10 Notable Health Care Events of 2018

https://www.commonwealthfund.org/blog/2018/10-notable-health-care-events-2018?omnicid=CFC%25%25jobid%25%25&mid=%25%25emailaddr%25%25

2018

Between the fiercely competitive midterm elections and ongoing upheaval over the Trump administration’s immigration policies, 2018 was no less politically tumultuous than 2017. The same was true for the world of health care. Republicans gave up on overt attempts to repeal and replace the Affordable Care Act (ACA) through legislation, but the administration’s executive actions on health policy accelerated. Several states took decisive action on Medicaid and some of the struggles over the ACA made their way to the courts. Drug prices remain astronomically high, but public outrage prompted some announcements to help control them. At the same time, corporate behemoths made deeper inroads into health care delivery, including some new overtures from Silicon Valley. Here’s a refresher on some of the most notable events of the year.

1. The ACA under renewed judicial assault

Texas v. Azar, a suit brought by Texas and 19 other Republican-led states, asked the courts to rule the entire ACA unconstitutional because Congress repealed the financial penalty associated with the individual mandate to obtain health insurance that was part of the original law. District Judge Reed O’Connor ruled in favor of the plaintiffs, creating confusion at the end of the ACA’s open enrollment period, and setting up what may be a years-long judicial contest (yet again) over the constitutionality of the ACA. To learn more about the legal issues at stake, see Timothy S. Jost’s recent To the Point post.

2. Turnout for open enrollment in health insurance marketplaces surged at the end of the sign-up period

The federal and state-based marketplaces launched their sixth enrollment season on November 1 for individuals seeking to buy health coverage in the ACA’s individual markets for 2019. Insurer participation remained strong and premiums fell on average. While some states have extended enrollment periods, HealthCare.gov, the federal marketplace, closed on December 15. After lagging in the early weeks, enrollment ended just 4 percent lower this year than in 2017.

3. The administration continues efforts to hobble ACA marketplaces

While the reasons behind lower enrollment cannot be decisively determined, executive action in 2018 may have contributed. The Trump administration dramatically cut back federal investments in marketplace advertising and consumer assistance for the second year in a row. The federal government spent $10 million on advertising for the 34 federally facilitated marketplaces this year (the same as last year but an 85 percent cut from 2016) and $10 million on the navigator program (down from $100 million in 2016), which provides direct assistance to hard-to-reach populations.

4. Insurers encouraged to sell health plans that don’t comply with the ACA

Another tactic the Trump administration is using to undercut the ACA is increasing the availability of health insurance products, such as short-term health plans, that don’t comply with ACA standards. Short-term plans, previously available for just three months, can now provide coverage for just under 12 months and be renewed for up to 36 months in many states. These plans may have gaps in coverage and lead to costs that consumers may not anticipate when they sign up. By siphoning off healthy purchasers, short-term plans and other noncompliant products segment the individual market and increase premiums for individuals who want to — or need to — purchase ACA-complaint insurance that won’t discriminate against people with preexisting conditions, for example.

5. Medicaid expansion in conservative states

Few states have expanded Medicaid since 2016, but in 2018, a new trend toward expansion through ballot initiatives emerged. Following Maine’s citizen-initiated referendum last year, Idaho, Nebraska, and Utah passed ballot initiatives in November to expand Medicaid. Other red states may follow in 2019. Medicaid expansion not only improves access to care for low-income Americans, but also makes fiscal sense for states, because the federal government subsidizes the costs of newly eligible Medicaid enrollees (94 percent of the state costs at present, dropping to 90 percent in 2020).

6. Red states impose work requirements for Medicaid

A number of states submitted federal waivers to make employment a requirement for Medicaid eligibility. Such waivers were approved in five states — Arkansas, Kentucky, Wisconsin, New Hampshire, and Indiana — and 10 other states are awaiting approval. At the end of 2018, lawsuits are pending in Arkansas and Kentucky challenging the lawfulness of work requirements for Medicaid eligibility. About 17,000 people have lost Medicaid in Arkansas as a result of work requirements.

7. Regulatory announcements respond to public outrage over drug prices

Public outrage over prescription drug prices — which are higher in the U.S. than in other industrialized countries — provided fodder for significant regulatory action in 2018 to help bring costs under control. Of note, the Food and Drug Administration announced a series of steps to encourage competition from generic manufacturers as well as greater price transparency. The U.S. Department of Health and Human Services in October announced a proposed rule to test a new payment model to substantially lower the cost of prescription drugs and biologics covered under Part B of the Medicare program.

8. Corporations and Silicon Valley make deeper inroads into health care

Far from Washington, D.C., corporations and technology companies made their own attempts to alter the way health care is delivered in the U.S. Amazon, Berkshire Hathaway, and J.P. Morgan Chase kicked 2018 off with an announcement that they would form an independent nonprofit health care company that would seek to revolutionize health care for their U.S. employees. Not to be outdone, Apple teamed up with over 100 health care systems and practices to disrupt the way patients access their electronic health records. And CVS Health and Aetna closed their $69 billion merger in November, after spending the better part of the year seeking approval from state insurance regulators. In a surprise move, a federal district judge then announced that he was reviewing the merger to explore the potential competitive harm in the deal.

9. Growth in health spending slows

The annual report on National Health Expenditures from the Centers for Medicare and Medicaid Services estimates that in 2017, health care spending in the U.S. grew 3.9 percent to $3.5 trillion, or $10,739 per person. After higher growth rates in 2016 (4.8%) and 2015 (5.8%) following expanded insurance coverage and increased spending on prescription drugs, health spending growth has returned to the same level as between 2008 to 2013, the average predating ACA coverage expansions.

10. Drug overdose rates hit a record high

Continuing a tragic trend, drug overdose deaths are still on the rise. The Centers for Disease Control and Prevention reported 70,237 fatalities in 2017. Overdose deaths are higher than deaths from H.I.V., car crashes, or gun violence, and seem to reflect a growing number of deaths from synthetic drugs, most notably fentanyl. 2018 was the first year after President Trump declared the opioid crisis a public health emergency. National policy solutions have so far failed to stem the epidemic, though particular states have made progress.

As we slip into 2019, expect health care issues to remain front and center on the policy agenda, with the administration continuing its regulatory assault on many key ACA provisions, Democrats harassing the executive branch with House oversight hearings, both parties demanding relief from escalating pharmaceutical prices, and the launch of health care as a 2020 presidential campaign issue.

 

 

Consolidating California: Concentrated Provider Markets and Rising Prices

http://www.healthleadersmedia.com/finance/consolidating-california-concentrated-provider-markets-and-rising-prices?utm_source=edit&utm_medium=ENL&utm_campaign=HLM-FIN-SilverPop_04092018&spMailingID=13279518&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1380773897&spReportId=MTM4MDc3Mzg5NwS2#

A UC Berkeley study suggests that provider and insurer consolidation is increasing, reducing competition in regional markets, and leading to higher healthcare prices across California.

In the midst of a nationwide consolidation trend, California is witnessing a swell of mergers among health providers and insurers, resulting in higher prices for consumers and large-scale employers across the state.

A recent study found most counties in California, especially those in the rural northern portion of the state, have highly concentrated hospital markets, noting provider consolidation rose as average insurer consolidation decreased statewide.

The report, released last month by the Nicholas C. Petris Center on Health Care Markets and Consumer Welfare School of Public Health at the University of California, Berkeley, concluded that Californians pay for healthcare services that are “considerably above what a more competitive market would produce.”

Of the 54 counties surveyed, 44 were highly concentrated hospital markets and six were moderately concentrated. According to the study, seven of these counties warrant “concern and scrutiny” by the Department of Justice and the Federal Trade Commission.

The report found from 2010 to 2016, there was a 15% increase in physicians working for a foundation owned by a hospital or health system rather than physician practices, due in part to health system mergers, as well as a 13% increase for primary care physicians, and a 29% increase for specialist physicians.

Additionally, the study found 42 counties surveyed for commercial health plans were highly concentrated while 16 were moderately concentrated. The study also recommended federal agencies review the concentration levels of the insurer market in seven counties.

Breeding anticompetitive behavior

Bill Kramer, MBA, executive director for national health policy at the Pacific Business Group on Health, told HealthLeaders Media the consolidation trend in California is a “serious problem” that employers have been dealing with for years.

Kramer said large health systems, physician groups, and health plans recognize that consolidation leads to increased market power, which in turn provides the opportunity to raise healthcare service prices above what is allowed in a competitive marketplace.

Two weeks ago, California Attorney General Xavier Becerra sued northern California’s Sutter Health, for anticompetitive practices. Sutter, a health system with $12.4 billion in operating revenue in 2017, is charged with foreclosing price competition on its competitors, imposing prices for healthcare services exceeding a competitive market value, and restricting negotiations with insurers to an “all-or-nothing” basis.

Since 2014, Sutter has also been the focus of a class-action lawsuit filed by a grocery worker’s health plan alleging violation of antitrust and unfair competition laws.

“When a provider or any other healthcare entity gains significant market share, it can use that power to negotiate higher prices,” Kramer said. “But they also can put in place mechanisms that strengthen their market power further. That’s what [Becerra] and complainants in this other lawsuit have alleged, that anticompetitive behavior further strengthens their market power and their ability to raise prices. It’s all part of the same picture.”

State and federal blocks on insurers, not providers

Becerra’s lawsuit against Sutter is not the first time state or federal officials have stepped in to address concerns in California’s healthcare industry.

In June 2016, California Insurance Commissioner Dave Jones requested the federal government block the proposed Aetna-Humana merger, citing concerns about an “already heavily concentrated commercial insurance” market. A federal judge agreed with his request and blocked the move in January 2017.

Despite recent and growing recognition among state and federal officials that action must be taken, Kramer says provider consolidation remains an issue without a simple solution. Efforts to enact antitrust statutes against health system mergers in recent years have not always been successful, and are often looked at as the “nuclear option” by industry watchers.

A potential path to offsetting provider consolidation is greenlighting insurer consolidation, though Kramer says there is mixed evidence about whether that would be effective. He said some argue that two large industries competing against each other can result in lower prices, while others claim there is no guarantee that consumers will see lower prices if savings are secured by insurers.

The Berkeley report recommends legislative and regulatory action to address “significant variation” in prices and Affordable Care Act (ACA) premiums across the state, specifically suggesting the implementation of reference pricing by public marketplaces and private employers.

Kramer says the consolidation dilemma is not unique to California, which offers state officials a chance to adopt proactive measures taken by other states to address rising healthcare costs associated with consolidation.

In 2011, Massachusetts Attorney General Martha Coakley authored a report similar to the Berkeley study that analyzed the rise in high prices due to health system mergers. The study ultimately led to the creation of the Health Policy Commission in 2012, with the purpose of monitoring healthcare prices in the state.

NoCal versus SoCal

Another important aspect of the consolidation trend in California is the divide between the rural northern counties and the more populous southern metropolitan area.

Northern California is a sparsely populated region dominated by large health systems, giving insurers less leverage to negotiate prices. A 2017 study from the Bay Area Council Economic Institute (BACEI), the Center for Health Policy at Brookings, and The Nelson A. Rockefeller Institute of Government found that the hospital concentration in northern counties, where only two insurers cover the entire region, is five times higher than the Inland Empire.

Micah Weinberg, PhD, president of BACEI, told HealthLeaders Media the consolidation trend is not tied to one particular factor such as geography.

BACEI’s report cited the consolidation of a few health systems in northern California as a “perennial concern” and driver of rate variation between regions. However, Weinberg said that when low-price, for-profit systems in southern California are removed from the equation, there is a fair amount of parity between prices charged there compared to those charged in northern California.

Related: 3 Reasons Why Health Insurers and PBMs Are Merging

According to Weinberg, another aspect to California’s healthcare market that affects prices has been the implementation of a “very successful experiment” in managed competition through the state exchange. In 2010, California became the first state to create its own insurance marketplace under the ACA.

He argues that Covered California, the state’s insurance marketplace, has standardized healthcare products, instituted financial incentives for providers to embrace limited networks, and fostered competition.

“What that does is it emphasizes the importance of not only payers and providers, but of the structure of the marketplace, in which consumers are making choices across different provider groups linked to particular insurance plans,” Weinberg said.

The BACEI report did cite the ACA as an unintended driver of increased regional consolidation among providers, which has made achieving profitability in northern California a challenge for insurers such as UnitedHealth Group Inc., which exited the statewide ACA marketplace entirely in 2016.

 

 

A warning from the polls about letting Obamacare “explode”

https://www.axios.com/a-warning-from-the-polls-about-letting-obamacare-explode-2347777457.html

Image result for A warning from the polls about letting Obamacare "explode"

President Trump has said the Democrats will take the fall politically if and when Obamacare “explodes.” But new polling shows that the public will hold Trump and the GOP accountable for failing to address problems in the marketplaces, not the Democrats. That means they’ll have to think twice about some of the moves they might make that could make the Affordable Care Act’s problems worse.

What’s on the line: The polling has direct implications for some of the specific actions Republicans could take, or not take, in the months ahead:

  • Eliminating the $7 billion in federal cost sharing subsidies to insurers to compensate them for providing smaller deductibles to lower income enrollees.
  • No longer enforcing the individual mandate that helps get younger, healthier people into the insurance pools to lower premium costs.
  • No longer marketing the healthcare.gov plans to boost enrollment.

These steps would cause insurers to exit the non-group market, cause premiums to spike, and could leave millions without affordable coverage.

As the chart from our latest tracking poll shows, 62% of the public say Trump and the Republicans in Congress are in charge of the government and are responsible for problems with the ACA from now on; just 31% say President Obama and the Democrats are responsible. As is always the case with the ACA, there are party differences; 81% of Democrats and 65% of Independents said Trump and the Republicans “own it”, but just 35% of Republicans feel that way.

Trump has also said that the collapse of the ACA would bring Democrats to the table to forge a new “deal” with him on health care. That’s not impossible, but it seems unlikely: it’s hard to think of a single major element of health reform where the Democrats agree with the president and the Republicans.

As we saw when the Freedom Caucus refused to support the American Health Care Act because it wasn’t conservative enough for them, the substance and the details matter to policymakers far more than they appear to the President. He has suggested that he mostly wants a deal on health care.

Basic rules of politics seem to be holding up pretty well in the fights over the ACA. One rule, that benefits once conferred on the American people cannot be taken away, was a primary reason for the collapse of the GOP health care plan. The other: If severe problems develop in the marketplaces, or are caused by actions the administration takes to undermine the law, the party in charge gets the blame.

 

 

A “Volatile Marketplace”: Second Quarter Earnings Calls Offer Glimpse of How Insurers Are Faring on ACA Marketplaces—and What 2017 Might Bring

http://www.commonwealthfund.org/publications/blog/2016/sep/volatile-marketplace?omnicid=EALERT1094761&mid=henrykotula@yahoo.com

This has been a turbulent year for the Affordable Care Act (ACA) marketplaces. As part of our ongoing efforts to better understand how the post-ACA insurance markets are evolving, we reviewed the 2016 second-quarter (Q2) earnings calls and financial filings of several large, publicly traded insurers that participate on the marketplaces: Aetna, Anthem, Centene, Cigna, Humana, Molina, and United.1  While the picture provided by these calls and financial reports is limited – dozens of other participating insurers are not required to report to investors because of their nonprofit or private status – they can help us better understand some of the trends affecting the marketplaces’ stability, including insurer exits from some health insurance marketplaces and increases in 2017 premiums.

 

When It’s Time To Split Up The Family

When It’s Time To Split Up The Family

Businessman hand drawing an umbrella above a family concept for protection, security, finance and insurance

All five members of the Wadstein family have Covered California’s most comprehensive — and expensive — level of health insurance, even though the two youngest children are the only ones who need that kind of plan.

Zachariah, 8, and Zoey, 2, have a serious metabolic disorder, but the El Cajon family was told it couldn’t purchase a benefit-rich plan for them and a separate, cheaper policy for the other three, said their mom, Christine Wadstein.

That’s about to change. This month, Covered California began making it easier for families like the Wadsteins to choose different health plans for different members of the family.

Harvard Pilgrim bullish on exchange business despite high-profile UnitedHealthcare exit

http://www.healthcarefinancenews.com/news/harvard-pilgrim-bullish-exchange-business-despite-high-profile-unitedhealthcare-exit?mkt_tok=eyJpIjoiWkRjM1pHWXhaamRtTjJJdyIsInQiOiIrNU1UM0tidlREYndvZ05BQ1hESEZUaFZUV3Jkd0lDVnZTRVhkaWQ3cTZ2ZHJIMk9SZ0ZSSEZGdDhKK3BJS3V4RkkzdDcrR2Y1MDd1K0FabllGQ1p2ZjdGanAybDlCUFJBRWo4eFVRK1IwRT0ifQ%3D%3D

Population health partnership key as New England insurer logs more and more enrollees.