There are 29 days remaining in 2019 and 8 official days left on the Congress’ calendar not including Committee meetings. The 116th Congress is nearing its half-way point and Campaign 2020 looms large: healthcare will play a key role in both.
HERE’S A RECAP FROM LAST WEEK
Hospital Performance: Customer Satisfaction Falls Short, Margins in Smaller Hospitals Improve
According to the ACSI 2018-2019 Finance, Insurance, and Health Care Report 2018-2019 released last week, user experiences for banks (83 vs. 81.8 in 2018), airlines (80 vs. 78.7 in 2018), hotels (80% vs. 81.2 in ‘18) and municipal energy utilities (78 vs. 80.5 in ‘18) are significantly higher than hospitals (72 vs.77.3 in ‘18). And in healthcare, ambulatory care providers (77–no change from 2018) and health insurers score (79 vs 80.3 in ‘18) perform well above hospitals. The report also notes that health insurers, led by Humana, along with investment advisory firms were the only sectors showing overall improvement in contrast to the 5-point drop by hospitals which had the lowest index. ACSI Finance, Insurance and Health Care Report 2018-2019 https://www.theacsi.org/
Per Kaufman Hall’s November 2019 National Hospital Flash Report:
Hospital median EBITDA margin increased 20% month-over-month in October, and 6% year-over-year.
Hospitals’ median operating margin grew almost 35% month-over-month, and 10.4% year-over-year.
The biggest EBITDA margin jump (15.3%) was recorded across the smallest hospitals (25 or fewer beds) vs 1.9% increase year-over-year for hospitals with more than 500 beds.
Despite EBITDA growth, the smallest hospitals saw the biggest year-over-year drop in discharges, -8.3%, while the largest hospitals were up 5.9% in that time.
“National Hospital Flash Report Summary: November 2019” https://www.kaufmanhall.com/ideas-resources/article/national-hospital-flash-report-summary-november-2019
CMS releases Specs for new Direct Contracting Alternative Models
Last week, CMS announced two primary care models targeting “better care for seniors with complex, chronic or serious illnesses”. Two payment options are offered: one involving Professional Risk and the second Global risk (full capitation). The application deadline for organizations interested in the implementation period is Feb. 25. Direct Contracting Model Options, CMS November 25, 2019 https://innovation.cms.gov/initiatives/direct-contracting-model-options/
Health Coaching Market Growth
The market for health coaches is growing. Marketdata LLC estimates that the market for the 109,000 health coaches in the U.S (weight-loss advisors, physical therapy clinics, sleep aid and meditation, et al) is expected to grow 5.4% annually reaching $7.85 billion by 2022. “The U.S. Health Coaching Market 2018: Emerged as a $6 Billion Service Market – Analyses & Forecasts through 2006-2022”https://www.marketwatch.com/press-release/the-us-health-coaching-market-2018-emerged-as-a-6-billion-service-market—analyses-forecasts-through-2006-2022—researchandmarketscom-2018-10-05
Retailers Announce Plans: UnitedHealth Group-Walgreens Team Up, CVS Expanding Wellness Offerings, Best Buy to Focus on Seniors
UnitedHealth will open 14 Medicare service centers in Walgreens locations in Las Vegas, Cleveland, Phoenix, Denver and Memphis starting in January 2020. At the new centers, customers will be able to meet with service advocates to discuss their UnitedHealthcare benefits and enroll in new plans. UnitedHealthcare Medicare Advantage members will also be able to schedule annual in-store wellness visits through UnitedHealthcare’s HouseCalls program. Related: In October, Walgreens announced that 100 Jenny Craig at Walgreens locations will begin operating in 20 states starting next month. “UnitedHealth Group To Open Medicare Centers Inside Walgreens” Forbes November 25, 2019 https://www.forbes.com/sites/brucejapsen/2019/11/25/unitedhealth-walgreens-to-open-medicare-centers-inside-drugstores/#11bd3a634280
CVS affirmed its strategy to its investors: expansion of HealthHUBs® with 1500 expected to open by the end of 2021; integration of Aetna to drive $300 – $350 million of synergies in 2019 and $800 million in 2020; and growth–2019 Consolidated Revenues $251.2 to $254.4 Billion, GAAP Operating Income $11.8 to $12.0 Billion, Adjusted Operating Income $15.0 to $15.2 Billion, GAAP diluted EPS $4.90 to $5.05, Adjusted EPS $6.75 to $6.90. “CVS Health Outlines Strategy to Accelerate Growth” CVS Health June 4, 2019 https://cvshealth.com/newsroom/press-releases/cvs-health-outlines-strategy-accelerate-growth
Best Buy has spent roughly $1 billion on acquisitions to expand its healthcare services to offset declines in consumer electronics. Senior care is Best Buy’s target: One million seniors currently use company’s health offerings with a goal of 5 million seniors by fiscal 2025. The company plans to scale its “five-star service” to connect seniors with caregivers, dispatches emergency personnel funded by third-party insurance generating as much as $46 billion in revenue over the next 10 to 20 years, according to Morgan Stanley estimates. “Best Buy’s Healthcare Strategy: 5 Million Seniors in 5 Years” Motley Fool October 1, 2019 https://www.fool.com/investing/2019/10/01/best-buys-healthcare-strategy-5-million-seniors-in.aspx; “Healthcare May Eventually Become A Bigger Business For Best Buy Than Selling Electronics” Forbes September 24, 2019 https://www.forbes.com/sites/andriacheng/2019/09/24/this-business-may-eventually-be-bigger-for-best-buy-than-selling-electronics/#52d787d15a52
JAMA Study: Life expectancy declining in U.S.
“US life expectancy has not kept pace with that of other wealthy countries and is now decreasing.” That’s the key takeaway from a retrospective review of mortality data from 1959 to 2016.The researchers found that U.S. life expectancy increased from 69.9 years to 78.9 years but declined for 3 consecutive years after 2014. The decrease in US life expectancy among adults aged 25 to 64 years that began in the 1990s is due to drug overdoses, alcohol abuse, suicides and a diverse list of organ system diseases. Woolf et al “Life Expectancy and Mortality Rates in the United States, 1959-2017” JAMA. 2019;322(20):1996-2016. doi:10.1001/jama.2019.16932
JAMA Study: Physician depression, patient safety linked
In this systematic review and meta-analysis of 11 studies involving 21 517 physicians, physicians with a positive screening for depression were highly likely to report medical errors. Examination of longitudinal studies demonstrated that the association between physician depressive symptoms and medical errors is bidirectional. “Given that few physicians with depression seek treatment and that recent evidence has pointed to the lack of organizational interventions aimed at reducing physician depressive symptoms, our findings underscore the need for institutional policies to remove barriers to the delivery of evidence-based treatment to physicians with depression. “Pereira-Lima et al “Association Between Physician Depressive Symptoms and Medical Errors: A Systematic Review and Meta-analysis” JAMA Netw Open. 2019;2(11):e1916097. doi:10.1001/jamanetworkopen.2019.16097
Aflac: Employees dissatisfied by insurance options
According to the 2019 Aflac WorkForces survey of 1,200 benefit decision-makers and 2,000 employees nationwide:
58%of employees said they felt stressed out when trying to understand their health insurance benefit needs.
Millennials and Generation Z employees, or those under the age of 39, report higher stress when it comes to selecting health benefits. 66% percent of millennials and 63% of Gen Z employees said medical billing was stressful.
Health insurance satisfaction is falling among employees. Only 52 percent of workers are satisfied with their benefits, compared to 61 percent in 2018.
2019 Aflac Workforces Report https://www.aflac.com/business/resources/aflac-workforces-report/default.aspx
WHAT TO WATCH THIS WEEK AS CONGRESS RETURNTS FROM ITS THANKSGIVING RECESS AND HEALTHCARE ORGANIZATIONS PREPARE FOR YEAR END
Tuesday, the Senate Committee on Health, Education, Labor, and Pensions will consider the nominations of Stephen Hahn, of Texas, to be Commissioner of Food and Drugs, Department of Health and Human Services, Richard Giacolone, of Virginia, to be Federal Mediation and Conciliation Director, and Cynthia L. Attwood, of Virginia, and Amanda Wood Laihow, of Maine, both to be a Member of Occupational Safety and Health Review Commission.
Wednesday, the House Judiciary Committee will consider the Impeachment Inquiry into President Donald J. Trump: Constitutional Grounds for Presidential Impeachment. The White House has announced it will participate in the inquiry.
Surprise Medical Bills, Drug Pricing and Internal Politics
Opposition to surprise medical bill legislation in states where Senate and House races are tight is being funded through a $29 million ad campaign paid for by private equity-backed Team Health, Envision and others. Last week from Budget Advisor to the White House Domestic Policy Council Joe Grogan reacted: “The advertisements that are targeting members on this and are being run by the private equity groups who are using the arbitrage on surprise medical billing should make every American and member want to puki. It is vile the way they buy these groups and they prey on people.” NOTE: Grogan is a major player in proposed drug price transparency policy, having served as a lobbyist for Gilead before joining the administration. He has, at times, been at odds with HHS Secretary Alex Azar, a former Eli Lilly executive. And, adding intrigue to policymaking in healthcare, the rift between Azar and CMS Director Seema Verma has surfaced. “Mystery Solved: Private-Equity-Backed Firms Are Behind Ad Blitz on ‘Surprise Billing” New York Times September 13, 2019 https://www.nytimes.com/2019/09/13/upshot/surprise-billing-laws-ad-spending-doctor-patient-unity.html “; “How Joe Grogan, a former pharma lobbyist, upended Trump’s drug pricing agenda” STAT October 22, 2019 https://www.statnews.com/2019/10/22/joe-grogan-upended-trump-drug-pricing-agenda/;
Gallup Health Series Release
Per Gallup, 28% of Americans report they weight more than 200 pounds, up from 24% in 2010. Their average self-reported weight increased to 178 pounds from 174 in the same period. But the percentage who say their weight is about right has increased to 56% from 53% in the same period. It’s part of Gallup’s monitoring of health and wellbeing in the U.S. Note: Today marks the release of Gallup’s Health Series: “ACA, Mental Health, Fitbits and More” which includes Americans’ evaluations of the U.S. healthcare system, the Affordable Care Act and more. www.gallup.com