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Facing Recall, Newsom Draws Support from Health Care Allies

SACRAMENTO, Calif. — Californians upset with Gov. Gavin Newsom’s pandemic rules — which shuttered businesses, kept schoolkids at home and mandated masks — helped fuel the September recall election that could spell the end of his political career.

But among the allies rushing to Newsom’s defense are doctors, nurses, dentists and other health care interests who credit those pandemic measures for protecting them as front-line workers and saving the lives of countless Californians.

Their unions and trade associations have written checks totaling more than $4.8 million as of 10 a.m. Friday to keep the first-term Democrat in office, according to a KHN analysis of campaign finance filings with the California secretary of state’s office.

Even before covid-19, Newsom had been a steadfast health care advocate and ally, adopting policies that expanded health benefits and coverage to hundreds of thousands of Californians — and lined the pockets of the industry in the process.

“He’s done so much so broadly within the health care sector in California to the benefit of patients and providers of all sorts,” said Andrew Kelly, an assistant professor in the Department of Health Sciences at California State University-East Bay. “That is good for the health care business, as well as our community — improving access to care and outcomes.”

Californians will decide Sept. 14 whether to recall Newsom on a ballot that also asks them to pick his replacement from a list of 46 candidates. If more than 50% of voters choose “yes” to recall Newsom, the candidate who wins the most votes will replace him.

The recall election offers Republicans in blue California — where Democrats hold all statewide offices and control the legislature — their best shot at winning the governor’s office. The GOP candidates with the highest name recognition are businessman John Cox, conservative talk show host Larry Elder, former San Diego Mayor Kevin Faulconer, reality TV star and former Olympian Caitlyn Jenner, suburban Sacramento state Assembly member Kevin Kiley and former congressman Doug Ose.

A poll released Tuesday by the University of California-Berkeley Institute of Governmental Studies found that 47% of likely voters said they favor recalling Newsom, compared with 50% who said they oppose recalling the governor.

Newsom’s supporters have given more than $40 million to fight the recall, compared with nearly $12 million by recall backers, which includes $5 million from Cox for his own campaign.

The health care contributions to fight the recall make up a fraction of the total, but they’re far-reaching: Health care worker unions, dentists, physicians, pharmacists, insurance companies, at least one hospital and others have made big contributions to independent campaign committees created by Newsom’s supporters that can accept unlimited donations.

The health care group that has given the most — $2.25 million — is the union representing California’s nursing home workers and in-home caregivers, Service Employees International Union 2015. Other contributions included $150,000 from the Union of American Physicians and Dentists (whose members include doctors and dentists employed by the state and some counties) and $500,000 from the California Dental Association. These groups either declined telephone interviews or did not respond to requests for comment.

In an emailed statement, SEIU 2015 did not address its sizable contributions but said it intended to mobilize “our mostly black, brown and immigrant caregivers who have been on the front lines of this pandemic to make their voices heard as we go door-to-door, over the phone and online encouraging a vote against the recall.”

An emailed statement from the California Dental Association said its political action committee “puts a great deal of consideration into supporting candidates who are interested in solving the challenges experienced by the dental profession and their patients.”

Republican candidates haven’t received any big donations — defined by the California Fair Political Practices Commission as $1,000 or more — from organized health care groups, which gubernatorial hopeful Kiley said shows just how cozy the governor is with the industry.

“You have vested interests that do whatever it takes to get the governor to do what they want,” said Kiley, one of two Assembly members who sued Newsom last year for using his emergency powers during a pandemic. “He’s taking money from all of them.”

The diverse field of health care interests defending Newsom aren’t always on the same side politically. In fact, they’re often at odds.

But if you’re in health care or public health, the prospect of Newsom being booted from office is worrisome, especially if you want the state to continue combating the pandemic, said Mark Peterson, a professor of public policy and political science at UCLA.

“I don’t think anyone who would be replacing the governor in the recall would be anywhere near as aggressive and might actually put in reverse the public health actions that have been taken,” Peterson said.

Sal Rosselli, president of the National Union of Healthcare Workers, which represents nurses, drug rehab counselors, pharmacists and others, said his union’s 15,000 members are grateful for Newsom’s leadership in the pandemic — citing his first-in-the-nation statewide stay-at-home order, his directive to hospitals last winter to test workers for covid, and other workplace orders that protected essential workers.

“These are all examples of real leadership,” Rosselli said.

In January, the union created a ballot committee to urge Californians not to sign the recall petition — chipping in just over $100,000 of its own money and collecting $10,000 apiece from state Senate leader Toni Atkins and Assembly Speaker Anthony Rendon, among others, to help pay for political ads praising Newsom’s leadership during the pandemic.

Nathan Click, a Newsom campaign spokesperson, did not address the money Newsom has received from the health care industry, but said Californians have a clear choice for governor.

“On one side, you have a governor who has expanded health care for Californians and fought to lower health care costs for families,” Click said via email. “On the other side are a bunch of Trump lackeys who want to repeal Obamacare and take away health care from those who need it most.”

When Newsom campaigned for governor in 2018, he called for a government-backed, single-payer health system at a time when the Trump administration and many Republican lawmakers were trying to dismantle the Affordable Care Act.

He hasn’t delivered on his single-payer pledge, citing insurmountable federal hurdles. But he has signed legislation and advocated for policies that insured more Californians or boosted their benefits, policies that also enrich insurers and providers by bringing them more patients.

For instance, low-income undocumented immigrants ages 19 to 25 became eligible for full benefits under Medi-Cal, California’s Medicaid program for poor residents, last year. Next year, people 50 and older will become eligible regardless of their immigration status.

For the more than 13 million Californians already in the program, Newsom and legislators agreed last year to restore dental, vision and other optional health care benefits that had been cut during the Great Recession. And they boosted the rates the program pays physicians and dentists.

Qualified Californians can also tap into state subsidies to reduce the cost of health insurance premiums sold through Covered California, a benefit approved by Newsom in 2019.

The recall has handed the unions an opportunity to pressure Newsom to act on his single-payer pledge, arguing that the pandemic has laid bare deadly disparities in health care. For example, Latinos in California not only were exposed to covid at much higher rates but also died at 1.5 times the rate of white Californians, according to researchers at Stanford University.

“We trust that Gavin Newsom is the person to lead” on single-payer, said Rosselli, who has known Newsom since he got into politics nearly 20 years ago. “To make California the first state in the nation as an example for the rest of the country on ending these inequities in health care.”

Methodology

Gov. Gavin Newsom is facing a recall election Sept. 14. To find out which health care interests are contributing for and against the recall effort, KHN analyzed campaign finance reports filed with the California secretary of state’s office through 10 a.m. Friday, July 30. Each candidate and campaign committee participating in the recall is required to report how much money they’ve raised and spent. Any donation of $1,000 or more must be reported within 24 hours.

We downloaded and analyzed campaign records from two committees created to support the recall, committees run by the leading Republican candidates, and five committees created to oppose the recall.

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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Diabetes Drug’s New Weight Loss Formula Fuels Cost-Benefit Debate

The long list of side effects that follow ads for the newer expensive drugs to treat Type 2 diabetes sometimes include an unusual warning: They might cause weight loss. That side effect is one that many people — especially those with Type 2 diabetes, which is associated with obesity — may desperately want.

So it’s no surprise that some of the same drugs are being reformulated and renamed by manufacturers as a new obesity treatment. No longer limited to the crowded field of treatments for Type 2 diabetes, which affects about 10% of Americans, they join the far smaller number of drugs for obesity, which affects 42% of Americans and is ready to be mined for profit.

One that recently hit the market — winning Food and Drug Administration approval in June — is Novo Nordisk’s Wegovy, a higher-dose version of the company’s injectable diabetes drug, Ozempic.

Ozempic’s peppy ads suggest that people who use it might lose weight, but also include a disclaimer: that it “is not a weight loss drug.” Now — with a new name — it is. And clinical trials showed using it leads to significant weight loss for many patients.

“People who go on this medication lose more weight than with any drug we’ve seen, ever,” said Dr. Fatima Cody Stanford, an obesity medicine specialist at Massachusetts General Hospital and Harvard Medical School who was not involved with any of the clinical trials.

But that leaves employers and insurers in the uncomfortable position of deciding if it’s worth it.

Wegovy’s monthly wholesale price tag — set at $1,349 — is about 58% more than Ozempic’s, although, the company points out, the drug’s injector pens contain more than twice as much of the active ingredient. Studies so far show that patients may need to take it indefinitely to maintain weight loss, translating to a tab that could top $323,000 over 20 years at the current price. Weight loss treatments are not universally covered by insurance policies.

The arrival of this new class of weight loss drugs — one from Lilly may soon follow — has created a thicket of issues for those who will pay for them. The decision is complicated by many unknowables concerning their long-term use and whether competition might eventually lower the price.

“The metric we try to use is value,” said James Gelfand, senior vice president for health policy at the ERISA Industry Committee, or ERIC, which represents large, self-insured employers. “If we pay for this drug, how much is this going to cost and how much value will it provide to the beneficiaries?”

Weight loss treatments have had a lackluster past in this regard, with only modest results. Many employers and insurers likely remember Fen-Phen, a combination of fenfluramine and dexfenfluramine that was pulled from the market in the late 1990s for causing heart valve problems.

New drugs like Wegovy, more effective but also pricier than previous weight loss treatments, will add more fuel to that debate.

Past treatments were shown to prompt weight loss in the range of 5% to 10% of body weight. But many had relatively serious or unpleasant side effects.

Wegovy, however, helped patients lose an average of 15% of their body weight over 68 weeks in the main clinical trial that led to its approval. A comparison group that got a placebo injection lost an average of 2.5% over the same period. On the high end, nearly a third of patients in the treatment group lost 20% or more. Both groups had counseling on diet and exercise.

Side effects, generally considered mild, included nausea, diarrhea, vomiting and constipation. A few patients developed pancreatitis, a serious inflammation of the pancreas. Like the diabetes medication, the drug carries a warning about a potential risk of a type of thyroid cancer.

Weight loss in those taking Wegovy puts it close to the 20% to 25% losses seen with bariatric surgery, said Stanford at Mass General, and well above the 3% to 4% seen with diet and other lifestyle changes alone.

Participants also saw reductions in their waistlines and improvements in their blood pressure and blood sugar levels, which may mean they won’t develop diabetes, said Dr. Sean Wharton, an internal medicine specialist and adjunct professor at York University in Toronto who was among the co-authors of the report outlining the results of the first clinical trial on Wegovy.

Since weight loss is known to reduce the risk of heart attack, high blood pressure and diabetes, might the new drug type be worth it?

Covering such treatment would be a sea change for Medicare, which specifically bars coverage for obesity medications or drugs for “anorexia, weight loss or weight gain,” although it does pay for bariatric surgery. Pharmaceutical companies, patient advocates and some medical professionals are backing proposed federal legislation to allow coverage. But the legislation, the Treat and Reduce Obesity Act, has not made progress despite being reintroduced every year since 2012, and sponsors are now asking federal officials instead to rewrite existing rules.

Private insurers will have to consider a cost-benefit analysis of adding Wegovy to their list of covered treatments, either broadly or with limits. Obesity was first recognized as a disease by the American Medical Association, easing the path for insurance coverage, in 2013.

“Employers are going to have a bit of a challenge” deciding whether to add the benefit to insurance offerings, said Steve Pearson, founder and president of the Institute for Clinical and Economic Review, which provides cost-benefit analyses of medical treatments but has not yet looked at Wegovy.

The trade-offs are embodied in patients like Phylander Pannell, a 49-year-old Largo, Maryland, woman who said she lost 65 pounds in a clinical trial of Wegovy. That study gave the drug to all participants for the first 20 weeks, then randomly assigned patients to get either the drug or a placebo for the next 48 weeks to determine what happens when the medication is stopped. Only after the trial ended did she find out she was in the treatment group the entire time.

Her weight fell slowly at first, then ramped up, eventually bringing her 190-pound frame down to about 125. Pains in her joints eased; she felt better all around.

“I definitely feel the drug was it for me,” said Pannell, who also followed the trial’s guidance on diet and exercise.

The study found that both groups lost weight in the initial 20 weeks, but those who continued to get the drug lost an additional average of 7.9% of their body weight. Those who got a placebo gained back nearly 7%.

After the trial ended, and the covid-19 pandemic hit, Pannell regained some weight and is now at 155. She is eager to get back on the medication and hopes her job-based insurance will cover it.

Many employers do cover obesity drugs. For example, about 40% of private employer plans include Novo Nordisk’s once-daily injection called Saxenda on their health plans, said Michael Bachner, Novo Nordisk’s director of media relations.

He said the $1,349-a-month wholesale acquisition price of Wegovy was determined by making it equivalent to that of Saxenda, which is less effective.

Still, that is more than the $851 monthly wholesale price of Ozempic. But, he points out, the recommended dosage of Wegovy is more than twice that of Ozempic. Four milligrams come in the Ozempic injector pens for the month, while Wegovy has 9.6.

“There’s more drug in the pen,” Bachner said. “That drives the price up.”

He added: “This is not a 20-year-old drug that we now have a new indication for and are pricing it higher. It’s a whole different clinical program,” which required new trials.

Now scientists, employers, physicians and patients will have to decide whether the new drugs are worth it.

Earlier estimates — some commissioned by Novo Nordisk — of the potential cost of adding an obesity drug benefit to Medicare showed an overall reduction in spending when better health from the resulting weight loss was factored in.

Still, those earlier estimates considered much less expensive drugs, including a range of generic and branded drugs costing as little as $7 a month to more than $300, a small fraction of Wegovy’s cost.

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Pfizer Court Fight Could Legalize Medicare Copays and Unleash ‘Gold Rush’ in Sales

Three years ago, pharma giant Pfizer paid $24 million to settle federal allegations that it was paying kickbacks and inflating sales by reimbursing Medicare patients for out-of-pocket medication costs.

By making prohibitively expensive medicine essentially free for patients, the company induced them to use Pfizer drugs even as the price of one of those medicines, covered by Medicare and Medicaid, soared 44% to $225,000 a year, the Justice Department alleged.

Now Pfizer is suing Uncle Sam to legalize essentially the same practice it was accused of three years ago — a fighting response to a federal crackdown that has resulted in a dozen drug companies being accused of similar practices.

A Pfizer win could cost taxpayers billions of dollars and erase an important control on pharma marketing after decades of regulatory erosion and soaring drug prices, say health policy analysts. A federal judge’s ruling is expected any day.

“If this is legal for Pfizer, Pfizer will not be the only pharmaceutical company to use this, and there will effectively be a gold rush,” government lawyer Jacob Lillywhite said in oral arguments last month.

Pfizer’s legal argument “is aggressive,” said Chris Robertson, a professor of health law at Boston University. “But I think they’ve got such a political tailwind behind them” because of pocketbook pain over prescription medicine — even though it’s caused by pharma manufacturers. Pfizer’s message, “‘We’re just trying to help people afford their drugs,’ is pretty attractive,” he said.

That’s not all that’s working in Pfizer’s favor. Courts and regulations have been moving pharma’s way since the Food and Drug Administration allowed limited TV drug ads in the 1980s. Other companies of all kinds also have gained free speech rights allowing aggressive marketing and political influence that would have been unthinkable decades ago, legal scholars say.

Among other court arguments, Pfizer initially claimed that current regulation violates its speech protections under the First Amendment, essentially saying it should be allowed to communicate freely with third-party charities to direct patient assistance.

“It’s infuriating to realize that, as outlandish as they seem, these types of claims are finding a good deal of traction before many courts,” said Michelle Mello, a professor of law and medicine at Stanford University. “Drug companies are surely aware that the judicial trend has been toward more expansive recognition of commercial speech rights.”

Pfizer’s lawsuit, in the Southern District of New York, seeks a judge’s permission to directly reimburse patient expenses for two of its heart-failure drugs each costing $225,000 a year. An outside administrator would use Pfizer contributions to cover Medicare copays, deductibles and coinsurance for those drugs, which otherwise would cost patients about $13,000 a year.

Letting pharma companies put money directly into patients’ pockets to pay for their own expensive medicines “does induce people to get a specific product” instead of shopping for a cheaper or more effective alternative, said Stacie Dusetzina, an associate professor of health policy at Vanderbilt University. “It’s kind of the definition of a kickback.”

Government rule-makers have warned against such payments since the launch of Medicare’s Part D drug benefit in 2006. Drug companies routinely help privately insured patients with cost sharing through coupons and other means, but private carriers can negotiate the overall price.

Because Congress gave Medicare no control over prescription drug prices, having patients share at least part of the cost is the only economic force guarding against unlimited price hikes and industry profits at taxpayer expense.

At the same time, however, regulators have allowed the industry to help patients with copays by routing money through outside charities — but only as long as the charities are “bona fide, independent” organizations that don’t match drugmaker money with specific drugs.

Several charities have blatantly violated that rule in recent years by colluding with pharma companies to subsidize particular drugs, the Justice Department has alleged. A dozen companies have paid more than $1 billion to settle allegations of kickback violations.

Pfizer set up an internal fund at one of the charities, the Patient Access Network Foundation, to cover patient costs for a heart arrhythmia drug at exactly the same time it was raising the wholesale cost from $220 to $317 for a package of 40 capsules, the Justice Department said. Pfizer referred Medicare patients who needed the drug to the PAN Foundation, the government said.

Under such arrangements, every $1 million channeled through a charity “has the potential to generate up to $21 m[illion] for the sponsor company, funded by the U.S. government,” Andrew Baum, a Citi pharma stock analyst, wrote in 2017.

Pfizer settled the case, saying it was not an admission of wrongdoing but resulted from its “desire to put this legal matter behind us.”

The PAN Foundation and three other charities also made deals to resolve allegations that they functioned as disallowed conduits for patient assistance for multiple pharma companies. One organization, the Virginia-based Caring Voice Coalition, shut down after government scrutiny.

PAN’s settlement did not mention the alleged Pfizer transactions. Those were described in the separate government deal with Pfizer.

The 2019 PAN agreement related to “legacy matters” and “did not involve any of PAN’s current operations or disease funds,” organization CEO Dan Klein said via a spokesperson. “Nonprofit patient assistance programs like PAN are necessary to help people access the critical medications they need to stay healthy.”

But legal troubles have hardly slowed the pharma-funded patient assistance business.

Four penalized nonprofits agreed to stop directing money to specific drugs, but they continue to accept hundreds of millions of dollars in pharma donations to indirectly cover copays and other patient drug costs, organization reports and IRS filings show. HHS regulators allow the practice because the drug companies are not involved in deciding which patients and which drugs are subsidized.

Donations to six pharma-funded patient assistance charities reached $1.8 billion in 2019, only slightly less than the year before, a KHN analysis of their IRS filings shows. That was nearly 50% higher than the amount from five years previously, before the Justice Department started cracking down.

Last year Pfizer donated $39.7 million to PAN and five other charities helping patients with out-of-pocket drug costs, company disclosures show.

If Pfizer’s lawsuit seeking to earmark such donations for its tafamidis heart-failure drugs opens the way for similar practices industrywide, it would drive up Medicare costs through rising prices and numbers of prescriptions, said Gerard Anderson, an economist and health policy professor at Johns Hopkins University’s Bloomberg School of Public Health. Such a program for tafamidis alone would increase Medicare costs by $30 billion, the Health and Human Services Department’s inspector general estimated.

Pharma companies can “learn which patients are using the drug, and they can market [and offer financial assistance] directly to that patient,” Anderson said. “You get a huge return.”

Pfizer argues that its proposal, which the HHS inspector general called “highly suspect” in an advisory opinion before the company filed its lawsuit, is legal and sensible.

“Providing copay assistance to middle-income patients who have been prescribed tafamidis is an efficient and equitable way to lower their out-of-pocket costs,” company spokesperson Steven Danehy said.

But the real affordability problem for patients is that tafamidis is too expensive, federal attorney Lillywhite said in court arguments last month. (HHS’ Office of Inspector General declined to comment.)

Pfizer has “priced itself out of the market,” he said. The company is seeking to “do something that’s unprecedented, to upend decades of settled law and agency guidance” to boost sales of “what is the most expensive cardiovascular drug ever launched in the United States.”

After the oral arguments, Pfizer dropped claims that HHS rules violate its free speech rights. Judge Mary Kay Vyskocil is considering only the company’s contention that a dedicated fund for tafamidis would not violate kickback prohibitions because, among other arguments, it is the doctor who decides to prescribe the drug and create revenue for Pfizer, not the patient getting the financial assistance.

But legal analysts still see the case as part of a broad movement toward deregulation and corporate rights.

A 1970s Supreme Court case, viewed as paving the way for an explosion of drug, lawyer and liquor ads as well as corporate campaign donations, was about speech rights for prescription drug sellers in Virginia. In 2011 the court found that the First Amendment allows data miners to buy and sell prescription records from pharmacies, provided the patients aren’t identified.

A year later, a federal appeals court cited speech protections when it overturned the conviction of a pharma sales rep who had been promoting a drug for uses not approved by the FDA.

Even if Pfizer loses its case, the climate may be ripe for similar challenges by other drugmakers, especially after the appointment of more than 200 federal judges by business-friendly President Donald Trump, legal scholars said.

The federal kickback law doesn’t mention copay assistance charities “and wasn’t designed with these programs in mind,” said Mello, of Stanford. Pfizer’s lawsuit “should be a loud, clanging call to Congress” to explicitly define drug assistance subsidies as illegal kickbacks, she said.

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How a Doctor Breaks Norms to Treat Refugees and Recent Immigrants

AURORA, Colo. — Fatumo Osman, a 65-year-old Somali refugee who speaks limited English, was in a bind. She made too much money at a meal prep service job so she no longer qualified for Medicaid. But knee pain kept her from working, so her income had dropped. She could reapply for Medicaid, get her knee fixed and return to work, at which point she’d lose that safety-net health coverage. Her first step was getting a note from a doctor so she wouldn’t lose her job.

So, Osman came to Mango House, a clinic in this eastern suburb of Denver that caters primarily to refugees and turns no one away, regardless of their ability to pay. Dr. P.J. Parmar designed the clinic to survive on the Medicaid payments that many doctors across the U.S. reject as too low.

The clinic is just one part of a broader refugee ecosystem that Parmar has built. Mango House provides food and clothing assistance, after-school programs, English classes, legal help — and Parmar even leads a Boy Scout troop there. He leases space to nine stores and six restaurants, all owned and run by refugees. Mango House hosts a dozen religious groups, plus community meetings, weddings and other celebrations. When Parmar needs an interpreter for a patient from any of a dozen languages spoken in the building, he can easily grab one of his tenants.

“This is what I call a medical home,” Parmar said.

Although it’s not part of the formal U.S. refugee resettlement program, Mango House is in many ways emblematic of refugee health care in the U.S. It’s a less-than-lucrative field of medicine that often relies on individual physicians willing to eke out a living caring for an underserved and under-resourced population.

Parmar finds creative ways, often flouting norms or skirting rules, to fit his patients’ needs. As a result, Mango House looks nothing like the rest of the U.S. health care system and, at times, draws the ire of the medical establishment.

“How do you deliver the quality of care necessary, and that they deserve, while still keeping the lights on? It’s a struggle for sure,” said Jim Sutton, executive director of the Society of Refugee Healthcare Providers. “It’s these heroes, these champions out there, these cowboys that are taking this on.”

Osman brought her son, Jabarti Yussef, 33, to interpret for her. They have been coming to Mango House for 10 years and said that Parmar opens doors for them when they have trouble accessing care.

“If we ask for an appointment to get Medicaid, P.J. makes the call,” Yussef said. “If we call, we’re on hold for an hour, and then it hangs up. If we go to the ER, it’s a three-hour wait. Here, the majority of people walk in and sit for 30 minutes. It’s good for the community.”

As for Osman’s knee pain, Yussef asked Parmar, could they pay cash to get an MRI at the hospital?

“I can almost guarantee it’s arthritis,” Parmar replied. “You could do an X-ray. That will cost $100. An MRI will cost $500. And if it shows a bigger problem, what are you going to do? It will cost you $100,000.”

Parmar said he would connect them with someone who could help Osman enroll in Medicaid but that it’s an imperfect solution. “Most orthopedists don’t take Medicaid,” Parmar said. Older immigrants need to have worked the equivalent of 10 years in the U.S. to qualify for Medicare.

Medicaid, which covers low-income people, generally pays primary health care providers a third less than Medicare, which covers seniors and the disabled. And both pay even less than commercial insurance plans. Some doctors paint Medicaid patients as more difficult and less likely to follow instructions, show up on time or speak English.

Parmar said he realized back in medical school that few doctors were motivated to treat Medicaid patients. If he limited his practice to just Medicaid, he said dryly, he’d have guaranteed customers and no competition.

So how does he survive on Medicaid rates? By keeping his overhead low. There are no appointments, so no costs for a receptionist or scheduling software.

He said his patients often like that they can drop in anytime and be seen on a first-come, first-served basis, much like an urgent care clinic, and similar to the way things worked in their native countries.

Because he takes only Medicaid, he knows how to bill the program and doesn’t have to hire billing specialists to deal with 10 insurance companies.

It’s also more cost-efficient for the health system. Many of his patients would otherwise go to the emergency room, sometimes avoiding care altogether until their problems get much worse and more expensive to fix.

“Really none of our innovations are new or unique; we just put them together in a unique way to help low-income folks, while making money,” Parmar said. “And then, instead of taking that money home, I put it back into the refugee community.”

The son of Indian immigrants, Parmar, 46, was born in Canada but grew up in Chicago and moved to Colorado after college in 1999, where he did his medical training at the University of Colorado School of Medicine. He opened Mango House 10 years ago, buying a building and renting out space to refugees to cover the cost. Two years ago, he expanded into a vacant J.C. Penney building across the street.

“There’s a good three-, four-year dip in the red here, intentionally, as we move from there to here,” Parmar said. “But that red is going to go away soon.”

The covid pandemic has helped shore up his finances, as federal incentives and payment increases boosted revenue and allowed him to pay down his debt faster.

Parmar must navigate a host of obstacles while working to overcome financial and language barriers. A Muslim Somali woman needs dental care but is uncomfortable seeing a male dentist. A Nepalese woman needs a prescription refill, but she lives in Denver and so has been assigned by Medicaid to the safety-net hospital, Denver Health. Parmar won’t get paid but sees her anyway. Another patient brings paperwork showing he’s being sued by a local health system for a year-old emergency room bill he has no way to pay. A Nepalese man with psoriasis doesn’t want creams or ointments; good medicine, he believes, comes through a needle.

“A lot of this is, basically, geriatrics,” Parmar said. “You have to add 20 years to get their age in refugee years.”

When one patient turns away momentarily, Parmar discreetly throws away her bottle of meloxicam, a strong anti-inflammatory he said she shouldn’t be taking because of her kidney problems. He began stocking over-the-counter medications after realizing his patients got overwhelmed amid 200 varieties of cough and cold medicines at the drugstore. Some couldn’t find what he told them to get, even after he printed flyers showing pictures of the products.

Parmar’s creative solutions, however, often rub many in health care the wrong way. Some balk at his use of family members or others as informal interpreters. Best practices call for the use of trained interpreters who understand medicine and patient privacy rules. But billing for interpretation isn’t possible, so hospitals and clinics must pay interpreters themselves. And that’s beyond the capabilities of most refugee clinics, unless they’re affiliated with a larger health system that can absorb those costs.

“It’s a good thing to have the standards, but it’s another thing altogether to implement them,” said Dr. Pat Walker, an expert on refugee health at the University of Minnesota.

When Mango House began providing covid vaccines, residents of more affluent areas of town started showing up. Parmar tried to limit vaccinations only to those patients living in the immediate area, checking ZIP codes on their IDs. The state stepped in to say he could neither require IDs nor turn away any patients, regardless of his refugee-focused mission.

During a recent lull at the clinic, Parmar took stock of that day’s inventory of patients. Six were assigned to Denver Health, one patient’s Medicaid coverage had expired, and two had high-deductible commercial plans. Chances are he wouldn’t get paid for seeing any of them. Of the 25 patients he had seen that day, 14 had Medicaid coverage that Parmar could bill.

“We see the rest of them anyway,” he said.

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The Pandemic Made Telemedicine an Instant Hit. Patients and Providers Feel the Growing Pains.

Crystal Joseph pays for two telemedicine video services to ensure that her small therapy practice in Silver Spring, Maryland, can always connect with its clients.

She’s been burned before. During one hours-long service outage of SimplePractice in late May, PsycYourMind, which offers mental health counseling and group sessions for Black patients, lost about $600 because of missed appointments. Livid, Joseph requested a small credit from the telemedicine service, which costs $432 monthly for her team of clinicians and trainees. SimplePractice refused, she said.

“What they offer is phenomenal, especially being founded by a therapist,” said Joseph, a licensed clinical professional counselor. “But with a private practice, if you don’t get paid, you don’t eat.” For some sessions, she was able to hop onto her backup, VSee, which costs her $49 each month. Some of her peers use Zoom. But even though Joseph keeps links to both her SimplePractice and VSee accounts in her email signature, a last-minute switch-up can feel messy for clients, and she never charges a no-show fee when it’s an “act of God.”

Major health systems, clinics and private practices alike pivoted swiftly to telemedicine when the covid-19 pandemic forced the nation to shelter in place and patients could no longer safely venture into health care settings. But the video services were not equally prepared for the titanic influx in users, said Kapil Chalil Madathil, an engineering professor at Clemson University who has researched how easy — or difficult — telemedicine platforms are to use.

Videoconferencing vendors, including Zoom, tech giants like Microsoft and Cisco, and a host of telemedicine startups absorbed an explosion of demand over the past pandemic months. PitchBook estimates that revenue from the global telehealth market will hit $312.3 billion in 2026, up from $65.5 billion in 2019. But beyond connectivity issues, some services seemed designed for dissatisfaction. They required patients to download a desktop application or made them click through multiple steps to log in. “On an iPhone, I can click one button to see my grandkids,” Madathil said. “Can we not make telemedicine systems as easy as that?”

Providers often were locked in with telemedicine options from services they were already using — or what they could afford. Joseph was already paying SimplePractice to house her practice’s electronic health records, so moving to another platform would have been time-consuming and costly, she said.

Practitioners have depended on telemedicine to keep their businesses afloat in the pandemic, and Joseph plans to keep a portion of her sessions virtual. A one-stop shop for private practice clinicians, SimplePractice offers scheduling, an electronic medical records system and insurance claims filing along with its video services. The company said it hosted 17 million telehealth appointments last year.

“The expectations are rising,” said Diana Stepner, a SimplePractice vice president. “Individuals want screen sharing, they want grid views, so we’ve added new capabilities since the pandemic began and will continue to do so.”

Zoom became an overnight poster child for staying connected as employees in every line of business across the country worked from home. Its revenue jumped 326% in the fiscal year that ended on Jan. 31, 2021, over the previous year’s. Even before the pandemic, the Silicon Valley company offered a service tailored for health care practitioners that complied with the Health Insurance Portability and Accountability Act, which protects patient privacy, and could be synced with Epic Systems electronic medical records.

“It was ‘all bets are off’ once the pandemic hit,” said Heidi West, who heads the health care division at Zoom. West pointed to the CARES Act and the loosening of telehealth regulations, which allowed doctors to be reimbursed for telemedicine at the same rate as for in-office visits.

UCSF Health, which had contracted with Zoom for virtual visits since 2016, gave every doctor and clinician a personal link for its videoconference line and a separate virtual waiting room. Telemedicine calls for outpatient care within the San Francisco academic medical system spiked from 2% of visits in February 2020 to more than 60% by that April. Doctors were seeing patients — who often used their cellphones — in their homes, in parked cars and in one case on skyscraper scaffolding, where a construction worker stepped away for a quick doctor’s visit, said Linda Branagan, director of telehealth at UCSF Health.

Zoom is not immune to glitches, Branagan said, but it seems to bounce back faster than many other vendors and “recovers quite gracefully.”

UCSF surveyed its patients and found they were more satisfied with their video visits than their in-person ones. More than a year later, almost one-third of outpatient visits are still conducted virtually.

Elsewhere, the initial transition was rockier. Dr. James McElligott, who runs Medical University of South Carolina’s Center for Telehealth, said the hospital could not afford to upgrade its Vidyo conferencing system, so he opted for Doxy.me, which the center already used for research and had an easy-to-use interface.

“We were able to get clever, and many doctors really liked it,” McElligott said. The software has a waiting room from which patients can be transferred into virtual rooms with providers. The health system sent patients a text with a direct link for their appointments so that they didn’t lose time.

“But we couldn’t control quality or solve connectivity issues ourselves,” he said. “We did have a lot of patients who, despite it just being a link, were uncomfortable waiting.” That led to some patients abandoning visits, he added.

Doxy.me employed just eight people when the video telemedicine service saw an unwieldy increase in users in March 2020. For two weeks straight, the company signed up 20,000 new health care providers a day, said founder and CEO Brandon Welch, amassing a backlog of customer service inquiries. One day, Welch recalled, there was a 30-second queue for the website to load because so many people were logging on simultaneously.

“We hired anyone who could walk and chew gum at the same time,” joked Welch, noting that many of those early pandemic hires, largely tackling customer service, had been recently laid off from other industries, like restaurants.

Doxy.me automated the sign-up process as quickly as possible. The service ballooned from 80,000 users to 850,000 as it assembled a team of 120 employees. And it is still hiring. Doctors and clinicians can sign up for the basic HIPAA-compliant service — which includes audio, video and a patient waiting room — at no charge. But for enhanced options, like screen sharing or shared rooms, there’s a price tag of at least $29 a month.

For many doctors and clinicians, the move to virtual visits may be permanent, even with all the technical hiccups. A survey conducted by SimplePractice of over 2,400 clinicians in February found that 88% expected to continue offering a telehealth option.

Jessica Ehrman, a Santa Monica, California, therapist who plans to keep her practice fully remote, finds telemedicine much easier for scheduling, particularly for kids who have short windows of availability. Still, connectivity issues during that small time frame can tarnish the whole session.

“If you’re talking about deep childhood trauma — having your connection time out then? It’s really frustrating when we’re paying for a service,” said Ehrman, who has been suddenly dropped from sessions, experienced lags and even once saw back-end coding pop up in her provider portal. Like Joseph in Maryland, she uses SimplePractice through her agency and personally pays for Zoom’s HIPAA-compliant option to head off technical difficulties.

Despite the problems, few health care providers want to forsake the technology. “Video visits are cemented,” said Branagan. “I will never again have to have a conversation with a physician to convince them that you can do health care via video.”

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Facing Headwinds on New Alzheimer’s Drug, Biogen Launches Controversial Campaign

Do you sometimes lose your train of thought or feel a bit more anxious than is typical for you?

Those are two of the six questions in a quiz on a website co-sponsored by the makers of Aduhelm, a controversial new Alzheimer’s drug. But even when all responses to the frequency of those experiences are “never,” the quiz issues a “talk to your doctor” recommendation about the potential need for additional cognitive testing.

Facing a host of challenges, Aduhelm’s makers Biogen and its partner Eisai are taking a page right out of a classic marketing playbook: Run an educational campaign directed at the consumer, one who is already worried about whether those lost keys or a hard-to-recall name is a sign of something grave.

The campaign — which also includes a detailed advertisement on The New York Times’ website, a Facebook page and partnerships aimed at increasing the number of places where consumers can get cognitive testing — is drawing fire from critics. They say it uses misleading information to tout a drug whose effectiveness is widely questioned.

“It’s particularly egregious because they are trying to convince people with either normal memories or normal age-related decline that they are ill and they need a drug,” said Dr. Adriane Fugh-Berman, a pharmacology professor at Georgetown University Medical Center, who wrote about the website in an opinion piece.

The website’s “symptoms quiz” asks about several common concerns, such as how often a person feels depressed, struggles to come up with a word, asks the same questions over and over, or gets lost. Readers can answer “never,” “almost never,” “fairly often” or “often.” No matter the answers, however, it directs quiz takers to talk with their doctors about their concerns and whether additional testing is needed.

While some of those concerns can be symptoms of dementia or cognitive impairment, “this clearly does overly medicalize very common events that most adults experience in the course of daily life: Who hasn’t lost one’s train of thought or the thread of a conversation, book or movie? Who hasn’t had trouble finding the right word for something?” said Dr. Jerry Avorn, a professor of medicine at Harvard Medical School who has been sharply critical of the approval.

Aduhelm was approved in June by the Food and Drug Administration, but that came after an FDA advisory panel recommended against it, citing a lack of definitive evidence that it works to slow the progression of the disease. The FDA, however, granted what is called “accelerated approval,” based on the drug’s ability to reduce a type of amyloid plaque in the brain. That plaque has been associated with Alzheimer’s patients, but its role in the disease is still being studied.

News reports also have raised questions about FDA officials’ efforts to help Biogen get Aduhelm approved. And consumer advocates have decried the $56,000-a-year price tag that Biogen has set for the drug.

On the day it was approved, Patrizia Cavazzoni, the FDA’s director of the Center for Drug Evaluation and Research, said the trial results showed it substantially reduced amyloid plaques and “is reasonably likely to result in clinical benefit.”

Describing the website as part of a “disease awareness educational program,” Biogen spokesperson Allison Parks said in an email that it is aimed at “cognitive health and the importance of early detection.” She noted that the campaign does not mention the drug by name.

Earlier Thursday, in “an open letter to the Alzheimer’s disease community,” Biogen’s head of research, Dr. Alfred Sandrock, noted the drug is the first one approved for the condition since 2003 and said it has been the subject of “extensive misinformation and misunderstanding.” Sandrock stressed a need to offer it quickly to those who have only just begun to experience symptoms so they can be treated before the disease moves “beyond the stages at which Aduhelm should be initiated.”

While the drug has critics, it is also welcomed by some patients, who see it as a glimmer of hope. The Alzheimer’s Association pushed for the approval so that patients would have a new option for treatment, although the group has objected to Biogen’s pricing and the fact that it has nine years to submit follow-up effectiveness studies.

“We applaud the FDA’s decision,” said Maria Carrillo, chief science officer for the association. “There’s a benefit to having access to it now” because it is aimed at those in the early stages of dementia. Those patients want even a modest slowdown in disease progression so they have more time to do the things they want to accomplish, she said.

The drug is given by infusion every four weeks. It also requires expensive associated care. About 40% of the patients in the trials experienced brain swelling or bleeds, so regular brain imaging scans are also required, according to clinical trial results and the drug’s label. In addition, patients will likely need to be checked for amyloid protein, which is done with expensive PET scans or invasive spinal taps, according to Alzheimer’s experts.

To educate more potential patients, and customers, Biogen announced it has teamed with CVS to offer cognitive testing, and with free clinics for dementia education efforts.

Biogen is also picking up some of the laboratory costs for patients who get a spinal tap.

Still, the drug faces headwinds: There’s a congressional probe of the drug’s approval, the head of the FDA has called for an independent investigation of its review process, and there’s pushback from policy experts and insurers over its price, which they say could seriously strain Medicare’s finances. Some medical systems, including the Cleveland Clinic and Mount Sinai, say they won’t administer it, citing efficacy and safety data.

None of that is mentioned in Biogen’s campaign.

Instead, the advertisements and websites focus on what is called mild cognitive impairment, including a warning that 1 in 12 people over age 50 have that condition, which it describes as the earliest clinical stage of Alzheimer’s.

On its website, Biogen doesn’t cite where that statistic comes from. When asked for the source, Parks said Biogen’s researchers made some mathematical calculations based on U.S. population data and data from a January 2018 article in the journal Neurology.

Some experts say that percentage seems high, particularly on the younger end of that spectrum.

“I can’t find any evidence to support the claim that 1 in 12 Americans over age 50 have MCI due to Alzheimer’s disease. I do not believe it is accurate,” said Dr. Matthew S. Schrag, a vascular neurologist and assistant professor of neurology at Vanderbilt University Medical Center in Nashville, Tennessee.

While some people who have mild cognitive impairment progress to Alzheimer’s — about 20% over three years — most do not, said Schrag: “It’s important to tell patients that a diagnosis of MCI is not the same as a diagnosis of Alzheimer’s.”

Mild cognitive impairment is tricky to diagnose — and not something a simple six-question quiz can uncover, said Mary Sano, director of the Alzheimer’s Disease Research Center at the Icahn School of Medicine at Mount Sinai in New York.

“The first thing to determine is whether it’s a new memory problem or a long-standing poor memory,” said Sano, who said a physician visit can help patients suss this out. “Is it due to some other medical condition or a lifestyle change?”

Carrillo, at the Alzheimer’s Association, agreed that MCI can have many causes, including poor sleep, depression or taking certain prescription medications.

Based on a review of medical literature, her organization estimates that about 8% of people over age 65 have mild cognitive impairment due to the disease.

She declined to comment on the Biogen campaign but did say that early detection of Alzheimer’s is important and that patients should seek out their physicians if they have concerns rather than rely on “a take-at-home quiz.”

Schrag, however, minced no words in his opinion of the campaign, saying it “feels like an agenda to expand the diagnosis of cognitive impairment in patients because that is the group they are marketing to.”

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After 18 Months, Sutter Antitrust Settlement Finally Poised for Formal Approval

More than 18 months after Sutter Health agreed to a tentative settlement in a closely watched antitrust case joined by the California Attorney General’s Office, the judge presiding over the case indicated she would sign off on the terms, pending agreement on attorney fees. The nonprofit health care giant, based in Sacramento, stood accused of violating California’s antitrust laws by using its market dominance to drive up prices.

The settlement is expected to have nationwide implications on how hospital systems negotiate prices with insurers.

“These plaintiffs are among the first, but will not be the last, to successfully challenge dominant health care systems who undertake land grabs to mark up prices at the expense of patients and employers,” Leemore Dafny, a Harvard Business School professor who studies the industry, wrote in an email. “This settlement has provided a marker for the rest of the nation.”

The settlement, which includes $575 million in damages, was announced on a preliminary basis in December 2019. It marked a dramatic turn in a long-running legal battle initiated in 2014 as a class-action lawsuit filed by the United Food and Commercial Workers International Union & Employers Benefit Trust, representing employers, unions and local governments whose workers use Sutter services. Then-Attorney General Xavier Becerra joined the case in 2018.

Numerous twists and turns have slowed the court’s approval of the settlement in the months since.

San Francisco Superior Court Judge Anne-Christine Massullo had been expected to issue a preliminary approval of the terms in August 2020, but rejected the independent monitor the parties had chosen to oversee the rollout of the agreement. The monitor chosen was neither a woman nor a person of color, and Massullo said the parties’ selection process did not properly take into account the court’s emphasis on diversity, equity and inclusion.

More months passed as Sutter argued for further delays and suggested it would push to alter the settlement in light of the potentially dramatic impacts of the covid-19 pandemic on the health care system’s finances and operations.

Preliminary approval was eventually granted, but most recently, final approval was postponed because of a dispute between UEBT and their lawyers over attorney fees. The parties had agreed at the outset to plaintiffs’ attorneys, led by Richard Grossman of Pillsbury & Coleman, getting 30% of the settlement amount. Given the size of the settlement, that comes to $172.5 million in attorney fees, a figure UEBT argues is unreasonably high.

An additional 2% in fees will go to the Attorney General’s Office. UEBT expects to receive about $15 million, and what is left of the $575 million will be distributed among the rest of the class, made up of other unions and employers who purchase health insurance for their workers.

Thursday’s hearing was largely devoted to a tense back-and-forth over the attorney fees. Ultimately, the hearing concluded without resolution on the issue. But Massullo indicated she would approve the terms of the settlement in a written order once the fees had been sorted out. The timing of that final order was left unclear.

Sutter has 23 hospitals, 33 surgery centers and 12,000 physicians across Northern California, with $13 billion in operating revenue in 2020. Among other allegations, the state’s lawsuit argued Sutter has aggressively bought up hospitals and physician practices throughout the Bay Area and the rest of Northern California, and exploited that market dominance for profit.

Health care costs in Northern California are 20% to 30% higher than in Southern California, even after adjusting for cost of living, according to a 2018 study from the Nicholas C. Petris Center at the University of California-Berkeley that was cited in the complaint.

Among other terms, the settlement requires Sutter to:

Limit what it charges patients for out-of-network services.

Increase transparency by allowing insurers and employers to give patients pricing information.

Cease bundling services and products, and instead offer stand-alone pricing.

In agreeing to the settlement, Sutter did not admit wrongdoing. Throughout the proceedings, it has maintained that its integrated health system offers tangible benefits for patients, including affordable rates and consistent high-quality care. Sutter spokesperson Amy Thoma Tan said in an email that the settlement would not reduce the quality of patient care.

“Our commitment to providing high-quality care to our patients is unwavering, and independent data shows that our quality yields better health outcomes and a lower total cost of care,” she wrote. “Sutter’s quality of care is nationally recognized, with the majority of our hospitals and facilities outperforming state and national averages in nearly every measure of quality.”

Still, under the terms of the settlement, Sutter agreed to end a host of practices that Becerra, who now heads the U.S. Department of Health and Human Services, alleged unfairly stifled competition. Among other conditions, the settlement also requires Sutter to limit what it charges patients for out-of-network services and end its all-or-nothing contracting deals with payers, which demanded that an insurer that wanted to include any one of the Sutter hospitals or clinics in its network must include all of them.

Sutter has earned an average 42% annual profit margin over the past decade from medical treatments paid for by commercial insurers like the plaintiff companies, according to a recent analysis by Glenn Melnick, a health care economist at the University of Southern California.

Sutter also faces a second federal class-action lawsuit alleging anti-competitive behavior. But while Sutter remains in the crosshairs, its practices are not unique. Experts say negotiating tactics including all-or-nothing contracts and anti-tiering provisions have become widespread among hospital systems nationwide.

“Any system could change their practices tomorrow. If we have to wait for the courts to force them to not use anti-competitive practices, that’s really disappointing,” said Elizabeth Mitchell, CEO of the Purchaser Business Group on Health, which represents employers that buy insurance coverage for their workers.

“What the Sutter case proves is that the people who pay for and receive care can achieve accountability from the health care system. But it shouldn’t be that hard.”

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

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KHN’s ‘What the Health?’: Delta Changes the Covid Conversation

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The resurgence of covid cases in the U.S. — largely attributable to the much more contagious delta variant — has given policymakers the jitters. The Biden administration is redoubling efforts to get people vaccinated, and even some Republicans who had been silent or skeptical of the vaccines are encouraging the unvaccinated to change their status.

Meanwhile, it’s not just covid that’s shortening U.S. life expectancy. Nearly 100,000 people died of drug overdoses in 2020, according to the Centers for Disease Control and Prevention. This week a multibillion-dollar settlement among states, drugmakers and distributors could funnel funding to fight the opioid scourge.

This week’s panelists are Julie Rovner of KHN, Stephanie Armour of The Wall Street Journal, Alice Miranda Ollstein of Politico and Tami Luhby of CNN.

Among the takeaways from this week’s episode:

If lawmakers fail to craft a bipartisan deal on Capitol Hill on traditional infrastructure spending, Democrats’ plans for a second bill that incorporates significant health care programs may need to be scaled back. That’s because the Democrats have pledged to fund major improvements in infrastructure and they would need to add that to the second bill, which is being moved through a special procedure that keeps it from being stalled in the Senate by a Republican filibuster. Some Democrats are nervous about making that second bill too broad.

The momentum toward vaccinating the public has stalled abruptly in the past month or so, and reports of rising cases is causing concern among conservatives. Some high-profile Republicans — including Senate Minority Leader Mitch McConnell, Rep. Steve Scalise (La.) and Florida Gov. Ron DeSantis — have been out during the past week touting the vaccines’ successes.

The agreement reached this week between state officials and companies that made or distributed opioids will send billions of dollars to the states to fund prevention and treatment programs for people with addiction problems. Some advocates worry, however, that the funding — much like the landmark tobacco settlement of past years — will instead be absorbed by cash-strapped states for other uses.
The Biden administration proposed significantly increasing the fines for hospitals that do not make their prices easily seen online and understood for patients. Despite the widespread eagerness to establish transparency, there is little indication consumers are using such tools.

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

Julie Rovner: NPR’s “The Life Cycle of a COVID-19 Vaccine Lie,” by Geoff Brumfiel

Stephanie Armour: The Washington Post’s “Biden Administration, Workers Grapple With Health Threats Posed by Climate Change and Heat,” by Eli Rosenberg and Abha Bhattarai

Tami Luhby: The Los Angeles Times’ “Same Hospitals but Worse Outcomes for Black Patients Than White Ones,” by Emily Alpert Reyes

Alice Miranda Ollstein: The 19th’s “Courts Block Laws Targeting Transgender Children in Arkansas and West Virginia,” by Orion Rummler

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

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Biden’s July Executive Order Includes Drug Pricing Provisions. But Will They Do Enough?

President Joe Biden’s executive order of July 9 included various steps toward making good on campaign promises to take on pharmaceutical companies by allowing the importation of prescription drugs and curbing the high cost of medicines.

These issues were key to candidate Biden’s 2020 health care platform, which stated he would “stand up to abuse of power” by drugmakers. Biden promised on his campaign website that he would allow consumers to buy prescription drugs from other countries, as long as the Department of Health and Human Services deemed it safe. In speeches, candidate Biden also pledged to bring down drug costs by 60%.

Nearly six months into his term, Biden issued an executive order on promoting economic competition, which included moves toward fulfilling these promises.

KHN has teamed up with our partners at PolitiFact to analyze Biden’s promises during the 2020 presidential campaign — and, so far, experts generally say the jury is still out on how meaningful these efforts will be.

Drug Importation

Promise: “To create more competition for U.S. drug corporations, Biden will allow consumers to import prescription drugs from other countries, as long as the U.S. Department of Health and Human Services has certified that those drugs are safe.”

The July 9 executive order directed the Food and Drug Administration commissioner to work with states to develop a program allowing prescription medications to be brought in from other countries, particularly Canada.

However, several drug pricing experts told us that, of all the policy ideas aimed at reducing the cost of drugs, importation seems the least likely to happen.

“Other countries are not interested in facilitating this,” said Benedic Ippolito, a senior fellow in economic policy studies at the American Enterprise Institute.

Matthew Fiedler, a fellow with the USC-Brookings Schaeffer Initiative for Health Policy, agreed.

“This policy is unlikely to ever work as intended because Canada is unlikely to allow the export of drugs to the United States,” Fiedler wrote in an email.

That’s because drug manufacturers would then probably demand higher prices in Canada, since those would become the de facto U.S. prices, he said. “That would cause a big increase in prices in Canada that Canada likely wishes to avoid.”

This is not the first time a president has suggested importing drugs, notably from Canada. President Donald Trump put forward the same idea during his time in office. Democrats and Republicans alike have supported similar proposals.

During the Trump administration, a rule was finalized allowing states to seek the FDA’s permission to import drugs. Several states then passed laws to that end, but Florida is the only state to have formally applied to the FDA. The agency has yet to make a decision on the request.

The Pharmaceutical Research and Manufacturers of America, the trade industry group representing major pharmaceutical companies, sued HHS in 2020 in an attempt to get this drug importation rule overturned. The litigation is ongoing, though the Biden administration has asked for the case to be dismissed.

In a May court filing, the administration argued the case was pointless because it’s unclear whether any state importation plan would be approved anytime soon.

Canada has signaled its concern that exporting drugs to the U.S. could trigger shortages within its borders, and after the Trump-era rule was finalized, the country moved to block bulk exports of medications in short supply.

Still, Rachel Sachs, a law professor and drug pricing expert at Washington University in St. Louis, said Biden’s “rehabbed” policy isn’t a bad thing.

“Drug pricing has been a big problem for several years now, and there are many policy ideas on the table. We don’t lack for policy ideas — we lack for actual implementation of those ideas,” Sachs wrote in an email. “So I don’t think it’s concerning at all if the administration chooses to advance existing policy ideas rather than developing new ones from scratch.”

It’s also important to remember that Biden has just released an executive order directing that these things happen. It is just a first step in a long line of steps, including issuing rules and allowing time for public comment.

That means details of how this importation policy would work are not yet available. The executive order calls for a report to be issued 45 days afterward with a plan outlining specific efforts to reduce prescription drug prices.

“I assume we’ll know more then,” Sachs said.

The High Cost of Drugs

Promise: “I’m going to lower prescription drugs by 60%, and that’s the truth.”

On this pledge, the recent executive order outlined the president’s vision for how to proceed.

The order included an initiative designed to shore up the approval framework for generic drugs and biosimilars, working with the Federal Trade Commission to address efforts to impede competition for these types of drugs and help Medicare and Medicaid incorporate new payment models to cover them.

Experts so far have offered measured reactions.

The administrative actions outlined in this executive order do have the potential to reduce prescription drug prices, said Fiedler of the USC-Brookings Schaeffer Initiative. But it depends on more than just what the order says.

“In each of these areas, whether prices actually fall will depend on the details of the proposals the administration ultimately puts forward,” Fiedler wrote in an email. “However, these are all areas where there are opportunities to make changes that would have a meaningful impact.”

Again, more will be known in 45 days, the deadline for the release of the plan to reduce prescription drug prices.

It’s important to note that the FTC is an independent agency, so Biden’s principal means of influencing drug policy comes from his appointments to the agency, said Fiedler. It does seem likely, though, he added, that the newly appointed FTC chair would be sympathetic to cracking down on market conduct that delays the entry of generic drugs or biosimilars.

Still, reducing drug prices by 60% would require legislation, said the AEI’s Ippolito.

“And the most disruptive drug pricing reforms — those that could even sniff that kind of price reduction — are also the most unlikely to pass,” Ippolito wrote in an email. “In short, I suspect that this executive order isn’t going to make much headway.”

Trump also promised last year on the campaign trail that he would lower drug prices by 60%, after repeatedly promising to reduce medication costs during his four years in office. However, little progress was made toward that goal despite several related executive orders in 2020.

While Biden’s executive order has a different focus than most of the Trump-era drug pricing orders, the Biden administration has signaled it may still be open to embracing some of those policies.

Trump’s directives focused on rebates paid to pharmacy benefit managers being rerouted to beneficiaries, reducing the cost of insulin by compelling federally qualified health centers to make the drugs available at low prices to low-income people, importing drugs from Canada and tying drug prices to the prices paid in other countries.

Three proposed rules that resulted from Trump’s orders are being kept around by the Biden administration — at least for the time being. One is the “Most Favored Nation Model.” This rule is supposed to match U.S. prices for certain classes of drugs with the lower amounts paid in countries that negotiate drug prices.

According to Politico, the Biden administration’s regulatory office received the rule this month, which means there may be a new public comment period before the rule is finalized — though it’s likely this would take some time.

And, of course, there’s the pending Trump administration rule on drug importation, currently tied up in court.

Trump’s rebate rule, meanwhile, has also been delayed. The Biden administration pushed back its effective date to January 2023. Freezing the rule was part of the Biden administration’s policy to review any rules finalized in the final months of Trump’s term.

No other Trump drug pricing efforts made much headway. Instead, they drew a fair amount of industry pushback.

And it remains to be seen whether Biden’s directives will fare any better.

Experts agreed that most likely congressional action would be needed to achieve a 60% reduction in prices. With over three years left in Biden’s term, who knows what could still happen?

For now, we rate these promises “In the Works.”

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Hospital ‘Trauma Centers’ Charge Enormous Fees to Treat Minor Injuries and Send People Home

The care was ordinary. A hospital in Modesto, California, treated a 30-year-old man for shoulder and back pain after a car accident. He went home in less than three hours.

The bill was extraordinary. Sutter Health Memorial Medical Center charged $44,914 including an $8,928 “trauma alert” fee, billed for summoning the hospital’s top surgical specialists and usually associated with the most severely injured patients.

The case, buried in the records of a 2017 trial, is a rare example of a courtroom challenge to something billing consultants say is increasingly common at U.S. hospitals.

Tens of thousands of times a year, hospitals charge enormously expensive trauma alert fees for injuries so minor the patient is never admitted.

In Florida alone, where the number of trauma centers has exploded, hospitals charged such fees more than 13,000 times in 2019 even though the patient went home the same day, according to a KHN analysis of state data provided by Etienne Pracht, an economist at the University of South Florida. Those cases accounted for more than a quarter of all the state’s trauma team activations that year and were more than double the number of similar cases in 2014, according to an all-payer database of hospital claims kept by Florida’s Agency for Health Care Administration.

While false alarms are to be expected, such frequent charges for little if any treatment suggest some hospitals see the alerts as much as a money spigot as a clinical emergency tool, claims consultants say.

“Some hospitals are using it as a revenue generator,” Tami Rockholt, a registered nurse and medical claims consultant who appeared as an expert witness in the Sutter Health car-accident trial, said in an interview. “It’s being taken advantage of” and such cases are “way more numerous” than a few years ago, she said.

Hospitals can charge trauma activation fees when a crack squad of doctors and nurses assembles after an ambulance crew says it’s approaching with a patient who needs trauma care. The idea is that life-threatening injuries need immediate attention and that designated trauma centers should be able to recoup the cost of having a team ready — even if it never swings into action.

Those fees, which can exceed $50,000 per patient, are billed on top of what hospitals charge for emergency medical care.

“We do see quite a bit of non-appropriate trauma charges — more than you’d see five years ago,” said Pat Palmer, co-founder of Beacon Healthcare Costs Illuminated, which analyzes thousands of bills for insurers and patients. Recently “we saw a trauma activation fee where the patient walked into the ER” and walked out soon afterward, she said.

The portion of Florida trauma activation cases without an admission rose from 22% in 2012 to 27% last year, according to the data. At one Florida facility, Broward Health Medical Center, there were 1,285 trauma activation cases in 2019 with no admission — almost equal to the number that led to admissions.

“Trauma alerts are activated by EMS [first responders with emergency medical services], not hospitals, and we respond accordingly when EMS activates a trauma alert from the field,” said Jennifer Smith, a Broward Health spokesperson.

Florida regulations allow hospitals themselves to declare an “in-hospital trauma alert” for “patients not identified as a trauma alert” in the field, according to standards published by the Florida Department of Health.

At some hospitals, few patients whose cases generate trauma alerts are treated and released the same day.

At Regions Hospital, a Level I trauma center in St. Paul, Minnesota, patients who are not admitted after a trauma team alert are “very rare” — 42 of 828 cases last year, or about 5%, said Dr. Michael McGonigal, the center’s director, who blogs at “The Trauma Pro.”

“If you’re charging an activation fee for all these people who go home, ultimately that’s going to be a red flag” for Medicare and insurers, he said.

In the Sutter case in Modesto, the patient sued a driver who struck his vehicle, seeking damages from the driver and her insurer. Patient “looks good,” an emergency doctor wrote in the records, which were part of the trial evidence. He prescribed Tylenol with hydrocodone for pain.

“If someone is not going to bleed out, or their heart is not going to stop, or they’re not going to quit breathing in the next 30 minutes, they probably do not need a trauma team,” Rockholt said in her testimony.

Like other California hospitals with trauma center designations, Sutter Health Memorial Medical Center follows “county-designated criteria” for calling an activation, said Sutter spokesperson Liz Madison: “The goal is to remain in position to address trauma cases at all times — even in the events where a patient is determined healthy enough to be treated and released on the same day.”

Trauma centers regularly review and revise their rules for trauma team activation, said Dr. Martin Schreiber, trauma chief at Oregon Health & Science University and board chair at the Trauma Center Association of America, an industry group.

“It is not my impression that trauma centers are using activations to make money,” he said. “Activating patients unnecessarily is not considered acceptable in the trauma community.”

Hospitals began billing trauma team fees to insurers of all kinds after Medicare authorized them starting in 2008 for cases in which hospitals are notified of severe injuries before a patient arrives. Instead of leaving trauma team alerts to the paramedics, hospitals often call trauma activations themselves based on information from the field, trauma surgeons say.

Reimbursement for trauma activations is complicated. Insurers don’t always pay a hospital’s trauma fee. Under rules established by Medicare and a committee of insurers and health care providers, emergency departments must give 30 minutes of critical care after a trauma alert to be paid for activating the team. For inpatients, the trauma team fee is sometimes folded into other charges, billing consultants say.

But, on the whole, the increase in the size and frequency of trauma team activation fees, including those for non-admitted patients, has helped turn trauma operations, often formerly a financial drain, into profit centers. In recent years, hundreds of hospitals have sought trauma center designation, which is necessary to bill a trauma activation fee.

“There must have been a consultant that ran around the country and said, ‘Hey hospitals, why don’t you start charging this, because you can,’” said Marc Chapman, founder of Chapman Consulting, which challenges large hospital bills for auto insurers and other payers. “In many of those cases, the patients are never admitted.”

The national number of Level I and Level II trauma centers, able to treat the most badly hurt patients, grew from 305 in 2008 to 567 last year, according to the American College of Surgeons. Hundreds of other hospitals have Level III or Level IV trauma centers, which can treat less severe injuries and also bill for trauma team activation, although often at lower rates.

Emergency surgeons say they walk a narrow path between being too cautious and activating a team unnecessarily (known as “overtriage”) and endangering patients by failing to call a team when severe injuries are not obvious.

Often “we don’t know if patients are seriously injured in the field,” said Dr. Craig Newgard, a professor of emergency medicine at Oregon Health & Science University. “The EMS providers are using the best information they have.”

Too many badly hurt patients still don’t get the care they need from trauma centers and teams, Newgard argues.

“We’re trying to do the greatest good for the greatest number of people from a system perspective, recognizing that it’s basically impossible to get triage right every time,” he said. “You’re going to take some patients to major trauma centers who don’t really end up having serious injury. And it’s going to be a bit more expensive. But the trade-off is optimizing survival.”

At Oregon Health & Science, 24% of patients treated under trauma alerts over 12 months ending this spring were not admitted, Schreiber said.

“If this number gets much lower, you could put patients who need activation at risk if they are not activated,” he said.

On the other hand, rising numbers of trauma centers and fees boost health care costs. The charges are passed on through higher insurance premiums and expenses paid not just by health insurers but also auto insurers, who often are first in line to pay for the care of a crash victim.

Audits are uncommon and often the system is geared to paying claims with little or no scrutiny, billing specialists say. Legal challenges like the one in the Sutter case are extremely rare.

“Most of these insurers, especially auto insurance, do not look at the bill,” said Beth Morgan, CEO of Medical Bill Detectives, a consulting firm that helps insurers challenge hospital charges. “They automatically pay it.”

And trauma activation charges also can hit patients directly.

“Sometimes the insurance companies will not pay for them. So people could get stuck with that bill,” Morgan said.

A few years ago, Zuckerberg San Francisco General Hospital charged a $15,666 trauma response fee to the family of a toddler who had fallen off a hotel bed. He was fine. Treatment was a bottle of formula and a nap. The hospital waived the fee after KHN and Vox wrote about it.

Trauma alert fatigue can add up to a nonfinancial cost for the trauma team itself, McGonigal said.

“Every time that pager goes off, you’re peeling a lot of people away from their jobs only to see [patients] go home an hour or two later,” he said.

“Some trauma centers are running into problems because they run themselves ragged. And there is probably unneeded expense in all the resources that are needed to evaluate and manage those patients.”

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Dying Patients With Rare Diseases Struggle to Get Experimental Therapies

At 15, Autumn Fuernisen is dying. She was diagnosed at age 11 with a rare degenerative brain disorder that has no known cure or way to slow it down: juvenile-onset Huntington’s disease.

“There’s lots of things that she used to be able to do just fine,” said her mom, Londen Tabor, who lives with her daughter in Gillette, Wyoming. Autumn’s speech has become slurred and her cognitive skills slower. She needs help with many tasks, such as writing, showering and dressing, and while she can walk, her balance is off.

Autumn has been turned down for clinical trials because she is too young.

“It is so frustrating to me,” Tabor said. “I would sell my soul to try to get any type [of treatment] to help my daughter.”

For patients like Autumn with serious or immediately life-threatening conditions who do not qualify for clinical trials and have exhausted all treatment options, there may be another option: seeking approval from the Food and Drug Administration for expanded access, or compassionate use, of experimental therapies.

Definitive numbers are hard to find, but studies from researchers, actions by drugmakers and insights from experts suggest that getting expanded access to unproven therapies for rare diseases is more difficult than for more common illnesses, such as cancer.

Even with experimental treatments on the rise, patients with rare diseases frequently face an unwillingness by drug companies to provide them before clinical studies are completed. Developing drugs for these diseases is an especially fragile process because the patient populations are small and often diverse, having different genetics, symptoms and other characteristics, which makes studying the drugs’ effects difficult.

Drugmakers believe offering a drug before studies are finished could impair its development and jeopardize FDA approval.

Companies working on therapies for rare diseases, especially smaller ones, could feel those repercussions acutely, said Lisa Kearns, a researcher in the ethics division of New York University’s medical school and member of the division’s working group on compassionate use and preapproval access. “There’s not as much investment in rare diseases, so an [adverse] event could frighten the already limited number of potential investors.”

Drugs that were not made available for compassionate use last year until studies were completed include Evrysdi, for spinal muscular atrophy; Enspryng, for an autoimmune disease of the optic nerve and spinal cord called neuromyelitis optica spectrum disorder; and Viltepso, for certain patients with Duchenne muscular dystrophy.

A spokesperson for Roche, which makes Evrysdi and Enspryng and is working on a treatment for Huntington’s disease, said the decision was tied not to the type of disease but to company policy: Roche does not set up expanded access programs for any drugs until results are available from a phase 3 clinical trial. (Those phase 3 studies are typically the last testing done before the company seeks drug approval.)

Another company’s experimental drug for myasthenia gravis, an autoimmune disease that leads to skeletal muscle weakness, similarly was not available through an expanded access program until research was completed last year, and no programs have started for a therapy being studied in a phase 3 clinical trial for Huntington’s disease and for amyotrophic lateral sclerosis (ALS), a fatal neurodegenerative disease often referred to as Lou Gehrig’s disease.

One slight, but notable, deviation: Drugmaker Biogen agreed this year to allow certain ALS patients to receive an experimental drug as early as July 15, after the testing was to be completed but before the results are known.

Dr. Merit Cudkowicz, a neurologist at Massachusetts General Hospital in Boston, has helped patients get therapies through expanded access. Since September 2018, she and colleagues launched 10 programs that seek to match people with ALS therapies being developed by drug companies, but only about 120 patients have received therapies this way. More than 16,000 people in the United States were estimated in 2015 to have ALS and most do not qualify for clinical trials because of the progression of their disease or very strict eligibility requirements.

These examples contrast with some drugs for more common problems. Gleevec, for leukemia, was offered to thousands of patients through expanded access programs before the manufacturer completed the clinical studies that led to FDA approval. Videx, for HIV/AIDS, and Iressa, for the most common type of lung cancer, were similarly offered to large numbers of patients even as clinical trials were ongoing.

Last year, Novartis gave more than 7,000 patients worldwide early access to cancer drugs.

Doctors also report that getting experimental drugs for cancer patients is relatively simple. More than 200 physicians around the country were surveyed, and among those who applied for access, nearly 90% said they had secured drugs still being investigated for patients who were not responding to approved therapies.

California researchers found similar trends in a review of 23 social media campaigns launched by patients between 2005 and 2015 seeking a variety of experimental treatments. While seven of the 19 patients with cancer received early access to requested drugs, no access was allowed for three patients with rare diseases, although one of those patients was allowed to enroll in a clinical trial.

Companies base their decisions on whether to provide a therapy through expanded access on a number of factors, said Jess Rabourn, CEO of WideTrial, which helps pharmaceutical companies run compassionate use programs. In general, there should be evidence that patients can tolerate the treatment and an expectation that any benefit outweighs the risk, he said.

“This idea that you have to wait until the research is done is baloney,” he said. “We’re talking about patients who are going to die if they’re told to wait.”

But drugmakers often view it differently, even though evidence suggests that granting early access very rarely disrupts drug approval.

Kearns explained that companies often wait until phase 3, or after, because they can be “relatively” confident of a drug’s safety and effectiveness. “They don’t want to harm patients, of course, but they also do not want to threaten the drug’s eventual regulatory approval with an adverse event in [a] very sick patient population.”

Melissa Hogan, who consults on clinical trials for rare diseases and is an FDA patient representative, attributes the lack of access to the high cost of therapies and the tightknit nature of the rare disease community, where patients and their families often set up social media groups and exchange ideas and treatment plans. Companies “know that if one patient gains access, other patients will know” and ask for access, said Hogan, who has a son with mucopolysaccharidosis type II. That could overwhelm small drugmakers with little manufacturing capacity.

These concerns cause “many companies [to] just throw up their hands and take a hard line of no [expanded access] until they reach approval stage,” said Hogan.

The 2018 Right to Try law offers another option for some patients. Unlike expanded access, the law applies only to requests for medicines — not medical devices — and does not require approval from the FDA or an institutional review board, a committee that reviews and monitors people participating in research for their protection. The legislation, however, doesn’t oblige companies to grant a request.

For Cali Orsulak, expanded access may be her husband’s only option. He was diagnosed with ALS in 2019 at age 43.

“We did our best with the skill level we had to search clinical trials all over Canada and the U.S., and then covid hit and it became increasingly difficult,” said Orsulak, explaining that they live in Canada but seek medical care in the United States. “Now that my husband has progressed, it’s even harder to get into clinical trials.”

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