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These Appalachia Hospitals Made Big Promises to Gain a Monopoly. They’re Failing to Deliver.

JOHNSON CITY, Tenn. — Five years ago, rival hospital companies in this blue-collar corner of Appalachia made a deal. If state lawmakers let them merge, leaving no competitors, the hospitals promised not to gouge prices or cut corners. They agreed to dozens of quality-of-care conditions, spelled out with benchmarks, and to provide hundreds of millions of dollars in charity care to patients in need.

Today, Ballad Health’s 20 hospitals remain the only option for hospital care for most of about 1.1 million residents in a 29-county region at the nexus of Tennessee, Virginia, Kentucky, and North Carolina. But Ballad has not met many of the quality benchmarks nor provided much of the charity, spurring discontent among those with no choice but to rely on Ballad for their care.

Two dozen states, from Florida to Washington, have at some point passed so-called COPA laws that allow hospital systems to merge into monopolies, disregarding warnings from the Federal Trade Commission that such mergers can become difficult to control and may decrease the overall quality of care. In the case of Ballad, the nation’s largest-known COPA deal, public records suggest that is exactly what happened.

Documents released by the Tennessee Department of Health show:

Ballad has not fulfilled the annual charity care obligation it made to Tennessee, falling short by about $148 million over a four-year span. In those same years, Ballad took thousands of patients to court to collect unpaid bills.

Ballad failed to meet about 80% of benchmarks designed to monitor and improve its quality of care — including rates of infection and death — in the most recent year for which data is available. Federal health officials cited some of these same problems this year in issuing one-star ratings to three Ballad hospitals, including a flagship, Johnson City Medical Center.

“The state of Virginia and the state of Tennessee took a chance on [Ballad] to do the right thing,” said Michele Johnson, executive director of the Tennessee Justice Center, a nonprofit focused on health care for the poor. “And they’ve proven that they are not worthy of that chance.”

In a two-hour interview with KFF Health News, Ballad Health CEO Alan Levine defended the merger as “hugely successful” for a region rife with poverty and sickness, saying his company had planted seeds of better health that “you can’t quantify today.” More specifically, Levine said the enormous pressure of the coronavirus pandemic caused Ballad’s slumping quality of care. He attributed charity care shortfalls to Medicaid changes beyond Ballad’s control and new preventive care programs that keep patients out of the hospital so they don’t need charity.

Levine said the Ballad merger had likely prevented at least three hospital closures and kept giant corporations from swooping into Appalachia to buy up the scraps.

“Our critics say, ‘No Ballad. We don’t want Ballad.’ Well, then what?” Levine said. “Because the hospitals were on their way to being closed.”

Ballad is centered in Tennessee and Virginia’s Tri-Cities region, a cluster of hardscrabble towns and wooded foothills that is home to the famous Bristol Motor Speedway and recognized by Congress as “the birthplace of Country Music.” Census data shows the Tri-Cities poverty rate is about 30% higher than the national average, and residents’ general health is below average for the nation and their respective states, according to the BlueCross BlueShield National Health Index.

Ballad launched in 2018 after state officials approved the nation’s largest-known Certificate of Public Advantage, or COPA, agreement, which waived anti-monopoly laws so the region’s only two hospital systems — Mountain States Health Alliance and Wellmont Health System — could merge. To offset the perils of a monopoly, the COPA requires Ballad to agree to increased oversight by the state and a long list of special conditions, including limiting price increases, maintaining quality, and providing charity care. Ballad also committed to investing $308 million over 10 years to improve the health of the region, some of which it has spent on a low-to-no-cost care network for the uninsured and expanded addiction treatment services.

Even with this spending, Ballad has turned a profit. The company generated net income of more than $143 million and $63 million in fiscal years 2022 and 2021, respectively, while receiving $175 million in pandemic relief funds, according to an S&P Global Ratings independent analysis, which excludes items like gains and losses separate from hospital operations.

The merger was profitable for Levine too. His total compensation has nearly doubled to about $4.3 million since the merger, including some deferred retirement payments, according to reports filed with the IRS. Prior to Ballad, Levine worked as a high-level health official in Florida and Louisiana and was an executive at two larger hospital corporations, HCA Healthcare and Health Management Associates. Federal prosecutors accused both companies of widespread health care fraud during some of the years when Levine was one of their leaders, claims the companies denied but later paid hundreds of millions of dollars to settle.

Nationwide, the COPA model is uncommon but gaining momentum. COPAs have been used in about 10 hospital mergers over the past three decades, including two in Texas and one in Louisiana in just the past three years, and another is being proposed in Indiana. Nineteen states have laws on the books allowing for COPAs, although not all have approved a specific merger, and five other states passed COPA laws and later repealed them, according to The Source on HealthCare Price & Competition, a website by the University of California College of the Law-San Francisco.

Rahul Rao, a deputy director of the Bureau of Competition at the Federal Trade Commission, which consistently opposes COPAs, said removing hospital competition leads to predictable results — rising prices, decreasing quality, and monopolies that are very hard to break up.

Rao said the FTC has for years studied how the Ballad merger is affecting health care in the region but that it is not yet ready to publish its findings.

“States should be very wary and distrustful of COPAs in general,” Rao said. “It’s very hard to unscramble the eggs.”

Tennessee began to pave the way for Ballad in 2015 when state Sen. Rusty Crowe (R-Johnson City) co-sponsored a bill allowing for the merger, which was later mirrored in Virginia. Crowe was also working as a contractor for Mountain States Health Alliance when the bill was introduced, and since the merger he has been similarly contracted with Ballad, the lawmaker said.

Tennessee financial disclosure records confirm Crowe was paid by both hospital systems but don’t say how much or for what. Crowe, who did not agree to an interview, said in an email that he was hired to “help in the development of wound care and hyperbaric medicine” and that he “complied with all the Senate ethics code requirements regarding any potential conflict of interest.”

Tennessee and Virginia health officials have concluded annually that the merger remains beneficial to the public and, in reports and interviews, credited Ballad for weathering the pandemic and keeping hospitals open.

Dennis Barry, one of the state monitors hired to keep tabs on Ballad, said he believed Ballad had largely lived up to the agreement, or at least the “intent.” Barry dismissed the FTC’s position that hospital competition is necessarily beneficial and said no one knows how the region would have fared without the merger.

“In a sense, we’ll never be able to determine whether or not this was a good idea or a bad idea,” Barry said. “I view it as an experiment.”

As Ballad fell short of its COPA benchmarks, state officials took steps to relax the oversight of its hospitals, particularly in Tennessee. Both Tennessee and Virginia gave Ballad more time to spend tens of millions to benefit the region, and Tennessee officials have repeatedly waived Ballad’s annual charity care obligation. Tennessee in 2021 stopped publishing a “final score” for Ballad’s adherence to the COPA terms and in 2022 revised COPA rules so Ballad could oppose the opening of competing hospitals or other medical facilities in the region, according to state documents. A local COPA advisory council, created to hear complaints from residents, no longer hosts public hearings.

Ballad Cites Pandemic Amid Quality Decline

Ballad has failed to meet quality-of-care benchmarks established in the COPA agreement in recent years, according to public reports from the Tennessee government and the hospital system itself. For example, a Tennessee report shows that from July 2021 through June 2022, Ballad hospitals fell short of 61 of 75 benchmarks, including some about sepsis, surgery-related infections, emergency room speed, and rates of readmission and death from heart failure.

The Centers for Medicare & Medicaid Services this year issued one-star ratings to three Ballad hospitals, all of which had ratings of at least two stars before the merger. Because CMS calculates star ratings from data collected over several years, the ratings released this year are the first to grade the Ballad hospitals entirely on post-merger data.

Levine, citing arguments similar to those of other hospital leaders, insisted the CMS five-star rating system is broken because it judges hospitals on a sliver of patients and doesn’t account for poor health in the region. He said Ballad fell short of the COPA benchmarks because the coronavirus overwhelmed hospitals and sparked an unprecedented nursing turnover.

But Ballad’s hospitals have since rebounded, Levine said, pointing to partial data on the company website — not yet reported by the states — that appears to show improving performance as of this summer. And Levine said internal data showed Ballad was now tracking with the top 10% of U.S. hospitals on some quality-of-care metrics.

“We went way backwards during covid, no question about it. And now we’ve emerged out of covid,” Levine said. “We’re recovering faster than other people.”

Erik Bodin, a Virginia Department of Health official who oversees the agreement with Ballad, said the pandemic caused quality issues at hospitals across the state, including Ballad’s, which were “not acceptable” but “to some extent understandable.” Bodin said Virginia still has “concerns” and is “watching very closely” because not all of Ballad’s metrics are rebounding.

The Tennessee Department of Health, which has the most robust role in regulating Ballad, declined an interview request and did not answer questions submitted in writing.

Ballad has also cut back on facilities for patients with life-threatening conditions. Citing redundancy with other hospitals, it downgraded the capabilities of trauma centers at Bristol Regional Medical Center and Holston Valley Medical Center and closed the intensive care unit at Sycamore Shoals Hospital. Ballad also shuttered the Holston Valley neonatal ICU. Residents were so angry that protesters gathered outside Holston Valley for eight months.

“I packed a sleeping bag, a backpack, and my laptop bag. I made two signs in my living room,” said Dani Cook, the protest leader and grandmother of a former Holston Valley NICU patient. “And next thing you know, 50 people showed up.”

One month after Holston Valley’s trauma center was downgraded, Jeremiah Shane Fields, 37, died at the hospital from chest injuries sustained in a car crash. According to a CMS investigation report obtained by KFF Health News, Fields’ blood pressure dropped for hours before his death, but his doctor did not come to his bedside as his condition deteriorated.

Holston Valley’s chief medical officer, who is quoted in the report but not named, called the case a “fundamental failure of basic trauma care” in which Fields’ doctor was “not following essential standards,” according to the report. Holston Valley was cited for “deficiencies” that were likely to harm patients, which the hospital immediately corrected, the report states.

Fields’ family has filed an ongoing lawsuit alleging negligent care, and Ballad Health has denied all wrongdoing in court filings. Molly Luton, a spokesperson for Ballad, said that Fields’ death was “an outlier” and “not the result of a systemic issue.”

Fields’ mother, Penny Meade, 59, said she believed the hospital could have done more to save her son.

“It used to be wonderful,” Meade said. “But then everything changed. They took it all away, after that merger.”

‘Helping People’ vs. ‘Coming After Them’

Ballad has fallen short of the annual charity care commitment in the COPA agreement by about $20 million to $48 million each year, according to Tennessee Department of Health documents. The agency waived this obligation each year after it wasn’t met, the documents show.

Charity care comes in two forms: free or discounted care for low-income patients, or the amount left over when Medicaid patients are treated but their entire cost is not covered. Most of Ballad’s charity care is from the second scenario, the documents show.

Ballad said in its annual reports it is unable to meet its charity care obligation because after the COPA was negotiated both Tennessee and Virginia increased their Medicaid reimbursement and Virginia expanded Medicaid to cover more people, leaving fewer people uninsured and in need of charity. (Tennessee has not expanded Medicaid.)

Levine added that Ballad’s new Appalachian Highlands Care Network provides preventive care to uninsured residents.

“We are doing everything we can, for instance, to manage their diabetes so that they don’t end up with a spike and end up in the ER,” Levine said. “That reduces your charity care.”

Some are unconvinced. Chris Garmon, a former FTC economist and a leading expert on COPAs at the University of Missouri-Kansas City, said Ballad had put forth a “strange defense” for its lack of charity care in a state where so many are uninsured.

“Last time I checked, Tennessee had not expanded Medicaid,” Garmon said. “This sounds like Ballad is pushing the envelope, like a toddler, trying to see when their parents will actually institute some discipline.”

As it was falling short of its charity commitment, Ballad filed thousands of debt collection lawsuits against patients in its first two years of operation, according to reporting from The New York Times and Modern Healthcare.

Levine said that Ballad does not sue patients who qualify for charity care and that its lawsuits slowed significantly after it adopted a more generous charity care policy in 2020. Ballad now offers free care to those who live at or below 225% of the federal poverty level, or an income of less than $67,500 for a family of four.

But the company still takes many patients to court. For example, in Tennessee’s Sullivan County, one of the most populous areas in Ballad’s market, the company has filed about 500 lawsuits since enacting the new charity care policy, court records show.

Wendy McClanahan, 44, said Ballad started garnishing her paycheck this summer over a lingering debt from a 2017 surgery. McClanahan said she was unemployed and unable to afford the bill at the time and she believed it was written off until court papers arrived in the mail.

Ballad will take 25% of McClanahan’s paycheck until she has paid off $2,747, court records show. McClanahan said she’s working overtime at her office job to make up for the lost income.

“They’re supposed to be helping people instead of coming after them,” she said. “It’s a lot of money to me, you know, and nothing to them.”

KFF Health News correspondent Bram Sable-Smith contributed to this report.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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New Medicare Advantage Plans Tailor Offerings to Asian Americans, Latinos, and LGBTQ+

As Medicare Advantage continues to gain popularity among seniors, three Southern California companies are pioneering new types of plans that target cultural and ethnic communities with special offerings and native-language practitioners.

Clever Care Health Plan, based in Huntington Beach, and Alignment Health, based in nearby Orange, both have plans aimed at Asian Americans, with extra benefits including coverage for Eastern medicines and treatments such as cupping and tui na massage. Alignment also has an offering targeting Latinos, while Long Beach-based SCAN Health Plan has a product aimed at the LGBTQ+ community. All of them have launched since 2020.

While many Medicare Advantage providers target various communities with their advertising, this trio of companies appear to be among the first in the nation to create plans with provider networks and benefits designed for specific cultural cohorts. Medicare Advantage is typically cheaper than traditional Medicare but generally requires patients to use in-network providers.

“This fits me better,” said Clever Care member Tam Pham, 78, a Vietnamese American from Westminster, California. Speaking to KFF Health News via an interpreter, she said she appreciates the dental care and herbal supplement benefits included in her plan, and especially the access to a Vietnamese-speaking doctor.

“I can always get help when I call, without an interpreter,” she said.

Proponents of these new culturally targeted plans say they can offer not only trusted providers who understand their patients’ unique context and speak their language, but also special products and services designed for their needs. Asian Americans may want coverage for traditional Eastern treatments, while LGBTQ+ patients might be especially concerned with HIV prevention or management, for example.

Health policy researchers note that Medicare Advantage tends to be lucrative for insurers but can be a mixed bag for patients, who often have a limited choice of providers — and that targeted plans would not necessarily solve that problem. Some also worry that the approach could end up being a new vector for discrimination.

“It’s strange to think about commodifying and profiting off people’s racial and ethnic identities,” said Naomi Zewde, an assistant professor at the UCLA Fielding School of Public Health. “We should do so with care and proceed carefully, so as not to be exploitive.”

Still, there’s plenty of evidence that patients can benefit from care that is targeted to their race, ethnicity, or sexual orientation.

A November 2020 study of almost 118,000 patient surveys, published in JAMA Network Open, underscored the need for a connection between physician and patient, finding that patients with the same racial or ethnic background as their physicians are more likely to rate the latter highly. A 2022 survey of 11,500 people around the world by the pharmaceutical company Sanofi showed a legacy of distrust in health care systems among marginalized groups, such as ethnic minorities, LGBTQ+ people, and people with disabilities.

Clever Care, founded by Korean American health care executive Myong Lee, aimed from the start to create Medicare Advantage plans for underserved Asian communities, said Peter Winston, the senior vice president and general manager of community and provider development at the company. “When we started enrollments, we realized there is no one ‘Asian,’ but there is Korean, Chinese, Vietnamese, Filipino, and Japanese,” Winston added.

The company has separate customer service lines by language and gives members flexibility on how and where to spend their allowances for benefits like fitness programs.

Winston said the plan began with 500 members in January 2021 and is now up to 14,000 (still very small compared with mainstream plans). Herbal supplement benefit dollars vary by plan, but more than 200 products traditionally used by Asian clients are on offer, with coverage of up to several hundred dollars per quarter.

Sachin Jain, a physician and the CEO of SCAN Group, said its LGBTQ+ plan serves 600 members.

“This is a group of people who, for much of their lives, lived in the shadows,” Jain added. “There is an opportunity for us as a company to help affirm them, to provide them with a special set of benefits that address unmet needs.”

SCAN has run into bias issues itself, with some of its employees posting hate speech and one longtime provider refusing to participate in the plan, Jain recounted.

Alignment Health offers a plan targeting Asian Americans in six California counties, with benefits such as traditional wellness services, a grocery allowance for Asian stores, nonemergency medical transportation, and even pet care in the event a member has a hospital procedure or emergency and needs to be away from home.

Alignment also has an offering aimed at Latinos, dubbed el Único, in parts of Arizona, Nevada, Texas, Florida, and California. The California product, an HMO co-branded with Rite Aid, is available in six counties, while in Florida and Nevada, it’s a so-called special needs plan for Medicare beneficiaries who also qualify for Medicaid. All offer a Spanish-speaking provider network.

Todd Macaluso, the chief growth officer for Alignment, declined to share specific numbers but said California membership in Harmony — its plan tailored to Asian Americans — and el Único together has grown 80% year over year since 2021.

Alignment’s marketing efforts, which include visiting places where prospective members may shop or socialize, are about more than just signing up customers, Macaluso said.

“Being present there means we can see what works, what’s needed, and build it out. The Medicare-eligible population in Fresno looks very different from one in Ventura.”

“Just having materials in the same language is important, as is identifying the caller and routing them properly,” Macaluso added.

Blacks, Latinos, and Asians overall are significantly more likely than white beneficiaries to choose Medicare Advantage plans, according to recent research conducted for Better Medicare Alliance, a nonprofit funded by health insurers. (Latino people can be of any race or combination of races.) But it’s not clear to what extent that will translate into the growth of targeted networks: Big insurers’ Medicare Advantage marketing efforts often target specific racial or ethnic cohorts, but the plans don’t usually include any special features for those groups.

Utibe Essien, an assistant professor of medicine at UCLA, noted the historical underserving of the Black community, and that the shortage of Black physicians could make it hard to build a targeted offering for that population. Similarly, many parts of the country don’t have a high enough concentration of specific groups to support a dedicated network.

Still, all three companies are optimistic about expansion among groups that haven’t always been treated well by the health care system. “If you treat them with respect, and bring care to them the way they expect it, they will come,” Winston said.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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Who Polices Hospitals Merging Across Markets? States Give Different Answers

St. Louis’ largest health system, BJC HealthCare, plans to merge with Kansas City’s second-largest, Saint Luke’s Health System, uniting more than 28 hospitals on both sides of Missouri by the end of this year.

The merger, which would span markets 250 miles apart and include facilities in neighboring Kansas and Illinois, is just one of the latest in a quickly consolidating hospital industry. Cross-market deals accounted for more than half of all hospital mergers and acquisitions during the last decade, according to a paper from experts on antitrust law. Today, nearly 60% of health systems operate multiple hospitals in different geographic markets.

Not only are such deals more common, they can increase costs for patients. Merged hospitals in the same state but in different markets raised prices as much as 10% compared with other hospitals, researchers found after analyzing past deals. A separate study found stand-alone hospitals raised prices 17% after they were acquired by a hospital company in another market.

But for some 50 years, federal regulators have not stepped in to prevent hospitals from merging with systems in other markets, according to antitrust law experts. Without federal intervention, states that have seen such megamergers, such as Michigan and California, are often left to wrestle with the complex question of how to respond, given the likelihood of higher prices for their residents.

The Federal Trade Commission and the Justice Department are reviewing public comments on draft merger guidelines designed to crack down on mergers in multiple sectors, including health care. It’s not yet clear if or how cross-market hospital mergers within a state could be affected. Still, the draft says consolidation should not “entrench or extend a dominant position” by extending into “new markets.”

But such cross-market mergers aren’t quite a textbook case of a monopoly. When hospitals have bought up local rivals, knocking out their competition, federal regulators have intervened to block these traditional mergers to protect patients from the resulting loss of competition. In recent years, they helped stop proposed mergers in New Jersey, Utah, and Rhode Island. The thinking is that without local competition, prices increase and the quality of care decreases.

It’s harder to prove how cross-market mergers, like the one planned in Missouri, reduce competition if the hospitals do not operate within a single market, said Chris Garmon, an assistant professor at the University of Missouri-Kansas City, who researches hospital mergers. Regulators would have to prove the mergers don’t just raise prices but also run afoul of the law by suppressing competition.

“That’s why we haven’t seen a cross-market merger challenge yet. It’s because it’s hard to tell the story of why this would be a problem,” he said.

The Federal Trade Commission did not answer questions from KFF Health News on its broader strategy around such deals or the BJC-Saint Luke’s merger. Whether an investigation is underway is not public information, said Mitchell Katz, an agency spokesperson.

After the FTC didn’t stop cross-market hospital mergers in California and Michigan, those states landed poles apart in handling the deals. California won concessions after challenging a deal, while Michigan did not intervene.

The FTC did closely examine the 2020 deal in Michigan between Spectrum Health, based in Grand Rapids, and the Detroit area’s Beaumont Health. Still, it ultimately didn’t oppose the marriage that created the state’s largest hospital chain, Corewell Health, with 22 hospitals in regions more than 150 miles apart.

The lack of intervention frustrated some, including Bret Jackson, CEO of the Economic Alliance for Michigan, a nonprofit that helps employers wrangle health costs. Spectrum was already the more expensive operator, said Jackson. He worries Beaumont prices will rise to match Spectrum’s once the insurance contracts with the individual hospital systems expire.

“They’re not going to want to take a pay cut,” Jackson said of Spectrum. “We’re really concerned about it.”

Jackson said that he was already fed up with rising hospital prices and that so are the automotive companies and laborers he represents. Health costs consume about 10% of a typical U.S. family’s income.

Ellen Bristol, a Corewell Health spokesperson, did not address KFF Health News’ questions about patient costs but said that the collaboration is improving quality statewide and creating efficiencies that help the company navigate economic headwinds.

Even though regulators did not step in, FTC staffers and Michigan’s Department of the Attorney General volleyed emails back and forth for months, according to communications obtained by KFF Health News through a public records request from the state.

The FTC asked the attorney general’s office to connect its staffers to employers and state officials, plus provide information and data on the health care landscape in the state, the emails show. The FTC interviewed executives from BorgWarner, an automotive supplier, and CMS Energy, a utility company.

Jackson said he, too, was interviewed by the FTC, which he said was less interested in his thoughts on the deal than in Michigan’s market dynamics.

It’s hard to glean much from the FTC’s assessment of the merger because many of the emails the state supplied to KFF Health News are redacted. But they do illustrate what information and which people the FTC consulted to reach a decision.

The emails also suggest state officials were made aware of the FTC’s findings. On the evening of Jan. 13, 2022, an assistant AG sent a lengthy email to Michigan Attorney General Dana Nessel about the FTC’s review of possible antitrust implications, according to the subject line. In the version provided to KFF Health News, though, the entire email — except for the greeting and the signature — was blacked out.

The next day, other emails show, hospital officials began discussing final language with the AG’s office for a press release announcing the deal would soon close.

Michigan did not move to block the deal or investigate further. Danny Wimmer, a spokesperson for Nessel, a Democrat, said the deal fell outside the authority of her office, further frustrating Jackson, of the Economic Alliance for Michigan.

“We need to give state regulators the tools to at least assess mergers in the health care system,” Jackson said.

Nessel’s position is not the attitude taken in all states. A 2020 merger agreement in California between Huntington Hospital in Pasadena and Cedars-Sinai Health System, with its flagship hospital in Los Angeles, attracted the attention of then-state Attorney General Xavier Becerra, who imposed conditions, such as price caps to protect consumers.

Becerra, a Democrat who is now Health and Human Services secretary, had argued the cross-market merger would lead to higher prices.

Employers relied on having both Cedars-Sinai and Huntington Hospital in their networks to ensure adequate access to all employees scattered across the massive Los Angeles region — with a population larger than that of most states — which California officials said has several distinct markets serving patients. If the two were to combine, employers would have to accept price hikes to maintain access to both entities, according to an analysis the AG’s office commissioned. Health systems can “threaten to create important holes in a health plan’s provider network,” the analysis said, by refusing to include all hospitals, giving the system greater leverage to extract higher prices from the health plan.

Cedars-Sinai and Huntington sued the AG over the conditions imposed on the merger.

Ultimately, the parties settled on revised conditions, which included a 10-year ban on all-or-nothing contracting with insurers and a cap on price increases for five years.

The settlement allowed Cedars-Sinai to expand access while reflecting a shared goal of “keeping healthcare affordable,” said Duke Helfand, a spokesperson for Cedars-Sinai. Still, it was considered a win for antitrust enforcers, with implications that could reverberate across the country, some health economists said.

In Missouri, the key question is whether state officials will intervene. Attorney General Andrew Bailey, a Republican, is reviewing the merger, which requires his office’s approval before it can close, said Madeline Sieren, a spokesperson for the AG.

Neither BJC nor Saint Luke’s answered questions from KFF Health News about potential price increases or plans to improve quality. The hospitals have estimated the merged system will generate annual revenue topping $10 billion.

The Missouri systems ought to explain how this merger will benefit patients by lowering costs and improving quality, Garmon said.

“Whether they actually do them or not depends on whether they actually have the incentive to do them,” Garmon said.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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KFF Health News' 'What the Health?': More Medicaid Messiness

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Julie Rovner KFF Health News @jrovner Read Julie's stories. Julie Rovner is chief Washington correspondent and host of KFF Health News’ weekly health policy news podcast, “What the Health?” A noted expert on health policy issues, Julie is the author of the critically praised reference book “Health Care Politics and Policy A to Z,” now in its third edition.

Federal officials have instructed at least 30 states to reinstate Medicaid and Children’s Health Insurance Program coverage for half a million people, including children, after an errant computer program wrongly determined they were no longer eligible. It’s just the latest hiccup in the yearlong effort to redetermine the eligibility of beneficiaries now that the program’s pandemic-era expansion has expired.

Meanwhile, the federal government is on the verge of a shutdown, as a small band of House Republicans resists even a short-term spending measure to keep the lights on starting Oct. 1. Most of the largest federal health programs, including Medicare, have other sources of funding and would not be dramatically impacted — at least at first. But nearly half of all employees at the Department of Health and Human Services would be furloughed, compromising how just about everything runs there.

This week’s panelists are Julie Rovner of KFF Health News, Rachel Roubein of The Washington Post, Sandhya Raman of CQ Roll Call, and Sarah Karlin-Smith of Pink Sheet.

Panelists

Sarah Karlin-Smith Pink Sheet @SarahKarlin Read Sarah's stories Sandhya Raman CQ Roll Call @SandhyaWrites Read Sandhya's stories Rachel Roubein The Washington Post @rachel_roubein Read Rachel's stories

Among the takeaways from this week’s episode:

Officials in North Carolina announced the state will expand its Medicaid program starting on Dec. 1, granting thousands of low-income residents access to health coverage. With North Carolina’s change, just 10 states remain that have not expanded the program — yet, considering those states have resisted even as the federal government has offered pandemic-era and other incentives, it is unlikely more will follow for the foreseeable future.
The federal government revealed that nearly half a million individuals — including children — in at least 30 states were wrongly stripped of their health coverage under the Medicaid unwinding. The announcement emphasizes the tight-lipped approach state and federal officials have taken to discussing the in-progress effort, though some Democrats in Congress have not been so hesitant to criticize.
The White House is pointing to the possible effects of a government shutdown on health programs, including problems enrolling new patients in clinical trials at the National Institutes of Health and conducting food safety inspections at the FDA.
Americans are grappling with an uptick in covid cases, as the Biden administration announced a new round of free test kits available by mail. But trouble accessing the updated vaccine and questions about masking are illuminating the challenges of responding in the absence of a more organized government effort.
And the Biden administration is angling to address health costs at the executive level. The White House took its first step last week toward banning medical debt from credit scores, as the Federal Trade Commission filed a lawsuit to target private equity’s involvement in health care.
Plus, the White House announced the creation of its first Office of Gun Violence Prevention, headed by Vice President Kamala Harris.

Also this week, Rovner interviews KFF Health News’ Samantha Liss, who reported and wrote the latest KFF Health News-NPR “Bill of the Month,” about a hospital bill that followed a deceased patient’s family for more than a year. If you have an outrageous or infuriating medical bill you’d like to send us, you can do that here.

Plus, for “extra credit,” the panelists suggest health policy stories they read this week they think you should read, too:

Julie Rovner: JAMA Internal Medicine’s “Comparison of Hospital Online Price and Telephone Price for Shoppable Services,” by Merina Thomas, James Flaherty, Jiefei Wang, et al.

Sarah Karlin-Smith: The Los Angeles Times’ “California Workers Who Cut Countertops Are Dying of an Incurable Disease,” by Emily Alpert Reyes and Cindy Carcamo.

Rachel Roubein: KFF Health News’ “A Decades-Long Drop in Teen Births Is Slowing, and Advocates Worry a Reversal Is Coming,” by Catherine Sweeney.

Sandhya Raman: NPR’s “1 in 4 Inmate Deaths Happen in the Same Federal Prison. Why?” by Meg Anderson.

Also mentioned in this week’s episode:

KFF Health News’ “Diagnosis: Debt,” by Noam N. Levey and KFF Health News, NPR, and CBS staff.
The New York Times’ “In Hospitals, Viruses Are Everywhere. Masks Are Not,” by Apoorva Mandavilli.

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To hear all our podcasts, click here.

And subscribe to KFF Health News’ “What the Health?” on Spotify, Apple Podcasts, Pocket Casts, or wherever you listen to podcasts.

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As Covid Infections Rise, Nursing Homes Are Still Waiting for Vaccines

DALLAS CENTER, Iowa — “Covid is not pretty in a nursing home,” said Deb Wityk, a 70-year-old retired massage therapist who lives in one called Spurgeon Manor, in rural Iowa. She twice contracted the disease and is eager to get the newly approved vaccine because she has chronic lymphocytic leukemia, which weakens her immune system.

The Centers for Disease Control and Prevention approved the latest vaccine on Sept. 12, and the new shots became available to the general public within the past week or so. But many nursing homes will not begin inoculations until well into October or even November, though infections among this vulnerable population are rising steeply, to nearly 1%, or 9.7 per 1,000 residents, as of mid-September from a low of 2.2per 1,000 residents in mid-June.

“The distribution of the new covid-19 vaccine is not going well,” said Chad Worz, CEO of the American Society of Consultant Pharmacists. “Older adults in those settings are certainly the most vulnerable and should have been prioritized.”

With the end of the formal public health emergency in May, the federal government stopped purchasing and distributing covid vaccines. That has added complications for operators of nursing homes who have encountered resistance throughout the pandemic in persuading employees and residents to get the shots.

The coronavirus decimated nursing homes during the first two years of the pandemic, killing more than 200,000 residents and staffers. Elizabeth Sobczyk, project director of Moving Needles, a CDC-funded initiative to improve adult immunization rates in long-term care facilities, said without a government agreement to purchase the shots, vaccine manufacturers will make large quantities only once CDC experts have recommended approval.

“Then they need to be FDA inspected — we want safe vaccines — then there is contracting and rollout,” Sobczyk said. “So I completely understand the frustration, but also why the availability wasn’t immediate.”

Even once the shots are available, nursing homes face continuing resistance to the vaccine among nurses and aides. Without state mandates for workers to be vaccinated, most nursing homes are relying on persuasion, and that is often proving difficult.

“People want covid-19 to be in the rearview mirror,” said Leslie Eber, medical director of Orchard Park Health Care Center in Centennial, Colorado. “We’re going to have to remind people more this year that covid-19 is not benign. Maybe it’s a cold for some people, but it’s not going to be a cold for the folks I care for.”

Sixty-two percent of nursing home residents are up to date on their vaccines, meaning they received the second booster available before this month’s new shot. That’s an improvement over the 38% rate at the start of October 2022, according to the most recent federal data as of mid-September.

But only 25% of nursing home employees are up to date, which is close to last October’s rate.

In a written statement, the Department of Health and Human Services said that it will be identifying long-term care facilities with low vaccination rates and reaching out to ensure “proven infection prevention and control measures are being implemented to protect seniors.”This year, more nurses and aides will have to obtain shots at drugstores or health centers, on their personal time rather than at work. Many homes run clinics, with their long-term care pharmacies supplying the vaccine as they did before, but face extra bureaucratic hassles in billing insurers for the vaccine for both residents and employees.

On top of that, homes are rolling out a new vaccine for a dangerous respiratory virus, RSV, which will be a third shot for many residents along with vaccines for covid and the flu.

The trio of vaccines will create more administrative complexity for nursing homes since this year they must bill Medicare to be reimbursed for the shots. The covid vaccine should be charged to Medicare Part B, which covers outpatient and physicians’ services, but the RSV vaccine must be billed to Medicare Part D, the prescription drug benefit.

“The United States has been phenomenal in screwing up vaccinations,” said David Nace, chief medical officer of UPMC Senior Communities in Pittsburgh. “This idea that some are under Part B and some are under Part D and some can be billed by a pharmacy — who in God’s name came up with this?”

While Medicare will pay for vaccines for most nursing home residents, employees may face private insurance red tape and, for a small group, potential out-of-pocket costs.

Leslie Frane, an executive vice president of the Service Employees International Union, which represents more than 134,000 workers in 1,465 nursing homes, said that many homes had stopped running clinics in their facilities and told workers to go to the drugstore to get vaccinated. She said this would lead to more workers skipping their shots.

“There’s very little time, given how many nursing home workers work multiple jobs,” she said.

The CDC has arranged for 25 million to 30 million people lacking health insurance or whose insurance doesn’t cover the complete cost of the vaccine to get free covid shots at select pharmacies, health centers, and medical offices listed at vaccines.gov. Frane said that program is not well known among workers, and Worz said distribution is favoring the large pharmacy chains, slowing access in rural communities. Of the nation’s 19,400 independent pharmacies, federal officials said 627, many in rural areas, are enrolled in the program and 100 are being added.

A big obstacle, though, continues to be resistance to the vaccination among nurses and aides. Like many facility owners, Avalon Health Care Group, which owns or operates more than a dozen nursing homes in Western states, is not mandating staff be vaccinated. Sabine von Preyss-Friedman, Avalon’s chief medical officer, said she tries to address the reasons with each worker and won’t abandon the push.

“We’re not going to just say, ‘OK, everyone get vaccinated’ and then forget it about,” she said.

Avalon’s homes have used modest financial incentives, such as organizing contests between different units, with the winner getting prizes like a pizza party or a drawing for a gift certificate from a department store, and those efforts will resume this year.

Jim Wright, medical director of Our Lady of Hope Health Center and two other nursing homes in Richmond, Virginia, said that rewards and respectful persuasion were not enough to sway his homes’ employees. They tend to be in their 20s and 30s and are not worried about catching covid, which many of them have already weathered.

“They most likely will not do it to protect the residents or protect themselves,” he said. “I don’t know what the answer is.”

Sheena Bumpas, a certified nursing assistant in Duncan, Oklahoma, and vice chair of the National Association of Health Care Assistants, plans on getting this season’s shot but said some of her colleagues won’t.

“Now that the public health emergency has ended, I think people are done with it,” she said.

Edenwald Senior Living, a nursing home within a retirement community in Towson, Maryland, is requiring its workers to be vaccinated unless they can justify an exemption for medical or religious reasons.

As of Sept. 10, about three-fourths of the home’s workers were up to date with their previous covid vaccines, which is triple the national rate for nursing home employees, according to federal records.

Edenwald is relying on the Giant supermarket pharmacy to administer the shots in the auditorium of its independent living section. Sign-up sheets have already been distributed for clinics later this month. The home is billing workers’ insurance for the shots, but facility managers said it will pay for employers without health coverage.

“This is our seventh clinic for covid,” said Meghan Curtis, Edenwald’s director of care management. “We’ve kind of got it down pat.”

Swati Gaur, medical director of three nursing homes affiliated with Northeast Georgia Health System, said leaders may offer recalcitrant employees the option to take the Novavax vaccine. It relies on more traditional virus-blocking technology than the Moderna or Pfizer shots that use messenger RNA.

“We are basically saying, ‘Why are you not taking the vaccine? Have you thought about Novavax? It’s manufactured like the flu vaccine,’” Gaur said.

For the first time, nursing home residents will be offered a vaccine for respiratory syncytial virus, or RSV. The virus causes the hospitalizations of as many as 160,000 people 65 and older each year, killing up to 10,000. Most nursing homes are coupling the flu vaccine with either the covid vaccine or the RSV vaccine, but not attempting to give all three simultaneously.

Gaur said because of the novelty of the vaccine and the relative unfamiliarity with RSV, clinicians will need to spend more time explaining the reason for the shots.

In Dallas Center, Iowa, Spurgeon Manor, an independent nonprofit home, is partnering with the pharmacy from a nearby Hy-Vee grocery store to provide the covid shot, most likely in early October, to 85 residents of the nursing home and an adjoining assisted living center as well as employees.

Alana Marean, Spurgeon’s assistant director of nursing, said workers will be encouraged to receive the shots, but she guessed that not even half would do so. “There’s a lot of stigma out there about it,” she said.

Resident Lee Giese, 95, a retired truck driver, said he’s looking forward to the latest shot after coming down with covid last winter. He suspects his earlier vaccinations helped protect him from more serious symptoms.

He expects most residents of his facility will get the shots, but a few will refuse. “Some people have a death wish,” he said.

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Florida Foster Kids Are Given Powerful Medications, but Feds Find State Oversight Lacking

The powerful anti-seizure drug the 5-year-old boy had been taking for more than a year made him “almost catatonic,” his new foster mom from Florida’s Pinellas County worried.

And there was no paperwork showing that the boy’s biological mother or a judge had authorized the psychotropic medication, Keppra, as required by state law.

“I was caught between a rock and a hard spot,” she said. “You can’t just stop that cold turkey.”

The child’s medical records showed he had seizures only when he had a fever, suggesting he was not epileptic. The foster mom asked the boy’s neurologist if they could wean him off the drug.

He has not had a seizure since.

The account from the foster mother was confirmed by the boy’s biological mother, who said she was not asked nor would she have consented to put him on the anti-seizure drug. The Tampa Bay Times and KFF Health News are not using their names to protect the identity of the boy, who is still in foster care.

The use of powerful psychotropic and opioid medications in Florida’s child welfare system is supposed to be strictly regulated and documented.

But a federal audit of 115 records of children prescribed those medications selected at random by the U.S. Department of Health and Human Services found lax record-keeping and multiple cases of child welfare workers failing to follow Florida regulations on psychotropic or opioid medication.

Federal audits in Indiana, Michigan, and Ohio also uncovered inadequate oversight of the use of psychotropic drugs among foster kids. In Maryland, the American Civil Liberties Union and other nonprofits filed a class-action lawsuit accusing the state of not maintaining medical records. The suit says as many as 34% of the state’s foster children are given psychotropic drugs but that most of them don’t have a documented psychiatric diagnosis.

Child advocates fear such examples reflect a national failure to closely monitor the use of drugs among a vulnerable population already more likely to be on medication than other children.

“We shouldn’t have to have a tragedy to make sure the system is paying attention,” said Robin Rosenberg, deputy director of Florida’s Children First, a nonprofit that advocates for kids in foster care.

Medication Records Missing

More than 2,200 foster children in Florida — roughly 1 in 10 of the state’s foster care population — are given medication typically prescribed for mental health disorders such as schizophrenia, depression, bipolar disorder, and attention-deficit/hyperactivity disorder, state reports show.

That includes 73 children age 5 and younger. Among foster children 13 and older, the rate is almost 1 in 3, more than double the rate among similarly aged children in the general population.

But in close to half the cases, auditors found no records of the psychotropic medications prescribed in the case file in the state’s primary case management system.

Logs that record the frequency and dosage of — and any adverse reactions to — psychotropic medication were missing from 66% of case files reviewed, and authorization records were not found in more than one-third of the case files.

Documentation of the use of opioids was even more lax, with no record of what medication was prescribed in nearly every case reviewed.

The high turnover of case managers in foster care means accurate paperwork is critical, Rosenberg said. Foster children, especially teenagers, often move between different foster families and group homes, which can mean they may be treated by doctors who know little about their medical histories.

That raises the risk of overdoses or dangerous drug interactions, Rosenberg said.

The FDA in 2016 warned that the wrong combination of opioids and psychotropics can result in “serious side effects, including slowed or difficult breathing and death.”

“Doctors need to have correct information to make the best decisions for children,” Rosenberg said.

‘Health and Safety May Have Been at Risk’

In response to the audit findings, the Florida Department of Children and Families is looking at more streamlined ways for records to be uploaded into the state’s child welfare system, said spokesperson Miguel Nevarez. It also plans to enhance its monitoring and is looking to use other sources of data to cross-check the information in case files.

In Florida’s privatized system, the Department of Children and Families contracts with local nonprofits to run the state’s foster care system in 20 distinct districts. The department has an oversight role.

“We will hold the lead agencies responsible for the work they are contracted to do and ensure that they adhere to Department policies,” Nevarez said in an email.

Children with mental disorders are often prescribed a combination of medications, including antidepressants, stimulants, antipsychotics, anti-convulsants, lithium, and sedative hypnotics. In foster care, the cost is covered by Medicaid in most cases.

Florida’s child welfare system has long required strict record-keeping for such drugs. Lawmakers added safeguards after a 7-year-old foster child named Gabriel Myers died by suicide in 2009. At the time of his death, Gabriel had been prescribed two psychotropic medications.

Physicians or psychiatric nurses prescribing medication must complete a medical report and attempt to obtain consent from the child’s parent or legal guardian. When parents cannot be reached or their parental rights have been terminated, the foster care agency must submit the medical report to a court for authorization.

Case managers are required to document the use of medication, including the prescription name, quantity, number of refills, and dosage, and record it in the state’s primary record system within three business days. Every time a child is given a pill or experiences side effects, it should be recorded on a medication log by the child’s caregiver, according to the Florida Administrative Code. Case managers are required to obtain the logs at each home visit and add them to the child’s case file.

But that was not happening consistently, the federal review found. One child who was prescribed stimulants and antidepressants had no record of them in their case file. Other case files had records of some prescribed drugs, but not all.

In another example, medication logs were missing for a child prescribed antipsychotic and anti-anxiety drugs. When asked by federal auditors to provide them using supporting paperwork, the foster care agency could not find any, the report said.

The state relies on these records to flag cases it may need to oversee for psychotropic medication use. When missing, those children’s cases were not monitored, the audit found.

Another concern for auditors was that the Department of Children and Families did not have access to all the state’s Medicaid data that federal auditors used to cross-check case files, meaning it had no way to ensure authorizations were on file.

Also, the training curriculum for child protective investigators and case managers did not specifically address the requirements for maintaining medication logs in the children’s case files, auditors found.

“The State agency could not ensure that children in foster care received the necessary monitoring and care. As a result, the children’s quality of care and health and safety may have been at risk,” the report states.

The Department of Children and Families is working to obtain Medicaid claims data for all children in foster care, Nevarez, the agency spokesperson, said.

The Challenge of Getting the Right Care

The review did not look at whether the use of psychotropic or opioid medication was justified. But the lack of oversight has brought renewed scrutiny to the higher rates of medication use in the child welfare system.

Marlene Bloom, a Tampa psychologist who has worked with foster children for 25 years, said it makes sense that a higher proportion of foster kids would need medication.The children of parents with mental health disorders are more likely to be in foster care and some disorders are genetic, she said.

But she also sees children on medication whose main issue is trauma, either from their home situation or from being removed from their families.

Among foster families, Bloom said, she doesn’t see as much resistance to giving kids medication as she does from the parents of her private clients. They also don’t push to get kids off the drugs as quickly as possible.

“In foster care, if it’s the difference between literally having no placement, or some medication that may not be necessary but does help you to maintain a placement, what’s the right thing to do?” she said.

Jenn Petion, CEO of Family Support Services, a nonprofit that serves as the lead foster care agency in Jacksonville and parts of Tampa Bay, said the additional paperwork required to get medication prescribed in the child welfare system can make it harder to give foster kids the same mental health care that is available to other children.

But for some families, the concern is not about lack of care — but about improper care. Dunedin resident Giselle Espinet said she believes her adopted daughter was overmedicated while in Florida’s foster care system. A former high school teacher, Espinet reached out to the foster care system four years ago hoping to adopt a teenager.

She was matched with Liliana, then 14, and attended two get-to-know-you meetings. But Espinet was not allowed to review Liliana’s disclosure file, including her medical history, until she agreed to move forward with the adoption.

Liliana regularly showed aggressive behaviors, which had led to her removal from some foster homes and schools.

She had been diagnosed with bipolar disorder and was taking 1,200 milligrams of lithium a day, the maximum recommended daily dose for children 12 and up, according to the Mayo Clinic.

Even with the medication, Liliana was unhappy and struggling. Espinet paid $1,500 out of her own pocket for a neuropsychiatric evaluation.

It found signs of ADHD and mild post-traumatic stress disorder but no evidence of bipolar disorder, she said.

A new psychiatrist weaned Liliana off the drug. She still needs other medications but is back at school and pushing to graduate. She is happier and making friends, Espinet said.

“My child is a completely different person from the one I met four years ago,” she said. “For the first time, she feels like her brain isn’t wrapped up in rubber bands.”

This article was produced in partnership with the Tampa Bay Times.

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Massive Kaiser Permanente Strike Looms as Talks Head to the Wire

Kaiser Permanente and union representatives pledged to continue negotiating a new contract up until the last minute as the threat of the nation’s latest large-scale strike looms next month.

Unless a deal is struck, more than 75,000 health workers will walk out for three days from Oct. 4-7, disrupting care for KP patients in California, Colorado, Oregon, Virginia, Washington, and Washington, D.C. The unions represent a wide range of KP health workers, including lab technicians, phlebotomists, pharmacists, optometrists, social workers, orderlies, and support staff.

A strike, if it occurs, would affect most of Kaiser Permanente’s 39 hospitals and 622 medical offices across the U.S., and would disrupt care for many of its nearly 13 million patients. If workers walk off their jobs, “it will start to impact patient care right away,” said John August, director of health care and partner programs at Cornell University’s Scheinman Institute on Conflict Resolution, who is a former head of the union coalition currently negotiating with KP.

“You are immediately subject to problems with not being able to get patients in and out of the hospital. You risk problems with infection control. You’re not going to get meals,” August said.

Arlene Peasnall, Kaiser Permanente’s senior vice president for human resources, said the Oakland, California-based health care giant’s goal is “to reach a mutually beneficial agreement before any work stoppage occurs.” But she also said the nonprofit has plans in place to blunt the impact of a walkout.

“We will be bargaining with Kaiser up until the day we go on strike,” said Caroline Lucas, executive director of the Coalition of Kaiser Permanente Unions, which represents about 40% of KP’s workforce. “Our front-line health care workers are fed up, and we really need Kaiser executives to seize the initiative and move forward on resolving the contract.”

The current contract expires Sept. 30 and, after months of talks, the two sides still disagree over pay and staffing. The coalition wants a $25-an-hour minimum wage across the company. KP executives agree there should be an organization-wide floor, but they’ve proposed $21.

KP prefers varying wage increases across regions, since the cost of living can vary sharply. The coalition, which is pushing for uniform wage increases across all regions, contends that management’s proposal is part of a “divide-and-conquer strategy.” Peasnall said the union’s stance “would prevent us from addressing fair market wages where we need to pay more to attract and retain the best people.”

The unions say their lowest-paid workers can barely make ends meet in the face of soaring prices for food, gasoline, and other essentials. And, they say, KP hospitals and clinics are severely understaffed, forcing workers to put in long hours and fill multiple roles. They argue that management is not moving quickly enough to fill positions and that the quality of care has suffered as patients, some with serious illnesses, often wait months for appointments, face extremely long waits in the emergency room, and experience delays in hospital admissions.

An industrywide labor shortage hangs heavily over the contract talks. The pandemic was particularly brutal for health care workers who often worked long hours in grueling conditions, as colleagues fell ill, died, or quit. Workers say many of the positions that became vacant during the pandemic still have not been filled.

Miriam De La Paz, a secretary in the labor and delivery department of KP’s Downey Medical Center in Southern California and a union steward, said when she is alone on a shift, she is responsible for two labor and delivery stations as well as triage, where patients are prioritized based on the acuity of their cases.

“Imagine if I’m putting this baby in the system and your wife shows up in pain, crying, but I’m not there to register her,” De La Paz said. “I can’t break myself in two.”

Unions want KP to invest more in education, training, and recruitment to fill current openings and create a pipeline of future workers. KP says it is doing so.

Peasnall said KP has already filled more than 9,700 out of 10,000 new coalition-represented jobs the two sides had agreed to create this year. And she said KP’s turnover rate is one-third the industry rate, in part because of “excellent pay and benefits.”

Earlier this month, California lawmakers passed legislation to gradually raise the minimum wage for health care workers in the state to $25 an hour. If Democratic Gov. Gavin Newsom signs the bill into law, KP will have to comply. And nearly 80% of workers represented by the coalition in the current contract talks are in California.

On Sept. 22, as bargaining continued in San Francisco, the unions announced that more than 75,000 of the 85,000 workers they represent would stage the three-day walkout if there’s no deal. Federal law requires 10 days’ notice of strikes at health care facilities. The coalition said it is “prepared to engage in another longer, stronger strike in November,” if no agreement is reached by then.

A coalition spokesperson, Betsy Twitchell, said workers would welcome the Biden administration’s involvement in the talks “because of the importance of these negotiations to millions of patients and 75,000 frontline healthcare workers.”

The unions say KP can afford to be more generous, citing its robust financial health.

Although KP reported a net loss of almost $4.5 billion in 2022, it generated a cumulative net income of nearly $22 billion over the three preceding years — both results driven largely by investment performance. In the first half of this year, KP posted profits of over $3 billion. And it is in a strong position to manage its debt, according to a report earlier this year by Fitch Ratings.

The unions note that Kaiser Permanente’s CEO, Greg Adams, received almost $16 million in compensation in 2021 and that dozens of others in KP management made more than $1 million, according to a KP filing with the IRS.

Peasnall said the compensation of KP’s senior management is less than that of their peers at other health care companies.

A KP walkout would be the latest in a string of worker movements. Strikes have hit Hollywood, hotels, auto manufacturers, and other industries. Public approval of unions is at a nearly 60-year high, according to a Gallup Poll released in August 2022.

Health workers are increasingly engaged, too. Several hospital groups have been hit by strikes, including Cedars-Sinai Medical Center in Los Angeles and numerous facilities belonging to Sutter Health in Northern California, as well as health care organizations in other states.

“There is an atmosphere in the country: It’s labor summer, it’s strike summer, it’s all that,” August said. “That definitely has an influence on union leadership that says, ‘We need to be a part of that.’”

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Biden Administration to Ban Medical Debt From Americans’ Credit Scores

The Biden administration announced a major initiative to protect Americans from medical debt on Thursday, outlining plans to develop federal rules barring unpaid medical bills from affecting patients’ credit scores.

The regulations, if enacted, would potentially help tens of millions of people who have medical debt on their credit reports, eliminating information that can depress consumers’ scores and make it harder for many to get a job, rent an apartment, or secure a car loan.

New rules would also represent one of the most significant federal actions to tackle medical debt, a problem that burdens about 100 million people and forces legions to take on extra work, give up their homes, and ration food and other essentials, a KFF Health News-NPR investigation found.

“No one in this country should have to go into debt to get the quality health care they need,” said Vice President Kamala Harris, who announced the new moves along with Rohit Chopra, head of the Consumer Financial Protection Bureau, or CFPB. The agency will be charged with developing the new rules.

“These measures will improve the credit scores of millions of Americans so that they will better be able to invest in their future,” Harris said.

Enacting new regulations can be a lengthy process. Administration officials said Thursday that the new rules would be developed next year.

Such an aggressive step to restrict credit reporting and debt collection by hospitals and other medical providers will also almost certainly stir industry opposition.

At the same time, the Consumer Financial Protection Bureau, which was formed in response to the 2008 financial crisis, is under fire from Republicans, and its future may be jeopardized by a case before the Supreme Court, whose conservative majority has been chipping away at federal regulatory powers.

But the move by the Biden administration drew strong praise from patients’ and consumer groups, many of whom have been pushing for years for the federal government to strengthen protections against medical debt.

“This is an important milestone in our collective efforts and will provide immediate relief to people that have unfairly had their credit impacted simply because they got sick,” said Emily Stewart, executive director of Community Catalyst, a Boston nonprofit that has helped lead national medical debt efforts.

Credit reporting, a threat designed to induce patients to pay their bills, is the most common collection tactic used by hospitals, a KFF Health News analysis has shown.

“Negative credit reporting is one of the biggest pain points for patients with medical debt,” said Chi Chi Wu, a senior attorney at the National Consumer Law Center. “When we hear from consumers about medical debt, they often talk about the devastating consequences that bad credit from medical debts has had on their financial lives.”

Although a single black mark on a credit score may not have a huge effect for some people, the impact can be devastating for those with large unpaid medical bills. There is growing evidence, for example, that credit scores depressed by medical debt can threaten people’s access to housing and fuel homelessness in many communities.

At the same time, CFPB researchers have found that medical debt — unlike other kinds of debt — does not accurately predict a consumer’s creditworthiness, calling into question how useful it is on a credit report.

The three largest credit agencies — Equifax, Experian, and TransUnion — said they would stop including some medical debt on credit reports as of last year. The excluded debts included paid-off bills and those less than $500.

But the agencies’ voluntary actions left out millions of patients with bigger medical bills on their credit reports. And many consumer and patient advocates called for more action.

The National Consumer Law Center, Community Catalyst, and some 50 other groups in March sent letters to the CFPB and IRS urging stronger federal action to rein in hospital debt collection.

State leaders also have taken steps to expand consumer protections. In June, Colorado enacted a trailblazing bill that prohibits medical debt from being included on residents’ credit reports or factored into their credit scores.

Many groups have urged the federal government to bar tax-exempt hospitals from selling patient debt or denying medical care to people with past-due bills, practices that remain widespread across the U.S., KFF Health News found.

Hospital leaders and representatives of the debt collection industry have warned that such restrictions on the ability of medical providers to get their bills paid may have unintended consequences, such as prompting more hospitals and physicians to require upfront payment before delivering care.

Looser credit requirements could also make it easier for consumers who can’t handle more debt to get loans they might not be able to pay off, others have warned.

“It is unfortunate that the CFPB and the White House are not considering the host of consequences that will result if medical providers are singled out in their billing, compared to other professions or industries,” said Scott Purcell, chief executive of ACA International, the collection industry’s leading trade association.

About This Project

“Diagnosis: Debt” is a reporting partnership between KFF Health News and NPR exploring the scale, impact, and causes of medical debt in America.

The series draws on original polling by KFF, court records, federal data on hospital finances, contracts obtained through public records requests, data on international health systems, and a yearlong investigation into the financial assistance and collection policies of more than 500 hospitals across the country.

Additional research was conducted by the Urban Institute, which analyzed credit bureau and other demographic data on poverty, race, and health status for KFF Health News to explore where medical debt is concentrated in the U.S. and what factors are associated with high debt levels.

The JPMorgan Chase Institute analyzed records from a sampling of Chase credit card holders to look at how customers’ balances may be affected by major medical expenses. And the CED Project, a Denver nonprofit, worked with KFF Health News on a survey of its clients to explore links between medical debt and housing instability.

KFF Health News journalists worked with KFF public opinion researchers to design and analyze the “KFF Health Care Debt Survey.” The survey was conducted Feb. 25 through March 20, 2022, online and via telephone, in English and Spanish, among a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current health care debt and 382 adults who had health care debt in the past five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.

Reporters from KFF Health News and NPR also conducted hundreds of interviews with patients across the country; spoke with physicians, health industry leaders, consumer advocates, debt lawyers, and researchers; and reviewed scores of studies and surveys about medical debt.

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KFF Health News' 'What the Health?': Countdown to Shutdown

The Host

Health and other federal programs are at risk of shutting down, at least temporarily, as Congress races toward the Oct. 1 start of the fiscal year without having passed any of its 12 annual appropriations bills. A small band of conservative House Republicans are refusing to approve spending bills unless domestic spending is cut beyond levels agreed to in May.

Meanwhile, former President Donald Trump roils the GOP presidential primary field by vowing to please both sides in the divisive abortion debate.

This week’s panelists are Julie Rovner of KFF Health News, Alice Miranda Ollstein of Politico, Rachel Cohrs of Stat News, and Tami Luhby of CNN.

Panelists

Alice Miranda Ollstein Politico @AliceOllstein Read Alice's stories Rachel Cohrs Stat News @rachelcohrs Read Rachel's stories Tami Luhby CNN @Luhby Read Tami's stories

Among the takeaways from this week’s episode:

The odds of a government shutdown over spending levels are rising. While entitlement programs like Medicare would be largely spared, past shutdowns have shown that closing the federal government hobbles things Americans rely on, like food safety inspections and air travel.
In Congress, the discord isn’t limited to spending bills. A House bill to increase price transparency in health care melted down before a vote this week, demonstrating again how hard it is to take on the hospital industry. Legislation on how pharmacy benefit managers operate is also in disarray, though its projected government savings means it could resurface as part of a spending deal before the end of the year.
On the Senate side, legislation intended to strengthen primary care is teetering under Bernie Sanders’ stewardship — in large part over questions about how to pay for it. Also, this week Democrats broke Alabama Republican Sen. Tommy Tuberville’s abortion-related blockade of military promotions (kind of), going around him procedurally to confirm the new chair of the Joint Chiefs of Staff.
And some Republicans are breaking with abortion opponents and mobilizing in support of legislation to renew the United States President’s Emergency Plan for AIDS Relief — including the former president who spearheaded the program, George W. Bush. Meanwhile, polling shows President Joe Biden is struggling to claim credit for the new Medicare drug negotiation program.
And speaking of past presidents, former President Donald Trump gave NBC an interview over the weekend in which he offered a muddled stance on abortion. Vowing to settle the long, inflamed debate over the procedure — among other things — Trump’s comments were strikingly general election-focused for someone who has yet to win his party’s nomination.

Plus, for “extra credit,” the panelists suggest health policy stories they read this week that they think you should read, too:

Julie Rovner: The Washington Post’s “Inside the Gold Rush to Sell Cheaper Imitations of Ozempic,” by Daniel Gilbert.

Alice Miranda Ollstein: Politico’s “The Anti-Vaccine Movement Is on the Rise. The White House Is at a Loss Over What to Do About It,” by Adam Cancryn.

Rachel Cohrs: KFF Health News’ “Save Billions or Stick With Humira? Drug Brokers Steer Americans to the Costly Choice,” by Arthur Allen.

Tami Luhby: CNN’s “Supply and Insurance Issues Snarl Fall Covid-19 Vaccine Campaign for Some,” by Brenda Goodman.

Also mentioned in this week’s episode:

The AP’s “Biden’s Medicare Price Negotiation Is Broadly Popular. But He’s Not Getting Much Credit,” by Seung Min Kim and Linley Sanders.
Roll Call’s “Sanders, Marshall Reach Deal on Health Programs, but Challenges Remain,” by Jessie Hellmann and Lauren Clason.

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Francis Ying Audio producer Emmarie Huetteman Editor

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Hep C’s Number Comes Up: Can Biden’s 5-Year Plan Eliminate the Longtime Scourge?

Rick Jaenisch went through treatment six times before his hepatitis C was cured in 2017. Each time his doctors recommended a different combination of drugs, his insurer denied the initial request before eventually approving it. This sometimes delayed his care for months, even after he developed end-stage liver disease and was awaiting a liver transplant.

“At that point, treatment should be very easy to access,” said Jaenisch, now 37 and the director of outreach and education at Open Biopharma Research and Training Institute, a nonprofit group in Carlsbad, California. “I’m the person that treatment should be ideal for.”

But it was never easy. Jaenisch was diagnosed in 1999 at age 12, after his dad took him to a San Diego hospital because Jaenisch showed him that his urine was brown, a sign there was blood in it. Doctors determined that he likely got the disease at birth from his mom, a former dental surgical assistant who learned she had the virus only after her son’s diagnosis.

People infected with the viral disease, which is typically passed through blood contact, are often outwardly fine for years. An estimated 40% of the more than 2 million people in the U.S. who are infected don’t even know they have it, while the virus may quietly be damaging their liver, causing scarring, liver failure, or liver cancer.

With several highly effective, lower-cost treatments now on the market, one might expect that nearly everyone who knows they have hepatitis C would get cured. But a study from the Centers for Disease Control and Prevention published in June found that is far from the case. A proposal by the Biden administration to eliminate the disease in five years aims to change that.

Overall, the agency’s analysis found, during the decade after the introduction of the new antiviral treatments, only about a third of the people with an initial hepatitis C diagnosis cleared the virus, either through treatment or the virus resolving on its own. Most infected people had health insurance of some kind, whether Medicare, Medicaid, or commercial coverage. But even among commercially insured patients, who were most likely to receive treatment, only half of those age 60 or older had viral clearance by the end of the study period in 2022.

“Unlike HIV, where you have it for the rest of your life, with hepatitis C it’s a very short time frame, just eight to 12 weeks, and you’re cured,” said Carl Schmid, executive director of the HIV+Hepatitis Policy Institute. “So why aren’t we doing a better job?”

Experts point to several roadblocks that infected people encounter. When the new treatments were introduced, cost was a huge factor. Private plans and state Medicaid programs limited spending on the pricey drugs by making them tougher to get, imposing prior authorization requirements, restricting access to people whose livers were already damaged, or requiring patients to abstain from drug use to qualify, among other restrictions.

By the time Jaenisch’s case was cured at age 31, the landscape of hepatitis C treatment had changed dramatically. A groundbreaking, once-a-day pill was introduced in 2013, replacing a grueling regimen of weekly interferon injections that had uncertain success rates and punishing side effects. The first of these “direct-acting antivirals” treated the disease in eight to 12 weeks, with few side effects and cure rates exceeding 95%. As more drugs were approved, the initial eye-popping $84,000 price tag for a course of treatment has gradually dropped to about $20,000.

As drug prices have declined, and under pressure from advocates and public health experts, many states have eliminated some of those barriers that have made it difficult to get approved for treatment.

Still more barriers exist that have little to do with the price of the drug.

Ronni Marks, a former hepatitis C patient, advocates for patients who often fall through the cracks. These include rural residents and those who are uninsured, transgender people, or injection drug users. An estimated 13% of people who pass through U.S. jails and prisons each year have a chronic hepatitis C infection, but access to care there is scant.

Marks said that many disadvantaged people need help getting services. “In many cases they have no way to travel, or they’re not in a situation where they can get to testing,” she said.

Unlike the federal Ryan White HIV/AIDS Program, which for more than 30 years has provided grants to cities, states, and community-based groups to provide medication, treatment, and follow-up care for people with HIV, there’s no coordinated, comprehensive program for patients with hepatitis C.

“In a perfect world, that would have been a good model to replicate,” said Sonia Canzater, the senior project director of the infectious diseases initiative at Georgetown’s O’Neill Institute for National and Global Health Law. “That’s probably never going to happen. The closest thing we can hope for is this national plan, to systemically provide access so that people aren’t beholden to the policies in their states.”

The national plan Canzater is referring to is a $12.3 billion, five-year initiative to eliminate hepatitis C that was included in President Joe Biden’s fiscal year 2024 budget proposal. Former National Institutes of Health director Francis Collins is spearheading the initiative for the Biden administration.

The program would:

Speed up the approval of point-of-care diagnostic tests, allowing patients to be screened and begin treatment in a single visit, rather than the current multistep process.
Improve access to medications for vulnerable groups such as people who are uninsured, incarcerated, part of the Medicaid program, or members of American Indian and Alaska Native populations by using a subscription model. Known as the Netflix model, this approach enables the government to negotiate a set fee with drug companies that would cover treatment for all the individuals in those groups that need it.
Build the public health infrastructure to educate, identify, and treat people who have hepatitis C, including supporting universal screening; expanded testing, provider training, and additional support for care coordination; and linking people to services.

“This is both about compassion and good financial sense,” Collins said, pointing to an analysis by Harvard researchers projecting that the program would avert 24,000 deaths and save $18.1 billion in health spending over 10 years.

Collins said legislation to implement the Biden plan, currently in draft form, was expected to be introduced now that Congress has reconvened after its summer recess. The Congressional Budget Office has not yet estimated its cost.

Until covid-19 burst on the scene in 2020, hepatitis C had the dubious distinction of killing more Americans annually — nearly 20,000 — than any other infectious disease. Advocates are pleased that the virus is finally getting the attention they believe it deserves. Still, they are not confident that Congress will support providing more than $5 billion in new funding for it. The rest would come in the form of savings from existing programs. But, they said, it’s a step in the right direction.

“I’m thrilled” that there is a federal proposal to end hepatitis C, said Lorren Sandt, executive director of the Caring Ambassadors, a nonprofit in Oregon City, Oregon, that helps people manage chronic diseases such as hepatitis C. “I’ve cried so many times in joy since that came out.”

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