In Battle Over Health Care Costs, Private Equity Plays Both Sides
There are many problems with health care spending. No one is immune from culpability in the skyrocketing costs of health care in the United States. And yet, no one may be more culpable than private equity firms.
The series of articles published recently in The New York Times highlights MultiPlan, a for-profit entity who purports to “help make healthcare transparent, fair and affordable for all.”
Their data-driven method to determine fair reimbursement, Data iSight, is described by Chris Hamby (NYT) here:
Data iSight starts by using Medicare’s methods for setting rates. But subsequent calculations are less transparent. MultiPlan says it applies multipliers that allow for a fair profit for hospitals and something approximating a fair market rate for physicians. The documents show that MultiPlan allows insurers to cap prices and set what they consider fair profit margins for medical facilities.
One huge problem here is that the wrong stakeholder gets the power to determine what is “fair.” Among the many stakeholders in medical care, the patient should be centered with decision-making power. If this article is accurate, it is the private equity owned MutiPlan - in concert with insurance companies - who holds the power to determine fair payment.
Health care in the U.S. would be much better if such important payment decisions were not made by organizations who exist with the primary purpose of earning a profit for their investors.
