For years, Ely Bair dealt with migraine headaches, jaw pain and high blood pressure, until a dentist recommended surgery to realign his jaw to get to the root of his health problems.
Do you have an exorbitant or baffling medical bill? Join the KHN and NPR 'Bill of the Month' Club and tell us about your experience. We'll feature a new one each month.
The fix would involve two surgeries over a couple of years and wearing braces on his teeth before and in between the procedures.
Bair had the first surgery, on his upper jaw, in 2018 at Swedish Medical Center, First Hill Campus in Seattle. The surgery was covered by his Premera Blue Cross plan, and Bair's out-of-pocket hospital expense was $3,000.
He changed jobs in 2019 but still had Premera health insurance. In 2020, he had the planned surgery on his lower jaw at the same hospital where he'd been treated the first time. The surgery went well, and he spent one night in the hospital before being discharged. He was healing well and beginning to see the benefits of the surgeries.
Then the bill arrived.
The Patient: Ely Bair, 35, a quality assurance analyst. He has a Premera Blue Cross health plan through his job at a biotech firm in Seattle.
Total Bill: Swedish Medical Center billed Bair $27,119 for the second surgery in July 2020. This was Bair's share of the negotiated rate, after the hospital took $14,310 off the charge. His insurer paid $5,000. Bair owed additional bills to the surgeon and the anesthesiologist.
Service Provider:Swedish First Hill Campus in Seattle, part of the largest nonprofit health system in the Seattle area, which is affiliated with Providence, a major Catholic healthcare network.
What Gives: Bair hit two maddening health system pitfalls here: He expected his new plan to behave like his previous one from the same insurer — and he expected his mouth to be treated like the rest of his body. Neither commonsense notion appears true in America's health system.
Typically, large companies, such as Bair's employers, "self insure," meaning they pay their workers' health costs but use insurance companies to maintain provider networks and handle claims. When Bair changed jobs, his insurance coverage changed even though both employers used Premera. Bair paid $3,000 for his first surgery because that was the out-of-pocket maximum under his plan from his previous employer, which covered oral and maxillofacial surgery.
Bair expected that using the same hospital and the same insurance carrier would mean his costs would be similar for part two of his treatment. Bair's oral and maxillofacial surgeon — the same doctor who performed the first procedure — checked Bair's benefits through his insurer's online portal and thought it would be covered. Premera also sent his doctor confirmation agreeing that the second procedure was medically necessary.
About three months after the surgery, Bair was shocked to get the large hospital bill — about $24,000 higher than he expected.
When he called Premera, he learned his new plan had a $5,000 lifetime limit on coverage for the reconstructive jaw procedure known as orthognathic surgery, which is sometimes regarded as a dental rather than a medical intervention. His doctor said that information was not noted in Bair's benefits when the practice reviewed them through an online portal. Premera told Bair he should have known about the limit because it was listed in his detailed, hard-copy, 86-page member-benefit booklet.
The Affordable Care Act in 2014 eliminated lifetime and annual caps on insurance coverage for categories of treatment such as prescription drugs, laboratory services and mental healthcare. While the ACA lists broad categories about what is considered an "essential health benefit," each state decides which services are included in each category and the scope or duration that must be offered. Bariatric surgery, physical therapy and abortion are examples of care for which insurance coverage can vary a lot by state under this ACA provision. Orthognathic surgery is not considered an essential health benefit in Washington. It is sometimes performed for cosmetic purposes only. Also, plans sometimes regard the surgery as part of orthodontia — which frequently involves limits on coverage. But for Bair, it was a clear medical necessity.
Without an ACA requirement for orthognathic surgery, Premera and self-insured plans are allowed to provide various levels of benefits and can impose annual and lifetime caps.
Premera spokesperson Courtney Wallace said Bair transferred from a plan with his former company that did not have a lifetime maximum to a plan with a $5,000 lifetime maximum benefit.
Martine Brousse, a patient advocate and owner of AdvimedPro, which helps patients with healthcare billing disputes, said Bair acted appropriately by using a doctor and hospital in his health plan's network and checking with his doctor about his insurance coverage.
She said Swedish should have told him before the surgery — which was planned weeks ahead of time — how much he would have to pay. "That is a failure on part of the hospital," she said.
Sabrina Corlette, co-director of the Georgetown University Center on Health Insurance Reforms, said it doesn't seem fair that his first employer covered the cost of his surgery but the second employer did not. She said the $27,000 bill seemed excessive and the $5,000 lifetime limit very low. "Essential health benefits serve a really important function, and when there are gaps or holes people can really get hurt," she said.
Resolution: Bair's doctor told him the hospital charge was at least three times the amount Swedish charges uninsured patients for the same surgery. Bair said Swedish offered to let him pay the bill over two years but did not make any other concessions.
Swedish would not say why it did not verify Bair's insurance benefits before the surgery or let him know he would face an enormous bill even though he was insured.
"Hospital pricing is complex and nuanced," Swedish officials said in a statement. Bair's bill "was inclusive of all the care he received, which included specialized services and expertise, equipment and the operating room time. He had a jaw procedure that had a maximum benefit from his insurer of $5,000. He was billed the balance not covered by his insurer."
The hospital system said it also has an online tool that generates estimates tailored to patients' coverage and choice of hospital.
The online tool did not come up with anything on the term "orthognathic surgery," however.
Bair appealed three times to Premera to reconsider its decision to cover only $5,000 of the cost of his procedure. But the insurer rejected each one saying he had exhausted his lifetime orthognathic surgery benefit and he was responsible for any additional care. When Swedish wouldn't lower his cost, he filed a complaint in December 2020 with the state attorney general's office.
A few months later, Swedish reduced Bair's bill from over $27,000 to $7,164.
"Because neither the patient nor his provider was aware of this limitation in coverage prior to the procedure, the surgeon advocated on the patient's behalf to get the bill lowered," the hospital told KHN in a statement.
Bair agreed to pay the lower amount. "The bill is at least a much more manageable number than the financial ruin $27,000 would have been," he said. "I am just looking forward to closing this chapter and moving on."
His surgeon, who helped him fight the hospital bill and limited insurance coverage, reduced his bill to $5,000 from $10,000, Bair said.
Bair said his employer, Adaptive Biotechnologies, is looking into eliminating its $5,000 lifetime limit for the procedure when it is medically necessary.
Since the surgery, Bair said he gets far fewer migraine headaches and his high blood pressure has been reduced. "I feel way more energized," he said.
The Takeaway: When facing a planned surgery, talk to your hospital, doctor and insurer about how much of the bill you will be responsible for — and get it in writing before any procedure.
"In theory, you should be able to rely on your provider to confirm your coverage but, in practice, it is in your best interest to call your insurer yourself," Corlette said.
Even though the ACA eliminated lifetime and annual caps on coverage, that applies only to services deemed essential in a patient's state. Be aware that certain surgeries — like jaw surgery — lie in a gray area; insurers might not consider them a necessary medical intervention or even a medical procedure at all. Corlette said health plans should notify patients when they are closing in on lifetime or annual limits, but that doesn't always happen.
Also, be aware that even though your insurance carrier may stay the same after switching jobs, your benefits could be quite different.
Kudos to Bair for being a proactive patient and appealing to the state attorney general — which got him a positive result.
Stephanie O'Neill contributed the audio profile with this report.
Bill of the Month is a crowdsourced investigation by KHN and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!
As classes get underway this week and next, Montana school and county health officials are grappling with how a new state law that bans vaccine discrimination should apply to quarantine orders for students and staffers exposed to COVID-19.
It's the latest fallout from the law that says businesses and governmental entities can't treat people differently based on vaccination status. The law makes Montana the only state that prohibits both public and private employers — including hospitals — from requiring workers to get vaccinated against COVID.
Some state and county officials also interpret the law to mean that unvaccinated people can't be ordered to quarantine over a COVID exposure unless vaccinated people are, too. That interpretation goes against the Centers for Disease Control and Prevention's recommendations for only unvaccinated people to quarantine in the event of a COVID exposure.
The state law worries school officials who had planned to lean on the CDC guidelines to keep closures and disruptions to a minimum this fall after last school year's fluctuating in-person, remote and hybrid classes.
Micah Hill, superintendent of Kalispell Public Schools, said he received guidance from Republican Gov. Greg Gianforte's office that confirmed the law means quarantine protocols must be the same for the vaccinated and unvaccinated alike.
Hill described that interpretation as a "game changer" for schools as the highly transmissible delta variant of the virus races through the state. Kalispell's Flathead County has among the highest number of active COVID cases with just 41% of the eligible population fully vaccinated. Only 1 in 4 children eligible for a COVID vaccine are vaccinated, according to county health officials. Hill estimates about two-thirds of his staff are vaccinated.
"If everybody is getting quarantined with a more contagious variant, you could see a lot of people out of school, staff and students, and [that] really threatens the ability of schools to stay open," Hill said.
As a result of the law, some Montana county health and school officials have decided to drop quarantine orders. Instead, they are making quarantining an option for exposed students.
But at least one county has decided to defy the law. The Missoula City-County Board of Health unanimously voted this week for a policy requiring the unvaccinated to quarantine, but not the vaccinated. The board held the vote after being advised by a representative from the county attorney's office that the policy could lead to a lawsuit.
The stance by Missoula health officials is the latest in a string of defiant acts by schools and local governments against state laws and policies that ban COVID-prevention measures. In Florida, for example, a handful of counties have said they will require students to wear masks despite Republican Gov. Ron DeSantis' ban on mask mandates.
Anna Conley, Missoula's chief civil deputy county attorney, said that although she can't promise the county will be successful in court, the county might have a good argument to overturn the state law if it winds up being litigated. The law may conflict with other state health laws that require health boards and health officers to prevent the spread of infectious diseases, she said.
Montana legislators passed House Bill 702 this spring amid a backlash against COVID-prevention protocols such as a mask mandate under former Democratic Gov. Steve Bullock, and after a Great Falls hospital announced plans to require its employees to get vaccinated against COVID.
"Your healthcare decisions are private; they are protected by the constitution of the state of Montana," said bill sponsor state Rep. Jennifer Carlson (R-Manhattan) during the legislative session. "Your privacy is protected, and your religious rights are protected."
Brooke Stroyke, a spokesperson for Gianforte, said it's up to county officials to interpret how HB 702 affects quarantine orders in schools. However, an adviser in the governor's office has instructed districts that the law presents an all-or-none option for county health departments when it comes to quarantine orders.
"HB 702 would allow for quarantine protocols as long as they are applied to everyone equally and are not based on COVID vaccination status," Gianforte education and workforce policy adviser Dylan Klapmeier wrote in an email.
Lance Melton, CEO of the Montana School Boards Association, said that interpretation erases the advantage vaccines could provide in schools, where vaccinated teachers and students 12 and older would not have to quarantine following an exposure under CDC guidance.
Aside from Missoula, many county health departments are still deciding what to do. Gallatin and Lewis and Clark counties both say they will drop quarantine orders, making it optional for people to follow CDC guidance.
Flathead County is leaning toward the same approach. Flathead County Health Officer Joe Russell said that would allow vaccinated students, teachers and county residents to return to school and work as long as they aren't showing COVID symptoms. Russell said the county can still order COVID-positive people to isolate.
"I don't think it's fair to punish someone that's fully vaccinated and tell them that they have to … stay home for eight to 10 days. How fair is that?" Russell said.
That means relying on unvaccinated people to do the right thing and stay home after they've been identified as a close contact.
The prospect terrifies Rebecca Miller, who has two children in the Bigfork School District in Flathead County, where masks won't be required in schools. Miller doesn't think parents who are desperate to keep their kids in school so they can keep working will follow the Flathead City-County Health Department's advice.
"Yeah, I think they're going to send them to school," she said.
Spurred by decades of complaints about the high cost of hearing aids, Congress passed a law in 2017 to allow over-the-counter sales, with hopes it would boost competition and lower prices.
Four years later, federal regulators have yet to issue rules to implement the law. But changes in the industry are offering consumers relief.
In August 2017, President Donald Trump signed the legislation that called for the Food and Drug Administration to issue regulations by 2020 for hearing aids that could be sold in stores without a prescription or a visit to an audiologist or other hearing specialist. That hasn't happened yet, and President Joe Biden last month ordered the FDA to produce those rules for over-the-counter (OTC) purchases by mid-November. That means it will likely take at least until next summer for consumers to feel the direct effects of the law.
Despite the delay, consumers' options have expanded with more hearing devices entering the market, alternative ways to get them and lower prices, particularly for the largest segment of the population with impaired hearing — those with mild to moderate hearing loss, for whom the law was intended.
Leading consumer brands Apple and Bose are offering products and several smaller companies sell aids directly to consumers, providing hearing tests and customer service online from audiologists and other hearing specialists. Even major retailers offer hearing aids directly to consumers and provide audiology services online: Walgreens stores in five Southern and Western states sell what the chain calls "FDA-registered" Lexie hearing aids for $799 a pair — far less than half the price of typical devices.
Nationally, personal sound amplification products, or PSAPs, that are smaller and customizable are now available in stores and online. These devices, which look like hearing aids and sell for a fraction of the price, amplify sounds, but some do not address other components of hearing loss, such as distortion.
"There are many more options than there were in 2017 when Trump signed the Hearing Aid Act into law," said Nancy Williams, president of Auditory Insight, a hearing industry consulting firm in New Haven, Connecticut. "In a sense, you can say the OTC revolution is happening without the FDA, but the difficulty is it is happening more slowly than if the FDA issued its rules on time."
The price for a pair of standard hearing aids typically ranges from $2,000 to $8,000, depending on the technology. That price includes the professional fitting fees and follow-up visits. The hearing aid industry has remained largely insulated from price competition because of consolidation among manufacturers, widespread state licensing laws that mandate sales through audiologists or other hearing professionals, and the acquisition of hearing professionals' practices by device makers.
The federal law creates a category of hearing aids that would legally bypass state dispensing laws and enable consumers to buy aids in stores without consulting a hearing aid professional. Users would be expected to program the devices through a smartphone, and companies could offer service via phone or internet.
With an increasing number of hearing aids and PSAPs being sold directly to consumers, advocates are eager for the FDA rules to come out, because they worry about the confusion caused by the array of choices — with none having the FDA's full seal of approval.
"The FDA delaying regulations has done more harm than good, because the direct-to-consumer market is filling the void and people are doing what they want, and we don't know the quality of these devices," said Barbara Kelley, executive director of the Hearing Loss Association of America, a consumer advocacy group.
The law, sponsored by Sen. Elizabeth Warren (D-Mass.), gave the FDA until August 2020 to issue regulations. Last year, after missing that deadline, FDA officials said the COVID-19 pandemic had delayed the rule-making process.
Many in the hearing aid industry are concerned about the unchecked competition likely to come with allowing consumers to buy aids on their own without an evaluation by a hearing specialist.
Brandon Sawalich, CEO of Starkey, the largest U.S.-based hearing aid company, said consumers need expert assistance to test their hearing, buy an appropriate aid, properly fit it and fine-tune its settings.
"It's not just picking up something off the shelf at your local drugstore or ordering something online and putting it in your ear and your life is going to be reconnected and you are going to hear perfectly again," he said on a recent podcast. "It doesn't work that way, and it's not that easy."
However, by avoiding professional help, more Americans likely can get hearing assistance. "The OTC and direct-to-consumer options open up avenues for those who have no other path to get hearing aids," said Hope Lanter, a Charlotte, North Carolina, audiologist with Hear.com, a Netherlands-based online hearing aid retailer.
She expects that after the FDA issues its rules many hearing aid manufacturers will develop lower-cost, over-the-counter devices that can be obtained without an audiologist's evaluation. She said consumers with modest hearing loss may start out with those types of aids, but later, if their hearing worsens, shift to more expensive devices that require assistance from hearing aid professionals.
"In my view, there is enough pie for everyone," Lanter said, noting that millions of people with hearing loss are not getting any help today. More than 37 million American adults have trouble hearing, including nearly half of people over age 60. Only 1 in 4 adults who could benefit from a hearing aid have ever used one, federal health officials estimate.
Unlike most consumer electronics, hearing aids have remained expensive for decades, generating consumer complaints.
The price is concerning because Medicare and many insurers don't cover hearing aids, though most private Medicare Advantage plans do. Only about half of state Medicaid programs cover the devices, but benefits in those states vary widely, according to data from KFF.
Industry experts predict new over-the-counter hearing aids will be priced at less than $1,000 a pair — about 25% lower than low-cost retailer Costco sells its Kirkland aids, dispensed through a hearing aid professional.
Without federal rules in place, manufacturers have largely waited to develop devices for the OTC market.
Bose chose a different path. This spring it began selling its hearing aids, which can be purchased online without a doctor visit, hearing test or prescription. Bose gained FDA clearance in 2018 after providing data showing the effectiveness of its self-fitting aids was comparable to that of similar devices fitted by a hearing professional. The Bose aids sell for $849 a pair.
Meanwhile, Apple last year integrated hearing assistance into its popular Air Pods Pro earbuds, which can be customized using settings on an iPhone. Apple is not marketing the free benefit as a hearing aid but instead as similar to a PSAP that amplifies sound to help hearing.
Several companies such as Eargo, Lively and Lexie allow consumers to buy aids online and get help from specialists to set them up remotely. As long as companies have generous return policies that enable people to try a couple of aids to see which works best, the proliferation of online options selling high-quality aids is good news for consumers, said Williams, the Connecticut hearing consultant.
Lanter said the stigma around hearing aids will be reduced as people obtain them more easily. She predicted consumers will someday buy hearing aids much as they can buy inexpensive reading eyeglasses at the drugstore today with the option to get a prescription for higher-quality glasses or ones with a more precise fit.
Michelle Arnold, an audiologist and assistant professor at the University of South Florida, said there is no evidence consumers will be harmed buying a hearing aid without seeing an audiologist, and the benefits of getting some improvement in their hearing outweigh any risks. "Will people get the maximum benefit? Maybe not, but it's better than nothing," she said.
After Russell Jordan sent a stool sample through the mail to the microbiome company Viome, his idea of what he should eat shifted. The gym owner in Sacramento, California, had always consumed large quantities of leafy greens. But the results from the test — which sequenced and analyzed the microbes in a pea-sized stool sample — recommended he steer clear of spinach, kale and broccoli.
"Things I've been eating for the better part of 30 years," said Jordan, 31. "And it worked." Soon, his mild indigestion subsided. He recommended the product to his girlfriend.
She took the test in late February, when the company — which sells its "Gut Intelligence" test for $129 and a more extensive "Health Intelligence" test, which requires a blood sample, for $199 — began experiencing hiccups. Viome had promised results within four weeks once the sample arrived at a testing facility, but Jordan said his girlfriend has been waiting more than five months and has submitted fresh blood and stool samples — twice.
Other Viome customers have flocked to social media to complain about similar problems: stool samples lost in the mail, months-long waits with no communication from the company, samples being rejected because of shipping or lab processing snafus. (I, too, have a stool sample lost in transit, which I mailed after a first vial was rejected because it "leaked.") The company's CEO, Naveen Jain, took to Facebook to apologize in late July.
Viome's troubles provide a cautionary tale for consumers in the wild west of microbiome startups, which have been alternately hailed for health breakthroughs and indicted for fraud.
The nascent industry offers individualized diet regimens based on analyzing gut bacteria — collectively known as the gut microbiome. Consumers pay hundreds of dollars for tests not covered by insurance, hoping to get answers to health problems ranging from irritable bowel syndrome to obesity.
Venture capitalists pumped $1 billion into these kinds of startups from 2015 to 2020, according to Crunchbase, buoyed by promising research and consumers' embrace of at-home testing. PitchBookhas identified more than a dozen direct-to-consumer gut health providers.
But not all the startups are equal. Some are supported by peer-reviewed studies. Others are peddling murky science — and not just because poop samples are getting lost in the mail.
"A lot of companies are interested in the space, but they don't have the research to show that it's actually working," said Christopher Lynch, acting director of the National Institutes of Health Office of Nutrition. "And the research is really expensive."
With nearly $160 million in government funding, the NIH Common Fund's Nutrition for Precision Health research program, expected to launch by early next year, seeks to enroll 1 million people to study the interactions among diet, the microbiome, genes, metabolism and other factors.
The gut microbiome is a complex community of trillions of bacteria. Research over the past 15 years has determined that these microbes, both good and bad, are an integral part of human biology, and that altering a person's gut microbes can fundamentally change their metabolism, immune function — and, potentially, cure diseases, explained Justin Sonnenburg, a microbiology and immunology associate professor at Stanford University.
Metagenomic sequencing, which identifies the unique set of bugs in someone's gut (similar to what 23andMe does with its saliva test), has also improved dramatically, making the process cheaper for companies to reproduce.
"It's seen as one of the exciting areas of precision health," said Sonnenburg, who recently co-authored a study that found a fermented food diet increases microbiome diversity — which is considered positive — and reduces markers of inflammation. That includes foods like yogurt, kefir and kimchi.
"The difficulty for the consumer is to differentiate which of these companies is based on solid science versus over-reaching the current limits of the field," he added via email. "And for those companies based on solid science, what are the limits of what they should be recommending?"
San Francisco-based uBiome, founded in 2012, was one of the first to offer fecal sample testing.
But as uBiome began marketing its tests as "clinical" — and seeking reimbursement from insurers for up to nearly $3,000 — its business tactics came under scrutiny. The company was raided by the FBI and later filed for bankruptcy. Earlier this year, its co-founders were indicted for defrauding insurers into paying for tests that "were not validated and not medically necessary" in order to please investors, the Department of Justice alleges.
But for Tim Spector, a professor of genetic epidemiology at King's College London and co-founder of the startup Zoe, being associated with uBiome is insulting.
Zoe has spent more than two years conducting trials, which have included dietary assessments, standardized meals, testing glycemic responses and gut microbiome profiling on thousands of participants. In January, the findings were published in Nature Medicine.
The company offers a $354 test that requires a stool sample, a completed questionnaire, and then a blood sample after eating muffins designed to test blood fat and sugar levels. Customers can also opt in to a two-week, continuous glucose monitoring test.
The results are run through the company's algorithm to create a customized library of foods and meals — and how customers are likely to respond to those foods.
Screenshots from Zoe's app show how my gut health and blood sugar and fat levels may react to eating my breakfast one day, a Nature's Bakery Fig Bar. The 1-to-100 scale is based on the company's analysis of my stool and blood tests. (Hannah Norman / KHN)
DayTwo, a Walnut Creek, California, company that recently raised $37 million to expand its precision nutrition program, focuses on people with prediabetes or diabetes. It sells to large employers — and, soon, to health insurance plans — rather than directly to consumers, charging "a few thousand dollars" per person, said Dr. Jan Berger, chief clinical strategist.
Based on a decade of research, DayTwo has worked with nearly 75,000 people. It sends participants a testing kit and survey, and arranges for them to chat with a dietitian while their stool sample is processing. Then, when the results come in, it makes recommendations, Berger said.
"I can still eat two scoops of ice cream, but I need to add walnuts in it to regulate my blood sugar," she offered as an example.
Viome says it has tested more than 200,000 customers and has published its methodology for analyzing stool samples, which is different from other gut health companies. But the paper does not address Viome's larger claims of connecting the microbiome to dietary advice, and researcher Elisabeth Bik called the claims "far-fetched" in a 2019 review of the preprint version.
Viome makes additional money by selling supplements, probiotics and prebiotics based on consumers' test results. It has also rebranded as Viome Life Sciences, expanding into precision diagnostics and therapeutics, such as saliva tests to detect throat cancer. Meanwhile, its gut health program has been mired in logistical missteps.
One customer who posted on Facebook tracked her sample through the U.S. Postal Service as it boomeranged between Los Alamos, New Mexico, and Bothell, Washington, where it was supposed to be picked up. Another fought for a refund after waiting six weeks to hear her sample was not viable and learning a second attempt had expired after spending too long in transit. The company's expected lab processing time jumped from four weeks in February, when Jordan said his girlfriend took her first test, to six in summer. (Three weeks after I mailed my second sample in July, it still hadn't made it to the lab, so I called it quits and asked for a refund.)
In CEO Jain's July apology posted to the private Facebook group for Viome users, he said the company recently moved its lab from New Mexico to Washington state, close to its headquarters, which prompted a mail-forwarding fiasco. It bought new robotics that "refused to cooperate," he wrote. "Many things didn't go as planned during the move."
Spokesperson Kendall Donohue said Viome has been working on the problems but laid much of the blame on the Postal Service.
She also said Viome has been notifying customers — even though many (including myself) had not been contacted.
It is Viome's "top priority right now to ensure complete customer satisfaction, but unfortunately USPS needs to sort the issue internally for further action to be taken," she said.
She also offered me a free "Health Intelligence" test. I declined.
Thousands of people have rushed to receive infusions of powerful antibody cocktails shown to reduce hospitalizations by 70% when given promptly to high-risk patients.
This article was published on Wednesday, August 25, 2021 in Kaiser Health News.
For months, Joelle Ruppert was among the millions of Americans who are COVID vaccine holdouts. Her reluctance, she said, was not so much that she opposed the new vaccines but that she never felt "compelled" by the evidence supporting their experimental use.
Nonetheless, after she fell ill with COVID last month, Ruppert, a Florida preschool teacher, found herself desperate to try an experimental product that promised to ease her symptoms: infusion with a potent laboratory-produced treatment known as monoclonal antibody therapy.
"I was in bed; I was feeling so badly, like the longest flu I ever had in my life," said Ruppert, 54, of Gainesville. "I was, like, whatever, give me whatever."
Ruppert and her husband, Michael, 61, who also contracted COVID-19, are among thousands of people in the U.S. who in recent weeks have rushed to receive infusions of the powerful antibody cocktails shown to reduce hospitalizations by 70% when given promptly to high-risk patients.
The rush has been fueled in no small part by governors in Southern states, where vaccinations lag and hospitalizations are soaring with delta-variant infections. Republican Govs. Ron DeSantis of Florida and Greg Abbott of Texas are among leaders touting the antibody treatments even as they downplay vaccination and other measures that health officials say can prevent illness in the first place.
Together, they have opened dozens of state-sponsored sites where monoclonal antibody therapy is offered, holding regular news conferences to endorse the potentially lifesaving benefits, while continuing to resist wider public health measures such as mask mandates and vaccine passports.
"Anyone that has a better-than-average risk with COVID, if you do get infected, this is something you can do early and potentially really make a difference," DeSantis said Saturday at the opening of a monoclonal antibody infusion site in Manatee County.
Since mid-July, delivery of the antibody cocktail made by Regeneron Pharmaceuticals has soared from 25,000 doses to 125,000 doses per week, with about half shipped to four states: Florida, Texas, Mississippi and Alabama, said Alexandra Bowie, a company spokesperson. The treatments use laboratory-produced molecules to replace, enhance or mimic the body's natural antibodies that fight infection.
The sudden spotlight on the antibody treatments has whipsawed some public health experts, who have struggled for months to create and sustain sites capable of offering the therapy. The treatment is delivered primarily through a one-dose intravenous infusion that takes about 25 minutes, followed by an hour of observation for reactions.
Antibody cocktails, which must be given within 10 days of COVID infection or exposure, are effective for many patients, but "this is not a substitute for vaccine, by any means," said Dr. Christian Ramers, chief of population health and an infectious disease specialist at Family Health Centers of San Diego.
"It's a backwards strategy," said Ramers. "It's so much better to prevent a disease than to use an expensive, cumbersome and difficult-to-use therapy. It does not make any medical sense to lean into monoclonals to the detriment of vaccines. It's like playing defense with no offense."
The cost of Regeneron infusions: about $1,250 a dose. For now, the federal government is covering the cost.
The federal government is also covering the costs of COVID vaccination, at about $20 a dose.
Hospitals and infusion centers also charge for the time- and resource-intensive administration of monoclonal antibody treatment. Medicare has agreed to pay providers between $310 and $450 for performing it in healthcare settings — and $750 for treatment in a patient's home.
Some patients who receive the treatment may be charged similar amounts for copays and administration fees, depending on what a hospital charges and what their insurance covers. DeSantis has emphasized that the treatment is provided at no cost to patients at Florida's state-run sites.
The Food and Drug Administration authorized two monoclonal antibody treatments for emergency use for COVID in November, weeks after President Donald Trump credited Regeneron's product for curing his infection. Since then, use of a cocktail made by Eli Lilly has been halted because it wasn't effective against some COVID variants. In May, sotrovimab, a monoclonal antibody made by the pharmaceutical firm GlaxoSmithKline, also received emergency authorization.
The treatment is authorized for people newly infected with COVID at high risk of hospitalization and for high-risk patients who have been exposed to the virus. Those eligible include a wide swath of the American public: people who are overweight or obese; those who have diabetes, heart disease or other illnesses; and those with compromised immune systems.
The COVID vaccines also were authorized under emergency-use protocol. This week, the Pfizer-BioNTech vaccine was granted full approval for use in people 16 and older.
Christina Pushaw, a DeSantis spokesperson, said criticism of efforts to promote monoclonal antibody therapy amounts to "a false choice."
"Prevention and treatment are not mutually exclusive," she said in an email. "Both monoclonals and vaccines save lives. The difference is that vaccines are preventative and cannot help someone who is already infected with COVID-19."
Some health officials welcomed the attention to monoclonal antibody therapy generated by DeSantis and others, saying the treatment has been undervalued and underused. The federal government has shipped more than 1.3 million doses of monoclonal products to nearly 6,300 sites, according to the Department of Health and Human Services. So, far, about 637,000 doses — or fewer than half — have been used.
"It's not about vaccination. It's about a treatment for COVID that can keep patients out of the hospital," said Connie Sullivan, president and chief executive of the trade group National Home Infusion Association. "This isn't about politics. This is about patients at risk."
Still, some unvaccinated people appear to view the antibody treatments as a backup plan if they get sick, several health officials said.
At Memorial Hospital Pembroke in South Florida, Chief Nursing Officer David Starnes has overseen treatment of more than 2,000 patients with antibody cocktails since December. At least 90% of the patients have been unvaccinated — and the numbers keep climbing.
"What's amazing to me is that a vaccine we've been working on for 10 years, they are deathly afraid of," Starnes said. "But this highly experimental cocktail? They're willing to run in there the minute that they're sick to get this infused into their bodies."
Even those confounded by the emphasis on monoclonals over vaccination in some states say this new attention to the treatment has helped counter a basic public relations problem: Until recently, awareness of monoclonal treatments, often called mAbs, was low, leaving patients in danger of missing the 10-day window for treatment.
Utah, where fewer than half of residents are vaccinated, is among the states hosting an intensive, coordinated effort to reach people in time. Officials at the Intermountain Healthcare system, based in Utah, pulled together a team of volunteer medical professionals, dubbed "the mAb squad," who scan lists of newly positive COVID patients and call those who meet eligibility criteria to connect them with the treatment.
Dr. Curt Andersen, a family medicine physician and an associate medical director with Intermountain Healthcare, said he's seeing lists of 70 to 80 patients every day because of the delta surge. "I talked to this one gentleman who got treated. Then his wife got treated. Then his mother, who was at very high risk," Andersen said. "On the phone, he broke down in tears because we had this resource and he was so grateful."
Ruppert, the Gainesville preschool teacher, said she, too, was grateful. She and her husband both felt better within days of being treated at UF Health Shands Hospital. The experience has caused her to rethink how to protect herself and her family from COVID.
"Now that I've been there, I have a completely different perspective on this," said Ruppert, who will be eligible for vaccination in mid-October, 90 days after the antibody infusion. "I most likely will be vaccinated."
For years, Kayla West watched the opioid epidemic tear through her eastern Tennessee community. As a psychiatric nurse practitioner, she treated people with mental illness but felt she needed to do more to address addiction.
So in 2020, when the state created a position to help hospitals improve addiction care in the emergency room, West jumped at the opportunity.
She knew that many people with substance use disorders land in the ER, and that starting medications for opioid use — like buprenorphine (often known by the brand name Suboxone) — could double a person's chance of staying in treatment a month later.
A recent report from the Legal Action Center and the Bloomberg American Health Initiative found that despite widespread consensus on the importance of addiction treatment in the ER and an unprecedented rise in overdose deaths, many hospitals fail to screen for substance use, offer medications to treat opioid use disorder or connect patients to follow-up care.
Many patients who don't receive those services die shortly after discharge or within a year of their ER visit, the report said.
But a growing number of emergency rooms and health professionals are trying to change that by developing new approaches to address the missed treatment opportunity in ERs.
"We know it's possible because others have done it," said Sika Yeboah-Sampong, an attorney with Legal Action Center and co-author of the report. "You have a combination of levers and kinds of structures of how different cities, counties, states and even independent hospitals adopt these practices."
These models have already been put in place in some big hospitals and small hospitals, rural areas and urban centers, those with ample resources and those on tight budgets, she said.
In Tennessee, West looked to several of them for helpful guidance as she developed a pilot program with one hospital she advises. "It's like looking at a smorgasbord of options of where you can implement change," she said. Here are just a few of the different strategies emerging from ERs across the United States:
Advocating for the Patient in California
Daniel Browne started drinking alcohol and using prescription opioids at age 14. By the time he was 24, he was on the verge of losing his job, his car and his apartment.
"I didn't know where else to go to get treatment other than the ER," he said.
In May 2020, Browne drove 15 minutes from his home to Adventist Health Howard Memorial Hospital in Willits, California, where he was immediately met by Mary Anne Cox Gould. At the time, Cox Gould was a substance use navigator for a program called CA Bridge. She championed addiction treatment in the hospital and helped connect patients from the ER to clinics in the community. (Cox Gould is now a supervisor of other navigators in Adventist Health hospitals.)
"She met me in the parking lot even before I went into the ER," Browne recalled.
She stayed with him as he received his first dose of buprenorphine, which provided immediate relief from withdrawal symptoms. "Once you're not facing the crippling detoxification, it's much easier to not relapse," Browne said.
Cox Gould then walked him over to the hospital's outpatient clinic and helped him schedule recurring appointments. When Browne ran into obstacles filling his buprenorphine prescription at a local pharmacy, she made all the necessary arrangements for him to get it from the hospital.
Now more than a year into recovery, Browne said he's become a more reliable employee and has reconnected with his parents and younger brother — successes he credits partly to the medication and consistent support he's received.
Those are hallmarks of the CA Bridge program, said executive director Serena Clayton. Medication is considered a key element of treatment. Connecting patients with a navigator helps them in long-term recovery. And having navigators in the ER creates a more welcoming environment for patients, and gives ER staff a chance to learn more about addiction, she said.
The model is currently used by about 130 hospitals in California, and the state has allotted $40 million to expand the program to more than 100 others. The funds cover the salaries of substance use navigators, training for ER staff on prescribing buprenorphine and other technical assistance.
"This doesn't have to be a one-off story about a really special hospital," Clayton said. "It can happen at scale."
Removing Obstacles for Patients and Doctors in New York
Patients with addiction face many barriers to recovery, said Dr. Joshua Lynch, an associate professor of emergency medicine at the University at Buffalo. But doctors who want to help them also encounter hurdles, he said.
ER physicians are short on time, often lack training for addiction-related issues and don't know where to refer the patients for follow-up care. To improve the situation, both sets of barriers — for patients and for doctors — must be addressed, Lynch said.
That was his goal in creating New York MATTERS, a program that gives patients access to buprenorphine and links them to addiction clinics to continue treatment. It also provides pharmacy vouchers that cover 14 days of medication and Uber vouchers to cover transportation to the clinic — all through an electronic referral system.
"Being able to offer all of this without having to make any phone calls is probably what makes the doctors most likely to use it," Lynch said.
The program, partially funded by the state Department of Health, includes 38 hospitals and 94 clinics across New York that are vetted to ensure they provide buprenorphine to those who want it and accept patients regardless of insurance status. Providers in any participating ER can bring up a map of the clinics on a tablet and let patients choose where they'd like to be referred.
"This patient population is used to being told 'no' or 'that's not possible' or 'you have to go to this place,'" Lynch said. "We want to inspire them by giving them these choices."
Most patients pick a clinic close to home or where they know a friend had a good experience, Lynch said.
He estimated about 55% of patients in the program make it to their first appointment, where they can receive medication and therapy. National figures suggest fewer than 10% of patients addicted to opioids receive similar treatment.
Lynch said the cost for any hospital or clinic to join the program is minimal, since it mostly leverages existing resources, and the state hosts the data for the referral platform. Expanding the program to facilities across the entire state would cost less than $4 million a year, he said.
Training Everyone in North Carolina
Dr. Blake Fagan is chief education officer at the Mountain Area Health Education Center in Asheville, North Carolina. For years, when he approached hospital ERs to offer addiction training, he heard a common refrain.
"We don't have any place to send patients afterwards," he said doctors told him.
Without a clear place for patients to continue treatment, the doctors were reluctant to even start medications for opioid use. That's when Fagan and his colleagues realized their training had to extend beyond hospitals.
They reached out to federally qualified health centers, which treat people regardless of insurance status. In a state without Medicaid expansion and with large rural expanses, these centers serve many people with addiction.
Using just over $1 million in grant funding from two foundations, the Mountain Area Health Education Center trained 11 health centers and two local health departments over the past year and a half to provide medications for opioid use disorder. From March 2020 to May 2021, those centers treated more than 400 patients with the disorder.
Dr. Shuchin Shukla, who heads the program alongside partners at the University of North Carolina- Chapel Hill, said the centers have become obvious referral spots for doctors who start patients on medication in the ER.
"We consider ourselves a model for how to do this in a Medicaid non-expansion state," Shukla said.
North Carolina also has programs to train medical students, residents, nurse practitioners and physician assistants in addiction care.
Dr. Sara McEwen, executive director of the nonprofit Governor's Institute, which has helped to incorporate the training into medical school curricula, said students who see addiction prevention and treatment as a routine part of medicine will naturally apply that when they reach the ER or other clinical settings.
In fact, a recent study at Wake Forest School of Medicine found 60% of medical students who received the education reported using it during their internships.
"The learning is coming from med students to residents, up the chain," said Paige Estave, a co-author of the study and a doctor of medicine/Ph.D. candidate at the school. "Students bringing it up will cause doctors to start thinking, talking and finding resources. … Hopefully, those little pieces of change will add up cumulatively to something more."
Measuring Success
Across these varied models, one essential question remains: Do they work?
Unfortunately, it's also one of the most challenging to answer, according to addiction researchers and those who run the programs. Many projects are still in the early phases and won't be able to measure success for another few years. Others are struggling to gather long-term data that's necessary for evaluation.
In North Carolina, for instance, McEwen knows more than 500 medical students receive the addiction training each year, but until they complete residency and practice on their own, it's difficult to gauge how many will prescribe buprenorphine to their patients. In New York, Lynch can estimate how many patients make it to their first appointment at a clinic, and a recent study of the CA Bridge program tracked how many patients were given buprenorphine across 52 hospitals. But those numbers don't indicate how many patients achieved long-term recovery. That would require tracking patients for months and years.
In the meantime, people like West who are looking to these models as guideposts must operate with a level of uncertainty. But she said she'd rather get started now than wait for the perfect solution.
"Any movement on this is a step in the right direction," West said. "I've learned that no matter how varied your resources are, there are options for change in your ER."
The new contract – which is retroactive to July 15, when the old contract expired and expires on April 30, 2025 -- ends a month-long public spat.
Dignity Health and Anthem Blue Cross have signed a four-year contract that allows Anthem's beneficiaries in-network access to Dignity.
The new contract – which is retroactive to July 15, when the old contract expired and expires on April 30, 2025 -- ends a month-long public spat between the San Francisco-based provider and Indianapolis-based Anthem.
In posts on its website, Dignity called Anthem the "nation's largest for-profit insurance company," and noted that it recorded $1.7 billion in profits in Q1, which went to shareholders and was "not reinvested in patient care or expanded access."
In return, Anthem called Dignity "one of the more expensive health systems in California. We cannot, and will not, agree to excessive rate increases that will make care at Dignity even less affordable for those we serve."
All that appears to be water under the bridge for the two organizations, both of whom declared victory.
"We are pleased to continue working with Dignity. While we understand this wasn’t easy for consumers, it was necessary for us to stand firm as part of our efforts to help slow the sharp rise in healthcare costs," Anthem Regional Vice President John Pickett said. "Our members remained our number one priority as we worked hard and in good faith to find common ground and reach an agreement with Dignity that helps protect affordability."
Robert Quinn, MD, CEO of Dignity Health Medical Foundation called the new contract "a win for our patients."
"From the beginning, our goal in working with Anthem has always been about ensuring we can continue to meet the needs of our patients today and in the future," he said. "This agreement ensures we can continue to provide value-driven care for Anthem members."
College is a time of transition, but for those managing chronic medical conditions, it may also be the first time they will be wholly responsible for their own health: setting appointments, securing supplies and pharmaceuticals, and monitoring symptoms.
For those heading to schools far from home, it can be especially tricky navigating the complex world of insurance to pay for such crucial care. Coverage networks from back home might not cover a patient's new doctors or a trip to an urgent care clinic. New plans may not cover the same medicines or procedures.
Ensuring continuity of care and having medical support at school allow students to better pursue their studies and enjoy the college experience, health experts said. They recommend students and their families study up before heading to campus. Make calls to local or university health center providers and secure appropriate insurance to help make a smooth transition.
"You have to do some real due diligence to make sure you have the right protections," said Erika Emerson, executive director of the Diabetes Leadership Council. "There are some things that are OK to whiff on, like if some things don't happen and you learn a hard lesson, fine. Healthcare isn't one of those things where there is a whole lot of forgiveness for mistakes that can be costly in terms of health outcomes and, certainly, financially."
Income-Based Plans
Sam Grover was turning 26 around the time he headed from Utah to New York City for a medical school program. Per federal law, he would no longer be eligible to remain on his parents' insurance after his birthday.
Grover, who has Type 1 diabetes, needed to be able to pay for his medical supplies, including a continuous glucose monitor, pump and insulin that keep his blood sugar levels in a safe range. After exploring his options, he enrolled in Medicaid, the federal-state health insurance program for low-income Americans.
"Growing up, I never saw myself as someone who would be in need, but then times changed, and I got diabetes, and I turned 26, and I didn't have a job," said Grover, who has one year left in medical school before beginning his residency. He said he hopes his work as a doctor will help make good on the help he received as a student from the government-sponsored health program.
Medicaid coverage varies by state. Grover found that Medicaid in Utah didn't cover continuous glucose monitoring, for example, but he said New York's program covers all his medical needs.
"It's been the biggest blessing," he said, adding that the cost of equipment and supplies to manage diabetes is expensive. "Just knowing that I am able to manage my diabetes while I am a student alleviates a lot of stress and anxiety that comes with having diabetes."
Medicaid benefits are typically valid only in the state where the plan originates, and not all states have expanded coverage to more adults under the Affordable Care Act. If Medicaid isn't an option, experts said, individual coverage through ACA insurance exchanges can be good options for students, especially if they can use federal tax credits and subsidies to make those plans more affordable.
As with most insurance options, students must clearly understand whether coverage extends beyond the location of their university, and if it covers specialist care and required medications. They also need to be aware of which ongoing out-of-pocket costs they're responsible for.
A Parent's Insurance
For many students younger than 26, remaining on a parent's or guardian's insurance might be the best option. Experts said it is imperative to read the fine print to be certain coverage is comprehensive and extends to where they attend school.
Both of Kathy Przywara's children have asthma, and one has food allergies. Both left California to attend schools in rural Pennsylvania. After doing research, the family kept both on their existing insurance policy, but they still had to find in-network providers near the two schools.
While they were able to transfer one student's prescriptions to a national chain pharmacy, that was not an option for the other. Przywara, who is also senior community director for the Asthma and Allergy Foundation of America, worked with a local pharmacy to ensure prescriptions were filled. The pharmacy already had a delivery program in place to the school's health center, making it easier for students to obtain medications.
Przywara said mail-order pharmaceuticals, if covered by insurance, might also be an option for students. Some insurance covers prescriptions for multiple months of medication.
"Know what's in your policy and make sure that the things you are going to need are covered," Przywara said. "It's important to keep your condition managed. That means access to your physicians and to your medication, or else the financial burden gets worse."
Despite one's best efforts, Pryzwara and others cautioned, emergencies can happen. Therefore, it is important for students to determine whether urgent and emergency care centers nearest them are in their network. Under the Affordable Care Act, initial emergency care should be covered but other services might not be.
University-Sponsored Insurance
Many schools require students to have health insurance and offer university-sponsored plans, said Jake Baggott, a past president of the American College Health Association and an associate vice chancellor of student affairs at the University of Wisconsin-Madison. He said that while some university health programs are equipped to deal with more complex medical issues or diagnostics, others are not. Students need to be clear on the details, such as whether their policy covers off-campus care.
Shay Webb, 22, a University of North Carolina-Wilmington graduate student earning a master's in clinical research and product development, thought she was covering her bases when she purchased a university-sponsored policy in 2017 as an undergrad. She got the policy to help offset the out-of-pocket expenses for her Type 1 diabetes not covered by a parent's insurance policy.
After moving onto campus, Webb was diagnosed with rheumatoid arthritis. She believed the student policy would help cover her increasing medical expenses.
Several months later, she learned her claims weren't being processed. The insurer told her it would not pay the claims because she was not attending class in person even though she had remained a full-time student, lived on campus and had no say in whether classes were online or in person. The online program was part of the university's effort to simulate the real-world experience of professionals in her field.
"I was just in shock," Webb said. "No one had ever told me."
Webb and her family were left with thousands of dollars in unexpected medical bills.
"Unexpected health costs are a tremendous burden," Baggott said, adding that for students who may be taking on tuition debt, unexpected health costs can make things much more difficult to manage. Baggott and others said students should seek assistance from campus staff members, advocacy organizations or other experts should any issues occur.
The Bottom Line: Know the Details Before Signing
Before someone commits to an insurance plan, it is important to understand the specific type of plan, which entity is offering it and exactly how coverage works. If problems arise, students should be sure they can switch plans as needed.
The Partnership to Protect Coverage, a consortium of patient advocacy organizations, issued a report stating that insurance rules implemented during the Trump administration have allowed for the proliferation of plans that do not comply with the Affordable Care Act. These plans, such as short-term insurance options and healthcare sharing ministries, expose enrollees to financial risk, especially people with preexisting and chronic medical conditions.
"Exhaustively look through all of your options. Look through benefit plans. Call providers. Call the insurance company," said Erin Hemlin, director of health policy and advocacy at Young Invincibles, a group based in Washington, D.C., that focuses on improving the economic security of young adults. "Double- and triple-check to ensure your child is going to be in a plan that is going to be there when they need it."
Richard "Dickie" Scruggs, famous for taking on Big Tobacco in the '90s and winning, worked on a series of ill-fated national lawsuits against nonprofit hospitals.
Healthcare — and how much it costs — is scary. But you're not alone with this stuff, and knowledge is power. "An Arm and a Leg" is a podcast about these issues, and its second season is co-produced by KHN.
Richard "Dickie" Scruggs, famous for taking on Big Tobacco in the '90s and winning, worked on a series of ill-fated national lawsuits against nonprofit hospitals. The goal? Get nonprofit — or "charity" — hospitals to actually provide charity care instead of price-gouging and dunning low-income patients.
Scruggs didn't exactly score a total victory — some hospitals kept behaving shamefully. And he lost big, eventually.
But he did help start important changes.
For instance: We've been following the work of Jared Walker, who went viral on TikTok, spreading the word that nonprofit hospitals are legally obligated to provide charity care. That obligation didn't exist when Scruggs launched those lawsuits.
For the next few episodes, we'll tell some of the stories about how that change happened — it's a wild ride, and Scruggs wasn't the only player (or the most effective) — and how folks today are pushing that work forward.
This episode relies on audio from The Kindling Group documentary "Do No Harm."
And researchers with the Innovation for Justice Program at the University of Arizona are looking at hospitals' debt collection practices, and how laws or regulations could do a better job protecting people. They're looking to talk to people who have been sued over medical bills. If that's you, or someone you know, here's a link to get in touch: bit.ly/talkmeddebt. It's a 30-minute interview, and it is all anonymous.
Cone Health, a small not-for-profit healthcare network in North Carolina, spent several years developing a smartphone-based system called Wellsmith to help people manage their diabetes. But after investing $12 million, the network disclosed last year it was shutting down the company even though initial results were promising, with users losing weight and recording lower blood sugar levels.
The reason did not have to do with the program's potential benefit to Cone's patients, but rather the harm to its bottom line. Although Cone executives had banked on selling or licensing Wellsmith, Cone concluded that too many competing products had crowded the digital health marketplace to make a dent.
"They did us a tremendous favor in funding us, but the one thing we needed them to be was a customer and they couldn't figure out how to do it," said Jeanne Teshler, an Austin, Texas-based entrepreneur who developed Wellsmith and was its CEO.
Eager to find new sources of revenue, hospital systems of all sizes have been experimenting as venture capitalists for healthcare startups, a role that until recent years only a dozen or so giant hospital systems engaged in. Health system officials assert many of these investments are dually beneficial to their nonprofit missions, providing extra income and better care through new medical devices, software and other innovations, including ones their hospitals use.
But the gamble at times has been harder to pull off than expected. Health systems have gotten rattled by long-term investments when their hospitals hit a budgetary bump or underwent a corporate reorganization. Some health system executives have belatedly discovered a project they underwrote was not as distinctive as they had thought. Certain devices or apps sponsored by hospital systems have failed to be embraced by their own clinicians, out of either skepticism or habit.
"Even the best healthcare investors can't reliably get their health systems to adopt technologies or new innovations," said James Stanford, managing director and co-founder of Fitzroy Health, a healthcare investment company.
Some systems have found the business case for using their own innovations is weaker than anticipated. Wellsmith, for instance, was premised on a shift in insurance payments from a fee for each service to reimbursements that would reward Cone for keeping patients healthy. That change did not come as fast as hoped.
"The financial models are so much based on how many patients you see, how many procedures you do," said Dr. Jim Weinstein, who championed a health initiative similar to Cone's when he was CEO of the Dartmouth-Hitchcock health system in New Hampshire. "It makes it hard to run a business that is financially successful if you're altruistic."
Though their tax-exempt status is predicated on charitable efforts, nonprofit health systems rarely put humanitarian goals first when selecting investments, even when sitting on portfolios worth hundreds of millions of dollars or more, according to a KHN analysis of IRS filings. Together, nonprofit hospital systems held more than $283 billion in stocks, hedge funds, private equity, venture funds and other investment assets in 2019, the analysis found. Of that, nonprofit hospitals classified only $19 billion, or 7%, of their total investments as principally devoted to their nonprofit missions rather than producing income, the KHN analysis found.
Venture capital funds are a potentially lucrative but risky form of investment most associated with funding Silicon Valley startup companies. Because investors seek out companies in their early stages of development, a long-term horizon and tolerance for failure are critical to success. Venture capitalists often bank on a runaway success that ends up on a stock exchange or in a sale to a larger company to counterbalance their losses. As an asset class, venture capital funds assets annually return between 10% and 15% depending on the time frame, according to PitchBook.
While they lack the experience of longtime venture capitalists, health systems posit that they have advantages because they can invent, incubate, test and fine-tune a startup's creations. Children's Hospital of Philadelphia, for instance, parlayed a $50 million investment into a return of more than $514 million after it spun off its gene therapy startup Spark Therapeutics.
Many hospital-system venture capital funds, both established and new entrants, have grown rapidly. The largest, run by the Catholic hospital chain Ascension, has been in business for two decades and this year topped $1 billion, including contributions from 13 other nonprofit health systems eager to capture a piece of the returns.
Providence, a Catholic health system with hospitals in seven Western states, launched its venture capital fund in 2014 with $150 million and now has $300 million.
Cleveland-based University Hospitals launched its own fund, UH Ventures, in 2018. "We were candidly late to the game," said David Sylvan, president of UH Ventures.
UH Ventures yielded $64 million in profits in 2020, Sylvan said, which pushed University Hospitals' net operating revenue from the red to $31 million. Sylvan said the largest income contributor from UH Ventures was its specialty pharmacy, UH Meds, which provides medications to people with complex chronic conditions and helps them manage their ailments.
Another UH-supported startup, RiskLD, uses algorithms to monitor women and their babies during delivery to alert clinicians of sudden changes in conditions. It is used in UH's labor and delivery units. Sylvan said it is being marketed to other systems. UH Ventures' webpage touts the financial advantages for avoiding lawsuits, calling RiskLD "the first and only labor and delivery risk management tool designed to address birth malpractice losses."
But sustained commitment is harder when the return on investment is not clear or immediate. In 2016, Dartmouth-Hitchcock, which operates New Hampshire's only academic medical center, tested its remote monitoring technology, ImagineCare, on 2,894 employee volunteers. ImagineCare linked a mobile app and Bluetooth-enabled devices to a health system support center staffed by nurses and other Dartmouth-Hitchcock workers. The app tracked about two dozen measurements, including activity, sleep and, for those with chronic conditions, key indicators like weight and blood sugar levels. Worrisome results triggered contact and behavioral coaching from the Dartmouth-Hitchcock staff.
Dartmouth-Hitchcock found healthcare expenditures for the people with chronic conditions dropped by 15% more than matched controls. Nonetheless, in 2017, with the product facing unexpected technology challenges and the health system saddled with a short-term deficit, Dartmouth-Hitchcock scrapped the experiment and sold the technology to a Swedish company in return for potential royalties.
"We didn't have the capital as a small health system," said Weinstein, now senior vice president of innovation and health equity for Microsoft. "It wasn't a venture investment to make money; in fact, we probably would have lost revenues on admissions. But it was the right thing to do."
ImagineCare has found a more receptive home in Sweden. Two regions of the public healthcare system as well as a private healthcare organization have decided to deploy it as their remote monitoring service, according to ImagineCare's CEO, Annette Brodin Rampe. The company expects to have 10,000 patients enrolled by year's end.
Wellsmith, Cone Heath's diabetes platform, suffered an even rockier trajectory. The concepts were similar, but Wellsmith was initially tailored to people with Type 2 diabetes. Data on weight, activity, blood sugar and patients' compliance on taking medication was uploaded manually or through Bluetooth-enabled devices and sent to a small team of nurses and health coaches at Cone, who would contact those with disquieting signs.
Cone tested Wellsmith on 350 employees with Type 2 diabetes and reported encouraging results in 2018. Users' physical exercise had increased on average by 24% and their A1c levels, which measure the percentage of red blood cells with sugar-coated hemoglobin, had dropped by 1 point on average. "We believe that the future will be carried by those who can invest in and create models of care like Wellsmith," said Terry Akin, Cone's CEO at the time.
But Cone grew apprehensive about Wellsmith's commercial prospects, especially when other companies started pitching similar products. In its 2018 financial statement, Cone wrote that "management has determined that the existing technology will not be marketed for sale and licensing." In October 2020, Cone decided to end its relationship with Wellsmith and shut it down this year, according to its financial statement.
Cone declined requests for interviews. In an email, Cone spokesperson Doug Allred wrote: "Unfortunately, a number of well-funded competitors established similar platforms. This has made it difficult to scale our platform to more customers and develop more partnerships. Due to these factors we made the difficult decision to sunset the Wellsmith platform."
In interviews, Teshler said Cone had originally viewed the product as complementary to its efforts to move away from a traditional fee-for-service payment system. But she said alternative models — such as those in which insurers pay a set fee for each patient, providing doctors and hospitals with an incentive to keep spending low — remained the arrangement for a minority of Cone's patients: those enrolled in Cone's Medicare Advantage plans and accountable care organizations.
"The problem with these kinds of solutions — not just us — is it requires people to have digital devices that aren't normally covered by health insurance," she said.
Wellsmith's business plan was to charge a per-member monthly fee to organizations using it. Teshler said Cone did not want to pay Wellsmith a fee when it had already lent it millions, since it couldn't bill insurers for the service.
Other obstacles arose as well, according to Teshler. She said Wellsmith's development was delayed when the second version of the software was a "dismal failure" and needed to be revamped. To further complicate matters, Cone began entertaining a merger with another health system, making the long-term financial commitment to Wellsmith uncertain. "And then we hit COVID and it was game over," Teshler said.
Teshler said she is still developing her concept, though, under her contract with Cone, Wellsmith's software had to be destroyed when they split ways. She wants to market Wellsmith's successor to primary care medical practices that contract directly with employers — groups that benefit when medical claims are reduced. She does not see other hospital systems as viable customers.
"It's very simple for their attention to be diverted by the fact that their job is to keep people alive," she said. Also, unless an innovation is unique, she said, "everybody's got a fund, and nobody is going to buy anyone else's product."