Los Angeles Times

Coronavirus Today

Good evening. I’m Karen Kaplan, and it’s Tuesday, Sept. 13. Here’s the latest on what’s happening with the coronavirus in California and beyond.

The United States accounts for a little more than 4% of the world’s population, but it’s responsible for about 16% of the world’s COVID-19 deaths.

There are lots of reasons why America’s mortality rate is so high: failure to take full advantage of lifesaving vaccines; resistance to simple precautions such as wearing masks in crowded spaces; and high rates of health conditions that make people who catch the coronavirus more likely to wind up severely ill, such as coronary artery disease and obesity

A recent study in the Proceedings of the National Academy of Sciences offers an additional explanation — our lack of universal healthcare.

If the U.S. had a universal healthcare system like the ones in Canada, the United Kingdom, Japan, or pretty much any other high-income country, more than 1 in 4 COVID-19 deaths here could have been prevented, the study authors estimate. That added up to 338,594 avoidable deaths as of March 2022.

The problem isn’t that the U.S. spends too little money on healthcare — indeed, on a per-capita basis, it spends far more than any other country. The problem is that our patchwork system of employer-based health insurance, Medicare for senior citizens and Medicaid for low-income Americans leaves a lot of gaps.

In 2019, just before the pandemic hit, those gaps were so big that nearly 29 millionadults had no health insurance at all. Millions more were underinsured, meaning they had some kind of health plan but couldn’t afford the deductibles and copays they’d incur if they tried to use it.

Having so many people with no easy access to health services creates a variety of issues during a pandemic.

People who can’t afford to see the doctor regularly are more likely to develop a chronic health problem that makes them more vulnerable to a serious case of COVID-19. If they catch the coronavirus, they’re less likely to see a doctor or nurse right away and could miss their chance to nip their infection in the bud. Plus, while they’re getting sicker, they’re spreading the virus to others around them.

To make matters worse, the ranks of uninsured and underinsured Americans grew further in the early days of the pandemic. The stay-at-home orders were designed to protect the public’s health by impeding coronavirus spread. But they also forced companies to lay off millions of workers, depriving 14.5 million Americans of employer-sponsored health insurance.

The authors of the PNAS study, led by Alison Galvani of the Yale School of Public Health, performed a series of calculations to estimate the number of lives that could have been saved if the country had a universal healthcare system.

Their starting point was the 973,459 COVID-19 deaths that had been counted in the U.S. as of March. It’s widely acknowledged that many COVID-19 deaths are never reported as such on death certificates, and other researchers had already determined that about 24% of COVID-19 deaths here were missing from official tallies. Based on that, Galvani and her colleagues figured the actual U.S. death toll as of March was 1,282,555.

Four of the study authors had previously estimated that 26.4% of COVID-19 deaths could be blamed on a lack of universal health insurance. That was based on work showing that mortality rates were higher among groups that had less insurance coverage, and that having less insurance was correlated with higher odds of getting COVID-19, especially a serious case that required hospitalization.

When Galvani and the others put it all together, they concluded that 338,594 American lives were lost as of March 2020 because of the way we pay for healthcare.

The research team also estimated that if all COVID-19 hospitalizations had been billed at roughly the same rate that’s used for people covered by Medicare and Medicaid, the country would have saved a whopping $105.6 billion from the start of the pandemic up through March.

“Universal single-payer healthcare is fundamental to pandemic preparedness,”the study authors wrote. Not only would it have saved more lives, they added, but it also “would have done so at lower cost than the current healthcare system.”

‘Disaster Mode’: Emergency Rooms Across Canada Close Amid Crisis

A nationwide shortage of nurses has caused dozens of emergency rooms across Canada to close temporarily and forced some patients to wait days for a bed.

by Ajosa Asai - NYT - September 14, 2022

One night in March, an understaffed hospital in Red Lake, a tiny town in northwestern Ontario, took the drastic step of shutting down its emergency department. Road signs bearing the ‘H’ symbol to guide drivers along the 60-mile route toward the hospital were covered up. The next hospital was more than two hours away.

Sue LeBeau, the chief executive of Red Lake Margaret Cochenour Memorial Hospital, took a picture of the covered hospital road sign. “This is something that moved me to tears when I saw it,” she said.

It was the first unplanned emergency room closure in Ontario since 2006, and it signaled a growing crisis, not just in one province, but across Canada. Since then, dozens of emergency rooms across the country have been forced to close, usually for a night, but sometimes for a weekend, because they don’t have enough workers.

A shortage of nurses — who have been driven away from the profession by unsafe working conditions, wage dissatisfaction, and burnout from the pandemic — has pushed Canadian hospitals to the brink.

With an underfunded public health system, Canada already has some of the longest health care wait times in the world, but now those have grown even longer, with patients reporting spending multiple days before being admitted to a hospital.

Nurses’ unions and other medical organizations are pushing for provincial governments, which administer health care in Canada, to declare the situation a “state of emergency” and direct more funding to address it.

“I don’t use those words lightly,” said Dr. Paul Parks, president of the emergency medicine section of the Alberta Medical Association, an advocacy group representing about 14,000 physicians in the western Canadian province.

“It is really a disaster mode because the definition of disaster in medicine is that the demand outstrips the ability to supply the care,” he said. “That’s what’s happening every day in our hospitals across the country.”

The United States and other countries, including England, are grappling with similar issues. Some U.S. states have tried raising nurses’ wages and Oregon called in 1,500 National Guard to help overwhelmed staff, in desperate attempts to fill the gap.

In Ontario, Canada’s most populous province, the shortage of nurses has recently forced 16 emergency departments to close, according to Ontario Health, the agency that oversees health care administration in the province.

The lack of health care workers means it takes longer for doctors to transfer acutely ill patients to hospitals with more resources and those doctors are waiting longer to find a bed, said Christine Moon, a spokeswoman for CritiCall, a 24-hour consultation line for Ontario doctors, in an email.

It’s a scene playing out across Canada. In British Columbia, a province where almost one million people do not have a family doctor, there were about a dozen emergency room closures in rural communities in August.

In Newfoundland and Labrador, the emergency room at one community hospital in a region of more than 300,000 people closed from July 1 until August 29.

In Saskatchewan, the union representing nurses in the province said the emergency room at Royal University Hospital in Saskatoon was 200 percent over capacity in late August because of the nurse shortage. The situation was much the same when Tasha Jiricka, a 24-year-old with fibromyalgia, a chronic pain condition, arrived there by ambulance earlier that month.

With intense stomach pains and unable to eat or drink, Ms. Jiricka, was assessed by nurses who thought she should be admitted, but for three days there were no open beds in the 407-bed hospital. She sat in the emergency waiting room, in pain, until one became available.

“Honestly, the only thing that got me through were the other people who were waiting,” said Ms. Jiricka in a phone interview from her hospital bed.

“We have a work force that is exhausted, demoralized, and looking at the door after toiling through the pandemic, suffering real wage cuts and working in an environment that is often unsafe for them,” Michael Hurley, president of the Ontario Council of Hospital Unions, said at a news conference in August.

To help address the crisis, the nation’s health authorities are trying to attract nurses from abroad and retain current or recently retired staff.

Jean-Yves Duclos, Canada’s health minister, announced last month that he was reinstating the position of chief nursing officer, a person who helps shape national policy, and a role that the government scrapped a decade ago.

“We need to support our nurses, make sure they are heard and that their challenges are met with solutions,” he said at a news conference alongside Leigh Chapman, a nurse and researcher who was appointed to the position.

Canada spends more on health care than all but four countries. Last year, the federal government provided 42 billion Canadian dollars for health care through a funding arrangement that increases by at least three percent per year to each of the country’s 13 provinces and territories.

But provincial leaders say that’s lower than the five percent yearly increase in the costs associated with delivering health care and are pressing the federal government to boost annual funding by at least 28 billion Canadian dollars.

Although provincial governments have ultimate control over financing for health care, including the power to raise taxes, their leaders say they can’t afford it.

In Ontario, the provincial government capped wage increases for most public sector employees in 2019, citing budget issues. Unions representing health care workers there blame the staffing shortage on the cap and the chronic underfunding of health care.

“Frankly, we need to make working in hospital better paid and safer,” Mr. Hurley, the hospitals’ union president, said, calling for financial incentives to increase the hiring and retention of experienced nurses and the addition of more full-time positions that would include insurance benefits. About 30 percent of Canada’s nursing jobs are part-time, according to data from the Canadian Institute for Health Information.

In Toronto, severe staffing shortages prompted the University Health Network, a group of five facilities that are home to some of Canada’s foremost health researchers, to issue a critical care bed alert, a warning to other emergency facilities that a hospital would not be able to readily accept transfers of critically-ill patients, said Dr. Kevin Smith, chief executive of the hospital system.

The warning typically lasts a day or so but at the health network’s Toronto General Hospital, the alert was in effect between July 22 and Sept. 2.

“Increasingly, I think many of us realize we are not going to, in the short term, train our way out of this,” said Dr. Smith. “We can’t produce nurses quickly, with the exception, possibly, of some foreign graduates.”

That’s an option that some provinces are turning to. Ontario’s health minister, Sylvia Jones, directed licensing authorities to “make every effort” to register health professionals who were internationally trained “as expeditiously as possible,” according to letters sent last month to those authorities.

Even before the pandemic, emergency departments were among the most dangerous work environments in hospitals.

Health care workers experience workplace violence at four times the rate of other workers, and half of those incidents happen in the emergency room, according to a 2021 statement by the Canadian Association of Emergency Physicians.

That violence, coupled with the increased level of risk that nurses are shouldering by serving more patients with less help even as the pandemic endures, has accelerated burnout.

“I think we’re just going to keep losing people because at a certain point, you don’t keep working in that environment,” said Dr. Carolyn Snider, the chief of emergency medicine at St. Michael’s Hospital, one of two trauma centers in downtown Toronto. “That is my biggest worry.”

In a 2019 parliamentary committee report on the issue of workplace violence, health care workers said that fewer staff led to more violence because patients and family members become frustrated with the lack of attention.

It’s something Cathryn Hoy, president of the Ontario Nurses’ Association, hears about regularly from the members of her union: punching, spitting, kicking, and two stabbings in the last six months, she said.

“Nursing is the backbone, and the heartbeat of health care,” she said. “Unless health care touches you, you don’t think about it.”

https://www.nytimes.com/2022/09/14/world/canada/nurse-shortage-emergency-rooms.html

Adequacy of Medicare Physician Fee-for-Service Payments

Health Justice Monitor - September 14, 2022

Summary: A survey of California physicians finds that Medicare fee-for-service payments, not keeping pace with inflation, don’t cover their costs to provide care. Big caveat: biased sampling -- 88% of respondents don’t participate in FFS Medicare. Under single payer, payment rates would be negotiated with physicians, and fair for them.

Medicare/ PHYSICIAN PAYMENT AND ACCESS TO CARE SURVEY
California Medical Association
August 29, 2022

Deeply alarmed about the growing financial instability of the Medicare physician payment system, the California Medical Association (CMA) recently surveyed physicians about the financial health of their practices and how Medicare payment rates are impacting access to care in their communities.

Since 2001, inflation has increased by 40%, yet physician Medicare payments have only increased by 7%. Today’s Medicare payments on average lag 40% behind the cost of providing care, while hospital and nursing home payments are indexed to inflation (and as a result have increased by 60% since 2001).

According to the CMA survey results, 76% of physicians report that Medicare fee-for-service payments do not cover their costs to provide care, with 61% reporting average revenue losses between 11-50%. And, 13% of physicians even report average revenue losses over 50%.

Forty-one percent of physicians report they are considering closing their practices to new Medicare patients. And, 87% report that low Medicare reimbursement rates coupled with the high costs to practice in California are negatively affecting the ability to recruit and retain physicians in their communities.

Comment by: Don McCanne

It is important to realize that of the 843 physician practices surveyed, 88% reported that they did not participate in the Medicare fee-for-service program, presumably traditional Medicare. No mention was made of private Medicare Advantage participation. Might one suspect that there was an element of bias?

Regardless, the Medicare program does have some very major deficiencies that would require more than a nominal overhaul, especially now that it has been severely damaged through the CMS push for privatization. In contrast, a well-designed single payer system is a vastly superior system of financing health care for all, and it should have the support of the medical profession. This survey would suggest that "Medicare for All" might be a poor choice for a label, especially if we want the support of organized medicine. But everyone needs to understand the policies behind single payer and how they would work so well for each and every one of us as individuals, including the physicians. Then we would have to join together to make sure that is the system that the government implements.

Pervasive Contamination of US Health System By Corporate Myths & Models

Health Justice Monitor - September 8, 2022

Summary: Two recent articles characterize systemic trends and illustrate one patient’s struggles with corporate goals, values, and tactics permeating health insurance.

Value-Based Payment Is the New For-Profit Health Care Industry
Truthout
September 8, 2022
By Kip Sullivan, Kay Tillow & Ana Malinow

Like the insurance industry, the VBP industry hovers over doctors and patients and seeks to influence (and in some cases, dictate) doctor-patient decision-making, and in the process diverts resources away from medical care. Unlike the insurance industry, the VBP industry is almost invisible to the public. It consists of a heterogeneous mix of corporations that own, contract with, manage, consult with, or sell services to providers (doctors and hospitals). Some, such as “accountable care organizations,” mimic insurance companies. Others are consultants, such as Privia, venture capitalists like General Catalyst, or firms selling management services, such as agilon health. Large pieces of this new industry are being bought out by companies like Walgreens and Amazon. …

The phrase “value-based payment” emerged in the 2000s as the label for all methods of payment that shift insurance risk from insurance companies and public programs like Medicare onto health care providers. Risk is shifted by paying providers a set fee per patient per year (usually called “capitation”) rather than a fee for each service providers render (known as “fee-for-service”), or by tying provider payment to the profits and losses of organizations they contract with. VBP advocates claim, without evidence, that fee-for-service (FFS) induces doctors to order services patients don’t need and that shifting risk to providers will induce them to improve both components of value — cost and quality. …

The speakers at the [National Primary Care] “summit,” who included virtually every prominent advocate of VBP from the public and private sectors, studiously avoided discussion of VBP’s underwhelming effect on the cost and quality of health care, and rarely mentioned its worst side effects. A few speakers expressed frustration at how long VBP was taking to prove it can work, but even these speakers refused to discuss the research. Rather than acknowledge failure and use their time together to analyze the reasons for failure, the 150 speakers concentrated instead on repeating VBP folklore (fee-for-service is the problem and VBP schemes are the answer) and reporting cherry-picked anecdotes.

Tackling cancer while battling the insurance system
The Washington Post
September 9, 2022
By Annabelle Gurwitch

Even plans that are supposed to save patients money can end up costing them dearly

“You’ll receive a bill, but don’t pay it,” my caller [from SavOnSP Specialty Pharmacy] said. “Working with us ensures that you have a zero co-pay.”

[A[ few weeks later my monthly shipment of medication arrived along with an invoice from Express Scripts for $4,445. It noted that I might not owe this amount; nevertheless, it had a detachable payment slip, and a return envelope was provided. Remembering the caller’s assurances, I tossed the bill into my ever-expanding, supersize file I’ve labeled “insurance gobbledygook.” But when I visited an ATM the next day, my balance was significantly lower than I expected. $4,445 had been deducted by Express Scripts….

I’d been entangled in an increasingly exploitative scheme. In what’s become a standard industry practice, pharmacy benefit managers (PBMs) contract with secretive third-party adjusters commonly called co-pay accumulators and maximizer programs to process “specialty medication” prescriptions, including biomarker-targeted therapies for lung cancer and other chronic and deadly diseases. Once a plan engages a co-pay accumulator or maximizer, these entities reclassify these medications (some of the priciest on the market) as “nonessential.” This allows plans to exploit a loophole in the Affordable Care Act: Coverage can be denied for therapies that a plan labels “nonessential,” and a plan can reset the member’s pharmaceutical benefit deductible and out-of-pocket maximum to any amount of their choosing.

Comment by: Jim Kahn

Sadly, US healthcare is increasingly distorted by a rising corporate presence, most of all for insurance but also for care. Corporations create a mythology of benefit for patients and apply aggressive business models and tactics to extract maximum profits, to the detriment of the rest of us.

The first article describes the feverish expansion of value-based payment, an array of funding mechanisms focused on capitation (named as such and de facto), with only one clear and consistent benefit: profits for corporate intermediaries. We’ve written often in HJM about the most egregious examples – Medicare Advantage, DCEs, and ACO reach (just search your emails or the HJM website). Traditional standards of evidence in medicine are routinely ignored. Instead, if a strategy is profitable we hear mindless and mind-numbing assurances that it’s beneficial. Yet often there is evidence of harm. And often there is no evidence at all, due in part to withholding of proper evaluation data by corporate interests resisting scrutiny.

The second article brings home how this ethic affects the individual, with a startling example of a women with cancer caught in a thoroughly confusing web of drug insurance entities. These layered intermediaries are proliferating out of control (pharmacy benefit managers, adjusters, accumulators, maximizers). Each complexity and inadequacy of drug insurance represents another business opportunity, a 3^rd and 4^th layer “remedy”. It’s a daunting challenge for anyone to understand the myriad drug insurance entities and the sequence of events described in the article. Perhaps the slimiest aspect is reclassifying a drug for cancer treatment as “nonessential” in order to burden the patient with costs far in excess of the deductible.

When will we transform our health insurance to elevate people over profits? And society over shareholders?

Single payer.

Many Preventive Medical Services Cost Patients Nothing. Will a Texas Court Decision Change That?

BY JULIE APPLEBYE - KAISER HEALTH NEWS - SEPTEMBER 18, 2022

A federal judge’s ruling in Texas has thrown into question whether millions of insured Americans will continue to receive some preventive medical services, such as cancer screenings and drugs that protect people from HIV infection, without making a copayment.

It’s the latest legal battle over the Affordable Care Act, and Wednesday’s ruling is almost certain to be appealed.

A key part of the ruling by Judge Reed O’Connor of the US District Court for the Northern District of Texas says 1 way that preventive services are selected for the no-cost coverage is unconstitutional. Another portion of his ruling says a requirement that an HIV prevention drug therapy be covered without any cost to patients violates the religious freedom of an employer who is a plaintiff in the case.

Today’s top picks on the Haymarket Medical Network

It is not yet clear what all this means for insured patients. A lot depends on what happens next.

O’Connor is likely familiar to people who have followed the legal battles over the ACA, which became law in 2010. In 2018, he ruled that the entire ACA was unconstitutional. For this latest case, he has asked both sides to outline their positions on what should come next in filings due September 16.

After that, the judge may make clear how broadly he will apply the ruling. O’Connor, whose 2018 ruling was later reversed by the US Supreme Court, has some choices. He could say the decision affects only the conservative plaintiffs who filed the lawsuit, expand it to all Texans, or expand it to every insured person in the US He also might temporarily block the decision while any appeals, which are expected, are considered.

“It’s quite significant if his ruling stands,” said Katie Keith, JD, director of the Health Policy and the Law Initiative at the O’Neill Institute for National and Global Health Law at the Georgetown University Law Center.

We asked experts to weigh in on some questions about what the ruling might mean.

What does the ACA require on preventive care?

Under a provision of the ACA that went into effect in late 2010, many services considered preventive are covered without a copayment or deductible from the patient.

A recent estimate from the US Department of Health and Human Services found that more than 150 million people with insurance had access to such free care in 2020.

The federal government currently lists 22 broad categories of coverage for adults, an additional 27 for women, and 29 for children.

To get on those lists, vaccines, screening tests, drugs, and services must have been recommended by 1 of 3 groups of medical experts. But the ruling in the Texas case centers on recommendations from only 1 group: the US Preventive Services Task Force, a nongovernmental advisory panel whose volunteer experts weigh the pros and cons of screening tests and preventive treatments.

Procedures that get an “A” or “B” recommendation from the task force must be covered without cost to the insured patient and include a variety of cancer screenings, such as colonoscopies and mammograms; cholesterol drugs for some patients; and screenings for diabetes, depression, and sexually transmitted diseases.

Why didn’t the ACA simply spell out what should be covered for free?

“As a policymaker, you do not want to set forth lists in statutes,” said Christopher Condeluci, a health policy attorney who served as tax and benefits counsel to the US Senate Finance Committee during the drafting of the ACA. One reason, he said, is that if Congress wrote its own lists, lawmakers would be “getting lobbied in every single forthcoming year by groups wanting to get on that list.”

Putting it in an independent body theoretically insulated such decisions from political influence and lobbying, he and other experts said.

What did the judge say?

It’s complicated, but the judge basically said that using the task force recommendations to compel insurers or employers to offer the free services violates the Constitution.

O’Connor wrote that members of the task force, which is convened by a federal health agency, are actually “officers of the United States” and should therefore be appointed by the president and confirmed by the Senate.

The decision does not affect recommendations made by the other 2 groups of medical experts: the Advisory Committee on Immunization Practices, which makes recommendations to the Centers for Disease Control and Prevention on vaccinations, and the Health Resources and Services Administration, a part of the Department of Health and Human Services that has set free coverage rules for services aimed mainly at infants, children, and women, including birth control directives.

Many of the task force’s recommendations are noncontroversial, but a few have elicited an outcry from some employers, including the plaintiffs in the lawsuit. They argue they should not be forced to pay for services or treatment they disagree with, such as HIV prevention drugs.

Part of O’Connor’s ruling addressed that issue separately, agreeing with the position taken by plaintiff Braidwood Management, a Christian, for-profit corporation owned by Steven Hotze, a conservative activist who has brought other challenges to the ACA and to coronavirus mask mandates. Hotze challenged the requirement to provide free coverage of preexposure prophylaxis (PrEP) drugs that prevent HIV. He said it runs afoul of his religious beliefs, including making him “complicit in facilitating homosexual behavior, drug use, and sexual activity outside of marriage between 1 man and 1 woman,” according to the ruling.

O’Connor said forcing Braidwood to provide such free care in its insurance plan, which it funds itself, violates the federal Religious Freedom Restoration Act.

What about no-copay contraceptives, vaccines, and other items that are covered under recommendations from other groups not targeted by the judge’s ruling?

The judge said recommendations or requirements from the other 2 groups do not violate the Constitution, but he asked both parties to discuss the ACA’s contraceptive mandate in their upcoming filings. Currently, the law requires most forms of birth control to be offered to enrollees without a copayment or deductible, although courts have carved out exceptions for religious-based employers and “closely held businesses” whose owners have strong religious objections.

The case is likely to be appealed to the fifth US Circuit Court of Appeals.

“We will have a conservative court looking at that,” said Sabrina Corlette, JD, co-director of Georgetown University’s Center on Health Insurance Reforms. “So I would not say that the vaccines and the women’s health items are totally safe.”

Does this mean my mammogram or HIV treatment won’t be covered without a copayment anymore?

Experts say the decision probably won’t have an immediate effect, partly because appeals are likely and they could continue for months or even years.

Still, if the ruling is upheld by an appellate court or not put on hold while being appealed, “the question for insurers and employers will come up on whether they should make changes for 2023,” said Keith.

Widespread changes next year are unlikely, however, because many insurers and employers have already drawn up their coverage rules and set their rates. And many employers, who backed the idea of allowing the task force to make the recommendations when the ACA was being drafted, might not make substantial changes even if the ruling is upheld on appeal.

“I just don’t see employers for most part really imposing copays for stuff they believe is actually preventive in nature,” said James Gelfand, JD, president of the ERISA Industry Committee, which represents large, self-insured employers.

For the most part, Gelfand said, employers are in broad agreement on the preventive services, although he noted that covering every type or brand of contraceptive without a patient copayment is controversial and that some employers have cited religious objections to covering some services, including the HIV preventive medications.

Religious objections aside, future decisions may have financial consequences. As insurers or employers look for ways to hold down costs, they might reinstitute copayments or deductibles for some of the more expensive preventive services, such as colonoscopies or HIV drugs.

“With some of the higher-ticket items, we could see some plans start cost sharing,” said Corlette.

https://www.clinicaladvisor.com/home/topics/practice-management-information-center/many-preventive-medical-services-cost-patients-nothing-will-a-texas-court-decision-change-that/

Maine sees largest decline of any state in uninsured rate, but trails New England states overall

by Patty Wight - Maine Public - September 19, 2022

New data from the U.S. Census Bureau show that from 2019 to 2021, Maine experienced the largest decline in the uninsured rate in the U.S.

In 2019, 8% of Mainers were uninsured. By 2021, that number dipped to 5.7%. That's a drop of more than two percentage points, and was the largest decline of any state.

According to the Mills administration, the lower number of uninsured Mainers has also translated into an $84 million decrease in uncompensated care for hospitals.

Despite those achievements, an estimated 76,000 Mainers didn't have health insurance last year. And the state's uninsured rate was the highest in New England. Massachusetts had the lowest nationwide, at 2.5%, followed by Vermont, at 3.7%.

https://www.mainepublic.org/health/2022-09-19/maine-sees-largest-decline-of-any-state-in-uninsured-rate-but-trails-new-england-states-overall

They Were Entitled to Free Care. Hospitals Hounded Them to Pay.

by Jessica Silver-Greenbeerg and Katie Thomas - NYT - September 24, 2022

In 2018, senior executives at one of the country’s largest nonprofit hospital chains, Providence, were frustrated. They were spending hundreds of millions of dollars providing free health care to patients. It was eating into their bottom line.

The executives, led by Providence’s chief financial officer at the time, devised a solution: a program called Rev-Up.

Rev-Up provided Providence’s employees with a detailed playbook for wringing money out of patients — even those who were supposed to receive free care because of their low incomes, a New York Times investigation found.

In training materials obtained by The Times, members of the hospital staff were instructed how to approach patients and pressure them to pay.

“Ask every patient, every time,” the materials said. Instead of using “weak” phrases — like “Would you mind paying?” — employees were told to ask how patients wanted to pay. Soliciting money “is part of your role. It’s not an option.”

If patients did not pay, Providence sent debt collectors to pursue them.

More than half the nation’s roughly 5,000 hospitals are nonprofits like Providence. They enjoy lucrative tax exemptions; Providence avoids more than $1 billion a year in taxes. In exchange, the Internal Revenue Service requires them to provide services, such as free care for the poor, that benefit the communities in which they operate.

But in recent decades, many of the hospitals have become virtually indistinguishable from for-profit companies, adopting an unrelenting focus on the bottom line and straying from their traditional charitable missions.

To understand the shift, The Times reviewed thousands of pages of court records, internal hospital financial records and memos, tax filings, and complaints filed with regulators, and interviewed dozens of patients, lawyers, current and former hospital executives, doctors, nurses and consultants.

The Times found that the consequences have been stark. Many nonprofit hospitals were ill equipped for a flood of critically sick Covid-19 patients because they had been operating with skeleton staffs in an effort to cut costs and boost profits. Others lacked intensive care units and other resources to weather a pandemic because the nonprofit chains that owned them had focused on investments in rich communities at the expense of poorer ones.

And, as Providence illustrates, some hospital systems have not only reduced their emphasis on providing free care to the poor but also developed elaborate systems to convert needy patients into sources of revenue. The result, in the case of Providence, is that thousands of poor patients were saddled with debts that they never should have owed, The Times found.

Founded by nuns in the 1850s, Providence says its mission is to be “steadfast in serving all, especially those who are poor and vulnerable.” Today, based in Renton, Wash., Providence is one of the largest nonprofit health systems in the country, with 51 hospitals and more than 900 clinics. Its revenue last year exceeded $27 billion.

Providence is sitting on $10 billion that it invests, Wall Street-style, alongside top private equity firms. It even runs its own venture capital fund.

In 2018, before the Rev-Up program kicked in, Providence spent 1.24 percent of its expenses on charity care, a standard way of measuring how much free care hospitals provide. That was below the average of 2 percent for nonprofit hospitals nationwide, according to an analysis of hospital financial records by Ge Bai, a professor at the Johns Hopkins Bloomberg School of Public Health.

By last year, Providence’s spending on charity care had fallen below 1 percent of its expenses.

The Affordable Care Act requires nonprofit hospitals to make their financial assistance policies public, such as by posting them in hospital waiting rooms. But the federal law does not dictate who is eligible for free care.

Ten states, however, have adopted their own laws that specify which patients, based on their income and family size, qualify for free or discounted care. Among them is Washington, where Providence is based. All hospitals in the state must provide free care for anyone who makes under 300 percent of the federal poverty level. For a family of four, that threshold is $83,250 a year.

In February, Bob Ferguson, the state’s attorney general, accused Providence of violating state law, in part by using debt collectors to pursue more than 55,000 patient accounts. The suit alleged that Providence wrongly claimed those patients owed a total of more than $73 million.

Providence, which is fighting the lawsuit, has said it will stop using debt collectors to pursue money from low-income patients who should qualify for free care in Washington.

But The Times found that the problems extend beyond Washington. In interviews, patients in California and Oregon who qualified for free care said they had been charged thousands of dollars and then harassed by collection agents. Many saw their credit scores ruined. Others had to cut back on groceries to pay what Providence claimed they owed. In both states, nonprofit hospitals are required by law to provide low-income patients with free or discounted care.

“I felt a little betrayed,” said Bev Kolpin, 57, who had worked as a sonogram technician at a Providence hospital in Oregon. Then she went on unpaid leave to have surgery to remove a cyst. The hospital billed her $8,000 even though she was eligible for discounted care, she said. “I had worked for them and given them so much, and they didn’t give me anything.” (The hospital forgave her debt only after a lawyer contacted Providence on Ms. Kolpin’s behalf.)

Gregory Hoffman, Providence’s chief financial officer, said in an interview that The Times’s findings about the hospital system’s treatment of poor patients “are very concerning and have our attention.” He said Providence wanted “to get things right, on behalf of our communities and on behalf of our patients,” though he acknowledged that the Rev-Up program initially had “some hiccups,” including sending Medicaid patients to debt collectors.

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Melissa Tizon, a spokeswoman for Providence, said the health system stopped doing that in December, although that was two years after an executive raised internal alarms about the practice. Providence has also instructed the debt collection firms it works with to not use “any aggressive tactics such as garnishing wages or reporting delinquent accounts to credit agencies,” she said.

Ms. Tizon said Providence was the largest provider of charity care in Washington. While the hospital system has been providing less of that care in recent years, she said, Providence has been treating more patients on Medicaid, the federal-state insurance program for poor people.

“Our practices comply with and in many instances exceed state requirements,” she said.

Paying With Poultry

Providence was founded in 1856 when, at the request of a local bishop, Mother Joseph and four other nuns from the Sisters of Providence trekked from Montreal to Vancouver, Wash., to provide services to the poor. Their first hospital, St. Joseph, was a single room with four beds. The hospital charged patients $1 a day, not including extras like whiskey.

Patients rarely paid in cash, sometimes offering chickens, ducks and blankets in exchange for care.

At the time, hospitals in the United States were set up to do what Providence did — provide inexpensive care to the poor. Wealthier people usually hired doctors to treat them at home.

Given their work serving the indigent, hospitals were exempted from state and federal taxes.

That system remained relatively unchanged until the federal government created Medicare and Medicaid in the 1960s. Millions more people suddenly had insurance that covered medical expenses.

The I.R.S. began allowing hospitals to justify their tax exemptions by providing a broader range of loosely defined benefits to their communities beyond treating patients for free. Some hospitals took advantage of the new leeway, arguing that things like employees’ salaries counted toward the I.R.S. requirement.

Top government officials warned that hospitals were abusing their privileged status as nonprofits.

“Some tax-exempt health care providers may not differ markedly from for-profit providers in their operations, their attention to the benefit of the community or their levels of charity care,” the I.R.S. commissioner Mark W. Everson wrote to the Senate in 2005.

Some hospital executives have embraced the comparison to for-profit companies. Dr. Rod Hochman, Providence’s chief executive, told an industry publication in 2021 that “‘nonprofit health care’ is a misnomer.”

“It is tax-exempt health care,” he said. “It still makes profits.”

Those profits, he added, support the hospital’s mission. “Every dollar we make is going to go right back into Seattle, Portland, Los Angeles, Alaska and Montana.”

Since Dr. Hochman took over in 2013, Providence has become a financial powerhouse. Last year, it earned $1.2 billion in profits through investments. (So far this year, Providence has lost money.)

Providence also owes some of its wealth to its nonprofit status. In 2019, the latest year available, Providence received roughly $1.2 billion in federal, state and local tax breaks, according to the Lown Institute, a think tank that studies health care.

The greater the hospital system’s profits, the more money it could pump into expanding. In addition, the greater its cash reserves, the stronger its credit rating. A pristine rating allowed Providence to inexpensively borrow money, which it could then funnel into further growth.

Over the past decade, Providence has opened or acquired 18 hospitals. Dr. Hochman earned $10 million in 2020.

‘Don’t Accept the First No’

Even before the Rev-Up program, Providence was collecting money from poor patients, sometimes in violation of state laws, according to five current and former executives and a review of patient complaints filed with regulators.

Harriet Haffner-Ratliffe, 20, gave birth to twins at a Providence hospital in Olympia, Wash., in 2017. She was eligible under state law for charity care.

Providence did not inform her. Instead it billed her almost $2,300. The hospital put her on a roughly $100-a-month payment plan.

It was more than Ms. Haffner-Ratliffe, who was unemployed, could afford. She had to ration gas for her car. One day, her boyfriend walked into their apartment and found her surrounded by bills, crying. When she fell behind on the payments, Providence dispatched a debt collector to pursue her.

For people already on the financial brink, debt collection companies can push them over the edge. The companies often inform credit-rating firms about patients’ debts, which can torpedo their credit scores. That, in turn, can make it much harder and more expensive to buy or rent a car or home or to borrow money.

Ms. Haffner-Ratliffe’s ordeal chopped her credit score by about 200 points. For years, she couldn’t get a credit card. (Ms. Tizon, the Providence spokeswoman, said that the hospital had told Ms. Haffner-Ratliffe about how to seek financial aid but that she had not completed her application. Ms. Haffner-Ratliffe and her parents dispute that.)

Around that time, in 2018, Providence was looking for ways to save money. It had recently merged with another nonprofit hospital system, and integrating the two was expensive.

Providence turned to the consulting firm McKinsey & Company. The firm’s assignment was to maximize the money that Providence collected from its patients, the five current and former executives said. In essence, the hospital system wanted to apply the tactics it had used with Ms. Haffner-Ratliffe to even more patients.

McKinsey’s solution was Rev-Up, whose name was an apparent reference to the goal of accelerating revenue growth.

Training materials instructed administrative staff to tell patients — no matter how poor — that “payment is expected,” according to documents included in Washington’s lawsuit and training materials obtained by The Times. Six current and former hospital employees said in interviews that they had been told not to mention the financial aid that states like Washington required Providence to provide.

One training document, titled “Don’t accept the first No,” led staff through a series of questions to ask patients. The first was “How would you like to pay that today?” If that did not work, employees were told to ask for half the balance. Failing that, staff could offer to set up a payment plan. Only as a last resort, the documents explained, should workers tell patients that they may be eligible for financial assistance.

Another training document explained what to do if patients expressed surprise that a charitable hospital was pressuring them to pay. The suggested response: “We are a nonprofit. However, we want to inform our patients of their balances as soon as possible and help the hospital invest in patient care by reducing billing costs.”

Staff members were then instructed to shift the conversation to “how would you like to take care of this today?”

Exhorting employees to do their jobs well, some versions of the training materials invoked a famous line from a speech by the Rev. Dr. Martin Luther King Jr.: “If it falls your lot to be a street sweeper, sweep streets like Michelangelo painted pictures.”

Ms. Tizon, the spokeswoman for Providence, said the intent of Rev-Up was “not to target or pressure those in financial distress.” Instead, she said, “it aimed to provide patients with greater pricing transparency.”

“We recognize the tone of the training materials developed by McKinsey was not consistent with our values,” she said, adding that Providence modified the materials “to ensure we are communicating with each patient with compassion and respect.”

But employees who were responsible for collecting money from patients said the aggressive tactics went beyond the scripts provided by McKinsey. In some Providence collection departments, wall-mounted charts shaped like oversize thermometers tracked employees’ progress toward hitting their monthly collection goals, the current and former Providence employees said.

On Halloween at one of Providence’s hospitals, an employee dressed up as a wrestler named Rev-Up Ricky, according to the Washington lawsuit. Another costume featured a giant cardboard dollar sign with “How” printed on top of it, referring to the way the staff was supposed to ask patients how, not whether, they would pay. Ms. Tizon said such costumes were “not the culture we strive for.”

The Rev-Up program alarmed some Providence employees.

“It was awful working for this rich system and not being able to help people who were just crying in front of me,” said Stephanie Shufelt, who worked in patient registration at a Providence hospital in Portland, Ore., until February 2021.

Taylor Davison, who worked in the emergency department of a Providence hospital in Santa Rosa, Calif., until last year, said Providence’s tactics had struck her as predatory. She was told to approach patients as soon as doctors had finished examining them. She would crouch at their bedside and ask for money. She was required to document in the patients’ charts that she had repeatedly pushed for payments.

Employees were urged to collect any amount, no matter how small, she said. Some patients offered as little as $2, which she accepted.

“Here are people coming in at the worst moment of their lives, and I’m asking them to empty their wallets,” Ms. Davison said.

Providence paid McKinsey at least $45 million in 2019 for its assistance, tax filings show.

Warning About Harm to Patients

When patients left a hospital without paying, Providence sent them at least three bills. If they still did not pay, they would receive one last warning.

“This is your final opportunity to pay your account,” one such letter said. Otherwise, it went on, Providence would enlist “a third-party agency that may adversely affect your credit rating.”

Under Washington’s law, Providence was supposed to screen patients at the hospital to assess whether they qualified for free or discounted care. But Providence often checked patients’ income only after months of hounding them had failed, according to depositions included in the Washington lawsuit and internal memos that a former Providence executive shared with The Times.

At that point, Providence ran accounts through a screening tool provided by Experian, a credit reporting company, to determine whether accounts were eligible for free care.

But despite Rev-Up, the amount of free care that Providence was providing was “spiking,” an executive later explained in an email to colleagues. So in 2019, Providence’s chief financial officer at the time, Venkat Bhamidipati, and other executives made a change, according to the five current and former Providence executives and depositions included in Washington’s lawsuit.

Previously, when treating patients who were on Medicaid, Providence eventually waived any outstanding portion of their bill. In 2019, Providence stopped doing that. Medicaid patients were sent to debt collectors instead. That appeared to violate laws in Washington, Oregon and California that required nonprofit hospitals to provide free care to patients earning below certain thresholds, according to regulators.

Some Providence executives warned that the changes were harming patients.

“I just want it made clear to our leadership that patients that would normally have been eligible for charity care are going to bad debt,” Lesa Wood, a director of financial counseling and assistance, emailed colleagues in late 2019.

In 2020, a Providence executive wrote to co-workers to report that the system’s charity care spending was down “across all markets.”

Skimping on Groceries

In November 2020, Paulo Aguirre went to a Providence hospital in Orange County, Calif., with a splitting headache, blurred vision and nausea. Doctors gave him a shot that made the pain “go right away,” he said.

Mr. Aguirre earned minimum wage working at a dental office and was on California’s version of Medicaid, known as Medi-Cal. Under California law and Providence’s financial assistance policy, his low income qualified him for free care.

In early 2021, Mr. Aguirre said, he received a bill from Providence for $4,394.45. He told Providence that he could not afford to pay.

Providence sent his account to Harris & Harris, a debt collection company. Mr. Aguirre said that Harris & Harris employees had called him repeatedly for weeks and that the ordeal made him wary of going to Providence again.

“I try my best not to go to their emergency room even though my daughters have gotten sick, and I got sick,” Mr. Aguirre said, noting that one of his daughters needed a biopsy and that he had trouble breathing when he had Covid. “I have this big fear in me.”

That is the outcome that hospitals like Providence may be hoping for, said Dean A. Zerbe, who investigated nonprofit hospitals when he worked for the Senate Finance Committee under Senator Charles E. Grassley, Republican of Iowa.

“They just want to make sure that they never come back to that hospital and they tell all their friends never to go back to that hospital,” Mr. Zerbe said.

Last October, an ambulance rushed Alexandra Nyfors to the Providence hospital in Everett, Wash. A diabetic, she was severely dehydrated, and her kidneys were failing. Providence put her on intravenous medications to treat an underlying infection. She spent about two weeks in the hospital.

Ms. Nyfors, 66, is covered by Medicare, and her only income is about $1,700 a month in federal disability payments. Under Providence’s policies and state law, she was eligible for free care because of her low income.

But Providence billed her $1,950 — the amount left over after Medicare covered its share. The remaining sum was daunting. It was getting colder, and Ms. Nyfors knew her heating bill would gobble up much of her monthly check. But when she went on the hospital’s website, she said, there were only two choices: Pay in full or set up a payment plan.

Ms. Nyfors agreed to have $162.50 automatically withdrawn from her bank account each month until the bill was settled. She started buying fewer groceries, she said. She went without heat. She split her medication in two to make it last longer.

She had no idea she qualified for free care until she read about Washington’s lawsuit. After Ms. Nyfors was interviewed by The Everett Daily Herald, Providence forgave her bill and refunded the payments she had made.

In June, she got another letter from Providence. This one asked her to donate money to the hospital: “No gift is too small to make a meaningful impact.”

Following a Script ‘Like Robots’

In 2019, Vanessa Weller, a single mother who is a manager at a Wendy’s restaurant in Anchorage, went to Providence Alaska Medical Center, the state’s largest hospital.

She was 24 weeks pregnant and experiencing severe abdominal pains. “Let this just be cramps,” she recalled telling herself.

Ms. Weller was in labor. She gave birth via cesarean section to a boy who weighed barely a pound. She named him Isaiah. As she was lying in bed, pain radiating across her abdomen, she said, a hospital employee asked how she would like to pay. She replied that she had applied for Medicaid, which she hoped would cover the bill.

After five days in the hospital, Isaiah died.

Then Ms. Weller got caught up in Providence’s new, revenue-boosting policies.

The phone calls began about a month after she left the hospital. Ms. Weller remembers panicking when Providence employees told her what she owed: $125,000, or about four times her annual salary.

She said she had repeatedly told Providence that she was already stretched thin as a single mother with a toddler. Providence’s representatives asked if she could pay half the amount. On later calls, she said, she was offered a payment plan.

“It was like they were following some script,” she said. “Like robots.”

Later that year, a Providence executive questioned why Ms. Weller had a balance, given her low income, according to emails disclosed in Washington’s litigation with Providence. A colleague replied that her debts previously would have been forgiven but that Providence’s new policy meant that “balances after Medicaid are being excluded from presumptive charity process.”

Ms. Weller said she had to change her phone number to make the calls stop. Her credit score plummeted from a decent 650 to a lousy 400. She has not paid any of her bill.

Susan C. Beachy and Beena Raghavendran contributed research.

https://www.nytimes.com/2022/09/24/business/nonprofit-hospitals-poor-patients.html

How a Hospital Chain Used a Poor Neighborhood to Turn Huge Profits

Katie Thomas, Jessica Silver-Greenberg - NYT - September 24, 2022

RICHMOND, Va. — In late July, Norman Otey was rushed by ambulance to Richmond Community Hospital. The 63-year-old was doubled over in pain and babbling incoherently. Blood tests suggested septic shock, a grave emergency that required the resources and expertise of an intensive care unit.

But Richmond Community, a struggling hospital in a predominantly Black neighborhood, had closed its I.C.U. in 2017.

It took several hours for Mr. Otey to be transported to another hospital, according to his sister, Linda Jones-Smith. He deteriorated on the way there, and later died of sepsis. Two people who cared for Mr. Otey said the delay had most likely contributed to his death.

“He should have been able to go to the hospital and get the treatment he needed,” Ms. Jones-Smith said. “He should have been saved.”

Ringed by public housing projects, Richmond Community consists of little more than a strapped emergency room and a psychiatric ward. It does not have kidney or lung specialists, or a maternity ward. Its magnetic resonance imaging machine frequently breaks, and was out of service for seven weeks this summer, said two medical workers at the hospital, who requested anonymity because they still work there. Standard tools like an otoscope, a device used to inspect the ear canal, are often hard to come by.

Yet the hollowed-out hospital — owned by Bon Secours Mercy Health, one of the largest nonprofit health care chains in the country — has the highest profit margins of any hospital in Virginia, generating as much as $100 million a year, according to the hospital’s financial data.

The secret to its success lies with a federal program that allows clinics in impoverished neighborhoods to buy prescription drugs at steep discounts, charge insurers full price and pocket the difference. The vast majority of Richmond Community’s profits come from the program, said two former executives who were familiar with the hospital’s finances and requested anonymity because they still work in the health care industry.

The drug program was created with the intention that hospitals would reinvest the windfalls into their facilities, improving care for poor patients. But Bon Secours, founded by Roman Catholic nuns more than a century ago, has been slashing services at Richmond Community while investing in the city’s wealthier, white neighborhoods, according to more than 20 former executives, doctors and nurses.

“Bon Secours was basically laundering money through this poor hospital to its wealthy outposts,” said Dr. Lucas English, who worked in Richmond Community’s emergency department until 2018. “It was all about profits.”

More than half of all hospitals in the United States are set up as nonprofits, a designation that allows them to make money but avoid paying taxes. Although Bon Secours has taken a financial hit this year like many other hospital systems, the chain made nearly $1 billion in profit last year at its 50 hospitals in the United States and Ireland and was sitting on more than $9 billion in cash reserves. It avoids at least $440 million in federal, state and local taxes every year that it would otherwise have to pay, according to an analysis by the Lown Institute, a nonpartisan think tank.

In exchange for the tax breaks, the Internal Revenue Service requires nonprofit hospitals to provide a benefit to their communities. But an investigation by The New York Times found that many of the country’s largest nonprofit hospital systems have drifted far from their charitable roots. The hospitals operate like for-profit companies, fixating on revenue targets and expansions into affluent suburbs.

Many of these hospitals have for years slashed staffing levels, leaving them unprepared for a flood of severely ill Covid-19 patients. Others, borrowing tricks from business consultants, have trained staff to squeeze payments from poor patients who should be eligible for free care.

In a statement, a spokeswoman for Bon Secours Mercy Health said the hospital system had spent nearly $10 million on improvements to Richmond Community Hospital since 2013, including opening a pharmacy and renovating the cafeteria, emergency department and other areas. The chain also invested nearly $9 million since 2018 in the neighborhood surrounding the hospital, she said.

Bon Secours’s chief executive, John M. Starcher Jr., made about $6 million in 2020, according to the most recent tax filings.

“Our mission is clear — to extend the compassionate ministry of Jesus by improving the health and well-being of our communities and bring good help to those in need, especially people who are poor, dying and underserved,” the spokeswoman, Maureen Richmond, said. Bon Secours did not comment on Mr. Otey’s case.

In interviews, doctors, nurses and former executives said the hospital had been given short shrift, and pointed to a decade-old development deal with the city of Richmond as another example.

In 2012, the city agreed to lease land to Bon Secours at far below market value on the condition that the chain expand Richmond Community’s facilities. Instead, Bon Secours focused on building a luxury apartment and office complex. The hospital system waited a decade to build the promised medical offices next to Richmond Community, breaking ground only this year.

‘Glorified Emergency Room’

For Dr. Richard Jackson, 69, an internal medicine specialist whose family has been caring for patients in this city for more than a century, walking the mostly empty halls of Richmond Community Hospital is a painful reminder of what has been lost.

The hospital was founded in 1907 by Black doctors who were not allowed to work at the white hospitals across town. In the 1930s, Dr. Jackson’s grandfather, Dr. Isaiah Jackson, mortgaged his house to help pay for an expansion of the hospital. His father, also a doctor, would take his children to the hospital’s fund-raising telethons.

In 1980, Richmond Community moved to its current site in the East End neighborhood, where there was no other hospital. The modest building did not have an emergency room or a maternity ward. But in addition to the intensive care unit, it had specialists in cancer as well as heart and lung disease. Dr. Jackson recruited many of them from Howard University, where he had attended medical school.

But in the 1990s, the changing health care industry threatened the hospital’s survival. Large insurance companies began requiring customers to use specific networks of hospitals and doctors, in a bid to pressure providers to lower their rates. Independent institutions like Community — as it is known in the neighborhood — could not compete with larger chains, and the hospital struggled to attract patients.

The doctors, who owned the hospital as part of a for-profit partnership, sold it to Bon Secours in 1995.

Bon Secours was one of the dominant players in Richmond, with major medical centers throughout the city. It initially invested in the hospital, opening the emergency department, according to a history of Richmond Community by Cassandra Newby-Alexander at Norfolk State University.

But as the years passed, Bon Secours began stripping the hospital’s services, including the I.C.U. The unit had only five beds, but doctors regarded it as the heart of the hospital, the place to provide critical care for the sickest patients and those recovering from major surgery.

Removing the I.C.U. “really takes the meat and potatoes out of being a hospital,” Dr. Jackson said. “It’s a glorified emergency room.”

With the I.C.U. closed, the hospital’s two lung specialists had nowhere to treat critically ill patients. They retired, and Bon Secours did not replace them. A team of cardiologists left a few years later. Other specialists, including gastrointestinal doctors and neurologists who were part of Bon Secours’s broader network, rarely treated patients at Richmond Community.

Doctors and nurses said that when they had protested the closure of the I.C.U. and other cuts, Bon Secours argued that patients could still receive care at the chain’s other hospitals.

But that promise was undermined by the arrival of the coronavirus, which disproportionately affected Black and low-income residents in the East End. In the census tract that includes Richmond Community Hospital, the Covid death rate has been 81 percent higher than the city’s overall rate, according to data provided by the Virginia Department of Health.

In the summer of 2021, as the Delta variant surged through the city, a woman in the emergency room with Covid declined and needed an I.C.U. with a ventilator, according to three people involved in her case.

For hours, the staff couldn’t get her to another hospital. Eventually, she was transferred to Memorial Regional Medical Center, also owned by Bon Secours, but died after arriving. Her death left some who had cared for her at Community wondering if she would have survived had she shown up at a different hospital.

Bon Secours declined to comment on whether the hospital’s lack of an I.C.U. contributed to the Covid death toll.

The pandemic exacerbated a problem that doctors and nurses said they had long faced — getting patients access to other hospitals in the Bon Secours system.

The East End is home to Richmond’s largest Black population and, despite recent interest from real estate investors, lacks some basic services. In 2019, it got its first supermarket.

In some of the neighborhoods surrounding the hospital, more than half the households do not have a car, according to research done by Virginia Commonwealth University. The public bus route to St. Mary’s, a large Bon Secours facility in the northwest part of the city, takes more than an hour. There is no public transportation from the East End to Memorial Regional, nine miles away.

“It became impossible for me to send people to the advanced heart valve clinic at St. Mary’s,” said Dr. Michael Kelly, a cardiologist who worked at Richmond Community until Bon Secours scaled back the specialty service in 2019. He said he had driven some patients to the clinic in his own car.

Richmond Community has the feel of an urgent-care clinic, with a small waiting room and a tan brick facade. The contrast with Bon Secours’s nearby hospitals is striking.

At the chain’s St. Francis Medical Center, an Italianate-style compound in a suburb 18 miles from Community, golf carts shuttle patients from the lobby entrance, past a marble fountain, to their cars.

Dr. Samuel Hunter, 81, who worked for more than four decades as a pathologist at Richmond Community until he left in May, said the disparity reminded him of his childhood in segregated Florida, where Black children like him learned from textbooks that white students had already used.

“I know what it feels like to have secondhand things,” he said.

A Lucrative Drug Program

When Bon Secours bought Richmond Community, the hospital served predominantly poor patients who were either uninsured or covered through Medicaid, which reimburses hospitals at lower rates than private insurance does. But Bon Secours turned the hospital’s poverty into an asset.

The organization seized on a federal program created in the 1990s to give a financial boost to nonprofit hospitals and clinics that serve low-income communities. The program, called 340B after the section of the federal law that authorized it, allows hospitals to buy drugs from manufacturers at a discount — roughly half the average sales price. The hospitals are then allowed to charge patients’ insurers a much higher price for the same drugs.

The theory behind the law was that nonprofit hospitals would invest the savings in their communities. But the 340B program came with few rules. Hospitals did not have to disclose how much money they made from sales of the discounted drugs. And they were not required to use the revenues to help the underserved patients who qualified them for the program in the first place.

In 2019, more than 2,500 nonprofit and government-owned hospitals participated in the program, or more than half of all hospitals in the country, according to the independent Medicare Payment Advisory Commission.

Starting in the mid-2000s, big hospital chains figured out how to supercharge the program. The basic idea: Build clinics in wealthier neighborhoods, where patients with generous private insurance could receive expensive drugs, but on paper make the clinics extensions of poor hospitals to take advantage of 340B.

Since 2013, Bon Secours has opened nine such satellite clinics in wealthier parts of the Richmond area, according to federal records. Even though the outposts are miles from Richmond Community, they are legally structured as subsidiaries of the hospital, which entitles them to buy drugs at the discounted rate.

The Bon Secours Cancer Institute at St. Mary’s, for example, administers cancer drugs to patients in an office suite on the tree-lined campus of St. Mary’s Hospital.

Thanks to 340B, Richmond Community Hospital can buy a vial of Keytruda, a cancer drug, at the discounted price of $3,444, according to an estimate by Sara Tabatabai, a former researcher at Memorial Sloan Kettering Cancer Center.

But the hospital charges the private insurer Blue Cross Blue Shield more than seven times that price — $25,425, according to a price list that hospitals are required to publish. That is nearly $22,000 profit on a single vial. Adults need two vials per treatment course.

The way hospitals use the 340B program is “nakedly capitalizing on programs that are intended to help poor people,” said Dr. Peter B. Bach, a biotechnology executive and researcher whose work has shown that hospitals participating in the 340B program have increasingly opened clinics in wealthier areas since the mid-2000s.

Bon Secours did not disclose how much money it earned through the program, but said the funds “help us address health disparities while providing community support and outreach.” It said it had provided nearly $18 million in free care to poor patients at Richmond Community Hospital since 2018. In 2020, the hospital provided $3.8 million in free care to low-income patients, or about 2.6 percent of its total expenses, slightly above the national average.

The federal agency that oversees the 340B program, the Health Resources and Services Administration, said that hospitals and clinics were regularly audited, and that the Biden administration had proposed requiring them to report how they spent profits generated through the program. Such a change would require congressional approval.

In 2020, the most recent year for which data is available, Richmond Community Hospital — including its satellite offices — had a profit margin of nearly 44 percent, the highest in the state, according to an analysis by Virginia Health Information, a nonprofit group that collects financial data from hospitals.

That year, the hospital brought in more than $110 million in revenue, after expenses and losses were deducted, according to Virginia Health Information. According to two former Bon Secours executives familiar with the hospital’s financial operations, the vast majority of Richmond Community’s profit since 2013 has come from the 340B program.

Bon Secours’s other hospitals have not done as well. St. Mary’s, considered the most prestigious Bon Secours facility in Richmond, brought in $83 million in 2020.

‘Unabashedly Profit-Oriented’

On a sunny October day in Richmond in 2012, two cheerleaders for Washington’s National Football League team smiled for cameras as they gripped a large sign between them.

“Bon Secours Training Center,” read the sign, which combined the Bon Secours fleur-de-lis logo with a bust of a Native American, the football team’s logo at the time.

The team, Bon Secours and the State of Virginia were unveiling a major economic deal that would bring $40 million to Richmond, add 200 jobs and keep the Washington team — now known as the Commanders — in the state for summer training.

The deal had three main parts. Bon Secours would get naming rights and help the team build a training camp and medical offices on a lot next to Richmond’s science museum.

The city would lease Bon Secours a prime piece of real estate that the chain had long coveted for $5,000 a year. The parcel was on the city’s west side, next to St. Mary’s, where Bon Secours wanted to build medical offices and a nursing school.

Finally, the nonprofit’s executives promised city leaders that they would build a 25,000-square-foot medical office building next to Richmond Community Hospital. Bon Secours also said it would hire 75 local workers and build a fitness center.

“It’s going to be a quick timetable, but I think we can accomplish it,” the mayor at the time, Dwight C. Jones, said at the news conference.

Today, physical therapy and doctors’ offices overlook the football field at the training center.

On the west side of Richmond, Bon Secours dropped its plans to build a nursing school. Instead, it worked with a real estate developer to build luxury apartments on the site, and delayed its plans to build medical offices. Residents at The Crest at Westhampton Commons, part of the $73 million project, can swim in a saltwater pool and work out on communal Peloton bicycles. On the ground floor, an upscale Mexican restaurant serves cucumber jalapeño margaritas and a Drybar offers salon blowouts.

The land next to Richmond Community Hospital, by contrast, remained inactive until February of this year, when Bon Secours broke ground on the complex.

Former executives at the chain said a series of management changes in Bon Secours’s Richmond region, coupled with a change in mayoral administrations, had distracted attention from the project. And a merger with an Ohio hospital chain in 2018 accelerated the push for higher revenues, according to former administrators and doctors.

“There was a major shift from being mission-oriented to being unashamedly, unabashedly profit-oriented,” said Dr. Jones, the former mayor who helped broker the original deal.

Bon Secours said that since 2018, it had spent more than $19 million supporting organizations and initiatives throughout metropolitan Richmond, including more than $8 million on local businesses and charities in the East End. The work near Richmond Community Hospital is projected to be finished by the end of this year. Hospital executives have said they plan to house mental health, hospice and other services there.

Disaster Medicine

For years, doctors and nurses at Richmond Community have often felt as if they were working on a battlefield, doing their best with severely limited supplies and facilities.

Kristen Schnurman, who began her career as a physician assistant at Bon Secours in 2014 and left in 2019, said she had once confided in a doctor that she was not learning proper medical care.

“He said to me — and this will always stick with me — ‘You’re not learning medicine, you’re learning disaster medicine,’” she said.

In the summer of 2016, with temperatures soaring past 90 degrees, the hospital’s air-conditioning went out for several weeks, making it hotter inside than out on the street.

When asked about the air-conditioning and lack of basic supplies at Richmond Community, Bon Secours declined to comment. Ms. Richmond, the Bon Secours spokeswoman, said it would replace the M.R.I. machine as part of a $5.3 million capital improvement plan.

Dr. Kelly, the cardiologist, stopped treating patients at the hospital in 2019. But there is one man’s story that haunts him.

The man, who was in his 50s, arrived at the emergency room showing signs of a heart attack. To prevent permanent damage, the man needed to be swiftly catheterized, a procedure that would insert a balloon into his blocked artery and force it open.

Bon Secours did not have the tools for the catheterization, so Dr. Kelly arranged for the patient to be transferred quickly to Memorial Regional.

But Memorial could not guarantee a bed would be ready, Dr. Kelly said. So the patient waited for several hours in the Community emergency room. “All we could do was watch it happen,” Dr. Kelly recalled.

The patient survived, he said, but the delay damaged his heart. For the rest of his life, the man will be at risk for extreme fatigue and dangerously low blood pressure, Dr. Kelly said.

Every time that Bon Secours took away a service from Community, executives gave doctors the same justification: Patients were just an ambulance ride away from hospitals in the broader system.

But Dr. Kelly and other doctors said many patients had wound up like the man with the heart attack. “We very, very often were stuck for many hours with patients who absolutely needed advanced care,” Dr. Kelly said.

Other patients faced a different problem: Specialists who saw patients at other Bon Secours locations would not travel to the hospital.

This spring, Doris Scarborough, 79, went to Richmond Community to have her toe partly amputated. Poor circulation had turned the toe black and gangrenous. She said her podiatrist had told her that she would lose some of her toe, but was likely to keep her leg if she had a standard procedure known as revascularization.

Richmond Community did not offer this procedure. Ms. Scarborough had to have it done at the specialist’s office, and it took more than two weeks to get an appointment. Weeks after the procedure, Ms. Scarborough lost her entire toe.

Dr. Foluso Fakorede, a cardiologist and an expert on racial disparities in amputation, said many people in poor, nonwhite communities faced similar delays in getting the procedure. “I am not surprised by what’s transpired with this patient at all,” he said.

Because Ms. Scarborough does not drive, her nephew must take time off work every time she visits the vascular surgeon, whose office is 10 miles from her home. Richmond Community would have been a five-minute walk. Bon Secours did not comment on her case.

“They have good doctors over there,” Ms. Scarborough said of the neighborhood hospital. “But there does need to be more facilities and services over there for our community, for us.”

Susan C. Beachy contributed research.

https://www.nytimes.com/2022/09/24/health/bon-secours-mercy-health-profit-poor-neighborhood.html

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Monday, September 26, 2022

Health Care Reform Articles - September 26, 2022