Stewart Player is the co-author with Colin Leys CHPI of 'The Plot Against the NHS' 2011.
With attention during the COVID crisis focusing primarily on individual contracts in, for example, Test & Trace and PPE, and their attendant cronyism, developments aimed at accelerating overall system transformation have largely fallen under the radar. Most importantly this includes the rollout of Integrated Care Systems, which, according to NHS England, see NHS organisations working alongside local councils and others to take “collective responsibility for managing resources, deliver NHS care, and improve the health of the population they serve”. Devolved ownership will not only see local and regional communities achieve more organisational control, but also encourage stronger partnership working and a strategic emphasis on population health outcomes. This is the official version. But what are ICSs really about, and who stands to gain most from them?
Concerns regarding the ‘Americanisation’ of the NHS have been commonplace for over a decade but have grown significantly as Integrated Care Systems (ICSs) are being rolled out across England, and which, according to some critics, are regional-scale Health Maintenance Organisations (HMOs), the leading private insurance-based format in US healthcare. In April 2018, the Parliamentary Health and Social Care Committee concluded that such views, and those of increased privatisation, were unduly alarmist and misleading, and that ICSs “would be more likely to lead to less competition and a diminution of the internal market and private sector involvement”. According to the Committee, some of this confusion was due to poor communication of the overall ICS process, and the language of integrated care, “neither of which have been adequately or meaningfully co-designed or consulted on with the public or their local representatives”.
The US market
It would appear that even for the Committee, Americanisation is something to be approached with caution, at least publicly. But what is it about US healthcare that should be so worrying, save from some vague notions regarding charges and lack of insurance coverage, and just how real are the threats to the English public? More concrete evidence is clearly called for and a great deal of clarity is offered by a series of 8 reports from the Dallas Morning News, both in terms of what this healthcare looks like on the ground, and who benefits.
Beginning in June 2018 and entitled ‘Pain and Profit’ (paywall – but a summary is available here), the reports, which subsequently won at least two national awards for public service journalism, examine the so-called Medicaid Managed Care (MMC) market in Texas. A Government safety net for low-income adults, pregnant women, elderly adults and people with disabilities, and for medically frail children and children in foster care, the Medicaid programme grew considerably following the passage of the Affordable Care Act in 2010 which lowered the bar on eligibility. However, despite its liberal pretensions, the ACA, more often known as Obamacare, was really concerned with securing the continuity of the insurance sector in the face of public demand for a single payer system, and the administration of the expanded Medicaid programme was overwhelmingly turned over to giant insurers, who promised more effective, cost efficient care, through, for example, integrated forms of service delivery and wider use of IT.
The administrative structure - effectively that of Health Maintenance Organisations (HMOs) – saw the companies acting as middlemen, collecting government funds on a capitated basis and negotiating with providers for patient care, and, should the cost of that care be less than the amount collected, the companies could keep the difference. The incentive, therefore, was to pare such costs to a minimum.
As could be expected, the conservative state of Texas had embraced the shift to private management, which, by 2017 operated in all of its 254 counties and accounted for over 80% of the nearly $30bn annual Medicaid budget. This went to 5 major insurers, including Superior, Aetna and United Healthcare, who would organise care for some of the state’s most complex and vulnerable populations.
The Dallas Morning News articles, however, proved something of a shock, and within days of publication of the first two, the State’s Health Commission convened an emergency meeting – it normally meets once a year – to deliberate on the findings. These identified a revolving door of legislators and company personnel acting in concert to award contracts, rewrite medical assessment rules, frustrate appeals, reduce fines, and cover up often dangerously low levels of care. Of perhaps even more concern for the authorities was the fact that the companies were reducing or denying care to those most in need of expensive medication, medical equipment, and hours of nursing provision. Cutting such services offered the greatest opportunity for profit, and indeed the articles found that it was the sickest patients, especially very fragile children, which brought in the most profit on a per patient basis to the companies, netting them more than $145 million in 2017.
Two stories were foregrounded in the initial articles. The first was of twin 1-year old foster children with severe disabilities and requiring round the clock care, particularly as one needed 2 to 7 tracheal suctions per hour. The insurance company now in charge said this level of care wasn’t medically necessary and changed the authorisation for 2 nurses on a 24-hour shift to one nurse for both babies for only 12 hours. During a break in care one child pulled out his trach and was left brain damaged. Rachelle Seaton, the director of the firm that supplied nurses for the twins, said, “The incident is a direct result of the failed policies and callous actions of a managed care organisation contracted to provide health care services to Texas Foster Children. I have never seen a more egregious disregard for the well-being of a child in need of special care”. As one San Antonio paediatrician said, “I believe that this particular managed care organisation is putting children’s lives in danger to make a profit”.
The second concerned a 38-year old quadriplegic who had been promised enough help to live at home. However, the insurer organising her care would not provide the hydraulic lift necessary for movement to the shower and the bathroom, so she remained in bed, nor would it provide the special mattress to protect her skin from bed sores. Then, the company reduced her care giver hours from 12 to 7 - despite internal records showing that the company did this whilst collecting a higher premium from the state for the patients’ care - so she was alone and in pain for 17 hours a day, and as the News said, she began to plan her suicide. Cutting such high cost services could, however, save the company as much as $500 a day on a single patient.
In both the above examples the company involved was Superior Health Plan, which, as well as being the largest of the Texas Medicaid companies, is a subsidiary of the Centene Corporation. Centred in Missouri, Centene’s growth over the last decade has been remarkable, and until recently was built almost entirely on expanded Medicaid and individual coverage under Obamacare. It now controls over 20% of the exchange market, and has the largest Medicaid membership in the country. In 2018 Centene reported that it was now 1st on Fortune’s 100 Fastest-Growing Companies list based on revenue growth over a 10-year period, and its CEO, Michael Neidorff, was the nation’s highest paid health executive with a salary above $26m.
In January 2020, Centene acquired all of the shares of one of its leading competitors, WellCare, in a transaction valued at $19.6bn. In its end-of-year report, Centene said that the “combination creates a premier healthcare enterprise focused on government-sponsored healthcare programs”, and, in a subsequent interview with Forbes magazine, Neidorff added that “we’re now a $100bn-plus enterprise” with “an insatiable appetite” for further mergers and acquisitions.
But how does this impact on the English NHS?
Rewind to 2014, and on the back of several years of double-digit growth, Centene sought, according to consultants PwC, to “internationalise its managed care model”. Its first move was purchasing a 50% stake in the Spanish company Ribera Salud in June 2014, and while profitable, its real target was the English NHS where managed care was, under the leadership of UnitedHealth’s former head of its Global Health Division, Simon Stevens, being pursued on a systemic basis. Undoubtedly playing a part in Centene’s choice was the fact that Ribera – through its ‘Alzira’ public-private partnership model – had been universally endorsed by the English policy community, hosting many educational visits from, for example, the Kings Fund and the NHS Confederation, and had featured in ministerial statements, cross-party manifestos, and would be specifically referenced in NHSE’s Forward View (FYFV).
Integrated Care Architecture
On the back of this purchase, in October 2015, Centene, alongside Ribera, met with over 20 leaders of England’s new care model vanguard sites - put in place as building blocks for the wider Accountable, later Integrated Care Systems - in an event co-organised by the NHS Confederation and NHSE’s New Care Model (NCM) Programme, led by its Director, Samantha Jones. It’s not known how many of these subsequently engaged Centene and Ribera but they certainly included the future ICSs within Nottinghamshire and Herts & West Essex, and the 2015 event likely included leaders from Northumbria, Cumbria, and West Yorkshire, though further research is required to find out their relationship with the companies.
While Herts was tight-lipped about the company’s role, the system leaders in Nottingham were proud to announce they were “standing on the shoulders of giants” in developing the area’s new healthcare economy, and Centene was also portrayed in internal Nottingham documents as the “best in class” managed care plan in the US, offering “optimal infrastructure and best practice care”. And, over a two-year period beginning in early 2016, Centene (Ribera was consigned to a mentoring role for a local NHS Trust hospital, giving some idea of the pecking order) effectively designed what would become one of England’s first ICSs, “building”, according to Nottingham’s system lead, Dr Stephen Shortt, “on experience of transforming care systems in the public sector and with disadvantaged communities in Medicare and Medicaid”. This involved an actuarial analysis - necessary for an insurance system - and 32 workstreams including those on patient pathways, population health management, social care integration, IT services, provider payment models, together with governance and contract design.
The company’s future role in the county is spelt out in a Nottingham City Clinical Commissioning Group (CCG) document from December 2016, whereby the ‘integrator’ - Centene - would be the middleman between the funding/commissioning bodies and the range of providers, and would act as an “impartial ICS manager, accountable for all services, data reporting, contracts, and other functions to manage the financial risk effectively”. It would also provide investment via capital and loan guarantees and risk-sharing would be involved. In other words, it would operate as a Medicaid Managed Care Organisation. (It’s worth noting that the above-mentioned document is the only one publicly available which gives the full range of ‘future system architecture’ – other presentations, for example from the Kings Fund, only gave the, undoubtedly less controversial, first two).
And, as in Medicaid, the company already stands to profit from cutting services. In a CCG meeting in December 2017, Toby Douglas, Centene’s then-Senior Vice President for Medicaid Solutions, said the ICS, “would agree from looking at projections what they would expect from savings in the system overall, and pay the integrator accordingly”. Given these should be in excess of £700m over 5 years, it could be a considerable sum.
Acting in an advisory capacity for the company at the above CCG meeting – and recommending a 25-30% cut in secondary care activity to bolster savings - was Samantha Jones, who, as seen, led NHSE’s New Care Model programme, the building blocks of ICSs until June 2017. The following year she became CEO of Centene’s UK division, since renamed Operose Health, and in an early interview said, “Centene has a presence in the majority of the states in North America, and we are looking to learn from what is being done in these other geographies and make it context-specific for us here”. Jones successor in the NHSE role, Louise Watson, has since become Operose’s Chief Operating Officer and has been joined by Nick Harding, who until recently was Senior Clinical Advisor to NHSE for ICSs.
Such influential figures will undoubtedly enable Centene to assume a leading position within the English healthcare economy. The company is already included in all key categories of NHSE’s Health System Support Framework, such as those of ‘demand management’ and ‘overall transformation’, and the contacts and overall familiarity these personnel have with ICS architecture will ensure the corporation’s success in obtaining extensive contracts. The NHS Confederation, which, as mentioned, co-organised the 2015 event, has also brought in Centene as co-sponsor of its national conferences and together they are now offering a package of support on population health management to help Primary Care Networks “redesign their care models, bringing in clinicians across the system, international best practice and primary care home leaders”.
And, lastly, in January 2020 Centene purchased a considerable stake – the exact amount is unknown but may be approaching 50% - in Circle Health, two months after Circle bought out BMI Healthcare, the largest private acute provider in England. Centene’s thinking may be to reproduce its approach in Spain, where its capital stake in Ribera came with a clause enabling it to take over the company after 5 years. The purchase does, however, reflect Centene’s confidence that private hospitals will have a big role to play within ICSs.
According to David McSwane and Andrew Chavez, the authors of the Dallas reports, the savings that the Medicaid companies made from cutting care were used towards paying executive salaries, shareholders, lobbyists, and for gifts and parties. In Centene’s case they also helped finance its overseas ambitions, and in England the company found a policy community fully willing to embrace and guide it. However, as the Dallas authors also pointed out, while Centene was the largest and most visible, the issues and behaviours in Texas were common to all the corporations, and embedding the profit motive at the heart of state administration inevitably led to the systemic exploitation of the most vulnerable sections of the population.
On December 4, Simon Stevens announced the formation of 11 more ICSs, bringing the number now to 29 - covering more than 35 million people in England, and more than 60% of the population. He added that the “joined up working” that these new formats emphasise will help tackle the COVID pandemic as well as many of the structural inequalities that the crisis has exposed, and as such it was important not only to accelerate ICS implementation but also to place them on a secure statutory footing. This is window-dressing. With regard to the ‘Americanisation’ of the NHS, Stevens’ appointment was primarily due to his long-term familiarity with the organisational structures of US healthcare, particularly their application within public systems. For several years Stevens led UnitedHealth’s Medicare Advantage programme, the over-65s equivalent of Medicaid Managed Care, and his subsequent appointment as President of the corporation’s Global Health Division was the logical follow-up. It is these structures that are being rolled out across England, and it is the values and priorities of companies like Centene which will govern them.