By Blake Farmer,
Nashville Public Radio October 29, 2019
While
thousands of cities and counties have banded together to sue opioid makers and distributors
in a federal court, another group of plaintiffs has started to sue
on their own: hospitals.
Hundreds
of hospitals have joined in a handful of lawsuits in state courts, seeing the
state-based suits as their best hope for winning meaningful settlement money.
“The
expense of treating overdose and opioid-addicted patients has skyrocketed,
straining the resources of hospitals throughout our state,” said Lee Bond, CEO
of Singing River Health System in Mississippi in a statement. His hospital is
part of a lawsuit in Mississippi.
Hospitals
may discover downsides to getting involved in litigation, said Paul Keckley, an
independent health analyst.
“The
drug manufacturers are a soft target,” he said. But the invasive nature of
litigation may generate “some unflattering attention” for hospitals, he added.
They’d likely have to turn over confidential details about how they set prices,
as well as their relationships with drug companies.
So,
despite representing the front lines of the opioid epidemic, most hospitals
have been hesitant to pile on.
Just
about every emergency room has handled opioid overdoses, which cost hospitals billions of dollars a year, since
so many of the patients have no insurance. But that’s just the start. There are
also uninsured patients, like Traci Grimes of Nashville, who end up spending
weeks being treated for serious infections related to their IV drug use.
“As
soon as I got to the hospital, I had to be put on an ice bath,” Grimes said of
her bout with endocarditis over
the summer, when bacteria found its way to her heart. “I thought I was going to
die, literally. And they said I wasn’t very far away from death.”
Grimes
is in recovery from her opioid addiction but still getting her energy back
after spending a month being treated through a special intravenous line to her
heart at Vanderbilt University Medical Center. Most patients could be sent home
with a PICC line, but not
someone with a history of illicit IV drug use who could misuse it to inject
other substances. Vanderbilt and other academic medical centers recognize the
problem and have established special clinics to
manage these complex patients.
Grimes,
37, said she’s grateful for the care she received, which included multiple
procedures and treatment for pneumonia, hepatitis A and hepatitis C. But like
most patients in her situation, she’s uninsured and strapped for cash.
“I
can’t pay a thing. I don’t have a dime,” she said. “So they do absorb all that
cost.”
Hospitals
estimate treating complicated patients like Grimes costs an average of $107,000
per person, according to court documents. The total costs to U.S. hospitals in
one year, 2012, exceeded $15 billion, according to a report cited in the suits.
And most patients either couldn’t pay or were covered by government insurance
programs.
The
expense is a leading reason cited by the hospitals who’ve banded together in a
handful of lawsuits in Tennessee, Texas, Arizona, Florida, Kentucky, Mississippi and West Virginia. These
suits are separate from the consolidated federal case in Ohio that includes
cities and counties around the country. But the most prominent hospitals in
those states, like Vanderbilt, have opted not to join the litigation.
West
Virginia University President E. Gordon Gee, who oversees the state’s largest
hospital system, has been urging others to join the suits. He and former Ohio
Gov. John Kasich established an organization meant to
highlight the harm done to hospitals by the opioid crisis.
“I
think the more hospitals we have that want to be involved in this in some way,
the better off we are,” he said. “You know, there’s always safety in mass.”
By
“safety,” Gee acknowledged a central concern for hospitals weighing the risk
versus reward of going to court. They may have the tables turned on them by the
pharmaceutical companies since, until recently, patients in the hospital were often prescribed large quantities
of opioids, contributing to the epidemic.
“I
suspect there are some hospitals … who are afraid that if they get into it,
those who are on the defense side will point out, well, maybe hospitals were
really the problem,” he said.
The
lead defendant in the suits, Purdue Pharma, did not respond to requests for
comment.
Gee
said hospitals can claim they were victims of dubious opioid marketing.
Still,
many high-profile hospitals are sitting out the lawsuits, even though they’re
typically the ones that treat the most complicated and expensive patients.
Health
analyst Keckley said if hospitals join the litigation, they may be forced to
cough up actual totals for their opioid-related financial damages. That could
force hospitals to reveal how much more they charge for some services, compared
with the actual costs of providing the care.
“Hospitals
basically have charged based on their own calculations and the underlying cost
of delivering that care has been virtually nontransparent,” Keckley said. “Then
you open a whole new can of worms.”
Big
academic medical centers especially, Keckley said, have relationships with
drugmakers that they may not want publicly highlighted.
Still,
hospitals might benefit without having to put their names on lawsuits and
exposing themselves to risk. In Oklahoma, the state won an early opioid lawsuit
in August. The payout does not direct money to hospitals, per se. However,
Patti Davis, president of the Oklahoma Hospital Association, said they’re happy
to see some of the money was earmarked for treatment.
“When
we see treatment, we get very excited because it’s our hospitals providing a
lot of the treatment,” she said.
But
nationally, hospitals can’t count on potential settlement money to trickle down
to their bottom lines, said Don Barrett, a Mississippi litigator helping
hospitals sue in state courts.
Two
decades ago, when the target of litigation was Big Tobacco, Barrett was working
for states. He said hospitals didn’t join in, to his surprise. And when the
states won those suits and started getting paid damages, hospitals missed out.
Only about a third of the money was even spent on health or tobacco control, according to one watchdog’s
estimate.
“I
guess they thought that the states were going to take care of them, that these
local governments were going to take this money and give it to the hospitals
where it would do some good,” he said. “Of course, they didn’t give them a damn
penny.”
Some
states did set up trust funds that
might help patients in the hospital stop smoking. But many are using the money to fill
potholes, pay teachers and otherwise close gaps in state budgets.
Though
not detailed in the lawsuits, many of the participating hospitals are in
varying levels of financial distress, and not always primarily because of the
opioid epidemic. Facilities owned by Community Health Systems make up a large
share of the hospitals suing in Alabama, Florida, Mississippi, Tennessee and
Texas. The investor-owned hospital chain, based in Franklin, Tenn., has been
struggling mostly because of an outsize debt load
taken on during a rapid period of expansion.
A CHS
spokesperson declined to comment, citing a policy not to talk about pending
litigation.
But
Barrett said he expects more hospitals to join the cause rather than relying on
states to determine how settlement money is spent.
“We’re
not going to allow that to happen this time,” he said. “We can’t afford to
allow it to happen this time.”
This
story is part of a partnership that includes Nashville Public
Radio, NPR
and Kaiser Health News.
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