The Health Care Stalkers
by The Editorial Board - NYT - June 11, 2018
Democrats hoping to make health care a centerpiece of midterm election campaigns just got a gift from the Trump administration. Not only has the Justice Department declined to defend the Affordable Care Act against a lawsuit filed by 20 Republican-led states, but it’s also arguing for the repeal of enormously popular consumer protections, including coverage of pre-existing conditions.
These benighted moves come at a time when voters everywhere rank health care as their chief concern, and a majority say they favor fixing the current law over repealing it, after years of futile Republican efforts to do the latter.
The lawsuit, filed in February, hinges on the statute’s “individual mandate,” which requires everyone — the healthy and the less so — to buy insurance as a way to help keep prices down. In 2012 the Supreme Court ruled that Congress couldn’t order people to buy coverage but could impose a tax penalty on those who didn’t. Then, in last year’s tax bill, Congress eliminated the financial penalty. Without the penalty, the plaintiffs argue, the mandate is no longer constitutional. And without the mandate, they say, the rest of the law can no longer legally stand.
The Justice Department last week stopped short of fully agreeing with that rationale, saying that some of the law’s provisions, like the Medicaid expansion that brought coverage to nearly 12 million low-income Americans, could stand without the penalty, but that the court should strike down key consumer protections at the law’s core.
Such protections prohibit insurers from denying coverage to people with pre-existing medical conditions or from charging such people more for coverage. The rules, which protect some 52 million Americans, according to a Kaiser Family Foundation analysis, are far and away the law’s most popular features; a 2016 poll by the same organization found that 75 percent of Democrats and 63 percent of Republicans support them. But, in a letter to the House speaker, Paul Ryan, Attorney General Jeff Sessions said his department could think of no rational argument with which to defend them.
They’re not thinking hard enough. Mr. Sessions would do well to read the legal filings of 16 Democratic state attorneys general who have stepped in to do his job for him. Led by Xavier Becerra of California, they make a persuasive case, echoing sentiments expressed by legal observers on both sides, that the suit is absurd.
Mr. Sessions’s supporters have compared his stance to the Obama administration’s refusal to defend the Defense of Marriage Act in 2011. But the two aren’t equivalent. Challenges to the marriage law raised fundamental questions about who we are as a people, and what we want the Constitution to stand for. The Justice Department made the case, later accepted by the Supreme Court, that American society had evolved to the point where denying federally protected marriage rights to same-sex couples was discriminatory and therefore unconstitutional.
The Affordable Care Act, by contrast, has withstood numerous legal challenges in the eight years since it became law, including two at the Supreme Court. The current lawsuit against it hinges not on big questions of equality and justice, but on a technicality.
If that technicality were to carry the day, insurance companies could once again deny coverage, or charge much more for it, to people who have battled cancer, or are pregnant, or who have diabetes, or a heart condition, or arthritis. There’s no clear-cut definition of “pre-existing condition,” so this list goes on and on, affecting Americans of all political stripes. And even if the current law prevails in court, at least some damage will already have been done; uncertainty created by the Justice Department’s stance will almost certainly lead to higher premiums for Americans.
Add this latest move to a growing list of similar efforts — eliminating the mandate tax penalty to begin with, allowing more short-term plans on the market — and it becomes clear where the administration’s priorities lie: not in helping more Americans get good health care, not even in supporting the will of the people, but in dismantling what some political opponents built, just for the sake of doing so.
Donald Trump Is Not Playing by Your Rules
by David Brooks - NYT - June 11, 2018
Occasionally you can see eternity in a speck of time, and occasionally you can see the logic of an entire historic moment in one event. And so it was with the Group of 7 summit meeting last weekend in Quebec.
The failure of that summit wasn’t fundamentally about trade, or even the Western alliance. It was about the steady collapse of the postwar order and the way power structures are being reorganized and renegotiated across societies and across the world.
The postwar order was a great historic achievement. The founding generation built a series of organizations and alliances to fight communism, create a stable trading system, combat global poverty and promote democracy.
But the next generation lost the thread.
European elites were so afraid of nationalism that they fell for the illusory dream of convergence — the dream that nations could effortlessly merge into a cosmopolitan Pan-European community. Conservatives across the Western world became so besotted with the power of the market that they forgot what capitalism is like when it’s not balanced by strong communities.
Progressives were so besotted with their own educated-class expertise that they concentrated power upward and away from the people at the same time that technology was pushing power downward and toward the people. Elites of all stripes were so detached they didn’t see how untrammeled meritocracy divides societies between the “fittest” and the rest.
Those who lost faith in this order began to elect wolves in order to destroy it. The wolves — whether Donald Trump, Vladimir Putin, Viktor Orban, Rodrigo Duterte, Recep Tayyip Erdogan or any of the others — don’t so much have shared ideology as a shared mentality.
It begins with 1, some monumental sense of historic betrayal. This leads to 2, a general outlook that says the world is a nasty place, and 3, a scarcity mind-set that says politics is a zero-sum game in which groups must viciously scramble to survive. This causes 4, a pervasive sense of distrust and suspicion, and 5, the rupture of any relationship built on friendship or affection, and finally 6, the loss of any sense that there is such a thing as the common good.
Wolves perceive the world as a war of all against all and seek to create the world in which wolves thrive, which is a world without agreed-upon rules, without restraining institutions, norms and etiquette.
What you see then is not merely a disagreement about trade or this or that, but two radically different modes of politics, which you might call high-trust politics versus low-trust politics.
The Group of 7 is an organization built in a high-trust age. It’s based on the idea that the member nations have shared values, have shared historical accomplishments, have a carefully nurtured set of relationships and live in a community of general friendship. Canada and the U.S. are neighbors and friends.
But in the low-trust Trumpian worldview, values don’t matter; there are only interests. In the Trumpian worldview, friendship is just a con that other people try to pull on you before they screw you over. The low-trust style of politics is realism on steroids.
Whether it’s on the world stage, at home or in his own administration, Trump is trying to transform the nature of relationships. Trump takes every relationship that has historically been based on affection, loyalty, trust and reciprocity and turns it into a relationship based on competition, self-interest, suspicion and efforts to establish dominance. By destroying trust and reciprocity he creates an environment in which he can thrive.
This is a fundamental challenge to the way politics is done. What Trump did to the G-7 is essentially the same thing he did to the G.O.P. He simply refused to play by everybody else’s rules and he effectively changed the game. Trump is really good at destroying systems people have lost faith in.
It’s why he is more comfortable dealing with dictators like Putin and Kim Jong-un than with democrats like Justin Trudeau. He and the dictators are basically playing the same game.
The episode illustrates that the core divide in our politics is no longer the conventional left-right divide. The core issue in our politics is over how we establish relationship. You can either organize relationship at a high level — based on friendship, shared values, loyalty and affection — or you can organize relationship at a low level, based on mutual selfish interest and a brutal, ends-justify-the-means mentality.
The grand project for those of us who believe in a high-level, civilized world order is to find ways to restore social trust. It is to find ways to restructure power — at all levels — in order to reinspire faith in the system. It is to find common projects — locally, globally and internationally — that diverse people can do together.
As Jonathan Sacks writes in his 2007 book, “The Home We Build Together,” there’s only one historically proven way for people to build community across difference. It’s when they build things together.
In his inaugural address as president of South Africa, Nelson Mandela said, “The time to build is upon us.” So it is now. That’s the only way to head off a moral race to the bottom.
Pass a health-care law, GOP. I dare you.
by Catherine Ramped - The Washington Post - June 11, 2018
f the GOP really thinks gutting protections for people with preexisting health conditions is good policy, they should pass a damn law.
I dare them to try.
For eight years, on and off, they did. And they failed. The House passed literally dozens of repeal bills, none of which had the chance of becoming law while Barack Obama was still president.
Then Donald Trump won the White House. Republicans had unified control of government — and they chickened out.
Why? Because they feared the blowback from voters, who had finally learned a little bit about what the Affordable Care Act actually does. While the overall Obamacare brand itself was lousy, it turned out almost all of Obamacare’s major provisions were quite popular.
According to polling by the Kaiser Family Foundation, majorities of Americans in both parties liked the Medicaid expansion. They liked subsidies for lower- and moderate-income Americans buying individual insurance. They liked the elimination of out-of-pocket costs for preventive services. They liked having the federal government require insurers to cover a minimum set of benefits.
And you know what else Americans really, really liked? The bill’s protections for people with preexisting conditions.
More than 8 in 10 Democrats and about 6 in 10 Republicans said in a poll last year that the federal government should continue to prohibit health insurance companies from charging people with preexisting health conditions more for their coverage.
Americans are highly motivated to support this particular provision: Most have preexisting conditions themselves, or live in a household with someone who does. Which means they or someone they’re close to could pay much higher premiums, or even lose coverage altogether.
The Kaiser Family Foundation has estimated that about 52 million Americans under the age of 65 have health conditions that would likely leave them uninsurable if they applied for individual market coverage under the underwriting practices in place in nearly every state pre-Obamacare. Most of those people might be able to get coverage through employer-sponsored plans thanks to other laws on the books, though they’d still be at risk if they lost their job-based insurance.
Angry about all the ways Republicans’ repeal efforts would put health care out of reach for the poor, sick and old, Americans took action last year. They stormed town halls, flooded congressional phone lines, got arrested in acts of civil disobedience.
Spooked, Republican lawmakers decided they didn’t want to be known as the party that rips insurance away from asthmatics and cancer survivors. So lawmakers simply pretended they weren’t.
“Are you repealing patient protections, including for people with pre-existing conditions?” the GOP House leadership’s website said in an Obamacare repeal FAQlast year. The answer: “No. Americans should never be denied coverage or charged more because of a pre-existing condition.”
Trump likewise repeatedly promised to “ensure that Americans with pre-existing conditions have access to coverage.”
GOP legislative proposals didn’t deliver on such assurances. But in any case, the bills ultimately failed when a handful of Republican senators got cold feet about what might happen if repeal succeeded.
Unable to fully kill the ACA legislatively, Republicans turned to other, quieter ways to sabotage it. The White House has been working to expand the availability of cheap, junk insurance plans, which will siphon healthier people out of the individual insurance exchanges and lead to higher prices for the relatively sicker people who remain.
Congress also eliminated the financial penalty for not carrying health insurance, which will have the same effect.
And now the craziest sabotage scheme of all: On Thursday night, amid the Group of Seven and Singapore summit news frenzy, Trump’s Justice Department urged a federal court to throw out Obamacare’s protections for people with preexisting health issues.
Twenty Republican-led states had previously brought a suit challenging Obamacare. This lawsuit argues that now that there’s no financial penalty for forgoing insurance, the individual mandate is not only neutered but also unconstitutional — and therefore the law’s preexisting condition protections must be unconstitutional, too.
It’s a flimsy, and convoluted, argument. It’s also one that the Justice Department is legally obligated to contest. As my colleague Ruth Marcus points out, the executive branch is constitutionally required to faithfully execute the laws Congress passes, which includes defending them in court. But the Trump Justice Department is refusing to defend the case and urging the court to strike down the preexisting condition provision.
Republican lawmakers, once hysterical over Obama’s supposed “tyranny,” should be apoplectic that our current president is effectively trying to undermine Congress’s lawmaking authority.
Instead, most Republican lawmakers are keeping their heads down. Presumably because they know this is their best shot at destroying as much of Obamacare as possible while simultaneously dodging voters’ furor for that same destruction.
Cowards, all.
Vultures Circle on Rural Hospitals
by Barbara Feder Ostrov - Kaiser Health News - June 7, 2018
CEDARVILLE, Calif. -- Beau Gertz faced a crowd of worried locals at this town's senior center, hoping to sell them on his vision for their long-beloved -- but now bankrupt -- hospital.
In worn blue jeans and an untucked shirt, the bearded entrepreneur from Denver pledged at this town hall meeting in March to revive the Surprise Valley Community Hospital -- a place many in the audience counted on to set their broken bones, stitch up cattle-tagging cuts and tend to aging loved ones.
Gertz said that if they vote June 5 to let him buy their tiny public hospital, he will retain such vital services. Better still, he said, he'd like to open a "wellness center" to attract well-heeled outsiders -- one that would offer telehealth, addiction treatment, physical therapy, genetic testing, intravenous vitamin infusions, even massage. Cedarville's failing hospital, now at least $4 million in debt, would not just bounce back but thrive, he said.
Gertz, 34, a former weightlifter who runs clinical-lab and nutraceutical companies, unveiled his plan to pay for it: He'd use the 26-bed hospital to bill insurers for lab tests regardless of where patients lived. Through telemedicine technology, doctors working for Surprise Valley could order tests for people who'd never set foot there.
To some of the 100 or so people at the meeting that night, Gertz's plan offered hope. To others, it sounded suspiciously familiar: Just months before, another out-of-towner had proposed a similar deal -- only to disappear.
Outsiders "come in and promise the moon," said Jeanne Goldman, 72, a retired businesswoman. "The [hospital's] board is just so desperate with all the debt, and they pray this angel's going to come along and fix it. If this was a shoe store in Surprise Valley, I could care less, but it's a hospital."
Looking For Salvation
The woes of Surprise Valley Community Hospital reflect an increasingly brutal environment for America's rural hospitals, which are disappearing by the dozens amid declining populations, economic troubles, corporate consolidation and, sometimes, self-inflicted wounds.
Nationwide, 83 of 2,375 rural hospitals have closed since 2010, according to the North Carolina Rural Health Research Program. These often-remote hospitals -- some with 10, 15, 25 beds -- have been targeted by management companies or potential buyers who promise much but often deliver little while lining their own pockets, according to allegations in court cases, a Missouri state audit and media reports.
Enticed by such outsiders, some struggling rural hospitals around the country have embraced lab billing for faraway patients as a rescue plan. That's because Medicare and commercial insurers tend to pay more for tests to sustain endangered rural hospitals compared with urban hospitals and especially outpatient labs. In general, this kind of remote billing is controversial and legally murky, and it recently has resulted in allegations of fraud in several states, according to government documents and media reports.
Rural hospital boards, however, tend not to have expertise in the healthcare business. The president of Surprise Valley Community's board, for instance, is a rancher. Another board member owns a local motel; a third, a construction company. That lack of experience "leaves them vulnerable in many cases," said Terry Hill of the nonprofit National Rural Health Resource Center, based in Duluth, Minn.
Seeking to distinguish himself from other would-be rescuers who ran into legal trouble, Gertz described his proposal to residents as perfectly legal -- a legitimate use of telemedicine, essentially remote treatment via electronic communication such as video. "If you do it correctly," he said in an interview with Kaiser Health News, "there is a nice profit margin. There [are] extra visits you can get from telemedicine but ... it has to be billed correctly and it can't be abused."
Gertz runs several companies -- founded within the last four years -- including two labs, SeroDynamics and Cadira Labs, as well as a wellness company called CadiraMD.
He pledged in court documents to buy the bankrupt hospital for $4 million and cover its debts, saying he had lined up a $4 billion New York company as a financial backer. Kaiser Health News was unable to locate the company under the name Gertz cited, Next Genesis Development Group. He did not respond to emails seeking clarification on the issue.
Gertz, who acknowledged that he had never before run a hospital, was asked at the same gathering whether he had disclosed his "financials" to the hospital board. "As a private entity, I don't have to show my financials and I have not provided my financials to the board," he replied.
It was not clear whether board members had ever asked. Surprise Valley Health Care District board President John Erquiaga declined to comment.
A Sad Decline
Surrounded by the Warner and Modoc mountains and forests in California's northeastern corner, Surprise Valley is home to four small communities. The largest is Cedarville, population 514, at last count.
The valley, covered in sagebrush and greasewood, is part of Modoc County, one of California's poorest, with a median income of about $30,000. The closest hospital with an emergency room is roughly 25 miles away, over a mountain pass.
One of hundreds of rural hospitals built with help from the 1946 federal Hill-Burton Act, the Surprise Valley hospital opened in 1952 to serve a thriving ranching community. But it has struggled since, closing in 1981, reopening as a health clinic in 1985, then reconverting to a hospital in 1986.
A county grand jury report in 2014-15 found that "mismanagement of the [hospital district] has been evident for at least the past five years."
By last summer, those in charge didn't seem up to the task of running a modern hospital. By then, it was hardly a hospital at all. Crushed by debt, it primarily offered nursing home care, an emergency room, a volunteer ambulance service and just one acute care bed, with three others available if needed.
When state inspectors arrived last June, they found chaos. The hospital's chief nursing officer resigned during the inspection. Staffers reported unpaid checks to vendors hidden in drawers. Inspectors learned that the hospital had sent home temporary nurses because it couldn't pay them, according to their report.
The hospital's then-chief administrator, Richard Cornwell -- who staffers said had instructed them to hide the checks, according to the report -- had taken a leave of absence and was nowhere to be found. Cornwell, a healthcare accountant from Montana, was later fired and replaced with the hospital's lab director, who in turn resigned, according to public records. Reached by Kaiser Health News, Cornwell declined to comment.
Federal regulators suspended Medicare and Medicaid payments to the hospital -- a rarely invoked financial penalty -- over concerns about patient care. Those payments have since been reinstated, but a follow-up state inspection in November 2017 identified more patient care concerns.
Infighting ensued, with some residents fiercely committed to keeping the hospital open and others favoring closure, perhaps replacing it with a small clinic. Local journalist Jean Bilodeaux, 74, said board members often kept the public in the dark, failing to show up for their own meetings and sometimes making decisions outside public view.
When Bilodeaux raised questions about the hospital's finances in the Modoc County Record, a weekly newspaper, she recalled, board members "started screaming at me," she said. Now "I don't even step foot in that hospital."
Ben Zandstra, 65, a pastor in Cedarville, said that while Cornwell was in charge, he too got a chilly reception at the hospital, where he had long played guitar for patients on Christmas Eve. "I became persona non grata. It's the most divisive thing I've seen in the years I've lived here."
A White Knight, Vanished
Even residents who say they have experienced poor care at Surprise Valley Community believe its continued existence in some form is crucial -- for its 50 or so jobs, for its ER, and because it puts the region on the map.
Eric Shpilman, 61, a retired probation officer, said his now-deceased wife received "unspeakable" treatment at Surprise Valley. But to shut it down? "It would take out the heart of Surprise Valley, the heart out of Cedarville."
Last summer, the board turned to an outside management company for help.
Jorge Perez, CEO of Kansas City-based EmpowerHMS -- which promises on its website to "rescue rural hospitals" -- agreed to take over Surprise Valley's debt and operate the hospital for three years, according to a management agreement with the board.
In the two months after EmpowerHMS took over management, Surprise Valley's revenue more than doubled, according to financial documents provided by the hospital.
Then, according to hospital officials' public statements, the company stopped making the promised payments, and they haven't been able to contact EmpowerHMS or Perez since. In January, when Surprise Valley filed for bankruptcy, documents filed in court said EmpowerHMS had "abandoned" the hospital.
Around the time Perez took over, he and companies with which he was involved were dogged by allegations of improper laboratory billing at facilities in Mississippi, Florida, Oklahoma and Missouri, according to ongoing lawsuits by insurers and others, a state audit and media reports. Missouri's attorney general in May opened an investigation into one of the hospitals Perez managed, and Sen. Claire McCaskill (D-Mo.) recently called for a federal investigation into lab billing practices at one of the hospitals.
Medicare rules and commercial insurance contracts, with some exceptions, require people to be treated on an inpatient or outpatient basis by the hospitals that are billing for their lab tests. But insurers have alleged in court documents that hospitals Perez was involved with billed for tests -- to the tune of at least $175 million -- on patients never seen at those facilities. Perez has maintained that what he is doing is legal and that it generates revenue that rural hospitals desperately need, according to Side Effects Public Media.
Experts say insurers are catching on to voluminous billing by hospitals in communities that typically have generated a tiny number of tests. At one Sonoma County district hospital not associated with Perez, an insurer recently demanded repayment for $13.5 million in suspect billings, forcing the hospital to suspend the lucrative program and put itself up for sale.
Lab tests for out-of-town patients have "been a growing scheme in the last year, slightly longer," said Karen Weintraub, executive vice president of Healthcare Fraud Shield, which consults for insurers. "There's an incentive to bill for things not necessary or even services not rendered. It also may not be proper based on contracts with insurers. The dollars are getting large."
Some residents were aware of controversy surrounding Perez and his companies and said they tried to warn the hospital district board. "All they wanted to hear was, 'We will pay the bills,'" Bilodeaux said.
Neither Perez nor EmpowerHMS returned requests for comment. However, Michael Murtha, president of the National Alliance of Rural Hospitals, said in an email that he was responding on behalf of Perez, who chairs the coalition's board.
"The mission to rescue rural hospitals and set them on a path of sustainability is a difficult undertaking, and it would be a disservice to their communities to preclude struggling facilities from availing themselves of every legal and regulatory means to generate badly needed revenue," Murtha wrote, in part.
"Such pioneering efforts are not always welcomed by those who have benefited from the status quo," he said.
Regarding Perez's role at Surprise Valley, Murtha wrote that Perez tried to help save the facility by "effectively" donating over $250,000 but then discovered it faced "more challenges than had been initially realized." Murtha said Perez worked to attract others who might be better able to help the hospital.
A New Savior?
One of those "others" in Perez's orbit was Gertz, the Denver entrepreneur, who arrived in Surprise Valley several months ago.
The Denver executive told residents and Kaiser Health News that he operated a lab that previously performed tests for hospitals owned or managed by Perez's companies. At one hospital board meeting, Gertz also said he had handled marketing for Perez companies for 1½ years.
However, he said he had parted ways with Perez after learning of his controversial dealings in other states, and Gertz said Perez now owes him more than $14 million. (Gertz and his companies have not been named as defendants in lawsuits reviewed by Kaiser Health News involving Perez and his companies.)
"I come in with a certain guilt by association," he told the Modoc County Board of Supervisors in April, according to a recording of the meeting. But Gertz sought to assuage any concerns, telling the supervisors he had a "passion" for rural life. He'd grown up on a farm, he said, where he "hung out with the chickens" and cleaned the stables every morning.
Gertz said his plan was different from Perez's and legal because the hospital and one of his Denver labs, SeroDynamics, had become one business. With the hospital board's approval earlier this year, he loaned the district $2.5 million for it to buy SeroDynamics -- effectively an advance on the hospital's purchase price of $4 million, according to bankruptcy court documents. SeroDynamics' website now proclaims the lab a "wholly-owned subsidiary" of the Surprise Valley hospital, with "national reach."
Robert Michel, a clinical laboratory management consultant who learned of the terms of the transaction from a reporter, offered a critical assessment. "The essence of this arrangement is to use the hospital's existing managed-care contracts with generous payment terms for lab tests as a vehicle to bill for claims in other states," said Michel, editor-in-chief of a trade magazine for the lab industry. This arrangement "should ring all sorts of bells" for the hospital board, he said.
For now, Gertz has said, dollars are flowing in. According to the journalist Jean Bilodeaux, Gertz phoned in to a Surprise Valley hospital board meeting last month to report that the lab billing so far had netted about $300,000. According to bankruptcy court documents, 80% of the profits will go to his companies, 20% to the hospital.
Those are terms some in Surprise Valley are willing to live with.
The next step, for Gertz, is taking ownership of Surprise Valley's entire operation. For the 1,500 district residents, voting no on Tuesday almost certainly means closure, leaving taxpayers with potentially more debt, including any money they may owe Gertz.
That is good enough reason to go with the Denver entrepreneur, said acting hospital administrator Bill Bostic.
"He's got something we haven't got -- which is money," Bostic said.
https://www.medpagetoday.com/hospitalbasedmedicine/generalhospitalpractice/73344?K.K.R. Said to Be Near Deal to Acquire Envision Healthcare
by Michael J. de la Merced - NYT - June 10, 2018
K.K.R., the private equity giant, is near a deal to buy Envision Healthcare, a person briefed on the matter said on Sunday, months after the company put itself up for sale as controversy over its hospital billing practices mounted.
The deal, which would be one of the biggest by a private equity firm in recent years, reflects Wall Street’s continued interest in the health care industry.
Envision, the product of a merger in 2016 of two hospital service providers, is one of the country’s biggest doctor-staffing companies, including for emergency room services. It also runs outpatient surgery centers. The company has gained business from hospitals that have come to rely on outside contractors to increase the efficiency of some areas, like emergency rooms, that have been financial drains in the past.
The company lost $228 million last year, though it collected $7.8 billion in revenue.
Envision has been under scrutiny for several months after The New York Times reported on large bills that have come from its physician-staffing business for emergency rooms. A study conducted by Yale found that hospitals where Envision’s Emcare unit operated appeared to charge more out-of-network bills for at least one insurer.
Questions about Envision’s billing practices led to scrutiny from Senator Claire McCaskill, Democrat of Missouri, and lawsuits from investors.
In October, the company said it had hired advisers to consider a potential sale.
Under the terms of the proposed deal, K.K.R. would pay about $46 a share in cash, according to the person briefed on the matter, who was not authorized to speak publicly. That would be about 5 percent higher than Envision’s closing stock price on Friday.
At that price, Envision’s equity value would be about $5.5 billion. Including the assumption of the company’s long-term debt, the enterprise value of a transaction would be about $10 billion.
K.K.R. is no stranger to Envision. Last year, the two struck a deal in which Envision would sell its ambulance operations to Air Medical Group, a company owned by the private equity firm, for about $2.4 billion.
News of K.K.R.’s negotiations with the company was reported earlier by The Wall Street Journal.
The High Price of Failing America’s Costliest Patients
by Dhruv Khullar - NYT - September 28, 2017
Even patients with whom I have the best rapport would probably rather not see me so often.
Sometimes I readmit a patient I cared for just weeks before in the hospital. “Nice to see you again,” I offer with a smile. The usual response, loosely paraphrased: I’d rather be anywhere else.
This reflects not some deep deficiency in my bedside manner (I think), but rather an essential truth about medicine: People want health, not health care. And those who require the most health care and get the least health — high-need, high-cost patients with multiple or severe medical conditions — feel this most acutely.
Leaving aside the moral compulsion to improve the quality and efficiency of their care, there is an overwhelming financial imperative to do so. It’s well known that the country’s staggering health care costs are not evenly distributed. Just 1 percent of patients account for 20 percent of costs, and 5 percent of the population accounts for nearly half the nation’s health care spending.
But exactly who these patients are — and how we can better meet their needs — is less clear.
Misaligned Financial Incentives
One emerging definition, based on research, focuses on people with three or more chronic conditions who have a functional limitation, such as difficulty dressing, bathing, feeding themselves, walking, taking medications or using transportation.
Functional impairment seems to be a critical distinction between being chronically ill and being chronically ill with “high needs.” Patients with multiple chronic illnesses but without functional limitations have only modestly increased medical costs, and they have incomes similar to the general population. But those with chronic illnesses and a functional limitation have four times higher medical costs — more than $21,000 annually — and spend twice as much out of pocket, despite having much lower incomes. They visit the doctor more often, use more home health services, and are three times as likely to be hospitalized.
There are 12 million such Americans. They are veterans with disabilities, grandparents with Alzheimer’s, young women with lupus, kidney transplant recipients, factory workers with cancers that rage through rounds of chemo.
Three-fourths are white, two-thirds are women, half are over 65, and more than a quarter did not finish high school. They have more social stressors like housing insecurity and social isolation, and many have serious mental illness and substance use issues that contribute to higher rates of emergency department visits, hospitalizations and difficulty navigating the health system. More than 80 percentare publicly insured through Medicare or Medicaid.
“We can’t make the system work unless we do better with this population,” said David Blumenthal, a health policy expert and president of the Commonwealth Fund. “It’s important from a humane standpoint — these are our friends, our family. But it’s also important from a cost standpoint, and the effect on taxpayers.”
Dr. Blumenthal says misaligned financial incentives pose a critical barrier. In fee-for-service medicine, doctors and hospitals are paid for each service, and have little reason to invest in programs that reduce the number of medical interventions or keep people healthy. The more frequently a patient is seen, admitted, scanned, biopsied or prescribed medication, the better. This is especially problematic for high-need patients, who require an abundance of services, and whose social and medical complexity makes it hard to streamline and coordinate care.
“In our current system, being inefficient means higher revenue,” Dr. Blumenthal said. “It’s hard to do the right thing in fee-for-service. But value-based payment reverses the incentives so they’re aligned with patient and societal goals. When you get the incentives right — when you reward high value instead of high volume — you see a burst of creativity among providers finding ways to do better.”
A California Company With a Plan
One such burst has come at CareMore Health, a California-based health system and Medicare Advantage plan that specializes in caring for chronically ill patients.
Like other such Medicare Advantage plans, CareMore receives an overall payment from the government for the expected costs of its beneficiaries, instead of separate payments for each service. If it provides care more efficiently compared with predetermined benchmarks, it keeps the difference. (To prevent skimping on care, these plans are required to meet quality standards, cover all traditional Medicare services, and invest savings in additional benefits for members, or lower premiums to attract new enrollees.) Unlike most Medicare Advantage plans, though, CareMore also directly provides the medical care it pays for.
Every CareMore enrollee has an initial visit where a team of doctors, nurse practitioners, dietitians, social workers and behavioral health specialists performs an evaluation of their medical and social needs. The team then tailors its resources — chronic disease programs, nutritional counseling, social support referrals, behavioral therapy — to those needs with the express goal of keeping patients out of the hospital.
In one example, heart failure patients — for whom weight gain can mean fluid retention and hospital admission — get a wireless scale to weigh themselves at home, which sends data to a CareMore team. If team members see a worrisome trend, they can remotely adjust the patient’s medications, or if necessary, schedule a same-day visit.
“In hospitals, we’re great at customizing care,” said Sachin H. Jain, president of CareMore. “We have different intensities for patients with different needs: an observation unit, a general medical ward, an intensive care unit. But on the outpatient side, we haven’t done that. In your average clinic, all patients get scheduled for 15 or 30 minutes, regardless of whether their problem list is empty or 10 pages long. Our model tries to fix that.”
CareMore says it spends about twice as much as traditional Medicare on prevention and disease management programs for its sickest patients — but only half as much over all. In 2015, CareMore patients had 20 percent fewer hospitalizations and spent 23 percent fewer days in the hospital compared with fee-for-service Medicare patients of similar health status.
Other systems have shifted their focus in similar ways. Geisinger Health Plan in Pennsylvania, for instance, pays for extra nurses in primary care offices to help patients manage their chronic diseases: filling prescriptions, checking blood pressure, ensuring regular checkups. It employs case managers devoted to overseeing tenuous, often costly, transitions between the hospital and home for complex patients. A single prevented heart attack, amputation or stroke can more than offset the extra cost of another set of eyes.
Another program, known as the Program of All-Inclusive Care for the Elderly, gets fixed payments from Medicare and Medicaid to keep patients out of nursing homes and living in their communities.
Although the program serves people who are generally frailer than other Medicare patients, it has led to lower costs, fewer hospital stays, higher patient satisfaction, and possibly, longer lives. Over the past decade, it has grown to over 100 sites in 32 states from about 40 sites in 22 states. And it recently received a flood of fundingfrom private equity and venture capital firms betting these providers can cut costs by keeping patients in homes and out of institutions.
Better care for high-need patients will probably require accelerating these types of innovations, with an emphasis on paying for more effective services instead of intensive services. Another important step would be aligning payment models across the health system — Medicare, Medicaid, private insurers — so providers don’t have to design different care models for differently insured patients.
More fundamentally, progress may hinge on expanding our cultural conception of medical triumph beyond robotic surgeries and genome sequencing to include keeping a 74-year-old woman with heart failure, emphysema and breast cancer — with eight medications, four subspecialists and zero next of kin — out of the hospital for the next year.
What’s often lost in talk of dollars and drugs is a core that those of us providing and receiving care feel every day: No one wants to be in a hospital. Patients want independence. They want dignity. They want to do what they love and be with whom they love. If the goal of medicine is to promote health — not health care — maybe we’ve been doing it wrong. And we’re all paying the price.
https://www.nytimes.com/2017/09/28/upshot/the-high-price-of-failing-americas-costliest-patients.html
Can Low-Intensity Care Solve High Health Care Costs?
by Dhruv Kuhllar and Austin Frakt - NYT - June 11, 2018
How much you spend on medical care depends on what you get, but also where you get it.
Confoundingly to many, the cost of the same procedure on the same patient by the same physician can vary by thousands of dollars depending on whether it’s performed in a hospital, a hospital’s outpatient department, an ambulatory surgical center or a doctor’s office. It can also vary by who’s paying the bill — which insurer or public program.
And even for the same insurer, cataract surgery might cost twice as much in a clinic affiliated with a hospital compared with an independent surgery center. The cost of cancer care is significantly higher in hospital outpatient departments compared with community practices, partly because insurers often pay hospitals double for chemotherapy drugs. Delivering a baby in a teaching hospital costs about $2,000more than in a community hospital.
Some of this is a result of different prices. Some reflects differences in how much care is delivered: its intensity.
Either way, such cost variation across care settings has led policymakers to consider paying more evenly for medical services regardless of where they’re delivered, and to shift care from expensive, high-intensity settings to cheaper, low-intensity ones. Doing so, the thinking goes, could result in more efficient use of resources by health systems.
But new research also shows the downside of this approach: A study of Medicare hospitalizations found that almost all patients are more likely to survive at teaching hospitals, which tend to be more expensive. Amid our enthusiasm for more efficient care settings, we should be cleareyed about the limitations: Sometimes less is more, but sometimes more is more.
To some extent the shift toward cheaper settings is already happening. Medicare has started to close the gap in payment rates between hospital-owned clinics and private doctor’s offices through site-neutral payments. The Massachusetts Health Policy Commission has recommended that more patients be diverted to low-cost community hospitals from high-priced academic medical centers. And insurers are encouraging health systems to shift hospital care to less expensive outpatient clinics, rehab facilities and even patients’ homes.
It has long been common for lower-priced community hospitals to transfer patients to higher-priced and more intensive teaching hospitals. But some hospitals like Massachusetts General Hospital, a relatively higher-priced, academic medical center in Boston, now have programs in which they send stable patients from their emergency departments to affiliated, lower-priced community hospitals.
Other academic centers are sending patients not to another hospital, but directly home. In 2014, the Mount Sinai Health System began a hospital-at-home programfor patients sick enough to need a hospital but stable enough to be cared for at home. Patients get visits from doctors, nurses, physical therapists and social workers, and they can have intravenous antibiotics, lab draws and breathing treatments in the comfort of their home. Research suggests that care for patients treated at home costs less and results in fewer complications, higher satisfaction and lower mortality.
These efforts are part of a broader trend away from high-intensity-care settings. The use of inpatient care is declining across the United States, including a 6 percent drop in inpatient admissions for Medicare patients from 2004 to 2010. The Department of Veterans Affairs has experienced a 10 percent decline in inpatient use over the past decade, while outpatient visits have increased by 40 percent. New technologies are making outpatient care safer, and new payment models are encouraging a shift to lower-cost settings.
But not all such efforts may serve patients well. There’s concern, for example, that outpatient surgical centers don’t always have the resources and staff needed to handle potential complications of the increasingly complex operations they’re taking on. Other research suggests that hospitals that spend more and do more may have better patient outcomes and lower mortality rates.
Teaching hospitals are generally the costliest medical environments. Some have argued that only the sickest patients — for whom complex services and technologies are most likely to help — should be treated there, while relatively healthy patients should preferentially be cared for in less costly community hospitals. But do sicker patients really do better at teaching hospitals? And do healthier patients fare just as well in either setting?
The new study on Medicare hospitalizations sheds some light. (Both of us were part of the group that conducted this study.) Led by Laura Burke and Ashish Jha at Harvard, the study analyzed more than 11 million Medicare hospitalizations and found that almost all patients — whether very sick or relatively healthy — had lower mortality rates at teaching hospitals. But there are also some differences.
Among patients admitted for operations like hip replacements, the patients with the most health problems over all were the ones likeliest to benefit from a teaching hospital. On the other hand, among people admitted with conditions like pneumonia or heart failure, though all groups did better at the teaching hospitals, the difference was greatest for the relatively healthy patients.
The more advanced technologies available at teaching hospitals explained some, but not all, of the difference. Other factors like subspecialty expertise, more clinicians involved in care, and greater availability of ancillary services may also be playing a role.
Given the high — and sometimes unjustifiable — cost of some health care settings, it seems reasonable to pursue payment parity for comparable care delivered in different settings. And all other things equal, the shift toward lower-intensity, lower-cost settings is a worthy goal. But in some cases, outcomes may not be equal, and it seems we should make sure we’re not cutting quality when we’re cutting costs.
Easier Drug Approval Isn’t Cutting Drug Prices
by The Editorial Board - NYT - June 8, 2018
Dr. Scott Gottlieb, the commissioner of the Food and Drug Administration, recently vowed to bring “new science” to market faster, in hopes that patients benefit from treatment advances sooner.
Medications are already clearing regulatory hurdles faster than ever, but it’s not clear that people, as opposed to drug companies, are feeling much benefit. For several years the F.D.A. has been lowering the standards by which it decides whether new medications are safe and useful. The agency now requires fewer and smaller clinical trials, approving some drugs after just one successful trial. It also accepts short-term effects (like whether a drug shrinks a tumor) instead of clear clinical outcomes (like whether the drug prolongs life), and ever-smaller improvements in health as sufficient proof that a medication works and is worth selling.
On its face, this shift seems practical. The nature of pharmaceuticals has changed. Instead of developing broad-spectrum medicines that work for the masses, drugmakers are pursuing personalized therapies that work for — and thus only need to be tested in — much smaller populations whose conditions share the same genetic profiles. That can make large clinical trials seem wasteful.
But, if we’re not careful, the changes now underway may do more harm than good. It’s easy to argue that red tape is bad, especially when lives are at stake. But regulations were created for a reason, and history is rife with examples of what happens when we don’t have them.
Drug approval has become so lax and relatively inexpensive, one recent studysuggested that companies could theoretically test compounds they know to be ineffective with the hope of getting a false positive result that would enable them to market a worthless medicine at an enormous profit.
There are other holes in the “less regulation” argument, too.
According to industry watchdogs, reducing clinical trial costs will not help curb list prices because those prices are not determined by investment costs; they’re determined by what the makers think the market can bear, which helps explain why profit margins are so high.
Smaller trials also make it more difficult to determine a drug’s actual medical value: If you don’t know how a medication compares with other treatments, or whether it will actually improve the quality or length of life, how can you possibly know what it’s worth?
And lower standards might actually inhibit innovation, by giving companies less incentive to make substantial improvements to their offerings.
“It’s at least possible that if I know we’ve got to show actual, substantial benefits, or that it’s got to be novel in some way, that I might push harder,” says Dr. Steven Joffe, a pediatric oncologist at the University of Pennsylvania.
Dr. Gottlieb and others say that patients facing long odds and potentially fatal diseases don’t have time to wait for more clinical trials. That’s a fair point. Reasonable people can disagree over where the fulcrum between speed and evidence should be placed. But a new drug is only innovative if lives are extended or improved, and we can’t know if they will be without more data.
Based on the data we do have, the thousand-plus cancer drugs now in clinical development are quite likely to help only a handful of patients, and only a very little bit: According to one recent study, targeted cancer therapies will benefit fewer than 2 percent of the cancer patients they’re aimed at. That reality is often lost on consumers, who are being fed a steady diet of winning anecdotes about miracle cures. Those stories are heartening, especially if you or someone you love is one of the people battling the long odds who could be helped. But they omit a lot, including the number of people who aren’t saved — or even helped — by a given drug, and the likelihood that any given success would have occurred even without the new medication.
The Food and Drug Administration is still the world’s leading regulator of medicine by far, setting the bar for countries around the world. Lest it lose that standing, the agency should demand more of the drugs (not to mention medical devices) it approves.
Requiring at least two successful clinical trials for any drug — as the government did until recently — would be a great start; it would sharply reduce the odds of false positives (drugs that show benefit but only by pure chance). It would also help to set minimum benefit standards, requiring that a drug improve patients’ lives and health by a certain, measurable amount.
Another thing federal officials can do is to use independent cost-benefit analysis to set a drug’s list price. The United States is the only developed country in the world that doesn’t do this, and the result is that the prices patients pay for medications often have little to do with how much benefit is derived from them.
Officials in the past have rejected this approach because of concerns that consumers would be robbed of choice, either because an insurance company would force them to switch from their current medication to one that it determined was fairly priced, or because pharmaceutical companies would choose not to market drugs that they thought were not priced generously enough.
But consumers, who now rank steadily climbing drug prices at the top of their list of health concerns, might be willing to make these trade-offs. At the very least, people who rely on medications deserve a better sense of what they’re paying for.
Medicaid’s Nickel-and-Dime Routine
by The Editorial Board - NYT - June 7, 2018
D’ashon, a Texas toddler with severe birth defects, needed 24/7 nursing care to keep his breathing tube clean and to prevent him from pulling it out.
His foster mother asked Superior HealthPlan, the insurance carrier that provides Medicaid services to the state’s 30,000 foster children, for additional nursing hours, according to a Dallas Morning News investigation. Superior said no, even after D’ashon’s doctors and nurses said that it was a matter of life or death.
Bind his arms with a soft splint to keep him from removing his breathing tube when no nurse was on duty, the company suggested to D’ashon’s foster mother. The insurance carrier finally agreed to provide round-the-clock nursing care — after D’ashon choked while no nurse was on duty and lapsed into a permanent vegetative state.
As a wealthy and politically powerful company gambles lives for profit, Texas officials look the other way, the Morning News reporters tell us. This is the sorry state of what passes for good-enough care for patients who depend on Medicaid, among the most vital safety nets for the American poor and disadvantaged, in the second most populous state.
Elsewhere, officials are striving to make it harder for people to get Medicaid at all.
Last week, Arkansas became the first state to require some Medicaid recipients towork in order to keep their health insurance. Three other states have secured federal permission to do the same, and several others have similar requests pending with the Centers for Medicare and Medicaid Services.
Proponents of work requirements say that the goal is not to punish the poor, but to lift them out of poverty by nudging them into the work force. But decades of experience with similar social experiments tell us that it will not play out that way. The welfare-to-work strategies of the 1980s and 1990s succeeded at getting people off government rosters — but without alleviating their poverty.
The current Medicaid proposals are likely to have the same effect: The Urban Institute has found that in Arkansas (to take one example) nearly 80 percent of Medicaid enrollees who would be subject to the new work requirements face limitations that include significant health problems, a seriously ill family member, no vehicle or a lack of education. These barriers would make it difficult to impossible for many of them to meet the new rule’s monthly reporting requirements, even if they managed to secure the required 80 hours of work each month.
If only such scrutiny were applied to Medicaid insurers. But even as more Medicaid beneficiaries — including those with complex medical conditions — are shuttled into cost-saving managed care programs, very little is being done to guard against abuses like the ones that left little D’ashon with permanent brain damage. The Centers for Medicare and Medicaid Services began a “scorecard” program on Monday to track the performance of Medicaid providers, but participation is voluntary and participants will face no penalties for poor performance.
“Conservatives love to claim that public program fraud is driven by the people utilizing the programs,” says Frederick Isasi, executive director of Families USA, a health care advocacy group. “But it’s actually corporations, providers and carriers that perpetrate most of it.”
After an investigation, Texas health officials advised the state to fine Superior $345,000 for its negligence. But a company spokeswoman told The Dallas Morning News that it was not aware of any such penalty. Meanwhile, even as Texas let insurers nickel-and-dime children like D’ashon, its rejection of federal funding for Medicaid expansion under the Affordable Care Act helps it retain its distinction as the state with the highest rate of uninsured residents.
Of course egregious insurance denials are not unique to Medicaid. Accounts of life-or-death requests denied or dangerously delayed by private insurers occur every week. But Medicaid covers our most vulnerable citizens, including children in foster care, the permanently disabled and the elderly — people we have a special duty to protect.
In 2018, that duty to protect requires the Centers for Medicare and Medicaid Services to reject state work requirement waivers, including any currently pending. It demands that the United States District Court side with Medicaid enrollees in Kentucky who filed a lawsuit arguing that such waivers are illegal. And it should lead states seeking similar work requirements to abandon these plans, and shift their attention and resources away from policing the neediest people to strengthening oversight of insurers.
Medicaid expansion has now been implemented in 33 states, signifying that most citizens understand and accept this responsibility. But to fully meet it, funding and oversight need to be in the right places.
Editor's Note:
This NYT editorial illustrates why it is so important that when we use the term "universal health care, everybody in, nobody out", it is so important to remember that "everybody in" means everybody in the same system, and that system must be, like traditional Medicare, a public good designed to facilitate the provision of appropriate medical care, not a for-profit enterprise designed to maximize shareholder value by withholding medical care.
If so, the case of D'ashon cited above would not have played out as it did.
-SPC
Is this the year the AMA finally joins the single-payer movement?
by Jonathan Barnes, Robertha Barnes and Sydney Russell Leed - STATnews - June 8, 2018
Fifty years ago this month, at the 1968 meeting of the American Medical Association, a fourth-year medical student named Peter Schnall seized the microphone and scolded several hundred of the most prestigious, highly educated white men in America.
“Organized medicine has never felt responsible and accountable to the American people for its actions and continues to deny them any significant voice in determining the nature of services offered to them,” Schnall chastised the group.
“Shut up!” yelled the doctors, who were accustomed to being treated with respect and deference, not with outrage and indignation.
Schnall’s outburst, coordinated by members of Martin Luther King Jr.’s Poor People’s Campaign and the Medical Committee for Human Rights, aimed to be a wake-up call to an institution that was highly successful at protecting physicians’ “interests against encroachment” but failed to meet the public health and human needs of patients by opposing both civil rights and the expansion of safety-net health programs.
At a time when Jim Crow racism harmed the health of millions of African-Americans in the South, the AMA repeatedly rebuffed requests from the National Medical Association, an organization that represents African-American physicians, to work together to end racial health disparities.
Even after the passage of the Civil Rights Act in 1964, the AMA allowed local medical societies to discriminate against physicians and patients of color. The AMA also mobilized attacks against major social programs intended to benefit all Americans, from Social Security to Medicare and Medicaid. In 1948, the AMA leadership spent millions on a campaign to characterize President Truman’s popular universal health care plan as “socialized medicine.”
Today, in the midst of a revived Poor People’s Campaign, physicians and medical students are again pressuring the AMA to be more responsive to the needs of the nation’s uninsured and underinsured. At the AMA’s House of Delegates annual meeting in Chicago this weekend, its Medical Student Section will ask the AMA to end its decades-long opposition to a single-payer health insurance program, a system better known as Medicare for All that would be publicly financed but privately delivered. Why bother? For better or for worse, the AMA sets the agenda for American health policy.
It is clear to medical students that no matter how well they are trained, far too many Americans will remain sick and poor under market-based medicine.
Our wildly inefficient system is currently dominated by private insurance companies, a health care model spearheaded by the AMA. It produces some of the worst health outcomes in the industrialized world — the U.S. has the highest infant mortality rateand the highest number of avoidable deaths — and devours an ever-increasing share of our economy, with health spending accounting for a whopping 17.9 percent of our gross domestic product. Despite the improvements of the Affordable Care Act, 28 million Americans remain uninsured, without access to primary care that could prevent costly and life-threatening diseases. Those fortunate enough to have insurance face prohibitively expensive co-pays, premiums, and deductibles that limit access to care, and medical expenses are a leading cause of bankruptcy.
Contrary to the AMA’s assertions, a single-payer system would give health care providers more autonomy because their clinical decisions wouldn’t be second-guessed by insurance companies. Patients would have free choice of any doctor, allowing providers to compete based on quality of care. Physicians would spend less time on administrative responsibilities like paperwork and billing, and more time seeing patients, which boosts both their work satisfaction and income. In fact, when Canada implemented its single-payer program, physicians enjoyed long-term salary increases.
The AMA’s opposition to Medicare for All puts the organization at odds with the public and with America’s doctors. Sixty percent of Americans believe the federal government has a responsibility to provide health coverage for all; 51 percentspecifically support the creation of a single-payer health system, as does the majority (56 percent) of practicing physicians. The single-payer bill in the House of Representatives, H.R. 676, now has a record 122 co-sponsors; in the Senate, Bernie Sanders introduced his updated Medicare for All Act in 2017 with a record 16 Senate co-sponsors, including most of the leading Democratic contenders for president in 2020.
In the AMA’s evaluation of these and other health system reform proposals, it asserts that a national health program could lead to a concentration of market power in the hands of the government, limiting patient choice and physician autonomy: “Reform proposals should balance fairly the market power between payers and physicians or be opposed.”
Although the AMA’s membership has steadily declined since the 1950s, it remains the most powerful doctors group in the country. The growing Medicare for All campaign is unlikely to be won without its support.
Will the AMA choose to move toward guaranteeing health care as a human right or continue down the wrong side of history by linking patients’ health to the vagaries of the private insurance market?
The activists who staged the protest at the AMA meeting in 1968 hoped that the organization would finally recognize health as a human right. It didn’t. A lot has changed in the ensuing 50 years. It’s time the AMA does, too.
Jonathan Michels is a premedical student at the University of North Carolina at Greensboro. Robertha Barnes is an MS/MD student at SUNY Upstate Medical University. Sydney Russell Leed is an MD/MPH student at SUNY Upstate Medical University. All are board members of Physicians for a National Health Program, an organization that advocates for an improved and expanded Medicare for All health system.
Trump’s New Plan to Dismantle Obamacare Comes With Political Risks
by Abby Goodnough, Robert Pear and Charlie Savage - NYT - June 8, 2018
WASHINGTON — After failing to repeal the Affordable Care Act with a Republican-controlled Congress, the Trump administration is seizing on a different strategy for dismantling the law, one fraught with political risk. It is asking a court to throw out major elements, including hugely popular provisions that protect sick people from being denied health insurance or charged higher rates.
Democrats swiftly portrayed the surprise move by the Justice Department, outlined Thursday in a brief supporting a court case filed by Texas and 19 other states, as a harsh blow to Americans with fragile health and their families. Already, Democratic candidates in the midterm elections had been playing up their party’s role in blocking last year’s repeal efforts and their recent success in pushing for the expansion of Medicaid in two more states. Now they have a new talking point, and they lost no time testing it.
Republicans are divided between conservatives who had vowed to eliminate the law and moderates, some in tough races, who want to preserve the popular protections for people who are sick.
Asked about the Justice Department move, Jesse Hunt, a spokesman for the National Republican Congressional Committee, spoke instead about the Democrats.
“Democrats destroyed the health care system as we knew when they rammed Obamacare down our throats,” he said in an email, “and now all they can talk about is moving to a single-payer health care system.”
The Affordable Care Act has already survived several court challenges, and this latest test of its durability could take months or years to go through the legal system. But the uncertainty it creates in the meantime could rattle the law’s insurance marketplaces just as insurers are starting to file rate requests for next year. The companies were already nervous because of Congress’s decision last year to eliminate the penalty for going without health coverage.
Recent polling has found that health care is a crucial issue for voters this year. In an NBC News/Wall Street Journal poll released this week, 22 percent of respondents said it would be the most important factor in deciding their vote, ahead of the economy, guns, taxes and immigration.
In the past, polls have found that both Republicans and Democrats favor protecting coverage for the tens of millions of Americans with pre-existing conditions. A December 2016 poll by the nonpartisan Kaiser Family Foundation found that 75 percent of Democrats and 63 percent of Republicans approved of the law’s provision prohibiting insurance companies from denying coverage based on a person’s health status or medical history. Even President Trump called it one of the law’s “strongest assets” during an interview with “60 Minutes” shortly after he won the election.
The issue became a flash point that helped derail Republican efforts to repeal the law last year, with opponents of the party’s health bills speaking loudly against weakening protections for the sick and vulnerable.
Senator Brian Schatz, Democrat of Hawaii, predicted that the resurrection of the issue would mobilize voters, saying, “There’s nothing quite like the administration taking an action in court to illustrate the simple fact that they are still coming after your health care.”
Democrats around the country were already working hard on Friday to get that message across. In Pennsylvania, where Republicans last month nominated Representative Lou Barletta for Senate, the state Democratic Party issued a statement that warned, “Donald Trump’s lapdog Lou Barletta will throw his full support behind this attempt to end coverage for people with pre-existing conditions.”
Senator Susan Collins, Republican of Maine, who voted against the Republican repeal bills in the Senate last year, also expressed concern about the administration’s new push, saying it “creates further uncertainty that could ultimately result in higher costs for millions of Americans and undermine essential protections for people with pre-existing conditions, such as asthma, cancer, heart disease, arthritis and diabetes.”
But that was not the talking point of the party’s election arm. Mr. Hunt shifted the focus to Democratic calls for a single-payer system, saying, “Massive tax increases and reduced quality of care are about as popular as its architect: Nancy Pelosi.”
Republicans have been trying to dismantle the Affordable Care Act, a centerpiece of President Barack Obama’s legacy, since it was enacted in 2010 without any Republican votes. Attempts to repeal it in Congress have failed, but opponents of the law have also filed scores of lawsuits challenging various provisions.
The Supreme Court in 2012 upheld a major provision of the law that required most Americans to have health insurance or pay a tax penalty. The court said that while this “individual mandate” exceeded Congress’s power to regulate commerce, it could be upheld as an exercise of Congress’s taxing power. But last year the Republican-controlled Congress eliminated those penalties as part of the $1.5 trillion tax overhaul that Mr. Trump signed in December.
Two months later, Texas and the 19 other states filed suit in the Federal District Court in Fort Worth, asserting that the mandate could no longer be justified as a tax and should therefore be struck down — and arguing that as a result, the rest of the law must be invalidated, too.
The Justice Department brief did not go so far, but it said that Judge Reed O’Connor should void both the mandate and the protections for people with pre-existing medical conditions, while leaving in place the expansion of Medicaid in more than 30 states.
Attorney General Jeff Sessions said that it is “a rare case” for the Justice Department not to defend provisions of a law but added that he could not find any “reasonable arguments” to support their constitutionality.
If the administration prevails in the case, the full force of the decision would not hit until after the midterm elections on Nov. 6. But insurers said the legal debate alone could cause turmoil in insurance markets this summer.
“At the very least it adds uncertainty at exactly the moment when plans are trying to set rates for next year,” said Ceci Connolly, the chief executive of the Alliance of Community Health Plans. “At the worst it could strip away guaranteed coverage for those with pre-existing conditions.”
The main trade association for health insurers came out strongly against the administration’s position.
“Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019,” said Matt Eyles, the president and chief executive of America’s Health Insurance Plans, a trade group for insurers.
The Trump administration’s move fueled accusations that it was politicizing the Justice Department, which is supposed to defend the constitutionality of federal statutes in court — even if the administration in power does not like them — if reasonable arguments can be made.
Donald B. Verrilli Jr., a solicitor general in the Obama administration, said there were obviously reasonable arguments that could be made in defense of the Affordable Care Act in the Texas case, pointing to those in a brief filed Thursday by California and 15 other states.
“Just read the brief of the states that intervened to defend the law,” Mr. Verrilli said in a statement. “A compelling defense of the law is right there in black and white. This is a sad moment.”
Three career lawyers in the department’s civil division withdrew from the case earlier on Thursday and did not sign the brief. A Justice Department spokeswoman said the lawyers’ withdrawal had been a department decision, declining to specify whether the lawyers had personally objected to continuing on the case. But Martin S. Lederman, a Georgetown University law professor who was a Justice Department official in the Obama administration, called the mass withdrawal a likely sign of distress.
“Justice Department attorneys don’t withdraw from cases simply because the government is making an argument the lawyers think the courts should or would reject,” he said. “Such withdrawals are exceedingly rare — typically only when the argument is indefensible, as they are here.”
The Trump administration’s move drew comparisons to the Obama administration’s decision, in 2011, to stop defending the constitutionality of the Defense of Marriage Act, a law that barred federal recognition of same-sex unions that were lawful at the state level, and which the Supreme Court later struck down. Conservatives at the time accused the Justice Department of politicization.
The Texas case will be decided first by Judge O’Connor, a conservative appointee of President George W. Bush. The case would then go to the Court of Appeals for the Fifth Circuit, where appointees of Republican presidents hold a 10-5 majority over Democratic appointees. Whatever the lower courts decide, the case seems destined to reach the Supreme Court.
Insurers oppose legal challenge to health law
by Mark Sherman - AP - June 8, 2018
WASHINGTON — The health insurance industry’s largest trade group said Friday that it opposes the Trump administration’s decision to stop defending key provisions of the federal health law in court, saying that will remove consumer protections for people with health problems and for older adults.
America’s Health Insurance Plans said the step will also create more turmoil in insurance markets that have already seen steep premium increases.
‘‘Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019,’’ the group said in a statement.
The Trump administration said in a court filing late Thursday that it will no longer defend key parts of the Affordable Care Act, including the requirement that people have health insurance and provisions that guarantee access to health insurance regardless of any preexisting medical conditions.
The decision, announced in a filing in a federal court in Texas, is a rare departure from the Justice Department’s practice of defending US laws in court.
Texas and other Republican-led states are suing to strike down the entire law because Congress recently repealed a provision that people without health insurance must pay a fine. The repeal takes effect next year.
Texas says that without the fine in place, the requirement to have health insurance is unconstitutional and that the entire law should be struck down as a result.
The administration said it agrees with Texas that the so-called individual mandate will be unconstitutional without the fine.
It also said provisions shielding people with preexisting medical conditions from being denied coverage or charged higher premiums and limiting how much insurers can charge older Americans should fall as well. It said the rest of the law, including Medicaid expansion, can remain in place.
The lawsuit, filed in February, is in many ways a replay of the politically divided litigation that ended with the Supreme Court upholding the health care overhaul in 2012. In the new suit, California is leading a group of Democrat-led states in defending the law.
The major difference is that the Justice Department under President Trump has largely switched sides.
Attorney General Jeff Sessions said in a letter to Congress on Thursday that Trump, who campaigned on repealing the law and nearly did so his first year in office, approved the legal strategy.
Democratic politicians wasted little time criticizing the move, which could be risky for Republicans in the midterm elections.
‘‘Democrats will not allow Republicans to get away with quietly trying to strip away preexisting conditions protections for millions of Americans through a legal backdoor,’’ said Representative Frank Pallone, Democrat of New Jersey, a spokesman for his party on health care.
Senate Democratic Leader Chuck Schumer of New York urged Trump to reverse the decision. Several Republicans in Congress said they were not told in advance about the administration’s position.
Officials of the Departments of Health and Human Services and the Treasury had no comment.
Shortly before the government’s court filing, three career lawyers at the Justice Department withdrew from the case and were replaced by two political appointees, according to court filings.
Timothy Jost, law professor emeritus at Washington and Lee University in Virginia said the Trump administration is trying to persuade the court to do what it was unable to achieve in Congress last year — essentially, repeal key parts of the Obama health law.
Jost said it’s telling that three career Justice Department lawyers refused to support the new policy. ‘‘It’s just one more part of the story of trying to politicize the Justice Department,’’ said Jost, a supporter of the health law.
Despite the Justice Department position, the Health and Human Services Department has continued to apply the health law. The 2018 signup season resulted in only a slight enrollment drop-off from Obama’s last year.
The issues in the court case are unlikely to be resolved quickly, but some experts said the added uncertainty could prompt insurers to seek higher premiums in 2019 for health plans sold to individuals.
In a separate development Friday, Trump told reporters he is considering pardoning Muhammad Ali, the boxing champion who died two years ago and was convicted of refusing to be drafted during the Vietnam War. But it was not immediately clear what Trump sought to pardon, as Ali’s conviction was overturned nearly 50 years ago.
“I’m thinking about that very seriously,” Trump said of the possible pardon before he left Washington on Friday morning for the G-7 financial summit in Canada.
Ali had fought his conviction all the way to the Supreme Court, which in 1971 granted him the conscientious-objector status he had sought.
Ali’s attorney, Ron Tweel, said the pardon was not necessary. But he thanked Trump for the consideration.
The president recently pardoned another late boxer, Jack Johnson, who was convicted in 1913 of transporting a white woman across state lines.
Elizabeth Warren and a Scholarly Debate Over Medical Bankruptcy That Won’t Go Away
by Margot Sanger-Katz - NYT - June 8, 2018
Elizabeth Warren is still sparring with academics over a paper she published in 2005.
The latest round came on Wednesday, in The New England Journal of Medicine, where she and her co-authors critiqued a recent paper that argued that medical problems cause a much smaller share of personal bankruptcies than many people think.
One of the reasons many people think medical bills cause so many bankruptcies is Elizabeth Warren, now a United States senator and possible Democratic presidential candidate. In 2005, she, along with David Himmelstein, Deborah Thorne and Steffie Woolhandler, published a paper in the journal Health Affairs documenting a memorable statistic: More than 40 percent of all bankruptcies in America were a result of medical problems, they wrote. In 2009, they updated that research with an even more startling number: Medical bills were responsible for more than 62 percent of all American bankruptcies.
Dr. Woolhandler and Dr. Himmelstein are physicians, public health researchers at Hunter College and longtime advocates of a single-payer health care system. Ms. Thorne is a sociologist, now at the University of Idaho, who studies bankruptcy. Ms. Warren was a Harvard law professor longing to bring data to questions that her colleagues often answered with theory.
Their research was important, both among researchers and policymakers. The authors, in their discussion of their findings, emphasized the financial toll that comes with being uninsured or without comprehensive health coverage. Their work was often mentioned by politicians interested in expanding health insurance coverage in the country — particularly Barack Obama, who talked about it on the campaign trail and again when stumping for the Affordable Care Act.
It helped propel Ms. Warren’s own political career. She ran for Senate largely on the themes she had explored in her scholarship, about the ways that public policy had made it hard for middle-class Americans to get ahead. She also connected the work to her personal experience, noting that her father’s heart attack had caused a financial shock in her family.
The research also mattered to scholars, who realized there were underexplored questions on the effects of medical bills and health shocks on many Americans’ finances.
“I started becoming interested in medical bankruptcy partly after reading this paper,” said Neale Mahoney, a health economist at the University of Chicago Booth School of Business, whose research has focused on questions of medical debt.
But from the beginning many economists questioned the paper’s approach, which relied on surveys of nearly 1,800 Americans who had declared bankruptcy in 2001 and interviews with about half of them on their views about the causes of their financial woes after the fact. The researchers counted a bankruptcy as due to injury or illness if a person had a medical debt of more than $1,000; said illness or injury caused a bankruptcy; missed more than two weeks of work because of illness; or mortgaged a home to pay medical bills.
Mr. Mahoney, for example, said the team “wrote the paper in a way that was deliberately provocative, and they got out ahead of their skis.”
Craig Garthwaite, a health economist at the Kellogg School of Management at Northwestern, who also studies medical debt, offered a more negative assessment: “There are no reputable economists who I deal with who believe the number in the paper or the methods in the paper are appropriate in trying to get at the true underlying question.”
Writing in Health Affairs in 2006, David Dranove and Michael Millenson, then both on the faculty at Kellogg, analyzed the underlying survey figures differently and concluded that medical problems were probably responsible for less than 20 percentof all American bankruptcies. Ms. Warren and her co-authors pushed back in a letterand defended their interpretation — noting that the authors had received financial support from the insurance industry.
Mr. Dranove said he was taken aback by the aggressiveness of their response, which he described as “disparaging our motives,” rather than engaging in a scholarly discussion about the best way to arrive at the right answer. (In an email this week, Dr. Himmelstein again noted Mr. Dranove’s industry funding.)
Last March, a team of economists from M.I.T., Northwestern University and the University of California, Santa Cruz, published another paper, making use of a California database of every hospitalization in the state. By examining the credit reports of all the hospitalized people to see who filed for bankruptcy afterward, the researchers concluded that medical shocks related to hospitalization could explain 4 percent of all bankruptcies.
Their paper was published in The New England Journal of Medicine under a bold title: “Myth and Measurement: The Case of Medical Bankruptcies.” The authors argued that their paper was the first to definitively demonstrate that medical shocks did cause some people to go bankrupt. It found that missed work caused by illness was often a bigger contributor to financial difficulties than medical bills themselves.
There is, of course, a huge difference between 4 percent and 62 percent.
Amy Finkelstein, a professor at M.I.T. and one of the authors, said the Warren paper’s approach is akin to trying to find out how to be successful in business by interviewing big technology entrepreneurs about how they got their start. Such a study, she said, might lead to the conclusion that you need to drop out of college to succeed, even though most college dropouts do not become billionaires.
“The original paper was extremely problematic precisely because it limited its analysis to the set of people who went bankrupt, and said how common really large medical bills are in that sample of people,” she said. “It says nothing about how common really large medical bills are in the nonbankrupt population.”
Another possible problem with using surveys of bankrupt people is that they might choose to emphasize sources of debt that make them seem sympathetic, while playing down others.
Several outside experts said the new research was revealing because it avoided those problems, coming closer to isolating the degree to which medical problems caused bankruptcies.
The new paper also echoed one of the less publicized messages from the original Warren research: It’s not just medical bills but also lost work due to illness that can disrupt people’s finances. The Affordable Care Act has substantially broadened access to comprehensive health insurance. But there are few policies that protect people when their careers are disrupted by a health problem.
The newer research also has some limitations, and its authors acknowledge it probably undercounts the rate of medical bankruptcies somewhat. It focuses only on people who went to the hospital, which means it could miss those who became bankrupt because of high bills for doctors’ visits, expensive drugs or work missed because of related disability without ever experiencing a hospitalization. It also does not take into account bankruptcies that might have occurred because of a relative’s illness.
David Cutler, a health economist at Harvard, noted that many people with serious mental illnesses or musculoskeletal injuries might accumulate medical bills and lose income without ever being admitted to a hospital. “If you look at the reasons why people are really sick today, they don’t have a lot to do with hospitalizations,” he said.
Ms. Warren and her co-authors, in their letter, also emphasize the possible undercounting of medical bills outside the hospital setting.
Still, their new letter ends with a sharp line: “Characterizing debtors’ self-reports as ‘myth’ is demeaning to people struggling with health care costs, and artificially narrowing the definition of medical bankruptcy does not improve understanding of its causes.” In an email, Dr. Himmelstein said the “Myth and Measurement” article “both misrepresented our research, and presented a highly slanted statistical analysis.”
When asked about the letter, Ms. Warren issued a milder statement. The March study “significantly adds to our understanding of the links between illness and financial hardship,” she wrote, adding, “I’m glad to be part of both the ongoing discussion and the work to find meaningful solutions.”
Ray Kluender, a co-author of the “Myth and Measurement” article, said that he was disappointed by the new letter but that he was delighted to see a United States senator engaging on research that could influence public policy.
“As long as she does not view us antagonistically, which I hope she doesn’t, I’m personally very excited about it,” he said. “This is why I decided to pursue economics as a career. I’m excited to have her attention.”
Investor ratings agencies give MaineHealth top grades
by Carol Couras - Portland Press Herald - June 8, 2018
Two investor rating agencies have given MaineHealth strong marks for its financial stability, even after accounting for $300 million in borrowing to finance a hospital expansion.
The ratings from Moody’s and Standard & Poor’s puts the Portland-based network at No. 3 in New England for financial soundness, after the parent companies of first-place Massachusetts General and second place Yale-New Haven hospitals, according to a statement from MaineHealth.
“This is big news for us,” said John Porter, MaineHealth communications director. “Of course it will help keep the cost of the expansion in control because a good rating equals a good interest rate, but it also puts us in a good position to provide health care in places where it’s hard to provide health care, namely rural communities.”
Moody’s Investors Service assigned a rating of A1 to the first component of approximately $300 million in bonds to be issued by MaineHealth for its $512 million expansion project at Maine Medical Center. Rating agency Standard & Poor’s said this week it would maintain its rating of A+ with a stable outlook for the health care system as the initial bonds are issued.
At a time when many rural health care organizations have struggled, MaineHealth has consistently exceeded its financial goals, largely on the strength of Maine Medical Center, said Bill Caron, CEO and president, in the statement. However, Caron also credited member organizations across the system, noting the rating agencies looked favorably on the work being done at the system’s smaller hospitals under challenging circumstances.
MaineHealth includes Maine Med and 11 other medical centers in Maine and four other health care affiliates.
Porter said the ratings agencies looked at three primary factors in determining their ratings. First, the system’s financial performance, which has historically been strong, has been buoyed by moving some procedures to tertiary care centers where new technologies and high patient volume are cost effective. Secondly, the network has made progress in rural markets where it has shored up its finances, said Porter. And third, the ratings agencies saw the management benefit of coming under the direction of one board.
Last November, all members of MaineHealth voted in favor of unifying into one board to oversee what is the state’s largest health care network. Maine Medical Center, Franklin Community Health, Pen Bay Medical Center, Southern Maine Healthcare and several other community hospitals and health care systems had been working on unifying the system for more than a year.
When complete, one board of trustees will ultimately make decisions instead of 10 separate, independent boards.
Maine Med started its $512 million expansion in May, and expects work to continue for five years. Plans call for a new, 270,000-square-foot building along Congress Street, which would become the hospital’s main entrance, 19 new operating rooms and 128 new single-occupancy patient rooms.
In all, the project would increase the hospital’s footprint by about 25 percent.
CAVITY COUNTRY
Rural America has too few dentists — and too few patients who can pay
by Anne Kim - The Washington Post - June 7, 2018
Lynnel Beauchesne’s dental office hugs a rural crossroads near Tunnelton, W.Va., population 336. Acres of empty farmland surround the weathered one-story white building; a couple of houses and a few barns are the only neighbors. But the parking lot is full. Some people have driven hours to see Beauchesne, the sole dentist within 30 miles. She estimates that she has as many as 8,000 patients. Before the office closes at 7 p.m., she and her two hygienists will see up to 50 of them, not counting emergencies.
About 43 percent of rural Americans lack access to dental care, according to the National Rural Health Association, and West Virginia, among the poorest and most rural states, is at the center of the crisis. All but six of the state’s 55 counties include federally designated “Health Professional Shortage Areas,” “Medically Underserved Areas” or both. The state’s Oral Health Program found in 2014 and 2015 that nearly half of counties had fewer than six practicing dentists, just half of adult West Virginians had visited a dentist in the previous year, and more than one-fifth hadn’t seen a dentist in five years. By comparison, a U.S. Centers for Disease Control and Prevention study in 2015 found that 64 percent of all American adults ages 18 to 64 reported seeing a dentist in the previous year. The rate of total tooth loss is 33.8 percent among West Virginians over 65, compared with roughly 19 percent for all seniors nationally.
One seemingly obvious solution is to persuade more dentists and other oral-health providers to come to places like West Virginia, a goal of various public efforts. The federal National Health Service Corps program, for example, offers up to $50,000 in loan assistance to doctors and dentists willing to work two years in a designated shortage area. And several states have passed or considered legislation authorizing “dental therapists” — midlevel providers akin to nurse practitioners — to provide certain kinds of primary dental care in areas where dentists are scarce.
But while it is true that West Virginia has a dentist shortage, adding more providers will not solve the problem of rural oral health. People don’t go to the dentist if they can’t afford to, no matter how many dentists there are. “Affordability is the big thing,” said Richard Meckstroth, chair of the department of dental practice and rural health at West Virginia University.
And affordability cuts both ways. Recruiting more providers into shortage areas can compound the problem, said Meckstroth, putting local dentists into tougher financial straits by increasing competition for a relatively small pool of paying patients. The dentists who arrive under loan forgiveness programs also tend to leave after their two-year obligation is up, what Meckstroth calls a “revolving door” that deprives patients of continuity of care.
As busy as Beauchesne’s Preston County practice is, it brings in only enough to stay afloat. A scant 53 percent of the county’s population is in the labor force, and the poverty rate is 17 percent. Dental care is a relative luxury, so Beauchesne (bo-SHANE) keeps prices barely above costs. The office charges $90 for a cleaning, an exam and bitewing X-rays — about half the national average fee and a third of what many big-city dentists would charge for the same services. “I try to keep my prices in the realm of what people can afford and so they will want to come,” she said. “I don’t want people to come just for extractions. I want them to come for cleanings and to keep the teeth they have.”
Beauchesne’s patients struggle to afford her all the same. According to the state’s Bureau for Public Health, only 40 percent of adults in West Virginia have access to dental benefits of any kind, compared with about 65 percent of working-age adults nationwide.While the state’s Medicaid program covers preventive care for children, adults get no coverage except for extractions or treatment for infections. Medicare offers no dental benefits, either. As a result, according to the West Virginia Oral Health Coalition, 43 percent of West Virginians ages 55 to 64 have lost six or more teeth because of disease or decay; 61 percent of residents older than 65 without a high school diploma have lost all their teeth.
Poor oral health has an impact beyond mere toothache. A landmark 2000 report by the U.S. Surgeon General found that oral health is intimately linked to people’s overall physical health and is often associated with serious systemic conditions such as diabetes and heart disease, as well as the likelihood of complications in pregnancy. Nevertheless, some 74 million Americans had no dental coverage in 2016, according to the National Association of Dental Plans, putting the dentally uninsured rate at nearly four times the rate for the medically uninsured. According to a 2014 report from the American Dental Association’s Health Policy Institute, nearly 20 percent of adults ages 21 to 64 said they’d foregone needed dental care in the past 12 months, with the most common reason being “could not afford the cost.”
Patients’ inability to afford care is one reason younger dentists — many facing up to $250,000 in school debt — are reluctant to settle in rural areas and why dentists like Beauchesne find themselves working hard to keep their doors open. Chip Perrine has owned a practice in Cowen, W.Va., for 30 years. He and his daughter, Valerie, say they are the only privately practicing dentists in Webster County, which has about 8,300 residents, but they often have openings in their schedule. “I keep hearing we’re underserved, but I don’t feel I’m underserved — I feel underutilized,” he said. His son joined the practice after graduating from dental school but eventually left to start a practice elsewhere because he couldn’t afford to stay.
“We are open to any insurance, including Medicaid and CHIP,” the Children’s Health Insurance Program, said Valerie Perrine. “It’s not an issue that someone can’t get an appointment.”
The Perrines charge a little more than Beauchesne — $158 for cleaning, bitewing X-ray and exam — but Chip Perrine estimates that he gives away about $400,000 a year in free care, including write-offs from low Medicaid reimbursement rates. It’s tough for the practice to swallow because expenses are also rising. “On average, my dental supplies go up 12 to 15 percent a year, but I can’t raise prices,” said Chip Perrine. “It’s useless. I can charge what I want, but it won’t get paid.”
Beauchesne often resorts to creative strategies to help her patients afford care. For instance, the practice offers a 15 percent discount for those who pay cash and a 20 percent discount for patients over 80. “I figure if they made it that far, they’re on a really tight income,” she says.
She’ll also barter for services. “If I needed a cow or a [side of] beef or a hog, whatever the normal cost would be, they can get a filling or a crown,” she said. Still, Beauchesne’s office manager and assistant, Alice Deakins, estimates that between 10 and 15 percent of the care the practice provides is given free.
Beauchesne, who is in her late 40s, said she still owes about $35,000 in school debt. Her office is no-frills, and she spends her days off mowing the lawn, painting the walls and carrying out repairs. Her panoramic X-ray machine dates from 1990 — she bought it used for $6,000 — and she recently won a $26,000 grant from the state of West Virginia to buy some computers for her office and replace one of her chairs. But she can’t afford to digitize. “That would cost me $100,000, and I can’t afford to take more loans out,” she said.
The lack of affordability and access to dental coverage in West Virginia is of course tied to the state’s overall economic precariousness. Bruce Cassis, a dentist who practices in Fayetteville, said access to high-quality dental insurance in his area has declined along with the fortunes of coal. “Less than 5 percent of my patients are affiliated with the coal industry,” Cassis said. “Thirty years ago, they used to be 60 percent of my patient base.” Today, the major employer in his region is the county school board. “They have the best insurance in the area.”
The same is true for the Perrines and Beauchesne, whose best-insured patients typically have government jobs, such as with the school district or the fire department.
When it comes to oral health, said Beauchesne, the loss of jobs is perhaps felt most acutely by the area’s elderly, who may have once had private dental insurance but now have no coverage because they are on Medicare. “These are the ones that took care of their teeth while working and are now on a fixed income,” she said. “It is sad to see the deterioration.”
Providing dental benefits under Medicare — at least for preventive services such as an annual cleaning — would both benefit seniors and help dentists in rural areas survive. Also helpful to patients and providers would be expanding Medicaid coverage of preventive care to adults instead of ending it at age 21. Covering preventive care would also reduce the amount spent on emergency room dental visits, which the American Dental Association estimates cost the U.S. health system $1.6 billion in 2012.
Still, the dental-care crisis in rural America is closely linked to the broader economic challenges in the parts of the country that have not yet caught up in this recovery. “How you improve access in rural America,” says Meckstroth, “is to get people jobs.”
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