Privatization by Another Name

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A quiet experiment is about to transform Medicare, and if we don’t pay attention, it will destroy America’s most trusted healthcare program.

Medicare has been the bedrock of our national healthcare safety net since 1965. Although politicians and health insurance companies like to hide this fact, Medicare has been more efficient than its private industry counterpart. Why? Unlike for-profit health insurance companies, Medicare operates with lower overhead. Because Medicare is non-profit, it focuses on providing services to people in need rather than profit-seeking stockholders. Even when you consider waste, fraud, and abuse of the Medicare system, its record remains far more cost-effective and transparent than private industry. It’s no wonder traditional Medicare has earned such broad public trust.

But politicians driven by the motivations of private industry are about to change the equation. Beginning next year, the Centers for Medicare and Medicaid Services will launch a six-year pilot program in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. The program is called the “Wasteful and Inappropriate Service Reduction Model.” On the surface, the goal sounds noble: reduce waste, fraud, and abuse. But it would profoundly change Medicare. Private contractors will be hired to use Artificial Intelligence (AI) to screen claims for a dozen targeted procedures, such as spinal surgeries, steroid injections, incontinence devices, certain nerve stimulators, and treatments for impotence. The catch is that these contractors will be rewarded for the money they save the government. Every claim they deny will bring in more profit for them. In healthcare, incentives matter. If you reward companies for denying care, denial will become the business model.

This is the very same system already used by Medicare Advantage, where prior authorization has long been used as a weapon to delay or deny care and secure more profit for private industries. The pilot program imports those same incentives directly into traditional Medicare. Although officials insist that real human doctors will make the final decision, it’s undeniable that patient health and corporate profit will be put in direct conflict. And while the program currently exempts emergency and inpatient care, its scope could easily expand once this model proves profitable for private industry. Metaphorically speaking, this program is a “foot in the door” that will eventually result in a corporate takeover of Medicare.

The situation couldn’t be more serious. Americans already live with the consequences of a healthcare system that is, by far, the most expensive in the world while delivering outcomes no better than those of other advanced nations. Patients routinely face denials and delays, often with horrible consequences. To impose the same broken model on Medicare risks not only the health of older Americans and people with disabilities but also the future of healthcare reform itself. Medicare has long been viewed as the foundation upon which universal healthcare might someday be built. Allowing private industry to sink its hooks into the program threatens to poison the well, eroding public trust in the very idea of universal healthcare.

If waste, fraud, and abuse are truly the problem, the solution is not to hand the keys of Medicare to private gatekeepers with a profit motive. The solution is to strengthen oversight, investigate and prosecute offenders, and make clear examples out of those who abuse the system. For example, instead of punishing one of the largest Medicare fraudsters in history, Rick Scott, we rewarded him with a Senate seat. That tells you everything about where our priorities have gone wrong.

What patients need is protection, not obstruction. Medicare has proven for decades that it can deliver care more efficiently and more fairly than private insurers. We should be reinforcing that success, not undermining it with a program that rewards denial over treatment. Medicare was built to care for people, not to enrich corporations. Let’s keep it that way.

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