Drugs, Greed and a Dead Boy
by Nicholas Kristof
Andrew Francesco was a rambunctious, athletic and joyful child, but also a handful. When he was 5 years old, a psychiatrist prescribed Ritalin. As he grew older, he disrupted classes and was given a growing number of potent antipsychotic and other medications.
These didn’t work, so he was prescribed more. Pushed out of one school after another, Andrew grew frustrated, unhappy and sometimes alarming. His parents hid the kitchen knives. Then his mother died at 54; the family believes that the stress of raising Andrew was a factor.
When Andrew was 15, the medications caught up with him and he suffered a rare complication from one of them, Seroquel. One Friday he was well enough to go to school; on Sunday he was brain-dead.
That’s the story that Steven Francesco, a longtime pharmaceutical industry executive and consultant, tells in “Overmedicated and Undertreated,” his harrowing memoir of raising Andrew, his son. He makes clear that the larger problem — even from his view as an industry insider — is a sector that sometimes puts profits above public well-being.
Here’s the central issue: Children with emotional or mental disorders have become a gold mine for the drug industry. Psychiatric medicines for children account for billions of dollars in sales annually, and the market has boomed.
Between the mid-1990s and the late 2000s, prescriptions of antipsychotics for children rose about sevenfold.
And now the industry is getting even greedier. It is pushing for a First Amendment right to market its drugs for off-label uses, a path that would leave children like Andrew with mental health issues particularly vulnerable. You may think of free speech as a citizen’s right to dissent; pharmaceutical executives see it as a tool to market drugs for unapproved uses.
Two courts have ruled for the drug companies. That’s the triumph of an ideology that sees corporations as virtuous players endowed with individual freedoms, and regulators as untrustworthy Luddites.
“The recent court decisions could erode the F.D.A. approval process — put in place to protect the public — and threaten public health and patient safety,” warns Dr. Margaret Hamburg, until recently the Food and Drug Administration’s commissioner.
Experts on mental health fear that these rulings could lead to “terrible trouble by confounding science with marketing,” says Dr. Steven E. Hyman, a Harvard expert on psychiatry and former director of the National Institute of Mental Health.
Prices Are Higher When Hospitals Buy Doctors’ Practices. That’s Set to Change.
In the last few years, there has been something of an acquisition boom in doctors’ practices, as hospitals have been snapping them up.
Congress may have just cut a deal to slow down all that deal making. As part of the big budget agreement between the White House and congressional leaders, lawmakers want to take away a big incentive driving those mergers: the higher prices that doctors’ offices could charge Medicare when they were owned by a hospital.
The way it works now, an orthopedist who sets a bone in a private practice office is paid less than that same orthopedist in that same office if it is owned by a hospital. That difference can lead to bigger costs for the federal government — and for seniors, who have to pay a portion of the cost of their medical visits.
Hospitals argue that their higher payments rightly reflect their higher costs of providing care: They are bound by more requirements, tend to see sicker patients and have to subsidize costly services, like emergency rooms, that independent doctors do not. Nevertheless, the price differences have been criticized by the Medicare Payment Advisory Commission (MedPAC), which suggests improvements to Congress, and by the Obama administration, which has sought to equalize the prices in its budget.
The critics say that paying higher prices just because of who owns a practice drives up health care costs and distorts business incentives. Studies show that the mergers can also drive up costs for privately insured patients.
I wrote about this difference — and the push to eliminate it — earlier this year.
The current budget deal, if it passes, would let any current hospital-owned practice continue to pocket the higher prices, but it would prevent future practices from being able to get higher payments just by merging with a hospital. In order to get hospital-size payments in the future, doctors’ offices will need to be located “on campus.”
Failed Co-ops Add Ammunition to G.O.P. War on Health Law
By ROBERT PEAR
WASHINGTON — The financial failure of more than half the nonprofit health insurance companies created under the Affordable Care Act has handed Republicans a new weapon in their campaign against the health law, thrown the Obama administration on the defensive once again and left more than a half-million consumers in the cold.
“Any start-up faces the inherent risks of building a business from the ground up,” Dr. Mandy Cohen, the chief operating officer at the Centers for Medicare and Medicaid Services, told Congress on Tuesday at a contentious hearing of the House Ways and Means Subcommittee on Health. “As with any new set of business ventures, some co-ops have succeeded while others have encountered more challenges.”
So far, 12 of the 23 nonprofit insurance plans created as a result of President Obama’s signature domestic achievement have announced — voluntarily or under pressure from federal and state regulators — that they will not offer coverage next year. The most recent announcement came on Tuesday, just hours before the House hearing, when Consumers Mutual Insurance of Michigan posted a notice on its website saying it will not sell health plans in 2016 on the insurance marketplace.
New Yorkers were dismayed to receive notices over the weekend saying insurance policies from their co-op, Health Republic Insurance of New York, “will not be available after Nov. 30.” With more than 155,000 members, the New York insurer was the largest of the co-ops.
Congress created the co-ops to increase competition in state insurance markets and to offer additional choices to consumers, with the hope of holding down premiums. Democrats in Congress authorized the co-ops after concluding that they did not have the votes to create a government-run health plan — the so-called public option — to compete with private insurers.
Dr. Cohen told Congress on Tuesday that federal officials had not been lax or negligent in supervising the insurance co-ops.
But, she said, the co-ops faced stiff challenges as they struggled to create networks of doctors and hospitals, win the support of consumers, and compete with larger, more experienced insurers. Unlike established insurers, she said, the co-ops had no claims experience on which to base prices for the health plans they sold in the new public insurance exchanges, or marketplaces.
Congress, she said, also played a role, eliminating nearly 60 percent of the $6 billion that Democrats had hoped to offer the fledgling insurers.
Over all, the 23 co-ops have received $2.4 billion in federal loans to help pay start-up costs and to meet state solvency requirements. Dr. Cohen said the government would “use every tool available to recover taxpayer dollars” from the co-ops going out of business, but she declined to say how much she expected to recoup.
Representative Kevin Brady, Republican of Texas and chairman of the health subcommittee, said he doubted that the government would get its money back. The co-op program was fundamentally flawed, he said, because it was “artificially trying to inject competition in the market through shoddily designed start-ups.”
“Only in Washington would a group of bureaucrats think they knew how to micromanage competition instead of letting consumers and markets do what they do best,” Mr. Brady said.
Republicans predicted hundreds of millions of dollars will have been wasted.
But Representative Jim McDermott of Washington, the senior Democrat on the subcommittee, said Republicans had sabotaged the co-op program.
Dr. Cohen said Congress was responsible for some of the co-ops’ problems because Republicans had cut the budget so deeply.
http://www.nytimes.com/2015/11/04/us/politics/failed-co-ops-add-ammunition-to-gop-war-on-health-law.html?hpw&rref=us&action=click&pgtype=Homepage&module=well-region®ion=bottom-well&WT.nav=bottom-well
The Co-ops Collapse: How GOP & HMOs Undercut Obamacare's Nonprofit Option, Leaving 500K Uninsured
NOVEMBER 03, 2015
As the Obamacare open enrollment period begins, it’s the end for many healthcare co-ops, leaving hundreds of thousands of people scrambling to find coverage. The co-ops were founded to offer a cheaper alternative on insurance exchanges after Democrats stopped demanding a public option. But since going live three years ago, the co-ops have faced major cutbacks from the Republican-controlled Congress. Now the system is faltering, with at least eight health insurance co-ops shutting down. The co-op closures have left some 500,000 people without insurance—and a marketplace of fewer choices and higher prices. It’s the kind of scenario that advocates of a single-payer system warned about from the outset: With Obamacare relying on for-profit insurance companies to provide coverage, the market will find a way to squeeze out those who need it most. We are joined by three guests: physician, professor and single-payer advocate Dr. Steffie Woolhandler; Wendell Potter, a former insurance executive turned whistleblower; and Julia Hutchins, chief executive officer of Colorado HealthOP, a consumer-directed, nonprofit health cooperative in Colorado that was forced to shut down last month.
TRANSCRIPT
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: Open enrollment has begun in the health exchanges created under the Affordable Care Act for uninsured Americans. But this year, many shopping for coverage find themselves without their most affordable choice: independent, nonprofit cooperatives. The co-ops were founded to offer a cheaper alternative after Democrats stopped demanding a public option. But since going live three years ago, the co-ops have faced major cutbacks from the Republican-controlled Congress. The GOP has slashed funding by more than half and stopped the Obama administration from helping offset the unexpected high costs of covering sicker beneficiaries.
Now the system is faltering, with at least eight health insurance co-ops shutting down. A turning point came last month when all exchange providers were told the federal government would only pay them a small percentage of what they were expecting. The co-op closures have left some 500,000 people without insurance—and a marketplace of fewer choices and higher prices. It’s the kind of scenario that advocates of a single-payer system warned about from the outset: With Obamacare relying on for-profit insurance companies to provide coverage, the market will find a way to squeeze out those who need it most.
For more, we’re joined by three guests. Dr. Steffie Woolhandler is with us in New York, primary care physician, professor at the CUNY School of Public Health at Hunter College, co-founder of Physicians for a National Health Program, where she’s been a vocal advocate for single payer.
Wendell Potter also joins us in Philadelphia, a former insurance executive turned whistleblower and senior analyst on healthcare at the Center for Public Integrity.
And we go to Denver to Julia Hutchins, chief executive officer of Colorado HealthOP, a consumer-directed, nonprofit health cooperative in Colorado. Last month, state regulators forced Colorado HealthOP to shut down, saying it isn’t in strong-enough financial shape to pay out its members’ claims. Colorado HealthOP tried to challenge the closure but was denied.
We welcome you all to Democracy Now! Steffie Woolhandler, let’s begin with you. In New York, there are well over 200,000 people who are—have insurance under what’s called Health Republic, one of these healthcare co-ops. Suddenly, last Friday, to the shock of many—even people working within the system—they were told that this healthcare co-op will close by the end of the month. That’s November. That’s before you can even get coverage in this open enrollment period. The next time is January 1st. So they have to sign up twice—right now, to fill the gap to the end of December, and then, because of IT issues—they can’t just sign up now and get that insurance from now on in another company—they have to sign up now ’til the end of December, and sign up within the open enrollment period, like a day later, for getting insurance in January. Over 200,000 people are out of insurance.
1 Year Later, Reflections on Kaci Hickox's Quarantine
A year ago this week, Kaci Hickox was thrust into the media spotlight when she battled state-imposed quarantines in New Jersey and Maine.
Hickox is the nurse who returned to the U.S. from west Africa, where she had volunteered to treat Ebola patients. Looking back on the events that unfolded, Hickox says she hopes authorities learn from past mistakes.
Hickox was initially quarantined in New Jersey for more than three days before she was allowed to return to Maine. At the time, she lived in Fort Kent with her partner Ted Wilbur, a student at the University of Maine at Fort Kent.
During the week that followed, both she and Wilbur battled state and university policies that sought to restrict where the couple could go. Wilbur says fear took a powerful hold of the public.
"I didn't ever expect to deal with that kind of discrimination and hysteria that we saw," he says.
It started when Hickox and Wilbur decided to stop off in Freeport at the home of Wilbur's aunt and uncle. Wilbur says then-director of the state Center for Disease Control Sheila Pinette informed them that if they developed Ebola, the aunt and uncle would be quarantined, even if they had no symptoms.
"Kaci and I were forced to leave at 6 p.m. and make a six-hour drive to northern Maine — to Fort Kent — and she said before we left, 'Make sure you don't go to the bathroom along the entire way because you could infect someone,'" Wilbur says.
In emails obtained by MPBN, Hickox told Pinette she would not get out of the car, and she would call when they arrived in Fort Kent. Pinette replied that she did not agree for them to travel by private car. Instead, she wanted them transported in a medically equipped vehicle to treat Hickox if she became ill.
Hickox, who was asymptomatic, says she was shocked by how she was treated.
"Fear cannot trump scientific evidence," she says. "And really, public health law needs to be maintained."
Obamacare rates to rise 7.5 percent next year
But the figures will vary widely from state to state.
Obamacare customers are facing an average 7.5 percent price increase for a key benchmark health plan next year, according to limited data the Obama administration released just days before the start of a challenging enrollment season.
But the average rate hikes will vary dramatically from state to state — skyrocketing more than 30 percent in Alaska, Montana and Oklahoma while dropping 12.6 percent in Indiana.
The administration's analysis looks at the second-cheapest "silver" plan available to customers when open enrollment begins on Nov. 1. Those benchmark plans, which are among the most popular sold on the law's health insurance exchanges, are important because they're used to calculate how much federal support low- and middle-income exchange customers will receive toward their monthly premiums.
More than 70 percent of exchange customers chose silver plans this year, which cover about 70 percent of medical costs. Roughly 80 percent of Obamacare customers received subsidies, worth an average monthly credit of $270.
The Centers for Medicare and Medicaid Services, which oversees the marketplaces, stressed that nearly 80 percent of exchange customers can buy a 2016 benchmark plan that will cost $100 or less a month after factoring in premium subsidies. In addition, seven out of 10 customers will have an option that costs no more than $75.
Many experts had predicted double-digit rate hikes for 2016, driven in large part by insurers signing up sicker, more expensive customers than anticipated during the first two years of the exchanges. Skyrocketing drug costs and the phasing out of programs designed to protect insurers entering the fledgling marketplaces from huge financial losses are also contributing to higher rates.
The 2016 rate hikes appear more modest than expected so far, though they are rising faster than this year's average 5.4 percent average increase. Still, the full picture won’t be clear until all the rates are released in the coming days.
Health Insurance and the States: A Closer Look
Last week we showed how, two years into Obamacare, there are still millions of uninsured Americans.
The article and maps, which showed where uninsured Americans still live, generated many comments and questions. Here, we respond to a few of them.
Why did some states seem to look so much worse in 2015 than they did in 2014?
@sangerkatz @qdbui what happened in MT, NV and AK? Uninsured appears to have gone up from '14-'15 in those states.— Raphy Goodstein (@RaphyGoodstein) Oct. 31, 2015
If you moused over our big map, you could see that some parts of the country appear to have higher numbers of people without health insurance this year compared with last year, particularly in the Southwest, the Great Plains states and some places in the South. A chart summarizing the three-year trends for those states seems to show some backsliding.
It’s not totally clear what’s going on, and the factors explaining the increases may differ by state. But there are a few possibilities.
First, it may be that the uninsured numbers we published last year were too low in a few places. Our maps drew on estimates calculated by Enroll America, a group devoted to signing people up for new coverage, and Civis Analytics, a data firm. Those groups are updating and refining their model every year. (For more on the math behind the numbers, read this article from last year.)
Since the 2014 numbers were published, the Census Bureau published its own estimates of the uninsured rates in the states. It turns out that several of the places showing a rise in the Enroll uninsured numbers are also ones where Enroll and the census disagreed about the 2014 uninsured rate by more than three percentage points. Among them are Alaska, Nevada, Texas and New Mexico. When it comes to those states, it may be more useful to look at what’s happened between 2013 and this year than to look at the three-year trend. Enroll uses a combination of survey results and demographic data to estimate who has health insurance, and this year’s survey included more people than last year’s.
“I think that it’s possible that a bit of this is explained through a larger survey and better methodology,” said Ed Coleman, Enroll’s director of data and analytics. “But I don’t think that is the whole story.”
In other states, Enroll thinks increases in the uninsured rate may be real and worth tracking. The places that showed increases tend to be more Hispanic, more rural and poorer than other parts of the country. Those factors may cause people to drop out of health insurance at higher rates than other Americans, since they may have more income volatility or difficulty understanding letters from insurers or government officials. Our colleague Abby Goodnough recently wrote an article about insurance dropouts, focused on Mississippi. “When you owe on your house, on your truck, when you’re a single parent of a college student and you have other bills, it just doesn’t work,” Stephanie Douglas, who gave up her health insurance this year, told Abby.
Debate over Medicare, Social Security, other federal benefits divides GOP
Republicans are openly feuding over whether to seek drastic changes to Medicare, Social Security and other entitlement programs, risking a potentially damaging intraparty battle ahead of the 2016 elections.
The rift was exemplified this week by the GOP stars of the moment. Newly installed House Speaker Paul D. Ryan (R-Wis.) said he plans to pursue a “bold alternative agenda” that would include major revisions in entitlements. At the same time, leading Republican presidential candidate Donald Trump railed against proposals to end or significantly change Medicare.
The dispute is part of a larger GOP argument over which policies Republicans will present to voters next year and how far the party should go in pushing for changes. Three years ago, GOP presidential nominee Mitt Romney and Ryan, his running mate, faced withering Democratic attacks after endorsing dramatic overhauls of Medicare and Social Security that proved unpopular.
The Republican presidential candidates are jockeying to be seen as in solidarity with Ryan, the darling of party elders, or with Trump, a voice for grass-roots voters.
“This is the biggest fault line in the party: whether Republicans should be talking about reducing benefits,” conservative economist Stephen Moore said in an interview. “Republicans have fallen on their sword for 30 years trying to reform Social Security and Medicare, but the dream lives on — and it makes everyone nervous. Some see a political trap; others see it as necessary.”
As Medicare turns fifty, the politics of the plan are as hotly contested as ever. For Republicans, it's created a wedge among the presidential candidates. (Pamela Kirkland/The Washington Post)
California hospitals could cut inpatient costs 25% and save $10 billion, study says
by Chad Terhune - LA Times
California hospitals may be wasting $10 billion a year on excessive patient stays despite the state's reputation for tightly managed care, according to a new analysis of state data.
The report finds that inpatient costs at 275 hospitals statewide could be reduced by 25%, yielding the $10 billion in savings among patients covered by Medicare, Medicaid and private health insurance.
The biggest savings would come in the commercial insurance market, where hospital reimbursements are far higher than for government programs.
"We are spending more than we should, and there is still tremendous opportunity to reduce costs," said David Axene, the report's author and a highly regarded actuary nationally.
His Murrieta firm, Axene Health Partners, has done consulting work for health insurers, hospitals and regulators. He's planning to issue similar reports on other states, including Washington and Pennsylvania.
Axene will present his findings at a health policy conference Friday in Los Angeles. He analyzed 2014 data that hospitals filed with California's Office of Statewide Health Planning and Development.
An estimated $300 billion is spent on healthcare in California annually.
Hospital industry officials agreed that more can be done to squeeze unnecessary costs out of the system, but they said California is already leading that effort.
The California Hospital Assn. said the state ranks among the lowest nationally on length of stay and admissions.
California is 11th lowest in the nation for number of hospital admissions per 1,000 people and seventh-lowest in inpatient days, according to the American Hospital Assn.
"I agree there is room for improved efficiency and reduced utilization. I don't know if it's 25% or $10 billion," said Anne McLeod, senior vice president of health policy and innovation at the California Hospital Assn. "We are not putting a bunch of people in the hospital compared to other states."
Steve Valentine, president of the Camden Group, a national healthcare consulting firm in El Segundo, said he thought the estimated savings might be overstated. He said a timely discharge can hinge on a number of factors, such as finding a rehab facility or home healthcare.
California hospitals often get paid a flat rate for a patient's hospitalization, reducing the financial incentive for a longer stay. But Axene said extra days in the hospital still drive up costs for operations and medical care that providers recoup in negotiating reimbursements or billing public programs later on.
California has been at the forefront of adopting numerous payment reforms in which hospitals, physician groups and insurers work together on coordinating care and then sharing in the financial risk. The idea is to reward providers for keeping patients healthy and let them share in the savings.
In his research, Axene said he saw no substantial difference in the efficiency of for-profit and nonprofit hospitals.
Los Angeles and San Francisco counties tended to have the least cost efficient hospitals in the state. As expected, public hospitals were among the worst performers.
"Public hospitals are the least efficient, and we should expect that because they end up with all the train wrecks. That didn't bother me," Axene said.
One surprising finding was that California hospitals coded patient visits for billing purposes with about 28% more complications or severe conditions than what's found nationally.
That sharp difference could indicate hospitals are making patients appear sicker than they really are in order to boost revenue. Axene said he couldn’t draw any conclusions based on his analysis.
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