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Tag Archives: Competition
What can we expect in healthcare with Clinton, Trump?
Now that our presidential nominees are set and the general election has begun, what do our nation’s hospitals and health systems need to do, whether Secretary Clinton or Mr. Trump is elected in November? They, and their parties, offer stark contrasts, but what will they mean for hospitals?
CMS needs to halt the march to health care gigantism
From a major speech by Sen. Elizabeth Warren to a recent report from the President’s Council of Economic Advisers, there has been a renewed interest by Democrats in monopolies and market consolidation. From tech to airlines, they argue, too many sectors of the economy are being dominated by a few big players.
In American health care, this is not only the case, but has been the default preferred stance. In health care, there is an almost Darwinian belief that the evolution to bigger is better. This is why last year saw 112 hospital mergers (up 18 percent from 2014), and the percentage of physician practices owned by hospitals doubled between 2004 and 2011.
Yet, there is no evidence that consolidation of hospitals and physician practices leads to better clinical outcomes or cost reductions. In fact, recent studies suggest that small, physician-owned practices have a lower average cost per patient, fewer preventable hospital admissions, and lower readmission rates than hospital-owned practices.
That is why it is so unfortunate that, as part of the largest rewriting of doctor payment rules in a generation, the Centers for Medicare and Medicaid Services (CMS) unwittingly has drafted regulations that—as currently proposed—further neglect the power of physician independence and create strong incentives for further consolidation in health care.
UCSF, John Muir dramatically expand, rename Bay Area health network
UCSF Health and John Muir Health have dramatically expanded — and renamed — their year-old Bay Area accountable care network, adding seven new hospitals and three new medical groups to the enterprise.
The hope is that the network will be competitive with giants like Kaiser Permanente and Sutter Health. The network’s new brand name — Canopy Health — is intended to reach out to the broad Bay Area community, network CEO Joel Criste told the Business Times Wednesday.
“We’re off and running,” UCSF Health CEO Mark Laret added, in a Wednesday afternoon interview. Laret called Canopy Health’s recent growth spurt “the beginning of something that could be very big,” potentially a model for hospitals and medical groups nationally to use as a template, and a strong, multi-hospital and medical group alternative to Kaiser Permanente, in particular.
Hill Physicians Medical Group, one of Northern California’s largest independent practice associations, the East Bay’s Muir Medical Group IPA and the North Bay’s Meritage Medical Network have quietly joined in recent months, as shareholders and participating providers in the venture, officials told the Business Times.
The two founding organizations still hold the largest stakes and are clearly running the show, however.
The new additions give the network more than 4,000 affiliated doctors in the Bay Area, which in turn gives more clout when competing with regional rivals like Kaiser and Sutter.
“It’s an important step that allows them to position themselves as a system to compete with Kaiser, Sutter and Stanford Health Care,” among others, said Walter Kopp, a longtime Bay Area hospital and medical group consultant.
Standard & Poor’s puts Aetna, Humana on credit watch following DOJ move to block merger
S&P Global Ratings has placed Aetna and Humana on creditwatch following the Department of Justice’s announcement Thursday to block their merger.
S&P said it has placed its ratings on Aetna on creditwatch with developing implications, and on Humana and its core subsidiaries on creditwatch with negative implications.
The DOJ also blocked the merger between Anthem and Cigna on Thursday. S&Psaid its ratings on the two insurers would remain on creditwatch negative, where they were placed on June 21, 2015.
Anthem and Aetna have both said they would fight the DOJ’s injunction against their respective mergers in court.
For Anthem’s proposed $53 billion acquisition of Cigna, litigation could be difficult and time-consuming, S&P said.
DOJ sues to block Aetna-Humana, Anthem-Cigna mergers
Value-Based Drug Pricing: Watch Out for Side Effects
What would penicillin cost under value-based pricing, a system in which drug makers set prices based on the benefits of their products to consumers and the larger society, rather than drugs’ costs of production? Penicillin has saved millions of lives since its first use in 1942, and it still works for many patients despite growing bacterial resistance to the drug. (Fortunately, many fewer patients get infections with pneumococcus now because we have a good vaccine for it.) Surely, under value-based pricing, penicillin would sell for thousands or tens of thousands of dollars a dose.
10 states with the costliest employer-sponsored health insurance
The Agency for Healthcare Research and Quality recently released data from its Medical Expenditure Panel Survey, a large-scale study of families, individuals, providers and employers in the U.S. concerning the cost and use of healthcare and health insurance.
Here are the 10 states with the costliest employer-sponsored health insurance in 2015, listed with the average single premium per enrolled employee at private-sector organizations:
Anthem-Cigna Deal: Seeking Merger Approval, Anthem Makes Major Donations To State Political Groups
Seeking regulatory approval for a controversial merger proposal, health insurer Anthem recently pumped $460,000 into groups supporting the election campaigns of governors and state attorneys general. The money was disclosed in second-quarter campaign finance reports reviewed by International Business Times.
Those federal filings, which were released by the Internal Revenue Service late Friday, show Anthem gave $210,000 to the Republican Governors Association, $200,000 to the Democratic Governors Association in the last three months. In many states, the insurance commissioners reviewing the proposed Anthem-Cigna mega-merger are appointed by governors. The cash to state officials is on top of $50,000 Anthem gave to a Democratic-affiliated political group called “Unity Convention 2016.”
The money to the DGA is particularly notable because the group is headed by Connecticut Gov. Dannel Malloy, whose insurance commissioner, Katharine Wade, runs the agency leading the national multistate review of the deal. Anthem money flowed to the DGA in June amid an ethics probe prompted by IBT’s investigative series documenting Wade’s personal and familial ties to Cigna.
Malloy has refused to force Wade to recuse herself from the merger review, at a time when Anthem and Cigna have increased their donations to the DGA, which backed his campaigns and which he has chaired since late 2015. In all, the DGA has raised a total of $1.1 million from Anthem and Cigna since Malloy began the process of nominating Wade to the insurance post in 2015. That sum is 37 percent more than the group raised in the entire 2014 election cycle, and almost half of the total campaign contributions the companies have given the group in the last decade.
iFHP cost report highlights cause for concern over lack of provider competition
The International Federation of Health Plans (iFHP) today released its2015 Comparative Price Report, detailing its annual survey of medical prices per unit. Designed to showcase the variation in healthcare prices around the world, the report examines the price of medical procedures, tests, scans and treatments in seven countries.
The report undercuts the idea of what’s being played out in the recent Sutter Health case which alleges the health system is overcharging insurers causing medical costs to be pushed downstream to patients. Last Friday, the suit was allowed to seek class-action status. Matthew Cantor, partner and attorney at Constantine Cannon and lead lawyer for the plaintiffs, told Healthcare Dive the plaintiffs allege to have contracts which require health plans to purchase all the hospital services that Sutter provides in Northern California.
Sutter is “leveraging its larger power in those markets to say to these health plans that they have to also purchase Sutter Health hospital services elsewhere and not only do they have to purchase them but they have to purchase those Sutter services at higher, super competitive prices,” Cantor said, adding that this, in turn, raises the costs of medical services to health plans. These higher costs, Cantor said, are then sent downstream to insurance policyholders.
“Competition is not working,” Sackville told Healthcare Dive. “The market’s not working because if it was, no one would get away with charging $17,000 [for a day of hospital care].”
The report put a focus on the lack of provider competition and consolidation. There’s been a fair amount of consolidation in various states and more systems are pursuing the idea of mergers or partnerships. Such activity, in theory, could bring down competition in an area and tick up costs for consumers as hospitals’ market power grows. “Powerful hospital systems have the ability to raise the prices of medical care. Health plans have no alternative but to take these forced, higher costs upon them because [if they refused] then no one would buy their insurance,” Cantor told Healthcare Dive.
HENRY KOTULA 