Presidential Election Could Decide Fate of Extra Obamacare Subsidies

KFF Health News, June 3, 2024

1.3 million people are enrolled in health coverage this year through the ACA marketplace in Georgia, which has seen a 181% increase in enrollment since 2020.

by Andy Miller

When Cassie Cox ended up in the emergency room in January, the Bainbridge, Georgia, resident was grateful for the Obamacare insurance policy she had recently selected for coverage in 2024.

Cox, 40, qualified for an Affordable Care Act marketplace plan with no monthly premium due to her relatively low income. And after she cut her hand severely, the 35 stitches she received in the ER led to an out-of-pocket expense of about $300, she said.

“I can’t imagine what the ER visit would have cost if I was uninsured,” she said.

Cox is among 1.3 million people enrolled in health coverage this year through the ACA marketplace in Georgia, which has seen a 181% increase in enrollment since 2020.

Many people with low incomes have been drawn to plans offering $0 premiums and low out-of-pocket costs, which have become increasingly common because of the enhanced federal subsidies introduced by President Joe Biden.

Southern states have seen the biggest enrollment bump of any region. Ten of the 15 states that more than doubled their marketplace numbers from 2020 to 2024 are in the South, according to a KFF policy brief. And the five states with the largest increases in enrollment — Texas, Mississippi, Georgia, Tennessee, and South Carolina, all in the South — have yet to expand Medicaid under the Affordable Care Act, driving many residents to the premium-free health plans.

But with the federal incentives introduced by the Biden administration set to expire at the end of 2025, and the possibility of a second Donald Trump presidency, the South could be on track to see a significant dip in ACA enrollment, policy analysts say.

“Georgia and the Southern states generally have lower per-capita income and higher uninsured rates,” said Gideon Lukens, a senior fellow and the director of research and data analysis for the Center on Budget and Policy Priorities, a nonpartisan, Washington, D.C.-based research organization. If the enhanced subsidies go away, he said, the South, especially states that haven’t expanded Medicaid, will likely feel a bigger effect than other states. “There’s no other safety net” for many people losing coverage in non-expansion states, Lukens said.

When Cox was enrolling in Obamacare last fall, she qualified for premium tax credits that were added to two major congressional legislative packages: the American Rescue Plan Act in 2021, and the Inflation Reduction Act in 2022. Those incentives — which gave rise to many plans with no premiums and low out-of-pocket costs — have helped power this year’s record Obamacare enrollment of 21 million. The extra subsidies were added to the already existing subsidies for marketplace coverage.

The states that didn’t expand Medicaid and have high uninsured rates “got most of the free plans,” said Cynthia Cox, a KFF vice president who directs the health policy nonprofit’s program on the ACA. Zero-premium plans existed before the new subsidies, she added, but they generally came with high deductibles that potentially would lead to higher costs for consumers.

A Trump presidency could jeopardize those extra subsidies. Brian Blase, a former Trump administration official who advised him on health care policy, said that eliminating the extra subsidies would bring the marketplace back to the ACA’s original intent.

“It’s not sustainable or wise to have fully taxpayer-subsidized coverage,” said Blase, who is now president of the Paragon Health Institute, a health policy research firm. People would still qualify for discounts, he said, but they wouldn’t be as generous.

Karoline Leavitt, a spokesperson for Trump, did not answer a reporter’s questions on the future of the enhanced subsidies under a new Trump administration. Despite his comments at the end of last year that he is “seriously looking at alternatives” to Obamacare, Leavitt said Trump is not campaigning to terminate the Affordable Care Act.

“He is running to make health care actually affordable, in addition to bringing down inflation, cutting taxes, and reducing regulations to put more money back in the pockets of all Americans,” she said.

While views on Obamacare may be divided, the wide support for subsidies crosses political lines, according to a KFF Health Tracking Poll released in May.

About 7 in 10 voters support the extension of enhanced federal financial assistance for people who purchase ACA marketplace coverage, the poll found. That support included 90% of Democrats, 73% of independents, and 57% of Republicans surveyed.

The enhanced assistance also allowed many people with incomes higher than 400% of the poverty level, or $58,320 for an individual in 2023, to get tax credits for coverage for the first time.

Besides the financial incentives, other reasons cited for the explosion in ACA enrollment include the end of continuous Medicaid coverage protections related to the covid public health emergency. About a year ago, states started redetermining eligibility, known as the “unwinding.”

Roughly one-quarter of those who lost Medicaid coverage moved to the ACA marketplace, said Edwin Park, a research professor at the Georgetown University Center for Children and Families.

In Georgia, Republican political leaders haven’t talked much about the effect of the Biden administration’s premium incentives on enrollment increases.

Instead, Georgia Gov. Brian Kemp, among others, has touted the performance of Georgia Access, an online portal that links consumers directly to the ACA marketplace’s website or to an agent or broker. That agent link can create a more personal connection, said Bryce Rawson, a spokesperson for the state’s insurance department, which runs the portal. Employees from the agency and from consulting firms helped market the no-premium plans throughout the state, he said.

Yet Georgia Access didn’t become fully operational until last fall, during open enrollment for the marketplace. Republicans also credit a reinsurance waiver that, according to Rawson, increased the number of health insurers offering marketplace coverage in the state, leading to more competition.

Reinsurance is likely not a major reason for a state’s increased Obamacare enrollment, said Georgetown’s Park. And a study published in Health Affairs found that Georgia’s reinsurance program had the unintended consequences of increasing the minimum cost of subsidized ACA coverage and reducing enrollment among individuals at a certain income level, the Atlanta Journal-Constitution recently reported.

The state’s insurance department said the study “does not accurately reflect the overall benefits the reinsurance program has brought to Georgia consumers.”

When asked whether the governor would support renewal of the enhanced subsidies, Garrison Douglas, Kemp’s spokesperson, said the matter is up to Congress to decide.

Another reason for the soaring ACA enrollment is the 2023 fix to the “family glitch” that had prevented dependents of workers who were offered unaffordable family coverage by employers from getting marketplace subsidies.

States that have run their own marketplaces, though, generally have not seen the same level of enrollment increases. Those 18 states, plus the District of Columbia, have expanded Medicaid. Georgia will join the list of states running their own exchanges this fall, making it the only state to operate one that has not expanded Medicaid.

The federal Centers for Medicare & Medicaid Services credits a national marketing campaign and more federal funding for navigators, the insurance counselors who provide education about marketplace health coverage and free help with enrollment.

That level of financial support for navigators may be in jeopardy if Trump returns to the White House.

The Biden administration injected nearly $100 million in funding for navigators in the enrollment period for coverage this year. The Trump administration, on the other hand, awarded just $10 million a year for navigators from 2018 to 2020.

The marketplace is usually “a transitional place” for people coming in and out of coverage, KFF’s Cox said. “That marketing and outreach is pretty essential to help people literally navigate the process.”

Andy Miller: @gahealthnews

 

Tennessee Gives This Hospital Monopoly an A Grade—Even When It Reports Failure

KFF Health News, May 29, 2024

A Tennessee agency that is supposed to hold accountable and grade the nation’s largest state-sanctioned hospital monopoly awards full credit on dozens of quality-of-care measurements as long as it reports any value, regardless of how its hospitals actually perform.

Ballad Health, a 20-hospital system in northeast Tennessee and southwest Virginia, has received A grades and an annual stamp of approval from the Tennessee Department of Health. This has occurred as Ballad hospitals consistently fall short of performance targets established by the state, according to health department documents.

Because the state’s scoring rubric largely ignores the hospitals’ performance, only 5% of Ballad’s final score is based on actual quality of care, and Ballad has suffered no penalty for failing to meet the state’s goals in about 50 areas — including surgery complications, emergency room speed, and patient satisfaction.

“It doesn’t make any sense,” said Ron Allgood, 75, of Kingsport, Tennessee, who said he had a heart attack in a Ballad ER in 2022 after waiting for three hours with chest pains. “It seems that nobody listens to the patients.”

Ballad Health was created six years ago after Tennessee and Virginia lawmakers waived federal anti-monopoly laws so two competing hospital companies could merge. The monopoly agreement established two quality measures to compare Ballad’s care against the state’s baseline expectations: about 17 “target” measures, on which hospitals are expected to improve and their performance factors into their grade; and more than 50 “monitoring” measures, which Ballad must report, but how the hospitals perform on them is not factored into Ballad’s grade.

Ballad has failed to meet the baseline values on 75% or more of all quality measures in recent years — and some are not even close — according to reports the company has submitted to the health department.

Since the merger, Ballad has become the only option for hospital care for most of about 1.1 million residents in a 29-county region at the nexus of Tennessee, Virginia, Kentucky, and North Carolina. Critics are vocal. Protesters rallied outside a Ballad hospital for months. For years, longtime residents like Allgood have alleged Ballad’s leadership has diminished the hospitals they’ve relied on their entire lives.

“It’s a shadow of the hospital we used to have,” Allgood said.

And yet, every year since the merger, the Tennessee health department has reported that the benefits of the hospital merger outweigh the risks of a monopoly, and that Ballad “continues to provide a Public Advantage.” Tennessee has also given Ballad an A grade in every year but two, when the scoring system was suspended due to the covid-19 pandemic and no grade issued.

The department’s latest report, released this month, awarded Ballad 93.6 of 100 possible points, including 15 points just for reporting the monitoring measures. If Tennessee rescored Ballad based on its performance, its score would drop from 93.6 to about 79.7, based on the scoring rubric described in health department documents. Tennessee considers scores of 85 or higher to be “satisfactory,” the documents state.

Larry Fitzgerald, who monitored Ballad for the Tennessee government before retiring this year, said it was obvious the state’s scoring rubric should be changed.

Fitzgerald likened Ballad to a student getting 15 free points on a test for writing any answer.

“Do I think Ballad should be required to show improvement on those measures? Yes, absolutely,” Fitzgerald said. “I think any human being you spoke with would give the same answer.”

Ballad Health declined to comment. Tennessee Department of Health spokesperson Dean Flener declined an interview request and directed all questions about Ballad to the Tennessee Attorney General’s Office, which also has a role in regulating the monopoly. Amy Wilhite, a spokesperson for the AG’s office, directed those questions back to the health department and provided documents showing it is the agency responsible for how Ballad is scored.

The Virginia Department of Health, which is also supposed to perform “active supervision” of Ballad as part of the monopoly agreement, has fallen several years behind schedule. Its most recent assessment of the company was for fiscal year 2020, when it found that the benefits of the monopoly “outweigh the disadvantages.” Erik Bodin, a Virginia official who oversees the agreement, said more recent reports are not yet ready to be released.

Ballad Health was formed in 2018 after state officials approved the nation’s biggest so-called Certificate of Public Advantage, or COPA, agreement, allowing a merger of the Tri-Cities region’s only two hospital systems — Mountain States Health Alliance and Wellmont Health System. Nationwide, COPAs have been used in about 10 hospital mergers over the past three decades, but none has involved as many hospitals as Ballad’s.

The Federal Trade Commission has warned that hospital monopolies lead to increased prices and decreased quality of care. To offset the perils of Ballad’s monopoly, officials required the new company to agree to more robust regulation by state health officials and a long list of special conditions, including the state’s quality-of-care measurements.

Ballad failed to meet the baseline on about 80% of those quality measures from July 2021 to June 2022, according to a report the company submitted to the health department. The following year, Ballad fell short on about 75% of the quality measures, and some got dramatically worse, another company report shows.

For example, the median time Ballad patients spend in the ER before being admitted to the hospital has risen each year and is now nearly 11 hours, according to the latest Ballad report. That’s more than three times what it was when the monopoly began, and more than 2.5 times the state baseline.

And yet Ballad’s grade is not lowered by the lack of speed in its ERs.

Fitzgerald, Tennessee’s former Ballad monitor, who previously served as an executive in the University of Virginia Health System, said a hospital company with competitors would have more reason than Ballad to improve its ER speeds.

“When I was at UVA, we monitored this stuff passionately because — and I think this is the key point here — we had competition,” Fitzgerald said. “And if we didn’t score well, the competition took advantage.”

by Brett Kelman May 29, 2024

Midwest correspondent Samantha Liss contributed to this report.

Florida Allows Doctors To Perform C-Sections Outside of Hospitals

KFF Health News, May 28, 2024

Florida has become the first state to allow doctors to perform cesarean sections outside of hospitals, siding with a private equity-owned physicians group that says the change will lower costs and give pregnant women the homier birthing atmosphere that many desire.

But the hospital industry and the nation’s leading obstetricians’ association say that even though some Florida hospitals have closed their maternity wards in recent years, performing C-sections in doctor-run clinics will increase the risks for women and babies when complications arise.

“A pregnant patient that is considered low-risk in one moment can suddenly need lifesaving care in the next,” Cole Greves, an Orlando perinatologist who chairs the Florida chapter of the American College of Obstetricians and Gynecologists, said in an email to KFF Health News. The new birth clinics, “even with increased regulation, cannot guarantee the level of safety patients would receive within a hospital.”

This spring, a law was enacted allowing “advanced birth centers,” where physicians can deliver babies vaginally or by C-section to women deemed at low risk of complications. Women would be able to stay overnight at the clinics.

Women’s Care Enterprises, a private equity-owned physicians group with locations mostly in Florida along with California and Kentucky, lobbied the state legislature to make the change. BC Partners, a London-based investment firm, bought Women’s Care in 2020.

“We have patients who don’t want to deliver in a hospital, and that breaks our heart,” said Stephen Snow, who recently retired as an OB-GYN with Women’s Care and testified before the Florida Legislature advocating for the change in 2018.

Brittany Miller, vice president of strategic initiatives with Women’s Care, said the group would not comment on the issue.

Health experts are leery.

“What this looks like is a poor substitute for quality obstetrical care effectively being billed as something that gives people more choices,” said Alice Abernathy, an assistant professor of obstetrics and gynecology at the University of Pennsylvania Perelman School of Medicine. “This feels like a bad band-aid on a chronic issue that will make outcomes worse rather than better,” Abernathy said.

Nearly one-third of U.S. births occur via C-section, the surgical delivery of a baby through an incision in the mother’s abdomen and uterus. Generally, doctors use the procedure when they believe it is safer than vaginal delivery for the parent, the baby, or both. Such medical decisions can take place months before birth, or in an emergency.

Florida state Sen. Gayle Harrell, the Republican who sponsored the birth center bill, said having a C-section outside of a hospital may seem like a radical change, but so was the opening of outpatient surgery centers in the late 1980s.

Harrell, who managed her husband’s OB-GYN practice, said birth centers will have to meet the same high standards for staffing, infection control, and other aspects as those at outpatient surgery centers.

“Given where we are with the need, and maternity deserts across the state, this is something that will help us and help moms get the best care,” she said.

Seventeen hospitals in the state have closed their maternity units since 2019, with many citing low insurance reimbursement and high malpractice costs, according to the Florida Hospital Association.

Mary Mayhew, CEO of the Florida Hospital Association, said it is wrong to compare birth centers to ambulatory surgery centers because of the many risks associated with C-sections, such as hemorrhaging.

The Florida law requires advanced birth centers to have a transfer agreement with a hospital, but it does not dictate where the facilities can open nor their proximity to a hospital.

“We have serious concerns about the impact this model has on our collective efforts to improve maternal and infant health,” Mayhew said. “Our hospitals do not see this in the best interest of providing quality and safety in labor and delivery.”

Despite its opposition to the new birth centers, the Florida Hospital Association did not fight passage of the overall bill because it also included a major increase in the amount Medicaid pays hospitals for maternity care.

Mayhew said it is unlikely that the birth centers would help address care shortages. Hospitals are already struggling with a shortage of OB-GYNs, she said, and it is unrealistic to expect advanced birth centers to open in rural areas with a large proportion of people on Medicaid, which pays the lowest reimbursement for labor and delivery care.

It is unclear whether insurers will cover the advanced birth centers, though most insurers and Medicaid cover care at midwife-run birth centers. The advanced birth centers will not accept emergency walk-ins and will treat only patients whose insurance contracts with the facilities, making them in-network.

Snow, the retired OB-GYN with Women’s Care, said the group plans to open an advanced birth center in the Tampa or Orlando area.

The advanced birth center concept is an improvement on midwife care that enables deliveries outside of hospitals, he said, as the centers allow women to stay overnight and, if necessary, offer anesthesia and C-sections.

Snow acknowledged that, with a private equity firm invested in Women’s Care, the birth center idea is also about making money. But he said hospitals have the same profit incentive and, like midwives, likely oppose the idea of centers that can provide C-sections because they could cut into hospital revenue.

“We are trying to reduce the cost of medicine, and this would be more cost-effective and more pleasant for patients,” he said.

Kate Bauer, executive director of the American Association of Birth Centers, said patients could confuse advanced birth centers with the existing, free-standing birth centers for low-risk births that have been run by midwives for decades. There are currently 31 licensed birth centers in Florida and 411 free-standing birth centers in the United States, she said.

“This is a radical departure from the standard of care,” Bauer said. “It’s a bad idea,” she said, because it could increase risks to mom and baby.

No other state allows C-sections outside of hospitals. The only facility that offers similar care is a birth clinic in Wichita, Kansas, which is connected by a short walkway to a hospital, Wesley Medical Center.

The clinic provides “hotel-like” maternity suites where staffers deliver about 100 babies a month, compared with 500 per month in the hospital itself.

Morgan Tracy, a maternity nurse navigator at the center, said the concept works largely because the hospital and birthing suites can share staff and pharmacy access, plus patients can be quickly transferred to the main hospital if complications arise.

“The beauty is there are team members on both sides of the street,” Tracy said.

by Phil Galewitz, KFF Health News May 28, 2024

Medicaid Unwinding Deals Blow to Tenuous System of Care for Native Americans

KFF Health News, May 20, 2024

13,000 tribal members have been disenrolled from Medicaid in Montana alone.

This article was posted on Monday, May 20, 2024 in KFF Health News.

By Jazmin Orozco Rodriguez

About a year into the process of redetermining Medicaid eligibility after the covid-19 public health emergency, more than 20 million people have been kicked off the joint federal-state program for low-income families.

A chorus of stories recount the ways the unwinding has upended people’s lives, but Native Americans are proving particularly vulnerable to losing coverage and face greater obstacles to reenrolling in Medicaid or finding other coverage.

“From my perspective, it did not work how it should,” said Kristin Melli, a pediatric nurse practitioner in rural Kalispell, Montana, who also provides telehealth services to tribal members on the Fort Peck Reservation.

The redetermination process has compounded long-existing problems people on the reservation face when seeking care, she said. She saw several patients who were still eligible for benefits disenrolled. And a rise in uninsured tribal members undercuts their health systems, threatening the already tenuous access to care in Native communities.

One teenager, Melli recalled, lost coverage while seeking lifesaving care. Routine lab work raised flags, and in follow-ups Melli discovered the girl had a condition that could have killed her if untreated. Melli did not disclose details, to protect the patient’s privacy.

Melli said she spent weeks working with tribal nurses to coordinate lab monitoring and consultations with specialists for her patient. It wasn’t until the teen went to a specialist that Melli received a call saying she had been dropped from Medicaid coverage.

The girl’s parents told Melli they had reapplied to Medicaid a month earlier but hadn’t heard back. Melli’s patient eventually got the medication she needed with help from a pharmacist. The unwinding presented an unnecessary and burdensome obstacle to care.

Pat Flowers, Montana Democratic Senate minority leader, said during a political event in early April that 13,000 tribal members had been disenrolled in the state.

Native American and Alaska Native adults are enrolled in Medicaid at higher rates than their white counterparts, yet some tribal leaders still didn’t know exactly how many of their members had been disenrolled as of a survey conducted in February and March. The Tribal Self-Governance Advisory Committee of the Indian Health Service conducted and published the survey. Respondents included tribal leaders from Alaska, Arizona, Idaho, Montana, and New Mexico, among other states.

Tribal leaders reported many challenges related to the redetermination, including a lack of timely information provided to tribal members, patients unaware of the process or their disenrollment, long processing times, lack of staffing at the tribal level, lack of communication from their states, concerns with obtaining accurate tribal data, and in cases in which states have shared data, difficulties interpreting it.

Research and policy experts initially feared that vulnerable populations, including rural Indigenous communities and families of color, would experience greater and unique obstacles to renewing their health coverage and would be disproportionately harmed.

“They have a lot at stake and a lot to lose in this process,” said Joan Alker, executive director of the Georgetown University Center for Children and Families and a research professor at the McCourt School of Public Policy. “I fear that that prediction is coming true.”

Cammie DuPuis-Pablo, tribal health communications director for the Confederated Salish and Kootenai Tribes in Montana, said the tribes don’t have an exact number of their members disenrolled since the redetermination began, but know some who lost coverage as far back as July still haven’t been reenrolled.

The tribes hosted their first outreach event in late April as part of their effort to help members through the process. The health care resource division is meeting people at home, making calls, and planning more events.

The tribes receive a list of members’ Medicaid status each month, DuPuis-Pablo said, but a list of those no longer insured by Medicaid would be more helpful.

Because of those data deficits, it’s unclear how many tribal members have been disenrolled.

“We are at the mercy of state Medicaid agencies on what they’re willing to share,” said Yvonne Myers, consultant on the Affordable Care Act and Medicaid for Citizen Potawatomi Nation Health Services in Oklahoma.

In Alaska, tribal health leaders struck a data-sharing agreement with the state in July but didn’t begin receiving information about their members’ coverage for about a month — at which point more than 9,500 Alaskans had already been disenrolled for procedural reasons.

“We already lost those people,” said Gennifer Moreau-Johnson, senior policy adviser in the Department of Intergovernmental Affairs at the Alaska Native Tribal Health Consortium, a nonprofit organization. “That’s a real impact.”

Because federal regulations don’t require states to track or report race and ethnicity data for people they disenroll, fewer than 10 states collect such information. While the data from these states does not show a higher rate of loss of coverage by race, a KFF report states that the data is limited and that a more accurate picture would require more demographic reporting from more states.

Tribal health leaders are concerned that a high number of disenrollments among their members is financially undercutting their health systems and ability to provide care.

“Just because they’ve fallen off Medicaid doesn’t mean we stop serving them,” said Jim Roberts, senior executive liaison in the Department of Intergovernmental Affairs of the Alaska Native Tribal Health Consortium. “It means we’re more reliant on other sources of funding to provide that care that are already underresourced.”

Three in 10 Native American and Alaska Native people younger than 65 rely on Medicaid, compared with 15% of their white counterparts. The Indian Health Service is responsible for providing care to approximately 2.6 million of the 9.7 million Native Americans and Alaska Natives in the U.S., but services vary across regions, clinics, and health centers. The agency itself has been chronically underfunded and unable to meet the needs of the population. For fiscal year 2024, Congress approved $6.96 billion for IHS, far less than the $51.4 billion tribal leaders called for.

Because of that historical deficit, tribal health systems lean on Medicaid reimbursement and other third-party payers, like Medicare, the Department of Veterans Affairs, and private insurance, to help fill the gap. Medicaid accounted for two-thirds of third-party IHS revenues as of 2021.

Some tribal health systems receive more federal funding through Medicaid than from IHS, Roberts said.

Tribal health leaders fear diminishing Medicaid dollars will exacerbate the long-standing health disparities — such as lower life expectancy, higher rates of chronic disease, and inferior access to care — that plague Native Americans.

The unwinding has become “all-consuming,” said Monique Martin, vice president of intergovernmental affairs for the Alaska Native Tribal Health Consortium.

“The state’s really having that focus be right into the minutiae of administrative tasks, like: How do we send text messages to 7,000 people?” Martin said. “We would much rather be talking about: How do we address social determinants of health?”

Jazmin Orozco Rodriguez: jorozco@kff.org, @jazmin1orozco

 

Amgen Plows Ahead With Costly, Highly Toxic Cancer Dosing Despite FDA Challenge

KFF Health News, May 8, 2024

The heavier dosage allows AmGen to protect 75% of its revenue from the drug, which earned $200 million last year.

This article was posted on Tuesday, May 7, 2024 in KFF Health News.

By Arthur Allen

When doctors began using the drug sotorasib in 2021 with high expectations for its innovative approach to attacking lung cancer, retired medical technician Don Crosslin was an early beneficiary. Crosslin started the drug that July. His tumors shrank, then stabilized.

But while the drug has helped keep him alive, its side effects have gradually narrowed the confines of his life, said Crosslin, 76, who lives in Ocala, Florida: "My appetite has been minimal. I'm very weak. I walk my dogs and get around a bit, but I haven't been able to golf since last July."

He wonders whether he'd do better on a lower dose, "but I do what my oncologist tells me to do," Crosslin said. Every day, he takes eight of the 120-milligram pills, sold under Amgen's brand name Lumakras.

Crosslin's concern lies at the heart of an FDA effort to make cancer drugs less toxic and more effective. Cancer drug trials are structured to promote high doses, which then become routine patient care. In the face of evidence that thousands of patients become so ill that they skip doses or stop taking the drugs — thereby risking resurgence of their cancers — the FDA has begun requiring companies to pinpoint the right dosage before they reach patients.

The initiative, Project Optimus, launched in 2021 just as Amgen was seeking to market sotorasib. At the time, the FDA's leading cancer drug regulator, Richard Pazdur, co-authored an editorial in the New England Journal of Medicine that said Amgen's trials of the $20,000-a-month drug were "hampered by a lack of robust dose exploration."

The FDA conditionally approved sotorasib but required Amgen to conduct a study comparing the labeled dosage of 960 mg with a dosage of 240 mg. The trial, published in November, showed that the 960-mg dose may have given patients a month more of life, on average, but caused more severe side effects than the lower dose.

Amgen is keeping the 960-mg dosage as it conducts further tests to get final approval for the drug, spokesperson Elissa Snook said, adding that the dose showed superiority in one study. Whether medically justified or not, the heavier dosage allows the company to protect 75% of its revenue from the drug, which brought in nearly $200 million in the United States last year.

And there appears to be nothing the FDA can do about it.

"There's a gap in FDA's authority that results in patients getting excess doses of a drug at excess costs," said Mark Ratain, a University of Chicago oncologist who has pushed for more accurate cancer drug dosing. "We should do something about this."

Deciding on Dosage

It may be too late for the FDA to change the sotorasib dosage, although in principle it could demand a new regimen before granting final approval, perhaps in 2028. Under Project Optimus, however, the agency is doing something about dosage guidelines for future drugs. It is stressing dose optimization in its meetings with companies, particularly as they prepare to test drugs on patients for the first time, spokesperson Lauren-Jei McCarthy said.

"When you go in front of FDA with a plan to approve your drug now, they are going to address dosing studies," said Julie Gralow, chief medical officer of the American Society of Clinical Oncology. "A lot of companies are struggling with this."

That's largely because the new requirements add six months to a year and millions in drug development costs, said Julie Bullock, a former FDA drug reviewer who advocated for more extensive dosing studies and is now senior vice president at Certara, a drug development consultancy.

In part, Project Optimus represents an effort to manage the faults of the FDA's accelerated approval process, begun in 1992. While the process gets innovative drugs to patients more quickly, some medicines have proved lackluster or had unacceptable side effects.

That's especially true of the newer pills to treat cancer, said Donald Harvey, an Emory University pharmacology professor, who has led or contributed to more than 100 early-phase cancer trials.

A study released last month in the Journal of the American Medical Association showed that 41% of the cancer drugs granted accelerated approval from 2013 to 2017 did not improve overall survival or quality of life after five years.

Many of these drugs flop because they must be given at toxic dosages to have any effect, Harvey said, adding that sotorasib might work better if the company had found an appropriate dosage earlier on.

"Sotorasib is a poster child for incredibly bad development," Harvey said. The drug was the first to target the KRAS G12C mutation, which drives about 15% of lung cancers and was considered "undruggable" until University of California-San Francisco chemist Kevan Shokat figured out how to attack it in 2012.

Given the specificity of sotorasib's target, Harvey said, Amgen could have found a lower dosage. "Instead, they followed the old model and said, ‘We're going to push the dose up until we see a major side effect.' They didn't need to do that. They just needed more experience with a lower dose."

The 960-mg dose "is really tough on patients," said Yale University oncologist and assistant professor Michael Grant. "They get a lot of nausea and other GI side effects that are not pleasant. It hurts their quality of life."

The FDA noted in its review of sotorasib that in phase 1 studies tumors shrank when exposed to as little as a fifth of the 960-mg daily dose Amgen selected. At all doses tested in that early trial, the drug reached roughly the same concentrations in the blood, which suggested that at higher doses the drug was mostly just intensifying side effects like diarrhea, vomiting, and mouth sores.

For most classes of drugs, companies spend considerable time in phases 1 and 2 of development, homing in on the right dosage. "No one would think of dosing a statin or antibiotic at the highest tolerable dose," Ratain said.

Things are different in cancer drug creation, whose approach originated with chemotherapy, which damages as many cancer cells as possible, wrecking plenty of healthy tissue in the bargain. Typically, a company's first series of cancer drug trials involve escalating doses in small groups of patients until something like a quarter of them get seriously ill. That "maximum tolerated dose" is then employed in more advanced clinical trials, and goes on the drug's label. Once a drug is approved, a doctor can "go off-label" and alter the dosage, but most are leery of doing so.

Patients can find the experience rougher than advertised. During clinical trials, the side effects of the cancer drug osimertinib (Tagrisso) were listed as tolerable and manageable, said Jill Feldman, a lung cancer patient and advocate. "That killed me. After two months on that drug, I had lost 15 pounds, had sores in my mouth and down my throat, stomach stuff. It was horrible."

Some practitioners, at least, have responded to the FDA's cues on sotorasib. In the Kaiser Permanente health system, lung cancer specialists start with a lower dose of the drug, spokesperson Stephen Shivinsky said.

Smaller Doses — And Revenue

Amgen was clearly aware of the advantages of the 240-mg dosage before it sought FDA approval: It filed a provisional patent application on that dosage before the agency gave breakthrough approval for the drug at 960 mg. The company doesn't appear to have disclosed the patent filing to investors or the FDA. McCarthy said the FDA was prohibited by law from discussing the particulars of its sotorasib regulation plans.

Switching to a 240-mg dosage could register a huge hit to Amgen's revenue. The company markets the drug at more than $20,000 for a month of 960-mg daily doses. Each patient who could get by with a quarter of that would trim the company's revenue by roughly $180,000 a year.

Amgen declined to comment on the patent issue or to make an official available to discuss the dosage and pricing issues.

Crosslin, who depends on Social Security for his income, couldn't afford the $3,000 a month that Medicare required him to pay for sotorasib, but he has received assistance from Amgen and a charity that covers costs for patients below a certain income.

While the drug has worked well for Crosslin and other patients, its overall modest impact on lung cancer suggests that $5,000, rather than $20,000, might be a more appropriate price, Ratain said.

In the company's phase 3 clinical trial for advanced lung cancer patients, sotorasib kept patients alive for about a month longer than docetaxel, the current, highly toxic standard of care. Docetaxel is a generic drug for which Medicare pays about $1 per injection. The trial was so unconvincing that the FDA sent Amgen back to do another.

Ratain, a staunch critic of Amgen's handling of sotorasib, told Centers for Medicare & Medicaid Services officials at a recent meeting that they should pay for sotorasib on a basis of 240 mg per day. But CMS would do that only "if there is a change in the drug's FDA-approved dosage," spokesperson Aaron Smith said.

Drug companies generally don't want to spend money on trials like the one the FDA ordered on sotorasib. In 2018, Ratain and other researchers used their institutions' funding to conduct a dosing trial on the prostate cancer drug abiraterone, marketed under the brand name Zytiga by Johnson & Johnson. They found that taking one 250-mg pill with food was just as effective as taking four on an empty stomach, as the label called for.

Although J&J hasn't changed the Zytiga label, the evidence generated in that trial was strong enough for the standards-setting National Comprehensive Cancer Network to change its recommendations.

Post-marketing studies like that one are hard to conduct, Emory's Harvey said. Patients are reluctant to join a trial in which they may have to take a lower dosage, since most people tend to believe "the more the better," he said.

"It's better for everyone to find the right dose before a drug is out on the market," Harvey said. "Better for the patient, and better for the company, which can sell more of a good drug if the patients aren't getting sick and no longer taking it."

Arthur Allen: aallen@kff.org, @ArthurAllen202

Biden Team's Tightrope: Reining In Rogue Obamacare Agents Without Slowing Enrollment

KFF Health News, May 7, 2024

Fighting the problem presents tension for the administration: how to thwart the bad actors without affecting ACA sign-ups.

This article was published on Tuesday, May 7, 2024 in KFF Health News.

By Julie Appleby

President Joe Biden counts among his accomplishments the record-high number of people, more than 21 million, who enrolled in Obamacare plans this year. Behind the scenes, however, federal regulators are contending with a problem that affects people's coverage: rogue brokers who have signed people up for Affordable Care Act plans, or switched them into new ones, without their permission.

Fighting the problem presents tension for the administration: how to thwart the bad actors without affecting ACA sign-ups.

Complaints about these unauthorized changes — which can cause affected policyholders to lose access to medical care, pay higher deductibles, or even incur surprise tax bills — rose sharply in recent months, according to brokers who contacted KFF Health News and federal workers who asked not to be identified.

Ronnell Nolan, president and CEO of the trade association Health Agents for America, said her group has suggested to the Centers for Medicare & Medicaid Services that it add two-factor authentication to healthcare.gov or send text alerts to consumers if an agent tries to access their accounts. But the agency told her it doesn't always have up-to-date contact information.

"We've given them a whole host of ideas," she said. "They say, ‘Be careful what you wish for.' But we don't mind going an extra step if you can stop this fraud and abuse, because clients are being hurt."

Some consumers are pursued when they respond to misleading social media marketing ads promising government subsidies, but most have no idea how they fell victim to plan-switching. Problems seem concentrated in the 32 states using the federal exchange.

Federal regulators have declined to say how many complaints about unauthorized sign-ups or plan switches they've received, or how many insurance agents they've sanctioned as a result. But the problem is big enough that CMS says it's working on technological and regulatory solutions. Affected consumers and agents have filed a civil lawsuit in federal district court in Florida against private-sector firms allegedly involved in unauthorized switching schemes.

Biden has pushed hard to make permanent the enhanced subsidies first put in place during the covid pandemic that, along with other steps including increased federal funding for outreach, helped fuel the strong enrollment growth. Biden contrasts his support for the ACA with the stance of former President Donald Trump, who supported attempts to repeal most of the law and presided over funding cuts and declining enrollment.

Most proposed solutions to the rogue-agent problem involve making it more difficult for agents to access policyholder information or requiring wider use of identity questions tied to enrollees' credit history. The latter could be stumbling blocks for low-income people or those with limited financial records, said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University.

"That is the knife edge the administration has to walk," said Corlette, "protecting consumers from fraudulent behavior while at the same time making sure there aren't too many barriers."

Jeff Wu, acting director of the Center for Consumer Information & Insurance Oversight, said in a statement that the agency is evaluating options on such factors as how effective they would be, their impact on consumers' ability to enroll, and how fast they could be implemented.

The agency is also working closely, he wrote, with insurance companies, state insurance departments, and law enforcement "so that agents violating CMS rules or committing fraud face consequences." And it is reaching out to states that run their own ACA markets for ideas.

That's because Washington, D.C., and the 18 states that run their own ACA marketplaces have reported far fewer complaints about unauthorized enrollment and plan-switching. Most include layers of security in addition to those the federal marketplace has in place — some use two-factor authentication — before agents can access policyholder information.

California, for example, allows consumers to designate an agent and to "log in and add or remove an agent at will," said Robert Kingston, interim director of outreach and sales for Covered California, the state's ACA marketplace. The state can also send consumers a one-time passcode to share with an agent of their choice. Consumers in Colorado and Pennsylvania can similarly designate specific agents to access their accounts.

By contrast, agents can more easily access policyholder information when using private-sector websites that link them to the federal ACA market — all they need is a person's name, date of birth, and state of residence — to enroll them or switch their coverage.

CMS has approved dozens of such "enhanced direct enrollment" websites run by private companies, which are designed to make it easier and faster for agents certified to offer insurance through healthcare.gov.

Rules went into effect last June requiring agents to get written or recorded consent from clients before enrolling them or changing their coverage, but brokers say they're rarely asked to produce the documentation. If CMS makes changes to healthcare.gov — such as adding passcodes, as California has — it would need to require all alternative-enrollment partners to do the same.

The largest is San Francisco-based HealthSherpa, which assisted 52% of active enrollments nationally for this year, said CEO George Kalogeropoulos.

The company has a 10-person fraud investigation team, he said, which has seen "a significant spike in concerns about unauthorized switching." They report problems to state insurance departments, insurance carriers, and federal regulators "and refer consumers to advocates on our team to make sure their plans are corrected."

Solutions must be "targeted," he said. "The issue with some of the solutions proposed is it negatively impacts the ability of all consumers to get enrolled."

Most people who sign up for ACA plans are aided by agents or platforms like HealthSherpa, rather than doing it themselves or seeking help from nonprofit organizations. Brokers don't charge consumers; instead, they receive commissions from insurers participating in state and federal marketplaces for each person they enroll in a plan.

While California officials say their additional layers of authentication have not noticeably affected enrollment numbers, the state's recent enrollment growth has been slower than in states served by healthcare.gov.

Still, Covered California's Kingston pointed to a decreased number of uninsured people in the state. In 2014, when much of the ACA was implemented, 12.5% of Californians were uninsured, falling to 6.5% in 2022, according to data compiled by KFF. That year, the share of people uninsured nationwide was 8%.

Corlette said insurers have a role to play, as do states and CMS.

"Are there algorithms that can say, ‘This is a broker with outlier behavior'?" Insurance companies could then withhold commissions "until they can figure it out," she said.

Kelley Schultz, vice president of commercial policy at AHIP, the trade association for large insurance companies, said sharing more information from the government marketplace about which policies are being switched could help insurers spot patterns.

CMS could also set limits on plan switches, as there is generally no legitimate need for multiple changes in a given month, Schultz said.

Julie Appleby: jappleby@kff.org, @Julie_appleby

Stranded in the ER, Seniors Await Hospital Care and Suffer Avoidable Harm

KFF Health News, May 6, 2024

Adults 65 and older, who account for nearly 20% of ER visits, are especially vulnerable during long waits for care.

This article was published on Monday, May 6, 2024 in KFF Health News.

By Judith Graham

Every day, the scene plays out in hospitals across America: Older men and women lie on gurneys in emergency room corridors moaning or suffering silently as harried medical staff attend to crises. 

Even when physicians determine these patients need to be admitted to the hospital, they often wait for hours — sometimes more than a day — in the ER in pain and discomfort, not getting enough food or water, not moving around, not being helped to the bathroom, and not getting the kind of care doctors deem necessary.

"You walk through ER hallways, and they're lined from end to end with patients on stretchers in various states of distress calling out for help, including a number of older patients," said Hashem Zikry, an emergency medicine physician at UCLA Health.

Physicians who staff emergency rooms say this problem, known as ER boarding, is as bad as it's ever been — even worse than during the first years of the covid-19 pandemic, when hospitals filled with desperately ill patients.

While boarding can happen to all ER patients, adults 65 and older, who account for nearly 20% of ER visits, are especially vulnerable during long waits for care. Also, seniors may encounter boarding more often than other patients. The best estimates I could find, published in 2019, before the covid-19 pandemic, suggest that 10% of patients were boarded in ERs before receiving hospital care. About 30% to 50% of these patients were older adults.

"It's a public health crisis," said Aisha Terry, an associate professor of emergency medicine at George Washington University School of Medicine and Health Sciences and the president of the board of the American College of Emergency Physicians, which sponsored a summit on boarding in September.

What's going on? I spoke to almost a dozen doctors and researchers who described the chaotic situation in ERs. They told me staff shortages in hospitals, which affect the number of beds available, are contributing to the crisis. Also, they explained, hospital administrators are setting aside more beds for patients undergoing lucrative surgeries and other procedures, contributing to bottlenecks in ERs and leaving more patients in limbo.

Then, there's high demand for hospital services, fueled in part by the aging of the U.S. population, and backlogs in discharging patients because of growing problems securing home healthcare and nursing home care, according to Arjun Venkatesh, chair of emergency medicine at the Yale School of Medicine.

The impact of long ER waits on seniors who are frail, with multiple medical issues, is especially serious. Confined to stretchers, gurneys, or even hard chairs, often without dependable aid from nurses, they're at risk of losing strength, forgoing essential medications, and experiencing complications such as delirium, according to Saket Saxena, a co-director of the geriatric emergency department at the Cleveland Clinic.

When these patients finally secure a hospital bed, their stays are longer and medical complications more common. And new research finds that the risk of dying in the hospital is significantly higher for older adults when they stay in ERs overnight, as is the risk of adverse events such as falls, infections, bleeding, heart attacks, strokes, and bedsores.

Ellen Danto-Nocton, a geriatrician in Milwaukee, was deeply concerned when an 88-year-old relative with "strokelike symptoms" spent two days in the ER a few years ago. Delirious, immobile, and unable to sleep as alarms outside his bed rang nonstop, the older man spiraled downward before he was moved to a hospital room. "He really needed to be in a less chaotic environment," Danto-Nocton said.

Several weeks ago, Zikry of UCLA Health helped care for a 70-year-old woman who'd fallen and broken her hip while attending a basketball game. "She was in a corner of our ER for about 16 hours in an immense amount of pain that was very difficult to treat adequately," he said. ERs are designed to handle crises and stabilize patients, not to "take care of patients who we've already decided need to be admitted to the hospital," he said.

How common is ER boarding and where is it most acute? No one knows, because hospitals aren't required to report data about boarding publicly. The Centers for Medicare & Medicaid Services retired a measure of boarding in 2021. New national measures of emergency care capacity have been proposed but not yet approved.

"It's not just the extent of ED boarding that we need to understand. It's the extent of acute hospital capacity in our communities," said Venkatesh of Yale, who helped draft the new measures.

In the meantime, some hospital systems are publicizing their plight by highlighting capacity constraints and the need for more hospital beds. Among them is Massachusetts General Hospital in Boston, which announced in January that ER boarding had risen 32% from October 2022 to September 2023. At the end of that period, patients admitted to the hospital spent a median of 14 hours in the ER and 26% spent more than 24 hours.

Maura Kennedy, Mass General's chief of geriatric emergency medicine, described an 80-something woman with a respiratory infection who languished in the ER for more than 24 hours after physicians decided she needed inpatient hospital care.

"She wasn't mobilized, she had nothing to cognitively engage her, she hadn't eaten, and she became increasingly agitated, trying to get off the stretcher and arguing with staff," Kennedy told me. "After a prolonged hospital stay, she left the hospital more disabled than she was when she came in."

When I asked ER doctors what older adults could do about these problems, they said boarding is a health system issue that needs health system and policy changes. Still, they had several suggestions.

"Have another person there with you to advocate on your behalf," said Jesse Pines, chief of clinical innovation at US Acute Care Solutions, the nation's largest physician-owned emergency medicine practice. And have that person speak up if they feel you're getting worse or if staffers are missing problems.

Alexander Janke, a clinical instructor of emergency medicine at the University of Michigan, advises people, "Be prepared to wait when you come to an ER" and "bring a medication list and your medications, if you can."

To stay oriented and reduce the possibility of delirium, "make sure you have your hearing aids and eyeglasses with you," said Michael Malone, medical director of senior services for Advocate Aurora Health, a 20-hospital system in Wisconsin and northern Illinois. "Whenever possible, try to get up and move around."

Friends or family caregivers who accompany older adults to the ER should ask to be at their bedside, when possible, and "try to make sure they eat, drink, get to the bathroom, and take routine medications for underlying medical conditions," Malone said.

Older adults or caregivers who are helping them should try to bring "things that would engage you cognitively: magazines, books … music, anything that you might focus on in a hallway where there isn't a TV to entertain you," Kennedy said.

"Experienced patients often show up with eye masks and ear plugs" to help them rest in ERs with nonstop stimulation, said Zikry of UCLA. "Also, bring something to eat and drink in case you can't get to the cafeteria or it's a while before staffers bring these to you."

We're eager to hear from readers about questions you'd like answered, problems you've been having with your care, and advice you need in dealing with the healthcare system. Visit kffhealthnews.org/columnists to submit your requests or tips.

Judith Graham: khn.navigatingaging@gmail.com, @judith_graham

Millions Were Booted From Medicaid. The Insurers That Run It Gained Medicaid Revenue Anyway.

KFF Health News, April 29, 2024

At least two of the five largest publicly traded companies selling plans have continued to increase revenue from the program.

This article was published on Friday, April 26, 2024 in KFF Health News.

By Phil Galewitz

Private Medicaid health plans lost millions of members in the past year as pandemic protections that prohibited states from dropping anyone from the government program expired.

But despite Medicaid's unwinding, as it's known, at least two of the five largest publicly traded companies selling plans have continued to increase revenue from the program, according to their latest earnings reports.

"It's a very interesting paradox," said Andy Schneider, a research professor at Georgetown University's McCourt School of Public Policy, of plans' Medicaid revenue increasing despite enrollment drops.

Medicaid, the state-federal health program for low-income and disabled people, is administered by states. But most people enrolled in the program get their healthcare through insurers contracted by states, including UnitedHealthcare, Centene, and Molina.

The companies persuaded states to pay them more money per Medicaid enrollee under the assumption that younger and healthier people were dropping out — presumably for Obamacare coverage or employer-based health insurance, or because they didn't see the need to get coverage — leaving behind an older and sicker population to cover, their executives have told investors.

Several of the companies reported that states have made midyear and retrospective changes in their payments to plans to account for the worsening health status of members.

In an earnings call with analysts on April 25, Molina Healthcare CEO Joe Zubretsky said 19 states increased their payment rates this year to adjust for sicker Medicaid enrollees. "States have been very responsive," Zubretsky said. "We couldn't be more pleased with the way our state customers have responded to having rates be commensurate with normal cost trends and trends that have been influenced by the acuity shift."

Health plans have faced much uncertainty during the Medicaid unwinding, as states began reassessing enrollees' eligibility and dropping those deemed no longer qualified or who lost coverage because of procedural errors. Before the unwinding, plans said they expected the overall risk profile of their members to go up because those remaining in the program would be sicker.

UnitedHealthcare, Centene, and Molina had Medicaid revenue increases ranging from 3% to 18% in 2023, according to KFF. The two other large Medicaid insurers, Elevance and CVS Health, do not break out Medicaid-specific revenue.

The Medicaid enrollment of the five companies collectively declined by about 10% from the end of March 2023 through the end of December 2023, from 44.2 million people to 39.9 million, KFF data shows.

In the first quarter of 2024, UnitedHealth's Medicaid revenue rose to $20.5 billion, up from $18.8 billion in the same quarter of 2023.

Molina on April 24 reported nearly $7.5 billion in Medicaid revenue in the first quarter of 2024, up from $6.3 billion in the same quarter a year earlier.

On April 26, Centene reported that its Medicaid enrollment fell 18.5% to 13.3 million in the first quarter of 2024 compared with the same period a year ago. The company's Medicaid revenue dipped 3% to $22.2 billion.

Unlike UnitedHealthcare, whose Medicaid enrollment fell to 7.7 million in March 2024 from 8.4 million a year prior, Molina's Medicaid enrollment rose in the first quarter of 2024 to 5.1 million from 4.8 million in March 2023. Molina's enrollment jump last year was partly a result of its having bought a Medicaid plan in Wisconsin and gained a new Medicaid contract in Iowa, the company said in its earnings news release.

Molina added 1 million members because states were prohibited from terminating Medicaid coverage during the pandemic. The company has lost 550,000 of those people during the unwinding and expects to lose an additional 50,000 by June.

About 90% of Molina Medicaid members have gone through the redetermination process, Zubretsky said.

The corporate giants also offset the enrollment losses by getting more Medicaid money from states, which they use to pass on higher payments to certain facilities or providers, Schneider said. By holding the money temporarily, the companies can count these "directed payments" as revenue.

Medicaid health plans were big winners during the pandemic after the federal government prohibited states from dropping people from the program, leading to a surge in enrollment to about 93 million Americans.

States made efforts to limit health plans' profits by clawing back some payments above certain thresholds, said Elizabeth Hinton, an associate director at KFF.

But once the prohibition on dropping Medicaid enrollees was lifted last spring, the plans faced uncertainty. It was unclear how many people would lose coverage or when it would happen. Since the unwinding began, more than 20 million people have been dropped from the rolls.

Medicaid enrollees' healthcare costs were lower during the pandemic, and some states decided to exclude pandemic-era cost data as they considered how to set payment rates for 2024. That provided yet another win for the Medicaid health plans.

Most states are expected to complete their Medicaid unwinding processes this year.

Phil Galewitz: pgalewitz@kff.org, @philgalewitz

CA Is Investing $500M in Therapy Apps for Youth. Advocates Fear It Won't Pay Off.

KFF Health News, April 26, 2024

California is believed to be the first state to offer a mental health app with free coaching to all young residents.

This article was published on Friday, April 26, 2024 in KFF Health News.

By Molly Castle Work

With little pomp, California launched two apps at the start of the year offering free behavioral health services to youths to help them cope with everything from living with anxiety to body acceptance.

Through their phones, young people and some caregivers can meet BrightLife Kids and Soluna coaches, some who specialize in peer support or substance use disorders, for roughly 30-minute virtual counseling sessions that are best suited to those with more mild needs, typically those without a clinical diagnosis. The apps also feature self-directed activities, such as white noise sessions, guided breathing, and videos of ocean waves to help users relax.

"We believe they're going to have not just great impact, but wide impact across California, especially in places where maybe it's not so easy to find an in-person behavioral health visit or the kind of coaching and supports that parents and young people need," said Gov. Gavin Newsom's health secretary, Mark Ghaly, during the Jan. 16 announcement.

The apps represent one of the Democratic governor's major forays into health technology and come with four-year contracts valued at $498 million. California is believed to be the first state to offer a mental health app with free coaching to all young residents, according to the Department of Health Care Services, which operates the program.

However, the rollout has been slow. So slow that one of the companies has missed a deadline to make its app available on Android phones. Only about 15,000 of the state's 12.6 million children and young adults have signed up for the apps, and school counselors say they've never heard of them.

Advocates for youth question the wisdom of investing taxpayer dollars in two private companies. Social workers are concerned the companies' coaches won't properly identify youths who need referrals for clinical care. And the spending is drawing lawmaker scrutiny amid a state deficit pegged at as much as $73 billion.

An App for That

Newsom's administration says the apps fill a need for young Californians and their families to access professional telehealth for free, in multiple languages, and outside of standard 9-to-5 hours. It's part of Newsom's sweeping $4.7 billion master plan for kids' mental health, which was introduced in 2022 to increase access to mental health and substance use support services. In addition to launching virtual tools such as the teletherapy apps, the initiative is working to expand workforce capacity, especially in underserved areas.

"The reality is that we are rarely 6 feet away from our devices," said Sohil Sud, director of Newsom's Children and Youth Behavioral Health Initiative. "The question is how we can leverage technology as a resource for all California youth and families, not in place of, but in addition to, other behavioral health services that are being developed and expanded."

The virtual platforms come amid rising depression and suicide rates among youth and a shortage of mental health providers. Nearly half of California youths from the ages of 12 to 17 report having recently struggled with mental health issues, with nearly a third experiencing serious psychological distress, according to a 2021 study by the UCLA Center for Health Policy Research. These rates are even higher for multiracial youths and those from low-income families.

But those supporting youth mental health at the local level question whether the apps will move the needle on climbing depression and suicide rates.

"It's fair to applaud the state of California for aggressively seeking new tools," said Alex Briscoe of California Children's Trust, a statewide initiative that, along with more than 100 local partners, works to improve the social and emotional health of children. "We just don't see it as fundamental. And we don't believe the youth mental health crisis will be solved by technology projects built by a professional class who don't share the lived experience of marginalized communities."

The apps, BrightLife Kids and Soluna, are operated by two companies: Brightline, a 5-year-old venture capital-backed startup; and Kooth, a London-based publicly traded company that has experience in the U.K. and has also signed on some schools in Kentucky and Pennsylvania and a health plan in Illinois. In the first five months of Kooth's Pennsylvania pilot, 6% of students who had access to the app signed up.

Brightline and Kooth represent a growing number of health tech firms seeking to profit in this space. They beat out dozens of other bidders including international consulting companies and other youth telehealth platforms that had already snapped up contracts in California.

Although the service is intended to be free with no insurance requirement, Brightline's app, BrightLife Kids, is folded into and only accessible through the company's main app, which asks for insurance information and directs users to paid licensed counseling options alongside the free coaching. After KFF Health News questioned why the free coaching was advertised below paid options, Brightline reordered the page so that, even if a child has high-acuity needs, free coaching shows up first.

The apps take an expansive view of behavioral health, making the tools available to all California youth under age 26 as well as caregivers of babies, toddlers, and children 12 and under. When KFF Health News asked to speak with an app user, Brightline connected a reporter with a mother whose 3-year-old daughter was learning to sleep on her own.

'It's Like Crickets'

Despite being months into the launch and having millions in marketing funds, the companies don't have a definitive rollout timeline. Brightline said it hopes to have deployed teams across the state to present the tools in person by midyear. Kooth said developing a strategy to hit every school would be "the main focus for this calendar year."

"It's a big state — 58 counties," Bob McCullough of Kooth said. "It'll take us a while to get to all of them."

Brightline's contract states that the company was required to launch downloadable apps for iOS and Android phones by January, but so far BrightLife Kids is available only on Apple phones. Brightline said it's aiming to launch the Android version over the summer.

"Nobody's really done anything like this at this magnitude, I think, in the U.S. before," said Naomi Allen, a co-founder and the CEO of Brightline. "We're very much in the early innings. We're already learning a lot."

The contracts, obtained by KFF Health News through a records request, show the companies operating the two apps could earn as much as $498 million through the contract term, which ends in June 2027, months after Newsom is set to leave office. And the state is spending hundreds of millions more on Newsom's virtual behavioral health strategy. The state said it aims to make the apps available long-term, depending on usage.

The state said 15,000 people signed up in the first three months. When KFF Health News asked how many of those users actively engaged with the app, it declined to say, noting that data would be released this summer.

KFF Health News reached out to nearly a dozen California mental health professionals and youths. None of them were aware of the apps.

"I'm not hearing anything," said Loretta Whitson, executive director of the California Association of School Counselors. "It's like crickets."

Whitson said she doesn't think the apps are on "anyone's" radar in schools, and she doesn't know of any schools that are actively advertising them. Brightline will be presenting its tool to the counselor association in May, but Whitson said the company didn't reach out to plan the meeting; she did.

Concern Over Referrals

Whitson isn't comfortable promoting the apps just yet. Although both companies said they have a clinical team on staff to assist, Whitson said she's concerned that the coaches, who aren't all licensed therapists, won't have the training to detect when users need more help and refer them to clinical care.

This sentiment was echoed by other school-based social workers, who also noted the apps' duplicative nature — in some counties, like Los Angeles, youths can access free virtual counseling sessions through Hazel Health, a for-profit company. Nonprofits, too, have entered this space. For example, Teen Line, a peer-to-peer hotline operated by Southern California-based Didi Hirsch Mental Health Services, is free nationwide.

While the state is also funneling money to the schools as part of Newsom's master plan, students and school-based mental health professionals voiced confusion at the large app investment when, in many school districts, few in-person counseling roles exist, and in some cases are dwindling.

Kelly Merchant, a student at College of the Desert in Palm Desert, noted that it can be hard to access in-person therapy at her school. She believes the community college, which has about 15,000 students, has only one full-time counselor and one part-time bilingual counselor. She and several students interviewed by KFF Health News said they appreciated having engaging content on their phone and the ability to speak to a coach, but all said they'd prefer in-person therapy.

"There are a lot of people who are seeking therapy, and people close to me that I know. But their insurances are taking forever, and they're on the waitlist," Merchant said. "And, like, you're seeing all these people struggle."

Fiscal conservatives question whether the money could be spent more effectively, like to bolster county efforts and existing youth behavioral health programs.

Republican state Sen. Roger Niello, vice chair of the Senate Budget and Fiscal Review Committee, noted that California is forecasted to face deficits for the next three years, and taxpayer watchdogs worry the apps might cost even more in the long run.

"What starts as a small financial commitment can become uncontrollable expenses down the road," said Susan Shelley of the Howard Jarvis Taxpayers Association.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

Molly Castle Work: mwork@kff.org, @mollycastlework

FTC Chief Says Tech Advancements Risk Healthcare Price Fixing

KFF Health News, April 24, 2024

Algorithms make it possible for companies to fix prices without explicitly coordinating with one another.

This article was published on Wednesday, April 24, 2024 in KFF Health News.

By Julie Rovner and David Hilzenrath

New technologies are making it easier for companies to fix prices and discriminate against individual consumers, the Biden administration's top consumer watchdog said Tuesday.

Algorithms make it possible for companies to fix prices without explicitly coordinating with one another, posing a new test for regulators policing the market, said Lina Khan, chair of the Federal Trade Commission, during a media event hosted by KFF.

"I think we could be entering a somewhat novel era of pricing," Khan told reporters.

Khan is regarded as one of the most aggressive antitrust regulators in recent U.S. history, and she has paid particular attention to the harm that technological advances can pose to consumers. Antitrust regulators at the FTC and the Justice Department set a record for merger challenges in the fiscal year that ended Sept. 30, 2022, according to Bloomberg News.

Last year, the FTC successfully blocked biotech company Illumina's over $7 billion acquisition of cancer-screening company Grail. The FTC, Justice Department, and Health and Human Services Department launched a website on April 18, healthycompetition.gov, to make it easier for people to report suspected anticompetitive behavior in the health care industry.

The American Hospital Association, the industry's largest trade group, has often criticized the Biden administration's approach to antitrust enforcement. In comments in September on proposed guidance the FTC and Justice Department published for companies, the AHA said that "the guidelines reflect a fundamental hostility to mergers."

Price fixing removes competition from the market and generally makes goods and services more expensive. The agency has argued in court filings that price fixing "is still illegal even if you are achieving it through an algorithm," Khan said. "There's no kind of algorithmic exemption to the antitrust laws."

By simply using the same algorithms to set prices, companies can effectively charge the same "even if they're not, you know, getting in a back room and kind of shaking hands and setting a price," Khan said, using the example of residential property managers.

Khan said the commission is also scrutinizing the use of artificial intelligence and algorithms to set prices for individual consumers "based on all of this particular behavioral data about you: the websites you visited, you know, who you had lunch with, where you live."

And as health care companies change the way they structure their businesses to maximize profits, the FTC is changing the way it analyzes behavior that could hurt consumers, Khan said.

Hiring people who can "help us look under the hood" of some inscrutable algorithms was a priority, Khan said. She said it's already paid off in the form of legal actions "that are only possible because we had technologists on the team helping us figure out what are these algorithms doing."

Traditionally, the FTC has policed health care by challenging local or regional hospital mergers that have the potential to reduce competition and raise prices. But consolidation in health care has evolved, Khan said.

Mergers of systems that don't overlap geographically are increasing, she said. In addition, hospitals now often buy doctor practices, while pharmacy benefit managers start their own insurance companies or mail-order pharmacies — or vice versa — pursuing "vertical integration" that can hurt consumers, she said.

The FTC is hearing increasing complaints "about how these firms are using their monopoly power" and "exercising it in ways that's resulting in higher prices for patients, less service, as well as worse conditions for health care workers," Khan said.

Policing Noncompetes

Khan said she was surprised at how many health care workers responded to the commission's recent proposal to ban "noncompete" clauses — agreements that can prevent employees from moving to new jobs. The FTC issued its final rule banning the practice on Tuesday. She said the ban was aimed at low-wage industries like fast food but that many of the comments in favor of the FTC's plan came from health professions.

Health workers say noncompete agreements are "both personally devastating and also impeded patient care," Khan said.

In some cases, doctors wrote that their patients "got really upset because they wanted to stick with me, but my hospital was saying I couldn't," Khan said. Some doctors ended up commuting long distances to prevent the rest of their families from having to move after they changed jobs, she said.

Julie Rovner: jrovner@kff.org, @jrovner

David Hilzenrath: dhilzenrath@kff.org, @DavidHilzenrath

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