Virus may upend hospitals’ finances, but not dubious Big Pharma behavior

covidhospitalbed-199x300When it comes to aggravating parties in the U.S. health care system, a certain French phrase captures an uncomfortable reality: “Plus ça change” — as in plus ça change, plus c’est la même chose or “The more it changes, the more it stays the same.”

We can see that here:

A generic drug maker’s chutzpah in the face of federal charges

Patients in the United States have screamed for some time now about skyrocketing prices for prescription medicines, getting a mostly meh response from the White House and Capitol Hill about reining in powerful Big Pharma.

Federal prosecutors had been getting better outcomes by building legal cases against drug makers, including a long-running challenge to soaring costs of generics — familiar medications that should be less expensive because their makers have seen the expiration of intellectual property protections on them, so they no longer need costly brand marketing, advertising, and sales pushes. Multiple makers, in theory, also could leap in to manufacture a generic targeting a specific disease or condition.

That has occurred, and, instead, generic prices keep rising, many of them in curious lockstep by different makers.

And the New York Times reported:

“In the coming days, the Justice Department will make an important decision: whether to file criminal charges against one of the world’s largest pharmaceutical companies for allegedly colluding with rivals to inflate the prices of widely used drugs. The company, Teva Pharmaceutical Industries, is betting that in the middle of a deadly pandemic, the Trump administration won’t dare to come down hard on the largest supplier of generic drugs in the United States. It is a high-stakes gamble that could affect millions of Americans who rely on Teva’s dozens of inexpensive generic drugs, as well as its brand-name products like Copaxone, for multiple sclerosis, and Ajovy, for migraines. Teva officials say criminal charges could cripple the Israeli company and potentially leave it unable to sell drugs to federal programs like Medicare. For years, the Justice Department and state prosecutors have been investigating what they describe as a conspiracy by pharmaceutical companies to increase the prices of popular drugs. The department has already extracted guilty pleas and $224 million in penalties from four other drug companies. Lawyers for Teva, which prosecutors believe was deeply involved in the conspiracy, until recently had been holding settlement negotiations with officials in the Justice Department’s antitrust division. But in April, the company all but walked away from the talks, essentially daring the Trump administration to file charges, according to people on both sides of the discussions. Teva officials have said that the company did nothing wrong and that they plan to vigorously defend themselves.”

The company, of course, may think it has a political ace up its sleeve, the newspaper reported.

That’s because Teva has played pals with President Trump and his administration over hydroxychloroquine, an antimalarial drug promoted to extremes by political partisans as a Covid-19 treatment.

The drug, hyped for weeks by the president and commentators on Fox News, has fallen out of favor as increasing numbers of studies, with higher levels of rigor, have debunked the extreme claims for chloroquine and hydroxychloroquine, including their combined use with antiviral drugs. Experts, instead, have warned that these antimalarials can heighten risks for harms to patients’ hearts, eyes and lives, while failing to move the needle in treating a novel coronavirus infection.

That outcome, however, may matter less, Teva officials may be betting, than the goodwill that the company fostered with the president and his men, all of whom have put loyalty and displays of affection ahead of important other considerations during this administration, the New York Times reported.

As the clock ticks on legal deadlines for when federal prosecutors can file their case against Teva, the company has pulled away and stayed mum about next steps, the newspaper noted, adding and quoting pharmaceutical analyst Ronny Gal:

“Because Teva makes 10% of oral generic drugs prescribed in the United States, Mr. Gal said it has significant leverage in negotiating with the federal government, especially during the pandemic, when the supply of some drugs has been strained. The company has ‘a level of protection, where the U.S. certainly does not want the company to go bankrupt,’ he said. Justice Department officials haven’t given up hope that settlement talks might resume …”

Who blinks first, or will Teva walk?

A blind eye to bad behavior by health care providers?

As the federal government has raced to shore up the U.S. health care system from serious damage due to the Covid-19 pandemic, some shaky business has ensued, the nonpartisan, independent Kaiser Health News Service reported. Its reporters found that:

“The Trump administration has sent hundreds of millions of dollars in pandemic-related bailouts to health care providers with checkered histories, including a Florida-based cancer center that agreed to pay a $100 million criminal penalty as part of a federal antitrust investigation. At least half of the top 10 recipients, part of a group that received $20 billion in emergency funding from the Department of Health and Human Services, have paid millions in recent years either in criminal penalties or to settle allegations related to improper billing and other practices … They include Florida Cancer Specialists & Research Institute, one of the nation’s largest U.S. oncology practices, which in late April said it would pay a $100 million penalty for engaging in a nearly two-decade-long antitrust scheme to suppress competition … The company, which is required to pay the first $40 million in penalties by June 1, received more than $67 million in HHS bailout funds. HHS distributed emergency funding to hospitals and other providers to help offset revenue losses or expenses related to COVID-19. In April, it distributed the first $50 billion based on providers’ net patient revenue, a calculation that gives more money to bigger systems or institutions charging higher prices. Companies that have attested to receiving payments as of May 4 collectively received roughly $20 billion. The list is likely to change in the coming days as other companies confirm they’ve received money.”

KHN identified other problem recipients of the federal cash, including: Dignity Health in Phoenix, the Cleveland Clinic, Houston’s Memorial Hermann Health System and Massachusetts General Hospital in Boston. The medical news site noted that all these medical providers “have paid millions in recent years to resolve allegations related to improper billing in federal health programs, false claims to increase their payments or lax oversight that enabled employees to steal prescription painkillers.”

When federal officials laid out the terms for emergency, pandemic-related assistance programs for medical providers, they were lax about the qualifying terms, barring only extreme cases — “any corporation convicted of a felony criminal violation within the preceding two years ― unless officials have decided that it is not necessary to prohibit them from doing business with the federal government.”

As the news service reported:

“Beyond that, HHS in its terms states that providers have to certify that they are not excluded from participating in federal health care programs like Medicare and Medicaid and have not had their Medicare billing privileges revoked. The HHS Inspector General has the authority to exclude practitioners and health care companies for a wide variety of reasons — including a conviction of fraud ― but it’s highly unusual for the federal government to do so with large institutions, experts say.”

The institutions put in the spotlight for their dubious actions before and for taking federal help now all said the assistance is needed and will help them stay stable during the pandemic so they can provide needed care. When more normal circumstances prevail again, will regulators reexamine the U.S. aid distribution in health care, potentially clawing back swift but unwarranted payments of taxpayer dollars to providers?

Covid-19 may cause the health care boom to go bust

Experts are watching closely to see if the coronavirus-caused crisis finally busts what critics have called an unsustainable boom in U.S. health care.

Americans spend $3.7 trillion on a system that consumes roughly 18% of the gross national product and delivers inferior outcomes to those achieved in other industrialized nations that spend far less.

But the fee-for-service approach in this country seemed all but unstoppable — until Covid-19 struck.

Hospitals have been forced to postpone tests, elective treatments and procedures, and a myriad other medical services, costing some big institutions millions of dollars a day. Patients, frightened by the novel coronavirus and possible exposure to it, are staying at home and away from medical services of all kinds, which also largely have been shut down.

Medical practices, clinics, hospitals, and health care chains have been staggered by the financial harms of Covid-19, with the Mayo Clinic estimating that sustained losses through this year will cost it “$900 million in 2020 even after furloughing workers, cutting doctors’ pay and halting new construction projects,” the New York Times reported, adding that Johns Hopkins forecasts $300 million in losses into next year, even after adopting cost reductions.

Although virus care has put parts of the health care system into high stress over drive, much of the rest of it has shuttered, leading to furloughs and layoffs at levels unseen in recent times. As the New York Times “Upshot” news feature reported:

“With the virus and its fallout deterring Americans from using the health system, job losses started in March and accelerated to 1.4 million last month. ‘This is a disruption unlike any we’ve seen in decades,’ said Ani Turner, the co-director of sustainable health spending strategies at the Altarum Institute, which tracks trends in health care spending and employment … A sudden drop in health spending and employment amid a pandemic might seem like a paradox. But it reflects how the health industry tends to make its money: Treating patients for a deadly illness is far less profitable than offering them elective surgeries. When the federal government asked hospitals to stop such procedures to free up capacity, that changed their economics profoundly … Independent medical practices have seen huge reductions in their business, as some patients connect with doctors virtually, while many others patient visits have simply vanished. In previous recessions, the health industry has not taken such a hit …[because] many of the problems that send people to the doctor — heart disease, appendicitis, cancer or the flu — do not go away during a struggling economy. As a result, the doctors and nurses and medical assistants and billing clerks who work in health care are usually protected from an economic downturn. But lately Medicare beneficiaries, the age group at highest risk of serious disease or death from the coronavirus, have been particularly spooked from seeking medical care. And emergency rooms have reported shocking declines in visits for what doctors had always thought of as life-threatening emergencies …”

Experts aren’t forecasting a fast or vigorous rebound in health care, which, instead, may have seen its business models disrupted for a longer-term, the newspaper reported:

The Covid-19 outbreak has shown the vulnerabilities of this business model, with procedures canceled, tests postponed, and millions of newly unemployed Americans expected to lose the health coverage they received at work.

“’Health care has always been viewed as recession-proof, but it’s not pandemic-proof,’ said Dr. David Blumenthal, president of the Commonwealth Fund, a health research organization. ‘The level of economic impact, plus the fear of coronavirus, will have a more dramatic impact than any event we’ve seen in the health care system weather in my lifetime.’ The disruption to hospital operations may ultimately leave Americans with less access to medical care, according to financial analysts, health economists and policy experts. Struggling hospitals may close or shut down unprofitable departments. Some may decide to merge with nearby competitors or sell to larger hospital chains. ‘There is a huge threat to our capability to provide basic services,’ Dr. Blumenthal said.”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, and excellent medical care. This has become an ordeal due to skyrocketing cost, complexity, and uncertainty of treatments and prescription medications, too many of which turn out to be dangerous drugs.

Critics of the health care system, including patient safety advocates like me and my colleagues at the firm, will not be reveling about the financial hardships that excellent doctors, nurses, and other medical staffers are suffering due to Covid-19. Far from it. They deserve praise and support for their deep investment in training and education, and their long hours at work to help patients who are sick or injured.

But the system in which they toil long has been sick and broken, with Big Pharma profiteering and bad actors exploiting every financial ploy possible. If the coronavirus can lead to meaningful and positive reforms in health care, that would be a boon to the disease’s other terrible tolls on people’s lives and livelihoods.

That may be a lot to wish for. But the U.S. health care system would be far better, wouldn’t it, if prescription drug prices were reasonable, excessive tests and procedures were reduced or even eliminated, billing processes were streamlined and clarified, and the overall and individual costs of medical services were rationalized — moving away from the endless ticky-tack, add-on fees that fast become patients’ bankruptcy nightmares? Can we see a future where we all do without huge, shiny new hospital buildings perched on the hill, filled with the latest, million-dollar gear of minimal use? Couldn’t we live without the army of MBAs in suits who never treat patients but earn big health care pay, while babbling on about maximizing returns on investments?

We’ve got a lot of work ahead of us, not only to beat the coronavirus but also to see it helps us build a better health care system, not totally destroy what we’ve got.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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