Laws requiring large group health plans to put mental health benefits on an equal footing with physical health have been partially successful, but more work needs to be done.
This article was first published on Friday, June 7, 2019 in Kaiser Health News.
Amanda Bacon's eating disorder was growing worse. She had lost 60% of her body weight and was consuming about 100 calories a day.
But that wasn't sick enough for her Medicaid managed-care company to cover an inpatient treatment program. She was told in 2017 that she would have to weigh 10 pounds less — putting her at 5-foot-7 and 90 pounds — or be admitted to a psychiatric unit.
"I remember thinking, 'I'm going to die,'" the Las Cruces, N.M., resident recalled recently.
Eventually, Bacon, now 35, switched to a plan that paid for treatment, although she said it was still tedious to get services approved.
Many patients like Bacon struggle to get insurance coverage for their mental health treatment, even though two federal laws were designed to bring parity between mental and physical healthcare coverage. Recent studies and a legal case suggest serious disparities remain.
The 2008 Mental Health Parity and Addiction Equity Act required large group health plans that provide benefits for mental health to put that coverage on an equal footing with physical health. Two years later, the Affordable Care Act required small-group and individual health plans sold on the insurance marketplaces to cover mental health services and do that at levels comparable with medical services. (In 2016, parity rules were applied to Medicaid managed-care plans, which cover the majority of people in that federal-state health program for low-income residents.)
The laws have been partially successful. Insurers can no longer write policies that charge higher copays and deductibles for mental healthcare, nor can they set annual or lifetime limits on how much they will pay for it. But patient advocates say insurance companies still interpret mental health claims more stringently.
"Insurance companies can easily circumvent mental health parity mandates by imposing restrictive standards of medical necessity," said Meiram Bendat, a lawyer leading a class-action lawsuit against a mental health subsidiary of UnitedHealthcare.
UnitedHealthcare works to "ensure our products meet the needs of our members and comply with state and federal law," said spokeswoman Tracey Lempner.
Several studies, though, have found evidence of disparities in insurers' decisions.
In February, researchers at the Congressional Budget Office reported that private insurance companies are paying 13% to 14% less for mental healthcare than Medicare does.
The insurance industry's own data shows a growing gap between coverage of mental and physical care in hospitals and skilled nursing facilities. For the five years ending in 2017, out-of-pocket spending on inpatient mental healthcare grew nearly 13 times faster than all inpatient care, according to inpatient data reported in February by theHealthcare Cost Institute, a research group funded by the insurance companies Aetna, Humana, UnitedHealthcare and Kaiser Permanente. (Kaiser Health News is not affiliated with Kaiser Permanente.)
And a 2017 report by the actuarial firm Milliman found that an office visit with a therapist is five times as likely to be out-of-network, and thus more expensive, than a primary care appointment.
Amanda Bacon, who is still receiving care for her eating disorder, remembers fearing that she wouldn't get treatment. She was at one point rushed to an emergency room for care, but after several days she was sent home, no closer to getting well.
Today, because of her disability, Bacon's primary insurance is through Medicare, which has paid for treatment that her earlier Medicaid provider, Molina Healthcare, refused. She has been treated in four inpatient programs in the past two years — twice through Presbyterian Centennial Care, a Medicaid plan she switched to after Molina, and twice though her current Medicare plan. Bacon is also enrolled in a state-run Medicaid plan.
Molina said it could not comment on Bacon's case. "Molina complies with mental health parity laws," said spokeswoman Danielle Smith, and it "applies industry-recognized medical necessity criteria in any medical determinations affecting mental health."
The 'Wrong Criteria'
Dr. Eric Plakun, CEO of the Austen Riggs Center, a psychiatric hospital and residential program in Massachusetts, said that often insurers are "using the wrong criteria" for what makes something medically necessary. They pay enough to stabilize a patient's condition, he said, but not enough to improve their underlying illness. Plakun was one of the experts who testified in the case before Judge Spero in California.
Insurers say they recognize the importance of mental healthcare coverage and that they are complying with the law.
Cathryn Donaldson, a spokeswoman for the trade group America's Health Insurance Plans, said that the industry supports parity but that it is also harder to prove when mental health treatment is needed.
Compared with medical and surgical care, the data and standards to measure mental healthcare "trail far behind." She cited a 2016 study of Minnesota hospitals, where nearly one-fifth of the time patients spent in psychiatric units occurred after they were stabilized and ready to be discharged.
"Just like doctors use scientific evidence to determine the safest, most effective treatments," insurers do the same to cover treatment "consistent with guidelines showing when and where it's effective for patients," Donaldson said.
Health plans commonly apply several controls for mental healthcare. The techniques are legal — unless they are applied more strictly for mental healthcare than medical care.
They often require patients to try cheaper options first, a strategy called "fail first." Patients referred by their doctors to a residential program for opioid addiction, for example, might be denied by their insurers until they try, and fail, to improve at a less expensive part-time program.
Hiring doctors, nurses and pharmacists to review claims is another technique.
Dr. Frederick Villars, who reviews mental health claims for Aetna, remembers arguing with insurers to approve treatment when he was a practicing psychiatrist. His team decides what to cover based on clinical standards, he said, and providers upset about a coverage decision "are well aware of what these guidelines are."
"It's not a pleasant process," he said, "but it's the only tool that exists in this setting to try to keep costs under control."
As health costs continue to grow, straining employer budgets and slowing wage growth, the business community is beginning to take the option more seriously.
This article was first published on Friday, June 7, 2019 in Kaiser Health News.
EASTON, Pa. — Walk into a big-box retailer such as Walmart or Michaels and you're likely to see MCS Industries' picture frames, decorative mirrors or kitschy wall décor.
Adjacent to a dairy farm a few miles west of downtown Easton, MCS is the nation's largest maker of such household products. But MCS doesn't actually make anything here anymore. It has moved its manufacturing operations to Mexico and China, with the last manufacturing jobs departing this city along the Delaware River in 2005. MCS now has about 175 U.S. employees and 600 people overseas.
"We were going to lose the business because we were no longer competitive," CEO Richard Master explained. And one of the biggest impediments to keeping labor costs in line, he said, has been the increasing expense of health coverage in the United States.
Today, he's at the vanguard of a small but growing group of business executives who are lining up to support a "Medicare for All" national health program. He argues not that healthcare is a human right, but that covering everyone with a government plan and decoupling healthcare coverage from the workplace would benefit entrepreneurship.
In February, Master stood with Rep. Pramila Jayapal (D-Wash.) outside the Capitol after she introduced her Medicare for All bill. "This bill removes an albatross from the neck of American business, puts more money in consumer products and will boost our economy," he said.
As health costs continue to grow, straining employer budgets and slowing wage growth, others in the business community are beginning to take the option more seriously.
While the influential U.S. Chamber of Commerce and other large business lobbying groups strongly oppose increased government involvement in healthcare, the resolve of many in the business community — especially among smaller firms — may be shifting.
"There is growing momentum among employers supporting single-payer," said Dan Geiger, co-director of the Business Alliance for a Healthy California, which has sought to generate business support for a universal healthcare program in California. About 300 mostly small employers have signed on.
"Businesses are really angry about the system, and there is a lot of frustration with its rising costs and dysfunction," he said.
Geiger acknowledged the effort still lacks support from any Fortune 500 company CEOs. He said large businesses are hesitant to get involved in this political debate and many don't want to lose the ability to attract workers with generous health benefits. "There is also a lingering distrust of the government, and they think they can offer coverage better than the government," he said.
In addition, some in the business community are hesitant to sign on to Medicare for All with many details missing, such as how much it would increase taxes, said Ellen Kelsay, chief strategy officer for the National Business Group on Health, a leading business group focused on health benefits.
Democrats Propel the Debate
For decades, a government-run health plan was considered too radical an idea for serious consideration. But Medicare for All has been garnering more political support in recent months, especially after a progressive wave helped Democrats take control of the House this year. Several 2020 Democratic presidential candidates, including Sens. Bernie Sanders and Elizabeth Warren, strongly back it.
The labor unions and consumer groups that have long endorsed a single-payer health system hope that the embrace of it by employers such as Master marks another turning point for the movement.
Supporters of the concept say the health system overall would see savings from a coordinated effort to bring down prices and the elimination of many administrative costs or insurance company profits.
"It's critical for our success to engage employers, particularly because our current system is hurting employers almost as much as it is patients," said Melinda St. Louis, campaign director of Medicare for All at Public Citizen, a consumer-rights group based in Washington.
Master, a former Washington lawyer, worked on Democratic Sen. George McGovern's presidential campaign before returning to Pennsylvania in 1973 to take over his father's company, which made rigid paper boxes. In 1980, he founded MCS, which pioneered the popular front-loading picture frame and steamless fog-free mirrors for bathrooms. The company has grown into a $250 million corporation.
Master frequently travels to Washington and around the country to talk to business leaders as he seeks to build political support for a single-payer health system.
In the past four years, he has produced several documentary videos on the topic. In 2018, he formed the Business Initiative for Health Policy, a nonprofit group of business leaders, economists and health policy experts trying to explain the financial benefits of a single-payer system.
Dan Wolf, CEO of Cape Air, a Hyannis, Mass.-based regional airline that employs 800 people calls himself "a free market guy." But he also supports Medicare for All. He said Master helps turn the political argument over single-payer into a practical one.
"It's about good business sense and about caring for his employees and their well-being," he said, adding that employers should no longer be straddled with the cost and complexity of healthcare.
"It makes no more sense for an airline to understand health policy for the bulk of its workers than for a health facility to have to supply all the air transportation for its employees," he said.
Employers are also an important voice in the debate because 156 million Americans get employer-paid healthcare, making it by far the single-largest form of coverage.
Master said his company has tried various methods to control costs with little success, including high deductibles, narrow networks of providers and wellness plans that emphasize preventive medicine.
Insurers who are supposed to negotiate lower rates from hospitals and doctors have failed, he added, and too many premium dollars go to covering administrative costs. Only by having the federal government set rates can the United States control costs of drugs, hospitals and other health services, he said.
"Insurance companies are not watching the store and don't have incentives to hold down costs in the current system," he said.
Glad The Boss Is Trying To Make A Difference
What's left of MCS in Pennsylvania is a spacious corporate office building housing administrative staff, designers and a giant distribution center piled high with carton boxes from floor to ceiling.
MCS pays an average of $1,260 per month for each employee's healthcare, up from $716 in 2009, the company said. In recent years, the company has reduced out-of-pocket costs for employees by covering most of their deductibles.
Medicare for All would require several new taxes to raise money, but Master said such a plan would mean savings for his company and employees.
MCS employees largely support Master's attempt to fix the health system even if they are not all on board with a Medicare for All approach, according to interviews with several workers in Easton.
"I think it's a good idea," said Faith Wildrick, a shipper at MCS who has worked for the company 26 years. "If the other countries are doing it and it is working for them, why can't it work for us?"
Wildrick said that even with insurance her family struggles with health costs as her husband, Bill, a former MCS employee, deals with liver disease and needs many diagnostic tests and prescription medications. Their annual deductible has swung from $4,000 several years ago to $500 this year as the company has worked to lower employees' out-of-pocket costs.
"I'm really glad someone is fighting for this and trying to make a difference," said Wildrick.
Jessica Ehrhardt, the human resources manager at MCS, said the effort to reduce employees' out-of-pocket health costs means the company must pay higher health costs. That results in less money for salary increases and other benefits, she added.
Asked about Medicare for All, Ehrhardt said, "It's a drastic solution, but something needs to happen."
For too long, Master said, the push for a single-payer health system has been about ideology.
"The movement has been about making healthcare a human right and that we have a right to universal healthcare," he said. "What I am saying is this is prudent for our economy and am trying to make the business and economic case."
Tens of thousands of Americans each year are dropped by their insurers over payment issues, sometimes with little or no prior warning from their insurers.
This article was first published on Wednesday, June 5, 2019, in Kaiser Health News.
Caitlin and Corey Gaffer know they made a mistake.
Anyone could have done the same thing, the Minneapolis couple says. Still, they can't believe it cost them their health insurance coverage just as Caitlin was in the middle of pregnancy with their first child.
"I was like 'What?' There's no way that's possible," said Caitlin, 31, of her reaction to the letter she opened in early October telling them the coverage they had for nearly two years had been canceled. It cited nonpayment of their premium as the reason.
Except they had paid the bill, they thought.
The Gaffers' snafu — and their marathon battle to correct the error with insurer HealthPartners — is featured in the podcast "An Arm and a Leg," which launches its second season this week and is co-produced by Kaiser Health News.
Like the Gaffers, tens of thousands of Americans each year — exact counts aren't available — are dropped by their insurers over payment issues, sometimes with little or no prior warning from their insurers.
The question is: Can insurers cancel people with little or no notice? The answer is yes … and no. Like so many issues in American healthcare, it is surprisingly complicated.
This is one problem the Affordable Care Act was designed to fix. Certainly, safeguards were put in place. Insurers can't cancel people when they fall ill, for example. But the protections for being dropped for a missed payment are uneven. Consumers who get an ACA subsidy have more protection than those who don't.
The Gaffers didn't qualify for a subsidy. So they were subject to state law. Minnesota's law requires insurers to provide at least 30 days' notice before canceling, said Scott Smith, spokesman for the state Department of Health, which regulates HMOs. However, an administrative rule seems to undercut that requirement.
The Gaffers didn't get a notice, they say. Their efforts to correct their error were stymied until Dan Weissmann, creator and host of "An Arm and A Leg," started making inquiries about their case.
Misfired Payments
The problem for the Gaffers started in early September. They changed checking accounts and had to set up all new online payments. When they made their monthly $730 health insurance premium payment, they mistakenly sent it to a hospital owned by HealthPartners rather than the health plan itself. The hospital didn't let the health plan know it had a payment from the Gaffers. Compounding the problem, the couple sent their October payment a couple of weeks later to the correct place but had insufficient funds to cover the amount.
The Gaffers got a letter from HealthPartners dated Oct. 8 canceling coverage back to mid-September. Caitlin was six months pregnant.
"It was a busy time in our life," said Corey, 32, who runs an architectural photography studio. "We made these two little mistakes, but were never given any notice that we were making mistakes until after the fact."
Why didn't the hospital and health plan communicate about the misdirected payment? After all, they are part of the same system and that could have avoided the problem altogether.
HealthPartners spokeswoman Rebecca Johnson said its hospitals are supposed to notify the health plan if they receive premium payments in error, but said that "even though we have this process, we are not always notified of this or not notified in a timely fashion."
As far as a past-due notice to the Gaffers, Johnson said HealthPartners' policy at the time was to include information on monthly statements about outstanding balances.
That, however, is different from getting a warning that "you will be canceled as of this date," said JoAnn Volk, a research professor at the Georgetown University Center on Health Insurance Reforms.
Still, the Gaffers' story does have a happy ending — including an apology and some new notification practices by HealthPartners — but not before they racked up lots of stress and nearly $30,000 in medical bills incurred while Caitlin was uninsured briefly during her complicated pregnancy.
Same Insurance, Different Rules
The ACA bars insurers from retroactively canceling policies if consumers fall ill or discover they are pregnant —things that could have occurred in most states before the federal law passed.
But it does allow allows cancellations for two reasons: false information on an application or failure to pay premiums.
Those who qualify for a tax credit — because they earn less than 400% of the federal poverty level, or roughly $50,000 for an individual — get a 90-day grace period after missing a payment. Also, the law requires insurers to notify those policyholders that they have fallen behind and face cancellation. If payment is made in full before the end of the 90-day grace period, they are reinstated. If not, they're canceled and medical costs incurred in the second and third months of the grace period fall on the consumer.
This policy keeps federal subsidy dollars flowing to insurers during the grace period, even if a consumer has a financial wobble.
It's different for people like the Gaffers, however, who make too much for a subsidy. They are subject to state laws and can be dropped much more abruptly.
Most states have a 30-day grace period to make a payment after the premium is due, said Tara Straw, a senior policy analyst at the Center on Budget and Policy Priorities. But how much prior notice insurers must give before canceling — if any — varies by state.
"In most states, plans would balk at also having to send a notice of delinquent premium," said Straw. "But notice is important for consumers so they can correct the situation and make the payment, especially in a case like this where they made an honest mistake."
It's a policy that harks back to a time before the ACA when individual consumers could be dropped for almost any reason. It isn't clear why the Gaffers received no notice.
Spokeswoman Johnson, when asked about the state requirement, wrote: "Members are notified of any outstanding balance on their monthly premium statements. They have a 30-day grace period."
HealthPartners told the state's insurance exchange as part of an inquiry into the Gaffer's case, that "as far as past-due notices go, we do not send letters for members that do not have [a subsidy]," an appeals document shows.
Following the attention on the Gaffer's plight, HealthPartners has a new policy, rolled out in March and April for customers who don't get subsidies: Those who fall behind will get a late notice around the 15th of the month, said spokeswoman Johnson.
That might have helped the Gaffers, but it is still far less time than the 90-day window the insurer must give by law to anyone who bought the same insurance plan but got a subsidy.
An Apology
As for the Gaffers, who scrambled for months trying to get coverage and went uninsured for a while, there's good news.
First, they got new coverage from a different insurer before they welcomed baby Maggie, born without a hitch and healthy in late January.
Months later, after fielding questions from "An Arm and a Leg," HealthPartners called the Gaffers: It wanted to reinstate them — and cover the outstanding medical bills racked up during their time uninsured.
"We've apologized to the family, reinstated their coverage and view this situation as an opportunity where we can do better," spokeswoman Johnson said in an email.
The Gaffers have learned a lot in the process.
"Being an advocate for yourself is such a huge thing," said Corey.
He's glad HealthPartners has now said it will send warnings to consumers who fall behind on payments.
Oh, and just to be sure, the couple's premiums are now on "auto pay" and "we have like eight calendar reminders set up," Caitlin said. "Today it popped up three times: 'Make sure insurance is paid.'"
Amazonhas opened a new healthcare frontier: Now Alexa can be used to transmit patient data. Using this new feature — which Amazon labeled as a "skill" — a company named Livongo will allow diabetes patients — which it calls "members" — to use the device to "query their last blood sugar reading, blood sugar measurement trends, and receive insights and Health Nudges that are personalized to them."
Private equity and venture capital firms are in love with a legion of companies and startups touting the benefits of virtual doctors' visits and telemedicine to revolutionize healthcare, investing almost $10 billion in 2018, a record for the sector. Without stepping into a gym or a clinic, a startup called Kinetxx will provide patients with virtual physical therapy, along with messaging and exercise logging. And Maven Clinic (which is not actually a physical place) offers online medical guidance and personal advice focusing on women's health needs.
In April, at Fortune's Brainstorm Health conference in San Diego, Bruce Broussard, CEO of health insurer Humana, said he believes technology will help patients receive help during medical crises, citing the benefits of home monitoring and the ability of doctors' visits to be conducted by video conference.
But when I returned from Brainstorm Health, I was confronted by an alternative reality of virtual medicine: a $235 medical bill for a telehealth visit that resulted from one of my kids calling a longtime doctor's office. It was for a five-minute phone call answering a question about a possible infection.
Virtual communications have streamlined life and transformed many of our relationships for the better. There is little need anymore to sit across the desk from a tax accountant or travel agent or to stand in a queue for a bank teller. And there is certainly room for disruptive digital innovation in our confusing and overpriced healthcare system.
But it remains an open question whether virtual medicine will prove a valuable, convenient adjunct to healthcare. Or, instead, will it be a way for the U.S. profit-driven healthcare system to make big bucks by outsourcing core duties — while providing a paler version of actual medical treatment?
After all, my doctors have long answered my questions and dispensed phone and email advice for free — as part of our doctor-patient relationship — though it didn't have a cool branding moniker like telehealth. And my obstetrician's office offered great support and advice through two difficult pregnancies — maybe they should have been paid for that valuable service. But $235 for a phone call (which works out to over $2,000 per hour)? Not even a corporate lawyer bills that.
Logic holds that some digital health tools have tremendous potential: A neurologist can view a patient by video to see if lopsided facial movements suggest a stroke. A patient with an irregular heart rhythm could send in digital tracings to see if a new prescription drug is working. But the tangible benefit of many other virtual services offered is less certain. Some people may like receiving feedback about their sleep from an AppleWatch, but I'm not sure that's medicine.
And if virtual medicine is pursued in the name of business efficiency or just profit, it has enormous potential to make healthcare worse.
My doctor's nurse is far better equipped to answer a question about my ongoing health problem than someone at a call center reading from a script. And, however thorough a virtual visit may be, it forsakes some of the diagnostic information that comes when you see and touch the patient.
A study published recently in Pediatrics found that children who had a telemedicine visit for an upper-respiratory infection were far more likely to get an antibiotic than those who physically saw a doctor, suggesting overprescribing is at work. It makes sense: A doctor can't use a stethoscope to listen to lungs or wiggle an otoscope into a kid's ear by video. Similarly, a virtual physical therapist can't feel the knots in muscle or notice a fleeting wince on a patient's face via camera.
More important, perhaps, virtual medicine means losing the support that has long been a crucial part of the profession. There are programs to provide iPads to people in home hospice for resources about grief and chatbots that purport to treat depression. Maybe people at such challenging moments need — and deserve — human contact.
Of course, companies like those mentioned are expecting to be reimbursed for the remote monitoring and virtual advice they provide. Investors, in turn, get generous payback without having to employ so many actual doctors or other health professionals. Livongo, for instance, has raised a total of $235 million in funding over six rounds. And, as of 2018, Medicare announcedit would allow such digital monitoring tools to "qualify for reimbursement," if they are "clinically endorsed." But, ultimately, will the well-being of patients or investors decide which tools are clinically endorsed?
So far, with its new so-called skill, Alexa will be able to perform a half-dozen health-related services. In addition to diabetes coaching, it can find the earliest urgent care appointment in a given area and check the status of a prescription drug delivery.
But it will not provide many things patients desperately want, which technology should be able to readily deliver, such as a reliable price estimate for an upcoming surgery, the infection rates at the local hospital, the location of the cheapest cholesterol test nearby. And if we're trying to bring healthcare into the tech-enabled 21st century, how about starting with low-hanging fruit: Does any other sector still use paper bills and faxes?
The Democratic governor is proposing a tax penalty on Californians who don't have health insurance — similar to the unpopular federal penalty the Republican-controlled Congress eliminated.
This story was first published on Tuesday, June 4, 2019 in Kaiser Health News.
Claire Haas and her husband are at a health insurance crossroads.
If they were single, each would qualify for a federal tax credit to help reduce the cost of their health insurance premiums. As a married couple, they get zip.
"We talk about getting divorced every time we get our healthcare bills," said Haas, 34, of Oakland, Calif. She has been married to her husband, Andrew Snyder, 33, for two years.
"We kind of feel like we messed up. We shouldn't have gotten married."
The couple pays about $900 in monthly premiums — which adds up to about 14% of their annual income, said Haas, a self-employed leadership coach and consultant. Snyder is an adjunct professor of ethnomusicology.
Under a proposalby Gov. Gavin Newsom, an estimated 850,000 Californians could get help paying their premiums, including people like Haas and Snyder, who together make too much to qualify for federal financial aid but still have trouble affording coverage.
To pay for the health insurance tax credits, the Democratic governor is proposing a tax penalty on Californians who don't have health insurance — similar to the unpopular federal penaltythe Republican-controlled Congress eliminated, effective this year.
If Newsom's $295 million plan is enacted, California would be the first state to offer financial aid to middle-class families who have shouldered the full cost of premiums themselves, often well over $1,000 a month.
"This is a gap in the Affordable Care Act, but there's been no action at the federal level," said Matthew Fiedler, a fellow with the USC-Brookings Schaeffer Initiative for Health Policy.
Democrats in Congress introduced legislation this year to expand the federal subsidy to more people, but those efforts have stalled in the past in the face of Republican opposition.
In California, legislators are debating Newsom's penalty and tax credit proposals as part of budget negotiations, which must be wrapped up by June 15. Democrats control the legislature, but Republicans and taxpayer groups are opposed to the proposed penalty, saying people should have a choice about whether to buy insurance.
"It's a very costly and regressive tax on young people who can't afford it," said David Wolfe, legislative director of the Howard Jarvis Taxpayers Association. "They likely aren't going to get sick, and they want to take that chance."
Three other states — Massachusetts, New Jersey and Vermont — and the District of Columbia already have adopted state health insurance requirements. Health experts say these mandates encourage young, healthy people to buy coverage alongside older, sicker — and more expensive — enrollees.
If lawmakers approve a state tax penalty, modeled after the now-defunct ACA mandate, some Californians could owe thousands of dollars if they fail to buy insurance.
"Without the mandate, everybody's premiums go up," Newsom said at an event in Sacramento in early May. "Every single person in this state will experience an increase in their costs if we don't have a diversified risk pool."
Massachusetts and Vermont provide state financial aid to low-income people who qualify for federal aid under the ACA, according to the USC-Brookings Schaeffer Initiative for Health Policy. Newsom wants to go a step further and give financial help to middle-income earners — which could include families of four earning up to about $154,500.
Under his proposal, 75% of the financial aid would go to about 190,000 of these middle-income people who make between 400% and 600% of the federal poverty level. That's between about $50,000 and $75,000 a year for an individual and between about $103,000 and $154,500 for a family of four.
The average household tax credit in this category would be $144 per month, according to Covered California.
The remaining money would go toward tax credits for about 660,000 people who earn between 200% and 400% of the federal poverty level, or roughly between $25,000 and $50,000 for an individual and $51,500 and $103,000 for a family of four. The average household tax credit in this category would be $13 a month, Covered California estimated.
Exactly how much Californians could receive would vary depending on where they live, their ages, incomes and family size, said Peter Lee, Covered California's executive director.
For example, a couple, both 62, living in the San Francisco Bay Area making $72,000 a year doesn't qualify for federal tax credits. They now pay a $2,414 monthly premium — or about 40% of their income.
That couple could qualify for a $1,613 state tax credit under Newsom's proposal, lowering the cost of health insurance to about 13% of their income, according to a Covered California analysis.
By comparison, the ACA defines an affordable employer-sponsored health plan as one that costs about 9.5% or less of an employee's household income.
California's high premium costs are among the biggest concerns middle-income customers raise with Kevin Knauss, an insurance agent in the Sacramento region.
"I have clients, especially those who are self-employed, who have literally discussed the possibility of not working for two or three months or stepping back from projects" so they can earn less and qualify for federal tax credits, Knauss said.
Other insurance agents said they've met middle-income families who are willing to forgo insurance for one family member — often the breadwinner — to bring down costs.
Alma Beltran, a small-business owner in Chula Vista, Calif., doesn't have health insurance, and neither do her husband and 17-year-old daughter.
Beltran knows it's a risk but said the premiums this year were simply unaffordable: $1,260 a month for a plan with a whopping $13,000 deductible.
"I decided to let my business grow at the expense of my health insurance," said Beltran, 53, who manufactures labels for the beer and wine industry. "This is the first year ever that I haven't had health insurance."
Such stories are why some lawmakers think Newsom's proposal doesn't go far enough. For instance, some households wouldn't qualify for a state tax credit until they spent a quarter of their income on premiums.
"We're still talking about a substantial portion of someone's income," said state Sen. Richard Pan (D-Sacramento). "I appreciate the governor's leadership, but I think that we do need to more."
The state Senate wants the governor to double the funding to about $600 million, not only by relying on the penalty revenue but by dipping into the state general fund. California is projected to have a $21.5 billion budget surplus for budget year 2019-20.
While Newsom said he supports giving consumers larger subsidies, he said his plan is fiscally responsible because it has a dedicated revenue source from the proposed health insurance penalty.
"Perfect's not on the menu, but better than any other state in America is," Newsom said.
As rural hospital closures roil the country, some states are banking on a Trump administration proposal to change the way hospital payments are calculated to rescue them.
The goal of the proposal, unveiled by Centers for Medicare & Medicaid Services Administrator Seema Verma last month, is to bump up Medicare's reimbursements to rural hospitals, some of which receive the lowest rates in the nation.
For example, Alabama's hospitals — most of which are rural — stand to gain an additional $43 million from Medicare next year if the federal agency makes this adjustment.
"We're hopeful," said Danne Howard, executive vice president and chief policy officer of the Alabama Hospital Association. "It's as much about the rural hospitals as rural communities being able to survive."
The proposed tweak, as wonky as it is, comes with considerable controversy.
By law, any proposed changes in the calculation of Medicare payments must be budget-neutral; in other words, the federal government can't spend more money than previously allocated. That would mean any change would have a Robin Hood-like effect: increasing payments to some hospitals and decreasing them to others.
"There is a real political tension," said Mark Holmes, director of the University of North Carolina's Cecil G. Sheps Center for Health Services Research. Changing the factors in Medicare's calculations that help hospitals in rural communities generally would mean that urban hospitals get less money.
The federal proposal targets a long-standing and contentious regulation known in Washington simply as the "wage index." The index, created in the 1980s as a way to ensure federal Medicare reimbursements were equitable for hospitals nationwide, attempts to adjust for local market prices, said Allen Dobson, president of the consulting firm Dobson, DaVanzo & Associates.
That means under the current index a rural community hospital could receive a Medicare payment of about $4,000 to treat someone with pneumonia compared with an urban hospital receiving nearly $6,000 for the same case, according to CMS.
"The idea was to give urban a bit more and rural areas a bit less because their labor costs are a bit less," said Dobson, who was the research director for Medicare in the 1980s when the index was created. "There's probably no exact true way to do it. I think everybody agrees if you are in a high-wage area you ought to get paid more for your higher wages."
For decades, hospitals have questioned the fairness of that adjustment.
Rural hospitals nationwide have a median wage index that is consistently lower than that of urban hospitals, according to a recent brief by the Sheps Center. The gap is most acute in the South, where 14 of the 20 states account for the lowest median wage indices.
Last year, the Department of Health and Human Services Office of Inspector Generalfound that the index may not accurately reflect local labor prices and, therefore, Medicare payments to some hospitals "may not be appropriately" adjusted for local labor prices. More plainly, in some cases, the payments are too low.
In an emailed statement to KHN, Verma said the current wage index system "has partly contributed to disparities in reimbursement across the country."
CMS' current proposal would increase Medicare payments to the mostly rural hospitals in the lowest 25th percentile and decrease the payments to those in the highest 75th percentile. The agency is also proposing a 5% cap on any hospital's decrease in the final wage index in 2020 compared with 2019. This would effectively limit the loss in payments some would experience.
Dobson, a former Medicare research director, said he expects "enormous resistance." (The CMS proposal is open for public comment until June 24.)
HHS Secretary Alex Azar, foreshadowing how difficult a change could be, said during a May 10 Senate budget hearing that the wage index is "one of the more vexing issues in Medicare." It's problematic, agreed Tom Nickels, an AHA executive vice president, noting in an emailed statement that there are other ways "to provide needed relief to low-wage areas without penalizing high-wage areas."
It's this split that appears to be dictating the range of reactions.
The Massachusetts Health & Hospital Association's Michael Sroczynski, who oversees its government lobbying, questioned in an emailed statement whether the wage index is the correct mechanism for providing relief to struggling hospitals. The state's hospitals have historically been at the higher end of the wage index.
In contrast, Tennessee Hospital Association CEO Craig Becker applauded the proposed change and said the Trump administration is recognizing the "longstanding unfairness" of the index. Tennessee has been among the hardest hit with hospital closures, counting 10 since 2012.
In Alabama, wherefour rural hospitals have closed since 2012, Howard said that without the change she "could see a dozen or more of our hospitals not being able to survive the next year." Indeed, Howard said, hospitals in more than 20 states could gain Medicare dollars if the proposal passes and "only a small number actually get hurt."
Kaiser Health News asked the Missouri Hospital Association, in a state where most hospitals do not stand to gain or lose significantly from the rule change, to calculate the exact differences in hospital payments under the current wage index formula. Under the complex formula, a hospital in Santa Cruz, Calif., an area at the top end of the range, received a Medicare payment rate of $10,951.30 — or 70% more — for treating a concussion with major complications in 2010, compared with a rural Alabama hospital, at the bottom end, which received $6,441.76 to provide the same care.
Even more, MHA's data analysis showed that the lower payments to Alabama hospitals have compounded over time. In 2019, Medicare increased its pay to the hospitals in the Santa Cruz-Watsonville area for the same concussion care. It now stands at $13,503.37 — a nearly 23% increase above the 2010 payment. In contrast, rural Alabama hospitals recorded a 3% payment increase, to $6,646.80, for the same care.
For Alabama, addressing the calculation disparity could be "the lifeline that we've been praying for," Howard said.
RIP Medical Debt, a nonprofit organization based in Rye, N.Y., that arranges medical debt payoffs, reports a recent surge in participation from primarily Christian churches.
This article was first published on Monday, June 3, 2019 in Kaiser Health News.
The leaders of Pathway Church on the outskirts of Wichita, Kan., had no clue that the $22,000 they already had on hand for Easter would have such impact.
The nondenominational suburban congregation of about 3,800 had set out only to help people nearby pay off some medical debt, recalled Larry Wren, Pathway's executive pastor. After all, the core membership at Pathway's three sites consists of middle-income families with school-age kids, not high-dollar philanthropists.
But then they learned that, like a modern-day loaves-and-fishes story, that smaller amount could wipe out $2.2 million in debt not only for the Wichita area but all available debt for every Kansan facing imminent insolvency because of medical expenses they couldn't afford to pay — 1,600 people in all.
As Wren thought about the message of Easter, things clicked. "Being able to do this provides an opportunity to illustrate what it means to have a debt paid that they could never pay themselves," he said. "It just was a great fit."
Churches in Maryland, Illinois, Virginia, Texas and elsewhere have been reaching the same conclusion. RIP Medical Debt, a nonprofit organization based in Rye, N.Y., that arranges such debt payoffs, reports a recent surge in participation from primarily Christian places of worship. Eighteen have worked with RIP in the past year and a half, said Scott Patton, the nonprofit's director of development. More churches are joining in as word spreads.
The mountain of bills they are trying to clear is high. Medical debt contributes totwo-thirds of bankruptcies, according to the American Journal of Public Health. And a 2018 Kaiser Family Foundation/New York Times poll showed that of the 26% of people who reported problems paying medical bills, 59% reported a major life impact, such as taking an extra job, cutting other household spending or using up savings. (Kaiser Health News is an editorially independent program of the foundation.)
The federal Consumer Financial Protection Bureau proposed a rule this month to curb debt collectors' ability to bug those with outstanding bills, and some states have tried various measures, such as limiting the interest rates collectors may charge. But until a comprehensive solution emerges, churches and others are trying to ease some of the load by jumping into the debt market.
A big part of RIP's appeal comes from the impact even a small donation can have, say participating church leaders. When a person can't pay a bill, that debt is often packaged with other people's debt and sold to bill collectors for some fraction of the total amount of the bill. Those debts usually come from low-income people and are more difficult to collect.
RIP Medical Debt buys debt portfolios on this secondary market for pennies on the dollar with money from its donors. But instead of collecting the debt, RIP forgives it.
To be eligible for repayment from RIP, the debtor must be earning less than twice the federal poverty level (about $25,000 a year for an individual), have debts that are 5% or more of their annual income and have more debt than assets.
Because hospitals and doctors are eager to get those hard-to-collect debts off their books, they sell them cheap. That's how, Patton said, those 18 churches have been able to abolish $34.4 million of debt since the start of 2018.
Working this way puts a high-dollar project within reach of even small churches. Revolution Annapolis, a nondenominational Maryland church with Sunday attendance of around 200 and without a permanent building, wiped out $1.9 million in debt for 900 families in March. Total amount raised: $15,000.
Revolution leaders heard about RIP Medical Debt on a segment of John Oliver's "Last Week Tonight" in 2016, said Kenny Camacho, lead pastor. But at the time, they didn't think they had the resources to make much of a splash.
After hearing about another church that paid off millions last year, Revolution leaders decided to try it. At most, they hoped to have an impact in their area, Camacho said. But the money went much further, eventually covering 14 counties in eastern and central Maryland.
Emmanuel Memorial Episcopal Church, a congregation of about 175 families in Champaign, Ill., had a similar experience. The original idea was to try to have an impact just in Champaign County, said the Rev. Christine Hopkins. But their $15,000 abolished $4 million of debt for the entire diocese, which stretches across the southern half of the state.
"We were bowled over, actually," Hopkins said. "It was to the point of tears."
In many cases, churches have not had to do a fundraising campaign because their contribution came from money already on hand. Emmanuel Episcopal, for instance, had leftovers from a campaign set up a year ago to celebrate the centennial of its church building.
The Fincastle Baptist Church, with 1,600 members in the Roanoke, Va., area used money it had budgeted for an annual "Freedom Fest" event to honor first responders, and then partnered with local television station WSLS in a telethon to raise more. That effort abolished over $2.7 million in medical debt targeted at veterans.
The RIP nonprofit allows donors to choose geographic areas they want to reach and can pinpoint veterans as recipients. But beyond that, no restrictions are allowed, Patton said. A church can't specify which types of medical procedures could be paid for or anything about the background of the recipients.
That didn't bother church leaders contacted for this story. But it is a subject that's been broached by donors of all types in the past, Patton said.
For instance, some potential donors have asked to exclude people from different faiths or certain political parties, he said. "It's just absurd. This is not a revenge tactic," Patton said. "People who are requesting those things really don't understand philanthropy."
Churches don't necessarily experience a direct return in the way of new members. All the processing goes through RIP Medical Debt, which sends letters notifying the beneficiaries their debts have been forgiven. Donors can have their names listed on those letters, but not everyone opts to do so.
New membership wasn't the point for Pathway Church in Kansas, Wren said. "Sometimes the more powerful spiritual message is when you're able to do something for somebody that you'll never meet."
The Revolution Church decided against putting its name on the notification letters, Camacho said, because it didn't want beneficiaries to feel obligated. "When a person has their debt forgiven, we want them to experience that as a kind of no-strings-attached gift," he said. "We don't want there to be any sense that because we did this now they should visit our church or something."
Besides, he said, the gift covered an area large enough that some beneficiaries live a couple of hours away. "I would much rather them think more positively about the church down the street from where they live."
Donors sometimes hear back from the people whose debts they've paid, but not often. Many don't expect it. "I guess that's a biblical story, too. Jesus forgave 10, and only one said thank you," Hopkins said.
Churches have a lot of choices when it comes to charity, but medical debt and affordability issues often resonate with parishioners. Some churches are worried enough about medical costs for their members that they subscribe to cost-sharing nonprofits, in which members pay each other's medical bills.
Medical mission work has long been an important form of outreach for Fincastle Baptist Church in Virginia, said associate pastor Warren King. The church runs a free clinic, and mission trips to other countries usually include a medical component.
Paying off medical debt is an extension of that line of thinking. "We need to do not just this thing but many things that practically show the love of God," King said. "It's hard to tell somebody God loves you if they're starving and you don't try to deal with the problem."
Hopkins said the debt outreach was a satisfying project for her Illinois congregation because it could resolve a problem for the beneficiaries. "We do a lot of outreach that's food-related and housing-related. This was something different," Hopkins said. "You help feed somebody, and you're feeding them again the next day. This was something that could make an impact."
The agency convened a meeting of experts this week to help it determine whether surgical staplers should be moved out of its lowest-risk category to a higher grade that may require additional oversight.
This article was first published on Thursday, May 30, 2019 in Kaiser Health News.
The Food and Drug Administration has acknowledged that more than 56,000 never-before-disclosed surgical stapler malfunctions were quietly reported to the agency from 2011 through 2018.
The newly acknowledged reports were detailed in an executive summary for FDA advisers. The agency convened a meeting of experts this week to help it determine whether surgical staplers should be moved out of its lowest-risk category — reserved for simple devices like tongue depressors and bandages — to a higher grade that may require testing and additional oversight. Surgical staplers are used to cut and seal vessels and tissues inside the body.
When the FDA initially announced the meeting in March, it acknowledged in a letter to doctors that "many more device malfunction reports" were reported to the agency than it had publicly disclosed. The FDA executive summary published this week shows that the total reports more than doubled when the agency took nonpublic reports into account, totaling nearly 110,000 malfunctions or injuries from 2011 through 2018.
"It shocks the conscience," said Chad Tuschman, a lawyer representing Mark Levering, 62, of Toledo, Ohio, who suffered a serious brain injury after a stapler malfunction caused massive bleeding in 2018. The surgeon, hospital and device maker Covidien, a division of Medtronic, have all denied allegations of wrongdoing in an ongoing legal case.
Surgical staplers have a unique ability to harm patients if they malfunction. Often used in minimally invasive surgeries, they are meant to both cut tissue and vessels and then quickly seal them. Patients have been gravely harmed when staplers have failed to fire or seal tissue, suffering from massive bleeding or infections if stomachs or intestines aren't sealed properly.
The nonpublic reports were sent to the FDA as "alternative summary" reports, the topic of a recent Kaiser Health News investigationthat focused on the agency accepting millions of hidden reports related to medical devices — including for surgical staplers.
The agency had previously acknowledged that in 2016, even as it posted fewer than 100 stapler-related injuries in a public database called MAUDE, it accepted nearly 10,000 reports into its little-known internal alternative summary reporting database. (The data in the FDA's executive summary contains reports for staplers and staples, which experts have said were just different names for the same problem.)
Tuschman said he was stunned that there were more hidden reports than public ones in the executive summary. "The first question should be 'Why?' Why would they have the right to submit to a hidden database?"
Leading surgical stapler makers include divisions of Medtronic and Johnson & Johnson. Medtronic has said the FDA granted it exemptions for stapler-related malfunctions; Johnson & Johnson said it has not. (Ethicon is the name of its subsidiary medical devices company.)
On Thursday, the advisory panel recommended switching surgical staplers to a higher-risk classification with additional safety requirements, according to meeting attendee Jack Mitchell, director of health policy for the nonprofit National Center for Health Research. FDA spokeswoman Stephanie Caccomo declined to confirm this, citing a media office policy against telling reporters what happens at advisory committee meetings, which are open to the public.
"Every surgeon that I have ever worked with has had stapler failures," said Dr. Doug Kwazneski, a Michigan surgeon who authored a survey in 2013 about "unacknowledged" stapler problems after searching the FDA's public database of device incidents and coming up empty-handed.
"Going into something without data is dangerous," Kwazneski said. "If the information exists, we should have access to it."
More than 400 deaths have been reported since 2011 in the FDA's public MAUDE database; fatalities can't be reported to the alternative summary reporting database. Deaths were associated with Ethicon and Covidien products.
In recent communications about stapler safety to doctors, the FDA has advised against using the staplers on large blood vessels.
Kwazneski said surgical staplers are a time-saving tool, which lessens the risk of anesthesia complications during surgery, for example. But it's important for physicians to remember they can fail.
Diana Zuckerman, president of the National Center for Health Research, said that alternative summary reports are "a well-kept secret" and that any reports related to their existence were "done in a way that was not understood as a repository for hundreds of thousands of serious adverse event reports."
Mitchell said he was surprised the FDA didn't reclassify surgical staplers "a long time ago," considering the agency had the additional 56,000 alternative summary reports all along. "They were the only ones who had this information, and it was nonpublic."
Kwazneski suspected that there were a high number of hidden reports for stapler malfunctions, but he said the numbers revealed in the FDA's executive summary still came as a shock.
"The sheer magnitude of seeing it all at once kind of blew my mind," he said.
Staplers lost their eligibility to report malfunctions through the hidden system in February 2019, and the FDA announced it would end the alternative summary reporting program earlier this month. It has promised to make that data public in the "coming weeks."
Hospitals are eager to get particular specialists on staff because they bring in business that can be highly profitable. But those efforts, if they involve unusually high salaries or other enticements, can violate federal anti-kickback laws.
For a hospital that had once labored to break even, Wheeling Hospital displayed abnormally deep pockets when recruiting doctors.
To lure Dr. Adam Tune, an anesthesiologist from nearby Pittsburgh who specialized in pain management, the Catholic hospital built a clinic for him to run on its campus in Wheeling, W.Va. It paid Tune as much as $1.2 million a year — well above the salaries of 90% of pain management physicians across the nation, the federal government charged in a lawsuit filed this spring.
In addition, Wheeling paid an obstetrician-gynecologist a salary as high as $1.3 million a year, so much that her department bled money, according to a related lawsuit by a whistleblowing executive. The hospital paid a cardiothoracic surgeon $770,000 and let him take 12 weeks off each year even though his cardiac team also routinely ran in the red, that lawsuit said.
Despite the losses from these stratospheric salaries and perks, the recruitment efforts had a golden lining for Wheeling, the government asserts. Specialists in fields like labor and delivery, pain management and cardiology reliably referred patients for tests, procedures and other services Wheeling offered, earning the hospital millions of dollars, the lawsuit said.
The problem, according to the government, is that the efforts run counter to federal self-referral bans and anti-kickback laws that are designed to prevent financial considerations from warping physicians' clinical decisions. The Stark law prohibits a physician from referring patients for services in which the doctor has a financial interest. The federal anti-kickback statute bars hospitals from paying doctors for referrals. Together, these rules are intended to remove financial incentives that can lead doctors to order up extraneous tests and treatments that increase costs to Medicare and other insurers and expose patients to unnecessary risks.
Wheeling Hospital is contesting the lawsuits. It said in a countersuit against the whistleblower that its generous salaries were not kickbacks but the only way it could provide specialized care to local residents who otherwise would have to travel to other cities for services such as labor and delivery that are best provided near home.
The hospital and its specialists declined requests for interviews. In a statement, Gregg Warren, a hospital spokesman, wrote, "We are confident that, if this case goes to a trial, there will be no evidence of wrongdoing — only proof that Wheeling Hospital offers the Northern Panhandle Community access to superior care, world class physicians and services."
Elsewhere, whistleblowers and investigators have alleged that other hospitals, in their quests to fill beds and expand, disguise these arrangements by overpaying doctors or offering other financial incentives such as free office space. More brazenly, others set doctor salaries based on the business they generate, federal lawsuits have asserted.
"If we're going to solve the healthcare pricing problem, these kinds of practices are going to have to go away," said Dr. Vikas Saini, president of the Lown Institute, a Massachusetts nonprofit that advocates for affordable care.
'It's Almost A Game'
Hospitals live and die by physician referrals. Doctors generate business each time they order a hospital procedure or test, decide that a patient needs to be admitted overnight or send patients to see a specialist at the hospital. An internal medicine doctor generates $2.7 million in average revenues — 10 times his salary — for the hospital with which he is affiliated, while an average cardiovascular surgeon generates $3.7 million in hospital revenues, nearly nine times her salary, according to a survey released this year by Merritt Hawkins, a physician recruiting firm.
Last August, William Beaumont Hospital, part of Michigan's largest health system and located outside Detroit, paid $85 million to settle government allegations that it gave physicians free or discounted offices and subsidized the cost of assistants in exchange for patient referrals.
A month later in Montana, Kalispell Regional Healthcare System paid $24 million to resolve a lawsuit alleging that it overcompensated 63 specialists in exchange for referrals, paying some as full-time employees when they worked far less. Both nonprofit hospital systems did not admit wrongdoing in their settlements but signed corporate integrity agreements with the federal government requiring strict oversight.
"It's almost a game of 'We're going to stretch the limits and see if we get caught, and if we get caught we won't be prosecuted and we'll pay a settlement,'" said Tom Ealey, a professor of business administration at Alma College in Michigan who studies healthcare fraud.
Dubious payment arrangements are a byproduct of a major shift in the hospital industry. Hospitals have gone on buying sprees of physician practices and added doctors directly to their payrolls. As of January 2018, hospitals employed 44% of physicians and owned 31% of practices, according to a report the consulting group Avalere prepared for the Physician Advocacy Institute, a group led by state medical association executives. Many of those acquisitions occurred this decade: In July 2012, hospitals employed 26% of doctors and owned 14% of physician practices.
"If you acquire some key physician practices, it really shifts their referrals to the mother ship," said Martin Gaynor, a health policy professor at Carnegie Mellon University in Pittsburgh. Nonprofit hospitals are just as assertive as profit-oriented companies in seeking to expand their reach. "Any firm — it doesn't matter what the firm is — once they get dominant market power, they don't want to give it up," he said.
But these hires and acquisitions have increased opportunities for hospitals to collide with federal laws mandating that hospitals pay doctors fair market value for their services without regard to how much additional business they bring through referrals.
"The law is very broad, and the exceptions are very narrow," said Kate Stern, an Atlanta lawyer who represents hospitals.
'A Man We Need to Keep Happy'
Lavish salaries for physicians with high potentials for referrals was the key to the business plan to turn Wheeling Hospital, a 247-bed facility near the Ohio River, into a profit machine, according to a lawsuit brought by Louis Longo, a former executive vice president at the hospital, and a companion suit from the U.S. Department of Justice.
Between 1998 and 2005, Wheeling Hospital lost $55 million, prompting the local Catholic diocese to hire a private management company from Pittsburgh, according to the suits. In 2007, the company's managing director, Ronald Violi, a former children's hospital executive, took over as Wheeling's chief executive officer.
The hospital remained church-owned, but Violi adopted an aggressively market-oriented approach. He began hiring physicians — both as employees and independent contractors — "to capture for the hospital those physicians' referrals and the resulting revenues, thereby increasing Wheeling Hospital's market share," the government alleged. Along with greater market share came the ability to bargain for higher payments from insurers, according to Longo's suit.
The government complaint said at least 36 physicians had employment contracts tied to the business they brought to the hospital. Hospital executives closely tracked how much each doctor earned for the hospital, and executives catered to those whose referrals were most lucrative.
In 2008, the hospital's chief financial officer wrote in an internal memorandum that cardiovascular surgeon Dr. Ahmad Rahbar "is a man we need to keep happy" because the previous year "he generated over $11 million in revenues for us," according to the government's lawsuit.
Dr. Chandra Swamy, an obstetrician-gynecologist the hospital hired in 2009, was another physician whose referrals Wheeling coveted. By 2012, Wheeling was paying her $1.2 million, four times the national median for her peers, according to Longo's suit.
An internal memorandum by the hospitals' chief operating officer quoted in Longo's lawsuit said that the labor and delivery practice where Swamy worked was the biggest money loser among the specialty divisions and that her salary made it "almost impossible for this practice to show a bottom line profit." But the memo went on to conclude that Wheeling should "continue to absorb the practice loss" because it "would not want to endanger the significant downstream revenue that she produces" for the hospital: nearly $4.6 million a year, according to the lawsuit.
In some cases it was the specialists who demanded lopsided pay packages. When Wheeling, eager to get a piece of the booming field of pain management, decided to recruit Tune, the anesthesiologist responded that he wanted an "alternative/undefined model" of compensation that could earn him $1 million a year, according to Longo's lawsuit.
Instead of making Tune an employee, Longo alleges, Wheeling leased clinic space to a company created by Tune and paid him $3,000 a day — more than $700,000 a year. In its initial contract, Wheeling also let Tune keep 70% of his practice's net income, according to the government's complaint.
Two years later, when the hospital's chief lawyer raised legal concerns, Wheeling revised the contract, dropping the profit-sharing provision but boosting Tune's daily stipend to $6,100. The government complaint said this was designed to make up for the lost incentives and thus remained illegally based on how much business Tune generated for Wheeling. Indeed, Tune and his clinic earned roughly the same amount of money as they had received before the new compensation package, the complaint indicated.
Longo said his resistance to such deals rankled both Violi and physicians. He was fired in 2015 because, he alleged, of his objections to various contracts the hospital struck with physicians. The hospital countersued in March, saying Longo had breached his fiduciary duties because he never reported any financial irregularities when he worked there. Wheeling said that after Longo was fired, he threatened to file his lawsuit unless he received a settlement. Longo has asked that the case be dismissed and said in court papers he told Violi about his concerns on "multiple occasions."
As a whistleblower, Longo is entitled to receive a portion of any money the government collects in its complaint. Longo's lawyer said he would not comment for this story.
In financial terms, Wheeling's tactics succeeded. According to the government's suit, over the first five years under Violi, Wheeling earned profits of nearly $90 million. Violi's management firm, R&V Associates, also prospered: Wheeling more than doubled the firm's annual compensation from $1.5 million in 2007 to $3.5 million in 2018. Violi and his lawyer did not respond to requests for comment.
"The hospital has benefited tremendously from Ron's keen business acumen," Monsignor Kevin Quirk, the hospital board chairman, said last week in announcing Violi's retirement.
Wheeling's quality of care has not excelled commensurately, however,according to Hospital Compare, Medicare's consumer website. Patients with heart failure or pneumonia are more likely to die than at most hospitals. In April, Medicare awarded Wheeling Hospital its lowest rating, one star, for overall quality.
Society gives short shrift to older age. This distinct phase of life doesn't get the same attention that's devoted to childhood. And the special characteristics of people in their 60s, 70s, 80s and beyond are poorly understood.
Medicine reflects this narrow-mindedness. In medical school, physicians learn that people in the prime of life are "normal" and scant time is spent studying aging. In practice, doctors too often fail to appreciate older adults' unique needs or to tailor treatments appropriately.
Imagine a better way. Older adults would be seen as "different than," not "less than." The phases of later life would be mapped and expertise in aging would be valued, not discounted.
With the growth of the elder population, it's time for this to happen, argues Dr. Louise Aronson, a geriatrician and professor of medicine at the University of California-San Francisco, in her new book, "Elderhood."
It's an in-depth, unusually frank exploration of biases that distort society's view of old age and that shape dysfunctional health policies and medical practices.
In an interview, edited for clarity and length, Aronson elaborated on these themes.
Q: How do you define "elderhood"?
Elderhood is the third major phase of life, which follows childhood and adulthood and lasts for 20 to 40 years, depending on how long we live.
Medicine pretends that this part of life isn't really different from young adulthood or middle age. But it is. And that needs a lot more recognition than it currently gets.
Q: Does elderhood have distinct stages?
It's not like the stages of child development—being a baby, a toddler, school-age, a teenager—which occur in a predictable sequence at about the same age for almost everybody.
People age differently—in different ways and at different rates. Sometimes people skip stages. Or they move from an earlier stage to a later stage but then move back again.
Let's say someone in their 70s with cancer gets really aggressive treatment for a year. Before, this person was vital and robust. Now, he's gaunt and frail. But say the treatment works and this man starts eating healthily, exercising and getting lots of help from a supportive social network. In another year, he may feel and look much better, as if time had rolled backwards.
Q: What might the stages of elderhood look like for a healthy older person?
In their 60s and 70s, people's joints may start to give them trouble. Their skin changes. Their hearing and eyesight deteriorate. They begin to lose muscle mass. Your brain still works, but your processing speed is slower.
In your 80s and above, you start to develop more stiffness. You're more likely to fall or have trouble with continence or sleeping or cognition—the so-called geriatric syndromes. You begin to change how you do what you do to compensate.
Because bodies alter with aging, your response to treatment changes. Take a common disease like diabetes. The risks of tight blood sugar control become higher and the benefits become lower as people move into this "old old" stage. But many doctors aren't aware of the evidence or don't follow it.
Q: You've launched an elderhood clinic at UCSF. What do you do there?
I see anyone over age 60 in every stage of health. Last week, my youngest patient was 62 and my oldest was 102.
I've been focusing on what I call the five P's. First, the whole person—not the disease—is my foremost concern.
Prevention comes next. Evidence shows that you can increase the strength and decrease the frailty of people through age 100. The more unfit you are, the greater the benefits from even a small amount of exercise. And yet, doctors don't routinely prescribe exercise. I do that.
It's really clear that purpose, the third P, makes a huge difference in health and wellness. So, I ask people, "What are your goals and values? What makes you happy? What is it you are doing that you like best or you wish you were doing that you're not doing anymore?" And then I try to help them make that happen.
Many people haven't established priorities, the fourth P. Recently, I saw a man in his 70s who's had HIV/AIDS for a long time and who assumed he would die decades ago. He had never planned for growing older or done advance care planning. It terrified him. But now he's thinking about what it means to be an old man and what his priorities are, something he's finally willing to let me help him with.
Perspective is the fifth P. When I work on this with people, I ask, "Let's figure out a way for you to keep doing the things that are important to you. Do you need new skills? Do you need to change your environment? Do you need to do a bit of both?"
Perspective is about how people see themselves in older age. Are you willing to adapt and compensate for some of the ways you've changed? This isn't easy by any means, but I think most people can get there if we give them the right support.
Q: You're very forthright in the book about ageism in medicine. How common is that?
Do you know the famous anecdote about the 97-year-old man with the painful left knee? He goes to a doctor who takes a history and does an exam. There's no sign of trauma, and the doctor says, "Hey, the knee is 97 years old. What do you expect?" And the patient says, "But my right knee is 97 and it doesn't hurt a bit."
That's ageism: dismissing an older person's concerns simply because the person is old. It happens all the time.
On the research side, traditionally, older adults have been excluded from clinical trials, although that's changing. In medical education, only a tiny part of the curriculum is devoted to older adults, although in hospitals and outpatient clinics they account for a very significant share of patients.
The consequence is that most physicians have little or no specific training in the anatomy, physiology, pharmacology and special conditions and circumstances of old age—though we know that old people are the ones most likely to be harmed by hospital care and medications.
Q: What does ageism look like on the ground?
Recently, a distressed geriatrician colleague told me a story about grand rounds at a major medical center where the case of a very complex older patient brought in from a nursing home was presented. [Grand rounds are meetings where doctors discuss interesting or difficult cases.]
When it was time for comments, one of the leaders of the medical service stood up and said, "I have a solution to this case. We just need to have nursing homes be 100 miles away from our hospitals." And the crowd laughed.
Basically, he was saying: We don't want to see old people; they're a waste of our time and money. If someone had said this about women or people of color or LGBTQ people, there would have been outrage. In this case, there was none. It makes you want to cry.
Q: What can people do if they encounter this from a doctor?
If you put someone on the defensive, you won't get anywhere.
You have to say in the gentlest, friendliest way possible, "I picked you for my physician because I know you're a wonderful doctor. But I have to admit, I'm pretty disappointed by what you just said, because it felt to me that you were discounting me. I'd really like a different approach."
Doctors are human beings, and we live in a super ageist society. They may have unconscious biases, but they may not be malicious. So, give them some time to think about what you said. If after some time they don't respond, you should definitely change doctors.
Q: Do you see signs of positive change?
Absolutely. There's a much larger social conversation around aging than there was five years ago. And that is making its way to the health system.
Surgeons are thinking more and more about evaluating and preparing older adults before surgery and the different kind of care they need after. Anesthesiologists are thinking more about delirium, which has short-term and long-term impact on older adults' brains. And neurologists are thinking more about the experience of illness as well as the pathophysiology and imaging of it.
Then you have the age-friendly health system movement, which is unquestionably a step in the right direction. And a whole host of startups that could make various types of care more convenient and that could, if they succeed, end up benefiting older people.