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KFF Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Trump Administration Salutes Parade of Generic Drug Approvals, but Hundreds Aren't for Sale

KFF Health News, February 7, 2019

The FDA has approved more than 1,600 generic drug applications since January 2017 — about a third more than it did in the last two years of the Obama administration. But more than 700, or about 43%, of those generics still weren't on the market as of early January.

This article was published February 7, 2019, by Kaiser Health News.

By Sydney Lupkin and Jay Hancock

The Trump administration has been trumpeting a huge increase in FDA generic drug approvals the past two years, the result of its actions to streamline a cumbersome process and combat anti-competitive practices. But nearly half of those newly approved drugs aren’t being sold in the United States, Kaiser Health News has found, meaning that many patients are deriving little practical benefit from the administration’s efforts.

The administration’s aggressive push to approve more generics is designed to spur more competition with expensive brand-name drugs, and drive prices lower, President Donald Trump noted at a White House event last month. The Food and Drug Administration has approved more than 1,600 generic drug applications since January 2017 — about a third more than it did in the last two years of the Obama administration.

But more than 700, or about 43%, of those generics still weren't on the market as of early January, a KHN data analysis of FDA and drug list price records shows. Even more noteworthy: 36% of generics that would be the first to compete against a branded drug are not yet for sale. That means thousands or even millions of patients have no option beyond buying branded drugs that can cost thousands of dollars per month.

"That’s shockingly high," said former congressman Henry Waxman, who co-sponsored the 1984 law that paved the way for the generic approval process as we know it today. He said he'd like to know more, but suspects anti-competitive behavior is at least partly to blame and that revisions to the so-called Hatch-Waxman Act might be needed.

The approved generics that haven't made it to American medicine cabinets include generic versions of expensive medicines like the blood thinner Brilinta and HIV medication Truvada. They also include six different generic versions of Nitropress, a heart failure drug, whose price spiked 310% in 2015.

Experts say a variety of factors are to blame. Generics sellers have fought for years against patent litigation and other delay tactics that protect brand-name drugs from competition. In recent years, vast industry consolidation has reduced the ranks of companies willing to purchase and distribute generics. And, in some cases, makers of generics obtain approvals and ultimately make a business decision to sit on them.

"It's a real problem because we're not getting all the expected competition," FDA Commissioner Scott Gottlieb said in an interview, adding that it will be difficult to solve because it has so many causes. It takes five generics on the market to drive prices down to 33% of the original brand-name price, according to an FDA analysis.

Without generics to lower drug costs, branded manufacturers can continue to increase their prices, at a rate of roughly 10% a year, said Scott Knoer, chief pharmacy officer at the Cleveland Clinic. "It makes healthcare costs go up across the board."

Even if hospital patients don't directly see high drug prices in their bills, the higher costs get passed to insurers, who pass them on as higher premiums, Knoer said. They also get passed to taxpayers, who pay for drugs covered by Medicare and Medicaid.

Consolidation on multiple tiers of the drug supply chain have changed the face of the generic drug market, warping supply and demand.

In some cases, key pharmaceutical ingredients are unavailable or a manufacturer doesn't have the capacity to launch a product because it's having difficulty meeting demand for existing products.

Manufacturing consolidation has dramatically reduced the production of injectable drugs, which are typically administered in a doctor's office. This may be why 157 injectable generics that were approved in the past two years haven't been brought to market.

Erin Fox, a pharmacist at the University of Utah who tracks drug shortages, said the KHN analysis of stalled generics "highlights that companies often have a lot of products 'on the books' but aren't really making them." A few generics on the list — like dextrose 10% injection, to treat patients with low blood sugar — would have been helpful to combat shortages the past few years. "This comes up with shortages a lot — it looks like there are more suppliers than there really are," Fox said.

A lot can change between the time a drugmaker files a generic application with the FDA and the time it's approved.

Some drugmakers that applied for generic approval years ago switched their attention to more profitable products. Novartis, for instance, recently sold a generics division run by Sandoz so Sandoz could focus on other drugs, including biosimilars, which compete with expensive biologic drugs made from living organisms.

"Some of these [generic] drug applications have been sitting six, seven, eight years," said Robert Pollock, a former acting deputy director of the FDA's Office of Generic Drugs who now works for Lachman Consultants. By the time it's approved, a generic can fall out of favor because patients taking the branded version reported new side effects, or because a more effective branded drug was approved.

For some generic manufacturers, there's money to be made by waiting. Brand-name drugmakers will pay them to keep their products off the market as part of a tactic sometimes called "pay for delay." The Federal Trade Commission estimates that such deals cost consumers and taxpayers $3.5 billion a year.

The number of these potentially anti-competitive settlements decreased from fiscal 2014 to fiscal 2015, according to the latest FTC report. Still, Gottlieb said he hopes to crack down on such tactics. The first generic to take on a branded drug is granted 180 days of exclusivity before the second and third generics can be approved, giving those products a clear advantage.

"We don't like that companies are able to just park [a generic for] 180 days while they cut a deal not to come to market," Gottlieb said, adding that with help from Congress he hopes to force companies to forfeit exclusivity if they don't launch on time.

In some cases, Gottlieb said, generic drugmakers wait until they've stockpiled a number of newly approved generics and have landed a contract with a purchaser before bringing their medicines to market.

These bundled contracts are secretive, so not much is known about them, but it means companies are filing generic applications just for the option of introducing generics, said health care economist Rena Conti, an associate professor at Boston University. They'll wait until the most strategic time to launch, which could be after the competition shakes out, leaving them as "the last man standing," Conti said. Then they can launch and hike the price.

To be sure, the FDA under Gottlieb's leadership has taken steps to increase generic competition, from shaming brand-name drugmakers for blocking generics to publishing documents to help manufacturers win approval more easily. But approval doesn't necessarily spur competition.

"We used to say it was all about getting in — once you got approval from the FDA, then you could go to market," said Chip Davis, CEO of the Association for Accessible Medicines, the trade group for makers of generic drugs. The biggest challenges his members face is that there aren't enough companies purchasing drugs, Davis said. Consolidation has led to three large buying groups covering 90 percent of the market, according to a Drug Channels Institute report. So, if you’re the fourth or fifth generic, you may have no one left to sell to.

Yet another barrier relates to how drug middlemen select the drugs they'll cover under industry formularies, which determine what products insurance plans will cover. In some cases, middlemen known as "pharmacy benefit managers" have made it clear they don’t have room on their formularies for another generic. Or they do, but they give branded drugs preferential treatment with lower copays, hurting the generic's market share.

Barriers to entry are lower under Gottlieb's FDA than they’ve been in years past, Conti said, and regulations can help foster competition. But, she said, "they can only do so much."

Methodology

To identify approved drugs that have not reached the market, KHN used the FDA’s Orange Book database — as of Jan. 2 — to identify drug applications approved in 2017 or 2018. We then searched the FDA’s online National Drug Code directory for billing codes for the drugs associated with each application as of the same date. To account for a possible lag, we supplemented this list with a more complete billing code directory that we obtained via a Freedom of Information Act request. It includes codes with expected future launch dates that don’t appear in the online version.

According to experts, a billing code doesn"t necessarily mean a drug is on the market. However, every drug on the market needs a list price for reimbursement. We provided a list of application numbers and billing codes to information technology firm Connecture, which then told us whether each one was active, inactive or had no list price as of Jan. 17.

If an application had at least one billing code with a list price attached, we counted it as on the market, even if other billing codes did not have list prices.

Sometimes, a single generic application can have multiple approval dates. If one of these approval dates occurred in the past two years, we included it in our analysis.

To determine whether a drug was a first generic, KHN used the FDA’s 2017 and 2018 lists of first generics as of Jan 2.

Sydney Lupkin: slupkin@kff.org, @slupkin

Jay Hancock: jhancock@kff.org, @JayHancock1

Trump Highlights Health Agenda with Vow to Lower 'Unfair' Drug Prices

KFF Health News, February 6, 2019

The president laid out a series of health-related goals, including some that even Democrats indicated could be areas of bipartisan negotiation or compromise.

This article was published February 6, 2019, by Kaiser Health News.

By Julie Rovner

It was not the centerpiece, but health was a persistent theme in President Donald Trump's State of the Union address at the Capitol on Tuesday night.

Although the administration has focused more on issues of trade, taxes and immigration, the president laid out a series of health-related goals, including some that even Democrats indicated could be areas of bipartisan negotiation or compromise. Trump vowed to take on prescription drug prices, pursue an end to the HIV epidemic and boost funding for childhood cancers.

He also took a victory lap for goals promoted by his administration that had been accomplished. "We eliminated the very unpopular Obamacare individual mandate penalty," he said, referring to the requirement in the Affordable Care Act that most people must have health insurance or pay a fine. It was eliminated as part of the 2017 GOP tax bill, despite backlash from critics that it could undercut Obamacare, after many failed attempts by Republicans to repeal the law.

And Trump noted congressional passage of a "right to try" bill that was supposed to make it easier for terminally ill patients to gain access to experimental medications, but so far few patients have been able to make the law work for them.

The most likely ground for bipartisanship will be the issue of drug prices, where Democrats are as eager as the president to do something to rein in prices that are spiraling upward.

"It is unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place. This is wrong, this is unfair, and together we will stop it. We will stop it fast," he said. "I am asking the Congress to pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients."

Democrats are cautiously optimistic on the drug price front. "I really am hopeful about making strides on prescription drug legislation this year on a bipartisan basis," Wendell Primus, top health aide to House Speaker Nancy Pelosi, said at a conference for health policy researchers hours before the speech.

But not all of Trump’s claims Tuesday about his efforts on drug pricing stand up to close scrutiny. He proclaimed that "in 2018 drug prices experienced their single-largest decline in 46 years." The drug-price portion of the consumer price index (CPI) declined slightly last year for the first time since 1972, but prices for many individual drugs are still rising sharply.

Factors beyond the administration's actions appear to have played the biggest role in the overall slowdown. Drug price increases have slowed largely because patents have expired on expensive, blockbuster drugs and several years have passed since the introduction of expensive medicines to treat hepatitis C, according to independent analysts.

But even as consumer drug prices have moderated, drug spending per hospital admission soared 19% from 2015 to 2017, a study sponsored by hospital trade groups found last month. That includes anesthesia drugs, chemotherapy infusions and other medicines that are not counted in the CPI.

Some well-placed Republicans praised the drug price effort. "I expect deep-pocketed interests to oppose anything and everything to protect the status quo," said Sen. Chuck Grassley (R-Iowa), chairman of the powerful Senate Finance Committee. "But the moment is ripe for action and Americans expect us to work together to get the job done."

News organizations including Kaiser Health News have reported on dozens of cases of surprise hospital bills, unaffordable costs for life-sustaining drugs and other health-expense shocks for patients. Shereese Hickson, whose experience with a $123,000 bill for multiple sclerosis drugs was covered by KHN and National Public Radio, was watching the speech.

"I'm glad he mentioned it," she said of Trump's promise to bring transparency and competition to pharmaceutical prices. "But I would like to see if it really will come true. If you do that — that's going against the drug companies. They'll be losing money and they're not going to let that happen."

Paul Davis — a retired doctor from Findlay, Ohio, whose family's experience with a $17,850 bill for a simple urine test was detailed in a KHN-NPR "Bill of the Month" feature last year and who met with Trump about surprise billing last month — said he was disappointed Trump did not go into further detail about his health care proposals.

"He didn't say anything," he said.

Davis said he would have liked to have heard more about the administration's recently announced plan to eliminate drug rebates negotiated by middlemen in the Medicare drug program, as well as the recently implemented policy requiring hospitals to list their prices online.

"If he wanted to use the podium to talk about the wonderful things that he's done, that's one of the things he's gotten accomplished," Davis said.

In their official responses to the speech, Democrats were more combative. "In this great nation, Americans are skipping blood pressure pills, forced to choose between buying medicine or paying rent," said Stacey Abrams, former Georgia House minority leader and a rising star in the national Democratic Party. "Maternal mortality rates show that mothers, especially black mothers, risk death to give birth. And in 14 states, including my home state where a majority want it, our leaders refuse to expand Medicaid, which could save rural hospitals, economies and lives."

California Attorney General Xavier Becerra, who gave the Spanish-language Democratic response, reminded viewers that while the Trump administration is seeking to have the Affordable Care Act overturned in court, Democrats would provide "medical care for your family that no politician can take away from you."

In another outreach to Democrats, Trump vowed that his budget "will ask Democrats and Republicans to make the needed commitment to eliminate the HIV epidemic in the United States within 10 years. Together, we will defeat AIDS in America," he said.

Groups that have been fighting HIV praised the promise.

"While we might have policy differences with the president and his administration, this initiative, if properly implemented and resourced, can go down in history as one of the most significant achievements of his presidency," said Michael Ruppal, executive director of The AIDS Institute.

Trump also promised that his budget, which has been delayed by the recent government shutdown, will seek new funding to expand research into cures and treatments for childhood cancer.

He said he will seek "$500 million over the next 10 years to fund this critical lifesaving research." The National Institutes of Health has long been a bipartisan favorite in Congress, although Trump in his first budget did seek cuts in NIH funding.

The one area in which bipartisanship will clearly not prevail is that of abortion. Trump reiterated a promise he made to anti-abortion groups as a candidate in 2016 and pushed for a federal bill to ban abortions after 20 weeks of pregnancy.

"Let us reaffirm a fundamental truth: All children — born and unborn — are made in the holy image of God," he said.

Senate Republicans voted on such a bill in 2018; it failed to advance by a large margin. The bill still lacks the votes in the Senate, and the House now has a majority that supports abortion rights.

Abortion opponents praised the president’s comments. "Once again, President Trump has proved he is our nation's most pro-life president ever and he is keeping his promise to the voters who fueled his victory," said Marjorie Dannenfelser of the Susan B. Anthony List.

Abortion-rights supporters, meanwhile, chastised Trump’s comments.

"Shame on the president for using the State of the Union to vilify people who have abortions and the providers who care for them," said Megan Donovan of the Guttmacher Institute. "Make no mistake: This is part of a larger agenda to eliminate access to abortion altogether."

Staff writers Jay Hancock, Emmarie Huetteman and Ana B. Ibarra contributed to this report.

Julie Rovner: jrovner@kff.org, @jrovner

For California Attorney General Xavier Becerra, Resistance Is Personal

KFF Health News, February 4, 2019

Becerra will take the national stage Tuesday when he gives the Spanish-language rebuttal to the president's State of the Union address. It will be far from his first time challenging President Trump's agenda.

This article was published February 4, 2019, by Kaiser Health News.

By Samantha Young, Kaiser Health News

When President Donald Trump demands a border wall or threatens to deport young unauthorized immigrants, one of the loudest opposition voices comes from the son of Mexican immigrants—who also happens to be California's top lawyer.

Democrat Xavier Becerra, the state's first Latino attorney general, is not only one of Trump's biggest critics, he is an unrelenting adversary in court, striking at Republican efforts to overturn federal rules not just on immigration, but on health care, birth control, climate change and more.

On Tuesday, Becerra, 61, will take the national stage when he gives the Spanish-language rebuttal to the president's State of the Union address. He has challenged the Trump agenda before.

Becerra has taken the Trump administration to court 45 times since former Gov. Jerry Brown appointed him to the job in 2017. In November, voters overwhelmingly gave him a four-year term, validating his decision to leave Congress after 24 years.

Becerra, whose wife is a doctor, is leading a coalition of 20 states and the District of Columbia in defending the Affordable Care Act against a Texas lawsuit that could determine the fate of the law—and with it, health coverage for millions of Americans. And he won a nationwide court injunction last year that blocked the Trump administration’s decision to end the Deferred Action for Childhood Arrivals (DACA) program, which allows qualified young people who were brought into the U.S. illegally as children to obtain temporary work permits.

When news reports last month revealed that Trump was considering diverting emergency disaster relief funds from California, Florida and Texas during the partial federal government shutdown, Becerra condemned the president on Twitter for poaching funds for a "reckless & lawless" border wall.

Related: California AG Blocks Sale of 2 Santa Clara Hospitals

The fights are ones that Becerra describes as personal. He talked to California Healthline’s Samantha Young about his role—and how his upbringing influences his legal decisions.

The following interview has been edited for length and clarity.

Q: You were a veteran member of Congress in a leadership role. Why did you take this job?

November 2016 hits. We have the election. All the things that I cared about were going to be placed in jeopardy by this new president.

I found myself thinking I probably could make a bigger difference as the attorney general for the entire state of California, defending everything I fought to erect, than as a minority member in the House of Representatives trying to make my point, but always losing.

I made a calculation. I think I made the right choice.

Q: You have sued the Trump administration 45 times on education, immigration, health care, birth control access, climate change and more. What's the one case you really wanted to win?

I'll give you two.

First, the Affordable Care Act, knowing how much it has been a game changer for families. I would never have believed that I’d be leading the effort to protect the entire Affordable Care Act as an attorney general for one of 50 states. But here I am.

The second one is the DACA litigation, because as the son of immigrants, I watched my parents struggle and saw the things they had to live through. I believe these DACA recipients are going to be some of the greatest leaders America has and it's because they had to go through so much like my parents did. So, it's very personal.

Q: Do you remember your parents' economic struggles as a child?

I thought I was middle class growing up as a kid. It really wasn't until I was driving with my mom to start my first day at Stanford University, driving through Palo Alto, that I realized I'm not middle class.

We always had decent food to eat. I never got a pair of Converse. I never had a pair of Levi's jeans. Never had that kind of stuff, but I always had clothes. It didn’t dawn on me that we were much different than other folks.

Q: How does your upbringing influence your decisions as attorney general?

Everything I do is informed by what I grew up with. I defend immigrants with a passion because I saw immigrants every day of my life. And I know how hard they work. I never saw a day where my dad didn't work.

My mom came here when she was 18 from Guadalajara, when she married my dad. Didn't know English. Learned it. She could always find a job, and when she learned English it became easier. But she could never go very high because she never went to college.

So, when someone wants to knock an immigrant, you're knocking my dad and my mom.

Q: You believe everyone should have access to health care. Was there ever a period in your life when you didn't have health insurance?

I don't ever recall a time when I didn't. That's why I'm such a big defender of unions. My dad was a construction worker. My dad got to the sixth grade. As difficult as it is for someone with a sixth-grade education to get a decent job, and while being a manual laborer and working construction doesn't make you a millionaire, if you work for a union it gets you basic benefits.

I knew what it meant to have health insurance, especially on the day my mom ended up having a miscarriage. She was hemorrhaging at home and she had to be rushed to the hospital. There was no hesitation.

We knew we could go to the doctor—and everybody should know that. For me, health care is a right. I've been a single-payer advocate all my life.

Q: Why do you think it's important to build coalitions with other states when challenging the Trump administration?

Lifting something by yourself is very difficult. When you get a team to do it, it just clicks so much easier. Maybe it's because I went through Congress more years in the minority than the majority, where you realize what it takes to actually cobble together a coalition to get something done. Or, maybe it's just that when you've been in a minority all your life, the son of immigrants with very little, you know it takes a team effort.

I got through Stanford knowing my family didn't have a lot of money, so I had to work, take out student loans and receive help from the government. It was a combination of a lot of things.

Q: What's your response to critics who say state attorneys general are "militarizing" their office to overturn policies your party can't block in Congress?

Which of the cases should we not have filed? The one to defend the Affordable Care Act, or the one to prevent women from losing access to birth control, or is it the one to allow DACA Dreamers to be deported, or is it the one to make sure that we are defending against a crazy border wall, or is it the one that should allow predatory for-profit colleges to continue to avoid having to provide relief to students who were defrauded?

We're not doing this because we're trying to attack the federal government or because we've got it out for this particular president. How would we explain to the people who would have been unprotected why we just watched, why we just spectated?

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Ads for Short-Term Plans Lacking ACA Protections Swamped Consumers' Online Searches

KFF Health News, January 31, 2019

Researchers looked at marketing of short-term plans, which don’t have to meet most ACA provisions. Regardless of the search term used, companies promoting or selling only these kinds of plans dominated the results.

This article first appeared January 31, 2019 on Kaiser Health News.

By Steven Findlay

Consumers shopping for insurance online last fall — using search terms such as "Obamacare plans," "ACA enroll" and "cheap health insurance" — were most often directed to websites that promote individual health plans that didn't meet consumer protections of the Affordable Care Act, according to a new study.

They also failed to get adequate information about those plans' limitations, according to the analysis by researchers at Georgetown University's Center on Health Insurance Reforms.

The study, provided to Kaiser Health News ahead of its publication online, probed online marketing practices in eight states.

"It was disturbing, but not unexpected, to find such a high proportion of misleading ads and come-ons," said Sabrina Corlette, the lead author. "That raises the risk that consumers could be duped into buying health insurance that they think offers comprehensive and secure coverage, but does not."

The study focused primarily on the marketing of short-term plans, which don’t have to meet most ACA provisions, such as the requirement to cover preexisting conditions. The researchers found that regardless of the search term used, companies promoting or selling only these kinds of plans dominated the results.

Insurance regulators from each of the states told Corlette's team that tracking the marketing and sales of short-term plans is challenging, as is educating consumers about the risks of limited coverage.

Michael Conway, Colorado's interim insurance commissioner, told Kaiser Health News in an interview that he has a "high level of concern" that the marketing tactics the study found could have drawn unsuspecting consumers into selections that do not meet their needs.

"We are on alert for complaints," Conway said. "If we have to strengthen our regulations on marketing, we will."

Eric Cioppa, Maine's insurance superintendent, said that his office has no evidence that consumers unknowingly purchased short-term plans based on misleading online marketing.

"We’ll respond accordingly and aggressively if we find that took place," Cioppa said.

But Corlette said the findings provide early evidence that after regulatory changes by the Trump administration, some insurers are aggressively marketing short-term plans as a replacement for traditional health insurance, without fully informing consumers of the limits of the skimpier coverage.

That could warrant stronger federal and state oversight, she said.

The study, funded by the Robert Wood Johnson Foundation, looked at online marketing in Colorado, Florida, Idaho, Maine, Minnesota, Missouri, Texas and Virginia. Those states were selected to reflect diverse geography and regulatory approaches, according to the researchers. Of the eight, Colorado and Minnesota require short-term plans to adhere to a shorter contract duration than required by federal law.

Changes In Short-Term Plan Rules

The ACA bars insurers from denying coverage to people who have health problems or charging them higher premiums. The law also mandates a minimum set of health benefits and requires plans to cap enrollees' out-of-pocket expenses.

By comparison, short-term plans can deny coverage to applicants who have a preexisting condition and often exclude or limit coverage of maternity care, mental health treatment and prescription drugs.

As a result, short-term plans cost significantly less — typically about half to a third of an ACA plan if the deductible is the same. They are sold outside the ACA exchanges. And people who buy them don’t qualify for the government’s premium subsidies.

These plans are not new. They predate the ACA and allow people to buy coverage between jobs, for example.

The Obama administration put a 90-day limit on such coverage in 2017 because of concerns that the less-expensive plans would attract younger and healthier people. Losing such customers could undermine the stability of the ACA marketplaces because they would be left with older and sicker enrollees.

Beginning this year, however, the Trump administration lengthened the potential duration of short-term plans to 364 days and allowed customers to renew the plans.

Seema Verma, the administrator of the Centers for Medicare & Medicaid Services that oversees the ACA insurance exchanges, said those changes offer more affordable coverage that can be "a lifeline to people priced out of the ACA market."

"These plans are different, and consumers do need to know what they are purchasing, which is why we now require more robust warnings about the limits of these plans than before," she said. "Fundamentally, we believe in giving consumers more options and leaving it up to them to decide what is right for them and their families."

The study evaluated online ads in the weeks just before and during the latest open enrollment for ACA coverage, which in most states began Nov. 1 and ended Dec. 15. The researchers analyzed 256 search results and 65 websites and interviewed state regulators in all eight states.

They found that Google searches were most often topped by paid "lead-generating" websites. Such sites don't sell insurance but ask shoppers for contact and demographic information. Insurers and brokers can buy that information and contact prospective customers. Or, call centers affiliated with the lead-generating sites phone consumers and direct them to a seller.

The researchers also created a profile of a 29-year-old consumer seeking insurance who was in good health and with an income of $20,000 so she was eligible for premium subsidies for ACA-compliant coverage. They entered this consumer’s information into several lead-generating websites and fielded six phone pitches from brokers selling short-term and other non-ACA plans.

Among their findings:

During ACA open enrollment, only 19% of the searches using the common search terms yielded sites offering solely ACA-compliant plans. Before open enrollment, the return was less than 1%.
Lead-generating sites promoting short-term plans or other non-ACA compliant insurance products were the most common search result in every state, representing more than half of all search results before and during open enrollment.
The six brokers who encouraged the purchase of coverage over the phone provided minimal plan information. Most refused to provide written materials or discontinued the call when asked for such materials.
State officials lack full information about which insurers are marketing short-term plans to their residents, with one official calling it "one of our biggest blind spots." Most said they plan to start monitoring the insurers' practices more closely this year.

'Necessary Niche'

An estimated 600,000 to 750,000 people bought short-term plans in 2017. The Trump administration projected last year that about 200,000 ACA customers would switch to this coverage in 2019 due to its rule change. A second government forecast predicted that the new policy would boost short-term coverage enrollment to about 2 million people by 2022.

Insurers who specialize in short-term plans vigorously defend them.

"This is a small and necessary niche in the [individual insurance] marketplace," said Jeff Smedsrud, CEO of Pivot Health, based in Scottsdale, Ariz., and one of the firms whose website the study analyzed. "If people need temporary coverage, we are there for them. We don't want people who qualify for a government subsidy to buy our short-term plans. They should get coverage under the ACA."

Shaun Greene, head of business operations at AgileHealthInsurance.com, said short-term plans offer a more affordable option to people who don't qualify for a government subsidy under the ACA.

But Matthew Fiedler, a health insurance specialist at the Brookings Institution who was not affiliated with the study, said the longer-duration short-term plans may befuddle some customers. The study, he said, "strongly suggests that some consumers are going to be confused and end up with plans that cover less than they expected."

Congress Wades Into Emotional Debate Over High-Cost Prescription Drugs

KFF Health News, January 30, 2019

In a blow to the pharmaceutical industry, Republicans and Democrats in Congress, and President Donald Trump, appeared to be largely unified in their determination to address skyrocketing drug costs.

This article first appeared January 30, 2019 on Kaiser Health News.

By Emmarie Huetteman and Rachel Bluth

Senators railed against pharmaceutical executives Tuesday for declining to testify before Congress about out-of-control drug prices, as lawmakers on both sides of the U.S. Capitol kicked off investigations sure to rattle one of the nation's most powerful industries.

Sen. Chuck Grassley of Iowa, the Republican chairman of the Senate Committee on Finance, signaled he could compel drugmakers to appear before the committee, saying he was "extremely disappointed" that only two companies have agreed to testify at a later date.

"We will extend the opportunity again in the future, but we will be more insistent the next time," Grassley said.

And in a blow to the pharmaceutical industry, Sen. Ron Wyden of Oregon, the committee's top Democrat, agreed with Grassley, suggesting the parties are largely united in their determination to address skyrocketing drug costs.

"Nobody is going away, and even if it means using our power to compel the drug company CEOs to show up, they will come before this committee," Wyden said.

While Congress has examined rising drug costs before, the issue has benefited from the attention of President Donald Trump, who has vowed to address the problem. The Trump administration has floated a handful of possible solutions, including a proposal to tie the price Medicare pays for some drugs to the prices paid for the same drugs overseas.

Across the Capitol on Tuesday, the House Committee on Oversight and Reform also held the first hearing in its own "sweeping" investigation into drug prices. Rep. Elijah Cummings, the Maryland Democrat who took control of the committee this month, recently wrote to 12 drug companies demanding information about their pricing practices.

Cummings has made it clear that he is interested in working with the Trump administration on drug prices. Cummings met with Trump in 2017, weeks after Trump was sworn in as president, to discuss how the parties could work together. Two weeks ago, Cummings discussed the issue with Health and Human Services Secretary Alex Azar.

Tuesday, one Republican lawmaker close to Trump, Rep. Mark Meadows of North Carolina, said he had spoken with Trump and agreed to pass along a message to Cummings: "On this particular subject, not only is he serious, but he's serious about working in a bipartisan way to lower prescription prices," Meadows said.

Cummings asked Meadows to tell Trump "we are willing, ready and able to work with him to get it done."

Lawmakers heard heart-wrenching testimony Tuesday from two mothers about the impact of rising costs on their insulin-dependent children. Antroinette Worsham described how her daughter, a college student with Type 1 diabetes, began rationing her insulin because she couldn't afford it — and how her son later found her dead in her bed.

Now, Worsham told the House committee, she worries about her younger daughter, who also has diabetes. "I fear the same is going to happen to her," Worsham said.

On the Senate side, Kathy Sego — whose son with Type 1 diabetes was profiled by Kaiser Health News in 2017 — had a message for absent drug companies. "I don't know how any person would be OK with knowing that their medication is priced so high you have to make a decision between life or death," she said. "That should never be a decision a person needs to make."

It remains to be seen how drugmakers might react to mounting political scrutiny.

Both Grassley and Cummings have the power to subpoena witnesses — such as drug company executives — to appear before Congress, though Grassley told reporters afterward that he was not yet prepared to invoke that option.

Grassley said several drug companies had declined to testify publicly, offering a variety of excuses. One company, for instance, argued their testimony would "create a language-barrier problem." Unmoved, Grassley remarked that he "thought we all spoke English."

Wyden expressed his frustration with drug companies by comparing them to a more traditional villain, the tobacco companies.

"Even the Big Tobacco CEOs were willing to come to Congress and testify, and they made a product that kills people," he said. "They all lied to me, but at least they showed up. The drugmakers won’t even do that much."

While lawmakers noted that both hearings were only the first of many, an early consensus emerged that something must be done about drug rebates, which provide discounts to middlemen in the supply chain but often push patients toward pricier brand-name drugs.

Senators also targeted drug discount coupons, which lower the price for patients at the cash register but don't address the larger struggle between manufacturers and insurance companies.

"We know who's winning. It's the people who print the coupons," said Peter Bach, director of the Center for Health Policy and Outcomes at the Memorial Sloan Kettering Cancer Center. "Patients are entirely caught in the middle."

The long political reach of the drug industry was on display Tuesday, though, suggesting it could be an uphill battle to hold pharmaceutical companies accountable. Drugmakers' political action committees give millions of dollars to the campaigns of hundreds of members of Congress.

"he Project on Government Oversight, a nonpartisan watchdog group, noted even some of the experts who testified Tuesday have benefited from drugmaker cash. The Pharmaceutical Research and Manufacturers of America, which lobbies on behalf of drugmakers, has given millions to the advocacy arm of the American Action Forum — a conservative-leaning organization whose president, Douglas Holtz-Eakin, testified before senators.

Bach has also received money from pharmaceutical companies directly, the watchdog group said. Bach said he was paid for giving speeches.

Another potential obstacle: House Republicans on Tuesday showed little interest in cooperating with the investigation, with some arguing that there were bigger fish to fry in the nation’s healthcare system.

Rep. Jim Jordan of Ohio, the House committee's top Republican, opened by enumerating several failings of the Affordable Care Act, noting Democrats are "eager to blame the private sector."

"The problem is not that the free market has failed us," Jordan said. "It's that government interventions in the market have distorted incentives, creating barriers to competition and left things in a mess."

Correction: This story was updated Wednesday afternoon to correct the name of the organization for which Douglas Holtz-Eakin serves as president. It is the American Action Forum, not the American Action Network.

Community Hospitals Link Arms with Prestigious Facilities to Raise Their Profiles

KFF Health News, January 29, 2019

These agreements, which can involve different levels of clinical integration, typically grant community hospitals access to experts and specialized services at the larger hospitals while allowing them to remain independently owned and operated.

This article first appeared January 29, 2019 on Kaiser Health News.

By Sandra G. Boodman

After seven years of a vigorous fight, Jim Hart worried he was running out of options.

Diagnosed with prostate cancer at age 60, Hart had undergone virtually every treatment — surgery, radiation and hormones — to eradicate it. But a blood test showed that his level of prostate-specific antigen, which should have been undetectable, kept rising ominously. And doctors couldn't determine where the residual cancer was lurking.

"I didn't like the sound of that," said Hart, a retired international oil specialist for the federal government. "I wanted it gone," he added, especially after learning that he had inherited the BRCA2 gene, making him vulnerable to other cancers.

So when Andrew Joel, Hart’s longtime urologist at Virginia Hospital Center in Arlington, mentioned the hospital's membership in the Mayo Clinic Care Network and suggested consulting specialists at the Rochester, Minn., hospital for a second opinion, Hart enthusiastically agreed.

A Mayo immunologist told Joel about a new PET scan, not then available in the Washington area, that can detect tiny cancer hot spots. Hart flew to Mayo for the scan, which found cancer cells in one lymph node in his pelvis. He underwent chemotherapy at Virginia Hospital Center and five weeks of radiation at the Mayo Clinic. Since September 2016, there has been no detectable cancer.

"This collaboration was sort of a magic process," Hart said. "I feel very fortunate."

'Benefit By Association'

Hart's experience showcases the promise of a much-touted but little understood collaboration in health care: alliances between community hospitals and some of the nation’s biggest and most respected institutions.

For prospective patients, it can be hard to assess what these relationships actually mean — and whether they matter.

Leah Binder, president and chief executive of the Leapfrog Group, a Washington-based patient safety organization that grades hospitals based on data involving medical errors and best practices, cautions that affiliation with a famous name is not a guarantee of quality.

"Brand names don't always signify the highest quality of care," she said. "And hospitals are really complicated places."

Affiliation agreements are "essentially benefit by association," said Gerard Anderson, a professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. "In some cases it's purely branding and in other cases it's a deep association."

A key question is "how often does the community hospital interact with the flagship hospital? If it's once a week, that's one thing. If it's almost never, that's another,” Anderson said.

Feeling 'Plugged In'

To expand their reach, flagship hospitals including Mayo, the Cleveland Clinic and Houston's MD Anderson Cancer Center have signed affiliation agreements with smaller hospitals around the country. These agreements, which can involve different levels of clinical integration, typically grant community hospitals access to experts and specialized services at the larger hospitals while allowing them to remain independently owned and operated. For community hospitals, a primary goal of the brand-name affiliation is stemming the loss of patients to local competitors.

In return, large hospitals receive new sources of patients for clinical trials and for the highly specialized services that distinguish these "destination medicine" sites. Affiliations also boost their name recognition — all without having to establish a physical presence.

In some cases, large hospital systems opt for a different approach, largely involving acquisition. Johns Hopkins acquired Sibley Memorial and Suburban hospitals in the Washington, D.C., area, along with All Children's Hospital in St. Petersburg, Fla. The latter was re-christened Johns Hopkins All Children's Hospital in 2016.

New York's Memorial Sloan Kettering Cancer Center has embraced a hybrid strategy. It operates a ring of facilities surrounding Manhattan and has forged alliances with three partners in Connecticut, Pennsylvania and Florida.

"Every one of these models is different," said Ben Umansky, managing director for research at the Advisory Board, a Washington-based consulting firm.

Local hospitals, he said, particularly those operating "in the shadows of giants," may be better able to retain patients "by getting a name brand on their door. … There is a sense that they are plugged in." (Virginia Hospital Center, for example, competes with Hopkins, MedStar Washington Hospital Center, which has an alliance with the Cleveland Clinic, and the Northern Virginia-based Inova system.)

Doctors can obtain speedy second opinions for their patients and streamline visits for those with complex or unusual medical needs, processes that can be daunting and difficult without connections.

Dr. Michael Kupferman, senior vice president of the MD Anderson Cancer Network, said it seeks to "elevate the quality of cancer care" by forming partnerships with "high-quality [hospitals] to keep patients at home and provide the imprimatur of MD Anderson."

Virginia Hospital Center's association with Mayo is "not just a branding affiliation, it's a deep clinical affiliation," said Dr. Jeffrey DiLisi, senior vice president and chief medical officer at the Arlington facility.

Despite extensive marketing, many patients seem unaware of the linkage. "We still think a lot about 'How do we communicate this?'" DiLisi said.

Although affiliation agreements differ, many involve payment of an annual fee by smaller hospitals. Officials at Mayo and MD Anderson declined to reveal the amount, as did executives at several affiliates. Contracts with Mayo must be renewed annually, while some with MD Anderson exceed five years.

Acceptance is preceded by site visits and vetting of the community hospitals' staff and operations. Strict guidelines control use of the flagship name.

"It is not the Mayo Clinic," said Dr. David Hayes, medical director of the Mayo Clinic Care Network, which was launched in 2011. "It is a Mayo clinic affiliate."

Of the 250 U.S. hospitals or health systems that have expressed serious interest in joining Mayo’s network, 34 have become members.

For patients considering a hospital that has such an affiliation, Binder advises checking ratings from a variety of sources, among them Leapfrog, Medicare and Consumer Reports, and not just relying on reputation.

"In theory, it can be very helpful," Binder said of such alliances. "The problem is that theory and reality don't always come together in healthcare."

Case in point: Hopkins' All Children’s has been besieged by recent reports of catastrophic surgical injuries and errors and a spike in deaths among pediatric heart patients since Hopkins took over. Hopkins' chief executive has apologized, more than a half-dozen top executives resigned and Hopkins recently hired a former federal prosecutor to conduct a review of what went wrong.

"For me and my family, I always look at the data," Binder said. "Nothing else matters if you're not taken care of in a hospital, or you have the best surgeon in the world and die from an infection."

Cancer During Pregnancy

Bryan Mills, chief executive of Community Health Network, was unhappy with his oncology service. Specialists at the Indianapolis-area hospitals he headed were competing against each other and patients were being ill-served. So Mills cold-called MD Anderson and, in 2012, Community joined its network.

"We needed something we could rally around," Mills said.

"This is really not about a competitive advantage to me, but about providing optimal care," said Mills, whose network competes with three other systems including one run by the University of Indiana, which operates a National Cancer Institute-designated center.

"One hundred percent of the work we do is audited by MD Anderson," Mills said. "We can get second opinions almost instantly."

Mills said he believes that the affiliation, which is prominently displayed on Community’s website, has attracted patients. In 2012, he said, Community treated about 2,000 cancer patients. In 2018, the number was 5,000.

Among them is Kamaljit "Kelly" Kaur. Shortly before Christmas 2015 the Greenwood, Ind., licensed practical nurse was diagnosed with inflammatory breast cancer, a rare and aggressive form of the disease usually discovered at an advanced stage. At the time, Kaur was 35 and five months pregnant with her third child.

Kaur said that her Indiana doctors conferred with MD Anderson oncologists and used "their guidelines to treat me. I felt comforted by that, like it was the right choice for me." Her biggest concern, she said, was the health of her baby.

During the final months of her pregnancy, Kaur received weekly chemotherapy. Her son was born healthy and at full term in February 2016. She then underwent a bilateral mastectomy, followed by more chemo and radiation. Kaur said she has been cancer-free since January 2017, when she finished treatment. The collaboration, she said, "helped me get through this."

Kaur's Indiana oncologist, Dr. Anuj Agarwala, said he thought the MD Anderson involvement was helpful, because it reassured Kaur and him by concurring with his recommendations. He said he presented his treatment plan to specialists in Houston and "they didn't change anything."

Overall, he said, "it really doesn't affect what I do very much. We are following national guidelines and not giving off-the-wall treatment."

Initially, Agarwala said, some Community oncologists bristled at having their charts audited by Houston specialists, a resistance, he said, that has diminished.

The affiliation has strengthened safety measures involving the administration of chemotherapy and has made the informed consent process more rigorous, Agarwala said, to the benefit of patients. "Overall it has been a valuable relationship."

"The population I work with don't have the resources to get care outside of their hometown," he added, "and feel more confident with the input of a world-class institution."

So did Dr. James Ouellette, a cancer surgeon with Premier Health in Dayton, Ohio, which joined the MD Anderson network in 2016.

In November 2018, Ouellette removed a huge and rare malignant tumor from Joanne Dotson’s abdomen during a four-hour surgery. The solitary fibrous tumor was in a dicey location: It had grown so large it was displacing Dotson’s liver and compressing her vena cava, a major vein that carries blood to the heart.

Dotson, 70, said she had never heard of MD Anderson until her doctors mentioned it.

The affiliation, she said, did not affect her choice of hospital or surgeon, in whom she had confidence.

"I wasn't even worried," she said. "His hands are God's hands," she said, referring to Ouellette.

Her surgeon felt differently.

"While I was very glad Mrs. Dotson wasn't worried, I was, with a big surgery like that," Ouellette said. Before the operation, Ouellette said he conferred with an MD Anderson surgeon, radiation oncologist and medical oncologist about how best to treat the grapefruit-size growth. As a result of those discussions, Ouellette said, he altered the initial treatment plan.

Getting A Vibe

Virginia Hospital Center officials say that only a handful of the approximately 170 patients, the vast majority with cancer diagnoses, who annually receive second opinions from Mayo wind up getting treatment there. Most of those who do, DiLisi said, received care unavailable at his hospital.

"The patients [that affiliates] send us are more complex patients," said Mayo's Hayes. "We have a broad and deep bench of specialists."

Even so, it's often doctors who suggest a second opinion, not patients who request one. Joel said he mentions the option to those urology patients from whom he gets "a vibe" that they might be interested.

DiLisi said that the affiliation can save patients time and money.

"We get them as good a second opinion as they would get at Hopkins," DiLisi said, without incurring the costs and additional testing involved. "And they don't have to drive to Baltimore."

Pulling Back Curtain on Hospital Prices Adds New Wrinkle in Cost Control

KFF Health News, January 28, 2019

For the moment, chargemasters aren't useful for the average patient, and they have been criticized for that reason. But don't dismiss them as useless. Think of them as raw material to be mined for billing transparency.

This article first appeared January 28, 2019 on Kaiser Health News.

By Elisabeth Rosenthal

As President Donald Trump was fighting with Congress over the shutdown and funding for a border wall, his administration implemented a new rule that could be a game changer for healthcare.

Starting this month, hospitals must publicly reveal the contents of their master price lists — called "chargemasters" — online. These are the prices that most patients never notice because their insurers negotiate them down or they appear buried as line items on hospital bills. What has long been shrouded in darkness is now being thrown into the light.

For the moment, these lists won't seem very useful to the average patient — and they have been criticized for that reason. They are often hundreds of pages long, filled with medical codes and abbreviations. Each document is an overwhelming compendium listing a rack rate for every little item a hospital dispenses and every service it performs: a blood test for anemia. The price of lying in the operating suite and recovery room (billed in 15-minute intervals). The scalpel. The drill bit. The bag of IV salt water. The Tylenol pill. No item is too small to be bar coded and charged.

But don't dismiss the lists as useless. Think of them as raw material to be mined for billing transparency and patient rights. For years, these prices have been a tightly guarded industrial secret. When advocates have tried to wrest them free, hospitals have argued that they are proprietary information. And, hospitals claim, these rates are irrelevant, since — after insurers whittle them down — no one actually pays them.

Of course, the argument is false, and our wallets know it.

First of all, hospitals routinely go after patients without insurance or whose insurer is not in their network. When Wanda Wickizer had a brain hemorrhage in 2013, a Virginia hospital billed her $286,000 after a 20% "uninsured" discount on a hospital bill of $357,000 — the list price, according to chargemaster charges. Medicare would have paid less than $100,000 for her treatment.

Second, those list prices form the starting point for negotiations, allowing hospitals and insurers to take credit for beneficence, when there is none.

I recently received an insurance statement for blood tests that were priced at $788.04; my insurer negotiated a "discount" of $725.35, for an agreed-upon price of $62.69 "to help save you money." My insurer's price was around 8% of the charge. Since my 10% copayment amounted to $6.27, my insurer happily informed me, "you saved 99%."

Not!

If a supposedly $1,000 TV is "on sale" for $80, it's not really a discount. It's an absurd list price.

Just as airlines have been shown to exaggerate flight times so they can boast about on-time arrivals, hospitals set prices crazy high so they can tout their generous discounts (while insurers tout their negotiating prowess).

Another rationale for those prices is just plain greed. Dr. Warren Browner, the chief executive of California Pacific Medical Center, describes this as the "Saudi sheikh problem": "You don't really want to change your charges if you have a Saudi sheikh come in with a suitcase full of cash who's going to pay full charges," he said.

But in an era when American patients are expected to be good consumers and are paying more of their bills in the form of copays and deductibles, they have a right to the information on list prices. They have a right to make sure they are reasonable.

Although making chargemaster pricing public will not, by itself, reform our high-priced medical system, it is an important first step. Maybe, just maybe, a hospital will think twice before charging a $6,000 "operating room fee" for a routine colonoscopy if its competitor down the street is listing its price at $1,000. Making this information public should bring list prices more in line with what is actually paid by an insurer, a far better measure of value.

And while the lists are far from user-friendly, researchers and entrepreneurs can now create apps to make it easier for patients to match procedures to their codes and crunch the numbers. With access to list prices on your phone, you could reject the $300 sling in the emergency room and instead order one for one-tenth of the price on Amazon. You could see in advance the $399 rate your hospital charges for each allergen it applies in a skin test and avoid the $48,000 allergy test — with an $8,000 deductible.

As a next step, regulators should insist that these prices be easily accessible on hospitals' home pages — perhaps in the place of "PAY YOUR BILL NOW" — and translated into plain English. Seema Verma, the head of the Centers for Medicare & Medicaid Services, has suggested that she may well do so.

Patients can help, too: Check out your hospital's price list. If it's not detailed or complete enough, demand more. For discrete items, like an MRI of the brain or a vitamin D blood test, take the trouble to scan the chargemaster for the item. Reject an overpriced procedure (even if your insurer is paying the bulk of the bill) and take your business elsewhere.

Justice Louis Brandeis famously said, "Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." But, in this case, the reform will work only if people take the trouble to look — and to act — now that the lights are turned on.

Elisabeth Rosenthal: erosenthal@kff.org, @rosenthalhealth

Hospitals Check To See If Patients Are Donor-Worthy—Not Their Organs, But Pockets

KFF Health News, January 28, 2019

Many hospitals conduct nightly wealth screenings using software that culls public data such as property records, contributions to political campaigns and other charities to gauge which patients are most likely to be the source of large donations.

This article first appeared January 28, 2019, on Kaiser Health News.

By Phil Galewitz, Kaiser Health News

Nonprofit hospitals across the United States are seeking donations from the people who rely on them most: their patients.

Many hospitals conduct nightly wealth screenings — using software that culls public data such as property records, contributions to political campaigns and other charities — to gauge which patients are most likely to be the source of large donations.

Those who seem promising targets for fundraising may receive a visit from a hospital executive in their rooms, as well as extra amenities like a bathrobe or a nicer waiting area for their families.

Some hospitals train doctors and nurses to identify patients who have expressed gratitude for their care, and then put the patients in touch with staff fundraisers.

These various tactics, part of a strategy known as "grateful patient programs," make some people uncomfortable. "Wealth screenings strike me as unseemly but not illegal or unethical," said Arthur Caplan, a bioethicist at the New York University School of Medicine.

Mark Rothstein, a bioethics professor at the University of Louisville, said, "Getting physicians involved in philanthropy is something fraught with danger." He added that it could make patients worry that their care might be affected by whether they made a donation.

Despite such concerns, these practices are becoming commonplace, particularly among the largest nonprofit hospitals. A 2016 survey of 108 hospitals found that 68 had grateful patient programs, according to the Advisory Board, a consulting firm.

"In the last 10 years we’ve seen a pretty dramatic uptick in strategic attention in the formation of these programs," said Nicholas Cericola, a senior consultant with the firm.

Large hospitals that say they screen patients' wealth include those run by MedStar Health in Columbia, Md.; the Johns Hopkins Hospital in Baltimore; Cedars-Sinai in Los Angeles; and NYU Langone Medical Center in New York.

Donations from patients and their families supplement income streams from private and public insurance programs as well as money raised through traditional methods like charity golf tournaments, dinners or gala balls.

"It's a way to get money to the hospital's bottom line like nothing else they are doing," said Bill Tedesco, chief executive officer of DonorSearch, a Maryland company that supplies hospitals with software that helps them conduct wealth screenings.

'Get-To-Know-You Opportunity'

Patients and their families were responsible for two-thirds of the $34 million donated to the Sharp HealthCare hospital system in San Diego last year, said Bill Littlejohn, chief executive officer of the system's fundraising foundation.

Wealth screening and the participation of the hospital's doctors are crucial, Littlejohn said. Sharp screens up to 400 patients each night, he said, and adds about 10 to 20 to its database of potential donors.

When he approaches wealthy patients in the hospital, they are unlikely to know that they were selected with the aid of the wealth screening, according to Littlejohn.

"I'm not asking them for money, but I tell them we appreciate them choosing Sharp and hope they have a wonderful experience," he said. "I use this as a get-to-know-you opportunity and let them know Sharp is a nonprofit and philanthropic-supported institution."

Littlejohn estimates that doctors prompted 20% of patient donations through conversations with their own patients. The practice has helped Sharp triple its annual fundraising totals from a decade ago, he said.

Nationwide, donations to hospitals exceeded $10.4 billion in 2017, up from $6 billion in 2004, according to the Association for Healthcare Philanthropy.

"Grateful patients have always been there, but we did not always do as good a job of inviting them to be part of our missions as we are now doing," Alice Ayres, the trade group's chief executive officer, said. She attributed the increased fundraising to grateful patients programs as well as to a shift away from event-driven efforts, a focus on larger gifts and overall economic growth in the United States.

Change In Privacy Law Facilitates Fundraising

A 2013 change in federal health privacy law made it easier for hospitals to target their patients for donations. It enabled hospital records departments to share with staff fundraisers some personal details of patients, including their health insurance status, the department treating them, the name of their physician and the outcome of their care.

When patients are admitted, they typically sign a raft of papers that include permission for the hospital to use this information for fundraising. While the 2013 law required hospitals to inform patients that they could decline to be solicited by fundraisers, few patients are aware of this, said Deven McGraw, a former deputy director of health information privacy at the federal Department of Health and Human Services. And, she said, few appear to realize that their wealth may be assessed for fundraising.

Many hospitals send solicitation letters to all of their insured patients, including those with little desire — or ability — to make donations.

St. Clair Hospital in Pittsburgh treated Marcy Grupp in its emergency room for three hours in May for a painful kidney stone, providing a computerized tomography scan, among other tests. Medicare paid the bill.

A month later, the hospital sent Grupp, a retired television engineer, a letter asking for a donation to honor a doctor or other caregiver. "We encourage you to please consider honoring their efforts with a 'gift of gratitude,' by making a donation to St. Clair Hospital," the letter said.

Grupp, 66, said she wasn't rich, and was disturbed by the letter.

"I kind of resent it," she said. "I don't think they need the money." The hospital last year reported nearly $48 million in net income and paid its chief executive officer $1 million.

"I thought the care I got was good and the doctors I had were good, but I don't see why I need to pay in addition to what I've already paid," Grupp said. St. Clair executives declined to comment.

Dr. Patricia Lech, a retired surgeon, underwent a successful joint replacement operation at New England Baptist Hospital in Boston in August 2017. Several months later, she received a letter from the hospital asking her to make a donation to honor one of her doctors.

Lech, 58, said the letter had left the impression that her doctor would directly benefit from the donation, which was not the case. "I did not like the implication that doctors would get rewarded when they really aren't," she said.

Morgan Herman, vice president of philanthropy at New England Baptist, acknowledged that the hospital solicited former patients but said that did not affect patient care. "There is no connection," she said.

Unease Among Doctors

Many doctors are uneasy about being asked to help raise money from their patients, studies show.

"It makes doctors very uncomfortable for a lot of reasons — No. 1 is that the doctor is there to see the patient for a problem they have and not to ask the patient for money," said Dr. Rosalyn Stewart, an internist at Johns Hopkins who has researched physician attitudes at Hopkins toward the practice.

She said she worried that if a wealthy patient made a large donation, doctors would feel obligated to treat them differently, perhaps by returning their calls more quickly.

"I feel like the risk is we are setting up a two-tiered healthcare system — one for wealthy patients and one for everyone else," Stewart said.

While wealth screenings have been used for decades for fundraising by universities and other nonprofits, ethicists said they raised different concerns for hospitals.

"Needing healthcare is different than choosing to go to college or going to the opera," said Nancy Berlinger, a bioethicist with the Hastings Center, a think tank in Garrison, N.Y. "When you are sick, you need a trusting relationship to be formed and focused on your health. There is a vulnerability there that is not present in other nonprofits."

Dr. Frederick Finelli, a surgeon and the vice president of medical affairs at MedStar Health's Montgomery Medical Center in Maryland, said that while he used to feel uncertain about fundraising, he now saw it as part of the healing process.

"When someone says 'Thanks' to me, it feels incomplete for me to just tell them, 'No problem' or 'I was just doing my job,'" he said. "Talking to patients about philanthropic or volunteer needs is good for patients."

Some patients say they are happy that they were asked for money.

For example, Martin Faga, 77, was treated at Inova Fairfax Hospital in Virginia last year for serious heart problems. A retired president of Mitre, a large nonprofit federal contactor, Faga repeatedly praised his bedside nurses for their care, he said.

When one of those nurses sent an email about this to Mary Myers, a hospital fundraiser, she visited Faga's room to chat about the role of philanthropy and arranged to meet him at his home a few weeks later, Myers said.

Faga wasn't initially interested in making a large donation, he said, because he didn't believe that the nonprofit health system — the largest in Northern Virginia, with five hospitals and $3 billion in annual revenue in 2016 — needed the money. But he said he had changed his mind after Myers told him that such donations were essential for staff training and buying equipment, and has donated $200,000 to the hospital.

"I would still have been in the small-donation category of a couple hundred dollars if not for Mary and the educational process," he said.

Drug-Pricing Policies Find New Momentum as 'A 2020 Thing'

KFF Health News, January 25, 2019

Spurred on by midterm election results that showed healthcare to be a deciding issue, lawmakers are pushing a bevy of new proposals and approaches.

This article first appeared January 25, 2019 on Kaiser Health News.

By Shefali Luthra

The next presidential primary contests are more than a year away. But presumed candidates are already trying to stake a claim to one of health care's hot-button concerns: surging prescription drug prices.

"This is a 2020 thing," said Dr. Peter Bach, who directs the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York and tracks drug-pricing policy.

Spurred on by midterm election results that showed healthcare to be a deciding issue, lawmakers — some of whom have already launched presidential run exploratory committees — are pushing a bevy of new proposals and approaches.

Few if any of those ideas will likely make it to the president's desk. Nevertheless, Senate Democrats eyeing higher office and seeking street cred in the debate are devising more innovative and aggressive strategies to take on Big Pharma.

"Democrats feel as if they’re really able to experiment," said Rachel Sachs, an associate law professor at Washington University in St. Louis who tracks drug-pricing laws.

Some Republicans are also proposing drug-pricing reform, although experts say their approaches are generally less dramatic.

Here are some of the ideas either introduced in legislation or that senators’ offices confirmed they are considering.

Make a public option for generic drugs. The government could manufacture generics (directly or through a private contractor) if there is a shortage or aren’t enough competitors to keep prices down. This comes from a bill put forth by Sen. Elizabeth Warren (D-Mass.) and Rep. Jan Schakowsky (D-Ill.).
Let Medicare negotiate drug prices. This idea has many backers — what differs is the method of enforcement. Sen. Sherrod Brown (D-Ohio) has suggested that if the company and the government can’t reach an agreement, the government could take away the company’s patent rights. A proposal from Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) would address stalled negotiations by letting Medicare pay the lowest amount among: Medicaid's best price, the highest price a single federal purchaser pays or the median price paid for a specific drug in France, the United Kingdom, Germany, Japan and Canada.
Pay what they do abroad. Legislation from Sanders and Rep. Ro Khanna (D-Calif.) would require companies to price their drugs no higher than the median of what’s charged in Germany, Japan, France, the United Kingdom and Canada. If manufacturers fail to comply, other companies could get the rights to make those drugs, too.
Penalize price-gouging. This would target manufacturers who raise drug prices more than 30% in five years. Punishments could include requiring the company to reimburse those who paid the elevated price, forcing the drugmaker to lower its price, or charging a penalty up to three times what a company received from boosting the price. Backers include Sens. Richard Blumenthal (D-Conn.), Kamala Harris (D-Calif.), Jeff Merkley (D-Ore.) and Amy Klobuchar (D-Minn.).
Import drugs. A Sanders-Cummings bill would let patients, wholesalers and pharmacies import drugs from abroad — starting with Canada, and leaving the door open for some other countries. Sen. Chuck Grassley (R-Iowa) and Klobuchar have a separate bill that is specific to patients getting medicine from Canada alone.
Abolish "pay-for-delay." From Grassley and Klobuchar, this legislation would tackle deals in which a branded drugmaker pays off a generic one to keep a competing product from coming to market.

This flurry of proposed lawmaking could add momentum to one of the few policy areas in which conventional Washington wisdom suggests House Democrats, Senate Republicans and the White House may be able to find common ground.

"Everything is up in the air and anything is possible," said Dr. Walid Gellad, co-director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh. "There are things that can happen that maybe weren’t going to happen before."

And there's political pressure. Polls consistently suggest voters have a strong appetite for action. As a candidate, President Donald Trump vowed to make drug prices a top priority. In recent months, the administration has taken steps in this direction, like testing changes to Medicare that might reduce out-of-pocket drug costs. But Congress has been relatively quiet, especially when it comes to challenging the pharmaceutical industry, which remains one of Capitol Hill's most potent lobbying forces.

One aspect of prescription drug pricing that could see bipartisan action is insulin prices, which have skyrocketed, stoking widespread outcry and could be a target for bipartisan work. Warren's legislation singles out the drug as one the government could produce, and Cummings has already called in major insulin manufacturers for a drug-pricing hearing later this month. In addition, Rep. Diana DeGette (D-Colo.), the new chair of the House Energy and Commerce Oversight and Investigations Subcommittee, has listed prescription drug pricing as a high priority for her panel. As co-chair of the Congressional Diabetes Caucus, DeGette worked with Tom Reed (R-N.Y.) to produce a report on the high cost of insulin.

To be sure, some of the concepts, such as drug importation and bolstering development of generic drugs, have been around a long time. But some of the legislation at hand suggests a new kind of thinking.

House Speaker Nancy Pelosi (D-Calif.) has labeled drug pricing a top priority, and the pharmaceutical industry has been bracing for a fight with the new Democratic majority.

Meanwhile, in the GOP-controlled Senate, two powerful lawmakers — Sen. Lamar Alexander (R-Tenn.) and Grassley — have indicated they want to use their influence to tackle the issue. Alexander, who chairs the Health, Education, Labor and Pensions Committee, has said cutting health care costs, including drug prices, will be high on his panel's to-do list this Congress. Grassley runs the Finance Committee, which oversees pricing issues for Medicare and Medicaid.

"The solution to high drug prices is not just having the government spending more money. … You need to look at prices," Gellad said. "These proposals deal with price. They all directly affect price."

Given the drug industry’s full-throated opposition to virtually any pricing legislation, Sachs said, "it is not at all surprising to me to see the Democrats start exploring some of these more radical proposals."

Still, though, Senate staffers almost uniformly argued that the drug-pricing issue requires more than one single piece of legislation.

For instance, the price-gouging penalty spearheaded by Blumenthal doesn't stop drugs from having high initial list prices. Letting Medicare negotiate doesn't mean people covered by other plans will necessarily see the same savings. Empowering the government to produce competing drugs doesn't promise to keep prices down long term and doesn't guarantee that patients will see those savings.

"We need to use every tool available to bring down drug prices and improve competition," said an aide in Warren’s office.

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

Shefali Luthra: ShefaliL@kff.org, @Shefalil

Trump Targets Surprise Medical Bills in Chat with Patients, Experts

KFF Health News, January 24, 2019

The White House this week launched an investigation into surprise medical bills after President Trump met with patients who'd been charged outrageous fees for out-of-network healthcare services.

This article first appeared January 23, 2019 on Kaiser Health News.

By Emmarie Huetteman

President Donald Trump on Wednesday instructed administration officials to investigate how to prevent surprise medical bills, broadening his focus on drug prices to include other issues of price transparency in healthcare.

Flanked by patients and other guests invited to the White House to share their stories of unexpected and outrageous bills, Trump tasked his health secretary, Alex Azar, and labor secretary, Alex Acosta, with working on a solution, several attendees said.

"The pricing is hurting patients, and we've stopped a lot of it, but we're going to stop all of it," Trump said during a roundtable discussion when reporters were briefly allowed into the otherwise closed-door meeting.

David Silverstein, the founder of a Colorado-based nonprofit called Broken Healthcare who attended, said Trump struck an aggressive tone, calling for a solution with "the biggest teeth you can find."

"Reading the tea leaves, I think there's big change coming," Silverstein said.

Surprise billing, or the practice of charging patients for care that is more expensive than anticipated or not covered by their insurance, has received a flood of attention in the past year, particularly as Kaiser Health News and other news organizations have undertaken investigations into patients’ most outrageous medical bills.

Attendees said each of 10 invited guests — among them patients as well as doctors with their own stories of unexpected bills — was given an opportunity to talk, though Trump did not stay to hear all of their stories during the roughly hourlong gathering.

The group included Paul Davis, a retired doctor from Findlay, Ohio, whose family's experience with a $17,850 bill for a simple urine test was detailed in a KHN-NPR “Bill of the Month” feature last year.

Davis' daughter, Elizabeth Moreno, was a college student in Texas when she had spinal surgery to remedy debilitating back pain. After the surgery, she was asked to provide a urine sample and later received a bill from an out-of-network lab in Houston that tested it. Experts said such tests rarely cost more than $200, not nearly what the lab charged Moreno and her insurance company. But fearing damage to his daughter's credit, Davis paid the lab $5,000 and filed a complaint with the Texas attorney general's office, alleging "price gouging of staggering proportions."

Davis said White House officials made it clear that price transparency is a "high priority" for Trump, and while they did not see eye to eye on every subject, he said he was struck by their sincerity.

"These people seemed earnest in wanting to do something constructive to fix this," Davis said.

Dr. Martin Makary, a surgeon and health policy expert at Johns Hopkins University who has written about transparency in healthcare and attended the meeting, said it was a good opportunity for the White House to hear firsthand about a serious and widespread issue.

"This is how most of America lives, and [Americans are] getting hammered," he said.

Trump has often railed against high prescription drug prices but has said less about other problems with the nation's health care system. In October, shortly before the midterm elections, he unveiled a proposal to tie the price Medicare pays for some drugs to the prices paid for the same drugs overseas, for example.

Trump, Azar and Acosta said efforts to control costs in healthcare were yielding positive results, discussing in particular the expansion of association health plans and the new requirement that hospitals post their list prices online. The president also took credit for the recent increase in generic drug approvals, which he said would help lower drug prices.

Discussing the partial government shutdown, Trump said Americans "want to see what we’re doing, like today we lowered prescription drug prices, first time in 50 years," according to a White House pool report.

Trump appeared to be referring to a recent claim by the White House Council of Economic Advisers that prescription drug prices fell last year.

However, as STAT pointed out in a recent fact check, the report from which that claim was gleaned said "growth in relative drug prices has slowed since January 2017," not that there was an overall decrease in prices.

Annual increases in overall drug spending have leveled off as pharmaceutical companies have released fewer blockbuster drugs; patents have expired on brand-name drugs; and the waning effect of a spike driven by the release of astronomically expensive drugs to treat hepatitis C. Drugmakers are also wary of increasing their prices in the midst of growing political pressure.

Since Democrats seized control of the House of Representatives this month, party leaders have rushed to announce investigations and schedule hearings dealing with healthcare, focusing in particular on drug costs and protections for those with preexisting conditions.

Last week, the House Oversight Committee announced a "sweeping" investigation into drug prices, pointing to an AARP report saying the vast majority of brand-name drugs had more than doubled in price between 2005 and 2017.

KHN correspondents Shefali Luthra and Jay Hancock contributed to this report.

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