Notes for the 39th Annual J.P Morgan Healthcare Conference, 2021

https://www.sheppardhealthlaw.com/articles/healthcare-industry-news/

2021 JP Morgan Healthcare Conference | Zoetis

Sitting in the dark before 6 am in my Los Angeles house with my face lit up by yet another Zoom screen, wearing a stylish combination of sweatpants, dress shirt and last year’s JPM conference badge dangling around my neck for old times’ sake, I wonder at the fact that it’s J.P. Morgan Annual Healthcare Conference week again and we are where we are. Quite a year for all of us – the pandemic, the healthcare system’s response to the public health emergency, the ongoing fight for racial justice, the elections, the storming of the Capital – and the subject of healthcare winds its way through all of it – public health, our healthcare system’s stability, strengths and weaknesses, the highly noticeable healthcare inequities, the Affordable Care Act, Medicaid and vaccines, healthcare politics and what the new administration will bring as healthcare initiatives.

I will miss seeing you all in person this year at the J.P. Morgan Annual Healthcare Conference and our annual Sheppard Mullin reception – previously referred to as “standing room only” events and now as “possible superspreader events.” What a difference a year makes. I admit that I will miss the feeling of excitement in the rooms and hallways of the Westin St. Francis and all of the many hotel lobbies and meeting rooms surrounding it. Somehow the virtual conference this year lacks that je ne sais quoi of being stampeded by rushing New York-style street traffic while in an antiquated San Francisco hotel hallway and watching the words spoken on stage transform immediately into sharp stock price increases and drops. There also is the excitement of sitting in the room listening to paradigm shifting ideas (teaser – read the last paragraph of this post for something truly fascinating). Perhaps next year, depending on the vaccine…

So, let’s start there. Today was vaccine day at the JPM Conference, with BioNTech, Moderna, Novovax and Johnson & Johnson all presenting. Lots of progress reported by all of the companies working on vaccines, but the best news of the day was the comment from BioNTech that the UK and South Africa coronavirus variants likely are still covered by the BioNTech/Pfizer vaccine. BioNTech’s CEO, Prof. Uğur Şahin, M.D., promised more data and analysis to be published shortly on that.

We also saw continued excitement for mRNA vaccines, not only for COVID-19 but also for other diseases. There is a growing focus (following COVID-19 of course) on vaccines for cancer through use of neoantigen targets, and for a long list of infectious disease targets.  For cancer, though, there continues to be a growing debate over whether the best focus is on “personalized” vaccines or “off the shelf” vaccines – personalized vaccines can take longer to make and have much, much higher costs and infrastructure requirements. We expect, however, to see very exciting news on the use of mRNA and other novel technologies in the next year or two that, when approved and put into commercialization, could radically change the game, not only as to mortality, but also by eliminating or significantly reducing the cost of care with chronic conditions (which some cancers have become, thanks to technological advancement). We are fortunate to be in that gap now between “care” and “cure,” where we have been able with modern medical advances to convert many more disease states into manageable chronic care conditions. Together with today’s longer lifespans, that, however, carries a much higher price tag for our healthcare system. Now, with some of these recent announcements, we look forward to moving from “care” to “cure” and substantially dropping the cost of care to our healthcare system.

Continuing consolidation also was a steady drumbeat underlying the multiple presentations today on the healthcare services side of the conference – health plans, health systems, physician organizations, home health. The drive to scale continues, as we have seen from the accelerated pace of mergers and acquisitions in the second half of 2020, which continues unabated in January 2021. There was today’s announcement of the acquisition by Amerisource Bergen of Walgreens Boots Alliance’s Alliance Healthcare wholesale business (making Walgreens Boots Alliance the largest single shareholder of Amerisource Bergen at nearly 30% ownership), following the announcement last week of Centene’s acquisition of Magellan Health (coming fast on the heels of Molina Healthcare’s purchase of Magellan’s Complete Care line of business).

On the mental health side – a core focus area for Magellan Health – Centene’s Chief Executive Officer, Michael Neidorff, expressed the common theme that we have been seeing in the past year that mental health care should be integrated and coordinated with primary and specialty care. He also saw value in Magellan’s strong provider network, as access to mental health providers can be a challenge in some markets and populations. The behavioral/mental health sector likely will see increased attention and consolidation in the coming year, especially given its critical role during the COVID-19 crisis and also with the growing Medicaid and Medicare populations. There are not a lot of large assets left independent in the mental health sector (aside from inpatient providers, autism/developmental disorder treatment programs, and substance abuse residential and outpatient centers), so we may see more roll-up focus (such as we have seen recently with the autism/ABA therapy sector) and technology-focused solutions (text-based or virtual therapy).

There was strong agreement among the presenting health plans and capitated providers (Humana, Centene, Oak Street and multiple health systems) today that we will continue to see movement toward value-based care (VBC) and risk-based reimbursement systems, such as Medicare Advantage, Medicare direct contracting and other CMS Innovation Center (CMMI) programs and managed Medicaid. Humana’s Chief Executive Officer, Bruce Broussard, said that the size of the MA program has grown so much since 2010 that it now represents an important voting bloc and one of the few ways in which the federal government currently is addressing healthcare inequities – e.g., through Over-the-Counter (OTC) pharmacy benefits, benefits focused on social determinants of health (SDOH), and healthcare quality improvements driven by the STARS rating program. Broussard also didn’t think Medicare Advantage would be a negative target for the Biden administration and expected more foreseeable and ordinary-course regulatory adjustments, rather than wholesale legislative change for Medicare Advantage.

There also was agreement on the exciting possibility of direct contracting for Medicare lives at risk under the CMMI direct contracting initiative. Humana expressed possible interest in both this year’s DCE program models and in the GEO regional risk-based Medicare program model that will be rolling out in the next year. Humana sees this as both a learning experience and as a way to apply their chronic care management skills and proprietary groups and systems to a broader range of applicable populations and markets. There is, however, a need for greater clarity and transparency from CMMI on program details which can substantially affect success and profitability of these initiatives.

Humana, Centene and Oak Street all sang the praises of capitated medical groups for Medicare Advantage and, per Michael Neidorff, the possibility of utilizing traditional capitated provider models for Medicaid membership as well. The problem, as noted by the speakers, is that there is a scarcity of independent capitated medical groups and a lack of physician familiarity and training. We may see a more committed effort by health plans to move their network provider groups more effectively into VBC and risk, much like we have seen Optum do with their acquired fee for service groups. Privia Health also presented today and noted that, while the market focus and high valuations today are accorded to Medicare lives, attention needs to be paid to the “age in” pipeline, as commercial patients who enroll in original Medicare and Medicare Advantage still would like to keep their doctors who saw them under commercial insurance. Privia’s thesis in part is to align with patients early on and retain them and their physicians, so as to create a “farm system” for accelerated Medicare population growth. Privia’s Chief Executive Officer, Shawn Morris, also touted Privia’s rapid growth, in part attributable to partnering with health systems.

As written in our notes from prior JPM healthcare conferences, health systems are continuing to look outside to third parties to gain knowledge base, infrastructure and management skills for physician VBC and risk arrangements. Privia cited their recent opening of their Central Florida market in partnership with Health First and rapid growth in providers by more than 25% in their first year of operations.

That being said, the real market sizzle remains with Medicare Advantage and capitation, percent of premium arrangements and global risk. The problem for many buyers, though, is that there are very few assets of size in this line of business. The HealthCare Partners/DaVita Medical Group acquisition by Optum removed that from the market, creating a high level of strategic and private equity demand and a low level of supply for physician organizations with that expertise. That created a focus on groups growing rapidly in this risk paradigm and afforded them strong valuation, like with Oak Street Health this past year as it completed its August 2020 initial public offering. Oak Street takes on both professional and institutional (hospital) risk and receives a percent of premium from its contracting health plans. As Oak Street’s CEO Mike Pykosz noted, only about 3% of Medicare dollars are spent on primary care, while approximately two-thirds are spent on hospital services. If more intensive management occurs at the primary care level and, as a result, hospitalizations can be prevented or reduced, that’s an easy win that’s good for the patient and the entire healthcare system (other than a fee for service based hospital). Pykosz touted his model of building out new centers from scratch as allowing greater conformity, control and efficacy than buying existing groups and trying to conform them both physically and through practice approaches to the Oak Street model. He doesn’t rule out some acquisitions, but he noted as an example that Oak Street was able to swiftly role out COVID-19 protocols rapidly and effectively throughout his centers because they all have the same physical configuration, the same staffing ratio and the same staffing profiles. Think of it as a “franchise” model where each Subway store, for example, will have generally the same look, feel, size and staffing. He also noted that while telehealth was very helpful during the COVID-19 crisis in 2020 and will continue as long as the doctors and patients wish, Oak Street believes that an in-person care management model is much more effective and telehealth is better for quick follow-ups or when in-person visits can’t occur.

Oak Street also spoke to the topic of Medicare Advantage member acquisition, which has been one of the more difficult areas to master for many health plans and groups, resulting in many cases with mergers and acquisitions becoming a favored growth vehicle due to the difficulties of organic membership growth. Interestingly, both Oak Street and Humana reported improvements in membership acquisition during the COVID-19 crisis. Oak Street credited digital marketing and direct response television, among other factors. Humana found that online direct-to-consumer brokers became an effective pathway during the COVID-19 crisis and focused its energy on enhancing those relationships and improving hand-offs during the membership enrollment process. Humana also noted the importance of brand in Medicare Advantage membership marketing.

Staying with Medicare Advantage, there is an expectation of a decrease in Medicare risk adjustment revenue in 2021, in large part due to the lower healthcare utilization during the COVID crisis and the lesser number of in-person visits during which HCC-RAF Medicare risk adjustment coding typically occurs. That revenue drop however likely will not significantly decrease Medicare Advantage profitability though, given the concomitant drop in healthcare expenses due to lower utilization, and per conference reports, is supposed to return to normal trend in 2022 (unless we see utilization numbers fall back below 90% again). Other interesting economic notes from several presentations, when taken together, suggest that while many health systems have lost out on elective surgery revenue in 2020, their case mix index (CMI) in many cases has been much higher due to the COVID patient cases. We also saw a number of health systems with much lower cash days on hand numbers than other larger health systems (both in gross and after adjusting for federal one-time stimulus cash payments), as a direct result of COVID. This supports the thesis we are hearing that, with the second wave of COVID being higher than expected, in the absence of further federal government financial support to hospitals, we likely will see an acceleration of partnering and acquisition transactions in the hospital sector.

Zoetis, one of the largest animal health companies, gave an interesting presentation today on its products and service lines. In addition to some exciting developments re: monoclonal antibody treatments coming on line for dogs with pain from arthritis, Zoetis also discussed its growing laboratory and diagnostics line of business. The animal health market, sometime overshadowed by the human healthcare market, is seeing some interesting developments as new revenue opportunities and chronic care management paradigms (such as for renal care) are shifting in the animal health sector. This is definitely a sector worth watching.

We also saw continuing interest, even in the face of Congressional focus this past year, on growing pharmacy benefit management (PBM) companies, which are designed to help manage the pharmacy spend. Humana listed growth of its PBM and specialty pharmacy lines of business as a focus for 2021, along with at-home care. In its presentation today,  SSM Health, a health system in Wisconsin, Oklahoma, Illinois, and Missouri, spotlighted Navitus, its PBM, which services 7 million covered lives in 50 states.

One of the most different, interesting and unexpected presentations of the day came from Paul Markovich, Chief Executive Officer of Blue Shield of California. He put forth the thesis that we need to address the flat or negative productivity in healthcare today in order to both reduce total cost of care, improve outcomes and to help physicians, as well as to rescue the United States from the overbearing economic burden of the current healthcare spending. Likening the transformation in healthcare to that which occurred in the last two decades with financial services (remember before ATMs and banking apps, there were banker’s hours and travelers cheques – remember those?), he described exciting pilot projects that reimagine healthcare today. One project is a real-time claims adjudication and payment program that uses smart watches to record physician/patient interactions, natural language processing (NLP) to populate the electronic medical record, transform the information concurrently into a claim, adjudicate it and authorize payment. That would massively speed up cash flow to physician practices, reduce paperwork and many hours of physician EMR and billing time and reduce the billing and collection overhead and burden. It also could substantially reduce healthcare fraud.

Paul Markovich also spoke to the need for real-time quality information that can result in real-time feedback and incentivization to physicians and other providers, rather than the costly and slow HEDIS pursuits we see today. One health plan noted that it spends about $500 million a year going into physician offices looking at medical records for HEDIS pursuits, but the information is totally “in the rearview mirror” as it is too old when finally received and digested to allow for real-time treatment changes, improvement or planning. Markovich suggested four initiatives (including the above, pay for value and shared decision making through better, more open data access) that he thought could save $100 billion per year for the country. Markovich stressed that all of these four initiatives required a digital ecosystem and asked for help and partnership in creating one. He also noted that the State of California is close to creating a digital mandate and statewide health information exchange that could be the launching point for this exciting vision of data sharing and a digital ecosystem where the electronic health record is the beginning, but not the end of the healthcare data journey.

What healthcare executives can expect under Biden presidency

https://www.beckershospitalreview.com/hospital-management-administration/pwc-what-healthcare-executives-can-expect-under-biden-presidency.html?utm_medium=email

https://www.pwc.com/us/Biden2020healthagenda

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.

Hackensack, RWJBarnabas and Horizon strategically partner to own Medicare Advantage insurer

https://www.healthcarefinancenews.com/news/hackensack-rwjbarnabas-and-horizon-own-new-medicare-advantage-plan-braven-health

New Jersey | Capital, Population, Map, History, & Facts | Britannica

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.

Walmart Health COO outlines health insurance business: 5 things to know

https://www.beckershospitalreview.com/payer-issues/walmart-health-coo-outlines-health-insurance-business-5-things-to-know.html?utm_medium=email

NCDHHS on Twitter: "A few years ago, Durham's David Tedrow couldn't drive a  car. He'd forgotten how to answer a telephone. Now, he's started Senior  Health Insurance Brokers, LLC, and was honored

Lori Flees, senior vice president and COO of Walmart Health, officially launched Walmart Insurance Services Oct. 6. The insurance agency will “assist people with enrolling in insurance plans and simplify what’s historically been a cumbersome, confusing process,” Ms. Flees said.

Five things to know:

1. Ms. Flees outlined the operations of Walmart Insurance Services in a Oct. 6 blog post. Walmart will begin selling Medicare insurance plans during this year’s open enrollment period, from Oct. 15 through Dec. 7. 

2. Walmart Insurance Services will provide Medicare products, including Part D, Medicare Advantage and Medicare Supplement plans. The products will be offered by Humana, UnitedHealthcare, Anthem Blue Cross Blue Shield, Amerigroup, Simply Health, WellCare, Clover Health and Arkansas Blue Cross and Blue Shield. More insurers will be added, Ms. Flees said.

3. In July, the Arkansas Democrat Gazette broke news that Walmart had started seeking Medicare sales managers and insurance agents for a new entity called Walmart Insurance Services.

4. In early October, Walmart announced its partnership with Medicare Advantage insurer Clover Health on its first health insurance plans, which will be open to half a million people in eight counties in Georgia.

5. Walmart’s insurance business is licensed in all 50 states and Washington, D.C. Ms. Flees said the company has hired insurance agents to help people find insurance plans.

Medicare Advantage should not ‘game the system’ but prioritize patient care, honest billing

https://www.healthcaredive.com/news/medicare-advantage-should-not-game-the-system-but-prioritize-patient-care/585613/

We all agree healthcare providers should prioritize patient well-being and bill honestly. Most do. But, if not, my office, the Office of Inspector General for the HHS, and other government agencies, are watching. 

We are especially monitoring an area of concern: abuse of risk adjustment in Medicare Advantage, the managed care program serving 23 million beneficiaries, 37% of the Medicare population, at a cost of about $264 billion annually. We have good reason to pay attention. Our recent report found that Medicare Advantage paid $2.6 billion a year for diagnoses unrelated to any clinical services.

Plans used a tool called “health risk assessments” to collect these diagnoses. Ideally, health risk assessments might be part of a Medicare beneficiary’s annual wellness visit and help care teams identify health issues. However, some Medicare Advantage plans use risk assessments without involving the patients’ regular care providers. 

Some plans partner with businesses whose primary livelihood entails identifying diagnoses by conducting risk assessments. Some organizations send professional risk assessors, perhaps practitioners with some medical credentials but not physicians or other clinicians involved in the person’s care, to the beneficiaries’ homes.  Our study found that 80% of that extra $2.6 billion payment resulted from in-home health risk assessments. 

Medicare’s capitated payments vary by beneficiary for good reason. If Medicare paid the same for every beneficiary, plans might favor younger and healthier enrollees. It may not hold true every month, but, on average, it will cost a plan less to serve a healthy 65-year-old than an older person with diabetes or cancer.

Risk adjustment tailors the capitated rate to each beneficiary’s expected costs, so plans should enroll any interested beneficiary and not discriminate. But the risk adjustment is just a projection. Beneficiaries need not actually incur higher costs for the plan to receive higher payments. Some beneficiaries with a seemingly low risk will incur high costs in a given year and some beneficiaries with a high risk will incur low or even no costs.

In fact, one Medicare Advantage plan received about $7 million for beneficiaries who did not appear to receive any clinical care that year — other than the risk assessment, which was the only reason for the higher Medicare payment. Finding beneficiaries with high risk scores but low care utilization can prove a profitable business strategy. 

Without gaming, on the aggregate, risk-based payments and utilization should even out over time.  But what if plans do game the system? Perhaps making their beneficiaries look sicker? Or not providing care for beneficiaries’ health conditions?

We identified two main concerns:

  • bad data — risk of incorrect diagnoses identified in the health risk assessment resulting in incorrect payments to plans.
  • suboptimal care — risk that diagnoses are correct, but patients are not getting the care they need.

The question of whether beneficiaries are experiencing quality and safety problems requires more study. For example, it is possible that beneficiaries are receiving care, but plans are not submitting this data as required. Regardless, plans that use risk assessments to gather diagnoses, but then take no further action, are clearly missing an opportunity for meaningful care coordination. We urge Medicare Advantage plans to:

  • Ensure practices drive better care and not just higher profits.  
  • Enact policies and procedures to ensure the integrity and usefulness of the data.

This could include measures like educating patients about the identified diagnoses and sharing them with caregivers. These steps are consistent with the best practices identified by CMS and provided to Medicare Advantage Plans in 2015.

It is not necessarily bad that Medicare allows risk assessments to influence payment, trusting that plans use risk assessments to identify missed diagnoses and not to fabricate nonexistent diagnoses. 

However, this practice only helps patients if there is some additional intervention to improve care. If risk assessments are performed by third parties, at minimum, the beneficiary and the beneficiary’s care team should learn the results. Risk assessments should trigger meaningful care coordination, patient engagement and help ensure the care team takes appropriate action. Risk assessments that generate diagnoses for payment purposes, but result in no follow-up care raise serious concerns.

Ensuring beneficiaries receive the care they need should be front of mind for executives as they design risk assessment programs with an eye to quality of care and better care coordination. Failing that, executives should know that government agencies will scrutinize risk adjustment for abuse. 

In response to our report, CMS promised to provide additional oversight and target plans that reap the greatest payments from in-home health risk assessments and conditions generated solely by risk assessments for which the beneficiaries appeared to receive no other clinical services. My office has identified red flags in some industry patterns and recommends plans adopt best practices. Executives should champion best practices and make sure their plans are driving correct diagnoses and quality care.

Ensuring that beneficiaries are properly diagnosed is important, not just for the integrity of taxpayer-funded federal healthcare programs, but also for the welfare of the beneficiaries served. Coordinating care and providing appropriate follow up is critical.

My office and other government agencies are targeting oversight to make sure plans do not pad risk adjustments with unsupported diagnoses. When plans find new real diagnoses, the plans deserve the extra payment, but only if patients get appropriate care.

 

 

 

 

Walmart confirms a new avatar — it’s also a health insurance agency

https://medcitynews.com/2020/07/walmart-confirms-a-new-avatar-its-also-a-health-insurance-broker/?utm_campaign=MCN%20Daily%20Top%20Stories&utm_medium=email&_hsmi=90973681&_hsenc=p2ANqtz-81Jwk3CVNhJLTDzB0d_5dxRASKqJQULhnQYEg1uxEGxr-l_EbrHhNlSq7UcPZ103ku0wBylrpCk8Y0i1vrK7rRE5rJuA&utm_content=90973681&utm_source=hs_email

Should I buy health insurance from Walmart? - Castaline Insurance ...

Walmart quietly launched a new health insurance business. The company, called Walmart Insurance, was filed with the Arkansas Secretary of State last month.

Walmart is making clear what an executive declared in a virtual conference: that it is firmly in the healthcare business, not just in retail healthcare.

News emerged today that the company is planning to throw its weight around in another healthcare segment in need of an overhaul: insurance. A spokeswoman from the Bentonville, Arkansas retail behemoth confirmed that the company has created “Walmart Insurance Services LLC” to sell insurance policies. The business entity’s name was first filed with the Arkansas Secretary of State in late June.

“We currently offer access to insurance information in our Walmart Health locations, and we have a long-standing education program called Healthcare Begins Here to help people find the right insurance plan for them,” spokeswoman Marilee McInnis wrote in an email. “We’re expanding our current insurance services to now include the sale of insurance policies to our customers.”

A handful of job postings at a call center in the Dallas metro also match up with Walmart Insurance Services, as first pointed out by Talk Business & Politics. Walmart has listings for licensed insurance agents and Medicare sales supervisors.

“Yes, you read that right, Walmart now has an insurance agency,” the listings read.

It looks like the new subsidiary will be focused on selling Medicare Advantage plans, though the company was mum when asked for additional details. The spokeswoman’s statement about the “sale of insurance policies to our customers” also leaves open the possibility of Walmart expanding its services beyond senior shoppers in the future.

Medicare Advantage plans have been experiencing rapid growth in the past decade, with more than a third of all beneficiaries enrolled in a plan managed by a private insurer. That figure is expected to increase in the future.

 

Deeper into the pharmacy space

Separately, on Tuesday, Walmart announced that it had struck a partnership with  PBM startup Capital Rx, which provides health plans real-time information on prescription drug prices.

Walmart has been a big player in the pharmacy space for several years, and the company appears to be deepening that through this partnership

“‘Everyday low price’ has been a guiding principle at Walmart. We take pride in providing affordable prices to more than 160 million customers who shop Walmart each week,” Walmart Health and Wellness Vice President Luke Kleyn said in a news release. “Working with Capital Rx will allow us to do the same for prescription drugs,”

Capital Rx was founded just over two years ago by AJ Loiacono, a former insurance auditor, with the idea of providing drug prices as part of pharmacy benefit plans.

Loiacono started his career in the pharmaceutical manufacturing industry, where “everything that comes out of that plant has a price.”

When he moved over to the auditing and procurement side, working with payers and self-insured companies, he was shocked to find out that none of their contracts included drug prices. To solve this, the company uses Medicaid’s National Average Drug Acquisition Cost, rather than the average wholesale price, to calculate costs.

As a standalone company, Capital Rx was able to provide price information for retail drugs, but they weren’t able to do the same for mail and specialty drugs. The partnership with Walmart will “complete the model,” with Walmart providing mail and specialty drug fulfillment.

With the partnership, Capital Rx was able to quickly sign on some payers, though it hasn’t yet disclosed which ones.

“Walmart is a diversified company. We liked the fact that they were independent. They’re not part of a PBM or a health system today,” Loiacono said. “The other part of it is, they have scale.”

Loiacono also pointed to similar goals in price transparency — something Walmart emphasized when it shared the cash pay prices for its new health clinics.

“This is what we’re seeing a little bit more of as the future in the roadmap,” Loiacono said. “They’re making a serious investment in healthcare.”

 

 

 

 

Health insurance marketplace GoHealth files to go public

https://www.fiercehealthcare.com/tech/health-insurance-marketplace-gohealth-files-to-go-public?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiWmpjeVlXVTRZV0l5T1RndyIsInQiOiJLWWxjamNKK2lkZmNjcXV4dm0rdjZNS2lOanZtYTFoenViQjMzWnF0RGNlY1pkcjVGcFwvZFY4VjFaUUlZaFRBT1NRMGE5eWhGK1ZmR01ZSWVZWGMxOHRzTkptZVZXZmc5UnNvM3pVM2VIWDh6VllldFc3OGNZTTMxTDJrXC8wbzN1In0%3D

GoHealth files for $100M IPO

GoHealth, an online health insurance marketplace, is looking to raise up to $100 million in an initial public offering, according to a filing with the U.S. Securities and Exchange Commission (SEC) Friday.

The Chicago company, launched in 2001, said its stock will trade on the Nasdaq Global Market under the symbol “GHTH,” according to an S-1 filing.

The company didn’t list specific share price or the number of shares it’s selling in the filing.

GoHealth operates a health insurance portal offering a variety of plans that allows customers to compare numerous insurance plans such as family health plans and self-employed insurance.

The company works with more than 300 health insurance carriers and has enrolled more than 5 million people into health plans.

Goldman Sachs, BofA Securities and Morgan Stanley are acting as the managing book runners for the proposed offering. Barclays, Credit Suisse, Evercore ISI, RBC Capital Markets and William Blair are acting as book runners for the proposed offering. Cantor and SunTrust Robinson Humphrey are acting as co-managers for the proposed offering, according to a GoHealth press release.

GoHealth will join a growing list of technology-enabled healthcare companies that are testing the public markets, including One Medical, Livongo, Phreesia, Health Catalyst, Change Healthcare and Progyny.

The company has shifted its focus toward Medicare products over the past four years, positioning itself to capitalize on strong demographic trends and an aging population.

Medicare enrollment is expected to grow from approximately 61 million individuals in 2019 to approximately 77 million individuals by 2028, the company said in its SEC filing.

At the same time, an increasing proportion of the Medicare-eligible population is choosing commercial insurance solutions, with 38% of Medicare beneficiaries, or approximately 23 million people, enrolled in Medicare Advantage plans in 2019, an increase of approximately 1.5 million people from 2018 to 2019, the company said.

The market is “ripe for disruption” by digitally enabled and technology-driven marketplaces like the GoHealth platform, according to the company.

GoHealth estimates a total addressable market of $28 billion for Medicare Advantage and Medicare Supplement products.

“We believe that these trends will drive a larger market in the coming years that, when taken together with our other product and plan offerings, will result in an even larger addressable market. We also believe that we are poised to benefit from market share gains in what has traditionally been a highly fragmented market,” the company said in the S-1 filing.

The company uses machine-learning algorithms and insurance behavioral data to match customers with the health insurance plan that meets their specific needs.

In 2019, the company generated over 42.2 million consumer interactions.

In September 2019, Centerbridge acquired a majority stake of GoHealth in a deal that reportedly valued the company at $1.5 billion, the Chicago Tribune reported.

Net revenues grew to $141 million for the first quarter of this year, compared to $69.1 million last year. The company reported 2019 pro forma net revenues of $540 million, up 139% from 2018’s revenue of $226 million, the company reported in its SEC filing.

The company reported a net loss of $937,000 for the first quarter of 2020 compared to a net income of $5 million for the same period in 2019, according to its IPO.

Demographic, consumer preference and regulatory factors are driving growth in the individual health insurance market, according to the company. Medicare enrollment is expected to grow significantly over the next 10 years as 10,000-plus individuals turn 65 each day and become Medicare-eligible.

At the same time, the growth in plan choices makes education and assistance with plan selection more important for consumers, GoHealth said.

“Marketplaces such as ours help educate consumers, and assist them in making informed plan choices,” the company said.

The company also faces significant risks that may impede its growth. Currently, a large portion of GoHealth’s revenue is derived from a limited number of carriers. Carriers owned by Humana and Anthem accounted for approximately 42% and 32%, respectively, of the company’s net revenues for the first three months of 2020, the company said in its IPO paperwork.

The COVID-19 pandemic also creates uncertainty in the healthcare market, and future developments in the outbreak could impact the company’s financial performance, GoHealth said.

 

 

 

A 70-year-old man was hospitalized with COVID-19 for 62 days. Then he received a $1.1 million hospital bill, including over $80,000 for using a ventilator.

https://www.yahoo.com/news/70-old-man-hospitalized-covid-170112895.html

Man, 70, hospitalized with COVID-19 for 62 days gets $1.1 million ...

  • A man in Washington state who spent more than two months in the hospital and more than a month in the Intensive Care Unit with COVID-19 received a 181-page itemized bill that totals more than $1.1 million, The Seattle Times reported.
  • Michael Flor, 70, will likely foot little of the bill due to his being insured through Medicare, according to the report.
  • “I feel guilty about surviving,” Flor told The Seattle Times. “There’s a sense of ‘why me?’ Why did I deserve all this? Looking at the incredible cost of it all definitely adds to that survivor’s guilt.”

A 70-year-old man in Seattle, Washington, was hit with a $1.1 million 181-page long hospital bill following his more than two-month stay in a local hospital while he was treated for — and nearly died from — COVID-19. 

“I opened it and said ‘holy (expletive)!’ ” the patient, Michael Flor, who received the $1,122,501.04 bill told The Seattle Times.

He added: “I feel guilty about surviving. There’s a sense of ‘why me?’ Why did I deserve all this? Looking at the incredible cost of it all definitely adds to that survivor’s guilt.”

According to the report, Flor will not have to pay for the majority of the charges because he has Medicare, which will foot the cost of most if not all of his COVID-19 treatment. The 70-year-old spent 62 days in the Swedish Medical Center in Issaquah, Washington, 42 days of which he spent isolated in the Intensive Care Unit (ICU). 

Of the more than one month he spent in a sealed-off room in the ICU, Flor spent 29 days on a ventilator. According to the Seattle Times, a nurse on one occasion even helped him call his loved ones to say his final goodbyes, as he believed he was close to death from the virus.

While in the ICU, Flor was billed $9,736 each day; more than $80,000 of the bill is made up of charges incurred from his use of a ventilator, which cost $2,835 per day, according to the report. A two-day span of his stay in the hospital when his organs, including his kidneys, lungs, and heart began to fail, cost $100,000, according to the report.  

In total, there are approximately 3,000 itemized charges on Flor’s bill — about 50 charges for each day of his hospital stay, according to The Seattle Times. Flor will have to pay for little of the charges — including his Medicare Advantage policy’s $6,000 out-of-pocket charges — due to $100 billion set aside by Congress to help hospitals and insurance companies offset the costs of COVID-19.

Flor is recovering in his home in West Seattle, according to the report.

 

 

 

 

The Value of Home Health Care

The Value of Home Health Care

5 Truths About Home Health Care

For the first time in our modern history, staying at home has become a “new” normal. And with more than 1.5 million Americans now infected with COVID-19, never before in our lifetime has accessing care in a person’s home been so important.

Smartly, our federal and state policymakers quickly expanded reimbursement for telehealth and removed barriers that have now allowed more providers to care for patients virtually via video and phone, eliminating the risk of COVID-19 exposure during provider visits. But not all care can be provided through telehealth – and we would be shortsighted to not also address the growing need for home-based care.

Long before the COVID-19 emergency, health care policy experts have increasingly recognized the value of home-based health care. A recent AARP survey found that three in four adults 50 years and older would prefer to age in their homes and communities. And a growing body of evidence suggests it is less expensive to deliver care in the home. Indeed, for years we’ve seen hospitalized patients more quickly returning to their homes and communities to heal and recover safely, reducing costs for themselves and the health care system.

Home-based care addresses some of the negative health effects of social isolation and loneliness, which drive poorer health outcomes that annually cost billions of excess health care dollars. According to one study, those experiencing loneliness and social isolation had a more than 60 percent higher risk of developing dementia and a fourfold increase in hospital readmission rates within a year of discharge.

Despite its demonstrated value, our country has yet to fully integrate the support needed for home-based care. Instead, we have a collage of different reimbursement frameworks across state, federal, and private payers.

Traditionally, Medicare has paid only for home caregivers in very limited circumstances. But we’re now seeing small and promising changes. The Medicare Advantage program, for example, now allows plans to offer non-medical care services in the home as supplemental benefits. These benefits can include day care services, in-home support services including meals and support for caregivers.

We have also seen a surge of technologies to enable home-based care. From those receiving home infusion therapies, to home dialysis, to remote patient monitoring, the private sector has stepped up to meet the needs of those wanting to or needing to receive care at home.

Now is the time to expand on these promising changes with a more comprehensive approach to paying for home-based care delivery. With more thoughtful integration of caregiving services and improved care coordination across care settings, including the home, such models can drive down health care costs for patients and the system overall.

Whether caring for those impacted by our current public health crisis, or those who are medically homebound, or those who simply choose to age in place, policymakers should think beyond essential medical services and consider the non-medical drivers of health that are often as essential to good health outcomes. For example, many individuals needing to stay at home are ill-equipped to carry out their own basic needs. Daily tasks — such as getting in and out of a chair or bed, moving about the house, shopping and preparing meals, taking medications properly, bathing and dressing, and cleaning and laundry — can be a struggle for the elderly and those with serious health conditions.

Fortunately, we have millions of home health nurses and caregivers working on the front lines to care for vulnerable adults who should safely remain in their homes during this pandemic and beyond.

These workers are the foot soldiers who perform tasks such as shopping, meal preparation and assisting with mobility and personal care. Well-trained caregivers and nurses, sensitive to the time and place where patients actually live, can more readily identify and address issues that can exacerbate a person’s chronic, complex illness that may not otherwise be visible in a single visit to a traditional health care setting.

As we face record unemployment, federal, state and local policymakers should consider how best to utilize this untapped resource both now and in the future. With the appropriate testing, training, and reimbursement, individuals can have a choice in where they age and receive care.

While keeping people safe and healthy in their homes has always been appealing, now it is imperative. For our most vulnerable individuals — the elderly and those with chronic health conditions – home-based care can save their lives.