I don’t like insurance companies. I make no bones about it. I enter this Ortho111, putting my bias out front for all to know and see.
Yes, they play a critical role in the healthcare ecosystem, but their overreach and care restrictions have been nothing short of pathetic in the last decade.
I’ve watched the Change Healthcare cyber-event of the last three weeks unfold closely, and frankly, I am ticked off but completely unsurprised by the laughable “response” from them and their owners, United Healthcare.
If this debacle has not shocked the system awake to our gross dependence on an oligopoly system that is both judge and juror, determining who gets paid what, when, and even if, then I am not sure what will.
There have been many great write-ups describing what led to the situation and the fallout. I don’t intend to recreate the wheel, especially when several of these have been done so well.
Return What You Stole & Be a Man with Dignity
Instead, I want to take a look at what this means for the future of healthcare for private practices.
Nearly everyone reading this weekly newsletter has been directly impacted by the gross negligence by Change Healthcare, and their owners, Optum and United Healthcare.
I reached out to several friends at practices ranging in size to see how they were doing, offer any help I could, and get their take on the situation. The stories ranged from hard-pressed and frustrated to tears and nearing panic.
I spoke with a good friend who owns five infusion clinics in the northeast. The drugs they use are very expensive, and the vast majority of their claims flow through the Change pipes. He said they have burned 70% of their cash, and many of their administrators are deferring pay until claims start to get paid again.
In a business that lives on the steady flow of cash, independent practices, their employees, and their patients are the ultimate victims.
The real risk of a cyber event
This crisis exposed that even large, well-resourced companies are vulnerable to crippling cyber-attacks, shattering the "it could never happen to us" mentality.
Cash continues to be king… and scale helps
When cashflow is disrupted, ample reserves are critical - driving more motivation for practices to consolidate and gain scale.
Diversify from traditional revenue streams
Reducing dependency on insurance companies by diversifying income is crucial for practices.
The Change Healthcare crisis once again showed us the healthcare industry's alarming dependence on insurance giants and data oligopolies.
While disruptive in the short term, it could provide the jolt needed to accelerate new models and revenue streams that restore balance and leverage for providers and patients. That's what I hope, at least.