GOP Health Plan Could Be Bitter Pill For California's Obamacare Exchange

KFF Health News, March 10, 2017

The executive director of Covered California, the state's health insurance marketplace, predicts a downward spiral if only the sickest customers hang on to coverage.

This article first appeared March 10, 2017 on Kaiser Health News.

By Chad Terhune

Republicans are touting their health plan as the right medicine for ailing insurance markets across the country, from Arizona to Tennessee.

But California never landed in sick bay. Its insurance exchange, Covered California, features the healthiest mix of customers nationwide, federal data show. That's been instrumental in holding down rates and boosting enrollment to 1.5 million.

Now state and insurance industry officials fear the replacement plan for the Affordable Care Act, introduced by GOP leaders this week, would threaten those gains. They warn that the proposal, which would cut subsidies to lower-income consumers, could undermine the broader market, driving up premiums for the wide range of Californians who purchase their own coverage.

Republicans and some industry analysts say those fears are overblown and that the GOP replacement plan would strengthen the individual insurance market by lowering premiums for young, healthy people and offering more latitude on covered benefits. In any case, the Trump administration said the plan was not final, describing it as a "work in progress."

Nearly 90 percent of Covered California enrollees rely on federal premium subsidies and many could drop coverage if they lose thousands of dollars in government assistance. And the ones who do stay insured are likely to be the sickest and costliest patients, according to some experts. In response, health insurers would be forced to significantly raise rates in the individual market, both on and off the exchange. It could mark a return to the double-digit rate hikes routinely seen before the 2010 health law.

"The worst possible thing is a market that tends to just have sick people," California Insurance Commissioner Dave Jones said. "That is exactly where the Republican proposal is taking us. It's a recipe for disaster."

Peter Lee, executive director of Covered California, predicts a downward spiral if only the sickest customers hang onto coverage. The net effect of the Republican proposal "would be to increase the costs for everyone in the individual market since the lower-income people that do enroll are likely to be sicker and costlier — raising the premiums paid by everyone covered."

Under Obamacare, premium subsidies are tied to income and the local cost of coverage. The less people earn, the more financial assistance they receive. The Republican plan pegs premium tax credits only to age, starting out at $2,000 a year for people under 30 and increasing to $4,000 for those over 60. Those credits begin to phase out for people making $75,000 a year or more.

The chief executive of Molina Healthcare, an insurer in Covered California and other exchanges, said the GOP's age-based tax credits are inadequate for people to maintain insurance. Dr. J. Mario Molina said premium rate hikes could reach 30 percent next year in California and other states if Congress and the Trump administration don't do more to stabilize the marketplaces. This year's increase in California was an average of 13.2 percent.

"This bill is not making me more optimistic about the future of the marketplaces," Molina said. "There is nothing here providing any comfort or relief."

The Blue Cross Blue Shield Association, which represents California's Anthem Blue Cross and other big insurers, expressed similar concerns in a letter this week to House Republicans.

"The flat tax credit which is adjusted by age, but not by income or premium, does not give healthy people enough incentive to stay in the market, especially in absence of an individual mandate," the group wrote.

The House plan eliminates Obamacare's individual mandate to purchase coverage in favor of a 30 percent surcharge imposed on applicants who go uncovered for longer than 63 days. Some insurers fear that proposed penalty won't draw healthier customers in and might encourage more people to wait to sign up until they're seriously ill.

The Standard & Poor's ratings agency predicted that the House Republican legislation would decrease enrollment in the individual market nationwide by 2 million to 4 million people.

But the agency did not share critics' concerns about market destabilization, saying the replacement plan would improve the overall risk pool because it would lower premiums for young people, encouraging more to sign up. For instance, the average premium for a 21-year-old could drop by 20 percent — before tax credits — because the House Republican plan eases restrictions on rating by age, according to the S&P.

The Affordable Care Act limits insurers to charging older policyholders no more than three times as much as the youngest customers. But the Republican plan might allow companies to charge five times as much.

That means a 64-year-old could see annual premiums rise by nearly 30 percent. And the GOP tax credits are less generous to many older consumers, forcing them to pick up more of the tab.

"We expect the replacement plan to result in an increase in the younger insured (ages 21-35), and a higher decline in the older insured (ages 45-64)," S&P analysts wrote.

But Covered California has less of an age imbalance than many other states, and critics of the Republican plan say the Republican changes might actually damage a market that doesn't need substantial fixing.

The exchange has spent heavily on marketing to attract young people, and during the most recent open enrollment, 18- to 34-year-olds accounted for 37 percent of new enrollees. That's up from 29 percent in 2014, when the exchange launched. In January, the federal marketplace for 39 other states reported that young adults accounted for 26 percent of sign-ups.

California had the healthiest mix of enrollees among states in 2014 and 2015, according to the latest federal data. And the state's risk score, which assesses the overall health and medical needs of patients, was about 17 percent lower than the national average, according to state officials.

That has helped Covered California outperform other state exchanges in terms of rates. The average rate increase was 4 percent the first two years before the rise to 13.2 percent, on average, for 2017. That was better than the 22 percent average rate hike in exchanges nationwide.

The state launched with a better mix of enrollees by requiring participating insurers to cancel existing individual policies at the end of 2013. That unpopular decision quickly moved people into coverage that fully complied with the health law and created one giant risk pool for rating purposes.

Howard Kahn, the former chief executive of L.A. Care Health Plan, which sells on the state exchange, said the proposed cuts in subsidies would be "disastrous for Covered California. The risk mix will be worsened. Who is going to keep coverage no matter what? Those who need it most: sick people."

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

Trump, Dems Look for Common Ground on Drug Prices

KFF Health News, March 9, 2017

President Trump and Health and Human Services Secretary Tom Price met privately Wednesday with two members of Congress and the president of Johns Hopkins Hospital to discuss ways to combat high drug prices.

This article first appeared March 9, 2017 on Kaiser Health News.

By Sarah Jane Tribble

For years, congressional Democrats have tried to pass legislation to allow Medicare to negotiate prescription drug prices for millions of beneficiaries.

Now, they believe they have a not-so-secret weapon: President Donald Trump.

On Wednesday, U.S. Reps. Elijah Cummings (D-Md.) and Peter Welch (D-Vt.) met privately for about an hour with Trump and newly appointed Health and Human Services Secretary Tom Price to discuss ways to combat high drug prices. They were joined by Johns Hopkins Hospital President Redonda Miller.

The congressmen pitched a House bill that would expand the federal government's ability to negotiate drug prices, and they left feeling optimistic about what Trump will do.

"He made it clear to us that he wanted to do something," Cummings said, characterizing Trump as "aware of the problem" and "enthusiastic." Cummings is ranking member of the House Committee on Oversight and Government Reform.

Trump tweeted the day before the meeting with Cummings and Welch that he is "working on a new system where there will be competition" in the drug industry. After the meeting, Trump relayed his desire to work "in a bipartisan fashion to ensure prescription drug prices are more affordable for all Americans."

Allowing the federal government to negotiate drug prices is not a new idea, but Cummings and Welch painted a picture Wednesday of a political landscape that is ripe for change. They said they have a president who "gets it."

And, Welch said, "the price is starting to kill us, we just can't afford it."

The lawmakers said they handed Trump and Price a bill to review and make comments. Cummings said he hopes to file the bill in two weeks.

A summary posted on the House committee website said the HHS secretary could negotiate lower prices with drug manufacturers under Medicare Part D, which provides coverage for prescription drugs bought at pharmacies.

An estimated 41 million Americans are covered by Part D. The drug benefit is provided through private insurers who each have their own formulary and generally use pharmacy benefit managers for drug purchasing. The latest proposal would direct the HHS secretary to establish a formulary, which is a list of allowed drugs.

The formulary would be used to "leverage" the purchasing power of the government, according to the summary.

Douglas Holtz-Eakin, a former director of the Congressional Budget Office and president of the American Action Forum, said the idea of lowering prices through Medicare Part D negotiations is "completely unrealistic."

Holtz-Eakin pointed out that insurers are already used to managing health care for beneficiaries and there are formularies in those plans. Adding into the law that the HHS secretary should be part of the negotiations merely adds a "bully pulpit," he said.

"The problem with the negotiation in Part D is not a political, partisan problem, it's that it won't work," said Holtz-Eakin.

Trump himself, though, has long embraced the idea of Medicare negotiating drug prices. On the campaign trail in January 2016, he told a crowd in New Hampshire that Medicare could "save $300 billion" a year by getting discounts as the biggest buyer of prescription drugs, according to the Associated Press.

"We don't do it. Why? Because of the drug companies," Trump said.

PhRMA, the drug industry's powerful lobbying group, says price negotiation is already happening.

"Large, powerful purchasers negotiate discounts and rebates directly with manufacturers, saving money for both beneficiaries and taxpayers," PhRMA's Holly Campbell stated in an email late Wednesday.

She pointed to a Congressional Budget Office report that said HHS would not be able to negotiate lower prices than already exist.

Trump met with pharmaceutical executives in January and told them "we have to get prices down for a lot of reasons, we have no choice."

Umer Raffat, a research analyst at Evercore ISI, said the industry felt less jittery after that meeting. They walked away understanding that Trump wants to "promote innovation" while addressing prices.

KHN's coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Five Ways The GOP Health Bill Would Reverse Course From The ACA

Five Ways The GOP Health Bill Would Reverse Course From The ACA

KFF Health News, March 8, 2017

Still missing is an estimate from the Congressional Budget Office that will detail not only how much the proposal will cost, but also how many people would gain or lose health insurance.

This article first appeared March 8, 2017 on Kaiser Health News.

By Julie Rovner

After literally years of promises, House Republicans finally have a bill they say will "repeal and replace" the Affordable Care Act.

Some conservative Republicans have derided the new proposal — the American Health Care Act — calling it "Obamacare Lite." It keeps intact some of the more popular features of the ACA, such as allowing adult children to stay on their parents' health plans to age 26 and, at least in theory, ensuring that people with preexisting conditions will still have access to insurance.

In some cases the elements of the law that remain are due to political popularity. In others, it's because the special budget rules Congress is using — so Republicans can avoid a Senate filibuster — do not allow them to repeal the entire law.

But there are some major changes in how people would choose and pay for health care and insurance. Here are some of the biggest:

Tax Credits To Help Buy Insurance
Both the GOP bill and the ACA provide tax credits to help some people pay their premiums if they don't get insurance through work or government programs. And in both, the credits are refundable (meaning people who owe no taxes still get the money) and advanceable (so people don't have to wait until they file their taxes to get them). But the GOP's tax credits would work very differently from those already in place.

Under current law, the amount of the credit is tied to a person's income (the less you earn the more you get) and the cost of insurance where you live.

The GOP tax credits would be tied largely to age, with older people getting twice as much ($4,000 per year) as younger people ($2,000). But the Republican plan would also let insurers charge those older adults five times as much as younger adults, so even a credit twice as big might not make up the difference in the new, higher premiums.

The GOP credits also do not vary by location, so they would be worth more in places where health care and health insurance is less expensive.

The GOP credits do phase out gradually, starting with incomes above $75,000 for an individual and $150,000 for families.

Medicaid
The biggest changes the Republican bill would make are to the Medicaid program. Starting in 2020, it would roll back federal funding for the ACA's expansion that allowed states — if they so chose — to provide Medicaid coverage to all low-income individuals under 138 percent of the poverty level, rather than just the specific categories of poor people (children, pregnant women, elderly, disabled) who were previously eligible. Thirty-one states opted to pursue this ACA provision. People who are covered under the expansion would continue to be funded by the federal government after that, but states would no longer be allowed to enroll anyone under those expanded criteria. And an enrollee who loses eligibility for the expansion program could not re-enroll.

But the bill would go further as well, making changes to the underlying Medicaid program that House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) described as "the biggest entitlement reform in the last 20 years."

Currently, Medicaid costs are shared between states and the federal government, but the funding is open-ended, so the federal government pays its percentage of whatever states spend. Under the proposed bill, the amount of federal funding would be capped on a per-person basis, so funding would go up as more people qualify. But that per-capita amount might not grow as fast as Medicaid costs, which could leave states on the hook for an ever-increasing share of the costs of the program.

"Capping federal contributions to the Medicaid program will likely force states with already tight budgets to limit eligibility and cut benefits to at-risk Americans," said the American Public Health Association in a statement.

Help For Wealthier People
If you earn a lot of money, or even just enough to put aside something extra for health expenses, the GOP bill will provide a lot to like.

First, it would repeal almost all of the taxes that were increased by the ACA to pay for the expansion of health coverage. Those include higher Medicare taxes for high-income earners, a tax on investment income, and various taxes on health care providers, including insurance companies, makers of medical devices and even tanning salons.

The bill would also provide new tax advantages for those who can afford to save — including allowing more money to be deposited into health savings accounts, and lower penalties for those who use those accounts to pay for non-medical needs.

In addition, the plan would lower the threshold for deducting medical expenses on income taxes and allow people with job-based tax-preferred "flexible spending accounts" to put away more money pre-tax. It would also restore over-the-counter drugs as eligible for reimbursement from those accounts.

Mandates To Buy Or Provide Coverage
The GOP plan doesn't actually repeal either the requirement for individuals to have coverage or for employers to provide it. That's because it can't under budget rules. Instead, the bill would reduce the penalties in both cases to zero, rendering the requirements moot.

The individual requirement was used by the health law to force healthy people into buying coverage to help improve insurers' risk pools since they could no longer bar customers with preexisting conditions. Instead of the requirement that most people obtain health insurance or pay a penalty, the Republican plan would provide a penalty for those who do not maintain "continuous coverage." Those with a break in insurance coverage of more than 63 days could still purchase insurance without regard to preexisting health conditions, but they would be required to pay premiums that are 30 percent higher for 12 months.

The employer "mandate," which requires firms with 50 or more workers to offer coverage or pay a fine, has actually had relatively little impact on insurance coverage, analysts have concluded, and probably is not necessary to prevent employers from dropping coverage. In both the ACA and the GOP bill, however, workers whose employers offer coverage could not decline that coverage and get a tax credit instead.

How To Pay For It
With all the taxes and fees stripped from the ACA, how will Republicans pay for their tax credits? The answer is not clear yet.

"We are still discussing details, but we are committed to repealing Obamacare and replacing it with fiscally responsible policies that restore the free market and protect taxpayers," said the Republican fact sheet that accompanied the release of the bill.

Also still missing is an estimate from the Congressional Budget Office that will detail not only how much the proposal will cost, but also how many people would gain or lose health insurance. Republicans insist that estimate will be available before the full House votes on the bill.

Three Senators Ask GAO To Investigate Possible Abuses Of The Orphan Drug Act

KFF Health News, March 7, 2017

Reports of five- and six-figure annual price tags for orphan drugs have amplified long-simmering concerns–and the lawmakers' letter reflects that sentiment.

This article first appeared March 7, 2017 on Kaiser Health News.

By Sarah Jane Tribble and Sydney Lupkin

Building on weeks of mounting pressure to address high prescription drug prices, three influential U.S. senators have asked the government's accountability arm to investigate potential abuses of the Orphan Drug Act.

In a March 3 letter to the U.S. Government Accountability Office, Sens. Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa) and Tom Cotton (R-Ark.) raised the possibility that regulatory or legislative changes might be needed "to preserve the intent of this vital law" that gives drugmakers lucrative incentives to develop drugs for rare diseases.

"While few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process," the letter states.

In January, Kaiser Health News published an investigation that found the orphan drug program is being manipulated by drugmakers to maximize profits and to protect niche markets for medicines being taken by millions.

Congress overwhelmingly passed the 1983 Orphan Drug Act to motivate pharmaceutical companies to develop drugs for people whose rare diseases had been ignored. Drugs approved as orphans are granted tax incentives and seven years of exclusive rights to a market that affects fewer than 200,000 patients in the U.S.

In recent months, reports of five- and six-figure annual price tags for orphan drugs have amplified long-simmering concerns — and the letter reflects that sentiment.

The senators' letter asked for a list of drugs approved and denied orphan status by the Food and Drug Administration. It also asked whether resources at the FDA, which oversees the law, have "kept up with the number of requests" from drugmakers and whether there is consistency in the department's reviews.

KHN's investigation, which was also published and aired by NPR, found that many drugs that now have orphan status aren't entirely new. More than 70 were drugs first approved by the FDA for mass-market use. Those include cholesterol blockbuster Crestor, Abilify for psychiatric disorders and rheumatoid arthritis drug Humira, the world's best-selling drug.

Others are drugs that have received multiple exclusivity periods for two or more rare conditions. About 80 drugs fall into this latter category, including cancer drug Gleevec and wrinkle-fighting drug Botox.

Few senators are better positioned to alter the law, if they want to. Hatch, a longtime advocate of the rare disease community, said late Monday in a statement that there was little evidence to suggest the Orphan Drug Act needs to change.

Hatch is chairman of the Senate Finance Committee, which oversees 50 percent of the federal budget, including Medicaid and Medicare spending. He said the letter is requesting "the first GAO study exclusively reviewing the Orphan Drug Act, and such oversight will ensure those critical innovations are continued into the future."

Grassley, the senior senator from Iowa, chairs the Judiciary Committee and has jurisdiction over anti-competitive and patent-related issues. Grassley last month announced an inquiry into the Orphan Drug Act in response to KHN's investigation.

Cotton, a strong conservative voice, chairs the subcommittee on economic policy under the committee on banking, housing and urban affairs. In a floor speech last month, he announced that he would find a legislative solution to price hikes associated with the orphan drug program.

Cotton focused on an orphan drug that has been a flashpoint in the recent national dialogue about drug prices, arguing that the seven-year marketing exclusivity offered by the law should not have been given to Emflaza, a corticosteroid approved to treat Duchenne muscular dystrophy. Emflaza was not mentioned in the letter to the GAO.

"Monopoly rights are not merit badges," Cotton said in his speech. "They're not a reward for business smarts. They're supposed to serve the interests of patients."

Drugmaker Marathon Pharmaceuticals triggered an uproar when it announced an $89,000 annual list price for the drug, which many U.S. patients have purchased overseas for $1,000 to $1,600 a year.

Marathon responded in February by delaying the rollout of the drug, saying it will talk with stakeholders, including patients, about the price.

Last Friday, seven Democratic senators — including Sen. Elizabeth Warren of Massachusetts — and one independent sent a letter to Marathon CEO Jeff Aronin demanding information on the private drugmaker's pricing strategy.

Marathon spokeswoman Wanda Moebius released a statement saying the company is committed to ensuring that all patients who need this drug have access to it and will continue to work with the Duchenne community.

The three top senators asking the GAO to investigate the orphan drug program also expressed concern about patients, saying in their letter that "we feel it is important to include the patient voice in your review."

KHN's coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

The GOP bill maintains tax credits to encourage consumers to purchase coverage, but would configure the program much differently than the current law

House GOP Health Bill Jettisons Insurance Mandate, Much Of Medicaid Expansion

KFF Health News, March 7, 2017

The GOP bill maintains tax credits to encourage consumers to purchase coverage, but would configure the program much differently than the current law.

This article first appeared March 6, 2017 on Kaiser Health News.

By Mary Agnes Carey and Phil Galewitz

House Republicans unveiled their much anticipated health law replacement plan Monday, slashing the law's Medicaid expansion and scrapping the requirement that individuals purchase coverage or pay a fine.

But they opted to continue providing tax credits to encourage consumers to purchase coverage, although they would configure the program much differently than the current law.

The legislation would keep the health law's provisions allowing adult children to stay on their parents' health insurance plan until age 26 and prohibiting insurers from charging people with preexisting medical conditions more for coverage as long as they don't let their insurance lapse.

If they do, insurers can charge a flat 30 percent late-enrollment surcharge on top of the base premium, under the Republican bill.

In a statement, House Speaker Paul Ryan (R-Wis.) said the proposal would "drive down costs, encourage competition, and give every American access to quality, affordable health insurance. It protects young adults, patients with preexisting conditions, and provides a stable transition so that no one has the rug pulled out from under them."

The GOP plan, as predicted, kills most of the law's taxes and fees and would not enforce the so-called employer mandate, which requires certain employers to provide a set level of health coverage to workers or pay a penalty.

Democrats quickly condemned the bill. "Tonight, Republicans revealed a Make America Sick Again bill that hands billionaires a massive new tax break while shifting huge costs and burdens onto working families across American," House Minority Leader Nancy Pelosi tweeted.

"Republican will force tens of millions of families to pay more for worse coverage — and push millions of Americans off of health coverage entirely."

The legislation has been the focus of intense negotiations among different factions of the Republican Party and the Trump administration since January.

The Affordable Care Act passed in 2010 without a single Republican vote, and the party has strongly denounced it ever since, with the House voting more than 60 times to repeal Obamacare.

But more than 20 million people have gained coverage under the law, and President Donald Trump and some congressional Republicans have said they don't want anyone to lose their insurance.

When Republicans took control of both Congress and the White House this year, they did not have an agreement on the path for replacement, with some lawmakers from states that have expanded Medicaid concerned about the effect of repeal and the party's conservative wing pushing hard to jettison the entire law.

Sen. Rand Paul (R-Ky.), one of those favoring a full repeal, tweeted: "Still have not seen an official version of the House Obamacare replacement bill, but from media reports this sure looks like Obamacare Lite!"

Complicating the effort is the fact that Republicans have only 52 seats in the Senate so they cannot muster the 60 necessary to overcome a Democratic filibuster.

That means they must use a complicated legislative strategy called budget reconciliation that allows them to repeal only part of the ACA that affect federal spending.

Beginning in 2020, the GOP plan would provide tax credits to help people pay for health insurance based on household income and age, with a limit of $14,000 per family. Each member of the family would accumulate credits, ranging from $2,000 for an individual under 30 to $4,000 for people ages 60 and higher. 

The credits would begin to diminish after individuals reached an income of $75,000 — or $150,000 for joint filers.

Consumers also would be allowed to put more money into tax-free health savings accounts and would lift the $2,500 cap on flexible savings accounts beginning in 2018.

The legislation would allow insurers to charge older consumers as much as five times more for coverage than younger people. The health law currently permits a three-to-one ratio.

Community health centers would receive $422 million in additional funding in 2017 under the legislation, which also places a one-year freeze on funding for Planned Parenthood and prohibits the use of tax credits to purchase health insurance that covers abortion.

Both the Energy and Commerce and Ways and Means Committees are scheduled to mark up the legislation Wednesday. The committees do not yet have any Congressional Budget Office analysis of how much the legislation would cost or how many people it would cover.

Party leaders have said they want to have the bill to President Trump next month.

In a statement, senior Democrats on both panels said the measure would charge consumers "more money for less care. It would dramatically drive up health care costs for seniors. And repeal would ration care for more than 70 million Americans, including seniors in nursing homes, pregnant women and children living with disabilities by arbitrarily cutting and capping Medicaid," said Rep. Frank Pallone of New Jersey and Rep. Richard Neal of Massachusetts.

The House GOP plan makes dramatic changes to Medicaid, the state-federal health insurance program that covers 70 million low-income Americans. The program began in 1965 as an entitlement — which means federal and state funding is ensured regardless of cost and enrollment.

But the Republican bill would cap federal funding for Medicaid for the first time.

The federal government picks up between half and 70 percent of Medicaid costs. The percentage varies based on the relative wealth of the state.

Under the GOP plan, federal funding would be based on what the government spent in the fiscal year that ended Sept. 30. Those amounts would be adjusted annually based on a state's enrollment and medical inflation.

Currently, federal payments to states also take into account how generous the state's benefits are and what rate it uses to pay providers. That means states like New York and Vermont get higher funding than states like Nevada and New Hampshire and those differences would be locked in for future years.

Republicans have pushed to cap federal funding to states in return for giving them more control in running the program.

The legislation also affects the health law's expansion of Medicaid, in which the federal government provided enhanced funding to states to widen eligibility. The bill would also end that extra funding for anyone enrolling under the expansion guidelines starting in 2020.

But the legislation would let states keep the extra funding Obamacare provided for individuals already in the expansion program who stay enrolled.

About 11 million Americans have gained Medicaid coverage since 2014.

Changing the expansion program is a delicate balance for the Republicans. Four GOP senators from states that took that option said Monday they would oppose any legislation that repealed the expansion.

"We are concerned that any poorly implemented or poorly timed change in the current funding structure in Medicaid could result in a reduction in access to life-saving health care services," Sens. Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska wrote in a letter to Majority Leader Mitch McConnell.

While telehealth services may boost access to a physician, they don't necessarily reduce healthcare spending, contrary to assertions by telehealth companies, research suggests

Are Virtual Doctor Visits Really Cost-Effective?

KFF Health News, March 7, 2017

While telehealth services may boost access to a physician, they don't necessarily reduce healthcare spending, contrary to assertions by telehealth companies, research suggests.

This article first appeared March 7, 2017 on Kaiser Health News.

By Ana B. Ibarra

Consultations with doctors by phone or video conference appear to be catching on, with well over a million virtual visits reported in 2015.

The convenience of "telehealth" appeals to patients, and the notion that it costs less than an in-office visit would make it attractive to employers and health plans.

But a new study suggests that while telehealth services may boost access to a physician, they don't necessarily reduce health care spending, contrary to assertions by telehealth companies.

The study, published Monday in the journal Health Affairs, shows that telehealth prompts patients to seek care for minor illnesses that otherwise would not have induced them to visit a doctor's office.

Telehealth has been around for more than a decade, but its growth has been fueled more recently by the ubiquity of smartphones and laptops, said Lori Uscher-Pines, one of the study's authors who is a policy researcher at the Rand Corp., a nonprofit think tank based in Santa Monica, Calif.

These virtual consultations are designed to replace more expensive visits to a doctor's office or emergency room. On average, a telehealth visit costs about $79, compared with about $146 for an office visit, according to the study. But it found that virtual visits generate additional medical use.

"What we found is contrary to what [telehealth] companies often say," Uscher-Pines told California Healthline. "We found an increase in spending for the payer."

The researchers found that only 12 percent of telemedicine visits replaced an in-person provider visit, while 88 percent represented new demand.

The researchers examined 2011-13 utilization data of 300,000 people enrolled in the Blue Shield of California Health Maintenance Organization plan offered by the California Public Employees Retirement System, which covers current and former state employees and their families. CalPERS' Blue Shield HMO started offering telehealth services, available 24/7 to its beneficiaries, in April 2012.

The researchers focused on virtual visits for respiratory illnesses, which include sinusitis, bronchitis, pneumonia and tonsillitis, among others.

While a single telehealth visit for a respiratory illness costs less than an in-person visit, it often results in more follow-up appointments, lab tests and prescriptions, which increases spending in the long run. Liability concerns may prompt telehealth physicians to recommend that a patient go in for a face-to-face appointment with a doctor, the study notes.

Researchers estimated that annual spending for respiratory illnesses increased about $45 per telehealth user, compared with patients who did not take advantage of such virtual consultations.

Jason Gorevic, the CEO at Teladoc, the operator that provides telehealth services for CalPERS Blue Shield members, said the new study doesn't square with Teladoc data showing the cost savings of telemedicine.

According to 2016 data, Gorevic said, only 13 percent of Teladoc visits represent new medical use. He noted that the Rand study uses older data, and that many things have changed since then — including the technology, the rate at which these services are being adopted and patient engagement.

"In fact, other more comprehensive studies — using six times the amount of claims data including the same population as the [Rand] study — have found tremendous value of telehealth, with consistently repeatable results," Gorevic said. These other studies have shown that telehealth decreases overall health care spending, he said. But Uscher-Pines said the Rand findings were not surprising.

When Rand researchers studied retail clinics last year, they found that making access to health care more convenient triggers new use and additional costs. That study found 58 percent of visits to in-store clinics represented new use of medical services rather than a substitute for doctor office visits.

Yet the fact that telehealth services are more affordable per visit than a trip to a physician's office shows that there is still a pathway to cost savings, Uscher-Pines said.

To achieve cost savings, telehealth services would have to replace costlier visits, the researcher said. Insurers could increase telehealth visit costs for patients to deter unnecessary use. Another way to increase the health system value of virtual doctor visits is to target specific groups of patients — such as those who often use emergency rooms for less severe illnesses. An emergency room visit costs an estimated $1,734.

"You could take these people in the emergency department and offer them this cheaper option. That would be a direct replacement," Uscher-Pines said.

Gorevic said that a challenge for telehealth is engaging consumers, so the comparatively low fees provide a financial incentive.

"Because a telehealth visit is much cheaper than an in-person visit, the cost sharing should be reflective of that," he said.

Marcus Thygeson, senior vice president and chief health officer at Blue Shield, which also provides virtual doctor visits through Teladoc, in a statement said that "increased convenience can increase utilization, so overall healthcare costs may increase or stay the same. Blue Shield supports the use of telemedicine to improve access for both primary and specialty healthcare, especially in rural communities."

The researchers noted several limitations to the Rand study. For example, researchers examined only one telehealth company and studied only visits for respiratory illnesses. In addition, the patients whose data were scrutinized had commercial insurance, and it is possible the use of telehealth would differ among people with government insurance, high-deductible plans or no insurance at all, the study said.

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

‘Right-To-Try’ Laws Expose Dying Patients To Exploitation, Ethicists Warn

'Right-To-Try' Laws Expose Dying Patients To Exploitation, Ethicists Warn

KFF Health News, March 6, 2017

Proponents of the California law contend that some doctors have been hesitant to help dying patients, for fear of being penalized for using drugs or devices that don't have FDA approval.

This article first appeared March 6, 2017 on Kaiser Health News.

By Carrie Feibel, KQED

In the past three years, 33 U.S. states have passed laws aimed at helping dying people get easier access to experimental treatments. Supporters say these patients are just looking for the "right to try" these treatments.

Such laws may sound compassionate, but medical ethicists warn they pose worrisome risks to the health and finances of vulnerable patients.

California's right-to-try law was enacted in January. It protects California doctors and hospitals who want to prescribe any medicine that has successfully made it through a Phase 1 drug trial. That's the first stage of human testing required by the Food and Drug Administration — the sort of study that focuses merely on a drug's safety, not its effectiveness.

Ian Calderon, a Democrat from Southern California and majority leader in the state's Assembly, was one author of the law. He said that if he had just received a terrible diagnosis, he would want to try anything possible to live.

"My thought would be, 'What do I have to lose?'" Calderon said. "I have an opportunity to potentially find a cure. Or at least find something that prolongs my life — find something that could help me."

He said the law seemed to him the logical next step, after California passed a law in 2016 permitting physician-assisted death.

"It's inhumane to have a law on the books that allows you to end your own life, but no law on the books that allows you to fight to extend it," he argued. "That just seems counterintuitive."

Proponents contend that some doctors have been hesitant to help dying patients, for fear of being penalized for using drugs or devices that don't have FDA approval.

California's law ensures that doctors can help patients petition to get an investigational medicine from drugmakers without fear of censure from the state's medical board. It eliminates regulatory obstacles on the state level and creates processes for patient consent and data collection.

David Huntley, a San Diego State University professor who died from ALS, or Lou Gehrig's disease, in 2015, was among the patients who fought for California's law. Before he died, Huntley testified in favor of the bill from his wheelchair.

His widow, Lina Clark, founder of the patients' advocacy group HopeNowforALS, said her husband completely understood what was at stake.

"The patient community is saying: We are smart, we're informed, we feel it is our right to try some of these therapies, because we're going to die anyway."

It's a compelling argument, but there are serious risks, according to doctors and medical ethicists.

"We know some people try to take advantage of our desperation when we're ill," said Dr. R. Adams Dudley, director of the Center for Healthcare Value at University of California, San Francisco. "If we take the FDA out of it, how do we protect people from physicians or drug companies that will want to sell them things and will want to prey on their desperation?"

Dudley said the FDA and the clinical trial process were put in place for a reason — not just to shut out would-be snake oil salesmen, but to ensure that manufacturers are producing a safe product and not cutting corners.

"If you say there's a path that's not through the FDA," he said, "then there are billions of dollars out there to be made by skipping the important steps that we've developed."

The new state laws are called "right to try," Dudley said, but all that patients can really do is ask for an experimental medicine. Drug companies don't have to give them the medicine, and insurance companies don't have to pay for it.

Dudley said patients could spend huge amounts of money trying a drug that hasn't been proven to work. And the patient may also be giving up their hopes for a controlled, peaceful death at home.

"Instead, you try a drug and you get very severe lung problems," he said, "and you end up on a breathing machine in a hospital. That could cost hundreds of thousands of dollars."

Although nearly three dozen right-to-try laws are now on the books, researchers at New York University who've been looking for evidence of the laws' usefulness haven't yet found a single substantiated case of a patient getting a drug using a state law.

That's partly, perhaps, because the FDA already has a process to help patients and their doctors apply for the use of experimental drugs (and such requests are nearly always approved). Still, Calderon and others point out that the process entailed in these "compassionate use requests" is much too slow and cumbersome for many patients who are dying.

A new federal research law might help change that. The 21st Century Cures Act requires drug companies to be more transparent about how they decide who gets experimental access to promising medications, and how long it will take.

This story is part of a partnership that includes KQED, NPR and Kaiser Health News.

Despite a disappointing fourth quarter of 2016, J. Mario Molina, CEO of Molina Healthcare, remains a fan of the Affordable Care Act overall and hopes Congress will consult with him and other insurers as it debates the health law’s fate.

Faring Better Than Many ACA Insurers, Molina Backs Health Law 'Tuneup'

KFF Health News, March 3, 2017

Despite a disappointing fourth quarter of 2016, J. Mario Molina, CEO of Molina Healthcare, remains a fan of the Affordable Care Act overall and hopes Congress will consult with him and other insurers as it debates the health law's fate.

This article first appeared March 2, 2017 on Kaiser Health News.

By April Dembosky, KQED

Some large health insurance companies have suffered losses under the Affordable Care Act, leading to a few high-profile exits from the online marketplaces. Humana is just the latest, announcing in January that it will stop offering health insurance on the ACA health exchanges at year's end.

But the administrators of a smaller, California-based insurer — Molina Healthcare — managed to turn a modest profit in the early years of the 2010 health law and break even in 2016. How did they do it?

"We understood the demographics of the people that we're serving a little better," said Dr. J. Mario Molina, CEO of Molina Healthcare, "because we've been doing it for so long."

Despite a disappointing fourth quarter of 2016, Molina remains a fan of the Affordable Care Act overall and hopes Congress will consult with him and other insurers as it debates the health law's fate.

"It doesn't need to be scrapped and replaced," he said. "It needs a tuneup."

Molina's business grew out of a network of Southern California medical clinics serving mostly low-income patients that was founded in 1980 by his father, David, also a doctor. Sometimes when his dad's patients couldn't pay, they would trade services, or give him items from their homes instead of cash, the younger Molina recalled: a glass decanter, a pipe organ, even a dog.

"My father was old-fashioned," said the CEO. "He believed doctors had an obligation to take care of patients and that the primary issue was not how they were going to get paid."

In 1994, David Molina started his health insurance company, focusing on getting care to patients on Medicaid — government health insurance for the poor and disabled.

That is what positioned Molina Healthcare to move into the Obamacare marketplaces so smoothly, Mario Molina said — most people who signed up for Obamacare plans represent low-income households.

"It's a different population most insurance companies haven't been interested in," he said.

For example, transportation is an issue for his company's customers. They often take the bus to medical appointments, he said, so they'd rather see a doctor close to home than at an academic hospital 30 miles away.

"We don't contract with every hospital and every doctor," he admitted. "It's not everyone, but it's enough so that you can find a doctor and the hospital and the services you need." His company operates in 12 states and Puerto Rico.

Although some observers have criticized narrow insurance networks for not offering consumers enough choice, especially of medical specialists, having fewer doctors in the Molina Healthcare network has meant lower costs for the company and its customers. That means the health insurance company has been able to earn a modest profit — roughly 1 percent in the first couple years of Obamacare.

Some larger insurers are accustomed to creating health plans for big companies, who often want more doctors and more benefits included, in hopes of attracting and retaining top employees. But plans like that cost more.

"They're looking at things sort of from the top down, and we're looking at things from the bottom up," Molina said.

He's accustomed to running a low-cost, low-margin business, while big guys like Humana, Aetna and UnitedHealthcare aren't. Industry analysts say that's why some of the big players lost money with Obamacare.

"It's easier to work up from a low-cost position than it is to work down from a higher-cost position," said Josh Weisbrod, a health care consultant with Bain & Company. "For an insurer that is used to selling employer plans with rich benefit designs and broad networks, it is difficult for them to transition that to a narrow network of lower-cost providers."

But Molina said there's been a serious downside to his company's success: a provision of the Affordable Care Act known as "risk transfer." The provision was designed to help insurance companies cover losses if they ended up with a lot of very sick, expensive patients. It works like this: Companies with fewer patients who have a chronic or serious illness pay some of their revenue to the companies that cover more patients who are sick.

It was a fine idea, Molina said, but the formula lawmakers came up with to calculate risk was all wrong.

"Let's put it this way," he said. "Currently Molina Healthcare is returning 25 percent of our premiums to the government, which are then distributed to our competitors. So we are really subsidizing our competitors and helping them, rather than forcing them to compete."

And that is one of the things that hit Molina's bottom line in 2016, resulting in much lower profits than originally projected for the year and a significant fourth quarter loss. Molina complained that the risk formula seems to punish efficiency rather than help those who had some bad luck.

"I think it was done by well-meaning people who had a theoretical knowledge but not a practical knowledge of insurance," he said.

If lawmakers need guidance on how to fix Obamacare, he added, they should look at one state that definitely got it right: California.

California insurance regulators and health officials "forced everyone to really compete," Molina said, "and that made everyone kind of sharpen their pencils and do a better job," he said. "It's kept everyone on their toes, and, as a result, I think there's been more stability in the marketplace."

There's also more predictability. California may have more business regulations than other states, but Molina suggested that has created a level playing field.

"The state doesn't make arbitrary decisions," he said. "We can plan from year to year. We understand the rules. Imagine if you're trying to play a game and the rules change in every quarter."

Molina expressed hope that newly elected rule makers at the federal level will take his message to heart, too.

This story is part of a reporting partnership with KQED, NPR and Kaiser Health News.

At least 83% of the nation’s largest patient advocacy groups take contributions from the drug, medical device, and biotech industries, raising questions about whether they consistently put patients first.

Patient Advocacy Groups Rake In Donations From Pharma

KFF Health News, March 2, 2017

At least 83% of the nation’s largest patient advocacy groups take contributions from the drug, medical device, and biotech industries, raising questions about whether they consistently put patients first.

This article first appeared March 2, 2017 on Kaiser Health News.

By Emily Kopp

High-profile advocacy groups for patients with cancer, Alzheimer's, HIV and other diseases almost always accept funding from pharmaceutical firms, and many fail to report any contributions, new research shows.

At least 83 percent of the nation's 104 largest patient advocacy groups take contributions from the drug, medical device and biotech industries, raising questions about whether they consistently put patients first, according to a paper published Wednesday in the New England Journal of Medicine.

"If you're a policymaker and you want to hear from patients, there's a danger if there's an undisclosed or underdisclosed conflict of interest," said Matthew McCoy, the paper's primary author. "The 'patient' voice is speaking with a pharma accent."

Of the 18 nonprofits not reporting pharmaceutical money, all but five failed to disclose their donors at all. Just one of the 104 nonprofits stated explicitly that it does not accept industry money.

Executives or former executives in the pharmaceutical industry serve on a third of the organizations' boards, the researchers found.

These possible conflicts of interest are troubling, experts say, because while patients and drugmakers both want better treatments, they often have opposing goals.

Patients want cheaper medicine; the pharmaceutical industry wants to maximize revenue. Patients want information about the efficacy of certain drugs; the industry often seeks faster approvals for drugs, at which point the incentive to collect information about a drug has diminished, according to Vinay Prasad, assistant professor of medicine at the Oregon Health and Science University.

"Who is setting the narrative of what patients want?" he said.

Prasad is cited by the researchers but did not help conduct the study.

Research into the relationship between patient advocacy groups and the pharmaceutical industry is nascent, but the study finds that drug dollars prop up a higher proportion of patient groups than some previous papers.

A survey of patient advocacy executives published in the medical journal JAMA in January, for example, found that 67 percent of groups reported industry donors.

The latest study focused on larger groups that receive at least $7.5 million in revenue each year, which likely churned up more industry funding than a broader approach might have, said McCoy, a postdoctoral fellow in advance biomedical ethics at the University of Pennsylvania.

Also, pharmaceutical companies might funnel money to patient advocacy groups through other nonprofits, which would be harder to trace. "A patient organization may have gotten $1 million from the Making People's Lives Better Fund. … That second degree of interrogation is not something we captured," said McCoy.

About one-fifth of the patient advocacy groups studied accepted $1 million or more from drugmakers, but exactly how much those groups accepted is fuzzy. Half of the organizations disclosed their donations in ranges rather than precise amounts, and most of those reported their highest donations with an unbounded upper range, the study says.

Neither the NEJM paper nor the JAMA study in January examined how often a patient organization lobbied Congress, wrote letters to lawmakers or took stances on legislation.

But transparency in pharmaceutical ties is important even for advocacy groups with little presence on Capitol Hill, said Susannah Rose, one of the authors of the JAMA study.

Aside from steering legislation, the groups are important stakeholders in the delivery of care, research funding and patient assistance.

"Advocacy groups often give a voice to people who do not have a voice," said Rose, scientific director of research in the Office of Patient Experience at the Cleveland Clinic and an expert in bioethics.

But whereas academic research centers, physicians and other medical professionals often feel pressure to reveal their associations with industry and face institutional checks against potential conflicts of interest, patient advocacy groups are too often overlooked, she said.

The paper comes at a time of both growing influence and heightened scrutiny of patient advocacy groups.

Pharmaceutical industry giant Pfizer said Friday it had received a subpoena related to its support of patient advocacy programs that offer financial assistance for Medicare patients' copays. Johnson & Johnson disclosed Monday it had also received a subpoena from the U.S. Attorney's Office for the District of Massachusetts seeking information about its support of organizations that pay for patient assistance. Those follow similar subpoenas sent to four drugmakers in 2015 and 2016 — Gilead Sciences, Jazz Pharmaceuticals, Valeant Pharmaceuticals and Biogen.

U.S. officials have not commented about the probe. But they could be trying to assess whether drugmakers are covering patients' copays for expensive drugs and leaving taxpayers with the bill for the remainder of the cost, said Joel Hay, professor of pharmaceutical economics and policy at the University of Southern California. Hay has served as a paid expert witness in lawsuits against drugmakers. Pharmaceutical companies cannot subsidize the purchase of their products by Medicare.

Paying a relatively small subsidy for patients' copays can also "take the pressure" off Congress to pass reforms that meaningfully slash drug prices in a way that undercuts the bottom line, said Prasad.

The Pharmaceutical Research and Manufacturers of America, the drug industry's trade association, responded to questions about the NEJM study in a statement: "While we cannot speak for particular organizations, we have heard from many patients who are concerned about the growing out-of-pocket cost burden when trying to access needed health care services and treatments."

KHN's coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

A Maine physician helps her patients sidestep the costs of an EpiPen by purchasing reusable auto-injectors and filling them with epinephrine herself.

Instead Of Trashing A $600 EpiPen, Some Patients Get A Refill

KFF Health News, March 1, 2017

A Maine physician helps her patients sidestep the costs of an EpiPen by purchasing reusable auto-injectors and filling them with epinephrine herself.

This article first appeared March 1, 2017 on Kaiser Health News.

By Shefali Luthra

The concern over soaring prescription drug prices continues to dominate headlines, attracting scrutiny from Capitol Hill and President Donald Trump, who said during a January press conference that the industry was "getting away with murder."

But some doctors — frustrated by what they see as unreasonable price tags and political stagnation — are coming up with do-it-yourself solutions. Their efforts to bring down costs for their patients highlight the arbitrary and often needlessly exorbitant prices of drugs in the U.S., they say.

One striking example is the response of Dr. Cathleen London, a family doctor in Milbridge, Maine, to news that the pharmaceutical company Mylan had driven up the prices of its signature EpiPen, a branded auto-injecting device containing a preset dose of epinephrine, a lifesaving drug, to be used by people at risk of experiencing anaphylactic shock triggered by an allergy. "I thought: This is disgusting. There's got to be another auto-injector," she said. "I started Googling."

She ended up devising a workaround for her patients who needed one.

"I basically build an auto-injector. I can do it for pediatric and adult dosing," she said. "I found the right syringe. I put in the dose that I wanted. Whether it's expired or used, people come back and refill it."

The price of EpiPens has surged in recent years — an increase connected to the device, not the active ingredient, epinephrine, which costs pennies. A two-pack now costs more than $600, up from just over $100 in 2009. In response to public outcry and lawmaker scrutiny, Mylan last December released its own generic version of the device at about half the cost, but that's still out of reach for many.

Meanwhile, some insurers have dropped coverage of the pricey name-brand auto-injector pack or made sure customers have access to cost-effective alternatives. Drugstore chain CVS reduced the price of a generic competitor. But all still cost at least $109.

Fixes like Dr. London's can alleviate the pricing issue, but replicating this approach on a large scale could pose problems, since someone with medical expertise must do the refilling to avoid contaminating the device, meet quality standards for the device itself, and make the user aware of any safety issues that using the injector might pose.

Still, for customers with little money to spare, innovations like Dr. London's might represent a path to more security. In addition to costing less, her process tackles a key issue. EpiPen auto-injectors aren't reusable, and epinephrine expires after 18 months, so people with serious allergies must get a fresh device each year.

London charges her patients $50 for an initial device, and $2.50 for a refill.

"There's value to the auto-injector, but it is not built in a way that's refillable or reusable," said Stephen Schondelmeyer, a professor at the University of Minnesota College of Pharmacy, who heads its department of pharmaceutical care and health systems.

Mylan points out, though, that the EpiPen is designed specifically to administer epinephrine quickly and properly in an emergency situation and quotes the Food and Drug Administration in saying that the "the device that delivers the medication is just as critical." Nevertheless, critics say that doesn't justify the skyrocketing of the price paid for a device that has remained unchanged for years.

In the past, insurance has shielded consumers from most of the rising costs of prescription medicine. But that's changed in recent years, as health insurance plans have increasingly required greater cost-sharing — typically through so-called high-deductible health plans, in which beneficiaries pay more out-of-pocket before coverage kicks in. Many of the GOP-backed plans under consideration in the effort to dismantle the Affordable Care Act emphasize this style of coverage, meaning more allergy patients would experience directly the consequences of this price surge, which has drawn scrutiny from the Senate Judiciary Committee. The issue also came up during a recent confirmation hearing for the Trump administration's pick to head the Centers for Medicare & Medicaid Services, this time in regard to costs for federal health programs.

London helps her patients sidestep the costs of an EpiPen by purchasing reusable auto-injectors manufactured by the British company Owen Mumford. She fills it with epinephrine herself. (Both the auto-injector and hormone are approved by the Food and Drug Administration.) Patients can come in for an epinephrine refill after they've used the dose, or after it's expired.

"It's just a no-brainer to do this," she said.

Experts say there's no easy way to calculate what is spent annually on EpiPens that are thrown away because they are past their expiration date. Given the price tag, it's likely many millions of dollars.

Such workarounds can help individuals mitigate climbing costs, though they require extraordinary effort by the doctor and trust from the patient. London did a lot of research to find an auto-injector that was appropriate. The one she settled on is generally marketed for use with insulin syringes, but can also be used for many medications.

The strategy is not without risks, noted Schondelmeyer, who worries about issues of sterility in a reusable device and other safeguards surrounding products made beyond the scope of FDA's watchful eye. That's why he is among those who caution against do-it-yourself remedies and against applying such approaches on a larger scale.

Meanwhile, if a company were to attempt to market such a product, they would likely run into federal regulations and safety standards. Setting up a factory, or otherwise mass-producing the device, he added, would face regulatory hoops that could take years to clear before the product would be available.

"These sound like simple solutions," said Schondelmeyer. "But these aren't market-based solutions that can work broadly."

Other health professionals and government health agencies have employed strategies to deal with the EpiPen's escalating price tag. In at least a dozen states, pilot programs are either underway or being explored for emergency medical technicians to replace the EpiPens they carry with reusable syringes kits.

For example, participating EMTs in New York are given syringes, which can be filled with epinephrine on the spot. Analysts estimate that between $6 million and $10 million is spent annually by the state's first responders on EpiPens "that are generally never used," said Jeremy Cushman, an associate professor of emergency medicine at the University of Rochester, who's leading the New York effort. Using refillable syringes, he said, the total expense per year comes below $400,000.

"You're looking at well over an order of magnitude of savings," Cushman said.

This replacement makes sense for people with medical training, like EMTs, Cushman said. But it doesn't work for everyone.

And some institutions, such as school systems, have been slower to contemplate this and other replacement options — in part because they have less incentive to do so. At least 11 states require that schools keep epinephrine on hand, and schools often receive EpiPens from the manufacturer at heavy discounts or free.

Baltimore County Public Schools, for instance, keeps about 400 EpiPens on hand in its 170 facilities. They record from 25 to 30 anaphylaxis cases annually, about two-thirds of which require stockpiled EpiPens. The rest are thrown away, said Debbie Somerville, the district's coordinator for health services. It's a similar story across the country. In San Francisco, the district's public schools stock EpiPens and typically use fewer than 10 a year and dispose of about 120. Both systems receive the devices for free.

In Baltimore, Somerville said, a switch to syringes and epinephrine has been discussed. But "it's very hard to make the argument" when emergencies can happen without a school nurse or medical professional on hand and a failure to administer the hormone quickly and correctly could be fatal, she explained. That said, "if we had to buy them at market rate right now, it would be a significant investment."

Allergy patients who are advised to carry around this emergency treatment also don't necessarily have the specialized medical knowledge to fill a syringe on the spot. They need something easier, with less room for error. That's why the EpiPen, and in particular the auto-injector, has become so popular.

But, as cost-sharing grows and prices climb, cheaper, homegrown alternatives are catching on, said José Gómez-Márquez, an instructor at the Massachusetts Institute of Technology. He runs a lab focused on promoting do-it-yourself medical technology. Márquez's team, which started out researching how widespread this notion had become, found a growing interest among health professionals to create innovative solutions to patients' problems. This work led to a broader online effort known as Maker Health, which functions as a clearinghouse for ideas he calls "hardware protocols."

In one such protocol, a nurse at one Texas hospital devised a portable and adjustable three-head shower that makes it easier to wash burn patients by keeping damaged skin tissue away from the water spray. Traditionally, nurses have spent hours washing these patients, manually moving around the showerhead. This fix saves labor, time, water and money.

"If you have extreme health care circumstances, you will find extreme health care ingenuity," he said. "Five years ago nobody cared about pricing. Today, people are more price-sensitive."

That's true of London's allergy patients — for whom those EpiPen price hikes matter a great deal.

"The ones who have no insurance, or whose insurance has no [drug] coverage — they just go without," London said. "They carry around the expired one. They think it's going to work, and no, it isn't."

KHN's coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

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