Detroit Medical Center is laying off employees, and its parent company, Dallas-based Tenet Healthcare, is planning to sell or close four urgent care centers in the Detroit area, according toCrain’s Detroit Business.
Detroit Medical Center officials told Crain’s layoffs have occurred, but they declined to disclose the number of employees affected. Sources told Crain’s several hundred DMC employees have been laid off with more expected this year. Clinical staff, administrative assistants and employees at the management level were reportedly affected by the layoffs.
“Like many health systems locally and nationally, we continually evaluate and review our staffing needs, which have decreased due to reduced patient demand during the pandemic,” DMC said in a statement to Becker’s Hospital Review. “Our goal is to ensure we are strongly positioned to provide the highest quality and safest care to our patients while making the best use of our resources.”
Tenet is also planning to sell or close its four remaining MedPost urgent care centers in the Detroit area. Tenet has reached agreements to sell three of the urgent care centers in Bloomfield, Livonia and Southfield, Mich., to First Choice Urgent Care, a company spokesperson told Becker’s Hospital Review.
“We expect all employees in good standing to be offered positions to remain at the facilities upon completion of the sale, which we anticipate occurring in December,” the spokesperson told Becker’s.
The MedPost urgent care center in Rochester Hills, Mich., will close in December, the spokesperson said. Tenet may convert it to a physician office or other type of healthcare facility.
“We are committed to providing our full support and assistance to employees through the close, and facilitating opportunities for open roles at local Tenet facilities,” the spokesperson told Becker’s.
Tenet, a 65-hospital system, operated nine MedPost urgent care centers in the Detroit area at the beginning of the year. It closed five of the centers in April due to challenges linked to the COVID-19 pandemic. The MedPost urgent care centers are not part of DMC.
President-elect Joe Biden’s healthcare agenda: building on the ACA, value-based care, and bringing down drug prices.
In many ways, Joe Biden is promising a return to the Obama administration’s approach to healthcare:
Building on the Affordable Care Act (ACA) through incremental expansions in government-subsidized coverage
Continuing CMS’ progress toward value-based care
Bringing down drug prices
Supporting modernization of the FDA
Bolder ideas, such as developing a public option, resolving “surprise billing,” allowing for negotiation of drug prices by Medicare, handing power to a third party to help set prices for some life sciences products, and raising the corporate tax rate, could be more challenging to achieve without overwhelming majorities in both the House and the Senate.
Biden is likely to mount an intensified federal response to the COVID-19 pandemic, enlisting the Defense Production Act to compel companies to produce large quantities of tests and personal protective equipment as well as supporting ongoing deregulation around telehealth. The Biden administration also will likely return to global partnerships and groups such as the World Health Organization, especially in the area of vaccine development, production and distribution.
What can health industry executives expect from Biden’s healthcare proposals?
Broadly, healthcare executives can expect an administration with an expansionary agenda, looking to patch gaps in coverage for Americans, scrutinize proposed healthcare mergers and acquisitions more aggressively and use more of the government’s power to address the pandemic. Executives also can expect, in the event the ACA is struck down, moves by the Biden administration and Democratic lawmakers to develop a replacement. Healthcare executives should scenario plan for this unlikely yet potentially highly disruptive event, and plan for an administration marked by more certainty and continuity with the Obama years.
All healthcare organizations should prepare for the possibility that millions more Americans could gain insurance under Biden. His proposals, if enacted, would mean coverage for 97% of Americans, according to his campaign website. This could mean millions of new ACA customers for payers selling plans on the exchanges, millions of new Medicaid beneficiaries for managed care organizations, millions of newly insured patients for providers, and millions of covered customers for pharmaceutical and life sciences companies. The surge in insured consumers could mirror the swift uptake in the years following the passage of the ACA.
Biden’s plan to address the COVID-19 pandemic
Biden is expected to draw on his experience from H1N1 and the Ebola outbreaks to address the COVID-19 pandemic with a more active role for the federal government, which many Americans support. These actions could shore up the nation’s response in which the federal government largely served in a support role to local, state and private efforts.
Three notable exceptions have been the substantial federal funding for development of vaccines against the SARS-CoV-2 virus, Congress’ aid packages and the rapid deregulatory actions taken by the FDA and CMS to clear a path for medical products to be enlisted for the pandemic and for providers, in particular, to be able to respond to it.
Implications of Biden’s 2020 health agenda on healthcare payers, providers and pharmaceutical and life sciences companies
The US health system has been slowly transforming for years into a New Health Economy that is more consumer-oriented, digital, virtual, open to new players from outside the industry and focused on wellness and prevention. The COVID-19 pandemic has accelerated some of those trends. Once the dust from the election settles, companies that have invested in capabilities for growth and are moving forcefully toward the New Health Economy stand to gain disproportionately.
Shortages of clinicians and foreign medical students may continue to be an issue for a while
The Trump administration made limiting the flow of immigrants to the US a priority. The associated policy changes have the potential to exacerbate shortages of physicians, nurses and other healthcare workers, including medical students. These consequences have been aggravated by the pandemic, which dramatically curtailed travel into the US.
Healthcare organizations, especially rural ones heavily dependent on foreign-born employees, may find themselves competing fiercely for workers, paying higher salaries and having to rethink the structure of their workforces.
Providers should consider reengineering primary care teams to reflect the patients’ health status and preferences, along with the realities of the workforce on the ground and new opportunities in remote care.
Focus on modernizing the supply chain
Biden and lawmakers from both parties have been raising questions about life sciences’ supply chains. This focus has only intensified because of the pandemic and resulting shortages of personal protective equipment (PPE), pharmaceuticals, diagnostic tests and other medical products.
Investment in advanced analytics and cybersecurity could allow manufacturers to avoid disruptive stockouts and shortages, and deliver on the promise of the right treatment to the right patient at the right time in the right place.
Drug pricing needs a long-term strategy
Presidents and lawmakers have been talking about drug prices for decades; few truly meaningful actions have been implemented. Biden has made drug pricing reform a priority.
Drug manufacturers may need to start looking past the next quarter to create a new pricing strategy that maximizes access in local markets through the use of data and analytics to engage in more value-based pricing arrangements.
New financing models may help patients get access to drugs, such as subscription models that provide unlimited access to a therapy at a flat rate.
Companies that prepare now to establish performance metrics and data analytics tools to track patient outcomes will be well prepared to offer payers more sustainable payment models, such as mortgage or payment over time contracts, avoiding the sticker shock that comes with these treatments and improving uptake at launch.
Pharmaceutical and life sciences companies will likely have to continue to offer tools for consumers like co-pay calculators and use the contracting process where possible to minimize out-of-pocket costs, which can improve adherence rates and health outcomes.
View interoperability as an opportunity to embrace, not a threat to avoid or ignore
While the pandemic delayed many of the federal interoperability rule deadlines, payers and providers should use the extra time to plan strategically for an interoperable future.
Payers should review business partnerships in this new regulatory environment.
Digital health companies and new entrants may help organizations take advantage of the opportunities that achieving interoperability may present.
Companies should consider the legal risks and take steps to protect their reputations and relationships with customers by thinking through issues of consent and data privacy.
Health organizations should review their policies and consider whether they offer protections for customers under the new processes and what data security risks may emerge. They should also consider whether business associate agreements are due in more situations.
Plan for revitalized ACA exchanges and a booming Medicare Advantage market
The pandemic has thrown millions out of work, generating many new customers for ACA plans just as the incoming Biden administration plans to enrich subsidies, making more generous plans within reach of more Americans.
Payers in this market should consider how and where to expand their membership and appeal to those newly eligible for Medicare. Payers not in this market should consider partnerships or acquisitions as a quick way to enter the market, with the creation of a new Medicare Advantage plan as a slower but possibly less capital-intensive entry into this market.
Payers and health systems should use this opportunity to design more tailored plan options and consumer experiences to enhance margins and improve health outcomes.
Payers with cash from deferred care and low utilization due to the pandemic could turn to vertical integration with providers as a means of investing that cash in a manner that helps struggling providers in the short term while positioning payers to improve care and reduce its cost in the long term.
Under the Trump administration, the FDA has approved historic numbers of generic drugs, with the aim of making more affordable pharmaceuticals available to consumers. Despite increased FDA generics approvals, generics dispensed remain high but flat, according to HRI analysis of FDA data.
Pharmaceutical company stocks, on average, have climbed under the Trump administration, with a few notable dips due to presidential speeches criticizing the industry and the pandemic.
Providers have faced some revenue cuts, particularly in the 340B program, and many entered the pandemic in a relatively weak liquidity position. The pandemic has led to layoffs, pay cuts and even closures. HRI expects consolidation as the pandemic continues to curb the flow of patients seeking care in emergency departments, orthopedic surgeons’ offices, dermatology suites and more.
Lawmakers and politicians often use bold language, and propose bold solutions to problems, but the government and the industry itself resists sudden, dramatic change, even in the face of sudden, dramatic events such as a global pandemic. One notable exception to this would be a decision by the US Supreme Court to strike down the ACA, an event that would generate a great deal of uncertainty and disruption for Americans, the US health industry and employers.
The financial challenges caused by the COVID-19 pandemic have forced hundreds of hospitals across the nation to furlough, lay off or reduce pay for workers, and others have had to scale back services or close.
Lower patient volumes, canceled elective procedures and higher expenses tied to the pandemic have created a cash crunch for hospitals. U.S. hospitals are estimated to lose more than $323 billion this year, according to a report from the American Hospital Association. The total includes $120.5 billion in financial losses the AHA predicts hospitals will see from July to December.
Hospitals are taking a number of steps to offset financial damage. Executives, clinicians and other staff are taking pay cuts, capital projects are being put on hold, and some employees are losing their jobs. More than 260 hospitals and health systems furloughed workers this year and dozens of others have implemented layoffs.
Below are 11 hospitals and health systems that announced layoffs since Sept. 1, most of which were attributed to financial strain caused by the pandemic.
1. NorthBay Healthcare, a nonprofit health system based in Fairfield, Calif., is laying off 31 of its 2,863 employees as part of its pandemic recovery plan, the system announced Nov. 2.
2. Minneapolis-based Children’s Minnesota is laying off 150 employees, or about 3 percent of its workforce. Children’s Minnesota cited several reasons for the layoffs, including the financial hit from the COVID-19 pandemic. Affected employees will end their employment either Dec. 31 or March 31.
3. Brattleboro Retreat, a psychiatric and addiction treatment hospital in Vermont, notified 85 employees in late October that they would be laid off within 60 days.
4. Citing a need to offset financial losses, Minneapolis-basedM Health Fairview said it plans to downsize its hospital and clinic operations. As a result of the changes, 900 employees, about 3 percent of its 34,000-person workforce, will be laid off.
5. Lake Charles (La.) Memorial Health Systemlaid off 205 workers, or about 8 percent of its workforce, as a result of damage sustained from Hurricane Laura. The health system laid off employees at Moss Memorial Health Clinic and the Archer Institute, two facilities in Lake Charles that sustained damage from the hurricane.
6. Burlington, Mass.-based Wellforce laid off 232 employees as a result of operating losses linked to the COVID-19 pandemic. The health system, comprising Tufts Medical Center, Lowell General Hospital and MelroseWakefield Healthcare,experienced a drastic drop in patient volume earlier this year due to the suspension of outpatient visits and elective surgeries. In the nine months ended June 30, the health system reported a $32.2 million operating loss.
7. Baptist Health Floyd in New Albany, Ind., part of Louisville, Ky.-based Baptist Health, eliminated 36 positions. The hospital said the cuts, which primarily affected administrative and nonclinical roles, are due to restructuring that is “necessary to meet financial challenges compounded by COVID-19.”
8. Cincinnati-based UC Health laid off about 100 employees. The job cuts affected both clinical and non-clinical staff. A spokesperson for the health system said no physicians were laid off.
9. Mercy Iowa City(Iowa) announced in September that it will lay off 29 employees to address financial strain tied to the COVID-19 pandemic.
10. Springfield, Ill.-based Memorial Health Systemlaid off 143 employees, or about 1.5 percent of the five-hospital system’s workforce. The health system cited financial pressures tied to the pandemic as the reason for the layoffs.
11. Watertown, N.Y.-based Samaritan Healthannounced Sept. 8 that it laid off 51 employees and will make other cost-cutting moves to offset financial stress tied to the COVID-19 pandemic.
Last Friday, the CDC reported 99,750 new cases, a record high from the day before.
The United States reported its highest number of new COVID-19 cases in a single day on Friday as cases across the country have been rising since mid-September, according to the Centers for Disease Control and Prevention’s COVID-19 data tracker.
Last Friday, the CDC reported 99,750 new cases, a record high from the day before when there were 90,155 new cases.
The overall national percentage of positive COVID-19 tests increased from 6.6% from the week ending on Oct. 17 to 7.1% for the week ending on Oct. 24, according to the CDC’s weekly surveillance summary.
WHAT’S THE IMPACT
With the spike in cases, the U.S. now has 9,182,628 total COVID-19 cases, with 565,607 of these coming in the last week.
Hospitalization rates have also increased since September,according to the CDC’s weekly COVID-19 summary. In the most recent report, the COVID-19-related hospitalization rate was about 200 hospitalizations per 100,000 population.
States that are being hardest hit with the most cases in the last week are Illinois (44,570), Texas (42,480), Wisconsin (32,506), California (28,505) and Florida (28,149).
While hospitals in surge areas of Texas, South and North Dakota, Utah and Wisconsin are reportedly overwhelmed, The New York Times reported that the death rate for seriously ill COVID-19 patients has declined. At one New York hospital system, the report said, where 30% of coronavirus patients died in March, the death rate dropped to 3% by the end of June.
Racial minorities continue to be harder hit by the pandemic; the hospitalization rate for Hispanic or Latino people was approximately 4.4 times that of non-Hispanic whites. The rate was 4.3 times higher for non-Hispanic American Indian or Alaska Native and 4.2 times higher for non-Hispanic Black individuals compared with non-Hispanic whites.
COVID-19 deaths in the U.S. have remained fairly consistent at 700 to 800 deaths per week since the beginning of September. The current death toll sits at 230,383, according to the CDC.
THE LARGER TREND
Congress has been unable to agree on legislation for more relief funding that might help hospitals, as the Coronavirus Aid, Relief and Economic Security Act did.
The recent surge in cases marks the country’s third and highest peak. Meanwhile, as other countries began locking down after their own increases in COVID-19 cases, President Trump criticized the preventative measures as “draconian.”
This is only the beginning of a new wave of COVID-19 cases, according to public health officials. Dr. Anthony Fauci, the nation’s leading infectious disease expert, told The Washington Post, “We’re in for a whole lot of hurt,” as the winter months come closer. Former FDA Commissioner Dr. Scott Gottlieb warned on CBS News’ “Face the Nation” that Thanksgiving is going to be the point where the country will begin to see “exponential growth in a lot of states,” with December likely being the hardest hit month.
With what hospitals and health systems learned from the first wave of COVID-19, ensuring their medical supply chains are intact and their telehealth offerings remain easy to use will be critical. Other strategies from the CDC include creating a written and structured COVID-19 plan that includes communication, triage and visitor protocols.
While voter suppression efforts are making it harder to vote in places like Texas, Georgia and Florida, one strategy makes voting during the pandemic a little easier: voting from your hospital bed.
State rules and deadlines vary, but at least 38 states allow emergency absentee ballots for registered voters who unexpectedly cannot vote in person, including patients who are suddenly hospitalized.
Patients and family members staying with them are often surprised to learn that they can vote from the hospital, said Dr. Kelly Wong, resident physician in emergency medicine at the Warren Alpert Medical School of Brown University and founder of Patient Voting, a nonpartisan organization that helps hospitalized patients and family members vote.
As a medical student in her home state of South Dakota during the 2016 election, Wong noticed a surprising and potentially dangerous pattern: sick patients were delaying trips to the emergency room or arguing against being admitted to the hospital because they didn’t want to miss the chance to vote.
Wong thought patients shouldn’t have to choose between voting and their health.
But she didn’t know the process for registered voters to vote from the hospital; she didn’t even know there was a process. When she found it was possible, she realized how difficult it was to figure out how to do it.
She was not alone.
“The biggest barrier to patient voting is that they don’t know they can,” Wong said.
In 2018, she founded Patient Voting to close the knowledge gap—just in time for the midterm elections.
The group now publishes state-specific processes for all 50 states, and operates with volunteers in 38 states. They partner with 25 medical schools and 15 hospitals in eight states—including battleground states of Florida, Michigan and Pennsylvania where the 2020 presidential candidates are fighting for every vote.
Wong keeps the organization staunchly nonpartisan. Her motivation is to safeguard patients’ health.
“I joke that in a selfish way, this is a way that patients don’t have to leave the hospital,” Wong said. “If they can accomplish their priorities while staying in the hospital, that’s good for their health.”
This year, voting is a priority for many Americans.
“This is a really defining moment in our history,” said Dr. Sarah Welsh, medical director of the pediatric intensive care unit at Hasbro Children’s Hospital in Rhode Island. “It is our duty as citizens not only to vote ourselves, but to lift our heads up and realize that there are others around us that we interact with on a daily basis that would have limitations.”
Hospitalized patients, or those who are in and out of hospitals with chronic illnesses, may be especially vulnerable to being disenfranchised, according to Dr. Alison Hayward, faculty advisor and board member of Patient Voting and assistant professor of emergency medicine at Brown. “Those people need to have their voices heard because there are huge issues at stake that will really affect their lives.”
A Small Army
In June, Brown University medical students Katie Barry and Meghan McCarthy, both 23, signed on as national medical student coordinators for Patient Voting.
“We are really interested in helping to empower patients, especially those who otherwise might have their voices not heard or overlooked,” said Barry. She realized Covid-19 was not going to be gone by November. “I wanted to help out in any way I could.”
According to Barry and McCarthy, the current generation of doctors in training are especially focused on social determinants of health such as civil rights, housing, and food.
“Along with biology and science, there’s a big emphasis on the social factors that affect some patients’ health,” McCarthy said. “It’s hard to ignore once we get into the hospitals how all these factors affect your patients’ health.”
Barry agreed. “We realize now that in order to care for people, we need to do more than provide the medical care.”
Going Digital
Patient Voting is getting some help to spread the word about hospital-room voting. At Hasbro Children’s Hospital, Patient Voting is newly embedded into the interface patients use to watch TV and get health and hospital information.
GetWellNetwork, a patient engagement company that provides digital health technology and serves 10 million patients a year in 700 hospitals and clinics nationwide, operates that platform.
The company jumped on the opportunity to help enable parents vote so they wouldn’t have to leave their child’s bedside. GetWellNetwork incorporated Patient Voting into the platform within a day of hearing about the program.
“Our whole philosophy is to help people take an active role in their journey,” said Michael O’Neil, Jr., GetWellNetwork’s founder and CEO.
The company takes what is a typically powerless human experience and uses digital tools to “put the patient in the pilot’s seat,” O’Neil said.
Partnering to enable patient voting fits their philosophy. “It’s a perfect opportunity to spring into action and follow this notion of empowerment,” O’Neil said. “It just happens to be in the context of voting in this case.”
It’s Not Too Late
In the run-up to the election, Patient Voting has experienced a frenzy of requests for help, though it’s not clear how many people vote this way. After the 2018 midterms, Wong and her team contacted state boards of elections to gather such data; they found that most states do not track the number of ballots from hospitalized voters.
Wong herself is spending part of Monday requesting an emergency absentee ballot on behalf of a patient in Rhode Island. She wouldn’t be allowed to do that everywhere; in North Carolina, for example, healthcare employees are prohibited from witnessing emergency absentee ballots.
“I see how thankful people are when they’re able to get the information they needed to be able to vote,” said Hayward, who has been responding to patient and family inquiries. “It feels really good to be involved in a nonpartisan effort in this time…Everyone wants to be able to vote and to have their voice heard.”
President Trump vowed to overhaul the health care system, notably saying in one of his first post-election speeches that pharmaceutical companies were “getting away with murder” over their pricing tactics.
Yes, but: Four years later, not a lot has changed. If anything, the health care industry has become more financially and politically powerful, Axios’ Bob Herman reports.
“Most of the bigger ideas have either been stopped in the courts or just never got implemented,” said Cynthia Cox, a vice president at the Kaiser Family Foundation who follows the health care industry.
The administration killed its own regulationthat would have changed behind-the-scenes negotiations between drug companies and pharmacy benefit managers.
One of the most consequential drug proposals — tying Medicare drug prices to lower prices negotiated abroad — is not remotely close to going into effect.
Forcing drug companies to disclose prices in TV ads was a small gambit, and the courts ultimately struck down the idea.
The other side: The policies the administration has seen through, so far, have been relatively modest.
New rules could force hospitals and health insurers to disclose their secret prices. Hospitals have sued, although the courts are not sympathetic to their pleas, and health insurers still have two years before their rule could go into effect.
Between the lines:Health care has consistently raked in large sums of profit every year of Trump’s presidency. That has been especially true during the pandemic.
Since the Affordable Care Act (ACA) was signed into law a little more than a decade ago, it has fundamentally reshaped the American healthcare system. As the graphic below highlights, the far-reaching law expanded insurance coverage, increased consumer protections, led to new payment models, established minimum coverage standards, reformed the Indian Health Service—and even gave us calorie counts on menus, among myriad other things.
The fate of the ACA is once again in the Supreme Court’s hands—and the nine Justices, now including Amy Coney Barrett, are scheduled to hear arguments starting November 10th. Eighteen states with Republican leadership are asking the court to determine whether the individual mandate is constitutional without a financial penalty, and whether the mandate is severable from the rest of the law.
The process of unwinding a law that touches nearly every facet of the US healthcare system would mean a confusing and financially detrimental road ahead for many.Although we believe it’s unlikely that the entire law will be ruled unconstitutional, if it is—and no replacement legislation is passed—the effects could be devastating.
An estimated 21 million people would be at serious risk of losing their health insurance. This risk is magnified for Hispanic and Black Americans, who are also hardest hit by COVID-19. As many as 133M people with pre-existing conditions could face insurance disqualification or significantly higher premiums.
The lost coverage would result in a significant revenue hit for doctors and hospitals. While the impact would vary by state depending on Medicaid expansion terms, an Urban Institute report projects that total uncompensated care would grow an average of 78 percent for hospitals and 68 percent for physician services if the ACA is struck down. Although the Court is not expected to rule on the fate of the law until mid-2021, the direction and pace of future health reform legislation will be set by the ruling, under either a Trump or Biden administration.
A complete financial recovery for many organizations is still far away, findings from Kaufman Hall indicate.
For the past three years, Kaufman Hall has released annual healthcare performance reports illustrating how hospitals and health systems are managing, both financially and operationally.
This year, however, with the pandemic altering the industry so broadly, the report took a different approach: to see how COVID-19 impacted hospitals and health systems across the country. The report’s findings deal with finances, patient volumes and recovery.
The report includes survey answers from respondents almost entirely (96%) from hospitals or health systems. Most of the respondents were in executive leadership (55%) or financial roles (39%). Survey responses were collected in August 2020.
FINANCIAL IMPACT
Findings from the report indicate that a complete financial recovery for many organizations is still far away. Almost three-quarters of the respondents said they were either moderately or extremely concerned about their organization’s financial viability in 2021 without an effective vaccine or treatment.
Looking back on the operating margins for the second quarter of the year, 33% of respondents saw their operating margins decline by more than 100% compared to the same time last year.
Revenue cycles have taken a hit from COVID-19, according to the report. Survey respondents said they are seeing increases in bad debt and uncompensated care (48%), higher percentages of uninsured or self-pay patients (44%), more Medicaid patients (41%) and lower percentages of commercially insured patients (38%).
Organizations also noted that increases in expenses, especially for personal protective equipment and labor, have impacted their finances. For 22% of respondents, their expenses increased by more than 50%.
IMPACT ON PATIENT VOLUMES
Although volumes did increase over the summer, most of the improvement occurred in areas where it is difficult to delay care, such as oncology and cardiology. For example, oncology was the only field where more than half of respondents (60%) saw their volumes recover to more than 90% of pre-pandemic levels.
More than 40% of respondents said that cardiology volumes are operating at more than 90% of pre-pandemic levels. Only 37% of respondents can say the same for orthopedics, neurology and radiology, and 22% for pediatrics.
Emergency department usage is also down as a result of the pandemic, according to the report. The respondents expect that this trend will persist beyond COVID-19 and that systems may need to reshape their business model to account for a drop in emergency department utilization.
Most respondents also said they expect to see overall volumes remain low through the summer of 2021, with some planning for suppressed volumes for the next three years.
RECOVERY MEASURES
Hospitals and health systems have taken a number of approaches to reduce costs and mitigate future revenue declines. The most common practices implemented are supply reprocessing, furloughs and salary reductions, according to the report.
Executives are considering other tactics such as restructuring physician contracts, making permanent labor reductions, changing employee health plan benefits and retirement plan contributions, or merging with another health system as additional cost reduction measures.
THE LARGER TREND
Kaufman Hall has been documenting the impact of COVID-19 hospitals since the beginning of the pandemic. In its July report, hospital operating margins were down 96% since the start of the year.
As a result of these losses, hospitals, health systems and advocacy groups continue to push Congress to deliver another round of relief measures.
Earlier this month, the House passed a $2.2 trillion stimulus bill called the HEROES Act, 2.0. The bill has yet to pass the Senate, and the chances of that happening are slim, with Republicans in favor of a much smaller, $500 billion package. Nothing is expected to happen prior to the presidential election.
Braven Health teams two of the largest provider systems in New Jersey with one of the largest insurers in the state.
Hackensack Meridian Health and Horizon Blue Cross Blue Shield of New Jersey have teamed up as equal provider and payer owners of the newly-created Medicare Advantage business, Braven Health.
RJWBarnabas Health in New Jersey, is about to come onboard as a 10% minority owner, subject to state approvals.
“A lot of organizations have a provider and payer partnership,” said Patrick Young, president of Population Health at Hackensack. “The payer is still the payer and the provider is still the provider. This transcends that.”
While Medicare accounts for a large portion of hospital revenue – about 40% – providers do not reap the rewards that Medicare Advantage plans do.
“We don’t do well financially for care to a Medicare member because the rates are low,” said Young, who formerly worked for Aetna. “The Medicare population is the fastest growing, but there’s no advantage to being the provider. The only organizations making money are the insurers.”
Hackensack felt that getting into the insurance space specifically around Medicare was strategic for growth.
“Medicare is the fastest growing population,” Young said, adding, “It’s the fastest growing population we lose money on.”
Hackensack went looking for a payer partner in the complicated and highly regulated insurance market. The health system sent requests for proposals, looking not only for experience in the market, but for an organization whose value-based goals aligned with its own.
“We have value-based arrangements with all the major payers,” Young said.
It chose Horizon as its strategic partner.
Braven Health teams two of the largest provider systems in New Jersey with one of the largest insurers in the state.
Starting January 1, Braven Health’s Medicare Advantage plans will be available in eight counties: Bergen, Essex, Hudson, Middlesex, Monmouth, Ocean, Passaic and Union.
WHY THIS MATTERS
Insurers and pharmacies have long been elbowing into the healthcare space.
UnitedHealth Group has been buying physician practices and is reportedly one of the nation’s largest employers of doctors. CVS Health, owner of Aetna, launched Health Hubs within its pharmacies. Walmart recently announced an expansion of its health clinics.
The move by Hackensack could be seen as another battle in the arms race to regain competitive ground. But it also recognizes the need for providers to work collaboratively with payers to get claims and other data needed to improve outcomes and lower cost in the move to value-based care.
Joint ventures are the next logical progression of payment models, moving away from fee-for-service and toward value, shared risk and accountability arrangements.
The integration model of provider and payer isn’t new.
The Geisinger Health System, Highmark Health in Pennsylvania and Kaiser Permanente in California are three of the largest and best-known integrated systems.
Horizon competitors such as Aetna, Cigna and Oscar and other Blue plans such as Highmark are in provider/payer partnerships.
One of the nation’s largest nonprofit health systems, Ascension, and health payer Centene are also among the joint ventures offering Medicare Advantage plans. In 2018, there were about 28 joint venture plans in the United States, with at least nine of these offering MA plans, according to DRG.
BRAVEN HEALTH
Braven Health plans use Horizon BCBSNJ’s existing Medicare Advantage managed care networks, meaning that every doctor and hospital that participates in these networks will also be in-network for comparable Braven Health plans.
This gives Braven Health Medicare Advantage members access to more than 51,000 providers and 82 network hospitals in the Hackensack and RWJBarnabas systems in New Jersey.
As a Blue Cross Blue Shield plan, Braven Health’s members choosing a PPO plan will also have access to the BCBS national Medicare Advantage PPO network.
Braven is a separate legal entity with its own board. It also has a Practitioner Council, made up of physicians representing various specialties, that will provide recommendations to the Braven Health CEO and board of directors on ways to improve the plan from the practitioner’s perspective.
It’s still early in the open enrollment process, but so far Braven Health CEO Luisa Y. Charbonneau said she is encouraged by the response to the plans. Braven creates a closer, collaborative relationship for better health, based in part on the exchange of data, according to Charbonneau.
“You can make the best decisions when there is transparent data between all parties, as well as have innovation,” Charbonneau said. “I think we see across the United States, where physicians, providers and the insurer are all aligned to be patient-centered, that’s where we’re going to see the best outcomes and financial outcomes.”
THE LARGER TREND
Close to 40% of Medicare members now choose a Medicare Advantage plan over traditional Medicare, as the plans run by private insurers offer additional benefits and some, including Braven Health, are offering zero premiums in specific 2021 plans.
The market is only expected to grow as baby boomers age into retirement.
HENRY KOTULA 