Tagged Insurance

Must-Reads Of The Week From Brianna Labuskes

Happy Friday! We have officially made it through the dog days of summer. (Fun fact: Apparently those are set dates and not just … a vague concept of “sometime in August when it’s hot.” I was today-years-old when I learned that.) But that doesn’t mean we’ve had even close to a dearth of health care news. So buckle up, here’s what you may have missed this week.

Planned Parenthood officially rejected Title X funding rather than comply with what it deemed a “gag rule” on its providers. The price tag on that decision? About $60 million annually. Clinics across the country are bracing for the financial hit, and the organization is leaning heavily on donors to try to stanch the wound.

The New York Times: Planned Parenthood Refuses Federal Funds Over Abortion Restrictions

The Associated Press: Planned Parenthood Sees Swift Fallout From Quitting Program


Meanwhile, it was a bit of a roller-coaster week in terms of whether President Donald Trump would be pushing for background checks in his proposal to stem gun violence. After the dual mass shootings in El Paso, Texas, and Dayton, Ohio, Trump seemed open to the strategy, despite it being less than popular with his party. Then The Atlantic reported that following a phone call with NRA chief Wayne LaPierre, Trump softened that stance. Then Trump claimed the media reports were inaccurate and that some kinds of background checks were still on the table.

Pretty much nothing seems set in stone yet (at least publicly), and we should all just wait to see what comes in the official proposal likely to coincide with Congress’ return in September.

The Atlantic: Trump’s Phone Calls With Wayne LaPierre Reveal NRA’s Influence

Politico: Trump to Release Gun Control Proposals, Including Background Check Updates

We did find out this week exactly what was in the Parkland students’ plan, though. And let me tell you, they swung for the fences with it. Included in the roadmap: a national licensing and gun registry; a mandatory gun buyback program for assault-style weapons; a limit of one firearm purchase a month per person; the establishment of a national director of gun violence prevention; and a new multistep gun licensing system that would include in-person interviews and a 10-day waiting period before gun purchases are approved.

USA Today: Parkland Students Announce Gun Control Plan, Aim to Halve Gun Violence Rate in 10 Years


The Trump administration (and the Obama administration, as well) has long chafed at the restrictions that come with the Flores Settlement Agreement, which offers protection to detained immigrant children in U.S. custody. So, this week it released a new set of rules that effectively replace those regulations. Among other things, the new standards allow the government to detain children indefinitely instead of for 20 days, as laid out in the Flores agreement.

Reuters: Trump Imposes Rule Allowing U.S. to Detain Migrant Families Indefinitely

What’s definitely worth a read: the history behind the agreement and the story of the lawyers who have been defending it for decades. (“If someone had told me in 1985 that our work to protect children would continue into 2019, there is no way I would have believed it,” says Carlos Holguin, one of those original lawyers.)

The New York Times: The Flores Agreement Protected Migrant Children for Decades. It’s Under Threat.


Thirteen years ago, then-U.S. Surgeon General Richard Carmona was warned about some “disturbing” data that top federal scientists had discovered. It turned out that opioids were addictive and dangerous. The scientists recommended urgent action be taken to address the startling statistics, which hinted at a brewing crisis. Carmona agreed.

Yet the public was never told, and the momentum to do so fizzled. So what happened?

Politico: Federal Scientists Warned of Coming Opioid Crisis in 2006

Seemingly to further emphasize that the opioid epidemic’s early days were marked by (in retrospect) devastating missed opportunities and deep regret, another story looks at a little town in Appalachia in the late 1990s. There, a nun, a doctor and a lawyer were among the nation’s first activists to sound the alarm. Their efforts were ultimately crushed by Purdue Pharma.

The New York Times: A Nun, a Doctor and a Lawyer — and Deep Regret Over the Nation’s Handling of Opioids

Meanwhile, a study links states’ expansion of Medicaid and the uptick of opioid treatment prescription rates.

The New York Times: Opioid Treatment Is Used Vastly More in States That Expanded Medicaid

And HHS is going to relax privacy regulations around how patients’ history with addiction is noted in their charts. The rules were put in place so that patients felt comfortable seeking medical help without law enforcement being alerted, but HHS Secretary Alex Azar said they’ve become a barrier to proper care.

The Associated Press: Feds to Revamp Confidentiality Rules for Addiction Treatment


The FDA is stepping in to join the CDC’s investigation into cases of lung disease across the country that seem linked to vaping.

The New York Times: Vaping Sicknesses Rising: 153 Cases Reported in 16 States

And don’t miss the story from KHN’s own Victoria Knight about a West Virginia physician who all the way back in 2015 filed a paper on a patient with a lung disease he suspected was tied to vaping.

Years Ago, This Doctor Linked a Mysterious Lung Disease to Vaping


In this week’s miscellaneous file:

  • Emergency care in financially depressed areas has become a standoff between insolvent rural hospitals and patients who don’t have the money to pay their ER bills. That fight is ending up in court so often that locals in a small Missouri town call it the “follow-up appointment.”

The Washington Post: The ‘Follow-Up Appointment’

  • One of the side effects of the growing popularity of at-home DNA tests? More and more, people who were born using artificial insemination are finding out that their fathers aren’t the sperm donors their mothers chose but rather the doctor who performed the procedure.

The New York Times: Their Mothers Chose Donor Sperm. The Doctors Used Their Own.

Also, be sure to check out the Dallas Morning News’ original reporting from April on one of the women featured in the story.

Dallas Morning News: ABC’s ’20/20′ Features Dallas Woman Who Found Out Her Mother’s Fertility Doctor Is Her Father

  • The patient suffers from tremors, difficulty walking and loss of balance. If the patient is a man, his symptoms would be enough to have doctors start wondering if it’s Parkinson’s. But if it’s a woman, it’s chalked up to the modern-day version of what Victorians called female “hysteria.”

ProPublica: In Men, It’s Parkinson’s. In Women, It’s Hysteria.

  • For years, residents of a Newark neighborhood have been saying their water tastes funny because of the dangerous levels of lead. And yet little has been done to fix it.

The New York Times: ‘Tasting Funny for Years’: Lead in the Water and a City in Crisis


That’s it for me, and have a great weekend!

Readers And Tweeters Take Dialysis Providers To Task: Nowhere But In The USA

Letters to the Editor is a periodic feature. We welcome all comments and will publish a selection. We edit for length and clarity and require full names.


The Undue Strain Of Dialysis

This is criminal, and the dialysis companies are not the only ones plundering the public (“Bill Of The Month: First Kidney Failure, Then A $540,842 Bill For Dialysis,” July 25). If you have no medical insurance and go to a doctor or hospital for medical care, you get charged tenfold what they accept from insurance companies. No properly run health care facility or doctor is losing money by accepting the agreed fees that the insurance companies pay. It’s absolutely outrageous to charge people who can least afford to pay up to 10 times the insurance charges. This scam has existed for decades and Congress has done nothing to protect consumers. My understanding is that no other country allows this discrimination against the poor. It’s time this outrageous exploitation of consumers be terminated.

— Jorg Meister, Middlegrove, N.Y.


— David W.S. Lieberman, Somerville, Mass.


This is in response to the bill of Sovereign and Jessica Valentine. It is ridiculous that Fresenius can charge them $14,000 per session when dialysis in Mexico using the same dialysis machines and procedures runs $400 USD per session. I take my mother there frequently for vacation, and we pay cash for her dialysis sessions.

—Martina Patella, Oakland, Calif.


— Andrea Hilderman, Manitoba, Canada


I was appalled to read your article on dialysis. I have a dear friend who built, opened and now operates a dialysis center in Thessaloniki, Greece. His father is a kidney specialist of 30+ years. He wrote the string below about dialysis in Greece when I forwarded the story to him:

“If you have insurance dialysis is free
Zero
Gratis
The average price that dialysis facilities in Greece charge the Greek NHS is around 136 euros.

If a patient who does not have insurance goes to a dialysis facility, he will be charged around 200 euros [about $223 in the United States]. That will be a great day for the facility.”

— Jerry Efremides, New York City


PBMs Put Patients In A Pickle

Besides the delay of generic drugs to market (“California Bill Would Fight Deals That Delay Generic Drugs,” Aug. 1), the pharmacy benefit managers (PBMs) have deals with the manufacturers, and pharmacies are not allowed to dispense a new generic because the PBM will not allow it to happen. Currently, there are Medicare plans that will not pay for generic Ventolin or Advair and demand that we dispense the brand name. It costs patients more, the plan more, and pharmacies lose by dispensing the brand-name drugs.

— David Smith, A & O Clinic Pharmacy, Salinas, Calif.


Winning The Match Game

This is not news (“American Medical Students Less Likely To Choose To Become Primary Care Doctors,” July 3). Medical students have been choosing the higher-end specialties over primary care for decades. I have been in the health care industry for over 40 years and have worked with literally thousands of physicians as an executive at Cedars-Sinai Medical Center and at my two companies, Practice Management Information Corp. and Flash Code Solutions LLC. My daughter and her husband are both radiation oncologists. Board certification in a higher specialty results in higher income and better career choices. Why settle for family practice if you can be an orthopedic surgeon?

— James B. Davis, president and CEO of Practice Management Information Corp., Beverly Hills, Calif.


— Dr. Jacqueline Ivey-Brown, Chicago


Meds And Momentary Mental Lapses

I read your Navigating Aging column about how many medications affect older adults (“Common Medications Can Masquerade As Dementia In Seniors,” July 18). I am 85 and had two knee replacement surgeries. Every time I have to go to the dentist, I must take four amoxicillin antibiotic tablets one hour before the dentist appointment. I noticed that after I took these antibiotics, my memory became very bad. After a few days, I felt like myself again.

— Janet Gileno, Bomoseen, Vt.


— Dr. James P. Richardson, Baltimore


Weighing Costs And Benefits Of Intravenous Iron

I feel your article about iron infusions (“Infusion Treatments — Needed or Not — Can Deplete Patients’ Wallets” Aug. 2) was biased. The article did not discuss the reasons a physician might choose to use IV iron to treat a patient versus oral iron – oral iron is not well tolerated and in the presence of inflammation in the body is not well absorbed. There are blood management programs in the United States that regularly use IV iron to treat anemia to decrease the patient’s risk for a blood transfusion. Although the cost of IV iron differs from one drug to another (the less expensive drugs, such as Ferrlecit, require multiple infusions), when you add up the cost, it includes not only the administration of the drug, but the nursing time and pharmacy preparation time for the medication.

One also must consider the risk for reaction when choosing a particular form of IV iron. Anaphylactic reactions can occur in patients receiving IV iron. Injectafer is one of the drugs we use on a regular basis because other forms of IV iron have a greater risk for reaction. One must consider the added cost of treating an anaphylactic reaction in a patient. Injectafer is a longer-acting form of IV iron; slow-release preparations such as ferric carboxymaltose (Injectafer) are first taken up by macrophages, the shell is digested, and the iron is released slowly over few days as opposed to near-immediate iron release found in other preparations that lead to more adverse reactions.

Although your story provided the experience of a single patient, it did not report the “whole” story about why physicians use IV iron. I receive no incentive for using one drug over another and must consider the patient’s clinical condition and the risks associated with giving IV iron. IV iron will correct iron levels more rapidly in patients because you can give a higher concentration of the drug, versus oral iron, which can take upward of a couple months to improve iron levels. Without really knowing the physician’s rationale for using IV iron in the case of the patient in the article, the author drew conclusions without having all the facts. I agree that we really need to look at health care costs, but the author of the article also failed to mention Big Pharma’s role in driving up the cost of health care.

— David J. Sterken, Grand Rapids, Mich.


— Jim McMullen, Kansas City. Mo.


As a Board Certified Oncology Pharmacist (BCOP), hematology/oncology is my field. Our institution used the cheaper iron (Venofer, which, at a low dose of 100 mg, needs to be given more often) for years. Medicare stopped paying for it because the charge was less than $100 — for some reason, the federal insurance program will not bother to pay for lower-cost IV drugs. Seriously. We switched our formulary iron to Injectafer, 750 mg per vial (cost to us ~$100-$750/vial, and the charge to patients per vial is about $1,000 and up), because we were reimbursed by Medicare for the Injectafer (because it is more than $100).

You are spot-on: The USA does not give our healthy iron-deficient patients enough time to benefit from oral iron. We inject IV iron for iron-deficiency anemia even when the patient does not suffer from anything other than bad lab tests.

Most hospitals and ambulatory care centers base their formulary decisions in large part on reimbursement. Medicare cannot bid for drug pricing and does not have a national formulary. This is a serious error on the part of the legislature and costs billions of dollars or more in taxpayer money that goes directly into the pocket of the pharmaceutical industry. Not paying for lower-cost IV drugs is just one very small example. It is terrible for the patients who must bear the cost of this discrepancy.

Reimbursement is a complex issue these days in no small part to the waste of the government.

— Mary Davis, Bellingham, Wash.


— Dr. Nicolas Argy, Boston


Shefali Luthra’s article on intravenous iron is rife with error. The pricing is not close, relative costs are wrong, and the implication of inappropriate use may be correct only based on utterly usurious prices listed.

More than 70% of those prescribed oral iron (PO) report significant gastrointestinal (GI) perturbation, intolerance and non-adherence. PO iron causes diarrhea and constipation, gastric cramping, metallic taste and thick, green tenacious stool. A year of therapy is required to replace stores and correct hemoglobin concentrations, all of which can be done with IV iron in 30 minutes. For people with hereditary bleeding disorders, there is zero credible expectation oral iron can keep up with losses since 10% (maximum) of PO is absorbed and PO raises a protein, hepcidin, which blocks iron absorption for 24 to 48 hours, making adequate repletion unrealistic.

InjectaFer is the most expensive iron. It costs $843 for 750 milligrams. Based on the preponderance of published evidence, a gram of iron in a single dose is about all we can utilize. The recommended dose of InjectaFer is 1,500 mg, $1,686 for a course (not vial) of iron. I think that wastes 500 mg, and there is double-blind, prospective evidence supporting that conclusion. It costs $100 for an office visit, chair time nursing and IVs, which takes 15 minutes. If you visit twice, that’s an additional $100.The charges you mentioned suggest that an institution in New York is fleecing its clients or insurance companies. This is usury and should be investigated and stopped.

The health economist Richard Pollock is mistaken. IV iron is widely used in Great Britain and it is extremely likely, not unlikely, a patient with chronic blood loss would get IV iron, irrespective of symptoms. That being said, Ferinject, the European name for InjectaFer, costs $140 per gram and health providers don’t have to deal with the ridiculous 750 mg vial we do. Feraheme costs $466 for 510 mg and requires two vials for a gram (1,020 mg). Four insurers allow me to give 1,020 mg in a single 30-minute infusion: the Blues, MedStar, Priority Partners and Cigna. The rest, including Medicare and Medicaid, require two visits. The only benefit is to our practice, which gets $100 for the completely unnecessary second visit. Despite making it clear the single 1,020 mg infusion is just as safe and effective, you halve the number of IVs and chances for minor reactions. It’s not covered, I have no choice. A third get it once; two-thirds, twice. We charge $932 plus a 6% markup to cover nursing costs and paraphernalia.

INFeD, or low molecular weight iron dextran, costs $243 per gram, comes as 100 mg vials and requires 10 vials for 1 gram. It takes an hour and is just as safe and efficacious.

The author is mistaken about Venofer, iron sucrose and Ferrlecit, ferric gluconate. You can’t give more than 200-250 mg because the sugar that carries iron does so much less tightly than the carbohydrate cores of InjectaFer, Feraheme and INFeD. To give a gram takes four to five visits. I never use these drugs for that reason, but I have no criticism of nephrologists who use them in dialysis with thrice-weekly visits. Venofer is $600 per gram (definitely more than INFeD) and Ferrlecit $1,000 per gram.

The medical system you wrote is screwing the community. IV iron is an unmet need. Oral iron cannot keep up with losses in abnormal uterine bleeding, be absorbed after bariatric surgery, makes inflammatory bowel disease worse because it is directly toxic to the intestinal epithelium and makes the wrong bacteria grow, and most of all doesn’t get to babies in the third trimester when the fetal brain needs iron for normal development. IV iron is a godsend for millions.

— Dr. Michael Auerbach, Baltimore


Correct By Degrees

The article “‘Climate Grief’: Fears About The Planet’s Future Weigh On Americans’ Mental Health” (July 18) said a recent report by the Intergovernmental Panel on Climate Change predicts that “by 2040 the Earth will warm by 2.7 degrees Fahrenheit (1.5 degrees Celsius).” As the report’s opening page (to which you link) says, by 2040 the Earth will have warmed by 2.7F above preindustrial levels. That’s total warming over 200 years, not future warming in the next 22 years.

The report also provides little support for the extreme claims that have terrified so many people — and, even less excusably, terrified so many children. This is also true of many reports by the major climate agencies.

The IPCC is the largest and best-run project of its kind, ever — an assessment of current science, which is then summarized for non-scientists. The tragedy is that its work has been largely abandoned for propaganda that exaggerates or even ignores the findings. I believe this has caused the gridlock in U.S. climate policy, so that we are not only unprepared for future extreme weather, but for the inevitable repeat of past extreme weather.

— Larry Kummer, editor of the Fabius Maximus website, Davenport, Iowa

Editor’s note: Warm thanks for pointing out the error. Our article has been updated.


— Michelle Mills, Chicago

— James C. Coyne, Philadelphia


Incrementally Exploited By Politicians

My copay requirement of $7,500 plus a monthly payment must be paid before my insurance pays any expenses. This is not health care. On paper I have health care; but the reality is I can’t afford to use it. It simply would stop me from bankruptcy in case of an emergency. However, these politicians and attorneys are making millions and getting a lot of publicity with every petition they file (“Biden’s ‘Incremental’ Health Plan Still Would Be A Heavy Lift,” July 22).

I feel the politicians should have the same health care choices as the American people. This would help them make better choices. Democrats and Republicans know health care in the U.S. is unaffordable. They should all be fired for not doing their job.

I also believe they should be able to serve only two terms, just like the presidential office. Politicians treat their position as a lifestyle instead of a job.

— Catherine Mossner, Gladwin, Mich.


The Battle For Uniform Excellence In Tribal Care

I’m part Inupiaq Eskimo from northwestern Arctic Alaska. The article “How The Eastern Cherokee Took Control Of Their Health Care”(July 22) states that the Cherokee benchmarked a program developed by Southcentral Foundation, a Tribal Health Organization originally created by an ANCSA (Alaska Native Claims Settlement Act) corporation but allowed to operate as a Public Law 93-638 entity. Awarded largely no-bid contracts through the Indian Health Service, Southcentral Foundation legally represents only shareholders of Cook Inlet Region Inc. — not all Alaska Native peoples.

To say SCF and other Alaska Natives run the program may be partly accurate, but it does not give credit to valuable contributors who served for decades ensuring we understood and implemented programs designed for all cultures — even families related to non-Indian Health Service beneficiaries.

Augusta Reimer is one of those deserving credit for this program. She was the first female Alaska Native/American Indian chief of an Indian Health Service department and was largely responsible for creating an atmosphere of wellness and creativity. Reimer, from IHS, and Mike McKeown from the University of Alaska-Anchorage designed my degree in human services; she spent hours working with interns and volunteers educating them on laws impacting us. Everyone who contributed deserves to be cited accurately and not just in a side note as other “Alaska Natives.”

The government has been pretty decent about encouraging native peoples’ self-determination, but it does not come without responsibility to follow the standards of care and communication and the law to ensure the quality and longevity of our programs.

The Indian Health Service was not approved to provide care to non-Indian health service beneficiaries. So the Nuka system of care — originally called Nutuqsiivik, which means “new beginnings” — was created to help identify gaps in data that were barriers to providing care to families with multiple health care providers and health and socioeconomic issues.

Indian Health Service programs have come a long way, but consistency and uniformity among tribal areas is highly concerning. In the age of a one-payer review, transparency is critically important. So is accuracy. Data and the lack thereof can cause a myriad of health and economic issues the patient or customer may have to deal with while their tribal organization isn’t monitored or corrected when needed. Without competition, I fear, these programs do not adequately respect patient needs, desires and have no real incentive to improve the quality of their care in order to keep their customers.

The Alaska legislature has created a committee specifically designed to educate lawmakers and the public on issues affecting the public and the tribes because there are so many of us. These programs do not live in a vacuum, but rather impact local economic development and regulatory control over your community. I encourage accountability among all parties and the mirroring of the U.S. Constitution and laws, so we have a legal template to follow.

— Cheryl Bowie, Anchorage, Alaska

KHN’s ‘What The Health?’: All About Medicare


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Before “Medicare for All,” there was just Medicare, the very popular program that serves 60 million Americans age 65 and older or younger people with certain disabilities.

But while Medicare is much loved by most of those it serves, it is anything but simple.

This week KHN’s “What the Health?” podcast takes a deep dive into Medicare. First, host Julie Rovner talks with Tricia Neuman, a senior vice president in charge of Medicare Policy at the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

Then, panelists Paige Winfield Cunningham of The Washington Post, Joanne Kenen of Politico and Kimberly Leonard of the Washington Examiner join Rovner for a discussion of some of the Medicare issues on the front burner in Washington in 2019.

Among the takeaways from this week’s podcast:

  • You can’t understand Medicare without getting a handle on its alphabet, from A to D.
  • Medicare also has a robust role for private insurance. About one-third of beneficiaries opt to join private insurance plans that contract with the federal government to provide an alternative to the traditional, fee-for-service government program. And that business is highly profitable for private insurance.
  • As Americans age, many fondly look forward to Medicare, imagining it will pay all their health bills. But the program has hefty cost-sharing requirements and doesn’t cover many expenses, including long-term nursing home care, dental care and most vision care.
  • Federal officials are eager to find ways to cut Medicare’s drug costs. But that raises many questions, such as whether Medicare should negotiate with drugmakers over prices or set up its own formulary of drugs it would cover.
  • An even harder question is how Medicare can work to control costs for the pricey drugs administered in doctors’ offices. Strong congressional lobbying from doctors and drugmakers has derailed efforts to do so in the past.
  • A vexing issue for some seniors is getting observation care at the hospital when they are not sick enough to be admitted but are too sick to go home. Patients receiving observation care likely face bigger cost sharing than if they were admitted and Medicare won’t pay for any nursing home care.

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcherGoogle PlaySpotify, or Pocket Casts.

Maryland’s Pilot Program To Offer Dental Coverage To Some Medicaid Recipients Brings Smiles To Desperate Patients

The program is aiming to catch dangerous dental problems before they can result in costly emergency room visits for the Medicaid recipients. Experts were muted in their praise. “It’s a very primitive first step for people who don’t have dental care,” said Dr. Louis DePaola, the associate dean at the University of Maryland’s School of Dentistry. Medicaid news comes out of Minnesota as well.

Alaska Governor Vetoes Bill To Restore Sharp Medicaid Cuts

Following the move by Gov. Mike Dunleavy and earlier action by the Alaska’s legislature, the state’s Medicaid program is expected to be cut by about 22%. Those state spending cuts mean Alaska will receive at least $127 million less in federal Medicaid matching funds. Medicaid news comes out of Oklahoma and Ohio, as well.

Cigna Explores Sale Of Its Group Benefits Insurance Business In Sign Insurer Intends To Focus On Health Care

Reuters reports that the division Cigna is looking to shed involves disability and life insurance. The move echoes ones made by other insurers looking to focus on health care. In other health industry news: a slew of departures from Apple’s health team, price transparency, hospital chains and purchases, and more.

Democrats’ Different Takes On Tackling Health Care

Kaiser Health News reporter Emmarie Huetteman joined Connecticut Public Radio’s Lucy Nalpathanchil on the “Where We Live” program Tuesday to talk about Democratic presidential candidates’ health care plans.

She discussed how the current Medicare program works and how some candidates, including Sens. Bernie Sanders of Vermont and Kamala Harris of California, have offered plans that would build a national health care program using Medicare as a guide. And she contrasted that with the plan pitched by former Vice President Joe Biden that would include a health plan offered by the government that consumers could opt into. She also took questions from listeners.

The program is available here.

‘Financially Devastating’ Air Ambulance Rides Can Both Save Lives And Ruin Them

Courts have ruled air ambulances can charge anything they want, and many patients are getting stuck with sky-high bills. Meanwhile, Texas lawmakers signed aggressive legislation into law that was meant to protect the state’s residents from surprise medical bills, but millions remain unprotected.

Courtroom Standoffs: Hospitals On Brink Of Insolvency Trying To Squeeze Money From Patients Who Just Don’t Have It

Emergency room visits can often lead to a court date when the patients can’t pay their bills. In a small Missouri town the practice has become so routine that some people here derisively refer to it as the “follow-up appointment.” In just this town, there can be dozens of cases each week. “I’m trying to make peace with the fact that this debt could sit on me forever,” said Gail Dudley, 31.

Sky-High Surprise Bills From Air Ambulance Rides Under Scrutiny In Georgia

More insured patients are being hit by surprise medical bills, with air ambulance charges among the worst. The prices can be in the tens of thousands of dollars and more than half of rides in the U.S. on air ambulances are not in the passenger’s insurance network. Georgia legislators say they want to do something about that. The state is also looking to overhaul other aspects of its EMS services. And in Virginia, regulators will seek public input from residents about actions the state could take to limit surprise bills.

Health Plan’s ‘Cadillac Tax’ May Finally Be Running Out Of Gas

The politics of health care are changing. And one of the most controversial parts of the Affordable Care Act — the so-called Cadillac tax — may be about to change with it.

The Cadillac tax is a 40% tax on the most generous employer-provided health insurance plans — those that cost more than $11,200 for an individual policy or $30,150 for family coverage. It was supposed to take effect in 2018, but Congress has delayed it twice. And the House recently voted overwhelmingly — 419-6 — to repeal it entirely. A Senate companion bill has 61 co-sponsors — more than enough to ensure passage.

The tax was always an unpopular and controversial part of the 2010 health law because the expectation was that employers would cut benefits to avoid paying the tax. But ACA backers said it was necessary to help pay for the law’s nearly $1 trillion cost and help stem the use of what was seen as potentially unnecessary care. In the ensuing years, however, public opinion has shifted decisively, as premiums and out-of-pocket costs have soared. Now the biggest health issue is not how much the nation is spending on health care, but how much individuals are.

“Voters deeply care about health care still,” said Heather Meade, a spokeswoman for the Alliance to Fight the 40, a coalition of business, labor and patient advocacy groups urging repeal of the Cadillac tax. “But it is about their own personal cost and their ability to afford health care.”

Stan Dorn, a senior fellow at Families USA, recently wrote in the journal Health Affairs that the backers of the ACA thought the tax was necessary to sell the law to people concerned about its price tag and to cut back on overly generous benefits that could drive up health costs. But transitions in health care, such as the increasing use of high-deductible plans, make that argument less compelling, he said.

“Nowadays, few observers would argue that [employer-sponsored insurance] gives most workers and their families excessive coverage,” he wrote.

The possibility of the tax has been “casting a statutory shadow over 180 million Americans’ health plans, which we know, from HR administrators and employee reps in real life, has added pressure to shift coverage into higher-deductible plans, which falls on the backs of working Americans,” said Rep. Joe Courtney (D-Conn.).

Support or opposition to the Cadillac tax has never broken down cleanly along party lines. For example, economists from across the ideological spectrum supported its inclusion in the ACA, and many continue to endorse it.

“If people have insurance that pays for too much, they don’t have enough skin in the game. They may be too quick to seek professional medical care. They may too easily accede when physicians recommend superfluous tests and treatments,” wrote N. Gregory Mankiw, an economics adviser in the George W. Bush administration, and Lawrence Summers, an economic aide to President Barack Obama, in a 2015 column. “Such behavior can drive national health spending beyond what is necessary and desirable.”

At the same time, however, the tax has been bitterly opposed by organized labor, a key constituency for Democrats. “Many unions have been unable to bargain for higher wages, but they have been taking more generous health benefits instead for years,” said Robert Blendon, a professor at the Harvard T.H. Chan School of Public Health who studies health and public opinion.

Now, unions say, those benefits are disappearing, with premiums, deductibles and other cost sharing rising as employers scramble to stay under the threshold for the impending tax. “Employers are using the tax as justification to shift more costs to employees, raising costs for workers and their families,” said a letter to members of Congress from the Service Employees International Union.

Deductibles have been rising for a number of reasons, the possibility of the tax among them. According to a 2018 survey by the federal government’s National Center for Health Statistics, nearly half of Americans under age 65 (47%) had high-deductible health plans. Those are plans that have deductibles of at least $1,350 for individual coverage or $2,700 for family coverage.

It’s not yet clear if the Senate will take up the House-passed bill, or one like it.

The senators leading the charge in that chamber — Mike Rounds (R-S.D.) and Martin Heinrich (D-N.M.) — have already written to Senate Majority Leader Mitch McConnell to urge him to bring the bill to the floor following the House’s overwhelming vote.

“At a time when health care expenses continue to go up, and Congress remains divided on many issues, the repeal of the Cadillac Tax is something that has true bipartisan support,” the letter said.

Still, there is opposition. A letter to the Senate on July 29 from economists and other health experts argued that the tax “will help curtail the growth of private health insurance premiums by encouraging employers to limit the costs of plans to the tax-free amount.” The letter also pointed out that repealing the tax “would add directly to the federal budget deficit, an estimated $197 billion over the next decade, according to the Joint Committee on Taxation.”

Still, if McConnell does bring the bill up, there is little doubt it would pass, despite support for the tax from economists and budget watchdogs.

“When employers and employees agree in lockstep that they hate it, there are not enough economists out there to outvote them,” said former Senate GOP aide Rodney Whitlock, now a health care consultant.

Harvard professor Blendon agrees. “Voters are saying, ‘We want you to lower our health costs,’” he said. The Cadillac tax, at least for those affected by it, would do the opposite.

KHN’s ‘What The Health?’: We Answer Your Questions


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This week, KHN’s “What the Health?” panelists answered questions submitted by listeners.

Among the topics covered were drug prices, how other countries provide and pay for health insurance and whether Congress might repeal the “Cadillac tax” on generous health plans.

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

Among questions the panel addressed:

  • Why [does] the health care debate in the U.S. seem to be focused on “Medicare for All” or strengthening the ACA, but no one is suggesting a universal multipayer system with price controls, as in France or Germany?
  • Can you please explain the policies that prevent the majority of Medicare patients from using third-party and manufacturers’ coupons for medications?
  • I know that you all talked about the update on the Cadillac tax, but I was wondering, what are the reasons why there is bipartisan support to repeal it?

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

Julie Rovner: The Washington Post’s “Illness Is One of Many New Factors to Count Against Immigrants Seeking U.S. Residency,” by Paige Winfield Cunningham

Anna Edney: Bloomberg News’ “Trump’s Canada Drug Import Plan Can’t Happen Without Big Pharma,” by Natalie Obiko Pearson and Simran Jagdev

Alice Miranda Ollstein: The Appeal’s “Ohio Governor Wants to Detain Fewer Mentally Ill People Before Trial,” by Kira Lerner

Caitlin Owens: JAMA Internal Medicine’s “Assessment of Out-of-Network Billing for Privately Insured Patients Receiving Care in In-Network Hospitals,” by Eric Sun, Michelle Mello and Jasmin Moshfegh

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcherGoogle PlaySpotify, or Pocket Casts.

Watch: Defining The Debate On Health Care Coverage Options

Public opinion polls show strong support for efforts to expand health coverage to more Americans.

But the list of proposals is long and the phrases used to describe them are often sloppy sloganeering.

Let us help you cut through the confusion.


Universal Coverage
Universal coverage means everyone has health insurance. Universal coverage can be provided by the government or a private company or some combination.


Single-Payer

In a single-payer system, the government pays all medical bills and sets prices for medical procedures. Canada has a single-payer system.


Socialized Medicine

Single-payer is not the same as socialized medicine, where the government owns the hospitals and clinics and employs the staffs. Great Britain’s National Health Service is an almost fully socialized health system.


Public Option

A public option is a plan sponsored by the government that individuals may purchase. Private insurance plans would remain and the public option plan would compete with them for customers.


'Medicare For All'

Medicare is the government program that insures 60 million people, most age 65 and older. It’s very popular.

Medicare, however, does not have very generous benefits compared with most private insurance plans. For example, you need separate insurance for prescription drugs and there is no limit on out-of-pocket costs.

Backers of “Medicare for All” proposals want to expand current Medicare to the entire population and enhance the benefits, too.

Medicare for All plans would minimize the current role of private insurance plans and some would eliminate them entirely.


Medicare For More

Some people would like to expand Medicare gradually. This is sometimes called “Medicare for More.” It might simply lower the eligibility age to 55 or 50. Or it could begin by adding children and gradually move the eligibility age up until everyone is covered.


Medicare Buy-In

Another variation would keep the current Medicare coverage but let people who are not now eligible purchase it. These Medicare buy-in proposals might allow people ages 50 to 64 to opt in. Or Medicare might be available for purchase to those who don’t get insurance at their job.

All these plans will cost the government — that is, taxpayers — more. How much more, well, that’s a whole ‘nother can of worms.

Going Down Fighting: Dying Activist Champions ‘Medicare For All’

When Santa Barbara lawyer-turned-activist Ady Barkan settled in to watch the second round of the Democratic presidential primary debates late last month, he had no idea his story would be part of the heated discussion.

Barkan, 35, who has amyotrophic lateral sclerosis, also known as ALS or Lou Gehrig’s disease, watched from his wheelchair as Massachusetts Sen. Elizabeth Warren described how he and his family had to raise money online to help pay for roughly $9,000 a month in health care costs not covered by his private health insurance.

“The basic profit model of an insurance company is taking as much money as you can in premiums and pay out as little as possible in health care coverage,” Warren said. “That is not working for Americans.”

But for Barkan, the moment was not about him.

“Elizabeth Warren’s point wasn’t just to mention my name, it was to call attention to the ways our broken health care system is hurting people across the country,” he said in an email interview.

Proponents of “Medicare for All” argue that a single, publicly funded insurance plan is the most effective and equitable way to deliver health care to all Americans. The concept, and whether it is politically feasible, is a dividing line among Democratic presidential candidates.

Barkan, a community organizer for the progressive advocacy group Center for Popular Democracy, was diagnosed with the neurodegenerative disease in 2016 at age 32. ALS causes muscles to atrophy, and patients to lose control of their bodies. Eventually, they are no longer able to breathe without assistance from a ventilator.

Barkan had already made a splash on the national political stage a few years earlier because of his campaign to persuade the Federal Reserve to focus on full employment and rising wages.

He and his wife, Rachael Scarborough King, a University of California-Santa Barbara English associate professor, had welcomed their first child earlier that year. As he put it, “life was perfect.” But the diagnosis plunged him into depression as he realized he would likely not live long enough to see his son grow up. People with ALS live an average of two to five years after diagnosis.

His fight for better access to health care began in 2017, when he protested the GOP tax cut bill on the grounds that removing that revenue from the federal government would make it more difficult to fund disability and Medicaid payments.

On the way home from the protest, he ended up on the same flight with former Arizona Sen. Jeff Flake, a Republican, and used the opportunity to have a gentle but pointed conversation about how the bill would devastate families like his. The exchange, captured on video, went viral and landed him more opportunities to share his story. By then, he needed a cane to walk and could no longer hold his baby.

When he was tapped to deliver the opening statement for a congressional hearing on Medicare for All in April 2019, Barkan could no longer speak and delivered his testimony via computer.

Barkan’s delivery at the hearing was stirring, even to some advocates who oppose his aims. Although Grace-Marie Turner, president of the Galen Institute, a public policy think tank that opposes increased government involvement in health care, testified at the same hearing against Medicare for All, she said she came away with great respect for Barkan.

“It is tragic that Ady is afflicted with ALS,” she said. “His ceaseless dedication to his cause and to his family, despite this devastating illness, shows true heroism.”

Barkan now requires round-the-clock home health aides, who account for the $9,000 out-of-pocket cost that Warren mentioned in the debate.

He spoke with California Healthline’s Anna Almendrala about the case for Medicare for All. He responded to email questions with a device that uses lasers to track his eye movements in order to type.

The following interview has been edited for length and clarity.

Q: Why do you think that Medicare for All, which was once considered fringe, is now a major part of the debate among Democratic nominees?

We’re the richest nation in the history of the world, and yet people are going bankrupt from their medical bills. Clearly, people’s frustration with the health care system is reaching a boiling point. Tens of millions of people don’t have any health insurance. Millions more have to fight with their insurance company every day, when those companies try to deny coverage for necessary care.

Q: What did you think about the debate, especially the portion in which candidates were asked about raising taxes on the middle class to pay for Medicare for All?

When I saw the moderate candidates argue that Medicare for All will never pass because Republicans are going to call us socialists, or attack us for raising taxes, that makes me sad. It’s an argument that doesn’t give voters enough credit. Yes, Medicare for All will probably mean a new tax, but that tax will be less, way less, than how much we’re spending on health care bills. Let’s make that argument and treat voters like adults.

Q: What do you think about California Sen. Kamala Harris’ health care plan, which would allow more people to opt into Medicare while also giving private insurers the chance to participate?

It raises a lot of questions for me, like why there’s such a long phase-in to cover everybody, and why Sen. Harris seems insistent on preserving a role for the private insurance industry. One thing I think candidates haven’t had to do so far is make a case for why private insurance companies are good, how they actually make life better for doctors or patients.

Q: While Medicare for All is becoming a more mainstream idea, politically it remains a long shot, even in a state like California. In its absence, what other options would you support?

There are various incremental reforms that would still be important improvements over the status quo. And I am not sure that incremental reforms will be more politically viable than Medicare for All.

The insurance industry will oppose a public option just like they’ll oppose single-payer. So, I guess I don’t really accept the premise of the question. But, putting that aside, I support any solution that gets more people the health care they deserve.

Q: How are Rachael and your son, Carl?

Rachael is enjoying teaching and looking forward to having time off when the new baby comes in November. That’s some news for your readers — she’s pregnant with our second!

Q: How are you doing physically, emotionally and mentally?

ALS is exhausting, infuriating and inserts itself into every moment of my life. I recently lost the ability to drive my wheelchair, so other people have to do it for me. But there are always glimmers of hope.

Very soon I will have access to eye-drive technology, which will allow me to drive my wheelchair with my eyes using my computer.

Q: What does it feel like to see yourself, struggling with a debilitating disease, as one of the most prominent faces of the Medicare for All movement?

I am glad to be able to use my personal tragedy to support transformative change, although I would obviously give up all the attention and accolades in a heartbeat if I could be healthy. I’d much prefer to make impact the way I was before my diagnosis.

Kansas Rejects Aetna’s Plan To Correct Problems With Its Private Medicaid Services

Aetna’s $1 billion-a-year business with Kansas is in jeopardy after the state rejects the contractor’s plan to fix problems with its services to KanCare, the state’s privatized Medicaid program. A letter from Kansas regulators says Aetna does not “present a clear path to compliance” and gives the company another shot to submit a corrective proposal. And other Medicaid news comes out of Louisiana and New Hampshire.

As States Strive To Stabilize Insurance Marketplaces, Insurers Return

Felicia Morrison is eager to find a health plan for next year that costs less than the one she has and covers more of the medical services she needs for her chronic autoimmune disease.

Morrison, a solo lawyer in Stockton, Calif., buys coverage for herself and her twin sons through Covered California, the state’s Affordable Care Act insurance marketplace. Morrison, 57, gets a federal subsidy to help pay for her coverage and she said that her monthly premium of $167 is manageable. But she spends thousands of dollars a year on deductibles, copayments and care not covered by her plan.

“I would just like to have health insurance for a change that feels like it’s worth it and covers your costs,” she said.

Her chances are looking up after lawmakers in Sacramento acted to enhance Covered California for 2020: They added state-funded tax credits to the federal ones that help people pay for coverage. And they reinstated a requirement for residents to have coverage or pay a penalty — an effort to ensure that enough healthy people stay in the insurance pools to offset the financial burden of customers with expensive medical problems.

An added benefit of these new policies: They appeal to insurers, which are expanding operations in the state, enhancing competition and offering consumers more choices.

California’s ACA exchange is not the only one benefiting from the renewed interest of insurance companies. Other states are expected to see more insurers enter or re-enter their marketplaces next year. That’s a critical signal, experts said, that the state-based marketplaces, which cover about 11 million people nationally, are becoming more robust and less risky for insurers — despite ongoing political and legal battles over the ACA.

“It’s taken longer than expected, due in part to the political rancor, but things seem poised to go well for next year,” said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation. “The ACA market is becoming a better place for insurers and consumers.”

Hempstead said 2020 would likely be the second year in a row with a net increase in the number of insurers participating and relatively modest premium increases nationwide.

Covered California said last month it expected an average premium increase of just 0.8% in 2020, far below this year’s hike of nearly 9% and the lowest since the agency began enrolling people in October 2013.

Peter Lee, Covered California’s executive director, attributed next year’s slender rate increase to the new state-funded premium subsidies and the requirement that people be insured.

California is one of a handful of states offering its own subsidies to residents — and the first to provide them to people making more than the federal income threshold of 400% of the federal poverty level. The subsidies are available to people earning up to 600% of the poverty level, which are individuals making up to about $75,000 a year and families of four with an annual income up to $154,500. The extra aid is expected to help 235,000 families who didn’t previously qualify for federal help.

California insurers have responded enthusiastically.

Anthem Blue Cross, which withdrew from most of the state’s individual market in 2018, is jumping back in. It will expand offerings in the Central Valley and return to the Central Coast, Los Angeles County and the Inland Empire. Anthem health plans will be available to nearly 60% of Californians next year, according to Covered California.

Blue Shield of California will also expand its HMO plan into parts of Tulare and Riverside counties and add coverage in Kings and Fresno counties. And the Chinese Community Health Plan will expand to cover all of San Mateo County next year.

“Nearly every Californian will be able to choose from two carriers, and 87% will have three or more choices in 2020,” said Lee. He urged people to shop among plans, including the new ones, to try and lower their premiums.

“I definitely plan to look carefully at all new options,” Morrison said.

Felicia Morrison, pictured with her husband, Bryant, and sons, Neil and Nathan, buys coverage for herself and her sons through Covered California. (Courtesy of Felicia Morrison)

Anthem, the nation’s second-largest health insurer with 40 million enrollees in 10 states, also plans to expand its ACA coverage in Virginia next year.

Centene, which has 12 million enrollees nationwide, plans to expand into new ACA markets next year as well, a company spokesperson said. It operates in 20 states, three of which it entered for the first time this year.

Two startup insurers, launched in recent years in part to serve the ACA marketplaces, also plan expansions in 2020. Bright Health, based in Minneapolis, announced in late July that it will offer ACA plans in six more states, on top of the four it now serves.

And New York-based insurer Oscar, which this year offered ACA plans in nine states, including California, plans to enter Colorado, Pennsylvania and Virginia, as well as new areas of New York and Texas.

Participation rates matter. A 2017 study by researchers at the Urban Institute found that the median monthly ACA premium that year was $451 in areas with one insurer compared with just over $300 in markets with three to five insurers and $270 in those with six or more insurers.

The number of insurance companies offering plans in ACA marketplaces has fluctuated. From 2014 to 2016, the average number was between five and six, according to the Kaiser Family Foundation. That number declined to 3.5 last year, following Republican threats to gut or replace the ACA and Trump administration changes to the marketplaces. (Kaiser Health News is an independent program of the foundation.)

Premiums in some areas rose 20% to 30%.

This year, the average number of plans ticked up to four.

But variability among states is still substantial. Four states — Alaska, Delaware, Mississippi and Wyoming — have just one ACA insurer this year. In contrast, seven states — California, Massachusetts, Michigan, New York, Ohio, Texas and Wisconsin – have eight insurers or more.

“Anything less than three is not a good situation,” said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University in Washington. “It looks like the marketplaces are stabilizing, though, and importantly the insurers are now making more money in this market.”

Kelley Turek, the director of commercial insurance at America’s Health Insurance Plans, the main trade group for health insurance companies, agreed. “The churn is finally slowing down,” Turek said. “Companies are staying and expanding into new geographical areas. We strongly agree the market works best when consumers have more choice.”

The ACA marketplaces still need more regulatory predictability, however, and political divisiveness over the ACA continues to undermine that, Turek said.

Threat Of Kaiser Permanente Strike Grows As California Union Overwhelmingly Approves Vote

The California union is the largest in a national coalition involved in contract negotiations with Kaiser Permanente, and the first to OK a future strike that could involve up to 80,000 workers. In other health care industry labor news: health care, research and technical employees at the University of California vote to ratify a new contract after two years of negotiations and work stoppages.

Charity Care Spending By Hospitals Plunges

California hospitals are providing significantly less free and discounted care to low-income patients since the Affordable Care Act took effect.

As a proportion of their operating expenses, the state’s general acute-care hospitals spent less than half on these patients in 2017 than they did in 2013, according to data the hospitals reported to California’s Office of Statewide Health Planning and Development.

The biggest decline in charity care spending occurred from 2013 to 2015, when it dropped from just over 2% to just under 1%. The spending has continued to decline, though less dramatically, since then.

The decline was true of for-profit hospitals, so-called nonprofit hospitals and those designated as city, county, district or state hospitals.

Health experts attribute the drop in charity care spending largely to the implementation of the federal Affordable Care Act, popularly known as Obamacare. The law expanded insurance coverage to millions of Californians, starting in 2014, and hospitals are now treating far fewer uninsured patients who cannot pay for the care they receive.

With fewer uninsured patients, fewer patients seek financial assistance through the charity care programs, according to the California Hospital Association.

Cori Racela, deputy director at the Western Center on Law & Poverty, countered that many people still need financial assistance because — even with insurance — they struggle to pay their premiums, copays and deductibles.

“The need for charity care has changed,” she said, “but it still exists.”

The data on charity care comes from most of the state’s general acute-care hospitals but does not include Kaiser Permanente hospitals, which are not required by the state to report their charity care totals. (Kaiser Health News, which produces California Healthline, has no affiliation with Kaiser Permanente.)

For 2017, California Healthline used data from 177 nonprofit hospitals, 80 for-profit hospitals and 54 city, county, district or state hospitals. The breakdown was similar for the other years, with slight fluctuations.

Nonprofit hospitals, whose charity care spending dropped from 2.02% of operating expenses to 0.91% over the five-year period, are required by state and federal law to provide “community benefits” in exchange for their tax-exempt status.

They can meet that requirement beyond providing free and discounted care in a variety of ways: They can offer community public health programs, write off uncollected patient debt and claim the difference between what it costs to provide care and the amount that they are reimbursed by government insurance programs.

Nonprofit “hospitals get tax-exempt status, but they don’t get it for free,” said Ge Bai, associate professor of accounting and health policy at Johns Hopkins University. Charity care “is part of the implicit contract between hospital and taxpayers.”

Bai sees the reduced spending on charity care as part of a trend of nonprofit hospitals acting more like their for-profit counterparts.

Many nonprofit hospitals “no longer consider charity care their primary mission,” she said. “They are making more and more money but they are dropping their charity care.”

The state and federal governments set no minimum requirements for charity spending by hospitals, although the California Attorney General has created standards for a few nonprofit hospitals that have changed ownership in recent years.

Jan Emerson-Shea, a spokeswoman for the California Hospital Association, said hospitals are giving back to their communities in ways beyond charity care.

“You see charity care declining, but Medi-Cal losses are increasing,” Emerson-Shea said. She pointed to the growing shortfalls many hospitals report from caring for more patients covered by the public insurance program. “Every Medi-Cal patient we treat we lose money on.”

Medi-Cal, the state’s Medicaid program for low-income residents, increased its rolls by 5.6 million — or about 70% — from 2013 to 2017.

Racela, of the Western Center on Law & Poverty, would like to see changes in California’s charity care rules to address high out-of-pocket costs.

And she wants hospitals to abide by the state law that requires them to inform patients that they may be eligible for charity care based on their income.

“There is still a big unmet need for charity care across the state,” Racela said.


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

To Save Money, American Patients And Surgeons Meet In Cancun

CANCUN, Mexico — Donna Ferguson awoke in the resort city of Cancun before sunrise on a sweltering Saturday in July.

She wasn’t headed to the beach. Instead, she walked down a short hallway from her Sheraton hotel and into Galenia Hospital.

A little later that morning, a surgeon, Dr. Thomas Parisi, who had flown in from Wisconsin the day before, stood by Ferguson’s hospital bed and used a black marker to note which knee needed repair. “I’m ready,” Ferguson, 56, told him just before being taken to the operating room for her total knee replacement. For this surgery, she would not only receive free care but would receive a check when she got home.

The hospital costs of the American medical system are so high that it made financial sense for both a highly trained orthopedist from Milwaukee and a patient from Mississippi to leave the country and meet at an upscale private Mexican hospital for the surgery.

Ferguson gets her health coverage through her husband’s employer, Ashley Furniture Industries. The cost to Ashley was less than half of what a knee replacement in the United States would have been. That’s why its employees and dependents who use this option have no out-of-pocket copayments or deductibles for the procedure; in fact, they receive a $5,000 payment from the company, and all their travel costs are covered.

Parisi, who spent less than 24 hours in Cancun, was paid $2,700, or three times what he would get from Medicare, the largest single payer of hospital costs in the United States. Private health plans and hospitals often negotiate payment schedules using the Medicare reimbursement rate as a floor.

Donna Ferguson talks with Milwaukee surgeon Dr. Thomas Parisi before her knee replacement surgery at Galenia Hospital in Cancun.(Rocco Saint-Mleux for KHN)

Ferguson is one of hundreds of thousands of Americans who seek lower-cost care outside the United States each year, with many going to Caribbean and Central American countries. A key consideration for them is whether the facility offers quality care.

In a new twist on medical tourism, North American Specialty Hospital, known as NASH and based in Denver, has organized treatment for a couple of dozen American patients at Galenia Hospital since 2017.

Parisi, a graduate of the Mayo Clinic, is one of about 40 orthopedic surgeons in the United States who have signed up with NASH to travel to Cancun on their days off to treat American patients. NASH is betting that having an American surgeon will alleviate concerns some people have about going outside the country, and persuade self-insured American employers to offer this option to their workers to save money and still provide high-quality care.

NASH, a for-profit company that charges a fixed amount for each case, is paid by the employer or an intermediary that arranged the treatment.

“It was a big selling point, having an American doctor,” Ferguson said.

The American surgeons work closely with a Mexican counterpart and local nurses. NASH buys additional malpractice coverage for the American physicians, who could be sued in the United States by patients unhappy with their results.

“In the past, medical tourism has been mostly a blind leap to a country far away, to unknown hospitals and unknown doctors with unknown supplies, to a place without U.S. medical malpractice insurance,” said James Polsfut, the chief executive of NASH. “We are making the experience completely different and removing as much uncertainty as we can.”

Medical tourism has been around for decades but has become more common in the past 20 years as more countries and hospitals around the world market themselves to foreigners.

There are, of course, risks to going outside the country, including the headache of travel and the possibility that the standards of care may be lower than at home. If something goes wrong, patients will be far from family and friends who can help — and it might be more difficult to sue providers in other countries.

Chasing Lower Costs

The high prices charged at American hospitals make it relatively easy to offer surgical bargains in Mexico: In the United States, knee replacement surgery costs an average of about $30,000 — sometimes double or triple that — but at Galenia, it is only $12,000, said Dr. Gabriela Flores Teón, medical director of the facility.

The standard charge for a night in the hospital is $300 at Galenia, Flores said, compared with $2,000 on average at hospitals in the United States.

A knee replacement surgery costs an average of about $30,000 at U.S. hospitals, but only $11,000 at Galenia Hospital in Cancun, Mexico.(Rocco Saint-Mleux for KHN)

A hallway inside Galenia Hospital in Cancun, Mexico.(Rocco Saint-Mleux for KHN)

The other big savings is the cost of the medical device — made by a subsidiary of the New Jersey-based Johnson & Johnson — used in Ferguson’s knee replacement surgery. The very same implant she would have received at home costs $3,500 at Galenia, compared with nearly $8,000 in the United States, Flores said.

Galenia is accredited by the international affiliation of the Joint Commission, which sets hospital standards in the U.S. But to help doctors and patients feel comfortable with surgery here, NASH and Galenia worked to go beyond those standards.

That included adding an extra autoclave to sterilize instruments more quickly, using spacesuit-like gowns for doctors to reduce infection risk and having patients start physical therapy just hours after knee- or hip-replacement surgery.

I. Glenn Cohen, a law professor at Harvard and an expert on medical tourism, called the model used by NASH and a few other similar operations a “clever strategy” to attack some of the perceived risks about medical tourism.

“It doesn’t answer all concerns, but I will say it’s a big step forward,” he said. “It’s a very good marketing strategy.”

Still, he added, patients should be concerned with whether the hospital is equipped for all contingencies, the skills of other surgical team members and how their care is handed off when they return home.

Officials at Ashley Furniture, where Ferguson’s husband, Terry, is a longtime employee, said they had been impressed so far. The company offers the option of overseas surgery through NASH at no cost — and with an incentive.

“We’ve had an overwhelming positive reaction from employees who have gone,” said Marcus Gagnon, manager of global benefits and health at Ashley, a Wisconsin-based company with 17,000 employees. Ferguson was the company’s 10th insured person to go to Cancun.

Donna Ferguson is wheeled into surgery at Galenia Hospital in Cancun, Mexico.(Rocco Saint-Mleux for KHN)

Ashley also has sent about 140 employees or dependents for treatments at a hospital in Costa Rica, and together the foreign medical facilities have saved the firm $3.2 million in health costs since 2016, he said.

“Ever after the incentive payments and travel expenses, we still save about half the cost of paying for care in the United States,” Gagnon said. “It’s been a nice option — not a magic bullet — but a nice option.”

NASH’s strategy has its skeptics.

“Building a familiar culture in a foreign destination may be appealing to some American consumers, but I do not see it as a sustainable business,” said Irving Stackpole, a health consultant in Rhode Island. “It’s not unusual for people thinking about this to have doctors, family and friends who will see this as a high-risk undertaking.”

Stackpole said only a limited number of Americans were willing — even with a financial incentive — to travel abroad because most perceive the care won’t be as good.

‘You Are Nuts For Doing This’

Ferguson’s knee started causing her trouble two years ago, and last fall a doctor recommended replacing it. She is on her feet most of the day assembling furniture toolkits at her job at American Furniture Manufacturing in Ecru, Miss. Terry Ferguson mentioned the Cancun option he had heard about at work. The couple pay $300 a month in premiums for family health coverage.

“I had a friend say, ‘You are nuts for doing this,’ but Dr. Parisi trained at Mayo, and you can’t do any better than that,” Ferguson said before the surgery. Also, having an American doctor meant that if something went wrong, she could file a malpractice suit in the United States, she added.

Dr. Thomas Parisi checks in on patient Donna Ferguson after the surgery. “Everything went great,” Parisi told her.(Rocco Saint-Mleux for KHN)

IndusHealth, Ashley’s medical travel plan administrator, arranged for her to get a physical exam, knee X-rays and heart tests near her home to make sure she was a good candidate for surgery. It even had her see a dentist to make sure she didn’t have an infection that could complicate her recovery. Parisi reviewed some of those records before Ferguson headed to Cancun.

The company also coordinated her medical care and made travel arrangements, including obtaining passports, airline tickets, hotel and meals for the couple.

In Mexico, the day before surgery, Ferguson had more X-rays and had her blood drawn. After lunch, the couple met with Noemi Osorio, a nurse, who reviewed Ferguson’s schedule and showed her the physical therapy facilities. Later, they met Parisi and the rest of the medical team.

“My job is pretty easy,” Parisi told her. “How you do over the next five or 10 years depends on how well you work with the physical therapy.”

The surgery began at 8:20 the next morning. Dr. Daniel Rios, an orthopedic surgeon who practices full time in Cancun, worked with Parisi. Rios, who had done a fellowship at Brigham and Women’s Hospital in Boston, checked on Ferguson for several days after the operation.

By 9:30 a.m., the operation was over, and at 11 a.m. she left the recovery area. Parisi checked on her there. “Everything went great,” he told her before heading to the airport for his 2:30 flight home.

Parisi said that the lack of English proficiency among some surgical staff members created “momentary delays” but that the bilingual surgical assistant helped.

A little more than three hours after the surgery, Ferguson was in her hospital room, and a physical therapist came and helped her out of bed. Using a walker, she gingerly took some steps to test out her new knee. By the next morning, she was on crutches walking the hallway and was discharged before noon. She stayed at her hotel 10 additional days while having physical therapy twice a day at the hospital.

“It’s been a great experience,” she said two days after the surgery. “Even if I had to pay, I would come back here because it’s just a different level of care — they treat you like family.”

Physical therapist Carlos Bauque helps Donna Ferguson walk as she recuperates from her surgery.(Rocco Saint-Mleux for KHN)