For Cancer Centers, Proton Therapy’s Promise Is Undercut by Lagging Demand

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In March 29, Georgetown University Hospital opened a proton-therapy cancer unit that is expected to treat about 300 patients a year at premium prices using what its proponents promote as the most advanced radiology for attacking certain tumors.

At the facility’s heart is a 15-ton particle accelerator that bombards malignancies with beams of magnet-controlled protons designed to stop at tumors rather than shoot through them like standard X-ray waves, mostly sparing healthy tissue.

With the addition, Georgetown joined a medical arms race in which hospitals and private investors, sometimes as partners, are pumping vast sums of money into technology whose effectiveness, in many cases, has not yet been shown to justify its cost.

Although most of the proton centers in the United States are profitable, the industry is littered with financial failure: Nearly a third of the existing centers lose money, have defaulted on debt or have had to overhaul their finances.

For Georgetown officials, it was still a bet worth making.

“Every major cancer center that has a full service radiation oncology department should consider having protons,” said Dr. Anatoly Dritschilo, the chief of the hospital’s radiation medicine department.

Many have. There are 27 proton therapy centers now operating in the United States. Nearly as many are being built or planned. Georgetown’s, which vies for patients with a struggling unit in Baltimore, will soon compete with another in Washington and one in Northern Virginia.

But about 30 years after the Food and Drug Administration first approved proton therapy for limited uses, doctors often hesitate to prescribe it and insurers often will not cover it.

That means there simply may not be enough business to go around.

“The biggest problem these guys have is extra capacity,” said Dr. Peter Johnstone, the chief executive at Indiana University’s proton center before it closed in 2014, in need of an upgrade but lacking the potential patients to pay for it. “They don’t have enough patients to fill the rooms.”

At Indiana, he added, “we began to see that simply having a proton center didn’t mean people would come.”

Proton therapy was initially used to treat tumors in delicate areas where surgery was not an option — near the eye, for example — and in children, and it remains the best choice in such cases.

But its pinpoint precision has not been shown to be more effective against breast, prostate and other common cancers. One recent study of lung-cancer patients found no significant difference in outcomes between people receiving proton therapy and those getting a focused kind of traditional radiation, which is much less expensive. Other studies are still underway.

“Commercial insurers are just not reimbursing” for proton therapy except for pediatric cancers or tumors near sensitive organs, substantially limiting the potential treatment pool, said Brandon Henry, a medical device analyst for RBC Capital Markets.

Medicare covers proton therapy more readily than private insurers, but relying solely on Medicare patients does not allow backers of some treatment centers to recoup their investments, much less turn a profit, analysts said.

For a glimpse of what can go wrong, consider the Maryland Proton Treatment Center in Baltimore, which is affiliated with the University of Maryland Medical Center.

Opened two years ago with a “Survivor”-themed party and lofty financial goals, the unit is already undergoing a restructuring that is inflicting large losses on its outside investors, including wealthy families from Texas.

Before the Baltimore center opened, those behind it saw their market stretching from Philadelphia to Northern Virginia and encompassing 20,000 potential patients a year. Officials predicted the unit would treat “north” of its current rate of about 85 patients a day, said Jason Pappas, the acting chief executive.

How far north?

“Upper Canada,” said Mr. Pappas, declining to provide hard numbers. He said the center would break even by the end of the year.

The patient shortage might not be a good sign for projects in the pipeline, but it is encouraging for those who take a dim view of proton therapy’s rise.

“Something that gets you the same clinical outcomes at a higher price is called inefficient,” said Dr. Ezekiel Emanuel, a health policy professor at the University of Pennsylvania, which operates one proton center and is developing another. “If investors have tried to make money off the inefficiency, I don’t think we should be upset that they’re losing money on it.”

The proton therapy boom effectively began in 2001, when Massachusetts General Hospital in Boston opened a proton unit, raising the profile of what was a little-used technology. By 2009, developers were flocking to the field, lured by the belief that insurers would cover treatment bills that run to $48,000 and more.

The treatment held particular promise for prostate cancer patients, given the potential side effects, including incontinence and impotence, associated with traditional radiation.

But a 2013 Yale study found little difference in those conditions among patients getting proton therapy versus those getting traditional radiation. Within a year, several insurers stopped covering the therapy for prostate cancer or were reconsidering it.

Indiana University’s center was the first to close. Before long, others were in dire financial straits.

California Protons in San Diego, which was once associated with the Scripps Health hospital network, filed for bankruptcy protection last year. An abandoned proton project in Dallas is in bankruptcy as well.

In Virginia, the Hampton University Proton Therapy Institute has lost money for at least five straight years, financial statements show. In Knoxville, Tenn., the Provision CARES Proton Therapy Center lost $1.7 million last year on revenue of $23 million, $5 million short its target.

Centers in Somerset, N.J., and Oklahoma City run by privately held ProCure have defaulted on their debts, according to the investment firm Loop Capital. A center associated with Seattle Cancer Care Alliance, a hospital consortium, in Washington State lost $19 million in the 2015 fiscal year before restructuring its debt, documents show. A center near Chicago lost tens of millions of dollars before its own restructuring as part of a 2013 sale to hospitals now affiliated with Northwestern Medicine, according to regulatory documents.

Scott Warwick, executive director of the National Association for Proton Therapy, a trade group, blames “over-exuberant expectations” for the problems.

“I think maybe that’s what went on with some of the centers,” he said. “They thought the technology would grow faster than it has.”

The industry is using advertising and marketing to urge patients and lawmakers to press insurers to pay for proton therapy. Oklahoma recently passed a law requiring that insurers evaluate the treatment on an equal basis with other therapies. Virginia has considered similar legislation. At the National Proton Conference in Orlando last year, a full day was devoted to winning over insurers. The Alliance for Proton Therapy Access, another industry group, has software for generating letters to the editor demanding coverage.

Until the insurance outlook changes, those developing new proton centers have scaled back their ambitions. Georgetown’s unit, for example, cost $40 million and has a single treatment room. The one in Baltimore cost $200 million and has five.

Following the Georgetown model, with one or two treatment rooms, should allow centers in major metropolitan areas to make money, said Prakash Ramani, a senior vice president at Loop Capital, which is involved with projects in Alabama, Florida and elsewhere.

Not all the new units are small. In some cases, hospitals are joining forces to make the finances work. In New York, Memorial Sloan Kettering, Mount Sinai Health System and Montefiore Health System have teamed up on a $300 million unit with an 80-ton particle accelerator and four treatment rooms that is set to open in East Harlem next year.

Officials, counting on the New York area’s vast population and referrals from three major health systems, expect the center to treat 1,400 people a year. They will soon learn whether their project fares better than the Indiana proton center did.

“What places need now are patients,” Dr. Johnstone, that center’s former chief, said, “a huge supply of patients.”

 

 

7 AREAS CFOS MUST ADDRESS FOR ORGANIZATIONAL VIABILITY

https://www.healthleadersmedia.com/finance/7-areas-cfos-must-address-organizational-viability?utm_source=silverpop&utm_medium=email&utm_campaign=20180613_HLM_SPOTLIGHT_Cost-Containment%20(1)&spMailingID=13684315&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1421195534&spReportId=MTQyMTE5NTUzNAS2

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An upcoming CFO roundtable provides a peer-sharing platform to learn best practices for advancing a healthcare organization’s financial health.

Today’s healthcare financial leaders face escalating costs, quality improvement issues, difficult reimbursement environments, an increasingly complex service portfolio, and risk management associated with performance contracting.

Pressure mounts on CFOs to ensure their organizations remain viable as they deal with these issues, which makes gleaning proven strategies from colleagues imperative.

Four dozen executives will convene at a private roundtable forum during the 2018 HealthLeaders Media CFO Exchange, August 8–10 in Santa Barbara, California, to
address top-of-mind concerns.

In pre-event planning calls, Exchange participants—representing integrated health systems, academic medical centers, community hospitals, and safety net providers from across the U.S.—want to know how others are taking on risk, improving costs, addressing consumerism, and capturing additional reimbursement.

During the two-day event, a series of moderated roundtables will explore areas of special interest expressed by CFOs, including the following:

1. Cost improvement

Since costs are increasing at rates higher than reimbursement, how does a CFO drive cost performance to maintain sufficient operating margins? How are systems successfully leveraging scale to rationalize administrative and support services?

2. Proliferation of mergers and acquisitions

How can an independent organization survive in this environment? Should it consider other affiliations? For those involved in new entities, how are leaders achieving value?

3. Taking on risk

How does an organization prepare to take on and reduce risk, and when does an organization know that it is ready? How can CFOs build reserves to offset unexpected outlays?

4. Enhancing revenue cycle performance

How can financial leaders improve payer terms, reduce denials, ensure payer compliance, and improve clinical documentation? What are effective ways to deploy new workflow technologies in patient accounts?

5. Performance-based contracts

How are organizations engaging medical staff to reduce the cost of care and improve outcomes?

6. Medical group employment

How does a health system minimize provider subsidies for employed physicians and improve practice performance?

7. Medical consumerism

How can healthcare organizations compete against disruptors in the growing environment of consumer choice? What are creative ideas for meeting consumer demand without adding cost?

Additional information will be shared during the two-day gathering. The CFO Exchange is one of six annual HealthLeaders Media events for healthcare thought leadership and networking.

Revenue cycle and patient financial experience

Recently, HealthLeaders Media hosted a Revenue Cycle Exchange, which brought together 50 executives to discuss improving the patient financial experience; maximizing reimbursement; managing claims denials; technology adoption and data analytics; revenue cycle optimization; and creating a leaner, more effective team.

Noting how consumerism is influencing bill payment and giving rise to the patient voice, leaders are seeking ways to make paying easier. Consumer feedback suggested easy-to-understand and consolidated statements.

“We have a single business office with Epic, so regardless of where a patient gets their services, they get one bill from our organization,” says Cassi Birnbaum, director of health information management and revenue integrity at UC San Diego Health.

“We’ve also created a position for a patient experience director, so any complaint goes through that unit and they’ll contact one of my supervisors to ensure the patient gets the answers they need. That’s helped a lot and provides a one-stop, concierge, patient-facing experience to help ensure the patient’s balance is paid,” Birnbaum says.

Providing estimates and leveraging technology are also helpful for fostering patient payments. More health systems are promoting MyChart, an online tool for patients to manage their health information, as well as kiosks in key locations.

“We have a patient portal in which you can see any outstanding balance at a hospital or clinic and decide what you want to pay today,” says Mary Wickersham, vice president of central business office services at Avera in Sioux Falls, South Dakota.

“Patients can also extend their payments since we have a hyperlink that goes to the extended loan program if needed. With kiosks at our clinics, patients pull out their credit card and complete their copay. Nobody asks; they just automatically do it,” she says.

Staffing

Front- and back-end staff play an integral role in calculating payment estimates, collecting dollars in advance of procedures and tests, and communicating the often-puzzling connection between hospital charges for physician practice and provider-based department patients.

“One of our big challenges now is we’re bringing a lot of that back-end work to the front,” says Terri Etnier, director of system patient access at Indiana University Health in Bloomington, Indiana.

Centralizing processes

As facilities move toward centralized scheduling systems to manage reimbursement, some facilities are centralizing coding and billing processes.

“We don’t have a full comprehensive preregistration function for our clinics mainly due to volume. We’re piloting a preregistration group for our clinic visits to work accounts ahead of time since we are continuing to work toward automation,” says Katherine Cardwell, assistant vice president at Ochsner Health System in New Orleans.

“We have kiosks in some of our clinics. Epic has an e-precheck function where we can now do forms. You can sign forms on your phone, and make your payment and your copayment ahead of time. And you can actually get a barcode that you can just scan when you get to the clinic,” Cardwell says.

Paying more and getting less: As hospital chains grow, local services shrink

https://www.statnews.com/2018/01/24/hospital-chains-services-consolidation/

When most hospitals close, it’s plain to see. Equipment and fixtures are hauled out and carted away. Doctors and nurses leave and buildings are shuttered, maybe demolished.

But another fate befalling U.S. hospitals is almost invisible. Across the country, conglomerates that control an increasing share of the market are changing their business models, consolidating services in one regional “hub” hospital and cutting them from others.

In recent years, hospitals across the country have seen their entire inpatient departments closed — no patients staying the night, no nursery, no place for the sickest of the sick to recover. These facilities become, in essence, outpatient clinics.

Hospital executives see these cuts as sound business decisions, and say they are the inevitable consequence of changes in how people are using medical services. But to patients and local leaders who joined forces with these larger health networks just years ago, they feel more like broken promises: Not only are they losing convenient access to care, their local hospitals are also getting drained of revenue and jobs that sustain their communities.

“It’s not even just betrayal. It’s disgust, frankly,” said Mariah Lynne, a resident of Albert Lea, Minn., where Mayo Clinic is removing most inpatient care and the birthing unit from one of its hospitals. “Never would I have expected a brand of this caliber to be so callous.”

In 2015, the most recent year of data, these service reductions accounted for nearly half of the hospital closures recorded around the country, according to the Medicare Payment Advisory Commission. (By MedPac’s definition, the loss of inpatient wards is equivalent to closure.) These data do not capture more discreet closures of surgical and maternity units that are also happening at local hospitals.

And the trend doesn’t just affect nearby residents. It represents a slow-moving but seismic shift in the idea of the community hospital — the place down the street where you could go at any hour, and for any need. Does the need for that hospital still exist, or is it a nostalgic holdover? And if it is still needed, is it economically viable?

The eye of the storm

The effort to scale back inpatient care is occurring within some of the nation’s most prestigious nonprofit hospitals.

Mayo Clinic announced last summer that it would cease almost all inpatient care at its hospital in Albert Lea. The health network said it would keep the emergency department open, but send most other patients to Austin, 23 miles east.

In Massachusetts, sprawling Partners HealthCare said it will shut the only hospitalin Lynn, a city of 92,000 people near Boston, and instead direct patients to its hospital in neighboring Salem. Only urgent care and outpatient services will remain in Lynn.

And in Ohio, Cleveland Clinic has made similar moves. In 2016, it closed its hospital in Lakewood, a densely packed Cleveland suburb. It is replacing the hospital with a family health center and emergency department.

The cuts follow a period of rapid consolidation in the health care industry. Of the 1,412 hospital mergers in the U.S. between 1998 and 2015, nearly 40 percent occurred after 2009, according to data published recently in the journal Health Affairs.

As large providers have expanded their networks, they have also gained inpatient beds that are no longer in demand — thanks to improved surgical techniques and other improvements that are shortening hospital stays. Hence the closures.

But the hollowing-out of historic community hospitals has surfaced fundamental tensions between providers and the cities and towns they serve. Residents are voicing frustration with large health networks that build expensive downtown campuses, charge the highest prices, and then cut services in outlying communities they deem unprofitable.

Health scholars also note a growing dissonance between the nonprofit status of these hospitals and their increasing market power. While the nonprofits continue to claim tens of millions of dollars a year in tax breaks to serve the sick and vulnerable, some are functioning more like monopolies with the clout to shift prices and services however they wish.

“These providers say they are worth the high price and that in the American system, if you have a reputation for excellence, you deserve higher fees,” said Dr. Robert Berenson, a senior fellow at the Urban Institute. “My response to that would be, if we had a well-functioning market, that might make some sense. But we don’t.”

Changing demand among patients

The financial upheaval in community hospitals is driven by sweeping changes in the delivery of care. Procedures and conditions that once required lengthy hospitalizations now require only outpatient visits.

At Mayo Clinic, Dr. Annie Sadosty knows this evolution well because it roughly traces her career. She uses appendectomies as an example. Twenty-five years ago, when she was in medical school, the procedure was performed through a 5-inch incision and resulted in a weeklong hospitalization.

Today, the same procedure is done laparoscopically, through a much smaller incision, resulting in a recovery time of about 24 hours. “Some people don’t even stay in the hospital,” Sadosty said.

Something similar could be said for a wide range of medical procedures and services — from knee replacements to the removal of prostate glands in cancer patients. Hospital stays are either being eliminated or reduced to one or two days. And patients who were once routinely admitted for conditions like pneumonia are now sent home and managed remotely.

“Hospitals that used to be full of patients with common problems are no longer as full,” said Sadosty, an emergency medicine physician at Mayo and regional vice president of operations. “It’s been a breakneck pace of innovation and change that has led to a necessary evolution in the way that we care for people.”

That evolution has cratered demand for inpatient beds. In 2017, the Medicare Payment Advisory Commission noted that hospital occupancy is hovering around 62 percent, though the number of empty beds varies from region to region.

In Albert Lea, Mayo administrators said the changes at the hospital will only impact about seven inpatients a day. Currently, caring for those patients requires nursing staff, hospitalists, and other caregivers, not to mention overhead associated with operating a hospital around the clock. The financial result is predictable: Hospital executives reported that jointly Albert Lea and Austin hospitals have racked up $13 million in losses over the last two years.

With inpatient demand declining, hospital administrators decided to consolidate operations in Austin. The decision meant the removal of Albert Lea’s intensive care unit, inpatient surgeries, and the labor and delivery unit. Behavioral health services will be consolidated in Albert Lea.

Cleveland Clinic described similar pressures. Dr. J. Stephen Jones, president of the clinic’s regional hospital and family health centers, said use of inpatient beds has declined rapidly in Lakewood, dropping between 5 and 8 percent a year over the last decade. By 2015, 94 percent of visits were for outpatient services — a change that was undermining financial performance. The hospital lost about $46.5 million on operations that year, according to the clinic’s financial statements, and its aging infrastructure was in need of repair.

“Hospitals are very expensive places to run,” Jones said. “Lakewood was losing money on an operating basis for at least five years” before this decision was made.

Closures spark fierce protests

But the service cuts in Albert Lea, Lynn, and Lakewood — backed by nearly identical narratives from hospital executives — provoked the same reaction from the communities surrounding them.

Outrage.

Residents accused the hospital chains of putting their bottom lines above the needs of patients. Even if these individual hospitals were losing money, they said, nonprofits have an overriding mission to serve their communities.

“Why is profit such a priority, and more of a priority than the Hippocratic oath?” said Kevin Young, a spokesman for Save Lakewood Hospital, a group formed to oppose Cleveland Clinic’s removal of inpatient services. “Why are we allowing this to happen?”

The fight over Lakewood Hospital has persisted for more than three years, spawning lawsuits, an unsuccessful ballot referendum to keep the hospital open, and even a complaint filed by a former congressman to the Federal Trade Commission. None has caused Cleveland Clinic to reverse course.

Meanwhile, in Albert Lea, opponents to the service cuts have taken matters into their own hands: With Mayo refusing to back down, they are hunting to bring in a competitor.

A market analysis commissioned by Albert Lea’s Save Our Hospital group concluded that a full-service hospital could thrive in the community. The report included several caveats: A new provider would need to attract new physicians and capture market share from Mayo, a tall order in a region where Mayo is the dominant provider.

But members of the group said the findings directly contradict Mayo’s explanations to the community. They argue that, far from financially strained, the health system is simply trying to increase margins by shifting more money and services away from poorer rural communities.

“They don’t care what happens in Albert Lea,” said Jerry Collins, a member of the group. “Mayo cares what happens with its destination medical center.” He was referring to Mayo’s $6 billion project — funded with $585 million in taxpayer dollars — to expand its downtown Rochester campus and redevelop much of the property around it.

Sensitivity to Mayo’s service reductions is heightened by its control of the market in Southeastern Minnesota. It is by far the largest provider in the region and charges higher prices than facilities in other parts of the state. A colonoscopy at Mayo’s hospital in Albert Lea costs $1,595, compared to $409 at Hennepin County Medical Center in Minneapolis, according to Minnesota HealthScores, a nonprofit that tracks prices. The gap is even bigger for a back MRI: $3,000 in Albert Lea versus $589 at Allina Health Clinics in Minneapolis.

“All of Southeast Minnesota is feeling the domination of one large corporation,” said Al Arends, who chairs fundraising for Save Our Hospital. “They are ignoring the economic impact on the community and on the health care for patients.”

The community’s loud resistance has drawn the attention of the state’s attorney general and governor, as well as U.S. Rep. Tim Walz, who has begun a series of “facilitated dialogues” between Mayo and its opponents in Albert Lea.

So far, the dialogue has failed to forge a compromise. Mayo is proceeding with its plans. It has relocated the hospital’s intensive care unit to Austin, and inpatient surgeries and labor and delivery services are planned to follow.

Mayo executives reject the notion that they are abandoning Albert Lea or compromising services. The hospital plans to renovate the Albert Lea cancer wing and beef up outpatient care, improvements executives say have gotten lost amid the criticism.

As for inpatient care, they say, Mayo must consider quality and safety issues. With the hospital in Albert Lea only admitting a handful of patients a day, caregivers’ skills are likely to diminish, potentially undermining quality. They also cited recruiting challenges.

“It’s difficult to outfit both [Albert Lea and Austin] hospitals with all the incumbent equipment, expertise, multidisciplinary teams, and nursing staff,” vice president Sadosty said. “This is one way we can preserve and elevate care, and do it in an affordable way so our patients have access to high-quality care as close to their homes as possible.”

A strained system

Efforts to regionalize medical services also pose a new challenge: Can hospitals transport patients fast enough — and coordinate their care well enough — to ensure that no one falls through the cracks?

It is a question that will face stroke victims and expectant mothers who now must drive greater distances, sometimes in treacherous conditions, to make it to the hospital on time.

In Massachusetts, Partners HealthCare will face that test as it moves inpatient and emergency care from Union Hospital in Lynn to North Shore Medical Center in Salem. The hospitals are less than 6 miles apart. However, the short distance belies the difficulty of coordinating service across it.

Ambulances will have fewer options in emergencies. And if residents drive themselves to the wrong place in a panic, precious time gets wasted.

Dr. David Roberts, president of North Shore Medical Center, said the health system is working to educate patients to ensure that they go to the correct facility. He added that Partners already conducts risk assessments of patients with severe medical problems, and transfers them to hospitals with higher-level care when necessary.

In cases of suspected stroke, Roberts said, Partners employs a telemedicine program in which patients who arrive in its emergency rooms are examined by physicians at Massachusetts General Hospital in Boston. “They instantly, based on imaging, can decide which patient might benefit from having a clot pulled out of an artery in their head,” Roberts said. “They can say, ‘Yeah, this patient needs to be in our radiology suite in the next 30 minutes, and they make that happen.”

Still, opponents of the closure say it raises a broader concern about whether Partners’s actions are driven by a financial strategy to shift care away from low-income communities with higher concentrations of uninsured patients and those on Medicaid, which pays less for hospital services than commercial insurers. Union Hospital serves a largely low-income population.

“Why don’t we see these cuts across the Partners system? Why are we only seeing it in Lynn?” said Dianne Hills, a member of the Lynn Health Task Force. “Are we moving into a world where you have two systems of care — one for the poor and the old, and another for the affluent?”

Roberts said the consolidation at North Shore Medical Center in Salem has nothing to do with the income level of population in Lynn. He said the hospitals serve “identical” mixes of patients with government and commercial insurances.

“Our payer mix at both hospitals is adverse,” he said. “And despite that, Partners invested $208 million” to support the expansion of North Shore Medical Center.

Roberts acknowledged that the closure of the hospital in Lynn will have a negative impact on the city’s economy. But he said construction of a $24 million outpatient complex will mitigate some of that damage. The facility is expected to open in 2019. “It doesn’t take away the sting of losing a hospital,” Roberts said. “I’m hoping the [new] building goes a long way. We’re going to grow it as a vibrant medical village.”

Meanwhile, Mayo is proceeding with its changes in Albert Lea. Executives have assured Albert Lea residents that they will receive the same level of care for emergency services and upgraded facilities for outpatient care.

But some community members said they are already noticing problems with Mayo’s regionalization. One local pharmacist, Curt Clarambeau, said he can’t get timely responses to reports of adverse drug reactions. A call to the hospital in Albert Lea results in several phone transfers and no immediate response.

“It’s just impossible. It takes days,” Clarambeau said. “They’re trying to create efficiencies by not having everyone calling the doctors, but there are certain things we need to talk to them about.”

Don Sorensen, 79, said he’s also had trouble getting access to doctors at the hospital in Albert Lea. He said began to suffer from severe knee pain in November, but couldn’t get an appointment. His wife was put on hold for 40 minutes before learning the earliest appointment was still several days away.

At the suggestion of his RV repairman, Sorensen called a clinic in Minneapolis and got an appointment the same day. His wife, Eleanor, drove him, and he ended up with a brace, a prescription, and another follow up appointment.

But the couple is worried about continuing to make the drive if the logjam persists in Albert Lea. “We used to feel secure because we had Mayo here,” Eleanor Sorensen said. “We could get the care we needed. But now everybody our age feels very very vulnerable.”