Health Care Reform Articles - March 31, 2021

 

Bernie Sanders wants to remind you the pharmaceutical industry is still ripping Americans off

by Helaine Olen - Washington Post - March 24, 2021

The pharmaceutical industry is enjoying a moment. It has gone in mere months from being one of the most despised industries in the United States to a reputational high, a regular recipient of celebratory headlines for the rapid development of vaccines that will end the covid-19 pandemic.

But Sen. Bernie Sanders (I-Vt.) would like you to know the American pharmaceutical industry is still ripping people off — and he plans to do something about that. This week, Sanders introduced a trio of bills designed to help the United States get a grip on the price we pay for prescription drugs. (Rep. Ro Khanna (D-Calif.) is the lead sponsor in the House.) These bills would, if enacted, put an end to the gouging of the American public by permitting Medicare to negotiate drug prices, by pegging the price of pharmaceuticals to the median price in five comparable countries — Britain, Canada, France, Germany and Japan — and by allowing Americans to import drugs legally from Canada and other major countries.

These changes can’t come a moment too soon. It’s not simply that the high cost of drugs is roiling our politics, sending voters scurrying from party to party in a frantic attempt at a solution. It’s that our personal pharmaceutical bills are increasingly unaffordable.

Americans spend significantly more than citizens of other countries in the Organization for Economic Cooperation and Development on both over-the-counter and prescription medications. The examples are legion. Name-brand insulins — which many people with diabetes say work much better than older, less expensive generics — cost significantly less in Canada than in the United States, where prices have soared by more than 300 percent over the past two decades. People in both Canada and Britain pay a fraction of the cost for Epi-Pens as we do here.

There is a reason for this: No other first-world country besides the United States allows Big Pharma to charge whatever it likes for its products, because drugs are considered a social good and are expected to be affordable. Because we don’t, the Rand Corp. reports that drug prices in the United States are a walloping 256 percent more than other countries. As Sanders noted Tuesday, Big Pharma “has managed to create a situation where they can raise their prices to any level they want any day of the week.”

Without government action, people look to do-it-yourself solutions such as skipping doses or going without altogether to save money. As Elia Spates, who has Type 1 diabetes, testified to the Senate subcommittee on Health, Education, Labor and Pensions on Tuesday, “When you pay over $800 per month for an individual in insurance premiums and pay an additional $2,000 per month till your deductible is met, your family starts to feel a financial pinch. The only way you see to cut back on the spending is to cut back on the insulin.”

This practice comes with a death count. Before the pandemic shutdowns, there were regular protests by parents whose adult children died after finding their insulin unaffordable. Cancer patients are more than twice as likely to file for bankruptcy protection than those in the general population and, if they do, they appear to be more likely to die of the disease.

There is a moment of opportunity here to change things. According to Politico, Big Pharma is — for once — running scared, thoroughly expecting something to turn up in major Democratic legislation this year that will finally crack down on its epic run of greed. If it happens, what will have brought it about? It’s not a sudden explosion of political empathy by those who for years stopped proposals like those made by Sanders in their tracks.

Instead, it’s that even the government’s pharmaceutical costs are so out of control that any attempt to bring them in line will help make the financial numbers of a future Biden spending package look better.

Many in Congress remain hesitant to embrace an all-encompassing solution, seeming to favor deals to help those on Medicare with co-pays. Perhaps they are gun-shy, unwilling to fully tackle the power of Big Pharma, which spends millions on lobbying every year. Perhaps they really believe, as is often claimed, that allowing the government to negotiate prices will stifle innovation. (If so, they are almost certainly wrong. The industry giants spend more on marketing and promoting their products than they do on researching new ones.) But, as Sanders points out, the time is long past for half-measures. The high costs of drugs are affecting everyone. The simplest, fairest and certainly most effective solution would be for the federal government to step in and take charge.

https://www.washingtonpost.com/opinions/2021/03/24/bernie-sanders-wants-remind-you-pharmaceutical-industry-is-still-ripping-americans-off/ 

 

 

Health Care Reform Articles - April 2, 2021

 Editor's Note - The following article is just one example of the many problems created by our for-profit, corporate and competive approach to health care in the US. It documents a struggle - about money and who gets to keep the most of it - between two corporate giants. It's hard to distinguish which of the corporate Goliaths described in the article is the winner.  

But it's sure easy to identify the losers.

-SPC

Doctors Accuse UnitedHealthcare of Stifling Competition

A multistate group of anesthesiologists filed cases in Texas and Colorado, accusing the insurance giant of squeezing them like a “boa constrictor.”

by Reed Abelson - NYT - April 1, 2021

UnitedHealthcare, one of the nation’s largest health insurers, is being sued in two states by a large group of anesthesiologists who are accusing the company of stifling competition by forcing the doctors out of its network and by using its enormous clout to pressure hospitals and surgeons to stop referring patients to them.

The lawsuits, filed Wednesday in Colorado and Texas, were brought by U.S. Anesthesia Partners, a sizable physician-owned practice backed by private-equity investors. The practice claims in the Texas lawsuit that United engaged in “unlawful tactics and pressure campaigns,” including “bribing” surgeons with contracts that paid them much more if they steered patients away from the group’s anesthesiologists.

The doctors make similar claims in the lawsuit they filed in Colorado, where they say United orchestrated a “group boycott.” They describe United as “like a boa constrictor,” squeezing the group “from all angles.”

In an emailed statement, United said the lawsuits were “just the latest example of the group’s efforts to pressure us into agreeing to its rate demands and to distract from the real reason that it no longer participates in our network.” The company said it had not yet been served with either complaint.

United added that many of the private-equity-backed physician groups “expect to be paid double or even triple the median rate we pay other physicians providing the same services,” driving up the cost of care. The company says these groups have been using their increasing presence in a given regional market to demand higher rates. It says that its goal has been to keep the groups in network but that it is rethinking its approach.

While insurers and the hospitals and doctors have long had ugly standoffs during contract negotiations, the parties typically come to a last-minute agreement. But United has become increasingly aggressive in its stance toward large physician groups like U.S. Anesthesia, dropping a number of them from its network, according to analysts.

“United has a lot of market power and they want to use it to their advantage,” said Dean Ungar, who follows the insurance behemoth for Moody’s Investors Service, which evaluates the company’s debt. “They are willing to play hardball with some of these companies.”

U.S. Anesthesia, which operates in nine states, said it had a long relationship with United and was part of the carrier’s networks in Texas and Colorado until last year.

But the doctors also raise questions about the insurer’s potential conflicts of interest as its parent company, UnitedHealth Group, also offers medical services. UnitedHealth, which had $257 billion in sales last year, has become a sprawling conglomerate that includes more than 50,000 physicians, a chain of surgery centers, a pharmacy benefit manager and other assorted health care businesses in addition to its traditional insurance business.

UnitedHealth directly competes with U.S. Anesthesia, according to the Texas lawsuit, through an ownership interest in Sound Physicians, a large medical practice that provides emergency and anesthesiology services. Sound Physicians is looking to expand in markets like Fort Worth and Houston, and U.S. Anesthesia claims in the lawsuit that its doctors were contacted by Sound Physicians “to induce them to leave” and challenge the noncompete provisions in their contracts to work with the United group.

The major insurer throws its weight around in other ways, the lawsuit claims. While the company’s Optum unit, which operates the surgery centers and clinics, is technically separate from the health insurer, the doctors accuse United of forcing its OptumCare facilities to sever their relationships with the anesthesiology group and pushing in-network surgeons to move their operations to hospitals or facilities that do not have contracts with U.S. Anesthesia.

“United and its affiliates have extended their tentacles into virtually every aspect of health care, allowing United to squeeze, choke and crush any market participant that stands in the way of United’s increased profits,” the doctors claim in their lawsuit.

It is standard practice, United said, for an insurer to encourage the use of hospitals and doctors within its network.

In contrast to many smaller physician groups that are struggling because of the pandemic, United has maintained a strong financial position, shoring up profits while elective surgeries and other procedures were shut down, resulting in fewer medical claims. So it has continued to expand, hiring more doctors and buying up additional practices. The company says it plans to add more than 10,000 employed or affiliated doctors this year.

The relationship between insurers and providers has become more complicated as more insurance carriers own doctors’ groups or clinics. “They want to be the referee and play on the other team,” said Michael Turpin, a former United executive who is now an executive vice president at USI, an insurance brokerage.

Employers that rely on UnitedHealthcare to cover their workers have a difficult time judging who benefits when insurers fail to reach an agreement to keep a provider in network. “This is just as much about profit as it is about principle,” Mr. Turpin said.

United has defended its actions in the past by pointing to the role many of these doctors’ groups, financed by private equity, played in creating surprise medical bills that overwhelmed and burdened Americans around the country. Because the groups’ doctors specialize in areas like emergency care or anesthesia, patients are often shocked to find out that they are not in network even if the hospital where they received care is.

Some of the doctors’ groups, like Envision Healthcare, whose doctors provide emergency-room care, pursued a strategy of keeping their doctors out of network to make more money. Patients were caught in the middle as insurers and doctors fought over out-of-network bills, and many people ended up owing large sums not covered by their health plans.

When criticism of these tactics pressured Congress to consider remedies, the private-equity firms backing groups like Envision and TeamHealth spent large sums trying to block federal legislation. Lawmakers finally took action at the end of last year to protect patients from surprise bills by requiring parties to reach a fair price.

But doctors say United is increasingly unwilling to come to an agreement they can accept. Envision, which eventually agreed to lower its payments and be included in the health plan’s network, said United dropped it this year because it would not agree to “drastic cuts to clinician pay.”

“United turned down multiple proposals that would reduce the total cost of care for patients,” Envision said in an emailed statement. “We are left to wonder why it appears United does not want our 25,000 clinicians in their network.”

The insurer has also dropped other groups. Last year, Mednax, which employed specialists in neonatology and anesthesiology, announced it had been dropped by United in four states. The company has since sold both its radiology and anesthesiology practices.

https://www.nytimes.com/2021/04/01/health/unitedhealthcare-lawsuit.html?

Democrats Gave Americans a Big Boost Buying Health Insurance. It Didn’t Come Cheap.

by Noam Levey - Kaiser Health News - March 24, 2021

When Democrats pushed through a two-year expansion of the Affordable Care Act in the covid-relief bill this month, many people celebrated the part that will make health insurance more affordable for more Americans.

But health care researchers consider this move a short-term fix for a long-term crisis, one that avoids confronting an uncomfortable truth: The only clear path to expanding health insurance remains yet more government subsidies for commercial health plans, which are the most costly form of coverage.

The reliance on private plans — a hard-fought compromise in the 2010 health law that was designed to win over industry — already costs taxpayers tens of billions of dollars each year, as the federal government picks up a share of the insurance premiums for about 9 million Americans.

The ACA’s price tag will now rise higher because of the recently enacted $1.9 trillion covid relief bill. The legislation will direct some $20 billion more to insurance companies by making larger premium subsidies available to consumers who buy qualified plans.

And if Democrats want to continue the aid beyond 2022, when the relief bill’s added assistance runs out, the tab is sure to balloon further.

“The expansion of coverage is the path of least resistance,” said Paul Starr, a Princeton University sociologist and leading authority on the history of U.S. health care who has termed this dynamic a “health policy trap.”

“Insurers don’t have much to lose. Hospitals don’t have much to lose. Pharmaceutical companies don’t have much to lose,” Starr observed. “But the result is you end up adding on to an incredibly expensive system.”

By next year, taxpayers will shell out more than $8,500 for every American who gets a subsidized health plan through insurance marketplaces created by the ACA, often called Obamacare. That’s up an estimated 40% from the cost of the marketplace subsidies in 2020, due to the augmented aid, data from the nonpartisan Congressional Budget Office indicates.

Supporters of the aid package, known as the American Rescue Plan, argue the federal government had to move quickly to help people struggling during the pandemic.

“This is exactly why we pay taxes. We want the federal government to be there when we need it most,” said Mila Kofman, who runs the District of Columbia’s insurance marketplace. Kofman said the middle of a pandemic was not a time to “wait for the perfect solution.”

But the large new government commitment underscores the disparity between the high price of private health insurance and lower-cost government plans such as Medicare and Medicaid.

Acutely aware of this disparity, the crafters of the ACA laid out a second path to provide health insurance for uninsured Americans beside the marketplaces: Medicaid.

The half-century-old government safety net insures about 13 million low-income, working-age adults who gained eligibility for the program through the health law and make too little to qualify for subsidized commercial insurance.

Medicaid coverage is still costly: about $7,000 per person every year, federal data indicates.

But that’s about 18% less than what the government will pay to cover people through commercial health plans.

“We knew it would be less expensive than subsidizing people to go to private plans,” said former Rep. Henry Waxman, a California Democrat who as chairman of the House Energy and Commerce Committee helped write the Affordable Care Act and has long championed Medicaid.

For patients, Medicaid offered another advantage. Unlike most commercial health insurance, which requires enrollees to pay large deductibles before their coverage kicks in, Medicaid sharply limits how much people must pay for a doctor’s visit or a trip to the hospital.

That can have a huge impact on a patient’s finances.

Take, for example, a 50-year-old woman living outside Phoenix with a part-time job paying $1,000 a month. With an income that low, the woman could enroll in Arizona’s Medicaid program.

If, one day, she slipped on her steps and broke an arm, her medical bills would likely be fully covered, leaving her with no out-of-pocket expenses.

If the same woman were to find a full-time job that pays $4,000 a month but doesn’t offer health benefits, she would still be able to get coverage, this time through a commercial health plan on Arizona’s insurance marketplace.

Taxpayers would still pick up a portion of the cost of her health plan, in this case about $300 a month, or half the $606 monthly premium for a basic silver-level plan from health insurer Oscar, according to a subsidy calculator from KFF, a health policy nonprofit. The woman would have to pay the rest of the monthly premium.

Unlike Medicaid, however, her Oscar “Silver Saver” plan comes with a $6,200 deductible.

That means that the same broken arm from her fall would likely leave her with medical bills topping $4,700, according to cost estimates from the federal healthcare.gov marketplace.

The main reason commercial health plans cost more and saddle patients with higher medical bills is because they typically pay hospitals, doctors and other medical providers more than public programs such as Medicaid.

Often the price differences are dramatic.

For example, health insurers in the Atlanta area pay primary care physicians $93 on average for a basic patient visit, according to an analysis of 2017 commercial insurance data by the Health Care Cost Institute, a research nonprofit.

By contrast, Georgia’s Medicaid program would pay the same physician seeing a patient covered by the government health plan just $41, according to the state’s fee schedule.

“It’s much cheaper to deliver health coverage to people through public programs like Medicaid than through private insurance because the prices paid to doctors, hospitals and drug companies are so much less,” said Larry Levitt, executive vice president for health policy at KFF.

The price disparity also explains why the health care industry, including insurers and providers, for years has fought proposals to create a new government plan, or “public option,” that might pay less.

Industry officials frequently argue that hospitals and physicians couldn’t stay in business unless they charge higher prices to commercial insurers to offset the low prices paid by government programs.

The Biden administration and congressional Democrats for now skirted a battle over this issue by simply upping subsidies for private health insurers.

 https://khn.org/news/article/covid-relief-law-health-insurance-boost-aca-cost-analysis/ 

 

 

The Potter Report   10 years after the ACA, mistakes loom large March 25, 2021

10 years ago today, on the first anniversary of the Affordable Care Act (ACA), I wrote about the good things the law did, but stressed that we needed to view it as only the starting point of a journey toward needed reform. Unfortunately, we have not made much progress on that journey.   Although 20 million now have health insurance as a result of the law, a huge growing percent can’t use that insurance to get the care they need. That’s because Congress and the Obama administration were too focused on premiums ... exactly what the insurance industry wanted them to focus on!   Focusing on premiums meant that Democrats gave scant attention to how insurers would pick Americans’ pockets by jacking up deductibles year after year. In fact, deductibles are patients’ biggest struggle now, more than having enough doctors in-network, or even the price of premiums.   Zeke Emanuel, who advised Obama on health policy, recently told The New York Times that not addressing deductibles was “a huge mistake.” While Congress just passed a $1.9 trillion Covid-19 relief bill, Emanuel said they were under pressure in 2010 to keep the price of ACA under $1 trillion.   People in high-deductible plans don't go to the doctor when they should, or pick up their prescriptions because of the thousands they pay out of pocket before insurance kicks in. Meanwhile, insurance companies posted record profits every year since the ACA was passed, even during COVID!   As growing numbers of Americans skip needed care, those insurers are paying their top executives, like David Cordani, the CEO of Cigna, where I used to work, astronomical salaries. The company noted in a filing last week Cordani’s pay totaled $79 million.   Cigna executives were saying back when I was there that Americans needed to “put more skin in the game.” Obama and Congress bought that line. It’s way past time that Cigna put skin in the game. And, it’s time that our government gives people relief so they can actually use their insurance, for once.   The Kaiser Family Foundation says that the year before the ACA was passed, most people on average were able to meet their deductibles by March 18. That was what Kaiser refers to as Deductible Relief Day. Last year Deductible Relief Day didn’t arrive until May 19. The bottom line --- this is a broken system. The ACA did a bunch of good things. But our work to fix this mess is not close to over. Not by a long shot.   Private equity piles on debt to pull cash from health firms  By Sabrina Willmer - Bloomberg - March 24, 2021 Healthcare companies are taking on more debt to pay dividends to their private equity owners, just a year after the start of a pandemic that plunged the industry into crisis. At least five U.S. healthcare firms have borrowed heavily in part to fund hundreds of millions of dollars of such payouts in the first quarter, according to a report to be released Wednesday by the nonprofit Private Equity Stakeholder Project. The practice, known as dividend recapitalization, is gaining steam as investors hunt for yield with interest rates near historic lows. Meanwhile, healthcare companies are on a stronger footing, with patient visits rebounding and the government unleashing economic stimulus. Healthcare firms have already borrowed about $3.7 billion in 2021, partly to fund payments to private equity owners, more than double the amount issued all of last year, according to data from S&P Global Market Intelligence. At the current pace, it would be the industry’s most active year for borrowing since 2015. “Investor demand for leveraged loans is outpacing supply so far this year, sending prices in the secondary market soaring,” said Marina Lukatsky, a senior director at S&P. Dividend recapitalization is one reason wealthy investors are drawn to private equity, as they don’t have to wait years for a payout. Private equity’s main lobbying group, the American Investment Council, defended the practice, arguing that the loans are made to financially sound companies and help retirees because public pension plans are among the clients of private equity funds. Dividend recapitalizations accounted for just 6% of the total market for leveraged loans last year, the trade group said, citing S&P data. But critics including the Private Equity Stakeholder Project say the strategy destroys value. “By saddling companies with debt to extract cash for themselves, private equity firms put those companies at risk for restructuring, bankruptcy, or cost cutting to make up the interest payments and pay off that debt,” said Eileen O’Grady, a coordinator at the nonprofit. The report singled out two private equity-owned healthcare firms: DuPage Medical Group, a network of more than 750 doctors in the Chicago area, and the Mentor Network, which treats children and adults with intellectual disabilities. DuPage, which received about $80 million in grants and loans from taxpayers in 2020, distributed $209 million this year to owners including Ares Management, using leftover cash from the sale of some office buildings and additional debt, according to Moody’s Investors Service. The distribution is “a credit negative as it points to the aggressive nature of DuPage’s financial policies,” Moody’s analysts wrote in a report. “Combined with higher gross financial leverage, this will leave DuPage more weakly positioned to absorb any unexpected operating setback or incremental debt.” The company plans to repay the government loans and used the grants solely to make up for lost revenue and costs from the pandemic, DuPage spokeswoman Maria McGowan said. “Our recent refinancing enabled us to further strengthen our balance sheet, reduce our interest expense and take advantage of positive market conditions,” she said. The Mentor Network, meanwhile, took on more debt and distributed $375 million to its owners — the second dividend since it was acquired two years ago by Centerbridge Partners and Vistria Group. While Moody’s warned of high debt, it said the company had ample cash to meet its obligations. In December, the Senate Finance Committee reported the findings of investigations into two Mentor Network affiliates, alleging poor patient care and a failure to report incidents of abuse and neglect. A spokesperson for the company declined to comment.  https://www.latimes.com/business/story/2021-03-24/private-equity-piles-on-debt-to-pull-cash-from-health-firms Taxpayers Fund Research and Drug Companies Make a Fortune The pharmaceutical industry doesn’t want things to change, but Americans can have both lower prices and innovation. By David E. Mitchell - NYT - March 24, 2021 The director of the Centers for Disease Control and Prevention is worried about how Americans will pay for vaccines in the future. As well she should be. “I worry about the day where the vaccine will no longer be free,” the director, Dr. Rochelle Walensky, said this month, referring to the fact that the government is providing coronavirus vaccinations to all Americans at no cost. “What about if we need a third booster?” Dr. Walensky asked. “What happens then? Who’s going to pay for that?” This question should concern every American and every policymaker in Washington. These vaccines, which are critical to ending the scourge of Covid-19, were developed with government funding and purchased for $10 to $19.50 per dose with taxpayer dollars. Now they are poised to jump in price — a lot, if you listen to the stated intentions of vaccine producers. Executives at Pfizer, Moderna and Johnson & Johnson, the three companies whose coronavirus vaccines have been approved for emergency use in the United States, have said they will maintain their current pricing models during the pandemic but expect to raise prices after it ends. Frank D’Amelio, Pfizer’s chief financial officer, recently said that in a postpandemic environment, “obviously, we’re going to get more on price,” noting that vaccine prices are normally $150 to $175 per dose. Many experts now predict that Covid-19 booster shots will become a regular part of our lives for years. An increase in the price of coronavirus vaccines would have considerable impact on American health care spending. If Pfizer raised the price of its coronavirus vaccine from $19.50 per dose to $175, a yearly shot for every American adult would cost $44.7 billion and could increase annual U.S. drug spending by 9 percent. Pfizer has claimed it did not rely on government money to develop its vaccine, but that’s not exactly true. Pfizer did not receive U.S. funding to develop its vaccine, as did Johnson & Johnson and Moderna, which received support from the National Institutes of Health. While Pfizer had already been investing in mRNA vaccines, it was most likely able to bring its coronavirus vaccine to market in record time in part because of recent and past government investment in mRNA research. (Pfizer’s German partner in its vaccine development, BioNTech, received a $445 million grant from its national government.) Over the past several decades, as private companies invested less in vaccines, the government, fearing a pandemic, took up the slack. Scientific advances in mRNA vaccine technology that were funded by the National Institutes of Health and the Defense Advanced Research Projects Agency enabled Pfizer and Moderna to start working on a coronavirus vaccine as soon as the virus’s genetic sequence was available. The United States government was prepared to spend whatever was necessary — $18 billion to date — to facilitate the development of vaccines that would end the spread of the coronavirus. The government was willing to assume the financial risks of vaccine development and to permit the companies to begin manufacturing doses before clinical trials were even completed. The story of coronavirus vaccines is the story of drug development in America writ large. Government funding contributed to research associated with all 210 new drugs approved by the U.S. Food and Drug Administration between 2010 and 2016, for example. The director of the National Institutes of Health, Francis Collins, said, “We at N.I.H. play a very major role in the early stages of almost every drug that gets developed and approved by the F.D.A.” Yet in the United States, the government often funds research and development and then hands off the ownership of vaccines and medicines to companies that can charge whatever price they think the market will bear. Drug companies often demand a premium price to compensate for early risk that was actually borne by taxpayers. I have an incurable cancer and am currently kept alive by four drugs with a combined price of more than $900,000 per year. Medicare pays for most of this, but one drug costs me $18,000 per year out of pocket. I know the importance of both innovation and affordability. And when patients like me suggest limiting the drug industry’s power to dictate prices, the companies threaten that innovation will cease, even though the foundation for most innovation in drug development is paid for by government, not private companies. Which brings us back to Dr. Walensky’s very legitimate concerns about how we will pay for coronavirus vaccines in the future. We can start by allowing Medicare to negotiate the prices it pays for medicines and vaccines, which the U.S. government is precluded from doing now. The U.S. can also protect Americans from price gouging by tying drug price increases to the rate of inflation. Americans should stop buying the pharmaceutical industry’s argument that innovation and new drug development will dry up if the government uses its purchasing power and bargains to get a better deal. The United States spends more per capita than any other wealthy nation for prescription drugs — often the same drugs available for far less overseas. And while taxpayer dollars play a key role in funding innovation, the pharmaceutical industry enjoys profits that are almost double the average of companies in the S&P 500. We can have lower prices as well as innovation. In the coming weeks Congress is expected to advance legislation that would allow Medicare to negotiate drug prices. President Biden has pledged his support. This year, we can achieve reforms that both advance innovation and ensure Americans can afford the medicines — and vaccines — we need. https://www.nytimes.com/2021/03/24/opinion/coronavirus-vaccine-cost-pfizer-moderna.html?referringSource=articleShare    The Nursing Home Vulnerabilities That Led to Disaster Experts say these five main factors caused the colossal failures during the pandemic by Emily Gurnon - Caregiving - March 26, 2021 Patricia Olthoff-Blank thought everything was going just fine at her mother's nursing home in rural Buffalo Center, Iowa. Virginia Olthoff had lived there for 15 years, and the administration communicated frequently with her family about her care. Then Olthoff-Blank got a 3 a.m. call from an emergency room nurse. She learned, to her horror, that her mother was severely dehydrated. An ER physician told her, "This did not just happen." He believed her mother had been without water for four or five days.  Several hours later, Virginia Olthoff was dead. Her daughter recounted the events in testimony before the Senate Finance Committee in March 2019, telling them a Department of Inspections and Appeals report revealed her mother had not been eating or drinking for almost two weeks and had not received IV fluids. She had been crying out in pain and had lost considerable weight.  The result? Employees don't stick around. Despite repeated pleas by certified nursing assistants to their superiors about her mother's condition, "nothing was done," Olthoff-Blank said.  The pandemic has exacerbated and raised awareness about the poor conditions in many nursing homes nationwide. But those conditions existed before COVID-19 hit the U.S., and they are likely to continue unless changes are made, experts say.  "There's an opportunity right now, because there are a lot of eyes on the nursing home sector," said David Grabowski, professor of health care policy at Harvard Medical School. "One of my big concerns is as things return to normal … [people will say] we can go back to business as usual. Business as usual wasn't working before the pandemic, and it certainly didn't work during the pandemic. We need to make some real changes here." What set nursing homes up to fail so dramatically during the pandemic? Experts point to five main factors. 1. Staffing Chronic staffing shortages in nursing homes stretch existing staff to breaking points. These jobs of frontline workers, like certified nursing assistants (CNAs), are often as difficult as retail and fast food and usually pay less (the average annual income for a CNA in a nursing home is $28,450). The result? Employees don't stick around. "We found turnover rates of over one hundred percent in a calendar year, meaning basically the entire staff turns over each year — and some nursing homes have turnover as high as three hundred percent," Grabowski said, referring to a study he and colleagues published March 2021 in Health Affairs.  "We don't pay those direct caregivers enough," he said. "They're largely women, many are persons of color and immigrants, and they're overlooked in a lot of ways in terms of where we direct resources in our health care system." Inadequate staffing has a direct impact on residents, who may not only get poor care but cannot develop relationships with workers when they are there one day and gone another, Grabowski said. "You talk to the residents and you ask them, 'What is it about this nursing home that you liked or didn't like?' and it's always about the staff," he said. Staffing at the professional nurse level is also vital, said Charlene Harrington, professor emerita of social behavioral sciences in the School of Nursing at the University of California, San Francisco. Harrington joined 21 other nursing experts in publishing a call to the Centers for Medicare and Medicaid Services (CMS) in March for a federal mandate for a stronger presence of registered nurses (RNs) in nursing homes. CMS staffing rules currently call for one RN on duty at a nursing home for eight consecutive hours each day. Harrington and her colleagues said that should be increased to a 24-hour, seven-day onsite RN presence. There are no federal ratios for staff of any level. "It's pure ageism that you can warehouse older people and not have to get adequate staff and pay them so that they're competent and have experience," Harrington said. Pamela Mickens, a long-term care ombudsman in Dallas, said she sees the impact of inadequate staffing on a daily basis. But a comment by a resident's family member crystallized the issue of staffing standards for her. The family member worked in the prison system and pointed out that there are staffing ratios for inmates, but not for people in nursing homes, Mickens recalls. "That was an epiphany for me," she said. 2. Funding Medicaid covers more than 60% of all nursing home residents, and Medicaid reimbursements cover 70% to 80% of nursing home operating costs, according to the American Health Care Association, an industry group. It points to that funding gap as the culprit in "shoestring budgets." "Medicaid is not a generous payer," Grabowski said. "The way most nursing homes have made things work is to take on these short-stay, post-acute patients who come from the hospital," since Medicare covers these patients for a limited time and at a much higher rate. That creates incentives to hospitalize long-term patients and bring them back, Grabowski said. "The margins on that side of the business are really quite high." Harrington, of UCSF, said her research shows the nursing home payment model is not the problem. "All the nursing homes say they don't have enough money, but in reality they [for-profit nursing homes] make excessive profits on the backs of their poorly paid staff," she said. 3. Corporate Structure Those profits, Harrington said, are hidden by the often byzantine corporate structure that undergirds for-profit nursing homes, which make up 70% of the total. There's a lack of acknowledgment that residents have rights. An article from Kaiser Health News revealed it has become increasingly common for nursing homes to outsource goods or services to companies they control or have a financial interest in. Some even rent their buildings back from a sister corporation. The result: the owners can siphon off profits that are not reflected in the nursing homes' books. A related benefit for nursing homes is that, if they are sued, the plaintiffs often have a hard time collecting, since the assets are not held with the licensee, Kaiser reported. "They set up these complex structures, and they're pulling out so much money from their related party organizations … there's no money left for staffing and services," Harrington said. She advocates for greater transparency and financial accountability in nursing homes. 4. Lack of Oversight and Enforcement Nursing homes agree to follow minimum standards of care when they participate in Medicaid and Medicare programs. Federal regulations require that they "provide the necessary care and services to attain or maintain the highest practicable physical, mental and psychosocial well-being" of their residents. That includes maintaining proper hydration – something Patricia Olthoff-Blank's mother certainly did not get. After Virginia Olthoff's death and that of another resident of the same nursing home, CMS fined the facility $77,462, and the families sued. But federal action against nursing home neglect is frequently insufficient, and too many nursing homes are allowed to function while perennially falling below minimum standards and then bouncing back up. "There's a segment of the industry that has what we call 'yo-yo compliance,' because they're constantly coming in and out of compliance," and rotating through various deficiencies, said Lori Smetanka, executive director of the National Consumer Voice for Quality Long-Term Care. "And they're just not held accountable." "We see continued and routine noncompliance" with laws and regulations, said Eric Carlson, directing attorney with Justice in Aging, a nonprofit that fights against poverty among older Americans. "There are facilities that have business practices that are inconsistent with the law – for example, they treat Medicaid patients more poorly, and there's a federal statute that says you can't discriminate based on reimbursement source." Too often, he said, CMS "does not recognize the violation, or if it does recognize it, it doesn't impose a penalty." 5. Aging Buildings The physical environment of nursing homes has become another source of problems. Traditional nursing homes built 30, 40 or 50 years ago were often modeled on hospitals, with long hallways and small, shared rooms. "There's a warehouse mentality that's communicated by that kind of floor plan and architecture," Carlson said. "For most people, our lives are not organized around our beds… we don't sleep three-feet away from strangers." The Green House model of nursing care and others like it, in contrast, consists of small-scale, home-like units limited to groups of 10 to 12 older adults, each with their own private room. These models often operate with a "more enlightened" staffing arrangement, with nurse aides working consistently with the same residents, Carlson said. 'We're Going to Change Your Culture for You' Mickens, the Texas ombudsman, said one ongoing challenge in nursing homes is a lack of acknowledgment that residents have rights. "They have a voice, and their voice and their preferences may be contrary to what the nursing home staff, to include the doctor, is wanting for them," she said. Even if it's something as simple as getting a shower at night instead of 6 in the morning, the nursing home must strive to include that preference in the resident's care plan.   Carlson agreed. He assembled a list, available through Justice in Aging, called 25 Common Nursing Home Problems and How to Resolve Them. In addition to enforcement, everyone involved in the system – from hospital discharge planners to staff to family members to the residents themselves – must have higher standards, Carlson said. That's the idea behind the guide, he said. If a facility says it is not going to honor a request "because it's going to be too much of a hassle," Carlson noted, the consumer can say, "No. Unacceptable." It will take a culture change, he said. And if the facilities don't do it themselves, he added, consumers must say, "We're going to change your culture for you. Because what you're doing right now is not good enough." https://www.nextavenue.org/nursing-home-vulnerabilities-2/?

Health Care Reform Articles - March 24, 2021

 

Health care is too expensive. Medicare for all is the solution.

 by William Babson - Bangor Daily News - March 16, 2021

I am responding to two articles in the March 11 issue of the Bangor Daily news. One is a column by Dale Crafts of Lisbon, a Republican nominee for Maine’s 2nd Congressional district in 2020, titled “Public option will make health care system worse.” The other is an “Other Voice,” an editorial from the March 9 issue of the Los Angeles Times, titled “Make health insurance affordable.”

Crafts recognizes the serious challenges to our health care system brought on by the pandemic but goes on to say that “a new government-run health insurance system, like the ones recently proposed by some politicians in Washington will create more problems than it solves.”

The Times editorial states that “a health insurance system that relies on employer-sponsored policies is poorly equipped to handle a disease-induced recession.” Millions of Americans who lost their jobs no longer have health insurance. “Combined with steadily rising deductibles, high premiums have been one of the biggest challenges not just for the ACA but for the entire health system.” The editorial goes on to say that President Joe Biden is providing a COVID-19 relief bill that is a big albeit temporary improvement in affordability.

So we have a Republican, whose party has misled us for many years saying that they will improve our health care system. And what have they done? They have made it worse by trying to destroy the Affordable Care Act in the courts and making it harder for poor people to get Medicaid.

In essence, Crafts is saying that we need to go back to the old private insurance-based system that is not working. Hospitals in Republican states that have not accepted Medicaid expansion are more likely to close than in states that accepted Medicaid expansion. In addition, while disparaging government-run health care, Crafts conveniently does not mention that Medicare has worked well since 1965 and is a government-run system with much less administrative costs. As a surgeon who worked in the system for 32 years, I can tell you that my Medicare patients received excellent care — and they appreciated it.

The LA Times editorial is more aligned with the facts of our current system. However, it admits that Biden’s efforts can only be temporary.

The only answer to our health system’s problems is single-payer Medicare for all. And the biggest and most overwhelming reason is that it eliminates private for-profit health insurance and huge costly administrative control and paperwork. It also channels money to where it is needed — not building hospitals that cater to the rich with rooms with great views and lavish entrances — but by building much-needed emergency rooms, etc.

I recommend to those of you who want to understand the issue a book published this year titled Medicare for all: A Citizen’s Guide.

https://bangordailynews.com/2021/03/16/opinion/contributors/health-care-is-too-expensive-medicare-for-all-is-the-solution/ 

 

At Last, Democrats Get Chance to Engineer Obamacare 2.0

The Biden administration is trying to make the health care law more generous and closer to its original design, but may disappoint progressive allies hoping for more.

By Sarah Kliff and Margot Sanger-Katz - NYT - March 1, 2021

Ever since the Affordable Care Act became law in 2010 — a big deal, in the (sanitized) words of Vice President Joseph R. Biden Jr. — Democrats have itched to fix its flaws.

But Republicans united against the law and, for the next decade, blocked nearly all efforts to buttress it or to make the kinds of technical corrections that are common in the years after a major piece of legislation.

Now the Biden administration and a Democratic Congress hope to engineer the first major repair job and expansion of the Affordable Care Act since its passage. They plan to refashion regulations and spend billions through the stimulus bill to make Obamacare simpler, more generous and closer to what many of its architects wanted in the first place.

“This is the biggest expansion that we’ve had since the A.C.A. was passed,” said Representative Frank Pallone of New Jersey, who helped draft the health law more than a decade ago and leads the House Energy and Commerce Committee. “It was envisioned that we’d do this periodically, but we didn’t think we’d have to wait so long.”

The Affordable Care Act has expanded coverage to more than 20 million Americans, cutting the uninsured rate to 10.9 percent in 2019 from 17.8 percent in 2010. It did so by expanding Medicaid to cover those with low incomes, and by subsidizing private insurance for people with higher earnings. But some families still find the coverage too expensive and its deductibles too high, particularly those who earn too much to qualify for help.

Tucked inside the stimulus bill that the House passed early on Saturday is a series of provisions to make the private plans more affordable, at least in the short term.

The legislation, largely modeled after a bill passed in the House last year, would make upper-middle-income Americans newly eligible for financial help to buy plans on the Obamacare marketplaces, and would increase the subsidies already going to lower-income enrollees. The changes would last two years, cover 1.3 million more Americans and cost about $34 billion, according to the Congressional Budget Office.

For certain Americans, the difference in premium prices would be substantial: The Congressional Budget Office estimates that a 64-year-old earning $58,000 would see monthly payments decline from $1,075 under current law to $412 with the new subsidies.

It was a blow to Obamacare’s authors when the Supreme Court allowed states to refuse to expand Medicaid, the health law’s primary tool for bringing comprehensive coverage to poor Americans. Multiple states have joined the expansion in recent years, some via ballot initiative, but some Republican governors have steadfastly rejected the program, resulting in two million uninsured Americans across 12 states.

The stimulus package aims to patch that hole by increasing financial incentives for states to join the program. Though Democrats are offering holdout states larger payments than they’ve contemplated in the past, it’s unclear whether it will be enough to lure state governments that have already left billions on the table. Under current law, the federal government covers 90 percent of new enrollees’ costs.

Republican critics of the law contend that Democrats are seeking to install long-sought permanent policies through a temporary stimulus plan.

“Suffice it to say, this is not Covid relief,” said Senator Bill Cassidy of Louisiana, who helped write a prominent Obamacare repeal bill in 2017. “It’s fulfilling the agenda of the Biden administration under the guise of Covid relief.”

Mr. Cassidy fears that short-term spending increases on Obamacare will prove difficult to undo. He cited a quotation from former President Ronald Reagan: “Nothing lasts longer than a temporary government program.”

The White House and the Department of Health and Human Services (H.H.S.) have already begun to advertise insurance options and make them easier to get. On Feb. 15, the Biden administration opened a special enrollment period so that uninsured people could sign up for coverage right away, publicizing it widely. Officials have also begun rolling back Trump-era work requirements in the Medicaid program.

Other regulatory changes are also planned. Xavier Becerra, Mr. Biden’s choice to lead H.H.S., testified about his ambitions on Capitol Hill this week. Officials are hoping to resolve the “family glitch” problem, which makes Obamacare insurance expensive for the children or spouses of workers who get insurance only for themselves at their job. Officials plan to tighten the rules for private short-term insurance plans that are not required to cover a full set of benefits. And they are considering a long list of technical changes aimed at making plans more comprehensive.

“Any one of these changes individually is moderate, but stack one on top of another and you get a big boost to the Affordable Care Act,” said Jonathan Cohn, author of “The Ten Year War,” a new history of the health law. “It doesn’t change the law’s structure, but it does make it much more generous.”

Those close to the effort say its ambitions — and its limits — reflect the preferences of those leading the way. Mr. Biden, who was involved in the passage and rollout of Obamacare as vice president, ran on the idea of expansion, not upheaval. And leaders in Congress who wrote Obamacare have been watching it in the wild for a decade, slowly developing legislation to address what they see as its gaps and shortcomings. Many see their work as a continuing, gradual process, in which lawmakers should make adjustments, assess their effects, and adjust again.

“When you think about where we thought the A.C.A. was headed four years ago, and contrast that to where we are right now, on the cusp of a massive expansion of affordability, it’s pretty exciting,” said Christen Linke Young, deputy director of the White House Domestic Policy Council for Health and Veterans Affairs.

But Bob Kocher, an economic adviser in the Obama administration who is now a partner at the venture capital firm Venrock, said that beyond the current changes, Mr. Biden’s mission on Obamacare seemed more modest, more like “don’t break it.”

“I don’t think he has any ambition in mind beyond managing it,” he said.

To aid in the effort, President Biden has recruited a host of former Obama administration aides. His picks for top jobs at the Centers for Medicare and Medicaid Services, the Office of Management and Budget, as well as key deputies at H.H.S., all worked on the first rounds of Obamacare policymaking. Many key congressional aides working on health care now also helped write the Affordable Care Act.

Frequently Asked Questions About the New Stimulus Package

The stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more.

Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read more

This credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.

There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.

The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.

Born in the Great Recession, the Affordable Care Act was drafted with a focus on costs. Political compromises and concerns about runaway deficits kept the law’s overall 10-year price tag under $1 trillion, and included enough spending cuts and tax increases to pay for it. Those constraints led its architects to scale back the financial help for Americans buying their own coverage. Staffers who wrote the formulas said they ran hundreds of simulations to figure out how to cover the most people within their budget.

Those who wrote the regulations that interpreted the law also recall drafting rules that erred on the side of spending less to avoid blowback or litigation.

Republicans, who spent a decade dead set on repealing the law, blocked any policies to expand its reach. And the fiscal politics of the Obama years would have foreclosed the kind of subsidy expansion under discussion now, even if the law had been less politically divisive.

Now, with Democrats back in control of Congress and the White House, there is new enthusiasm for expanding health coverage. Against the background of the pandemic and changing views about federal debt among many economists, lawmakers are less concerned about deficit spending than they used to be.

But the Biden health project still faces challenges, and it may disappoint his allies. The new proposed spending, which would bring the law’s subsidies in line with early drafts of the Affordable Care Act, is temporary. Making those changes permanent could cost hundreds of billions over a decade, a sum that may spook moderate Democrats once the economy is in better health.

And for many Democrats, the overhauls do not go as far they had hoped. Mr. Biden ran not only on subsidy expansions and technical fixes, but also on a lowering of the Medicare eligibility age and the creation of a so called public-option plan, government insurance that people could choose in place of private coverage. Members of Congress have introduced Medicare expansion and public-option bills, but neither type of proposal appears likely to move soon.

Mr. Becerra has previously supported a single-payer system. He faced questions about his commitment to that idea from Senator Bernie Sanders, who has repeatedly introduced Medicare for All legislation, and from Republican senators who oppose the idea. In each case, he responded similarly: The Affordable Care Act is the president’s focus, and his own as well.

“I’m here at the pleasure of the president of the United States,” Mr. Becerra said. “He’s very clear where he is — he wants to build on the A.C.A. That will be my mission.”

Pramila Jayapal, a Democratic congresswoman from Washington State, who led a joint Biden-Sanders policy task force during Mr. Biden’s presidential campaign, says she is heartened by the measures the administration is taking — but concerned that the current efforts don’t yet match the promises made to progressives during the campaign. She said she would keep pushing for more generous health plans and an expansion of Medicare to cover more Americans, among other measures.

“I believe we’re going to do so many things in this package, and I do think it’s a good package,” she said. “But I believe we haven’t done enough to help everyone who has fallen into the cracks.”

https://www.nytimes.com/2021/02/27/upshot/biden-health-plan-obamacare.html?referringSource=articleShare 

 

The Health 202: States are eyeing public option health plans. Many obstacles stand in the way.

by Alexandra Ellerbeck - Washington Post - March 22, 2021

This year, Washington became the first state to offer a public option. 

Several other states may be close behind. Advocates and lawmakers in Colorado, Oregon, Nevada, Connecticut, and New Mexico are exploring public option proposals of their own. The idea is to provide consumers with a lower-cost option that can also compete with private health plans and hopefully drive prices down throughout the individual marketplaces.

But pushback to the public option from the health-care industry and insurance companies is fierce, and the experiment in Washington is already off to a rocky start, with some backers disappointed that it has done little to bring down premiums. 

Washington’s experience shows how hard it is to implement a state-level public option.

Beginning in the 2021 open enrollment period, Washington residents on the individual insurance market could take part in the nation’s first public option. 

Not many of them chose to do so. Less than 1 percent of state residents in the individual health insurance market opted for one of the 15 public option plans offered by five private insurers, according to initial data from the state. 

Although some of the low uptake probably stems from consumers who were auto- enrolled in the same plan they had the previous year, the public option plans also did little to control costly premiums.

The average public option plan premiums across all offerings was 4 percent higher compared to average 2020 Obamacare premiums, according to a presentation by Christine Gibert, a policy director at the Washington Health Benefit Exchange.

Cynthia Cox, the vice president of the Kaiser Family Foundation and director of its Affordable Care Act program, points out that if you control for the generosity of the plans, the public options are actually a little cheaper on average. But that’s not something consumers often realize.

“People aren’t always making that apples-to-apples comparisons when they’re shopping online; they’re looking at the premium first,” Cox said. “Suffice it to say, the idea that a public option could significantly lower premiums did not play out well.”

The state found it extremely difficult to set payment rates lower.

The high premiums for the public option plan stemmed from a failure to cap payment rates to health-care providers, said Washington state Rep. Eileen Cody, who sponsored the bill and chairs the state House’s health-care committee. 

When Cody initially proposed the bill, she proposed capping payments at the rate that Medicare pays. Later, lawmakers increased that to 160 percent of what Medicare pays. Even with the higher rates, the state struggled to get health-care providers to agree to participate in the plan. That’s because hospitals are used to receiving much higher payments from private insurance plans than from Medicare — an average of 247 percent more, according to a Rand Corp. study.

“The hospitals just would not take lower rates,” Cody said.

Cody said the public option rollout didn’t go the way she had planned.

“In some ways, I would say it’s been a disappointment,” Cody said. “The rates did not come in where we hoped.”

It could be easier for the federal government to sell a public option plan.

States can’t run deficits to fund health-care subsidies and may face pressure from health-care providers who threaten to leave if reimbursements drop too low, according to Ge Bai, an expert on health-care policy at Johns Hopkins Bloomberg School of Public Health. The federal government, in contrast, has much more clout and financial leeway.

“The bargaining power is so much bigger at the federal level,” Bai said.

Still, Bai and other experts cautioned that it’s too early to judge the success or failure of Washington’s public option. Backers of public option proposals may bank on being able to gain more negotiating power over time as the public option gains a foothold in politics and the market.

“They expect this to be a process that will go over a number of years where slowly over time, they’ll be able to introduce changes or alterations,” said Jerome Dugan, an expert on health insurance models at the University of Washington.

That seems to be the case in Washington: Cody said that lawmakers are working on legislation that would force more health-care providers to take the public option and are looking into whether the state could also increase subsidies down the line in an attempt to bring down premiums.

Opposition to public options is fierce.

The Partnership for America’s Health Care Future, an alliance of hospital, health insurance and pharmaceutical lobbyists, is spending $1 million to combat a plan in Colorado that would trigger the creation of a public option if the health-care industry cannot bring down costs on its own before 2024.

This year’s television ad buy in Colorado comes after the group already poured $5 million into the state to attack a separate public option proposal last year, the Colorado Sun reports. 

The group also has campaigned against a state plan in New Mexico. In the District, Maine and Montana, it is promoting ad spots tying a federal option to increased prices.

An ad from the Partnership for America's Health Care Future opposing a federal public option:

In Connecticut, Democrats pushing a public option have run into opposition from the insurance industry. State ethics filings show that insurance giants Aetna, Cigna and Anthem spent nearly half a million dollars lobbying the statehouse and executive branch in the 2019-2020 period, NPR reports. 

Frances Padilla, the president of the Universal Health Care Foundation of Connecticut, said this opposition has been the biggest force scuttling efforts to introduce a public option in a state that has been nicknamed the “insurance capital of the world.”  

Padilla, a proponent of a public option in the state, is optimistic that this year could be different after the pandemic shone a spotlight on health equity issues. But not, she says, without “a drag-out fight.”

If a public option succeeds on the state level, it could pave the way for national action.

Democrats at the state level have a warning for lawmakers looking to push a federal public option: Prepare for a bruising fight.

They will probably face much of the same opposition from hospitals and industry, said Cody, of Washington. “Everyone has a hospital in their district,” she added.

Still, Cody thinks that efforts in Washington and other states, if they succeed, could make it easier for national lawmakers to follow suit. 

“Usually the states try things and then the feds take what seems to be a good idea and try to build on it,” she said.

https://www.washingtonpost.com/?reload=true&_=1616412867316 

 

Private Equity and Physician Medical Practices — Navigating a Changing Ecosystem 

Jane M. Zhu, M.D., M.P.P., M.S.H.P., and Daniel Polsky, Ph.D., M.P.P. - NEJM - March 18, 2021

In 2011, a group of scientists traveled to an archipelago in the Bahamas to begin a multiyear experiment. They sought to learn what would happen when new predators were introduced into an ecosystem of lizards. Classic ecologic theory suggests that certain predators contribute to a healthy ecosystem, increasing ecologic diversity and promoting the coexistence of competing species. The scientists, however, found a notable counterexample: when they introduced curly-tailed predator lizards, other species responded by rapidly changing their behavior, which intensified competition and undermined the species’ ability to coexist.¹

The ecosystem of physician-owned medical practices has been similarly inundated with larger forces that are driving health care toward consolidation, corporatization, and administrative management. Between July 2016 and January 2018, hospitals and health systems acquired more than 8000 practices, a process that was shepherded by regulatory shifts, changes in payment and delivery models, and uncertainty in the health care market. Roughly 14,000 physicians left private practice to become hospital-affiliated employees.² These structural changes have shifted competitive dynamics for medical practices in two principal ways. First, remaining independent practices must now compete against much larger entities, which benefit from economies of scale. Second, to remain competitive, independent practices increasingly require new sources of capital. During the Covid-19 pandemic, revenue losses for many smaller practices have magnified financial pressures. Amid these changes, private-equity firms have emerged as influential players, offering a lifeline to smaller groups needing a competitive edge in a consolidating market. The rapid growth of private-equity investment throughout medical specialties³ has generated intense interest in potential adverse effects on physicians and patients.

Private-equity firms offer practices an alternative source of investment capital outside public ownership and distinct from hospitals and health systems, principally by allowing physicians to continue to hold equity and benefit financially from future transactions. To yield annual returns exceeding 20% on a typical investment horizon of 3 to 7 years, private-equity firms generally use a combination of expansion, establishment of new lines of business, and restructuring. For investments in physician practices, one core strategy involves acquiring and scaling up “platform” practices — usually established, brand-name companies with market reach and a good clinical reputation — before selling the practice to a larger investor. For example, when the New York–based urgent care group CityMD was acquired by private-equity firm Warburg Pincus, it already had 68 locations; it has since acquired other local urgent care groups, expanded to 100 locations, and merged with Summit Medical Group, a physician-owned multispecialty practice with more than 80 sites in New York and New Jersey.

Some of the value created by private-equity firms may be viewed in the context of a zero-sum game — one that results in winners and losers in an ecosystem serving a finite number of patients. A platform practice may roll up an entire portfolio of small practices, including regional competitors and practices in its referral networks, to be able to redirect more referrals to internal clinicians and increase its market share. Although this approach creates value for the growing practice, it may reduce competition and result in loss of patients and revenue for other practices. Acquired practices may also leverage market power in negotiations with insurers, which can lead to higher margins for the practice and potentially higher costs for patients and payers.

At the same time, private-equity firms may create value by means of operational improvements that enhance efficiency. Investors may improve administrative processes, enhance quality and revenue-cycle management, fuel the adoption of clinical metrics and compliance systems, help practices meet reporting requirements, reduce input costs, and share industry knowledge with smaller practices. Capital infusions may also promote the adoption of technology infrastructure such as electronic medical records, help practices assume risk as part of value-based payment arrangements, and facilitate practice modernization. These changes may ultimately benefit patients by improving patient experience and the value of care delivery.

As in any ecosystem, however, the introduction of new forces can have unintended and undesirable consequences. An important concern is that private-equity firms’ goal of maximizing short- to medium-term profits may place undue pressure on physicians. Although a sale to a private-equity firm may yield an up-front lump sum for practice partners, changes in physician-compensation structures and professional autonomy may substantially alter performance incentives, practice conditions, career prospects, and job satisfaction, particularly for younger physicians. Each subsequent sale — to other private-equity firms, health services groups such as Optum, or large health systems — may further chip away at clinical autonomy and introduce new management influences.

From a societal standpoint, the net effect of private-equity investments in physician practices on downstream costs, value, and quality of care is unclear. The experiences of some private-equity–backed clinics⁴ suggest that there is pressure to expand certain revenue streams by conducting more elective procedures and providing more ancillary services, and to engage in “upcharging.” Practices acquired by private-equity firms may also be given incentives to prioritize care for commercially insured patients to maximize reimbursement; to deliver more streamlined, low-complexity care (e.g., perform more skin biopsies or screening colonoscopies) rather than meeting complex care needs; or to situate new offices in higher-income communities instead of in socioeconomically disadvantaged ones. These possibilities raise important questions about the implications of such investments for health equity and larger health system goals.

Early evidence suggests that hospitals that are acquired by private-equity firms perform higher on financial-performance measures, but research on quality of care and patient outcomes has been largely inconclusive,⁵ in part because of data limitations. Private-equity firms aren’t required to publicly disclose acquisitions or sales, and the widespread use of nondisclosure agreements further contributes to opacity about practice ownership and the nature of transactions. Rigorous evaluation relies on accurate descriptions of practice ownership to identify both private-equity–backed practices and appropriate comparison groups. Without more transparency surrounding private-equity activity in the physician-practice sector, the net effects of these changes will remain unknown. As financial transactions become increasingly complex and pervasive throughout health care, transparency is also needed to permit regulators to bring enforcement actions in cases of improper conduct, to understand the incentives driving care decisions, to hold practices accountable for quality and safety, and to help patients make informed decisions about where they seek care.

As in other areas, there are probably good and bad actors in private equity. Greater standardization, monitoring, and enforcement of safeguards might help constrain nefarious practices that could unduly influence clinical care. All states, for instance, should have a comprehensive corporate practice of medicine doctrine, which prohibits medical management companies from exerting control over clinical judgment and practice. Nearly 20 states don’t have such a rule, and those that do vary substantially in the types of financial and contractual arrangements that they permit. As a result, private-equity firms frequently exploit loopholes, such as by structuring a parent company to have financial control of a practice while naming the physicians as owners.

Policy guardrails could also include revisiting the size-of-transaction threshold for U.S. Federal Trade Commission review, which is intended to prevent mergers and acquisitions that reduce competition and lead to higher prices or lower-quality services; private-equity acquisitions of physician practices have been largely exempt from such review. And although the recently passed No Surprises Act offers consumers welcome protection from surprise medical bills — which have been linked to some private-equity–backed practices — policies are also needed to more closely monitor billing practices, protect access to care, and redress anticompetitive actions in the face of consolidation.

Finally, physicians should be aware that private equity’s growth is emblematic of broader disruptions in the physician-practice ecosystem and is a symptom of medicine’s transformation into a corporate enterprise. For some practices, outside investment may help facilitate growth and extend a lifeline that allows them to compete with larger players in an increasingly consolidated market. But this trend may also contribute to practices getting squeezed. As more investors enter health care and drive value creation, it’s worth considering for whom value is being created. How physicians respond — and the extent to which they retain core values in the service of patients — will ultimately determine the ecosystem’s resilience in the face of stressors.

https://www.nejm.org/doi/full/10.1056/NEJMp2032115 

 

How ACA fuels corporatization of American health care

By Dr. Philip Caper - Bangor Daily News - Nov. 20, 2014

A new Harvard study has found that Americans’ trust in the medical profession has dropped dramatically in recent years and lags behind that in many other wealthy countries. At the same time, doctors are becoming increasingly unhappy with our profession. In his new memoir, “ Doctored,” Dr. Sandeep Jauhar eloquently explains why: More and more doctors are coming to view our profession as just another job.

We now have a situation where patients are losing confidence in their doctors, while doctors are losing confidence in our ability to do the right thing for our patients. We have a health care system becoming more hostile to doctors and patients and more friendly to health care corporations.

These trends are collateral damage caused by another trend: our increasingly corporatized, commodified and commercialized U.S. health care “industry” that is being put into hyper drive by the Affordable Care Act. The ACA is accelerating an ongoing wave of hospital consolidations and acquisition of doctors’ practices by large corporations, such as Eastern Maine Healthcare Systems and MaineHealth.

As we continue down this road, doctors see our clinical autonomy disappearing as more and more of us become corporate employees subject to pressure to meet corporate financial goals that often differ from what is best for our patients. Patients sense that pressure as they are rushed through exams and are subject to more tests and procedures, some of them of questionable clinical value. They can almost hear the cash registers ringing as they move through their doctors’ offices, as more wealth is transferred from patients to those selling health care goods and services.

Why is American medicine, once the crown jewel of American professionalism and a proud and respected calling, becoming just another commercial enterprise? In his 2010 book “ Hijacked,” Dr. John Geyman, chairman emeritus of the department of family practice at the University of Washington, explains how during the year-long Congressional debate leading up to enactment of the ACA, the interests of the public, including doctors and patients, were subverted to those of large health care corporations.

The highjacking of health care reform is paying off handsomely. Robert Pear of the New York Times recently described how the federal government and the commercial health insurance industry have morphed into one big fan club for the ACA. He quotes the libertarian Cato Institute’s

Michael Cannon explaining that since the ACA’s enactment, “Insurers and the government have developed a symbiotic relationship, nurtured by tens of billions of dollars that flow from the federal Treasury to insurers each year.”

Pear goes on to report that, “Since Mr. Obama signed the law, share prices for four of the major insurance companies — Aetna, Cigna, Humana and UnitedHealth — have more than doubled, while the Standard & Poor’s 500-stock index has increased about 70 percent.”

Pharmaceutical companies also have done very well. The ACA contains no authority for the government to negotiate pharmaceutical prices but continues the federal prohibition on the importation by U.S. residents of lower priced prescription drugs from many foreign countries.

This situation won’t change anytime soon. Congress is gridlocked. What is widely recognized as a drafting error in the ACA — which, in saner times, could have been fixed quickly without attracting much attention — is now headed to the Supreme Court.

Of course, health care is just one of many examples in which the welfare of corporations has been put ahead of the interests of the public, but it may be the poster child. Health care is now more than a sixth of our economy, and human lives and dollars are at stake.

Corporate stranglehold of our public policy traces back to the increasingly corrupt way our political campaigns are financed. The recent midterm elections were a stark reminder of that, setting record levels for corporate spending, even on local races, and saturating voters with negative, intrusive and often obnoxious messages.

What’s at stake is the future of health care and many other issues that will determine what kind of a country our children will live in. That future depends on how active and informed the public is willing to become in electing public officials who place the welfare of their constituents ahead of the wishes of their corporate contributors.

The results of the recent elections are not encouraging. But what’s becoming clearer is that our struggle is not between Democrats and Republicans, liberals and conservatives, or occupiers and tea partiers. It is between real American people and corporations.

I, for one, intend to continue pointing that out. That’s where our attention should be focused.

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com or through his website at philcaper.net. 

https://bangordailynews.com/2014/11/20/health/blogs-and-columns/how-aca-fuels-corporatization-of-american-health-care/

 

Maine Democrats’ bills aim to hold down prescription drug prices, health care costs

Their 5 bills include proposals to reduce price gouging by pharmaceutical companies and help consumers who have trouble paying for insulin. 

by Joe Lawlor - Portland Press Herald - March 23, 2021

Maine Democratic lawmakers are proposing a suite of bills that will attempt to rein in the cost of prescription drugs and lower health care costs.

Lawmakers, including Senate President Troy Jackson, held a news conference Tuesday to roll out the five bills, two of which are designed to prohibit price gouging by pharmaceutical companies. The Maine Attorney General’s Office would review drug price increases and halt the increases if prescription prices skyrocket for certain drugs.

Maine is one of at least 18 states that has prescription drug price-gouging laws on the books or under consideration, including Massachusetts, according to the National Conference of State Legislatures. The most comprehensive and effective price-gouging laws are in Massachusetts, New York and Maryland, according to a 2019 study published in the Journal of Health Care Policy and Law.

Senate Republicans are so far declining to weigh in on the bills, said Tom Desjardin, spokesman for the Senate caucus.

During the media briefing, Jackson said that he’s heard too many stories of Mainers who are priced out of their prescription drugs, or have to make difficult choices between rationing drugs, buying groceries or getting behind on their bills.

“No one should have to live like this,” Jackson said. “We know too many Mainers who live this reality.”

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Susan Kinney of Belgrade said at the media briefing that her adult daughter, Marissa, has Crohn’s disease, and the medication is expensive, costing them thousands of dollars every month out-of-pocket. Kinney said her daughter is on a low dose now, but she could need a higher dose in the future.

“We are fortunate the medicine is working,” Kinney said. “But if the dose increases, so does the cost, by thousands of dollars.”

Retail prescription drug spending in the United States rose from $298 billion in 2014 to $369.7 billion in 2019, a 24 percent increase, according to federal statistics. And there have been some high-profile examples of out-of-control price increases, such as EpiPen, a common allergy medication, going from $100 in 2009 to $600 in 2016.

Jasmine Gossett, a spokeswoman for the Pharmaceutical Research and Manufacturers of America trade association, said that the group agrees that “health care should be more affordable for Mainers.”

“Unfortunately, this package overlooks what’s contributing to the challenges families are facing, like their rising out-of-pocket costs because of a broken insurance system,” Gossett said. She said the bills are “filled with dangerous ideas that could make it harder for patients to get the medicines they need” by threatening “crucial innovation” in the pharmaceutical industry.

The price gouging bill by Jackson would trigger a review by the Attorney General’s Office if a drug price increased by more than $30 for a 30-day prescription of a generic drug, or for non-generic drugs the prices increased by at least 15 percent when compared to the wholesale acquisition costs of the drugs.

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A bill by Sen. Ned Claxton, D-Auburn, would require drug manufacturers to justify prescription drug price increases or pay a fine. Claxton said his bill, paired with the price gouging bill, would give drug companies “an extra hoop to jump through.”

“To try to corral pharmaceutical prices we need a multitude of different approaches,” Claxton said.

Another bill would establish the Office of Affordable Health Care, which would study why health care costs increase, and offer policy solutions to lawmakers based on its findings.

A bill by state Sen. Cathy Breen, D-Falmouth, modeled after a law in Minnesota, would mandate that those without insurance or who can demonstrate that they have trouble paying for insulin be able to purchase an emergency 30-day supply for $35. And a bill by state Sen. Eloise Vitelli, D-Arrowsic, would mandate more transparency in how drug companies price medications.

This is the second major push by Democrats to try to control the cost of prescription drugs in Maine, following a series of bills that were signed into law by Gov. Janet Mills in 2019.

Jackson said that while those bills have had some success, more needs to be done.

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One of the laws approved in 2019 would allow for wholesale importation of drugs from Canada, but a federal waiver to do so has yet to be approved. Another law that capped the price of insulin at $100 per month was helpful, said Breen, but some have difficulties affording $100 per month.

“This bill is about saving lives in Maine right now,” Breen said.

Lindsay Crete, a spokeswoman for Mills, said the governor is evaluating the bills, and “appreciates their commitment to addressing the important issue of health care.” The bills will be up for a public hearing at 10 a.m. on March 30 before the Health Coverage, Insurance and Financial Services Committee.

 https://www.pressherald.com/2021/03/23/maine-democrats-take-aim-at-prescription-drug-prices-health-care-costs/