https://mailchi.mp/26f8e4c5cc02/the-weekly-gist-july-16-2021?e=d1e747d2d8
Senate Democrats announced a compromise budget framework to fund President Biden’s social spending plans to the tune of $3.5T, including substantial money for some of the administration’s key healthcare priorities. The framework sends instructions to several Senate committees, including the Budget and Finance panels, to craft legislative language around the central components of the deal, with the goal of passing a spending package before next month’s recess.
Many specifics remain to be ironed out in negotiations among the party’s progressive and moderate camps, but some of the main elements of the deal became clear this week. The plan includes extending the enhanced subsidies for purchasing individual coverage on the healthcare marketplaces, which were implemented earlier this year as part of the American Rescue Plan Act. It would also seek to close the so-called “Medicaid coverage gap”, by providing new coverage options for low-income adults in states that did not expand Medicaid under the Affordable Care Act (ACA).
New investments would be made in home- and community-based services for long-term care, along the lines of the $400B proposed in President Biden’s American Families Plan. And the budget deal envisions expanding benefits in the Medicare program to include dental, vision, and hearing services. Given the budgetary concerns of moderate Democratic lawmakers like Sen. Joe Manchin (WV), one critical question will be how the $3.5T deal will be paid for. One likely source of funding for the deal will be reforming the way Medicare purchases prescription drugs, making that long-time Democratic policy objective a probable part of any final package.
Notably absent from the healthcare spending proposals: lowering the eligibility age for Medicare from 65 to 60. No final decision has been reached on whether to incorporate such a move; rather, the question will be sent to the Senate Finance Committee for consideration. Given the urgency of passing as much of the Biden administration’s legislative agenda as possible before the midterm campaign season begins in earnest, we think it’s unlikely that Democrats will be willing to cross the Rubicon of Medicare expansion at this point.
The prospect of having to gain support from all 50 Democratic senators—as zero Republicans are expected to support the package—will likely temper any appetite for picking a fight with the influential hospital and physician industries, which have strongly opposed Medicare expansion.
One longer-term implication of the apparent decision to favor expansion of Medicare benefits over lowering the Medicare eligibility age now: a richer package of services in traditional Medicare might make Medicare Advantage (MA) a less attractive alternative for potential enrollees and could undermine any future efforts to create an “MA buy-in” for coverage expansion.
Expect lobbying and negotiations to reach a furious pace over the next several weeks, as lawmakers work out the final details of the $3.5T spending plan.
https://mailchi.mp/26f8e4c5cc02/the-weekly-gist-july-16-2021?e=d1e747d2d8
We’ve been working with a CEO and his strategy team around their health system’s five-year strategic plan. It’s still early in development, and they’re considering some bold moves. Given that some of the ideas are disruptive, he astutely observed they needed to bring a clinical leader into the process before the strategy is fully developed, but he’s having trouble identifying the right physician to be part of the very small executive working group.
We began listing the important attributes, creating a rough job description for a “clinician strategist”: the ability to consider clinical and operational implications but not get bogged down in details; bold, big-picture thinking and a willingness to take risks; strong communication and leadership skills.
As the list grew longer, we began to wonder if we were really telling the CEO to chase a unicorn. Some of the characteristics that typically make for an outstanding clinician—reliance on data and evidence, lower risk tolerance—might conflict with embracing disruptive change. Much of strategic decision making is about finding “80-20” compromises, while doctors often tend to get bogged down in detail (for good reason) and are quick to poke holes.
And our ideal physician strategist, out of a desire to safeguard patient care, might sometimes find that the strategy team isn’t adequately considering the ramifications for quality and safety. Finding a physician leader who also has the skills of a chief strategy officer is indeed a rare thing. It’s probably a better bet to identify early-career doctors who have the right mindset and an interest in strategy and help them develop their leadership skills over time.
Regardless, this CEO’s instinct was correct. Bringing doctors into the strategy-setting process early is crucial, even if the perfect clinician strategist might prove difficult to find.
https://mailchi.mp/26f8e4c5cc02/the-weekly-gist-july-16-2021?e=d1e747d2d8
An estimate from the Partnership for America’s Healthcare Future predicts that nearly four out of five 60- to 64-year-olds would enroll in Medicare, with two-thirds transitioning from existing commercial plans, if “Medicare at 60” becomes a reality.
In the graphic above, we’ve modeled the financial impact this shift would have on a “typical” five-hospital health system, with $1B in revenue and an industry-average two percent operating margin.
If just over half of commercially insured 60- to 64-year-olds switch to Medicare, the health system would see a $61M loss in commercial revenue.
There would be some revenue gains, especially from patients who switch from Medicaid, but the net result of the payer mix shift among the 60 to 64 population would be a loss of $30M, or three percent of annual revenue, large enough to push operating margin into the red, assuming no changes in cost structure. (Our analysis assumed a conservative estimate for commercial payment rates at 240 percent of Medicare—systems with more generous commercial payment would take a larger hit.)
Coming out of the pandemic, hospitals face rising labor costs and unpredictable volume in a more competitive marketplace. While “Medicare at 60” could provide access to lower-cost coverage for a large segment of consumers, it would force a financial reckoning for many hospitals, especially standalone hospitals and smaller systems.
Legacy health brands are losing their significance as healthcare consumers place higher value on convenience than reputation. That’s the idea behind a July 1 tweet by Sachin Jain, MD, the CEO of Scan Group and Scan Health Plan.
“We are in an era of the declining significance of big healthcare brands,” he said.
To Dr. Jain, big healthcare brands are the ones commonly known for being the best in a specific specialty or renowned in their region. While many big healthcare brands have high quality performance metrics to hang their clout on, Dr. Jain believes reliance on name alone is problematic.
“There’s been an arrogance by a lot of healthcare organizations that have kind of sold on brand. There’s going to be a reckoning for some of those organizations. My personal view is that the next generation of healthcare consumers is going to be less aligned to think about brands in the same way,” Dr. Jain told Becker’s.
Today’s patients are paying more attention to convenience, digital access and price than reputation. Cost of care, ease of scheduling and accessibility are beating out recognition, Dr. Jain said.
At Scan, Dr. Jain said the Long Beach, Calif.-based Medicare Advantage insurer that serves more than 220,000 members is hyperfocused on staying as human as possible and fulfilling unmet needs for its community.
“Elite healthcare brands are entering this fun phase where they are becoming underdogs. They need to have a chip on their shoulders almost to thrive and perform in this next phase,” Dr. Jain said. “Because I’m not sure payers are necessarily going to continue to pay the same premiums per brand.”
In recent years, some larger employers have cut out the middlemen to strike deals directly with hospitals.
For example, General Motors entered into an arrangement with Detroit’s Henry Ford Health System in 2018, joining other major employers such as Walmart, Walt Disney and Boeing.
Perhaps most notably, J.P. Morgan, Amazon and Berkshire Hathaway joined forces to bend the cost of care in the U.S. Despite all the fanfare, the venture, named Haven, later fell apart, illustrating how difficult it is to change the nation’s healthcare system.
By circumventing traditional health insurers, companies are hoping they themselves can negotiate better deals.
But this latest study throws cold water on that strategy, at least in part. “Our study suggests that almost all employers, operating alone, simply do not have the market power to impose a threat of effective negotiation,” the paper found.
One of the paper’s main aims is to measure market power of hospitals and employers, and the results are striking. The average hospital market power far exceeds that of the employer in the 10 metropolitan areas researchers examined.
The average hospital market power was more than 80 times greater than that of the employer, putting into context just how askew the power dynamics are.
These employers are not wrong for wanting to strike out on their own, the researchers point out.
Many self-insured employers bear the insurance risk while entering into administrative services only arrangements with insurers which provide just that, administrative type services.
But insurers in these arrangements may not have any incentive to lower prices. The paper pointed to another working research paper that found ASO plans pay more for the same service, at the same hospital compared to those in fully insured arrangements.
“The empirical evidence suggests that insurers, because they lack the incentive, may not be negotiating lower prices for their ASO enrollees,” according to the study.
Even though employers may not have enough market power on their own, researchers offered up a solution: team up with state or local government employee groups to increase market power to obtain lower hospital prices.
El Camino Health severed ties with Anthem after pricing disputes forced the provider to kill its contract, making it the most recent in a cast of Bay Area systems to have troubles with the insurer, according to the Mountain View Voice.
Over the past decade, four systems, including Mountain View, Calif.-based El Camino, have had contract struggles with Anthem related to claims that the insurer is penny-pinching.
The result is a standoff, as Anthem has claimed in the past that regional healthcare costs are too high, explaining low service payment offers.
While Anthem provided annual payment increases, the rate El Camino requested would raise premiums and copays for businesses and families, the insurer told the Mountain View Voice. El Camino said Anthem’s terms are “well below” that of other insurers.
El Camino and Anthem are still negotiating, which could last up to between three and six months based on previous conflicts. Meanwhile, El Camino patients without critical healthcare needs are no longer in-network with Anthem.
The average number of new daily COVID-19 cases has increased 94 percent over the past two weeks, according to data from The New York Times, as worries over outbreaks climb nationwide.
The U.S. recorded a seven-day average of more than 23,000 daily cases on Monday, almost doubling from the average two weeks ago, as less than half of the total population is fully vaccinated.
Monday’s count of 32,105 newly confirmed cases pushed the seven-day average up from its Sunday level of more than 19,000 new cases — a 60 percent increase from two weeks prior.
All but four states — West Virginia, Maine, South Dakota and Iowa — have seen increased daily averages in the past 14 days, and the average in 16 states at least doubled in that period.
This comes as the highly transmissible delta variant was declared the dominant strain in the U.S. last week.
At the same time, vaccinations have stalled, with the daily rate reaching its lowest point during President Biden’s tenure on Sunday at slightly more than 506,000. Monday saw a small uptick in the average rate to more than 527,000 per day, according to Our World in Data.
The rise in case counts comes as the Centers for Disease Control and Prevention says just 48 percent of the total population is fully vaccinated. Officials have said fully vaccinated people are protected from the virus, while unvaccinated people are at much higher risk for serious illness and death.
This leaves a majority of Americans still vulnerable to the virus, particularly children under 12 years old, who are not authorized to get the vaccine. More than 56 percent of the eligible population aged 12 and older is fully vaccinated.
The Biden administration has strived to boost vaccination numbers over the past few months and signaled a new strategy focused on grassroots campaigning to promote the vaccine last week. The country fell short of the president’s goal to get 70 percent of adults at least one dose by the Fourth of July.
Increases in COVID-19 cases have previously signaled during the pandemic an upcoming rise in hospitalizations and deaths. The Times data shows that average deaths are still decreasing, but average daily hospitalizations are climbing, with a 16 percent increase from two weeks ago.
Still, case counts are much lower than the devastating peak that hit the U.S. in January, and experts say the country will not reach that level of infection again, as vulnerable populations have gotten vaccinated. Seventy-nine percent of those aged 65 and older are considered fully vaccinated.
Thousands of healthcare workers have waged strikes this summer to demand better staffing levels as the pandemic brought greater attention to what happens when a nurse must take care of more patients than they can reasonably handle.
In New York, a report from the attorney general that found nursing homes with low staffing ratings had higher fatality rates during the worst COVID-19 surges last spring helped spur legislators to pass a safe staffing law long-advocated for by the New York State Nurses Association.
While unions elsewhere face a steeper climb to win the success found in New York, through strikes and other actions, they’re attempting to get new staffing rules outlined in their employment contracts.
Most nursing strikes include demands for ratios, or limits on the number of patients a nurse can be required to care for, Rebecca Givan, associate professor in the School of Management and Labor Relations at Rutgers University, said.
“And employers are very anxious about that because it threatens their bottom line, so often when a compromise is found, it’s something that approaches a ratio but maybe has a bit more flexibility,” Givan said.
Some have been successful, like the 1,000 Chicago-area nurses at Stroger Hospital, Provident Hospital and Cook County Jail who waged a one-day strike on June 24 after negotiating with the county over a new contract for nearly eight months.
They reached a tentative agreement shortly after the strike, stipulating the hiring of 300 nurses, including 125 newly added positions throughout the system within the next 18 months.
The deal also includes wage increases to help retain staff, ranging from 12% to 31% over the contract’s four-year term, according to National Nurses United.
Meanwhile, 700 nurses at Tenet’s St. Vincent Hospital in Worcester, Massachusetts, have been on strike for over 100 days over staffing levels. Nurses represented by the Massachusetts Nurses Association have been trying to get an actual nurse-to-patient ratio outlined for specific units in their next contract.
The two sides haven’t come close to reaching a deal yet, and some nurses will travel to Tenet’s headquarters in Dallas on Wednesday in an attempt to appeal to corporate executives, according to MNA.
At the same time, federal lawmakers wrote to Tenet CEO Ron Rittenmeyer seeking details on the chain’s use of federal coronavirus relief funds amid the strike and alongside record profits it turned last year.
The hospital denied lawmakers’ claims in the letter that Tenet used federal funds to enrich executives and shareholders rather than meet patient and staff needs, saying in a statement it strongly objects to the “mischaracterization of the facts and false allegations of noncompliance with any federal program.”
The strike is currently the longest among nurses nationally in a decade, according to the union.
A number of other major hospital chains have contracts covering their nurses expiring this summer, including for-profit HCA Healthcare and nonprofit Sutter Health.
Unionized nurses at 10 HCA hospitals in Florida have reached a deal on a new collective bargaining agreement, though members still need to ratify it, according to National Nurses United. The details are still unclear.
And after joining NNU just last year, 2,000 nurses at HCA’s Mission Hospital in Asheville, North Carolina, ratified their first contract Saturday, which includes wage increases and the formation of a nurse-led staffing committee.
Newly-formed unions take an average of 409 days to win a first contract, according to an analysis from Bloomberg Law. In the healthcare industry, new unions take an average of 528 days to win a first contract, the longest among all sectors examined.
Across the country at Sutter’s California hospitals, disputes haven’t been so easily resolved. Healthcare workers at eight Sutter hospitals planned protests throughout July “to expose the threat to workers and patients caused by understaffing, long patient wait times and worker safety issues at Sutter facilities,” according to Service Employees International Union United Healthcare Workers West, which represents the workers.
Similar to the ongoing Tenet hospital strike, SEIU is highlighting Sutter’s profits so far this year and the federal relief funds it received.
The coronavirus spurred an unprecedented increase in telehealth utilization early last year. But early data from 2021 suggests demand is slowing as vaccinations ramp up and COVID-19 cases decrease across the U.S.
Fair Health has used its database of over 33 billion private claims records to analyze the monthly evolution of telehealth since May last year. Telehealth usage peaked among the privately insured population last April, before easing through September and re-accelerating starting in October, as the coronavirus found a renewed foothold in the U.S.
In January, virtual care claims made up 7% of all medical claim lines, but that fell to 5.9% in February, 5.6% in March and just 4.9% in April, suggesting a steady deceleration in telehealth demand.
The deceleration in April was seen in all U.S. regions, but was particularly pronounced in the South, Fair Health said, which saw a 12.2% decrease in virtual care claims.
The trend doesn’t bode well for the ballooning virtual care sector, which has enjoyed historic levels of funding during COVID-19. Just halfway through the year, 2021 has already blown past 2020’s record for digital health funding, with a whopping $14.7 billion. This latest data suggests dampening utilization could throw cold water on the red-hot marketplace.
And policymakers are still mulling how many telehealth flexibilities should be allowed after the public health emergency expires, expected at the end of this year. Virtual care enjoys broad support on both sides of the aisle and the Biden administration’s top health policy regulators, including CMS administrator Chiquita Brooks-LaSure, have said they support permanently adopting virtual care coverage waivers, but returned restrictions on telehealth access could also stymie use.
Fair Health also found that nationally, mental health conditions increased from 57% from all telehealth claims in March to 59% in April. That month, psychotherapeutic/psychiatric codes jumped nationally as a percentage of telehealth procedure codes, while evaluation and management codes dropped, suggesting a continued need for virtual access to mental health services, which can be some of the rarest and most expensive medical services to find in one’s own geographic area.
Also in April, acute respiratory diseases and infections increased as a percentage of claim lines nationally, and in the Midwest and South, while general signs and symptoms joined the top five telehealth diagnoses in the West. Both trends suggest a return to non-COVID-19 respiratory conditions, like colds and bronchitis, and more ‘normal’ conditions like stomach viruses, researchers said.
HENRY KOTULA 