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Wednesday, July 6, 2016

Health Care Reform Articles - July 6, 2016

Anthem, Express Scripts Face Legal Challenge Over Prescription Drug Prices

By Julie Appleby 
Anthem and its pharmacy manager Express Scripts overcharged patients with job-based insurance for prescription drugs, alleges a lawsuit that seeks class action status for what could be tens of thousands of Americans.
It’s the latest wrinkle in a battle that has already pitted the major national insurer and its pharmacy benefit manager (PBM) against each other in dueling legal actions — and further illustrates the complicated set of factors that determine what consumers pay for prescription medications.
The case alleges that insured workers paid too much because Express Scripts charged “above competitive pricing levels” and Anthem, in effect, allowed those higher prices as part of a 10-year contract deal with the pharmacy management firm. Those actions, it alleges, violate the firms’ responsibilities under a 1974 federal benefits law called the Employee Retirement Income Security Act.
“This action seeks to recover losses suffered by the plaintiffs … who overpaid and continue to overpay for the portions of the costs of prescription drugs … they are responsible for paying as plan participants,” says the lawsuit, filed as Burnett v. Express Scripts and Anthem.
The case was filed in the U.S. District Court for the Southern District of New York on June 24.
Express Scripts spokesman David Whitrap said the firm denies “the allegations and will defend ourselves vigorously.”
Anthem, too, denied the allegations and said it would fight the charges.
“Multi-year contracts with pharmaceutical benefit managers are a standard strategy used by insurers to assist in making premiums more affordable,” said Lori McLaughlin, corporate communications director. “Anthem provides a suite of medical and pharmacy services that is competitive overall.”
‘A Complicated Web’
Most employers and health insurers hire PBMs such as Express Scripts to manage pharmacy claims, create networks of pharmacies, draw up lists of covered drugs and negotiate prices with drug companies for medications. Using a variety of methods, including smaller networks of pharmacies, financial incentives to steer patients to lower-cost generics and managing high-cost specialty medications, the industry’s trade group estimates savings of $654 billion for clients between now and 2025.
But PBMs have also come under scrutiny.
Recently, some independent pharmacists have complained that some PBMs are charging insured consumers more than the cash price for some generic drugs.
And for years, questions have been raised about whether the industry fully discloses how much it is actually saving insurer and employer clients — and what portion of those savings are actually passed along to consumers.
“It’s such a complicated web of intermediaries that stand between consumers and the prices they pay,” said Erin Fuse Brown, an assistant professor of law at Georgia State University College of Law. “As a result, no one knows if they’re getting ripped off.”
Plaintiffs Seek To Recover Losses
Because insured patients were required by their health benefit packages to pay a percentage of the cost of their drugs, any overcharging on the part of Anthem and Express Scripts meant that the workers’ share was also proportionately too high, the complaint alleges.
The lawsuit seeks class action status on behalf of people with ERISA-governed insurance plans for whom Anthem provided drug benefits through an agreement with Express Scripts after Dec. 1, 2009, to the present. The court has not yet decided if the suit will have class action status.
Anthem is one of the nation’s largest health insurers with more than 38 million members. Express Scripts handled more than 175 million claims for Anthem in 2015 alone, according to the complaint.
The allegations echo those in Anthem’s March lawsuit against Express Scripts, and counterclaims filed shortly thereafter by Express Scripts against Anthem. Both of those cases are also in the Southern District of New York.
Anthem’s lawsuit aims to end its contract with the PBM and seeks $15 billion in damages for what it alleges was the PBM’s failure to renegotiate lower prices for prescriptions. Anthem used to run its own PBM, but sold it to Express Scripts in 2009 as part of the contract deal, court documents show.
In its counterclaims, Express Scripts said the insurer rejected several proposals to renegotiate prices. In addition, Express Scripts’ legal document says Anthem was offered a choice of “less money up front but lower pricing” or a bigger upfront payment “with higher pricing for Express Scripts’ services.” It chose the higher prices over the course of the contract in exchange $4.6 billion more in upfront fees, according to the PBM’s counterclaim. That money, Express Scripts’ documents allege, was then used by Anthem to buy back its own stock, rather than passing it along to health plan members. The stock buyback “applied upward pressure to Anthem’s stock price, thereby enriching shareholders and management,” the filing alleges.

Big Pharma Is Seducing Patients With Co-Pay Coupons: Is It Making Drugs More Expensive Overall?

It’s a war between insurers and drug manufacturers to maximize their bottom lines.
By Charles Ornstein /  Pro Publica

A few months back, after returning from a family vacation that involved lots of pool time, my 9-year-old son complained that his ear hurt. A Sunday morning trip to urgent care brought a diagnosis of swimmer's ear—an infection of the outer ear canal—and a prescription for ear drops.
When my wife went to fill the prescription, for a quarter of an ounce, she was told that our share of the cost would be $135.
Even with the increasingly high cost of drugs, that seemed like a lot. Since I'm a longtime health-care reporter, my wife asked me what to do. "Fill it," I said, thinking more like a father than a journalist.
Wisely, she didn't listen. Instead, she searched online for a coupon for the brand-name drug the doctor had prescribed, Ciprodex. She pulled one up on her phone, showed it to the pharmacist and sliced our cost by more than half, to $60.
That was great for us. Like most consumers, we were practically giddy about the savings. But such coupons have hidden effects on health-care costs that most of us don't ponder.
Drug coupons are a clever marketing tactic increasingly used by pharmaceutical companies for a counterintuitive purpose: to keep drug prices high. By forgoing or reducing patients' payments for pricier brand-name drugs, they ensure more sales for which insurers foot the bulk of the bill. (The companies get nothing if people choose generics or don't fill prescriptions at all.) The coupons also stymie insurers' attempts to encourage consumers to factor price into their health-care decisions. And by making the true cost of a drug essentially unknowable, they are yet another example of how medical pricing remains opaque, despite the promise of the Affordable Care Act.
In essence, it's a war between two big industries trying to maximize their bottom lines: insurers vs. drug manufacturers. Patients, who often have no clue which drug is best, are stuck in the middle. They definitely enjoy getting what seems like a deal—but in the long run, the coupons help keep health-care costs rising.
The virtues and drawbacks of coupons have been thoroughly debated by health policy wonks for the past few years as they have surged in popularity. Supporters say that insurance companies and pharmacy benefit managers have been jacking up co-pays in pursuit of profits and that lower prices increase the odds that patients will take the medicine they need. Critics say the coupons encourage patients to use brand-name products when cheaper alternatives may be available—and that raises costs, premiums and co-payments for everyone.
Coupons have another little-noticed effect. While health plans increasingly rely on deductibles to control rapidly rising drug costs, coupons are just as rapidly undermining them—which, in another paradox, could wind up driving them even higher.
Deductibles require consumers to pay a certain amount before their insurers start covering costs. Of the $135 our pharmacy initially wanted for Ciprodex, $100 was to cover my son's annual drug deductible, and $35 was the standard co-payment for a brand-name drug. With the coupon, we paid only $60 for the prescription. Still, my pharmacy benefit manager (which manages drug coverage for my insurance company) credited us with spending the entire $135, so we skipped right through the deductible.
"It's kind of like a get-out-of-jail-free card," said Joseph Ross, an associate professor at the Yale School of Medicine.
Others have had similar experiences. Dave McCulloch, 32, has used coupons from Gilead Sciences to fully cover his out-of-pocket costs for Truvada, an expensive drug that prevents HIV infection for groups at high risk. (The drug is effective both at treating HIV and preventing it.) When he filled his prescription for the first time in March, McCulloch later discovered that his pharmacy benefit manager credited him with paying $350 when he'd actually paid nothing. His insurer, CareFirst, "has no idea that Gilead paid that amount instead of me," McCulloch said in an email.
When patients can meet their deductibles with a pharmaceutical company's money, as McCulloch and I both did, they have less reason to pay attention to how much money they're spending on health care—which, in theory, the deductible and co-payments are supposed to make them do. That means prices can continue rising, pushing insurers to raise premiums, deductibles and copayments in response.
Figures from IMS Health, a health information company that purchases data from pharmacies and sells it to pharmaceutical companies and others, show that the use of co-pay coupons has surged since 2010 across 11 drug classes, including some in which medications are especially costly. Among the top-selling brand-name drugs at retail pharmacies, IMS estimated that coupons were used about 8 percent of the time in 2010. By 2015, that had grown to more than 27 percent in those drug classes.
Coupons were used to pay for more than a third of the best-selling brand-name drugs prescribed last year to treat autoimmune diseases, viral hepatitis, HIV and multiple sclerosis.
It's really hard, perhaps by design, for insurance companies and benefit managers to know how often coupons are used and what effect they're having on plans' finances and the way benefits are intended to work. Pharmacies process patients' insurance first and only afterward enter the co-pay coupon. That information is not shared with health plans because it's basically treated as another method of payment, akin to cash.
Insurers say they are trying to come up with ways to collect these details. They structure their benefit plans—with deductibles and co-payments—to "send a price signal to the patients so that they choose the most cost-desirable product," said Steve Miller, chief medical officer of Express Scripts, a large pharmacy benefit manager. "The co-pay card abrogates that. ... None of us have come up with a very good solution about how to solve that."
Express Scripts has started refusing to cover some drugs, in part based on whether their makers issue co-pay coupons. If the drug isn't covered, "your co-pay card becomes null and void," Miller said.
The pharmaceutical industry says coupons are an effort by companies to keep their products affordable to the end user, the patient. Insurers have lots of tools to control who uses a particular drug, officials say, such as requiring prior approval from the health plan, mandating that patients try less-expensive medications first and placing limits on how many pills can be dispensed per month.
But as insurers seek to push more costs to consumers, drug companies are doing what they can to help, said Jenny Bryant, senior vice president for policy and research at the Pharmaceutical Research and Manufacturers of America, the industry trade group. "My sense is that we're past the point where there's a question about whether these kinds of programs are necessary," Bryant said. "The reality is that [insurance] benefits are not as generous as they were, and many patients are struggling."
Even the coupons don't always cover the entire cost of pricey drugs such as Ciprodex.
Alcon, a subsidiary of Novartis that makes the drug, did not answer specific questions about how often its coupon has been used. Instead, in a statement, it said that the coupon "helps eligible commercially insured patients who need this medication gain more affordable access."
Could my son have used a cheaper alternative? In theory, that's the question my insurer would have expected me to ask at the outset. But Peter Weber, an otolaryngologist and director of the ear institute at the New York Eye and Ear Infirmary of Mount Sinai, said doctors prefer Ciprodex for swimmer's ear because it combines an antibiotic with a steroid and poses less risk if the eardrum is not intact. Because there's no less-pricey equivalent, doctors often mention the co-pay coupon when they prescribe it.
"This is a drug that works, it's a drug that we want to use, and we have no control over the pricing," Weber said, adding, "half the time, we get calls from pharmacists that say, ‘Look, they can't afford it' ... and I get that. It's not good."
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http://www.alternet.org/personal-health/copay-coupons-drugs-more-expensive?akid=14404.109750.o2J3ed&rd=1&src=newsletter1059377&t=22


UnitedHealthcare Sues Dialysis Chain Over Billing

by Reed Abelson and Katie Thomas - New York Times

Private health insurers can pay more than $4,000 for each dialysis treatment. Government health plans like Medicaid pay around $200.
That gaping price difference was the motivation for a scheme, orchestrated by a for-profit dialysis chain, that illegally pushed poor people in Florida and Ohio out of inexpensive government programs and into expensive private plans sold by UnitedHealthcare, according to a lawsuit the giant insurer filed in federal court on Friday. UnitedHealthcare says the arrangement needlessly exposed the patients to medical bills.
The suit accuses American Renal Associates, a public company that operates nearly 200 dialysis clinics across the country, of fraudulently billing millions of dollars since the beginning of the year. UnitedHealthcare is trying to recoup that money.
The insurer argues that the effort was aided by the American Kidney Fund, a nonprofit patient advocacy group, which paid the patients’ premiums for private insurance. The insurer said American Renal Associates “earmarked donations” to the kidney fund to pay for the coverage, violating anti-kickback laws in the process. The lawsuit also says that the company’s patients were not told that the kidney fund would stop paying their premiums if they received a kidney transplant.
The kidney fund, which is not listed as a defendant in the lawsuit, is overwhelmingly financed by dialysis companies.
American Renal Associates said on Friday that the lawsuit was without merit and that the company would vigorously defend itself. “At all times, we are dedicated to putting patients first, and we structure all of our relationships within that framework,” Michael R. Costa, vice president and general counsel, said in a statement.
The American Kidney Fund declined to comment on the specifics of the lawsuit, but said it was “deeply troubled” by the allegations of what it described as “improper use” of its program by a dialysis provider.
The company says it keeps contributions from providers separate from decisions about whether to offer assistance to patients, an arrangement that it said was “affirmed” by the federal government in 1997.
In a statement, its chief executive, LaVarne A. Burton, said that the group did not recommend particular facilities or insurers and that nearly two-thirds of the 79,000 patients receiving assistance from the fund were on Medicare. The assistance the fund provides, she said, “is a lifeline for people who depend on dialysis for their survival.”
The suit, filed in United States District Court for the Southern District of Florida, touches on an issue regulators have focused on in recent years: the role of third parties paying for insurance.
Federal and state regulators have expressed concern about payments made by outside groups that are closely tied to industry, where the goal appears to be less about helping patients than about generating profits.
This week, the top insurance regulator in Idaho said insurers could refuse payments from organizations like the American Kidney Fund. Minnesota made a similar decision in June.
“There are third parties out there just trying to help people,” said Dean L. Cameron, director of the Idaho Department of Insurance, citing religious organizations as an example. But the practice becomes problematic when the funding is tied to the doctor or the facility providing care, he said. “Those kinds of arrangements concern us.”
The dialysis industry has come under scrutiny from federal regulators in recent years for a variety of actions, including overbilling Medicare.
Many dialysis centers say they lose money because the government programs pay them so little. People who need dialysis and have end-stage renal disease are eligible for Medicare coverage, even if they are under 65. If they are poor, they may also qualify for Medicaid, which covers nearly all out-of-pocket costs. Patients may be enrolled simultaneously in both programs.
At the same time, UnitedHealthcare has a keen financial interest in keeping very ill patients, like those who need dialysis, out of its private plans. Under the federal health care law, insurers must cover everyone, no matter how sick they are.
Dialysis removes toxins from the blood when the kidneys do not work properly, and many patients need treatments three times a week for years.
According to the lawsuit, American Renal Associates devised a clever plot aimed at converting patients over to private plans.
The company identified poor patients in rural areas of Florida who did not have a nearby dialysis clinic in UnitedHealthcare’s network, the suit says. The centers then persuaded these patients to switch to UnitedHealthcare plans, using the American Kidney Fund’s program to pay their premiums.
Finally, the centers billed UnitedHealthcare out-of-network prices of about $4,000 per dialysis treatment, compared with just $200 under Florida’s Medicaid program, the suit said.
Because the UnitedHealthcare plans required greater out-of-pocket contributions than Medicaid’s coverage, the centers waived any part of the dialysis bill that was not paid by the insurer. UnitedHealthcare says patients remained responsible for bills from other doctors, which they would not have had to pay under Medicaid.
Kidney transplants, rather than dialysis, are seen as the best options for most patients with end-stage renal disease, but the American Kidney Fund does not pay for premiums after patients receive a kidney transplant. Patients were not informed of that.
Ms. Burton, the kidney fund chief executive, said the fund’s work was focused on people who need dialysis and not on transplant patients.
“Our greatest hope is that the people we are assisting will receive transplants, but the reality is that most people with kidney failure have to spend time on dialysis,” she said in the statement.
A fast-growing player in the dialysis industry, American Renal Associates enters into partnerships with kidney specialists to run its clinics. A New York private equity firm, Centerbridge Partners, owned the company before it went public in April.
In its public filings, the company acknowledges its dependence on treatments paid by private insurers. Those payments cover just 13 percent of the treatments the clinics provide, but account for 40 percent of the company’s operating revenue.
This reliance on privately insured patients is typical of the dialysis industry, said Eric R. Havian, who represented a whistle-blower in a 2014 case involving charges of kickbacks against DaVita HealthCare Partners, one of the industry’s biggest players.
Even if only a few people receive private insurance at a center, Mr. Havian said, “they may make enough profit on those two or three patients to wipe out all the losses they are incurring from the Medicaid patients, and make enormous profits on top of that.”
UnitedHealthcare said it had already paid about $2 million to American Renal Associates this year. It provided details about 27 patients in Florida and Ohio, but said there could be more.
Insurers say that charities with ties to providers are a concern when they pay premiums only for people with a specific health condition, because doing so often raises overall prices.
“What we’ve seen happening in the marketplace is some companies have been targeting people who use their services to enroll them in private coverage,” said Alissa Fox, a senior vice president with the Blue Cross Blue Shield Association, a trade group.
The American Kidney Fund’s premium-assistance program is one of the hallmarks of the group’s mission. The group says on its website that it assists one in five dialysis patients in the United States with health care expenses.
The fund has close ties to the dialysis industry: It acknowledges that dialysis companies pay for its premium-assistance program, and in 2015, 78 percent of its $264 million in revenue came from two companies, according to its financial disclosures. The kidney fund declined to name the companies. The organization’s chairwoman is a former executive at DaVita and Fresenius Medical Care, the nation’s two leading dialysis chains.
Those industry ties expose the profit motive that underpins the programs, according to Patrick Burns, executive director of Taxpayers Against Fraud, a whistle-blower advocacy group.
“There is a bottom line here, and the people who manage these programs are well aware of it, on both sides,” he said.


The Illicit Perks of the M.D. Club

by Vassal G. Thakkar - New York Times

ONE of my patients recently had her request for a relatively common medication for attention-deficit hyperactivity disorder, Vyvanse, denied by her insurance provider. I tried to appeal the decision, but her father — the chief executive of a health care company who purchased insurance for hundreds of employees — had better luck. He called up the head of the insurance company and got the drug approved.
Last year, my 5-year-old fractured her ankle. The bill for the 12-minute orthopedist’s appointment was $1,125, and about half of it was covered by insurance. I wrote the doctor a letter — please revise this bill, as it is clearly erroneous — and included my “M.D.” Instead, the doctor left me a message saying he was waiving the bill entirely as a professional courtesy.
Stories like these reveal an uncomfortable truth. Our health insurance system is so broken that pulling strings — or rank — is sometimes the only way to get the coverage you think you’ve paid for.
Since 2010, when the Affordable Care Act was passed, the major insurance companies have seen their stock prices soar. Though the act expanded coverage to millions, a report last year by the Robert Wood Johnson Foundation revealed that 41 percent of health plans sold on the government exchanges had physician networks described as “small” or “extra-small,” covering less than 25 percent and 10 percent of local doctors, respectively. Individuals may have to change doctors or choose out-of-network services, incurring extra costs.
Wendell Potter, a former Cigna executive turned whistle-blower and a co-author of the recent book “Nation on the Take,” says that “insurance companies profit by introducing hurdles in the coverage and claims process.” These hurdles lead some patients to simply give up and pay or forego treatment altogether. He calls this the companies’ business model.

Feds Charge 300 in Nationwide Health Care Fraud Sweeps

by The Associated Press

WASHINGTON — Health care fraud sweeps across the country have led to charges against 300 people including doctors, nurses, physical therapists and home health care providers accused of bilking Medicare and Medicaid, the government announced Wednesday.
The sweep spread from southern California to southern Florida and Houston to Brooklyn, New York, with arrests being made over three days.
In all, the fraudulent billings allegedly totaled $900 million, Attorney General Loretta Lynch said, calling it the largest national Medicare fraud dragnet.
The defendants billed for care and prescriptions that were not necessary and services that were not rendered, Lynch said.
Continue reading the main story
Among those charged, for example, was a group that controlled a network of clinics in Brooklyn that received $38 million from Medicare and Medicaid after providing patients unnecessary treatment. A Detroit clinic billed Medicare for more than $36 million, even though Lynch said it was actually a front for a narcotics diversion scheme.
Such investigations happen each year, but Lynch said investigators noticed some new trends, including the use of doctors' stolen IDs to prepare fake prescriptions.
Those charged "target real people - many of them in need of significant medical care," Lynch said. "They promise effective cures and therapies, but they provide none."
While the individual cases may be unrelated, law enforcement agencies often coordinate the announcement of health fraud charges and arrests to send a message to fraudsters and the general public alike. Health care fraud costs tens of billions of dollars annually.

How a Quest by Elites Is Driving ‘Brexit’ and Trump

by Neil Irwin - NYT

What lesson should a card-carrying member of the economic elite take from the success of Donald J. Trump, and British voters’ decision to leave the European Union?
Voters in large numbers have been rejecting much of the underlying logic behind a dynamic globalized economy that on paper seems to make the world much richer. For the bankers, trade negotiators, international businesspeople and others who make up the economic elite (including journalists like me who are peripheral members of it), this is cause for introspection, at least among those who aren’t too narcissistic to care what their countrymen think.
Here is an overarching theory of what we might have missed in the march toward a hyper-efficient global economy: Economic efficiency isn’t all it’s cracked up to be.
Efficiency sounds great in theory. What kind of monster doesn’t want to optimize possibilities, minimize waste and make the most of finite resources? But the economic and policy elite may like efficiency a lot more than normal humans do.
Maybe the people who run the world, in other words, have spent decades pursuing goals that don’t scratch the itches of large swaths of humanity. Perhaps the pursuit of ever higher gross domestic product misses a fundamental understanding of what makes most people tick. Against that backdrop, support for Mr. Trump and for the British withdrawal known as Brexit are just imperfect vehicles through which someone can yell, “Stop.”
In a poll of 639 British economists conducted in May, 88 percent expected that a vote to leave the European Union would depress British economic growth, yet 52 percent of voters approved it anyway. Only two of 40 leading economists, surveyed by the University of Chicago Initiative on Global Markets, agreed with the statement that a country can improve citizens’ well-being by increasing its trade surplus or cutting its trade deficit, an idea that is a hallmark of populist rhetoric.
But what if those gaps between the economic elite and the general public are created not by differences in expertise but in priorities?
Consider an experiment published last year in the journal Science. Four economists tested people with a computer simulation in which they could either be greedy and keep tokens that had real cash value, or share them with others. The catch: If they shared them, the total number of tokens would decline. In other words, the more evenly the pie was divided, the less pie there was to go around. There was a trade-off between equality and maximizing income, a version of economic efficiency.
Among the general American public, about half of those who played the game favored equality over efficiency.
But the researchers also did the experiment at Yale Law School, an elite bastion filled with people who become Supreme Court clerks, White House aides and richly compensated lawyers. Among the Yale students who played the game, 80 percent preferred efficiency to equality. They were more worried about the size of the pie, apparently, than making sure everyone got a slice.
“The people who are destined to fill these elite positions tend to have a strong efficiency orientation,” said Raymond Fisman, a Boston University economist and lead author of the study. “One underlying explanation may be that, if the system has been kind to you, and you find yourself at Yale Law School, you know you’re going to make out O.K. in the end, and so you don’t worry about widening the distribution of outcomes.”
You can see versions of this play out in a wide range of areas. For example, economists almost uniformly argue that rent control laws are a terrible tool to try to make housing more affordable. As Paul Krugman once wrote, “the analysis of rent control is among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial.”
Yet among people grappling with soaring rents, the policies are persistently popular — even, recently, in the free-market-oriented boomtowns of Silicon Valley.
It’s easy for an economist to chalk up support for rent control as idiocy that depresses the home construction that might reduce housing prices for everyone. I have thought of it that way.
But maybe it is really important for people who live in a place to be able to stay there indefinitely. Maybe the idea that things should stay the way they are, without new people moving in and new buildings going up, is not as inherently irrational as Economics 101 would suggest. Yes, rent control is a bad idea if you’re worried about the long-term prospects for economic efficiency. But maybe the people who advocate these policies know exactly what they’re rooting for, and that’s not it.
The rent control debate can be viewed as a microcosm of the debate about globalization and international trade.
Some of the best analysis of trade agreements comes from the Peterson Institute for International Economics. Its examination of the pending Trans-Pacific Partnership is 119 pages and describes how the deal among the United States and 11 Pacific Rim nations will affect different industries and the economy as a whole.
It projects that the deal will add $131 billion a year to Americans’ incomes by 2030, or 0.5 percent of G.D.P. It will neither create nor destroy jobs, but is projected to add to churn — job changes — in the economy as work moves into higher-paying, more export-centric industries. The authors predict that the trade deal will mean an extra 53,700 job changes a year, but they note that 55.5 million people a year in the United States change jobs for all sorts of reasons, and that this extra churn will barely change those overall numbers.
But for a window into how this plays out among real people, consider an article in The Wall Street Journal in February. In that account, a woman named Andrea Howell holds down a good job at BMW’s manufacturing plant in South Carolina, making her one of globalization’s winners. She supports Mr. Trump, she said, because she doesn’t want other countries to beat the United States at trade, and because two uncles lost their jobs at a cotton mill that closed in the 1980s, presumably because of globalization.
To economists, 53,700 jobs churned each year is a small cost to be paid for a richer overall economy. To people who are among those 53,700, the pain may be enough to drive someone’s niece to vote for an antitrade candidate 30 years later.
So what’s a policy elite to do? Of course the only way a society can become richer over time is to increase national income. And if rigorous analysis shows that Policy X is the way to do it, the fact that Policy X is going to disadvantage a few thousand people often isn’t a reason to abandon the idea.
But there’s an obligation to think about individual lives. Life isn’t just about money, and jobs aren’t just about income. A sense of stability, of purpose, of social standing — all these things matter in ways that economic models don’t do a very good job of taking into account.
If there is one crucial lesson from the success of Mr. Trump and Brexit, it is that dynamism and efficiency sound a lot better to people who are confident they’ll always end up being winners.

When the Cost of a Medical Emergency Adds Up

To the Editor:
“When You Dial 911 and Wall St. Answers” (“Bottom Line Nation” series, front page, June 26), about the trend of emergency medical services being contracted out to private companies, highlights impediments to medical consumers’ access to quality services. The financial effect on consumers can be devastating.
While the Affordable Care Act provides some financial protections for emergency services, it failed to ban “balance billing” by providers for amounts above what an insurer pays. In most states, there is no restriction on the amount an ambulance company can bill patients for emergency charges that exceed an insurer’s in-network rate.
For air ambulances, the patient’s cost could easily be $30,000 or even $100,000.
Since 2000, the medical helicopter industry has shifted from government or nonprofit operators to predominantly for-profit entities, imposing more costs on consumers. While states can regulate cost-sharing for regular ambulances, the Airline Deregulation Act nonsensically bars them from limiting the cost of emergency air services.
Efforts to amend this law have stalled, but this is a consumer crisis Congress must address.
BETSY IMHOLZ
Continue reading the main story
Special Projects Director
Consumers Union
San Francisco
To the Editor:
As a physician for more than 60 years, I found this article a nightmare. Though health care has business aspects, it is unique in that, by its nature, it cannot function as a usual business model.
The bottom line can never be profit because the “product” is human experience. Cost-cutting when dealing with someone’s heart attack or house fire requires a lack of caring about someone else’s pain and suffering, which the cost-cutters would not like for themselves.
The private equity companies, which treat this subject as a business model, don’t seem to realize that they are making the case for a socialistic system that would take proper care of everyone.
BENJAMIN D. GORDON
Rockville, Md.


Fixing Healthcare: Maybe It Does Take a Rocket Scientist

Andrew Goldstein takes on a major city's dysfunctional system

  • by Nicole Lou 
    Reporter, MedPage Today/CRTonline.org

    In 2013, Freddie Kitchens, quarterback coach for the NFL's Arizona Cardinals and a former college football star, heard a pop in his chest and felt a cramp in his leg that grew more and more painful. The doctors at Chandler Regional Hospital, at the edge of suburban Phoenix, weren't sure what was wrong. Finally, a CT scan revealed the aortic dissection.
    Surgical treatment at Chandler was impossible and every cardiothoracic surgeon they called was unavailable -- that is, until Andrew Goldstein, MD, answered and agreed to take Kitchens at Arizona Heart Hospital in Phoenix. The surgeon fixed the tear in the aorta; Kitchens returned to the field 2 months later.
    Kitchens, now 41, was lucky: 20% of patients with aortic dissection die before reaching the hospital, and in-hospital mortality is 10%-30% depending on the location and extent of dissection.
    The surgery for an aortic dissection itself is risky and is not something surgeons "particularly relish," Goldstein told MedPage Today. "For a heart surgeon, it's one of the most complex and longest operations, lasting 5, 6, 7, 8 hours or more. You cool the patients down to a very cold temperature to stop all the circulation including to their brain," he said. "You have no heart flow whatsoever."
    But Kitchens didn't just overcome the risks of an aortic dissection and its surgery. In Arizona, "finding someone to take care of it is less than ideal," said Goldstein.
    Islands In The Desert
    That a coach for the Arizona Cardinals found difficulty in getting surgery for his aortic dissection seems typical in these parts.
    "We don't have a good system," Goldstein said. "The hospital where I was at was the sixth hospital that was called. It just strikes me as a very unsafe situation that could be handled much more efficiently."
    "The public health issue that we deal with in Arizona is getting people triaged to an available heart surgeon in a timely manner," he said. "One of the things about Phoenix is that we have a lot of hospitals with small programs and one or two large medical centers, but there's a lot of variability and it's very disjointed."
    He explained that his previous institutions had been part of large networks that refer cardiac care around the clock. In New York, Freddie Kitchens might not have had to wait for his doctors to search for a surgeon. Today in Phoenix, however, "there's just not enough statewide coordination."
    "Then there's the issue of surgeons overextending themselves with call responsibility. Surgeons are getting calls for five to six hospitals simultaneously."
    It would be nice to see emergency cardiac services regionalized, he said, resembling how trauma services work. "But on the hospital side, there's nobody there who has a strong enough motivation or agenda to fix the problem."

    Helpless to Prevent Cancer? Actually, Quite a Bit Is in Your Control

    Aaron E. Carroll

    Americans seem very afraid of cancer, with good reason. Unlike other things that kill us, it often seems to come out of nowhere.
    But evidence has increasingly accumulated that cancer may be preventable, too. Unfortunately, this has inflamed as much as it has assuaged people’s fears.
    As a physician, I have encountered many people who believe that heart disease, which is the single biggest cause of death among Americans, is largely controllable. After all, if people ate better, were physically active and stopped smoking, then lots of them would get better. This ignores the fact that people can’t change many risk factors of heart disease like age, race and family genetics.
    People don’t often seem to feel the same way about cancer. They think it’s out of their control. A study published in Science in January 2015 seemed to support that view. It attempted to explain why some tissues lead to cancer more often than others. It found a strong correlation between the number of times a cell divides in the course of a lifetime and the risk of developing cancer.
    In other words, this study argued that the more times D.N.A. replicates, the more often something can go wrong. Some took this to mean that cancer is much more because of “bad luck” than because of other factors that people could control.


    Young Adults Can Face A Confusing Path To Health Insurance 

    By MICHELLE ANDREWS

    Young Adults Can Face A Confusing Path To Health Insurance

    The Obama administration is making a push to get young adults covered on the health insurance marketplaces, both for their own good and that of the marketplaces. The insurance exchanges need healthy people to balance sicker ones in the risk pool. 
    Despite beefed-up outreach planned for the coming months, several factors may throw a wrench into enrollment plans for young people. 
    To start with, the transition from children's Medicaid to adult coverage can be bumpy. Nineteen is the age at which lower-income young adults are generally no longer eligible to be covered as children by the Medicaid or Children's Health Insurance Program. Options for them include moving to adult Medicaid in states that have expanded coverage to 138 percent of the federal poverty level (about $16,000), or buying a subsidized plan on the health insurance marketplace. 
    "I'm sure there are states that do transitions really well, but I can't point to one," said Shelby Gonzales, a senior health policy analyst who focuses on enrollment and eligibility issues for the Center on Budget and Policy Priorities. "In general, a lot of states are struggling, when [young adults are] being terminated from Medicaid, with getting them on a pathway that's smooth to the marketplace." 
    The transition to adult Medicaid can also be problematic. Thirty-one states and the District of Columbia have expanded coverage, and it's available for some of these young adults, she said. 
    Clunky computer systems and uninformative coverage notices may make it easier to drop coverage at age 19 than continue it. Sometimes, for example, a young adult will receive a notice explaining that she's no longer eligible for Medicaid under a particular section of the law, but not receive information about other coverage options. 
    Or some states don't have a routine process to check whether the 19-year-old is eligible for another category of Medicaid after aging out of child coverage. Or she may get sent to the marketplace for coverage, but wind up filling out all the application information from scratch even though her Medicaid file already has the information. 
    When young people try to apply for coverage on the marketplace, they may run into another snag: difficulty proving their identity, the first step in the enrollment process. With little or no credit history, they may have to verify their identity by phone or submit documentation that proves they are who they say they are. Such frustrations can lead young people to walk away from the process. 
    "Any of these are points where you might lose someone," Gonzales said. 


    by

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Thursday, June 30, 2016

Health Care Reform Articles - June 30, 2016

Paul Ryan unveils plan to set fire to the American health care system
by Paul Waldman - Washington Post
For six years, Republicans in Congress have promised that very, very soon they’d release their plan to “repeal and replace” the Affordable Care Act. Just you wait, they said back in 2010, when we put out our plan America will see how terrific our health care ideas are. They also said that in 2011 — the plan was coming, hold on! They said that in 2012 — any day now, here it comes! They said that in 2013, and 2014 and 2015 — just give us a few more weeks, and you’ll have it! Well, now it’s 2016, and House Speaker Paul Ryan, R-Wisconsin, Wednesday released something that sort of looks like a “plan” if you just focus on the middle distance and take it in through your peripheral vision.
If you want to read Ryan’s plan, here’s an executive summary, and here’s the somewhat longer version. It’s light on details — such as how much it would cost and how many people would lose their coverage because of it — which isn’t all that surprising, given that the more specific you get, the more problematic things become. But it still illustrates the dilemmas Republicans face on this issue and their inability to solve them.
We’ll get to the potentially catastrophic effects of this plan (and I don’t say that lightly) in a moment. But first, let’s briefly look at what it contains. The starting point is the assertion that the ACA is a complete and utter disaster from top to bottom and therefore can’t be changed, altered or reformed, so it must be completely repealed: “This law cannot be fixed. Its knot of regulations, taxes and mandates cannot be untangled. We need a clean start in order to pursue the patient-centered reforms the American people deserve.” But after saying this, Ryan proposes to put back all the things about the ACA he thinks are popular. No denials for pre-existing conditions? Don’t worry, we won’t take that away! Young people up to age 26 being allowed to stay on their parents’ insurance? We’ll give you that, too! The ban on “recission,” where your insurer cancels your plan if you get sick? It’s in there!
So here’s what else is in the plan: Ryan would eliminate the individual and employer mandates; shut down the insurance exchanges; cancel the ACA’s expansion of Medicaid and then cut the program and convert it to block grants so that states could kick people off; move Medicare to a “premium support” model, which essentially means privatizing it and cutting it back; eliminate the ACA’s subsidies for low- and middle-income people, which would be replaced by a refundable tax-credit; promote health savings accounts and “mini-med” plans that cover virtually nothing; cap the tax exclusion for employer plans, which he presents as a friendlier alternative to the ACA’s “Cadillac tax” but which in effect is pretty much the same thing; and limit the amount victims of medical malpractice can sue for, along with a few other things.
One important note: Despite what Ryan says, the plan doesn’t actually maintain the prohibition on denials of coverage for pre-existing conditions, which may be the single most popular element of the ACA. It does so only if you maintain continuous coverage, beginning with a special one-time open enrollment. If you don’t, you’ll find that insurers can once again deny you because of your medical history, just like in the bad old days. And his answer for people with costly medical conditions is high-risk pools, which are just about the worst way possible to provide insurance (they segregate the costliest patients together, making coverage impossibly expensive).
So what would happen to this plan if Donald Trump actually became president and Republicans retained control of Congress? Trump himself couldn’t care less about the details of health-care policy — he’d probably sign whatever Congress put in front of him (don’t forget that his central health care promise was to repeal the ACA and replace it with “something terrific”). But would they actually fill out the details and pass Ryan’s plan? There are strong reasons to think the answer is no.
That’s because this plan, like almost any repeal-and-replace idea Republicans have, would cause absolutely cataclysmic upheaval in Americans’ health care. I cannot stress this strongly enough. Even if you accept the Republicans’ argument that it would eventually bring us to health care nirvana (which I obviously don’t), in the short and medium term it would be a nightmare. It would be much more disruptive than the implementation of the ACA was in the first place. One of the ironies of Republican rhetoric on this topic is that on one hand they complain that the ACA is so complex and made so many changes, touching every part of the American health care system, yet on the other hand, they claim they can undo it all with the stroke of a pen, and it’ll be no problem.
But they’re right on the first part. If you repeal the ACA, that means not only what we’ve already talked about, but also things like reopening the “doughnut hole” in Medicare prescription drug coverage, and moving Medicare back to the fee-for-service model the ACA has successfully begun a move away from, and taking away subsidies from small businesses, and taking away funding for community health centers, and bringing back cost-sharing (i.e. you paying money) for preventive care, and shutting down all the pilot programs the law created to test out new ways of delivering and paying for care, and a hundred other things that are going to cause enormous problems for hospitals, doctors and patients.
But that’s just the stuff that won’t get all that much attention. What will? The fact that when you repeal the ACA, you’ll be tossing tens of millions of Americans off their health coverage. The nonpartisan Congressional Budget Office estimates that in the first year after repeal, there would be 20 million more people without insurance.
Just imagine that: 20 million Americans losing their coverage all at once. Consider the parade of horror stories in the news about people being destroyed financially, and more than a few dying, because they can’t afford health care. Think that would pose a bit of a political problem for Republicans?
Which is why Ryan’s “reform” is not going to happen. It would be political suicide, and Republicans know it. If they do get the chance, they’ll pass something much, much more modest. They’ll call it “repeal and replace,” but it won’t be anything of the sort.
Paul Waldman is a contributor to The Washington Post’s Plum Line blog, and a senior writer at The American Prospect.

Paul Ryan’s flimsy health plan

Washington Post Editorial Board
IT HAS been more than six years since the Affordable Care Act passed and nearly three years since its major provisions began phasing in. During that time, the rate of uninsured Americans has plummeted to a historic low. Also during that time, Republicans have blamed the law for practically every problem with the health-care system, the economy and more. But they have infamously not united behind a credible alternative.
House Speaker Paul D. Ryan (R-Wis.) seemed to promise better when he announced that he would roll out an ambitious policy agenda this summer. Instead, last week he released an Obamacare alternative that is less detailed in a variety of crucial ways than previous conservative health reform proposals. The outlines that the speaker did provide suggest that it would be hard on the poor, old and sick. 
Mr. Ryan’s plan would replace Obamacare with a tax credit available to people buying insurance plans in markets regulated by the states, not the federal government. The proposal does not say how valuable the credit would be, nor the rate at which it would increase. The document also does not predict how many people it would cover, nor how much the plan would cost. The latter is a major question in part because the plan would waste money offering tax credits to everyone, regardless of income. Republican staffers argue that the proposal is just a starting point for discussion. Yet other Obamacare-replacement proposals have included such numbers. The fact that Mr. Ryan’s does not renders the plan difficult to evaluate or take seriously. This many years on, the GOP has no excuse for blank spaces. 
The proposal hints that the credit would be sufficient to cover the cost of plans that existed before the ACA. This is not reassuring: Pre-ACA, individual-market insurance plans were often thin, with limited benefits, extensive cost-sharing and other elements designed to deter anyone who might actually need care. Without strong coverage requirements, insurers would have limited incentive to offer plans that appealed to people who may be — or may become — sick. States would be hampered in responding to these issues: The proposal would allow insurers to sell plans across state lines, so the state with the skimpiest regulations would likely set the national standard. 
People with money to put into health savings accounts (which the proposal would expand), could cover gaps in thin insurance coverage with tax-advantaged out-of-pocket spending — but this would not be a realistic option for low-income people. As for the old, the plan would scale up the tax credits with age, but it would also permit insurers to raise premiums with age much more than the ACA currently allows. The proposal gives no sense that the two will come close to matching up; as in other conservative plans, those in late middle age could face much higher costs. For the sick, meanwhile, Mr. Ryan’s plan would offer an ultimate backstop by funding high-risk insurance pools. But health-care experts caution that this approach would cost a massive amount of federal money — a fact that has caused Republican lawmakers to balk at policies like it when fleshed out. 
At least, Republicans might argue, Mr. Ryan’s proposal would eliminate the hated individual mandate requiring people to buy insurance. Yet it would replace it with an even more coercive system. Protections for those with preexisting conditions would only apply for those who kept continuous health-care coverage. Under the current system, if you fail to obtain health insurance in a year, you might have to pay a penalty of few hundred dollars. Under Mr. Ryan’s plan, the Urban Institute’s Linda Blumberg explains, “If you slip through the cracks, your penalty is you may never be able to get health-insurance coverage again.”

Cutting healthcare costs shouldn't be this painful
by David Lazarus - LA Times
When my son was circumcised, Sade’s “Love Is Stronger Than Pride” was playing on a radio at the hospital. The pediatrician glanced over at me and said, “Some day, he’ll hear that song and won’t know why it makes him uncomfortable.”
Snip.
I recalled this experience while speaking the other day with Matt Williamson about his own son’s quiet storm of foreskin loss. The issue wasn’t the procedure, which I know some people question. The issue was the cost.
Williamson, 43, wanted to know why Kaiser Permanente’s South Bay medical center apparently charged him more than $3,000 when a nearby private clinic charges as little as $175.

“They never told us beforehand how much it would cost,” the Manhattan Beach resident told me. “They just gave us a piece of paper with mainly religious stuff and some health studies. If they had said it would cost $3,000, I would have immediately said, ‘No, thank you.’ I think most people would.”
This is yet another example of the lack of transparency in medical pricing, and the fact that hospital charges for routine tests and procedures can be orders of magnitude more expensive than those of specialized clinics – although patients typically will find that out only after they’ve paid their bill and realize they’ve been fleeced.
“These such huge price disparities show how uncompetitive the healthcare market is,” said Mireille Jacobson, director of the Center for Health Care Management and Policy at UC Irvine’s Merage School of Business.
“All these high-deductible health plans give patients an incentive to find the best price,” she said. “But the reality is that it’s very hard to shop around.”


When You Dial 911 and Wall Street Answers

by The NYT

A Tennessee woman slipped into a coma and died after an ambulance company took so long to assemble a crew that one worker had time for a cigarette break.
Paramedics in New York had to covertly swipe medical supplies from a hospital to restock their depleted ambulances after emergency runs.
A man in the suburban South watched a chimney fire burn his house to the ground as he waited for the fire department, which billed him anyway and then sued him for $15,000 when he did not pay.
In each of these cases, someone dialed 911 and Wall Street answered.
The business of driving ambulances and operating fire brigades represents just one facet of a profound shift on Wall Street and Main Street alike, a New York Times investigation has found. Since the 2008 financial crisis, private equity firms, the “corporate raiders” of an earlier era, have increasingly taken over a wide array of civic and financial services that are central to American life.
Today, people interact with private equity when they dial 911, pay their mortgage, play a round of golf or turn on the kitchen tap for a glass of water.
Continue reading the main story
Private equity put a unique stamp on these businesses. Unlike other for-profit companies, which often have years of experience making a product or offering a service, private equity is primarily skilled in making money. And in many of these businesses, The Times found, private equity firms applied a sophisticated moneymaking playbook: a mix of cost cuts, price increases, lobbying and litigation.
In emergency care and firefighting, this approach creates a fundamental tension: the push to turn a profit while caring for people in their most vulnerable moments.
For governments and their citizens, the effects have often been dire. Under private equity ownership, some ambulance response times worsened, heart monitors failed and companies slid into bankruptcy, according to a Times examination of thousands of pages of internal documents and government records, as well as interviews with dozens of former employees. In at least two cases, lawsuits contend, poor service led to patient deaths.
Private equity gained new power and responsibility as a direct result of the 2008 crisis. As cities and towns nationwide struggled to pay for basics like public infrastructure and ambulance services, private equity stepped in. At the same time, as banks scaled back their mortgage operations after the crisis, private equity firms — which face lighter regulation than banks, and none of their rainy-day capital requirements — moved in there as well.
The power shift has happened with relatively little scrutiny, even as federal authorities have tightened rules for banks. Unlike banks, which take deposits and borrow from the government, private equity firms invest money from wealthy individuals and pension funds desperate for returns at a time of historically low interest rates.
Since the 2008 financial crisis, private equity firms have gone from managing $1 trillion to managing $4.3 trillion — more than the value of Germany’s gross domestic product — according to the advisory firm Triago. Retirement nest eggs are fueling the growth and sharing in private equity’s risks and returns: Nearly half of private equity’s invested assets come from pensions.
“There is private equity — a lot of it — and it’s happening everywhere,” said Vikram Pandit, a former Citigroup chief executive who is now head of the Orogen Group, which invests in financial businesses. Across the financial landscape, he said, “New champions will emerge.”
http://www.nytimes.com/2016/06/26/business/dealbook/when-you-dial-911-and-wall-street-answers.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region&region=top-news&WT.nav=top-news

Tense talks led to Brigham, nurses deal

Late Saturday, after months of tense negotiations and with a strike looming, it wasn’t disagreement on wages or benefits that kept Brigham and Women’s Hospital and its nurses union from nailing down a new contract. The final sticking point was a new patient-monitoring device that the Boston hospital wanted to deploy, and nurses wanted a say in how it would be used.
With help from Mayor Martin J. Walsh, who played the role of unofficial mediator throughout the weekend even though he was out of town, Brigham and the Massachusetts Nurses Association found a late-night compromise that averted what would have been the largest nurses strike ever in the state on Monday.
“I am certain that the mayor’s intervention turned the tide of this negotiation,” said Dr. Ron M. Walls, the Brigham’s chief operating officer. “He helped both sides understand how important reaching an agreement was, how important it was to the city.”
At 12:30 a.m. Sunday, the hospital and the union representing 3,300 nurses announced they had arrived at contract terms they each could live with. The hospital will get three years of labor peace, which officials said would provide needed stability. Nurses won wage concessions that were less than what they initially sought, but more than the Brigham had previously offered.
It was the culmination of almost 10 months of often contentious talks, including some 27 hours over Friday and Saturday, when Governor Charlie Baker, Senator Elizabeth Warren, state Attorney General Maura Healey, and businessman Jack Connors also worked to help prevent a potentially disruptive job action.
“We’re very relieved,” said Kelly Morgan, a nurse and vice chairwoman of the bargaining committee. “We’re feeling very satisfied with the agreement we reached. It benefits our patients tremendously. It benefits our nurses tremendously.”
The contract talks — with many highs and lows that had officials from both sides thinking they were close to a deal, only to see it fall apart — had grown more acrimonious in recent weeks. The union authorized a 24-hour strike, accusing the Brigham and Partners of disrespecting nurses. The hospital said it would lock out the union nurses for an additional four days.

Medicare, an effective program that needs expansion

by Jack Bernard

I have been amazed at the number of negative Medicare-for-all attack pieces printed in various respected papers over the last few months, making me wonder why primarily liberal economists would be attacking a program that progressives have been trying to enact since Truman.

The underlying implication is that the current private system is more effective than a federal government run single-payer model. As a Republican former elected official with a very conservative spending record, I too believe in eliminating governmental waste and in utilizing the private sector when it is more effective.
Therefore, my record makes some citizens surprised when I advocate for Medicare for all. Objectively, the U.S. healthcare system is and has been severely broken. Despite our spending far more per capita, our country is far behind all developed democracies, which scoff when our politicians make the false claim that we have the best healthcare in the world.
For example, the National Research Council and Institute of Medicine recently commissioned a panel of experts to compare our health with that of 16 other developed nations. We ranked poorly, on the bottom in several key areas! The NRC/IM report stated that our health care is “inaccessible or unaffordable” with “lapses in the quality and safety of care”.
The nations with the lowest cost and best outcomes have comprehensive universal health insurance, either: A.) the government provides direct care (like England or the “socialist” VA here); B.) there is a public utility model (like Denmark and France); or C.) there is single-payer (like Canada, with Medicare covering everyone).
Despite the demagoguery, options “B” and “C” do not represent a government takeover of health care delivery. These options eliminate private-sector insurance company marketing and administrative costs, and big pharma price gouging, directing that money into patient care rather than paying for bureaucracy and multimillion-dollar CEO salaries.
Medicare, the U.S.’s national health care insurance for the disabled and those over 65, has under 3 percent overhead costs (Canada is under 2 percent). Private insurance companies complained because the Affordable Care Act (ACA) required them to get down to 20 percent, or pay a fine.
You will notice that the list of options used by other nations does not include an “Obamacare” model, with dozens of private insurance companies offering a multitude of confusing, expensive plans. In fact, the ACA is a direct descendant of the private insurance plan model derived by the conservative Heritage Foundation as an alternative to “Clinton Care” in the 1990s. That overly complex model became “Dolecare,” which then became “Romneycare.” Oddly, the ACA was then passed by Democrats.



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