TITLE: ‘They See a Cash Cow’: Corporations Could Consume $50 Billion of Opioid Settlements
https://kffhealthnews.org/news/article/opioid-settlement-money-corporations-cash-cow/
EXCERPT: The marketing pitches are bold and arriving fast: Invest opioid settlement dollars in a lasso-like device to help police detain people without Tasers or pepper spray. Pour money into psychedelics, electrical stimulation devices, and other experimental treatments for addiction. Fund research into new, supposedly abuse-deterrent opioids and splurge on expensive, brand-name naloxone.
These pitches land daily in the inboxes of state and local officials in charge of distributing more than $50 billion from settlements in opioid lawsuits.
The money is coming from an array of companies that made, sold, or distributed prescription painkillers, including Johnson & Johnson, AmerisourceBergen, and Walgreens. Thousands of state and local governments sued the companies for aggressively promoting and distributing opioid medications, fueling an epidemic that progressed to heroin and fentanyl and has killed more than half a million Americans. The settlement money, arriving over nearly two decades, is meant to remediate the effects of that corporate behavior.
But as the dollars land in government coffers — more than $4.3 billion as of early November — a swarm of private, public, nonprofit, and for-profit entities are eyeing the gold rush. Some people fear that corporations, in particular — with their flashy products, robust marketing budgets, and hunger for profits — will now gobble up the windfall meant to rectify it.
“They see a cash cow,” said JK Costello, director of behavioral health consulting for the Steadman Group, a firm that is being paid to help local governments administer the settlements in Colorado, Kansas, Oregon, and Virginia. “Everyone is interested.”
Costello receives multiple emails a week from businesses and nonprofits seeking guidance on how to apply for the funds. To keep up with the influx, he has developed a standard response: Thanks, but we can’t respond to individual requests, so here’s a link to your locality’s website, public meeting schedule, or application portal.
KFF Health News obtained email records in eight states that show health departments, sheriffs’ offices, and councils overseeing settlement funds are receiving a similar deluge of messages. In the emails, marketing specialists offer phone calls, informational presentations, and meetings with their companies.
Alabama Attorney General Steve Marshall recently sent a letter reminding local officials to vet organizations that reach out. “I am sure that many of you have already been approached by a variety of vendors seeking funding for opioid initiatives,” he wrote. “Please proceed with caution.”
Of course, not all marketing efforts should prompt concern. Emails and calls are one way people in power learn about innovative products and services. The country’s addiction crisis is too large for the public sector to tame alone, and many stakeholders agree that partnering with industry is crucial. After all, pharmaceutical companies manufacture medications to treat opioid addiction. Corporations run treatment facilities and telehealth services.
“It’s unrealistic and even harmful to say we don’t want any money going to any private companies,” said Kristen Pendergrass, vice president of state policy at Shatterproof, a national nonprofit focused on addiction.
The key, agree public health and policy experts, is to critically evaluate products or services to see if they are necessary, evidence-based, and sustainable — instead of flocking to companies with the best marketing.
Otherwise, “you end up with lots of shiny objects,” Costello said.
And, ultimately, failure to do due diligence could leave some jurisdictions holding an empty bag.
Take North Carolina. In 2022, state lawmakers allotted $1.85 million of settlement funds for a pilot project using the first FDA-approved app for opioid use disorder, developed by Pear Therapeutics. There were high hopes the app would help people stay in treatment longer.
But less than a year later, Pear Therapeutics filed for bankruptcy.
TITLE: Understaffed and neglected: How real estate investors reshaped assisted living
https://www.washingtonpost.com/business/2023/12/17/assisted-living-industry-real-estate/
EXCERPT: Conceived about 40 years ago to give seniors more freedom in their final years of life, the assisted-living industry has been reshaped by real estate speculators looking to cash in on an aging nation. They were aided by Congress in 2008, when a new law gave certain investors the ability to hold senior-housing properties tax-free while also taking a slice of their annual income.
As a result, many facilities across the nation are now held by investors under pressure to produce profits for shareholders. In some places, a bare-bones approach to staffing and pay has produced a chaotic environment where medications are missed, falls and bed sores go unnoticed, residents are abused and confused seniors wander away undetected, according to a review of 160,000 state inspection reports and interviews with more than 50 current and former employees of assisted-living businesses and relatives of current and former residents.
In the past five years alone, nearly 100 residents have died after wandering away from these facilities or being left unattended outside, a Post investigation found. State regulators investigating these deaths frequently cited limited staff, poor training or neglect.
Business leaders acknowledge struggling to find workers, a problem they blame on a nationwide labor shortage that worsened during the pandemic. Companies have had to adjust by “asking current staff to work extra shifts, hiring agency staff, or limiting new admissions because they refuse to compromise care,” Rachel Reeves, a spokeswoman for the American Health Care Association/National Center for Assisted Living, an industry lobbying group, said in an email.
But data and interviews suggest these facilities are losing staff because they don’t pay a competitive wage.
Nationally, assisted-living aides make an average of $15 an hour, according to the U.S. Bureau of Labor Statistics — less than most Starbucks baristas. Yet these employees are tasked with bathing, toileting, medicating and safeguarding a population growing increasingly frail and likely to suffer from dementia or Alzheimer’s.
When staff is limited, one caregiver may assume responsibility for two dozen residents. Last year, in a national survey of 120 facilities by the National Center for Assisted Living, 98 percent said they asked staff to work extra shifts to make up for staffing shortages.
“Of course the care is going to suffer. Because I am exhausted,” said Amanda Matthews, 46, a longtime caregiver and manager of memory-care facilities in Colorado.
TITLE: Private Equity: The Metastasizing Disease Threatening Health Care
https://www.healthaffairs.org/content/forefront/private-equity-metastasizing-disease-threatening-health-care
EXCERPT: In 2010, when purchasing Prospect Medical Holdings, the private equity firm Leonard Green and Partners made numerous lofty promises to state regulators around expanding services, capital investments, and modernization. They assured regulators they would not only maintain hospitals but would increase the quality of care.
Over the course of its 10-year ownership, Leonard Green broke many of the promises made to regulators. Instead, Leonard Green and Prospect’s minority owners took approximately $658 million in fees and dividends from the safety-net hospital chain, in part by saddling it with debt and using the proceeds of the loans to pay themselves. They withdrew this money from Prospect even as many of its hospitals suffered deteriorating financial conditions and quality concerns: Between fiscal years 2015 and 2020, Leonard Green continued to profit while the hospital company took a $603 million cumulative comprehensive loss.
Now, more than 10 years after Leonard Green’s purchase, Prospect is seeking to sell off hospitals, laying off workers, and cutting or reducing critical services. Despite the hospitals’ distress, Leonard Green has profited immensely while the communities that Prospect services—which desperately need high-quality and affordable health care—have suffered. Leonard Green literally took the money and ran.
This is not an isolated incident. Rather, it is the norm when it comes to the increasing trend of private equity investments in the health care system. Communities across the country are littered with stories similar to Prospect, in which rich private equity firms make millions while patients suffer. The problem has metastasized.
Private equity firms such as Leonard Green increasingly make up a substantial portion of investment in US health care companies, touching virtually every sector of the industry. Asset managers have record levels of available capital earmarked for health care investment; as of 2019, private equity firms had $29.2 billion in capital waiting to be invested in the health care industry.
At least 386 US hospitals are currently owned by private equity firms. That represents 9 percent of all private hospitals and 30 percent of all proprietary for-profit hospitals. More than a third (34 percent) of private equity-owned hospitals serve rural populations, which are already experiencing a lack of access to high-quality care.
This trend has produced troubling impacts for patients and health care workers across the country. We have seen private equity firms aggressively loot safety-net hospitals, strip out valuable real estate, cut critical but less profitable services, and exploit government funding programs designed to support and stabilize health care access. The consequences have been borne by health care workers and the communities they serve. Private equity’s hospital profiteering has resulted in dangerous conditions, closures, and reduced access to services, declining quality, and fraud.
Despite the growing threat they pose to critical health care services, private equity firms are largely able to operate in the shadows. And aside from a few recent actions by the Federal Trade Commission (FTC), Washington—under Democratic and Republican administrations—has largely been asleep at the wheel, or has willingly looked the other way.