Tagged Health Industry

Must-Reads Of The Week (Some Flying Below The Radar)

Your wonderfully entertaining compiler of “The Friday Breeze,” Brianna Labuskes, is off today, so I’m jumping in to keep you abreast of this week’s vital health care news. Here’s what I found most fascinating, some of it far away from the headlines.

Let’s dive into my “Department of Health Studies,” where I found several worthy of your time.

First, the scourge of fentanyl drug overdoses is rising most sharply among African-Americans. The CDC’s National Center for Health Statistics, which did the study, said the synthetic opioid is also a factor in the rise of death rates across other demographic groups.

The Washington Post: Fentanyl Drug Overdose Deaths Rising Most Sharply Among African Americans

A group of academics studying anti-vaccination posts on Facebook found that it’s not just the unfounded fear of autism driving the sentiment. While 86 percent of the posters were women, their motivation varied from conspiracy — as in poliovirus does not exist and pesticides caused the clinical symptoms of polio — to a belief in alternative medicine — eating yogurt cures human papillomavirus.

Science Direct: It’s Not All About Autism: The Emerging Landscape of Anti-Vaccination Sentiment on Facebook

Many news outlets reported on a study on the Apple Watch and its heavily promoted ability to detect an irregular heartbeat. The Apple-funded study, which has not been published or peer-reviewed, concluded the watch works.

CNN: Apple Watch App Could Detect Life-Threatening Irregular Heartbeat, Study Says


Moving on to data, the Robert Wood Johnson Foundation issued its county health rankings this week. It’s a user-friendly display of a matrix of health indicators that lets you spot the country’s trouble spots. This year’s report, the foundation explains, tried to get at the relationship of the cost of housing to health. “The research reveals that in the most segregated counties nearly one in four black households spends more than half their income on housing, compared with one in 10 white households.”

Robert Wood Johnson Foundation: How Healthy Is Your Community?

Doctors will like this one: a study comparing hospital CEO salaries — nonprofit hospital CEOs, mind you — with physician salaries. CEO salaries are five times higher than surgeons’ salaries, up from a ratio of 3-to-1 only 10 years earlier.

Healthcare Dive: CEO Salaries at Nonprofit Hospitals Up 93% Since 2005


Drug prices remain the hot topic this week in health care news. The BBC looked at the high drug prices in the U.S. compared with the prices in Great Britain and chortled a bit.

BBC News: The Human Cost of Insulin in America

Elisabeth Rosenthal, the editor-in-chief of KHN, wrote an analysis in The New York Times of Eli Lilly’s baffling public relations move to cut insulin prices in the U.S. with an “authorized generic.” She writes, “It is, perhaps, a sign of how desperate Americans are for something — anything — to counteract the escalating price of drugs that Lilly’s move was greeted with praise rather than a collective ‘Huh?’”

The New York Times: Why Should Americans Be Grateful for $137 Insulin? Germans Get It for $55


While we are on the topic of the high cost of health care, the federal government’s General Accountability Office issued a report on air ambulances and the sky-high bills the companies send patients. (KHN featured the problem in its “Bill of the Month” series and the St. Louis Post-Dispatch did some excellent pieces on the problem last year.) Bob Herman of Axios noted that the report found that the median price of medical helicopter transport in 2017 was $36,400.

Government Accountability Office: Air Ambulance: Available Data Show Privately-Insured Patients Are at Financial Risk


I’d be remiss if I didn’t mention a fabulous article by another KHN staffer, Fred Schulte, who with Erika Fry of Fortune magazine wrote about the mess that electronic health records have become. It’s long, but so good at illuminating a problem that is largely invisible to patients.

Fortune: Death by a Thousand Clicks: Where Electronic Health Records Went Wrong

The Baltimore Sun produced a great graphic, a live map of sewage pollution in the city. The accompanying article says: “More than 14 million gallons of sewage-tainted water has washed into Baltimore streams over the past two months, but city officials haven’t alerted the public of the contamination.”

The Baltimore Sun: Baltimore Launches Live Map of Sewage Pollution — and Temporarily Stops Alerting the Public to Contamination

Enjoy the weekend with this selection of things to read.

The Dark Side Of Artificial Intelligence: Increased Efficiency Comes With Ominous Threat Of Vulnerability To Hackers

A report warns that artificial intelligence can be easily duped with tiny pieces of data. The authors say bad actors could hack into records and make it seem like there’s an illness there that isn’t. But more likely is that doctors, hospitals and other organizations could manipulate the A.I. in billing or insurance software in an effort to maximize the money coming their way. In other health technology news: a day of reckoning is coming for digital health, the FDA calls for tighter security of electronic health records following a KHN report, and data breaches from the states.

Even With Insurance, She Faced $227K In Medical Bills. What It Took To Get Answers.

The first surprise was the massive heart attack, which struck as Debbie Moehnke waited in a Vancouver, Wash., medical clinic last summer.

“She had an appointment because her feet were swollen real bad,” said Larry Moehnke, her husband. “But she got in there and it was like, ‘I can’t breathe, I can’t breathe!’”

Her life suddenly at risk, the 59-year-old was rushed by ambulance, first to a local hospital, where she was stabilized, and then, the next day, to Oregon Health & Science University across the river in Portland for urgent cardiac care.

That meant heart bypass surgery, replacement of one valve and repair of another. Just as she recovered from that, Debbie Moehnke developed a raging infection that required powerful IV antibiotics to treat. She spent a month in the hospital, some of it in intensive care, before she was discharged home.

That’s when she got the next surprise: Bills totaling more than $454,000 for the medical miracle that saved her life. Of that stunning amount, officials said, she owed nearly $227,000 after her health insurance paid its part.

“I wish I would have known. I would have said ‘no’ to life support,” said Debbie Moehnke, a former cocktail waitress who suffers from signs of early-onset dementia. “We’ll lose everything.”

Large “surprise bills” like the Moehnkes received have become a national epidemic outraging patients and politicians alike. Solutions have been elusive to date, even in a progressive state like Washington.

Lawmakers in Olympia this year are trying for the fourth time to pass legislation banning the practice that leaves consumers with huge out-of-pocket costs.

“Everybody agrees we’ve got to get the consumer out of being stuck in between,” said Mike Kreidler, the state insurance commissioner who has repeatedly backed the proposals.

While the protection would be beneficial to patients, there has been formidable and effective pushback from insurers, hospitals and doctors.

The central issue is money. Such surprise bills, or “balance bills,” typically occur when a patient’s insurer and a hospital or doctor not in its network don’t agree on what treatment is worth. The insurer — LifeWise Health Plan of Washington, in this case — pays what it judges to be fair. Providers then bill patients for the balance, which can easily tally tens if not hundreds of thousands of dollars.

As of December, 25 states had laws providing protection against balance bills, according to the Commonwealth Fund. Those laws take consumers out of the middle in billing disputes and force providers and insurers to negotiate directly for payment.

When an insurer and a provider disagree about how much a service is worth, who decides the legitimate charge? The proposed bills in Washington state use a “commercially reasonable” rate as the standard. But what does that mean in a country where medical prices are so variable?

“We need to make sure that any law that is enacted doesn’t tilt the scale toward one side or another,” said Chelene Whiteaker, senior vice president of government affairs for the Washington State Hospital Association.

The Washington state legislation borrows from a 2015 New York law that sends insurers and providers to baseball-style binding arbitration if they can’t come to an agreement about costs. Both parties remain cautious.

“I hope they will give up the idea that this is a chance to stick it to doctors,” said Dr. Nathan Schlicher of the Washington State Medical Association.

Leonard Sorrin, vice president of congressional and legislative affairs for Premera Blue Cross, which operates LifeWise, said in a statement that his organization is working for legislation that prevents balance billing, but also “maintains a contracting balance that allows health plans to build networks for members and pays the provider a fair rate.”

While patients can generally avoid balance billing by staying in-network, a life-or-death emergency such as Debbie Moehnke’s can make that impossible. Also, many in-network hospitals often use out-of-network doctors, leaving patients vulnerable to surprise charges.

So much money is at stake that, even when they exist, laws are filled with loopholes and offer only patchwork protection. For example, hospitals are not prohibited from sending balance bills; patients have to know they’re protected by law and go to considerable effort to contest them.

And about 60 percent of employer-based plans are governed by federal rather than state law. There is currently no federal prohibition against balance billing, although a bipartisan bill to end the practice was proposed last year.

Oregon, where Debbie Moehnke was treated, does have a law banning surprise bills, which took effect last year. But it applies only to out-of-network charges sent to a patient who received care at an in-network provider. And it covers only insurers regulated in the state, which excludes the Moehnkes’ plan, according to state insurance officials.

The proposed Washington legislation would ban balance billing for most of the state’s nearly 6 million insured consumers under age 65. But it could skip about 2 million people who get coverage through employers with self-funded plans. Those plans are regulated by a federal law, called ERISA, shorthand for the Employee Retirement Income Security Act of 1974, which doesn’t prohibit balance billing.

Self-insured employers would be allowed, but not required, to participate in provisions of the new law, if approved.

So far, however, change has come too slowly for families like the Moehnkes, who found themselves facing crushing bills, despite buying a well-subsidized plan on the state’s insurance exchange. In Debbie Moehnke’s case, the full bill from OHSU and affiliated providers was $454,550.54. Her insurance paid $227,959.19.

That left the Moehnkes with bills totaling $226,591.35.

“What do you think you’re going to do, squeeze blood out of a turnip?” said Larry Moehnke, 70, a big-rig truck driver.

Married 32 years, the Moehnkes and their two dogs, Coco and Belle, live in a 47-year-old mobile home in rural southwestern Washington. Larry Moehnke hasn’t been able to work since health problems of his own developed after his wife’s heart attack. They’re getting by on his Social Security income of $1,884 a month.

Charges for Debbie Moehnke’s emergency care totaled more than $454,000. Her health insurance plan agreed to pay about half the costs, leaving the couple responsible for the rest. With help from a patient advocate, the bill was eventually erased.(Michael Hanson for KHN)

LifeWise spokesman Bo Jungmayer said the insurer paid for her emergency care to the extent required under the Affordable Care Act.

Debbie Moehnke was hospitalized at OHSU from Aug. 14 to Sept. 12, 2018. She was initially admitted for her emergency heart treatment. While there, she developed an unidentified infection that required two additional weeks of care.

Only later did the couple learn that she could have been transferred to an in-network hospital, potentially saving tens of thousands of dollars.

“They never said anything about not being ‘in network’ or anything,” Larry Moehnke said.

Debra Tomsen, OHSU’s director of hospital billing and coding, said LifeWise officials should have notified the Moehnkes after receiving bills for nearly $250,000 halfway through her stay.

“Insurance should tell them they’re incurring out-of-pocket costs,” she said.

Jungmayer, of LifeWise, said it was up to OHSU to let Debbie Moehnke know about the high bills — and about the option to transfer to another hospital.

“Typically we allow that conversation between the provider and the patient while they’re there,” he said. “I don’t know why OHSU didn’t ask them.”

Early this month, after repeated inquiries about Debbie Moehnke’s care — first from a reporter, then from a patient advocate alerted by the Washington state insurance commission — the couple’s outstanding bills were resolved.

With the help of Jared Walker, who runs Dollar for Portland, a nonprofit group, the couple applied for a medical charity care waiver, in itself a complicated process. OHSU officials granted the waiver, erasing the sky-high debt.

“Their balance is now zero,” OHSU spokeswoman Tamara Hargens-Bradley confirmed in an email.

The Moehnkes are relieved, but they said they resent that they endured the stress of mounting bills and collection calls for six months when there was a solution available.

“Nobody ever said anything about charity care,” said Larry Moehnke.

That’s not how the process should work, said Kreidler.

“It shouldn’t be one where the squeaky wheel gets help,” he said. “There should be fairness and equality in the system. You shouldn’t have to file a complaint. This should be ingrained into the system so that when you have a problem and you’re due relief, you get it.”

FDA Chief Calls For Stricter Scrutiny Of Electronic Health Records

Food and Drug Administration Commissioner Scott Gottlieb on Wednesday called for tighter scrutiny of electronic health records systems, which have prompted thousands of reports of patient injuries and other safety problems over the past decade.

“What we really need is a much more tailored approach, so that we have appropriate oversight of EHRs when they’re doing things that could create risk for patients,” Gottlieb said in an interview with Kaiser Health News.

Gottlieb was responding to “Botched Operation,” a report published this week by KHN and Fortune magazine. The investigation found that the federal government has spent more than $36 billion over the past 10 years to switch doctors and hospitals from paper to digital records systems. In that time, thousands of reports of deaths, injuries and near misses linked to EHRs have piled up in databases — including at least one run by the FDA.

Gottlieb said Congress would need to enact legislation to define when an electronic health record would require government oversight. He said that the digital records systems, which store a patient’s medical history, don’t fit neatly under the agency’s existing mandate to regulate items such as drugs and medical devices.

Gottlieb said the best approach might be to say that an EHR that has a certain capability becomes a medical device. He called EHRs a “unique tool,” noting that the risks posed by their use aren’t the same as for a traditional medical device implanted in a patient. “You need a much different regulatory scheme,” he said.

The 21st Century Cures Act of 2016 excludes the FDA from having oversight over electronic health records as a medical device.

Gottlieb said that health IT companies could add new functions that would improve EHRs, but they have been reluctant to do so because they didn’t want their products to fall under FDA jurisdiction. He added that he was “not calling” for FDA to take over such a duty, however, and suggested that any new approach could be years away. Proponents have long argued that widespread use of EHRs can make medicine safer by alerting doctors to potential medical errors, though critics counter that software glitches and user errors may cause new varieties of medical mistakes.

How closely the FDA should watch over the digital medical record revolution has been controversial for years. The agency’s interest in the issue perked up after Congress decided in February 2009 to spend billions of dollars on digital medical records as part of an economic stimulus program.

At the time, many industry groups argued that FDA regulation would “stifle innovation” and stall the national drive to bring medicine into the modern era. Federal officials responsible for doling out billions in subsidies to doctors and hospitals generally sympathized with that view and were skeptical of allowing the FDA to play a role.

The debate became public in February 2010, when Jeffrey Shuren, an FDA official, testified at a public hearing that the agency had tied six deaths and more than 200 injuries to health information technology. In all, the FDA said, it had logged 260 reports in the previous two years of “malfunctions with the potential for patient harm.”

The agency said the findings were based largely on reports voluntarily submitted to the FDA and suggested “significant clinical implications and public safety issues.” In one case cited, lab tests done in a hospital emergency room were sent to the wrong patient’s file. Since then, several government and private repositories have associated thousands of injuries, near misses and deaths to EHR technology.

Shuren said in 2010 that the agency recognized that health information technology had great potential to improve patient care, but also needed oversight to “assure patient safety.”

While some safety proponents agree that EHRs offer tremendous benefits, they also see a greater opportunities to improve their safety.

Dean Sittig, a professor of bioinformatics and bioengineering at the University of Texas Health Science Center, said EHRs have improved safety within the health care system, but they have not eliminated errors to the extent that he would have expected. Federal officials were initially pushing for rapid adoption and “there wasn’t a lot of interest in talking about things that could go wrong,” Sittig told KHN and Fortune.

Earlier this month, Gottlieb announced his resignation from the FDA. His last day is scheduled to be April 5.

KHN correspondents Sarah Jane Tribble, Sydney Lupkin and Julie Rovner contributed to this report.

Podcast: KHN’s ‘What The Health’ Surprise! Fixing Surprise Medical Bills Is Harder Than it Looks

Surprise medical bills — when patients receive an unexpected bill from a health provider not in their insurance network — are among the few problems in health care just about everyone wants to solve. But it turns out that no one in the health industry wants to take responsibility for paying those bills. That could complicate efforts toward a legislative fix, despite bipartisan support.

And the 2020 presidential campaign is already in full swing, with candidates staking out some surprisingly diverse positions on how to expand access to health care.

This week’s panelists are Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Anna Edney of Bloomberg News and Alice Miranda Ollstein of Politico.

Also, Rovner interviews Scott Gottlieb, the commissioner of the Food and Drug Administration, who is stepping down in early April.

Among the takeaways from this week’s podcast:

  • State and federal lawmakers of both parties and industry groups say they want to find a way to protect patients from getting surprise bills from out-of-network doctors and hospitals after treatment. But they can’t find agreement on a way to fix the system.
  • Efforts to end surprise bills generally fall into two categories: setting rates for out-of-network services (which might be based on some percentage of Medicare rates) or requiring patients and providers to go through an arbitration process (a technique some states are using).
  • Among Democratic candidates for president, the push for switching to a “Medicare-for-all” system appears to be moderating a bit as more centrists call for less sweeping changes in the health care system, hoping to avoid blowback from people who like their current insurance and a united opposition from industry groups.
  • The Trump administration’s budget proposal would put money behind the effort to stop the spread of HIV. But while medical advances have made HIV eradication possible, obstacles remain, including the difficulty of reaching many of the communities that need the support.

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

Julie Rovner: Fortune’s “Death by a Thousand Clicks: Where Electronic Health Records Went Wrong,” by Erika Fry and KHN’s Fred Schulte

Joanne Kenen: NBC’s “Surprise Medical Bills Lead to Liens on Homes and Crippling Debt,” by Lindsey Bomnin and Stephanie Gosk

Anna Edney: Stat News’ “The Astounding 19-Year Journey to a Sea Change for Heart Patients,” by Matthew Herper

Alice Miranda Ollstein: The New York Times’ “States Seek Financial Relief for Family Caregivers,” by KHN’s Samantha Young

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcher or Google Play.

Lengthy Training, Licensing That Health Care Occupations Require Creating Significant Skill Gap For Those Looking For Jobs

“There just aren’t enough places and schools to get trained for how many people we need in those roles,” said economist Tara Sinclair. An aging population and increase in wealth has contributed to higher demand for health care services, and the skills gap is only going to have a greater impact on the booming industry as it grows. In other health industry news: costly insurance, a hospital whistleblower case, health stocks, state employee premiums, cheating doctors and more.

Lengthy Training, Licensing That Health Care Occupations Require Creating Significant Skill Gap For Those Looking For Jobs

“There just aren’t enough places and schools to get trained for how many people we need in those roles,” said economist Tara Sinclair. An aging population and increase in wealth has contributed to higher demand for health care services, and the skills gap is only going to have a greater impact on the booming industry as it grows. In other health industry news: costly insurance, a hospital whistleblower case, health stocks, state employee premiums, cheating doctors and more.

In Op-Ed, Azar And Gottlieb Call On Industry To Make ‘Meaningful’ Changes To Address Teen Vaping Epidemic

HHS Secretary Alex Azar and FDA Commissioner Scott Gottlieb wrote that the government will step in if even further than it already has if the e-cigarette industry doesn’t take an active role in curbing the epidemic. Meanwhile, in a podcast, Gottlieb talks about his work at the agency and if he’ll ever return to the government.

In Op-Ed, Azar And Gottlieb Call On Industry To Make ‘Meaningful’ Changes To Address Teen Vaping Epidemic

HHS Secretary Alex Azar and FDA Commissioner Scott Gottlieb wrote that the government will step in if even further than it already has if the e-cigarette industry doesn’t take an active role in curbing the epidemic. Meanwhile, in a podcast, Gottlieb talks about his work at the agency and if he’ll ever return to the government.

Health Plans For State Employees Use Medicare’s Hammer On Hospital Bills

States. They’re just as perplexed as the rest of us over the ever-rising cost of health care premiums.

Now some states are moving to control costs of state employee health plans. And it’s triggering alarm from the hospital industry. The strategy: Use Medicare reimbursement rates to recalibrate how they pay hospitals.  If the gamble pays off, more private-sector employers could start doing the same thing.

“Government workers will get it first, then everyone else will see the savings and demand it,” said Glenn Melnick, a hospital finance expert and professor at the University of Southern California. “This is the camel’s nose. It will just grow and grow.”

In North Carolina, for instance, state Treasurer Dale Folwell next year plans to start paying hospitals Medicare rates plus 82 percent, a figure he said would provide for a modest profit margin while saving the state more than $258 million annually.

“State workers can’t afford the family premium [and other costs]. That’s what I’m trying to fix,” he said. The estimated $60 million in savings to health plan members, he said, would mainly come from savings in out-of-pocket costs.

That approach differs from the traditional method of behind-the-scenes negotiating, in which employers or insurers ask for discounts off hospital-set charges that rise every year and generally are many times the actual cost of a service. Private-insurer payments, even with those discounts, can be double or triple what Medicare would pay.

This state-level activity could be a game changer, fueling a broad movement toward lower hospital payments. Montana’s state employee program made the adjustment two years ago; Oregon will start this fall. Delaware’s state employee program is also considering such “Medicare-based contracting” as one of several options to lower spending.

The bold move comes as other factors — notably marketplace competition among hospitals and high-deductible insurance plans aimed at getting consumers to “shop” for lower prices — have largely failed to slow rising health care premiums.

For hospitals, though, it can be viewed as “an existential threat,” said USC’s Melnick.

Indeed, the treasurer’s plan in North Carolina has drawn heated opposition, with a hospital industry-associated group running television ads warning of dire consequences, especially for rural hospitals, some of which they say might be forced to close. When the plan first came out, the state’s hospital association complained it would reduce statewide hospital revenue by an estimated $460 million.

Hospitals in areas with large concentrations of state workers “would be getting reimbursed less than the cost of care,” said Cody Hand, the association’s senior vice president and deputy general counsel. “Our biggest concern is this is not something that we were at the table for in discussion.”

Rural hospitals are particularly at risk, Hand said, because many were already teetering on the brink financially and the payment change would be an additional problem.

After months of acrimony, the North Carolina treasurer in mid-March agreed to grant a 20 percent boost in payment to rural hospitals that would give those hospitals an additional $52 million a year. On average, rural hospitals would be paid 218 percent of the Medicare rate.

Nationwide, hospitals have long complained that Medicare underpays them, and some hospital and business groups have warned employers that tying payments from state workers’ plans more closely to Medicare could result in higher charges to private-sector businesses.

“The result will be a cost shift of tens of millions of dollars to other Oregonians,” wrote the Oregon Association of Hospitals and Health Systems as lawmakers there debated a plan (that eventually became law) paying hospitals 200 percent of Medicare rates.

But policy experts are skeptical.

“Even if Medicare pays a bit below cost, 177 percent of Medicare should be at least 50 percent above cost,” said Mark Hall, director of the health law and policy program at Wake Forest University. “Is that a reasonable margin? I guess that’s up for debate, but to most people 50 percent margin might sound reasonable.”

Another concern some people have raised is that hospitals might refuse to join networks that employ these states’ Medicare-based strategy.

Indeed, Montana officials worked hard to get all hospitals in the state to agree to accept for the state worker program an average of 234 percent of Medicare’s reimbursement rates. A few hospitals held out, right up to the deadline, backing down only after pressure from employee unions.

The risk if hospitals opt to remain out-of-network is that workers could be “balance billed” for the difference between those Medicare-plus rates and their generally much higher charges, amounts that could be hundreds or even thousands of dollars.

To prevent that, Oregon lawmakers set the law’s in-network reimbursement for hospitals at 200 percent of Medicare. But those that opt out would receive only 185 percent.

The measure also bars hospitals from billing state workers for the difference between those amounts and the higher rates they might like to charge.

“Oregon thought it through,” said Gerard Anderson, a professor at Johns Hopkins who researches health care costs. “Hospitals need to go on a diet. The private sector has not put them on a diet, but maybe the state employee plans will.”

And In The Private Sector …

For decades, health insurance costs for employers and workers have risen faster than inflation despite various efforts to rein them in.

Currently, a typical family plan offered by employers tops $19,000 a year in premiums, while the price tag for a single employee is close to $7,000.

To be sure, hospital costs make up just one part of what premiums cover, along with doctor costs, drug payments and other services. Spending on hospital care accounts for about one-third of the nation’s $3.5 trillion health care tab.

“Health care is just becoming unaffordable,” said Cheryl DeMars, president and CEO of The Alliance, a group of 240 private-sector, self-insured employers that directly contract with hospitals in Wisconsin, northern Illinois and eastern Iowa.

In January, The Alliance began what it calls “Medicare-plus” contracting. As new hospitals join and existing contracts come up for renewal, the group is negotiating rates, basing them on what Medicare pays, DeMars said.

And it will likely save money: Under its old method of paying, the group was forking out between 200 to 350 percent of Medicare for inpatient and outpatient hospital services in its network. Two new contracts have been signed so far, averaging 200 percent of Medicare across inpatient, outpatient and physician payments, according to The Alliance.

“We want to pay a fair price and we’re in the process of determining what that should be,” said Kyle Monroe, vice president of network development for The Alliance. “Is it 200 percent? Is it something less?”

Under traditional payment methods, the negotiated prices insurers for public- and private-sector employers pay for hospital care vary widely, by facility, treatment and insurer. But they’re generally above Medicare rates by a substantial margin.

A group of self-insured employers recently commissioned Rand Corp. to study what private insurers pay hospitals in 22 states, compared with Medicare rates.

Initial results found private employers were paying, on average, 229 percent of Medicare rates to hospitals across the states in 2017, according to Chapin White, an adjunct senior policy researcher at Rand who conducted the study.

Economists like Melnick say they would prefer that market competition — consumers voting with their feet, so to speak — would drive business to the highest-quality, lowest-cost providers.

But, so far, hospitals have held the line against this scenario and that’s not likely to change. “They’re going to fight like crazy,” Melnick said.

Health Plans For State Employees Use Medicare’s Hammer On Hospital Bills

States. They’re just as perplexed as the rest of us over the ever-rising cost of health care premiums.

Now some states are moving to control costs of state employee health plans. And it’s triggering alarm from the hospital industry. The strategy: Use Medicare reimbursement rates to recalibrate how they pay hospitals.  If the gamble pays off, more private-sector employers could start doing the same thing.

“Government workers will get it first, then everyone else will see the savings and demand it,” said Glenn Melnick, a hospital finance expert and professor at the University of Southern California. “This is the camel’s nose. It will just grow and grow.”

In North Carolina, for instance, state Treasurer Dale Folwell next year plans to start paying hospitals Medicare rates plus 82 percent, a figure he said would provide for a modest profit margin while saving the state more than $258 million annually.

“State workers can’t afford the family premium [and other costs]. That’s what I’m trying to fix,” he said. The estimated $60 million in savings to health plan members, he said, would mainly come from savings in out-of-pocket costs.

That approach differs from the traditional method of behind-the-scenes negotiating, in which employers or insurers ask for discounts off hospital-set charges that rise every year and generally are many times the actual cost of a service. Private-insurer payments, even with those discounts, can be double or triple what Medicare would pay.

This state-level activity could be a game changer, fueling a broad movement toward lower hospital payments. Montana’s state employee program made the adjustment two years ago; Oregon will start this fall. Delaware’s state employee program is also considering such “Medicare-based contracting” as one of several options to lower spending.

The bold move comes as other factors — notably marketplace competition among hospitals and high-deductible insurance plans aimed at getting consumers to “shop” for lower prices — have largely failed to slow rising health care premiums.

For hospitals, though, it can be viewed as “an existential threat,” said USC’s Melnick.

Indeed, the treasurer’s plan in North Carolina has drawn heated opposition, with a hospital industry-associated group running television ads warning of dire consequences, especially for rural hospitals, some of which they say might be forced to close. When the plan first came out, the state’s hospital association complained it would reduce statewide hospital revenue by an estimated $460 million.

Hospitals in areas with large concentrations of state workers “would be getting reimbursed less than the cost of care,” said Cody Hand, the association’s senior vice president and deputy general counsel. “Our biggest concern is this is not something that we were at the table for in discussion.”

Rural hospitals are particularly at risk, Hand said, because many were already teetering on the brink financially and the payment change would be an additional problem.

After months of acrimony, the North Carolina treasurer in mid-March agreed to grant a 20 percent boost in payment to rural hospitals that would give those hospitals an additional $52 million a year. On average, rural hospitals would be paid 218 percent of the Medicare rate.

Nationwide, hospitals have long complained that Medicare underpays them, and some hospital and business groups have warned employers that tying payments from state workers’ plans more closely to Medicare could result in higher charges to private-sector businesses.

“The result will be a cost shift of tens of millions of dollars to other Oregonians,” wrote the Oregon Association of Hospitals and Health Systems as lawmakers there debated a plan (that eventually became law) paying hospitals 200 percent of Medicare rates.

But policy experts are skeptical.

“Even if Medicare pays a bit below cost, 177 percent of Medicare should be at least 50 percent above cost,” said Mark Hall, director of the health law and policy program at Wake Forest University. “Is that a reasonable margin? I guess that’s up for debate, but to most people 50 percent margin might sound reasonable.”

Another concern some people have raised is that hospitals might refuse to join networks that employ these states’ Medicare-based strategy.

Indeed, Montana officials worked hard to get all hospitals in the state to agree to accept for the state worker program an average of 234 percent of Medicare’s reimbursement rates. A few hospitals held out, right up to the deadline, backing down only after pressure from employee unions.

The risk if hospitals opt to remain out-of-network is that workers could be “balance billed” for the difference between those Medicare-plus rates and their generally much higher charges, amounts that could be hundreds or even thousands of dollars.

To prevent that, Oregon lawmakers set the law’s in-network reimbursement for hospitals at 200 percent of Medicare. But those that opt out would receive only 185 percent.

The measure also bars hospitals from billing state workers for the difference between those amounts and the higher rates they might like to charge.

“Oregon thought it through,” said Gerard Anderson, a professor at Johns Hopkins who researches health care costs. “Hospitals need to go on a diet. The private sector has not put them on a diet, but maybe the state employee plans will.”

And In The Private Sector …

For decades, health insurance costs for employers and workers have risen faster than inflation despite various efforts to rein them in.

Currently, a typical family plan offered by employers tops $19,000 a year in premiums, while the price tag for a single employee is close to $7,000.

To be sure, hospital costs make up just one part of what premiums cover, along with doctor costs, drug payments and other services. Spending on hospital care accounts for about one-third of the nation’s $3.5 trillion health care tab.

“Health care is just becoming unaffordable,” said Cheryl DeMars, president and CEO of The Alliance, a group of 240 private-sector, self-insured employers that directly contract with hospitals in Wisconsin, northern Illinois and eastern Iowa.

In January, The Alliance began what it calls “Medicare-plus” contracting. As new hospitals join and existing contracts come up for renewal, the group is negotiating rates, basing them on what Medicare pays, DeMars said.

And it will likely save money: Under its old method of paying, the group was forking out between 200 to 350 percent of Medicare for inpatient and outpatient hospital services in its network. Two new contracts have been signed so far, averaging 200 percent of Medicare across inpatient, outpatient and physician payments, according to The Alliance.

“We want to pay a fair price and we’re in the process of determining what that should be,” said Kyle Monroe, vice president of network development for The Alliance. “Is it 200 percent? Is it something less?”

Under traditional payment methods, the negotiated prices insurers for public- and private-sector employers pay for hospital care vary widely, by facility, treatment and insurer. But they’re generally above Medicare rates by a substantial margin.

A group of self-insured employers recently commissioned Rand Corp. to study what private insurers pay hospitals in 22 states, compared with Medicare rates.

Initial results found private employers were paying, on average, 229 percent of Medicare rates to hospitals across the states in 2017, according to Chapin White, an adjunct senior policy researcher at Rand who conducted the study.

Economists like Melnick say they would prefer that market competition — consumers voting with their feet, so to speak — would drive business to the highest-quality, lowest-cost providers.

But, so far, hospitals have held the line against this scenario and that’s not likely to change. “They’re going to fight like crazy,” Melnick said.

University Of Illinois At Chicago Acknowledged Failure To Catch Warnings Signs Over Child Psychiatrist Who Violated Research Protocols

According to new documents, the University of Illinois at Chicago Institutional Review Board, the committee responsible for protecting research subjects, improperly fast-tracked approval of Dr. Mani Pavuluri’s clinical trial, didn’t catch serious omissions from the consent forms parents had to sign and allowed children to enroll in the study even though they weren’t eligible. Still, UIC officials have continued to blame only Pavuluri, and have downplayed the institution’s role in the research.

University Of Illinois At Chicago Acknowledged Failure To Catch Warnings Signs Over Child Psychiatrist Who Violated Research Protocols

According to new documents, the University of Illinois at Chicago Institutional Review Board, the committee responsible for protecting research subjects, improperly fast-tracked approval of Dr. Mani Pavuluri’s clinical trial, didn’t catch serious omissions from the consent forms parents had to sign and allowed children to enroll in the study even though they weren’t eligible. Still, UIC officials have continued to blame only Pavuluri, and have downplayed the institution’s role in the research.

State Highlights: Baltimore Mayor Leaves Hospital Board After Profit-Making Concerns Raised; ‘Dehumanizing’ Medical Care At N.Y. Jail Haunts Physician

Media outlets report on news from Maryland, New York, Texas, Kansas, Connecticut, California, Florida, Wisconsin, Minnesota, Arizona, Oregon, Massachusetts, Rhode Island and Louisiana.

When Drug Costs Get Too High, Patients Are Skipping Doses Or Just Not Taking Medication

Experts are worried this behavior could be extremely dangerous for the patients. “We have lots of treatments where if you don’t take them exactly as prescribed, you might be doing more harm than good,” said Stacie Dusetzina, a health policy researcher at Vanderbilt University. Other ways patients are trying to control costs are by asking for cheaper drugs from doctors or seeking out alternative therapies. Meanwhile, Ohio’s attorney general is suing UnitedHealth’s OptumRx unit alleging it overcharged the state for prescription drugs.

New Ads Accuse Trump Of Wanting To ‘Slash Our Health Care To The Bone’ With Proposed Medicaid, Medicare Cuts

The ad is the latest example of Democratic attacks on the Trump administration’s budget proposal for fiscal year 2020. Democrats saw health care as a winning issue in the midterms, and are hoping to repeat that success in upcoming elections. Other Medicaid news comes out of Tennessee, Ohio, Georgia and Idaho.

Did Your Doctor ‘Ghost’ You? An Employment Contract May Be To Blame

When Don Cue developed a bladder infection last fall, he called his longtime urologist’s office for a urine culture and antibiotics. It was a familiar routine for the two-time prostate cancer survivor; infections were not uncommon since he began using a catheter that connects to his bladder through an incision in his abdomen.

When Cue called this time, a receptionist told him that his physician, Dr. Mark Kellerman, no longer worked at the Iowa Clinic in Des Moines, a large multi-specialty group. She refused to divulge where he’d gone.

“As a patient, ‘scared’ is too strong a word, but my feeling is, ‘What do I do now?’” said Cue, 58.

Flummoxed, he solved his immediate problem by taking leftover antibiotics he had in his medicine cabinet.

It was only later that he learned his doctor had been fired by the Iowa Clinic and planned to start a urology practice with clinic colleagues. And, under the terms of their contract with their former employer, the doctors were banned for a year from practicing within 35 miles of the clinic and from recruiting former patients to follow them.

Contracts with so-called restrictive covenants are now common in medicine, although some states limit their use. Noncompete clauses — common in many commercial sectors — aim to stop physicians or other health care professionals from taking patients with them if they move to a competing practice nearby or start their own. But what may be good for business is bad for patient care — and certainly disquieting for those whose doctors simply disappear.

One survey of nearly 2,000 primary care physicians in five states found that roughly 45 percent were bound by such clauses.

Continuity of care is important, doctors say, especially for patients with ongoing medical issues. Cutting off access to a doctor is different from disrupting someone’s relationship with a favorite hairstylist or money manager, they say.

“When doctors want to move from one practice to another, if they’ve got good therapeutic relationships with their patients, you’d think that public policy would want them to continue to treat these patients that trust them,” said Judy Conti, government affairs director at the National Employment Law Project.

Charlie Wittmack, a lawyer at Hartung Schroeder in Des Moines, is representing Kellerman and the two other urologists who were also fired in a lawsuit against the Iowa Clinic. The wrongful termination suit asks the court to declare the physicians’ restrictive covenant provisions unenforceable. Wittmack said the controversy there was “tragic” for patients. “These are people who have prostate cancer or are in extreme pain because of kidney stones or have blood in their urine.”

Ed Brown, the clinic’s CEO, said the noncompete agreements are not just about business but also help ensure that the Iowa Clinic can provide reliable services.

“Noncompetes are good for the patients because they help to provide stability within a practice and ensure continuity of care,” Brown said recently in an email. Further, he added, noncompetes protect physicians by ensuring that other physicians in the practice are committed to the same agreement and can’t abandon it without proper notice.

The urologists “believe they can make more money elsewhere, and they don’t want to be held to any contractual responsibilities,” he said.

Even when longtime patients go sleuthing to find their doctors’ new offices, they may not be accepted into those practices. Hospitals and clinics say they have little choice but to respect the terms of business agreements that others have negotiated.

UW Health, the health care system for the University of Wisconsin-Madison, recently hired three primary care doctors who had worked across town, said Dr. Sandra Kamnetz, vice chairwoman of clinical care for the Department of Family Medicine and Community Health at the University of Wisconsin’s School of Medicine and Public Health. They are taking great pains not to treat any of the new doctors’ former patients because the terms of the doctors’ contracts with their old employer prohibit them from taking care of former patients for two years.

Staff at the UW clinics ask prospective patients if they’ve ever been seen by one of the doctors. They then check the patient’s electronic health record to confirm there are no messages, prescription refills or other recent contact with the new UW Health doctors and that patient at the previous job, said Kamnetz.

When Don Cue called his longtime urologist in Des Moines to get an appointment, the receptionist said the doctor no longer practiced there and would not explain why or where he had gone.(Courtesy Don Cue)

“Patients get frustrated, but what they may not understand is that this is a legal thing that we have to abide by,” she said.

Whether noncompete clauses are binding in health care — especially when patient care is disrupted — is a point legal scholars debate. In general, to be enforceable, the agreements must be reasonable and narrowly drawn so that they protect an employer’s legitimate business interest but don’t unduly restrict a doctor’s ability to make a living.

Courts may weigh whether enforcing a noncompete clause would create a physician shortage in a particular region or specialty. The guiding principle is patient choice, said David J. Clark, a partner in the New York office of the law firm Epstein Becker Green who has analyzed state noncompete statutes in health care.

“No court is going to deny a patient who wants to go see a doctor of her choice,” Clark said.

Most disputes are settled before they make it to court, however.

A recent report by the Trump administration evaluating how to promote choice and competition in health care recommended that states examine noncompete agreements for their effect on patients’ access to care and the supply of providers.

Several states, including Massachusetts and Colorado, that allow noncompete clauses in employment contracts generally won’t enforce them against doctors, according to Clark’s analysis.

Other states, such as Texas and Tennessee, place limits on the agreements. In Texas, for example, a noncompete pact must allow doctors to have access to a list of their patients in the past year and access to their medical records, among other things, Clark found.

Medical board rules take it a step further. “In Texas, when a physician leaves, the practice is required to cooperate with a physician who wants to put up a notice that says this is where that physician can now be contacted,” said Kathy Poppitt, a partner in the health care and government and internal investigations practices at the Austin, Texas, office of King & Spalding.

The American Medical Association, which represents doctors, doesn’t oppose restrictive covenants outright, although its policy notes they can limit patients’ choices. “To the extent that these agreements disrupt continuity of care and disrupt patient choice, this is of great concern to the AMA,” said Dr. Patrice Harris, the organization’s president-elect.

For patients in central Iowa, the departures of longtime urologists at the Iowa Clinic is dizzying. After Kellerman and his colleagues left, five of the clinic’s remaining seven urologists submitted their resignations. They are also subject to noncompete restrictions. They left the practice in mid-February.

Brown, the clinic CEO, said the urology department has replaced four of the eight urologists and has nine nurse practitioners or physician assistants to treat patients. The clinic is continuing to recruit physicians and advanced practice providers like nurse practitioners.

Susan Murphy, 72, has seen a number of doctors in the urology department. Dr. Richard Glowacki, one of the urologists who left with Kellerman, performed surgery to remove her kidney stones more than a decade ago. Another, Dr. Stephanie Pothoven, did surgery to repair her prolapsed uterus a few years ago.

Murphy said she got a letter from Pothoven announcing her departure. It didn’t provide details about where she would be going.

“I’ve got it etched in my brain to find out where they went,” she said. She has no plans to return to the Iowa Clinic. “Somehow they lost sight of patient care and were more concerned about the bottom line,” she said.