US hospitals pay up to 6 times more for medical devices, study finds

Posted on October 7, 2018 by henrykotula • Posted in Uncategorized • Tagged Drug-Eluding Stents, Health Policy, Health System, High Prices, Hospital, Market Power, Med Device Industry, Med Device Prices, Out of Pocket Expenses, Underinsured • Leave a comment

https://www.beckershospitalreview.com/supply-chain/us-hospitals-pay-up-to-6-times-more-for-medical-devices-study-finds.html

U.S. hospitals spend more on prescription drugs than their peers in European countries, and the same is true for medical devices, a new study published in Health Affairs suggests. In some cases, hospitals in the U.S. paid six times more for a medical device than their European counterparts.

The study was conducted by two researchers from the London School of Economics and Political Science who looked at what hospitals in the U.S., U.K., France, Italy and Germany paid for various heart implants, such as stents and pacemakers. They used data from 2006 to 2014 from a large hospital panel survey consisting of 30,000 unique price points.

The researchers found that depending on the type of stent or pacemaker, U.S. hospitals paid anywhere from two to six times more than the country that paid the lowest prices. The country that often paid the lowest price was Germany.

One example provided was drug-eluting stent prices. The price of the device in the U.S. consistently exceeded the price in Germany by $1,000.
Prices between countries differed for various reasons, including the market power of medical device manufacturers and each country’s tech-based regulations.
The findings suggest “that manufacturers exploit varying levels of willingness to pay and bargaining power between buyers to charge different prices across hospitals and increase profits,” the researchers wrote.

GAO: rural hospital closures increasing, South hardest hit

Posted on October 6, 2018 by henrykotula • Posted in Uncategorized • Tagged ACA, Critical Access Hospitals, GAO, Health Policy, Hospital Closures, Medicaid Expansion, NRHA, Rural Health, Rural Hospital Closures, Rural Hospitals, Save Rural Hospitals Act • Leave a comment

https://www.healthcaredive.com/news/gao-rural-hospital-closures-increasing-south-hardest-hit/538604/

Dive Brief:

Hospitals across the U.S. are being battered by financial headwinds, and rural hospitals are vulnerable because they don’t have capital or diversified services to fall back on when the going gets rough. Between 2013 and 2017, 64 rural hospitals closed due to financial distress and changing healthcare dynamics, more than twice the number in the previous five years, a new Government Accountability Office analysis shows.
Rural hospital closures disproportionately occurred in the South, among for-profit hospitals and among organizations with a Medicare-dependent hospital payment designation.
One potential lifeline was Medicaid expansion. According to GAO, just 17% of rural hospital closures occurred in states that had expanded Medicaid as of April 2018.

Dive Insight:

Declining inpatient admissions and reimbursement cuts have taken a toll on rural hospitals. Since 2010, 86 rural hospitals have closed, and 44% of those remaining are operating at a loss — up from 40% in 2017.

CMS Administrator Seema Verma released a rural health strategy in May aimed at improving access and quality of care in rural communities. Among its objectives are expanding telemedicine, empowering patients in rural areas to take responsibility for their health and leveraging partnerships to advance rural health goals.

The agency also expanded its Rural Community Hospital Demonstration from 17 to 30 hospitals. The program reimburses hospitals for the actual cost of inpatient services rather than standard Medicare rate, which could be as little as 80% of actual cost.

Such initiatives can be helpful, but if a hospital can’t make ends meet on its Medicare and Medicaid businesses and has only a modicum of privately insured patients, “that’s just not a balance that works financially,” Diane Calmus, government affairs and policy manager at the National Rural Health Association, told Healthcare Dive recently.

In all, 49 rural hospitals closed in the South, or 77% of rural hospital closures from 2013 through 2017, according to GAO. Texas had the most closures with 14, followed by Tennessee with eight and Georgia and Mississippi, each with five. By contrast, there were eight rural hospital closures in the Midwest and four each in the West and Northeast.

GAO also looked at closures by Medicare rural hospital payment designation. Critical access hospitals made up 36% of rural hospital closures, 30% were hospitals receiving Medicare standard inpatient payment, 25% had Medicare-dependent hospital designation and 9% were sole community hospitals.

To aid rural hospitals and ensure access for patients, NRHA has urged CMS to adopt a common sense approach to the “exclusive use” standard and lobbied lawmakers to pass legislation eliminating the 96-hour condition of payment requirement, two policies that are particularly hard on rural providers.

Another bill, the Save Rural Hospitals Act, would reverse reimbursement cuts to rural hospitals, provide other regulatory relief and establish the community outpatient hospital, a new provider type offering 24/7 emergency services plus outpatient and primary care.

1 big thing: Out-of-network coverage is disappearing

Posted on October 6, 2018 by henrykotula • Posted in Uncategorized • Tagged Health Policy, High Deductible Health Plans, Out of Network Coverage, Out of Pocket Expenses, Surprise Medical Bills, Underinsured • Leave a comment

https://www.axios.com/newsletters/axios-vitals-df4bea3c-3e1a-4efb-84f7-6e3247205ba7.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

One reason surprise medical bills are going up: Coverage for out-of-network care is going down, according to the Robert Wood Johnson Foundation.

Per RWJF:

Just 29% of insurance plans in the individual market provide any benefits for out-of-network providers. That’s down from 58% a mere three years ago.
Coverage is also declining in the market for small businesses, but not nearly as dramatically — 64% of small-group plans offer some out-of-network coverage, down from 71% in 2015.
Those small-group numbers are probably roughly in line with where things stand among large employers’ plans.

Why it matters: The burgeoning controversy over surprise hospital bills stems partly (though not exclusively) from the bills patients receive when they’re treated by an out-of-network provider — even without their knowledge, often within an in-network facility.

Out-of-network coverage has obviously never been as generous as in-network coverage (that’s the whole point of creating a network), but as insurers pull back even further, more patients will likely find themselves on the hook for even bigger bills.

Medicare for All, But All For Medicare?

Posted on October 3, 2018 by henrykotula • Posted in Uncategorized • Tagged ACA, Health Policy, Medicare, Medicare for All, Single Payer Health System • Leave a comment

https://mailchi.mp/burroughshealthcare/pc9ctbv4ft-1576037?e=7d3f834d2f

Image result for medicare for all

It’s 2018 and health insurance remains a major conundrum for America’s leaders, one hot political potato. Our current health system is worth $3.2 trillion to our economy — the most “valuable” in the world — but nearly 44 million people are without health insurance and our life expectancy falls behind thirty-six other nations.

The question remains: How can that be? And is healthcare really “a right” of all Americans?

Many other countries have successfully adopted single-payer systems, which means that no one is without coverage. Sen. Bernie Sanders (I-VT) is busy answering questions about his Medicare for All (M4A) platform, joined frequently by supporter and fellow democratic socialist and New York Congressional candidate Alexandria Ocasio-Cortez (D-NY).

“Health care must be recognized as a right, not a privilege,” he writes on his platform’s web page. “Every man, woman, and child in our country should be able to access the health care they need regardless of their income. The only long-term solution to America’s health care crisis is a single-payer national health care program.”

Summing it all up that way sounds very appealing, but making such a change would entail a seismic shift.

How Do We Really Feel?

A new Reuters/Ipsos survey shares that most of us, 70 percent, are in favor of the single-payer system: 85 percent of Democrats and 52 percent of Republicans. Perhaps even more surprising is that a mere 20 percent of us actually dislike the concept.

Under this plan, we’d all be lumped into one communal pot, run by the government, and we’d no longer have to fret over those confounding deductibles and premiums. We’d experience improved benefits, he promises, such as dental, vision and hearing.

Major tax increases would fund the plan that includes the following:

A 6.2 percent income-based health care premium paid by employers.
A 2.2 percent income-based premium paid by households.
Progressive income tax rates.
Taxing capital gains and dividends the same as income from work.
Limiting tax deductions for rich.
Savings from health tax expenditures.
The government’s costs would increase to nearly $33 trillion during its first 10 years (2022 to 2031) says a “working paper”reportfrom Charles Blahous at the Mercatus Center at George Mason University. That number assumes enactment this year.

Emory University health policy professor Kenneth Thorpe, who has also studied M4A, says annual costs to the federal government will average between $2.5 trillion to $3 trillion.

The idea of anything “for all” has enormous appeal, but wait just a minute, says The Atlantic. This whole idea of single-payer, “an indulgent fantasy,” evolved because Republicans sought to kill the Affordable Care Act (ACA), or Obamacare, but the party couldn’t unite around a coherent alternative. What then?

Democrats want to sweep away the complexity of our current health policy status quo, says the author Reihan Salam, who’s not all that optimistic. “All health reformers in America must confront the hospital sector.” The Blahous report says Medicare for All would slice hospital and physician payments by up to 40 percent which would significantly impact physicians and hospitals’ willingness and ability to care for Medicare patients (Medicare currently only covers 92% of costs).

Which “M” Word?

The word “Medicare” may, in fact, be misused when applied to a single-payer program, because, says Politico, Medicare isn’t single payer at all, but a “bewilderingly complex” system, “a massive public-private hybrid coverage scheme, funded mostly by taxes.“

Further, Medicare’s audience is specific: seniors who receive benefits when working-age people’s pay is taxed. We’re talking about greatly expanding the beneficiary pool here: “Paying for everyone’s health care that way would be a radically different proposition, and far more expensive.“

What we’re really talking about is Medicaid for All, suggests the National Review, which reminds us that “the devil really is in the details.” Medicaid is not free and is funded significantly by the Federal Government inversely related to each State’s per capita income and doctors dislike Medicaid with its low reimbursements, and consumers complain about long lines and treatment delays.

Sanders’ plan would say bye-bye to all private health insurance and would mean all abortions are free and that illegal aliens will get free health care courtesy of the taxpayer; things that many Americans will not tolerate.

Comparing Apples to Apples

Looking at the much bigger picture, proponents on the “yea” side of M4A say that its benefits far outweigh the risks. First and foremost, the entire population would have the opportunity to be healthier, since having access to health care improves health.

Currently, under the ACA, employers with 50 or more full-time employees must provide health insurance to all of them. For mega-corporations, that expenditure isn’t a huge ask, but smaller companies may find it a stretch. If the government funds health insurance, that then lightens the load for all companies that may find they can increase employee pay as a result — if they choose to do so, of course.

One point that seems to go “either way”: health care spending per capita. The United States spends nearly twice as much as other wealthy countries, topping out at $10,348 per person, according to 2016 numbers from Peterson-Kaiser. Compare that to the United Kingdom at

$4,192 and Japan at $4,519.

Given our expenditures, this is one tough pill to swallow: According to the latest report from The Commonwealth Fund, even though we spend more, “the U.S. population has poorer health than other countries” and is “failing to deliver indicated services reliably to all who could benefit.“

On the “nay” side of things, opponents cite those major tax hikes and longer waiting times to see a doctor, possibly extending into weeks and months. Add to that the elimination of innovations in the private sector that lead to breakthrough discoveries, all as a result of competition being removed from the medical technology playing field. Finally, funding all of this would require “shifting” funds from other priorities already deemed “urgent,” such as the nation’s infrastructure, those crumbling roads, and bridges now made more urgent due to the disastrous effects of climate change.

There’s no indication that this problem will be quickly solved, only that discussions will continue, while any momentum to effect positive change remains questionable. Americans would like to take the healthcare insurance coverage bull by the horns, but unfortunately, understand it’s just not within their power to do so. Until then, it’s a waiting game and may be for some time.

Envisioning a range of new roles for the health system

Posted on October 1, 2018 by henrykotula • Posted in Uncategorized • Tagged Beyond Health, Board, Episode Health, Event Health, Health Policy, Health System, Hospital, Member Health, Strategy • Leave a comment

https://gisthealthcare.com/weekly-gist/

Over the past few weeks, we’ve been sharing our framework for thinking through the path forward for traditional health systems, as they look to drive value for consumers. We began by describing today’s typical health system as “Event Health”, built around a fee-for-service model of delivering discrete, single-serve interactions with patients. We then proposed the concept of “Episode Health”, which would ask the health system to play a coordinating role, curating and managing a range of care interactions to address broader episodic needs. Finally, last week we shared our vision for “Member Health”, in which the system would re-orient around the goal of building long-term, loyalty-based relationships with consumers, helping them manage health over time. In this broader conception, the health system would curate a network of providers of episodes, and events within those episodes, and ensure that the consumer (and their information) moves seamlessly across a panoply of care interactions over time.

This week we bring those three, distinct visions for the role of the health system together in one framework, shown below. A couple of points are worth mentioning here. To begin, our view is that health systems face a fundamental choice over the near term: either begin to embrace the broader aspiration of evolving toward Episode Health and Member Health or become reconciled to the reality of a future as a subcontractor of events and being part of some other organization’s curated network. There’s nothing wrong with being a subcontractor, as long as your cost and quality positions allow you to win business and thrive. You might be the best acute care hospital choice in the market, or the most efficient surgery provider, or the best diagnostic center. But competition will be intense among those subcontractors and earning the business of those who coordinate episodes and control referrals will be increasingly demanding.

Most health systems have already begun to look beyond Event Health, investing in strategies that allow them to span the full continuum of care. Other systems have pushed even further, into the “risk business”—looking to become Member Health and take on the role of managing a consumer’s care across time. But contrary to common wisdom, this evolution does not require a binary choice. Systems are not moving “from one canoe to the other”; rather, most successful systems will play a combination of all three roles at the same time, in perpetuity. While it’s always worth evaluating whether others might be more efficient providers of some Event Health services (diagnostics, rehab, and so forth), most systems will want to maintain a robust base of providing Event Health, even as they embrace a more comprehensive role.

Finally, there is a space we describe as “Beyond Health”, which comprises all of the additional components of consumer value delivery which may be beyond the ability of most systems to handle on their own. Most notably, these include services that address many of the social determinants of health—housing, nutrition, transportation, and the like. Our recommendation is that health systems look to partner with other organizations at a local and national level to address issues that, however critical, lie beyond their ability to fully solve on their own.

Next week we’ll begin to share some additional implications of our Event-Episode-Member Health framework and discuss the operational challenges that face health systems looking to make this evolution.

November Offers Major Test of Medicaid Expansion’s Support in Red States

Posted on October 1, 2018 by henrykotula • Posted in Uncategorized • Tagged ACA, Health Policy, Medicaid, Medicaid Expansion, Out of Pocket Expenses, State Referendum, Underinsured, Uninsured • Leave a comment

http://www.governing.com/topics/health-human-services/gov-medicaid-expansion-voters-ballot-november-states.html?utm_term=November%20Offers%20Major%20Test%20of%20Medicaid%20Expansion%27s%20Support%20in%20Red%20States&utm_campaign=A%20Major%20Test%20of%20Medicaid%20Expansion%27s%20Support%20in%20Red%20States&utm_content=email&utm_source=Act-On+Software&utm_medium=email

Several states will hold the first referendum on Obamacare since Congressional Republicans tried and failed to repeal it.

SPEED READ:

Four states are voting on Medicaid expansion in November — Idaho, Montana, Nebraska and Utah.
Medicaid expansion is a central tenet of President Barack Obama’s Affordable Care Act. It makes people living up to 138 percent of the federal poverty line eligible for Medicaid, the government-run health insurance program for the poor.
Only one state, Maine, has approved Medicaid expansion through the ballot box.
It is the first time voters will directly weigh in on provisions of the ACA since Congressional Republicans tried to repeal it.

It started with Maine. After years of failed attempts to get Gov. Paul LePage to sign off on Medicaid expansion, residents took to the ballot box and made it the first state where voters passed the health care policy.

It hasn’t been smooth sailing. Maine’s Republican governor has taken every opportunity to block the expansion — even asking the federal government to reject the state’s Medicaid expansion application that the courts made him send.

But the passage alone galvanized health care advocates who wish to see Medicaid expansion in the 14 states that have declined federal money to offer health insurance to the people who fall in a “coverage gap,” where they make too much money to qualify for Medicaid but can’t afford private insurance.

In November, four states are voting on the issue — Idaho, Montana, Nebraska and Utah. The ballot measures will test support for a central tenet of President Barack Obama’s Affordable Care Act (ACA) in red states, which make up the bulk of the 14 holdouts. It will be the first referendum on provisions of the ACA since Congressional Republicans tried and failed to repeal it last year.

Supporters of Medicaid expansion see it as a vital part of the social safety net, especially because qualifying for Medicaid in nonexpansion states can be tough. Opponents, however, see expansion as fiscally irresponsible since states will start picking up 10 percent of the costs in 2020.

While the price tag of Medicaid expansion can come with some sticker shock, independent analyses have found that states often save money by insuring people — there are fewer instances of uncompensated care, and people are healthier when they have insurance. According to a 2016 report from the Robert Wood Johnson Foundation, 11 states experienced some savings from Medicaid expansion.

In Idaho and Nebraska, there has been no major movement on Medicaid expansion from either the executive or legislative branches for years. Because of Idaho’s historic opposition to Medicaid expansion, and the fact that the ballot measure doesn’t mention how it would be funded, advocates could experience a bit of déjà vu there.

While the federal government initially pays 100 percent of the costs of Medicaid expansion, it eventually hands states a bill for 10 percent. The funding issue is what LePage has been using as a reason to refuse to implement Medicaid expansion in Maine. For his part, Idaho Lt. Gov. Brad Little, the Republican expected to succeed Gov. Butch Otter in November, is against Medicaid expansion but has said he would accept it if it passes.

“Proponents insist that it’ll pay for itself, but entitlement programs are historically costlier than anticipated. I imagine there are going to be some really tough discussions if it passes,” says Fred Birnbaum, vice president of the Idaho Freedom Foundation, which opposes the measure.

Nebraska’s measure also doesn’t have a provision that explicitly says how the state share would be paid for, but supporters don’t believe that should make a difference.

“We modeled our language based on the Maine initiative, so it’s clear and unequivocal,” says Democratic state Sen. Adam Morfeld, who introduced Medicaid expansion bills in the past. “The governor can say he won’t implement it, but we’ll have a court tell him otherwise.”

Republican Gov. Pete Ricketts, who is expected to win reelection in November, has opposed Medicaid expansion since the beginning but said that if it made the ballot, it’s up to the voters to decide.

“That’s honestly the best I could hope for,” says Morfeld.

In Montana and Utah, the questions before voters are a little more complicated.

Montana expanded Medicaid in 2015, but under the deal struck in the state legislature, it is set to expire June 30. Residents will be voting on whether to extend it, and how the state would fund their portion of it. The ballot measure proposes hiking taxes on tobacco products to $2 per pack.

Utah also already passed a bill to expand Medicaid, but it is awaiting federal approval. It would require nondisabled people to work, volunteer or participate in a job training program; the expansion would automatically end if the federal match dipped below 90 percent; and eligibility stops at the poverty line, which is $12,140 for a single person. (The federal government has rejected other states’ requests to limit expansion to people at the poverty line.)

The ballot measure, meanwhile, asks voters to expand Medicaid traditionally — without work requirements or eligibility limits past the federal poverty line. It also asks voters to increase the sales tax to fund the state’s share. It’s unclear what would happen if the ballot measure passes and the federal government approves Utah’s competing Medicaid waiver.

In three of the four states — Nebraska, Montana and Utah — more than $11 million has been spent to sway voters one way or the other. In Nebraska and Utah, supporters have spent $1 million to 2 million while opponents have spent a reported zero dollars. In Montana, the balance is just the opposite: opponents have raised $8 million while supporters have raised just $2 million. In Idaho, the issue has attracted just has $37,067 — all from the supporters’ side.

Only Utah has conducted polling on the issue, which was done in June. The Salt Lake Tribune and the Hinckley Institute of Politics found that 54 percent of voters support the measure, 35 percent oppose it, and the rest are undecided.

“There’s been a lot of discussion in Utah about this, we’ve been having this debate for a couple of years now,” says Danny Harris, associate state director of advocacy at AARP Utah, which is in favor of the ballot measure. “The polling has always been consistently in favor. People are ready for this issue to move forward.”