Republicans are stuck on healthcare but they have no choice but to persevere

Republican health analysts said party officials had little choice but to keep trying to reach consensus — or at least enough consensus to pass a bill out of the House.

Can “pre-hospice” programs support the push towards value-based care?

Gerald Chinchar isn’t quite at the end of life, but the end is not far away. The 77-year-old fell twice last year, shattering his hip and femur, and now gets around his San Diego home in a wheelchair. His medications fill a dresser drawer, and congestive heart failure puts him at high risk of emergency room visits and long hospital stays.

Chinchar, a Navy veteran who loves TV Westerns, said that’s the last thing he wants. He still likes to go watch his grandchildren’s sporting events and play blackjack at the casino. “If they told me I had six months to live or go to the hospital and last two years, I’d say leave me home,” Chinchar said. “That ain’t no trade for me.”

Most aging people would choose to stay home in their last years of life. But for many, it doesn’t work out: They go in and out of hospitals, getting treated for flare-ups of various chronic illnesses. It’s a massive problem that costs the health care system billions of dollars and has galvanized health providers, hospital administrators and policymakers to search for solutions.

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Sharp HealthCare, the San Diego health system where Chinchar receives care, has devised a way to fulfill his wishes and reduce costs at the same time. It’s a pre-hospice program called Transitions, designed to give elderly patients the care they want at home and keep them out of the hospital.

Social workers and nurses from Sharp regularly visit patients in their homes to explain what they can expect in their final years, help them make end-of-life plans and teach them how to better manage their diseases. Physicians track their health and scrap unnecessary medications. Unlike hospice care, patients don’t need to have a prognosis of six months or less, and they can continue getting curative treatment for their illnesses, not just for symptoms.

Before the Transitions program started, the only option for many patients in a health crisis was to call 911 and be rushed to the emergency room. Now, they have round-the-clock access to nurses, one phone call away.

“Transitions is for just that point where people are starting to realize they can see the end of the road,” said San Diego physician Dan Hoefer, one of the creators of the program. “We are trying to help them through that process so it’s not filled with chaos.”

The importance of programs like Transitions is likely to grow in coming years as 10,000 baby boomers — many with multiple chronic diseases — turn 65 every day. Transitions was among the first of its kind, but several such programs, formally known as home-based palliative care, have since opened around the country. They are part of a broader push to improve people’s health and reduce spending through better coordination of care and more treatment outside hospital walls.

But a huge barrier stands in the way of pre-hospice programs: There is no clear way to pay for them. Health providers typically get paid for office visits and procedures, and hospitals still get reimbursed for patients in their beds. The services provided by home-based palliative care don’t fit that model.

In recent years, however, pressure has mounted to continue moving away from traditional payment systems. The Affordable Care Act has established new rules and pilot programs that reward the quality rather than the quantity of care. The health reform law, for example, set up “accountable care organizations” networks of doctors and hospitals that share responsibility for providing care to patients. They also share the savings when they rein in unnecessary spending by keeping people healthier. Those changes are helping to make home-based palliative care a more viable option.

In San Diego, Sharp’s palliative care program has a strong incentive to reduce the cost of caring for its patients, who are all in Medicare managed care. The nonprofit health organization receives a fixed amount of money per member each month, so it can pocket what it doesn’t spend on hospital stays and other costly medical interventions.

‘Something that works’

Palliative care focuses on relieving patients’ stress, pain and other symptoms as their health declines, and it helps them maintain their quality of life. It’s for people with serious illnesses, such as cancer, dementia and heart failure. The idea is for patients to get palliative care and then move into hospice care, but they don’t always make that transition.

The 2014 report “Dying in America,” by the Institute of Medicine, recommended that all people with serious advanced illness have access to palliative care. Many hospitals now have palliative care programs, delivered by teams of social workers, chaplains, doctors and nurses, for patients who aren’t yet ready for hospice. But until recently, few such efforts had opened beyond the confines of hospitals.

Kaiser Permanente set out to address this gap. Nearly 20 years ago, it created a home-based palliative care program, testing it in California and later in Hawaii and Colorado. Two studies by Kaiser and others found that participants were far more likely to be satisfied with their care and more likely to die at home than those not in the program. (Kaiser Health News, which produces California Healthline, is not affiliated with Kaiser Permanente.)

One of the studies, published in 2007, found that 36 percent of people receiving palliative care at home were hospitalized in their final months, compared with 59 percent of those getting standard care. The overall cost of care for those who participated in the program was a third less than for those who didn’t.

“We thought, ‘Wow. We have something that works,’” said Susan Enguidanos, an associate professor at the University of Southern California’s Leonard Davis School of Gerontology, who worked on both studies. “Immediately we wanted to go and change the world.”

But Enguidanos knew that Kaiser Permanente was unlike most health organizations. It was responsible for both insuring and treating its patients, so it had a clear financial motivation to improve care and control costs. Enguidanos said she talked to medical providers around the nation about this type of palliative care, but the concept didn’t take off at the time. Providers kept asking the same question: How do you pay for it without charging patients or insurers?

“I liken it to paddling out too soon for the wave,” she said. “We were out there too soon. … But we didn’t have the right environment, the right incentive.”

A bold idea

Dan Hoefer’s medical office is in the city of El Cajon, which sits in a valley in eastern San Diego County. Hoefer, a former hospice and home health medical director and nursing home doctor, has spent years treating elderly patients. He learned an important lesson when seeing patients in his office: Despite the medical care they received, “they were far more likely to be admitted to the hospital than make it back to see me.”

When his patients were hospitalized, many would decline quickly. Even if their immediate symptoms were treated successfully, they would sometimes leave the hospital less able to take care of themselves. They would get infections or suffer from delirium. Some would fall.

His patients were like cars with 300,000 miles on them, he said. They had a lot of broken parts. “You can’t just fix one thing and think you have solved the problem,” he said.

And trying to do so can be very costly. About a quarter of all Medicare spending for beneficiaries 65 or older is to treat people in their last year of life, according to a report by the Kaiser Family Foundation. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.)

Hoefer’s colleague, Suzi Johnson, a nurse and administrator in Sharp’s hospice program, saw the opposite side of the equation. Patients admitted into hospice care would make surprising turnarounds once they started getting medical and social support at home and stopped going to the hospital. Some lived longer than doctors had expected.

In 2005, the pair hatched and honed a bold idea: What if they could design a home-based program for patients before they were eligible for hospice?

Thus, Transitions was born. They modeled their new program in part on the Kaiser experiment, then set out to persuade doctors, medical directors and financial officers to try it. But they met resistance from physicians and hospital administrators who were used to getting paid for seeing patients.

“We were doing something that was really revolutionary, that really went against the culture of health care at the time,” Johnson said. “We were inspired by the broken system and the opportunity we saw to fix something.”

Despite the concerns, Sharp’s foundation board gave the pair a $180,000 grant to test out Transitions. And in 2007, they started with heart failure patients and later expanded the program to those with advanced cancer, dementia, chronic obstructive pulmonary disease and other progressive illnesses. They started to win over some doctors who appreciated having additional eyes on their patients, but they still encountered “some skepticism about whether it was really going to do any good for our patients,” said Jeremy Hogan, a neurologist with Sharp. “It wasn’t really clear to the group … what the purpose of providing a service like this was.”

Nevertheless, Hogan referred some of his dementia patients to the program and quickly realized that the extra support for them and their families meant fewer panicked calls and emergency room trips.

Hoefer said doctors started realizing home-based care made sense for these patients — many of whom were too frail to get to a doctor’s office regularly. “At this point in the patient’s life, we should be bringing health care to the patient, not the other way around,” he said.

Across the country, more doctors, hospitals and insurers are starting to see the value of home-based palliative care and are figuring out how to pay for it, said Kathleen Kerr, a health care consultant who researches palliative care.

“It is picking up steam,” she said. “You know you are going to take better care of this population, and you are absolutely going to have lower health care costs.”

Providers are motivated in part by a growing body of research. A study published in January showed that in the last three months of life, medical care for patients in a home-based palliative care program cost $12,000 less than for patients who were getting more typical treatment. Patients in the program also were more likely to go into hospice and to die at home, according to the study.

Two studies of Transitions in 2013 and 2016 reaffirmed that such programs save money. The second study, led by outside evaluators, showed it saved more than $4,200 per month on cancer patients and nearly $3,500 on those with heart failure.

The biggest differences occurred in the final two months of life, said one of the researchers, Brian Cassel, who is palliative care research director at the Virginia Commonwealth University School of Medicine in Richmond.

One reason for the success of these programs is that the teams really get to know patients, their hopes and aspirations, said Christine Ritchie, a professor at UC San Francisco’s medical school. “There is nothing like being in someone’s home, on their turf, to really understand what their life is like,” she said.

A home visit

Nurse Sheri Juan and social worker Mike Velasco, who both work for Sharp, walked up a wooden ramp to the Chinchars’ front door one recent January morning. Juan rolled a small suitcase behind her containing a blood pressure cuff, a stethoscope, books, a laptop computer and a printer.

Mary Jo Chinchar was already familiar with Transitions because her mother had been in the program before entering hospice and dying in 2015 at the age of 101. Late last year, Gerald Chinchar’s doctor recommended he enroll in it, explaining that his health was in a “tenuous position.”

Chinchar, who has nine grandchildren and four great-grandchildren, likes to tell stories about his time in the Navy, about traveling the country for jobs and living in San Francisco as a young man.

He has had breathing problems much of his life, suffering from asthma and chronic obstructive pulmonary disease — ailments he partly attributes to the four decades he spent painting and sandblasting fuel tanks for work. Chinchar also has diabetes, a disease that led to his mother’s death. He recently learned he had heart failure.

“I never knew I had any heart trouble,” he said. “That was the only good thing I had going for me.”

Now he’s trying to figure out how to keep it from getting worse: How much should he drink? What is he supposed to eat?

That’s where Juan comes in. Her job is to make sure the Chinchars understand Gerald’s disease so he doesn’t have a flare-up that could send him to the emergency room. She sat beside the couple in their living room, its bookshelves filled with titles on gardening and baseball. A basket of cough drops and a globe sat on a side table.

Any pain today? Juan asked. How is your breathing? Are you more fatigued than before? Is your weight the same? He replied that he had gained a few pounds recently but knew that was because he’d eaten too much bacon.

At this point in the patient’s life, we should be bringing health care to the patient, not the other way around.

Posted on the couple’s refrigerator was a notice advising them to call the nurse if Gerald had problems breathing, increased swelling or new chest pain.

Juan checked his blood pressure and examined his feet and legs for signs of more swelling. She looked through his medications and told him which ones the doctor wanted him to stop taking. “What we like to do as a palliative care program is streamline your medication list,” she said. “They may be doing more harm than good.”

Mary Jo Chinchar said she appreciates the visits, especially the advice about what Gerald should eat and drink. Her husband doesn’t always listen to her, she said. “It’s better to come from somebody else.”

A nearly impossible decision

On a rainy January day, doctors, nurses and social workers gathered in a small conference room for their bimonthly meeting to discuss patient cases. Information about the patients — their hospitalizations, medications, diagnoses — was projected on the wall. Their task: to decide if new patients were appropriate for Transitions and if current patients should remain there.

It’s nearly impossible to predict how long someone will live. It’s an inexact algorithm based on the severity of their disease, depression, appetite, social support and other factors. Nevertheless, the team tries to do just that, and they may recommend hospice for patients expected to live less than six months.

That was the case with an 87-year-old woman suffering from Alzheimer’s disease. She had fallen many times, slept about 16 hours a day and no longer had much of an appetite. Those were all signs that the woman may be close to death, so she was referred to hospice.

Patients typically stay in Transitions about seven or eight months, but some last as long as two years before they stabilize and are discharged from the program. Others go directly to hospice, and still others die while they are still in Transitions.

The group turned its attention to an 89-year-old woman with dementia, who believed she was still a young Navy wife. She suffered from depression and kidney disease, and had been hospitalized twice last year.

“She’s a perfect patient for Transitions,” Hoefer told the team, adding that she could benefit from extra help. Another good candidate, Hoefer said later, was El Cajon resident Evelyn Matzen, who is 94 and has dementia. She had started to lose weight and was having more difficulty caring for herself. They took her in because “we were worried that it was going to start what I call the revolving door of hospitalization,” Hoefer said.

About eight months after she joined the program, Matzen sat in Hoefer’s office as he checked her labs and listened to her chest. Her body was starting to slow down, but she was still doing well, he told her. “Whatever you are doing is working.”

Bill Matzen, who accompanied his mom to the appointment, said she had started to stabilize since going onto Transitions. “She is on less medication, she is in better condition, physically, mentally, the whole nine yards,” he said.

Hoefer explained that frail elderly patients have fewer reserves to tolerate medical treatment and especially hospitalization. Bill Matzen said his mother leaned that the hard way after a recent fall. Though the Transitions nurse had come to see her, the Matzens decided to go to the hospital because they were still concerned about a bruise on her head. While she was in the hospital, Evelyn Matzen started hallucinating and grew agitated.

Being in the hospital “kicks her back a notch or two,” her son said. “It takes her longer to recover than if she had been in a home environment.”

A changed climate

Outpatient palliative care programs are cropping up in various forms. Some new ones are run by insurers, others by health systems or hospice organizations. Others are for-profit, including Aspire Health, which was started by former senator Bill Frist in 2013.

Sutter Health operates a project called Advanced Illness Management to help patients manage symptoms and medications and plan for the future. The University of Southern California and Blue Shield of California recently received a $5 million grant to provide and study outpatient care.

“The climate has changed for palliative care,” said Enguidanos, the lead investigator on the USC-Blue Shield project.

Ritchie said she expects even more home-based programs in the years to come, especially if palliative care providers work alongside primary care doctors. “My expectation is that much of what is being done in the hospital won’t need to be done in the hospital anymore and it can be done in people’s homes,” she said.

Challenges remain, however. In addition to questions about reimbursement, not enough trained providers are available. And some doctors are unfamiliar with the approach, and patients may be reluctant, especially those who haven’t clearly been told they have a terminal diagnosis.

Now, some palliative care providers and researchers worry about the impact of President Donald Trump’s plans to repeal the Affordable Care Act and revamp Medicare.

“It would be horrible,” Kerr said. “Before, we had an inkling that this was helping a lot of folks. Now we know it is really helping.”

Gerald Chinchar, who grew up in Connecticut, said he never expected to live into old age. His father, a heavy drinker, died of cirrhosis of the liver at 47. In his family, Chinchar said, “you’re an old-timer if you make 60.”

Chinchar said he gave up drinking and is trying to eat less of his favorite foods — steak sandwiches and fish and chips. He just turned 77, a milestone he credits partly to the pre-hospice program.

“If I make 80, I figured I did pretty good,” he said. “And if I make 80, I’ll shoot for 85.”

KHN’s coverage in California is funded in part by Blue Shield of California Foundation.

Photo: IvelinRadkov, Getty Images

How did it come to this? Ryan and Trump pull healthcare bill after coming up short on votes.

U.S. Speaker of the House Paul Ryan answers questions at a press conference at the U.S. Capitol after President Trump’s healthcare bill was pulled from the floor of the House of Representatives. (Photo by Win McNamee/Getty Images)

Despite days of intense negotiations and last-minute concessions to win over wavering GOP conservatives and moderates, House Republican leaders Friday failed to secure enough support to pass their plan to repeal and replace the Affordable Care Act.

House Speaker Paul Ryan pulled the bill from consideration after he rushed to the White House to tell President Donald Trump that there weren’t the 216 votes necessary for passage.

“We came really close today, but we came up short,” he told reporters at a hastily called news conference.

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When pressed about what happens to the federal health law, he added, “We’re going to be living with Obamacare for the foreseeable future.”

Ryan originally had hoped to hold a floor vote on the measure Thursday — timed to coincide with the seventh anniversary of the ACA — but decided to delay that effort because GOP leaders didn’t have enough “yes” votes. The House had been in session Friday while members debated parts of the bill.

The legislation was damaged by a variety of issues raised by competing factions of the party. Many members were spooked by reports by the Congressional Budget Office showing that the bill would lead eventually to 24 million people losing insurance, while some moderate Republicans worried that ending the ACA’s Medicaid expansion would hurt low-income Americans.

At the same time, conservatives, especially the hard-right House Freedom Caucus that often has needled party leaders, complained that the bill kept too much of the ACA structure in place. They wanted a straight repeal of Obamacare, but party leaders said that couldn’t pass the Senate, where Republicans don’t have enough votes to stop a filibuster. So they chose to use a complicated legislative strategy called budget reconciliation that would allow them to repeal only parts of the ACA that affect federal spending.

The decision came after a chaotic week of negotiations, as party leaders sought to woo more conservatives. Trump personally lobbied 120 members through personal meetings or phone calls, according to a count provided Friday by his spokesman, Sean Spicer. “The president and the team here have left everything on the field,” Spicer said.

On Thursday evening, Trump dispatched Office of Management and Development Director Mick Mulvaney to tell his former House GOP colleagues that the president wanted a vote on Friday. It was time to move on to other priorities, including tax reform, he told House Republicans.

“He said the president needs this, the president has said he wants a vote tomorrow, up or down. If for any reason it goes down, we’re just going to move forward with additional parts of his agenda. This is our moment in time,” Rep. Chris Collins (R-New York), a loyal Trump ally, told reporters late Thursday. “If it doesn’t pass, we’re moving beyond health care. … We are done negotiating.”

Trump’s edict clearly irked some lawmakers, including the Freedom Caucus chairman, Rep. Mark Meadows (R-North Carolina), whose group of more than two dozen members represented the strongest bloc against the measure.

“Anytime you don’t have 216 votes, negotiations are not totally over,” he told reporters who had surrounded him in a Capitol basement hallway as he headed into the party’s caucus meeting.

Shortly before Ryan’s press conference, Trump called Washington Post reporter Robert Costa to say they were pulling the bill back from consideration. Costa said the president seemed at ease with the decision and did not blame Ryan for the defeat.

Trump, Ryan and other GOP lawmakers tweaked their initial package in a variety of ways to win over both conservatives and moderates. But every time one change was made to win votes in one camp, it repelled support in another.

The White House on Thursday accepted conservatives’ demands that the legislation strip federal guarantees of essential health benefits in insurance policies. But that was another problem for moderates, and Democrats suggested the provision would not survive in the Senate.

Republican moderates in the House — as well as the Senate — objected to the bill’s provisions that would shift Medicaid from an open-ended entitlement to a set amount of funding for states that would also give governors and state lawmakers more flexibility over the program. Moderates also were concerned that the package’s tax credits would not be generous enough to help older Americans — who could be charged five times more for coverage than their younger counterparts — afford coverage.

The House package also lost the support of key GOP allies, including the Club for Growth and Heritage Action. Physician, patient and hospital groups also opposed it.

It’s not clear what will happen next to the Republican effort to overturn or modify Obamacare. But White House officials told members Thursday that if they couldn’t pass the legislation, the president wanted to turn to other priorities, including tax reform. “The president understands this is it,” Spicer said. “We had this opportunity to — to change the trajectory of health care, to help improve — put a health care system in place and to end the nightmare that Republicans have campaigned on called Obamacare.”

As House health bill vote nears, what would be consequences of dumping essential benefits?

A last-minute attempt by conservative Republicans to dump standards for health benefits in plans sold to individuals would probably lower the average consumer’s upfront insurance costs, such as premiums and deductibles, said experts on both sides of the debate to repeal and replace the Affordable Care Act.

But, they add, it will likely also induce insurers to offer much skimpier plans, potentially excluding the gravely ill, and putting consumers at greater financial risk if they need care.

For example, a woman who had elected not to have maternity coverage could face financial ruin from an unintended pregnancy. A healthy young man who didn’t buy drug coverage could be bankrupted if diagnosed with cancer requiring expensive prescription medicine. Someone needing emergency treatment at a non-network hospital might not be covered.

What might be desirable for business would leave patients vulnerable.

“What you don’t want if you’re an insurer is only sick people buying whatever product you have,” said Christopher Koller, president of the Milbank Memorial Fund and a former Rhode Island insurance commissioner. “So the way to get healthy people is to offer cheaper products designed for the healthy people.”

The proposed change could give carriers wide room to do that by eliminating or shrinking “essential health benefits” including hospitalization, prescription drugs, mental health treatment and lab services from plan requirements — especially if state regulators don’t step in to fill the void, analysts said.

The Affordable Care Act requires companies selling coverage to individuals and families through online marketplaces to offer 10 essential benefits, which also include maternity, wellness and preventive services — plus emergency room treatment at all hospitals. Small-group plans offered by many small employers also must carry such benefits.

Conservative House Republicans want to exclude the rule from any replacement, arguing it drives up cost and stifles consumer choice.

On Thursday, President Donald Trump agreed after meeting with members of the conservative Freedom Caucus to leave it out of the measure under consideration, said White House Press Secretary Sean Spicer. “Part of the reason that premiums have spiked out of control is because under Obamacare, there were these mandated services that had to be included,” Spicer told reporters.

Pushed by Trump, House Republican leaders agreed late Thursday to a Friday vote on the bill but were still trying to line up support. “Tomorrow we will show the American people that we will repeal and replace this broken law because it’s collapsing and it’s failing families,” said House Speaker Paul Ryan (R-Wisconsin). “And tomorrow we’re proceeding.” When asked if he had the votes, Ryan didn’t answer and walked briskly away from the press corps.

But axing essential benefits could bring back the pre-ACA days when insurers avoided expensive patients by excluding services they needed, said Gary Claxton, a vice president and insurance expert at the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

“They’re not going to offer benefits that attract people with chronic illness if they can help it,” said Claxton, whose collection of old insurance policies shows what the market looked like before.

One Aetna plan didn’t cover most mental health or addiction services — important to moderate Republicans as well as Democrats concerned about fighting the opioid crisis. Another Aetna plan didn’t cover any mental health treatment. A HealthNet plan didn’t cover outpatient rehabilitative services.

Before the ACA most individual plans didn’t include maternity coverage, either.

The House replacement bill could make individual coverage for the chronically ill even more scarce than a few years ago because it retains an ACA rule that forces plans to accept members with preexisting illness, analysts said.

Before President Barack Obama’s health overhaul, insurers could reject sick applicants or charge them higher premiums.

Lacking that ability under a Republican law but newly able to shrink benefits, insurers might be more tempted than ever to avoid covering expensive conditions. That way the sickest consumers wouldn’t even bother to apply.

“You could see even worse holes in the insurance package” than before the ACA, said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University. “If we’re going into a world where a carrier is going to have to accept all comers and they can’t charge them based on their health status, the benefit design becomes a much bigger deal” in how insurers keep the sick out of their plans, she said.

Michael Cannon, an analyst at the libertarian Cato Institute and a longtime Obamacare opponent, also believes dumping essential benefits while forcing insurers to accept all applicants at one “community” price would weaken coverage for chronically ill people.

“Getting rid of the essential health benefits in a community-rated market would cause coverage for the sick to get even worse than it is under current law,” he said. Republicans “are shooting themselves in the foot if they offer this proposal.”

Cannon favors full repeal of the ACA, allowing insurers to charge higher premiums for more expensive patients and helping consumers pay for plans with tax-favored health savings accounts.

In an absence of federal requirements for benefits, existing state standards would become more important. Some states might move to upgrade required benefits in line with the ACA rules but others probably won’t, according to analysts.

“You’re going to have a lot of insurers in states trying to understand what existing laws they have in place,” Koller said. “It’s going to be really critical to see how quickly the states react. There are going to be some states that will not.”

Mary Agnes Carey and Phil Galewitz contributed to this story.

Photo: byakkaya, Getty Images

Government Accountability Office will investigate potential abuses with Orphan Drug Act

Acting on a request from three influential U.S. senators, the government’s accountability arm confirmed that it will investigate potential abuses of the Orphan Drug Act.

The Government Accountability Office still must determine the full scope of what it will look into and the methodology to be used. Determining the scope will take some months, said Chuck Young, GAO’s managing director for public affairs.

Earlier this month, Sens. Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa) and Tom Cotton (R-Arkansas) sent a letter to the GAO and raised the possibility that regulatory or legislative changes might be needed “to preserve the intent of this vital law” that gives drugmakers lucrative incentives to develop drugs for rare diseases.

Grassley’s office said Tuesday they expected the GAO to begin its work in about nine months. The delay is typical as the agency has a queue of requests it is pursuing.

The senators have asked the GAO to “investigate whether the ODA is still incentivizing product development for diseases with fewer than 200,000 affected individuals, as intended.”

Congress overwhelmingly passed the 1983 Orphan Drug Act to motivate pharmaceutical companies to develop drugs for people whose rare diseases had been ignored. Drugs approved as orphans are granted tax incentives and seven years of exclusive rights to market drugs that are needed by fewer than 200,000 patients in the U.S.

In recent months, reports of five- and six-figure annual price tags for orphan drugs have amplified long-simmering concerns about abuse of the law. The senators’ call for a GAO investigation reflects that sentiment.

“While few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process,” the letter states.

In January, Kaiser Health News published an investigation that found the orphan drug program is being manipulated by drugmakers to maximize profits and to protect niche markets for medicines being taken by millions.

That investigation, which also was published and aired by NPR, found that many drugs that now have orphan status aren’t entirely new. More than 70 were drugs first approved by the Food and Drug Administration for mass-market use. Those include cholesterol blockbuster Crestor, Abilify for psychiatric disorders and the rheumatoid arthritis drug Humira, the world’s best-selling drug.

Others are drugs that have received multiple exclusivity periods for two or more rare conditions.

The senators asked the GAO for a list of drugs approved or denied orphan status by the FDA. It also asked if resources at the FDA, which oversees the law, have “kept up with the number of requests” from drugmakers and whether there is consistency in the department’s reviews.

And they said it would be important to include patient experiences in the GAO review. The GAO does not provide updates on ongoing work but rather reports its findings once they complete an assignment.

The rare-disease drugs have become increasingly popular with pharmaceutical and biotech companies and are expected to comprise 21.4 percent of worldwide prescription sales by 2022, not including generics, according to consulting firm EvaluatePharma’s 2017 orphan drug report.

That’s in part because of the exorbitant prices that can be charged. Of the top 100 drugs in the U.S., the average cost per patient per year for an orphan drug was $140,443 in 2016, compared with $27,756 for a non-orphan, EvaluatePharma said.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Photo: Sezeryadigar, Getty Images

House GOP tosses individual mandate from ACA replacement but adds penalty for insurance lapses

The Affordable Care Act’s tax penalty for people who opt out of health insurance is one of the most loathed parts of the law, so it is no surprise that Republicans are keen to abolish it. But the penalty, called the individual mandate, plays a vital function: nudging healthy people into the insurance markets where their premiums help pay for the cost of care for the sick. That has required Republican lawmakers to come up with an alternative.

The GOP approach is called a “continuous coverage” penalty. It increases premiums for people who buy insurance if they have gone 63 consecutive days without a policy during the past 12 months. Their premiums would rise by 30 percent and that surcharge would last for a year. While the ACA assesses a fine for each year people don’t buy insurance, the GOP plan would punish those who decide to purchase it after not being in the market.

Much is at stake. If this approach fails to prod enough healthy people into buying insurance, rates for everyone else in the insurance pool will rise, destabilizing promises by President Donald Trump and GOP leaders to make their Obamacare replacement more affordable. The nonpartisan Congressional Budget Office projects that millions fewer people will buy insurance if the individual mandate is repealed and replaced with a continuous coverage surcharge.

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Why do people allow their insurance to lapse?

Some simply can’t afford the premiums, like Sheila Swartz. She and her husband, Don, who has a heart condition, dropped their policy in December after learning monthly premiums were going to increase by about $140 to $530. “You can’t get blood out of a turnip,” said Swartz, who lives outside Nashville, Tenn., and works as a house cleaner. “If you can’t afford that premium, you can’t afford that premium.”

This KHN story also ran on NPR. It can be republished for free (details).
Others stop paying premiums when they lose a job or are hit with unexpected costs in other areas, such as major home or car repairs. “If you have to pay rent or health insurance, you are probably not going to choose health insurance,” said Bruce Jugan, a health insurance broker in Montebello, Calif.

Some people try to game the system, taking the calculated risk of going without insurance until they get sick or know they need expensive medical care, such as for maternity or an elective surgery.

Both the Affordable Care Act and the GOP proposal include a deterrent by limiting people from enrolling anytime they want. People must wait for annual enrollment periods, usually in the final weeks of the year, meaning that some people might have to wait months before getting coverage. (People still can get insurance during special enrollment periods if they lose a job, get divorced or have another specified major life change.)

How tough is the GOP penalty compared with the individual mandate?

Under the ACA, the average individual mandate penalty in 2015 was $442, according to the Internal Revenue Service.  The GOP penalty would vary based on cost of premiums but generally would be more expensive than paying the mandate’s penalty. A 40-year-old with annual premiums of $4,328 would pay an extra $1,298 because of the GOP surcharge.

“It’s got teeth,” said Cheryl Damberg, a Rand Corp. economist. “In some ways, it’s a more punishing penalty, and it’s going to hit people who are least capable of financially affording it.”

Seth Chandler, a law professor at the University of Houston Law Center who has been critical of the Affordable Care Act’s insurance markets, said he is skeptical the GOP surcharge is high enough to make people enroll. “I am concerned that the Republicans are succumbing to the same softness of heart as the Democrats succumbed too when they set the individual mandate [fine],” he said. “If you start to see insurance companies object or drop out of the markets, that’s a sign this thing is miscalculated.”

Two conservative economists at the American Enterprise Institute, Joseph Antos and James Capretta, argue the penalty is “far too small” to be effective. “Healthy consumers are likely to take their chances,” they wrote. “With the repeal of the individual mandate, and the retention of the ACA’s insurance rules, the overall effect would be significant market turbulence, starting immediately in 2017.”

The CBO predicts that there would be a brief increase in the number of people holding insurance in 2018, as roughly 1 million people buy coverage to avoid the surcharge. In most years afterward, however, about 2 million fewer people would buy policies, either because of the surcharge or because of the requirement they provide documentation proving they had been insured. The CBO said healthy people in particular would be more likely to avoid buying policies.

The plan has some parallels to Medicare’s late enrollment penalty, which is applied to premiums for people who did not sign up upon turning 65. But Christopher Koller, a former Rhode Island health insurance commissioner, doubts the GOP penalty would be as effective. “Medicare is an entitlement with the force of government behind it,” said Koller, now president of the Milbank Memorial Fund, a foundation in New York that focuses on healthy populations. “You get lots of notices about what your obligations are as you approach that age.”

What about people who can’t afford premiums?

The GOP surcharge contains no hardship exemptions, unlike the individual mandate, which allowed people to escape paying a penalty if premiums would have eaten up too much of their income (8.16 percent in 2017).

In 2015, 5.6 million people paid the individual mandate penalty, but another 11 million claimed a hardship exemption, according to the IRS.

Lower-income people are going to have even more trouble buying — and keeping — coverage under the GOP plan, experts said. The ACA’s premium subsidies are based on income, and millions of people on the poorer end of the spectrum do not have to pay anything for premiums if they choose the cheapest plan. The GOP plan would offer a flat tax credit that adjusts only for age. The penalties would make some even more reluctant to buy insurance — especially if they are relatively healthy.

“I think we would just end up with a lot more uninsured people, and they would clearly be the type of people who are less able to navigate and less able to afford insurance,” said Geoffrey Joyce, director of health policy for the University of Southern California Schaeffer Center for Health Policy & Economics.

Republican lawmakers say their plan rightly places the responsibility on individuals. It is a view shared by some health insurance brokers like Helena Ruffin, a broker in Playa Vista, Calif. She said that a continuous coverage requirement would “limit those people who are not playing by the rules.”

“I am favor of the penalties,” she said. “Whether or not people are going to pay attention is another story.”

Photo: YinYang, Getty Images

Pharma TV ad spend promoting prescription drugs has increased 62 percent since 2012

Laura Ries was moved to action when she saw a TV commercial that portrayed a woman enjoying time with her grandchildren after taking Lyrica, a prescription medication for diabetic nerve pain. Ries’ elderly mother suffered from just that problem.

“The ad showed someone who was enjoying life again,” said Ries, president of a marketing strategy firm in Atlanta, who then researched the drug and spoke with her mother’s doctor. “This … was very relatable to what my mom was experiencing.”

Her reaction was precisely the aim of direct-to-consumer (DTC) advertising: getting patients or their family members to remember a drug’s name and ask by name for a prescription.

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Spending on such commercials grew 62 percent since 2012, even as ad spending for most other product types was flat.

“Pharmaceutical advertising has grown more in the past four years than any other leading ad category,” said Jon Swallen, chief research officer at Kantar Media, a consulting firm that tracks multimedia advertising. It exceeded $6 billion last year, with television picking up the lion’s share, according to Kantar data. Shows such as the major network’s evening news programs, the CBS comedy “Mike & Molly” and ABC’s daytime drama “General Hospital” are heavy with drug ads, Kantar data show.

But the proliferation of drug advertisements has generated new controversy, in part because the ads inevitably promote high-priced drugs, some of which doctors say have limited practical utility for the average patient-viewer. The cost of Lyrica, the drug Ries was asked about for her mom, is about $400 for 60 capsules, for example. Critics say the ads encourage patients to ask their doctors for expensive, often marginal — and sometimes inappropriate — drugs that are fueling spiraling health care spending.

The American Medical Association took a hard-line position on these ads in 2015 by calling for a ban, saying “direct-to-consumer advertising also inflates demand for new and more expensive drugs, even when these drugs may not be appropriate.”

Such a prohibition is unlikely. Previous efforts to push such an outcome have stalled, generally on free-speech arguments by the powerful drug lobby and assertions that such ads provide valuable information to patients about treatment options.

Spending zooms

One thing is certain: DTC advertising is big. And, as nearly everyone who watches TV knows, it’s getting bigger.

Some programs — the nightly news and sitcoms aimed at older Americans — get most of their advertising from drugmakers. A Kantar analysis shows 72 percent of commercial breaks on the “CBS Evening News” have at least one pharmaceutical advertisement. Commonly, the ads target a range of conditions that generally affect this demographic, such as dry eyes, erectile dysfunction, pain and constipation. Sixty-two percent of commercial breaks during “General Hospital” include a drug ad.

“A lot of these ads target the caregivers and the children of older folks,” said consultant Tom Lom, a former managing partner of Saatchi & Saatchi Consumer Healthcare, which has created ads for pharmaceutical giants from Pfizer to Merck.

Drugmakers were on track to spend an estimated $6.4 billion on DTC advertising in the U.S. last year, up 5 percent from 2015, according to Kantar. In 2012, spending for pharmaceutical TV ads was the 12th-largest category. By last year, drug ads were sixth. While substantial, the spending was less than the amount spent by automakers, retail and restaurants. Networks — ABC, CBS, NBC — along with cable channels like CNN — draw a lot of the pharmaceutical advertising. According to Swallen, the effect of the ban on networks would be a daunting, 8 percent loss of total ad revenue, and its impact would be most evident for programming popular with viewers older than 60 ­— for instance, evening news shows. Similarly, cable networks such as the Hallmark Channel, which draw viewers from this demographic, would feel the pinch because they “have more skin in the game,” he said.

Why some drugs are advertised

For years, the DTC industry was mostly focused on drugs that relieved chronic, typically non-fatal afflictions like heartburn (Nexium), allergies (Claritin) and high cholesterol (Lipitor).

More recently, Lom said, advertising has focused on cancer and illnesses affecting seniors, such as Alzheimer’s disease. Ads for drugs that target constipation caused by other drugs — opioids — hit the scene last year, reflecting the large numbers of people taking painkillers.

For years, the DTC industry was mostly focused on drugs that relieved non-fatal afflictions like allergies. Advertising has more recently focused on cancer and illnesses affecting seniors. (Screenshot)
In 2016, the top three ads based on total spending were Lyrica, with $313 million in spending; rheumatoid arthritis drug Humira at $303 million; and Eliquis, a treatment for a type of heart arrhythmia, at $186 million, according to Kantar.

Reasons why some drugs are advertised more than others vary, with drugmakers evaluating which products are most likely to bring them the most revenue.

Drugmakers don’t care “whether it’s a rare, expensive drug or a popular cheap drug,” said Amanda Starc, associate professor of strategy at Northwestern’s Kellogg School of Management. “They’re looking at the marginal return on advertising. A small number of customers spending a lot or a big number spending a little.”

How advertising plays to consumers

The United States is one of two countries — the other is New Zealand — that allows DTC advertising, a long-standing practice that became more common in the mid-1980s after the FDA issued new rules. Most advertising was in print. But more television advertising began appearing when some of the rules were relaxed a decade later.

Lom said the ads give consumers a “head start” on knowing about drugs that might be available for their ailments, speeding up the consumer education process.

But, surprisingly, 62 percent of physicians, for instance, said they would or might prescribe an innocuous, even placebo treatment to a patient who didn’t need it but demanded it, according to a 2016 poll conducted by Medscape, an online physician education website.

Current rules require that if a drug is named in an ad, information must be included about side effects and adverse reactions. That makes it even more important that drug advertising be visually captivating — if not surprising, say consultants.

The ad for Spiriva, a drug for people with lung diseases that can make it hard to breathe, shows an elephant sitting on actress Jeanette O’Connor’s chest. During the 2016 Super Bowl, viewers saw a man emerging from a restroom with a pleased look on his face in an advertisement about opioid-induced constipation. Cialis, which treats erectile dysfunction, uses images of couples in side-by-side bathtubs, which sticks in consumers’ minds.

Meanwhile, the side effects are glossed over. “They describe the risks at the same time they play pleasant music — or show pleasant pictures — which helps to distract people from getting the message,” says Dr. Aaron Kesselheim, associate professor of medicine at Harvard Medical School.

And while President Donald Trump said he wants to reduce the high costs of prescription medicines, he is also likely to encourage fewer government restrictions on the development and marketing of drugs.

But whether the advertising empowers patients or leaves them vulnerable is debatable.

Those that do advertise, however, appear to have a leg up. Ries, the brand consultant, says it wasn’t just the ad that helped her to remember Lyrica, but the name, too, which was easy to spell and pronounce.

Reis said her mother did take the Lyrica “and it’s helped.” That’s a good thing, says the brand guru who takes pride in looking out for her mom. “The ad spurred the conversation.”

Photo: Devrimb, Getty Images

Texas Medicaid payment reform initiative curbs elective early deliveries

Even though the health risks to babies born before they reach full term at 39 weeks have long been recognized, nearly 1 in 10 babies in the United States is born prematurely. Texas decided to try to change that.

In 2011, the Texas Medicaid program was the first in the country to take steps to curb elective early deliveries by refusing to pay providers who induced early labor or performed a cesarean section that wasn’t medically necessary before 39 weeks. In the first two years after that, Texas reduced the rate of unnecessary early delivery by as much as 14 percent. The state’s efforts also led to an increase in the length of pregnancies by nearly a week, with infants weighing on average nearly half a pound more, a new study found.

Those reimbursement changes were part of a Texas Medicaid payment reform law. Before it took effect, 10.63 percent of Medicaid single births in the state were early elective deliveries, according to the study, which was published in the March issue of Health Affairs.  After the law passed, the percentage of unnecessary early deliveries declined 2.03 percentage points.

About half of the decline was due to the payment reforms, while the rest could be attributed to other efforts to reduce early deliveries, unrelated trends and the economy, said Heather Dahlen, a research associate at Medica Research Institute in Minnetonka, Minnesota, and the study’s lead author.

Still, “in order for the rate to fall that much, there was a relatively significant effect on the target population,” Dahlen said.

The impact on early elective delivery was greatest for Latinos, whose rate declined 1.77 percentage points to 8.14 percent. The rate for non-Latino blacks declined 1.4 percentage points to 9.57 percent, while non-Latino whites saw a much smaller decline — 0.72 percentage point, to 8.43 percent.

Infants born before 39 weeks are more likely to have a range of health problems, including respiratory disorders, sepsis and feeding issues, and to be admitted to hospital neonatal intensive care units. Doctors and expectant mothers who opt for early delivery may not realize the risk or choose to go ahead for convenience. In some rural areas, women may be encouraged to schedule early deliveries to ensure they’re able to get to the hospital in time.

For the study, researchers analyzed data from 2009 to 2013 on the national Vital Statistics System’s Natality Detail Files, which is derived from information reported on birth certificates.

The federal-state Medicaid program for low-income people pays for roughly half of all births in the United States. After Texas passed its law, five other states passed similar laws in 2013: Georgia, Michigan, New Mexico, New York and South Carolina.

Reducing preterm births generally, and early elective deliveries in particular, is a priority for many groups, including health care providers, hospitals and patient-advocacy organizations. In addition to payment reform, these groups have employed other strategies such as educational programs for health care providers and patients and “hard-stop” policies that prohibit doctors from scheduling early elective deliveries unless they meet medical necessity standards.

“The Medicaid program was paying doctors for doing things that actually harm babies,” said Dr. Paul Jarris, chief medical officer at the March of Dimes, which publishes an annual report card that ranks states based on their preterm birth rates. “These payment changes actually make huge differences if they’re done right.”

Photo: Bigstock

Stem cell treatment trial blinded three women. What went wrong?

An experimental treatment — which blinded three women after stem cells from abdominal fat were injected into their eyes — was advertised on a government-run clinical trial website but lacked proper safeguards, researchers reported Wednesday.

The report in the New England Journal of Medicine notes that the procedures were part of a national rise in the number of clinics harnessing stem cells from fat to treat a variety of diseases — even though many have not been proven to work. Two of the women thought they were getting treatment as part of a clinical trial because they learned about the procedure on clinicaltrials.gov, a database run by the National Library of Medicine that features thousands of studies, many of which are sanctioned by research organizations and have regulatory oversight.

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Jeffrey Goldberg, professor and chairman of ophthalmology at the Byers Eye Institute at Stanford University and co-author of the study, said the report aims to highlight the ethical implications of how clinical research is defined for the public and the dangers of poorly regulated trials.

“I would emphasize it’s a challenge and we can’t expect patients to fully vet these options,” he said. “And that’s where the ethics of the doctors and oversight of regulatory agencies need to play a role in the public health of our community.”

The women featured in the report sought treatment in 2015 for age-related macular degeneration, a common, progressive eye condition characterized by blurriness in the center field of vision. Their ages ranged from 72 to 88, the report said, and they paid $5,000 for the procedure. Each had both eyes treated at the same time, a protocol that is “both atypical and unsafe,” according to the researchers.

The report did not name the clinics involved in the study or its sponsor. Researchers said in a press release accompanying the study that the clinic is no longer performing the procedures but is still treating patients.

Clinicaltrials.gov shows the trial referenced in the article was sponsored by a stem cell company based in Sunrise, Fla., called Bioheart Inc., now known as U.S. Stem Cell. Dr. Shareen Greenbaum served as the trial’s principal investigator, according to the company’s press release. She is an ophthalmologist working at the Hollywood Eye Institute in Cooper City, Fla.

According to the journal report, clinicians used cells extracted from fat, and treated them with enzymes to obtain the stem cells. Blood was also drawn from the patient and then platelet-dense plasma was extracted. The cells were then mixed with plasma and injected into both eyes.

Within days, the three patients sought medical care for complications related to the procedure. Two patients suffered bleeding and each had retina detachments. The researchers said they are not expected to regain their sight.

The analysis said that the consent forms signed by the women did not mention a clinical trial. The patients paid for procedures “that had never been studied in a clinical trial, lacked sufficient safety data and was performed in both eyes on the same day,” the researchers wrote.

State insurance records show insurers for Greenbaum, U.S. Stem Cell and a registered nurse paid out more than $3 million in 2016 to patients harmed by stem cell procedures, although it is not clear if those patients are the same ones detailed in the study. U.S. Stem Cell said in a statement Wednesday that it could not comment on these cases but it is committed to “research and development of effective cell technologies.” The statement noted that the company has “successfully conducted more than 7,000 stem cell procedures with less than 0.01% adverse reactions” since 2001. Greenbaum did not return calls for comment.

Stem cells have unique properties that researchers believe may hold promise for new treatments for a host of diseases such as diabetes and arthritis. These cells have the ability to change into different types of specialized cells and act as a repair system for tissues throughout the body.

Hundreds of stem cell clinics have sprung up across the nation offering therapies. But many of these medical interventions have not been vetted through federal protocols for safety and effectiveness. Because stem cells are harvested from the patient who will receive the treatment, many of these clinicians say they do not need the Food and Drug Administration’s approval, said Karen Maschke, a research scholar at the Hastings Center, a bioethics research institute.

In the journal report, the authors hypothesize the adverse effects of the treatment were caused by stem cells transforming into myofibroblasts, or cells that can lead to scarring. Enzymes used to extract the stem cells could have also contaminated the solution.

But the report said even if the treatment had caused no adverse effects, there’s little evidence showing that it would have worked.

Formal clinical trials have several safeguards to protect participants against adverse effects, said Maschke. Biomedical trials are overseen by an institutional review board that is responsible for reviewing the study’s research protocol to ensure participants are being protected. Patients are also required to sign consent forms that outline the risks associated with the experiment.

For large clinical trials, a separate oversight group called a data safety monitoring board conducts reviews throughout the trial to assess the risks and benefits of the experiment, Maschke said. Smaller and less dangerous trials rely on the research team and chief investigators to notify the IRB of any safety issues. Participants can also report their concerns to the Office for Human Research Protections within the Department of Health and Human Services.

Dr. Thomas Albini, one of the co-authors and an associate professor of clinical ophthalmology at the University of Miami, warned consumers that clinical trials with a fee should be carefully reviewed. “I’m not aware of any legitimate research, at least in ophthalmology, that is patient funded,” he said in the press release accompanying the study.

The government website recently expanded its requirements for those wishing to register clinical trials on the site. However, Maschke said she isn’t sure whether the new rules will lead to a more rigorous vetting process for prospective listings.

“It’s unclear whether or not anyone is enforcing required postings and what’s supposed to be in them,” she said.

Photo: Bigstock

Some hospitals taking novel approach to dealing with medical errors: Apologizing

When Donna Helen Crisp, a 59-year-old nursing professor, entered a North Carolina teaching hospital for a routine hysterectomy in 2007, she expected to come home the next day.

Instead, Crisp spent weeks in a coma and underwent five surgeries to correct a near-fatal cascade of medical errors that left her with permanent injuries. Desperate for an explanation, Crisp, who is also a lawyer, said she repeatedly encountered a white wall of silence: The hospital and her surgeon refused to say little more than “things didn’t go well.” Crisp spent years piecing together what happened. “I decided I was going to find out even if it takes the rest of my life,” she said.

Jack Gentry said he “went into the hospital a patient and came out a victim.” In 2013, the retired Baltimore police officer suffered a catastrophic spinal cord injury during disk replacement surgery at MedStar Union Memorial Hospital that left him a quadriplegic.

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But unlike Crisp, Gentry and his wife, a nurse, were immediately told what had gone wrong by his surgeon, who apologized for the error. The hospital covered Gentry’s rehabilitation and other major expenses and paid an undisclosed amount in compensation, all without litigation.

“When hospitals mess up, they need to do the right thing,” Gentry said. “MedStar did.”

For patients and their families killed or maimed by medical errors, Crisp’s experience — in which doctors clam up and hospitals deny wrongdoing and aggressively defend their care — remains standard operating procedure in most institutions.

But spurred by concerns about the “deny and defend” model — including its cost, lack of transparency and the perpetuation of errors — programs to circumvent litigation by offering prompt disclosure, apology and compensation for mistakes as an alternative to malpractice suits are becoming more popular. Researchers at Johns Hopkins University in Baltimore recently estimated that medical mistakes kill 251,000 Americans annually, which would make them the third-leading cause of death. Traditionally, the only way for patients to find out what went wrong has been to sue.

A blueprint for the approach used in Gentry’s case is being promoted by the federal Agency for Healthcare Research and Quality. Called CANDOR, an acronym for Communication and Optimal Resolution, the approach is modeled on a long-standing program pioneered at the University of Michigan. It was tested in 14 hospitals around the country, including MedStar’s Washington Hospital Center and Georgetown University Hospital.

Although they differ, these programs — which typically feature prompt investigation of errors whose findings are shared with the victims, as well as an apology and compensation for injuries — are operating at the University of Illinois at Chicago, Stanford and eight hospitals and outpatient groups in Massachusetts. Despite fears that the new approach would encourage lawsuits, the opposite has proved true. In Michigan, the number of lawsuits was cut nearly in half, and the hospital system saved about $2 million in litigation costs in the first year after the new model was adopted in 2001.

“The whole point of this isn’t to drop malpractice costs, it’s to drive patient safety,” said Richard Boothman, the University of Michigan Health System’s executive director of clinical safety and chief risk officer, who launched the program after a career defending doctors and hospitals. “We need to hard-wire as quickly as possible the lessons of these cases.”

In most hospitals, Boothman said, patient safety experts do not routinely talk to risk managers who handle malpractice claims. As a result, valuable information about preventing errors is lost.

In the dark

Most patients never learn they are victims of a medical error. A landmark 1991 Harvard study found that only 2 percent of people harmed by errors file a lawsuit. Those who do face daunting odds: Patients lose 80 percent of malpractice cases. Huge litigation costs, combined with laws that have reduced damage awards in many states, have left many unable to find an attorney because plaintiffs’ lawyers are paid on contingency. Malpractice cases typically take three or more years to resolve. In the interim, many injured people struggle to pay for care.

Litigation “is a tortuous process for patients and health care workers,” said Beth Daley Ullem, who spent five years seeking answers about the 2003 death of her newborn son from a Chicago hospital that denied any wrongdoing.

“We later learned that this had happened to a family before us and another seven months after,” said Daley Ullem, a former McKinsey & Co. consultant whose ruptured uterus went untreated for an hour. She said she received a $4 million settlement before trial, which she offered to give back to the hospital to fund safety improvements. The hospital refused.

Disclosure efforts also face stiff resistance from doctors, insurers and lawyers, including defense attorneys for whom speedier resolution means fewer billable hours.

Despite laws in most states that prevent apologies from being used against doctors in lawsuits, many worry that it will make patients more likely to file suit, said Thomas Gallagher, a University of Washington professor of medicine who has written extensively about disclosure. A recent study found that 77 percent of 300 primary-care doctors would not fully disclose a delayed breast cancer diagnosis to a patient.

Doug Wojcieszak — who founded an Illinois-based disclosure advocacy group called “Sorry Works!” — said one Iowa doctor told him that if he started apologizing when things went wrong, “he’d be doing nothing else all day long.”

Insurers are also leery, said Brian Atchinson, president of Physician Insurers Association of America, the trade association for liability insurers, which was involved in the development of CANDOR. “Some states are more conducive to this than others,” he said. “But there are those who don’t believe the benefits outweigh the risks.”

Lawyer Joanne Doroshow, director of the Center for Justice & Democracy at New York Law School, expressed worry that disclosure programs may take advantage of vulnerable patients who are not represented by a lawyer. “The hospitals are in control of it, and it’s still in their interest to try and limit compensation to patients,” she said.

Jeffrey Catalano, a Massachusetts plaintiffs’ lawyer who is president of the state bar and a participant in that state’s disclosure program, says that patients should be represented early in the process. “I think if there’s a good attorney present, there’s no way a client is going to be shortchanged,” he said. “Good attorneys know this: Medical malpractice cases are hard to take to trial. If a client can get $1 now rather than risking getting nothing [at trial] for the prospect of $1.50 later, it may be better to take the $1 now.”

Doing the right thing

The country’s first disclosure program began 30 years ago with a doctor’s desire to do the right thing.

Pulmonologist Steve Kraman, newly named as chief of staff for what is now the Lexington Veterans Affairs Medical Center in Kentucky, said he faced a problem in 1987: how to handle the death of a middle-aged woman caused by an “undeniable error,” a massive overdose of potassium.

“If we had said nothing, [the family] never would have known a thing,” said Kraman, who was also the hospital’s risk manager. “We never would have gotten sued. But I just didn’t feel that was right.” So he suggested to the hospital’s lawyer that they come clean to the patient’s two adult daughters, from whom she was estranged.

“I sat down and told them exactly what happened, that we were responsible for it, that they should hire a lawyer and we were going to negotiate a payment,” he recalled. Two months later, the family was paid $250,000.

From then on, Kraman said, all cases involving errors were handled similarly. “We paid out for things that nobody could have sued for in their wildest dreams,” said Kraman, who is now a professor at the University of Kentucky. Some patients declined the cash, he said, because they feared it would “ruin their relationship with the doctor.” Kraman said he refused to pay a dime in cases where no injury could be proved. “That just alienates doctors and nurses who feel like you’re throwing them under the bus.”

Kraman said he had several advantages: Doctors were employed and insured by the VA system. Payments, which averaged $16,000, were made from the U.S. Treasury, not the hospital coffers. And the program had the support of the hospital’s director and lawyer as well as the U.S. attorney for Kentucky.

“This has to be done from the top down” or it won’t work, Kraman said. “The message has to be ‘This is how we do business.’”

When Boothman arrived at the University of Michigan in 2001 — after two decades defending doctors, including an orthopedic surgeon who had been sued 21 times — he decided to try a similar approach. That included encouraging staff to report errors and bad outcomes; reports jumped from 2,400 a year to more than 34,000.

“You have to normalize honesty,” Boothman said, “to create a culture of continuous improvement.” Applying the lessons gleaned from those errors, he said, has helped make care safer.

“Litigating a case for three years and telling everybody, ‘Don’t talk about it and don’t change anything,’ is immoral and counterproductive,” he added. “I don’t serve my organization well by defending care we shouldn’t be defending.”

“Today we’re often at the bedside as soon as things happen,” he said. Patients and their families are interviewed as part of the hospital’s investigation of the facts, something that does not happen in traditional litigation.

Like Kraman, Boothman said he worries that some hospitals are using disclosure to cherry-pick small or unwinnable cases, not as a standard approach.

A test case

Orthopedic surgeon P. Justin Tortolani remembers with sickening clarity the moment he realized that a device he was installing had gone too far, penetrating Jack Gentry’s spine. The 60-year-old retired police officer, who once had hiked the entire Appalachian Trail, was instantly paralyzed from the neck down.

“You can’t really believe it’s happening,” said Tortolani, Union Memorial’s director of spine surgery. Summoning his years of training, the surgeon formulated a plan and steeled himself to tell Teresa Gentry what had happened. It was the first of many conversations about the accident that he would have with the family.

“We didn’t want to go through litigation, we didn’t need to go through litigation,” said Larry Smith, MedStar’s vice president for risk management. MedStar uses CANDOR in about a dozen cases with substantial damages annually.

MedStar executives “told me what had happened, why it happened, that it was directly or indirectly their fault and that whatever I needed I should ask for,” Gentry recalled. MedStar paid for five months of inpatient rehab — Gentry’s insurance would have covered only two weeks — modifications to the couple’s home, a $45,000 wheelchair and a new wheelchair-accessible van. It provided a case manager, a home-care nurse and $15,000 for incidental medical expenses.

“Because of the nature of Jack’s injury, we would have had to mortgage everything to pay for his care” otherwise, Teresa Gentry said.

Early on, Gentry said, his older brother, a Baltimore malpractice lawyer, expressed bafflement at MedStar’s approach. “He said as long as we were getting what we needed, to just go with it,” Gentry recalled.

At the end of two years, the case was settled with a confidential payment negotiated by lawyers for the couple, MedStar and the device manufacturer.

“I felt like it would take care of Jack for the rest of his life,” said Teresa Gentry, adding that the couple had been prepared to file a lawsuit if an agreement could not be reached. “Did I get enough to pay for everybody’s pain and suffering and trauma? No.”

“I was very skeptical in the beginning of this whole process,” she recalled, but she said she believes it has worked well, as does her husband.

Tortolani said he feels “remorse, guilt and sorrow for Jack and his family. This shakes you to your core,” he said. MedStar officials have been “unbelievably supportive,” Tortolani said, and he remains deeply grateful to the Gentrys. “My relationship with Jack has never been stronger.”

Donna Helen Crisp says she thinks she would have been less traumatized had the North Carolina hospital and her surgeon not stonewalled her. “I would have been deeply depressed that I had such a bad experience, but I could have moved on with my life,” said Crisp, who has written a book about her experience entitled “Anatomy of Medical Errors: the Patient in Room 2.” Being denied the truth left her with “no way to put it into perspective.”

Photo: Imilian, Getty Images