MAHA's Trojan Horse: value-based care
Kennedy's new committee could help make more healthcare private
Health and Human Services and the Centers for Medicare & Medicaid Services recently announced the creation of a new federal advisory body. The 18-member Healthcare Advisory Committee includes:
Sebastian Caliri, a VC who formerly led the healthcare division at Peter Thiel’s surveillance tech company, Palantir.
Elizabeth Fago, a former real estate broker, Project Veritas aide, and Trump donor who ran into legal trouble after buying up “luxury” nursing homes.
Tony Robbins. Yeah, this guy.
Overall, there’s an emphasis on health tech and investors in this committee selection, as well as a complete lack of consumer advocates and public health officials.
The committee has been tasked with six main objectives:
Modernizing Medicare, Medicaid, CHIP, and Marketplace operations
Reducing administrative burden
Improving chronic disease prevention
Strengthening Medicare Advantage sustainability
Enhancing data interoperability and quality measurement
Improving care for vulnerable populations
On its face, these seem like laudable goals, until you remember who’s in charge at HHS and CMS. That’s why I wasn’t surprised to learn that at least half of the committee work in or support Value-Based Care (VBC), the practice of rewarding providers based on patient outcomes rather than the number of services delivered.
While that definition seems like it would align with the six bullets above, previously implemented value-based models have done the opposite, including costing the federal government $5.4 billion more than they saved.
In fact, research on VBC reveals a much different story:
VBC models have not lowered costs or improved patient outcomes at scale
VBC creates incentives for cherry-picking healthy patients and neglecting at-risk patients
57 different quality measures driving VBC requirements have led to physician burnout
VBC’s administrative burden has created a cottage industry of consultants and middlemen that siphon money away from actual care
VBC has largely not improved access to care or health outcomes for populations with social risk factors like ethnic minorities, rural populations, and individuals with disabilities
Why is value based care a central focus of this committee, then?
VBC’s direct contracting model mimics Medicare Advantage, a private-insurer version of Medicare that eliminates beneficiary choice, often costs more, and offers fewer consumer protections.
If you haven’t watched this, I highly suggest doing so:
VBC models have created an industry that assesses patient risk score before enrollment, which then is factored into the costs. A former policy researcher estimated more than $106 billion in overpayments were made to private health plans through billing manipulation, which benefited private investors of VBC programs more than anyone else.
Because that’s the end game of Project 2025, and why Kennedy was installed in the first place: to dismantle social services, especially for poor and at-risk populations.
Medicare Advantage enrollment has grown from 22% of eligible Medicare beneficiaries in 2008 to 48% in 2022. Private plans are even more dominant in Medicaid. In 2020, 72% of Medicaid beneficiaries were enrolled in managed care plans, with more than half the market covered by just five companies.
The same thing is likely to happen as value-based care becomes more prominent. By finding more diagnoses (treatable or not), the annual reimbursement rate under value-based contracting increases. Experts have estimated the resulting overpayments will lead to hundreds of billions of dollars in cost overruns over the next several years.
So while you’re going to hear a lot of language about the benefits of value-based care from MAHA in the coming months, just remember that MAHA is a Trojan Horse for the privatization of healthcare. That frame will help you separate the noise around value-based care from the actual signal of what’s happening.
Vampire based capitalism