September 13, 2019
The Out-of-Pocket Health News Digest
Below you will find briefs about recent health policy news stories. Our hope is for students to have an information outlet at their fingertips to keep up-to-date with the most pressing news stories in health policy. This compilation is produced by the HPSA Education Committee.
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Pharma companies reach settlements in ongoing opioid crisis lawsuits
The Sackler Family, owners of Purdue Pharma, has reached a multi-billion dollar settlement for their role in propagating the opioid crisis through the creation and promotion of Oxycontin. Over 2,500 plaintiffs, including nearly every state, cities, counties and Native American tribes, have sued Purdue Pharma. In order to settle these lawsuits, the Sackler family has opted to pay a minimum of $3 billion over the next year years. Purdue Pharma is in the midst of filing for bankruptcy and restructuring leadership of the organization.

Purdue Pharma is one of many pharmaceutical companies responsible for the ongoing opioid crisis. In the 1990s, pharmaceutical companies heavily advertised their opioid products as non-addictive and sent hundreds of thousands of pharma reps out to doctors’ offices to market their ‘safe’ pain relieving products. These tactics led to an increased rate of opioid prescriptions and consequently the diversion of many of these medications.
 
Today, some pharmaceutical companies are being held accountable for their actions. Aside from Purdue Pharma, an Oklahoma judge found Johnson & Johnson liable for their role in the opioid crisis and both Endo International PLC and Mallinckrodt PLC settled cases in Ohio. This is the first time a court has ruled against a pharmaceutical company and found them responsible for their part in the opioid crisis, setting an interesting precedent for future cases.
 
In connection the opioid crisis, HIV cases in West Virginia have recently spiked due to use of contaminated needles among drug users. Parts of rural West Virginia has been hit particularly hard by the opioid crisis due to a myriad of factors including but not limited to, the downtick in the state’s job market, the inadequate public health infrastructure, and lower levels of education. However, even in a county with an above average public health system and opioid monitoring program, HIV cases continue to increase. This is particularly significant in light of the Trump administration’s opposition to Philadelphia’s proposed “safe injection sites” which would allow opioid users to inject with medical supervision to reduce the likelihood of infection.
 
Sources: NPR , WSJ

Further reading: Dreamland : The True Tale of the America’s Opioid Epidemic by Sam Quinones takes you from small rural towns in Ohio to Xalisco, Mexico in order to understand the full story of how entities like pharmaceutical companies, drug investigative units, and parents all fit together to form the current state of the opioid crisis.
Planned Parenthood Loses Title X Funding, Forced to Rely on Emergency Funds
On August 19, 2019, Planned Parenthood forcibly withdrew from Title X funding, the only federal funding program for family planning services. In March 2019, the Trump Administration’s Health and Human Services implemented new funding regulations that prohibited programs from utilizing the funding to provide or refer patients for abortions, except in cases of medical emergency, incest or rape. HHS required grantees to submit a plan of compliance to the new regulations or lose funding by August 19th. On August 14th, Planned Parenthood filed an appeal against the enactment of this so-called “domestic gag rule” in the Ninth Circuit court. It was denied, forcing Planned Parenthood to relinquish access to Title X funding and instead rely on emergency funding. As a consequence, due to limited federal and state funding, Planned Parenthood has already announced the closure of two clinics in Ohio . 

With approximately 650 clinics, Planned Parenthood provides care to over a million Americans, accounting for 40% of the nation’s population that has access to family planning services through Title X. In some states, such as Minnesota and Vermont, Planned Parenthood serves 90-100% of Title X patients. In 21% of counties, Planned Parenthood is the only clinic that provides family planning services. Nearly 75% of Planned Parenthood’s patients fall at or below 150 percent of the federal poverty level (FPL), indicating the impact that clinic closures can have on lower socioeconomic status communities.  

Planned Parenthood’s withdrawal will pose severe consequences for equitable access to family planning services, preventive care and STI treatment for both men and women. In the past, states that reduced grants offered to Planned Parenthood have experienced notable increases in sexually transmitted infections, significant increases in cost for family planning services and severe reduction in the number of accessible family planning services. When Planned Parenthood lost state funding in Texas and Wisconsin, clinic closures forced patients to drive over a 100 miles to access the nearest clinic. Subsequently, utilization of the most effective birth controls decreased by 35% and birth rates among women who were previously on contraceptive implants increased to 27%. In Texas , utilization of long-term contraceptives such as IUDs or implants decreased by over 30% and there was an increase in the number of childbirths covered by medicaid, with low-income women disportionately impacted.

Sources: NPR , Vox , The Hill
Hospitals, Academic Research and Policy-makers debate the impacts of ongoing mergers
On September 4, 2019 a federal judge finalized the $70 billion acquisition of health insurer Aetna by retail pharmacy CVS Health Corp. The President of the American Medical Association decried the decision in a statement that stated “Today’s decision ultimately fails patients, will likely raise prices, lower quality, reduce choice, and stifle innovation.” CVS spokespeople and the Department of Justice attest the merger will improve patient experience and protect vulnerable populations such as seniors. 

Mergers and acquisitions in health care remain a persistent trend especially with providers and health care systems. From 2010 to 2017 there have been more than 800 reported hospital mergers. The American Hospital Association commissioned a report which concluded that hospital mergers and acquisitions lead to a 2.3% reduction in annual operating expenses and a 3.5% decline in revenues per admission at acquired hospitals compared to non-merging hospitals. Furthermore, the AHA argues that mergers provide better opportunity to address social determinants of health, acquire new technology, and offset the increasing costs needed to run hospitals.

Academic research tells a different story. A working paper out of the National Bureau of Economic Research from 2018 demonstrated hospital mergers within a contained geographic area reduces competition, thus increasing the power hospitals have when negotiating with insurance companies on rates. These mergers increase prices 7-9% at acquiring hospital. In areas where a particular health system has a monopoly, a study found that prices were 12% higher than those areas with at least 4 competing hospital systems.

Sutter Health, a giant health care system in Northern California, is facing a class action lawsuit due to claims of antitrust violations. Plaintiffs argue Sutter has been utilizing its market power to consolidate health care in the area, resulting in Northern California having health care costs 20-30% higher than in Southern California. A payout of $2.7 billion by Sutter is possible if they lose the case. 

This is potentially huge case that could set the stage for hospital mergers moving forward. The hospital industry has a significant lobbying presence at both the state and federal levels which at times hinders policy-makers from addressing the effects of mergers. Almost two-thirds of all hospitals are already part of a larger system, indicating how unlikelihood reversals of these mergers.


HMP Spotlight
A study published by researchers at University of Michigan, including Health Management and Policy professor Edward Norton, found that although post-acute care costs are a significant portion of episodic care, evidence indicates that increased used of post-acute care is not associated with higher quality care. Spending for post-acute care was 68-230 % greater among fee-for-service Medicare beneficiaries compared to privately insured individuals, although there was no indication that of reduced likelihood of readmission.
One-Liners
  • California limits medical exemptions for vaccines through new bill and enforces stricter follow-up for schools that have a vaccination rate of below 95% (CNN)
  • The Democratic Republic of Congo continues to battle the second largest ebola epidemic, with over 3,000 cases, and ongoing unrest, insufficient funding and community resistance hinders intervention. (WHO)
  • The Trump Administration and FDA move to ban flavored e-cigarettes after a vaping-related illness sickens 450 and kills 6; the vaping industry calls it a “public health travesty” based on unfounded claims that e-cigarettes are a safer alternative to smoking and can be used to wean people off of cigarettes. (Politico)
  • Democrats on the House Oversight Committee denounce the Trump Administration’s decision to reverse a decades-old humanitarian policy that allowed immigrants to enter the country to access crucial medical care and instead requires hundreds of families to be deported within 33 days. (AP News)
  • UVA Hospital, a part of a non-profit health system, exposed for filing over 36,000 lawsuits against patients to obtain full payments, forcing patients to go into bankruptcy due to their aggressive billing practice; similar findings in hospitals in Baltimore, Memphis, and New Mexico (KHN).