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BETH ISRAEL, LAHEY HEALTH MERGER GETS FTC, MASSACHUSETTS AG’S APPROVAL

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https://www.healthleadersmedia.com/beth-israel-lahey-health-merger-gets-ftc-massachusetts-ags-approval?utm_source=silverpop&utm_medium=email&utm_campaign=ENL_181130_LDR_BRIEFING%20(1)&spMailingID=14711589&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1522364043&spReportId=MTUyMjM2NDA0MwS2

he condition-laden approval stipulates a seven-year price cap that guarantees that the merged health system’s price increases will be kept below the state’s healthcare cost growth benchmarks.

KEY TAKEAWAYS

The Federal Trade Commission calls the merger ‘a close call’ but defers to state regulators.

The merged health system will provide $71 million for care in underserved areas.

The merged, 13-hospital health system will be one of the largest in the Bay State.

The proposed merger of Beth Israel Deaconess Medical Center and Lahey Health System cleared a huge hurdle today when Massachusetts Attorney General Maura Healey announced her conditional support.

The approval comes with what Healey called an “unprecedented” seven-year price cap that guarantees that the merged health system’s price increases will be kept below the state’s Health Care Cost Growth benchmark.

“Through this settlement, Beth Israel Lahey Health will cap its prices, strengthen safety net providers across the region, and invest in needed behavioral health services,” Healey said in a media release.

“These enforceable conditions, combined with rigorous monitoring and public reporting, create the right incentives to keep care in community settings and ensure all our residents can access the high-quality health care they deserve,” she said.

The deal also cleared a key federal hurdle when the Federal Trade Commission voted to close its investigation in light of Healey’s agreement.

“The assessment of whether to take enforcement action was a close call. However, based on Commission staff’s work and in light of the settlement obtained by the Massachusetts AG, we have decided to close this investigation,” the FTC said in a media release.

Kevin Tabb, MD, CEO of Beth Israel Deaconess Medical Center, who will serve as CEO of Beth Israel Lahey Health, called the state and federal approvals “an important step forward in making our vision a reality.”

“We appreciate the enormous effort that the Attorney General, her staff and the Federal Trade Commission have devoted to our proposal.  We share their commitment to health care innovation in Massachusetts, and we are eager to build on the strengths of our legacy organizations and deliver on our promise to our patients, their families and our communities,” Tabb said.

Massachusetts’ Health Care Cost Growth benchmark controls the annual growth of total medical spending in the state and is now set at 3.1%. Over the seven-year term, the cap will avoid more than $1 billion of the potential cost increases projected by the state’s Health Policy Commission.

When finalized, the merged, 13-hospital health system will be will one of the largest in the Bay State.

The merger push began in 2017, with Beth Israel and Lahey justifying the consolidation as a market-based attempt to address rising costs, price disparities, and healthcare access issues.

However, the deal has faced headwinds since its inception.

Even as late as this September, the Massachusetts Health Policy Commission noted that the merger would create a health system roughly the same size as Partner’s HealthCare System, the state’s largest health system, which would “increase substantially” market concentration in eastern Massachusetts.

“BILH’s enhanced bargaining leverage would enable it to substantially increase commercial prices that could increase total healthcare spending by an estimated $128.4 million to $170.8 million annually for inpatient, outpatient, and adult primary care services,” MHPC said.

In addition, the commission said spending on specialty physician services could increase by as much as $60 million annually if the merged health system obtains similar prices increases for those services.

“These would be in addition to the price increases the parties would have otherwise received,” the commission wrote. “These figures are likely to be conservative. The parties could obtain these projected price increases, significantly increasing healthcare spending, while remaining lower-priced than Partners.”

Those concerns appeared to have been alleviated on Thursday, when MHPC Commissioner Martin Cohen said “the investments required by the settlement will have a real impact on access to treatment for mental health and substance use disorders for patients across Eastern Massachusetts.”

Healey’s assurance of discontinuance also includes requirements that the merged Beth Israel Lahey Health pledge $71.6 million to support healthcare services for underserved areas.

The deal also requires BILH to strengthen its commitment to MassHealth; engage in business planning with its safety net hospital affiliates; enhance access to mental health and substance use disorder treatment; and retain a third-party monitor to ensure compliance with the terms.

The deal exempts affiliated safety net hospitals from the price-cap constraints. Lawrence General Hospital CEO Dianne J. Anderson said the exemption for her safety net will “ensure a commitment to joint, long-term planning for distribution of health care resources across the region.”

The $71.6 million that BILH will spend over eight years for underserved areas will include:

  • $41 million to fund affiliated community health centers and safety net hospitals, which guarantees support at the systems’ historic levels.
  • At least $8.8 million in additional financial support for affiliated community health centers and safety net hospitals.
  • At least $5 million in strategic investment to expand access to healthcare for low-income communities through community health centers.
  • At least $16.9 million to develop and expand behavioral health services across the BILH system.

“THROUGH THIS SETTLEMENT, BETH ISRAEL LAHEY HEALTH WILL CAP ITS PRICES, STRENGTHEN SAFETY NET PROVIDERS ACROSS THE REGION, AND INVEST IN NEEDED BEHAVIORAL HEALTH SERVICES.”

 

Number of uninsured children increases for first time in a decade

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https://thehill.com/policy/healthcare/418884-number-of-uninsured-children-increased-for-first-time-in-a-decade-during

Number of uninsured children increases for first time in a decade

The number of uninsured children in the U.S. increased for the first time in a decade, according to a new report that puts much of the blame on policies spearheaded by Republicans.

An estimated 3.9 million children did not have health insurance in 2017, an increase of 276,000 compared to the previous year, according to the Georgetown University Center for Children and Families.

No state made statistically significant progress on children’s coverage last year, despite an improving economy and low unemployment rate, according to the report, which noted that the District of Columbia made substantive gains in 2017.

Researchers said the rising number for states was due to a variety of factors, though they said GOP-led states refusing to expand Medicaid played a major role, as well as Republican efforts in Congress to repeal ObamaCare and cap federal Medicaid funding.

Three-quarters of the children who lost coverage between 2016 and 2017 live in states that have not expanded Medicaid coverage to parents and other low-income adults, the report found. The uninsured rates for children in non-expansion states increased at almost triple the rate as states that have expanded Medicaid.

The report also noted that Congress eliminated the health law’s individual mandate and the Trump administration dramatically cut ObamaCare outreach and enrollment grants while shortening the open enrollment period.

“All of these changes in the national political and policy realm mark a sharp reversal after many years of successful efforts to reduce the uninsured rate for children and families,” the researchers wrote.

The report’s prognosis for the future was not encouraging.

“Barring new and serious efforts to get back on track, there is every reason to believe the decline in coverage is likely to continue and may get worse in 2018,” researchers concluded.

The number of uninsured children in the U.S. was particularly high in Florida and Texas, the two largest states that have not expanded Medicaid, according to the report.

Texas had an estimated 80,000 more children uninsured in 2017 than in 2016, and Florida had 37,000 more.

Researchers also pointed to President Trump‘s recent crackdown on immigration as a reason why the number of uninsured kids is rising.

One quarter of all children under 18 living in the United States have a parent who is an immigrant, according to the report. Several policies targeting immigrant communities, like the administration’s “public charge” proposal, are likely deterring parents from enrolling their eligible children in Medicaid or the Children’s Health Insurance Program, despite the fact that most of these children are U.S. citizens.

 

 

340B FINAL RULE WILL LAUNCH ON JANUARY 1, 2019

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https://www.healthleadersmedia.com/340b-final-rule-will-launch-january-1-2019

HHS shortens the 340B final rule implantation by six months after determining that it would not ‘interfere’ with the departments ‘comprehensive policies’ to address high drug costs.

KEY TAKEAWAYS

PhRMA says the ‘overly burdensome’ final rule fails to address hospital abuse of the program.

The new rule provides drug pricing information to 340B participants through a closed website.  

Proponents scoff at drug makers’ claims that more time is needed before the oft-delayed final rule is implemented.

After several delays, hundreds of public comments, a lawsuit, and an eight-year-old Congressional mandate, the federal government on Thursday bumped up the starting date of its 340B drug pricing final rule by six months.

In a notice published this week in the Federal Register, the Department of Health and Human Services said the final rule—which is designed to protect hospitals from being overcharged by drug manufacturers—would take effect on January 1, 2019, instead of July 1, 2019.

The final rule was supposed to take effect on January. 5, 2017, but HHS delayed implementation because it said it was in the midst of “developing new comprehensive policies to address the rising costs of prescription drugs.”

Hospitals got tired of waiting and filed suit, asking a federal judge to order the Trump Administration to launch the final rule on January 1, 2019. The hospitals allege that the delays are causing significant financial harm to the nearly 2,500 hospitals nationwide that participate in the 340B Drug Pricing Program.

In late October, the Trump Administration said it was considering accelerating implementation.

In bumping up the final rule implantation by six months, HHS said it “has determined that the finalization of the 340B ceiling price and civil monetary penalty rule will not interfere with HHS’s development of these comprehensive policies.”

Under the new rule, federal regulators will provide pricing information to 340B hospitals through a closed website, which proponents of the rule say is essential for ceiling price enforcement.

As expected, hospitals praised the action, and drug makers expressed disappointment.

“This rule is good for patients and for essential hospitals, which rely on 340B savings to make affordable drugs and health care services available to vulnerable people and underserved communities,” said America’s Essential Hospitals President and CEO Bruce Siegel, MD.

“It also ends years of delay for much-needed measures to hold drug companies accountable for knowingly overcharging covered entities in the 340B program,” Siegel said.

Maureen Testoni, interim president and CEO of 340B Health, called the announcement “a big step toward stopping drug companies from overcharging 340B hospitals, clinics, and health centers.”

“The next step toward ensuring true 340B drug maker transparency is for the administration to launch its ceiling price website so hospitals, clinics, and health centers can ascertain that they are paying the correct amounts for 340B medications,” Testoni said.

“We are encouraged that HHS says it will release that pricing reporting system shortly and that the department will communicate additional updates through its website,” she said.

PhRMA said it was “disappointed the Administration did not issue new proposals for this rule as it repeatedly stated it would.”

The pharmaceutical industry advocates said HHS “ignored the numerous concerns raised by stakeholders on the proposed ceiling price calculations, offset policy and civil monetary penalty provisions.”

Drug makers allege that hospitals have been scamming the 340B program, and PhRMA said Thursday that the final rule’s “flawed policies are not in line with the 340B statute and fail to address root problems in the 340B program that have enabled private 340B hospitals to generate record profit without commensurate benefit to patients.”

“Not only is the final rule itself overly burdensome in its requirements, but moving up its effective date also leaves manufacturers with very little time to make operational changes to systems and procedures,” PhRMA said.

Testoni scoffed at claims that more time was needed.

“The regulation now will be going into effect more than eight years after Congress mandated it—and only after a lawsuit filed by 340B Health and other hospital organizations to stop repeated administrative delays to the effective date,” Testoni said.

“As today’s final rule notes, these delays have given drug makers ‘more than enough time to prepare for its requirements.'”

“THESE DELAYS HAVE GIVEN DRUG MAKERS MORE THAN ENOUGH TIME TO PREPARE FOR ITS REQUIREMENTS.”

 

 

New insurance guidelines would undermine rules of the Affordable Care Act

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https://www.washingtonpost.com/national/health-science/new-insurance-guidelines-would-undermine-rules-of-the-affordable-care-act/2018/11/29/ff467f46-f357-11e8-aeea-b85fd44449f5_story.html?utm_term=.c279fcb895a6&wpisrc=al_news__alert-hse–alert-national&wpmk=1

Image result for aca

The Trump administration is urging states to tear down pillars of the Affordable Care Act, demolishing a basic rule that federal insurance subsidies can be used only for people buying health plans in marketplaces created under the law.

According to advice issued Thursday by federal health officials, states would be free to redefine the use of those subsidies, which began in 2014. They represent the first help the government ever has offered middle-class consumers to afford monthly premiums for private insurance.

States could allow the subsidies to be used for health plans the administration has been promoting outside the ACA marketplaces that are less expensive because they provide skimpier benefits and fewer consumer protections. In an even more dramatic change, states could let residents with employer-based coverage set up accounts in which they mingle the federal subsidies with health-care funds from their job or personal tax-deferred savings funds to use for premiums or other medical expenses.

If some states take up the administration’s offer, it would undermine the ACA’s central changes to the nation’s insurance system, including the establishment of nationwide standards for many kinds of health coverage sold in the United States.

Another goal of the ACA, the sprawling 2010 law that was President Barack Obama’s preeminent domestic accomplishment, was to concentrate help on the individual insurance market serving people who do not have access to affordable health benefits through a job. Prices were often out of control and discrimination against unhealthy people was more prevalent before the ACA imposed required benefits, prohibited insurers from charging more to people with preexisting conditions and created a federal health exchange and similar state-run marketplace in which private insurance companies compete for customers.

The ACA health plans have been the only ones for which consumers can use the subsidies, designed to help customers with incomes up to the middle class — 400 percent of the federal poverty line — afford the premiums.

The new advice, called “waiver concepts” because they are ideas for how states could get federal permission to deviate from the law’s basic rules, stray from both of those goals. And it would allow states to set different income limits for the subsidies — higher or lower than the federal one.

The day before they were released by Seema Verma, administrator of the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, an analysis by the Brookings Institution questioned the legality of the content and method of these concepts. The analysis by Christen Linke Young, a Brookings fellow and HHS employee during the Obama administration, contends that “there are serious questions” about whether the changes are allowable under the law and that “at the very least, it is likely invalid” for CMS to issue the advice to states without going through the formal steps to change federal regulations.

In a statement Thursday, HHS Secretary Alex Azar said: “The Trump administration is committed to empowering states to think creatively about how to secure quality, affordable healthcare choices for their citizens.” He said the four recommendations issued Thursday, including new accounts in which consumers could pool federal subsidies and other funds, are intended to “show how state governments can work with HHS to create more choices and greater flexibility in their health insurance markets, helping to bring down costs and expand access to care.”

In a midday speech before a gathering of the conservative American Legislative Exchange Council, Verma delivered a broadside against the health-care law in explaining the rationale for freeing states to rework health policies on their own. “It was such a mistake to federalize so much of health care in the ACA,” said Verma, who worked as a consultant to states before becoming one of Trump’s senior health-care advisers. While the law sought to make health coverage more available and affordable, she said, “the insurance problem has not been solved. For many Americans it’s even been made worse.”

In urging states to consider the changes, CMS is renaming a provision of the law, known as 1332, which until now has mainly been used to give states permission to create programs to ease the burden on insurers of high-cost customers. CMS is switching the name to “State Relief and Empowerment Waivers,” emphasizing the administration’s desire to hand off health-care policies to states.

The changes go beyond a variety of other steps Trump administration health officials have taken in the past year to weaken the ACA, which the president has opposed vociferously.

Until now, they have focused on bending the ACA’s rules for health plans themselves. The administration has rewritten regulations to make it easier for Americans to buy two types of insurance that is relatively inexpensive because it does not contain all the benefits and consumer protections that the ACA typically requires.

The new steps go further by undercutting the basic ACA structure of the individual insurance marketplaces created for those who cannot get affordable health benefits through a job.

During a conference call with journalists, Verma said that no state would be allowed to retreat from a popular aspect of the ACA that protects people with preexisting medical conditions from higher prices or an inability to buy coverage.

She said that, in evaluating states’ proposals, CMS would focus on several considerations, including whether changes would foster comprehensive coverage and affordability and would not increase the federal deficit. She said federal officials would favor proposals that help, in particular, low-income residents and people with complex medical problems.

Verma reiterated an administration talking point that insurance rates have escalated since the ACA was passed and that health plan choices within ACA marketplaces have dwindled. However, the current ACA enrollment period, lasting until mid-December, is different from the previous few because prices for the most popular tier of coverage have stabilized in many places and more insurers are taking part in the marketplaces.

 

We can’t afford to hire you

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We can’t afford to hire you

Abstract:  This article looks further into the value proposition of a sophisticated Interim Executive.

I have become accustomed to being ruled out of a beauty pageant for an Interim Executive consulting position based on rate alone.  In most cases, I am told by the decision maker about this problem after the fact.  It is common for the decision to be made without consulting me or giving me a chance to negotiate.  While I could have been flexible, my flexibility is limited by the opportunity cost of existing or potential competitive opportunities.  When I talked with the decision makers, they were frequently operating from the assumption that the gap was too big to close.  Instead, they lost an opportunity to get a resource with my background and experience while settling for an alternative solely based on cost.  It is clear that these decision makers severely discounted the potential value of engaging a more experienced resource.  Or, I could have simply been beat on price by an equally or better-qualified competitor but I doubt it.  I have seen too many cases of decision makers making what could be a critical decision based on the hourly rate alone.  Lest this come across as bitter, I have not failed to end up with a desirable engagement and I am generally happy with the outcome.  I have learned that as Mick Jagger said, “You can’t always get what you want.  But if you try sometime (sic), you find you get what you need.”  I cannot help but wonder how things are going in the organizations that passed me by.

What would some of the common excuses for a supposedly otherwise intelligent decision maker making a choice solely on rate?

We are in financial distress.  Interim Executive Services typically price on the experience and relevance of a proposed interim to a specific situation.  This is analogous to hiring a lawyer.  One of my friends liked to say that one of the worst things that can happen to you is to end up with the second best attorney in a critical situation.  To gain access to the best and most experienced talent in a law firm, you must be willing to pay the firm’s highest rates.  The reason that older, more experienced law firm partners’ rates are higher is that the market will bear their rates whatever they are because their time and expertise are in very high demand.  For those of us that make a living selling time, you are limited as to how much you can sell.  A firm in financial distress can end up in bankruptcy.  Another bad outcome for a firm in distress is to default on debt obligations that can result in the Board and leadership team losing control of the organization.  Banks and bondholders can and will accelerate the debt and take other actions to preserve their interests.  The pertinent question for the decision maker to make in this situation is what is the best resource available to avoid the undesired outcome regardless of cost because the cost of failure is infinitely higher.  If you think an Interim Executive is expensive, check the rates of bankruptcy attorneys and debtor in possession consultants.

I can get someone else for less money.  Inexperienced or ignorant people do not understand the differences between physicians.  They assume a doctor is a doctor is a doctor.  They do not understand the difference between a pathologist and a proctologist.  This is the kind of logic used by a decision maker that assumes that there is no difference in interim executives and places the first and/or cheapest resource they can find in an effort to get someone, anyone with a heartbeat into a position.  The pertinent question in this situation is what is the cost of failure and how small is this cost as a percentage of the cost of the cheapest resource available vs. a competent, experienced advisor.  I followed an interim CFO in a hospital that had somehow managed to miss a growing over-valuation of accounts receivable that ultimately led to a write-down of A/R in excess of $50 million and a number of executives including the CEO of the place losing their jobs.  Maybe the CEO should have looked at my article on how to avoid getting whacked.  In my experience, hiring decision makers rarely account for the personal career risk they may be taking by thier involvement in bringing an interim aboard.

We can absorb the workload.  This is one of my favorites.  Really?  Are you telling me that the departed executive did so little that a potentially prolonged vacancy of their position will not be missed and there is no risk in not having the role filled?  If this is the case, the decision maker should eliminate the position.  Just because the departed executive may have not been meeting the organization’s needs does not translate to their role not being worth filling with someone that knows what they are doing.  As a matter of fact, putting an experienced interim into a key role say CEO or CFO, might go a long way towards demonstrating to the organization how the role should be filled and carried out.  If you engage a sophisticated interim, there is a very good chance that the permanent executive you hire to ultimately fill the position will not come close to the value-adding potential of an experienced interim executive.  On this point, it is not a good idea nor is it fair to candidates to benchmark them against an experienced interim.  This makes it hard on everyone by unnecessarily delaying the recruiting process in some cases and potentially creating unreasonable expectations for a permanent candidate when there is a successful recruitment.

These are but a few of the excuses I have heard as reasons to rule me out of an Interim gig.  I am sure my readers can contribute others possibly spawning a series of articles on this topic.  One of the key things to remember if you are an interim executive as I said in my article about the value proposition of interim executives is what Zig Ziglar said, ‘You cannot control what someone else is going to do.  All you can control is how you respond.”  Don’t take rejection personally.  Remember, in baseball, a hitting failure rate of 70% or more is considered to be an excellent performance.  Another thing to think about is you never know what you may be saved from.  I can say from experience that I have been fortunate on more than one occasion to not get something I desperately wanted at the time.  You may never know the degree to which fate or divine intervention may be bearing on the outcome of one of your proposals.  If you are a decision maker, you owe it to yourself and those around you whose fate may be tied to yours to undertake the most objective, evidence-based decision-making process you are capable of whether the decision has to do with engaging an interim or any other key decision for that matter.

Contact me to discuss any questions or observations you might have about these articles, leadership, transitions or interim services.  I might have an idea or two that might be valuable to you.  An observation from my experience is that we need better leadership at every level in organizations.  Some of my feedback is coming from people that are demonstrating an interest in advancing their careers, and I am writing content to address those inquiries.

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