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

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.

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

September 29, 2022

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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:

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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.

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

September 28, 2022

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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.

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This story can be republished for free (details).

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

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%.

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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.

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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.

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This story can be republished for free (details).

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

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.

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Hemp-Derived Delta-8 Skirts Marijuana Laws and Raises Health Concerns

September 23, 2022

Suzan Kennedy has smoked marijuana, and says her Wisconsin roots mean she can handle booze, so she was not concerned earlier this year when a bartender in St. Paul, Minnesota, described a cocktail with the cannabinoid delta-8 THC as “a little bit potent.”

Hours after enjoying the tasty drink and the silliness that reminded Kennedy of a high from weed, she said, she started to feel “really shaky and faint” before collapsing in her friend’s arms. Kennedy regained consciousness and recovered, but her distaste for delta-8 remains, even though the substance is legal at the federal level, unlike marijuana.

“I’m not one to really tell people what to do,” said Kennedy, 35, who lives in Milwaukee and works in software sales. But if a friend tried to order a delta-8 drink, “I would tell them, ‘Absolutely not. You’re not putting that in your body.’”

The FDA and some marijuana industry experts share Kennedy’s concerns. At least a dozen states have banned the hemp-derived drug, including Colorado, Montana, New York, and Oregon, which have legalized marijuana. But delta-8 manufacturers call the concerns unfounded and say they’re driven by marijuana businesses trying to protect their market share.

So what is the difference? The flower of the marijuana plant, oil derived from it, and edibles made from those contain delta-9 tetrahydrocannabinol, the substance that produces the drug’s high, and can be legally sold only at dispensaries in states that have legalized marijuana. Similar products that contain delta-8 THC are sold online and at bars and retailers across much of the U.S., including some places where pot remains illegal. That’s because a 2018 federal law legalized hemp, a variety of the cannabis plant. Hemp isn’t allowed to contain more than 0.3% of the psychotropic delta-9 THC found in marijuana.

The concerns about delta-8 are largely focused on how it’s made. Delta-8 is typically produced by dissolving CBD — a compound found in cannabis plants — in solvents, such as toluene that is often found in paint thinner. Some people in the marijuana industry say that process leaves potentially harmful residue. A study published in the journal Chemical Research in Toxicology last year found lead, mercury, and silicon in delta-8 electronic cigarettes.

The FDA has issued warnings about the “serious health risks” of delta-8, citing concerns about the conversion process, and has received more than 100 reports of people hallucinating, vomiting, and losing consciousness, among other issues, after consuming it. From January 2021 through this February, national poison control centers received more than 2,300 delta-8 cases, 70% of which required the users to be evaluated at health care facilities, according to the FDA.

Delta-8 is “just the obvious solution to people who want to have access to cannabis but live in a state where it’s illegal,” said Dr. Peter Grinspoon, a primary care physician at Massachusetts General Hospital and a longtime medical cannabis provider. “You can either get in a lot of trouble buying cannabis, or you can get delta-8.”

Grinspoon described delta-8 as about half as potent as marijuana. But because of the lack of research into delta-8’s possible benefits and the absence of regulation, he would not recommend his patients use it. If it were regulated like Massachusetts’ medical and recreational marijuana programs, he said, harmful contaminants could be flagged or removed.

Christopher Hudalla, chief scientific officer at ProVerde Laboratories, a Massachusetts marijuana and hemp testing company, said he has examined thousands of delta-8 products and all contained contaminants that could be harmful to consumers’ health.

Delta-8 has “incredible potential as a therapeutic” because it has many of the same benefits as marijuana, minus some of the intoxication, said Hudalla. “But delta-8, like unicorns, doesn’t exist. What does exist in the market is synthetic mixtures of unknown garbage.”

Justin Journay, owner of the delta-8 brand 3Chi, is skeptical of the concerns about the products. He started the company in 2018 after hemp oil provided relief for his shoulder pain. He soon started wondering what other cannabinoids in hemp could do. “‘There’s got to be some gold in those hills,’” Journay recalled thinking. He said his Indiana-based company now has more than 300 employees and sponsors a NASCAR team.

When asked about the FDA’s reports of bad reactions, Journay said: “There are risks with THC. There absolutely are. There are risks with cheeseburgers.”

He attributes the side effects to taking too much. “We say, ‘Start low.’ You can always take more,” Journay said.

Journay said that he understands concerns about contaminants in delta-8 products and that his company was conducting tests to identify the tiny portion of substances that remain unknown, which he asserts are cannabinoids from the plant.

An analysis of 3Chi delta-8 oil conducted by Hudalla’s firm last year and posted on 3Chi’s website found multiple unidentified compounds that “do not occur naturally” and thus “would not be recommended for human consumption.” Delta-8 oil is still sold on 3Chi’s site.

Journay said the analysis found that only 0.4% of the oil contained unknown compounds. “How can they then definitively say that compound isn’t natural when they don’t even know what it is?” he said in an email.

“The vast majority of negative information out there and the push to make delta-8 illegal is coming from the marijuana industries,” Journay said. “It’s cutting into their profit margins, which is funny that the marijuana guys would all of a sudden be for prohibition.”

Delta-8 products do appear to be significantly cheaper than weed. For example, Curaleaf, one of the world’s largest cannabis companies, offers packages of gummies that contain 100 milligrams of delta-9 THC for $25, plus sales tax, at a Massachusetts dispensary. At 3Chi, gummies with 400 milligrams of delta-8 cost $29.99 online, with no tax.

Journay’s criticism of the marijuana industry holds some truth, said Chris Lindsey, government relations director for the Marijuana Policy Project, which advocates for legalization of marijuana for adults. “We see this happen in every single adult-use legalization state,” said Lindsey. “Their established medical cannabis industry will sometimes be your loudest opponents, and that’s a business thing. That’s not a marijuana thing.”

Still, the bans might not be working fully. In New York, which banned delta-8 in 2021, Lindsey said, it’s available at any bodega.

In July, Minnesota implemented a law that limits the amount of THC, including delta-8, allowed in hemp products outside of its medical marijuana program. News reports said the law would wipe out delta-8. But the state cannot “control what’s being sold over the internet outside of Minnesota and shipped in,” said Maren Schroeder, policy director for Sensible Change Minnesota, which aims to legalize recreational cannabis for adults.

Max Barber, a writer and editor in Minneapolis, remains interested in delta-8 despite his state’s restrictions. Even though he could likely obtain a medical marijuana prescription because he has an anxiety disorder and chronic sleep problems, he hasn’t pursued it because pot made his anxiety worse. He used CBD oil but found the effects inconsistent. In March 2021, he tried a 10-milligram delta-8 gummy.

“It got me pretty high, which I don’t enjoy,” he said.

Then he found what he considers the right dosage for him: one-third of a gummy, which he takes in the evening. He said he now gets between six and eight hours of sleep each night, has less anxiety, and is better able to focus. “I have become kind of an evangelist for delta-8 for everyone I know who has sleep problems,” said Barber, who bought enough gummies to last for months after the new law went into effect.

To address concerns about delta-8, the federal government should regulate it and make accessing cannabis easier for consumers, said Paul Armentano, deputy director of the National Organization for the Reform of Marijuana Laws.

He pointed to a recent study in the International Journal of Drug Policy showing that the number of Google searches for delta-8 in the U.S. soared in 2021 and that interest was especially high in states that restricted cannabis use. “In an environment where whole-plant cannabis is legally available, there would be little to no demand for these alternative products,” said Armentano.

Lindsey, of the Marijuana Policy Project, isn’t so sure that would matter. When he first learned of delta-8’s growing popularity in 2021, he thought it would go the way of drugs like K2 or Spice that he said fall between the regulatory rules long enough to get on shelves before eventually getting shut down.

“That didn’t materialize,” said Lindsey. “The more that we understand about that plant, the more of these different cannabinoids are going to come out.” And that, he said, will in turn spur interest from consumers and businesses.

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.

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KHN’s ‘What the Health?’: Biden Declares the Pandemic ‘Over’

September 22, 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.

President Joe Biden’s declaration in a national interview that the covid-19 pandemic is “over” has complicated his own administration’s efforts to get Congress to provide more funding for treatments and vaccines, and to get the public to go get yet another booster.

Meanwhile, concerns about a return of medical inflation for the first time in a decade is helping boost insurance premiums, and private companies are scrambling to claim their piece of the health care spending pie.

This week’s panelists are Julie Rovner of KHN, Anna Edney of Bloomberg News, Joanne Kenen of the Johns Hopkins Bloomberg School of Public Health and Politico, and Lauren Weber of KHN.

Among the takeaways from this week’s episode:

  • Biden’s comment to “60 Minutes” that the pandemic was over — even though covid is still an issue — highlights the difficulty in communicating to the public how to transition from a public health crisis to a public health problem.
  • Much of the country may agree with the president, as evidenced by fewer people using face masks regularly and a decreased number of commercial restrictions related to covid. But several hundred people are still dying each day, a high toll often overlooked.
  • Insurance premiums appear to be on the upswing this fall, even though medical costs have not been rising as quickly as other parts of the economy in recent months. The increase may reflect insurers’ concerns that, coming out of the covid crisis, consumers will be seeking more medical services.
  • One aspect of health business that is driving up costs is the increased investment by private equity companies, which are expanding their reach beyond emergency room doctors and a few other specialties to a wider range of medical services, including gastroenterology and ophthalmology.
  • Another concern for the future of health costs is the move toward consolidation in health care. Among recent developments on that front were Amazon’s announcement it is moving into primary care with the purchase of One Medical and CVS’ decision to buy home health care company Signify Health.
  • Abortion policies continue to make news in various states. West Virginia passed a law that restricts nearly all abortions; several Utah Republican legislators sent cease-and-desist letters to abortion providers in their state; and Puerto Rico has a new political party campaigning on the issue of trying to curb the commonwealth’s liberal abortion law.
  • While Democrats hope the issue of abortion will swing more voters their way in the midterm elections, it’s not clear whether overall support for abortion will be a deciding issue for voters in more conservative states and bring any changes.

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

Julie Rovner: The Anchorage Daily News’ “Many Alaska Pharmacies Are Understaffed, Leading to Sporadic Hours and Patients Turned Away,” by Annie Berman

Joanne Kenen: Capital B’s “Clinicians Dismiss Black Women’s Pain. The Consequences Are Dire,” by Margo Snipe

Anna Edney: The Guardian’s “Fury Over ‘Forever Chemicals’ as US States Spread Toxic Sewage Sludge,” by Tom Perkins

Lauren Weber: KHN’s “Doctors Rush to Use Supreme Court Ruling to Escape Opioid Charges,” by Brett Kelman

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.

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Death Is Anything but a Dying Business as Private Equity Cashes In

September 22, 2022

Private equity firms are investing in health care from cradle to grave, and in that latter category quite literally. A small but growing percentage of the funeral home industry — and the broader death care market — is being gobbled up by private equity-backed firms attracted by high profit margins, predictable income, and the eventual deaths of tens of millions of baby boomers.

The funeral home industry is in many ways a prime target for private equity, which looks for markets that are highly fragmented and could benefit from consolidation. By cobbling together chains of funeral homes, these firms can leverage economies of scale in purchasing, improve marketing strategies, and share administrative functions.

According to industry officials, about 19,000 funeral homes make up the $23 billion industry in the U.S., at least 80% of which remain privately owned and operated — mostly mom and pop businesses, with a few regional chains thrown in. The remaining 20%, or about 3,800 homes, are owned by funeral home chains, and private equity-backed firms own about 1,000 of those.

Consumer advocates worry that private equity firms will follow the lead of publicly traded companies that have built large chains of funeral homes and raised prices for consumers. “The real master that’s being served is not the grieving family who’s paying the bill — it’s the shareholder,” said Joshua Slocum, executive director of the Funeral Consumers Alliance, a nonprofit that seeks to educate consumers about funeral costs and services.

Although funeral price data is not readily available to the public, surveys by the local affiliates of the alliance have found that when publicly traded or private equity-backed chains acquire individual funeral homes, price hikes tend to follow.

In Tucson, Arizona, for example, when a local owner sold Angel Valley Funeral Home in 2019 to private equity-backed Foundation Partners Group, prices increased from $425 to $760 for a cremation, from $1,840 to $2,485 for a burial with no viewing or visitation, and from $3,405 to $4,480 for a full, economical funeral.

In the Arizona city of Mesa, the sale of Lakeshore Mortuary to the publicly traded funeral home chain Service Corporation International led to price increases for a cremation from $1,565 in 2018 to $1,770 in 2021, for a burial from $2,795 to $3,680, and for an economical funeral from $4,385 to $5,090.

“We believe our pricing is competitive and reasonable in the markets in which we operate,” a Service Corporation International official said in an email.

Details of those price increases were provided by Martha Lundgren, a member of the Funeral Consumers Alliance of Arizona’s board. She said funeral home acquisitions have led to the cancellation of pricing agreements negotiated on behalf of consumers who are members of the alliance. In 2020, a cremation at Adair Dodge Chapel in Tucson cost members $395, nearly two-thirds off the $1,100 standard price. But after Foundation Partners Group acquired the funeral home, the member pricing agreement was canceled, and the price of a direct cremation rose to $1,370.

Foundation Partners Group officials said the price increases partly reflect the higher price of supplies, such as caskets, as well as increasing labor costs. But most of the increases, they said, represent a move to a more transparent pricing system that includes administrative and transportation fees that other funeral homes add on later.

“We don’t take advantage of people in there when they’re not thinking clearly,” said Kent Robertson, the company’s president and CEO. “That’s just not who we are.”

A big surge of consolidation happened in the U.S. funeral home industry in the late 1980s and early 1990s, and again around 2010, said Chris Cruger, a Phoenix-based consultant to the industry. And acquisitions have reached a feverish pace in the past two to three years. Many investors are banking on a significant uptick in demand for death care services in the coming years as 73 million baby boomers, the oldest of whom will be in their late 70s, continue to age.

“Sheer demographics are obviously in everybody’s favor here,” Cruger said. Funeral homes have attractive margins already, and combining them into chains to share administrative costs could boost profits even more.

Meanwhile, many funeral home owner-operators are reaching retirement age and have no one in the family willing to take over. A 2021 survey by the National Funeral Directors Association found that 27% of owners planned to sell their business or retire within five years.

The desire to sell, combined with the investment money pouring into the field, has driven prices for funeral homes to new heights. Before private equity turned its eye to funeral homes, they were selling for three to five times their annual revenue. “Now I’m hearing seven to nine,” said Barbara Kemmis, executive director of the Cremation Association of North America, a trade group for the cremation industry.

The value in funeral homes lies in more than their brick-and-mortar assets. Funeral home directors are often integral parts of their communities and have established significant goodwill with their neighbors. So when corporate chains acquire these homes, they rarely change the name and often keep the former owners around to smooth the transition.

Tony Kumming, president of the NewBridge Group in Tampa, Florida, helps broker funeral home sales. Many of his clients remain skeptical of the large firms and often will take less money to sell to someone they believe won’t stain their hard-earned reputations. Most former owners plan to live in the community and don’t want their friends and neighbors to be mistreated. “I’m not saying someone is going to take half of what another company is offering,” Kumming said. “But there’s two big pieces to a sale now: That’s money and the right fit.”

Five years ago, when Robert Olthof decided to sell his family’s funeral home in Elmira, New York, he contacted some of the large publicly traded funeral home chains. But as representatives from multiple companies visited him to make their offers, Olthof realized that none of the big chains had sent someone versed in the service side of the business. “They sent their accountants, and they sent their lawyers,” he recalled. “Everything was about the numbers, the numbers, the numbers. And I didn’t like that.”

Instead, Olthof sold to Greg Rollins, a former funeral director who had amassed a privately owned, 90-site chain of funeral homes throughout the Northeast. Rollins had offered less money than the big chains had, but he knew what it was like to be awoken at 2:30 a.m. and put on a suit to go help a grieving family. He knew what it was like to bury a child.

“I can’t put a dollar-amount value on how much it’s really worth selling to a person who is a funeral director themselves,” Olthof said. “Because moving forward, your name is still going to be on the front of that building.”

Victoria Haneman, a Creighton University School of Law professor who studies the funeral home industry, worries that new corporate ownership might be devastating for grieving families. “They are not behaving like normal, rational consumers,” she said. “They’re not bargain-shopping because death is viewed as an inappropriate time to bargain-shop.”

For most families, a funeral will be one of the largest expenses they ever incur. But they often enter the shopping process cognitively impaired by grief and unsure of what is customary or appropriate.

Only 1 in 5 consumers visit more than one funeral home to obtain a price list, according to a 2022 survey commissioned by the Consumer Federation of America. And online comparisons are virtually impossible — a study by the federation and the Funeral Consumers Alliance found that just 18% of the funeral homes they sampled listed their prices on their websites. As a result, families generally lean heavily on the expertise of a single funeral director, who has a motive to sell them the most expensive options. So consumers can be pushed into buying packages for open-casket funerals that include embalming and other services that drive up the cost and may be unnecessary.

“Is that sort of pickled, shellacked, cosmetized, preserved corpse where the future will be? I don’t know that the answer is ‘yes,’” Haneman said. “And I think there are investors who are betting that it’s not.”

Foundation Partners Group is a prime example. Backed by the private equity firm Access Holdings, the funeral home chain shifted five years ago to acquiring funeral homes with high cremation rates. Cremation rates nationally have been steadily climbing over the past two decades, with nearly 58% of families now choosing cremation over casket burials. Foundation Partners expects that rate to hit 70% by 2030.

The company has acquired more than 75 businesses in high-cremation states, including Arizona, California, Colorado, and Florida. Most of those funeral homes average a bit over 150 funerals per year.

Individual funeral homes “don’t have access to marketing budgets, they don’t have access to safety and health plans and benefits and these different things,” said Robertson, the Foundation Partners CEO. “And because we have the ability to drive marketing and do other things, we also take that 150-call firm to maybe 200 calls.”

Robertson said the funeral home industry is different from other sectors that private equity firms might consider investing in, describing it as a calling comparable to working in hospice care. Foundation Partners is fortunate their backers understand the service part of the industry, as well as the financials, he said. “Private equity firms aren’t necessarily known for having deep compassion for people. They’re more known for their financial returns,” he said. “To get both is really important.”

Foundation Partners owns Tulip Cremation, an online service that allows people to order a cremation with just a few clicks — and without having to set foot in a funeral home. Tulip currently operates in nine states where Foundation Partners has funeral homes. The company expects the service to eventually operate nationally.

Haneman said innovative approaches like Tulip’s are sorely needed in the funeral home industry, which has barely changed in 100 years. “It’s absurd to me that the average cost of a funeral is running $7,000 to $10,000,” she said. “People need less expensive options, and innovation is going to get us there.” Tulip charges less than $1,000 for a cremation; ashes are mailed back to the families.

Other online cremation services are Solace Cremation, Smart Cremation, and Lumen Cremation.

“Private equity investment has the potential to go one of two directions: It’s either going to entrench status quo and drive price, or the purpose of the investment is going to be disruption,” Haneman said. “And disruption promises the possibility of bringing more affordable processes to market.”

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.

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Buy and Bust: After Platinum Health Took Control of Noble Sites, All Hospital Workers Were Fired

September 22, 2022

The news, under Noble Health letterhead, arrived at 5:05 p.m. on a Friday, with the subject line: “Urgent Notice.” Audrain Community Hospital, Paul Huemann’s workplace of 32 years, was letting workers go.

Word travels fast in a small town. Huemann’s wife, Kym, first heard the bad news in the car when a friend who’d gotten the letter, too, texted.

“Your termination was not foreseeable,” said the letter, dated Sept. 8 and signed Platinum Health Systems, adding that the firing was permanent “with no recourse” and that the “medical facility will be shuttered.”

“I don’t know what my next steps are,” said 52-year-old Huemann, who supervised the laboratory at the Audrain hospital.

The future for the Huemanns, hundreds of other workers, and thousands of patients in two small Missouri towns began to unravel long before that afternoon. The drama playing out in Paul Huemann’s hometown is familiar to many who live in rural America: Communities are so desperate to keep their hospital open that they’re willing to gamble on any buyer, including those backed by private equity.

Sometimes they lose.

Noble Health, a three-year-old private equity-backed startup, had acquired Audrain and nearby Callaway Community Hospital during the pandemic. In March, it suspended all hospital services and later furloughed 181 employees, state records show. 

Noble — facing staggering debt, more than a dozen lawsuits, and at least two federal investigations — struck a deal to sell the hospitals in April to Platinum Neighbors, which is affiliated with Texas-based Platinum Team Management and Platinum Health Systems. In late June, Platinum asked Missouri officials to extend until Sept. 21 a deadline to reopen the hospitals. On Tuesday, Platinum officials told KHN that, “on behalf of Noble,” they asked Missouri regulators for an additional 30-day extension “in an attempt to explore all alternatives for reopening these facilities,” Ryann Gordon, Platinum’s director of marketing, said. “The backpay and health benefits of the employees is of utmost importance.”

Hours before the licensing deadline Wednesday, Platinum submitted a request for a 90-day variance. Missouri regulations do not allow another extension within a year, said Lisa Cox, a spokesperson for the Missouri Department of Health and Senior Services. So the state “worked with them” and granted the request, she said.

Platinum said the hospitals need time to complete construction projects. Audrain’s “emergency room area” has broken windows, and Callaway’s hospital needs “critical repair to the plumbing,” according to the state approval letter. The hospitals can change ownership during the 90 days, Cox said.

Cory Countryman, president of Platinum Health Systems, confirmed the termination of the remaining hospital staff. “We are working with multiple partners to reopen the hospitals,” he said.

That could involve a new owner. One prospect is Owen Shuler, a Georgia-based entrepreneur, who said he is thinking about buying them. Shuler, who was reached by phone after he’d visited the rural communities, said, “I love what I see.”

“It’s heartbreaking as to what has occurred,” said Shuler, whose companies include Bankers Realty Corp. and Shuler Capital Corp. If he bought the hospitals, he said, he would do so as managing director of his new venture, CareONE Global. “In terms of the due diligence, I do not like what I’m seeing and learning,” he said. What he concluded from his review is that “private equity and venture capital need to be kept the heck out of health care.”

On his LinkedIn profile, Shuler said he “brings a lifelong perspective from a family owned skilled care business” as well as expertise in “telemedicine and healthcare services.”

Shuler, who confirmed the hospitals were saddled with substantial debt — “in the ballpark” of $45 million to $50 million — said, “I am not prepared to go on the record about business strategy quite yet.” He said his approach would be “holistic” and include telehealth. Many industry leaders have argued telehealth is a way to bring high-quality medicine to rural communities that can’t afford, and don’t need, a full platoon of specialists on-site.

“Our target is acquiring hospitals in rural and disadvantaged areas and introducing our capabilities to them,” Shuler said, adding that fixing the two “basically broken” Missouri hospitals from the bottom up would be “much easier than trying to go into a healthy system.”

Still, it’s unclear whether Shuler or another buyer will come through and what it would take to reopen them after years of ownership instability and financial trouble.

Venture capital and private equity firm Nueterra Capital launched Noble in December 2019 with executives who had never run a hospital, including Donald R. Peterson, a co-founder who prior to joining Noble had been accused of Medicare fraud. Peterson settled that case without admitting wrongdoing and in August 2019 agreed to be excluded for five years from Medicare, Medicaid, and all other federal health programs, according to the Health and Human Services Office of Inspector General.

Federal regulators did not block the acquisition in which Peterson was involved. “All ownership and managing control information is self-reported,” said Centers for Medicare & Medicaid Services spokesperson Kristen Clemens.

It didn’t take long for problems to surface under Noble Health’s stewardship. Noble has accepted nearly $20 million in federal covid-19 relief funds, including $4.8 million from paycheck protection programs, according to public records.

Yet doctors, nurses, and patients saw evidence that the new owners were skimping on services — failing to pay for and stock surgical supplies and drugs. In Callaway, state inspectors determined that conditions in the hospital endangered patients. Former workers provided KHN bills and pay stubs they said showed Noble had also stopped paying for employee health, dental, vision, and life insurance benefits.

After employees filed complaints about surprise medical bills, the Department of Labor’s Employee Benefits Security Administration launched an investigation in early March, according to a letter sent to the company and obtained by KHN. The department confirmed a second investigation by another one of its divisions, Wage and Hour, into Noble’s management of its Audrain hospital and clinic.

In April, Noble struck a deal to sell both hospitals for $2 and a stock transfer to Platinum, which assumed all liabilities, according to the agreement. In a June 22 letter to state regulators about the hospitals’ operating licenses, Platinum said, “We are requesting this continuance as Noble Health stock has been transferred to Platinum Medical Management.”

While visiting the hospitals in April, Countryman told employees it was a “priority” to pay the back wages Noble owed them.

Neither Noble nor Platinum made good on that in the months since, employees contend. In addition to the federal investigations, nine wage claims — the largest for $355,000 — have been filed against Noble in Kansas, according to data provided through a Kansas Open Records Act request.

By early August, others were recognizing the employee complaints. Principal, which provided dental and vision care coverage, sent letters to workers saying it would not demand that any worker repay benefits the insurer covered after Noble stopped sending premiums for employee coverage. “This situation is not typical,” wrote Principal spokesperson Ashley Miller in an email.

Huemann, as laboratory supervisor, was among the workers who weren’t furloughed in the spring. They reported for work every day in the hopes that the Audrain hospital would reopen. Huemann checked reagents and kept machines operational even as money for supplies was tight.

“We couldn’t get anything,” Huemann said, “so we were living with what we had.”

Huemann, who provided pay stubs to KHN, said he received a paycheck from Noble in late March. He said he did not receive another paycheck until late May. He received regular paychecks in June and early July. But his second July check, under Platinum, was a week late. His final paycheck arrived Aug. 8 and was also late.

His last seven checks came from three companies. They were all on Platinum’s watch: Initially Platinum Neighbors issued the checks, then Callaway County Community Hospital, and finally Noble Health Audrain Inc.

“Everyone cashed their check as soon as they got it,” Huemann said. “There are so many red flags. But you know, we’re at their mercy, we have no control, and we’re still thankful they are saving us.”

The check stubs also show the hospital’s operators deducted $1,385 in total from Huemann’s pay for insurance. The medical insurance was supposed to be with Blue Cross and Blue Shield of Texas, but Huemann said he never received a card and could not confirm coverage.

“I called four or five times on different days,” he said. “They could never find me no matter how they looked me up, with Social Security or date of birth, or anything.”

Countryman referred all financial questions to Platinum’s corporate offices. Ryan Cole, chief executive of Platinum Team, did not directly respond to calls and emails seeking comment.

Some doctors left town as the upheaval swallowed the hospitals.

Others, such as family medicine doctor Diane Jacobi and her nurse practitioner, Regina Hill, joined MU Health Care, affiliated with the University of Missouri, in Mexico, Missouri, the 11,000-person town where Audrain Community Hospital is located.

Jacobi said her patients want local care. “I don’t know if you’re a mama, but if you’re in labor, the idea that you have to spend 45 minutes in a car on the way to the hospital is nerve-wracking,” she said. “It’s safer if you have care.”

Lou Leonatti, an attorney who lives in Mexico, said he feels so strongly that the community needs a hospital and emergency care that he provided loans last year to Noble so the company could meet payroll. Leonatti’s personal $60,000 loan, with an interest rate of about 3%, was due in January but, he said, remains unpaid.

Leonatti helped start Project Sunrise, a local economic development group. If a new agreement is not reached, he said, “we would like to have a Plan B available.”

Peterson, who helped launch Noble’s failed effort to turn around the two Missouri hospitals, seems to have found his Plan B in Dubai. “I’m sitting in the Emirates Air lounge in Dubai marveling at the experience being afforded me at the tender age of 68,” he wrote on LinkedIn. “I’ll be in Riyadh for the next week finishing up due diligence on launching a new business there.”

The post made Tonya Linthacum, a nurse practitioner who worked at Audrain’s cancer screening center for more than two decades, furious. She said that he “destroyed a lot of people’s lives and livelihoods,” adding that “to have someone dupe you like that” and “going on with no consequences. It’s just not the way the world is supposed to be.”

Peterson declined to comment.

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.

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Shift in Child Hospice Care Is a Lifeline for Parents Seeking a Measure of Comfort and Hope

September 22, 2022

POMONA, Calif. — When you first meet 17-month-old Aaron Martinez, it’s not obvious that something is catastrophically wrong.

What you see is a beautiful little boy with smooth, lustrous skin, an abundance of glossy brown hair, and a disarming smile. What you hear are coos and cries that don’t immediately signal anything is horribly awry.

But his parents, Adriana Pinedo and Hector Martinez, know the truth painfully well.

Although Adriana’s doctors and midwife had described the pregnancy as “perfect” for all nine months, Aaron was born with most of his brain cells dead, the result of two strokes and a massive bleed he sustained while in utero.

Doctors aren’t sure what caused the anomalies that left Aaron with virtually no cognitive function or physical mobility. His voluminous hair hides a head whose circumference is too small for his age. He has epilepsy that triggers multiple seizures each day, and his smile is not always what it seems. “It could be a smile; it could be a seizure,” his mother said.

Shortly after Aaron was born, doctors told Adriana, 34, and Hector, 35, there was no hope and they should “let nature take its course.” They would learn months later that the doctors had not expected the boy to live more than five days. It was on Day 5 that his parents put him in home hospice care, an arrangement that has continued into his second year of life.

The family gets weekly visits from hospice nurses, therapists, social workers, and a chaplain in the cramped one-bedroom apartment they rent from the people who live in the main house on the same lot on a quiet residential street in this Inland Empire city.

One of the main criteria for hospice care, established by Medicare largely for seniors but also applied to children, is a diagnosis of six months or less to live. Yet over the course of 17 months, Aaron’s medical team has repeatedly recertified his hospice eligibility.

Under a provision of the 2010 Affordable Care Act, children enrolled in Medicaid or the Children’s Health Insurance Program are allowed, unlike adults, to be in hospice while continuing to receive curative or life-extending care. Commercial insurers are not required to cover this “concurrent care,” but many now do.

More than a decade since its inception, concurrent care is widely credited with improving the quality of life for many terminally ill children, easing stress on the family and, in some cases, sustaining hope for a cure. But the arrangement can contribute to a painful dilemma for parents like Adriana and Hector, who are torn between their fierce commitment to their son and the futility of knowing that his condition leaves him with no future worth hoping for.

“We could lose a life, but if he continues to live this way, we’ll lose three,” said Adriana. “There’s no quality of life for him or for us.”

Aaron’s doctors now say he could conceivably live for years. His body hasn’t stopped growing since he was born. He’s in the 96th percentile for height for his age, and his weight is about average.

His parents have talked about “graduating” him from hospice. But he is never stable for long, and they welcome the visits from their hospice team. The seizures, sometimes 30 a day, are a persistent assault on his brain and, as he grows, the medications intended to control them must be changed or the doses recalibrated. He is at continual risk of gastrointestinal problems and potentially deadly fluid buildup in his lungs.

Adriana, who works from home for a nonprofit public health organization, spends much of her time with Aaron, while Hector works as a landscaper. She has chosen to live in the moment, she said, because otherwise her mind wanders to a future in which either “he could die — or he won’t, and I’ll end up changing the diapers of a 40-year-old man.” Either of those, she said, “are going to suck.”

While cancer is one of the major illnesses afflicting children in hospice, many others, like Aaron, have rare congenital defects, severe neurological impairments, or uncommon metabolic deficiencies. 

“We have diseases that families tell us are one of 10 cases in the world,” said Dr. Glen Komatsu, medical director of Torrance-based TrinityKids Care, which provides home hospice services to Aaron and more than 70 other kids in Los Angeles and Orange counties.

In the years leading up to the ACA’s implementation, pediatric health advocates lobbied hard for the concurrent care provision. Without the possibility of life-extending care or hope for a cure, many parents refused to put their terminally ill kids in hospice, thinking it was tantamount to giving up on them. That meant the whole family missed out on the support hospice can provide, not just pain relief and comfort for the dying child, but emotional and spiritual care for parents and siblings under extreme duress.

TrinityKids Care, run by the large national Catholic health system Providence, doesn’t just send nurses, social workers, and chaplains into homes. For patients able to participate, and their siblings, it also offers art and science projects, exercise classes, movies, and music. During the pandemic, these activities have been conducted via Zoom, and volunteers deliver needed supplies to the children’s homes.

The ability to get treatments that prolong their lives is a major reason children in concurrent care are more likely than adults to outlive the six-months-to-live diagnosis required for hospice.

“Concurrent care, by its very intention, very clearly is going to extend their lives, and by extending their lives they’re no longer going to be hospice-eligible if you use the six-month life expectancy criteria,” said Dr. David Steinhorn, a pediatric intensive care physician in Virginia, who has helped develop numerous children’s hospice programs across the U.S.

Another factor is that kids, even sick ones, are simply more robust than many older people.

“Sick kids are often otherwise healthy, except for one organ,” said Dr. Debra Lotstein, chief of the division of comfort and palliative care at Children’s Hospital Los Angeles. “They may have cancer in their body, but their hearts are good and their lungs are good, compared to a 90-year-old who at baseline is just not as resilient.”

All of Aaron Martinez’s vital organs, except for his brain, seem to be working. “There have been times when we’ve brought him in, and the nurse looks at the chart and looks at him, and she can’t believe it’s that child,” said his father, Hector.

When kids live past the six-month life expectancy, they must be recertified to stay in hospice. In many cases, Steinhorn said, he is willing to recertify his pediatric patients indefinitely.

Even with doctors advocating for them, it’s not always easy for children to get into hospice care. Most hospices care primarily for adults and are reluctant to take kids.

“The hospice will say, ‘We don’t have the capacity to treat children. Our nurses aren’t trained. It’s different. We just can’t do it,’” said Lori Butterworth, co-founder of the Children’s Hospice and Palliative Care Coalition of California in Watsonville. “The other reason is not wanting to, because it’s existentially devastating and sad and hard.”

Finances also play a role. Home hospice care is paid at a per diem rate set by Medicare — slightly over $200 a day for the first two months, about $161 a day after that — and it is typically the same for kids and adults. Children, particularly those with rare conditions, often require more intensive and innovative care, so the per diem doesn’t stretch as far.

The concurrent care provision has made taking pediatric patients more viable for hospice organizations, Steinhorn and others said. Under the ACA, many of the expenses for certain medications and medical services can be shifted to the patient’s primary insurance, leaving hospices responsible for pain relief and comfort care.

Even so, the relatively small number of kids who die each year from protracted ailments hardly makes pediatric hospice an appealing line of business in an industry craving growth, especially one in which private equity investors are active and seeking a big payday.

In California, only 21 of 1,336 hospices reported having a specialized pediatric hospice program, and 59 said they served at least one patient under age 21, according to an analysis of 2020 state data by Cordt Kassner, CEO of Hospice Analytics in Colorado Springs, Colorado.

Hospice providers that do cater to children often face a more basic challenge: Even with the possibility of concurrent care, many parents still equate hospice with acceptance of death. That was the case initially for Matt and Reese Sonnen, Los Angeles residents whose daughter, Layla, was born with a seizure disorder that had no name: Her brain had simply failed to develop in the womb, and an MRI showed “fluid taking up space where the brain wasn’t,” her mother said.

When Layla’s team first mentioned hospice, “I was in the car on my phone, and I almost crashed the car,” Reese recalled. “The first thought that came to mind was, ‘It is just the end,’ but we felt she was nowhere near it, because she was strong, she was mighty. She was my little girl. She was going to get through this.”

About three months later, as Layla’s nervous system deteriorated, causing her to writhe in pain, her parents agreed to enroll her in hospice with TrinityKids Care. She died weeks later, not long after her 2nd birthday. She was in her mother’s arms, with Matt close by.

“All of a sudden, Layla breathed out a big rush of air. The nurse looked at me and said, ‘That was her last breath.’ I was literally breathing in her last breath,” Reese recounted. “I never wanted to breathe again, because now I felt I had her in my lungs. Don’t make me laugh, don’t make me exhale.”

Layla’s parents have no regrets about their decision to put her in hospice. “It was the absolute right decision, and in hindsight we should have done it sooner,” Matt said. “She was suffering, and we had blinders on.”

Adriana Pinedo said she is “infinitely grateful” for hospice, despite the heartache of Aaron’s condition. Sometimes the social worker will stop by, she said, just to say hello and drop off a latte, a small gesture that can feel very uplifting. “They’ve been our lifeline,” she said.

Adriana talks about a friend of hers with a healthy baby, also named Aaron, who is pregnant with her second child. “All the stuff that was on our list, they’re living. And I love them dearly,” Adriana said. “But it’s almost hard to look, because it’s like looking at the stuff that you didn’t get. It’s like Christmas Day, staring through the window at the neighbor’s house, and you’re sitting there in the cold.”

Yet she seems palpably torn between that bleak remorse and the unconditional love parents feel toward their children. At one point, Adriana interrupted herself midsentence and turned to her son, who was in Hector’s arms: “Yes, Papi, you are so stinking cute, and you are still my dream come true.”

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.

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La leche de fórmula puede ser adecuada para los bebés, pero expertos advierten que los niños pequeños no la necesitan

September 21, 2022

Las fórmulas para niños pequeños son un negocio floreciente en Estados Unidos: las ventas de estas bebidas se han duplicado con creces en los últimos años, ya que las empresas han convencido a los padres de que sus hijos necesitan ese refuerzo. Muchos expertos, sin embargo, advierten que estos productos, diseñados para niños de 1 a 3 años, no cubren las necesidades nutricionales más allá de lo que ofrece la dieta típica de un niño pequeño, están sujetos a menos regulaciones que los preparados para lactantes y son caros.

Además, algunos padres alimentan a los bebés con las versiones para niños pequeños, a pesar de que no cumplen con las normas federales para las fórmulas para lactantes y pueden no proporcionar a los bebés los nutrientes adecuados para mantener su crecimiento.

Los pediatras y funcionarios federales de salud señalan que cuando la mayoría de los niños cumple un año, pueden comenzar a beber leche de vaca o un sustituto de la leche a base de plantas sin azúcar. En una declaración de “consenso” de 2019, la Academia Americana de Pediatría y otras organizaciones de salud y nutrición recomendaron no usar fórmulas para niños pequeños, al indicar que “no ofrecen ningún valor nutricional único más allá de lo que se podría obtener con alimentos saludables; además, pueden aportar azúcares añadidos a la dieta.” Las fórmulas para niños pequeños suelen contener edulcorantes y grasas que añaden calorías.

Algunas de las mismas empresas que producen fórmulas para lactantes —como Enfamil, Gerber y Similac— también fabrican fórmulas para niños pequeños, al igual que algunas marcas más pequeñas y de boutique que anuncian que tienen cualidades orgánicas u otras cualidades especiales. Las fórmulas para niños pequeños están disponibles en casi todos los lugares en los que se venden fórmulas para bebés y se promocionan como productos que aportan nutrientes adicionales para ayudar al desarrollo del cerebro, el sistema inmunitario y los ojos de los niños, entre otros beneficios. Son diferentes de las fórmulas médicas prescritas para niños con necesidades específicas.

Un estudio realizado en 2020 reveló que las ventas de fórmulas para niños pequeños en Estados Unidos aumentaron a 92 millones de dólares en 2015, frente a los 39 millones de 2006.

Los padres suelen confundirse con el marketing de las fórmulas, según un estudio dirigido por Jennifer Harris, investigadora de marketing y salud pública de la Universidad de Connecticut. La investigadora descubrió que el 60% de los cuidadores creía falsamente que las fórmulas para niños pequeños tienen nutrientes que no pueden obtener de otros alimentos.

El doctor Anthony Porto, gastroenterólogo pediátrico y profesor de pediatría de la Universidad de Yale, afirmó que le preocupa que estos productos puedan aportar a los niños pequeños más nutrientes y calorías de los que necesitan. A diferencia de lo que se diseña para los bebés, la fórmula para niños pequeños no tiene normas nutricionales: los expertos afirman que es imposible estandarizar un suplemento para la dieta de los niños pequeños porque no hay dos niños iguales.

En los grupos de discusión, dijo Harris, los padres dicen que alimentan a sus hijos con leche de fórmula para llenar las lagunas nutricionales cuando un niño no está comiendo lo suficiente, una preocupación común entre los padres.

“Los bebés suelen ser comedores voraces”, dijo el doctor Stephen Daniels, presidente de pediatría del Hospital Infantil de Colorado. Pero alrededor del primer año de edad, el crecimiento de los niños se estanca, dijo, y “de repente ya no tienen el hambre de antes”. Eso puede preocupar a los padres, añadió, pero “es un fenómeno completamente normal”.

Si los padres tienen dudas sobre la dieta de sus hijos, dijo Daniels, deben consultar a un pediatra o a un médico de familia.

Blanche Lincoln, presidenta del Infant Nutrition Council of America, que representa a los fabricantes de Enfamil, Gerber, Similac y las marcas blancas, dijo en un correo electrónico que las fórmulas para niños pequeños pueden ser útiles porque pueden llenar “las brechas nutricionales durante este período de transición a los alimentos de mesa”. Lincoln, una exsenadora de Arkansas, dijo que las bebidas “ayudan a contribuir a las necesidades nutricionales específicas de los niños pequeños, proporcionando energía y nutrientes importantes, así como vitaminas y minerales esenciales durante este importante período de crecimiento y desarrollo”.

Pero la leche de fórmula para niños pequeños no solo la ingieren ellos, sino también los bebés.

En un estudio reciente, Porto y sus colegas descubrieron que el 5% de los padres de los lactantes declaró haber dado a sus bebés bebidas promocionadas para el grupo de mayor edad. Y la investigación de Harris indicó que el 22% de los padres de bebés mayores de 6 meses había alimentado a sus bebés con leche de fórmula para niños pequeños en el mes anterior. Ambos estudios se realizaron antes de la reciente escasez de fórmula, lo que puede haber agravado el problema.

“Las fórmulas para lactantes y las fórmulas para niños pequeños suelen estar una al lado de la otra en el supermercado”, explica Harris. “Se parecen, pero las fórmulas para niños pequeños son más baratas que las fórmulas para bebés. Así que la gente las confunde y coge la que no es. O piensan: ‘Oh, esta es más barata. Voy a comprar esta”.

Según un correo electrónico de la portavoz de la FDA, Lindsay Haake, las bebidas para niños pequeños no se ajustan a la definición de fórmula infantil, por lo que no están sujetas a los mismos requisitos. Eso significa que no tienen que someterse a los ensayos clínicos y a las pruebas de seguridad de patógenos que hacen las versiones para bebés. “A diferencia de los preparados para lactantes, los preparados para niños pequeños no son necesarios para satisfacer las necesidades nutricionales de los consumidores a los que van destinados”, dijo Haake.

En una declaración a KHN, el Infant Nutrition Council of America dijo: “Las bebidas para niños pequeños tienen un uso y una composición nutricional distintos a los de la fórmula infantil; ambos no son intercambiables. El etiquetado de las bebidas nutricionales para niños pequeños identifica explícitamente el producto como una bebida para niños pequeños destinada a niños de 12 meses o más en la parte delantera de la etiqueta del envase”.

Sin embargo, varias marcas caras de fórmulas para niños pequeños hechas por empresas más pequeñas -que a menudo se anuncian como elaborados con leche de cabra, leche entera A2 (que carece de una proteína láctea común) o ingredientes veganos que no son de soja-, sí cumplen los requisitos nutricionales para los bebés, y algunos lo anuncian.

Harris argumentó que esto también confunde a los padres y no debería permitirse. El hecho de que una fórmula para niños pequeños tenga los ingredientes nutricionales exigidos por la FDA para las fórmulas infantiles no significa que haya cumplido con las demás pruebas exigidas a las fórmulas infantiles, dijo.

Los reguladores federales no han obligado a ninguna de las empresas a retirar esos productos. En un correo electrónico, la portavoz de la FDA, Marianna Naum, dijo: “La FDA no comenta sobre posibles acciones para hacer cumplir (la ley)”.

Una empresa, Nature ‘s One, cuyas fórmulas para niños pequeños se llaman “Baby’s Only”, recibió cartas de advertencia hace una década de la FDA sobre el hecho de que las promocionara para bebés. Ese caso se cerró en 2016. El sitio web de la compañía dice que la fórmula Baby’s Only “cumple con los requisitos de nutrientes para bebés” y que “Baby’s Only Organic® puede servirse hasta los 3 años de edad“. Sus detractores dicen que ese lenguaje implica que la fórmula está bien para los bebés menores de 1 año. El sitio web de la compañía y su cuenta de Instagram tienen testimonios de padres que indican que alimentan a sus bebés con la fórmula, así como fotos de bebés bebiéndola.

Jay Highman, director general y presidente de Nature’s One, dijo que Baby’s Only está claramente etiquetada como una fórmula para niños pequeños y que en la parte posterior de la lata se indica que “Baby’s Only está destinada a un niño pequeño de 1 año de edad o más o cuando lo indique un profesional de la salud.” También dijo que desde el lanzamiento de la empresa en 1999, sus fórmulas han cumplido todas las normas nutricionales, de fabricación y de seguridad exigidas a las fórmulas infantiles, aunque no tengan que hacerlo. “Nos comportamos como si fuéramos una fórmula para bebés, pero la vendíamos como una fórmula para niños pequeños”, dijo Highman.

Dijo que los ensayos clínicos exigidos por la FDA son una gran barrera para sacar al mercado una nueva fórmula infantil y que muchos otros países no exigen un ensayo clínico. Baby’s Only ha completado recientemente un ensayo clínico, dijo, y la empresa espera poder venderlo pronto como fórmula infantil.

Sin embargo, los pediatras y los expertos en nutrición siguen advirtiendo a los padres sobre el uso de las bebidas para niños pequeños. “No hay duda de que las fórmulas para lactantes son muy importantes durante el primer año de vida”, afirma Daniels. Pero no recomienda la versión para niños pequeños “porque no es tan útil, porque es confusa, porque es cara”.

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.

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Formula May Be Right for Infants, but Experts Warn That Toddlers Don’t Need It

September 21, 2022

Formulas for toddlers are a burgeoning business in the United States: Sales of the drinks more than doubled in recent years as companies convinced parents that their little ones needed the liquid boost. But many experts warn that these products, designed for children ages 1 to 3, fill no nutritional needs beyond what is available in a typical toddler diet, are subject to less regulation than infant formula, and are expensive.

In addition, some parents feed the toddler versions to infants even though they do not meet federal standards for infant formula and may not provide babies with adequate nutrients to sustain their growth.

Pediatricians and federal health officials say that when most children turn 1, they can begin drinking cow milk or an unsweetened plant-based milk substitute. In a 2019 “consensus” statement, the American Academy of Pediatrics and other health and nutrition organizations recommended against using toddler formulas, saying “they offer no unique nutritional value beyond what could be obtained with healthy foods; furthermore, they may contribute added sugars to the diet.” The toddler formulas often contain sweeteners and fats that add calories.

Some of the same companies that produce infant formula — including Enfamil, Gerber, and Similac — also make toddler formulas, as do some smaller, boutique brands that advertise that they have organic or other special qualities. Toddler formulas are available nearly everywhere infant formulas are sold and are marketed as providing extra nutrients to help children’s brain, immune system, and eye development, among other benefits. They are different from medical formulas prescribed for children with specific needs.

A 2020 study found that sales of toddler formula in the U.S. rose to $92 million in 2015 from $39 million in 2006.

Parents are often confused by the marketing for the formulas, according to a study led by Jennifer Harris, a marketing and public health researcher at the University of Connecticut. She found that 60% of caregivers falsely believed toddler formulas have nutrients that toddlers can’t get from other foods.

Dr. Anthony Porto, a pediatric gastroenterologist and pediatrics professor at Yale University, said he is concerned these products could be giving toddlers more nutrients and calories than they need. Unlike what’s designed for infants, toddler formula has no nutritional regulations: Experts say standardizing a supplement to toddlers’ diets is impossible because no two children are alike.

In focus groups, Harris said, parents report feeding their children toddler formula to fill nutritional gaps when a child isn’t eating enough, a common concern among parents.

“Infants are often voracious eaters,” said Dr. Stephen Daniels, chair of pediatrics at Children’s Hospital Colorado. But at around a year of age, children’s growth plateaus, he said, and “they’re suddenly not hungry in the way they used to be anymore.” That can worry parents, he added, but “it’s a completely normal phenomenon.”

If parents have concerns about their children’s diet, Daniels said, they should consult a pediatrician or family doctor.

Blanche Lincoln, president of the Infant Nutrition Council of America, which represents the makers of Enfamil, Gerber, Similac, and store brands, said in an email that the toddler formulas can be helpful because they can fill “nutritional gaps during this period of transition to table foods.” Lincoln, a former U.S. senator from Arkansas, said the drinks “help contribute to the specific nutritional needs of toddlers by providing energy and important nutrients, as well as essential vitamins and minerals during this important period of growth and development.”

But toddler formula isn’t being ingested by toddlers alone — it’s also being fed to infants. In a recent study, Porto and colleagues found that 5% of infants’ parents reported giving their babies drinks marketed for the older age group. And Harris’ research indicated that 22% of parents of infants older than 6 months had fed their babies toddler formula in the previous month. Both studies were conducted before the recent infant formula shortage, which may have exacerbated the problem.

“Infant formulas and toddler formulas tend to be next to each other in the supermarket,” Harris said. “They look similar, but the toddler formulas are cheaper than the infant formulas. So people confuse them, and they grab the wrong one. Or they think, ‘Oh, this one is less expensive. I’ll get this one instead.’”

According to an email from FDA spokesperson Lindsay Haake, toddler drinks do not meet the definition of infant formula, so they are not subject to the same requirements. That means they do not have to undergo the clinical trials and pathogen safety testing that the infant versions do. “Unlike infant formulas, toddler formulas are not necessary to meet the nutritional needs of their intended consumers,” Haake said.

In a statement to KHN, the Infant Nutrition Council of America said, “Toddler drinks have a distinctive use and nutritional makeup from infant formula; the two are not interchangeable. The labeling of toddler nutritional drinks explicitly identifies the product as a toddler drink intended for children 12 months and older on the front of the package label.”

However, several expensive toddler formula brands made by smaller companies — often advertised as being made from goat milk, A2 whole milk (which lacks one common milk protein), or vegan ingredients that aren’t soy — do meet nutritional requirements for infants, and some advertise that.

Harris argued that this confuses parents, too, and shouldn’t be allowed. Just because a toddler formula has the nutritional ingredients required by the FDA for infant formula doesn’t mean it has met the other tests required of infant formula, she said.

Federal regulators have not forced any of the companies to withdraw those products. In an email, FDA spokesperson Marianna Naum said, “The FDA does not comment on potential compliance actions.”

One company, Nature’s One, whose toddler formulas are named “Baby’s Only,” received warning letters a decade ago from the FDA about marketing them for infants. That case was closed in 2016. The company’s website says that Baby’s Only formula “meets nutrient requirements for infant” and that “Baby’s Only Organic® can be served up to 3-years of age.” Critics say that language implies the formula is fine for babies younger than 1. The company’s website and its Instagram account feature customer testimonials from parents who report feeding the formula to their infants, as well as pictures of infants drinking it.

Jay Highman, CEO and president of Nature’s One, said that Baby’s Only is clearly labeled as a toddler formula and that the back of the can states that “Baby’s Only is intended for a toddler 1-year of age or older OR when directed by a healthcare professional.” He also said that since the company launched in 1999, its formulas have met all the nutritional, manufacturing, and safety standards required of infant formula even though they don’t have to. “We behaved like we are an infant formula, but we were selling it as a toddler formula,” Highman said.

He said that the clinical trials required by the FDA are a huge barrier to bringing a new infant formula to market and that many other countries don’t require a clinical trial. Baby’s Only recently completed a clinical trial, he said, and the company expects to be able to sell it as an infant formula soon.

Yet pediatricians and nutritional experts continue to caution parents about using the toddler drinks. “There’s no question that infant formula is very important in the first year of life,” Daniels said. But he doesn’t recommend the toddler version “because it’s not that useful, because it’s confusing, because it’s expensive.”

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.

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Genetic Tests Create Treatment Opportunities and Confusion for Breast Cancer Patients

September 21, 2022

The past decade has witnessed a rapid expansion of genetic tests, including new instruments to inform patients who have been diagnosed with breast cancer about the risk of recurrence and to guide their treatment.

But the clinical significance of many of the inherited mutations that can now be identified remains unclear, and experts are torn on when and how to deploy all the new tests available. Patients are sometimes left paying out-of-pocket for exams that are not yet the standard of care, and even the most up-to-date oncologists may be uncertain how to incorporate the flood of new information into what used to be standard treatment protocols.

A quarter-century ago, Myriad Genetics introduced the first breast cancer genetic test for BRCA mutations, two genes associated with a substantially elevated risk of getting breast cancer, opening the door to a new era in genetic testing. BRCA1 and BRCA2 mutations account for as many as half of all hereditary breast cancers, and people with a problematic mutation on one of those genes have a 45% to 72% chance of developing breast cancer during their lifetimes. They may also be at higher risk for ovarian and other cancers than people without harmful BRCA mutations.

But the clinical significance is murkier for many other genetic tests.

Testing for BRCA1 and BRCA2 genes used to cost thousands of dollars. Now, for a fraction of that, doctors can order multi-gene test panels from commercial labs that look for mutations in dozens of genes. Some direct-to-consumer companies offer screening panels for a few hundred dollars, though their reliability varies.

When Jen Carbary was diagnosed with breast cancer in 2017 at age 44, genetic testing identified a mutation in a gene called PALB2 that significantly increases the risk of developing breast cancer. Guidelines suggest that breast cancer patients with a PALB2 mutation, much like those with BRCA1 and BRCA2 mutations, consider having a mastectomy to reduce the chance of a breast cancer recurrence.

“I wish genetic testing was the standard of care,” said Carbary, who owed nothing for the test because her insurer covered the cost.

Carbary, who lives in Sterling Heights, Michigan, said the test results affirmed the decision she had already made to have a double mastectomy and provided important information for family members, including her 21-year-old daughter and 18-year-old son, who will likely be tested in their mid-20s or early 30s.

But some breast cancer experts are concerned that widespread testing may also identify genetic mutations whose impact is unclear, creating anxiety and leading to further testing and to treatment of questionable value that could raise costs for the health care system.

It can also confuse patients.

“It happens a lot, that patients find their way to us after getting confusing results elsewhere,” said Dr. Mark Robson, chief of the breast medicine service at Memorial Sloan Kettering Cancer Center in New York City. Robson said the cancer center has a clinical genetics service, staffed by doctors and genetic counselors, that helps people make decisions about how to manage genetic testing results.

For people diagnosed with breast cancer, many professional groups, including the influential National Comprehensive Cancer Network, or NCCN, recommend limiting testing to certain people, including those with high-risk factors, such as a family history of breast cancer; those who are 45 or younger when they’re diagnosed; and those with Ashkenazi Jewish ancestry.

But in 2019, the American Society of Breast Surgeons recommended a different approach: Offer genetic testing to all patients who are diagnosed with or have a personal history of breast cancer. The recommendation was controversial.

“The NCCN guidelines [cover] most of the women who needed testing, but we wanted to get them all,” said Dr. Eric Manahan, a general surgeon in Dalton, Georgia, and a member of the surgeons group’s board of directors.

Mutations on other genes that are associated with breast cancer are much less common than BRCA1 and BRCA2 mutations and generally don’t increase the risk of developing breast cancer as much. The cancer-causing impact of these genes may be less clear than that of the BRCA genes, which have been tested for since the mid-1990s.

And the appropriate response to the less common mutations — whether to consider a risk-reducing mastectomy or stepped-up screening — is often unclear.

“Things get sloppier and sloppier when you look at other genes,” said Dr. Steven Katz, a professor of medicine and health management and policy at the University of Michigan. “The risks tend to be lower for different cancers, and less certain and more variable. You might walk away wondering, ‘Why’d I have to know that?’”

After people are diagnosed with breast cancer, genetic testing can help inform their decisions about the types of surgery to pursue — for example, a high risk of recurrence or a new breast cancer might persuade some to opt for more extensive surgery, such as a double mastectomy. Testing can also provide important information to family members about their potential cancer risk.

(This type of “germline” genetic testing, as it’s called, looks at mutations in the genes that people inherit from their parents. It is different from genomic tumor tests that look at specific genes or proteins in the cancer cells and can help doctors understand the rate at which the cancer cells are dividing, for example, and the likelihood of a cancer recurrence.)

Increasingly, germline genetic testing can also help guide other treatment decisions. Some patients with metastatic breast cancer who have BRCA1 or BRCA2 mutations may be good candidates for PARP inhibitors, cancer drugs that target tumors with mutations in those genes.

But genetic testing that uncovers inherited mutations in many other genes yields less clearly actionable information, even though positive results may alarm people.

At Memorial Sloan Kettering, cancer specialists focus on “therapeutic actionability,” said Robson. Will testing help someone decide whether she should get a double mastectomy or provide other important guidance? “A policy of testing everyone will identify very few additional BRCA breast mutations but will cost a lot,” he said.

As a result, doctors are debating how best to deploy and incorporate new genetic knowledge. Insurers are trying to figure out which to pay for.

There is both underuse of tests that science says are relevant and overuse of tests that experts say provide information that can’t be interpreted with any scientific certainty.

The result may be confusion for patients newly diagnosed with breast cancer as they confront the expense of genetic tests and sometimes little guidance on the proper treatment.

Some doctors say the first step is to make sure that the small group of people who would clearly benefit are getting the genetic tests whose meaning is clearly understood. Only 15% of breast cancer patients who met select NCCN testing guidelines for inherited cancer received genetic testing, according to a 2017 study that examined data from a national household health survey between 2005 and 2015.

“I would argue that our focus needs to be on the people who are at high risk for breast cancer that aren’t even identified yet,” said Dr. Tuya Pal, associate director for cancer health disparities at Vanderbilt-Ingram Cancer Center and vice chair of the NCCN guidelines panel for genetic/familial high-risk assessment of breast, ovarian, and pancreatic cancers.

Patients may fall through the cracks because no one tells them they should be tested. In one analysis, 56% of high-risk breast cancer patients who didn’t get genetic testing said their doctors didn’t recommend it.

Even if doctors recommend genetic testing, they may lack the expertise to determine which tests people need and how to interpret the results. That’s the role of genetic counselors, but their ranks are stretched thin.

The consequences can be serious. In a study of 666 breast cancer patients who received genetic testing, half of those at average risk for inherited cancer got double mastectomies based on test results that found “variants of uncertain significance,” which aren’t clinically actionable. As many as half of surgeons reported managing such patients the same way as those with cancer-causing mutations.

“The bulk of our research would say that there is still room for improvement in terms of clinicians getting the understanding they need,” said Dr. Allison Kurian, director of the women’s clinical cancer genetics program at Stanford University and a co-author of the study.

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.

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Centene to Pay $166 Million to Texas in Medicaid Drug Pricing Settlement

September 19, 2022

Health insurance giant Centene Corp. has agreed to pay $165.6 million to Texas to resolve claims that it overcharged the state’s Medicaid program for pharmacy services.

It’s the biggest known payout by the nation’s largest Medicaid insurer over its drug pricing practices. The deal was signed July 11 but hadn’t been publicly announced until Monday after KHN obtained a copy of the settlement through a Texas public records request and began asking questions.

The agreement makes Texas at least the 12th state to settle pharmacy billing claims with St. Louis-based Centene.

Centene did not respond Monday to multiple requests for comment about the Texas settlement. But it has denied wrongdoing in several settlements, and Centene President and Chief Operating Officer Brent Layton said last year that settlements in Ohio and Mississippi reflected the company’s “commitment to making the delivery of healthcare local, simple and transparent” and allow it to continue its “relentless focus on delivering high-quality outcomes to our members.”

Most states contract with private insurance companies such as Centene to cover people who have disabilities or earn low incomes in their state Medicaid programs, which are jointly paid for by state and federal taxpayers. In many of those states, the insurance company handles Medicaid prescription medications through what is called a pharmacy benefit manager, or PBM, to get lower prices. Such benefit managers act as middlemen between drugmakers and health insurers and as intermediaries between health plans and pharmacies. Centene has provided both those services in multiple states.

Medicaid has provided a big launching pad for Centene’s growth and revenue. The company is the largest Medicaid managed-care insurer in the country, providing health insurance benefits to 15.4 million enrollees nationwide.

Multiple states have pursued allegations against Centene’s pharmacy manager business, alleging that it overbilled their Medicaid programs for prescription drugs and pharmacy services. The total number of states is not publicly known. Centene has 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. Three other states and their settlement amounts have not been identified by Centene or the states themselves.

The company’s first settlements came in 2021 with Ohio and Mississippi. The $88 million that Centene agreed to pay Ohio was its largest public settlement amount before the deal with Texas.

Exactly how the company may have overcharged states, or failed to meet the terms of its contracts, is not disclosed in the settlements, said Joey Mattingly, associate professor at the University of Maryland School of Pharmacy. “There are a lot of ways you could overcharge Medicaid,” Mattingly said. “It’s quite amazing that it’s this number of states.”

The Texas settlement isn’t expected to be Centene’s final PBM payout. In a July filing with the U.S. Securities and Exchange Commission, Centene wrote that “it is in discussions to bring final resolution” to drug billing concerns in “other affected states” but did not specify the states. It set aside $1.25 billion in 2021 to resolve the pharmacy benefit manager settlements.

Among the other states may be California, which is investigating Centene’s role in providing pharmacy benefits to its Medicaid enrollees, KHN first reported in April. Florida and South Carolina have signed legal agreements with a Mississippi-based firm, Liston & Deas, that has represented other states, including Texas, in their pharmacy benefit inquiries into Centene.

Still, the settlements haven’t caused the business relationships to end. In Ohio and Mississippi, the company has renewed key state managed-care contracts after settling the pharmacy benefit allegations.

And just last week, Centene announced that Texas had renewed the contract of the company’s Texas affiliate, Superior HealthPlan, to deliver health care to foster care children and youths — despite the July settlement over its prescription drug management. Centene did not disclose the new contract’s financial terms.

An undisclosed portion of the Texas prescription drug settlement is expected to go to the federal government because of its role in helping finance Medicaid. Centene’s agreement with Texas required the company to pay half the settlement amount in August.

Centene probably agreed to pay more to Texas than Ohio because of a larger number of prescription drug claims there, said Antonio Ciaccia, president of 3 Axis Advisors, a consulting firm that has worked with Liston & Deas on drug billing issues.

“The results we achieved in this case send a clear message to providers that Texas expects transparency from its Medicaid partners as required by Texas law,” said Attorney General Ken Paxton in a statement. The office did not clarify why it didn’t disclose the settlement earlier.

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.

“You’re seeing increasing recognition that this is an important part of the drug affordability problem in our country,” said Erin Trish, associate professor at the University of Southern California School of Pharmacy. “This is actually a pretty consolidated and poorly functioning industry that’s hidden under the veil of opacity and secrecy for a decade or so now.”

Rebecca Grapevine contributed to this article.

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.

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Médicos se apresuran a usar fallo de la Corte Suprema para liberarse de cargos por opioides

September 19, 2022

El doctor Nelson Onaro admitió el verano pasado que había escrito recetas ilegales, aunque dijo que solo pensaba en sus pacientes. Desde una pequeña clínica en Oklahoma, repartió cientos de pastillas de opioides y docenas de parches de fentanilo sin un propósito médico legítimo.

“Esos medicamentos fueron recetados para ayudar a mis pacientes, desde mi propio punto de vista”, dijo Onaro en la corte, mientras, a regañadientes, se declaraba culpable de seis cargos de tráfico de drogas. Al confesar, podría haber recibido una sentencia reducida de tres años o menos en prisión.

Pero Onaro cambió de opinión en julio. En los días previos a su sentencia, le pidió a un juez federal que desestimara su acuerdo de culpabilidad, enviando su caso a juicio. Para tener la oportunidad de ser exonerado, enfrentaría cuatro veces más cargos y la posibilidad de una sentencia más severa.

¿Por qué correr el riesgo? Un fallo de la Corte Suprema ha elevado el umbral para condenar en casos como el de Onaro. En una decisión de junio, el tribunal dijo que los fiscales no solo deben probar que una receta no estaba médicamente justificada sino también que el que la escribió sabía del riesgo.

De repente, el estado mental de Onaro tiene más peso en la corte. Los fiscales no se han opuesto a que el médico retire su declaración de culpabilidad de la mayoría de los cargos, admitiendo en una presentación judicial que enfrenta “un cálculo legal diferente” después de la decisión de la Corte Suprema.

El fallo unánime de la Corte complica los esfuerzos continuos del Departamento de Justicia para responsabilizar penalmente a los que recetan de manera irresponsable por alimentar la crisis de opioides.

Antes, los tribunales inferiores no habían considerado la intención del que recetaba. Hasta ahora, los médicos enjuiciados en gran medida no podían defenderse argumentando que estaban actuando de buena fe cuando emitían recetas incorrectas. Ahora pueden, aunque no es necesariamente una garantía para salir de la cárcel, dicen los abogados.

“Esencialmente, a los médicos se los esposaba”, dijo Zach Enlow, abogado de Onaro. “Ahora pueden quitarse las esposas. Pero eso no significa que van a ganar la pelea”.

La decisión de la Corte Suprema en Ruan vs. Estados Unidos, emitida el 27 de junio, fue eclipsada por la controversia nacional tres días antes, cuando el tribunal anuló los derechos federales del aborto.

Pero el fallo, menos conocido ahora, se está filtrando en silencio a través de los tribunales federales, fortaleciendo a los acusados ​​en los casos de abuso de recetas y puede tener un efecto escalofriante en futuros juicios a médicos bajo el Controlled Substance Act.

En los tres meses desde que se emitió, la decisión de Ruan se ha invocado en al menos 15 juicios en curso en 10 estados, según una revisión de KHN de los registros de la corte federal.

Los médicos citaron la decisión en las apelaciones posteriores a la condena, las mociones para absoluciones, nuevos juicios, reversiones de culpabilidad y un intento fallido de excluir el testimonio de un experto en prescripciones, argumentando que su opinión ahora era irrelevante. Otros acusados ​​han solicitado con éxito retrasar sus casos para que la decisión de Ruan pueda verse utilizarse en sus argumentos en los próximos juicios o audiencias de sentencia.

David Rivera, ex fiscal estadounidense de la era Obama, quien lideró juicios sobre abuso de prescripciones en Tennessee, dijo que cree que los médicos tienen una “gran oportunidad” de anular las condenas si se les prohibió discutir una defensa de buena fe o se instruyó a un jurado que ignorara este argumento.

Rivera dijo que los acusados ​​que movilizaban cientos de miles de pastillas aún serían condenados, incluso si finalmente se requiriera un segundo juicio. Pero la Corte Suprema ha extendido un “salvavidas” a un grupo pequeño de acusados ​​que “dispensaron con su corazón, no con su mente”, dijo.

“Lo que la Corte Suprema está tratando de hacer es dividir entre un médico malo y una persona que podría tener una licencia para practicar la medicina pero que no actúa como médico y es un traficante de drogas”, dijo Rivera. “Un médico que actúa bajo una creencia sinceramente sostenida de que está haciendo lo correcto, incluso si puede ser horrible en su trabajo y no se le deben confiar vidas, incluso eso no es criminal”.

La decisión de Ruan fue el resultado de las apelaciones de dos médicos, Xiulu Ruan y Shakeel Kahn, quienes fueron condenados por separado por recetar píldoras en Alabama y Wyoming, respectivamente, y sentenciados a 21 y 25 años de prisión. En ambos casos, los fiscales se basaron en una táctica común para mostrar que las recetas eran un delito: los testigos expertos revisaron las recetas de los acusados ​​y testificaron que estaban fuera de lugar con lo que un médico razonable haría.

Pero al escribir la opinión de la Corte Suprema, el entonces juez Stephen Breyer insistió en que la carga de la prueba no debería ser tan simple de superar, devolviendo ambas condenas a los tribunales inferiores para su reconsideración.

Debido a que a los médicos se les permite, y se espera, que distribuyan drogas, escribió Breyer, los fiscales no solo deben demostrar que escribieron recetas sin propósito médico, sino que también lo hicieron “a sabiendas o intencionalmente”. De lo contrario, los tribunales corren el riesgo de castigar “conductas que se encuentran cerca, pero en el lado permitido de la línea criminal”, escribió Breyer.

Para los abogados defensores, el fallo unánime envió un mensaje inequívoco.

“Este es un tiempo hiperpolarizado en Estados Unidos, y particularmente en la corte”, dijo Enlow. “Sin embargo, este fue un fallo de 9-0 que decía que el mens rea, o el estado mental del médico, es importante”.

Tal vez en ninguna parte la decisión de Ruan fue más apremiante que en el caso del doctor David Jankowski, un médico de Michigan que estaba en juicio.

Jankowski fue condenado por crímenes federales de drogas y fraude y enfrenta 20 años de prisión. En un anuncio del veredicto, el Departamento de Justicia dijo que el médico y su clínica suministraron a las personas “sin necesidad de drogas”, que se “vendían en las calles para alimentar las adicciones de los adictos a los opioides”.

La abogada defensora Anjali Prasad dijo que el fallo de Ruan llegٕó antes de las deliberaciones del jurado en el caso, pero después de que los fiscales pasaran semanas presentando el argumento de que el comportamiento de Jankowski no fue el de alguien que prescribe de manera razonable, un estándar legal que ya no es suficiente para convencer.

Prasad citó la decisión de Ruan en una moción para un nuevo juicio, que fue denegada, y dijo que tiene la intención de utilizar la decisión como base para una próxima apelación. La abogada también dijo que está discutiendo con otros dos clientes sobre apelar sus condenas en base a Ruan.

“Espero que los abogados de defensa penal como yo estén más fortalecidos para llevar sus casos a juicio y que sus clientes estén 100% listos para luchar contra los federales, lo cual no es una tarea fácil”, dijo Prasad.

Algunos acusados ​​lo están intentando. Hasta ahora, algunos han obtenido pequeñas victorias. Y al menos uno sufrió una derrota aplastante.

En Tennessee, la enfermera practicante Jeffrey Young, acusada de intercambiar opioides por sexo y notoriedad para ser parte de un piloto de un reality show, retrasó con éxito su juicio de mayo a noviembre para dar cuenta de la decisión de Ruan, argumentando que “alteraría drásticamente el paisaje de la guerra del gobierno contra los que hacen recetas”.

También en Tennessee, Samson Orusa, un médico y pastor que el año pasado fue condenado por entregar recetas de opioides sin examinar a los pacientes, presentó una moción para un nuevo juicio basado en la decisión de Ruan, luego persuadió a un juez reacio a retrasar su sentencia durante seis meses. para considerarlo.

Y en Ohio, el doctor Martin Escobar citó el fallo de Ruan en un argumento de 11 horas para evitar la prisión.

En enero, Escobar se declaró culpable de 54 cargos de distribución de sustancias controladas, incluidas las recetas que causaron la muerte de dos pacientes. Después de la decisión de Ruan, Escobar intentó retirar su petición, diciendo que habría ido a juicio si hubiera sabido que los fiscales tenían que demostrar intencionalidad.

Una semana después, el día en que Escobar fue sentenciado, un juez federal negó la moción.

Su declaración de culpabilidad permaneció.

Escobar fue condenado a 25 años.

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.

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Doctors Rush to Use Supreme Court Ruling to Escape Opioid Charges

September 19, 2022

Dr. Nelson Onaro conceded last summer that he’d written illegal prescriptions, although he said he was thinking only of his patients. From a tiny, brick clinic in Oklahoma, he doled out hundreds of opioid pills and dozens of fentanyl patches with no legitimate medical purpose.

“Those medications were prescribed to help my patients, from my own point of view,” Onaro said in court, as he reluctantly pleaded guilty to six counts of drug dealing. Because he confessed, the doctor was likely to get a reduced sentence of three years or less in prison.

But Onaro changed his mind in July. In the days before his sentencing, he asked a federal judge to throw out his plea deal, sending his case toward a trial. For a chance at exoneration, he’d face four times the charges and the possibility of a harsher sentence.

Why take the risk? A Supreme Court ruling has raised the bar to convict in a case like Onaro’s. In a June decision, the court said prosecutors must not only prove a prescription was not medically justified ― possibly because it was too large or dangerous, or simply unnecessary ― but also that the prescriber knew as much.

Suddenly, Onaro’s state of mind carries more weight in court. Prosecutors have not opposed the doctor withdrawing his plea to most of his charges, conceding in a court filing that he faces “a different legal calculus” after the Supreme Court decision.

The court’s unanimous ruling complicates the Department of Justice’s ongoing efforts to hold irresponsible prescribers criminally liable for fueling the opioid crisis. Previously, lower courts had not considered a prescriber’s intention. Until now, doctors on trial largely could not defend themselves by arguing they were acting in good faith when they wrote bad prescriptions. Now they can, attorneys say, although it is not necessarily a get-out-of-jail-free card.

“Essentially, the doctors were handcuffed,” said Zach Enlow, Onaro’s attorney. “Now they can take off their handcuffs. But it doesn’t mean they are going to win the fight.”

The Supreme Court’s decision in Ruan v. United States, issued June 27, was overshadowed by the nation-shaking controversy ignited three days earlier, when the court erased federal abortion rights. But the lesser-known ruling is now quietly percolating through federal courthouses, where it has emboldened defendants in overprescribing cases and may have a chilling effect on future prosecutions of doctors under the Controlled Substances Act.

In the three months since it was issued, the Ruan decision has been invoked in at least 15 ongoing prosecutions across 10 states, according to a KHN review of federal court records. Doctors cited the decision in post-conviction appeals, motions for acquittals, new trials, plea reversals, and a failed attempt to exclude the testimony of a prescribing expert, arguing their opinion was now irrelevant. Other defendants have successfully petitioned to delay their cases so the Ruan decision could be folded into their arguments at upcoming trials or sentencing hearings.

David Rivera, a former Obama-era U.S. attorney who once led overprescribing prosecutions in Middle Tennessee, said he believes doctors have a “great chance” of overturning convictions if they were prohibited from arguing a good faith defense or a jury was instructed to ignore one.

Rivera said defendants who ran true pill mills would still be convicted, even if a second trial was ultimately required. But the Supreme Court has extended a “lifeline” to a narrow group of defendants who “dispensed with their heart, not their mind,” he said.

“What the Supreme Court is trying to do is divide between a bad doctor and a person who might have a license to practice medicine but is not acting as a doctor at all and is a drug dealer,” Rivera said. “A doctor who is acting under a sincerely held belief that he is doing the right thing, even if he may be horrible at his job and should not be trusted with human lives ― that’s still not criminal.”

The Ruan decision resulted from the appeals of two doctors, Xiulu Ruan and Shakeel Kahn, who were separately convicted of running pill mills in Alabama and Wyoming, respectively, then sentenced to 21 and 25 years in prison. In both cases, prosecutors relied on a common tactic to show the prescriptions were a crime: Expert witnesses reviewed the defendants’ prescriptions and testified that they were far out of line with what a reasonable doctor would do.

But in writing the opinion of the Supreme Court, then-Justice Stephen Breyer insisted the burden of proof should not be so simple to overcome, remanding both convictions back to the lower courts for reconsideration.

Because doctors are allowed and expected to distribute drugs, Breyer wrote, prosecutors must not only prove they wrote prescriptions with no medical purpose but also that they did so “knowingly or intentionally.” Otherwise, the courts risk punishing “conduct that lies close to, but on the permissible side of, the criminal line,” Breyer wrote.

To defense attorneys, the unanimous ruling sent an unambiguous message.

“This is a hyperpolarized time in America, and particularly on the court,” Enlow said. “And yet this was a 9-0 ruling saying that the mens rea ― or the mental state of the doctor ― it matters.”

Maybe nowhere was the Ruan decision more pressing than in the case of Dr. David Jankowski, a Michigan physician who was on trial when the burden of proof shifted beneath his feet.

Jankowski was convicted of federal drug and fraud crimes and faces 20 years in prison. In an announcement of the verdict, the DOJ said the doctor and his clinic supplied people with “no need for the drugs,” which were “sold on the streets to feed the addictions of opioid addicts.”

Defense attorney Anjali Prasad said the Ruan ruling dropped before jury deliberations in the case but after prosecutors spent weeks presenting the argument that Jankowski’s behavior was not that of a reasonable prescriber — a legal standard that on its own is no longer enough to convict.

Prasad cited the Ruan decision in a motion for a new trial, which was denied, and said she intends to use the decision as a basis for a forthcoming appeal. The attorney also said she is in discussion with two other clients about appealing their convictions with Ruan.

“My hope is that criminal defense attorneys like myself are more emboldened to take their cases to trial and that their clients are 100% ready to fight the feds, which is no easy task,” Prasad said. “We just duke it out in the courtroom. We can prevail that way.”

Some defendants are trying. So far, a few have scored small wins. And at least one suffered a crushing defeat.

In Tennessee, nurse practitioner Jeffrey Young, accused of trading opioids for sex and notoriety for a reality show pilot, successfully delayed his trial from May to November to account for the Ruan decision, arguing it would “drastically alter the landscape of the Government’s war on prescribers.”

Also in Tennessee, Samson Orusa, a doctor and pastor who last year was convicted of handing out opioid prescriptions without examining patients, filed a motion for a new trial based on the Ruan decision, then persuaded a reluctant judge to delay his sentencing for six months to consider it.

And in Ohio, Dr. Martin Escobar cited the Ruan ruling in an eleventh-hour effort to avoid prison.

Escobar in January pleaded guilty to 54 counts of distributing a controlled substance, including prescriptions that caused the deaths of two patients. After the Ruan decision, Escobar tried to withdraw his plea, saying he’d have gone to trial if he’d known prosecutors had to prove his intent.

One week later, on the day Escobar was set to be sentenced, a federal judge denied the motion.

His guilty plea remained.

Escobar got 25 years.

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.

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New Abortion Laws Jeopardize Cancer Treatment for Pregnant Patients

September 16, 2022

As abortion bans go into effect across a contiguous swath of the South, cancer physicians are wrestling with how new state laws will influence their discussions with pregnant patients about what treatment options they can offer.

Cancer coincides with roughly 1 in 1,000 pregnancies, most frequently breast cancer, melanoma, cervical cancer, lymphomas, and leukemias. But medications and other treatments can be toxic to the developing fetus or cause birth defects. In some cases, hormones that are supercharged during pregnancy fuel the cancer’s growth, putting the patient at greater risk.

Although new abortion restrictions often allow exceptions based on “medical emergency” or a “life-threatening physical condition,” cancer physicians describe the legal terms as unclear. They fear misinterpreting the laws and being left in the lurch.

For instance, brain cancer patients have traditionally been offered the option of abortion if a pregnancy might limit or delay surgery, radiation, or other treatment, said Dr. Edjah Nduom, a brain cancer surgeon at Emory University’s Winship Cancer Institute in Atlanta.

“Is that a medical emergency that necessitates the abortion? I don’t know,” Nduom asked, trying to parse the medical emergency exception in the new Georgia law. “Then you end up in a situation where you have an overzealous prosecutor who is saying, ‘Hey, this patient had a medical abortion; why did you need to do that?’” he said.

Pregnant patients with cancer should be treated similarly to non-pregnant patients when feasible, though sometimes adjustments are made in the timing of surgery and other care, according to a research overview, published in 2020 in Current Oncology Reports.

With breast cancer patients, surgery could be performed early on as part of the treatment, pushing chemotherapy to later in the pregnancy, according to the research. Cancer experts typically recommend avoiding radiation therapy throughout pregnancy, and most chemotherapy drugs during the first trimester.

But with some cancers, such as acute leukemia, the recommended drugs have known toxic risks to the fetus, and time is not on the patient’s side, said Dr. Gwen Nichols, chief medical officer of the Leukemia & Lymphoma Society.

“You need treatment urgently,” she said. “You can’t wait three months or six months to complete a pregnancy.”

Another life-threatening scenario involves a patient early in her pregnancy who has been diagnosed with breast cancer that’s spreading, and tests show that the cancer’s growth is spurred by the hormone estrogen, said Dr. Debra Patt, an oncologist in Austin, Texas, who estimated she has cared for more than two dozen pregnant patients with breast cancer.

“Pregnancy is a state where you have increased levels of estrogen. It’s actually actively at every moment causing the cancer to grow more. So I would consider that an emergency,” said Patt, who is also executive vice president over policy and strategic initiatives at Texas Oncology, a statewide practice with more than 500 physicians.

When cancer strikes individuals of child-bearing age, one challenge is that malignancies tend to be more aggressive, said Dr. Miriam Atkins, an oncologist in Augusta, Georgia. Another is that it’s unknown whether some of the newer cancer drugs will affect the fetus, she said.

While hospital ethics committees might be consulted about a particular treatment dilemma, it’s the facility’s legal interpretation of a state’s abortion law that will likely prevail, said Micah Hester, an expert on ethics committees who chairs the department of medical humanities and bioethics at the University of Arkansas for Medical Sciences College of Medicine in Little Rock.

“Let’s be honest,” he said. “The legal landscape sets pretty strong parameters in many states on what you can and cannot do.”

It’s difficult to fully assess how physicians plan to handle such dilemmas and discussions in states with near-total abortion bans. Several large medical centers contacted for this article said their physicians were not interested or not available to speak on the subject.

Other physicians, including Nduom and Atkins, said the new laws won’t alter their discussions with patients about the best treatment approach, the potential impact of pregnancy, or whether abortion is an option.

“I’m going to always be honest with patients,” Atkins said. “Oncology drugs are dangerous. There are some drugs that you can give to [pregnant] cancer patients; there are many that you cannot.”

The bottom line, maintain some, is that termination remains a critical and legal part of care when cancer threatens someone’s life.

Patients “are counseled on the best treatment options for them, and the potential impacts on their pregnancies and future fertility,” Dr. Joseph Biggio Jr., chair of maternal-fetal medicine at Ochsner Health System in New Orleans, wrote in an email. “Under state laws, pregnancy termination to save the life of the mother is legal.”

Similarly, Patt said that physicians in Texas can counsel pregnant patients with cancer about the procedure if, for instance, treatments carry documented risks of birth defects. Thus, physicians can’t recommend them, and abortion can be offered, she said.

“I don’t think it’s controversial in any way,” Patt said. “Cancer left unabated can pose serious risks to life.”

Patt has been educating physicians at Texas Oncology on the new state law, as well as sharing a JAMA Internal Medicine editorial that provides details about abortion care resources. “I feel pretty strongly about this, that knowledge is power,” she said.

Still, the Texas law’s vague terminology complicates physicians’ ability to determine what’s legally permissible care, said Joanna Grossman, a professor at SMU Dedman School of Law. She said nothing in the statute tells a doctor “how much risk there needs to be before we label this legally ‘life-threatening.’”

And if a woman can’t obtain an abortion through legal means, she has “grim options,” according to Hester, the medical ethicist. She’ll have to sort through questions like: “Is it best for her to get the cancer treatment on the time scale recommended by medicine,” he said, “or to delay that cancer treatment in order to maximize the health benefits to the fetus?”

Getting an abortion outside Georgia might not be possible for patients with limited cash or no backup child care or who share one car with an extended family, Atkins said. “I have many patients who can barely travel to get their chemotherapy.”

Dr. Charles Brown, a maternal-fetal medicine physician in Austin who retired this year, said he can speak more freely than practicing colleagues. The scenarios and related unanswered questions are almost too numerous to count, said Brown, who has cared for pregnant women with cancer.

Take as another example, he said, a potential situation in a state that incorporates “fetal personhood” in its law, such as Georgia. What if a patient with cancer can’t get an abortion, Brown asked, and the treatment has known toxic effects?

“What if she says, ‘Well, I don’t want to delay my treatment — give me the medicine anyway,’” Brown said. “And we know that medicine can harm the fetus. Am I now liable for harm to the fetus because it’s a person?”

Whenever possible, physicians have always strived to treat the patient’s cancer and preserve the pregnancy, Brown said. When those goals conflict, he said, “these are gut-wrenching trade-offs that these pregnant women have to make.” If termination is off the table, “you’ve removed one of the options to manage her disease.”

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.

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Montana Health Department Seeks to Ax Board That Hears Public Assistance Appeals

September 15, 2022

Montana health officials are asking state lawmakers to eliminate a board that hears appeals from people who believe they were wrongly denied public assistance benefits.

Since 2016, the Board of Public Assistance has heard fewer than 20 cases a year, and very few of those are overturned, but preparing for those appeals and board meetings takes time from state Department of Public Health and Human Services’ staff members and attorneys, according to the department’s proposal.

Getting rid of the appellate board also would help public assistance applicants who are rejected appeal their cases directly to district court, health department Director Charlie Brereton recently told lawmakers. Currently, rejected applicants can take their cases to court only after the board hears their appeals, though very few do so, according to a board member.

“I want to be very clear, with this proposal we are not seeking to eliminate an appeals pathway; rather, we’re streamlining the process and eliminating what we see as an unnecessary and underutilized step,” Brereton said.

The plan to get rid of the Board of Public Assistance is one of 14 bills that the state Department of Public Health and Human Services has asked legislators to draft for the session that begins in January. The proposal comes from a review of the state agencies under Republican Gov. Greg Gianforte’s Red Tape Relief Task Force, which seeks to improve efficiency and eliminate outdated or unnecessary regulations.

The three-person Board of Public Assistance presides over appeals of denials made by the health department’s Office of Administrative Hearings in nine programs: Temporary Assistance for Needy Families, which provides cash to low-income households with children; the Supplemental Nutrition Assistance Program, formerly known as food stamps; Medicaid, the federal-state program that pays for health care for low-income people; developmental disabilities services; the Low Income Energy Assistance Program; the Weatherization Assistance Program; refugee assistance; mental health services; and Healthy Montana Kids, which is the state’s Children’s Health Insurance Program.

The proposal to eliminate the board came as a surprise to at least one of its members, who learned about it from KHN. “I haven’t heard anything from the department,” said Sharon Bonogofsky-Parker, a Billings resident appointed by Gianforte in March 2021.

The board meets every other month, Bonogofsky-Parker said. She recalled one “really good case” during her tenure in which the board restored benefits to a disabled military veteran who had lost them because of documents forged by someone else.

But Bonogofsky-Parker estimated that the board sides with the department’s decisions about 90% of the time because most cases involve applicants who didn’t understand or follow the programs’ rules, whose income level changed, or who have some other clear disqualifying factor.

The board provides a service by hearing appeals that would otherwise clog the court system, she said. “By and large, these cases are pretty frivolous,” Bonogofsky-Parker said. “The board is useful in keeping a lot of these cases out of court.”

The view contrasts with Brereton’s, who described the ability of applicants to file court grievances expediently as a benefit of the proposed change.

District courts charge a $120 fee to start a proceeding of this type, according to the Lewis and Clark County District Court clerk’s office. That would create a potential obstacle for people trying to prove they qualify for public assistance. By contrast, Board of Public Assistance appeals are free.

State health department spokesperson Jon Ebelt said people with low incomes can fill out a form to request a court fee waiver. “This issue was considered during conceptual stages of the bill,” he said.

Bonogofsky-Parker said she doesn’t plan to oppose the department’s proposal, despite her view that the board acts as a bulwark against frivolous court cases. The other two board members, Gianforte appointee Danielle Shyne and Carolyn Pease-Lopez, a holdover from former Democratic Gov. Steve Bullock, did not respond to phone or email messages.

The Children, Families, Health, and Human Services Interim Committee will draft the bill for consideration by the full legislature in the 2023 session.

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.

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Expertos cuestionan el rol de la morera blanca en la muerte de la esposa del congresista

September 14, 2022

SACRAMENTO, California. — Científicos, médicos y patólogos están cuestionando la conclusión del forense del condado de Sacramento de que la muerte de Lori McClintock estuvo relacionada con la morera blanca (white Mulberry), una planta que se ha utilizado como remedio herbal durante siglos, y que el botánico consultor del forense llamó “no tóxica” en una carta a su oficina.

McClintock, la esposa del representante estadounidense Tom McClintock (republicano de California), murió repentinamente en diciembre por deshidratación debido a una gastroenteritis, una inflamación del estómago y los intestinos, que fue causada por “efectos adversos de la ingestión de hojas de morera blanca”, según un informe del forense del condado de Sacramento. El forense dictaminó que la muerte fue un accidente.

Pero la forense del condado de Sacramento Kimberly Gin, no explicó —ni proporcionó registros que lo expliquen—, por qué determinó que la hoja de morera blanca condujo a la deshidratación que mató a McClintock a los 61 años, generando escepticismo entre una variedad de expertos. 

Según el informe de la autopsia, se encontró una hoja de morera blanca “parcialmente intacta” en el estómago de Lori McClintock. Pero no hay otra referencia a su uso de estas hojas, suplementos, extractos, polvos, o cualquier otro método para ingerir la planta, en los documentos que la oficina forense ha publicado en relación con el caso.

“Haría falta literalmente enormes cestas de hojas de morera blanca para causar algún tipo de efecto adverso. E incluso entonces, no ves nada letal”, dijo Bill Gurley, científico principal del Centro Nacional de Investigación de Productos Naturales de la Universidad de Mississippi, que colabora con oficiales académicos, gubernamentales y de la industria para investigar y desarrollar productos naturales.

Gurley, experto en interacciones entre hierbas y medicamentos, calificó la hoja de morera blanca, que se utiliza para una variedad de dolencias, como diabetes, presión arterial alta y obesidad, “probablemente como una de las hojas más seguras del mundo” y dijo que “su historial de seguridad es insuperable”.

“Solo me estoy preguntando sobre cómo diablos podrían llegar a la conclusión de que esta señora falleció al ingerir, al menos hasta donde sabemos, solo una hoja de morera”, dijo.

La doctora Mary Hardy, fundadora de la clínica de medicina integral en el Centro Médico Cedars-Sinai en Los Ángeles, quien investigó la seguridad de algunas medicinas y terapias alternativas para el Centro de Investigación de Suplementos Dietéticos en Botánica de la UCLA, ahora cerrado, dijo que la conclusión del forense es “no convincente”.

“La causa aproximada de la muerte no está respaldada” por los registros disponibles, dijo Hardy.

Gin, contactada a través de la vocera del condado de Sacramento, Kim Nava, rechazó repetidamente las solicitudes de entrevista de KHN y se ha negado a proporcionar información que explique cómo su oficina concluyó que un pedazo de hoja de morera blanca contribuyó a la muerte de McClintock.

Las hojas y el fruto del árbol de morera blanca, originario de China, se han utilizado durante siglos en la medicina tradicional. Estudios académicos realizados en la última década han encontrado que el extracto de sus hojas puede reducir los niveles de azúcar en la sangre y ayudar a perder peso.

Las personas lo toman en forma de cápsulas o píldoras, como extracto o en polvo. También pueden comer las hojas tiernas crudas o prepararlas como un té de hierbas.

No está claro cómo McClintock ingirió la hoja de morera blanca —ya sea que la comió cruda o la bebió en forma de té—, y de dónde la obtuvo.

Tom McClintock, un republicano que representa a un distrito que abarca varios condados en el centro y el norte de California, encontró a su esposa inconciente en su casa de Elk Grove, el 15 de diciembre de 2021, según el informe del forense. McClintock no ha respondido a las repetidas solicitudes de comentarios.

En el funeral de su esposa en enero, Tom McClintock les dijo a los dolientes que estaba bien cuando habló con ella el día antes de su muerte. Pero según el informe del forense, el día antes de su muerte “tuvo quejas de malestar estomacal”.

McClintock también les dijo a los dolientes que “estaba haciendo una dieta cuidadosa” y que “acababa de empezar en un gimnasio”.

KHN obtuvo el informe del forense, fechado el 10 de marzo, además del informe de la autopsia y el certificado de defunción, en julio, e informó los hallazgos en agosto.

La oficina del forense examinó el cuerpo de McClintock para detectar gripe, otros virus respiratorios y covid-19. Ninguno fue detectado. También encargó pruebas de laboratorio independientes que mostraron que el cuerpo de McClintock tenía niveles elevados de nitrógeno ureico, sodio y creatinina, todos signos de deshidratación, según cinco patólogos entrevistados por KHN. Solo uno de ellos dijo que era plausible que la hoja de morera blanca pudiera haber contribuido a la deshidratación.

Todos los patólogos dijeron que los documentos del forense dados a conocer públicamente no brindaban una imagen completa de cómo murió McClintock, y que no incluían detalles clave como qué encontró la oficina del forense en su casa, y si McClintock podría haber estado tomando alguna medicación o suplementos.

“El indicio de que puede haber algo de deshidratación es cierto. Realmente no tienen mucho más”, dijo el doctor Gregory G. Davis, director de la división forense del Departamento de Patología de la Universidad de Alabama-Birmingham y jefe médico forense del condado de Jefferson, en Alabama.

“No sé si la hoja de morera necesariamente jugó algún papel en la muerte”, dijo Davis, y agregó, al igual que otros expertos, que no se considera tóxica.

“Mirando los resultados de su autopsia, pareciera ser que estaba razonablemente sana, y realmente no hubieras esperado que muriera en ese momento. Eso ya lo convirtió en un caso difícil porque no es obvio”.

El doctor James Gill, presidente del Comité de Patología Forense del Colegio de Patólogos Estadounidenses y jefe médico forense de Connecticut, agregó que alguien puede tardar días en morir de deshidratación. Una sola hoja, que no se había digerido por completo, un proceso que generalmente toma solo un par de horas, no “habría contribuido a la muerte”, dijo.

“Se tarda al menos una semana más o menos para que alguien muera por deshidratación por no beber”, dijo Gill. Según los registros disponibles, “hay algunas cosas que realmente no encajan”.

Gill dijo que habría dictaminado que la muerte de McClintock fue una muerte natural por causas desconocidas, lo que ocurre en aproximadamente el 5% de las muertes que investiga.

No se han informado muertes por la planta de morera blanca a los funcionarios de control de intoxicaciones en los últimos 10 años, según la Asociación Estadounidense de Centros de Control de Intoxicaciones.

Desde 2002, se han informado a la FDA dos casos de personas que pueden haber enfermado por los suplementos de morera, según su base de datos que rastrea “eventos adversos”. Lindsay Haake, vocera de la FDA, se negó a decir si la agencia está investigando este caso porque no revela sus investigaciones.

Después de que KHN revelara la historia sobre la causa de la muerte de McClintock, la oficina del forense publicó un par de documentos adicionales, incluida una carta del 29 de diciembre de 2021 de Alison Colwell, curadora del Centro para la Diversidad de Plantas de la Universidad de California-Davis. El forense le había pedido a Colwell que identificara el fragmento de hoja de 1 1/8 pulgadas por 1 7/8 pulgadas encontrado en el estómago de McClintock durante la autopsia.

Colwell lo identificó como morera blanca y concluyó, en base a su flexibilidad y “algo de color verde”, que “probablemente se ingirió cuando estaba fresca”, dijo su carta.

Aunque los árboles de morera blanca son comunes en la región de Sacramento, señaló que, en diciembre, sus hojas son “duras, amarillentas y en su mayoría se han caído de los árboles”.

Colwell también declaró simplemente: “La morera blanca no es tóxica”.

“Comparé el espécimen con especies letalmente tóxicas que se sabe que están plantadas o son nativas en el área de Sacramento y no encontré coincidencias”, decía su carta. Colwell rechazó una solicitud de entrevista.

La industria de productos a base de hierbas, la industria de suplementos dietéticos y sus aliados se han irritado ante la posibilidad de que McClintock haya muerto después de ingerir suplementos que contenían hojas de morera blanca, y mucho menos una hoja de morera blanca en sí.

“Se ha usado como alimento, como medicina”, dijo Rick Kingston, profesor clínico de la Facultad de Farmacia de la Universidad de Minnesota. También es cofundador de SafetyCall International, una empresa que ayuda a la industria de los suplementos y a otros clientes a registrar y rastrear eventos adversos relacionados con sus productos.

La Asociación Estadounidense de Productos Herbales, que representa a los cultivadores y fabricantes de hierbas, encargó a Kingston que revisara el caso de McClintock. “Veo muchos informes de autopsias”, dijo Kingston. “Tengo que admitir que éste fue bastante escaso en términos de datos de apoyo”.

Varios especialistas en plantas también cuestionan si la hoja encontrada en el estómago de McClintock era morera blanca.

Élan Sudberg, director ejecutivo de Alkemist Labs, con sede en California, que realiza pruebas de plantas botánicas para la industria de suplementos y otros clientes, dijo que la carta de Colwell carece de detalles de su evaluación de la hoja, lo que ayudaría a otros que lean el informe a identificarla definitivamente como morera blanca. Eso, o la hoja no era morera blanca, dijo.

Agregó que el forense debería publicar más información, reabrir el caso y realizar pruebas más rigurosas.

“Me encantaría ver un nuevo examen y entender por qué llegaron a la conclusión de que murió por una hoja básicamente inerte”, dijo Sudberg.

Esta historia fue producida por KHN, que publica California Healthline, un servicio editorialmente independiente de la 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.

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Impending Hospital Closure Rattles Atlanta Health Care Landscape and Political Races

September 14, 2022

ATLANTA — Like many neighborhoods in cities across the country, Atlanta’s Old Fourth Ward is changing.

Condo buildings and modern minimalist homes punctuate city blocks of low-income housing. Many longtime residents of the historic neighborhood where Martin Luther King Jr. was born have been priced out and pushed to other parts of town.

Atlanta Medical Center, a 460-bed Level 1 trauma center, will be the next fixture to change.

Despite banners proclaiming the hospital’s commitment to the area — “120 Years Caring For Atlanta,” one reads — its nonprofit owner, Wellstar Health System, recently announced plans to close the hospital’s doors on Nov. 1.

Georgia has seen several rural hospitals shutter in the past decade, but this year Atlanta has joined other urban centers with facility closures, including a previous downsizing at a facility in the nearby city of East Point.

The Wellstar announcement has stoked the political debate over Medicaid expansion ahead of the Nov. 8 midterm elections. Like 11 other states, Georgia has not expanded eligibility rules for its Medicaid program under the Affordable Care Act, and hospital officials across the state say inaction has hurt their bottom lines because they still treat high numbers of uninsured patients, many of whom cannot pay for treatment.

The Wellstar announcement shocked city officials, including the mayor, Andre Dickens, as well as other members of the community.

On a recent weekday morning, Teresa Smith, 60, who lives in the neighborhood, said she frequently receives care there for a chronic digestive issue. “This hospital will be missed by the whole community,” she said.

Liliana Bakhtiari, the Atlanta City Council member whose district includes the hospital, was sharp in her assessment. “There will be loss of life and critical injuries that will not be taken care of, and I wish that mattered more to Wellstar,” she said.

Wellstar declined KHN’s request for an interview about the closure.

Nancy Kane, an adjunct professor at Harvard’s T.H. Chan School of Public Health, sees connections between the Atlanta situation and hospital closures in other major cities.

Many were acquired by large health care companies as part of package deals, and served largely low-income, minority populations.

“If you acquire a hospital, you should have an obligation to fix it up,” said Kane. “Wellstar has the funds to invest in this hospital. It’s a choice.”

Some community members wonder whether the hospital closure will lead to a pricey real estate development on the roughly 20 acres Wellstar owns in the neighborhood.

Randy Pimsler, an architect whose firm has designed projects in the area, said “it could become a blank slate, either for redevelopment or for new development.”

Politicians have been quick to turn the closing into a campaign issue. And at the center of the debate is Gov. Brian Kemp’s health care policy.

The Kemp team is working to put together a long-term plan for strengthening health care in the area after the closure, said Andrew Isenhour, a Kemp spokesperson. Kemp, a Republican who’s running for a second term in November, is unlikely to try to keep the facility open.

But officials at the nonprofit Grady Health System said this week that they have met with Kemp’s office, Dickens, and officials from Fulton and DeKalb counties about a financial infusion of state funding that would support capital needs at Grady Memorial Hospital, a Level 1 trauma center about a mile from Atlanta Medical Center.

Grady is expecting as many as 2,500 extra emergency room visits a month after Atlanta Medical Center shuts its doors.

“We can absorb all the trauma,” said John Haupert, CEO of Grady Health System. Still, the added ER crunch will be a challenge with more patients arriving, said Ryan Loke, chief health policy officer for Grady.

State funding would accelerate Grady’s existing plans to convert offices into inpatient care spaces, which would add more than 180 adult beds as soon as a year from now. The hospital also is adding 40 to 45 beds over the next six weeks, and is planning to install a 24-bed field hospital to help handle the patient flow from the closed hospital.

The closing puts Medicaid expansion “front and center” in the political conversation, Haupert said. Kemp has proposed a limited plan that would offer access to the state-federal insurance program to people who can fulfill a work requirement or similar obligation.

His challenger, Democrat Stacey Abrams, has long made expanding Medicaid a top campaign issue.

“This is no longer a surprise,” Abrams said. “It is expected to happen because the Kemp administration refuses to take action.”

U.S. Sen. Raphael Warnock (D-Ga.), pastor of Ebenezer Baptist Church, which is less than a mile from the hospital, has also decried the closure and cited the strain on health care facilities caused by Georgia’s refusal to expand Medicaid. Wellstar officials have said that Medicaid expansion alone wouldn’t have kept the Atlanta facility open.

Earlier this year, Wellstar stopped providing emergency room and inpatient services at its hospital in East Point, just southwest of Atlanta. At the time, it said those patients could be seen at Atlanta Medical Center, about 8 miles away. Haupert estimated it would cost hundreds of millions of dollars to modernize the soon-to-close Atlanta hospital, which is what made a rescue difficult.

The closures just a few months apart could help Abrams’ arguments for Medicaid expansion resonate with voters, said Andra Gillespie, an associate professor of political science at Emory University. “An issue that was probably tailored more towards rural Georgia now all of a sudden becomes an Atlanta-area issue,” she said.

Gillespie cautioned that other issues, such as inflation, crime, and abortion, are likely to be more motivating to Georgia voters.

Wellstar, based in suburban Marietta, acquired AMC and the East Point hospital from Tenet Healthcare during an acquisition push in 2016, part of a $575 million deal that included three other hospitals in the metro region.

Todd Greene, formerly a member of Wellstar’s community board for AMC, said the system put more resources into its suburban facilities.

“Wellstar’s suburban hospital-oriented management approach unfortunately has resulted in large portions of Atlanta’s black and brown communities not having access to proximate and critical health care services,” he said in a written statement.

In Wellstar’s announcement of the closure, it said it had invested more than $350 million in capital improvements at the facility since 2016 and sustained “$107 million in losses in just the last 12 months, amid decreasing revenue and increasing costs for staff and supplies due to soaring inflation.”

The decision to close the hospital didn’t come as a surprise to some staff members, said Dr. Sulieman Wazeerud-Din, an emergency medicine physician at the hospital, who said doctors “were aware of financial losses.”

But the abrupt announcement caused a profound sense of grief among doctors, nurses, and other nonmedical employees, he said.

In the days since the closure announcement, Grady has offered jobs to a range of Atlanta Medical Center employees, from physicians and nurses to housekeeping and security staffers.

David Patton has lived in Atlanta’s Old Fourth Ward for 30 years and said Atlanta Medical Center has been a big part of his life.

His grandfather died in a nursing home on the campus, he has gotten care at the ER, and his son took swimming lessons at the hospital’s athletic club, all while he has seen the neighborhood transform from a “forgotten” part of the city to one that’s become a lightning rod for new development.

“It boggles my mind that an institution like that would just shut down virtually overnight,” he 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.

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