May
7

Research Round-up – the Hospital Edition

Lots of good stuff…

Those darn facility costs…

WCRI’s latest survey of outpatient hospital costs, reimbursement, and all manner of related matters is just off the presses. There’s data about specific states’ costs, network penetration, facility cost trends, surgical costs in WC compared to Medicare, and pretty much anything you need to know.

One surprising data point – network penetration (for outpatient hospital surgeries) has declined in several states over the past 15 years…

HealthAffairs’ latest edition reports on a study showing health system consolidation increases Medicare’s costs.  I’m quite sure your costs increase as well. As health system consolidation continues, so will cost increases.

Another study analyzes the impact of private equity investments in healthcare facilities…

And here’s a state-by-state list of 1-star hospitals – and another for the 5-star ones.

What does this mean for you?

With facilities the fastest growing component of healthcare costs, these resources are valuable indeed.


Apr
23

Friday catch-up

Good to be back in the habit of regular posting…lots going on deserving of your attention.

Drugs

From myMatrixx, a very useful post from Phil Walls, everyone’s favorite pharmacist. Phil highlights three drugs in the pipeline that may well find a place in work comp.

Nalmefene was developed as the naloxone for fentanyl. While naloxone has saved countless people on the verge of dying from opioid overdose, a single dose isn’t strong enough to save someone on fentanyl. Read Phil’s post for details.

Two other meds – Molnupiravir and Ofev may help patients battling COVID. The former is an anti-viral, easily administered and offering the potential to reduce the length of infection.  Ofev is more narrowly focused on combating a very serious lung disorder associated with COVID.

Opioids

As if Florida, Mississippi, and other states needed yet another reason to expand Medicaid...individuals with Opioid Use Disorder referred by criminal justice agencies were more likely to receive  medications for OUD in states that expanded Medicaid compared with those in states that did not.

Considering overdose deaths dramatically increased after the pandemic started, legislators in non-expansion states need to get off their collective butts and do the right thing. Stop with the bullshit arguments and do something that actually helps people.

And the Biden Administration should do the same – fast track authorization for medical providers to prescribe buprenorphine. We’ve been waiting over three months, Mr President…

Hospital profits

Hospital and facility owner HCA reported profits more than doubled in the first quarter of 2021 over 2020. The really scary part is

“Same facility revenue per equivalent admission increased 16.6 percent in the first quarter of 2021, compared to the first quarter of 2020, due to increases in acuity of patients treated and favorable payer mix.”

In English – employers and taxpayers’ facility costs shot up. Here’s looking at you, workers’ comp…

Workers comp

Despite the rampant profiteering off workers’ comp by HCA and others, workers’ comp remains a very profitable line of business. That’s mostly because rates are still too high, frequency continues to decline, and medical trend remains flat.

National Underwriter reported WC was the fourth most profitable P&C line in 2019, at with a “relative net worth” of 12.2%. I’m not entirely sure what “relative net worth” is…perhaps the best way to compare margins across not-for-profit, mutual, and stock companies?

Anyone?

Finally – be Skeptical!

Did 4% of Americans gargle with bleach last year?

You may have read the news reports on a “study” that found a bunch of us were gargling with bleach. Bunch of morons…typical (insert demographic group here),

But, the answer is likely no.  In fact, the “study” had fatal flaws, flaws which came to the surface when a well-designed study followed up.

Takeaway – beware of clickbait, ESPECIALLY when it supports your own opinions and biases. Here’s looking…in the mirror.

Lastly, a request.

Smile at someone you don’t know today. Things are getting better by the day, and you can spread the joy.


Dec
6

AARP, healthcare costs and drug prices

AARP has rather strange positions on drug prices and healthcare costs.

AARP positions itself as an advocate for seniors (and no, while I’m eligible, I’m not a member). The latest PR effort by the huge organization touts its lobbying to “help Americans afford high healthcare costs.”

Rather than lobbying for extensions on tax breaks for healthcare costs, AARP would serve its members better by doing something to actually reduce the cost of healthcare. Here are a few suggestions:

  • vigorously promote value-based care with reimbursement more closely tied to valid outcomes including functional ability
  • aggressively regulate healthcare system expansion, and specifically require reductions in costs after mergers
  • promote higher reimbursement for primary care, reduced reimbursement for questionable specialty care
  • focus attention on transparency in drug pricing – including rebate payments to plan sponsors

On this last suggestion, I’d note that AARP consistently moans about the retail price of drugs, while refusing to acknowledge the very real impact of rebates on brand drugs – which aren’t passed on to consumers.

Frankly, AARP’s stance on drug prices is misleading.

AARP’s “research” doesn’t discuss rebates – and the fact that plan sponsors are getting rebates, which drastically reduces the prices those sponsors pay for drugs.

As a result, consumers pay the higher retail prices, while plan sponsors – AARP partners among them – keep the rebates.

(thanks to Adam J Fein, PhD, for his work on this.)

I emailed AARP, indicating my concern with this.  This was the response:

“While AARP appreciates the potentially distorting effects of rebates, evidence indicates that plan sponsors are sharing rebates with consumers in the form of lower premiums. For example, a recent CBO analysis of a proposal to eliminate rebates under Medicare Part D that found that premiums would increase for all enrollees and that federal spending would increase by nearly $200 billion, primarily due to increases in federal subsidies for premiums.

“Further, AARP has consistently said that it would be happy to run these analyses based on net prices. Unfortunately, no drug manufacturers have been willing to take them up on the idea.”

Well, no.

First, there’s a megaton of evidence out there that some individual/group health and Medicare Part D insurers are getting rebates, and are NOT passing them on to consumers.

This from the estimable Dr Fein; (note the rebate percentage accruing to Plan D (senior drug card) sponsors):

Second, AARP could easily ask its “partners” (Part D plan sponsors among them) if they are getting rebates (which they are), and if so are they passing the savings along to consumers and what is the impact on those consumers’ drug costs. That would allow AARP to ” run these analyses based on net prices.”

AARP positions itself as an advocate for seniors. I’d suggest failing to address this is not helpful to their members.

What does this mean for you?

Does AARP benefit from rebate payments? I dunno…

 


Nov
19

In which I read current research and summarize key takeaways so you don’t have to…

Stress over healthcare costs doesn’t go away when you are on Medicare

HealthAffairs reports that more than half of Medicare recipients with a serious illness reported “serious financial distress” due to medical bills. Drugs are the most common cause, followed by facility bills.

This is important because:

Medicare for All is NOT a panacea; politicians advocating for MFA should understand Medicare needs major improvements before it is “ready for prime time.”

Oh, and a third of all credit card holders are in debt due to medical bills.

Immigration and healthcare

If you or a parent have a healthcare aide, listen up. The bruising battle over immigration and the “Dreamers’ will affect healthcare – particularly for older Americans who rely on home health aides and other lower-level clinical support.

27,000 Dreamers work in healthcare and healthcare support, many providing individual care. The Trump Administration is trying to end this program and force Dreamers to leave the U.S.

The shortage of home health workers is particularly acute in older states such as Maine and the upper midwest. With immigrants filling one of every three home health positions, ending DACA and further restricting immigration would leave thousands of older Americans without care. 

What does this mean for you?

When a politician says something is simple, or their claims just seem to make sense, your alarm bells need to ring.

Medicare will need huge and expensive changes to work for all of us. 

If you don’t want immigrants in the US, then you get to care for your parents without any help.


Oct
19

Research (and other important stuff) Roundup

It’s that time again – WCRI has released it’s latest series of CompScope reports, the most detailed and thorough review of all things work comp medical in 18 key states. If you are an investment analyst, industry tracker, or involved in planning for a TPA, state fund, insurer or large employer, get yourself over to WCRI and get those reports!

If you want to understand what Medicare for All really is, how it might work, and what it means to you, read KFF’s summary review. There are 8 (!) proposals now making the rounds, and I’m betting your healthcare will come from some version of universal coverage within the decade.

Excellent piece by Roberto Ceniceros on premium fraud and its impact on employers and insurers. I’ve got to give credit once more to Matt Capece of the United Brotherhood of Carpenters – he’s been a major force exposing premium and payroll fraud all across the country. For his efforts, IAIABC gave Matt its Samuel Gompers Award. And kudos to Roberto for his in-depth reporting on a critical issue.

NCCI continues to up its game, making research accessible and relevant. Medical marijuana, opioid legislation, air ambulance regs – it’s all here.

Our penultimate piece is a bit more intel on rideshare and rural America – well worth a read if you’re involved in this narrow-but-deep slice of the work comp services world.

Finally, as it’s election season we need to hold those political candidates accountable: Andrew Sprung’s dissection of candidate Bob Hugin’s dissembling on the dismantling of the ACA is just what voters should be asking.

And, from the “coolest/dumbest thing I’ve seen all week” is this. Wondering if this is the answer to speedy ridesharing on the Russian steppes. Who wouldn’t want a jet engine in their Uber?

Hat tip to the Drive!

 


Oct
8

Are claims that “Medicare for All” will hurt Medicare accurate?

CMS Administrator Seema Verma said last week that “Medicare for All would become Medicare for None.”

Verna said – and I quote:

A) “By choosing a socialized system, you are giving the government complete control over the decisions pertaining to your care, or whether you receive care at all.”

Uh, Medicare’s recipients are pretty damn happy with Medicare’s “government run healthcare” today – much happier than those of us insured thru employers

Verna fails to explain how MFA is fundamentally different from Medicare as it exists today – and therefore would somehow become this “government-controlled healthcare” monster.

Her claim appears to be based on unfounded assumptions, namely MFA would be fundamentally and in some ways diametrically different from Medicare. Yet she provides no credible rationale for this assertion, instead using code words such as “socialized medicine” to grossly mis-characterize the proposals for MFA (note I’m not advocating for MFA, as I’ve said before, however I do believe something like it is in our future because the current system is unsustainable)

In fact, the MFA proposals consistently support keeping the core of Medicare the same, just expanding it to include the rest of us.

B) “Rather than straining Medicare, we are working to strengthen Medicare.”

I call Bullshit.

Recall that her boss, President Trump, and the Republicans in Congress proposed a budget that would cut $537 BILLION from Medicare over the next decade. I’m hard-pressed to figure out how cutting over a half-trillion dollars from Medicare will “strengthen” it.

Finally, she says C) “Let’s learn from the mistakes made in Medicaid when the Affordable Act pushed millions of able-bodied Americans into a program designed for pregnant women, children, aged and those with disabilities, only to then incentivize states to serve the able-bodied before protecting Americas most in need.

The ACA did not “push” millions of able-bodied Americans” anywhere. The reality is those “able-bodied Americans” could not afford or get health insurance – it was too expensive, wouldn’t cover their pre-existing conditions, or just wasn’t offered, period. The “free market” failed them – and Verna et al have yet to offer any plans that would help millions of working-classAmericans get affordable health insurance

It also didn’t favor those new Medicaid members over current ones – that’s just not true and is a blatant mis-characterization of the law.

What does this mean for you?

I’ve been waiting for the current Administration’s national strategy/plan to fix healthcare. If this is symbolic of their thinking, we’re going to get MFA sooner than I thought.


Sep
10

Hypocrisy hits new heights.

The same folks who want to cut $537 billion from Medicare are now claiming only they can “protect” Medicare.

Out on the campaign trail, President Trump and Gov Rick Scott (R FL) are claiming “Medicare for All” would somehow harm Medicare, and seniors need to vote for them to preserve Medicare as it is.

In an obvious attempt to scare seniors, Trump et al are asserting that expanding Medicare – the most-liked health coverage in the nation – will somehow result in seniors losing Medicare benefits. They support this assertion with no logic, no coherent argument, no evidence or data, yet there it is.

This from the same folks who, just a couple months ago, wanted to cut seniors’ Medicare benefits. What’s changed?

Elections are coming, that’s what’s changed.

According to Forbes, the GOP is looking for:

$900 million in cuts to rein in Medicare prescription abuses. Another $5 billion is cuts are specified to address high drug prices, while $286 billion in funding will be pared to reduce excessive hospital payments.

Now, there’s an argument to be made that Medicare is not financially sustainable – especially given the huge tax cuts passed by the GOP.  And yes, we need to figure out how we can keep Medicare viable given the drop in federal tax revenue due to the tax cut.

But to turn around and claim that expanding Medicare for All is somehow damaging to a program you’d like to cut by a half-trillion dollars is, well, the height of hypocrisy.

What does this mean for you?

Medicare for All isn’t a threat to Medicare. 


Sep
5

Making “Medicaid for All” work

The US healthcare “system” is headed towards a cliff, and when it hits the edge, Medicaid may well be the replacement.

Briefly:

  • Managed Medicaid plans would be offered in every state
  • people would sign up for the plan they want, with the option of enrolling in regular fee for service Medicaid
  • funding would be from payroll taxes, individual service-based fees, and federal funds
  • provider reimbursement would be pegged to Medicare for ALL payers, eliminating payer-shopping by providers and increasing Medicaid FFS reimbursement

The details…

There are two ways this would work – Medicaid for All (MFA) becomes the way all of us get coverage, or Medicare remains in place for elderly folks and Medicaid covers everyone else.

It’s entirely possible employers continue providing basic healthcare coverage, but really, do they want to? It’s expensive and a pain in the neck. Instead, employers will be able to offer supplemental insurance (similar to what happens in Canada, the UK, and other countries) as an employment benefit.

Today, Medicaid comes in two general flavors – “classic” and Managed Medicaid.

Classic is fee-for-service Medicaid, where members can go to any provider that accepts Medicaid. Providers are paid on a fee for service basis, at rates that vary greatly between states (states set reimbursement).

Managed Medicaid is an option in almost every state. The states contract with healthplans to provide integrated Medicare and Medicaid in what are called “dual eligible” programs (members are eligible for both Medicare and Medicaid).

The Managed Medicaid (MM) plans are paid on a capitated basis – that is, a flat fee per member. That fee is based on the health status and health risks of the members; the sicker the member is, the higher the capitation amount.

This arrangement incentivizes MM plans to figure out the optimal ways to keep members healthy and keep costs down – keep them out of the ER, avoid inpatient hospital stays, and encourage healthy behaviors. If costs come in under budget, the plans make money (usually a couple percent at most). If not, the plan loses money – not the taxpayer. (MFA will be based on Managed Medicaid)

(a detailed explanation is here.)

Today, states with these plans in place enroll members in different ways. Some randomly assign members to plans, others allow more assertive competition among the plans for members. I’d expect this to continue under Medicaid for All; existing enrollment processes would be expanded, systems upgraded, and communications refined to address the broader market. Every fall, MM plans would compete for members, enrolling them before the end of the calendar year.

Individual contributions to premiums would be income-based (as under ACA today); there could be low copays for certain services but paperwork for members would be almost non-existent. (All Medicaid members today have ID cards that enable electronic record sharing, billing, and claims submission.)

Funding would be a combination of service-based fees (copays and co-insurance), payroll taxes, federal funds, and perhaps general state funds.

Remember, as employers would no longer have to deliver health insurance, those dollars could be spent on higher wages, to offset payroll taxes, or for other purposes. Similarly, individual payments for premiums, high deductibles and the like would be eliminated, altho some of those “savings” would go to higher payroll taxes to cover Medicaid for All.

Provider reimbursement would be up to the MM plans negotiating with providers – who would remain independent (unless they are employed in a health system that is also a MM plan provider). However, FFS Medicaid reimbursement would be increased to mirror Medicare’s rates.

Why this is the future

US healthcare is not sustainable. Period.

Family health insurance premiums are nearing $20,000, the number one cause for bankruptcy is medical debt, Medicare and Medicaid are the largest chunks of the federal budget, and industrial competitiveness is hampered by healthcare costs which are double the average costs in other countries.

And, 74% of Americans are worried about losing their insurance.

So, we can either keep driving off the cliff, or take an alternate route. One that will be very rocky, cause a lot of headaches and heartache, disrupt businesses and families and providers, but one that sooner or later, we’ll have to choose.

What does this mean for you?

It’s not a matter of if, but when.

Note – happy to engage in fact-based, citation-supported conversation. “I heard this” and “everyone knows” arguments are not helpful.

 


Sep
4

The case for Medicaid for All

When Single Payer becomes the law of the land, Medicaid will be the foundation.

We’ve looked at the current push for Medicare for All, the factors that I believe will drive us to some form of single payer, and posted a primer on Medicaid.

Here’s why it’s going to be Medicaid for All.

  1. Medicaid for All will spread the cost of universal coverage across states, reducing federal financing requirements.
    Medicaid is a state AND federal program; States provide a lot of the funding for Medicaid; on average the Feds contribute 63% and states 37%. This is critical, as Congress will want to spread the cost of a Single Payer solution and there’s no better way to do this than require states to pony up big dollars [State contributions vary based on a state’s average personal income relative to the national average; states with lower average personal incomes get more federal dollars.]
  2. Medicaid is already built to cover everyone.
    Medicare covers people of all ages, Medicare is very much elder-care focused.
    Adapting Medicare to handle everyone from newborns to elderly, maternity care to pediatrics will be difficult, time-consuming, and expensive. Medicaid does all this and more – today.
  3. Generally, Medicaid is less expensive than other “systems”.
    This is due to much lower provider payment and significantly lower administrative costs. Yes, this means providers are going to be paid less.
  4. Medicaid member satisfaction is pretty good; access to care is not much of an issue.
  5. Medicaid-based Exchange programs are much more successful in the Exchanges than commercially-based plans.
    The Centenes et al [Medicaid-based plans] understand the demographics of the uninsured, have lower medical costs, and already have provider networks, customer relations operations, workflows and processes set up and operational. At the end of the day, lower cost wins – and their costs are lower.
  6. Medicaid is a simple, fully-integrated healthplan.
    Medicare’s alphabet-soup of Parts A B C and D is confusing and convoluted, with different payers often covering the same individual. This increases administrative costs, member hassles, and decreases quality of care (co-ordinating pharmacy and medical care between different payers is problematic at best.
  7. Managed Medicaid plans are working.
    These plans currently exist in most states, and many have been able to deliver excellent care at lower costs through innovation and very tight focus on outcomes. One example is using paramedics to deliver care. [disclosure – I sit on the board of Commonwealth Care Alliance, a Massachusetts healthplan that serves dual-eligible members]

Tomorrow I speculate on how Medicaid for All will integrate with Medicare and employer-based coverage.

What does this mean for you?

Better care, lower costs, while a big impact on pharma, device companies, healthcare systems, and healthcare providers.


Aug
30

Medicare for All – explaining what it means and what it would cost

Yesterday we gave a brief overview of Medicare – the various parts and pieces.

Today – what exactly is the plan, who would pay for it, and how much would it cost?

Sen. Bernie Sanders, (I VT) is the original MFA (Medicare for All) advocate, and most other candidates echo his plan – which is pretty simple:

  • Everyone is enrolled in MFA
  • No one pays copays or deductibles
  • You can choose any healthcare provider
  • It isn’t really “Medicare” for all, but rather a simple “everything is covered” plan
  • Funding would come from:
    • higher taxes on high-income earners
    • re-instatement of the estate tax
    • payroll tax of 6.2% for employers
    • 2.2% income based premium for individuals and families
    • taxing capital gains as ordinary income
    • repealing tax exemption for premiums etc.

There’s been a lot of press about this, with claims and counterclaims muddying the waters  – but the net is this:

Sanders’ plan would enroll pretty much everyone.

The plan would save costs by:

  • reducing total provider compensation by 11% – 13% (physicians make a lot more money here than they do in most other countries)
  • it would do this by setting flat reimbursement rates – today employer plans pay about 40% more than Medicare, and much more than Medicaid (generally speaking).
  • However, reimbursement would be higher than today’s Medicaid rates.
  • MFA advocates note that administrative costs would be a LOT lower, as doctors and hospitals wouldn’t need the big IT operations and personnel required to track down payers and get reimbursed

MFA would be phased in over four years.

What would it cost?

That’s a tough one – the CBO won’t score it.

One Koch-funded research center came out with a report that said it would A) cost $32 trillion over ten years, and B) reduce total US healthcare costs by some $2 trillion while covering 30 million more folks. (yes, this was Mercatus’ higher estimate, but they fudged other numbers to make costs look higher, so I’m going with that figure)

Bernie and other advocates, claim savings would be higher – so the total cost would be lower.

However you slice it, you have to remember that employers and individuals would no longer be paying over a trillion dollars for healthcare every year via payroll taxes and premiums and deductibles and copays.

And yes, you’d save a lot of money by reducing provider reimbursement to Medicare rates.

Who and what gets disrupted?

Insurance companies. It isn’t clear who would administer this program, perhaps the current companies that handle much of Medicare. However, many or most commercial health plans, Medicare Advantage plans, Managed Medicaid plans (disclosure I am on the Board of one – Commonwealth Care Alliance) would shrink or disappear entirely.

Revenue Cycle Management – this huge industry would become obsolete overnight.

Millions of workers – no longer needed to handle the morass of regulations and insurer requirements

Pharma – Bernie would negotiate with pharma and medical device companies – as every other country does – to get the lowest possible prices.

Brokers and consultants. Ouch.

Remember – the US healthcare system is enormously inefficient, overall delivers mediocre-at-best results, and is not sustainable.

What does this mean for you?

Opponents of MFA would be well served to come up with a better answer than MFA, because that MFA is getting traction.