There Is No Single, Best Policy for Drug Prices

There Is No Single, Best Policy for Drug Prices

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A majority of Americans prefer greater regulation of prescription drug prices, meaning government intervention to lower them.

But don’t count on a single policy to address a nuanced problem.

“All low-priced drugs are alike; all high-priced drugs are high priced in their own way,” Craig Garthwaite, a health economist from Northwestern University’s Kellogg School of Management, wrote with a colleague.

Outside of a few government programs — like Medicaid and the Veterans Health Administration — low-priced drugs are alike in that competition is the sole source of downward pressure on prices. When many generic versions of a brand-name drug enter the market, competition can push their prices 80 percent below the brand price, or sometimes even more.

In contrast, high-priced drugs lack competition for various reasons, “not all of which imply our goal should be to reduce prices,” Mr. Garthwaite said.

 

 

 

Family of four faces $25,000 in average annual unsubsidized ACA costs in 2019

https://www.healthcarefinancenews.com/news/families-four-face-25000-average-annual-unsubsidized-aca-costs-2019?mkt_tok=eyJpIjoiTjJVNE9HTm1OelEwTlRkaiIsInQiOiJsaDZIK0JaczhmMFBzWElmSDluT1VROHc3ckM2azFCZ0NvUnR2U2NmYlRIa2VnYkw2dnR1NmJEMnFrcEFVZUVVSEpVTjlBcXkxaXZaSFFlUFR6djBvRjBTM2NpRFFQMXBDQkRVaFpQSEVtMVFTRlNqUTRBaUxTUmg2MnNrVXFiYiJ9

Costs for two- and four-person families rose despite overall premiums being relatively flat compared to last year.

Average 2019 health insurance premiums are $1,403 per month for families of four who don’t qualify for subsidies under the Affordable Care Act, according to a report released today by eHealth.

The 2019 Health Insurance Index Report analyzes costs and trends among unsubsidized consumers who purchased individual and family coverage for the 2019 plan year at eHealth during the ACA’s most recent open enrollment period. eHealth, Inc. dba as eHealthInsurance, is a private online marketplace for health insurance.

The data and research is focused on ACA market consumers who earn too much per year to qualify for government subsidies that help to reduce what they spend on insurance premiums and out-of-pocket costs. The new report is based on individual and family health insurance applications submitted by unsubsidized eHealth consumers between November 1 and December 15, 2018.

WHAT’S THE IMPACT

While overall premiums were relatively flat compared to the 2018 open enrollment period, costs for two- and four-person families hit a couple of new milestones.

The first is that total combined annual premiums plus deductibles for a four-person family topped $25,000 for 2019. The second is that average premiums for two-person families broke $1,000 per month for the first time this year.

Deductibles marked their first significant decline since 2014, when the ACA took effect. he average individual deductible decreased 6% for 2019, while the average family deductible decreased 8%.

Plan selection trends for 2019 show that HMO plans continue to dominate the market, representing 56% of all plan selections, the same as in 2018.

Meanwhile, exclusive provider organization, or EPO plans reach 26% of all plan selections, up from 20% in 2018; and silver plans reach 35% of all plan selections, up from 30% over last year.

THE LARGER TREND

An estimated 87% of Healthcare.gov customers received subsidies. Their premium cost after subsidies is $87 a month, according to the report. But costs borne by the unsubsidized are significantly greater. At eHealth during the fourth quarter of 2018, which included the ACA’s 2019 open enrollment period, 64% of applications were for consumers purchasing ACA-compliant plans not eligible for use with subsidies.

Premiums for those with employer-sponsored health insurance plans have also been on the rise.

Between 2008 and 2018, such premiums increased 55 percent — twice as fast as workers’ earnings, according to a June report from Kaiser Family Foundation. And since 2006, the average health insurance deductible for covered workers soared by more than 200 percent — from an inflation-adjusted average of $379 to more than $1,300 today.

 

Michigan’s Beaumont Health to acquire Ohio-based Summa Health

https://www.healthcarefinancenews.com/news/michigans-largest-health-system-acquire-ohio-based-summa-health?mkt_tok=eyJpIjoiTjJVNE9HTm1OelEwTlRkaiIsInQiOiJsaDZIK0JaczhmMFBzWElmSDluT1VROHc3ckM2azFCZ0NvUnR2U2NmYlRIa2VnYkw2dnR1NmJEMnFrcEFVZUVVSEpVTjlBcXkxaXZaSFFlUFR6djBvRjBTM2NpRFFQMXBDQkRVaFpQSEVtMVFTRlNqUTRBaUxTUmg2MnNrVXFiYiJ9

Beaumont Health will gain a health insurance arm in SummaCare.

Michigan-based Beaumont Health will gain a health insurance operation and opportunities for significant regional expansion as part of its acquisition of Summa Health, headquartered in Akron, Ohio.

The not-for-profit health systems announced their intent to merge last week in a deal that’s expected to close by the end of the year.  Among other benefits, the merger will add four hospitals, a health plan, and managed care expertise to Beaumont’s overall portfolio.

Financial terms were not disclosed.

WHY THIS MATTERS

These are big players in their respective markets. Beaumont is among Michigan’s largest healthcare systems and includes eight hospitals and a total annual net patient revenue of $4.7 billion.

Summa Health is among the largest such organizations in Ohio, encompassing a network of four hospitals, community health centers, a health plan, a physician-hospital organization, and a multi-specialty physician organization. The company reports total annual revenues of $1.4 billion.

Summa Health, which began seeking a partner in September 2018, will keep its name and some degree of local control.

THE LARGER TREND

The Beaumont-Summa deal is the latest merger to form a regional health system that allows two entities to share operational capabilities and care models across state lines but within a contiguous geography.

ON THE RECORD

“By welcoming Summa into the Beaumont family, both organizations will share expertise, invest in each other and continue to thrive as the industry evolves,” Beaumont Health CEO John Fox said.

“Since the formation of Beaumont Health, we have invested significantly in our Michigan employees, facilities and communities. We will continue to do so. One of our strategic goals is to become a regional healthcare leader. The planned addition of Summa Health allows us to take one step closer to achieving this key strategic priority,” Beaumont Health Board Chair John Lewis added.

 

 

 

One State’s Big Leap to Reduce Medicare and Medicaid’s Out-of-Pocket Costs

https://www.governing.com/topics/health-human-services/gov-long-term-care-gap.html?utm_term=One%20State%27s%20Big%20Leap%20to%20Reduce%20Medicare%20and%20Medicaid%27s%20Out-of-Pocket%20Costs&utm_campaign=Five%20States%20Still%20Don%27t%20Have%20a%20Budget.%20Here%27s%20Why.&utm_content=email&utm_source=Act-On+Software&utm_medium=email

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Washington state is going further than any other to cover aging Americans’ medical bills.

More than 15 percent of Americans have already reached the age of 65, and by 2030 that number will have risen to one in five as the last of the baby boomers reach retirement age. Despite these numbers, insurance options to cover the long-term health-care needs that many aging Americans will need are elusive. While Medicare pays for medical services in a nursing facility, it covers the cost of the stay itself only for short stints. And Medicaid typically covers long-term care only for those Americans with virtually no assets.

It’s an issue that state legislatures are continually revisiting, but overall there’s been little progress toward meeting the full health-care costs of the elderly. This year, however, the state of Washington passed legislation that will go further than any other state in closing coverage gaps for a large proportion of its residents.

The program will be funded by a wage tax of about 0.6 percent, which kicks in in 2022. Beginning in 2025, the state will offer a maximum lifetime benefit of $36,500 for a person to use for long-term care needs, with the benefit indexed to rise annually with inflation. The coverage isn’t universal: To use the money — up to $100 a day — a resident will need to have worked and paid into the program for at least three years in the past six or for a total of 10 years with five years of uninterrupted work. In addition to the standard stay in a nursing home, the benefit will cover items such as installing wheelchair ramps at home and providing services such as those offered at an assisted living facility or by in-home care.

A challenge for the state will be to make sure that as residents’ paychecks reflect the new wage tax, they understand where their money is going. “We need a backstock of resources, and that’s what this does,” says Jason McGill, health policy adviser to Gov. Jay Inslee. “They might not know what they’re paying into, and it’s our next step to communicate what that is and why it’s important.”

While Washington’s approach is broader than most, advocates say there are plenty of other ways to chip away at the unaffordability of health care for the elderly. “It’s not one thing or the other. It’s a series of policy changes that will change the landscape,” says Elaine Ryan, vice president for state advocacy and strategy integration at AARP.

Ryan lists helping with caregiver expenses as a good place to start, given that the average out-of-pocket cost for a caregiver is $7,000 a year. Hawaii took such a step in 2017 with legislation providing $70 a day for up to a year for caregiver expenses. A couple of other states are weighing tax credits for caregiving costs, and a bipartisan federal bill taking that approach is pending.

Another step that would lessen the burden of long-term health care costs would be to implement more flexible sick-leave policies that would make it easier for employees to care for aging relatives. “It’s hard to believe you don’t have that for anything other than your own health,” says Ryan.

Whatever approaches a state considers must be framed around the need for options across the continuum of a person’s life, in Ryan’s view. “We need these systems to be more contemporary,” she says. “That’s why when we communicate the need for these policies at the state level, we refer to them as a whole-family caregiving journey.”

 

CHS shares close at all-time low

https://www.beckershospitalreview.com/finance/chs-shares-close-at-all-time-low-071619.html

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Shares of Franklin, Tenn.-based Community Health Systems closed July 15 at $2.40, their lowest closing price ever and down 2 percent from July 12. 

The hospital chain’s stock price traded as low as $2.37 and as high as $2.52 on July 15 after closing July 12 at $2.45. Over the past year, CHS shares have traded between $2.35 and $5.35.

CHS has been selling off hospitals in recent years to improve its financial position and reduce its heavy debt load. In late 2017, the company announced a plan to sell a group of hospitals with combined annual revenue of $2 billion. During an earnings call on April 30, CHS Chairman and CEO Wayne Smith said the company expects to complete the hospital divestiture plan in 2019.

CHS carried $13.88 billion in long-term debt when it announced its divestiture plan at the end of 2017. As of March 31, CHS said its long-term debt totaled $13.39 billion.