Leapfrog Group called the lawsuit from Saint Anthony's Hospital an 'eleventh hour gambit to turn back the clock on a disappointing safety grade based.'

This article first appeared December 11, 2017 on Kaiser Health News.

By Jenny Gold

CHICAGO — For two years, Saint Anthony Hospital here has celebrated its top-rated “A” grade from the national Leapfrog Group that evaluates hospital safety records. But this fall, when executives opened a preview of their score, they got an unwelcome surprise: a “C.”

Hospitals take their ratings seriously, despite hospital industry experts’ skepticism about their scientific methodology and studies showing that scores may not have a huge influence on patient behavior. In a highly competitive market, no one wants to be a “C”-rated safety hospital any more than a “C”-rated restaurant for cleanliness.

So, the hospital didn’t take its new grade sitting down. It sued the ratings group for defamation, alleging that the grade was based on data that Leapfrog knew to be inaccurate.

“If Leapfrog publishes a ‘C’ grade for Saint Anthony as part of its Fall 2017 Hospital Survey Grades, it will erase years of improvements at the hospital and irreparably degrade the public perception of the hospital,” according to the complaint, which was filed in the Circuit Court of Cook County, Ill. “Saint Anthony competes with other hospitals in the immediate area, including one down the street, and one of the most important ways Saint Anthony recently has been able to distinguish itself is the high safety grades it receives from Leapfrog.”

In a response filed to the court on Tuesday, Leapfrog called Saint Anthony’s lawsuit an "eleventh hour gambit to turn back the clock on a disappointing safety grade based in part on the data that [the hospital] itself provided and certified, and which Leapfrog simply used in accordance with its long-established processes."

Leapfrog is one of a number of organizations, including U.S. News and World Report, Healthgrades and Consumer Reports, that score hospitals based on whether they meet certain quality measures. Based in Washington, D.C., Leapfrog’s scores are a combination of 27 measures of quality from government data and an independent survey to evaluate things like infections, deaths among surgical patients and how well doctors communicate.

About 50 percent of hospitals participate in Leapfrog’s survey; the others are evaluated based only on publicly available data. Leapfrog’s mission is to help hospitals improve in weak areas and to give patients useful information.

Hospitals are quick to tout good grades on advertising and banners.

Saint Anthony’s complaint appears to be the first time a hospital has sued a rating agency over a contested grade. But in an era when hospitals are brands and patients are customers hoping to make rational purchases for care, such grades and rating systems are likely to face more scrutiny and new pushback.

“In highly competitive markets, hospitals are likely to see poor grades as a challenge, and I think many will be tempted to sue the rating agencies,” said Ashish Jha, a professor at the Harvard T.H. Chan School of Public Health.

Jha, who was on a committee that helped set standards when Leapfrog was established, said he was heartened that hospitals are reacting to data, whatever the impetus. “If they’re going to use that as motivation to get better, that’s perfect,” he said. “As a patient, you don’t care why a hospital is investing in safety, you just care that they are.”

It is unclear to what extent grades influence patient decisions. A Pew Research Center survey from 2012, for example, found that only 14 percent of internet users consulted online rankings or reviews of hospitals or medical facilities.

But Saint Anthony hospital executives insist Leapfrog’s score has an enormous effect on their bottom line. “We have seen, for better or worse, that people are paying a great deal of attention — not only our patients but also our stakeholders, vendors and politicians,” said Dr. Eden Takhsh, the hospital’s chief quality officer. Such scores have also influenced them to focus on improving certain quality metrics, such as rates of sepsis and central line infections.

Leapfrog’s scores are plastered across every newspaper in town, he said. Based on their past “A” grades, Takhsh said, Saint Anthony has been approached by both the University of Chicago and Northwestern, two much larger teaching hospitals in Chicago, to form partnerships in pediatrics and neurology. Both hospitals offered to send their physicians to Saint Anthony to provide subspecialty care, which would provide the small community hospital with more patients and prestige.

A “C” grade could threaten those partnerships. “These organizations don’t want to partner with someone with low quality because it hurts them,” said Takhsh.

Dr. Karl Bilimoria, a professor at Northwestern University in Chicago, said it’s unclear whether ratings ought to have so much influence. “These ratings systems are overall not very good,” he said. “Most of them use data that are generated for billing, so they’re not particularly accurate.”

Major ratings systems “frequently conflict,” because they use different criteria, he said: “A hospital can be rated best on one of them and be rated poorly on another.” Saint Anthony, for example, was rated three out of five stars on Medicare’s Hospital Compare website during the same period that it received an “A” from Leapfrog. The hospital was not included in U.S. News and World Report’s top 22 hospitals in Chicago.

Hospitals can choose to advertise the rating that makes them look best. Patients may be impressed by a hospital’s “Top Hospital” banner but never see the lower scores.

Some ratings groups charge for the display. Leapfrog charges $5,500-$17,600 for a hospital to use its emblem in advertising, depending on the hospital’s size. Others, such as U.S. News and World Report’s “Best Hospitals” program, also levies a fee, but Consumer Reports does not.

The ratings systems differ widely on how they compile their scores, and some are more focused on the quality of care than others. “Leapfrog is the best and the only publicly reported rating focused exclusively on safety. It was developed by top experts and uses the very best publicly available data,” said Leapfrog CEO and President Leah Binder. “Our reviews are scrupulous.”

Saint Anthony’s lawsuit hinges on the question of how its physicians order medications, which Saint Anthony believes was the principal reason for their lower grade. The grade was wrong, the hospital claims, because it is based on an inaccurate assessment that physicians prescribed medications electronically only 50 to 74 percent of the time. Saint Anthony maintains that its physicians in fact prescribe electronically 95 percent of the time. The hospital contacted Leapfrog several times to fix the error, according to the lawsuit, but Leapfrog declined.

Leapfrog has removed Saint Anthony’s grade for now, but will likely repost it pending further investigation, noting that the electronic ordering issue was unlikely to fully explain the “C” grade. “There’s clearly some very poor and sloppy reporting from this hospital,” said Binder.

Dr. Karen Joynt Maddox, an assistant professor at the Washington University School of Medicine in St. Louis, said that the dispute underlines the weaknesses of the ratings information available to patients. “This whole field is way behind where it needs to be,” especially given the proliferation of “consumer-driven” high-deductible plans, she said, adding: “there’s a vacuum in terms of consumer-friendly information.”

While the nation grapples with soaring prices of drugs, dozens of cities, counties and school districts across the country have quietly found a solution they say protects their budgets and saves workers money.

This article first appeared December 08, 2017 on Kaiser Health News.

By Phil Galewitz

Schenectady County, N.Y., is on track to pay 20 percent less on prescription drugs for its employees this year than in 2003.

Flagler County, Fla., expects to save nearly $200,000 in 2017 on brand-name medicines for its 800 workers, its total drug costs having fallen by 10 percent since last year.

Kokomo, Ind., has found a way to save so much money buying drugs that it offers employees a 90-day supply of dozens of popular brand-name medicines for free.

While the nation grapples with soaring prices of drugs, dozens of cities, counties and school districts across the country have quietly found a solution they say protects their budgets and saves workers money: They are helping their employees buy medicines from pharmacies in Canada and overseas, where prices are up to 80 percent cheaper.

“We love it … it’s a win-win for us and our employees,“ said Anita Stoker, benefits and wellness manager for Flagler County, on Florida’s northeastern coast, which in 2015 started offering its employees a program to get drugs from pharmacies in Canada, England, Australia and New Zealand.

The numbers are growing, even though the U.S. Food and Drug Administration says the practice of importing prescription drugs is illegal and is stepping up enforcement, with raids on stores that helped people order overseas, and even visiting some customers’ homes to collect evidence of illegal purchases.

So far, the FDA has made no move to shut down these employee benefit programs — a few dating back over a decade, but most far more recent.

Asked about its view of the programs, an agency spokeswoman said: “The FDA does not comment on its compliance or enforcement strategy regarding specific FDA-regulated products. When non-compliance with FDA regulations is found, the agency may take, and has taken, a variety of advisory, administrative and judicial actions depending on the violations identified.”

The FDA doesn’t prosecute consumers buying medicines from foreign pharmacies for personal use, although — if detected — such packages are intercepted at the border as contraband and their contents returned or destroyed.

But signaling it may be stepping up enforcement — at least against middlemen who facilitate the practice — the FDA in October raided nine Central Florida storefronts that helped a mostly senior population buy drugs from Canada and other countries. The stores don’t stock any medicines but assist consumers in ordering drugs from foreign pharmacies. Criminal investigators warned the store’s owners they were operating illegally and could face fines or jail time. They were not shut down.

Bill Hepscher, co-owner of Canadian MedStore, which owns six of the nine storefronts visited by the FDA, defends his practice, saying he’s only helping consumers do what the FDA says they can do without fear of government prosecution. He said it’s not fair that his stores get targeted for assisting consumers while municipalities across the country are doing the same thing for their employees. This includes the school district in Pasco County, where Hepscher has one of his stores.

Congress has passed legislation legalizing the importation of prescription drugs several times in the past 20 years, but both Democratic and Republican administrations have opted not to implement it. The FDA has said reimporting medicines from outside the United States is dangerous because of the possibility that medications are counterfeit, mislabeled or otherwise unsafe — a view vigorously supported by the industry.

The pharmaceutical industry applauded the recent FDA raids. “We welcome the FDA’s action to crack down on drug importation schemes,” said Holly Campbell, a spokeswoman for PhRMA.

But rising drug prices have given this reimportation idea new life — in Congress and in practice.

In hearings last week, Sen. Rand Paul (R-Ky.) said he would oppose the nomination of Alex Azar, a former drug company CEO, as head of Health and Human Services unless Azar commits to implementing an importation plan. Told by Azar that the problem was guaranteeing safety, Paul replied: “That’s b.s. The American people think it’s b.s. that you can’t buy drugs from Europe or from Canada or Mexico or other places.”

A growing number of city and county officials argue that their employees should have the option to buy less expensive drugs and that helping them do so doesn’t violate any laws.

In recent years, millions of Americans have driven over the border to Canada and Mexico or used the internet to buy medicines from foreign pharmacies for personal use.

A Kaiser Family Foundation poll in 2016 found that 8 percent of respondents said they or someone in their household had imported a drug at some point, a figure that would translate to about 19 million adults in the U.S. based on current Census population estimates.

In the early 2000s, several states, including Maine and Illinois, briefly maintained websites to help residents buy drugs from Canada. The programs were discontinued, amid opposition from federal authorities, the pharmaceutical industry and GOP politicians. Now, cities, counties and school districts are stepping in.

Consumers need a doctor’s prescription just as they would to buy medicine from their local pharmacy.

Drugs ordered from overseas often come with the same packaging as in the U.S. CanaRx, based in Windsor, Ontario, and ElectRx, based in Detroit, says it vets the pharmacies (generally in Canada, England and Australia) to ensure customers get the real product. Counties, cities and schools — as well as a growing number of private companies — contract with one of these companies for online service.

These companies do not sell to individuals. They sell only a three-month supply of medicine and do not provide drugs that are available as generics in the U.S.

The price savings for common medicines outside the U.S. can be huge, since other nations negotiate prices with drug manufacturers or allow cheaper generic equivalents to be sold more rapidly.

Take Canadian MedStore, for example. It sells a 90-day supply of Januvia for $83, imported from England. The same supply of the diabetes drug can cost $423 in the U.S. An Advair Diskus, which goes for $417 in the U.S., MedStore gets from New Zealand and sells for $96. Xarelto, a popular blood thinner, costs $89 per month imported from England, versus $485 a month in the U.S.

Companies selling drugs from Canada and overseas say the FDA’s safety concerns are unjustified. The recent FDA raids on Hepscher’s Florida storefronts followed a sting operation in which undercover agents purchased medicines from overseas — all of which proved in testing to contain the ingredients matching the medicines ordered.

But FDA spokeswoman Lyndsay Meyer said: “The ones that we found and tested may have been [safe], but that doesn’t mean that they all were. We do believe that it’s unsafe. You never know what you’re going to get or how they were stored — it’s a gamble. And importantly, it’s prohibited under federal law.”

Cities and counties that facilitate online ordering from overseas often do so on the advice of their insurance brokers. “In this day and age, when it’s common for employers to see a 20 or 30 percent annual increase in drug costs, we are seeing a negative drug trend in Flagler County — that’s unheard of,” said Sherry Bugnet, an account executive with The Bailey Group, an insurance broker in St. Augustine, Fla.

Schenectady County, N.Y., has worked with CanaRx for over a decade to allow employees to buy drugs overseas, saving more than $10 million during that period, with no complaints; prescriptions involve no copay if the service is used. The few times drugs were confiscated at an international mail-processing facility by customs officials, CanaRx merely re-sent the shipment.

“It helps us keep our tax rate down and helps us give cost-of-living increases to employees,” said Chris Gardner, a county attorney who helped start the program, through which he has ordered medicines for cholesterol and blood pressure.

Since 2012, Kokomo, Ind., has let its employees get brand-name drugs with no copayment if they order from Canada and overseas through ElectRx. “Our employees like it, and it’s very simple and easy to use. Their doctor fills out a prescription, they send it in, and the medication goes right to their home,” said Kathy Horton, director of human resources for the city, about 60 miles north of Indianapolis.

Encouraged by the successes in other parts of Florida, Patricia Howard, senior manager for benefits and risk at Pasco County Schools, said the county in July started offering the international pharmacy option to its 9,600 employees and dependents to buy brand-name drugs.

Employees pay zero for their first 90-day order, then $10 for each 90-day refill. About 75 workers have used the program.

Other parts of Florida will soon join in. Both the Palm Beach County Clerk & Comptroller and the city of Sarasota are set to unveil similar programs in January. ”I have no questions about the legality, as that’s already been vetted,” said April Bryan, the city’s general manager of human resources.

Carmen Catizone, executive director of the National Association of Boards of Pharmacy, a nonprofit association that promotes safe pharmacy practices, said: “If cities and counties have done their due diligence to ensure their employees are getting drugs from reputable sources, then there is nothing wrong with it,” he said. “If not, they could be playing Russian roulette.”

The perverse incentives of the health care payment system have long made it far more lucrative to treat severe, dangerous asthma attacks than to prevent them.

This article first appeared December 06, 2017 on Kaiser Health News.

By Jay Hancock and Rachel Bluth and Daniel Trielli

BALTIMORE — Keyonta Parnell has had asthma most of his young life, but it wasn’t until his family moved to the 140-year-old house here on Lemmon Street two years ago that he became one of the health care system’s frequent customers.

“I call 911 so much since I’ve been living here, they know my name,” said the 9-year-old’s mother, Darlene Summerville, who calls the emergency medical system her “best friend.”

Summerville and her family live in the worst asthma hot spot in Baltimore: ZIP code 21223, where decrepit houses, rodents and bugs trigger the disease and where few community doctors work to prevent asthma emergencies. One mom there wields a BB gun to keep rats from her asthmatic child.

Residents of this area visit hospitals for asthma flare-ups at more than four times the rate of people from the city’s wealthier neighborhoods, according to data analyzed by Kaiser Health News and the University of Maryland’s Capital News Service.

Baltimore paramedic crews make more asthma-related visits per capita in 21223 than anywhere else in the city, according to fire department records. It is the second-most-common ZIP code among patients hospitalized for asthma, which, when addressed properly, should never require emergency visits or hospitalization.

The supreme irony of the localized epidemic is that Keyonta’s neighborhood in southwest Baltimore is in the shadow of prestigious medical centers — Johns Hopkins, whose researchers are international experts on asthma prevention, and the University of Maryland Medical Center.

Both receive massive tax breaks in return for providing “community benefit,” a poorly defined federal requirement that they serve their neighborhoods. Under Maryland’s ambitious effort to control medical costs, both are supposed to try to improve residents’ health outside the hospital and prevent admissions.

But like hospitals across the country, the institutions have done little to address the root causes of asthma. The perverse incentives of the health care payment system have long made it far more lucrative to treat severe, dangerous asthma attacks than to prevent them.

Hopkins, UMMC and other hospitals collected $84 million over the three years ending in 2015 to treat acutely ill Baltimore asthma patients as inpatients or in emergency rooms, according to the news organizations’ analysis of statewide hospital data. Hopkins and a sister hospital received $31 million of that.

Executives at Hopkins and UMMC acknowledge that they should do more about asthma in the community but note that there are many competing problems: diabetes, drug overdoses, infant mortality and mental illness among the homeless.

Science has shown it’s relatively easy and inexpensive to reduce asthma attacks: Remove rodents, carpets, bugs, cigarette smoke and other triggers. Deploy community doctors to prescribe preventive medicine and health workers to teach patients to use it.

Ben Carson, secretary of the Department of Housing and Urban Development, who saw hundreds of asthmatic children from low-income Baltimore during his decades as a Hopkins neurosurgeon, said that the research on asthma triggers is unequivocal. “It’s the environment — the moist environments that encourage the mold, the ticks, the fleas, the mice, the roaches,” he said in an interview.

As the leader of HUD, he says he favors reducing asthma risks in public housing as a way of cutting expensive hospital visits. The agency is discussing ways to finance pest removal, moisture control and other remediation in places asthma patients live, a spokeswoman said.

“The cost of not taking care of people is probably greater than the cost of taking care of them” by removing triggers, Carson said, adding, “It depends on whether you take the short-term view or the long-term view.”

The Long View

Asthma is the most common childhood medical condition, with rates 50 percent higher in families below the poverty line, who often live in run-down homes, than among kids in wealthier households. The disease causes nearly half a million hospital admissions in the United States a year, about 2 million visits to the emergency room and thousands of deaths annually.

That drives the total annual cost of asthma care, including medicine and office visits, well over $50 billion.

Keyonta lives in a two-bedroom row house on the 1900 block of Lemmon Street, which some residents call the “Forgetabout Neighborhood,” about a mile from UMMC and 3 miles from Hopkins.

Reporters spent months interviewing patients and parents and visiting homes in 21223, a multiracial community where the average household income of $38,911 is lower than in all but two other ZIP codes in Maryland.

To uncover the impact of asthma, the news organizations analyzed every Maryland inpatient and emergency room case over more than three years through a special agreement with the state commission that sets hospital rates and collects such data. The records did not include identifying personal information.

For each emergency room visit to treat Baltimore residents for asthma, according to the data, hospitals were paid $871, on average. For each inpatient case, the average revenue was $8,698. In one recent three-year period, hospitals collected $6.1 million for treating just 50 inpatients, the ones most frequently ill with asthma, each of whom visited the hospital at least 10 times.

Hopkins’ own research shows that shifting dollars from hospitals to Lemmon Street and other asthma hot spots could more than pay for itself. Half the cost of one admission — a few thousand dollars — could buy air purifiers, pest control, visits by community health workers and other measures proven to slash asthma attacks and hospital visits by frequent users.

“We love” these ideas, and “we think it’s the right thing to do,” said Patricia Brown, a senior vice president at Hopkins in charge of managed care and population health. “We know who these people are. . . . This is doable, and somebody should do it.”

But converting ideas to action hasn’t happened at Hopkins or much of anywhere else.

One of the few hospitals making a substantial effort, Children’s National Health System in Washington, D.C., has found that its good work comes at a price to its bottom line.

Children’s sends asthma patients treated in the emergency room to follow-up care at a clinic that teaches them and their families how to take medication properly and remove home triggers. The program, begun in the early 2000s, cut emergency room use and other unscheduled visits by those patients by 40 percent, a study showed.

While recognizing that it decreases potential revenue, hospital managers fully support the program, said Dr. Stephen Teach, the pediatrics chief who runs it.

“‘Asthma visits and admissions are down again, and it’s all your fault!’” Children’s chief executive likes to tease him, Teach said. “And half his brain is actually serious, but the other half of his brain is celebrating the fact that the health of the children of the District of Columbia is better.”

The Close-Up View

Half of the 32 row houses on Summerville’s block of Lemmon Street are boarded up, occupied only by the occasional heroin user. At least 10 people on the block had asthma late last year, according to interviews with residents then.

“We have mold in our house” and a leaky roof, said Tracy Oates, 42, who lived across the street from Summerville. “That is really big trouble as far as triggering asthma.”

Two of her children have the disease. “I don’t even want to stay here,” she said. “I’m looking for a place.”

Shadawnna Fews, 30, lived with her asthmatic toddler on Stricker Street, a few blocks east. She kept a BB gun to pick off rats that doctors said can set off her son’s wheezing.

Delores Jackson, 56, who lived on Wilkens Avenue, a few blocks south of Lemmon Street, said she had been to the hospital for asthma three times in the previous month.

All three of Summerville’s kids have asthma. Before moving to Lemmon Street two years ago, she remembers, Keyonta’s asthma attacks rarely required medical attention.

But their new house contained a clinical catalog of asthma triggers.

The moldy basement has a dirt floor. Piles of garbage in nearby vacant lots draw vermin: mice, which are among the worst asthma triggers, along with rats. Summerville, 37, kept a census of invading insects: gnats, flies, spiders, ants, grasshoppers, “little teeny black bugs,” she laughed.

Often she smokes inside the house.

The state hospital data show that about 25 Marylanders die annually from acute asthma, their airways so constricted and blocked by mucus that they suffocate.

Keyonta missed dozens of school days last year because of his illness, staying home so often that Summerville had to quit her cooking job to care for him. Without that income, the family nearly got evicted last fall and again in January. The rent is $750.

About a third of Baltimore high school students report they have had asthma, causing frequent absences and missed learning, said Dr. Leana Wen, Baltimore’s health commissioner.

With numbers like that, West Baltimore’s primary care clinics, which treat a wide range of illnesses, are insufficient, as is the city health department’s asthma program, whose three employees visit homes of asthmatic children to demonstrate how to take medication and reduce triggers.

The program, which an analysis by Wen’s office showed cut asthma symptoms by 89 percent, “is chronically underfunded,” she said. “We’re serving 200 children [a year], and there are thousands that we could expand the program to.”

‘The Hospital Instead Of The Classroom’

The federal government paid for $1.3 billion in asthma-related research over the past decade, of which $205 million went to Hopkins, records show. The money supports basic science as well as many studies showing that modest investments in community care and home remediation can improve lives and save money.

“Getting health care providers to pay for home-based interventions is going to be necessary if we want to make a dent in the asthma problem,” said Patrick Breysse, a former Hopkins official, who as director of the National Center for Environmental Health at the Centers for Disease Control and Prevention is one of the country’s top public health officials.

Other factors can trigger asthma: outdoor air pollution and pollen, in particular. But eliminating home-based triggers could reduce asthma flare-ups by 44 percent, one study showed.

Perhaps no better place exists to try community asthma prevention than Maryland. By guaranteeing hospitals’ revenue each year, the state’s unique rate-setting system encourages them to cut admissions with preventive care, policy authorities say.

But Hopkins, UMMC and their corporate parents, whose four main Baltimore hospitals together collect some $5 billion in revenue a year, have so far limited their community asthma prevention to small, often temporary efforts, often financed by somebody else’s money.

UMMC’s Breathmobile program, which visits Baltimore schools dispensing asthma treatment and education, depends on outside grants and could easily be expanded with the proper resources, said its medical director, Dr. Mary Bollinger. “The need is there, absolutely,” she said.

Hopkins runs “Camp Superkids,” a weeklong, sleep-away summer session for children with asthma that costs participants $400, although it awards scholarships to low-income families. It’s also conducting yet another study — testing referral to follow-up care for emergency room asthma patients, which Children’s National long ago showed was effective.

But no hospital has invested substantially in home remediation to eliminate triggers, a proven strategy supported by the HUD secretary and promoted by Green and Healthy Homes Initiative, a Baltimore nonprofit that works to reduce asthma and lead poisoning.

“We either go forward to do what has been empirically shown to work, or we continue to bury our heads in the sand and kids will continue to go to the hospital instead of the classroom,” said Ruth Ann Norton, the nonprofit’s chief executive.

Hopkins and UMMC say they do plenty to earn their community benefit tax breaks.

“It’s always a challenge to say, ‘Where do we start first?’” said Dana Farrakhan, a senior vice president at UMMC whose duties include community health improvement.

Among other initiatives, UMMC takes credit for working with city officials to sharply reduce infant mortality by working with expectant mothers. The organization’s planned outpatient center will include health workers to help people reduce home asthma triggers, Farrakhan said.

“What we do is perhaps not sufficiently focused,” Brown of Hopkins said. At the same time, “we have to have revenue,” she said. “We’re a business.”

After months of waiting, Summerville considered herself lucky to get an appointment with the city health department’s asthma program.

One of its health workers came to the house late last year. She supplied mousetraps and mattress and pillow covers to control mites and other triggers. She helped force Summerville’s landlord to fix holes in the ceiling and floor.

She urged Summerville to stop smoking inside and gave medication lessons, which uncovered that Summerville had mixed up a preventive inhaler with the medicine used for Keyonta’s flaring symptoms.

“The asthma lady taught me what I needed to know to keep them healthy,” Summerville said of her family.

That was late in 2016. Since then, Summerville said last month, she hasn’t called an ambulance.

Health plans, medical practices, and some Medicaid programs increasingly offer financial incentives to motivate Medicaid patients to engage in more preventive care and make healthier lifestyle choices.

This article first appeared December 05, 2017 on Kaiser Health News.

By Anna Gorman

Patricia Alexander knew she needed a mammogram but just couldn’t find the time.

“Every time I made an appointment, something would come up,” said Alexander, 53, who lives in Moreno Valley, Calif.

Over the summer, her doctor’s office, part of Vantage Medical Group, promised her a $25 Target gift card if she got the exam. Alexander, who’s insured through Medi-Cal, California’s version of the Medicaid program for lower-income people, said that helped motivate her to make a new appointment — and keep it.

Health plans, medical practices and some Medicaid programs are increasingly offering financial incentives to motivate Medicaid patients to engage in more preventive care and make healthier lifestyle choices.

They are following the lead of private insurers and employers that have long rewarded people for healthy behavior such as quitting smoking or maintaining weight loss. Such changes in health-related behavior can lower the cost of care in the long run.

“We’ve seen incentive programs be quite popular in the insurance market, and now we are seeing those ramp up in the Medicaid space as well,” said Robert Saunders, research director at the Margolis Center for Health Policy at Duke University.

Medicaid patients who agree to be screened for cancer, attend health-related classes or complete health risk surveys can get gift cards, cash, gym memberships, pedometers or other rewards. They may also get discounts on their out-of-pocket health care costs or bonus benefits such as dental care.

Under the Affordable Care Act, 10 states received grants totaling $85 million to test the use of financial rewards as a way to reduce the risk of chronic disease among their Medicaid populations. During the five-year demonstration, states used the incentives to encourage people to enroll in diabetes prevention, weight management, smoking cessation and other preventive programs. The states participating were California, Connecticut, Hawaii, Minnesota, Montana, Nevada, New Hampshire, New York, Texas and Wisconsin.

Medi-Cal, for example, offered gift cards and nicotine replacement therapy to people who called the state’s smoking cessation line. Minnesota’s Medicaid program handed out cash to people who attended a diabetes prevention class and completed bloodwork.

An evaluation of these programs, released in April, showed that incentives help persuade Medicaid beneficiaries to take part in such preventive activities. Participants said gift cards and other rewards also helped them achieve their health goals. But the evaluators weren’t able to show that the programs prevented chronic disease or saved Medicaid money. That’s in part because those benefits could take years to manifest, according to the evaluation.

Overall, research on the effectiveness of financial incentives for the Medicaid population has been mixed. A report this year by the Center on Budget and Policy Priorities found that they can induce people to keep an appointment or attend a class but are less likely to yield long-term behavior changes, such as weight loss. And in some cases, the report said, incentives are given to people to get exams they would have gotten anyway.

The center’s report also found that penalties, including ones that limit coverage for people who don’t engage in healthful behaviors, were not effective. Instead, they can result in increased use of emergency rooms by restricting access to other forms of care, the report said.

Some of the biggest factors preventing Medicaid patients from adopting healthful behaviors are related not to medical care but to their circumstances, said Charlene Wong, a pediatrician and health policy researcher at Duke University.

That makes administering incentive programs more complicated. Even recruiting and enrolling participants has been a challenge for some states that received grants through the Affordable Care Act.

“The thing that is most likely to help Medicaid beneficiaries utilize care appropriately is actually just giving them access to that care — and that includes providing transportation and child care,” said Hannah Katch, one of the authors of the report by the Center on Budget and Policy Priorities. Another barrier is being able to take time off work to go to the doctor.

But health plans are eager to offer patients financial incentives because it can bring their quality scores up and attract more enrollees. And medical groups, which may receive fixed payments per patient, know they can reduce their costs — and increase their profits — if their patients are healthier.

Providing incentives to plans and medical groups has created a business opportunity for some companies. Gift Card Partners has been selling gift cards to Medicaid health plans for about five years, said CEO Deb Merkin. She said health insurers that serve Medicaid patients want to improve their quality metrics, and they can do that by giving incentives and getting patients to the doctor.

“It is things like that that are so important to get them to do the right thing so that it saves money in the long run,” she said.

Agilon Health, based in Long Beach, Calif., runs incentive programs and other services for several California medical groups that care for Medi-Cal patients. The medical groups contract with the company, which provides gift cards to patients who get mammograms, cervical cancer exams or childhood immunizations. People with diabetes also receive gift cards if they get their eyes examined or blood sugar checked. And the company offers bonuses to doctors if their Medicaid patients embrace healthier behaviors.

The incentives for patients are “massively important for the Medicaid population, because the gaps in care are historically so prevalent,” said Ron Kuerbitz, CEO of Agilon. Those gaps are a big factor pushing up costs for Medicaid patients, because if they don’t get preventive services, they may be more likely to need costlier specialty care later, Kuerbitz said.

Emma Alcanter, who lives in Temecula, Calif., received a gift card from her doctor’s office after getting a mammogram late this summer. Alcanter, 56, had noticed a lump in her breast but waited about two years before getting it checked, despite reminders from her doctor’s office. “I was scared they were going to find cancer,” she said.

Alcanter finally decided to get screened after her first grandchild was born. The gift card was an added bonus, and Alcanter said it showed her doctors cared about her. Her mammogram revealed that the lump wasn’t cancer, and she plans to use the gift card to buy a present for her grandson.