Tag Archives: Health Policy

Can A Community Hospital Stick To Its Mission When It Goes For-Profit?

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http://radio.wpsu.org/post/can-community-hospital-stick-its-mission-when-it-goes-profit

Proponents of hospital mergers say the change can help struggling nonprofit hospitals "thrive," with an infusion of cash to invest in updated technology and top clinical staff. But research shows the price of care, especially for low-income patients, usually rises when a hospital joins a for-profit corporation.

Mission Health, the largest hospital system in western North Carolina, provided $100 million in free charity care last year. This year, it has partnered with 17 civic organizations to deliver care for substance abuse by people who are low-income.

Based in bucolic Asheville, the six-hospital system also screens residents for food insecurity; provides free dental care to children in rural areas via the “ToothBus” mobile clinic; helps the homeless find permanent housing and encourages its 12,000 employees to volunteer at schools, churches and nonprofit groups.

Asheville residents say the hospital is an essential resource.

“Mission Health helped saved my life,” says Susan ReMine, a 68-year-old Asheville resident for 30 years who now lives in nearby Fletcher, N.C. She was in Mission Health’s main hospital in Asheville for three weeks last fall with kidney failure. And, from 2006 to 2008, a Mission Health-supported program called Project Access provided ReMine with free care after she lost her job because of illness.

After 130 years as a nonprofit with deep roots in the community, Mission Health announced in March that it was seeking to be bought by HCA Healthcare, the nation’s largest for-profit hospital chain. HCA owns 178 hospitals in 20 states and the United Kingdom.

The pending sale reflects a controversial national trend in the U.S. as hospitals consolidate at an accelerating pace and the cost of health care continues to rise.

“We understand the business reasons [for the deal], but our overwhelming concern is the price of health care,” says Ron Freeman, chief financial officer at Ingles Markets, a supermarket chain headquartered in Asheville with 200 stores in six states.

“Will HCA after a few years start to press the hospital to make more profit by raising prices? We don’t know,” Freeman says.

And the local newspaper, the Citizen Times, editorialized in March: “How does it help to join a corporation where nearly $3 billion that could have gone to health care instead was recorded as profit? … We would feel better were Western North Carolina’s leading health-care provider to remain master of its own fate.”

Across the U.S., the acquisition of nonprofit hospitals by corporations is raising concern among some advocates for patients and communities.

“The main motivation of for-profit companies is to grow so they can cut costs, get paid more and maximize profits,” says Suzanne Delbanco, executive director of the Catalyst for Payment Reform, an employer-led health care think tank and advocacy group. “They are not as focused on improving access to care or the community’s overall health.”

Merger mania across the U.S.

From 2013 to 2017, nearly 1 in 5 of the nation’s 5,500-plus hospitals were acquired or merged with another hospital, according to Irving Levin Associates, a health care analytics firm in Norwalk, Conn. Industry analysts say for-profit hospital companies are poised to grow more rapidly as they buy up both for-profits and nonprofits — potentially altering the character and role of public health-oriented nonprofits.

Nonprofit hospitals are exempt from state and local taxes. In return, they must provide community services and care to poor and uninsured patients — a commitment that is honored to varying degrees nationwide.

Of the nation’s 4,840 general hospitals that aren’t run by the federal government, 2,849 are nonprofit, 1,035 are for-profit and 956 are owned by state or local governments, according to the American Hospital Association.

In 2017, 29 for-profit companies bought 18 for-profit hospitals and 11 not-for-profits, according to an analysis for Kaiser Health News by Irving Levin Associates.

Sales can go the other way, too: 53 nonprofit hospital companies bought 18 for-profits as well as 35 nonprofits in 2017.

A recent report by Moody’s Investors Service predicted stable growth for for-profit hospital companies, saying they are well-positioned to demand higher rates from insurers and have less exposure to the lower rates paid by government insurance programs such as Medicare and Medicaid. In contrast, a second Moody’s report downgraded — from stable to negative — its 2018 forecast for the not-for-profit hospital sector.

‘We wanted to thrive, and not just survive’

Ron Paulus, Mission Health’s president and CEO, says he and the hospital’s 19-member board concluded last year that the future of Mission Health was iffy at best without a merger.

HCA declined to make anyone available for an interview but provided this written statement: “We are excited about the prospect of a transaction that would allow us to support the caliber of care they [Mission Health hospitals] have been providing.”

Driving Mission Health’s decision, Paulus says, were strained finances and the board’s strong feeling that the hospital needed to invest in new technology, modern data management tools and top clinical talent.

“We wanted to thrive and not just survive,” he says. “I had a healthy dose of skepticism about HCA at first. But I think we made the right decision.”

During the past four years, Paulus says, the company has had to cut costs — from between $50 million and $80 million a year — to preserve an “acceptable operating margin.” The forecast for 2019 and 2020, he says, saw the gap between revenue and expenses rising to $150 million a year.

Miriam Schwarz, executive director of the Western Carolina Medical Society, says many physicians in the area were surprised by the move and “are trying to grapple with the shift.”

“There’s concern about the community benefits, but also job loss,” Schwarz says. Still, she adds, the doctors in her region “do recognize that the hospital must become more financially secure.”

Weighed against community concerns is the prospect of a large nonprofit foundation created by the deal. Depending on the final price, the foundation could have close to $2 billion in assets.

Creation of such foundations is common when for-profit companies buy nonprofit hospitals or insurance companies. Paulus says the foundation created from Mission Health could generate $50 million or more a year to — among other initiatives — “test new care models such as home-based care … and address the causes of poor health in the community in the first place.”

In addition, HCA will have to pay upward of $10 million in state and local taxes.

Mixed results

Industry analysts say the hospital merger and consolidation trend nationwide is inevitable given the powerful forces afoot in health care.

That includes pressure to lower prices and costs and improve quality, safety and efficiency; to modernize information technology systems and equipment; and to do more to improve overall health.

But academics and consumer advocates say hospital consolidation yields mixed results. While mergers — especially purchases by for-profit companies — provide much-needed capital and financial stability, competition is stifled, and that’s often led to higher prices.

Martin Gaynor, a professor of economics and health policy at Carnegie Mellon University, and colleagues examined 366 hospital mergers from 2007 to 2011 and found that prices were, on average, 12 percent higher in areas where one hospital dominated the market versus areas with at least four rivals. Another recent study found that 90 percent of U.S. cities today have a “highly concentrated” hospital market. Asheville is one, and Mission Health is dominant there.

“The evidence is overwhelming at this point,” Gaynor says. “Mergers solve some problems for hospitals, but they don’t make health care less expensive or better. In fact, prices usually go up.”

Mission Health CEO Paulus says he believes HCA is committed to restraining price increases and the growth in costs.

If no obstacles arise, Paulus says, HCA’s purchase of Mission Health would be formalized in August and finalized in November or December, pending state regulatory approval.

 

 

 

CALIFORNIA’S ACA RATES TO RISE 8.7% NEXT YEAR

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https://www.healthleadersmedia.com/finance/californias-aca-rates-rise-87-next-year

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About 10% of individual policyholders in and outside the exchange are expected to drop their coverage next year because the ACA fines were eliminated.

Premiums in California’s health insurance exchange will rise by an average of 8.7 percent next year, marking a return to more modest increases despite ongoing threats to the Affordable Care Act.

The state marketplace, Covered California, said the rate increase for 2019 would have been closer to 5 percent if the federal penalty for going without health coverage had not been repealed in last year’s Republican tax bill.

The average increase in California is smaller than the double-digit hikes expected around the nation, due largely to a healthier mix of enrollees and more competition in its marketplace. Still, health insurance prices keep growing faster than wages and general inflation as a result of rising medical costs overall, squeezing many middle-class families who are struggling to pay their household bills.

The 8.7 percent increase in California ends two consecutive years of double-digit rate increases for the state marketplace.

“It’s not great that health care costs are still increasing that much, but the individual market is not sticking out like a sore thumb like it has in other years,” said Kathy Hempstead, senior adviser at the Robert Wood Johnson Foundation. “It’s falling back to earth.”

The future may be less bright. An estimated 262,000 Californians, or about 10 percent of individual policyholders in and outside the exchange, are expected to drop their coverage next year because the ACA fines were eliminated, according to the state. Peter Lee, executive director of Covered California, warned that the exodus of healthier consumers will drive up insurance costs beyond 2019 — not just for individual policyholders but for California employers and their workers.

“We are paying, in essence, a surcharge for federal policies that are making coverage more expensive than it should be,” Lee said in an interview. “There will be more of the uninsured and more uncompensated costs passed along to all of us.”

Critics of the Affordable Care Act say it has failed to contain medical costs and left consumers and taxpayers with heavy tabs . Nearly 90 percent of Covered California’s 1.4 million enrollees qualify for federal subsidies to help them afford coverage.

Foiled in its attempt to repeal Obamacare outright, the Trump administration has taken to rolling back key parts of the law and has slashed federal marketing dollars intended to boost enrollment. Instead, the administration backs cheaper alternatives, such as short-term coverage or association health plans, which don’t comply fully with ACA rules and tend to offer skimpier benefits with fewer consumer protections.

Taken together, those moves are likely to draw healthier, less expensive customers out of the ACA exchanges and leave sicker ones behind.

Nationally, 2019 premiums for silver plans — the second-cheapest and most popular plans offered — are expected to jump by 15 percent, on average, according to an analysis of 10 states and the District of Columbia by the Avalere consulting firm. Prices vary widely across the country, however. Decreases are expected in Minnesota while insurers in Maryland are seeking 30 percentincreases.

In California, exchange officials emphasized, consumers who shop around could pay the same rate as this year, or even a little less.

Christy McConville of Arcadia already spends about $1,800 a month on a Blue Shield plan for her family of four, opting for “platinum” coverage, the most expensive type. Her family doesn’t qualify for federal subsidies in Covered California.

She’s worried about further increases and doesn’t want to switch plans and risk losing access to the doctors she trusts. “We’re getting right up to the limit,” McConville said.

Amanda Malachesky, a nutrition coach in the Northern California town of Petrolia, said the elimination of the penalty for being uninsured makes dropping coverage more palatable. Her family of four pays almost $400 a month for a highly subsidized Anthem Blue Cross plan that has a $5,000 deductible.

“I’ve wanted to opt out of the insurance model forever just because they provide so little value for the exorbitant amount of money that we pay,” said Malachesky, who recently paid several hundred dollars out-of-pocket for a mammogram. “I’m probably going to disenroll … and not give any more money to these big bad insurance companies.”

Covered California is aiming to stem any enrollment losses by spending more than $100 million on advertising and outreach in the coming year. In contrast, the Trump administration spent only $10 million last year for advertising the federal exchange across the 34 states that use it.

Also, California lawmakers are looking at ways to fortify the state exchange. State legislators are considering bills that would limit the sale of short-term insurance and prevent people from joining association health plans that don’t have robust consumer protections.

However, California hasn’t pursued an insurance mandate and penalty at the state level, which both health plans and consumer advocates support. New Jersey and Vermont have enacted such measures.

Lee said it’s up to lawmakers to decide whether a state mandate makes sense.

David Panush, a Sacramento health care consultant and a former Covered California official, said some lawmakers may be reluctant to push the idea, even in deep-blue California.

“The individual mandate has always been the least popular piece of the Affordable Care Act,” he said.

Despite the constant uncertainty surrounding the health law, many insurers nationally are posting profits from their ACA business and some plans are looking to expand further on the exchanges.

In California, the same 11 insurers are returning, led by Kaiser Permanente and Blue Shield of California. Together, those two insurers control two-thirds of exchange enrollment. (Kaiser Health News, which publishes California Healthline, is not affiliated with Kaiser Permanente.)

The Covered California rate increases are fairly uniform across the state. Premiums are climbing 9 percent across most of Southern California as well as in San Francisco. Monterey, San Benito and Santa Cruz counties faced the highest increase at 16 percent, on average.

The rates are subject to state regulatory review but are unlikely to change significantly. Open enrollment on the exchange starts Oct. 15.

The ACA’s expansion of coverage has dramatically cut the number of uninsured Californians. The proportion of Californians lacking health insurance fell to 6.8 percent at the end of last year, down from 17 percent in 2013, federal data show.

 

4 Regulations That Would Terrify U.S. Drug Companies Ahead Of The 2018 Midterms

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https://www.forbes.com/sites/robertpearl/2018/07/16/drug-companies/#72ce13501e41

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If you’re a powerful American drug company, then you’ve had a strange couple of months. In that time, you’ve experienced a rainbow of emotions: fear, relief and, now, confusion and anxiety.

The roller-coaster ride, as you recall, began in mid-May when President Trump stood alongside HHS Secretary Alex M. Azar, in the Rose Garden of the White House, in front of a sign reading “Lower Drug Prices for Americans.”

As the president approached the mic, you watched with bated breath, remembering Trump’s campaign promise to drive down prescription drug prices to below a penny on the dollar. You always knew that’d be impossible but, then again, you thought, is anything really impossible?

Things started off poorly that morning. Almost immediately, Trump began denouncing the actions of drug manufacturers who, he said, were contributing to a “broken system.” He then urged all U.S. pharma companies to drop their prices, before deriding pharmacy benefits managers (PBMs) as “middlemen” who are getting “very, very rich” off the same broken system as you.

But when his speech ended, relief washed over you. After all, President Trump made no mention of his previous promise to negotiate lower drug prices for seniors enrolled in Medicare. He didn’t revive his vow to allow the importation of prescription medications, either. He didn’t discuss the popular notion of shortening pharmaceutical patents, nor that idea about requiring drug-companies to justify the price of new medications.

Granted, all these promises would be incredibly difficult to legislate. And, like most drug companies, you know that most of these ideas wouldn’t severely damage your bottom line anyway. But had the president committed to even one of them in his Rose Garden speech, he would have sent a clear message that this is not business as usual.

Instead, you and your colleagues took solace in his words. By late afternoon, the nation’s pharmaceutical, biotech and PBM stocks were up, not down. In the following weeks, drug companies interpreted Trump’s comments the same way drag-racers look at a stop signs—as more of a request than a rule.

Now, in fairness, President Trump and Secretary Azar had no intention of revealing a final, comprehensive set of proposals, rules or regulations on May 11. They set their sights on Tuesday, July 16—the official deadline for interested parties to comment on Secretary Azar’s blueprint Q&A. That’s when the real policy-making is set to begin. And, until early this month, most of the drug industry had been bracing for incremental, not radical, change.

But on July 1, Pfizer learned that it’s not safe to wake a sleeping bear. Thinking they had a clear runway, Pfizer’s corporate executives went ahead and raised list prices on more than 100 prescription drugs.

He followed that Tweet with a phone call and, within 24 hours, Pfizer had rolled back its price increases. Just like that, Trump had the drug industry’s full attention.

It stands as a public relations win for Trump in the lead up to the 2018 midterm elections. With recent polls indicating that 22% to 30% of Americans say healthcare is their top voting issue, Trump and the Republican party are wise to appear tough on rising drug prices (even if Pfizer is merely deferring its price hikes until later in the year).

Uncertainty and confusion, once again, permeate the drug industry. If the polls are even remotely accurate at predicting voter behavior this November, Trump and his cabinet will have good reason to take action.

I personally hope they have the courage to do so.

Unfortunately, the ideas Trump and Azar presented in the Rose Garden won’t be enough. They aren’t going to flatten the rapid rate of drug-price inflation or dramatically impact future price escalation.

So, alongside the administration’s proposed ideas, I offer four alternative policies that could make a real difference:

Leading idea No. 1: Take out the “middlemen”

In his May 11 address, the president went after PBMs, those insurance-company intermediaries between drug manufacturers and patients. At present, consumers know nothing about the prices these intermediaries negotiate or the size of the rebates/kickbacks they keep for themselves. Revenue for PBMs is determined as a percentage of all Rx drugs sold, which means there’s virtually no incentive to drive prices lower or replace the high-margin, brand-name drugs on PBM formularies with new, lower-cost alternatives. Federal legislation could require PBMs to operate transparently and work to lower out-of-pocket costs and drug prices for patients. However, there are way too many “ifs” with this approach to expect major change on the horizon.

A more frightening proposition for drug makers: Imagine if the U.S. government negotiated drug prices for all 55.5 million Medicare patients and made those costs publicly available so that everyone knew what price was fair and reasonable. Nearly all other nations do this. Why not the United States? Besides, Medicare already establishes prices for participating hospitals and doctors. Why not do the same for drug prices?

Leading idea No. 2: Make other nations pay more

Whether it’s NATO spending or wall-building, President Trump expects other nations to pony up for American interests. Most nations have made a habit of saying no. Now, rather than negotiating on behalf of Medicare for lower-cost medications (particularly Part B), the president has encouraged citizens of other countries to pay more for their prescriptions and, thereby, contribute an increased share of funding to drug-company R&D. Health ministers in other nations haven’t made this high priority for their 2019 healthcare agendas. They likely won’t. Even if drug prices were to rise in other countries, would drug manufacturers pass that added revenue on to American patients? Or to their shareholders? History suggests it’s the latter.

A more frightening proposition for drug makers: Require drug companies to document all the R&D dollars they spend in bringing a product to market. Further, force them to quantify and compare their drug’s efficacy to other drugs on the market. If pharmaceutical companies want generous patent protections (for products that often determine whether a patient lives or dies), their pricing can’t be capricious or simply what the market will bear. Prices should relate either to: (a) the cost of the drug’s R&D or (b) the superior clinical effectiveness of the medication.

Leading idea No. 3: Put prices in Rx ads

This is one of the most interesting concepts to come out of Trump and Azar’s blueprint. That’s because such a policy would, at least in theory, make it impossible for drug makers to hide their prices. USDA regulations already require companies to disclose possible side-effects in ads. Imagine if the administration also stipulated that pharmaceutical manufacturers must disclose their prices in ad copy, as well. For now, it’s unclear which costs the drug makers would need to disclose, given that patients and purchasers pay very different amounts for the same medications. Already, drug companies are using coupons and rebates, what critics deem to be clever schemes, to lower the advertised price for patients while simultaneously raising what they charge insurers—who ultimately pass those costs back to purchasers and patients through higher premiums.

A more frightening proposition for drug makers: Limit what U.S. pharmaceutical companies can charge. Period. American drug makers should be required to pay a penalty if they charge Americans more than 120% for the same medication as the 10 wealthiest nations pay on average. It’d be the same thing that happens when baseball teams exceed the salary cap. And when comparable medications exist at lower prices, TV ads would need to disclose that fact to viewers, as well.

Leading idea No. 4: Speed up generic medication approvals

This idea is a step in the right direction. Unfortunately, the president didn’t explain why generics currently undergo such lengthy delays for approval. The biggest hurdle is not government regulations, but drug company tactics. For most patented prescriptions, the generic versions have exactly the same chemical structure, and therefore, the same efficacy. As such, once a generic exists, there’s little or no reason to purchase the more expensive product. Knowing this, makers of the brand-name version use legal maneuvers to extend their patent protections before driving generic competitors out of business with their pricing and marketing leverage.

A more frightening proposition for drug makers: The government needs to change patent laws to protect patients first. Medications fall into two classifications. There are the small-molecule ones that often are available over-the-counter. With these, the generic version’s chemical structure is identical to that of the brand-name version. There also are the biologicals, so named because they are produced by living cells and organisms. Insulin is one example. Increasingly, this latter class of drugs has the highest price. These chemicals are too complex to be copied exactly, which is why the generic equivalents are labeled “biosimilars.” The solution here is to focus on the most expensive, large-molecule biologics first. In so doing, the government should force manufacturers to hand over drug samples to biosimilar companies 18 months before their patents end. This will speed up the development of biosimilars and fast-track the approval of lower-cost (but equally efficacious) medications. For patients with diabetes, this could lower the cost of life-saving insulin by 50% or more. Recent research from Yale shows up to 1 in 4 people with diabetes are injecting less insulin than they should simply because of the cost.

A Realistic Glimpse Into The Future Of Drug Pricing

Today, the pharmaceutical industry enjoys powerful patent protections and, thereby, monopolistic control over pricing. The consequence is that Americans are paying exorbitant prices for patented medications. The simplest solution is to strike a legislative balance that allows (a) drug companies to invent (and invest in) the next generation of breakthrough medication while (b) allowing the American people to afford the medications they need to stay healthy.

For most of the 20th century, the pharmaceutical world stayed within those guardrails. But over the past decade, profits have been way out of line with R&D and investment. The time has come to restore balance and reasonableness, regardless of what the national drug lobby wants.

Later this week, Secretary Azar will receive feedback on the administration’s blueprint and will begin drafting potential cost-cutting regulations. I encourage him and President Trump to use their authority to make drugs more affordable.

I suspect the pharmaceutical industry believes it will be business as usual, despite the campaign rhetoric and another Rose Garden event this coming fall. I hope the Secretary and the president have the courage to prove them wrong. The health of the American people depends on it.

 

 

Anthem Sued by Doctors in Dispute Over Emergency-Room Coverage

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https://www.bloomberg.com/news/articles/2018-07-17/anthem-sued-by-doctors-in-dispute-over-emergency-room-coverage

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The health insurer Anthem Inc. was sued by doctors in Georgia for declining to pay for some emergency-room care, escalating a long-running battle over how far insurance plans can go to push patients to seek lower-cost treatment.

The American College of Emergency Physicians and the Medical Association of Georgia filed suit on Tuesday in U.S. District Court in Atlanta against Anthem’s Blue Cross and Blue Shield of Georgia unit over the denied payments. The doctors asked the court to require Anthem to halt its policy and cover the claims.

“Providers and patients alike are operating in fear of denial of payment by defendants when patients seek emergency department care,” the groups said in the filing.

It’s the latest legal challenge over a change in policy that Anthem says was designed to cut down on patients going to an emergency room in situations that don’t require it. Emergency-room care usually costs significantly more than treatment at a doctor’s office or an urgent-care clinic. Georgia’s Piedmont Hospital and five related facilities also have sued Anthem over the policy, the Atlanta Journal-Constitution reported in February.

Before putting the policy in place, Anthem sent letters to customers explaining the policy and urging them to use other sites for care. The insurer also held meetings with physicians, according to the suit.

Anthem didn’t immediately respond to a request for comment on the suit.

Medical Records

Anthem’s strategy went beyond what’s legally allowed, the doctors say in their lawsuit. The insurer reviewed the cases of patients who went to an emergency room, and decided whether to pay for their care based on billing information or medical records related to the incident. The suit says Anthem violated legal requirements that insurers cover care in a situation where a “prudent layperson” would believe he or she was experiencing an emergency.

According to the suit, Anthem began reviewing emergency-room visits in Georgia, Kentucky and Missouri, and has also brought the policy to Ohio, New Hampshire and Indiana. Based in Indianapolis, Anthem operates under the Blue Cross and Blue Shield brand in 14 states. The company has almost 40 million health-insurance members.

Lawmakers including U.S. Senator Claire McCaskill of Missouri have criticized Anthem’s policy. McCaskill and a fellow Democrat, Senator Ben Cardin of Maryland, sent a letter in March to the Health and Human Services Department and Labor Department, asking them to investigate the payment denials.

“By denying patient claims based on the patient’s final diagnosis and ignoring the patient’s symptoms present at the time of the emergency, we believe that Anthem likely violated federal law,” the senators wrote.

 

 

 

HOSPITALS VOW TO REFILE AFTER 340B SUIT REJECTED ON APPEAL

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An appellate court decision dealt a major setback to hospitals unhappy with planned cuts to the Medicare drug reimbursement program.

KEY TAKEAWAYS

The appellate judges affirmed the district court’s dismissal for lack of subject-matter jurisdiction.

The AHA failed to fulfill the legal prerequisites to judicial review, according to the ruling.

The plaintiff has seven days to file a petition for the appellate court to rehear the matter en banc.

The American Hospital Association’s attempt to block $1.6 billion in cuts to the 340 Drug Pricing Program suffered a major setback Tuesday, when the D.C. Circuit Court sided with Health and Human Services.

The three-judge panel ruled that the lower court had properly dismissed AHA’s case because the association failed to fulfill the legal prerequisites to judicial review.

More specifically, AHA failed to adequately present the matter to HHS Secretary Alex Azar. This “presentment” threshold is the obstacle that tripped up the AHA challenge at the district court level, a decision Tuesday’s appellate ruling affirmed.

“When the plaintiffs filed this lawsuit, neither the hospital plaintiffs, nor any members of the hospital-association plaintiffs, had challenged the new reimbursement regulation in the context of a specific administrative claim for payment. Nor could they have done so, for the new regulation had not yet even become effective,” the appellate judges wrote. “Therefore, they had neither presented their claim nor obtained any administrative decision at all, much less the ‘final decision’ required under [the relevant law].”

The AHA, along with fellow plaintiffs the Association of American Medical Colleges and America’s Essential Hospitals, had argued that it met the presentment requirement by opposing the policy in writing during the rulemaking process.

Because the decision was based on a lack of subject-matter jurisdiction, it did not address the merits of AHA’s claims.

“We are deeply disappointed that the courts have once again failed to rule on the merits of our case,” the hospital groups said Tuesday in a statement.

The groups emphasized that the decision does not address whether they can obtain judicial review. It simply addresses when and how that review can be obtained.

“We will continue our fight to reverse these unwarranted cuts and protect access for patients, and we expect to refile promptly in district court,” the groups added.

 

 

 

SINGLE PAYER GETTING MORE ATTENTION AT STATE LEVEL, NOT GOING AWAY

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https://www.healthleadersmedia.com/finance/single-payer-getting-more-attention-state-level-not-going-away

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States are testing the waters with Medicare-for-all type plans while waiting for federal solutions. The cost of single-payer plans could be the biggest hurdle.

“Medicare for all” is becoming a rallying cry in state elections, with state legislators coming up with their own versions of single-payer healthcare despite, or possibly because of, the stagnation of similar ideas at the federal level.

The push for a single-payer healthcare system is proving successful for some, such as socialist Alexandria Ocasio-Cortez, who rocked New York by beating the 10-term incumbent Joe Crowley in a New York City district. She is a vocal proponent of single-payer healthcare.

The proliferation of state plans and in particular Ocasio-Cortez’s victory in New York could indicate growing support for single-payer healthcare, says Sally C. Pipes, president and CEO of the Pacific Research Institute in San Francisco.

Pipes says the American public may be drawn by the promises of a healthcare plan that eliminates premiums and other disliked features of the current system.

“The horse is out of the barn in terms of single payer. They keep pushing it and pushing it and this has become a major issue that gets the voters’ attention, especially for progressive Democrats,” Pipes says.

She says, “There’s an effort in the states to test the waters as they wait for things to change in Washington. Because Obamacare wasn’t repealed and replaced, Democrats are saying single payer is what they wanted all along, so now they’re going for it.”

MULTIPLE STATE PROPOSALS

Four single payer proposals are on the table nationally, including one from Sen. Bernie Sanders (I-VT) that calls for Medicare to be available to all Americans. State legislators and candidates are taking up the issue ahead of midterm elections, rallying the many voters who are fed up with the current healthcare system and want a solution in the form of a government-sponsored single payer.

The state plans are similarly idealistic, calling for universal coverage of all residents regardless of income and eliminating premiums, copays, and deductibles.

Many states have serious proposals for single-payer systems. In Michigan, Rep. Yousef Rabhi (D-Ann Arbor) is proposing a government-administered single-payer system to provide coverage to everyone in the state.

The MiCare plan would provide state residents with medical, dental, mental health, and prescription drug coverage while eliminating healthcare premiums, copays, and deductibles, Rabhi says.

Healthcare providers would remain independent, and patients would be able to pick among participating providers under the MiCare plan. Michigan would pay for the plan by cutting administrative costs generated by for-profit insurance companies and raising taxes, Rabhi says. He claims the state would save a net $20 billion in the first year.

“Instead of the exorbitant costs, stress and uncertainty of premiums, deductibles, co-insurance and other out-of-pocket payments, working families would pay a small and simple progressive payroll tax designed to save real money on their overall health expenses,” Rabhi explains in his proposal.

He continues, “Large and medium employers would pay a payroll tax set at a level lower than the current average employer expenditures for employee health care, saving many employers money immediately.”

Also, in Michigan, a Democrat running for governor has proposed MichCare. Abdul El-Sayed, MD, says he would pay for his single-payer plan with a new, graduated payroll tax that all working people would pay, coupled with new taxes on the gross earnings of businesses making more than $2 million a year.

The New York state Assembly recently passed a bill calling for a statewide single-payer universal healthcare system, for the fourth year in a row.

The New York Health Act would include comprehensive outpatient and inpatient medical care, primary and preventive care, prescription drugs, lab tests, rehab, dental, vision, hearing, and all benefits required by current state insurance law, by publicly funded medical programs or provided by the state public employee package.

The bill passed easily in the Democrat-led chamber but the state’s Republican-led Senate is not expected to take up the measure this year.

Minnesota State Rep. Erin Murphy (DFL-St. Paul) is running for governor on a platform that includes her Pathway to Single-Payer plan, which will set the state up to “lead the nation by becoming the first state to provide guaranteed, affordable health care to everyone,” as stated in a press release.

MORE MOMENTUM THAN IN PAST

Pipes opposes single-payer healthcare, saying Americans would regret the choice only after experiencing the increased taxes and reduced services of such a system. But single payer has become a powerful political tool, she says.

“Before Bernie Sanders proposed single payer in 2016, it wasn’t really taken seriously, but now you have all these states supporting it,” she says. “Political leaders are seeing this as an issue they can run on and get lots of support, draw big crowds, and look like they’re giving people what they want.”

Americans have been on the fence about Medicare-for-all plans for a while, with one survey of  1,850 U.S. adults finding that 51% supported the idea.

That figure could be increasing, Pipes says. If it is, Pipes says she suspects it is largely because politicians can run on the pie-in-the-sky promises of eliminating premiums, copays, and deductibles while giving few details about how to pay for such a plan.

“Both New York and Michigan say theirs would be paid for by progressive income tax increases and a new payroll tax, but they haven’t come out and said just what the cost would be. That’s unlike in California, where the Senate appropriations committee said SB 562 would cost $400 billion a year,” Pipes says. “People are drawn to the promised improvements, but they have to consider the cost at some point.”

Single payer is a polarizing topic, with Democrats and Republicans typically coming down sharply on either side of the issue, but Pipes says Democrats run the risk of dividing their own voters.

“People support single payer when you ask them if they’d like a system that eliminates everything they don’t like about the current system, but when you ask if they want to pay more taxes that support goes down,” Pipes says.

“The Democrats are finding this is a successful way to motivate people in a campaign but when they have to answer questions about raising taxes on everyone, including working class voters, they could find themselves driving a wedge between their constituents,” she says.

 

 

Stabilizing and strengthening the individual health insurance market

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https://www.brookings.edu/research/stabilizing-and-strengthening-the-individual-health-insurance-market/?utm_campaign=Economic%20Studies&utm_source=hs_email&utm_medium=email&utm_content=64510818

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Stability has long been an issue for the individual health insurance market, even before the Affordable Care Act. While reforms adopted under the ACA initially succeeded in addressing some of these market issues, market conditions substantially worsened in 2016.

Insurers exited the individual market, both on and off the subsidized exchanges, leaving many areas with only a single insurer, and threatening to leave some areas (mostly rural) with no insurer on the exchange. Most insurers suffered significant losses in the individual market the first three years under the ACA, leading to very substantial increases in premiums a couple of years in a row.

For a time, it appeared that rate increases in 2016 and 2017 would be sufficient to stabilize the market by returning insurers to profitability, which would bring future increases in line with normal medical cost trends. However, Congress’s decision to repeal the individual mandate and the Trump Administration’s decision to halt “cost-sharing reduction” payments to insurers, along with other measures that were seen as destabilizing, created substantial new uncertainty for market conditions in 2018.

This uncertainty continues into 2019, owing both to lack of clarity on the actual effects of last year’s statutory and regulatory changes, and to pending regulatory changes that would expand the availability of “non-compliant” plans sold outside of the ACA-regulated market. These uncertainties further complicate insurers’ decisions about whether to remain in the individual market and how much to increase premiums.

In “Stabilizing and strengthening the individual health insurance market: A view from ten states” (PDF), Mark Hall examines the causes of instability in the individual market and identifies measures to help improve stability based off of interviews with key stakeholders in 10 states.

The condition of the individual market

In the states studied—Alaska, Arizona, Colorado, Florida, Iowa, Maine, Minnesota, Nevada, Ohio, and Texas—opinions about market stability vary widely across states and stakeholders.

While enrollment has remained remarkably strong in the ACA’s subsidized exchanges, enrollment by people not receiving subsidies has dropped sharply.

States that operate their own exchanges have had somewhat stronger enrollment (both on and off the exchanges), and lower premiums, than states using the federal exchange.

A core of insurers remain committed to the individual market because enrollment remains substantial, and most insurers have been able to increase prices enough to become profitable. Some insurers that previously left or stayed out of markets now appear to be (re)entering.

Political uncertainty

Premiums have increased sharply over the past two to three years, initially because insurers had underpriced relative to the actual claims costs that ACA enrollees generated. However, political uncertainty in recent years caused some insurers to leave the market and those who stayed raised their rates.

Insurers were able to cope with the Trump administration’s halt to CSR payments by increasing their rates for 2018 while the dominant view in most states is that the adverse effects of the repeal of the individual mandate will be less than originally thought. Even if the mandate is not essential, many subjects viewed it as helpful to market stability. Thus, there is some interest in replacing the federal mandate with alternative measures.

Because most insurers have become profitable in the individual market, future rate increases are likely to be closer to general medical cost trends (which are in the single digits). But this moderation may not hold if additional adverse regulatory or policy changes are made, and some such changes have been recently announced.

Many subjects viewed reinsurance as potentially helpful to market conditions, but only modestly so because funding levels typically proposed produce just a one-time lessening of rate increases in the range of 10-20 percent. Some subjects thought that a better use of additional funding would be to expand the range of people who are eligible for premium subsidies.

Actions to restore stability

Concerns were expressed about coverage options that do not comply with ACA regulations, such as sharing ministries, association health plans, and short-term plans. However, some thought this outweighed harms to the ACA-compliant market; thus, there was some support for allowing separate markets (ACA and non-ACA) to develop, especially in states where unsubsidized prices are already particularly high.

Other federal measures, such as tightening up special enrollment, more flexibility in covered benefits, and lower medical loss ratios, were not seen as having a notable effect on market stability.

Measures that states might consider (in addition to those noted above) include: Medicaid buy-in as a “public option”; assessing non-complying plans to fund expanded ACA subsidies; investing more in marketing and outreach; “auto-enrollment” in “zero premium” Bronze plans; and allowing insurers to make mid-year rate corrections to account for major new regulatory changes.

Conclusion

The ACA’s individual market is in generally the same shape now as it was at the end of 2016. Prices are high and insurer participation is down, but these conditions are not fundamentally worse than they were at the end of the Obama administration. For a variety of reasons, the ACA’s core market has withstood remarkably well the various body blows it absorbed during 2017, including repeal of the individual mandate, and halting payments to insurers for reduced cost sharing by low-income subscribers.

The measures currently available to states are unlikely, however, to improve the individual market to the extent that is needed. Although the ACA market is likely to survive in its basic current form, the future health of the market—especially for unsubsidized people—depends on the willingness and ability of federal lawmakers to muster the political determination to make substantial improvements.

 

 

Reducing Drug Prices and Medicare’s Role: ‘It’s Complicated’

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Reducing Drug Prices and Medicare’s Role: ‘It’s Complicated

The White House Rose Garden was in full bloom when President Trump took the podium to announce that his administration was “launching the most sweeping action in history to lower the price of prescription drugs for the American people.”

He said: “It’s been a complicated process, but not too complicated.”

Thing is, it is pretty complicated and made more so by the admittedly tangled web of lobbyists knocking with dogged determination on lawmakers’ doors in pursuit of one thing: higher drug prices.

Their efforts appear to be working. In 2017, they spent almost $280 million in pursuit of their employers’ objectives. Another estimate puts the cost of drug lobbying at $2.3 billion from 2006 to 2016, and it’s clear that the industry also pays substantially to support candidates for both houses of Congress.

The President talked about his announcement being “the most sweeping action in history to lower the price of prescription drugs.” If you remember the presidential campaign, he promised to utilize Medicare’s gorilla purchasing power to negotiate directly to reduce prices. That all sounded very promising.

What Medicare Can and Can’t-Do

Medicare buys more drugs than anyone else, because it has a base of approximately 60 million people over age 65 or younger with certain disabilities, and is the largest single healthcare payer. However, the law actually prevents Medicare from carrying on direct negotiations with pharmaceutical companies. Specifically, it bars the Secretary of the Department of Health and Human Services (HHS) from managing the negotiations. Right now that’s Alex M. Azar II, a former executive with behemoth pharmaceutical company Lilly USA LLC, of Eli Lilly and Co.

Many were chagrined that the “American Patients First” does not, in fact, have any mandate for Medicare to negotiate directly with drug manufacturers. Some have described the situation in general as a gift, with a big bow around it, to America’s drug companies.

To understand why this happened, it helps to understand some of the history. Hearken to 2006, when Congress was in the throes of arguing the federal law around Medicare’s Part D law, the Medicare Modernization Act that became enforced in 2003. It was the most extensive rejuvenation of the program in 38 years.

Lobbyists persuaded lawmakers that if Medicare gained the ability to negotiate, that it would be akin to price control and an affront to the free market. Insurance companies in charge of subsidizing the new coverage were charged with managing drug costs.

Drugs Do Come Cheaper

In contrast, AARP invites us to consider how the Veterans Health Administration (VHA) deftly negotiates drug prices. The proof is in the pricing, as VHA pays 80 percent less for brand names than Medicare Part D. The VHA’s formulary list, that magic roster of medications it covers is a powerful negotiating tool. The relationship between Medicare and Medicaid that exists within the Food and Drug Administration (FDA) means the former two agencies must cover all FDA-approved drugs. That’s in spite of the fact that less expensive and equally effective medications can be bought on the open market.

Maybe you wonder how your fellow Americans feel about all of this. Big surprise: Democrats, Republicans, and independents are all pretty much on the same page. That’s according to a report from the National Academies of Sciences, Engineering, and Medicine. The analysis states emphatically that “finding a way to make prescription medicines — and healthcare at large — more affordable for everyone has become a socioeconomic imperative.”

According to the Henry J. Kaiser Family Foundation, a majority of Democrats (96 percent), Republicans (92 percent), and Independents (92 percent) think that yes, our government should have to negotiate power here.

Maybe Yes, Maybe No

Kaiser’s analysis of this conundrum over the “noninterference clause” is this. Those in favor of having Azar negotiate think this would result in leverage to reduce drug costs, especially around medications with sky-high prices but with no competition. They say private plans just don’t pack enough punch that way.

As expected, those who proclaim “no” shrug and opine that the Secretary simply couldn’t get better deals done. Then there’s the argument that haggling over price would inhibit pharma’s research and development, limiting the opportunities for more and better medications to improve quality of life and save lives.

As Kaiser notes, in addition to allowing the HHS Secretary to make better deals on drugs, another option would be to establish a public Part D plan that works in partnership with private Part D. “The Secretary would establish a formulary for the public Part D plan and negotiate prices for drugs on that formulary.”

There’s also a compromise approach of sorts in the mix that would address those expensive drugs and those that don’t have therapeutic alternatives: The Secretary could negotiate those.

At the end of the day, before Medicare can become the drug price negotiator extraordinaire, the law must be changed, and that’s a big lift. Based upon history, even Republicans are not expected to want to do this, and for sure pharma will recoil. That leaves consumers using Part D watching and waiting for change.

Drug Negotiation Side Effects

Increasing negotiating around Medicare could have ramifications if the President transfers expensive medications from Part B — the first Medicare legislation in 1965 —
to Part D, says The New York Times.

AARP says it’s worried about increasing out-of-pocket charges if this happens. Also, 9 million Medicare members in Part B don’t have Part D, leaving a void as to who will pay medication costs.

The publication asked doctors for their opinions and one responded that one misstep could be “a disaster.” Another worried about Part D drugs’ prices increasing more than Part B’s. Still, other notes protected classes of Part D drugs that must be covered by insurance plans, but in this instance may hamper Part D negotiations.

 

 

Healthcare Triage News: Ending Risk Adjustment Payments Will Further Undermine Obamacare

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Healthcare Triage News: Ending Risk Adjustment Payments Will Further Undermine Obamacare

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The Trump administration announced its intent to stop making risk adjustment payments to insurers on the ACA marketplaces. Just… watch.

 

 

 

House panel advances bill that would temporarily halt ObamaCare’s employer mandate

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http://thehill.com/policy/healthcare/396770-house-panel-passes-bill-that-would-repeal-obamacares-employer-mandate

House panel advances bill that would temporarily halt ObamaCare's employer mandate

The House Ways and Means Committee on Thursday approved legislation that would chip away at ObamaCare, including a measure that would temporarily repeal the law’s employer mandate.

The bill sponsored by GOP Reps. Devin Nunes (Calif.) and Mike Kelly (R-Pa.) would suspend penalties for the employer mandate for 2015 through 2019 and delay implementation of the tax on high-cost employer-sponsored health plans for another year, pushing it back to 2022.

Congress repealed the penalty associated with the individual mandate last year, but it doesn’t take effect until 2019.

“I think it’s fair, if we relieve the burden for individuals, that we stand with our small and mid-sized companies,” Kelly said.

Powerful lobbying groups like the U.S. Chamber of Commerce have pushed for a repeal of the employer mandate.

The other measure, sponsored by Reps. Peter Roskam (R-Ill.) and Michael Burgess (R-Texas), would allow the use of ObamaCare’s tax credits for plans outside of the exchanges in the individual market. It would also allow anyone to purchase a catastrophic plan — plans that are cheaper but cover fewer services and are currently only available for those under the age of 30.

The bill “provides a much needed offramp for pressure people are feeling right no in terms of premiums increases and limited choices,” Roskam said.

Both measures advanced on party-line votes.

Democrats opposed the bills, saying they would cost too much and destabilize ObamaCare.