Private equity-backed tool Data iSight is making billions for insurers and shifting costs to patients
Insurance companies have long pointed fingers at private-equity-owned hospitals and physician groups for driving up health care costs with exorbitant billing practices. However, a tool called Data iSight, backed by private equity, is now helping insurers rake in billions of dollars while passing on the burden to patients.
Data iSight is the flagship offering of cost-containment firm MultiPlan, which has attracted significant private equity investments over the years. With investors like Hellman & Friedman and the Saudi Arabian government’s sovereign wealth fund on board, MultiPlan has positioned itself as a key player in the medical payments industry.
The evolution of Data iSight, which advises insurers on how much to pay for each medical bill, sheds light on the impact of private equity on American health care. A recent investigation by The New York Times revealed that the collaboration between insurers and MultiPlan goes beyond countering predatory billing practices. The tool’s recommendations have led to unexpectedly high bills for patients, reduced pay for medical professionals, and increased costs for employers funding health plans, all while boosting profits for major health insurance companies.
Typically, when an individual covered by an employer’s insurance plan seeks treatment outside the network, the insurer sends the bill to MultiPlan for payment recommendations. Both MultiPlan and the insurer receive processing fees from the employer, with the size of the fees often tied to the final payment amount – the lower the payout, the higher the fees.
Data iSight has become a lucrative asset for MultiPlan, generating substantial revenue for the company. Among the various tools offered by MultiPlan, Data iSight consistently provides the most cost-effective recommendations, resulting in higher fees for both MultiPlan and the insurers.
Despite claims from MultiPlan that its payment recommendations are fair and widely accepted, patients have been left in the dark about the tool’s impact on their bills. Many have found themselves facing significantly higher costs for medical services, with Data iSight being cited in insurance statements as the reason for the increased charges.
As concerns grow over private equity’s influence on medical practices and rising healthcare costs, patients like Mary Lavigne, Nadia Salim, and Andrew Faehnle have experienced firsthand the financial impact of Data iSight’s recommendations. With little transparency or explanation provided to patients, many are left questioning the fairness of the calculations.
The rise of Data iSight within MultiPlan’s business model highlights the complex dynamics at play in the healthcare industry, where profits for insurers and private equity investors often come at the expense of patients and healthcare providers. As the tool continues to shape payment practices and cost containment strategies, the long-term implications for the affordability and accessibility of healthcare remain uncertain.
