AARP, United Healthcare and CVS keep prescription drug prices higher for seniors

Posted on by • Posted in 2020 Election Issues, Generic Drugs, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, High Deductible Health Plans, High Drug Prices, Out of Pocket Expenses, Pharmaceutical Industry, Pharmacy Benefits Management • Leave a comment

https://www.washingtontimes.com/news/2020/feb/11/aarp-united-healthcare-and-cvs-keep-prescription-d/

Illustration on overpriced prescription drugs for seniors by Alexander Hunter/The Washington Times

ANALYSIS/OPINION:

Most folks think of the AARP as a membership organization that gives older Americans discounts on magazine subscriptions and cellphone plans. In fact, those business lines are secondary to AARP’s real source of income, a lucrative partnership with United Healthcare.

AARP partners with United Healthcare to offer health insurance plans to its membership. On its face, there’s nothing inappropriate about this type of affinity branding; the problem is that United Healthcare (and, frankly, other insurance companies) have made some decisions at the expense of seniors and the Medicare program, which should run counter to what a seniors-focused advocacy organization endorses. Recent actions by United Healthcare to limit seniors’ access to less expensive versions of Medicare drugs calls into question whether the AARP is looking out for older Americans or its own bottom line.

During the past three years, President Trump has maintained a laser focus on drug prices, causing pharmaceutical companies to respond in a variety of ways, including reducing or, in some instances, halting altogether annual price increases, pledging responsible pricing for new medications and reducing the price of medicines in certain instances.

For example, last year Eli Lilly launched a half-price version of its insulin drug, Humalog, to address affordability barriers for diabetic patients. Gilead created a subsidiary company in order to offer its two revolutionary hepatitis C products, Harvoni and Epclusa, as “authorized generics” at prices more than 70 percent lower than the identical brand version. In 2018, two companies competing in the cardiovascular space, Sanofi and Amgen, each introduced less costly versions of their cholesterol medications for patients who are unresponsive to statins — at 60 percent below the original price. These are all big wins for Mr. Trump’s jawboning campaign.

But the system is not working: These less expensive versions of innovative drugs are not available to many seniors because of how insurance companies and their negotiators (known as “pharmacy benefit managers” or PBMs) design drug coverage via formularies, particularly in Medicare. A perfect case study is cardiovascular disease, the No. 1 cause of death in the United States: For the past 14 months, in many instances, United Healthcare formulary design kept patients on the more expensive versions of the Sanofi and Amgen cholesterol medicines which came coupled with a high out-of-pocket co-insurance for the patient. Further, CVS (which is merging with insurance company Aetna) admitted to creating barriers for patients by requiring doctors to provide a “documented clinical reason” for prescribing the identical, cheaper version of the same medicine. Today in Medicare, CVS continues to block affordable access to the lower cost versions by not covering these medicines anywhere on their national formulary, effectively dissuading a patient at high risk for a heart attack or stroke from purchasing the medicine prescribed by his/her cardiologist.

Why would insurance companies and PBMs want to keep paying for the more expensive version of an identical drug? The answer lies in the backward way drugs are priced in America. Drug manufacturers set the “list price” of a drug the same way a car dealership lists the price of cars or colleges list the price of tuition. What’s actually paid by an insurer in the final transaction is usually steeply discounted from the starting price by the drug company “rebating” a portion — 40 percent on average, oftentimes more — to the PBM/insurance company (which then pocket it). That negotiation should result in reduced out-of-pocket drug costs for seniors. The problem is that this model results in perverse incentives.

Medicines have high “list prices” because the drug company knows that it will need to provide significant discounts/rebates in order to be listed on a health plan’s formulary. Positive formulary placement = patient access to a medicine. Insurance companies and PBMs like the higher list prices because they profit from both the steep, negotiated rebates and the higher co-insurance the patient pays to the plan. In Medicare, once a patient barrels through the initial drug coverage phase, the federal government picks up 80 percent of a senior’s drug costs, reducing the insurer’s liability. In the end, it’s patients who suffer at the pharmacy counter and in the long run.  

 

 

 

 

30 latest hospital credit rating downgrades

Posted on by • Posted in Credit Quality, Credit Ratings, Health System, Hospital, Hospital Industry • Leave a comment

https://www.beckershospitalreview.com/finance/30-latest-hospital-credit-rating-downgrades.html

OR Efficiencies

The following 30 hospital and health system credit rating downgrades occurred in the past six months. They are listed below in alphabetical order.

1. Altru Health System (Grand Forks, N.D.) — from “A-” to “BBB” (Fitch Ratings); from “Baa1” to “Baa2” (Moody’s Investors Service)

2. Augusta (Ga.) University Health System — from “Baa1” to “Baa3” (Moody’s Investors Service); from “BBB” to “BBB-” (S&P Global Ratings)

3. Bibb County Medical Center (Centreville, Ala.) — from “BBB+” to “BB” (S&P Global Ratings)

4. Boone Hospital Center (Columbia, Mo.) — from “Baa2” to “Ba1” (Moody’s Investors Service); from “A-” to “BBB” (Fitch Ratings)

5. Covenant Health (Tewksbury, Mass.) — from “BBB+” to “BBB” (Fitch Ratings)

6. Delta (Colo.) County Memorial Hospital — from “BB+” to “BB” (S&P Global Ratings)

7. Erlanger Health System (Chattanooga, Tenn.) — from “Baa2” to “Baa3” (Moody’s Investors Service)

8. Excela Health (Greensburg, Pa.) — from “A3” to “Baa1” (Moody’s Investors Service)

9. Fairfield Medical Center (Lancaster, Ohio) — from “Baa3” to “Ba2” (Moody’s Investors Service)

10. Hospital Sisters Health System (Springfield, Ill.) — from “AA-” to “A+” (S&P Global Ratings)

11. Indiana (Pa.) Regional Medical Center — from “Ba1” to “Ba2” (Moody’s Investors Service)

12. Integris (Oklahoma City) — from “A1” to “A2” (Moody’s Investors Service)

13. Mercy Medical Center (Des Moines, Iowa) — from “A” to “A-” (S&P Global Ratings)

14. Methodist Hospitals (Gary, Ind.) — from “BBB” to “BBB-” (S&P Global Ratings)

15. Murray (Ky.) Calloway County Hospital — from “Baa3” to “Ba2” (Moody’s Investors Service)

16. Nicklaus Children’s Hospital (Miami) — from “A+” to “A” (S&P Global Ratings)

17. OSF HealthCare (Peoria, Ill.) — from “A2” to “A3” (Moody’s Investors Service)

18. Parmer County (Texas) Hospital District — from “Baa1” to “Baa2” (Moody’s Investors Service)

19. Princeton (W.Va.) Community Hospital — from “BBB+” to “BBB” (S&P Global Ratings)

20. ProMedica Health System (Toledo, Ohio) — from “Baa1” to “Baa3” (Moody’s Investors Service); from “BBB+” to “BBB” (Fitch Ratings)

21. Regional West Health Services (Scottsbluff, Neb.) — from “BBB” to “BB+” (Fitch Ratings)

22. Sanford Health (Sioux Fall, S.D.) — from “A1” to “A2” (Moody’s Investors Service)

23. South Nassau Communities Hospital (Oceanside, N.Y.) — from “Baa1” to “Baa2” (Moody’s Investors Service)

24. Southeastern Regional Medical Center (Lumberton, N.C.) — from “A-” to “BBB+” (Fitch Ratings)

25. Sparrow Health System (Lansing, Mich.) — from “A1” to “A2” (Moody’s Investors Service)

26. St. John’s Riverside Hospital (Yonkers, N.Y.) — from “B-” to “CCC+” (S&P Global Ratings)

27. St. Luke’s Hospital (Chesterfield, Mo.) — from “A+” to “A” (S&P Global Ratings)

28. Tower Health (West Reading, Pa.) — from “A” to “BBB” (Fitch Ratings); from “A3” to “Baa2” (Moody’s Investors Service)

29. University of Chicago Medical Center — from “A1” to “Aa3” (Moody’s Investors Service)

30. Winkler County Memorial Hospital (Kermit, Texas) — from “AA” to “BB+” (S&P Global Ratings)

 

 

 

Trump budget calls for cutting Medicaid, ACA by about $1 trillion

Posted on by • Posted in 2020 Election Issues, ACA, Health Policy, Medicaid, Medicare • Leave a comment

Trump budget calls for cutting Medicaid, ACA by about $1 trillion

Image result for medicaid cuts

President Trump’s proposed budget includes about $1 trillion in cuts to Medicaid and the Affordable Care Act over a decade, analysts said.

The budget released Monday includes $844 billion over 10 years in cuts from the “President’s health reform vision,” a stand-in for the repeal and replacement of ObamaCare. There are also more than $150 billion in additional cuts from implementing Medicaid work requirements and other changes to the program, which would result in some people losing coverage if they did not meet the requirements.

The cuts drew swift condemnation from Democrats, who pointed out that Trump himself promised not to cut Medicaid, the health insurance program for the poor, during his 2016 campaign.

“I’m not going to cut Medicare or Medicaid,” Trump said in 2015, adding, “Every other Republican is going to cut it.”

“Americans’ quality, affordable health care will never be safe with President Trump,” Speaker Nancy Pelosi (D-Calif.) said in a statement on the budget proposal.

A senior administration official defended the Medicaid cuts, arguing reforms will help preserve the program for people who need it most. “The Budget protects and preserves Medicaid by putting it on a sustainable path, so it can continue to provide vital services to those who need it the most, including children, the disabled, elderly and pregnant women,” the official said.

In contrast to previous years, the budget does not spell out how Trump proposes to repeal and replace ObamaCare. Instead, the budget gives a savings number of $844 billion that could come from any number of possible changes to Medicaid or the health law’s exchanges and subsidies. 

One policy that is specified is that the budget calls for ending the additional federal funding that helped states expand Medicaid to cover more people under the Affordable Care Act, with officials arguing states can step up their spending if they want to expand the program.

The health system “black market” for care

Posted on by • Posted in Access, Access & Quality of Healthcare, Black Market, Consumerism, Insider Healthcare, Physician, Primary Care • Leave a comment

https://mailchi.mp/192abb940510/the-weekly-gist-february-7-2020?e=d1e747d2d8

Image result for black market

Recently we’ve been working with one of our member health systems to build a comprehensive plan for ambulatory access. As we were brainstorming a list of success metrics, one physician leader made an interesting comment: “I’ll know we’re successful at improving access when people stop calling me asking to get their mom or husband or friend into a specialist.”

The other leaders in the room all nodded in agreement. While we’re all happy to assist friends and family with finding the best doctor for their problem, or getting in more quickly, these leaders recognized that these informal channels represent yet another level of inequality in our healthcare system: patients and families who can tap into “insider” provider connections have access to a “black market” of enhanced access and information that can expedite treatment, assuage worry, and potentially provide better outcomes.

Thinking about eliminating the need for the healthcare black market broadened our discussion of a successful access solution. Getting a quick appointment doesn’t fully solve the problem, patients want to be assured they’re seeing the “best” doctor for their problem—meaning the system needs to have a better process for matching new patients to the most appropriate provider.

One call to tap into the “black market” can eliminate a dozen frustrating calls and dead ends; any solution must also address the many friction points in finding the right care. A tall order for sure, but one that could address one large inequity in our healthcare system: the difference between people who know someone on the inside and those who don’t.

 

 

Humana doubles down on its primary care strategy

Posted on by • Posted in Health Insurance Industry, Medicare Advantage, Primary Care, Private Equity, Venture Capital • Leave a comment

https://mailchi.mp/192abb940510/the-weekly-gist-february-7-2020?e=d1e747d2d8

Image result for Humana doubles down on its primary care strategy

Humana, the nation’s second largest Medicare Advantage (MA) insurer, is partnering with a private equity (PE) firm to expand its senior-focused subsidiary medical group, Partners in Primary Care.

The arrangement will be structured as a joint venture between Humana and Welsh, Carson, Anderson & Stowe, with a combined initial $600M investment that will give the PE firm majority ownership of the medical group. The new venture is likely to double the number of centers that Humana’s Partners in Primary Care operates—currently 47 throughout Texas, Kansas, Missouri, Florida and the Carolinas.

While Humana has been looking to grow its MA membership, patients need not be Humana members to access care at the centers. Humana has established other partnerships in the physician practice space, including last fall’s announcement that it is teaming up with Iora Health to add 11 additional Iora-branded primary care practices to its MA networks in Arizona, Georgia, and Texas.

Humana has previously partnered with private equity to acquire postacute providers Kindred Healthcare and Curo Health Services. These latest moves suggest the company is shifting its focus to the front end of the delivery system, looking to control costs of care for seniors by quickly building a primary care physician network focused on reducing high-cost referrals to hospitals and specialists.