New Drug Could Cost the Government as Much as It Spends on NASA
The Alzheimer’s treatment will cost $56,000 per patient, and millions may use it. The result: “crazy numbers” for Medicare.
Josh Katz, Sarah Kliff and
A newly approved drug to treat Alzheimer’s disease is expected to become a multibillion-dollar expense for Medicare. By one projection, spending on the drug for Medicare’s patients could end up being higher than the budgets for the Environmental Protection Agency or NASA.
There’s little evidence that the drug, Aduhelm, slows the progression of dementia, but the Food and Drug Administration approved it this month. Analysts expect that Medicare and its enrollees, who pay a share of their prescription drug costs, will spend $5.8 billion to $29 billion on the drug in a single year.
“It’s unfathomable,” said Tricia Neuman, executive director of the Kaiser Family Foundation’s program on Medicare policy. “These are crazy numbers.”
Plenty of other drugs cost more than Aduhelm, which is made by Biogen and will be priced at $56,000 annually. What makes it different is that there are millions of potential customers, and the drug is expected to be taken for years.
Spending on this scale, so suddenly, could have far-reaching impacts for Medicare, its users and taxpayers. The addition of $29 billion a year to Medicare’s budget would be paid for by increases in both taxpayer spending and in the premiums paid by all Medicare users. Premiums might also go up for supplemental plans many Medicare beneficiaries buy to offset costs the program doesn’t pay directly. And the costs are likely to spill over into state budgets, where Medicaid pays premiums for low-income Medicare enrollees.
Congress, budget experts and several White Houses have spent years suggesting ways to trim spending in Medicare, a large and growing share of the federal budget. But many of these proposals are politically difficult to achieve — and most would save less than the projected cost of Aduhelm.
“It’s so much work to get savings that are really much smaller than this one drug would cost,” said Joshua Gordon, the director of health policy at the Committee for a Responsible Federal Budget, who says he has found himself thinking nonstop about the challenges raised by Aduhelm since its approval.
Cost predictions vary because analysts aren’t sure how many patients will ultimately use the new drug. The F.D.A.’s approval could apply to everyone diagnosed with Alzheimer’s disease. But the drug was developed for a smaller group of around 1.5 million patients who are in the early stages of the disease. Analysts aren’t yet sure whom doctors will recommend the treatment for, and which families will want to try it. The F.D.A. has asked Biogen to continue studying the drug until 2030, but prescribing could become widespread before there are any further public results on how well it works.
Allison Parks, a Biogen spokeswoman, said in an email that the company would focus on reaching the type of patients who were studied in the company’s clinical trials, “in the early symptomatic stage of the disease.”
The range reflects a variety of reasonable expert estimates. The high estimate, drawing on a Kaiser paper, assumes that about a quarter of the two million Medicare enrollees who currently take an Alzheimer’s treatment will take this one. The low one is based on a Cowen and Company analyst estimate of $7 billion in total sales by 2023.
Estimating how many patients will use the drug is challenging. Aduhelm is not just expensive, but also somewhat hard to take, requiring monthly in-person visits to an infusion center for treatment. Patients who take it will be required to get multiple brain scans during their treatments to look for side effects.
And the side effects themselves — about 40 percent of patients in one clinical trial showed signs of brain swelling — may discourage some patients from trying the drug, and prompt others to stop taking it. (The many scans — and treatments for more serious side effects — would also be covered by Medicare.)
There are six million Medicare enrollees who do not purchase supplemental coverage who could have to pay 20 percent of the drug’s cost, in this case $11,200 a year.
Demand may nevertheless be high from families who see an opportunity to intervene when faced with a devastating diagnosis. Until now, there have been few treatment options available for patients hoping to forestall cognitive decline from the disease.
“There is something intrinsically hard about having a loved one, seeing the clock ticking, and saying, Well, let’s just wait,” said Dr. Steven Pearson, a primary care physician and the president of the Institute for Clinical and Economic Review (ICER). “It’s very hard to ignore the drive to do something.”
Doctors, who would administer this drug and be paid a percentage of the drug’s high price by Medicare for that work, may face financial incentives to say yes when patients ask for it.
“The implications of this one drug and the associated set of procedures are enormous,” said Rachel Sachs, a law professor at Washington University in St. Louis and an author of a recent essay in The Atlantic asserting that the drug could “break American health care.
Private insurers may erect roadblocks to treatment, requiring patients to get additional tests or prove that other options haven’t worked. But in normal circumstances, Medicare covers drugs that are approved by the F.D.A. Medicare decides what drugs to cover based on whether they are “reasonable and necessary,” not on how much they cost.
Medicare is initially required to pay for this type of drug at its list price in addition to a 3 percent fee to the doctor who gives it. And then, after about a year on the market, it pays the average sales price plus 6 percent. For drugs with competition, that average price can be substantially lower than the sticker price. But for a drug like Aduhelm, which is the first of its kind, the drugmaker may not offer doctors discounts.
Medicare, which covers 61 million Americans 65 and over, does have some tools to contain costs. It could decide to cover the drug in a way that is more limited than the F.D.A. approval, a break from its normal practice.
Or it could do something even more unusual: An unexpected alliance of advocates has suggested that Medicare put the drug into a randomized experiment to evaluate how well it works — paying to cover the drug in some parts of the country, but not others. Such policy experiments were authorized under the Affordable Care Act, but one has never been used to limit coverage of a drug in this way.
Other countries will most likely control the cost of Aduhelm by negotiating with Biogen for a lower price, or simply decline to buy it at all. Most will consider the drug’s effectiveness when deciding what they are willing to pay. So far, the drug has not been approved for use anywhere else in the world.
Medicare can’t do that. Because of the way it pays for drugs under current law, it has no way to bargain down the price. Democrats increasingly support legislation to change that. The House passed legislation in 2019 that would give Medicare the authority to negotiate some prices, but it died in the Senate. Legislators reintroduced the same bill in the House in April.
President Biden supports allowing Medicare to negotiate drug prices but did not include the policy in his proposed American Families Plan.
Dr. Pearson of ICER has estimated that if the new drug’s effectiveness were taken into account, a fair price would be $2,500 to $8,300.
“It will be interesting to see if this starts a discussion about fair pricing in the United States,” he said. “To most people’s eyes, this looks like an outstanding example of a price that just does not match up with the evidence.”
https://www.nytimes.com/2021/06/22/upshot/alzheimers-aduhelm-medicare-cost.html
The Sassaman Report: A Public Hearing on LD1045
Ezra Sassaman - Maine Allcare Newsletter - June 12, 2021
On May 12th, the Maine State Legislature held a public hearing on LD 1045, An Act to Support Universal Health Care. LD 1045 aligns completely with Maine AllCare’s key principles for health care legislation. It includes universal coverage, public funding, comprehensive care, and coverage independent from employment. It chooses public good over profits.
In around two hours of oral testimony, over twenty people presented personal stories and strong arguments in favor of universal health care in Maine. They included legislators, active and retired physicians, psychiatrists and mental health counselors, small business owners, a veteran, and members of the Unitarian Universalists.
Some testimonials went as I expected: horror stories of patients navigating the minefield of private health insurance companies in our country. What I did not expect was how many doctors and other caregivers feel the exact same way.
Here are four of the most common themes that arose during the testimony:
Employer-based health care is a bad idea
During the financial crisis in 2007, many people lost their jobs and, with them, their health insurance. Over a decade later, the U.S. still had not taken steps from preventing this tragedy from repeating itself. During the COVID-19 pandemic in 2020 and continuing into 2021, tens of millions of people lost their jobs, and, again, their health insurance. Many testified that losing insurance during a pandemic hurts gravely. A global public health crisis is exactly when it makes the most sense to have people insured and unafraid to seek medical treatment.
Lynn Cheney, an Affordable Care Act (ACA) Navigator and board member of Maine AllCare, asserted, “COVID-19 has provided the ultimate reason that health care should not be tied to employment.”
We need dramatic change, not tinkering around the edges
Many testified that small fixes to our current health care system would not be enough to get Mainers the kind of health care they deserve. Even many people who are covered with high deductible health insurance are afraid to risk bankruptcy by seeking needed care. The status quo in this country means that those who do not have enough money do not have a consistent relationship with doctors. Instead, they only visit the hospital when something goes very wrong.
Valerie Dornan, a member of Maine AllCare, shared a heartbreaking story about her mother dying in the hospital with “no confidence in a health care system she never had access to.” Dornan said about her mother, “by the time she was eligible for Medicare, going to the doctor was as alien to her as it would be to a martian.”
Private health care hampers caregivers’ ability to treat their patients
Several active and retired physicians and mental health professionals testified in favor of universal health care in Maine. Many described how their work was made more difficult by insurance companies. They disliked being forced to double-check whether a certain procedure or prescription drug was covered by the insurance companies. They instead wanted more freedom to focus on their patients’ health. Like patients, doctors and psychiatrists find it difficult to navigate the bureaucracy of health insurance companies.
Caryl Heaton, DO, a family physician and board member of Maine AllCare, described her time working in a large group medical practice. She explained, “I found we had not had an increase in payment from Aetna Insurance in nine years. And we could not cancel Aetna, because, in one form or another, it covered about 30% of our patients. But during that same time… premiums went up every year. Physicians need to understand how and why they are paid. That’s impossible when you take 27 different payers.”
Humans have inherent worth and dignity, so stop treating them like disposable products
A veteran described how the publicly-funded Veterans Affairs (VA) health insurance program saved his life. When a routine annual checkup found a suspicious spot on his body, he did not have to worry about costs when he got an x-ray. He explained that a private system would contain no incentive for him to get an expensive scan nor for an insurance company to pay. But this would have likely cost him his life: the x-ray revealed a cancerous spot that needed to be removed immediately.
On a similar note, many others testified about the overwhelming focus on money in our current system. Under the status quo in this country, profits are too often seen as more important than human lives.
Members of the Unitarian Universalists shared their belief in the inherent sense of worth and dignity of each human. They see a moral imperative for all people to be healthy and cared for regardless of their level of wealth.
Testimony against universal health care in Maine
Although testimony on LD 1045 was overwhelmingly in favor, two speakers, Kristine Ossenfort and Katherine Pelletreau, argued against the legislation. Both women have a direct connection to the health care industry.
Ossenfort works for Anthem Blue Cross and Blue Shield in Maine. She argued that universal health care is too expensive and difficult for a single state to implement.
Pelletreau is the Executive Director of Maine Association for Health Plans, which represents clients such as Aetna, Anthem, and Cigna. She made similar arguments as Ossenfort and especially emphasized the failed attempt to achieve universal health care in Vermont.
Closing
The testimony showed overwhelming support for universal health care in Maine, from legislators and their constituents alike. For too many, our current health care system is too expensive, confusing, and inhumane. Mainers from a variety of backgrounds understand that the status quo is unacceptable for many reasons and they want big changes.
But the end of the public hearing showed that health insurance corporations won’t go away without a fight. Proponents of universal healthcare must understand the types of arguments these companies make to avoid giving up their power. That way, we can address their talking points head-on and respond with more convincing arguments of our own.
https://maineallcare.org/the-sassaman-report-a-public-hearing-on-ld1045/
Medicaid Enrollment Surpassed 80 Million, a Record, During the Pandemic
The increase points to the program’s growing role not just as a safety net, but also as a foundation of U.S. health coverage.
by Sarah Kliff - NYT - June 21, 2021
Medicaid enrollment rose sharply during the pandemic, with nearly 10 million Americans joining the public health program for the poor, a government report released Monday showed.
Eighty million people were covered under Medicaid, a record. It reflected an increase of nearly 14 percent over the 12-month period ending Jan. 31. The figure also includes enrollment in the Children’s Health Insurance Program, which covers children whose parents earn too much for Medicaid, but too little to afford other coverage.
The spike in enrollment demonstrates Medicaid’s increasingly important role not just as a safety net, but also as a pillar of the American health system, with fully a quarter of the population getting coverage through it.
“This tells us that Medicaid is a critical program for American families,” said Chiquita Brooks-LaSure, the Biden administration official who oversees Medicaid. “What we’ve seen during this pandemic is that people want access to affordable health insurance, and how important it is during a public health crisis.”
The Affordable Care Act transformed Medicaid from a targeted health care benefit meant to help certain groups — expectant mothers, for example, and those with disabilities — to a much wider program providing largely free coverage to most people below a certain income threshold. A notable exception is the 12 states — mostly in the South — that have declined to expand Medicaid under the A.C.A.
Medicaid, in which states and the federal government share the cost, covers all adults with income up to 138 percent of the poverty level, which would be about $17,420 for an individual to qualify this year.
The expansion of Medicaid in most states since the bulk of the A.C.A. took effect in 2014 provided a public source of coverage for the newly unemployed that did not exist a decade ago. Adult enrollment in Medicaid grew twice as fast as child enrollment, suggesting that widespread job loss related to the pandemic created a huge group of newly eligible adults.
“In past economic downturns, there has been substantial growth in Medicaid enrollment, but it was concentrated among children,” said Rachel Garfield, co-director of the Kaiser Family Foundation’s program on Medicaid and the uninsured. “This time, it’s interesting we’re seeing much of the enrollment happening among adults.”
She also noted that Medicaid enrollment has increased much faster during the pandemic downturn than in previous downturns. Fewer than four million Americans joined the program in 2009, at the beginning of the Great Recession.
There may also have been increased interest among uninsured Americans who were already eligible for Medicaid, but who decided to enroll because of heightened health concerns during the pandemic.
“When we look at who remains uninsured, so many times it’s people who are eligible but unenrolled,” Ms. Brooks-LaSure, the Medicaid official, said. “Right now, we’re seeing that when we make it easy for people to enroll, they do it.”
Medicaid enrollment had been declining in the years leading up to the pandemic. More than a million children lost coverage between December 2017 and June 2019, a trend that rattled health care advocates. Many attributed the changes to new rules during the Trump administration that made it harder to sign up and remain signed up.
That changed last spring, as the pandemic took hold and Congress gave states extra money to fund their Medicaid programs. Congress gave a 6.2 percent spending bump on the condition that states not disenroll patients or tighten eligibility requirements.
A woman who gave birth, for example, would normally have lost coverage 60 days after delivery, but because of the legislation, she could stay on Medicaid for the length of the pandemic. Those rules remain in effect until the federal government declares the public health emergency over.
Three states — Utah, Idaho and Nebraska — expanded Medicaid last year after voters approved ballot initiatives; those states saw especially large enrollment surges. A fourth, Oklahoma, will expand Medicaid to most low-income adults starting next month.
Even after its growth under the Affordable Care Act, the Medicaid program has holes that are hard to fix. The 2012 Supreme Court decision that upheld the law’s individual insurance mandate also made expanding Medicaid optional for states.
As a result, millions of low-income adults in the 12 holdout states, which include Florida and Texas, still have no coverage. A recent study in JAMA found that Medicaid enrollment increased faster during the pandemic in the states that participated in the expansion, most likely because many more people were eligible for coverage.
Generous financial incentives offered through the most recent stimulus package have not been enough to persuade any of the 12 states to expand Medicaid, but top Biden administration officials say they remain hopeful that some will come on board.
“We hope we can encourage them,” Xavier Becerra, the Health and Human Services secretary, said in a call with reporters last week. “We want to make sure they’re expanding care and it’s affordable.”
Republicans Wave the White Flag on Health Care (for Now)
The Supreme Court’s latest ruling moved the country’s debate over health policy into a new phase. Tough questions await both parties.
by Lisa Lerer - NYT - June 18, 2021
In 2012, after the first installment of what Justice Samuel A. Alito Jr. called the Supreme Court’s “epic Affordable Care Act trilogy,” congressional Republicans vowed to use every ounce of their legislative muscle to repeal the law on their own.
“Obamacare was bad policy yesterday; it’s bad policy today,” said Mitt Romney, then the presumptive Republican presidential nominee. “Obamacare was bad law yesterday; it’s bad law today.”
Three years later, after a second ruling in which the court declined to gut the law, Republican candidates were noisily outraged and quietly relieved. They could keep the law as a rhetorical device to stoke support but escape any political backlash from millions losing health insurance.
“Every G.O.P. candidate for the Republican nomination should know that this decision makes the 2016 election a referendum on the full repeal of Obamacare,” said Senator Ted Cruz of Texas, one of more than a dozen Republicans running for president at the time.
And this week, after the court ruled with its largest margin yet to uphold the law, Republicans met the decision with an entirely different message: Get over it.
“I think three times the Supreme Court’s upheld the Affordable Care Act, and I think we need to move on,” said Senator John Cornyn, whose home state, Texas, led the lawsuit.
For six election cycles, Republicans and Democrats have wielded the health care law as a political cudgel, battering their opponents over an issue that consistently topped the list of concerns for American voters. But now, after more than 70 efforts to repeal or modify the law in Congress, three Supreme Court rulings and nearly a dozen years, Republicans may have finally run out of firepower.
The closest Republicans came to dismantling major parts of the law came in 2017, when legislation passed the House but crashed in the Senate after Senator John McCain flashed a famous thumb-down during the vote on the floor.
That failure to overturn the law after Republicans had gained control of Washington altered the political dynamics of the issue, reflecting growing support for a health care system that had become deeply embedded in American life.
Republicans lost the 2018 midterm elections after Democrats flipped their strategy from deflecting attacks on the law to defending its most popular provisions. A year later, supporting an expansion of Medicaid, a signature piece of the law, helped Democrats win governors’ races in deep-red Louisiana and Kentucky.
“Hopefully, this will be the end of the line,” said Brad Woodhouse, the executive director of the liberal group Protect Our Care and one of many Democrats who took a victory lap after the Supreme Court’s ruling on Thursday. “If Republicans continue to do this, they are likely to continue to lose elections on this issue.”
The changed politics reflect a policy that has become part of the American social fabric. As of this month, a record 31 million people receive insurance through its plans. And nearly every American is touched by programs mandating things like calorie counts on menus, expanded services for disabled people, free breast pumps for nursing mothers and a host of other benefits.
Last year, the law became more popular than ever, with 55 percent of people expressing a positive view of it — the highest rating since the Kaiser Family Foundation began tracking opinions of the act in 2010. More than 70 percent of Americans and 67 percent of Republicans believe it is important that popular provisions protecting Americans with pre-existing conditions remain in place.
This kind of deep rooting in American life is exactly the outcome many Republicans feared after the law was passed. Ever since President Franklin D. Roosevelt’s New Deal during the Great Depression, lawmakers have rarely shown the ability or the will to pare back major entitlements — the term for government assistance programs that are open to all who qualify and are not subject to annual budget constraints. After periods of bitter political controversy, Social Security, Medicare and Medicaid all became widely accepted — and popular with voters.
Although the court, in its latest ruling, rejected the plaintiffs’ claims based on legal standing, not substance, some scholars believe that the conservative majority on the Supreme Court was sending a message about future constitutional challenges to the law.
“You have to look at that increased support and say that the court is making clear that the time for legal challenges to the Affordable Care Act is over,” said Andrew J. Pincus, a partner at Mayer Brown and experienced Supreme Court litigator, pointing to the 7-to-2 ruling in the case.
For Republicans, there’s reason to expect Obamacare to linger as a kind of zombie issue, used by conservative politicians to rally the base with little actual expectation of eliminating the law. And in the dozen states that have refused to expand Medicaid, fights over the law will certainly continue. But other issues, like culture-war battles over race and transgender rights, have already supplanted health care as the party’s preferred red meat.
“I don’t know what the next step is” on health care, Representative Nancy Mace, a Republican from South Carolina, said in an interview on MSNBC. “I hope it’s not the end of the road.”
Yet the political battle over the future of the law could become more contentious for Democrats, who disagree on how to tackle problems like large deductibles, high premiums and the holdouts on Medicaid expansion.
In 2020, questions of how to build on the law dominated the Democratic Party primary race, which ended poorly for liberal politicians. Senator Elizabeth Warren’s campaign tanked after she was pressed on the details of her sweeping health care alternative. In a book released last month about her campaign, Ms. Warren largely attributed her defeat to her fumbling effort to explain how she would pay for her health care policies. Joseph R. Biden Jr., who argued for bolstering the health care law instead of scrapping private insurance, beat out Ms. Warren and several other more progressive rivals, including Senator Bernie Sanders.
Mr. Sanders, whose plan to nationalize American health care has long been a core part of his political message, welcomed the court’s decision this week but said it was not enough. As the chairman of the Senate Budget Committee, he’s pushing to lower the Medicare eligibility age from 65 to 60 and expand the range of health services the entitlement covers.
“We are the only major country, as you know, not to guarantee health care to all,” he said on Capitol Hill this week. “There are millions of older workers who would like to get Medicare who today can’t, which is why we’ve got to lower the age, and there are millions more walking around who cannot hear, can’t afford eyeglasses and dental.”
President Biden signaled little new interest in changing his position from the campaign.
“The Affordable Care Act remains the law of the land,” he said in a White House statement, adding that it was time to “move forward and keep building on this landmark law.”
Covid Proved the C.D.C. Is Broken. Can It Be Fixed?
by Jeneen Interlandi, Brian Rea -NYT - June 20, 2021
In November, an independent team of academics and public-health experts who called themselves the Covid Rapid Response Working Group gathered on Zoom to puzzle over what had by then become the pandemic’s most vexing challenge: how to make all schools safe for full-time, in-person learning as quickly as possible. Schools had not proved to be a hotbed of coronavirus transmission, but beyond that the research was complicated, and communities were divided about how to balance the risks. Some people wanted a full reopening, immediately, no exceptions. Others were terrified to return at all.
So far, there was no national plan for how to move forward. The Centers for Disease Control and Prevention was advising everyone to wear masks and remain six feet apart at all times. But that guidance was a significant impediment to any full-bore reopening, because most schools could not maintain that kind of distance and still accommodate all their students and teachers. It also left many questions unanswered: How did masks and distancing and other strategies like opening windows fit together? Which were essential? Could some measures be skipped if others were followed faithfully?
The C.D.C. seemed incapable of answering these questions. From the pandemic’s earliest days, the agency had been subject to extreme politicization and troubled by what looked, at least from the outside, like pathological clumsiness. Scientists there had been far too slow to detect the virus, to develop an accurate diagnostic test for it or to grasp how fast it was mutating. Their advisories on mask-wearing, quarantine and ventilation had been confusing, inconsistent and occasionally dead wrong. And during the Trump administration, agency leaders stood by while politicians and political appointees repeatedly undermined the agency’s staff. Scientific reports were blocked or altered. Quarantine powers were used to achieve political goals. Dangerous strategies for controlling the virus were not only promoted but actively employed. And state and local leaders were left to fend for themselves — to decide which of the agency’s recommendations to follow or modify or ignore.
The Covid Rapid Response Working Group, at the Edmond J. Safra Center for Ethics at Harvard, was one of several independent organizations that stepped in to help fill the gap. In the last year, these groups, run mostly out of academic centers and private foundations, have transformed reams of raw data — on transmission rates and hospitalization rates and death tolls — into actionable intelligence. They have created county-by-county risk-assessment tools, devised national testing strategies and mapped out national contact-tracing programs. In many if not most cases, they have moved faster than the C.D.C., painting a more accurate picture of the pandemic as it unfolded and offering more feasible solutions to the challenges that state and community leaders were facing.
When it came to the question of school reopenings, the Covid Rapid Response Working Group found itself going in circles. It was possible to control the spread of infections indoors; hospitals did it all the time. But when it came to schools, where the risk was much lower, everyone seemed to be at a loss. Why was that? What, exactly, made hospitals so different? “It makes no sense,” Thomas Tsai, a surgeon in the group, said. “Hospitals are not special. We don’t use magic. We just use basic infection control.” He explained what that meant: Teams of specialists create detailed protocols based on what the risks are and what the evidence says about how to avoid those risks. They update and adjust their practices as information evolves, and they conduct routine trainings with all hospital staff members (not just doctors or administrators) so that everyone knows exactly what to do. It was all very standard, he said. It did not even require an advanced degree, just a basic understanding of disease transmission, an awareness of a given hospital’s particular situation and a few people who knew how to connect the two and could train others to do the same. School systems did not have any of those tools, Danielle Allen, head of the Safra Center, pointed out. Nor did they have a clear path to making those connections. But maybe the group could chart that path for them? What would that take?
From the pandemic’s earliest days, the C.D.C. was subject to extreme politicization and troubled by what looked, at least from the outside, like pathological clumsiness.
Allen and her colleagues had already published at least one report on school safety, but when the Biden administration set a national goal of opening most schools by May 1, they partnered with a larger initiative, the Covid Collaborative, and formed a task force to address the issue of infection control. They parsed research, brought educators and other stakeholders together for sustained dialogue and, by late April, produced a detailed road map: Most schools could remain open for full-time in-person instruction even when the virus was circulating at high levels in the community, as long as they had good infection-control programs. Beyond a few key elements — including masks, proper ventilation and contact tracing — the contours of such programs would depend almost entirely on the individual school. What was the ventilation system like? How many students did it have? Did its windows open easily?
The road map explained how to devise and implement an infection-control plan, making clear who should take charge of what and how to get federal funding and offering suggestions, like establishing “situation rooms,” for managing challenges on the ground. It was, in short, everything that the C.D.C. guidance was not. And it was the product of a strategy that felt obvious and simple: The task force engaged stakeholders in a sustained dialogue, incorporated input from schools and factored practical realities, like the need to move quickly, into its recommendations.
Allen disputes the notion that she and her colleagues are doing work that the C.D.C. itself should be doing; in fact, she says, the task force and the federal agency have worked closely together. But she acknowledges that the interdisciplinary approach of the collaborative — it consists not only of doctors and public-health professionals but also of political scientists, economists, lawyers and M.B.A.s — enables it to spot problems that the federal institution can’t necessarily see. Infection control is a good example. “This is not a public-health problem, or even a medical one,” she says. “It’s an issue of organizational capacity.” The C.D.C. is not equipped to identify organizational issues, let alone resolve them.
The agency has made clear improvements under the Biden administration. Among other things, the incoming director, Rochelle Walensky, has made a point of bringing agency guidelines back under the exclusive domain of agency staff members. But those guidelines are still confusing, the agency’s messaging is still deeply muddy and communities across the country — and school districts, especially — are still struggling with next steps. Schools are reopening, but vaccines have yet to be approved for children younger than 12. No one can say for sure how long immunity to the virus might last, or what will happen when it fades.
What is clear, as the second pandemic spring tilts into the second pandemic summer, is that efforts like the Covid Collaborative will be needed for some time to come. “We did not expect to be doing this work once the new administration took over,” Stefanie Friedhoff, a professor of public health at Brown University and a member of the collaborative, told me recently. But as the rest of the nation is learning, the former president was not the C.D.C.’s only — or even its biggest — problem.
For most of the last seven decades, the C.D.C. has stood as the world’s premier public-health institution — so much so that counterpart agencies in other countries are often called C.D.C.s, even when the abbreviation means nothing in their native languages. The agency invented disease surveillance as we know it, helped lead the (successful) quest to eradicate smallpox, initiated the (ongoing) fight against H.I.V. and beat back Ebola — more than once. Its heroics have been the stuff of novels and movies and harrowing nonfiction best sellers. Americans took for granted that the C.D.C. would be engaged and quick in a crisis; that it was well funded and equipped with modern technology; that it had, or could quickly get, comprehensive data on diseases of concern; and that it knew how to translate that data into sound guidance in a crisis. Wasn’t that, at least partly, how bird flu, swine flu and a thousand other nameless plagues were prevented from decimating the American masses?
The agency may be just one cog in the nation’s public-health apparatus, but it is a crucial one. In an ideal world, its edicts would hold sway not only over schools but also nursing homes, prisons and meatpacking plants. It would guide elected officials and private institutions alike through not just global pandemics but all manner of public-health threats: food-borne pathogen outbreaks, the opioid crisis, gun violence. In an ideal world, its efforts would succeed, more often than not, at keeping people safe and helping them stay healthy. This is the C.D.C. we need. But as the last year has made clear, it is not the C.D.C. we have.
The C.D.C. we have is hardly a monolith: Some of its many pockets are bursting with innovation; others are plagued by inertia. But scientists and administrators who have spent decades working with and for the agency say that three problems in particular affect the whole institution: a lack of funding, a lack of authority and a culture that has been warped by both. Some of these problems come down to politics, but most are a result of flaws in the agency’s very foundation.From its inception in 1946, the agency’s existence hinged on its officers’ ability to sell its services to state leaders who were leery of federal interference, and to lawmakers who often struggled to appreciate the point of epidemiology. They did this by taking on the jobs that no other agency wanted, quickly developing a reputation for being the first to arrive at any given emergency, the last to leave and the one with the most cutting-edge technology. But with each success, a pattern emerged. The agency received an infusion of funding in times of crises, and praise and more responsibility when it saved the day. But it was often starved of resources the rest of the time and rived by internal conflicts over how to apportion the money it did receive. “Everybody was trying to establish his own thing,” the historian Elizabeth Etheridge writes in “Sentinel for Health,” her biography of the agency. Each branch had strong leadership, but none of those strong leaders were great at working together.
Today the C.D.C. is both sprawling in its reach and extremely constrained in what it can do. It consists of more than a dozen centers, institutes and offices and employs more than 11,000 people in all, in a gargantuan roster of public-health initiatives — not just infectious-disease control but also chronic-disease prevention, workplace safety, health equity and more. A majority of that work is concentrated in the agency’s Atlanta headquarters, but there are also C.D.C. labs and programs across the United States and C.D.C. operations around the world. Despite that scope, the agency has little authority. Its officers can’t compel individual states to participate in its initiatives, for example, nor to include C.D.C. scientists in local outbreak investigations, nor to share much data with the agency — even in the middle of a pandemic. It can’t force people to wear masks, or local leaders to close (or open) schools or other establishments. The agency did try to halt evictions during the height of the pandemic, but that edict faced such a barrage of court challenges that its fate remains uncertain even now. Aside from a few quarantine powers, the most the C.D.C. can do is issue guidance, which is unenforceable and — as the past year has repeatedly shown — just as likely to be weaponized as meaningfully employed.
Insiders say three problems affect the institution: a lack of funding, a lack of authority and a culture that has been warped by both.
The C.D.C.’s multibillion-dollar annual budget is both too small — it has barely kept pace with inflation in the last two decades — and subject to too many restrictions. Around half of the agency’s domestic budget is funneled to the states, but only after passing through a bureaucratic thicket. There are nearly 200 separate line items in the C.D.C.’s budget. Neither the agency’s director nor any state official has the power to consolidate those line items or shift funds among them. “It ends up being extremely fragmented and beholden to different centers and advocacy groups,” says Tom Frieden, who led the C.D.C. during the Obama administration. That lack of flexibility makes it extremely difficult to adapt to the needs of individual states.
This funding system also hobbles emergency-response efforts, because there is no real budget for the unexpected. When something like swine flu or Zika or Covid-19 emerges, the agency must rely on Congress for additional resources — almost always a large, one-time infusion that can’t be used for longer-term planning — and then deploy those resources, quickly, in the middle of the crisis. Public-health experts like to call this “building the plane while flying the plane.” In the past, they say, it made the C.D.C. scrappy and fostered an esprit de corps among its officers that helped the broader operation thrive. But in recent decades, these privations appear to have done the opposite. “I’d go into a meeting and say, ‘What needs to be done?’” William Darrow, a former chief of the agency’s Behavioral and Prevention Research branch, told me. “And they’d give me a five-point chart. And then I’d ask, ‘Well why aren’t we doing those things?’ And it was all hemming and hawing about whether we could convince the states, or get top leadership to support it, or if it would be controversial.”
The C.D.C. is resistant to change, slow to act and reluctant to innovate, according to critics. The agency’s officers are overly reliant on published studies, which take time to produce; and are incapable of making necessary judgment calls. Agency departments are also deeply siloed. “We are really good at drilling down,” Darrow says. “But terrible at looking up and reaching across.” Ongoing tensions between the C.D.C. and its parent agency, the Department of Health and Human Services, have exacerbated these tendencies, insiders say, and the agency is constantly fending off H.H.S.’s efforts to usurp some of its portfolio. “There are a lot of very good people there,” Bill Hanage, a scientist who studies the evolution of infectious diseases at the Harvard T.H. Chan School of Public Health, says. “But when your resources are constantly constrained like that — when you’re constantly told no — that forces you into a defensive crouch.”
Long before the novel coronavirus began its march across the globe, scientists at the C.D.C. understood that the United States was well behind where it should have been when it came to identifying and monitoring infectious-disease threats. In 2014, the agency created the Office of Advanced Molecular Detection to begin closing this gap, but the effort faced several hurdles. New technology required much more advanced computer infrastructure than the C.D.C. or any of the nation’s public-health labs had. It also required the kind of work force, highly skilled in bioinformatics and genomic analysis, that you had to compete with the private sector to get. And it necessitated a mountain of data-sharing agreements between the C.D.C. and the states that were tricky and laborious to negotiate. “We are talking about a 50-way dialogue,” says Duncan MacCannell, lead scientist at the O.A.M.D. “Anything you want to do or change has to be negotiated with each state separately, and at the end of the day, they can still say no to you.”
Just about every public-health lab in the nation had at least some genomic-surveillance capacity by the time the coronavirus pandemic erupted. But most of that capacity was concentrated in the foodborne-pathogen division, and despite MacCannell’s best efforts, it was difficult to adapt many of those programs to meet the new crisis. Several months into the pandemic, when SARS-CoV-2, the virus that causes Covid-19, was well on its way to becoming the most-sequenced virus in human history, the United States was contributing hardly anything to that effort. And when it came to tracking new variants in the United States, health officials were flying blind.
MacCannell says he did everything he could think of to get a handle on the crisis: He and his team devised protocols to help public-health labs start new sequencing programs; developed plans for partnering with commercial labs, which have much greater capacity overall; and set up a consortium of scientists across the country to collaborate and pool resources. But those efforts were mere stopgaps, he acknowledges, and in any case the approval and funding needed to get them off the ground was delayed for many months. “There was a big gap between what we expected to happen and what we actually saw unfold,” MacCannell says. “Not only at the federal level, but at every step down from there.”
Genomic surveillance is one of many shortcomings plaguing the disease-surveillance system over which the C.D.C. presides. Those shortcomings have been invisible to anyone not working in the field, because at first blush the system makes sense. Public-health emergencies that are identified at the local level are reported up to state health departments and then, when necessary, passed on to the C.D.C., where officials analyze the information, issue guidelines and coordinate federal response efforts. There’s a special system for the 120 or so “notifiable diseases” — like Lyme disease and hepatitis — which everyone agrees are serious enough to warrant immediate action, and another for “syndromic surveillance,” in which epidemiologists can search real-time emergency-room data for symptoms of concern. But beneath that broad structure, chaos often reigns.
As the coronavirus grew into a full-blown pandemic, C.D.C. scientists struggled to answer even basic questions about what the disease looked like or where or how it was spreading.
The system itself is deeply disjointed, and the technology that underpins it is less sophisticated than that found in many American households. State health departments are not connected to one another in any meaningful way, nor are hospitals, clinics, laboratories and local health agencies. The C.D.C. maintains more than 100 separate disease-specific computer systems (a byproduct of the agency’s funding silos), and many of those can’t interface with one another. Crucial data is often shepherded from health care facilities to health departments through a tortured process that can involve handwritten notes, manual spreadsheets, fax machines and snail mail. It’s not uncommon for basic information like race, ethnicity, age or address to be missing from clinical reports. It’s also not uncommon for those reports to languish at the state or local level without ever making their way to federal officials. Even the most serious diseases, which are supposed to be logged within 24 hours of detection and reported to the C.D.C. in a timely way, are not necessarily sent up that chain in any systematic manner. “It depends on the jurisdiction,” Janet Hamilton, executive director of the Council for State and Territorial Epidemiologists, told me recently. “Some regions have robust public health departments and good reporting records, and others don’t.”
Disease monitoring is also hampered by the uneven patchwork of surveillance programs across the country and the need to negotiate data sharing and other agreements separately with each state. Antibiotic resistance, respiratory infections and other pathogens are tracked robustly in some areas and very poorly or not at all in others (respiratory infections, for example, are more heavily monitored in the Four Corners region than in other places), in part because the agency does not have the ability, or authority, to get all the data it needs from every community. Hanage likens the entire apparatus to a Rube Goldberg machine. “There’s no central anything,” he says. “Random patchwork collaborations were initiated and transformed and now have an outsize impact on our understanding of public health. That’s not to criticize the people who made those things, because the alternative might have been nothing. But the result is something with no rational plan behind it.”
The gaps make it difficult to track even well-known diseases and nearly impossible to get a handle on new ones. During a recent E. coli outbreak involving romaine lettuce, officials were forced to base billion-dollar, life-or-death decisions about which products to pull from which shelves in which regions of the country on data that was being screen-shotted and text-messaged to epidemiologists and health officials. During the vaping injury (or Evali) outbreak in 2019, doctors faxed hundreds of pages of medical records, for some cases, directly to local health departments. Epidemiologists could barely process the data in that format, let alone parse it for clues. “There is no ready-made process for when something like vaping injury or Zika or SARS-CoV-2 pops up,” Hamilton says. “There are 64 separate public-health jurisdictions in this country, and each one will have its own ideas about what information to collect and how to share it.”
In 2020, as the coronavirus grew from a few isolated outbreaks into a full-blown pandemic, C.D.C. scientists struggled to answer even basic questions about what the disease itself looked like or where or how it was spreading. “We were being asked who is being hospitalized, who are the severe cases, what are the characteristics, and it was so frustrating,” Anne Schuchat, the agency’s deputy director, told a panel of colleagues last fall. “People were going out to manually review charts. I felt like, well, the health care sector has this data. It’s sitting in their system. Can we work with them?” The agency could not keep reliable track of testing or case rates across the country. It also struggled to update hospital data, which includes things like bed availability and ventilator supply; the Trump administration hired a private contractor to assemble that data, amid accusations of political favoritism. And when multiple vaccines were finally deployed, the agency was not able to monitor supplies or accurately keep tabs on waste.
Covid is the biggest crisis the C.D.C. has faced, by far, in all its history. It is exactly the kind of threat for which the agency was created in the first place. But when it finally arrived, by most accounts, officials there had very little to meet it with.
By mid-May of this year, the nation had cleared what felt like a dangerous bottleneck. The dreaded fourth surge in cases had not materialized, even as it became clear that more-contagious variants were spreading across the country. Vaccination rates were climbing steadily, despite vaccine-hesitancy; and case counts, hospitalizations and daily death counts were trending downward just about everywhere. Yet the C.D.C. struggled to grasp this new reality. Agency officials were exceedingly slow to update guidelines, and then conservative, awkward and confusing when they finally did. They waited months before saying anything at all about the impact that vaccination might have on various restrictions. When they finally allowed that people who were fully vaccinated could resume overseas travel, Walensky, the agency’s director, undermined that advice almost immediately by saying that personally, she advised against it.
A few weeks later the agency updated its mask guidelines: Fully vaccinated people should wear masks in all indoor settings and in some outdoor ones, and unvaccinated people should wear masks almost all the time, including outside, except for when walking or jogging alone. At summer camp, the agency said, everyone should wear a mask, at all times, except when swimming or eating. Critics were both bewildered and frustrated by these edicts. It had been clear for many months that outdoor transmission was exceedingly rare, and most experts agreed that fully vaccinated people were highly unlikely to contract the virus and even less likely to pass it on to others if they did. Why was it taking the C.D.C., the supposed leader in global public health, so long to acknowledge what everyone else could see so clearly?
Lawmakers — Republicans especially — denounced Walensky over the lag. At one hearing, Bill Cassidy of Louisiana warned that the agency was at risk of becoming completely irrelevant to the American public. “I always considered the C.D.C. to be the gold standard,” Senator Susan Collins of Maine told Walensky at the same hearing. “I don’t anymore.” A few days later — just weeks after the C.D.C. had told everyone to keep their masks on — the agency announced yet another update: People who were fully vaccinated could ditch their masks in most settings, including in most indoor settings.
Critics took issue with this move too. The old guidelines were too strict, they said, but these were too lenient and failed to factor in the realities of human behavior. How would retail workers distinguish among vaccinated and unvaccinated patrons? What should immunocompromised people do, especially in workplaces where masks and distancing would not be enforced? And what would happen now in communities with very low vaccination rates? Even the C.D.C.’s staunchest defenders wondered aloud why the agency had not taken a more sensible middle path between the two extremes. Why not suggest scrapping outdoor mandates altogether, given how rare outdoor transmission seemed to be? And then maintain indoor masking edicts or tie them to vaccination rates, or even transmission levels, in individual communities?
It’s unclear how or whether any of these more practical questions factored into the C.D.C.’s decision-making. The Washington Post reported that White House officials pressed the agency about the implications such guidelines would have for businesses and people who could not be vaccinated, but could not get satisfactory answers. With some 35,000 new cases and more than 600 deaths still being logged nationwide every day, some of the agency’s own staff members had wanted to hold off on the update, according to the paper. Many scientists and public-health experts seemed to agree that it made sense to lift masking advisories as the agency had done, but even to them, the agency seemed to be operating inside a black box.
Why was it taking the C.D.C., the supposed leader in global public health, so long to acknowledge what everyone else could see so clearly?
Walensky maintained that as with all of the agency’s guidelines, its position on masks changed as the science behind them evolved. She cited a roster of new studies that she said had tipped the balance of evidence away from outdoor masking, and toward loosening restrictions for the fully vaccinated. And the C.D.C. pointed out that not even President Biden had been notified of the agency’s decision until a few hours before the announcement — proof that it was not being swayed by political considerations.
But even if the agency was governed exclusively by science, at least some of that science was flawed. Far fewer than 1 percent of coronavirus cases — fewer than one-tenth of 1 percent, by some estimates — have been contracted outdoors. The C.D.C. puts the risk at less than 10 percent, an order of magnitude higher. Walensky says the higher number comes from an aggregation of high-quality peer-reviewed research. But, as The New York Times has reported, those studies rely on an overly liberal interpretation of the term “outdoors.” They included almost any setting that had an outdoor component: Workplaces and educational settings counted as outdoors if people sometimes went outside to a courtyard or play area.
It was not until late this spring that the agency finally acknowledged that the virus was airborne and that people did not necessarily need to be in close contact to infect or be infected by one another, something many scientists, not to mention average citizens, had long since concluded. Here, too, the delay came down to a flawed interpretation of published studies and a blind eye toward real-world experience. For the better part of a year, C.D.C. scientists relied on research that tried to culture the virus from air samples — a notoriously difficult feat, even for viruses like measles that are known to be airborne. In the meantime, they overlooked ample evidence — including multiple superspreader events that its own epidemiologists had tracked — that the virus could be carried on air currents well beyond six feet.This belated acknowledgment of how the virus is transmitted has huge implications for pandemic-response efforts: For an airborne virus, health officials should prioritize ventilation, especially in factories, congregate facilities and other high-risk settings. But the agency’s update was made with very little fanfare and did not come with new instructions for how any of those entities should proceed. “They fuss over outdoor masks, which most of us agree have zero impact on public health or safety,” says Céline Gounder, an infectious-disease doctor and former member of Biden’s transition Covid advisory board, “but ignore this other very obvious, much more pressing thing.”
This spring, the Biden administration issued a proposed budget that included the C.D.C.’s biggest funding increase in nearly two decades. And in recent months, the agency received billions of dollars in Covid-19 supplemental funding that has been used for long-overdue data-modernization and genomic-surveillance initiatives. Since at least February, Walensky has appeared at multiple press briefings each week, as a key member of the president’s Covid-19 response team. She has also held a series of “all-hands meetings” with C.D.C. staff members where attendees say she renewed the agency’s commitment to health equity and hinted at the need for broader reforms within the agency. “It feels like we’re finally starting to move forward,” a senior C.D.C. official, who asked not to be named discussing the agency, told me in April.
In May, both Schuchat and Nancy Messonnier, the long-serving director of the C.D.C.’s immunization center, resigned from the C.D.C. Some agency staff members and alumni I spoke with lamented these departures. Schuchat especially had attained an aura of celebrity in her 30 years with the United States Public Health Service. She had served as deputy director under three administrations and presided over scores of high-profile outbreak investigations, and her institutional memory is unrivaled. But some said that such resignations were necessary for the C.D.C. to move forward, and that if anything, a greater purge of top leadership was warranted. How could the agency reform itself if the people who built its current culture and set its institutional priorities were still running things?
Others pointed out that personnel changes were no substitute for the much bigger fixes that were needed — starting with the agency’s own culture. “For years, we have managed to muddle through crisis after crisis, thanks to some luck and to some of the truly brilliant people that we have here,” the senior official told me earlier this year. “But those wins have been a double-edged sword, because now our reputation exceeds our capacity, and people think we can do all these things that we can’t actually do. And we have sort of internalized that and become deluded ourselves, instead of reflecting on how we need to improve.” Like other agency insiders I spoke with, he was deeply anxious about the C.D.C.’s future and adamant that any reckoning would have to go beyond the obvious crisis of the previous administration. “We have a chance to rebuild this institution so that it works the way we want it to,” he said. “But we have to start by acknowledging what’s really broken.”
Many scientists I spoke with insisted that the biggest barrier to modernizing the C.D.C. was the agency’s own lack of imagination. New technologies capable of tracking pandemic disease through wastewater, for instance, or through human blood are promising and could revolutionize the fight against global disease threats — if only agency scientists would open their minds and embrace them. But such technologies are difficult to imagine in a system that still relies on fax machines.
‘You can’t starve and neglect something over and over for decades and then expect it to function perfectly in a crisis.’
Each fresh crisis brings new resolve to modernize the system, but that resolve usually evaporates before progress can be made. And when funds are available, public health tends to lose out to other interests. In 2010, for example, when Congress appropriated billions of dollars through the Affordable Care Act to upgrade the nation’s electronic medical record systems, just about all of the money went to health care providers, not public-health departments. In 2019, when a consortium of public-health groups asked Congress for $1 billion to be routed through the C.D.C. over the next 10 years to upgrade the public-health data system, lawmakers gave them $50 million. By then, the novel coronavirus had almost certainly made its way into several states, but owing partly to insufficient surveillance efforts, it would be months before anyone realized it.
One thing most experts seem to agree on is that the agency’s budget — both the amount of money it receives and the mechanisms by which it is allocated — needs an overhaul. Fiscal insecurity makes it difficult for the agency to be bold or innovative, to build strong relationships or to lead in a crisis. But the history of attempts to fix these problems is long and littered with failure. In 1983, William Foege, the agency’s director at the time, advised Congress to index a portion of total health care spending and reserve it for public health. Lawmakers did not heed his advice. In the early 2000s, Julie Gerberding tried to change the agency’s funding structure so that states could have more flexibility in how they spent C.D.C. dollars, to no avail. And a decade later, Frieden tried to do the same. The only thing he accomplished, he says, was to “make everyone really angry” with him. “Each of those line items is protected by a fierce constituency that fought to get it there in the first place,” Gerberding says. New suggestions are again percolating. Almost every former director I spoke with had at least one proposal or plan for how to fortify the agency by revising its funding structure. But it remains to be seen whether any of them can gain currency.Many have also argued that the agency should be granted more authority — during public-health emergencies, at least. If the C.D.C. could compel states to share key data through a central, standardized system, or to sequence a certain portion of viral genomes, the nation might be able to develop a picture of a given crisis much more quickly and accurately. And if the agency could enforce certain edicts at the outset of an outbreak, officials might be able to stave off a full-blown epidemic. “We need to come up with a set of no-regret interventions,” Hanage says. “Like, if you have credible evidence of a virus with certain properties, you enact certain measures, like enforced quarantines, regardless. Not to stomp it out, but to slow it down long enough to get other measures in place.” The politics of such a shift might prove insurmountable. “If there was a proposal to give C.D.C. all the same powers that states have for public-health emergencies, 50 governors would immediately oppose it,” Foege told me (in fact, several states are pressing right now to curb the powers of public-health agencies, not expand them). But the specter of 50 separate coronavirus responses, and more than half a million deaths nationwide, has convinced some public-health professionals that it’s time to give the idea serious consideration.
In truth, the C.D.C. and the states each deserve a share of the blame for the disconnect between them. “State and local health departments often feel like C.D.C. is clueless about the challenges they face and the realities of their work,” Frieden says. “And they are not entirely wrong in that.” But while state leaders complain that the C.D.C. is clueless, and occasionally make a show of flouting the agency’s guidelines, some can also be obstinate about sharing data and communicating with the agency — even when it’s in their own best interest. “Sometimes we ask for info, and they just say they can’t give it to us,” the senior C.D.C. official told me. “We don’t know if they are underresourced, or they just don’t want to, or what — because they don’t tell us.”
Frieden, who served as New York City health commissioner before his stint as C.D.C. director, says that one way to bridge this divide might be to create an exchange program of sorts, where thousands of C.D.C. staff members are embedded in state and local health departments for two-to-five-year periods. “In time, you’d have a whole cadre of public-health experts, and a common vision between the C.D.C. and state health departments,” he says. “You’d also have a much stronger public-health system overall.”
Of course, true reform will require more than money or new laws or even a revived spirit of innovation. It will require a reconciliation of sorts: The C.D.C. will have to regain the nation’s trust. The nation will have to acknowledge the limits it imposed on the agency, both implicitly and explicitly, from the outset. And both sides will have to reckon with a fundamental but inconvenient truth: Public health can never fully divorce itself from politics, because public health is an inherently political endeavor. It involves more judgment calls than absolutes and requires trade-offs and public acceptance to work.
In other words, not every failure of pandemic response can be pinned on the C.D.C. “There has been a real pile-on against the C.D.C. in the past few months,” Frieden told me in early June. “Did they fall down on some things? Yes. But they have also done a lot of good work that’s been overlooked. And you can’t starve and neglect something over and over for decades and then expect it to function perfectly in a crisis.”
In retrospect, it seems clear that only a strong C.D.C. — a well-funded, well-run federal authority, grounded in science and resistant to political pressure but also mindful of lived reality — could have rescued American policymakers from the worst of their Covid confusion. And only a stronger C.D.C. stands a chance of correcting these errors when the next pandemic comes along. But the federal agency is just one part of a much larger system, and other components of that system must work properly — and together. For much of the last year, they have not.
Federal agencies like the Department of Education have not stepped in to help schools confront the challenges of infection control, for example. And while many communities have made heroic efforts to beat the virus back, state and local officials have not always done as much as they could to build trust or secure community support for needed measures. Too often, they fell prey to political bickering and wielded data points as weapons instead of as tools to improve safety. Fear and frustration have prevailed as a result, even as the pandemic wanes — and especially when it comes to schools. While some parents rage over mask mandates and contact-tracing regimes, others say they won’t return or send their children back, even with every precaution in place, until every last person is vaccinated. The fault lines of this divide are familiar, but somehow knowing where they lie has not helped the nation avoid them.
The C.D.C.’s institutional cautiousness and muddy messaging have not helped. “The C.D.C. is like an elephant turning around in a camp tent,” Allen says. “It does not realize that when it turns all these other things have to turn around it.” But the problem is much bigger than messaging or guidelines. The U.S. public-health apparatus is vast and unwieldy. Its components are supposed to work closely together but are instead disconnected from one another, and there is little awareness of this problem or of the impact it has on broader response efforts. Neither the C.D.C. nor the entities it serves seem to have an understanding of what federal disease control is supposed to do, or what the limits of the current system actually are. “C.D.C. updates its guidelines, and half of America thinks that means the rules have changed,” Allen says. “But C.D.C. does not make the rules, states and cities do.”’
Only a stronger C.D.C. stands a chance of correcting these errors when the next pandemic comes along.
Without that basic understanding, nuanced discussion has been difficult, and rare. “We’ve spent a whole year debating things like six feet versus three feet, and masks versus no masks,” Friedhoff, from the Covid Collaborative, told me. “But the answers to these questions are totally context-dependent. The way you layer infection-control measures in a school depends on what your building looks like, how many students you have and so on.” That, she says, is the understanding that public-health groups need to instill in educators, business owners and average people. But so far, it has been lost in all the noise.
A perfect case study is Manatee County, in western Florida, which decided to open its school doors to full-time in-person instruction in January. Kevin Chapman, the district’s strategic planning director, relied heavily on the C.D.C.’s guidance. “It was the only thing we had to go by, the only authority or expertise we could lean on,” he says. The guidelines were hardly perfect: They appeared to have been written by medical professionals who had never set foot in a school. And the district had no meaningful support when it came to translating them. The state’s governor, Ron DeSantis, routinely undermined the C.D.C. in his remarks, which by extension seemed to throw the efforts of Chapman and his colleagues under suspicion too. But the team did the best they could. They set up an operations center, educated themselves in the delicate science of contact-tracing and worked with their local health department to hew as closely as possible to what the federal agency had laid out.
They managed to keep the virus at bay. There were no school outbreaks and no closures between January, when schools reopened, and late May, when the school year finally ended. But even so, the district plans to abandon almost all of its current protocols when the next school year begins: no masks, no contact tracing and none of the other edicts that have helped keep the virus in check. Chapman worries that this is too much, too soon, but his team has little recourse. DeSantis has lifted the state mask mandate, and for weeks, a contingent of vocal parents crowded into school-board meetings to demand that the school district follow suit. Never mind that the C.D.C. quickly clarified that its loosened guidelines didn’t apply to schools. “They yell and threaten us,” Chapman says. “They tell us that it doesn’t matter what the C.D.C. says. That if DeSantis has lifted the mask mandate, schools should do the same.”
Friedhoff worries that with schools opening or staying closed based on political considerations, a broader opportunity is being missed. “We have a chance right now to make good infection control and healthier buildings a part of school culture,” she says, “the same way that mental health and healthy eating have become part of that culture.” But that will only happen if school officials can absorb the right lessons from the last year.
The same is true of state and local governments, and of lawmakers who set the C.D.C.’s funding and determine its powers. As the pandemic fades into the background of American life, it’s unclear whether the necessary changes will take place. Public attention and political resolve are likely to fade quickly as vaccination rates increase and case counts decline. That prospect troubles those who believe in the C.D.C.’s mission and who still have hope for its future. “I think the very worst thing that could happen now,” the senior C.D.C. official told me recently, “is for all of this to be forgotten and for everything to just go back to business as usual.”
https://www.nytimes.com/2021/06/16/magazine/cdc-covid-response.html?referringSource=articleShare
US private hospitals eye overseas expansion in search of vast profits
by Jordan Rau - Kaiser Health News - June 22, 2021
Foreign forays prompt questions about why US non-profit health systems are indulging in such nakedly commercial ventures
Across the street from the Buckingham Palace Garden and an ocean away from its Ohio headquarters, Cleveland Clinic is making a nearly $1bn bet that Europeans will embrace a hospital run by one of America’s marquee health systems.
Cleveland Clinic London, scheduled to open for outpatient visits later this year and for overnight stays in 2022, will primarily offer elective surgeries and other treatments for the heart, brain, joints and digestive system. The London strategy attempts to attract a well-off, privately insured population: American expatriates, Europeans drawn by the clinic’s reputation, and some Britons happy to pay. The hospital won’t offer less financially rewarding business lines, like emergency services.
“There are very few people out there in the world who would not choose to have Cleveland Clinic as their healthcare provider,” said chief executive Tomislav Mihaljevic.
Facing the prospect of stagnant or declining revenues at home, about three dozen of America’s elite hospitals and health systems are searching with a missionary zeal for patients and insurers able to pay high prices that will preserve their financial successes.
For years, a handful of hospitals have partnered with foreign companies or offered consulting services in places like Dubai, where western-style healthcare was rare and money plentiful. Now a few, like the clinic, are taking on a bigger risk – and a potentially larger financial reward.
But these foreign forays prompt questions about why American non-profit health systems, which pay little or no tax in their home towns, are indulging in such nakedly commercial ventures overseas. The majority of US hospitals are exempt from tax because they provide charity care and other benefits to their communities. Non-profit hospitals routinely tout these contributions, though studies have found they often amount to less than the tax breaks.
Despite their tax designation, non-profit hospitals are as aggressive as commercial hospitals in seeking to dominate their healthcare markets and extract as high prices as they can from private insurers. Though they do not pay dividends, some non-profits amass large surpluses most years even as more and more patients are covered by Medicare and Medicaid, the US government’s insurance programs for the elderly, disabled and poor, which pay less than commercial insurance.
Cleveland Clinic, one of the wealthiest, ran an 11% margin in the first three months of this year and paid Mihaljevic $3.3m in 2019, the most recent salary disclosed.
The advantages of international expansion for their local communities are tenuous. Venturing overseas does not provide Americans with the direct or trickle-down benefits that investing locally does, such as construction work and healthcare jobs. Even when hospitals abroad add to the bottom line, the profits funneled home are minimal, according to the few financial documents and tax returns that disclose details of the operations.
“It’s a distraction from the local mission at a minimum,” said Paul Levy, a former chief executive at Boston’s Beth Israel Deaconess Medical Center and now a consultant. “People get into them at the beginning thinking this is easy money. The investment bankers get involved because they get the financing, and the senior faculty get on board and say, ‘This is great; it means I can go to Italy for two years’ – and there’s not a real business plan.”
There are financial hazards. For instance, Cleveland Clinic has warned bondholders that its performance could suffer if its London project does not launch as planned. There are also risks to a system’s reputation if a foreign venture goes awry.
Finance experts temper expectations that operations of overseas hospitals will have a major bearing on a system’s balance sheet. “Even though they do well, they’re small hospitals – they’re never part of the overall picture,” said Olga Beck, a senior director at Fitch Ratings. “It does help [the US operations] because it gives a global name and presence in other markets.”
Hospital executives say their foreign ventures provide an additional source of revenue, thus adding stability, and benefit the care of their hometown patients.
“As we go to different areas around the world, we learn and we continuously improve for all our patients,” said Brian Donley, chief executive of Cleveland Clinic London. He said the clinic has learned from UK practices more efficient ways to sterilize surgical instruments and perform X-rays.
One of the oldest foreign ventures is the organ transplant program the Pittsburgh-based non-profit system UPMC has run in the Italian city of Palermo since 1997, when Sicily’s government and Italian insurers realized it would be cheaper to perform those procedures there than continue to send patients to the US. Since then, UPMC’s Palermo facility has performed more than 2,300 transplants.
In this initial expansion, the US hospital was providing a highly specialized type of surgery – one that UPMC is renowned for – that was not available locally. But UPMC, one of the most entrepreneurial US health systems, didn’t stop there. In Ireland, UPMC owns a cancer center and provides care for concussions through sports medicine clinics. Since 2018, the system has acquired hospitals in Waterford, Clane and Kilkenny. They are staffed mostly by independent Irish physicians, but UPMC regularly sends over its leading US specialists to lend expertise, according to Wendy Zellner, a UPMC spokesperson.
UPMC has company in Ireland: in 2019, Bon Secours Mercy Health, a Roman Catholic system, merged with a five-hospital Catholic system there.
Over the past two decades, UPMC did advisory and consulting work in 15 countries but decided to narrow its involvement to four: Italy, Ireland, China and Kazakhstan, where UPMC is helping a university develop a medical teaching hospital. Charles Bogosta, president of UPMC International, said UPMC wanted to focus its efforts where it was confident it could improve the quality of care, bolster UPMC’s reputation and earn profit margins greater than its US hospitals do.
UPMC officials said the economics are favorable abroad because labor is cheaper and the mix of patients is heavily tilted toward those with commercial insurance, which pays better than government programs.
“What we’ve been doing overseas has been really helpful in addressing what everyone in the US is trying to do, which is come up with diversified revenue sources,” Bogosta said.
Even so, that extra revenue remains a small part of UPMC’s earnings. The health system’s foreign hospital business generated gross revenues of $96m, or 1% of UPMC’s $9.3bn total hospital revenues in 2019, according to a KHN analysis of a UPMC financial disclosure. Since that figure is before accounting for the costs of running the hospitals, taxes and other expenses, the actual profits the foreign hospitals might send back to Pittsburgh are much smaller.
In Ireland, where corporations are required to disclose audited financial statements, UPMC Investments Ltd, an umbrella group that owns the Waterford hospital operation and property, reported net profits of about a half-million dollars in 2019 on more than $47m in gross revenues.
In an email, Zellner said the Ireland statements “do not give you the totality of the picture in Ireland or International, where our results are far better than these documents would suggest”. UPMC declined to provide more detailed financial data.
But foreign ventures can misfire. “These partnerships can turn into nightmares, as Hopkins has learned,” Steven Thompson wrote in a 2012 article for the Harvard Business Review that described his observations as the founder and first chief executive of Johns Hopkins Medicine International, a for-profit venture jointly owned by Johns Hopkins Medicine and Johns Hopkins University.
Cleveland Clinic London is unusual in that US health systems rarely build a hospital abroad from scratch without a local partner. The clinic chose that more cautious approach with Cleveland Clinic Abu Dhabi, a 364-bed hospital owned by the Mubadala investment company that the clinic manages. It also has a consulting practice that is helping a Singapore healthcare company build a hospital in Shanghai.
Foreign enterprises appeal to the clinic because it has limited growth opportunities in Ohio, where the population is growing slowly and aging, meaning more patients are leaving high-paying commercial insurers for lower-paying Medicare. The clinic has expanded in Florida, acquiring five hospitals to take advantage of population increases and wealthier patients there.
The London project will have 184 beds and eight operating rooms. Donley said it will be staffed primarily by UK physicians, including ones who also work for the NHS.
“The clinic has a long track record of being able to execute on its strategies,” said Lisa Martin, an analyst at the bond rating agency Moody’s Investors Service. “The London project is obviously the biggest venture and the biggest financial risk that they’ve made abroad.”
https://www.theguardian.com/us-news/2021/jun/22/us-private-hospitals-europe-cleveland-clinic
The Potter Report: Death & Debt by Deductibles
by Wendell Potter - Tarbell - June 1, 2021
Congrats, America! Earlier this month you passed an annual milestone: Two days after Tax Day, you made it to… Deductible Relief Day!
What’s that? It’s the day where the average person with employer-based health insurance has spent enough on health expenses to finally meet their deductible.
Health insurance deductibles have been rising so rapidly (year after year after year) that the Kaiser Family Foundation decided to track the trend to show how severely Americans are getting ripped off (and sick). And it’s bad.
As you might guess, the Deductible Relief Day is being pushed further each year. In 2005, you had to wait until February 28. By 2009, you wouldn’t be popping champagne until March 18. In 2019, you waited two months more than that.
As the Kaiser Family Foundation noted, in 2009, the average deductible was $533 for a single person. In 2018, it was $1350. How? The insurance industry strategy of moving all of us into high-deductible plans (one of the many gross abuses I saw first-hand at Cigna) has paid off well for my former employers.
“Average enrollee spending on deductibles more than tripled between 2007 and 2017.”
In 2018, about 85% of covered workers were enrolled in a high-deductible plan, up from just 50% ten years earlier. Another way of looking at this: Average enrollee spending on deductibles more than tripled between 2007 and 2017.
And Kaiser didn’t look at people who buy their coverage on their own through the ACA exchanges. They’re in even *worse* shape. The Commonwealth Fund found that 40% of people in ACA plans are underinsured because of high out-of-pocket charges – and many likely never meet their deductibles.
As a result, millions of Americans are not going to the doctor or picking up prescriptions. Insurers LOVE that. It’s far fewer claims to pay! It’s why, when many other businesses went belly up during COVID-19, insurers made record profits: medical treatment was less accessible!
President Biden, are you paying attention to this? You must.
Millions of people WITH insurance who voted for you, including folks on Obamacare, CAN’T USE IT because of deductibles! Insurers can charge families up to $7,200 before they’ll pay a dime. It keeps going up. Every. Single. Year.
No wonder more and more Americans with insurance are turning to GoFundMe or bankruptcy court. It’s not just the premiums you gotta worry about, Joe. Deductibles are eating us alive. You and Congress need to pay attention before NO Americans can meet their deductibles.
https://tarbell.org/2021/06/the-potter-report-death-debt-by-deductibles/
The Three Trends Fueling Health Insurers’ Frightening Growth and Profitability
The top three trends that have enabled insurers to rise to the top tier of American corporations and report record-breaking profits quarter after quarter.
by Wendell Potter - Tarbell - June, 2021
2020 was the year of the worst pandemic of our lifetime, and it turned out to be the most profitable year ever for America’s health insurers, even as many hospitals and physician practices were struggling to stay afloat. Unless current trends change and cause some unexpected reversal of fortune, 2021 will likely bring more of the same — if not bigger profits — for health insurers.
In this article, I’ll identify the top three trends that have enabled insurers to rise to the top tier of American corporations and report record-breaking profits quarter after quarter. If you’re wondering, those qualifiers are not meant to be compliments.
But first, here’s some context to set the stage.
If it ain’t broke…
Considering how well the status quo is working for health insurers, you can understand why they are spending more and more of their premium revenue on lobbying and PR efforts to kill or weaken health insurance reform proposals, especially the one championed by President Biden during his candidacy: establishing a public option to compete with private insurers.
Health insurers talk a good game about “choice and competition,” but their actions in both the marketplace, in which consolidation has created companies far bigger than just a decade ago, and the political arena, belie their talking points. During the first quarter of this year, the industry’s biggest trade group, America’s Health Insurance Plans, spent more money on lobbying in Washington than any prior 3-month period. Centene, one of the industry’s newest and now biggest players (thanks to a string of acquisitions), spent a whopping 80% more between January and March of this year than during the same period a year ago.
With diminishing competition, the big for-profit insurers have been able to use the premium and fee increases they demand from customers to bulk up, transform themselves to the point that the terms “insurer” and “payor” are antiquated and no longer descriptive, and erect nearly impenetrable barricades to keep would-be reformers and competitors at bay. The same can be said of the 35 nonprofit Blues as many dominate their individual markets, as well as the political landscape in their individual markets.
These companies’ aggressive push for vertical integration (e.g., massive M&A activity) has catapulted half of the big six (Anthem, Centene, Cigna, CVSHealth, Humana, and UnitedHealth Group) into the top 20 of the Fortune 500 in recent years — and two of them into the top 10. CVSHealth, Aetna’s parent company, now ranks #5, right behind Amazon, Walmart, Apple and Exxon Mobil. UnitedHealth Group is #7, just below Berkshire Hathaway. Cigna, which was #141 on the list when I left the company’s employment in 2008, is now #13.
Now onto the turbo-charged, profit-enhancing business practices driving pandemic profits
The trends that have made some of the biggest contributions to health insurers’ unprecedented growth and profitability were well underway in 2010 when Congress passed the Affordable Care Act, which conventional wisdom (even on Wall Street) held would put a big crimp in insurers’ profit margins. While the ACA did make several common industry practices illegal — notably their refusal to sell coverage to people with preexisting conditions (or charging them more than most could afford) and spending less than 80 percent of premium revenue on claims — it didn’t deter insurers from going on buying sprees and turbocharging other, still legal, profit-enhancing business practices.
Trend #1: Vertical Integration
When I left the industry a little more than a decade ago, most of the companies’ M&A activity was still horizontal, meaning insurers were buying or merging with competitors. When Humana recruited me in 1989, it was better known in the managed care space than UnitedHealth was at the time, even though Humana hadn’t yet shed its even better-known hospital division. But UnitedHealth was busy quietly buying relatively small local and regional health plans. It entered the big leagues in 1995 with its acquisition of Travelers’ and MetLife’s group health businesses. Numerous other acquisitions followed. In more recent years, with fewer competitors left to buy, UnitedHealth has shifted its M&A strategy (as have most of the other bigs), making it no longer horizontal M&A, but vertical integration, meaning the company is now deep into healthcare delivery. It’s fastest growing and most profitable division these days is Optum, which not only operates a huge PBM but also outpatient facilities, including kidney dialysis giant DaVita, and numerous physician practices. It surprised even me to learn that UnitedHealth is now the country’s biggest employer of doctors — more than 50,000 at last count with plans to add another 10,000 this year.
UnitedHealth’s competitors had no choice but to follow suit and go vertical. Cigna went big with its 2018 acquisition of Express Scripts. Aetna is now a big part of a company that operates not only a huge PBM but 10,000 retail drug stores, many of which now employ doctors and nurse practitioners in their walk-in “MinuteClinics.” Anthem and Humana — and to a lesser extent Centene — have also become more diversified companies by entering the provider space. This change in M&A strategy obviously has enormous implications for the country’s doctors and hospitals.
Trend #2: Changing sources of revenue
Not only have these big corporations experienced massive growth in revenue from their non-health insurance lines of business, but their health plan revenues have also seen a big shift in recent years. Not so long ago, the big insurers were getting most of their health plan revenue from private-sector customers, primarily the nation’s employers. But after the Medicare Modernization Act of 2003, which made the Medicare Advantage business more lucrative, insurers flocked to that program. Now, many of the big insurers get more of their health plan revenue from government programs — primarily Medicare and the state Medicaid programs they manage — than from private employers and individuals shopping for coverage on the ACA exchanges. In the first quarter of this year, 72% of UnitedHealth’s U.S. health plan revenue came from government payers. The shift has been almost as stark for the other big players. Centene, which has grown rapidly through numerous acquisitions, has very few private paying customers.
Trend #3: Barriers to care
Health insurers theoretically have two ways of managing healthcare costs: Influencing the unit cost of goods and services and influencing access to those goods and services. Despite their size, they have an unimpressive track record when it comes to reducing the unit cost of those goods and services, prescription drugs in particular. One could argue that they have little interest in doing that. As long as there is no competitor (as a robust public option might be), insurers can simply raise the premiums they charge customers to account for anticipated increases in “medical trend.” In other words, the more the prices of goods and services increase, the more insurers can demand in premiums from their customers. Drug rebates processed though insurer-owned PBMs offer an entirely different set of disincentives, and massive opportunities for payor margin growth, as well.
Where insurers excel is in restricting access to care, and in recent years they have ramped up those restrictions to assure levels of profitability suitable to Wall Street. Those barriers to care include more aggressive prior authorization requirements, ever-increasing out-of-pocket requirements of health plan enrollees, and the elimination of doctors, hospitals and other healthcare facilities from their provider networks. In many cases, the eliminated providers are being replaced by the companies’ own providers.
In future articles on Un-covered, I’ll dive deeper into each of these trends, touching on the consequences of these developments for both healthcare providers and their patients — as well as employers and the U.S. economy as a whole — and assess their sustainability.
Will the good times continue to roll for the bigs or will their power and reach into our lives somehow be curtailed? And what can providers, employers, and regular folks do?
Wendell Potter is a former health insurance executive, New York Times bestselling author, health care and campaign finance reform advocate, and authority on corporate and special interest propaganda. He leads two health care reform advocacy nonprofits: the Center for Health and Democracy and Business Leaders for Health Care Transformation, and is the founder of Tarbell.org, a nonprofit journalism organization.
“They've Been Doing It Forever”
The man’s son had been vomiting, feeling nauseous, and experiencing bad heartburn for several weeks. The child’s pediatrician eventually made the call: It was time to take the boy to the ER.
The father, who requested anonymity, wasn’t the sort of person who went to the emergency room on a whim. He was an internal medicine physician after all, so he tried to avoid ER visits as much as possible. But in late 2019, he listened to the boy’s doctor and took his son to the ER near where they lived in Florida, then took him a second time when he once again couldn’t hold down food.
The decision ultimately seemed to make sense. Tests found the boy was suffering from a newly onset auto-immune disorder. But the family’s insurer, UnitedHealthcare, refused to pay the bills, which totaled $7,000 — $4,000 of which the hospital’s physician services company has since demanded from the family.
The insurer denied one claim, asserting it needed additional information, and refused to consider two other charges, saying the “documentation doesn't support the level of service billed.” The family has tried appealing, but, according to the father, the insurer has said the physician documentation did not support the ER trip being an emergency.
To the father, who has been a doctor for more than a decade, that response made no sense. “We were advised to go there, so there's no way that it's not [an emergency],” he told The Daily Poster. “It required an ER visit and an inpatient stay to get a diagnosis.”
The Florida-based physician isn’t the only one concerned about the ER policy of UnitedHealthcare, the nation’s largest insurer which last year logged a quarter trillion dollars of revenue while its CEO made $42 million. Health care advocates recently expressed alarm after the company announced it was planning to more closely scrutinize emergency room visits, and potentially deem them “no coverage or limited coverage” events.
The American College of Emergency Physicians (ACEP) warned that “UnitedHealthcare is expecting patients to self-diagnose a potential medical emergency before seeing a physician, and then punishing them financially if they are incorrect.”
In response to the outcry, UnitedHealthcare hastily announced it would postpone the policy at least until the end of the COVID-19 pandemic. However, consumer complaints reviewed by The Daily Poster — including the incident detailed above — indicate the insurance giant has already been denying emergency room claims, asserting that patients’ medical scares weren’t real emergencies, leaving them on the hook for massive bills.
A UnitedHealthcare spokesperson requested that we hold this story a day for them to review the specific patient complaints, but ultimately did not respond to our questions about their denials.
She noted that, “Based on feedback from our provider partners, we have decided to delay the implementation of our emergency department program until at least the end of the national public health emergency period. We will use this time to continue to educate consumers, customers and providers on the new program and help ensure that people visit an appropriate site of service for non-emergency care needs.”
As the Biden administration doubles down on subsidizing the private insurance industry rather than embracing Medicare for All, UnitedHealthcare’s claim denials are part of a broader practice across the insurance industry.
For-profit health insurance companies regularly refuse to pay for medical services because denials boost their profits, and they have little incentive not to deny coverage. In 2019, health insurers rejected roughly 17 percent of claims for in-network services involving patients on individual Affordable Care Act health insurance plans, according to data from the Kaiser Family Foundation. Only a tiny fraction of patients appeal the denials.
In 2018, Anthem Blue Cross Blue Shield enacted a similar emergency room policy to the one announced by UnitedHealthcare. ACEP sued Anthem over the policy, and the company has quietly limited its use. Last year, California health care regulators fined health insurer Aetna for wrongfully denying members' emergency room claims 93 percent of the time, in violation of state laws protecting ER patients.
The issue of rampant claim denials extends to Medicare Advantage plans, coverage offered to Medicare beneficiaries by private insurers. A few years ago, the federal Health and Human Services Department (HHS) reported that “there are persistent problems related to denials of care and payment in Medicare Advantage.” HHS reviewed Medicare Advantage contracts covering 15 million beneficiaries in 2016 and found nearly 37 million claim denials — or 2.4 claim denials per customer.
“It’s Bull”
The ongoing pandemic has proven to be a jackpot for health insurance companies, as patients have avoided doctors and trips to the emergency room as much as possible.
UnitedHealthcare took in $257 billion in revenue last year. It also reported more than $15 billion in profit — an 11 percent increase from the previous year. Despite its COVID profit boom, the company chose to announce a policy likely to deter people from visiting emergency rooms.
On June 8, UnitedHealthcare wrote: “Effective July 1, 2021, we will enhance our capabilities to assess emergency department (ED) facility commercial claims to determine if the ED event was emergent or non-emergent, according to existing plan provisions, in most states.”
The company said that emergency room claims would be evaluated based on a number of factors including “the patient’s presenting problem” and “the intensity of diagnostic services performed.”
“Claims determined to be non-emergent will be subject to no coverage or limited coverage in accordance with the member’s certificate of coverage,” the company wrote, adding that patients would be given an “opportunity to complete an attestation if the event met the definition of an emergency consistent with the Prudent Layperson Standard.”
The Federal Prudent Layperson standard, enacted by Congress in 1997, defines an emergency medical condition as “a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention” to result in serious harm.
The point of the Prudent Layperson Standard is to protect patients and allow them to seek emergency care if they believe it’s necessary. ACEP said the UnitedHealthcare policy would violate the prudent layperson standard and “leave millions fearful of seeking medical care.”
The insurer quickly announced it “decided to delay the implementation of our emergency department policy until at least the end of the national public health emergency period.”
But Karen Schapira, a Florida lawyer who often represents health care providers, told The Daily Poster that UnitedHealthcare already has a history of retroactively denying ER claims.
“They're claiming to have put [the policy] off for now, in response to the COVID pandemic, and they'll only begin sometime in the future,” she said. “It's bull, because they've been doing it forever.”
“Extremely Unsettling”
Schapira is representing the Florida physician whose son’s claims were rejected by UnitedHealthcare. She took his case on after she was retained by a young woman with another ER claim denial story involving the insurance giant.
In that case, a foreign university student in Florida went to the emergency room in the middle of the COVID-19 pandemic last spring after she experienced severe chest pain, numbness in her left arm and leg, and shortness of breath. She feared she was having a stroke or a heart attack. An ER doctor evaluated her and determined she was having a panic attack.
The woman, who recently graduated from nursing school, was insured under a UnitedHealth Global plan through the travel insurance company Seven Corners. But of the $16,000 she was billed in ER charges, Seven Corners would only cover $292 — because, according to her explanation of benefits documents, the “charges exceed [the] maximum allowed.”
According to a complaint filed in the case, when the woman questioned the denials, “UnitedHealthcare or its intermediary advised the diagnosis does not fall within the definition of an emergency.”
The Daily Poster reviewed several other consumer complaint files where UnitedHealthcare either denied emergency room claims as non-emergent or was accused of doing so.
In 2017, for example, the parents of a young girl in Washington state called 911 after their daughter woke up coughing and gasping for air. Paramedics directed the family to an emergency room. At the hospital, the child was diagnosed with Croup, an upper airway infection, provided a nebulizer and oral steroids, and quickly sent home.
Such an approach is not unusual; the Mayo Clinic instructs people to seek immediate attention if their child has symptoms of Croup and is struggling to breathe. UnitedHealthcare, however, denied the subsequent ER claims, which totaled about $1,950, because the insurer deemed the visit didn’t meet the definition of an emergency.
The parents appealed and filed a complaint with the state’s insurance commissioner’s office. “I find it extremely unsettling that when the paramedics team that arrived at our house directed us to the nearest emergency room that somehow that is not considered a ‘true emergency’ and is not covered by insurance,” one of the parents wrote. “Any prudent parent seeing their child in respiratory distress would be negligent not to take their child to the emergency room based on the paramedic's remarks in fear that there could be a negative outcome.”
In response, UnitedHealthcare wrote that the services provided at the emergency room didn’t meet the definition of an emergency, and the patient was not provided emergency services. However, the company said it determined that “corrective steps are needed” and had “reprocessed the claim because there was an error in the original processing.” The company told state regulators it had decided to pay the claims in full as “a one-time benefit exception,” but insisted that it had “correctly denied the original claims.”
In another Washington state case, a parent brought her young daughter, who was suffering from a severe case of the flu, to the emergency room in 2019 after “she started to turn purple and her level of consciousness changed,” according to a complaint with the state insurance commissioner.
“Her hands, face and lips turned very bluish purple and I could see the purple starting to spread up her arms,” the parent wrote. “Her speech had changed to not make sense, and she was quite loopy-acting. I decided to take her into the emergency room because of these symptoms and because urgent care or other clinics would not be open for several more hours.”
According to the complaint, United Healthcare denied the resulting ER claims because they did not consider the episode “to meet the definition of emergency services, despite the CDC saying a child with flu-like symptoms whose face or lips turn bluish is an emergent symptom."
The Centers for Disease Control and Prevention (CDC) advises that children with a bluish face or lips should obtain medical care right away.
UnitedHealthcare had the complaint immediately thrown out, because the child was on an employer-funded insurance plan. Such plans are regulated by the U.S. Labor Department, not by state insurance commissioners.
According to a different complaint, in March this year, an elderly man in Nevada started vomiting early one morning and couldn’t stop, eventually vomiting more than a dozen times. After his son found the man unconscious, an urgent care center recommended he be rushed to the hospital.
At the emergency room, medical professionals injected the man with anti-nausea medication and performed an ultrasound. Based on the man’s history of kidney stones and prostate cancer, a doctor also ordered a CT scan.
But Health Plan of Nevada (HPN), a UnitedHealthcare company, denied the man’s claims after he was billed more than $31,000 for his care.
“Your emergency room visit has been denied as the symptoms were not sudden or unexpected requiring emergency attention,” the company told the man in a letter denying his claims.
In May, after the man filed his complaint with the Nevada Division of Insurance, HPN approved the claims.
For Schapira, such cases illustrate the dangers of UnitedHealthcare’s emergency room denial practices, whether they are official or not.
“I believe that a retroactive review of a patient sets a very dangerous precedent,” she said. “You are going to dissuade people from going to the ER, and that is huge. ERs are for emergencies, and by and large people only go there when they have no other choice.”
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