Beaumont victimized by medical equipment thieves, feds say

https://www.detroitnews.com/story/news/local/michigan/2021/01/14/beaumont-victimized-medical-equipment-thieves-feds-say/6655265002/

The indictment describes an inside job involving Beaumont employees who sold stolen sponges, adhesives and instruments used to inspect eyes and ears. The equipment included cystoscopes, a thin tube with a camera that is inserted through the urethra and into the bladder.

“Some of the medical devices stolen and re-sold over the Internet were possibly contaminated devices that were previously used in various surgical and other medical procedures on patients,” according to the indictment.

The three individuals charged in the indictment are:

  • Paul Purdy, 49, of Bellbrook, Ohio
  • Valdet Seferovic, 32, of Auburn Hills
  • Zafar Khan, 40, of Fenton

Purdy and Seferovic not respond to messages seeking comment Thursday while Harold Gurewitz, a lawyer for Khan, declined comment. The three defendants are scheduled to make initial appearances Jan. 21 in federal court.

“These defendants used their employment status to circumvent the safety protocols established by Beaumont Hospital to profit from the theft of medical devices and put the health and safety of the general public at risk in doing so,” U.S. Attorney Matthew Schneider said in a statement.

The wire fraud and conspiracy charges listed in the 18-count indictment are punishable by up to 20 years in federal prison.

Beaumont officials have cooperated fully with the investigation, health system spokesman Mark Geary wrote in an email to The Detroit News.

This kind of theft does a disservice to more than just Beaumont — it does a disservice to the community,” Geary wrote. “We have confidence in the legal process and trust a just result will be achieved.”

Purdy and Seferovic were friends who worked at Beaumont and had access to storage areas inside one of the system’s hospitals, prosecutors alleged. The duo gained access to medical supplies and devices, according to the government, and devised a plan to steal the equipment and sell the items throughout the U.S.

Purdy, who worked for Beaumont until resigning in 2017, never told buyers the items were stolen, prosecutors said. After he quit, Purdy recruited Seferovic to continue stealing items from the medical supply, cleaning and disinfecting rooms, according to prosecutors.

“Medical devices that are removed from their rightful place in a hospital or other medical setting put patients’ health at risk by denying them access to needed diagnostic imaging and treatment,” Lynda Burdelik, special agent in charge of the U.S. Food and Drug Administration’s Criminal Investigations field office in Chicago, said in a statement.

Purdy paid Seferovic for stolen items via PayPal and resold the devices on eBay and Amazon, according to the government. On March 28, 2018, the indictment alleges Purdy received a $4,800 wire payment from the sale of two cystoscopes.

That same day, Seferovic received a $2,550 payment via PayPal, according to the government.

In fall 2017, Seferovic also agreed to steal and sell medical devices and supplies to Khan, who owns Wholesale Medical & Surgical Suppliers of America, LLC in Flint, according to the indictment.

Seferovic would transfer stolen supplies to Khan during meetings in metro Detroit, including at a Walmart parking lot, according to the indictment. Khan, in turn, would sell the supplies and devices online at below retail price.

Seferovic’s job duties and status was unclear Thursday.

The investigation and alleged crimes have prompted internal changes at Beaumont.

“…Beaumont has enhanced security protocols and implemented additional checks and balances across the organization to reduce the chances of something like this happening again,” Geary said.

MedPAC to recommend 2% payment boost for hospitals next year

MedPAC approves 2021 payment recommendations | AHA News

The Medicare Payment Advisory Commission voted Jan. 14 to recommend a 2 percent raise in Medicare payments for hospitals next year.

The commission said it wants to give the payment boost to both acute-care and long-term care hospitals. The 2 percent payment increase will result in about a $750 million to $2 billion increase in acute-care hospital spending for Medicare and about $50 million for long-term care hospitals.  

MedPAC also plans to recommend no change to the payment rate for physicians in 2022 and a 5 percent decrease for home health firms and inpatient rehabilitation centers. 

Although MedPAC will recommend the payment boost, Congress is not required to implement the recommendation.

The vote occurred at MedPAC’s January public meeting. 

The No. 1 lesson from the 2021 JP Morgan Healthcare Conference: Healthcare is ‘too vital to fail’

Chronic Conditions | HENRY KOTULA

The annual J.P. Morgan Healthcare Conference is one of the best ways to diagnose the financial condition of the healthcare industry. Every January, every key stakeholder — providers, payers, pharmaceutical companies, tech companies, medical device and supply companies as well as bankers, venture capital and private equity firms — comes together in one exam room, even when it is virtual, for their annual check-up. But as we all know, this January is unlike any other as this past year has been unlike any other year.

You would have to go back to the banking crisis of 2008 to find a similar moment from an economic perspective. At the time, we were asking, “Are banks too big to fail?” The concern behind the question was that if they did fail, the economic chaos that would follow would lead to a collapse with the consumer ultimately picking up the tab. The rest is history.

Healthcare is “Too Vital to Fail” 

2020 was historic in too many ways to count. But in a year when healthcare providers faced the worst financial crisis in the history of healthcare, the headline is that they are still standing. And what they proved is that in contrast to banks in 2008 that were seen by many as “too big to fail,” healthcare providers in 2020 proved that they were “too vital to fail.” 

One of the many unique things about the COVID-19 pandemic is we are simultaneously experiencing a health crisis, where healthcare providers are the front line in the battle, and an economic crisis, felt in a big way in healthcare given the unique role hospitals play as the largest employer in most communities. Hospitals and health systems have done the vast majority of testing, treating, monitoring, counseling, educating and vaccinating all while searching for PPE and ventilators, and conducting clinical trials. And that’s just the beginning of the list.

Stop and think about that for a minute. What would we have done without them? Thinking through that question will give you some appreciation for the critical, challenging and central role that healthcare providers have had to play over the past year.

Simply stated, healthcare providers are the heart of healthcare, both clinically (essentially 100 percent of the care) and financially (over 50 percent of the $4 trillion annual spend on U.S. healthcare). Over the last year they stepped up and they stepped in at the moment where we needed them the most. This was despite the fact that, like most businesses, they were experiencing calamitous losses with no assurances of any assistance. 

Healthcare is “Pandemic-Proof”

This was absolutely the worst-case scenario and the biggest test possible for our nation’s healthcare delivery system. Patient volume and therefore revenue dropped by over 50 percent when the panic of the pandemic was at its peak, driving over $60 billion in losses per month across hospitals and healthcare providers. At the same time, they were dramatically increasing their expenses with PPE, ventilators and additional staff. This was not heading in a good direction. While failure may not have been seen as an option, it was clearly a possibility. 

The CARES Act clearly provided a temporary lifeline, providing funding for our nation’s hospitals to weather the storm. While there are more challenging times ahead, it is now clear that most are going to make it to the other side. The system of care in our country is often criticized, but when faced with perhaps the most challenging moment in the history of healthcare, our nation’s hospitals and health systems stepped up heroically and performed miraculously. The work of our healthcare providers on the front line and those who supported them was and is one thing that we all should be exceptionally proud of and thankful for. In 2020, they proved that not only is our nation’s healthcare system too vital to fail, but also that it is “pandemic proof.” 

Listening to Front Line at the 2021 J.P. Morgan Healthcare Conference 

There has never been a more important year to listen to the lessons from healthcare providers. They are and were the front line of our fight against COVID-19. If there was a class given about how to deal with a pandemic at an institutional level, this conference is where those lessons were being taught.  

This year at the J.P. Morgan Healthcare Conference, CEOs, and CFOs from many of the most prestigious and most well-respected health systems in the world presented including AdventHealth, Advocate Aurora Health, Ascension, Baylor Scott & White Health, CommonSpirit Health, Henry Ford Health System, Intermountain Healthcare, Jefferson Health, Mass General Brigham, Northwell Health, OhioHealth, Prisma Health, ProMedica Health System, Providence, Spectrum Health and SSM Health.

I’ve been in healthcare for 30 years and this is my fifth year of writing up the summary of the non-profit provider track of the conference for Becker’s Healthcare to help share the wisdom of the crowd of provider organizations that share their stories. Clearly, this year was different and not because the presentations were virtual, but because they were inspirational. 

What did we learn? The good news is that they have made many changes that have the potential to move healthcare in a much better direction and to get to a better place much faster. So, this year instead of providing you a nugget from each presentation, I am going to take a shot at summarizing what they collectively have in motion to stay vital after COVID.

10 Moves Healthcare Providers are Making to Stay Vital After-COVID

As a leader in healthcare, you will never have a bigger opportunity to drive change than right now. Smart leaders are framing this as essentially “before-COVID (BC)” and “after-COVID (AC)” and using this moment as their burning platform to drive change. Credit to the team at Providence for the acronym, but every CEO talked about this concept. As the saying goes, “never let a good crisis go to waste.” Well, we’ve certainly had a crisis, so here is a list of what the top health systems are doing to ensure that they don’t waste it and that they stay vital after-COVID:

1. Take Care of Your Team and They’ll Take Care of You: In a crisis, you can either come together as a team or fall apart. Clearly there has been a significant and stunning amount of pressure on healthcare providers. Many are fearing that mental health might be our nation’s next pandemic in the near future because they are seeing it right now with their own team. Perhaps one of their biggest lessons from this crisis has been the need to address the mental, physical and spiritual health of both team members as well as providers. They have put programs in place to help and have also built a tremendous amount of trust with their team by, in many cases, not laying off and/or furloughing employees. While they have made cuts in other areas such as benefits, this collective approach proved incredibly beneficial. And the last point here that relates to thinking differently about their team is that similar to other businesses, many health systems are making remote arrangements permanent for certain administrative roles and moving to a flexible approach regarding their team and their space in the future. 

2. Focus on Health Equity, Not Just Health Care: This was perhaps the most notable and encouraging change from presentations in past years at J.P. Morgan. I have been going to the conference for over a decade, and I’ve never heard someone mention this term or outline their efforts on “health equity” — this year, nearly everyone did. In the past, they have outlined many wonderful programs on “social determinants of health,” but this year they have seen the disproportionate impact of COVID on low-income communities bringing the ongoing issue of racial disparities in access to care and outcomes to light. As the bedrock of employment in their community, this provides an opportunity to not just provide health care, but also health equity, taking an active role to help make progress on issues like hunger, homelessness, and housing. Many are making significant investments in a number of these and other areas. 

3. Take the Lead in Public Health — the Message is the Medicine: One of the greatest failings of COVID, perhaps the greatest lesson learned, is the need for clear and consistent messaging from a public health perspective. That is a role that healthcare providers can and should play. In the pandemic, it represented the greatest opportunity to save lives as the essence of public health is communication — the message is the medicine. A number of health systems stepped into this opportunity to build trust and to build their brand, which are essentially one in the same. Some organizations have created a new role — a Chief Community Health Officer — which is a good way to capture the work that is in motion relative to social determinants of health as well as health equity. Many understand the opportunity here and will take the lead relative to vaccine distribution as clear messaging to build confidence is clearly needed.

4. Make the Home and Everywhere a Venue of Care: A number of presenters stated that “COVID didn’t change our strategy, it accelerated it.” For the most part, they were referring to virtual visits, which increased dramatically now representing around 10 percent of their visits vs. 1 percent before-COVID. One presenter said, “Digital has been tested and perfected during COVID,” but that is only considering the role we see digital playing in this moment. It is clear some organizations have a very narrow tactical lens while others are looking at the opportunity much more strategically. For many, they are looking at a “care anywhere and everywhere” strategy. From a full “hospital in the home” approach to remote monitoring devices, it is clear that your home will be seen as a venue of care and an access point moving forward. The pandemic of 2020 may have sparked a new era of “post-hospital healthcare” — stay tuned.

5. Bury Your Budget and Pivot to Planning: The budget process has been a source of incredible distrust, dissatisfaction and distraction for every health system for decades. The chaos and uncertainty of the pandemic forced every organization to bury their budget last year. With that said, many of the organizations that presented are now making a permanent shift away from a “budget-based culture” where the focus is on hitting a now irrelevant target set that was set six to nine months ago to a “performance-based culture” where the focus is on making progress every day, week, month and quarter. Given that the traditional annual operating budget process has been the core of how health systems have operated, this shift to a rolling forecast and a more dynamic planning process is likely the single most substantial and permanent change in how hospitals and health systems operate due to COVID. In other words, it is arguably a much bigger headline than what’s happened with virtual visits.

6. Get Your M&A Machine in Motion: It was clear from the presentations that activity around acquisitions is going to return, perhaps significantly. These organizations have strong balance sheets and while the strong have gotten stronger during COVID, the weak have in many cases gotten weaker. Many are going to be opportunistic to acquire hospitals, but at the same time they have concluded that they can’t just be a system of care delivery. They are also focused on acquiring and investing in other types of entities as well as forming more robust partnerships to create new revenue streams. Organizations that already had diversified revenue streams in place came through this pandemic the best. Most hospitals are overly reliant on the ED and surgical volume. Trying to drive that volume in a value-based world, with the end of site of service differentials and the inpatient only list, will be an even bigger challenge in the future as new niche players enter the market. As I wrote in the headline of my summary two years ago,It’s the platform, stupid.” There are better ways to create a financial path forward that involve leveraging their assets — their platform — in new and creative ways. 

7. Hey, You, Get into the Cloud: With apologies for wrapping a Rolling Stones song into a conference summary, one of the main things touted during presentations was “the cloud” and their ability to pull clinical, operational and financial dashboards together to monitor the impact of COVID on their organization and organize their actions. Focus over the last decade has been on the clinical (implementing EHRs), but it is now shifting to “digitizing operations” with a focus on finance and operations (planning, cost accounting, ERPs, etc.) as well as advanced analytics and data science capabilities to automate, gather insight, manage and predict. It is clear that the cloud has moved from a curiosity to a necessity for health systems, making this one of the biggest areas of investment for every health system over the next decade.

8. Make Price Transparency a Key Differentiator: One of the great lessons from Amazon (and others) is that you can make a lot of money when you make something easy to buy. While many health systems are skeptical of the value of the price transparency requirements, those that have a deep understanding of both their true cost of care and margins are using this as an opportunity to prove their value and accelerate their strategy to become consumer-centric. While there is certainly a level of risk, no business has ever been unsuccessful because they made their product easier to understand and access. Because healthcare is so opaque, there is an opening for healthcare providers to build trust, which is their main asset, and volume, which is their main source of revenue, by becoming stunningly easy to do business with. This may be tough sledding for some as this isn’t something healthcare providers are known for. To understand this, spend a few minutes on Tesla’s website vs. Ford’s. The concept of making something easy, or hard, to buy will become crystal clear as fast as a battery-driven car can go from zero to 60.

9. Make Care More Affordable: This represents the biggest challenge for hospitals and health systems as they ultimately need to be on the right side of this issue or the trust that they have will disappear and they will remain very vulnerable to outside players. All are investing in advanced cost accounting systems (time-driven costing, physician costing, supply, and drug costing) to truly understand their cost and use that as a basis to price more strategically in the market. Some are dropping prices for shoppable services and using loss leader strategies to build their brand. The incoming Secretary of Health and Human Services has a strong belief regarding the accountability of health systems to be consumer centric. The health systems that understand this are working to get ahead of this issue as it is likely one of their most significant threats (or opportunities) over the next decade. This means getting all care to the right site of care, evaluating every opportunity to improve, and getting serious about eliminating the need for expensive care through building healthy communities. If you’re worried about Wal-Mart or Amazon, this is your secret weapon to keep them on the sideline.

10. Scale = Survival: One of the big lessons here is that the strong got stronger, the weak got weaker. For the strong, many have been able to “snapback” in financial performance because they were resilient. They were able to designate COVID-only facilities, while keeping others running at a higher capacity. To be clear, while most health systems are going to get to the other side and are positioned better than ever, there are many others that will continue to struggle for years to come. According to our data at Strata, we see 25 percent operating at negative margins right now and another 50 percent just above breakeven. They key to survival moving forward, for those that don’t have a captive market, will be scale. If this pandemic proved one thing relative to the future of health systems it is this — scale equals survival. 

When Will We Return to Normal?

Based on what the projections that these health systems shared, the “new normal” for health systems for the first half of 2021 will be roughly 95 percent of prior year inpatient volume with a 20 percent year-over-year drop in ED volume and a drop of 10-15 percent in observation visits. So, the pain will continue, but given the adjustments that were already made in 2020, it looks like they will be able to manage through COVID effectively. While there will be a pickup in the second half of 2021, the safe bet is that a “return to normal” pre-COVID volumes likely won’t occur until 2022. And there are some who believe that some of the volume should have never been there to begin with and we might see a permanent shift downward in ED volume as well as in some other areas.

With that said, I’ll steal a quote from Bert Zimmerli, the CFO of Intermountain Healthcare, who said, “Normal wasn’t ever nearly good enough in healthcare.” In that spirit, the goal should be to not return to normal, but rather to use this moment as an opportunity to take the positive changes driven by COVID — from technology to processes to areas of focus to a sense of responsibility — and make them permanent.

Thanking Our “Healthcare Heroes”

We’ll never see another 2020 again, hopefully. With that said, one of the silver linings of the year is everything we learned in healthcare. The most important lesson was this — in healthcare there are literally heroes everywhere. To each of them, I just want to say “thank you” for being there for us when we needed you the most. We should all be writing love letters to those on the front line who risked their lives to save others. Our nation’s healthcare system has taken a lot of criticism through the years from those on the outside, often with a blind eye to how things work in practice vs. in concept. But this year we all got to see first-hand what’s happening inside of healthcare — the heroic work of our healthcare providers and those who support them. 

They faced the worst crisis in the history of healthcare. They responded heroically and were there for our families and friends.

They proved that healthcare is too vital to fail. They proved that healthcare is pandemic-proof.

Thank you to our healthcare heroes.

Hospital buy-ups of physician practices under fresh FTC scrutiny

FTC takes tech scrutiny to heart of Silicon Valley

Dive Brief:

  • The Federal Trade Commission sent orders to six health insurance companies to obtain patient-level claims data for inpatient, outpatient, and physician services from 2015 to 2020, the agency said Thursday.
  • The FTC wants to figure out how hospitals’ acquisitions of physician practices has affected competition.  
  • The agency sent orders to some of the nation’s largest insurance companies, including UnitedHealthcare, Anthem, Aetna, Cigna, Florida Blue and Health Care Service Corporation.

Dive Insight:

This action is part of a larger effort underway at the agency to consider new questions and areas of study to help it understand the ultimate impact of mergers. The hope is that those studies will yield evidence to better equip the agency to legally challenge mergers in the future. 

Health economists cheered the news online following the FTC’s Thursday’s announcement about studying physician practice buy-ups. 

Martin Gaynor, former director of FTC’s Bureau of Economics, tweeted: “This is a big deal – a huge # of physician practices are now owned by hospitals.” Gaynor is a health economist at Carnegie Mellon.

“Important step to advance FTC’s understanding of the market and could improve their ability to win cases,” Emily Gee, a health economist at the Center for American Progress, tweeted.

In the orders, the FTC asks the insurers for data such as the total billed charges of all health providers, total deductibles, copays and coinsurance paid by the patient. It also asks for data tied to each inpatient admission and outpatient and physician episodes during the time period in question, which will likely result in a barrage of data for the agency to review.   

“The study results should aid the FTC’s enforcement mission by providing much more detailed information than is currently available about how physician practice mergers and healthcare facility mergers affect competition,” the agency said in a statement. 

This area of study expands the agency’s current work. One area already of interest within this broader retrospective merger review program is the scrutiny of labor markets. 

The agency has traditionally focused on how healthcare tie-ups affect prices. But the agency has signaled that it is increasingly interested in how mergers and acquisitions ultimately affect workers’ wages, including nurses.

One area of concern for the FTC is states’ willingness to greenlight COPAs, or certificates of public advantage (COPAs), which essentially shield mergers from federal antitrust regulators in exchange for prolonged state oversight.

In 2019, the agency sent orders to five insurance companies seeking data to study the impact of COPAs.  

Drugmakers sue HHS over 340B advisory opinion in feud over contract pharmacy access

Hospital associations sue HHS over 340B enforcement

Drug companies AstraZeneca, Eli Lilly and Sanofi filed separate lawsuits seeking to preserve their ability to restrict offering 340B-discounted drugs to contract pharmacies.

The lawsuits, filed Tuesday in different federal courts, seek to get rid of an advisory opinion filed by the Department of Health and Human Services’ (HHS’) general counsel that says drug companies must offer 340B drugs to contract pharmacies, which are third-party entities that dispense drugs on behalf of hospitals participating in the program.

The drug companies argue that the advisory opinion contracts the statute for the 340B program, which requires manufacturers to offer discounted products to safety net hospitals and other providers in exchange for participation in Medicare and Medicaid.

“The statute, on its face, does not require manufacturers to recognize any contract pharmacies, much less unlimited contract pharmacies,” the legal filing from AstraZeneca said.

AstraZeneca wants a federal court to declare the advisory opinion didn’t follow proper procedure and exceeded HHS’ statutory authority. The manufacturer also wants a court to declare that companies are not required to offer 340B discounts to contract pharmacies.

The lawsuits come less than a week after the American Hospital Association (AHA) and five other groups and three individual systems sent letters to the drug companies that have halted or restricted sales to contract pharmacies. They wanted the drugmakers to reinstate sending the discounted products to their pharmacies and reimburse facilities for any damages.

AHA and several groups sued HHS to get the agency to clamp down on the drug manufacturers’ moves.

AstraZeneca, Eli Lilly, Novartis, Novo Nordisk, Sanofi and United Therapeutics have taken a range of actions to clamp down on sales to contract pharmacies, which a majority of 340B-covered entities use.

The companies have argued that the discounts do not filter down to patients, but hospital and advocacy groups charge that the discounts are vital, especially as safety net providers operate on thin margins.

“Make no mistake: the boom in contract pharmacies has been fueled by the prospect of outsized profit margins on 340B discounted drugs,” AstraZeneca argued in its court filing.

Pandemic propels health systems to mull insurer acquisitions, partnerships

4 Reasons Strategic Partnerships are Important for Business - Glympse

Nearly a year after the first confirmed case of COVID-19 in the U.S., some of the nation’s largest health systems made a case for the need to accelerate toward value-based arrangements and potentially acquiring or partnering with health plans to become an integrated system.

Amid new records for deaths and cases from the novel coronavirus, executives gathered virtually for J.P. Morgan’s 39th annual healthcare conference, which typically draws prominent healthcare leaders to San Francisco at the start of each year.

The pandemic has been a heavily discussed topic during the digital gathering. One theme has been health systems either acknowledging they are on the hunt for health insurer acquisitions and partnerships or advocating for such arrangements as result of the challenges.

Anu Singh, managing director and the leader of the mergers, acquisitions and partnerships practice at consultancy Kaufman Hall, said it’s a natural migration for health systems, though it does come with some risk.

“If you want to move into the realm of being a population health manager, and take greater responsibility for your patient bases, you’re going to have to be thinking about maintaining their health,” Singh said. “And that’s typically something that, at least traditionally and historically, has been driven a little bit more by the health plan.”

For Utah’s Intermountain Healthcare, the lessons of the pandemic are clear: The industry needs to move away from a system that rewards volume. Intermountain is a fully integrated system that manages both providers and an insurance unit.

“It is becoming increasingly apparent that systems that are well integrated, especially systems that understand how to take risks, have prospered in the face of the terrible burden, caring for people in the midst of the first pandemic in 100 years,” Intermountain CEO Marc Harrison said Monday.

From his vantage point, Harrison said it has been interesting to watch the consternation around telehealth visits.

“Lots of folks who are really still caught in the volume-based system are actively switching patients back from tele- or distance to in-person visits so they can maximize revenue,” he said. “I understand that. But that’s a really great example of poorly aligned incentives.”

Intermountain has managed to stay in the black as many other systems have struggled financially as a result of the pandemic driving down patient volumes. It reported net income of $167 million through the first nine months of 2020, compared with $919 million the year prior.

Another integrated system, Baylor Scott and White Health, the largest nonprofit system in Texas, said such diversification has helped buoy its finances as hospital and clinic operations bottomed out in the spring due to the virus.

Baylor Scott and White illustrated this point by showing how operating income for its clinical segment took a nosedive in the spring while operating income for its health plan remained relatively steady.

The theme of integrated health systems also seemed to be on the minds of investors. CommonSpirit Health executives were asked during their presentation if buying or creating a health plan was on their radar as the system has a sizable footprint of 140 hospitals across the country.

“I think this is a interesting question, one that of course we’ve discussed many times strategically,” CFO Daniel Morissette said, noting the system does have a number of regional plans. “At this time, we have no plan of having a national CommonSpirit branded plan.” However, Morissette said the system would consider a partnership opportunity.

On the other hand, Midwest-based Advocate Aurora Health said it is actively on the hunt for a potential insurer deal as part of its long-term strategy.

“We do believe that having health plan capability, not necessarily having our own, but partnering for health plan capability, is going to be critical to our success, and we are taking steps to do that,” CEO Jim Skogsbergh said during the virtual conference.

Kaufman Hall said in its latest report that it expects more payer-provider partnerships as a result of the pandemic. “Limitations on fee-for-service payment structures exposed by the pandemic may increase the number of payer-provider partnerships around new payment and care delivery models,” according to the report.

Singh of Kaufman Hall said it’s not surprising that some may lean more toward a partnership due to the risks of starting a new venture, especially an insurance unit that can have “catastrophic loss”. Systems with less experience of moving toward implementing value-based initiatives may be more vulnerable to such risk.

It’s why he thinks partnerships may be a good fit, at least at first. Payers and providers can work together to improve the health of certain populations and then share in the cost savings.

CommonSpirit, Blue Shield of California expand payment platform to 20 hospitals

Blue Shield of California Expands Collaboration with Dignity Health  Hospitals to Make Billing and Payment Easier for Patients, Providers |  State | ttownmedia.com

Chicago-based CommonSpirit and Blue Shield of California expanded a new billing program to 20 Dignity Health hospitals, the organizations said Jan. 11.

The Member Payments billing program aims to create faster and more transparent billing processes for Blue Shield of California members who receive care at Dignity facilities and owe money after their insurance is processed. CommonSpirit is the parent organization of Sacramento, Calif.-based Dignity. 

Under the program, Dignity can get a patient’s portion of a bill at the time of claim adjudication. Patients who receive care from a Dignity facility get a monthly bill from Blue Shield of California. Through that bill, patients can then pay for their cost-sharing amount in full or through installments. 

The program, announced in 2018, was launched in September 2019 by Dignity, CommonSpirit, Blue Shield of California and technology startup company Ooda Health. The program’s 12-month pilot started at two hospitals in Sacramento and grew to six hospitals by the end of the pilot year.

The addition of 20 Dignity hospitals comes after the process was found to streamline cost-sharing payments, resulting in a 92 percent satisfaction rate from patients who used the platform, the organizations said.

How Does the AstraZeneca COVID-19 Vaccine Compare to Pfizer’s and Moderna’s?

covid 19 vaccine

It’s cheaper, easier to distribute, and relies on very different tech than its competitors.

  • AstraZeneca’s COVID-19 vaccine has been approved for emergency use in the United Kingdom, India, and Mexico.
  • Unlike its competitors, AstraZeneca’s vaccine is a modified version of a common cold virus that spreads among chimpanzees.
  • This is the first vaccine of its kind to be approved for human use, but other companies are developing similar tech to fight COVID-19.

The United Kingdom became the first country to approve AstraZeneca’s COVID-19 vaccine for emergency use on Dec. 30, just weeks after Pfizer’s and Moderna’s vaccine candidates received a green light from the Food and Drug Administration in the United States. The approval is another promising sign in the global immunization rollout—especially because this option, developed by Oxford University and biopharmaceutical company AstraZeneca, could be key to reaching people in rural and underfunded areas.

Unlike its competitors, the AstraZeneca COVID-19 vaccine can be stored at higher temperatures, costs less per dose, and uses different technology to immunize people. Although the vaccine hasn’t been approved for use in the U.S. yet, it could reach arms stateside in February at the earliest, The New York Times reports. Here’s what we know about the vaccine so far, and how it stacks up against Pfizer’s and Moderna’s.

How does the AstraZeneca COVID-19 vaccine work?

AstraZeneca’s vaccine uses adenovirus-vectored technology. Translation: It’s a harmless, modified version of a common cold virus that usually only spreads among chimpanzees. This altered virus can’t make you sick, but it carries a gene from the novel coronavirus’ spike protein, the portion of the virus that triggers an immune response. This allows the immune system to manufacture antibodies that work against COVID-19, teaching your body how to respond should you become infected.

In other words, AstraZeneca’s vaccine mimics a COVID-19 infection without its life-threatening side effects, per a release from the company. The reason researchers chose a chimpanzee adenovirus is simple: The modified virus needs to be new to the people being vaccinated—otherwise, the body won’t create those all-important antibodies. Anyone could already have antibodies for a cold spread among humans, but far fewer people have been exposed to a cold spread among chimps.

The Pfizer-BioNTech and Moderna vaccines, meanwhile, rely on mRNA technology, which essentially introduces a piece of genetic code that tricks the body into producing COVID-19 antibodies, no virus required. All three vaccines require two shots spaced about a month apart. Although no adenovirus-vectored vaccine has been approved for human use before, companies like Johnson & Johnson, CanSino, and NantKwest are all working on their own versions.

How does the AstraZeneca vaccine compare to the Moderna and Pfizer vaccines?

Storage and distribution

AstraZeneca’s vaccine is the easiest to transport so far—it can be stored for up to six months between 36 and 46°F, normal refrigerator temperatures. The Moderna and Pfizer options, meanwhile, must be stored at subzero temperatures until they’re ready to be used, at -4°F and -94°F, respectively. (mRNA technology is relatively fragile compared to adenovirus-vectored tech, meaning it must be kept at much lower temperatures to remain effective and stable.)

AstraZeneca’s higher storage temperature could make distribution much easier. “A clinic, a nursing home, or even [regional] health departments may not have freezers that can hold things at -94°F,” says Kawsar Talaat, M.D., an infectious disease doctor, vaccine researcher, and assistant professor in the department of International Health at Johns Hopkins University. Being able to use a typical fridge “allows time for distribution, allows the vaccine time to get to more rural areas, [and allows vaccines] to be kept at a clinic for a longer period of time.”

Cost

The new vaccine also beats its competitors on price: AstraZeneca’s vaccine costs providers about $4 per dose, while Pfizer’s costs $20 and Moderna’s costs $33, Al Jazeera reports. These prices will most likely fluctuate as time goes on and the vaccines evolve.

Efficacy

The two mRNA vaccines have a slight edge in efficacy; both Pfizer and Moderna report being about 95% effective against COVID-19 after the second shot in clinical trials, while AstraZeneca has reported an average efficacy of 70%, and up to 90% if the dosing is adjusted. (For comparison, the annual flu shot is usually between 40 and 60% effective, per the CDC.)

Side effects

All three vaccines’ side effects are similar, including potential injection site pain and flu-like symptoms, including fever, fatigue, headaches, and muscle pain, which are to be expected as your immune system is primed.

Which COVID-19 vaccine is the best?

There’s no “best” vaccine option, as there’s not enough research to confirm that yet. Vaccines aren’t a silver bullet, especially as the pandemic rages on: They must be combined with masks, hand-washing, and social distancing to work as effectively as possible, per the CDC. No matter which COVID-19 vaccine becomes available to you first, you can feel confident in its ability to protect you, as long as you continue being cautious until positive cases, hospitalizations, and deaths are significantly reduced nationwide.

In the meantime, it’s likely “that all the manufacturers are working on making their vaccines more stable at easier-to-manage temperatures,” Dr. Talaat explains. As their formulations change, their pros and cons will, too.

For now, we can be thankful that AstraZeneca’s vaccine is nearing worldwide clearance. “The next generation of vaccines, like AstraZeneca’s, which is kept at refrigerator temperatures, is a major advancement,” Dr. Talaat says. “When you’re talking about distribution to the entire world, it’s much easier to do because we already keep vaccines cold. It’s a lot harder to keep things frozen.”

‘Shkreli Awards’ Shame Healthcare Profiteers

Lown Institute berates greedy pricing, ethical lapses, wallet biopsies, and avoidable shortages.

Greedy corporations, uncaring hospitals, individual miscreants, and a task force led by Jared Kushner were dinged Tuesday in the Lown Institute‘s annual Shkreli awards, a list of the top 10 worst offenders for 2020.

Named after Martin Shkreli, the entrepreneur who unapologetically raised the price of an anti-parasitic drug by a factor of 56 in 2015 (now serving a federal prison term for unrelated crimes), the list of shame calls out what Vikas Saini, the institute’s CEO, called “pandemic profiteers.” (Lown bills itself as “a nonpartisan think tank advocating bold ideas for a just and caring system for health.”)

Topping the list was the federal government itself and Jared Kushner, President’s Trump’s son-in-law, who led a personal protective equipment (PPE) procurement task force. The effort, called Project Airbridge, was to “airlift PPE from overseas and bring it to the U.S. quickly,” which it did.

“But rather than distribute the PPE to the states, FEMA gave these supplies to six private medical supply companies to sell to the highest bidder, creating a bidding war among the states,” Saini said. Though these supplies were supposed to go to designated pandemic hotspots, “no officials from the 10 hardest hit counties” said they received PPE from Project Airbridge. In fact, federal agencies outbid states or seized supplies that states had purchased, “making it much harder and more expensive” for states to get supplies, he said.

Number two on the institute’s list: vaccine maker Moderna, which received nearly $1 billion in federal funds to develop its mRNA COVID-19 preventive. It set a price of between $32 and $37 per dose, more than the U.S. agreed to pay for other COVID vaccines. “Although the U.S. has placed an order for $1.5 billion worth of doses at a discount, a price of $15 per dose, given the upfront investment by the U.S. government, we are essentially paying for the vaccine twice,” said Lown Institute Senior Vice President Shannon Brownlee.

Webcast panelist Don Berwick, MD, former acting administrator for the Centers for Medicare & Medicaid Services, noted that a lot of work went into producing the vaccine at an impressive pace, “and if there’s not an immune breakout, we’re going to be very grateful that this happened.” But, he added, “I mean, how much money is enough? Maybe there needs to be some real sense of discipline and public spirit here that goes way beyond what any of these companies are doing.”

In third place: four California hospital systems that refused to take COVID-19 patients or delayed transfers from hospitals that were out of beds. Wall Street Journal investigation found that these refusals or delays were based on the patients’ ability to pay; many were on Medicaid or were uninsured.

“In the midst of such a pandemic, to continue that sort of behavior is mind boggling,” said Saini. “This is more than the proverbial wallet biopsy.”

The remaining seven offenders:

4. Poor nursing homes decisions, especially one by Soldiers’ Home for Veterans in western Massachusetts, that worsened an already terrible situation. At Soldiers’ Home, management decided to combine the COVID-19 unit with a dementia unit because they were low on staff, said Brownlee. That allowed the virus to spread rapidly, killing 76 residents and staff as of November. Roughly one-third of all COVID-19 deaths in the U.S. have been in long-term care facilities.

5. Pharmaceutical giants AstraZeneca, GlaxoSmithKline, Pfizer, and Johnson & Johnson, which refused to share intellectual property on COVID-19, instead deciding to “compete for their profits instead,” Saini said. The envisioned technology access pool would have made participants’ discoveries openly available “to more easily develop and distribute coronavirus treatments, vaccines, and diagnostics.”

Saini added that he was was most struck by such an attitude of “historical blindness or tone deafness” at a time when the pandemic is roiling every single country.

Berwick asked rhetorically, “What would it be like if we were a world in which a company like Pfizer or Moderna, or the next company that develops a really great breakthrough, says on behalf of the well-being of the human race, we will make this intellectual property available to anyone who wants it?”

6. Elizabeth Nabel, MD, CEO of Brigham and Women’s Hospital in Boston, because she defended high drug prices as a necessity for innovation in an op-ed, without disclosing that she sat on Moderna’s board. In that capacity, she received $487,500 in stock options and other payments in 2019. The value of those options quadrupled on the news of Moderna’s successful vaccine. She sold $8.5 million worth of stock last year, after its value nearly quadrupled. She resigned from Moderna’s board in July and, it was announced Tuesday, is leaving her CEO position to join a biotech company founded by her husband.

7. Hospitals that punished clinicians for “scaring the public,” suspending or firing them, because they “insisted on wearing N95 masks and other protective equipment in the hospital,” said Saini. Hospitals also fired or threatened to fire clinicians for speaking out on COVID-19 safety issues, such as the lack of PPE and long test turnaround times.

Webcast panelist Mona Hanna-Attisha, MD, the Flint, Michigan, pediatrician who exposed the city’s water contamination, said that healthcare workers “have really been abandoned in this administration” and that the federal Occupational Safety and Health Administration “has pretty much fallen asleep at the wheel.” She added that workers in many industries such as meatpacking and poultry processing “have suffered tremendously from not having the protections or regulations in place to protect [them].”

8. Connecticut internist Steven Murphy, MD, who ran COVID-19 testing sites for several towns, but conducted allegedly unnecessary add-ons such as screening for 20 other respiratory pathogens. He also charged insurers $480 to provide results over the phone, leading to total bills of up to $2,000 per person.

“As far as I know, having an MD is not a license to steal, and this guy seemed to think that it was,” said Brownlee.

9. Those “pandemic profiteers” who hawked fake and potentially harmful COVID-19 cures. Among them: televangelist Jim Bakker sold “Silver Solution,” containing colloidal silver, and the “MyPillow Guy,” Mike Lindell, for his boostering for oleandrin.

Colloidal silver has no known health benefits and can cause seizures and organ damage. Oleandrin is a biological extract from the oleander plant and known for its toxicity and ingesting it can be deadly,” said Saini.

Others named by the Lown Institute include Jennings Ryan Staley, MD — now under indictment — who ran the “Skinny Beach Med Spa” in San Diego which sold so-called COVID treatment packs containing hydroxychloroquine, antibiotics, Xanax, and Viagra, all for $4,000.

Berwick commented that such schemes indicate a crisis of confidence in science, adding that without facts and science to guide care, “patients get hurt, costs rise without any benefit, and confusion reigns, and COVID has made that worse right now.”

Brownlee mentioned the “huge play” that hydroxychloroquine received and the FDA’s recent record as examples of why confidence in science has eroded.

10. Two private equity-owned companies that provide physician staffing for hospitalsTeam Health and Envision, that cut doctors’ pay during the first COVID-19 wave while simultaneously spending millions on political ads to protect surprise billing practices. And the same companies also received millions in COVID relief funds under the CARES Act.

Berwick said surprise billing by itself should receive a deputy Shkreli award, “as out-of-pocket costs to patients have risen dramatically and even worse during the COVID pandemic… and Congress has failed to act. It’s time to fix this one.”

14 health systems with strong finances

14 health systems with strong finances

Hospital Mergers, Acquisitions, and Affiliations | Case Study – RMS

Here are 14 health systems with strong operational metrics and solid financial positions, according to reports from Fitch Ratings, Moody’s Investors Service and S&P Global Ratings.

1. St. Louis-based Ascension has an “AA+” rating and stable outlook with Fitch and an “Aa2” rating and stable outlook with Moody’s. The system has a strong financial profile and a significant presence in several key markets, Fitch said. The credit rating agency expects Ascension will continue to produce healthy operating margins. 

2. Charlotte, N.C.-based Atrium Health has an “Aa3” rating and stable outlook with Moody’s and an “AA-” rating and stable outlook with S&P. Atrium and Winston-Salem, N.C.-based Wake Forest Baptist Health merged in October. The addition of the Winston-Salem service area and Wake Forest Baptist’s academic and research programs enhance Atrium’s position within the highly competitive North Carolina healthcare market, S&P said. 

3. Phoenix-based Banner Health has an “AA-” rating and stable outlook with Fitch and S&P. Banner’s financial profile is strong, even taking into consideration the market volatility that occurred in the first quarter of 2020, Fitch said. The credit rating agency expects the system to continue to improve operating margins and to generate cash flow sufficient to sustain strong key financial metrics. 

4. Dallas- based Baylor Scott & White Health has an “Aa3” rating and stable outlook with Moody’s. The system has strong liquidity and is the largest nonprofit health system in Texas, Moody’s said. The credit rating agency expects Baylor Scott & White Health to continue to benefit from its centralized operating model, proven ability to execute complex strategies and well-developed planning abilities. 

5. Newark, Del.-based ChristianaCare Health System has an “Aa2” rating and stable outlook with Moody’s. The health system has extensive clinical depth and includes Delaware’s largest teaching hospital, Moody’s said. The system’s strong market position will help it resume near pre-pandemic level margins in fiscal year 2021, according to Moody’s. 

6. Falls Church, Va.-based Inova Health System has an “Aa2” rating and stable outlook with Moody’s. The system has a strong financial profile, and Moody’s expects Inova’s balance sheet to remain exceptionally strong. 

7. Philadelphia-based Main Line Health has an “AA” rating and stable outlook with Fitch. The credit rating agency expects the system’s operations to recover after the COVID-19 pandemic and for it to resume its track record of strong operating cash flow margins. 

8. Rochester, Minn.-based Mayo Clinic has an “Aa2” rating and stable outlook with Moody’s. The system has an excellent reputation and generates strong patient demand at its academic medical centers in Minnesota, Arizona and Florida, Moody’s said. The credit rating agency said strong patient demand and proactive expense control measures would likely fuel good results for Mayo for the fiscal year that ended Dec. 31.

9. Midland-based MidMichigan Health has an “AA-” rating and stable outlook with Fitch. The system generated healthy operational levels through fiscal year 2020, and Fitch expects it to continue generating strong cash flow. 

10. Chicago-based Northwestern Memorial HealthCare has an “Aa2” rating and stable outlook with Moody’s. The health system had strong pre-COVID margins and liquidity, Moody’s said. The credit rating agency expects the system to maintain strong operating cash flow margins. 

11. Winston-Salem, N.C.-based Novant Health has an “AA-” rating and stable outlook with Fitch. The system has strong margins and each of its markets have met or exceeded budgeted expectations over the past four years, Fitch said.  

12. Albuquerque, N.M.-based Presbyterian Healthcare Services has an “AA” rating and stable outlook with Fitch. The health system has a strong financial profile and a leading market position in Albuquerque and throughout New Mexico, Fitch said. The credit rating agency said it believes Presbyterian Healthcare Services is more resilient to pandemic disruptions than most other hospital systems. 

13. Renton, Wash.-based Providence has an “Aa3” rating and stable outlook with Moody’s. Providence has a large revenue base and a leading market share in most of its markets, according to Moody’s. The credit rating agency expects the system’s operations to improve this year. 

14. Livonia, Mich.-based Trinity Health has an “AA-” rating and stable outlook with Fitch. The rating is driven by Trinity’s national size and scale, with significant market presence in several states, Fitch said. The credit rating agency expects the system’s operating margins to improve in the long term.