Tag Archives: Health Policy

Among Those Who Want to Lower Drug Prices, Cacophony, Not Consensus

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Everyone seems to want lower drug prices. 5 reasons why that hasn’t happened

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Everyone seems to want lower drug prices. 5 reasons why that hasn’t happened.

Of all his campaign promises, President Trump’s vow to bring down drug prices was perhaps the most popular.

An assortment of interest groups spoke out loudly and passionately on the need for action, from hospitals to doctors to insurers to generic drug makers to patients themselves.

And in many ways, they seem to have the clout, and resources, to counter drug makers’ slick ad campaigns and lobbying firepower. Last year, the American Medical Association, America’s Health Insurance Plans, and the American Hospital Association together spent more than $45 million lobbying Congress, almost twice what the drug makers’ group, PhRMA, spent in the same time period.

Instead, congressional efforts to lower drug prices are at a total standstill. In interviews with STAT, lobbyists, lawmakers, and congressional staffers, Republicans and Democrats alike, said the most powerful health industry players conspicuously disagree about exactly how to move forward. Every group pushes its own priorities and strategies — a cacophony that makes it unlikely that crushing drug prices will change any time soon.

“They all say, ‘Yes, we should [lower drug prices], and someone else is responsible for it,’” Sen. Patty Murray of Washington, the top Democrat on the Senate Health, Education, Labor, and Pensions Committee, told STAT. “Everybody needs to come to the table and say what can my industry do, what can pharma do. … That will be how we solve this.”

Solving it, however, seems a stretch when just addressing it has gone nowhere. Despite President Trump’s insistence, on the campaign trail and in office, that he will lower drug prices, there has been no major federal effort to do so in the first year of his administration.

The disarray was on full display at a recent congressional hearing, when representatives from nearly every major trade group with any stake in the country’s drug prices — AMA, AHIP, and AHA included — spent almost an hour and a half testifying without more than a cursory discussion of how Congress could fix the problem. When they finally did talk solutions, outside of buzzy phrases like “increase transparency,” almost none of their answers matched.

So why can’t the broader health care industry agree on how to make drugs more affordable? Here are five factors.

1. Health care lobbyists are stuck playing defense.

When it comes to drug pricing, hospitals, insurers, and PBMs in particular have spent the last year fending off congressional inquiries into their own business practices — leaving little time to go on the offensive.

Meanwhile PhRMA has alternately pointed at hospitals, insurers, and PBMs as the profiteers in the current system.

It’s “lobbying 101, to muddy the waters,” according to Rep. Peter Welch (D-Vt.). And in the complicated world of drug pricing, it’s an effective strategy.

Drug makers’ efforts to vilify PBMs and to demand more transparency about their role in the supply chain are well-documented. The Washington Post earlier this year called pharma’s tactics against those players an effort to “start an industry war.”

They’ve opened a similar front against insurers, ramping up rhetoric and backing new patient groups that decry how higher deductibles and copays mean steeper costs for consumers, even when list prices don’t change much.

And they’ve accused hospitals of marking up the price of drugs and pocketing the difference, both in general and specifically as part of a push to overhaul the hot-button 340B drug discount program.

“That disarray you talk about, it’s not accidental,” Welch said. “The flames of that are fanned by pharma, [which] is doing everything they can to create confusion about what’s the right remedy,” he said.

The problem, according to Walid Gellad, who leads the University of Pittsburgh Center for Pharmaceutical Policy and Prescribing, “is that every part of the industry says things that are correct. It is correct that one of the reasons patients are feeling such high prices is because they have to pay coinsurance and big deductibles,” Gellad said, noting that pharma’s concerns with the PBMs and hospitals had some validity, too. “And it’s true that pharma sets the list prices high. They do do that.”

PhRMA spokesman Robby Zirkelbach also said there was a reason for lawmakers’ interest in so many players: the validity of the concerns. He pointed to data that showed slowing growth of prescription drug prices and increasing copays and deductibles.

“There’s no wonder that people are continuing to dig into this issue, and what they’re realizing is that to really be able to address the drug pricing concerns that people have raised, you’ve got to address some of the misaligned incentives in the system,” he said. “This is a complicated system, and we’ve got to look at how money flows across the system.”

And the tactic has successfully diverted lawmakers’ attention. Republicans in both chambers of Congress have held hearings in the past year looking at the “supply chain” that goes into the cost of drugs — broadening their spotlight from the companies that set the price to the other actors that can impact it. And lawmakers on both sides of the aisle say they want to better examine the vast array of players before they make any sudden policy moves.

“There are some that zero in on just one piece of the cost curve, so what I’m trying to do on the committee is look methodically at every piece,” Rep. Greg Walden, the Oregon Republican who chairs the influential Energy and Commerce Committee, told STAT. “We’re going to look at PBMs, we’re going to look at hospital costs, we’re going to look at what insurance costs. We’re going to look top to bottom.”

2. Congress isn’t jumping to act.

Beyond hearings, Congress hasn’t actually shown great appetite to tackle drug pricing. And that lethargy can dampen lobbyists’ enthusiasm to throw their weight and resources behind a given campaign or piece of legislation.

One physician lobbyist called it a “chicken and the egg” problem, wondering whether it would be Congress or the industries to first signal their motivation to act.

Case in point: the so-called CREATES Act. It’s one of the few pieces of drug price legislation that has the support of hospitals, insurers, doctors and a whole host of other groups and companies. But it’s languishing on Congress’s to-do list.

The bill, like its counterpart, the Fast Generics Act, takes aim at what supporters call delay tactics that drug makers use to keep generic competitors off the market. The legislation would give generic manufacturers that are legitimately seeking product samples the right to sue the drug makers if they refuse to hand over those samples.

It’s a small but meaningful change — the Congressional Budget Office has estimated that the legislation could save Medicare, Medicaid, and other federal government health programs more than $3 billion over 10 years.

And industry has been pushing the legislation, albeit without the same urgency that’s animated other priorities. Together, many of the trade associations — along with some three dozen other groups and companies, including Walmart, CVS, and AARP — formed a coalition, the so-called Campaign for Sustainable Rx Pricing, to push the bill. They hired a handful of lobbyists who are largely focused on the issue, too, to the tune of $440,000 over 2017.

But as one supporter put it, “it’s kind of telling that it has to be such an egregious abuse for everyone to coalesce.”

So far, drug makers have blocked attempts to include the measure in the 21st Century Cures Act that passed in 2016 or in last year’s reauthorization of FDA user-fee agreements, a priority for the drug industry. They say the bill will weaken protections for patients and spur “meritless, wasteful litigation.”

Supporters were nonetheless optimistic about the path forward for the bill. Several lobbyists backing the effort, along with staffers in both the House and Senate, told STAT there is momentum on Capitol Hill to include the measure in an upcoming spending package since it could help offset some other spending.

3. Each industry has very different priorities, even when they do agree.

Even when they do agree — as on CREATES, for example — health industry lobbyists don’t always prioritize the same issues. Some may have spent 2017 more focused on the repeal and replace of the Affordable Care Act than drug pricing. Others might have they used their meetings with lawmakers to defend a tax credit. Or perhaps some argue for other, more important drug pricing policies that need to be tackled first.

“When you work with these other groups, they rank [policy proposals] differently. There are certain things they want first. So it’s not only about finding solutions you can agree on, but about which ones you want to do first,” one patient advocate told STAT.

Drug makers, on the other hand? Pricing is their primary concern.

Other groups “have their own fish to fry, their own priorities,” said David Mitchell, the founder of the patient group Patients for Affordable Drugs. For drug companies, “it’s their number one issue: drug pricing. All the rest of them have their own number one issues, and drug prices aren’t it.”

4. All the major players have a stake in the status quo.  

Academics had another easy explanation for the lack of consensus — and the lack of concerted effort — from health care industry groups that profess an interest in lowering drug prices. They all profit from the current system.

Hospitals are paying more for drugs for patients admitted to the hospital, but on the flip side, at least some facilities are profiting from reimbursements for drugs in outpatient settings and in their own specialty pharmacies, according to Peter Bach, the director of Memorial Sloan Kettering’s Center for Health Policy and Outcomes. PBMs also earn bigger rebates if the list prices are higher. And doctors, too, make more money under Medicare rules if they administer a more expensive drug to a given patient.

“People are paying these bills and the pie is getting bigger. Everyone’s arguing about where the knife comes in and cuts the slices of pie,” he said. “Everybody thinks everybody else is getting an unfair share.”

Gellad agreed.

“Everyone is making a lot of money. No one’s gone broke. So they don’t want to change things,” he said. “And that’s why the industry is not going to all agree to do something [on drug prices], because they’d all have to agree to lose money. Why would anyone agree to do that?”

5. There’s no silver bullet.

It’s not as if there’s one easy solution, ripe for the picking, if only groups could agree on it, several trade association officials told STAT. The piecemeal approach — getting behind policies like CREATES and then turning to other, smaller issues — may be the best way to approach the issue, they argued.

Similarly, lawmakers said there’s no one fix.

“The reason you haven’t seen all of the groups coalesce around one proposal — it’s not really clear what the solution is at this point because it’s such an opaque process,” Rep. Diana DeGette (D-Colo.) told STAT. “It’s hard to see what one solution there would be.”

Mitchell, along with a spokesman for the Association of Accessible Medicines, which represents generic manufacturers, also pointed to growing consensus behind smaller, targeted policies that would keep branded drug manufacturers from “gaming the system” — policies like CREATES and other changes to the patent system that could garner broader support. They each noted, too, that newly confirmed Health and Human Services Secretary Alex Azar, himself a former drug company executive, had voiced support for those changes during confirmation hearings.

They also preached patience. Bach, a former senior adviser to the Centers for Medicare and Medicaid Services, likened the push to the decades of jockeying between various environmental groups over fossil fuel regulation.

“Environmental regulation is a classic example of this,” Bach said. “You have this broad array of interested parties that would like to see movement, but the flavor of the movement they want, the ranking of their priorities, it’s not ‘one and only,’ even if it’s top [priority] — against a highly concentrated entity that specifically has a single agenda counter to it, with deep influence. That is a very hard row to hoe.”

“We are making progress,” he added. “But we get there in fits and starts.”

Court sets speedy 340B lawsuit schedule, siding with AHA

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https://www.healthcaredive.com/news/court-sets-speedy-340b-lawsuit-schedule-siding-with-aha/515988/

Dive Brief:

  • The American Hospital Association and other parties’ request for an expedited brief schedule for the group’s lawsuit over CMS cuts to the 340B program was agreed to by the U.S. Court of Appeals for the District of Columbia Circuit Tuesday, despite the government’s request for more time to respond to the lawsuit.
  • U.S. District Judge Rudolph Contreras dismissed the initial lawsuit in December, saying the groups did not have standing to sue because the cuts hadn’t yet taken effect. On January 11, AHA and the other groups appealed the decision, and then asked the court to expedite the case citing the immediate impact the cuts have on 340B hospitals’ ability to provide services to underserved communities.
  • Attorneys for the Department of Justice argued the compressed briefing schedule would not give adequate time for the government to prepare its brief and coordinate with affected agencies.

Dive Insight:

The lawsuit concerns a HHS final rule that took effect at the start of the year changing the amount 340B hospitals are paid for drugs to 22.5% less than the average sales price. Last year, hospitals paid the average price plus 6%.

“America’s hospitals and health systems are pleased that the U.S. Court of Appeals has accepted our expedited brief schedule in our appeal to reverse the significant cuts to the 340B Drug Savings Program, which for over 25 years has played a vital role in helping hospitals stretch scarce federal resources to expand and enhance patient services and access to care for vulnerable communities without any cost to the government,” Melinda Hatton, general counsel for the American Hospital Association, told Healthcare Dive.

AHA is joined in the lawsuit by America’s Essential Hospitals, the Association of American Medical Colleges, Eastern Maine Healthcare Systems (Brewer, Maine), Henry Ford Health System (Detroit) and Adventist Health System’s Park Ridge Health (Henderson, North Carolina).

The groups argue the cuts will hurt 340B hospitals’ budgeted operations, bond covenants and other items necessary to provide community care, and say the reimbursement change exceeds HHS’ authority.

“For 340B hospitals, the ability to provide care to their communities is tied to receipt of third-party reimbursements; constriction in the flow of Medicare revenues to 340B hospitals will increasingly constrict funds for medical care for all their patients, most particularly those who are poor and underserved and most reliant on these services,” the groups wrote in their request to expiate the appeal brief schedule.

AHA noted that it is actively exploring other options to address the cuts.

“We will continue to pursue our legislative and legal strategies to reverse these cuts, and expect to prevail in holding the agency accountable for overstepping its authority,” Hatton said.

The Court of Appeals set the the brief schedule to conclude by April 2, appearing to allow AHA’s request that oral arguments to occur by May, prior to the summer recess. “Otherwise the next opportunity for argument would be in September, which would likely significantly delay the resolution of this action,” the plaintiff attorneys had argued.

 

 

How Are Health Centers Responding to the Funding Delay?

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How Are Health Centers Responding to the Funding Delay?

 

Health centers play an important role in our health care system, providing comprehensive primary care services as well as dental, mental health, and addiction treatment services to over 25 million patients in medically underserved rural and urban areas throughout the country. Health care anchors in their communities and on the front lines of health care crises, including the opioid epidemic and the current flu outbreak, health centers rely on federal grant funds to support the care they provide, particularly to patients who lack insurance coverage. However, the Community Health Center Fund (CHCF), a key source of funding for community health centers, expired on September 30, 2017, and has since been extended through only March 31, 2018. The CHCF provides 70% of grant funding to health centers. With these funds at risk, health centers have taken or are considering taking a number of actions that will affect their capacity to provide care to their patients. This fact sheet presents preliminary findings on how health centers are responding to the funding uncertainty.

WHAT FUNDING IS AT STAKE FOR HEALTH CENTERS

The Community Health Center Fund represents 70% of federal grant funding for health centers. Established by the Affordable Care Act, the CHCF increased federal grant fund support for health centers, growing from $1 billion in 2011 to $3.6 billion in 2017.1Authorized for five years beginning in 2010, and extended for two years through September 2017, the CHCF also provided a more stable source of grant funding for health centers that was separate from the annual appropriations process. Prior to the CHCF, federal 330 grant funds were appropriated annually. In fiscal year 2017, federal section 330 grant funding totaled $5.1 billion, $3.6 billion from the CHCF and $1.5 billion from the annual appropriation.

Federal health center grants represent nearly one-fifth of health center revenues. Federal Section 330 grant funds are the second largest source of revenues for health centers behind revenues from Medicaid. Overall, 19% of health center revenues (including US territories) come from federal grants; however, reliance on 330 grant funds varies across health centers. Federal grant funds are especially important for health centers in southern and rural non-expansion states where Medicaid accounts for a smaller share of revenue (Figure 1).2 These funds finance care for uninsured patients and support vital services, such as transportation and case management, that are not typically covered by insurance

HOW ARE HEALTH CENTERS RESPONDING TO THE LOSS OF FEDERAL FUNDS?

Health centers have taken or are considering taking a number of actions that will affect their ability to serve their patients. Overall, seven in ten responding health centers indicated they had taken or planned to take action to put off large expenditures or curtail expenses in face of reduced revenue. Some of these actions involve delaying or canceling capital projects and other investments or tapping into reserve funds. Other actions, however, have or will reduce the number of staff or the hours they work, which may in turn, affect the availability of services. Already 20% of health centers reported instituting a hiring freeze and 4% have laid off staff. Another 45% are considering a hiring freeze and 53% said they might lay off staff. While health centers seemed to focus on shorter-term actions that could easily be reversed were funding to be restored, 3% of responding health centers had already taken steps to close one or more sites and an additional 36% indicated they are considering doing so

 

 

ACA marketplace enrollment has beat expectations

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Even with final numbers not yet in from several states, it’s fair to say that ACA marketplace enrollment has beat expectations.

 

https://www.kff.org/health-reform/state-indicator/marketplace-enrollment-2014-2017/?activeTab=graph&currentTimeframe=0&startTimeframe=4&selectedDistributions=number-of-individuals-who-selected-a-marketplace-plan&selectedRows=%7B%22wrapups%22:%7B%22united-states%22:%7B%7D%7D%7D&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

 

More than 50 groups push Congress to extend Medicare programs

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More than 50 groups push Congress to extend Medicare programs

More than 50 groups push Congress to extend Medicare programs

More than 50 health-care organizations are urging Congress to quickly pass a package of Medicare extenders, ideally in an upcoming short-term spending bill, arguing the delay could hurt seniors.

“Now that we are well into 2018, Congress’ inaction on these important Medicare policies could mean real harm to the vulnerable patients we serve,” the groups, including the Caregiver Action Network, Medicare Rights Center and National Partnership for Hospice Innovation, wrote in a letter sent Friday to Republican and Democratic leaders.

Several Medicare programs expired last year. Other health-care programs in need of a long-term funding renewal include special diabetes programs and the community health centers that serve the nation’s most vulnerable.

The last stop-gap spending bill came on the heels of a three-day government shutdown and included funding for the Children’s Health Insurance Program. Senate Majority Leader Mitch McConnell (R-Ky.) predicted Thursday that the government wouldn’t shut down again, as Congress will race to keep the government’s lights on when it returns next week.

Short-term funding legislation hasn’t been released, and it’s unclear if extensions of health programs will make it into the final product.

 

Lawmakers near deal on funds for community health centers

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The Hill Issuewatch Healthcare

Funding for community health centers could finally pass in the coming week as Congress faces a new government funding deadline.

House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) told The Hill on Friday that lawmakers “hope” to add money for the health centers to the short-term spending bill to be considered before a Feb. 8 deadline for funding the government.

Funding for the health centers, which serve millions of primarily poor people, has been delayed for months, causing uncertainty and in some cases hiring freezes or other steps.

Lawmakers are considering providing two years of funding.

In addition, a number of other health-care items could ride on the next government funding bill, or wait until a longer-term deal in a few weeks. A range of Medicare programs known as “extenders” need to be renewed, for example.

There is also the more controversial issue of actions aimed at stabilizing the ObamaCare marketplaces.

Momentum appears to be increasing for funding known as reinsurance that is aimed at reducing premiums.

Walden is backing a bill to provide the funding in the House, and Sen. Susan Collins (R-Maine) has been pushing for a similar measure in the Senate.

There is still some uncertainty and many conservatives deride the funding as a “bailout” of ObamaCare insurers.

Any action on ObamaCare stabilization appears more likely to wait as lawmakers try to craft a longer-term government funding deal by March.

Congressional committees are stepping up their efforts to examine the opioid epidemic.

On Tuesday, the House Ways and Means Committee will hold a hearing on preventing opioid abuse through Medicare. On Thursday, the Senate health committee will hold a hearing on the effects of opioid abuse on children and families.

Later in February, the House Energy and Commerce Committee will begin holding hearings to examine specific legislation related to the crisis.

Some Jobs Are Best Left to the Nonprofits

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https://www.bloomberg.com/view/articles/2018-02-01/some-jobs-are-best-left-to-the-nonprofits?utm_campaign=KHN:%20Daily%20Health%20Policy%20Report&utm_source=hs_email&utm_medium=email&utm_content=60406871&_hsenc=p2ANqtz–p6LLq3KGruyf8cxGYEWvzT4LzONfY0U7Nn1r39Ijl9mJf2I9nxEjZ1SABngM4CXcNNOxmf9vg_kjpMkg1MO_G4W_Lrg&_hsmi=60406871

Health care might be one of them. Amazon, Berkshire Hathaway and JPMorgan certainly hope so.

Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. are publicly traded, profit-oriented corporations. 1 So it is interesting that when they announced their new joint health-care venture this week they made a point of saying it would be “an independent company that is free from profit-making incentives and constraints.”

Interesting but maybe not all that surprising: Around the world, health, life and property insurance, as well as various other financial services, have long been provided by nonprofit organizations, mostly in the form of customer-owned mutuals. From the 1960s through 2000s, wave after wave of conversions turned many of these entities — especially in the U.S. and U.K. — into shareholder-owned for-profit corporations. But since the global financial crisis, the idea that corporations out to maximize shareholder returns might not always be the best at managing financial and other risks has undergone something of a revival.

Just to be clear: It looks like this new Amazon-Berkshire-JPMorgan entity will be owned by the three companies, not the employees it serves. That is, it won’t technically be a mutual. But the three companies’ apparent belief that the for-profit-insurer-dominated private health-care market in the U.S. isn’t cutting it — and that “profit-making incentives” are at odds with improving health-care delivery and cutting costs — got me thinking about the strengths and weaknesses of mutuals and other nonprofits relative to conventional corporations.

Mutuals that are owned by and distribute excess cash to their customers have been around for centuries, in many cases predating their for-profit counterparts. Some of the first insurance companies were organized in the 1600s and 1700s in the Netherlands and U.K. as customer-owned cooperatives, and the mutual organizational form has remained prominent in life and property insurance ever since. The 1800s saw an explosion of mutual activity, with fraternal organizations, trade associations, labor unions, social reformers and philanthropists starting co-operative lenders, health-care providers, pension funds, groceries, farming enterprises and even factories. This continued into the 20th century, although in Europe these mutual organizations were often co-opted or supplanted by government social insurance programs. 2

In the U.S., mutuals and nonprofits with mutual-like characteristics have continued to play major roles in insurance, money management, health care and other fields — including outdoor gear, which is top of mind at the moment because I recently spent a bunch of money at customer-owned Recreational Equipment Inc. But these mutuals and co-ops have just spent several decades on the defensive, with “demutualizations” in which mutual customers are given shares in newly created for-profit corporations transforming sector after sector.

I think this trend started with mutual funds, sort of. The first mutual fund, Massachusetts Investors Trust, was founded in 1924 as a true-blue customer-owned nonprofit. Most of the funds that followed in its footsteps were controlled by for-profit investment advisers, but for decades after the 1929 stock-market crash, those advisers acted more like cautious trustees than risk-taking profit-maximizers. Things changed during the booming stock market of the 1960s, with fund advisers getting much more aggressive in their investing and marketing, and in some cases acquiring competitors. In 1969, Massachusetts Investors Trust threw in the towel, demutualizing and transforming itself into Massachusetts Financial Services, which is now a subsidiary of Canada’s Sun Life Financial Inc. Mutual funds themselves are all still technically mutual, but the business (with one huge exception that I’ll get to in a moment) really isn’t.

Savings and loans demutualized in a more formal fashion in the 1980s, after the Garn-St. Germain Depository Institutions Act of 1982, in an attempt to attract new capital into the struggling industry, made it much easier for customer-owned S&Ls to convert to shareholder-owned corporations. (Credit unions remain the banking industry’s mutual holdout in the U.S.) Then life insurers began a great demutualization wave in the 1990s, with many of the industry’s biggest names — MetLife Inc., Prudential Financial Inc., John Hancock — switching from customer-owned to publicly traded. The Blue Cross and Blue Shield Association of mutual health insurers began allowing its members to switch to for-profit in 1994. And with Sweden, of all places, leading the way in 1987, stock exchanges began demutualizing as well.

For exchanges, it’s pretty easy to make the case for demutualization. With technological change, deregulation and internationalization transforming their business landscape, single-country, member-owned mutuals were in no position to compete. Publicly traded exchanges could raise capital, merge across national lines and take other steps that wouldn’t have been practical under a mutual structure.

Access to capital and increased flexibility have been offered up as leading reasons for demutualization in other industries as well. Also, in an influential pair of 1983 papers, finance scholars Eugene Fama and Michael Jensen argued that mutuals and other nonprofits lacked some of the control mechanisms — the threats of hostile takeover and shareholder activism, mainly — that kept managers of publicly traded corporations from taking advantage of owners. Empirical research since then has shown demutualized companies to be more efficient and achieve higher returns on capitalthan their mutual peers.

But that’s not the end of the story. It’s not entirely coincidental that the mass demutualization of the savings and loan industry in the 1980s was followed by an industrywide meltdown that cost taxpayers more than $100 billion. And remember Northern Rock, the U.K. institution that suffered a bank run in 2007 that was an early harbinger of the financial crisis? It had demutualized in 1997. On the whole, mutual financial institutions seem to have held up better during the financial crisis than their for-profit competitors. Mutual executives have fewer incentives to take risks, and that can sometimes be a good thing. There’s also evidence that mutual executives do more than just pay lip service to their customer-owned status. Mutual auto insurers in the U.S. — especially those such as Amica Mutual and USAA that pay regular dividends to customers — pay out a higher percentage of their premiums in claims than for-profits, according to one recent study. Mutual insurers perennially top for-profits in customer satisfaction rankings, and credit unions perennially top banks (although the banks have been catching up lately).

All in all, then, it seems that mutuals are, if not necessarily better than investor-owned for-profit corporations, pretty nice to have around. During and after the financial crisis, consumers seemed to take notice of this, with mutuals’ share of the global insurance market jumping from 23.6 percent in 2007 to 27.8 percent in 2013, according to the International Cooperative and Mutual Insurance Federation. That share has since sagged backed to 26.8 percent, though. Mutuals’ advantages may be less apparent when times are good.

Also, while there are multiple forces pushing mutuals to demutualize — not least the possibility of stock-market riches for their executives — there’s very little pushing in the opposite direction. The only major conversion to mutual status that I can think of in the U.S. over the past half century was Vanguard Group Inc., which arose in 1974 out of a power struggle at for-profit mutual fund adviser Wellington Management during which ousted president John C. Bogle talked the board members of Wellington’s mutual funds into seizing effective control of the whole operation. That was a rare case where mutualization seemed to help a top executive’s career prospects (although in the long run it probably resulted in Bogle making a lot less money than if he had simply gotten a job at another mutual fund company).

Starting new mutuals isn’t easy, either: The health-insurance co-ops created by the Affordable Care Act were undeniably a bust, although there’s disagreement over whether inadequate support or design flaws doomed them. And New York’s Freelancers Union, another relatively recent addition to the mutual landscape, got out of the health insurance business in 2014 after ACA rules made it impractical.

Once up and running, though, mutuals can be formidable competitors — as everyone else in the mutual fund industry can attest after decades of rapid growth at low-fee index-fund innovator Vanguard. Health care in the U.S. could sure use some low-fee innovation. Maybe, just maybe, Amazon, Berkshire and JPMorgan will find a nonprofit, mutual-ish way to get there. There are precedents: Nonprofit investment giant TIAA was founded by steel magnate Andrew Carnegie; the mostly nonprofit Kaiser Permanente health-care system was the doing of another industrialist, Henry J. Kaiser. For modern magnates Jeff Bezos, Warren Buffett and Jamie Dimon, creating something like that — or something better — would make for a pretty nice legacy.

 

5 Key Healthcare Points From Trump’s State of the Union

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http://www.healthleadersmedia.com/leadership/5-key-healthcare-points-trump%E2%80%99s-state-union?utm_source=edit&utm_medium=ENL&utm_campaign=HLM-Daily-SilverPop_02022018&spMailingID=12862476&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1340163930&spReportId=MTM0MDE2MzkzMAS2#

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The president outlined healthcare accomplishments from his first year in office, addressing a closely watched issue for many Americans.

President Donald Trump delivered his first State of the Union address Tuesday night, highlighting policy goals while welcoming a “new American moment.”

Over the course of 90 minutes, Trump discussed several healthcare-related legislative achievements, including adjustments to the Affordable Care Act as well as new care accountability measures for the Department of Veterans Affairs (VA).

Below are five key takeaways from the president’s speech to Congress:

1. ‘The individual mandate is now gone.’

Trump touted the repeal of the individual mandate penalty, calling the eliminated provision “an especially cruel tax.”

The measure, which required Americans without health insurance to pay a fine, was removed as part of the tax reform bill passed late last year.

The penalty is $695 or 2.5% of an individual’s income, whichever amount is greater, and remains in effect for 2018. The elimination will take place next year.

Though Trump did not call for a renewed effort to repeal the ACA in its entirety, he said the Republican-controlled Congress successfully repealed “the core of disastrous Obamacare.”

2. No mention of upcoming funding deadline or community health centers.

Trump did not acknowledge the recent six-year extension granted to the Children’s Health Insurance Program (CHIP), which was part of the continuing resolution that reopened the government last week after a three-day shutdown.

There was also no mention of the February 8 deadline to pass another continuing resolution or pass an omnibus budget package. Such action would likely have to address the fate of over 10,000 community health center (CHC) sites across the country. Federal funding for CHCs lapsed on October 1, so they have been funded by temporary spending packages since then.

Despite the next deadline coming in little more than a week, Trump did not speak on the issue last night.

3. Will call for unity result in bipartisan solutions?

The president’s speech centered on a call for unity among Americans and members of Congress alike. Such bipartisanship will be important in order to avoid a second government shutdown in as many months and to address lingering healthcare policy concerns.

There are two bills in the Senate with bipartisan cosponsors seeking to stabilize the federal insurance exchange markets: Alexander-Murray and Collins-Nelson. Trump’s call for bipartisanship in the final crafting and debate over these measures will play a role in determining their road to passage.

Newly confirmed Health and Human Services Secretary Alex Azar applauded the speech in a statement released late Tuesday night.

“I commend President Trump for delivering a speech that celebrated the economic boom we have seen under his leadership, which has brought new opportunity and prosperity to the American people,” Azar said. “A healthier economy means a healthier America, and we look forward to more such success in the coming year, including through reforms to make healthcare more affordable and accessible for all Americans.”

4. Reduce price of prescription drugs, endorse “right to try.”

Continuing with a campaign promise to lower prescription drug costs, Trump said the FDA is following his administration’s lead to approve more generic drugs and medical devices.

“One of my greatest priorities is to reduce the price of prescription drugs,” Trump said. “In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.”

Trump also urged Congress to take up the issue of the “right to try,” a policy allowing terminally ill patients to access experimental treatments without having to leave the U.S.

“President Trump says reducing price of prescription drugs is one of his highest priorities,” tweeted Bob Doherty, senior vice president for government affairs and public policy at the American College of Physicians. “Doctors and patients certainly hope so and will be glad to do their part.”

5. Signed VA healthcare accountability bill into law.

Trump promised to ensure veterans have a choice in their healthcare decisions, after reports of substandard care at VA medical facilities surfaced in recent years.

In June, Trump signed the VA Accountability Act, which eased restrictions on removing employees who were accused of wrongdoing while also protecting whistleblowers.

The president said the VA has already fired more than 1,500 employees who “failed to give our veterans the care they deserve.”

VoteVets, a progressive veterans advocacy group, criticized Trump’s remarks Tuesday night. The organization highlighted the push by Republican lawmakers to cut $1.7 trillion from federal healthcare programs, which 1.75 million veterans rely on for coverage.

 

Podcast: ‘What The Health?’ The State Of The (Health) Union

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https://khn.org/news/podcast-what-the-health-the-state-of-the-health-union/

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In his first State of the Union Address, President Donald Trump told the American public that “one of my greatest priorities is to reduce the price of prescription drugs.” But that message could barely begin to sink in before other health news developed: The director of the Centers for Disease Control and Prevention was forced to resign Wednesday after conflict-of-interest reports.

Meanwhile, outside the federal government, Idaho is proposing to allow the sale of individual insurance policies that specifically violate portions of the Affordable Care Act. And three mega-companies — Amazon, Berkshire-Hathaway, and JPMorgan Chase — say they will partner to try to control costs and improve quality for their employees’ health care.

This week’s “What The Health?” panelists are Julie Rovner of Kaiser Health News, Alice Ollstein of Talking Points Memo and Julie Appleby and Sarah Jane Tribble of Kaiser Health News.

Among the takeaways from this week’s podcast:

  • Despite Trump’s strong rhetoric in the State of the Union Address, the president has taken few actions during his first year in office to reduce drug prices.
  • The president touted that Republicans had repealed the health law’s requirement that individuals get health insurance or pay a penalty. But that change in the law doesn’t go into effect until 2019, so his comments could be confusing to some taxpayers.
  • Idaho officials have announced that they are going to allow insurers to issue policies that don’t meet all the criteria of the federal health law. But it’s not clear that insurers are interested in participating in the experiment.
  • “Alexa, send me my Lipitor!” Can Amazon’s announcement that it and two other corporate behemoths are taking on employees’ health care create a new formula for keeping costs down and improving quality?