How Below-The-Radar Mergers Fuel Healthcare Monopolies

KFF Health News, September 6, 2017

Large doctor practices, many owned by hospitals, exceed federal guidelines for market concentration in more than a fifth of the areas studied, research shows.

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

By Jay Hancock

Hospitals have gone on a doctor-buying spree in recent years, in many areas acquiring so many independent practices they’ve created near-monopolies on physicians.

Research published Tuesday throws new light on the trend, showing that large doctor practices, many owned by hospitals, exceed federal guidelines for market concentration in more than a fifth of the areas studied.

But it goes further, helping answer some of health policy’s frequently asked questions: How could this happen? Where are the regulators charged with blocking mergers that have been repeatedly shown to drive up the price of health care?

The answer, in many cases, is that they’re out of the game.

Doctor deals are typically far too small to trigger official notice to federal antitrust authorities or even attract public attention, finds a paper published in the journal Health Affairs.

When it comes to most hospital-doctor mergers, antitrust cops operate blind.

“You have a local hospital system and they’re going in and buying one doctor at a time. It’s onesies and twosies,” said Christopher Ody, a Northwestern University economist and one of the study’s authors. “Occasionally they’re buying a group of five. But it’s this really small scale” that adds up to big results, he said.

The paper, drawing from insurance data in states covering about an eighth of the population, found that 22 percent of markets for primary care doctors, surgeons, cardiologists and other specialties were “highly concentrated” in 2013. That means that, under Federal Trade Commission guidelines, a lack of competitors substantially increased those doctors’ ability to raise prices without losing customers.

The research didn’t sort physician groups by ownership. But other studies show that large, predominant practices are increasingly owned by hospitals, which see control of doctors as a way to both coordinate care and ensure patient referrals and revenue.

According to one study, hospitals owned 26 percent of physician practices in 2015, nearly double the portion from 2012. They employed 38 percent of all physicians in 2015, up from 26 percent three years earlier.

In the study by Ody and colleagues, only 15 percent of the growth by the largest physician groups from 2007 to 2013 came from acquisitions of 11 doctors or more.

About half the growth of the big practices involved acquisitions of 10 or fewer doctors at a time. About a third of the growth came not from mergers but from hiring doctors out of medical school or other sources.

Federal regulations require notification to anti-monopoly authorities only for mergers worth some $80 million or more — far larger than any acquisition involving a handful of doctors.

Very few of the mergers that drove concentration over the market-power red line — or even further — in the studied areas would have surpassed that mark or a second standard that identifies “presumably anti-competitive” combinations.

But the little deals add up. In 2013, 43 percent of the physician markets examined by the researchers were highly or moderately concentrated according to federal guidelines that gauge monopoly power by market share and number of competitors.

(A market with three practices in a particular specialty, each with a third of the business, would be at the lower end of what’s considered highly concentrated. A market with one doctor group doing at least 50 percent of the business would be highly concentrated no matter how many rivals it had.)

Bigger and fewer doctor practices, fueled largely by hospital acquisitions, do drive up prices for patients, employers and taxpayers, several studies confirm.

Part of the increase results from a reimbursement quirk. Medicare and other insurers pay hospital-based doctors more than independent ones. But another part comes from the lock on business held by large practices with few rivals, Ody said.

“It’s a problem,” said Martin Gaynor, a health care economist at Carnegie Mellon University and former head of the FTC’s Bureau of Economics. “All the evidence that we have so far … indicates that these acquisitions tend to drive up prices, and there’s other evidence that seems to indicate it doesn’t do anything in terms of enhancing quality.”

The American Hospital Association, a trade association, declined to comment on the study since officials hadn’t seen it. But the AHA often argues that “hospital deals are different” and that doctor acquisitions keep patients from falling through the cracks between inpatient and outpatient care.

The FTC has moved to block or undo a few sizable doctor mergers, including an orthopedics deal in Pennsylvania and an attempt by an Idaho hospital system to buy a medical practice with dozens of doctors.

But the agency largely lacks the tools to challenge numerous smaller transactions that add up to the same result, said Ody.

An FTC spokeswoman declined to comment on the study’s findings.

Ody urged state attorneys general and insurance commissioners to look more closely at doctor combos. Sometimes state officials can question mergers overlooked by federal authorities. Or they can block anti-competitive practices, such as when hospitals seek to exclude competitor physicians from insurance networks.

Beyond that, “I hope that people notice this [research], and I hope people think creatively about what kinds of solutions might be appropriate for this,” he said. “I don’t know what they are.”

State Insurance Commissioners In Hot Seat In National Health Care Drama

KFF Health News, September 6, 2017

The political debate highlights the role of these administrators who sometimes preside over underfunded offices and whose range of duties usually spans well beyond healthcare.

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

By Julie Appleby

With insurance premiums rising and national efforts at health reform in turmoil, a group of 50 state bureaucrats whom many voters probably can’t name have considerable power over consumers’ health plans: state insurance commissioners.

As insurers threaten to exit state markets and voters at town halls complain about unaffordable prices, the state commissioners are central characters in the unfolding drama that is America’s health coverage.

“What’s the worst job to have right now? Insurance commissioner,” said Christopher Koller, a former commissioner from Rhode Island who is president of the Milbank Memorial Fund, a foundation that works to improve health. “They’re trying to keep the market stable.”

Most are wrestling with how to take on this task amid ongoing political rancor over the fate of the Affordable Care Act. Several commissioners are slated to testify Wednesday before the Senate health committee to talk about market stability and how to ensure patients have affordable health care.

The political debate highlights the role of this crew of wonk-ish administrators who sometimes preside over underfunded, understaffed offices and whose range of duties usually spans well beyond health care and its myriad complexities.

In all but one state, the commissioner regulates all types of insurance, and in several he or she might hold other jobs — such as lieutenant governor (Ohio), state auditor (Montana) and fire marshal (Mississippi, North Carolina, Tennessee and Georgia).

Most commissioners have the authority to reject premiums or modify rates they deem excessive. They also have the power of their bully pulpit. Though California Commissioner Dave Jones, for example, lacks the statutory muscle to override insurers’ rate increases, he often uses his position to publicly call out insurers’ premium hikes.

But critics worry that in some states the position is a revolving door with industry, moving them to do less than they could.

“It a double-edged sword,” said Sabrina Corlette, research professor at Georgetown University’s Health Policy Institute. “Knowledge of industry … is very important in the job. [But] … if someone is coming from and going back to industry, it does raise some red flags about where their interests really lie.”

Sometimes a past résumé draws increased public scrutiny of a regulator’s actions on issues under the department’s purview.

Connecticut Insurance Commissioner Katherine Wade, who was a Cigna executive before being named commissioner, was fined $500 in June after the state’s Freedom of Information Commission ruled that she improperly withheld documents related to a proposed merger between Aetna and Humana. She is currently appealing the ruling. The proposed merger was called off in February after a federal court blocked the deal, but not before a state review of Connecticut-based Aetna’s plan drew criticism because of Wade’s past employment.

Eleven commissioners are elected and the remainder are appointed and — as such — face new political pressures in a highly partisan health care debate.

When Julie Mix McPeak, commissioner of Tennessee’s Department of Commerce and Insurance, persuaded Blue Shield to return to areas of the state that it had pulled out of last year, she recalled: “Some critics said I was going out of my way to prop up Obamacare. Others said I wasn’t doing enough because I’m from a red state and that must mean we want Obamacare to fail. But I just want access to coverage.”

Historically, insurance commissioners have stayed out of political battles, said Tim Jost, emeritus professor at the Washington and Lee University School of Law who also serves as a consumer advocate with the National Association of Insurance Commissioners (NAIC). They see “themselves as civil servants more than politicians,” he said.

But, he added, “at least for the moment, it’s more politicized than it has been in the past.”

The individual insurance market, where about 17 million people purchase their own plans because they don’t get it through their jobs, is the focus for much of this drama.

GOP repeal-and-replace talking points have hammered a message that the individual market — including these government exchanges — are imploding. But Democrats counter that though they face difficulties, this is not the case. The insurance commissioners are caught in the middle and have the power to make either narrative come true.

Many had to scramble this summer — negotiating, offering incentives or just downright pleading — to get insurers to stay in their markets.

At one point, there were more than 40 counties nationwide with zero insurers for next year. As of Aug. 24, when insurer CareSource agreed to provide coverage in Ohio’s Paulding County, no more of these so-called “bare counties” remained.

McPeak and other commissioners also say that cost issues need to be tackled, but there’s no bandwidth to take on these thorny issues because they have to deal with the more immediate problems.

“We can’t get to affordability if I don’t have a policy for people to buy,” said McPeak. For next year, “I’m telling consumers there will be problems and they will see rate increases. But at least they have an option.”

These efforts are made more complicated by President Donald Trump’s repeated threats to eliminate subsidies used to lower deductibles for some ACA policyholders, which would raise premiums. Payments are currently being made on a month-to-month basis. It will likely be a topic during the upcoming Senate hearing.

“We would all like to know what the rules are. When there is uncertainty, it’s difficult to make short- or long-term decisions, said Al Redmer, who was appointed Maryland’s insurance commissioner in 2015 by Republican Gov. Larry Hogan.

And the subsidies aren’t the only point of contention, with the partisan divide also reflected among some commissioners.

Trump and Congress are causing uncertainty that is “sabotaging the progress we’ve made,” Washington state Insurance Commissioner Mike Kreidler wrote in June. His state strongly embraced the ACA.

Kreidler, a Democrat who formerly was a member of Congress, was first elected commissioner in 2000.

In contrast, Oklahoma Insurance Commissioner John Doak, whose state opposed the ACA from the start, has made it no secret that he supports repeal of the law, calling it “this disastrous experiment.” Doak, a Republican who was elected to the position in 2010 after working for various insurance companies, blamed ACA regulations for “so many insurers dropping out of exchanges or resorting to double digit premium increases.”

Commissioners’ regulatory powers vary by state, depending on the rules state legislators have put in place for them to enforce.

“Some states have comprehensive protections for consumers … while others have limited protection,” said Claire McAndrew, director of campaign strategy at Families USA.

But if they are so motivated, consumers can always find means to take an activist role.

Past commissioners, for instance, talk of using the regulatory process itself — pushing the boundaries in drafting the rules or using a “slow walk” toward their implementation — to work around these boundaries.

Even so, they face other limits. For instance, staffing levels for their departments are down nearly 6 percent since 2008, according to the most recent NAIC statistics.

That’s a big disadvantage when contrasted with the “strength of insurance industry lobby,” said J. Robert Hunter, a former Texas commissioner and now director of insurance at the Consumer Federation of America.

And some fail to counter industry influence in legislatures and even inside their own offices, he added.

He recalls that when he took up his post in Texas, he met with lawmakers in the Statehouse, some of whom were “unabashed” in their support of the insurance industry, warning “we’ll hurt your budget” if he went too hard on industry.

He didn’t play ball.

“If insurers are always happy, something is wrong,” said Hunter. “Insurance commissioners’ jobs are to hold them to account.”

A Doctor Tending To Texans Taps Lessons Learned From Katrina

KFF Health News, September 6, 2017

A physician volunteering at a makeshift clinic in San Antonio shares her thoughts in the wake of Harvey, the first major storm since the federal government revised emergency preparedness standards for hospitals.

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

By Shefali Luthra

Dr. Ruth Berggren (center) and other staff from Charity Hospital in New Orleans were evacuated to Fort Worth, Texas, six days after Hurricane Katrina hit Louisiana in August 2005. (Courtesy of Ruth Berggren)

As Dr. Ruth Berggren digests the calamity affecting her new home state of Texas, she admits to some PTSD.

In 2005, she was an infectious-disease doctor at the nearly 3,000-bed Charity Hospital in New Orleans, one of a small number of physicians left managing patients and performing triage in the wake of Hurricane Katrina. She spent weeks and month dealing with the aftermath, before moving to Texas, where she heads the University of Texas-San Antonio’s Center for Medical Humanities and Ethics, part of its Health Science Center.

As Houston begins assessing Harvey’s impact, she’s “constantly comparing and contrasting,” she said. After all, Berggren remembers the power outages and the lack of clean drinking water. She knows firsthand the trauma suffered by the medical personnel trying to keep people healthy under devastating circumstances.

“I remember what it was like to be standing on the balcony of the ninth floor of Charity Hospital looking out over the floodwaters,” Berggren reflected.

This time around, she has been volunteering at a makeshift clinic in a San Antonio middle school, once again treating victims of the storm — elderly patients who had lost their walkers, and people who in the rush to evacuate had forgotten medicines (or perhaps lost track of when they last took a dose).

Storms such as this place a heavy burden on the local health system. Hospitals such as Houston’s Ben Taub Hospital, a Level 1 trauma center, worked to evacuate patients, even as food shortages and flooded streets promised complications for people trying to deliver refuge and health care.

But Berggren has also seen improvements. Harvey is the first major storm since the federal government revised emergency preparedness standards for hospitals, in response to Katrina and 2012’s Superstorm Sandy. Now, health care providers that receive Medicare or Medicaid dollars must have disaster preparedness plans, including relocation strategies for at-risk patients and mechanisms to maintain basic power.

Berggren shared her distinctive perspective last week, drawing on her knowledge of Texas, her memories from New Orleans and knowledge as one of the country’s leading bioethicists. The following transcript has been edited for length and clarity.

Q: What kind of burden does a storm like this one place on local hospitals, and on the health care system?

The first responders are always the people there locally. They’re being affected by the disaster at the same time as the population is. You have sort of a dual role.

Where I saw this burden take its biggest toll was two or three days into the post-Katrina storm, at Charity. The people who had the hardest time were the folks who didn’t know the safety or whereabouts of or well-being of their loved ones.

All the health care providers in Ben Taub now, and other hospitals caring for patients that had to be left behind — this is a very stressful and difficult time.

Q: Does that affect what kind of care they give, while seeing potentially increased need?

You have to start working with much more limited resources. There’s going to be limitations in communications. We’ve already heard about looming limitations for food. Water has been OK, power has been OK — so those are two factors that weigh heavily in Houston’s favor. After Katrina, we lost power. We really didn’t have the ability to use our water supply. It was, in that respect at least, more dire.

However, as the days go by, the rains continue, the flooding continues — supplies are going to run out. There are going to be a lot of logistical hurdles.

Q: Hurricane Katrina shone a spotlight on some of these challenges that can arise at a hospital navigating a natural disaster — are there lessons you think people learned that we’re maybe seeing applied here in Harvey?

Dr. Ruth Berggren is now head of the University of Texas-San Antonio’s Center for Medical Humanities and Ethics. (Courtesy of UT Health San Antonio)

It does look like they were far better prepared, with regard to having protection for their power supply and for water in these hospitals.

You can never really be fully prepared. What I recall before Katrina is there was kind of a set of misplaced priorities. We had to all undergo about four hours of training about sexual harassment in the workplace because Tulane was worried about that that year in particular — and had had exactly zero hurricane preparedness. We didn’t even know what Code Gray was.

I think that whole region along the Gulf Coast is much more attuned to the fact that we have to prioritize educating health professionals about disaster preparedness. I see better preparedness in the medical community and I like to think that’s part of the Hurricane Katrina legacy.

Q: What challenges should we expect in the storm’s wake?

There are always going to be vulnerable people, disenfranchised groups of people. If they’re not gotten out and they become further deprived of food and shelter and having their basic needs met, you’re going to see, unfortunately, I fear, the potential for violence. We had the experience at Charity Hospital of getting shot at by snipers, and we never knew who they were. We assumed they were disenfranchised people who had become desperate and been deprived of food or perhaps medication.

It’s going to be very hard to get regular services back up and running. I would say mental health is going to be a big problem. We saw a number of suicides in New Orleans after Katrina. People have a bit of a sense of despair when they become aware of the scope and scale of the disaster.

Post-Katrina it took many, many, many months to see the mental health counselors and psychiatrists return. I would hope that in the intermediate-range and long-range planning for disaster recovery that mental health is given a really high priority.

Next, I would worry about some infectious-disease issues. There’s a lot that’s been written about Houston’s risk for a Zika outbreak. Of course, the way you combat Zika is you get rid of standing water — and what does Houston have right now?

Q: Lots of standing water?

Lots of standing water! They have had a superb proactive public health response up until now. I only hope the state continues to support that.

We have a lot of people living with chronic illness in general. When it’s tuberculosis, when it’s HIV, those people need their medications on a regular schedule, without interruption.

There were a lot of logistical hurdles in New Orleans, post-Katrina, in keeping patients on their full HIV regimens and full tuberculosis regimens. My patients with AIDS and tuberculosis, who were evacuated without their medications — it took a long time before they could get to a place where they really felt they could confidently tell their health care providers what their needs were.

I had AIDS patients contacting me and saying, “Is it OK if I take my pills every other day to make them last longer?” And that’s exactly what you don’t want to do.

Q: With people saying recovery will take months and even years — what sort of long-term impact might we see on the health system in Houston, and on local public needs?

Physical infrastructure will take time to repair, but you can still provide funding to help people access care.

One vulnerable group that I would like to highlight is pregnant women. Between 2010 and 2014 we saw a 79 percent increase in maternal death [in Texas].

Houston doesn’t have to have all the floodwater evacuated and the buildings pristine to provide health care to vulnerable people.

Q: Having moved from Louisiana to Texas, what is it like for you watching another hurricane play out in your new home?

I’m comparing and contrasting constantly. I’m always checking the news. I’m checking in with my resident who’s assigned at Ben Taub. I’m seeing things that are being done a lot better and I’m seeing things that I wish could be done differently. …

Disasters bring out the best and the worst in people. We always want to look to criticize and identify the mistakes, but these are also opportunities to see how good we really can be.

The capacity of our people to take care of one another and to rise to the occasion and to go beyond themselves is just so inspiring.

President Trump

Trump Administration Whacks Millions From Budget Used To Push Obamacare

KFF Health News, September 1, 2017

President Donald Trump’s administration slashed millions of dollars from the government’s budget to promote the health law’s annual open enrollment season beginning in two months.

This article first appeared August 31, 2017 on Kaiser Health News.

By Rachel Bluth and Phil Galewitz

President Donald Trump has insisted for months that “Obamacare is already dead.”

His administration matched its harsh words with damaging action on Thursday — slashing millions of dollars from the government’s budget to promote the health law’s annual open enrollment season beginning in two months.

The move is likely to translate into reduced marketing and fewer navigators — trained representatives deployed by nonprofit groups that receive federal grants to help people understand health insurance options and purchase a plan. The effect could cause more confusion for consumers in an abbreviated enrollment period that is 45 days shorter than last year — running from Nov. 1 to Dec. 15.

Grants to the nonprofits that supply navigators will fall by 40 percent to $36.8 million this year and advertising will drop by 90 percent to $10 million, the Centers for Medicare & Medicaid Services said. The money will be spent in 38 states that use the government’s healthcare.gov exchange.

Administration officials said that five years into the Affordable Care Act, most people know they need to sign up and what their options are, and that there is no evidence that more advertising leads to higher enrollment. Last year’s $100 million advertising budget was double that of 2015’s.

The administration’s announcement was denounced by prominent Democrats, former Obama administration officials and navigator organizations.

“The Trump administration is deliberately trying to sabotage our health care system,” said Senate Minority Leader Chuck Schumer (D-N.Y.).

“I can’t think what the justification is for doing this” because experience has shown people need help getting through the enrollment process, said Jodi Ray, who leads the University of South Florida’s navigator program. It has won the largest navigator award in the country for the past several years, about $5.9 million.

Ray doesn’t know what USF will get this year. Grant amounts to navigators have not been announced yet.

“It’s going to be a really big challenge and doing a lot of extra work with fewer people on the ground and doing the work in half the time,” she said.

Shelli Quenga, director of programs for the Palmetto Project in Charleston and Columbia, S.C., fears her group will have to reduce its workforce and events. Palmetto received $1 million last year.

“We will face massive cuts to our budget,” Quenga said. “I am very worried for the fate of South Carolinians who need access to impartial and unbiased information.”

Funding for 98 navigator organizations will be tied to how each performed last year relative to the enrollment goals they set for themselves. Those that didn’t meet their goals — 78 percent did not, according to CMS — will get less money this year. If an organization hit only 30 percent of its goal last year, it will receive 30 percent of last year’s funding.

That formula has some flaws, said Lori Lodes, who directed CMS’ outreach efforts in 2014 and 2015 under the Obama administration.

For one, navigators don’t get credit for every enrollment they help produce. Sometimes, consumers consult navigators about their choices and then complete their enrollment in private at home, said Lodes, who now directs the Families USA campaign called Protect Our Care.

Another problem with the formula, she said, is that it fails to recognize the large amounts of time that navigators sometimes invest in helping people who are not native English speakers or have disabilities and need more help finding suitable health plans. That could contribute to groups signing up fewer people than anticipated.

“The people that really need help come from more vulnerable populations,” Lodes said. “More vulnerable populations are not going to get the care they need.”

In a background briefing for reporters, Health and Human Services Department officials said too much money was spent in past years with too little to show for it. They cited a navigator group in one state last year that enrolled only one person in an insurance plan but received $200,000, which they said could have paid insurance premiums for 31 people in that state for the entire year.

They noted that the advertising budget doubled last year, but despite the increase, enrollment fell by 42 percent, or about 500,000 people.

But Joel Ario, a former HHS official in the Obama administration who oversaw the federal and state insurance exchanges, challenged their judgment.

The decrease resulted from the Trump administration’s decision to end advertising as 2017’s open enrollment period entered its final weeks in January, he said.

“It’s disingenuous to say that ads didn’t tie to enrollment,” Ario said.

States that run their own marketplaces are not included in the navigation program. But some of them are continuing to put resources into enrollment. California’s 2017-18 marketing budget stands in stark contrast to the federal government’s. The state is poised to spend $111.5 million advertising Obamacare, more than 10 times what CMS plans to spend in 38 states.

‘Quantum Leap’ In Cost

Cancer Gene Therapy Gets Green Light — And $475,000 Price Tag

KFF Health News, August 31, 2017

The Food and Drug Administration approved the therapy from Novartis called Kymriah, in children and young adults with acute lymphoblastic leukemia whose disease has come back in spite of previous treatments.

This article first appeared August 30, 2017 on Kaiser Health News.

By Liz Szabo

The country’s first approved gene therapy — approved Wednesday to fight leukemia that resists standard therapies — will cost $475,000 for a one-time treatment, its manufacturer announced.

Switzerland-based Novartis, which makes the innovative therapy, announced that the drug will cost nothing if patients fail to benefit in the first month.

The Food and Drug Administration approved the therapy, called Kymriah, in children and young adults with acute lymphoblastic leukemia whose disease has come back in spite of previous treatments. These patients typically have a poor prognosis, surviving three to nine months, according to Novartis.

In the study that led to Kymriah’s approval, 83 percent of patients went into remission within three months, according to the FDA. Novartis estimates about 600 patients a year would be eligible for the treatment, which belongs to a class of drugs known as CAR T-cell therapies.

Kymriah treats cancer in an entirely new way. The individualized approach involves harvesting cancer patients’ immune cells, genetically engineering them, then returning them to patients’ bodies. The genetic engineering process aims to rev up patients’ immune systems to better fight cancer.

“We’re entering a new frontier in medical innovation with the ability to reprogram a patient’s own cells to attack a deadly cancer,” said Dr. Scott Gottlieb, the FDA commissioner. “New technologies such as gene and cell therapies hold out the potential to transform medicine and create an inflection point in our ability to treat and even cure many intractable illnesses.”

Novartis officials said it is working with 20 hospitals to provide Kymriah within a month. Eventually, the therapy will be offered at 32 sites, the company said. The first patients could be treated within days. The company is carefully training hospitals and staff to provide the treatment, which can cause a life-threatening immune reaction, as well as long-term complications.

Novartis said that it priced its drug based on several considerations. British health authorities have said a price of $649,000 for a one-time treatment would be cost-effective given Kymriah’s significant benefits. Novartis also considered the cost of bone-marrow transplants, which are currently given to many leukemia patients whose cancer relapses. Those transplants can cost up to $800,000, Novartis said.

Dr. Stephan Grupp, a researcher at Children’s Hospital of Philadelphia who helped test Kymriah in early studies, said he hopes the therapy could eventually replace bone-marrow transplants for these young patients. It would spare them serious and long-term side effects of a transplant, such as problems caused when the immune system attacks transplanted cells, he said. Some children who’ve received Kymriah have already received a transplant. For others, Kymriah serves as a “bridge to transplant,” keeping them alive longer enough to undergo this therapy.

An advocacy group called Patients for Affordable Drugs recently met with officials at Novartis to ask it to set a “fair” price for the drug, whose early development was supported by $200 million in federal research grants.

David Mitchell, a multiple myeloma patient and president of the advocacy group, described the drug’s price tag as “excessive.”

“Novartis should not get credit for bringing a $475,000 drug to market and claiming they could have charged people a lot more,” he said. “The drug pricing system in America is completely broken. Until policy in this country changes, the vicious cycle of patients struggling under high drug prices will continue.”

The FDA also is considering a CAR T-cell therapy from California-based Kite Pharma. Gilead Sciences — which has been criticized for the $84,000 price tag of its hepatitis C drug — announced Monday that it will buy Kite for $11.9 billion.

Novartis officials said that they will offer a patient assistance program to help people with out-of-pocket costs.

Experts have noted that hidden costs could further add to patients’ financial burdens.

Beyond the cost of the procedure, patients would need to pay for traditional chemotherapy, which is given before CAR T-cell therapy to improve its odds of success. They would also have to foot the bill for travel and lodging to one of the hospitals equipped to provide the high-tech treatment.

Because patients can develop life-threatening side effects weeks after the procedure, doctors will ask patients to stay within two hours of the hospital for up to a month. In New York, even budget hotels cost more than $200 a night — an expense not typically covered by insurance. Patients who develop a dangerous complication, in which the immune system overreacts and attacks vital organs, might need coverage for emergency room care, as well as lengthy stays in the intensive care unit.

Doctors don’t yet know what the full range of long-term side effects will be. CAR T-cell therapies can damage healthy immune cells, including the cells that produce the antibodies that fight disease. Some patients will need long-term treatments with a product called intravenous immunoglobulin, which provides the antibodies that patients need to prevent infection.

5 Outside-The-Box Ideas For Fixing The Individual Insurance Market

KFF Health News, August 30, 2017

The Senate Health, Education, Labor and Pensions Committee launches hearings the week Congress returns in September on “stabilizing premiums in the individual insurance market.”

This article first appeared August 30, 2017 on Kaiser Health News.

By Julie Rovner

With Republican efforts to “repeal and replace” the Affordable Care Act stalled, tentative bipartisan initiatives are in the works to shore up the fragile individual insurance market that serves roughly 17 million Americans.

The Senate Health, Education, Labor and Pensions Committee launches hearings the week Congress returns in September on “stabilizing premiums in the individual insurance market” that will feature state governors and insurance commissioners. A bipartisan group in the House is also working to come up with compromise proposals.

Both before and after implementation of the federal health law, this market — serving people who don’t get coverage through work or the government — has proved problematic. Before the law, many people with preexisting health conditions could not get insurance at any price. Now, consumers in the individual market often face higher out-of-pocket costs and fewer choices of health care providers and insurers than in past years. More than 12 million people buy that insurance through the ACA’s marketplaces, while another 5 million buy it outside of the exchanges.

Policymakers generally agree on what immediate efforts to stabilize the market might include. At the top of most lists is ensuring federal payment of subsidies to insurers to pay the out-of-pocket expenses — such as deductibles and copayments — to protect customers with the lowest incomes. Insurers also want the federal government to continue enforcing the requirement that most Americans either have insurance or pay a tax penalty, and continuing efforts to get uninsured people to sign up for coverage during the upcoming open enrollment period, from Nov. 1 to Dec. 15. Those efforts are essential, insurers say, to help keep healthy customers in their risk pools to defray the costs of beneficiaries with medical needs.

But what about ideas that go beyond the oft-repeated ones? Here are five proposals that are more controversial but generating buzz.

1. Allow people into Medicare starting at age 55.

Getting slightly younger people into Medicare, the federal program for the disabled and Americans 65 and older, is a longtime goal of Democrats. It dates at least to the Clinton administration and was nearly included in the Affordable Care Act in 2010. A Medicare buy-in is not exactly the same as a “public option,” which many Democrats, including former President Barack Obama, have embraced. A true public option would offer government coverage to those of any age.

Lowering the age for Medicare eligibility (whether by allowing people to purchase coverage early or letting them join on the same terms as those aged 65) is controversial. Some Democrats support it as a first step toward a single-payer, Medicare-for-All system. Most Republicans oppose it on those same grounds — as a step toward government-run health care.

But proponents argue it would help the current individual market by excluding the oldest people, thereby lowering the average age of the risk pool. Since older patients, on average, cost more to insure, the change could lower premiums for everyone left in the ACA market. That’s the stated goal of a Medicare buy-in bill introduced earlier this month by Sen. Debbie Stabenow (D-Mich.) and seven other Democratic senators. That bill would allow Obamacare market customers ages 55-64 to purchase Medicare coverage instead, but would also let them use ACA tax credits if they are eligible for those. The cost of such policies, however, has not been worked out.

“The way we’ve structured it actually both helps Medicare by having younger people in that pool, and it helps private insurance by taking higher-cost individuals out of their pool,” Stabenow told The Detroit News.

Conservative health analysts don’t buy that, though. “This is just a way of saying we’re going to take these people out of the exchanges and put them where there are bigger subsidies,” said Joseph Antos at the conservative-leaning American Enterprise Institute (AEI).

2. Allow people to ‘buy in’ to Medicaid.

An alternative to letting people buy in to Medicare is letting them buy in to Medicaid, the joint federal-state program for those with low incomes.

Medicaid buy-ins already exist — for example, in 2005 Congress passed the Family Opportunity Act, which allows families earning up to three times the poverty level to purchase Medicaid coverage for their disabled children who aren’t otherwise eligible. Medicaid has typically provided richer benefits for those with disabilities than private health insurance.

Earlier this year, Gov. Brian Sandoval (R-Nev.) vetoed a bill that would have allowed Nevada residents to buy Medicaid coverage through the state’s insurance exchange.

Now Sen. Brian Schatz (D-Hawaii) is pushing a federal Medicaid buy-in plan, which he described to Vox.com last week. It would give states the option to allow people with incomes over current Medicaid eligibility thresholds to pay a premium to join the program. Like the Medicare buy-in bill, it would allow those who qualify for federal tax credits to use them to pay the premiums.

The proposal would also raise the amounts Medicaid pays to doctors, hospitals and other health care providers to the same level as it pays for Medicare patients. Traditionally, low Medicaid payment rates have kept many doctors, particularly specialists, from taking Medicaid.

As with the Medicare expansion, the idea of a further Medicaid expansion does not sit well with conservative policy analysts. “It’s completely unworkable,” Avik Roy of the Foundation for Research on Equal Opportunity, told Vox. He predicted it would raise Medicaid spending by $2 trillion over 10 years.

3. Get younger adults off their parents’ insurance and back into the individual market.

Allowing young adults up to age 26 to stay on their parents’ health plans is unquestionably one of the most popular ACA provisions. Democrats have touted it proudly while Republicans have dared not touch it in almost any of their overhaul proposals.

Yet what has been a boon to 3 million young adults (and a relief to their parents) has come at a cost to the individual marketplace itself, where only an estimated 28 percent of those buying coverage in state exchanges were ages 18-34 in 2016. That is well below the 40 percent most analysts said was necessary to keep the market stable.

“Frankly, it was really stupid,” to keep those young people out of the individual market, said Antos of AEI. The result has been a lack of people in the risk pool who are “young, healthy and whose parents will pay their premiums.”

But rolling back that piece of the law might be nearly impossible, said Antos, because “this is a middle-class giveaway.”

4. Require insurers who participate in other government programs to offer marketplace coverage.

One clear shortcoming of the individual marketplace is a lack of insurer competition, particularly in rural areas. While there appear to be no counties left with no company offering coverage for the coming year, the percentage of counties with only one insurer seems certain to rise from 2017’s 33 percent.

In an effort to more strongly encourage private companies to step up and offer coverage, several analysts have suggested tying access to participation in other government programs to a willingness to offer individual ACA policies as well.

For example, some have suggested insurers be required to provide policies in the marketplaces as a condition of being able to offer coverage to federal workers. Others have suggested that private insurers who offer profitable Medicare Advantage plans could also be required to offer individual exchange coverage, although the same rural areas with a lack of private individual market insurers also tend to lack Medicare Advantage coverage.

5. Let people use HSA contributions to pay health insurance premiums.

A little-noticed provision in one of the versions of the Senate GOP health bill that failed to pass in July would have allowed people to use money from tax-preferred health savings accounts (HSAs) to pay their insurance premiums. A little-noticed proposal from a group of ideologically diverse health care experts included a similar idea.

HSAs are linked to high-deductible insurance plans, and consumers use the money in the account to pay their out-of-pocket expenses. The money put into the account and the earnings are not taxable.

With a few exceptions, people with HSAs have not been allowed to use those funds to pay monthly premiums. But the change would be one way to provide relief to people who buy their own insurance, earn too much to get federal premium subsidies and cannot deduct premiums from their taxes because they are not technically self-employed. Such people, though likely small in number, have been disproportionately hurt by rising premiums in the individual market since the ACA took full effect.

Still, the change would involve some trade-offs.

Roy Ramthun, who helped design HSAs as a Senate staffer in the early 2000s and helped implement them while at the Treasury Department during the George W. Bush administration, said that, generally, “Republicans have preferred to subsidize insurance premiums through tax deductions and credits and leave the HSA for out-of-pocket expenses.” Allowing premiums to be paid from HSA funds, he said, “could eat up the entire balance of the account and leave nothing for out-of-pocket expenses.” There are limits to how much money can be put into an HSA. For 2017, the maximum is $3,400 for an individual and $6,750 for a family.

Mayo Pain Expert: Holistic Approach Helps Patients Ditch Opioids

KFF Health News, August 29, 2017

Insurers might disagree that the intensive, interdisciplinary approach is medically necessary for some patients or simply not cover the program’s billing codes.

This article first appeared August 29, 2017 on Kaiser Health News.

By Michelle Andrews

Each year, more than 300 patients with chronic pain take part in a three-week program at the Pain Rehabilitation Center at Mayo Clinic in Rochester, Minn. Their complaints range widely, from specific problems such as intractable lower-back pain to systemic issues such as fibromyalgia. By the time patients enroll, many have tried just about everything to get their chronic pain under control. Half are taking opioids.

In this 40-year-old program, that’s a deal breaker. Participants must agree to taper off pain medications during their time at Mayo.

More than 80 percent of the patients who enroll stay for the entire program, said Wesley Gilliam, the center’s clinical director, and many previous opioid users who finish the treatment report six months later that they have been able to stay off opioids. Just as important, he added, they have learned strategies to deal with their pain.

But such a program is not for everyone. Insurers might disagree that the intensive, interdisciplinary approach is medically necessary for some patients or simply not cover the program’s billing codes, he said. Mayo’s insurance team sometimes advocates on patients’ behalf if they’re good candidates for treatment, but success isn’t assured.

Mayo’s program isn’t the only one to address the emotional, social and psychological aspects of pain, and other programs also focus on reducing patients’ reliance on addictive medications to manage their pain. But as the nation weathers an opioid epidemic, there are too few programs like these around the country to address the need, Gilliam said.

Gilliam, a clinical psychologist with a specialty in behavioral pain management, talked with me about the program.

The transcript has been condensed and edited for clarity.

Q: How do pain medications work? By blunting the pain?

Wesley Gilliam, the clinical director of the Mayo Clinic’s pain rehabilitation center, says the use of medication and relaxation exercises can help relieve pain. (Courtesy of the Mayo Clinic)

They blunt some of the pain. Opioids are very effective for acute problems, but they were never designed to be used chronically. They’re not effective in the long term.

Opioids are central nervous system depressants. They soothe people who are in distress. Many people aren’t demonstrating improved functioning when they take opioids; it’s calming their nerves. It’s chemical coping.

Q: In treating pain, does it matter what’s causing it or how severe it is?

Pain is pain. The fundamental approach to self-managing it doesn’t change based on the cause or severity of the pain.

Q: How does someone wind up at a program like yours?

Virtually all of our patients have tried and exhausted primary and secondary treatment options for pain.

[In] primary care, a patient comes in with a complaint, and a treatment plan is developed. It generally involves encouraging the patient to be active, to stretch, maybe the doctor initiates a non-opioid medication like a non-steroidal anti-inflammatory (NSAID) or an antidepressant.

If the patient continues to complain of chronic pain, the primary care provider will step up to level two and refer someone to a neurologist or maybe a pain psychologist or pain anesthesiologist.

If patients don’t respond, they start to think about step three, which is a pain program like Mayo.

Q: How does the Mayo program work?

People come to us every weekday from 8 a.m. to 4 p.m. for three weeks.

We don’t take a medical approach. It’s a biopsychosocial approach, [which] acknowledges not only the biological aspect of pain, but also recognizes that psychological and social variables contribute to how people experience pain.

That is not to say that pain is imagined, but rather how people experience pain is influenced by mood, anxiety and how that person’s environment responds to the person’s symptoms.

A more medical approach tends to focus on targeting and eliminating symptoms at the expense of the recognition of individual differences.

Q: What does that mean for the patient who’s in pain?

People need to accept that they have pain and focus on their quality of life. Some approaches reinforce in patients that the only way you can function is if you reduce your pain, as measured on a pain scale from zero to 10.

We focus on how to get you back into your life by focusing on function instead of eliminating symptoms and pain. When I refer to functioning, I mean getting back into important areas of your life such as work, social activities and recreation. If you’re waiting for pain to go away, you’re never going to get back into your life. When that happens, people get despondent, they get depressed.

Q: So how do you help people manage it?

When you’re in chronic pain and it’s poorly managed, the nervous system can get out of whack. Your body behaves as if it’s under stress all the time, even when it’s not. Your muscles may be tense and your heart and breathing rates elevated, among other things.

With meditation and relaxation exercises, we’re trying to teach people to learn to relax their bodies and hopefully kick in a relaxation response.

If I have low-back pain, for example, during periods of stress muscular tension is going to exacerbate the pain in my back. We focus on helping people to disengage from their symptoms.

By learning to relax in response to stress, muscular tension can be diminished and the experience of pain eased. This doesn’t require a medication or a procedure, just insight and implementation of a relaxation skill.

Relaxation/meditation training is one component of a much broader treatment package. All aspects of our treatment — cognitive techniques for managing mood, anxiety and anger, physical therapy, occupational therapy — are all designed to settle the nervous system.

Q: Does insurance typically cover the program?

Insurance companies may want to see patients complete more conservative treatment approaches before approving an interdisciplinary pain rehabilitation program like ours.

There are patients whose policies don’t cover our billing codes. If we deem a patient a good candidate, we’ll write letters saying they should be accepted.

There are a very select few who have paid out-of-pocket for our program. This is a significant minority, however. The program can cost up to $40,000 for someone with other complicated medical problems in addition to chronic pain.

There are studies that show these programs do save money over the long term in health care costs and reduced health care utilization.

If we’re going to manage this chronic pain problem, we have to look at it for what it is: multifaceted. You can’t just treat the symptom, you have to treat the whole person.

ERs Learn How To Protect A Vulnerable Population

KFF Health News, August 28, 2017

Because visits to the emergency room may be the only time an older adult leaves the house, staff in the ER can be a first line of defense.

This article first appeared August 28, 2017 on Kaiser Health News.

By Barbara Sadick

Abuse often leads to depression and medical problems in older patients — even death within a year of an abusive incident.

Yet, those subjected to emotional, physical or financial abuse too often remain silent. Identifying victims and intervening poses challenges for doctors and nurses.

Because visits to the emergency room may be the only time an older adult leaves the house, staff in the ER can be a first line of defense, said Tony Rosen, founder and lead investigator of the Vulnerable Elder Protection Team (VEPT), a program launched in April at the New York-Presbyterian Hospital/Weill Cornell Medical Center ER.

The most common kinds of elder abuse are emotional and financial, Rosen said, and usually when one form of abuse exists, so do others. According to a New York study, as few as 1 in 24 cases of abuse against residents age 60 and older were reported to authorities.

The VEPT program — initially funded by a small grant from The John A. Hartford Foundation (a Kaiser Health News funder) and now fully funded by the Fan Fox and Leslie R. Samuels Foundation — includes Presbyterian Hospital emergency physicians Tony Rosen, Mary Mulcare and Michael Stern. These three doctors and two social workers take turns being on call to respond to signs of elder abuse. Also available when needed are psychiatrists, legal and ethical advisers, radiologists, geriatricians and security and patient-services personnel.

“We work at making awareness of elder abuse part of the culture in our emergency room by training the entire staff in how to recognize it,” said Rosen. It’s easy for the ER staff to alert the VEPT team and begin an investigation, he said.

A doctor interviews the patient and conducts a head-to-toe physical exam looking for bruises, lacerations, abrasions, areas of pain and tenderness. Additional testing is ordered if the doctor suspects abuse.

“Unlike with child abuse victims, where there is a standard protocol in place for screening, there is no equivalent for the elderly, but we have designed and are evaluating one,” said Rosen.

The team looks for specific injuries. For example, radiographic images show old and new fractures, which suggest a pattern of multiple traumatic events. Specific types of fractures may indicate abuse, such as midshaft fractures in the ulna, a forearm bone that can break when an older adult holds his arm in front of his face to protect himself.

When signs of abuse are found but the elder is not interested in cooperating with finding a safe place or getting help, a psychiatrist is asked to determine if that elder has decision-making capacity. The team offers resources but can do little more if the patient isn’t interested. They would have to allow the patient to return to the potentially unsafe situation.

Patients who are in immediate danger and want help or are found not to have capacity may be admitted to the hospital and placed in the care of a geriatrician until a solution can be found. Unlike with children and Child Protective Services, Adult Protective Services won’t become involved until a patient has been discharged, so hospitalization can play an important role in keeping older adults safe.

During the first three months of the program, more than 35 elders showed signs of abuse, and a large percentage of them were later confirmed to be victims. Changes in housing or living situations were made for several of them.

“It’s difficult to identify and measure appropriate outcomes for elder abuse victims, because each patient may have different care goals,” said Rosen, “but we are working on making a case that detection of elder abuse and intervention in the ER will improve the patients’ lives. We also hope to show that it will save money, because when an elder is in a safe place, expensive, frequent trips to the ER may no longer be needed.”

The team’s ultimate goal is to optimize acute care for these vulnerable victims and ensure their safety. They plan to work at continually tweaking VEPT to improve the program and to connect to emergency medical, law enforcement and criminal justice services. Eventually, they hope to help other emergency departments set up similar programs.

CA Panel Tackles Health Worker Shortage

KFF Health News, August 24, 2017

Health and education leaders across California have joined forces with business and labor leaders to address workforce shortages in health care. The new group aims to create a blueprint for policymakers.

This article first appeared August 23, 2017 on Kaiser Health News.

By Anna Gorman

Health and education leaders across California have joined forces with business and labor leaders to address workforce shortages in health care. The new group aims to create a blueprint for policymakers.

The California Future Health Workforce Commission, unveiled Wednesday, includes two dozen representatives from businesses, organized labor, schools and hospitals. It will meet throughout the year to discuss the state’s current and future health staffing needs and suggest ways to meet them. Its members hope their findings will lead to new policies and greater investment in training health care professionals. They also hope their recommendations will help other states grappling with similar problems.

Ensuring adequate health care staffing is increasingly important because more Californians are insured and schools cannot produce physicians, nurses and other providers fast enough to serve them, said Jeff Oxendine, a dean at the University of California-Berkeley’s School of Public Health and co-director of the commission.

A lack of qualified professionals can also drive health care costs higher by heightening the demand for their services.

The commission plans to focus on three areas: primary care, mental health and the aging population.

“We have a greater demand for health services now,” Oxendine said. “With the aging, increased diversity and the growth of the population, that is only going to put more strain on the system.”

California’s health care staffing shortages are well documented and projected to widen as the population grows and physicians retire. The state will lack about 4,700 primary care doctors by 2025, according to a recent report by the Healthforce Center at University of California-San Francisco. The Central Valley, Central Coast and southern border areas will be hardest hit, according to the report.

To ease the shortage of primary care physicians, for example, medical schools could accelerate training so students could graduate faster. To help seniors age in their communities rather than in nursing homes, the state could ensure that home care workers earn more than the current average of about $11 an hour.

“Those who provide this kind of care are for the most part paid a wage that doesn’t particularly command long-term job loyalty,” said Kevin Barnett, senior investigator at the Public Health Institute and co-director of the commission. “Looking at the demographics, we have to come to terms very quickly with that.”

Barnett also cited a growing need for more people to work outside the clinical setting, helping patients with housing, food, transportation and other services that can affect their health.

Many areas, particularly in rural parts of the state, also do not have enough psychiatrists and other behavioral health providers to serve their communities. That creates a burden for patients who may have to travel long distances for mental health care or substance abuse treatment.

“We still have a ways to go to ensure timely access to quality [behavioral health] services, particularly for our Medicaid populations,” Barnett said.

In addition, the commission plans to address the lack of diversity among health workers. Latinos make up nearly 40 percent of the population but only 7 percent of doctors and 8 percent of nurses are Latino, according to the Medical Board of California.

Informing young people from underserved areas about health careers and providing opportunities to pursue them could help with recruitment and retention of a more diverse workforce, Oxendine said.

Health employers consider workforce sufficiency to be a “business imperative,” Oxendine said. Increased competition for a shrinking pool of medical professionals drives up costs, he said.

One of the commissioners, physician Hector Flores, said one of his priorities is to examine whether health care workers can provide services that are better, faster and cheaper. One way to do that could be to have more community health workers and medical assistants working alongside doctors and nurse practitioners, he said.

“Team-based care is not only better and friendlier for patients, but it also reduces costs overall,” said Flores, chairman of the family practice department at White Memorial Medical Center in Los Angeles.

University of California president Janet Napolitano and Dignity Health president Lloyd Dean will co-chair the commission, which is scheduled to hold its first meeting next month and plans to issue research and recommendations throughout the year for state legislators, schools, health care employers and others.

Four organizations are funding the project: The California Endowment, California Health Care Foundation, The California Wellness Foundation and The Blue Shield of California Foundation. (Kaiser Health News, which produces California Healthline, has received support from each of these organizations.)

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

‘Quantum Leap’ In Cost

‘Breakthrough’ Leukemia Drug Also Portends ‘Quantum Leap’ In Cost

KFF Health News, August 23, 2017

The Novartis cancer drug has the potential to be one of the most expensive oncology drugs ever sold. Soaring prices for cancer drugs have led many patients to cut back on treatment.

This article first appeared August 23, 2017 on Kaiser Health News.

By Liz Szabo

When doctors talk about a new leukemia drug from Novartis, they ooze enthusiasm, using words like “breakthrough,” “revolutionary” and “a watershed moment.”

But when they think about how much the therapy is likely to cost, their tone turns alarmist.

“It’s going to cost a fortune,” said Dr. Ivan Borrello at Johns Hopkins Sidney Kimmel Comprehensive Cancer Center in Baltimore.

“From what we’re hearing, this will be a quantum leap more expensive than other cancer drugs,” said Leonard Saltz, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center in New York.

Switzerland-based Novartis hasn’t announced a price for the medicine, but British health authorities have said a price of $649,000 for a one-time treatment would be justified given the significant benefits.

The cancer therapy was unanimously approved by a Food and Drug Administration advisory committee in July, and its approval seems all but certain.

The treatment, CTL019, belongs to a new class of medications called CAR T-cell therapies, which involve harvesting patients’ immune cells and genetically altering them to kill cancer. It’s been tested in patients whose leukemia has relapsed in spite of the best chemotherapy or a bone-marrow transplant.

The prognosis for these patients is normally bleak. But in a clinical trial, 83 percent of those treated with CAR T-cell therapy — described as a “living drug” because it derives from a patient’s own cells — have gone into remission.

CAR T cells have been successful only in a limited number of cancers, however, and are being suggested for use as a last resort when all else has failed. As a result, only a few hundred patients a year would be eligible for them, at least initially, said Dr. J. Leonard Lichtenfeld, deputy chief medical officer for the American Cancer Society.

The FDA is scheduled to decide on approval by Oct. 3. The agency is also considering a CAR T-cell therapy from Kite Pharma.

A third company, Juno Therapeutics, halted the development of one its CAR T-cell therapies after five patients died from complications of the treatment.

Rather than wait for Novartis to announce a price, an advocacy group called Patients for Affordable Drugs has launched a pre-emptive strike, asking to meet with company officials to discuss a “fair” price for the therapy. The Novartis drug has the potential to be one of the most expensive drugs ever sold, said David Mitchell, the patients group’s president, who has been treated for multiple myeloma, a blood cancer, since 2010. (The Laura and John Arnold Foundation, which provides some funding for Kaiser Health News, supports Patients for Affordable Drugs.)

“Many people with cancer look forward with great hope to the potential of your new drug,” Mitchell wrote in a letter to Novartis. “But drugs don’t work if patients can’t afford them.”

Cancer drugs today routinely cost more than $100,000 a year. A combination therapy for melanoma sells for $250,000. Such prices are particularly outrageous, given that taxpayers fund many drugs’ early research, Mitchell said.

The federal government spent more than $200 million over two decades to support the basic research into CAR T-cell therapy, long before Novartis bought the rights.

The patients group urged Novartis to charge no more for the drug in the U.S. than in other developed countries.

Novartis has agreed to meet with the patients group. In a statement, Novartis said the company is “carefully considering the appropriate price for CTL019, taking into consideration the value that this treatment represents for patients, society and the healthcare system, both near-term and long-term.”

Novartis made a significant investment in CAR T-cell therapy, according to the statement.

“We employ hundreds of people around the world who work on CAR-Ts, we are conducting ongoing U.S. and global clinical trials, and have developed a sophisticated, FDA-validated manufacturing site and process for this personalized therapy.”

Soaring prices for cancer drugs have led many patients to cut back on treatment or skip pills, a recent Kaiser Health News analysis showed.

The effect of CAR T-cell therapies on overall health costs would initially be relatively small, because it would be used by relatively few people, Lichtenfeld said.

Health systems and insurers may struggle to pay for the treatment, however, if the FDA approves it for wider use, Lichtenfeld said. Researchers are studying CAR T-cells in a number of cancers. So far, the technology seems more effective in blood cancers, such as leukemias and lymphomas.

Hidden costs could further add to patients’ financial burdens, Borrello said.

Beyond the cost of the procedure, patients would need to pay for traditional chemotherapy, which is given before CAR T cell therapy to improve its odds of success. They would also have to foot the bill for travel and lodging to one of the 30 to 35 hospitals in the country equipped to provide the high-tech treatment, said Dr. Prakash Satwani, a pediatric hematologist at New York-Presbyterian/Columbia University Medical Center, which plans to offer the therapy.

Because patients can develop life-threatening side effects weeks after the procedure, doctors will ask patients to stay within two hours of the hospital for up to a month. In New York, even budget hotels cost more than $200 a night — an expense not typically covered by insurance. Patients who develop a dangerous complication, in which the immune system overreacts and attacks vital organs, might need coverage for emergency room care, as well as lengthy stays in the intensive care unit, Satwani said.

Doctors don’t yet know what the full range of long-term side effects will be. CAR T-cell therapies can damage healthy immune cells, including the cells that produce the antibodies that fight disease. Some patients will need long-term treatments with a product called intravenous immunoglobulin, which provides the antibodies that patients need to prevent infection, Lichtenfeld said.

Saltz, an oncologist who has long spoken out about high drug prices, said he applauded the patients group’s efforts. But he said he doubts their efforts will persuade Novartis to set a reasonably affordable price.

“I’m not optimistic that this will have much effect on the company,” said Saltz. “There’s no market pressure for the company to respond to.”

High drug prices don’t just hurt patients, Saltz said. They also drive up insurance premiums for everyone.

“They affect each and every one of us,” he said, “because these costs will be paid by anyone who has any kind of insurance coverage.”

Pages