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May 16, 2017
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By Kam Sandhu & Ranjan Balakumaran / Edited by Jude McArdle / Video by Clear Blue Films / Images by Peter William Rudd
- Look up the names of people behind all these ventures – UIDAI, NPCI, UPI etc – and you’ll realise that they are the same group of people. The same group of people, a while back, talked about it taking just 100 individuals to change the system. They are trying to do this now – deciding the fate of this country. Usha Ramanathan
India, 2010. A small village in Tembhili, Maharashtra state, is the subject of national focus as Ranjana Sonawane – a 30 year old housewife – becomes the first Indian to receive a 12-digit Unique Identification (UID) number. Sonawane, or 782474317884, is joined in a ceremony with nine others including three children, as they are enrolled on what will become the largest biometrics database in the world.
The Nandurbar district was chosen according to President Manmohan Singh, to prove that this scheme will benefit the ‘tribals’ and the‘needy people’ in the country. ‘Before this, no other country has made use of such technology at such a large scale’, he said, attending the inaugural event with Congress Party Head Sonia Gandhi. Villagers were told the UID scheme will mean access; to welfare, public services, subsidies and rehabilitation provisions. Representatives used buzzwords such as ‘dignity’ and ‘inclusiveness’; this was‘empowerment of the poor’ through a smart card according to the Group of Ministers (GoM).
Despite the excitement of officials and media, there remained confusion among residents. Of the 1400 people in Tembhili village, 432 were Below the Poverty Line (BPL) and not all received cards and numbers, according to The Hindu. There was no school in the area, and work was hard to find. ‘This card cannot do anything’ said one resident. The UID came with no citizenship or domicile rights but was free, voluntary and provided citizens with documents and an identity in the eyes of the state. UID used Iris software, photograph recognition, digital memory, bank details and identity signifiers (name, address, age etc). The BBC reported that the Indian government ‘expected every Indian citizen to be enrolled within four years’, on this voluntary scheme.
‘The moment the enrolment has begun, they have already started talking about cash transfers…They tell a lie to get to where they want to be’, Usha Ramanathan is a lawyer and research fellow at the Centre for Development Societies, New Delhi. She has documented the journey of the UID. ‘I’m so angry about this project…it’s the huge marketing con job of the century and many of us are walking into it,’ she said in a lecture in 2014.
With 1.2 billion people now enrolled (including 99% of over 18s) the numbers speak of success, but this hides a shaky record in security and rising concern over the voluntary aspects of the scheme, very different from the vision sold to the public. In March, amidst a legal case against the government over its infringement of rights and privacy through UID, Ramanathan describes the effects of the scheme on the communities it was purported to help:
‘Coercion, illegality, contempt of court and exclusion have become characteristics by which people recognise the UID project…In just the last 20 days, the government has issued notifications at a frenetic pace making the UID number mandatory in a range of databases. Children are not to get their midday meal if they do not have their UID embedded in the database. Persons doing manual scavenging are not to be rehabilitated – as Bezwada Wilson has been saying all along, what they want is to bury their identity and what they are threatened with is tagging them with this identity in perpetuity. Disabled persons are not to get skill training, or aids and appliances. Women rescued from prostitution are not entitled to rehabilitation until their numbers are in the system – making anonymity the first casualty. No rehabilitation of bonded labour without UID. No anti-retroviral therapy for HIV+ persons without the UID identifying them. And the list goes on.’
There are security problems too. Building the world’s largest sensitive database creates a target for hackers and the stakes are higher with sophisticated levels of ID data converged in a manner not seen on this scale. But leaks are already happening.
The day after Ramanathan’s article in March the Narendra Modi government ‘officially acknowledged’ the identity details of individuals held by the UID/Aadhar system had been leaked. Around 130 million user details were compromised from four government websites; bank details, fingerprints, photographs, names, ages, retina scans and more. Modi’s government ignored previous warnings about security, and earlier that month the Ministry of Electronics and IT issued a statement to say the UID system was safe and secure, in a bid to clarify‘misinformation in the news.’ However, in a letter seen by the Indian Express dated 25 March 2017, the same Ministry confirmed ‘instances’ where information had been made accessible or had entered the public domain, adding that leaks were a serious and punishable offence.
And the system is not always right. Scores of problems with incorrect data mean further exclusion. Some have found their identity already registered, others with only a fraction of their personal data correct. An introducer scheme which allows a person to verify an undocumented citizen’s details has also lead to misinformation, with the onus and cost laid on the undocumented citizen the system was meant to help.
Then there’s the problems with biometric data itself. Ostensibly the ultimate form of authentication, but details have to be updated. Iris and facial recognition identifiers can go out of range as we age and need to be re-set, contradicting the policy that this was a ‘one-off’ exercise. In rural areas, such as the state of Telengana in Southern India, where UID was used for the Mahatma Gandhi Rural Jobs Guarantee Scheme, the fingerprint technology had a failure rate of 36% as labourers in physical jobs experienced changes due to ‘wear and tear’ (this rate has reached 46% in other areas). Iris scanners were not used in Telengana however due to their expense, and this meant workers were denied payments. Associate professor at Jawarharlal Nehru University, Dr Himanshu commented that failure rates of cash machines stand at 0.5%, demonstrating the technology used in biometrics was flawed. Himanshu added that none of the developed countries were using this technology; ‘UK had similar technology like that of Aadhar, but they too have abandoned that completely.’
Still, the government has moved ahead with increasing the scope of the scheme.
Aadher Pay will allow ‘consumers’ to send and receive money to each other using their UID numbers and will also store tax filing records, under the banner of anti-corruption according to the government. Except the justification for UID has already moved many times since its introduction from giving the poor an identity, to de-duplication, to removing ghosts from the welfare system, to now a precondition for the marginalised to access state help. For those same people, now comes a payment ‘revolution’ that keeps tabs on human behaviour more than ever before.
‘IT’S NOT AN INDIAN PROJECT’
Biometric ID Card proposals surfaced in the UK in 2005 under Tony Blair, but were repealed by the Conservative government upon gaining power in 2010. The US was also trialling retina scans and fingerprint ID technology at this time, but abandoned it when tests found the method was still too flawed and ‘unreliable.’ While technology has evolved since then, the introduction of biometric ID is happening most in developing countries like Bangladesh, Kenya and, of course, India at an alarming pace. Ramanathan says this suggests ‘someone is making policies that are being pushed in the developing world.’
Political capture overseas comes into focus too, as Trump rhetoric – against the undocumented, and other marginalised groups – looks set to fill the pockets of surveillance and security companies. The Intercept reported in January that the background of Trump’s team in Homeland Security ‘suggest he will aggressively pursue surveillance using the latest technological advancements,’ including ‘threat detection algorithms, facial-recognition technology, and an expansion of ‘verifiable’ identity solutions both in real life and online.’ Trump’s travel ban for example, was a boon for the technology industry and Silicon Valley is already jumping into the ‘biometric gold rush’ in a little known push to increase use of biometrics at the borders.
L1Identity Solutions, a US company now acquired by France’s Safran Group, has a contract with UIDAI (Unique Identification Authority of India responsible for administering UID) for data capture. On its website, the company advertises its work with the Central Intelligence Agency (CIA). ‘How many of us are aware of L1 Identity Solution’s relationship with Homeland Security in the US on a smart borders project, identifying migrants?’ Ramanathan asks one interviewer, ‘All our information is going to be handed to them.’
It was left to the Supreme Court to tell the Indian government to limit the use of the UID/Aadhar database in 2016, but before the case was over, the 2016 Bill already allowed an almost carte blanche on access to the UID database for private companies.
Clause 57: ‘Any public or private person may use the Aadhar number for establishing the identity of any individual for any purpose’
Private entities such as insurance, real estate, telecom companies, airlines and more may now use UID as proof of identity for any purpose, contradicting the original objectives which confined UID to ‘government expenditure’ and efficiency purposes.
Further, Section 28 (5) disallows an individual access to the core biometric information held about them, despite the problems found with the flawed nature of biometric technology and the numerous mistakes in the system.
Despite complaints, responses and objections, the Bill was passed with no amendments. Before long companies were advertising new apps using UID data.
FUNCTION CREEP AND DEMONETISATION – IS INDIA FINTECH’S BIG EXPERIMENT?
What is function creep? It’s when a technology that is introduced for a certain purpose is expanded beyond its original intent.
‘Now you have used government benefits to jumpstart this thing but, once you create the link between the ID and the bank account, you can then start using it for commercial payments..that would then be a business to person thing. The next step would be person to person.’
Nandan Nilekani, entrepreneur and Chairman of the UIDAI, 2013
On November 8th 2016, an immediate ban on two currency notes by the Indian government removed 86% of cash in the country. Panic ensued as cash machine queues ran into the hours, until they ran dry. Limits were put on withdrawals and the government asked for 50 days before the release of new notes. Over 90% of all transactions in India are made in cash, and this sudden announcement took its toll in various ways on the poor and middle classes, sudden expenses for example (medicines, illness) and rising food prices forced rationing and a depletion of resources.
‘My family slept without food for days’ Monika tells Al Jazeera ‘I will never forget…Demonetisation brought us to the brink of begging for food.’ Monika’s husband worked as a security guard for a private school in Ludhiana City, but the note ban meant the school ran out of money, which left him to work for two months without pay. The family – Monika (who goes by just one name) and their two children aged 21 and 14 – relied on the salary of Monika’s husband for their modest existence in a one bedroom house. Even if they were forced to beg, their neighbours would likely be unable to help, being as poor and stuck in the same situation. Though ATM queues were not an issue, because Monika’s family were one of millions who held no bank account. By February of this year, the family say things have not yet returned to normal with Monika’s husband receiving pay in instalments.
Demonetisation was sold and accepted widely as a bid to tackle India’s black money problem where corruption, tax evasion and the financing of terrorism trade. The two notes removed from tender were the two largest and many defended that Demonetisation would be a good thing in the long run.
This black money market is said to make up one fifth of India’s GDP according to the World Bank (2010). McKinsey and Co, a private consulting and private healthcare lobbying firm, estimated in their 2013 report ‘Forging a path to payments digitisation’ that this figure was actually over a quarter. Still, the method of demonetisation was widely criticised. Did it really have to be done this way? In an interview withCatch in November 2016 Ramanathan explained the secrecy surrounding the method:
‘We still don’t have any explanation by the government about why this was done. Why 86% of the cash flow couldn’t have been phased out strategically. Something as big as this should have gone through Parliament. There is no indication of who advised the Prime Minister about this. On the political front, we only have opposition and justification.’
Ramanathan explained her concerns about the real reasons for the two note ban:
‘To understand what demonetisation is about, you have to first understand what the big technological fight in the world right now is about. It is about data.
New Fintech (Financial Technology) firms are fighting to acquire specific data of individuals, to use it to market their products among other things. Fintechs are willing to give you their services without charges, if only you give them information about yourself. Once you do that, you can build a platform [or an API] for people to create apps, giving them a share of your data.
‘Banks, as we understand them become redundant. You wouldn’t need to visit any bank. Everything becomes virtual.’
On answering the problems with a virtual system, Ramanathan points to the methods of transition:
‘First Aadhar was a voluntary exercise, then it was made compulsory. Aadhar was not mandatory to avail government offered services, now it is…Fears of your personal data being compromised was quite real in the case of Aadhar, in this case there will be additional fears of your financial data being sold and monetised by others…the state is using all its power and coercive forces to lead us in this specific direction.’
ALL DATA IS CREDIT DATA
INTERVIEW WITH BEVERLEY SKEGGS, MAY 2017
What does the phrase ‘All Data Is Credit Data’ mean?
Beverley Skeggs: “It means that every time you use any device whatsoever you’re sending signals about your behaviour that will be used in a model to predict what your credit rating will be, depending on who’s buying that data.”
“It’s being assessed for its value. For some people if its assessed as being high net worth individuals it will be put up for auction and traded. For others it will be traded and siloed in a low net worth category – putting adverts on their browsers for advertisers trying to buy particular data.”
How much do we know about data broker industry?
Beverley Skeggs: “Very very little. They are beyond regulation, they refused to appear before the US Senate or the Federal Commission. I’d say we know very very little about them. They are the real dark side of the net, because they are the people who are compiling, assessing and trading your data. If you are a child born now, they will be assessing your data right from the start. We have no idea what you’re being traded for or what your value is – the literal economic transaction we do not know. I would say they are the most powerful form of classification we now experience.”
When Sociologist Beverley Skeggs began the Values and Value: Facebook Interactions project in 2013, she aimed to paint a clearer picture of how Facebook was able to monitor and use information gathered about you, presumably for targeted advertising. A lot can be gleaned about us from pages we like, searches and even the emoticons we use. The public has also been rather passive in the face of experiments made on us without our permission like Facebook’s test of emotion control through feeds. Still, Skeggs found an even more evolved system than could be imagined.
‘We scraped data for six months. Initially we were looking at social interaction, what we realized through research is that they were tracking people all the time. We could see they were on people’s browser when people turned on their computer or their phone, and not on the platform.’
In December, American site Propublica revealed the dark web between Facebook and data brokers – naming 6 in particular. Facebook made its first deal with a data broker in 2012 – Datalogix, and this was no secret. However, the brokers Propublica turned up – Axciom, Epsilon, Experion, Oracle, WPP, Transunion – largely dealt with financial information.
And while Facebook does say users are able to access this third party information and contact the brokers themselves, the social media company has not always been upfront about its capabilities;
“When we began our project in 2013 they denied [tracking you offline] but the Belgian government took them to court and revealed through computer science departments that they were doing it. They said ‘yes okay we are tracking people when they are not on the platform’ but then [the Belgian government] lost on appeal the court case to stop them tracking people, because [Facebook] operate from Ireland and the Brussels government has no jurisdiction over Ireland. So again, outside regulation and accountability.’
There are data gatherers bigger and brasher than Facebook and they too evade governments and regulation. In 2014, the Federal Trade Commission issued a report calling for Transparency and Accountability from the industry. They found that these companies collect large amounts without consumer knowledge and share it with each other. Together they collect billions of data elements covering nearly every consumer and use this to make inferences about you ‘including politically sensitive ones.’
While the report raised positive opportunities for data collection it highlighted the risk to consumers which follow it, particularly in situations where consumers are unable to access their own data or correct it; data used to make inferences about our identity.
Access to the data is dependent on where you are. Laws in Germany and France are much tighter than the UK, which is better than the US.
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JULIA ANGWIN: WE’RE ONE OF THE ONLY WESTERN NATIONS THAT DOESN’T HAVE A LAW TO SEE THE DATA COMMERCIAL DATA GATHERERS HAVE… COMMERCIAL DATA GATHERERS IN MOST COUNTRIES IN CANADA, IN EUROPE, IN THE UK, YOU CAN GO TO THEM AND SAY SHOW ME THE INFORMATION. AND IF IT’S WRONG YOU CAN CORRECT IT OR ASK FOR A CORRECTION AND THERE’S A DISPUTE PROCESS. BUT WE DON’T HAVE THAT HERE SO I TRIED TO FIND WHERE MY DATA WAS. I IDENTIFIED 200 DATA BROKERS, AND I WAS ONLY ABLE TO SEE MY FILES AT 13 OF THEM.
OF THOSE 13, WERE THEY ALL ACCURATE?
JULIA ANGWIN: NO…OF THE 13 THERE WERE PROBABLY ABOUT 5-6 THAT WERE VERY ACCURATE, THERE WERE ADDRESSES OF EVERYWHERE I EVER LIVED. ONE OF THEM HAD THE NUMBER ON MY DORM ROOM IN COLLEGE WHICH I HAD FORGOTTEN. AND EVERY PHONE NUMBER OF MY RELATIVES, AND ALL SORTS OF THINGS, THEY WERE ALL VERY ACCURATE. THEN THERE WAS ANOTHER CATEGORY THOUGH, OF PEOPLE WHO BASICALLY PEGGED ME BECAUSE I LIVED IN HARLEM, MANHATTAN AS A LOW INCOME, SINGLE MOTHER WITH VERY LOW EDUCATION LEVELS AND THAT’S NOT TRUE.
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But it’s not all about a sharing economy amongst the brokers. Bubbling away in the financial pages is the fight over patents and algorithms, sometimes only to prevent competition from gaining them. This includes Facebook:
“Facebook have the most phenomenal experimental capacity. If you look at their research site you can see they look at drones, face recognition software, semantic software for your tone of voice and they operate as a proper capitalist monopoly company. They buy anything that’s in competition with them and they patent everything they possibly can so nobody can use the data, only they can. They have patented your personal data and you don’t own it anymore.”
Facebook is able to access new kinds of information about us. Images, semantics, friends and networks, what we like. This enables new kinds of decision making, and when married with financial and personal details like name, address etc, this becomes altogether a new kind of economic assessment. For over two years now credit analysers have been looking at how to convert this information into ratings information.Will Lansing, Chief Executive of FICO, said in 2015 ‘If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt. It’s not much but it’s more than zero.’
So is Facebook becoming a credit rating agency?
“Yes. It’s involved in Fintech which is trying to disrupt the traditional banks to offer financial services, which is always very lucrative as we know the money is to be made from fees for financial services. So it will be offering lots of financial services.
“It designed messenger to enable peer to peer financial transactions which will, if you’re doing it from your phone immediately, be much easier than going into a bank and applying for a loan.
“What’s really significant is that Facebook, unlike a bank, knows all about you. They know your friends, they know your behaviour they can predict what you’re likely to do in the future, so they’ll be making assessments of your credit rating on that basis. They just took out a patent a month ago on making collecting data on your social network legal to add to their ratings that they have about you.
“If you think that one of the Facebook founders Peter Thiel set up Paypal to evade financial regulations and made millions as a result. So they have always been into financial regulations. Fin Tech companies they will use their tech to really challenge traditional banks.
Has the UK government lead us in this direction?
‘The Snoopers Charter has basically just sold us down the river. They can do whatever they like now. What you’ve got to think is privacy is now an economic issue. The companies that are tracking you, are doing it for economic reasons. While the government says it’s for security.’
The nature of technological advancement has far outstripped protections in law and ethics, but this lag has been exploited by the tech industry and governments alike as an increasingly close relationship sees the entrance of powers by the coercion and security rhetoric of the state, to the economic benefit of the industry.
Vivek Wadhwa, Indian Entrepeneur and one of the Global 100 thinkers (2012, Foreign Policy Magazine) described in his video ‘The Future is Bright, if we are Cautious’ the upending of companies and life as we know it in the next thirty years as advancement continues, making it possible ‘for us to solve the grand challenges of humanity’, including endless energy, food, and extended healthy life spans.
It holds great opportunity. Potentials in medicine from data sharing mean early detection, prevention and solutions for rare conditions not possible in the world before. 3D Printing and increased personal data technology will enable positive steps in information, education and living standards.
But Wadhwa is also concerned with the ‘dark side of technology.’ In his book ‘The Driver in the Driverless Car’ he compounds the duality we face where the next few years will decide whether technology creates the utopia of less work, greater autonomy and freedom or a hoarding of innovation and equity leading to joblessness, loss of privacy and alienation. With tech companies working alongside and inside of governments to deplete privacy through function creep, protections are low from the former and more harrowing of Wadhwa’s visions.
The lag exists in culture too. Tech companies, including social media platforms such as Facebook, can present themselves as inherently neutral and innovative. Advancements and conveniency are viewed as inherently positive, even where the new players – such as Uber –circumvent worker rights, regulation (see lobbying relationship with David Cameron) and discrimination at the highest levels. Uber too is doing what it can to extend its data capture, illegally and without the notification of its users.
The intent of government is important. Other countries have successfully rolled out ID cards with some biometric standards, like Sweden (which uses fingerprints and photographs). As Ramanthan says ‘The state can do good if it feels like it, but it doesn’t have to if it doesn’t.’ Sweden’s ID card remains voluntary. Meanwhile in the UK, real time online surveillance has been added to a proposed draft of the IP Bill this month.
At the same time, 17 of the ‘leading FinTech firms’ agreed to join UK FinTech Financial Crime Exchange, to tackle money laundering and corruption – professing technology as the solution to the problems of the current economic system, despite its more secretive record until now.
With Skeggs’ research newly released, and the Supreme Court to hear a challenge to the mandatory criteria of UID on May 17th, these stories create a context for the ‘revolution’ and function creep taking place in healthcare.
NHS, OBAMACARE & UNITED HEALTH
WHAT HAS AADHAR GOT TO DO WITH OBAMACARE?
Before Obamacare, insurers had already killed off the Healthcare Reform Bill under Bill Clinton in the early nineties. Paul Starr, a Princeton professor who authored the proposals in 1992, later said ‘the health insurance and small-business lobbies’ were ‘focused unambiguously on defeating change.’ The largest insurer in the US, United Health Group (UnitedHealth) was, for a long time, opposed to any government health plan – a stance that had only strengthened fifteen years later.
According to actuary John Shells, 56% (88 million) of Americans with employer-provided coverage would desert the private insurance market which UnitedHealth dominated, in favour of a more affordable government plan. But UnitedHealth dominated a landscape which saw the highest spend on healthcare and the worst results. In 2008, the US remained the only country in the developed world not to offer universal care.
Nine years on from the electoral mandate that created Obamacare, and UnitedHealth has become one of the greatest beneficiaries of the Affordable Care Act – alongside and above of the same two insurance companies that topped the market previously. How did the relationship change from one of opposition to mutual benefit? Healthcare technology and Data Collection.
UNITED HEALTH GROWTH
Established in 1977, United Health grew exponentially from a small provider among the City’s giants, to dominating US healthcare – now both public and private.
Under the leadership of William W McGuire from 1991, the Group expanded through acquisition. McGuire bought up rival companies and diversified into technology, data analysis and software. This early adoption of healthcare technology was perhaps one of the most lucrative strategies of the last 20 years. By 2008 UnitedHealth’s operating profits stood at $5.3bn with revenue of $81.2bn.
With company acquisitions came more talent, and many CEOs passed through United Health Group’s doors. The intelligence garnered from its purchasing business model was perhaps unrivalled. Many of these individuals went on to drive the company further into technology, further into policy and deeper into government. People like Andy Slavitt.
Before building and selling his healthcare company ‘Health Allies’ to UnitedHealth in 2003, Slavitt was an investment banker for Goldman Sachs and also worked as a consultant with McKinsey and Company, a private healthcare lobbying firm. Slavitt quickly rose through the ranks at UnitedHealth, eventually becoming head of Optum Insight (née Ingenix) – the company’s technology arm. By the time the opportunity in new government infrastructure came up, UnitedHealth had the technology, expertise and leaders to scale up.
This is not to underplay the value of this technology for the new President. When Obama needed to showcase the benefits of a new healthcare system, to avoid the mistakes of the past, he needed to make it tangible. How could he deliver it? Where would he find the money, in a country so big, so divided? What would a new healthcare system on this scale look like? Framing was (and is) so important in America’s culture wars, technology made the difference between labouring under the the stigma of a socialist relic and presenting something inviting, user-friendly and a part of America’s future.
Seeing an opportunity, UnitedHealth began to court Democrats. It’s spend on lobbying activity was highest during 2007-09, according to the Centre for Responsive Politics (approaching $5m for each of those three years). Chad Terhuhne and Keith Epstein, in an extensive report for Bloomberg in 2009, described ‘shiny 18-wheelers outfitted with high tech medical gear near the Capitol, inviting members of Congress aboard their ‘mobile diagnostic centre’’ while laws were being discussed inside the White House. These once polarised factions were increasingly comfortable in each other’s spaces.
JUDAH C. SOMMER, WHO HEADS THE COMPANY’S WASHINGTON OFFICE, LOOKED ON WITH SATISFACTION. “THIS PUTS A HALO ON US,” HE EXPLAINED. “IT HUMANIZES US.”
Sommer headed up global lobbying for Goldman Sachs before being hired by United Health to run their office in the Capital in 2007. He then assembled a new team stacked with his contacts, operating from an office between the White House and the financial district.
As Head of Technology, Slavitt got closer to Obama and in 2009 he was appointed to the position of Administrator for the Centre for Medicaid Services (CMS). This was a federal agency previously known as the Health Care Financing Administration (HCFA). The position commanded 6,000 employees tasked with carrying out Medicare services. When Slavitt left his position at United Health he divested all shares in the company (a move which he defends as perfectly legal). To do so, he was granted an ‘ethical waiver’, allowing him to avoid a one year mandatory delay before taking up his new position. It also meant Slavitt avoided paying capital gains tax on the 23,711 shares of the United Health Group stock he sold, netting him $4.8m tax free, according to the conservative site, The Daily Caller.
With the insurers well and truly on board (and their expert lobbyists and PR contacts) the industry was able to mould the reforms even further into their own designs; it’s hard to see any losses on their part. It made inroads into government for UnitedHealth, while killing off terms that posed the greatest threat to the insurance industry, including the creation of a public service model (like the NHS) and a proposed tax on insurers to pay for Medicare. Bloomberg concluded that the ‘success’ of the insurance giants (UnitedHealth, Wellpoint and Aetna) in shaping the terms of the debate during the time Obamacare was being drafted, was such that ‘no matter what specifics emerged’, the insurance industry would become more profitable.
And while Democrats were wooed with the potentials of IT, UnitedHealth was already frontrunning its capabilities in technology fraud.
INGENIX AND OPTUM
In February 2008 (during UnitedHealth’s ramped up lobbying period), New York Attorney General Andrew Cuomo announced he would be extending an investigation into Ingenix, the $1.7bn data and technology arm of UnitedHealth, now known as Optum Insight. Ingenix analysed data, outcomes and billing information of consumers, and through an algorithm set the ‘reasonable’ industry standard rate for expected payouts for insurers.
‘This involved fraud in the hundreds of millions of dollars, affecting thousands and thousands of families’, Cuomo said. ‘We believe there was an industry wide scheme perpetrated by some of the nation’s largest health insurance companies to defraud consumers.’
Ingenix had been fixing the algorithm, so that insurers paid out less than what would be considered reasonable by law – seeing some patients pay almost 70% of their out-of-network medical visits. Cuomo prosecuted the company. ‘It has gone on for many, many years – over the course of a decade,’ he said.
Linda Lacewell, from Cuomo’s healthcare taskforce described UnitedHealth’s use of data as ‘deception, manipulation of data and outright fraud.’
Ingenix was forced to stop production of the database, and after a few months changed its name to Optum Insight, denying this was because of the price manipulation scandal.
Still, this didn’t stem UnitedHealth’s gradual influence of the terms and standards of the ACA (Affordable Care Act).
It was Simon Stevens (now Head of NHS England) and colleagues that urged US government for a ‘more industry friendly’ ratio on payouts. Stevens called for a reduction from a 76% reimbursement rate (with patients picking up 24% of the bill) to 65%.
Soon enough, the trust of politicians once courted by UnitedHealth began to erode with some concerned the insurance industry was under-playing the windfall they were set to receive from the Reforms.
QUALITY SOFTWARE SERVICES INC (QSSI)
When a contractor was pulled from the construction of Obamacare’s website healthcare.gov in 2013, a subsidiary owned by UnitedHealth was drafted in and handed the entire operation.
The bland sounding Quality Software Services Inc were first tasked with the software handling personal information (verifying income, identity details). All very valuable and useful data, but that wasn’t what attracted UnitedHealth to buy the subsidiary.
The Maryland firm had just been awarded a public contract to construct an interchange service within Medicare. This would be the exchange on which healthcare insurers bid for plans. QSSI’s contract was far reaching in powers, leaving them with the responsibility to certify, decertify and take action against delinquent insurers. This small but experienced outfit apparently knew the worth of its new asset and they became open to a buyout. Ironically, when they were taken up by Optum, it wasn’t declared to the Securities and Exchanges Commission.
Some were concerned about help from the inside. Steve Larson, Director of the Center of Consumer Information and Insurance Oversight (CCIIO) enabled the deal and also left his post in 2012. Also to join Optum.
This incestuous web, or capture, is difficult to keep up with. Here UnitedHealth would be in charge of the exchange where insurers, of which they are the biggest one, bid to sell healthcare plans. They would be able to decertify those they deemed ‘not fit’ and were even responsible for remedial action against those not ‘following the rules’ – despite regularly not following the rules themselves.
Slavitt even faced Congress in 2013 over QSSI’s failure to deliver on its healthcare.gov project. This was in place of the company’s three managers, Bikram Bakshi, Tony Singh and Kawaljit Singh. Bakshi now heads up the UK’s technology arm of UnitedHealth.
During the hearing, Slavitt blamed his own CMS department for the failings, despite complaints from Democrats and Republicans that the company had given false promises in the weeks leading up to healthcare.gov’s beleaguered and troubled launch.
FROM GAMBLING TO GOVERNMENT – QSSI AND BIOMETRICA
QSSI, the UnitedHealth subsidiary tasked with the Obamacare website fixes, was founded in 1997 by Kawaljit ‘Tony’ Singh. Offering expertise on security, privacy, software and IT, Singh grew the company into an enterprise used at federal, state and private sector level before its multi million dollar sale to Optum Insight/UnitedHealth in 2012.
Singh’s investments and companies span tech, digital marketing, hospitality, real estate and biometrics.
As Chair of the board at Biometrica Systems Inc, a growing outfit increasingly responsible for large scale federal projects, Singh has advanced technology marrying statistical analysis and biological data. Biometrica developed its services for casinos, heavily focused on understanding physical behaviour and advanced surveillance – facial recognition, eye movement, and profiling.
Of course the company is already diversifying, moving further into retail, security and federal contracts.
Under the Law Enforcement page on Biometrica’s website the company boasts of its services which can ‘quickly provide identities of suspects, check validity of documentation, conviction and arrest history, and facial recognition in real time.’ The company says it provides access ‘to what should soon become the world’s largest private, encrypted, and law enforcement-verified facial recognition database of felons, arrestees and sex offenders.’
Access to the database is available to private individuals and businesses too as services include ‘the ability to run operational real-time facial recognition scans of any individual on their property’ and ‘a secure, convenient mobile app that allows any of a client’s employees with access to it to run an immediate scan on a suspicious known or unknown person with a couple of clicks.’
Debates on the ethics of these advancements remain elusive, while technology changes how law enforcement do their job. In Baltimore in 2015, police were found to be regularly flouting the warrants needed to perform cell tower interception in cases ranging from murder to petty theft. The collect it all data strategy brought in under the auspices of terrorism and The Patriot Act have been repeatedly found to be abused by law enforcement for more trivial crime. While Republicans snatched back the Collect It All bill from the jaws of defeat, after years of objections and responses from privacy and human rights groups, the same party is waving through the distribution and retention of this data to data brokers and now, Internet Service Providers (ISPs).
What will increasing enforcement surveillance do in a country that already has the highest incarceration rates in the world? In the wake of the 2016 US election, most Americans (53%) held the the incorrect perception that crime had risen over the last decade – a misconception many say played into the hands of Trump. Crime was in fact on a consistent downward trend, but the results of the poll conducted by Huffington post and YouGov last year demonstrate that these perceptions are created through consumption of news and media.
With politicians playing a game of oneupmanship with severity on crime regardless of statistics, the penal system, described as ‘The New Jim Crow’ in Michelle Alexander’s seminal book, threatens to ferment further under new powers for the law.
Singh is joined on the board at Biometrica by member Alexander Eatedeli – a Director at Vonage, who handle phone networks, conference calling and VOIP systems. Eatedeli carries an impressive track record in IT consulting, integration and and work with ‘IrisGuard’ – biometric technology that pioneered iris recognition development and applications for use in homeland security, banking and finance.’
In 2016, Wyly T Wade – a company advisor to Biometrica for 2 years, was appointed CEO and president of the company. Wade’s bio states he ‘has almost certainly collected more biometrics across more countries than any single individual in the world.’
His life reads like that of a Disney technology prodigy. By the age of 10 Wade published his first video game for his friends by writing the code himself. As a teen he was able to remove a bug in IBM’s Lotus 4 Notes release – apparently leading Lotus executives to pay for Wade’s education at Harvard’s Kennedy School of Government.
In the mid 2000s Wade was Chief of Technology at Holliston – the US Passport maker. Here he helped to develop the biometric standards of US passports and advised on the use of chip technology. In 2008 Wade took on his biggest project to date – the world’s largest biometrics program with more than 1.2 billion people now enrolled, in India.
UNITEDHEALTH AND THE UK
Since the coalition took power in 2010, there has been outright denial of NHS privatisation as it happened. Both Nick Clegg and David Cameron said ‘they would not privatise the NHS’ nor implement any ‘top down reorganisation.’ It was a matter of weeks before the Health Minister Andrew Lansley announced his intent of doing exactly that in a reorganisation so large, according to Sir David Nicholson ‘it could be seen from space’ – the Health and Social Care Act of 2012.
A court ruling found the government had mislead the public on reforms and were continuing to do so by refusing to publish the risks attached to the changes. Concluding that the ‘risk register’ had profound public interest and should be made public, the Information Tribunal said:
According to Full Fact the Act formalised the relationship between the public and private sector. Primary Care Trusts (PCT) would be converted to Clinical Commissioning Groups (CCG) who were required to tender their services and work with the private sector.
SIMON STEVENS
Simon Stevens was appointed Head of NHS England in 2014. After leaving a Tony Blair-led government where he acted as advisor and‘architect of New Labour’s marketisation of the health service’ (think PFIs), Simon Stevens worked for United Health Group. Between 2006-2009, Stevens was Chief Executive of Medicare before being promoted to Vice President, a position he held from 2009 to 2014.
In February this year, the Department of Justice (DoJ) joined a lawsuit to sue UnitedHealth for fraud on allegations that the company overcharged the US taxpayer to the tune of hundreds of millions – ‘likely billions’ – of dollars, over a number of years, through its administration of Medicare services under Obama’s Affordable Care Act (ACA). The DoJ along with other prosecutors say United Health Group did this by claiming patients ‘were sicker than they were.’ The fraud took place during the years of Stevens’ employment.
Under the name Optum, UnitedHealth regularly competes alongside new healthcare giants Virgin Care and Interserve for NHS contracts, while Simon Stevens pushes through more opportunities for the private sector. Optum is here in the technology too. UnitedHealth’sScriptSwitch is ‘the UK’s leading provider’ of prescribing support software used in 7,500 GP surgeries.
BRISTOL AND OPTUM
In Bristol, Optum had been working closely with the Primary Care Trust for nearly a decade by 2014, when it renewed 180 Clinical Commissioning Groups (CCG) contracts for £50m. In the press release, Optum was the only organisation shortlisted in every mental health contract.
When the contract was won, Katherine Ward – Senior VP of International Business Development at Optum UK, said ‘We are delighted to have been selected to continue our service to Thames Valley and Wessex NHS CCGs, and to continue to help them deliver a high quality service while reducing costs.’ Optum claimed to have delivered £23m of efficiencies since 2009.
Ward knew Bristol well, having worked for four years at the local PCT before joining United Health’s Optum as a Programme Director in 2006. She has taken on various roles at the company since, acting now as Chief Growth Officer since March 2014.
That same year, Ward participated in an Optum sponsored roundtable and article in the Guardian – regarding the need for further preventative integrated care in the UK. ‘Experts were told’ at the event that Britain was on the verge of a ‘revolution in integrated care.’ Optum’s Nancy Williams stated that technology was at the heart of this, and that instead of reacting to patient care, ‘healthcare providers needed to take a step back to intervene before health issues took hold.’
Less than two years later and the ‘revolution’ seems to be in motion under Simon Stevens’ plans. Muted by its confusing title, STPs push inequity straight into the health service.
Sustainability and Transformation Plans (STPs) put further pressure back on Local Authorities while they are hit by central government cuts. It creates inequity based on postcodes, and is starting to catch people out.
At the time of their announcement, NHS England said STPs would be an ‘enormous opportunity for the private sector.’
Criticisms say the plans are able to force through contentious cuts, which disproportionately affect certain communities. Further, it would remove local accountability and generally be less transparent.
Open Democracy reported in July 2016 that these moves were so secret, in North West London council leaders were urged to sign a two page summary of the local STP ‘without seeing the full document.’ The text, unfinished and confidential, had apparently changed vastly in its many drafts and covert discussions to ’51 densely packed pages containing repeated commitments to hospital closures.’
This was the ‘revolution’ discussed at the roundtable. It seems the model insurers are pursuing comes with buzzwords ‘integrated care’, ‘community services’ and ‘preventative measures.’ It would decrease the use in hospitals, and public money would be given to insurers who are incentivised to keep people out of hospitals encouraging closures, despite already having the second lowest number of beds per capita in Europe. For those who do need hospitals, treatment could be more difficult to find and charges may be placed here. ‘Integration is extremely dangerous’, NHS Dr Bob Gill told Real Media in March, ‘They want to integrate the budgets.’
Some are already waking up to charges. In Dorset, a GP offering patients the opportunity to skip the queue at a price of £40 for 10 minutes, £80 for 20 minutes or £145 for 40 minutes is the first known example of what may be to come.
Further, Gill describes how data collection exercises, at the expense of the patient are already being tasked to doctors:
‘Screening for dementia in people who are over 65 is a very poor test, it has lots of false positives – so that means patients are labelled demented when they don’t have the condition – and that induces a lot of worry and concern which over time has proven to be unnecessary. But what we’ve been asked to do is collect data on behalf of the future runners of the NHS which will be the insurance industry, so they can set premiums accordingly.’
The difference in the public’s trust of the NHS and the American system is significant. The relationship we associate with insurers can be very barbed, and can come with the expectation of fabrication on both sides.
As Trump shows, dependent on politics, the public is forced to play a rigged system. Healthcare insurance can mean that income determines whether what you pay for security is a gamble or a guarantee.
Now moving from its 65 year tradition, reforms and STPs are catching people out of the NHS’ no longer universal provisions, as smoking cessation and weight loss help are the first to go, and some have been turned down for treatment where private companies say they have fulfilled their quota.
MAKING REVOLUTIONS MANDATORY
At the start of 2017, the Financial Times reported that private sector companies had been invited to bid for 14% more contracts in the NHS than the previous year, by which point 70% of contracts up for tender were going to this sector.
While the marketisation of the NHS has been sold under the mantra of choice and competition, some find themselves asking how much is the private sector being forced on the NHS, and how much choice is there to say no to these influences.
In Stoke, a contract for diagnosis of illnesses (including scans for cancer and other conditions) was ‘handed’ to a private firm despite the NHS offer being £7m cheaper, according to the Stoke Sentinel. In January 2015, Ian Syme, Co-ordinator of North Staffordshire Healthwatch, told Buzzfeed ‘’There is little or no openness in these tendering processes, no public debates, no meaningful public scrutiny. Ask for credentials and you get obstructed by the ‘commercial confidentiality’ excuse.’
Local GPs, clinicians and residents in West Lancashire found their urgent care services had been left with only two providers in 2015 – Virgin care or Optum.
While Chief Nurse of the CCG Claire Heneghan was quoted as saying, ‘We have listened to what our local community and clinical staff have told us’ MP Rosie Cooper was unable to find a single local GP or nurse involved in urgent services who had been ‘consulted’ by Heneghan. Further, local health service patients said the CCG had not raised the issue at any of the meetings during 2015, after which the CCG failed to advertise the 2016 meetings schedule.
Frustrated, Cooper asked: ‘Who are the people who made this decision? On what information was their decision made?
When defending the covert actions of the Conservative government around the NHS, Michael Portillo said on the BBC’s This Week programme that ‘they didn’t believe they could win an election if they told you what they were going to do.’
But when do the public get to catch up? Despite her reticence to talk policies and debate in the lead up to the snap election, earlier in the year Theresa May suggested healthcare could be a part of the US trade deal, opening the doors to the American model.
Brexit will offer the governing party carte blanche to see this transformation to its end, in the NHS’ most decisive election yet. Changing tack in Election season, May assured the public in a Facebook live q&a, ‘no one is privatising the NHS.’
