Author Archives: henrykotula

Pharmacy chains rapidly expand into primary care

Posted on by • Posted in CVS Health, Medicare Advantage, Pharmaceutical Industry, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Retail Clinic, Retail Healthcare, Retail Pharmacy, Walgreens, Walmart • Leave a comment

https://mailchi.mp/cfd0577540a3/the-weekly-gist-november-11-2022?e=d1e747d2d8

Retailers and insurers are building out their primary care strategies in a bid to become the new front door for patients seeking healthcare services, especially seniors on highly profitable Medicare Advantage (MA) plans. In the graphic above, we examine the capabilities of three of the largest pharmacy chains—CVS Health, Walgreens, and Walmart—to deliver full-service primary care across in-person and virtual settings.

CVS pioneered the pivot to care provision in 2006 with its acquisition of MinuteClinic, which now has over 1,000 locations. The company has further expanded its concept of pairing retail and pharmacy services with primary care by opening over 100 HealthHUBs, which provide an expanded slate of care services. However, CVS lags competitors in the rollout of full-service primary care practices, with its proposed physician-led Super Clinics still stuck in the planning stages.

Walgreens, with its majority stake in VillageMD (on track for 200 co-branded practices by the end of the year) and the recent acquisition of Summit Health (which operates another 370 primary and urgent care clinics) has assembled the most impressive primary care footprint of the three companies. 

Walmart, the largest by number of stores but also the newest to healthcare, has opened more than 25 Walmart Health Centers, a step up from earlier experimentation with in-store care clinics, offering more services and partnering with Epic Systems to integrate electronic health records. 

CVS’s key advantage over its competitors comes from its payer business, having acquired Aetna in 2018, now the fourth-largest MA payer by membership. Walgreens and Walmart have both aligned themselves with UnitedHealth Group (UHG) to participate in MA, with Walmart having struck a ten-year partnership to steer UHG MA beneficiaries to Walmart Health Centers in Florida and Georgia. 

While aligning with UHG expands the reach of these retail giants into MA risk, UHG, whose OptumHealth division is by far the largest employer of physicians nationwide, remains the healthcare juggernaut most poised to unseat incumbent providers as the home for consumers’ healthcare needs.

Agents and brokers for Medicare Advantage plans using deceptive marketing tactics

Posted on by • Posted in Abuse, Center for Medicare and Medicaid Services (CMS), Deceptive Advertising, Health Insurance Benefit Design, Health Insurance Industry, Marketing, Medicare Advantage • Leave a comment

https://mailchi.mp/cfd0577540a3/the-weekly-gist-november-11-2022?e=d1e747d2d8

 In their latest article scrutinizing the MA program, New York Times reporters Reed Abelson and Margot Sanger-Katz highlight MA marketing practices brought to light in a recent report from the Senate Finance Committee. Complaints to the Centers for Medicare and Medicaid Services (CMS) about MA marketing more than doubled from 2020 to 2021, as agents and brokers took advantage of oversight rules relaxed during the Trump administration. Some of the most egregious alleged abuses include agents switching seniors into new plans without their consent and exploiting individuals with cognitive impairments.

The Gist: Media interest is finally catching up to the building legislative and regulatory pressure on Medicare Advantage. While earlier reporting has highlighted how plans can inflate payments from Medicare, this new story shows how the process of selecting a plan can be fraught for the seniors enrolled. 

Plan design is confusing even for industry insiders, so it is no surprise that seniors might find themselves ‘choosing’ plans that omit key providers, or even drug coverage they already rely on, particularly after being badgered or misled by agents and brokers.

Many of the regulatory fixes highlighted in the report can be implemented directly by CMS, but insurers, who remember the managed care backlash of the 90s, shouldn’t wait to tighten the reins on questionable marketing practices, lest they risk losing public support for one of their most lucrative business lines.

Oscar Health pulls out of major Medicare Advantage (MA) markets

Posted on by • Posted in Disruption, Disruptive Technology, Health Insurance Industry, Market Power, Market Share, Market Trends, Medicaid Expansion, Medical Loss Ratio (MLR) • Leave a comment

https://mailchi.mp/cfd0577540a3/the-weekly-gist-november-11-2022?e=d1e747d2d8

In its Q3 earnings call, Oscar Health CEO Mario Schlosser revealed that the “insurtech” has pulled out of the MA market in Texas and New York, leaving it with only one Florida-based plan. Oscar entered the MA business with high hopes in 2020, but counted fewer than 5K MA members in Q3 2022.

Although its Affordable Care Act exchange enrollment has nearly doubled since last year, now covering more than 1M lives, Oscar is still struggling with high medical loss ratios, which have kept it from turning a profit. The company’s stock price is at an all-time low, having declined over 90 percent from its peak, shortly after its 2021 IPO.

The Gist: Like Bright HealthCare before them, Oscar pulling out of MA is another sign that the chance of meaningful disruption from “insurtechs” has nearly vanished. While still privately held, Oscar achieved fame in the early 2010s through catchy marketing that targeted a young, tech-savvy client base, and its move into MA before the pandemic signaled broader ambitions.

Oscar’s travails illustrate just how hard it is to start an insurance company from scratch, even with an intriguing and comprehensive technology platform. The company proved unable to overcome its lack of market power in negotiations with providers, and faced difficulty managing a small, unstable risk pool. 

Now that more traditional insurers are improving their mobile tech interfaces and telehealth offerings, the differentiated value Oscar offers to its members has clearly diminished.

Residents at New York City hospitals seek union recognition

Posted on by • Posted in Labor Activism, Labor Organizing, Labor Union, Physician, Physician's Labor Union, Resident • Leave a comment

https://mailchi.mp/cfd0577540a3/the-weekly-gist-november-11-2022?e=d1e747d2d8

 Last week, over 1,200 resident physicians and interns at Montefiore Medical Center, one of the largest employers in New York City, with four hospitals in the Bronx, held an organizing vote and requested voluntary recognition of their bargaining unit. The residents organized under the Committee of Interns and Residents, a unit of the Service Employees International Union that claims 22K members and has established unions at five hospitals this year. Roughly seven percent of practicing doctors were unionized as of 2019; that number has grown in the wake of pandemic-induced burnout and industry consolidation. Montefiore Medical Center declined to voluntarily recognize the union and has requested that the union re-form via a secret ballot election.

The Gist: Health system executives may see the possibility of resident unions as another headache amid the ongoing labor crisis, but the drivers of the crisis—burnout, workplace safety concerns, work-life balance, and real-wage erosion—are responsible for the growing appeal of unions for physicians. Fueled by economy-wide stressors, unionization has been growing in nontraditional labor sectors, including among baristas and tech workers, and medical residents may be the next to join that wave.

Health systems worried about resident unionization should address residents’ concerns about working conditions proactively, which may involve reevaluating wages in light of residents’ significant contributions to operational and financial success.  

Congressional control still undecided, but voters protect and expand state-level healthcare access in midterms

Posted on by • Posted in ACA, Election, Health Insurance Coverage Adequacy, Health Policy, Healthcare Reform, Medicaid Expansion, Reproductive Rights, Roe v. Wade, Underinsured, Uninsured • Leave a comment

https://mailchi.mp/cfd0577540a3/the-weekly-gist-november-11-2022?e=d1e747d2d8

While the final balance of the House and Senate are still unknown after Tuesday’s midterm elections, both chambers are expected to be narrowly divided. 

Ballot initiatives on reproductive health produced more unambiguous results, with three states—California, Michigan, and Vermont—amending their constitutions to affirm reproductive rights, and two states—Kentucky and Montana—voting down proposals that would have imposed greater legal barriers to abortion access. South Dakota became the seventh, and likely final, state to expand Medicaid via ballot initiative, making an additional 28K South Dakotans eligible for coverage, and reducing the number of states that have yet to expand Medicaid to 11.

The Gist: Democrats beat expectations, bucking historical trends in which midterm voters swing strongly against the President’s party. But healthcare did not feature prominently in voters’ choices, with this being the first election in over a decade where the state of the Affordable Care Act and protecting individuals’ access to care and coverage was not a significant choice driver. 

The fallout from the Supreme Court’s decision in June to overturn Roe v. Wade had a clear impact on voter turnout, with abortion tying inflation for voters’ top concern in exit polls. At the state level, South Dakota voters approved Medicaid expansion, where over 40 percent of the state’s uninsured adults could now gain access to coverage—another clear sign that voters, regardless of party affiliation, are behind the ACA’s expanded vision for the safety net program. 

Moving forward, a closely divided Congress is unlikely to take on significant healthcare legislation, regardless of who ultimately holds the House and Senate.

Big payers ranked by Q3 profits

Posted on by • Posted in Credit Quality, Credit Ratings, Financial Performance, Financial Reporting, Financial Stewardship, Financial Strength, Financial Viability, Health Insurance Industry, Net Income • Leave a comment
https://www.beckerspayer.com/payer/big-payers-ranked-by-q3-profits.html?utm_medium=email&utm_content=newsletter

The nation’s largest payers have filed their third-quarter earnings reports, revealing which grew their profits the most year over year.

1. UnitedHealth Group: $5.3 billion
The company’s third quarter earnings increased over 28 percent year over year. Total net earnings in 2022 are $15.7 billion, an increase of 16.2 percent from $13.5 billion in 2021.

2. Cigna: $2.8 billion
The company’s third quarter earnings increased over 70 percent year over year. Total net earnings in 2022 are $5.5 billion, an increase of over 29 percent from $4.2 billion in 2021.

3. Elevance Health: $1.6 billion
The company’s third quarter earnings increased over 7 percent year over year. Total net earnings in 2022 are $5.06 billion, an increase of nearly 2 percent from $5 billion in 2021.

4. Humana: $1.2 billion
The company’s third quarter earnings decreased over 21 percent year over year. Total net earnings in 2022 are $2.8 billion, a decrease of over 4 percent from $2.9 billion in 2021.

5. Centene: $738 million
The company’s third quarter earnings increased over 26 percent year over year. Total net earnings in 2022 are $1.4 billion, an increase of over 89 percent from $748 million in 2021.

6. CVS Health: $3.4 billion losses
The company’s third quarter losses are attributable to an opioid legal settlement. Total net earnings in 2022 are $1.9 billion, a decrease of over 71 percent from $6.6 billion in 2021.

10 health systems with strong finances

Posted on by • Posted in Credit Quality, Credit Ratings, Financial Performance, Financial Reporting, Financial Stewardship, Financial Strength, Health System, Hospital, Hospital Industry, Net Income, Nonoperating Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue • Leave a comment
https://www.beckershospitalreview.com/finance/10-health-systems-with-strong-finances-3.html?utm_medium=email&utm_content=newsletter

Here are 10 health systems with strong operational metrics and solid financial positions, according to reports from Fitch Ratings and Moody’s Investors Service.

1. Advocate Aurora Health has an “AA” rating and a stable outlook with Fitch. The health system, dually headquartered in Milwaukee and Downers Grove, Ill., has a strong financial profile and a leading market position over a broad service area in Illinois and Wisconsin, Fitch said. The health system’s fundamental operating platform is strong, the credit rating agency said. 

2. Allina Health System has an “AA-” rating and a stable outlook with Fitch. The Minneapolis-based system is the inpatient market share leader in a highly competitive market and has a strong relation with payers in the market, Fitch said. Alliana’s financial profile is strong, the ratings agency said. 

3. Banner Health has an “AA-” rating and stable outlook with Fitch. The Phoenix-based health system’s core hospital delivery system and growth of its insurance division combine to make it a successful, highly integrated delivery system, Fitch said. The credit rating agency said it expects Banner to maintain operating EBITDA margins of about 8 percent on an annual basis, reflecting the growing revenues from the system’s insurance division and large employed physician base.

4. Bon Secours Mercy Health has an “AA-” rating and stable outlook with Fitch. The Cincinnati-based health system has a broad geographic footprint as one of the five largest Catholic health systems in the U.S., a good payer mix and a leading or near-leading market share in eight of its eleven markets in the U.S., Fitch said.

5. Bryan Health has an “AA-” rating and stable outlook with Fitch. The Lincoln, Neb.-based health system has a leading and growing market position, very strong cash flow and a strong financial position, Fitch said. The credit rating agency said Bryan Health has been resilient through the COVID-19 pandemic and is well-positioned to accommodate additional strategic investments. 

6. Deaconess Health System has an “AA” rating and stable outlook with Fitch. The Evansville, Ind.-based system has a leading market position in its primary service area and a favorable payer mix, Fitch said. The ratings agency said it expects Deaconess’ operating EBITDA margins to improve and stabilize around 10 percent by 2023, reflecting strong volumes and focus on operating efficiencies.

7. Gundersen Health System has an “AA-” rating and stable outlook with Fitch. The La Crosse, Wis.-based health system has strong balance sheet metrics, a leading market position and an expanding operating platform in its service area, Fitch said. The credit rating agency expects the health system to return to strong operating performance as it emerges from disruption related to the COVID-19 pandemic. 

8. Hackensack Meridian Health has an “AA-” rating and stable outlook with Fitch. The Edison, N.J.-based health system has shown consistent year-over-year increases in market share and has a solid liquidity position, Fitch said. 

9. Intermountain Healthcare has an “Aa1” rating and stable outlook with Moody’s. The Salt Lake City-based health system has exceptional credit quality, which will continue to benefit from its leading market position in Utah, Moody’s said. The credit rating agency said the health system’s merger with Broomfield, Colo.-based SCL Health will also give Intermountain greater geographic reach.

10. Yale New Haven (Conn.) Health has an “AA-” rating and stable outlook with Fitch. The health system’s turnaround efforts, brand recognition and market presence will help it return to strong operating results, Fitch said. 

Pennsylvania hospital group to stop accepting Aetna insurance next year

Posted on by • Posted in Health Insurance Industry, Health System, Hospital, Hospital Industry, Payor Contracting • Leave a comment
https://www.beckershospitalreview.com/finance/pennsylvania-hospital-group-to-stop-accepting-aetna-insurance-next-year.html?utm_medium=email&utm_content=newsletter

Allentown, Pa.-based Lehigh Valley Health Network, which operates 13 hospitals and numerous care sites in Eastern Pennsylvania, will largely stop accepting Aetna insurance in 2023, Morning Call reported Nov. 10.

The move will be effective from March 13, LVHN said in a letter to employees. It comes after years of Aetna refusing to pay for care or delaying care for patients, the health group claimed.

LVHN, which has contracted with Aetna for 20 years, has been in dispute with the insurance company before, the report said. Back in 2000, the hospital group threatened to cut ties with Aetna over a dispute over care reimbursements. 

Some Aetna coverage will remain for emergency care or for serious treatments such as cancer care, according to the letter.

LVHN declined to comment to Morning Call, and Aetna could not be reached, the report said.

More details on the story, which comes at a time when people are enrolling in new healthcare plans, can be found here.

Inflation cools more than expected in October

Posted on by • Posted in Consumer Price Index (CPI), Dept of Labor, Economic Indicators, Economy, Federal Reserve, Inflation, Interest Rates • Leave a comment
https://www.axios.com/2022/11/10/cpi-inflation-october?stream=top&utm_source=alert&utm_medium=email&utm_campaign=alerts_all

The Consumer Price Index cooled more than expected in October: it rose 7.7% from a year earlier, down from 8.2% the prior month, the Labor Department said on Thursday.

Why it matters: Inflation still remains painfully high, but a bigger-than-expected easing in price pressures for items like used cars and apparel helped pull the overall index down.

By the numbers: On a monthly basis, CPI rose 0.4%, the same pace as September.

  • Core CPI, a closely watched gauge that strips out volatile food and energy costs, eased in October. On a monthly basis, it rose 0.3% — up 6.3% from a year ago.
  • In September, those figures were 0.6% and 6.6%, respectively.

Catch up quick: Soaring costs have eroded many Americans’ wage gains, souring their view on the economy that has otherwise held up.

  • Supply chain problems have led to shortages of vehicles and other consumer goods, which pushed up prices. Russia’s invasion of Ukraine has created a volatile backdrop for energy costs.
  • Those supply chain pressures have eased and consumers have dialed back demand for goods, pushing prices down. But costs for services have raced ahead.

Where it stands: The Fed has raced to try to get inflation under control, raising interest rates at a historic clip.

  • In recent months, inflation data has surprised to the upside. That’s kept officials on an aggressive path to slow the economy down, with the hope inflation will follow suit. Those moves have risked throwing the economy into a recession.