Walmart implements a narrow network for diagnostic imaging

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Starting last March, retail giant Walmart now requires that its employees use a select network of 800 diagnostic imaging providers, or face additional out-of-pocket costs, according to an article this week from Kaiser Health News. Lisa Woods, Walmart’s senior director of benefits design, said high error rates in imaging studies were the driver for establishing the program, with the perspective that “a quality MRI or CT scan can improve the accuracy of diagnoses early in the care journey.”

The network was created in partnership with New York-based Covera Health, a technology company that has amassed information on thousands of imaging facilities nationwide, and uses independent radiologists to evaluate a sample of studies to determine facility and radiologist error rates. According to the article, while many employers have steered employees to lower-cost imaging networks, Walmart is the first to do so based on quality of the studies.
 
Whether this network will be effective in achieving its stated goal—reducing misdiagnoses that lead to unnecessary care and surgery—remains an open question. Poor-quality imaging undoubtedly leads to repeat studies, which carry significant costs. But many other factors (clinical judgement, incentives, patient preferences) contribute to the decision to perform surgery. Defining imaging “quality” beyond the blunt measures of repeat rates, technical adequacy and radiologist sub-specialization is highly complex, and requires correlation with pathology and clinical outcomes data—a high bar for an outsourced analytics provider.

Despite Walmart’s goals, it will be difficult for imaging providers to differentiate their services solely on quality. The high variability in imaging prices is well-documented, and choice of provider is largely made by consumers, for whom imaging is a commodity service.

Without an activist employer or payer to steer them, consumers will likely continue to choose their imaging providers based on their doctor’s recommendation and out-of-pocket costs.

 

New Tax Will Help Washington Residents Pay for Long-Term Care

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In other healthcare news from the Evergreen State, Gov. Inslee also signed a law this week that will provide a new long-term care benefit for state residents starting in 2025. In the furthest-reaching legislation of its type nationally, the new Washington law puts in place a payroll tax of 0.58 percent starting in 2022, and creates a year-long, $100/day allowance for state residents that can be used to pay for nursing home fees, at-home caregivers, and other long-term care needs.

Family members who are full-time caregivers can also receive compensation. Like other states, Washington spends a growing portion of its state budget on paying for long-term care for aging residents, putting a heavy burden on the finances of its Medicaid program that’s expected to worsen as the Baby Boom generation ages. In addition to nursing and caregiver services, the new benefit can also be used for in-home meals, housing repairs, and other services that impact health status.

As with its “public option” plan, Washington has taken the lead on another healthcare coverage issue that will eventually need to be addressed nationwide: the fact that seniors are entering retirement entirely unprepared for the amount they’ll need to spend on long-term care.

Medicaid currently pays for two-thirds of nursing home care and 60 percent of all long-term care costs, and no state is currently prepared for the amount of spending that will be required over the next 25 years. Almost no one buys long-term care insurance, which is unaffordable for most. Any serious attempt to expand coverage over the next few years must take on this critical issue.

 

 

Democrats Have No Safe Options On Health Care

Democrats Have No Safe Options On Health Care

Even though most of the candidates have committed to some form of universal health care, the Democratic primary is turning into a debate about the future of the country’s health care system. Presidential hopefuls have proposed policies ranging from an ambitious four-year plan to transform Medicare into a universal single-payer system, in which the government pays for everyone’s health care and private insurance plans are effectively eliminated, to a more modest scheme that would leave the existing health care system intact but create a government-administered public insurance plan people could choose to purchase. But some of the candidates have been light on policy specifics, so it’s likely that health care will be a big topic at the debates and beyond.

In the abstract, focusing on health care makes a lot of political sense for Democrats. It was a top issue among Democratic voters in the 2018 midterms, and the Trump administration recently renewed its efforts to strike down the Affordable Care Act in the courts, which means the law could be hanging in the balance throughout the primaries and into the general election. A recent ABC News/Washington Post poll also found that Americans, by a 17-point margin, say that President Trump’s handling of health care makes them more likely to oppose him than to support him in 2020. By a similar margin, an Associated Press/NORC poll found that Americans trust Democrats more than Republicans on health care.

All of this means that Democrats are heading into the 2020 election cycle with a serious edge on an issue that has the potential to mobilize their base. But if the candidates pitch big, sweeping changes to the health care system without addressing voters’ concerns about cost and access, that advantage won’t necessarily hold up. And trying to sell Americans on a completely new system carries risks, even in the primaries.

Why do people care about health care so much?

First, it’s important to understand how health care has morphed over the past decade from just another issue to one of the issues voters care most about. In the 2018 exit polls, 41 percent of voters said health care was the most important issue facing the country, up from 25 percent in 2014 and 18 percent in 2012. (It wasn’t asked about in 2016.) And although Democrats are more likely to prioritize health care than Republicans, a Pew Research Center poll from January found that a majority of Republicans say health care costs should be a top priority for Congress and the president.

The reason? Health care is becoming more of a financial burden, according to Mollyann Brodie, executive director for public opinion and survey research at the Kaiser Family Foundation. Specifically, Americans’ out-of-pocket health care costs have risen significantly over the past decade, even for workers who get insurance through their jobs. In an economy that by many measures is doing well, health care — rather than something like taxes — is becoming one of voters’ most important pocketbook issues, she said. “If you’re worried about whether you or your loved ones can afford your next health care bill, that’s really a matter of life or death, so you can understand why this issue is moving to center stage politically.”

And Americans are increasingly likely to say that the government has an important role to play in ensuring access to health care. In November, Gallup found that 57 percent of Americans said they think it’s the federal government’s responsibility to ensure that everyone has health care coverage, up from a low of 42 percent in 2013. Support for the Affordable Care Act rose over the same period, too. But, notably, support for government intervention in the health care system was even higher before President Obama was elected and the ACA passed — in 2006, 69 percent of Americans thought the government should guarantee health care coverage.

While support for government involvement in health care is rebounding, it’s not clear how much change voters are really asking for. “The average American is first and foremost concerned about the financial problems facing their family,” said Robert Blendon, a professor of health policy and political analysis at Harvard. “They’re less worried about system-level concerns like health care spending and inequality. They want their existing coverage to be better and more affordable.”

What do voters want politicians to do?

Americans aren’t opposed to the idea of government-run health care, but there’s not a lot of consensus on what that would mean. For example, a recent Kaiser Family Foundation poll found that a majority (56 percent) of Americans favor a national “Medicare for All” plan. But according to a March Morning Consult poll, Americans are more likely to favor a plan that offers some kind of public option — a government-sponsored health insurance plan available in addition to existing private plans — over a system where everyone is enrolled in the same plan.

But this apparent contradiction makes sense, according to Brodie, because Americans are risk-averse when it comes to health care, and the switch to single-payer would affect far more people than the ACA did. Tens of millions of previously uninsured people received coverage under the ACA, but that number would be dwarfed by the 156 million people who get their insurance through their employers and could see their coverage change if the country switched to a single-payer plan. “Even if the current system isn’t working, transitions are scary,” Brodie said. “And people aren’t necessarily aware of what a national plan really means. When you start telling people that there might not be any more private insurance companies, that’s actually not a popular position.” For example, a January Kaiser Family Foundation poll found that support for a national Medicare for All plan dropped significantly when respondents were told it would mean eliminating private insurance companies.

And when asked what health care policies they want Congress to prioritize, Americans don’t list Medicare for All first. Instead, according to a recent Kaiser Family Foundation poll, they want Congress to pass targeted measures that would lower prescription drug costs, continue the ACA’s protections for preexisting conditions and protect people from surprise medical bills. Only 31 percent of Americans say that implementing Medicare for All should be a top priority for Congress, compared to 68 percent who want lowering drug prices to be a top priority. Moreover, prioritizing Medicare for All is politically polarizing: Only 14 percent of Republicans support putting that kind of plan at the top of the to-do list, compared to 47 percent of Democrats.

Some health care issues get only one-sided support

Share of Republicans and Democrats who say each issue should be a top priority for Congress, and the difference between the parties

Dem. Rep. Diff.
Making sure the ACA’s preexisting condition protections continue 82% 47% D+35
Implementing a national Medicare for All plan 47 14 D+33
Expanding government financial help for those who buy their own insurance coverage on the ACA marketplace to include more people 36 18 D+18
Lowering prescription drug costs for as many Americans as possible 77 66 D+11
Protecting people from surprise high out-of-network medical bills 55 45 D+10
Repealing and replacing the ACA 16 52 R+36

Source: Kaiser Family Foundation

However, smaller policy steps like lowering prescription drug costs and protecting people from surprise medical bills get more bipartisan support. Overall, Americans seem to be more concerned with fixing the current health care system than creating a sweeping new replacement — even if that replacement could address the issues they most want fixed in the current system.

What does this mean for the Democrats?

The complexity of Americans’ views on health care doesn’t change the fact that Democrats have a big advantage over Republicans on this issue, but it does mean that the individual candidates are in a tough spot because there’s no obvious unifying message they can adopt for the primary. And embracing a single-payer plan now could hand the GOP a weapon for the general election, allowing Republicans to frame the health care discussion around the Democrats’ controversial plan while glossing over Trump’s efforts to dismantle the ACA.

“The safest bet for a Democrat in the general election is to emphasize Trump’s track record on health care and say you’re going to make the ACA work,” Blendon said. The problem is that while that kind of argument might appeal to moderates, it’s likely to fall flat among a significant sector of the Democratic base that supports prioritizing a national Medicare for All plan over improving and protecting the ACA.

Democrats arguably still have an opening to make a case for a more ambitious health care overhaul, since voters still have relatively little information about what something like Medicare for All means. “It’s fine to support single-payer if you think that’s where the country needs to go, but you can’t just lean on principles like fairness or equality when you’re selling it,” said David Cutler, an economist at Harvard who advised Obama’s campaign on health care strategy. “You also have to tell voters, very specifically, what you are going to do to lower their costs and improve their coverage next year — not in 10 years.”

Even though Americans mostly prefer Democrats’ health care positions to the GOP’s, Democrats still risk alienating voters if they emphasize bumper-sticker slogans over concrete strategies for reducing the financial burden of health care. This is particularly important because their base of support for a single-payer system may be shallower than it appears, even within the party — especially when it comes to getting rid of private insurance. Big changes to the status quo are always politically challenging, but they may be especially risky when many Americans are concerned about losing the protections they already have.

 

 

 

Warning: Signs of credit crisis grow

https://www.axios.com/credit-crisis-banks-us-debt-4b77bbc4-395b-4c1e-9be4-b29d72548315.html

A credit card machine catching on fire

A recent survey of bank officers shows U.S. institutions are tightening their lending standards and raising rates on commercial loans and credit cards.

Details: Bankers say they have increasing concern about future economic growth, despite continued U.S. labor market strength and solid economic fundamentals. The data banks are seeing runs contrary to the overall narrative of a strong U.S. economy.

Driving the news: Credit card delinquency rates in Q1 hit the highest level since 2012, driven in part by a spike in overdue payments by people ages 18–29, according to a report out this week from the New York Federal Reserve.

What’s happening: In addition to the inability to make credit card payments, the rise in younger borrowers’ delinquency rates — by far the highest among all age groups — reflects the cohort jumping into the credit card market at a faster rate, as well as the eagerness of banks to latch on to younger consumers. Still, the delinquency rate remains well below that seen during the financial crisis.

  • More young people are opening credit cards now than they did in the the past decade — about 52% in 2018 verses 46% in 2008, per the New York Fedpushing up the likelihood of more delinquencies.
  • Credit card accounts among young borrowers fell in 2009 following the passage of the Card Act, which added new rules for consumers under 21 looking to borrow and limited how much banks could advertise to young people.
  • “There has been some recovery in credit card prevalence in recent years, consistent with increased issuance in card accounts,” according to the Fed.

Why it matters: After the financial crisis, young people had been largely debt-averse — particularly with credit cards — as a result of the the Great Recession. But that trend looks to be reversing.

  • “Banks were a little concerned going forward and [expect to] tighten standards,” David Norris, head of U.S. credit at TwentyFour Asset Management, tells Axios.
  • “I think from the viewpoint of the marketplace, if that’s going to continue … it works its way into consumer spending habits, consumer attitudes, and that can affect the demand side of the economy.”

That move comes as U.S. debt is $1 trillion higher than its previous record…

The N.Y. Fed’s latest report shows that total household debt increased by $124 billion in Q1. It was the 19th consecutive quarter with an increase, and household debt is now $993 billion higher than the previous peak of $12.68 trillion in the third quarter of 2008.

Between the lines: Delinquency rates are trending up again, and not just for younger consumers.

  • The report found that seriously delinquent credit card balances have also risen for consumers aged 50–69.
  • For borrowers aged 50–59 and 60–69, the 90-day delinquency rate increased by nearly 100 basis points each.

“People are probably extending themselves too much,” said TwentyFour’s David Norris, also noting that the headline numbers for Q1 U.S. GDP were a bit misleading.

  • “Banks are seeing this currently and they’re beginning to get concerned about credit quality and the quality of borrowers and they’re trying to tighten standards. This is a signal that we need to watch out for.”

A deeper look at the credit card delinquencies that are steadily rising…

  • In the Fed’s latest U.S. bank senior loan officers survey, which provided data from the fourth quarter of 2018, loan officers predicted more delinquencies this year as a result of the growth of “non-prime” borrowers. They’ve cited that as a reason for an anticipated pullback in credit and an increase in rates.
  • U.S. card holders are expected to pay $122 billion just in interest charges this year. That’s 50% more than what they paid just 5 years ago.
  • The average credit card assessed interest rate is now 16.91%. It was 13.14% in the first quarter of 2014.
  • The average interest rate on retail cards is more than 25%.

 

 

 

Number of uninsured adults reaches post-ACA high

https://www.healthcaredive.com/news/number-of-uninsured-adults-reaches-post-aca-high/546653/

Dive Brief:

  • The uninsured rate in the U.S. is at a four-year high, having reached 13.7% in the fourth quarter of 2018, according to a new Gallup poll. That rate is the highest since the Affordable Care Act’s individual mandate was implemented in 2014. 
  • Despite the rise in the uninsured rate, it’s still below the peak of 18%, recorded in the third quarter of 2013. That figure then dropped to an all-time low of 10.9% in 2016. The elimination of the individual mandate penalty, cost-sharing reductions and other policy decisions made under the Trump administration have helped boost the rate back up. 
  • According to Gallup, the uninsured rate has increased most among women, young adults and low-income Americans. Separate research has shown the number of uninsured children in the U.S. has also increased for the first time in over a decade.  

While employees are one of the largest costs for most hospitals, they’re also critical to the success of health systems. Our Trendline covers everything you need to know about labor in the healthcare industry

Dive Insight:

The Affordable Care Act helped the U.S. reach historical lows for the rate of uninsured adults, but that figure has continued to tick back up as the Trump administration has undermined the law.

In all, the 2.8 percentage point increase since 2016’s low point represents about 7 million more uninsured Americans. Most of those 7 million became uninsured in 2017, which experienced the largest single-year increase (1.3 percentage points) since Gallup began polling Americans on the question in 2008.

The continued rise in the uninsured rate is reversing the gains made under the Affordable Care Act.

The ACA ushered in a time when people could buy insurance not tied to a job — without having to worry about being denied for having a pre-existing condition such as diabetes or cancer. Plus, it allowed states to expand Medicaid to low-income residents who otherwise could not afford to purchase private coverage on their own.

During that time of record-low uninsured rates, many Americans were required to have health insurance or risked incurring a financial penalty.

But once President Donald Trump was elected he began working to overturn the law. In December 2017, the GOP’s tax bill eliminated the financial penalty for not having insurance. 

A separate Commonwealth Fund report found that the uninsured rate was up significantly among working adults in states that did not expand Medicaid.

 

 

 

Can States Fill the Gap if the Federal Government Overturns Preexisting-Condition Protections?

https://www.commonwealthfund.org/blog/2019/can-states-fill-gap-preexisting-condition-protections

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Once again, the Affordable Care Act (ACA) is under threat, this time in the form of Texas v. Azar, a federal lawsuit challenging its constitutionality. This litigation, now under consideration by the Fifth Circuit Court of Appeals, took an unexpected turn in March when the U.S. Department of Justice (DOJ) sided with the plaintiffs, urging the Court to strike the ACA down in its entirety.

On May 1, the administration filed a brief in support of this action. But even before this suit, DOJ had refused to defend key provisions that guarantee coverage of preexisting conditions. If the courts agree with the DOJ, it would invalidate every provision of the 2010 law.

As many as 20 million people nationwide would lose their coverage, while millions more could face insurance company denials, premium surcharges, or high out-of-pocket costs because of their health status.

ACA Protections for People with Preexisting Conditions

  • Guaranteed issue. Health insurers are prohibited from denying an individual or employer group a policy based on their health status.
  • Community rating. Health insurers may not use an individual or small employer group’s health status to set premiums.
  • Preexisting condition exclusions. Health insurers and employer group plans are prohibited from refusing to cover services needed to treat a preexisting condition.
  • Essential health benefits. Health insurers selling to individuals and small employers must cover a minimum set of 10 “essential” benefits: ambulatory services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services; and pediatric services, including oral and vision care.
  • Cost-sharing protections. Health insurers and employer group plans must cap the amount enrollees pay out-of-pocket for health care services each year.
  • Annual and lifetime limits. Health insurers and employer group plans are prohibited from imposing annual or lifetime dollar limits on essential health benefits.
  • Preventive services. Health insurers and employer group plans are required to cover evidence-based preventive services without any enrollee cost-sharing.
  • Nondiscrimination. Health insurers must implement benefit designs for individuals and small employers that do not discriminate based on age, disability, or expected length of life.

To help blunt potential fallout and prevent adverse effects for millions of individuals, several states are enacting bills to ensure that federal ACA protections become part of state law (see box). However, before the ACA, state efforts to require insurers to cover people with preexisting conditions resulted in large premium spikes and, in some cases, caused insurers to exit the market.

The ACA’s premium subsidies have had a critical stabilizing effect. If those subsidies are invalidated, states will have a hard time restoring them with state dollars. In addition, state regulation of self-funded employer plans is preempted under the federal Employee Retirement Income Security Act (ERISA), meaning the 61 percent of people with this type of job-based coverage can regain their protections under the ACA only if Congress steps in to restore them.

States Are Stepping Up, but Power to Fully Protect Consumers Is Limited

In a previous post, we found that at least four states (Colorado, Massachusetts, New York, and Virginia) had laws that would preserve key ACA preexisting-condition protections if the federal law is overturned. Since that time, seven more states (Connecticut, Hawaii, Indiana, Maine, Maryland,1 New Mexico, and Washington) have acted to preserve the ACA’s protections for their residents.

These bills take different approaches. Maine, New Mexico, and Washington passed comprehensive bills that would preserve all the protections listed above. The Connecticut, Hawaii, and Indiana laws are more narrowly focused. Hawaii and Indiana prohibit insurers from imposing preexisting condition exclusions; Connecticut aligns its benefit standards with the ACA. Maryland took a different approach, creating a workgroup to recommend ways to protect residents if the ACA is struck down. The governors of New Jersey and Rhode Island have issued executive orders directing their state agencies to uphold the ACA’s principles, by guarding against discrimination based on preexisting conditions and strengthening consumer protections to ensure access to affordable coverage.

Looking Forward

The Fifth Circuit Court of Appeals is expected to hear arguments in Texas v. Azar in July. Whatever that court decides, the losing party is likely to ask the Supreme Court to hear the case, and a ruling could come as soon as June 2020. With the future of the ACA hanging in the balance, at least 14 other states are considering legislation codifying some of the federal consumer protections during their 2019 sessions.

 

 

 

How to save $80 billion a year on prescription drugs

https://www.axios.com/newsletters/axios-vitals-2b22d854-43a4-481f-aa30-d1b14d859e29.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Illustration of a bill with money print on it.

Medicare could have saved almost $80 billion, just in 2018, by matching the U.K.’s prices for prescription drugs that don’t have any competition, according to a new study released in Health Affairs yesterday.

Why it matters: Medicare’s drug benefit was designed to keep prices in check through competition. But competition doesn’t always exist, and the U.S. doesn’t have many options to keep prices down in those cases.

  • Unlike the other three countries examined in the study, the U.S. doesn’t regulate drug prices.

Details: This study focuses on a group of single-source brand-name drugs in Medicare Part D that have been on the market for at least 3 years. Researchers compared U.S. prices for those drugs to prices in the U.K., Japan and Ontario.

  • On average, after accounting for rebates, Medicare paid 3.6 times more than the U.K., 3.2 times more than Japan, and 4.1 times more than Ontario.
  • The longer a drug was on the U.S. market, the larger that gap grew.
  • If Medicare Part D had adopted the average price from those countries, it would have saved an estimated $72.9 billion on sole-source drugs in 2018 alone.

Between the lines: The Trump administration wants to rely on international prices for Medicare Part B, which covers drugs administered in a doctor’s office. But this study shows that there are also a lot of savings to be had in Medicare Part D, which covers drugs you pick up at a pharmacy.

The other side: “An international reference pricing system could result in American seniors losing access to their choice of medicine, and waiting years longer for new breakthrough treatments,” the trade group PhRMA said in a statement.

The bottom line: The political interest in cutting drug prices is real, but we’re still a very long way from President Trump’s stated goal of matching other countries’ prices.