Unintended Consequences of Pandemic Hospital Bailouts May Hasten Their Demise

This article was originally posted June 9, 2020 but was accidentally deleted and this is a repost as the article has been cited and comments are posted in various media.

We can thank the Covid pandemic for revealing the fissures in America’s healthcare system, especially how large hospital corporations continue to be focused on earnings over community healthcare. This article examines how the federal pandemic money (CARES Act) for hospitals exacerbated the problem, through distribution to the wealthiest hospital systems and not the struggling rural ones. A similar phenomenon was observed for the farm bailouts when giant agricultural corporations ended up with the money and not the small farmers. The continual winnowing of our nation’s food suppliers and healthcare resources weakens national health. Doling out money without restrictions and lacking a needs-profile for the hospitals resulted in the federal government giving billions based on how much money the hospitals already billed for services. This is like providing a sewage treatment plant to a city that already has one and leaving the neighboring community to treat its own effluent. Further, no other country spends wildly in healthcare, with fewer community health benefits. All funding for healthcare, which is largely paid for by the government through tax subsidies and government financed programs, as well as steep individual contributions in the private sector should be needs-based. We can’t expect the Trump Administration to understand these criteria since it has given billions to the wealthiest while stripping school lunch money from children. This article analyzes the fraying network of urban trauma centers and rural hospitals, with suggestions to abate the hemorrhaging.

Hospitals at Risk

Becker’s Hospital Report found that 20% of US hospitals are at risk of closure as of April 20, 2020. (Ellison, State By State Breakdown of 354 Hospitals At Risk of Closing, 2020) In real terms that means 354 hospitals are potentially unsustainable and 81% of those are considered critical to the community. In my home state, Washington, 18% of rural hospitals are in danger of failure and this isn’t as dire as many states where 50% of theirs could fail. Hospitals provide jobs, help economic development, and offer critical healthcare. Here is a list of the states where the greatest percentage of their hospitals are threatened with closure due to inadequate cash on hand:

1.       Tennessee-68%

2.       Alabama-60%

3.       Oklahoma-60%

4.       Arkansas-53%

5.       Mississippi-50%

6.       West Virginia-50%

7.       South Carolina-44%

8.       Georgia-41%

9.       Kentucky-40%

10.   Louisianna-37%

Hospitals at risk of failure in Washington State (Ellison, 2020)

Columbia County Health System in Dayton is a farming community which serves a county-wide population of 4,058. The nearest hospital is in Walla Walla which is a half-hour drive by car.

Mid-Valley Hospital in Omak (4,806) is a mountainous community in the Okanogan and serves a countywide population of 41,000

Three Rivers Hospital in Brewster is also in the Okanogan region and is in a town of 2,364 people. Seems like Mid-Valley and this one should combine forces.

Grays Harbor Community Hospital in Aberdeen is a fishing and logging community which serves a countywide population of 75,000. The next nearest hospitals would be Olympia or Shelton, both about and hours drive.

Whidbey Health Medical Center in Coupeville, the Whidbey Island County Seat has a population of 1,959 people. Since there is another hospital on the island in Oak Harbor, this wouldn’t be as critical if it succumbs.

To See How Your State Hospitals Fair

Here is the link to the statewide list: https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing

Covid-19 Hospital Bail-out Impact

In this latest government give-a-way most of the money went to the elite health care organizations, including local, Providence Healthcare, which is technically a nonprofit by statute, but makes so much money it has its own venture capital fund (12 billion in cash reserves), generating a billion dollars annually. (Jesse Drucker, 2020) And not to be outdone, lush Cleveland and Mayo Clinics also received millions. My former employer, Ascension Health, which is a Catholic hospital chain, makes so much money it has its own venture capital fund (15.5 billion in cash reserves) and it too received federal bail-out money. This table shows cash reserves and CARES fund distribution: (Liss, 2020)

Hospital Group	Cash in Reserves	Government Bailout
Ascension Health	15,500,000,000	211,000,000
Cleveland Clinic	7,000,000,000	199,000,000
Mayo Clinic	10,600,000,000	150,000,000
Providence Health	12,000,000,000	509,000,000
HCA (for profit)	51,300,000,000	1,000,000,000
Tenet (for profit)	731,000,000	517,000,000

This government largess was despite the fact all of these mega corporations have plenty of cash in reserves, so the government funding was to ensure their profits. Worse yet, the money they were given starves small rural hospitals which may be forced to close. I can’t think of a better example of the American “winner-take-all philosophy, but is this really how we should be running our critical healthcare system? It is impossible to research this and not feel the US government is cannibalizing its own health system.  This demonstrates another systemic failure in US healthcare, which puts profits ahead of patient health. I knew it was time to leave healthcare when the hospitals preferred hiring people without a healthcare background, the easier it is to put patients out of the equation if you think of them as widgets.

This article was written by Roberta Winter, an independent journalist and health policy analyst, who has published under the healthpolicymaven trademark since 2007. Please feel free to share this article virally.

References

Ellison, A. (2020, March 6). Five Hospitals Face Imminent Closure As Covid-19 Wreaks Havoc. Beckers Hospital Review. Retrieved June 8, 2020, from https://www.beckershospitalreview.com/finance/5-washington-hospitals-face-imminent-closure-as-covid-19-wreaks-havoc.html

Ellison, A. (2020, April 9). State By State Breakdown of 354 Hospitals At Risk of Closing. Becker Hospital Report. Retrieved June 8, 2020, from https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing.html

Jesse Drucker, J. S.-G. (2020, May 25). Wealthiest Hospitals Get Billions in Bailbouts for Struggling Providers. The New York Times. Retrieved June 8, 2020, from https://www.nytimes.com/2020/05/25/business/coronavirus-hospitals-bailout.html

Liss, S. (2020, May 26). Here's How Much For Profit Hospitals Have Received In Bailout Money So Far. Healthcare Dive.com. Retrieved June 8, 2020, from https://www.healthcaredive.com/news/heres-how-much-for-profit-hospitals-have-received-in-covid-19-bailout-fund/578378/

 

Nationwide Data on Hospital Price and Comparability-Are You Getting Ripped Off By Your Hospital?

 

Hospital Price and Comparability-What Private Employers Pay VS Medicare

One of the crucial elements for making informed decisions on any product is understanding price and comparability for services and this is also true for healthcare. The recent Rand Report (Christopher M. Whaley, 2020) illuminated huge pricing disparities for hospitals across the country by evaluating what private employers pay versus government reimbursements. The State of Maryland has state-controlled hospital prices (and some of the lowest hospital costs in the nation) and is therefore not included in the survey. I previously published an article on how Maryland’s state hospital pricing works. (Winter R. , 2014) The Rand Report analyzed 3000 hospitals in 49 states to assess relative value for similar services paid by private employer plans versus Medicare, which is the largest government funded plan in the US. Quality rankings were based on findings from the Centers for Medicare and Medicaid Hospital-Compare data, Leapfrog Hospital Survey, and HRIS patient mix data then scaled on a 1-5, with 1 being the lowest ranking.

Using data from 2016 to 2018 for private employers, the Centers for Medicare and Medicaid (CMS), and state agency data on hospital claims, here are the key findings from the report: (Christopher M. Whaley, 2020)

ü     Rand found little relationship between hospital quality rankings and price disparity. In other words, hospitals that charge less can also deliver high quality results and these are referred to as high value hospitals. Conversely hospitals that charge more don’t necessarily have better quality.

ü      There is a huge variance in hospital prices by state, with Arkansas, Michigan, and Rhode Island boasting relative value prices within 200% of Medicare reimbursement levels. Meanwhile, Florida, West Virginia, and South Carolina had relative value prices nearly 350% of Medicare reimbursement levels. So private employer plans in the latter could be paying 150% more for the same services compared to those in AK, MI, or RI.

Using the recently published Rand Report of hospital pricing for private payments versus government funded CMS payments, I extracted the zip file and analyzed data for the combined cost for inpatient and outpatient services by state, health system, and individual hospital. Here are the results for the most expensive and least expensive hospitals both in Washington and nationwide.

Washington

These tables show the relationship between the combined price for inpatient and outpatient services charged to private insurers (and self-insured plans), versus what the Centers for Medicare and Medicaid paid. Yakima Valley Memorial Hospital is one of the best deals in the state with a combined price for inpatient and outpatient services of 170% for private insurance compared to what Medicare/Medicare (CMS) pays.

Least Expensive Hospitals

Facility Name	Location	Quality Ranking 5 is highest	Health System	Combined Price vs CMS
Yakima Valley Memorial Hospital	Yakima	4	Virginia Mason Health System	170% of CMS
Swedish Hospital Issaquah	Issaquah	4	Providence St. Joseph	176% of CMS
Evergreen Hospital	Kirkland	5	Peace Health	189% of CMS
UW Medicine-Northwest Hospital	Seattle	4	UW Medicine	207% of CMS
Overlake Hospital	Bellevue	4	Peace Health	215% of CMS

Most Expensive Hospitals

The most expensive hospital in the state is Tacoma General Hospital-Allenmore, part of the Multicare  System charging 330% of the CMS rate of reimbursement for privately insured plans. Though Harborview Medical Center scored a 312% combined price vs CMS, since it is a critical access hospital and trauma center for multiple states and therefor has more intensive patient needs, I have removed it from the list.

Facility Name	Location	Quality Ranking 5 is highest	Health System	Combined Price vs CMS Reimbursement
Tacoma General-Allenmore	Tacoma	2	Multicare	334% of CMS
Good Samaritan Puyallup	Puyallup	2	Multicare	330% of CMS
Swedish Providence	Seattle	5	Providence St. Joseph	307% of CMS
Harrison Medical Center	Bremerton	3	Catholic Health Initiatives	304% of CMS
St. Joseph Medical Center-Bellingham	Bellingham	4	Peace Health	303% of CMS

 Nationwide Data

10 Best Value Hospitals Rand Report 2020

Here are the 10 least expensive hospitals in the country, based on the relationship of what they charge private employers and what they are paid by CMS for similar services. Kudos to Maine for boasting multiple hospitals on this list of low price and high-quality rankings. This trend was also proven true when I ranked nationwide hospitals in 2011 and found only 1 hospital in the country had a perfect safety score, Penobscot Bay Medical Center in Maine. (Winter R. E., 2012) Of these highly affordable hospitals 90% are nonprofits and 40% are independent community based hospitals.

Facility Name	City	Quality Ranking 5 is highest	Health System	Combined Price vs CMS
Texas Women’s Hospital	Houston, TX	3	HCA Healthcare	48% of CMS
Redington Fairview Hospital	Skowhegan, ME	4	Independent	61% of CMS
Good Samaritan Hospital	Bakersfield, CA	2	Independent	62% of CMS
Women’s Hospital	Baton Rouge, LA	3	Independent	67% of CMS
Sebasticook Valley Hospital	Pittsfield, ME	4	Eastern Maine Healthcare Systems	71% of CMS
Deaconess Women’s Hospital	Newburgh, IN	5	Deaconess Health Systems	75% of CMS
Patients Hospital of Redding	Redding, CA	NA	Adventist Health	80% of CMS
Blue Hill Memorial Hospital	Blue Hill, ME	4	Eastern Maine Health Systems	82% of CMS
Physicians Medical Center	New Albany, IN	5	Independent	83% of CMS
Mount Desert Island Hospital	Bar Harbor, ME	4	Eastern Maine Healthcare Systems	89% of CMS

 10 Worst Value Hospitals Rand Report 2020

Of the most expensive hospitals with the greatest disparity in price charged to private employers versus the CMS reimbursement 70% were for profit companies, with 50% of those run by the behemoth HCA Health. HCA is the company that received the largest fine for healthcare fraud (at the time) for up-charging CMS and bilking government tax payers for billions. (Justice Department-US Government, 2003) Rick Scott, former Governor of Florida and now Senator of Florida was running HCA at that time. (Schultz, 2018) 

Most interesting is Face Book founder and guy-still-trying-to-make-friends, Mark Zuckerberg’s hospital in San Francisco, had the worst quality ranking in the Rand 2020 survey and still managed to charge private employers nearly six times the CMS reimbursement for the same services. These hospital price disparities place a great strain on employers in California, especially with the pressures of the Covid-19 pandemic. It is no wonder that California is exploring establishing its own state-run healthcare plan.

Facility Name	City	Quality Ranking  5 is highest	Health System	Combined Price vs CMS
North Bay Regional Hospital	Fairfield, CA	2	North Bay Healthcare Group	815% of CMS
Fort Walton Beach Medical Center	Fort Walton Beach, FL	2	HCA Healthcare	575% of CMS
Memorial Hospital Modesto	Modesto, CA	2	Sutter Health	572% of CMS
Zuckerberg Memorial Hospital	San Francisco, CA	1	San Francisco Health Network	565% of CMS
Westside Regional Medical Center	Plantation, FL	1	HCA Healthcare	514% of CMS
Colorado Plains Medical Center	Fort Morgan, CO	2	LifePoint Health	508% of CMS
Parkridge Medical Center	Chattanooga, TN	2	HCA Healthcare	505% of CMS
Springs Memorial Hospital	Lancaster, SC	2	Community Health Systems	499% of CMS
Summit Medical Center	Hermitage, TN	2	HCA Healthcare	493% of CMS
Alaska Regional Hospital	Anchorage, AK	5	HCA Healthcare	493% of CMS

 Conclusion

It is obvious that small independent hospitals frequently offer better value with good hospital quality rankings, which reflects on hospital leadership and the fact they are focused exclusively on delivering healthcare to their communities as opposed to creating giant venture capital funds. I personally suggest we have someone from Maine lead US healthcare reform for they have surely figured that out in their home state.

And this is the healthpolicymaven signing off encouraging you not to sign blanket waivers when submitting to healthcare procedures, do indicate that for which you agree and also what you choose to decline.  Healthpolicymaven is a trademark of Roberta E. Winter, in continuous use since 2007. All opinions expressed in this column are independent journalism without industry sponsorship from the healthcare sector.

 References

Christopher M. Whaley, B. B. (2020). Nationwide Evaluation of Health Care Prices Paid by Private Health Plans-Findings From Round 3 of Employer-led Transparency Initiative. Rand Corporation, Santa Monica. doi: https://doi.org/10.7249/RR4394

Justice Department-US Government. (2003, June 26). Largest Healthcare Fraud Case In US History Settled-HCA Investigation Nets 1.7 Billion. US Government Department of Justice. Retrieved September 18, 2020, from ustice.gov/archive/opa/pr/2003/June/03_civ_386.htm#:~:text=(formerly%20known%20as%20Columbia%2FHCA,the%20Justice%20Department%20announced%20today.

Schultz, R. (2018, October 2). Gov. Rick Scott Took Responsibility-No He Took 300 Million. Retrieved September 18, 2020, from https://www.sun-sentinel.com/opinion/fl-op-col-rick-scott-medicare-fraud-20181002-story.html

Winter, R. (2014, May 20). State Laws Which Inform the Consumer of Price and Quality. Retrieved September 18, 2020, from https://healthpolicymaven.blogspot.com/2014/05/state-laws-which-inform-consumer-of.html

Winter, R. E. (2012). Unraveling US Healthcare-A Personal Guide. Rowman & Littlefield. Retrieved from https://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972

 

 

 

Trump Administration Seeks to Remove Protections for Pre-existing Conditions in Supreme Court November 10,2020

Balderdash and Trump Caring About Your Pre-existing Conditions

White House Press Secretary, Kayleigh McEnany’s heartfelt speech at the Republican semi-virtual convention reflected her complete suspension of reality because her anguish about almost having breast cancer isn’t the same as actually being treated for invasive cancer. You know what is really scary, being a widow with a six-year-old actually diagnosed with breast cancer for the second time while a graduate student. Though I didn’t have my dad, husband, or GOD at my side, I did have healthcare through Washington State’s Basic Health Plan. The reason I am alive today is because I had the good fortune to live in a state with sound governance which realized a decade before the Affordable Care Act that people needed healthcare access. Other states which enacted similar programs were Minnesota and Massachusetts. Essentially, the program was very similar to the ACA guidelines, if you were within 130% of the poverty guidelines you were eligible for medical insurance that was a hybrid of Medicare, paid for with premium contributions and state subsidies. Of course, since I already had a breast cancer history (stage II tumor age-35 and mastectomy) I would not have been able to obtain any other medical insurance.

Press Secretary McEnany’s concern for protection due to pre-existing conditions is disingenuous while she works for the Republicans whom have been actively trying to eliminate the Affordable Care Act. The Affordable Care Act affectionately known as Obamacare, was enacted in 2010, ensured that insurance companies would no longer be able to deny healthcare based on someone’s health status and provided a nationwide mechanism for people to obtain affordable medical insurance. That program was also revenue neutral, (unlike anything the Trump Administration has produced). However, the Republican Administration has eliminated the income tax penalties for people who don’t think they should be forced to obtain medical insurance and of course the 3% tax for medical devices which were financing the ACA subsidies for low and middle-income people to obtain medical insurance. None of these tax cuts made a difference to giant cardiac device manufacturers or artificial hip makers, but they did serve to undermine funding for the pillars of Obamacare.

How galling for the almost breast cancer novitiate to say that “Trump stands by people with pre-existing conditions” while his administration has an active lawsuit, at the Supreme Court to eliminate the Affordable Care Act and throw millions of people with active health conditions, like auto-immune diseases to the wolves. As recent as June of this year Trump said that Obamacare must fall. The Supreme Court will hear oral arguments November 10, 2020 by the Trump Administration and 19 Republican attorneys general to eliminate the Affordable Care Act and jettison medical insurance for twenty to thirty million people, me included. I cannot think of a more compelling reason to vote early if you are a vote-by-mail-state or in person if you are required.

I am a 27-year breast cancer survivor and the mother of a twenty-three-year-old son whom has spent the last twenty years working for healthcare reforms, spending ten to thirteen weeks a year working for free on advocacy initiatives to raise awareness of adverse policies which affect your health and promoting sound science to inform your decisions. No, I am not rich, nor is that my aspiration, but neither have I declared bankruptcy so that others could pay my bills, stiffed contractors who worked for me, or sought to undermine basic healthcare for millions.  Nor have I contributed to the unnecessary deaths of even more millions by patchwork state laws which deny access to care for so many hard-working residents of this nation. I choose not suspend reality by the miasma of the Trump Administration which pretends he cares about people with pre-existing conditions-where is the proof.

 I encourage you all to vote this fall based on the evidence not false promises and sloppy rhetoric.

And this is the healthpolicymaven signing off encouraging you not to sign blanket medical release forms before submitting to medical procedures, do designate that for which you agree and for which you decline.

Roberta Winter is an independent journalist and health policy analyst and the author of Unraveling US Healthcare-A Personal Guide https://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972#:~:text=Unraveling%20U.S.%20Health%20Care%20is,their%20health%20care%20decision%20making.

Why Producing a Vaccine As Fast As Possible May Not Be Good For Your Health

Now that 150,000 people have died from the Covid-19 pandemic within the US even the non-compliant are concerned at last. This article explores the dangers of “warp speed” production techniques when it comes to science and human subjects.  First, the pharmaceutical industry loves to get an accelerated pathway from the Food and Drug Administration (FDA), because it allows them to spend less money conducting expensive human subject studies and proceed to money making with an approved product. Accelerated approvals have become commonplace at the FDA, with minimal push-back, especially from the science-suppressing Trump Administration.

Here are the steps a drug developer ideally undertakes before a new drug is approved in the US

1.       Scientific research is conducted on a hypothesis to determine if the intervention produced  statistically significant results

2.       Results are subject to peer review, by a panel of experts, whom hopefully are not conflicted by pharma grants, compensation, or appointments

3.     Once a finding clears these steps, the next phase is to undergo testing with human subjects, which is initially conducted in a small study, probably populated with targeted or idealized patients, and this study is often observational and not a randomized control study, as a means  to save money.

4.     The next step, after a successful human-subjects phase is clinical testing, where the treatment or intervention is deployed with patients. Again, this phase may be observational and not the gold-standard of randomized controlled study which eliminates bias by double-blinding and other techniques.

5.     If the intervention is going to have a significant risk for a large population, the next step should be large scale population testing on a broad cross section of the society which is to receive the drug. It is this latter phase that the pharmaceutical industry is loathe to do, because it takes more time and money and, in many cases, mutes the benefits of the drug they are touting.

Malignant-How Bad Policy and Bad Evidence Harm People with Cancer, by Vinayak Prasad, MD, MPH, brilliantly explains the use of surrogate endpoints to accelerate drug approvals, which only reach level 3 in the drug development scale in some cases, before approval by the FDA. (Vinayak K.Prasad, 2020, pp. 23-50) To call this a rush to judgement of drug efficacy is an understatement. An accelerated approval is basically a provisional drug approval for a drug which hasn’t fully met the standards of the regular process. A surrogate endpoint is basically a substitution by pharma to shorten the approval process for a drug which has shown a statistically significant result, but which may have minimal value when applied to a real world patient population. In other words, if it only works on a few idealized patients without other comorbidities what is the value to society?

Most of the drug development in the US is paid for by the federal government through grants from Health and Human Services and citizens have a right to thoroughly researched drugs which are not merely approved by conflict-ridden FDA staffers who are ex-pharmaceutical employees. The current individual in charge of the “warp speed Covid-19 vaccination”, Moucef Slaoui, of GlaxoSmithKline is in fact so conflicted that he would be unable to obtain Congressional approval for the job, so instead the Trump Administration waived that requirement and allowed him to consult with the government without divesting of any of his pharma stock.

Of real concern with Operation Warp Speed is that important steps in the safety of an immunization will be minimized or eliminated because of the accelerated approval provision. This means that people who are less healthy may experience adverse side affects and could result in deaths. In other words, with the Covid-19 immunization Americans are the guinea pigs under accelerated approval.

In 2016, Dr. Prasad and Chul Kim reviewed all FDA cancer drug approvals and 66% were based on the jujitsu of surrogate endpoints. (Vinayak K.Prasad, 2020) They reviewed the use of surrogate endpoints through systematic review of available literature on scientific studies and found that 56% of the studies used to justify accelerated approvals did not even document the strength of the correlation they were using for surrogate endpoint justification. And 37% of the regular drug approvals did not document the strength of study correlation either. If statistical validation is not used then perhaps the findings are weak.

The FDA uses surrogate endpoints and other work arounds to justify “unmet needs” in healthcare, which is certainly the case for a Covid-19 vaccine. The goal in vaccine development is to eliminate susceptibility of disease, but corona viruses are notoriously difficult to development immunities. For example, the annual influenza vaccine is only partially effective in preventing influenza, and the vaccine has to be redeveloped annually because the virus evolves. This is essentially the situation the world is facing now with Covid-19. Of concern are the gladiator stakes the Trump Administration has created for several drug companies to compete to develop a vaccine. Being first for a vaccine would seem to be less important than providing the most effective vaccine for our population. And of course, a measure of efficaciousness is cost, which is born by US taxpayers and patients.

This is the healthpolicymaven signing off encouraging you not to sign blanket release forms when submitting to a medical procedure, do indicate that for which you agree and which you decline. It is after all your health, and that is no surrogate endpoint.

 Roberta E. Winter, MHA, MPA is a freelance journalist and health policy analyst who does not accept compensation from insurance, pharmaceutical, or medical device companies. This column, Straight Talk on Healthcare has been in continuous publication since November 2007.

References
Vinayak K.Prasad, M. M. (2020). Malignant-How Bad Policy and Bad Evidence Harm People with Cancer. Baltimore, Maryland, USA: John Hopkins University Press.