Fentanyl-Linked Deaths: The U.S. Opioid Epidemic's Third Wave
Authorities intercepted a woman using this drug kit in preparation for shooting up a mix of heroin and fentanyl inside a Walmart bathroom last month in Manchester, N.H. Fentanyl offers a particularly potent high but also can shut down breathing in under a minute.
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Men are dying after opioid overdoses at nearly three times the rate of women in the United States. Overdose deaths are increasing faster among black and Latino Americans than among whites. And there’s an especially steep rise in the number of young adults ages 25 to 34 whose death certificates include some version of the drug fentanyl.
These findings, published Thursday in a report by the Centers for Disease Control and Prevention, highlight the start of the third wave of the nation’s opioid epidemic. The first was prescription pain medications, such as OxyContin; then heroin, which replaced pills when they became too expensive; and now fentanyl.
Fentanyl is a powerful synthetic opioid that can shut down breathing in less than a minute, and its popularity in the U.S. began to surge at the end of 2013. For each of the next three years, fatal overdoses involving fentanyl doubled, “rising at an exponential rate,” says Merianne Rose Spencer, a statistician at the CDC and one of the study’s authors.
Spencer’s research shows a 113 percent average annual increase from 2013 to 2016 (when adjusted for age). That total was first reported late in 2018, but Spencer looked deeper with this report into the demographic characteristics of those people dying from fentanyl overdoses.
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Increased trafficking of the drug and increased use are both fueling the spike in fentanyl deaths. For drug dealers, fentanyl is easier to produce than some other opioids. Unlike the poppies needed for heroin, which can be spoiled by weather or a bad harvest, fentanyl’s ingredients are easily supplied; it’s a synthetic combination of chemicals, often produced in China and packaged in Mexico, according to the U.S. Drug Enforcement Administration. And because fentanyl can be 50 times more powerful than heroin, smaller amounts translate to bigger profits.
Jon DeLena, assistant special agent in charge of the DEA’s New England Field Division, says one kilogram of fentanyl, driven across the southern U.S. border, can be mixed with fillers or other drugs to create six or eight kilograms for sale.
“I mean, imagine that business model,” DeLena says. “If you went to any small-business owner and said, ‘Hey, I have a way to make your product eight times the product that you have now,’ there’s a tremendous windfall in there.”
For drug users, fentanyl is more likely to cause an overdose than heroin because it is so potent and because the high fades more quickly than with heroin. Drug users say they inject more frequently with fentanyl because the high doesn’t last as long — and more frequent injecting adds to their risk of overdose.
Fentanyl is also showing up in some supplies of cocaine and methamphetamines, which means that some people who don’t even know they need to worry about a fentanyl overdose are dying.
There are several ways fentanyl can wind up in a dose of some other drug. The mixing may be intentional, as a person seeks a more intense or different kind of high. It may happen as an accidental contamination, as dealers package their fentanyl and other drugs in the same place.
Or dealers may be adding fentanyl to cocaine and meth on purpose, in an effort to expand their clientele of users hooked on fentanyl.
“That’s something we have to consider,” says David Kelley, referring to the intentional addition of fentanyl to cocaine, heroin or other drugs by dealers. Kelley is deputy director of the New England High Intensity Drug Trafficking Area. “The fact that we’ve had instances where it’s been present with different drugs leads one to believe that could be a possibility.”
The picture gets more complicated, says Kelley, as dealers develop new forms of fentanyl that are even more deadly. The new CDC report shows dozens of varieties of the drug now on the streets.
The highest rates of fentanyl-involved overdose deaths were found in New England, according to the study, followed by states in the Mid-Atlantic and Upper Midwest. But fentanyl deaths had barely increased in the West — including in Hawaii and Alaska — as of the end of 2016.
Researchers have no firm explanations for these geographic differences, but some people watching the trends have theories. One is that it’s easier to mix a few white fentanyl crystals into the powdered form of heroin that is more common in eastern states than into the black tar heroin that is sold more routinely in the West. Another hypothesis holds that drug cartels used New England as a test market for fentanyl because the region has a strong, long-standing market for opioids.
Spencer, the study’s main author, hopes that some of the other characteristics of the wave of fentanyl highlighted in this report will help shape the public response. Why, for example, did the influx of fentanyl increase the overdose death rate among men to nearly three times the rate of overdose deaths among women?
Some research points to one particular factor: Men are more likely to use drugs alone. In the era of fentanyl, that increases a man’s chances of an overdose and death, says Ricky Bluthenthal, a professor of preventive medicine at the University of Southern California’s Keck School of Medicine.
“You have stigma around your drug use, so you hide it,” Bluthenthal says. “You use by yourself in an unsupervised setting. [If] there’s fentanyl in it, then you die.”
Traci Green, deputy director of Boston Medical Center’s Injury Prevention Center, offers some other reasons. Women are more likely to buy and use drugs with a partner, Green says. And women are more likely to call for help — including 911 — and to seek help, including treatment.
“Women go to the doctor more,” she says. “We have health issues that take us to the doctor more. So we have more opportunities to help.”
Green notes that every interaction with a health care provider is a chance to bring someone into treatment. So this finding should encourage more outreach, she says, and encourage health care providers to find more ways to connect with active drug users.
As to why fentanyl seems to be hitting blacks and Latinos disproportionately as compared with whites, Green mentions the higher incarceration rates for blacks and Latinos. Those who formerly used opioids heavily face a particularly high risk of overdose when they leave jail or prison and inject fentanyl, she notes; they’ve lost their tolerance to high levels of the drugs.
There are also reports that African-Americans and Latinos are less likely to call 911 because they don’t trust first responders, and medication-based treatment may not be as available to racial minorities. Many Latinos say bilingual treatment programs are hard to find.
Spencer says the deaths attributed to fentanyl in her study should be seen as a minimum number — there are likely more that weren’t counted. Coroners in some states don’t test for the drug or don’t have equipment that can detect one of the dozens of new variations of fentanyl that would appear if sophisticated tests were more widely available.
There are signs the fentanyl surge continues. Kelley, with the New England High Intensity Drug Trafficking Area, notes that fentanyl seizures are rising. And in Massachusetts, one of the hardest-hit areas, state data show fentanyl present in more than 89 percent of fatal overdoses through October 2018.
Still, in one glimmer of hope, even as the number of overdoses in Massachusetts continues to rise, associated deaths dropped 4 percent last year. Many public health specialists attribute the decrease in deaths to the spreading availability of naloxone, a drug that can reverse an opioid overdose.
This story is part of NPR’s reporting partnership with WBUR and Kaiser Health News.
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Can Woodstock 50 'Recreate The Magic' Of The Original Festival?
Jay-Z performs on stage during ‘On the Run II’ tour in 2018. The rapper is among the headliners of Woodstock 50.
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It’s been 50 years since Woodstock Music & Arts Festival. To celebrate the 50th anniversary of three days of peace, love and music, Woodstock 50 will take place this Aug. 16–18, 2019 in Watkins Glen, N.Y. Festival co-founder Michael Lang has announced the official lineup for the anniversary festival with Jay-Z, Dead & Company and The Killers as headliners. Rounding out the list of performers are Miley Cyrus, Imagine Dragons, The Black Keys and Chance The Rapper as well as acts like Santana who performed at the seminal fest five decades ago. But what makes this 50th anniversary lineup special among a saturated field of music festivals this?
“They’re trying to recreate the magic and some of the cultural dominance that the original Woodstock did,” NPR Music’s Stephen Thompson says, noting that organizers are not only working in the shadow of the behemoth that was the original event, but also in the shadow of “the debacle that is Woodstock 99” which was notorious for violence, destruction and sexual assault cases.
In the years since the original Woodstock, the festival’s symbolism of peace and love has been romanticized in pop culture. As Thompson notes, no matter who’s on the bill, carrying on the legacy of the original Woodstock is incredibly hard. “They’re trying, I think, to feed a lot of mouths at once,” Thompson says of the variety in this year’s lineup compared to the gathering of 400,000 people back in 1969. “In order to attract 400,000 in this market place, you have to please a lot of people at once.”
As for clear comparisons to the original fest? “In the announcement of this new Woodstock lineup, there was conversation about the parallels between the political situation in 1969 and the political situation in the present,” Thompson notes. “So, I’m sure there’s going to be an attempt to sort of tie the two together and bring out some of the activism.”
Even though summer festival season is more crowded than ever, Thompson thinks Woodstock 50 will stand out because of its historical name recognition and reverberations to be a “siren song to anyone who feels some kind of attachment” to the word ‘Woodstock’ and it’s music history.
Listen to the entire conversation at the audio link.
Salif Keita Gives His Blessing And Takes A Final Bow With 'Un Autre Blanc'
Salif Keita
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Salif Keita, one of the best African singers of the past century, had a 40-plus-year career that took him around the world and produced some 25 albums. Now, Keita is retiring from recording and in October 2018, he released his final album is Un Autre Blanc, or Another White.
In 1987, Keita introduced an iconic voice to the world with his album Soro. Keita sang to his father, a master hunter in his native village in Mali, “O, Sina, your son is lost far away from home.” Living then in Paris, Keita may have felt lost, but he was also finding himself. As someone born an albino to a royal family, his early choice to become a singer was both taboo and an act of courage for a young man who considered himself an outcast. After years of singing in urban African bands, Keita made his own statement and launching a movement of modern African music.
All these years later, Keita returns to the studio with confidence, passion, pride, gratitude and still, that incredible voice. The song “Were Were” praises the great leaders of Africa, from Lumumba to Mandela and is the grandest subject Keita addresses in the album. The album title “Another White” is more personal. It refers to Keita’s albinism, a defining feature of his life that he has sung and spoken about often.
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The album’s title, Another White, meanwhile, is more personal and refers to Keita’s albinism, a defining feature of his life that he has sung and spoken about often.
Many of the songs are also about the virtues and hardships that women face in Africa. In the song “Itarafo,” Keita and Afropop star Angélique Kidjo sing about a woman resisting pressure to abandon her child as she joins a new household.
For his farewell recording, Keita invited a rich cast of African singers to contribute. On the song “Gnamale,” he weaves in the vocal polyphony of Ladysmith Black Mambazo, mixing Bambara and Zulu in praise of Mande hunters like his late father.
Keita ends this album with a serene reggae number thanking God for his blessings and warning those who misuse his name. This plays as a sly jab to Islamic fundamentalists currently destabilizing Mali and it perfectly encapsulates the complexity that has made all Keita’s work so satisfying over the years. Never content with simple formulas, always breaking new ground, always authentic and sincere, Keita is himself a blessing. If this truly is his last recording, his creative force will be sorely missed.
Devon Gilfillian Puts His Love Of Nigerian Psychedelic Rock Into 'Get Out And Get It'
Devon Gilfillian is very excited to be talking about the release of the first single from his forthcoming debut album on the phone. However, he’s still pretty hyped from singing The National Anthem at the Southeastern Conference basketball game between LSU and Florida the morning of our talk. He’s been in this spot before. Gilfillian last sang The National Anthem to kick off the 2018 NFL draft.
“I played it straight,” Gillfilian he says, moving on quickly to the track. “‘Get Out And Get It,’ was definitely influenced by my falling in love with Afrobeat,” he says.
Co-written with Jamie Lidell, produced by Shawn Everett (Alabama Shakes, The War On Drugs) and premiered on World Cafe, “Get Out And Get It” draws on the funk vibes of “In The Jungle” by The Hygrades from a compilation of ’70s Nigerian psychedelic Afro-rock and funk.
Gilfillian grew up outside of Philadelphia and caught the music bug at an early age from his father, a singer and percussionist in the popular Philadelphia R&B group, Cafe Ole. He moved to Nashville in August 2013 in hopes of finding a community appreciative of his blend of social consciousness, rootsy melodies and soulful grooves. Gilfillian quickly settled into Music City with his charismatic mix of rock and soul, playing out regularly both in Nashville and around the country.
In 2016, Gilfillian released his first EP, a five-song collection that was musically influenced by his love of Al Green, Ray Charles and Jimi Hendrix, and was featured in a World Cafe Nashville session in 2017. “Get Out And Get it” percolates with a hot and tightly syncopated upbeat groove. Capable of singing in various registers, Gilfillian channels his inner Curtis Mayfield on the new single. “Get Out And Get It” has a heavy dose of infectious and captivating energy, and will move you with a spirit of optimism and empowerment.
“Even though the song has an upbeat feel to it, it actually came out of a place of feeling down, feeling lethargic,” Gilfillian explains. “I wanted to incorporate African percussion and influences into this song to turn those feelings around. It’s like me all hyped up, marching out the door. As far as the recording process went, Shawn said to us: ‘This is what I want you to do. I want you guys to pretend you are a ’70s African band from Nigeria. Just go deep [like] you’re in the club.’ So we did.”
Through most of April he’ll be out on tour with Brothers Osborne, including sets at the Winnipeg and Newport Folk Festivals in July. “Get Out and Get It” is available now via Capitol Records.
Surrounded By Military Barracks, Skiers Shred The Himalayan Slopes Of Indian Kashmir
A helicopter brings skiers and snowboarders into the mountains around Gulmarg, in Indian-administered Kashmir
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In a Himalayan valley surrounded by military barracks, blasts of artillery fire often reverberate across the icy mountain peaks. This is one of the world’s longest-running conflict zones. It’s near where India and Pakistan recently traded airstrikes. So it’s not unusual to see helicopters buzzing overhead.
But on a morning in early February, one particular chopper was not part of the conflict.
“I run Kashmir Heliski. We have clients from different parts of the world. We take people to 4,500 meters. They enjoy it!” says Billa Majeed Bakshi, a local skier turned businessman.
Since 2011, Bakshi has ferried more than 1,000 skiers and snowboarders nearly 15,000 feet up into the Himalayas, via helicopter, in Indian-administered Kashmir.
Kashmir is split between Indian and Pakistani control. The mountain valley is the site of a decades-long insurgency, as separatists on the Indian side fight for independence. Hundreds of thousands of soldiers are stationed on either side of the Line of Control, Kashmir’s de facto border. India blames Pakistani-based militant groups for attacks on Indian security forces, including a Feb. 14 suicide car bombing on the valley’s main highway.
Billa Majeed Bakshi, the founder of Kashmir Heliski, has ferried skiers and snowboarders nearly 15,000 feet up into the Himalayas via helicopter in Indian-administered Kashmir since 2011.
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But in the cold months, when the valley fills with snow, it also becomes a winter sports haven for a small but devoted gang of extreme sports enthusiasts. They often ski — “shred lines,” as boarders and ski bums put it — just a few hundred yards from the Line of Control, within view of Pakistani troops on the other side.
“I think it’s fantastic! I just wish we could get over their mountain ranges and shred with them too,” says Jimmy Hands, 41, who’s visiting from Toronto. “Look, nothing brings peace like a little bit of snow, and everybody’s been magical here! Like, it is magic.”
The powder this high up may be magical — but it also leads to avalanches. In early February, at least nine people died in avalanches triggered by a single snowstorm.
“Someone who’s had an accident, whether it’s a fall on ice or they’re involved in an avalanche, to move that person to a hospital — that is a big challenge here, without the infrastructure of other countries,” says Brian Newman, a Coloradan who serves as the snow safety officer for the Gulmarg Ski Resort, a Kashmiri state government-run resort with two giant gondola lifts. During the recent Indian and Pakistani airstrikes and shelling over the Line of Control, the ski station at Gulmarg remained open for business.
The main Jammu-Srinagar highway, the only route connecting Kashmir to the rest of India, is often impassable for several days at a time because of snow. At the area’s main airport, flights regularly get canceled due to foul weather. Snowplows are in short supply.
Skiers line up at the only chairlift in Gulmarg, a resort in Indian-administered Kashmir.
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Until the 1990s, Gulmarg, with fewer than 2,000 residents, was a sleepy hill station. The area, the Pir Panjal Range of the western Himalayas, was a summertime playground for India’s British colonial rulers, who came to escape the sweltering heat farther south. There’s still a British-built golf course.
Synonymous with romance and revolution, Kashmir has always captured the Indian imagination. Bollywood song sequences have long been filmed there. But after the state government built two gondolas in 1998 and 2005, Gulmarg began attracting more tourists from abroad, and increasingly from India too.
In 2007, the government hired Newman. He obtained explosives from the Indian military to blast off excess snow that might otherwise avalanche and imposed rules requiring skiers to carry avalanche beacons, shovels and probes. He even learned the Kashmiri language.
As India’s middle class grows, domestic tourists have been coming to Gulmarg in greater numbers. The state government says 800,000 Indian tourists visited Kashmir in 2018, along with 50,000 foreigners. There are traffic jams every Sunday afternoon, as day trippers, having paid about $5.25 for a scenic ride up the first gondola, exit the resort and drive back to Srinagar, the biggest city in the Indian state of Jammu and Kashmir, about 30 miles away.
“It’s almost like a different world! You’re cocooned in this space between the sky and the snow,” says Nikita Kapoor, 29, visiting for a long weekend from Kolkata — where it never snows. “I’m learning how to snowboard for the first time, so it’s really exciting!”
As India’s middle class grows, more domestic tourists are coming to Gulmarg, a resort in Indian-administered Kashmir that used to be a playground for British colonial rulers in the 19th and early 20th centuries.
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Tourists like Kapoor don’t seem fazed that their holiday destination is home to a decades-long separatist insurgency that, by some measures, is growing. Clashes between protesters and security forces have resulted in an estimated 40,000 to 70,000 deaths and thousands of injuries in the past three decades. Indian troops are accused of firing live ammunition on civilians, including deliberately targeting people’s eyes.
Still, tourism brings much needed revenue — as much as 8 percent of the state’s gross domestic product — which dips dramatically whenever there’s violence. The local unemployment rate, 21 percent, is about triple that of the rest of India.
What kind of jobs are there in Kashmir, beyond this ski resort?
“Nothing!” says ski guide Altaf Khanday, shaking his head. “You know the guys who are [throwing] stones in the valley? They are well-educated guys. Even they are busy in the militancy. It’s so sad.”
For Khanday, becoming an expert skier was an economic decision. Now, at age 30 and working as a back-country ski guide for the two-month ski season, he’s able to support seven members of his extended family all year.
Altaf Khanday, 30, works as a back-country ski guide in Gulmarg for two months a year. His earnings allow him to support seven members of his family all year.
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He learned to ski with secondhand gear. Lots of ski shops in Gulmarg rent gear donated by foreign visitors when they leave. It’s common to see Kashmiri youth learning to ski on straight, long, old-fashioned skis from the 1980s and 1990s.
“Oh my gosh, my first ski boots, they didn’t even have buckles!” Khanday says, laughing. “You know what skis I had? Broken ones!”
Not far from the ski lifts, young men huddle around a wood stove in a mountain hut in a forest. Tourists can rent dormitory rooms in the hut for about $14 a night, including breakfast.
One of the men, Raja Wasim Khan, 24, says his father moved the family to Gulmarg in 2010, when he was a teenager.
“Actually, he was a terrorist. He fought for Kashmir. For five or six years, he was in jail,” says Khan. “Then he started a new life, and he taught us snowboarding.”
Raja Wasim Khan (left), 24, and his brother Ashraf Khan, 21, huddle around a wood stove inside the ski hut they manage in Gulmarg. The Khan brothers’ father was a Kashmiri militant who served time in an Indian prison and then moved his sons to the mountains and taught them snowboarding. He wanted to keep them away from the violence he grew up in.
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Khan says his father, Parvez Ahmed Khan, 52, a notorious Kashmiri militant also known as “the Tiger,” wanted him and his brother to pour their energy into snowboarding rather than violence. Militant groups in Kashmir often recruit from the ranks of poor, unemployed and disaffected teenage boys.
A gondola ferries skiers in Gulmarg.
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“Sometimes, if I’m so angry, I have to take my snowboard and go for a ride — to make myself relax,” Khan says. “When you put your straps on and go for powder run, it makes you [feel] like you are flying! You didn’t think about anything. You are just flying in the air.”
It’s a welcome distraction from Kashmir’s conflict, he says — if only for two months a year.
NPR producer Furkan Latif Khan contributed to this report.
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Health Plans For State Employees Use Medicare's Hammer On Hospital Bills
The new strategy of some health plans for state employees is to pay hospitals a certain percentage above the basic Medicare reimbursement rate. It allows hospitals a small profit, the states say, while reducing costs to states and patients.
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States. They’re just as perplexed as the rest of us over the ever-rising cost of health care premiums.
Now some states –including Montana, North Carolina and Oregon — are moving to control costs of state employee health plans. Their strategy: Use Medicare reimbursement rates to recalibrate how they pay hospitals. If the gamble pays off, more private-sector employers could start doing the same thing.
“Government workers will get it first, then everyone else will see the savings and demand it,” says Glenn Melnick, a hospital finance expert and professor at the University of Southern California. “This is the camel’s nose. It will just grow and grow.”
In North Carolina, for instance, state Treasurer Dale Folwell next year plans to start paying most hospitals Medicare rates plus 82 percent — a figure he says would provide for a modest profit margin while saving the state more than $258 million annually.
“State workers can’t afford the family premium [and other costs],” he says. That’s what I’m trying to fix.” The estimated $60 million in savings to health plan members, he says, would mainly come from savings in out-of-pocket costs.
That approach differs from the traditional method of behind-the-scenes negotiating, in which employers or insurers ask for discounts off hospital-set charges that rise every year and generally are many times the actual cost of a service. Payments from private-insurers, even with those discounts, can be double or triple what Medicare would pay.
This state-level activity could be a game changer, fueling a broad movement toward lower payments to hospitals. Montana’s state employee program made the adjustment two years ago; Oregon will start this fall. Delaware’s state employee program is also considering such “Medicare-based contracting” as one of several options to lower spending.
The bold move comes as other factors — notably marketplace competition among hospitals, and high-deductible insurance plans aimed at getting consumers to “shop” for lower prices — have largely failed to slow rising health care premiums.
For hospitals, though, it can be viewed as “an existential threat,” says USC’s Melnick.
Indeed, the treasurer’s plan in North Carolina has drawn heated opposition, with a hospital industry-associated group running television ads that warn of dire financial consequences, especially for rural hospitals. When the plan first came out, the state’s hospital association complained it would reduce hospital revenue statewide by an estimated $460 million.
Hospitals in areas with large concentrations of state workers “would be getting reimbursed less than the cost of care,” says Cody Hand, the association’s senior vice president and deputy general counsel.
“Our biggest concern is this is not something that we were at the table for in discussion,” he says.
Rural hospitals are particularly at risk, Hand says, because many were already teetering on the brink financially and the payment change would be an additional problem.
After months of acrimony, the North Carolina treasurer in mid-March agreed to grant a 20 percent boost in payment to rural hospitals that would give those hospitals an additional $52 million a year. On average, rural hospitals would be paid 218 percent of the Medicare rate.
Nationwide, hospitals have long complained that Medicare underpays them, and some hospital and business groups have warned employers that tying payments from state workers’ plans more closely to Medicare could result in higher charges to private-sector businesses.
“The result will be a cost shift of tens of millions of dollars to other Oregonians,” wrote the Oregon Association of Hospitals and Health Systems as lawmakers there debated a plan (that eventually became law) paying hospitals 200 percent of Medicare rates.
But policy experts are skeptical.
“Even if Medicare pays a bit below cost, 177 percent of Medicare should be at least 50 percent above cost,” says Mark Hall, director of the health law and policy program at Wake Forest University. “Is that a reasonable margin? I guess that’s up for debate, but to most people a 50 percent margin might sound reasonable.”
Another concern some people have raised is that hospitals might refuse to join networks that employ these states’ Medicare-based strategy.
Indeed, Montana officials worked hard to get all hospitals in the state to agree to accept for the state worker program an average of 234 percent of Medicare’s reimbursement rates. A few hospitals held out, right up to the deadline, backing down only after pressure from employee unions.
The risk if hospitals opt to remain out-of-network is that workers could be balance billed for the difference between those Medicare-plus rates and their generally much higher charges — amounts that could be hundreds or even thousands of dollars.
To prevent that, Oregon lawmakers set the law’s in-network reimbursement for hospitals at 200 percent of Medicare’s reimbursement rates. But, those that opt out would receive only 185 percent.
The measure also bars hospitals from billing state workers for the difference between those amounts and the higher rates they might like to charge.
“Oregon thought it through,” says Gerard Anderson, a professor at Johns Hopkins who researches health care costs.
“Hospitals need to go on a diet,” adds Anderson. “The private sector has not put them on a diet, but maybe the state employee plans will.”
Meanwhile, in the private sector …
For decades, health insurance costs for employers and workers have risen faster than inflation, despite various efforts to rein them in.
Currently, a typical family plan offered by employers tops $19,000 a year in premiums, while the price tag for a single employee is close to $7,000.
To be sure, hospital costs make up just one part of what premiums cover, along with doctor costs, drug payments and other services. Spending on hospital care accounts for about one-third of the nation’s $3.5 trillion health care tab.
“Health care is just becoming unaffordable,” says Cheryl DeMars, president and CEO of The Alliance, a group of 240 self-insured employers in the private sector that directly contract with hospitals in Wisconsin, northern Illinois and eastern Iowa.
In January, The Alliance began what it calls “Medicare-plus” contracting. As new hospitals join and existing contracts come up for renewal, the group is negotiating rates, basing them on what Medicare pays, DeMars says.
And it will likely save money: Under its old method of paying, the group was forking out between 200 percent and 350 percent of Medicare for inpatient and outpatient hospital services in its network. Two new contracts have been signed so far, averaging 200 percent of Medicare across inpatient, outpatient and physician payments, according to The Alliance.
“We want to pay a fair price and we’re in the process of determining what that should be,” says Kyle Monroe, vice president of network development for The Alliance. “Is it 200 percent? Is it something less?”
Under traditional payment methods, the negotiated prices insurers for public- and private-sector employers pay for hospital care vary widely — by facility, treatment and insurer. But they’re generally above Medicare rates by a substantial margin.
A group of self-insured employers recently commissioned Rand to study what private insurers pay hospitals in 22 states, compared with Medicare rates.
Initial results found private employers were paying, on average, 229 percent of Medicare rates to hospitals across the states in 2017, according to Chapin White, an adjunct senior policy researcher at Rand who conducted the study.
Economists like Melnick say they would prefer that market competition — consumers voting with their feet, so to speak — would drive business to the highest-quality, lowest-cost providers.
But, so far, hospitals have held the line against this scenario and that’s not likely to change. “They’re going to fight like crazy,” Melnick says.
Kaiser Health News is a nonprofit news service and editorially independent program of the Kaiser Family Foundation. It’s not affiliated with Kaiser Permanente.
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