Seeking to Grow Market Share?

Get a FREE assessment of your CDH products —
a $3,000 value.
LEARN HOW >

With New American Rescue Plan Funding, HHS Expands and Strengthens the Community and Public Health Workforce

HHS Gov News - September 30, 2022
HHS awarded more than $266 million in American Rescue Plan funding to grow the community and public health workforce.

Sports Programs in States in Northern Climes Face a New Opponent: Scorching Septembers

Kaiser Health News:States - September 30, 2022

BIGFORK, Mont. — On a recent afternoon, it was a crisp 70 degrees on the football field at the high school in this northwestern Montana community less than 200 miles south of the U.S.-Canada border.

Vikings head coach Jim Benn was running his team through drills in the pristine fall weather, without much interruption. Just a couple of weeks earlier, though, players needed frequent water breaks as they sweated through temperatures in the low to mid-90s, about 15 degrees higher than average for the time of year.

Although temperatures have started to drop now that autumn is underway, Montana and many other states in the northern U.S. are getting hotter — and staying hot for longer. August is when many high school sports ramp up, and this year’s was either the hottest on record or close to it for many communities across Montana, according to the National Weather Service and other meteorologists. The heat wave stretched into September, and at least six Montana cities broke the 100-degree mark during the first half of the month.

This August was the hottest on record for the nearby states of Idaho, Washington, and Oregon. Nationwide, this summer was the third-hottest on record, according to the National Oceanic and Atmospheric Association.

Health experts and researchers say states — especially the states in the northern U.S., such as Idaho, Maine, Montana, and North Dakota — aren’t adapting fast enough to keep high school athletes safe. Students and their families have sued schools, accusing them of not doing enough to protect athletes. Many states that have taken action did so only after an athlete died.

“Between high school and college, we’re losing roughly six athletes each year to exertional heatstroke, and the majority of those are high school athletes,” said Rebecca Stearns, chief operating officer at the University of Connecticut’s Korey Stringer Institute, which is named after a Minnesota Vikings player who died from heatstroke in 2001. The institute studies and tries to prevent the condition.

The true number of heat-related deaths could be higher, she said, because death certificates aren’t always accurately filled out. Exertional heat illness is the second-leading cause of death for high school and college athletes, behind cardiac arrest, she said.

In Bigfork, Benn said he hadn’t seen one of his athletes experience an exertional heat illness — such as heat exhaustion or heatstroke, which can cause fainting, vomiting, and even death — during his nearly 30-year coaching career in Montana until last year. An athlete became overheated at an early summer football camp during the record-shattering 2021 heat wave.

“We immediately got water on him, got him cooled down,” he said.

The player recovered after he was sprayed with a hose. Benn said he didn’t have an immersion tub filled with ice water on hand, which is what Stearns said is the recommended treatment.

“It is exactly why we need standard policies that have medical best practices incorporated,” Stearns said.

The Korey Stringer Institute ranks all 50 states and Washington, D.C., based on how well they follow best practices for preventing and responding to exertional heat illness among high school athletes, as well as other health risks such as cardiac arrest. Montana is 48th on the list, followed by Minnesota, Maine, and California.

California is last, according to the institute’s report, because it’s the only state that doesn’t regulate high school athletic trainers, which are generally responsible for the health and safety of athletes. Stearns said the institute is working with California sports officials who are pushing for laws that require licensing of athletic trainers.

States in the northern U.S. dominate the bottom third of the institute’s rankings. Stearns said many states the institute has approached about improving heat safety think it isn’t an issue or resist some policies because implementing them could come with a hefty price tag.

But some of the efforts don’t cost a penny, she said. At Bigfork High School, for example, Benn has implemented a three-day acclimatization period, without football pads, when his players return to the field in early August. “That’s really low-hanging fruit, in my perspective,” Stearns said.

Stearns added that most heat-related illnesses occur during the first days of practice, which are typically the hottest and when athletes are not accustomed to exerting themselves in the heat. But she said the state’s high school sports association should mandate acclimatization periods.

Montana and many other states also don’t have a system dictating when practices need to be modified — for example, by removing pads or reducing the length and the number of workouts — or canceled altogether, said Stearns. Policies that require an emergency plan for responding to an exertional heat illness are lacking in many northern states, as well.

Stearns and other researchers, such as Bud Cooper at the University of Georgia, said states should use what’s known as the “wet bulb globe temperature” — which accounts for air temperature, humidity, and radiant heat from surfaces such as turf that absorb sunlight — to make those determinations, rather than the heat index. The heat index doesn’t account for radiant heat, which increases the risk of developing heat illness. The foundation of the National Federation of State High School Associations said in February that it was sending 5,000 of the special thermometers to high schools across the country.

Stearns said that research suggests acclimatization periods reduce the number of exertional heat illnesses by as much as 55% and that states that have used the wet bulb globe temperature to mandate changes to practice have seen an 80% reduction.

In Georgia, Cooper’s work documenting heat-related deaths among high school athletes led to sweeping policy changes in 2012. Since the policy shift, Georgia has gone from being the state with the highest number of heat-related deaths among high school football players to having no deaths.

Researchers such as Cooper have begun to provide regional policy guidelines based on the local average wet bulb globe temperatures to help states understand the risks for high school athletes and give them a starting point for making policy changes.

New Jersey was among the early adopters of the wet bulb system among states in the northern U.S. when it approved a law in 2020 requiring school districts to buy the thermometers. The state also requires hundreds of schools to put cold immersion tubs on-site when temperatures reach a certain level. The state is now second in the institute’s rankings of sports safety policies, behind Florida and ahead of Georgia.

In the Pacific Northwest, Oregon and Washington have policies that mandate changes to school sports practices based on the heat index, not the wet bulb globe temperature. Heat and sports safety researchers say that’s better than nothing.

The Montana High School Association, which regulates high school athletics, has implemented heat guidance that allows referees to call for extra breaks during football or soccer games, said executive director Brian Michelotti. The association also asks other sports, such as cross-country running, to schedule meets early in the day.

While Montana health officials say the state has never documented a death related to heat illness among the state’s high school athletes, the historic heat waves over the past two summers have athletic officials considering additional precautions. “It really has triggered us to have more discussions about that and really come back and revisit with some sport science committees,” Michelotti said.

He said any policy changes would have to be approved by the association’s seven-member board and wouldn’t happen until at least next year.

Heat and sports safety experts such as Stearns at the Korey Stringer Institute said adding statewide policies and mandates saves lives by ensuring that all coaches and schools are following best practices before a death happens.

“One life is too much a price for all of the games in a season,” she said.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Pharma-Funded FDA Gets Drugs Out Faster, But Some Work Only ‘Marginally’ and Most Are Pricey

Kaiser Health News:Health Industry - September 30, 2022

Dr. Steven-Huy Han, a UCLA liver specialist, has prescribed Ocaliva to a handful of patients, although he’s not sure it helps.

As advertised, the drug is lowering levels of an enzyme called alkaline phosphatase in their blood, and that should be a sign of healing for their autoimmune disease, called primary biliary cholangitis. But “no one knows for sure,” Han said, whether less enzyme means they won’t get liver cancer or cirrhosis in the long run.

“I have no idea if the drug will make them better,” he said. “It could take 10, 20, or 30 years to know.”

Ocaliva came to market through an FDA review process created 30 years ago called accelerated approval, which allows pharmaceutical companies to license promising treatments without proving they are effective. It has become a common path to market — accounting for 14 of the 50 approvals of novel drugs in 2021 compared with four among 59 in 2018, for example.

The FDA’s accelerated approval is usually based on a “surrogate marker” of effectiveness — evidence of lower viral loads for HIV, for example, or shrinking tumors for cancer. Debate rages over the validity of some of these stand-ins, and some of the drugs.

“If you’ve got a game-changing drug that truly is going to make a difference, you don’t need surrogate markers to prove that. If it’s effective, patients will survive longer,” said Dr. Aaron Mitchell, an oncologist at Memorial Sloan Kettering Cancer Center. The shortened approval process, he said, is one reason “we are getting a lot of marginally effective, not clinically meaningful, more expensive drugs on the market.”

Many of the estimated 100,000 U.S. patients with primary biliary cholangitis — most are women — had few other treatment options. And their testimony, at FDA meetings and in online forums, helped boost Ocaliva to FDA approval in 2016. Its list price is about $100,000 a year.

After Deborah Sobel’s sister Sarah Jane Kiley died of liver complications in 2006 at age 47, Sobel met with members of Congress and bankers to urge support for the drug and its maker, Intercept Pharmaceuticals. Although the trial required for accelerated approval was too short to show long-term improvement, the drug lowered alkaline phosphatase levels in many patients who could tolerate taking it. For some, the side effects proved too much.

Sobel, who also has the disease, began taking Ocaliva six years ago. Her last liver scan “looked like I had rolled back some of the damage,” said Sobel, 67, of Naperville, Illinois. “I can’t attribute that to the drug, but I’m religious about taking it.”

Ocaliva’s profile is typical for the FDA’s accelerated program. In 2019 the drug ranked seventh in Medicare spending — about $54 million — among products approved through the program, which launched in 1992. That same year, Congress passed the Prescription Drug User Fee Act, or PDUFA, a law committing the drug industry to pay so-called user fees to help fund the FDA’s drug approval process.

The fees have steadily swollen in importance, accounting for $2.9 billion of the agency’s $6.5 billion 2022 budget, including two-thirds of the drug regulation budget, and the work of at least 40% of the FDA’s 18,000 employees. Companies in recent years have paid between $2.5 million and $3 million to have each drug application reviewed.

In most cases, companies that win accelerated approval must submit additional data, after the drug goes to market, that proves it cures or successfully treats the disease.

It turns out that some surrogate markers are better than others. Critics lashed out at the agency in 2021 after it approved Aduhelm for Alzheimer’s disease based on the drug’s capacity to dissolve clumps of amyloid plaques in the brain. Despite that evidence, most patients, who were in the earliest stages of Alzheimer’s, didn’t get better, and over a third suffered brain swelling, a frightening and painful side effect.

When it approved Ocaliva, the FDA required Intercept to conduct another trial to produce evidence of its benefit. But the company in 2021 stopped the trial, saying it was unable to enroll enough patients. To that point, the trial had shown no clinical benefit for patients on the drug. Now, Intercept is asking the FDA to accept a combination of evidence, including studies that it says show patients taking the drug fared better than “external controls” — patients whose health records indicate they would have qualified for Ocaliva but did not receive it.

The FDA already uses such “real-world evidence” for post-market reviews of the safety of drugs, vaccines, and medical devices. But when it comes to drug approvals, records collected for routine health care are often erroneous and usually can’t replace the rigorous evidence of randomized controlled trials.

Policy Born of Impatience

Impatience — among drug companies, investors, patients, and politicians — created the user fee agreements and accelerated-approval pathway, and that impatience, for profits and cures, fuels both programs.

In the late 1980s and early 1990s, the FDA was under tremendous pressure. With AIDS cutting a deadly swath through the gay community, activists held symbolic die-ins at FDA headquarters, demanding approval of new drugs. Meanwhile, conservative groups, frustrated that approvals could take three years or more, debated changing the FDA’s charter to put drugs on the market after cursory reviews. Democrats generally were skeptical of industry user fees — and many still are. During a June debate, Sen. Bernie Sanders (I-Vt.) said drug companies might be “charging outrageous prices” because so much of FDA’s regulatory budget “comes not from taxpayers who want more access to prescription drugs but from the pharmaceutical industry itself.”

The user fees came about after then-FDA Commissioner David Kessler and industry leader Gerald Mossinghoff agreed that companies would pay sums earmarked for the agency to modernize practices, hire more staff, and set deadlines for its reviews.

The impact was immediate. AIDS drugs were the first notable success beginning in 1995, turning HIV from a death sentence into a chronic but manageable disease.

One way user fees have sped reviews is by expanding communications between industry members and the FDA. Before, “it was pretty challenging to get a meeting with FDA,” said Dr. John Jenkins, a senior agency official for 25 years and now an industry consultant. By 2019, the FDA was hosting over 3,000 drug industry meetings each year. This has dramatically changed how companies operate, he said, providing more certainty about whether they are collecting the data FDA needs for its reviews.

Although FDA-regulated products account for about a fifth of every dollar spent by U.S. consumers, Congress has never shown appetite for dramatically increasing its budget, so every five years the user fee renewals become must-pass legislation. This is their year. The user fee accords — one for each brand-name, generic, and over-the-counter drug, as well as for animal drugs, biologics, and medical devices — are packed with new programs, tweaks to old ones, regulatory deadlines, and other items negotiated by the FDA and industry, with Congress tacking its priorities onto the authorizing bill.

The fee agreements are negotiated behind closed doors — industry and FDA officials met more than 100 times to prepare the 2022 accords. At least two industry negotiators were former FDA officials, and the lead FDA negotiator, Dr. Peter Stein, was a Merck and Janssen veteran before arriving at the FDA in 2016. The FDA held six public hearings on the agreements, then announced it did not intend to incorporate a single change.

The bill stalled over the summer because of disagreements over riders affecting generic drugs, lab tests, dietary supplements — and accelerated approval. The final bill, part of a stopgap spending measure, stripped out language that would have made it harder for accelerated products to stay on the market if manufacturers failed to produce evidence of lasting value in a timely way. Stephen Ubl, president of the industry trade group Pharmaceutical Research and Manufacturers of America, or PhRMA, called the slimmed-down bill “a win for patients, biopharmaceutical innovation and regulatory predictability.”

‘I Feel Divided’

Ocaliva patients and doctors are generally grateful to have the drug, though some physicians interviewed for this article said they wouldn’t prescribe it. The drug can seriously harm patients who already have cirrhosis of the liver and produces side effects such as severe itching. But some patients can’t tolerate, or fail to benefit from, the less expensive drug ursodiol, the other main treatment for primary biliary cholangitis. And some doctors who’ve studied Ocaliva believe the drug may slow liver damage.

“I feel divided about this,” said Dr. Renumathy Dhanasekaran, an assistant professor of gastroenterology and hepatology at the Stanford University School of Medicine. “As a scientist, the accelerated approval process concerns me, but as a physician treating patients with a very challenging disease, translating some of these drugs to the clinic faster is attractive.”

While final approval of Ocaliva for primary biliary cholangitis is pending, Intercept is seeking a broader, lucrative market for the drug: as many as 13 million Americans who have non-alcoholic steatohepatitis, or NASH, a variant of fatty liver disease. The only current treatment is radical weight loss. The FDA is expected to rule on that application in 2023.

Ocaliva and Aduhelm are far from the only accelerated approval drugs whose long-term impact remains uncertain. Only a fifth of the cancer drugs approved through the platform kept people alive longer than other treatments against which they were tested, according to a 2019 study co-authored by Dr. Bishal Gyawali, an associate professor of medical oncology and public health at Queen’s University in Canada.

FDA’s cancer branch has tried to remove ineffective accelerated approval drugs from the market, and says it may begin demanding that drugmakers start confirmatory trials before receiving accelerated approval for their products. But for now, many drugs with uncertain survival benefits remain on the market. Ibrance, an oral breast cancer drug that brought Pfizer nearly $5 billion in annual revenue in recent years, falls into this category.

FDA approved Ibrance for breast cancer in 2015 after a study showed it slowed tumor progression for a full year longer than aromatase inhibitors, then the standard of care. Although Pfizer won final approval through a confirmatory trial, less tumor growth apparently did not translate into longer survival for patients on Ibrance, subsequent studies indicated.

Still, with new cancer drugs continually coming to market, it makes sense for the FDA to approve promising new medications even if their benefits are incremental, said Dr. Matthew Goetz, a breast cancer specialist at the Mayo Clinic.

“All of us were excited about Ibrance when it came out,” he said. “It was an oral drug, very well tolerated, and it pushed off the time before a patient needed chemotherapy.”

Gyawali, another breast cancer expert, said he has treated his patients with Ibrance. “Many oncologists would agree that it’s a good tool to have in their toolbox.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Biden-Harris Administration Announces Lower Premiums for Medicare Advantage and Prescription Drug Plans in 2023

HHS Gov News - September 29, 2022
Inflation Reduction Act Will Improve Benefits, Lower Health Care Costs for Millions of Americans with Medicare Part D

KHN’s ‘What the Health?’: On Government Spending, Congress Decides Not to Decide

Kaiser Health News:Health Industry - September 29, 2022

Can’t see the audio player? Click here to listen on Acast. You can also listen on Spotify, Apple Podcasts, Stitcher, Pocket Casts, or wherever you listen to podcasts.

Congress is supposed to complete its annual appropriations bills before the start of the fiscal year on Oct. 1. But it rarely does, and this year is no different, as lawmakers scramble to pass a short-term funding bill so they can put off final decisions until at least December.

Meanwhile, with an eye to the midterms, House Republicans put out a “Commitment to America,” which includes only the vaguest promises related to health care. It’s yet another demonstration that the only thing in health care that unifies Republicans is their opposition to Democrats’ health policies. It’s notable that this latest Republican plan does not suggest repealing the Affordable Care Act.

This week’s panelists are Julie Rovner of KHN, Alice Miranda Ollstein of Politico, Rachel Cohrs of Stat, and Victoria Knight of Axios.

Among the takeaways from this week’s episode:

  • The short-term funding bill to keep the government open includes the five-year reauthorization of the FDA’s user fees, which are charged to drugmakers and help pay the salaries of many FDA employees. Democrats had hoped to add provisions to that measure that would create regulations on dietary supplements, cosmetics, and lab tests. The current authorization runs out Oct. 1, and Republicans insisted they would support only a clean bill that did not have new government directives.
  • That government funding bill also will not include President Joe Biden’s request for $20 billion to help pay for additional covid-19 and monkeypox vaccines and testing. Democrats said they wanted to extend those programs, but Republicans balked and said the administration still has not accounted for all the previous appropriations.
  • Biden’s comment on “60 Minutes” suggesting that the covid pandemic “is over” hurt administration efforts to persuade Congress to pass the extra covid funding.
  • Biden took a victory lap this week and touted successes on administration priorities for Medicare. Among them, he said, was a reduction in next year’s Part B premium, which generally covers beneficiaries’ outpatient expenses. But that premium went down, primarily because Medicare charged too much in 2022.
  • Medicare premiums this year saw a dramatic increase because officials anticipated that the federal health program would see higher costs associated with the use of Aduhelm, an expensive medication for some Alzheimer’s patients that received tentative approval in 2021 by the FDA. Medicare officials later said they would cover the drug only for patients who also enrolled in a clinical trial, and the expectations for use of the drug plummeted.
  • Republican House members’ proposed agenda pledged to reverse the Democrats’ decision this year to allow Medicare to negotiate some drug prices. Although Democrats said the provision would help drive down costs, Republicans said they don’t like the government interfering in the private market and fear that the measure would hamper innovation.

Also this week, Rovner interviews filmmaker Cynthia Lowen, whose new documentary, “Battleground,” explores how anti-abortion forces played the long game to overturn Roe.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read, too:

Julie Rovner: KHN’s “Britain’s Hard Lessons From Handing Elder Care Over to Private Equity,” by Christine Spolar

Alice Miranda Ollstein: KHN’s “Embedded Bias: How Medical Records Sow Discrimination,” by Darius Tahir

Rachel Cohrs: The New York Times’ “Arbitration Has Come to Senior Living. You Don’t Have to Sign Up,” by Paula Span

Victoria Knight: Forbes’ “Mark Cuban Considering Leaving Shark Tank as He Bets His Legacy on Low-Cost Drugs,” by Jemima McEvoy 

Also mentioned in this week’s episode:

To hear all our podcasts, click here.

And subscribe to KHN’s What the Health? on Spotify, Apple Podcasts, Stitcher, Pocket Casts, or wherever you listen to podcasts.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Grants Quality Service Management Office (Grants QSMO) Launches Marketplace

HHS Gov News - September 29, 2022
HHS launch of Grants QSMO Marketplace for use by all Federal agencies that award grants and/or cooperative agreements

Turned Away From Urgent Care — And Toward a Big ER Bill

Kaiser Health News:States - September 29, 2022

Frankie Cook remembers last year’s car crash only in flashes.

She was driving a friend home from high school on a winding road outside Rome, Georgia. She saw standing water from a recent rain. She tried to slow down but lost control of her car on a big curve. “The car flipped about three times,” Frankie said. “We spun around and went off the side of this hill. My car was on its side, and the back end was crushed up into a tree.”

Frankie said the air bags deployed and both passengers were wearing seat belts, so she was left with just a headache when her father, Russell Cook, came to pick her up from the crash site.

Frankie, then a high school junior, worried she might have a concussion that could affect her performance on an upcoming Advanced Placement exam, so she and her father decided to stop by an urgent care center near their house to get her checked out. They didn’t make it past the front desk.

“‘We don’t take third-party insurance,’” Russell said the receptionist at Atrium Health Floyd Urgent Care Rome told him, though he wasn’t sure what she meant. “She told me, like, three times.”

The problem didn’t seem to be that the clinic lacked the medical expertise to evaluate Frankie. Rather, the Cooks seemed to be confronting a reimbursement policy that is often used by urgent care centers to avoid waiting for payments from car insurance settlements.

Russell was told to take Frankie to an emergency room, which by law must see all patients regardless of such issues. The nearest one, at Atrium Health Floyd Medical Center, was about a mile down the road and was owned by the same hospital system as the urgent care center.

There, Russell said, a doctor looked Frankie over “for just a few minutes,” did precautionary CT scans of her head and body, and sent her home with advice to “take some Tylenol” and rest. She did not have a concussion or serious head injury and was able to take her AP exam on time.

Then the bill came.

The Patient: Frankie Cook, 18, now a first-year college student from Rome, Georgia.

Medical Services: A medical evaluation and two CT scans.

Service Provider: Atrium Health Floyd, a hospital system with urgent care centers in northwestern Georgia and northeastern Alabama.

Total Bill: $17,005 for an emergency room visit; it was later adjusted to $11,805 after a duplicate charge was removed.

What Gives: The Cooks hit a hazard in the health care system after Frankie’s car struck that tree: More and more hospital systems own urgent care centers, which have limits on who they treat — for both financial and medical reasons.

Russell was pretty upset after he received such a large bill, especially when he had tried to make a quick, inexpensive trip to the clinic. He said Frankie’s grandmother was seen at an urgent care center after a car wreck and walked out with a bill for just a few hundred dollars.

“That’s kind of what I was expecting,” he said. “She just really needed to be looked over.”

So why was Frankie turned away from an urgent care center?

Lou Ellen Horwitz, CEO of the Urgent Care Association, said it’s a pretty standard policy for urgent care centers not to treat injuries that result from car crashes, even minor ones. “Generally, as a rule, they do not take care of car accident victims regardless of the extent of their injuries, because it is going to go through that auto insurance claims process before the provider gets paid,” she said.

Horwitz said urgent care centers — even ones owned by big health systems — often operate on thin margins and can’t wait months and months for an auto insurance company to pay out a claim. She said “unfortunately” people tend to learn about such policies when they show up expecting care.

Fold in the complicated relationship between health and auto insurance companies and you have what Barak Richman, a health care policy professor at Duke University’s law school, called “the wildly complex world that we live in.”

“Each product has its own specifications about where to go and what it covers. Each one is incredibly difficult and complex to administer,” he said. “And each one imposes mistakes on the system.”

Atrium Health did not respond to repeated requests for comment on Frankie’s case.

Horwitz dismissed the idea that a health system might push people in car wrecks from urgent care centers to emergency rooms to make more money off them. Still, auto insurance generally pays more than health insurance for the same services.

Richman remained skeptical.

“At the risk of sounding a little too cynical, there are always dollar signs when a health care provider sees a patient come through the door,” Richman said.

Dr. Ateev Mehrotra, a professor of health care policy at Harvard Medical School, said it was likely strategic for the urgent care center to be right down the street from the ER. Part of the strategy makes sense medically, he said, “because if a bad thing happens, you want to get them to some place with more skill really quickly.”

But he also said urgent care centers are “one of the most effective ways” for a health system to generate new revenue, creating a pipeline of new patients to visit its hospitals and later see doctors for testing and follow-up.

Mehrotra also said urgent care centers are not bound by the Emergency Medical Treatment and Labor Act, a federal law known as EMTALA that requires hospitals to stabilize patients regardless of their ability to pay.

At the time of Frankie’s visit, both the urgent care center and emergency room were owned by Floyd health system, which operated a handful of hospitals and clinics in northwestern Georgia and northeastern Alabama. Since then, Floyd has merged with Atrium Health — a larger, North Carolina-based company that operates dozens of hospitals across the Southeast.

Frankie got a CT scan of her head and body in the emergency room, tests KHN confirmed she couldn’t have gotten at the urgent care center regardless of whether the test was medically necessary or just part of a protocol for people in car wrecks who complain of a headache.

Resolution: Sixteen months have passed since Frankie Cook’s hospital visit, and Russell has delayed paying any of the bill on advice he got from a family friend who’s an attorney. After insurance covered its share, the Cooks’ portion came to $1,042.

Getting to that number has been a frustrating process, Russell said. He heard about the initial $17,005 bill in a letter from a lawyer representing the hospital — another unnerving wrinkle of Frankie’s care resulting from the car wreck. The Cooks then had to pursue a lengthy appeal process to get a $5,200 duplicate charge removed from the bill.

Anthem Blue Cross Blue Shield, the Cooks’ insurer, paid $4,006 of the claim. It said in a statement that it’s “committed to providing access to high-quality medical care for our members. This matter was reviewed in accordance with our clinical guidelines, and the billed claims were processed accordingly.”

“It’s not going to put us out on the street,” Russell said of the $1,042 balance, “but we’ve got expenses like everybody else.”

He added, “I would have loved a $200 urgent care visit, but that ship has sailed.”

Related Links

The Takeaway: It’s important to remember that urgent care centers aren’t governed by the same laws as emergency rooms and that they can be more selective about who they treat. Sometimes their reasons are financial, not clinical.

It’s not uncommon for urgent care centers — even ones in large health systems — to turn away people who have been in car wrecks because of the complications that car insurance settlements create.

Although urgent care visits are less expensive than going to an emergency room, the clinics often can’t offer the same level of care. And you might have to pay the cost of an urgent care visit just to find out you need follow-up care in the emergency room. Then you could be stuck with two bills.

Bill of the Month is a crowdsourced investigation by KHN and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Environmental Justice Leader Says Proposition 30 Would Help Struggling Areas Clear the Air

Kaiser Health News:States - September 29, 2022

RIALTO, Calif. — Ana Gonzalez grew up watching the Inland Empire transform from citrus groves and grapevines into warehouses and retail distribution centers. The booming region east of Los Angeles now comprises 4.65 million people — and 1 billion square feet of warehouse space.

In 2015, one of those warehouses was built right in front of her old house, blocking her view of her suburban neighborhood. Soon thereafter, her son battled bronchitis and pneumonia. “It got so bad that I ended up taking him to the ER about three to four times a year,” she said. Her son, now 16, like so many others in the region developed asthma due to air pollution. She grew concerned that state policies were overlooking predominantly Hispanic and low-income residents in her community.

Gonzalez, 35, has evolved from a concerned parent into an environmental advocate. Her years as an educator specializing in bilingual and special education, along with a bout of homelessness, fuel her passion for advocating for marginalized communities. Today, she serves as executive director of the Center for Community Action and Environmental Justice, which works on air quality and environmental justice issues on behalf of the region.

Gonzalez and the organization have endorsed Proposition 30 on the November ballot. Funded primarily by the ride-hailing company Lyft, it would impose an additional 1.75% tax on what Californians earn above $2 million per year to fund zero-emission vehicle purchases, electric charging stations, and wildfire prevention programs.

While the initiative would provide subsidies for low-income consumers, it would also subsidize businesses, such as Lyft and other ride-hailing companies, by helping them add clean cars to their fleet. Lyft and other ride-hailing companies are under a mandate to make at least 90% of their vehicle fleets electric by 2030.

The once-popular measure has slipped into toss-up territory. A September poll by the Public Policy Institute of California found 55% of likely voters back the measure, down from 63% in April. And it has divided environmentalists and Democrats.

The measure would generate an estimated $3.5 billion to $5 billion a year, growing over time, according to the nonpartisan Legislative Analyst’s Office. Of that, 45% would primarily subsidize zero-emission vehicles and 35% would boost construction of residential and public charging stations, with at least half of each category directed to low-income households and communities. The remaining 20% would fund wildfire suppression and prevention.

The state Democratic Party and the American Lung Association endorsed Proposition 30, calling it an innovative measure that will expand access to electric vehicle chargers for every Californian, regardless of where they live or work.

But opponents include the California Teachers Association and Democratic Gov. Gavin Newsom, who recently called the measure “a Trojan horse that puts corporate welfare above the fiscal welfare of our entire state.”

California is a leader in pushing — and paying for — clean energy, but the state has been criticized for failing to distribute California’s clean-car subsidies equitably. For example, a 2020 study found wealthier communities in Los Angeles County had more electric and plug-in hybrid vehicles than its disadvantaged communities. And state Assembly member Jim Cooper, a Black Democrat from Elk Grove who will become Sacramento County sheriff next year, has said the state’s push for electric vehicles fuels “environmental racism.”

Gonzalez points to studies, such as a report by Earthjustice, showing how people who live close to warehouses are more likely to be low-income and at higher risk of asthma due to the air pollution generated by diesel trucks.

KHN reporter Heidi de Marco met with Gonzalez at her new home, where a development is proposed behind her property, to discuss why she and her organization endorsed Proposition 30. Gonzalez said she has not been paid by Lyft. The interview has been edited for length and clarity.

Q: Why is Proposition 30 important for your community?

Our families are dying, and nobody is doing anything about it. We’re seeing all the illnesses that are connected to pollution, such as asthma, pneumonia, lung cancer, COPD [chronic obstructive pulmonary disease], and even diabetes.

We just decided to support it because we felt, as a team, that it was the right thing to do given how impacted we are by car and truck pollution. There are layers upon layers of pollution.

Along with the influx of warehouses bringing tons of trucks and their diesel exhaust emissions, the Inland Empire is unique when it comes to pollution. We have all the polluting industries that you can think of, from rail yards bringing more diesel emissions, from the trains to gas plants, which are emitting a lot of pollution. We have toxic landfills, airports, and all the car traffic from the intersections of the 10, 60, 215, and the 15 freeways.

Q: Proposition 30 is funded by Lyft, and Newsom opposes it, calling it a “cynical scheme” by the company to get more clean cars for its fleet. Lyft has been criticized by labor groups for lowering compensation through gig work instead of paying fair wages and benefits. Why are you siding with Lyft?

I see it two ways. One, yes, we need to hold Lyft accountable for the way they treat their drivers and making sure they’re paying them fair wages. I do believe Lyft should do better. But the way that I see it, the fact that they’re transitioning into clean-energy vehicles is where I have to give them props.

Even the developers in our communities have the money to transition their diesel trucks to clean energy, but they’re not investing in that. We have a climate change crisis, and I don’t necessarily see them as the enemy. I see them as folks trying to be part of the solution and transitioning to clean energy.

Q: Will the initiative make a difference when so much of the Inland Empire’s pollution is from Los Angeles and the warehouse industry?

It will make electric vehicles and clean energy vehicles more affordable. And it would create those incentives that our low-income community needs, especially our small-business owners like our self-employed truck drivers that cannot afford to transition to a clean-energy vehicle or a truck. This program would give them those subsidies that they need so they can afford to transition.

This proposition will also give money to expand the clean-vehicle infrastructure that we need. Because here we are telling everybody to change to clean-energy vehicles, but we don’t have the infrastructure. Where are they going to charge their cars when they go to work? Or when they go to school? Or even in their own homes?

So, this campaign would put us in the right direction because I don’t see any other efforts being done, including with the state. I feel like sometimes the governor is a little hypocritical because here he is trying to be a champion for climate change, but he’s not showing a real plan to transition compared to this proposition, where they at least have a plan in place to tackle that transition.

Q: The state and federal governments have already invested billions in clean-car programs. Why is Proposition 30 needed?

It’s going to take a while before the money gets to the appropriate agencies. Another thing that I see that the government fails at is that they always leave out the most affected, marginalized, disenfranchised communities such as the Inland Empire. We have been overseen for so long, and every time the government creates these programs, all this investment and infrastructure, local agencies sometimes don’t know about it — or they don’t do the work to ask for the money.

And what this program does through Prop. 30 is that it’s taxing the rich, the people that make over $2 million. We always give the tax breaks to the rich and it’s about time that the rich pay their fair share.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Centene Agrees to Pay Massachusetts $14 Million Over Medicaid Prescription Claims

Kaiser Health News:Medicaid - September 29, 2022

Massachusetts has become the latest state to settle with health insurance giant Centene Corp. over allegations that it overbilled the state’s Medicaid program for pharmacy services, KHN has learned.

Centene, the nation’s largest Medicaid managed-care insurer, will pay $14.2 million, according to Massachusetts Attorney General Maura Healey. An official announcement is expected later Thursday.

“This settlement is a significant result in our work to protect taxpayer dollars and the integrity of our MassHealth program,” Healey said in a statement. “We are pleased to secure these funds to help control Medicaid costs and ensure that state resources are directed to the best possible uses in our health care system.”

Centene on Wednesday denied wrongdoing in Massachusetts, as it has in previously announced settlements. KHN reported earlier this month that Centene agreed in July to pay Texas nearly $166 million.

“This no-fault agreement reflects the significance we place on addressing their concerns and our ongoing commitment to making the delivery of healthcare local, simple and transparent,” Centene said in a statement emailed to KHN. “Importantly, this allows us to continue our relentless focus on delivering high-quality outcomes to our members.”

Centene provides health insurance to 15.4 million Medicaid enrollees across the country by contracting with states to cover people who have disabilities or are in low-income families. The St. Louis-based insurer earns about two-thirds of its revenue from Medicaid, which is jointly funded by state and federal taxpayers.

In many states, insurance companies such as Centene also administer Medicaid enrollees’ prescription medications through what is called a pharmacy benefit manager. These benefit managers act as middlemen between drugmakers and health insurers and as intermediaries between health plans and pharmacies.

Centene’s CeltiCare subsidiary offered insurance to Massachusetts Medicaid enrollees until the state began to overhaul its program. Centene also administered pharmacy benefits for the state Medicaid program, MassHealth, according to the attorney general’s office.

A review by Healey’s office found “irregularities in the pricing and reporting of pharmacy benefits and services” by Centene’s pharmacy benefits manager, Envolve Pharmacy Solutions, its statement said.

Multiple states have settled with Centene’s pharmacy manager business over allegations that it overbilled their Medicaid programs for prescription drugs and pharmacy services. But the total number of states is not publicly known because many of the settlement negotiations are conducted behind closed doors. Some states, such as California, have been investigating the company, KHN first reported in April.

Before the Massachusetts agreement, Centene had settled with Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New Mexico, Ohio, Texas, and Washington for a total of $475 million, according to news releases and settlement documents from attorneys general in those states. The Massachusetts settlement, which was signed Sept. 23, brings Centene’s pharmacy services settlement total to at least $489 million. Other states have also settled with Centene, but the settlement amounts — and the states themselves — have not been publicly disclosed.

Centene set aside $1.25 billion in 2021 to resolve the pharmacy benefit manager settlements in “affected states,” according to a July filing with the U.S. Securities and Exchange Commission that did not specify how many states.

Florida and South Carolina have signed legal agreements with a Mississippi-based firm, Liston & Deas, that has represented other states in their pharmacy benefit inquiries into Centene.

Pharmacy benefit managers in general have drawn increasing scrutiny and criticism. The Federal Trade Commission announced in June that it was launching an investigation into the pharmacy benefit management industry and its impact on consumer access to prescription drugs and medication costs.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

HHS Approves Groundbreaking Medicaid Initiatives in Massachusetts and Oregon

HHS Gov News - September 28, 2022
Initiatives will ensure children in Oregon have continuous Medicaid coverage until age 6, and address nutrition and housing needs in Massachusetts and Oregon

Montana Health Officials Aim to Boost Oversight of Nonprofit Hospitals’ Giving

Kaiser Health News:States - September 28, 2022

Montana health officials are proposing to oversee and set standards for the charitable contributions that nonprofit hospitals make in their communities each year to justify their access to millions of dollars in tax exemptions.

The proposal is part of a package of legislation that the state Department of Public Health and Human Services will ask lawmakers to approve when they convene in January. It comes two years after a state audit called on the department to play more of a watchdog role and nine months after a KHN investigation found some of Montana’s wealthiest hospitals lag behind state and national averages in community giving.

Montana state Sen. Bob Keenan, a Republican who has questioned whether nonprofit hospitals deserve their charity status, said the proposal is a start that could be expanded on later.

“Transparency is the name of the game here,” Keenan said.

The IRS requires nonprofit hospitals to tally what they spend to “promote health” to benefit “the community as a whole.” How hospitals count such contributions to justify their tax exemptions is opaque and varies widely. National researchers who study community benefits have called for tightening standards for what counts toward the requirement.

Montana is one of the most recent states to consider imposing new rules or increasing oversight of nonprofit hospitals amid questions about whether they pay their fair share. Dr. Vikas Saini, president of the national health care think tank Lown Institute, said that both at a state and local level, people in California are exploring whether to monitor hospital community benefits and enforce new standards. Last year, Oregon initiated a minimum amount that nonprofit hospitals must spend on community benefits. And Massachusetts updated its community benefits guidelines in recent years, pushing hospitals to give more detailed assessments of how the spending lines up with identified health needs.

Montana hospital industry officials said they want to work with the state to shape the proposed legislation, which they said the industry would support if it doesn’t conflict with federal rules. Saini said that to have an impact, any legislation would have to go beyond federal requirements.

In recent years, more people, like Keenan and Saini, have questioned whether nonprofit hospitals are contributing enough to their communities to deserve the major tax breaks they get while becoming some of the largest businesses in town.

“The hospitals are sort of the pillars of communities, but people are starting to ask these questions,” Saini said.

Saini’s institute reviews hospitals’ giving each year and has found that the majority of nonprofit systems nationwide spend less on what the institute calls “meaningful” benefits than the estimated value of their tax breaks. Actions the institute counts include patient financial aid and community investments such as food assistance, health education, or services offered at a loss, including addiction treatment.

The 2020 Montana audit found that hospitals in the state report benefits vaguely and inconsistently, making it difficult to determine whether their charity status is justified. However, state lawmakers didn’t address the issue in their 2021 biennial legislative session, and a Legislative Audit Division memorandum issued in June found the state health department had “made no meaningful progress” toward developing oversight of nonprofit hospitals’ charitable giving since then.

KHN found that Montana’s nearly 50 nonprofit hospitals directed roughly 8% of their total annual expenses, on average, toward community benefits in the tax year that ended in 2019. The national average was 10%.

In some cases, hospitals’ giving percentages have declined since then. For example, in the tax year that ended in 2019, Logan Health-Whitefish — a small hospital that’s part of the larger Flathead Valley health system — reported that less than 2% of its overall spending went toward community benefits. In its latest available documents, for the period ending in 2021, the hospital reported spending less than 1% of its expenses on community benefits while it made $15 million more than it spent.

Logan Health spokesperson Mellody Sharpton said the medical system’s overall community benefit is equal to nearly 9% of its spending, reaching across its six hospitals. It also has clinics throughout the valley. “It’s important to consider our organization’s community benefit as a whole as our facilities collaborate to ensure the appropriate care is provided at the appropriate facility to meet our patients’ health needs,” Sharpton said.

State health officials asked lawmakers to allow the agency to draft a bill that would give the health department clear authority to require hospitals to submit annual reports that include community benefit and charity care data. The measure also would allow the department to develop standards for that community benefit spending, according to the department’s description of its proposal.

“We see a great need here to move the ball forward,” state health department leader Charlie Brereton told lawmakers in August.

Montana Hospital Association President Rich Rasmussen said his organization wants to work with the health department in honing the legislation but said the definition of what counts as benefits should remain broad so hospitals can respond to their area’s most pressing needs.

Furthermore, he said, hospitals are already working on their own reporting standards. This year, the association created a handbook for members and set a 2023 goal for hospitals to uniformly report their community benefits, Rasmussen said. The association declined to provide a copy of the handbook, saying it would be available to the public once hospitals are trained on how to use it later this fall.

The association also plans to create a website that will serve as a one-stop shop for people who want to know how hospitals are reporting community benefits and addressing local health concerns, among other things.

Republican state Rep. Jane Gillette said she supports increased health department oversight and the idea behind the association’s website but doesn’t think the hospital industry should produce that public resource alone. Gillette said she plans to introduce legislation to require hospitals to report community benefits data to a group outside the industry — such as the state — which would then post the information online.

In the past, hospitals have resisted attempts to impose new rules on community benefit spending. In an interview with KHN last year, Jason Smith, then Bozeman Health’s chief advancement officer, said the system supported efforts to improve reporting contributions “outside of new legislation,” adding that hospitals can do better work without “state oversight bodies being placed in the arena with us.”

Asked whether the health system still stands by that statement, Denise Juneau, Bozeman Health’s chief government and community affairs officer, said hospital officials hope any new legislation will align with existing federal guidelines. She said Bozeman Health will continue to work with the Montana Hospital Association to define and provide better community benefit information, with or without new legislation.

A lawmaker would have to back the state’s proposal by mid-December to keep it alive.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

$2,700 Ambulance Bill Pulled Back From Collections

Kaiser Health News:States - September 28, 2022

Peggy Dula is as surprised as she is relieved. The 55-year-old resident of St. Charles, Illinois, had been fighting a $2,700 ambulance bill for nearly a year. Now, the amount she owes from her September 2021 car wreck appears to be zero.

This summer, KHN, NPR, and CBS News spotlighted Dula in the Bill of the Month series. The initial $3,600 charge for Dula’s ambulance ride was significantly higher than the charges received by her two siblings, who were riding in her car at the time and were transported to the same hospital. The siblings rode in separate ambulances, each from a different nearby fire protection district. All three were billed different amounts for the same services. Dula’s injuries were the least serious, but her bill was the most expensive.

Even after Dula’s insurer paid $900, her bill from Pingree Grove and Countryside Fire Protection District was still roughly twice what each of her siblings had been charged.

Dula’s attempts to resolve the bill were unsuccessful.

Paramedic Billing Services, the company that handles billing for Pingree Grove, said she’d have to dispute charges directly with the fire protection district. But Dula said she couldn’t get a fire district representative on the phone. Then, in June, she received a letter from collections agency Wakefield & Associates seeking payment for her ambulance bill.

Dula remained resolute about not paying until the price was lowered to be more in line with what her siblings had been charged. But the collections agency was equally firm. And that’s where the bill stood for months, in a stalemate.

Last week, Dula called the hospital where she was transported after the crash. She had recently received a bill from the hospital saying she owed nearly $1,500, but when she called she was told her balance was zero. The surprise resolution of her hospital bill prompted her to call Wakefield & Associates to check on her ambulance bill. She said she was told the bill had been pulled back from collections and her balance was zero.

The apparent resolution came approximately a month after “CBS Mornings” covered Dula’s Bill of the Month saga. Wakefield & Associates confirmed to KHN that the bill had been pulled back and that her balance with the agency is zero. Pingree Grove Fire Chief Kieran Stout did not return multiple requests for comment.

“It feels great,” Dula said. “It was a real monkey on my back.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

‘American Diagnosis’: When Indigenous People Move to Cities, Health Care Funding Doesn’t Follow

Kaiser Health News:Health Industry - September 28, 2022

Can’t see the audio player? Click here to listen.

The transcript for this segment is being processed. We’re working to post it four to five days after the episode airs.

Episode 12: Indigenous and Invisible in the Big City

Over 70% of Indigenous people in the United States live in urban areas. But urban Indian health makes up less than 2% of the Indian Health Service’s annual budget.

While enrolled members of federally recognized tribes can access the Indian Health Service or tribally run health care on their reservations, Indigenous people who live in cities can find themselves without access to the care they’re entitled to.

“Even though we’re living in urban areas now, that doesn’t mean that our benefits should leave us,” said Esther Lucero, president and CEO of the Seattle Indian Health Board.

The Seattle Indian Health Board is one of many urban clinics across the United States that opened to address the discrimination and lack of services Indigenous people face in cities. These clinics work to meet the cultural and ceremonial needs of the populations they serve.

“We are much more than a community health center or place that provides direct service. We are a home away from home,” Lucero said.

Episode 12 explores the barriers Indigenous people face to accessing quality health care in cities and the efforts of urban Indian clinics to meet the needs of this population.

Voices from the episode:

  • Esther Lucero, president and CEO of the Seattle Indian Health Board
  • Dr. Patrick Rock, CEO of the Indian Health Board of Minneapolis
  • Douglas Miller, an associate professor of Native American History at Oklahoma State University
  • Richard Wright, a spiritual health adviser with the Indian Health Board of Minneapolis

Season 4 of “American Diagnosis” is a co-production of KHN and Just Human Productions.

Our Editorial Advisory Board includes Jourdan Bennett-BegayeAlastair Bitsóí, and Bryan Pollard.

To hear all KHN podcasts, click here.

Listen and follow “American Diagnosis” on Apple Podcasts, Spotify, Google, or Stitcher.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Few Places Have More Medical Debt Than Dallas-Fort Worth, but Hospitals There Are Thriving

Kaiser Health News:Health Industry - September 28, 2022

PROSPER, Texas — Almost everything about the opening of the 2019 Prosper High School Eagles’ football season was big.

The game in this Dallas-Fort Worth suburb began with fireworks and a four-airplane flyover. A trained eagle soared over the field. And some 12,000 fans filled the team’s new stadium, a $53 million colossus with the largest video screen of any high school venue in Texas. Atop the stadium was also a big name: Children’s Health.

Business has been good for the billion-dollar pediatric hospital system, which agreed to pay $2.5 million to put its name on the Prosper stadium. Other Dallas-Fort Worth medical systems have also thrived. Though exempt from taxes as nonprofit institutions, several, including Children’s, notched double-digit margins in recent years, outperforming many of the area’s Fortune 500 companies.

But patients aren’t sharing in the good times. Of the nation’s 20 most populous counties, none has a higher concentration of medical debt than Tarrant County, home to Fort Worth. Second is Dallas County, credit bureau data shows.

The mismatched fortunes of hospitals and their patients reach well beyond this corner of Texas. Nationwide, many hospitals have grown wealthy, spending lavishly on advertising, team sponsorships, and even spas, while patients are squeezed by skyrocketing medical prices and rising deductibles.

A KHN review of hospital finances in the country’s 306 hospital markets found that several of the most profitable markets also have some of the highest levels of patient debt.

Overall, about a third of the 100 million adults in the U.S. with health care debt owe money for a hospitalization, according to a poll conducted by KFF for this project. Close to half of those owe at least $5,000. About a quarter owe $10,000 or more.

Many are pursued by collectors when they can’t pay their bills or hospitals sell the debt.

“The fact is, if you walk into a hospital today, chances are you are going to walk out with debt, even if you have insurance,” said Allison Sesso, chief executive of RIP Medical Debt, a nonprofit that buys debt from hospitals and debt collectors so patients won’t have to pay it.

Community Shadowed by Debt

Across the Dallas-Fort Worth metro area — the nation’s fourth-largest — the impact has been devastating. 

“Medical debt is forcing people here to make incredibly agonizing choices,” said Toby Savitz, programs director at Pathfinders, a Fort Worth nonprofit that assists people with credit problems. Savitz estimated that at least half their clients have medical debt. Many are scrimping on food, neglecting rent, even ending up homeless, she said, “and this is not just low-income people.” 

David Zipprich, a Fort Worth businessman and grandfather, was forced out of retirement after hospitalizations left him owing more than $200,000.

Zipprich, 64, had spent a career in financial consulting. He owned a small bungalow in a historical neighborhood near the Fort Worth rail yards. His daughters, both teachers, and his four grandchildren lived nearby. He had health insurance and some savings, and he’d paid off his mortgage.

Then in early 2020, Zipprich landed in the hospital. While driving, his blood sugar dropped precipitously, causing him to black out and crash his car.

Three months later, after he was diagnosed with diabetes, another complication led to another hospitalization. In December 2020, covid-19 put him there yet again. “I look back at that year and feel lucky I even survived,” Zipprich said.

But even with insurance, Zipprich was inundated with debt notices and calls from collectors. His credit score plummeted below 600, and he had to refinance his home. “My stress was off the charts,” he said, sitting in his neatly kept living room with his Shih Tzu, Murphy.

Overall in Tarrant County, 27% of residents with credit reports have medical debt on their records, credit bureau data analyzed by KHN and the nonprofit Urban Institute shows. In Dallas County, it’s 22%.

Loading…

That’s more than five times the rate in the largest counties in New York, data shows. The Texans also owe a lot more — the median amount of medical debt on credit records in Tarrant and Dallas counties is nearly $1,000, compared with $400 or less in New York.

Last year, Zipprich returned to work, taking a job in New Jersey that required he commute back and forth to Texas. He recently quit, citing the strain of so much travel. He’s now job hunting again. “I never thought this would happen to me,” he said.

Who Is Responsible?

Even small debts can have potentially dangerous consequences, discouraging patients from seeking needed care. Angie Johnson, a 28-year-old schoolteacher, cut short her honeymoon so she and her husband could pay off more than $1,100 she owed a physical therapy center owned by Baylor Scott & White, a mammoth Dallas-based hospital system.

Johnson said the center, where she’d gone after a knee injury, initially said her visits would cost $60. “Then they billed me hundreds,” she said. “I don’t go to the doctor unless I absolutely have to because it’s so expensive.”

Hospital industry leaders blame the patient debt on health insurers, citing the rise of high-deductible plans and other efforts that limit coverage. “The last thing that hospitals want is for their patients to face financial barriers,” said Molly Smith who leads public policy at the American Hospital Association. “Hospitals are in there trying to work on behalf of patients.”

Despite repeated requests from KHN, none of the medical systems around Dallas-Fort Worth would discuss their finances or the debt carried by patients.

But Smith and other hospital leaders point to billions of dollars of free or discounted care that hospitals nationwide provide every year. “Hospitals have been pretty darn generous,” said Stephen Love, president of the Dallas-Fort Worth Hospital Council. “If other parts of the community did as much as hospitals, we wouldn’t be in this problem.”

Unlike drug companies, device makers, and many physician practices, most U.S. hospitals are nonprofit and must provide charity care as a condition of their tax-exempt status.

Regardless of tax status, medical centers in markets with high medical debt do provide more charity care, according to an analysis by KHN and the Urban Institute, a Washington think tank. That’s important, said Dr. Vikas Saini, president of the Lown Institute, a nonprofit that grades hospitals on their quality and community benefits. But he asked: “Is a hospital truly serving its community if it’s pushing so many into debt?”

Around Dallas-Fort Worth, major medical systems frequently tout their commitment to the region and its patients.

When Texas Health Resources, a Dallas-based nonprofit system with more than $5 billion in annual revenue, opened a new hospital tower in Fort Worth earlier this year, Barclay Berdan, the system’s chief executive, said the building “reinforces Texas Health’s long-standing commitment to the Fort Worth community.” The nine-story, $300 million tower is one of more than a half-dozen new hospitals and major expansions around the Dallas-Fort Worth area since 2018.

The big building spree has been accompanied by big bottom lines.

From 2018 to 2021, Texas Health, which owns hospitals in North Texas, had an average operating margin of almost 6%, according to a KHN analysis of publicly available financial reports.

Other major systems in the area, including Baylor, Children’s Health, and HCA, the nation’s largest for-profit hospital company, did even better, KHN found. Cook Children’s, the region’s second major pediatric system, had an average operating margin of nearly 12%.

By comparison, profits at most of the 25 Fortune 500 companies based around Dallas-Fort Worth, such as ExxonMobil, were less than 6% in 2019, according to Fortune data.

Loading…

Approaching a Tipping Point

Hospitals have thrived in other markets with high patient debt, KHN found.

In Charlotte, North Carolina, where a quarter of residents have medical debt on their credit reports, hospitals recorded an average operating margin of 13.6% from 2017 to 2019.

The average margin at hospitals in and around Gainesville and Lakeland, two central Florida markets where a quarter of residents also carry medical debt, topped 9%. In Tulsa, Oklahoma, which has the same level of debt, margins have averaged 8.5%.

Overall, U.S. hospitals recorded their most profitable year on record in 2019, with an aggregate operating margin of 6.5%, according to the federal Medicare Payment Advisory Commission. Total margins, which include income from investments, were even higher.

“You might think that hospitals in communities where patients have a lot of debt would be less profitable, but that doesn’t seem to be the case,” said Anuj Gangopadhyaya, a senior Urban Institute researcher who worked with KHN on an analysis of hospital finance and consumer debt data in U.S. hospital markets.

In fact, the analysis found, there is no apparent relationship between the profits of hospitals in a market and how much medical debt residents have. So while hospitals in places like Charlotte and Tulsa may be comfortably in the black, in other places with high patient debt such as Amarillo, Texas, and Columbia, South Carolina, hospitals are struggling, data shows.

Industry experts say the most profitable medical centers — like those around Dallas-Fort Worth — have developed business models that allow them to prosper even if their patients can’t pay.

One key is prices. These hospitals maximize what they charge for everything from a complex surgery to a dose of aspirin. Most of those charges are picked up by health insurers, which still pay a much larger share of hospital bills than patients do, even those with the highest deductibles.

Across the country, many medical systems have strengthened their market power in recent years by consolidating, buying up smaller hospitals and physician practices, which enable the hospital systems to charge even more.

Dallas-Fort Worth has the highest medical prices in Texas, according to the Health Care Cost Institute, a nonprofit that tracks costs nationwide. And in a state where most markets have relatively low medical prices, in-patient care at Dallas-Fort Worth hospitals was 13% more expensive than the national median in 2020.

In addition to charging more, the most profitable hospitals frequently squeeze more savings from their operations, holding down what they pay workers, for example, and securing better contracts from suppliers. “Hospitals have had to get leaner and meaner,” said Kevin Holloran, a senior director at Fitch Ratings who tracks nonprofit health systems for the bond rating firm.

It’s unclear how much longer this business model can endure.

Across the country, many small and rural hospitals have closed in recent years. Even some larger systems are now losing money, as inflation and rising labor costs put new pressure on bottom lines.

As bills rise, hospitals are having a harder time collecting. Last year, nearly 1 in 5 patient bills generated by hospitals for people with insurance topped $7,500, according to an analysis of hospital billing records by Crowe LLP, a Chicago-based accounting and consulting firm. That was more than triple the rate in 2018.

“These are bills that fewer and fewer patients out there can afford,” said Brian Sanderson, a senior Crowe health care consultant and former hospital executive. Indeed, hospitals manage to collect less than 17% of patient balances that exceed $7,500, according to Crowe’s analysis.

“The rates at which patient balances are growing is just unsustainable for our health systems,” Sanderson said, predicting that most will never be able to collect bills of this size. “It’s trending to the ridiculous.”

Robert Earley, a former Texas state legislator who used to head Fort Worth’s public health system, compared today’s hospitals to shrimpers in the Gulf Coast district he once represented.  

“They wanted to pull so much shrimp out of the bay that they didn’t think about whether there’d be any there long term,” Earley said, recalling his constituents’ struggles. “I worry that those of us in health care aren’t asking ourselves enough if this system is sustainable.”

How the Research Was Done

To explore connections between hospital profits and patient debt, KHN and the Urban Institute examined data from each of the nation’s 306 hospital markets, also known as hospital referral regions.

Researchers calculated medical debt in each hospital referral region using 2019 credit bureau data maintained by the Urban Institute. They then compared the debt load in each market to the average operating margin for hospitals in that market over three years from 2017 to 2019, weighting each hospital’s margin by the number of adjusted admissions.

The margins data comes from hospital cost reports that hospitals file annually with the federal Centers for Medicare & Medicaid Services. These reports are aggregated by the nonprofit Rand Corp., which supplied the data to KHN and the Urban Institute.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Joint Statement of the United States of America and the World Health Organization on the U.S.-WHO Strategic Dialogue

HHS Gov News - September 27, 2022
HHS Secretary Xavier Becerra and World Health Organization (WHO) Director-General Dr. Tedros Adhanom Ghebreyesus held the first U.S.-WHO Strategic Dialogue.

HHS Deputy Secretary Andrea Palm Gets Updated COVID-19 Vaccine

HHS Gov News - September 27, 2022
HHS Deputy Secretary Andrea Palm received the updated COVID-19 vaccine during a visit to YourTown Health clinic at the Palmetto Community Center in Palmetto, GA

At This Recovery Center, Police Cope With the Mental Health Costs of the Job

Kaiser Health News:States - September 27, 2022

HAVRE DE GRACE, Md. — Ken Beyer can’t think of a day in the past few months when his phone didn’t flutter with calls, text messages, and emails from a police department, a sheriff’s office, or a fire station seeking help for an employee. A patrol officer threatening to kill himself with his service weapon before roll call. A veteran firefighter drowning in vodka until he collapses. A deputy overdosing on fentanyl in his squad car.

“It’s the worst that I’ve seen in my career,” said Beyer, co-founder and CEO of Harbor of Grace Enhanced Recovery Center, a private mental health and substance use recovery and treatment center for first responders in the waterfront Maryland town of Havre de Grace. Established in 2015, Harbor of Grace is one of only six treatment centers in the U.S. approved by the Fraternal Order of Police, the world’s largest organization of law enforcement officers.

Public safety is a profession plagued by high rates of mental health and addiction problems. Considering the unrelenting pressures on first responders, Beyer said, the treatment centers can’t keep up with the demand.

Specialized recovery facilities like Harbor of Grace focus on treating law enforcement officers, firefighters, emergency medical technicians, and dispatchers — people who regularly encounter violence and death at work. In the past two years, Beyer said, the number of police officers admitted for treatment at his facility alone has more than tripled. “And we always have up to 20 cops in the queue,” he said. Other treatment centers for first responders reported a similar spike in patients.

Anger at police and policing practices soared after a Minneapolis officer murdered George Floyd in 2020, and it put additional strain on officers’ mental health, said Dr. Brian Lerner, a psychiatrist and the medical director at Harbor of Grace. “Officers feel disparaged by the public and often, they also feel unsupported by their agencies,” he said.

That’s part of the reason “we’re looking at a significant rate of burnout among police officers,” said Jennifer Prohaska, a clinical psychologist in Kansas City, Kansas, who focuses on helping law enforcement personnel.

The poor state of many officers’ mental health, combined with low morale, has contributed to an exodus of police across the country that has left departments understaffed and the remaining officers overworked and exhausted. Atlanta, Seattle, Phoenix, and Dallas are hit particularly hard by officer shortages. “That’s creating enormous stress on the system,” Prohaska said. “It’s a perfect storm.”

Even before the most recent stressors, rates of burnout and depression were up among first responders. Rates of post-traumatic stress disorder are five times as high in police officers as in the civilian population. Some studies estimate that as many as 30% of police officers have a substance use problem. Alcohol dependence is at the top of the list.

Last year alone, 138 law enforcement officers died by suicide — more than the number killed — 129 — in the line of duty, according to the FBI. A recent report from the Ruderman Family Foundation suggests that police suicides are often undercounted because of stigma.

Harbor of Grace has a small campus of eight single-story brick buildings with light blue and yellow accents and looks more like a seaside inn than a clinical setting. The center can treat 47 patients at a time. It has seven acute care beds, mostly for detox.

It offers help for a wide range of mental health conditions, including addiction, sleep disorders, anxiety, depression, suicidal ideation, and PTSD.

To date, more than 500 law enforcement agencies — federal, state, and local — have sent employees to Harbor of Grace. The center has 45 full-time clinical staffers, including an emergency physician and several psychiatrists, nurses, and counselors. Many have previously worked as first responders — from Army medics and firefighters to police officers.

On a recent morning at Harbor of Grace, the sun burned hot over the Chesapeake Bay. A group of patients, mostly men and a few women in their 30s, gathered on the small patio. Some sat alone, while others stood in small groups chatting.

“We get all types, from all backgrounds, and at all stages of brokenness,” said Beyer, 66, a former firefighter and EMT who overcame a problem with alcohol several decades ago. “All our patients and most of our staff know what it’s like to hold a dead or a dying child,” he said.

Sgt. Ryan Close has held several dead children. The 37-year-old police officer works as a patrol supervisor for a small law enforcement agency in New England that he did not want to identify to protect the identities of his colleagues. He has been a police officer for 15 years and has worked for several departments. When he started, he said, officers did not receive psychological training or have access to designated peer support programs.

He said that almost every time he was involved in a critical incident — like a shooting or an accident with burnt and disfigured bodies — “my supervisor ordered me to the bar afterwards.” One incident in particular has stuck in his memory — when a young boy shot himself in the head with a rifle. Washing down the horror with alcohol “was the culture back then,” he said.

But Close didn’t drink much at the time and was mocked by his peers for ordering only small beers. It wasn’t until years later, when memories of his experiences at work reemerged and he had trouble sleeping, that he started to self-medicate with alcohol. He developed social anxiety, and his marriage suffered.

His department pushed him to get help, and he entered Harbor of Grace in April 2021 for a 28-day treatment cycle. There, he learned to let go of his hardened veneer and his impulse to always be in control. He saw many other cops struggle with that too when they got to the center. “I witnessed grown men have a fit like a 6-year-old because a staff member wouldn’t let them use their cellphone.”

Many first responders develop heavy defense mechanisms and are “insecure, non-trusting, controlling,” Beyer said. They often wait way too long before they seek help, he added.

Police officers tend to be “very closed, very unwilling to be vulnerable,” Lerner said. But he finds that most first responders make model patients after they take the first steps. “At that point, they’re all in,” he said. “They don’t do anything halfway.”

At Harbor of Grace, the communication style mirrors the tone at a police station or firehouse, said Beyer. “We don’t waste time on the feel-good stuff,” he said. “We’re blunt. We call people out if necessary.”

Psychologist Prohaska said it’s important that specialized behavioral treatment centers for first responders exist. But, she said, there must also be better investment on the front end — for hands-on initiatives that teach resiliency to public safety employees, like the one she developed for the Kansas City Police Department.

Robust mental health training needs to be part of the academy curriculum and embedded in police culture, she said. “Just like we teach officers safety, we need to teach them resiliency,” she added. “A two-hour PowerPoint course won’t do it.”

Beyer expects the situation to get worse before it gets better. Over the past two years, he has seen more police officers resign while they’re in treatment. Previously, most went back to work. “Now, once they gain clarity, many say, ‘I want to stay healthy, and the way to stay healthy is get out of police work,’” he said.

Ryan Close decided to return to work in law enforcement. He has become an advocate for peer-to-peer support in his agency and beyond. He said his own mental health journey has made him a better police officer, with more empathy and improved communication skills.

His advice to fellow officers is to learn about the possible effects of trauma before they develop a serious problem. Also, he said, “establish a good dialogue with your family, your supervisors, your peers. Know what your limitations are. And learn healthy coping skills. Alcohol isn’t one.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Britain’s Hard Lessons From Handing Elder Care Over to Private Equity

Kaiser Health News:Health Industry - September 27, 2022

LONDON — A little over a decade ago, Four Seasons Health Care was among the largest long-term care home companies in Britain, operating 500 sites with 20,000 residents and more than 60 specialist centers. Domestic and global private equity investors had supercharged the company’s growth, betting that the rising needs of aging Britons would yield big returns.

Within weeks, the Four Seasons brand may be finished.

Christie & Co., a commercial real estate broker, splashed a summer sale across its website that signaled the demise: The last 111 Four Seasons facilities in England, Scotland, and Jersey were on the market. Already sold were its 29 homes in Northern Ireland.

Four Seasons collapsed after years of private equity investors rolling in one after another to buy its business, sell its real estate, and at times wrest multimillion-dollar profits through complex debt schemes — until the last big equity fund, Terra Firma, which in 2012 paid about $1.3 billion for the company, was caught short.

In a country where government health care is a right, the Four Seasons story exemplifies the high-stakes rise — and, ultimately, fall — of private equity investment in health and social services. Hanging over society’s most vulnerable patients, these heavily leveraged deals failed to account for the cost of their care. Private equity firms are known for making a profit on quick-turnaround investments.

“People often say, ‘Why have American investors, as well as professional investors here and in other countries, poured so much into this sector?’ I think they were dazzled by the potential of the demographics,” said Nick Hood, an analyst at Opus Restructuring & Insolvency in London, which advises care homes — the British equivalent of U.S. nursing homes or assisted living facilities. They “saw the baby boomers aging and thought there would be infinite demands.”

What they missed, Hood said, “was that about half of all the residents in U.K. homes are funded by the government in one way or another. They aren’t private-pay — and they’ve got no money.”

Residents as ‘Revenue Streams’

As in the United States, long-term care homes in Britain serve a mixed market of public- and private-pay residents, and those whose balance sheets rest heavily on government payments are stressed even in better economic times. Andrew Dobbie, a community officer for Unison, a union that represents care home workers, said private equity investors often see homes like Four Seasons as having “two revenue streams, the properties themselves and the residents,” with efficiencies to exploit.

But investors don’t always understand what caregivers do, he said, or that older residents require more time than spreadsheets have calculated. “That’s a problem when you are looking at operating care homes,” Dobbie said. “Care workers need to have soft skills to work with a vulnerable group of people. It’s not the same skills as stocking shelves in a supermarket.”

A recent study, funded in part by Unison and conducted by University of Surrey researchers, found big changes in the quality of care after private equity investments. More than a dozen staff members, who weren’t identified by name or facility, said companies were “cutting corners” to curb costs because their priority was profit. Staffers said “these changes meant residents sometimes went without the appropriate care, timely medication or sufficient sanitary supplies.”

In August, the House of Commons received a sobering account: The number of adults 65 and older who will need care is speedily rising, estimated to go from 3.5 million in 2018 to 5.2 million in 2038. Yet workers at care homes are among the lowest paid in health care.

“The covid-19 pandemic shone a light on the adult social care sector,” according to the parliamentary report, which noted that “many frustrated and burnt out care workers left” for better-paying jobs. The report’s advice in a year of soaring inflation and energy costs? The government should add “at least £7 billion a year” — more than $8 billion — or risk deterioration of care.

Britain’s care homes are separate from the much-lauded National Health Service, funded by the government. Care homes rely on support from local authorities, akin to counties in the United States. But they have seen a sharp drop in funding from the British government, which cut a third of its payments in the past decade. When the pandemic hit, the differences were apparent: Care home workers were not afforded masks, gloves, or gowns to shield them from the deadly virus.

Years ago, care homes were largely run by families or local entities. In the 1990s, the government promoted privatization, triggering investments and consolidations. Today, private equity firms own three of the country’s five biggest care home providers.

Chris Thomas, a research fellow at the Institute for Public Policy Research, said investors benefited from scant financial oversight. “The accounting practices are horrendously complicated and meant to be complicated,” he said. Local authorities try “to regulate more, but they don’t have the expertise.”

The Financial Shuffle

At Four Seasons, the speed of change was dizzying. From 2004 to 2017, big money came and went, with revenue at times threaded through multiple offshore vehicles. Among the groups that owned Four Seasons, in part or in its entirety: British private equity firm Alchemy Partners; Allianz Capital Partners, a German private equity firm; Three Delta LLP, an investment fund backed by Qatar; the American hedge fund Monarch Alternative Capital; and Terra Firma, the British private equity group that wallowed in debt demands. H/2 Capital Partners, a hedge fund in Connecticut, was Four Seasons’ main creditor and took over. By 2019, Four Seasons was managed by insolvency experts.

Pressed on whether Four Seasons would exist in any form after the current sale of its property and businesses, MHP Communications, representing the company, said in an email: “It is too early in the process to speculate about the future of the brand.”

Vivek Kotecha, an accountant who has examined the Four Seasons financial shuffle and co-authored the Unison report, said private equity investment — in homes for older residents and, increasingly, in facilities for troubled children — is now part of the financial mainstream. The consulting firm McKinsey this year estimated that private markets manage nearly $10 trillion in assets, making them a dominant force in global markets.

“What you find in America with private equity is much the same here,” said Kotecha, the founder of Trinava Consulting in London. “They are often the same firms, doing the same things.” What was remarkable about Four Seasons was the enormous liability from high-yield bonds that underpinned the deal — one equaling $514 million at 8.75% interest and another for $277 million at 12.75% interest.

Guy Hands, the high-flying British founder of Terra Firma, bought Four Seasons in 2012, soon after losing an epic court battle with Citigroup over the purchase price of the music company EMI Group. Terra Firma acquired the care homes and then a gardening business with more than 100 stores. Neither proved easy, or good, bets. Hands, a Londoner who moved offshore to Guernsey, declined through a representative to discuss Four Seasons.

Kotecha, however, helped the BBC try to make sense of Four Seasons’ holdings by tracking financial filings. It was “the most complicated spreadsheet I’ve ever seen,” Kotecha said. “I think there were more subsidiaries involved in Four Seasons’ care homes than there were with General Motors in Europe.”

As Britain’s small homes were swept up in consolidations, some financial practices were dubious. At times, businesses sold the buildings as lease-back deals — not a problem at first — that, after multiple purchases, left operators paying rent with heavy interest that sapped operating budgets. By 2020, some care homes were estimated to be spending as much as 16% of their bed fees on debt payments, according to parliamentary testimony this year.

How could that happen? In part, for-profit providers — backed by private equity groups and other corporations — had subsidiaries of their parent companies act as lender, setting the rates.

Britain’s elder care was unrecognizable within a generation. By 2022, private equity companies alone accounted for 55,000 beds, or about 12.6% of the total for-profit care beds for older people in the United Kingdom, according to LaingBuisson, a health care consultancy. LaingBuisson calculated that the average residential care home fee as of February 2022 was about $44,700 a year; the average nursing home fee was $62,275 a year.

From 1980 to 2018, the number of residential care beds provided by local authorities fell 88% — from 141,719 to 17,100, according to the nonprofit Centre for Health and the Public Interest. Independent operators — nonprofits and for-profits — moved in, it said, controlling 243,000 beds by 2018. Nursing homes saw a similar shift: Private providers accounted for 194,100 beds in 2018, compared with 25,500 decades earlier.

Beyond Government Control

British lawmakers last winter tried — and failed — to bolster financial reporting rules for care homes, including banning the use of government funds to pay off debt.

“I don’t have a problem with offshore companies that make profits if they offer good services. I don’t have a problem with private equity and hedge funds who deliver good returns to their shareholders,” Ros Altmann, a Conservative Party member in the House of Lords and a pension expert, said in a February debate. “I do have a problem if those companies are taking advantage of some of the most vulnerable people in our society without oversight, without controls.”

She cited Four Seasons as an example of how regulators “have no control over the financial models that are used.” Altmann warned that economic headwinds could worsen matters: “We now have very heavily debt-laden [homes] in an environment where interest rates are heading upward.”

In August, the Bank of England raised borrowing rates. It now forecasts double-digit inflation — as much as 11% — through 2023.

And that leaves care home owner Robert Kilgour pensive about whether government grasps the risks and possibilities that the sector is facing. “It’s a struggle, and it’s becoming more of a struggle,” he said. A global energy crisis is the latest unexpected emergency. Kilgour said he recently signed electricity contracts, for April 2023, at rates that will rise by 200%. That means an extra $2,400 a day in utility costs for his homes.

Kilgour founded Four Seasons, opening its first home, in Fife, Scotland, in 1989. His ambition for its growth was modest: “Ten by 2000.” That changed in 1999 when Alchemy swooped in to expand nationally. Kilgour had left Four Seasons by 2004, turning to other ventures.

Still, he saw opportunity in elder care and opened Renaissance Care, which now operates 16 homes with 750 beds in Scotland. “I missed it,” he said in an interview in London. “It’s people and it’s property, and I like that.”

“People asked me if I had any regrets about selling to private equity. Well, no, the people I dealt with were very fair, very straight. There were no shenanigans,” Kilgour said, noting that Alchemy made money but invested as well.

Kilgour said the pandemic motivated him to improve his business. He is spending millions on new LED lighting and boilers, as well as training staffers on digital record-keeping, all to winnow costs. He increased hourly wages by 5%, but employees have suggested other ways to retain staff: shorter shifts and workdays that fit school schedules or allow them to care for their own older relatives.

Debates over whether the government should move back into elder care make little sense to Kilgour. Britain has had private care for decades, and he doesn’t see that changing. Instead, operators need help balancing private and publicly funded beds “so you have a blended rate for care and some certainty in the business.”

Consolidations are slowing, he said, which might be part of a long-overdue reckoning. “The idea of 200, 300, 400 care homes — that big is good and big is best — those days are gone,” Kilgour said.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Health Plan Shake-Up Could Disrupt Coverage for Low-Income Californians

Kaiser Health News:Insurance - September 27, 2022

Almost 2 million of California’s poorest and most medically fragile residents may have to switch health insurers as a result of a new strategy by the state to improve care in its Medicaid program.

A first-ever statewide contracting competition to participate in the program, known as Medi-Cal, required commercial managed-care plans to rebid for their contracts and compete against others hoping to take those contracts away. The contracts will be revamped to require insurers to offer new benefits and meet stiffer benchmarks for care.

The long-planned reshuffle of insurers is likely to come with short-term pain. Four of the managed-care insurers, including Health Net and Blue Shield of California, stand to lose Medi-Cal contracts in a little over a year, according to the preliminary results of the bidding, announced in late August. If the results stand, some enrollees in rural Alpine and El Dorado counties, as well as in populous Los Angeles, San Diego, Sacramento, and Kern counties, will have to change health plans — and possibly doctors.

“I’m still shocked and I’m still reeling from it,” said John Sturm, one of about 325,000 members of Community Health Group, the largest Medi-Cal plan in San Diego County, which could lose its contract. “Which doctors can I keep? How long is it going to take me to switch plans? Are there contingency plans when, inevitably, folks slip through the cracks?” Sturm wondered.

Sturm, 54, who has three mental health conditions, largely because of childhood sexual abuse, said finding a psychologist and psychiatrist he could trust took a lot of time and effort. He pointed to the disruption caused by the rollout of Medi-Cal’s new prescription drug program this year, despite assurances it would go smoothly.

“I have concerns, and I know other people in the community have concerns about what we’re being told versus what the reality is going to be,” Sturm said.

Arguably, the biggest loser in the bidding is Health Net, the largest commercial insurer in Medi-Cal, which stands to lose half its enrollees — including more than 1 million in Los Angeles County alone. St. Louis-based Centene Corp., which California is investigating over allegations it overcharged the state for prescription drugs, bought Health Net in 2016, in part for its Medicaid business, of which L.A. is the crown jewel.

But the state’s health plan selections are not set in stone. The losing insurers are fiercely contesting the results in formal appeals that read like declarations of war on their competitors and on the state. Some of the losers essentially call their winning rivals liars.

The stakes are high, with contracts in play worth billions of dollars annually. Insurers that lose their appeals with the state Department of Health Care Services, which runs Medi-Cal, are likely to take their complaints to court. That could delay final decisions by months or years, causing a headache for the department, which wants coverage under the new contracts to start Jan. 1, 2024.

State officials hope to spend the rest of this year and all of 2023 ensuring the chosen health plans are up to the task, which includes having enough participating providers to minimize disruptions in care.

“Member access and continuity are really our top priorities as part of this transition, and we have dedicated teams that will be working with the health plans on the transition planning and the continuity planning,” Michelle Baass, director of the department, told KHN.

Baass also noted that enrollees have continuity of care rights. “For example, if a member is currently under the care of a doctor during the prior 12 months, the member has the right to continue seeing that doctor for up to 12 months, if certain conditions are met,” she said.

The competitive bidding process is an effort by the department to address persistent complaints that it has not effectively monitored subpar health plans.

Eight commercial insurers bid for Medi-Cal business in 21 counties. They were required to submit voluminous documents detailing every aspect of their operations, including past performance, the scope of their provider networks, and their capacity to meet the terms of the new, stricter contracts.

The new contracts contain numerous provisions intended to bolster quality, health care equity, and transparency — and to boost accountability of the subcontractors to whom health plans often outsource patient care. For example, the plans and their subcontractors will be required to reach or exceed the 50th percentile among Medicaid plans nationally on a host of pediatric and maternal care measures — or face financial penalties.

They will also be on the hook for providing nonmedical social services that address socioeconomic factors, such as homelessness and food insecurity, in an ambitious $8.7 billion, five-year Medi-Cal initiative known as CalAIM, that is already underway.

Local, publicly governed Medi-Cal plans, which cover about 70% of the 12.4 million Medi-Cal members who are in managed care, did not participate in the bidding, though their performance has not always been top-notch. Kaiser Permanente, which this year negotiated a controversial deal with the state for an exclusive Medi-Cal contract in 32 counties, was also exempt from the bidding. (KHN is not affiliated with Kaiser Permanente.)

But all Medi-Cal health insurers, including KP and the local plans, will have to commit to the same goals and requirements.

In addition to Health Net, Blue Shield of California, and Community Health Group — which have contracts with Medi-Cal only in San Diego County — are also big losers, as is Aetna, which lost bids in 10 counties.

Blue Shield, which lost in all 13 counties where it submitted bids, filed a fiercely worded appeal that accuses its rivals Anthem Blue Cross, Molina, and Health Net of failing to disclose hundreds of millions of dollars in penalties against them. It accused those three plans of poor performance “and even mendacity” and said they filled their bids with “puffery,” which the state “bought, hook, line and sinker,” without “an iota of independent analysis.”

Health Net’s appeal slammed Molina, which beat it out in L.A., Sacramento, Riverside, and San Bernardino counties. Molina’s bid, Health Net said, “contains false, inaccurate and misleading information.” The whole bidding process, it said, was “highly flawed,” resulting in “erroneous contract awards that jeopardize the stability of Medi-Cal.”

In particular, Health Net said, the Department of Health Care Services “improperly reopened the procurement” after the deadline, which allowed Molina to make “comprehensive changes” that raised its score.

The protesting health plans are requesting that they be awarded contracts or that the bidding process start over from scratch.

Joseph Garcia, chief operating officer for Community Health Group, said, “It would be easiest for all concerned if they just added us. They don’t have to remove anybody.”

Community Health Group has garnered an outpouring of support from hospital executives, physician groups, community clinics, and the heads of multiple publicly governed Medi-Cal plans who sent a letter to Baass saying they were “shocked, concerned, and very disappointed” by the state’s decision. They called Community Health Group “our strongest partner of 40 years,” for whom “equity is not a buzzword or a new priority,” noting that more than 85% of its staff is bilingual and multicultural.

Community Health Group noted in its appeal that it had lost by less than a point to Health Net, which won a San Diego contract — “a miniscule difference that in itself resulted from deeply flawed scoring.”

Garcia said that if Community Health Group loses its appeal, it will “absolutely” sue in state court. A hearing officer appointed by Baass to consider the appeals has set deadlines to receive written responses and rebuttals by Oct. 7.

There is ample precedent for protracted legal battles in bidding for Medicaid contracts. In Louisiana, Centene and Aetna protested the results of a 2019 rebidding process, which led the state to nullify its awards and restart the bidding. The new results were announced this year, with Centene and Aetna among the winners. In Kentucky, the state court of appeals issued a ruling this month in a contested Medicaid procurement that had been held two years earlier.

Another factor could delay the new contract: California is juggling several massive Medi-Cal changes at the same time. Among them are the implementation of CalAIM and the anticipated enrollment of nearly 700,000 unauthorized immigrants ages 26-49 by January 2024, on top of nearly a quarter-million unauthorized immigrants 50 and older who became eligible this year. And then there’s the recalculation of enrollees’ eligibility, which will take place whenever the federal covid-19-related public health emergency ends. That could push 2 million to 3 million Californians out of Medi-Cal.

“Just hearing you list all those things gave me a minor panic attack,” said Abigail Coursolle, a senior attorney at the National Health Law Program. “They are making a lot of work for themselves in a short amount of time.”

But, Coursolle added, the state has “a very positive vision for improving access and improving the quality of services that people in Medi-Cal receive, and that’s very important.”

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Pages