Last week, three events effectively set the stage for what everyone in healthcare should expect for the rest of the year:
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Tuesday, President Trump delivered a 78-minute State of the Union Address to Congress in which healthcare figured prominently. In 13 references, he asserted that his price transparency executive order “will save families massive amounts of money for substantially better care”. He promised to protect Medicare and Social Security, end surprise medical bills, lower drug prices, protect consumers against loss of coverage due to pre-existing conditions and create insurance plans that are “60% less expensive and better.” And he assailed Members of Congress who favor Medicare for All labeling it “socialized medicine”. Notably, no mention of Obamacare or the Affordable Care Act which he promised to end on his first day in office.
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Wednesday, the U.S. Senate voted to acquit the President of the charges of impeachment brought by the House of Representatives. Notwithstanding additional hearings by the House Judiciary Committee, the matter of the President’s alleged wrongdoing will now be tried in November 7 election.
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Thursday, the Democrats running to replace the President debated in New Hampshire—their first since the impeachment proceedings ended. Healthcare was the primary issue separating candidate posturing: Two (Biden, Klobuchar) said improvements to the Affordable Care Act is the best path forward; one (Buttegieg) thinks “Medicare for All who Want it” is the right path, 3 (Sanders, Warren, Steyer) want Medicare for All and Yang promoted “human capitalism” steering away from national healthcare per se.
MY TAKE
With impeachment off the table and partisan vitriol that’s palpable, little of substance in healthcare will be accomplished in DC for the balance of 2020. But the politics of healthcare will be in the spotlight.
From a regulatory perspective, here’s what to expect:
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The CMS’ rule on interoperability will roll-out against pushback in some circles.
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Watered-down versions of drug pricing and surprise medical bills will pass so Congress can claim credit for law-making.
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Scrutiny of hospital consolidation will intensify as regulators assess their role in cost increases.
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CMS will shore up its Section 1115 Medicaid waiver provisions to allow states more latitude in managing the population via block grants (aka “Healthy Adult Opportunity”)
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In Blue states, legislation restricting drug prices (i.e. Maryland, California) and expanded coverage through a public option (i.e. Colorado, Washington).
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The FDA will accelerate its approval process for biosimilars and advance guidance around smart devices that capture and transmit personal health information.
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CMS will modify its value-based models to require participating providers to share greater financial risks in the Medicare program and grant more flexibility for Medicare Advantage plans.
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And funding for safety net and public health programs will remain stagnant as the FY21 budget is developed.
In other words, no major changes on the regulatory front that’s aren’t already on the radar. For most industry insiders, political brinksmanship like the mode of operation in DC is good news: dysfunction protects them. But it also invites disruption by outsiders like private equity funds, technology and retail health juggernauts who can exploit their vulnerabilities.
For the balance of 2020, healthcare will be in the spotlight. Healthcare affordability, profitability and executive compensation will be popular targets for critics of the current system, and talking points featuring “socialized medicine” and “government run healthcare” will be used to stoke resistance to their ideas.
That’s the lay of the land for the balance of 2020. Game on.
Paul
INDUSTRY NEWS
Humana doubles down on its primary care strategy, focus on senior care
Humana, the nation’s second largest Medicare Advantage (MA) insurer, is partnering with a private equity heavyweight Welsh, Carson, Anderson & Stowe to expand its senior-focused subsidiary medical group, Partners in Primary Care. The new venture is expected to double the number of centers that Humana’s operates—currently 47 throughout Texas, Kansas, Missouri, Florida and the Carolinas. Through MA allowance for supplemental benefits, seniors could receive dental, vision and hearing care currently accessible in traditional Medicare with high out of pocket costs troublesome to most seniors.
“Humana’s Partners in Primary Care and Welsh, Carson, Anderson & Stowe Form Joint Venture to Expand the Nation’s System of Value-Based Primary Care Centers Focused on Serving Medicare Patients” Humana February 3, 2020 https://humana.gcs-web.com/news-releases/news-release-details/humanas-partners-primary-care-and-welsh-carson-anderson-stowe
Update: Price Transparency Order generates 23,355 comments
The administration received 23,355 public comments about its Price Transparency in Healthcare Executive Order issued November 15, 2020. The public comment period ended January 29, 2020.
“Trump Administration Announces Historic Price Transparency Requirements to Increase Competition and Lower Healthcare Costs for All Americans” Nov 15, 2019 www.cms.gov
Coronavirus rattles China, US supply chain disruption likely
In late 2019, a new coronavirus emerged in central China, and since that time has spread across that country and many other countries around the globe. On January 30, 2020, the World Health Organization (WHO) declared the virus represents a public health emergency of international concern, and on January 31, 2020, the U.S. Department of Health and Human Services declared it to be a health emergency for the United States. There are more than 40,632 confirmed cases and 910 confirmed deaths as of this morning.
Coronavirus Cases by Country, February 10, 2020 https://www.worldometers.info/coronavirus/
CMS’ Medicaid Block Grant program update
On January 30, CMS released guidance about its Medicaid block grant program with a new name: The Healthy Adult Opportunity (HAO) program. At its core, the HAO effort allows states to experiment in their Medicaid program while assuming financial risks for coverage. It’s been a staple on the Republican wish list since Ronald Reagan’s proposal in 1981. It applies primarily to individuals covered in the Affordable Care Act (ACA) Medicaid Expansion who are ages 19-64 and ineligible for Medicaid based on disability or need for long-term services and supports.
“Trump Administration Announces Transformative Medicaid Healthy Adult Opportunity” CMS, Jan 30, 2020 https://www.cms.gov/newsroom/press-releases/trump-administration-announces-transformative-medicaid-healthy-adult-opportunity
STUDIES/REPORTS FROM LAST WEEK
NYU Analysis: Health system investments in social determinant programs significant in NFP health systems and teaching hospitals, not apparent in investor-owned hospitals
The NYU research team searched for all public announcements of new programs involving direct financial investments in social determinants of health by US health systems from January 1, 2017, to November 30, 2019. They identified 78 unique programs involving 57 health systems that collectively manage/own 917 hospitals: 41 of the 57 were secular non-profit, 14 were sectarian/religious systems (primarily Catholic), and 2 were public health systems. None were investor owned.
The programs involved at least $2.5 billion of health system funds, of which $1.6 billion in 52 programs was specifically committed to housing-focused interventions. Additional focus areas were employment (28 programs, $1.1 billion), education (14 programs, $476.4 million), food security (25 programs, $294.2 million), social and community context (13 programs, $253.1 million), and transportation (6 programs, $32 million).
Investing systems were significantly more likely to include at least one major teaching hospital (86% versus 32%), participate in an ACO (86% versus 52%), and participate in the BPCI Initiative or the CJR model (65% versus 44%).
Horwitz et al “Quantifying Health Systems’ Investment in Social Determinants of Health, By Sector, 2017–19” Health Affairs February 2020
https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2019.01246
Study: Nurse Practitioner workforce doubles, impacts nursing shortage
The Montana State University research team found that the number of nurse practitioners rose to 190,000 from 91,000 from 2010 to 2017.They suggest that the record number of nurse practitioners has reduced the size of the registered nurse workforce by 80,000, putting pressure on hospitals and policymakers to come up with ways to fill the RN void.
Auerbach et al “Implications of the rapid Growth of the Nurse Practitioner Workforce” Health Affairs February 2020 https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.00686
Analysis: Next Gen ACO’s Medicare savings disappointing
The Next Gen ACO five-year demonstration program will expire at the end of 2020. A CMS analysis of savings from 2016-2017, the first two years of the program, found that the Next Gen “payment model didn’t lead to “a statistically significant difference in spending,” The National Association of ACOs disputes CMS analysis suggesting savings would be higher if compared to Medicare fee-for-service spending and additional study is needed. Some speculate Next Gen might be replaced by a new payment model, Direct Contracting, which starts in 2021 which involves greater financial risk sharing for participating providers. Applications for participation are due February 25.
“Next Generation Accountable Care Organization Model Evaluation” CMS January 2020 https://innovation.cms.gov/Files/reports/nextgenaco-secondevalrpt.pdf
Fewer Americans seeing Primary Care Providers
Almost half of U.S. adults with private health insurance are not visiting primary care providers for routine care or sick visits. Between 2008 and 2016, the number of annual primary care visits for every 100 people with private health insurance declined by 22%, from 169.5 to 134.3. Over that same period, the proportion of adults who didn’t see primary care providers at all rose from 38% to 46% but visits to alternative site facilities like retail/urgent care clinics increased by 46.9%.
Ganguli et al “Declining Use of Primary Care Among Commercially Insured Adults in the United States, 2008–2016” Annals of Internal Medicine February 4, 2020 https://annals.org/aim/article-abstract/2760487/declining-use-primary-care-among-commercially-insured-adults-united-states
Opinions about Medicaid vary by Party Affiliation
35% of the public approve of the Administration’s handling of Medicaid vs. 51% who disapprove. But approval among Republicans is 72% contrasted to 11% for Democrats and 28% for Independents.
Kaiser Family Foundation poll January 16-22, 2020 www.kff.org
