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Covid ‘Testing Hell’: Devices Given to Nursing Homes Bring New Problems

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After months of enduring a dearth of protective medical gear and staggering death tolls from the coronavirus pandemic, nursing home operators and employees across the United States experienced something close to elation as rapid-result test machines paid for by the federal government began arriving last month at 14,000 residential facilities that serve the elderly.

The hand-held testing devices, which spit out results in as little as 15 minutes, were intended to quickly diagnose and isolate patients, and alter the deadly calculus of a contagion that has taken the lives of 77,000 nursing home residents and workers, more than 40 percent of the nation’s fatalities from Covid-19.

But the initial sense of relief has been overtaken by frustration as nursing homes have discovered that they must pay for test kits on their own, and that the machines are markedly less accurate than lab-based diagnostics.

Because the devices come with a modest starter-set of test supplies that only last a few weeks, facilities, many of them buffeted by financial losses from the pandemic, must pay roughly $32 for each additional test. In communities with high rates of infection, a typical nursing home can churn through hundreds of tests a week.

Many nursing home operators also say they have been overwhelmed by new federal reporting rules, fines and financial incentives that are associated with the program.

“My initial happiness over the machines has quickly turned to disillusionment,” said Ben Unkle, the chief executive of Westminster-Canterbury on Chesapeake Bay, which operates a skilled nursing center in coastal Virginia. “At the moment we’re in testing hell.”

The machine his company received, made by the medical device manufacturer BD, came with 300 tests but the new rules require Westminster-Canterbury to conduct weekly tests on its 280 nursing employees and residents. BD has said it would be weeks before they could send out additional testing supplies.

The shortages have forced Mr. Unkle to rely on an outside lab that charges $100 a test, an expense that he estimates will add $875,000 to the $1 million in pandemic-related losses that the nonprofit provider expects this year. Rather than the 15-minute turnaround, the lab results take up to four days to arrive, complicating efforts at infection control.

“As far as I’m concerned, this is an unfunded mandate that is not giving us the data we need fast enough to improve either care or protection,” Mr. Unkle said.

ImageThe test developed by BD at Westminster Canterbury. The company has said it would be weeks before it could send out additional kits.
Credit…Julia Rendleman for The New York Times

Federal health officials acknowledged problems with the testing initiative, and they have asked for patience as they carry out a herculean effort to provide nursing homes with the diagnostic tools needed to identify infections among their employees and residents and to tamp down outbreaks.

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The Centers for Medicare and Medicaid Services, which oversees the nation’s nursing homes, said the agency would exercise discretion before imposing fines on facilities that make a good-faith effort to meet federal testing mandates.

“We understand that some facilities may experience challenges to meet the new requirements,” the agency said in a statement.

The importance of frequent testing is expected to become more critical following a recent decision by C.M.S. to lift restrictions on nursing home visitors.

On Tuesday, President Trump announced a plan to supply nursing homes with 18 million rapid test kits manufactured by the medical device company Abbott. The tests do not require a separate reader, but some experts have voiced concern over their accuracy, and a typical nursing home testing its employees twice weekly would likely run through those supplies in a few weeks.

Even as they expressed appreciation for the free machines, which cost about $300, many nursing home operators said they are overwhelmed by the financial and bureaucratic demands of the testing program, which include up $10,000 in fines for facilities that fail to meet daily reporting rules that sometimes conflict with those from state or local heath agencies. Health departments in some states said they were still trying to figure out how to gather what they described as a tidal wave of new testing data.

“There’s no mechanism in place for reporting,” said Kim Schilling, the vice president of health services at Friendship Haven, which runs a nursing home in rural Iowa. “We were on the phone yesterday trying to figure this out with the department of public health and it was very overwhelming for them too.”

Katie Smith Sloan, the president of LeadingAge, an association of nonprofit providers of aging services, said the Trump administration’s focus on fines and stringent reporting requirements were the wrong approach to addressing a crisis that was aggravated by federal inaction in the early months of the pandemic.

“For seven months, nursing homes have been saving and protecting lives while dealing with staffing shortages, testing and personal protective equipment challenges and growing unexpected costs,” she said.

David Grabowski, a health care policy expert at Harvard Medical School, described the federal rapid-test program as “a positive step but late in the game,” and said Washington should do more to address the systemic financial and staffing problems that have long bedeviled the industry’s efforts to shield vulnerable residents from infectious pathogens. Because federal reimbursements do not cover the full cost of care in much of the country, nursing home operators who serve predominantly Medicaid patients say they often lack the money to hire enough skilled workers willing to take on a grueling job that the pandemic has made increasingly stressful and fraught with risk.

“I don’t have a problem penalizing nursing homes guilty of gross negligence, but my sense is that most of the facilities out there have been doing their best despite dealing with sick workers, a lack of resources and poor guidance from the federal government,” Mr. Grabowski said. “Putting efforts into training workers on infection control, boosting wages and offering paid sick leave would be a better approach.”

The new testing requirements are governed by a complex set of guidelines from the Centers for Disease Control and Prevention that are pegged to the positivity rate of tests for coronavirus infections in the county where facilities are situated. When community positivity rates surpass 10 percent, nursing homes must test their residents and personnel twice a week. The testing requirements drop to once a week when the community positivity rate is between five and 10 percent, and once a month when it is below 5 percent.

As of Sept. 13, more than 3,100 counties across the country reported positivity rates greater than 5 percent, according to CMS data.

Credit…Julia Rendleman for The New York Times

With its community positivity rate above 13 percent, employees at Morningside Manor, a nonprofit nursing home in San Antonio, Texas, quickly burned through the 90 tests kits that arrived earlier this month with their new BD Veritor. Patrick Crump, the nursing home’s chief executive, said that twice-weekly testing of 140 residents and staff required two employees and an outside consultant, an effort that takes more than four hours.

Until more test kits become available, this facility, too, is paying an outside lab a $100 per test, further straining resources at a time when nursing home admissions have been essentially frozen by the pandemic.

“The demands, the stress and the burden on our staff right now are just huge,” Mr. Crump said. “It’s just not sustainable and if we’re going to do our job and take care of our folks, we’re going to need more help.”

Then there is the issue of accuracy. The BD Veritor has a false negativity rate of 15 percent but in recent weeks a small number of nursing homes have reported false positives from it too.

Troy Kirkpatrick, a spokesman for BD, which provided 11,000 of the rapid-result devices to nursing homes, said the company was looking into the matter. Quidel Corp., which is supplying the remaining machines, has not disclosed whether it has received reports of false positives.

Concerns over accuracy, the test kit shortages and the high cost of fresh supplies have prompted some providers to set aside their newly arrived machines, at least for now.

St. John’s United, which received a BD Veritor for its 186-bed nursing home in Billings, Mont., is instead planning to use a state lab for weekly surveillance testing. The tests are free, but the results can take as long as five days. “You can’t make meaningful decisions when results are so delayed,” said David Trost, the president of St. John’s United.

He estimates that test kits for the BD Veritor would cost $19,000 a week for twice-a-week surveillance at the nursing home — money he said would be better spent on an in-house lab that the nonprofit is building for the half-dozen facilities it operates for older adults.

Mr. Trost said that nursing home providers have felt whiplash from new fines and federal rules that land every few days, and it often seems like the government is seeking to blame providers for soaring infections in surrounding communities that often refuse to adopt basic measures like wearing masks.

“When you are forced to do something with absolutely no way to respond, that is oppression,” he said. “Federal agencies were late to provide attention to long-term care even though the pandemic started in a nursing home, and now they’re trying to shift the blame to us for future deaths.”

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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