President Donald Trump, who appears increasingly frustrated by congressional Republicans’ inability to “repeal and replace” the Affordable Care Act, has led — since before he took office — the ballyhoo to let the law fail.
Over the weekend, he upped the political ante by taking aim at a new target: health coverage for members of Congress and some of their staffers.
“If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” he tweeted Saturday.
The administration has been threatening for months to stop payments to health insurers for reimbursement of discounts they are required to provide to lower-income customers to offset deductibles and other cost-sharing. Now the president appears ready to take up an old fight over the payments provided to Congress and its staff.
The threat is rooted in a change in congressional health coverage that was ordered during the initial consideration of the ACA in 2010.
In an effort to embarrass Democrats — then in the majority — Republicans successfully pushed an amendment to the ACA bill that required members of Congress and their staffs to drop out of the federal employee health insurance program that has traditionally provided coverage to the denizens of Capitol Hill. Instead, under this GOP revision, lawmakers and some staffers would have to buy — and now do — their insurance through the measure’s health exchanges.
This is where things get messy.
Federal workers, like most people who work for large employers, get a substantial portion of their insurance premium paid as part of their overall compensation — about 72 percent under Federal Employee Health Benefits Program. Taking this employer contribution away from Hill staffers would be tantamount to a pay cut of thousands of dollars. Members of Congress from both parties feared it would result in a “brain drain” because making employees pay the full cost of insurance would make Capitol Hill a less desirable place to work.
“It could be disastrous,” said Norman Ornstein, a scholar at the conservative-leaning American Enterprise Institute who specializes in Congress. “Most staff are underpaid already,” he said.
And, while Congress could make it easier for members to give staffers raises and help make up the difference, “that is both cumbersome and controversial, and would be taxable,” he said. Employer-provided health insurance is not taxed as income.
When it came time to implement this part of the law, the Obama administration took steps to avoid problems.
First, it was determined that while the requirement applied to individual members of the Senate, House and their personal staffs, employees working for the congressional leadership or for committees were not required to drop their federal insurance.
Second, the Office of Personnel Management, essentially the federal government’s human resources department, ruled that members and staffers who did have to purchase coverage on the health exchanges could collect their employer contribution as long as they purchased plans through the District of Columbia’s health exchange, via its small-business program.
The amounts vary by the age of the beneficiary but they max out at just over $480 per month for a single employee, and just under $1,100 per month for family coverage.
While that satisfied Democrats and, behind closed doors, many Republicans, it angered many conservatives, who called it an illegal exemption from what should have been the rule.
“Until members of Congress are put in the exact same position” as everyone else in the exchanges, “we are not going to fix this problem,” said Sen. Ron Johnson (R-Wis.) on a conference call Monday.
Johnson has been fighting to undo the compromise since it was first announced, not just pushing legislation but also filing a federal lawsuit, which was ultimately dismissed. He said he told Senate leaders last week he would not vote for any final health bill unless he got a vote on his amendment to torpedo the congressional subsidies.
Trump, however, has the power as president to order the OPM to change its rules. While such an action would have to follow the federal rule-making process, it could happen in fairly short order.
“The policy was established by rule-making,” said Phil Kerpen, president of the American Commitment, a conservative organization, who has been fighting what he and conservatives call the “congressional bailout” for years. It can be undone “by the same mechanism,” he said.
President Donald Trump’s top health officials could engineer lower enrollment in the state-federal health insurance program by approving applications from several GOP-controlled states eager to control fast-rising Medicaid budgets.
After the Senate fell short in its effort to repeal the Affordable Care Act, the Trump administration is poised to use its regulatory powers to accomplish what lawmakers could not: shrink Medicaid.
President Donald Trump’s top health officials could engineer lower enrollment in the state-federal health insurance program by approving applications from several GOP-controlled states eager to control fast-rising Medicaid budgets.
Indiana, Arkansas, Kentucky, Arizona and Wisconsin are seeking the administration’s permission to require adult enrollees to work, submit to drug testing and demand that some of their poorest recipients pay monthly premiums or get barred from the program.
Maine plans to apply Tuesday. Other states would likely follow if the first ones get the go-ahead.
Josh Archambault, senior fellow for the conservative Foundation for Government Accountability, said absent congressional action on the health bill “the administration may be even more proactive in engaging with states on waivers outside of those that are already planning to do so.”
The hope, he added, is that fewer individuals will be on the program as states figure out ways “to transition able-bodied enrollees into new jobs, or higher-paying jobs.” States need to shore up the program to be able to keep meeting demands for the “truly needy,” such as children and the disabled, he added.
To Medicaid’s staunchest supporters and most vocal critics alike, the waiver requests are a way to rein in the $500 billion program that has undergone unprecedented growth the past four years and now covers 75 million people.
Waivers have often been granted in the past to broaden coverage and test new ways to deliver Medicaid care, such as through private managed-care organizations.
But critics of the new requests, which could be approved within weeks, said they could hurt those who are most in need.
The National Health Law Program “is assessing the legality of work requirements and drug testing and all avenues for challenging them, including litigation,” said Jane Perkins, the group’s legal director.
The administration has already said it favors work requirements and in March invited states to suggest new ideas.
Before taking the top job at the Centers for Medicare & Medicaid Services, Seema Verma was the architect of a Kentucky waiver request submitted last year.
Not all states are expected to seek waivers, because Medicaid enjoys wide political support in many states, particularly in the Northeast and West.
Medicaid, the nation’s largest health insurance program, has seen enrollment soar by 17 million since 2014, when Obamacare gave states more federal funding to expand coverage for adults. It’s typically states’ second-largest expense after education.
This year, Senate and House bills tried to cap federal funding to states for the first time. Since the program began in 1965, federal Medicaid funding to states has been open-ended.
Health experts say allowing the waiver requests goes beyond the executive branch’s authority to change the program without approval from Congress.
“The point of these waivers is not for states to remake the program whole-cloth on a large-scale basis,” said Sara Rosenbaum, a health policy expert at George Washington University who chairs a Medicaid group that advises Congress.
Rosenbaum noted that states received waivers for different purposes under the Obama administration.
In Iowa, state officials won the authority to limit non-emergency transportation. Indiana received approval to charge premiums and lock out enrollees with incomes above the federal poverty level if they fell behind on paying premiums.
“Now there is concern these more extreme measures would hurt enrollees’ access to care,” Rosenbaum said.
Three states seeking waivers today are home to three key GOP players in the Senate health debate: Majority Leader Mitch McConnell (Kentucky), Sen. John McCain (Arizona) and Vice President Mike Pence (Indiana).
If states add premiums, as well as work and drug testing requirements, the result would be fewer people enrolling and staying in Medicaid, said David Machledt, senior policy analyst for the National Health Law Program.
“How does that serve the purpose of the Medicaid program and what are the limits of CMS waiver authority?” he asked.
Wisconsin, where Republican Gov. Scott Walker wants his state to become the first to require some Medicaid enrollees to undergo drug testing, is a prime waiver candidate.
State officials stress the effort is not to deter drug users from the program but to help provide treatment for drug users.
Wisconsin is also one of five states seeking a waiver to add a work requirement. People could meet the mandate through volunteering, job training or caring for an elderly relative.
In addition, Wisconsin wants to limit enrollees’ Medicaid benefits to 48 consecutive months, unless the beneficiary is working.
Enrollees with incomes from 50 percent to 100 percent of the federal poverty level, or between $6,030 and$12,060, would have to pay an $8 monthly premium.
All of these rules would apply to about 12 percent of people currently enrolled in Medicaid — adults who are not disabled and don’t have dependent children.
Wisconsin Medicaid Director Michael Heifetz said the main goal of the proposed changes is not to shrink the size of Medicaid but to get people into the workforce.
“The proposal is not designed to have folks leave the program except for positive reasons,” he said.
If the waiver is approved, the state anticipates annual savings of nearly $50 million and a drop in enrollment of 5,102 over five years.
Wisconsin now spends $7 billion on Medicaid and has 1.2 million recipients.
Asked why childless adults — not parents — are the focus of the waivers, Heifetz said Wisconsin wanted to test the provisions on a smaller population first and focus on adults who should be able to find work.
But the Wisconsin effort has sparked broad outrage from hospitals, doctors and advocates for people with disabilities.
The Wisconsin Council of Churches said the state would be punishing the poor with its waivers — and undermining the vitality of communities.
“We are concerned the proposed changes to the program will be detrimental for the health of our most vulnerable neighbors … and undermine the social fabric and vitality of our state,” said Peter Bakken, public policy coordinator for the group in Sun Prairie, a suburb of Madison.
Sens. Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) cast the two other Republican “no” votes in a cliffhanger drama that ended just before 2:00 a.m. Friday.
WASHINGTON — Sen. John McCain (R-Ariz.), who interrupted brain cancer treatment to return to Capitol Hill and advance the health law repeal efforts, cast the dramatic and decisive "no" vote in the early morning hours that upended the Republican effort to repeal the Affordable Care Act.
The Senate struggled late into the night to craft and then vote on a so-called "skinny repeal" of the health law, but came up empty as the bill was defeated in a 51-49 vote that prompted gasps in the chamber. McCain's vote was unexpected and ends — for now — the Republican party's effort to kill Obamacare.
Sens. Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) cast the two other Republican "no" votes in a cliffhanger drama that ended just before 2:00 a.m. Friday.
Earlier, a group of Republican senators trashed the new measure, widely dubbed a “skinny repeal,” saying it would only worsen the health care system, and they demanded unprecedented promises from their House colleagues to change it.
“The skinny bill in the Senate doesn’t even come close to honoring our promises of repealing Obamacare,” said Sen. Ron Johnson (R-Wis.). “Virtually nothing we're doing in any of these bills and proposals are addressing the challenges, the problems, the damage done [by the Affordable Care Act].”
Staff of Senate Majority Leader Mitch McConnell (R-Ky.) crafted the new bill, which was under discussion all afternoon and posted publicly late Thursday evening.
Senate Majority Leader Mitch McConnell goes on and off the Senate floor during an all-night session to consider the Republican healthcare bill. (Photo by Melina Mara/The Washington Post via Getty Images)
The slimmed-down version of the Senate bill — The Health Care Freedom Act, which the White House refers to as the "freedom bill" — included an end to key elements of the health law. Among them were rollbacks of the mandates for individuals and employers to buy health insurance, changes to waivers available under Section 1332 of the ACA that would give states more leeway to alter essential benefits in insurance plans, and a repeal of the medical-device tax.
It was not immediately clear how the bill achieved savings similar to $133 billion in the House’s version of repeal legislation. An equal or better level of savings is required under the arcane budgetary process that is being used to advance the bill, known as reconciliation.
Budget reconciliation allows the measure to pass the Senate on a simple majority vote, but requires that all of its provisions pass muster with the Senate parliamentarian as budget-related. The text of the bill posted publicly at 10 p.m. The CBO report on it began circulating on Twitter around midnight and the vote finally closed around 1:45 a.m. Friday.
One provision that had been restored after the parliamentarian initially struck it was an attempt to defund Planned Parenthood for a year. The new provision took in at least one additional abortion provider, and was expected to survive. The funding for Planned Parenthood was to be shifted to community health centers.
Keeping the attack on Planned Parenthood solidified Murkowski and Collins' opposition to the vote.
This new iteration of the repeal comes after two versions failed to win over the 50 GOP senators needed. But even with all the rewriting and behind-the-scenes negotiation, four senators called a press conference to declare they will not vote for this "skinny repeal" unless House Speaker Paul Ryan (R-Wis.) promises not to merely pass the measure but send it to a conference committee between the two chambers, where it can be substantively altered.
The four senators slammed the trimmed-down compromise.
“I am not going to vote for a piece of legislation that I believe is not a replacement, that politically would be the dumbest thing in history to throw this out there,” said Sen. Lindsey Graham (R-S.C.).
Left to right, Sens. Lindsey Graham (R-S.C.), Bill Cassidy (R-La.), Ron Johnson (R-Wis.) and John McCain (R-Ariz.) hold a news conference Thursday to say they would not support the "skinny repeal" legislation unless it was guaranteed to go to conference with the House. (Photo by Chip Somodevilla/Getty Images)
He said that he, Johnson and McCain and Sen. Bill Cassidy (R-La.) would not vote for the skinny repeal until Ryan pledges to "go to conference," where Graham can include a measure to shift current Obamacare funding into a block-grant program for states.
His fear, Graham said, is that the House might simply take up and pass the skinny repeal in order to be done with it and notch a win in their seven-year battle against Obamacare.
Graham referred to estimates that said the repeal of the ACA mandates would “collapse the individual market” and leave the GOP to “own the problem at a time when Obamacare is collapsing.”
Ryan did release a statement with a conditional promise to take the bill to conference. Initially, it did not satisfy Graham or McCain. Graham and Johnson were persuaded, however, after a phone conversation with Ryan. McCain was not.
For their part, Democrats uniformly panned the GOP's efforts.
“We’ve had one bad bill after another. There is no bill that is a good bill,” said Sen. Dianne Feinstein (D-Calif.). “Every bill takes people off health care. Every bill makes you pay more for less. There’s a race to the bottom, so to speak.”
Sen. Chris Murphy (D-Conn.), hammered the entire process: "This is nuclear grade bonkers."
The suit, filed by United Healthcare sales agents accuses the giant insurer of keeping a “dual set of books” to hide serious complaints about its services.
United Healthcare Services Inc., which runs the nation’s largest private Medicare Advantage insurance plan, concealed hundreds of complaints of enrollment fraud and other misconduct from federal officials as part of a scheme to collect bonus payments it didn’t deserve, a newly unsealed whistleblower lawsuit alleges.
The suit, filed by United Healthcare sales agents in Wisconsin, accuses the giant insurer of keeping a “dual set of books” to hide serious complaints about its services and of being “intentionally ineffective” at investigating misconduct by its sales staff. A federal judge unsealed the lawsuit, first filed in October 2016, on Tuesday.
The company knew of accusations that at least one sales agent forged signatures on enrollment forms and had been the subject of dozens of other misconduct complaints, according to the suit. In another case, a sales agent allegedly engaged in a “brazen kickback scheme” in which she promised iPads to people who agreed to sign up and stay with the health plan for six months, according to the suit.
Though it fired the female sales agent, United Healthcare concluded the kickback allegations against her were “inconclusive” and did not report the incident to the Centers for Medicare & Medicaid Services, according to the suit.
Asked for comment on the allegations in the suit, United Healthcare spokesman Matt Burns said: “We reject them.”
Medicare serves about 56 million people, both people with disabilities and those 65 and older. About 19 million have chosen to enroll in Medicare Advantage plans as an alternative to standard Medicare. United Healthcare is the nation’s biggest operator, covering about 3.6 million patients last year.
The whistleblowers accuse United Healthcare of hiding misconduct complaints from federal officials to avoid jeopardizing its high rankings on government quality scales. These rankings are used both as a marketing tool to entice members and as a way for the government to pay bonuses to high-quality plans.
Medicare paid United Healthcare $1.4 billion in bonuses in fiscal 2016 based upon their high quality ratings, compared with $564 million in 2015, according to the suit. CMS relies on the health plans to report problems and does not verify the accuracy of these reports before issuing any bonus payments.
The suit alleges the bonuses were “fraudulently obtained” because the company concealed the true extent of complaints. In March 2016, for instance, the company advised CMS only of 257 serious complaints, or about a third of the 771 actually logged, according to the suit.
The suit was filed by James Mlaker, of Milwaukee, a sales agent with the insurance plan in Wisconsin, and David Jurczyk, a resident of Waterford, Wis., a sales manager with the company.
The suit says Jurczyk had access to “dual” complaint databases, described as “the accurate one with a complete list of complaints and more details of the offenses and the fraudulent, truncated one provided to CMS.”
Jurczyk “has direct, personal knowledge of dozens of cases in Wisconsin alone in which customer complaints raising serious issues were routinely determined and falsely documented as either “inconclusive” or “unsubstantiated” by the company, according to the suit. Overall, about 84 percent of complaints alleging major infractions, such as forging signatures on enrollment forms, were determined to be inconclusive or unsubstantiated, according to the suit.
According to Mlaker, one sales agent faced little disciplinary action even after allegedly forging a customer’s signature on an enrollment form. The customer was “shocked” to learn that the agent had enrolled him because he had told the agent he was “not interested and did not want to enroll,” according to the complaint.
As a result, according to the suit, CMS officials never learned of these customer complaints.
The two men said that in early 2013 they began noticing that investigations of serious customer complaints that previously would have been completed “swiftly” instead “were drawn out; little actual inquiry was made, or even worse, known facts were ignored and discounted to falsify findings,” according to the suit.
Complaints also brought “much fewer and less serious corrective or disciplinary actions,” according to the suit. According to the suit, United Healthcare took steps to encourage any members with complaints to report them directly to the company rather than to complain to CMS.
The unsealing of the Wisconsin cases comes as United Healthcare and other Medicare Advantage plans are facing numerous cases brought under the Federal False Claims Act. At least a half-dozen of the whistleblower suits have surfaced since 2014.
The law allows private citizens to bring actions to recover damages on behalf of the federal government and retain a share. The Justice Department elected not to take over the Wisconsin case, which could limit the amount of money, if any, recovered. United Healthcare spokesman Burns said the company agreed with that decision.
In May, the Justice Department accused United Healthcare of overcharging the federal government by more than $1 billion by improperly jacking up risk scores over the course of a decade.
What if the skinny repeal were passed by the Senate and then became law? States’ experiences with insurance market reforms and rollbacks highlight the possible trouble spots.
Betting that thin is in — and might be the only way forward — Senate Republicans are eyeing a “skinny repeal” that rolls back an unpopular portion of the federal health law. But experts warn that the idea has been tried before, and with little success.
Senators are reportedly considering a narrow bill that would eliminate the Affordable Care Act’s “individual mandate,” which assesses a tax on Americans who don’t have insurance, along with penalties for employers with 50 or more workers who fail to offer health coverage.
Details aren’t clear, but it appears that — at least initially — the rest of the 2010 health law would remain, including the rule that says insurers must cover people with preexisting medical problems.
In remarks on the Senate floor Wednesday, Minority Leader Chuck Schumer (D-N.Y.) said that “we just heard from the nonpartisan Congressional Budget Office that under such a plan … 16 million Americans would lose their health insurance, and millions more would pay a 20 percent increase in their premiums.” A bipartisan group of 10 governors – including Ohio’s John Kasich and Nevada’s Brian Sandoval – signed a letter echoing these concerns and urging the Senate to reject it.
But earlier in the day, some Republicans saw this concept as a means to advance the debate.
“We need an outcome, and if a so-called skinny repeal is the first step, that’s a good first step,” said Sen. Thom Tillis (R-N.C.).
Based on published reports, several Republican senators, including Dean Heller of Nevada and Jeff Flake of Arizona, appear to back this approach. It is, at least for now, being viewed as a step along the way to Republican health reform.
“I think that most people would understand that what you’re really voting on is trying to keep the conversation alive,” said Sen. Bob Corker, R-Tenn. “It’s not the policy itself … it’s about trying to create a bigger discussion about repeal between the House and Senate.”
But what if, during these strange legislative times, the skinny repeal were passed by the Senate and then became law? States’ experiences with insurance market reforms and rollbacks highlight the possible trouble spots.
Considering The Parallels
By the late 1990s, states such as Washington, Kentucky and Massachusetts felt a backlash from the coverage requirement rules they previously put on the individual market. When some of the rules were repealed, “things went badly,” said Mark Hall, director of the health law and policy program at Wake Forest University.
Premiums rose and insurers fled, leaving consumers who buy their own coverage, because they don’t get it through their jobs, with fewer choices and higher prices.
That’s because — like the Senate plan — the states generally kept popular parts of their laws, including protections for people with preexisting conditions. At the same time, they didn’t include mandates that consumers carry coverage.
That goes to a basic concept about any kind insurance: People who don’t file claims in any given year subsidize those who do. Also, those healthy people are less likely to sign up, insurers said, leaving them with only the more costly policyholders.
Bottomline: Insurers end up “less willing to participate in the market,” said Hall.
It’s not an exact comparison, though, he added, because the current federal health law offers something most states did not: significant subsidies to help some people buy coverage, which could blunt the effect of not having a mandate.
During the debate that led to passage of the federal ACA, insurers flat-out said the plan would fail without an individual mandate. On Wednesday, the Blue Cross Blue Shield Association weighed in again, saying that if there is no longer a coverage requirement, there should be “strong incentives for people to obtain health insurance and keep it year-round.”
About 6.5 million Americans reported owing penalties for not having coverage in 2015.
Polls consistently show, though, that the individual mandate is unpopular with the public. Indeed, when asked about nine provisions in the ACA, registered voters in a recent Politico/Morning Consult poll said they want the Senate to keep eight, rejecting only the individual mandate.
Even though the mandate’s penalty is often criticized as not strong enough, removing it would still affect the individual market.
“Insurers would react conservatively and increase rates substantially to cover their risk,” said insurance industry consultant Robert Laszewski.
That’s what happened after Washington state lawmakers rolled back rules in 1995 legislation. Insurers requested significant rate increases, which were then rejected by the state’s insurance commissioner. By 1998, the state’s largest insurer — Premera Blue Cross — said it was losing so much money that it would stop selling new individual policies, “precipitating a sense of crisis,” according to a study published in 2000 in the Journal of Health Politics, Policy and Law.
“When one pulled out, the others followed,” said current Washington Insurance Commissioner Mike Kreidler, who was then a regional director in the federal department of Health and Human Services.
The state’s individual market was volatile and difficult for years after. Insurers did come back, but won a concession: For a time, the insurance commissioner lost the power to reject rate increases. Kreidler, first elected in 2000, won the authority back.
Predicting the effect of removing the individual mandate is difficult, although he expects the impact would be modest, at least initially. Subsidies that help people purchase insurance coverage — if they remain as they are under current law — could help blunt the impact. But if those subsidies are reduced — or other changes are made that further drive healthy people out of the market — the impact could be greater.
“Few markets can go bad on you as fast as a health insurance market,” said Kreidler.
As for employers, dropping the requirement that those with 50 or more workers offer health insurance or face a financial penalty could mean some workers would lose coverage, but their jobs might be more secure, said Joe Antos, at the American Enterprise Institute.
That’s because the requirement meant that some smaller firms didn’t hire people or give workers more than 30 hours a week — the minimum needed under the ACA to be considered a full-time worker who qualified for health insurance.
The individual mandate, he added, may not be as much of a factor in getting people to enroll in coverage as some think because the Trump administration has indicated it might not enforce it anyway — and the penalty amount is far less than most people would have to pay for health insurance.
However, the individual market could be roiled by other factors, Antos said.
“The real impact would come if feds stopped promoting enrollment and did other things to make the exchanges [— the state and federal markets through which insurance is offered —] work more poorly.”
Members of the Trump administration and Republicans on Capitol Hill repeatedly say the country’s Medicaid system is “broken” and enrollees struggle to get care because many doctors refuse that coverage.
The top U.S. official overseeing Medicaid — Seema Verma — doesn’t have to look far to find an example. Her husband, Dr. Sanjay Mishra, is one of them.
Mishra is a child psychiatrist in Carmel, Ind., and a partner and medical director of Indiana Health Group, a large medical practice specializing in mental health. That group doesn’t accept Medicaid.
“It’s sadly ironic, but given what I know … I am not one bit surprised,” said Dr. J. Wesley Boyd, associate professor of psychiatry at Harvard Medical School, who co-authored a study this year on the struggles faced by children enrolled in Medicaid as they seek care.
Verma is administrator of the Centers for Medicare & Medicaid Services and a former consultant who helped design Indiana’s Medicaid program.
Jane Norris, a CMS spokesman, said Verma’s husband does not accept Medicaid because that “helps avoid any further conflict of interest or complication of her recusal obligations.”
A spokesman for Indiana Medicaid said Mishra stopped participating in the program in 2007, when Verma began consulting with the state.
Neither Mishra nor a spokesman for his medical group returned calls for comment.
Mishra is one of many specialists nationwide, particularly mental health professionals, who don’t accept Medicaid. Most say the program’s reimbursements are too low.
Matthew Brooks, CEO of the Indiana Council of Community Mental Health Centers, would not comment on Mishra. But he said that in Indiana patients’ ability to get care “is negatively impacted by the limited number of providers, especially in rural areas.”
Dr. James Bien, a pediatrician in West Lafayette, Ind., said he often finds it hard to refer patients — both those who have private insurance and those with Medicaid — to psychiatrists because there is a shortage of such specialists. “It’s really tough. You sort of feel helpless sometimes,” he said. “It’s an even tougher challenge for kids on Medicaid.”
Recently, when looking for help for a teenage patient who attempted suicide, Bien had to refer the boy to a doctor nearly 70 miles away in Indianapolis.
In another case, Bien said, he looked as far as Chicago to find help for a teenage boy with severe depression who was acting aggressively toward his parents and struggling in school. He eventually found a child psychiatrist willing to take this patient more than an hour’s drive away. The family still had to wait weeks for an appointment.
Many families who need a child psychiatrist face long waitlists. And this problem starts with the supply issue. According to the American Academy of Child and Adolescent Psychiatry, there are about 8,300 practicing child and adolescent psychiatrists in the United States — and more than 15 million youths in need of one.
That limited access can have far-reaching consequences. The longer a psychiatric illness or family dysfunction continues, the more difficult it is for the child to succeed. Untreated problems can worsen and lead to difficulties in school.
The challenge is further complicated by the fact that fewer than half of child psychiatrists take Medicaid, said Dr. Peter Metz, a child psychiatrist and professor at the University of Massachusetts Medical School. “It’s a big issue,” he added.
In a 2011 New England Journal of Medicine study, researchers from University of Pennsylvania posing as mothers of children seeking psychiatry appointments were denied 83 percent of the time when they said they had Medicaid and 49 percent when they said they had private insurance.
Boyd and colleagues identified the same problem in their study. Researchers posing as the parent of a depressed 12-year-old who had private insurance or would pay out-of-pocket got an appointment with a psychiatrist or pediatrician 37 percent of the time. When the researchers making the call said they had Medicaid coverage, that figure dropped to 22 percent, the study found.
Metz said there’s a simple reason why Mishra and many child psychiatrists don’t take Medicaid. “It’s financial, it’s because of the low reimbursement rates that Medicaid pays,” he said. Although rates vary by states, Medicaid often pays the specialists less than half the fee they could collect using private insurance or charging a patient directly, according to several psychiatrists.
Paul Gionfriddo, CEO of Mental Health America, an advocacy group, said a cut in federal Medicaid funding would make it harder for states to increase reimbursement rates to providers and entice more of them to see enrollees.
“It would be better if Seema Verma’s husband were to accept Medicaid, not just for the appearance of supporting the program his wife oversees, but to increase access by one more provider,” he said.
A jury ordered the giant medical scope maker Olympus Corp. to pay a Seattle hospital $6.6 million in damages tied to a deadly superbug outbreak — and told the hospital to pay $1 million to a deceased patient’s family.
But jurors on Monday also handed the Tokyo-based manufacturer a key win, rejecting claims that its flagship duodenoscope was unsafe as designed.
The decision follows an eight-week trial, the first in the U.S. related to gastrointestinal scopes causing outbreaks of drug-resistant infections.
The case was filed by Theresa Bigler, 61, and her four children in connection with the August 2013 death of Richard Bigler, a pancreatic cancer patient who contracted an infection linked to a contaminated Olympus scope. The hospital, Virginia Mason Medical Center, later joined in the suit against Olympus, but the jury found it shared some blame in the case.
An Olympus official offered condolences to the Bigler family in a statement and praised the jury’s decision.
“We are appreciative that the jury recognized that Olympus’ duodenoscope design was not unsafe and did not contribute to Mr. Bigler’s unfortunate passing in 2013,” said Sam Tarry, an attorney for the company.
But the jury also said Olympus failed to provide adequate warnings about the scope or instructions for its use after it was manufactured. The jury said that failure harmed Virginia Mason Medical Center.
Theresa Bigler’s attorneys cast the decision as a win for patient safety.
Theresa Bigler sued Olympus for the death of her 57-year-old husband, Richard, a pancreatic cancer patient who contracted an infection linked to a contaminated Olympus scope. (Courtesy of the Bigler family)
“Olympus hasn’t been playing by the rules for some time and this verdict holds them accountable,” lawyer David Beninger said in a statement.
He said the case should send a broad signal to Olympus and other device manufacturers.
They “must make patient safety a priority and not just a sales pitch,” Beninger’s statement said. “As Olympus’ own expert admitted at trial, lawsuits can change behavior and big lawsuits can make big changes. Hopefully this verdict will convince Olympus and others to listen.”
Medical and legal experts said they were surprised at how well Olympus fared in this case, which was closely watched by other plaintiffs’ lawyers who are waging similar suits against the company.
“In the jury’s opinion, the hospital shared some of the blame,” said Lawrence Muscarella, a hospital-safety consultant in Montgomeryville, Pa.
Muscarella said each case is different and plaintiffs’ attorneys can learn from the evidence presented at this trial. “It remains to be seen what this portends for other cases on the docket,” he said.
More than 25 patients and families, from Pennsylvania to California, have sued Olympus alleging wrongful death, negligence or fraud. Federal prosecutors also are investigating Olympus and two smaller manufacturers over their potential roles in patient infections.
Richard Bigler was one of at least 35 patients in American hospitals to have died since 2013 after developing infections tied to Olympus duodenoscopes — snake-like tubes threaded down a patient’s throat. Doctors use the scope to diagnose and treat problems in the digestive tract, such as gallstones, cancers and blockages in the bile duct. About 700,000 such ERCP procedures are performed annually in the U.S.
Last year, Olympus recalled all 4,400 of its TJF-Q180V duodenoscopes — the model used in Bigler’s case — and made repairs to reduce the risk of bacteria becoming trapped inside after cleaning.
Bigler’s attorneys said Olympus had acted recklessly by not warning U.S. hospitals about previous outbreaks and failing to fix a design flaw that hindered cleaning and allowed dangerous bacteria to become trapped inside these reusable scopes.
Olympus had said its gastrointestinal scopes were safe and effective with proper cleaning and disinfection. At trial, the company said Virginia Mason was to blame for Bigler’s infection because the hospital didn’t follow the company’s cleaning instructions.
Olympus criticized Virginia Mason for not telling Bigler and other families about the scope-related infections, forcing them to find out from a newspaper account about the outbreak.
In his closing argument, Olympus attorney Mark Anderson told the jury that the Seattle outbreak would have occurred regardless of whether Olympus’ or another company’s scopes had been used.
“The proof in this case, from their witnesses, is there is no increased risk with the [Olympus scope],” Anderson told the jury.
Hospital officials said the faulty Olympus scopes were the cause of Bigler’s infection and others, and they implemented an expensive test-and-hold protocol for cleaning the devices that halted the spread.
“We’re sorry for the grief and anguish experienced by the Bigler family,” the hospital said in a brief statement. “This was a complicated trial that lasted more than eight weeks. The verdict includes multiple decisions and we will continue reviewing them over the next few days.”
Theresa Bigler was not available for comment, lawyers said.
Olympus is the industry leader for these devices and other specialty endoscopes, with an 85 percent share of the U.S. market.
One of the largest superbug outbreaks in the nation occurred at Virginia Mason, where 39 people’s infections were linked to Olympus scopes. Eighteen patients died. The Seattle hospital said the patients who died, including Richard Bigler, had other underlying illnesses.
The 12-member jury, which had begun deliberating July 18, said the damages to Virginia Mason amounted to $25.4 million. But jurors agreed the hospital had been negligent, so they sharply reduced the damages owed to Virginia Mason.
The plaintiffs’ attorneys repeatedly reminded jurors that three key Olympus executives declined to testify at trial and instead invoked their Fifth Amendment right against self-incrimination.
The three executives who declined to testify were Susumu Nishina, Hisao Yabe and Hiroki Moriyama. They hold top roles in regulatory affairs, quality assurance or medical manufacturing. All three have declined to comment, citing the pending litigation.
Several of Nishina’s internal company emails were introduced as evidence. In one email exchange in February 2013, Nishina told the company’s U.S. managers not to issue a broad warning to American hospitals despite reports of scope-related infections in Dutch, French and U.S. hospitals, court records show.
In addition to Olympus, device makers Pentax and Fujifilm sell these sorts of duodenoscopes, which can cost up to $40,000 apiece. Overall, as many as 350 patients at 41 medical centers worldwide were infected or exposed to contaminated scopes made by those three manufacturers from 2010 to 2015, according to the U.S. Food and Drug Administration.
Ohio’s Healthcare Price Transparency Law stipulated that providers had to give patients a “good faith” estimate of what non-emergency services would cost individuals. Opposition has been formidable, led by the goliath Ohio Hospital Association.
COLUMBUS, Ohio — Two years after it passed unanimously in Ohio’s state Legislature, a law meant to inform patients what health care procedures will cost is in a state of suspended animation.
One of the most stringent in a group of similar state laws being proposed across the country, Ohio’s Healthcare Price Transparency Law stipulated that providers had to give patients a “good faith” estimate of what non-emergency services would cost individuals after insurance before they commenced treatment.
But the law didn’t go into force on Jan. 1 as scheduled. And its troubled odyssey illustrates the political and business forces opposing a common-sense but controversial solution to rein in high health care costs for patients: Let patients see prices.
Many patient advocates say such transparency would be helpful for patients, allowing them to shop around for some services to hold down out-of-pocket costs, as well as adjust their household budgets for upcoming health-related outlays at a time of high-deductible plans.
At the Ohio Statehouse, the law’s greatest champion in state government has been Rep. Jim Butler, a Republican and former Navy fighter pilot whose wife is a physician. He authored the legislation and has beat the drum for it since he got the idea in 2013, as he waited for a garage mechanic to repair his car and absorbed the shop’s posted rates for brake jobs, oil changes and tuneups.
Opposition has been formidable, led by the goliath Ohio Hospital Association. It has filed a court injunction that is currently delaying enactment, peppered local news media with editorials, and lobbied Republican Gov. John Kasich, who has eliminated funding that would allow implementation from the latest state budget.
Joining the hospital association in its legal action are a wide range of provider groups including the Ohio State Medical Association, the Ohio Psychological Association, the Ohio Physical Therapy Association, and the Ohio chapters of the American Academy of Pediatrics, the American College of Surgeons, and the American Osteopathic Association.
These groups say that the law, which applies only to elective procedures, is too broad and that forcing providers to create estimates before procedures would slow down patient care. “The only way to even try to comply with the law is to delay care to patients in order to track down information from insurance companies, who may or may not provide the requested information,” wrote Mike Abrams, the president and CEO of the Ohio Hospital Association, in an op-ed in The Columbus Dispatch in January.
But Jerry Friedman, a retired health policy adviser for the Ohio State University Wexner Medical Center, said the opposition doesn’t stem from genuine concern about patients but from a desire to keep the secret rates that providers have negotiated with insurers under wraps. Transparency would mean explaining to consumers why the hospital charged them $1,000 for a test, he said, adding that providers “don’t want to expose this house of cards they’ve built between hospital physician industry and the insurance industry.”
Ohio State Rep. Jim Butler (Chris Stewart/Courtesy of the Dayton Daily News)
Said Butler on his quest to see the law enacted: “The health care industry has a lot of political power and lots of money. It’s hard to fight on behalf of people against this kind of force.”
The law’s next test will come in August, when the first court hearing on the association’s lawsuit is scheduled. The Kasich administration said it couldn’t comment on the law because of the pending litigation.
Greater price transparency has been a popular policy prescription for America’s high health costs, especially at a time when many patients have high-deductible insurance plans and face larger copayments. Upfront estimates exist in other countries, such as Australia and, for patients facing out-of-pocket expenses, in France.
In Massachusetts, patients can get an estimate within two days of admission if they ask for it. Nebraska requires hospitals and surgical centers to provide a list of the average charges for services. New Hampshire has a website where consumers can compare costs.
Hospitals and doctors often oppose such measures. The American Hospital Association’s position is that health plans — not hospitals — are responsible for telling insured patients about their out-of-pocket costs, according to its website.
Aimee Winteregg, 35, of Troy, Ohio, said she would have liked such information before five miscarriages in four years left her buried in unexpected medical bills. She and her husband became first-time parents in November. Though they are well insured, tests and treatment cost the couple $4,000 out-of-pocket, demanded in bills that were sometimes no more descriptive than for “medical service.”
“We don’t want to deal with this, especially when the doctor tells you stress is bad for the pregnancy,” her husband, J.D., said. But imposing greater transparency has been controversial in both the medical industry and among some health care researchers, who say it puts patients in an untenable position.
The transparency law “was written by someone thinking about health care as a TV, and not as health care,” said Sandra Tanenbaum, a professor of health services management and policy at The Ohio State University College of Public Health.
She said people could not shop for procedures as they would for a TV or car repairs, since they often lack information on the quality of doctors and hospitals, and make health care decisions based on much more than cost.
Consumers are more likely to base their decisions on their doctors’ advice, not on cost alone, according to a report from the Health Policy Institute of Ohio.
Only around 10 percent of health care costs are even “shoppable” expenses — procedures that can be scheduled in advance, like an MRI or elective surgery — according to the HPIO.
Regardless, Butler maintains, the health care industry can give consumers better information upfront. “If you really want patients to be empowered, they really need the information,” he said.
The Ohio Hospital Association, along with seven other Ohio health organizations, went to court last December to block the law, a month before it was supposed to take effect.
Butler said Gov. Kasich’s administration is helping the hospital association stall by not writing regulations, eliminating funding for the law in the state budget, and declining to meet with Butler to discuss it.
State Rep. Michael Henne, also a Republican, has worked with Butler in the Ohio General Assembly on the transparency law. He called Butler a “driver” on the law, noting: “It’s frustrating. You don’t realize how much [influence] special interests have in the process.”
The White House can take a number of behind-the-scenes steps to sabotage the exchanges and hasten their undoing. Already, it’s deploying some of those tactics.
President Donald Trump has vowed to “let Obamacare fail,” after legislative efforts to undo the Affordable Care Act have stalled.
He and congressional Republicans have repeatedly portrayed the Affordable Care Act insurance marketplaces, also known as exchanges, as being in a “death spiral.” But independent analyses have concluded that such spontaneous disintegration isn’t happening.
In a number of ways, the Trump administration’s policies are pushing Obamacare into the vortex.
Reports from Standard & Poor’s, the Congressional Budget Office and the Kaiser Family Foundation all suggest that the exchanges — where people can shop for coverage, often with the help of a government subsidy — are stabilizing. (Kaiser Health News is an editorially independent program of the foundation.)
But, like every piece of legislation, Obamacare faces a difficult political reality: Its marketplaces require active maintenance and federal support.
The White House can take a number of behind-the-scenes steps to sabotage the exchanges and hasten their undoing. Already, it’s deploying some of those tactics.
“The administration has a lot of power to undermine the markets and make them dysfunctional,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms, who specializes in private insurance markets.
Here’s a look at five ways the White House is already working to weaken the health law, and what that means for consumers.
‘Cost-Sharing Reductions’
Under the ACA, when someone’s income falls between 100 and 250 percent of the federal poverty level — up to about $29,000 for an individual or around $61,000 for a family of four — marketplace carriers must offer a plan with “cost-sharing reductions” (CSRs) that reduce consumers’ out-of-pocket expenses.
Reducing cost-sharing — generally copayments and deductibles — makes plans more expensive for the insurers. The Obama administration used its rule-making power to set up direct payments to carriers to help offset this burden. The Trump White House has inherited that responsibility but also has the power to end the payment program.
The nonpartisan Congressional Budget Office estimated CSR subsidies in 2017 would total about $7 billion. Without that money, analysts say, more insurers might choose to exit, limiting options for consumers, and letting the insurers who remain charge higher prices.
Trump has been committedly noncommittal, publicly indicating he would like to halt the subsidies, but so far — on a month-to-month basis — letting them continue.
The uncertainty makes insurance companies skittish about participating, analysts noted. It’s also one reason some plans say they have had to increase their rates, noted Charles Gaba, a Michigan-based blogger who tracks ACA sign-ups. For instance: When filing plans for the 2018 marketplace, carriers on average raised premiums by about 34 percent — with about 20 points stemming from CSR uncertainty, Gaba said, based on an analysis of 21 states’ initial rate filings. Dropping the subsidies altogether would be even more damaging.
Weaken The Mandate
The White House has already signaled it does not want to enforce the individual mandate — the health law’s requirement that all people have coverage. And administration officials have repeated that position.
Meanwhile, in January, it issued an executive order that encouraged U.S. agencies to grant exemptions and waive or defer health law provisions that could put financial strain on companies or individuals — which could also be applied to the individual mandate.
For 2016 tax returns, though, the Internal Revenue Service continued to impose a financial penalty on people who didn’t have health insurance and who didn’t qualify for an exemption.
But enforcement may be waning. This year, the IRS was supposed to reject tax returns if people didn’t indicate whether they had coverage, flagging them for a potential penalty. Instead, it continued processing them, citing Trump’s executive order.
If the IRS has already processed any tax refunds for consumers, then they “don’t have much leverage” when attempting to collect the mandate fee, said Timothy Jost, emeritus law professor at Washington and Lee University in Virginia and an expert on health reform.
Enforcement of the mandate enforcement, economists note, is crucial to ensuring that enough healthy people buy coverage to balance the costs of sicker beneficiaries.
But even with the mandate in effect, the efforts to defang it bring confusion.
“A lot of people believe the Trump administration is not enforcing it,” Jost said.
As a result, healthy people may become less likely to buy insurance, even as sick ones continue seeking it. That means higher prices, and a shakier pool.
“If they don’t think they’re going to get healthy people in the risk pool, they’re going to increase their rates further to protect themselves,” Jost said. “And as they raise their rates further to protect themselves, people … start to drop out.”
Thus, the president’s position on the mandate is leaving insurance carriers and commissioners “apprehensive,” noted Mike Kreidler, Washington state’s insurance commissioner.
A Bare Market
Skittishness on the part of insurers could lead them to drop out of some marketplaces, leaving consumers in some areas with few or no choices. Those “bare markets” are possible under even stable circumstances — and preventing them requires active federal involvement.
Under the Obama administration, high-level officials were “on the phone daily with insurance company executives … trying to get them to participate,” Corlette said. “It was very much an all-hands-on-deck, ‘we’re going to make it work for you guys’ kind of communication.”
And so far Trump’s Department of Health and Human Services doesn’t appear to be emphasizing this kind of essential outreach, both Corlette and Jost suggested. A few months ago, Kreidler agreed, HHS staffers appeared interested in helping states fill their bare counties — but that support has since dwindled.
“This may be sort of under the radar, but it can have real, lasting effects” for consumer choice, Corlette said.
All Quiet On The Enrollment Front
The administration could further undermine the marketplace by dropping outreach to consumers. It’s already a shorter enrollment period this year — spanning six weeks instead of three months, from Nov. 1 to Dec. 15 — though that change was already slated to eventually take effect.
That shorter period means people may miss the memo on signing up — or at least need an extra push, Corlette said. And that’s another way the administration could undermine the marketplaces: simply choosing not to advertise them.
Last sign-up season, HHS stopped open enrollment advertising in January, pulling ads a few days before the period ended. Enrollment dropped compared with previous years, Jost and Gaba noted, with young, healthy people being more likely not to buy coverage.
The administration also just stopped funding federal contractors that supported efforts by community groups and other organizations in some of the nation’s largest cities to sign up people.
Dropping advertising, shortening open enrollment or simply scaling back on technical maintenance for the marketplace website could all have significant impact, Corlette said. People who are sick and need insurance will likely seek it out, but those who are healthier — for whom health insurance is a less pressing priority — could miss the boat.
Again, Jost said, that affects insurer participation.
“Insurance is a product that need to be sold,” he said. “If the insurers believe they’re not going to get any help at all in marketing their product,” he added, fewer will want to enter the marketplace.
Word of (Bad) Mouth
HHS has taken an active role in criticizing the health law — pushing press releases and videos that argue it has helped more than hurt. That strategy could do a lot of harm, experts said.
If consumers keep hearing the law is failing, Jost noted, some will ultimately believe it, buying coverage only if they need it and thereby skewing the insurance risk pool.
Perceived hostility also has an effect on insurers, steering them away from marketplace participation.
“When you undermine confidence in the marketplace, you don’t need a Ph.D. in economics to know it’s not good long term,” Corlette said.
In exchange for approval, Mountain States Health Alliance and Wellmont Health System promise to use money saved from the merger to offer mental health and addiction treatment services and attack public health concerns.
JOHNSON CITY, Tenn. — Looking out a fourth-floor window of his hospital system’s headquarters, Alan Levine can see the Appalachian Mountains that have defined this hardscrabble region for generations.
What gets the CEO’s attention, though, is neither the steep hills in the distance nor one of his Mountain States Health Alliance hospitals across the parking lot. Rather, it’s a nearby shopping center where his main rival — Wellmont Health System, which owns seven area hospitals — runs an urgent care and outpatient cancer center. Mountain States offers the same services just up the road.
“Money is being wasted,” Levine said, noting that duplication of medical services is common throughout northeastern Tennessee and southwestern Virginia where Mountain States and Wellmont have been in a health care “arms race” for years, each trying to outduel the other for the doctors and services that will bring in business.
The companies now want to merge, which would create a monopoly on hospital care in a 13-county region that studies have placed among the nation’s least healthy places. The merger’s savings would pay for a range of public health services that they can’t afford now, the companies project. And they are trying to pull it off without Washington regulators’ approval, breaking with hospitals’ usual path to consolidation.
In a typical case, a plan that eliminates so much competition in a market would almost certainly provoke a court battle with the Federal Trade Commission, which enforces antitrust laws and challenges anti-competitive behavior in the health industry.
To avert such a fight, the hospitals are using an obscure legal maneuver available in Tennessee and Virginia and some other states.
The view of mountains is everywhere in Johnson City, Tenn. (Phil Galewitz/KHN)
Generally known as a Certificate of Public Agreement (COPA), the process works like this: If regulators in Virginia and Tennessee agree that the merger is in the public interest, Wellmont and Mountain States would operate as one company under a state-supervised agreement governing key parts of their operations, including setting prices. The states’ approval would prevent the FTC from challenging the merger under federal antitrust law.
Their decisions could come as soon as this month.
In exchange for approval, Mountain States and Wellmont promise to use money saved from the merger to offer mental health and addiction treatment services and attack public health concerns, such as obesity and smoking — areas previously neglected by the systems that don’t increase hospital admissions and bring in big revenue, hospital officials said
“The question that needs to be asked is whether tight state oversight of a monopoly is better than failed competition,” said Robert Berenson, a health policy expert at the Urban Institute.
Little-Used And Rarely Challenged Mechanism
The federal antitrust exemption made possible under a COPA dates to a Supreme Court ruling in the 1940s used only about a dozen times to allow hospital mergers. One was an hour away from here, in Asheville, N.C.
There’s little scholarly research on COPAs’ results.
Last summer, the FTC dropped its challenge to a merger of two West Virginia hospitals after the state adopted a COPA law and permitted the deal.
In recent years, hospital mergers and acquisitions have created behemoth health systems that have used their status to demand high payments from insurers and patients. Studies by health economists have repeatedly found that consolidation means higher prices.
But the same calculus may not apply here and in other regions where a preponderance of patients are poor or uninsured, officials from both Mountain States and Wellmont say.
While President Donald Trump and Republicans in Congress stress the value of free-market principles in health care, both hospitals argue that in their part of Appalachia the market has led to unnecessary spending, driven up health costs and forced them to focus on services that produce the highest profits rather than meet the community’s most pressing health needs. In this deeply conservative region where death rates from cancer and heart disease are among the nation’s highest, the hospitals say only a state-sanctioned monopoly can help them control rising prices and improve their population’s health.
Without their proposed merger, Levine said, both hospital systems would likely have to sell to an out-of-market chain. That would likely eliminate local control of the facilities and could lead to massive layoffs and the closure of hospitals and services, he said. Together, the two hospital systems employ about 17,000 people.
Alan Levine, CEO of Mountain States Health Alliance, outside his Johnson City, Tenn., office. (Phil Galewitz/KHN)
The FTC, which is urging the states to reject the hospitals’ plan, contends the hospitals could form an alliance or take other steps short of a merger to accomplish the benefits they say one will bring. The agency says the hospitals’ market probably would be no worse off if one chain merged with a company outside the area.
Feds Wary Of Promises
The hospitals are making big promises to sell their deal. They say no hospitals would close for at least five years, although some could be converted to specialized health facilities to treat problems such as mental health or drug addiction. After the merger, all qualified doctors would have staff privileges at all hospitals to treat patients. No insurer would pay lower rates than others. The new hospital system would spend at least $160 million over 10 years to improve public health, expand medical research and support graduate medical education for work in rural areas.
The FTC maintains the hospitals’ pledges are unreliable and dismissed them as having “significant shortcomings, gaps and ambiguities” in an analysis filed with state regulators in January.
Levine said the plan is the best deal for the community given the factors that handicap the hospitals. Those include declining populations and Medicare reimbursement rates that are lower here than other parts of the country because of lower average wages. Another concern is the cost of caring for uninsured people — neither Virginia nor Tennessee expanded Medicaid under the health law, which would have lowered uninsured rates.
“Competition is and should be the first choice, but in an area where competition becomes irrational and there are limited choices, there has to be a Plan B. If not this, then what?” he said.
Blue Cross and Blue Shield of Tennessee, the state’s largest health insurer, is not opposing the hospitals’ combination, a spokesman said. But its counterpart in Virginia, Anthem, hasn’t been persuaded.
“Anthem does not believe that there are any commitments that will protect Southwest Virginia and Northeast Tennessee health care consumers from the negative impact of a state-sanctioned monopoly,” the company said in a statement.
Wanted: Better Job Prospects
The proposed COPA has strong support among large employers in the region, including Eastman, a Kingsport, Tenn., chemical company with $9 billion in annual revenue that employs more than 7,000 people locally. “We get local governance, input and control … and that’s a lot better situation for us,” said David Golden, a senior vice president at Eastman.
Still, walking around Johnson City — the region’s largest city with almost 67,000 people — it’s easy to feel an unease among small employers and residents about a merger. Many worry about possible job cuts.
“Eliminating duplication of services means eliminating people,” said Dick Nelson, 60, who runs a coffee and art shop downtown and has lived here for 27 years. “I don’t care how much health care costs because my insurance will pay it,” he said.
In Kingsport, where Wellmont and Mountain States each has a hospital, Thorp is leery about a merger, too. “It’s an economic move, not an enhancement of medical care,” said Thorp, who runs a newsstand downtown. “We pride ourselves here for having good education and health care. They say there won’t be any services or jobs cut, but if that’s the case then what’s the point of the merger?”
Tom Throp owns Wallace News, a staple in downtown Kingsport, Tenn. Of the hospital consolidation plan, he says: “They say there won’t be any services or jobs cut, but if that’s the case then what’s the point of the merger?” (Phil Galewitz/KHN)
Levine said no place better supports the case for a hospital merger than Wise County in southwestern Virginia, a scenic area with about 40,000 people whose three hospitals all operate below half their capacity. Mountain States and Wellmont each own a hospital in Norton, the county seat with 4,000 residents. Despite few patients, the hospitals still bear hard-to-cut costs for buildings, equipment and adequate staffing levels, Levine said.
On a recent weekday morning, Lonesome Pine Hospital, a Wellmont facility in Big Stone Gap, Va., looked nearly deserted. No volunteers or staffers were visible inside its main entrance and fewer than a fifth of its 70 acute-care beds were being used.
A five-minute drive away, Mountain States’ Norton Community Hospital’s 129 beds are about a quarter filled. Its maternity unit delivers fewer than five babies a week. The hospital offers hyperbaric oxygen therapy — a treatment that pays well under Medicare’s reimbursement rates — to help diabetics heal their wounds. But it has no endocrinologists to help diabetics manage their disease to avoid such complications. Despite a high rate of heart disease in the community, there’s no cardiologist on staff.
Whether a state-sanctioned merger will resolve the incongruities — here or in other poor regions — depends on how firmly regulators hold the hospitals to their pre-merger commitments. If the merger plan gets rejected, Mountain States and Wellmont will resume arch-competitive business practices that do not always put community interests first, said Bart Hove, Wellmont’s CEO.
“It’s about competing for the dollar in any way you can and extracting a dollar from your competition,” Hove said. “You do what you can to drive patients to your hospital.”