Severe Shortage Of Home Health Workers Robs Thousands Of Proper Care

KFF Health News, April 26, 2017

This article first appeared April 26, 2017 on Kaiser Health News.

By Judith Graham 

The emerging crisis is driven by low wages — around $10 an hour, mostly funded by state Medicaid programs — and a shrinking pool of workers willing to perform this physically and emotionally demanding work

Acute shortages of home health aides and nursing assistants are cropping up across the country, threatening care for people with serious disabilities and vulnerable older adults.

In Minnesota and Wisconsin, nursing homes have denied admission to thousands of patients over the past year because they lack essential staff, according to local long-term care associations.

In New York, patients living in rural areas have been injured, soiled themselves and gone without meals because paid caregivers aren’t available, according to testimony provided to the state Assembly’s health committee in February.

In Illinois, the independence of people with severe developmental disabilities is being compromised, as agencies experience staff shortages of up to 30 percent, according to a court monitor overseeing a federal consent decree.

The emerging crisis is driven by low wages — around $10 an hour, mostly funded by state Medicaid programs — and a shrinking pool of workers willing to perform this physically and emotionally demanding work: helping people get in and out of bed, go to the bathroom, shower, eat, participate in activities, and often dealing with challenging behaviors.

It portends even worse difficulties to come, as America’s senior citizen population swells to 88 million people in 2050, up from 48 million currently, and requires more assistance with chronic health conditions and disabilities, experts warn.

“If we don’t turn this around, things are only going to get worse” said Dr. David Gifford, senior vice president of quality and regulatory affairs for the American Health Care Association, which represents nursing homes across the U.S.

“For me, as a parent, the instability of this system is terrifying,” said Cheryl Dougan of Bethlehem, Pa., whose profoundly disabled son, Renzo, suffered cardiac arrest nearly 19 years ago at age 14 and receives round-the-clock care from paid caregivers.

Rising Demand, Stagnant Wages

For years, experts have predicted that demand for services from a rapidly aging population would outstrip the capacity of the “direct care” workforce: personal care aides, home health aides and nursing assistants.

The U.S. Bureau of Labor Statistics estimates an additional 1.1 million workers of this kind will be needed by 2024 — a 26 percent increase over 2014. Yet, the population of potential workers who tend to fill these jobs, overwhelmingly women ages 25 to 64, will increase at a much slower rate.

After the recession of 2008-09, positions in Medicaid-funded home health agencies, nursing homes and community service agencies were relatively easy to fill for several years. But the improving economy has led workers to pursue other higher-paying alternatives, in retail services for example, and turnover rates have soared.

At the same time, wages for nursing assistants, home health aides and personal care aides have stagnated, making recruitment difficult. The average hourly rate nationally is $10.11 — a few cents lower than a decade ago, according to PHI, an organization that studies the direct-care workforce. There is a push on now in a handful of states to raise the minimum to $15 an hour.

Even for-profit franchises that offer services such as light housekeeping and companionship to seniors who pay out-of-pocket are having problems with staffing.

“All the experienced workers are already placed with families. They’re off the market,” said Carrie Bianco, owner of Always Best Care Senior Services, which is based in Torrance, Calif., with franchises in 30 states.

Finding new employees was so difficult that Bianco started her own 14-week training program for caregivers nine months ago. To attract recruits, she ran ads targeting women who had left the workforce or been close to their grandparents. In exchange for free tuition, graduates must agree to start working for her agency.

“There’s much more competition now — a lot of franchises have opened and people will approach our workers outside our building or in the lobby and ask if they want to come work for them,” said Karen Kulp, president of Home Care Associates of Philadelphia.

Hardest to cover in Kulp’s area are people with disabilities or older adults who live at some distance from the city center and need only one to two hours of help a day.  Workers prefer longer shifts and less time traveling between clients, so they gravitate to other opportunities and “these people are not necessarily getting service,” she said.

It isn’t possible to document exactly how common these problems are nationally. Neither states nor the federal government routinely collect information about staff vacancy rates in home care agencies or nursing homes, turnover rates or people going without services.

“If we really want to understand what’s needed to address workforce shortages, we need better data,” said Robert Espinoza, vice president of policy at PHI.

Hard Times In Wisconsin

Some of the best data available come from Wisconsin, where long-term care facilities and agencies serving seniors and people with disabilities have surveyed their members over the past year.

The findings are startling. One of seven caregiving positions in Wisconsin nursing homes and group homes remained unfilled, one survey discovered; 70 percent of administrators reported a lack of qualified job applicants. As a result, 18 percent of long-term facilities in Wisconsin have had to limit resident admissions, declining care for more than 5,300 vulnerable residents.

“The words ‘unprecedented’ and ‘desperate’ come to mind,” said John Sauer, president and chief executive of LeadingAge Wisconsin, which represents not-for-profit long-term care institutions. “In my 28 years in the business, this is the most challenging workforce situation I’ve seen.”

Sauer and others blame inadequate payments from Medicaid — which funds about two-thirds of nursing homes’ business — for the bind. In rural areas, especially, operators are at the breaking point.

“We are very seriously considering closing our nursing facility so it doesn’t drive the whole corporation out of business,” said Greg Loeser, chief executive of Iola Living Assistance, which offers skilled nursing, assisted living and independent living services in a rural area about 70 miles west of Green Bay.

Like other short-staffed operators, he’s had to ask employees to work overtime and use agency staff, increasing labor costs substantially. A nearby state veterans home, the largest in Wisconsin, pays higher wages, making it hard for him to find employees. Last year, Iola’s losses on Medicaid-funded residents skyrocketed to $631,000 — an “unsustainable amount,” Loeser said.

Wisconsin Gov. Scott Walker has proposed a 2 percent Medicaid increase for long-term care facilities and personal care agencies for each of the next two years, but that won’t be enough to make a substantial difference, Loeser and other experts say.

The situation is equally grim for Wisconsin agencies that send personal care workers into people’s homes. According to a separate survey in 2016, 85 percent of agencies said they didn’t have enough staff to cover all shifts, and 43 percent reported not filling shifts at least seven times a month.

Barbara Vedder, 67, of Madison, paralyzed from her chest down since a spinal cord injury in 1981, has witnessed the impact firsthand. Currently, she qualifies for 8.75 hours of help a day, while her husband tends to her in the evening.

“It’s getting much, much, much more difficult to find willing, capable people to help me,” she said. “It’s a revolving door: People come for a couple of months, maybe, then they find a better job or they get pregnant or they move out of state. It’s an endless state of not knowing what’s going to happen next — will somebody be around to help me tomorrow? Next month?”

When caregivers don’t show up or shifts are cut back or canceled, “I don’t get proper cleaning around my catheter or in my groin area,” Vedder continued. “I’ll skip a meal or wait later several hours to take a pill. I won’t get my range-of-motion exercises, or my wheelchair cushion might slip out of place and I’ll start getting sore. Basically, I start losing my health.”

Debra Ramacher and her husband have been unable to find paid caregivers since June 2015 for daughter Maya, 20, and son Michael, 19, both of whom have cerebral palsy, epilepsy and other significant disabilities. The family lives in New Richmond in western Wisconsin, about 45 minutes from the Minneapolis-St. Paul metropolitan area.

“At least three agencies told me they’ve stopped trying to hire personal care aides. They can’t find anybody and it costs them money to advertise,” said Ramacher, executive director of Wisconsin Family Ties, an organization for families with children with emotional, behavioral and mental disorders.

“It’s incredibly stressful on all of us, living with this kind of uncertainty,” she said.

Every few months, Ramacher tries to find caregivers on her own by putting ads up on Craigslist, in local newspapers and on job boards.

“We get a few bites,” she said. “Most recently, two people came and interviewed. One never got back to us; the other got a better job that paid more.”

In the meantime, she and her husband are being paid by Medicaid to look after Maya and Michael.

“We don’t want to be the caregivers; we want to have our own life,” Ramacher said. “But we don’t have any option.”

Reluctant Patients, Hispanic Men Pose A Costly Challenge To The Health System

KFF Health News, April 25, 2017

This article first appeared April 25, 2017 on Kaiser Health News.

By Michael Anft 

Women across all races are more likely to seek care than men. But the gender gap in the Hispanic community is especially troubling to health care providers.

BALTIMORE — Peter Uribe left Chile at 21 with his wife and 2-year-old daughter, landing in Baltimore and finding steady work in construction. His social life revolved around futbol, playing “six or seven nights a week in soccer tournaments,” he said.

A couple of years after his arrival, he broke his foot during a game and afraid of the cost, didn’t seek medical care.

“Some of my family warned me that if I went to the hospital and couldn’t pay the bill, I’d get a bad credit record,” said Uribe, 41, who made about $300 a week and had no health insurance. “I wanted to buy a car or a house someday.” Instead, he hobbled through workdays and stayed off the field for three years; the residual pain is sometimes disabling, even two decades later.

For reasons both economic and cultural, Hispanic men are loath to interact with the health system. Women across all races are more likely to seek care than men. But the gender gap in the Hispanic community is especially troubling to health care providers. Studies show that Latino men are much less likely than Latinas to get treatment.

That is true even though Hispanic men are more likely than non-Hispanic whites to be obese, have diabetes or have high blood pressure. Those who drink tend to do so heavily, contributing to the group’s higher rates of alcoholic cirrhosis and deaths from chronic liver disease. Many take risky jobs such as construction workers and laborers, and are more likely to die from on-the-job injuries than other workers, government data show.

Hispanics’ share of the population is expected to widen from nearly a fifth now to a quarter by 2045. As that number grows, researchers worry that the nation could face costly consequences as long-ignored conditions lead to serious illness and disability.

“It could literally break the health care system,” said José Arévalo, board chairman of Latino Physicians of California, which represents Hispanic doctors and others who treat Latinos.

And now, some medical professionals fear the effects of President Donald Trump’s crackdown on illegal immigrants.

“When the community faces this kind of stress, I worry that people will do unhealthy things, like abuse alcohol, to deal with it,” said Kathleen Page, co-director of Centro SOL, a health center at Johns Hopkins Bayview Medical Center, and founder of the city’s Latino HIV Outreach Program. “That means they may not work as much,” she added. “They’ll have less money, which means they’re less likely to seek care.”

Welcomed by Baltimore officials, immigrants have driven the city’s Hispanic population, tripling it to 30,000 since 2000.

Here, as elsewhere, evidence suggests that for many Hispanic men, seeking health care is an extraordinary event. Hospital data show they are more likely than Hispanic women, white women and white men to go to the emergency room as their primary source of treatment — a sign that they wait until they’ve no choice but to get help.

Some care providers say medical institutions haven’t done enough to keep Hispanic men healthy, or to persuade them to get regular exams.

“There’s been an ongoing need for institutions to become more culturally attuned and aware of bias,” said Elena Rios, president of the National Hispanic Medical Association, which represents the nation’s 50,000 Latino physicians.

There are some significant differences in health risk and illness rates among Hispanic subgroups — Puerto Ricans are more likely to be smokers, for example. Compared with Hispanics born in the U.S., those born elsewhere have much lower rates of cancer, heart disease and high blood pressure. Overall, Hispanics live longer than whites.

But these advantages may be dissipating as Latinos become Americanized and adopt unhealthy habits such as smoking and diets high in fatty, processed foods.

“I tell people we live longer and suffer,” said Jane Delgado, a clinical psychologist and Cuban-American who serves as president of the National Alliance for Hispanic Health.

Researchers who investigate gaps in cancer testing have found that all ethnic groups and genders have seen a decrease in late-stage colon cancer diagnoses and deaths in recent years — except Hispanic men, who get screened at the lowest rates of any race or ethnic group.

Often, health problems arise after immigrants come up against an insurance barrier. A few years after Jose Cedillo came to Baltimore from Honduras, the 41-year-old cook noticed his legs were often numb or painful. Worried about finances, he eschewed treatment and continued to work, before finally going to a clinic where he was diagnosed with diabetes.

In the seven years since, his health has so deteriorated he can’t work, is frequently homeless and spends long stints in the hospital. As an immigrant who came to the U.S. illegally, he is not eligible for government-paid insurance or disability payments. And he can’t afford medicine. Instead, he said, “I’ll drink alcohol to numb the pain.”

Part of the problem is that Spanish speakers are underrepresented among medical professionals. After arriving here, Uribe’s family members frequently brought along an English-speaking nephew or niece when they could afford to see doctors. Otherwise, “we’d travel a long ways to find a doctor who spoke Spanish,” he said.

Hospitals frequently lack cultural understanding and bilingual staffing, administrators admit. Though Latinos make up nearly 20 percent of the population, only 5 percent of physicians and 7 percent of registered nurses are Hispanic. That gap has widened as more Hispanics have come to this country during the past three decades, according to a UCLA study released in 2015.

“Too often, people don’t understand what you’re saying, they don’t know what you’re going to charge them, what dietary restrictions you might place upon them,” said James Page, vice president for diversity at Johns Hopkins Medicine. “It creates a trust issue for Hispanics. We’ve got to get better at serving them.”

That is particularly true in mental health. Only 1 percent of psychologists in the U.S. are Hispanic, meaning that Spanish-speaking men who do seek therapy will probably struggle to find it.

In Baltimore, there is only one Spanish-language support group for men who suffer from anxiety and depression, local psychologists and Latino advocates say. The city employs one Spanish-speaking substance abuse counselor. A small handful of bilingual social workers citywide offer reduced-rate counseling sessions, and only three psychiatrists offer therapy sessions conducted in Spanish.

For Peter Uribe, the key to maintaining his family’s health is getting help paying for care. His wife and brother both suffer from epileptic seizures, and his brother’s despondency caused Uribe to become depressed, he said. In 2015, he obtained insurance for his family through a charity program. With the help of now-affordable medicines, his wife’s seizures waned, and he sought help for chronic depression. Since he now speaks English, finding counseling help is easier.

In January, after intervention from a Latino advocacy group, the charity renewed the Uribes’ policy for two years. Peter Uribe calls it a godsend:

“I honestly have no idea what we’d do without it.”

HHS, States Move To Help Insurers Defray Costs Of Sickest Patients

KFF Health News, April 25, 2017

This article first appeared April 25, 2017 on Kaiser Health News.

By Steven Findlay 

In March, HHS Secretary Tom Price sent a letter to all 50 governors soliciting proposals for reinsurance and other options to help cover the costs of consumers with expensive medical conditions.

As congressional Republicans’ efforts to repeal and replace the Affordable Care Act remain in limbo, the Trump administration and some states are taking steps to help insurers cover the cost of their sickest patients, a move that industry analysts say is critical to keeping premiums affordable for plans sold on the law’s online marketplaces in 2018.

This fix is a well-known insurance industry practice called reinsurance. Claims above a certain amount would be paid by the government, reducing insurers’ financial exposure and allowing them to set lower premiums.

Two states — Alaska and Minnesota — that have seen double-digit increases in ACA plan premiums this year have already moved to implement reinsurance policies, and Oklahoma is making plans to seek federal approval to set up a program. The Idaho legislature also recently passed a health care reinsurance law, and Maine is considering taking similar action.

The Trump administration has told other states they should consider doing the same. On March 13, Health and Human Services Secretary Tom Price sent a letter to all 50 governors soliciting proposals for reinsurance and other options to help cover the costs of consumers with expensive medical conditions.

Long an advocate for more state control of health insurance, Price said the administration is “seeking to empower states with new opportunities that will strengthen their health insurance markets.”

“This is one practical way the administration and states can work together to reduce premiums,” said Matthew Fiedler, a health policy specialist at the Brookings Institution. “While it’s the insurers who get the [support] directly, reductions in insurers’ claims costs ultimately translate into lower premiums for consumers.”

The focus on reinsurance comes as insurers must tell state and federal regulators no later than June 21 whether they will participate in the ACA’s marketplaces in 2018, and what plans they will offer at what price. This issue is separate from other highly publicized efforts underway to preserve federal payments to insurers to cover the costs of deductibles and copayments for low-income enrollees.

The federal law offered the security of a reinsurance program to insurers during its first three years. It helped reduce premiums among insurers by 10 percent in 2014, the last year the impact was analyzed, according to the Congressional Budget Office.

But the ACA reinsurance program ended this year. That helped drive premiums up by an average 22 percent across the country, raising concerns about the stability of the state-based marketplaces — also called exchanges — that provide insurance for people who don’t get it through work or public programs such as Medicare or Medicaid.

Now officials from both political parties are eyeing another part of the health law to help reprise and finance reinsurance programs.

In his letter, Price encouraged states to consider a special provision — known as a Section 1332 waiver — that went into effect this year and opens an avenue for them to pursue exemptions from ACA rules as long as the state plan maintains equivalent or better coverage levels for residents and doesn’t raise federal spending.

The Trump administration is betting that some states can set up reinsurance programs with federal funding. Federal spending on the program would be kept in check because the move will reduce government spending on tax credits that the law gives some low-income exchange customers to help defray the cost of premiums.

Need To ‘Stabilize Things Fast’ 

Consider deep-red Oklahoma. State officials have always held the ACA at arm’s length, leaving the insurance marketplace’s management and details to federal officials. But after rate increases averaging 76 percent this year — second only to Arizona — state officials set up a task force to explore how to put a brake on insurance premiums. The group last month published a multifaceted, 60-page plan for a waiver request. State officials say they will submit the plan to HHS later this year. Among the proposed first steps: reinsurance.

“We are in critical condition,” said Buffy Heater, chief strategy officer at the Oklahoma Health Care Authority. “Reinsurance is a way to stabilize things fast and attract additional insurers and more enrollees.”

Enrollment in the Oklahoma marketplace plan grew just 1 percent in 2017, to 146,300, after fairly robust growth in 2014 and 2015. Still, only about 30 percent of eligible Oklahomans are enrolled, and the number of uninsured in the state grew by 20,000 people in 2017.

Blue Cross Blue Shield of Oklahoma, the only carrier now selling on the state’s insurance marketplace, concurs with Heater’s assessment. The company declined through a spokesman to address state officials’ concern that the insurer was poised to exit the market in 2018. But Kurt Kossen, senior vice president at the Illinois-based Health Care Service Corp., which owns the Oklahoma Blues plan, said in a statement: “We agree reinsurance and well-designed high-risk pools help lower premiums and encourage greater competition.”

The two main health insurance lobbying groups in Washington — America’s Health Insurance Plans and the Blue Cross Blue Shield Association — also support efforts to offer reinsurance.

“We are very much in favor of using reinsurance to help insurers pay for the most expensive claims and to stabilize the marketplaces,” said Kristine Grow, senior vice president for communications at America’s Health Insurance Plans.  

Alaska And Minnesota Spurred To Act

Building on its state-funded reinsurance program for 2017, Alaska has asked the federal government to set aside $51.6 million for a reinsurance pool there for 2018. Lori Wing-Heier, director of the state’s division of insurance, said the state’s $55 million fund this year enabled Premera Blue Cross Blue Shield, the sole insurer left on the exchange, to reduce an expected premium increase of 40 percent to just 7.3 percent.  But the state said it cannot keep up the effort alone and needs federal funding.

In Minnesota, where premiums for marketplace plans spiked by around 50 percent this year, the Legislature enacted a law this month that establishes a $271 million reinsurance pool for that state’s troubled ACA marketplace for 2018 and 2019. The funds are contingent on getting the same waiver from the federal government that Alaska seeks and that Oklahoma plans to pursue.

Consumer complaints about the price hikes for 2017 pushed Minnesota to set up a $326 million fund to bail out insurers and help consumers who didn’t qualify for federal premium subsidies. That state-based reinsurance fund reduced premiums by about 25 percent, said Eileen Smith, a spokeswoman for the Minnesota Council of Health Plans. The state’s Department of Commerce has estimated that the 2018 reinsurance fund will reduce premiums by about 20 percent.

About 4 percent of Minnesotans — 235,000 people — get coverage in that state’s individual marketplace.

Back in Washington, D.C., some lawmakers have newfound fervor for insurance market stability and tools such as reinsurance. In their proposed bill to repeal and replace portions of the ACA, House Republicans included a 10-year, $100 billion fund to offset the burden of high-cost patients.

States would be allowed to establish reinsurance pools or set up separate high-risk insurance pools for patients with expensive medical conditions.

And even as the fate of the legislation to repeal the ACA remains uncertain, a group of Republicans in the House of Representatives this month sought to sweeten the pot with an additional $15 billion fund over nine years to help reimburse insurers for high-cost patients with certain preexisting conditions, such as cancer.

Democrats and health policy analysts immediately criticized this latest proposal.

“It’s not enough money to make a serious dent,” said Tim Jost, a professor of health law at Virginia’s Washington and Lee University and an expert on the health law. While the concept is sound, he said that the proposal is flawed because the House Republicans’ bill creates the need for it with “the other damaging changes it makes to the market.”

Jost, other policy analysts and consumer advocates also take issue with Republican proposals that appear to create equivalency between reinsurance and separate high-risk pools for people with preexisting conditions and high claims. In most states that have tried them, said Lynn Quincy, a health insurance specialist and senior policy analyst at Consumer Union, high-risk pools have failed to offer affordable coverage to people who need care the most.

“Reinsurance is the much preferred option,” Quincy said. “It doesn’t segregate sick people into a separate pool, and reinsurance has proved far more efficient and effective over the years.”

Health Care In America: An Employment Bonanza And A Runaway-Cost Crisis

KFF Health News, April 24, 2017

This article first appeared April 24, 2017 on Kaiser Health News.

By Chad Terhune 

Thirty-five percent of the nation’s job growth has come from health care since the recession hit in late 2007, the single-biggest sector for job creation.

In many ways, the health care industry has been a great friend to the U.S. economy. Its plentiful jobs helped lift the country out of the Great Recession and, partly due to the Affordable Care Act, it now employs 1 in 9 Americans — up from 1 in 12 in 2000.

As President Donald Trump seeks to fulfill his campaign pledge to create millions more jobs, the industry would seem a promising place to turn. But the business mogul also campaigned to repeal Obamacare and lower health care costs — a potentially serious job killer. It’s a dilemma: One promise could run headlong into the other.

“The goal of increasing jobs in health care is incompatible with the goal of keeping health care affordable,” said Harvard University economist Katherine Baicker, who sees advantages in trimming the industry’s growth. “There’s a lot of evidence we can get more bang for our buck in health care. We should be aiming for a health care system that operates more efficiently and effectively. That might mean better outcomes for patients and fewer jobs.”

But the country has grown increasingly dependent on the health sector to power the economy — and it will be a tough habit to break. Thirty-five percent of the nation’s job growth has come from health care since the recession hit in late 2007, the single-biggest sector for job creation.

Hiring rose even more as coverage expanded in 2014 under the health law and new federal dollars flowed in. It gave hospitals, universities and companies even more reason to invest in new facilities and staff.  Training programs sprang up to fill the growing job pool. Cities welcomed the development — and the revenue. Simply put, rising health spending has been good for some economically distressed parts of the country, many of which voted for Trump last year.

In Morgantown, W.Va., the West Virginia University health system just opened a 10-story medical tower and hired 2,000 employees last year. In Danville, Pa., the Geisinger Health System has added more than 2,200 workers since July and is trying to fill 2,000 more jobs across its 12 hospital campuses and a health plan. Out West, the University of the UCHealth system in Colorado expanded its Fort Collins hospital and is building three hospitals in the state.

In cities such as Pittsburgh, Cleveland and St. Louis, health care has replaced dying industries like coal and heavy manufacturing as a primary source of new jobs. “The industry accounts for a lot of good middle-class jobs and, in many communities, it’s the single-largest employer,” said Sam Glick, a partner at the Oliver Wyman consulting firm in San Francisco. “One of the hardest decisions for the new Trump administration is how far do they push on health care costs at the expense of jobs in health care.”

House Republicans, with backing from Trump, took the first swipe. Their American Health Care Act sought to roll back the current health law’s Medicaid expansion and cut federal subsidies for private health insurance. The GOP plan faltered in the House, but Republican lawmakers and the Trump administration are still trying to craft a replacement for Obamacare.

Neither the ACA nor the latest Republican attempt at an overhaul tackle what some industry experts and economists see as a serious underlying reason for high health care costs: a system bloated by redundancy, inefficiency and a growing number of jobs far removed from patient care.

Labor accounts for more than half of the $3.4 trillion spent on U.S. health care, and medical professionals from health aides to nurse practitioners are in high demand. But the sheer complexity of the system also has spawned jobs for legions of data-entry clerks, revenue-cycle analysts and medical billing coders who must decipher arcane rules to mine money from human ills.

For every physician, there are 16 other workers in U.S. health care. And half of those 16 are in administrative and other nonclinical roles, said Bob Kocher, a former Obama administration official who worked on the Affordable Care Act. He’s now a partner at the venture capital firm Venrock in Palo Alto, Calif.

“I find super-expensive drugs annoying and hospital market power is a big problem,” Kocher said. “But what’s driving our health insurance premiums is that we are paying the wages of a whole bunch of people who aren’t involved in the delivery of care. Hospitals keep raising their rates to pay for all of this labor.”

Take medical coders. Membership in the American Academy of Professional Coders has swelled to more than 165,000, up 10,000 in the past year alone. The average salary has risen to nearly $50,000, offering a path to the American Dream.

“The coding profession is a great opportunity for individuals seeking their first job, and it’s attractive to a lot of medical professionals burned out on patient care,” said Raemarie Jimenez, a vice president at the medical coding group. “There is a lot of opportunity once you’ve got a foot in the door.”

Some of these back-office workers wage battle every day in clinics and hospitals against an army of claims administrators filling up cubicles inside insurance companies. Overseeing it all are hundreds of corporate vice presidents drawing six-figure salaries.

Administrative costs in U.S. health care are the highest in the developed world, according to a January report from the Organization for Economic Cooperation and Development. More than 8 percent of U.S. health spending is tied up in administration while the average globally is 3 percent. America spent $631 for every man, woman and child on health insurance administration for 2012 compared with $54 in Japan.

America’s huge investment in health care and related jobs hasn’t always led to better results for patients, data show. But it has provided good-paying jobs, which is why the talk of deep cuts in federal health spending has many people concerned.

Linda Gonzalez, a 31-year-old mother of two, was among the thousands of enrollment counselors hired to help sign up Americans for health insurance as Obamacare rolled out in 2014. The college graduate makes more than $40,000 a year working at an AltaMed enrollment center, tucked between a Verizon Wireless store and a nail salon on a busy street in Los Angeles.

In her cramped cubicle, families pull up chairs and sort through pay stubs and tax returns, often relying on her to sort out enrollment glitches with Medicaid. As the sole breadwinner for her two children, ages 9 and 10, she counts on this job but isn’t sure how long it will last.

“A lot of people depend on this,” she said one recent weekday. “It’s something I do worry about.”

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

Conservatives’ Goal To Relax Mandatory Health Benefits Unlikely To Tame Premiums

KFF Health News, April 21, 2017

This article first appeared April21, 2017 on Kaiser Health News.

By Julie Rovner 

Without essential health benefits, “you would either have very crappy benefits without drugs or physicians or hospitalization, or you would have roughly the same costs,” says an actuary who worked in the Obama administration and served on the board of Massachusetts’ health exchange.

As House Republicans try to find common cause on a bill to repeal and replace the Affordable Care Act, they may be ready to let states make the ultimate decision about whether to keep a key consumer provision in the federal health law that conservatives say is raising insurance costs.

Those conservatives, known as the House Freedom Caucus, and members of a more moderate group of House Republicans, the Tuesday Group, are hammering out changesto the GOP bill that was pulled unceremoniously by party leaders last month when they couldn’t get enough votes to pass it. At the heart of those changes reportedly is the law’s requirement for most insurance plans to offer 10 specific categories of “essential health benefits.” Those include hospital care, doctor and outpatient visits and prescription drug coverage, along with things like maternity care, mental health and preventive care services.

The Freedom Caucus had been pushing for those benefits to be removed, arguing that coverage guarantees were driving up premium prices.

“We ultimately will be judged by only one factor: if insurance premiums come down,” Freedom Caucus Chairman Rep. Mark Meadows (R-N.C.) told The Heritage Foundation’s Daily Signal.

But moderates, bolstered by complaints from patients groups and consumer activists, fought back. And a brief synopsis leaked from the intraparty negotiations suggests that the compromise could be letting states decide whether to seek a federal waiver to change the essential health benefits.

“The insurance mandates are a primary driver of [premium] spikes,” wrote Meadows and Sen. Ted Cruz (R-Texas) in an op-ed in March.

But do those benefits drive increases in premiums? And would eliminating the requirement really bring premiums down? Health analysts and economists say probably not — at least not in the way conservatives are hoping.

“I don’t know what they’re thinking they’re going to pull out of this pie,” said Rebekah Bayram, a principal consulting actuary at the benefits consulting firm Milliman. She is the lead author of a recent study on the cost of various health benefits.

Opponents of the required benefits point to coverage for maternity care and mental health and substance abuse treatment as driving up premiums for people who will never use such services.

But Bayram said eliminating those wouldn’t have much of an impact. Hospital care, doctor visits and prescription drugs “are the three big ones,” she said. “Unless they were talking about ditching those, the other ones only have a marginal impact.”

John Bertko, an actuary who worked in the Obama administration and served on the board of Massachusetts’ health exchange, agreed: “You would either have very crappy benefits without drugs or physicians or hospitalization, or you would have roughly the same costs.”

Maternity care and mental health and substance abuse, he said, “are probably less than 5 percent” of premium costs.

Of course, requiring specific coverage does push up premiums to some extent. James Bailey, who teaches at Creighton University in Omaha, Neb., has studied the issue at the state level. He estimates that the average state health insurance mandate “raises premiums by about one-half of 1 percent.”

Those who want to get rid of the required benefits point to the fact that premiums in the individual market jumped dramatically from 2013 to 2014, the first year the benefits were required.

“The ACA requires more benefits that every consumer is required to purchase regardless of whether they want them, need them or can afford them,” Ohio Insurance Commissioner Mary Taylor said in 2013, when the state’s rates were announced.

But Bayram noted most of that jump was not due to the broader benefits, but to the fact that, for the first time, sicker patients were allowed to buy coverage. “The premiums would go down a lot if only very healthy people were covered and people who were higher risk were pulled out of the risk pool,” she said. (Some conservatives want to change that requirement, too, and let insurers charge sick people higher premiums.)

Meanwhile, most of the research that has been done on required benefits has looked at plans offered to workers by their employers, not policies available to individuals who buy their own coverage because they don’t get it through work or the government. That individual market is the focus of the current debate.

Analysts warn that individual-market dynamics differ greatly from those of the employer insurance market.

Bailey said he “saw this debate coming and wanted to write a paper” about the ACA’s essential health benefits. But “I very quickly realized there are all these complicated details that are going to make it very hard to figure out,” he said, particularly the way the required benefits work in tandem with other requirements in the law.

For example, said Bertko, prescription drugs can represent 20 percent of costs in the individual market. That’s far more than in the employer market.

Bayram said another big complication is that the required benefits do double duty. They not only ensure that consumers have a comprehensive package of benefits but enable other parts of the health law to work by ensuring that everyone’s benefits are comparable.

For example, the law adjusts payments to insurers to help compensate plans that enroll sicker-than-average patients. But in order to do that “risk adjustment,” she said, “all of the plans have to agree on some kind of package. So if you think of essential health benefits as an agreed-upon benchmark, I don’t know how they can get rid of that and still have risk adjustment.”

For Doctors, A Clamp Down On Visas Could Have An Uneven Effect In The U.S.

KFF Health News, April 21, 2017

By Michelle Andrews 

This article first appeared April21, 2017 on Kaiser Health News.

Research published in JAMA found that more than 2,100 U.S. employers were certified to fill nearly 10,500 physician jobs nationwide, in 2016. That represents 1.4 percent of the physician workforce overall.

Limiting the number of foreign doctors who can get visas to practice in the United States could have a significant impact on certain hospitals and states that rely on them, according to a new study.

The research, published online in JAMA this week, found that more than 2,100 U.S. employers were certified to fill nearly 10,500 physician jobs nationwide, in 2016. That represents 1.4 percent of the physician workforce overall. There were wide variations by state and employer, however.

Employers in New York, Michigan and Illinois accounted for the most H-1B visa applications for foreign physicians, nearly a third of the total. North Dakota, however, had the most applicants as a percentage of its physician workforce: 4.7 percent.

The top three employers that submitted applications for the most doctors through the visa program were William Beaumont Hospital in southeastern Michigan, with 470 physician applications, Bronx-Lebanon Hospital Center in New York City, with 213, and Cleveland Clinic foundation in Ohio, with 180.

“People underestimate the fragility of certain hospitals and their reliance on certain physicians for their functioning,” said study co-author Peter Kahn, who’s graduating from Albert Einstein College of Medicine in the Bronx this spring.

The H-1B visa program allows employers to hire highly skilled professionals from abroad to fill employment gaps in the U.S., typically in high-tech, science, engineering and math jobs. But hospitals use the program as well, often to recruit doctors to serve in rural or underserved urban areas. The number of visas is capped at 85,000 annually.

That could change. On Tuesday, President Donald Trump signed an executive order reiterating his administration’s priority to buy American goods and hire American workers. Among other things, it requires federal agencies to suggest reforms to the H-1B visa program to ensure the visas are awarded appropriately.

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.

With Drug Costs In Crosshairs, Health Firms Gave Generously To Trump’s Inauguration

KFF Health News, April 20, 2017

By Jay Hancock and Sydney Lupkin and Elizabeth Lucas 

This story was originally published on Kaiser Health News on April 19, 2017.

Drugmaker Pfizer gave $1 million to help finance the inauguration, according to documents filed with the Federal Election Commission. Amgen, another pharmaceutical company, donated $500,000. Health insurers Anthem, Centene and Aetna all gave six-figure contributions.

Facing acute risks to their businesses from Washington policymakers, health companies spent more than $2 million to buy access to the incoming Trump administration via candlelight dinners, black-tie balls and other inauguration events, new filings show.

Drugmaker Pfizer gave $1 million to help finance the inauguration, according to documents filed with the Federal Election Commission. Amgen, another pharmaceutical company, donated $500,000. Health insurers Anthem, Centene and Aetna all gave six-figure contributions.

They joined a surge of corporate donors from multiple industries to break inauguration-finance records even as then-President-elect Donald Trump promised to “drain the swamp” of Washington influence-peddling.

But the stakes for the health industry were especially high as the new administration prepared to take power.

Two weeks before Pfizer’s donation, Trump told Time magazine: “I’m going to bring down drug prices.” At the same time, one of his top goals was repealing Obamacare — the Affordable Care Act — and its billions in subsidies for insurance companies and hospitals.

Also writing checks for the inauguration were drugmaker Abbott Laboratories, drug wholesaler Caremark, insurer MetLife and Managed Care of North America, a dental benefits manager.

Trump’s inaugural committee raised $107 million, more than twice as much as for any previous presidential investiture. President Barack Obama’s 2009 inauguration held the previous record of $53 million.

Obama banned corporate donations that year and limited individual donations to $50,000 but accepted corporate grants for his 2013 inauguration.

No health company gave more to Trump’s event than Pfizer, whose profits for Lyrica, Prevnar 13 and other high-priced medicines could come under pressure if the Medicare program for seniors is allowed to negotiate on cost, as Trump has suggested.

Lyrica alleviates nerve and muscle pain. Prevnar 13 is a vaccine against pneumococcal pneumonia.

Along with several other pharma companies, Pfizer is the subject of a Justice Departmentinvestigation over donations to charities that help Medicare patients avoid copayments for expensive drugs.

Pfizer CEO Ian Read is also a vocal advocate of cutting corporate income taxes, which Trump has pledged to do. The Obama administration thwarted Pfizer’s $160 billion deal to move its legal residency to low-tax Ireland to merge with Botox maker Allergen.

Pfizer’s $1 million donation entitled it to four tickets to a “leadership luncheon” with “select Cabinet appointees and House and Senate leadership,” according to a solicitation brochure obtained and posted online by the Center for Public Integrity.

“As it has been the case with previous presidential inaugurations, we made a financial contribution to the 58th Presidential Inaugural Committee and a group of our senior leaders participated in various official events,” said Pfizer spokesperson Sharon Castillo. She declined to identify the executives.

Amgen’s inauguration gift of $500,000 was the second-biggest from a health care donor. The company makes Enbrel for arthritis and Epogen for anemia, among other drugs.

Amgen’s contribution bought it two tickets to “an intimate dinner” with then-Vice President-elect Mike Pence and his wife, Karen Pence. Amgen CEO Robert Bradway was among seven pharma executives who met with Trump in the White House on Jan. 31, although that wasn’t part of the inauguration package.

Amgen spokesperson Kelley Davenport declined to comment beyond describing the company as joining “numerous other donors from a diverse group of industries and individuals” supporting the event.

Pfizer also got entrée to the Pence inaugural dinner. Both companies had access to balls, receptions, luncheons, concerts and other events available to lesser donors.

Neither Pfizer, Amgen nor other large, health care donors to Trump’s inauguration made contributions to Obama’s 2013 inauguration, which did accept corporate money. Pfizer gave $250,000 to President George W. Bush’s 2005 inauguration.

The biggest health care corporate donor to Obama’s 2013 investiture was drugmaker Genentech, which gave $750,000, records show. The company did not contribute to Trump’s inauguration. “Prior to the 2016 election, we made a decision not to sponsor any inaugural activities for the foreseeable future,” said Genentech spokesperson Susan Willson.

Contributors for this year’s event also included insurer Anthem, one of the largest participants in the Affordable Care Act’s online marketplaces, and Centene, which also sells insurance plans through the online exchanges. Anthem gave $100,000 while Centene gave $250,000.

Both companies’ marketplace businesses depend on generous federal subsidies that would be jeopardized by an ACA repeal or other actions by the administration. Anthem has pressed the administration to preserve the subsidies and tighten rules for marketplace enrollment.

Anthem CEO Joseph Swedish was one of a group of insurance executives who met with Trump in February. Swedish met again with Trump in the White House last month, Modern Healthcare reported.

Centene, which manages state and federal Medicaid programs for low-income people in many states, also benefited from the ACA’s Medicaid expansion. Analysts see the company as especially vulnerable to a potential repeal of Obama’s health law.

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

Sen. Grassley Demands Scrutiny Of Medicare Advantage Plans

KFF Health News, April 19, 2017

By Fred Schulte 

The Iowa Republican has asked CMS officials to explain why they failed to collect nearly $125 million in potential overcharges identified at five Medicare Advantage plans audited in a single year.

Sen. Chuck Grassley (R-Iowa) wants federal health officials to tighten scrutiny of private Medicare Advantage health plans amid ongoing concern that insurers overbill the government by billions of dollars every year.

Grassley, the influential chairman of the Senate Judiciary Committee, has asked Centers for Medicare and Medicaid Services (CMS) officials to explain why they failed to collect nearly $125 million in potential overcharges identified at five Medicare Advantage plans audited in a single year.

In an April 17 letter to CMS Administrator Seema Verma, Grassley cited an article on alleged overcharges published in January by Kaiser Health News. The article said that Medicare had potentially overpaid five health plans $128 million in 2007, but under pressure from the insurance industry collected just $3.4 million and settled the cases.

“The difference in the assessment and the actual recovery is striking and demands an explanation,” Grassley wrote.

Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 18 million elderly and disabled people — about a third of those eligible for Medicare — at a cost to taxpayers approaching $200 billion a year. The plans also enjoy strong support in Congress.

Medicare is supposed to pay the health plans higher rates for sicker patients and less for people in good health using a formula called a risk score.

Yet CMS records reveal that billions of tax dollars are wasted annually partly because some health plans exaggerate how sick their patients are by inflating risk scores and boosting their payments improperly.

Grassley asked in his letter what steps CMS is taking “to ensure that insurance companies are not fraudulently altering risk scores” and how many audits are now being conducted.

“By all accounts, risk score gaming is not going to go away. Therefore, CMS must aggressively use the tools at its disposal to ensure that it is efficiently identifying fraud and subsequently implementing timely and fair remedies,” he wrote.

Grassley also noted that CMS needs to step up oversight audits because Medicare Advantage plans are expected to grow substantially in coming years.

“The use of these tools is all the more important as Medicare Advantage adds more patients and billions of dollars of taxpayer money is at stake,” Grassley’s letter said.

The Government Accountability Office, the watchdog arm of Congress, has sharply criticized CMS for its failure to ferret out overcharges and in April 2016 called for “fundamental improvements” in audits of Medicare Advantage plans. GAO also found that CMS has spent about $117 million on Medicare Advantage audits, but recouped just under $14 million in total.

Medicare Advantage plans have been the target of at least a half-dozen whistleblower lawsuits alleging patterns of overbilling and fraud. In March, the Justice Department joined one such suit against insurance giant UnitedHealth Group. The suit alleges that the health plan submitted claims for underpayments to the government, but ignored examples in which it had received too much money.

The audits disclosing the $128 million in overpayments to health plans were part of a cache of confidential CMS documents released through a Freedom of Information Act lawsuit filed by the Center for Public Integrity.

The CMS records identify the companies chosen for the initial Medicare Advantage audits as a Florida Humana plan, a Washington state subsidiary of United Healthcare called PacifiCare, an Aetna plan in New Jersey and an Independence Blue Cross plan in the Philadelphia area. The fifth one focused on a Lovelace Medicare plan in New Mexico, which has since been acquired by Blue Cross.

In the audits, CMS repeatedly found that the health plans couldn’t document their patients were as sick as the insurer had claimed.

For example, auditors couldn’t confirm that one-third of the diseases the health plans had been paid to treat actually existed, mostly because patient records lacked “sufficient documentation of a diagnosis.”

Overall, Medicare paid the wrong amount for nearly two-thirds of patients whose records were examined; all five plans were far more likely to charge too much than too little. For 1 in 5 patients, the overcharges were $5,000 or more for the year, according to the audits.

America’s Health Insurance Plans, an industry trade group, has denied that Medicare Advantage plans overcharge. The group argued in a June 2016 position paper that the auditing method used by CMS was “not yet stable and reliable.” The group also said that conducting audits “could disrupt the care being provided by plans that are working hard to meet the needs of their enrollees.”

Grassley cited reports by the Center for Public Integrity that improper payments to Medicare Advantage plans cost taxpayers as much as $70 billion from 2008 to 2013. He said that CMS’ estimate that it had overpaid the five health plans $128 million “appears low and could very well be just the tip of the iceberg.”

KHN’s coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation.

Can We Tax Away The Opioid Crisis?

KFF Health News, April 17, 2017

 

This article first appeared April 14, 2017 on Kaiser Health News.

By Pauline Bartolone

California lawmakers this month will consider legislation that would impose a tax on prescription opioids such as OxyContin and Norco to raise money for addiction treatment and prevention programs.

The proposal, introduced by California Assemblyman Kevin McCarty (D-Sacramento), would not levy the tax directly on consumers but rather on opioid manufacturers and wholesalers, who would pay 1 cent per milligram at the drug’s first point of sale.

Legislative analysts have not yet conducted a fiscal review of the measure, which would require a two-thirds majority vote to pass.

A similar federal opioid tax measure is being considered by Congress. It, too, is intended to create a fund to treat and prevent addiction. In addition, the Alaska State Legislature is considering a 1-cent-per-milligram opioid tax.

Nationally, the sale of prescription opioids, and overdoses from them, have nearly quadrupled since 1999, according to the U.S. Centers for Disease Control and Prevention (CDC). Almost 2 million people misused or were addicted to the painkiller medications as of 2014, the CDC reports.

California health officials say that the number of deaths from opioids has leveled off in the state, but that emergency departments are seeing a steady increase of overdoses. And some counties still have overdose-related deaths that are two to three times the national average, according to the California Department of Public Health.

Proponents of California’s opioid tax measure say the funding is necessary because the majority of people who abuse these drugs lack access to the care they need.

“We must do more to help these individuals find hope and sobriety,” said McCarty. “This plan will provide counties with critical resources needed to curb the deadly cycle of opioid and heroin addiction in California.”

In an interview with California Healthline, Rand Corp. economist David Powell said that while more funding would be useful to treat people addicted to opioids, it’s hard to predict whether the proposed tax would help prevent people from consuming the drugs in the first place.The Pharmaceutical Research and Manufacturers of America (PhRMA), a national trade association for drugmakers, opposes the California bill, saying that the industry is overtaxed and that the U.S. Drug Enforcement Agency already regulates opioids. Such a multifaceted social problem requires a comprehensive solution, PhRMA said, “rather than a narrow focus on one sector or aspect.”

Powell’s comments below have been edited for length and clarity.

Q: Would this proposed tax, in and of itself, reduce the prevalence of addiction to opioid painkillers?

My guess is that the taxes are going to end up being paid by health insurers in this case, including Medicaid and Medicare. … In general, people are going to be protected from the prescription drug taxes when purchasing the drugs, except that we’re all — whether we’re consumers of those drugs or not — going to have higher premiums.

Because the insurers are basically picking up the tax themselves, the price doesn’t change at all for consumers when they’re deciding whether or not to purchase more opioids. So it’s not going to reduce utilization that much.

Insurers could fight back and implement their own policies, like quantity limits or prior authorization, and it’s really hard to predict the benefits and costs of widespread implementation of policies like that.

Q: Can you say more about how people actually obtain opioids and whether you think the tax would reduce availability of them?

Most people who are using opioids for non-medical purposes report getting them from a friend or a relative — not from a doctor. The doctors are an important source as well, but there’s this medicine cabinet effect, which is pretty important.

The other big question here is, how do people get initiated into opioid use and abuse, and that’s something we really don’t know much about. How many people with opioid addiction problems started with a medical need for the drug versus how many started using them with little medical need? That determines whether this kind of policy makes sense or almost any policy makes sense. We’re a little bit blind at this point.

Q: Do you think having this pot of money for treatment and prevention of addiction would be beneficial in reducing overdoses?

That makes sense to me. There is a lot of research showing that treatment works. Having more access to substance abuse treatment centers does reduce all these harms, including overdoses. So the question is, do we want to do that regardless of whether you like the tax or not?

[In the federal bill], we’re talking about a billion dollars for substance abuse treatment centers and lots of other things. The best metric we have on the total annual economic cost of opioid abuse is $80 billion. That doesn’t include the deaths. Seems like $1 billion is a relatively small investment, with possible huge payoffs.

Q: What other policies would you recommend to prevent people from becoming addicted and to avoid overdoses?

Unfortunately, this is the part where the research is so new. We don’t really have a solid, “This is the most effective way to fight the opioid epidemic right now.” It sounds like a cop-out, but you have to take a comprehensive approach, and do a lot of things.

There’s been mixed evidence about whether prescription drug monitoring programs work, but there is some research that certain types of those programs are effective. So you want to have that, and you also want to increase drug treatment centers.

Q: Taxes on alcohol and tobacco have reduced consumption of those substances. Do you think taxing opioids is different?

In principle, they’re comparable. But the cost-sharing aspect, or the lack of cost-sharing — that the individual is not going to pay the full tax — is really the big difference.

The magnitudes are also really different. Cigarette taxes are really high. The opioid tax proposal is actually kind of small.

In Remote Idaho, A Tiny Facility Lights The Way For Stressed Rural Hospitals

KFF Health News, April 13, 2017

 

This article first appeared April 13, 2017 on Kaiser Health News.

By Anna Gorman April 13, 2017

How an Idaho hospital that serves a region with more bears than people is helping forge the future of American medicine.

ARCO, Idaho — Just before dusk on an evening in early March, Mimi Rosenkrance set to work on her spacious cattle ranch to vaccinate a calf. But the mother cow quickly decided that just wasn’t going to happen. She charged, all 1,000 pounds of her, knocking Rosenkrance over and repeatedly stomping on her. “That cow was trying to push me to China,” Rosenkrance recalls.

Dizzy and nauseated, with bruises spreading on both her legs and around her eye, Rosenkrance, 58, nearly passed out. Her son called 911 and an ambulance staffed by volunteers drove her to Lost Rivers Medical Center, a tiny, brick hospital nestled on the snowy hills above this remote town in central Idaho.

Lost Rivers has only one full-time doctor and its emergency room has just three beds — not much bigger than a summer camp infirmary. But here’s what happened to Rosenkrance in the first 90 minutes after she showed up: She got a CT scan to check for a brain injury, X-rays to look for broken bones, an IV to replenish her fluids and her ear sewn back together. The next morning, although the hospital has no pharmacist, she got a prescription for painkillers filled through a remote prescription service. It was the kind of full-service medical treatment that might be expected of a hospital in a much larger town.

Not so long ago, providing such high-level care seemed impossible at Lost Rivers. In fact, it looked as if there wouldn’t be a Lost Rivers at all. The 14-bed hospital serves all of Butte County, whose population of 2,501 (down from 2,893 in 2000) is spread over a territory half the size of Connecticut. Arco, the county’s largest town, has seen its population drop 16 percent since 2000, from 1,026 to 857 last year. “Bears outnumber people out here,” is how hospital CEO Brad Huerta puts it.

The medical center nearly shut its doors in 2013 due in large part to the declining population of the area it serves — almost becoming another statistic, another hospital to vanish from rural America. But then the hospital got a dramatic reboot with new management, led by Huerta, who secured financing to help pay for more advanced technology, upgraded facilities and expanded services. He also brought in more rotating specialists, started using telemedicine to connect the hospital to experts elsewhere and is now planning to open a surgery center and a long-term care rehabilitation wing. If Lost Rivers had closed, the alternative would have been hospitals in Idaho Falls or Pocatello, each more than an hour away across high-altitude prairie. Instead, “I don’t have to go across the desert for hardly anything,” said Rosenkrance, resting at the hospital the morning after the cow attack.

Rural hospitals are facing one of the great slow-moving crises in American health care. Across the U.S., they’ve been closing at a rate of about one per month since 2010 — a total of 78, or about 6 percent. About 14 percent of the U.S. population lives in rural counties, a proportion that has dropped as the number of urban dwellers grows. Declining populations mean a smaller base of patients and less revenue. And the hospitals are caught in a squeeze: Because many patients in the countryside are older and sicker, they require more intensive and often expensive care

Faced with these dramatic economic and demographic pressures, however, some hospitals are surviving — even thriving — by taking advantage of some of the most cutting-edge trends in health care. They are experimenting with telemedicine, using remote monitors to track patients and purchasing high-tech equipment to perform scans and other types of exams. And because many face physician shortages, they are partnering with universities and increasingly relying on nurse practitioners, paramedics and others to deliver care. In parts of rural Oregon and Washington, veterans can get counseling through a tele-mental health program. Physicians in Iowa and North Dakota have access to virtual emergency room support.

At Lost Rivers — a dramatic rural health turnaround story — Huerta’s strategy was to use technology and innovation to offer the kind of high-quality medical care that would keep patients like Rosenkrance coming back. “Necessity is the mother of invention,” Huerta said. “Small hospitals like mine are always going to be under the gun. You have to get really creative.”

Nurse Celeste Parsons treats patient Mimi Rosenkrance, 58, as she recovers from being trampled by a mother cow protecting her calf. (M. Scott Mahaskey/Politico)

In the decades to come, America’s heartland and hinterlands will continue to be home to the people who run the country’s farms, forests and fisheries, and its wilder regions will continue to draw visitors who crave nature and recreation. And those people will need medical care. As a result, rural health researchers say hospitals like Lost Rivers are important test cases. They show that, despite daunting obstacles, rural America need not be left behind when it comes to health care. In fact, because they are being forced to innovate faster than their urban counterparts, they can provide a glimpse into the future of medicine.

“Being in a rural place does not preclude high-quality medicine,” said Tom Ricketts, senior policy fellow at the Sheps Center for Health Services Research at the University of North Carolina, Chapel Hill. “They are under a lot of pressure, but there are rural places you can point to as places you would say, ‘This is how things ought to be done.’”

Where Folks Wear ‘Multiple Hats’

It’s a Tuesday afternoon at Tara Parsons’ flower shop. She cleans up as she waits for customers — or for an emergency call. Parsons, a fourth-generation Arco resident, is not just the town florist; she is also the county coroner, a sheriff’s dispatcher and a volunteer emergency medical technician. This afternoon, she is on ambulance duty.

“We all wear multiple hats out here,” she said.

The town of Arco was founded in the 1870s as a junction for horse-drawn stagecoaches. Its quirky claim to fame is that in 1955, it became the first town in the world to be powered by nuclear energy, a credit to the Idaho National Laboratory down the road toward Idaho Falls. Every summer, to celebrate its history, the town puts on a celebration that features a rodeo and a softball tournament.

The streets are lined with shuttered and boarded-up storefronts, some with their signs still on display: the Galloping Goose, the Sawtooth Club. Residents talk nostalgically about the town’s heyday, when there were banks, a bowling alley and a movie theater, back when residents drove to Idaho Falls only twice a year, to get school supplies and do Christmas shopping.

Now, most of the businesses are gone. The town still has a lumber shop, a hardware store and a few auto garages. There’s also a bar, a gym and a dollar store. And around the corner there’s the local diner — Pickle’s Place — where people come day and night for fried pickles and biscuits and gravy.

Like so many other residents, Butte County clerk Shelly Shaffer has a personal connection to the hospital: Her mom worked there, her sister was born there, and she used to take her children there. Lost Rivers Medical Center — which also has two outpatient clinics — is one of the town’s biggest employers.

“It would be devastating if we didn’t have our hospital,” she said.

Tara Parsons, 42, prepares flowers for a customer. Parsons, who runs the Touch of Country Floral and Gifts shop in Arco, also serves as the town’s coroner and volunteer EMT. (M. Scott Mahaskey/Politico)

That was the direction they were headed. When Huerta, the CEO, arrived four years ago, he found the nearly 60-year-old hospital in disarray — dilapidated facilities, fearful employees, reluctant patients and a financial mess left behind by the former CEO. The hospital’s bank account held just $7,000 and morale was at an all-time low. “We were the poster child for everything that was wrong with rural health care,” he said. “It had been a slow, steady decline from neglect.”

Shannon Gamett, 28, a nurse at Lost Rivers, said paydays were nerve-wracking: “We would run as fast as we could to the bank to cash [a paycheck], or it might not clear.”

After borrowing money to pay his employees, Huerta campaigned to pass a $5.5 million bond for Lost Rivers. He asked locals if it was worth $5 a month — one six-pack of beer or two movie rentals — to keep the hospital running. They answered “yes” at the polls, and the hospital emerged from bankruptcy. Next, Huerta set his sights on overhauling the badly outmoded facilities. One of his top priorities was the laboratory, which he said looked like a high school science classroom from the 1950s.

He instituted a new philosophy: If it doesn’t happen at a “real” hospital, it doesn’t happen at Lost Rivers. That meant ending some local practices, nixing little things like letting staff members wear scrubs of any color they fancied, and big things, like allowing people to bring their horses in for X-rays. “I said, ‘I have no problem doing this, but you tell me what insurance the horse has,’” he recalled. “The practice stopped immediately.”

To bring in more revenue, he applied for grants and got the hospital a trauma center designation (the first level IV trauma center in Idaho) so it could get paid more for the care it was already providing. He saved money by inviting the town’s residents to help renovate clinic exam rooms and by moving the medical records to a cloud-based system that didn’t require more information technology employees.

Prognosis Unclear

Despite Huerta’s efforts, however, the long-term success of Lost Rivers is not guaranteed. “If you don’t have enough people to support a clinic or a hospital, it has no economic reason to be there,” said Ricketts, the Sheps Center fellow. “It just disappears.”

Arco and Butte County officials hope the local economy will get a boost from a planned expansion of Idaho National Laboratory, which conducts nuclear energy testing and research. Residents also are mounting a campaign to get the Craters of the Moon, a national monument in Butte County, designated as a national park.

“It would literally put us on the map,” county clerk Shaffer said.

But even if that happens, Huerta knows he can’t expect a big influx of new residents. Rural parts of the United States saw an absolute decline in population following the 2008 financial crisis, a trend that has since stabilized. But there is little or no growth. So Huerta has to concentrate on keeping the patients he has — and giving them a reason to keep coming. And it’s working: The hospital is now making a small profit and has some reserves on hand for future projects.

“If you are not offering the services, people are going to go somewhere else,” Huerta said. “And as medicine advances and reimbursement is still pegged to volume, you have to find ways to keep that existing population here.”

One big challenge for Lost Rivers and many other rural hospitals is that their patients tend to be older — and thus sicker and costlier to treat. People 65 and older account for about 18 percent of the rural population, compared with 12 percent in urban areas, according to the National Rural Health Association. An older patient base can strain hospitals because Medicare, the public insurance program for the elderly, doesn’t pay hospitals as well as private insurance does. Elderly patients also may need more intense care than small hospitals can provide.

Shane Rosenkrance fills a prescription for his wife, Mimi, after she was discharged from Lost Rivers Medical Center following a cow-related injury. (M. Scott Mahaskey/Politico)

Rural hospitals have a higher percentage of patients on Medicaid, the public insurance for poor people, which pays notoriously low rates to providers.

Some seniors move to Arco precisely because there is a hospital in town. But for others, what Lost Rivers offers simply isn’t enough.

Residents Ray Westfall, 82, and his wife, Winona, recently put their house on the market after deciding it was time to move to Utah, closer to family and more specialized health care. Westfall has neuropathy in his legs, which causes numbness most of the time. He gets around with a walker. Winona has dementia.

“We can get some care here at the local hospital, but mostly we have to travel to Idaho Falls,” he said.

Westfall is a regular at Parsons’ flower shop. On a recent Tuesday, he bought a bouquet for his wife — carnations, her favorite.

Parsons said many of the emergency calls she responds to are for older folks who’ve suffered strokes, fallen at home or are struggling to breathe. One 99-year-old woman she took to the hospital on this morning had fallen in her living room.

Parsons said she has known many of her patients for years, through her parents or grandparents. As they grow old and get sick, she picks them up in the ambulance and drives them to Lost Rivers.

“And before long, I’m doing their funeral flowers,” she said.

Telemedicine: A New Frontier 

At first the Bengal Pharmacy, on the bottom floor of Lost Rivers Medical Center, looks like any other pharmacy, with racks of over-the-counter cold medications, bandages, reading glasses and medical supplies. Shelves of prescription medications sit behind the counter. But it has no pharmacist on site; instead, technicians and students from Idaho State University in Pocatello shuffle about, filling prescriptions.

Their supervisor is a pharmacist at the university, about 80 miles away, who checks their work remotely. Patients who want to talk to him go to a small private room with a phone and video link. The pharmacy is named for the university’s mascot.

For rural hospitals, telehealth can make otherwise faraway services accessible to people where they live, said Keith Mueller, director of the Center for Rural Health Policy Analysis at the University of Iowa. That can be critical, especially during the winter when snowstorms sometimes cut off access to rural towns.

“We can, in effect, bring the provider to the community without physically doing so,” Mueller said. “Even in urban areas, people want more and more convenience in how we receive our services. Here we are talking more about necessity.”

A patient uses a telephone in a private room to talk to a pharmacist at Idaho State University after receiving his medication at Lost Rivers Medical Center. The center has no on-site pharmacist and instead relies on telemedicine to fulfill the hospital's needs. (M. Scott Mahaskey/Politico)

At Lost Rivers, patients can have telemedicine appointments with a psychiatrist. And doctors can get virtual guidance from specialists in trauma, emergency care and burns. But new technologies sometimes take getting used to. “When you lose that hometown community pharmacist, that human touch, when you turn it over to computers, that’s a concept that people have difficulty with,” said Martha Danz, who sits on the hospital’s board.

Leon Coon, 83, said the concept is a bit foreign to him. “I just don’t do that stuff,” said Coon, who works loading hay. “I’m a little old-fashioned.” Sipping coffee at the truck stop early on a Wednesday morning, Coon said he doesn’t even text, so he’s a bit wary of technology that puts him in touch with a pharmacist all the way in Pocatello. But then again, he said he doesn’t rely on the medical system much at all.

“Anytime you go to the doctor, it’s just like a mechanic,” he said. “They’re going to find something wrong. I feel good most of the time, so I just don’t go.”

Shane Rosenkrance, whose wife got trampled by the cow, said he remembers when there were five community drugstores in the valley. Now, he is grateful to have the one pharmacy — even if the pharmacist isn’t actually behind the counter. “To have health care, you have to have a pharmacy,” he said. “And through technology, they are able to do it.”

Telemedicine is hardly a panacea. The projects often depend on grants or government awards, because rural hospitals’ operating margins are slim. And some of the telemedicine and remote monitoring technologies require high-speed internet, which isn’t always reliable or cost-effective in rural areas.

“You can’t do home monitoring everywhere,” said Sally Buck, CEO of the National Rural Health Resource Center. “You can’t do telehealth everywhere.”

Telemedicine also may raise more questions than it answers for some patients, and even create a need for in-person follow-ups. Orie Browne, the medical director for Lost Rivers, said he tries to keep patients from having to travel. But if someone needs more advanced medical care — or a specialist that Lost Rivers doesn’t have — he will refer them to another hospital. The hospital has a helicopter pad, and patients with emergencies that can’t be handled at Lost Rivers can either be flown out by helicopter or transferred by ambulance.

“Ego is a dangerous thing,” he said. “If there is anyone who can do a better job, I’m going to get [my patients] there.”

Nevertheless, Huerta said, he hopes to expand telemedicine, including such services as oncology. Huerta recognizes that Lost Rivers doesn’t have the staff or the expertise to do it all. He believes the hospital should try to do more when it can, and refer out the rest.

“We aren’t trying to do brain surgery,” he said. “We’re not doing Level I trauma. But colonoscopies? Tele-oncology? People in rural areas get cancer too, and it’s demanding driving hours back from a chemotherapy session.”

Rounding Up Doctors

Browne started work at Lost Rivers one recent day in March, then drove 45 minutes to one of its outpatient clinics in Mackay, 26 miles away. One of his first patients was Elizabeth Galasso, 59, who was worried because her heart rate was racing.

“I was scared,” Galasso said, speaking with a hoarse voice as she sat hunched on the exam table. “I felt my heart pounding clear down into my stomach.”

An EKG showed her heart was beating normally. Browne told her it was likely a panic attack, but suggested a stress test just to make sure. He told her that her age, her smoking history and anxiety all put her at risk for heart disease.

“But I think things are going to be just fine,” he said. Galasso reached over and hugged him.

Browne, who took over as Lost Rivers’ medical director in 2015, said he was drawn to the outdoor activities in the area — and the variety of rural health care. He used to have a private practice in Idaho Falls and rotated into Lost Rivers for a week at a time. Now, he spends his days bouncing between the emergency room, the hospital inpatient beds and the primary care clinic. “That’s good for a person who gets bored easily,” he said.

Lost Rivers Medical Center CEO Brad Huerta describes his acquisition of a CT scanner

Many doctors, however, don’t feel the same pull. Rural hospitals and clinics have long struggled to recruit doctors. In rural areas, there are roughly 13 physicians — of any kind — per 100,000 people, compared with 31 in urban areas, according to the National Rural Health Association.

Doctors and other medical providers can be enticed by programs that repay their school loans if they work in a rural area. Some medical schools have programs designed specifically for students who plan to practice in rural or underserved communities. Another way to make treatment more accessible in rural areas is to expand the responsibilities of nurse practitioners, physician assistants and even paramedics.

Lost Rivers relies on nurse practitioners and physician assistants to provide care for patients in the clinics and the hospital. In addition to Browne, the medical center has four part-time primary care physicians, some who live hours away and come in once a week. Various specialists, including a cardiologist and an orthopedist, also rotate into the medical center’s outpatient clinics about once a month. And an MRI machine gets driven to the hospital once a week.

Tim Tomlinson, a podiatrist who lives in Twin Falls and drives 100 miles to Arco once a week, spent a recent morning seeing a lineup of patients. One was a man who had to have a toe amputated after a horse stepped on his foot, another a diabetic who needed a skin graft checked on his foot.

Tomlinson said he’s gotten paid late before, and he has seen the hospital nearly shut down more than once. But he keeps coming because he has developed a practice — and he thinks its important patients have access to specialty care. Lost Rivers isn’t unique in its difficulties, he noted. “All those small towns are struggling as young people move out, leaving mostly old people,” he said. “That puts a drain on the hospitals.”

Patients are living longer with chronic diseases now, so the demand for elderly care is only going to increase. If not the rural clinics and hospitals, Tomlinson said, “who’s going to deliver it?”

Even with the decline in the nation’s rural population, many people are rooted in rural America because of family or because they like the outdoors and a slower pace of life. One of them is Gene Davies, who has lived in Arco more than 60 years, runs a mechanic shop straight out of a different era. Handwritten signs sit on a wooden chair next to the door: “Gone to Dr.” “Be back tomorrow.” “Hope to be back Monday.”

Davies said he appreciates the remoteness of the region. “I ain’t got no plans to go anywhere else,” he said. “I’ve seen enough of the other world. I don’t want it.”

Rosenkrance, the cattle farmer, said she’s not going anywhere, either. She’s been coming to the hospital since she was a child, when she ran through the halls while her father worked in the pharmacy. Now her husband teases her about having a standing reservation in the emergency room.

Just before discharging Rosenkrance, nurse Celeste Parson told her she needed to rest physically and mentally. The accident had left her with a concussion, a lacerated ear and a black eye. Then Parson issued her the most important instruction: Don’t do anything that could cause another blow to the head.

“We would really like you to rest up for at least a week,” Parson said. “But the doctor knows for you, two or three days is more realistic.”

As she grabbed an ice pack and her purse, Rosenkrance reflected on the importance of Lost Rivers for residents across the whole valley.

“This hospital is a big deal,” she said. “It’s saved a lot of lives.”

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