Opinion As basic health care grows unaffordable, the rich seek eternal youth
by Helaine Olen - Washington Post - February 6, 2023
When Gov. Gavin Newsom (D-Calif.) met with the survivors of a California mass shooting in Half Moon Bay last month, a survivor told him he needed to get out of the hospital ASAP — he feared he couldn’t pay his medical bills and could lose his job if he didn’t quickly return to work. “I can’t afford to spend any more time here. I don’t have the money,” Newsom, speaking at a news conference, said the man told him.
The same week, Bloomberg Businessweek published a profile of Bryan Johnson, described as a tech “centimillionaire,” who, just a few hundred miles down the California coast in Venice, is spending $2 million annually on longevity treatments, not to mention multiple MRIs and colonoscopies to measure the results of his attempts to turn his personal clock backward. Johnson, according to Bloomberg, has more than two dozen doctors and medical consultants on call and has built his own in-home “medical suite.”
This is American health care, circa 2023. It’s state of the art and then some — if you’ve got the money. For almost everyone else, any encounter with the medical industrial complex can result in severe financial harm. A recent survey showed just how bad the problem is: a record number of Americans said they had forgone medical care over the past year because they couldn’t afford it. In a poll released Monday, the Pew Research Center found reducing health-care costs was the public’s second top priority, coming in behind only improving the economy and ahead of reducing crime and the drug crisis.
We like to say there’s no amount of money that can make up for a lack of good health. That’s true, but we forget to mention money increases the odds you will enjoy more and healthier years on the planet.
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The wealthy seemingly miss no opportunity to spend on improving their health. Finding an in-network doctor is no concern when you can spend thousands of dollars a year on concierge medical practices, which is experiencing its market grow at a brisk 10 percent rate.
And then there is the craze for longevity and rejuvenation that has captivated Johnson, which is sweeping the moneyed world in general and Silicon Valley in particular. There are billionaires rumored to undergo regular blood transfusions from the young, in hopes of improving their own health. Stem cell treatments, marketed as doing everything from preventing joint deterioration to improving skin appearance, are booming, despite the fact treatment costs run into the four and five figures, are largely unproven and are almost all uncovered by insurance.
Money is pouring into corporate efforts to increase the human life span, too. Alphabet Inc.’s Calico Labs is researching “the biology of aging and longevity.” The start-up Altos Labs, funded by private investors, is researching reprogramming cells to allow humans to turn back the clock.
But even as billionaires seek eternal youth, millions of Americans are facing a more devastating reality. The age of inequality has been dreadful for our collective well-being. The life span of the typical American has slipped from almost 79 years in 2019 to just over 76 years in 2021, even as stock market profits soar.
Enrollment in Affordable Care Act plans is at record levels, but that’s a number driven not just by expanded subsidies but also by a falling rate of small businesses offering health insurance. A majority of Americans under the age of 65 with employer-provided health insurance have high-deductible health insurance plans, which many can’t afford to use. Claim denials are increasing, and the parents of children with cancer report fighting with insurance giants to get them to cover medically appropriate care. Experts are bracing for a plunge in the number of Americans covered under Medicaid as pandemic restrictions on states kicking people off the program end beginning in April.
These two worlds — of the wealthy pursuing ever more fantastic out-of-pocket medical interventions while millions of others find it difficult to access basic care — are not unrelated, says Doug Rushkoff, author of “Survival of the Richest: Escape Fantasies of the Tech Billionaires.” “It’s not that the homeless and impoverished people are being ignored by the wealthy. They are the very impetus for these escape fantasies to begin with. They represent the death and decay that the tech bros want to deny.”
Fear of death is a primal human emotion. The ancients sought healing waters, while the wealthy of the 19th and early 20th centuries traveled to Swiss sanitariums to try to beat back diseases such as tuberculosis. The covid-19 era lockdowns were, in many ways, a retreat to centuries past by the wealthy, who fled to the countryside to avoid our modern plague much the way medieval aristocrats did to avoid the Black Death.
Today, the wealthy world’s obsession with preventing aging continues this long aristocratic tradition. In a world where money can buy almost everything, going to elaborate lengths to extend life itself while so many Americans suffer without health care might just be the ultimate form of conspicuous consumption.
https://www.washingtonpost.com/opinions/2023/02/06/american-health-care-disparity-rich/
Severely understaffed hospitals shouldn’t be buying Super Bowl ads
Farzon A. Nahvi is an emergency medicine physician and the author of “Code Gray: Death, Life, and Uncertainty in the ER.”
For many health-care workers watching the Super Bowl in recent years, the hardest hits have often come not during gameplay but in the commercial breaks.
Emergency rooms across the country have become chronically overcrowded and understaffed. Hospitals often claim they don’t have the funds to hire more employees to meet the urgent needs of patients. Yet in between Super Bowl advertisements for Flamin’ Hot Cheetos and Bud Light Seltzer Hard Soda, it’s now commonplace to see commercials for institutions such as the University of Rochester Medical Center, NYU Langone Health and Inspira Health.
To understand why this situation is so troublesome, we must first appreciate the stakes: Hospital crowding, which gets worse when institutions are understaffed, is a national problem — and a deadly one. Multiple studies have demonstrated that overcrowding is directly associated with an increase in patient mortality.
To make matters worse, a 2016 report by the American College of Emergency Physicians found that over 90 percent of American emergency rooms are routinely crowded; that number has only increased since then. If you’ve been to an emergency room recently, the overwhelming odds are that it was packed. As a result, your chances of dying were higher than they should have been.
Given what’s at stake, one would assume that hospitals would invest in a solution: If they were to simply hire more staff, the ratio of patients to nurses and doctors would be lowered — and lives would be saved.
But hospitals have been doing the opposite.
A recent investigation by the New York Times revealed that many American hospitals have spent years pursuing an “industrywide movement” of keeping labor costs low by wringing “more work out of fewer employees.” Indeed, hospital administrators often measure success by determining how much they can lower operating expenses by reducing the number of “employees per occupied bed.” In other words, low staffing levels are not a result of the coronavirus pandemic, staff burnout or a tight labor market — they are a business model.
Simultaneously, as hospitals save money by cutting staffing, hospital marketing budgets have skyrocketed. According to a report in the Journal of the American Medical Association, between 2004 and 2016, direct-to-consumer advertising by hospitals and health-care systems jumped 74 percent to $1.4 billion per year.
A brief stroll through New York City reveals billboards in Times Square, posters on bus stops and in subway stations, illuminated signs on city taxis, and newsstands full of magazines flush with advertisements for local hospitals. Prime-time TV slots feature ads from cancer centers and children’s hospitals. And beyond simply advertising during the Super Bowl, health-care systems have become official corporate partners of the Super Bowl.
As hospitals invest liberally in marketing while tightening their wallets when it comes to bedside patient care, it’s hard to view the billions spent on ads as anything other than waste.
Many hospital executives would say that deciding whether to spend on advertising or patient care presents a false choice. They would insist that marketing is a necessary operating expense that a modern hospital must invest in to succeed. This argument is often referred to as “no margin, no mission” — a shorthand way of saying that for a hospital to perform good work, it must first generate the money with which to do so.
On the surface, this argument seems reasonable. But when hospital wings are closing because of staffing shortages, nurses are being asked to attend to more than four to five times the patients they can safely care for, and firefighters and the National Guard are stepping in to provide what hospitals themselves are failing to, can it really be argued that spending on television commercials remains a necessity?
If spending on advertisements is nonnegotiable but hiring enough nurses to save patients’ lives isn’t, who is our health-care system truly serving? At what point can it be said that this system has lost its way and the margin has, in fact, become the mission?
Legislators in several states, including Massachusetts, Oregon and Washington, are trying to rectify the situation by considering legislation that would mandate safe staffing ratios. Predictably, hospital lobbying organizations say they “strongly oppose” these legislative attempts, citing the “financial burden” of higher operating costs that such laws would impose.
In light of these claims, these bills should go a step further. They should also ban hospitals from engaging in costly direct-to-consumer advertising. What better way to save billions of dollars to offset the “financial burden” of hiring more lifesaving medical personnel?
The Super Bowl provides us with a clarifying lens. It is American television’s most watched event and its most expensive airtime, and the very idea of hospitals advertising during the game is symbolic. It heralds an era when it’s no longer unusual for enormous amounts of money to be frivolously spent faster than a single touchdown play, while at the same time nurses are going on strike to demand safe staffing levels for their patients.
So when people see any TV commercial or billboard highlighting a hospital system’s quality of care, then walk into that same hospital system’s emergency room only to find it dangerously overcrowded and understaffed, it is worth connecting the dots. Imagine how many lives would be saved if only we were to take the bold step of demanding that our health-care dollars be spent on actual health care.
How Doctors Can Use Medical Billing to Sabotage Abortion Bans
In January 2003, 39 surgeons in West Virginia went on strike and successfully forced a change in state law. Within weeks, this inspired thousands of doctors in New Jersey to follow suit; they collectively refused to provide medical care, except for emergency services, in order to put pressure on state lawmakers to yield to their demands. Both of these coordinated political actions were illegal. No one was prosecuted for them.
Given that roughly 80 million Americans were uninsured and systematically excluded from medical care in a for-profit system that contributed to tens of thousands of preventable deaths each year, you might expect the striking doctors were trying to ensure healthcare for their patients. If so, you would be wrong. The doctors’ goal in both of these cases was far less principled: they simply wanted to lower the caps on their malpractice liability.
Although they were not in service of particularly noble causes, these instances of legal defiance underline the fact that while U.S. doctors have historically insisted that healthcare shouldn’t be ‘politicized,’ we have long recognized that healthcare is intrinsically political and have organized accordingly. It’s simply that the causes around which doctors have coordinated our political efforts have almost always pertained to our own financial interests rather than patient-centered issues like universal healthcare access, public health, or patient safety. The same political strategies we’ve used before, however, could easily be used for other purposes more in line with our ethical responsibilities to our patients.
Specifically, as reproductive health care rights are under acute assault across more than a dozen states after five unelected Supreme Court justices overruled Roe v. Wade, doctors in these places could now organize to thwart unjust laws and provide medical care for pregnant people in need. To do so, we might look to the long American tradition of civil disobedience—as well as our extensive power over medical billing.
In 2005, Robert Macauley proposed in The Hastings Center Report, a leading bioethics journal, that U.S. physicians should engage in civil disobedience to ensure healthcare access for those excluded from care. He argued that doctors have both the practical means and ethical duty to “compel the government to fulfill its obligation of guaranteeing basic health care for all Americans, under threat of medical anarchy,” by which he meant the coordinated billing of medical care for uninsured patients under the names of those with Medicare and Medicaid coverage.
Macauley wrote:
The threat itself may be enough to force the government to realize that while special interests (like the health insurance industry) have the money, physicians themselves have the power to document and bill and therefore to change the system. For the sake of the tens of millions of patients currently without health insurance, physicians must be willing to risk much of what they hold dear: their reputations, their incomes, their status in society. Only through self-sacrifice will sea change be effected, but with sufficient devotion and commitment, the goal is attainable.
Two decades later—when more than 31 million Americans remain uninsured, thousands continue to die each month due to for-profit healthcare exclusion, and U.S. doctors are rewarded with the world’s highest physician incomes—the medical profession has yet to take such risks. Now, in the wake of the Supreme Court’s decision on abortion care, the majority of doctors, hospitals, and organizations like Planned Parenthood are not only declining to resist legal restrictions that further deny care to our patients; many are preemptively canceling appointments and denying people abortion care in anticipation of possible future liability.
This behavior is in line with the observations of historian Timothy Snyder, who has written, “Most of the power of authoritarianism is freely given. In times like these, individuals think about what a more repressive government will want, and then offer themselves without being asked. A citizen who adapts in this way is teaching power what it can do.” For doctors in America’s famously hierarchical and risk-averse medical culture, we have long been trained to obey the rules without questioning them; when the rules contravene our mandate to provide care, however, we must check our ingrained impulses.
Doctors in America now face a choice: we can submit to legal decisions—imposed by an anti-democratic institution—that harm our patients while we enjoy the benefits of complicity with state-sanctioned violence, or we can organize to provide care to our patients while accepting the personal hazards that come with fulfilling our ethical obligations as privileged caregivers.
As moral philosopher John Rawls wrote, in the practice of civil disobedience, “We must pay a certain price to convince others that our actions have, in our carefully considered view, a sufficient moral basis in the political convictions of the community.” By defying the law and aligning ourselves with our patients rather than repressive legal systems, some doctors may incur professional penalties or even criminal prosecution. This may be unavoidable in some cases, but a politics predicated primarily on heroic individual self-sacrifice is not a viable path forward.
What we need is strategic, organized refusals to cooperate with unjust laws such that we take on risk not as isolated doctors but as coordinated collectives. Work stoppages, which would in many instances not just inconvenience administrators and officials but also harm our patients, are not our only option. In America’s fee-for-service healthcare system that’s been so thoroughly constructed around billing codes, documentary disobedience may be our most effective tactic.
Rather than recording abortion care under an individual doctor’s name, for example, the entire staff of a hospital or clinic could co-sign in open violation of repressive laws. Alternatively, we could together refuse to document or bill for abortion and prenatal care prior to fetal viability at twenty-four weeks’ gestation, instead filing this care under other medical billing codes and shifting its cost to the rest of our healthcare systems. Going further, to demand changes to unjust laws, we could strategically send public and private insurance systems into chaos within days via organized false billing without ever interrupting delivery of services to our patients. In all of this, we would need to compel our healthcare institutions, which depend on their physician employees and cannot operate without us, to join in refusing to comply with legal obstructions to care.
Healthcare’s powerful professional organizations, such as the American Medical Association, American Nurses Association, and the American College of Obstetricians and Gynecologists, for example, could use their resources to help organize healthcare workers and issue guidance on how to document care to circumvent individual legal liability insofar as possible. They could also petition private healthcare companies to donate to this cause, put pressure on state medical boards to refuse to pursue punitive measures against doctors and nurses who break abortion laws in service of patient care, and guarantee legal and economic support for healthcare workers if they are legally threatened for providing medically appropriate care.
With careful preparation, we should challenge those states seeking to criminalize abortion care to prosecute tens of thousands of their doctors and put hundreds of their hospitals out of operation. Dare state governments to bring their entire healthcare systems to a standstill. Make those who would seek to deny abortion care to their constituents face consequences. Few politicians, if any, would see this through if the medical profession used its full power to oppose them. And if they are foolish enough to try and if doctors are committed enough to hold their ethical ground, those politicians would not remain in power for long.
By embracing a politics of care rather than of compliance, American physicians have an opportunity to rectify our historical failures to show up politically for our patients and for healthcare as a right. We should together heed the advice of Henry David Thoreau, who wrote in On the Duty of Civil Disobedience, “Cast your whole vote, not a strip of paper merely, but your whole influence. A minority is powerless while it conforms to the majority; it is not even a minority then; but it is irresistible when it clogs by its whole weight.” The weight of one million American physicians would be considerable.
https://slate.com/news-and-politics/2022/08/doctors-defy-abortion-bans-medical-billing.html
How Did Health Care Get to Be Such a Mess?
By Christy Ford Chapin - NYT -
Both parties have stumbled to enact comprehensive health care reform because they insist on patching up a rickety, malfunctioning model. The insurance company model drives up prices and fragments care. Rather than rejecting this jerry-built structure, the Democrats’ Obamacare legislation simply added a cracked support beam or two. The Republican bill will knock those out to focus on spackling other dilapidated parts of the system.
An alternative structure can be found in the early decades of the 20th century, when the medical marketplace offered a variety of models. Unions, businesses, consumer cooperatives and ethnic and African-American mutual aid societies had diverse ways of organizing and paying for medical care.
Physicians established a particularly elegant model: the prepaid doctor group. Unlike today’s physician practices, these groups usually staffed a variety of specialists, including general practitioners, surgeons and obstetricians. Patients received integrated care in one location, with group physicians from across specialties meeting regularly to review treatment options for their chronically ill or hard-to-treat patients.
Individuals and families paid a monthly fee, not to an insurance company but directly to the physician group. This system held down costs. Physicians typically earned a base salary plus a percentage of the group’s quarterly profits, so they lacked incentive to either ration care, which would lose them paying patients, or provide unnecessary care.
This contrasts with current examples of such financing arrangements. Where physicians earn a preset salary — for example, in Kaiser Permanente plans or in the British National Health Service — patients frequently complain about rationed or delayed care. When physicians are paid on a fee-for-service basis, for every service or procedure they provide — as they are under the insurance company model — then care is oversupplied. In these systems, costs escalate quickly.
Unfortunately, the leaders of the American Medical Association saw early health care models — union welfare funds, prepaid physician groups — as a threat. A.M.A. members sat on state licensing boards, so they could revoke the licenses of physicians who joined these “alternative” plans. A.M.A. officials likewise saw to it that recalcitrant physicians had their hospital admitting privileges rescinded.
The A.M.A. was also busy working to prevent government intervention in the medical field. Persistent federal efforts to reform health care began during the 1930s. After World War II, President Harry Truman proposed a universal health care system, and archival evidence suggests that policy makers hoped to build the program around prepaid physician groups.
A.M.A. officials decided that the best way to keep the government out of their industry was to design a private sector model: the insurance company model.
In this system, insurance companies would pay physicians using fee-for-service compensation. Insurers would pay for services even though they lacked the ability to control their supply. Moreover, the A.M.A. forbade insurers from supervising physician work and from financing multispecialty practices, which they feared might develop into medical corporations.
With the insurance company model, the A.M.A. could fight off Truman’s plan for universal care and, over the next decade, oppose more moderate reforms offered during the Eisenhower years.
Through each legislative battle, physicians and their new allies, insurers, argued that federal health care funding was unnecessary because they were expanding insurance coverage. Indeed, because of the perceived threat of reform, insurers weathered rapidly rising medical costs and unfavorable financial conditions to expand coverage from about a quarter of the population in 1945 to about 80 percent in 1965.
But private interests failed to cover a sufficient number of the elderly. Consequently, Congress stepped in to create Medicare in 1965. The private health care sector had far more capacity to manage a large, complex program than did the government, so Medicare was designed around the insurance company model. Insurers, moreover, were tasked with helping administer the program, acting as intermediaries between the government and service providers.
With Medicare, the demand for health services increased and medical costs became a national crisis. To constrain rising prices, insurers gradually introduced cost containment procedures and incrementally claimed supervisory authority over doctors. Soon they were reviewing their medical work, standardizing treatment blueprints tied to reimbursements and shaping the practice of medicine.
It’s easy to see the challenge of real reform: To actually bring down costs, legislators must roll back regulations to allow market innovation outside the insurance company model.
In some places, doctors are already trying their hand at practices similar to prepaid physician groups, as in concierge medicine experiments like the Atlas MD plan, a physician cooperative in Wichita, Kan. These plans must be able to skirt state insurance regulations and other laws, such as those prohibiting physicians from owning their own diagnostic facilities.
Both Democrats and Republicans could learn from this lost history of health care innovation.
Christy Ford Chapin is an associate professor of history at the University of Maryland, Baltimore County, a visiting scholar at Johns Hopkins University and the author of “Ensuring America’s Health: The Public Creation of the Corporate Health Care System.”
The Medicine Is a Miracle, but Only if You Can Afford It
A wave of new treatments have cured devastating diseases. When the costs are too much, even for the insured, patients hunt for other ways to pay.
by Gina Kolata and Francesca Paris - NYT - February 7, 2023
April Crawford never thought she’d be begging for help on GoFundMe, but she has run out of options. She has multiple sclerosis, and Mavenclad, the drug that could slow her decline, has a list price of $194,000 a year. Her Medicare insurance will pay for most of it, but she has a co-pay of $10,000.
Ms. Crawford, 47, doesn’t have $10,000 and has no way to get it. A law signed last year will put a $2,000 annual limit on out-of-pocket costs for Medicare patients like her — but not until 2025. Even at that price, money is tight in her household. She and her husband, who is disabled with COPD, live in Oliver Springs, Tenn., with a nephew who was disabled by a traumatic brain injury. All three of them rely on federal disability payments.
So she posted an appeal on GoFundMe in August. At the time this article was published, she had raised $20.
Ms. Crawford has come face to face with a persistent dilemma in medical care. Advances in science and immense investments by the federal government and drug companies have completely altered prospects for people with conditions that seemed untreatable in almost every area of medicine — cancers, allergies, skin diseases, genetic afflictions, neurological disorders, obesity.
“This is the golden age of drug discovery,” said Dr. Daniel Skovronsky, chief scientific and medical officer of Eli Lilly and Company, which has new treatments for obesity, mantle cell lymphoma and Alzheimer’s.
Prices reflect the inherently costly and fundamentally different way drugs are developed and tested today. But, he said, the burden on patients who cannot afford life changing new drugs weighs heavily on him and others who work for drug companies.
For many people using private insurance, innovative medicines are dangling just out of reach. Even when Medicare’s 2025 cap comes into play — or the $9,100 cap that already existed for those receiving insurance under the Affordable Care Act — many will still find drugs unaffordable. Research suggests large numbers of patients abandon their prescriptions when faced with $2,000 in payments.
One telltale sign that a treatment is working, experts say, is a widening chasm in outcomes between wealthy patients and everyone else. This is in part because when the prices for miracle drugs reach hundreds of thousands or even millions of dollars, many people do not fill prescriptions simply because they cannot afford them.
Underlying the data that quantify these problems are individual stories about patients, like Ms. Crawford, who have tried desperately to find a way to pay for expensive drugs that could make a big difference in their lives. A few have succeeded, often briefly and tenuously, while many others do not. And those experiences produce consequences — cures only for a select few.
Costly Cures
The new era in treating previously intractable diseases began with huge scientific leaps after the turn of the century, allowing researchers to find genes they could target to treat cancers and other diseases. Scientists could harness the immune system or suppress it and even alter patients’ very DNA with gene therapy.
“Today’s drugs are more effective because they target the biology of disease ,” said Dr. Skovronsky of Eli Lilly, with few side effects.
He called previous drugs to treat diseases like psoriasis or rheumatoid arthritis “blunt instruments” that shut down the immune system but had serious side effects.
“Yesterday’s drugs were moderately effective in treating a broader population,” he added.
But the drugs that have emerged often are extremely expensive to produce. At Lilly, Dr. Skovronsky said, the company will be spending more than $8 billion in 2023 on drug research and development.
“Some of that money goes to failures, some goes to basic research, some goes to clinical trials and some goes to drugs that actually work,” he said.
Not only are the new drugs costly to research and develop but some treatments are for just a few patients with very rare diseases and some, like gene therapy, are used only once rather than over a person’s lifetime.
The prices of today’s remedies reflect all those factors.
Researchers for Brigham and Women’s Hospital in Massachusetts found that the median price of a new drug was around $180,000 in 2021, up from $2,100 in 2008.
Those high prices are a factor in a stark wealth gap in medical outcomes. Dr. Otis Brawley, a professor of oncology and epidemiology at Johns Hopkins University, points to cancer, where the death rate for Americans with college educations, a proxy for wealth, is 90.9 per 100,000 per year. For those with a high school education or less, the rate is 247.3.
Out-of-pocket costs can run to thousands or tens of thousands of dollars. Often, even those who can afford commercial health coverage or get it through their employer may face insurers that refuse to pay. Other times, an insurer pays part of the cost, but high co-pays, deductibles and cost sharing put treatments out of reach for many.
Some doctors agonize over balancing their responsibility to prescribe effective treatments with anxieties about the financial burdens on patients.
“The idea that the care you deliver could bankrupt somebody and hurt an entire family is devastating,” said Dr. Benjamin Breyer, a reconstructive urologist at the University of California, San Francisco who has studied this issue.
The problem also affects those with Medicaid — which does not always pay for expensive drugs — and Medicare. Medicare Part D helps to pay for prescription drugs for about 50 million Americans, most of whom are older than age 65. Federal data show that the number of extremely expensive drugs Medicare patients take have more than tripled in less than a decade. Some enrollees with incomes below a set level can qualify for subsidies. Although the Inflation Reduction Act requires drug makers to refund price increases above the inflation rate to the federal government, it does not protect patients from prices that are already high.
In 2020, Medicare data included more than 150 brand-name drugs with a cost of at least $70,000 a year to the program — about the average household income for a family. In 2013, adjusting prices for inflation, there were only 40 such drugs.
Today’s ultraexpensive drugs include not just new medications, like Mavenclad, the multiple sclerosis drug that Ms. Crawford needs, but also older medications that drug companies have hiked the prices of in the last few decades.
One example is Revlimid, which treats blood cancers. Its sticker price is three times as high as it was when first introduced in 2005.
As with commercially insured patients, people enrolled in Medicare Part D pay a fraction of that total cost — but as the sticker price rises, so does their out-of-pocket burden. A study by GoodRx found that the average out-of-pocket costs for Medicare patients taking Revlimid was more than $17,000 in 2021.
Jalpa Doshi, professor of medicine at the University of Pennsylvania, reports that the high out-of-pocket costs for expensive new drugs have led to many people not filling prescriptions or getting refills, whether they are on Medicare or have private insurance.
With oral cancer medicines, including ones that can change the prognosis for patients, Dr. Doshi studied how out-of-pocket costs for the drugs — co-pays, coinsurance and deductibles — affected use of the drugs. Among those whose payments per prescription were less than $10, 10 percent abandoned their prescriptions. But about 50 percent who had to pay more than $2,000 did so. In the large group of patients she studied — around 38,000 — many had out-of-pocket costs above $500 for their first anticancer medication, and more than one in 10 had costs above $2,000.
“It’s a lethal combination — a high deductible, high coinsurance and a disease that requires a really expensive drug,” Dr. Doshi said.
A separate study of Medicare beneficiaries also found high levels of prescription abandonment — from 20 percent to 50 percent — among patients who did not qualify for subsidies and were given new prescriptions for drugs to treat cancer, hepatitis C and immune system disorders.
In other words, sick people skip treatment, even lifesaving treatment, when it costs them too much out of pocket.
‘6,000 a Month Would Ruin Us’
Bad as it is for Medicare patients, it is even worse for people with private insurance, Dr. Doshi said.
She noted that among households whose members were not old enough to qualify for Medicare, nearly one in three people who live alone and about one in five families did not have enough money to pay even $1,000 in out-of-pocket expenses.
Thousands, like Ms. Crawford, desperately searching for a way to pay for medications, have turned to GoFundMe. But most do not get nearly enough in donations, Dr. Bryer noted.
In one study, Dr. Breyer and his colleagues looked at the GoFundMe experiences of people with kidney cancer, a disease with transformative but expensive treatments. The median goal on the website was $10,000. Just 8 percent reached their goal, with $1,450 being the median amount raised.
Then there is the issue of formularies — the list of drugs an insurer will pay for. If a drug is not on a formulary, patients have to pay the full price or substitute another drug, if one is available, which may not work nearly as well. Patients may also try to appeal the insurer’s decision or apply to a company’s patient assistance program.
Scott Matsuda was hit with the formulary problem when his doctor prescribed him a new drug to treat myelofibrosis, a rare type of chronic leukemia. For years, before the drug was developed, his insurance paid for a cocktail of chemotherapy drugs that did little to slow the course of his disease and caused difficult side effects like severe mouth sores.
Then, he entered a clinical trial of Jakafi, a pill that markedly slowed his disease. He did not notice any side effects.
“It was amazing,” Mr. Matsuda said. “I was really happy.”
Three months later, the trial ended, and the F.D.A. approved Jakafi. The daily pills that were saving his life cost $6,000 a month, but Jakafi was not on his insurer’s formulary.
“We were dumbfounded,” Mr. Matsuda said. He and his wife, Jennifer, have a photography business near Seattle, but that price was totally beyond them.
“We are solidly middle-class,” Mr. Matsuda said. “We pay all our bills. We have a good credit score. Six thousand a month would ruin us.”
He went without medications for a few months but eventually returned to the chemotherapy cocktail, suffering fatigue, agonizing bone pain, nausea and mouth sores on top of the steady progression of his leukemia.
He was saved by his oncologist, who suggested that he apply to the PAN Foundation, which helps people with crushing medical bills.
The PAN Foundation assists patients with an annual income about 4 to 5 times the federal poverty level, said Amy Niles, the foundation’s chief advocacy and engagement officer. Those patients, she said, are “usually people who don’t have high incomes, who are falling through the cracks.” The foundation — supported by individuals, charities and drug companies, which can give to a general program but not in order to pay for their own drug — raises hundreds of millions of dollars a year and helps people with any of about 70 illnesses. But the need is so great, Ms. Niles said, “that we are just scratching the surface.”
Patients say they explore every avenue to find help with their medication bills.
Joan Powell, 69, has myelodysplastic syndrome. She said she hunts for foundations and applies for grant after grant because there is no other way to pay for her Reblozyl prescription, which costs $196,303 a year. She said she is on Medicare, which covers most of the price, but she is left with an annual deductible of $8,925. Her yearly income from Social Security and a pension from a company where she used to work adds up to $36,000. She is unable to work.
So far, she has managed to patch together foundation grants, but she worries about how long she can keep that up.
“People just don’t know what you go through,” she said. “If you think about it too much, you get depressed.”
Doctors say they try to help with appeals to insurers, but they do not always succeed.
Dr. Kari Nadeau, an allergist at Stanford Medicine, said the advent of truly effective drugs to treat severe allergies and disfiguring eczema has been bittersweet.
“The world is full for me now, full of hope and promise,” she said. “I can give a patient a biologic and literally see the skin get better right before my eyes.”
But she has spent hours on the phone trying to convince insurers to pay for some of these drugs, with mixed success. And her patients are among the few with resources to seek out a specialist like her.
Harry Levine, an emeritus sociology professor from Queens College, found an unusual way to pay for his drug for the atopic dermatitis, or eczema, that covers most of his body when untreated.
The only thing that helped was steroid creams, but they were not safe to take continuously. So he went through cycles of getting some relief only to watch his eczema return.
Then, in 2017, his doctor told him about, Dupixent, a stunningly effective new drug.
But it cost $36,000 a year, and his insurance would not pay.
Eventually, he was referred to Dr. Emma Guttman-Yassky of Icahn School of Medicine at Mount Sinai, who had led studies of the drug and gets samples from the manufacturer, Regeneron. She provides them to Mr. Levine.
But her clinic is self-pay only. Mr. Levine visits her office every two weeks, pays $325 for the visit, and gets a shot — there is no charge for the drug itself. His eczema vanished.
“My skin is now unblemished,” he said. “It’s a miracle.”
Still, $650 a month?
“It’s a heck of a lot cheaper than $36,000 a year,” he said.
https://www.nytimes.com/2023/02/07/health/medicine-insurance-payments.html
The practice and ethics of risk-rated health insurance
Abstract
Health insurance in the United States is driven by competitive risk rating and is promoted as the best way to give policyholders optimal value for their money and to be fair to those with lower risks. In practice, however, competitive risk rating costs more than noncompetitive, universal systems of health insurance, and it erodes the basic function of insurance to spread infrequent large losses over a wide base. This article describes not only how risk rating covers least those with the greatest medical bills, but also how it has spawned a labyrinth of complex manipulations by insurance companies to charge more or pay less than actuarially fair risk rating would justify. The final section shows that even if risk rating were done fairly, it contradicts moral fairness. Many of the leading proposals for national health insurance do not address these practical and ethical issues. The medical profession and policymakers need to discuss them and take a stand on them.
https://pubmed.ncbi.nlm.nih.gov/1573728/
UnitedHealth, CVS/Aetna, Cigna pulled in close to a trillion dollars last year, mostly as drug middlemen
The three companies’ PBM businesses now collectively generate more profits than their health insurance units.
The next time you’re at the pharmacy counter and find out that, even with health insurance, it will cost you a king’s ransom to go home with your meds, you should know that three giant corporations are largely responsible for your financial pain.
We still think of those three companies – UnitedHealth Group, CVS/Aetna, and Cigna – as health insurers. I certainly did when I worked at Cigna. But a few years ago, all three realized there is a lot more money to be made as a middleman between you and drug makers than selling health insurance.
Over the past few days, all three released their 2022 financials, and every one of them showed much more robust growth in the divisions that operate their pharmacy benefit management (PBM) businesses – which determine which drugs they’ll cover and how much Americans with insurance have to pay out of their own pockets – than their health plan operations.
Collectively, those three companies reported that their PBM business units – which control 80% of the U.S. prescription drug benefit market – contributed a staggering $492.3 billion, almost half a trillion dollars, to their total revenues during 2022. That’s up nearly 12% from the $440.5 billion they reported in 2021.
Another way of looking at this is that combined, those companies are now getting 60% of their revenues from their PBM divisions. Health insurance is still important to them, but it provides diminishing opportunities for profitable growth.
Closing in on a trillion dollars in revenues
Together, those three companies took in a total of $827.2 billion from us last year in one way or another. To be sure, they’re still collecting boatloads from our premiums, fees, and taxes for health insurance – $386.1 billion last year, up 10% from $349.8 billion in 2021 – but they’re getting far more money as middlemen in the pharmacy supply chain than from their health-plan operations.
Accordingly, their PBM businesses now generate more profits than their health insurance units. The three companies’ combined profits last year totaled $53.2 billion, up 10% from the $48.3 billion they reported in 2021. More than half of that – $27.3 billion – came from the divisions that operate their PBMs (Cigna’s Evernorth, which encompasses the PBM Express Scripts; CVS’s Caremark; and UnitedHealth’s Optum). That’s up 11% from the $24.7 billion in profits they reported in 2021.
It’s important to note that those divisions have also grown (or bought) octopus-like tentacles that reach deeper and deeper every year into other areas of health-care delivery. UnitedHealth, in particular, has been on a spree buying physician practices. With around 70,000 doctors, it is now the nation’s biggest employer of physicians. It also owns clinics and other facilities.
CVS, of course, has thousands of retail stores in the United States – 9,648 at last count – but its PBM division now contributes more to revenue and profits than all those stores. It also generates more revenue and profits than its Aetna health plans. But CVS is following UnitedHealth and Cigna into other corners of health-care delivery – primary care and urgent care centers in particular.
Smelling big bucks in primary care
CVS announced yesterday it will buy Oak Street Health, a for-profit chain of 160 primary-care centers, for $9.5 billion.
As Reuters reported, CVS is “joining rivals in adding primary care to its portfolio as pressure mounts on its health insurance business.” (Emphasis added.) It noted that even though Oak Street is losing money and is not expected to contribute to CVS earnings for years, “analysts said the deal is strategically sound, and shares of the multi-business company were up 4.5%” yesterday.
In other words, Wall Street cheered the deal (which must be approved by regulators).
(To be more precise a small group of “buy side” and “sell side” financial analysts you likely have never heard of cheered. This tiny club is arguably the most powerful group of folks in all of U.S. health care. If you’re a Big Insurance executive, what those analysts write about your company’s financials and deals will determine whether your net worth rises or falls on any given day. I’ll pull the curtains back on this largely unknown little club in the coming weeks.)
Anemic health plan growth
Over on the health-plan side of these big companies, growth in “covered lives” has been anemic for years. CVS/Aetna actually reported 122,000 fewer people enrolled last year in its individual health-plan business, which includes the Affordable Care Act-created “marketplaces.” That decline was offset by a modest increase in enrollment in the health plans it manages for employers and unions. Together, those two buckets, which comprise the company’s “commercial” health-plan business, added 244,000 covered lives in 2022, bringing the total to 17,032,000, up 1.5% from the 16,788,000 the company reported in 2021.
UnitedHealth reported slight gains in both buckets, but its commercial enrollment grew just .4%, from 26,580,000 in 2021 to 26,685,000 in 2022.
Cigna reported more substantial growth in its commercial business with enrollment growing from 13,854,000 in 2021 to 14,852,000 in 2022. Most of the growth came from health plans it manages for mid-sized, self-insured employers.
But unlike its two big competitors, Cigna lost enrollment in its Medicare Advantage and other government programs, from 1,510,000 in 2021 to 1,349,000 last year.
Cigna will be under the gun from investors and those Wall Street financial analysts to turn that around. Medicare Advantage, in particular, has become an engine of profitable growth for most of Big Insurance, thanks largely to tens of billions of dollars in overpayments from the Center for Medicare and Medicaid Services. UnitedHealth posted a 9.5% increase in Medicare Advantage enrollment during 2022, from 6,490,000 to 7,105,000. CVS/Aetna posted a 10% increase in Medicare Advantage enrollment, from 2,971,000 in 2021 to 3,270,000 last year.
Next week, I will dig in and report on the collective fortunes of all seven for-profit companies that comprise Big Insurance (Centene, Cigna, CVS/Aetna, Elevance/Anthem, Humana, Molina, and UnitedHealth). As you’ll see, most of them are growing at taxpayers’ expense.
Big Fortune
FUN FACT: CVS/Aetna and UnitedHealth Group have grown so much in recent years that they have become the fourth and fifth largest companies, respectively, on the Fortune 500 list of American companies, based on total revenues. Only Amazon, Apple, and Walmart are bigger. When Fortune compiles its 2023 list, UnitedHealth is poised to move ahead of CVS/Aetna by a hair. UnitedHealth’s revenues grew an astonishing 13% last year, to $324.2 billion. CVS/Aetna’s revenues grew “only” 10.4%, to $322.5 billion. So those two companies alone took in more than three-fifths of a trillion dollars last year.
https://wendellpotter.substack.com/p/unitedhealth-cvsaetna-cigna-pulled
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