\n\tDan Weissmann<\/span><\/p>\n

When Change Healthcare, a subsidiary of UnitedHealth Group, got hit by a cyberattack<\/a> this winter, a big chunk of the nation\u2019s doctors, pharmacists, hospitals, and therapists stopped getting paid. The hack also limited health providers\u2019 ability to share medical records and other information critical to patient care.<\/p>\n

The cyberattack revealed an often overlooked part of how health care is paid for in the United States and raised concerns for antitrust advocates about how large UnitedHealth has grown.<\/p>\n

Host Dan Weissmann speaks with reporters Brittany Trang<\/a> of Stat News and Maureen Tkacik<\/a> of The American Prospect about their reporting on the hack and what it says about antitrust enforcement of health care companies.<\/p>\n

\tDan Weissmann<\/p>\n

\t\t\t
\n\t\t\t\t@danweissmann\t\t\t<\/a><\/p>\n

\t\t\tHost and producer of “An Arm and a Leg.” Previously, Dan was a staff reporter for Marketplace and Chicago’s WBEZ. His work also appears on All Things Considered, Marketplace, the BBC, 99 Percent Invisible, and Reveal, from the Center for Investigative Reporting.\t\t<\/p>\n

\n\t\tCredits\t<\/h3>\n
\tEmily Pisacreta
\n\tProducer<\/p>\n
\tAdam Raymonda
\n\tAudio wizard<\/p>\n
\tEllen Weiss
\n\tEditor<\/p>\n
\t\t\t\t\tClick to open the Transcript\t\t\t\t<\/p>\n
\t\t\t\t\t\tTranscript: The Hack<\/strong>\t\t\t\t<\/p>\n
Note: \u201cAn Arm and a Leg\u201d uses speech-recognition software to generate transcripts, which may contain errors. Please use the transcript as a tool but check the corresponding audio before quoting the podcast.<\/em><\/p>\n
Dan:<\/strong> Hey there.\u00a0<\/p>\n
Brittany Trang is a reporter at STAT News\u2013 that\u2019s a health care news outlet. We talked with Brittany\u2019s colleague Bob Herman in our last episode. Like Bob, she\u2019s been covering the business of health care.\u00a0<\/p>\n
And for Brittany, this story starts with Bob flagging a story to their team. He\u2026\u00a0<\/p>\n
Brittany Trang: <\/strong>Dropped a link in the chat that said like, hey guys, I think we should write about this, question mark, and nobody replied,\u00a0<\/p>\n
Dan: <\/strong>The story was about a cyber-attack against a company called Change Healthcare.\u00a0<\/p>\n
Brittany Trang:<\/strong> I was like that sounds like a startup and I was like who cares about some sort of health tech startup\u00a0<\/p>\n
Dan: <\/strong>But Bob kept bringing it up.\u00a0<\/p>\n
Brittany Trang:<\/strong> And I finally clicked on the link, and I was like, oh no, this is a big deal. This touches most of the American healthcare system.\u00a0<\/p>\n
Dan:<\/strong> Yeah, and it\u2019s no joke. Change Healthcare is what\u2019s called a data clearinghouse. And it\u2019s a big one. It\u2019s an important part of health care\u2019s financial plumbing. Someone had gone in and basically hijacked their computer system and said, Unless we get $22 million dollars, we\u2019re not giving it back. So Change went offline, and a huge chunk of the country\u2019s Pharmacists, doctors, therapists, hospitals just stopped getting paid. And Change Healthcare stayed offline for weeks and weeks. As we record this, seven weeks in, big parts of it remain offline. And here\u2019s this other thing: Change Healthcare is not a startup. It\u2019s been around for like 20 years. And in late 2022, Change got purchased by another company\u2013 a company that\u2019s starting to become a real recurring character on this show: UnitedHealth Group.<\/p>\n
You may remember: They\u2019re the country\u2019s biggest insurance company AND they\u2019ve got their hands in just about every other part of health care, in a big way. For instance, they\u2019re the very biggest employer of physicians in the country, by a huge margin. They\u2019ve got their own bank, which\u2013 among other things\u2013 offers payday loans to doctors. And they have a huge collection of companies that do back-end services. In our last episode we heard about Navi Health\u2014 and how, under United\u2019s ownership, insurance companies have been using NaviHealth\u2019s algorithm to cut off care for people in nursing homes. [Boy, yeah\u2013 that was a fun story\u2026] And as we\u2019ve been learning: When one company like this gets so big, their problems\u2013 like this cyber-attack\u2013 become everybody\u2019s problem. And in this case, everybody\u2019s problem seems to create an opportunity for United. We\u2019ll break down how THAT could possibly work, but obviously it doesn\u2019t seem like the way a lot of us would WANT things to work.. And we\u2019ll end up talking about what we can maybe do about it. Not \u201cwe\u201d as in a bunch of individuals trying to tackle an opponent this big. Good luck with that. But \u201cwe\u201d as in the \u201cWe the people\u201d of the United States Constitution. We may already be on the case.\u00a0<\/p>\n
This is An Arm and a Leg\u2013 a show about why health care costs so freaking much, and what we can maybe do about it. I\u2019m Dan Weissmann. I\u2019m a reporter, and I like a challenge. So our job on this show is to take one of the most enraging, terrifying, depressing parts of American life, and bring you a show that\u2019s entertaining, empowering, and useful.\u00a0<\/p>\n
We\u2019ll start with an attempt to answer what you\u2019d think would be a simple question: What does Change Healthcare do?<\/p>\n
Here\u2019s Brittany Trang from STAT News again.\u00a0<\/p>\n
Brittany Trang:<\/strong> It\u2019s kind of like Visa or Mastercard or something. Like, when you go to the grocery store and you pay with a credit card, you are not putting your money directly into the pockets of the grocery store. There\u2019s a middleman in there and change is that middleman, but for a ton of different things.<\/p>\n
Dan: <\/strong>Like insurance claims. Brittany says hospitals and doctors offices often don\u2019t submit claims directly to insurance companies. They send the claim to a middleman like Change. And then Change figures out where that claim needs to go next. Like: I\u2019m sending a bunch of mail\u2013 I put it all in one mailbox, and the post office figures out how to get it where it goes. Except of course, there\u2019s no paper here, no envelopes, no physical packages: All those claims are basically data. Which is why a company like Change is called a data clearinghouse. And even if a given provider uses some other clearinghouse\u2013 and of course there are others\u2013 Change may still be involved. Because INSURANCE companies like Aetna also use Change as a place to COLLECT claims from providers. On that side, Change is kind of like a post-office box. But claims are just one of the types of data that Change handles. For instance\u2026\u00a0<\/p>\n
Brittany Trang: <\/strong>when you went to the pharmacy counter or when you would check in at the doctor\u2019s office and they take your insurance information and figure out like what you\u2019re going to pay for this visit. Both of those processes were messed up.\u00a0<\/p>\n
Dan: <\/strong>Yeah, and there\u2019s more! Prior authorizations\u2013 like when your doctor checks in advance to make sure your insurance company is OK with paying for whatever. Those all go through companies like Change. So, if change is offline, do they do your MRI, or your surgery\u2013 and just hope it doesn\u2019t get denied when Change comes back? And once claims get approved, data for payments goes through Change too. So payments\u2013 a lot of payments\u2013 just stopped going out. Here\u2019s Brittany Trang.\u00a0<\/p>\n
Brittany Trang: <\/strong>it\u2019s just kind of flabbergasting how big this is. This collapsed most of healthcare in some way or another.\u00a0<\/p>\n
Dan: <\/strong>Overall, the numbers are wild: Change reportedly processes 1.5 trillion dollars a year in claims. Maybe a third of everything that happens in healthcare. According to the American Hospital Association, 94 percent of hospitals said they were affected. Some more than others. Not all providers use Change as their primary clearinghouse. But lots do. And for them, everything just stopped.\u00a0<\/p>\n
Brittany Trang:<\/strong> I talked to one provider she\u2019s like, Oh, I can, I can talk. I\u2019m, here today and tomorrow before we close. And I was like, before we close for spring break. And she said, no, we have 3 and 13 cents left in our bank account. Brittany says that provider got a last minute reprieve\u2013 an emergency loan from United. There have been two or three rounds of these loans so far, plus some advance payments from Medicare. But as the outage has dragged on\u2013 it started in February, and we\u2019re recording this seven weeks later\u2013 it\u2019s hard to know if those are going to be enough. At the end of March, I talked with Emily Benson. She runs a therapy practice in a Minneapolis suburb. Eight clinicians, mostly treating kids. She says the practice does maybe 70 or 80 thousand dollars worth of business a month. But then in February\u2026 Emily Benson: essentially everything went dark for us.\u00a0<\/p>\n
Dan:<\/strong> United publicly acknowledged the Change hack on February 21st. But Emily Benson says she didn\u2019t actually get a heads-up until almost a week later.\u00a0<\/p>\n
Emily Benson: <\/strong>a lot of alarm bells went off, that was the end of the month. And so a lot of payments came due\u00a0<\/p>\n
Dan: <\/strong>Her rent. Paychecks for her colleagues, and herself.\u00a0<\/p>\n
Emily Benson:<\/strong> I mean, I was in a panic. Y\u2019know, I didn\u2019t know where I was going to go.\u00a0<\/p>\n
Dan: <\/strong>She says she usually gets two payments a week from insurance, with everything passing through Change. But it\u2019s not just the payments from insurance. Change also provides the documents that say how much an insurance company is GOING to pay for any given claim.\u00a0<\/p>\n
Emily Benson: <\/strong>That\u2019s a critical document because that tells me what does the family owe us. And then the beneficiary is also going to get that information. So they\u2019re not surprised by what we charge them. So now every week we\u2019re stacking up and stacking up these amounts that the family\u2019s going to owe us.\u00a0<\/p>\n
Dan: <\/strong>By the time we talked, Emily Benson had gotten two loans from United. About 40,000 each: maybe a month\u2019s worth of billing for her, between the two loans.\u00a0<\/p>\n
Emily Benson:<\/strong> That first one was wiped out. Pretty quickly because now we\u2019re on week five I\u2019m working on the second, um, installment that I got from united. But, you know, that\u2019s half gone now too. So I don\u2019t know what the next step is. We\u2019re nowhere near. Getting claims processing yet and so. I\u2019m kind of panicking Yeah.\u00a0<\/p>\n
Emily Benson: <\/strong>it looks like the terms are within 45 days. You have to pay back that temporary loan. How am I going to do that if I don\u2019t have claims coming?\u00a0<\/p>\n
Dan: <\/strong>God.\u00a0<\/p>\n
Emily Benson:<\/strong> I\u2019m still panicking.\u00a0<\/p>\n
Dan:<\/strong> I\u2019ll bet. Oh my God. You\u2019re very, you\u2019re very calm for somebody in this situation.\u00a0<\/p>\n
Emily Benson: <\/strong>Well, you know, I\u2019ve had a lot of therapy of my own. That\u2019s how you become a therapist. So panicking doesn\u2019t help anyone.\u00a0<\/p>\n
Dan:<\/strong> I guess that\u2019s, I\u2019ll take that under advisement.\u00a0<\/p>\n
Dan: <\/strong>So, to pay back those loans\u2013 which are supposed to be repaid within 45 days\u2013 Emily Benson is gonna have to start getting paid again. As we spoke, she\u2019d had been living without systems for filing claims and getting paid for five weeks. And even when those systems get moving again, she\u2019s not gonna see all that money right away.<\/p>\n
Emily Benson: <\/strong>Imagine the backlog and the clog. Five weeks worth of insurance claims I mean, we\u2019re looking at a major traffic jam.<\/p>\n
Dan:<\/strong> Oh myGod.Andif everybody were to work double time for the next five weeks, then it would be 10 weeks. But people can\u2019t really work double time.\u00a0<\/p>\n
Emily Benson:<\/strong> When you say that out loud,\u00a0<\/p>\n
Dan: <\/strong>Sorry.\u00a0<\/p>\n
Emily Benson: <\/strong>I don\u2019t feel as grounded,\u00a0<\/p>\n
Dan:<\/strong> I\u2019m so sorry.\u00a0<\/p>\n
Emily Benson:<\/strong> but, but, but it\u2019s probably realistic.\u00a0<\/p>\n
Dan: <\/strong>Other news outlets are talking to providers like Emily Benson all over the country. We\u2019re recording this in mid-April. United hasn\u2019t responded to our questions on this story, but their website says \u201cWe\u2019re determined to make this right.\u201d It says they\u2019ve put out 4 point 7 billion dollars in emergency loans to providers so far. And it says that for the vast majority of Change Healthcare\u2019s services, a restoration date is \u201cstill pending.\u201d We have no idea what\u2019s going to happen. What it\u2019ll mean for our doctors, our therapists, our local hospitals. And look, there are elements of this story that go beyond health care. How many of us have personal health information\u2013 maybe financial information\u2013 that got seized by who the heck knows who in this? And yes, United\u2019s getting some heat. They got a list of pointed questions from U.S. Representative Jamie Raskin. Their CEO is supposed to testify in a Senate hearing at the end of April. But as we\u2019ll get into in a minute, this disaster\u2013 United\u2019s disaster\u2013 could turn out to have a silver lining\u2013 for United: An opportunity to keep on growing. And that opportunity arises precisely because they\u2019re so big, and doing so much business in so many parts of the medical-industrial complex. Which doesn\u2019t sound great. It raises questions about the, uh, potential downsides for a lot of people, when individual companies get this freaking big. And it raises questions about what we can maybe do about it. And the answer is: Maybe more than we think. That\u2019s all coming right up.\u00a0<\/p>\n
This episode of An Arm and a Leg is produced in partnership with KFF Health News. That\u2019s a nonprofit newsroom covering health care in America. Their reporters do amazing work, and we\u2019re honored to be in cahoots with them. So, as we\u2019ve seen, a company like United is so big that their problems become everybody\u2019s problem. And at least in one case that I\u2019ve seen so far, everybody\u2019s problem can become United\u2019s opportunity. That\u2019s what happened in Oregon, and a reporter from Washington, DC, was in a position to make it a national story.\u00a0<\/p>\n
Maureen Tkacik:<\/strong> My name is Maureen Tkacik, but you can call me Mo and I am the Investigations Editor at the American Prospect, and a Senior Fellow at the American Economic Liberties Project.\u00a0<\/p>\n
Dan: <\/strong>The Prospect is a politically-progressive news magazine, and the Economic Liberties Project is a non-profit that pushes an anti-monopoly agenda. A lot of Mo\u2019s reporting looks at how financial behemoths are looking like monopolists\u2013 especially in health care. So\u2026\u00a0<\/p>\n
Maureen Tkacik:<\/strong> have come to know United Healthcare, pretty well, over past, year or so,\u00a0<\/p>\n
Dan:<\/strong> Looking at, for instance, how they gobble up medical practices. And as we mentioned, that kind of gobbling has made United the biggest employer of physicians in the country\u2013 by huge margins\u2013 in just the last few years. About one doc in ten now works for them, as employees or \u201caffiliates.\u201d As we\u2019ve reported before, big players\u2013 like United, like big hospital systems, and like private equity groups\u2013 have been gobbling up medical practices for years. And: that kind of consolidation often leads to us paying more\u2013 and often for lousier healthcare. Moe Tkacik has been reporting on that kind of gobbling\u2013 and recently, she\u2019d been looking at how the state of Oregon had been trying to slow it down. Then, in January 2024, a good-size medical group in Corvallis, Oregon said they were ready for United to gobble them up. The group is called the Corvallis Clinic, and it\u2019s got more than a hundred docs. But United and the Clinic would have to go through a whole process to get approval from state regulators. That process includes: regulators asking the public for comments on the transaction. And in this case\u2026\u00a0<\/p>\n
Maureen Tkacik: <\/strong>they were. inundated with comments.\u00a0<\/p>\n
Dan:<\/strong> Like 378 of them in just a few weeks. And the comments were overwhelmingly AGAINST the sale. In February, the regulators sent United and Corvallis a 5-page list of conditions under which they might approve a deal. A source of Moe\u2019s sent me the document, which he got through a public-records request. The conditions are like, to not reduce service levels in the community for at least 10 years. To keep accepting non-United insurance. And to submit to a lot of monitoring. Then, as negotiations were starting, Change Healthcare went offline. And in early March, Moe got a tip: The clinic and United were gonna make an end run around this process. She talked with an anonymous insider at the clinic. Who told her: It turns out that all of the clinic\u2019s billing had been connected to Change.\u00a0<\/p>\n
Maureen Tkacik:<\/strong> So we\u2019re talking about just a calamitous cash crunch. Their revenue came to a standstill\u00a0<\/p>\n
Dan:<\/strong> And by the time Moe\u2019s insider source learned what was up\u2013 this had been going on for two weeks.\u00a0<\/p>\n
Maureen Tkacik:<\/strong> this source said that , Thursday, they all had a meeting and they were not sure they were going to be able to open their doors the following Monday.\u00a0<\/p>\n
Dan:<\/strong> That was Thursday March 7. The next day, March 8th, lawyers for Corvallis Clinic filed an application for an emergency exemption from the normal review process. A week later, they got that exemption. And this time regulators had not demanded any conditions. As Moe\u2019s story laid out, United\u2019s problem\u2013 the Change Healthcare hack\u2013 became everybody\u2019s problem, including Corvallis. And their problem seemed to have become United\u2019s opportunity. To gobble up the practice without having to agree to any conditions from pesky regulators. And a postscript to the Corvallis Clinic story: Shortly after regulators approved that deal, United sent notices to thousands of patients at another clinic it had taken over in nearby Eugene, saying basically: We don\u2019t have a doctor for you anymore. Goodbye and good luck. News reports said that clinic had lost more than 30 doctors since United took over. And among the public comments urging regulators to kibosh the Corvallis clinic, a bunch of people cited lousy experiences at that Eugene clinic under United\u2019s ownership. This is the kind of thing that Moe Tkacik and her colleagues at the American Economic Liberties Project\u2013 and what\u2019s become a kind of anti-monopoly movement\u2013 want to change. And here\u2019s where this episode becomes maybe just a little less of a horror story, and maybe a little more of an action movie. Because the anti-monopoly movement has gotten a big backer in the last three years: The Biden Administration. In 2017, a woman named Lina Khan made a name for herself in legal circles when she published a paper arguing that Amazon had become the kind of super-dominant company that antitrust laws were designed to constrain. Lina Khan was a law student when she published that paper. In 2021, Joe Biden appointed her to lead the Federal Trade Commission. The FTC and the Department of Justice split the job of antitrust enforcement, and they\u2019ve both become super-aggressive. They\u2019ve filed big lawsuits against Google, Amazon, and\u2013 in March of this year\u2013 Apple. And gotten a fair amount of attention. As we were writing up this episode, Jon Stewart interviewed Lina Khan on \u201cThe Daily Show.\u201d And here\u2019s how she described her approach in that conversation.\u00a0<\/p>\n
LK: <\/strong>We\u2019ve really focused on how companies are behaving. Are they behaving in ways that suggest they can harm their customers, harm their suppliers, harm their workers, and get away with it? And that type of too big to care type approach is really what ends up signaling that a company has monopoly power because they can start mistreating you, but they know you\u2019re stuck.\u00a0<\/p>\n
Dan:<\/strong> Earlier this year, the Wall Street Journal reported that Lina Khan\u2019s allies\u2013 antitrust folks at the Department of Justice are investigating United. Neither the Justice Department nor United has commented on that report. Meaning: Nobody\u2019s denied it. So far, some of the Biden administration\u2019s antitrust lawsuits have pan out, and some haven\u2019t. Actually, in 2021, the Justice Department sued to prevent UnitedHealth Group from buying Change Healthcare. That one, they lost. But when the sued to block Penguin Random House from buying another giant publisher, Simon and Schuster, they won. And as Lina Khan told Jon Stewart, she and her colleagues aren\u2019t just suing to prevent mergers. They sued to get infamous Pharma Bro Martin Skhreli banned for life from the pharma trade. And they won. And they\u2019re looking at other ways big companies, especially in health care, screw people.\u00a0<\/p>\n
LK:<\/strong> Just to give you one example, inhalers. They\u2019ve been around for decades, but they still cost hundreds of dollars. So our staff took a close look and we\u2019ve realized the, some of the patents that had been listed for these inhalers were improper. There were bogus. And so we sent hundreds of warning letters around these patents. And in the last few weeks, we\u2019ve seen companies deal list these patents and three out of the four major manufacturers have now said, Within a couple of months, they\u2019re going to cap how much Americans pay to just 35.\u00a0<\/p>\n
Dan: <\/strong>I think we should start paying a lot more attention to what Lina Khan and her colleagues are up to\u2013 and what their chances are. I\u2019ve started reading up, and getting in touch with folks who are in this fight, and who are watching it closely. Because this is looking like the kind of action movie I kind of like. Meanwhile, I\u2019m posting a link to Jon Stewart\u2019s interview with Lina Khan wherever you\u2019re listening to this. I\u2019ll have a few other links for you in our newsletter\u2013 you can sign up for that at arm and a leg show dot com, slash, newsletter. And I\u2019ll catch you in a few weeks. Till then, take care of yourself.\u00a0<\/p>\n
This episode of an arm and a leg was produced by me, Dan Weissmann, with help from Emily Pisacreta, and edited by Ellen Weiss. Big thanks this time to the novelist, journalist and activist Cory Doctorow, who has been writing about the antitrust revival for years, breaking down complex, technical stories in clear, accessible ways. Thanks to professor Spencer Waller from the Loyola University Chicago law school for talking about antitrust with me. And thanks to Dr. John Santa in Oregon\u2013 for sharing material he got via a public-records request to the state, and for his observations. Adam Raymonda is our audio wizard. Our music is by Dave Weiner and blue dot sessions. Extra music in this episode from Epidemic Sound. Gabrielle Healy is our managing editor for audience. She edits the first aid kit newsletter. Bea Bosco is our consulting director of operations. Sarah Ballama is our operations manager. And Armand a Leg is produced in partnership with KFF Health News. That\u2019s a national newsroom producing in depth journalism about healthcare in America and a core program at KFF, an independent source of health policy research, polling and journalism. Zach Dyer is senior audio producer at KFF Health News. He\u2019s editorial liaison to this show. And thanks to the Institute for Nonprofit News for serving as our fiscal sponsor, allowing us to accept tax exempt donations. You can learn more about INN at INN. org. Finally, thanks to everybody who supports this show financially\u2013 you can join in any time at arm and a leg show dot com, slash, support\u2013 and thanks for listening.<\/p>\n
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