Tag Archives: Health Policy

Quest to Lower Drug Prices Pits Trump Against Formidable Opponents

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Aiming to significantly reduce medication prices presents the president with golden opportunities and a set of daunting challenges, healthcare industry experts say.

President Donald Trump has said medication prices are too high and he plans to address the problem.

During his presidential campaign, Trump called for Medicare to negotiate drug pricing. In January, the president criticized the lobbying efforts of pharmaceutical companies and suggested again that the federal government should negotiate drug prices.

Although he faces high hurdles, the president appears to be on the right track, says Olusegun Ishmael, MD, MBA, an emergency room physician at Paris Community Hospital in Paris, IL, and former insurance company executive.

“The biggest insurer in this country is the U.S. government—between the Veterans Administration, Medicaid, and Medicare. The government should do the same thing that UnitedHealthcare and all the Blues do to negotiate pricing based on their volume,” he says.

Insurers and foreign governments have been leveraging their purchasing power to negotiate drug prices for decades, Ishmael says.

“If someone walks into CVS or Walgreens without insurance and wants to get a prescription, they will pay almost twice as much as the UnitedHealthcare pricing. The reason is volume—it is a numbers game. As an insurer, when I have a certain amount of volume, I go to my pharmacy benefit management company and say, ‘I am bringing you a million lives.'”

Obstacles ahead as GOP begins ObamaCare repeal

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Obstacles ahead as GOP begins ObamaCare repeal

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Republicans who have vowed for years to repeal and replace ObamaCare are now seeking to turn their campaign pledge into reality, with markups of legislation potentially beginning this week.

With narrow majorities in the House and Senate, Republicans won’t be able to pass healthcare legislation unless they remain united.

That could prove difficult, as there are several knotty issues raised by the repeal effort that threaten to push lawmakers into opposing camps.

Here are the four biggest issues that Republicans will have to resolve before an ObamaCare repeal bill can reach President Trump’s desk.

Tax credits

One of the biggest sticking points for Republicans is how to provide tax credits to help people pay for health insurance.

While there is broad support in the GOP for providing assistance through the tax code, they are at odds over the details.

House Republican leaders are pushing for a refundable, advanceable tax credit — something conservatives have denounced as a new government entitlement.

“I think there is still a significant divide within the conference on how you deal with refundable tax credits,” said Rep. Mark Sanford (R-S.C.), a member of the conservative House Freedom Caucus.

“I think the refundable tax credit in its present form represents a new entitlement,” he said, adding that he would have “very, very strong reservations” about supporting a bill that included them.

Sen. Rand Paul (R-Ky.) has compared the refundable tax credits to the subsidies some people get under ObamaCare.

“The problem that I have with a new refundable tax credit is it’s essentially a subsidy by another name,” he said last month.

“ObamaCare had subsidies. If we call them refundable tax credits, have we really done anything other than change the name? So I think that’s a problem.”

 

Repeal of Health Law Faces a New Hurdle: Older Americans

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Republican plans to repeal the Affordable Care Act have encountered a new obstacle: adamant opposition from many older Americans whose health insurance premiums would increase.

AARP and its allies are bombarding congressional offices with objections as two House committees plan to vote on the Republicans’ bill this week.

If the law is repealed, the groups say, people in their 50s and 60s could see premiums rise by $2,000 to $3,000 a year or more: increases of 20 percent to 25 percent or higher.

Under current rules, insurers cannot charge older adults more than three times what they charge young adults for the same coverage. House Republican leaders would allow a ratio of five to one — or more, if states choose.

Insurers support the change, saying it would help them attract larger numbers of young customers.

The current rating restrictions, they say, have increased premiums for young adults, discouraging them from enrolling.

But the Republican proposal would “increase the financial burden of older Americans, making coverage significantly less affordable,” says a letter to Congress from the Leadership Council of Aging Organizations, a coalition of nonprofit groups that represent the interests of older Americans.

The letter was addressed to Representative Greg Walden, Republican of Oregon and the chairman of the Energy and Commerce Committee, one of two House panels planning to vote this week on a bill that would roll back major provisions of President Barack Obama’s signature domestic accomplishment.

David M. Certner, the legislative policy director of AARP, said the proposal would have “a severe impact on Americans age 50 to 64 who have not yet become eligible for Medicare.”

At the same time, Mr. Certner said, the Republican proposal could reduce the financial assistance available to help people pay insurance premiums.

Republicans say their proposal would reduce insurance prices by stimulating competition and by allowing insurers to sell a leaner, less expensive package of benefits.

 

 

Risk Adjustment at Heart of “Incredibly Complex” Health Care Reform

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President Donald Trump’s core principles for health care include ensuring that Americans with pre-existing conditions have access to coverage, and that Americans should be able to purchase the health insurance plan they want, not one forced on them by the government. Each of these goals is laudable and achievable, taken separately. But President Trump and others are about to confront what others have learned the hard way: Achieving both goals simultaneously is extremely challenging.

Those attempting to implement the Affordable Care Act (ACA) have faced the dilemma under easier conditions and, even after years of trying, have not solved it. Unless President Trump’s technocrats can fix something known as “risk adjustment” that has bedeviled the Obama administration, his dual principles cannot coexist.

The problem arises from the peculiarities of insurance markets. If insurance policies can vary greatly in their coverages and networks, people will tend to sort themselves into the coverages and networks that fit them best.

On the surface, this sounds great: Americans get the plans they want, not uniform plans put together by some government bureaucrat who knows best or is attempting to use insurance to achieve political goals. But in the unique case of insurance markets, there are adverse consequences.

With a great diversity of plans available, people who believe themselves to be high-risk usually purchase policies that have great coverages and broad networks. People who believe themselves to be low-risk usually purchase policies with lesser coverages and narrower networks. This separation means that the policies with great coverages are going to start to get really expensive, because they are full of higher-risk policyholders.

Neither Democrats nor Donald Trump want to let insurers charge people buying the same policy different rates based on their health conditions. And they don’t want to let insurers impose pre-existing condition limits that would make the more generous policies less expensive for insurers to service. The result, under these constraints, is that only one group of people will buy the premium policies: People with really, really expensive medical conditions.  The price of these policies go up until they essentially no one can afford them.

In the end, almost everyone else would migrate to lesser policies, and we would end up with an unstable environment in which only policies with poor coverages and narrow networks are really able to survive. So, yes, insureds and insurers on paper have freedom to design policies that they actually want, but the market this freedom produces is fatally unstable.

 

Uncompensated Hospital Care Costs Sink to Record Low in California

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Uncompensated Care in California

As California’s uninsured rate plummeted during the first two years of the implementation of the Affordable Care Act (ACA), uncompensated care costs for California’s hospitals followed suit, declining 52% from $3.1 billion in 2013 to $1.5 billion in 2015, according to data from the California Office of Statewide Health Planning and Development (OSHPD) now available on ACA 411. This progress may be in peril, however, if efforts to repeal and replace the ACA are successful and the uninsured population increases.

The most common way to measure the cost of uncompensated care is to combine charity care and bad debt. Charity care refers to the costs for patients with a demonstrated inability to pay. Bad debt refers to the costs for patients who were considered to have the financial ability to pay — or for whom the ability to pay was never determined — but who have not done so.

While we expected to see dropping uncompensated care costs because of the increase in Californians with health insurance under the ACA, the magnitude of the decline is notable when placed into historical context. The data show that in 2015, California hospitals’ uncompensated care costs as a percentage of operating costs reached 1.7% according to the author’s analysis of OSHPD Hospital Annual Financial Data — the lowest rate in more than a decade. This mirrors national trends. For the same year, the American Hospital Association reported that US hospital uncompensated care costs (charity care and bad debt) as a percentage of total hospital expenses reached a 25-year low of 4.2% (PDF).

Estimating the cost of hospital uncompensated care is an imperfect science, and the available data have limitations. For example, the California OSHPD data above do not include uncompensated care provided by Kaiser Foundation hospitals, which provide about 10% of general acute hospital care in California.

In addition, some hospital reimbursement rates (such as Medi-Cal and Medicare) often do not cover the costs of providing care. These shortfalls are not reflected in measures of uncompensated care, as the measure is not designed to capture under-compensated care.

Still, uncompensated care, as measured by OSHPD in the chart above and in other national metrics, has been tracked for years. The steep decline between 2013 and 2015 is unparalleled and a sign of major progress.

The uncertain future of the ACA makes it difficult to predict what will happen with health care financing. However, it is clear that if changes to federal health legislation increase the uninsured population, the uncompensated care burden on hospitals will rise again as fewer people can afford care they receive at hospitals. That won’t be good for California’s people or its hospitals.

 

For New Medicaid Patients, The Doctor Is In (Generally). But You May Have To Wait.

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More than 14 million adults have enrolled in Medicaid since the health law passed, and that has caused some hand-wringing over whether there would be enough primary care providers to meet the demand. But a study out this week suggests that the newly insured people are generally able to get timely appointments for primary care.

For the study, which was published online in JAMA Internal Medicine, trained field workers posing as new Medicaid or privately insured patients called physician practices in 10 states and requested a new-patient appointment for either a checkup or newly diagnosed high blood pressure. They recorded whether they were able to get an appointment and how soon it could be scheduled.

The states in the study — Arkansas, Georgia, Illinois, Iowa, Massachusetts, Montana, New Jersey, Oregon, Pennsylvania and Texas — represented a mix of states that expanded Medicaid coverage to adults with incomes up to 138 percent of the federal poverty level (about $16,600) and those that haven’t done so. An initial round of fieldworker calls to more than 9,700 practices was made in 2012 and 2013, before most states had expanded Medicaid coverage, followed by a second round of calls to more than 7,300 practices in 2016.

Over the time periods studied, appointment availability improved for Medicaid callers by 5.4 percentage points, while it stayed stable for privately insured callers (though Medicaid callers still had a tougher time getting appointments in general).

But, during the second study period, callers from both groups were less likely to be able to schedule an appointment within a week. The proportion of Medicaid callers who waited a week or less decreased by 6.7 percentage points, to 49.1 percent; the share of those who said they were privately insured who waited a week or less declined by 4.1 percentage points, to 52.7 percent.

“Some of these offices were getting a little more full,” said Daniel Polsky, executive director of the Leonard Davis Institute of Health Economics at the University of Pennsylvania and the study’s lead author. “One way doctors were making room for more patients was that instead of making an appointment in a week’s time, some were making it in two weeks.”

There are many factors that may have contributed to the ability of primary care providers to absorb more patients, including increased funding for federally qualified health centers and the growth of retail clinics, among others.

The study should ease concerns that the health law will exacerbate the shortage of primary care providers, Polsky said, though there may still be regional challenges accessing care.

“It’s still true that fewer doctors are willing to see Medicaid patients than are willing to see commercial patients,” he said. “But if you have Medicaid, your access to doctors is still good.”

 

With ‘Trumpcare’ On Horizon, Voters Go Wobbly On Repeal

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UNITED STATES - FEBRUARY 22: Protesters gather outside before Rep. Leonard Lance, R-N.J., holds a town hall meeting at the Raritan Valley Community College in Branchburg, N.J., on Wednesday, Feb. 22, 2017. (Photo By Bill Clark/CQ Roll Call)

As candidate Donald Trump hammered the Affordable Care Act last year as “a fraud,” “a total disaster” and “very bad health insurance,” more Americans than not seemed to agree with him.

Now that President Trump and fellow Republicans show signs of keeping their promise to dump the law, many appear to be having second thoughts.

Multiple polls show rising support for the ACA, including two recent ones indicating Americans feel more positively about it than ever. True, many still dislike what’s known as Obamacare. One survey showed 42 percent see it unfavorably while 48 percent viewed it favorably.

But as the national conversation swells on the fate of a law that affects millions of people in multifaceted ways — and the issue takes center stage at raucous town hall meetings — it’s increasingly clear that many Americans don’t see the ACA as an either-or proposition.

“At first it was a good deal — that was three or four years ago,” said Mark Bunkosky, 56, an independent contractor in Michigan who buys coverage through one of the law’s online portals. “Every year it’s gone up. From where it started, the premium has doubled, and now my deductible has also doubled. And my income has not doubled.

Bunkosky, a Republican, views the ACA unfavorably but believes Washington should fix it, not toss it. He supports keeping some of the law’s Medicaid coverage for low-income people and its prohibition on discriminating against those with preexisting illness.

his week Trump acknowledged that health care is “so complicated.” So are voter opinions on what to do next with the ACA, which expanded coverage to some 20 million.

“I didn’t like that it mandated people to carry health insurance. And I thought it was just a lie” when it promised affordability, said Amber Alexander, 27, a Pennsylvania independent whose seasonal income puts her on Medicaid in winter and a commercial plan the rest of the year.

However, she said, “I don’t think it should be thrown out altogether. There are people that do benefit from it, but there are also a lot of people that get screwed.”

Carol Friendly, 67, is an Oregon Republican who voted for Hillary Clinton for president and favors the health law’s Medicaid expansion, which many Republican policymakers excoriated but has gained support among some GOP governors. She objects to the ACA’s reproductive health coverage, saying consumers opposed to birth control and abortion shouldn’t have to pay for them.

On the other hand, “I know it put 22 million in the health care system that weren’t there before,” she said. “So that’s a plus.”

Adding to the political fog are mixed signals from Republicans.

 

Drowning In A ‘High-Risk Insurance Pool’ — At $18,000 A Year

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Some Republicans looking to scrap the Affordable Care Act say monthly health insurance premiums need to be lower for the individuals who have to buy insurance on their own. One way to do that, GOP leaders say, would be to return to the use of what are called high-risk insurance pools, for people who have health problems.

But critics say even some of the most successful high-risk pools that operated before the advent of Obamacare were very expensive for patients enrolled in the plans, and for the people who subsidized them — which included state taxpayers and people with employer-based health insurance.

Craig Britton of Plymouth, Minn., once had a plan through Minnesota’s high-risk pool. It cost him $18,000 a year in premiums.

Britton was forced to buy the expensive coverage because of a pancreatitis diagnosis. He called the idea that high-risk pools are good for consumers “a lot of baloney.”

“That is catastrophic cost,” Britton said. “You have to have a good living just to pay for insurance.”

Vermont Tests The Waters On GOP Health Care Overhaul

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A statewide experiment aims to test new payment systems, prevent unnecessary treatments, and constrain overall growth in the cost.

Tiny — and very blue — Vermont could be at the leading edge of the health reforms envisioned by the Trump administration and a Republican Congress.

The Green Mountain State, population around 626,000, got a broad waiver last October from the federal government to redesign how its health care is delivered and paid for. The statewide experiment aims to test new payment systems, prevent unnecessary treatments, constrain overall growth in the cost of services and drugs, and address public health problems such as opioid abuse.

The six-year initiative — an outgrowth of a failed attempt by Vermont a few years ago to adopt a single-payer plan for all residents — could eventually encompass almost all of its 16 hospitals, 1,933 doctors and 70 percent of its population, including workers insured through their jobs and people covered under Medicare and Medicaid.

The Obama administration approved the experiment, but it fits the Republican mold for one way the Affordable Care Act could be replaced or significantly modified. The Trump administration and lawmakers in Congress have signaled that they want to allow states more flexibility to test ways to do what Vermont is doing — possibly even in the short-term before Republicans come to an agreement about the future of the ACA.

Editor’s Corner: Why are we still letting pharma pay physicians?

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Last month, W. Carl Reichel was acquitted of charges that he oversaw a kickback scheme designed to induce physicians to prescribe certain drugs manufactured by Warner Chilcott LLC.

The president and CEO of the pharmaceutical company was acquitted of those charges despite the fact that the company itself pleaded guilty to “knowingly and willfully” paying off physicians in the form of sham speaking fees and meals at high-end restaurants, and agreed to pay the government $125 million in civil and criminal fines.

He was acquitted even though prosecutors trotted out nearly a dozen witnesses who worked under Reichel to testify against him, some of whom admitted to participating in the scheme that used “medical education” events–including barbecues, picnics, parties and trips to a casino–to improve physician prescribing rates. The government also alleged that Reichel oversaw the whole thing by demanding sales reps engage in “business conversations” about “clinical experience,” which was code for a physician’s prescribing rate.

But most importantly, he was acquitted because his attorneys never denied that he oversaw any of these payments, or that he instructed sales staff to take physicians out “at least twice a week.” They merely argued that “relationship building” is “widely accepted conduct” in the medical community.

They aren’t lying–allowing pharmaceutical companies to pay physicians large sums of money is a widely accepted practice. The question we should be asking ourselves is, why?