The expected surge in coronavirus cases is slamming hospitals across the country, and they and the entire U.S. health care system will need major public support in difficult days ahead. Still, important markers also have gone down, so pillars of the medical establishment eventually may have to account for billions of taxpayer dollars they have been all but gifted already and why they charge sky-high prices for their medical services.
Noam Levey of the Los Angeles Times deserves credit for his reporting about the public largesse that already has benefited parties in the health care system. As he wrote:
“The Trump administration has pumped billions of dollars into the health care industry during the Covid-19 crisis, padding bottom lines at some of the country’s most profitable businesses even as millions of Americans have been left struggling with mounting medical bills. And although taxpayer money has poured into drug makers, hospital systems and medical distributors, administration officials have put few requirements on the businesses that took public assistance. Pharmaceutical companies could charge more for vaccines and treatments developed with public money. Medical distributors that received government assistance to air-lift supplies from China this spring were able to sell the material at undiscounted prices. And hospitals sustained with bailout money will be free to raise prices on patients for years to come.”
The concern is palpable among experts who have watched how Congress appropriated pandemic rescue money, turning to the administration to determine crucial details as to how supposedly urgent aid would be allocated. And much clearly went awry, as Levey learned from savvy sources like Elizabeth Mitchell, president of the Pacific Business Group on Health, a consortium of large companies, including Boeing, Safeway, Walmart and Wells Fargo, that have worked to control healthcare costs. She told him of rushed pandemic aid:
“This was taxpayer money. Any effective investor says we want to see something for our investment. I’m very concerned that all we’ll get out of this is an even more expensive healthcare system than we had going into the pandemic.”
Health care profits skyrocket
As Levey reported, health industry watchdogs have grown increasingly aggravated by the soaring profits in the sector:
“The 25 biggest health care companies — including drug makers, health insurers, medical supply companies and hospitals — recorded more than $63 billion in profits in the first two quarters of 2020, according to a Times analysis of company data aggregated by FactSet, a financial analysis firm. Profits just for drug companies and medical distributors that received taxpayer assistance during COVID top $24 billion through the first half of the year, The Times analysis found.
“The government largesse for an industry that already costs Americans more than any health care system in the world contrasts sharply with the federal government’s strategy for rescuing automakers, banks and other financial institutions during the Great Recession a decade ago. During that crisis, recipients of taxpayer bailouts were subject to restrictions and requirements that public aid be recouped, which largely occurred. The Trump administration’s lenient rules for corporate recipients of Covid-19 aid also contrast with its approach to government programs for poor people, such as Medicaid or food stamps. Administration officials have repeatedly said these funds should be available only to low-income Americans who meet strict conditions, such as seeking work.”
The New York Times earlier dug into the way the administration handled billions of dollars in coronavirus support for hospitals, reporting, in brief, that the richest institutions got richer. They already sat on big resources, including billions of dollars in cash. But some of the recipients of pandemic payments turned out to be industry majors, least likely to need infusions of support.
Big and dubious dollars for Big Pharma
Big Pharma, Levey reported, also has benefited from billions of dollars in federal spending on prospective coronavirus vaccines and therapeutics for Covid-19 — even though taxpayers already had contributed big sums to support foundational research for the products.
President Trump’s evidence-light hyping of various treatments also has not made it easy for careful oversight of products, pressed into regulator approval for emergency use. Distressing information is emerging, for example, on the antiviral drug remdesivir, which Trump has promoted because he was treated with it. The drug has been blessed by the federal Food and Drug Administration (FDA) as the only medication specifically for coronavirus care.
But the New York Times, while noting the product is headed to being a $1 billion blockbuster for Gilead, its maker, says the growing evidence shows remdesivir, aka Veklury, “is, at best, a mediocre treatment for Covid-19, the disease caused by the coronavirus.” Science magazine says remdesivir has a “very, very bad look,” reporting of regulators’ actions with it:
“Science has learned that both FDA’s decision and [a $1 billion European Union supply] deal [for Gilead] came about under unusual circumstances that gave the company important advantages. FDA never consulted a group of outside experts that it has at the ready to weigh in on complicated antiviral drug issues. That group, the Antimicrobial Drugs Advisory Committee, mixes infectious disease clinicians with biostatisticians, pharmacists, and a consumer representative to review all available data on experimental treatments and make recommendations to FDA about drug approvals — yet it has not convened once during the pandemic. The European Union, meanwhile, decided to settle on the remdesivir pricing exactly one week before the disappointing [World Health Organization] ‘Solidarity trial’ results came out. It was unaware of those results, although Gilead, having donated remdesivir to the trial, was informed of the data on 23 September and knew the trial was a bust.
“’This is a very, very bad look for the FDA, and the dealings between Gilead and EU make it another layer of badness,’ says Eric Topol, a cardiologist at the Scripps Research Translational Institute who objected to remdesivir’s FDA approval.”
It also is worth noting that the president also has tub-thumped for another treatment he received for his coronavirus infection: monoclonal antibodies, which the New York Times has described as costly, lab “mass-produced mimics of immune molecules that the human body produces in reaction to the coronavirus.” Eli Lilly and Regeneron, two prominent makers of monoclonal antibodies, have paused clinical trials of this therapeutic due to safety concerns.
The Washington Post, in the meantime, has put out a deep dig into how the administration bypassed federal drug regulators during an early stage of the pandemic to flood the country with tens of millions of doses the antimalarial medication hydroxychlorquine, pulled from federal stockpiles. There was little evidence the drug was useful in treating the coronavirus, and it had risks.
A transparency plan becomes final
As for hospitals and other providers, insurers, and their transparency — or lack of it — in their pricing for patients and various medical services, the Trump Administration has advanced and finalized its plans for changes in this area. The Wall Street Journal reported of a final rule just put out:
“Private insurers must publish the prices they have negotiated with providers under a Trump administration rule aimed at lowering health-care spending by giving consumers more information about their out-of-pocket charges. The rule … calls for gradually increasing the requirements. Private insurers will have to post the negotiated prices for 500 ‘shoppable’ services in 2023, with the mandate extended to all services by 2024. The action comes in the final days of President Trump’s re-election campaign and after Democrat Joe Biden has criticized him for backing a lawsuit to invalidate the Affordable Care Act, which could result in about 20 million Americans losing health coverage …
“Insurers and hospitals have criticized the White House initiatives as too expensive and burdensome and of little use to consumers they say are unlikely to shop around based on negotiated rates. A federal judge in June ruled against hospitals that had sued to block a similar rule compelling them to negotiate their rates with insurers. The case is now with a U.S. Court of Appeals. The rule for insurers covers about 200 million Americans with individual-market and employer-based coverage. These consumers will get access to a list of real-time price information, including cost-sharing, letting them know how much care will cost before going in for treatment, according to the Department of Health and Human Services. Proponents of price disclosure say it would drive down health-care costs.”
While greater disclosure of sharply varying prices — and insurer-hospital deals that may prompt these — may sound like a good idea, skeptics question the practical application of rules like what the administration plans to impose.
Research has shown that medical price transparency can have unintended consequences. It can, for example, lead to price increases, by stifling fierce negotiation or leading competitors to up charges after learning that they lag others’ rates. Then, of course, pragmatism may play a big role in whether the public disclosures would be helpful, or not, to patients.
The administration earlier had ordered hospitals to post on their web sites their charge masters, the long lists that purported provide important information about specific prices for an array of medical services provided. The result, as the Kaiser Health News service reported earlier, was that “popping up on medical center websites is a dog’s breakfast of medical codes, abbreviations and dollar signs — in little discernible order — that may initially serve to confuse more than illuminate … While more information is always welcome, the new data will fall short of providing most consumers with usable insight.”
Levey, earlier and separately, reported an interesting take-down on health economists’ long claims about the importance of empowering — even forcing — consumers to “shop around” for medical services. With interviews, data analysis, and public opinion polling, he and his newspaper reported that patients experience great difficulty in accessing needed information to compare appropriately prices. And they regard medical care with a gravity that makes it unlike other goods or services in consumer decision-making.
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 health care. This has become an ordeal due to the soaring cost, complexity, and uncertainty of treatments and prescription medications, too many of which turn out to be dangerous drugs.
As candidates attack doctors, hospitals, and public health officials with unfounded and malicious claims for political gain and undercut the credibility of evidence-based medical science, Americans will need to support our health care system — especially so it does not get overwhelmed and teeter during the strains of a coronavirus surge. Many health workers are putting their lives on the line for patients, and they deserve great credit for doing so.
We have much work to do, however, so we get our health care system to a much better, more affordable, accessible, equitable, and excellent place after we’ve gotten this pandemic under control.