25 Sep 2022 McKinsey and Providence colluded to force poor patients into destitution


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A collage. On the left is an image of a cigar-chomping plutocrat in a top hat. He stands at a control box whose lever is fashioned into a dollar-sign. The control box bears the logo of McKinsey and Company. In one gloved hand, he holds aloft a sad, cloth-capped young man on crutches. On the right is an ogrish thug wielding a club and holding out his free hand in a 'gimme' gesture. He wears a doctor's reflector around his head. Behind them is a hospital ward. On the wall of the hospital ward is the logo for Providence hospitals.

McKinsey and Providence colluded to force poor patients into destitution (permalink)

Providence is a health giant whose anchor is a network of Catholic hospitals. They colluded with McKinsey to steal from their poorest patients, by deceiving them about their eligibility for free care, saddling poor, sick people with crushing debts:

https://www.nytimes.com/2022/09/24/business/nonprofit-hospitals-poor-patients.html

Though Providence is nominally a nonprofit, it sits atop a $10 billion private equity fund that it invests in unrelated sectors. Its nonprofit status lets it evade $1.2 billion per year in federal and state taxes. The company stole $500,000,000 in US covid relief intended for hospitals in danger of closure. Its CEO makes $10,000,000 per year.

As a nonprofit, Providence is required to provide free care to low-income patients. In 2018, the company retained the services of McKinsey and Co, a scandal-haunted global consulting firm with a long track record of designing criminal strategies for its clients. There are many ghastly examples of this conduct – for example, helping the Saudi government hunt down, torture and murder dissidents:

https://www.nytimes.com/2018/10/22/business/dealbook/mckinsey-saudi-dissidents.html

Closer to home, McKinsey crafted ICE's immigration sweeps and helped design the notorious kids-in-cages detention centers, counseling the Trump administration to control costs by denying detainees adequate food and health care:

https://www.propublica.org/article/how-mckinsey-helped-the-trump-administration-implement-its-immigration-policies

(McKinsey then lied about this.)

https://www.propublica.org/article/mckinsey-called-our-story-about-its-ice-contract-false-its-not

All these failures and scandals are even more infuriating when you learn about McKinsey's internal mythologizing. The company tells new recruits that they are a global force for good, comparing their consulting work to the Catholic Church and the US Marine Corps.

https://www.propublica.org/article/how-mckinsey-makes-its-own-rules

This is an obviously absurd claim – no matter how many people McKinsey helps murder, they'll never come close to either institution's body-count. But McKinsey has a comprehensive plan to sell this image to its "associates," starting with a curriculum to help very young children learn to act like McKinsey consultants:

https://pluralistic.net/2022/02/15/management-jesuits/#pmc-jr

In the long symphony of McKinsey scandals, those involving health-care are a recurring motif. They made $100,000,000 in failed, idiotic, bumbling covid initiatives:

https://pluralistic.net/2020/07/15/3-frauds-in-a-trenchcoat/#failing-up

They designed Big Pharma's price-gouging program:

https://pluralistic.net/2021/11/25/strikesgiving/#cool-story-pharma-bro

They helped the Sacklers – a multigenerational crime family of pharma billionaires whose Oxycontin set off the opioid epidemic – design their sales program, suggesting that pharma distributors be paid cash bounties for each fatal opioid overdose in their sales territory:

https://www.nytimes.com/2021/02/03/business/mckinsey-opioids-settlement.html

They helped pharma companies design programs to convince doctors to overprescribe opiods:

https://pluralistic.net/2022/06/30/mckinsey-mafia/#everybody-must-get-stoned

Then, after the Sacklers declared their pharma company bankrupt, protecting their billions from their victims, McKinsey helped craft their bankruptcy strategy, ensuring that they could vaporize their victims' claims while holding onto their fortune:

https://pluralistic.net/2021/07/29/impunity-corrodes/#morally-bankrupt

As all this was coming to light, a senior McKinsey specialist drafted a plan to hide the company's role in the opioid crisis, illegally destroying internal memos relating to litigation:

https://www.nytimes.com/2020/11/27/business/mckinsey-purdue-oxycontin-opioids.html

In light of all this, it's only natural that Providence would turn to McKinsey when they needed help committing crimes and destroying thousands of people's lives. McKinsey helped Providence craft a program to coerce poor people into paying for care they were entitled to get for free. They called it "Rev-Up."

Writing in the New York Times, Jessica Silver-Greenberg and Katie Thomas reveal the full depravity of "Rev-Up." McKinsey advised Providence to train its staff to avoid truthfully answering poor patients' queries about whether they were eligible for free care.

https://www.nytimes.com/2022/09/24/business/nonprofit-hospitals-poor-patients.html

When patients asked if they were eligible for free care, Providence employees were trained to answer "Payment is expected." Staff were told "Don't accept the first 'no.'" Rather, they were told to reply, "How would you like to pay for that today?" If patients still pressed them on their legal entitlement to free care, Providence employees were told to ask if the patients' employers would pay for half their care.

When patients asked why a nonprofit hospital was asking them to pay more than they could afford, reps were counseled to reply, "We are a nonprofit. However, we want to inform our patients of their balances as soon as possible and help the hospital invest in patient care by reducing billing costs."

After saying this, reps were supposed to add, "how would you like to take care of this today?"

If patients continued to press Providence reps on their eligibility for free care, then, finally, could the reps discuss the hospital's legal obligation to wipe out the bills for those in need.

Charity care costs the average US nonprofit hospital 2% of its total expenses. For Providence, it's less than 1%. In 2018, when the company hired McKinsey to design Rev-Up, it was 1.24%.

In pursuing a <1% reduction of expenses, the "nonprofit" ruined the lives of thousands of poor people, including its own employees, who are so badly paid that they qualify for free care. The Times quotes Bev Kolpin, a Providence Oregon sonogram tech who paid her own employer $8,000 to have a cyst removed (she had to take unpaid leave for the procedure).

Michael Hudson tells us that "debts that can't be paid, won't be paid." Poor people can't afford to pay the sticker price of care at Providence, so Providence sent thuggish collection agencies to hound patients (including Medicaid patients) to pay the balances that should have never been assessed.

The Times spoke to patients who were taken to collections by Providence and thereafter avoided seeking care for themselves and their children, even for urgent conditions. Dean A. Zerb, a former congressional staffer who investigated nonprofit hospitals, said "That is the outcome that hospitals like Providence may be hoping for."

One of the most haunting details in the Times' report is the story of Vanessa Weller, a single mother in Alaska, who delivered a premature baby at the Providence Alaska Medical Center. The baby died five days later, but Weller was pursued for $125,000 in medical bills by Providence. As a manager at a local Wendy's, she was entitled to have her bill erased. Instead, she was relentlessly chased by bill-collectors and her credit rating fell from 650 to 400.

Providence professes to be shocked, shocked, that all this happened. Providence CFO Gregory Hoffman told the Times that the news that his company had failed in its legal obligations after paying a consultant to teach them how to do this "very concerning," adding that these victimized patients "have our attention." McKinsey made at least $45,000,000 for designing Rev-Up.

I have my own experience with Providence, though not nearly so disturbing. In 2018, my parents came to stay with me in Burbank. My father fell gravely ill – he had kidney stones and a septic bladder infection. He went to the local Providence ER and nearly died. He was in a coma for two days. As my mother stood at his bed-side, not knowing if he would live out the day, a billing agent for the hospital came into the room and began to pester her about how she would pay his bill.

Thankfully, my parents are retired, unionized schoolteachers from Canada, and they were fully insured. But insured or not, it was such a disgusting, filthy, callous thing to do that I have never forgotten it. Thankfully, my father made a full recovery but I have no interest in ever visiting a Providence hospital again.

Hey look at this (permalink)


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Colophon (permalink)

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