Tagged Health Care Costs

State Highlights: Washington Health Spending Law For Native American Groups Called Promising; Citing Abuses, 5 More Former Ohio State Students File Lawsuit Against Team Doctor

Media outlets report on news from Washington, Ohio, Illinois, Maryland, Connecticut, Arizona, Georgia, California, New York, Minnesota, North Carolina, Utah, New Hampshire, Massachusetts, Iowa and Arkansas.

Doctors, Hospitals And Insurers Don Their Armor As They Prepare For A Fight Over Surprise Medical Bills

President Donald Trump added fuel to the fire over surprise medical bills last week when he called on Congress to take action on the issue, which has become a top concern for voters. Lawmakers are fully on board, but the question remains about who will pick up the extra costs if not patients. The powerful industries that any legislation could impact are gearing up for a battle. Other news from Capitol Hill focuses on a single-payer hearing and site-neutral pay regulation.

44 States Sue Pharma Companies Over Alleged Conspiracy To Inflate Generic Drug Prices By As Much As 1,000%

In court documents, the state prosecutors lay out a brazen price-fixing scheme involving more than a dozen generic drug companies, including Teva, Pfizer, Novartis and Mylan. A key element of the scheme was an agreement among competitors to cooperate on pricing so each company could maintain a “fair share” of the generic drug markets, the complaint alleges.

‘John Doe’ Patients Sometimes Force Hospital Staff To Play Detective

The 50-something man with a shaved head and brown eyes was unresponsive when the paramedics wheeled him into the emergency room. His pockets were empty: no wallet, no cellphone, not a single scrap of paper that might reveal his identity to the nurses and doctors working to save his life. His body lacked any distinguishing scars or tattoos.

Almost two years after he was hit by a car on busy Santa Monica Boulevard in January 2017 and transported to Los Angeles County+USC Medical Center with a devastating brain injury, no one had come looking for him or reported him missing. The man died in the hospital, still a John Doe.

Hospital staffs sometimes must play detective when an unidentified patient arrives for care. Establishing identity helps avoid the treatment risks that come with not knowing a patient’s medical history. And they strive to find next of kin to help make medical decisions.

“We’re looking for a surrogate decision-maker, a person who can help us,” said Jan Crary, supervising clinical social worker at L.A. County+USC, whose team is frequently called on to identify unidentified patients.

The hospital also needs a name to collect payment from private insurance or government health programs such as Medicaid or Medicare.

But federal privacy laws can make uncovering a patient’s identity challenging for staff members at hospitals nationwide.

At L.A. County+USC, social workers pick through personal bags and clothing, scroll through cellphones that are not password-protected for names and numbers of family or friends, and scour receipts or crumpled pieces of paper for any trace of a patient’s identity. They quiz the paramedics who brought in the patient or the dispatchers who took the call.

They also make note of any tattoos and piercings, and even try to track down dental records. It’s more difficult to check fingerprints, because that’s done through law enforcement, which will get involved only if the case has a criminal aspect, Crary said.

Unidentified patients are often pedestrians or cyclists who left their IDs at home and were struck by vehicles, said Crary. They might also be people with severe cognitive impairment, such as Alzheimer’s, patients in a psychotic state or drug users who have overdosed. The hardest patients to identify are ones who are socially isolated, including homeless people — whose admissions to hospitals have grown sharply in recent years.

In the past three years, the number of patients who arrived unidentified at L.A. County+USC ticked up from 1,131 in 2016 to 1,176 in 2018, according to data provided by the hospital.

If a patient remains unidentified for too long, the staff at the hospital will make up an ID, usually beginning with the letter “M” or “F” for gender, followed by a number and a random name, Crary said.

Jan Crary, supervising clinical social worker at Los Angeles County+USC Medical Center, leads a team who increasingly must play detective when patients cannot be identified.((Heidi de Marco/KHN))

Other hospitals resort to similar tactics to ease billing and treatment. In Nevada, hospitals have an electronic system that assigns unidentified patients a “trauma alias,” said Christopher Lake, executive director of community resilience at the Nevada Hospital Association.

The deadly mass shooting at a Las Vegas concert in October 2017 presented a challenge for local hospitals who sought to identify the victims. Most concertgoers were wearing wristbands with scannable chips that contained their names and credit card numbers so they could buy beer and souvenirs. On the night of the shooting, the final day of a three-day event, many patrons were so comfortable with the wristbands that they carried no wallets or purses.

More than 800 people were injured that night and rushed to numerous hospitals, none of which were equipped with the devices to scan the wristbands. Staff at the hospitals worked to identify patients by their tattoos, scars or other distinguishing features, as well as photographs on social media, said Lake. But it was a struggle, especially for smaller hospitals, he said.

The Health Insurance Portability and Accountability Act (HIPAA), a federal law intended to ensure the privacy of personal medical data, can sometimes make an identification more arduous because a hospital may not want to release information on unidentified patients to people inquiring about missing persons.

In 2016, a man with Alzheimer’s disease was admitted to a New York hospital through the emergency department as an unidentified patient and assigned the name “Trauma XXX.”

Police and family members inquired about him at the hospital several times but were told he was not there. After a week — during which hundreds of friends, family members and law enforcement officials searched for the man — a doctor who worked at the hospital saw a news story about him on television and realized he was the unidentified patient.

Hospital officials later told the man’s son that because he had not explicitly asked for “Trauma XXX,” they could not give him information that might have helped him identify his father.

Prompted by that mix-up, the New York State Missing Persons Clearinghouse drafted a set of guidelines for hospital administrators who receive information requests about missing persons from police or family members. The guidelines include about two dozen steps for hospitals to follow, including notifying the front desk, entering detailed physical descriptions into a database, taking DNA samples and monitoring emails and faxes about missing persons.

California guidelines stipulate that if a patient is unidentified and cognitively incapacitated, “the hospital may disclose only the minimum necessary information that is directly relevant to locating a patient’s next-of-kin, if doing so is in the best interest of the patient.”

Lenh Vuong, a clinical social worker at Los Angeles County+USC Medical Center, checks on a former John Doe patient who was recently identified. (Heidi de Marco/KHN)

Maria Torres visits Felipe Luna, her brother. Luna ended up at Los Angeles County+USC Medical Center after he was hit by a car and suffered head injuries. “The only thing he had on him was a bank card and a receipt,” Torres says. “I think that was a good thing he had that in his pocket, but that’s not an ID.” (Heidi de Marco/KHN)

At L.A. County+USC, most John Does are quickly identified: They either regain consciousness or, as in a majority of cases, friends or relatives call asking about them, Crary said.

Still, the hospital does not always succeed. From 2016 to 2018, 10 John and Jane Does remained unidentified during their stays at L.A. County+USC. Some died at the hospital; others went to nursing homes with made-up names.

But Crary said she and her team pursue every avenue in search of an identity.

Once, an unidentified and distinguished-looking older man with a neatly trimmed beard was rushed into the emergency room, delirious with what was later diagnosed as encephalitis and unable to speak.

Acting on a gut instinct that the well-groomed man must have a loved one who had reported him missing, Crary checked with police stations in the area. She learned instead that this John Doe was wanted in several states for sexual assault.

“He was done in by a mosquito,” Crary mused.

“It is a case that I will never forget,” she added. “The truth is that I am more elated when we are able to identify a patient and locate family for a beautiful reunification rather than finding a felon.”

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Must-Reads Of The Week From Brianna Labuskes

Happy Friday! As if those sky-high medical bills weren’t bad enough, apparently California teachers also must pay substitutes to cover for them — even while undergoing treatment for breast cancer.

Which is the perfect segue into what you may have missed this week (almost like I planned it).

President Donald Trump waded into the turf wars among doctors, hospitals and insurers Thursday when he called for an end to surprise medical bills. The issue has been gaining attention across the country as stories about $48,512 cat bites and $109,000 heart attacks resonate with voters who are sick of paying an arm, a leg and a mortgage for health care even when they have insurance.

It’s not exactly a controversial issue — it’s listed as a top concern among voters, and lawmakers are lining up in droves to sign their names to any potential legislation. But, as is often the case with health care costs, the devil’s in the details. The costs don’t just disappear because the president doesn’t want patients to have to pay them. Physician groups tend to favor arbitration, while insurers argue that method is flawed because it still relies on bill charges. Instead, the industry wants set prices, with rates in line with what they would consider reasonable for the procedures. Each side hates the other’s opinion. So … good luck to the lawmakers who have to balance those two big interest groups!

The New York Times: Trump Said He Wanted to Work With Democrats on Surprise Medical Bills. Then He Attacked Democrats.

(FWIW: Two stories of the patients who were featured at the White House event were previously highlighted in KHN and NPR’s “Bill of the Month” series. Check them out here.)

Kicking off a veritable blitz of bills, House Democrats voted on legislation that would ban the Trump administration from granting states waivers for health law regulations. Over the next couple of weeks, Dems are expected to go hard on their campaign promises to shore up the bruised and battered health law. Some of the topics of those bills: short-term “junk insurance” plans, outreach funding, “reinsurance” payments, drug rebates and more.

The New York Times: With Insurance Bill Passage, House Democrats Begin Health Care Blitz

Speaking of waivers, Tennessee is set to ask for one to shift its Medicaid program into a block grant model. Block grants — aka Republicans’ longtime dream system — as an idea have a long history riddled with controversy and criticism, and the request, if granted, is all but certain to draw a court challenge. Now the question is: How far is CMS ready to go in pushing the envelope on Medicaid changes? Especially when other waivers are getting knocked down left and right in court?

Modern Healthcare: Tennessee Will Test CMS’ Willingness to Block-Grant Medicaid

Meanwhile, the Trump administration is proposing a change to the formula to calculate poverty. That may seem fairly dry, but since government assistance (like Medicaid and food stamps) is tied to that line, millions could lose health care coverage and/or have to go hungry.

The New York Times: Trump Administration Seeks to Redefine Formula for Calculating Poverty

Pharma companies are going to start to have to include list prices in their TV ads under a new rule that’s central to the Trump administration’s war on high drug costs. While most people think, in general, it’s a good step, many doubt it will accomplish much. It’s not as if sick consumers can then go negotiate a different price, as they would with cars.

As Ben Wakana, the executive director of Patients for Affordable Drug Prices, told NPR: “Drug companies have been shamed about their price increases for years. They appear to be completely comfortable with the shame as long as it is bringing them in the billions of dollars a year that they make from their outrageous prices.”

NPR: New Rule for Drugmakers: Disclose Drugs’ List Prices in TV Ads

Drug prices were a hot topic this week (and most weeks, amiright?), with the Senate Finance Committee holding a hearing on the idea of setting an international price index. Other countries set lower prices and “we look like chumps,” said Sen. John Kennedy (R-La.).

Modern Healthcare: GOP Senators Warn Drug Price Controls Could Come

And, yup, there’s still more news: Despite HHS Secretary Alex Azar’s concerns about safety, Trump backed Florida’s plan to import drugs from other countries. The kicker here: Florida will surely be a battleground state in the 2020 election, and drug prices routinely top voters’ list of concerns. The potential for a winning talking point is huge.

The Associated Press: Trump Backs Fla. Plan to Import Lower-Cost Meds From Abroad

In somewhat tangential news, Gilead announced it will donate its drug that reduces the risk of HIV transmission for up to 200,000 people a year. The price of the life-changing medication has long been a barrier to the goal of ending HIV transmissions, and many advocates were thrilled with the decision. Still, others were disappointed, saying that will cover only a fifth of what the country needs.

The Associated Press: Drugmaker Will Donate Meds for US Push to End HIV Epidemic

But everyone was cheering a new study out of Europe. Out of nearly 1,000 gay male couples where one partner had HIV and was taking antiretroviral drugs, there were zero cases of HIV transmission even without the use of condoms.

Reuters: AIDS Drugs Prevent Sexual Transmission of HIV in Gay Men

Fed up with the strategy to slowly chip away at abortion rights, Alabama lawmakers are poised to go all in. The legislation (which was almost up for a vote this week, but was delayed because of a ruckus over rape and incest amendments) would effectively ban all abortions and criminalize the act of performing the procedure. The supporters of the bill aren’t being coy at all about their intention: They want to challenge Roe v. Wade with a simple, “clean bill” on the legality of abortions.

The New York Times: As States Race to Limit Abortions, Alabama Goes Further, Seeking to Outlaw Most of Them

And over in Georgia, abortion rights advocates have one message to Republican Gov. Brian Kemp, who just signed a heartbeat bill: “We will see you, sir, in court.”

The Associated Press: Opponents of Georgia Abortion Ban Promise Court Challenge

On a sad note: Legendary New York Times reporter Robert Pear passed away this week from complications of a stroke. Although I did not have the pleasure of meeting or working with him, his byline became a familiar friend of mine. He has shaped my world for the past several years with the stories he continuously broke. It is a loss for journalism, for health care and for the people he helped through the light he shined on Washington.

His last story is a perfect example of that: looking at legislation that carried promises of helping people with preexisting conditions but failed to live up to them.

The New York Times: Robert Pear, Who Covered Washington for 45 Years, Dies at 69

The New York Times: Republicans Offer Health Care Bills to Protect Patients (and Themselves)

In the miscellaneous files of the week:

• Traditionally, HHS has received, on average, one complaint related to “conscience” violations from health care workers per year. Last year, that rose to 343. What on earth happened? (Hint: It does not mean the problem actually worsened.)

NPR: Why Are Health Care Workers’ Religious and Moral Conscience Complaints Rising?

• It might seem like the anti-vaccination movement is a new phenomenon spurred on by social media, but there’s a long history of resistance in the country. And it’s not as random as it might appear at first. Usually, it’s tied to time periods that are marked by great resentment toward government.

Los Angeles Times: Why the Measles Outbreak Has Roots in Today’s Political Polarization

• Stories about student heroes stopping mass shooters and dying in the process highlight just how grim our reality has become as young people find themselves thrust into violence.

The New York Times: Colorado School Shooting Victim Died Trying to Stop the Gunman

• Not only is the United States’ maternal mortality rate abysmal, a new study finds that many of those deaths — 60%! — are preventable. What’s more, African American and American Indian/Alaska Native women are three times more likely to die from pregnancy and childbirth than white women.

USA Today: Pregnancy and Childbirth Deaths Are Largely Preventable, CDC Says

• Beneath the bright, tantalizing promises of the stem cell industry (targeted at the most desperate patients) festers a dark underbelly of greed and profit.

ProPublica: The Birth-Tissue Profiteers

Have a great weekend, and remember, as National Nurses Week wraps up, to hug (or otherwise appropriately thank) the nurses in your life. Their job can be quite tough.

Listen: Trump’s Plan To End ‘Unpleasant Surprise’ Bills

President Donald Trump called for an end to the “unpleasant surprise” of certain medical bills on Thursday. Specifically, he outlined a plan that would forbid bills beyond in-network insurance rates in emergencies. For elective procedures, patients would have to consent in advance to receiving care from an out-of-network provider — and get only one bill after a surgery. NPR reporter Selena Simmons-Duffin covered the White House announcement, which featured two patients from the KHN-NPR “Bill of the Month” series.

Warren Hopes Opioid Message Will Reach Through Partisan Hostility In Ohio And West Virginia, Both Hit Hard By Crisis

Sen. Elizabeth Warren (D-Mass.) announced a plan this week that would funnel $100 billion toward combatting the opioid epidemic. She’s on the road to talk about it, stopping in states that have been deeply impacted by the drug crisis. In other news: a Trump administration official talks about boosting funding; prescription opioid use plummets; spending on the epidemic sky-rockets; and more.

Surprise! Fixing Out-Of-Network Bills Means Someone Must Pay

President Donald Trump called on Republicans and Democrats to pass legislation this year to end surprise medical bills, in remarks made in the White House’s Roosevelt Room on Thursday. “We’re determined to end surprise medical billing for American patients,” Trump said.

Bills like those have been featured in the NPR-Kaiser Health News series launched in February 2018. Two patients whose medical bills were part of the series attended the event.

Austin, Texas, teacher Drew Calver talked about the six-figure bill he received after having a heart attack. “I felt like I was exploited at the most vulnerable time in my life,” he said. His bill was reduced to $332 after the NPR-KHN story was published.

A bipartisan group of senators has been working to come up with a plan for the past several months. They said Thursday that they hope to have a bill to the president by July.

But will bipartisanship be enough? Even political will might not overcome divisions within the health industry.

Specifically, lawmakers aim to address the often-exorbitant amounts patients are asked to pay out-of-pocket when they receive care at health facilities that are part of their insurance network but are treated by out-of-network practitioners. Legislators are also looking to address bills for emergency care at a facility that doesn’t have a contract with patients’ insurers.

“We’re getting really close to an approach that we’ll be able to unveil pretty soon,” Sen. Maggie Hassan (D-N.H.) told reporters on a conference call Thursday with Sen. Bill Cassidy (R-La.).

And it’s not just politicians and patients: Out-of-network doctors, insurance companies and hospital groups say they want the problem for consumers fixed, too.

Despite that broad agreement, a hurdle remains. Insurers and health care providers each oppose the other side’s preferred solution to end surprise bills. That conflict makes it almost impossible for lawmakers to come up with a fix that won’t leave one of the influential groups unhappy.

“It’s a different axis than the partisan [conflicts] we’re used to,” said Loren Adler, who has been studying the surprise-bill problem for the USC-Brookings Schaeffer Initiative for Health Policy. The fight over how to fix it is less likely “to break down between Republicans and Democrats and more likely to break down to where the money is” and which group will have to take less of it.

“I don’t see a coalescence around a solution,” said Chip Kahn, president and CEO of the Federation of American Hospitals, which represents for-profit facilities.

The divide is wide, despite the overall interest in protecting consumers.

“What we’d most like to see is clarity for the patients,” said Bob Kneeley, a senior vice president for Envision Healthcare, which employs physicians to staff a variety of hospital departments, such as emergency rooms, neonatal units and anesthesiology. “This is a system that’s just not working well for the patient, and we need to establish some appropriate guardrails.”

“We want this to be solved. We know it needs federal legislation,” agreed Molly Smith, a vice president at the American Hospital Association. She said hospitals believe that patients should “not have to be involved in any process if there’s a dispute between the payer and the provider.”

States have been working on the problem for several years. Nine now have programs aimed at protecting patients from surprise bills. But state laws cannot reach those with employer-provided insurance — more than half of all Americans — because those plans are regulated by a federal law called the Employee Retirement Income Security Act, or ERISA. That means only Congress can fix it for everyone.

Patients and groups that represent them say the problem is more urgent than ever.

“We are talking about situations in which families — despite enrolling in health insurance, paying premiums, doing their homework and trying to work within the system — are being left with completely unanticipated and sometimes financially devastating bills,” Frederick Isasi, executive director of the consumer group Families USA, told a House Education and Labor subcommittee hearing in April. “This is inexcusable behavior on the part of hospitals, doctors and insurers. They each know — or should know — that patients have no real way to understand the financial trap they have just walked into.”

Dr. Paul Davis, whose daughter received a bill for a $17,850 for a urine test after back surgery, also spoke at the White House on Thursday: “The situation is terrible. It is a national disgrace, and I think a lot of people would support me on that,” Davis told a reporter. Their story was the first featured in the “Bill of the Month” project.

Still, it’s not clear where compromise might be found.

By and large, doctors favor some sort of negotiated-fee system when there is a dispute about a bill, such as binding arbitration, in which an independent third party makes the ultimate payment decision.

“That’s consistent with what’s working in some states,” said Envision’s Kneeley.

Among those frequently cited by doctors’ groups is New York, which has one of the strongest state laws on surprise billing. There patients are not required to pay more than they would for an in-network doctor or hospital. For the remaining bill, an independent arbitrator settles any dispute between the provider and insurer.

But the insurance industry worries about that approach. “Our larger concern with arbitration is that it still relies on bill charges,” said Adam Beck, a vice president for America’s Health Insurance Plans, an insurance industry trade group. And insurers think those charges are too high.

A senior administration official also said on Thursday that the administration does not favor the arbitration approach, either.

Insurers — and many consumer groups — “believe if you have a clear benchmark pegged to reasonable rates, that will really solve this problem,” Beck said, because insurers would be more likely to cover charges they found more in line with what they consider reasonable.

A “benchmark” payment might correspond to what Medicare pays for the same service, for instance.

But doctors don’t like that idea one bit. “Even if [the benchmark] is on the high side, it’s still rate-setting,” said Kneeley.

Hospitals don’t like it, either.

“We can’t get behind any sort of rate-setting in statute,” said Smith of the AHA. “We have too many concerns about getting that wrong.” For example, she said, if the rate is set too low, hospitals might have trouble finding doctors willing to provide care.

Meanwhile, insurers and hospitals want to ban out-of-network providers from billing patients for whatever part of the charge the insurer won’t cover, a practice called “balance billing.”

Such bans are anathema to doctors, who instead believe insurers bear responsibility for doctors not being in their networks because they “don’t have an incentive to offer fair rates,” said Kneeley. Although insurers often feel they must contract with specific high-profile hospitals, he explained, the doctors who work there are often “invisible providers.”

Addressing the underlying causes of high health costs, however, will be difficult, said Adler of USC-Brookings.

Doctors want to be paid more than insurers typically offer, he said, which is why some do not join insurance networks. And insurers “want the problems [with surprise bills to patients] to go away.” The question for them, he said, is, “How much are insurers willing to pay to have their patients not get surprise bills?”

In the end, a settlement that eliminates surprise bills but builds the excess into everyone’s premiums doesn’t truly address health care’s spending problem.

“I think there’s a good chance it gets solved,” Adler said, and that lawmakers will eventually agree on a plan. “But I’m pessimistic it gets solved in a way” that deals with health care’s high costs.

KHN senior correspondent Fred Schulte contributed to this report. 

Podcast: KHN’s ‘What The Health?’ ‘Conscience’ Rules, Rx Prices and Still More Medicare

Can’t see the audio player? Click here to listen on SoundCloud.

In a new set of rules, the Trump administration wants to let not just doctors but almost any health care worker or organization decline to provide, participate in or refer patients for any health service that violates their conscience or religion.

Also this week, the Trump administration is ordering prescription drugmakers to include list prices in their television ads for nearly all products.

And there’s yet another entry in the growing group of bills aimed at overhauling the nation’s health system. This one is “Medicare for America.”

This week’s panelists are Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Jen Haberkorn of the Los Angeles Times and Alice Miranda Ollstein of Politico.

Also, Rovner interviews Joan Biskupic, author of “The Chief: The Life and Turbulent Times of Chief Justice John Roberts.” Biskupic talks about the behind-the-scenes negotiations that led to the 2012 decision upholding the constitutionality of the Affordable Care Act.

Among the takeaways from this week’s podcast:

  • Robert Pear, who died this week, was the dean of health policy reporters and will be remembered not just for the many front-page stories he produced for The New York Times, but also as a generous and kind colleague who helped mentor many reporters new to the beat.
  • The Trump administration’s announcement last week of new regulations to protect health care workers from having to do anything they believe violates their religious beliefs is a stronger policy than past Republicans have adopted. But it follows other efforts to expand past conservative policies, such as the current administration’s more stringent Title X family planning rules.
  • The administration’s new rule requiring drugmakers to add list prices to their TV ads could confuse some consumers, since few of them actually pay that price. Their insurers often negotiate better prices, and other factors, such as geography and type of pharmacy, affect the consumer’s bottom line.
  • President Donald Trump this week told Health and Human Services officials to work with Florida on its plan to import drugs from Canada to take advantage of lower prices there. HHS Secretary Alex Azar said he would see if it can be done without jeopardizing the safety of the drugs. That is the rub that his predecessors have used to stop importation efforts, dating to the 1990s.
  • The increasing interest in Democratic proposals such as “Medicare for All,” which would set up a government-run health care system, and “Medicare for America,” which would offer a government-run option for consumers and businesses, suggests that a public option is not the political hot potato it was during the debate setting up the ACA. It’s also not clear whether consumers are ready to give up their current insurance.
  • Tennessee is getting ready to ask federal officials for a major change in its Medicaid system. The state wants to switch to a block grant, in which its federal funding would be limited but would come with much more flexibility for spending. The proposal is likely to end up in court because advocates for the poor argue the change would cut off services to some people and would violate laws that have defined Medicaid.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read too:

Julie Rovner: CNBC’s “Insiders Describe Aggressive Growth Tactics at uBiome, the Health Start-Up Raided by the FBI Last Week,” by Christina Farr, and “Health Tech Start-Up uBiome Suspends Clinical Operations Following FBI Raid,” by Christina Farr and Angelica LaVito

Joanne Kenen: ProPublica and the New Yorker’s “The Birth-Tissue Profiteers,” by Caroline Chen

Jen Haberkorn: The Los Angeles Times’ “Health Insurance Deductibles Soar, Leaving Americans With Unaffordable Bills,” by Noam N. Levey

Alice Miranda Ollstein: Bloomberg News’ “Trump May Redefine Poverty, Cutting Americans From Welfare Rolls,” by Justin Sink

To hear all our podcasts, click here.

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All That Political Uncertainty Over The Health Law Gave Insurers Some Of Their Best Financial Annual Performances Yet

Last year stood as the best financially for insurers in the individual market since 2011, with monthly average individual market gross margins per member more than doubling from $78 in 2017 to $167 in 2018. In other health industry news: the Elizabeth Holmes trial, health care claims, the False Claims Act, public health and TV shows, apps and more.

A Plan To Cover Immigrants Would Divert Public Health Dollars

California Gov. Gavin Newsom wants the state to provide health coverage to low-income young adults who are in the country illegally, but his plan would siphon public health dollars from several counties battling surging rates of sexually transmitted diseases and, in some cases, measles outbreaks.

Public health officials describe the proposed reallocation of state dollars as a well-meaning initiative that nonetheless would have “dire consequences” to core public health services.

There have been 764 confirmed cases of measles this year through May 3 in 23 states, including California, the highest number since 1994, the Centers for Disease Control and Prevention reported Monday. State public health officials also are struggling to address record rates of sexually transmitted diseases, with more than 300,000 cases of gonorrhea, chlamydia and syphilis reported in 2017.

The reallocation of state money “would exacerbate our already limited capacity to respond to outbreaks and public health emergencies,” said Jeff Brown, director of Placer County’s Health and Human Services Department, which has responded to three measles cases so far this year.

California already allows eligible immigrant children up to age 19 to participate in Medi-Cal, the state’s Medicaid program for low-income residents, regardless of their immigration status. The current budget sets aside $365.2 million to pay for the coverage.

In his 2019-20 budget plan, Newsom proposes expanding eligibility to unauthorized young adult immigrants from age 19 through 25.

His office estimates it would cost nearly $260 million to cover them in 2019-20. While state and federal governments usually share Medicaid costs, California would have to bear the full cost of covering this population.

To help pay for it, Newsom proposes to redirect about $63 million in state funds from 39 counties, arguing they would no longer need to provide health benefits to low-income young adults covered by the state.

“As the state takes on responsibility for providing health care to undocumented adults, counties’ costs and responsibilities on indigent health care are expected to decrease,” Jenny Nguyen, a budget analyst at the state Department of Finance, told lawmakers at a recent legislative hearing.

Under the governor’s 2019-20 budget plan, which requires legislative approval, 35 mostly small and rural counties expect to lose about $45 million in state money that funds health services for uninsured residents, including undocumented immigrants. Those counties — which participate in something called the County Medical Services Program — aren’t expected to feel an immediate financial impact because the program has a budget surplus.

But four counties — Placer, Sacramento, Santa Barbara and Stanislaus — would take big and immediate hits to their public health budgets, officials say.

The amount of money the governor wants to divert from them to cover unauthorized immigrants under Medi-Cal is far more than the counties now spend on comprehensive health services for those immigrants, local health officials said.

“The idea that these dollars would be offset is just not accurate,” said Mary Ann Lee, managing director of Stanislaus County Health Services Agency, who described the governor’s budget proposal as “alarming.”

For example, Stanislaus County estimates it would lose $2.5 million under the governor’s budget plan. When officials studied the population served by their health centers, they found only 18 individuals were young adults who might not have legal immigration status. The total cost to provide care to them: just $1,700 a year.

Sacramento County, which reported a 300% increase in syphilis cases in the past four years, would have to shutter its newly opened STD clinic if the county loses an estimated $7.5 million in state funding, Dr. Peter Beilenson, the county Health Services Director, told lawmakers.

And while Sacramento County provides primary health care to an estimated 4,000 undocumented immigrant adults, just 100 are ages 19 to 25, and they are the least expensive to cover, Beilenson said.

“We agree with the idea behind this, increasing coverage for [those who are] undocumented,” Beilenson said. But losing those funds would force the county to close its STD clinic and terminate some communicable disease investigators “at a time when we now have measles cases in the region and we don’t want to be shutting those services down.”

The 40 confirmed cases of measles reported in California as of May 1 include three in Sacramento County.

As a result of the reduced funding, Sacramento County also would have to slash health services to its unauthorized immigrant residents — the very people Newsom aims to help — by an estimated 75%, Beilenson added.

Whether lawmakers will approve the governor’s proposal is unclear.

Several already have expressed concern, including state Assemblywoman Eloise Reyes (D-Grand Terrace), who said, “I think it is clear that this would be terrible for those counties.”

Officials with the Department of Finance told lawmakers at the hearing that they were aware of counties’ concerns but that the “governor’s budget stands as it is.”

The governor is scheduled to release a revised budget proposal by May 14, before the legislature votes on it this summer.

“I hope there will be some reconsideration,” said state Sen. Richard Pan (D-Sacramento), chairman of the Senate Health Committee. “There’s a disconnect there.”

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

The Money And Politics Of Prescription Drugs: What You Need To Know

If there’s one area of health care where Republicans and Democrats might strike a deal, it’s prescription drugs.

President Donald Trump has floated a plan to cut drug prices. Democratic and Republican ideas abound in Congress, where lawmakers have put more than 40 bills on the table. In 2018, 39 states passed 94 laws targeting pricing and costs. Florida’s House recently approved a move backed by the state’s Republican governor to allow imports from Canada. So far, Vermont is the only state to take that step.

Why do prescription drugs draw so much attention? Because millions of Americans rely on them, and 8 out of 10 say the cost is “unreasonable.”

America spends about $460 billion a year on these drugs, roughly as much as the combined revenues of the top three car makers.

That spending flows mainly in two ways: retail drugs sold at pharmacies, and drugs provided by doctors and other clinicians at hospitals, outpatient clinics and long-term care centers. Retail drugs account for about 10% of all health care spending. The doctor-administered drugs add about another 6% to 7%.

Tracking the money challenges the savviest of analysts. Between the drugmakers and the patients lie an array of middlemen, who end up masking the true prices through discounts to one another and rebates to patients.

Here are a few benchmarks to help you navigate the realm of prescription drugs.

Out-Of-Pocket Costs

With all the focus on affordability, it’s worth noting that about a third of all retail prescriptions come at no cost to the patient. Another half have an out-of-pocket cost of under $10. In recent years, the average out-of-pocket cost has fallen from about $10 to a bit over $8.

There are several reasons, including company rebates, better drug cost protections through the Affordable Care Act, and greater use of generic drugs, which are cheaper than brand-name drugs protected by patent.

But just because the pressure has eased on average doesn’t mean the financial burden isn’t intense for the relative few. A small number of people and prescriptions accounted for a huge share of the estimated total out-of-pocket costs of $57.8 billion in 2017.

The Federal Bill Grows

Even if most individuals are cushioned from rising drug prices, taxpayers, through the federal government, are not. Spending skyrocketed after the Medicare Part D prescription drug benefit took effect in 2006 and has continued to rise rapidly since.

U.S. Drug Prices Are Higher

One reason states such as Florida are interested in importing drugs from Canada is many drugs are cheaper there. The Commonwealth Fund, a New York-based health policy group, compared a basket of common drugs (of the retail sort) in the United States and several other countries. Using the American cost as a benchmark of 100, it calculated the cost in Canada, the United Kingdom, France, Germany, Switzerland and Australia.

Germany was the closest match to the American price tag, but Canada, the U.K. and Australia were all about half the cost.

Other studies reached the same general result. The U.S. Health and Human Services Department looked at the top 27 Part B drugs (physician-administered drugs) and found that for 20 prices were higher in the United States. A Canadian-American research team looked at spending on primary care drugs in America and 10 other nations, including all of the ones in the Commonwealth study. It found U.S. spending was about twice as high as the average elsewhere.

Broadly, the United States spends more on drugs because prices for many drugs are higher, and patients, usually on the advice of a doctor, take newer, high-cost drugs.

Follow The Money

One of the reasons the prescription drug market poses a challenge to lawmakers is because it has many moving parts. On the payer side, there are patients, the government and employers. On the receiving end are drugmakers, wholesalers, health care plans, pharmacies and pharmacy benefit managers, which are firms that negotiate prices on behalf of payers.

The money moves around a lot, but policy analyst Allan Coukell at the Pew Charitable Trusts modeled the flow among all the players to estimate how much money ended up with each one. For 2016, the drugmakers were the top gainers, with $204 billion (on the retail side), but the pharmacies also did well with about a quarter of the total.


Ever since the passage of the Medicare Part D prescription drug benefit, pharmaceutical companies have invested heavily in lobbying. There was a spike in 2009 as Congress debated the Affordable Care Act, but after a short dip, spending rose again and now stands at $281 million, about where it was nearly a decade ago.

No industry group spends more on lobbying — by a long shot. The insurance industry came in a distant second at $158 million on lobbying last year.

The drug industry can’t ignore the big proposals in Washington that could change the landscape, said Georgetown University researcher Jack Hoadley.

Both Democrats and Republicans, including the White House, have bills to peg American prices to prices in Japan and Europe.

There are bills to let the government negotiate directly with drug companies to reduce prices in the Medicare program. Among the public, that approach enjoys broad bipartisan support, with 80% of Republicans and 90% of Democrats in favor.

“The fact that the administration, congressional Republicans and Democrats are all talking about drug prices is putting all stakeholders on edge,” Hoadley said.

Drug Industry Patents Go Under Senate Judiciary Committee’s Microscope

Congress isn’t making much headway in finding a solution to the problem of soaring prescription drug prices, but lawmakers from both parties are tinkering on the edges with legislation that aims to increase competition among drugmakers.

A comprehensive piece of drug-pricing legislation is a high priority for Senate Finance Committee Chairman Chuck Grassley, (R-Iowa) and Sen. Ron Wyden (D-Ore.). And it could be introduced by mid-June, according to congressional staff.

But while that is hashed out, a slate of options to reform drug patents is working its way through the Senate Judiciary Committee, which had a hearing Tuesday featuring academics, patient advocates and a representative from the pharmaceutical industry. Their mission: to increase competition without decreasing innovation in the industry.

“I think we’re dangerously close to building a bipartisanship consensus around change,” Sen. Dick Durbin (D-Ill.), said during the hearing.

The four proposed bills share a common goal: avoiding some of the thorny issues around drug pricing, like whether the government will set drug prices or negotiate with manufacturers on what federal programs will pay. Instead, the patent reform proposals get at the ways branded drug manufacturers use patents, and the legal monopolies that are granted with patents, to keep lower-priced generic competitors from reaching patients.

“A package of patent reforms are important because they fix systemic problems that allow prices to go up and keep them high,” testified David Mitchell, the president of Patients for Affordable Drugs, a Washington, D.C.-based advocacy group focused on lowering prescription drug prices.

Sen. John Cornyn (R-Texas) offered specific examples of drugs that have benefited from  system issues, including Humira, an expensive drug for arthritis and psoriasis that is protected by 136 patents.

That’s called a “patent thicket,” because it prevents a generic alternative from entering the market for more years — in this case, until 2023 for a drug first approved for use in the United States in 2002. “Is there anyone on the panel who’d like to defend the status quo?” he asked.

“There is no way a biosimilar can deal with a hundred patents,” testified Michael Carrier, a professor at Rutgers Law School. “This is an abuse of the system.”

Among the proposed bills, the Stop STALLING (“Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics”) Act, is the bipartisan brainchild of Sen. Amy Klobuchar (D-Minn.) and Grassley. The bill is supposed to put a stop to “sham” citizen petitions to the FDA. Critics say these petitions are often introduced by drugmakers under the guise of patient advocacy to slow FDA approval of new generic medicines. “Nearly every one of these citizen petitions is brought by a brand company. None are filed by individuals. I love the legislation. I would go even stronger,” Carrier said.

Grassley is also the lead sponsor on the bipartisan Prescription Pricing for the People Act of 2019. It directs the Federal Trade Commission to investigate mergers of pharmacy benefit managers, the middlemen that negotiate between drugmakers and health plans.

Klobuchar and Grassley teamed up again on another measure, the Preserve Access to Affordable Generics and Biosimilars Act, which they  say would end “anti-competitive behavior” — specifically, deals struck between branded companies and generic companies to keep a generic, or a biosimilar, off the market. Klobuchar,  a Democratic presidential candidate, has frequently discussed her opposition to this practice on the campaign trail.

James Stansel — the executive vice president and general counsel of the Pharmaceutical Research and Manufacturers of America, a drug industry trade group, and the lone voice of the pharmaceutical industry on the panel — cautioned against moving too aggressively on this point. “We want to make sure we don’t do something that’s anti-competitive in the hopes it would be pro-competitive,” he said.

There’s also the CREATES (“Creating and Restoring Equal Access to Equivalent Samples”) Act, introduced by Sen. Patrick Leahy (D-Vt.) with 31 bipartisan co-sponsors and endorsed by nearly every witness on Tuesday’s panel. It’s supposed to crack down on branded companies that refuse to sell samples of their drugs to generic companies, a necessary step to increasing the number of generics on the market.

Versions of all four of those bills have also been introduced in the House and advanced out of the House Judiciary Committee.

“The American people are being played for chumps,” said Sen. John Kennedy (R-La.). “Just chumps. And it’s got to stop.”

Feds Want To Show Health Care Costs On Your Phone, But That Could Take Years

Federal officials are proposing new regulations that for the first time could allow patients to compare prices charged by various hospitals and other health care providers using data sent to their smartphones.

Donald Rucker, who coordinates health information technology policy for the Department of Health and Human Services, said he expects that the rules, first proposed in March, will give patients new power to shop for care based on price and quality.

Consumers have long sought more knowledge about health care prices, but administration officials cautioned it could take two years or more for it to appear in a user-friendly form on a phone app. Many specifics, including how patients would make sense of complex pricing policies for purchasing health care and insurance and assessing quality via an app, remain unclear.

Rucker said in remarks prepared for a Senate Health, Education, Labor & Pensions Committee hearing Tuesday that patients “have few ways if any to anticipate or plan for costs, lower or compare costs, and, importantly, measure their quality of care or coverage relative to the price they pay.”

The Trump administration proposal comes amid growing outrage from patients hit with seemingly exorbitant “surprise” medical bills. One study found that these bills — which are for amounts far more than the patient anticipated or for care not covered by insurance — have bedeviled more than half of American adults.

The Senate committee is reviewing regulations proposed under the 21st Century Cures Act, a law passed in 2016 to promote innovation in health care.

Dr. Kate Goodrich, the chief medical officer for the federal government’s Centers for Medicare & Medicare Services, said the agency wants every American to have an electronic health record (EHR) that will follow them as they move through the health care system, “giving them the data they need to make the best decisions for themselves and their families.”

Everyone, Goodrich said in her prepared statement to the committee, “should be able, without special effort or advanced technical skills, to see, obtain, and use all electronically available information that is relevant to their health care, and choices — of plans, providers, and specific treatment options.”

Meeting these goals could prove to be a tall order. For well over a decade, federal officials have struggled to set up a digital records network capable of widespread sharing of medical data and patient records. In 2004, President George W. Bush said he hoped to have a digital record for most Americans within five years. In early 2009, the Obama administration picked up the challenge and funneled billions of dollars in economic stimulus money into a campaign to help doctors and hospitals buy the software needed to replace paper medical files.

Critics argue that poor oversight over the stimulus spending and objectives has saddled many doctors and hospitals with flawed software that typically cannot share information across health networks as promised. It has also caused new types of errors that compromise the safety of patients.

Botched Operation,” a recent investigation published by Kaiser Health News and Fortune, found that the federal government has spent more than $36 billion on the EHR initiative. Thousands of reports of deaths, injuries and near misses linked to digital systems have piled up in databases over the past decade — while many patients have reported difficulties getting copies of their complete electronic files, the investigation found.

Despite the slow progress, federal officials remain optimistic that digital records will save the nation billions of dollars while reducing medical errors, unnecessary medical testing and other waste — and encouraging more Americans to take a bigger role in managing their health care by comparing prices.

But Sen. Lamar Alexander, R-Tenn., the committee’s chairman, said the results would have been better had officials not rushed out the stimulus plan. “I am especially interested in getting where we want to go with input from doctors, hospitals, vendors, and insurers, so we have less confusion, make the fewest possible mistakes, and make sure we don’t set some kind of unrealistic timeline,” he said in a statement.

Anger over the lack of easy access to health care has dominated public comments on the proposed regulation posted on a government website.

“The proposed policy to mandate disclosure of health care pricing by hospitals, insurance companies, etc. is one of the most important in American history. That is not hyperbolic,” one anonymous commenter wrote, adding: “The only way to save money on healthcare in America is to never receive it.”