Author Archives: henrykotula

On same day of hospital concentration study, AMA says payers are the ones with less competition

Posted on by • Posted in Antitrust, Health Insurance Industry, Health Plan, Health Policy, High Deductible Health Plans, High Premiums, High Prices, Market Consolidation, Market Power, Out of Network, Out of Pocket Expenses, Out-of-Network • Leave a comment

https://www.beckershospitalreview.com/payer-issues/on-same-day-of-hospital-concentration-study-ama-says-payers-are-the-ones-with-less-competition.html?oly_enc_id=2893H2397267F7G

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In 2018, 75 percent of commercial health insurance markets were highly concentrated, according to a study published by the American Medical Association.

For its study, AMA analyzed market concentration in 382 metropolitan areas across the nation. AMA estimated that 73 million Americans with commercial health plans live in highly concentrated markets and don’t have many health plans to choose from. 

“Americans in three-quarters of commercial health insurance markets have a limited number of health insurers from which to choose,” AMA President Patrice Harris, MD, said in a prepared statement. “In almost half of metropolitan areas, a single health insurer has 50 percent or more of the market, and patients are not benefiting from this degree of market power. While health insurers grow corporate profits, networks are too narrow, premiums are too high, and benefits are too watered down.”

The study was published the same day the Health Care Cost Institute published an analysis finding a growing number of metropolitan areas have highly concentrated hospital markets. HCCI found that by 2016, hospital markets in the majority (72 percent) of 112 metro areas the institute studied were highly concentrated. HCCI said this “reflects the fact that most metros became increasingly concentrated over time.”

Read the full AMA study here.

 

Federal Reserve announces 2nd consecutive rate cut

Posted on by • Posted in Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Hospital, Hospital Industry, Interest Rates, Key Performance Indicators, Leadership, Market Uncertainty, Non-Profit Healthcare Industry, Performance Management, Pharmaceutical Industry, Physician Practice Management, Population Health, Strategy • Leave a comment

https://www.axios.com/federal-reserve-rate-cut-77c504c1-1bed-4336-9c37-490a3452a54f.html?stream=top&utm_source=alert&utm_medium=email&utm_campaign=alerts_all

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The Federal Reserve cut interest rates by a quarter point on Wednesday, bringing the target range for the benchmark Fed Funds rate to 1.75%–2%.

Why it matters: The Fed’s 2nd consecutive rate cut reflects worries about the U.S. economy. The trade war and slowing growth around the world have made corporate executives more worried than they’ve been in years.

  • The move prompted a near-immediate response from President Trump, who called chair Powell a “terrible communicator.” The president has demanded in a series of tweets that the Fed cut interest rates more aggressively.

The big picture: Speaking at a press conference, Powell again cited the trade war as a key risk to the economic outlook. “Our business contacts around the country have been telling us that uncertainty about trade policy has discouraged them from investing in their businesses,” Powell said.

  • Still, new projections showed a division among Fed officials about whether more rate cuts are warranted this year.
  • Powell did note that if “the economy does turn down, then a more extensive sequence of rate cuts could be appropriate.”

Powell also acknowledged the liquidity shortfall in money markets that has forced the Fed to intervene — something that before this week hadn’t happened since the financial crisis.

  • In response to the drama in the short-term funding markets, Powell suggested that the Fed may increase the size of its balance sheet through “organic growth” earlier than expected.

 

 

 

 

Purdue Pharma, facing thousands of lawsuits and bankruptcy, wants to pay ‘certain employees’ $34 million in bonuses

Posted on by • Posted in Bankruptcy, Employee Bonus, Executive Bonus, Opioid Epidemic, Pharmaceutical Industry • Leave a comment

https://www.washingtonpost.com/nation/2019/09/19/purdue-pharma-facing-thousands-lawsuits-bankruptcy-wants-pay-certain-employees-million-bonuses/?fbclid=IwAR0r6Psj2gpALR0iJZAv4o8ZYLxPDv6UjGZKLvxMwVIlUF9kOcl1LY5sGlM

People enter the U.S. District Court in White Plains, N.Y., Tuesday, before a bankruptcy hearing for Purdue Pharma. The company is asking a bankruptcy judge to allow it to pay $34 million in bonuses to "certain employees."

Officials at troubled drugmaker Purdue Pharma say “certain employees” should be paid more than $34 million in bonuses for meeting and exceeding goals over the last three years, even though the company is facing thousands of lawsuits over its role in the nation’s opioid crisis and earlier this week filed for bankruptcy.

In a legal filing, attorneys for Purdue Pharma asked a judge to authorize millions in payments to employees who have met “target performance goals.”

It is not clear from the company filings why employees would be eligible for bonuses, because, while the bonuses are supposed to be partly contingent on the company’s financial performance, the company has filed for bankruptcy.

At a bankruptcy court hearing in White Plains, N.Y., on Tuesday, Paul K. Schwartzberg, an attorney for the U.S. Trustee, raised objections to some of the bonuses. While it is typical for companies in bankruptcy to try to pay employees as a firm seeks to regain its financial footing, the Purdue Pharma bonuses go “way beyond” what is typical, he said.

The company is widely blamed for fueling the opioid epidemic because of allegedly misleading sales tactics it used to push physicians to prescribe millions of doses of its OxyContin painkiller. It faces thousands of lawsuits from cities, states and others affected by the opioid crisis, which claimed more than 200,000 lives in the past two decades.

“That $34 million is owed to the victims of the opioid epidemic, and every last cent should be spent on addiction science, treatment and recovery,” Connecticut Attorney General William Tong said in a statement to The Washington Post. “Purdue and the Sacklers still don’t seem to comprehend the pain and suffering they have caused. While I am sympathetic to the workers at Purdue, many of whom live in my hometown and state and had nothing to do with the egregious actions of their employer, this not business as usual.”

The attorneys for Purdue Pharma did not specify which of its 700 employees would be eligible for the bonuses, except that the incentives would not be available to “insiders” or any top executives involved in the company’s “strategic decision-making.” But other senior managers, who are often offered such incentive plans, could be eligible for the bonuses.

The number of employees eligible for the bonuses and the amounts of their rewards are unknown. But if the $34 million in bonuses were distributed equally to each of the 700 employees, each would receive about $50,000.

Company attorneys say the incentives are needed to retain key employees as it seeks to transform itself into a public trust aimed at delivering addiction remedies. Since 2018, about a quarter of the company’s “top tier” employees have left, they said.

“These employees have highly coveted skills in the industry and the company is not an easy place to work right now,” Eli J. Vonnegut, an attorney representing Purdue Pharma, said at the bankruptcy hearing. It “would be very difficult to attract new talent were the company to lose its current employees. With all the negative publicity, many employees are concerned about the economic risks that they are taking by staying at Purdue.”

The employee bonuses are part of the company’s long-standing incentive programs, according to the company. It is asking the bankruptcy court’s permission to pay out $26.5 million under its “Annual Incentive Plan,” which covers one year of company and employee performance, and another $7.9 million under its long-term rewards plan, which covers the last three years.

Under both programs, the size of the bonuses would depend on employees’ work and the company’s performance.

The company filing described the bonuses as something that employees “have come to rely on as a part of their annual compensation.”

The company is also seeking $1.5 million a month to cover anticipated legal expenses of employees. More than 270 former employees already have been witnesses or defendants in pending litigation, the company said.

U.S. Bankruptcy Judge Robert D. Drain is expected to consider the bonuses in October.

“These people are highly compensated,” Schwartzberg said. “They can wait” until then.

 

 

 

Report: Climate changes costing U.S. billions in health spending

Posted on by • Posted in Climate Change, Environmental Protection Agency (EPA), Health Policy, Medicaid, Medicare, Public Good, Public Health, Public Safety • Leave a comment

https://www.fiercehealthcare.com/hospitals-health-systems/report-climate-changes-costing-u-s-billions-health-spending?mkt_tok=eyJpIjoiT1dJNE5tUTFZV0k1TVdRNCIsInQiOiJMakFtS1IzZmxaRDlQNUtjdFdMUHVYUFdBd1wvXC9EZFR3ekhHU3ZsYVNib2t3bTlEb0Z2bklLZndEZXFOTjZ1RVZ0bURYMXI5dGFNcW92SXFYV25HTVh4d01tNEY4YkVCUnBMamhpbllXSytVTW5ybGJ1OTh0UjJmVDRmSWJ6c1wveCJ9&mrkid=959610

From deaths and injuries caused by extreme heat and stronger storms to longer growing seasons linked to an increased risk of mosquito- and tick-borne illnesses and wildfires, the healthcare impacts of climate change are costing the U.S. billions, a new analysis found.

Case in point: An analysis of a single year—2012—by researchers at the Natural Resource Defense Council and the University of California, San Francisco (UCSF) estimated a total of 10 climate-sensitive events in the U.S. that ultimately cost $10 billion. 

That estimate stems from costs associated with 917 deaths, 20,568 hospitalizations and 17,857 emergency room visits, researchers said in the study published in the journal GeoHealth.

Among the costs connected to “climate-sensitive events” in 2012, researchers pointed to:

  • $252 million in Wisconsin: A heatwave led to several record temperatures were broken over the span of a week in July 2012. Researchers analyzed costs from an estimated 27 deaths, 155 hospitalizations and 1,620 emergency room visits that summer.
  • $1.6 billion in Colorado and $2.3 billion in Washington: Longer fire seasons in the western U.S. have resulted from higher temperatures and changes in seasonal rainfall patterns. Researchers examined costs from direct wildfire deaths and impacts attributed to wildfire smoke in 2012. There were 174 deaths, 256 hospitalizations and 1,432 emergency room visits in Colorado and 245 deaths, 371 hospitalizations and 1,897 emergency room visits in Washington.
  • $3.1 billion in New Jersey and New York: Hurricane Sandy caused severe flooding and power outages for more than 20 million customers. Sea level rise is believed to have amplified the storm surge. Researchers estimate there were 273 hurricane-related deaths, 6,602 hospitalizations and 4,673 emergency room visits.

Researchers said mortality costs were estimated using a mortality risk valuation implemented by the U.S. Environmental Protection Agency in regulatory impact analyses, with each life lost valued at $9.1 million in 2018 dollars. They also factored direct morbidity costs for each event using hospital admissions and emergency department visits from the federal Healthcare Cost and Utilization Project data well as costs associated with outpatient visits, home health care costs and prescribed drugs from the federal Medical Expenditure Panel Survey.

They acknowledged several limitations of the study. For instance, they said, “despite record-setting weather conditions across the U.S. in 2012, our analysis was restricted to case studies for which there was adequate documentation of health impacts,” they said.

They only included mental health impacts from Hurricane Sandy despite evidence that other events like wildfires can also adversely impact mental health. They also said extreme heat and Lyme disease are routinely underreported health effects that could result in conservative estimates.

“As such, the $10 billion total we calculated is likely a conservative estimate of health-related costs for these studies,” researchers said in this study.

Still, these costs are not just theoretical, but tangible costs that should be factored into the policy conversation, said Wendy Max, co-director of the Institute for Health & Aging at UCSF.

“We wanted to look at who bears this cost and we found two-thirds of the cost are borne by the Medicaid and Medicare programs,” Max said. “In an era of concern about healthcare costs, this is an important message: Climate change is adding to the public healthcare cost burden. That’s a message we’re hoping will resonate with policymakers.”

 

 

 

Report: 3 in 4 hospital markets are now ‘highly concentrated’

Posted on by • Posted in American Hospital Association (AHA), Antitrust, Harvard Global Health Institute, Health Policy, Health System, Herfindahl-Hirschman Index, High Deductible Health Plans, High Premiums, High Prices, Hospital, Hospital Industry, Market Consolidation, Market Power, Out of Pocket Expenses, Out-of-Network, Robert Wood Johnson Foundation, The Urban Institute • Leave a comment

https://www.fiercehealthcare.com/hospitals-health-systems/report-three-four-hospital-markets-are-now-highly-concentrated?mkt_tok=eyJpIjoiT1dJNE5tUTFZV0k1TVdRNCIsInQiOiJMakFtS1IzZmxaRDlQNUtjdFdMUHVYUFdBd1wvXC9EZFR3ekhHU3ZsYVNib2t3bTlEb0Z2bklLZndEZXFOTjZ1RVZ0bURYMXI5dGFNcW92SXFYV25HTVh4d01tNEY4YkVCUnBMamhpbllXSytVTW5ybGJ1OTh0UjJmVDRmSWJ6c1wveCJ9&mrkid=959610

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Nearly 3 in 4 hospital markets around the U.S. are “highly concentrated,” according to a new Healthy Marketplace Index report by the Health Care Cost Institute (HCCI).

Researchers examined more than 4 million commercial inpatient hospital claims between 2012 and 2016 and found 81 out of 112 (72%) were considered “highly concentrated” using the Department of Justice’s Herfindahl-Hirschman Index (HHI). That’s up from 67% in 2012. 

“Increasingly concentrated hospital markets have been linked to the rising cost of hospital care by nearly every expert in the field,” said Niall Brennan, president and CEO of HCCI, in a statement.

Funded by the Robert Wood Johnson Foundation, the report found:

  • 69% of markets studied experienced an increase in concentration.
  • Metro areas with smaller populations tended to have higher concentration levels. For instance, Springfield, Missouri; Peoria, Illinois; Cape Coral, Florida; and both Durham and Greensboro, North Carolina, had the most concentrated markets in the U.S.
  • Larger metropolitan areas including New York City, Philadelphia and Chicago had the lowest levels of concentration.
  • Some of the less concentrated metros in 2012 like Trenton, New Jersey, experienced larger increases in concentration over time.

“Our findings add to the growing consensus that most localities have highly concentrated hospital markets, and this is becoming increasingly true over time,” Bill Johnson, Ph.D., a senior researcher at HCCI and an author of the report, said in a statement. “The increased concentration we observed can be driven by many factors such as hospital closures, mergers, and acquisitions, changes in hospital capacity, patient preference, or changes in patients’ insurance networks.”

Previous, HCCI reports found inpatient hospital prices were rising in nearly every metro area studied. This new study found a positive relationship—but not a causal relationship—between price increases and increases in hospital market concentration. Those findings align with similar findings correlating consolidation with rising healthcare prices including from the Harvard Global Health Institute and the Robert Wood Johnson Foundation and The Urban Institute.

However, the American Hospital Association recently released its defense of consolidation in a report that argues mergers can improve costs by increasing scale, improving care coordination, reducing capital costs and improving clinical standardization.