Detroit schools shut off water over high levels of lead, copper

The city of Detroit has shut off drinking water in all public schools after officials found high levels of lead or copper in samples from 16 out of 24 schools tested.

While the superintendent said the move was “out of an abundance of caution” before school starts next week, officials believe old fixtures and aging infrastructure, not the water source, is to blame. Eighteen other schools had already been using bottled water due to quality issues.

“Although we have no evidence that there are elevated levels of copper or lead in our other schools where we are awaiting test results, out of an abundance of caution and concern for the safety of our students and employees, I am turning off all drinking water in our schools until a deeper and broader analysis can be conducted to determine the long-term solutions for all schools,” Nikolai Vitti, superintendent of Detroit Public Schools Community District, said in a statement on Wednesday.

High levels of lead in tap water can cause adverse health effects if it enters the blood stream. According to the Centers for Disease Control and Prevention (CDC), children and pregnant women are the most vulnerable to the effects of lead exposure.

Even low levels of lead in children affect IQ, ability to pay attention and academic achievement. It can also impact physical development or in severe cases be fatal, while high levels of copper can cause vomiting, stomach cramps, or even kidney and liver failure. According to the CDC, the effects cannot be reversed.

The district has more than 100 buildings and serves more than 40,000 students. It operates separately from City Hall, but Vitti said that he’s working with Mayor Mike Duggan to address the issues. It was Vitti’s decision, not a federal or state mandate, to test the water, and then shut it off districtwide.

He told the Detroit Free Press he will be creating a task force to determine the cause and find a solution.

“I haven’t made this decision based on what happened on the Flint situation,” Vitti told Fox 2 Detroit. “I’m making this decision because I feel like it’s the best decision for children.”

Concerned parents told the news outlet that more should have been done in the past to prevent the situation from escalating, which Vitti agreed with.

“What’s most troubling is that it has taken this long to have a broader conversation about the quality of infrastructure in our schools,” he said.

The Great Lakes Water Authority, the agency that provides water to the schools, released a statement assuring the public that water in their homes was safe to drink. The agency will also be providing bottled water to the district. A district spokesman said the water will not be turned back on until “we find a solution for all schools.”

http://www.foxnews.com/health/2018/08/30/detroit-schools-shut-off-water-over-high-levels-lead-copper.html

Pediatricians Make Change to Child Car Seat Guidelines

Kids should ride in rear-facing car safety seats until they reach the highest height and weight their seat can hold, a leading pediatricians’ group now says.

The previous advice from the American Academy of Pediatrics was to stop using a rear-facing seat when a child was 2 years old.

“Fortunately, car seat manufacturers have created seats that allow children to remain rear-facing until they weigh 40 pounds or more, which means most children can remain rear-facing past their second birthday,” policy statement lead author Dr. Benjamin Hoffman said in an AAP news release.

“It’s best to keep your child rear-facing as long as possible. This is still the safest way for children to ride,” Hoffman added. He’s chairman of the AAP Council on Injury, Violence and Poison Prevention.

Once kids outgrow a rear-facing seat, they should use a forward-facing safety seat with a harness until they reach its height and weight limits. Many seats can hold kids up to 65 pounds or more.

After that, children should use a belt-positioning booster seat until the vehicle’s lap and shoulder belt fits properly. This is typically when they reach 4 feet 9 inches in height and are 8 to 12 years old.

Using the right seat reduces a child’s risk of death or serious injury by more than 70 percent. Use it on every car ride, Hoffman said.

Car crashes are a leading cause of death for children, claiming four kids under age 14 every day during the last 10 years, he said.

“We hope that by helping parents and caregivers use the right car safety seat for each and every ride that we can better protect kids, and prevent tragedies,” Hoffman said.

When children are old enough and big enough to use the vehicle’s own restraints, they should always use lap and shoulder seat belts. For best protection, all children under age 13 should sit in the rear seat of a car.

The updated policy statement was published online Aug. 30 in the journal Pediatrics.

More information

The U.S. National Highway Traffic Safety Administration has more on child safety.

SOURCE: American Academy of Pediatrics, news release, Aug. 30, 2018

https://consumer.healthday.com/public-health-information-30/safety-and-public-health-news-585/pediatricians-make-change-to-child-car-seat-guidelines-737227.html

Insurers gain on Medicare Advantage incentive to add coding to up pay

Health insurers have perfected a way to wring billions more in revenue from the Medicare program by combing patient medical charts for additional diagnosis codes to submit to the federal government for payment.

The latest example of the massive returns that insurers reap from the practice known as a retrospective chart review was outlined in legal documents filed in a case against Indianapolis-based health insurer Anthem. The documents show Anthem pocketed more than $112 million in additional Medicare Advantage risk-adjustment payments in 2015 and $102 million in 2014 while spending little over $18 million each year to carry out the review program.

Identifying and documenting additional diagnosis codes to send to the CMS for risk-adjustment payment is perfectly legal if the patient’s medical record supports it. In fact, the way Medicare pays Advantage organizations encourages them to code all diagnoses possible. Traditional Medicare providers do not have that incentive.

But as enrollment in Medicare Advantage grows and health insurers invest more in that lucrative market, it is likely they will continue to partner with third-party vendors to perform medical chart reviews to find thousands of extra diagnostic codes that translate to millions in taxpayer-funded Medicare dollars, putting the cash-strapped program at risk.

“Medicare will pay Medicare Advantage plans $200 billion more over the next 10 years than those plans should receive,” said Richard Kronick, a professor at the University of California at San Diego and former director of the Agency for Healthcare Research and Quality during the Obama administration, citing his own research published in Health Affairs in 2017. That’s unless the CMS opts to tweak the payment system so Advantage plans are not paid more than traditional Medicare fee-for-service providers when they submit additional diagnostic codes.

Health insurers aren’t keen to advertise the extra revenue they obtain from chart review programs and other practices aimed at increasing risk-adjustment payments. But their returns-on-investment are sometimes included in whistle-blower and Justice Department lawsuits against the insurers. Third-party vendors that help insurers carry out retrospective reviews also like to tout the big ROI they purport to deliver.

Anthem’s alleged benefit from the practice pales in comparison with UnitedHealth Group’s. The Justice Department alleged in a whistle-blower lawsuit it joined last year that UnitedHealth obtained $882 million for the 2014 payment year, $758 million for 2013 and $455 million for 2012 in additional Medicare Advantage risk-adjustment payments as a result of its medical record reviews. In all, the feds claimed that UnitedHealth took in over $3 billion in additional risk-adjustment payments from the CMS from 2010 to 2015 by combing medical records.

Both Anthem and UnitedHealth have argued their practices are by-the-book. But the feds say the insurers’ returns may be high because of fraudulent practices that include knowingly neglecting to delete inaccurate codes. The Justice Department is also investigating the risk-adjustment and chart review programs at Aetna, Cigna and Humana but hasn’t alleged any wrongdoing against them, according to the companies’ documents filed with the Securities and Exchange Commission.

Risk-adjustment coding is critical to the success of a Medicare Advantage plan and relying on the diagnostic codes that providers submit won’t cut it, insurers argue. “Doctors are terrible at this. Doctors see patients, and coding is complicated and esoteric,” said Dr. Mario Molina, former CEO of Advantage insurer Molina Healthcare who now heads up Golden Shore Medical, a chain of California clinics. “Theoretically you should be able to get all the info from the claims data, but health plans hire coders or nurses to look at the chart and find things they can take credit for and get paid more.”

Creating incentives

The CMS pays Medicare Advantage organizations a per member, per month fee to care for seniors enrolled in the plans. Since the 1980s, that payment has been adjusted based on demographic information such as age and sex. But in 2004, the government implemented a new risk-adjustment model that tweaked payment based on demographic information and the health conditions of each member.

Each Medicare Advantage beneficiary is assigned a risk score based in part on their health diagnoses. Insurers are supposed to be paid more for sicker members with higher risk scores because they use more resources to care for them, while plans receive a lower payment for healthier-than-average members with lower risk scores. The payment system is designed to prevent health insurers from cherry-picking only healthy members and it has worked to that effect.

At the same time the system created strong incentives for health insurers to report as many diagnosis codes as possible because that can lead to higher risk scores and higher payments from the CMS. The annual payment to an Advantage plan for an 84-year-old male patient with diabetes without complications who is not eligible for Medicaid would be $6,765, according to the Medicare Payment Advisory Commission. But tack on a diagnostic code for vascular disease and that same diabetic patient’s Medicare payment would jump to $9,796.

It’s important to note that the CMS requires diagnosis codes to be backed up by the patient’s medical record and result from a hospital stay or face-to-face clinician visit. There have been allegations that some health insurers haven’t followed this rule.

The traditional Medicare fee-for-service program is paid differently, and there is no incentive for providers in that program to code all possible diagnoses. Because that incentive is present in Advantage plans, the average risk score for Advantage enrollees is about 8% higher than the scores for similar Medicare fee-for-service beneficiaries, according to MedPAC’s latest report, despite strong evidence that Advantage members are not sicker than fee-for-service patients.

The result is that payments to Medicare Advantage were 2% to 3% higher in 2016 than they would have been if those same patients were treated under fee-for-service Medicare, according to MedPAC. With that extra money, Advantage plans can offer benefits to their patients that fee-for-service beneficiaries don’t have access to, such as vision care and health club memberships. Payments to Medicare Advantage plans totaled $210 billion in 2017 to manage the care for 19 million seniors.

The CMS has taken steps to adjust for the higher rate of coding in Advantage to create more parity in payment with traditional Medicare, but experts like Kronick argue the adjustment isn’t enough. Powerful insurance industry lobbies and voter reaction to Medicare payment cuts are one reason the CMS has not done more, he said.

The promise of big ROI

When the CMS began risk-adjusting Medicare Advantage payments, a cottage industry of third-party vendors formed to help insurers rake in more Medicare dollars by reviewing patient medical charts to find diagnoses that physicians didn’t code. Some also send clinicians to patients’ homes to perform health risk assessments to find additional diagnoses they can submit to the CMS to increase their payments.

Vendors with advanced analytics platforms that can comb through patient data and identify missing codes in claims often promise insurers high returns for using their risk-adjustment products. Verscend Technologies says on its website it helped Advantage plans secure $279 million in risk-adjustment payments in 2015 by deploying its “best-in-class” medical coders to find undocumented patient conditions. Thirty health plans, including Anthem, contract with Verscend for risk-adjustment. And business is good: Verscend closed last week on a $4.9 billion deal to acquire analytics company Cotiviti.

A case study published by Optum, which is owned by UnitedHealth Group, said it helped one payer identify a single provider whose patient medical records showed $1 million worth of medical codes for a year, but who didn’t send a claim for them. It also helped the payer identify a capitated provider with $250,000 in claims, but who did not submit the diagnosis data. Optum and Verscend declined to be interviewed for this story.

Another vendor called SCIO Health Analytics said its clients see an average increase to their patients’ risk scores of 18% in the first year of using its risk-adjustment services and 56% in the second year, translating to higher Medicare payments for the health plan. In one case study, SCIO said it helped a Texas-based Advantage plan with more than 65,000 enrollees increase its revenue potential by $24 million.

SCIO said its goal is to increase the accuracy of its clients’ diagnostic data through prospective and retrospective chart reviews and provider education. It analyzes patient data to look for gaps in documentation or diagnostic coding patterns that don’t make sense, and it fixes mistakes.

Donna DuLong, a senior consultant with SCIO, said the team often subtracts as many diagnostic codes from the claims as it adds. The CMS requires diagnosis codes submitted for risk-adjustment to be present in the patient’s medical record.

“Our focus is accuracy of documentation. The coding team is looking at the documentation and for this service, you either have the support (in the medical record) or you don’t,” DuLong said. Accurate documentation of patients’ medical conditions also helps ensure they are benefiting from care-management programs and other services that the payers provide, she said.

Most insurers are probably not out to inflate patient illnesses through their chart review programs, sources said. But DuLong acknowledged there is potential that plans will game the system by fraudulently making patients look sicker on paper to increase risk-adjustment revenue, though she said those bad actors are few and far between (and not her clients).

Reviewing the reviewers

The Justice Department has some possible suspects. Last month it told a federal court that Anthem wasn’t fully complying with a civil investigative demand to offer testimony about its chart-review program and asked the court to force the insurer to comply. In one document filed with the court, Assistant U.S. Attorney Li Yu said Anthem has already admitted in response to the investigation that it does not attempt to identify which medical codes that providers submit on claims are not supported in the medical record.

“Instead of using the chart review process to identify both additional codes to submit and corrections to be made, Anthem executed its chart review program solely to generate additional diagnosis codes to report so that it could receive more payments from CMS,” the court filing stated.

The federal government similarly argued that UnitedHealthcare for many years used its chart review program to find additional codes to send to the CMS for payment but didn’t bother to delete codes it knew were false and that would have saved Medicare a lot of money. One of the whistle-blower lawsuits against UnitedHealth was dismissed; the other case was pared down but is still alive.

Mary Inman, an attorney at law firm Constantine Cannon who brought one of the whistle-blower cases against UnitedHealthcare, said that the False Claims Act cases against Advantage insurers are the tip of the iceberg.

“This is clearly an industrywide practice that lots of managed-care organizations are involved in,” Inman said.

She also noted there have yet to be Medicare Advantage fraud lawsuits against the vendors that orchestrate the chart-review programs. Yet Verscend is mentioned throughout the Justice Department’s case against Anthem, as Ingenix—now named Optum—is in the whistle-blower lawsuit against UnitedHealthcare.

“That may be the common thread: Vendors will often work for multiple plans and be unscrupulous and encourage them to do this kind of risk-adjustment work; to go out and comb the records. There will be cases against the vendors,” she predicted.

http://www.modernhealthcare.com/article/20180901/NEWS/180839977

Glaxo targets 2020 for planned UAE facility

With the medical sector of keen interest to regional governments, the UK pharma group GlaxoSmithKline (GSK) has disclosed new details surrounding its planned expansion in the Gulf. This is set to include a new factory in the UAE that will begin production in early 2020, and an expanded facility in Saudi Arabia, both coming amid health challenges in the region with soaring numbers of diabetes, obesity, and heart disease.

“In the UAE, we are looking at options,” said Sally Storey, GSK’s general manager for the Gulf, adding that instead of building a facility from scratch, the drugmaker was leaning towards a partnership. “It may be that we don’t build something, we may look [to go] through a partnership.

“We are relatively advanced in that right now. We’re looking at about six products initially.”

This is double the number of drugs that Storey’s predecessor, Andrew Miles, had initially said the factory would produce. Production lines at the factory will likely begin rolling in late 2019 or early 2020, according to Storey.

“We’re looking to get the first manufactured product out on the ground in about a year-and-a-half’s time. That one is definitely progressing,” she said, noting that the project was “very important” for the company and its government partner, forming a “key part of the UAE’s agenda”.

Storey declined to specify which products would be manufactured. GSK makes a range of consumer drugs such as Voltaren and Panadol, in addition to vaccines and prescription medicines.

Pharmaceuticals make up the majority of GSK’s revenue, accounting for £17.3 billion (Dh82.5 billion) of £30.2 billion in annual sales, with its medicines holding leading market positions in respiratory and infectious diseases. In the Gulf, GSK currently manufactures around 80 per cent of its products in Saudi Arabia, through its GSK Saudi Arabia Ltd. (GSAL) partnership.

“What we’re trying to do there is bring the process back to deeper manufacturing, rather than just the packaging,” Storey said. “In the UAE, we’re at a much earlier stage, but we are committed to that journey.”

Declining to disclose the investment on the UAE facility, Storey said that as “with all of these things, it’s a huge challenge and often a huge capital investment. For example, we have products such as antibiotics which need a sterile environment – you need to build a separate site for them.”

GSK says it is expecting its business to grow in the Gulf in the future, and will continue to invest in the region both financially and through attracting top talent. “From a government perspective, one of the key areas they’re looking at is bringing more and more knowhow in to the region.”

She said that GSK would be able to “protect prices for the longer term”.

Reflecting this growing relationship between the company and local governments, earlier this summer GSK signed an agreement with the UAE to provide strategic stock in the event of an emergency. The stockpile will include several products for the treatment of respiratory diseases, nervous system diseases, infections, and other “key communicable diseases”.

Public health officials in the UAE have increasingly sought to strengthen the country’s crisis contingency planning, while ramping up efforts to introduce preventative healthcare to a young population.

Storey, who moved from Croatia to Dubai in January 2018, said that one of the most noticeable differences between the two regions was the age demographic. “One of the things that is more unusual about this part of the world is the younger population. When you’re looking at the health needs of the population, then obviously it’s younger here and hugely expat. So that’s interesting.”

Lifestyle-related diseases in the Gulf, especially among women, have been described by researchers as a “ticking time bomb” if not tackled soon. The health effects of obesity and smoking cigarettes in later life will place a huge burden on public finances, studies suggest.

“What are we going to do in partnership [with the government] to support that? That’s hitting here later than in other parts of the world,” Storey asked.

Another unique factor to this region, she continued, was the consciousness and budget control, “because oil revenues have been shrinking, people are looking at different ways to manage costs.”

Storey said the focus on innovation stands out in this region. “There’s a real drive from governments to offer the best for their patient populations. That’s quite exciting, from patient and a partnership perspective,” she said.

“That is stronger here, and there’s a real drive to be first. That gives us an opportunity.”

https://www.marketscreener.com/GLAXOSMITHKLINE-9590199/news/GlaxoSmithKline-targets-2020-for-planned-UAE-facility-27198368/

Novartis to streamline production in response to lower U.S. prices

Switzerland’s Novartis (NOVN.S) plans to streamline its worldwide production to increase its operating profit margin despite falling prices for its drugs in the United States, its chairman was reported as saying.

Proceeds from the sale of drugs in its key U.S. market declined between 1 and 2 percent last year, Joerg Reinhardt told Swiss weekly NZZ am Sonntag. This was due to discounts pharmaceutical companies have to grant large buyers to sell their drugs in the Unites States, he said in an interview that will be published on Sunday.

Drugmakers can still charge slightly higher or stable prices in Europe, according to Reinhardt.

To increase the operating profit margin of its pharmaceutical business to around 35 percent from the current 32 percent within five years as planned, the group aims to increase its efficiency, the paper said.

“Overcapacities have accumulated in the area of production over the past years,” Reinhardt told the paper in an interview to be published on Sunday. “We are working on a global optimization.”

https://finance.yahoo.com/news/novartis-streamline-production-response-lower-190810283.html

1 DCF For Universal Health Services Implies It’s 34% Undervalued

How far off is Universal Health Services Inc (NYSE:UHS) from its intrinsic value? Using the most recent financial data, I am going to take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to today’s value. I will use the Discounted Cash Flows (DCF) model. Don’t get put off by the jargon, the math behind it is actually quite straightforward. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. Please also note that this article was written in August 2018 so be sure check out the updated calculation by following the link below.

View our latest analysis for Universal Health Services

Crunching the numbers

I’m using the 2-stage growth model, which simply means we take in account two stages of company’s growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have perpetual stable growth rate. In the first stage we need to estimate the cash flows to the business over the next five years. For this I used the consensus of the analysts covering the stock, as you can see below. I then discount this to its value today and sum up the total to get the present value of these cash flows.

5-year cash flow forecast

	2019	2020	2021	2022	2023
Levered FCF ($, Millions)	$839.47	$920.50	$997.48	$1.08k	$1.17k
Source	Analyst x3	Analyst x2	Est @ 8.36%	Est @ 8.36%	Est @ 8.36%
Present Value Discounted @ 8.59%	$773.06	$780.63	$779.00	$777.37	$775.75

Present Value of 5-year Cash Flow (PVCF)= US$3.89b

We now need to calculate the Terminal Value, which accounts for all the future cash flows after the five years. For a number of reasons a very conservative growth rate is used that cannot exceed that of the GDP. In this case I have used the 10-year government bond rate (2.9%). In the same way as with the 5-year ‘growth’ period, we discount this to today’s value at a cost of equity of 8.6%.

Terminal Value (TV) = FCF₂₀₂₂ × (1 + g) ÷ (r – g) = US$1.17b × (1 + 2.9%) ÷ (8.6% – 2.9%) = US$21.38b

Present Value of Terminal Value (PVTV) = TV / (1 + r)⁵ = US$21.38b ÷ ( 1 + 8.6%)⁵ = US$14.16b

The total value is the sum of cash flows for the next five years and the discounted terminal value, which results in the Total Equity Value, which in this case is US$18.05b. The last step is to then divide the equity value by the number of shares outstanding. If the stock is an depositary receipt (represents a specified number of shares in a foreign corporation) then we use the equivalent number. This results in an intrinsic value of $193.32. Compared to the current share price of $127.42, the stock is quite good value at a 34.1% discount to what it is available for right now.

NYSE:UHS Intrinsic Value Export August 29th 18

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The assumptions

Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don’t agree with my result, have a go at the calculation yourself and play with the assumptions. Because we are looking at Universal Health Services as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighed average cost of capital, WACC) which accounts for debt. In this calculation I’ve used 8.6%, which is based on a levered beta of 0.800. This is derived from the Bottom-Up Beta method based on comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.

Next Steps:

Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. What is the reason for the share price to differ from the intrinsic value? For UHS, I’ve put together three essential factors you should further research:

1. Financial Health: Does UHS have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Future Earnings: How does UHS’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of UHS? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!

PS. Simply Wall St does a DCF calculation for every US stock every 6 hours, so if you want to find the intrinsic value of any other stock just search here.

https://finance.yahoo.com/news/intrinsic-calculation-universal-health-services-190824415.html

A year after call for ouster, Community Health CEO still at helm

Scorecard checks back on our headlines from a year ago.

Then: In a letter to John Fry, Community Health Systems Inc.’s board chairman of the nominating and corporate governance committee, activist investor ASL Strategic Value Fund called for CEO Wayne Smith to be ousted from the company, saying management missteps had “resulted in billions of dollars of shareholder losses.” The letter came after years of significant struggles by CHS, primarily caused by its massive 2014 acquisition of Florida-based Health Management Associates. The company’s stock price was trading below $8 at the time, down more than 80 percent from two years earlier.

Now: Smith remains CEO of the embattled company and received a vote of confidence from CHS’ top investor, Chinese investment firm Shanda Group, in January. The firm purchased almost 1.5 million shares of CHS stock, increasing its stake in the company to 24 percent. CHS has sold about 40 hospitals since the HMA deal and refinanced billions of debt — but it hasn’t helped the company’s stock price. Shares of the Franklin-based company closed at $2.69 on July 16, the lowest since its second initial public offering in 2000. Emails and phone calls to ASL were not returned.

Next: In its second-quarter earnings report, CHS reported a loss of $110 million for the quarter, compared with $137 million during the same period last year. On a per-share basis, adjusted for gains and losses from operations, the loss represented 1 cent per share, beating analysts’ expectations of a loss of 43 cents per share. Smith said his team’s strategies are beginning to pay off, and while the company will continue to try and improve its portfolio, the company feels “comfortable” in the markets it’s in.

“We have a substantial number of markets now that are showing outstanding performance,” Smith said on a call with investors. “We still have opportunity left, but we’re seeing good performance.”

https://www.bizjournals.com/nashville/news/2018/08/30/scorecard-chs-investor-calls-for-wayne-smiths.html?ana=yahoo&yptr=yahoo