But Banner executives began to worry about EHR’s independence when the firm was acquired in 2010 by UnitedHealth Group, UnitedHealthcare’s parent.
“It does seem as though there is reason for concern because they can use our own information against us,” said Dennis Dahlen, CFO of the Phoenix-based Banner.
Critics call United’s ownership of EHR a troubling conflict of interest that could give it confidential information about rivals as well as patients and limit EHR’s power to demand payment from its much larger corporate sister. “How is that ownership going to affect the mission of a company whose business is to extract more money from payers?” said Scot Silverstein, a physician and specialist in medical software and patient records at Drexel University. “Imagine going to a plaintiff’s lawyer to take your malpractice case and not knowing that plaintiff’s lawyer actually works for the hospital that you’re suing.”
The problem isn’t limited to United.
As insurers eager to add revenue streams convert themselves into diversified health-services companies, they often buy traditional business adversaries, including physician groups and hospital consultants such as EHR. They’re also buying technology companies and research firms that serve medical-care providers, raising questions not only about independence but about the privacy of patient information.
“I am not convinced that, even with proper disclosure, that an entity owned by United could aggressively advocate against United’s interests,” said Mila Kofman, a Georgetown professor who was Maine’s insurance superintendent.
United says it maintains rigorous separation between its insurance wing and the health-services companies.
“We continue to grow and strengthen our relationships with hospitals,” said Thomas J. Mercer, EHR’s chief executive. “We earn our clients’ trust by adhering to the highest ethical standards, and our client agreements contain confidentiality restrictions which preclude us from sharing their confidential information outside of EHR.”
One client satisfied with EHR’s work is Bethesda Healthcare System in Florida.
“They operate under separate umbrellas,” since United took over, said Joanne Aquilina, its chief financial officer. “They work with all our payers in making sure we collect every dime. They’re very careful about the information they’re collecting and making sure it doesn’t get back to the United side.”
Complications of diversification
Even so, United’s ambition to diversify has brought complications. This year, one of its newly acquired doctor networks, Monarch HealthCare in California, was accused of acting as a sales force for United’s insurance company, recruiting members from rival plans. Three years ago United agreed to a $350 million payment to doctors and patients and a $50 million deal with the New York attorney general to settle allegations that it rigged a database to underpay doctors.