Will Medicaid expansion save the country money as people stop using expensive emergency rooms for primary care? Not in the first years, says a study published in the New England Journal of Medicine.
The study found ER use among Medicaid patients in Oregon stayed high even two years after people gained coverage, and even as more patients visited doctors' offices, too.
All eyes have been on Oregon to answer this question because eight years ago, Oregon tried an experiment. It wanted to expand Medicaid, but it didn't have the money to cover every eligible resident.
So it held a lottery to give coverage to as many people as possible, in the fairest way possible. The result was something of a gift to researchers like Bill Wright, director of the Providence Center for Outcomes Research and Education in Portland. "You couldn't do this as a researcher," Wright said. "You couldn't design a study that randomly gave some people insurance and some people[none], because as a researcher, you don't want to put someone in that position, just to study it."
It wouldn't be ethical to leave some people without coverage just to be a "control group." But, since the state was doing it, it offered an invaluable chance to study the differences between people who have Medicaid and people who don't.
It was the first randomized study on the impacts of health insurance, and it's one of the largest, surveying 25,000 people.
The first findings reported earlier were that Medicaid was beneficial in many ways: it improved people's financial security; they went to the doctor when they were sick and it reduced rates of depression.
"These are all things that are really important benefits of Medicaid expansion," said Wright.
"That was a surprise to a lot of folks," said Wright.
It was widely believed that having insurance would encourage people to get primary care in doctors' offices or clinics, instead of waiting until they're really sick and heading to the ER, where care is most expensive.
After that study, experts scrambled to explain what was happening. Some thought it was pent-up demand from a group that hadn't seen a doctor in years because they didn't have insurance.
Others thought people just hadn't had time to establish a relationship with a primary care doctor. And that when they did, emergency department use would drop.
But now, after looking at two years of data, that's not what this latest study found, said Wright, who is one of the researchers.
"There was no sign that this ED use went down. So this idea of pent-up demand sort of fading away, at least in the first couple of years, it didn't happen."
Quite the opposite.
"If your hope is that in the short term, the first couple of years, you're going to see savings that come out of reduced ED use from Medicaid expansion alone. I don't think I'd be super optimistic about that. I think that it is going to cost money in the short term," he said.
Wright said there maybe savings in other areas, like an increased use of preventive services that could stave off problems that would become more expensive later.
And, Leslie Clement, with the Oregon Health Authority, said during the past two years, Oregon has seen avoidable emergency room use drop by 4 percent.
She said, that's because the state is coordinating care better, by doing things like helping people get to their doctors' appointments and take their medication.
"It is not just a 'open up coverage and let people used health care services as they have done historically,' " she said. "But it's reforming that system."
The Oregon study can't tease out much more information because the experiment had to stop when the state expanded Medicaid fully under the Affordable Care Act.
City Health Works contracts directly with primary care providers, like Mount Sinai Health System, to better manage its most difficult patients. Nearly all of City Health Works' clients are poor, juggling seven or more prescriptions and facing chronic illnesses that frequently spiral out of control.
NEW YORK— Destini Belton isn't a doctor or a nurse. She's a trained health coach, and as a trusted neighbor in Harlem, she goes where clinics and hospitals can't — into patients' homes to understand the mundane but vital details of their lives.
She visits people like Jessica Gonzalez who went blind at the age of 22 because of uncontrolled Type 1 diabetes. Now 33, Gonzalez has high blood pressure, high cholesterol and renal disease. Belton worries that Gonzalez isn't taking the right medication at the right time because she can't see the bottles.
Belton's work follows an example from half a world away. A nonprofit called Mamelani Projects brings health care into neighborhoods in Cape Town, South Africa by employing trusted community leaders. There are surprising similarities between South Africa, and the U.S.: a shortage of doctors in poor neighborhoods; widespread distrust of once segregated hospitals; concentrated and crippling poverty and a growing recognition that models of care that go beyond brick-and-mortar clinics are needed.
Belton is one of a small team of community health workers trained by Manmeet Kaur to help patients in New York City. Kaur trained with the Mamelani Projects in the townships of Cape Town. The organization she founded, City Health Works, contracts directly with primary care providers, like Mount Sinai Health System, to better manage their most difficult patients.
When chronically ill patients like Gonzalez do visit the doctor, researchers have found that half of them leave confused. Health coaches can help patients make sense of a doctor's directions and see up close the stresses of poverty they may be too embarrassed to share.
Gonzalez, for instance, is reluctant to admit her struggles to her doctor, but she trusts Belton to understand.
"With your doctor you don't really want to say what you eat," said Gonzalez, who is obese. "So I'm able to tell her like really, if I'm not going well, or if I sneaked and cheated I tell her the right things, and she helps me."
At weekly meetings, they discuss how patients, many disabled and with dementia, can stabilize their health and avoid costly visits to the emergency room and lengthy hospital stays. Nearly all of City Health Works' clients are poor, juggling seven or more prescriptions and facing chronic illnesses that frequently spiral out of control.
Kaur first witnessed the use of community health workers in sub-Saharan Africa, where doctors are in short supply and difficult to reach and later had an internship with Mamelani.
Long lines besiege clinics and hospitals in South Africa which are overwhelmed by endless needs. Apartheid-era laws created widespread poverty and desperate health conditions, especially in townships surrounding city centers like Cape Town.
But for conditions like HIV, hypertension and diabetes, life-saving drugs are useless — and even harmful — without proper nutrition. Too often in townships, daily diets are filled with junk food, fish and chips, meat and very few vegetables. So Mamelani Projects decided to teach local women about health and nutrition. They conduct classes in garages and visit people in their homes.
In the U.S., the need for health coaches is spurred in part by the Affordable Care Act and major changes in how hospitals are paid. Private and public insurers are testing out so-called bundled payments and other strategies that reward value instead of volume, and there are strong financial incentives to steady the lives of people like Jeanette Rodriguez, even when those needs seem to have nothing to do with health care.
A diabetic who suffers from back pain, Rodriguez was nearly done in by the stress of caring for her father. City Health Works' Belton intervened, helping her find a nursing home for him and guiding her appeal for disability benefits.
But she's also a liaison for Rodriguez's own medical needs, helping her keep track of appointments and drafting a list of ailments and questions for her doctor.
That's a big part of a health coach's job — teaching patients to be better advocates for themselves.
During an appointment at a nearby Mount Sinai clinic, that preparation has paid off. Dr. Joseph Truglio tells Rodriguez she likely had a mild stroke.
Rodriguez had dismissed the tingling on her right side as arthritis, but Belton's insistence — and long history working with her — ensured Truglio would take notice. And that is City Health Works' goal: identify patients careening toward catastrophe and intervene before it happens.
"Here we have a patient that had not been to the ER, but was slowly getting worse," said Truglio. "So that's the real success story, as opposed to sort of finding patients who are already in the hospital for something that we should have been dealing with for years before that."
Coaches use electronic health records to inform doctors about developments in the field, like whether patients are taking their medications or experiencing changes in their mental health.
Kaur wants to make coaches an indispensable part of the health care system by professionalizing their role and proving their financial value.
"Six years ago, the word 'community health worker' was foreign to most people we spoke to," she said. "Now it is written into almost every single grant or funding opportunity from [Medicare and Medicaid]."
But Kaur goes home each night to one of her biggest skeptics. Her husband, Dr. Prabhjot Singh, heads the department of health system design at Mount Sinai. He's weighing whether there's enough evidence that her program works and should be integrated into Mount Sinai's core business.
"Every time somebody sees one of these beautiful, well-designed, kind of custom engagement tools, I think the thought that comes up a lot with my colleagues, and frankly my own, is: How do you do this for 40,000 people? 50,000 people at the scale of the Mount Sinai Health System?" said Singh.
He added, "We actually have to know whether or not the relationship between Destini and her client is effective. It may feel really good, but from a health system perspective, we have to really understand, 'Is she getting healthier? And are we doing it in a cost effective way?'"
There are early signs the program is working: Patients with health coaches cost $600 a month less in medical care than a control group, a strong indication that coaches prevented expensive medical emergencies. For half the patients, coaches alerted doctors about patients' urgent needs.
City Health Works remains a small venture, supported largely by foundations interested in testing the model. But Kaur's ultimate aim is to have thousands of coaches like Destini Belton in neighborhoods around the country that can match the successes seen elsewhere in the world.
Without improving conditions and raising pay, which hovers at $10 an hour, it may be impossible to meet skyrocketing demand for skilled and devoted workers.
In recent months, health aides who care for elderly Americans at home appeared at scores of rallies calling for better pay and workplace conditions. President Barack Obama and some of the presidential candidates have pledged to improve the lives of these workers, who often struggle on the poverty-level wages they are paid.
Now, thanks to the "Fight for $15" movement hundreds of thousands of home care workers in at least five states will gradually receive significant hourly raises. And as result of a large organizing campaign, tens of thousands who have joined unions can negotiate for paid sick time, health and retirement benefits.
"The Fight for $15 and the simultaneous benefits is an amazing, unprecedented thing that I don't think anyone five years ago would have expected, given our hyper-polarized political environment," said Laura Dresser, a labor economist at the University of Wisconsin-Madison who studies the impact of low wages. "This is a workforce that's coming out of the shadows."
People with a deep understanding of eldercare policy say that without improving conditions and raising pay, which hovers at $10 an hour, it will be impossible to meet skyrocketing demand for skilled and devoted workers.
But they also argue that bigger paychecks and benefits will not have a significant impact on senior citizens unless their aides and assistants are also better screened, trained and organized.
"I think it's going to take time and a different mindset to professionalize this job and improve outcomes," said Carol Rodat, New York policy director for the Paraprofessional Healthcare Institute (PHI), which researches ways to transform eldercare. "Achieving better wages is a first step, but there are others that have to follow or you don't get to the end point — improved outcomes for the clients."
As it stands, the soaring number of Americans who choose home care over nursing homes have no organized national system to count on that guides the hiring, education or oversight of their caregivers. There is little or no data that tracks how well the home care is delivered. And yet, these workers, like those in a hospital, provide a lifeline, not only dressing, feeding, bathing and shopping for clients, but working with their health care providers and noticing when their illnesses progress or relapse.
"It's been a growth industry people can get into with little to no experience and few barriers," said Rodat, whose organization wants better state and federal oversight. "We have to totally re-engineer home care. It will take a massive change."
In the past 20 years, the Service Employees International Union, which organized nurses, has focused on home care workers, a largely non-white, female workforce that earns as little as $8 an hour and is often unable to piece together a full day's work. And earlier this year, these workers landed in the national spotlight when they joined the "Fight for $15" minimum wage campaign.
As a result, 500,000 home caregivers in 12 states have joined SEIU and can bargain for paid sick time and retirement benefits. And Massachusetts, California, New York, Washington and Oregon, and cities such as San Francisco, Seattle, Los Angeles, New York and Washington D.C., passed laws phasing in a $15 minimum wage or an equivalent indexed to inflation. An estimated 640,000 of the more than 2 million aides hired through agencies or hired privately will see raises.
Also, starting this year the federal Fair Labor Standards Act guarantees them minimum wage and overtime.
The raises and union protections are concentrated in Northeastern and Western states. And they do not even cover the largest share of workers, the unpaid family members who care for a loved one. Nonetheless, many people who have worked closely on these issues see the changes as an important step in stabilizing what has been a marginal workforce.
With an annual turnover of around 50 percent,home care workers now have among the lowest retention of any industry. Labor organizers say even those who wish to stay often leave for better pay and hours. Advocates note that a trusted caregiver can be pivotal to a person's health and well-being.
"When you keep the same worker that individual is going to see changes in the client's quality of life. They are more likely to say 'Mrs. Smith usually doesn't confuse her children,'" said Caitlin Connolly, the Home Care Fair Pay campaign coordinator with the National Employment Law Project.
But many people who work in eldercare or study it also say that paying workers more and keeping them on the job will not assure senior citizens a standard of care because of the large gaps in regulation. Currently, not all home care agencies even check applicants' criminal histories, something not every state requires.
In a widely-cited study, researchers at Northwestern University's medical school found that just 55 percent of the 180 agencies conducted a national background check. Only a third tested applicants for drug use, even though the job can mean frequent contact with medications.
The study, led by geriatrician Lee Lindquist, showed that many agencies hire unskilled workers off Craigslist and place them in homes of elderly people with physical and cognitive impairments.
Lindquist found aides, some of them illiterate, who mixed up medications or neglected to feed or move clients. Supervisors rarely checked in. And training was lax.
Federal law requires home health aides, who perform skilled nursing functions such as wound care, to have 75 hours of training. There is no mandated training for the largest, fastest-growing segment, the personal aides who assist with housekeeping and grooming. No continuing education is required.
"We see a huge prevalence of Alzheimer's and dementia and depression and pulmonary disease and cardiac disease," noted Rodat of PHI. "You'd think we'd want to give people extra training since they are on the front line."
The increased training she and others are calling for costs more than many agencies and states say they can afford.
Still, some home care agencies say they provide training well beyond minimum standards to meet their customers needs.
Home Care Associates, in Philadelphia provides up to 150 hours of training, along with continuing education and coaching from experienced supervisors.
"A lot of people who do this work have a real passion for it," said Karen Kulp, president and CEO of the company. "But even if they get $15 an hour it's not going to be any different without training, support and supervision. You're not going to improve the quality of the work."
Critics complain that the Affordable Care Act's risk-adjustment program unfairly rewards health plans — including Blue Shield of California — that have excess administrative costs and higher premiums. The Blue Cross Blue Shield Association, which represents 36 plans across the country, has warned Washington against rewriting the rules.
Some health insurers say they're paying too much to rival Blue Cross Blue Shield plans under a key pillar of the federal health law designed to compensate insurers that take on sicker and more expensive patients.
The critics' chief complaint is that the Affordable Care Act's risk-adjustment program unfairly rewards health plans — including Blue Shield of California — that have excess administrative costs and higher premiums. That comes at the expense of more efficient, lower-priced plans in the individual market, they say.
The Obama administration is considering changes to how these dollars are allocated in the state and federal exchanges, but critics say the proposed modifications don't go far enough.
Molina Healthcare, a Long Beach-based insurer, covers about 600,000 people through exchanges in California, Florida and seven other states. The company's chief executive, Dr. J. Mario Molina, said the flawed risk-adjustment program is hurting consumers by stifling competition and keeping rates artificially high.
Among insurers, "the rich get richer and the poor get poorer," Molina said in an interview with California Healthline. "Across the board, the people benefiting from this are the Blues, so they are putting a lot of pressure on to keep the status quo. I think [the Obama administration] understands the issue, but they may lack the political will to change it."
The Blue Cross Blue Shield Association, which represents 36 plans across the country, has warned Washington against rewriting the rules. Federal officials "should not heed the calls to make radical changes to the risk-adjustment model from a small, but vocal, minority of health plans that did poorly," the industry association wrote to the Obama administration in a letter released in July.
The risk-adjustment program doesn't rely on government funds. Rather, insurers compensate each other for taking on sicker patients under a complex government formula.
It relies on risk scores assigned to enrollees based on their age, gender and diagnosed medical conditions. The calculation also uses the average statewide premium, which reflects plans' administrative costs.
Health insurers big and small have said that methodology can hurt lower-priced plans and inflate what they owe.
Some of the new insurance co-ops created under the health law have sued the Obama administration, claiming that the program put them at a competitive disadvantage. The nation's third-largest health insurer, Aetna Inc., also said "the current model rewards inefficient and expensive plans." It isn't involved in the pending litigation.
For the first two years of exchange enrollment, Florida Blue received the most from risk adjustment — $705 million — based on a state-by-state review nationwide. Blue Shield of California was second with $317 million, and a unit of UnitedHealthcare in New York was next at $127 million.
Overall, seven of the top 10 recipients for risk-adjustment dollars were Blues' plans for 2014 and 2015, federal data show. Blue Cross Blue Shield plans are major players in most state insurance markets, so their strong performance on risk adjustment could be expected. However, a separate analysis by the Fitch Ratings agency found that some of these top recipients also have higher-than-average administrative expenses companywide.
Blue Shield of California called these complaints about risk adjustment "inaccurate." It said the government formula is "completely independent" of a plan's administrative costs and does not reward higher premiums.
In a statement, Florida Blue said its reimbursements were "based on the size of the state's market, our market share and the risk profile of the people we attracted."
Federal health officials have also defended their program, saying it's working as intended to compensate insurers that enrolled sicker patients. They have proposed some changes, such as adding prescription drug data to the calculations for 2018.
"These changes will support issuers in serving the highest-cost enrollees while also seeking to make risk adjustment more predictable and more effective at spreading risk for all issuers," Kevin Counihan, chief executive of the federal marketplace, wrote in an August blog post.
In addition to risk adjustment, there are two other mechanisms in the exchanges to cushion insurers from the cost of sicker enrollees. Reinsurance and a risk-corridor system offer further protection against high-cost claims or large financial losses. But those two programs were always meant to be temporary, and they expire at the end of this year. The risk-adjustment program is permanent, making it a bigger priority for policymakers and industry leaders.
"The heat on these risk-adjustment issues will really ramp up, and there's a lot of pressure on the administration to make sure this is right," said Sean Creighton, a senior vice president of risk adjustment at Verscend, a health care analytics company, and a former official at the Centers for Medicare & Medicaid Services. "These are large sums of money to be sloshing around."
Creighton said the industry complaints warrant a closer look. He said it might make sense to drop the average statewide premium from the formula and focus more directly on a health plan's medical claims. Some experts have suggested that the government could cap risk-adjustment payouts to a certain percentage of premiums to limit the financial strain on smaller plans.
Under the health law, insurers must spend at least 80 percent of customers' premiums on medical care for individual policies. This rule helps limit what insurers can spend on administrative expenses and retain as profit.
Timothy Jost, a law professor at Washington and Lee University in Virginia and an expert on the Affordable Care Act, said some administrative expenses are worth counting in the risk-adjustment program because they're tied to managing patients with diabetes and other chronic conditions.
"Administrative expenses do get factored in and some insurers think that rewards inefficient insurers," Jost said. "But [U.S.] Health and Human Services has been skeptical of this argument."
Steve Shivinsky, a spokesman for Blue Shield of California, said "risk adjustment recognizes that Blue Shield attracted sicker members than the market average. That is the primary driver behind the reimbursement."
But the San Francisco-based insurer also has been open about its struggle with excess overhead. In a recent memo to employees, it conceded that, "we spend more on administrative costs than other comparable health plans."
Blue Shield of California had the second highest expense ratio among Blues plans for the first nine months of 2015, according to Fitch Ratings. The California insurer spent 15.8 percent of its revenue on administrative expenses. The average for Blues plans nationwide was 10.6 percent. Florida Blue had an above-average expense ratio of 11.6 percent.
Molina said it paid $254 million into the government's risk-adjustment pool, to be distributed to other insurers. The company said that amount could have been reduced by $44 million, or 17 percent, if it solely reflected medical costs.
"In every single market that we are in, a Blues plan is the No. 1 recipient," Molina said. "That CEO [in Florida] should be sending me fruit baskets."
The new tool will designate marketplace health plan networks as "basic," "standard" or "broad" based on how they compare with other health plan networks in a county. The label will reflect the availability of three types of providers: primary care, pediatricians and hospitals.
The incredible shrinking provider network is nothing new in marketplace plans. One way insurers have kept premiums in check on the individual market is by reducing the number of providers available in a plan's network. Earlier this year, the federal government said that it would introduce a tool this fall to help consumers who are shopping on HealthCare.gov gauge how narrow a plan's provider network is compared with others in the area.
But most consumers who want that information will have to wait at least another year. The Department of Health and Human Services recently announced that the pilot project to test the network breadth tool just got a little, well, narrower.
Consumers can already check whether specific doctors or hospitals are included in a marketplace plan's provider network on HealthCare.gov. But there's currently no way to easily measure the breadth of a plan's provider network. This can be an important factor for some consumers, especially given the growing number of plans with no out-of-network benefits.
The new tool will designate marketplace health plan networks as "basic," "standard" or "broad" based on how they compare with other health plan networks in a county. The label will reflect the availability of three types of providers: primary care, pediatricians and hospitals.
Originally, network-breadth information was going to be available for the 35 states on HealthCare.gov, the federally facilitated marketplace. But in August HHS announced it would make the tool available in just six unnamed states.
In September, HHS said it would shrink the pilot still further, to four states — Maine, Ohio, Tennessee and Texas.
The information will be available sometime during the open-enrollment period for 2017 coverage that runs from Nov. 1 until Jan. 31, 2017.
The government will consider expanding the pilot to additional states and types of providers in future years, the notice said.
In 2015, an analysis by the management consultant firm McKinsey & Company found that 55 percent of hospital networks for marketplace plans were broad, meaning more than 70 percent of hospitals in a specified area participated.
Twenty-two percent of networks were classified as narrow, defined as those in which 31 to 70 percent of hospitals participated, and 17 percent were labeled ultra-narrow, meaning 30 percent or less participated.
Labels like "health maintenance organization" and "preferred-provider organization" aren't necessarily meaningful in communicating whether a network is broad or narrow anymore, said Sabrina Corlette, research professor at Georgetown University's Center on Health Insurance Reforms who has ;written about the network breadth pilot project.
Although the tool will let people compare networks in their area, still, "it's all relative," Corlette said. "If you've got a market where every single network is narrow, this network breadth rating is less useful."
"Drugs that were around for decades—almost a century, sometimes—caught us off guard," said Scott Knoer, chief pharmacy officer of the Cleveland Clinic, referring to price hikes for drugs such as nitroprusside, which increased 672 percent per unit from 2013 to 2015, according to a new report.
Hospitals are getting slammed by drug price hikes that often have nothing to do with improving patient health, a new report has found.
Inpatient drug spending increased by 23.4 percent annually from 2013 to 2015, compared with 9.9 percent annual increases on retail drug spending during the same period, according to a new report by National Opinion Research Center (NORC) at the University of Chicago, which was commissioned by the American Hospital Association and the Federation of American Hospitals. Spending was driven by increases in drug unit prices rather than an increase in the volume of drugs used, they found.
"It would be one thing if price increases were associated with clear and important clinical improvements, but they're not," Chip Kahn, CEO of the federation, said Tuesday in a press briefing.
The price hikes driving the spending increases "appear to be random and inconsistent from one year to the next," the researchers wrote. About half of the drug price hikes in the report occurred in drugs with no generic competitors.
"Drugs that were around for decades — almost a century, sometimes — caught us off guard," said Scott Knoer, chief pharmacy officer of the Cleveland Clinic, referring to price hikes for drugs such as nitroprusside, which increased 672 percent per unit from 2013 to 2015, according to the report. "For a long time, old generic drug prices were so stable we didn't even think about that," said Knoer, who participated in the press briefing.
The brand name version of nitroprusside, Nitropress, was originally approved in 1981 to treat cardiovascular patients. Today, it's made by just one company, Valeant Pharmaceuticals, which bought it in early 2015, and pushed the price to $790.46 per unit from $150 per unit, according to the report. The price hike has been the subject of Congressional attention.
Nitroprusside cost hospitals almost $95 million in 2015 up from $48.3 million the year before, according to the report.
"We understand the value of innovation," said Rick Pollack, the American Hospital Association's president and CEO. "However an unaffordable drug is not a lifesaving drug and a price increase resulting from market manipulation is simply wrong."
The Pharmaceutical Research and Manufacturers of America (PhRMA) said the report misses the big picture by honing in on the drugs in the report, and it leaves out the fact that hospitals mark up drug prices when they bill patients.
"Focusing on a set of unrepresentative, older and off-patent medicines at a time when new generic drug applications had a record backlog gives a distorted portrayal of medicine spending," said PhRMA spokesperson Holly Campbell.
The Generic Pharmaceutical Association was not available for comment.
The report included a national web-based survey with responses from 712 community hospitals from April through June of 2016. Researchers then weighted these responses to come up with estimates for 4,369 community hospitals in the United States. The analysis also included aggregate data for 28 drugs from two group-purchasing organizations, or GPOs, which buy drugs in bulk to negotiate better costs. The two GPOs represent 1,400 community hospitals.
More than 90 percent of survey respondents said drug price hikes had a "moderate or severe" impact on their budgets. What's more, Medicare reimbursements often don't reflect increased inpatient drug costs because the reimbursements are based on price indexes, and drug prices are rising too fast for the indexes to keep up.
"The bottom line is if you spend several million dollars more on drugs, it's just accounting. You're going to spend several million dollars less on other things," Knoer said, adding that although this is not a problem for Cleveland Clinic, some hospitals aren't able to hire has many nurses or can't invest in the latest screening technologies as a result of increased drug spending.
David Vandewater, president and CEO of Ardent Health, which includes 14 hospitals, pointed out that hospital closures seem to be more common than ever before. And although greedy drug companies aren't 100 percent at fault, they may share some of the blame for this trend, he said.
When companies hike drug prices, hospitals lose money on insured patients, but make money on uninsured or out-of-network patients because they can legally charge a markup for drugs, said Gerard Anderson, a health policy and management professor at Johns Hopkins Bloomberg School of Public Health. Drugs are regularly marked up at least 500 percent, so if the drug price is higher, so is the profit.
"It's not a total loss to them when prices go up because charged payers make up some of the difference," Anderson said. He was not involved in the report or on the press call.
Ultimately, even healthy individuals wind up paying the price for out-of-control drug costs, in the form of higher premiums and copays, increased deductibles and higher taxes, Knoer said on the press call.
"If these kinds of increases took place in the sale of gasoline in the U.S., you'd be paying $30 a gallon," Vandewater said. "And if that was the case, the federal government or somebody would decide enough is enough."
Health care finally came up as an issue in the second presidential debate in St. Louis Sunday night. But the discussion may have confused more than clarified the issue for many voters.
Health care finally came up as an issue in the second presidential debate in St. Louis Sunday night. But the discussion may have confused more than clarified the issue for many voters.
During the brief exchange about the potential fate of the Affordable Care Act, Republican Donald Trump said this: "Obamacare is a disaster. You know it. We all know it. It's going up at numbers that nobody's ever seen worldwide. Nobody's ever seen numbers like this for health care."
Let's parse that discussion of costs piece by piece. Because when it comes to health care, there are many different types of costs: those for governments, employers and individuals. And those costs don't always go up and down at the same time.
First, the federal government's spending on the Affordable Care Act's insurance is coming in under budget projections. According to the official scorekeeper, the Congressional Budget Office (CBO), in March, the net cost of the insurance coverage provisions of the law — including tax credits to subsidize some lower-income customers' premiums and costs for adding people to Medicaid — "is lower by $157 billion, or 25 percent" than the estimate when the law was enacted in 2010.
Much of that is because CBO originally estimated that large numbers of employers would stop providing insurance to workers and send them to the law's online marketplaces, where many of them would get federal subsidies. That didn't happen. Medicaid spending increased more than CBO projected, but that was more than offset by the lower spending on tax credits.
What Trump was almost certainly referring to when he talked about costs going up were reports of increases in premiums for the marketplace plans. Those are for people who don't have employer coverage and don't qualify for a public health plan, such as Medicare or Medicaid. About 18 million Americans use those marketplaces, or exchanges.
And on average, premium prices in states that have announced their rates are going up next year at much higher rates than for the previous two years, although the final tallies won't be known until all the rates are released later this month. Charles Gaba, who crunches numbers for his blog, ACASignups.net, estimates a national average premium increase of around 25 percent.
Earlier in the debate, Trump noted that under the law, "your health insurance and health care is going up by numbers that are astronomical, 68 percent, 59 percent, 71 percent." And there are reports of very large increases like those, including in Oklahoma, where premiums in the individual market could rise anywhere from 58 to 96 percent. Even in California, which has what is generally considered a successful marketplace, rates are going up an average of 13.2 percent for next year.
There are several reasons for the increases. One is that insurers charged premiums that were simply too low to begin with, and now they are catching up in order not to go broke. Another goes back to the CBO prediction above, about employers sending workers to the individual market to buy their own insurance. When that didn't happen, insurers didn't get the influx of generally healthier people to offset the costs of the sicker people who the law made eligible for coverage for the first time. A recent study from researchers at the Brookings Institution found that premiums in that market are actually lower than they would have been had the law not been passed.
But even with premiums rising in many (though certainly not all) areas of the country, about half the people who buy insurance on the individual market won't feel much of that increase. Tax credits will increase to cover most of the hikes for those who bought through the exchanges, and in many places consumers can save money by changing plans. Even with an estimated 25 percent premium increase, the federal government projects, 78 percent of marketplace consumers should be able to find a plan that costs $100 per month or less. Another estimated 2.5 million people are purchasing coverage on their own who could be getting tax credits.
Meanwhile, the majority of Americans get coverage through an employer, and that market is seeing historically low premium increases. A recent report from the Kaiser Family Foundation found family premiums for employer-coverage rose an average of 3 percent in 2016, continuing several years of much-lower-than-average hikes. (Kaiser Health News is an editorially independent project of the Kaiser Family Foundation.)
However, consumers at every level are feeling more financial pain when it comes to health care. While premiums for most people have increased slowly, workers and individual insurance purchasers are being asked to pay much larger deductibles before their health insurance kicks in. When insurance does pay, patients also are being asked to contribute more for their share of the services. And even the slow rate of premium increases is often more than the growth in workers' wages, so it eats more of their paychecks.
At the same time, however, health care spending overall (as measured by the federal government) continues at a historically slow rate. Spending in 2014 (the last full year analyzed) was up 5.3 percent. That was only slightly higher than the five previous years, which included the smallest increase (2.9 percent in 2013) recorded since government officials began keeping track more than a half century ago.
Nonetheless, health spending is going up faster than the economy as a whole, thus consuming more of the nation's resources. And Trump is correct about U.S. health spending not looking good next to the rest of the world. The U.S. spends one-third more per person on health care than the next highest-spending country (Switzerland), and more than twice the average for industrialized nations. Yet Americans are not healthier than most of our international counterparts.
Formal regulations would take time to undo, because they must follow a lengthy process allowing for public comment. But there are several measures Trump could take on Day One of his presidency to cripple the law's effectiveness.
Republicans have been vowing for six years now to repeal the Affordable Care Act. They have voted to do so dozens of times, despite knowing any measures would be vetoed by President Barack Obama. But if elected, a President Donald Trump wouldn't have to wait for lawmakers to once again pass repeal legislation to stop the health law from functioning. Indeed, he could do much of it with a stroke of a pen.
Trump "absolutely, through executive action, could have tremendous interference to the point of literally stopping a train on its tracks," said Sara Rosenbaum, a professor of law and health policy at George Washington University in Washington, D.C.
If elected, Trump would take office at a tricky time for the health law, with many Americans in both parties complaining about rising premiums and other out-of-pocket costs. The Republican-led Congress has refused to make changes to the law that would help it work better — such as offering a fix when insurers cancelled policies that individuals thought they would be able to keep. As staunch opponents of the law, they, of course, have little incentive to improve it.
When problems have arisen, Obama has often used his executive authority to try to solve them. And it's this very mechanism Trump could use to undermine the law. As president, the Republican "can just reverse" Obama's actions in many cases, said Nicholas Bagley, a law professor at the University of Michigan who writes about health policy. A president "can't undo the basic architecture of the law, but you can throw sand into the gears," he said.
Formal regulations would take time to undo, because they must follow a lengthy process allowing for public comment. But there are several measures Trump could take on Day One of his presidency to cripple the law's effectiveness.
Perhaps Trump's easiest action — and the one that would produce the largest impact—would be to drop the administration's appeal of a lawsuit filed by Republican House members in 2014. That suit, House v. Burwell, charged that the Obama administration was unconstitutionally spending money that Congress had not formally appropriated; it was spending funds to reimburse health insurers who were providing coverage to working-poor policyholders — those earning between 100 and 250 percent of the federal poverty line. More than half of people who purchase insurance in the health exchanges get the additional help, which reduces out-of-pocket health spending on deductibles and coinsurance. While that help for consumers is required under the law, the funding was not specifically included. (Tax credits for people with incomes up to four times the poverty level to help defray the cost of premiums are a separate program and were permanently funded in the ACA.)
Last April, Federal District Court Judge Rosemary Collyer ruled in favor of the House Republicans. "Such an appropriation cannot be inferred," she wrote of the payments, and insurer "reimbursements without an appropriation thus violates the Constitution." However, Collyer declined to enforce her decision, pending an appeal to a higher court. That appeal was filed in July and is still months away from resolution.
If Trump wanted to seriously damage the ACA, he could simply order the appeal dropped, letting the lower court ruling stand, and stop reimbursing insurers who are giving deep discounts to half their customers. And that would wreak havoc, said Michael Cannon of the libertarian Cato Institute, a longtime opponent of the health law. The insurers would still have to provide the discounts, as required by law, he said, "but they're no longer getting subsidies from the federal government to cover the cost. So they are going to be selling insurance to these people way below the cost of that coverage."
Even those who support the law say that would effectively shut down the health exchanges, because insurers would simply drop out. A new Trump administration "really could collapse the federal exchange marketplace and the state exchanges if they end cost-sharing" payments to insurers, said Rosenbaum, who has been a strong backer of the health law. There is already some concern about the continuing viability of the exchanges after several large insurers, including Aetna and United HealthCare, announced they would be dropping out for 2017.
Another way Trump could undermine the health law would be by simply not enforcing its provisions, particularly the "individual mandate" that requires most people to have insurance. That requirement is supposed to ensure that healthy as well as sick people sign up, thus spreading the costs of people with high bills across a larger population. But "executive branch non-enforcement could make a real difference to the vitality of the exchanges going forward," Bagley said. If healthy people don't sign up, sick people would need to pay more money for their insurance.
Aside from inflicting damage to the exchanges, the administration could also affect the law's operations by refusing to approve states' changes to their Medicaid programs. States rely on federal regulators to sign off on changes large and small, including which citizens are eligible, to keep their Medicaid programs operating. "There are so many things that an administration that doesn't want a program to work can do," Rosenbaum said.
The bigger question, though, is not what Trump could do to cripple the health law — it's what he would do. He has addressed the issue only rarely — characterizing the health law as, simply, "a disaster" — and his plans for it aren't clear. "It's one thing to talk about ripping insurance from 20 million people" who are newly covered, Bagley said. "It's another to actually do it."
Health policy analysts on both sides of the aisle also still question where health fits on Trump's priority list. His campaign manager, Kellyanne Conway, suggested this week that he may bring up the health-care law at Sunday's debate, in which case Trump could offer more information about his view.
"A big unknown is how aggressive Trump would remain in going beyond rhetorically opposing Obamacare," said Thomas Miller, a resident fellow at the conservative American Enterprise Institute. "His report card as a presidential candidate reads 'Donald needs to improve his attention, effort, and study habits. He is easily distracted and seems to prefer just picking fights with others.'"
Perhaps most important, Cannon says, is not whether Trump could single-handedly undo the health law, but whether he could undermine it enough to force Congress to take action. If Trump were to do just enough to cause the insurance exchanges to fail, he said, "that would put pressure on Congress … to reopen the law."
Roughly 7,000 kidney dialysis centers have opened across the country. Medicare is proposing to more than double the payment it offers dialysis providers to teach patients how to do it.
About half a million Americans need dialysis, which cleans toxins from the body when the kidneys can't anymore. It can cost more than $50,000 a year, and takes hours each week at a dialysis center.
To meet the need, roughly 7,000 kidney dialysis centers have opened across the country. Patients go several times a week and spend half a day undergoing the life-sustaining procedure. Medicare is now taking steps to make it easier for people to do their own dialysis at home.
That sounds like great news to Dr. Robert LaClair, a nephrologist in Helena, Mont., who has an unusually high percentage of patients who do their dialysis at home: 40 percent versus the national rate of about 10 percent. That's largely because LaClair is no fan of how dialysis has traditionally been done in America. He says his patients do better if they're more active participants in their care, rather than passive receivers.
"The way we do dialysis in this country, no one would be saying, 'This is the way we should be doing things,'" LaClair said.
The traditional dialysis routine in a clinic setting is tough on patients, he said. "Often our patients will feel poorly for four, five, six hours, sometimes the rest of the day after a dialysis treatment [in the center]," LaClair said. "They only start feeling better by the next day. And then of course by the time they feel really well, they're back on dialysis again. So it's very hard on people, especially as they get older, to have to go through that kind of treatment."
Contrast that to LaClair's patient, 84-year-old Ward Shanahan. He's a retired attorney who was diagnosed with diabetes a year ago. LeClair prescribed a home dialysis machine that Shanahan uses every night at bedtime. More frequent dialysis means less recovery time, and patients can do it when it's convenient for them, not when centers have appointments available.
"It gives me a life again," Shanahan said.
He has a lakeside cabin he likes to visit in the summer. Being tied to a dialysis center's daytime hours "busts up the week," he said. "I like to be able to get up in the morning, take a shower and go around the world."
Shanahan said his home routine, using something called a peritoneal dialysis machine, isn't particularly difficult. "It's got this sweet-voiced lady telling me what to do," he said about the prerecorded voice from the machine on his nightstand that talks him through properly connecting several slender, clear plastic tubes to it. One plugs into a pre-mixed bag of sugar solution, another to a permanent catheter near his navel. The machine slowly pumps the fluid into his lower abdomen, where it circulates and absorbs bodily wastes through blood vessels in the abdominal lining called the peritoneum. The machine then draws it back out through the same catheter. Another tube snaking away from his machine carries the waste fluids into a toilet in the adjacent bathroom.
Peritoneal dialysis is less common than hemodialysis, in which a machine filters the blood itself. Most people who dialyze at home use the peritoneal technique, although it is possible for some patients to perform hemodialysis at home, too.
Shanahan says he often sleeps through most of the fluid cycling, getting about six hours of sleep a night. If there's a problem, he says, his machine, which is about the size of a toaster oven, "has a squawker on it, so I could be sleeping and this thing wakes me up and tells me I've got to fix the line."
But the routine he's now familiar with requires a lot of up-front training. Medicare is proposing to more than double the payment it offers dialysis providers to teach patients how to do it — from the current $50.16 for 1.5 hours of a nurse's time, to $95.57 for 2.66 hours.
Still, that may not be enough to cover actual training costs, says Dr. Frank Maddux, chief medical officer for Fresenius Medical Care, a large dialysis company. He said the number of Fresenius' patients who dialyze at home has increased from 7 to 11 percent over the last five years.
"I don't know that [the increased payment] will create all the fundamental changes that need to occur, but I think it sets a good, clear direction," Maddux said.
Neither Medicare nor Maddux will say how many more dialysis patients should do the procedure at home. They say that is both a personal and medical choice that isn't right for everyone, and they don't want patients who are happy using dialysis centers to feel pressure to change.
Medicare officials declined to be interviewed for this story, but Maddux said he sees the agency's proposed bump in payment for in-home dialysis training as part of its bigger "triple aim" goal of improving patients' experience while also improving their health and lowering medical costs.
"There are many patients I think that could be much more engaged in their therapy," Maddux said, which he thinks would likely lead to them feeling better. At least one study found that patients who dialyze more frequently feel better and are hospitalized less than those who do it less frequently.
Nephrologist LaClair practices at St. Peter's Hospital in Helena, Mont. He said his patients who switch from the largely passive experience of a center to taking responsibility for their own care at home never want to go back, "even when we've had people having significant problems and issues" doing it themselves.
At St. Peter's, LaClair said, they have had the opportunity to "model dialysis the way think we would want dialysis if we were sick, and that's what we do."
Neither LaClair nor Maddux sees home dialysis as a threat to the viability of the thousands of dialysis centers nationwide. Providers get the same base-level payments for caring for patients whether they do their dialysis at home or in centers. LaClair said maintaining patients on in-home dialysis is cheaper long term, but requires a significant investment up front in training, and he said it's crucial that there is always medical staff on call to help with challenges, including infection control.
Information technology is improving the viability of home dialysis, too. Patients used to have to keep pen-and-paper logs of important health data about their treatments, logs that nurses say were notoriously inaccurate and that they only saw once a month. New machines track patients' vital signs in real time and send the data back to providers via the Internet, allowing them to track and even adjust treatments on their computers or smart phones on the fly.
Medicare hopes to implement the payment increase by January 1, 2017.
Proponents say high-intensity focused ultrasound (HIFU) can have fewer negative side effects than surgery or radiation. Critics, however, say the procedure is being oversold, leading some patients to get a treatment they don't need.
Men hoping to avoid some side effects of prostate cancer treatment are shelling out tens of thousands of dollars for a procedure whose long-term effects are unknown and insurers, including Medicare, won't pay for.
Proponents say high-intensity focused ultrasound (HIFU) can have fewer negative side effects than surgery or radiation, while giving some patients another option between actively watching their cancer and those more aggressive steps. Critics, however, say the procedure is being oversold, leading some patients to get a treatment they don't need.
Device makers are busy selling the $500,000-and-up machines to doctors around the country and offering training courses. Billboards advertising this "new non-invasive treatment for prostate cancer" are springing up, while treatment center websites promise "a safer method" with benefits such as "no erectile dysfunction and no incontinence," although studies show those side effects can occur, but less often than with other types of more aggressive treatments. The treatment can range in cost from $15,000 to $25,000.
HIFU is the latest treatment to prompt concerns over whether there should be limits — such as requiring tracking of results — placed on expensive new technology while additional data is gathered.
"This is going to join the group of uncertain-yet-available therapies that physicians can use, yet we have no clear understanding of who will benefit in a real world population," said Art Sedrakyan, a professor of health care policy and research at Weill Cornell Medicine in New York. The treatment of prostate cancer has been a particularly controversial — and lucrative — niche, since the disease for some men can be slow growing and their tumors wouldn't be fatal. A host of new "non-surgical' treatments are now also on offer using sophisticated machines to destroy cancer cells with proton beams or other types of high dose radiation.
Using HIFU, devices direct ultrasound waves to heat prostate tissue to about 195 degrees, ablating all or just portions of the gland. Focusing on just a portion of the gland is a newer trend in prostate cancer treatment. Anesthesia is used.
HIFU machines have been used in Europe longer than in the U.S, although national health programs in the United Kingdom and elsewhere limit coverage to patients enrolled in clinical trials or other research programs. While the devices are approved in Canada, the national health program does not pay for it. Until recently, some U.S. men traveled to have the procedure done by U.S. doctors who set up shop in Mexico, the Bahamas or Bermuda.
In the U.S., advisory committees to the Food and Drug Administration twice turned down applications from manufacturers to market HIFU devices as a treatment for prostate cancer, citing not enough long-term evidence.
But in October 2015, the FDA approved Charlotte, N.C.-based SonaCare Medical's device for the ablation of prostate tissue. Data submitted by the company included an analysis of 116 men who had their entire prostrate treated and were followed for 12 months. "While the oncological outcomes form this study are inconclusive, the results provide reasonable assurance of safety and effectiveness of the device in the context of prostate tissue ablation," the FDA said in its review.
A device by Lyon, France-based EDAP gained a similar approval shortly thereafter.
Researchers say it's too soon to state conclusively that partially treating the disease works as well as totally removing it. There is also debate over the type of patients best suited for the treatment: low risk, intermediate risk or those who have failed other types of prostate cancer treatment.
Ongoing and previous studies from abroad are available, but have limitations, including fairly short follow-up periods.
"The biggest studies in the world are only four or five years into it," said Michael Koch, chairman of the urology department at Indiana University School of Medicine, a proponent of HIFU for some patients. "We don't have survival data to see if [it] does better than surgery or radiation."
To get more complete answers, some physicians say it's critical to track outcomes with de-identified patient information in a nationwide registry.
It's not a new idea. Indeed, some technologies have been granted approval by the FDA or coverage by Medicare with a condition that patients must be enrolled in clinical trials or registries.
"Short of the FDA saying to device makers, 'You need to do this,'" establishing a comprehensive tracking method is challenging, said Jim Hu, a urologist and a robotic surgery specialist at Weill Cornell.
Hu co-authored a paper in the Journal of the American Medical Association in July with Sedrakyan and UCLA urology resident Aaron Laviana calling for a registry. Meetings between registry proponents, the FDA and the device makers are ongoing, but challenges remain, Hu said.
A registry is currently operating in England that will soon open to U.S. users of SonaCare Medical's HIFU devices. While SonaCare funds the registry, it does not have control of the data, said SonaCare CEO Mark Carol. His firm will also contribute funding to a broader U.S. registry that Hu and his co-authors support, which would incorporate results from other HIFU devices as well, calling the plan an "ambitious and worthwhile undertaking."
The evidence gathered could convince Medicare and other insurers that a treatment is valuable — and worth covering. But some practitioners may not want insurers to cover the treatment because when a treatment isn't covered, cash payments by patients can often exceed what practitioners would be paid by insurers. Currently, men usually pay for it themselves.
"The financial piece of this is somewhat perverse," said Hu. "Men are being charged $25,000 for this, yet no one feels pressure to demonstrate the efficacy of the treatment."
Adding A New Alternative To Treatment Debate
Meanwhile, the continuing debate regarding patients' treatment options has created an opportunity for HIFU.
Surgery and radiation can pose problems such as incontinence or impotence, while hormonal treatments also cause impotence and can also result in hot flashes, muscle weakness and other problems.
When the cancer is aggressive, the benefit of these approaches outweigh such side effects. But for men with lower-risk profiles, based on factors such as age, and results of tests and biopsies, the choice is more difficult. Some health care experts encourage these patients to opt instead for "active surveillance," which means keeping an eye on the cancer through regular testing.
But some men are uncomfortable just watching — and that's where HIFU could play a role.
Patients who have an area in the prostate with a higher grade tumor could choose to treat just that portion with HIFU, said Indiana University's Koch, who was part of the clinical trials of SonaCare's device in the U.S. and has accepted funding from the company.
"If we can treat [that area] with therapy, we can get them back on active surveillance," said Koch.
Others say more study is needed.
With prostate cancer, there may be a dominant tumor, but small cancer cells elsewhere in the gland, said Justin Bekelman, associate professor of radiation oncology at the University of Pennsylvania.
Still others note that patients who choose HIFU need to select physicians with lots of experience and training because the procedure is complex.
"HIFU is a steep learning curve. Some of the doctors buying these machines are not ready for it," said Jim Wickstrom, who had the procedure four years ago in Bermuda and is a big proponent. He says patients should do their research and choose only very experienced physicians who are willing to show their outcome data.
Registries could also help provide more information on outcomes, but one big challenge is who would pay for it.
"The main reason those (registry efforts) fail is the industry doesn't want to fund those studies, even if they think the treatment is better," said Sean Tunis, president and CEO of the Center for Medical Technology Policy in Baltimore and a former medical director at the Center for Medicare & Medicaid Services.
Mainly, that's because they don't need to unless required by the FDA, said Tunis. They already have marketing approval based on a limited number of studies demonstrating safety and efficacy.
Also, while registries are useful they also have limitations.
For one thing, because they are not randomly controlled trials, registries aren't the best way to compare treatment A to treatment B, said Fred Masoudi, a professor at the University of Colorado's medical school. But they can show how treatments, drugs or devices perform in common use.
"It's not a foregone conclusion that results will be the same [as in clinical trials], which is why registry programs are so important," said Masoudi, who has been involved with other such registries.
Where The Market Stands
SonaCare said it has sold more than 30 of the machines in the U.S., with medical centers in California, Florida, New York, North Carolina and Texas already using them. Competitor EDAP reported late in August that earnings from its HIFU division rose 68 percent in the first six months of 2016.
Patient advocates caution men to do a lot of research before choosing any type of treatment.
"With any procedure, there is a risk of temporary or ongoing issues with ED or incontinence," said Chuck Strand, CEO of Us Too, a prostate cancer patient group that is partially funded by industry. "Anytime anyone is looking at any therapy, we urge them to do their homework, ask lots of questions and get a second or even third opinion."