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HHS plan to improve rural health focuses on better broadband, telehealth services
Even before the coronavirus pandemic reached into the nation’s less-populated regions, rural Americans were sicker, poorer, and older than the rest of the country. Hospitals are shuttering at record rates, and health care experts have long called for changes.
The new plan, released by the Department of Health & Human Services Secretary Alex M. Azar, II, acknowledges the gaps in health care and other problems facing rural America. It lists a litany of projects and directives, with many already underway or announced within federal agencies.
“We cannot just tinker around the edges of a rural healthcare system that has struggled for too long,” Azar said in a prepared statement.
Yet, that is exactly what experts say the administration continues to do.
“They tinker around the edges,” said Tommy Barnhart, former president of the National Rural Health Association. And he added, “there’s a lot of political hype” that has happened under President Trump, as well as previous presidents.
In the past few months, rural health care has increasingly become a focus for Mr. Trump, whose polling numbers are souring as COVID-19 kills hundreds of Americans every day, drives down restaurant demand for some farm products, and spreads through meatpacking plants. Rural states including Iowa and the Dakotas are reporting the latest surges in cases.
This announcement comes in response to Mr. Trump’s executive order last month calling for improved rural health and telehealth access. Earlier this week, three federal agencies also announced they would team up to address gaps in rural broadband service – a key need because large portions of the plan seek to expand telehealth.
The plan is more than 70 pages long and the word “telehealth” appears more than 90 times, with a focus on projects across HHS, including the Health Resources and Services Administration and the Centers for Medicare & Medicaid Services.
Mr. Barnhart said CMS has passed some public health emergency waivers since the beginning of the pandemic that helped rural facilities get more funding, including one that specifically was designed to provide additional money for telehealth services. However, those waivers are set to expire when the coronavirus emergency ends. Officials have not yet set a date for when the federal emergency will end.
Andrew Jay Schwartzman, senior counselor to the Benton Institute for Broadband & Society, a private foundation that works to ensure greater Internet access, said there are multiple challenges with implementing telehealth across the nation. Many initiatives for robust telehealth programs need fast bandwidth, yet getting the money and setting up the necessary infrastructure is very difficult, he said.
“It will be a long time before this kind of technology will be readily available to much of the country,” he said.
Ge Bai, associate professor of accounting and health policy at Johns Hopkins University in Baltimore, noted that telehealth was short on funding in the HHS initiative. However, she said, the focus on telehealth, as well as a proposed shift in payment for small rural hospitals and changing workforce licensing requirements, had good potential.
“We are so close to the election that this is probably more of a messaging issue to cater to rural residents,” Ms. Bai said. “But it doesn’t matter who will be president. This report will give the next administration useful guidance.”
The American Hospital Association, representing 5,000 hospitals nationwide, sent a letter to Mr. Trump last week recommending a host of steps the administration could take. As of late Thursday, AHA was still reviewing the HHS plan but said it was “encouraged by the increased attention on rural health care.”
Buried within the HHS announcement are technical initiatives, such as a contract to help clinics and hospitals integrate care, and detailed efforts to address gaps in care, including a proposal to increase funding for school-based mental health programs in the president’s 2021 budget.
A senior HHS official said that, while some actions have been taken in recent months to improve rural health — such as the $11 billion provided to rural hospitals through coronavirus relief funding — more is needed.
“We’re putting our stake in the ground that the time for talk is over,” he said. “We’re going to move forward.”
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of KFF (Kaiser Family Foundation), which is not affiliated with Kaiser Permanente.
Even before the coronavirus pandemic reached into the nation’s less-populated regions, rural Americans were sicker, poorer, and older than the rest of the country. Hospitals are shuttering at record rates, and health care experts have long called for changes.
The new plan, released by the Department of Health & Human Services Secretary Alex M. Azar, II, acknowledges the gaps in health care and other problems facing rural America. It lists a litany of projects and directives, with many already underway or announced within federal agencies.
“We cannot just tinker around the edges of a rural healthcare system that has struggled for too long,” Azar said in a prepared statement.
Yet, that is exactly what experts say the administration continues to do.
“They tinker around the edges,” said Tommy Barnhart, former president of the National Rural Health Association. And he added, “there’s a lot of political hype” that has happened under President Trump, as well as previous presidents.
In the past few months, rural health care has increasingly become a focus for Mr. Trump, whose polling numbers are souring as COVID-19 kills hundreds of Americans every day, drives down restaurant demand for some farm products, and spreads through meatpacking plants. Rural states including Iowa and the Dakotas are reporting the latest surges in cases.
This announcement comes in response to Mr. Trump’s executive order last month calling for improved rural health and telehealth access. Earlier this week, three federal agencies also announced they would team up to address gaps in rural broadband service – a key need because large portions of the plan seek to expand telehealth.
The plan is more than 70 pages long and the word “telehealth” appears more than 90 times, with a focus on projects across HHS, including the Health Resources and Services Administration and the Centers for Medicare & Medicaid Services.
Mr. Barnhart said CMS has passed some public health emergency waivers since the beginning of the pandemic that helped rural facilities get more funding, including one that specifically was designed to provide additional money for telehealth services. However, those waivers are set to expire when the coronavirus emergency ends. Officials have not yet set a date for when the federal emergency will end.
Andrew Jay Schwartzman, senior counselor to the Benton Institute for Broadband & Society, a private foundation that works to ensure greater Internet access, said there are multiple challenges with implementing telehealth across the nation. Many initiatives for robust telehealth programs need fast bandwidth, yet getting the money and setting up the necessary infrastructure is very difficult, he said.
“It will be a long time before this kind of technology will be readily available to much of the country,” he said.
Ge Bai, associate professor of accounting and health policy at Johns Hopkins University in Baltimore, noted that telehealth was short on funding in the HHS initiative. However, she said, the focus on telehealth, as well as a proposed shift in payment for small rural hospitals and changing workforce licensing requirements, had good potential.
“We are so close to the election that this is probably more of a messaging issue to cater to rural residents,” Ms. Bai said. “But it doesn’t matter who will be president. This report will give the next administration useful guidance.”
The American Hospital Association, representing 5,000 hospitals nationwide, sent a letter to Mr. Trump last week recommending a host of steps the administration could take. As of late Thursday, AHA was still reviewing the HHS plan but said it was “encouraged by the increased attention on rural health care.”
Buried within the HHS announcement are technical initiatives, such as a contract to help clinics and hospitals integrate care, and detailed efforts to address gaps in care, including a proposal to increase funding for school-based mental health programs in the president’s 2021 budget.
A senior HHS official said that, while some actions have been taken in recent months to improve rural health — such as the $11 billion provided to rural hospitals through coronavirus relief funding — more is needed.
“We’re putting our stake in the ground that the time for talk is over,” he said. “We’re going to move forward.”
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of KFF (Kaiser Family Foundation), which is not affiliated with Kaiser Permanente.
Even before the coronavirus pandemic reached into the nation’s less-populated regions, rural Americans were sicker, poorer, and older than the rest of the country. Hospitals are shuttering at record rates, and health care experts have long called for changes.
The new plan, released by the Department of Health & Human Services Secretary Alex M. Azar, II, acknowledges the gaps in health care and other problems facing rural America. It lists a litany of projects and directives, with many already underway or announced within federal agencies.
“We cannot just tinker around the edges of a rural healthcare system that has struggled for too long,” Azar said in a prepared statement.
Yet, that is exactly what experts say the administration continues to do.
“They tinker around the edges,” said Tommy Barnhart, former president of the National Rural Health Association. And he added, “there’s a lot of political hype” that has happened under President Trump, as well as previous presidents.
In the past few months, rural health care has increasingly become a focus for Mr. Trump, whose polling numbers are souring as COVID-19 kills hundreds of Americans every day, drives down restaurant demand for some farm products, and spreads through meatpacking plants. Rural states including Iowa and the Dakotas are reporting the latest surges in cases.
This announcement comes in response to Mr. Trump’s executive order last month calling for improved rural health and telehealth access. Earlier this week, three federal agencies also announced they would team up to address gaps in rural broadband service – a key need because large portions of the plan seek to expand telehealth.
The plan is more than 70 pages long and the word “telehealth” appears more than 90 times, with a focus on projects across HHS, including the Health Resources and Services Administration and the Centers for Medicare & Medicaid Services.
Mr. Barnhart said CMS has passed some public health emergency waivers since the beginning of the pandemic that helped rural facilities get more funding, including one that specifically was designed to provide additional money for telehealth services. However, those waivers are set to expire when the coronavirus emergency ends. Officials have not yet set a date for when the federal emergency will end.
Andrew Jay Schwartzman, senior counselor to the Benton Institute for Broadband & Society, a private foundation that works to ensure greater Internet access, said there are multiple challenges with implementing telehealth across the nation. Many initiatives for robust telehealth programs need fast bandwidth, yet getting the money and setting up the necessary infrastructure is very difficult, he said.
“It will be a long time before this kind of technology will be readily available to much of the country,” he said.
Ge Bai, associate professor of accounting and health policy at Johns Hopkins University in Baltimore, noted that telehealth was short on funding in the HHS initiative. However, she said, the focus on telehealth, as well as a proposed shift in payment for small rural hospitals and changing workforce licensing requirements, had good potential.
“We are so close to the election that this is probably more of a messaging issue to cater to rural residents,” Ms. Bai said. “But it doesn’t matter who will be president. This report will give the next administration useful guidance.”
The American Hospital Association, representing 5,000 hospitals nationwide, sent a letter to Mr. Trump last week recommending a host of steps the administration could take. As of late Thursday, AHA was still reviewing the HHS plan but said it was “encouraged by the increased attention on rural health care.”
Buried within the HHS announcement are technical initiatives, such as a contract to help clinics and hospitals integrate care, and detailed efforts to address gaps in care, including a proposal to increase funding for school-based mental health programs in the president’s 2021 budget.
A senior HHS official said that, while some actions have been taken in recent months to improve rural health — such as the $11 billion provided to rural hospitals through coronavirus relief funding — more is needed.
“We’re putting our stake in the ground that the time for talk is over,” he said. “We’re going to move forward.”
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of KFF (Kaiser Family Foundation), which is not affiliated with Kaiser Permanente.
Prognosis for rural hospitals worsens with pandemic
Jerome Antone said he is one of the lucky ones.
After becoming ill with COVID-19, Mr. Antone was hospitalized only 65 miles away from his small Alabama town. He is the mayor of Georgiana – population 1,700.
“It hit our rural community so rabid,” Mr. Antone said. The town’s hospital closed last year. If hospitals in nearby communities don’t have beds available, “you may have to go 4 or 5 hours away.”
Eighteen rural hospitals closed last year and the first 3 months of 2020 were “really big months,” said Mark Holmes, PhD, director of the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill. Many of the losses are in Southern states like Florida and Texas. More than 170 rural hospitals have closed nationwide since 2005, according to data collected by the Sheps Center.
It’s a dangerous scenario. “We know that a closure leads to higher mortality pretty quickly” among the populations served, said Dr. Holmes, who is also a professor at UNC Gillings School of Global Public Health. “That’s pretty clear.”
One 2019 study found that death rates in the surrounding communities increase nearly 6% after a rural hospital closes – and that’s when there’s not a pandemic.
Add to that what is known about the coronavirus: People who are obese or live with diabetes, hypertension, asthma, and other underlying health issues are more susceptible to COVID-19. Rural areas tend to have higher rates of these conditions. And rural residents are more likely to be older, sicker and poorer than those in urban areas. All this leaves rural communities particularly vulnerable to the coronavirus.
Congress approved billions in federal relief funds for health care providers. Initially, federal officials based what a hospital would get on its Medicare payments, but by late April they heeded criticism and carved out funds for rural hospitals and COVID-19 hot spots. Rural hospitals leapt at the chance to shore up already-negative budgets and prepare for the pandemic.
The funds “helped rural hospitals with the immediate storm,” said Don Williamson, MD, president of the Alabama Hospital Association. Nearly 80% of Alabama’s rural hospitals began the year with negative balance sheets and about 8 days’ worth of cash on hand.
Before the pandemic hit this year, hundreds of rural hospitals “were just trying to keep their doors open,” said Maggie Elehwany, vice president of government affairs with the National Rural Health Association. Then an estimated 70% of their income stopped as patients avoided the emergency room, doctor’s appointments, and elective surgeries.
“It was devastating,” Ms. Elehwany said.
Paul Taylor, chief executive of a 25-bed critical-access hospital and outpatient clinics in northwestern Arkansas, accepted millions in grants and loan money Congress approved this spring, largely through the CARES (Coronavirus Aid, Relief, and Economic Security) Act.
“For us, this was survival money and we spent it already,” Mr. Taylor said. With those funds, Ozarks Community Hospital increased surge capacity, expanding from 25 beds to 50 beds, adding negative pressure rooms and buying six ventilators. Taylor also ramped up COVID-19 testing at his hospital and clinics, located near some meat-processing plants.
Throughout June and July, Ozarks tested 1,000 patients a day and reported a 20% positive rate. The rate dropped to 16.9% in late July. But patients continue to avoid routine care.
Mr. Taylor said revenue is still constrained and he does not know how he will pay back $8 million that he borrowed from Medicare. The program allowed hospitals to borrow against future payments from the federal government, but stipulated that repayment would begin within 120 days.
For Mr. Taylor, this seems impossible. Medicare makes up 40% of Ozarks’ income. And he has to pay the loan back before he gets any more payments from Medicare. He’s hoping to refinance the hospital’s mortgage.
“If I get no relief and they take the money ... we won’t still be open,” Mr. Taylor said. Ozarks provides 625 jobs and serves an area with a population of about 75,000.
There are 1,300 small critical-access hospitals like Ozarks in rural America, and of those, 859 took advantage of the Medicare loans, sending about $3.1 billion into the local communities. But many rural communities have not yet experienced a surge in coronavirus cases – national leaders fear it will come as part of a new phase.
“There are pockets of rural America who say, ‘We haven’t seen a single COVID patient yet and we do not believe it’s real,’ ” Mr. Taylor said. “They will get hit sooner or later.”
Across the country, the reduced patient numbers and increased spending required to fight and prepare for the coronavirus was “like a knife cutting into a hospital’s blood supply,” said Ge Bai, PhD, associate professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health in Baltimore.
Dr. Bai said the way the federal government reimbursed small rural hospitals through federal programs like Medicare before the pandemic was faulty and inefficient. “They are too weak to survive,” she said.
In rural Texas, about 2 hours from Dallas, Titus Regional Medical Center chief executive officer Terry Scoggin cut staff and furloughed workers even as his rural hospital faced down the pandemic. Titus Regional lost about $4 million last fiscal year and broke even each of the three years before that.
Mr. Scoggin said he did not cut from his clinical staff, though. Titus is now facing its second surge of the virus in the community. “The last 7 days, we’ve been testing 30% positive,” he said, including the case of his father, who contracted it at a nursing home and survived.
“It’s personal and this is real,” Mr. Scoggin said. “You know the people who are infected. You know the people who are passing away.”
Of his roughly 700 employees, 48 have tested positive for the virus and 1 has died. They are short on testing kits, medication, and supplies.
“Right now the staff is strained,” Mr. Scoggin said. “I’ve been blown away by their selflessness and unbelievable spirit. We’re resilient, we’re nimble, and we will make it. We don’t have a choice.”
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.
Jerome Antone said he is one of the lucky ones.
After becoming ill with COVID-19, Mr. Antone was hospitalized only 65 miles away from his small Alabama town. He is the mayor of Georgiana – population 1,700.
“It hit our rural community so rabid,” Mr. Antone said. The town’s hospital closed last year. If hospitals in nearby communities don’t have beds available, “you may have to go 4 or 5 hours away.”
Eighteen rural hospitals closed last year and the first 3 months of 2020 were “really big months,” said Mark Holmes, PhD, director of the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill. Many of the losses are in Southern states like Florida and Texas. More than 170 rural hospitals have closed nationwide since 2005, according to data collected by the Sheps Center.
It’s a dangerous scenario. “We know that a closure leads to higher mortality pretty quickly” among the populations served, said Dr. Holmes, who is also a professor at UNC Gillings School of Global Public Health. “That’s pretty clear.”
One 2019 study found that death rates in the surrounding communities increase nearly 6% after a rural hospital closes – and that’s when there’s not a pandemic.
Add to that what is known about the coronavirus: People who are obese or live with diabetes, hypertension, asthma, and other underlying health issues are more susceptible to COVID-19. Rural areas tend to have higher rates of these conditions. And rural residents are more likely to be older, sicker and poorer than those in urban areas. All this leaves rural communities particularly vulnerable to the coronavirus.
Congress approved billions in federal relief funds for health care providers. Initially, federal officials based what a hospital would get on its Medicare payments, but by late April they heeded criticism and carved out funds for rural hospitals and COVID-19 hot spots. Rural hospitals leapt at the chance to shore up already-negative budgets and prepare for the pandemic.
The funds “helped rural hospitals with the immediate storm,” said Don Williamson, MD, president of the Alabama Hospital Association. Nearly 80% of Alabama’s rural hospitals began the year with negative balance sheets and about 8 days’ worth of cash on hand.
Before the pandemic hit this year, hundreds of rural hospitals “were just trying to keep their doors open,” said Maggie Elehwany, vice president of government affairs with the National Rural Health Association. Then an estimated 70% of their income stopped as patients avoided the emergency room, doctor’s appointments, and elective surgeries.
“It was devastating,” Ms. Elehwany said.
Paul Taylor, chief executive of a 25-bed critical-access hospital and outpatient clinics in northwestern Arkansas, accepted millions in grants and loan money Congress approved this spring, largely through the CARES (Coronavirus Aid, Relief, and Economic Security) Act.
“For us, this was survival money and we spent it already,” Mr. Taylor said. With those funds, Ozarks Community Hospital increased surge capacity, expanding from 25 beds to 50 beds, adding negative pressure rooms and buying six ventilators. Taylor also ramped up COVID-19 testing at his hospital and clinics, located near some meat-processing plants.
Throughout June and July, Ozarks tested 1,000 patients a day and reported a 20% positive rate. The rate dropped to 16.9% in late July. But patients continue to avoid routine care.
Mr. Taylor said revenue is still constrained and he does not know how he will pay back $8 million that he borrowed from Medicare. The program allowed hospitals to borrow against future payments from the federal government, but stipulated that repayment would begin within 120 days.
For Mr. Taylor, this seems impossible. Medicare makes up 40% of Ozarks’ income. And he has to pay the loan back before he gets any more payments from Medicare. He’s hoping to refinance the hospital’s mortgage.
“If I get no relief and they take the money ... we won’t still be open,” Mr. Taylor said. Ozarks provides 625 jobs and serves an area with a population of about 75,000.
There are 1,300 small critical-access hospitals like Ozarks in rural America, and of those, 859 took advantage of the Medicare loans, sending about $3.1 billion into the local communities. But many rural communities have not yet experienced a surge in coronavirus cases – national leaders fear it will come as part of a new phase.
“There are pockets of rural America who say, ‘We haven’t seen a single COVID patient yet and we do not believe it’s real,’ ” Mr. Taylor said. “They will get hit sooner or later.”
Across the country, the reduced patient numbers and increased spending required to fight and prepare for the coronavirus was “like a knife cutting into a hospital’s blood supply,” said Ge Bai, PhD, associate professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health in Baltimore.
Dr. Bai said the way the federal government reimbursed small rural hospitals through federal programs like Medicare before the pandemic was faulty and inefficient. “They are too weak to survive,” she said.
In rural Texas, about 2 hours from Dallas, Titus Regional Medical Center chief executive officer Terry Scoggin cut staff and furloughed workers even as his rural hospital faced down the pandemic. Titus Regional lost about $4 million last fiscal year and broke even each of the three years before that.
Mr. Scoggin said he did not cut from his clinical staff, though. Titus is now facing its second surge of the virus in the community. “The last 7 days, we’ve been testing 30% positive,” he said, including the case of his father, who contracted it at a nursing home and survived.
“It’s personal and this is real,” Mr. Scoggin said. “You know the people who are infected. You know the people who are passing away.”
Of his roughly 700 employees, 48 have tested positive for the virus and 1 has died. They are short on testing kits, medication, and supplies.
“Right now the staff is strained,” Mr. Scoggin said. “I’ve been blown away by their selflessness and unbelievable spirit. We’re resilient, we’re nimble, and we will make it. We don’t have a choice.”
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.
Jerome Antone said he is one of the lucky ones.
After becoming ill with COVID-19, Mr. Antone was hospitalized only 65 miles away from his small Alabama town. He is the mayor of Georgiana – population 1,700.
“It hit our rural community so rabid,” Mr. Antone said. The town’s hospital closed last year. If hospitals in nearby communities don’t have beds available, “you may have to go 4 or 5 hours away.”
Eighteen rural hospitals closed last year and the first 3 months of 2020 were “really big months,” said Mark Holmes, PhD, director of the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill. Many of the losses are in Southern states like Florida and Texas. More than 170 rural hospitals have closed nationwide since 2005, according to data collected by the Sheps Center.
It’s a dangerous scenario. “We know that a closure leads to higher mortality pretty quickly” among the populations served, said Dr. Holmes, who is also a professor at UNC Gillings School of Global Public Health. “That’s pretty clear.”
One 2019 study found that death rates in the surrounding communities increase nearly 6% after a rural hospital closes – and that’s when there’s not a pandemic.
Add to that what is known about the coronavirus: People who are obese or live with diabetes, hypertension, asthma, and other underlying health issues are more susceptible to COVID-19. Rural areas tend to have higher rates of these conditions. And rural residents are more likely to be older, sicker and poorer than those in urban areas. All this leaves rural communities particularly vulnerable to the coronavirus.
Congress approved billions in federal relief funds for health care providers. Initially, federal officials based what a hospital would get on its Medicare payments, but by late April they heeded criticism and carved out funds for rural hospitals and COVID-19 hot spots. Rural hospitals leapt at the chance to shore up already-negative budgets and prepare for the pandemic.
The funds “helped rural hospitals with the immediate storm,” said Don Williamson, MD, president of the Alabama Hospital Association. Nearly 80% of Alabama’s rural hospitals began the year with negative balance sheets and about 8 days’ worth of cash on hand.
Before the pandemic hit this year, hundreds of rural hospitals “were just trying to keep their doors open,” said Maggie Elehwany, vice president of government affairs with the National Rural Health Association. Then an estimated 70% of their income stopped as patients avoided the emergency room, doctor’s appointments, and elective surgeries.
“It was devastating,” Ms. Elehwany said.
Paul Taylor, chief executive of a 25-bed critical-access hospital and outpatient clinics in northwestern Arkansas, accepted millions in grants and loan money Congress approved this spring, largely through the CARES (Coronavirus Aid, Relief, and Economic Security) Act.
“For us, this was survival money and we spent it already,” Mr. Taylor said. With those funds, Ozarks Community Hospital increased surge capacity, expanding from 25 beds to 50 beds, adding negative pressure rooms and buying six ventilators. Taylor also ramped up COVID-19 testing at his hospital and clinics, located near some meat-processing plants.
Throughout June and July, Ozarks tested 1,000 patients a day and reported a 20% positive rate. The rate dropped to 16.9% in late July. But patients continue to avoid routine care.
Mr. Taylor said revenue is still constrained and he does not know how he will pay back $8 million that he borrowed from Medicare. The program allowed hospitals to borrow against future payments from the federal government, but stipulated that repayment would begin within 120 days.
For Mr. Taylor, this seems impossible. Medicare makes up 40% of Ozarks’ income. And he has to pay the loan back before he gets any more payments from Medicare. He’s hoping to refinance the hospital’s mortgage.
“If I get no relief and they take the money ... we won’t still be open,” Mr. Taylor said. Ozarks provides 625 jobs and serves an area with a population of about 75,000.
There are 1,300 small critical-access hospitals like Ozarks in rural America, and of those, 859 took advantage of the Medicare loans, sending about $3.1 billion into the local communities. But many rural communities have not yet experienced a surge in coronavirus cases – national leaders fear it will come as part of a new phase.
“There are pockets of rural America who say, ‘We haven’t seen a single COVID patient yet and we do not believe it’s real,’ ” Mr. Taylor said. “They will get hit sooner or later.”
Across the country, the reduced patient numbers and increased spending required to fight and prepare for the coronavirus was “like a knife cutting into a hospital’s blood supply,” said Ge Bai, PhD, associate professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health in Baltimore.
Dr. Bai said the way the federal government reimbursed small rural hospitals through federal programs like Medicare before the pandemic was faulty and inefficient. “They are too weak to survive,” she said.
In rural Texas, about 2 hours from Dallas, Titus Regional Medical Center chief executive officer Terry Scoggin cut staff and furloughed workers even as his rural hospital faced down the pandemic. Titus Regional lost about $4 million last fiscal year and broke even each of the three years before that.
Mr. Scoggin said he did not cut from his clinical staff, though. Titus is now facing its second surge of the virus in the community. “The last 7 days, we’ve been testing 30% positive,” he said, including the case of his father, who contracted it at a nursing home and survived.
“It’s personal and this is real,” Mr. Scoggin said. “You know the people who are infected. You know the people who are passing away.”
Of his roughly 700 employees, 48 have tested positive for the virus and 1 has died. They are short on testing kits, medication, and supplies.
“Right now the staff is strained,” Mr. Scoggin said. “I’ve been blown away by their selflessness and unbelievable spirit. We’re resilient, we’re nimble, and we will make it. We don’t have a choice.”
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.
TV ads must trumpet drug prices, Trump administration says. Pharma tries a Plan B.
effectively setting the stage for months or possibly years of battle with the powerful industry.
The proposal, released late in the day, would require pharmaceutical companies to include in its television advertising the price of any drug that cost more than $35 a month. The price should be listed at the end of the advertisement in “a legible manner,” the rule states. It goes on to explain that the price should be presented against a contrasting background in a way that is easy to read.
Health and Human Services Secretary Alex M. Azar II, nodding to an industry proposal announced earlier in the day, said voluntary moves are not enough.
“We will not wait for an industry with so many conflicting and perverse incentives to reform itself,” Azar told the audience gathered at the National Academy of Sciences in Washington.
If approved, the proposed rule has no government enforcement mechanism that would force the companies to comply. Rather, it depends on shaming, noting that federal regulators would post a list of companies violating the rule. It would depend on the private sector to police itself with litigation.
“It is noteworthy that the government is unwilling to take enforcement action,” said Rachel Sachs, an associate professor of law at Washington University, St. Louis, and expert in drug-pricing regulation. The rule might never be finalized, she added.
“It will take many months if not years for this regulation to be implemented and free from the cloud of litigation that will follow it. And the administration knows that,” Ms. Sachs said.
Earlier on Oct. 15, the pharmaceutical industry trade group went on the offensive in anticipation of Mr. Azar’s speech by announcing its own plans.
“Putting list prices in isolation in the advertisements themselves would be misleading or confusing,” argued Stephen J. Ubl, CEO of the Pharmaceutical Researchers and Manufacturers of America, or PhRMA, the major trade group for branded drugs.
Instead, Mr. Ubl, whose trade group represents the largest pharmaceutical manufacturers on the globe, promised that pharma companies would direct consumers to websites that include a drug’s list price and estimates of what people can expect to pay, which can vary widely depending on coverage.
Drug manufacturers would voluntarily opt in to this disclosure starting next spring, he said. Mr. Ubl remained strongly critical of the White House proposal.
The Trump administration’s proposal comes weeks before midterm elections in which health care is a top voter concern. Polling from the Kaiser Family Foundation suggests most voters support forcing price transparency in drug advertisements. (Kaiser Health News is an editorially independent program of the foundation.)
The White House’s plan, which was teased in President Trump’s blueprint this summer, has won praise from insurance groups and the American Medical Association.
Sen. Chuck Grassley (R-Iowa) and Sen. Dick Durbin (D-Ill.) also proposed the plan in the Senate last month, but it failed to garner enough support.
Experts pointed out a host of complications, suggesting that neither PhRMA’s approach nor the White House’s would fully explain to consumers what they’ll actually pay for drugs.
On Oct. 15, Sen. Grassley applauded Mr. Azar’s announcement, saying it was a “common-sense way to lower prices.”
But Dale Cooke, a consultant who works with drug companies trying to meet Food and Drug Administration requirements for advertising, warned there is no reason to believe posting prices would help drive down prices.
“No one has ever explained to me why this would work,” Mr. Cooke said. “What’s the mechanism by which this results in lower drug prices?”
Even more, it could be confusing for patients, Mr. Cooke said. The proposed rule seemed to acknowledge this danger, he said, noting, “On the other hand, consumers, intimidated and confused by high list prices, may be deterred from contacting their physicians about drugs or medical conditions.”
A drug’s list price – the metric HHS wants to emphasize – often bears little relationship to what a patient pays at the drugstore. Insurance plans and pharmacy benefit managers often negotiate cheaper prices than the list price. Some patients qualify for other discounts. And often patients pay only what their copay or deductible requires at any given time.
Other consumers could be stuck paying the full cost, depending on how their insurance plan is designed, or if they don’t have coverage.
“The system is very opaque, very complicated, and importantly, there isn’t a huge relationship between list prices for drugs and what patients will expect to pay out-of-pocket,” said Adrienne Faerber, PhD, a lecturer at the Dartmouth Institute for Health Policy and Clinical Practice who researches drug marketing.
But the industry’s strategy, she said, also appeared lacking.
Under PhRMA’s plan, drugmakers would not standardize how they display their information. Where consumers go could vary on Pfizer’s website versus Merck’s to learn about the list price and the range of out-of-pocket costs. That, Ms. Faerber argued, would make it difficult for people to unearth relevant information.
PhRMA also announced it is partnering with patient advocacy groups to create a “patient affordability platform,” which could help patients search for costs and insurance coverage options.
Mr. Ubl cast PhRMA’s proposal as a way to address more effectively the government and public concern about drug price transparency.
Pharmaceutical manufacturers rely heavily on national advertising and together represent the third-highest spender in national television advertising, according to Michael Leszega, a manager of market intelligence at consulting firm Magna.
At certain times of day, pharmaceutical ads make up more than 40 percent of TV advertisements. And those commercials stand out because they are generally longer, with a long list of side effects and warnings the pharmaceutical industry must tag on at the end.
Those disclaimers highlight another challenge for the administration: legal action.
The rule notes its legal justification was based on the responsibility of the Centers for Medicare & Medicaid Services to ensure the health coverage programs that it administers – Medicare and Medicaid – must be operated in a manner that “minimizes reasonable expenditures.”
Sachs noted that the argument may be weak because most drugs are marketed to a wider audience than Medicare and Medicaid beneficiaries.
A body of Supreme Court decisions dictate how disclaimers and disclosures can be required, said constitutional law expert Robert Corn-Revere. He filed a “friend of the court” brief in a 2011 U.S. Supreme Court case related to commercial speech and the pharmaceutical industry.
Generally, the administration’s requirement must meet the standards of being purely factual, noncontroversial, and not burdensome, Mr. Corn-Revere said.
On the question of whether requiring drug prices be listed in advertising violates the First Amendment’s free-speech guarantee, Corn-Revere said it “all comes down to the specifics.”
Mr. Ubl, when asked earlier about legal action, didn’t rule out the possibility. “We believe there are substantial statutory and constitutional principles that arise” from requiring list-price disclosure, Mr. Ubl said, adding: “We do have concerns about that approach.”
KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Kaiser Health News is a nonprofit national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
effectively setting the stage for months or possibly years of battle with the powerful industry.
The proposal, released late in the day, would require pharmaceutical companies to include in its television advertising the price of any drug that cost more than $35 a month. The price should be listed at the end of the advertisement in “a legible manner,” the rule states. It goes on to explain that the price should be presented against a contrasting background in a way that is easy to read.
Health and Human Services Secretary Alex M. Azar II, nodding to an industry proposal announced earlier in the day, said voluntary moves are not enough.
“We will not wait for an industry with so many conflicting and perverse incentives to reform itself,” Azar told the audience gathered at the National Academy of Sciences in Washington.
If approved, the proposed rule has no government enforcement mechanism that would force the companies to comply. Rather, it depends on shaming, noting that federal regulators would post a list of companies violating the rule. It would depend on the private sector to police itself with litigation.
“It is noteworthy that the government is unwilling to take enforcement action,” said Rachel Sachs, an associate professor of law at Washington University, St. Louis, and expert in drug-pricing regulation. The rule might never be finalized, she added.
“It will take many months if not years for this regulation to be implemented and free from the cloud of litigation that will follow it. And the administration knows that,” Ms. Sachs said.
Earlier on Oct. 15, the pharmaceutical industry trade group went on the offensive in anticipation of Mr. Azar’s speech by announcing its own plans.
“Putting list prices in isolation in the advertisements themselves would be misleading or confusing,” argued Stephen J. Ubl, CEO of the Pharmaceutical Researchers and Manufacturers of America, or PhRMA, the major trade group for branded drugs.
Instead, Mr. Ubl, whose trade group represents the largest pharmaceutical manufacturers on the globe, promised that pharma companies would direct consumers to websites that include a drug’s list price and estimates of what people can expect to pay, which can vary widely depending on coverage.
Drug manufacturers would voluntarily opt in to this disclosure starting next spring, he said. Mr. Ubl remained strongly critical of the White House proposal.
The Trump administration’s proposal comes weeks before midterm elections in which health care is a top voter concern. Polling from the Kaiser Family Foundation suggests most voters support forcing price transparency in drug advertisements. (Kaiser Health News is an editorially independent program of the foundation.)
The White House’s plan, which was teased in President Trump’s blueprint this summer, has won praise from insurance groups and the American Medical Association.
Sen. Chuck Grassley (R-Iowa) and Sen. Dick Durbin (D-Ill.) also proposed the plan in the Senate last month, but it failed to garner enough support.
Experts pointed out a host of complications, suggesting that neither PhRMA’s approach nor the White House’s would fully explain to consumers what they’ll actually pay for drugs.
On Oct. 15, Sen. Grassley applauded Mr. Azar’s announcement, saying it was a “common-sense way to lower prices.”
But Dale Cooke, a consultant who works with drug companies trying to meet Food and Drug Administration requirements for advertising, warned there is no reason to believe posting prices would help drive down prices.
“No one has ever explained to me why this would work,” Mr. Cooke said. “What’s the mechanism by which this results in lower drug prices?”
Even more, it could be confusing for patients, Mr. Cooke said. The proposed rule seemed to acknowledge this danger, he said, noting, “On the other hand, consumers, intimidated and confused by high list prices, may be deterred from contacting their physicians about drugs or medical conditions.”
A drug’s list price – the metric HHS wants to emphasize – often bears little relationship to what a patient pays at the drugstore. Insurance plans and pharmacy benefit managers often negotiate cheaper prices than the list price. Some patients qualify for other discounts. And often patients pay only what their copay or deductible requires at any given time.
Other consumers could be stuck paying the full cost, depending on how their insurance plan is designed, or if they don’t have coverage.
“The system is very opaque, very complicated, and importantly, there isn’t a huge relationship between list prices for drugs and what patients will expect to pay out-of-pocket,” said Adrienne Faerber, PhD, a lecturer at the Dartmouth Institute for Health Policy and Clinical Practice who researches drug marketing.
But the industry’s strategy, she said, also appeared lacking.
Under PhRMA’s plan, drugmakers would not standardize how they display their information. Where consumers go could vary on Pfizer’s website versus Merck’s to learn about the list price and the range of out-of-pocket costs. That, Ms. Faerber argued, would make it difficult for people to unearth relevant information.
PhRMA also announced it is partnering with patient advocacy groups to create a “patient affordability platform,” which could help patients search for costs and insurance coverage options.
Mr. Ubl cast PhRMA’s proposal as a way to address more effectively the government and public concern about drug price transparency.
Pharmaceutical manufacturers rely heavily on national advertising and together represent the third-highest spender in national television advertising, according to Michael Leszega, a manager of market intelligence at consulting firm Magna.
At certain times of day, pharmaceutical ads make up more than 40 percent of TV advertisements. And those commercials stand out because they are generally longer, with a long list of side effects and warnings the pharmaceutical industry must tag on at the end.
Those disclaimers highlight another challenge for the administration: legal action.
The rule notes its legal justification was based on the responsibility of the Centers for Medicare & Medicaid Services to ensure the health coverage programs that it administers – Medicare and Medicaid – must be operated in a manner that “minimizes reasonable expenditures.”
Sachs noted that the argument may be weak because most drugs are marketed to a wider audience than Medicare and Medicaid beneficiaries.
A body of Supreme Court decisions dictate how disclaimers and disclosures can be required, said constitutional law expert Robert Corn-Revere. He filed a “friend of the court” brief in a 2011 U.S. Supreme Court case related to commercial speech and the pharmaceutical industry.
Generally, the administration’s requirement must meet the standards of being purely factual, noncontroversial, and not burdensome, Mr. Corn-Revere said.
On the question of whether requiring drug prices be listed in advertising violates the First Amendment’s free-speech guarantee, Corn-Revere said it “all comes down to the specifics.”
Mr. Ubl, when asked earlier about legal action, didn’t rule out the possibility. “We believe there are substantial statutory and constitutional principles that arise” from requiring list-price disclosure, Mr. Ubl said, adding: “We do have concerns about that approach.”
KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Kaiser Health News is a nonprofit national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
effectively setting the stage for months or possibly years of battle with the powerful industry.
The proposal, released late in the day, would require pharmaceutical companies to include in its television advertising the price of any drug that cost more than $35 a month. The price should be listed at the end of the advertisement in “a legible manner,” the rule states. It goes on to explain that the price should be presented against a contrasting background in a way that is easy to read.
Health and Human Services Secretary Alex M. Azar II, nodding to an industry proposal announced earlier in the day, said voluntary moves are not enough.
“We will not wait for an industry with so many conflicting and perverse incentives to reform itself,” Azar told the audience gathered at the National Academy of Sciences in Washington.
If approved, the proposed rule has no government enforcement mechanism that would force the companies to comply. Rather, it depends on shaming, noting that federal regulators would post a list of companies violating the rule. It would depend on the private sector to police itself with litigation.
“It is noteworthy that the government is unwilling to take enforcement action,” said Rachel Sachs, an associate professor of law at Washington University, St. Louis, and expert in drug-pricing regulation. The rule might never be finalized, she added.
“It will take many months if not years for this regulation to be implemented and free from the cloud of litigation that will follow it. And the administration knows that,” Ms. Sachs said.
Earlier on Oct. 15, the pharmaceutical industry trade group went on the offensive in anticipation of Mr. Azar’s speech by announcing its own plans.
“Putting list prices in isolation in the advertisements themselves would be misleading or confusing,” argued Stephen J. Ubl, CEO of the Pharmaceutical Researchers and Manufacturers of America, or PhRMA, the major trade group for branded drugs.
Instead, Mr. Ubl, whose trade group represents the largest pharmaceutical manufacturers on the globe, promised that pharma companies would direct consumers to websites that include a drug’s list price and estimates of what people can expect to pay, which can vary widely depending on coverage.
Drug manufacturers would voluntarily opt in to this disclosure starting next spring, he said. Mr. Ubl remained strongly critical of the White House proposal.
The Trump administration’s proposal comes weeks before midterm elections in which health care is a top voter concern. Polling from the Kaiser Family Foundation suggests most voters support forcing price transparency in drug advertisements. (Kaiser Health News is an editorially independent program of the foundation.)
The White House’s plan, which was teased in President Trump’s blueprint this summer, has won praise from insurance groups and the American Medical Association.
Sen. Chuck Grassley (R-Iowa) and Sen. Dick Durbin (D-Ill.) also proposed the plan in the Senate last month, but it failed to garner enough support.
Experts pointed out a host of complications, suggesting that neither PhRMA’s approach nor the White House’s would fully explain to consumers what they’ll actually pay for drugs.
On Oct. 15, Sen. Grassley applauded Mr. Azar’s announcement, saying it was a “common-sense way to lower prices.”
But Dale Cooke, a consultant who works with drug companies trying to meet Food and Drug Administration requirements for advertising, warned there is no reason to believe posting prices would help drive down prices.
“No one has ever explained to me why this would work,” Mr. Cooke said. “What’s the mechanism by which this results in lower drug prices?”
Even more, it could be confusing for patients, Mr. Cooke said. The proposed rule seemed to acknowledge this danger, he said, noting, “On the other hand, consumers, intimidated and confused by high list prices, may be deterred from contacting their physicians about drugs or medical conditions.”
A drug’s list price – the metric HHS wants to emphasize – often bears little relationship to what a patient pays at the drugstore. Insurance plans and pharmacy benefit managers often negotiate cheaper prices than the list price. Some patients qualify for other discounts. And often patients pay only what their copay or deductible requires at any given time.
Other consumers could be stuck paying the full cost, depending on how their insurance plan is designed, or if they don’t have coverage.
“The system is very opaque, very complicated, and importantly, there isn’t a huge relationship between list prices for drugs and what patients will expect to pay out-of-pocket,” said Adrienne Faerber, PhD, a lecturer at the Dartmouth Institute for Health Policy and Clinical Practice who researches drug marketing.
But the industry’s strategy, she said, also appeared lacking.
Under PhRMA’s plan, drugmakers would not standardize how they display their information. Where consumers go could vary on Pfizer’s website versus Merck’s to learn about the list price and the range of out-of-pocket costs. That, Ms. Faerber argued, would make it difficult for people to unearth relevant information.
PhRMA also announced it is partnering with patient advocacy groups to create a “patient affordability platform,” which could help patients search for costs and insurance coverage options.
Mr. Ubl cast PhRMA’s proposal as a way to address more effectively the government and public concern about drug price transparency.
Pharmaceutical manufacturers rely heavily on national advertising and together represent the third-highest spender in national television advertising, according to Michael Leszega, a manager of market intelligence at consulting firm Magna.
At certain times of day, pharmaceutical ads make up more than 40 percent of TV advertisements. And those commercials stand out because they are generally longer, with a long list of side effects and warnings the pharmaceutical industry must tag on at the end.
Those disclaimers highlight another challenge for the administration: legal action.
The rule notes its legal justification was based on the responsibility of the Centers for Medicare & Medicaid Services to ensure the health coverage programs that it administers – Medicare and Medicaid – must be operated in a manner that “minimizes reasonable expenditures.”
Sachs noted that the argument may be weak because most drugs are marketed to a wider audience than Medicare and Medicaid beneficiaries.
A body of Supreme Court decisions dictate how disclaimers and disclosures can be required, said constitutional law expert Robert Corn-Revere. He filed a “friend of the court” brief in a 2011 U.S. Supreme Court case related to commercial speech and the pharmaceutical industry.
Generally, the administration’s requirement must meet the standards of being purely factual, noncontroversial, and not burdensome, Mr. Corn-Revere said.
On the question of whether requiring drug prices be listed in advertising violates the First Amendment’s free-speech guarantee, Corn-Revere said it “all comes down to the specifics.”
Mr. Ubl, when asked earlier about legal action, didn’t rule out the possibility. “We believe there are substantial statutory and constitutional principles that arise” from requiring list-price disclosure, Mr. Ubl said, adding: “We do have concerns about that approach.”
KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Kaiser Health News is a nonprofit national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.