The incoming Trump administration is committed to cutting government waste and reducing regulation. That pledge puts the U.S. healthcare industry in the crosshairs for budget cuts and heightened attention. It’s also a high-profile industry that’s ripe for disruption.
Healthcare is the economy’s biggest private-sector employer (18.3 million) and accounts for 17.3% of the GDP and 28% of total federal spending. Since 2008, annual increases for prescription drugs, hospitals and physician services have increased faster than the “All Items” index widening every year. From 2012 to 2022, the average annual growth rate was 4.2% for physician services, 4.4% for hospital care, 4.7% for prescription drugs and 5.0% for insurers who experienced the highest volatility of the four.
For the most part, these sectors have weathered financial storms fairly well. The biggest players in each sector navigated the pandemic and volatility through consolidation and scale advantages while smaller players in their ranks were debilitated. Public policy changes were, by and large, incremental with one exception: the Affordable Care Act (2010) which sought to increase coverage for small employers and low-income individuals while improving quality and reducing costs. Its effectiveness remains a toss-up though Fix and Repair has replaced Repeal and Replace even among its most ardent critics. Health spending continues to go up, quality is wildly variable depending on what measures one chooses, and coverage has enabled the uninsured rate to plummet from 17.8% in 2010 to 7.6% last year.
Looking ahead, per the Congressional Budget Office, spending for healthcare is forecast to increase 5.6% per year for the next decade to 19.7% of the GDP—well above GDP growth (4.3%). Assuming continued aging, medical inflation (drugs, technologies and facilities) and labor costs, the health industry’s dominance will be increasingly problematic to the rest of the economy. It underlies the Trump Healthcare team’s belief that incremental changes to the health system are a waste of time and money.
The Trump Healthcare 2.0 team (Trump, Musk, Ramaswamy, Kennedy, Oz, Makary, et al) believes the U.S. industry is wasteful, over-regulated and deceptive. They know other countries spend a third less than the U.S. and get comparable or better outcomes. Their message resonates with the majority of employers and consumers facing higher costs and persistent issues with affordability, accessibility and variable quality. And it presents a laundry list of opportunities for disruption including these…
- Expansion of price transparency mandates for insurers, hospitals, prescription drugs and physicians.
- Medicare payment cuts to certain hospitals vis a vis approval of site neutral payments, limits on tax exemptions for NFP systems and administrative cost reduction mandates.
- Re-vamping of CMSs Center for Medicare and Medicaid Innovation to refocus its value agenda and alternative payment programs.
- Restrictions on insurer prior authorization and surprise billing policies.
- Stimuli for rapid adoption of the Rural Emergency Hospital (REH) program in collaboration with public health integration.
- Lifting of restrictions for physician-owned hospital ownership and expansion of access for certain alternative and behavioral health professions.
- Suspension of minimum staffing mandates for nursing homes.
- Evaluation and expansion of the Veteran’s Choice Program (VHA).
- Allowance for Marketplace subsidies to expire (December 2025) to stimulate individual market competition.
- Executive orders to facilitate interoperability.
- Standardization and acceleration of Gen AI applications in healthcare workforce modernization.
- Updating of regulatory policy to stimulate Medicare Advantage enrollment growth.
- Accelerated approval for new drugs in tandem with drug price transparency mandates
- Expansion of nutrition and food-as-medicine efforts in public health, primary care, and veterans’ health in tandem with overhaul of the U.S. D.A. “healthy eating” guidelines.
- Elimination and streamlining of HHS programs and agencies accompanied by reduced appropriations.
- CMS, FTC executive review: health insurance coverage determinations, administrative costs, prior authorizations and premiums, et al
- HHS-USDA Executive Review: food supply & nutrition, additives, corporate influence, et al
- Continued default to state determinations and court proceedings on abortion.
- FTC review of promised savings, public health improvements and lower prices resulting from hospital consolidation.
- And many others.
Recognizing the eminence of Campaign 2026 and narrow GOP margins in Congress, the Trump team will rely on administrative directives in key agencies (DOJ, FTC, FDA, CMS, VHA et al), high profile investigations and White House Executive Orders to post wins on these. Legislative initiatives (new laws) will be few and far between. And the laundry list will expand as the team is confirmed.
How to prepare
Most boards of directors of U.S. healthcare organizations are reasonably comfortable opining about their organizations’ finances and short-term strategy. They’re not prepared to discuss issues outside their sector nor system-wide changes that lie ahead. Board education based on a complete, objective environmental assessment and deliberative process of scenario planning are necessary starting points.
And, given the Trump Healthcare team’s penchant for high-profile disruption, every organization must revisit its performance and public messaging around four questions:
- Do we take affordability seriously? What’s the evidence?
- Are our administrative costs (including wages, executive compensation, et al), direct (supplies, technology et al) and indirect costs (capital, et al) reasonable and shrinking?
- Do we base clinical decisions (treatments, coverage, formulary, drug efficacy et al) on scientific evidence? Are non-conventional clinical strategies and non-traditional providers thoughtfully considered in clinical strategies?
- Are we trusted?
The laundry list for Trump Healthcare 2.0 disruption is long. The public expects changes. Responding in business-as-usual fashion—especially thru well-worn trade association advocacy pronouncements– is short-sighted. It’s time to take a fresh look starting with a mirror.
Paul
PS: This Saturday is the deadline for Medicare Open enrollment.-. Approximately 1.8 million MA members and 500,000 Part D enrollees will need to change plans because their current policies are not available next year. MA will play a big role in Trump Healthcare plans.
Resources
- Health insurance coverage: Early release of estimates from the National Health Interview Survey, January-June 2023
- Trends in health care spending | Healthcare costs in the US | AMA
- National Health Expenditure Projections 2023-2032 (cms.gov)
- High U.S. Health Care Spending | Commonwealth Fund
Sections in Today’s Report
- Quotables
- Corporate News
- Coverage
- Governance
- Hospitals/Health Systems
- Insurers
- Prescription Drugs
- Workforce
Quotables
Re: Make America Healthy Again: “Trump’s return to the White House has given (Casey) Means and others in this space significant clout in shaping the nascent health policies of the new administration and its federal agencies. It’s also giving newfound momentum to “Make America Healthy Again,” or MAHA, a controversial movement that challenges prevailing thinking on public health and chronic disease.
Its followers couch their ideals in phrases like “health freedom” and “true health.” Their stated causes are as diverse as revamping certain agricultural subsidies, firing National Institutes of Health employees, rethinking childhood vaccination schedules, and banning marketing of ultra-processed foods to children on TV.
Public health leaders say the emerging Trump administration’s interest in elevating the sometimes-unorthodox concepts could be catastrophic, eroding decades of scientific progress while spurring a rise in preventable disease. They worry the administration’s support could weaken trust in public health agencies.”
Make America Healthy Again: An Unconventional Movement That May Have Found Its Moment November 26, 2024 https://kffhealthnews.org/news/article/make-america-healthy-again-maha-rfk-calley-casey-means/
Re: Wall Street Journal on hospitals as targets in Trump Healthcare 2.0: “Donald Trump’s likely pick for health chief, Robert F. Kennedy Jr., has grabbed headlines for his anti-vaccine rhetoric and sharp criticism of Big Pharma. But hospitals, not drugmakers, might have more to fear from a Republican government.
With the GOP in control of Congress and the White House, hospitals could face budget cuts and tighter oversight, after a period of benefiting from generous federal spending under President Biden. Much of it comes down to hospitals’ reliance on government insurance programs like Affordable Care Act exchanges and Medicaid that could be cut down to size by Republicans looking for ways to trim government spending and pay for tax cuts.
Medicaid expansions, boosted subsidies for ACA plans and programs like state directed payments—which funnel Medicaid dollars to hospitals—poured billions into the system, benefiting insurers and providers serving these programs…
But Republicans are signaling they may not be as generous, and Wall Street is taking notice…
Hospitals won’t take these risks lying down. As the largest employers in many cities, they wield significant political influence, and their leaders warn that budget cuts could lead to layoffs and fewer beds for patients. Hospitals could also benefit if the Trump administration dials back on Biden’s antitrust stance, as many have relied on mergers and acquisitions to reduce competition and boost growth.
The stakes are high. Hospitals account for about 30% of the $4.5 trillion the U.S. spends annually on healthcare, compared to about 9% for drugs. While pharma and insurers often take political heat, hospitals have consolidated aggressively, sidelining independent doctors and driving up costs. For a GOP looking to curb spending, hospitals could become a target for cuts, even if major legislative changes remain a long shot.
The healthcare debate won’t end with hospitals. Pharma pricing, insurer profits, and inflated salaries for doctors and administrators are all part of the problem of high costs in the U.S. But under Republican control, hospitals might face a reckoning they didn’t see coming.”
Why Republican Governance and RFK Jr. Are Spooking Hospitals – WSJ
Re: Bhattacharya nomination for NIH: “The pandemic is over, but liberal group-think in science continues on issues like climate and race thanks to the NIH’s support. Consider the NIH-funded “UnBIASED” study led by professors at the University of Washington and University of California, San Diego, which seeks to use machine learning to detect “hidden bias” in interactions between doctors and patients. Its stated goal is to develop tools to alert doctors of their unconscious racism, sexism and homophobia “to shift the balance of power toward more equitable health outcomes.”
Your tax dollars at work. Dr. Bhattacharya’s top charge at the NIH will be returning the agency to its original mission of funding innovation rather than political science masquerading as real science.”
Jay Bhattacharya and the Vindication of the ‘Fringe’ Scientists – WSJ December 1, 2024
Re: Gottleib on RFK nomination for HHS: “I don’t think the president wants to see a resurgence of measles, wants to see a resurgence of whooping cough in this country, wants to see, God forbid, cases of polio in this country.… I think if RFK follows through on his intentions, and I believe he will, and I believe he can, it will cost lives in this country.”
Former Trump FDA chief is seeking to undermine RFK Jr.’s Senate confirmation November 29, 2024 https://www.statnews.com/2024/11/29/scott-gottlieb-criticizes-rfk-jr-trump-hhs-nominee
Re: the MAHA movement: “The MAHA movement capitalizes on many of the nonconventional health concepts that have been darlings of the left, such as promoting organic foods and food as medicine. But in an environment of polarized politics, the growing prominence of leaders who challenge what they call the cult of science could lead to more public confusion and division.”
Make America Healthy Again: An Unconventional Movement That May Be Having Its Moment— Experts raise concern that Trump will parrot untested and unproven public health ideas KFF News November 26, 2024 https://www.medpagetoday.com/publichealthpolicy/publichealth
Re: Potential GOP changes to Affordable Care Act: “…Republicans have another option to weaken the ACA: They can simply do nothing. Temporary, enhanced subsidies that reduce premium costs — and contributed to the nation’s lowest uninsured rate on record — are set to expire at the end of next year without congressional action. Premiums would then double or more, on average, for subsidized consumers in 12 states who enrolled using the federal ACA exchange, according to data from KFF. That would mean fewer people could afford coverage on the ACA exchanges. And while the number of people covered by employer plans would likely increase, an additional 1.7 million uninsured individuals are projected each year from 2024 to 2033, according to federal estimates. Many of the states that would be most affected, including Texas and Florida, are represented by Republicans in Congress, which could give some lawmakers pause about letting the subsidies lapse.”
Washington Power Has Shifted. Here’s How the ACA May Shift, Too. – KFF Health News November 21, 2024
Re: Workforce mood: “69% think it’s fundamentally flawed and in need of systemic change vs. 7% who think otherwise (Keckley Poll). And 60% think it puts its profits above all else, laying the blame at all its major players—hospitals, insurers, physician, drug companies and their army of advisors and suppliers.
These feelings are strongly shared by its workforce, especially the caregivers and support personnel who service patient in hospital, clinic and long-term care facilities. Their ranks are growing, but their morale is sinking. Career satisfaction among clinical professionals (nurses, physicians, dentists, counselors) is at all time low and burnout is at an all-time high…
Transformational changes in how the healthcare workforce is composed, evaluated and funded needs fresh thinking and boldness. It must include input from new players and disavow sacred cows. It includes each organization’s stewardship and a national spotlight on modernization.
It’s easier to talk about healthcare’s workforce issues but It’s harder to fix them. That’s why incrementalism is the rule and transformational change just noise.”
The Healthcare Workforce Crossroad: Incrementalism or Transformation The Keckley Report July 8, 2024
Re: Public health messaging effectiveness: “We must admit to ourselves and the American public that we — the traditional public health sector — too often fail to communicate effectively about why the things we recommend confer real health benefits that people have reason to value. Everyone is entitled to make the health choices they think are most appropriate. But we must ensure they are equipped to make the choices that will actually make them healthier.
Many people do not accept, understand, or believe “traditional” health messages. Perhaps it is because these messages usually must go through a series of bureaucratic nitpicks before they can be shared on a platform, at a podium, or in a leaflet distributed at a health clinic. While that tedious process goes on, other voices will contribute and share dozens if not hundreds of pieces of related content. Those messages are louder and often easier to understand.”
What ‘Make America Healthy Again’ Gets Right About Communications https://www.medpagetoday.com/opinion/second-opinions/113109?xid=nl_secondopinion_2024-11-26&mh=30d2d79f4357232a6a1236c866c0fe17
Re: Economist on US voter shift: “Diagnose the emerging election data and the results looks even worse than it first seemed. The Democratic Party’s idea of itself as a party of young, ethnic minorities and the working class has been punctured. The best data available suggest that, compared with Barack Obama’s performance in 2012, Ms. Harris did 16% worse among voters without a college degree, 19% worse with young voters, 26% worse with African-Americans and 27% worse with Hispanics….”
The Economist November 23, 2024
Re: Potential for new TEAM bundled payment model: “Physicians and policymakers might reasonably question the role of bundled payments in the broader payment landscape, especially given that such models have led to net financial losses for CMS, have disproportionately penalized safety-net hospitals, and haven’t improved clinical outcomes, all while generating small reductions in spending on post-acute care at the expense of non-reimbursed caregivers. Is there a viable role for bundled payments in the future of payment reform? TEAM may provide some answers.”
Re: Markey on Steward-Rural Health executive leadership: “On October 31, 2024, your private-equity-owned company Rural Healthcare Group (RHG) announced that it had closed on its acquisition of Steward Medical Group and Steward Health Care Network (together, “Stewardship”). As part of its transaction review, the Massachusetts Health Policy Commission revealed that Stewardship executive team will remain on board with the new consolidated company — Revere Medical. I am concerned that the same Stewardship executives who drove that healthcare provider into the ground will now take the reins at Revere Medical. These executives should not be permitted to fail up and place in jeopardy another healthcare provider on which Massachusetts residents will come to rely….
What specific steps have been taken to address the leadership failures that led to Stewardship’s financial decline? Will any members of the previous leadership team be held accountable for their roles in the bankruptcy process?”
November 25, 2024 letter from Sen. HELP Committee Edward Markey to Benson Sloan, CEO, Rural Healthcare Group https://www.markey.senate.gov
Corporate
CVS Health, UnitedHealth Group and Cigna sued the Federal Trade Commission on Tuesday, claiming that the agency’s case against drug supply chain middlemen over high insulin prices in the U.S. is unconstitutional. The complaint, filed in the U.S. District Court for the Eastern District of Missouri, is the latest move in a bitter legal fight between the three largest pharmacy benefit managers, or PBMs, in the U.S. and the FTC. The FTC in September sued CVS’s Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx in the agency’s administrative court, accusing those PBMs and other drug middlemen of using a “perverse” rebate system to boost their profits while inflating insulin costs for Americans.
CVS, UnitedHealth, Cigna sue to block FTC case over insulin prices November 19, 2024https://www.cnbc.com/2024/11/19/cvs-unitedhealth-cigna-sue-to-block-ftc-case-over-insulin- prices.html?__source=newsletter%7Chealthyreturns
NES Health shutdown: On November 22, hospital emergency department physicians staffing company NES announced it is ceasing operations impacting 30 hospitals. NES Health’s closure follows the recent shutdown of two other physician staffing firms. In September 2023, American Physician Partners voluntarily filed for Chapter 11 protection under the U.S. Bankruptcy Code and in May 2023, Envision announced its plans to file for Chapter 11 bankruptcy.
ProPublica investigation: UHG utilization controls in Medicaid mental health: “Around 2016, government officials began to pry open United’s black box. They found that the nation’s largest health insurance conglomerate had been using algorithms to identify providers it determined were giving too much therapy and patients it believed were receiving too much; then, the company scrutinized their cases and cut off reimbursements. By the end of 2021, United’s algorithm program had been deemed illegal in three states.
But that has not stopped the company from continuing to police mental healthcare with arbitrary thresholds and cost-driven targets, ProPublica found, after reviewing what is effectively the company’s internal playbook for limiting and cutting therapy expenses… …While the massive insurer — one of the 10 most profitable companies in the world — offers plans to people in every state, it answers to no single regulator…In essence, more than 50 different state and federal regulatory entities each oversee a slice of United’s vast network.
United administers Medicaid plans or benefits in about two dozen states, and for more than 6 million people, according to the most recent federal data from 2022. The division responsible for the company’s Medicaid coverage took in $75 billion in revenue last year, a quarter of the total revenue of its health benefits business, UnitedHealthcare.”
Medical Cost Sharing principals sentenced: James McGinnis, 78, co-founder of Missouri-based Medical Cost Sharing, was sentenced to 12 years in prison for his role in a health insurance fraud scheme. Co-founder Craig Reynolds was sentenced in June to 17 years. The DOJ said they collected more than $8 million in member contributions but paid only 3.1% in healthcare claims. The duo pocketed more than $5.1 million from member contributions between December 2015 and December 2022. Federal authorities shut down Medical Cost Sharing in February 2023
Coverage
KFF Report: Medicaid Expansion in Campaign 2024: “Medicaid expansion has been adopted by 41 states including the District of Columbia, split nearly evenly between states that voted for Trump (21 states) and those that voted for Harris (20 states). Over the past ten years, Medicaid expansion has been broadly adopted by states led by Republicans and Democrats. Consequently, any changes to the Medicaid expansion authority or financing structure will affect both red and blue states. While the data are presented by states that voted for Trump or Harris in the November 2024 elections, there are five states with Democratic governors that voted for Trump (Arizona, Kentucky, Michigan, North Carolina, and Pennsylvania) and three Republican-led states that voted for Harris (New Hampshire, Virginia, and Vermont). In total, there are 19 expansion states with Republican governors, and 22 expansion states (including DC) headed by Democrats. Ultimately, it will be state governors and legislatures that will respond to any federal policy changes.”
Medicaid Expansion is a Red and Blue State Issue | KFF
Stat Investigation: UHG payments to its owned practices: “UnitedHealth Group is paying many of its own physician practices significantly more than it pays other doctor groups in the same markets for similar services, undermining competition and driving up costs for consumers and businesses, a STAT investigation reveals.
The findings, drawn from a sample of practices across the country, expose the effects of a deepening conflict of interest: Rather than use its size and market power to drive down the cost of care, UnitedHealth, as the corporate parent of both a dominant insurance company and health care provider, can capture larger profits by paying itself higher prices for basic checkups, surgeries, and procedures.
STAT uncovered the above-market payments in a first-of-its-kind analysis conducted in partnership with health analytics company Tribunus Health. The analysis examined UnitedHealth’s own data, which must be reported to the federal government, showing what its commercial insurance unit pays 16 of its Optum-branded doctor groups for common or expensive services that account for the most spending…
The analysis found that UnitedHealthcare, the company’s insurance subsidiary, paid 13 of the 16 Optum practices more on average for common services than the market price, which refers to the average UnitedHealthcare pays in-network providers, including Optum and non-Optum practices, within the same specialty in a given county or service area.”
UnitedHealth pays its own physician groups considerably more than others, driving up consumer costs and its profits November 25, 2024 https://www.statnews.com/2024/11/25/unitedhealth-higher-payments-optum-providers-converts-expenses-to-profits
Study: Affordable Care Act Marketplace dental insurance: “We found that in 2023, at least one Stand-alone Dental Plan was offered in every state, and 36 states offered embedded dental plans. Most counties (63.6 %) had access to more than five insurers offering adult dental plans, whereas approximately 4% had only one insurer offering adult dental plans. Counties in state-based Marketplaces, rural areas, and dentist shortage areas were more likely to be counties with limited dental insurer participation. The net loss of Stand-alone Dental Plans between 2016 and 2023 was more common in state-based Marketplaces and disadvantaged counties. Our findings can inform future policies to improve the dental insurance Marketplace and access to affordable dental care.
Dental coverage can increase access to dental services, improve health outcomes, and reduce preventable emergency department visits. Even after the implementation of the Affordable Care Act (ACA), approximately 68.5 million adults still lacked dental coverage in 2023. Unlike pediatric dental benefits, which are considered part of the ACA’s essential health benefits, and dental benefits remain optional under the ACA.”
Availability Of Adult Dental Plans in The Affordable Care Act Marketplaces, 2016–23 https://www.healthaffairs.org
Governance
Bain survey: What CFOs want from boards: Based on Bain 2024 survey of 146 public company CFOs:
- CFOs add the most value on strategy (45%), performance management and monitoring (42%) and risk management and resilience (38%)
- But boards should spend less time on operational topics (45%), reviewing standard reporting (19%) and performance monitoring (9%).
What Do CFOs Want from Boards? | Bain & Company November 11, 2024
Hospitals/Health Systems
HCCI Study: Hospital Price variation: “In this study, we provide descriptive trends on variation in inpatient prices paid by commercial health plans stratified by hospital characteristics using data from Health Care Cost Institute’s employer-sponsored insured claims data. Our analyses found evidence of considerable variation among inpatient price levels and growth among system affiliation and profitability. Prices among system-affiliated hospitals grew from $14,281.74 in 2012 to $20, 731.95 in 2021, corresponding to a 45.2% increase during this period. On the other hand, prices among independent hospitals grew more slowly, from $13,460.50 in 2012 to $18,196.90 in 2021, corresponding to a 35.2% increase. We did not observe a similar trend in growth rates among case mix index by hospital characteristics, implying that differential inpatient price growth is not driven by changes in case mix by hospital characteristics. Heterogeneity in hospital prices and price growth by type of hospital suggests that public and private policymakers aiming to rein in health spending should consider policies that address this variation. “
Commercial inpatient hospital price growth driven by system affiliation and nonprofit-status hospitals Health Care Cost Institute hospitals. Https://academic.oup.com/healthaffairsscholar/article
Deloitte report: telehealth prioritization by health systems: “Despite an increase in consumer demand, the use of virtual health services has remained relatively flat since 2022, according to recent research from Deloitte. About a quarter (24%) of survey respondents say they are willing to switch doctors to ensure access to virtual health options. Today’s consumers, accustomed to highly personalized virtual experiences in banking, retail, and entertainment, now expect the same level of convenience and customization in their health care interactions…
Although many health systems are both interested in and capable of offering virtual health services, their organizational priorities often don’t align with consumer needs. Some health systems have even scaled back or completely discontinued their virtual health offerings.”
The growing disconnect between virtual health availability and consumer demand Deloitte October 16, 2024 https://www2.deloitte.com/us/en/insights/industry/health-care/virtual-health-consumer-demand-and-availability.html?id=us:2em:3na:4diUS187388:5awa:6di:112624:mkid-K202368&ctr=cta4verhc&sfid=003a000001xI0bwAAC
Study: Root causes for rural hospital closures: “The primary reason hundreds of rural hospitals are at risk of closing is that private insurance plans are paying them less than what it costs to deliver services to patients… although the at-risk hospitals are losing money on uninsured patients and Medicaid patients, losses on private insurance patients are the biggest cause of overall losses. Conversely, many other rural hospitals are not at risk of closing because they make profits on patient services. They receive payments from private health plans that not only cover the costs of delivering services to the patients with private insurance, but those payments also offset the hospitals’ losses on services delivered to uninsured and Medicaid patients… In reality, about half of the services at the average rural hospital are delivered to patients with private insurance (both employer-sponsored insurance and Medicare Advantage plans). In most cases, the amounts these private plans pay, not Medicare or Medicaid payments, determine whether a rural hospital loses money…”
Rural_Hospitals_at_Risk_of_Closing.pdf November 2024
Physicians
Hospital employment of PE-backed physicians: “Health systems are hiring specialists from private equity-backed companies as hospitals look to reduce costs by cutting out staffing agencies while easing staff shortages.
Higher pay and the prospect of less administrative work have allowed health systems to hire an increasing number of specialists from private equity-backed staffing firms and independent clinics, industry observers said. Health system executives said they plan to directly employ more physicians to combat persistent gaps in specialty care without relying on staffing agencies. ..growing number of hospital-employed physicians may galvanize unionization….”
Why private equity-backed players are losing doctors Modern Healthcare November 26, 2024 https://www.modernhealthcare.com/providers/private-equity-staffing-companies-physicians-envision-healthcare
AI in Medical Education: “AI Is the Future — If We Respect Its Limits and Our Own.
There is no doubt that assistive AI tools are the future, just as electronic medical records were in their day. When electronic medical records replaced handwritten or typed notes, many doctors grumbled, but they are now the norm. AI is already saving lives — predicting sepsis in patients , for example. Teaching and exposing trainees to the most effective technologies is important if we want the best possible healthcare, but not at the expense of establishing a sound medical foundation.
We live in exciting times, with technology expanding at warp speed. With great power comes great responsibility. Both developers and educators must tailor the AI tools to our trainees.”
Naga Kanaparthy, MD, MPH, Medical Education Needs Its Own AI Playbook | MedPage Today
Survey: Physicians’ Views on Healthcare Consolidation: Per the Physicians Foundation’s “2024 Survey of America’s Current and Future Physicians”:
- 7in 10 physicians and medical students, and at least 6 in 10 residents agree that consolidation is having a negative impact on patient access to high-quality, cost-efficient care.
- Negative impacts of mergers/acquisitions include job satisfaction (50%), quality of patient care (36%), independent medical judgment (35%) and patient healthcare costs (30%).
- Safeguards for consolidation identified by physicians, residents and medical students include preserving physician autonomy (90%), maintaining patient standards (87%), increasing transparency and disclosure (86%) and assessing long-term impact (84%).
The Physician’s Foundation, September 2024
AMA Study: Physician input in administrative decisions: AMA researchers analyzed the association of perceived work control by physicians with burnout and career intentions based on a survey of U.S. physicians conducted November 2022 and December 2023. Results:
“Among respondents, 61.4% (1318 of 2144) reported adequate control over patient load, 60.6% (1301 of 2144) adequate control over membership of their clinical team, and 61.3% (1434 of 2339) adequate control over workload. Adequate control over hiring of staff and clinical schedule were reported by 49.0% (772 of 1574) and 74.6% (1175 of 1574), respectively. Most respondents (58.3% [692 of 1186]) reported that they had sufficient authority/autonomy over that for which they are accountable. On multivariable analyses adjusting for personal and professional characteristics, poor control over patient load, team composition, clinical schedule, domains for which the physician is accountable, and workload were independently associated with burnout. Poor control over patient load and workload were each independently associated with ITR….
In this large, cross-sectional study, poor control over specific aspects of work was associated with burnout and intentions to reduce clinical effort or leave one’s organization. Efforts to reduce burnout and improve retention should consider how to provide physician control over appropriate aspects of their clinical work environment.”
Survey: Use of AI in Healthcare: Findings from Upvio’s survey on insights into patients’ and practitioners’ thoughts about AI and technology in healthcare:
- 94% of surveyed patients have used telehealth services
- 88% of patients expressed a preference for practitioners offering telehealth services
- 80% of practitioners believe technology is vital for their practice to thrive
- 60% of healthcare providers showed confidence in the current state of technology in their practice
- 40% of practices do not offer telehealth consultations
- 53% of patients trust AI-powered tools and technologies in their healthcare
- 97% of patients believe AI has tremendous benefits
- 32% of practitioners are not interested in using AI
- <14% of providers and patients find AI ineffective
upvio, State of AI and Technology Adoption in Healthcare, September 2024
Survey: Physician Burnout and Utilization Management: Researchers surveyed 7222 physicians working in outpatient settings recruited from a large, opt-in database. Results:
“Physicians indicated that utilization management procedures for prior authorization (81%), step therapy (79%), and nonmedical switching (69%) were major or significant barriers to their clinical and patient care. More than half (52%) reported spending 6 to 21 or more hours per week on paperwork related to health insurance utilization management, 67% had experienced burnout at some point in their careers, and 64% indicated that utilization management had been a contributing factor to feelings of burnout, with an additional 8% citing it as the main factor. Physicians favored streamlining prior authorization practice (77%), requiring step therapy to be based on science (73%), and ensuring that peer-to-peer reviews are done by qualified medical experts (67%).
These findings indicate that utilization management has a detrimental impact on physicians and patient care and contributes to physician burnout.”
Utilization Management and Physician Burnout Am J Manag Care. 2024;30(11):561-566. https://doi.org/10.37765/ajmc.2024.89626
Prescription drugs
White House proposes GLP-1 coverage in Medicare, Medicaid: Last Friday, the White House announced its plans to add GLP-1 coverage to Medicare. Under current law, Medicare is barred by Congress from covering drugs for weight loss. They’re covered only as an optional benefit on state Medicaid plans, and coverage varies by state. White House officials say they’re reinterpreting the statute by addressing obesity as a chronic condition rather than weight loss. Coverage would take effect in 2026, would expand access to drugs like Novo Nordisk’s Ozempic or Wegovy for 3.4 million Americans on Medicare and another 4 million on Medicaid who are obese.
FACT SHEET: Biden-Harris Administration Takes Latest Step to Lower Prescription Drug Costs by Proposing Expanded Coverage of Anti-Obesity Medications for Americans with Medicare and Medicaid November 26, 2024 https://www.whitehouse.gov/briefing-room/statements-releases/2024/11/26/fact-sheet-biden-harris-administration-takes-latest-step-to-lower-prescription-drug-costs-by-proposing-expanded-coverage-of-anti-obesity-medications-for-americans-with-medicare-and-medicaid
KFF Report: Anti-Obesity Drug Coverage in Medicare, Medicaid: ”The Biden administration has proposed to allow Medicare and require Medicaid to cover drugs used to treat obesity by reinterpreting the statutory language that currently prohibits coverage of drugs used for weight loss under Medicare and permits but does not require states to cover these drugs for weight loss under Medicaid. This reinterpretation reflects an evolution in the understanding of obesity as a disease and weight loss as conferring real health benefits in people with obesity rather than being merely for cosmetic purposes. It also comes amidst high and growing demand for and use of a relatively new class of highly effective, but also very expensive, drugs being used to treat obesity, known as GLP-1s.
Under current law, people on Medicare can get anti-obesity drugs covered by Part D, Medicare’s outpatient drug benefit, only if they are used for a medically accepted FDA-approved indication other than obesity, like diabetes or cardiovascular disease risk reduction. State Medicaid programs also have to cover these drugs for indications such as diabetes or cardiovascular disease risk reduction, but only 13 states currently cover these drugs for obesity treatment as well. These limitations on coverage in Medicare and Medicaid mean that millions of people who have obesity and might benefit from these drugs may be unable to access them due to their high prices. But even with these coverage limits in place, gross spending on these drugs for approved uses in Medicare and Medicaid has skyrocketed in recent years, totaling $4 billion in Medicaid in 2023 and close to $6 billion in Medicare in 2022 for selected GLP-1s.
The new Biden administration proposal would authorize Medicare and Medicaid coverage of anti-obesity medications for people with obesity but not people who are overweight. While coverage would be available for Medicare and Medicaid enrollees with obesity, Medicare Part D drug plans and state Medicaid programs could still apply utilization management tools such as prior authorization, which could limit access. According to the Centers for Medicare & Medicaid Services, the proposal would increase Medicare spending by $25 billion and Medicaid spending by $15 billion over 10 years (net of rebates) and would apply to around 3.4 million people with Medicare and 4 million people with Medicaid. Because Medicaid is jointly financed by the states and the federal government, CMS estimates the federal government would pay $11 billion and states would pay nearly $4 billion…”
46 Brooklyn Report: PBM Negotiated prices: 46 Brooklyn analyzed prices for 61 drugs negotiated by PBMs with standalone Part D and Medicare Advantage plans. Results:
“Some 61 drugs had monthly prices that diverged by at least $30,000, including a $223,037 range for a drug, called nitisinone and sold under the brand name Orfadin, treating a rare metabolic disorder. About 300 medicines had more than 1,000 monthly prices when the difference between the lowest price and the highest was more than $1,000. It didn’t matter that the same PBM was negotiating the prices. Prices varied widely among health plans, even if a plan used the same PBM. “
Middlemen negotiate widely different prices for prescriptions, depending on your Medicare insurance plan https://www.wsj.com/health/healthcare/medicare-pays-wildly-different-prices-for-the-same-drug-b20fa58c?mod=hp_lead_pos5
Weight loss market dominance by Lilly & Novo: “The obesity duopoly has been pierced as Amgen AMGN 1.00%increase; green up pointing triangle positions itself to have a drug on the market in a few years. While this adds competition to a market currently controlled by Eli Lilly LLY 0.91%increase; green up pointing triangle and Novo Nordisk, it also reinforces the dominance of the makers of Wegovy and Zepbound.
Amgen reported on Tuesday that its highly anticipated obesity-drug candidate, MariTide, helped patients shed around 20% of their body weight, though side effects such as nausea and vomiting were common. The company didn’t disclose detailed data, which is expected at a medical conference next year. If all goes well in a larger late-stage study, Amgen could have a drug on the market within a few years.
But what we already know suggests that Lilly and Novo Nordisk’s market leadership isn’t about to be upended. Not only did MariTide fail to outperform Lilly’s Zepbound, but both Lilly and Novo also have next-generation medications under development, with promising data showing even more impressive weight loss results.
Eli Lilly and Novo Nordisk’s Obesity Moat Just Got Stronger – WSJ November 30, 2024
Workforce
Biden nursing home staffing mandate likely to be thrown out: “Covid’s rampage through the country’s nursing homes killed more than 172,000 residents and spurred the biggest industry reform in decades: a mandate that homes employ a minimum number of nurses. But with President-elect Donald Trump’s return to the White House, the industry is ramping up pressure to kill that requirement before it takes effect, leaving thousands of residents in homes too short-staffed to provide proper care.
The nursing home industry has been marshaling opposition for months among congressional Republicans — and even some Democrats — to overrule the Biden administration’s mandate. Two industry groups, the American Health Care Association and LeadingAge, have sued to overturn the regulation, and 20 Republican state attorneys general have filed their own challenge. Consumer advocates, industry officials and independent researchers agree that the incoming administration is likely to rescind the rule, given the first Trump administration’s “patients over paperwork” campaign to remove “unnecessary, obsolete, or excessively burdensome health regulations on hospitals and other healthcare providers.” Among other things, Mr. Trump aided the industry by easing fines against homes that had been cited for poor care.”
Nursing Home Industry Wants Trump to Rescind StaffingMandatehttps://www.nytimes.com/2024/11/29/
Re: Economist on value of Master’s Degree training: “In America, close to 40% of workers with a bachelors also boast a postgraduate credential of some sort. In the decade to 2021, the number of postgraduate students there increased by 9% even as undergraduates fell by 15%. PhDs required by academics and long professional degrees of the sort needed by doctors and lawyers are becoming more popular. But Masters course account for most of the growth…Since 2000, the cost of postgraduate study in America has more than tripled in real terms…the median borrower now acquires around $50,000 in debt while completing their second degree—up from $34,000 20 years ago…More recently, the Institute of Fiscal Studies has investigated returns from master’s course…by the age of 35, masters graduates earn no more than those with a bachelor’s “.
The Economist November 23, 2024
