In July 2020, US healthcare multinational UHS Delaware reached a $117m settlement with the US federal government as the result of an investigation by the FBI into fraudulent detentions of psychiatric patients for profit. However, there may be implications for its UK arm – Cygnet healthcare, which operates services for the NHS.

UHS: fraud against the public purse

Following the resolution of the investigation and civil settlement, UHS must retain an independent monitor selected by the Office of Inspector General within the US Department of Health and Human Services, who will monitor patient care protections. In addition, an independent review organisation will annually audit UHS’s claims to federal healthcare programmes.

This successful litigation by the US government against the disgraced healthcare multinational revealed major corruption in the provision of mental health services that might even extend to psychiatric hospitals in the UK.

The practice of systematised embezzlement of the state and taxpayer, through fraudulent acquisition of vast subsidies out of the public purse, is possibly mirrored by the operations of UHS’s UK subsidiary, Cygnet healthcare.

As well as constituting major fraud, the practice also results in flagrant violation of patient welfare and human rights. Deliberately prolonging detentions far beyond the period of medical necessity for profit is categorically arbitrary detention, human rights abuse with a pretense of due process.

The US government claimed and successfully proved that UHS, knowingly and deliberately, submitted false claims to Medicaid for services that were not medically necessary, including improper, excessive lengths of stay – borne of failure to properly discharge patients when they were well enough – and the admission of patients whose conditions were not severe enough to warrant that level of care.

UHS owns nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioural treatment facilities in the US, with a front group in the UK in the form of Cygnet healthcare.

Cygnet healthcare

Much has been written about the scandals embroiling Cygnet healthcare and it does not enjoy a good reputation. Journalists – notably Ian Birrell – have exposed how the Cygnet CEO and board of managers are upping their – already astronomical – salaries in the context of severe organisational failures they directly preside over, failures that leave the vulnerable people they “care” for sicker, abused and in some cases, dead.

Other investigations, including documentaries by BBC Panorama, have exposed the widespread use of cruel and unusual punishment, in which physical and chemical restraints, supposedly a last resort option implemented on a case-by-case basis, are normalised, standardised procedure, even when the patient poses no threat, accompanied by boasts from abusive nurses about the damage they inflicted captured in undercover footage.

Investigations like BBC Panorama documentaries exposed Cygnet staff’s widespread use of cruel and unusual punishments. The company has allowed the use physical and chemical restraints by staff to become normalised. Staff restraining patients should be their last resort option, that they implement on a case-by-case basis. These incidents were accompanied by abusive nurses boasting about the damage they inflicted on patients who posed no threat to them. Undercover footage captured all of this.

Obviously this is fearless journalism worthy of plaudits, and a welcome throwback to an era of public interest journalism seldom found today. However, as someone who has both been a Cygnet patient and has also extensively investigated the company for many years, I feel the existing body of journalism falls short of outright accusing them of human rights abuse when the evidence is compelling.

Institutional cultures

Worse still, it is a manifestation of an institutional culture of human rights abuse which operates as a cross border flow, making it human rights abuse on a global scale, even and especially in the west. There is a moral imperative that this injustice be recognised and that the people presiding over it face ostracism and retribution.

As well as locking people up for no reason other than profit, UHS was also accused of failing to provide safe, adequate care standards, improperly using physical and chemical restraints and seclusion. In the context of compulsory mental health care, principles of best practice place a high value on care standards that are least restrictive.

UHS and Cygnet’s conduct in following practices that were improperly, nay unlawfully, restrictive led to unjustifiable deprivation of liberty, occasioning systematic violation of patients human rights.

“Illegal inducements”

The Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division said of the matter:

The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements… The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.

Byung J. “BJay” Pak, U.S. Attorney for the Northern District of Georgia added:

Illegal inducements should never play a role in a patient’s decision regarding treatment, especially when a patient is seeking care for addiction and other behavioral health needs… Our office remains committed to pursuing unlawful arrangements that undermine the integrity of federal healthcare programs.

A scandal of these proportions raises urgent questions about the ethics of predatory corporate healthcare. It ultimately makes the case that multinationals with a commitment to care for vulnerable patients – entrusted with their health, safety and rights – should at least be subject to democratic oversight and, arguably, disbanded and profits seized and redistributed, ideally invested in the NHS.

Neoliberal restructuring = profit before patients

In the aftermath of neoliberal restructuring of public services, which watered down regulatory powers, there is a dearth of scrutiny, affording multinationals broad latitude in determining which care ethics constitute best practice, with them tending to deviate from legitimate, mutually agreed upon standards.

Secretive, opaque corporate governance structures lead to cultures of impunity that reward failure and disenfranchise patients who are the ultimate victims of this vast organisational dysfunction. It was only because of the courage of internal whistleblowers that the malpractice was brought to light and they did not go without substantial threats from the company intending to suppress their concerns.

The lure of lucrative profits compelled UHS and its subsidiaries to behave in ways that abused the very communities it is meant to serve and empower, violating medical ethics and the Hippocratic Oath. The scandal makes the case that healthcare should be a public good, rather than an object of corporate profiteering and vanity project of venture capitalists. Healthcare should be a public not a private asset.

Longstanding, outgoing UHS CEO Alan B. Miller realized $348,083,919 in total compensation, and the company boasts annual profits of $10bn. The primacy of the profit motive led to a devaluation of ethics and proliferation of practices that violated the public interest.

Far from being an isolated incident of malpractice, the scandal represents an endemic culture of calculated, cynical opportunism in the company, which took advantage of a system that is supposed to serve the public, not business. State healthcare beneficiaries expect a service that is reasonable and humane, instead destined to become dehumanised objects of profit.

Right-wing healthcare feeding off neoliberalism

The systematic illegality and corruption of UHS’s operations make it illegitimate and unfit for public service and the same could be said of Cygnet.

Documents pertaining to the criminal investigation into UHS reveal that they – albeit unsuccessfully – attempted to suppress evidence of their misconduct in court, showing them to be uncooperative with the investigation and attempts to realise justice, fundamentally untrustworthy. Cultures of abuse thrive on secrecy and it’s evident that all throughout the investigation UHS sought to prevent their crimes being made public, in order to protect their power and privileges.

These are the actions of a company whose operations are based on cynical calculations of self-interest rather than a principled desire to serve the public good.

UHS CEO Alan B. Miller’s extracurricular interests as a member of the board of directors for the Republican Jewish Coalition raise further questions about the power of a venture capitalist lobby representing the private healthcare industry in politics and policy.

His strong ties to the Republican party suggest he supports policies of deregulation and privatisation, a vested interest which serves to enrich him and liberate UHS from public oversight. His presence in politics suggests he has used his lobbying power to influence policymakers to pass legislation that is beneficial to UHS’s profit agenda, corrupting the democratic process.

Under his leadership, in 1986 UHS created Universal Health Realty Income Trust, the first REIT in the healthcare industry, mixing healthcare provision with real estate. It seems inappropriate for a healthcare provider to moonlight in real estate. In April 2014, UHS announced the acquisition of Cygnet healthcare for $335m, extending its operations into the UK market, where it has generated equal practices of abuse as in the US.

Cygnet: investigate it, too

Cygnet’s franchise model means it has the same mode of business operation as a McDonald’s. In the context of questionable behavioural therapies, which seek to reform patients, this means that patients are dehumanised and become reconstituted, a product.

Fraud and abuse in the corporate healthcare market is not broad public knowledge, making reform seem like an impossible task. With exception of the media investigations I have already referred to, there is a dearth of substantial and sustained investigative reports into the corruption. The scale of the problem suggests nothing short of a public inquiry is necessary, and legislation to subordinate the corporate healthcare market to democratic governance structures.

William M. McSwain, United States Attorney for the Eastern District of Pennsylvania said:

Quality mental health treatment is critical for the patients who place their trust in the hands of service providers… The allegations involved in this matter — inappropriate billing and inadequate care – have no place in our health care system. Behavioral health service entities must have strong mechanisms in place, including appropriate supervision and oversight, to avoid fraud and abuse in order to ensure they provide the level of care that their patients deserve.

Replicating the litigious success against UHS in America in the UK to get justice for Cygnet victims would be a substantial undertaking, requiring significant political will and a deep, broad coalition of activists with the resilience to withstand the attacks and nasty tactics corporations use to suppress damaging information. The first step is to incept the issue in the public domain with its magical sunlight.

The crux of the issue is that there is a cash pipeline running from the NHS into the pockets of merciless corporate fat cats, washing UK taxpayer money out of the treasury and into the hands of multinationals. This is part of an ongoing process of deliberate destruction of society and the ultimate fate of society depends upon whether we stand against it.

Call me libellous, but impeaching Cygnet would be a good start.

Featured image via Healthleaders Media – screengrab

By Megan Sherman

This post was originally published on Canary.