GOP floats Medicare changes while ducking details

Posted on by • Posted in Health Policy, Healthcare Reform, Medicare, Medicare Cuts, Partisanship • Leave a comment

https://www.axios.com/2022/11/03/gop-floats-medicare-reform

Some House Republicans aren’t waiting for the election to think about overhauling Medicare. But it’s hard to tell if there are specifics behind the talking point.

Why it matters: Past GOP attempts to cut Medicare landed with a thud, and Democrats in recent weeks have been hammering on the message that Republicans are intent on gutting the program.

  • The critical moment could be next year’s talks on the debt ceiling, if Republicans flip one or both houses of Congress.

What they’re saying: “If we’re going raise the debt ceiling, we can’t just raise it without focusing on some way to address the debt and the deficit,” Rep. Bruce Westerman (R-Ark.), a member of the House GOP’s health care task force, told Axios, adding Medicare should be made “sustainable over time.”

  • “We’re going to have a lot of hearings on this,” Rep. Jason Smith (R-Mo.), the current top Republican on the Budget Committee who wants to move up to chairman of Ways and Means, told Axios. “I’m not going to get into the inner details.”
  • “Everything is on the table, we haven’t really nailed down any specific policies one way or the other,” Rep. Buddy Carter (R-Ga.), who is running to chair the House Budget panel. “I think it could be wrapped up with that [debt ceiling talks], that’s shaping up to be pretty dynamic.”

Yes, but: Not all Republicans are eager to kick off their time in the majority with another grinding health care fight against a Democratic president. Health policy experts are also skeptical of how realistic Medicare reform may be, recalling failed GOP agendas from the pre-Trump years.

  • Senate GOP Leader Mitch McConnell (R-Ky.) earlier this year rebuked a plan from Sen. Rick Scott (R-Fla.) that would sunset all federal legislation every five years — including entitlement programs. McConnell told reporters a plan that “sunsets Social Security and Medicare within five years … will not be part of the Republican Senate majority agenda.”
  • House GOP Leader Kevin McCarthy (R-Calif.) raised eyebrows when he told Punchbowl News last month that he wouldn’t “predetermine” if Medicare and Social Security would be involved in talks on raising the debt ceiling. McCarthy later tried to clarify in a CNBC interview that “I never mentioned Social Security or Medicare.”
  • Joseph Antos, a senior fellow and health care scholar at the American Enterprise Institute, puts the odds of Medicare reform as “pretty unlikely,” adding, “I don’t see any major changes happening over the next two years, and I think Republicans might wait to see what Medicare policies the Republican presidential candidate will push.”

The big picture: While a GOP Medicare push is not certain, Democrats are seizing on the possibility.

  • “They’re coming after your Social Security and Medicare in a big way,” President Biden said Tuesday in a speech in Florida, saying Republicans would create “chaos” by risking government default over demands to raise the debt limit next year.

Between the lines: Republicans are not being specific about the changes they would push. But there’s a limited universe of possibilities.

  • The proposed budget of the Republican Study Committee, an influential group of House Republicans, includes proposals like raising the Medicare eligibility age to 67 to align with Social Security, and converting Medicare to a “premium support” system where seniors received a subsidy they could use on private plans competing against traditional Medicare.
  • Tricia Neuman, a Medicare expert at the Kaiser Family Foundation, said such a policy would have “uneven” results, where “some could save money but others might have to pay a whole lot more.”
  • Other GOP-backed Medicare changes are less partisan, like “site neutral” reforms to pay hospital outpatient departments the same rates as doctors’ offices, though hospitals oppose those measures.
  • The Committee for a Responsible Federal Budget, recently issued a fiscal blueprint to reduce the budget deficit, which included reforms such as changing Medicare provider payments, benefit design and payroll taxes, but included nothing about changing eligibility requirements.

The bottom line: Republicans point to the Medicare trust fund’s projected insolvency date in 2028 to argue change is needed to make the program sustainable. But any change is hard, and cuts that hit beneficiaries are not the only way to seek savings.

  • “McCarthy won’t shoot down talk of addressing debt because it matters to him and his caucus, and you can’t do debt without entitlement reform, but he knows at this point there’s no interest from Democrats, and any entitlement reform will require serious political capital from Ds and Rs,” said a former GOP leadership aide. “The last time those conversations happened in a meaningful way was in 2011.”

For hospitals, ‘difficult decisions’ loom after 9 months of negative margins

Posted on by • Posted in Financial Reporting, Financial Strength, Financial Viability, Financially Distressed, Health System, Hospital, Hospital Industry, Net Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue, Utilization Trends • Leave a comment
https://www.beckershospitalreview.com/finance/for-hospitals-difficult-decisions-loom-after-9-months-of-negative-margins.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

The third quarter brought little relief to hospitals in what is shaping up to be one of their worst financial years. 

Kaufman Hall’s October National Hospital Flash Report — based on data from more than 900 hospitals — found slightly lower hospital expenses in September did not outweigh lower revenue across the board, with decreases in discharges, inpatient minutes and operating minutes.

The median year-to-date operating margin index for hospitals was -0.1 percent in September, marking a ninth straight month of negative operating margins and a dimmer outlook for their climb back into the black by year’s end. 

Kaufman Hall noted that expense pressures and volume and revenue declines could force hospitals to make “difficult decisions” about service reductions and cuts. 

“Health systems are starting to get a clear picture of what service lines have a positive effect on their margins and which ones are weighing them down,” said Matthew Bates, managing director and Physician Enterprise service line lead with Kaufman Hall. “Without a positive margin there is no mission. Health systems must think carefully and strategically about what areas of care they invest in for the future.”

Health systems suffer while payer profits soar

Posted on by • Posted in Health Insurance Industry, Health System, Hospital, Hospital Industry, Net Income, Operating Margin • Leave a comment
https://www.beckershospitalreview.com/finance/health-systems-suffer-while-payer-profits-soar.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Large health systems are reporting big losses this year while insurers continue to turn billion-dollar profits.

Humana reported $1.2 billion in third quarter profits, a slight drop from the same period last year. The company has focused on regaining Medicare Advantage market share and increased quarterly revenues 10.2 percent year over year.

Cigna’s third quarter profits jumped 70 percent year over year, hitting $2.8 billion. The company reported $45.3 billion in third quarter revenues and raised its annual earnings outlook based on the results. The company now projects $179 billion for full year 2022 adjusted revenue.

CVS Health also beat investor expectations in the third quarter and raised its earnings outlook. The company’s third quarter revenue jumped almost 10 percent year over year to $81.2 billion, although it reported $3.4 billion in losses after agreeing to pay into a $5 billion global opioid lawsuit settlement over 10 years.

At the same time, health systems are reporting multimillion and even billion-dollar losses. Chicago-based CommonSpirit Health reported $1.3 billion operating loss for the 12-months end on June 30. Ascension, based in St. Louis, also reported a $1.8 billion loss for the fiscal year’s end in June.

Community Health System reported a $42 million net loss for the third quarter in October and both Dallas-based Tenet Healthcare and Nashville, Tenn.-based HCA Healthcare reported more than 50 percent drops in quarterly net income from 2021 to 2022.

The profitability mismatch between the nation’s largest payers and health systems of all sizes will be front and center during contract negotiations in the coming year. There have already been high profile contract impasses between insurers and large systems, with some leading to contract termination.

An overhaul for Medicare’s pay transformation program

Posted on by • Posted in ACA, Accountable Care Organization (ACO), Alternative Payment Model, American Medical Association (AMA), Health Policy, Medicare Shared Savings Program (MSSP), Population Health, Value Based Care Model, Value-Based Healthcare • Leave a comment
https://www.axios.com/2022/11/02/overhaul-medicares-pay-transformation-program?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

The Biden administration is trying to jump start a Medicare program that pays health providers based on patient outcomes rather than by how many services they perform.

Why it matters: The alternative payment effort was created through the Affordable Care Act, but participation has plateaued since 2018 amid waning interest from providers.

Driving the news: The Biden administration finalized an overhaul of the initiative, known as the Medicare Shared Savings Program, on Tuesday. Changes include offering groups of providers in rural and other underserved areas upfront payments to help them start out in the program.

  • The rule includes other provisions to make it less financial risky for provider groups to join, and makes it easier for participants to earn money back from the government year after year — a central perk of joining the program.

Zoom out: Medicare traditionally pays on a “fee-for-service” basis pegged to the number of patients seen and volume of procedures performed.

  • But one of the main funding sources for Medicare is set to run dry in 2028 if the federal government doesn’t make changes. Advocates say the solution at least partially lies in value-based care programs, like the Shared Savings Program.
  • Under the program, doctors, hospitals and other providers join form groups known as accountable care organizations. ACOs take responsibility for the care of a set of traditional Medicare patients.
  • If ACOs reduce total care costs for their members, they can get back a portion of that savings from the government. ACOs at more advanced stages of the program must pay the government back if total patient spending crosses a threshold.

By the numbers: ACOs have saved the federal government more than $17 billion since 2012, according to the National Association of Accountable Care Organizations.

  • In 2022, 483 ACOs participated in the program and took care of more than 11 million Medicare enrollees. But that’s down from 517 ACOs participating in 2020.
  • CMS set a goal last year to bring all 63 million-plus Medicare beneficiaries into a value-based care model by 2030. ACOs are a key player in achieving the goal.

Go deeper: Providers and value-based care advocates are also pushing Congress to extend a 5% pay bump for providers that participate in advanced alternative payment models, including some tracks of the Medicare Shared Savings Program. The bonus expires Dec. 31.

  • “If the bonus is not continued, it will soften or dampen the momentum toward alternative payment models, because it would create this mentality, or the view, that we’re not serious about that transformation,” said Mara McDermott, vice president at McDermott+Consulting and executive director of the Value Based Care Coalition.
  • Losing the bonus would also make it harder to recruit new providers into alternative payment models, she added.
  • The American Medical Association and five other health care groups launched a separate coalition Tuesday to rally around an extension of the 5% bonus.
  • “Patients and the healthcare system in the United States quite literally cannot afford to return to the days before Medicare incentivized healthcare providers for generating good results,” Clif Gaus, CEO of the National Association of ACOs, said in a news release about the coalition.

Also notable: The rule finalized Tuesday outlines physician payment rates for 2023. Interventional radiologists and vascular surgeons will see the largest Medicare cuts among physician specialties next year, though the final cuts are slightly lower than what CMS proposed in July.

  • Congress could stave off the cuts when they come back to Washington later this month.
  • “The Medicare payment schedule released today puts Congress on notice that a nearly 4.5 percent across-the-board reduction in payment rates is an ominous reality unless lawmakers act before Jan. 1,” American Medical Association President Jack Resneck said in a statement.
  • CMS finalized a slew of other policy proposals Tuesday, including provisions to reduce barriers to behavioral health care.

Gaming out the winners and losers of health care inflation

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https://www.axios.com/2022/11/02/health-care-prices-inflation-employers-insurers-providers?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Employers, patients or taxpayers could be on the hook for hundreds of billions of dollars in additional health spending if providers and insurers successfully shift those inflation-driven costs, according to a recent McKinsey analysis.

Why it matters: The health care sector’s profits are severely at risk, per the analysis. But key players could yet dodge the bullet coming their way.

By the numbers: The analysis predicts a $370 billion increase in U.S. health expenses by 2027, thanks to rising labor and supply costs.

  • McKinsey also surveyed health care leaders, who reported an expected drop in margins between 25 and 75%. This “could necessitate drastic responses,” per the analysis.

Between the lines: These rising costs will initially be borne by providers. It will likely take years for them to shift costs to commercial insurers or the government through contract negotiations or changes to federal reimbursement.

  • Insurers will attempt to pass along their increased costs to employers, who will then have to decide whether to pass along the costs to workers.

Yes, but: “Rate increases are unlikely to offer a way out,” the authors warn.

  • “While they may seem like the easiest path, payers recognize that price increases beyond historical levels are unsustainable; therefore, other actions will be needed. The actual financers of healthcare — employers, government, and consumers — can’t afford more than historical levels of increase, if that.”

The next health care wars are about costs

Posted on by • Posted in ACA, Affordability, Cost Management, Cost Reduction, Cost Shifting, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Healthcare Industry, Healthcare Reform, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Out of Pocket Expenses, Political Lobbying • Leave a comment
https://www.axios.com/2022/11/02/health-care-costs-congress-insurance-politics?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

All signs point to a crushing surge in health care costs for patients and employers next year — and that means health care industry groups are about to brawl over who pays the price.

Why it matters: The surge could build pressure on Congress to stop ignoring the underlying costs that make care increasingly unaffordable for everyday Americans — and make billions for health care companies.

[This special report kicks off a series to introduce our new, Congress-focused Axios Pro: Health Care, coming Nov. 14.]

  • This year’s Democratic legislation allowing Medicare to negotiate drug prices was a rare case of addressing costs amid intense drug industry lobbying against it. Even so, it was a watered down version of the original proposal.
  • But the drug industry isn’t alone in its willingness to fight to maintain the status quo, and that fight frequently pits one industry group against another.

Where it stands: Even insured Americans are struggling to afford their care, the inevitable result of years of cost-shifting by employers and insurers onto patients through higher premiums, deductibles and other out-of-pocket costs.

  • But employers are now struggling to attract and retain workers, and forcing their employees to shoulder even more costs seems like a less viable option.
  • Tougher economic times make patients more cost-sensitive, putting families in a bind if they get sick.
  • Rising medical debt, increased price transparency and questionable debt collection practices have rubbed some of the good-guy sheen off of hospitals and providers.
  • All of this is coming to a boiling point. The question isn’t whether, but when.

Yes, but: Don’t underestimate Washington’s ability to have a completely underwhelming response to the problem, or one that just kicks the can down the road — or to just not respond at all.

Between the lines: If you look closely, the usual partisan battle lines are changing.

  • The GOP’s criticism of Democrats’ drug pricing law is nothing like the party’s outcry over the Affordable Care Act, and no one seriously thinks the party will make a real attempt to repeal it.
  • One of the most meaningful health reforms passed in recent years was a bipartisan ban on surprise billing, which may provide a more modern template for health care policy fights.
  • Surprise medical bills divided lawmakers into two teams, but it wasn’t Democrats vs. Republicans; it was those who supported the insurer-backed reform plan vs. the hospital and provider-backed one. This fight continues today — in court.

The bottom line: Someone is going to have to pay for the coming cost surge, whether that’s patients, taxpayers, employers or the health care companies profiting off of the system. Each industry group is fighting like hell to make sure it isn’t them.

RSV: A pediatric disease expert answers 5 questions about the surging outbreak of respiratory syncytial virus

Posted on by • Posted in Coronavirus, Coronavirus Mutation, Flu Season, Public Health, Respiratory Syncytial Virus (RSV) • Leave a comment
https://theconversation.com/rsv-a-pediatric-disease-expert-answers-5-questions-about-the-surging-outbreak-of-respiratory-syncytial-virus-193275?utm_medium=email&utm_campaign=Latest%20from%20The%20Conversation%20for%20November%202%202022%20-%202451124538&utm_content=Latest%20from%20The%20Conversation%20for%20November%202%202022%20-%202451124538+CID_a823b024f65ed8ee16b8ed5051d4edfd&utm_source=campaign_monitor_us&utm_term=A%20chart%20showing%20the%20number%20of%20positive%20RSV%20tests%20from%20October%202020%20to%20October%202022%20One%20line%20shows%20the%20number%20of%20positive%20PCR%20detections%20and%20the%20other%20shows%20the%20number%20of%20antigen%20test%20detections

Respiratory syncytial virus, more commonly known as RSV, sends thousands of children to the hospital every year in the U.S. But during September and October 2022, health professionals across the country have watched an unprecedented spike in the number of cases of this usually mild, but occasionally dangerous, respiratory infection in children. Jennifer Girotto is a pharmacist who studies pediatric infectious diseases. She explains how RSV infects the human body, who is most at risk and what might be causing this year’s outbreak to be worse than normal.

1. What is respiratory syncytial virus?

RSV is a common, RNA respiratory virus that affects about 2 million children under 5 years old annually nationwide. Researchers think that most children have been infected by age 2. Like the flu, in most areas of the U.S., RSV usually circulates from November through March and then mostly disappears during the summer months, with only sporadic cases being seen.

2. Who is most at risk?

A microscope image of thin blue lines among cells.
Respiratory syncytial virus – highlighted in blue – infects cells in a person’s lungs, throat and nose and can lead to anything from a mild cold to pneumonia and croup in more severe cases. National Institute of Allergy and Infectious Diseases/Wikimedia Commons, CC BY

For most people, especially those who have had an RSV infection in the past, the virus only causes mild symptoms like cough, runny nose and fever, with instances of wheezing and decreased appetite more common in young children.

But young infants, especially those under 6 months old, born prematurely or with congenital heart, lung or other health issues are at increased risk for more severe symptoms. The U.S. Centers for Disease Control and Prevention estimates that 1% to 2% of infants younger than 6 months who get infected with RSV require hospitalization. In an average year, around 250 children die from the disease.

In recent years, researchers have found that RSV can also cause severe disease in high-risk adults and people older than 65..

3. How does RSV make people sick?

The main reason RSV sends babies and young children to the hospital is because the virus infects and kills surface cells within small sacs of the lungs. The body responds by increasing the production of mucus and fluid in these areas. But the extra mucus can plug up and obstruct these parts of the lung and make it so that an infant doesn’t get enough oxygen.

A second common cause for hospitalization due to RSV is pneumonia, where a person’s lungs fill up with fluid. The pneumonia can either be triggered by the virus itself or by a secondary, bacterial infection. Finally, some infants get so sick that they struggle to eat and are unable to take in sufficient nutrients, eventually landing them in the hospital.

4. How concerning is this year’s outbreak?

On average, RSV sends about 60,000 young children to the hospital each year in the U.S. In 2022, however, the virus has hit early and hard. According to the CDC, doctors have found more cases in each week of October than any week in the prior two years.

Health officials aren’t yet sure why the outbreak is so bad this year, but the COVID-19 pandemic may have something to do with it. Some research has shown that seasonality of RSV has shifted. In 2021, RSV infections started much earlier than normal, and over the summer of 2022, they never quite went away. One theory as to why RSV season is starting earlier and hitting harder is that, due to social distancing measures since 2020, an unusually high number of infants and children are experiencing their first exposures and infections at once.

5. How can you protect against catching RSV?

Like colds and the flu, RSV infections spread when people touch dirty surfaces or from respiratory droplets, when an infected person coughs or sneezes.

Health professionals recommend that premature infants and infants with certain medical conditions take a monthly monoclonal antibody medication, called Palivizumab, during the RSV season to help keep them out of the hospital. There are a few RSV vaccines under development, but none are yet approved. For now, preventative measures are the best way to avoid an infection.

If someone is sick with symptoms that look like a cold, it may be best to avoid close contact until they feel better, especially if you have young children or high-risk people around.

Massachusetts’ 19K vacant hospital jobs: ‘Our healthcare system has never been more fragile’

Posted on by • Posted in Deferred Healthcare, Demand, Employee Staffing Shortage, Health System, Hospital, Hospital Industry, Inflation, Labor Shortages, Labor Spend Management, Market Outlook, Market Trends, Market Uncertainty, Nurse Agency Staffing, Nurse Staffing, Nurses Shortage, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Vacancy Rate • Leave a comment
https://www.beckershospitalreview.com/finance/massachusetts-19k-vacant-hospital-jobs-our-healthcare-system-has-never-been-more-fragile.html?utm_medium=email&utm_content=newsletter

There are an estimated 19,000 full-time job vacancies across Massachusetts acute care hospitals, according to a survey published Oct. 31 by the Massachusetts Health & Hospital Association.

Hospitals are working to address backlogs and transfer patients to post-acute care settings while skyrocketing labor costs — including a projected $1 billion in travel labor costs this year — are compounding healthcare facilities’ financial woes, according to the report. These challenges are hampering hospital operations as well as leading to care delays and reduced access to care.

Fewer workers mean that fewer beds are available for patients, while the demand for care increases due to deferred care throughout the COVID-19 pandemic, the behavioral health crisis and reduced access to community-based services continue to challenge hospitals throughout the state. At any given time, more than 1,500 patients are in acute hospital beds awaiting placement to a specialized behavioral health bed or post-acute care, according to the MHA.

“Our healthcare system has never been more fragile, and its leaders have never been more concerned about what’s to come in months ahead,” Steve Walsh, president and CEO of the MHA, said in an Oct. 31 news release shared with Becker’s Hospital Review. “They are exhausting every option within their control to confront these challenges, but this is an unsustainable reality and providers are in dire need of support.”

In response to the survey, 37 hospitals — representing 70 percent of the state’s total hospital employment — reported 6,650 vacancies among 47 positions critical to hospital operations and clinical care. The positions range from direct care nurses to lab personnel and clinical support staff. Eighteen of the 47 positions have a vacancy rate greater than 20 percent. 

At a 56 percent vacancy rate, licensed practical nurses is the most in-demand position, while home health aides (34 percent), mental health workers (32 percent), infection control nurses (26 percent) and CRNAs (24 percent) are also highly sought after.

Survey respondents identified 6,650 vacancies. The 47 positions included in the survey, which was conducted this summer, account for less than half of all hospital roles. The MHA said it extrapolated that across all positions and hospitals to arrive at an estimated 19,000 vacancies across the state.

Staffing shortages are driving labor costs to an unsustainable level for many hospitals already grappling with margins close to zero or in the red. Hospitals have relied on high-cost temporary staffing to fill critical positions during the pandemic, resulting in average hourly wage rates for travel nurses increasing 90 percent since 2019, according to the report. Massachusetts hospitals reported spending $445 million on temporary registered nurse staffing halfway through the fiscal year, with temporary RN staffing costs increasing 234 percent from fiscal year 2019 to March 2022.

If urgent steps are not taken to address healthcare’s staffing shortage, hospitals will continue to face capacity challenges and overpay for labor, which will lead to fiscal instability, according to Mr. Walsh. 

The MHA urged providers, payers, public officials and government agencies to address the workforce crisis by investing in training and education, expanding the workforce pipeline, providing financial support to hospitals and advancing new models of care such as telehealth and at-home care.