Where Spin Meets Bull: Florida Hospital’s Lars Houmann on the Dispute With United Healthcare
Pierre Tristam | August 3, 2010
Spin control is a corporate art. Two excellent practitioners, Adventist Health System’s Florida Hospital and United Healthgroup’s United Healthcare, are at it. They’re in a contract dispute that may end access to Florida Hospital facilities for half a million people in Central Florida who have United Healthcare insurance, or have Medicaid covered through United Healthcare. (The full story here.)
- Merchants of Greed: How Florida Hospital and United Healthcare Bargain Over Your Body
- Read Adventist Health Systems’ 2010 Annual Report
Florida Hospital and United Healthcare are also battling to win over public opinion. Each side portrays itself as advocating for the public. It’s bunk. They’re battling for their shareholders, in United Healthcare’s case, and to preserve mounting profits, in Florida Hospital’s case, even though Florida Hospital is ostensibly a non-profit corporation. If either side were truly advocating for the public, they wouldn’t jeopardize coverage for half a million people and would continue to negotiate without an arbitrary deadline.
In this dispute, United Healthcare is actually making some concessions on behalf of its clients. Flagler County residents, for example, will be covered for at least 75 days at in-network rates past the Aug. 15 deadline, should negotiations fail, United Healthcare said Tuesday afternoon.
Lars Houmann, the Florida Hospital chief executive officer, who was paid $1.1 million in 2007, posted a three-and-a-half minute video on Florida Hospital’s website that sums up the contract dispute in his words. The Houmann video is a masterstroke of good feelings and good intentions in words that, read a bit closer, say nothing at all or mischaracterize the issue. The video is nevertheless extremely effective as a tool of spin control: Houmann comes across as an affable, likable everyman (no desk, no tie on an unbuttoned shirt, a greenish plant set next to an 8×11 image of something entitled “FATHERHOOD”) speaking to an invisible somewhere in the room—not to the camera itself, which is another device that creates the appearance of a conversation when no such conversation exists.
The video is broken down into five segments, with each segment’s title appearing in shaded white and gray on a black screen: “The Situation,” “Balanced Negotiations,” “Continuity of Care,” “Parity,” and “Providing Care Fairly.”
Here’s Houmann’s unabridged text of each, followed by a brief analysis:
“What’s going is we’ve had, um, negotiations with United going on for months, and we have set a termination date, um, between us and them, and that is now rapidly approaching. That’s August 15. And the reason that this is now public is that they have to let people know that they might not be able to go to Florida Hospital in a few weeks. Um, while this is going on, um, we’re continuing negotiations. I believe that as the next two or three weeks go by, those negotiations will increase and the frequency of meetings and all will accelerate, and we’ll just keep track of how that goes and keep people posted if we see progress.”
Florida Hospital won’t say so more explicitly than Houmann just did: the Aug. 15 date is an arbitrary date the hospital set, ending its contractual obligations with United Healthcare. Nothing says that Florida Hospital couldn’t, as organizations often do, continue to apply the terms of its contract with United Healthcare even after its expiration, while the two sides negotiate. The Flagler County school district’s contract with its own teachers has expired, negotiations are continuing and may not be over by the time teachers reconvene. That doesn’t mean teachers won’t be employed and earning a check, or that the district won’t still be abiding by the previous contract’s terms. Florida Hospital made a decision to set an end date for the contract.
Meanwhile, United Healthcare could also continue to honor the terms of its own pledge to patients, as United Healthcare in fact will regarding Flagler school district employees and residents: Those employees will be covered at in-network rates at Florida Hospital indefinitely, as long as United Healthcare doesn’t give the district a 90-day notice.
Houmann’s claim that Florida Hospital will “keep people posted” is meaningless: either there is a contract or there isn’t. Florida Hospital, like United Healthcare, have made a point of hiding most of their numbers from the public, except for a few strategic, vague examples. More on that later.
“One of the things we hear is that Florida Hospital and United are both big giants. We’ve heard the metaphor when elephants wrestle, ants get trampled. And people see themselves in the middle of this, um, disagreement as a victim. Um, it’s important to recognize that there’s balance in a market system when the two organizations have leverage to negotiate what’s best for their customer. And that’s what we have here.”
One of Houmann’s most disingenuous statements: “One of the things we hear is that Florida Hospital and United are both big giants,” as if the fact of Advantist Health System’s or United Healthcare’s bigness—Adventist is the largest non-profit Protestant provider of care in the United States, United the largest private insurer—were a rumor, or an exaggeration. It usually is an understatement in most people’s estimation, as most people don’t know that those two organizations are, in fact, not mere giants, but the leading giants in their fields.
Houmann veers toward a moment of empathy, though not with another disingenuous characterization of the conflict as a mere “disagreement”: “And people see themselves in the middle of this, um, disagreement as a victim.” If he intended to then provide reassurance, he didn’t. He followed that statement with a largely incoherent or meaningless non-sequitur about the leverage of giants and the free market—neither of which mean anything at all to patients about to lose their preferred coverage.
Continuity of Care
“The most important thing to recognize is people do not get trampled in this process. And this is why: they have an emergency, they’re delivering a baby, they’re having something going n in their life, they’re covered by United, they walk into Florida Hospital, we’re gonna take care of them, and they’re protected by state law in those cases. Where people have to plan something and they can’t choose Florida Hospital, for the time being they have to make a tough choice, and that is, do I go out of network, pay more out of my pocket, but go to Florida Hospital, or do I go now where my health plan told me I have to go cause they lost a provider in their network. So we all have to recognize that it might not get solved by deadline.”
This is a hospital executive at his slithering best, using a crisis of his own creation to make his hospital network actually look good. The fact that anyone, even those with United Healthcare coverage, can walk into an ER and get treatment is nothing new. But neither is what Houmann doesn’t say about the many people who go to the ER for non-emergency treatment: if you do opt for that treatment and you had United coverage, the hospital will hound you for payment on its terms, not on United Healthcare’s, just as if you don’t have any coverage at all, the hospital will still chase after you for payments and eventually turn over your bills to a collection agency if you don’t pay, thus damaging your credit. (If your treatment qualifies as an emergency, you’re covered under in-network rates regardless, even if the dispute is not resolved.)
So the claim that Florida Hospital’s ER door is always open is somewhat of a canard. Houmann then reveals the disconnect between hospital executives and their clients. For many in Flagler, Medicaid patients especially, Florida Hospital Flagler is the only choice. It’s not as if they can hop in the Lexus and travel up to St. Johns or Volusia County for treatment there. And even if they did, they may have to pay out-of-network rates, depending on whether the doctor they choose is on the list or not. In hospitals, such rates add up to a budget’s death sentence. Many will simply forego care.
Then there’s this line: “or do I go now where my health plan told me,” a clever way once again to make it seem as if Florida Hospital had nothing to do with creating the crisis.
“Parity simply means that someone is not given an unfair advantage over someone else. Call it a level playing field, call it the 100-yard dash where everybody starts at the same white line on the race track. The, the parity issue with United is that all of their competitors are at a certain point with Florida hospital on our contracts, and we’re happy with where we’re at with all of them, and United has a distinct head start because they’re, what they’re paying for services from Florida Hospital, it is not where those others are, and we don’t think they should have that unfair advantage in the market. So let’s say it’s a Toyota dealership and Blue Cross, Aetna, Cigna, United, um, walk in at different times to buy a Camry. Um, there is no logical reason why three of them should walk in and our starting point is a certain price for that car and United walks in and they start several thousand dollars below that.”
Here, Houmann is simply mischaracterizing the issue or, to put it more bluntly, lying. Put aside the fact that the same car in a dealership will get haggled and negotiated over with a variety of starting points depending on the sharpness of the customer or the salesman, or the dealership’s specials, or the brand’s incentives. Put aside the even more revealing crassness of the comparison: human beings are not Camrys. Nor should they be haggled over.
In reality, there is no such thing as “parity” in rates. Larger pools pay smaller costs: that’s a given of the insurance industry. In exchange, the provider is assured of that larger pool’s base. And individuals should be glad that their insurer is pressuring health care providers for lowering rates, or keeping them low: that’s what keeps premiums low.
Florida Hospital itself mischaracterizes the rates of the same procedure, depending on whether a patient pays it himself, whether it’s covered by private insurance, whether it’s covered by Medicaid or whether it’s covered by Medicare. The same procedure will be billed different ways. And Florida Hospital itself will list the highest cost possible when it bills it as charity—when someone without insurance got a procedure, and Florida Hospital lists that under its “contributions” to the community. Thus Florida Hospital inflates its “charity” contributions, knowing fully well that, if Medicare were the paying agent, the same procedure would have fetched less than half in reimbursements. No one says anything about those games. They’re dishonest. But they’re common among non-profit hospitals.
And no one really knows what Florida Hospital bills Aetna, what it bills United Healthcare, what it bills any other private insurer, because they don’t share those rate sheets. You have to take Houmann’s word for it. You can try deciphering medical bills, but Florida Hospital won’t provide a rate sheet showing precisely what each of the insurance companies it’s contracting with pay for given procedures. When it comes to hospital and insurance executives, used-car salesmen may have reason to smile: their reputation is improving in comparison.
Providing Care Fairly
“We would love to have people with United Health products (sic.), especially those who are in for a while and didn’t choose to leave Florida Hospital on their own, but their health plan lost Florida Hospital, so we would love to be able to provide for them, but at the right terms that are fair to the hospital, its employees, and frankly to the community. It really isn’t fair for other companies to subsidize United Healthcare.”
The question isn’t whether particular insurance companies are subsidizing United Healthcare. That’s none of Houmann’s business. If that were an issue, the other insurance companies should be taking United Healthcare to task, not the hospital. Is Houmann suggesting that he’s doing the private insurance industry’s bidding?
Houmann uses the fairness card, one of the most overused, most meaningless words in the English language these days. Fair to whom? Houmann and Florida Hospital say United Healthcare haven’t seen their rates adjusted since 2001. Yet Adventist’s hospitals have experienced an annual year-over-year increases in profits alone of 29 percent, year after year, since 2000. That’s in an ostensibly non-profit hospital network. United Healthcare’s contract has obviously not affected the bottom line except to swell it—which stands to reason, since United Healthcare is likely the hospital network’s biggest provider of privately insured customers.