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Paying the price of political ransomware | #ransomware | #cybercrime


Perspective is too often lacking when it comes to our healthcare system.  Policymakers will, for example, generalize from every alleged transgression by a nursing home provider and paint the entire sector with the same brush, while paying scant attention to outrages committed by more moneyed actors.

As an exhibit, I offer you UnitedHealth Group.

It should have been bad enough that UnitedHealth has been accused of using an algorithm — allegedly with a 90% error rate — to deny care to those enrolled in its Medicare Advantage plan.   Keep in mind this is a massive company, with a market cap, as I write this, of $449 billion.

Put another way, UnitedHealth reported an operating margin of 6.2% in 2022, while  according to a Medicare Payment Advisory Commission presentation the all-payer margin for freestanding nursing homes that year was negative 1.4%.

But it gets worse. On Feb. 21 a UnitedHealth subsidiary, Change Healthcare, acknowledged it had been hacked, creating a crisis that has turned into the Pearl Harbor of healthcare cyberattacks. 

We hear a lot of criticism of nursing homes for related-party transactions, despite them being common across all business sectors. So in examining what’s happened with Change, let’s first note how many related parties are under the UnitedHealth umbrella: 2,642 companies as of March 10 reporting. That’s right: more than 2,600.

I must give the precise date because that reporting notes the company may use the disruption caused by the Change hack to acquire more medical practices, made desperate by the cash crunch the hack created. Perverse, isn’t it?

While the insurer announced a “Temporary Funding Assistance Program” for reeling providers, it was described as “shockingly onerous” by Richard J. Pollack, the president and CEO of the American Hospital Association. Yet this is hardly surprising given the leverage UnitedHealth has. 

The federal government tried to block the UnitedHealth acquisition of Change, noting competing insurers’ data is routed through Change. However, a federal judge ruled antitrust law was not violated, rhapsodizing about how UnitedHealth would have “strong legal, reputational, and financial incentives” to protect data. Few judicial predictions have aged so badly. And, mysteriously, the federal government dropped its appeal of the judge’s decision.

Or maybe not so mysteriously. I posit that the most painful “ransomware” is the daily squeeze from health insurers. Simply buying down Affordable Care Act premiums in the individual market until after the presidential election cost $33 billion. Medicare Advantage plans have been described by Cornell University Professor Rosemary Batt as akin to “an octopus with a tentacle in every aspect of the healthcare system,” but their political investment pays off. 

UnitedHealth alone made political contributions of nearly $3.9 million in 2020. And to keep the Medicare Advantage gravy train rolling, America’s Health Insurance Plans spent a staggering $13 million lobbying last year, with an “astroturf” (fake grassroots) group, the benevolent-sounding Better Medicare Alliance, spending $1.55 million

The Change disaster had decimated provider finances, and jeopardized patient care, for three weeks before the White House finally summoned the head of UnitedHealth for a meeting. Can you imagine such lethargy with any systemic nursing home sector problem? I recall in 2019 the Senate Finance Committee convening for a special hearing on occurrences at two nursing homes out of the roughly 15,000 nationwide.

For a company that paid a former CEO $142.2 million in 2021, the $22 million ransom UnitedHealth reportedly paid in cryptocurrency to unlock Change is just another cost of doing business. Yet we may never fully know how much patient data is still out there.  Ransom payment is no guarantee that hackers will not keep the information they gained access to.

At day’s end, perhaps we are all hostage to the UnitedHealth Group. But at least we have the distraction of beating up on nursing homes. 

Brendan Wiliams is the president and CEO of the New Hampshire Health Care Association.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

Have a column idea? See our submission guidelines here.



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