Hospital Debt May Be Paid by the State of Connecticut
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
CT Mirror has reported that Connecticut Governor Ned Lamont has proposed to the legislature plans [here] to use $20 million in federal pandemic aid to buy and cancel billions of dollars in medical debt for thousands of Connecticut residents.
“The governor would use $20 million from Connecticut’s American Rescue Plan Act allocation to contract with a nonprofit that then would work directly with local hospital systems to purchase entire portfolios of debt. There is no application process, and nonprofits typically purchase the debt owed by low- and low-to-moderate income households.”
“Charities performing this task in other states have acquired debt for as little as 1 cent on the dollar because hospitals generally struggle to recover most of the funds owed . . . About 31% of U.S. households with a member in fair or poor health have medical debt, according to census data.”
“A June 2022 survey by the Kaiser Family Foundation found that four in 10 adults have some form of health care debt, with most stemming from a one-time or short-term medical expense — often unexpected. The survey also reported nearly one in five adults with health care debt think they will never be able to pay it off.”
Connecticut would be following the path of Boston suburb Somerville which has proposed to use $200,000 in federal ARPA dollars to partner with RIP Medical Debt, a New York City-based charity that purchases hospital debt.
DRUGS & DEVICES
340B Program Is Shifting Care from Physician Offices to Hospitals, and From Less Expensive to More Expensive Drugs
The New England Journal of Medicine has published (here) a critique of the 340B program, named for the section of the Public Health Act which, in 1992, launched a program to benefit 50 Disproportionate Share Hospitals and other entities, such as federally qualified health centers, that served high percentages of low-income people.
“Since then, the program has expanded substantially, with the Health Resources and Services Administration designating hospitals that meet the program’s legal requirements. Between 2010 and 2020, the number of 340B-covered entities increased from nearly 9700 to 12,700 . . . (Each of these entities can have additional satellite sites.) The program’s growth extends from hospitals to hospital outpatient clinics and contract pharmacies.”
“Health care systems have restructured service delivery, seemingly to maximize their profits under the 340B program.
Hospitals can acquire discounted outpatient medications under the program and provide them to Medicare beneficiaries at the statutory payment rate of the average sales price (ASP) plus 6%. . . As a result of the incentives created by this arrangement, care has shifted from physician offices to hospital outpatient departments: according to an analysis by the Office of the Assistant Secretary for Planning and Evaluation, the share of Medicare Part B drug spending associated with care provided in hospital outpatient departments increased from 23% in 2006 to 40% in 2017.”
Expensive cancer drugs are a tool: “A study using data from 2008 to 2012 revealed that 340B-participating hospitals employed 2.3 more hematologist–oncologists than other hospitals and billed Medicare for 90% more oncology infusion-drugs. These findings suggest that patients may be prescribed more expensive therapies, and may face higher out-of-pocket costs, when they receive care at 340B-participating entities than at nonparticipating entities. Despite the original intent of the program to support charity care, provider participation in the program wasn’t found to be associated with the provision of uncompensated care, expanded delivery of low-profit services, or lower mortality in low-income populations. The program has shifted from one that supported hospitals caring for the neediest patients to one that increases margins for a range of hospitals.”
The Wall Street Journal chimed in (here) with its own report, including an extraordinary survey of the actual location of 29,000 hospital-owned sites which enabled wealthy hospitals to access subsidies intended for their poorer brethren. “One participant is the Cleveland Clinic’s flagship hospital, which reported $1.35 billion in net income last year. The hospital doesn’t admit enough Medicaid and low-income Medicare patients to qualify for low-cost drugs under the program’s original requirements. But a quirk in federal law allowed the hospital to qualify as a rural referral center, despite its location near the center of Cleveland.”
“Despite the benefits, the program hasn’t resulted in new drug discounts for low-income Cleveland Clinic patients, nor has it caused the hospital to increase the financial assistance it offers to those who can’t afford care. A Journal analysis of HRSA data found that 88 out of the 111 rural referral centers in the 340B program weren’t located in areas deemed rural by HRSA.”
An example of a center city hospital harvesting income from well insured suburban sites is Detroit’s Henry Ford Hospital. “The nonprofit, part of Henry Ford Health, has 467 sites registered for 340B drug discounts located outside its home neighborhood, 92% of them in census tracts with higher rates of private insurance than the parent hospital . . . The data show that hospitals often extend their 340B discounts to clinics in well-off communities, where they can charge privately insured patients more than those on Medicaid . . . Among the upscale suburbs with hospital-linked facilities using the 340B program were Lexington, Mass., and Encinitas, Calif. Both of those hospital systems said they use the proceeds to help needy patients.”
“Hospitals that meet the definition of rural referral centers are ramping up drug purchases under the program at a faster rate than any other type of 340B hospital, by more than 700% over five years, according to a HRSA report obtained through a Freedom of Information Act request. A Journal analysis found that most aren’t in rural areas, including Chicago’s Northwestern Memorial Hospital, Harvard-affiliated Brigham & Women’s Hospital in Boston and the Cleveland Clinic’s main campus.”
Biogen’s Pricing of Aduhelm, a Cautionary Tale
A Congressional Subcommittee has published the report of an 18 month investigation (here) of the pricing of the Alzheimer’s drug Aduhelm, complete with internal Biogen communications and e-mails, which unveils deliberations behind the decision to price the drug at $56,000 per year. STAT reported that surveys of insurers, researchers and physicians showed that “Any price above $35,000 would outstrip the value of a drug with uncertain benefits for patients and risk alienating physicians and pushing insurers to block access to the drug” but that “Biogen, facing challenges to its business, had other priorities.” The company set a price of $56,000, planning to “establish Aduhelm as one of the top pharmaceutical launches of all time.”
But Biogen made a different kind of history. STAT reports that “The high-profile uproar over Aduhelm’s cost led Medicare, the government program that insures more than 60 million seniors, to make the unprecedented decision not to reimburse for the drug. It also contributed to a widespread backlash over the rising cost of prescription medicines, which led to historic legislation, signed into law this year, that allows Medicare for the first time to negotiate the prices of certain drugs.”
Is penicillin-susceptible staph aureus a thing? TB From Bone Grafts
Journal Watch (here) reports “Penicillin-Susceptible Staphylococcus aureus: Reemerging Antibiotic Susceptibility?
George Sakoulas, MD, reviewing McNeil JC et al. Antimicrob Agents Chemother 2023 Jan 24, writes that “Once considered rare, PSSA comprised >20% of hematogenous S. aureus osteomyelitis cases at two large U.S. pediatric hospitals.”
Also reported, “After exposure to contaminated bone graft material, 1.5% of healthcare personnel developed latent tuberculosis.”
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