While polls suggest Americans see health insurance as the villain in healthcare costs, there’s evidence showing a Virginia healthcare system and doctor played a small, but not insignificant, role in increasing prices.
Dr. Javaid Perwaiz was given a 59-year prison sentence after federal prosecutors said he performed unnecessary surgeries on women between 2010 and 2019. Court documents said Perwaiz sterilized Medicaid patients “without consent forms signed 30 days in advance” as required by law. Other procedures included hysterectomies and “other invasive and irreversible surgeries.”
A federal grand jury later indicted Chesapeake Regional Medical Center (CRMC) on claims it was complicit in Perwaiz’s actions. Prosecutors said the hospital received $18.5 million in reimbursements from the government for procedures Perwaiz performed.
Prosecutors said the hospital long defended Perwaiz despite being warned in 1983 that he performed “unnecessary gynecological surgeries, including irreversible hysterectomies on approximately a dozen patients,” by a different hospital.
Perwaiz performed surgeries until 1996 when his license was temporarily revoked for lying on tax documents. This included claiming a Ferrari was an ultrasound machine.
When the Virginia Board of Medicine was debating reinstating Perwaiz’s medical license, federal prosecutors said CRMC officials cited Perwaiz’s “physician profitably.” “CRMC was able to charge over $760,000 (or nearly $1.5 million in today’s dollars) for Perwaiz’s surgeries, resulting in a profit for the hospital of over $400 (or over $820 in today’s dollars) ‘per case,’” the government wrote in court documents.
But, hey, let’s blame health insurance companies.
That appears to be what younger Americans are doing.
A Generation Lab poll showed half of the 1,026 college students favorably viewed Luigi Mangione, the man accused of shooting UnitedHealthcare CEO Brian Thompson to death outside a New York hotel in December. Disturbingly, almost half believed Mangione was justified.
That tracks with an Emerson College poll which found 41% of those age 18-29 believed Thompson’s killing was a justifiable action. Another 19% were neutral.
This follows a trend for the federal government to waste money by propping up hospitals.
As the government rolled out its COVID recovery plan, hospitals received about $84 billion from the Provider Relief Fund. An audit of Health Resources and Service Administration (HRSA) numbers later found overpayments worth $2.6 billion. In 2023, a Government Accountability Office report found $1.356 billion of those overpayments had not been recovered. HRSA officials were blamed for not recovering the money sooner.
Despite inflation causing everyday Americans to start tightening their pocketbooks, a 2023 JAMA Health Forum study found hospitals avoided major pain. More than 3,300 of the 4,423 hospitals studied in the report reported positive net operating incomes in 2020 and 2021. More importantly, 78% of the hospitals in the black did it without COVID assistance. And 785 hospitals improved their financial situation during that same time.
When hospital systems and insurance companies get into disputes about reimbursement rates, the narrative continues to blame insurance companies.
But it’s hospitals that demand more money. Two disputes in Nebraska and Colorado featured hospitals allegedly wanting three times the rate of inflation from insurance companies. That was called “abnormal” by an insurance company executive who warned employers and employees would suffer the consequences.
It’s worth noting insurance spending accounts for 6% of all health care spending, according to the American Medical Association. And Center for Medicare & Medicaid Services statistics showed more than half of the $4.9 trillion in health care spending from 2023 went to hospital care and physician and clinical services.
Just who is the villain here?