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With House conservatives’ resistance, ACA stabilization bills’ prospects get dimmer
Senate GOP leaders won a key swing vote for their tax bill by pledging to pass bipartisan legislation to shore up the Affordable Care Act. But now it looks like those measures’ chances of becoming law are getting dimmer.
Sen. Susan Collins, R-Maine, wants two bills to pass that she hopes will mitigate the effects of a provision in the tax bill that repeals the individual mandate: the Alexander-Murray bill, which would fund cost-sharing reduction payments for two years, and a bill she co-authored with Democrat Bill Nelson, which provides funding for states to establish invisible high-risk pool or reinsurance programs.
Collins voted for the Senate’s version of the tax bill—a critical win for GOP leaders, as they could only lose two votes and it failed to gain her support for previous ACA repeal bills. But she only did so after Senate Majority Leader Mitch McConnell assured her the two ACA stabilization measures would pass.
Yet while some lawmakers previously said those measures could be tacked on to the short-term spending bill Congress aims to pass this week, congressional aides now say it isn’t likely to be included, according to The Wall Street Journal. Further, while House conservatives have indicated strong support for repealing the individual mandate in the final version of the GOP tax bill, they are far from on board with the two ACA stabilization bills.
For example, Ohio Rep. Warren Davidson said he’s a “hard, hard, very hard no,” on the Alexander-Murray bill, per the WSJ article.
House Speaker Paul Ryan could also be a barrier to passing the two bills. His office told a meeting of congressional leadership offices on Monday that he wasn’t part of any deal between Collins and McConnell, The Hill reported. But his office didn’t say outright that it opposed the bills.
For her part, Collins said it will be “very problematic” if the ACA stabilization bills don’t pass, according to the WSJ. She also won’t commit to voting for the final version of the tax bill until she sees what comes out of a conference committee between the House and Senate.
Even if those measures do pass, there have been questions about whether they would do enough to soften the blow of repealing the individual mandate. The Congressional Budget Office has advised that the Alexander-Murray bill would do little to change its prediction that repealing the mandate would increase the uninsured rate and raise premiums.
A new analysis from Avalere found that Collins’ bill could help stabilize the individual market by increasing enrollment and reducing premiums in 2019, but the consulting firm’s experts cautioned that those effects could be overshadowed by repealing the individual mandate.
Study: ‘Big five’ insurers depend heavily on Medicare, Medicaid business
Even as they’ve retreated from the Affordable Care Act exchanges, the country’s biggest for-profit health insurers have become increasingly dependent on Medicare and Medicaid for both profits and growth.
In fact, Medicare and Medicaid accounted for 59% of the revenues of the “big five” U.S. commercial health insurers—UnitedHealthcare, Anthem, Aetna, Cigna and Humana—in 2016, according to a new Health Affairs study.
From 2010 to 2016, the combined Medicare and Medicaid revenue from those insurers ballooned from $92.5 billion to $213.1 billion. The companies’ Medicare and Medicaid business also grew faster than other segments, doubling from 12.8 million to 25.5 million members during that time.
All these positive trends, the study noted, helped offset the financial losses that drove the firms to reduce their presence in the individual marketplaces. Indeed, the big five insurers’ pretax profits either increased or held steady during the first three years of the ACA’s individual market reforms (2013-2016). Their profit margins did decline during those three years, but stabilized between 2014 and 2016.
Not only do these findings demonstrate the “growing mutual dependence between public programs and private insurers,” the study authors said, but they also suggest a useful policy lever. The authors argued that in order to help stabilize the ACA exchanges, federal and state laws could require any insurer participating in Medicare or state Medicaid programs to also offer individual market plans in those areas.
Nevada has already done something similar: It offered an advantage in Medicaid managed care contract billing for insurers that promised to participate in the state’s ACA exchange. The state credited that policy with its ability to coax Centene to step in and cover counties that otherwise would have lacked an exchange carrier in 2018.
It’s far less certain, though, whether such a concept will ever be embraced at the federal level during the Trump administration, since its focus has been on unwinding the ACA rather than propping it up.
Either way, recent events underscore the study’s findings about how lucrative government business has become for major insurers. One of the main goals of CVS’ proposed acquisition of Aetna is to improve care for Medicare patients, which would help the combined company “be more competitive in this fast-growing segment of the market,” CVS CEO Larry Merlo said on a call this week.
Aetna CEO Mark Bertolini added that the transaction has “incredible potential” for Medicare and Medicaid members, as the goal is to provide the type of high-touch interaction and care coordination they need to navigate the healthcare system.
CVS merger with Aetna: Health care cure or curse?
The announcement that CVS plans to acquire Aetna for US$69 billion raises hope and concerns.
The transaction would create a new health care giant. Aetna is the third-largest health insurer in the United States, insuring about 46.7 millionpeople.
CVS operates 9,700 pharmacies and 1,000 MinuteClinics. A decade ago, it also purchased Caremark and now operates CVS/Caremark, a pharmacy benefits manager, a type of business that administers drug benefit programs for health plans. CVS/Caremark is one of the three largest pharmacy benefits managers in the United States. Along with ExpressScripts and OptummRXTogether, these three control at least 80 percent of the market.
Should American consumers be happy or concerned about the proposed merger? As a professor of health law and bioethics, I see compelling arguments on both sides.
Good for consumers, or for the companies?
CVS and Aetna assert they are motivated by a desire to improve services for consumers and that the merger will lower health care costs and improve outcomes.
Many industry experts have postulated, however, that financial gain is at the heart of the deal.
CVS has suffered declining profits as consumers turn to online suppliers for drugs. Reports that Amazon is considering entry into the pharmacy business raise the specter of increasingly fierce competition.
The merger would provide CVS with guaranteed business from Aetna patients and allow Aetna to expand into new health care territory.
The heart of the deal
The merger would eliminate the need for a pharmacy benefits manager because CVS would be part of Aetna.
Pharmacy benefits managers, which sprang up in the early 2000s in response to rising costs of care, administer drug benefit programs for health plans. Most large employers contract with pharmacy benefits managers that are different from their health insurers.
Nevertheless, a consolidation along the lines of a CVS/Caremark and Aetna merger would not be unprecedented. The nation’s largest health insurance company, United Healthcare, operates its own pharmacy benefits manager, OptumRx.
Pharmacy benefits managers process and pay prescription drug claims, negotiate with manufacturers for lower drug prices, and can employ other cost-saving mechanisms. They thus act as intermediaries between the insurer and pharmacies.
They also make a lot of money. They have been controversial in recent years for how they do so, allegedly keeping a keener focus on profits than on patients.
The merger has not been finalized and requires approval from government regulators, which isn’t always easy to get. In 2016 the U.S. Department of Justice sued to block two health insurer mergers: one between Aetna and Humana and a second between Anthem and Cigna. The government objected on antitrust grounds, arguing that the mergers would unduly restrict competition. Both efforts were abandoned.
CVS and Aetna argue that their proposed merger is different. It is a vertical rather than a horizontal merger, which means that it would combine companies providing different services for patients (insurance and filling prescriptions) rather than two companies doing the same thing.
However, the Trump administration is currently opposing another vertical merger, that between AT&T and Time Warner. It is unclear whether the administration will likewise oppose the CVS/Aetna merger.
Benefits of a merger
There is some evidence that a merger could help consumers.
A merger could result in more negotiating power. Combining the power of a leading pharmacy and a top insurer may allow CVS/Aetna to negotiate more effectively for price discounts from drug and device manufacturers.
It also could cut out the middleman. PBMs themselves have been blamed for raising health care costs. They often do not pass on negotiated drug discounts to consumers, but rather keep the money themselves. In addition, many believe they “make money through opaque rebates that are tied to drug prices (so their profits rise as those prices do).” With the merger, CVS/Aetna would not need CVS/Caremark to function as an intermediary. Eliminating a profit-seeking middleman from the picture could lower consumer prices.
The merger could provide easy access to health care for minor injuries and illnesses. CVS said it plans to expand its MinuteClinics, walk-in clinics that provide treatment by nurse practitioners for minor conditions. Also, CVS said it would offer more services, such as lab work, nutritional advice, vision and hearing care, and more. Thus, CVS promises that its clinics will become “health hubs.”
Many patients could turn to these clinics instead of seeking more expensive care from physicians or emergency rooms. Furthermore, health hubs could provide “one-stop shopping” convenience for some patients. This could be particularly beneficial to elderly individuals or those with disabilities.
Another benefit could be improved and expanded data analytics, which could result in better care. Combining information from patients’ health insurers with that of their pharmacies, including nonprescription health purchases, may promote better care. CVS pharmacists and health hub providers would be able to monitor and counsel patients regarding chronic disease management, pain management, prenatal care and other matters. Such attention could reduce the risk of complications and hospitalizations and thus also decrease expenditures.
Increase of other risks?
Skeptics argue that the CVS/Aetna merger is unlikely to yield cost savings and improved outcomes. They note that mergers in the health care sector generally lead to higher, not lower, prices and worry about other adverse consequences.
If the market shrinks to fewer pharmacy benefits managers because of consolidation, costs may actually increase. The remaining pharmacy benefits managers may have little incentive to compete with each other by demanding discounts from drug companies. As noted above, they may actually profit from higher pharmaceutical prices and thus welcome increases.
After the merger, Aetna may require those it insures to use only CVS pharmacies. In addition, it may require individuals to turn to CVS MinuteClinics for certain complaints even if patients prefer to visit their own doctors. Such restrictions would mean less choice for consumers, and many may find them to be very distressing.
The merger could also decrease competition and bar other companies from entering the pharmacy market. For example, Aetna may refuse to cover prescription drugs that are not purchased from CVS. In that case, Amazon may find it extremely difficult if not impossible to break into the industry. Less competition, in turn, often means higher prices for consumers.
It is difficult to predict the precise consequences of a CVS/Aetna merger. One way or another, however, its impact will likely be significant.
10 Questions to Ask Your Employees Every Quarter
MOST LEADERS (the less than great ones) can become afraid of learning their employees’ true feelings towards the company and its overall structure. In turn, they shy away from even initiating such conversations and asking the important questions.
Strong leaders, on the other hand, happily ask these questions with an eye on making things better for their team. When everyone is heard and acknowledged, only then can a leader make the right decisions and give each employee what he or she needs. If you don’t ask, who will?
1. What is your overall satisfaction with your team?
This question is pretty straightforward, but perhaps the most powerful. As a manager, it allows you to gain access to the big picture—providing key understanding on what’s working and what isn’t, directly from your staff. It’s no secret that dissatisfaction with overall team performance is a primary reason for top talent to exit. Taking the initiative to ask your employees for feedback, and frequently, will not only provide you with valuable insight, but put you in a position to rectify concerns before the damage is done.
2. If the best place you’ve ever worked was a 10, please rate your current company.
You’ll either be the 10, or you won’t. If you are not, don’t become defensive or offended, ask what specifically was better at your employee’s previous company. Then compare it to your current team and ask yourself, as the leader, would it be possible to adopt some of those successful strategies?
3. How well does your leader do with supporting and developing you? (Consider time, tools and training.)
One of the top responses on employee satisfaction surveys, across the board, is how well we do with making our people a better version of themselves. If you are not actively investing in your employees, they will eventually move on to find someone who will. Do you give them enough of your time? Do you give them the right tools to compete and win? Do you train them in new skills and technologies that allow them to be more effective?
4. How well does your leader hold you accountable?
This is very important to a high-performance culture. Highly engaged and highly accountable teams outperform those who lack both. When you have the right people in the right seats, the best employees don’t mind being held accountable for their actions and their results. Those standards are what make them feel “elite.” After all, who wants to be part of a team that anyone can be a part of? If they are accountable, they know others are held accountable too, and that’s one of the main ingredients to employees giving their best day in and day out.
5. How well does your leader hold OTHERS accountable?
This question smokes out if your employees feel like there is any favoritism or double standards in play at your company. Obviously, you want to treat everyone on the team the same, but sometimes that doesn’t happen. Oftentimes you’ll discover that leadership and the “favorites” get a pass and the troops get the stick. When leaders are held to a higher standard and not a special one, you’ll find that it’s much easier to get buy-in and acceptance for so many things that seem tough to get. This is particularly relevant to family-owned businesses, where your last name matters more than it should.
6. How well does your leader communicate with you?
When discussing performance issues with their employees, I often find leaders have failed to communicate clear expectations and a clearly defined process of how they expect their employees to perform. The leaders are then bewildered that the task hasn’t been accomplished to their satisfaction. Leaders need to ensure that proper communication has been achieved before moving on to work on other things. An easy way to accomplish this is to simply ask, “OK, do you feel like you’ve got it?” (Almost always expect a “yes” answer, even when it’s really a “kind of” or a “no.”) Then say, “Great! Now echo that back to me, just to make sure I’ve explained this well to you?” By doing so, you’ll then have the opportunity to get crystal clear with them. Without this important step, prepare for some fuzziness in your employees’ results.
7. How likely are you to recommend your company to a friend that is looking for work?
This is like the Net Promoter Score for you as a leader, and for the company at large. If they were at a BBQ with their friends on a weekend and the topic came up, how do you think your team would respond? Would your employee say, “You’d be lucky to get hired. My company is world-class!” Or would the conversation be more like, “Well, if you can get past a ton of B.S., politics and red tape, you can grind out a living just like I do!”
8. Rate your team “health.”
To give you a gauge for their response, a 10 is when trust is very high, there is heathy conflict, nothing is personal, when something is called out for not being ideal, no one gets defensive or upset because everyone is there to make things as good as they can possibly be. A one is when people are not speaking the truth, everyone is walking around on eggshells, and it’s better for your career to not rock the boat and to go with the flow.
9. Do you feel adequately recognized for your contributions to the team?
This is another top response that I see on employee satisfaction surveys. Employees work hard, sometimes stay late, give their all and go above and beyond. If they aren’t recognized for these sacrifices, they will usually stop these activities because they don’t seem to matter. Sometimes others unjustly steal credit for their work, or leaders are simply oblivious to their contributions. What is your format to make sure this doesn’t happen at your company?
10. How likely are you to seek advancement at your company?
This is a great way to identify your next leaders. It also speaks to how your leaders are perceived by the staff. If they feel your managers are a bit of a joke, are clueless and cannot imagine themselves being one of those types, you might have a bigger issue on your hands. Not everyone wants to be a leader, and that is perfectly OK. If they say no, ask why, but don’t try to “sell” management to them. It’s better to understand what their reasons are and to respect them.
The sum of all of these questions together will give you valuable information on where you are doing well and where needs immediate attention. If you ask these 10 questions every 90 days, you can compare your team’s last quarter responses and spot any problem areas before things get too caustic to your beloved culture. Again, if you don’t ask, you are guessing, and that might not work out well for you, or for your team!
HENRY KOTULA 