Jeff Brady, NPR News, Author at ��ϳԹ�� News

Health Care Giants Battling For Control Of Pittsburgh’s Market

Jeff Brady, NPR News — Wed, 20 Aug 2014 15:36:00 +0000

Pittsburgh’s dominant health insurance company and its largest healthcare provider are, essentially, getting a divorce.

The headquarters for University of Pittsburgh Medical Center and Highmark Blue Cross/Blue Shield dominate the Pittsburgh skyline much as they organizations have dominated health care in the region for decades. (Jeff Brady/NPR)

For decades, and worked together. But as the line between insurance companies and health care providers across the country blurs, these longtime allies are venturing into each other’s business and becoming competitors.

In the process, patients can get caught in the middle. Day-care worker Gail Jameson has Highmark insurance and she’s been going to the same UPMC medical office for more than 20 years. “I could go in and just stop in if I needed to because it’s close to my work,” Jameson says. “I go past it every day.”

She’s about five years from retirement and was disappointed to learn her Highmark policy will no longer include UPMC providers. She has to find all new doctors through another health system that is unfamiliar to her.

The road to divorce began when insurer Highmark got into the hospital business. It bought the struggling West Penn Allegheny Health System, which was UPMC’s main competitor.

“Highmark stepped in in order to ensure that there was competition in the marketplace and there would continue to be consumer choice,” says Highmark President and CEO David Holmberg. In a town where UPMC controls more than 60 percent of the market, Holmberg says there needs to be healthier competition among providers.

There’s another reason an insurance company would decide to become a healthcare provider: the Affordable Care Act. It tells insurance companies what basic services to offer; who they must insure and even what percent of premiums can go to administrative expenses and profits. That takes away a lot of what insurance companies used to do, so they’re looking for new reasons to exist.

“Insurers are trying to demonstrate that they bring value to the table and are doing more than just brokering a benefit … and doing more than paying bills,” says Gail Wilensky, senior fellow at .

Wilensky says some insurance companies are responding by building more efficient networks of high-quality providers. Highmark went a step beyond that and became a provider of health care itself.

A Speedy Transition From ‘One Of The Least Competitive Environments’

UPMC responded by expanding its existing insurance business and refusing to sign a new long-term contract with Highmark, saying it could not both compete and work with Highmark.

“We couldn’t have a contract with them,” says UPMC President and CEO Jeffrey Romoff, “Because they [Highmark] have the burden of keeping their provider side alive. So, for every one of their insurance subscribers they will want to steer them to go to their own providers.”

The divorce of Highmark from UPMC is all but final now. An agreement between the two companies will expire on January 1, 2015. The state of Pennsylvania negotiated a . It does things like ensure Highmark subscribers already in certain kinds of treatment at UPMC can continue receiving care.

Now the Pittsburgh health care landscape looks very different. “It went from one of the least competitive environments that you can imagine — a dominant insurer and a dominant health system joined at the hips with a long term contract,” says Romoff, “To one without a long-term contract with, now, five choices.”

In addition to the two new competitors, UPMC invited three large insurance companies into the Pittsburgh market: Cigna, Aetna and United Healthcare. “Competition is good,” says Romoff, “It keeps us all on top of our game. It gives us incentive to not be fat and sloppy.”

With competition come the marketing campaigns. UPMC is banking on its good reputation. Highmark will appeal to those concerned about price. “For some people their monthly premium and the cost of their health care may be more important than having access to everything,” Holmberg says.

Painful Change?

In Pittsburgh now people have a lot more choices — and decisions — to make when it comes to their health care. That’s supposed to be a good thing. But for Jameson, who was satisfied with her Highmark-UPMC combination, the extra work is a pain. “I just don’t like change. I shouldn’t have to change,” says Jameson.

It’s not just patients dealing with change. Employers who buy insurance for their workers face difficult decisions too. With two insurance/provider networks that don’t allow access to each other, Pittsburgh employers can be put in the position of, effectively, choosing which doctors treat their workers.

“Employers want to provide benefits that allow them to be competitive and attract and retain a productive work force,” says Jessica Brooks, executive director of the . “They don’t want to be in the business of making personal life decisions around who their employees can see and who they can’t see,” she says.

The Affordable Care Act aims to increase the quality and affordability of health care. Creating competitive marketplaces is part of the plan. It will be a few years before people in Pittsburgh and around the country know whether the changes happening now make those goals reality.

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Missing HSA Money Raises Oversight Questions

Jeff Brady, NPR News — Fri, 19 Feb 2010 08:55:00 +0000

This story comes from our partner

Lon and Wendy Nestrud were shocked to find that money they had deposited in their HSA was missing. Now some critics are calling for more regulation of these accounts. (Jeff Brady/NPR)

Thousands of people are learning that money they squirreled away in health savings accounts is gone. Many thought the money was sitting safely in banks. But now it appears it was stolen.

Federal investigators have released few details, but all the cases have one thing in common: a Chicago company called Canopy Financial.

Now critics are questioning whether more government oversight is needed for the accounts.

Lon and Wendy Nestrud are self-employed and live in Denver. Both work from home – she’s a musician and he’s a software consultant. Conventional health insurance was too expensive, so they have a high-deductible plan for things like hospitalization and a health savings account for routine expenses.

In December, Wendy was at the dentist for a regular cleaning. Afterward she pulled out her health savings account debit card.

“My card was declined,” she says. “It kind of set my heart racing.”

She knew there was enough money in the account – about $2,000.

The Nestruds called Shawnee Administrative Services, the company that managed their HSA. That’s when they learned that another company that processed transactions for Shawnee was in trouble: Canopy Financial’s co-founder had been arrested and money was missing from HSAs.

Hiring a lawyer seemed prudent, but the Nestruds figured that could easily cost them more than the $2,000 in their account. They found a Facebook group of others affected by the Canopy bankruptcy. But specifics in the case are still hard to come by.

“We’re now creditors in Canopy Financial’s Chapter 7 bankruptcy filing,” says Lon Nestrud. “From my understanding there are a lot of creditors and not enough money to cover all that.”

No charges have been filed against Canopy executives related to the missing HSA money. Charges have been brought in a related investment fraud case. Canopy co-founder Jeremy Blackburn is free on $1 million bail. His attorney says he won’t talk to NPR. A spokesman for the U.S. attorney’s office in Chicago says only that the investigation is continuing.

Meantime the Nestruds are left wondering if they’ll ever see their HSA money again. And they’re not alone. Nearly 14,000 customers of Maryland-based Coventry Health Care also are affected. An attorney for the company, Neal Colton, says $17 million is missing. Coventry has replaced that money for its customers and will try to recover as much as it can in the bankruptcy.

This case has prompted some tough questions about HSAs. How could this money just disappear? Who was monitoring Canopy Financial? Some people are saying more government regulation is needed.

“We set up a whole financial industry without the commensurate regulation,” says Sara Horowitz, executive director of the Freelancers Union. “What we’re seeing are all these people who are being affected. And that’s, I think, what really we need to talk about here.”

While the Freelancers Union didn’t do business with Canopy, 82 of her members were hurt by Canopy’s bankruptcy, and they’ve asked for help.

HSA supporters say they’re taking a wait-and-see approach on the question of new regulation. They want to learn what the criminal investigation reveals before deciding whether the current system needs to be tweaked. They do think there’s a lesson in all this for HSA holders though.

“Know your trustee,” says Kevin McKechnie, executive director of the HSA Council at the American Bankers Association. “If you’re going to give money to somebody, who are you giving it to?”

The Nestruds say they’ve learned that lesson. When they sign up for their next health savings account they’ll more closely examine which companies are involved. And they say they’ll probably feel more comfortable going with big companies they already know.

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For One Senior, Medicaid Provides Model Care

Jeff Brady, NPR News — Mon, 05 Oct 2009 16:00:00 +0000

This story comes from our partner

Gracie Scarrow and her daughter Lela Petersen are very satisfied with the care Scarrow receives through Medicaid. (Photo by Barry Gutierrez for NPR News)

Lela Petersen thinks about health care a lot these days. She’s a small business owner who pays $1,150 a month to an HMO, covering her and her husband. Petersen doesn’t have any other option, but her 94-year-old mother, Gracie Scarrow, is another story.

For the past four years Scarrow has been receiving long-term care at the Lincoln County Hospital and Nursing Home in Hugo, Colo., paid for largely by her Medicaid coverage. Medicaid is the federal and state-funded program for the poor and disabled. Both mother and daughter say they are very satisfied with the program. Petersen says her mother is getting exactly the care she needs.

A Comfortable Life

At the nursing home, in her room she shares with another woman, Scarrow has decorated nearby shelves with stuffed animals she won playing bingo. She has a keyboard next to her bed, and with only a little prompting Scarrow will turn it on and play the old hymn “What a Friend We Have in Jesus.”

Most days Scarrow seems to get along fine at the nursing home. She always carries an oxygen tank with her, even when she moves slowly down the hall to the dining room for lunch.

More on Medicaid

Medicaid Explained

“Are You Covered?”

As a nurse’s aide, Gracie Scarrow spent 20 years around nursing homes, and knew she never wanted to live in one. But the day came when she no longer had a choice.

“I have congestive heart failure,” says Scarrow, sitting on the edge of her bed. Before arriving here, she was living by herself until she passed out one night. “I had a heart pill in my hand, but I didn’t take it.”

Petersen says her mom couldn’t afford the nursing home on her own. Her Social Security income is $600 a month and after selling her house she cleared only $3,500. A doctor suggested signing up for Medicaid to pay the $80,000 a year bill for her long-term care. Scarrow is left with about $50 of her Social Security check each month for spending money.

Petersen said, at first, her mother was embarrassed about accepting government help, because she’s always been independent and supported herself. Much of her life was spent in facilities like this one, as a nurse’s assistant.

“Mom worked in an era when health care was what it was called. It was called care. Kindness and care. In today’s world, health care is money,” said Petersen.

States Feel The Pinch

Colorado has nearly a half-million people on Medicaid and, like in a lot of other states, that number rose dramatically in the past year, increasing by more than 10 percent. The economy and unemployment are largely to blame.

Typically states and the federal government split the cost of Medicaid, though with the recent stimulus money the federal government is picking up a larger share now. Even with that help, Colorado has difficulty paying its share. Recently the governor trimmed payments to doctors and hospitals to help balance the state’s budget.

Hoping For Overhaul

Politically, Petersen says she typically votes Republican. But last year she voted for Obama, and she’s excited about efforts to overhaul health care in the United States. She’s frustrated with the costs of her own coverage, but very happy with the Medicaid coverage her mother receives.

She doesn’t have a specific solution for health care overhaul, but she does support things like tort reform and tighter regulations for insurance companies. In coming months, she’ll watch closely to see what solutions policymakers in Washington come up with.

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Arizona Faces ‘Financial Tsunami’ Over Medicaid

Jeff Brady, NPR News — Tue, 01 Sep 2009 09:28:00 +0000

This story comes from our partner

Maricopa, Ariz., was one of the fastest growing cities in the U.S. until vast unemployment and the real estate bust swept through the country. (Joshua Lott/Getty Images)

Arizona has one of the highest Medicaid rates in the country. About 1 out of every 5 residents is covered by the program for the poor and disabled. That doesn’t include illegal immigrants, who are barred from receiving state services. And the Medicaid rolls there are increasing rapidly in this economy, primarily due to slumps in the construction and service industries.

“In a normal year, we might see 60,000 additional members,” says Tony Rodgers, director of the Arizona Health Care Cost Containment System (AHCCCS), the state’s Medicaid agency. “We’re probably going to see close to 300,000 additional members by the end of the year.”

The discussion in Washington over health care includes an expansion of Medicaid, but Arizona is having trouble paying for the program at its current level.

“This is kind of a financial tsunami for us,” says Rodgers. “And we’re just trying to hold onto any log that’s rolling along, and trying to save ourselves until the wave stops.”

The Medicaid problem has contributed to a budget standoff between Republican Gov. Jan Brewer and the GOP-controlled state Legislature. The governor wants a 1 percent sales tax increase to fill a budget gap of more than $3 billion. But legislative leaders say they don’t have the votes for that.

Lawmakers are concerned about more than just money.

“We have currently over 1 out of 5 persons in Arizona on AHCCCS,” says state Rep. Nancy Barto, a Scottsdale Republican. “That says to me right now we’re already – government’s already – doing too much.”

Barto thinks the feds should focus instead on encouraging more competition in health care.

Arizona was the last state in the union to embrace the Medicaid program. From the mid-1960s until 1982, the state forfeited its share of federal Medicaid money rather than create a state program.

That history has supporters of expanding Medicaid worried. If Congress requires Arizona to contribute more money to the program, some predict the state will say, “No thanks.”

“We’d probably walk away,” says Eddie Sissons, executive director of the Arizona Foundation for Behavioral Health. “And we’d have to wait for either a change in our economy, and possibly even a change in the political environment in Arizona.”

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California PAC Sponsors ‘Tea Party Express’

Jeff Brady, NPR News — Tue, 01 Sep 2009 00:00:00 +0000

This story comes from our partner

Jean Sadler and Karen Griggs drove from Stockton, Calif., to attend the Tea Party Express rally in Sacramento. Both are worried about the government getting more involved in health care. The two met on the Internet while trying to find Tea Party events to attend. (Jeff Brady/NPR)

Members of Congress will return from their August recess soon. After getting an earful back home about overhauling health care, they can expect a rowdy reception on Capitol Hill too.

Over the weekend, a California-based political action committee launched a cross-country bus tour dubbed the “Tea Party Express.” They plan to wind up the tour in Washington, D.C., next month – just about the time lawmakers return to the Capitol.

Based in Sacramento, officials with the “Our Country Deserves Better PAC” say they’re trying to bring together people with a wide array of concerns that center on what they call heavy-handed government policies.

“It’s about time for somebody to run to the front of the parade,” says Mark Williams, a conservative talk radio host and vice chairman of the PAC. “[To say] follow me and to try to herd all these cats into a semi-coherent message.”

The group receives most of its contributions from people who give less than $200.

In Elko, Nev., a rally attracted several hundred people Saturday evening. President Obama visited the small town three times during his campaign. Still, fewer than a third of those voters picked him on Election Day.

There were few, if any, fans of Obama at the rally – and plenty of critics of him and the U.S. government in general.

One woman directed her anger at the Bureau of Land Management and U.S. Forest Service, which sometimes block backcountry roads to protect the environment.

“The federal government wants to close more of our roads,” said Sherry Hussey, who was holding a sign that read “No more closed roads.”

“I have three little girls,” Hussey said. “We camp and we hunt and we fish and we play on four-wheelers. I have every right to use public roads on public lands.”

Mining engineer David King wore a T-shirt with Obama’s face on it that read “Don’t tax me bro.”

Others held signs criticizing government involvement in health care and excessive federal spending.

The scene on Sunday in Ely, Nev., was similar. This is a place where people are comfortable using language most others left behind with the end of the Cold War.

“We don’t need a communist nation and that’s what Obama’s taking us to,” says Jeannette Cobb, who traveled from Eureka, Nev., to attend the rally. “We don’t want that.”

Her husband, Robert Cobb, is a retired sheriff’s deputy; he says he worries the federal government is taking control of people’s daily lives.

“They’re talking about taking over the Internet in an emergency,” Cobb says. “Well, who declares an emergency? I don’t want my government to have that much power.”

The Cybersecurity Act of 2009 has been widely reported in conservative media as a power grab by the White House. Supporters of the legislation say it is designed to make it more difficult for hackers to disrupt business on the Internet.

Tea Party Express chief strategist Sal Russo says people who come to these rallies are much more concerned about broad ideals than about specific policy solutions.

“I think there’s a feeling that getting a bigger government, higher taxes – a more intrusive government – is the wrong way to do it,” Russo says. “I think that’s a unifying thread.”

There is something else that unifies a lot of the folks attending Tea Party Express rallies: Many say they feel left out – as if no one in Washington is listening to them anymore.

“The news media made me feel like we were the minority,” Jason McGowan says. “That’s what Obama wants; that’s what everybody wants and that I should just shut up,” adds the 31-year-old machinist from Carson City, Nev. “It’s kind of nice that there’s other people out there that think the way I do.”

The Tea Party Express will motor through about two dozen more cities, arriving in Washington on Sept. 12 for what the group calls “a taxpayer march on D.C.”

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