Medicare Can Cover Anti-Obesity Drugs for Heart Disease — But at What Cost?

Posted on April 9, 2024 by henrykotula • Posted in Cardiovascular Disease, Chronic Diseases, Congressional Budget Office (CBO), Food and Drug Administration (FDA), Health Equity, Health Policy, Medicare Part D, Obesity, Obesity Treatment, Public Health, Wegovy, Weight Loss Drugs • Leave a comment

https://www.medpagetoday.com/opinion/the-health-docket/109555?xid=nl_secondopinion_2024-04-09&eun=g885344d0r

On March 8, 2024, FDA approved Wegovy (semaglutide)opens in a new tab or window to treat cardiovascular disease risks — heart attack, stroke, and death — for obese or overweight adults with a history of cardiovascular disease, making it the first anti-obesity medication (AOM) to obtain such approval. Studies showopens in a new tab or window that semaglutide reduces heart disease risks when accompanied by blood pressure and cholesterol management and healthy lifestyle counseling. FDA noted that this approval is “a major advance in public health.”

Less than 2 weeks after FDA approved the new indication (semaglutide is also approved for chronic weight management and type 2 diabetes), CMS issued a memorandumopens in a new tab or window stating that Medicare Part D plans may cover AOMs if they are FDA approved for an additional medically accepted indication beyond only weight management. CMS’ guidance is prospective and is not limited to semaglutide. The guidance applies to all AOMs that may be approved in the future to treat other conditions. To ensure that AOMs are used for medically accepted indications, CMS clarified that Part D sponsors may employ common utilization management tools like step therapy and prior authorization.

Notably, FDA’s approval of semaglutide for cardiovascular disease is likely a harbinger of similar approvals in the near future — along with their coverage by Medicare. While the benefits are substantial, so too may be the costs as more and more drugs and patients receive coverage.

Obesity and Public Health

Obesity is a pressing public health crisis that requires robust, multidimensional solutions, including medical interventionsopens in a new tab or window. The CDC considers obesity an epidemicopens in a new tab or window, and in 2013, the American Medical Association recognized obesity as a diseaseopens in a new tab or window. Although there isn’t consensus in the scientific community as to whether obesity is a disease, one thing is clear: medical interventions (including AOMs) are key to addressing obesity, along with other public health measures.

Obesity prevalence in the U.S. is 41.9%opens in a new tab or window, with rates higher for Black and Hispanic adults — the very populations that face the greatest socioeconomic barriersopens in a new tab or window to accessing healthcare and medications. While AOMs offer a significant public health benefit, ensuring equitable and affordable access is vital.

Economic Implications

Analyses have foundopens in a new tab or window extraordinarily high prices for Wegovy , with a list price up to $1,349 and a net price (received by the manufacturer) of $701 for a 4-week supply. It is estimated that 6.6 million Americans opens in a new tab or window would benefit from medications like semaglutide for cardiovascular event reduction. Because AOMs are so costly, increasing their coverage and use could result in substantial Medicare spending, as well as higher premiums and cost-sharing for enrollees.

In 2022, Medicare gross total spending on semaglutide and tirzepatide for diabetes reached $5.7 billionopens in a new tab or window, up from $57 million in 2018. With FDA’s approval of these drugs as AOMs, Medicare spending for new indications can be expected to increase dramatically in the next few years.

In March 2024, the Congressional Budget Office (CBO) found that Medicare coverage of AOMs would result in considerable demand for and use of AOMsopens in a new tab or window by enrollees. CBO expects that generic competition, which could moderate prices and lead to higher rebates, would start in earnest only in the second decade of a policy allowing Medicare Part D to cover AOMs. However, even that assumption is not certain as pharmaceutical companies seek to “evergreen”opens in a new tab or window patent protection and market exclusives. CBO also acknowledges the possibility of new drugs that are more effective, have fewer side effects, or can be taken less often, which could translate to higher prices. Furthermore, if AOMs are stopped, weight then increases, meaning that these medications may have to be taken lifelong.

Arguably, reducing obesity rates could reduce the incidence of many chronic diseases such as diabetes and heart disease, potentially creating a net benefit in the long term. And even in the near-term, the Inflation Reduction Act (IRA) may help curb costs.

CBO and other reportsopens in a new tab or window suggest that semaglutide is likely to be selected by CMS for drug price negotiation opens in a new tab or window under the IRA within the next few years. If chosen in 2025, a negotiated Medicare price would be available by 2027. Successful CMS price negotiation is likely to address some of the cost concerns.

The IRA also has other mechanisms that may help address the high costs. The IRA’s rebate program, for example, ensures cost containment by requiring manufacturers of drugs that don’t have competitors to pay rebates to HHS if the prices of those drugs increase faster than the inflation rate. The IRA also caps out-of-pocket spending for prescription drugs at $2,000 starting in 2025opens in a new tab or window. (Although a $2,000 cap helps limit costs, spending that amount of money is still burdensome, especially for people of low socioeconomic status who are disproportionately impacted by obesity.)

In short, the IRA may alleviate, but not eliminate, Medicare spending concerns. The IRA’s ability to address the cost concerns of AOM coverage depends on various factors, and it is likely that those cost containment measures will take many years to materialize. As AOMs continue to be approved for new uses, the intense demand for these drugs coupled with their high costs are likely to place pressures on Medicare spending for years to come.

Takeaways

CMS has made clear that Medicare should cover semaglutide or other AOMs only when needed to avert cardiovascular or other serious diseases. This rule will have to be rigorously enforced and monitored.

Savvy Medicare enrollees could try to game the system, using medications primarily for weight loss purposes — which would be inconsistent with CMS’s approval. Some physicians might also engage in dishonest prescribing. Also, given the racial and ethnic disparities in access to obesity treatment, marginalized groups are unlikely to reap equal benefit from AOMs. For those reasons, robust and thoughtful strategies are needed to ensure that coverage for such drugs is not exploited. Without clear limits on the use of AOMs, Medicare could be overwhelmed with costs.

Beyond Medicare spending, there are wider equity concerns about access to drugs that treat medical conditions associated with obesity. Even if marginalized individuals can gain access to the medication, obtaining optimal health benefits of AOMs is likely to remain a challenge. FDA notes that semaglutide is most effective when it is taken together with other lifestyle or behavioral changesopens in a new tab or window, such as diet and exercise. Because healthy lifestyles and behaviors are mostly influenced by broader social and commercial determinants, the full health benefits of AOMs may elude those most at risk. To harness the public health benefits, AOMs must be seen as part of a broader approach to address health risks associated with obesity; they should not detract from the interventions targeted at socio-structural determinants of health that shape individual and population health outcomes.

To some, semaglutide and other AOMs are a miracle of modern science. Yet, we should entertain some skepticism about miracle solutions to deeply complex health threats. Medicare should extend coverage for AOMs under criteria that meaningfully considers the competing concerns and tradeoffs. Meanwhile, public health professionals and clinicians should continue to use all the tools at our disposal to reduce the burdens of disease caused by overweight and obesity, while also fighting against the stigma, shaming, and discrimination that are widely prevalent in our society.

One third of hospitals take legal action against patients with outstanding medical bills, study finds

Posted on January 23, 2024 by henrykotula • Posted in Accountability, Affordability, Collection Agency, Health Equity, Health Policy, Healthcare Reform, Hospital, Hospital Industry, Medical Debt, Rev Cycle Management, Revenue Cycle • Leave a comment

One third of hospitals take legal action against patients with outstanding medical bills, study finds

Nearly 50% of U.S. adults report struggling to keep up with the cost of healthcare, with four in ten ringing in the new year with medical debt. Medical debt is a major burden that often forces people to delay–and sometimes forgo–access to care. Not only do outstanding medical bills undermine health, but they also represent the most common type of collections, with estimates ranging anywhere from $81 to $140 billion.

With problematic hospital practices gaining national media attention – including rejecting appointments for patients with outstanding medical bills and going so far as to sue such patients – the issue of medical debt is front and center for many Americans.

A glimpse into the state of hospital billing practices

Hospital watchdogs have started collecting valuable data on hospital billing practices to inform patients about these practices and potentially put pressure on hospitals to improve.

In an effort to capture the varied nature of hospital billing and collection practices, the Lown Institute is building a database of financial assistance policies and billing and collection practices across 2,500 hospitals with the support of Arnold Ventures. Initial results are expected to be available in mid-2024 with a full report issued in 2025.

Also interested in evaluating the current state of hospital’s financial practices, in 2021, the Leapfrog Group added questions to their hospital survey around billing and collections. Researchers from the Leapfrog Group, Northwestern University Feinberg School of Medicine, and Johns Hopkins University School of Medicine published a recent analysis of this data in JAMA where they found that many hospitals are still falling short when it comes to billing ethics. Although the data set of 2,270 hospitals was not nationally representative, it provides an interesting glimpse into the billing practices of some U.S. hospitals.

Here are the key takeaways:

754 hospitals (33.2%) reported that they “take legal action against patients for late payment or insufficient payment of a medical bill.” Rural hospitals were 38% more likely than urban hospitals to take legal action against patients.
1,020 (44.9%) hospitals did not routinely send patients itemized bills within 30 days of final claims adjudication or date of service for patients without insurance.
125 (5.5%) hospitals did not provide access to billing representatives capable of investigating billing errors, offering price adjustment, and establishing payment plans.

Ultimately, only 38% of surveyed hospitals reported meeting all three proposed billing quality standards. Interestingly, hospitals with worse Leapfrog safety grades were less likely to meet all three billing standards compared to hospitals with better grades. It’s not clear what’s behind this pattern, but it could be an issue of capacity (hospitals with more resources and staff have an easier time abiding by safety protocol and billing standards), or potentially profiteering (hospitals more concerned with making money may be both understaffing hospitals and suing patients).

So, how can we encourage better billing practices and reduce harm caused by medical debt?

The JAMA study authors recommend standardizing measurement and reporting of hospital billing practices to “increase accountability, reduce variation in billing practices, and reduce barriers in access to care in the US.”

Some states are taking these recommendations to the policy-level, working to make healthcare more affordable for patients. To date, eight states limit medical debt interest and two states restrict credit reporting of medical debt. Current policy proposals on the docket include New York’s Senate Bill S5909B, which seeks to ban hospitals from suing patients making less than 400% of the federal poverty level (FPL).

This research is important to not only provide further insight into how hospitals financially support, or undermine, their patients, but also inform policy efforts to improve healthcare affordability and hospital accountability moving forward.

How US is failing to keep its citizens alive into old age

Posted on October 10, 2023 by henrykotula • Posted in Access & Quality of Healthcare, Accessible Care, Affordability, Chronic Care Management, Chronic Conditions, Chronic Diseases, Health Equity, Health Inequity, Health Insurance Coverage Adequacy, Health Policy, Health Predictors, Mortality, Poverty, Social Determinants of Health, Systemic Issues • Leave a comment

https://mailchi.mp/9fd97f114e7a/the-weekly-gist-october-6-2023?e=d1e747d2d8

Published this week in the Washington Post, this unsparing article packages a year of investigative reporting into a thorough accounting of why US life expectancy is undergoing a rapid decline.

After peaking in 2014, US life expectancy has declined each subsequent year, trending far worse than peer countries. In a quarter of US counties, working-age Americans are dying at the highest rates in 40 years, reversing decades of progress. While deaths from firearms and opioids play a role, chronic diseases remain our nation’s greatest killer, erasing more than double the years of life as all overdoses, homicides, suicides, and car accidents combined.

The drivers of this trend are too numerous to list, but experts suggest targeting “the causes of the causes”, namely social factors, as the death rate gap between the rich and poor has grown almost 15x faster than the income gap since 1980.

The Gist: This reporting is a sobering reminder of the responsibilities—and failures—borne by our nation’s healthcare system.

The massive death toll of chronic disease in this country is not an indictment of the care Americans receive, but of the care and other resources they cannot access or afford.

While it’s not the mandate of health systems to reduce systemic issues like poverty, there is no solution to the problem without health systems playing a key role in increasing access to care, while convening community resources in service of these larger goals.

Healing Healthcare: Repairing The Last 5 Years Of Damage

Posted on September 11, 2023 by henrykotula • Posted in ACA, Access & Quality of Healthcare, Affordability, Artificial Intelligence, Artificial Intelligence Generative, ChatGPT, Health Disparity, Health Equity, Health Inequity, Primary Care, Telemedicine, Underinsured, Uninsured, Value Based Care Model, Value-Based Healthcare, Value-Based Insurance Design (VBID), Virtual Healthcare, Virtual Visit • Leave a comment

https://www.linkedin.com/pulse/healing-healthcare-repairing-last-5-years-damage-robert-pearl-m-d-/?midToken=AQHcpzuK5TbmJA&midSig=2zEJvATcjCWqU1&trk=eml-email_series_follow_newsletter_01-newsletter_content_preview-0-title_&trkEmail=eml-email_series_follow_newsletter_01-newsletter_content_preview-0-title_-null-fll5j~lmemt85c~nw-null-null&eid=fll5j-lmemt85c-nw&otpToken=MTAwMzFjZTAxMzJhY2FjNWJlMmYwM2UzNDIxYWU1YjU4YmM3ZDk0MjlhYWI4NTZmNzJjZTAwNmI0NjUyNTlmNGZjODNkNDliNThlYWJhYzM3ZmVjNmZiOWUyOTYyZDg0NTk2MmQ5NjkxNDFlMjI1ZDIxLDEsMQ%3D%3D

Five years ago, I started the Fixing Healthcare podcast with the aim of spotlighting the boldest possible solutions—ones that could completely transform our nation’s broken medical system.

But since then, rather than improving, U.S. healthcare has fallen further behind its global peers, notching far more failures than wins.

In that time, the rate of chronic disease has climbed while life expectancy has fallen, dramatically. Nearly half of American adults now struggle to afford healthcare. In addition, a growing mental-health crisis grips our country. Maternal mortality is on the rise. And healthcare disparities are expanding along racial and socioeconomic lines.

Reflecting on why few if any of these recommendations have been implemented, I don’t believe the problem has been a lack of desire to change or the quality of ideas. Rather, the biggest obstacle has been the immense size and scope of the changes proposed.

To overcome the inertia, our nation will need to narrow its ambitions and begin with a few incremental steps that address key failures. Here are three actionable and inexpensive steps that elected officials and healthcare leaders can quickly take to improve our nation’s health:

1. Shore Up Primary Care

Compared to the United States, the world’s most-effective and highest-performing healthcare systems deliver better quality of care at significantly lower costs.

One important difference between us and them: primary care.

In most high-income nations, primary care makes up roughly half of the physician workforce. In the United States, it accounts for less than 30% (with a projected shortage of 48,000 primary care physicians over the next decade).

Primary care—better than any other specialty—simultaneously increases life expectancy while lowering overall medical expenses by (a) screening for and preventing diseases and (b) helping patients with chronic illness avoid the deadliest and most-expensive complications (heart attack, stroke, cancer).

But considering that it takes at least three years after medical school to train a primary care physician, to make a dent in the shortage over the next five years the U.S. government must act immediately:

The first action is to expand resident education for primary care. Congress, which authorizes the funding, would allocate $200 million annually to create 1,000 additional primary-care residency positions each year. The cost would be less than 0.2% of federal spending on healthcare.

The second action requires no additional spending. Instead, the Centers for Medicare & Medicaid Services, which covers the cost of care for roughly half of all American adults, would shift dollars to narrow the $108,000 pay gap between primary care doctors and specialists. This will help attract the best medical students to the specialty.

Together, these actions will bolster primary care and improve the health of millions.

2. Use Technology To Expand Access, Lower Costs

A decade after the passage of the Affordable Care Act, 30 million Americans are without health insurance while tens of millions more are underinsured, limiting access to necessary medical care.

Furthermore, healthcare is expected to become even less affordable for most Americans. Without urgent action, national medical expenditures are projected to rise from $4.3 trillion to $7.2 trillion over the next eight years, and the Medicare trust fund will become insolvent.

With costs soaring, payers (businesses and government) will resist any proposal that expands coverage and, most likely, will look to restrict health benefits as premiums rise.

Almost every industry that has had to overcome similar financial headwinds did so with technology. Healthcare can take a page from this playbook by expanding the use of telemedicine and generative AI.

At the peak of the Covid-19 pandemic, telehealth visits accounted for 69% of all physician appointments as the government waived restrictions on usage. And, contrary to widespread fears at the time, patients and doctors rated the quality, convenience and safety of these virtual visits as excellent. However, with the end of Covid-19, many states are now restricting telemedicine, particularly when clinicians practice in a different state than the patient.

To expand telemedicine use—both for physical and mental health issues—state legislators and regulators will need to loosen restrictions on virtual care. This will increase access for patients and diminish the cost of medical care.

It doesn’t make sense that doctors can provide treatment to people who drive across state lines, but they can’t offer the same care virtually when the individual is at home.

Similarly, physicians who faced a shortage of hospital beds during the pandemic began to treat patients in their homes. As with telemedicine, the excellent quality and convenience of care drew praise from clinicians and patients alike.

Building on that success, doctors could combine wearable devices and generative AI tools like ChatGPT to monitor patients 24/7. Doing so would allow physicians to relocate care—safely and more affordably—from hospitals to people’s homes.

Translating this technology-driven opportunity into standard medical practice will require federal agencies like the FDA, NIH and CDC to encourage pilot projects and facilitate innovative, inexpensive applications of generative AI, rather than restricting their use.

3. Reduce Disparities In Medical Care

American healthcare is a system of haves and have-nots, where your income and race heavily determine the quality of care you receive.

Black patients, in particular, experience poorer outcomes from chronic disease and greater difficulty accessing state-of-the-art treatments. In childbirth, black mothers in the U.S. die at twice the rate of white women, even when data are corrected for insurance and financial status.

Generative AI applications like ChatGPT can help, provided that hospitals and clinicians embrace it for the purpose of providing more inclusive, equitable care.

Previous AI tools were narrow and designed by researchers to mirror how doctors practiced. As a result, when clinicians provided inferior care to Black patients, AI outputs proved equally biased. Now that we understand the problem of implicit human bias, future generations of ChatGPT can help overcome it.

The first step will be for hospitals leaders to connect electronic health record systems to generative AI apps. Then, they will need to prompt the technology to notify clinicians when they provide insufficient care to patients from different racial or socioeconomic backgrounds. Bringing implicit bias to consciousness would save the lives of more Black women and children during delivery and could go a long way toward reversing our nation’s embarrassing maternal mortality rate (along with improving the country’s health overall).

The Next Five Years

Two things are inevitable over the next five years. Both will challenge the practice of medicine like never before and each has the potential to transform American healthcare.

First, generative AI will provide patients with more options and greater control. Faced with the difficulty of finding an available doctor, patients will turn to chatbots for their physical and psychological problems.

Already, AI has been shown to be more accurate in diagnosing medical problems and even more empathetic than clinicians in responding to patient messages. The latest versions of generative AI are not ready to fulfill the most complex clinical roles, but they will be in five years when they are 30-times more powerful and capable.

Second, the retail giants (Amazon, CVS, Walmart) will play an ever-bigger role in care delivery. Each of these retailers has acquired primary care, pharmacy, IT and insurance capability and all appear focused on Medicare Advantage, the capitated option for people over the age of 65. Five years from now, they will be ready to provide the businesses that pay for the medical coverage of over 150 million Americans the same type of prepaid, value-based healthcare that currently isn’t available in nearly all parts of the country.

American healthcare can stop the current slide over the next five years if change begins now. I urge medical leaders and elected officials to lead the process by joining forces and implementing these highly effective, inexpensive approaches to rebuilding primary care, lowering medical costs, improving access and making healthcare more equitable.

There’s no time to waste. The clock is ticking.

A Mid-Year Update on 2023 Healthcare Trends

Posted on July 28, 2023 by henrykotula • Posted in Alternative Payment Model, Health Disparity, Health Equity, Health System, Hospital, Hospital Industry, Inflation, Market Consolidation, Market Trends, Non Traditional Providers, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Private Equity, Public Health Emergency (PHE), Telemedicine, Telemedicine Strategy, Workforce Shortages • Leave a comment

A Mid-Year Update on 2023 Healthcare Trends

In January 2023, the Rockefeller Institute published a three-part blog series on trends to watch in healthcare in 2023. The series covered broad issues related to the healthcare workforce, economy, and health policy, and highlighted internal industry changes and trends in service delivery, quality, and equity.

Here, we provide a recap and mid-year update on those trends.

The Public Health Emergency:

In January, we anticipated the COVID-19 federal public health emergency (PHE) would end at some point during the year and its ending would impact the industry by rolling back flexibilities and programs that were temporarily put in place to combat the pandemic. The end of the PHE, while not a “trend” per se, held significant potential to alter the trajectory of trends in healthcare coverage, access, and care delivery that were occurring during the pandemic.

Mid-year Update: As predicted, the PHE was not renewed and ended on May 11, 2023. The most notable impact of the non-renewal of the PHE was the end of continuous Medicaid public health insurance coverage. The Kaiser Family Foundation’s Medicaid Enrollment Tracker shows that, as of July 5, 2023, 1,652,000 Medicaid enrollees were disenrolled by the District of Columbia and 28 states reporting data. For context, this means that 39% of people with a completed renewal were disenrolled in reporting states, though disenrollment rates varied significantly across those states from 16 percent in Virginia to 75 percent in South Carolina. The eligibility redetermination process that can lead to a potential disenrollment is being conducted differently in each state with some states moving quickly to make redeterminations and others doing the process more deliberately over the course of the year with a clear intent to avoid shedding people from the Medicaid program because of an inability to submit administrative paperwork.

The process for eligibility renewals will continue to play out over the course of the next year since states have until mid-2024 to update all Medicaid enrollees’ eligibility status. Also notable are some changes made under the purview of the PHE that persist despite the emergency’s conclusion. For example, access to COVID-19 vaccinations and certain COVID-19 treatments generally have not been affected. Some telehealth flexibilities that were allowed under the PHE are also staying in effect, at least until the end of 2024.

Healthcare Workforce Shortages:

Prior to the pandemic, larger demographic trends in society were already impacting the supply of the healthcare workforce. The number of people aging and needing healthcare services was growing while the number of people available to provide care was not keeping pace thus creating a long-term healthcare workforce shortage.

Mid-year Update: The workforce shortage continues. As outlined in a May 23^rd Becker’s Hospital Review article, several sources point to a continued shortage. They include a report that says the US could see a deficit of 200,000 to 450,000 registered nurses by 2025. Within the next five years, another report also projects a shortage of more than 3.2 million lower-wage healthcare workers, such as medical assistants, home health aides, and nursing assistants. As a result, some healthcare providers are becoming more creative in their efforts to counteract the workforce shortage: creating alumni networks from which to recruit or providing other benefits to their workforce, such as housing or educational assistance. Policymakers can help counteract the negative impacts of the workforce shortage through a variety of strategies. With the shortage expected to continue, it will be important to enact additional policies that bolster the workforce.

Price Inflation:

As we noted, price inflation was significant in 2022 but was not unique to the health sector. Inflation was particularly exacerbated by the re-opening of the economy after the pandemic, the continued war in Ukraine, and supply chain challenges.

Mid-year Update: Prices for many consumer goods and services increased faster than usual, with overall inflation reaching a four-decade high in mid-2022. The Bureau of Labor Statistics (BLS) reported inflation rates have slowed, with overall prices growing by 6 percent in February 2023 compared to the previous year. Interestingly, prices for medical care increased only 2.3 percent. Similarly, BLS reported that the average price of health care in the United States increased by 0.7 percent in the 12 months ending May 2023, following a previous increase of 1.1 percent. The slower price growth in healthcare compared to other sectors of the economy is highly unusual,[i] and while inflation is not easily influenced by state-level policymakers’ actions alone, the trend is still worth monitoring to better understand the impacts on healthcare access and quality. As of early July, the latest predictions from PwC are that healthcare costs will rise 7% in 2024.

Declining Margins at Hospitals:

Previous analysis by the consulting firm Kaufman Hall predicted that more than half of all hospitals would have negative margins at the end of 2022. As we noted, this was due to such factors as higher-than-normal expenses for staff, supplies, and pharmaceuticals and lower revenues.

Mid-year Update: The latest report from Kaufman Hall offers data that shows a reversal in this trend for the first part of 2023. May was the third consecutive month in which hospital margins were positive after operating in the red for most of 2022. The return to normal is largely driven by revenues that are more in line with pre-pandemic levels. With revenues returning to more normal levels, expenses will be particularly important to watch for the remainder of 2023. If hospital expenses continue to outweigh revenues, policymakers may need to evaluate the financial health of providers and the potential impact that may have on access to services for patients.

Private Equity in Healthcare:

We predicted that private equity (PE) would continue to grow in healthcare, pointing to a PwC consulting report that indicated that PE companies still had plenty of “dry powder,” or money, to invest in 2023.

Mid-year Update: There has been a slowdown in private equity deals over the last year. But it is notable that there were still 200 private equity deals in healthcare in the first quarter of 2023, according to PitchBook’s healthcare services report released in May 2023. While lower than the year before, this is still considered active when compared to pre-pandemic PE dealmaking. Because of the waning of the pandemic and stability returning to the healthcare sector, it is more likely that PE deals stabilize in 2023. And some industry predictions indicate that dealmaking will bounce back further in the second half of 2023. As noted in our previous blog, it will be important to monitor the proliferation of PE in healthcare and determine its impact on healthcare markets, care delivery, innovation, and quality.

Consolidations:

Like many other industries, consolidations of all sorts have been happening in healthcare. The consolidations are both vertical—combining two or more stages of production normally operated by separate companies into one company, such as when hospitals or insurers employ physicians and/or acquire physician practices or other entities like pharmacies—and horizontal—combining organizations that provide the same or similar services, such as hospitals acquiring hospitals.

Mid-year Update: Consolidations of all sorts of healthcare entities continued in 2023 with some of the biggest potential consolidations yet. Those include the proposed merger of two major bi-coastal health system providers: Geisinger, based in Pennsylvania, and Kaiser, based in California. Although the deal must still go through regulatory approval, if completed, the two systems will create a nonprofit that will look to add five or six more systems nationally over the next five years. Other notable consolidations include the finalization of tech-giant Amazon’s purchase of One Medical, a primary care network. And Optum, one of the largest conglomerates that is a subsidiary of United Health Group, increased its net revenue growth by 25% to $54.1 billion in the first quarter of 2023, primarily due to more patients visiting OptumHealth clinics and growth in OptumRx pharmacy scripts processed. Optum’s growth is likely to continue in 2023 as they expect to add another 10,000 physicians. Case in point, in February of this year, Optum paid an undisclosed sum for Crystal Run Healthcare, a network of nearly 400 providers in New York. A goal of consolidation has been better coordination of patient care for improved outcomes and value. Results have been mixed and it is therefore an important trend for policymakers and researchers to monitor and to ensure the impacts are positive.

Alternate Payment Models:

Alternate payment models (APMs) in healthcare have been expanding especially since enactment of the Patient Protection and Affordable Care Act in 2010. They are primarily being developed by the Center for Medicare and Medicaid Innovation (CMMI) which has driven payment policy (including APMs) in the two big government healthcare programs: Medicaid and Medicare. There have been several iterations of APMs—over 50 models—but the one common theme is that all of them generally seek to reward better care.

Mid-year Update: Since the start of 2023, the most notable expansion of the trend toward more alternate payment models was CMMI’s introduction of a new primary care-focused APM called Making Care Primary. In addition to this model, it is expected that the Centers for Medicaid and Medicare Services (CMS), which oversees the operation of these two large public health insurance programs, will introduce more new payment models in 2023, including one that allows states to manage the total cost of care in a given region. This may take various forms, including something akin to Maryland’s global budget, which is used statewide. Since the total cost of care model has yet to be officially revealed, this trend and the emergence of any new developments is worth watching in the second half of 2023. Policymakers can learn from these various payment models and use them to inform the plans implemented in their own state or region in order to improve healthcare.

Attention to Health Equity:

A notable aspect of the pandemic was the disparate impact it had on people of color and other marginalized groups. In response, policymakers and providers began paying more attention to the underlying cause of these disparities. In 2021, President Joe Biden signed an executive order to focus federal resources and attention on reducing health disparities.

Mid-year Update: Increased attention to health equity in healthcare has continued. Ernst and Young, an international consulting group, released its first-ever report on the state of health equity in the United States, which involved a survey of over 500 providers to begin tracking their methods for, and progress in, addressing health disparities. More recently, in June 2023, The Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) announced that it will be adding a certification program for healthcare organizations specifically targeted towards improving health equity. While attention to equity has grown, what will be interesting to watch in the second half of 2023 is the degree to which such efforts are having an impact on actually reducing disparities. Understanding the impacts of various interventions can help policymakers expand efforts that are effective.

Digital TeleHealth Delivery Expansion:

The use of digital health expanded dramatically from 2020 to 2022 as social distancing practices were adopted and telehealth options became more widely available. As noted in our blog series, digital health “includes mobile health (mHealth), health information technology (IT), wearable devices, telehealth and telemedicine, and personalized medicine.” It also includes, “mobile medical apps and software that support the clinical decisions doctors make every day to do artificial intelligence and machine learning.”

Mid-year Update: At the end of 2022 and the start of 2023, the ability to infuse capital to drive the expansion of digital health seemed tenuous, in part due to the collapse of Silicon Valley Bank (SVB). As noted by the publication Pitchbook and CB Insights, venture capital funding in the digital health space totaled $7.5 billion in 2022, a 57 percent year-over-year drop. Although the fast pace of investment in digital health may have slowed since its explosion during the pandemic, the expansion of digital health continues. Our January blog suggested that areas such as behavioral health, care at home, and maternal health were areas to watch. In 2023, digital access is expanding in other areas, such as in-home urgent primary care to allow for the treatment of complex injuries and illnesses with the goal of reducing emergency department visits. And other important digital health deals are still occurring: health tech startup Florence picked up Zipnosis from Bright Health to expand its virtual care capabilities. And with the launch of consumer-facing tech products, such as Chat GPT and Apple Vision Pro in the first half of 2023, additional opportunities for applying such technologies in healthcare may fuel further expansion of digital health. Policies that are developed in the future may want to support the growth of such innovation, while also being mindful to monitor the potential impacts on care.

Expansion of Non-Traditional Providers:

In January, we noted an emergence of companies in healthcare whose genesis was something other than healthcare. The blog pointed to examples of how companies such as Walgreens, CVS, and Amazon were expanding their offerings in healthcare.

Mid-year Update: Non-traditional entities continue to expand in the healthcare space. Notable examples include the recent acquisitions and expansions made by CVS. One of these expansions is being done through its affiliation with the insurance company, Aetna. Through Aetna, CVS has entered the insurance exchange market in four more states in 2023, in addition to the 12 states in which it already operates. CVS also closed a deal in the first half of 2023 to acquire Oak Street Health for over $10 billion. And, in March 2023, CVS announced it had officially acquired Signify Health, a digital telehealth company that enables more care to occur in-home. As noted earlier, Amazon officially completed its deal to acquire OneMedical and United Health Group is working on expanding its use of value-based care through a partnership with Walmart. Monitoring the impact of these emerging companies in healthcare will be important for policymakers that have historically only focused on more traditional providers, such as hospitals. These non-traditional entrants, in many cases, are large organizations with substantial resources and their impact may be just as significant if not greater than traditional providers.

Conclusion

These trends merit close attention in the second half of 2023. As healthcare takes on new shapes, the implications for those in the sector and all who depend on it will be huge. In addition, there are important implications for state and federal policymakers who will need to consider how these trends impact access, affordability, and quality of health care, so they can determine whether and how government might help to accelerate beneficial innovations, invest in promising trends, prevent or reverse harmful trends, and monitor the impacts on consumers.

SCOTUS Decisions open a Can of Worms for Healthcare

Posted on July 5, 2023 by henrykotula • Posted in Abortion, Affirmative Action, Compliance, Compliance Issues, False Claims Act, Health Equity, Health Inequity, Health Policy, Health System, Hospital, Hospital Industry, Supreme Court, Tax Exempt Status, Usual and Customary Prices • Leave a comment

https://paulkeckley.com/the-keckley-report/2023/7/3/scotus-decisions-open-a-can-of-worms-for-healthcare/

Five recent Supreme Court rulings have reset the context for U.S. jurisprudence for years to come and open a can of worms for healthcare operators.

Last year’s SCOTUS decision ruling in Dobbs v. Jackson Women’s Health (June 24, 2022) set the tone: in its 6-3 decision, the high court determined that that access to abortion is a state issue, not federal thus nullifying the 50-year-old legal precedent in Roe v. Wade and reversing 2 lower court rulings.
On June 1, 2023, in the United States v. Supervalu, petitioners sued SuperValu and Safeway under the False Claims Act (FCA) alleging they defrauded the Medicare and Medicaid by knowingly filing false claims. Essentially, the plaintiffs sought financial remedy because the retailers’ prices were not explicitly and specifically “usual and customary” prices. In its unanimous ruling, SCOTUS agreed that “the phrase ‘usual and customary’ is open to interpretation, but reasoned that “such facial ambiguity alone is not sufficient to preclude a finding that respondents knew their claims were false.”
On June 29, 2023, in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, the court ruled 6-3 that affirmative action policies at Harvard and the University of NC that consider an applicant’s race in college admissions are unconstitutional.
On June 30, 2023, in 303 Creative LLC v. Elenis (June 30, 2023) By a vote of 6-3, SCOTUS ruled that the First Amendment right of free speech prohibits Colorado from forcing a website designer to create expressive designs speaking messages with which the designer disagrees.
On June 30, 2023, in Department of Education v. Brown: By a unanimous vote, SCOTUS ruled that the 2 plaintiffs lacked standing to “Article III standing to assert a procedural challenge to the student-loan debt-forgiveness plan adopted by the Secretary of Education pursuant to Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act).” In effect, the court vacated and remanded the judgment of the United States Court of Appeals for the 5th Circuit because it felt Myra Brown and Alexander Taylor (plaintiffs) did not prove that any injury suffered from not having their loans forgiven. Therefore, the court had no jurisdiction to address their procedural claim.

Each of these is specific to a circumstance but collectively they expose industries like healthcare to greater compliance risk, potential court challenges and operational complexity. Here’s an example:

The 58-year-old Kennedy-era legal precedent of affirmative action to redress racial inequity was the focus in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College. SCOTUS essentially sided with plaintiffs who argued affirmative action violates the 14^th Amendment’s Equal Protection guarantee. In healthcare, research shows access to the healthcare system is disproportionately inaccessible to persons of color, especially if they’re poor. They improve when individuals are treated by clinicians of the same race but only about 5% of doctors in America are Black, compared to 12% of the general population and only 6% of doctors in the U.S. are Hispanic while the group accounts for nearly almost 20% of the general population.

Notwithstanding the uncanny similarities between higher education and healthcare (both have raised prices above GDP and overall inflation rates for 2 decades, both jealously protect their reputations against outside transparency and unflattering report cards, both feature competition between public and private institutions and both face questions about the value of their efforts), the issue of diversity is central in both. Affirmative action is a means to that end, but at least for now and in higher education, it’s not constitutional.

Might workforce diversity and clinician training efforts be stymied by the prospect of court challenges? Might “affirmative action” in healthcare be replaced by “holistic review” to enable consideration of an applicant’s life or quality of character as some conservative jurists have suggested?

My take:

Affirmative action per the example above is only one of many constructs widely accepted in healthcare today where court challenges may alter the future. Individual rights and free speech including online medical advice, the role of state governments, fraud and abuse and other domains are equally exposed.

It’s clear this court is not threatened by legal precedent nor cautious about public opinion on touchy issues. Thus, immediate imperatives for healthcare organizations are these:

Revisit legal precedents on which the ways we operate are based: Roles and responsibilities in US healthcare are sacrosanct and protected by legal precedent: Physicians diagnose and treat; others don’t. Insurers pay claims but don’t practice medicine. Not for profit hospitals serve community needs in exchange for tax-exemption. Public health programs that serve the poor are funded by local and state governments. Employer sponsored benefits underwrite the system’s profitability and fund its hospital Part A obligations and so on. Might a conservative court revisit these in the context of the constitution’s “general welfare” purpose and redirect its focus, roles and structure?

Revisit terms and phrases where consensus is presumed but specific definition is lacking: Just as SCOTUS recognized ambiguity in applying terms like “usual and customary” in its Supervalu-Safeway ruling, it is likely to challenge other widely used phrases used in healthcare that often lack specific referents i.e., quality, safety, efficacy, effectiveness, community benefit, charity care, evidence-based care, cost-effectiveness, not-for-profit, competition, value” and many others. Might SCOTUS force the industry to more specifically define its most widely used phrases in order to justify its claims?

For everyone in healthcare, these rulings open a can of worms. Compliance risk assessments, scenario plan updates required!

15 innovative ideas for fixing healthcare from 15 brilliant minds

Posted on April 26, 2023 by henrykotula • Posted in Capitation, Change Agent, Change Mindset, Competition, Disruption, Disruptive Technology, Empowering Patients, Empowerment, Fixing Healthcare, Health Equity, Healthcare Reform, Innovation, Innovative Care Models, Integrated Delivery System, Leadership, Life Expectancy, Medical Education, Mortality, Payment Models, Payment Reform, Physician Burnout, Prior Authorization, Quality of Care, Risk Management, Risk-Based Compensation, Risk-Based Contracting, Social Determinants of Health, Thought Leaders • Leave a comment

https://www.linkedin.com/pulse/15-innovative-ideas-fixing-healthcare-from-brilliant-pearl-m-d-/

After 18 years as CEO in Kaiser Permanente, I set my sights on improving the heatlh of the nation, hoping to find a way to achieve the same quality, technology and affordability our medical group delivered to 5 million patients on both coasts.

That quest launched the Fixing Healthcare podcast in 2018, and it inspired interviews with dozens of leaders, thinkers and doers, both in and around medicine. These experts shared innovative ideas and proven solutions for achieving (a) superior quality, (b) improved patient access, (c) lower overall costs, and (d) greater patient and clinician satisfaction.

This month, after 150 combined episodes, three questions emerged:

Which of the hundreds of ideas presented remain most promising?
Why, after five years and so many excellent solutions, has our nation experienced such limited improvements in healthcare?
And finally, how will these great ideas become reality?

To answer the first question, I offer 15 of the best Fixing Healthcare recommendations so far. Some quotes have been modified for clarity with links to all original episodes (and transcripts) included.

Fixing the business of medicine

1. Malcolm Gladwell, journalist and five-time bestselling author: “In other professions, when people break rules and bring greater economic efficiency or value, we reward them. In medicine, we need to demonstrate a consistent pattern of rewarding the person who does things better.”

2. Richard Pollack, CEO of the American Hospital Association (AHA): “I hope in 10 years we have more integrated delivery systems providing care, not bouncing people around from one unconnected facility to the next. I would hope that we’re in a position where there’s a real focus on ensuring that people get care in a very convenient way.”

Eliminating burnout

3. Zubin Damania, aka ZDoggMD, hospitalist and healthcare satirist: “In the culture of medicine, specialists view primary care as the weak medical students, the people who couldn’t get the board scores or rotation honors to become a specialist. Because why would you do primary care? It’s miserable. You don’t get paid enough. It’s drudgery. We must change these perceptions.”

4. Devi Shetty, India’s leading heart surgeon and founder of Narayana Health: “When you strive to work for a purpose, which is not about profiting yourself, the purpose of our action is to help society, mankind on a large scale. When that happens, cosmic forces ensure that all the required components come in place and your dream becomes a reality.”

5. Jonathan Fisher, cardiologist and clinician advocate: “The problem we’re facing in healthcare is that clinicians are all siloed. We may be siloed in our own institution thinking that we’re doing it best. We may be siloed in our own specialty thinking that we’re better than others. All of these divides need to be bridged. We need to begin the bridging.”

Making medicine equitable

6. Jen Gunter, women’s health advocate and “the internet’s OB-GYN”: “Women are not listened to by doctors in the way that men are. They have a harder time navigating the system because of that. Many times, they’re told their pain isn’t that serious or their bleeding isn’t that heavy. We must do better at teaching women’s health in medicine.”

7. Amanda Calhoun, activist, researcher and anti-racism educator: “A 2015 survey showed that white residents and medical students still thought Black people feel less pain, which is wild to me because Black is a race. It’s not biological. This is actually an historical belief that persists. One of the biggest things we can do as the medical system is work on rebuilding trust with the Black community.”

Addressing social determinants of health

8. Don Berwick, former CMS administrator and head of 100,000 Lives campaign: “We know where the money should go if we really want to be a healthy nation: early childhood development, workplaces that thrive, support to the lonely, to elders, to community infrastructures like food security and transportation security and housing security, to anti-racism and criminal-justice reform. But we starve the infrastructures that could produce health to support the massive architecture of intervention.”

9. David T. Feinberg, chairman of Oracle Health: “Twenty percent of whether we live or die, whether we have life in our years and years in our life, is based on going to good doctors and good hospitals. We should put the majority of effort on the stuff that really impacts your health: your genetic code, your zip code, your social environment, your access to clean food, your access to transportation, how much loneliness you have or don’t have.”

Empowering patients

10. Elisabeth Rosenthal, physician, author and editor-in-chief of KHN: “To patients, I say write about your surprise medical bills. Write to a journalist, write to your local newspaper. Hospitals today are very sensitive about their reputations and they do not want to be shamed by some of these charges.”

11. Gordon Chen, ChenMed CMO: “If you think about what leadership really is, it’s influence. Nothing more, nothing less. And the only way to achieve better health in patients is to get them to change their behaviors in a positive way. That behavior change takes influence. It requires primary care physicians to build relationship and earn trust with patients. That is how both doctors and patients can drive better health outcomes.”

Utilizing technology

12. Vinod Khosla, entrepreneur, investor, technologist: “The most expensive part of the U.S. healthcare system is expertise, and expertise can relatively be tamed with technology and AI. We can capture some of that expertise, so each oncologist can do 10 times more patient care than they would on their own without that help.”

13. Rod Rohrich, influential plastic surgeon and social media proponent: “Doctors, use social media to empower your audience, to educate them, and not to overwhelm them. If you approach social media by educating patients about their own health, how they can be better, how can they do things better, how they can find doctors better, that’s a good thing.”

Rethinking medical education

14. Marty Makary, surgeon and public policy researcher: “I would get rid of all the useless sh*t we teach our medical students and residents and fellows. In the 16 years of education that I went through, I learned stuff that has nothing to do with patient care, stuff that nobody needs to memorize.”

15. Eric Topol, cardiologist, scientist and AI expert: “It’s pretty embarrassing. If you go across 150 medical schools, not one has AI as a core curriculum. Patients will get well versed in AI. It’s important that physicians stay ahead, as well.”

Great ideas, but little progress

Since 2018, our nation has spent $20 trillion on medical care, navigated the largest global pandemic in a century and developed an effective mRNA vaccine, nearly from scratch. And yet, despite all this spending and scientific innovation, American medicine has lost ground.

American life expectancy has dropped while maternal mortality rates have worsened. Clinician burnout has accelerated amid a growing shortage of primary care and emergency medicine physicians. And compared to 12 of its wealthiest global peers, the United States spends nearly twice as much per person on medical care, but ranks last in clinical outcomes.

Guests on Fixing Healthcare generally agree on the causes of stagnating national progress.

Healthcare system giants, including those in the drug, insurance and hospital industries, find it easier to drive up prices than to prevent disease or make care-delivery more efficient. Over the past decade, they’ve formed a conglomerate of monopolies that prosper from the existing rules, leaving them little incentive to innovate on behalf of patients. And in this era of deep partisan divide, meaningful healthcare reforms have not (and won’t) come from Congress.

Then who will lead the way?

Industry change never happens because it should. It happens when demand and opportunity collide, creating space for new entrants and outsiders to push past the established incumbents. In healthcare, I see two possibilities:

1. Providers will rally and reform healthcare

Doctors and hospitals are struggling. They’re struggling with declining morale and decreasing revenue. Clinicians are exiting the profession and hospitals are shuttering their doors. As the pain intensifies, medical group leaders may be the ones who decide to begin the process of change.

The first step would be to demand payment reform.

Today’s reimbursement model, fee-for-service, pays doctors and hospitals based on the quantity of care they provide—not the quality of care. This methodology pushes physicians to see more patients, spend less time with them, and perform ever-more administrative (billing) tasks. Physicians liken it to being in a hamster wheel: running faster and faster just to stay in place.

Instead, providers of care could be paid by insurers, the government and self-funded businesses directly, through a model called “capitation.” With capitation, groups of providers receive a fixed amount of money per year. That sum depends on the number of enrollees they care for and the amount of care those individuals are expected to need based on their age and underlying diseases.

This model puts most of the financial risk on providers, encouraging them to deliver high-quality, effective medical care. With capitation, doctors and hospitals have strong financial incentives to prevent illnesses through timely and recommended preventive screenings and a focus on lifestyle-medicine (which includes diet, exercise and stress reduction). They’re rewarded for managing patients’ health and helping them avoid costly complications from chronic diseases, such as heart attacks, strokes and cancer.

Capitation encourages doctors from all specialties to collaborate and work together on behalf of patients, thus reducing the isolation physicians experience while ensuring fewer patients fall through the cracks of our dysfunctional healthcare system. The payment methodology aligns the needs of patients with the interests of providers, which has the power to restore the sense of mission and purpose medicine has lost.

Capitation at the delivery-system level eliminates the need for prior authorization from insurers (a key cause of clinician burnout) and elevates the esteem accorded to primary care doctors (who focus on disease prevention and care coordination). And because the financial benefits are tied to better health outcomes, the capitated model rewards clinicians who eliminate racial and gender disparities in medical care and organizations that take steps to address the social determinants of health.

2. Major retailers will take over

If clinicians don’t lead the way, corporate behemoths like Amazon, CVS and Walmart will disrupt the healthcare system as we know it. These retailers are acquiring the insurance, pharmacy and direct-patient-care pieces needed to squeeze out the incumbents and take over American healthcare.

Each is investing in new ways to empower patients, provide in-home care and radically improve access to both in-person and virtual medicine. Once generative AI solutions like ChatGPT gain enough computing power and users, tech-savvy retailers will apply this tool to monitor patients, enable healthier lifestyles and improve the quality of medical care compared to today.

When Fixing Healthcare debuted five years ago, none of the show’s guests could have foreseen a pandemic that left more than a million dead. But, had our nation embraced their ideas from the outset, many of those lives would have been saved. The pandemic rocked an already unstable and underperforming healthcare system. Our nation’s failure to prevent and control chronic disease resulted in hundreds of thousands of unnecessary deaths from Covid-19. Outdated information technology systems, medical errors and disparities in care caused hundreds of thousands more. As a nation, we could have done much better.

With the cracks in the system widening and the foundation eroding, disruption in healthcare is inevitable. What remains to be seen is whether it will come from inside or outside the U.S. healthcare system.

North Carolina Blues plan says food-as-medicine program resulted in better outcomes for diabetes patients

Posted on March 23, 2023 by henrykotula • Posted in Food as Form of Medicine, Food Insecurity, Health Equity, Health Inequity, Health Insurance Industry, Proof-of-Concept Pilot Program • Leave a comment

https://www.fiercehealthcare.com/payers/north-carolina-blues-plan-says-food-medicine-program-resulted-better-outcomes-diabetes

A health insurer launched a pilot program that takes aim at food insecurity in addressing the healthcare needs of beneficiaries—the first time that’s ever happened, according to those who spearheaded the effort.

Kaiser Permanente and Geisinger Health Plan have also used a food-as-medicine approach in attempting to improve health outcomes, but here’s the difference: They are integrated health systems that own their own hospitals and physician practices, while Blue Cross and Blue Shield of North Carolina is not.

Blue Cross NC unveiled data published in NEJM Catalyst about its proof-of-concept pilot program that involved delivering food to individuals in Affordable Care Act plans who suffer from Type 2 diabetes as well as connecting them with health advisers. Despite the success of the effort, the findings included many caveats that suggest that it could be some time before the pilot program evolves and lands a spot on the insurer’s roster of benefits packages.

Still, the authors called it a good first step that underscores great potential.

They also noted that “payers are in a unique position to integrate food-as-medicine interventions into more sustainable financial models. As a payer, the business case needs to be made for offering products and services that address the food and nutritional needs of its members.”

More than 600,000 North Carolina residents struggle to put food on the table, with the state ranking as the tenth hungriest in the country. The pilot’s results come at a time when the expansion of food-aid programs because of the COVID-19 pandemic has run out and inflation is driving up the price of groceries.

Blue Cross NC’s program was launched in December 2020, and invitations to eligible beneficiaries were sent out in January 2021. The insurer hired the digital health coaching vendor Pack Health, a division of Quest Diagnostics, to help administer the program.

A typical box of food could include salmon, carrots, beans, rice, pasta, sauce, applesauce, milk and crushed tomatoes. Deliveries included easy-to-make recipes, according to the study.

Blue Cross NC researchers compared the results of surveys at three and six months to baseline metrics. The surveys measured physical and mental health, body mass index, hemoglobin A1c levels, self-reported food security and member satisfaction.

They also looked at medical expenses for the 555 “completes,” those who finished the program, and the 327 “partials.” Completes received 12 boxes of food and six months of coaching. Partials received six to 11 boxes of food and three to five months of coaching but dropped out of the program.

Most participants (81%) were satisfied with the frequency of food delivery as well as the amount of food delivered (82%).

Food insecurity for the completes dipped from 38% to 20%, BMI (35 kg/m2 to 33 kg/m2) and obesity (72% to 61%). Completes saw an increase in individuals who reached the U.S. average for physical health measures (51% to 65%) and mental health measures (70% to 80%).

In addition, completes saw a $139 reduction per member per month in total medical costs and an increase of $8 per member per month in pharmacy costs, which the researchers interpreted as evidence of greater medication adherence.

Partials, meanwhile, saw a decrease of $10 per member per month in pharmacy costs, but an increase in all other cost types.

“The relative number of partials responding to the 3- and 6-month surveys was low; therefore, we do not discuss the 6-month results of this group, nor do we attempt to draw meaningful conclusions regarding differences across participation groups,” the study said.

Nonetheless, researchers estimate that if the program becomes available to all eligible beneficiaries, it could cut medical expenses by as much as $8.5 million to $13.1 million a year.

“These findings highlight that an upfront investment by an insurer can help improve health outcomes,” according to a Blue Cross NC spokesperson. “The food delivery and health coaching pilot program is one of a series focused on long-term strategies for eliminating health disparities, strengthening communities and making health care more affordable, accessible and easier to navigate for all North Carolinians.”

In April 2021, the health plan unveiled partnerships with state organizations including Benefits Data Trust, Manna Food Bank, Food Bank of Central & Eastern North Carolina and Second Harvest Food Bank of Northwest NC that focused on trying to boost enrollment in the Supplemental Nutrition Assistance Program.

“With an initial focus on food security, the insurer is advancing its work to promote health equity with new prevention programs and value-added services,” Blue Cross NC said in a statement at the time. “Beyond just offering these services for members, the insurer is also measuring their impact. This research will identify which steps will be effective long-term strategies for eliminating health disparities, strengthening communities, developing impactful member products, and reducing health care costs for North Carolinians.”

Researchers also note that the results from its food delivery and health coaching program published in NEJM Catalyst are far from conclusive, and further study needs to be done.

“Because all program participants received health coaching, the design makes it impossible to disentangle the effects of the food delivery component from those of the health coaching,” the study states. “Interaction with the [health adviser] was regular, with program participants and [health advisers] communicating at least once per week by telephone and six to seven times per week via text message.”

In addition, researchers want to evaluate whether the gains seen in a six-month period could be sustained over the long haul and what effect greater member participation might have on the program’s sustainability.

“Analyses are planned to evaluate the long-term impact of the … program,” the study states.

SOTU: Biden’s biggest healthcare priorities

Posted on February 15, 2023 by henrykotula • Posted in Abortion, ACA, Cancer, Cancer Moonshot Initiative, Coronavirus, Health Equity, Health Inequity, Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Inflation Reduction Act, Insulin, Job Growth, Job Market, Medicaid, Medicaid Cliff, Opioid Epidemic, Payor Mix, Public Health Emergency (PHE), Unemployment • Leave a comment

https://www.advisory.com/daily-briefing/2023/02/08/sotu?utm_source=member_db&utm_medium=email&utm_campaign=2023feb08&utm_content=member_headline_final_ectake_x_x_x&elq_cid=4838956&

President Joe Biden last night highlighted several healthcare priorities during his State of the Union address, including efforts to reduce drug costs, a universal cap on insulin prices, healthcare coverage, and more.

COVID-19

In his speech, Biden acknowledged the progress the country has made with COVID-19 over the last few years.

“Two years ago, COVID had shut down our businesses, closed our schools, and robbed us of so much,” he said. “Today, COVID no longer controls our lives.”

Although Biden noted that the COVID-19 public health emergency (PHE) will come to an end soon, he said the country should remain vigilant and called for more funds from Congress to “monitor dozens of variants and support new vaccines and treatments.”

The Inflation Reduction Act

Biden highlighted several provisions of the Inflation Reduction Act (IRA), which passed last year, that aim to reduce healthcare costs for millions of Americans.

“You know, we pay more for prescription drugs than any major country on earth,” he said. “Big Pharma has been unfairly charging people hundreds of dollars — and making record profits.”

Under the IRA, Medicare is now allowed to negotiate the prices of certain prescription drugs, and out-of-pocket drug costs for Medicare beneficiaries are capped at $2,000 per year. Insulin costs for Medicare beneficiaries are also capped at $35 a month.

“Bringing down prescription drug costs doesn’t just save seniors money,” Biden said. “It will cut the federal deficit, saving tax payers hundreds of billions of dollars on the prescription drugs the government buys for Medicare.”

Caps on insulin costs for all Americans

Although the IRA limits costs for seniors on Medicare, Biden called for the policy to be made universal for all Americans. According to a 2022 study, over 1.3 million Americans skip, delay purchasing, or ration their insulin supply due to costs.

“[T]here are millions of other Americans who are not on Medicare, including 200,000 young people with Type I diabetes who need insulin to save their lives,” Biden said. “… Let’s cap the cost of insulin at $35 a month for every American who needs it.”

With the end of the COVID-19 PHE, HHS estimates that around 15 million people will lose health benefits as states begin the process to redetermine eligibility.

The opioid crisis

Biden also addressed the ongoing opioid crisis in the United States and noted the impact of fentanyl, in particular.

“Fentanyl is killing more than 70,000 Americans a year,” he said. “Let’s launch a major surge to stop fentanyl production, sale, and trafficking, with more drug detection machines to inspect cargo and stop pills and powder at the border.”

He also highlighted efforts by to expand access to effective opioid treatments. According to a White House fact sheet, some initiatives include expanding access to naloxone and other harm reduction interventions at public health departments, removing barriers to prescribing treatments for opioid addiction, and allowing buprenorphine and methadone to be prescribed through telehealth.

Access to abortion

In his speech, Biden called on Congress to “restore” abortion rights after the U.S. Supreme Court overturned Roe v. Wade last year.

“The Vice President and I are doing everything we can to protect access to reproductive healthcare and safeguard patient privacy. But already, more than a dozen states are enforcing extreme abortion bans,” Biden said.

He also added that he will veto a national abortion ban if it happens to pass through Congress.

Progress on cancer

Biden also highlighted the Cancer Moonshot, an initiative launched last year aimed at advancing cancer treatment and prevention.

“Our goal is to cut the cancer death rate by at least 50% over the next 25 years,” Biden said. “Turn more cancers from death sentences into treatable diseases. And provide more support for patients and families.”

According to a White House fact sheet, the Cancer Moonshot has created almost 30 new federal programs, policies, and resources to help increase screening rates, reduce preventable cancers, support patients and caregivers and more.

“For the lives we can save and for the lives we have lost, let this be a truly American moment that rallies the country and the world together and proves that we can do big things,” Biden said. “… Let’s end cancer as we know it and cure some cancers once and for all.”

Healthcare coverage

Biden commended the fact that “more American have health insurance now than ever in history,” noting that 16 million people signed up for plans in the Affordable Care Act marketplace this past enrollment period.

In addition, Biden noted that a law he signed last year helped millions of Americans save $800 a year on their health insurance premiums. Currently, this benefit will only run through 2025, but Biden said that we should “make those savings permanent, and expand coverage to those left off Medicaid.”

Advisory Board’s take

Our questions about the Medicaid cliff

President Biden extolled economic optimism in the State of the Union address, touting the lowest unemployment rate in five decades. With job creation on the rise following the incredible job losses at the beginning of the COVID-19 pandemic, there is still a question of whether the economy will continue to work for those who face losing Medicaid coverage at some point in the next year.

The public health emergency (PHE) is scheduled to end on May 11. During the PHE, millions of Americans were forced into Medicaid enrollment because of job losses. Federal legislation prevented those new enrollees from losing medical insurance. As a result, the percentage of uninsured Americans remained around 8%. The safety net worked.

Starting April 1, state Medicaid plans will begin to end coverage for those who are no longer eligible. We call that the Medicaid Cliff, although operationally, it will look more like a landslide. Currently, state Medicaid regulators and health plans are still trying to figure out exactly how to manage the administrative burden of processing millions of financial eligibility records. The likely outcome is that Medicaid rolls will decrease exponentially over the course of six months to a year as eligibility is redetermined on a rolling basis.

In the marketplace, there is a false presumption that all 15 million Medicaid members will seamlessly transition to commercial or exchange health plans. However, families with a single head of household, women with children under the age of six, and families in both very rural and impoverished urban areas will be less likely to have access to commercial insurance or be able to afford federal exchange plans. Low unemployment and higher wages could put these families in the position of making too much to qualify for Medicaid, but still not making enough to afford the health plans offered by their employers (if their employer offers health insurance). Even with the expansion of Medicaid and exchange subsidies, it, is possible that the rate of uninsured families could rise.

For providers, this means the payer mix in their market will likely not return to the pre-pandemic levels. For managed care organizations with state Medicaid contracts, a loss of members means a loss of revenue. A loss of Medicaid revenue could have a negative impact on programs built to address health equity and social determinants of health (SDOH), which will ultimately impact public health indicators.

For those of us who have worked in the public health and Medicaid space, the pandemic exposed the cracks in the healthcare ecosystem to a broader audience. Discussions regarding how to address SDOH, health equity, and behavioral health gaps are now critical, commonplace components of strategic business planning for all stakeholders across our industry’s infrastructure.

But what happens when Medicaid enrollment drops, and revenues decrease? Will these discussions creep back to the “nice to have” back burners of strategic plans?

Or will we, as an industry, finish the job?

The 6 challenges facing health care in 2023—and how to handle them

Posted on February 8, 2023 by henrykotula • Posted in Challenge, Digital Health, Digital Health Initiatives, Financial Stewardship, Financial Strength, Financial Transparency, Financial Viability, Financially Distressed, Health Equity, Health Policy, Health System, Hospital, Hospital Industry, Inflation, Labor Shortages, Labor Spend Management, Leadership, Market Consolidation, Payor Contracting, Quality Measures, Quality of Care, Quality Reporting, Recruiting, Talent Imperative, Talent Management, Talent Pipelines • Leave a comment

https://www.advisory.com/Daily-Briefing/2023/01/04/healthcare-2023?utm_source=public_db&utm_medium=email&utm_campaign=2023Feb08&utm_content=public_headline_public_x_x_x_secondcta&elq_cid=4778863&x_id=

With input from stakeholders across the industry, Modern Healthcare outlines six challenges health care is likely to face in 2023—and what leaders can do about them.

1. Financial difficulties

In 2023, health systems will likely continue to face financial difficulties due to ongoing staffing problems, reduced patient volumes, and rising inflation.

According to Tina Wheeler, U.S. health care leader at Deloitte, hospitals can expect wage growth to continue to increase even as they try to contain labor costs. They can also expect expenses, including for supplies and pharmaceuticals, to remain elevated.

Health systems are also no longer able to rely on federal Covid-19 relief funding to offset some of these rising costs. Cuts to Medicare reimbursement rates could also negatively impact revenue.

“You’re going to have all these forces that are counterproductive that you’re going to have to navigate,” Wheeler said.

In addition, Erik Swanson, SVP of data and analytics at Kaufman Hall, said the continued shift to outpatient care will likely affect hospitals’ profit margins.

“The reality is … those sites of care in many cases tend to be lower-cost ways of delivering care, so ultimately it could be beneficial to health systems as a whole, but only for those systems that are able to offer those services and have that footprint,” he said.

2. Health system mergers

Although hospital transactions have slowed in the last few years, market watchers say mergers are expected to rebound as health systems aim to spread their growing expenses over larger organizations and increase their bargaining leverage with insurers.

“There is going to be some organizational soul-searching for some health systems that might force them to affiliate, even though they prefer not to,” said Patrick Cross, a partner at Faegre Drinker Biddle & Reath. “Health systems are soliciting partners, not because they are on the verge of bankruptcy, but because they are looking at their crystal ball and not seeing an easy road ahead.”

Financial challenges may also lead more physician practices to join health systems, private-equity groups, larger practices, or insurance companies.

“Many independent physicians are really struggling with their ability to maintain their independence,” said Joshua Kaye, chair of U.S. health care practice at DLA Piper. “There will be a fair amount of deal activity. The question will be more about the size and specialty of the practices that will be part of the next consolidation wave.”

3. Recruiting and retaining staff

According to data from Fitch Ratings, health care job openings reached an all-time high of 9.2% in September 2022—more than double the average rate of 4.2% between 2010 and 2019. With this trend likely to continue, organizations will need to find effective ways to recruit and retain workers.

Currently, some organizations are upgrading their processes and technology to hire people more quickly. They are also creating service-level agreements between recruiting and hiring teams to ensure interviews are scheduled within 48 hours or decisions are made within 24 hours.

Eric Burch, executive principal of operations and workforce services at Vizient, also predicted that there will be a continued need for contract labors, so health systems will need to consider travel nurses in their staffing plans.

“It’s really important to approach contract labor vendors as a strategic partner,” Burch said. “So when you need the staff, it’s a partnership and they’re able to help you get to your goals, versus suddenly reaching out to them and they don’t know your needs when you’re in crisis.”

When it comes to retention, Tochi Iroku-Malize, president of the American Academy of Family Physicians (AAFP), said health systems are adequately compensated for their work and have enough staff to alleviate potential burnout.

AAFP also supports legislation to streamline prior authorization in the Medicare Advantage program and avoid additional cuts to Medicare payments, which will help physicians provide care to patients with less stress.

4. Payer-provider contract disputes

A potential recession, along with the ensuing job cuts that typically follow, would limit insurers’ commercial business, which is their most profitable product line. Instead, many people who lose their jobs will likely sign up for Medicaid plans, which is much less profitable.

Because of increased labor, supply, and infrastructure costs, Brad Ellis, senior director at Fitch Ratings, said providers could pressure insurers into increasing the amount they pay for services. This will lead insurers to passing these increased costs onto members’ premiums.

Currently, Ellis said insurers are keeping an eye on how legislators finalize rules to implement the No Surprise Act’s independent resolution process. Regulators will also begin issuing fines for payers who are not in compliance with the law’s price transparency requirement.

5. Investment in digital health

Much like 2022, investment in digital health is likely to remain strong but subdued in 2023.

“You’ll continue to see layoffs, and startup funding is going to be hard to come by,” said Russell Glass, CEO of Headspace Health.

However, investors and health care leaders say they expect a strong market for digital health technology, such as tools for revenue cycle management and hospital-at-home programs.

According to Julian Pham, founding and managing partner at Third Culture Capital, he expects corporations such as CVS Health to continue to invest in health tech companies and for there to be more digital health mergers and acquisitions overall.

In addition, he predicted that investors, pharmaceutical companies, and insurers will show more interest in digital therapeutics, which are software applications prescribed by clinicians.

“As a physician, I’ve always dreamed of a future where I could prescribe an app,” Pham said. “Is it the right time? Time will tell. A lot needs to happen in digital therapeutics and it’s going to be hard.”

6. Health equity efforts

This year, CMS will continue rolling out new health equity initiatives and quality measurements for providers and insurers who serve marketplace, Medicare, and Medicaid beneficiaries. Some new quality measures include maternal health, opioid related adverse events, and social need/risk factor screenings.

CMS, the Joint Commission, and the National Committee for Quality Assurance are also partnering together to establish standards for health equity and data collection.

In addition, HHS is slated to restore a rule under the Affordable Care Act that prohibits discrimination based on a person’s gender identity or sexual orientation. According to experts, this rule may conflict with recently passed state laws that ban gender-affirming care for minors.

“It’s something that’s going to bear out in the courts and will likely lack clarity. We’ll see differences in what different courts decide,” said Lindsey Dawson, associate director of HIV policy and director of LGBTQ health policy at the Kaiser Family Foundation. “The Supreme Court acknowledged that there was this tension. So it’s an important place to watch and understand better moving forward.”

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HENRY KOTULA

A Healthcare Leadership Blog

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A glimpse into the state of hospital billing practices

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1. Shore Up Primary Care

2. Use Technology To Expand Access, Lower Costs

3. Reduce Disparities In Medical Care

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COVID-19

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Access to abortion

Progress on cancer

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Our questions about the Medicaid cliff

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1. Financial difficulties

2. Health system mergers

3. Recruiting and retaining staff

4. Payer-provider contract disputes

5. Investment in digital health

6. Health equity efforts

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