As Democrats gather in Chicago and Epic users convene in Verona WI this week, the future of the healthcare system will be on the agenda for both gatherings, but with a different focus:
Democrats will take a victory lap for announcing last week’s drug pricing discount deal with 10 manufacturers as a result of their Inflation Reduction Act. They will promise additional savings on medications for “hard working Americans” despite uncertainty about exactly what Medicare enrollees will actually save in the deal or whether it can be extended beyond Medicare. They will promise to protect the Affordable Care Act and make its insurance subsidies permanent and insinuate price controls are needed for drugs, devices, insurance premiums and hospital bills. And they will rail against corporatization and consolidation across the industry characterizing its priorities as pro-profit, anti-consumer. In Chicago, the healthcare industry will be maligned for price gouging, lack of transparency, greed, unequal access and unequal pay—not a flattering depiction. It’s a view of a health system that’s vacated its purpose to pursue profit.
Epic will take a victory lap for its growth having increased its market share to 39% of acute-care hospitals and 52% of acute-care beds while competitors fell behind. It’s take on the health system will be far different than the Chicago gathering 153 miles to the East. Celebrating its modest roots in a basement in 1979 is core to Epic’s view of the system. “Epic develops software to help people get well, help people stay well, and help future generations be healthier.” In pursuit of this aim, it has become a multi-billion private company that’s proud of its accomplishments, fiercely independent and, to some, “too big to fail”. Epic’s view is a health system that’s mission critical to the stability of the U.S. economy and economies of the world. It pursues the hospitals, medical groups and insurers who recognize that transformational change in healthcare is dependent on information technologies appropriately designed to enable efficient and effective decisions. Theirs is a view of a system that’s paralyzed by inaction and threatened by over-regulation.
In Chicago and Verona, opportunities to improve the U.S. system are readily acknowledged. Which flaws deserve attention first, how and how fast reflect contrasting views. But perhaps as never before, the direction of the system is impacted by two convergent realities:
- Unprecedented polarization between haves and have-nots in society. The chasms between lower and higher income populations, younger and older adults, and self-described liberals, conservatives and independents are deepening. Consumer sentiment is at a 5-year low. and prices for everyday necessities at a 5 year high.
- Unparalleled ambivalence in public opinion about the health system. Simply put, half think the system is out of control and in need of more government regulation and half think that would doom the system permanently. Trust and confidence in the system is at an all-time low and the majority want something else.
Together, these pose an unprecedented challenge to healthcare in a critical moment: consumers think the system deck is stacked against them and Congress agrees. Its reached a tipping point.
My take:
The “system” to which attendees in Chicago and Verona refer is a misnomer. More accurately, it’s a collection of sectors that operate independently. Data about its performance– value, quality, safety, outcomes, costs—vary widely and insiders determine which matter most. Vertical integration, consolidation, corporatization and consumerization are responses from outsiders who are fed up, especially consumers, employers and Congress.
Tomorrow, it is likely to be dramatically different. Its costs are not sustainable. Its performance is indefensible. Its importance to communities, families and society is irrefutable.
Regrettably, as the Campaigns for the White House, Senate, Congress, state legislatures, Governors and Attorney’s General march toward November 5, few will go near systemness because it involves political risk. That means outsiders—citizen leaders, employers and elected statemen/stateswomen— will shoulder the burden of health system transformation to create a system of health that’s accountable, affordable, efficient and effective.
As congregants assemble in Chicago and Verona this week, outsiders hope they’ll look beyond incrementalism and pursue transformational change. They’re tired of waiting. It’s reached its tipping point.
Paul
PS: The urgency to consider system transformation seriously is reflected in the citations below—consumer sentiment, media coverage about bad actors, employer litigation against insurers, price variability and transparency and more. It’s a new day in U.S. healthcare: the old playbook is not working. As I prepare this post weekly, I am constantly reminded that rank and file workers in healthcare—including its physicians, nurses, technicians, administrators et al—are caught in the vortex of the trends and issues I discuss. In many cases, they feel victimized. Modernizing the healthcare workforce that’s adaptive to its new structures, incentives, technologies, roles and demands is the imperative that must accompany system transformation. Thanks for reading.
Sections in today’s Report
- Quotables
- Consumers
- Economy
- Employers
- Hospitals
- Insurers
- Physicians
- Polling
- Prescription Drugs
- Public Health
Quotables
Re: Steward investigation by WSJ: “Steward Health Care System was in such dire straits before its bankruptcy that its hospital administrators scrounged each week to find cash and supplies to keep their facilities running.
While it was losing hundreds of millions of dollars a year, Steward paid at least $250 million to its chief executive officer, Dr. Ralph de la Torre, and to his other companies during the four years he was the hospital chain’s majority owner.
Steward filed for bankruptcy in May, becoming one of the biggest hospital failures in decades. Conditions at some of its hospitals have grown dire…”
Exclusive | The CEO Who Made a Fortune While His Hospital Chain Collapsed – WSJ August 19, 2024
Re: workplaces as the source for purpose in life: “In a world where so many traditional sources of meaning — family, religion and civic participation — are fading, many have turned to their jobs for purpose. It’s a delicate balance; work cannot provide all the meaning required for human beings to flourish. Expecting work to fill all the gaps left by a withdrawal from family, faith and community can turn the workplace into a source of chronic disappointment, bitterness and conflict. We need more than one venue for “making meaning” in our lives.
The idea of work being fundamentally social in nature is not new. Adam Smith described how the human tendency to “truck, barter and exchange” as producers and consumers was a natural outworking of our inherently social nature. Work is not a cure for unhappiness, but by approaching it mainly as an act of service to colleagues and customers, it can play an important part in a happy and healthy life.”
Perspective: How Gen Z’s Mental Health Concerns Are Turning the Workplace Inside Out | American Enterprise Institute – AEI August 1, 2024
Re: consumer financial expectations: “For both future expectations and current assessments, the share of consumers who view their finances more favorably than business conditions has been flat since 2022 and remains at levels comparable to 2018-2020…. This result is consistent with the notion that higher-income consumers tend to have more resources to weather any declines in the macroeconomy. Overall, these patterns provide further evidence that the relatively slow recovery in sentiment since the height of inflation in June 2022 is not being depressed by any growth in the share of consumers who feel more positively about their finances than they do about the economy.”
University of Michigan Consumer Sentiment Index August 9, 2024 fetchdoc.php (umich.edu)
Re: consumer well-being: “A consistent paycheck, homeownership, and stock holdings are perhaps the holy trinity of wealth creation for many Americans, but not everyone is well positioned to benefit from all three in the years ahead. It’s among the reasons, despite falling inflation, many Americans aren’t happy with the economy. The longer some people are boxed out of these paths to wealth creation, the more difficult it could be for them to pay the bills, become financially secure, and retire as early as they desire.”
How Americans Build Wealth Is Changing; Some People Missed Out – Business Insider
Re: comments supporting site neutral payments by former HHS’ Secretaries: “Paying more based on where a medical service is performed drives up costs. It also encourages consolidation and makes it difficult for independent physician offices to compete. Current payment policies incentivize hospitals to purchase independent physician practices so they can charge hospital prices for the same care, driving up costs.
Data show that cancer patients who receive care in a hospital’s outpatient clinic will be charged more than 141% more than if the exact same care was provided in a freestanding facility. Some patients also face additional, unfounded add-on fees tacked on by hospitals that purchase freestanding facilities. These perverse incentives have led to more and more care shifting from freestanding physicians’ offices to hospital outpatient departments, resulting in higher spending without improvements in patient care.
Presidents Obama and Trump both tried to fix this problem by including site-neutral payment policy in their budget proposals…
Site-neutral payments represent a commonsense policy that will reduce costs for patients and taxpayers. It will diminish perverse incentives for consolidation, and incentivize care delivery in the right place for the right price. It’s a no-brainer that we believe could reduce costs for patients and payers.”
“Former HHS secretaries: Congress should adopt site-neutral payments for health care” by Alex Azar and Kathleen G. Sebelius April 18, 2024 Site-neutral payments would reduce costs for patients and payers | STAT (statnews.com)
Related: site neutral payments featured in InvestigateTV coverage: “In this installment of InvestigateTV and KFF Health News’ “Costly Care” series, Caresse Jackman, a national consumer investigative reporter at InvestigateTV, digs into ways that health systems can charge hospital prices for doctor’s office care. This report explores how that care may look no different to the patient — other than the cost.
Jackman’s story features an interview with Elisabeth Rosenthal, KFF Health News’ senior contributing editor. “We see this over and over again, the rebranding of doctor’s offices, of outpatient clinics as hospitals for the purpose of billing,” Rosenthal said.
Watch: How Patients Get Charged Hospital Prices for Doctor’s Office Care – KFF Health News
Re: Affordable Care Act scrutiny: “Several House Republican leaders have called on two watchdog agencies to investigate, while Sen. Chuck Grassley (R-Iowa) fired off more than half a dozen questions in a recent letter to the Centers for Medicare & Medicaid Services.
At issue are the ACA’s enhanced subsidies, put in place during the covid-19 pandemic as part of economic recovery legislation…
While potential fraud in government programs has always been a rallying cry for conservatives, the recent criticisms are a renewed line of attack on the ACA because repealing it is unlikely, given that more than 21 million people enrolled in marketplace plans for this year.
The enhanced subsidies are set to expire in late 2025. Without them, millions of Americans would likely see their premiums go up.
But the debate will also likely draw in other issues, including Trump-era tax cuts, which also must be addressed next year. Also potentially in play are other aspects of the ACA, including a special year-round enrollment period and zero-premium plans for low-income consumers.
Much of what eventually happens will depend on the makeup of the Senate and House, as well as control of the White House, after the November elections.”
New Lines of Attack Form Against the Affordable Care Act – KFF Health News
Re: Physician payment model change: “Transforming Medicare’s payment model to a pay-for-value system, although complex, is entirely feasible…Currently, the debate among CMS and healthcare groups focuses narrowly on whether next year’s reduction in payments will be closer to 2.9% or 1%, and which specialties will face the harshest impacts. This myopic view overlooks the larger issue: 98% of the reimbursement methodology remains unaddressed.
If Congress makes these changes now, we can significantly enhance the physical and financial health of our nation and ensure a sustainable healthcare system for future generations.”
Why Congress Should Change How Medicare Pays Physicians (forbes.com)app.flashissue.com/newsletters/7266b74074b6161d620d57b0172da7a70e0851e7
Re: corporatization in U.S. healthcare: “Overall, it’s clear that the corporatization of our healthcare system is not good for our health. In Portugal, for example, health spending per capita is one-fifth that of the U.S., yet life expectancy there is six years longer, on average, than in our country. The difference is largely rooted in the fact that Portugal has a national health service that guarantees access to healthcare, regardless of ability to pay. In other words, health takes precedence over profits in Portugal.
If we really want good healthcare at an affordable cost — the definition of value-based care — we have to move away from our profit-driven, corporatized healthcare model. As long as corporations are allowed to profit from healthcare, they will maximize those profits, regardless of the impact on consumers. It doesn’t matter how much we talk about value-based care or reforms that merely nip at corporate profits. Until Americans demand the same kind of healthcare that every Portuguese has, and insist that our government rein in the corporate owners of healthcare entities, we will get poorer healthcare and die sooner than citizens of other advanced countries.”
Corporate Takeover Has Not Been Good for Healthcare – 4sight Health
Consumers
Consumer sentiment: July 2024: “The University of Michigan consumer sentiment for the U.S. was revised higher to 66.4 in July 2024 from a preliminary reading of 66, remaining the lowest in eight months. The gauge for expectations was revised up to 68.8 from 67.2 while the current conditions subindex was revised lower to 62.7 from 64.1.”
University of Michigan Consumer Sentiment Survey July 2024
BLS CPI July, 2024: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally adjusted basis, after declining 0.1% in June. Over the last 12 months, the all-items index increased 2.9% before seasonal adjustment.
| % July 2024 CPI | % Chg. 7/23-7/24 | % Chg. 6/24-7/24 | |
| Overall | 100% | +2.9% | +0.1% |
| Food | 13.4% | +2.2% | +0.3% |
| Energy | 6.9% | +1.1% | +0.4% |
| Shelter | 36.3% | +5.1% | +0.3% |
| Medical Care Commodities | 1.5% | +2.8% | +0.2% |
| Physician Services | 1.8% | +0.7% | +0.1% |
| Hospital Services | 2.0% | +6.1% | -1.1% |
- The index for shelter rose 0.4% in July, accounting for nearly 90 percent of the monthly increase in the all- items index. The energy index was unchanged over the month, after declining in the two preceding months. The index for food increased 0.2 percent in July, as it did in June. The food away from home index rose 0.2 percent over the month, and the food at home index increased 0.1 percent.
- The index for all items less food and energy rose 0.2% in July, after rising 0.1% the preceding month. Indexes which increased in July include shelter, motor vehicle insurance, household furnishings and operations, education, recreation, and personal care. The indexes for used cars and trucks, medical care, airline fares, and apparel were among those that decreased over the month.
- The all-items index rose 2.9% for the 12 months ending July, the smallest 12-month increase since March 2021. The all items less food and energy index rose 3.2% over the last 12 months and was the smallest 12-month increase in that index since April 2021. The energy index increased 1.1% for the 12 months ending July. The food index increased 2.2%over the last year.
Consumer Price Index Summary – 2024 M07 Results (bls.gov)
Trends in consumer sentiment: Bank of America:
- Rebound in August: After a period of decline, consumer sentiment rebounded in August 2024 for the first time in five months12. This uptick was driven by more optimistic expectations about personal finances as inflation steadied1.
- Fluctuations Expected: Despite the recent rise, experts suggest that consumer sentiment is likely to fluctuate in the near future due to varying economic conditions and external factors3.
- Economic Disconnect: There has been a puzzling disconnect between consumer sentiment and traditional economic indicators. While GDP growth and employment rates have been strong, consumer sentiment has remained relatively low4. This could be due to lingering high prices and negative economic news disproportionately circulated on social media4.
- Inflation Concerns: Inflation continues to be a significant concern for consumers, impacting their outlook on personal finances and the broader economy4.
U.S. Consumer Data and Trends | Discover Consumer Insights
CFPB: Medical debt: “One in 5 Americans have medical debt — totaling $88 billion — with balances averaging $3,100 for the 15 million Americans whose medical debt appears on credit reports, according to the Consumer Financial Protection Bureau. Their situation leads many to avoid seeking health care when needed.”
CFPB https://www.consumerfinance.gov/rules-policy/medical-debt/
Health Care Affordability by Income Level, 2021 and 2022 vs 2019:
| Income Level | 2019 (Pre-COVID-19 pandemic) | 2021 (During COVID-19 pandemic) | 2022 (During COVID-19 pandemic) |
| Delaying care due to cost | |||
| Low | 15.4% | 10.2% | 11.2% |
| Middle | 9.8% | 8.3% | 8.2% |
| High | 3.6% | 4.4% | 3.6% |
| Not seeking care due to cost | |||
| Low | 14.9% | 9.5% | 10.7% |
| Middle | 8.7% | 7.1% | 7.0% |
| High | 2.9% | 3.1% | 3.0% |
JAMA, Changes in Health Care and Prescription Medication Affordability in the US During the COVID-19 Pandemic, June 30, 2024
Economy
Gibbons’ Report: Healthcare company bankruptcy filings: “29 healthcare companies, each with liabilities of more than $10 million, filed for Chapter 11 bankruptcy protection in the first half of the year. At that rate, 58 healthcare companies are projected to seek bankruptcy protection this year, which would be a 27% decrease from 2023’s 79 cases filed.
Fewer middle-market companies with liabilities between $10 million and $100 million are filing for Chapter 11, according to the report, which analyzed data from January 2019 through June 2024. However, case volume among large healthcare companies with liabilities of more than $500 million is still elevated. The report projects 12 large healthcare companies will file for bankruptcy protection in 2024 — the same as 2023 — and six already have filed. That would compare with five filings for all of 2022.
Pharmaceutical and senior care companies make up almost half of the healthcare bankruptcy filings since 2019.In the past five years, Gibbins found 45% of healthcare bankruptcy filings involved privately held organizations not backed by private equity; 14% were by private equity-backed companies; 24% were by publicly traded companies, and 17% involved nonprofits.”
Employers
Aon: U.S. Employer Health Care Costs to Increase 9% in 2025: Per AON’s annual forecast based on its analysis of data from 950 U.S. employers:
- The average cost of employer-sponsored health care coverage in the U.S. is expected to increase 9.0% surpassing $16,000 per employee in 2025–higher than the 6.4% increase to health care budgets that employers experienced from 2023 to 2024 after cost savings strategies.
- On average, the total health-plan cost for employers increased 5.8% to $14,823 per employee from 2023 to 2024: employer costs increased 6.4% to 80.7% of total while employee premiums increased 3.4% increase–both higher than averages from the prior five years, when employer budgets grew an average of 4.4% per year and employees averaged 1.2% per year.
- Employee contributions in 2024 were $4,858 for health care coverage, of which $2,867 is paid in the form of premiums from pay checks and $1,991 is paid through plan design features such as deductibles, co-pays and co-insurance.
- The rate of health care cost increases varies by industry: technology and communications industry have the highest average employer cost increase at 7.4%, while the public sector has the highest average employee cost increase at 6.7%. The health care industry has the lowest average change in employee contributions, with no material change from 2023: +5.8%
AON August 15, 2024 https://www.aon.com/home/solutions/health.
Employer litigation against insurers, consultants: “Employers plagued by escalating healthcare spending are suing the health insurance companies that manage their benefits in a trend that could disrupt the group health plan market.
The Consolidated Appropriations Act of 2021 and recent federal healthcare price transparency regulations have emboldened employers to scrutinize payments insurers are making to brokers, consultants and vendors, to compare their own de-identified claims data with publicly available information, and to examine hospital reimbursement rates.
Employers that self-insure pay for workers’ healthcare with their own funds and hire insurance companies as third-party administrators to manage benefits, maintain provider networks and handle claims. Some businesses have found their insurers are making them to pay three times more on hospital services than others or 20 times more than Medicare for a medication, Gremminger said, based on accounts from employers and labor unions.
More than 153 million workers and dependents — over 45% of the population — are enrolled in job-based health plans, making it the most common source of coverage. Employers and employees have good reason to be fed up with healthcare costs. The average annual price tag for an employer-sponsored family health plan rose 7% to $23,968 last year, according to a KFF survey. That’s 46.6% more than what
Price transparency prompts Aetna lawsuits over health plan costs | Modern Healthcare
Hospitals
AHA Position on Hospital Price Transparency: “We appreciate Congress’ ongoing interest in hospital price transparency to provide consumers with the price information they need specific to their course of treatment.
Hospitals and health systems have invested considerable time and resources to comply with the Hospital Price Transparency Rule, which requires online access to both a machine-readable file and a list of shoppable services. Recent data from Turquoise Health shows that 93.4% of hospitals have met the requirement to post a machine-readable file.
We are concerned, however, with recent legislative efforts to no longer recognize price estimator tools as a method to meet the shoppable services requirement. This change would both reduce access to a consumer-friendly research tool and unfairly penalize hospitals that have spent significant capital to comply with the regulation…
As Congress seeks to make statutory changes to price transparency standards, it is important for legislators to take into consideration the adjustments to the Hospital Price Transparency Rule made by the Centers for Medicare & Medicaid (CMS) on a regular basis…”
AHA Senate Statement for the Record on Health Care Transparency: Lowering Costs and Empowering Patients | AHA July 11, 2024 Special Committee on Aging
Related: AHA State on Price Transparency Proposed Rule June 2019: “AHA, together with other hospital groups, urge HHS to delay the effective date of the hospital price transparency rule – due to the burden it would represent for hospitals and health systems in the midst of responding to the COVID-19 public health emergency – until the matter is settled by the courts…”
AHA, Others Urge HHS to Delay the Effective Date of the Hospital Price Transparency Rule | AHAJune 29, 2020
Fitch: Children’s hospitals finances: “Despite a positive median operating margin for the sector, profitability is at its lowest level in 10 years, with no easy levers to pull to help generate a “V-shaped” recovery.
Children’s hospitals median operating margin and cash flow metrics declined to their lowest points in 10 years: the median operating margin and operating EBITDA were 2.7% and 8.1%, respectively, in fiscal 2023 versus 3.9% and 9.2% in fiscal 2022 and 5.3% and 11.9% averages for 2013–2022.
Inflated base salary and wage expenses that helped reduce reliance on high-cost contract labor is one of the key drivers of this profitability drop.
Despite this, Fitch said standalone children’s hospitals’ median rating remains strong at “AA-“.
2024 Median Ratios for Not-for-Profit Children’s Hospitals (fitchratings.com)
Proposed Federal Legislation: Regulating For-Profit Ownership of health systems: On July 25, 2024, a federal “Health Over Wealth Act” was introduced in the U.S. Senate (S.4804) and House of Representatives (H.R. 9156). The bill would amend the Public Health Service Act, requiring the Secretary of Health and Human Services (HHS) to enforce certain transparency, accountability, and other requirements with respect to for-profit corporations that own health care systems. Key provision:
- Transparency:Require private equity-owned health care facilities to publicly report on their debt and executive pay, lobbying and political spending, health care costs for patients and insurance plans, reductions in services, wages, or benefit, and more.
- Protections for Patients and Health Providers:Require private equity-owned firms to set up escrow accounts to ensure continuation of care in the event of a hospital closure or service reduction.
- Investment Licenses:Require private equity firms to obtain a license from HHS before investing in health care entities. HHS may revoke investment licenses from private equity firms that price gauge, understaff facilities, or reduce access to care.
- REITs: Require health care entities who wish to sell or lease from Real Estate Investment Trusts (REITs) to submit to review if the sale would mean the entity is weakened financially or public health is at risk.
- Accountability:Establish a task force to review the role of private equity/consolidation in health care.
- Assets, Quality, Safety:Prohibit private equity firms from stripping assets from health care entities or undermining the quality, safety, or access to health care.
- Tax Loopholes:Close tax loopholes for REITs rental income from health care entities in order to disincentivize health care entities from selling their property.
- Penalties: The legislation would provide for civil monetary penalty of up to $10,000 per violation of the act; as well as penalties to the violator’s investment license.
“Health Over Wealth Act” Would Set Tougher Requirements for Private Equity Firms, For-Profit Corporations Owning Health Care Systems John W. Eriksen, Timothy J. Murphy of Epstein Becker & Green, P.C. – Health Law Advisor August 5, 2024
Related: Private equity ownership targeted in CA bill: “A bill pending in California’s legislature to ratchet up oversight of private equity investments in healthcare is receiving enthusiastic backing from consumer advocates, labor unions, and the California Medical Association, but drawing heavy fire from hospitals concerned about losing a potential funding source.
The legislation, sponsored by Attorney General Rob Bonta, would require private equity groups and hedge funds to notify his office of planned purchases of many types of healthcare businesses and obtain its consent. It also reinforces state laws that bar nonphysicians from directly employing doctors or directing their activities, which is a primary reason for the doctor association’s support.
Opponents of the bill, led by the state’s hospital association, the California Chamber of Commerce, and a national private equity advocacy group, say it would discourage much-needed investment. The hospital industry has already persuaded lawmakers to exempt sales of for-profit hospitals from the proposed law.
A final vote on the bill could come this month if a state Senate committee moves it forward.”
California Bill Would Require State Review of Private Equity Deals in Healthcare | MedPage Today
Study: hospital nurse staffing requirements in states: Legislative agendas aimed at regulating nurse staffing in US hospitals have intensified after acute workforce disruptions triggered by COVID-19. Emerging evidence consistently demonstrates the benefits of higher nurse staffing levels, although uncertainty remains regarding whether and which legislative approaches can achieve this outcome…As of January 2024:
- 7 states had laws pertaining to staffing ratios for at least 1 hospital unit, including California and Oregon, which had ratios pertaining to multiple units.
- 8 states required nurse staffing committees, of which 6 specified a percentage of committee members who must be registered nurses.
- 11 states required nurse staffing plans.
- 5 states had pending legislation
- 1 state (Idaho) had passed legislation banning minimum nurse staffing requirements.
Fitch: Not for profit hospital outlook: “Fitch Ratings’ medians for U.S. not-for-profit (NFP) hospitals and health systems indicate the sector is slowly beginning to recover following seismic post-pandemic revenue declines…
Liquidity has held steady for NFP hospitals over the last several months while median operating incomes are beginning to stabilize,” said Fitch Senior Director Kevin Holloran. “However, the sector is grappling with stubborn inflation and formidable labor challenges. We are unlikely to achieve any degree of predictive normalcy for at least another year.”
US Not for Profit Hospitals and Health Systems on a Slow Mend (fitchratings.com) August 15, 2024
Study: trauma activation fees: “Trauma activation fees are intended to help trauma centers cover the costs of providing lifesaving care at all times, but they have fallen under greater scrutiny because of a lack of regulation and wide variability in charges…. As of April 18, 2023, a total of 38% of US trauma centers published trauma activation fees. These fees varied widely by payer type. The minimum fee charged was $40 (for a Medicaid contract); the maximum fees charged were $28,356 (self-pay) and $28,893 (commercial payers). Trauma centers that were larger, metropolitan, located in the West, and associated with proprietary (investor-owned, for-profit) hospitals had higher trauma activation fees. Proprietary hospitals posted fees that were 60% higher than those published by public, nonfederal hospitals. Unmerited variation in trauma activation fees may suggest that the current funding strategy is equitable neither for trauma centers nor for the severely injured patients who rely on them for lifesaving care.”
Trauma Activation Fees Vary Widely Across US Trauma Centers | Health Affairs
Insurers
HHS Issues challenge to health insurers to improve enrollee support functions: “It should be easy for consumers to use their health coverage. The Biden-Harris Administration is evaluating what actions to take to address pain points across the economy, including those in the health insurance market. We urge you to partner with the Administration on our shared goal by evaluating your operations and protocols and considering what steps you can take to help improve Americans’ experience with your health coverage options. As a leader in the healthcare industry, we challenge you to consider all actions within your purview—not only those mandated by the letter of the law, including those recently enacted…Our Departments intend to assess all available levers to address customer service issues in health coverage that needlessly waste people’s time and money. In addition, our colleagues at the Office of Personnel Management (OPM) will explore ways to leverage their authority to promote similar goals among Federal Employee Health Benefits (FEHB) carriers.”
Letter to CEOs on Biden-Harris Administration’s Time is Money Initiative | HHS.gov
HBR Case Study: BCBSM Transformation: “Blue Cross, Blue Shield of Michigan (BCBSM) is a $36 billion healthcare payor with more than 5 million members and a network of more than 37,000 providers. Healthcare has long been a complex sector, but recently it’s only become more so.
The passage of the Affordable Care Act (ACA), increased access to healthcare from about 83% of the U.S. population in 2010 to 93% in 2023. The ACA, coupled with an aging population put enormous pressure on BCBSM’s organization. Furthermore, tectonic shifts in the policies and services were creating enormous new complexity…
Seven years ago, the BCBSM leadership team realized that in order to deal with this tsunami of complexity without exploding their cost structure, they would need to rethink the organization’s rigid, legacy technology infrastructure, which was slow and expensive to alter…
During this journey BCBSM went from being the least efficient user of technology in the Blue Cross system to the most efficient as measured on a technology cost per employee basis. …”
How One Major Healthcare Firm Became the Leader in Innovative AI Use (hbr.org)
Trilliant: Provider sponsored health plans: “Leveraging publicly available financial statements and reports, we analyzed PSHP and system-level revenue at 15 U.S. health systems in 2014, 2015, 2021 and 2022. Five of these health systems exceed $10B in annual revenue.
Between 2014 and 2022, PSHP revenue at two of the health systems declined, whereas revenue increased at the other 13 health systems. PSHP 1’s revenue decreased by 12.7% from $1.7B in 2014 to $1.5B in 2022. PSHP 6’s revenue also declined by more than 50% between 2014 and 2021. Conversely, other systems, such as PSHP 8, more than quadrupled revenue over the period, from $301M in 2014 to over $1.2B in 2022. These variations highlight the uneven performance of PSHPs across the industry. “
Physicians, Health Professionals
Report: quality of care distinctions between male and female physicians: “Many factors can influence whether a patient lives or dies. The quality of the drugs they receive, for example, the rigor with which their symptoms are monitored, or—more surprisingly—the gender of the attending physician. In data from a host of different countries, patients seen by female doctors seem to do better than those seen by male ones. Why, though, remains mysterious. Understanding why such differences in care arise will help all doctors improve their practice. For all the good that snazzy medical equipment and new drugs can do, a physician’s judgment seems to be as important as ever.”
Do women make better doctors than men? (economist.com)
Study: PE activity in dentistry: “Over the course of the past twenty years, private equity (PE) has played a role in acquiring medical practices, hospitals, and nursing homes. More recently, PE has taken a greater interest in acquiring dental practices, but few data exist about the scope of PE activity within dentistry. We analyzed dentist provider data for the period 2015–21 to examine trends in PE acquisition of dental practices. The percentage of dentists affiliated with PE increased from 6.6% in 2015 to 12.8% in 2021. During this period, PE affiliation increased particularly among larger dental practices and among dental specialists such as endodontists, oral surgeons, and pediatric dentists. PE-affiliated dental practices were more likely to participate in Medicaid than practices not affiliated with PE. Future research should investigate whether PE’s role in dentistry affects the affordability and quality of dental services.”
Axios: MD. vs. DO: “Osteopathic physicians have similar jobs and training to M.D.s. But they say they’re lagging far behind when it comes to representation on federal panels that make key recommendations on medical research funding and policy…There are just 2 D.O.s among the 462 experts serving on national advisory councils for the NIH, compared with 213 M.D.s, per an analysis the American Association of Colleges of Osteopathic Medicine….
The small number of D.O.s on NIH advisory councils put osteopathic medical schools at a disadvantage for getting research funded…NIH currently funds $55.6 million in active research at osteopathic medical schools, compared with nearly $23 billion for research projects at M.D.-granting schools.”
Osteopaths seek more slots on federal research panels Axios August 15, 2024 https://www.axios.com/2024/08/15/osteopaths-federal-advisory-committees?
Polling
Harris Poll: Maternal Health Care: Conducted April 2-4, 2024 among 1116 U.S. adult women:
- 53% believe they must fight to receive the medical care they need.
- 39% who are pregnant or have been pregnant, experienced challenges to accessing care during pregnancy and childbirth.
- Only 42% of women who are currently pregnant/have ever been pregnant strongly feel they had access to the best possible care when they were pregnant, a decrease from 50% in 2022.
- 32% of women in the 18-34 age group strongly feel they received the best possible care.
- 14% of women who’ve been pregnant did not feel heard by their provider during their prenatal care visits.
Prescription Drugs
IRA Drug Discounts announced: Last Thursday, CMS released its negotiated prices for a 30-day supply of 10 drugs per provisions in the Inflation Reduction Act (August 2022) which allows Medicare to negotiate the price of drugs without generic or biosimilar competition that heavily cost Medicare Parts B and D. The first 10 negotiated prices take effect Jan. 1, 2026. followed by 15 more in 2027 and 20 more in 2028. The announced prices represent an overall 22% reduction in net spending but no details on individual drugs’ net price reductions were provided. Highlights:
- CMS expects the negotiated prices to reducehealthcare costs by $7.5 billion in 2026.
- The selected drugs contributed more than $50 billion in gross Medicare costs between June 1, 2022, and May 31, 2023, If the negotiated drug prices were in effect in 2023, it would have saved the federal government about $6 billion in drug costs and $26.5 billion from 2018 to 2020,
- Medicare prescription drug coverage enrollees will save an estimated $1.5 billion when the negotiated prices take effect in 2026.
- Lawsuits filed by Novo Nordisk, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb and Johnson & Johnson against the policy were rejected by federal judges and lawsuits brought by Merck and Novartis are awaiting decisions.
Note: The 10 drugs chosen for negotiation by CMS — single-source brand-name drugs with no therapeutically equivalent generic or biosimilar competition — were targeted for negotiation based on their total expenditures in the Medicare Part D program.
Reactions:
- “There are strong price reductions, but it also shows there is plenty of room for the industry to continue to make some profits on these drugs,” Vanderbilt’s Stacie Dusetzina said.
- In a note titled “CMS Spins, Pharma Wins (Relatively),” Raymond James analyst Chris Meekins wrote that “the impact is far less than politicians proclaimed and the industry as a whole seems to be managing this fine so far.”
- And in a note titled “Sigh of Relief,” Leerink analysts concluded that “22% is not as bad as anticipated earlier this year,” though recent earnings calls had assuaged fears somewhat.
Medicare Unveils First 10 Negotiated Drug Prices | MedPage Today
Medicare drug prices unveiled after negotiations to lower costs (statnews.com)
Public Health
Study: Costs of adverse childhood experiences: “Adverse childhood experiences (ACEs) have been shown to be strong predictors of socioeconomic status, risky health behaviors, chronic health conditions, and adverse outcomes… Compared to demographically similar adults without ACEs, those with ACEs had substantially higher utilization and 26.3% higher expenditures. The aggregate spending difference across the 157.6 million US adults with ACEs was $292 billion in 2021. Moreover, we observed large, graded relationships between ACEs and health status, health behaviors, and some dimensions of socioeconomic status. We also found associations between ACEs and a range of adverse adult circumstances, also newly measured in the 2021 MEPS, including financial and housing problems, social network problems, little or no life satisfaction, stress, food insecurity, verbal abuse, physical harm, and discrimination.”
