Rescued by an Air Ambulance, but Stunned at the Sky-High Bill
By PETER EAVIS
Clarence W. Kendall, a rancher in Pearce, Ariz., was moving bales on top of a haystack when he fell eight feet and struck his head on the corner of a truck below. His health insurance covered most of the cost of treating the head trauma caused by the accident.
But there was one bill, for $47,182, that his insurance did not pay.
It came from the company that transported Mr. Kendall in a helicopter ambulance to a hospital in Tucson on the day of the fall, nearly two years ago. “That initial bill nearly gave me a heart attack,” he said. “I thought they’d have to come and get me again.” Mr. Kendall has not paid the charge, which he said was equivalent to a year’s income. As a result, Air Methods, the nation’s largest air ambulance operator, with over $1 billion in revenue last year, is suing him.
Mr. Kendall’s case — and many others like it — provides a window into one of the most lucrative booms in health care in recent years. Air ambulance companies, which indisputably save lives, often in dramatic circumstances, have consistently raised their rates and aggressively expanded their networks, adding scores of expensive new helicopters.
The model has worked because health insurance has covered a large share of the bills.
Now changes in the air ambulance industry may leave patients even more financially vulnerable. Private insurance companies that offer ambulance coverage may not cover the full cost of air ambulances, leaving more patients to pay the difference. And in recent months, those insurers, under pressure to cut health care costs, have been reducing reimbursements for air ambulances. Medicare has typically covered a smaller portion of the bills than private insurance, and Medicaid even less.
Air Methods has often resorted to hard-edged legal tactics to get paid, according to interviews and dozens of lawsuits in courts across the country.
“They hounded us for a long time,” said Marc A. Dotson, of Butlerville, Ohio, who filed for bankruptcy in 2013 to avoid a demand for $22,150 from Air Methods after his wife was injured. As part of its efforts to collect, the company placed a lien on the Dotsons’ home, records show.
Pingree makes bid to allow US consumers to buy meds from Canada
by Jackie Farwell - BDN
U.S. Rep. Chellie Pingree has introduced legislation to allow U.S. residents to buy cheaper prescription drugs from Canada, answering calls for a federal fix just weeks after a judge overturned a similar state law in Maine.
Lawmakers are zeroing in on high drug prices as patients struggle to afford increasingly expensive medications, including generics.
Pingree’s bill would amend federal regulations that strictly limit the importation of prescription drugs from foreign countries for personal use. The Safe and Affordable Drugs from Canada Act is identical to legislation recently revived in the Senate by Sen. John McCain and co-sponsored by Sen. Susan Collins.
Under the legislation, U.S. residents with a valid prescription from a U.S. clinician could mail-order up to 90 days worth of medication, dispensed by a licensed pharmacist from an approved Canadian pharmacy. The dosage, form and potency would match that of drugs sold in the U.S. but at a significant savings to consumers, according to Pingree’s office.
The U.S. spent a record $374 billion on prescription drugs in 2014, according to one industry report. The country shells out nearly $1,000 per person each year on average, or about 40 percent more than in Canada.
In Maine, sales of pharmaceuticals at retail pharmacies totaled more than $1.5 billion in 2014.
House upholds veto of bill that would have helped smokers buy health insurance
AUGUSTA, Maine — The House of Representatives on Tuesday upheld Gov. Paul LePage’s veto of a bill that would have helped cigarette smokers better afford health insurance.
LD 135, sponsored by Rep. Linda Sanborn, D-Gorham, would have reduced from 50 percent to 20 percent the surcharges charged by small group and individual health insurance plans for consumers who smoke cigarettes.
LePage wrote in his veto letter that he objects to the measure because it would “set in stone” what many insurance carriers are already offering.
“Innovation in benefit design is the primary method of competition among carriers, which reduces cost to the consumer,” wrote LePage. “This bill hurts consumers by narrowing their future coverage options — if a carrier raises rates on smokers in the future, they can lower rates for nonsmokers. In other words, this bill reduces the financial benefit of avoiding tobacco.”
The House voted 83-64 in favor of sustaining LePage’s veto, which fell short of the two-thirds threshold required to override a veto.
The bill had passed with strong support in both the House and the Senate, without roll calls.
Vaccines: Kennedy raps CDC as corrupt
By Stefan Hard
MONTPELIER — A prominent member of the country’s most storied political family testified against the elimination of the state’s philosophical exemption for vaccines Tuesday, accusing the Centers for Disease Control and Prevention of corruption as he made his case to lawmakers.
Robert F. Kennedy Jr., the son of the slain former U.S. senator, attorney general and presidential candidate, told the House Health Care Committee that he supports vaccination. But he said some vaccines that contain thimerosal, a mercury-containing compound, can harm children.
Kennedy said the CDC, which determines which vaccines children should receive, has not done a proper job of protecting them and has bowed to pressure from pharmaceutical companies. He said the trillion-dollar industry spends twice as much on lobbying as any other industry.
“I’m pro-vaccine. I’ve had all six of my kids vaccinated,” Kennedy told the panel. “I think we ought to have state and federal policies that maximize vaccine coverage of the population. But I think we have to begin the process by making sure the vaccines are safe, efficacious and that the regulatory agency which recommends vaccines … and monitors them has integrity and credibility, and, unfortunately, that is not the case at the moment.”
Robert F. Kennedy Jr., the son of the slain former U.S. senator, attorney general and presidential candidate, told the House Health Care Committee that he supports vaccination. But he said some vaccines that contain thimerosal, a mercury-containing compound, can harm children.
Kennedy said the CDC, which determines which vaccines children should receive, has not done a proper job of protecting them and has bowed to pressure from pharmaceutical companies. He said the trillion-dollar industry spends twice as much on lobbying as any other industry.
“I’m pro-vaccine. I’ve had all six of my kids vaccinated,” Kennedy told the panel. “I think we ought to have state and federal policies that maximize vaccine coverage of the population. But I think we have to begin the process by making sure the vaccines are safe, efficacious and that the regulatory agency which recommends vaccines … and monitors them has integrity and credibility, and, unfortunately, that is not the case at the moment.”
HEPATITIS C AND HEDGE FUND PROFITEERS
MEET THE HEDGE FUND MANAGERS CASHING IN ON PREDATORY DRUG PRICING SCHEMES FROM GILEAD SCIENCES
For millions of Americans infected with Hepatitis C, the inflated prices of new Hepatitis C drugs from Gilead Sciences translate into limited access and prolonged illness.
The pharmaceutical giant is charging as much as $1,125 per pill and $94,500 for a course of its lifesaving treatments, forcing health care systems to limit access, robbing patients of a decent quality of life, and forcing many into serious health problems and complications.
Hedge fund managers are laughing all the way to the bank.
A pack of hedge fund managers bet big on Gilead price-gouging schemes in 2014, led by Julian Robertson of Tiger Management.
Robertson is a sort of hedge fund ringleader known for cultivating a network of protégés, or “Tiger Cubs.” Robertson showed no concern for Hepatitis C patients who can’t access the drug in a June 2014 interview on CNBC, instead touting Gilead’s profits:
I love Gilead right now. I think it’s fabulous…They’re going to get inundated with cash from the profits on the Hepatitis C drug. And in the past, they’ve done a wonderful job with handling their cash. I think Gilead is really pharmaceutical steal.[1]
According to SEC filings, other prominent hedge fund managers taking large stakes in Gilead during 2014 included:
- Steve Cohen of Point72, whose firm’s schemes to game drug trials resulted in extensive insider trading investigations and almost landed him in prison;
- Cliff Asness of AQR Capital Management, who has published extensive rants against Obamacare, and who sits on the board of the Manhattan Institute, which opposes Medicare drug price negotiations;
- Robert Mercer of Renaissance Technologies, a major backer of key players in the fight against Obamacare, including the Heartland Institute and presidential candidate Ted Cruz.
Two other high-profile hedge fund managers, Joel Greenblatt of Gotham Asset Management and Glenn Dubin of Highbridge Capital, also significantly increased their stakes in Gilead Sciences over the course of 2014.
Prior to the FDA approval of Gilead’s first breakthrough treatment, Sovaldi, in late 2013, these six hedge funds collectively reported owning $45 million worth of Gilead stock. At the end of 2014, they owned twelve times as many shares and nearly $844 million worth of Gilead stock.
The bet turned out well for the hedge fund managers — Gilead’s stock rose 84% over the time period studied. But things haven’t worked so well for Hepatitis C patients who still can’t get access to Gilead’s overpriced drugs.
Hepatitis C (HCV) is the most common life-threatening viral infection in the United States, with over 3.5 million people in the US and 170 million worldwide suffering from the disease. In New York City alone 146,500 people are thought to be infected with HCV, leading the New York City Department of Health to label it an epidemic.
A serious illness that attacks the liver, if left untreated HCV can lead to liver scarring (fibrosis), liver cancer, disability, and death.[3] In recent years deaths related to HCV in the US have surpassed those related to HIV.
But instead of raising alarm, these numbers are raising cash for profiteering drug companies and their backers.
Pharmaceutical giant Gilead Sciences is an industry leader, with a 75-80% U.S. market share in medications that have the potential to cure Hepatitis C.[4] Gilead’s breakthrough treatment, Sovaldi, has been proven to cure most patients within three months, yet is being sold at the ludicrous rate of $1,000 per pill, or $84,000 for the full round of treatment. A new combination treatment combining Sovaldi and a newer drug, Ledipasvir, was approved by the FDA in October 2014 and is being sold at a market price of $94,500 for a single 12-week course of treatment.
At the same time, the costs to produce these life-saving drugs are minimal: just $68-$137 for the full 12-week treatment, in Sovaldi’s case.[5] And to top it off, Gilead Sciences received millions in state and federal subsidies and loan guarantees.[6]
In February 2015, economist Jeff Sachs published an op-ed under the headline “The Drug that is Bankrupting America” that pointed out that the private-sector research and development costs for Sovaldi over a decade – about $300 million – were recouped in a few weeks of drug sales.[7]
Gilead made $10.3 billion from Sovaldi and doubled its overall returns in 2014 on the strength of its HCV medication sales alone.[8] In April 2015, it announced that its newer drug, Harvoni, had overall sales of $3.6 billion, putting the company on pace to achieve even higher revenues in 2015.[9]
While Gilead’s outrageous price scheme has thus far been accepted in the United States, the Indian government refused to give Gilead a patent for Sovaldi in the Indian market, finding that Gilead had made only “minor changes” to a previously patented molecule and had not demonstrated improved therapeutic efficacy.[10] As a result, patients in India can purchase a generic form of the Gilead product for only $300.[11]
Dr. Manica Balasegaram, Executive Director of Doctors without Borders and a proponent of India’s patent refusal, said that overcoming the “stronghold of Gilead’s monopoly” on HCV treatments is critical to treating patients in need around the world.[12]
http://hedgeclippers.org/hedgepapers-no-13-hepatitis-c-and-hedge-fund-profiteers/Indeed, a company with a cure is standing in the way of curing millions around the world.
Pharmaceutical firms contribute to wealth inequity
By Jonathan D. Rockoff and Ed Silverman
The Wall Street Journal, April 26, 2015
The Wall Street Journal, April 26, 2015
On Feb. 10, Valeant Pharmaceuticals International Inc. bought the rights to a pair of life-saving heart drugs. The same day, their list prices rose by 525% and 212%.
Neither of the drugs, Nitropress or Isuprel, was improved as a result of costly investment in lab work and human testing, Valeant said. Nor was manufacture of the medicines shifted to an expensive new plant. The big change: the drugs’ ownership.
“Our duty is to our shareholders and to maximize the value” of the products that Valeant sells, said Laurie Little, a company spokeswoman.
More pharmaceutical companies are buying drugs that they see as undervalued, then raising the prices. It is one of a number of industry tactics, along with companies regularly upping the prices of their own older medicines and launching new treatments at once unheard of sums, driving up the cost of drugs.
Since 2008, branded-drug prices have increased 127%, compared with an 11% rise in the consumer price index, according to drug-benefits manager Express Scripts Holding Co.
Early last year, Mallinckrodt PLC paid $1.4 billion for Cadence Pharmaceuticals, though the Ofirmev pain injections that were the crown jewel of the deal were projected to have just $110.5 million in 2013 revenue, according to a Mallinckrodt conference call with analysts discussing the deal. Three months later, the list price for a package of 24 Ofirmev vials jumped almost 2½ times to $1,019.52, according to health-care data firm Truven Health Analytics.
“It seemed like highway robbery,” said Erin Fox, who directs the drug-information service at University of Utah Health Care.
The price increases can be very lucrative for companies. Horizon Pharma PLC upped the price of Vimovo pain tablets after buying the rights from AstraZeneca in late 2013. On Jan. 1, 2014, its first day selling Vimovo, Horizon raised the list price for 60 tablets to $959.04, a 597% increase. Horizon raised the price again on Jan. 1 this year to $1,678.32 for the tablets.
After Valeant agreed to buy the drugs in early January, the company hired a consultant to look at their prices. The consultant found the prices didn’t reflect the benefits of the drugs to patients and the costs that hospitals save by using the medicines, the person said. Valeant decided to raise the price. The list price of a one-milliliter vial of Isuprel, a treatment for abnormal heart rhythms, jumped to $1,346.62, up from $215.46, according to Truven. Meantime, a two-milliliter vial of Nitropress, which combats dangerously high blood pressure and acute heart failure, increased from $257.80 to $805.61.
With Sickest Patients, Cost Sharing Comes at a Price
The growth in health care spending is slowing down, and one reason might be that cost sharing is rising.
The proportion of insured workers with at least a $1,000 deductible was 41 percent in 2014, quadruple that in 2006. Hidden in the numbers is the fact that increasing cost sharing for patients with chronic illnesses can backfire, causing their health care spending to go up, not down.
When patients face higher cost sharing for prescription drugs, they tend to cut back on them. That’s a finding from a recent study from the National Bureau of Economic Research by Peter Huckfeldt and colleagues, who examined employer-based health plan enrollees who use drugs to treat high cholesterol, hypertension and diabetes. They even found that patients cut their drug use when drugs were exempt from the deductible. Perhaps they did so because they did not understand the drugs had no deductible. They may also have cut back on visiting the doctor to get a prescription because the visits were subject to the deductible.
These kinds of cuts in care can be especially problematic for patients with more severe illnesses. A number of studies document the adverse effects of cost sharing on sicker patients. When applied indiscriminately, cost sharing can hurt the sicker patients by prompting them to delay or avoid the preventive care they need. A 2012 study showed that higher cost sharing reduces spending on physician visits and drugs, but can increase hospital spending. When Medicare beneficiaries face higher cost sharing, hospitalizations go up, not down, especially for those with chronic illnesses.
A 2010 study by the Harvard economist Amitabh Chandra and colleagues found that when cost sharing for physician visits and prescription drugs goes up, so does overall Medicare spending. They examined Medicare beneficiaries enrolled in supplemental health plans offered to public-sector retirees in California. Some of those plans raised co-payments for physician visits and prescription drugs in 2010. In response to this higher cost sharing, hospital spending grew substantially for the sickest patients. For every dollar saved on doctor and drug spending, Medicare’s hospital spending increased by more than $6.
After surveying evidence like that, in 2012 the Congressional Budget Office changed how it assesses the budget implications of Medicare policy proposals. If proposed Medicare legislation would decrease prescription drug use (e.g., by increasing cost sharing), it increases its estimate of overall Medicare spending to account for higher hospitalization costs the program would have to finance.
If higher cost sharing harms sicker patients and doesn’t even save money, insurers and public programs then might want to reconsider how they impose it. After all, insurers get the data on the diagnosis of chronic conditions from doctor and hospital billing. Cost sharing could be reduced specifically for drugs and visits meant to address chronic conditions.
New study gives more evidence of Obamacare gains for millions
As congressional Republicans move toward another vote on repealing the Affordable Care Act, new evidence was published Wednesday about the dramatic expansion of insurance coverage made possible by the law.
Nearly 17 million more people in the U.S. have gained health insurance since the law's major coverage expansion began, according to a study from the Rand Corp., a Santa Monica nonprofit research firm.
That tally takes into account 22.8 million newly insured people and 5.9 million who lost coverage in the last year and a half.
Researchers found gains across all types of insurance, including employer-provided coverage, government Medicaid programs and policies offered through state insurance marketplaces created by the law.
At the same time, the vast majority of Americans have seen no change in the source of their coverage, with 80% remaining in the same insurance, researchers found.
“The ACA has greatly expanded health insurance coverage in the United States with little change in the source of coverage for those who were insured before the major provisions of the law took effect,” concluded the authors of the study, published online by the journal Health Affairs.
How to ask your doctor how much it will cost. Why it’s important
by Diane Atwood
Last year, my family had some unexpected medical expenses.
The bills began to add up after I had my annual mammogram. Because there were some suspicious looking calcifications, I was called back for additional views. Next, I had a stereotactic biopsy, which was positive for DCIS (ductal carcinoma in situ or stage zero breast cancer).
After consulting with a breast surgeon and getting a second opinion, I opted for a lumpectomy. About an hour before the procedure, I had to go the radiology department for a wire localization so the surgeon would know exactly where to operate.
The total cost of all those procedures was just under $16,000.
Fortunately, I have health insurance and ended up paying only $800. I say only because it’s a far cry from $16,000, but it’s still a chunk of change and I don’t happen to have a lot of disposable income. (Let me add that I’m extremely grateful the DCIS was caught early and treated.)
Difficulty paying medical bills
I was able to pay my medical bills, but an estimated one in three people in the United States run into trouble.
It can be just as difficult for people who are insured as it is for those who aren’t.
Here’s why:
- high deductibles
- unaffordable or difficult to afford premiums
- out-of-pocket expenses
Whether you have health insurance or not, do you worry about the cost of your health care? If you do (or even if you don’t) have you ever considered asking your doctor or any other healthcare provider how much an office visit or a test or a procedure will cost?
When I was going through my experience, at no point along the way did it even occur to me to ask how much something would cost. At the time, all that mattered to me was where I would have things done and by whom.
But if I had asked, the law says I should expect an answer. Maine lawmakers passed two cost transparency bills last year.
LD 1642 requires health care practitioners and facilities to make the prices of their most frequently provided health care services and procedures available to all patients.
LD 1760 requires hospitals and ambulatory surgical centers to provide the average charge per procedure to any patient who asks. They must also give uninsured patients a total price estimate for their care as well as information about the hospital’s charity care policy. In retrospect, I wish I had spoken up.
In retrospect, I wish I had spoken up.
Why ask about cost?
Think about it. We ask in other areas of our lives. Something needs fixing and we want a detailed estimate. We need to buy a new appliance and we compare makes, models and prices. We go out to eat and make choices from a menu of options.
So why don’t we ask in the doctor’s office? Primarily, because we’re simply not used to asking says Poppy Arford, who recently gave a patient perspective on “Price & Cost Transparency” at the Maine Quality Counts Conference.
“We need to be asking because we need to understand that we’re actually paying the bill,” says Poppy.
“We’re paying through our health care premiums,” she says. “Nobody at the insurance company is taking money out of their pocketbook to pay for our healthcare. Every single bill is paid through health care premiums, through the money they get from you or me. We’re also paying through our tax dollars or through reductions in other needed health and welfare services. [And meanwhile,] premiums are going up, taxes are going up and services that we’re accustomed to are being cut or reduced or not happening at all.”
U.S. government urges high court to reject Maine bid to trim Medicaid rolls
AUGUSTA – The federal government is urging the U.S. Supreme Court to reject Republican Gov. Paul LePage’s request to decide whether Maine can eliminate Medicaid coverage for thousands of low-income young adults.
LePage’s administration asked the court to review the case in February after a federal appeals court denied its plan to remove about 6,000 19- and 20-year-olds from Maine’s Medicaid program.
In a court filing this week, the federal government said that a Supreme Court review isn’t necessary because the state’s arguments for why it should be allowed to trim the Medicaid rolls lack merit and because there’s no disagreement between lower courts to be settled.
No other state has sought to challenge the constitutionality of the requirement, “no other state has supported the petitioner’s challenge and even Maine’s own Attorney General has disavowed petitioner’s claims,” Solicitor General Donald Verrilli, Jr. said in the filing.
Attorney General Janet Mills declined to represent the administration because she said the case had little legal merit and wouldn’t be a good use of time and money. LePage’s administration hired private attorneys and as of January had spent nearly $53,000 on legal fees to pursue the case.
Federal officials maintain that the cuts are prohibited because states must maintain their levels of Medicaid coverage for children until 2019 or lose funding for the program under the Affordable Care Act. The Medicaid program considers 18-, 19- and 20-year-olds as children.
Our View: Maine women missing out on full Obamacare benefits
by PPH Editorial Board
Making it easier to get preventive care is a central tenet of the Affordable Care Act. And access to birth control is critical to the health and well-being of women and their families.
That’s why it’s so disappointing that recent research shows insurance companies in Maine and 14 other states are flouting a federal mandate that they provide free contraceptive coverage. Women aren’t getting the services they’re entitled to – and they won’t until consumers and consumer advocates are taken seriously and insurers are pressed for greater compliance and transparency.
The benefits of birth control are many: It offers women greater opportunities to get an education, participate in the workforce and raise happy, healthy, financially stable families.
But for many women, expense is a major barrier to using contraception. The most popular form of birth control – the pill – costs uninsured women $100 a month. The method with the lowest failure rate – the intrauterine device – has a lifespan of up to 10 years, but its out-of-pocket up-front cost is a steep $1,000.
Insurers are supposed to provide no-cost coverage of all 20 forms of birth control approved by the Food and Drug Administration. In a survey of over 100 insurers in 15 states, however, the National Women’s Law Center learned that this mandate hasn’t been carried out.
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