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Must-Attend Health Conference All About The Deals Amid Uncertainty For Millions

SAN FRANCISCO — There’s so much money floating around here this week, you can almost see it wafting through the air.

About 10,000 attendees, mostly confident men in well-cut suits and even nicer watches, are packing the elegant Westin St. Francis Hotel for the invite-only J.P. Morgan Healthcare Conference, which ends Thursday.

For many of these investors, health providers, insurers and entrepreneurs at the nation’s largest and most prestigious health investment conference, it’s all about the deal — and the after-hours parties.

In the first few days of what’s become known as J.P. Morgan Week, New Jersey-based Celgene announced it would spend up to $7 billion to acquire Impact Biomedicines. And Novo Nordisk, the world’s biggest insulin maker, bid $3.1 billion for a Belgian biotech firm.

For those who didn’t land a coveted invite, satellite conferences on digital health and biotechnology dot the city, offering lesser mortals an opportunity to network and make their own deals. Former Vice President Joe Biden even popped into town to keynote the StartUp Health Festival satellite conference, speaking about cancer treatment costs and electronic health records.

The J.P. Morgan gathering comes at a jarring time when you consider that the other world of health care is flooded with uncertainty for the millions of ordinary Americans who inhabit it. They face a precarious political landscape in which the future of the Affordable Care Act remains uncertain and Republican leaders in Congress mull dramatic cuts to Medicaid and Medicare.

John Baackes, CEO of the nation’s largest public health plan, L.A. Care, which insures 2.1 million low-income patients, said if his enrollees wandered into the conference, “they’d think they were in a foreign land and that this has nothing to do with them.”

Much of U.S. health care is underwritten by public dollars, but people here didn’t come to talk about that or rising costs, particularly for prescription drugs. Only a few presentations at this year’s conference have touched on prices, including a J.P. Morgan study released Monday that found many Americans put off medical care until they get their tax refund — a clear sign that that they don’t have enough saved up to pay for care when they need it.

“It’s just so striking how much maneuvering and desire there is at this meeting for a piece of the 18 percent of GDP spent on health care,” mused Dr. Vivian Lee, the former leader of the University of Utah Health Care system, who generated controversy with her efforts to track costs with pinpoint precision. “Is anyone here trying to decrease their share?”

Baackes, who comes to the conference to network and monitor the latest developments in health care, said he’s always skeptical of the well-heeled company officials who attend promising better health outcomes and cost savings. “In a way, there’s too much money walking around here,” he said. “Investors are thinking, ‘Health care is a $3 trillion sector of the economy; surely it will benefit from my genius.’”

Many attendees view the conference with a less critical eye.

“It’s a useful place for us to be,” said Amanda Cowley, strategy director of the quasi-governmental organization that produces the U.S. Pharmacopeia, a compendium of information and standards for producing medicines and food ingredients. Cowley said she and her colleagues need to learn about emerging health technologies so they can anticipate their future work products.

Cowley stood in a line of hundreds of attendees waiting to dine on tri-tip, vegetables and macarons while listening to Microsoft founder Bill Gates talk about how his foundation is helping improve the health of subsistence farmers and children in the developing world.

But there was little talk of America’s subsistence patients, who often cannot afford the expensive drugs and medical devices that are bought and sold in deals brokered at conferences like these, in private rooms guarded by phalanxes of staffers at tony hotels.

Those patients, however, were the focus of a Medicaid panel held Tuesday at Glide Memorial Church in San Francisco’s troubled Tenderloin district, a few blocks and a world away from the Westin St. Francis. That event, which drew about 70 people, was sponsored by ConsejoSano, a Southern California-based startup that has raised $7.2 million to help Spanish speakers better navigate the health system.

Rallying the troops at Glide was former Medicare and Medicaid chief Andy Slavitt, a fierce critic of Republican efforts to repeal and replace the ACA. Slavitt recently invested in Cityblock Health, a public health startup focusing on Medicaid and other low-income patients.

The good thing about J.P. Morgan Week, Slavitt told Kaiser Health News, is that it draws innovative people who want to invest. “The question is, should health care capital be focused on solving big problems and getting rewarded for them, or just focused on the status quo?”


Giving Medicaid Enrollees Something To Smile About

Susan Inglett’s dental coverage changed just after she got a root canal on one of her top teeth.

It was 2009, and California was in the midst of a budget crisis. To cut costs, Medi-Cal, the state’s health insurance program for low-income residents, eliminated non-emergency dental benefits for adults.

Inglett, 63, of San Diego, needed a crown for that vulnerable tooth, but the state no longer paid for them.

She couldn’t afford one on her own, so she went without it. After that, she had three other teeth pulled because the dental services that would have saved them were no longer covered.

“You end up making choices about what you can and cannot afford,” Inglett says. “If a procedure comes up and you simply can’t afford it, and it’s cheaper to yank the tooth, then you take out the tooth.”

Now, Inglett won’t have to choose between fixing her teeth and getting them pulled.

Many of the dental services cut nine years ago were restored on Jan. 1 for her and about 7.5 million adults on Medi-Cal, many of whom had to get their teeth pulled rather than repaired.

Some benefits had been partially restored in 2014, such as fillings and X-rays, but critical treatments remained uncovered, including lab-processed crowns, root canals on back teeth, treatments for gum disease and partial dentures.

Those procedures are now covered.

Medi-Cal is California’s version of the state-federal Medicaid program. All state Medicaid programs must provide comprehensive dental coverage for children, but dental services are optional for adults.

Almost all states do provide some adult dental benefits, though the scope varies. As of May 2017, 16 states plus the District of Columbia provided extensive adult dental benefits, 17 offered limited dental benefits and the remaining 13 that covered adults did so only for emergency dental care, according to the Center for Health Care Strategies.

Four states provided no adult dental benefits at all.

During budget crises, optional adult dental benefits are among the first to be chopped, says Robin Rudowitz, associate director of the Kaiser Family Foundation’s Program on Medicaid and the Uninsured. (Kaiser Health News is an editorially independent program of the foundation.)

As economies improve, states often move to restore them, Rudowitz says. Seven states, including California, Arizona and Oregon, expanded their dental coverage in fiscal years 2017 and 2018.

But access to actual dental care is a problem for Medicaid enrollees, and a critical question looms in California now that adult dental benefits have been restored: Will there be enough dentists willing to accept the rates that Denti-Cal — Medi-Cal’s dental program — pays for them?

“The vast majority of dentists don’t accept Denti-Cal patients because they can’t afford it,” says Sigmund Abelson, associate dean for clinical affairs at University of the Pacific’s dental school.

The school operates clinics in San Francisco and Union City that treat about 2,500 Denti-Cal patients a year, he says. Services are provided by students under the supervision of faculty.

Abelson says he believes the overall health of Medi-Cal enrollees will improve now that full dental benefits have been restored, assuming they can find participating dentists.

Oral and physical health are directly linked, and many Denti-Cal recipients suffered from preventable illnesses because they couldn’t get appropriate dental care, Abelson says.

Some ended up in emergency rooms, “many times with acute infections that could have been treated by dentists,” he says.

Patients like Inglett who are missing teeth tended to start eating more processed foods and soft foods, says her dentist, Misako Hirota, who practices in National City, just south of San Diego.

“That in itself creates a lot of other problems,” such as diabetes, obesity and high blood pressure, she says. “It’s all a vicious cycle.”

Among the treatments that were restored this month, Abelson ranks root canals and special cleanings for people with gum disease as two of the most important.

Under the previous rules, root canals on back teeth were not covered. Extractions, on the other hand, were.

Now, all teeth are eligible for root canal coverage, Abelson says.

For patients with gum disease, Denti-Cal also started covering “scaling and root planing,” which is a deep cleaning below the gum line that can help reduce infections in the mouth, Abelson says.

“Remember, your gums are holding in your teeth,” he says. “There’s no point in fixing a tooth if you have bad gums. You may ultimately lose the tooth.”

Hirota is thrilled that her patients are now eligible for partial dentures. After benefits were partly restored in 2014, enrollees could get only full dentures. That meant any remaining teeth had to be pulled before patients could qualify, Hirota says.

Having dentures “makes all the difference in the world for your confidence, and for your ability to get a job and present yourself in public,” she says.

Inglett is grateful for the changes. If the benefits had not been restored, she would have had to get more teeth pulled. “I am at the point where I would have to keep sacrificing my teeth,” she says.

Inglett already has a dentist who accepts Medi-Cal. Enrollees who don’t might have difficulty finding one.

A scathing report on Denti-Cal in 2016 by the Little Hoover Commission, an independent state oversight agency, noted that just a quarter of California dentists participate “due to its low reimbursement rates and administrative obstructions.” Finding a Denti-Cal dentist in rural counties can be next to impossible.

But state officials say they are engaged in a statewide outreach effort to recruit more dentists and have simplified the enrollment paperwork for providers.

And last year, Denti-Cal increased the rates it pays dentists for hundreds of procedures by 40 percent, a boost that was funded by the tobacco tax, Proposition 56, which voters approved in November 2016.

Hirota’s regular charge for a filling that repairs damage on two surfaces of a tooth is $130. Before the rate hike, Denti-Cal paid her $48, but that grew last year to $67.20, she says.

Hirota believes more dentists may start to accept Denti-Cal patients now, but Abelson is skeptical that the rate hikes will be enough to entice an adequate number of dentists.

To search for dentists who accept fee-for-service Denti-Cal, which is the primary service model for most of the state, visit the Denti-Cal website at or call 800-322-6384. If you live in Sacramento or Los Angeles County and have managed-care Denti-Cal, email or call 916-464-3888.

You can also call your local dental society, which likely maintains a list of dentists in the area who accept Denti-Cal. You can find your branch by visiting the California Dental Association website ( and clicking on the “About CDA” tab.

Like University of the Pacific, many dental schools accept Denti-Cal patients, Abelson says. However, they are concentrated in the Bay Area and Southern California, so they won’t be accessible to all Californians.


HHS Nominee Vows To Tackle High Drug Costs, Despite His Ties To Industry

Senate Democrats on Tuesday pressed President Donald Trump’s nominee for the top health post to explain how he would fight skyrocketing drug prices — demanding to know why they should trust him to lower costs since he did not do so while running a major pharmaceutical company.

Alex M. Azar II, the former president of the U.S. division of Eli Lilly and Trump’s pick to run the Department of Health and Human Services, presented himself as a “problem solver” eager to fix a poorly structured health care system during his confirmation hearing before the Senate Finance Committee. Azar said addressing drug costs would be among his top priorities.

But armed with charts showing how some of Eli Lilly’s drug prices had doubled on Azar’s watch, Democrats argued Azar was part of the problem. Sen. Ron Wyden of Oregon, the committee’s top Democrat, said Azar had never authorized a decrease in a drug price as a pharmaceutical executive.

“The system is broken,” Wyden said. “Mr. Azar was a part of that system.”

Azar countered that the nation’s pharmaceutical drug system is structured to encourage companies to raise prices, a problem he said he would work to fix as head of HHS.

“I don’t know that there is any drug price of a brand-new product that has ever gone down from any company on any drug in the United States, because every incentive in this system is towards higher prices, and that is where we can do things together, working as the government to get at this,” he said. “No one company is going to fix that system.”

Azar’s confirmation hearing Tuesday was his second appearance before senators as the nominee to lead HHS. In November, he faced similar questions from the Senate Health, Education, Labor and Pensions Committee during a courtesy hearing.

If confirmed, Azar would succeed Tom Price, Trump’s first health secretary, who resigned in September amid criticism over his frequent use of taxpayer-paid charter flights. A former Republican congressman who was a dedicated opponent of President Barack Obama’s signature health care law, Price had a frosty relationship with Democrats in Congress as he worked with Republicans to try to undo the law.

Price and the Trump administration often turned to regulations and executive orders to undermine the Affordable Care Act, since Republicans in Congress repeatedly failed to enact a repeal. “Repeal and replace” has been the president’s mantra.

But at the hearing, Azar was circumspect about his approach, noting that his job would be to work under existing law. “The Affordable Care Act is there,” he said, adding that it would fall to him to make it work “as best as it possibly can.”

Senate Republicans touted Azar’s nearly six years working for the department under President George W. Bush, including two years as a deputy secretary. Committee Chairman Orrin Hatch (R-Utah) praised Azar’s “extraordinary résumé,” adding that, among HHS nominees, he was “probably the most qualified I’ve seen in my whole term in the United States Senate.” Hatch, who is the longest-serving Republican senator in history, has been a senator for more than 40 years.

In addition to drug costs, Azar vowed to focus on the nation’s growing opioid crisis, calling for “aggressive prevention, education, regulatory and enforcement efforts to stop overprescribing and overuse,” as well as “compassionate treatment” for those suffering from addiction.

Pressed about Republican plans to cut entitlement spending to compensate for budget shortfalls, Azar said he was “not aware” of support within the Trump administration for such cuts.

“The president has stated his opposition to cuts to Medicaid, Medicare or Social Security,” Azar said. “He said that in the campaign, and I believe he has remained steadfast in his views on that.”

But Democrats pushed back, pointing out that Trump had proposed Medicaid cuts in his budget request last year. Sen. Sherrod Brown (D-Ohio) said such cuts would hurt those receiving treatment for opioid addiction.

“What happens to these people?” he said.

Despite such Democratic criticism, Azar is likely to be confirmed when the full Senate votes on his nomination. An HHS spokesman Tuesday pointed reporters to an editorial in STAT supporting Azar, written by former Senate majority leaders Bill Frist and Tom Daschle — a Republican and a Democrat. “We need a person of integrity and competence at the helm of the Department of Health and Human Services,” they wrote. “The good news is that President Trump has nominated just such a person, Alex Azar.”


Despite Prod By ACA, Tax-Exempt Hospitals Slow To Expand Community Benefits

The federal health law’s efforts to get nonprofit hospitals to provide more community-wide benefits in exchange for their lucrative tax status has gotten off to a slow start, new research suggests. And some experts predict that a recent repeal of a key provision of the law could further strain the effort.

The increased emphasis on community-wide benefits was mandated by the Affordable Care Act. The health law required hospitals that meet federal tax standards to be nonprofits to perform a community health needs assessment (CHNA) every three years, followed by implementing a strategy to deal with issues confronting the community, such as preventing violence or lowering the rates of diabetes.

A study released Monday in the journal Health Affairs shows spending in these areas has remained relatively stagnant.

The research showed average spending by tax-exempt hospitals on community benefits in 2010 was 7.6 percent of total operating costs and bumped to 8.1 percent by 2014. But the bulk of that spending goes toward unreimbursed patient care, such as charity care. The ACA was trying to spur more spending on broader community initiatives, which have remained below 1 percent of operating costs at the hospitals.

“This is not easy for hospitals to do,” said Gary Young, the study’s lead author and director of the Center for Health Policy and Healthcare Research at Northeastern University in Boston. “By tradition, by the nature of their resources, hospitals have not been oriented to prevention, they’ve been oriented to treatment.”

New efforts by the Republican-led Congress may complicate the effort. The repeal last month of the ACA’s penalties for most people who don’t have health insurance has some experts questioning how some of these hospitals will be able to spend more on community benefits. The Congressional Budget Office has estimated that because of that change about 13 million people would give up their coverage by 2027, which could drive up costs for hospitals because there would be more uninsured patients.

“Anything that destabilizes the system and takes money out of the hospitals’ revenue stream is going to negatively impact them,” said Gregory Tung, assistant professor at the University of Colorado’s School of Public Health. “It’s tough for hospitals to be navigating that uncertainty.”

Jill Horwitz, professor of law at UCLA who specializes in health issues, said hospitals have trouble planning community efforts when they are unsure of their finances.

“It’s a very difficult context in which to operate a stable system,” Horwitz said. “One day to the next, it’s hard to know what the rules are, what the reimbursement is going to be and what kind of insurance your patients will have.”

More than half of the hospitals in the United States are private, nonprofit organizations that are tax-exempt.

Lawrence Massa, president & CEO of the Minnesota Hospital Association, said the repeal of the ACA’s individual mandate penalties will change hospitals’ calculations.

“We certainly expect to see our uninsured rate go up as a result of repealing the individual mandate,” he said, “so that’s going to have an opposite type of effect of where we thought the trend was going to be because we changed the rules in the middle of the game.”

But it’s too early to tell how hospitals will respond, according to Massa. Many are still grappling with the new requirements.

The ACA was enacted in 2010, but the provision requiring community-based action did not come into effect until the end of March 2012, and enrollment in ACA marketplace plans didn’t begin until 2014. Hospitals began early investments for assembling the needs assessments in 2011 and 2012, Massa said.

“In the later years, they’ll be using that data and comparing and reporting to the IRS how they’ve changed their community benefits spending as a result of those community health needs assessments,” he said. “If everything stayed the way it was, I think we would know by 2020 whether this had the kind of impact that was anticipated.”

Young and his research colleagues acknowledged in their study that “certainly, more time is needed” to assess the full impact of the law’s requirements on spending for community benefits.

Nonetheless, Young said, many hospitals lack the means to provide greater preventive care in the community.

They don’t have the necessary infrastructure, “the personnel or the knowledge to develop those strategies,” he said. “They don’t have the resources to necessarily invest in those areas.”

Horwitz agreed. “If we’re going to require this high level of spending on community benefits and paying for patients who can’t afford care, something else has to give,” she said.


Half Of Hospitals In Conn., Del. Hit By Medicare’s Safety Penalties

As the federal government penalizes 751 hospitals for having too many infections and patient injuries, some states are feeling the cuts in Medicare payments more than others.

This year’s punishments landed the hardest in Connecticut and Delaware, where Medicare penalized half of the evaluated hospitals, federal records show. In New York and Nevada, four in 10 hospitals were penalized. A third were punished in Rhode Island and Georgia. (These figures do not include specialty hospitals automatically exempted from penalties: those serving veterans, children and psychiatric patients, and “critical access” hospitals that are the only institutions in their area.)

While every state except Maryland — which is excluded because it has a different Medicare payment system — had at least one hospital punished, some got off comparatively lightly. Sixteen percent of hospitals or fewer in Alabama, Kansas, Massachusetts, Missouri, Ohio, Texas and nine other states were punished. (State summaries are below; a searchable list of individual hospitals penalized is here.)

The penalties — now in their fourth year — were created by the Affordable Care Act to drive hospitals to improve the quality of their care. Each year, hundreds of hospitals lose 1 percent of their Medicare payments through the Hospital-Acquired Conditions (HAC) Reduction Program.

The program’s design is stern: Out of the roughly 3,300 general hospitals that are evaluated each year, Medicare must punish the worst-performing quarter of them — even if they have reduced their number of potentially avoidable mishaps from the previous evaluation period.

“I have seen with my own eyes the improvement,” said Dr. Amy Boutwell, a quality-improvement consultant in Massachusetts. “I hear hospitals say straight up, ‘We don’t want to be in the lowest quartile, we want to get out of the penalty zone.’”

The conditions Medicare considers include rates of infections from colon surgeries, hysterectomies, urinary tract catheters and central line tubes inserted into veins. Medicare also examines rates of methicillin-resistant Staphylococcus aureus, or MRSA, and Clostridium difficile, known as C-diff. The frequency of 10 types of in-hospital injuries, including bedsores, hip fractures, blood clots, sepsis and post-surgical wound ruptures, are also assessed. All these types of potentially avoidable events are known as hospital-acquired conditions, or HACs.

A mix of factors contribute to why more hospitals are punished in certain states. The penalties fall more frequently on teaching hospitals and hospitals with large portions of low-income patients. There are more of those in some states than in others. Some penalty recipients say Medicare isn’t adequately taking into account differences in patients, since those who are frailer are more susceptible to HACs.

There is also some element of statistical chance, since the number of reported conditions in one hospital on the edge of the bottom quartile might just have one or two more incidents than a hospital that narrowly escapes that designation.

Some repeatedly penalized hospitals, such as Northwestern Memorial Hospital in Chicago, say the program is flawed by what researchers call surveillance bias: The hospitals that are most diligent in testing and treating infections and injuries are going to appear to have more than comparatively lackadaisical institutions. The hospitals are responsible for reporting incidents to the federal government.

Medicare says it performs spot-checks, but Dr. Karl Bilimoria, director of the Surgical Outcomes and Quality Improvement Center at the Northwestern University Feinberg School of Medicine, said more policing is needed for the rates to be credible.

“In no other industry would this pass, where a program without an audit and voluntary data reporting would be considered valid,” Bilimoria said. “We know guys are gaming.”

Still, many hospitals that have large numbers of sicker and low-income patients, or that handle more complex cases, have avoided the penalties. Medicare issued no punishments this year to Cedars-Sinai Medical Center in Los Angeles; the Cleveland Clinic; Intermountain Medical Center in Murray, Utah; Massachusetts General Hospital in Boston; or New York-Presbyterian Hospital in Manhattan. While safety-net and teaching hospitals were penalized at a higher rate than other hospitals, two-thirds of each group escaped penalties this year.

Dr. Kevin Kavanagh, board chairman of Health Watch USA, a patient advocacy group, said that most hospitals are reducing their HACs each year, in part because of the penalties.

“That’s really the bottom line that everyone should support,” he said. “No system is perfect.”