PROVIDENCE – When I was a 19-year-old college student, I found myself sitting on a couch next to John D. Rockefeller III, at a farmhouse in Belchertown, Mass., arguing with the titan of American capitalism about the Vietnam War.

It was Sunday evening, April 25, 1971, and I was attending a meeting of the Connecticut Valley Committee, where 15 students from the five-college community – three each from Amherst, Smith, Mt. Holyoke and Hampshire colleges and the University of Massachusetts Amherst – were having dinner with the aging Rockefeller III to provide him with an update on the progress being made on his grant of $25,000 to improve the human, social, and physical environment of the Connecticut River Valley, announced in December of 1970.

Instead of holding the meeting within the comfortable confines of the Lord Jeffrey Inn in Amherst, one of the student members of the committee, Skip Spence, had volunteered to host the dinner at his farmhouse. The meal was moose meat stew – courtesy of one of Spence’s housemates, who worked as an undercover agent with the Maine State Police, arresting poachers. The moose meat was a “bonus” payment from his work.

I was a student at Hampshire College, a member of the first entering class of 1970, and I had just returned from attending the April 24 anti-war protest in Washington, D.C., which drew an estimated 500,000 peaceful protesters. I had been late arriving for the dinner, which is how I found myself sitting next to Rockefeller III on the couch, because there was no place else to sit.

Rockefeller III wanted to talk with me – argue would be a better term to describe the conversation – about the Vietnam War, which he strongly supported. Rockefeller III was surprised when I pushed back at his arguments about the war.

Of all the farmhouses in all the towns in all the world… to invoke the line from the Humphrey Bogart movie, “Casablanca,” there I was, arguing with Rockefeller III about the origins of U.S. involvement in Vietnam, and what had occurred at the 1954 Geneva conference. I had registered for the draft as a conscientious objector when I turned 18 in 1970, and so I had command of the facts surrounding America’s involvement.

In two months’ time, the gist of my arguments with Rockefeller III about the origins of the Vietnam War would become front-page news, with the publication of the secret study known as the “Pentagon Papers,” in The New York Times and then The Washington Post, leaked by Daniel Ellsberg, revealing that much of the policies supporting the war had been based upon government lies and obfuscation of the facts.

For the newly formed Vietnam Veterans Against the War, many of whom on that weekend in 1971 had tossed their medals over a barricade at the U.S. Capitol, the “lies” were not a secret.

And, for patients and caregivers alike, the breakdown and collapse of the health care delivery system in Rhode Island – and the nation – are no secret, either.

The burden of lies
I had occasion to recall my 1971 “discussion” with Rockefeller III about the Vietnam War in light of an interview I recently conducted with Maureen “Moe” Tkacik, a Senior Fellow at the American Economic Liberties Project, talking about the apparent failure of American law enforcement – and, for that matter, the failure of American journalists – to pursue the burgeoning corrupt empire of private equity investors which now seems to hold sway over the U.S. health care market.

Tkacik, who has been reporting on the machinations of how private equity financiers had engulfed and devoured hospitals and nursing homes through what she called a corporate system of “very classic fraud” – had tweeted out her surprise that R.I. Attorney General Peter Neronha had been the only law enforcement official to take on the private equity industry.

Neronha had been featured on CBS News in a Dec. 6, 2022, news report, contrasting his approach in Rhode Island, and how he had prevented what had happened to a suburban hospital outside of Philadelphia, Delaware County Memorial Hospital in Upper Darby, which had been hollowed out by its private equity owners and then forced to close.

In her most recent story, “Quackonomics,” which appeared in the June 2023 issue of The American Prospect magazine, Tkacik wrote: “Medical Properties Trust spent billions buying community hospitals in bewildering deals that made private equity rich and working-class towns reel.” [See link below to story.]

In transcribing the Tkacik interview, it occurred to ConvergenceRI that we may have reached a similar inflection point in health care – where the mounting evidence of lies, fraud and deceit is overwhelming the ability of doctors and nurses to deliver care for their patients – much like the Vietnam veterans who had tossed their medals over the barriers at the U.S. Capitol in April of 1971, frustrated by their inability for their voices to be heard about the corrupt war effort.

And, no slick billboard campaign or deceptive TV advertising claims or AI chatroom is going to be able to contain the growing scandal of the fraudulent health care empire.

What hope there is could be found, ConvergenceRI believed, in the legal advocacy of R.I. Attorney General Peter Neronha – and in the persistence of investigative reporters such as Tkacik – and in the courage of Rhode Island caregivers to stand up, push back, and rebel against the empire.

[Editor’s Note: The money that Rockefeller III granted to the Five College community served as the seed money to launch MassPIRG. My biggest contribution to the group was preventing the committee from naming itself “the Pioneer Valley Committee,” adopting the initials “PVC,” explaining to committee members that PVC were also the initials for polyvinyl chloride, a plastic feedstock manufactured from fossil fuels, linked to numerous environmental problems.]

Here is the ConvergenceRI interview with Maureen “Moe” Tkacik, a truth-teller at a time when the American health care industry – nationally and here in Rhode Island – appears to be on the verge of collapse, afflicted by the chronic disease of greedy private equity investors.

How did Tkacik and ConvergenceRI connect? Call it serendipity. She is investigations editor at The Propect and a senior fellow at the American Economic Liberties Project. Her most recent reporting has focused on investigating the strange tales of Medical Properties Trust and the unsavory role they have played in helping private equity investors, such as Prospect Medical Holdings, to buy and then unload hospitals, including what had been planned for Roger Williams Medical Center and Our Lady of Fatima Hospital in Rhode Island.

That story had made its way into the viewfinder of CBS News, which featured the advocacy of R.I. Attorney General Peter Neronha in preventing the two hospitals in Rhode Island from closing, insisting that the transaction include an $80 million escrow fund. [See link below to ConvergenceRI story, “Exposing the pitfalls in private equity financing of hospitals.”]

Our interview transcript begins in the middle of a question: ConvergenceRI: …Neronha is on the cutting edge, as far as Attorneys General go, in pursuing health care transactions and looking at the problems with private equity investors. He’s been a leader in pursuing legal cases against drug manufacturers and distributors. Recently, he sued the manufacturers of PFAS….
TKACIK: That’s the 3M settlement, right?

ConvergenceRI: I am not sure if he is a party of that lawsuit, or another lawsuit…
TKACIK: God bless him. Lawsuits are the only enforcement tool that we’ve got in our health care system.

ConvergenceRI: Why has enforcement been so lax in the legal arena, from your experience of reporting on it? Why haven’t more attorneys general been more aggressive in pursuing this?
TKACIK: Pursuing health care fraud?

ConvergenceRI: You name it: Health care fraud; bad private equity investments, however you want to define it. How do you see the problem? And, what kind of better enforcement would you like to see?
TKACIK: Honestly, it is a mystery to me, with some of these things. I think that you contacted me, or you reached out to me, or got acquainted with me through my Medical Properties Trust reporting.

ConvergenceRI: Yes.
TKACIK: And, obviously, Rhode Island averted, very courageously averted, having any of your hospitals sold to this Medical Properties Trust, [which has operated] more like a ponzi scheme, it certainly appears that way.

[Editor’s Note: And, we are off to the races, with Tkacik ‘holding serve’ in the interview for the next 20 minutes.]

Certainly, it appears that way. It is truly a mystery to me. It seems so very obvious, that this was an insolvent company that is fudging its numbers by engaging in all of these incredibly nonsensical, off-the-books transactions.

And, you know, the only way the majority of its tenants, the majority of its assets, the only way that the operators of those assets are paying the rent is by extracting loans from Medical Properties Trust.

This is very classic fraud, and it seems inevitable that this is going to blow up, but in the meantime, this house of cards that has been built, has devastated hospitals across the country.

It’s left them without money to buy gas for their ambulances, forced them to shut down their maternity wards, [left them] without money for PPE during COVID. They are not paying their dialysis providers; they are not paying their doctors, all with unbelievable real-world implications. It’s killing people, it’s destroying communities.

You know, it’s traumatizing the health care workers who are forced to work under these conditions. And, it’s a fraud. It’s clearly defrauding the shareholders, by the way. And yet, I haven’t caught wind of any enforcement, whatsoever. I mean, there might be some kind of FTC investigation into their accounting. Why haven’t they been raided by the FBI?

You know, it’s seems like very, very low-hanging fruit, the lowest hanging fruit that you could find.

Not only that, but the founders of Medical Properties Trust buy a lot of distressed hospitals that are owned by private equity firms. One of the founders of this company was indicted for his role in the collapse of HealthSouth, a Bush administration-era accounting scandal that occurred around the same time as Enron. There’s a lot of history there. [Editor’s Note: The headline, “SEC Alleges HealthSouth Faked $1.4 Billion in Profits,” appeared in The Wall Street Journal, on March 20, 2003.]

Again, it’s very low hanging fruit, and I haven’t seen any signs of enforcement. Or seen any interest from law enforcers. At this point, it doesn’t surprise me. Because, in doing stories since the pandemic, when I started writing about health care, every time I do a story, the theme of the stories, everywhere I look, there seems to be organized criminals. Some of them are richer than others; some of them are a little more sophisticated than others. But it seems like so much of health care is absolutely controlled by an organized crime syndicate.

And yet, I see so little, so little law enforcement interest in going after any of this. And, [some of] these [cases have involved] nursing homes, even worse than hospitals.

Yesterday [June 21, 2023], Gretchen Morgenson of NBC News, she is Pulitzer Prize-winning journalist, she published a story about HCA [Healthcare, the nation’s largest hospital chain with 182 hospitals, that earned $5.6 billion in profits in 2022], alleging that they were improperly, unethically channeling patients into hospice care to get the deaths off their books.

These were patients who had DNR [do not resuscitate] or specifically patients who were on death’s doorstep, [that HCA Healthcare] were pressuring doctors to get those patients healthy enough to put them into hospice care, so that they could get the deaths off their books, to massage their mortality rate. [Editor’s Note: See link below to story, ‘You’re not God’: Doctors and patient families say HCA hospitals push hospice care.”]

She got 27 doctors to tell her, to basically corroborate this story. Only one was enough of a glutton for punishment to be interviewed on camera. But 27 doctors tell you something, right? It tells you that there are lots and lots of physicians who are trapped in this system, this broken system of corporate health care that has emerged over the past decade or so, as private equity has infiltrated the business. Doctors are trying to sound the alarm; they are in a rough place, especially if you are a doctor in Florida, for example, where HCA has almost 50 hospitals. You know, you don’t want to get on HCA’s bad side.

Identifying the problems
During the interview, Tkacik sought to distinguish the differences between some of the unseemly practices allegedly conducted by large health care systems in the past – the sins of “over-billing and under-staffing, over-utilization, the scheduling of unnecessary surgeries, and the prescribing of unnecessary drug regiments,” from the current plague of alleged corporate misdeeds. Today, according to Tkacik, “It’s really gotten to a different level.”

TKACIK: There is so much disinvestment. So much extraction, and so much disinvestment. Now, it’s really hospitals getting out of any business whatsoever. Maybe they have an ER, maybe [they are] doing some orthopedic surgeries, maybe having a cardiac cath lab.

A lot of hospitals are being slashed; maternity wards are being slashed. They are really getting out of a lot of the bread and butter about what hospitals are supposed to do. Essentially, they [have become] these empty buildings with emergency rooms – really, really packed emergency rooms attached to them. And, they station nurse practitioners and physicians’ assistants in these Emergency Room waiting rooms, and they go through the patients. And, they figure out who has insurance, and then they administer unnecessary tests, and then they bill them for it, and it takes hours and hours to see a doctor, and a lot of these patients go home, but they get billed anyway. It’s really, really sick [emphasis added].

Distressed and distressing
The anger in Tkacik’s voice kept welling up during the interview, as she described the situations her reporting has encountered, unaware of the irony in her statement: “It’s really, really sick.”

TKACIK: That’s how they sort of compensate for the fact that they are not delivering babies anymore. They are not doing routine. They don’t have neurology anymore. They don’t have a lot of the services that they used to have. But they have figured out a way to bill. And, that seems to be what a lot of health care systems, what a lot of distressed hospitals, a lot of the secondary and tertiary hospitals have really devolved into – and again, it’s not like this is legal, really.

There are laws about the practice of medicine, there are all kinds of laws about defrauding Medicare, and Medicaid, there are all sorts of laws that are anti-trust laws… There are all kinds of laws that they are [allegedly] flouting, but there is no enforcement interest in doing anything about this. And, I don’t understand exactly why.

I know that there is an interest in the Biden Administration in reviving anti-trust and in clamping down on corporate abuse of power. I think in health care, the system is so complicated, that you have to spend a lot of time, figuring it out, in how to enforce the law.

I remember reading, at one point, back in the 1990s, when the FBI was investigating HCA, in what I think was still the biggest Medicare fraud investigation and settlement of all time, they had a thousand agents on that case. They did raids on something like seven or nine of their hospitals and intervened in something like 36 whistleblower cases. That’s a huge allocation of resources.

When the threat of terrorism overtook the threat of fraud
After Sept. 11, 2001, when the threat of terrorism became paramount, federal resources that may once have been directed at uncovering fraud in health care were shifted, according to Tkacik.

TKACIK: HCA settled, and there was never any criminal trial. They threw [U.S. Sen.] Rick Scott under the bus. And, basically, called it a day. There wasn’t any sort of major victory for law and order, but it was something. I think that it deterred a lot of bad behavior for a while. I think that the prosecution of Jeff Skilling and Ken Lay and lot of other corporate fraudsters in the aftermath of the Enron collapse had a deterrent effect for a while.

But that deterrent is over. Today there is an environment of complete impunity. And I think that the environment for fraud in health care has become even more intensified.

ConvergenceRI: Except in Rhode Island. We are very lucky that AG Neronha…
TKACIK: [interrupting] …That’s a good point. Your attorney general has been the lone voice in the wilderness that has said, on television, I have seen him say on television [CBS News] that Attorneys General need the authority to block hospital buyouts, leveraged buyouts by private equity firms.

Now, it’s surprises me that they don’t have that authority already – or that they can’t seem to find it. This is something that sort of frustrates me, because in the antitrust world, from having been [conducting] this research, [it seems to me] that the application of anti-trust law in health care has almost done more harm than good. …If you kept the corporations out of the practice of medicine and dentistry, you would have a much more competitive environment in those industries.

Progressive myopia
The problem with the way hospitals have been allowed to be swallowed up in mergers, Tkacik argued during our interview, can be difficult to comprehend – unless one can navigate through the weeds of anti-trust laws, and regulations that seek to protect consumers from hospital mergers – whether “the hospital merger is going to geographically overlap the system.”

TKACIK: They have really enabled the growth of a lot of these national [consolidated hospital chains] like HCA, …by focusing, when they look at these hospital mergers, whether the hospital merger is going to geographically overlap the system. And that really enabled HCA to grow to be really massive in Florida, to the point, [where] they had billboards up touting the fact that no matter where you were in the state of Florida, you’re 15 minutes from a HCA hospital. …There needs to be a rationale for blocking mergers, even if they don’t fall into the cookie-cutter approach.

ConvergenceRI: Have you done any research into Optum?
TKACIK: I’ve done some. What I have found has been troubling. We’re working on issue on health care in August… One of the stories that we have lined up is about UnitedHealthcare.

ConvergenceRI: You may want to look at Optum. As you know, Optum is a for-profit, totally owned subsidiary of UnitedHealth Group. And, under the Managed Care Organizations for Medicaid in Rhode Island, Optum controls the management of behavioral health care for the two largest MCOs, UnitedHealthcare, and Neighborhood Health Plan of Rhode Island.

Some 90 percent of all the claims for behavioral health, as part of Medicaid managed care in Rhode Island, are being managed by Optum, which, to me, appears to be a clear conflict of interest.

[Editor’s Note: As of March 2023, there were some 365,000 Rhode Island residents receiving Medicaid as their health insurance plan – more than one-third of the state’s population.]

Optum also recently bought out the largest independent physician group in Massachusetts, Atrius Health…

Above the radar screen
In the three weeks following the ConvergenceRI interview with Tkacik, more and more attention has begun to be focused on the for-profit Optum and its future role in health care, making the question I asked Tkacik prescient.

A story in The New York Times, published on July 10, posed the question in its headline: “Who Employs Your Doctor? Increasingly, a Private Equity Firm.”

In the body of the story, the reporters wrote: “Hospitals and insurance companies have also bought out many independent physicians’ practices. Optum [emphasis added], an arm of the publicly traded UnitedHealth Group, which also owns one of the nation’s largest insurers, employs roughly 70,000 physicians. Studies have shown that these types of concentrated ownership of doctors in a given market are also associated with higher prices.” [See link to The New York Times story below.]

Three days earlier, on July 7, author Aileen Weintraub voiced her displeasure on Twitter regarding her health care encounters with Optum: “Appointment with kid’s doc and took 3 hrs of trying to get through the automated system at @Optum to get a live person and then their computers didn’t send over the script, 3 pharmacies later the meds are $189 b/c of another glitch. Like is this actually the state of Healthcare.”

A last question about collaboration
The interview was winding up, and ConvergenceRI promised to send Tkacik some previous stories about Optum and reporting on R.I. Attorney General Peter Neronha.

ConvergenceRI: Do you know Hannah Levintova, by the way?
TKACIK: No. Who is Hannah Levintova?
ConvergenceRI: She is an editor and reporter with Mother Jones, working on private equity financing. Like yourself, she is talented and tenacious in her reporting about the problems with private equity financing.

There should be more opportunities for health care reporters to collaborate.
TKACIK: I concur, 100 percent on that. We should be collaborating all the time.

Coming Next Edition: An in-depth interview with R.I. Attorney General Peter Neronha.