Advocates say the letters throw a lifeline to low-income people who need vital medical care for injuries caused by the negligence of others and don’t have the money or insurance coverage to pay for it.

That never happened.

Louis-Charles, 68, died hours after the operation at a South Florida outpatient surgery center in March 2019. The surgery center had put him in an Uber with his wife, Marie Julien, according to depositions. After a 60-mile ride home, he collapsed, court records show.

Her husband’s death left Julien to deal with more than $100,000 in medical debt, as described in the “letter of protection,” or LOP, that Louis-Charles had signed.

In signing an LOP, people generally pledge to cover the costs of their care even if it exceeds what they win in a lawsuit or other settlement — and even if the prices are far higher than most doctors would charge.

The agreements are legal and binding in many states, though Florida appears to be the epicenter of their use in personal injury cases. Advocates say the letters throw a lifeline to low-income people who need vital medical care for injuries caused by the negligence of others and don’t have the money or insurance coverage to pay for it. Doctors and surgery centers that accept LOPs say they often wait years for a lawsuit to settle before being paid, if at all.

A KHN investigation found that letters of protection can saddle patients with medical debt — and drive a personal injury care system that operates with little oversight despite widespread complaints of grossly inflated billings and other problems that can place patients at risk.

Marie Julien blamed Dr. Kingsley R. Chin — a controversial Hollywood, Florida, surgeon who has accepted LOP payments for more than a decade — for her husband’s death after the spinal fusion procedure. Last year, she filed a malpractice suit against Chin alleging that Louis-Charles died after he “was discharged home while still in pain and with signs and symptoms of post-operative complications.” In court papers, Chin denied any negligence.

“We felt that the way the whole thing happened was very bizarre,” Julien, 71, a certified nursing assistant, recalled in a deposition taken in the case.

A ‘Terrible Situation’

Just before 8 a.m. on New Year’s Day 2018, Louis-Charles’ car was stopped at a red light near his home. Suddenly a white police vehicle, driven by a Palm Beach County Sheriff’s Office detective, backed into his Toyota Corolla, hitting the passenger side door, according to a police report.

In her deposition, Julien said Chin operated on her husband’s shoulder in 2018. But that didn’t help much, and Chin recommended more extensive surgery, she said. “I wasn’t happy at all with that idea,” she added.

Julien said she relented because Louis-Charles’ pain was getting worse “day by day” and he had confidence in the surgeon. The Aventura Surgery Center in Hallandale, Florida, where Chin had served as medical director, sent an Uber to collect the couple the morning of March 12, 2019, Julien said.

During the two-hour spinal fusion, Chin replaced three disks with an implant he invented, according to his deposition. The patient spent an hour or so in a recovery room before a nurse wheeled him out to a waiting Uber just after 3 p.m., according to Chin’s testimony.

Louis-Charles couldn’t speak, but signaled he was in pain and struggled to breathe during the hourlong ride home, according to Julien’s deposition. She helped him walk through the front door of their Riviera Beach home. Once inside he collapsed, she testified.

A fire rescue crew rushed him to a hospital in West Palm Beach, where he died just after 5:30 p.m., according to a Palm Beach County Medical Examiner’s autopsy report. The medical examiner ruled the death an accident caused by “post-surgical bleeding with airway compression.”

In his deposition, Chin said that Louis-Charles “looked great” heading out to the car and that traveling along the urban Interstate 95 corridor the driver was “at any given time probably within 10 minutes or so” from a “major hospital or emergency room.”

Chin called the outcome a “terrible situation” and told Julien’s lawyer during the deposition: “I just hope you can appreciate how much I regret what happened.”

Asked how her husband’s death has affected her life, Julien said: “How can you find words to explain such a thing?” The couple wed in 1987 in Miami after moving from their native Haiti, where he worked as a house carpenter.

“It’s been almost two years now. I have not been able to sleep on [the] bed” she shared with him, she said.

In late September, Julien and Chin settled the suit under confidential terms and the bills were “written off,” according to Kevin Smith, an attorney who represented Julien. Chin has denied any liability.

‘A Mixed Bag’

Though little-known to the public, letters of protection are commonly used to finance major medical care in personal injury cases, including costly orthopedic surgery.

Attorneys who refer injured clients to willing doctors say the liens are their best tool for ensuring clients not only gain access to care, but also are in a position to win fair settlements from insurance companies that fight to minimize their liability and costs.

An LOP form used by some Florida medical providers says they agree to wait for payment as a “courtesy” to the injured person, adding in boldface: “We understand insurance companies have unlimited resources, will hire defense lawyers and defense experts that will cause our payment to be delayed for months or years.”

The business community and insurers counter that LOP providers grossly inflate their medical fees to give juries a false picture of the costs of medical care.

“The sole purpose of the LOP, why it exists, is to drive up verdicts and settlements,” Lauren McBride, a lawyer for Publix Super Markets, a chain with more than 800 stores in Florida, testified in a state legislative hearing in February 2019.

McBride said that nearly two-thirds of “slip-and-fall” injury claims in Publix stores involve letters of protection. In more than half those cases, the injured person had some form of insurance but declined to use it, she said. In some cases, injured people traveled long distances for costly care they could have received closer to home at far less expense, she said. She also argued that LOPs give doctors an incentive to overtreat patients “to keep driving up medical bills” — and persuade juries to award big verdicts.

Kevin Leahy, an Austin, Texas, lawyer who has researched the practice there and represented clients on both sides of the debate, said LOPs deserve more scrutiny. “It’s a mixed bag,” he said. “There are definitely abuses going on. There are also hurt people getting care they need to get better.”

Leahy said LOPs have helped create a “liability-based” health care network with few checks on its financial dealings or other standards. He called it “unregulated, opaque and not fully accurate about charges.”

Across the country, LOPs have been tied to a range of alleged medical overcharges or other billing abuses, court records show.

Nearly 200 women from 42 states, for example, have joined a class-action suit that alleges doctors and lawyers talked them into signing LOPs promising to pay for surgical removal of pelvic mesh — whether they needed it removed or not.

The women allege that the doctors billed sky-high rates and told them their insurance would not cover the cost, so signing an LOP was the only way to safeguard their health. Private insurance would have paid about $8,000 for these services, far less than the $76,000-plus the women were charged under the LOP, according to the suit, filed in late August. The case is pending. Six doctors have filed motions to dismiss the case.

In a 2020 federal civil case, evidence emerged that a Texas spine surgeon charged nearly $400,000 under an LOP for procedures that Medicare would reimburse at less than $20,000, court records state.

Reviewing court cases in Florida, KHN found dozens of examples in which patients who signed LOPs alleged they were later sued for payment of excessive fees or received substandard medical care.

‘Unnecessary and Dangerous’

On the day of his spinal surgery, Louis-Charles signed a letter of protection that read in part: “While I am injured and need care, I cannot financially afford to pay your bill at the time services are rendered, I therefore, grant this provider a lien on my claim against any and all proceeds from any settlement, insurance benefits or judgment.”

The documents said he would be charged “what is usual and customary for our area.” But the fees were much higher than private health insurance would cover or what the Medicare fee schedule provides for.

The Aventura Surgery Center, co-owned by Miami personal injury attorney Sagi Shaked, billed nearly $100,000 for the operation, court records show. Two other Shaked-affiliated companies billed more than $35,000 for surgical supplies and anesthesia, according to the court records. Shaked did not respond to numerous requests for comment. In his deposition, Chin said he no longer operates at the Aventura Surgery Center.

Mark Woodard, 54, who was rear-ended in an April 2017 car crash in Fort Lauderdale, had three spine operations at the Aventura Surgery Center performed by Chin under a letter of protection.

His bills topped $430,000, including $179,500 for the surgery center, $177,972 billed by Chin’s medical office and $39,327 for implants from SpineFrontier, a Massachusetts medical device company Chin owns, court records show.

“These charges are way out of line,” said Michael Arrigo, a medical billing expert in California asked by KHN to review Woodard’s bills. Arrigo said “usual and customary” charges would be less than one-fourth of what was billed.

Woodard, who has worked as a painter and maintenance technician at beachfront hotels in Fort Lauderdale, argues in his lawsuit that his injuries from the crash were “nothing more than cervical and lumbar sprains and strains … such that no reasonable physician would have performed surgery other than for monetary purposes.”

According to Woodard’s lawsuit, Chin persuaded him to have multiple operations and during one tore a 1-centimeter hole through a nerve root, leaving him in “extreme agony and excruciating pain.”

The suit, filed in March 2021, alleges the surgery center offered Chin a “safe haven to perform his unnecessary and dangerous surgeries.” It also alleges that Chin “was unable to perform surgery at any hospital in the state of Florida and most if not all surgery centers where he had applied had either denied him privileges or he had his privileges revoked at multiple hospitals.” In court filings, Shaked has denied the allegations and any liability.

Chin also has denied any negligence in court filings and in a deposition called the fees he charged “reasonable within the community.” Woodard’s lawsuit is pending in Broward County Circuit Court.

Chin has been sued repeatedly for medical negligence, including several cases involving LOPs. He has been sanctioned by physician-licensing boards in three states, unrelated to his use of LOPs.

In early December, the Florida Department of Health, which licenses doctors, issued Chin a “letter of concern” and fined him $8,000. The action settled a state administrative complaint alleging that in August 2019 Chin sent home a 73-year-old man who suffered from complications of spinal surgery who should have been transferred “to a higher level of care in an inpatient setting (such as a hospital).” Chin disputed the allegations.

Separately, federal agents arrested Chin in early September in Fort Lauderdale on kickback charges as CEO at SpineFrontier, which sells spinal implants he invented and used in operations on Louis-Charles and Woodard. Chin has denied the civil allegations and has pleaded not guilty to the criminal charges.

In October, a federal judge ordered Chin to post a $500,000 bond secured by his Florida home. He is free to travel within the country “for business purposes only” and may travel one time per month to Jamaica “only for the purpose of practicing medicine there,” the order states. Chin has active medical licenses in Florida, Arizona, New Jersey, New York and in Jamaica, according to documents he filed with the court.

A ‘Complete Shock’

By its own account, the Broward Outpatient Surgical Center and its affiliates in Pompano Beach, Florida, have treated more than a thousand patients under letters of protection. But the billing practices — one lawsuit called its fees “astronomically unreasonable and inflated” — have been criticized in court filings for years. These cases often settle under confidential terms.

One patient argued in a lawsuit that injured patients were “bounced around” a web of affiliated clinics for services that included chiropractic care, pain injections, physical therapy and, finally, surgery, all done with no caps on the costs. The center denied the allegations, and the case has since been settled.

Albert Frevola, an attorney for the center, said that prior to treatment patients are given a price list and sign an agreement to pay the bills out of any settlement of their personal injury claims. He said the center serves many patients “who can’t afford to get medical care. It’s a service that is valuable and needed.”

Some three dozen former patients have filed a recent mass tort lawsuit alleging medical malpractice and billing fraud by the surgery center and its owners, chiropractors Brian and Craig Bauer, who are brothers. The suit also names spine surgeon Dr. Merrill Reuter, court records show. Neither Reuter nor his lawyer responded to requests for comment.

The patients allege they visited the center after a car crash or other accident and were persuaded to have spinal surgery. In some cases, the operations either were billed as more complex than they were, or not done at all, according to the suit. Patients often have run up bills of $100,000 or more under LOPs, court records show. “Due to the fact that personal injury patients rarely, if ever, use their private health insurance for such health care services, the Bauers and the Bauer entities were able to get away with charging inflated amounts,” according to the suit.

Frevola, who represents the brothers, said they “flatly deny” the allegations and “are sad and distressed that these accusations are being made by the same people they gave great care and medical treatment to.”

In a separate malpractice case, Terrell Harris, 37, alleged he was guided down a “treatment path” after a car crash in July 2017 that ended in surgery at prices “far beyond the scope of reason, let alone custom.” The center denied the allegations and filed a counterclaim accusing Harris of failing to pay for his care under the LOP.

The suit is one of eight pending in Broward County Circuit Court that make similar claims, including that of a woman who alleged she had the same pain after spinal surgery as she had beforehand. Nearly five years later, to her “complete shock,” an MRI found no evidence the operation she was billed for had been done, according to the suit.

In a February 2020 court filing in one of the cases, the center and Brian Bauer denied the allegations and called them “frivolous and scandalous.” They filed a counterclaim demanding to be paid for their services. The case is pending.

Warring Creditors

When fees are inflated under an LOP, patients can take home more money under an insurance settlement or jury verdict. But if a case settles for less than the sum of those bills, patients may be on the hook to pay the balance.

Lawyers who typically co-sign the LOPs try to persuade medical providers to reduce their fees, which often happens. When that fails, however, lawyers file a court action called an interpleader, which asks a judge to decide who gets what among warring creditors.

KHN reviewed dozens of Florida court cases in which medical creditors holding LOPs demanded payment in full. While many of these cases settled under confidential terms, court records show some accident victims ended up mired in debt or saw their damage awards drastically reduced by outsize medical billings and legal fees. In some cases, lawyers took home more than their injured clients.

That happened to Jose Merced, who fell and hurt himself after stepping into a hole outside his apartment in the Orlando area. He received a $75,000 settlement but incurred bills of more than $850,000 for operations and other medical costs, which he contested as “highly inflated,” court records show. The bills included more than $700,000 in orthopedic surgical and facility fees.

In August 2020, a judge allowed just over $35,000 to pay for the surgeries. Merced was awarded $10,000, while his lawyer got nearly $27,000, just over $18,000 of it for professional fees and the rest for expenses.

In some interpleader cases, lawyers asked judges for one-third of the total settlement for their fees, plus expenses, which can add hundreds, if not thousands, of dollars more to their share.

A law group founded by South Florida personal injury lawyer Robert Fenstersheib filed at least 50 interpleader cases in Broward County Circuit Court between January 2019 and October of this year. Fenstersheib, who was a fixture of local television ads as the “lawyer who listens,” was shot to death by his son in a murder-suicide in September 2020, though his Fenstersheib Law Group still operates under his relatives.

Many of the LOP patients now suing the Broward Outpatient Surgery Center and its owners were clients of the Fenstersheib firm, court records show. The center and the law firm did business for years, but the center sued the law firm in 2019 alleging the lawyers failed to pay it millions of dollars owed under LOPs. The law firm responded that it was a victim of a $6.5 million embezzlement by former employees who pocketed settlement money meant for the center. The suit was settled under confidential terms this year.

Federal prosecutors filed criminal charges against two former Fenstersheib employees in connection with the theft. In late November, one of the men, Michael Wihlborg, a 47-year-old high school dropout who had worked for the law firm for nearly two decades, admitted receiving more than $2.1 million in stolen funds from the scheme; he pleaded guilty to one count of conspiracy to commit wire fraud and three counts of filing a false income tax return, court records show. He faces up to 29 years in prison, according to court records. Co-defendant Matthew Matlock pleaded guilty to similar charges on Dec. 15, court records show. The law firm had no comment.

Ethics Question

Some lenders also accept LOPs as collateral for patients who borrow money to tide them over while their personal injury case winds through the courts, which typically takes years. Interest charges pile up fast.

A Miami man who was injured after a pile of wood fell on him at a home improvement store borrowed $51,400 from a finance company backed by an LOP in September 2014. He owed the company $140,322 three years later because of an interest rate of 18% charged every six months, court records show.

Doctors also can generate cash from letters of protection. While they argue they must wait years for payment, some spine surgeons sell the liens on a burgeoning medical debt market.

Court records in Florida show millions of dollars of these liens have changed hands when doctors sold them. Buyers paid 10% to 25% of the total amount of the bill and gambled they would be able to collect a tidy profit once a patient’s lawsuit was settled.

The ethics of doctors wheeling and dealing in patient bills and having a financial stake in the outcome of litigation has been questioned. An American Medical Association policy says such deals are unethical because “there is the ever-present danger that the physician may become less of a healer and more of an advocate or partisan in the proceedings.”

Dr. Scott Lederhaus, a retired California neurosurgeon who has reviewed personal injury cases for the defense, said some patients argue in depositions that under an LOP they never saw bills, so they had no idea of the extent of the medical costs they were incurring over time.

Lederhaus said there is little agreement on what is a reasonable medical fee and, as a result, doctors “are able to charge whatever they want” in personal injury cases.

And it remains unclear whether the No Surprises Act, which Congress passed last year amid a national outcry over huge and unexpected medical bills, offers patients who signed LOPs any protection.

“A lot of these doctors are under the impression they can do whatever they want and there’s not going to be any oversight by anyone,” Lederhaus said.

The need for boosters and the looming threat of the omicron variant have made COVID communication extra challenging.

By Heidi de Marco

Since the start of the pandemic, Luz Gallegos and her team of 56 advocates for immigrants have battled the scorching sun, illiteracy and deadly propaganda in the fields and fruit groves of the Coachella Valley.

As they fanned out to educate farmworkers on how to protect themselves from covid-19, they quickly learned that rumors and disinformation often account for most of the news farmworkers in the area are getting about the disease. The need for boosters and the looming threat of the omicron variant have made covid communication extra challenging.

“Now, we’re debunking the myths with the boosters. It’s like a never-ending story,” said Gallegos, executive director of the TODEC (Training Occupational Development Educating Communities) Legal Center, based in Coachella.

Gallegos and her team huddle in the mornings to discuss a strategy on how to diffuse misinformation before it spreads. “Once we start hearing rumors, we try to get ahead of them and create messaging to debunk it before they start penetrating the fields like they did when we first started vaccinating in January.”

In January, the word in the fields was that covid vaccination would make you sterile. Now, people hear from friends and social media that the vaccines can turn you into a monkey, change your gender or clone you.

Gallegos and Riverside County health workers managed earlier in the year to get vaccines into the arms of most farmworkers in the valley, where dates, citrus and grapes are the dominant crops. That has eased the sales job for some of her crew of TODEC employees and volunteers.

“People that got vaccinated, they feel like they’re still here, they’re still alive,” she said. “People see science now.”

But equity issues that were evident in the first round of vaccines are more evident now, including access to health care, language barriers and misinformation, Gallegos said. Some workers don’t understand why they need a follow-up shot. Others are newcomer migrants who haven’t been vaccinated against covid at all.

Community health organizations have struggled to provide booster shots for the Latino community — whose members account for more than half of covid cases in California. By September, about 80% of eligible Latinos had received at least one shot, the same rate as whites. But of the 23.4 million people 65 and older who had received a booster dose by Dec. 13, only 7.8% were Latinos (who make up nearly 10% of that age group), according to the Centers for Disease Control and Prevention. Latinos of other ages were also relatively unboosted.

“Latinos don’t know who to turn to for accurate information,” said Gilberto Lopez, an assistant professor at Arizona State University who has been working on vaccine communication. “The government hasn’t been doing the best job, the big national TV channels haven’t been doing that good of a job, and community organizations are working at a hyper-local level.”

One basic problem: Credible vaccine information and the science that supports it is not readily available in Spanish or other languages, said Dr. Yelba Castellon-Lopez, an assistant clinical professor in family medicine at UCLA Health. “People are afraid to contract the virus in health care settings. Many avoided seeking care even when they were sick for fear of being put on ventilators, afraid they would never make it out of the hospital.”

The county has partnered with TODEC to send health care providers out to the fields and hold open vaccination and booster clinics on Fridays. This answers immigrants’ fears of going to the doctor and their concerns that side effects from the shot will cause them to miss work.

“Fridays gives them the opportunity to actually recover,” said Gallegos.

Castellon-Lopez has been conducting webinars for patients and community members to dispel myths and explain the shifting reality of the covid epidemic. “What we’re learning about covid is changing every day and that makes it difficult,” she said. “I think people appreciate having access to doctors who look like them and speak the language.”

Disinformation on Spanish AM radio, social media and messaging apps like WhatsApp is fueling continued vaccine hesitancy among Latinos, according to a recent survey conducted by Change Research and the Latino Anti-Disinformation Lab. It found that almost 4 in 10 respondents had seen information that made them think the covid vaccines were not safe or effective.

Latino educators are seeking to smother misleading propaganda with culturally relevant, easy-to-understand, accurate information.

Lopez, at Arizona State University, created the Covid Health Animation Project, which makes cartoons that address covid misinformation. But he thinks health communicators need to inject some bawdiness into their scripts to get people’s attention.

“The type of comedy, the type of messaging, the wording we use, it’s G-rated,” said Lopez. He just published an animation that drops a few cuss words here and there. “That’s the way this population talks. We need to use some of the language that they use to reach out to the community that’s not getting vaccinated.”

Language barriers remain a consistent issue, especially for Indigenous-language speakers, said Odilia Romero, executive director of Comunidades Indígenas en Liderazgo (CIELO), a Los Angeles nonprofit.

Pablo Ek Oxte, a 52-year-old plumber from a small pueblo in Yucatán, Mexico, rolled up his sleeve for a booster shot on a recent Saturday morning after hearing about the vaccine clinic in a public service announcement produced by CIELO in his native Mayan language. The group has posted a series of vaccination cartoons in various Indigenous languages on social media sites.

“I relied on the information from CIELO,” said Oxte, who has asthma and diabetes. Although he speaks some Spanish, “I appreciate the information in my language,” he said.

In Oxnard, California, Francisco Didier Ulloa and Bernardino Almazán host a show on Radio Indígena in Spanish and Mixteco, an Indigenous Mexican language.

“A lot of our Indigenous brothers don’t speak Spanish, so it was necessary to convey the information in a way that they would listen and understand,” said Ulloa.

The Los Angeles County Department of Public Health has increased its social media memes and is testing strategies to narrow the vaccination gap between white and Latino residents. The state partnered with political cartoonist Lalo Alcaraz to create a series of cartoons and animations promoting vaccination and booster information.

“We want people to see themselves and their families reflected in these images and maybe do a double take and think twice about their own family’s situation,” said Alcaraz. “Maybe it changes their mind about the vaccine.”

Closures provide opportunities for regional chains or pharmacists willing to strike out on their own.

Bill Mather, a pharmacist in the small Iowa city of Greenfield, wanted to make sure his neighbors could fill their prescriptions without driving long distances or enduring long wait times.

So when pharmacy chains and big-box stores began expanding into rural markets, he sold his drugstore in 2007 to Pamida, a grocery chain owned by the Shopko department store company, hoping that would keep his practice alive. Then, in 2019, when Shopko declared bankruptcy, shuttering more than 360 stores, he and another Shopko pharmacist helped open a new drugstore for the city of about 2,000 people.

Across the country, pharmacists like Mather are filling the voids left when large drugstore chains and big-box stores with pharmacies pull out of small communities. In some areas, pharmacists who were let go when big chains closed are now opening new drugstores, often in the same locations. In other areas, pharmacy owners from neighboring towns are opening new branches. Without them, numerous communities would have been left with no pharmacy.

It didn’t used to be this way. Big-box stores like Shopko started to move aggressively into the pharmacy market 30 years ago, hoping customers would fill their carts while the store filled their prescriptions. Large chains established beachheads in small towns by acquiring independent pharmacies or driving them out of business.

According to the Bureau of Labor Statistics, the number of pharmacists employed at big-box stores peaked at more than 31,800 in 2012. But as online sales and mail delivery of consumer goods and prescription drugs grew, the big-box stores had no reason to stay. By 2019, the number of big-box pharmacists had dropped to fewer than 18,000. (The bureau no longer reports the number.)

“The big-box stores came into smaller and smaller communities, and they, in essence, outcompeted all the other pharmacies in the area,” said David Zgarrick, a pharmacy professor at Northeastern University in Boston. “Now they’re completely gone and with them the pharmacy services and everything else they provided. They left a vacuum in a lot of these places.”

With CVS Health’s recent announcement that it will close 300 stores a year over the next three years, more towns could lose another tier of pharmacies: the big drugstore chains. CVS has not yet said which stores will close.

“We’re considering a number of factors when making these decisions, including local market dynamics, population shifts, store density, and the needs of underserved communities,” said Mike DeAngelis, a CVS Health spokesperson. “In fact, reaching underserved populations has been a priority for us all through the pandemic, such as the access to testing and vaccines we’ve provided.”

Kathleen Bashur, a spokesperson for the National Association of Chain Drug Stores, said chain pharmacies of all types and sizes play a significant role in meeting the health and wellness needs of communities throughout the nation. “The decision to close a store is a difficult one,” she said.

Zgarrick attributes much of the decline in big-box pharmacies to Amazon and other online merchants that undercut the profitability of their non-pharmacy sales. In the past, big-box stores could treat pharmacies as loss leaders and make up that revenue with sales of other goods. Now, Zgarrick said, big-box stores have to ask tough questions about how to allocate their space: “‘At the end of the day, how are we going to make the most money per square foot? Is it by having a pharmacy or by selling tires?’”

Nelson Lichtenstein, a University of California-Santa Barbara history professor who has chronicled the rise of Walmart, said big-box stores are constantly reevaluating their store locations, closing less profitable stores and opening new ones in places where they think they can make money.

“They just keep a kind of slow churn,” he said.

The cost of building a big-box store is about $10 million, Lichtenstein said, and such stores can net $200 million in annual revenue. Pulling out of a location is therefore not a huge loss for a big company if revenues falter.

“So they will shut down the stores and leave a devastated town because the Walmart put the other guys out of business,” he said.

Walmart did not answer questions about its closures.

The growth in online options for all kinds of items, spurred by people shopping from home during the covid-19 pandemic, has put further pressure on big-box stores.

“Now they’re less likely to do that roaming shopping than they were five years ago,” said Adam Hartung, a business strategy consultant with Spark Partners. “They’re not going to say, ‘Oh, let’s pick up a prescription and, while we’re at it, let’s walk through the store and look at vacuum cleaners.’ That doesn’t happen anymore.”

Hartung said that the U.S. retail market has an excess of shops, by as much as 40% compared with other countries, and that more big-box stores are likely to close in the coming years.

But closures provide opportunities for regional chains or pharmacists willing to strike out on their own.

In Orofino, Idaho, the mayor, the chamber of commerce and many residents appealed to pharmacist Rod Arnzen after Shopko pulled out. So Arnzen began delivering to Orofino from his store 23 miles away in Kamiah. He then opened a branch in Orofino in the building left behind by the pharmacy that had previously sold its business to Shopko.

Andy Pottenger, who owns a pharmacy 45 miles away in Lewiston, Idaho, added a second pharmacy in Orofino, population about 3,000, after receiving hundreds of responses to an ad he had placed in the local paper to gauge interest.

“It was overwhelming,” he said. “That kind of cemented the idea that we should do it.”

In Montana, Mike Matovich, a third-generation pharmacist, opened stores in Roundup and Hardin after Shopko closures there.

“It’s a pretty good-sized community and has a hospital and clinic in town,” Matovich said of Roundup, “and all of a sudden people are driving 50 miles one way to fill an antibiotic for a sick child.”

Matovich has seen what can happen when a rural community loses its only pharmacy.

“If there’s a hospital clinic and a pharmacy there, they’re going to do fairly well,” Matovich said. “Once you lose one or the other, the communities start to struggle because people start leaving to be closer to health care.”

For the residents of Greenfield, Iowa, Shopko’s decision meant they had to scramble. Shopko had sold the pharmacy records to a Walgreens 50 miles away. Some people turned to the Hy-Vee grocery stores in the nearby Iowa cities of Atlantic or Winterset, or to the Walmart in Creston — each at least a half-hour drive away. Others switched to mail order.

“It was sheer chaos,” former Shopko pharmacist Rachel Hall said. “People were trying to figure out what to do, where they should send their prescriptions.”

Mather, Hall and the rest of the Greenfield staff were given just one week’s notice after being told they had nothing to worry about. Their pharmacy had been among the chain’s fastest-growing locations.

“We literally had trophies from Shopko that we threw away when we left,” Hall said.

Former Shopko executives contacted by KHN declined interview requests. Shopko Optical, which operates in 11 states, said it is no longer affiliated in any way with Shopko Stores and declined to comment.

Mather and Hall didn’t want to give up on Greenfield. They reached out to NuCara, a chain with 30 retail pharmacies across five states, and it agreed to help them open a drugstore in their city.

NuCara opened pharmacies in two other communities that Shopko vacated. In the Minnesota cities of Cokato and North Branch, NuCara partnered with pharmacists who had previously sold their pharmacies to Shopko, said Brett Barker, vice president of pharmacies for NuCara.

In Greenfield, Hall and Mather were forbidden from telling customers about the new NuCara drugstore until Shopko officially closed its doors. Hall said Shopko management wanted to maintain the value of the customer files it was selling to Walgreens. So Hall and Mather asked the local chamber of commerce to get the word out.

They found temporary space at the local hospital, which relocated its billing office to accommodate them. A year later, they moved back into their former location in the old Shopko building, leasing the space from new owners, who were running a household goods store there.

After serving three generations of Greenfield customers, Mather was relieved the town still had a pharmacy. But he couldn’t get past how Shopko had ended things.

“The way they slammed the door, I was really unhappy about that,” Mather said. “It wasn’t fair to all the people at the Greenfield pharmacy and the people of Greenfield. Shopko couldn’t have cared less.”

Yet the move brought Mather full circle. Greenfield still has a pharmacy, just as when he started at Murdy Drug in 1968. It’s just a different storefront, with a new name on the sign.

Pharmacies were once routinely bequeathed from one generation to the next, but, in interviews with more than a dozen pharmacists, many said the pressure of running an independent drugstore have them pushing their offspring toward other careers.

This article was published December 17, 2021, by Kaiser Health News.

By Markian Hawryluk

Ted Billinger Jr. liked to joke that he would work until he died. That turned out to be prophetic.

When Billinger died of a heart attack in 2019 at age 71, he was still running Teddy B’s, the pharmacy his father had started more than 65 years earlier in Cheyenne Wells, Colorado. With no other pharmacist to work at the store, prescriptions already counted out and sealed in bottles were suddenly locked away in a pharmacy that no one could enter. And Cheyenne Wells’ fewer than 800 residents were abruptly left without a drugstore.

Pharmacies were once routinely bequeathed from one generation to the next, but, in interviews with more than a dozen pharmacists, many said the pressure of running an independent drugstore have them pushing their offspring toward other careers. And when they search for a buyer, they often find that attracting new pharmacists, especially to rural settings, is difficult. With a large group of pharmacists nearing retirement age, more communities may lose their only drugstore.

“It’s going to be harder to attract people and to pay them,” said David Kreling, a professor emeritus at the University of Wisconsin-Madison School of Pharmacy. “If there’s not a generational thing where someone can sit down with their son or daughter and say that they could take the store over, there’s a good chance that pharmacy will evaporate.”

Tom Davis, Billinger’s friend and co-owner of Kiowa Drug in Eads, Colorado, stepped in to sort out the mess in Cheyenne Wells. With permission from the State Board of Pharmacy, the county sheriff let Davis into Teddy B’s in the eastern Colorado town to take an inventory of the remaining drugs. Customers who had dropped off their prescriptions before Billinger died were able to pick up their medications.

Davis then bought the pharmacy from Billinger’s estate. He runs it as a convenience store and six days a week delivers prescriptions to it from Eads, 44 miles away.

“By the time you paid a pharmacist, the location there was borderline unprofitable,” Davis said.

He has received numerous requests to open pharmacies in other eastern Colorado towns, but making that work financially would be difficult. Reimbursements from insurance plans have dwindled, and customer bases have eroded as health insurers push patients toward mail-order deliveries.

“I fill prescriptions every day where my reimbursement is less than the cost of the drug,” Davis said. “In other settings, you might tell a patient, ‘We don’t have that in stock,’ or ‘Why don’t you go down the street to the chain?’ But down here, we just take care of our patients, and we just eat it.”

He can survive, he said, because, after 48 years, he no longer has any business debt.

“I look at my bottom line,” Davis said. “With the amount of profit that I had at the end of the year, that would not have been enough if I was having to pay a mortgage.”

Studies have found the number of pharmacists nationally to be sufficient, even more than enough, to meet current needs, although supply and demand don’t always line up. Finding pharmacists is more difficult in rural areas.

“Once they get a taste of the big city,” Kreling said, “it’s hard to get them back to the farm.”

Workforce data also shows worrisome trends. Concerns about a shortage of pharmacists led the federal government to pour money into pharmacy schools in the 1970s, creating a temporary bump in the number of graduates. The people in that bulge in the pharmacist pipeline have hit retirement age.

“Many of them owned independent pharmacies, and they were working in rural communities,” said University of Minnesota pharmacy professor Jon Schommer, who studies workforce issues.

Now, as the demand for pharmacists to provide testing and vaccinations during the covid-19 pandemic increases, drugstore chains are offering incentives — such as large salaries, signing bonuses and help paying off school loans — that are often more enticing than anything a rural pharmacy could muster.

How pharmacy graduates envision their careers has also shifted. Many no longer want to own a pharmacy and are content to work at pharmacy chains or other health care organizations, according to several pharmacy school professors. As of 2018, only about half of pharmacists worked in traditional retail drugstores.

That makes rural recruitment more difficult.

Denise Robins had worked at R&R Family Pharmacy in Springfield, Colorado, for 18 years when the owner retired. She and three family members bought the drugstore in a last-ditch effort to keep it open.

“None of us are pharmacists, so that made it a little tougher,” Robins said. “We just knew it was really going to make it hard for people here if they had to travel an hour to get to a pharmacy.”

But finding a pharmacist to work in the southeastern Colorado town of fewer than 1,400 people was a challenge. The first pharmacist Robins found commuted 48 miles one way from Lamar. But after a year and a half, the trip became too much.

She then hired someone who wanted to work for only a year, to make enough money to travel. Then Robins interviewed two University of Colorado pharmacy school graduates. She hired one, but that didn’t work out. So she called back the second candidate, who still had not found a permanent job. He had two young kids, and he and his wife were working opposite schedules. He took the job two years ago and has remained there since.

In Berryville, Virginia, pharmacist Patricia White opened Battletown Pharmacy in 2011 because she wanted to carry on the family business. Her father had owned a local pharmacy and had recently died. But when turning a profit with Battletown proved a struggle, White decided to retire.

She lined up two potential buyers, but neither went through with the sale. She then hoped to transfer the pharmacy to a recent graduate but didn’t want to saddle him with a failing business.

“I told him he couldn’t make any money, and he said, ‘Thanks for being honest,’” White recalled.

Closing seemed like the only palatable option. Battletown shut down at the end of August. “I did not want to sell out to a chain,” she said. “That’s always been my mentality.”

When a chain buys a pharmacy, it doesn’t always decide to run it. Instead, it might close the pharmacy and transfer the pharmacy’s prescription files to one of its outlets. Retiring pharmacists who spent decades serving a community generally don’t want to see that happen, said David Zgarrick, a Northeastern University pharmacy professor.

“They’d like to sell their pharmacy to another pharmacist who would continue to run it very much in the same manner,” he said.

Some plan ahead, hiring another pharmacist and offering that person an equity stake in the business. Over time, the new pharmacist can buy out the owner. Many independent pharmacist-owners plan to live off the profits from selling their pharmacy, its inventory and its prescription records.

“Their pharmacy is their retirement savings,” Zgarrick said.

But, Zgarrick said, the added pressure from the pandemic may be pushing more pharmacists into retirement. And a long-running bull stock market may mean some pharmacists have enough in their retirement portfolios to call it quits without a sale.

In Eads, Davis, 70, still loves being a pharmacist. He and his brother co-own seven pharmacies and have started to plan for retirement by hiring five young pharmacists and allowing them to buy ownership stakes in those pharmacies over time.

He had wondered how long he could keep the Kiowa pharmacy running, though. With fewer than 700 residents, Eads may be the smallest town in Colorado with a pharmacy. Combining Davis’ customer base with Cheyenne Wells’ may have saved pharmacy access for both communities.

“So maybe where we could have lost two pharmacies in the area, we’ve been able to exist. We’re stronger now than we had ever been,” Davis said. “That wasn’t the original plan. We cared about those people and just wanted to take care of them.”