Tennessee last year spent $48 million on a single drug, Humira — about $62,000 for each of the 775 patients who were covered by its employee health insurance program and receiving the treatment. So when nine Humira knockoffs, known as biosimilars, hit the market for as little as $995 a month, the opportunity for savings appeared ample and immediate.
But it isn't here yet. Makers of biosimilars must still work within a healthcare system in which basic economics rarely seems to hold sway.
For real competition to take hold, the big pharmacy benefit managers, or PBMs, the companies that negotiate prices and set the prescription drug menu for 80% of insured patients in the United States, would have to position the new drugs favorably in health plans.
They haven't, though the logic for doing so seems plain.
Humira has enjoyed high-priced U.S. exclusivity for 20 years. Its challengers could save the healthcare system $9 billion and herald savings from the whole class of drugs called biosimilars — a windfall akin to the hundreds of billions saved each year through the purchase of generic drugs.
The biosimilars work the same way as Humira, an injectable treatment for rheumatoid arthritis and other autoimmune diseases. And countries such as the United Kingdom, Denmark, and Poland have moved more than 90% of their Humira patients to the rival drugs since they launched in Europe in 2018. Kaiser Permanente, which oversees medical care for 12 million people in eight U.S. states, switched most of its patients to a biosimilar in February and expects to save $300 million this year alone.
Biologics — both the brand-name drugs and their imitators, or biosimilars — are made with living cells, such as yeast or bacteria. With dozens of biologics nearing the end of their patent protection in the next two decades, biosimilars could generate much higher savings than generics, said Paul Holmes, a partner at Williams Barber Morel who works with self-insured health plans. That's because biologics are much more expensive than pills and other formulations made through simpler chemical processes.
For example, after the first generics for the blockbuster anti-reflux drug Nexium hit the market in 2015, they cost around $10 a month, compared with Nexium's $100 price tag. Coherus BioSciences launched its Humira biosimilar, Yusimry, in July at $995 per two-syringe carton, compared with Humira's $6,600 list price for a nearly identical product.
"The percentage savings might be similar, but the total dollar savings are much bigger," Holmes said, "as long as the plan sponsors, the employers, realize the opportunity."
That's a big if.
While a manufacturer may need to spend a few million dollars to get a generic pill ready to market, makers of biosimilars say their development can require up to eight years and $200 million. The business won't work unless they gain significant market share, they say.
The biggest hitch seems to be the PBMs. Express Scripts and Optum Rx, two of the three giant PBMs, have put biosimilars on their formularies, but at the same price as Humira. That gives doctors and patients little incentive to switch. So Humira remains dominant for now.
"We're not seeing a lot of takeup of the biosimilar," said Keith Athow, pharmacy director for Tennessee's group insurance program, which covers 292,000 state and local employees and their dependents.
The ongoing saga of Humira — its peculiar appeal to drug middlemen and insurers, the patients who've benefited, the patients who've suffered as its list price jumped sixfold since 2003 — exemplifies the convoluted U.S. healthcare system, whose prescription drug coverage can be spotty and expenditures far more unequal than in other advanced economies.
Biologics like Humira occupy a growing share of U.S. healthcare spending, with their costs increasing 12.5% annually over the past five years. The drugs are increasingly important in treating cancers and autoimmune diseases, such as rheumatoid arthritis and inflammatory bowel disease, that afflict about 1 in 10 Americans.
Humira's $200 billion in global sales make it the best-selling drug in history. Its manufacturer, AbbVie, has aggressively defended the drug, filing more than 240 patents and deploying legal threats and tweaks to the product to keep patent protections and competitors at bay.
The company's fight for Humira didn't stop when the biosimilars finally appeared. The drugmaker has told investors it doesn't expect to lose much market share through 2024. "We are competing very effectively with the various biosimilar offerings," AbbVie CEO Richard Gonzalez said during an earnings call.
How AbbVie Maintains Market Share
One of AbbVie's strategies was to warn health plans that if they recommended biosimilars over Humira they would lose rebates on purchases of Skyrizi and Rinvoq, two drugs with no generic imitators that are each listed at about $120,000 a year, according to PBM officials. In other words, dropping one AbbVie drug would lead to higher costs for others.
Industry sources also say the PBMs persuaded AbbVie to increase its Humira rebates — the end-of-the-year payments, based on total use of the drug, which are mostly passed along by the PBMs to the health plan sponsors. Although rebate numbers are kept secret and vary widely, some reportedly jumped this year by 40% to 60% of the drug's list price.
The leading PBMs — Express Scripts, Optum, and CVS Caremark — are powerful players, each part of a giant health conglomerate that includes a leading insurer, specialty pharmacies, doctors' offices, and other businesses, some of them based overseas for tax advantages.
Yet challenges to PBM practices are mounting. The Federal Trade Commission began a major probe of the companies last year. Kroger canceled its pharmacy contract with Express Scripts last fall, saying it had no bargaining power in the arrangement, and, on Aug. 17, the insurer Blue Shield of California announced it was severing most of its business with CVS Caremark for similar reasons.
Critics of the top PBMs see the Humira biosimilars as a potential turning point for the secretive business processes that have contributed to stunningly high drug prices.
Although list prices for Humira are many times higher than those of the new biosimilars, discounts and rebates offered by AbbVie make its drug more competitive. But even if health plans were paying only, say, half of the net amount they pay for Humira now — and if several biosimilar makers charged as little as a sixth of the gross price — the costs could fall by around $30,000 a year per patient, said Greg Baker, CEO of AffirmedRx, a smaller PBM that is challenging the big companies.
Multiplied by the 313,000 patients currently prescribed Humira, that comes to about $9 billion in annual savings — a not inconsequential 1.4% of total national spending on pharmaceuticals in 2022.
The launch of the biosimilar Yusimry, which is being sold through Mark Cuban's Cost Plus Drugs pharmacy and elsewhere, "should send off alarms to the employers," said Juliana Reed, executive director of the Biosimilars Forum, an industry group. "They are going to ask, ‘Time out, why are you charging me 85% more, Mr. PBM, than what Mark Cuban is offering? What is going on in this system?'"
Cheaper drugs could make it easier for patients to pay for their drugs and presumably make them healthier. A KFF survey in 2022 found that nearly a fifth of adults reported not filling a prescription because of the cost. Reports of Humira patients quitting the drug for its cost are rife.
Convenience, Inertia, and Fear
When Sue Lee of suburban Louisville, Kentucky, retired as an insurance claims reviewer and went on Medicare in 2017, she learned that her monthly copay for Humira, which she took to treat painful plaque psoriasis, was rising from $60 to $8,000 a year.
It was a particularly bitter experience for Lee, now 81, because AbbVie had paid her for the previous three years to proselytize for the drug by chatting up dermatology nurses at fancy AbbVie-sponsored dinners. Casting about for a way to stay on the drug, Lee asked the company for help, but her income at the time was too high to qualify her for its assistance program.
"They were done with me," she said. Lee went off the drug, and within a few weeks the psoriasis came back with a vengeance. Sores covered her calves, torso, and even the tips of her ears. Months later she got relief by entering a clinical trial for another drug.
Health plans are motivated to keep Humira as a preferred choice out of convenience, inertia, and fear. While such data is secret, one Midwestern firm with 2,500 employees told KFF Health News that AbbVie had effectively lowered Humira's net cost to the company by 40% after July 1, the day most of the biosimilars launched.
One of the top three PBMs, CVS Caremark, announced in August that it was creating a partnership with drugmaker Sandoz to market its own cut-rate version of Humira, called Hyrimoz, in 2024. But Caremark didn't appear to be fully embracing even its own biosimilar. Officials from the PBM notified customers that Hyrimoz will be on the same tier as Humira to "maximize rebates" from AbbVie, Tennessee's Athow said.
Most of the rebates are passed along to health plans, the PBMs say. But if the state of Tennessee received a check for, say, $20 million at the end of last year, it was merely getting back some of the $48 million it already spent.
"It's a devil's bargain," said Michael Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions. "The happiest day of a benefit executive's year is walking into the CFO's office with a several-million-dollar check and saying, ‘Look what I got you!'"
Executives from the leading PBMs have said their clients prefer high-priced, high-rebate drugs, but that's not the whole story. Some of the fees and other payments that PBMs, distributors, consultants, and wholesalers earn are calculated based on a drug's price, which gives them equally misplaced incentives, said Antonio Ciaccia, CEO of 46Brooklyn, a nonprofit that researches the drug supply chain.
"The large intermediaries are wedded to inflated sticker prices," said Ciaccia.
AbbVie has warned some PBMs that if Humira isn't offered on the same tier as biosimilars it will stop paying rebates for the drug, according to Alex Jung, a forensic accountant who consults with the Midwest Business Group on Health.
AbbVie did not respond to requests for comment.
One of the low-cost Humira biosimilars, Organon's Hadlima, has made it onto several formularies, the ranked lists of drugs that health plans offer patients, since launching in February, but "access alone does not guarantee success" and doesn't mean patients will get the product, Kevin Ali, Organon's CEO, said in an earnings call in August.
If the biosimilars are priced no lower than Humira on health plan formularies, rheumatologists will lack an incentive to prescribe them. When PBMs put drugs on the same "tier" on a formulary, the patient's copay is generally the same.
In an emailed statement, Optum Rx said that by adding several biosimilars to its formularies at the same price as Humira, "we are fostering competition while ensuring the broadest possible choice and access for those we serve."
Switching a patient involves administrative costs for the patient, health plan, pharmacy, and doctor, said Marcus Snow, chair of the American College of Rheumatology's Committee on Rheumatologic Care.
Doctors' Inertia Is Powerful
Doctors seem reluctant to move patients off Humira. After years of struggling with insurance, the biggest concern of the patient and the rheumatologist, Snow said, is "forced switching by the insurer. If the patient is doing well, any change is concerning to them." Still, the American College of Rheumatology recently distributed a video informing patients of the availability of biosimilars, and "the data is there that there's virtually no difference," Snow said. "We know the cost of healthcare is exploding. But at the same time, my job is to make my patient better. That trumps everything."
"All things being equal, I like to keep the patient on the same drug," said Madelaine Feldman, a New Orleans rheumatologist.
Gastrointestinal specialists, who often prescribe Humira for inflammatory bowel disease, seem similarly conflicted. American Gastroenterological Association spokesperson Rachel Shubert said the group's policy guidance "opposes nonmedical switching" by an insurer, unless the decision is shared by provider and patient. But Siddharth Singh, chair of the group's clinical guidelines committee, said he would not hesitate to switch a new patient to a biosimilar, although "these decisions are largely insurance-driven."
HealthTrust, a company that procures drugs for about 2 million people, has had only five patients switch from Humira this year, said Cora Opsahl, director of the Service Employees International Union's 32BJ Health Fund, a New York state plan that procures drugs through HealthTrust.
But the biosimilar companies hope to slowly gain market footholds. Companies like Coherus will have a niche and "they might be on the front end of a wave," said Ciaccia, given employers' growing demands for change in the system.
The $2,000 out-of-pocket cap on Medicare drug spending that goes into effect in 2025 under the Inflation Reduction Act could spur more interest in biosimilars. With insurers on the hook for more of a drug's cost, they should be looking for cheaper options.
For Kaiser Permanente, the move to biosimilars was obvious once the company determined they were safe and effective, said Mary Beth Lang, KP's chief pharmacy officer. The first Humira biosimilar, Amjevita, was 55% cheaper than the original drug, and she indicated that KP was paying even less since more drastically discounted biosimilars launched. Switched patients pay less for their medication than before, she said, and very few have tried to get back on Humira.
Prescryptive, a small PBM that promises transparent policies, switched 100% of its patients after most of the other biosimilars entered the market July 1 "with absolutely no interruption of therapy, no complaints, and no changes," said Rich Lieblich, the company's vice president for clinical services and industry relations.
AbbVie declined to respond to him with a competitive price, he said.
Nurses, researchers, and workplace safety officers worry new guidelines from the Centers for Disease Control and Prevention might reduce protection against the coronavirus and other airborne pathogens in hospitals.
A CDC advisory committee has been updating its 2007 standards for infection control in hospitals this year. Many healthcare professionals and scientists expressed outrage after the group released a draft of its proposals in June.
The draft controversially concluded that N95 face masks are equivalent to looser, surgical face masks in certain settings — and that doctors and nurses need to wear only surgical masks when treating patients infected by "common, endemic" viruses, like those that cause the seasonal flu.
The committee was slated to vote on the changes on Aug. 22, but it postponed action until November. Once the advice is final, the CDC begins a process of turning the committee's assessment into guidelines that hospitals throughout the United States typically follow. After the meeting, members of the public expressed concern about where the CDC was headed, especially as covid-19 cases rise. Nationwide, hospital admissions and deaths due to covid have been increasing for several consecutive weeks.
"Healthcare facilities are where some of the most vulnerable people in our population have to frequent or stay," said Gwendolyn Hill, a research intern at Cedars-Sinai Medical Center in Los Angeles, after the committee's presentation. She said N95 masks, ventilation, and air-purifying technology can lower rates of covid transmission within hospital walls and "help ensure that people are not leaving sicker than they came."
"We are very happy to receive feedback," Alexander Kallen, chief of the Prevention and Response Branch in the CDC's Division of Healthcare Quality Promotion, told KFF Health News. "It is our goal to develop a guideline that is protective of patients, visitors, and health workers." He added that the draft guidelines are far from final.
In June, members of the CDC's group — the Healthcare Infection Control Practices Advisory Committee — presented a draft of their report, citing studies that found no difference in infection rates among health providers who wore N95 masks versus surgical masks in the clinic. They noted flaws in the data. For example, many health workers who got covid in the trials were not infected while wearing their masks at work. But still, they concluded the masks were equivalent.
Their conclusion runs contrary to the CDC's 2022 report, which found that an N95 mask cuts the odds of testing positive for the coronavirus by 83%, compared with 66% for surgical masks and 56% for cloth masks. It also excludes a large clinical trial published in 2017 finding that N95 masks were far superior to surgical masks in protecting health workers from influenza infections. And it contradicts an extensive evaluation by the Royal Society, the United Kingdom's national academy of sciences, finding that N95 masks, also called N95 respirators, were more effective against covid than surgical masks in healthcare settings around the world.
"It's shocking to suggest that we need more studies to know whether N95 respirators are effective against an airborne pathogen," said Kaitlin Sundling, a physician and pathologist at the University of Wisconsin-Madison, in a comment following the June meeting. "The science of N95 respirators is well established and based on physical properties, engineered filtered materials, and our scientific understanding of how airborne transmission works."
Her assertion is backed by the California occupational safety agency, Cal/OSHA, whose rules on protecting at-risk workers from infections might be at odds with the CDC's if the proposals are adopted. "The CDC must not undermine respiratory protection regulation by making the false and misleading claim that there is no difference in protection" between N95 masks and surgical masks, commented Deborah Gold, an industrial hygienist at Cal/OSHA, at the August meeting.
Researchers and occupational safety experts were also perplexed by how the committee categorized airborne pathogens. A surgical mask, rather than an N95, was suggested as protection for a category they created for "common, endemic" viruses that spread over short distances, and "for which individuals and communities are expected to have some immunity." Three committee representatives, researchers Hilary Babcock, Erica Shenoy, and Sharon Wright, were among the authors of a June editorial arguing that hospitals should no longer require all healthcare workers, patients, and visitors to wear masks in hospitals. "The time has come to deimplement policies that are not appropriate for an endemic pathogen," they wrote.
However, in a call with KFF Health News, Kallen clarified that the committee put coronaviruses that cause colds in that category, but not yet the coronavirus causing covid.
The committee's next tier consisted of viruses in a "pandemic-phase," when the pathogen is new and little immunity through infection or vaccination exists. It recommended that health workers wear an N95 mask when treating patients infected by bugs in this category. Its third, highest tier of protection was reserved for pathogens like those causing measles and tuberculosis, which, they claimed, can spread further than lower-tier threats and require an N95.
Virologists said the committee's categories hold little water, biologically speaking. A pathogen's mode of spreading isn't affected by how common it is; common viruses can still harm vulnerable populations; and many viruses, including SARS-CoV-2, can travel significant distances on microscopic droplets suspended in the air.
"Large COVID outbreaks in prisons and long-term healthcare facilities have demonstrated that the behavior of infectious aerosols is not easily classified, and these aerosols are not easily confined," wrote the deputy chief of health at Cal/OSHA, Eric Berg, in a letter of concern to the CDC committee, obtained by KFF Health News.
The committee pitted its assessment of N95 masks against their drawbacks. Its draft cites a study from Singapore in which nearly a third of healthcare personnel, mostly nurses, said wearing such masks negatively affected their work, causing acne and other problems exacerbated by hot and humid conditions and prolonged shifts. Rather than discard the masks, the authors of that study recommend better-fitting masks and rest breaks.
Noha Aboelata, a doctor and the CEO of Roots Community Health Center in Oakland, California, agrees. "There are other strategies to bring to bear, like improved mask design and better testing," she said, "if we decide it's unacceptable to give a patient covid when they go to the hospital."
Aboelata is one of hundreds of doctors, researchers, and others who signed a letter to CDC Director Mandy Cohen in July, expressing concern that the CDC committee will weaken protections in hospitals. They also warned that scaling back on N95 masks could have repercussions on emergency stockpiles, rendering doctors and nurses as vulnerable as they were in 2020 when mask shortages fueled infections. More than 3,600 health workers died in the first year of the pandemic in the United States, according to a joint investigation by KFF Health News and The Guardian.
The concerned clinicians hope the committee will reconsider its report in light of additional studies and perspectives before November. Referring to the draft, Rocelyn de Leon-Minch, an industrial hygienist for National Nurses United, said, "If they end up codifying these standards of care, it will have a disastrous impact on patient safety and impact our ability to respond to future health crises."
Meg Bakewell, who has cancer and cancer-related heart disease, sometimes emails her primary care physician, oncologist, and cardiologist asking them for medical advice when she experiences urgent symptoms such as pain or shortness of breath.
But she was a little surprised when, for the first time, she got a bill — a $13 copay — for an emailed consultation she had with her primary care doctor at University of Michigan Health. The health system had begun charging in 2020 for "e-visits" through its MyChart portal. Even though her out-of-pocket cost on the $37 charge was small, now she's worried about how much she'll have to pay for future e-visits, which help her decide whether she needs to see one of her doctors in person. Her standard copay for an office visit is $25.
"If I send a message to all three doctors, that could be three copays, or $75," said Bakewell, a University of Michigan teaching consultant who lives in Ypsilanti, Michigan, and is on long-term disability leave. "It's the vagueness of the whole thing. You don't know if you'll get into a copay or not. It just makes me hesitate."
Spurred by the sharp rise in email messaging during the covid pandemic, a growing number of health systems around the country have started charging patients when physicians and other clinicians send replies to their messages. Health systems that have adopted billing for some e-visits include a number of the nation's premier medical institutions: Cleveland Clinic, Mayo Clinic, San Francisco-based UCSF Health, Vanderbilt Health, St. Louis-based BJC HealthCare, Chicago-based Northwestern Medicine, and the U.S. Department of Veterans Affairs.
Billing for e-visits, however, raises knotty questions about the balance between fairly compensating providers for their time and enhancing patients' access to care. Physicians and patient advocates fret particularly about the potential financial impact on lower-income people and those whose health conditions make it hard for them to see providers in person or talk to them on the phone or through video.
A large part of the motivation for the billing is to reduce the messaging. Soon after the pandemic hit, health systems saw a 50% increase in emails from patients, with primary care physicians facing the biggest burden, said A Jay Holmgren, an assistant professor of health informatics at UCSF, the University of California-San Francisco. System executives sought to compensate doctors and other providers for the extensive time they were spending answering emails, while prodding patients to think more carefully about whether an in-person visit might be more appropriate than a lengthy message.
After UCSF started charging in November 2021, the rate of patient messaging dipped slightly, by about 2%, Holmgren and his colleagues found.
Like UCSF, many other health systems now charge fees when doctors or other clinicians respond to patient messages that take five minutes or more of the provider's time over a seven-day period and require medical expertise. They use three billing codes for e-visits, implemented in 2020 by the federal Centers for Medicare & Medicaid Services.
E-visits that are eligible for billing include those relating to changes in medication, new symptoms, changes or checkups related to a long-term condition, and requests to complete medical forms. There's no charge for messages about appointment scheduling, prescription refills, or other routine matters that don't require medical expertise.
So far, UCSF patients are being billed for only 2% to 3% of eligible e-visits, at least partly because it takes clinicians extra time and effort to figure out whether an email encounter qualifies for billing, Holmgren said.
At Cleveland Clinic, only 1.8% of eligible email visits are being billed to patients, said Eric Boose, the system's associate chief medical information officer. There are three billing rates based on the time the clinician takes to prepare the message — five to 10 minutes, 11 to 20 minutes, and 21 minutes or more. He said patients haven't complained about the new billing policy, which started last November, and that they've become "a little smarter and more succinct" in their messages, rather than sending multiple messages a week.
The doctors at Cleveland Clinic, like those at most health systems that bill for e-visits, don't personally pocket the payments. Instead, they get productivity credits, which theoretically enables them to reduce their hours seeing patients in the office.
"Most of our physicians said it's about time we're getting compensated for our time in messaging," Boose said. "We're hoping this helps them feel less stressed and burned out, and that they can get home to their families earlier."
"It's been a frustration for many physicians for many years that we weren't reimbursed for our ‘pajama-time' work," said Sterling Ransone, the chair of the American Academy of Family Physicians' Board of Directors. Ransone's employer, Riverside Health System in Virginia, started billing for e-visits in 2020. "We do it because it's the right thing for patients. But rarely do you see other professions do all this online work for free," he said.
"We see physicians working two to four hours every evening on their patient emails after their shift is over, and that's not sustainable," said CT Lin, the chief medical information officer at University of Colorado Health, which has not yet adopted billing for email visits. "But we worry that patients with complex disease will stop messaging us entirely because of this copay risk."
Many health care professionals share the fear that billing for messages will adversely affect medically and socially vulnerable patients. Even a relatively small copay could discourage patients from emailing their clinicians for medical advice in appropriate situations, said Caitlin Donovan, a senior director at the National Patient Advocate Foundation, citing studies showing the dramatic negative impact of copays on medication adherence.
Holmgren said that while patients with minor acute conditions may not mind paying for an email visit rather than coming into the office, the new billing policies could dissuade patients with serious chronic conditions from messaging their doctors. "We don't know who is negatively affected," he said. "Are we discouraging high-value messages that produce a lot of health gains? That is a serious concern."
Due to this worry, Lin said, University of Colorado Health is experimenting with an alternative way of easing the time burden of e-visits on physicians. Working with Epic, the dominant electronic health record vendor, it will have an artificial intelligence chatbot draft email replies to patient messages. The chatbot's draft message will then be edited by the provider. Several other health systems are already using the tool.
There also are questions about price transparency — whether patients can know when and how much they'll have to pay for an email visit, especially since much depends on their health plan's deductibles and copays.
While Medicare, Medicaid, and most private health plans cover email visits, not all do, experts say. Coverage may depend on the contract between a health system and an insurer. Ransone said Elevance Health, a Blue Cross Blue Shield carrier, recently told his health system it would no longer pay for email or telephonic visits in its commercial or Medicaid plans in Virginia. An Elevance spokesperson declined to comment.
Another price concern is that patients who are uninsured or have high-deductible plans may face the full cost of an email visit, which could run as high as $160.
At University of Michigan Health, where Bakewell receives her care, patients receive a portal alert prior to sending a message that there may be a charge; they must click a box indicating they understand, said spokesperson Mary Masson.
But Donovan said that leaves a lot of room for uncertainty. "How is the patient supposed to know whether something will take five minutes?" Donovan said. "And knowing what you'll be charged is impossible because of health plan design. Just saying patients could be charged is not providing transparency."
As a fourth-year ophthalmology resident at Emory University School of Medicine, Riley Lyons' biggest responsibilities include triage: When a patient comes in with an eye-related complaint, Lyons must make an immediate assessment of its urgency.
He often finds patients have already turned to "Dr. Google." Online, Lyons said, they are likely to find that "any number of terrible things could be going on based on the symptoms that they're experiencing."
So, when two of Lyons' fellow ophthalmologists at Emory came to him and suggested evaluating the accuracy of the AI chatbot ChatGPT in diagnosing eye-related complaints, he jumped at the chance.
In June, Lyons and his colleagues reported in medRxiv, an online publisher of health science preprints, that ChatGPT compared quite well to human doctors who reviewed the same symptoms — and performed vastly better than the symptom checker on the popular health website WebMD. And despite the much-publicized "hallucination" problem known to afflict ChatGPT — its habit of occasionally making outright false statements — the Emory study reported that the most recent version of ChatGPT made zero "grossly inaccurate" statements when presented with a standard set of eye complaints.
The relative proficiency of ChatGPT, which debuted in November 2022, was a surprise to Lyons and his co-authors. The artificial intelligence engine "is definitely an improvement over just putting something into a Google search bar and seeing what you find," said co-author Nieraj Jain, an assistant professor at the Emory Eye Center who specializes in vitreoretinal surgery and disease.
But the findings underscore a challenge facing the health care industry as it assesses the promise and pitfalls of generative AI, the type of artificial intelligence used by ChatGPT: The accuracy of chatbot-delivered medical information may represent an improvement over Dr. Google, but there are still many questions about how to integrate this new technology into health care systems with the same safeguards historically applied to the introduction of new drugs or medical devices.
The smooth syntax, authoritative tone, and dexterity of generative AI have drawn extraordinary attention from all sectors of society, with some comparing its future impact to that of the internet itself. In health care, companies are working feverishly to implement generative AI in areas such as radiology and medical records.
When it comes to consumer chatbots, though, there is still caution, even though the technology is already widely available — and better than many alternatives. Many doctors believe AI-based medical tools should undergo an approval process similar to the FDA's regime for drugs, but that would be years away. It's unclear how such a regime might apply to general-purpose AIs like ChatGPT.
"There's no question we have issues with access to care, and whether or not it is a good idea to deploy ChatGPT to cover the holes or fill the gaps in access, it's going to happen and it's happening already," said Jain. "People have already discovered its utility. So, we need to understand the potential advantages and the pitfalls."
The Emory study is not alone in ratifying the relative accuracy of the new generation of AI chatbots. A report published in Nature in early July by a group led by Google computer scientists said answers generated by Med-PaLM, an AI chatbot the company built specifically for medical use, "compare favorably with answers given by clinicians."
AI may also have better bedside manner. Another study, published in April by researchers from the University of California-San Diego and other institutions, even noted that health care professionals rated ChatGPT answers as more empathetic than responses from human doctors.
Indeed, a number of companies are exploring how chatbots could be used for mental health therapy, and some investors in the companies are betting that healthy people might also enjoy chatting and even bonding with an AI "friend." The company behind Replika, one of the most advanced of that genre, markets its chatbot as, "The AI companion who cares. Always here to listen and talk. Always on your side."
"We need physicians to start realizing that these new tools are here to stay and they're offering new capabilities both to physicians and patients," said James Benoit, an AI consultant. While a postdoctoral fellow in nursing at the University of Alberta in Canada, he published a study in February reporting that ChatGPT significantly outperformed online symptom checkers in evaluating a set of medical scenarios. "They are accurate enough at this point to start meriting some consideration," he said.
Still, even the researchers who have demonstrated ChatGPT's relative reliability are cautious about recommending that patients put their full trust in the current state of AI. For many medical professionals, AI chatbots are an invitation to trouble: They cite a host of issues relating to privacy, safety, bias, liability, transparency, and the current absence of regulatory oversight.
The proposition that AI should be embraced because it represents a marginal improvement over Dr. Google is unconvincing, these critics say.
"That's a little bit of a disappointing bar to set, isn't it?" said Mason Marks, a professor and MD who specializes in health law at Florida State University. He recently wrote an opinion piece on AI chatbots and privacy in the Journal of the American Medical Association. "I don't know how helpful it is to say, ‘Well, let's just throw this conversational AI on as a band-aid to make up for these deeper systemic issues,'" he said to KFF Health News.
The biggest danger, in his view, is the likelihood that market incentives will result in AI interfaces designed to steer patients to particular drugs or medical services. "Companies might want to push a particular product over another," said Marks. "The potential for exploitation of people and the commercialization of data is unprecedented."
OpenAI, the company that developed ChatGPT, also urged caution.
"OpenAI's models are not fine-tuned to provide medical information," a company spokesperson said. "You should never use our models to provide diagnostic or treatment services for serious medical conditions."
John Ayers, a computational epidemiologist who was the lead author of the UCSD study, said that as with other medical interventions, the focus should be on patient outcomes.
"If regulators came out and said that if you want to provide patient services using a chatbot, you have to demonstrate that chatbots improve patient outcomes, then randomized controlled trials would be registered tomorrow for a host of outcomes," Ayers said.
He would like to see a more urgent stance from regulators.
"One hundred million people have ChatGPT on their phone," said Ayers, "and are asking questions right now. People are going to use chatbots with or without us."
At present, though, there are few signs that rigorous testing of AIs for safety and effectiveness is imminent. In May, Robert Califf, the commissioner of the FDA, described "the regulation of large language models as critical to our future," but aside from recommending that regulators be "nimble" in their approach, he offered few details.
In the meantime, the race is on. In July, The Wall Street Journal reported that the Mayo Clinic was partnering with Google to integrate the Med-PaLM 2 chatbot into its system. In June, WebMD announced it was partnering with a Pasadena, California-based startup, HIA Technologies Inc., to provide interactive "digital health assistants." And the ongoing integration of AI into both Microsoft's Bing and Google Search suggests that Dr. Google is already well on its way to being replaced by Dr. Chatbot.
Since the National Suicide Prevention Lifeline transitioned a year ago to the three-digit crisis phone number 988, there has been a 33% increase in the number of calls, chats, and texts to the hotline.
But even with that early sign of success, the program's financial future is shaky.
Over the past two years, the federal government has provided about $1 billion from the American Rescue Plan and Bipartisan Safer Communities acts to launch the number, designed as an alternative to 911 for those experiencing a mental health crisis. After that infusion runs out, it's up to states to foot the bill for their call centers.
"We don't know what Congress will allocate in the future," said Danielle Bennett, a spokesperson for the federal Substance Abuse and Mental Health Services Administration, which oversees 988. "But the hope is that there will be continued strong bipartisan support for funding 988 at the level it needs to be funded at and that states will also create funding mechanisms that make sense for their states."
Only eight states have enacted legislation to sustain 988 through phone fees, according to the National Alliance on Mental Illness, which is tracking state funding for the system. Others have budgeted short-term funding. But many predominantly rural states, where mental health services are in short supply and suicide rates are often higher than in more urban states, have not made long-term plans to provide support.
According to a KFF analysis of Lifeline data, since last summer 988 has received almost 5 million contacts, including calls, texts, and chat messages. And state programs managed to answer a high percentage of 988 calls instead of routing them to call centers elsewhere.
Mental health advocates and state 988 operators say that to keep those in-state staffers answering phones, promises of long-term funding are critical.
In the earlier version of the National Suicide Prevention Lifeline, "call centers, basically, were not paid," said Chuck Ingoglia, president and CEO of the National Council for Mental Wellbeing, which advocates for sustained investment in 988. "There is a growing recognition that we're making it easier for people to contact and, therefore, we need to build more infrastructure."
In Ohio, where data from spring 2023 shows local operators responded to 88% of calls, lawmakers recently acknowledged the need for stable funding. In July, Republican Gov. Mike DeWine approved $46.5 million for 988 in the state's biennial budget. But that support will last only two years.
"It is still not the most secure form of funding that we would hope for," said Brian Stroh, CEO and medical director of Netcare Access, a call center that serves four rural counties on Ohio's eastern border. "What if we turned the tables a little bit and said we're only going to fund 911 a little bit at a time? That's a really hard proposition to work under."
SAMHSA, which distributes 988 grant funding, likens the number to 911 except that it is strictly for mental health crises. The law that mandated 988's creation, the National Suicide Hotline Designation Act of 2020, allows states to install phone surcharges to support 988 indefinitely, similar to the funding structure for 911.
Stroh said that, while he is "pretty pleased" with how the first year of 988 went for Netcare Access, with short-term funding it's hard to reassure prospective call operators of job security or compete with rising wages in other industries.
For Kristin McCloud, executive director of Pathways of Central Ohio, a call center that also responds to rural counties in the eastern part of the state, the $573,056 her center received in 988's first year was exactly what it needed. She had money for training staffers to answer crisis calls and supplying them with computers for remote work.
During that time, operators answered 2,316 calls — almost double the previous year's volume.
"I really feel like, for once, we were given adequate funding," said McCloud, who has worked in social services more than 35 years.
According to SAMHSA, before 988 grants, most call centers received minimal federal funding to answer Lifeline calls, typically between $2,500 and $5,000 annually.
Like Stroh, McCloud views Ohio's recent allocation as positive but hopes the state installs a permanent funding plan. A bill pending in the legislature would add a surcharge to phone bills to help fund 988, as a few other states have done.
All but one of the eastern counties that Pathways of Central Ohio and Netcare Access serve are designated by the state's Department of Health Primary Care Office as mental health professional shortage areas.
In North Dakota, where almost every county is rural and has such a designation, a single call center manages the state's 988 program.
That center, FirstLink, has seen a significant increase in mental health crisis calls since the transition to 988. Comparing the first six months of 2023 to the first of 2022 alone, calls have increased 55%, according to Jeremy Brown, outreach director.
The demand has "helped us with sparking conversations with our state legislature about funding and support," he said.
In May, Republican Gov. Doug Burgum approved a one-time $1.86 million appropriation to 988 in the state's biennial budget.
Brown said the funding will not only allow FirstLink to train staff members and keep phone lines updated, but it will also help human service centers support mobile crisis units that can be dispatched to callers if necessary.
Though mobile crisis unit dispatch is an option, FirstLink prefers to deescalate crises over the phone, said Dallas Tufty, one of FirstLink's operators.
"The only time that we'll really call for rescue or something is if that person is in immediate, imminent danger of their life," they said.
Tufty works 40 hours a week at FirstLink, at least six of those spent answering calls and messages to 988. Operators like Tufty also answer FirstLink's 211 line, another program that provides health and social service assistance information to callers. It's not an emergency line, but on occasion people in crisis call there instead of 988.
No matter which line a call comes through, Tufty said, the hard part is not knowing what happens once the call is over.
"There's times where you don't really know if they're going to call back because they need to again," they said. "Even if you make a plan, there's only so much we can do on the phone to hold people to those plans."
While North Dakota and Ohio fund 988 through their state budgets, not all states do. In Montana, Republican Gov. Greg Gianforte recently dedicated $300 million to the behavioral health and developmental disabilities systems that, among other uses, can fund " opportunities for Montanans to receive integrated physical and behavioral health care," according to the bill authorizing the money. But the state has yet to address 988 funding specifically.
In 2021, Montana lawmakers declined to advance a bill that would have established a phone fee and corresponding revenue account to fund 988 ahead of its launch.
At this point, "if it is able to be funded in the budget, without new legislation, that's just fine with us," said Matt Kuntz, executive director of Montana's chapter of the National Alliance on Mental Illness. "We just want to make sure that it's sustainably funded, because it is an important service."
Kirsch's Aug. 6 post referred to the Vaccine Adverse Event Reporting System, a federal database.
"VAERS data is crystal clear," the headline read. "The COVID vaccines are killing an estimated 1 person per 1,000 doses (676,000 dead Americans)."
The blog post was shared on social media and flagged as part of Meta's efforts to combat false news and misinformation on its News Feed. (Read more about PolitiFact's partnership with Meta, which owns Facebook and Instagram.)
The data Kirsch used is from an anti-vaccine group's alternative gateway to VAERS. VAERS, which includes unverified reports, cannot be used to determine whether a vaccine caused death. Kirsch did not reply to our request for information.
"Statements that imply that reports of deaths to VAERS following vaccination equate to deaths caused by vaccination are scientifically inaccurate, misleading and irresponsible," the Centers for Disease Control and Prevention, which co-manages the database with the FDA, told PolitiFact.
The CDC added that it "has not detected any unusual or unexpected patterns for deaths following immunization that would indicate that COVID vaccines are causing or contributing to deaths, outside of the nine confirmed" thrombosis with thrombocytopenia syndrome, or TTS, deaths following the Johnson & Johnson/Janssen vaccine, which is no longer offered in the U.S.
TTS, which causes blood clots, has occurred in approximately four cases per million doses administered, according to the CDC.
VAERS helps researchers collect data on vaccine aftereffects and detect patterns that may warrant a closer look.
The CDC cautions that VAERS results, which come from unverified reports anyone can make, are not enough to determine whether a vaccine causes a particular adverse event.
For the covid vaccines, VAERS has received a flood of reports, and they have become especially potent fuel for misinformation.
Kirsch made his claim not by using VAERS directly, but with an alternative gateway to VAERS from the anti-vaccine National Vaccine Information Center.
That website draws on raw and limited VAERS reports, which can include incomplete or inaccurate information. These reports do not provide enough information to determine whether a vaccine caused a particular adverse event.
There is no evidence that covid vaccines have killed Americans in large numbers, let alone 676,000. We rate the claim Pants on Fire!
The Biden administration last year promised to establish minimum staffing levels for the nation's roughly 15,000 nursing homes. It was the centerpiece of an agenda to overhaul an industry the government said was rife with substandard care and failures to follow federal quality rules.
But a research study the Centers for Medicare & Medicaid Services commissioned to identify the appropriate level of staffing made no specific recommendations and analyzed only staffing levels lower than what the previous major federal evaluation had considered best, according to a copy of the study reviewed Monday by California Healthline. Instead, the new study said there was no single staffing level that would guarantee quality care, although the report estimated that higher staffing levels would lead to fewer hospitalizations and emergency room visits, faster care, and fewer failures to provide care.
Patient advocates said the report was the latest sign that the administration would fall short of its pledge to establish robust staffing levels to protect the 1.2 million Americans in skilled nursing facilities. Already, the administration is six months behind its self-imposed deadline of February to propose new rules. Those proposals, which have not been released, have been under evaluation since May by the Office of Management and Budget. The study, dated June 2023, has not been formally released either, but a copy was posted on the CMS website. It was taken down shortly after California Healthline published this article.
"It's honestly heartbreaking," said Richard Mollot, executive director of the Long Term Care Community Coalition, a nonprofit that advocates for nursing home patients in New York state. "I just don't see how this doesn't ultimately put more residents at risk of neglect and abuse. Putting the government's imprimatur on a standard that is patently unsafe is going to make it much more difficult for surveyors to hold facilities accountable for the harm caused by understaffing nursing homes."
For months, the nursing home industry has been lobbying strenuously against a uniform ratio of patients to nurses and aides. "What is clear as you look across the country is every nursing home is unique and a one-size-fits-all approach does not work," said Holly Harmon, senior vice president of quality, regulatory, and clinical services at the American Health Care Association, an industry trade group.
Nursing home groups have emphasized the widespread difficulty in finding workers willing to fill existing certified nursing assistant jobs, which are often grueling and pay less than what workers can make at retail stores. Homes say their licensed nurses are often drawn away by other jobs, such as better-paying hospital positions. "The workforce challenges are real," said Katie Smith Sloan, president and CEO of LeadingAge, an association that represents nonprofit nursing homes.
The industry has also argued that if the government wants it to hire more workers it needs to increase the payments it makes through state Medicaid programs, which are the largest payor for nursing home care. Advocates and some researchers have argued that nursing homes, particularly for-profit ones, can afford to pay employees more and hire additional staff if they forsake some of the profits they give investors.
"Certainly, facilities haven't put all the dollars back into direct care over the years," said David Grabowski, a professor of health care policy at Harvard Medical School. "But for certain facilities, it's going to be a big lift to pay for" higher staffing levels, he said in an interview last week.
In a written statement to KFF Health News, Jonathan Blum, CMS' principal deputy administrator and chief operating officer, said the study had been posted in error. "CMS is committed to holding nursing homes accountable for protecting the health and safety of all residents, and adequate staffing is critical to this effort," he said. "CMS's proposal is being developed using a rigorous process that draws on a wide range of source information, including extensive input from residents and their families, workers, administrators, experts, and other stakeholders. Our focus is on advancing implementable solutions that promote safe, quality care for residents." Blum's statement called the study a "draft," although nothing in the 478-page study indicated it was preliminary.
The study has been widely anticipated, both because of the central role the administration said it would play in its policy and because the last major CMS study, conducted in 2001, had concluded that nursing home care improves as staffing increases up to the level of about one worker for every six residents. The formal metric for that staffing level was 4.1 staff hours per resident per day, which is calculated by dividing the number of total hours worked by nurses and aides on duty daily by the number of residents present each day.
CMS never adopted that staffing ratio and instead gave each nursing home discretion to determine a reasonable staffing level. Regulators rarely cite nursing homes for insufficient staffing, even though independent researchers have concluded low staffing is the root of many nursing home injuries. Too few nurse aides, for instance, often means immobile residents are not repositioned in bed, causing bedsores that can lead to infection. Low staffing also is often responsible for indignities residents face, such as being left in soiled bedsheets for hours.
The new research was conducted by Abt Associates, a regular contractor for CMS that also performed the 2001 study. But the report, in an implicit disagreement with its predecessor, concluded there was "no obvious plateau at which quality and safety are maximized or ‘cliff' below which quality and safety steeply decline." Abt referred questions about the study to CMS.
The study evaluated four minimum staffing levels, all of which were below the 4.1 daily staff hours that the prior study had identified as ideal. The highest was 3.88 daily staff hours. At that level, the study estimated 0.6% of residents would get delayed care and 0.002% would not get needed care. It also said that staffing level would result in 12,100 fewer hospitalizations of Medicare residents and 14,800 fewer emergency room visits. The report said three-quarters of nursing homes would need to add staff to meet that level and that it would cost $5.3 billion extra each year.
The lowest staffing level the report analyzed was 3.3 daily staffing hours. At that level, the report said, 3.3% of residents would get delayed care and 0.04% would not get needed care. That level would reduce hospitalizations of Medicare residents by 5,800 and lead to 4,500 fewer emergency room visits. More than half of nursing homes would have to increase staff levels to meet that ratio, the report said, and it would cost $1.5 billion more each year.
Charlene Harrington, a professor emeritus of nursing at the University of California-San Francisco, said CMS "sabotaged" the push for sufficiently high staffing through the instructions it gave its contractor. "Every threshold they looked at was below 4.1," she said. "How can that possibly be a decent study? It's just unacceptable."
This article was produced by KFF Health News, formerly known as Kaiser Health News (KHN), a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.
[UPDATE: This article was last revised at 12:30 p.m. PT to reflect that the Centers for Medicare & Medicaid Services removed a copy of the study from its website after this article was published, and to include reaction from CMS leadership and Abt Associates.]
BOULDER, Colo. — Mad-scientist kind of moments happen fairly often for nanoengineer Carson Bruns. A few months ago in his lab at the University of Colorado-Boulder, he tested his latest invention on his own arm and asked a colleague for help.
"We were like, 'OK, we're going to tattoo ourselves. Can you help us today?'" he said.
The tattoo is like a freckle, a little blue dot. But he can turn it on and off. Like the way a mood ring changes color with temperature, this tattoo changes with light: Ultraviolet light to turn it on, daylight (or even a flashlight) to turn it off.
"You can go to court and turn it off, and then go to the party and turn it on. And then go to Grandma's house and turn it off," said Bruns, who is affiliated with the university's ATLAS Institute, which prides itself on fostering out-of-the-box ideas.
Bruns started a company with tattoo-artist-to-the-stars Keith "Bang Bang" McCurdy, along with a former doctoral student. Early next year, they plan to release their first product, Magic Ink, to a group of handpicked artists. The business partners have long-term hopes for smart tattoos that have a health value, but cosmetics are cheaper and simpler to get to consumers than medical devices. So, that's where they're starting.
The new ink will enter a market in a moment of flux for the regulation of cosmetics. The FDA steps in to urge a recall if an ink causes a bacterial outbreak but traditionally has not exercised its regulatory might over tattoo ink products as it does with other products that go into the body. (Tattoo inks don't even have to be sterile.) But following the Modernization of Cosmetics Regulation Act of 2022, the FDA is expanding its authority over tattoo manufacturers. The agency is now accepting comments on draft guidance about tattoo ink preparation.
"To be honest with you, I don't think either the FDA or the tattoo ink industry really knows what that's going to look like," said John Swierk, a chemist at the State University of New York-Binghamton. But, he said, the law does mean "the FDA has a new charge to really ensure that labeling is correct and good manufacturing practices are being followed."
Bruns said Magic Ink is made of particles of dye, encased in beads of plexiglass — the same polymethyl methacrylate material in those dermal fillers people use to plump their lips. Dermal fillers are FDA-approved, whereas tattoo ink contents can be like a black box.
Swierk said many of the tattoo pigments in use now have been around a long time, which gives some users a base comfort level about their safety. But a new material comes with new unknowns.
"If somebody is going to get tattooed with Magic Ink, they have to accept a degree of uncertainty about what the future is going to hold with that ink," Swierk said.
Bruns recently received funding from the National Science Foundation, which he plans to use for probing which size and type of nanoparticles are less likely to irritate the immune system and more likely to stay put where they're placed. The immune system has been known to haul off bits of tattoo ink to the lymph nodes, dyeing them blue and green.
While Magic Ink is a cool party trick, Bruns and his colleagues have made other inks that align with their bigger goal: to make tattoos helpful.
Bruns and his colleagues have made one that changes color when exposed to gamma radiation — envisioning it might someday work as a built-in exposure meter. Another ink shows up when it is time to put on sunscreen. He developed yet another ink intended to act as a permanent sunscreen. None of those are available to consumers, though the permanent sunscreen is furthest along. That ink has been tested in a small group of mice; the others have been tested on pigskin.
Bruns started a company, Hyprskn, a few years ago, when Bang Bang came across his work and suggested they team up.
The name Bang Bang might not ring a bell, but the tattoos he's done are very public: They're cascading down Rihanna, scattered across Miley Cyrus, and peering out from LeBron James, among others. Turns out, Bang Bang loves tech.
"I would like to wave my hand and pay with my AmEx, or walk up to my car and it knows it's me," he said. Or, he continued, maybe there could even be health applications — like alerting him if his blood sugar is high or low, just by looking at the color of his tattoos.
Scientifically, that is still way far off. If tattoo ink were to make the leap from cosmetics into the medical realm, it would require clearing all sorts of regulatory hoops.
"There's a lot of steps between where we are today and getting a functional tattoo that's going to tell you something about your health," Swierk said. "A lot of steps."
But Bang Bang thinks the product they're taking preorders for is step one toward building a consumer base that would be open to tattooable tech.
The first product they're offering to consumers is Magic Ink. It's a lot like that blue freckle on Bruns' arm, except it's red. For now, that's the only color available for purchase.
"That's how you can excite people," said Bang Bang. "It's almost a Trojan horse into that new goal of how do we bridge the gap between tattoo and technology."
It's $100 for a half-ounce bottle. That's a lot more than regular ink costs. If the product takes off, the University of Colorado-Boulder will also benefit, as it owns the intellectual property.
Bang Bang is among a few dozen people, many of them tattoo artists, who are already wearing the ink in their skin.
Tattoo artist Selina Medina has been in the business more than 20 years and used to work for an ink manufacturer. She spends a lot of time advocating for tattoo safety, volunteering with several national and international groups focused on the issue.
"I'd probably give it a year in the market before I would buy it. But it does look really interesting," said Medina, who is on the board of directors for the Alliance of Professional Tattooists.
Medina hopes this ink is different from the UV inks she saw pop up in the 2000s, which would glow under a black light.
"It seemed like an awesome idea, but then we noticed that it faded really fast," she said. "It would just disappear. We didn't know what it did. We didn't know where it went. And that was just kind of like, 'What the hell is this stuff?'"
She expects her customers will be clamoring for Magic Ink before she's ready to purchase it.
Looking further afield, some companies are already investing in technology embedded in the skin. A European company called DSruptive makes injectable thermometers. It said about 5,000 people — living primarily in Sweden, Japan, the U.S., and the United Kingdom — have had the devices installed. Ali Yetisen, an engineer at Imperial College London, said for companies eyeing tech embedded in the skin, diabetes is a big focus.
"That's where the money is. Most companies invest in this area," said Yetisen. The dream is to create something like a tattoo that could measure blood sugar in real time, and be long-lasting, he said.
"That's the holy grail of all medical diagnostics," he said.
While Bruns' inventions sense external factors like light and radiation, for manufacturers looking to develop in-body tech that reacts to the blood, there are other scientific hurdles. The immune system forms little shells around foreign bodies, effectively putting up a wall between a sensor and the blood.
No one has really figured a way around that yet, said Yetisen, but a lot of people are trying.
California doctors and state lawmakers are squaring off once again over the future of the Medical Board of California, which is responsible for licensing and disciplining doctors and has been criticized by patient advocates for years for being too lax.
A bill before the legislature would significantly increase the fees doctors pay to fund the medical board, which says it hasn't had the budget to carry out its mission properly. It would also mandate new procedures for investigating complaints.
Patient advocates say the board, which oversees about 150,000 physicians and surgeons with active licenses in the state, is hamstrung by a lack of funding and clunky processes, and that its shortcomings pose a risk to the public by allowing bad doctors to continue practicing. The board opened only about 1,000 investigations out of nearly 10,000 complaints last year, according to its 2022 annual report.
But the California Medical Association, which represents physicians, is again fighting proposed increases in the fee, which was unchanged for more than a decade before being raised in 2021 after a contentious debate. Now lawmakers want to boost the license renewal fee to $1,289 every two years, up from $863 currently.
The doctors' lobby largely defeated the 2021 efforts to strengthen the board, and critics say the group is trying to whittle away the board's power by depriving it of funding.
The legislation, sponsored by Sen. Richard Roth, a Riverside Democrat, would also require board staff to interview patients or families before closing their complaints, create a unit to better facilitate communications, and improve efficiency by changing procedures and adjusting standards of evidence for investigations.
Another provision would allow patients and relatives to make a statement during the investigation about how a doctor's negligence or misconduct affected them — similar to crime victims speaking during a sentencing hearing in criminal court.
The bill faces a pivotal vote in the state Assembly's Appropriations Committee this month.
Most California licensing boards are funded through license fees. Currently, dentists pay $668 for a two-year license renewal, plus other permitting fees such as $325 for general anesthesia or $650 for oral surgery. Attorneys actively practicing in California pay $510 annually.
But the medical association insisted in a memo that it "cannot agree to a fee increase of nearly 50% that will primarily go toward building a multimillion-dollar reserve fund and future programs for the Medical Board."
"If the bill is passed in its current form, it would have vast, negative impacts on the practice of medicine and healthcare delivery in California," it added.
George Soares, a legislative advocate for the California Medical Association, told lawmakers last month that the association would be willing to accept a fee increase, but that $1,289 is too much — more than double the national average for state medical licenses. A July working paper from the National Bureau of Economic Research found that physicians' annual earnings average $350,000 across the U.S.
The medical board supports the bill and says a fee hike is needed to cover operations, repay millions of dollars in loans, and establish a three-month reserve. Over the past two years, the Department of Consumer Affairs, which is responsible for the operations of the medical board and other licensing boards, has had to backfill the board's $79 million budget, using a total of $18 million in loans from Bureau of Automotive Repair license fees to cover the gap.
"The simple reality is that the board is not able to pay its bills," a spokesperson for the medical board read from a joint statement from Randy Hawkins, the vice president of the board, and Richard Thorp, a former president of the California Medical Association and current member of the board, at a committee hearing last month.
"We are physicians in private practice, and this fee increase will impact us personally, albeit at an increased cost of less than $20 per month," the statement read. "We do not see this as a burden but rather as an investment into the organization that helps ensure that physicians have the confidence of the patients that we are privileged to treat."
Roth points out that the medical board, which is composed of eight physicians and seven members of the public, has little control over staffing costs. Its 169 employees work for the state and are covered by labor agreements negotiated by statewide employee unions.
Consumer advocates say the opposition from the doctors' lobby is part of a years-long effort to weaken the board and deprive it of adequate funding.
A report about the medical board's operations conducted by a consulting firm that serves as the enforcement monitor for the board, Alexan RPM Inc., underscored the board's financial challenges and recommended adopting automatic annual fee increases tied to the consumer price index, or something similar. Some lawmakers suggested the fees could be determined on a sliding scale based on doctors' income.
Critics have complained for years that the medical board doesn't hold doctors accountable often enough. Families that file complaints against doctors frequently go years without updates on the status of investigations, and often aren't told why when their complaints are rejected.
"This is kind of the culmination of two things: patient advocacy trying to make changes and a few years of very recent, direct pushes by the legislature," said Carmen Balber, the executive director of Consumer Watchdog, a consumer and patient advocacy organization.
The California Medical Association has already blunted some aspects of the bill, including securing the removal of a provision to add two more members of the public to the board, which would have made it a public-member majority instead of its current physician majority.
The association is also opposed to a provision currently in the bill that would lower the standard of proof for disciplining doctors in instances besides those in which they could lose their licenses.
Tracy Dominguez, a Bakersfield resident whose daughter, Demi, and grandson, Malakhi, died in 2019 from complications of severe preeclampsia, is among those advocating for reforms.
One of the physicians who treated Dominguez's daughter prior to her death had already been accused by the medical board of gross negligence that led to the death of a young mother, according to medical board documents. Advocates at Consumer Watchdog allege his negligence had already caused death or permanent injury of other mothers and babies he treated, and that he was already banned from practicing in some hospitals at the time he treated Demi Dominguez but had been allowed to keep his license.
Tracy Dominguez said she hopes changing evidentiary standards and strengthening the medical board overall "will put dangerous doctors away."
And a chance to provide a victim impact statement would be important for families hurt by medical neglect, she added. It would be "an opportunity for them to hear from the family, directly — to know that she was a person, not just a number."
Madera Community Hospital in California's Central Valley, which ceased operations last December and filed for Chapter 11 bankruptcy in March, moved a step closer to reopening Thursday when California's new fund for troubled hospitals said it was prepared to offer the facility up to $52 million in interest-free loans.
The program is offering an additional $240.5 million in no-interest loans to 16 other troubled hospitals, including Beverly Community Hospital in Montebello and Hazel Hawkins Memorial Hospital in Hollister, both of which filed for bankruptcy earlier this year.
Hazel Hawkins will get a loan of $10 million, and Beverly will get a bridge loan of $5 million while it is being purchased out of bankruptcy by Adventist Health's White Memorial in Los Angeles, according to the state's Department of Health Care Access and Information, which unveiled the lending details Thursday.
Adventist Health has also agreed conditionally to manage Madera if it reopens. If all goes well it would take six to nine months to reopen, officials said.
Madera will get a bridge loan of $2 million to cover basic costs while Adventist Health, a large multistate health system with 22 hospitals in California, works on a "comprehensive hospital turnaround plan," the department said. Once such a plan is approved, Madera "can be eligible for an additional $50 million loan" from the distressed hospital program, it said.
For most of last year, Fresno-based St. Agnes Medical Center, part of the large Catholic hospital chain Trinity Health, appeared poised to rescue Madera Community Hospital from financial ruin in a planned acquisition that was approved by California Attorney General Rob Bonta. But Trinity walked away from the deal at the last minute with scant explanation, infuriating Bonta along with multiple other political leaders, community advocates, and health care officials.
Trinity, which had loaned Madera $15.4 million during their merger talks, became its largest creditor in the bankruptcy that ensued. At the time of its bankruptcy filing in March, Madera reported total debts of just over $30 million.
Adventist Health agreed last month to a nonbinding letter of intent to manage Madera. At the time, Kerry Heinrich, Adventist's president and CEO, said that if the shuttered hospital got the requisite financing, Adventist Health would use its expertise in "helping to secure a sustainable future for healthcare" in the county.
Adventist Health spokesperson Japhet De Oliveira said Thursday that his organization remains intent on doing so. Reopening Madera "would be a really good thing, and we will put every effort into making that happen," De Oliveira said. He added: "We will need all parties to be involved in developing the approved plan and negotiating the terms of management services."
Karen Paolinelli, the CEO of Madera Community Hospital, did not respond to emailed questions by publication time.
State political leaders representing the region expressed satisfaction with Thursday's news. "It brings me tremendous relief to know that Madera Community Hospital and Hazel Hawkins Memorial Hospital in San Benito County have received grant awards and will be able to ensure that community members can once again receive services in their own communities," said Sen. Anna Caballero, a Democrat who represents the areas in which those facilities are located.
The Adventist letter of intent for Madera said that in addition to paying off creditors in the bankruptcy, the hospital would need to secure $55 million in the first year to pay for all aspects of reopening, plus an additional $30 million in the second year.
The $52 million the state proposes lending to Madera is significantly short of the $80 million the hospital applied for. Assuming the full $52 million materializes, the total amount loaned to the 17 hospitals would be $292.5 million — nearly the entire $300 million available to the fund for fiscal years 2023 and 2024. The program is scheduled to end after 2031.
With $52 million from the state, Madera Community Hospital would still need to find an additional $33 million. Madera said in a bankruptcy court filing earlier this year that it expects just over $33 million in revenues from "provider fees" and from the Federal Emergency Management Agency.
The law that created the distressed hospital loan fund, AB 112, initially provided for $150 million in lending to help troubled hospitals, mostly rural ones, that faced the risk of closing. Another $150 million was later added to the pot. Small hospitals across the state — and the country — have been buffeted by the ill economic winds of the covid-19 pandemic, which ratcheted up the cost of drugs, supplies, and labor.
Hospital industry officials have also pointed to low payment rates by government programs, especially Medi-Cal, California's Medicaid program, which they say has saddled many hospitals with financial losses.
Madera made the same argument, but state data shows it received enough supplemental payments to earn nearly $15 million from Medi-Cal in 2021, though it lost over $11 million treating Medicare patients.
The hospitals awarded the largest loans by the distressed hospital fund are Tri-City Medical Center in Oceanside, with $33.2 million; Dameron Hospital Association in Stockton, with $29 million; Pioneers Memorial Healthcare District in Imperial County, with $28 million; and El Centro Regional Medical Center, with $28 million.
