For 35 years, Angela Jemmott and her five brothers paid premiums on a long-term care insurance policy for their 91-year-old mother. But the policy does not cover home health aides whose assistance allows her to stay in her Sacramento, California, bungalow, near the friends and neighbors she loves. Her family pays $4,000 a month for that.
"We want her to stay in her house," Jemmott said. "That's what's probably keeping her alive, because she's in her element, not in a strange place."
The private insurance market has proved wildly inadequate in providing financial security for most of the millions of older Americans who might need home health aides, assisted living, or other types of assistance with daily living.
For decades, the industry severely underestimated how many policyholders would use their coverage, how long they would live, and how much their care would cost.
And as Jemmott belatedly discovered, the older generation of plans — those from the 1980s — often covered only nursing homes.
Only 3% to 4% of Americans 50 and older pay for a long-term care policy, according to LIMRA, an insurance marketing and research association. That stands in stark contrast to federal estimates that 70% of people 65 and older will need critical services before they die.
Repeated government efforts to create a functioning market for long-term care insurance — or to provide public alternatives — have never taken hold. Today, most insurers have stopped selling stand-alone long-term care policies: The ones that still exist are too expensive for most people. And they have become less affordable each year, with insurers raising premiums higher and higher. Many policyholders face painful choices to pay more, pare benefits, or drop coverage altogether.
"It's a giant bait-and-switch," said Laura Lunceford, 69, of Sandy, Utah, whose annual premium with her husband leaped to more than $5,700 in 2019 from less than $3,800. Her stomach knots up a couple of months before the next premium is due, as she fears another spike. "They had a business model that just wasn't sustainable from the get-go," she said. "Why they didn't know that is beyond me, but now we're getting punished for their lack of foresight."
The glaring gaps in access to coverage persist despite steady increases in overall payouts. Last year, insurers paid more than $13 billion to cover 345,000 long-term care claims, according to industry figures. Many policyholders and their relatives reported that their plans helped them avert financial catastrophes when they faced long-term care costs that would have otherwise eviscerated their savings.
But others have been startled to learn that policies they paid into over decades will not fully cover the escalating present-day costs of home health aides, assisted living facilities, or nursing homes. And in other cases, people entitled to benefits confront lengthy response times to coverage requests or outright denials, according to records kept by the National Association of Insurance Commissioners, the organization of state regulators.
Jesse Slome, executive director of the American Association for Long-Term Care Insurance, an industry trade group, said long-term care was the most challenging type of insurance to manage. "You need multiple crystal balls," Slome said. "And you have to look 20 years into the future and be right."
The Pandemic Paused a Long-Term Decline
The industry's wobbly finances haven't steadied despite a brief profitable surge during the coronavirus pandemic. Earnings rose because thousands of people who were drawing benefits, many in nursing homes or assisted living facilities, died from covid-19, and other policyholders died before using their insurance. Others stopped tapping their benefits because they fled facilities and went to live with their families, who provided unpaid care.
Overall, earnings went from $2.3 billion in losses in 2019 to two years of profits totaling $1.1 billion, before receding into the red in 2022 by losing $304 million, according to Fitch Ratings.
Still, none of that was enough to reverse the industry's long-term decline. Doug Baker, a director in Fitch's U.S. life insurance group, said long-term care insurance "is one of the riskiest in our universe" because of the lingering financial burden from underestimating the number of people who would tap their policies.
More insurers now offer hybrid plans that combine life insurance with long-term care. Those policies are less generous than the ones offered a decade ago — and using the long-term care benefit drains some or all of the money policyholders hoped to leave to their heirs.
"I don't think people will offer unlimited again," said Tom McInerney, the chief executive of Genworth Financial, which suspended selling plans through brokers in 2019. "One way or another, taxpayers are going to have to pay more for long-term care needs of the baby boomers."
Many experts believe it's untenable to expect that a private insurance market can protect most people from the growing burden of long-term care costs.
"The whole situation is poorly suited to that kind of insurance offering," said Robert Saldin, a political science professor at the University of Montana who studies the industry.
Falling Profits and Skyrocketing Premiums
Starting in the 1970s, long-term care insurance was touted as a way to keep older people from eroding their retirement savings or resorting to Medicaid, the state-federal program for the poor and disabled. Early plans were limited to nursing home care but later expanded to cover in-home care and assisted living centers. Sales of the policies doubled from 1990 to 2002.
As demand grew, however, there were signs the industry had vastly miscalculated the cost of its products. Insurers set early policy prices competitively low, based on actuarial models that turned out to be markedly inaccurate. Forecasters' estimates of policyholders' longevity were wrong. U.S. life expectancy increased to nearly 77 years in 2000 from about 68 years in 1950, federal records show. And as people lived longer, their need for care increased.
Industry officials also failed to account for the behavior of savvy consumers determined to keep their long-term care coverage. Insurers counted on policy lapse rates — people giving up their policies or defaulting on payments — of about 4% annually. The actual lapse rate was closer to 1%.
As the miscalculations sent profits plummeting, insurers raised premiums or exited the market. By 2020, sales of traditional policies had dropped to 49,000 and the number of carriers offering plans had fallen to fewer than a dozen from more than 100.
Premiums for some consumers doubled in just a year or two. Three class-action lawsuits accused Genworth of failing to disclose to policyholders that it had planned multiyear rate increases, leaving them without information they needed to decide whether to keep their policies. Genworth settled the lawsuits with offers to allow customers to adjust their policies, and in some cases it paid cash damage to those who accepted reduced benefits. The company did not admit wrongdoing.
The increases continue. AM Best, a rating agency, said in a report last November that Genworth "will continue to need annual rate increases for at least several more years to reach economic break-even."
Prices for new policies have jumped, too. A decade ago, a couple aged 55 could expect to pay about $3,725 a year for a policy that included $162,000 in total benefits and 3% annual inflation protection, according to the American Association for Long-Term Care Insurance. Today, a policy that is virtually the same would cost $5,025, 35% more, even as rising health costs and inflation have eroded the value of the benefits.
And that's only for the people who can qualify. To limit their losses, insurers have narrowed the eligible pool of clients. In 2021, about 30% of applicants ages 60 to 64 were denied long-term care insurance. For applicants 70 to 74, the rejection rate was 47%. Even among people in their 50s, more than 1 in 5 were turned down. Chronic health conditions, a history of stroke or diabetes, or psychiatric illness may all be grounds for disqualification.
At the same time, insurers began scrutinizing claims more closely. "They tightened their belts," said Alan Kassan, a senior partner with the California law firm Kantor & Kantor, which represents clients challenging denials. "Then they tightened their claim administration and started denying claims more and more."
Despite efforts to limit liability, financial problems forced several high-profile insurance providers to drastically revise policy terms and premiums or go into insolvency, affecting the investments of thousands of clients.
They included Alice Kempski, a retired nurse who, after her husband died, bought a policy from the insurance company Penn Treaty and American Network in 2004 on the advice of a financial adviser, paying premiums of $180 a month for 16 years. By 2017, she was hobbled by osteoporosis and was struggling to manage her multiple medications, according to her daughter, Ann Kempski. She sold the family home in Wilmington, Delaware, in 2017 and, now needing help bathing, moved to an assisted living center there. But when the family tried to file a claim, they discovered that Penn Treaty was insolvent and the policy had been taken over by the Pennsylvania state insurance guaranty fund.
The fund had frozen Kempski's benefits and increased her premiums to about $280 a month, her daughter said. Her doctor told Penn that she had "mild dementia" and osteoporosis and should be in an assisted living facility. But the insurer said that there was not enough evidence that she needed help with two daily living activities or had severe cognitive impairment, conditions that would trigger coverage, according to correspondence between Kempski and the company.
Kempski was paying roughly $5,400 a month out-of-pocket to the assisted living center. She moved in with her daughter when the pandemic hit, but she continued to pay full rent to the facility to save her spot until she returned in 2021. In March of that year, when her daughter was preparing to refile a claim for long-term care insurance and her premiums had reached $320 a month, Kempski had a massive stroke. She died the next month. The insurer never paid for any of her care.
Coverage in a Facility but Not at Home
The policy held by Angela Jemmott's mother, Jewell Thomas, went unused for a different reason: Like many older policies, it covered only skilled nursing care in a facility. Her children had purchased the policy after Thomas' husband died at 56.
But decades later, once Thomas developed dementia in her 80s, her children realized how desperately their mother wanted to stay home. Jemmott said they tried to add a rider to the policy to cover home care but were told that their mother's age (older than 75) barred add-ons. Now the siblings jointly pay about $4,000 a month for two home health aides, while still paying the insurance premium of more than $2,500 a year. "We feel like if we stop paying it, another unforeseen need will arise and cause us to wish we kept it," Jemmott said.
Not all policyholders are displeased.
Bert Minushkin, of Royal Palm Beach, Florida, paid monthly premiums for 27 years, beginning in 1993 when the policy was offered as a benefit by Westinghouse Electric Corp., where he worked as a nuclear engineer. Over time, he paid about $120,000 toward the policy, said his daughter Lisa Heffley, 61, of Louisville, Kentucky.
Diagnosed with dementia, Minushkin began declining swiftly in 2019. His wife spent $220,000 on assisted living facilities and private aides for him over three years, with about $90,000 of the cost offset by his policy, Heffley said. He died in February 2022 at age 91.
"He didn't break even, but thank God he had it," she said.
Turning to Crowdfunding
Many experts say what's needed is a government-subsidized or public program that requires people to carry long-term care insurance, as the Netherlands and Singapore have. But federal efforts to create such a system, including the CLASS Act, which was repealed in 2013, and the WISH Act, introduced in 2021, have failed to gain traction in Congress. At the state level, Washington this summer started a first-in-the-nation program that will provide long-term care benefits for residents who pay into a fund, but it is voluntary, and the maximum benefit of $36,500 will not cover a year in most assisted living facilities.
Lack of a safety net leaves some people unprotected, like Jeffrey Tanck, a real estate broker in Washington, D.C. In 2021, his mother, Sue Tanck, at 75, suffered a serious fall, leaving her with broken arms and a traumatic brain injury. She had been the primary caretaker for his father, Roger, then 77, who had rapidly worsening dementia.
Without warning, Jeffrey Tanck had to assume charge of his father's care, moving him into an assisted living center in Ocala, Florida, that now charges $4,600 a month, and had to get his mother into a skilled nursing facility paid for by Medicaid. With no money to cover his father's costs until he sold their house, Tanck resorted to a plea on the crowdfunding site GoFundMe.
Wanting to shield himself from a similar financial crisis somewhere down the road, Tanck, who is 51, applied for long-term care insurance, only to be denied. The reason? He takes antidepressants, which help him cope with the anxiety and stress of caring for his parents.
"What are people supposed to do?" Tanck asked. "I'm going to need something."
The last time I stepped on a plane for vacation, for fun, was more than three years ago. I haven't been able to visit California, whose coast I adore. Nor Rome, where my husband and I lived for some time.
And yet, I'm told, I've been on a journey. Two journeys, actually: First, a "traumatic brain injury journey," experienced at Johns Hopkins Hospital after I banged my head and developed trouble with my balance and gait. More recently, I've been a traveling companion on my husband's "cancer journey" at Memorial Sloan Kettering, in New York City.
These are two of the highest-ranked hospitals in the country. The care was excellent in both places. But neither of these journeys resembled our bike ride in Ireland or the wine-tasting trip in Sonoma a few years before.
So much of being seriously ill has been rebranded in American health care as a kind of adventure. Experts speak of stroke journeys. Hospital systems invite people on kidney transplant journeys. The language has trickled down into advertising: Take a hair loss journey or a weight loss journey (newly popular because of Wegovy and similar drugs). The heart failure journey even comes with a map.
A map? But on these journeys, you don't get to go anywhere — except maybe the hospital or doctor's office, which is likely, too, to have bought into the travel concept. In the past two decades, American hospitals have gotten into the business of hotel-like hospitality (illness can be fun!) rather than confine themselves to the business of disease (what a downer). And although the care might stay solid, the focus on luxurious amenities and the fancy new buildings that house them is one of the factors that have helped send costs for patients soaring that much higher, to prices well above those in other developed countries.
In this version of health care, I'm no longer a patient. I'm a client, a customer, or (worse) a guest, no matter that I didn't choose this journey cum illness. I appreciate a little luxury and privacy as much as the next person. But, at a time when Americans' life spans are getting shorter and 4 in 10 adults say they've delayed or gone without necessary care because of cost, is it worth it?
In recent years, tight budgets, staffing shortages, and burnout have hit American hospitals. At the same time, many health centers in the U.S. — including the most prestigious ones, and even some community hospitals — have morphed into seven-star hotels. New hospital buildings, such as recent projects at the University of Michigan hospital system and Valley Hospital in Paramus, New Jersey, offer all-private rooms, in many cases with couches and flat-screen TVs. A hospital might now boast about its views, high-thread-count sheets, or food provided by a Michelin-starred chef.
Those commissioning and designing these pavilions cite research showing that private rooms are better for healing, because they offer a better chance at sleep and a lower chance of infection. (Actually, the evidence is pretty murky.)
But we're suckers for this type of thing, and the industry knows that even small comforts can make us feel better, regardless of whether we're actually getting better. In 2008, researchers at the National Bureau of Economic Research estimated that a hospital investing in amenities would increase demand by 38%, whereas a similar investment in clinical quality would lead to only a 13% increase. More recently, hospital executives told The Boston Globe that the main reason hospitals have moved in this direction is that "people's expectations have changed," and it creates a "competitive advantage" that can be marketed to potential customers.
And so the Mayo Clinic now offers complimentary concierge services, which can help with recommending nearby restaurants and finding pet care. I think that's the hospitality version of what used to be called the hospital "help desk," whose function was merely to explain to visitors how to get to patient rooms. Cleveland Clinic, which employs a team of curators, owns one of the largest contemporary art collections in the region, and its leaders see that collection as one tool for "positively affecting patient outcomes." Patients at Cedars-Sinai can experience its "therapeutic art collection" of Chagalls, Picassos, and Oldenburgs.
Hospital food has gotten so good that in some areas people go to their local hospital forhaute cuisine rather than medical needs. And when you look at the numbers on your hospital bill, remember that all of this adds up. For the amount that American patients (or their insurers) pay for some luxury hospital journeys, they could sign up for a Virgin Galactic suborbital joy ride.
This transformation from hospital to hospitality has filled up hospital C-suites with chief experience officers, whose function is to "manage patients' experiences throughout their healthcare journey," as described by the publication HealthTech. The Cleveland Clinic was the first major academic medical center to add one, back in 2007; now some health systems hire for this and similar positions directly from the hospitality industry, picking people who'd previously been managers at a Ritz-Carlton or a Trump hotel.
The American Hospital Association acknowledges and defends the transformation. "These are not just ‘nice to haves,'" Nancy Foster, AHA's vice president of quality and patient-safety policy, wrote to me in an email. "Actions hospitals can take to reduce stress and provide other psychological support can have a meaningful impact on one's physical and behavioral health, including the ability to recover more rapidly." But pretending that illness is an Abercrombie & Kent safari is harmful. These amenities have a cost, and they are not worth nearly what we're paying for them as we're billed for $100,000 joint replacements and $9,000 CT scans. Room charges in many hospitals can exceed $1,000 a night. And "facility fees" for outpatient procedures and even office visits can reach hundreds of dollars, and simply don't exist elsewhere. A hospital's function is to diagnose and to heal, at a price that sick people can afford. I dream of a no-frills Target- or Ikea-like hospital for care.
That doesn't mean hospitals need to resemble prisons. Hospitals certainly have room to improve on breakfasts featuring Lilliputian plastic cups of orange juice and rubbery eggs. But to understand one of the many reasons Americans pay so much for health care, consider this: The best hospitals in Europe are utilitarian structures that most resemble urban high schools. When I got stitches for a deep cut in my forehead in Gemelli Hospital — where the pope gets health care — I sat on a gurney in a big, dark room with other patients.
Instead of providing free coffee and a piano in a soaring, art-filled marble lobby, how about focusing on the very basic things that health systems in the U.S. should do, but — in my experience — in many cases do not, like making it easier for patients to schedule appointments? Shortening the now lengthy wait times to see physicians who take insurance plans? Paying for adequate staffing on nights and weekends, so patients don't linger in bed pointlessly for two days until social workers return on Monday? Or ending those two-day stays in emergency rooms when all inpatient beds are full? (Hotels aspire to run at full occupancy to maximize revenue; hospitals, I'd argue, should not.)
This winter, I'm planning a journey for which I look forward to some good food and art. We haven't yet determined the exact destination, but it will not be a U.S. hospital.
The hospital charged $9,520.02 for the blood tests and pathology services. The insurer paid $4,310.38, leaving the patient with a lab bill of $2,390.12.
This article was published on Tuesday, November 21, 2023 in KFF Health News.
It was January and Ahmed was at an OB-GYN's office near her home in Venus, Texas, for her first prenatal checkup. After an ultrasound, getting anti-nausea medication, and discussing her pregnancy care plan, she said, a nurse made a convenient suggestion: Head to the lab just down the hall for a standard panel of tests.
The lab was inside Texas Health Hospital Mansfield, which opened in December 2020 in a Dallas-Fort Worth suburb. Ahmed, just eight weeks pregnant, said the doctor told her everything about the visit was routine. "Nothing really stood out," Ahmed said. "And, of course, there's just a lot of excitement, and so I really didn't think twice about anything."
Her blood tests checked for multiple sexually transmitted infections, her blood type, and various hormones. Within days, Ahmed began bleeding and her excitement turned to fear. A repeat ultrasound in early February showed no fetus.
"My heart kind of fell apart at that moment because I knew exactly what that meant," she said. She would have a miscarriage.
Then the bills came.
The Patient: Reesha Ahmed, 32, has an Anthem Blue Cross and Blue Shield policy through her employer.
Medical Services: An analysis of Pap smear results and several blood tests in tandem with Ahmed's initial prenatal visit, including complete blood count, blood type, and testing for STIs such as hepatitis B, syphilis, and HIV.
Service Provider: Ahmed got her tests at Texas Health Mansfield, a tax-exempt hospital jointly operated by Texas Health Resources, a faith-based nonprofit health system, and AdventHealth, another religious nonprofit.
Total Bill: The hospital charged $9,520.02 for the blood tests and pathology services. The insurer negotiated that down to $6,700.50 and then paid $4,310.38, leaving Ahmed with a lab bill of $2,390.12.
What Gives: Ahmed's situation reveals how hospital-based labs often charge high prices for tests. Even when providers are in network, a patient can be on the hook for thousands of dollars for common blood tests that are far cheaper in other settings. Research shows hospitals typically charge much more than physicians' offices or independent commercial labs for the same tests.
The situation was particularly difficult for Ahmed because she had lost the pregnancy.
"To come to terms with it mentally, emotionally, physically — dealing with the ramifications of the miscarriage — and then having to muster up the fighting strength to then start calling your insurance, and the billing department, the provider's office, trying to fight back a bill that you don't feel like you were correctly sent? It's just, it's a lot," she said.
In Texas, the same lab tests were at least six times as expensive in a hospital as in a doctor's office, according to research from the Health Care Cost Institute, a nonprofit that examines health spending.
The markup can be even higher depending on the test. HCCI data, based on 2019 prices, shows the median price for a complete blood count in Texas was $6.34 at an independent lab and $58.22 at a hospital. Texas Health charged Ahmed $206.69 for that test alone.
"It is convenient to get your lab done right in the same building," said Jessica Chang, a senior researcher at HCCI, but "many patients are not thinking about how highly marked up these lab tests are." Chang said she suspects many hospitals tack on their overhead costs when they bill insurance.
Anthem also charged Ahmed for at least four tests that most insurance plans would consider preventive care and therefore covered at no cost to patients under the Affordable Care Act's requirements for covering preventive care, which includes aspects of prenatal care. Her EOBs, or "explanation of benefits" notices, show she paid out-of-pocket for a test identifying her Rh factor — which detects a protein on the surface of red blood cells — as well as for tests for hepatitis B, hepatitis C, and syphilis.
Asked to review Ahmed's tests, Anthem spokesperson Emily Snooks wrote in an email to KFF Health News that the claims "were submitted as diagnostic — not preventive — and were paid according to the benefits in the member's health plan."
There "definitely shouldn't be" out-of-pocket costs for those screenings, said Sabrina Corlette, co-director of Georgetown University's Center on Health Insurance Reforms.
The Centers for Disease Control and Prevention recommends screening pregnant patients for several infectious diseases that pose major risks during pregnancy. Ina Park, a professor of family community medicine at the University of California-San Francisco and an expert on STIs, said the tests Ahmed received didn't raise red flags from a clinical perspective. "It's really more what the actual lab charged based on what the tests actually cost," Park said. "This is a really exorbitant price."
For example, Ahmed paid $71.86 in coinsurance for a hepatitis B test for which the hospital charged $418.55. The hospital charged $295.52 to screen for syphilis; her out-of-pocket cost was $50.74.
"You just wonder, is the insurance company really negotiating with this provider as aggressively as they should to keep the reimbursement to a reasonable amount?" Corlette said.
The Resolution: Ahmed refused to pay the bills and Texas Health sent the debt to collections. When she tried to get answers about the costs, she said she was bounced between the doctor's office and the hospital billing department. Ahmed submitted a complaint to the Texas attorney general's office, which passed it to the Texas Health and Human Services Commission. She never heard back.
According to Ahmed, a hospital representative suggested her bloodwork might have been coded incorrectly and agreed the charges "were really unusually high," Ahmed said, but she was told there was nothing the hospital could do to change it. The hospital did not comment on the reason behind the high charge. And in a March 7 email, an AdventHealth employee told Ahmed the doctor's office had "no control" over the hospital's billing.
Ahmed filed an appeal with Anthem, but it was denied. The insurance company stated the claims were processed correctly under her benefits, which cover 80% of what the insurer agrees to pay for in-network lab services after she meets her deductible. Ahmed has a $1,400 deductible and a $4,600 out-of-pocket maximum for in-network providers.
"We depend on health care providers to submit accurate billing information regarding what medical care was needed and delivered," Snooks said. Asked about reimbursements to the Texas Health lab, she added, "The claim was reimbursed based on the laboratory's contract with the health plan."
After a KFF Health News reporter contacted Texas Health on Oct. 9, the hospital called Ahmed on Oct. 10 and said it would zero out her bills and remove the charges from collections. Ahmed was relieved, "like a giant burden's just been lifted off my shoulders."
"It's just been fighting this for 10 months now, and it's finally gone," she said.
Texas Health Resources and AdventHealth declined to respond to detailed questions about Ahmed's charges and the tests she was directed to obtain.
"We are sorry Ms. Ahmed did not get clarity on her care with us. Our top priority is to provide our patients with safe, effective and medically appropriate care," Laura Shea, a spokesperson for the hospital, said in an emailed statement.
The Takeaway: Ahmed's problem demonstrates the pitfalls of using a hospital lab for routine testing.
For standard bloodwork "it's really hard to argue that there's a quality difference" between independent labs and hospitals that would warrant higher prices, Chang said. That holds true for other services, too, like imaging. "There's nothing special about the machines that hospitals use for a CT or MRI scan. It's the same machine."
Broadly, state and federal lawmakers are paying attention to this issue. Congress is considering legislation that would equalize payments for certain services regardless of whether they are provided in a hospital outpatient department or a doctor's office, although not lab services. Hospitals have tried to fend off such a policy, known as "site-neutral payments."
For example, the Lower Costs, More Transparency Act would require the same prices under Medicare for physician-administered drugs regardless of whether they're given in a doctor's office or an off-campus hospital outpatient department. That bill also would require labs to make public the prices they charge Medicare for tests. Another bill, the Bipartisan Primary Care and Health Workforce Act, would ban hospitals from charging commercial health plans some facility fees — which they use to cover operating or administrative expenses.
According to the National Conference of State Legislatures, Colorado, Connecticut, Ohio, New York, and Texas have limited providers' ability to charge privately insured patients facility fees for certain services. Colorado, Connecticut, Maryland, and New York require health facilities to disclose facility fees to patients before providing care; Florida instituted similar requirements for free-standing emergency departments.
Patients should keep copies of itemized bills and insurance statements. While not the only evidence, those documents can help patients avoid out-of-pocket costs for recommended preventive screenings.
For now, patients can proactively avoid such extreme bills: When your doctor says you need blood tests, ask that the requisition be sent to a commercial lab like Labcorp or Quest Diagnostics that is in your network and have the tests done there. If they can't do it electronically, ask for a paper requisition.
"Don't always just go to the lab that your doctor recommends to you," Corlette said.
Bill of the Month is a crowdsourced investigation by KFF Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!
Erin Kissane, a co-founder of the COVID Tracking Project, rolled up her sleeve for the Novavax COVID-19 vaccine in mid-October soon after it was finally recommended in the United States. Like many people with autoimmune diseases, she wants to protect herself from a potentially devastating COVID infection.
Kissane's autoimmune arthritis seems to make her susceptible to unusual vaccine side effects. After getting an mRNA booster last year, her joints ached so painfully that her doctor prescribed steroids to dampen the inflammation. She still considers the mRNA vaccines "miraculous," knowing COVID could be far worse than temporary aches.
Nonetheless, when the pain subsided, she pored through studies on Novavax's shot, a vaccine that is based on proteins rather than mRNA and has been used since early 2022 in other countries. Data from the United Kingdom found that people more frequently reported temporary reactions — like low fevers, fatigue, and pain — as their immune system ramped up in the days following booster vaccination with Moderna's mRNA vaccine versus the one by Pfizer. And those boosted with Novavax's had fewer complaints than either of those. That finding was corroborated in an analysis of international data published last year.
Such studies have driven people with long COVID and chronic fatigue syndrome (also known as myalgic encephalomyelitis, or ME/CFS) to seek out Novavax, too, since the FDA and the Centers for Disease Control and Prevention greenlighted Novavax's vaccine — updated to protect against recent omicron coronavirus variants — about three weeks after recommending updated mRNA vaccines in September.
Waiting paid off for Kissane, whose arm was briefly sore. "It was a dramatically different experience for me," she said. "I hope that plays out for others."
Another group who waited on Novavax are biologists who geek out over its technology. When asked why he opted for Novavax, Florian Krammer, a virologist at the Icahn School of Medicine at Mount Sinai, replied on X, formerly known as Twitter: "Because I am [a] vaccine nerd, I like insect cell produced vaccines."
Whereas mRNA vaccines direct the body to produce spike proteins from the coronavirus SARS-CoV-2, which then train a person's immune system to recognize and fight the virus, Novavax simply injects the proteins. These proteins are grown within moth cells in a laboratory, while other protein-based shots use cells from mammals. And Novavax has said that a special ingredient derived from the bark of Chilean soapbark trees enhances the vaccine's power.
Research suggests that the Novavax vaccine is about as safe and effective as the mRNA shots. Its main disadvantage is arriving late to the scene. Vaccine uptake has plummeted since the first shots became widely available in 2021. Nearly 70% of people got the primary vaccines, compared with fewer than 20% opting for the mRNA COVID boosters released last year. Numbers have dwindled further: As of Oct. 17, only 5% of people in the United States had gotten the latest COVID vaccines, according to the Department of Health and Human Services.
Daniel Park, an epidemiologist at George Washington University, said low rates might improve if people who felt lousy after their last mRNA shots gave Novavax a try. It protects against severe illness, but researchers struggle to specify just how effective this and other vaccines are, at this point, because studies have gotten tricky to conduct: New coronavirus variants continuously emerge, and people have fluctuating levels of immunity from previous vaccines and infections.
Still, a recent study in Italy suggests that Novavax is comparable to mRNA vaccines. It remained more than 50% effective at preventing symptomatic COVID four months after vaccination. Some data suggests that mixing and matching different types of vaccines confers stronger protection — although other studies have found no benefit.
Given all this, Park held out for the Novavax vaccine on account of its potentially milder side effects. "Between a demanding full-time job and two young kids at home, I wanted to stay operational," he said. His arm was sore, but he didn't have the 24-hour malaise accompanying his last mRNA shot.
Most people don't strike a fever after mRNA shots. Even when they do, it is brief and therefore far less detrimental than many cases of COVID. In fact, most reactions are so minor that they're hard to interpret. During clinical trials on mRNA vaccines, for example, up to a third of people in the placebo group reported fatigue and headaches after injection.
People with ME/CFS and long COVID — a potentially debilitating condition that persists months after a COVID infection — have responded to COVID vaccinations in a wide variety of ways. Most participants with long COVID in an 83-person Canadian study said their levels of fatigue, concentration, and shortness of breath improved following vaccination. Inflammatory proteins that have been linked to long COVID dropped as well.
However, larger studies have yet to corroborate the hopeful finding. Jennifer Curtin, a doctor who co-founded a telehealth clinic focused on long COVID and ME/CFS, called RTHM, said vaccines seem to temporarily aggravate some patients' conditions. To learn how Novavax compares, she posted polls on X in late October asking if people with long COVID or ME/CFS felt that their symptoms worsened, improved, or stayed the same after Novavax. Most replied: unchanged.
"It's not scientific, but we need to figure it out since these folks don't want to get COVID," Curtin said. "My patients are all wondering about what vaccine to get right now."
Adding to the uncertainty, the rollout of Novavax and mRNA vaccines has been bumpy as pharmacies struggle to predict demand and insurance companies figure out how to reimburse providers for the shots. Unlike previous vaccine offerings, these options are no longer fully covered by the federal government. A testament to this season's struggle to get vaccinated is that at least one do-gooder has created an online tool to find open appointments for Novavax.
Buoyed by anecdotes of relief from others with long COVID, Hayley Brown, a researcher at the Center for Economic and Policy Research who has the condition, opted for Novavax recently. Unfortunately, her symptoms have flared. She said a temporary discomfort will still be preferable to risking another infection. "As someone with long COVID, the idea of getting COVID again is terrifying."
Assisted living centers have become an appealing retirement option for hundreds of thousands of boomers who can no longer live independently, promising a cheerful alternative to the institutional feel of a nursing home.
But their cost is so crushingly high that most Americans can't afford them.
These highly profitable facilities often charge $5,000 a month or more and then layer on fees at every step. Residents' bills and price lists from a dozen facilities offer a glimpse of the charges: $12 for a blood pressure check; $50 per injection (more for insulin); $93 a month to order medications from a pharmacy not used by the facility; $315 a month for daily help with an inhaler.
The facilities charge extra to help residents get to the shower, bathroom, or dining room; to deliver meals to their rooms; to have staff check-ins for daily "reassurance" or simply to remind residents when it's time to eat or take their medication. Some even charge for routine billing of a resident's insurance for care.
"They say, 'Your mother forgot one time to take her medications, and so now you've got to add this on, and we're billing you for it,'" said Lori Smetanka, executive director of the National Consumer Voice for Quality Long-Term Care, a nonprofit.
About 850,000 older Americans reside in assisted living facilities, which have become one of the most lucrative branches of the long-term care industry that caters to people 65 and older. Investors, regional companies, and international real estate trusts have jumped in: Half of operators in the business of assisted living earn returns of 20% or more than it costs to run the sites, an industry survey shows. That is far higher than the money made in most other health sectors.
Rents are often rivaled or exceeded by charges for services, which are either packaged in a bundle or levied à la carte. Overall prices have been rising faster than inflation, and rent increases since the start of last year have been higher than at any previous time since at least 2007, according to the National Investment Center for Seniors Housing & Care, which provides data and other information to companies.
There are now 31,000 assisted living facilities nationwide — twice the number of skilled nursing homes. Four of every five facilities are run as for-profits. Members of racial or ethnic minority groups account for only a tenth of residents, even though they make up a quarter of the population of people 65 or older in the United States.
A public opinion survey conducted by KFF found that 83% of adults said it would be impossible or very difficult to pay $60,000 a year for an assisted living facility. Almost half of those surveyed who either lived in a long-term care residence or had a loved one who did encountered unexpected add-on fees for things they assumed were included in the price.
Assisted living is part of a broader affordability crisis in long-term care for the swelling population of older Americans. Over the past decade, the market for long-term care insurance has virtually collapsed, covering just a tiny portion of older people. Home health workers who can help people stay safely in their homes are generally poorly paid and hard to find.
And even older people who can afford an assisted living facility often find their life savings rapidly drained.
Unlike most residents of nursing homes, where care is generally paid for by Medicaid, the federal-state program for the poor and disabled, assisted living residents or their families usually must shoulder the full costs. Most centers require those who can no longer pay to move out.
The industry says its pricing structures pay for increased staffing that helps the more infirm residents and avoids saddling others with costs of services they don't need.
Prices escalate greatly when a resident develops dementia or other serious illnesses. At one facility in California, the monthly cost of care packages for people with dementia or other cognitive issues increased from $1,325 for those needing the least amount of help to $4,625 as residents' needs grew.
"It's profiteering at its worst," said Mark Bonitz, who explored multiple places in Minnesota for his mother, Elizabeth. "They have a fixed amount of rooms," he said. "The way you make the most money is you get so many add-ons." Last year, he moved his mother to a nonprofit center, where she lived until her death in July at age 96.
LaShuan Bethea, executive director of the National Center for Assisted Living, a trade association of owners and operators, said the industry would require financial support from the government and private lenders to bring prices down.
"Assisted living providers are ready and willing to provide more affordable options, especially for a growing elderly population," Bethea said. "But we need the support of policymakers and other industries." She said offering affordable assisted living "requires an entirely different business model."
Others defend the extras as a way to appeal to the waves of boomers who are retiring. "People want choice," said Beth Burnham Mace, a special adviser for the National Investment Center for Seniors Housing & Care. "If you price it more à la carte, you're paying for what you actually desire and need."
Yet residents don't always get the heightened attention they paid for. Class-action lawsuits have accused several assisted living chains of failing to raise staffing levels to accommodate residents' needs or of failing to fulfill billed services.
"We still receive many complaints about staffing shortages and services not being provided as promised," said Aisha Elmquist, until recently the deputy ombudsman for long-term care in Minnesota, a state-funded advocate. "Some residents have reported to us they called 911 for things like getting in and out of bed."
'Can You Find Me a Money Tree?'
Florence Reiners, 94, adores living at the Waters of Excelsior, an upscale assisted living facility in the Minneapolis suburb of Excelsior. The 115-unit building has a theater, a library, a hair salon, and a spacious dining room.
"The windows, the brightness, and the people overall are very cheerful and very friendly," Reiners, a retired nursing assistant, said. Most important, she was just a floor away from her husband, Donald, 95, a retired water department worker who served in the military after World War II and has severe dementia.
She resisted her children's pleas to move him to a less expensive facility available to veterans.
Reiners is healthy enough to be on a floor for people who can live independently, so her rent is $3,330 plus $275 for a pendant alarm. When she needs help, she's billed an exact amount, like a $26.67 charge for the 31 minutes an aide spent helping her to the bathroom one night.
Her husband's specialty care at the facility cost much more: $6,150 a month on top of $3,825 in rent.
Month by month, their savings, mainly from the sale of their home, and monthly retirement income of $6,600 from Social Security and his municipal pension, dwindled. In three years, their assets and savings dropped to about $300,000 from around $550,000.
Her children warned her that she would run out of money if her health worsened. "She about cried because she doesn't want to leave her community," Anne Palm, one of her daughters, said.
In June, they moved Donald Reiners to the VA home across the city. His care there costs $3,900 a month, 60% less than at the Waters. But his wife is not allowed to live at the veterans' facility.
After nearly 60 years together, she was devastated. When an admissions worker asked her if she had any questions, she answered, "Can you find me a money tree so I don't have to move him?"
Heidi Elliott, vice president for operations at the Waters, said employees carefully review potential residents' financial assets with them, and explain how costs can increase over time.
"Oftentimes, our senior living consultants will ask, 'After you've reviewed this, Mr. Smith, how many years do you think Mom is going to be able to, to afford this?'" she said. "And sometimes we lose prospects because they've realized, 'You know what? Nope, we don't have it.'"
Potential Buyers From the Bahamas
For residents, the median annual price of assisted living has increased 31% faster than inflation, nearly doubling from 2004 to 2021, to $54,000, according to surveys by the insurance firm Genworth. Monthly fees at memory care centers, which specialize in people with dementia and other cognitive issues, can exceed $10,000 in areas where real estate is expensive or the residents' needs are high.
Diane Lepsig, president of CarePatrol of Bellevue-Eastside, in the Seattle suburbs, which helps place people, said that she has warned those seeking advice that they should expect to pay at least $7,000 a month. "A million dollars in assets really doesn't last that long," she said.
Prices rose even faster during the pandemic as wages and supply costs grew. Brookdale Senior Living, one of the nation's largest assisted living owners and operators, reported to stockholders rate increases that were higher than usual for this year. In its assisted living and memory care division, Brookdale's revenue per occupied unit rose 9.4% in 2023 from 2022, primarily because of rent increases, financial disclosures show.
In a statement, Brookdale said it worked with prospective residents and their families to explain the pricing and care options available: "These discussions begin in the initial stages of moving in but also continue throughout the span that one lives at a community, especially as their needs change."
Many assisted living facilities are owned by real estate investment trusts. Their shareholders expect the high returns that are typically gained from housing investments rather than the more marginal profits of the heavily regulated health care sector. Even during the pandemic, earnings remained robust, financial filings show.
Ventas, a publicly traded real estate investment trust, reported earning revenues in the third quarter of this year that were 24% above operating costs from its investments in 576 senior housing properties, which include those run by Atria Senior Living and Sunrise Senior Living.
Ventas said the prices for its services were affordable. "In markets where we operate, on average it costs residents a comparable amount to live in our communities as it does to stay in their own homes and replicate services," said Molly McEvily, a spokesperson.
In the same period, Welltower, another large real estate investment trust, reported a 24% operating margin from its 883 senior housing properties, which include ones operated by Sunrise, Atria, Oakmont Management Group, and Belmont Village. Welltower did not respond to requests for comment.
The median operating margin for assisted living facilities in 2021 was 23% if they offered memory care and 20% if they didn't, according to David Schless, chief executive of the American Seniors Housing Association, a trade group that surveys the industry each year.
Bethea said those returns could be invested back into facilities' services, technology, and building updates. "This is partly why assisted living also enjoys high customer satisfaction rates," she said.
Brandon Barnes, an administrator at a family business that owns three small residences in Esko, Minnesota, said he and other small operators had been approached by brokers for companies, including one based in the Bahamas. "I don't even know how you'd run them from that far away," he said.
Rating the Cost of a Shower, on a Point Scale
To consistently get such impressive returns, some assisted living facilities have devised sophisticated pricing methods. Each service is assigned points based on an estimate of how much it costs in extra labor, to the minute. When residents arrive, they are evaluated to see what services they need, and the facility adds up the points. The number of points determines which tier of services you require; facilities often have four or five levels of care, each with its own price.
Charles Barker, an 81-year-old retired psychiatrist with Alzheimer's, moved into Oakmont of Pacific Beach, a memory care facility in San Diego, in November 2020. In the initial estimate, he was assigned 135 points: 5 for mealtime reminders; 12 for shaving and grooming reminders; 18 for help with clothes selection twice a day; 36 to manage medications; and 30 for the attention, prompting, and redirection he would need because of his dementia, according to a copy of his assessment provided by his daughter, Celenie Singley.
Barker's points fell into the second-lowest of five service levels, with a charge of $2,340 on top of his $7,895 monthly rent.
Singley became distraught over safety issues that she said did not seem as important to Oakmont as its point system. She complained in a May 2021 letter to Courtney Siegel, the company's chief executive, that she repeatedly found the doors to the facility, located on a busy street, unlocked — a lapse at memory care centers, where secured exits keep people with dementia from wandering away. "Even when it's expensive, you really don't know what you're getting," she said in an interview.
Singley, 50, moved her father to another memory care unit. Oakmont did not respond to requests for comment.
Other residents and their families brought a class-action lawsuit against Oakmont in 2017 that said the company, an assisted living and memory care provider based in Irvine, California, had not provided enough staffing to meet the needs of residents it identified through its own assessments.
Jane Burton-Whitaker, a plaintiff who moved into Oakmont of Mariner Point in Alameda, California, in 2016, paid $5,795 monthly rent and $270 a month for assistance with her urinary catheter, but sometimes the staff would empty the bag just once a day when it required multiple changes, the lawsuit said.
She paid an additional $153 a month for checks of her "fragile" skin "up to three times a day, but most days staff did not provide any skin checks," according to the lawsuit. (Skin breakdown is a hazard for older people that can lead to bedsores and infections.) Sometimes it took the staff 45 minutes to respond to her call button, so she left the facility in 2017 out of concern she would not get attention should she have a medical emergency, the lawsuit said.
Oakmont paid $9 million in 2020 to settle the class-action suit and agreed to provide enough staffing, without admitting fault.
Similar cases have been brought against other assisted living companies. In 2021, Aegis Living, a company based in Bellevue, Washington, agreed to a $16 million settlement in a case claiming that its point system — which charged 64 cents per point per day — was "based solely on budget considerations and desired profit margins." Aegis did not admit fault in the settlement or respond to requests for comment.
When the Money Is Gone
Jon Guckenberg's rent for a single room in an assisted living cottage in rural Minnesota was $4,140 a month before adding in a raft of other charges.
The facility, New Perspective Cloquet, charged him $500 to reserve a spot and a $2,000 "entrance fee" before he set foot inside two years ago. Each month, he also paid $1,080 for a care plan that helped him cope with bipolar disorder and kidney problems, $750 for meals, and another $750 to make sure he took his daily medications. Cable service in his room was an extra $50 a month.
A year after moving in, Guckenberg, 83, a retired pizza parlor owner, had run through his life's savings and was put on a state health plan for the poor.
Doug Anderson, a senior vice president at New Perspective, said in a statement that "the cost and complexity of providing care and housing to seniors has increased exponentially due to the pandemic and record-high inflation."
In one way, Guckenberg has been luckier than most people who run out of money to pay for their care. His residential center accepts Medicaid to cover the health services he receives.
Most states have similar programs, though a resident must be frail enough to qualify for a nursing home before Medicaid will cover the health care costs in an assisted living facility. But enrollment is restricted. In 37 states, people are on waiting lists for months or years.
"We recognize the current system of having residents spend down their assets and then qualify for Medicaid in order to stay in their assisted living home is broken," said Bethea, with the trade association. "Residents shouldn't have to impoverish themselves in order to continue receiving assisted living care."
Only 18% of residential care facilities agree to take Medicaid payments, which tend to be lower than what they charge self-paying clients, according to a federal survey of facilities. And even places that accept Medicaid often limit coverage to a minority of their beds.
For those with some retirement income, Medicaid isn't free. Nancy Pilger, Guckenberg's guardian, said that he was able to keep only about $200 of his $2,831 monthly retirement income, with the rest going to paying rent and a portion of his costs covered by the government.
In September, Guckenberg moved to a nearby assisted living building run by a nonprofit. Pilger said the price was the same. But for other residents who have not yet exhausted their assets, Guckenberg's new home charges $12 a tray for meal delivery to the room; $50 a month to bill a person's long-term care insurance plan; and $55 for a set of bed rails.
Even after Guckenberg had left New Perspective, however, the company had one more charge for him: a $200 late payment fee for money it said he still owed.
The United States faces a serious shortage of primary care physicians for many reasons, but one, in particular, is inescapable: compensation.
Substantial disparities between what primary care physicians earn relative to specialists like orthopedists and cardiologists can weigh into medical students' decisions about which field to choose. Plus, the system that Medicare and other health plans use to pay doctors generally places more value on doing procedures like replacing a knee or inserting a stent than on delivering the whole-person, long-term health care management that primary care physicians provide.
As a result of those pay disparities, and the punishing workload typically faced by primary care physicians, more new doctors are becoming specialists, often leaving patients with fewer choices for primary care.
"There is a public out there that is dissatisfied with the lack of access to a routine source of care," said Christopher Koller, president of the Milbank Memorial Fund, a foundation that focuses on improving population health and health equity. "That's not going to be addressed until we pay for it."
Primary care is the foundation of our health care system, the only area in which providing more services — such as childhood vaccines and regular blood pressure screenings — is linked to better population health and more equitable outcomes, according to the National Academies of Sciences, Engineering, and Medicine, in a recently published report on how to rebuild primary care. Without it, the national academies wrote, "minor health problems can spiral into chronic disease," with poor disease management, emergency room overuse, and unsustainable costs. Yet for decades, the United States has underinvested in primary care. It accounted for less than 5% of health care spending in 2020 — significantly less than the average spending by countries that are members of the Organization for Economic Cooperation and Development, according to the report.
A $26 billion piece of bipartisan legislation proposed last month by Sen. Bernie Sanders (I-Vt.), chair of the Senate Health, Education, Labor, and Pensions Committee, and Sen. Roger Marshall (R-Kan.) would bolster primary care by increasing training opportunities for doctors and nurses and expanding access to community health centers. Policy experts say the bill would provide important support, but it's not enough. It doesn't touch compensation.
"We need primary care to be paid differently and to be paid more, and that starts with Medicare," Koller said.
How Medicare Drives Payment
Medicare, which covers 65 million people who are 65 and older or who have certain long-term disabilities, finances more than a fifth of all health care spending — giving it significant muscle in the health care market. Private health plans typically base their payment amounts on the Medicare system, so what Medicare pays is crucial.
Under the Medicare payment system, the amount the program pays for a medical service is determined by three geographically weighted components: a physician's work, including time and intensity; the practice's expense, such as overhead and equipment; and professional insurance. It tends to reward specialties that emphasize procedures, such as repairing a hernia or removing a tumor, more than primary care, where the focus is on talking with patients, answering questions, and educating them about managing their chronic conditions.
Medical students may not be familiar with the particulars of how the payment system works, but their clinical training exposes them to a punishing workload and burnout that is contributing to the shortage of primary care physicians, projected to reach up to 48,000 by 2034, according to estimates from the Association of American Medical Colleges.
The earnings differential between primary care and other specialists is also not lost on them. Average annual compensation for doctors who focus on primary care — family medicine, internists, and pediatricians — ranges from an average of about $250,000 to $275,000, according to Medscape's annual physician compensation report. Many specialists make more than twice as much: Plastic surgeons top the compensation list at $619,000 annually, followed by orthopedists ($573,000) and cardiologists ($507,000).
"I think the major issues in terms of the primary care physician pipeline are the compensation and the work of primary care," said Russ Phillips, an internist and the director of the Harvard Medical School Center for Primary Care. "You have to really want to be a primary care physician when that student will make one-third of what students going into dermatology will make," he said.
According to statistics from the National Resident Matching Program, which tracks the number of residency slots available for graduating medical students and the number of slots filled, 89% of 5,088 family medicine residency slots were filled in 2023, compared with a 93% residency fill rate overall. Internists had a higher fill rate, 96%, but a significant proportion of internal medicine residents eventually practice in a specialty area rather than in primary care.
No one would claim that doctors are poorly paid, but with the average medical student graduating with just over $200,000 in medical school debt, making a good salary matters.
Not in It for the Money
Still, it's a misperception that student debt always drives the decision whether to go into primary care, said Len Marquez, senior director of government relations and legislative advocacy at the Association of American Medical Colleges.
For Anitza Quintero, 24, a second-year medical student at the Geisinger Commonwealth School of Medicine in rural Pennsylvania, primary care is a logical extension of her interest in helping children and immigrants. Quintero's family came to the United States on a raft from Cuba before she was born. She plans to focus on internal medicine and pediatrics.
"I want to keep going to help my family and other families," she said. "There's obviously something attractive about having a specialty and a high pay grade," Quintero said. Still, she wants to work "where the whole body is involved," she said, adding that long-term doctor-patient relationships are "also attractive."
Quintero is part of the Abigail Geisinger Scholars Program, which aims to recruit primary care physicians and psychiatrists to the rural health system in part with a promise of medical school loan forgiveness. Health care shortages tend to be more acute in rural areas.
These students' education costs are covered, and they receive a $2,000 monthly stipend. They can do their residency elsewhere, but upon completing it they return to Geisinger for a primary care job with the health care system. Every year of work there erases one year of the debt covered by their award. If they don't take a job with the health care system, they must repay the amount they received.
Payment Imbalances a Source of Tension
In recent years, the Centers for Medicare & Medicaid Services, which administers the Medicare program, has made changes to address some of the payment imbalances between primary care and specialist services. The agency has expanded the office visit services for which providers can bill to manage their patients, including adding non-procedural billing codes for providing transitional care, chronic care management, and advance care planning.
In next year's final physician fee schedule, the agency plans to allow another new code to take effect, G2211. It would let physicians bill for complex patient evaluation and management services. Any physician could use the code, but it is expected that primary care physicians would use it more frequently than specialists. Congress has delayed implementation of the code since 2021.
The new code is a tiny piece of overall payment reform, "but it is critically important, and it is our top priority on the Hill right now," said Shari Erickson, chief advocacy officer for the American College of Physicians.
It also triggered a tussle that highlights ongoing tension in Medicare physician payment rules.
The American College of Surgeons and 18 other specialty groups published a statement describing the new code as "unnecessary." They oppose its implementation because it would primarily benefit primary care providers who, they say, already have the flexibility to bill more for more complex visits.
But the real issue is that, under federal law, changes to Medicare physician payments must preserve budget neutrality, a zero-sum arrangement in which payment increases for primary care providers mean payment decreases elsewhere.
"If they want to keep it, they need to pay for it," said Christian Shalgian, director of the division of advocacy and health policy for the American College of Surgeons, noting that his organization will continue to oppose implementation otherwise.
Still, there's general agreement that strengthening the primary care system through payment reform won't be accomplished by tinkering with billing codes.
The current fee-for-service system doesn't fully accommodate the time and effort primary care physicians put into "small-ticket" activities like emails and phone calls, reviews of lab results, and consultation reports. A better arrangement, they say, would be to pay primary care physicians a set monthly amount per patient to provide all their care, a system called capitation.
"We're much better off paying on a per capita basis, get that monthly payment paid in advance plus some extra amount for other things," said Paul Ginsburg, a senior fellow at the University of Southern California Schaeffer Center for Health Policy and Economics and former commissioner of the Medicare Payment Advisory Commission.
But if adding a single five-character code to Medicare's payment rules has proved challenging, imagine the heavy lift involved in overhauling the program's entire physician payment system. MedPAC and the national academies, both of which provide advice to Congress, have weighed in on the broad outlines of what such a transformation might look like. And there are targeted efforts in Congress: for instance, a bill that would add an annual inflation update to Medicare physician payments and a proposal to address budget neutrality. But it's unclear whether lawmakers have strong interest in taking action.
"The fact that Medicare has been squeezing physician payment rates for two decades is making reforming their structure more difficult," said Ginsburg. "The losers are more sensitive to reductions in the rates for the procedures they do."
The Biden administration's first major step toward imposing limits on the pharmacy benefit managers who act as the drug industry's price negotiators is backfiring, pharmacists say. Instead, it's adding to the woes of the independent drugstores it was partly designed to help.
The so-called PBMs have long clawed back a fee from pharmacies weeks or months after they dispense a drug. A new rule, which governs Medicare's drug program, is set to take effect Jan. 1 and requires PBMs to take most of their "performance fees" at the time prescriptions are filled.
The clawbacks have ballooned from about $9 million in 2010 to $12.6 billion in 2021, according to the Medicare Payment Advisory Commission, an agency created to advise Congress on the program for people who are 65 and older or have disabilities.
Performance fees have also boosted Medicare patients' prescription costs at the pharmacy counter by hundreds of millions of dollars, although insurers assert that the fees enable them to charge lower premiums.
Pharmacist groups supported the Medicare rule change, but they didn't anticipate the PBMs' response, which has been to demand they accept new contracts with draconian cuts to their payments for dispensing medicines, said Ronna Hauser, vice president of the National Community Pharmacists Association, which represents independent drugstores. If pharmacies refuse the contracts, they risk losing Medicare customers — likely to the same giant PBM conglomerates, which have absorbed a growing share of the pharmacy business in recent years.
PBMs sit at the center of the U.S. supply chain for drugs, where they say they negotiate lower prices for insurers — including Medicare — and for employers and their workers. But the organizations are loathed by independent drugstores, drugmakers, and patients alike, who accuse them of siphoning money from what is already the world's most expensive health care system without providing additional value.
PBM practices even put the squeeze on national chains like Rite Aid, Kroger, and Walgreens, which aren't part of the conglomerates. Even CVS Health, which owns one of the three leading PBMs, has closed stores or trimmed staff as it pushes consumers to mail-order pharmacy services.
The pressure on in-store pharmacists and technicians has led to a series of walkouts this fall by CVS and Walgreens employees who say tight staffing has caused burnout and threatened patients' safety.
Misery for Small Pharmacies
Under the current system, when a pharmacy fills a prescription, the PBM tells it what the patient owes and what the PBM will pay the pharmacy. The PBM aggregates these payments and sends a check later. Often, however, the PBM will deduct a performance fee from the pharmacy, said Doug Hoey, CEO of the National Community Pharmacists Association.
"When you're filling the prescription, the PBM tells you the patient pays $20 for this drug, we'll pay you $100," Hoey said. "As the pharmacist, I say, OK, I get a total of $120 for a drug that cost me $110 from the wholesaler. Then three months later, the PBM says, 'Actually, I'm only going to pay you $83.' So I lost $17 on the sale and I have no ability to object."
One performance measure is patient adherence. If patients don't take all their drugs, pharmacists can be slapped with a fee for poor performance, although they have no control over the patient's actions. Sometimes pharmacists are dinged for the prescribing physician's mistakes, Hoey said.
In the early fall, PBM giant Express Scripts sent out confidential contracts announcing that in 2024 it will pay pharmacies roughly 10% below what they typically pay to buy wholesale brand-name drugs — meaning they could lose money on every prescription they fill, according to two independent pharmacists who received the documents. They declined to share the contracts because they are subject to nondisclosure agreements with Express Scripts.
In a statement, Express Scripts said that "our reimbursement rates to pharmacies for brand drugs vary based on a number of factors." The company said nearly 90% of the nation's 20,000 or so independent pharmacies had accepted its terms.
Kare Drugs, which runs two New Mexico pharmacies, was among those that refused the Express Scripts contract. As a result, the pharmacy is "preparing for the hardest part, which will be potentially transferring patients away," said owner Ashley Seyfarth.
Seniors who are currently enrolling in Medicare plans for next year may be confused when they discover that their insurance will no longer allow them to pick up medications at their usual pharmacy, said Ben Jolley, a Salt Lake City pharmacist and consultant to other independent pharmacists. Jolley said his drugstore expects to lose at least 100 customers after refusing a contract with a large PBM.
A Double Whammy
For the first months of 2024, pharmacies will face a double whammy. PBMs will pay them less for the drugs they dispense, while the pharmacies also face clawbacks on drugs dispensed in the last quarter of 2023.
The Jan. 1 rule change was partly designed to relieve Medicare patients, who often pay a fixed percentage of a drug's price as a copayment. That copay is based on the price the drug plan or PBM promises the pharmacy at the moment of sale. But the clawbacks have resulted in patients overpaying by hundreds of millions of dollars, Hoey said. That's because their copays at the counter ended up being a higher percentage of the drug's final pharmacy price, once the performance fees were deducted.
Seyfarth, who said she paid more than half a million dollars in PBM fees last year, said that to deal with the pending pinch her pharmacy was coming up with new ways to earn cash, including charging patients for delivery services and starting an all-cash concierge clinic.
Some pharmacies are setting aside savings or taking out short-term loans to cover losses in the early months of next year. "I'm hoping we've made the right calculations and will get through this," said Marc Ost, co-owner of Eric's Rx Shoppe in Horsham, Pennsylvania.
The unintended consequences of the rule are likely to aggravate the problems of community pharmacists, who find it increasingly difficult to carry the most popular, expensive new drugs, Hauser said.
Integrated PBM-insurance companies — particularly UnitedHealth Group, CVS Health, and Cigna, each of which is composed of a major insurer, PBM, and other companies — have gained an increasing share of their revenues from specialty pharmacy drugs, which account for more than half of U.S. drug spending.
These behemoth companies have negotiating power with drugmakers that enables them to sell a diabetes drug like Ozempic (sold under the name Wegovy for weight loss), for example, for about $900 a month. "An independent pharmacy can't even buy it at that price," Hauser said. "If they dispense Ozempic, they are losing money."
Express Scripts has said it wants to help independent pharmacies survive, Hoey said, but hasn't responded to a June letter in which he asked the company to provide breathing space by imposing the 2023 clawbacks gradually over 12 months. CMS this month said it "strongly recommends" but does not require PBMs to come up with payment plans for pharmacies.
In its statement, Express Scripts said it was "committed to reimbursing pharmacies fairly, ensuring Medicare beneficiaries have safe, quality pharmacies in their network, and giving beneficiaries all available discounts at the pharmacy counter."
After a parade of hearings — and an ad campaign from drugmakers — attacking the PBMs, Senate and House committees have advanced bipartisan bills to tighten controls on the companies. Senate Finance Committee bills would require the Department of Health and Human Services to issue rules ensuring that PBM payments to pharmacies and other contract terms are reasonable, and that PBMs no longer impose unfair pharmacy performance requirements, said Julie Allen, a law firm lobbyist representing the National Association of Specialty Pharmacy.
"These statutory changes are essential to addressing problems with the Medicare Part D program and to saving specialty pharmacies and other pharmacies," she said in an email.
Millions of families are facing such daunting life choices — and potential financial ruin — as the escalating costs of in-home care and nursing homes devour savings.
This article was published on Tuesday, November 14, 2023 in KFF Health News.
Margaret Newcomb, 69, a retired French teacher, is desperately trying to protect her retirement savings by caring for her 82-year-old husband, who has severe dementia, at home in Seattle. She used to fear his disease-induced paranoia, but now he's so frail and confused that he wanders away with no idea of how to find his way home. He gets lost so often that she attaches a tag to his shoelace with her phone number.
Feylyn Lewis, 35, sacrificed a promising career as a research director in England to return home to Nashville after her mother had a debilitating stroke. They ran up $15,000 in medical and credit card debt while she took on the role of caretaker.
Sheila Littleton, 30, brought her grandfather with dementia to her family home in Houston, then spent months fruitlessly trying to place him in a nursing home with Medicaid coverage. She eventually abandoned him at a psychiatric hospital to force the system to act.
"That was terrible," she said. "I had to do it."
Millions of families are facing such daunting life choices — and potential financial ruin — as the escalating costs of in-home care, assisted living facilities, and nursing homes devour the savings and incomes of older Americans and their relatives.
"People are exposed to the possibility of depleting almost all their wealth," said Richard Johnson, director of the program on retirement policy at the Urban Institute.
The prospect of dying broke looms as an imminent threat for the boomer generation, which vastly expanded the middle class and looked hopefully toward a comfortable retirement on the backbone of 401(k)s and pensions. Roughly 10,000 of them will turn 65 every day until 2030, expecting to live into their 80s and 90s as the price tag for long-term care explodes, outpacing inflation and reaching a half-trillion dollars a year, according to federal researchers.
The challenges will only grow. By 2050, the population of Americans 65 and older is projected to increase by more than 50%, to 86 million, according to census estimates. The number of people 85 or older will nearly triple to 19 million.
The United States has no coherent system of long-term care, mostly a patchwork. The private market, where a minuscule portion of families buy long-term care insurance, has shriveled, reduced over years of giant rate hikes by insurers that had underestimated how much care people would actually use. Labor shortages have left families searching for workers willing to care for their elders in the home. And the cost of a spot in an assisted living facility has soared to an unaffordable level for most middle-class Americans. They have to run out of money to qualify for nursing home care paid for by the government.
For an examination of the crisis in long-term care, The New York Times and KFF Health News interviewed families across the nation as they struggled to obtain care; examined companies that provide it; and analyzed data from the federally funded Health and Retirement Study, the most authoritative national survey of older people about their long-term care needs and financial resources.
About 8 million people 65 and older reported that they had dementia or difficulty with basic daily tasks like bathing and feeding themselves — and nearly 3 million of them had no assistance at all, according to an analysis of the survey data. Most people relied on spouses, children, grandchildren, or friends.
The United States devotes a smaller share of its gross domestic product to long-term care than do most other wealthy countries, including Britain, France, Canada, Germany, Sweden, and Japan, according to the Organization for Economic Cooperation and Development. The United States lags its international peers in another way: It dedicates far less of its overall health spending toward long-term care.
"We just don't value elders the way that other countries and other cultures do," said Rachel Werner, executive director of the Leonard Davis Institute of Health Economics at the University of Pennsylvania. "We don't have a financing and insurance system for long-term care," she said. "There isn't the political will to spend that much money."
Despite medical advances that have added years to the average life span and allowed people to survive decades more after getting cancer or suffering from heart disease or strokes, federal long-term care for older people has not fundamentally changed in the decades since President Lyndon Johnson signed Medicare and Medicaid into law in 1965. From 1960 to 2021, the number of Americans age 85 and older increased at more than six times the rate of the general population, according to census records.
Medicare, the federal health insurance program for Americans 65 and older, covers the costs of medical care, but generally pays for a home aide or a stay in a nursing home only for a limited time during a recovery from a surgery or a fall or for short-term rehabilitation.
Medicaid, the federal-state program, covers long-term care, usually in a nursing home, but only for the poor. Middle-class people must exhaust their assets to qualify, forcing them to sell much of their property and to empty their bank accounts. If they go into a nursing home, they are permitted to keep a pittance of their retirement income: $50 or less a month in a majority of states. And spouses can hold onto only a modest amount of income and assets, often leaving their children and grandchildren to shoulder some of the financial burden.
"You basically want people to destitute themselves and then you take everything else that they have," said Gay Glenn, whose mother lived in a nursing home in Kansas until she died in October at age 96.
Her mother, Betty Mae Glenn, had to spend down her savings, paying the home more than $10,000 a month, until she qualified for Medicaid. Glenn, 61, relocated from Chicago to Topeka more than four years ago, moving into one of her mother's two rental properties and overseeing her care and finances.
Under the state Medicaid program's byzantine rules, she had to pay rent to her mother, and that income went toward her mother's care. Glenn sold the family's house just before her mother's death in October. Her lawyer told her the estate had to pay Medicaid back about $20,000 from the proceeds.
A play she wrote about her relationship with her mother, titled "If You See Panic in My Eyes," was read this year at a theater festival.
At any given time, skilled nursing homes house roughly 630,000 older residents whose average age is about 77, according to recent estimates. A long-term resident's care can easily cost more than $100,000 a year without Medicaid coverage at these institutions, which are supposed to provide round-the-clock nursing coverage.
Nine in 10 people said it would be impossible or very difficult to pay that much, according to a KFF public opinion poll conducted during the pandemic.
Efforts to create a national long-term care system have repeatedly collapsed. Democrats have argued that the federal government needs to take a much stronger hand in subsidizing care. The Biden administration sought to improve wages and working conditions for paid caregivers. But a $150 billion proposal in the Build Back Better Act for in-home and community-based services under Medicaid was dropped to lower the price tag of the final legislation.
"This is an issue that's coming to the front door of members of Congress," said Sen. Bob Casey, a Pennsylvania Democrat and chair of the Senate Special Committee on Aging. "No matter where you're representing — if you're representing a blue state or red state — families are not going to settle for just having one option," he said, referring to nursing homes funded under Medicaid. "The federal government has got to do its part, which it hasn't."
But leading Republicans in Congress say the federal government cannot be expected to step in more than it already does. Americans need to save for when they will inevitably need care, said Sen. Mike Braun of Indiana, the ranking Republican on the aging committee.
"So often people just think it's just going to work out," he said. "Too many people get to the point where they're 65 and then say, ‘I don't have that much there.'"
Private Companies' Prices Have Skyrocketed
The boomer generation is jogging and cycling into retirement, equipped with hip and knee replacements that have slowed their aging. And they are loath to enter the institutional setting of a nursing home.
But they face major expenses for the in-between years: falling along a spectrum between good health and needing round-the-clock care in a nursing home.
That has led them to assisted living centers run by for-profit companies and private equity funds enjoying robust profits in this growing market. Some 850,000 people age 65 or older now live in these facilities that are largely ineligible for federal funds and run the gamut, with some providing only basics like help getting dressed and taking medication and others offering luxury amenities like day trips, gourmet meals, yoga, and spas.
The bills can be staggering.
Half of the nation's assisted living facilities cost at least $54,000 a year, according to Genworth, a long-term care insurer. That rises substantially in many metropolitan areas with lofty real estate prices. Specialized settings, like locked memory care units for those with dementia, can cost twice as much.
Home care is costly, too. Agencies charge about $27 an hour for a home health aide, according to Genworth. Hiring someone who spends six or seven hours a day cleaning and helping an older person get out of bed or take medications can add up to $60,000 a year.
As Americans live longer, the number who develop dementia, a condition of aging, has soared, as have their needs. Five million to 7 million Americans age 65 and up have dementia, and their ranks are projected to grow to nearly 12 million by 2040. The condition robs people of their memories, mars the ability to speak and understand, and can alter their personalities.
In Seattle, Margaret and Tim Newcomb sleep on separate floors of their two-story cottage, with Margaret ever mindful that her husband, who has dementia, can hallucinate and become aggressive if medication fails to tame his symptoms.
"The anger has diminished from the early days," she said last year.
But earlier on, she had resorted to calling the police when he acted erratically.
"He was hating me and angry, and I didn't feel safe," she said.
She considered memory care units, but the least expensive option cost around $8,000 a month and some could reach nearly twice that amount. The couple's monthly income, with his pension from Seattle City Light, the utility company, and their combined Social Security, is $6,000.
Placing her husband in such a place would have gutted the $500,000 they had saved before she retired from 35 years teaching art and French at a parochial school.
"I'll let go of everything if I have to, but it's a very unfair system," she said. "If you didn't see ahead or didn't have the right type of job that provides for you, it's tough luck."
In the last year, medication has quelled Tim's anger, but his health has declined so much that he no longer poses a physical threat. Margaret said she's reconciled to caring for him as long as she can.
"When I see him sitting out on the porch and appreciating the sun coming on his face, it's really sweet," she said.
The financial threat posed by dementia also weighs heavily on adult children who have become guardians of aged parents and have watched their slow, expensive declines.
Claudia Morrell, 64, of Parkville, Maryland, estimated her mother, Regine Hayes, spent more than $1 million during the eight years she needed residential care for dementia. That was possible only because her mother had two pensions, one from her husband's military service and another from his job at an insurance company, plus savings and Social Security.
Morrell paid legal fees required as her mother's guardian, as well as $6,000 on a special bed so her mother wouldn't fall out and on private aides after she suffered repeated small strokes. Her mother died last December at age 87.
"I will never have those kinds of resources," Morrell, an education consultant, said. "My children will never have those kinds of resources. We didn't inherit enough or aren't going to earn enough to have the quality of care she got. You certainly can't live that way on Social Security."
Women Bear the Burden of Care
For seven years, Annie Reid abandoned her life in Colorado to sleep in her childhood bedroom in Maryland, living out of her suitcase and caring for her mother, Frances Sampogna, who had dementia. "No one else in my family was able to do this," she said.
"It just dawned on me, I have to actually unpack and live here," Reid, 61, remembered thinking. "And how long? There's no timeline on it."
After Sampogna died at the end of September 2022, her daughter returned to Colorado and started a furniture redesign business, a craft she taught herself in her mother's basement. Reid recently had her knee replaced, something she could not do in Maryland because her insurance didn't cover doctors there.
"It's amazing how much time went by," she said. "I'm so grateful to be back in my life again."
Studies are now calculating the toll of caregiving on children, especially women. The median lost wages for women providing intensive care for their mothers is $24,500 over two years, according to a study led by Norma Coe, an associate professor at the Perelman School of Medicine at the University of Pennsylvania.
Lewis moved back from England to Nashville to care for her mother, a former nurse who had a stroke that put her in a wheelchair.
"I was thrust back into a caregiving role full time," she said. She gave up a post as a research director for a nonprofit organization. She is also tending to her 87-year-old grandfather, ill with prostate cancer and kidney disease.
Making up for lost income seems daunting while she continues to support her mother.
But she is regaining hope: She was promoted to assistant dean for student affairs at Vanderbilt School of Nursing and was recently married. She and her husband plan to stay in the same apartment with her mother until they can save enough to move into a larger place.
Government Solutions Are Elusive
Over the years, lawmakers in Congress and government officials have sought to ease the financial burdens on individuals, but little has been achieved.
The CLASS Act, part of the Obamacare legislation of 2010, was supposed to give people the option of paying into a long-term insurance program. It was repealed two years later amid compelling evidence that it would never be economically viable.
Two years ago, another proposal, called the WISH Act, outlined a long-term care trust fund, but it never gained traction.
On the home care front, the scarcity of workers has led to a flurry of attempts to improve wages and working conditions for paid caregivers. A provision in the Build Back Better Act to provide more funding for home care under Medicaid was not included in the final Inflation Reduction Act, a less costly version of the original bill that Democrats sought to pass last year.
The labor shortages are largely attributed to low wages for difficult work. In the Medicaid program, demand has clearly outstripped supply, according to a recent analysis. While the number of home aides in the Medicaid program has increased to 1.4 million in 2019 from 840,000 in 2008, the number of aides per 100 people who qualify for home or community care has declined nearly 12%.
In April, President Joe Biden signed an executive order calling for changes to government programs that would improve conditions for workers and encourage initiatives that would relieve some of the burdens on families providing care.
Turning to Medicaid, a Shredded Safety Net
The only true safety net for many Americans is Medicaid, which represents, by far, the largest single source of funding for long-term care.
More than 4 in 5 middle-class people 65 or older who need long-term care for five years or more will eventually enroll, according to an analysis for the federal government by the Urban Institute. Almost half of upper-middle-class couples with lifetime earnings of more than $4.75 million will also end up on Medicaid.
But gaps in Medicaid coverage leave many people without care. Under federal law, the program is obliged to offer nursing home care in every state. In-home care, which is not guaranteed, is provided under state waivers, and the number of participants is limited. Many states have long waiting lists, and it can be extremely difficult to find aides willing to work at the low-paying Medicaid rate.
Qualifying for a slot in a nursing home paid by Medicaid can be formidable, with many families spending thousands of dollars on lawyers and consultants to navigate state rules. Homes may be sold or couples may contemplate divorce to become eligible.
And recipients and their spouses may still have to contribute significant sums. After Stan Markowitz, a former history professor in Baltimore with Parkinson's disease, and his wife, Dottye Burt, 78, exhausted their savings on his two-year stay in an assisted living facility, he qualified for Medicaid and moved into a nursing home.
He was required to contribute $2,700 a month, which ate up 45% of the couple's retirement income. Burt, who was a racial justice consultant for nonprofits, rented a modest apartment near the home, all she could afford on what was left of their income.
Markowitz died in September at age 86, easing the financial pressure on her. "I won't be having to pay the nursing home," she said.
Even finding a place willing to take someone can be a struggle. Harold Murray, Sheila Littleton's grandfather, could no longer live safely in rural North Carolina because his worsening dementia led him to wander. She brought him to Houston in November 2020, then spent months trying to enroll him in the state's Medicaid program so he could be in a locked unit at a nursing home.
She felt she was getting the runaround. Nursing home after nursing home told her there were no beds, or quibbled over when and how he would be eligible for a bed under Medicaid. In desperation, she left him at a psychiatric hospital so it would find him a spot.
"I had to refuse to take him back home," she said. "They had no choice but to place him."
He was finally approved for coverage in early 2022, at age 83.
A few months later, he died.
Reed Abelson is a health care reporter for The New York Times.The New York Times' Kirsten Noyes and graphics editor Albert Sun, KFF Health Newsdata editor Holly K. Hacker, and JoNel Aleccia, formerly of KFF Health News, contributed to this report.
The U.S. spends huge amounts of money on healthcare that does little or nothing to help patients, and may even harm them. In Colorado, a new analysis shows that the number of tests and treatments conducted for which the risks and costs exceed the benefits has barely budged despite a decade-long attempt to tamp down on such care.
The state — including the government, insurers, and patients themselves — spent $134 million last year on what is called low-value care, according to the report by the Center for Improving Value in healthcare, a Denver nonprofit that collects billing data from health plans across Colorado. The top low-value items in terms of spending in each of the past three years were prescriptions for opiates, prescriptions for multiple antipsychotics, and screenings for vitamin D deficiency, according to the analysis.
Nationwide, those treatments raise costs, lead to health complications, and interfere with more appropriate care. But the structure of the U.S. health system, which rewards doctors for providing more care rather than the right care, has made it difficult to stop such waste. Even in places that have reduced or eliminated the financial incentive for additional testing, such as Los Angeles County, low-value care remains a problem.
And when patients are told by physicians or health plans that tests or treatments aren't needed, they often question whether they are being denied care.
While some highly motivated clinicians have championed effective interventions at their own hospitals or clinics, those efforts have barely moved the needle on low-value care. Of the $3 trillion spent each year on healthcare in the U.S., 10% to 30% consists of this low-value care, according to multiple estimates.
"There's a culture of 'more is better,'" said Mark Fendrick, director of the University of Michigan Center for Value-Based Insurance Design. "And 'more is better' is very hard to overcome."
To conduct its study, the Center for Improving Value in healthcare used a calculator developed by Fendrick and others that quantifies spending for services identified as low-value care by the Choosing Wisely campaign, a collaborative effort of the American Board of Internal Medicine Foundation and now more than 80 medical specialty societies.
Fendrick said the $134 million tallied in the report represents just "a small piece of the universe of no- and low-value care" in Colorado. The calculator tracks only the 58 services that developers were most confident reflected low-value care and does not include the costs of the cascade of care that often follows. Every dollar spent on prostate cancer testing in men over 70, for example, results in $6 in follow-up tests and treatments, according to an analysis published in JAMA Network Open in 2022.
In 2013, Children's Hospital Colorado learned it had the second-highest rate of CT abdominal scans — a low-value service — among U.S. children's hospitals, with about 45% of kids coming to the emergency room with abdominal pain getting the imaging. Research had shown that those scans were not helpful in most cases and exposed the children to unnecessary radiation.
Digging into the problem, clinicians there found that if ER physicians could not find the appendix on an ultrasound, they swiftly ordered a CT scan.
New protocols implemented in 2016 have surgeons come to the ER to evaluate the patient before a CT scan is ordered. The surgeons and emergency doctors can then decide whether the child is at high risk of appendicitis and needs to be admitted, or at low risk and can be sent home. Within two years, the hospital cut its rate of CT scans on children with abdominal pain to 10%, with no increase in complications.
"One of the hardest things to do in this work is to align financial incentives," said Lalit Bajaj, an emergency physician at Children's Colorado who championed the effort, "because in our healthcare system, we get paid for what we do."
Cutting CT scans meant less revenue. But Children's Colorado worked with an insurance plan to create an incentive program. If the hospital could hold down the rate of high-cost imaging, saving the health plan money, it could earn a bonus from the insurer at the end of the year that would partly offset the lost revenue.
But Bajaj said it's tough for doctors to deal with patient expectations for testing or treatment. "It's not a great feeling for a parent to come in and I tell them how to support their child through the illness," Bajaj said. "They don't really feel like they got testing done. 'Did they really evaluate my child?'"
That was a major hurdle in treating kids with bronchiolitis. That respiratory condition, most often caused by a virus, sends thousands of kids every winter to the ER at Children's, where unneeded chest X-rays were often ordered.
"The data was telling us that they really didn't provide any change in care," Bajaj said. "What they did was add unnecessary expense."
Too often, doctors reading the X-rays mistakenly thought they saw a bacterial infection and prescribed antibiotics. They would also prescribe bronchodilators, like albuterol, they thought would help the kids breathe easier. But studies have shown those medicines don't relieve bronchiolitis.
Bajaj and his colleagues implemented new protocols in 2015 to educate parents on the condition, how to manage symptoms until kids get better, and why imaging or medication is unlikely to help.
"These are hard concepts for folks," Bajaj said. Parents want to feel their child has been fully evaluated when they come to the ER, especially since they are often footing more of the bill.
The hospital reduced its X-ray rate from 40% in the 17 months before the new protocols to 29% in the 17 months after implementation, according to Bajaj. The use of bronchodilators dropped from 36% to 22%.
Part of the secret of Children's success is that they "brand" their interventions. The hospital's quality improvement team gathers staff members from various disciplines to brainstorm ways to reduce low-value care and assign a catchy slogan to the effort: "Image gently" for appendicitis or "Rest is best" for bronchiolitis.
"And then we get T-shirts made. We get mouse pads and water bottles made," Bajaj said. "People really do enjoy T-shirts."
In California, the Los Angeles County Department of Health Services, one of the largest safety-net health systems in the country, typically receives a fixed dollar amount for each person it covers regardless of how many services it provides. But the staff found that 90% of patients undergoing cataract surgery were getting extensive preoperative testing, a low-value service. In other health systems, that would normally reflect a do-more-to-get-paid-more scenario.
"That wasn't the case here in LA County. Doctors didn't make more money," said John Mafi, an associate professor of medicine at UCLA. "It suggests that there's many other factors other than finances that can be in play."
As quality improvement staffers at the county health system looked into the reasons, they found the system had instituted a protocol requiring an X-ray, electrocardiograms, and a full set of laboratory tests before the surgery. A records review showed those extra tests weren't identifying problems that would interfere with an operation, but they did often lead to unnecessary follow-up visits. An anomaly on an EKG might lead to a referral to a cardiologist, and since there was often a backlog of patients waiting for cardiology visits, the surgery could be delayed for months.
In response, the health system developed new guidelines for preoperative screenings and relied on a nurse trained in quality improvement to advise surgeons when preoperative testing was warranted. The initiative drove down the rates of chest X-rays, EKGs, and lab tests by two-thirds, with no increase in adverse events.
The initiative lost money in its first year because of high startup costs. But over three years, it resulted in modest savings of about $60,000.
"A fee-for-service-driven health system where they make more money if they order more tests, they would have lost money," Mafi said, because they make a profit on each test.
Even though the savings were minimal, patients got needed surgeries faster and did not face a further cascade of unnecessary testing and treatment.
Fendrick said some hospitals make more money providing all those tests in preparation for cataract surgery than they do from the surgeries themselves.
"These are older people. They get EKGs, they get chest X-rays, and they get bloodwork," he said. "Some people need those things, but many don't."
Katherine Wells wants to urge her Lubbock, Texas, community to get vaccinated against COVID-19. "That could really save people from severe illness," said Wells, the city's public health director.
But she can't.
A rule added to Texas' budget that went into effect Sept. 1 forbids health departments and other organizations funded by the state government to advertise, recommend, or even list COVID vaccines alone. "Clinics may inform patients that COVID-19 vaccinations are available," the rule allows, "if it is not being singled out from other vaccines."
Texas isn't the only state curtailing the public conversation about COVID vaccines. Tennessee's health department homepage, for example, features the flu, vaping, and cancer screening but leaves out COVID and COVID vaccines. Florida is an extreme case, where the health department has issued guidance against COVID vaccines that runs counter to scientific studies and advice from the Centers for Disease Control and Prevention.
Notably, the shift in health information trails rhetoric from primarily Republican politicians who have reversed their positions on COVID vaccines. Fierce opposition to measures like masking and business closures early in the pandemic fueled a mistrust of the CDC and other scientific institutions and often falls along party lines: Last month, a KFF poll found that 84% of Democrats said they were confident in the safety of COVID vaccines, compared with 36% of Republicans. It's a dramatic drop from 2021, when two-thirds of Republicans were vaccinated.
As new vaccines roll out ahead of the expected winter surge of COVID, some health officials are treading carefully to avoid blowback from the public and policymakers. So far, vaccine uptake is low, with less than 5% of Americans receiving an updated shot, according to the Department of Health and Human Services. Wells fears the consequences will be dire: "We will see a huge disparity in health outcomes because of changes in language."
A study published in July found that Republicans and Democrats in Ohio and Florida died at roughly similar rates before COVID vaccines emerged, but a disparity between parties grew once the first vaccines were widely available in 2021 and uptake diverged. By year's end, Republicans had a 43% higher rate of excess deaths than Democrats.
Public health initiatives have long been divisive — water fluoridation, needle exchanges, and universal health care, to name a few. But the pandemic turned up the volume to painful levels, public health officials say. More than 500 left their jobs under duress in 2020 and 2021, and legislators in at least 26 states passed laws to prevent public officials from setting health policies. Republican Arkansas state Sen. Trent Garner told KFF Health News in 2021, "It's time to take the power away from the so-called experts."
At first, vaccine mandates were contentious but the shots themselves were not. Scott Rivkees, Florida's former surgeon general, now at Brown University, traces the shift to the months after Joe Biden was elected president. Though Florida Gov. Ron DeSantis initially promoted COVID vaccination, his stance changed as resistance to COVID measures became central to his presidential campaign. In late 2021, he appointed Joseph Ladapo surgeon general. By then, Ladapo had penned Wall Street Journal op-eds skeptical of mainstream medical advice, such as one asking, "Are COVID Vaccines Riskier Than Advertised?"
As bivalent boosters rolled out last year, the Florida health department's homepage removed information on COVID vaccines. In its place were rules against mandates and details on how to obtain vaccine exemptions. Then, early this year, the department advised against vaccinating children and teens.
The state's advice changed once more when the CDC recommended updated COVID vaccines in September. DeSantis incorrectly said the vaccines had "not been proven to be safe or effective." And the health department amended its guidance to say men under age 40 should not be vaccinated because the department had conducted research and deemed the risk of heart complications like myocarditis unacceptable. It refers to a short, authorless document posted online rather than in a scientific journal where it would have been vetted for accuracy. The report uses an unusual method to analyze health records of vaccinated Floridians. Citing serious flaws, most other researchers call it misinformation.
Scientifically vetted studies, and the CDC's own review, contradict Florida's conclusion against vaccination. Cases of myocarditis following mRNA vaccines have occurred but are much less frequent than cases triggered by COVID. The risk is sevenfold higher from the disease than from mRNA vaccines, according to an analysis published in a medical journal based on a review of 22 other studies.
Since leaving his post, Rivkees has been stunned to see the state health department subsumed by political meddling.
About 28,700 children and adults from birth to age 39 have died of COVID in the United States. Florida's anti-vaccine messaging affects people of all ages, Rivkees added, not just those who are younger.
He points out that Florida performed well compared with other states in 2020 and 2021, ranking 38th in COVID deaths per capita despite a large population of older adults. Now it has the sixth-highest rate of COVID deaths in the country.
"There is no question that the rise of misinformation and the politicization of the response has taken a toll on public health," he said.
As in Florida, the Texas health department initially promoted COVID vaccines, warning that Texans who weren't vaccinated were about 20 times as likely to suffer a COVID-associated death. Such sentiments faded last year, as state leaders passed policies to block vaccine mandates and other public health measures. The latest is a prohibition against the use of government funds to promote COVID vaccines. Uptake in Texas is already low, with fewer than 4% of residents getting the bivalent booster that rolled out last year.
At Lubbock's health department, Wells managed to put out a press release saying the city offers COVID vaccines but stopped short of recommending them. "We aren't able to do as big a push as other states," she said.
Some health officials are altering their recommendations, given the current climate. Janet Hamilton, executive director at the Council of State and Territorial Epidemiologists, said clear-cut advice to get vaccinated against COVID works when people trust the scientific establishment, but it risks driving others away from all vaccines. "It's important for public health to meet people where they are," Hamilton said.
Missouri's health department took this tack on X, formerly known as Twitter: "COVID vaccines will be available in Missouri soon, if you're in to that sort of thing. If not, just keep scrolling!"