distribution of inpatient care days (which have the highest reimbursement rate, so questionable hospices tended to max out inpatient days). There was definitely a correlation between size of hospice and those variables, and hospices involved in DOJ/HHS prosecutions were correlated with longer pt tenure and high utilization of inpatient care.
Your work sounds interesting and enlightening -- I'm not familiar with dialysis facilities clinically or from a business PoV, but I'm curious if they suffer from some of the same incentives issues as hospices, given the significant Medicare/Medicaid spend in that area, and the number of ESRD policy carve-outs.
There is an eternal cycle in these things - large corrupt institutions get shit down by the government, new “better” ones start up, one or more horror stories happens, and new regulations are added to “prevent it” and very soon only the large corrupt organization are able to keep up with the paper work.
Was involved in medical billing software. Any individual bill is generally fine on its own. Actual fraud was taken seriously.
But the system is absolutely designed to milk the government for every dollar possible. Basically, how much can we bill for without it crossing the line into fraud.
Perhaps much worse. Is there is zero incentive to reduce cost for treating people.
Ironically, one of the more effective ways to reduce billing waste was when health systems (or their PE owners) decided to slash costs by laying off their coders (for everyone else who didn't live revenue cycle, a "coder" in this case is someone trained to translate medical procedures to billable CPT codes) and having nurses do billing. Suddenly there was zero incentive to optimize for reimbursement, since nurses are understandably nervous about getting sent up for inadvertent Medicare fraud.
Based on our experience, this is at the very least, not wrong.
My stepmother required, hospice, and and the worker was definitely helpful, but also very clinical, and somewhat hurried. There was not very much explanation or opportunity to ask questions. Fortunately, for us a relative, who was a nurse, from a separate side of our family, came for a few days, and was profound source of comfort for my stepmother and all of us.
I haven’t thought about this for a little while, but what I’m struck by is that this is a problem that may never “scale” successfully from either a government or entrepreneurial standpoint. What a family needs are a couple of humans that have been through this before to just sit with them and answer questions and reassure them that everything‘s OK. We’ll never be able to make that cost effective. In the best cases, this was a role historically filled by others in the community, though I imagine throughout a lot of history, it is just been a very difficult experience.
Controversial Opinion: Elder Care/Hospice + Childcare + A lot teaching is "infrastructure" and should probably be done on Debt spending.
It should be marginally cost optimized in that it should not give in to consultant + contractor + admin bloat driven cost diseases, but worrying about cost "effectiveness" here seems to be defeating the point, as you laid out in your example.
Given we seem to be all-in on "our economic system rewards you greatly for being highly mobile, and punishes you—potentially greatly—for sticking around somewhere with family roots" I'm inclined to agree. We should either modify our economy so that's not (at least, to such a high degree) the case, or treat elder care and child care as the costs—to society, not individuals—of doing business that way.
There's a sociology (yeah yeah I know the criticisms) podcast recently that pointed out this was actually a decision made through following economic frameworks of efficiency. Before this framework was in place, social good programs were actually run by social workers and similar people who had personal careers in the thing they were running. A lot of our golden age of government regulation and robust social programs and the like were when agencies were run by actual folks in that career, social programs run by social workers, environmental programs run by scientists...
An example they used was the EPA during the ozone crisis. The EPA tried to set something like "we should set maximum allowable ozone to a level where 95% of americans wouldn't be affected" vs the economists at the time arguing they should look at the marginal cost of saving american lives and go for the efficient tradeoff between lives and economic production of more ozone.
I’m inclined to agree with your point, but I think there is a downside that has to be acknowledged. For somebody very close a problem, that problem is always The Most Important Thing. Sometimes it takes someone further out to put it in the proper perspective.
Yes, there's something to be said that for economists, economics is always The Most Important Thing and that results in incentives like arguing for increased ozone destruction because it works out to be more efficient economically than not destroying the ozone layer, lol.
Ongoing costs should never be met with debt spending.
Just raise taxes to compensate - wealth tax, land value tax, capital gains tax, property tax, sin taxes, etc. - all of which help to push money into useful parts of the economy too.
"Scale" would mean to place ads for a low-paid, depressing job, and then hire people who last, on average, four months; use lots of software; get slick marketers; and raise venture capital to address this large, untapped market.
So no, I don't want a scalable solution to hospice care, thanks.
How many people genuinely care about their parents' wellbeing and how many are just happy to ship them to a facility, provided it mets a minimal standard of care? It's an earnest question - I wonder what the proportions are.
My wife and I have two sets of parents facing these issues and want to help take care of them. The main blocker is that neither one will move to our city, and we've tried repeatedly. The thing people often miss about caring for older people is that they have preferences too: preferences that often get stronger with age.
Anything that involves a government benefit that is out of scale with what people can pay out of their own pocket will become a nexus of corruption and distort the economy. That's practically an axiom of political economics, but politicians might wake up to it in 300 years or so.
I was just explaining to some friends recently that the only way to become a large non-entertainment tech company these days is to find a captive market (education, healthcare, power, logistics, emergency response, etc.), insert yourself as a cheap solution to a complicated and expensive problem, and then infect the entire sphere until your terrible software is load-bearing and senior managers can't be convinced to replace it. I'm not surprised that this practice also works well in non-software areas like hospice, elder care, transportation, etc.
Several large "Tech" companies basically are that already I think. Companies like EPIC or SAP or many other large enterprise companies, we might not normally think of as tech companies despite their main source of revenue is selling software and perform that very function. IBM is another though I do think we usually consider it a tech company.
Oh yeah, I was primarily thinking of Epic, as well as an emergency services platform I almost interviewed for. If your primary product is software I think you're a tech company.
Yes, having the private sector fraudulently gobbling up those dollars is pretty sickening. Only working solution is to have government run healthcare top to bottom.
The reason politicians don't wake up to it is because they have no easy alternatives. The fixes in this situation are much more complicated than the dunks.
How about any aspect of human behaviour that involves people with a difference in economic, health, or educational levels will lead to an exploitative marketplace?
(Edit: ^ that looks like a slippery slope to Marxism which isn't intentional so please be gentle with your feedback)
Yes, it does. The government is the only entity here that has effectively an unlimited wallet. Every time the government is involved in these markets (without taking them over completely), prices explode because the government purse completely crushes the demand curve. Education and healthcare are prime examples.
If you want a counterexample to the idea that healthcare prices are high solely because the demand for healthcare is inelastic, look at dental care. There isn't a lot of government funding for dental care, although it is very much necessary for your overall health. As a result, dental care is comparatively cheap - a full routine cleaning plus a check-up from your dentist (handled by private insurance) costs about the same as a single lab test (handled by medicare/medicaid and private insurance). Serious interventions, like wisdom tooth removal, crowns, or braces, cost only thousands of dollars. By contrast, routine surgeries are often in the tens of thousands.
Similarly, in education, private trade schools tend to cost $10,000/year or so, while private colleges are $50,000-70,000. The economic benefits of a private trade school are actually similar to the benefits of several majors.
Healthcare is explicitly an area where the government is provably more efficient, and I believe situations like those in the article are caused by the interface between the government and private corporations lacking appropriate oversight, investigatory powers, etc. That is to say, the issue here is not "government waste" but rather the private sector bilking the government, abetted at times by the government itself, of course.
But compare Medicare reimbursement rates and private insurer rates, compare outcomes and satisfaction with care between private insurers and Medicare/Medicaid, even within the US: the government is the clear winner despite spending much less. Once you compare across countries this becomes even more obvious.
In the US, if you accept Medicare patients, by law you must not charge anyone less than you charge Medicare. Private entities typically see Medicare patients as marginal demand: The bed/room is there, the nurses are already staffed, so might as well take Medicare dollars than nothing. So it’s not really much of a dunk to point out Medicare vs. private reimbursement rates.
Also note that Medicare pays 10 cents on the dollar for everything on the chargemaster. Hospitals are priced to make a tiny bit of money on that, so a lab test with $20 of reagents and $10 of lab tech time goes on the chargemaster for about $300. 1 hour of doctor time easily pushes you into the high thousands on the chargemaster.
For profit education was a clear sham, though. Such that it is a giant elephant in the room when claiming that private schools are better than public.
Dentistry is also similarly... not as strong as you'd hope. "Do something" behavior is strong in that field with relatively little evidence that the amount of interventions we do is necessary.
Dental cleaning and some oral surgeries (eg wisdom tooth removal) are both very clearly good for your overall health. I agree that a lot of dentistry is quackery, though. A lot of it is also pretty much cosmetic.
Also, we should add that private != for-profit. This applies to both trade schools and colleges - don't go to a for-profit school.
Wisdom teeth removal is actually one of the things they default to, that it is less clear they should default. Though, I don't know how to square your thoughts here. Prime example of how private enterprises control costs? Or a lot of quackery and cosmetic only? These seem at odds.
I'm not sure what the distinction between private and for-profit is. Can you elaborate?
Examples of necessary things. If the wisdom teeth are coming in straight, they can stay (although most dentists will remove them anyway), but they usually come in at an angle, and need to come out so that they don't cause problems. I agree with you that dentists overdo this one, but for many people it is actually necessary.
In the US, we have 3 kinds of schools:
* Public/state schools: The school is run by a state government. Some of these have good quality, but some are not good. All of them give a huge discount to students from the local state.
* Private for-profit: These usually all suck, and are scams. ITT tech, University of Phoenix, and others are in this boat. These make their money by providing an education for less money than they charge in tuition.
* Private non-profit: The school is organized and run as a non-profit institution, but is not connected to the government. Harvard, MIT, Stanford, and most other top colleges are private non-profits. Outside the US, I think Oxford and Cambridge are also like this. Private non-profit trade schools also exist, and they are usually the best ones. An example I can think of is the North Bennet Street School (again in Boston, MA). The high-end schools in this category tend to get more of their money from donations and endowments than from tuition.
Most British universities don't map cleanly onto these categories. In theory most of them (including Oxford and Cambridge) are independent educational charities. But endowments are (by US standards) small, and they're so dependent on public funding that they tend to do governments' bidding. A little less so Oxford and Cambridge, which are richer and prouder, but it's mostly a difference in degree than in kind. There's also quite a bit of direct government regulation (e.g. by the Office for Students).
There are also a few actual private universities, some non-profit (e.g. Buckingham, a free-market experiment which has survived but not thrived) and some for-profit (e.g. BPP University). But all of our major institutions are semi-public. Ish.
Apologies if it sounded like I was saying they should never take out wisdom teeth. I was just alluding to what you ack, it is the default position that near any dentist practice will hold. I will fully cede that I don't see too much danger in this position. Hard to not feel it is a wasteful, though.
Ok, I thought you had something other than non-profit in mind there. My personal experience with private non-profit schools is less shining, to be honest. The vast majority of their success is typically from heavy selection on who they allow in.
Perhaps unique to my area but I don't know anyone who was "defaulted" to have their wisdom teeth out. I didn't until college because that's when I started having issues with multiple partial bony impactions. My fiance still has hers. Everyone I've talked to about it was told by their dentist "if it doesn't bother you we won't do anything, and once it does we will."
From what I've seen, folks that are long term with a dentist are likely to get decent advice to not do unnecessary work. New practices, especially chains, are heavily incentivized to do the work, though.
To be fair though, a shocking number of people don't see a dentist regularly for cleanings and go for years with problems that could be fixed with a $2000 dental surgery because they can't scrape together $2000.
Yes, healthcare demand is inelastic. Dental care is actually not inelastic. A huge percentage pass it up.
Where the absurdity of healthcare costs come from, in the US, from my experience as a provider there and in Australia, is the huge information assymetry (ie most people cannot doctor themselves - this is true everywhere) along with, in the US, the need to practice hugely defensive medicine and a drive to add in and bill for as many things as possible. The country is totally fucked (on a healthcare basis at least) because the construction of so many perverse incentives has driven the whole mode of behaviour out of whack
I'm an Australian with family in eastern-Europe. I get my dental work done there at a fraction of the cost of doing it here in Sydney. The quality is at least on par with Australia.
I was unable to travel for a few years on account of work, and then COVID, and was seeing the local dentist recommended by my health insurer. They advised me that I needed my wisdom teeth removed. I was skeptical: My wisdom teeth came through in my teens with zero pain. I'm an adult with no tooth pain. When I asked why, the dentist was very vague, and told me it was for the best on account of the long-term likelihood of decay. I wasn't convinced. When I recently saw my extended family's local dentist, they showed me that my local Australian dentist had just left decay to flourish in my wisdom teeth, and not even let me know there were cavities there that were fixable. A quick filling would have saved me lots of hassle. Instead it seems they wanted to encourage me to take a much more costly course of action. In case anyone is wondering, this was an expensive clinic in Sydney's CBD. I'll never return!
The exact same dental work in Canada is a third of the price. But my dentist there operated out of his suburban basement, while my dentist here operates out of a swanky Main Street office that I get to pay for.
Both countries use the same, non-socialized, out-of-pocket-or-private-insurance model of dental care.
Try watching the evening news on broadcast TV sometimes. You occasionally see an ad for something buy out of their own pocket (particularly DTC startups) but it is almost all benefits you can get from medicare, prescription drugs, lawsuits you can join because your CPAP is trying to kill you, and personal injury lawyers that specialize in car crash victims. (I guess somebody has to advertise cars because if people didn't buy cars you couldn't get hit by a car and call William Matar but you don't see car ads until 8pm when prime time starts)
What's scary is that these people vote... And they want to get the government out of their medicare.
Based on personal observations before my parents passed, there is a lot of "for profit hustle" in every aspect of elder care. So many people are trying to get their hands into the pockets of sick old people to siphon off their wealth and/or government benefits before they die. Everything from estate planners, to long term care insurance, to assisted living apartment communities, to nursing homes, to hospice -- so many hustlers looking to make a buck.
Even worse, in the US, more than half the states have filial responsibility laws, requiring us to pay for over-priced elder care. Even if the elderly parents is still alive (and simply moved to Greece).
"He better not make it tomorrow. Or I will blame u" to encourage a nurse to overdose a patient to hit 6mo life expectancy quotas (from the article). This is disgusting.
Is there any fundamental reason the industry is so sketchy? Or just that it's a bit obscure (for young people who might start a business) and highly regulated, so little competition?
Seems like "ripe for disruption" might actually be a good thing here.
This kind of business really should be operated at a reasonable margin (20%?) by ethical, professional, competent operators. Not sure how to get that outcome quickly, but hope it can be solved before my family gets there.
'Distruption' usually skirts and outright ignores laws. A lot of this requires RN to do the work and Doctors to oversee everything, So it'll cost a lot period. You'll not find anyone to risk their medical license for you. There is a shit ton of paper work and if things aren't documented correctly, everyone can get in trouble. A lot of the issue is the consolidation of the industry, which is usually the issue.
I think the emotions and incentives involved make for such a breeding ground. The article seems to focus on the latter. And I think, at its core, this is the problem. The incentives are too strong and regulation too lax ( and people being people, optimize for those ). I want to offer a similar example from a seemingly regulated field and yet badly incentivized[1], where ambulance workers and doctors were involved in a scheme that involved getting money for funneling bodies to friendly funeral houses.
I think you are right about the margin size. It attracts the type of person who will optimize for it at any cost.
This was very sad to read. My grandmother was on hospice and her worker was an absolute saint -- she went to bat for my grandmother several times against her nursing home and social worker that were tired of dealing with her decaying mental state. I still send her a Christmas card every year.
I worked for AseraCare for five years and another hospice for three. Although it was a large company, most of the branches were small and (I assume) unprofitable. Hospice is a very tough business until economies of scale take hold above 100 or 200 concurrent patients.
I never saw any fraud and have tremendous respect for the clinicians. It was a bad work environment though because of unrealistic expectations put on the executive directors to grow grow grow. In five years I worked for five executive directors locally, and five CEOs at the national level.
Relevant from last week: a (horrific) Ars Technica story about a person that got a foot amputated without their consent (and then died)[0]. The amputation is one of the milder parts of the story, the conditions and neglect that lead to it are just unbelievable.
There was a huge scandal in France not so long ago, a private hospice group abused their residents, barely taking care of them while asking thousands per months for room
They even got 50m of public funds, which they misused to pay contractors.
Looks like the invisible hand doesn't like old people so much
Somewhat related, whatever happened to Honor? I remember them making a big splash about reinventing senior services some years ago but feel like I don't hear much about them anymore -- their website (joinhonor.com) is live so I guess it's a going concern but I do wish there was more action in the industry supporting the elderly.
Unfortunately, I cannot read the article in full because of the paywall, but before I entered into the tech-sphere, I had a brief stint in vulnerable persons hospice.
It was a nightmare fueled by the $15/hour wage in 2011 wages. While the price was right for my needs, ethically I could not sleep at night.
My first night involved:
- Persons unable to cleanse themselves after normal bodily functions
- Several dead persons
- Said dead persons and many others who took the time to edit their living will to reflect me because for the few nights I kept this job, I treated them like human beings needing help
I walked away from this job after a week and lawsuits followed from the bereaved and the business itself because I was named in the living will. From my perspective, these were persons who had no business signing a contract and by any medical definition were not fit to determine a reward in their living will. I am not here to pretend I understand the nuances of law and why such an action was allowed, but after quitting and outright telling my boss I was not up to the mental stress of seeing people die on a nightly basis and waiting for (US) medical services to arrive and literally kick a body around, I ended up with very little faith in the hospice system.
My coworkers openly bragged about the "opportunities" they found for themselves with persons who couldn't even figure out the current date without someone holding their hand and writing the date for them. This was abhorrent to me in ways I don't know how to put into words, but I have images of the nearby dog kennel and such persons taking advantage of the patients.
US hospice is absolutely an under-studied and over-abused factor in US life. To make matters worse, as I understood it from discussions with colleagues, far too many people see the abuses as a necessity or "fair trade" with the alternative being that persons who need hospice rotting in the street.
The irony kills me at a core point that so many people in the training accepted this as a sensible truth instead of being upset that those in need have the choice of total abuse or rotting in the gutter.
I will write that I am sickened by this environment, but sickened doesn't come close to describing the filth and awfulness I felt in such an environment.
Several of my acquaintances and relatives benefited from hospice. There was less red tape in obtaining financial approval than curative medical care. Less wrangling with insurance company gatekeepers.
Also, I will give a shiny nickle to whoever can tell me a good yardstick for assessing the "trampling of curiosity", as deprecated in our guidelines. (Beware poetic terms of service.)
Generalizing, rules about P only exist when there is consensus about what is or is not P. So if you're unfortunate enough to be living through an era where literally everything is politicized, you can expect the definition of politics itself to be one of the key prizes in the debate.
Plato nailed it when he had Socrates say that 'not to philosophize is to philosophize.' The same is true of politics, as we've all discovered, to universal chagrin.
okay, but this article is specifically about medicare fraud. this could just as easily be the setup for a hot take on how public benefits don't work, but I realize the problem is a little more nuanced than that.
When you have a system like Medicare - that a few terrible people can abuse to extract hundreds of millions of dollars - it's going to happen, whether you have non-profits or for-profits, whether it's government corruption or private corruption.
The problem is setting up a system that doesn't take fraud & corruption into consideration and have a real way of dealing with them - not Capitalism
I figure its just to fill the bandwidth on the given issue with noise to prevent a wider anticapitalist agenda from becoming popular or even having these ideas become accessible. Now when you search for "why this thing that is supposed to be good, ruined by profit seeking?" you will probably not find an article condemning capitalism as a system among the top search results, and instead find all of these other articles that distract and deflect from the root issue.
Generally, hospice is a hard case -- I'd never put a loved one (and I didn't) through one of the major providers, while smaller hospices have their own issues even if they're well-run, because Medicare/Medicaid reimbursement isn't really sufficient at the small scale (many are non-profit for this reason). I'd like to see more money directed towards hospice while restricting hospice size (such as putting caps on total patient census) to try and reduce the incentives for fraud and gaming the system, but to be honest I don't think there's a good way to fix the problems inherent in the model.
(Also, the government should be a lot more aggressive, and licensing bodies more strict, on penalties against these companies. Yank the medical licenses from medical directors, slam some FTC decrees on named individuals, and put some execs in prison -- rather than, say, letting them go on to get elected to the Senate -- and the risks to medical fraud will start to outweigh the value for a lot of people.)