The largest U.S. insurer, Medicare, does not cover weight-loss drugs, making it tougher for older people to get access to promising new medications.

If you cover stories about drug costs in the U.S., it’s important to understand why Medicare’s Part D pharmacy program, which covers people aged 65 and older and people with certain disabilities, doesn’t cover weight-loss drugs today. It’s also important to consider what would happen if Medicare did start covering weight loss drugs. This explainer will give you a brief overview of the issues and then summarize some recent publications the benefits and costs of drugs like semaglutide and tirzepatide.

First, what are these new and newsy weight loss drugs?

Semaglutide is a medication used for both the treatment of type 2 diabetes and for long-term weight management in adults with obesity. It debuted in the United States in 2017 as an injectable diabetes drug called Ozempic, manufactured by Novo Nordisk. It’s part of a class of drugs that mimics the action of glucagon, a substance that the human body makes to aid digestion. 

Glucagon-like peptide-1 (GLP-1) drugs like semaglutide help prompt the body to release insulin. But they also cause a minor delay in the pace of digestion, helping people feel sated after eating.

That second effect turned Ozempic into a widely used weight-loss drug, even before the Food and Drug Administration (FDA) gave its okay for this use. Doctors in the United States can prescribe medicines for uses beyond those approved by the FDA. This is known as off-label use.

In writing about her own experience in using  the medicine to help her shed 40 pounds, Washington Post columnist Ruth Marcus in June noted that Novo Nordisk mentioned the potential for weight loss in its “ubiquitous cable ads (‘Oh-oh-oh, Ozempic!’)” 

The American Society of Health-System Pharmacists has reported shortages of semaglutide due to demand, leaving some people with diabetes struggling to find supply of the medicine.

Novo Nordisk won Food and Drug Administration (FDA) approval in 2021 to market semaglutide as an injectable weight loss drug under the name Wegovy, but with a different dosing regimen than Ozempic. Rival Eli Lilly first won FDA approval of its similar GLP-1 diabetes drug, tirzepatide, in the United States in 2022 and sells it under the brand name Mounjaro.

In November of 2023, Eli Lilly won FDA approval to sell tirzepatide as a weight-loss drug, soon-to-be marketed under the brand name Zepbound. The company said it will set a monthly list price for a month’s supply of the drug at $1,059.87, which the company described as 20% discount to the cost of rival Novo Nordisk’s Wegovy. Wegovy has a list price of $1,349.02, according to the Novo Nordisk website. 

Even when their insurance plans officially cover costs for weight loss drugs, consumers may face barriers in seeking that coverage for these drugs. Commercial health plans have in place prior authorization requirements to try to limit coverage of new weight-loss shots to those who qualify for these treatments. The Wegovy shot, for example, is intended for people whose weight reaches a certain benchmark for obesity or who are overweight and have a condition related to excess weight, such as diabetes, high blood pressure or high cholesterol.

State Medicaid programs, meanwhile, have taken approaches that vary by state. For example, the most populous U.S. state, California, provides some coverage to new weight-loss injections through its Medicaid program, but many others, including Texas, the No. 2 state in terms of population,  do not,  according to an online tool that Novo Nordisk created to help people check on coverage.    

Medicare does cover semaglutide for treatment of diabetes, and the insurer reported $3 billion in 2021 spending on the drug under Medicare Part D. Congress last year gave Medicare new tools that might help it try to lower the cost of semaglutide.

Medicare is in the midst of implementing new authority it gained through the Inflation Reduction Act (IRA) of 2022 to negotiate with companies about the cost of certain medicines.

This legislation gave Medicare, for the first time, tools to directly negotiate with pharmaceutical companies on the cost of some medicines. Congress tailored this program to spare drug makers from negotiations for the first few years they put new medicines on the market, allowing them to recoup investment in these products.

Why doesn’t Medicare cover weight-loss drugs?

Congress created the Medicare Part D pharmacy program in 2003 to address a gap in coverage that had existed since the creation of Medicare in 1965. The program long covered the costs of drugs administered by doctors and those given in hospitals, but not the kinds of medicines people took on their own, like Wegovy shots.

In 2003, there seemed to be good reasons to leave weight-loss drugs out of the benefit, write Inmaculada Hernandez of the University of California, San Diego, and coauthors in their September 2023 editorial in the Journal of General Internal Medicine, “Medicare Part D Coverage of Anti-obesity Medications: a Call for Forward-Looking Policy Reform.”

When members of Congress worked on the Part D benefit, the drugs available on the market were known to have limited effectiveness and unpleasant side effects. And those members of Congress were aware of how a drug combination called fen-phen, once touted as a weight-loss miracle medicine, turned out in rare cases to cause fatal heart valve damage. In 1997, American Home Products, which later became Wyeth, took its fen-phen product off the market.

But today GLP-1 drugs like semaglutide appear to offer significant benefits, with far less risk and milder side effects, write Hernandez and coauthors.

“Other than budget impact, it is hard to find a reason to justify the historical statutory exclusion of weight loss drugs from coverage other than the stigma of the condition itself,” they write.

What’s happening today that could lead Medicare to start covering weight loss drugs?

Novo Nordisk and Eli Lilly both have hired lobbyists to try to persuade lawmakers to reverse this stance, according to Senate records.  Pro tip: You can use the Senate’s lobbying disclosure database to track this and other issues. Type in the name of the company of interest and then read through the forms. 

Some members of Congress already have been trying for years to strike the Medicare Part D restriction on weight-loss drugs. Over the past decade, senators Tom Carper (D-DE) and Bill Cassidy, MD, (R-LA) have repeatedly introduced bills that would do that. They introduced the current version, the Treat and Reduce Obesity Act of 2023, in July. It has the support of 10 other Republican senators and seven Democratic ones, as of Dec. 19. The companion House measure has the support of 41 Democrats and 23 Republicans in that chamber, which has 435 seats.

The influential nonprofit Institute for Clinical and Economic Review conducts in-depth analyses of drugs and medical treatments in the United States. ICER last year recommended passage of a law allowing Medicare Part D to cover weight-loss medications. ICER also called for broader coverage of weight-loss medications in state Medicaid programs. Insurers, including Medicare, consider ICER’s analyses in deciding whether to cover treatments.

While offering these calls for broader coverage as part of a broad assessment of obesity management, ICER also urged companies to reduce the costs of weight-loss medicines.

Most people with obesity can’t achieve sustained weight loss through diet and exercise alone, said David Rind, ICER’s chief medical officer in an August 2022 statement. The development of newer obesity treatments represents the achievement of a long-standing goal of medical research, but prices of these new products must be reasonable to allow broad access to them, he noted.

After an extensive process of reviewing studies, engaging in public debate and processing feedback, ICER concluded that semaglutide for weight loss should have an annual cost of  $7,500 to $9,800, based on its potential benefits.

What does academic research say about the benefits and the potential costs of new obesity drugs?

Here are a couple of studies to consider when covering the ongoing story of weight-loss drug costs:

Medicare Part D Coverage of Antiobesity Medications — Challenges and Uncertainty Ahead
Khrysta Baig, Stacie B. Dusetzina, David D. Kim and Ashley A. Leech. New England Journal of Medicine, March 2023

In this Perspective piece, researchers at Vanderbilt University create a series of estimates about how much Medicare may have to spend annually on weight-loss drugs if the program eventually covers these drugs.

These include a high estimate — $268 billion — based on an extreme calculation, one reflecting the potential cost if virtually all people on Medicare who have obesity used semaglutide. In an announcement of the study on the Vanderbilt website, lead author Khrysta Baig described this as a “purely hypothetical scenario,” but one that “ underscores that at current prices, these medications cannot be the only way – or even the main way – we address obesity as a society.”

In a more conservative estimate, Bhaig and coauthors consider a case where only about 10% of those eligible for obesity treatment opted for semaglutide, which would result in $27 billion in new costs.

 (To put these numbers in context, consider that the federal government now spends about $145 billion a year on the entire Part D program.)

It’s likely that all people enrolled in Part D would have to pay higher monthly premiums if Medicare were to cover weight-loss injections, Baig and coauthors write.

Baig and coauthors note that the recent ICER review of weight-loss drugs focused on patients younger than the Medicare population. The balance of benefits and risks associated with weight-loss drugs may be less favorable for older people than the younger ones, making it necessary to study further how these drugs work for people aged 65 and older, they write. For example, research has shown older adults with a high blood sugar level called prediabetes are less likely to develop diabetes than younger adults with this condition.

SELECTing Treatments for Cardiovascular Disease — Obesity in the Spotlight
Amit Khera and Tiffany M. Powell-Wiley. New England Journal of Medicine, Dec. 14, 2023
Semaglutide and Cardiovascular Outcomes in Patients Without Diabetes
A Michael Lincoff, et. al. New England Journal of Medicine, Dec. 14, 2023.

An editorial accompanies the publication of a semaglutide study that drew a lot of coverage in the media. The Semaglutide and Cardiovascular Outcomes in Obesity without Diabetes (SELECT) study was a randomized controlled trial, conducted by Novo Nordisk, which looked at rates of cardiovascular events in people who already had known heart risk and were overweight, but not diabetic. Patients were randomly assigned to receive a once-weekly dose of semaglutide (Wegovy) or a placebo.

In the study, the authors report that of the 8,803 patients who took Wegovy in the trial, 569 (6.5%)  had a heart attack or another cardiovascular event, compared with 701 of the 8801 patients (8.0%) in the placebo group. The mean ​​duration of exposure to semaglutide or placebo in the study was 34.2 months.

The study also reports a mean 9.4% reduction in body weight among patients taking Wegovy, while those on placebo had a mean loss of 0.88%.

The findings suggest Wegovy may be a welcome new treatment option for many people who have coronary disease and are overweight, but are not diabetic, write Khera and Powell-Wiley in their editorial.  

But the duo, both of whom focus on disease prevention in their research, also call for more focus on the prevention and root causes of obesity and on the use of proven treatment approaches other than medication.

“Socioeconomic, environmental, and psychosocial factors contribute to incident obesity, and therefore equity-focused obesity prevention and treatment efforts must target multiple levels,” they write. “For instance, public policy targeting built environment features that limit healthy behaviors can be coupled with clinical care interventions that provide for social needs and access to treatments like semaglutide.”

Additional information:

The nonprofit KFF, formerly known as the Kaiser Family Foundation, has done recent reports looking at the potential for expanded coverage of semaglutide:

Medicaid Utilization and Spending on New Drugs Used for Weight Loss, Sept. 8, 2023

What Could New Anti-Obesity Drugs Mean for Medicare? May 18, 2023

And KFF held an Aug. 4 webinar, New Weight Loss Drugs Raise Issues of Coverage, Cost, Access and Equity, for which the recording is posted here.

The post The push for Medicare to cover weight-loss drugs: A research-based explainer appeared first on The Journalist's Resource.

This piece was originally published in July 2020. In light of the Republicans’ debt ceiling negotiations with the Biden administration in 2023, which involve discussions of a federal Medicaid work requirement, we updated it on May 24 with some updated statistics and a list of additional studies published as recently as April 2023.

The two largest U.S. health plans share a birthday, July 30, 1965, but they have different roles and public images.

A law signed by President Lyndon B. Johnson created Medicare, which serves people age 65 and older, and Medicaid, which covers people considered to be poor by government standards. Both programs also cover people with disabilities, contributing to overlap between Medicaid and Medicare. About 12.2 million people of the about 60 million people enrolled in Medicare in 2018 also had Medicaid coverage.

People tend to remain enrolled in Medicare. In 2022, 55.5 million of the the 63.8 million participants were age 65 and older, according to the 2022 Medicare trustees report. The rest of the enrollees qualified due to disabilities.

Not so with Medicaid, where there is more churn.

For example, about 86.7 million people were covered by the state-federal program at some point during fiscal 2018, according to a December 2019 report from Medicaid and CHIP Payment and Access Commission (MACPAC). But fewer might be covered by the program at any given point in the year, as can be tracked through Medicaid’s website.  (The program posts a monthly snapshot of recent enrollment as well as releasing more extensive data.)

People gain Medicaid coverage when they lose jobs — for instance, during the recession stemming from the COVID-19 pandemic — and drop it when they become employed again. Some people with disabilities also rely on Medicaid coverage while waiting to qualify for Medicare.

While Medicaid is a safety-net program for many Americans, Medicare is more of an aspiration, which enjoys a significant base of bipartisan support.

“You couldn’t move my mother out of Medicare with a bulldozer,” then House Energy and Commerce Chairman Billy Tauzin, a Louisiana Republican, said in 2003, while working on the last major expansion of the federal health program. “She trusts in it, believes in it. It’s served her well.”

But there’s a sharp partisan divide about Medicaid. There were no Republican votes for the 2010 Affordable Care Act (ACA), which set the stage for a major expansion of Medicaid that’s still unfolding. Instead Republicans have since tried repeatedly to repeal the ACA, while also reviving in recent years attempts to convert federal funding of Medicaid from an open-ended commitment based on formulas to more limited support though block grants.

GOP’s unsuccessful ACA repeal bids in 2017 foundered, though, in part due to growing support for Medicaid, according to Richard Sorian, a former assistant secretary for public affairs at the Department of Health and Human Services in the Obama administration. Sorian looked at how the 2014 expansion had allowed more people to get access to health care in several states with Republican governors, such as Ohio, as well as in those dominated by Democrats.

“For most of its history, Medicaid took a back seat to Medicare, the health benefits program for seniors and others,” Sorian writes, adding that some politicians still seek Medicaid budget cuts. “But many more are leery of touching the program and facing the wrath of the people who elected them.”

A few statistics show how Medicaid underpins much of U.S. health care.

• About 1 in 5 Americans get health insurance through Medicaid, which is run by the states with federal financial support and oversight. As of January 2023, more than 85.9 million people in the U.S. were enrolled in Medicaid, according to the latest data posted by the Centers for Medicare and Medicaid Services (CMS). There were about  7 million participants in the Children’s Health Insurance Program (CHIP), considered a sister initiative to Medicaid.
• Medicaid paid for 43% of all births in the U.S. in 2018, while private insurance plans paid for 49%. Policymakers now are looking to expand Medicaid coverage to try to lower the high rate of maternal mortality in the United States. There are bills pending in Congress that would require Medicaid coverage of new mothers from a 60-day period to the entire year following giving birth.
• Medicaid is the largest U.S. purchaser of what it calls behavioral health services, which include mental health treatment and services to treat addiction and substance abuse.
• Medicaid is the primary tool through which the Affordable Care Act (ACA) of 2010 expands the public’s access to health care.

News coverage of the federal government’s implementation of the ACA in 2014 focused heavily on hitches with the startup of the online state and federal exchanges through which people who did not get health plans from their employers can buy medical coverage. These were primarily intended to help people whose employers do not offer health plans. Many people get subsidies to purchase their insurance on these exchanges. Without this help, they might not be able to afford insurance.

About 11.4 million people were covered by these health plans sold on the exchanges for 2020, according to a report from the Centers for Medicare and Medicaid Services (CMS).

These include plans sold by for-profit companies as well as ones from nonprofit insurers.

But, by late 2018, about 15.1 million people were enrolled in Medicaid due to expansion created by the ACA, CMS reported.

States have varied eligibility criteria, including income cutoffs, for Medicaid. Before the ACA, many states largely excluded adults who do not have disabilities,  no matter how little they earned.

President Barack Obama and congressional Democrats intended for all states to raise their Medicaid eligibility requirements to allow adults who work but have incomes just above the federal poverty level to get health insurance. CMS last year authorized Utah’s Medicaid expansion, which will allow coverage for single people with annual income of as much as 138% of the federal poverty level ($17,608). For a family of four, this income cutoff would be $36,156.

Under the ACA, states initially were required to set their cutoff for Medicaid eligibility at a level that allowed people with household incomes as high as 138% above the federal poverty level to enroll. It’s important to note that while the actual text of the ACA sets this level at 133%, other provisions of the law have effectively nudged the cap to 138%.

In 2012, the U.S. Supreme Court decided that states could choose whether they wanted to raise the threshold for Medicaid eligibility under ACA. In an effort to encourage states to raise their income thresholds to allow more people to qualify for Medicaid, the federal government offered to cover the majority of the cost of covering these new enrollees.

Many states led by Republican governors initially balked at the offer and GOP political candidates campaigned on pledges to repeal the ACA.

Several Republican leaders, including Gov. Gary Herbert of Utah and then Indiana Gov. Mike Pence, later took the federal government up on its offer. The U.S. opioid epidemic helped persuade GOP holdouts to expand Medicaid. As of May 2023, 10 states have not taken formal action to expand Medicaid, according to a tally kept by the Kaiser Family Foundation.

In some states that have expanded their Medicaid coverage, Republican governors have added conditions for people who are able to enroll thanks to increased income thresholds, including payments of premiums. Congressional and state Democrats have objected to Republican attempts to add work requirements to Medicaid participation for adults who do not have disabilities. They have argued that many people added as a result of the expansion already work and documenting employment is a significant administrative burden.

To help journalists report on Medicaid, we’ve summarized a few studies below to help reporters understand the key debates happening about this program.

At the heart of Medicaid research are persistent questions about how well the massive state-federal health program works. Studies published to date show mixed results on questions of whether having Medicaid coverage helps participants improve or maintain their health.

For example, one study found middle-aged people who live in states that expanded Medicaid under the ACA are less likely to die of heart disease.

But discussions about Medicaid often quickly loop back to the somewhat surprising findings of a 2008 experiment in Oregon involving Medicaid, which is discussed more fully in a section below.

After Oregon officials found they had funds for a limited expansion of the state’s Medicaid program, they used a lottery to select about 30,000 people from a waiting list of almost 90,000. This approach allowed economists a rare opportunity to study the effects of Medicaid coverage in a group of people randomly selected to enroll in the state-federal health plan.

Some findings from studies of the Oregon experiment disappointed advocates for Medicaid expansion. These findings include research that seems to contradict a common theory that people newly enrolled in Medicaid  would use emergency rooms less often for basic health care needs if they could afford to see a primary care doctor by participating in Medicaid. Visits to a primary care clinic cost significantly less than emergency room visits.

In recent years, many researchers have sought to assess the early impacts of the ACA’s Medicaid expansion. The results of the Oregon experiment cast doubt about the possible benefits of Medicaid coverage for a group that had been randomly selected to receive coverage, writes Sarah Miller, an assistant professor at the University of Michigan’s Ross School of Business, and her co-authors in a 2019 paper.

“The inconclusive nature of these results has led to skepticism among some researchers, policymakers, and members of the media as to whether Medicaid has any positive health impacts for this group,” write Miller and her co-authors.

In their paper, though, Miller and her co-authors estimate Medicaid expansion may have prevented 4,800 deaths in their sample population among people ages 55 to 64, or roughly 19,200 fewer deaths over the first four years alone. Miller and her co-authors also offer an estimate of what many states’ decisions against Medicaid expansion meant for their citizens.

“Our estimates suggest that approximately 15,600 deaths would have been averted had the ACA expansions been adopted nationwide as originally intended by the ACA,” Miller and her co-authors write.

Below are the summaries of the Miller paper and other research on Medicaid, including a section on the Oregon Medicaid experiment.

Medicaid and Mortality: New Evidence from Linked Survey and Administrative Data
Sarah Miller, et al. National Bureau of Economic Research working paper No. 26081, Revised August 2019.

Broader access to Medicaid appeared to lower the mortality rate in a study focused on people ages 55 to 64, Miller and her co-authors find.

They analyzed the potential effect of the Medicaid expansion by using data from the federal American Community Survey (ACS). This national survey draws information from about 4 million respondents a year. The survey asks for such details as income level and citizenship status, which allow researchers to make observations about people’s potential Medicaid eligibility.

In their study, Miller and her co-authors focused on adults aged 55 to 64 who appeared likely to qualify for the Medicaid due to the expansion. The researchers  excluded adults living in Delaware, Massachusetts, New York, Vermont and the District of Columbia from the study. Medicaid programs in those areas earlier had allowed coverage of adults living in poverty.

Miller and her co-authors then compared data for the people in the selected expansion states  to ACS data for a similar group of people from states that had not expanded Medicaid. They find that the probability of dying in the first year of the expansion declined by about 0.089 percentage points for the Medicaid expansion group. In the second and third year, the probability of death dropped a little over 0.1 percentage points, the researchers explain. By the fourth year, it declined 0.2 percentage points.

Limitations to this research include the possible effect of instances where people’s income may have risen between 2008 and 2014, the years studied, making them ineligible for the expansion.

Some participants in the ACS also may have moved to different states, causing misclassification about whether those people were eligible for the expansion, Miller and her co-authors write.

The nonpartisan, nonprofit Center on Budget and Policy Priorities released a report that discusses the findings of the paper in simple terms. The University of Michigan produced a press release on Miller’s findings.

Medications for Opioid Use Disorder Among Pregnant Women Referred by Criminal Justice Agencies Before and After Medicaid Expansion: A Retrospective Study of Admissions to Treatment Centers in the United States
Tyler Winkelman, et al. PLOS Med, May 18, 2020.

Pregnant women referred by courts and other criminal justice agencies for opioid abuse treatment were more likely to get medications to help them manage their condition if they lived in states that had expanded their Medicaid eligibility, wrote Tyler Winkelman of the Hennepin Healthcare Research Institute of Minneapolis, and his co-authors.

The rate at which medication for opioid use disorder was prescribed for pregnant women rose from 21.4% to 36% in the states studied that had expanded their Medicaid eligibility. In the states that did not expand Medicaid, the rate increased from 7.0% to 9.6%.

For the study, Winkelman and co-authors analyzed data collected from 1992 to 2017, identifying records for cases of 131,838 pregnant women with opioid use disorder. They drew these from the Treatment Episode Data Set-Admissions (TEDS-A) program, an annual national survey conducted by the federal Substance Abuse and Mental Health Services Administration (SAMHSA). More than half — 63.3% — percent of the women in the sample studied were between the ages aged 18–29.

They acknowledge limits to their paper, including gaps in the TEDS-A data.

Although TEDS-A is the most comprehensive survey of treatment admissions in the U.S., some states only report cases of people whose care was publicly funded. Omitting data about pregnant women who used private insurance to pay for their treatment could potentially alter the reported results, the authors write.

Examination of Changes in Health Status Among Michigan Medicaid Expansion Enrollees From 2016 to 2017
Minal R. Patel, et al. JAMA Network Open, July 10, 2020.

People in Michigan who enrolled in Medicaid through the ACA expansion were less likely to report themselves as being in fair or poor health over time, finds a study by Minal R. Patel, an associate professor at the University of Michigan School of Public Health, and her co-authors.

In 2016, 30.7% of study participants reported being in fair or poor health, while 27.0% did the following year, Patel and co-authors find. They used a longitudinal panel survey, an approach that allows for repeated observations over time, to assess changes in health status for people enrolled in the Medicaid expansion in Michigan. The researchers analyzed the answers that  more than 3,000 people gave during their telephone survey in both 2016 and 2017.

Patel and her co-authors did not find any statistically significant differences in the other aspects of health they studied — for example, the number of days participants reported being in poor mental health or the number of days of usual activities they reported missed owing to poor physical or mental health over time.

Effects Of Medicaid Expansion On Postpartum Coverage And Outpatient Utilization
Sarah H. Gordon, et al. Health Affairs, Jan. 6, 2020.

A comparison of medical claims for women living in Colorado and Utah suggests expanding Medicaid may help new mothers get needed medical care. Sarah H. Gordon, an assistant professor at the Boston University School of Public Health, and her co-authors studied how Medicaid eligibility rules affect women’s access to care after delivery, noting concerns about the high maternal mortality rates in the U.S. compared to other rich nations.

In their paper, Gordon and her co-authors describe this as the first study to examine the impact of the ACA’s Medicaid expansion on postpartum coverage and outpatient medical care among pregnant women. They obtained information about Medicaid claims through agreements with state agencies in Colorado and Utah.

In Colorado in 2013, pregnant women with incomes below 185% of federal poverty level and parents with incomes below 105% of the poverty level were eligible for Medicaid. The state in 2014 expanded its Medicaid program to cover all adults with incomes below 138% of the federal poverty threshold. Utah did not expand its Medicaid eligibility until 2019.

The mean (average) number of months of Medicaid coverage in the six months after delivery rose from 5.3 months in the January-June 2013 period to 5.4 months in the January 2014-June 2015, but dropped in Utah from 4.6 months to 3.6 months.

Gordon and her co-authors compared the treatment that women in the two states received between January and June 2013 and between January 2014 and June 2015. At the time, Utah’s Medicaid eligibility cap was 33% above the poverty line for pregnant women and 44% below the poverty line for parents.

Among the key findings: Mothers in Colorado, on average, had more outpatient medical visits during the first six months after delivery. The average number of outpatient visits rose from 3.0 to 3.3. In Utah, mothers had fewer outpatient visits – an average of 1.8 in the six months post-delivery, down from 2.0.

There was an even larger gain in Colorado for new mothers who had experienced difficulty during pregnancy and delivery, termed maternal morbidities, such as hemorrhage. For these women, the average number of outpatient visits in that state in the six months after delivery rose from 2.7 to 3.4. In Utah, the average number of visits for women in this category slipped from 1.8 to 1.6.

Gordon and her co-authors note in their paper that their findings apply only to women in the two states. They also note that the claims databases used in their work lacked detailed information on patient race, ethnicity and socioeconomic status.

Medicaid Work Requirements — Results from the First Year in Arkansas
Benjamin D. Sommers, et al. New England Journal of Medicine, Sept. 12, 2019. Published online June 19, 2019.

An Arkansas initiative linking work requirements to Medicaid eligibility is associated with a rise in the percentage of uninsured people in the state but no significant change in employment status, finds this study, led by Benjamin D. Sommers, a professor at the Harvard T.H. Chan School of Public Health.

Sommers and his co-authors looked at what happened after Arkansas, in 2018, became the first state to implement a work requirement in connection with the Medicaid expansion. (Subsequent federal court decisions put a halt to this Arkansas requirement, as detailed by the Kaiser Family Foundation on a page where it tracks Medicaid policy changes approved by federal waivers.)

Many Republicans, including Arkansas Gov. Asa Hutchinson, have argued in favor of tying coverage through the Medicaid expansion to work requirements. His state received permission from the federal government to ask Medicaid beneficiaries who were 30 to 49 years old to meet requirements such as working 80 hours per month or participating in another so-called “community engagement activity” such as job training or community service. Pregnant women and people with disabilities could get exemptions from these rules.

Sommers and his co-authors used telephone surveys to assess changes in work patterns before and after the Arkansas work requirements took effect. They studied changes among four groups: people in Arkansas aged 30 to 49, Arkansans 19 to 29 years of age, Arkansans aged 50 to 64, and adults in three comparison states — Kentucky, Louisiana and Texas.

The researchers find that the percentage of people in the group representing Arkansans aged 30 to 49 who worked 20 hours or more a week dropped from 42.4% in 2017 to 38.9% in 2018.

Similar results were seen in control groups used in the study, including the three comparison states.

The percentage of uninsured respondents among Arkansans 30 to 49 years of age increased

from 10.5% in 2016 to 14.5% in 2018, with smaller or no changes in the other groups. The percentage of Arkansans 30 to 49 years of age with employer-sponsored coverage increased slightly, from 10.6% to 12.2%

Sommers and his co-authors note that more than 95% of people in Arkansas who were targeted by the new policy already met the work requirement or should have been exempt.

The researchers note that the study did not determine whether individuals’ loss of coverage was a direct result of the new work requirements or prompted by other factors such as income changes or failure to complete renewal paperwork.

The nonprofit, nonpartisan Commonwealth Fund has a brief about Sommers’ paper, summarizing its findings in simple terms.

The Oregon experiment

The Oregon Experiment — Effects of Medicaid on Clinical Outcomes
Katherine Baicker, et al. New England Journal of Medicine, May 2, 2013.

The findings of this paper often are cited by critics of Medicaid. Katherine Baicker and her co-authors find that expanding Medicaid coverage in Oregon in 2008 had no statistically significant effect on the prevalence or diagnosis of hypertension or high cholesterol levels or on the use of medication for these conditions.

While Medicaid coverage increased the probability of a diagnosis of diabetes and the use of diabetes medication, Baicker and co-authors observed no statistically significant effect on a measure of control of blood-sugar for diabetes.

But Baicker and her co-authors did find increased use of health care services, lower rates of depression and reduced financial strain among people who were able to get Medicaid coverage through the lottery.

“We found a pretty mixed bag there, which I think was surprising to a lot of people,” Baicker said during a panel discussion about the ACA at the Harvard Kennedy School of Politics in 2017.

The Oregon experiment offered a rare opportunity for researchers like Baicker and her co-authors on this paper, including Amy N. Finkelstein of the Massachusetts Institute of Technology.

Economists studying the effects of different insurance policies and plans often work to create valid comparison groups by pulling data from claims records. In contrast, researchers studying the effects of medicines see how these treatments work on people randomly selected to get a drug or placebo.

Oregon officials in 2008 prepared to allow new enrollment in the state’s Medicaid program after capping it. They knew there would be more demand for coverage than the state had budgeted, so they used a lottery to determine who could participate.

This created randomized groups that Baicker and her co-authors could study. The results of their research make clear how tough it is to make decisions about whether and how to use Medicaid to help more people obtain medical care. Policymakers have to weigh the benefits of expanding Medicaid against the expense, as the state-federal health plan competes with other priorities in government budgets.

“You cannot expect to save money in the healthcare system by expanding Medicaid. It costs money because people use more care, so you’ve got to find a way to finance it,” Baicker said during the 2017 Harvard Kennedy School panel discussion.

Baicker and her co-authors have continued to examine the results of the Oregon Medicaid experiment. Recent papers include:

The Effect of Medicaid on Management of Depression: Evidence From the Oregon Health Insurance Experiment
Katherine Baicker, et al. Milbank Quarterly, March 5, 2018.

Having Medicaid coverage appeared to reduce the prevalence of undiagnosed depression by almost 50% and untreated depression by more than 60% in a study comparing adults who enrolled in Oregon’s state health program to fellow applicants who were not selected in a lottery, Baicker and her co-authors find. They write that Medicaid coverage increased use of medications frequently prescribed to treat depression and related mental health conditions and reduced the share of people reporting unmet mental health care needs by almost 40%.

Between September 2009 and December 2010, Baicker and her colleagues collected information on 12,229 people via interviews and questionnaires. They selected people living in the Portland area, of whom 6,387 had been able to enroll in Medicaid through the lottery. The remaining respondents served as a control group.

Effect of Medicaid Coverage on ED [Emergency Department] Use — Further Evidence from Oregon’s Experiment
Amy N. Finkelstein, et al. New England Journal of Medicine, Oct. 20, 2016.

This paper is a follow-up to one published in Science in 2014. In that first paper, Sarah L. Taubman of the National Bureau of Economic Research and co-authors, including Baicker and Finkelstein, reported a 40% increase in emergency department (ED) visits among people who were chosen by lottery to receive Medicaid coverage.

That was a surprising finding, as there had been widespread belief that expanding Medicaid coverage would encourage more use of primary care and thus reduce ED visits, Finkelstein and her co-authors wrote.

In this 2016 paper, Finkelstein and her co-authors present an analysis of additional data to determine whether the increase in emergency department visits was short term.

There had been speculation that people who obtained Medicaid through the lottery would reduce use of emergency departments as they established relationships with primary care physicians.

At the 720-day mark, though, about 21.1% of the Medicaid group had visited an emergency department, while only 15.7% of the control group had, Finkelstein and her co-authors find.

Finkelstein and her co-authors found no such decline in use of emergency departments by people whose Medicaid enrollment should have made primary care visits more affordable.

Instead, “if anything, Medicaid made them more likely to use both,” Finkelstein and co-authors write in a summary of their results posted on the National Bureau of Economic Research (NBER) website.

The NBER’s Oregon Health Insurance Experiment website offers a list of publications based on this work. The MIT  Technology Review provides a history of this project in an April 2020 article, “A healthy understanding: Amy Finkelstein has changed what we know about Medicaid, Medicare, the economics of health care — and, increasingly, medical care itself.”

Additional reading

• “Medicaid Section 1115 Waivers: From Work Requirements To Social Determinants Of Health.” Alexander P. Phillips, Eli Y. Adashi, MaryBeth Musumeci. Health Affairs, April 2023.
• “Medicaid Work Requirements are Back on the Agenda.” Kaiser Family Foundation. Madeline Guth, April 2023.
• “Able-bodied Characters and the Appeal of Medicaid Work Requirements in Arkansas.” Kellan McNally. Journal of Policy Practice and Research, February 2023.
• “Lingering Legacies: Public Attitudes about Medicaid Beneficiaries and Work Requirements.” Simon F. Haeder, Steven M. Sylvester, Timothy Callaghan. Journal of Health Politics, Policy and Law, April 2021.
• “Levels of Employment and Community Engagement among Low-Income Adults: Implications for Medicaid Work Requirements.” Aparna Soni, Cong Gian, Kosali Simon, Benjamin D. Sommers. Journal of Health Politics, Policy and Law, December 2020.

For more information, see our 6 reporting tips for covering Medicaid during the COVID-19 pandemic. 

Additional reporting by Naseem S. Miller

The post The expanding role of Medicaid in US health care: A research roundup appeared first on The Journalist's Resource.

There’s a growing realization in the health care community about the toll that the practice of medicine takes on the Earth.

The health care industry “is among the most carbon-intensive service sectors in the industrialized world,” accounting for between 4.4% and 4.6% of greenhouse gas emissions, according to a key paper on this topic, published in 2020 in Health Affairs.

In the United States, the toll is particularly heavy. It’s estimated that the health care sector produced about 8.5% of domestic greenhouse gas emissions in 2018, according to that paper. It also notes the U.S. medical system may be responsible for about a quarter of all global health care greenhouse gas emissions, which is more than the health care system of any other nation.

The Biden administration highlighted its efforts to reduce these kinds of emissions during the United Nations Climate Conference (COP27) in November. U.S. delegates announced that more than 100 health care organizations have signed the voluntary Health Sector Climate Pledge initiative that the Department of Health and Human Services created with the White House. In kicking off this initiative in June, Adm. Rachel Levine, a pediatrician who serves as assistant secretary of the Department of Health and Human Services, stressed the link between climate change and illness.

“We’re already seeing the damage done by extreme heat, wildfires, severe storms, and increasing chronic disease burdens, all associated with climate change,” said Levine in a June 30 statement.

Levine described the Health Sector Climate Pledge initiative as “the beginning of a longer ongoing effort with partners from across the industry, which is exactly the kind of big response we need as a country.”

Organizations that sign the pledge have agreed to try to reduce emissions linked to climate change by 50% by 2030, from a baseline level set no earlier than 2008.

While certainly a positive step, this White House initiative depends on the goodwill of hospital administrators and leaders of companies that make medical products. Put bluntly, it is a strictly voluntary pledge and has no guarantee of lasting beyond the Biden administration.

The organizations that signed this pledge “are not obligated to report data on their progress to the federal government in association with this pledge,” according to an FAQ on the HHS website.

Weaving environmental efforts into the practice of medicine

Some leaders in medicine have recommendations for ways to secure more lasting incentives to reduce the carbon footprint of healthcare. They want to leverage the clout of the federal government as the nation’s biggest purchaser of health care and drive changes through regulation, such as a mandate to report on efforts to address climate change.

Among those advocating for regulation is Jodi Sherman, an associate professor of anesthesiology and epidemiology at Yale School of Medicine University, who spearheaded development of the Yale Gassing Greener app. This allows her fellow anesthesiologists to easily see how much pollution they can avoid through different choices of inhalation gases during surgeries.  She also is an author of professional guidance intended to help anesthesiologists better understand how their choices of gases affect emissions, and one of many authors of the previously cited 2020 Health Affairs paper.

Sherman maintains that efforts to reduce health care’s contribution to climate change should be woven into the practice of medicine. “This is the new frontier for patient safety where we are looking beyond the patient in front of us,” she says.

In covering this topic, journalists need to dig beyond press releases and statements from health care organizations about their support for the broad goal of reducing the carbon footprint. They should press hospital leaders and executives of medical supply companies for concrete examples of their plans to reduce their organizations’ carbon footprints. And they should look at what the research says.

The United Kingdom’s Sustainable Development Unit

Researchers who have studied the health care sector’s effect on climate change suggest the United States look to a United Kingdom program as a model. 

The U.K.’s  National Health Service has been a leader for many years in keeping tabs on emissions, a key step toward reducing them. It created a Sustainable Development Unit in 2008, and began that year conducting assessments of the NHS’s carbon footprint, write Imogen Tennison and her co-authors in a 2021 article published in The Lancet.

“Regularly updated and improved upon, these assessments now constitute the longest-running effort to quantify health-care-related greenhouse gas emissions in the world,” they write of the work of the Sustainable Development Unit.

The U.S. differs from the U.K., which has a centralized government-run health system as its dominant provider of medical care. But to truly make a difference in the U.S., the federal government should require health care organizations to report on their emissions, Sherman and her coauthors argue in their 2020 Health Affairs article, Health Care Pollution And Public Health Damage In The United States: An Update.

“Mandated emissions reporting would inform science-based interventions and facilitate rapid adoption of sustainable health care practices that could dramatically reduce health care pollution and improve public health,” they write.

The United States has a complex medical system, involving a mix of public and private initiatives and laws in 50 states plus the District of Columbia, as well as regulations enforced by federal agencies. But many U.S. hospitals and medical offices depend on payments from the Medicare and Medicaid programs, which are the nation’s largest purchasers of health care.

There are at least two promising ideas for attaching emission reporting rules to Medicare payments:

1. The Centers for Medicare and Medicaid Services could require reporting emissions data as one of its conditions for paying for health care services.
2. There could be a mandate from The Joint Commission,  a nonprofit organization on which CMS heavily relies to check on how well hospitals are run. Loss of accreditation from The Joint Commission puts at risk hospitals’ Medicare payments, which are the financial lifeblood of many of these organizations. If the Joint Commission showed more interest in reporting on emissions, it could inspire hospital leaders to track them, even if this didn’t rise to the level of a threat to payment.

Scope 1, 2 and 3

Before we delve into these suggestions, let’s go over the widely used Scope 1, 2 and 3 framework for discussing greenhouse gases. These classifications are part of the comprehensive standardized framework created by the Greenhouse Gas Protocol, which resulted from a partnership between the World Resources Institute and the World Business Council for Sustainable Development (WBCSD).

The authors of the 2020 Health Affairs update describe these classifications in their paper as follows:

• Scope 1 refers to greenhouse gas emissions emitted directly from health care facilities, such as from on-site boilers and certain medical gases.
• Scope 2 covers those emitted indirectly through purchased electricity.
• Scope 3 refers to those emitted in the supply chain through the production of goods and services procured by health systems.

For more on this, see this World Resources Institute primer.

CMS raises the question

The Centers for Medicare & Medicaid Services this year asked the public for feedback about how health organizations can track greenhouse gases, a move that signals the agency may eventually take steps in this direction.

The agency included a request for information on ways to address climate change in its draft update of the Medicare payment rule for inpatient services for fiscal 2023. CMS uses its annual payment rules as vehicles to make myriad changes in the conditions it attaches to its payments.

CMS released the proposed Medicare rule for 2023 payments for hospital inpatient services in April. (You can find all of the comments on this wide-ranging proposed rule posted here. There’s a search box that lets you home in on comments that addressed CMS’ questions on climate change. Tip for journalists who work for a regional news outlet: Try searching on the name of a state and the term “climate change”.)

Among the questions CMS posed was whether hospitals or health systems are setting “time-bound, public aims” for addressing greenhouse gas (GHG) emissions. The reactions were mixed.

Already noted as a leader in this area, the staff of the Cleveland Clinic, for example, told CMS that it has a goal to be carbon neutral by 2027, in terms of both Scope 1 and 2 emissions. The comment also said the clinic “would support the establishment of time-bound goals for GHG emissions reduction in the health care industry sector-wide.”

These statements were parts of the Cleveland Clinic’s comment to CMS on the draft Medicare payment rule. (Comments on federal rules are posted on the Regulations.gov website, which can be a great source for journalists.)

In contrast, the American Hospital Association (AHA) urged CMS to consider the burden of potential new rules on its members, while also stating broad support for the goal of reducing greenhouse gas emissions. Older physical structures, for example, may not be able to undergo the same type of retrofitting of heating or cooling systems compared with newer ones, AHA said in a June comment to CMS.

The hospital lobbying group also questioned whether HHS “has the legal authority to impose requirements on hospitals to address threats created by climate change.”

In their Health Affairs article, Sherman and her coauthors argue for using Medicare’s existing frameworks intended to judge the quality of medical care to create a system for tracking the carbon footprints of hospital systems. (See Exhibit 4 of their paper for a more detailed discussion of ways that existing CMS metrics could be expanded to address climate change.)

The Joint Commission and a proposed SEC rule

Jonathan Perlin, who became the  president and chief executive of The Joint Commission in March, discussed his plans to address climate change in an October interview with New England Journal of Medicine’s NEJM Catalyst. Perlin said decarbonization efforts are critical because “climate change is having a direct and inequitable effect on the health and well-being of people globally.”

Perlin also spoke about convening a technical advisory panel to consider this issue, in part to consider ways to encourage health systems to address reducing their own carbon footprints.

It would be wise for journalists to keep tabs on Perlin’s plans to address the carbon footprint, says Brian Chesebro, an anesthesiologist and the medical director for environmental stewardship at Providence Health Oregon. There are important stories to be written about any action The Joint Commission takes in this area, he says.

“The Joint Commission has tremendous influence over the operations of health care and tremendous influence over the leadership,” Chesebro says.

In addition, the Securities and Exchange Commission in March proposed a rule that would require many companies to disclose their greenhouse gas emissions, as well as their potential financial losses from climate change.

The proposed SEC rule applies broadly to publicly traded companies. This would include companies such as HCA Healthcare, a for-profit hospital system, which as of September owned and operated 182 hospitals. It would also apply to companies that make drugs, medical devices and health supplies.

As of December, though, the SEC had yet to finalize the proposal. And the commission faced pushback from industry groups — as well as from one of its own members.

The climate change proposal would not produce the kind of “comparable, consistent, and reliable disclosures” that the commission wanted, said SEC Commissioner Hester Pierce, in a March statement to SEC Chairman Gary Gensler. Pierce was appointed as an SEC commissioner in 2018 following a nomination by then President Donald Trump.

The SEC proposal asks some large companies to provide information about the carbon footprint of their suppliers, customers, employees and other factors such as changing weather patterns. 

In a public statement issued for a March 2022 SEC meeting, Pierce said she understands the drive to “bring clarity in an area where there has been a lot of confusion and greenwashing,” using a term for efforts to make companies and organizations seem more environmentally responsible than they are.

But Pierce questioned whether the SEC would get the results it sought from its proposal, arguing about challenges ahead in gathering reliable data and analyses.

Research roundup

In the research roundup below, we’ve gathered and summarized analyses on emissions, as well as papers outlining the challenges of gathering data on the carbon footprint of the U.S. healthcare sector.

The first two studies could be considered required reading for journalists delving into this topic, as they contain solid estimates of changes in the contribution of health care organizations to climate change in the U.K. and U.S.

The other five papers present analyses and thoughtful plans and suggestions on topics including:

• How reducing use of over-testing and low-value treatments could help shrink the carbon footprint of U.S. health care.
• A detailed list of actions the federal government could take to leverage its financial clout as a purchaser of health care and a supporter of medical research and training.
• How to reduce greenhouse gas emissions due to manufacturing of medical devices
• Reconsidering travel to medical conferences.

Health Care’s Response to Climate Change: A Carbon Footprint Assessment of the NHS in England
Imogen Tennison; et al. The Lancet Planetary Health, February 2021.

The carbon footprint of the U.K.’s NHS fell by 26% from 1990 to 2019, mostly due to reduced use of certain kinds of inhalers and in forms of energy used for heat and power, the authors write.

This was the key conclusion of what the authors describe as “the longest and most comprehensive accounting of national health-care emissions globally.” In addition to highlighting the major wins in reducing the carbon footprint, the study illustrates areas where growth in emissions was at least held in check amid rising demand for medical services.

The total tally for the NHS in England dropped from 33.8 megatons of carbon dioxide equivalent (Mt CO2e) in 1990 to 25.0 Mt CO2e in 2019, the study finds.

Among the biggest contributors to that decline was a change in production of metered dose inhalers, stemming from the 1987 Montreal Protocol, an international treaty designed to reduce production of products that deplete the Earth’s protective layer of ozone. It set in motion efforts to phase-out of chlorofluorocarbon propellants in metered dose inhalers, which are used for asthma and other lung conditions. (There are still concerns, though, about emissions from inhalers.

The carbon footprint for metered dose inhalers dropped from 4.64 Mt CO2e in 1990 to 0.80 in 2019.

The carbon footprint attributed to oil dropped from 1.74 Mt CO2e to 0.02 Mt CO2e. This analysis weighed both the reduction in the NHS’ direct consumption of oil for its energy needs, a Scope 1 use, and oil consumed in the supply chain of the NHS, the Scope 3 uses.

It’s important to note that during the study period, the population of England increased by 17% and the NHS England’s provision of care doubled, in terms of a measure as hospital stays.

The carbon footprint for travel related to the NHS did tick up during the 1990-2019 period, rising from 1.9 Mt CO2e to 2.4 Mt CO2e. This figure includes commutes by NHS staff as well as trips by patients and visitors.

In the paper, the authors highlight the 2008 creation of the NHS’ Sustainable Development Unit, which has closely tracked carbon footprint, as a contributor to their analysis.

“Regularly updated and improved upon, these assessments now constitute the longest-running effort to quantify health-care-related greenhouse gas emissions in the world, and are notably the only national-level analyses carried out by a public agency with institutional support, rather than by independent researchers,” the authors write.

To hear Tenninson and co-author Matthew J. Eckelman discuss this paper, check out this episode of the Lancet’s Planetary Health podcast.

Health Care Pollution And Public Health Damage In The United States: An Update
Matthew J. Eckelman; et al. Health Affairs, December 2020.

U.S. health care greenhouse gas emissions rose 6% from 2010 to 2018, reaching 1,692 kg per capita in 2018 — the highest rate among industrialized nations, the authors write. In other terms, they reached about 553 Mt CO2e in 2018, or approximately 8.5% of domestic U.S. greenhouse gas emissions, the authors write.

This figure — 8.5% — has been widely cited, including by the White House in its June statement on the Health Sector Climate Pledge.

In making these estimates, the authors used data from the Environmentally-Extended Input-Output model (USEEIO), developed by the EPA. This model melds data on economic transactions between 389 industry sectors, with emissions data that the EPA describes as “a wealth of environmental information, including data on land, water, energy and mineral use, air pollution, nutrients, and toxics.”

The paper also includes estimates of state-level emissions. Midwestern and Northeastern states generally have higher per capita emissions than Western or Southern states, the authors report.

Their calculations also suggest that in 2018 greenhouse gas and toxic air pollutant emissions resulted in the loss of 388,000 disability-adjusted life-years (DALYs). DALY is a tool researchers use to show a broader picture of the effects of a harmful substance or practice on people. (The World Health Organization explains that a DALY represents the loss of the equivalent of one year of full health. DALYs for a disease or health condition are the sum of the years of life lost to due to premature mortality and the years lived with a disability due to prevalent cases of the disease or health condition in a population, the WHO explains.)

This disease burden is “within the same order of magnitude as years of life lost as a result of deaths from preventable medical errors and it remains a concerning issue for health care safety, quality, and cost containment efforts,” the authors write.

Why Climate Activists Should Care About Healthcare Waste and Overuse
Daisy Valdivieso and Thomas B. Newman. The Journal of Climate Change and Health, October 2022.

The authors call for greater efforts to reduce use of medical tests and procedures that are considered unlikely to deliver significant benefit as an easy way to shrink the carbon footprint of medical care.

They cite the work of the The American Board of Internal Medicine’s Choosing Wisely program as a resource in weighing what tests and procedures patients and clinicians should consider skipping. Choosing Wisely collects recommendations from specialists who have reviewed studies about treatments and tests commonly used in their fields.

This approach also plays more to the strength of people practicing medicine than do strategies more focused on reducing energy consumption in a broad sense.

“Emissions from buildings, ventilation, and lighting are not healthcare workers’ area of expertise, but we do have expertise in identifying low-value care,” the authors write. “Drawing connections between the high cost of healthcare and healthcare waste can help draw urgency to the matter.”

Prescriptions for Mitigating Climate Change–Related Externalities in Cancer Care: A Surgeon’s Perspective
Victor Agbafe; et al. Journal of Clinical Oncology, March 2022.

This paper provides an overview of efforts underway in medicine to reduce emissions of greenhouse gases, with an emphasis on cancer surgeries. Its suggestions include ways to reduce emissions from operating rooms such as scheduled preventive maintenance.

It also touches on efforts to avoid unnecessary waste in the surgical supply chain. Trays of instruments prepared for operations sometimes have unnecessary or rarely used sterile instruments, which could be weeded out by more selective preparation, the authors write.

Confronting Health Care’s Climate Crisis Conundrum : The Federal Government as Catalyst for Change
Kenneth W. Kizer and Kari Christine Nadeau, JAMA, January 2022.

In the Viewpoint article, Kizer and Nadeau urge a broad application of what’s been learned about quality metrics to efforts to reduce the carbon footprint of the U.S. health care sector.

More public reporting is needed to understand the scope of the problem and identify solutions, the authors write.

“First, the president could direct all federal agencies that provide health care to begin reporting on the environmental and societal consequences of their operations in accordance with the Global Reporting Initiative framework and standards for environment, social, and governance (ESG) reporting,” they write.

“Government health systems do not disclose these data (and very rarely do private health care organizations), unlike more than 90% of the Standard & Poor’s top 500 companies and many nongovernment entities,” they add.

Other suggestions include:

• Direct CMS to require all recipients of Medicare, Medicaid, and the Children’s Health Insurance Program funds to begin ESG reporting.

• Have the VA and the Defense Department require ESG reporting from the private health care providers with whom they contract.

• The Food and Drug Administration could include ESG reporting as a requirement in applications for approval of new medicines and medical devices. Kizer and Nadeau write that the U.K.’s National Health Service and its equivalent of the FDA — the Medicines and Healthcare Products Regulatory Agency — already do this.

• The federal government could require that institutions receiving research funds from the National Institutes of Health, Department of Defense, or other federal government agencies report on ESG performance and develop sustainability plans. The government could also leverage its role as the biggest funder of physician training, graduate medical education and other health professional training, to demand climate change education be included in the curriculum of programs.

“This could constitute a substantial step toward better equipping health professionals to confront climate change and other planetary health problems,” they write. Educational institutions receiving such funds also could be required to report on ESG performance.

Estimation of the Carbon Footprint Associated With Attendees of the American Psychiatric Association Annual Meeting
Joshua R. Wortzel; et al. JAMA Network Open, January 2021.

The American Psychiatric Association (APA) saved the estimated equivalent of burning 500 acres of dense forest, or 22 million pounds of coal, when it opted for a virtual annual conference in 2020 due to the pandemic, the authors write.

There’s tension between the APA’s having made a priority of addressing the effects of climate change on mental health, while holding one of the world’s largest annual psychiatric conferences, according to the paper.

With that in mind, the authors created a study that included data from the APA about the cities and countries of origin of about 16,620 attendees at the 2018 annual meeting and about 13,335 at the 2019 annual meeting.

The authors then identified likely transportation modes and departure airports for each attendee based on their distance from the meetings. Estimates for emissions for attendees considered to be within driving distance were based on Environmental Protection Agency’s guidelines. For flying emissions estimates, the authors used the Flight Emissions API (GoClimate) web tool. They concluded that the 2018 New York City and 2019 San Francisco APA annual meetings produced an estimated 19,819 and 21,456 metric tons of CO2e emissions, respectively.

This analysis was not meant to discourage in-person conferences, but to spark consideration of ways to reduce their carbon footprint, the authors write. “Creative workarounds” such as greater use of virtual meetings should be considered, they conclude.

Transforming The Medical Device Industry: Road Map To A Circular Economy
Andrea J. MacNeill; et al. Health Affairs, December 2020.

The authors of this analysis argue for a shift toward more reusable products, which might be less profitable for some manufacturers but better for the planet. “Single-use blood pressure cuffs, for example, have been introduced to obviate the need for cleaning, despite little evidence that reusable cuffs are significant vectors of pathogens when properly reprocessed,” the authors write.

They write that despite broad adoption of single-use disposable products, there is no compelling evidence that they reduce infections acquired during surgery or other health care.

“Most of the decrease in surgical site infection rates from 4–6 percent in 1987–90 to 2 percent in 2009 can be attributed to the use of evidence-based protocols to standardize care and enhance host defense mechanisms (for example, glycemic control and normothermia),” they write.

They argue for an “expanded notion of patient safety that considers population health,” and which “would take into account the social and environmental damages of the current single-use disposable–dominant health care supply chain.”

The authors argue that regulators should take responsibility for the safe sale and reuse of medical devices. They could, for example, restrict single-use disposable labeling to products for which safe reuse cannot be reasonably demonstrated, instead of allowing single-use disposable labeling by default.

Additional resources

Commonwealth Fund’s Climate Change and Health Care initiative website:                      

This respected nonprofit organization is seeking to help health systems with tools, and resources to reduce their carbon emissions. It also is supporting new academic research to measure, compare, and reduce the health system’s carbon footprint. Among its recent publications of interest to journalists are:

• How the Inflation Reduction Act Can Help the Health Care Sector Reduce Greenhouse Gas Emissions, Sept. 22, 2022. This blog post looks at how a major 2022 law on environmental and health policy may help medical systems and organizations try to reduce their emissions.     
• Action to Decarbonize the U.S. Health Care System: Lessons from the U.K.’s National Health Service, July 26, 2022. This blog post looks in more detail at NHS England efforts at decarbonization, which were described earlier in this article.

National Academy of Medicine’s Action Collaborative on Decarbonizing the U.S. Health Sector: A leading U.S. coordinator of health care initiatives is seeking to help medical organizations share ideas for reducing their carbon footprints. Its plans include holding meetings and seeking other ways to share suggestions.

American Medical Association (AMA) Climate Change website: The largest organization of doctors in the United States has been speaking in support of efforts to reduce emissions. It has called on doctors to assist in educating patients and the public on the physical and mental health effects of climate change and on environmentally sustainable practices, and to serve as role models for promoting environmental sustainability.

Agency for Healthcare Research and Quality is a federal agency that tries to have medical practices supported by research used more widely in health care. AHRQ contracted with the nonprofit Institute for Healthcare Improvement (IHI) to develop a primer with suggestions for reducing emissions.

Health Care Without Harm: A global group with a U.S. operation that seeks to help reduce the environmental footprint of the health care sector.

The Journalist’s Resource:

• The 2022 Lancet climate change and health report: Dire warnings and glimmers of hope (November 21, 2022)

• 7 tips for finding local stories in The Lancet’s health and climate change report (October 27, 2022)

• Want to reach skeptics? Researchers suggest leaving the term ‘climate change’ out of some news coverage (May 28, 2022)

The post How the health care sector contributes to climate change: a research roundup and explainer appeared first on The Journalist's Resource.

There were more than 1,400 private equity deals in health care last year totaling $208.7 billion, more than double the 664 transactions, valued at a total of $58.5 billion, in 2016, according to PitchBook Data, Inc., a Seattle-based firm that tracks mergers and acquisitions.

Private equity firms are companies focused on generating quick and substantial profits through acquisition and sales of businesses. They typically sell the acquired businesses within three to seven years for a higher price. This short-time commitment is one of the defining characteristics of private equity firms, according to the industry’s trade association, the American Investment Council. In comparison, health insurance plans and even other for-profit companies buy hospitals, nursing homes and physician practices with an aim of holding onto them for a long time, according to Erin C. Fuse Brown, director of the Center for Law, Health & Society at Georgia State University.

Private equity firms owned 11% of U.S. nursing homes, along with 4% of U.S. hospitals as of 2021, according to the Medicare Payment Advisory Commission (MedPAC), a nonpartisan independent legislative branch agency that advises Congress. Private equity firms also acquired at least 2% of physician practices in the U.S. from 2013 to 2016, an estimate that does not take into account previous acquisitions, according to MedPAC. Private-equity firms have continued to expand in primary care since 2016, according to MedPAC.

Private equity firms argue they bring value to health care businesses through improved management techniques and investment in newer technologies.

Critics of private equity’s approach say the intense drive for quick profit puts patients at risk, because the firms cut staffing costs and make financial arrangements that commit the resources of acquired companies to paying back loans and associated interest.

“Private equity’s business model involves buying companies, saddling them with mountains of debt, and then squeezing them like oranges for every dollar,” Rep. William J. Pascrell Jr. (D-NJ) said at a 2021 hearing he chaired about these firms’ health care operations.

It has been challenging to study how private equity ownership affects the care of patients, due in part to the difficulties in tracking down details about acquisitions. The Biden administration this year has made more data public about the ownership of nursing homes, intending to aid researchers.  But the public reporting to date on these sales has been fairly murky.

The owners of private equity firms often borrow money for these purchases and then look to use revenue and assets of the acquired business to manage this debt. For example, firms sometimes sell the buildings owned by hospitals and nursing homes to other companies they own. They may then proceed to charge the hospitals and nursing homes rent for buildings they used to own. This results in a new expense for hospitals and nursing homes, diverting money they might have otherwise used on patient care.

Private equity firms also can charge fees for management and monitoring services to the nursing homes. In addition to these costs, some of the funds nursing homes receive for patient care go toward paying debt that private equity firms used to buy these businesses.

Tax advantages for private equity firms

Pascrell’s been among the chief watchdogs of private equity firms. He has been seeking to have Congress address a loophole in the tax code that makes it more lucrative for owners of private equity firms to manage companies, including ones involved in health care.

Traditional business owners and managers have salaries that are taxed the same way as other employees. But executives in private equity firms have a more complex system for getting paid, which lowers their tax payments. They typically receive a management fee equal to 2% of assets under management plus 20% of the profits generated by their fund.

The 2-percent fee is subject to ordinary income and Medicare and Social Security taxes. But the 20% of profits are considered “carried interest” and taxed at lower capital gains rates, write Fuse Brown and coauthors in their 2021 report, “Private Equity Investment As A Divining Rod For Market Failure: Policy Responses To Harmful Physician Practice Acquisitions.” The report was published by a joint initiative of the nonprofit Brookings Institution and the University of Southern California’s Leonard D. Schaeffer Center for Health Policy and Economics. In the report, the authors recommend that the federal government take steps to remove tax advantages for private equity firms across the board, putting them on a more level playing field with other companies. They also note how the private equity firms have excelled in finding “market failures” in the U.S. medical system that can be exploited for high profits.

Surprise medical billing

Private equity firms, for example, played a large role in the phenomenon called surprise medical bills, Fuse Brown and her co-authors write.

They purchased practices that employ emergency room physicians and anesthesiologists. In many cases, the doctors were not part of agreements between health plans and the hospitals where they worked. Patients who had medical insurance were then often surprised to get large out-of-network bills from physicians who provided care at hospitals that were not in-network with the patients’ health plans. (The Journalist’s Resource covered this issue in June 2020; see “Surprise billing: Why consumers with medical insurance still may face major health care expenses.”)

Congress addressed this in a December 2020 law that took effect earlier this year. The law on medical bills, known as the No Surprises Act, was included in a larger legislative package, including annual spending bills as part of the 2021 Consolidated Appropriations Act.

But there are ongoing battles between the Biden administration and physician groups, some of which have significant private equity investment, about how the rule is being implemented.

The Federal Trade Commission also has signaled greater interest in private equity’s role in health care. The FTC in 2020 began a broad look into consolidation of physician practices, a trend driven in large part by hospital acquisitions.

State-level policy efforts

State lawmakers and regulators have also been looking at the influence of private equity on health care. California state Sen. Sydney Kamlager last year introduced  bill SB 642,  the Patients Over Profits Act. This would expand on the state’s existing restrictions on what’s called the corporate practice of medicine, with “significant effects in the private equity healthcare space,” according to a post from the Los Angeles-based Pacific Health Law Group PC.

The corporate practice of medicine doctrine “prohibits corporations from practicing medicine or employing a physician to provide professional medical services,” explains a brief from the American Medical Association.  

The bill appears to have stalled — at least for now — but it’s drawn notable attention from law offices that advise private equity firms. The law firm Polsinelli issued an alert about the bill in May 2021, warning that it would limit certain contractual arrangements between professional medical corporations and entities owned by people other than physicians, such as private equity investors.

Last year Massachusetts Attorney General Maura Healy announced a record settlement agreement for a health care fraud case involving a private equity firm.

HIG Capital agreed to pay almost $20 million to resolve claims that its South Bay Mental Health Center fraudulently billed Medicaid for services provided by unlicensed, unqualified, and improperly supervised staff members. The settlement arose from a lawsuit initially filed by a former employee who used a federal whistleblower-protection law, known as the False Claims Act, to report this improper treatment of patients.

Research roundup

Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization

Yashaswini Singh, Zirui Song; et al. JAMA Health Forum, September 2022.

The acquisition of a physician practice by private equity firms appears to result in doctors making larger insurance claims for their services as well as increasing the number of patients they see, Singh and her co-authors report. These findings raise questions about the “market-driven influence” that private-equity firms bring to health care, they write.

Their study focused on three specialties in which private equity firms have been active in recent years: dermatology, gastroenterology, and ophthalmology.

The authors identified 578 practices that private equity firms acquired after 2015 and then created a control group of 2,874 similar practices under independent ownership. They then looked at how doctors in these practices had billed insurance plans between Jan. 1, 2015 and Dec. 31, 2020. Among the measures considered was the average allowed amounts per claims, meaning the price negotiated by insurers.

The practices owned by private equity firms on average allowed claims of $206 per patient before acquisition and $285 after, an increase of $79. That was $20 more than the increase in the control group of practices, where the average allowed claims rose by $59 from $201 to $260.

In practices owned by private equity firms, the total number of services, including procedures, referred to as total encounters, rose during the study period from 138.1 to 191.1, an increase of 53 encounters. In the control group, the number of encounters rose by 19.7 from 123.8 to 143.5.

The gains seen in practices owned by private equity firms may reflect changes in practice operations, such as expanding hours, branding and advertising, or broadening referral networks, Singh and her co-authors write. But they also could be a signal of increased use of what’s called low-value care, meaning services unlikely to do much to help patients preserve or improve their health, they write.

Association of Physician Management Companies and Private Equity Investment With Commercial Health Care Prices Paid to Anesthesia Practitioners

Ambar La Forgia, Amelia M. Bond; et al. JAMA Internal Medicine, February 2022.

Patients paid more for anesthesia if it was delivered by a doctor employed by a physician management company, with the tab rising even higher if that firm had received private equity funding, according to this cohort study of more than 2.2 million claims for privately insured patients.

The prices ultimately paid by insurers increased by 16.5%, or about $116.39, when anesthesia services were delivered by employees of management companies, compared with other physicians’ hospital staff, the authors write. Further slicing the data to look at management companies in which private equity had invested, the authors report that prices for care by management companies without private equity investment rose by 12.9%, or about $89.88. But those for management companies with private equity investment, the increase was 26.0%, or $187.06.

The study focused on data from 2012 to 2017 for people seen at hospital outpatient departments and ambulatory surgical centers. To create their comparison groups, La Forgia and colleagues tracked down details about the ownership of anesthesia practices. They used a mix of corporate filings with the U.S. Securities and Exchange Commission, which are public documents, and data from consulting groups such as Irving Levin and SDC Platinum.

To track how much health plans paid, they worked with the nonprofit Health Care Cost Institute. HCCI data included claims for patients insured by Aetna, Humana, and UnitedHealthcare, three of the largest US health insurers. Identifying details for patients are removed from the claims data.

The authors suggest that physician management companies may have had superior negotiating tactics, resulting in higher payments. Strategies may have included threatening to move anesthesiologists out of networks, they suggest. “We did not find evidence that practitioners moved out of health plans’ networks except for a modest increase in the year the contract started,” they write. “However, the mere threat may be sufficient to influence negotiating dynamics between PMCs and insurance companies.”

Association of Private Equity Investment in US Nursing Homes With the Quality and Cost of Care for Long-Stay Residents

Robert Tyler Braun, Hye-Young Jung; et al. JAMA Health Forum, November 2021.

People living in certain nursing homes owned by private equity firms were more likely to end up in emergency rooms and to be hospitalized for conditions for which better care might have prevented these episodes, the authors write. In this study, they focused on what health policy researchers call ambulatory care-sensitive visits. These include complications from conditions such as diabetes.

People living in private equity-owned nursing homes were 11% more likely to have an ambulatory care-sensitive emergency room visit and 8.7% more likely to be hospitalized, the authors write. This contributed to higher costs for Medicare, which pays for health care such as ER visits and hospital stays for most people 65 years and older in the United States. The authors estimated Medicare costs were 3.9% higher, or $1,080 more annually, per patient in nursing homes owned by private-equity firms compared to those living in other for-profit nursing homes.

To do this study, the authors created two comparison groups. They identified 302 nursing homes owned by private equity firms, with a total of 9,632 residents, and then found 9,562 comparable homes owned by other for-profit companies, with a total of 249,771 residents. They then compared information from Medicare claims and data from the giant health program on the quality of homes, known as the Minimum Data Set assessments for the period from 2012 to 2018.

The authors compared resident outcomes at private equity-owned facilities with resident outcomes at 9,562 other for-profit nursing homes, which included 249,771 long-stay residents during the study period. 

Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes

Atul Gupta, Sabrina T. Howell; et al. National Bureau of Economic Research, February 2021.

Staying in a nursing home owned by a private-equity firm increases the probability of death during the stay and the subequent 90 days by 1.7 percentage points, report Gupta and his coauthors.

This finding was based on an analysis of records from the Centers for Medicare & Medicaid Services and a search to uncover deals in which private equity firms had bought nursing homes, Gupta and colleagues write. An estimated 20,150 lives were lost during the 12-year study period, compared with what would have happened if those patients were in other kinds of nursing homes, Gupta and colleagues write. In the paper, they note differences between nursing homes owned by private equity firms and those with other kinds of ownership, such as nonprofit organizations or businesses without the same kind of compelling incentives to cut costs.

Beyond the higher mortality rate, Gupta and colleagues find worse performance for private-equity-owned firms on several measures, including use of antipsychotic medicines and higher reported pain scores.

Private Equity Investments in Behavioral Health Treatment Centers

Benjamin Brown, Eloise O’Donnell, and Lawrence P. Casalino. JAMA Psychiatry, March 2020

Private equity firms have also shown marked interest in recent years in behavioral health services, which help people manage mental illnesses or substance use disorders. In 2016, private equity transactions accounted for 60% of all acquisitions in the field of behavioral health care, note the authors of this Viewpoint article.

The influx of private equity has helped to expand access to medication-assisted treatment for opioid addiction. But there are no peer-reviewed data yet to show how the involvement of private equity firms affects the quality and cost of behavioral health care, they write. 

“Private equity firms bring business expertise and much-needed capital to behavioral health treatment and may introduce standards of care that benefit patients,” they write. “On the other hand, some physicians (and patients) might be uneasy about this ‘corporatization’ of behavioral health care and the intense pressure on PE firms to generate short-term profits.”

The post The impact of private equity ownership in health care: A research roundup and explainer — Plus 3 reporting tips appeared first on The Journalist's Resource.

This article was updated on Dec. 27 with a section on prior authorization requirements for HIV prevention drugs.

Doctors and insurers in the United States are often at odds about whether people should get certain medical treatments, including prescription drugs. Consumers sometimes get dragged directly into these battles when insurers challenge physicians’ decisions in a process called prior authorization.

In many cases health insurance plans cover procedures and medications that are prescribed to patients. Often, though, insurance companies demand additional information from doctors and other medical professionals to justify their prescriptions and orders. In the medical field this is known as prior authorization or preauthorization.

Health insurance companies argue that the process can reduce unnecessary procedures and health care costs.  Health plans use it as a tool, for example, to check that potentially addictive painkillers are being used appropriately as part of the national response to the opioid crisis.

But doctors are critical of how insurers design their processes for handling prior authorization requests. They have raised concerns about  both the frequency of these requests, even for routine procedures, and the administrative burdens they face due to demands for hours spent on the telephone or faxing documents to insurance companies.

In Health Affairs in October 2020, David Cutler, an applied economics professor at Harvard University, writes about what he deems the “needlessly complicated” processes used in prior authorization as an aspect of medicine in need of reform. For example, an insurer may ask a doctor for more information about a patient before approving a radiology test. But much of the information sought may already be in the patient’s electronic medical record and could be more easily conveyed to the insurer’s review staff through this path. But health plans instead often require a more burdensome, relatively antiquated approach involving faxes and phone calls.

“To document this, the provider’s office must fax information from the medical record to the insurer, who then reviews it all before reaching a decision,” writes Cutler in his blog post, titled “Taming the Paper Tiger.” “A more streamlined way to do this would be to have the provider’s EMR system attest that the patient meets the relevant criteria, avoiding all the human interaction.”

In a 2020 survey of 1,000 doctors by the American Medical Association, 58% said phone calls with insurance companies were often or always required to complete a prior authorization request for prescriptions, with 59% saying this was true for prior authorization requests for medical services. Regarding faxes, 48% of respondents said these were always or often necessary, while 46% said this was the case for requests for medical services.

“It seems like every step in the process is designed to make the patient less likely to get the therapy that the doctor thinks that the patient needs,” Dr. Susan Bailey, then president of the AMA, said in a May interview with Medscape Medical News. “It’s almost like rationing care by hassling the patient and the physician.”  

Bipartisan support for streamlining the prior authorization process

There’s widespread agreement that the process needs improvement. Physician organizations including the AMA have persuaded many members of Congress of the need for reforms to the pre-authorization process, at least in terms of the insurer-run programs that manage Medicare benefits for people, known as Advantage plans.

A House bill introduced in May, aiming to speed up the prior authorization process, has gained bipartisan support.

The bill, the Improving Seniors’ Timely Access to Care Act (HR 3173), has the support of 141 Democrats and 111 Republicans, or more than half of the members of the House of Representatives, as of Dec. 20.  You can check here to see which members of Congress have sponsored the House bill. A companion Senate measure had the backing of five Republicans and six Democrats as of Dec. 20, as shown here.

These bills would address prior-authorization procedures only for the insurer-run Medicare plans.  These plans cover about 26 million people in the United States, according to an estimate from the nonprofit Kaiser Family Foundation. The majority of people in Medicare are age 65 and older. Groups that support these bills, including the American Medical Association, expect that there would be a ripple effect among health plans: If they are forced to simplify prior authorization for their Medicare Advantage programs, they may do so as well for their other health plans.

Specifically, the bills would push for use of electronic prior-authorization programs, shifting away from use of faxes that frustrates many doctors. The bill also would direct Medicare to require Advantage plans to design systems that could issue “real-time” decisions on prior-authorization requests.

Even insurers have voiced a need to streamline the processes for prior authorization.

In 2018, the trade group America’s Health Insurance Plans joined another large insurance group, the Blue Cross Blue Shield Association, in issuing a public statement on the need for improvement. Also signing this statement were the AMA, the American Hospital Association, the American Pharmacists Association and the Medical Group Management Association.

“The prior authorization process can be burdensome for all involved—health care providers, health plans, and patients,” the insurance and medical groups said in their joint statement.

In the 2018 consensus statement, insurers had agreed to try to streamline the process, taking steps such as removing hurdles for doctors with solid track records for prescribing appropriately.

“Unfortunately, we have seen little to no progress from insurers in living up to the reforms from the consensus statement we agreed to more than 3 years ago,” Dr. Jack Resneck Jr., who is president-elect of the AMA, said in an email to The Journalist’s Resource.

Meanwhile, insurers have expanded use of prior authorization requirements in response to rising costs of medicines. These restrictions applied to about 24% of drugs in 2019 covered by the insurer-run Medicare pharmacy program, known as Part D plans, up from 8% in 2007, Resneck writes in a February 2020 Viewpoint article in JAMA, citing a federal advisory panel. His article, titled “Refocusing Medication Prior Authorization on Its Intended Purpose, details how the insurers’ approach to managing this process frustrates consumers and medical professionals.

“The opacity of frequently changing formularies and prior authorization requirements means that prescribing physicians do not know which treatment options will be filled without delays,” writes Resneck, who also is professor and vice-chair of dermatology at the University of California, San Francisco. 

“Patients arriving at pharmacies to pick up medications and initiate treatment are sometimes surprised to learn that further action is required by their physician to seek health plan approval,” Resneck continues. “Thus begins a process that often includes faxes sent from physician offices to health plans, initial rejections, written appeals, and `peer-to-peer’ telephone calls with adjudicators who sometimes are not familiar with the disease or the disputed medication or who may suggest inappropriate  alternatives.”  

Prior authorization requirements for HIV prevention drugs

Democrats in both chambers of Congress are seeking to end prior authorization requirements for HIV prevention drugs under private and public health insurance plans. As of Dec. 27,  Rep. Adam B. Schiff (D-CA) had 43 Democratic sponsors for his version of a bill that would do this, while Sen. Tina Smith (D-MN) had one for her version of the bill. 

Dr. Kathleen A. McManus of the University of Virginia and colleagues call for this kind of legislation in an article published in JAMA Network Open in June 2020, Regional Disparities in Qualified Health Plans’ Prior Authorization Requirements for HIV Pre-exposure Prophylaxis in the United States.  They report finding significant regional differences in the United States in access to these medicines.

McManus and colleagues examined how 16,853 insurance plans handled payments for Truvada, a combination of two medicines, tenofovir disoproxil fumarate and emtricitabine. The Food and Drug Administration in 2012 approved Truvada for pre-exposure prophylaxis (PrEP) in combination with safer sex practices to reduce the risk of sexually acquired HIV-infection in adults at high risk.

Examining insurance plans’ policies for 2019, McManus and colleagues found that 18.9% of health plans studied required prior authorization for Truvada overall in the U.S., but that the rate of these requirements varied by geographical region. Looking at the rates by region, they found prior authorization requirements for Truvada for 37.3% of plans in the South, 2.3% of those in the Northeast, 6.2% of those in the West and 13.3% of those in the Midwest. 

This disparity was particularly concerning given the increased concern about HIV transmission in the South, write McManus and colleagues. They note that the Centers for Disease Control and Prevention has estimated a lifetime risk of acquiring HIV in the United States of 1:22 for Black men, 1:54 for Black women and 1:2 for Black men who have sex with men. 

“Moreover, the South has higher rates of stigma and bias associated with HIV and the lesbian, gay, bisexual, transgender, and queer or questioning communities as well as higher rates of HIV criminalization laws, which create additional barriers to PrEP uptake in the South,” McManus and colleagues write. “More than half of the African American population in the United States live in the South.”

In their article, McManus and colleagues write that there is limited regulation of health plans’ prior authorization requirements. They note federal or state laws may be needed to “remove this system-level barrier to ending the HIV epidemic in the United States” and expand access to PrEP.

Drawing attention to prior-authorization policies

Shining a spotlight on prior-authorization policies may help bring about change, according to the nonprofit Institute for Clinical and Economic Review (ICER). ICER conducts in-depth analyses of drugs and medical treatments in the United States. 

ICER on Dec. 1 published an in-depth report on insurers’ restrictions on access to prescription drugs, a topic it intends to revisit on an annual basis. While it was conducting this review, six insurers made 10 changes to policies limiting access to prescription drugs, ICER reported. The insurers notified ICER of their plans for changes after reviewing a preliminary draft of the organization’s analysis. Among these was Anthem Inc.’s removal of its prior authorization criteria for the sacubitril/valsartan heart failure drug, effective Aug. 1, 2021, ICER staff wrote in the report, titled “Assessment of Barriers to Fair Access.“

AHIP supports use of electronic prior authorization to speed the processing of these requests.

In March, AHIP released a report about the early result from its Fast Prior Authorization Technology Highway—or Fast PATH—initiative done by the consulting firm RTI International. Participating in the project were 6 health insurers—Blue Shield of California, Cambia Health Solutions, Cigna, Florida Blue, Humana, and WellCare (now Centene). Together they cover over 50 million people in the United States. The initiative began in early 2020 and ran for about 12 months, according to the report, titled “Evaluation of the Fast Prior Authorization Technology Highway Demonstration: Final Report.”

RTI International found some improvements in the process. The median time to decisions after implementation of Fast PATH electronic prior authorization solutions fell from 18.7 hours in the pre period to 5.7 hours. But physicians were still left using older forms of communications to address insurers’ questions.

“Some comments collected from survey respondents suggested that there are providers who do not see much benefit from the electronic prior authorization solutions,” write the RTI staff in the report. “These respondents report having to call or fax the health plan even with these tools in place due to issues with getting the prior authorization completed through the electronic” system.

The electronic process also did not change the outcome of the requests, RTI International reports.

“This finding indicates that although electronic processes may lead to shorter times to a decision, the decisions did not change with electronic prior authorization in place because the rules pertaining to prior authorization did not change,” the report states.

Research points to drawbacks of prior authorization

Doctors have many stories to tell about cases where requirements seem more like hassles than thoughtful attempts to protect patients. And in some cases, they also have data that seem to support this idea.

In a 2020 paper, Dr. Aaron Secrest of University of Utah, Salt Lake City, and co-authors find a 99.6% approval rate for prior-authorization requests for two common procedures, suggesting insurers could cut back on these requests, they write in “Administrative Burden and Costs of Prior Authorizations in a Dermatology Department,” published in JAMA Dermatology. They urge insurers to consider cases where unnecessary prior-authorization requests may result in harm to patients, with little or no gain for insurers.

In this paper, researchers analyze the outcome of prior-authorization requests for September 2016 for his school’s dermatology department, which has 11 clinics.

They identified 626 prior-authorization requests stemming from 9,512 patient contacts.

Included in this mix were 95 requests for a procedure called Mohs surgery, in which doctors remove moving a thin layer of skin to treat skin cancer, usually the basal cell kind that’s rarely fatal.

The approval rate for Mohs surgery was 100%, the researchers report. They also find that 130 of 131 requests for excisions were approved.

The authors also describe a case where one of the department’s specialists wanted to give a middle-aged patient the generic medicine cyclosporine for a case of “severely flaring psoriasis,” a painful skin condition.

The prior authorization (PA) hurdle led to a 5-day delay before the patient could start treatment, the authors write. The patient’s condition worsened, resulting in the need for “a prolonged hospitalization” and an infusion of a costly drug, infliximab infusion, to control the acute flare. This cost the patient’s insurance tens of thousands of dollars and substantially affected the patient’s quality of life, they explain.

“The utility of cyclosporine PAs is questionable. Cyclosporine is a relatively inexpensive treatment for moderate to severe psoriasis, and from our experience, it is unlikely to be overused,” they write.

Similar experiences with prior authorization have been reported in other fields of medicine.

Writing in the Journal of Vascular Surgery: Venous and Lymphatic Disorders in May 2020, Dr. Thomas Maldonado of NYU Langone Health and co-authors examine how prior authorization applies to procedures done to improve circulation in the legs. Looking at the cases performed at NYU Langone in 2017, they report that  57.9% required prior authorization.

Of these, only 6.1% received initial denial, and nearly 40% of those denials  were overturned after appeal, Maldonado and co-authors write in their paper, titled “Prior authorization as a utilization management tool for elective superficial venous procedures results in high administrative cost and low efficacy in reducing utilization.”

Writing in Arthritis Care & Research in November 2020, Dr. Zachary Wallace of Harvard Medical School and co-authors report that 96% of prior authorizations were ultimately approved for patients who were treated for rare rheumatoid conditions, in which patients’ immune systems attack their own tissues. 

In their paper, titled, “Treatment Delays Associated With Prior Authorization for Infusible Medications: A Cohort Study,” Wallace and colleagues use electronic medical records to identify subjects for whom expensive medications given by infusion were ordered during treatment at the rheumatology unit of Massachusetts General Hospital between July 1st, 2016 and June 20th, 2018.

Of the 225 patients whose cases were studied, the infusion medications of 160 (71%) required prior authorization. These restrictions were associated with a greater number of days to infusion compared to cases in which no authorization was required, a median 31 days versus median 27 days. The delays were longer in 33 cases where the prior authorization was denied initially, with delays in these cases ranging from  31 to 76 days.

Patients denied the insured drugs had to rely more on medicines known as glucocorticoids, which put them at higher risk for infection, cardiovascular disease, and diabetes, Wallace and co-authors write. These disadvantages for patients were accompanied by extra work for doctors.

“In light of these findings, the value of PA requirements in healthcare is unclear and future studies should prospectively evaluate their impact on other patient-oriented outcomes,” the authors write.

Prior authorization as protection

In an interview with The Journalist’s Resource, Dr. Lee Newcomer, a former longtime top medical officer for insurance giant UnitedHealth, urged reporters to dig beyond simply reporting on cases where a particular patient must wait to get treatment.

He says there is a need for greater recognition of how the prior-authorization process can save money as well as spare patients from treatments unlikely to benefit them, Newcomer says. In many cases, the therapy being sought may simply be highly unlikely to benefit a patient. In the cases of some medications or treatments, “the evidence isn’t there” for its use, he says.

Newcomer cites the example of bone-marrow transplants for breast cancer in the 1990s. There was strong pressure on insurers to cover these treatments well before researchers effectively studied this approach. Once they did, the data indicated the costly and risky procedure did not work for breast cancer, write Dr. Gilbert Welch and Juliana Mogielnicki, then both with the Department of Veterans of Affairs, in a May 2002 article in The BMJ, titled “Presumed benefit: lessons from the American experience with marrow transplantation for breast cancer.”

But Newcomer also has advocated continual pruning of prior authorization requirements. 

Writing in the Journal of Oncology Practice in June 2018, he looks at cancer treatment and how it often triggers a series of prior authorizations for radiation therapy, genetic testing, diagnostic radiology, physical therapy, and durable medical equipment.

“The topics for prior authorization should be evaluated constantly and dropped when ineffective; it is an expensive operation for both the payer and the physician,” writes Newcomer, who served as a top medical officer for insurance giant UnitedHealth from 1991 through 2018.

Titled “Paradox of Prior Authorization: How Do We Get Value?” Newcomer’s editorial looks at different models UnitedHealth had tested for handling prior-authorization.

In 2014, UnitedHealth launched a digital form of prior authorization based on the guidelines of the National Comprehensive Cancer Network (NCCN) for treatment. The NCCC’s guidelines reflect the decisions doctors make in real-world treatment of cancer. The NCCN guidelines can allow for uses of cancer medicines based on study results, even if the Food and Drug Administration has not approved this same use of the medicine. UnitedHealth has tried skipping prior authorization by limiting payments for cancer treatment largely to courses of therapy approved by the NCCN.

UnitedHealth began its new digital authorization for cancer drugs in some of its Florida plans, creating “a natural experiment that allowed comparison of medical trends for oncology therapy,” Newcomer writes.

The cost trend for chemotherapy decreased by 9% in Florida in 2014 among UnitedHealth’s plans, compared with an 11% increase in chemotherapy cost trends for the rest of the nation not using prior authorization. The denial rates for therapy dropped to 1% in Florida.

But this approach did require additional time and effort from cancer specialists. Online processing time ran to about 9.5 minutes, but it took twice as long to complete a case by phone. And some cases may always require that kind of more extensive consultation during the prior-authorization process.

Physicians estimate that 10% to 20% of patients require exceptions from insurers’ rules for “unique clinical circumstances or a new medical discovery,” Newcomer writes. “These treatments require a communication and authorization process between the oncologist and payers. The payer criteria for coverage and the oncologist’s criteria for treatment may differ; one person’s evidence is another person’s anecdote, and only a discussion will resolve the differing viewpoints.”

Additional resources

For a better understanding of the reasons why insurers say prior authorization can protect patients, check out the Choosing Wisely campaign, created by the ABIM Foundation, a nonprofit charitable organization of the American Board of Internal Medicine, or the Less Is More initiative from JAMA Internal Medicine. These two sites contain many articles questioning the value of widely used treatments and drugs.

ICER
ICER describes its role as offering “evidence-based assessments” to “help level-set prices, so Americans pay fairly for good care and don’t overpay for treatments with only a small benefit.” ICER held a Dec. 3 webinar to discuss its first annual “Barriers to Fair Access” assessment of insurers’ policies on covering prescription drugs. Slides for the webinar can be found here: Fair Access: Coverage Policies in 2020 – ICER

Trade Groups: AHIP and AMA
Two trade groups at odds on the issue of prior authorization, America’s Health Insurance Plans and the American Medical Association, each have websites with information on this issue. They are worth a look.

AHIP’s website on prior authorization defines it as “one of the many tools health insurance providers use to promote safe, timely, evidence-based, affordable, and efficient care.” It acknowledges that the process can be burdensome and goes on to discuss key findings from its Fast PATH initiative.

AMA’s website on prior authorization offers resources, including research, “to support reform, improve practice efficiency and provide data to highlight the need for change.” The AMA also  has posted online a chart that outlines steps that state governments have taken regarding prior authorization.

The AMA published an article about a recent move in Texas to provide doctors with “gold cards” in terms of prior authorization. AMA described this statewide program, which took effect in September, as the first of its kind in the United States. Physicians who have a 90% prior authorization approval rate over a six-month period on certain services will be exempt—or “gold carded”—from prior authorization requirements for those services, AMA reports.

Key academic papers to read on this topic include:

Administrative Burden and Costs of Prior Authorizations in a Dermatology Department
Ryan P. Carlisle, Nicholas D. Flint, Zachary H. Hopkins, Mark J. Eliason, Kristina C. Duffin and Aaron M. Secrest, JAMA Dermatology, August 2020.

Changing the Game of Prior Authorization: The Patient Perspective
Martha E. Gaines, Austin D. Auleta and Donald M. Berwick. JAMA, Feb. 3, 2020.
This Viewpoint article examines concerns about insurers’ ​​reversing their prior authorization approvals after people have undergone treatment. The authors call for new rules that make insurers’ prior authorization decisions binding.

Paradox of Prior Authorization: How Do We Get Value?
Lee Newcomer. Journal of Oncology Practice, June 15 2018.

Presumed benefit: lessons from the American experience with marrow transplantation for breast cancer
H Gilbert Welch and Juliana Mogielnicki, BMJ, May 2002.

Prior authorization as a utilization management tool for elective superficial venous procedures results in high administrative cost and low efficacy in reducing utilization
Victoria Lee, Todd Berland, Glenn Jacobowitz, Caron Rockman, Mikel Sadek, Michael Barfield, Neal Cayne and Thomas S Maldonado, Journal of Vascular Surgery: Venous and Lymphatic Disorders,  May 2020.

Refocusing Medication Prior Authorization on Its Intended Purpose
Jack S. Resneck Jr, JAMA, Feb. 3, 2020.

Streamlining and Reimagining Prior Authorization Under Value-Based Contracts: A Call to Action From the Value in Healthcare Initiative’s Prior Authorization Learning Collaborative. Mitchell A Psotka, Elizabeth A Singletary, William K Bleser, Rachel A Roiland, Marianne Hamilton Lopez, Robert S Saunders, Tracy Y Wang, Mark B McClellan, Nancy Brown,  American Heart Association Prior Authorization Learning Collaborative. Circulation: Cardiovascular Quality and Outcomes, July 2020.
This paper outlines options for streamlining prior authorization, such as “gold carding” and electronic and automated prior authorization processes.

Treatment Delays Associated With Prior Authorization for Infusible Medications: A Cohort Study
Zachary S Wallace, Tyler Harkness, Xiaoqing, John H Stone, Hyon K Choi, Rochelle P. Walensky. Arthritis Care & Research, November 2020.

Regional Disparities in Qualified Health Plans’ Prior Authorization Requirements for HIV Pre-exposure Prophylaxis in the United States
Kathleen A. McManus, Samuel Powers, Amy Killelea,  Sebastian Tello-Trillo and Elizabeth Rogawski McQuade.
JAMA Network Open. June 2020.

The post A health care journalist’s guide to prior authorization appeared first on The Journalist's Resource.

“Unprecedented” is a word that journalists should use sparingly, but it’s appropriate for describing the controversy surrounding Biogen Inc.’s drug Aduhelm for Alzheimer’s disease.

In the wake of the June 7 approval of Aduhelm by the Food and Drug Administration (FDA), the consumer watchdog group Public Citizen called for the resignation of several senior agency officials. Two House committees began an investigation into the FDA’s handling of the Aduhelm application. And the FDA’s approval of the drug prompted the internal watchdog branch of the Department of Health and Human Services, its Office of Inspector General, to review how the agency is managing a process known as accelerated approval.

In 1992, the FDA launched the Accelerated Approval program to expedite the availability of new drugs that address an otherwise unmet medical need. This allows the FDA to approve drugs quickly by relying on a surrogate endpoint, which the agency describes as “a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit.”

In clearing drugs for accelerated approval, the FDA takes a risk that promising early signals seen in drug studies, such as an ability to keep tumors from growing, will eventually pay off by resulting in a clinical benefit — improving or extending patients’ lives.

The FDA granted Aduhelm its accelerated approval based on a surrogate marker, its ability to reduce the build-up of sticky amyloid plaques in the brain, which the agency called “a hallmark of Alzheimer’s disease.” At the heart of the concerns about Aduhelm is a question some doctors have asked in recent years: When granting accelerated approval of a drug, is the FDA doing enough to make sure there’s adequate evidence of the drug’s expected benefits?

The FDA doesn’t conduct large studies of medicines in patients. Instead, it relies on the results of studies that drug makers fund, which are usually led by scientists at academic institutions.

After winning an accelerated approval, companies are expected to continue their research and either deliver strong evidence of a meaningful benefit to their drugs, or agree to withdraw the FDA’s accelerated approvals. But drugmakers sometimes are slow to deliver these results or balk at allowing withdrawals of these FDA approvals even when further studies cast doubt on the benefits of the drugs.

Accelerated approval is an important topic for journalists to consider in their ongoing coverage of drug costs in America.

“Private insurance companies, Medicare, and Medicaid pay millions—maybe billions—of dollars for drugs for which we do not know the real benefits and risks. This raises insurance premiums and wastes tax dollars,” write Sarah DiMagno, Aaron Glickman and Dr. Ezekiel J Emanuel, in a 2019 invited commentary in JAMA Internal Medicine. “Exorbitant drug prices are bad enough for treatments that work. Charging vulnerable patients for drugs without evidence that they actually improve patients’ survival and quality of life is unconscionable.”

Emanuel returns to this topic in a September Viewpoint article in JAMA, noting the concerns raised by the Aduhelm approval. He urges changes to the FDA’s approach to handling accelerated approvals, including calling for automatic termination of approvals if confirmatory trials are not complete within a set timeframe.

“As of December 2020, a total of 24 of the drugs approved on the basis of accelerated approval had been on the market for more than 5 years without confirmation of clinical effectiveness,” writes Emanuel, the co-director of the Healthcare Transformation Institute at the University of Pennsylvania. “Although, in some cases, this may be because the trials are of rare diseases for which there are few patients, it likely also reflects a disincentive to reach completion.”

To cover the topic of accelerated approvals, journalists need to have a good grasp of the different paths the FDA has for approving drugs.

In this article we’ll explain:

• The FDA’s traditional drug approval process.
• How accelerated approval works – including examples of successes and controversies.
• The difference between the FDA’s accelerated approvals and the emergency use authorizations the agency used to speed up the distribution of COVID-19 vaccines.
• The controversy surrounding Aduhelm and its complicated path to approval.

Finally, we’ll offer reporting tips for journalists who are covering stories about drugs cleared by accelerated approvals.

FDA’s drug approval processes

The ideal application for full FDA approval of a drug is built on robust results from two large well-designed studies of the experimental medicine. These kinds of studies are known as Phase 3 trials, reflecting the third of three key steps in medical trials of new drugs.

Phase 1 studies start with perhaps 20 to 80 people, usually people in good health. This step is intended to see if a medicine is safe enough for further testing.  Phase 2 studies may involve hundreds of patients. These can give a good preview of how a medicine works, sometimes by measuring surrogate endpoints to get a quick read. These studies often enroll hundreds of patients. In Phase 3, medicines are often tested in thousands and even tens of thousands of patients.

However, there are alternate pathways to the full approval process – namely emergency use authorizations and accelerated approvals.

Emergency Use Authorizations (EUAs)

The FDA has several options for speeding medicines to market in urgent cases. In the case of COVID-19, for example, the FDA has granted special clearances known as emergency use authorization (EUAs) to products that have not yet been approved for U.S. sales.

EUAs are meant to aid in the response to events for which the federal government declares a public health emergency, such as the COVID-19 pandemic or a response to bioterrorism, such as an anthrax attack. EUAs can expire before or after the federal government deems that this event has ended. For example, the FDA in 2010 terminated EUAs for tests for detecting the H1N1 virus that had been granted when that flu posed a national threat.

The FDA in December 2020 used an EUA to clear the first COVID-19 vaccine, the one developed by BioNTech and Pfizer Inc. The key study on which this EUA rested counted cases of infection among study participants, of whom 18,198 received the vaccine and 18,325 received a placebo. The vaccine was judged 95% effective in preventing COVID-19 disease among these clinical trial participants, with eight COVID-19 cases in the vaccine group and 162 in the placebo group.

Pfizer in May submitted additional data on the safety and effectiveness of the vaccine and requested a full traditional approval. The FDA granted this in August. Moderna and J&J have plans to secure full approval of their vaccines as well. As with Pfizer’s application, the Moderna and J&J applications likely will provide additional information about how well their shots protect against COVID-19.

In all of these cases, the drugmakers presented the FDA with evidence about meaningful clinical outcomes such as their vaccines’ ability to prevent hospitalizations due to SARS-Cov-2 infection. 

Accelerated approvals: Clear successes, stumbles and battles with drugmakers

The FDA has used accelerated approvals since 1992 in cases where there are few or no other options for treating serious and fatal diseases. The first medicine given one of these conditional clearances was an HIV drug.

Remember that accelerated approvals are based on surrogate markers: data that suggest – but have not yet proven – that the drug will provide a meaningful benefit or clinical outcome, with the expectation that the drugmaker will be able to demonstrate a clinical outcome in the future.

Sometimes companies can quickly prove to the FDA that their medicines merit full approval.

The FDA in 2020 granted accelerated approval for Gilead Sciences’ drug Trodelvy for a form of breast cancer that has spread to other parts of the body. The FDA said this conditional clearance was based on a study of 108 patients that judged how many patients had notable tumor shrinkage. In April 2021, the FDA granted full approval based on additional data that suggested the drug helps patients live longer.

 In other cases, it can take years before results of trials conducted to confirm the expected benefits of a medicine are known.

In the case of Aduhelm, the FDA has given Biogen until 2030 to deliver proof that the drug’s action on amyloid plaques will translate into a meaningful benefit such as delaying the toll of Alzheimer’s disease.

Drugmakers sometimes struggle to meet the deadlines set by the FDA. For example, the FDA in 2016 ​​gave an accelerated approval for Sarepta Therapeutics Inc.’s drug Exondys 51 ​for Duchenne muscular dystrophy, a rare condition that is linked to a genetic mutation.

In the letter announcing the accelerated approval, the FDA gave Sarepta a 2021 deadline for delivering results of what’s called a confirmatory trial, a study done to test whether a drug can actually demonstrate an expected benefit. In this case, the FDA wants test results showing the drug help preserve motor skills in children with Duchenne muscular dystrophy.

But the FDA has accepted Sarepta’s delays in completing this work. The key trial of the drug is now expected to finish around 2026, according to a posting on the National Institutes of Health’s ClinicalTrial.gov site.

In a few cases, companies have pulled from the market drugs cleared through accelerated approvals. The FDA in 2016 granted an accelerated approval for Eli Lilly & Co.’s Lartruvo for a rare cancer called soft-tissue sarcoma. The approval rested on a study of 133 patients that suggested the drug helped patients live longer. But a larger study involving 509 patients failed to confirm this expected benefit. In 2019, Lilly asked the FDA to withdraw the approval, which the agency did in 2020.

In medical terminology, the uses of drugs for treating diseases are commonly known as “indications.” It’s important to note that one drug can receive multiple FDA approvals – a separate approval for each use.  The FDA’s withdrawal of an indication for a medicine doesn’t affect other approved uses of that medicine.

Companies sometimes resist the FDA’s demand for a withdrawal of an indication. For example, the FDA granted accelerated approval in 2011 for the drug Makena, now owned by AMAG Pharmaceuticals, as a means of reducing risk of preterm birth in certain women.

The FDA required a larger study as part of accelerated approval. The follow-on study of about 1700 women marked a setback for Makena. The FDA in 2020  sought the withdrawal of  the product from the market, citing disappointing results of a confirmatory trial. AMAG has not agreed. The FDA in August said it will hold a public hearing on this case, which had not been scheduled as of late September.

One of the most prolonged battles of this kind was Genentech’s resistance to the FDA’s calls for a withdrawal of the approval of its Avastin medicine for breast cancer, as described by reporter Rob Stein in a 2011 Washington Post story. 

Then FDA Commissioner Margaret A. Hamburg in 2011 revoked the agency’s approval of the breast cancer indication for Avastin after concluding that the drug has not been shown to be safe and effective for that use. The drug remained on the market, as it was approved for other cancers. Studies found that Avastin raised the risk of serious bleeding, heart attacks and other problems, the FDA said.

“Sometimes, despite the hopes of investigators, patients, industry and even the FDA itself, the results of rigorous testing can be disappointing,” Hamburg said in a statement. “This is the case with Avastin when used for the treatment of metastatic breast cancer.”

An industry-wide evaluation of accelerated approval for cancer drugs

The FDA has sped up the pace of accelerated approvals in recent years, largely for both clearing sales of cancer drugs and then for additional uses of these oncology medicines.

The FDA now is in the midst of what it calls an “industry-wide evaluation” of accelerated approvals for certain cancer drugs. This evaluation centers largely on checkpoint inhibitors — drugs intended to unmask a mechanism tumor cells use to evade detection by the body’s immune system, which would otherwise attack and destroy them, as described by the National Cancer Institute.

In recent months, there have been multiple withdrawals of additional indications granted for checkpoint inhibitors, note the FDA’s top cancer-drug regulators in an May article in the New England Journal of Medicine, titled “‘Dangling’ Accelerated Approvals in Oncology.” 

Drs. Julia Beaver, chief of medical oncology at the FDA, and Richard Pazdur, director of the FDA’s Oncology Center of Excellence, describe 10 cases where required follow-on studies did not confirm expected benefits for checkpoint inhibitor drugs. Drugmakers have withdrawn in recent months at least six of the indications for at least four drugs questioned by the FDA staff, but these medicines remain on the market. Beaver and Pazdur note that most accelerated approvals have remained in place, citing this as a strength of the program.

“The small percentage of drugs whose clinical benefit is ultimately not confirmed should be viewed not as a failure of accelerated approval but rather as an expected trade-off in expediting drug development that benefits patients with severe or life-threatening diseases,” they write.

Researchers outside of the agency who have studied the FDA’s accelerated approvals have drawn a somewhat different conclusion.

In a September article in The BMJ, Dr. Aaron S. Kesselheim, founder and head of Harvard University’s Program on Regulation, Therapeutics, and Law (PORTAL); Dr. Benjamin Rome, a health policy researcher who works within PORTAL; and Dr. Bishal Gyawali, an associate professor at Queen’s University of Medicine, report the findings of a study of how drugmakers respond to the FDA’s mandates on accelerated approvals. The researchers homed in on 18 indications for 10 cancer drugs for which post-approval trials failed to show an expected benefit, or for which studies were not completed.

Delays “in regulatory actions after negative confirmatory trials mean that patients will continue to use these therapies that lack evidence of clinical benefit,” the authors write in their article, titled “Regulatory and clinical consequences of negative confirmatory trials of accelerated approval cancer drugs: retrospective observational study.”

“The FDA should take actions to assure that risks and benefits are clearly communicated to patients and their physicians, including the fact that some of the approvals remain on the label despite the negative results from the confirmatory trials,” they add.

Gyawali addresses this same issue in plainer language in an Aug. 4 commentary in Medscape Medical News. He argues for a need to maintain the focus of pharmaceutical research on finding medicines that help patients live longer or better.

“An unmet need doesn’t imply that the treatment void should be filled with a drug that provides nothing of value to patients,” writes Gyawali.

The complicated case of Aduhelm

To reiterate, the usual path for an accelerated approval involves a company presenting the FDA with evidence suggesting a benefit of its medicine for people with a serious disease and promising to do larger studies to confirm the benefit.

With Aduhelm, though, the trajectory to approval was convoluted.

Biogen initially set out to win full approval of the drug, based on a paired set of Phase 3 trials for Aduhelm. In March 2019, Biogen announced that the studies had failed, but in October of that year, the company updated its stance. The company said the results for patients treated with a higher dose of the drug in one of its two studies meet the benchmark for success. It sought to make a case for full approval of Aduhelm based on a reevaluation of this study.

The FDA has advisory committees for different medical specialties, allowing it to draw expert feedback when needed on whether to approve drugs and devices. At a November 2020 meeting, members of the FDA’s advisory committee that focuses on drugs that affect the nervous system disagreed with Biogen’s view of Aduhelm. Asked by the FDA to vote on a question of whether findings of this study proved the effectiveness of Aduhelm, 10 panelists voted “no” and one choose an option of “uncertain.” No panelists voted “yes.”

The FDA is not bound by the recommendations of this panel or any other of its advisory committees, although it usually follows their advice. In this case, the agency’s leadership in June 2021 granted an accelerated approval to Aduhlem, in spite of the advisory committee’s vote.

Biogen officials argue that patients need access to Aduhelm while it continues research on the drug. Otherwise, many people could see their illness progress to a point where Aduhelm would not be expected to help, Dr. Alfred Sandrock, Biogen’s head of research, argued in a July 22 statement.

Several FDA officials worked with the company to keep the application on track, reported Adam Feuerstein, Matthew Herper and Damian Garde in a June STAT article, “Inside ‘Project Onyx’: How Biogen used an FDA back channel to win approval of its polarizing Alzheimer’s drug.”

Following the FDA’s June approval of Aduhelm, three physicians resigned from the advisory committee on neurologic drugs:  Dr. David S. Knopman, a clinical neurologist at the Mayo Clinic,  Dr. Joel S. Perlmutter, a neurologist at Washington University and Harvard’s Kesselheim.

Other members of the FDA panel that reviewed Aduhelm also have publicly criticized the agency’s decision. Four other researchers who have served on the agency’s committee on neurologic drugs joined Knopman, Perlmutter and Kesselheim in writing a July perspective article in the New England Journal of Medicine, titled “Revisiting FDA Approval of Aducanumab.” (Aducanumab is the drug’s scientific name.) The other authors of this article were Dr. G. Caleb Alexander,  Dr. Scott S. Emerson, Dr. Bruce Ovbiagele and Richard J. Kryscio.

In this paper, they note rising doubt about whether Aduhlem’s reduction of amyloid plaque has any meaningful benefit for people with Alzheimer’s disease.

Researchers have long theorized that abnormal levels of amyloid, a naturally occurring protein, disrupt cell function when they clump together, as the National Institute of Aging explains on its website.

But there’s debate about whether amyloid is the chief culprit in Alzheimer’s disease, note Knopman, Perlmutter, Kesselheim and co-authors in their NEJM article. Although there’s been significant work in recent decades targeting amyloid, more than two dozen therapies based on this theory have advanced as far as testing in patients, none of which produced a meaningful benefit for patients, they write.

The authors write that it’s “hard to reconcile the lack of convincing clinical benefit” seen in Aduhelm trials done to date with an “expectation of some clinical benefit of unknown magnitude” for people with Alzheimer’s disease.

“The overwhelming unmet need in this common and devastating disease should drive research investments, not lowering of regulatory standards that Americans rely on for safe and effective medicines,” they write.

Tips for journalists on covering medicines sold under accelerated approvals

1. If you’re reporting on a drug, note whether it has been granted an accelerated approval.

Members of the public may not realize how the FDA’s rules have changed over the years to speed medicines to market, says Diana Zuckerman, founder and president of the nonprofit National Center for Health Research, which both does its own research and analyzes studies done by others on medical treatments. Zuckerman emphasizes the need to make it clear in stories when the FDA cleared a drug based on limited evidence. “People need to understand that the standards are much lower than they used to be,” she says.

Indeed, many patients may not know their medicines have only conditional clearances, according to a September policy paper published in The Journal of Comparative Effectiveness Research.  Titled  “Potential policy reforms to strengthen the accelerated approval pathway,” the paper was authored by Anna Kaltenboeck, program director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center, Amanda Mehlman, director of strategic partnerships at the Institute for Clinical & Economic Review (ICER)  and Dr. Steven D. Pearson, the founder and president of ICER. In their report, they emphasize a need to use ​​”simplified language accessible to a lay audience” in explaining accelerated approvals. The paper is an excellent resource for reporters getting up to speed on this issue.

2. Tell your audience what deadlines and terms the FDA has set as part of the accelerated approval of any given drug.

You can find this information on the FDA’s website. We’ll use Aduhelm as an example, with screenshots from the FDA site.

First, go to the FDA’s Drugs@FDA website and enter the name of the medicine in question.

Next, click on the link for the approval letter.

Finally, read the letter and find the details on the requirement for the confirmatory study, which include the deadline dates.

3. Clearly describe the potential side effects and potential benefits of drugs about which you report. You can find these details on the prescribing label for the medicine.

It can be helpful to give your audience a link to a drug’s prescribing label, whether a medicine was given an accelerated or a full approval. At a minimum, journalists should always take a look at the label for any drug about which they report. 

You can find the labels through that same FDA website. We’ll use Aduhelm again as an example. As seen in the screenshot below, you can find the label under the section with the approval dates and letters.

Clicking on the “Labels for BLA 761178” brings you to the following screen. The supplemental guides can be very helpful in translating medical jargon for your audience. But it’s important to look at the label.

Pay attention to the sections on warnings and precautions, adverse reactions and clinical studies.

If you need help in understanding the information in the label, reach out to an expert such as Zuckerman of the National Center for Health Research or Michael Carome, the director of the Health Research Group at Public Citizen.

You can also look for doctors at local universities who may be familiar with the drug you’re covering. The National Institutes of Health’s website for searching medical journals, Pubmed.gov, is a great source for finding physicians and researchers to comment for your stories.

4. Note financial connections between the researchers and experts you quote and pharmaceutical companies.

Let your audience know if a researcher or a physician has done consulting work or has a financial relationship with pharmaceutical companies. These connections don’t necessarily sway their judgment, but they can have an influence.

A good way to prepare for interviews with doctors is to check the federal OpenPayments database. This is managed by the Centers for Medicare and Medicaid Services (CMS.) It allows searches of reports drugmakers have submitted to CMS about payments they have made to physicians through research grants and speaking fees, as well as meal expenses. Ask the doctors if they agree with what CMS has reported because there can be errors in any database.

5. When reporting FDA data on accelerated approvals, note that the “total approvals” tally refers to the number of indications, not to the number of drugs.

The agency issues public reports on its accelerated approvals twice a year.

In the June 2021 report, the FDA reports a tally of 269 “total approvals.” But in some cases, this tally refers to multiple approvals given to one drug. An analysis of the FDA’s chart for this article found the names of about 160 different drugs, some of which had multiple approvals for multiple uses. 

Further reading

A Middle Ground for Accelerated Drug Approval—Lessons From Aducanumab, Ezekiel J. Emanuel, JAMA, Sept. 23, 2021

“Dangling” Accelerated Approvals in Oncology, Julia A. Beaver and Richard Pazdur, New England Journal of Medicine, May 2021

Ensuring that accelerated approvals benefit patients, Editorial, The Lancet Haematology, September 2021

Regulatory and clinical consequences of negative confirmatory trials of accelerated approval cancer drugs: retrospective observational study, Bishal Gyawali; et al. The BMJ, September 2021.

Accelerated Approval of Cancer Drugs—Righting the Ship of the US Food and Drug Administration, Sarah S. P. DiMagno; et al. JAMA Internal Medicine, May 2019. This paper is a commentary on these two research articles:

• An overview of cancer drugs approved by the US Food and Drug Administration based on the surrogate end point of response rate, Emerson Y. Chen; et al. JAMA Internal Medicine, May 2019.
• Assessment of the Clinical Benefit of Cancer Drugs Receiving Accelerated Approval, Bishal Gyawali; et al.  JAMA Internal Medicine, May 2019.

A 25-Year Experience of US Food and Drug Administration Accelerated Approval of Malignant Hematology and Oncology Drugs and Biologics: A Review, Julia A Beaver et; et al. JAMA Oncology, June 2018.

Also, for those new to covering the FDA, there is a free online course available through EdX on the agency’s approvals of medicines, Prescription Drug Regulation, Cost, and Access: Current Controversies in Context. It is led by Kesselheim, who has published many papers on the FDA’s handling of drug approvals.

The post The FDA’s accelerated approval process: When drugs are cleared for sale based on limited evidence appeared first on The Journalist's Resource.

The United States is in the midst of what the Federal Trade Commission (FTC) calls a “dramatic restructuring” of how doctors practice medicine, with a marked shift away from the traditional model of physicians owning their own small practices toward one where they work for hospitals.

Between 2010 and 2016, the percentage of primary care physicians employed by a hospital or a large healthcare system rose to an estimated 44% from 28%, the FTC said in an April overview of its plan to study of the effects of consolidation of physician practices.

Alan Weil, the editor-in-chief of the journal Health Affairs, also sees a need for more research on the effects of this consolidation. There are potential opportunities in mergers and acquisitions such as improving coordination of care, a point emphasized by hospital associations. But research indicates these transactions also seem likely to raise costs, Weil says.

“We have lots of reasons to think that consolidation drives up prices,” Weil says. “It reduces competition. It gives the seller of the services more leverage when they’re trying to negotiate prices.”

There are two major trends in in health care consolidation. There are combinations of large organizations that provide similar services, so-called horizontal mergers, which tend to draw scrutiny from journalists and antitrust agencies alike, amid concerns about such mergers driving up the cost of medical care. But hospitals also are steadily acquiring smaller physician practices — so-called vertical consolidation.

Some of these acquisitions don’t meet the minimum size-of-transaction bar to warrant antitrust investigations, explain economists Cory Capps, David Dranove, and Christopher Ody in a 2017 Health Affairs article.

The May 2021 edition of Health Affairs includes two research articles that reveal new information about the effects of vertical consolidations.  In both studies, researchers show that practice patterns changed when physicians moved from private practice to a larger hospital system. 

“They look at actual behavioral choices made by individual clinicians who move from being on their own into a larger system, and you can really quite directly see the changes in what they do, and that that has consequences.”

Alan Weil, editor-in-chief of the journal Health Affairs

In one of the Health Affairs papers, “Hospital Employment Of Physicians In Massachusetts Is Associated With Inappropriate Diagnostic Imaging,” Gary Young, director of the Center for Health Policy and Healthcare Research at Boston’s Northeastern University, and his coauthors examine magnetic resonance imaging (MRI) referrals for three common conditions for which the American College of Radiology describes these tests as being “usually not appropriate.” The ACR views are widely viewed as recommendations against use of MRIs in the early stages of treating these conditions. The researchers show that patients whose doctors moved from private practice to hospital employment were more likely to get referred for MRIs.

In the other paper, “Higher Medicare Spending On Imaging And Lab Services After Primary Care Physician Group Vertical Integration,” Christopher Whaley of Rand Corp. and his coauthors find that vertical integration of physician group practices with hospitals or health systems increases the use of hospitals for common diagnostic imaging and laboratory tests and increases Medicare payments to hospitals.

Both papers advance the discussion of how joining hospital systems may alter the way physicians practice medicine, says Weil, who earlier served as the executive director of the National Academy for State Health Policy and as executive director of Colorado’s Department of Health Care Policy and Financing.  The researchers use data that allows them to home in on how choices of referrals differed.

“They look at actual behavioral choices made by individual clinicians who move from being on their own into a larger system, and you can really quite directly see the changes in what they do, and that that has consequences,” Weil says.

Inappropriate MRIs

In the paper focused on MRIs, Young and his coauthors build on earlier work that finds a substantial percentage of imaging procedures to be unnecessary or inappropriate. Yet diagnostic imaging remains a key source of revenue for hospitals. “Imaging services have been estimated to account for more than 30 percent of hospitals’ profits, and MRI scans specifically constitute a large portion of the high-margin imaging services that hospitals deliver,” they write.

Young’s coauthors on this paper were E. David Zepeda, clinical associate professor of health law, policy, and management at Boston University’s School of Public Health;  Stephen Flaherty, a data scientist at Harvard Pilgrim Health Care, in Boston, Massachusetts, and an assistant professor, Meehan School of Business, Stonehill College, in Easton, Massachusetts; and Ngoc Thai, a PhD student in population health at Bouve College of Health Sciences at Northeastern University.

The researchers followed data on patient care as physician employment changed. To do this, they used the Massachusetts All Payer Claims Database, drawing information about claims from 2009 to 2016. This dataset included patient-level information for diagnoses, procedures, and demographic characteristics. The claims also included information about which physicians provided the services involved in the claim. The researchers then used Medicare and insurer data to identify which physicians were in private practice at the time of the service or referral, and which were affiliated with hospitals.

From this data, Young and his co-authors identified 583 primary care physicians who transitioned from private practice to hospital employment and a comparison group including 3,102 physicians who were not employed by a hospital during that period. Each group’s demographic characteristics were similar for physicians and patients in terms of average years of experience and age, respectively.

Young and co-authors report that the patients whose doctors had shifted into hospital employment were more likely to get referred for MRIs and for “inappropriate” MRIs – those that fell outside of the guidelines set by the ACR. The average overall percent of office visits that generated a referral for an MRI jumped to 16.5% from 11.6% in the cohort of physicians after they shifted to hospital employment. In contrast, the comparison group showed an average referral rate of 11.3%.

The researchers also focused on three conditions for which the guidelines set by the American College of Radiology (ACR), intend to prevent inappropriate imaging use. They selected three common conditions for which ACR describes routine use of MRIs as being “usually not appropriate”: uncomplicated lower back pain, meaning cases where there does not appear to be another serious medical condition causing this discomfort; nontraumatic knee pain without joint effusion, or knee pain not known to be caused in injury and not showing an abnormal swelling; and nontraumatic shoulder pain without joint effusion.

In examining the claims data, they set a 30-day window for considering whether MRIs for these conditions should be judged inappropriate. If an MRI for one of the three conditions was scheduled less than a month after a doctor’s visit, the researchers judged that there had not been time for trying other options such as asking the patients to exercise at home. The percent of MRIs deemed to be inappropriate rose to 29.8% from 25.1% among the physicians who transitioned to hospital-based practice. The percentage for the control group was 24.9%

Young and his co-authors acknowledge several limitations with their study. They note the claims data do not contain complete information for patients’ health conditions and so cannot fully capture the reasons why patients were referred for an MRI. It’s also possible that patients were more likely to seek referrals from hospital-employed physicians, they write.

Part of the challenge in reducing inappropriate use of medical treatments and tests such as MRIs will be educating patients as well as doctors about the costs of low-value care, says Young, director of the Center for Health Policy and Healthcare Research at Northeastern University. The money spent on these tests diverts financial resources that could be used elsewhere in health care. But patients may not factor that into their personal decisions.

“In some cases, it’s patients putting the pressure on the clinician and the clinician is responding to that and thinking ‘Well you know what, I’m going to keep my patient happy. The patient isn’t paying very much for the procedure, the hospital’s happy about this if I do this. So, it’s a win-win-win, but not really because in the end, we’re all losing,” Young says.   

Young’s study was funded by a grant from the National Institute for Health Care Management Foundation. NIHCM Foundation also provides funding for The Journalist’s Resource.  

There have been efforts for many years to curb excess use of medical tests, especially in cases where a seemingly harmless test can set off a cascade of subsequent treatments that expose a patient to harm. Physicians may act on incidental findings from any imaging studies, including MRIs, write  Amanda M. Hall, assistant professor of Memorial University of Newfoundland, St John’s, Newfoundland, and co-authors, in a February 2021 article in The BMJ, a U.K.-based medical journal, titled “Do not routinely offer imaging for uncomplicated low back pain.”

“For example, disc abnormalities such as bulging disc or degenerative disc disease are commonly seen on images but may not be the source of pain, as they are also seen on images in up to 97% of asymptomatic patients,” they write. “Incidental findings may lead to further investigations, specialist referral, and more intensive treatment such as surgery, which limits access to those services for the patients who are in genuine need of such care.”

Hall’s co-authors on this paper are Kris Aubrey-Bassler, director of the Primary Healthcare Research Unit at Memorial University of Newfoundland;  Bradley Thorne, a patient advisor at Memorial University of Newfoundland; and Chris G. Maher, director of the Institute for Musculoskeletal Health, University of Sydney.

Inappropriate testing done for uncomplicated back pain has been a target of the Choosing Wisely campaign, created by the ABIM Foundation, a nonprofit charitable organization created by the American Board of Internal Medicine. Through this initiative, more than 70 medical specialty societies have published recommendations regarding tests and treatments that they say have been overused. These include a recommendation addressing back pain, developed with the American Academy of Family Physicians.

This recommendation notes that most people with lower-back pain will feel better in about a month, whether or not they have an imaging test. People may fare better by taking simple steps such as walking and using over-the-counter medicines, the recommendation says.

“Why waste money on tests when they don’t help your pain? And if the tests lead to surgery, the costs can be much higher,” the recommendation says.

A link between hospital affiliations and more tests ordered

In the second paper, Whaley and co-authors report a link between hospital affiliations for clinicians and a rise in the number of tests ordered for people enrolled in the federal Medicare program as well as in reimbursement for these tests. Medicare is the nation’s largest purchaser of health care, covering about 61 million Americans who are age 65 and older or have disabilities that qualify them for the program.

Whaley’s co-authors on this paper were Xiaoxi Zhao, a PhD student in the department of economics at Boston University;  Michael Richards, an associate professor of economics at Baylor University; and Cheryl L. Damberg, the RAND Distinguished Chair in Health Care Payment Policy and a principal senior researcher at the RAND Corporation.

The researchers drew from a pool of data for Medicare claims paid between 2013 and 2016. They used algorithms developed by the RAND Center of Excellence on Health System Performance to examine how the acquisition of physician practices affected orders for tests and imaging.

The monthly number of diagnostic imaging tests per 1,000 people represented in the Medicare claims pool, performed in a hospital setting, increased by 26.3 tests per 1,000 after the integration. The number of these tests performed in other settings decreased by 24.8 per 1,000. Hospital-based laboratory tests increased by 44.5 per 1,000 people enrolled in traditional Medicare and non-hospital-based laboratory tests decreased by 36.0 per 1,000.

Spending rose, too. Average Medicare reimbursement rose by $6.38 for imaging tests and $0.57 for laboratory tests That translates to $40.2 million and $32.9 million increases in Medicare spending, respectively, for the entire study period.

Whaley and co-authors note limitations to their work. They focused only on people enrolled in traditional Medicare rather than in insurer-run plans that manage Medicare benefits, commonly known as Medicare Advantage plans. The traditional Medicare program runs on a model of the federal government setting fixed prices for services, while the Medicare Advantage plan may involve more complex price negotiations. More than a third of people enrolled in Medicare — about 23 million — are in insurer-run plans.

In the paper, the researchers note it would be difficult to argue that people in traditional Medicare benefit from the extra spending on diagnostic tests. Instead, the increased spending reflects the different rates Medicare sets for services depending on the setting in which they are provided, they write. Such rates reimburse hospitals more for these tests than they reimburse competing sites of care, such as stand-alone imaging centers and freestanding diagnostic laboratory companies.

The higher rate of payment may reflect newer hospital systems that make it easier to order tests, Whaley says. That could make the difference in cases where a physician is weighing whether a patient needs a test.

In a case where a doctor isn’t sure if a patient needs a test, the convenience of ordering one within a hospital system may be a deciding factor, Whaley says.          

“And if you do join a large system, I imagine that how much revenue you bill is tracking pretty well, so, there’s also probably a financial incentive as well,” he says.

The research reported in that paper was supported through the RAND Center of Excellence on Health System Performance, which is funded through a cooperative agreement with the federal Agency for Healthcare Research and Quality. Additional support was provided by the National Institute on Aging.

For more help on reporting on the effects of hospital consolidation, see Hospital mergers and acquisitions of physician practices: Research illuminates what’s at stake for consumers and Covering hospital mergers and acquisitions of physician practices: 3 tips from experienced health care journalists.

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The COVID-19 pandemic likely will accelerate “one of the most concerning and constant trends” in U.S. medicine — the formation of large hospital chains that also acquire local physician practices, write three health policy experts in a February 2021 Viewpoint article in JAMA, “Overcoming the Market Dominance of Hospitals.”

Hundreds of independent physician practices and smaller hospitals lost revenue due to the pandemic’s disruption of routine medical care. These financial hits are likely to feed a drive for mergers and acquisitions that already had raised the cost of medical care, without improving its quality, they write.

“Consolidation has been a predominant business strategy for hospitals and physicians in the United States for decades,” write authors Dr. Robert P. Kocher, an adjunct professor at Stanford University; Soleil Shah, an MD candidate at Stanford; and Dr. Amol S. Navathe, an assistant professor of medical ethics and health policy at the University of Pennsylvania. “Hospitals consolidate to gain market share and use resulting leverage to charge higher prices to private payers or employers large enough to self-insure.”

These consolidations tend to raise prices for private health insurance providers without necessarily improving quality of care, according to a wide body of research published in major peer-reviewed research journals, including the New England Journal of Medicine, The Quarterly Journal of Economics and JAMA. 

Meanwhile, the Federal Trade Commission (FTC) in January 2021 announced plans for a major study of the effects of physician group and healthcare facility consolidation between 2015 and 2020.

Hospital acquisitions have continued even amid the disruptions caused by the pandemic. The number of announced hospital transactions for 2020 was 79, surpassing the 74 reported for 2010, but marking a drop from 92 in 2019, according to a tally kept by Kaufman Hall, a merger consultancy based in Chicago. However, the average size of each transaction increased – with the seller size by revenue averaging more $800 million in the second quarter of 2020,  according to Kaufman Hall. Another consulting firm, Deloitte, reported in December that it expected hospital mergers and acquisitions to continue in much of the United States.

Another trend to watch is vertical consolidation, in which hospitals gain dominance in their regions by acquiring a number of physician groups or other smaller medical clinics.

There are potential benefits for patients from hospital mergers, write economists David M. Cutler and Robert S. Huckman of Harvard University and Sayeh Nikpay of the University of Minnesota in a May 2020 Viewpoint article in JAMA.

“The benefit of consolidation will be facilities that do not close and communities that maintain sources of care,” the authors write in their article, titled “The Business of Medicine in the Era of COVID-19.”

“But there are likely to be costs as well. Consolidation among hospitals and between hospitals and physicians significantly increases health care prices,” they continue. “This trend will further increase health care spending at a time when the lingering effects of the virus will already be raising private insurance premiums.”

Over the years, the American Hospital Association, a health care industry trade group, has publicly criticized published research that has reported unfavorable results for consumers from hospitals’ mergers and acquisitions.

In covering the issue of hospital consolidation, journalists would do well to understand the basis of competing claims coming from the AHA and the findings in published papers from economists and other scholars.

Get to know the MedPAC report

A 2020 report from the Medicare Payment Advisory Commission (MedPAC) can be a good resource for reporters new to this topic.

Like journalists, lawmakers often get conflicting views about issues from different parties. MedPAC serves as a kind of on-call research firm for Congress. Due to MedPAC’s expertise, members of Congress sometimes order the commission to weigh in on the arguments being made in disputes on health policy, even on matters beyond Medicare’s payment rates.

In August 2018, the House Energy and Commerce Committee tasked MedPAC with reviewing what was known about the effects of hospital consolidation on costs.  

“Through its public hearings, the committee has heard differing views from experts on the extent to which consolidation is a cost driver in the Medicare program and the degree to which payment policies of the Medicare program encourage such consolidation,” wrote then Energy and Commerce Chairman Greg Walden, an Oregon Republican, and colleagues, in a directive to MedPAC.

In response, MedPAC staff did a wide sweep of studies and reports on hospital consolidation.

MedPAC looked at the AHA’s commissioned research, which that hospital trade group released to the public and promoted. The AHA had paid the consulting group Charles River Associations to study consolidation. In September 2019, AHA released a report in which Charles River consultants concluded that the increased scale of operations resulting from hospital consolidation allowed for an estimated 2.3% reduction in annual operating expenses. They also said their analysis supported a claim of improved quality following mergers and suggested hospitals may pass along these savings to patients.

The MedPAC staff also examined more than two dozen articles published in economic and medical journals, including studies that had gone through peer review. (This means the journal asks other experts in the field to review the study before publication and offer comments and criticisms.) The MedPAC staff also examined papers produced by think tanks, testimony presented to Congress and work published by the National Bureau of Economic Research. The MedPAC staff looked as well at FTC’s reports. MedPAC’s extensive review included some of the works that the AHA had challenged in its press releases.

What did MedPAC conclude about the effect of hospital consolidation on prices?

“Taken together, the preponderance of evidence suggests that hospital consolidation leads to higher prices,” the MedPAC report states. “These findings imply that hospitals seek higher prices from insurers and will get them when they have greater bargaining power.”

Does consolidation lead to better or worse care for patients?

“Because the literature is mixed, we cannot make a definitive conclusion about the effect of mergers on the quality of care other than to say the effect is not large enough to result in consistent findings across studies,” according to the MedPAC report.

In this research roundup, we’ll introduce you to some of the papers cited in that MedPAC report. Getting acquainted with the published literature on hospital consolidation will help you cover this topic thoroughly.

“The academic research can be an important underpinning for these kinds of stories,” says Reed Abelson, a reporter at the New York Times who covers the business of health care.

Understanding these studies can help journalists press hospital officials who likely will present their proposed mergers and acquisitions as beneficial to patients, adds Dan Gorenstein, executive producer and host of the health care podcast Tradeoffs and a former health reporter for Marketplace.

Reading up on the research ahead of an interview may be especially helpful to local reporters who are newer to covering health care. It can be intimidating to confront officials of hospitals, which often are major employers in regions. They may have organized public relations staffers ready to promote their messages. But academic researchers and economists have largely drawn similar conclusions about the negative effects of hospital consolidation, he says.

“Journalists can take heart in that,” Gorenstein says. “They can familiarize themselves with the research and can use that to help them ask the tough questions that need to be asked.”

Research Roundup

The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured

Zack Cooper, Stuart V. Craig, Martin Gaynor and John Van Reenen. The Quarterly Journal of Economics, February 2019.    

Prices for common procedures were found to be 12% higher when performed at hospitals that so dominate a region that they can be classified as having a monopoly compared with hospitals in markets where four or more rival hospitals compete, conclude Zack Cooper of Yale University, Stuart V. Craig of the Wharton School, Martin Gaynor of Carnegie Mellon University and John Van Reenen, now of the Massachusetts Institute of Technology.

That’s one of the key takeaways from their research, published in an earlier form in 2015 as a National Bureau of Economics Research (NBER) working paper with the same title. (Note: this research received financial support from the National Institute for Health Care Management Foundation, which also supports The Journalist’s Resource.)

To study how hospital consolidation affected prices, the authors worked with data from the independent nonprofit Health Care Cost Institute (HCCI). Three of the nation’s largest insurance companies – Aetna, Humana and UnitedHealth – had provided claims information. This pool of data represented services delivered between 2007 to 2011.

The dataset used by the authors represented the largest national sample of private medical insurance claims ever analyzed by academics. As Margot Sanger-Katz and Kevin Quealy note in a 2015 New York Times article about this research, “there is no national database of all insurance claims, which would give us a complete and perfect picture of how health care dollars are spent.”

In their work, the authors of “The Price Ain’t Right?” also look in depth at prices for seven common procedures: hip replacements, knee replacements, cesarean sections, vaginal births, diagnostic colonoscopies, certain MRIs of lower-limb joints and coronary angioplasties, which are procedures done to improve blood flow in clogged arteries. In examining 366 hospital mergers and acquisitions that occurred between 2007 and 2011, they find prices increased by more than 6% when the merging hospitals were geographically close, but not when they were distant.

Hospitals with a monopoly on services had more cases involving set prices set as a share of their charges, the authors conclude. Hospitals in more competitive markets seemed more likely to enter into what are called prospective agreements with insurers, with set prices for services, often using Medicare prices as a reference point.

Note: The authors acknowledge limitations in their work, most notably a lack of data from Blue Cross Blue Shield plans. That’s a point raised as well by the American Hospital Association in the press releases it has posted criticizing the work of Cooper and colleagues, such as this one, “The Price Ain’t Right” Ain’t Right Again!”

Cooper and colleagues addressed some of the issues AHA raised in their own 2019 webinar, which coincided with the hospital lobbying group’s release of the Charles River Associates report.

In this webinar, Cooper and other economists walked through the results reported in their papers and their methods for examining the potential costs to consumers of hospital consolidation and their results. This webinar makes a nice introduction for those less acquainted with this topic.  More detailed information on this study, including data visualizations, is available at www.healthcarepricingproject.org.

Changes in Quality of Care after Hospital Mergers and Acquisitions

Nancy D Beaulieu, Leemore S Dafny, Bruce E Landon, Jesse B Dalton, Ifedayo Kuye and J. Michael McWilliams. New England Journal of Medicine, January 2020.

Hospital mergers and acquisitions were associated in this study with a modest deterioration in patient experiences, as well as small and nonsignificant changes in readmission and mortality rates, the authors write in this comparative study by Nancy D. Beaulieu, Leemore S. Dafny, Bruce E Landon, Jesse B Dalton, Ifedayo Kuye, and J. Michael McWilliams, all affiliated with Harvard University at the time of publication.

Previous research showed hospital mergers led to higher prices paid by people with commercial insurance, but less was known about the effects on quality of care. To study how mergers and acquisitions affect quality, the authors devised a study comparing results on quality measures for hospitals that were part of consolidations against those for hospitals that had not.

The authors sought to do what is called a difference-in-differences analysis, a before-and-after natural experiment of sorts that allows researchers to study how an event that that’s already happened may have affected outcomes.

In trying to isolate whether hospital consolidation made a difference in the quality of medical care, the authors made their own version of active and control groups for the difference-in-difference analysis. They identified a pool of 246 hospitals that had been acquired in 198 transactions, and then another 1,986 hospitals to use as controls. They then looked at Medicare claims and data from the Centers for Medicare and Medicaid Services’ Hospital Compare site to check reported performance on four measures of quality of care. These included the rate of readmission after discharge and mortality as well as two composite measurements. One checked on what are called clinical-process measures, meaning it tracked how often doctors and nurses carried out expected tasks for patients such as making sure people were given the right antibiotic for pneumonia. The other composite measure was based on patients’ evaluation of their stays.

There was no significant differential change in 30-day readmission rates or in 30-day mortality between the two groups, the authors report. The researchers also find that a hospital’s having been acquired is associated with a modest differential decline in performance on the patient-experience measure.

Acquired hospitals had a significant differential improvement in performance on the clinical-process measure, meaning that doctors and nurses took expected steps in handling cases, but this could not be attributed conclusively to a change in ownership because differential improvement occurred before acquisition, the authors write.

Note: Melanie Evans of the Wall Street Journal wrote about this study in this January 2020 article,  Hospitals Merged. Quality Didn’t Improve.

Medicare Spending after 3 Years of the Medicare Shared Savings Program    

J Michael McWilliams, Laura A Hatfield, Bruce E Landon, Pasha Hamed and Michael E Chernew. New England Journal of Medicine, Sept. 20, 2018.

This study finds independent physician groups achieved greater savings when participating in a Medicare test program than did large health systems, which saw no improvement, on average, during the study period. This research challenged the prevailing assumption that large-scale consolidation would result in more efficient treatment of patients, thus reducing waste in health spending.

 McWilliams worked with Harvard University colleagues Laura Hatfield, Bruce Landon, Pasha Hamed and Michael E. Chernew to examine spending for patients whose doctors participated in the Medicare Shared Savings Program, an initiative meant to better coordinate medical treatments and thus potentially save money for the government and for older Americans.

As part of this research, the researchers looked at the results for two kinds of accountable care organizations (ACOs). These are physician groups and health systems that have agreed to work with Medicare on ways to try to reduce unnecessary spending by making treatment more efficient. McWilliams and colleagues looked at results achieved for ACOs that had entered the program in three different years, 2012, 2013 and 2014.

The effect of hospital acquisitions of physician practices on prices and spending    

Cory Capps, David Dranove and Christopher Ody. Journal of Health Economics, May 2018.

Hospitals’ acquisitions of physician practices led to an average price increase of 14.1% for services of doctors who shifted from independent practices to work for these organizations, write Cory Capps, a former staff economist at the DOJ’s antitrust division who now works at the consulting firm Bates White; and David Dranove and Christopher Ody, both of the Kellogg School of Management at Northwestern University.

The three researchers find variation among specialties, with prices for primary care physicians rising by 15%, for example, and those for care by cardiologists rising by 33.5%.

The authors drew these conclusions from an analysis of medical claims data from 2007 to 2013 from a data provider whose identity they agreed to withhold. In their paper, the authors explain the data came from claims made in states that represent more than 12% of the U.S. population. The average resident in these states was slightly older than the average American and had a slightly lower average household income, but the sample was otherwise demographically similar to the nation overall.

To track vertical integration in the hospital sector, the authors look at tax identification numbers in the claims data and what was then known as the SK&A database of physicians. (SK&A since has been acquired by the consulting firm IQVIA.)

The researchers did difference-in-differences analyses to see how the acquisition of physician practices affected prices. They compared pricing for patients seen at the hospital-acquired groups with pricing for patients of physician practices that had not been acquired.

They conclude that vertical integration of physician practices into hospitals was the most likely explanation for the 14.1% price increase reported in the paper.

One of the drivers of vertical integration, in this case the acquisition of physician practices by hospitals, are Medicare’s payment policies. The giant federal health program in some cases pays more for the same service if it is provided by a doctor affiliated with a hospital. Commercial insurers then look to these Medicare prices in setting rates.

“Thus, when a hospital acquires a physician practice, this can automatically trigger higher prices for the same procedure performed by the same physician at the same location. In the long run, private insurers may renegotiate these rates,” the authors write.

In their paper, the authors note that Congress acted in the Bipartisan Budget Act of 2015 to remove one incentive for new acquisitions of physician practices. Payments for certain hospital outpatient departments would not be made at rates higher than what Medicare paid independent physicians.

Note: In 2019, Capps presented a summary of this research paper to the Senate Judiciary Committee. Titled Your Doctor/Pharmacist/Insurer Will See You Now: Competitive Implications of Vertical Consolidation in the Healthcare Industry, this hearing also provides a good overview of this topic. There’s a recorded webcast on that Senate Judiciary webpage.

Physician Practice Consolidation Driven by Small Acquisitions, So Antitrust Agencies Have Few Tools to Intervene    

Cory Capps, David Dranove and Christopher Ody. Health Affairs, September 2017.

This paper presents research showing a pattern of growth of large physician groups through transactions individually too small to draw scrutiny by the Department of Justice or FTC. For 2016, for example, the size-of-transaction threshold for reporting proposed mergers and acquisitions subject to antitrust enforcement was set at $78.2 million.

The authors describe this pattern of growth as “whale eats krill,” as opposed to the larger “shark eats shark” transactions that do trigger federal inquiries.

In their research, the authors used insurance claims from a data provider, whose identity Health Affairs allowed the authors to keep hidden due to a previous confidentiality agreement. The claims studied were made between 2007 and 2013 in several states and collectively contained information pertaining to 12% of the US population. The authors restricted their analysis of market concentration to nine large specialties: primary care, surgery, diagnostic radiology, obstetrics/gynecology, pediatrics, dermatology, gastroenterology, cardiology, and otolaryngology. These nine specialties accounted for roughly 75% of physician output in the claim database.

They also looked only at claims from people living in what are called Metropolitan Statistical Areas (MSAs), which federal officials have defined for many years as urban regions with populations of at least 50,000. In their work, the authors also used a commonly accepted measure of market concentration, known as the Herfindahl-Hirschman Index (HHI).

The average size of the largest practices studied, those with more than 101 physicians, rose from an average of 261.37 physicians in 2007 to 345.56 by 2013, a gain of about 84 physicians. On average, of those 84 additional physicians, roughly one-seventh came from acquisitions of practices with 11 or more physicians, while one-half came from acquisitions of small practices with 10 or fewer physicians and about one-third came from other channels such as direct hires.

In other words, the authors find that the substantial majority—about 85%—of the growth of these largest groups came from acquisitions of small practices with 10 or fewer physicians and direct hiring. Small acquisitions and hiring, which they describe as “whales eating krill,” were unlikely to draw antitrust scrutiny, raising the prospect of continuing consolidation without antitrust review, they report.

At this time, federal officials don’t have the resources to address piecemeal consolidation of physician practices, which can result in higher costs of medical care, according to the authors. They suggested that policymakers consider several steps for “to slow the formation of powerful physician groups in highly concentrated markets.” The agencies could lower a benchmark, known as the Hart-Scott-Rodino threshold, for cases where the FTC and DOJ would look at physician practice acquisitions. State officials also could play a larger role, the authors write.

Additional research and resources:

Consolidation by Any Other Name: The Emergence of Clinically Integrated Networks    

M. Susan Ridgely, Justin W. Timbie, Laura J. Wolf, Erin Lindsey Duffy, Christine Buttorff, Ashlyn Tom and Mary E. Vaiana. Rand Corp. paper, 2020.

Ridgely and colleagues dive into the issues surrounding the emergency of clinically integrated networks (CINs), in which different medical services are bundled into organizations such a group of independent physicians who contract to jointly provide care and share profits. “There is no standardization of how CINs are structured or function, and there is only theory, but no evidence, of a positive effect on quality,” Ridgely and colleagues write. “CINs bear watching because their effects on price and quality are potentially as important as the effects of mergers and acquisitions.”

The Risks to Patient Safety From Health System Expansions

Susan Haas, Atul Gawande and Mark E. Reynolds. JAMA, May 2018.

Haas, a principal investigator of Ariadne Labs’ Project on System Expansion Risks to Patient Safety, and her colleagues examine the challenges for doctors and nurses as health systems merge. These include needing to get up to speed on new electronic health record systems, sometimes without enough planning having been done to aid them in this adaption. Hospital mergers can force doctors to quickly adapt to work in new practice sites, the authors write.

“When clinicians travel, they often receive little systematic orientation to their new setting, leaving them to practice with infrastructure, processes, teams, and a clinical culture that can vary in significant and unexpected ways from those at their home institutions,” Haas and her colleagues write in this Viewpoint article. “In the absence of guidance, physicians indicated that they have adapted to these new circumstances through trial and error, which can put patients at risk.”

Ariadne Labs is a joint center for health systems innovation at Brigham and Women’s Hospital and Harvard T.H. Chan School of Public Health.

Making health care markets work: Competition policy for health care    

Martin Gaynor, Farzad Mostashari and Paul B. Ginsburg. Brookings Institution, April 13, 2017.

This report offers an overview of the concerns about consolidation in health care and includes suggestions for increasing and maintaining competition, including making it easier for doctors to stick with independent practices. JAMA also published a summary of this report as a Viewpoint article with the same title in 2017.

The authors are Gaynor, a professor at Carnegie Mellon University and a former director of the FTC’s Bureau of Economics; Mostashari, who served as national coordinator for health information technology in the Obama administration and then founded a start-up, Aledade, aimed at helping primary care doctors make their independent practices more efficient and competitive; and Ginsburg, who was founding executive director of the predecessor to the Medicare Payment Advisory Commission (MedPAC) and its current vice chairman.

Health Care Costs Institute’s Healthy Marketplace Index and Hospital Concentration Index    

The nonprofit Health Care Costs Institute (HCCI) posts on its website detailed analyses of local medical costs and markets. HCCI’s Hospital Concentration Index offers a granular look at regions, while providing important context about variation seen in the United States in terms of hospital competition.

The Healthy Marketplace Index provides a broader look at how spending compares in different parts of the United States. In a 2017 article in Health Affairs, Understanding Health Spending: Lessons From The Healthy Marketplace Index, the staff of HCCI explain the kinds of comparisons that can be done with this online tool.

For more on covering this topic, see “Covering hospital mergers and acquisitions of physician practices: 3 tips from experienced health care journalists.”

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In seeking to win his current job, U.S. Health and Human Services Secretary Xavier Becerra assured senators that he’d stick with his quest to prevent consolidation in the field of health care from raising costs for consumers and businesses.

“I believe that all Americans should be able to access affordable health care, and part of that is identifying solutions to hospital over-consolidation,” Becerra told the Senate Finance Committee in February. “I hope I have the opportunity to work with you to tackle this issue and pursue solutions that strengthen our federal programs and protect patients and consumers.”

In choosing Becerra, President Joe Biden tapped one of the nation’s leading figures in the battle against higher costs of medical care due to consolidation. As attorney general of California, Becerra scored a notable 2019 win against one of the state’s largest hospital systems, Sutter Health, which included pledges by the medical organization to halt practices that limited insurers’ bargaining clout.  Both state and federal officials are under pressure to address the consequences of consolidation in health care. The Federal Trade Commission in January 2021 announced plans for sprawling investigation into how hospitals mergers and acquisitions of physician practice merger affect competition.

The number of independent hospitals has declined in recent years as a result of mergers, while the number of hospitals that are part of larger systems has risen, according to a report from the nonprofit Kaiser Family Foundation. By 2017, two thirds (66%) of all hospitals were part of a larger system, as compared with 53% in 2005, the report says. Other published reports, including a key one from the Medicare Payment Advisory Commission, have found hospital consolidation raises costs of health services. There are mixed reports on what happens to the quality of care, as explored in an accompanying research roundup.

For journalists, there’s pressure to cover a complex topic amid conflicting information from competing organizations. Below are tips about how to cover hospital consolidation and the integration of physician practices offered by Reed Abelson, a longtime reporter at the New York Times who covers the business of health care,  Dan Gorenstein, executive producer and host of the health care policy podcast Tradeoffs and a former health care reporter for Marketplace; and Samantha Liss, a senior health care reporter at Industry Dive, who earlier reported on health care for the St. Louis Post-Dispatch.

1. Follow the small acquisitions.

There are two major trends in in health care consolidation. There are combinations of large organizations that provide similar services, so-called horizontal mergers, which tend to draw scrutiny from journalists and antitrust agencies alike, amid concerns about such mergers driving up the cost of medical care. But hospitals also are steadily acquiring smaller physician practices — so-called vertical consolidation.

Some of these acquisitions don’t meet the minimum size-of-transaction bar to warrant antitrust investigations, explain economists Cory Capps, David Dranove, and Christopher Ody in a 2017 Health Affairs article. But published studies and papers have found hospital consolidation in both forms can raise the cost of care, a topic covered in greater detail in our related research roundup.  

Vertical health care consolidation also needs scrutiny, writes Erin C. Fuse Brown, director of the Center for Law, Health and Society at Georgia State University College of Law, in an August 2020 article for the nonprofit National Academy for State Health Policy.

“Policymakers are now starting to realize the threat posed by vertical health care consolidation, years into a wave of vertical mergers that is accelerating with the strain on independent practices from the COVID-19 pandemic,” Brown writes in her article, titled “State Policies to Address Vertical Consolidation in Health Care.”

Liss says it’s important for local news reporters to try to keep tab on those smaller transactions happening in their communities. Journalists may notice a pattern such as consolidation of the orthopedic specialists or obstetricians working in their region, only if they pay attention, she says. Otherwise, this consolidation can go undetected while a hospital builds up significant market dominance, Liss says.

“Maybe it’s that last deal where folks realize, ‘Oh … this one entity controls X amount of the surgery centers in this state’ or there are no more independent cardiologists or independent OB GYNs,” she says.

2. Ask employers and state attorneys general for their views on consolidation, and get to know the community.

Many employers, especially larger ones, are opting to pay for some or all of the health services for their workers directly from corporate funds rather than by purchasing health insurance for them, according to an October 2020 report from the nonprofit Kaiser Family Foundation.

That gives these companies an even higher stake in monitoring what’s happening with prices charged by hospitals and physician offices.

“They can be helpful in explaining some of the dynamics and how it affects their employees,” Abelson says.

She also recommends talking to state attorneys general who may monitor hospitals’ mergers and acquisitions. These can include insurance departments and attorneys general.

Liss urges journalists to make time to visit the communities likely to be affected by a merger.

Journalists can try to talk to people in local businesses like coffee shops and also reach out to physicians working in what are called independent practices, meaning they are not affiliated with hospitals. Liss also suggests contacting groups such as the Chamber of Commerce. In many cases, hospitals will be major employers in a community, sometimes even the largest one. By trying to immerse themselves in a community, journalists can learn what the people living there hope a hospital merger or large acquisition will do, she says.

3. Review the published research on hospital consolidation. Seek out experts to help you explain the conclusions of published papers in simpler terms.

Abelson, Liss and Gorenstein all recommend becoming acquainted with the studies published on the effects of hospital consolidation. The Journalist’s Resource covers some of this work in an accompanying research roundup.

“The academic research can be an important underpinning for these kinds of stories,” says Abelson.

Preparing this way can help journalists ask questions about the assertions hospitals may make about how consolidation can benefit patients, all three journalists say. Hospitals, which often play a large role in community life, may not welcome these questions about their acquisitions, Liss says.

“It can be intimidating when you have maybe the area’s largest employer breathing down your neck,” she says.

Gorenstein notes that journalists may only have a few chances to explain for their audiences what’s at stake with hospital consolidation. Local reporters in resource-constrained newsrooms may not have the opportunity to report more than one or two stories on the issue.

“You’re only going to have so many opportunities to capture the essence of the story,” he says. “So you want to make sure when you come out of the gate, you’re getting it right and you’re really grounded in the evidence and the data.”

Much of the research in this field is a little wonky, and may take a little extra time to translate for your audience. But many researchers are willing to walk journalists through their work.

“The academic community stands ready to help,” Gorenstein says.

Source list

Below is a list of organizations and researchers who have told The Journalist’s Resource they are willing to help reporters.

• Cory Capps , a partner at the economic consulting firm Bates White. A former staff economist at the Justice Department’s antitrust division, Capps has published articles on the limits of federal power to police hospital mergers.

• Erin C. Fuse Brown , an associate professor of law at Georgia State University. Her expertise includes regulation of health care markets and competition. She also wrote an handy overview of hospital consolidation issues for the National Academy for State Health Policy.

•  Zack Cooper , an associate professor of economics and public health at Yale University.  An author of a widely cited paper, “The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured,” Cooper also offers many resources for studying the effects of consolidations on the Health Care Pricing Project website.

• Dr. Adrian Diaz, a national clinician scholar at the University of Michigan Institute for Healthcare Policy and Innovation. Diaz has published research looking at how consolidation affects surgery.

• Dr. Susan Haas, an obstetrician-gynecologist and co-principal investigator of Ariadne Labs. Haas’ work includes efforts to understand and avoid the risks to patients when consolidation of hospitals forces physicians to quickly adapt to new practice settings.

• Thomas (Tim) Greaney, a visiting professor at UC Hastings Law. A former assistant chief in the DOJ’s  antitrust division, Greaney specializes in the effects of consolidation on health care and the tools the federal government has to monitor these transactions.

• Health Care Costs Institute (HCCI). Supported by health insurance, foundations and the research community, the nonprofit HCCI has a broad collection of statistics available on U.S. medical spending.

• Dr. J. Michael McWilliams , a professor of health care policy and medicine at Harvard Medical School. McWilliams has published research papers on the effects of consolidation on health care.

• Mark Miller, executive vice president of health care at Arnold Ventures. A former executive director of the Medicare Payment Advisory Commission, Miller’s expertise includes the debate about how federal reimbursement policies have worked to encourage consolidation.

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By its design as the national health plan for older Americans, Medicare insures a disproportionate number of people who take prescription drugs.

The majority of participants in the giant federal health program last year — 52.6 million, or 86% of the 61.2 million enrolled — were age 65 and older, according to the most recent report from the Medicare board of trustees,  which comprises federal officials leading health, labor and  retirement programs. The rest of the enrollees qualified due to disabilities. (The annual trustees report is a key source for statistics on Medicare.)

And people are more likely to need medicine as they age, as shown in a May 2019 report from the Centers for Disease Control and Prevention (CDC). About 85% of people age 60 and older in the U.S. reported having taken one or more prescription drugs in the past 30 days, while only 47% of those ages 20 to 59 did, according to 2015-2016 data from the CDC’s National Health and Nutrition Examination Survey.

Medicare Part D is an optional program to help people enrolled in the federal health program pay for prescription drugs. With annual expenses running to about $100 billion last year, it is the dominant insurer in the U.S. pharmaceutical market.

While funded by Medicare, Medicare Part D plans are managed by insurers such as the for-profit UnitedHealth and nonprofit Blue Cross Blue Shield plans. These insurers compete for customers, offering plans with varied monthly premiums and deductibles.

The annual open enrollment period for the Part D program allows older Americans the opportunity to shop among the plans available in their regions — and choose a different plan from the previous year if they would like. Open enrollment runs each year from Oct. 15 to Dec. 7.

Many people don’t take the time to shop for Part D plans each year, instead sticking with the coverage they already have, and thus missing out on savings, according to Leigh Purvis, director of health care costs and access in the policy institute within AARP, formerly known as the American Association of Retired Persons. (AARP, a member-driven nonprofit that recruits people age 50 and older, has almost 38 million members, according to its website.)

Purvis emphasized this point during an October 2019 event held by the nonprofit Alliance for Health Policy, titled “Modernizing Medicare Part D.”

“By not switching, a lot of them are actually paying a lot more for their Part D coverage than they potentially could from a plan that would offer similar coverage but potentially with lower premiums, lower cost sharing,” Purvis said. “So it’s not to their benefit to stay with those plans year after year.”

Yet, more than half of people in Medicare who could shop for a better deal miss this opportunity, according to an Oct. 29, 2020, report from the Kaiser Family Foundation, a nonprofit organization that conducts analyses and surveys about health care issues.

Tricia Neuman, executive director of the foundation’s program on Medicare policy, and her colleagues did an analysis of 2018 data taken from the Medicare Current Beneficiary Survey (MCBS). This is an ongoing survey that seeks to include a representative sample of the Medicare population.

Only 43% of people enrolled in Medicare reported in 2018 that they review or compare Medicare coverage options at least once every year, while 57% reported that they do not review or compare options annually, Neuman and her colleagues write.

They also found people with more education appeared more likely to shop around. Almost two-thirds of respondents with less than a high school education (63%) reported not reviewing coverage options annually, compared with 53% of individuals with a bachelor’s degree or higher. A third (33%) of people enrolled in Medicare with less than a high school degree say they never review their options, Neuman and her colleagues write.

Shopping among Medicare drug plans can be a daunting task, with consumers often having to navigate among dozens of options available.

In many cases, people earlier in their lives received health insurance as part of employment compensation offered to them or family members, notes Brian McGarry, an assistant professor in the departments of medicine and public health sciences at the University of Rochester, whose research focuses on the economics of aging.

In many companies, benefit specialists weed through competing available health plans and then offer workers a narrow selection of choices, sometimes only one or two options. With Medicare, this task rests directly with older Americans.

“Upon turning 65 they asked to become experts in insurance plans and making choices across insurance plans,” McGarry says. “It’s a lot to ask.”

Navigating the Medicare plan finder

To help people sort through their options, Medicare has a website for comparing Part D plans.

The Centers for Medicare and Medicaid Services (CMS) in 2019 redesigned the plan finder in response to complaints about the website being confusing, difficult to use and sometimes inaccurate, as explained in a 2019 Health Affairs research article by McGarry and two co-authors: Nicole Maestas, an associate professor at Harvard Medical School; and David C. Grabowski, a professor at Harvard Medical School. Their article is titled “Assessing The Redesigned Medicare Plan Finder Tool: Room For Improvement.”

When consumers provide their Medicare ID number, the redesigned Medicare plan finder can fill in automatically information about medicines taken by people already covered by Part D, they write.

“This information is critical to producing accurate personalized cost estimates for each available plan. In the past, consumers needed to enter this information by hand,” McGarry, Maestas and Grabowski write. “Because Part D enrollees fill an average of 4.5 prescriptions a month, this task was likely an important barrier to effective Plan Finder use.”

CMS also has fixed an issue that McGarry and co-authors cited in their Health Affairs paper. The Medicare Plan Finder in 2019 had a default to sort among plans by the monthly bill — or premium — customers would pay to insurers.

“A large literature stresses the power of choice architecture and defaults – such as the ordering of options in a menu – in driving individuals’ choices,” they write. “This new default or sorting plans by their premium should be expected to steer users toward plans with low premiums, some of which may be undesirable for a number of reasons.”

The focus on premiums could result in some consumers buying Part D plans that had higher total costs, factoring in out-of-pocket payments for medicines, McGarry says.

But the 2021 version of Medicare’s plan finder website automatically sorts options by showing what it calls “the lowest premium + drug cost.” This combines the potential Part D customers’ annual payments to the insurer plus an estimate of what medicines will cost, based on drugs consumers now are taking.

Testing out the plan finder site with a hypothetical patient

Journalist’s Resource used Medicare’s plan finder site to test how these different sorting options would work for a hypothetical patient: someone living in Los Angeles who needed three medicines: the blood thinner Eliquis , plus a cholesterol reducer (atorvastatin) and high blood pressure pill  (lisinopril ). Journalist’s Resource chose these medicines for our hypothetical patient because they are among the most widely used by people enrolled in Part D Plans. Medicare has an online database that is easily searched, the  Part D Drug Spending Dashboard. This dashboard shows that in 2018, almost 11.9 million people in Part D plans took atorvastatin, 8.3 million took lisinopril and 1.6 million used Eliquis.

Using the “lowest drug + premium cost” search option, the hypothetical Los Angeles customer would have estimated annual costs of $1,363.42 for 2021 by selecting the Clear Spring Health Premier Rx plan. The estimated cost would drop to $1,317.80 if the customer used mail-order pharmacy.

Searching on “lowest monthly premium,” the first option shown would be Aetna’s SilverScript SmartRx plan. Its monthly premium would be $7.20, while the Clear Spring premium would be $13.30.

But the estimated total drug cost with the Aetna plan would be $2,759.00, which would only drop to $2,758.83 if the customer used the mail order option.

The Clear Spring plan has not been established long enough to earn marks in the star ratings developed by CMS. CMS uses these ratings to give Part D customers information about how plans have handled factors like customer service in the past.  The hypothetical customer might choose to look for a plan that had already earned a score from CMS.

Medigap Question

During Part D open enrollment, people also have the option of switching to what are called Advantage plans, where  sometimes manage their entire Medicare benefit.

The Advantage plan is formally known as Medicare Part C. Medicare divides its health benefits roughly into Part A for hospital services and Part B for visits to physicians’ offices. Advantage plans cover everything covered under Part A and Part B, and often cover Part D as well. About 24 million people enrolled in Advantage plans, accounting for more than a third of Medicare’s total enrollment of 61.2 million, according to the annual report from the board of trustees for the giant health program.

Congress allows Medicare Advantage plans to offer their customers extra benefits traditional Medicare does not, helping them attract customers. And these Advantage plans may reduce their expenses for customers. The hypothetical Los Angeles resident described above, for example, has a choice of 59 Advantage plans in addition to 32 standalone Part D plans, meaning ones that manage only the pharmacy benefit.

Using the Medicare Plan Finder, that customer would see that the Blue Shield Inspire (HMO) plan wouldn’t charge a monthly premium. Total estimated annual costs would be $654.36. This Medicare Advantage plan, as shown in the screenshot below, includes some coverage for dental, vision and hearing services.

The trade-offs

But there are often trade-offs for these kinds of perks for customers of MA plans, such as limits on access to medical care, write David J. Meyers, Amal N. Trivedi, and Vincent Mor, all of Brown University, in a May 2019 Health Affairs article, “Limited Medigap Consumer Protections Are Associated With Higher Reenrollment In Medicare Advantage Plans.”

Many people in traditional Medicare use a supplemental form of insurance, known as Medigap, to help pay their share of medical expenses. Traditional Medicare does not pay for all services, but instead has set copays that people must contribute. There is no limit on how much these copays may be, and Medigap insurance can help cover the cost of copays and deductibles.

Medicare Advantage plans, in contrast, have limits on what their customers may have to pay out of pocket. People enrolled in these plans don’t need and shouldn’t buy Medigap plans, CMS said in its “Medicare and You Handbook 2021.”

People enrolled in traditional Medicare can use their health benefits to see any doctor enrolled in the program. But Medicare Advantage plans are run along the lines of other commercial insurance plans. Insurers try to direct patients to the network of doctors and hospitals with whom they have reached agreements about payment rates. For MA customers, visiting doctors who are not in their insurers’ networks is more expensive than seeing ones who have agreements with the health plans.

In an interview with Journalist’s Resource, Meyers of Brown University said the perks of Medicare Advantage tend to appeal to people in better health, while restrictions on medical services make the insurer-run plans less attractive to people in need of more health care.

“During beneficiaries’ first twelve months of Medicare eligibility, beginning at age sixty-five, federal law requires insurers to offer guaranteed issue for Medigap plans without restrictions for preexisting conditions or any other sociodemographic factor,” Meyers and his co-authors write. “Insurers are also prohibited from charging higher premiums for preexisting conditions.”

But people lose this federal protection if they use a Medicare Advantage plan. Only eight states have laws that can preserve some access to the supplemental insurance for those seeking to switch back to traditional Medicare: Alaska, Connecticut, Maine, Massachusetts, Minnesota, New York and Vermont, Washington, Brown and his co-authors write.

That’s why the switch to Medicare Advantage may prove costly for those people who would like to switch back to traditional Medicare during a subsequent enrollment period to cope with a serious illness.

“Medicare beneficiaries with complex care needs often face a higher burden of costs and may benefit from a greater continuity of care,” they write. “In most states these enrollees may face significant barriers to enrollment in Medigap that may increase their exposure to high out-of-pocket spending and lead to disruptions in the continuity of care if they need to switch between MA and traditional Medicare.”

CMS included a warning about potential loss of Medigap in a guide on enrollment. The following information appears on page 74 of CMS’ “Medicare and You Handbook 2021.”

In an Oct. 2 tweet, Kaiser’s Neuman also sought to draw attention to the trade-offs involved in MA. The COVID-19 pandemic poses risk to older people, which may make them want to consider traditional Medicare’s potential advantages in case of a serious illness.

The start of the #Medicare open enrollment is less than 2 weeks away

With older adults at great risk of serious illness if infected with the virus, this may be the year seniors focus on what matters most if they get sick (cost-sharing, networks) vs healthy (gym membership)

— Tricia Neuman (@tricia_neuman) October 2, 2020

For on the cost of drugs, see Drug Prices: Why prescription medicines remain unaffordable to many people.

The post The Medicare Part D open enrollment period: What you and your audience need to know appeared first on The Journalist's Resource.

There may be few issues that unite Americans ahead of the 2020 election as do their concerns about the cost of prescription drugs.

A clear majority — 75% — of respondents to a July survey said the cost of prescription medicines would be among the factors likely to influence their votes this year, according to a report from Gallup and the nonprofit West Health. Gallup reported on results from 1,007 interviews conducted with adults between July 1 and July 24.

In fact, 5% of this group surveyed cited the cost of prescription medicines as the most important factor, with another 30% saying the cost of medicine was among the most important issues influencing their votes. Another 40% report described the cost of medicine as an issue of “mid-range” importance. Only 24% classified this as being among the least or among the least important issues likely to affect their votes.

For journalists covering health care in the context of the election, it’s important to have a handle on the state of pharmaceutical prices in the United States. This explainer, in addition to providing an initial overview, will address five aspects of the debate about the high costs of medicines.

1. What are the 2020 presidential candidates saying they will do to lower drug prices?
2. Why doesn’t Medicare, the biggest purchaser of drugs, directly negotiate on drug prices?
3. What’s the deal with rebates and discounts?
4. What is the “distinctly American” phenomenon of specialty drugs?
5. How much does it cost to develop a new medicine anyway?

Americans spend far more per capita, on medicines than their counterparts in other wealthy nations, according to the Organization for Economic Cooperation and Development. OECD is a group that studies the factors that promote the development and maintenance of middle-class  nations such as access to education and health care.

In 2018, spending on medicines, including over-the-counter drugs, per capita in the United States was $1,229, more than a third higher than the next country in this OCED survey, Switzerland, with spending per capita of $894. In Germany and Canada, the spending on medicines per capita was $884 and $865 respectively, with the OECD having reported all of this spending in U.S. dollars.

And people in the United States are far more likely than their counterparts to forgo medicine due to concern about cost, according to a paper published in August 2020 in Health Affairs, “Compared With Other Countries, Women In The US Are More Likely Than Men To Forgo Medicines Because Of Cost.”

In this paper, Jamie R. Daw, an assistant professor in health policy and management at Columbia University’s Mailman School of Public Health, and Michael R. Law, director of the Centre for Health Services and Policy Research at the University of British Columbia, report on their analysis of international surveys done by the nonprofit Commonwealth Fund. For this work, Daw and Law analyzed data from based on three rounds (2014, 2016, and 2017) of the Commonwealth Fund’s International Health Policy Survey, with these surveys having had a total of 24,724 respondents ages 18-64 and 42,911 respondents age 65 and older.

Among survey respondents in the United States who were between ages 18 to 64, 19.6% of respondents reported having not taken medicine as directed due to concern about cost, Daw and Law write. That was more than double the 9.4% for Canada, the country with the next highest rate of what the researchers called “self-reported cost-related nonadherence to prescription medicines.” The rate of this nonadherence in the United Kingdom and Germany was less than 3.0%, write Daw and Law.

The same holds true for people age 65 and older, even with Medicare offering a prescription drug plan, known as Part D, for senior citizens. Of respondents from the United States, 11.3% reported skipping prescription drugs due to concerns about costs. Canada had the next highest rate of people who skipped doses of medicines, 4.7%

Recent news stories and papers published in medical journals tell of cases where people have forgone critical medicines such as cancer drugs and insulin due to cost. Liz Szabo of Kaiser Health News, for example, has repeatedly examined the consequences for patients of costly new cancer medicines, including a 2018 story on a South Dakota woman who was weighing whether to continue taking a cancer drug that would cost her nearly $17,000 a month in out-of -pocket cost.

People with diabetes lack a sufficient amount of insulin, a kind of chemical messenger produced in the pancreas gland of mammals. Insulin helps escort sugar into cells, giving them needed energy. Insulin has been often cited in the debate on the costs of medicines. Last year, Kasia Lipska, an associate professor at the Yale School of Medicine, and colleagues reported in JAMA Internal Medicine on the struggles of people with diabetes to buy insulin. In their research letter, titled “Cost-Related Insulin Underuse Among Patients With Diabetes,” they write about 199 people with diabetes who were surveyed at the Yale Diabetes Center in New Haven, Conn. Some 59 of those 199 reported rationing their insulin due to its cost. The majority of those in this survey — 147 — were age 64 or younger.

Lipska presented these results before a 2019 House panel examining the high cost of drugs. She told them a vial of a certain brand of insulin, Lantus, may cost $200 at a Connecticut pharmacy, with the price jumping to almost $300 if the insulin is packaged as a prefilled pen.

Yet, commercial sales of insulin dates to the 1920s when scientists figured out how to make a medicine for people with diabetes by extracting insulin from animal pancreases.

Drugmakers then figured out how to engineer bacteria cells to produce insulin, allowing for the 1982 introduction of a biotech version of the medicine. By the 1990s, scientists modified biotech insulin to allow for faster absorption, earlier peak of action, and shorter duration of action. The first of these revamped insulins, Eli Lilly & Co.’s Humalog, reached the market in the United States in 1996 with a cost of about $21 a vial, Lipska told the House Energy & Commerce Committee’s panel on oversight and investigations.

“Since then, there’s been no innovation to improve Humalog. It is the same exact insulin hormone,” Lipska said in her testimony. “The only thing that’s changed is the price: it now costs over $250 a vial.”

1. What are the 2020 presidential candidates saying they will do to lower drug prices?

Both President Donald Trump, a Republican, and former Vice President Joe Biden, a Democrat, have highlighted insulin costs in their discussions of the need to lower drug prices.

In a January interview with the New York Times editorial board, Biden noted the widespread discontent among Americans about sticker shock often experienced at pharmacies. He spoke of a need for the federal government to act to make medicines more affordable.

“This is a place where I find, whether you’re Republican or Democrat, you think you’re getting screwed on drug prices. And you are, in terms of everything from insulin to inhalers and a whole range of other things,” Biden said. “So, again, can I guarantee that it gets done? No, but I can tell you what, if anybody can get it done, I can, and I think there’s a consensus for it.”

The Trump administration this year took a step that could help many older Americans get cheaper insulin in 2021 through Medicare Part D plans. The Centers for Medicare and Medicaid Services (CMS) will run a test, known as a model, through which Part D plans can offer to cover their customers monthly insulin supply for a copay of no more than $35.

About one in every three people enrolled in Medicare has diabetes, with more than 3.3 million of them using one or more of the common forms of insulin, according to CMS. In 2018, for example, more than 1 million people enrolled in Medicare used Sanofi’s Lantus Solostar insulin, according to CMS’ website for tracking the program’s spending on drugs.

The expected launch of the voluntary $35-a-month copay for insulin may help some older Americans, but there are limits to this plan even for customers of Part D plans, write Juliette Cubanski, Tricia Neuman, Sarah True and Anthony Damico in a June 2020 brief from the nonprofit Kaiser Family Foundation. The 2021 offer does not apply to all enrollees in Part D nor will it cover all insulin products, write Cubanski, Neuman and True, all of KFF, and Damico, an independent consultant.

“The new model also does not address underlying list price increases for insulin or affordability concerns for people who are uninsured or covered by other sources of coverage,” they write.

In July and September, Trump announced a series of plans regarding pharmaceutical prices with some of his most sweeping proposals appearing unlikely to take effect quickly, if ever, due to political obstacles. These include an effort to tie prices in the United States to those paid in other wealthy nations.

Another Trump suggestion directed community health centers to share with their patients the savings they receive on insulin through a federal drug discount program, known as 340B. He included this in a July statement. In September, the Department of Health and Human Services put forward a notice of proposed rulemaking regarding the community health centers.

But the community health centers already have a good reputation for sharing these savings and they only represent a small portion of insulin providers, Jon Greenberg wrote in an Aug. 3 examination of Trump’s claims for the nonprofit Poynter Institute’s fact-checking organization PolitiFact.

PolitiFact  deemed Trump’s statements about his plans to lower drug pricing to be  “mostly false.” In his July 25 tweets,  Trump claimed that his actions would lead to the biggest “price reductions in history, by far!”

“Nothing like this has ever (happened) for our citizens, especially our Seniors. REMEMBER YOUR FAVORITE PRESIDENT!” Trump added.

The hitch was that Trump’s July statements, presented to the public under the executive orders, were merely directed for federal agencies to take action on his plans. These statements themselves didn’t change any policies.

“If words matter, Trump’s manner of talking about the future as if it were already in the past clearly runs afoul of the facts,” writes Jon Greenberg in the Aug. 3, 2020 PolitiFact article.

Trump’s July and September statements on drugs were released as executive orders, a term that may make these statements from the White House appear to the public have more political heft than they actually do. The executive orders in these cases make no changes in federal policy in and of themselves. They simply outline Trump’s goals and direct the Department of Health and Human Services to take action in the future.

“It’s the administration telling itself to do something,” KFF’s Neuman says. “It’s like talking out loud.”

So far in the Trump administration, the most concrete steps taken to address the costs of medicines are the voluntary $35 Part D insulin copay set to start next year and his 2018 enactment of bipartisan congressional legislation that ended gag orders on pharmacists, Neuman says.

Earlier pharmacists had complained to lawmakers about rules that prevented them from helping their customers get the best deals on medicines. By 2018, more than 20 states had enacted such laws, the lobbying group for older Americans, AARP said, citing the National Conference of State Legislatures.

“For all of the conversation that there’s been about drug pricing, there’s remarkably little that’s happened” during the Trump administration, Neuman says.

As seen below, Neuman created a timeline of key proposals discussed by Trump that have not yet materialized.

There are areas of overlap between Trump’s proposals and ideas backed by Biden.

On his campaign website, Biden has suggested using a model called “external reference pricing” — Biden’s website links to a research article on the topic in Health Affairs, “Using External Reference Pricing in Medicare Part D to Reduce Drug Price Differentials With Other Countries.”

Under this model, the price for certain more innovative medicines would be pegged to those seen in other nations. In cases of newly introduced medicines, the Biden plan calls for use of an evaluation by an independent board. The result would be what he calls “a reasonable price” paid by the top purchaser of medicines, the Medicare program, as well as by the government-run insurer he intends to create, known as a public option. Private insurers that sell plans in state and federal exchanges would use the same price, he said.

Trump also has endorsed the idea of using other nations’ prices as a benchmark to lower those paid in the United States, but has not yet taken formal action on this.

Over a year ago, CMS finished a draft plan for an international pricing index model that would apply to Medicare’s Part B drug purchase, but it has never been released to the public in full detail. Instead, the draft has been lingering under review at the Office of Management and Budget (OMB). OMB’s  website for tracking the status of proposed federal rules says the draft has been under review since June 20, 2019. OMB does a last check on proposed rules and regulations before they are released. Below is a screenshot of the OMB dashboard listing for an international pricing model for Part B drugs.

In many cases, proposed rules will later be withdrawn if they encounter serious political opposition. The Obama administration, for example, in 2016 withdrew a proposed rule for changing how Medicare Part B pays for medicines. It was intended to reduce financial incentives for doctors to prescribe more expensive therapies. In July 2019, Trump withdrew a proposed rule that would have ended a widespread practice in which drugmakers give rebates to insurance middlemen in Part D.

In his September statements on drug prices, Trump emphasized his drive to peg prices in the United States to those paid in other nations. He expanded on his original plan of using this international pricing model for Part B drugs and included the larger portion of Medicare spending, the Part D plans, in his outline. In this outline, the Trump administration described what it called a “most-favored-nation price.” Adjusting for volume and differences in national gross domestic product, this would be the lowest price for a medicine that the drug manufacturer sells in a member country of the Organisation for Economic Co-operation and Development (OECD) that has a comparable per-capita gross domestic product.

Trump also on Sept. 24 floated the idea of issuing $200 discount drug cards to about 33 million people enrolled in Medicare. The White House then declined the following day to explain where it would find the funds or legal authority for this program

The drugmakers’ lobbying group, the Pharmaceutical Research and Manufacturers of America (PhRMA), quickly objected to Trump’s outline. Drugmakers have long contended that bids to reduce their profits would crimp the flow of new drugs to market. PhRMA pointed to the percentage of money spent on medicines that flows to middlemen in the supply chain, known as pharmacy benefit managers.

“The focus of any reforms must be on lowering costs for patients, ensuring patients’ access to medicines, addressing the misaligned incentives in the pharmaceutical supply chain and protecting the critical work being done to end COVID-19,”  PhRMA CEO Stephen J. Ubl said in a Sept. 13 statement. “Unfortunately, instead of pursuing these reforms the White House has doubled down on a reckless attack on the very companies working around the clock to beat COVID-19.”

Drugmakers have been among the biggest political spenders for years, according to the nonprofit Center for Responsive Politics’ OpenSecrets.org website, which tracks campaign contributions and lobbying.

Still, there appears to be growing bipartisan interest in the idea of using foreign prices as a benchmark to drive down pharmacy costs in the United States. A Republican Pennsylvania lawmaker, state Sen. Tom Killion this month introduced a bill that would tie prescription drug prices for his constituents to the much lower prices charged to Canadian consumers. He said his proposal is based on model legislation unveiled in August by the nonpartisan National Academy for State Health Policy (NASHP).

The plan is to make insurers’ payments for medicines similar to those for other health services, where insurers — whether government or private — set rates, said Trish Riley, executive director of NASHP, in a statement.

“States can’t wait for long promised federal action. This law would bring immediate savings on the most costly drugs,” Riley said.

The immediate backers of Killion’s bill include a Democrat, Sen. Timothy Keaney, and four Republicans.

In December 2019, two House Republicans — Rep. Brian Fitzpatrick of Pennsylvania and Rep. Jaime Herrera Beutler of Washington State — joined the chamber’s Democrats in passing, 230-192, a bill that also would use foreign prices as benchmarks to drive down the cost of medicines in the United States.

The bill, known as  the Elijah E. Cummings Lower Drug Costs Now Act, or  (HR 3), calls for using prices paid for drugs in Australia, Canada, France, Germany, Japan, and the United Kingdom as a benchmark for those in the United States. The bill would have Medicare initially negotiate about its payments for at least 25 brand-name drugs each year, with this target doubling to 50 within a few years.

After Trump issued his statement on Sept. 13 about seeking an international pricing framework to drive down pharmacy costs in the United States, the chairman of the House Ways and Means Committee, Richard E. Neal, urged the president to embrace the Democratic plan.

“This empty executive order is just another smoke and mirrors charade from the White House, not a real solution to make medicines affordable,” Neal said. If Trump “seriously wanted to lower drug prices and ensure Americans do not pay more for prescriptions than people in other countries, he would support H.R. 3, legislation the House passed last year that would achieve those very goals.”

2. Why doesn’t Medicare, the biggest U.S. purchaser of drugs, directly negotiate on drug prices?

Congress has taken different approaches in designing the terms under which the two largest federal health programs, Medicaid and Medicare, buy drugs.

Medicaid is a program run by states with federal contributions and oversight. It covers people with low incomes and disabilities. Almost 67 million people were enrolled in Medicaid as of May 2020, including about 29 million children. In 1990 Congress decided that drugmakers who want to have their products covered by Medicaid must give rebates to the government. The initial rebate is equal to 23.1% of the average manufacturer price (AMP) for most drugs, or the AMP minus the best price provided to most other private-sector payers, whichever is greater. An additional rebate kicks in when prices rise faster than general inflation.

In 2017, Medicaid spent about $64.0 billion on prescription drugs, excluding ones given in hospitals. To this, the pharmaceutical industry returned $34.9 billion in rebates, bringing net drug spending to $29.1 billion, according to the Medicaid and CHIP Payment and Access Commission.

There’s no similar simple formula for seeking discounts for drugs covered by Medicare.

For many years, Medicare didn’t cover prescriptions dispensed at pharmacies.  Medicare  began as a program that covered largely hospital care  (Part A) and services provided by physicians (Part B). Many cancer drugs and medicines for rheumatoid arthritis are administered in doctors’ offices. To pay for these, Medicare has long applied a premium meant to cover the cost of stocking and administration to what’s considered an average price for these medicines, known as Part B drugs. Spending on Part B drugs rose by 9% in 2018 to $35 billion, according to the July 2020 data book for the Medicare Payment Advisory Commission.

In 2003, Congress added a pharmacy benefit to Medicare, known as Part D, which may spend about $106 billion this year, according to the most recent report from the Medicare board of trustees.  Congress outsourced negotiations for Part D drug prices to insurers. Medicare pays insurers such as UnitedHealth and Kaiser Permanente to manage the Part D benefit. Insurers also are playing a larger role in managing Medicare through the program’s expanding Part C, or so-called Medicare Advantage plans. About 37% of the 61 million people enrolled in Medicare last year enrolled in Advantage plans, which administer their Medicare Part A (hospital care) and Part B (physician services). In some cases, Advantage plans manage all four parts of the Medicare benefit.

Private insurers have not had as much success as has had Medicaid with rebates, write Edwin Park, a research professor at the Georgetown University Center for Children and Families, and Andrea Noda, director of health care at the nonprofit Arnold Ventures, in an April 2020 article in Health Affairs, “Alternative Drug Purchasing Arrangements Do Not Justify Raising The Prices Medicaid Pays For Brand Drugs.”

In 2015, the average rebate paid by manufacturers to Medicaid on brand-name drugs was 66.9% of retail prices, compared to rebates of only 28.9% of retail prices provided to Medicare Part D plans, Park and Noda write, citing the nonpartisan Congressional Budget Office.

And there’s been debate how what happens with the rebates given to Part D plans.

Trump in July again backed the idea of shifting the savings from rebates more directly to the prices that consumers pay at pharmacy counters. He issued an executive order that in theory would revive the effort abandoned last year, although as of late September no further action had been announced on this.

Even with Part D coverage, people with serious medical conditions can face high pharmacy costs. That’s due in part to the design of Medicare’s pharmacy benefit. Congress created a gap in coverage — known as the donut hole — to try to encourage consumers to buy cheaper drugs when available, such as using a generic version of a medicine instead of a branded one.

The donut hole for 2020 opened when consumers and their Part D plans spent $4,020 on medicines. Consumers then may have to pay as much as 25% of the cost of a medicine unless their total pharmacy costs for the year reaches the threshold for what’s called catastrophic coverage, set at $6,350 for out-of-pocket expenses in 2020.

Under catastrophic coverage, people who do not qualify for a low-income subsidy typically pay 5% of each drug’s price, according to a 2017 report from the Office of the Inspector General at the Department of Health and Human Services. These costs are on top of the out-of-pocket costs they face before entering catastrophic coverage.

“From 2010 to 2015, beneficiaries’ out-of-pocket costs for high-price drugs in catastrophic coverage increased 47 percent,” the staff of the Office of the Inspector General write. “In 2015, beneficiaries paid an average of $257 a month for each high-price drug in catastrophic coverage, up from $175 in 2010.”

Trump’s July executive order regarding rebates cited this report.

“Medicare patients, whose cost sharing is typically based on list prices, pay more than they should for drugs while the middlemen collect large `rebate’ checks,” the order said. “These rebates are the functional equivalent of kickbacks, and erode savings that could otherwise go to the Medicare patients taking those drugs.

The trade group America’s Health Insurance Plans argues a shift in rebates would raise premiums, which are the monthly bills for coverage, citing a report done by CMS’ actuaries. The relatively slow growth of Part D premiums has been a point of pride for backers of the program. The average basic premium for Medicare Part D prescription drug plans will rise by 50 cents from $30 in 2020 to $30.50 in 2021.

The structure of Part D has created a system where consumers as a group get a benefit, but at a higher cost to people who need costly medicines, especially those for which large rebates are given, according to Steven M. Lieberman and Paul B. Ginsburg, both of the Brookings Institution, and Erin Trish of the University of Southern California’s Leonard D. Schaeffer Center for Health Policy and Economics. Ginsburg is chair in health policy studies at the Brookings Institution and directs the USC-Brookings Schaeffer Initiative for Health Policy.

The “fact that Part D beneficiaries tend to prefer plans with low premiums creates a strong incentive for [pharmacy benefit managers] to favor drugs with large rebates, since those rebates enable Part D plans to reduce premiums,” the three write in a Health Affairs article titled “Sharing Drug Rebates With Medicare Part D Patients: Why And How.”

“Thus, instead of creating incentives for plans and their PBMs to prefer drugs with the lowest net cost, the current system instead favors drugs with high rebates,” Lieberman, Ginsburg and Trish write. “In turn, this creates a system of incentives that can lead to higher drug spending overall.”

Even people with federally subsidized Medicare Part D drug coverage struggle to keep up with pharmacy costs. In 2019, Colette Dejong, chief resident in the Department of Medicine at the University of California, San Francisco, and colleagues published a report in JAMA Cardiology that found the cost of a new heart drug, sacubitril/valsartan, might put it out of reach of people enrolled in Medicare’s Part D pharmacy plans.

Marketed as Entresto, Novartis AG’s sacubitril/valsartan in 2018 was the first new drug to show mortality benefit for heart failure with reduced ejection fraction in more than a decade, Dejong and her colleagues write in their research letter, “Assessment of National Coverage and Out-of-Pocket Costs for Sacubitril/Valsartan Under Medicare Part D.”

The drug received expedited U.S. Food and Drug Administration approval in 2015 and a spot in the American Heart Association/American College of Cardiology/Heart Failure Society of America’s guideline in 2016.

But for people enrolled in Medicare Part D plans, the annual out-of-pocket costs related to sacubitril/valsartan would be about $1,632, Dejong and colleagues write. This could discourage use of the medicine. Novartis, maker of Entresto, says the list price for this medicine for people with prescription drug coverage is $544.75 a month, which runs to $6,537 a year.

“Since more than 80% of deaths from heart failure occur in people older than 65 years, we examined Medicare Part D plans nationwide to explore whether high cost sharing or a lack of coverage could be barriers to the adoption of sacubitril/valsartan,” Dejong and colleagues write.

In a research letter that appeared in JAMA Internal Medicine on Sept. 14, 2020,  “Out-of-Pocket Costs for Novel Guideline-Directed Diabetes Therapies Under Medicare Part D,”  Dejong and colleagues look at how expensive newer diabetes pills can be for people enrolled in Part D. People with Type 2 diabetes, the kind also known as adult onset, often begin their medical treatment with an older generic drug, metformin.

In the past, the American Diabetes Association (ADA) recommended physicians add other predominantly inexpensive generic drugs as a second-line of therapy for those who needed more help in controlling their blood-sugar levels.

The ADA recently shifted its recommendations and endorsed several “costly, predominantly brand-name drugs,” as preferred second-line medications for people with diabetes and an established or increased risk for atherosclerotic cardiovascular disease, heart failure, or chronic kidney disease, Dejong and her colleagues write.

Dejong and her colleagues say physicians should consider the extra cost of these newer diabetes pills when treating patients. Using the newer medicines could increase yearly out-of-pocket costs by threefold to eightfold for people with diabetes, from less than $360 to $1200 or up to $2000, they write.

“Because higher copayments lead to poorer adherence and worse health outcomes, clinicians should discuss affordability with patients when changing diabetes regimens,” they write.

The academic researchers also included a policy prescription in their paper. Dejong and her colleagues argue for a switch to allow Medicare to take the place of its network of insurers and directly hammer out deals with drugmakers on the costs of medicines. This is an idea that has had the staunch support of Democratic presidential nominee Biden and at least at times, President Trump.

“As out-of-pocket costs for a single diabetes drug can approach the proposed $2000 cap, broader cost containment efforts should be considered, such as allowing Medicare to negotiate prices with pharmaceutical manufacturers,” they write.

There is a largely partisan split about allowing direct Medicare negotiations, with Democrats backing it and Republicans generally opposed.

“Other developed countries negotiate with the pharmaceutical companies, and prices in those countries are four or five or ten times less for the exact same drugs,” said Rep. Frank Pallone Jr., the New Jersey Democrat who is chairman of the House Energy and Commerce Committee,  in a December 2019 floor speech. “This simply isn’t fair, and the American people are rightfully fed up. It is time that we finally level the playing field and empower the federal government to negotiate a better deal.”

The federal government sets prices for medical services, working in consultation with industry groups. But taking this approach with medicines could result in shortages, said Sen. John Cornyn, a Texas Republican. He said the federal government’s clout would make this bargaining akin to negotiating “with a gun to one’s head.”

“It is not a normal give-and-take negotiation,” Cornyn said in a July 2019 speech on the Senate floor. “Ultimately, what happens with price controls is it creates scarcity because, at some point, the manufacturer or the producer of that  commodity will say: I am not going to produce that at that controlled price by the government.”

3. What’s the deal with rebates and discounts?

There’s widespread frustration among lawmakers and policy analysts about the lack of clarity about the role of middlemen in the supply chain for medicines. Known as pharmacy benefit managers (PBMs), these businesses describe the aim of their business as making drugs more affordable for consumers. Insurers like Cigna and UnitedHealth operate some of the nation’s largest PBMs, as does pharmacy giant CVS Health, which also owns insurer Aetna.

“They will tell you their mission is to lower drug costs,” said Rep. Earl L. “Buddy” Carter, a Georgia Republican, a pharmacist and a critic of PBMs, in a speech on the House floor last year. “My question to you would be: How is that working out?”

Pharmaceutical executives have said PBMs benefit from a system that encourages high list prices for drugs. PBMs then offer rebates to these inflated prices, with insurers using these funds to lower premiums, Merck Chief Executive Kenneth Frazier told the Senate Finance Committee last year. But people who face serious illnesses and need costly drugs sometimes purchased medicines at list price, effectively subsidized customers in better health, Frazier said.

“In this way, our insurance system is broken,” Frazier said. “We urge you to support action to make sure that all patients benefit from the discounts we make available.”

Frazier said Merck’s average net price for its medicines declined in 2017 by almost 2%, with the discounts given to insurers and PBMs falling more than 45% lower than the list price.

“Despite these very large discounts, patients do not see a commensurate benefit,” Frazier said. “In fact, patient out-of-pocket costs continue to rise, and patients are being asked to shoulder more of their drug costs than other health care services.”

But both drugmakers and PBMs have done well financially in recent years, while attempting to shift responsibility for high cost of medicines in the United States, said Sen. Tina Smith, a Minnesota Democrat, in a floor speech on May 15, 2019.

“‘We aren’t the problem,’ say the drug companies. ‘It is the PBMs. It is the insurers. It is everybody else but us.’ I would argue that everyone has a role to play,” Smith said. “Lots of companies profit from high drug prices all along the supply chain. That needs to be fixed, and all of these players need to be held accountable.”

Merck had a profit of $9.8 billion last year from sales of $46.8 billion, according to its annual filing with the Securities and Exchange Commission (SEC). Pfizer Inc., one of the world’s largest drugmakers, reported profit last year of almost $16.3 billion from almost $51.8 billion in revenue. About 46%  of its revenue is derived from sales in the United States, where medicines cost far more than they do in many other rich nations. (SEC filings should be a go-to source for journalists reporting on the pharmaceutical industry. The companies outline possible pitfalls with their experimental medicines, along with quarterly updates on profit and revenue. The SEC offers an introduction to its forms here.)

One of the largest PBMs, Express Scripts, reported a profit of $4.5 billion in 2017 with annual revenue of about $100 billion, the largest financial year completed before it was purchased by insurer Cigna Corp. The largest PBMs now are owned by insurers, which do not break out the financial profits of these businesses. Cigna reported that its health services business, which includes its PBMs, earned about $5 billion in profit last year with revenue of $96 million.

In arguing for their members’ contributions to consumers, the trade group for PBMs, the Pharmaceutical Care Management Association has said the industry only keeps a small portion — about 6% — of money spent on prescription drugs.

PBMs first emerged in the 1980s, offering services to insurers such as processing pharmacy claims and implementing drug identification cards, electronic records, drug formularies, and online processing, write Trevor J Royce of the University of North Carolina at Chapel Hill and colleagues in a May 2020 article in the JCO Oncology Practice, “Impact of Pharmacy Benefit Managers on Oncology Practices and Patients.”

“PBMs have consolidated significantly in the past decade,” they write. “The three largest PBM companies—Express Scripts, OptumRX, and CVS Caremark—process 85% of all prescription claims and administer drug benefits for > 266 million Americans in public and private insurance plans.”

Payments for PBM services are partially pegged to the size of the rebates they negotiate from drugs’ original list price. Critics contend this gives PBMs an incentive to drive up the list prices, write Elizabeth Seeley, an adjunct lecturer at the Harvard T.H. Chan School of Public Health, and Aaron S. Kesselheim, a professor at Harvard Medical School, in a 2019 brief prepared for the nonprofit Commonwealth Fund.

“Patients may bear these high prices if their cost-sharing is based on a percentage of the list price or if they are among the 25 percent of Americans who have high-deductible health plans,” write Seeley and Kesselheim. “In the commercial market, 39 percent of employers reported plans having a deductible that includes the pharmacy benefit.”

4. What is the “distinctly American” phenomenon of specialty drugs?

Kesselheim also has written on what he terms “Specialty Drugs — A Distinctly American Phenomenon.” That’s the title of a 2020 paper in the New England Journal of Medicine Kesselheim authored with Huseyin Naci, an associate professor of health policy at the London School of Economics.

In this Perspective article, Kesselheim and Naci look at how the “specialty” designation morphed from its origin in the 1970s. It then referred to a need for extra steps for preparation and delivery of new injectable and infusion products.

“Today, various stakeholders in the pharmaceutical supply chain assign the specialty label to drugs on the basis of a combination of several unrelated factors, such as whether a drug treats a rare condition, requires special handling, or needs postmarketing risk-management plans,” write Naci and Kesselheim.

“But the single most common feature of specialty drugs is high cost,” they write.

The biggest single purchaser of prescription drugs in the United States, Medicare’s Part D pharmacy program, for example, has classified as specialty drugs those with monthly costs exceeding $670. Medicare has allowed the insurers who manage Part D plans to charge higher copays for these medicines, with a maximum out-of-pocket contribution of as much as 33%.

A person in a Part D plan taking a multiple sclerosis drug, for example, might have had out-of-pocket spending of $6,894 in 2019, Naci and Kesselheim write. Private insurers also have used this tactic to shift costs for expensive medicines to consumers, they write.

“Labeling all expensive drugs as specialty drugs and placing them on the highest cost-sharing tiers in plan formularies is an approach taken only by the U.S. health care system,” Naci and Kesselheim write. “The specialty-drug label has become a blunt instrument for imposing financial obligations and administrative barriers on patients in response to the very high prices set for new drugs by manufacturers.”

5. How much does it cost to bring a new drug to market anyway?  

The median cost for a medicine developed in recent years was $985 million, according to a study published in JAMA in March 2020, “Estimated Research and Development Investment Needed to Bring a New Medicine to Market, 2009-2018.”

“Rising drug prices have attracted public debate in the United States and abroad on fairness of drug pricing and revenues,” write the study’s authors: Olivier J. Wouters of the London School of Economics; Martin McKee of the London School of Hygiene and Tropical Medicine; and Jeroen Luyten of Leuven Institute for Healthcare Policy, KU Leuven, Belgium. “Central to this debate is the scale of research and development investment by biopharmaceutical companies that is required to bring new medicines to market.”

In an accompanying editorial, “Affording Medicines for Today’s Patients and Sustaining Innovation for Tomorrow,” Merck CEO Frazier observes that Wouters and colleagues had focused on only smaller companies. Their analysis thus excluded most products developed by pharmaceutical giants, which usually report research expenses in aggregate form and not product-by-product. The result is a look at the cost of developing what Frazier terms “niche drugs” that don’t reflect the “broader population of drugs approved by the US Food and Drug Administration.”

“Specifically, the study sample has a higher proportion of orphan drugs and drugs that received accelerated approvals, and those characteristics often reduce clinical development costs, compared with costs associated with large-scale and long-term outcome studies of primary care or neurodegenerative disease treatments or studies of drugs with multiple indications,” Frazier writes.

Wouters and colleagues focused on data accessible for smaller firms, looking for details on medicines approved between 2014 and 2018. They relied on SEC filings in their work, as had an earlier study from Vinay Prasad, who then was at the Oregon Health and Science University, and Sham Mailankody of Memorial Sloan Kettering Cancer Center in New York. Their work, titled “Research and Development Spending to Bring a Single Cancer Drug to Market and Revenues After Approval,” appeared in JAMA Internal Medicine  in November 2017.

In this article, Prasad and Mailankody say they examined the finances of companies that developed 10 cancer drugs. They found the median cost of developing a single cancer drug was $648.0 million, but the median total revenue after approval for such a drug was $1.658.4 million, or close to $1.66 billion.

The estimated development cost from Prasad and Mailankody is far lower than one widely cited in arguments against allowing the federal government to negotiate the prices of drugs, writes veteran journalist Merrill Goozner in a comment accompanying their 2017 JAMA Internal Medicine article.

In his comment, titled A Much-Needed Corrective on Drug Development Costs, Goozner recalls how a $2.6 billion estimate entered the popular debate on drug prices. At a 2014 press conference, Joseph DiMasi of the Tufts Center for the Study of Drug Development announced an estimate of $2.6 billion as the cost of developing new medicines.  This combined what he described as average out-of-pocket cost of $1.4 billion, plus what he classified as time costs, or expected returns that investors forego while a drug is in development, of $1.2 billion.

Other researchers complained about the secrecy surrounding that estimate, as it relied on industry-supplied data that the authors refuse to make public, Goozner writes.

“Over the years, none of the critiques have had much political impact,” Goozner writes. “Most politicians from both political parties accept the Tufts study’s basic premise because it provides them with a rationale for failing to enact countermeasures, which could include giving Medicare the right to negotiate prices, allowing drug importation or establishing reference pricing or value-based pricing schemes.”

Both DiMasi and the team of Prasad and Mailankody factored into their estimates the cost of failure, acknowledging the near certainty of setbacks in drug development. But the notable difference in their estimates may reflect a difference in the approaches taken by the large drugmakers who supplied DiMasi’s team with their data and the smaller biotechs whose finances Prasad and Mailankody examined.

“The Tufts study’s focus on the research and development costs of large drug companies, which still spend a substantial portion of their research and development budgets on developing me-too drugs or marketing-oriented seeding trials, ignores the substantial shift in the source of important medical breakthroughs that has taken place during the past quarter century,” Goozner writes.

“Current pharmaceutical industry pricing policies are unrelated to the cost of research and development,” Goozner concludes. “Policymakers can safely take steps to rein in drug prices without fear of jeopardizing innovation.”

For more on health care policy issues, see our roundups of research on the expanding role of Medicaid and surprise medical bills.

The image at the top of the page was reproduced from Flickr under a Creative Commons license. No changes were made.

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The rapid spread of COVID-19 and its disruption to lives around the world have sparked a frenzy of work on vaccines at a pace never before seen, scientists say.

“We have been developing COVID vaccines in record time for testing in human populations,” said Ruth Karron, a pediatrician who is director of Johns Hopkins University’s Center for Immunization Research, in a video explainer her school posted online.  “However, it takes time to understand whether these will work. They need to be given to people first in small studies and then in larger studies.”

The coronavirus that causes COVID-19 was first identified in China, with an initial Dec. 31 notice of cases of pneumonia of unknown cause detected from the city of Wuhan City, according to the World Health Organization (WHO). On Jan 7, 2020, Chinese government scientists announced the identification of a new form of coronavirus linked to the Wuhan outbreak, as detailed in the University of Wisconsin’s information series “Covid-19: How Did We Get Here? Map Stories of the Spread of Coronavirus in China and the United States.” Subsequent research has suggested COVID-19 may have emerged before the initial reports.

As of Aug. 20, 30 vaccines were being tested in people and another 139 were under development in laboratories, according to the World Health Organization (WHO). Biotech and pharmaceutical companies have partnered with universities and governments to develop vaccines, an important tool for controlling the virus.

As journalists work to keep communities informed about COVID-19 vaccines, they need to consider questions about safety, distribution and adoption.

Below we address three specific questions, focusing on policies and processes in the U.S.:

1) How will the U.S. Food and Drug Administration decide COVID-19 vaccines are safe for distribution in this country?

2) What can state and federal government agencies do to plan for distributing COVID-19 vaccines to the public?

3) What will governments and public health organizations do to encourage widespread use of COVID-19 vaccines when they become available?

Worldwide, more than 789,000 people have died from COVID-19, also called SARS-CoV-2, as of Aug. 21, including more than 172,000 in the U.S., according to WHO estimates. Businesses around the globe have had to shut down or limit operations. The worldwide fallout from the pandemic is likely to result in “rising levels of poverty, lives upended, careers derailed, and increased social unrest,” according to an August report from the Congressional Research Service (CRS), titled ”Global Economic Effects of COVID-19.”  (CRS provides in-depth reports for members of Congress to use in drafting legislation. Their reports are available to the public.)

“All of us are seeking any ray of hope we can find in this time of pandemic, which is why our ears perk up every time we hear about or read news reports that suggest a COVID-19 vaccine is right around the corner,” said Susan Bailey, the president of the American Medical Association, in an Aug. 10 video conversation with Steve Hahn, commissioner of the U.S. Food and Drug Administration.

But the reality remains that developing, testing, manufacturing and distributing vaccines involves complicated and time-consuming processes. Amid a rush to develop COVID-19 vaccines, safety has to remain the priority, Bailey told Hahn.

“We cannot sacrifice the trust and wellbeing of our patients in our eagerness to develop a cure for this virus,” she said. “We can’t seek to end one health crisis by inviting another.”

———-

How will the U.S. Food and Drug Administration determine whether COVID-19 vaccines are safe for distribution?

The FDA is the gatekeeper that decides which medical treatments can be used and marketed in the U.S. The agency requires such products to undergo several rounds of testing and for a larger number of people to be enrolled in these trials as the trials advance through stages, known as Phase 1, Phase 2 and Phase 3. These phases can be combined in urgent situations, such as a pandemic.

Several vaccines have already reached the last stage of testing. Researchers are trying, for example, to recruit 30,000 people for a Phase 3 trial of a vaccine developed by the Cambridge, Mass.-based biotechnology  company Moderna and the National Institutes of Health. (The NIH’s Clinicaltrials.gov site lets the public keep tabs on the progress of these trials as well as other medical studies.)

Earlier this month, Russian President Vladimir Putin announced that his nation had become the first in the world to approve a coronavirus vaccine for widespread use. But this approval was based only on preliminary research, National Institutes of Health Director Francis S. Collins told reporters during an Aug. 13 conference call. Collins said the Russian plan was to conduct a Phase 1 trial with roughly 100 people and then claim victory in developing a COVID-19 vaccine.

“If that was the standard, we would have declared success several months ago,” Collins said.

But clearing Phase 1 is only the start of the pathway toward a medical treatment, Collins said.

“If you really want people to believe in the vaccine as being safe and being effective, it needs to be tested in much larger groups, as we are now doing in the Phase 3 trials, which will be the way we really answer that question,” Collins explained to those gathered for the call, organized by the U.S. Department of Health and Human Services.

In almost all medical research, scientists have to make educated guesses about how well findings for the group of patients they have studied applied to larger populations. That’s also true of FDA’s approvals of new medical treatments.

The number of patients who receive experimental drugs and vaccines in testing usually represents a fraction of the larger group of people likely to get a treatment after FDA approval. The federal agency must consider the likelihood people will suffer serious side effects when a treatment is used more widely.

For example, GlaxoSmithKline, a pharmaceutical company headquartered in England, submitted an application for Shingrix, a shingles vaccine, to the FDA’s Center for Biologics Evaluation and Research (CBER) on Oct. 21, 2016. GlaxoSmithKline sought approval for use of Shingrix for adults in the U.S. age 50 and older. But a U.S.-based pharmaceutical company, Merck & Co., had already sold a similar vaccine, reducing the urgency for the FDA to act.

The FDA required three stages of testing for the Shingrix application. Shingrix’s Phase 3 testing program involved more than 38,000 people, GlaxoSmithKline said. An analysis pooling Phase 3 results indicates Shingrix was effective against shingles in about 90% of cases across all age groups, GSK said.

The FDA brought the Shingrix application before a panel of its advisers, the Vaccines and Related Biological Products Committee (VRPBPC), on Sept. 13, 2017. Committee members voted unanimously in favor of the application. On Oct. 20, 2017, the FDA approved it, a day ahead of the agency’s target date.

The Shingrix application was not hurried. Even though shingles can be serious for people with compromised immune systems, this painful condition subsides within three to five weeks for most healthy people who receive treatment soon after an outbreak, according to the NIH.

In contrast, the FDA completed its evaluation of the safety and effectiveness in less than six months of Merck’s application for its vaccine against the Ebola virus. The average fatality rate after becoming infected with Ebola virus is around 50%, but rates have varied from 25% to 90% in past outbreaks, according to WHO.

The FDA started the clock on the Ebola vaccine review in July 2019 and set an initial target date of March 2020 to complete it. But the FDA completed the review well ahead of schedule — it announced its first-ever approval of an Ebola vaccine on Dec. 19, 2019. The approval was largely based on a study of 3,537 people who had either contracted Ebola or been in contact with those who had.

A Merck COVID-19 vaccine candidate, being developed with the International AIDS and Vaccine Initiative (IAVI), uses the same approach taken with the Ebola vaccine, Julie Gerberding, the company’s chief patient officer and executive vice president at Merck, said at a House hearing in July.  This vaccine uses a modified form of a common animal virus, vesicular stomatitis virus, that is modified to express proteins that stimulate an immune response, IAVI says.

Johnson & Johnson also is working on a COVID-19 vaccine that borrows from an approach used in an Ebola vaccine. Johnson & Johnson’s Ebola vaccine was approved in Europe this year.  Its vaccine is built upon an inactivated version of a common kind of virus, adenovirus.

Experimental technologies

But the Merck and Johnson & Johnson vaccines are not as advanced in  testing as are ones employing experimental technologies that have yet to result in approved drugs for people.

One of the most advanced candidates is Moderna’s mRNA-1273. In developing this vaccine, Moderna scientists intend to use messenger RNA, which carries genetic instructions to try to make human cells produce specific proteins. These are intended to spur the immune system into action. Moderna spells out the speculative nature of its approach in its routine filings with the Securities and Exchange Commission (SEC), as biotech companies usually do. (SEC filings should be a go-to source for journalists reporting on biotechnology. In these forms, companies often provide clear descriptions of their technologies in language intended for a broad audience. The companies also outline possible pitfalls with their experimental medicines.The SEC offers an introduction to its forms here.)

“As a potential new class of medicines, no mRNA medicines have been approved to date by the FDA or other regulatory agency,” Moderna said in an August filing with the SEC.

Other organizations are looking to already proven methods for vaccine development.

For many decades, drug makers have made vaccines such as the measles shot by using weakened, or attenuated, versions of the viruses they target. Sinopharm, a state-owned pharmaceutical company in Beijing, is trying this approach, according to a July article in Nature and the WHO’s tracker of vaccine candidates.

Lawmakers and scientists have raised concerns about the pressure FDA officials will face to speed their decision on approving a COVID-19 application.

There are urgent medical and economic reasons for the agency to act fast to review the data accompanying applications for COVID-19 vaccines. The stated goal of President Donald Trump’s so-called Operation Warp Speed is to deliver 300 million doses of a safe and effective COVID-19 vaccine by January 2021.

Trump is seeking re-election on Nov. 3, prompting questions about whether he will pressure the FDA to clear a vaccine sooner.

At a July hearing, the chairman of the U.S. House Energy and Commerce Committee, Rep. Frank Pallone Jr., said he feared the Trump administration might force the FDA to approve an ineffective vaccine. “We all want a COVID-19 vaccine to be developed as soon as possible, but before a vaccine is distributed, public health experts must ensure that it is safe, effective, and available to all who need it,” said Pallone, a Democrat from New Jersey.

Seeking to address concerns about the FDA bowing to political pressure, the agency in June released what it calls a “guidance document” about COVID-19 vaccines. The FDA also issued a press release explaining the 24-page guidance document.

In this document, the FDA officials outlined their expected requirements for clearing a COVID-19 vaccine. They expect that a COVID-19 vaccine worthy of approval would appear to prevent infections or decrease their severity in at least 50% of people who get the shot. That 50% benchmark is part of the main goal — known as a primary endpoint — of vaccine studies conducted to meet the FDA’s approval.  Those seeking approval must be able to answer the question of whether the shot reduces people’s chances for developing a COVID-19 infection.

Hahn, the FDA commissioner, addresses these concerns in an Aug. 7 viewpoint article in JAMA, “Unwavering Regulatory Safeguards for COVID-19 Vaccines.” Hahn and his co-authors explain why the agency took the unusual step of setting a target rate for effectiveness for COVID-19 vaccine applicants.

The speed at which experimental COVID-19 vaccines are being developed and tested “has provoked public anxiety about the safety and effectiveness of vaccines developed on expedited timelines,” Hahn and his co-authors write.

They cite a May poll of 1,056 U.S. adults, in which 31% indicated they were uncertain whether they would receive a potential COVID-19 vaccine and 20% indicated they would not take it.

“Given the widespread potential use of a COVID-19 vaccine, transparent discussion at FDA’s Vaccines and Related Biological Products Advisory Committee will be needed prior to vaccine authorization or licensure to ensure clear public understanding of the evidence supporting vaccine safety and efficacy,” Hahn and his co-authors write.

Calculating confidence intervals

Scientists usually must do educated guesswork to estimate the likelihood that their study findings reflect what patients will experience in the real world. A calculation known as the confidence interval estimate provides a range of numbers within which the true value likely exists. Confidence intervals, abbreviated as CI, can be set to 90% and 99%, but the 95% mark is most common in medicine.

A National Institutes of Health backgrounder explains the 95% confidence interval with the following hypothetical example: “If a study is 95% reliable, with a confidence interval of 47-53, that means if researchers did the same study over and over and over again with samples of the whole population, they would get results between 47 and 53 exactly 95% of the time.”

Hahn and his co-authors note in JAMA that the FDA will ask vaccine developers to provide evidence their vaccines have an effectiveness rate of at least 30%. The FDA also likely will require drug makers to report on how people fare after taking their vaccines following their initial approval. The agency often mandates post-marketing studies to keep tabs on the risks for complications, including serious health threats, from approved products.

The FDA tells companies what kinds of studies they need to fund for their  approved products, seeking to learn more about their safety and effectiveness, the NIH’s Collins explained during a U.S. Senate hearing on July 2. Regulators may want to know information such as how long a COVID-19 vaccine will provide protection.

“You don’t stop looking once FDA has given an approval,” Collins said. “You carry out long-term studies to make sure that there’s not some unexpected results or that the drug stops working.”

It’s important to note that side effects sometimes are not detected until a medical treatment has been on the market for a while.

Former FDA Commissioner Robert M. Califf stressed this point in a Twitter exchange this past summer with Richard Horton, editor of The Lancet, a major medical journal. Horton tweeted about the positive early testing results his journal had published for a vaccine being developed by Oxford University and the England-based pharmaceutical company AstraZeneca Plc.

“The vaccine is safe, well-tolerated” and appears to spark a reaction in the immune system, Horton tweeted on July 20.

Califf responded, tweeting: “I know @richardhorton1 knows this, but for lay people viewing this, ‘safe’ in this context just means nothing bad happened that should pause larger trials. Safety of vaccines can only be determined by very large, controlled trials followed by serious post-market surveillance.”

I know @richardhorton1 knows this, but for lay people viewing this, “safe” in this context just means nothing bad happened that should pause larger trials. Safety of vaccines can only be determined by very large, controlled trials followed by serious post-market surveillance. https://t.co/T6ZD8TgkzK

— Robert M Califf (@califf001) July 20, 2020

Longtime health care journalist Gary Schwitzer highlights this exchange in his blog on HealthNewsReview.org, where he also offers tips and resources for journalists on avoiding hype in covering medical studies.

“Califf’s tweet was an important reminder that the words matter,” writes Schwitzer, who is also an adjunct associate professor of public health at the University of Minnesota. “Proclaiming a vaccine as safe after early trials demands a definition of safe.”

In a July commentary in JAMA, “Communicating Science in the Time of a Pandemic,” Schwitzer and Richard Saitz, a professor at the Boston University Schools of Medicine and Public Health, say the COVID-19 pandemic has triggered “perhaps the most challenging time for science communication in decades.”

“Races are underway in parallel: to find answers to perplexing coronavirus questions, to announce research findings to clinical and scientific colleagues, and to report those findings to a confused and concerned global audience,” write Schwitzer and Saitz.

“There are no winners in these races if harm — even though unintentional — is wrought by the dissemination of hurried, incomplete, biased misinformation,” they write.

2)  What can state and federal government agencies do to plan for distributing COVID-19 vaccines?

In discussing vaccines, Trump has given far more optimistic estimates for COVID-19 vaccines than many scientists do.

“We’re balancing speed and safety, and we’re on pace to have a vaccine available this year, maybe far in advance of the end of the year,” Trump said during an Aug. 3 press conference.

Paul A. Offit, director of the Vaccine Education Center and professor of pediatrics at the Children’s Hospital of Philadelphia, tells Journalist’s Resource this prediction does not appear realistic. Offit is one of the inventors of the RotaTeq pediatric vaccine, which protects against a severe infection of the gastrointestinal system.

“It’s possible we could have a vaccine early next year, assuming everything worked well,” Offit says of the work of a treatment to prevent COVID-19.

Offit and his colleagues review the mechanisms and progress of the most advanced experimental vaccines in a July viewpoint article in JAMA, “Developing a SARS-Cov-2 Vaccine at Warp Speed.”

“The rapid identification of immunogenic targets of a novel coronavirus, the leveraging of experimental vaccine platforms, and the tragic nature of an ongoing pandemic have created a fertile breeding ground for innovation,” they write. “Although the ultimate success of a vaccine candidate, or candidates, remains unknown, the changes in the field of vaccinology that these exigent circumstances have brought are likely here to stay.”

There are several online platforms for monitoring the progress of experimental COVID-19 vaccines, including ones maintained by the WHO, The Regulatory Affairs Professionals Society, The New York Times and The Guardian.

Already, many advocacy groups and academic researchers are wrestling with thorny questions about distributing vaccines, including the inevitable decisions about which groups of people should get COVID-19 vaccines first.

The National Governors Association on Aug. 3 issued a memorandum about preparing for an eventual mass distribution of these vaccines. Immunizing the U.S. population against COVID-19 “will likely require the single largest vaccination campaign ever undertaken” in the nation, the NGA said in the memo. “Although a vaccine is not yet available, lessons learned from the acquisition and distribution of COVID-19 diagnostics and therapeutics suggest that governors may want to begin addressing the challenges of mass distribution before its arrival,” the association wrote.

State leaders will rely on guidance from the national Centers for Disease Control and Prevention in making “difficult decisions” about prioritizing who should get the COVID-19 vaccine first, the NGA said in its memo.

The NIH and CDC asked the National Academy of Medicine for advice. In response, NAM formed a committee that is working on recommendations. These are intended to help the CDC’s Advisory Committee on Immunization Practices (ACIP), an influential panel that helps shape U.S. vaccine policy.

The goal of these extended discussions is to have “transparency, so that the American public has confidence in the recommendations,” CDC Director Robert Redfield said during a July 24 meeting of the NAM’s Committee on Equitable Allocation of Vaccine for the Novel Coronavirus.

3) What will governments and medical groups do to encourage widespread use of COVID-19 vaccines when they become available?

At the July 24 NAM meeting, Redfield spoke of a need to begin building public confidence in COVID-19 vaccines.

“I’m sure there will be many people who have different points of views,” with some unwilling to take them, as has happened with other vaccines, Redfield said. “We’re knee-deep in resistance.”

Researchers have begun to propose ideas for increasing uptake of future U.S.-approved COVID-19 vaccines. A July report from researchers at Johns Hopkins University and Texas State University offers many recommendations, including that each state establish a public oversight committee to review systems that influence understanding of COVID-19 vaccines. The report is the product of an initiative called the Working Group on Readying Populations for COVID-19 Vaccine, comprising more than 20 scientists and communications experts.

Michelle M. Mello, a professor of law and medicine at Stanford University, and her co-authors suggest in a June perspective article in the New England Journal of Medicine that state officials begin now to consider what options they might have in terms of possible mandates for vaccines for COVID-19.

“As with social distancing orders, we can expect that the advent of SARS-CoV-2 vaccines will spark intense clashes of feeling about what people owe to one another in the fight against the pandemic,” Mello and co-authors write in the article, “Ensuring Uptake of Vaccines against SARS-CoV-2.”

“Careful deliberation now about state vaccination policy can help ensure that we have a strategy when the breakthrough comes,” they write.

A resurgence of measles in recent years in the U.S. has been linked to parents opting not to have their children vaccinated. Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, and his co-authors looked at some of the reasons children were not getting their measles shots in a perspective article published last year in the New England Journal of Medicine, “Measles in 2019 — Going Backward.”

“Although there are valid reasons why some people might not be vaccinated, such as a medical contraindication due to marked immunosuppression, the failure to vaccinate too often stems from misconceptions about vaccine safety, especially those resulting from a now-debunked claim that posited a connection between the vaccine and autism,” write coauthors Catharine I. Paules, Hilary D. Marston and Fauci.

All 50 states and the District of Columbia already have laws  requiring certain vaccines for students.  These laws often apply for private schools as well as public ones, according to the Centers for Disease Control and Prevention. The National Conference of State Legislatures tracks bills designed to change these mandates, which in recent years have included bids to reduce the possible exemptions. The CDC also keeps tabs on state vaccination policies.

Public officials were concerned about vaccine hesitancy long before COVID-19 emerged.

In a 2019 report, Sara M. Tharakan, a global health analyst at the Congressional Research Service, suggests U.S. lawmakers look into the effectiveness of global vaccination campaigns as “a tool of domestic pandemic preparedness” amid these outbreaks. Congress could look at ways in which the federal government could help raise vaccination rates, possibly through campaigns to battle misinformation, Tharakan writes.

The WHO last year included vaccine hesitancy on its list of top-10 global health threats, along with Ebola, the prospect of a global influenza pandemic and climate change.

In a March 2019 editorial in The Washington Post, a group of public health experts, including Barry R. Bloom of Harvard, Lawrence O. Gostin of Georgetown and Jonathan Fielding of the University of California, Los Angeles, noted how social media “is infected with viral messaging from bots and trolls that masquerade as legitimate information outlets but instead stoke illegitimate fear of vaccines.”

“The medical and public-health community has overwhelming scientific evidence that demonstrates the safety and effectiveness of vaccines,” they write. “Yet parents today can easily go to Google to find discredited anti-vaxxer pediatricians or find solace among anti-vaxxer ‘friends’ in Facebook groups full of misinformation.”

At an Aug. 6 press conference about the COVID-19 pandemic, Bloom, who is currently a research professor at the Harvard T.H. Chan School of Public Health, raised concern about the public’s unwillingness to receive a future vaccine to fight this coronavirus.

“My biggest concern right now is not that the vaccines won’t have sufficient efficacy to make it worthwhile distributing them, some of them, at least,” Bloom said. “It’s that people won’t take them.”

For more information, see our 5 tips to help journalists report on the coronavirus vaccine.

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Longtime health care journalist Gary Schwitzer uses the language of disaster warnings when discussing the challenges of covering COVID-19. In a recent interview with ABC network affiliate KSTP, Schwitzer said the speedy publication of preliminary research  findings related to the coronavirus may create conditions for a “perfect storm of pandemic misinformation.” In an interview with Journalist’s Resource, he stressed the need for reporters to help audiences make sense of the “tsunami” of COVID-19 information.

Schwitzer, publisher of HealthNewsReview.org, urges journalists to make sure audiences understand the limits of what scientists know to date about COVID-19, especially as the world awaits an effective vaccine. One piece of advice: “Please do not project certainty where certainty simply doesn’t exist,” he says.

To help reporters make sense of what’s known and yet to be learned about COVID-19 vaccines, Journalist’s Resource asked for insights from several people with expertise studying or reporting on vaccines: Howard Bauchner, editor in chief of the academic journal JAMA; Helen Branswell, senior infectious diseases and global health reporter for the online news outlet STAT; Paul Offit, the director of the Vaccine Education Center and an attending physician in the Division of Infectious Diseases at the Children’s Hospital of Philadelphia; Zachary Brennan, a reporter with POLITICO Pro with years of experience covering the U.S. Food and Drug Administration; and Schwitzer, who is also an adjunct associate professor at the University of Minnesota School of Public Health.

Here are some of the tips they offered.

#1. Reporters must understand what the various levels of clinical trials can — and can’t — tell us. Be wary of announcements about scientific data made through press releases rather than academic journal articles.

The U.S. Food and Drug Administration is the gatekeeper that decides which medical treatments can be used and marketed in the United States. Research trials of vaccines and other medicines are conducted in multiple phases. It’s worth noting that research to support FDA applications can take place in other countries. The initial stage of testing a vaccine — Phase 1 — usually involves recruiting 20 to 100 healthy volunteers to take a treatment, according to a primer on clinical research from the FDA.

This initial Phase 1 trial does not reveal much about the effectiveness of vaccines, Branswell says.

“They cannot tell you if a vaccine works,” she says. “They are designed to figure out what dose should be used and to see if the vaccine is safe enough to continue testing.” She adds, “Phase 2s are larger and can start to give you hints about whether the vaccine works or not. Phase 3 is where it becomes clear if a vaccine works or doesn’t.”

A few of the companies racing to make COVID-19 vaccines have released information about vaccine trials by press release, rather than by scientific publication, Branswell notes.

“Their stock values soar; the market is crazy about COVID-19 vaccine news,” she says. “But in some cases, there is very little actual information in these releases.”

The Cambridge, Mass., biotech firm Moderna, for example, issued a May 18 press release saying eight people vaccinated in their Phase 1 trial of its COVID-19 vaccine all generated antibodies — part of the human immune system’s response to fighting COVID-19.

“That’s definitely better than the alternative, but the company didn’t release enough information to really tell anybody anything,” Branswell says. “But its stock valuation exploded.”

At the end of trading on May 18, Moderna shares commanded about $80 each, an increase of 20% from the previous closing price.

“The next day, I wrote a piece saying there wasn’t much there there in their release,” Branswell says. “I didn’t say the vaccine didn’t work, only that we couldn’t tell anything from what they released.”

Moderna shares fell May 19, closing at $71.67, a 10% drop from the previous day.

Schwitzer notes there has been a lot of highly optimistic promotion of early-stage research, even small studies involving animals. A May press release from the National Institutes of Health, for example, has the headline, “Investigational ChAdOx1 nCoV-19 vaccine protects monkeys against COVID-19 pneumonia.” The research the NIH highlighted rested largely on results seen in six rhesus macaques. The paper was posted to what is called a preprint server, to which the public generally has access.

“The findings are not yet peer-reviewed but are being shared to assist the public health response to COVID-19,” the NIH noted in its release.

In an effort to respond to the pandemic, there has been greater use of preprint servers to allow more sharing of information among scientists. Preprint servers allow researchers to post their findings without the layers of scrutiny, including peer review, required for publication in major journals, as Journalist’s Resource explained in this April tip sheet.

In a July article in JAMA about the challenges of reporting on COVID-19, Schwitzer and Richard Saitz, an associate editor at JAMA,  said news coverage that focuses on a single study should stress that one piece of research alone rarely proves definitive. Journalists, they said, should consult other experts in the field and include their views in news stories about research.

#2. Let your audience know now they could experience at least some mild side effects from COVID-19 vaccines.

“If these vaccines are going to make recipients feel crappy — at least for a short time after vaccination — people should be prepared for that,” STAT‘s Branswell says. “Getting that information out in advance can effectively inoculate against the inevitable social media discussion that will come later, when people complain about how lousy they felt after getting vaccinated against COVID-19.”

Medical professionals and scientists are working now to address public concerns about how safe the COVID-19 vaccines will be when ready for public use. In a May poll of more than 1,000 U.S. adults conducted for the Associated Press and NORC, a research institution at the University of Chicago, 31% indicated they were uncertain whether they would receive a COVID-19 vaccine and 20% indicated they would not take it.

“Polling suggests that people are understandably a bit nervous about vaccines that are being developed at never-before-attempted speeds,” Branswell says.

The reports available on early-stage trials of COVID-19 vaccines show many people enrolled in trials have experienced mild side effects that lasted for a few days. In July, for example, the journal The Lancet published early-stage results of one of the more advanced vaccine candidates, referred to as AZD1222, developed by Oxford University and the biopharmaceutical company AstraZeneca Plc in the United Kingdom. People who participated in the study were most likely to report side effects such as malaise and muscle aches and nausea in the days after the injection, with reports of these complications then ebbing, Pedro M. Folegatti of Oxford’s Jenner Institute, and his co-authors reported in The Lancet.

The patients who participated in this study reported having one or more symptoms including temporary injection site pain and tenderness, mild-to-moderate headache, fatigue, chills, feverishness, malaise and muscle ache. At least two drug manufacturers have abandoned testing of their highest initial dose of their COVID-19 vaccine because they resulted in more severe “Grade 3” side effects, Branswell said.

Grade 3 side effects are considered serious, but not life threatening, and could require medical care, according to the FDA.

#3. Explain to audiences the demographics of the pools of patients used to test vaccines.

Journalists should pay attention to the composition of the patient population when reporting on results of a clinical trial, JAMA’s Bauchner says.

“The question is who was in the study,” he says. “Was it people from 20 to 40 who were healthy?” The results of such a trial might not apply to people aged 60 to 80, for example, or to unhealthy adults.

In medical journals, this demographic information usually appears in Table 1 of reported studies, Bauchner notes.

#4. Help your audience understand the limits of what’s known about vaccines.

In an effort to share knowledge about the pandemic more quickly, major medical journals are publishing reports from preliminary stages of research, even Phase 1 testing, Bauchner says.

“Because it’s the midst of a pandemic, we’re publishing studies that perhaps we may not have published at another time,” Bauchner says.

Bauchner writes on this issue in a June editorial for JAMA, “Editorial Evaluation and Peer Review During a Pandemic: How Journals Maintain Standards.”

Audiences should also understand that it may take time for researchers to fully understand the side effects of the vaccine, Bauchner said. Clinical trials provide an initial gathering of safety data on treatments.

Also, Bauchner warns, reporting only the topline results of medical studies doesn’t give readers a full picture of what scientists learned from their work. In medicine, researchers most often seek to calculate what’s called a 95% confidence interval.

A National Institutes of Health backgrounder explains the 95% confidence interval with the following hypothetical example: “If a study is 95% reliable, with a confidence interval of 47-53, that means if researchers did the same study over and over and over again with samples of the whole population, they would get results between 47 and 53 exactly 95% of the time.” Confidence intervals, abbreviated as CI, can be set to 90% and 99%, but the 95% mark is most common in medicine.

Bauchner offers a hypothetical example of a study aimed at assessing whether a specific vaccine can prevent COVID-19 infections.

In this hypothetical trial, researchers find that the vaccine has a 40% success rate for preventing infection. But that number is simply researchers’ best estimate, based on a range of possible success rates reflected in the confidence interval.

In this hypothetical trial described by Bauchner, the confidence interval is fairly broad, with the actual rate of effectiveness likely ranging from a low of 20% to a high of 60%.

“That’s a hard concept for people to understand, but it’s really going to be important,” Bauchner says, referring to the 95% confidence interval. “We don’t ever have a definitive answer about how effective a vaccine is. We have a range and we try to express how likely that range is to be true.”

#5. Build a network of sources, especially the kind who can walk you through study data.

POLITICO PRO’s Brennan recommends journalists covering COVID-19 vaccines get as many viewpoints as possible and be prepared to parse the data that companies present. STAT’s Branswell concurs.

“Talk to vaccine experts. Find someone who can talk you through the appendices or the supplementary material — the tables and figures,” Branswell says. “Reporters read words but the critical information in vaccine trial results is in the data. Sometimes, the data show things that the words don’t describe, or at least downplay.”

Journalists should also keep in mind the challenges of the new approaches used in developing many of the experimental COVID-19 vaccines. The FDA has not licensed the vaccines that use some of these new technologies in testing, such as an mRNA vaccine. Moderna describes its mRNA vaccine as a vehicle to introduce genetic codes for the proteins that pathogens use to cause a disease. Why does this matter? Says Branswell: “The more experience the FDA has with a vaccine approach, the easier it is for their scientists to assess a new vaccine. That’s not the case with most of the COVID vaccines in development, at least the ones that are furthest along.”

Additional resources:

The Association of Health Care Journalists routinely holds webinars and posts articles to aid journalists in covering the pandemic. This month, the AHCJ posted a piece written by its medical studies core topic leader, Tara Haelle, titled “Press release reporting is irresponsible — especially in a pandemic.”

Johns Hopkins University has a free online course of short videos that covers the basics of COVID-19, including vaccine development.

Earlier this year, the Knight Center for Journalism in the Americas at the University of Texas at Austin, offered an online course, “Covering COVID-19 now and in the future.” Materials for this class, created in partnership with UNESCO and the World Health Organization, are available on the Knight Center website. The class was offered in Spanish, French and Portuguese as well as English.

HealthNewsReviews.org stopped actively publishing in 2018, but Schwitzer and other contributors still post new articles periodically. The site offers many resources for reporting on medicine, including tip sheets such as one titled “Tips for analyzing studies, medical evidence and health care claims.”

The Children’s Hospital of Philadelphia provides a quick overview of major issues around COVID-19 vaccines on its Questions and Answers about COVID-19 Vaccines webpage.

The U.S. Department of Health and Human Services offers information about the “Operation Warp Speed” initiative for COVID-19 vaccines, including a timeline of its agreements with companies.

Journalist’s Resource created a tip sheet on how to assess the newsworthiness of medical research. Journalist’s Resource also created a comprehensive research-based piece that addresses questions on safety, approval, distribution and adoption of COVID-19 vaccines.

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Medicaid is a United States health insurance program run and funded by states with federal oversight and financial contributions. The total annual federal contributions vary by state, reflecting the differing levels of poverty and states’ decisions about whether to participate in the Medicaid expansion created by the Affordable Care Act of 2010.

It’s the largest U.S. insurer in terms of lives covered, with 65.6 million people in the United States enrolled as of April 2020.

In contrast, the giant of for-profit insurers, UnitedHealth, reported having 48.4 million customers for its medical plans as of June 30. This tally includes 6 million in UnitedHealth plans that manage Medicaid benefits.

The federal Medicare plan for people age 65 and older is estimated to have enrollment this year of about 62 million, with some overlap with Medicaid.

The federal government has several options for waivers states can use to adapt Medicaid policies to respond to public health crises. And every U.S. state has altered its Medicaid health program to respond to COVID-19 pandemic, according to the data gathered by the nonprofit nonpartisan Kaiser Family Foundation.

Steps taken this year include temporary easing of eligibility requirements, expansion of access to telehealth services and changing rules on drug benefits to reduce how many trips people must make to pharmacies.

Medicaid has long been a go-to option for responding to U.S. public health crises, including current attempts to address concerningly high maternal mortality rates.

“When states are dealing with emergencies that are either local or regional, they turn to Medicaid,” says Benjamin D. Sommers, a professor at the Harvard T.H. Chan School of Public Health, who refers to Medicaid as the “workhorse” of the U.S. public health system.

For reporters who are covering health care at the local or national level, it’s important to have a handle on how Medicaid works. Here are six things you should know.

#1. The Affordable Care Act was enacted with an intent for all states to expand their Medicaid programs, but a 2012 Supreme Court ruling made Medicaid expansion an optional decision for states.

The ACA set the stage for expanding Medicaid to cover more working people with incomes too low to afford health insurance. (In practice, this statutory limit rises to 138% due to other adjustments made in calculations.) As of 2020, the federal government picks up 90% of the tab for what’s known in policy circles as the expansion population, according to the Medicaid and CHIP Payment and Access Commission (MACPAC). Earlier support had been more generous, with the federal government picking up 100% of the tab for this group.

The ACA was enacted with an intent for all states to expand their Medicaid programs, but a 2012 Supreme Court ruling made this an optional decision for states.

Many Republican governors have resisted calls from consumer groups such as Families USA to expand their Medicaid plans, with President Donald Trump persisting in his attempt to undo the ACA entirely.  But there’s been a steady growth in the number of states that have expanded their Medicaid plans, even under GOP leadership, with the support of physician groups such as the Oklahoma State Medical Association.

Oklahoma last month became the 37th state to take formal action toward an expansion of its eligibility rules for Medicaid, according to a tally kept by the Kaiser Family Foundation.

Voters on June 30 narrowly approved, 50.5%-49.5%,  a ballot question that kicked off the process of an expansion of Medicaid in Oklahoma.

That’s a notable result, given that Republicans account for almost half — 1.01 million– of Oklahoma’s 2.1 million registered voters. The state’s 738,256 Democrats accounted for 35% of its registered voters, with independents, 332,111, making up 16%, according to a January state tally.

In a January 2020 letter to directors of state Medicaid programs, the Trump administration outlined what it called its “Healthy Adult Opportunity” plan. This is intended to be a path for states to accept budget caps in exchange for federal permission to expand their Medicaid enrollment limit and to gain greater local control of Medicaid policies.

#2. If you’re covering Medicaid, you should be familiar with block grants.

Look for partisan debate over approaches to Medicaid funding to continue, no matter what the outcome of the 2020 presidential election.

Many Republicans in Congress back the idea of caps on Medicaid spending, at least the portion of its funding intended to cover adults without disabilities.

Congress to date has not acted on proposals to limit the federal commitment to state Medicaid programs through options such as block grants, which would give states a limited, pre-budgeted amount of money, write Rachel Sachs, an associate professor of law at Washington University, and Nicole Huberfeld, now a professor of health, law, ethics and human rights at Boston University School of Public Health, in a 2019 blog post in Health Affairs.

(Conservatives sometimes cite a proposal made by then President Bill Clinton, a Democrat, as evidence of his support for a form of Medicaid block grants. The Washington Post examined this issue and found Clinton proposed a per capita Medicaid cap to counter a GOP drive to convert the program’s open flow of federal funds into block grants.)

Switching to capped funding would be a “drastic policy change” for a program that has long been structured to target more aid to states where people tend to have low incomes, Sachs and Huberfeld write. Medicaid’s base level of funding is set through what’s called federal medical assistance percentage (FMAP).

“A poorer state such as Mississippi has a higher federal match rate (76 percent in 2019) than wealthier states (for example, New York at 50 percent),” Sachs and Huberfeld write. “In either case, for every dollar a state spends on Medicaid, it receives a matching amount of federal funds—without limit—making Medicaid a statutory entitlement for states participating in the program.”

Many Republicans remain intent on converting Medicaid funding into federal block grants.

In a February 2020 debate on the House floor, Rep. Bob Latta, an Ohio Republican, sang the praises of this approach.

“Block grants give states the flexibility to invest in their citizens’ best interests,” Latta said. ”It is plain and simple. Children, seniors, and individuals with disabilities will not be negatively affected by this option, and those in low-income communities will be greatly benefited.”

Among those objecting to the Trump administration’s plan was Rep. Michael F. Doyle, a Pennsylvania Democrat. Doyle described a shift toward Medicaid block grants as a threat to the flexible nature of the program.

“When the economy is bad, more people might need Medicaid, and when the economy is good, Medicaid payments shrink. This is common sense and good public policy,” Doyle said. “Yet the Trump administration wants to undo that. Instead, the amount of money that a state would receive would be flat, and states would have to adjust their coverages accordingly” during downturns.

#3: While Medicaid and Medicare are different, there is some overlap.

There were 61.2 million people in the United States enrolled in Medicare last year, of whom 52.6 million were aged 65 and older. Another 8.7 million were covered by Medicare due to disabilities.

There’s overlap between Medicare and Medicaid. There were about 12 million people eligible to be covered by both programs in 2018, according to the Centers for Medicare and Medicaid Services (CMS). This group is often referred to in health policy discussions as “dual eligibles.”

People who qualify for Medicare and Medicaid tend to be people with serious health problems and those who are frail and need significant help with daily living tasks.

About 4 in 10 people — or 41% — who qualify for both Medicaid and Medicare have at least one mental health condition. Almost half of this group — 49% — need long-term care services, according to CMS. Medicare payments are largely limited to covering the cost of medical services and products. Medicaid pays these kinds of bills, but also covers some costs for nursing homes.

The adults in the so-called dual eligible group drive much of the cost of Medicaid, but the program is also the dominant insurer for America’s children.

As of April, the most recent month for which the data is available, there were about almost 29 million children enrolled in Medicaid in 49 states, according to CMS.  Another 6.7 million children were enrolled in the State Children’s Health Insurance programs (CHIP), which provide coverage for some children whose parents’ income exceeds Medicaid guidelines.

CHIP functions as a sister program to Medicaid. Enrollment estimates for people under 18 in Medicaid often fold in the CHIP numbers. If that’s the case, it’s good to note where the CHIP and Medicaid youth population figures have been combined.

But whether taken separately or combined with CHIP enrollment, Medicaid plays a large role in pediatric and adolescent medicine in the United States.

#4: It’s worth noting how your state’s Medicaid program has responded to the COVID-19 pandemic.

The Trump administration has taken several steps to give states more flexibility to alter Medicaid rules during the COVID-19 pandemic. CMS in March, for example, announced a series of Medicaid waivers giving states more flexibility on matters such as steps to allow reimbursement for medical care delivered in alternative settings due to evacuations of certain facilities.

The Kaiser Family Foundation has a detailed list of Medicaid-related actions taken by states in response to the pandemic.

#5. It’s also worth looking at how enrollment in Medicaid might expand in your region during the current economic downturn.

The combination of the economic downturn and the lingering effects on business of the COVID-19 pandemic could trigger an increase in enrollment in Medicaid. The Kaiser Family Foundation in May published estimates showing how many people in each state might become eligible for Medicaid due to job loss. To develop these estimates, Kaiser researchers drew upon pools of data from the Census Bureau, including the  American Community Survey, and Labor Department statistics. There’s more information here on the foundation’s methods.

And there are continuing efforts to expand Medicaid enrollment beyond the short-term spike expected following the economic challenges of 2020.

The Kaiser Family Foundation maintains a map showing which states have expanded Medicaid, showing only 13 of them have not yet proceeded with plans to expand Medicaid.

And efforts continue in many of those holdout states. Missouri has a ballot question on Medicaid expansion slated for its voters on Aug. 4. The Missouri Chamber of Commerce and Industry has issued a statement supporting the expansion.

Many Republicans, including Trump, continue to call for the repeal of the ACA, a move that would end the Medicaid expansion. But the Medicaid expansion has continued in recent years with GOP-dominated states such as Utah using the ACA-created mechanisms to provide more working adults with access to medical care.

In discussing the Medicaid expansion, health policy experts note the lags in full adoption of the original program. Medicaid was created in 1965. But it was only in 1982 that Arizona became the last state to adopt this program.

#6. States file many public reports with CMS about their Medicaid programs

States’ reports to CMS about their Medicaid programs may prove a good source for story ideas.  Many documents of interest are posted on CMS’ State Waiver Lists website.

Georgetown University’s Center for Families and Children, for example, posted a brief titled “Indiana’s Own Medicaid Waiver Evaluation Shows Evidence of Coverage Losses.”

Indiana used ACA money to expand its Medicaid eligibility under then Gov. Mike Pence, but also won permission from the Obama administration to impose certain requirements on the adults added to the program under this initiative. These included monthly premium payments for some enrollees.

In a 2016 article in Health Affairs, Pence’s advisers Seema Verma and Brian Neale described the required financial contribution as being a “way for members to demonstrate personal responsibility.” (Verma now serves as administrator of the Centers for Medicare and Medicaid Services.)

These requirements were also meant to “encourage members to stay engaged with their health plan, providers, and overall personal health,” Verma and Neale write.

But these requirements appeared to be a stumbling block for many people who were allowed to enroll in Indiana’s Medicaid coverage through the ACA expansion, according to the brief from Georgetown’s Center for Families and Children. This brief was written by Allexa Gardner, a research associate, and Joan Alker, executive director of Georgetown’s Center for Children and Families and a research professor at the Georgetown University McCourt School of Public Policy.

Gardner and Alker dove into Indiana’s renewal request for its Medicaid expansion. They found almost 6,000 people in 2018 had been disenrolled from Medicaid coverage for failure to pay initial premiums into Indiana’s HIP Plus plan.

“An additional 5,500 individuals with HIP Plus benefits were disenrolled and locked out of coverage for six months (they are barred from Medicaid coverage for this length of time),” Gardner and Alker report. “This means that a total of more than 11,000 beneficiaries lost coverage due to nonpayment of premiums.”

The University of Michigan maintains a web page, Healthy Michigan Plan Evaluation, for research done to monitor how well the Medicaid expansion has proceeded in that state.

The Centers for Medicare and Medicaid Services (CMS) long has allowed states permission though waivers to test policies intended to try different approaches to funding health care.

One of the most widely watched efforts at this time is North Carolina’s attempt to use Medicaid to address factors that can affect health beyond medical care.

The North Carolina Department of Health and Human Services last year released a standardized fee schedule for health-related social services — including, for example, housing support and healthy food boxes — reimbursed by Medicaid under the state’s Healthy Opportunities Pilots, as outlined a brief about this initiative posted on the website of the nonprofit Commonwealth Fund.

Written by Mandy K. Cohen, who is the secretary of the North Carolina Department of Health and Human Services, the brief includes links to CMS and state documents detailing the program.

Besides the Commonwealth Fund and Kaiser Family Foundation, another nonprofit group that closely watches Medicaid is the Center on Budget and Policy Priorities.  In addition, Congress advisers on the program, the Medicaid and CHIP Payment and Access Commission, also offered in-depth examinations of issues facing the program.

And CMS publishes an annual report on the finances and operations of Medicaid. Here’s the most recent copy of CMS’ annual update, 2018 Actuarial Report On The Financial Outlook For Medicaid.

For more help reporting on Medicaid, see our roundup of research on Medicaid’s expanding role in US health care. 

For further help reporting on health care policy issues, see our 7 tips for reporting on surprise medical billing. 

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Many people in the United States face unexpected medical expenses despite having private insurance coverage, due to a phenomenon known as “surprise billing.”

Surprise bills occur when people with private insurance get services that fall outside of their plans’ networks. Some of this out-of-network care is very difficult to avoid because it often results from emergency medical services.

People who require emergency transport by an air ambulance, for example, are likely to find their insurers will balk at paying these costs, according to a 2019 report from Congress’ investigative arm, the Government Accountability Office. GAO staff examined data for air ambulance transports of privately-insured patients in 2017. They found 69% of about 20,700 transports in their data set were out-of-network. An air ambulance company, for example, charged $41,400 for transport of a North Dakota consumer, whose insurance plan paid $6,700 of the cost, GAO said. This left the consumer with a potential bill of $34,700, although it’s possible that the air ambulance company later agreed to reduce these costs, GAO said in its report.

Consumers may struggle with the consequences of surprise medical bills, and many of them have stories worth sharing.  In many cases, hospitals and other providers of medical care have suddenly lowered costs for consumers after getting calls from journalists.

Kaiser Health News in March 2020 reported, for example, on how Michelle Kuppersmith of New York had made sure the hospital where she had a biopsy of her bone marrow was in her insurance network. But as journalist Liz Szabo reported, Kuppersmith was unaware that a lab company involved in testing this sample was not in the network. She initially faced a $2,400 bill from the lab company. After being contacted by Kaiser Health News, the insurer agreed to pay the lab company the in-network rate, covering $1,200 of the $2,400 charge, and the lab company said it wouldn’t bill Kuppersmith for the other half of the charge, Szabo reported.

Sarah Kliff, now at the New York Times and earlier at Vox, has been a leader in efforts to document consumers’ experiences with surprise medical bills. In her December 2018 story in Vox, titled “I read 1,182 emergency room bills this year. Here’s what I learned,” Kliff recapped her work in looking into high medical costs, including an out-of-network bill of $7,924 presented to Scott Kohan. In May 2018, Kliff reported on how Kohan’s visit to an emergency room in his insurer’s network triggered a surprise medical bill. It turned out that a surgeon who treated him was not in network. In her December story, Kliff reported  Kohan’s bill was reversed after Vox reported on it.

But asking journalists to challenge surprise medical bills one by one is not a “scalable solution,” Kliff said in a 2019 briefing on this subject held by the Alliance for Health Policy. Consumers are looking to lawmakers to protect them from surprise bills. As of April 2020, 29 states had taken some action to try to protect consumers from these bills, according to a tally kept by the nonprofit Commonwealth Fund, which studies health policy issues.

Even in these states, though, many consumers remain vulnerable to surprise medical bills. A federal law, the Employee Retirement Income Security Act of 1974 (ERISA), keeps states from regulating one of the largest sources of health insurance, the plans in which companies pay directly for the medical expenses of their employees. More than 100 million people in the United States have what’s called self-funded employer-provided medical coverage, according to a 2019 report from America’s Health Insurance Plans, a trade group.

There is broad support from both the Democratic and Republican parties about a need to remove consumers from battles over medical bills. And this support comes from both Congress and the White House.

Many Republicans and Democrats in Congress have co-sponsored several bills that would address surprise billing. President Donald J. Trump also has called for a federal law on surprise medical bills, including holding a press conference on this theme in May 2019. Trump there said surprise medical bills have “left some patients with thousands of dollars of unexpected and unjustified charges for services they did not know anything about and, sometimes, services they did not have any information on.”

At that May press conference, Sen. Lamar Alexander, a Tennessee Republican, told Trump he expected to have a bipartisan bill soon ready for the president’s signature. Alexander is chairman of the Senate’s Health, Education, Labor and Pensions Committee (HELP). So it at first appeared auspicious for critics of surprise billing when the HELP Committee in June 2019 included provisions addressing this issue in a wide-ranging package of legislation, known as the Lower Health Care Costs Act.

But a rift soon became apparent. Alexander’s bill suggested an approach favored by insurers, looking to use regional prices for medical services to settle disputes about out-of-network care. That angered many physicians’ groups, which argue this approach gives insurers an unfair advantage at their expense. They prefer an approach that calls for arbitration in cases of disputed bills.

Over the past year, there has been a lot of talk on Capitol Hill about legislation addressing surprise billing — but very little action. (Congress included a provision in the Families First Coronavirus Response Act that is meant to shield consumers from surprise bills for coronavirus testing. )

At the heart of the issue is a tough choice facing lawmakers. They have to decide which powerful group they will disappoint in addressing surprise billing.  Adopting a system using regional prices for medical care, known as a benchmark approach, would please insurers and anger many physician organizations. A federal law calling for arbitration of surprise medical bills would have the opposite effect.

Here are seven tips to help journalists understand and report on surprise medical billing.

Tip #1: Find out what your state has done or tried to do to address surprise medical bills.

There are several online resources to help journalists find data to localize stories about surprise billing.

The Commonwealth Fund has published a roundup on state actions on surprise billing, which this nonprofit group calls “balance billing.” The Commonwealth Fund lays out which states have no protections, some protections or comprehensive protections.

There’s variation among states at risk for surprise bills, according to 2020 research from the Kaiser Family Foundation. Looking at emergency room visits and hospital stays, for example, researchers found out-of-network charges were more likely to happen in Texas, New York, Florida, New Jersey, and Kansas, and less likely in Minnesota, South Dakota, Nebraska, Maine, and Mississippi.

It’s important to note the limits of state laws on surprise medical billing. More than half of the people in the United States gained their health insurance through an employer-sponsored plan in 2018, according to a 2019 report from the Census Bureau. It estimated 178 million of the about 324 million people in the United States had this form of insurance.

But the Employee Retirement Income Security Act of 1974 (ERISA) keeps states from regulating policies for these self-funded employer-provided health plans. (Note: a self-funded plan is one on which the employer bears the primary financial risk, while often using an insurer company to manage the health benefits. Companies also can take part in fully insured plans, where their funds are pooled with those of other customers and used to pay medical bills.  “With as many as 60% of individuals with employer-sponsored coverage enrolled in self-insured plans, states are unable to require that surprise billing protections extend to all residents,” the National Governors Association said in a report.

Tip #2: Don’t overstate the findings of academic research.

Reporters need to be cautious about not overstating or misinterpreting what published research has shown about out-of-network billing. There is a growing body of work about how often people with private insurance face out-of-network charges even if treated at a hospital in their insurers’ networks. These out-of-network charges often can result in surprise bills, research shows, but it is still unclear how often hospitals and physicians fully pursue the money initially claimed for out-of-network charges.

It’s also important to be clear about how many people are affected by a surprise bill. There have been a number of headlines suggesting 1 in 5 emergency room patients get a surprise bill, but the research reported in these articles involved a sample of people who were covered by private insurance. That leaves out much of the U.S. population, with government insurance plans such as Medicare and Medicaid covering about a third of the population.

Journalist’s Resource recently published a roundup of research summarizing recent notable studies on surprise billing.

Tip #3: Pay attention to how lobbying influences the political debate about surprise billing.

The Senate Health, Education, Labor and Pensions (HELP) Committee last year set out an initial marker in the congressional debate about surprise billing.

The HELP committee included provisions on surprise medical billing as part of a wide-ranging package of health legislation, called the Lower Health Care Costs Act. HELP’s bill mimicked an approach used in California to address surprise billing. The HELP bill called for settling disputes about out-of-network care by considering in-network rates in the region. The aim was to set payment around the halfway mark, or median, of agreements already in place between insurers and providers of medical care for a service. The bill would direct the Department of Health and Human Services to establish the boundaries of regions used in considering payment.

In response came the so-called “Doctor Patient Unity” campaign. Backed by two large private-equity-funded physician staffing companies, this campaign spent tens of millions on television advertisements and direct mail opposing the benchmark approach to surprise billing, the New York Times reported last year.

The Senate HELP Committee’s approach also angered many medical associations, including those representing physicians most likely to be involved with out-of-network billing. These groups say a benchmark approach benefits insurers, not patients. The American College of Emergency Physicians (ACEP), for example, notes that its members are required to treat patients regardless of what kind of insurance coverage they have. In the view of ACEP, insurers seek to offer only a “low-ball amount” in disputes about out-of-network care. ACEP and other medical associations argue for using arbitration to resolve disputes.

If you cover a regional beat, you can ask members of the House and Senate who represent your audience what they have done on the topic of surprise billing. You can also use the Center for Responsive Politics’ OpenSecrets.org site to see which trade groups have donated to these lawmakers and ask if these contributions have influenced their views.

For this debate, you would want to look at contributions from groups on both sides of the issue of the benchmark approach.

Private equity firms Blackstone Group and KKR & Co., for example, own firms that get paid to arrange staffing for emergency rooms. So these firms stand to lose from surprise billing legislation that uses a benchmark approach. Blackstone’s TeamHealth physician-staffing business argues that insurers and employer groups have been working in recent years to cut reimbursement for emergency medicine.

Insurers like UnitedHealth prefer a benchmark approach. They say this approach removes the financial incentive for physicians to try to remain out of network in order to charge high rates.

Tip #4: Interview doctors and executives for hospitals and insurance plans.

It would be worth asking leaders of hospitals and insurance plans in your region what, if anything, they have done to prevent cases of surprise billing. And you should consider including the views of doctors in your stories.

Physician organizations, such as the American Medical Association (AMA), have suggested lawmakers look at ways to expand the coverage people get from their health plans. In a letter sent last year to the leaders of the House Ways and Means Committee, AMA and more than 100 other physician organizations said insurers should include in their networks “an adequate ratio of emergency physicians, hospital-based physicians, and on-call specialists and subspecialists” to serve their customers.

Many medical associations have said they support a federal law to address surprise billing, preferably one that does not use benchmarks. They prefer arbitration as a means of resolving disputes.

But not all doctors favor the arbitration approach, which critics say allows some doctors to essentially set their own prices. Using arbitration to settle disputes about surprise medical bills removes the incentive for some physicians to negotiate with insurers,  Ashish K. Jha, a physician and professor of health policy at the Harvard T.H. Chan School of Public Health, argued in an opinion article for the Boston Globe in December.

“With artificially high charges as the baseline for arbitration, more physicians are tempted to go out-of-network, inflating their billed charges, and getting large payouts from the arbitrator,” Jha wrote.

Tip #5: Be realistic about the political battles in Congress surrounding surprise billing.

Journalists wrote many stories in 2019 about lawmakers’ plans to clear federal legislation on surprise billing for Trump to sign into law. There was bipartisan support in both the Senate and House for addressing this issue. A duo of physician-lawmakers, California Democrat Rep. Raul Ruiz and Tennessee Republican Rep. Phil Roe, built support for using the arbitration approach.

And the Trump administration also publicly supported these efforts throughout last year. At a November 2019 meeting with reporters, then-White House Domestic Policy Council Director Joe Grogan said he hoped Congress would clear legislation on surprise billing by the end of the year. He said there was an “obvious” need for a federal law to address situations where people faced surprise medical bills despite having insurance. Often, these cases arise when people need emergency care.

“They are not in a position to bargain. They are not in a position to fully comprehend in many of these instances what is going on and they need help,” Grogan said.

Yet, leaders in Congress still opted in December to drop their attempt to pass a law on surprise billing. That decision exempted them from having to pick sides in a debate in which powerful groups have opposing opinions — at least temporarily. Advocacy groups such as Families USA continue to press for a federal law addressing surprise billing, as do some members of Congress.

In reporting on surprise billing, you may hear people talk about the savings that the Congressional Budget Office (CBO) estimates a federal surprise billing law would generate. These savings are seen by lawmakers  as an enticement for Congress to eventually pass a law on surprise billing. Members of Congress could apply to the estimated savings from ending or curbing surprise billing to offset spending for another federal program.

CBO already has published estimates on potential savings from several measures that would address surprise billing. The Senate HELP’s wide-ranging Lower Health Care Costs Act bill, introduced in 2019, would save the federal government $25 billion over a decade, CBO said. A House bill calling for negotiation would save about $18 billion over a decade, CBO said. A Washington, D.C. firm that employs people who previously worked as staffers in Congress and the Centers for Medicare and Medicaid Services, McDermott + Consulting, has done a summary of pending legislation.

In a May 2020 interview with the Wall Street Journal, Rep. Greg Walden of Oregon cited Congress’ recent decision to require free coronavirus testing as a positive sign for the eventual passage of a law on surprise billing. Walden, the ranking Republican on the House Energy and Commerce Committee, also noted how the Department of Health and Human Services used an administrative step to try to shield people from surprise bills in connection with treatment for suspected or confirmed cases of COVID-19.

Walden noted a “certain irony” with the current federal policies that seek to shield consumers from surprise billing in connection with COVID-19, while leaving them otherwise exposed.

If “you have a heart condition that pops up and you’re out of network, it’s OK? I don’t think so,” Walden told the Journal. “We’ve won the intellectual argument.”

Tip #6. Crowdsource your audience to find people who have experienced surprise billing.

Kaiser Health News and National Public Radio have a running crowdsourced investigation, titled the “Bill of the Month” series. They ask members of their audience to submit medical bills.  “Do you have a medical bill that is exorbitant, baffling, infuriating or all of the above? Send it to us and tell us about your experience,” Kaiser Health News says on its website.

The resulting stories from this “Bill of the Month” series detail cases where people received unexpectedly high medical expenses and may serve as a good model.

In reporting on consumers’ surprise medical bills, it’s worth asking your sources to share their paperwork with you. Ask them for their insurers’ explanation of benefits statements and invoices.

Tip #7. Keep your Kaisers straight.

If you’re new to the health care beat, you may be confused by the prevalence of the name “Kaiser” in health care policy and journalism; this reflects the interest of Henry Kaiser (1882-1967), a shipbuilder, in improving U.S. medical care. The Kaiser Family Foundation is a non-profit organization that funds Kaiser Health News, but does not set its editorial policies.  Neither organization is connected to Kaiser Permanente, a large health insurance plan.

Additional resources:

Journalist’s Resource has a roundup of recent research on surprise billing.

The nonprofit nonpartisan Alliance for Health Policy has posted online a recording of its July 2019 panel discussion on surprise medical billing. This roughly 90-minute recording provides a thorough introduction to the topic. The Alliance also posted a contact list of experts.

The following organizations also offer helpful resources:

• Brookings Institution’s Everything You Need to Know About Surprise Billing web page. This provides links to research done by scholars at Brookings and the University of Southern California’s Schaeffer Center for Health Policy & Economics.
• Georgetown University’s Center on Health Insurance Reforms resource center on surprise billing.
• Kaiser Family Foundation, including this briefing, Visualizing Health Policy: US Statistics on Surprise Medical Billing.

In addition, medical specialty groups like the American College of Emergency Physicians  and American Medical Association have web pages where they offer their take on surprise medical billing.

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