Category Archives: High Deductible Health Plans

Hospital M&A spurs rising healthcare costs, MedPAC finds

Posted on by • Posted in 2020 Election Issues, American Hospital Association (AHA), Antitrust, Center for Medicare and Medicaid Services (CMS), Federal Trade Commission (FTC), Health Insurance Industry, Health Policy, Health System, High Deductible Health Plans, High Premiums, Horizontal Consolidation, Horizontal Integration, Hospital, Hospital Industry, Market Consolidation, Market Power, Medicare Payment Advisory Commission (MedPAC), Mergers & Acquisitions, Monopoly, Monopoly Behavior, Mortality, Out of Pocket Expenses, Quality, Quality of Care, Readmission, Vertical Consolidation, Vertical Integration • Leave a comment

https://www.healthcaredive.com/news/hospital-ma-spurs-rising-healthcare-costs-medpac-finds/566858/

Dive Brief:

  • Both vertical and horizontal hospital consolidation is correlated with higher healthcare costs, according to a congressional advisory committee on Medicare, in yet another study finding rampant mergers and acquisitions drive up prices for consumers.
  • The Medicare Payment Advisory Commission found providers with greater market share see higher commercial profit margins, leading to higher costs per discharge, though the direct relationship between market share and cost per discharge was not statistically meaningful itself.
  • MedPAC also found vertical integration between health systems and physician practices increases prices and spending for consumers. The top-down consolidation leads to higher prices for commercial payers and Medicare alike, as hospitals have more bargaining heft and benefit from Medicare’s payment hikes for hospital outpatient departments.

Dive Insight:

Hospital consolidation has become a major point of concern for policymakers, antitrust regulators and patient advocacy groups. A slew of prior studies have found unchecked provider M&A contributes to higher healthcare costs, with the brunt often borne by consumers in the form of higher premiums and out-of-pocket costs.

Since 2003, the number of “super-concentrated” markets has increased from 47% to 57%, according to the MedPAC analysis of CMS and American Hospital Association data. Those markets, with a high amount of consolidation, rarely see new providers enter, which stifles competition, and are rarely reviewed by the government.

There’s been little change in antitrust regulation since the 1980s and, though the Federal Trade Commission has won several challenges to hospital consolidation in the 2010s, the agency only challenges 2% to 3% of mergers annually.

MedPAC also found super-concentrated insurance markets actually led to lower costs per discharge compared to lower levels of payer concentration, deflating somewhat hospital lobbies’ arguments that payer consolidation is driving prices higher.

Committee members called for more analysis of how macro trends like an aging population and federal policy could be driving consolidation and impacting prices, leading some to call for a revamp of the hospital payment framework itself.

“We have to change the way hospitals are paid. I don’t see another solution,” said Brian DeBusk, CEO of Tennesse-based DeRoyal Industries, a medical manufacturer. “Are you going to undo a thousand hospital mergers? Are you going to enact rate setting? I don’t see another way.”

MedPAC also looked at vertical integration, where hospitals snap up physicians practices downstream. According to the Physician Advocacy Institute, only 26% of physician practices were owned by hospitals in 2012, but by last year that number had spiked to 44%.

Since 2012, billing has shifted from physician offices to hospital outpatient departments, especially in specialty practices. In chemotherapy administration, for example, physician offices saw almost 17% less volume between 2012 and 2018, while outpatient centers saw a 53% increase in volume, according to MedPAC.

Physicians in hospital-owned practices also refer more patients to the hospital’s facilities and, despite a common stumping point that integration improves quality through care coordination, its effect on quality is “ambiguous,” MedPAC analyst Dan Zabinski said Thursday at the committee’s November meeting.

Despite the mountain of evidence, the AHA published a widely-decried study in September claiming acquired hospitals see a reduction in operating expenses and a statistically significant drop in readmission and mortality rates. The study was criticized for not using actual claims data in its analysis among other methodological and conflict of interest concerns.

Republican leaders in the House Energy and Commerce Committee asked MedPAC to study provider consolidation in August, and the body’s full findings will be included in its March report to Congress.​

 

 

 

 

 

Health Care in 2019: Year in Review

Posted on by • Posted in 2020 Election Issues, ACA, Consumerism, Data Control, Data Management, Data Ownership, Data Privacy, Data Sharing, Disruption, Disruptive Technology, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Drug Prices, Lawsuit, Medicaid, Medicaid Expansion, Out of Pocket Expenses, Private Equity, Single Payer Health System, Single Payer Healthcare System, Supreme Court, Surprise Bills, Texas v. United States, Underinsured, Uninsured • Leave a comment

https://www.commonwealthfund.org/blog/2019/health-care-2019-year-review

Health care was front and center for policymakers and the American public in 2019. An appeals court delivered a decision on the Affordable Care Act’s (ACA’s) individual mandate. In the Democratic primaries, almost all the presidential candidates talked about health reform — some seeking to build on the ACA, others proposing to radically transform the health system. While the ACA remains the law of the land, the current administration continues to take executive actions that erode coverage and other gains. In Congress, we witnessed much legislative activity around surprise bills and drug costs. Meanwhile, far from Washington, D.C., the tech giants in Silicon Valley are crashing the health care party with promised digital transformations. If you missed any of these big developments, here’s a short overview.

 

1. A decision from appeals court on the future of the ACA: On December 18, an appeals court struck down the ACA’s individual mandate in Texas v. United States, a suit brought by Texas and 17 other states. The court did not rule on the constitutionality of the ACA in its entirety, but sent it back to a lower court. Last December, that court ruled the ACA unconstitutional based on Congress repealing the financial penalty associated with the mandate. The case will be appealed to the U.S. Supreme Court, but the timing of the SCOTUS ruling is uncertain, leaving the future of the ACA hanging in the balance once again.

 

2. Democratic candidates propose health reform options: From a set of incremental improvements to the ACA to a single-payer plan like Medicare for All, every Democratic candidate who is serious about running for president has something to say about health care. Although these plans vary widely, they all expand the number of Americans with health insurance, and some manage to reduce health spending at the same time.

 

3. Rise in uninsured: Gains in coverage under the ACA appear to be stalling. In 2018, an estimated 30.4 million people were uninsured, up from a low of 28.6 million in 2016, according to a recent Commonwealth Fund survey. Nearly half of uninsured adults may have been eligible for subsidized insurance through ACA marketplaces or their state’s expanded Medicaid programs.

 

4. Changes to Medicaid: States continue to look for ways to alter their Medicaid programs, some seeking to impose requirements for people to work or participate in other qualifying activities to receive coverage. In Arkansas, the only state to implement work requirements, more than 17,000 people lost their Medicaid coverage in just three months. A federal judge has halted the program in Arkansas. Other states are still applying for waivers; none are currently implementing work requirements.

 

5. Public charge rule: The administration’s public charge rule, which deems legal immigrants who are not yet citizens as “public charges” if they receive government assistance, is discouraging some legal immigrants from using public services like Medicaid. The rule impacts not only immigrants, but their children or other family members who may be citizens. DHS estimated that 77,000 could lose Medicaid or choose not to enroll. The public charge rule may be contributing to a dramatic recent increase in the number of uninsured children in the U.S.

 

6. Open enrollment numbers: As of the seventh week of open enrollment, 8.3 million people bought health insurance for 2020 on HealthCare.gov, the federal marketplace. Taking into account that Nevada transitioned to a state-based exchange, and Maine and Virginia expanded Medicaid, this is roughly equivalent to 2019 enrollment. In spite of the Trump administration’s support of alternative health plans, like short-term plans with limited coverage, more new people signed up for coverage in 2020 than in the previous year. As we await final numbers — which will be released in March — it is also worth noting that enrollment was extended until December 18 because consumers experienced issues on the website. In addition, state-based marketplaces have not yet reported; many have longer enrollment periods than the federal marketplace.

 

7. Outrage over surprise bills: Public outrage swelled this year over unexpected medical bills, which may occur when a patient is treated by an out-of-network provider at an in-network facility. These bills can run into tens of thousands of dollars, causing crippling financial problems. Congress is searching for a bipartisan solution but negotiations have been complicated by fierce lobbying from stakeholders, including private equity companies. These firms have bought up undersupplied specialty physician practices and come to rely on surprise bills to swell their revenues.

 

8. Employer health care coverage becomes more expensive: Roughly half the U.S. population gets health coverage through their employers. While employers and employees share the cost of this coverage, the average annual growth in the combined cost of employees’ contributions to premiums and their deductibles outpaced growth in U.S. median income between 2008 and 2018 in every state. This is because employers are passing along a larger proportion to employees, which means that people are incurring higher out-of-pocket expenses. Sluggish wage growth has also exacerbated the problem.

 

9. Tech companies continue inroads into health care: We are at the dawn of a new era in which technology companies may become critical players in the health care system. The management and use of health data to add value to common health care services is a prime example. Recently, Ascension, a huge national health system, reached an agreement with Google to store clinical data on 50 million patients in the tech giant’s cloud. But the devil is in the details, and tech companies and their provider clients are finding themselves enmeshed in a fierce debate over privacy, ownership, and control of health data.

 

10. House passes drug-cost legislation: For the first time, the U.S. House of Representatives passed comprehensive drug-cost-control legislation, H.R. 3. Reflecting the public’s distress over high drug prices, the legislation would require that the government negotiate the price of up to 250 prescription drugs in Medicare, limit drug manufacturers’ ability to annually hike prices in Medicare, and place the first-ever cap on out-of-pocket drug costs for Medicare beneficiaries. This development is historic but unlikely to result in immediate change. Its prospects in the Republican–controlled Senate are dim.

 

 

 

Trading high deductibles for narrow networks

Posted on by • Posted in Employees, Employer-Based Health Insurance, Employers, Health Insurance Benefit Design, Health Insurance Coverage Adequacy, High Deductible Health Plans, Labor Spend Management, Labor Union, Narrow Network, Out of Network, Out of Pocket Expenses • Leave a comment

https://mailchi.mp/f3434dd2ba5d/the-weekly-gist-december-20-2019?e=d1e747d2d8

Related image

For many employers, narrowing provider networks has been a bridge too far, despite unrelenting healthcare cost growth.

A recent Los Angeles Times profile of a Boston union that was able not only to lower costs but also nearly eliminate employee cost-sharing may make doubters reconsider. Unite Here Local 26, which represents 9,000 hotel workers and their families, implemented a narrow network health plan in 2013, when two-thirds of its members agreed to forego care at certain marquee academic hospitals, which charged two to three times more than others in the Boston area.

Today the union actually pays less in medical costs per member than it did six years ago, and premiums are ten percent lower than the national average, despite Boston being one of the highest-cost healthcare markets in the country. Employees pay no deductibles, and generic medications cost them only $1. Savings have translated into raises for many employees, with some low-income workers seeing a pay jump of up to 39 percent across six years.

As we’ve discussed in the past, employers are reaching a limit on how high they can push deductibles, especially in a tight labor market. Some are beginning to experiment with various network options that lower health care costs—but many have been reticent to change benefit design in any way that could be perceived as narrowing choice.

Local 26’s experience shows that well-designed narrow networks, implemented with employee education and buy-in, can provide cost relief for both businesses and individuals that can be sustained over time.

 

 

A look at what lies under the (high) deductible

Posted on by • Posted in 2020 Election Issues, Cost Management, Cost Reduction, Deductible, Health Insurance Coverage Adequacy, Health Policy, Health System, High Deductible Health Plans, Hospital, Hospital Industry, Out of Network, Out of Pocket Expenses, Price Transparency, Pricing, Underinsured, Uninsured • Leave a comment

https://mailchi.mp/f3434dd2ba5d/the-weekly-gist-december-20-2019?e=d1e747d2d8

 

With the continued growth in high deductible health plans (HDHPs) in both employer- and exchange-based insurance markets, a larger number of services are falling “under the deductible”, leaving patients responsible for the full cost of care. 

The graphic above illustrates the national cost ranges of ten common outpatient services, based on data from a publicly-available commercial claims database. It’s not just minor services like lab tests or diagnostic imaging that are falling under the deductible—many consumers are now paying full freight for a growing list of outpatient procedures like cataract or carpal tunnel surgery, or even knee arthroscopy.

Shopping can pay off: for any service, the highest-priced provider can be over three times the lowest-priced, translating into thousands of dollars of savings for patients with high-deductible plans.

Outpatient services now account for over half the revenue of many health systems. As deductibles climb, more and more of the (profitable) health system services are becoming “shoppable” for consumers—creating an imperative for systems to both lower costs and pursue rational pricing as scrutiny becomes more intense.

 

 

Obamacare Ruling May Spare Republicans Some Political Pain

Posted on by • Posted in 2020 Election Issues, ACA, Contingency Planning, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Drug Prices, Market Uncertainty, Medicaid, Medicaid Expansion, Preexisting Conditions, Supreme Court, Texas v. United States, Underinsured, Uninsured • Leave a comment

Image result for Obamacare Ruling May Spare Republicans Some Political Pain

The practical effect of the decision is likely to be months of delays, pushing the final outcome of the case beyond the 2020 election.

A federal appeals court in New Orleans handed Republicans a Christmas present.

The court had been considering a case with the potential to dismantle the entire Affordable Care Act, an outcome that could have set off waves of chaos and disruption leading up to the November election, and for which there was very little contingency planning.

 

The court had two main options. It could have agreed with the Trump administration, along with a set of Republican state officials and a district court in Texas, and overturned all of the law. Or it could have upheld Obamacare, undermining the arguments of the White House and its allies.

The court found a third way. In a decision at the close of business Wednesday, two of the three judges signaled their support for a key part of the Republicans’ legal argument. The two agreed with a lower court that Obamacare’s individual mandate had been made unconstitutional by a 2017 law that eliminated the financial penalty for remaining uninsured. But the judges punted on the case’s key question of what that meant for the rest of the health law, asking a lower court to reconsider it. The effect is likely to be months of delays, pushing the final outcome of the case beyond the 2020 election.

 

Starting in 2017, the Republicans’ failed effort to repeal and replace large portions of the health law was deeply unpopular and became a central campaign theme of the 2018 election, in which Democrats won a House majority. Democrats cast themselves as the protectors of Obamacare’s most popular provisions, especially its protections for Americans with pre-existing health conditions.

While most Democrats would have favored a court ruling that upheld Obamacare, a reprise of those politics could have given them a lift in an election year. Voters tend to trust Democrats more than Republicans on health care, but much of the debate during the primary season has focused on ambitious new expansions of government coverage. Those proposals do not enjoy the widespread support attached to the preservation of Obamacare’s core consumer protections.

Those dynamics have allowed Republicans to focus on arguments that they will protect private insurance and oppose socialism, without forcing them to articulate their own detailed health plans. President Trump has periodically hinted at an imminent Obamacare replacement plan, but he has yet to produce one. Mitch McConnell, the Senate majority leader, has declined to produce or advance a major health care bill in the Senate.

 

But if a court had ruled that all of Obamacare had to be wiped off the books, it would have been far harder for Republicans to avoid articulating their vision for health care. The public did not like their previous attempts in 2017, and there has been little progress, even behind the scenes, to produce an alternative plan more palatable to the public. Two concepts have emerged since then, one from a group of conservative think tanks, and one from the House Republican Study Committee. Neither has received much public attention by party leaders, and both share the basic structure of an earlier legislative plan that divided Republican legislators so much that it never made it to a vote.

Meanwhile, Democrats could have retreated to safer ground, by promising to reinstate popular Obamacare provisions.

 

If the court had overturned all of Obamacare, it could have meant major disruptions to the health system. Such a ruling, if upheld by the Supreme Court, would have eliminated consumer protections for people with pre-existing health conditions, and wiped away financial assistance that have helped millions of middle-class Americans buy their own coverage.

It would have erased the Medicaid expansion, which provides health insurance to millions of low-income Americans in three dozen states. It would have reversed Medicare policies that make prescription drugs more affordable for seniors, and Food and Drug Administration rules that have allowed cheaper copies of expensive biologic drugs to enter the market.

It would have undone major experiments in the delivery of care, meant to improve health care quality. It would have rolled back enhanced punishments for Medicare fraud. It would have reduced requirements that workplaces provide space for lactating mothers to pump breast milk, and requirements that chain restaurants post calorie counts for their food.

Around 20 million more Americans would have become uninsured, according to an estimate from the Urban Institute. Experts on Medicare policy said they were not even sure how some of the changes could have been carried out now that they have been enshrined in complex regulations and built on in subsequent laws.

 

None of those effects would have happened immediately, even if the Fifth Circuit had agreed in full with the lower court; the Supreme Court would have probably weighed in. But the prospect of such huge changes had the potential to reset the political conversation about health care in both parties. By avoiding a decision on the case’s consequences, the Fifth Circuit has effectively postponed that shift.

In a statement Wednesday night, President Trump applauded the court’s ruling that the individual mandate was unconstitutional. But he emphasized that the decision would not result in any meaningful changes to voters’ health care.

“The radical health care changes being proposed by the far left would strip Americans of their current coverage,” he said. “I will not let this happen. Providing affordable, high-quality health care will always be my priority. They are trying to take away your health care, and I am trying to give the American people the best health care in the world.”

 

Such a statement would have been harder to issue if the court panel had agreed with the arguments made by Mr. Trump’s lawyers and called for the reversal of Obamacare’s coverage expansions.

Democrats’ frustration with the court’s indecision was palpable. Chuck Schumer, the Senate minority leader, described the judges’ move as “cowardly.” The decision is “obviously an attempt to shield Republicans from the massive blowback they would receive from the public if the highest court in the land were to strike down the A.C.A. before the upcoming election,” he said in a statement.

It’s possible, of course, that the case will reach a final disposition sooner anyway. California’s attorney general, Xavier Becerra, announced that he and other Democratic state officials involved in the case would be appealing the decision to the Supreme Court. Even though the appellate court sent the case back to Texas, the country’s highest court could still choose to take it, should four justices wish to. But the most likely path involves months or years of additional litigation, with lingering uncertainty over the fate of Obamacare.

 

 

 

Number of Americans with a primary care provider declined 2% over a decade, new study shows

Posted on by • Posted in Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, Out of Pocket Expenses, Primary Care, Underinsured, Uninsured • Leave a comment

https://www.fiercehealthcare.com/practices/moving-wrong-direction-fewer-americans-have-a-primary-care-provider-new-study-shows?mkt_tok=eyJpIjoiTTJOalpXTXdOV0ZoWkdGbCIsInQiOiJZMlwvUGpSNHhPVGp6ZkdVdkhmSXdza2hJcElGRTJiTDNjWGR0ZnFsOFc4K0Q1eExXR3ZBNWpsTVZ3cmVhRGlMZ1VaOTVyTUlWd2NWQmVPYlBMUkFkTzV0WGNjRWxuNHhuZUFUTVY0dDdsUlwvczdmd0VHVHBBb013b25LMEx5YzhXIn0%3D&mrkid=959610

social determinants

Despite the health benefits, fewer Americans have a primary care provider, according to a new study.

The number of patients in the U.S. who have a primary care provider declined by 2% in a little over a decade, according to the study published in JAMA Internal Medicine.

While that may not sound like much, that decline translates to millions of Americans who do not have primary care, the researchers said.

In the study, researchers from Harvard Medical School looked at primary care use from 2002 to 2015, which raises concerns given that primary care is associated with better health among patients.

“Primary care is the thread that runs through the fabric of all healthcare, and this study demonstrates we are potentially slowly unweaving that fabric,” said the lead author David M. Levine, M.D., a Harvard Medical School instructor in medicine at Brigham and Women’s Hospital in Boston, where he practices internal medicine and primary care, in an announcement about the study.

“America is already behind the curve when it comes to primary care; this shows we are moving in the wrong direction,” Levine said.

The study found that in 2002, 77% of adult Americans had an identified primary care physician, a level that dropped to 75% in 2015. In addition, the study found a particularly marked decline in primary care among younger Americans and those without complex medical issues.

Having a primary care provider decreased across the board for Americans in their 30s, 40s, and 50s. Among 30-year-olds, the number dropped from 71% to 64% from 2002 to 2015.

Among those with no complex conditions, having primary care declined in every decade of age through their 60s. The exception to the decline were less healthy patients. People with three or more chronic health conditions having a primary care physician remained relatively stable, the study found.

Patients who are male, Latino, black or Asian without insurance and lived in the South were much less likely to have a primary care doctor, the study found.

The researchers suggested several steps to stop the decline and increase the rates of Americans with primary care providers, including changes in the primary care payment system, a move toward value-based care and investments in new technology. They also called for creating incentives to encourage more physicians to choose primary care, particularly in rural areas, and increasing the number of Americans with health insurance.

“To improve Americans’ health, we should prioritize investments to reinvigorate the American primary care system,” said senior author Bruce E. Landon, M.D., professor of healthcare policy in the Blavatnik Institute at Harvard Medical School and professor of medicine at Beth Israel Deaconess Medical Center, where he practices internal medicine.

A study released earlier this year from the Patient-Centered Primary Care Collaborative found states that spend more on primary care have better patient outcomes, including fewer hospitalizations and emergency department visits. A separate study found a direct link between the number of primary care doctors and an increase in life expectancy.

 

 

 

Private insurance’s costs are skyrocketing

Posted on by • Posted in 2020 Election Issues, Health Insurance Industry, Health Policy, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Highly Specialized Drugs, Out of Pocket Expenses, Underinsured, Uninsured • Leave a comment

https://www.axios.com/health-insurance-costs-private-medicare-medicaid-c40bb6f1-c638-4bc3-9a71-c1787829e62e.html?utm_source=The+Fiscal+Times&utm_campaign=7d18fa690b-EMAIL_CAMPAIGN_2019_12_16_10_26&utm_medium=email&utm_term=0_714147a9cf-7d18fa690b-390702969

Image result for Private insurance's costs are skyrocketing

The cost of private health insurance is out of control, compared to Medicare and Medicaid. You see that clearly if you take a long-term view of recently released federal data on health spending.

Why it matters: This is why the health care industry — not just insurers, but also hospitals and drug companies — is so opposed to proposals that would expand the government’s purchasing power. And it’s why some progressives are so determined to curb, or even eliminate, private coverage.

By the numbers: Per capita spending for private insurance has grown by 52.6% over the last 10 years.

  • Per-capita spending for Medicare grew by 21.5% over the same period, and Medicaid 12.5%.

Private insurance generally pays higher prices for care than Medicare, which generally pays more than Medicaid.

  • There’s a long-running debate about whether public programs deliver efficiency because of their purchasing power, or simply underpay.
  • Democrats have proposed a variety of steps to curb health care costs, including cutting payments for out-of-network care, competition from a public insurance plan, and steep payment cuts through Medicare for All.
  • Industry opposes most of them.

The bottom line: The industry knows cutting government spending can only go so far. Any effort to rein in health care costs will have to confront the growth in the cost of private insurance.

 

 

 

43% of U.S. Households Report Preexisting Conditions

Posted on by • Posted in 2020 Election Issues, ACA, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, Out of Pocket Expenses, Preexisting Conditions, Underinsured, Uninsured • Leave a comment

https://news.gallup.com/poll/269003/households-report-preexisting-conditions.aspx

43% of U.S. Households Report Preexisting Conditions

STORY HIGHLIGHTS

  • 15% say they themselves have a preexisting health condition
  • 9% say they and someone else in their household have preexisting conditions
  • 19% say a family member has a preexisting condition

About one in four Americans (24%) report that they personally (15%) or they and a member of their household (9%) “have a long-term medical condition, illness or disease that would be considered a ‘preexisting’ condition by a health insurance company.” Factoring in the additional 19% who say another family member has such an illness or disease, the total percentage of U.S. households in which at least one member reports having a preexisting condition is 43%.

Americans’ Reports of Preexisting Medical Conditions in Their Household, 2018-2019
Do you, personally, or does another member of your family living with you, have a long-term medical condition, illness or disease that would be considered a “pre-existing condition” by a health insurance company?
Nov 1-11, 2018 Nov 1-14, 2019
% %
Respondent 16 15
Respondent and a family member 11 9
Family member 17 19
No one in family 54 57
GALLUP

These data are from Gallup’s annual Health and Healthcare survey, conducted Nov. 1-14, and are based on respondents’ self-reports. The survey does not probe about the nature of a respondent’s preexisting condition. Definitions of such conditions vary because individual insurance companies primarily determine what qualifies as a preexisting condition and what does not. They can include cancer or heart disease, but also asthma, high blood pressure or obesity.

Protecting individuals with preexisting conditions from being denied coverage by their insurers was a key tenet in Democrats’ campaign for and passage of the Affordable Care Act in 2010. It became a powerful election-year issue in the 2018 midterms for Democrats after President Donald Trump and Republicans in Congress tried to repeal the law. Gallup has found that Americans who report having a preexisting condition are somewhat more approving of the ACA than are those who do not report having such a condition.

Age Is the Biggest Differentiator in Reported Preexisting Conditions

Across key demographic groups, age stands out as the biggest factor in self-reports of preexisting conditions; the older individual Americans are, the more likely they are to report having one. About one in three adults aged 65 and older (33%) and 50 to 64 (31%) report having a preexisting condition — a rate about twice as high as what young adults aged 18 to 29 report (16%).

Aggregated data from Gallup’s 2018 and 2019 measures reveal other key differences across subgroups:

  • About a third of U.S. adults who are overweight report having a preexisting condition (32%) — much higher than the 21% among those whose self-reported weight is normal or underweight.
  • U.S. whites (29%) are more likely to report having such an illness or disease than are nonwhites (20%).
  • Women (29%) report having a preexisting condition at a higher rate than do men (21%).
  • U.S. adults living in low- (26%) and middle-income households (29%) are more likely to report having a preexisting condition than are those in upper-income households (21%).
Incidence of Preexisting Medical Conditions, Based on Self-Reported Data, by Subgroup
Do you, personally, or does another member of your family living with you, have a long-term medical condition, illness or disease that would be considered a “pre-existing condition” by a health insurance company?
Respondent personally Respondent or family member
% %
65+ years old 33 50
Overweight 32 50
50-64 years old 31 49
Democrat 31 50
Women 29 49
White 29 46
Middle household income ($40,000-$99,999/year) 29 45
Lower household income (less than $40,000/year) 26 43
Independent 24 42
30-49 years old 23 40
Republican 22 40
Men 21 38
Upper household income ($100,000 or more/year) 21 45
Normal weight/Underweight 21 39
Nonwhite 20 38
18-29 years old 16 38
Data aggregated from 2018 and 2019 polls
GALLUP

Across political party groups, Democrats (31%) are more likely to report having a preexisting condition than are independents (24%) and Republicans (22%). A Gallup analysis finds that across age and weight groups, Democrats are more likely than Republicans to report having a preexisting condition. This might suggest that some respondents are answering the question through a political lens — with Democrats more sensitive to the issue of preexisting conditions and therefore more likely to report having one, and Republicans more inclined to downplay the issue and less likely to report having such a condition themselves.

Bottom Line

As many Americans shop for healthcare plans in the current ACA open enrollment period, a sizable percentage of them will need to navigate a market that includes plans that may not provide them with coverage for preexisting conditions. The Trump administration is encouraging consumers currently on the ACA individual market to seek out short-term private plans that in many cases do not protect those with preexisting conditions. These new, non-ACA plans are now available during the ACA’s seventh annual open enrollment period after the administration loosened restrictions on them last year in an effort to offer more affordable alternatives to ACA plans.

The ACA’s provision on preexisting conditions has survived many challenges. Public officials of both major political parties have expressed commitment to the issue and have offered various plans to protect Americans with preexisting conditions from being denied coverage. But Americans have been lukewarm about the law that made the largest breakthrough on the issue — though it is a bit more popular among those who report having a preexisting condition themselves.

 

 

 

Benefit design, higher deductibles will increase bad debt for hospitals

Posted on by • Posted in 2020 Election Issues, Bad Debt Expense, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Plan, Health Policy, Health System, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Hospital, Hospital Industry, Out of Pocket Expenses, Underinsured, Uninsured • Leave a comment

https://www.healthcarefinancenews.com/node/139468

Legislative proposals could reduce bad debt, but would likely introduce additional complexity to billing processes.

Changes in insurance benefit design that shift greater financial responsibility to the patient, rising healthcare costs and confusing medical bills will continue to drive growth in bad debt — often faster than net patient revenue, according to a new report from Moody’s.

Legislative proposals to simplify billing have the potential to reduce bad debt, but the downside for hospitals is that they’ll likely introduce additional complexity to billing processes and complicate relationships with contracted physician groups. A recent accounting change will reduce transparency around reporting bad debt.

Higher cost sharing and rising deductibles are the main contributors to the trend of patients assuming greater financial responsibility, a trend that’s been occurring for more than a decade, and that will further increase the amount of uncollected payments. Hospitals and providers are responsible for collecting copays and deductibles from patients, which may not always be possible at the time of service; the longer the delay between providing service and collecting payment, the less likely a hospital is to collect payment.

On top of that, the higher an individual’s deductible is, the greater the share of reimbursement that a hospital has to collect. The prevalence of general deductibles increased to 85% of covered workers in 2018, up from 55% in 2006, and the amount of the annual deductible almost tripled in that time to an average of $1,573.

Multiple factors are driving the trend toward higher cost sharing, including a desire among employees and employers for stable premium growth despite steadily rising healthcare costs and the growing popularity of high deductible health plans.

WHAT’S THE IMPACT

Hospitals face an uphill battle when it comes to reducing bad debt. Strategies include point-of-service collections, enhanced technology to better estimate a patient’s responsibility for a medical bill, and offering low-cost financing or payment plans.

A common feature of these approaches is educating patients about what portion of a medical bill is their responsibility, after taking into account the specifics of their insurance plan. But hospitals often find it hard to provide reliable cost estimates for a given service, which can thwart efforts to provide patients with an accurate estimate of their financial responsibility.

One difficulty is that medical bills partly depend on the complexity of service and amount of resources consumed — which may not be known ahead of time. There’s also the need to incorporate specific benefits of the patient’s own insurance plan. A certain amount of bad debt is likely to arise from patients accessing emergency care given the insufficient time to determine insurance coverage.

Another difficulty in billing is surprise medical bills, received by insured patients who inadvertently receive care from providers outside their insurance networks, usually in emergency situations. While the term “surprise medical bills” refers to a specific, narrow slice of healthcare costs, they have become part of the broader debate about the affordability and accessibility of U.S. healthcare.

THE LARGER TREND

To minimize surprise bills, Congress is considering proposals to essentially “bundle” all of the services a patient receives in an emergency room into a single bill. Under a bundled billing approach, the hospital would negotiate a set charges for a single or “bundled” episode of care in the emergency room. The hospital would then allocate payments to the providers involved.

This approach, which major hospital and physician trade groups oppose, has the potential to significantly affect hospitals and disrupt the business models of physician staffing companies, according to Moody’s. Many hospitals outsource the operations and billing of their emergency rooms or other departments to staffing companies. Bundling services would require a change in the contractual relationship between hospitals and staffing companies.

Another recent proposal in Congress would require in-network hospitals to guarantee that all providers operating at their facilities are also in network. This approach adds significant complexity because many physicians and ancillary service providers are not employed or controlled by the hospitals where they work. Some hospitals would likely seek to employ more physicians, leading to increases in salaries, benefits and wages expense.

 

A stunning indictment of the U.S. health-care system, in one chart

Posted on by • Posted in 2020 Election Issues, Access, Access & Quality of Healthcare, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Out of Pocket Expenses, Underinsured, Uninsured • Leave a comment

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Americans are putting off medical treatment in record numbers because of cost, Gallup data shows

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One quarter of American adults say they or a family member has put off treatment for a serious medical condition because of cost, according to data released this week by Gallup. That number is the highest it’s been in nearly three decades of Gallup polling.

An additional 8 percent have made the same choice for less serious ailments, the survey showed. That means a collective 33 percent of those polled have prioritized financial considerations over their health, tying the high set in 2014.

The report also shows a growing income gap in cost-related delays. In 2016, for instance, one-fourth of U.S. households earning less than $40,000 a year reported cost-related delays, vs. 13 percent for households making more than $100,000. In 2019, the rate of cost-related delays among poorer households shot up to 36 percent, while the rate for the richer group remained at 13 percent.

Gallup cautions that the Trump presidency may be influencing these numbers on a partisan level: From 2018 to 2019, the share of Democrats reporting cost-related delays for serious conditions jumped from 22 percent to 34 percent. Among Republicans, the year-over-year increase was more subdued, from 12 percent to 15 percent.

Gallup data also show Democrats (31 percent) self-report higher rates of preexisting conditions than Republicans (22 percent).

“Whether these gaps are indicative of real differences in the severity of medical and financial problems faced by Democrats compared with Republicans or Democrats’ greater propensity to perceive problems in these areas isn’t entirely clear,” according to Gallup’s Lydia Saad. “But it’s notable that the partisan gap on putting off care for serious medical treatment is currently the widest it’s been in two decades.”

Data from the Kaiser Family Foundation’s Employer Health Survey underscores the severity of the health-care spending problem. In 2019, 82 percent of covered workers must meet a deductible before health-care coverage kicks in, up from 63 percent a decade ago. “The average single deductible now stands at $1,655 for workers who have one,” according to KFF, “similar to last year’s $1,573 average but up sharply from the $826 average of a decade ago.”

Deductibles have surged 162 percent since 2009, data show — more than six times the 26 percent climb in earnings over the same period.

There are many factors driving up the cost of care for most American families. Administrative costs are a big part of the issue: Health insurance is largely a for-profit industry, meaning insurance companies and their shareholders are reaping a percentage of your deductibles and co-pays as profit.

Many hospitals, too, are raking in profits. In recent years, surprise billing practices and outrageous markups for simple drugs and services have drawn the ire of lawmakers looking for ways to reduce health-care spending.

Physician pay is another significant expense. The Commonwealth Fund, a health-care research group, estimates American doctors earn “nearly double the average salary” of doctors in other wealthy nations. The American Medical Association, a trade group representing doctors, has a long history of opposing efforts to implement European-style single-payer health-care systems in the United States.

The American health-care system, in other words, works pretty well for the powerful players in the health-care industry. Hospitals and insurance companies are reaping significant profits. Doctors are earning high salaries. But what are the rest of us getting in return for our ever-growing co-pays and deductibles?

The national Centers for Disease Control and Prevention has an answer, and it’s an indictment of our health-care system: The United States is in the midst of the longest sustained drop in life expectancy in at least 100 years. Relative to other wealthy countries, lives in America are short and getting shorter.

The disparities domestically are perhaps even more shocking: In the nation’s wealthiest places, where the high cost of modern health care remains within relatively easy reach, life expectancies are literally decades longer than in America’s poorest places.

As health care becomes more expensive and economywide inequalities more pronounced, these disparities in life span are likely to get worse — and the share of Americans skipping out on much-needed medical care only likely to grow.