House of Commons Briefing on Accountable Care Organisations takes Secretary of State’s endorsement of Kaiser Permanente and Ribera Salud at face value

The House of Commons Briefing on Accountable Care Organisations points out that the Health and Social Care Secretary has cited Kaiser Permanente as an example of best practice in integrated care, alongside Ribera Salud in Spain. However, the Secretary of State’s endorsement of Kaiser and Ribera Salud is not justified by their performance. We have to ask why no critiques of these Accountable Care Organisations were included in a supposedly impartial House of Commons briefing paper.

Kaiser Permanente has the highest number of fines against it for breaches of contract in the state of California while making massive financial gains under its non-profit status, which is clearly a tax-dodging tactic.

A report  by the California Nurses Association states,

“Kaiser has taken advantage of a legal technicality to attain market dominance – it is a non-profit corporation – which means it is exempt from paying any federal income taxes…Kaiser has abused its tax exempt non-profit status and used it to fuel its market expansion program while providing minimal community service.”

A California State investigation probed Kaiser and 14 other nonprofit healthcare organizations for excess profits, and questioned whether they deserve to keep the tax-exempt status that saves them millions of dollars a year.

In 2016 Kaiser hospital workers protested against Kaiser Permanente’s board members’ vote to approve five-figure bonuses for dozens of Kaiser executives who already received more than $1 million each in salary. They said this was a misuse of the company’s resources and an abuse of the public’s trust.

Business Wire reported,

“As a non-profit charity, the company pays no corporate income or real estate taxes, and receives big taxpayer subsidies through Medicare and Medi-Cal payments. Yet dozens of Kaiser’s executives received more than $1 million each in compensation in 2013, and nearly 100 more executives will receive bonuses this year worth tens of thousands of dollars each.
Last month, however, the company announced it would not issue small performance-based bonuses to its frontline nurses, lab-techs, EVS workers and other caregivers in Southern California, despite record profits and surpassing patient recruitment goals for the region. According to Kaiser, it had national profits of $1.9 billion in 2015 and $3.1 billion in 2014.”

The House of Commons briefing fails to mention that the Ribera Salud Grupo in Spain is under police investigation for overcharging 2.6 million euros in emergency assistance and other areas, and corruption in the award of subcontracts. The Anti-Corruption Prosecutor’s Office in Valencia has named Alberto de Rosa, CEO of Ribera Salud, and Pablo Gallart, the company’s director, as vicariously liable in the alleged scam.

Ribera Salud is half-owned by the US health insurance company Centene Corporation, which has just been hired by Greater Nottingham Accountable Care System via a £2.7m contract brokered by the notoriously useless company, Capita.

Ribera Salud’s discredited Alzira model of  public/private partnership has been recently outlawed by the Valencia government. This model involves a health management company running an area’s entire health service and hospital buildings, paid for with a mix of private and public money.

The Alzira model has been on the back foot in Spain since 2013, when mass health workers’ strikes combined with a High Court injunction forced the resignation of Madrid’s health minister and the Madrid government’s abandonment of its plan to impose the Alzira system on six public hospitals.

The rout of the Alzira system in Spain has continued with a new law passed by the Green/Socialist/Podemos regional government in Valencia which brings the health service back into direct public management and provision, and with the recent police investigation into Ribera Salud corruption.

Moreover, a study by Dr Anne Stafford of Manchester Business School, and others, assembled evidence that the financial reality of Ribera Salud and its “Alzira mode”is at odds with “the rhetoric, which declares this project to be a success story.”

Accountable Care is based on an insurance model that puts money ahead of patients’ needs

The House of Commons Briefing notes that in the USA the number of Accountable Care Organisations increased significantly following the passing of the Affordable Care Act in 2010. But it does not note that NHS England’s Accountable Care Organisation contract imports the business model that is used by USA Accountable Care Organisations to deliver the USA’s Medicare/Medicaid programme, under the Affordable Care Act. This provides a limited range of state-funded “managed care” for patients who are too poor to pay for private health insurance.

Nor does it explain or that “managed care” is a USA term that means clinicians working for Accountable Care Organisations have to provide the cheapest possible care, in line with care protocols and pathways laid down by insurance companies. So clinicians are accountable to insurers who put financial considerations ahead of individual patients’ clinical needs, as well as bypassing or overriding clinicians’ professional skills, judgement and relationship with the patient.

This commissioning model has already been introduced in Sustainability and Transformation Partnerships through so-called standardised commissioning based on the Right Care scheme, which is based on poor data. It is being used to identify whether treatments offered to specific patients represents good value for money – and to deny it, if the calculation is that it is not. It will be central to Accountable Care Systems and Organisations.

The House of Commons Briefing mentions that Accountable Care Organisations would involve ‘integrated’ working between health and social care. To date, this has involved moving funds out of the acute hospitals (Better Care Fund style) into local authority budgets to develop ‘Care Closer to Home’. The Better Care Fund was slated by the National Audit Office as having taken £billions out of the NHS and done nothing useful with it.

Since the House of Commons Briefing on Accountable Care Organisations is disappointingly partial when it should be even handed, we should be asking how it was prepared.

Campaigners’ Judicial Reviews

In its final section, the House of Commons briefing reports on the two Judicial Reviews that challenge the lawfulness of Accountable Care Organisations, brought by NHS campaigners.

A group of doctors and academics, including Stephen Hawking, is challenging the Secretary of State for arrogating the power to delegate Clinical Commissioning Groups’ responsibilities to Accountable Care Organisations, and for his failure to consult on both the proposed introduction of Accountable Care Organisations, and the Accountable Care Organisation contract before permitting its use by early adopter Accountable Care Organisations.

The 999 Call for the NHS’s Judicial Review of NHS England’s Accountable Care Organisation contract  is due to be heard in Leeds on April 24th. The grounds for our Judicial Review are that the Accountable Care Organisation contract’s payment mechanism is unlawful under current NHS legislation.

In giving permission for this Judicial Review, a judge has stated that this will be the sole focus of the Judicial Review, which will not consider the merits or demerits of Accountable Care Organisations.

999 Call for the NHS are very grateful for all the crowdfunded donations from over a thousand people that are covering the costs of the Judicial Review. The CrowdJustice Webpage is here

Thank you to Deborah Harrington for contributions.

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