Sep
25

A gubmint shutdown and you

Joni Mitchell’s Big Yellow Taxi provides today’s lede…and for good reason. The handful of elected House members on the verge of shutting down the entire government claim no one will notice when the Feds are furloughed.

Ha.

Here’s a very brief list…

  • Most inspections of hazardous waste sites and drinking water and chemical facilities would stop.

  • CMS will furlough non-essential workers, potentially delaying MSA processing

  • OSHA will shut down all but critical operations
  • FEMA has begun rationing its money, pausing about $1.5 billion in longer-term recovery projects to ensure it has enough cash on hand in the event of a major, deadly crisis

  • Workplace safety inspections would be reduced or, if the shutdown persists, potentially stop

  • New applications for Social Security will be delayed, affecting some claim settlement negotiations
  • In past shutdowns the E-Verify system (for employers to verify work status/eligibility) wasn’t operating, likely limiting new hiring
  • Major infrastructure projects would stop
  • The Community Health Center Fund (CHFC), which sends federal funding to health centers – could be halted, among others…patients would have to seek care elsewhere, further increasing the burden on hospitals.
  • Enrollment in clinical trials would be delayed or postponed
  • Grants for new clinical research would halt
  • Funding for Federal courts runs out October 13 (although some may be able to continue operating)
  • 10,000 kids would lose access to HeadStart  – and thousands of others would also lose daycare, impacting parents’ ability to work.

sources here, here, and here.

What does this mean for you?

After you’ve burned the place down, where will you live?


Aug
30

Medicare drug price negotiations – implications abound!

Medicare will negotiate drug prices, Big pharma’s really upset…AARP is really happy…what’s the REAL story?

Briefly…One of the key parts of the Inflation Reduction Act authorized Medicare to negotiate drug prices for 10 medications. Those 10 meds have been identified, and the howls of protest from big pharma are deafeningbut our profits!!!!!

chart credit arsTechnica

(Pharma is the most profitable sector in the economy with a gross profit margin double that of non-pharma companies)

Implications

for taxpayers, Congressional Budget Office (CBO) reports taxpayers will save $160 billion by reducing how much Medicare pays for drugs

for millions of Medicare recipients, drug prices and out of pocket expenses for those 10 drugs will drop by thousands of dollars…seniors currently pay up to $6,497 in out-of-pocket costs per year for these meds.

(due to the Inflation Reduction Act, starting in 2025 Medicare beneficiaries’ annual out of pocket drug costs will be capped at $2000)

for payers, the picture is pretty very complicated...netting it out, “these steps would lead to a higher MFP [maximum fair price] and less or no impact on the drug’s…commercial net prices [after rebates]…” [emphasis added]

lest you feel sorry for big pharma, you should know that the ten medications are “older drugs and drugs that have really been blockbusters in the Medicare program. So the companies that have made these products have really reaped handsome profits from those drugs for many years, before they’re even eligible for negotiation.” cite

oh, and about Pharma’s complaint that this will hamper innovation, experts disagree…overall changes to Medicare’s Part D drug program “will probably have a positive impact on drug innovation, especially in areas that address the unmet health needs of high-cost Medicare beneficiaries”


Jun
21

Quick hits….

Healthcare costs for the average family of four topped $31,000 in 2023.

That’s the latest from Milliman.

Think about that – what percentage of your annual income is $31,000?

a third?

a quarter?

a fifth?

to calculate your total costs, click here.

Climate change’s impact on worker health and workers’ comp is getting more attention every day.

It is now hitting the C-Suite…

This morning, Harvard Business Review called out increasing focus by business execs around wildfires:

we are seeing a rapid rise in employer inquiries related to employee health and the best practices around air quality concerns.

The piece has excellent recommendations.

Word to the wise – whether you are an insurer, TPA, risk manager or captive manager, regardless of your view on human-caused global warming, when the C-Suite comes calling you’d best have a plan. 

Even better, you’d best have implemented it.

good news…

339,000  – that’s May’s increase in employment. That is spot on the average monthly increase for the last 12 months…

over the last year over 4 million jobs have been created. 

That, dear reader, is just terrific.

More than 1.35 million Americans have been kicked off Medicaid to date…and that’s without totals from Texas and several other states yet to report.

This will:

Argh.

 


May
31

More hospitals are going to close

More than a quarter of rural hospitals in Texas, Kansas, Mississippi, Alabama, Georgia, South Carolina and Tennessee are at immediate risk of closing. 

Notably these are all states that have refused to expand Medicaid and therefore have a lot of people without health insurance.

The problem is exacerbated by the end of the Public Health Emergency which means more people without health insurance will be seeking care at hospitals at imminent risk of closing. 

Check out your state’s situation here

What does this mean for you?

If you live in the rural south, stay healthy, don’t have an accident, and don’t get pregnant.


May
2

Just the facts: Medicaid and work requirements

House GOP members are pushing to add work requirements for Medicaid recipients.  This makes sense, right? They are getting taxpayer-paid benefits, and should be:

  • working or
  • looking for work or
  • in school preparing for work.

Let’s see…

First, most Medicaid recipients are totally disabled (according to Social Security), are pregnant moms or moms and new babies or are poor older folks.

Among recipients that are none of the above,

  • 3 out of 5 are already working
  • 1 out of 5 are in school or are caregivers for family members

Of the remainder, at any one time more than half not working because they are sick or disabled.

Which leaves just 7 percent of which most are:

  • retired or
  • can’t find work (often because they have no transportation).

Are there freeloaders? of course…there will ALWAYS be cheaters, like my former neighbor who owned millions of dollars of real estate and bragged about how he had great free insurance from Medicaid. (Yes I turned him in).

source KFF

Oh, and the Supreme Court has weighed in...dismissing pending appeals in cases that had found work requirement approvals unlawful. This ruling essentially confirmed lower court rulings against work requirements.

What does this mean for you?

It’s really easy for we relatively well-off, college-educated, financially-stable professionals with good jobs, internet access, cell phones and employer-paid health insurance to complain about “freeloaders”…

who are/have none of the above.

 

 


Apr
18

Private Equity healthcare investment in 2022

Private Equity healthcare investment declined sharply last year as the average deal’s value and the number of transactions both fell off.

Firms invested over $45 billion in 167 US healthcare deals last year – a pretty massive decrease from 2021’s 216 deals for $107.5 billion.

While 2022 started off quite strong, deal volume halved in the second half of 2022 due to interest rate hikes, tighter credit, economic concerns and Putin’s War.

Those are the headlines from Bain & Company’s Global Healthcare Private Equity and M&A report 2023 (download for free here.)

note – I have worked with Bain entities in the past, respect the firm and the Bain people I’ve worked with. I am not currently working with Bain.

key highlights…

  • Provider sector deals accounted for about half of all transactions and dollars invested…but slowed dramatically to 7 transactions in Q4 2022
  • IPOs pretty much disappeared in 2022 (initial public offerings, when a private company goes public)
  • Value-based care and primary care were a big focus of strategic buyers…
    • Optum bought several provider groups
    • Amazon acquired One Medical
    • Humana and Welsh Carson did a joint venture, investing in a value-based primary care company.

There’s a lot on value-based care…although there’s precious little evidence that it is a panacea, investors are still betting billions …From the report:

For more than a decade, value-based care (VBC) has been positioned as healthcare’s “next big thing.” And while progress has been uneven 

The number of accountable care organizations (ACOs) plateaued at around 1,000 in recent years, while 15 of the 53 entities participating in CMS’s direct contracting program in 2021 experienced net savings losses. 

Value-based care stakeholders are doubling down on their commitment as healthcare spending outpaces GDP growth and CMS leans further into VBC models. 

What does this mean for you?

Expect PE investors to remain quite cautious until interest rates stabilize, the debt ceiling is raised (or much, much better – eliminated) and inflation trends level out.

Warning – if House Republicans don’t raise or eliminate the debt ceiling there will be hell to pay. 

Register for Bain’s webinar on the report here.


Mar
28

Medicaid, workers’ comp claim severity, and healthcare deserts

Medicaid is the second largest payer in the US, with spending approaching three-quarters of a trillion dollars this year.

In 2023, workers’ comp medical spend will be around $32 billion – just over 4% of Medicaid.

Medicaid is a major payer for many facilities in poor and rural areas, a financial lifeline that is thin indeed.

Ten states have yet to expand Medicaid, an ethically- and financially-unconscionable failure that has major repercussions for workers’ comp, poverty, child health and healthcare access (two – SD and NC – are in the expansion  process).

Access to care

Most rural areas in those 11 states were already hospital deserts; that will get a lot worse as over a third of rural hospitals are in those eleven states.

Average operating margins, razor thin before COVID, recovered somewhat during the pandemic but will turn negative as the pending Medicaid disenrollment takes effect.

More hospitals and their emergency and trauma units will close. Today in 40% of US counties most patients are more than an hour away from a trauma center…as more rural hospitals close even more trauma patients will be further away from hospitals.

What’s known as the “golden hour” is the first 60 minutes after an injury, when healthcare can save lives, limbs, and livelihoods.

What does this mean for you?

Claim severity will increase in those ten states. 

note – reminder, Saturday is April 1…beware.


Mar
24

Good stuff I missed this week…

For the first time in forever I missed WCRI’s annual confab…a Board meeting conflicted darn it.

Thanks to Stuart Colburn for his comprehensive reporting from Phoenix...I hereby give up my as-it-happens blog-casting role to the estimable Mr Colburn Esq. (subscription required)

WorkCompCentral’s Yvonne Guibert and Rafael Gonzales dropped a most informative podcast today. Dr Les Kertay is the guest, and his discussion of mental health is one you need to listen to while out walking, cleaning the house, doing laundry, driving kids around or gardening.

Excellent piece in Harvard Business Review about the role of robots in customer service. Yeah, I mostly hate them too, but more and more insurance interactions involve robots.  While HBR focuses on more “retail”-focused robots, there’s much in the article worthy of your consideration.

One takeaway…”Robot technology should not simply be added as a novelty, but carefully integrated to deliver value to customers and support employees — maintaining a balance between automation and human interaction…”

Here’s another you have to read…it’s about customer service in government. No, that’s not an oxymoron. And btw, anyone in healthcare or insurance shouldn’t be throwing stones at the dam’ gubmint’s customer service…

This has major impact – most dramatically on the less fortunate among us. Stuff that we wealthier folks take for granted – internet access, smart phones, reliable wifi, reliable transportation literacy…is usually NOT commonplace among poorer folks. Oh, and the research very, very much applies to insurers and health plans…

From HBR:

If you’re working on making communications more “efficient”, make VERY sure you always start and end with the “communications” piece – NOT “efficiency”.

Regular readers will recall  Medicaid is about to drop a LOT  – as in 5 to 14 million moms, babies, disabled folks, grandparents and families from its rolls, and many states are going to force those beneficiaries to use electronic communications to prove they qualify.

I’d like to think they are doing this out of ignorance, but my instinct – and research – indicates many state regulators and legislators are doing this purposefully – to deny health insurance to people who desperately need it.

More on this here.

What does this mean for you:

Meet people where they are. And be kind.

 


Nov
3

Republicans planning to force Medicare cuts

House Republicans are planning to impose massive cuts to Medicare, raise Medicare’s eligibility age, and withhold payments to early retirees and retirees earning more than a certain limit.

News sources indicate the GOP will use the upcoming debt limit to try and force Medicare cuts, a reprise of earlier efforts supported by 175 House Republicans to slash Medicare spending. The effort is also gaining traction among Senate Republicans, with Senator Lindsey Graham planning to use the Republicans’ leverage in Congress to cut Social Security and Medicare.

Sen. Rick Scott’s 11 point plan goes a lot further; it would end Social Security and Medicare if Congress doesn’t take specific action to renew those programs every few years (see Scott responding to Fox News question at 1:09 of the video here.)

You may well recall that Scott was sued for Medicare fraud back when he ran Columbia/HCA. Columbia/HCA was ordered to pay the Feds $1.7 billion in fines and penalties.

What does this mean for you?

If you and/or your parents are on Medicare, this means a lot. 

 


Sep
26

Watch out for gabapentin…

The CDC recently reported gabapentin was involved in one out of every ten fatal overdose deaths in reporting states.

Similar to opioids, gabapentin can cause severe breathing difficulties  – which are exacerbated when the drug is combined with other central nervous system depressants (CNS) (e.g. opioids, antidepressants, antianxiety meds).

Illicit use of gabapentin appears to be on the rise…from JAMA:

Gabapentin can produce feelings of euphoria and intoxication and can potentiate opioids’ effects. Individuals who misused the drug reported multiple reasons in a 2019 study, including a desire to enhance the effects of opioids; to achieve a “high” when preferred substances were unavailable, such as when they were living in a treatment facility or were incarcerated; or to self-treat withdrawal or pain. [emphasis added]

Gabapentin is a non-scheduled drug which became much more widely prescribed as opioid scripts declined.  Back in 2018 one out of five chronic pain patients were prescribed gabapentin (or its cousin, pregabalin). There’s some evidence that misuse of gabapentin – which is almost always prescribed off-label – often occurs after the consumer had a prescription for the drug.

And, Parke-Davis, manufacturer of Neurontin – the brand name version of gabapentin – pleaded guilty to promoting off-label use and paid a $430 million fine.

So, what to do?

First – learn more.  Start here – myMatrixx’ Shanea McKinney, PharmD penned an excellent overview way back in 2019.

Then…

  • Dig into your data – what’s been happening with gabapentin?
  • When and where possible, require prior authorization for gabapentin and similar drugs.
  • Educate patients and caregivers about potential risks of the drug.
  • Pay special attention to patients prescribed gabapentin off-label and in combination of other CNS depressants.
  • Consider recommending urine drug testing for gabapentin patients and include it in  the drug test panel.

What does this mean for you?

This looks awfully familiar.