Newsletter – Health Action Network

Talking Points: 13 January 2025

Mon, 13 Jan 2025 19:57:00 GMT

A roundup of the issues driving the healthcare conversation with data and insights to support you as a Health Action Network advocate.

Week in Review

RX PRICES Drug companies raise prices on hundreds of products.

Quick takeaway: Drug companies kicked off the New Year by hiking prices on over 250 drugs.

Digging deeper: According to a new analysis, the median price increase comes in at 4.5 percent , well over the 2.7 percent rate of inflation. The drugs included in this first wave of price hikes include COVID treatments and vaccines.

Pfizer raised prices for the most products on the list at over 60 drugs. Elsewhere, Bristol Myers raised the prices on a pair of its already expensive cancer cell therapies by 6 percent and 9 percent, respectively.

A separate report released last month took a closer look at five widely used prescription medicines that had undergone significant price increases in 2023, totaling $815 million without any improved clinical value.

MEDICARE ADVANTAGE Cuts to Medicare Advantage impact millions of seniors.

Quick takeaway: Data shows that two successive years of cuts to the Medicare Advantage (MA) program have increased costs and reduced benefits for seniors enrolled in MA plans across the country.

Digging deeper: Several recent analyses underscore the impact of these cuts:

Fewer options
- Over 60 percent of Medicare beneficiaries now live in counties with fewer MA plans in 2025 than in 2024
- Almost 2 million MA enrollees were forced to choose new coverage for this year
Higher out-of-pocket costs
- At least 18 states saw more than a 10 percent increase in average MA premiums
- The median maximum out-of-pocket levels are up 8 percent from last year
Reduced supplemental benefits
- The share of general enrollment plans offering an over-the-counter benefit fell from 86 percent last year to 73 percent in 2025
- Offerings of nutritional benefits decreased from 40 percent of general enrollment plans to fewer than 30 percent

What it means: 33 million Americans – 54 percent of Medicare-eligible enrollees – now choose MA for its unique focus on coordinated care and whole health. Unfortunately, these cuts threaten the comprehensive blanket of care that so many of them have come to depend on.

HEALTHCARE COSTS Unnecessary back surgeries cost Medicare hundreds of millions of dollars annually.

Quick takeaway: A recent analysis discovered that more than 200,000 common back procedures performed on Medicare patients met the criteria for overuse and are estimated to have cost the program and taxpayers around $2 billion over a three-year period.

Digging deeper: The study underscores the cost of waste, fraud, and abuse throughout our healthcare system – costs that are ultimately shouldered by consumers, families, employers, and plan sponsors. It’s estimated that as much as $935 billion – approximately one-quarter of all healthcare spending – goes to waste each year. Additionally , up to:

$240.5 billion is the result of pricing failures
$165.7 billion is the result of failure of care delivery
$101.2 billion is the result of overtreatment or low-value care

As much as $78.2 billion is also estimated to be due to failure to properly coordinate care, which results in unnecessary admissions or avoidable complications and readmissions.

What it means: Researchers point to the work already being done by health plans to ease the administrative complexity that’s largely to blame for waste, fraud, and abuse. These efforts include a focus on transitioning our healthcare model away from fee-for-service and towards value-based care, reinforcing the historically validated role that insurers play in working to better control healthcare costs.

The Health Action Network includes everyday Americans—families, workers, businesses, patients, providers, neighbors, and friends. We are working together because we support market-based solutions that offer better healthcare choices and help build a stronger economy. The Health Action Network is an Elevance Health , Inc., initiative.

Talking Points: 9 December 2024

Fri, 06 Dec 2024 15:56:00 GMT

A deeper dive on an issue driving the healthcare reform conversation.

Week in Review

MEDICARE ADVANTAGE Seniors feel the impact of back-to-back years of cuts to Medicare Advantage.

Quick takeaway: Two years of cuts to the Medicare Advantage (MA) program have led to fewer options, higher costs, and reduced supplemental benefits.

Digging deeper: 33 million American seniors – more than half of the eligible Medicare population – now choose MA plans over original Medicare.

Unfortunately, data shows that successive years of cuts to the program have taken a considerable toll on MA, specifically:

Beneficiaries are now left with fewer options to choose from, with some even losing their current coverage as a result of their MA plans having exited the market:
- Over 60 percent of enrollees live in counties with fewer plan options in 2025 compared to 2024
- More than 7 percent of enrollees (almost 2 million seniors) will be forced to choose a new coverage option for 2025
- The number of MA plans offering prescription drug coverage (MA-PDs) decreased by 6 percent for 2025
Beneficiaries in some states will see significant premium increases, with cost-sharing also increasing for others:
- The average premium will increase more than an average of 10 percent in at least 18 states
- The median maximum out-of-pocket levels will increase by 8 percent next year
- The average deductible for MA-PDs will more than double from $103 in 2024 to $269 in 2025.
While the vast majority of MA plans will continue to include dental, vision, and hearing coverage, payment cuts have reduced other supplemental benefit offerings:
- The share of plans making an over-the-counter benefit available will drop from 86 percent this year to 73 percent next year
- Plans offering nutrition benefits will decrease from 40 percent to 30 percent
- Special Needs Plans serving specific enrollee populations, such as those dually eligible for Medicare and Medicaid or individuals with chronic diseases like diabetes or heart disease, will offer reduced benefits in 2025, including less access to medical nutrition therapy and in-home supports.

What it means: Despite these challenges, seniors continue to choose MA in growing numbers, pointing to the program’s ability to deliver enhanced services, increased access to care, and better value.

This focus on coordinated care enables MA plans to not only outperform original Medicare, but deliver savings for beneficiaries and the government, while serving historically disadvantaged communities.

It’s no wonder the program enjoys such broad bipartisan support.

Talking Points: 25 November 2024

Fri, 22 Nov 2024 17:09:00 GMT

A quick roundup of the issues driving the healthcare reform conversation.

Week in Review

Rx PROFITS Drugmakers enjoy profit margins well above the rest of the drug supply chain.

Quick takeaway: Big Pharma’s price-gouging and patent abuse playbook fuels astronomical profits.

Digging deeper: A new report shows the pharmaceutical industry’s profit margins are ten times higher than other sectors of the prescription drug supply chain.

Stakeholders cite a number of reasons contributing to the industry’s ability to reap such enormous profits, including:

Gaming the patent system to block competition
Hiking prices at rates significantly outpacing inflation
Setting increasingly out-of-control launch prices for new products
Falsely claiming that solutions to lower prices could impede innovation

What it means: By manipulating the market, Big Pharma protects its profit margins, all while blaming others for why drugs cost so much.

One drugmaker even went so far as to tout the success of its patent strategy to prevent competition and extend its monopoly on its portfolio of life-saving HIV drugs.

PBM VALUE Employers value their pharmacy benefit managers (PBMs).

Quick takeaway: Employers appreciate PBMs’ transparency and their ability to lower prescription drug costs.

Digging deeper: A new survey of 700 employers finds that employers are overwhelmingly satisfied with their PBMs :

Contract Clarity: 90 percent believe their PBMs are transparent
Cost-Effectiveness: 88 percent are satisfied with their PBMs’ ability to provide the lowest costs for their employees
Risk Management: 87 percent appreciate how their PBMs help manage risk and better predict their drug costs
Negotiations and Savings: 86 percent are happy with their PBMs’ ability to negotiate discounts from drugmakers and generate savings

Employers also value the flexibility provided by their PBMs in designing coverage options that prioritize employee costs and access.

What it means: Experts are calling for a more nuanced conversation about the critical role that PBMs play in connecting consumers to safe, affordable prescription drugs.

A new piece in the Journal of Managed Care + Specialty Pharmacy argues that casting PBMs as solely responsible for high drug prices is unconstructive, reminding policymakers that PBMs emerged out of the need to facilitate patient access to medicines at an affordable cost.

HOSPITAL COMPLIANCE Hospital price transparency decreases.

Quick takeaway: The percentage of hospitals complying with federal price transparency rules has fallen this year.

Digging deeper: As featured last week , hospitals continue to ignore rules requiring them to make prices for common medical procedures available to consumers. New data shows that compliance is actually getting worse and that lax enforcement is partly to blame.

In February of this year, more than 34 percent of hospitals were found to be compliant with the transparency rules. That number has now dropped to just 21 percent .

What it means: The rules, which came into effect in 2021, were intended to give consumers an easy way to compare prices between hospitals.

Hospitals’ noncompliance in making their prices transparently available leaves patients unable to obtain meaningful data on how much treatments cost.

PATIENT SAFETY Value-based care provides a pathway to greater patient safety.

Quick takeaway: By building quality measures into reimbursement agreements, stakeholders can drive better health outcomes.

Digging deeper: A growing focus on patient safety has led to several large-scale strategic initiatives in recent years, including:

Building systems for standardized definitions
Detecting and measuring hospital-acquired harms
Changes in payment policies
Implementation of best practices
Pay-for-performance programs

However, despite efforts to improve quality, adverse events still occur – many of which are entirely preventable.

A recent article highlights the persistent challenges to building patient safety measures into value-based contracts, such as the quality of reporting and the inherent conflict of interest when provider-reported data is used as a basis for payment.

What it means: Better integrating improved patient safety measures into our evolving healthcare system requires sustained and productive collaboration between health plans and providers, underpinned by a larger commitment from all stakeholders.

*****

Talking Points: 18 November 2024

Mon, 18 Nov 2024 14:41:00 GMT

A quick roundup of the issues driving the healthcare reform conversation.

Week in Review

HOSPITAL TRANSPARENCY Hospitals still aren’t compliant with federal price transparency rules.

Quick takeaway: Just under half of hospitals fail to comply with rules requiring them to make their standard charges available to consumers.

Digging deeper: Since 2021, hospitals have been required to post negotiated rates for common medical services and procedures online in a push to make healthcare prices more transparent.

But, according to a new report from the Department of Health and Human Services Office of Inspector General, about 46 percent remain noncompliant with the rules.

What it means: It’s still unclear how the rules affect market dynamics, since the data has yet to translate into lower patient costs. But, researchers point to signs of progress .

NONPROFIT HOSPITALS Physicians call for greater oversight of nonprofit hospitals.

Quick takeaway: Last week the American Medical Association (AMA) voted to hold nonprofit hospitals accountable for the level of charitable care they provide.

Digging deeper: Nonprofit hospitals enjoy broad tax exemptions in exchange for providing charity care and investing in their communities. However, tax codes and state laws allow these systems significant flexibility in how they measure the level of charity care they provide.

This inconsistency has resulted in 80 percent of hospitals giving back less to the communities they serve than they receive in tax breaks. In fact, these combined “fair share” deficits are estimated to be as high as $25.7 billion.

What it means: The AMA is now pushing for stronger government oversight of community benefit requirements for nonprofit hospitals, including penalties or the loss of tax-exempt status for noncompliance.

HEALTHCARE DOLLAR Hospital costs make up a disproportionate share of overall healthcare spending.

Quick takeaway: More than 40 cents of every healthcare dollar spent goes to hospitals.

Digging deeper: According to a newly updated analysis :

19.9 cents of every healthcare dollar goes to outpatient hospital costs (not including emergency care)
17.6 cents of every healthcare dollar goes to inpatient hospital costs
3.2 cents of every healthcare dollar goes to emergency room costs

In terms of overall provider spending:

11.6 cents of every healthcare dollar goes to doctor visits
7.1 cents of every healthcare dollar goes to other outpatient care, such as that delivered outside of hospitals or doctor offices

(Not to be discounted – prescription drugs account for nearly a quarter of total spending at 24.2 percent.)

What it means: When totaled up, nearly 60 cents of every healthcare dollar spent in the U.S. goes to providers.

CONSUMER CHOICE Open enrollment on the health insurance exchange Marketplace is underway.

Quick takeaway: Consumers have until 15 December to choose a health plan for themselves and their families for coverage to begin at the start of the New Year. (Anyone enrolling after that, but before 15 January, would have to wait till 1 February for the benefits to kick in.)

Digging deeper: Marketplace enrollment began at the start of November, giving Americans just over six weeks to select affordable, high-quality health coverage:

More than 21 million Americans choose to enroll through the Marketplace
Eight out of ten shoppers can select a plan for less than $10 a month after tax credits
97 percent of enrollees have more than seven plans to choose from

What it means: The Marketplace remains highly competitive, providing a record number of Americans access to stable, affordable, and good quality health coverage. That’s why it’s so important that lawmakers protect this option.

Talking Points: 11 November 2024

Fri, 08 Nov 2024 17:29:00 GMT

A quick roundup of the issues driving the healthcare reform conversation.

Week in Review

HOSPITAL PRICES Hospital prices have increased at more than twice the rate of inflation since 2000.

Quick takeaway: These prices have led to substantially higher profits for hospitals.

Digging deeper: A new study shows that between 2000 and 2022, hospital service prices surged more than 220 percent .

While these price increases reflected slightly higher costs for these health systems, the primary result was increased revenues and profits.

What it means: Hospitals have claimed that higher prices were necessary due to labor shortages from the coronavirus pandemic. But, the research shows that hospital prices had been rising faster long before the COVID public health crisis.

Rx PRICES Drugmakers are solely responsible for what their products cost.

Quick takeaway: Stakeholders remind lawmakers and regulators that the pharmaceutical industry alone bears responsibility for drug prices.

Digging deeper: Drug manufacturers have worked hard to deflect blame for out-of-control prescription drug prices, pointing to others along the supply chain, such as pharmacy benefit managers (PBMs).

One of the ways they do this is by deploying anti-competitive practices , like abusing the patent system to prevent more affordable alternatives from coming to market.

What it means: PBMs negotiate with drugmakers to lower drug costs for their customers. But, since those same drugmakers ultimately set the list price for those products, there can be little progress unless these companies first address those high prices.

MEDICARE ADVANTAGE Growth in Medicare Advantage is associated with lower overall spending in the Medicare program.

Quick takeaway: Increased enrollment in Medicare Advantage (MA) has contributed to lower than expected Medicare spending over the past decade.

Digging deeper: A new report details the relationship between MA enrollment growth and total Medicare spending. According to the analysis, increased enrollment in MA plans from 2012 to 2021 was estimated to generate savings in total Medicare spending of as much as $144 billion.

What it means: Given the scale of Medicare spending and the program’s solvency issues, there’s ongoing interest in understanding how to slow those spending trends.

At the same time, as covered last week , successive years of cuts to the MA program have exposed Medicare-eligible beneficiaries to the threat of higher costs, reduced access, and fewer benefits next year.

Rather than undermine the program with further cuts and other harmful changes, stakeholders are calling on policymakers to protect MA and provide greater stability for the millions of older adults and people with disabilities who depend on it.

Talking Points: 4 November 2024

Fri, 01 Nov 2024 18:39:00 GMT

A deeper dive into an issue driving the healthcare reform conversation.

Week in Review

VALUE OF MEDICARE ADVANTAGE The Medicare Advantage program provides critical value to more than 33 million American seniors.

Quick takeaway: Despite outperforming original Medicare Fee-for-Service (FFS) across a wide range of important metrics, Medicare Advantage (MA) continues to find itself under attack.

Digging deeper: MA plans prioritize care coordination, delivering better value than FFS in several ways:

Costs: MA beneficiaries spend over $2,500 less per year than those in FFS.
Quality: MA outperforms FFS on multiple quality metrics , including cancer screenings, heart health, diabetes, and rheumatoid arthritis.
Demographics: MA serves seniors from historically underserved populations , including 69 percent of Latino beneficiaries, 65 percent of Black beneficiaries, and 60 percent of Asian beneficiaries.

MA also offers seniors access to supplemental benefits , which are linked to better health outcomes and improved healthcare utilization.

When compared to FFS, not only do MA plans provider higher quality of care, they also facilitate better use of critical preventive services , which can improve health and lower costs in the long term.

The MA program also plays a key role in addressing health disparities and promoting health equity .

Financially, research shows that every dollar spent by the government on MA provides beneficiaries with lower cost-sharing and additional benefits compared to FFS. In fact, if FFS were as efficient as MA, the life of the Medicare program could be extended by as much as 17 years .

What it means: Unfortunately, recently released data paints a concerning picture of the current state of MA.

Successive years of cuts and other changes to the program leave millions of American seniors facing an uncertain environment during this year’s Open Enrollment period, which runs through 7 December:

Fewer Plans: Plan availability decreased by over 6 percent compared to last year, with 1.3 million beneficiaries currently enrolled in plans that will no longer be available.
Higher Costs: The median out-of-pocket maximum will increase by 8 percent next year, while seniors in 19 states will see their premiums go up by more than 10 percent.
Reduced Benefits: Many of the benefits that seniors rely on, such as fitness programs, in-home support services, meals, and transportation, will be reduced.

Call to Action: Given the ongoing threats to the program, lawmakers and regulators need to hear from beneficiaries about the importance of Medicare Advantage. Stay alert for ways to engage.

In the meantime, we’re always looking for “MA Champions” who are willing and wanting to do more to defend the program – so, be sure to let us know if you want to help protect Medicare Advantage.

Talking Points: 28 October 2024

Fri, 25 Oct 2024 15:20:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

HOSPITAL CONCENTRATION I Hospital consolidation linked to consumer medical debt.

Quick takeaway: A new analysis finds persistent medical debt in markets with high hospital market concentration.

Digging deeper: Forty percent of Americans carry some form of medical debt. As health systems merge and large hospitals gobble up smaller, independent ones, there’s growing concern that this problem is only going to get worse.

Research has established that hospitals raise prices when they gain market power. As these large systems get even larger, patients have fewer options and face higher prices, leading to delayed care, worse outcomes, and even higher levels of medical debt.

What it means: While researchers acknowledge that other issues, such as chronic illness, can also contribute to rising medical debt, the data points to the need for greater scrutiny of hospitals’ growing market power. As one of the study’s authors put it, “Limiting hospital consolidation could be beneficial for consumers in limiting medical debt.”

HOSPITAL CONCENTRATION II How one hospital took over an entire region – and, what happened to prices.

Quick takeaway: Parkview Health ranks among the most expensive facilities in the country.

Digging deeper: A recent article highlights the impact that hospital market concentration can have on the communities they serve, in this case Fort Wayne, Indiana, which currently holds the top spot as the most affordable place to live in the U.S.

That community, however, is dominated by Parkview, a sprawling, not-for-profit hospital system, also headquartered in Fort Wayne, which has ranked among the top 10 percent of most expensive hospitals in the country in 10 of the past 13 years.

According to the article, by buying out its rivals, Parkview has exploited its market dominance to keep patients within their system and direct them to potentially higher-cost procedures and types of care.

What it means: This example adds to the growing narrative that hospital market consolidation leads to price increases. In fact, research has shown that prices can rise as much as 65 percent, and that hospitals may charge up to 50 percent more due to mergers.

MEDICARE ADVANTAGE New analysis details the impact of policy changes to the Medicare Advantage program.

Quick takeaway: Millions of seniors face disruption to their care as Medicare Open Enrollment gets underway.

Digging deeper: As featured last week, successive years of cuts to Medicare Advantage (MA) have resulted in changes to the program that leave beneficiaries exposed to higher costs and reduced benefits. According to a recent analysis :

MA plan offerings will decrease by 6.5 percent next year
Median out-of-pocket maximum will increase by 8 percent in 2025
Fewer plans will offer certain supplemental benefits, such as meals (6 percent decrease), nutrition services (11 percent decrease), and transportation (7 percent decrease)

What it means: More than half of the Medicare eligible population is now enrolled in MA, meaning millions face uncertainty in what their plans will cost, what benefits they offer, and, in some cases, whether that plan will even be available anymore.

VIRTUAL CARE Consumer demand for virtual care increases.

Quick takeaway: The increased demand comes as systems struggle to keep up.

Digging deeper: In the immediate wake of the coronavirus public health crisis, virtual care provided a critical access point for patients seeking medical services.

As consumer comfort with the technology grew, so did demand. In fact, according to a new survey , nearly a quarter (24 percent) of consumers go so far as to say they’d be willing to switch doctors if it meant being able to access virtual health options.

Despite this demand, many health systems find their organizational priorities misaligned with this growing consumer need, with some reducing or discontinuing their virtual health offerings altogether.

What it means: With consumers pointing to convenience and cost as driving their embrace of virtual care, experts caution that health systems failing to match evolving patient expectations and demand for digital health, run the risk of being left behind.

Spotlight

Talking Points: 21 October 2024

Fri, 18 Oct 2024 14:11:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Seniors at risk of disruptions to Medicare Advantage.

Quick takeaway: Back-to-back years of cuts to the Medicare Advantage (MA) program threaten beneficiaries with fewer choices, higher costs, and reduced benefits.

Digging deeper: With Open Enrollment now underway, millions of American seniors are now able to shop for Medicare Advantage plans. Unfortunately, stakeholders are warning that what they’ll find could look different from what they’re used to.

While MA plans have worked to shield seniors from the full impact of these cuts, analysis of recently released data from the Centers for Medicare & Medicaid Services (CMS) spells out exactly how those cuts have reshaped the market. For instance:

About 1.3 million Americans are enrolled in MA plans that will not be available next year.
Over 60 percent of Medicare-eligible beneficiaries will have fewer plans available.
Seniors in 19 states will see premium increases of more than 10 percent in 2025.

What it means: More than 33 million Americans choose MA plans because it provides them better care at lower cost than original Medicare. But, successive years of cuts now expose them to changes to their coverage that many might not be prepared for.

PBM VALUE New economic analysis shows how PBMs deliver value.

Quick takeaway: The report counters the false narrative that pharmacy benefit managers (PBMs) are to blame for out-of-control prescription drug prices.

Digging deeper: Despite the heated rhetoric targeting them, experts continue to point out that PBMs play a critical role in helping consumers better manage drug costs. According to the new analysis:

PBMs pass through nearly 100 percent of manufacturer rebates and fees to their customers.
There is no evidence that the list price for rebated drugs is higher than that for non-rebated drugs.
The number of independent pharmacies grew by over 9 percent from 2011 to 2021.
Independent pharmacies receive higher reimbursement rates than unaffiliated chain pharmacies.

What it means: Drugmakers have shifted blame for high drug prices to others along the supply chain, while continuing to deploy egregious pricing practices, including astronomical list prices for new treatments and exploiting patent loopholes to set and keep prices artificially high and block competition.

MEDICAID Rx Drug utilization and spending in Medicaid are increasing.

Quick takeaway: A new report highlights how drug spending in the Medicaid program has increased 72 percent since 2017.

Digging deeper: Prescription drugs account for about 6 percent of total Medicaid spending. But, that spending is on the rise, thanks to the emergence of new, high cost obesity medications and cell and gene therapies.

In 2017 net spending in Medicaid on drugs totaled $30 billion. By last year, that spending had ballooned to $51 billion. The overall number of prescriptions in the program has also been rising since 2020.

What it means: Millions of Americans depend on the Medicaid program for their care, including expectant mothers and those needing mental health support. Increased spending on prescription drugs strains resources and jeopardizes access to the care so many depend on.

CONSUMER TRUST Public trust in physicians and hospitals decreases.

Quick takeaway: A new survey details a growing level of consumer distrust in providers.

Digging deeper: While undercurrents of distrust in medicine are nothing new, in the wake of the COVID public health crisis, the level of trust in physicians and hospitals has seen a precipitous drop .

A nationwide poll published in JAMA Network shows that trust fell from 70.1 percent in April 2020 to 40.1 percent in January of this year.

What it means: Researchers attribute the decline in consumer trust to financial concerns . A quick scan of the headlines doesn’t do much to increase that trust, with nonprofit hospitals failing to honor their charity care obligations , and with health systems across the country continuing to fail to comply with price transparency rules, while suing patients for unpaid medical bills.

Spotlight

Talking Points: 14 October 2024

Fri, 11 Oct 2024 13:27:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Seniors depend on Medicare Advantage.

Quick takeaway: Successive years of cuts and negative policy changes to Medicare Advantage (MA) may disrupt the care beneficiaries are used to.

Digging deeper: With Open Enrollment for Medicare set to open tomorrow, there’s growing concern about changes to benefits, costs, and access after cuts to MA plans’ reimbursement rates were finalized earlier this year.

Already, the Centers for Medicare & Medicaid Services (CMS) quietly announced that each U.S. county will have an average of 34 MA plans for beneficiaries to choose from, down from an average of 43 plans this year.

What it means: Rising healthcare costs are putting pressure on American budgets across the country – especially for Medicare-eligible Americans, many of whom live on fixed incomes.

That’s why stakeholders are sounding the alarm over threats to Medicare Advantage’s affordability and access.

HOSPITAL TRANSPARENCY Hospital price transparency data needs improvement.

Quick takeaway: The Government Accountability Office (GAO) wants CMS to improve hospital price transparency compliance.

Digging deeper: A new report GAO report shows CMS fails to routinely check required, publicly posted hospital pricing data for completeness or accuracy, making the information less useful for consumers.

In interviews with more than a dozen stakeholder groups representing patients, payers, and researchers, a number of problems were flagged regarding the data posted by hospitals, including inconsistent file formats and pricing complexities, in addition to incomplete and inaccurate data sets.

What it means: GAO also found that CMS enforcement of the price transparency rules remains a challenge, with many hospital systems across the country, including in Illinois , Iowa , and Tennessee , being noncompliant.

MEDICAID Rx Clinically integrated care improves Medicaid enrollees’ health.

Quick takeaway: Outcomes-based contracts between pharmacists and pharmacy benefit managers (PBMs) positively impact pharmacy-related outcomes for Medicaid patients with higher healthcare needs.

Digging deeper: A new brief from Elevance Health’s Public Policy Institute highlights how value-based payment arrangements in pharmacy, designed to compensate healthcare providers for improving health outcomes and reducing medical services utilization, have improved Iowa’s Medicaid program.

By expanding their clinical services beyond medication dispensing and adherence to include medication therapy review, patient health education, and counseling, pharmacists – in coordination with their PBM partners – are playing an increasingly critical role in patient care management.

What it means: This integrated approach has not only resulted in a favorable change in utilization, but improved the quality of care being delivered, while reducing costs for patients with chronic conditions.

Spotlight

Talking Points: 7 October 2024

Fri, 04 Oct 2024 15:07:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

CONSOLIDATION Hospital consolidation continues to dramatically reshape healthcare delivery.

Quick takeaway: Nearly half of all metropolitan areas in this country are now controlled by one or two large health systems.

Digging deeper: According to a new study , inpatient care was solely dominated by one or two hospital systems in 47 percent of metropolitan areas. Other takeaways include:

In 82 percent of these areas, one or two health systems controlled more than 75 percent of the market
19 percent of metropolitan areas were dominated by a single health system
Almost every area (97 percent) had highly concentrated markets for inpatient hospital care

What it means: Approximately one-third of all health spending in the U.S. goes towards hospital care alone. And, with data showing that consolidation in the industry leads to higher prices , there’s growing alarm that that share of overall spending is only going to go up.

Rx PATENTS Drugmakers exploit the patent system to block competition.

Quick takeaway: By manipulating patents on existing drugs, pharmaceutical manufacturers keep lower cost alternatives from entering the market.

Digging deeper: Specifically, drugmakers have increased the number of “use codes” (brief descriptions of a type of patent claim) they submit to the Food and Drug Administration’s (FDA) Orange Book, which serves as a resource listing for all the patents secured by manufacturers for FDA approved products.

By submitting multiple use codes for specific products, brand-name drugmakers make it exceedingly difficult for would-be generic rivals to successfully challenge these patents.

A new analysis found that, since 2017, the total number of use codes for all patents in the Orange Book grew 35 percent. Further, between 2001 and 2017, that number increased 521 percent.

What it means: By preventing competitors from bringing lower-cost generic alternatives to market, drugmakers are able to protect their profits, while driving up costs for consumers.

Rx PATIENTS The majority of older Americans now take a prescription drug.

Quick takeaway: Nearly nine out of ten adults over 65 in the U.S. took a prescription medicine between 2021 and 2022.

Digging deeper: Whether for conditions like heart disease, arthritis, or diabetes, an estimated 89 percent of older adults rely on medications to manage their health. But, more of them are finding it harder to afford them.

According to a 2019 poll , approximately one-quarter of Americans age 65-plus reported difficulty affording their prescription drugs. A separate study from last year found that one in five don’t take their medication as prescribed due to cost. And, just this year, another survey showed that nearly half of all adults over the age of 50 have skipped filling a prescription – or know someone who has – because they couldn’t afford it.

What it means: Rising drug costs impact patients’ ability to access the medicines they need. This lack of medication adherence can have serious consequences for the nearly two-thirds of Americans who fail to take their medicines as prescribed, including worsening symptoms, risk of hospitalization, and increased healthcare costs.

MA VALUE Medicare Advantage plays an increasingly critical role in safeguarding the future of Medicare.

Quick takeaway: The Medicare Advantage (MA) program has distinguished itself from original Medicare Fee-for-Service (FFS) by offering beneficiaries access to enhanced care coordination – including supplemental benefits – while saving them and the government money.

Digging deeper: With 35 million American seniors – more than half of all eligible beneficiaries – projected to be enrolled in MA plans next year, it’s clear that the program is as popular as ever. Here are a few reasons why:

On average, MA beneficiaries save $2,500 annually compared to those enrolled in FFS
38 percent of seniors enrolled in MA plans live on annual incomes of $25,000 or less
MA enrollees have fewer readmissions, fewer preventable hospitalizations, and lower rates of high-risk medication use than FFS enrollees

Research has also established that the life of the Medicare program could be extended up to 17 years if FFS were used at the same level as MA.

What it means: With Open Enrollment starting next week, eligible beneficiaries have the option to select between MA and FFS – and, as the data shows, more seniors are choosing MA plans. That’s why it’s so important that lawmakers protect the program for future generations.

Spotlight

Talking Points: 30 September 2024

Fri, 27 Sep 2024 15:31:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

CONSOLIDATION A closer look at how hospital consolidation impacts prices and quality.

Quick takeaway: When a large hospital system acquires an independent facility, not only do prices go up, but quality may also be impacted.

Digging deeper: According to a new study , after an independent hospital is acquired by a corporatized hospital system, profitability goes up, partly because prices are increased , but primarily as a result of staffing cuts. Those reductions led to an increase in readmission rates, an indicator of decreasing quality.

What it means: Reduced costs don’t automatically translate into greater affordability, as these savings only matter if they actually benefit health plans and consumers, which the research fails to establish.

FEES Patients still getting blindsided by hidden charges.

Quick takeaway: Hospitals continue to charge “ hospital facility fees ” for routine services delivered in non-hospital settings.

Digging deeper: Hospitals argue that facility fees are necessary in order to cover the cost of operating full-service, 24/7 facilities, including staff, equipment, utilities, maintenance, and security.

Increasingly, though, these same systems have been tacking on facility fees for services at smaller clinics and outpatient centers they own, which usually aren’t located close to the main hospital campus.

What it means: Consumers are already facing higher prices for services delivered at hospital-owned outpatient departments. The burden is only worsened as large hospital systems keep acquiring smaller clinics, physician groups, urgent care facilities, and imaging centers.

WEIGHT-LOSS Rx PBMs help patients navigate the weight-loss drug journey.

Quick takeaway: The exploding market for breakthrough weight-loss drugs threatens to overwhelm our healthcare system.

Digging deeper: As previously covered , stakeholders across the healthcare spectrum have been raising the alarm over what the cost of covering expensive GLP-1 drugs for weight loss threatens to do to healthcare spending in this country.

The combination of unprecedented demand, high prices, and lack of competition for these drugs, presents numerous challenges for consumers. But, thanks to where they sit in the drug supply chain, pharmacy benefit managers ( PBMs ) are uniquely positioned to help consumers better manage these challenges.

What it means: PBMs leverage their expertise to actively support health plans, employers, and government programs that cover GLP-1 drugs for weight loss. For instance, making available behavioral support programs aimed at helping patients make permanent lifestyle changes related to obesity, while providing clients with options for coverage, financial predictability, and clinical care solutions to help ensure appropriate use of treatments.

By offering comprehensive programs to ensure the right patients access GLP-1 drugs for weight loss, in addition to supplemental services that help optimize health outcomes, PBMs are able to better meet the diverse needs of the customers they serve.

MATERNAL HEALTH Late Medicaid enrollment during pregnancy increases the risk of adverse maternal health outcomes.

Quick takeaway: Having continuous access to care is critical for timely prenatal care and diagnosis of conditions to promote healthy delivery, birth, and postpartum outcomes.

Digging deeper: A new study from Elevance Health’s Public Policy Institute details the important role that Medicaid plays in maternal and infant health. Specifically, the study looks at the impact of enrollment timing in the program during pregnancy on maternal health outcomes in addition to risk of mortality after birth.

The findings suggest that delayed enrollment in a Medicaid managed care plan (third trimester vs. first trimester enrollment) is associated with a greater risk of all-cause maternal and infant mortality, despite third trimester enrollees appearing healthier during pregnancy.

Overall, earlier enrollment in a Medicaid plan can support diagnosis and care management for conditions associated with the risk of adverse outcomes during pregnancy and delivery.

Other research has shown that an estimated 60 percent of pregnancy-related maternal deaths are preventable, with access to prenatal care being a contributing factor. Additionally, that lack of prenatal care is also associated with higher infant mortality rates.

What it means: Stakeholders have been highlighting the importance of a strong Medicaid program in meeting the unique and diverse needs of millions of Americans, including expectant mothers.

Spotlight

Talking Points: 23 September 2024

Fri, 20 Sep 2024 15:44:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

CHARITY CARE Large hospitals fall short of their community benefit obligations.

Quick takeaway: In order to maintain their tax-exempt status , nonprofit hospitals are required to provide charity care and make investments to improve the health of the communities they service.

Digging deeper: The purpose of this community benefit requirement is to ensure that these nonprofit organizations are providing value that’s at least equal to the tax breaks they enjoy. But, federal law fails to specify how much charity care they should provide, nor what qualifies.

It should come as no surprise, then, that the vast majority of nonprofit hospitals give back less to their communities than they receive in tax breaks.

What it means: Data from earlier this year showed that more than 1,900 nonprofit hospitals (80 percent) had “fair share” deficits, meaning the value of their community contributions fell short of the value of their tax breaks.

PBMs Employers depend on their pharmacy benefit managers (PBMs) to better manage rising prescription drug costs.

Quick takeaway: According to a survey of employers, the vast majority value their PBMs and the range of contract options they provide in helping them control their pharmacy benefit spend for their employees.

Digging deeper: Over the past two years, drug spending has increased to more than a quarter ( 27 percent ) of companies’ overall healthcare spend.

And, as recently covered , employers’ healthcare costs are only projected to go up next year, driven primarily by the cost of expensive breakthrough weight-loss drugs and cell and gene therapies.

That’s why PBMs have become such a critical player in the prescription drug space, as they work to drive affordability on behalf of employers .

What it means: Given the increased legislative and regulatory scrutiny of PBMs, stakeholders are rushing to defend the importance of competition (which PBMs foster), rather than government overreach , in addressing out-of-control prescription drug costs.

HEALTH DISPARITIES Medicaid plays a critical role in addressing racial health disparities.

Quick takeaway: Given the wide and diverse populations served by Medicaid, it’s hard to overstate just how valuable the program has become in the larger effort to promote health equity .

Digging deeper: More than 86 million Americans are now served by the Medicaid program, easily making it the single largest source of health coverage in the country. That total includes millions of children, older Americans, people with disabilities, and 2 million veterans.

Medicaid has also become an essential source of coverage for historically underserved populations, including American Indian and Alaska Native (AIAN), Black, Hispanic, and Native Hawaiian and Other Pacific Islander (NHOPI) communities.

What it means: With this kind of reach into so many diverse communities, Medicaid and the managed care organizations that administer the program help to reduce racial health disparities by increasing access to health coverage – like enhanced pregnancy and postpartum services and expanded mental health services – and by offering innovative initiatives to advance health equity – like providing services focused on health-related social needs.

MEDICARE ADVANTAGE A new report offers a comprehensive look at the state of the Medicare Advantage program.

Quick takeaway: With Medicare open enrollment less than a month away, stakeholders highlight the value of Medicare Advantage (MA).

Digging deeper: The MA program continues to distinguish itself from original Medicare Fee-for-Service (FFS) by virtue of its coordinated care model and focus on supplemental benefits . As a result, nearly 34 million Americans are now enrolled in MA plans – 55 percent of the Medicare-eligible population.

Additional takeaways from the report include:

Enrollment in MA has doubled over the last decade
40 percent of eligible Medicare beneficiaries in rural counties are enrolled in MA plans
Access to MA plans is near universal (99.7 percent)
99 percent of MA plans offer at least one supplemental benefit

What it means: As touched on, it’s this inclusion of supplemental benefits in MA that’s helped set it apart from FFS. These offerings are unique to the program and can help address gaps in FFS.

Supplemental benefits have historically included traditional medical benefits, such as dental, vision, and hearing, but have recently expanded to include services that support health-related social needs, such as access to nutritious food and transportation.

Spotlight

Talking Points: 16 September 2024

Fri, 13 Sep 2024 14:51:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

Rx COSTS Drugmakers bear sole responsibility for out-of-control prescription drug prices.

Quick takeaway: Despite their efforts to blame everyone else for the astronomical cost of drugs in this country, stakeholders are reminding lawmakers and regulators that it’s Big Pharma who ultimately sets and raises prices, while blocking competition.

Digging deeper: Drugmakers have been largely successful in drawing focus away from the singular role they play in what American consumers pay for their drugs. But, a growing chorus of voices is working to correct that narrative, pointing out the industry’s egregious pricing practices and anti-competitive tactics, including:

Starting off 2024 by raising prices on 775 brand-name drugs by a median of 4.5 percent
Following those increases with another round of mid-year price hikes on an additional 195 drugs
Setting a new record for launch prices last year, when the median annual price for new drugs reached $300,000 – 35 percent higher than the year before
Spending more on advertising than on research and development of new drugs
Gaming the patent system and blocking competition to the tune of $16 billion in lost savings from five drugs alone

What it means: Stakeholders urge policymakers to hold the pharmaceutical industry accountable, with an emphasis on competition, affordability, and transparency.

EMPLOYER COSTS Employers continue to grapple with rising healthcare costs.

Quick takeaway: A recent report points to three conditions being largely responsible for driving up healthcare costs for employers.

Digging deeper: As highlighted last week, employer healthcare costs are projected to grow by almost 8 percent in 2025. In addition to the rising cost of covering breakthrough weight-loss drugs, cancer treatments and cardiovascular conditions rounded out the top three cost drivers for employers.

What it means: Pharmacy costs are the main culprit for employers’ increased healthcare burden, with more than three-quarters of respondents to a recent survey saying they were “very concerned” about overall pharmacy costs. Between 2021 and 2023 the healthcare spend attributed to pharmacy for employers increased from 21 percent to 27 percent.

HOSPITAL FINANCES A look at how different hospital systems manage their finances.

Quick takeaway: A recent report challenges hospitals’ claims that large markups for patients with private coverage are needed to cover their losses from patients enrolled in public programs.

Digging deeper: To counter this claim, the study focuses on two large, regional hospitals, whose respective experiences managing their finances tell vastly different stories.

The first system, Duke Regional Hospital in North Carolina excels at delivering high quality, equitable care at prices that fall in the middle of all hospitals across the country. By comparison, Mercy Hospital Southeast in Missouri sits at the exact opposite end of that spectrum, getting poor grades for patient safety, while charging higher prices.

What it means: In their negotiations with health plans, some hospitals have argued that they need higher commercial reimbursement rates in order to make up lost revenue from treating Medicare and Medicaid patients. But, as the report highlights, more than half of all hospitals actually make money on Medicare. Additionally, one-third make money on Medicaid. And, nearly one out of ten hospitals pad their bottom line by collecting more money for charity care than they provide. The data shows that not all hospitals need to compensate for lower Medicare and Medicaid reimbursement rates by shifting costs to commercially-insured consumers.

Talking Points: 9 September 2024

Fri, 06 Sep 2024 14:36:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

WAITING ROOM As healthcare costs go up, so too do patient wait times.

Quick takeaway: Increased demand for healthcare services, coupled with provider burnout, mean people are waiting longer to see their doctor.

Digging deeper: According to a recent analysis , 17 percent of patients had to wait up to three months for their latest appointment. The most frequently cited specialties with long wait times included:

Neurology at 26 percent.
Ear, nose, and throat, also at 26 percent.
Psychiatry at 20 percent.
OB/GYN at 17 percent.

For context, primary care stood at 19 percent of patients reporting having to wait to schedule an appointment.

What it means: Experts point to pent-up demand for medical services coming out of the COVID public health emergency. Additionally, tens of thousands of doctors have left the profession or plan to, putting further strain on the system.

While there’s hope that technology and at-home care will fill some of these gaps, there’s concern that patients who’ve had negative experiences accessing care are likely to avoid seeking it in the future.

EMPLOYER COSTS High-cost treatments are projected to drive up employer healthcare costs.

Quick takeaway: The increased demand for weight-loss drugs and gene and cell therapy treatments will see employers’ healthcare costs go up by as much as eight percent next year.

Digging deeper: New research points to high-cost GLP-1 drugs and multimillion dollar gene and cell therapy treatments as being primarily responsible for increases to employers’ healthcare cost burden in 2025.

More than half of employers (56 percent) pointed to these weight-loss drugs as being a “great” or “very great” driver of their increased costs, while 46 percent cited high-cost cell and gene therapies.

What it means: Other spending data paints a grim picture, as spending on prescription drugs was shown to have increased nearly 10 percent in 2023, driven by price hikes on existing drugs outpacing inflation, skyrocketing launch prices for new medicines, and costly GLP-1 weight-loss drugs.

NO SURPRISES New data provides insights into how consumer protections from surprise medical bills are performing.

Quick takeaway: Despite its strong start, persistent issues with the arbitration process intensify concerns about the No Surprises Act’s ( NSA ) ability to control healthcare costs.

Digging deeper: While implementation of the NSA prevented millions of consumers from being hit with surprise bills last year, recent analysis of the latest data from the Centers for Medicare & Medicaid Services detailing arbitration outcomes provides key takeaways for how the NSA is doing now, including:

Arbitration decisions for payments to out-of-network providers coming in significantly higher than Medicare reimbursement and in-network rates.
Arbitration decisions overwhelmingly favoring providers.
The lack of transparency in how decisions are reached by arbitrators.

What it means: Perhaps the key takeaway for regulators is that, without necessary adjustments to the arbitration process, the NSA will ultimately fail to reduce costs for patients.

HOSTAGE-TAKING A recent report highlights a dangerous negotiating tactic increasingly deployed by hospitals.

Quick takeaway: By threatening to dump health plan networks, hospitals’ “ hostage-taking ” strategy puts patients at risk and threatens to blow up healthcare costs for everyone.

Digging deeper: Health plans and their customers – including employers and government partners – are finding themselves caught between a rock and a hard place in their rate negotiations with large hospital systems. Essentially, these health systems are threatening to terminate their contracts with health plans, which would remove these providers from the insurers’ networks, meaning patients would no longer have coverage at these facilities.

But, it’s not just commercially-insured customers who are at risk, as hospitals are also threatening to eliminate Medicare beneficiaries and Medicaid enrollees from their network agreements, jeopardizing access for the most vulnerable patient populations.

What it means: It’s not just health plans finding themselves on the receiving end of hospitals’ aggressive negotiating tactics. Across the country, healthcare workers are also fighting with these large health systems for new contracts.

Talking Points: 26 August 2024

Fri, 23 Aug 2024 15:19:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

SHIFTING SERVICES Moving certain medical services out of a hospital could save billions of dollars.

Quick takeaway: The shift from hospital-based settings to alternative sites of care could lead to $147 billion in annual savings for the healthcare system.

Digging deeper: As more services move away from traditional sites of care, like hospitals, the demand for alternative care sites is increasing. In fact, between 2010 and 2021, the number of these sites has doubled.

Despite hospitals’ efforts to fight this migration, a recent survey found that over 10 percent of commercial and nearly 11 percent of Medicare volume currently taking place in hospital-based settings could shift to alternative sites of care .

What it means: This shift away from hospital-based care settings poses a threat to these systems, who’ve made significant capital investments and have little incentive to reduce the revenue needed to recoup these expenditures.

NONPROFIT HOSPITALS CEO salaries at nonprofit hospitals now top $1 million.

Quick takeaway: Between 2012 and 2019, compensation for CEOs of nonprofit hospitals grew 30 percent.

Digging deeper: In exchange for not paying federal, state, or local taxes, nonprofit hospitals are expected to provide a social benefit to their communities, often in the form of charity care to patients unable to afford paying for that care or by making investments in those communities.

However, despite this community-focused mission, the leaders of these large systems now command seven-figure salaries, leading many to question how this benefits patients .

What it means: With nearly half of all hospitals in the U.S. now being nonprofits, increased attention is being paid to how these health systems are holding up their part of the bargain. According to recent analysis , they’re not doing a great job, with the tax breaks enjoyed by the large majority of nonprofit hospitals exceeding the amount of community care they provide. In fact, the cumulative “fair share” deficit is enough to wipe out the medical debt of every patient in California, Texas, New York, and Pennsylvania – combined .

EMPLOYER COSTS Employers’ healthcare costs are projected to rise next year.

Quick takeaway: Driven largely by expensive new drugs and high-cost therapies, experts predict employers could look to pare down benefits .

Digging deeper: Analysts estimate that employers could see their healthcare costs go up by as much as 9 percent in 2025. While projections vary , experts point to the combination of continued high utilization and rising pharmacy spend, driven largely by expensive specialty medications and the increased demand for GLP-1 weight-loss drugs, as being responsible for employers’ growing healthcare cost burden.

VOTER CONCERNS Older voters cite the rising cost of healthcare as one of their top concerns.

Quick takeaway: Five of the top six health issues among older adults have to do with healthcare costs.

Digging deeper: While there’s been increased focus in recent years on reducing the costs associated with types of care for older Americans, a new survey shows there’s general support for more action that transcends political lines and demographics.

According to the poll, at least half of all older adults surveyed said they are “very concerned” about the cost of medical care, prescription drugs, long-term care, and health insurance. An additional 45 percent said they’re also concerned about dental care costs.

What it means: As we get closer to Election Day, expect candidates to shine a spotlight on healthcare costs and where they stand on the issue. Pay close attention, though, to the solutions they’re offering, specifically, holding drugmakers accountable for rising prescription drug prices, protecting Medicare Advantage for future generations, and not taking away the tools that health plans use to guard against waste, fraud, and abuse in the healthcare system.

Spotlight

Talking Points: 19 August 2024

Fri, 16 Aug 2024 15:02:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MA SUPPORT A new survey highlights overwhelming voter support for Medicare Advantage.

Quick takeaway: A supermajority of seniors enrolled in Medicare Advantage (MA) plans oppose reducing funding to the program – something they’ll take with them as they head to the polls this November.

Digging deeper: Seeking to better understand seniors’ views on MA and how Medicare policy will impact their votes on Election Day, a recent bipartisan survey provided critical insights that lawmakers would do well to keep in mind as we get closer to November.

Among the key takeaways :

Protecting Medicare is the top priority for seniors, with 94 percent saying it is very or extremely important.
74 percent of seniors – across party lines – oppose reduced funding for MA.
62 percent of senior voters say they would be more likely to support a candidate who commits to zero cuts to MA.
MA affordability is the most important factor driving opposition to funding cuts, with 84 percent of respondents citing the program’s low monthly premiums as extremely or very important.

What it means: MA plans now serve over 33 million American seniors – more than half the eligible Medicare population. With its focus on coordinated care, its ability to serve diverse communities, and the savings it brings to beneficiaries and the government, it’s no wonder so many voters are looking to lawmakers to protect the program .

DISHONEST BILLING Hospitals’ billing practices continue to draw scrutiny.

Quick takeaway: Growing acknowledgment of the outsized role that hospitals and providers play in driving up healthcare costs has drawn increased attention to their dishonest billing .

Digging deeper: Dishonest billing occurs when large hospital systems acquire smaller practices and reclassify them as a hospital setting in order to charge significantly more for medical services.

Stories of patients being caught unaware of these billing manipulations abound, including this recent one of a woman who had to stop receiving treatments for a muscle condition because she could no longer afford the injections after the health system that owns her doctor’s office started coding her visits as “outpatient hospital services.”

What it means: As previously featured , federal lawmakers in both the U.S. House of Representative and U.S. Senate have proposed legislation seeking to address the issue.

COVERAGE Employer-provided coverage plays a critical role in our healthcare system.

Quick takeaway: More than 180 million Americans depend on coverage provided through their jobs for access to affordable, quality healthcare.

Digging deeper: Recent studies reinforce the importance of employer-provided coverage to millions of American workers and their families. A quick snapshot tells the story:

What it means: It’s not just workers who benefit from the coverage provided by their employers. According to a recent analysis, employers with 100 or more workers saw a 47 percent return on investment for offering health coverage in 2022. That number is expected to jump to 52 percent by 2026.

Spotlight

Talking Points: 12 August 2024

Fri, 09 Aug 2024 14:54:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

HOSPITAL QUALITY The majority of hospitals now receive average – or below average – quality scores.

Quick takeaway: In the years following the coronavirus public health emergency, many hospitals have struggled to provide safe and effective care.

Digging deeper: According to updated hospital star ratings data from the Centers for Medicare & Medicaid Services (CMS), more hospitals now rank lower compared to last year. These ratings, based on a five-star scale, assess hospitals’ performance across a number of measures, including mortality and readmission rates, emergency department treatment, and value of care.

Of the nearly 3,000 hospitals rated by CMS, 60 percent received three stars or less. Glaringly, the number of hospitals only receiving one star increased by nearly 30 facilities, while one hundred fewer hospitals received five stars.

What it means: At a time when hospitals are increasingly seeking higher reimbursement rates from health plans, government partners, employers, and consumers, there’s a growing sense that patients aren’t getting what they’re being asked to pay more for.

HOSPITAL DISPARITY The gap between rich and poor hospitals widens.

Quick takeaway: Large health systems are seeing their financials soar this year, while smaller facilities in outlying areas are struggling to hang on.

Digging deeper: Improved market volatility, increased care utilization, stabilizing drug prices, and more predictable supply and labor costs, have largely improved the hospital industry’s outlook. This is especially true for large, for-profit health systems.

Unfortunately, these benefits aren’t being shared equally across the provider landscape, as many smaller, nonprofit hospitals are operating on razor thin margins.

What it means: There’s fear that this worsening divide only threatens access for vulnerable patients, while hastening consolidation in an industry that’s been a magnet for mergers and acquisitions.

WEIGHT-LOSS Rx As employers’ coverage of weight-loss drugs goes up, so do their costs.

Quick takeaway: Nearly one-third of U.S. employer health plans are now offering coverage of GLP-1 drugs for both diabetes and weight-loss, up from 26 percent in 2023.

Digging deeper: These drugs have also driven up employers’ healthcare costs, as the cost of covering GLP-1s for weight-loss grew as a portion of overall medical claims spending from 6.9 percent last year to 8.9 percent so far in 2024.

As recently as last year, global sales of GLP-1 drugs were forecasted to reach $100 billion by next decade. Based on rising demand, analysts have already upped those projections to $150 billion by the early 2030s.

What it means: In a recent survey , employers pointed to the high cost of medical services and specialty drugs as their top healthcare cost management challenges. With only about half of the surveyed employers saying they effectively manage their healthcare costs, the increased utilization of GLP-1s is cause for rising concern.

HOSPITAL FINANCES The hospital industry continues to show financial improvement.

Quick takeaway: Hospitals’ improved financial performance has them on much more solid ground than they’d have you believe.

Digging deeper: One need look no further than what’s happening at a pair of New York hospitals to diagnose the health of their respective balance sheets.

At one pricey hospital in New York City, which reportedly charges multiple times the average rate per birth in the U.S., new mothers are lavished with expensive perfumes and designer bags.

Elsewhere, New York’s largest healthcare system, Northwell Health, recently announced that it was launching its own in-house production company, developing scripted and unscripted content for film and television.

What it means: With medical inflation stretching budgets for employers and families across the country, stories like these highlight the disparity between hospitals’ cries of financial exposure and how they’re spending patients’ money.

Spotlight

Talking Points: 5 August 2024

Thu, 01 Aug 2024 19:34:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

CONSOLIDATION Hospital mergers have far-reaching impacts in their communities.

Quick takeaway: A new study details the link between hospital consolidation and layoffs.

Digging deeper: From 2002 to 2020, over 1,000 hospital mergers happened in the U.S. These led to a decrease in care quality and an increase in prices .

According to this new analysis, around 40 percent of hospitals increased prices by more than 5 percent in the two years following a merger. What’s more, after those transactions closed, communities cut more than 200 healthcare and non-healthcare jobs. The affected communities also saw a drop in federal income tax revenue, while payments for unemployment insurance increased 2.5 percent.

What it means: With the pace of hospital consolidation continuing to gain steam, there’s pervasive worry about the impact that these deals are having on patient access, quality, and costs.

SITE-NEUTRAL Support grows for site-neutral payments.

Quick takeaway: A pair of bipartisan voices argues why Congress should enact site-neutral payment reforms.

Digging deeper: When a free-standing physician office is acquired by a hospital, the prices for the medical services delivered at that location often go up, simply because they’re now part of that larger hospital system.

Recently, two former Department of Health and Human Services (HHS) Secretaries came together to urge lawmakers to cross party lines to advance reforms protecting consumers from this kind of dishonest billing .

What it means: With bills in both the U.S. House of Representatives (the Facilitating Accountability in Reimbursements ( FAIR ) Act ) and the U.S. Senate (the Site-based Invoicing and Transparency Enhancement ( SITE ) Act ), lawmakers continue to focus on ways to address the issue.

MA OUTPERFORMS Medicare Advantage drives better value for beneficiaries than original Medicare.

Quick takeaway: Across a range of health measures, Medicare Advantage (MA) delivers better outcomes for seniors enrolled in MA plans, while saving them money.

Digging deeper: A new report reveals that the MA program outperformed Medicare Fee-for-Service (FFS) in 9 out of 10 quality measures. MA plans did a superior job of screening beneficiaries for cancer and was more efficient than FFS in preventive care for various health conditions, including cardiovascular disease and diabetes.

Furthermore, MA has also been shown to save them money, with beneficiaries spending an average of $2,541 less per year on premiums and out-of-pocket expenses, which carries more weight as seniors’ healthcare costs continue to rise .

What it means: With MA plans now serving more than 33 million Americans (over half of the Medicare-eligible population), the program continues to distinguish itself from FFS.

Rx INFLATION Prescription drug prices to keep going up next year.

Quick takeaway: Experts project that the overall rate of drug price inflation is going to hit 3.81 percent in 2025.

Digging deeper: The projected increase is partly due to previously approved drugs like semaglutide, now more commonly used to treat obesity, which has seen its spend increase 77 percent since last year’s report.

The analysis also warns that a growing number of high-cost cell and gene therapies entering the market will significantly impact budgets.

What it means: Against this backdrop, stakeholders continue to remind lawmakers and regulators that the root causes of high drug prices remain the drug industry’s egregious pricing practices and anti-competitive tactics.

Spotlight

Talking Points: 29 July 2024

Fri, 26 Jul 2024 14:03:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

PBM VALUE Expert analysis highlights the importance of PBMs in the prescription drug supply chain.

Quick takeaway: A new report counters the political rhetoric targeting pharmacy benefit managers (PBMs) by pointing out the value they bring to consumers and our healthcare system.

Digging deeper: With so much legislative and regulatory attention focused on PBMs, stakeholders continue defending the critical role they play in driving affordability, patient safety, and better health outcomes.

Last week, former chief economist for the U.S. Department of Justice Antitrust Division, Dennis Carlton, Ph.D., released a report concluding that PBMs not only encourage greater competition, but lower drug costs, as well. Also included in the analysis:

PBMs drive down costs for health plan sponsors, patients, and families
Rebates and PBM-affiliated pharmacies are not increasing drug costs
PBMs do not put independent pharmacies out of business

What it means: Big Pharma has effectively manipulated focus away from themselves by targeting other parts of the drug supply chain, distracting from the fact that they alone are responsible for setting prescription drug prices.

Rx PRICE HIKES Drugmakers raise prices on hundreds of products.

Quick takeaway: In what’s become a twice-yearly tradition, pharmaceutical manufacturers unleash their second flurry of price hikes in 2024.

Digging deeper: Every January, drugmakers greet the New Year by increasing prices on hundreds of drugs – such as, earlier this year when more than 900 drugs saw price increases.

In keeping with their pattern of biannual increases, nearly 200 drugs just had their prices go up earlier this month, with half of those increases exceeding the rate of inflation .

What it means: As highlighted above, the drug industry continues to exert sole influence on the trajectory of drug prices. And, they’re willing to do whatever it takes to protect their ability to charge whatever they want.

SPENDING Medical cost growth is projected to hit its highest level in more than a decade.

Quick takeaway: Commercial healthcare spending is expected to grow 8 percent in 2025.

Digging deeper: As featured in last week’s newsletter , forecasts show healthcare spending continuing its upward climb. A new analysis provides further insight, showing that year-over-year medical cost trend is expected to rise to a level that hasn’t been seen in 13 years.

According to the research, what’s driving this trend is inflationary pressure, combined with prescription drug spending and behavioral health utilization.

What it means: Significantly, the report highlights that hospital and provider consolidation , which is becoming increasingly common, is one of the primary factors inflating costs. This is playing out in the ongoing contract negotiations between health plans and providers across the country.

Talking Points: 22 July 2024

Fri, 19 Jul 2024 14:24:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

HEALTH EXPENDITURES Healthcare spending will hit $7.7 trillion by 2032.

Quick takeaway: Growing demand for care, swelling enrollment in Medicare, and record numbers of insured patients are driving this growth .

Digging deeper: Annual spending on healthcare in the U.S. grew 7.5 percent last year and is projected to grow 5.6 percent per year for the next decade, outpacing expected annual inflation of 4.3 percent.

At its current rate, healthcare expenditures will represent nearly 20 percent of our overall gross domestic product by 2032, up from 17.3 percent in 2022.

What it means: A closer look at the numbers provides valuable insights to lawmakers, regulators, and other stakeholders as they continue to wrestle with how to contain spending.

Over the next eight years, hospital spending alone is expected to grow at an average rate of 5.7 percent, also eclipsing the annual rate of inflation over that period. Last year, hospital spending rose 10.1 percent according to the National Health Expenditure Projections released . Controlling projected growth in hospital spending is critical to overall healthcare affordability.

UNAFFORDABLE Healthcare is now unaffordable for nearly half of all Americans.

Quick takeaway: A growing number of people in this country now struggle to afford access to quality healthcare and prescription drugs.

Digging deeper: According to the latest report from the Healthcare Affordability Index, which tracks how many people have skipped medical care or been unable to fill prescriptions due to cost in the last three months, overall affordability has dropped to a record low of 55 percent since the index was first launched in 2021.

What it means: The downturn is largely attributed to two groups – adults aged 50 to 64 and those aged over 65. It’s this second group that’s troubling, since Medicare eligibility begins at that age.

Among all the age groups studied, adults under 50 reported being the least able to afford healthcare at just 47 percent, a five-point drop in affordability since 2022.

HOSPITAL MARKUPS A new therapy costs significantly more when administered in a hospital.

Quick takeaway: Medicare claims for CAR-T treatments received in a hospital setting cost more than those delivered elsewhere.

Digging deeper: In a recent study, researchers examined Medicare claims for CAR-T therapy. Of the 391 claims reviewed, 79 percent of patients received treatment in the hospital, with the remaining 21 percent receiving it in an outpatient setting. The average price for the hospital claims was $498,723 compared to $414,393 outside of the hospital – a difference of $84,330.

What it means: CAR-T therapy is becoming a more frequent treatment option for Medicare patients with certain types of cancer. But, changes in CAR-T treatments can result in therapies being pushed earlier as a form of treatment, impacting where patients receive that therapy, which, according to researchers , has significant cost implications.

Rx R&D Drugmakers recoup the cost of developing new products much faster than they’d have us believe.

Quick takeaway: A new study shows that the majority of new drugs make back the average cost of research and development (R&D) within a decade.

Digging deeper: Big Pharma has long pointed to the upfront investment and cost of innovation as justification for the astronomical launch prices of new drugs. They hide behind this R&D defense to manipulate the patent system, exploiting regulatory exclusivities to shield themselves from competition, while enjoying generous market protections.

New data debunks much of this rhetoric, showing that, despite the drug industry’s claims to the otherwise, most companies recoup their investment within ten years of their drug being approved and brought to market.

What it means: Understanding the revenues earned by drugmakers on new products is important, say experts. These insights, along with data on business costs, inform discussions on how to better incentivize investment in innovation, while ensuring affordability for patients and the healthcare system.

Spotlight

Talking Points: 15 July 2024

Fri, 12 Jul 2024 14:55:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

CONSUMER COSTS Rising hospital prices are to blame for the increased cost strain on consumers.

Quick takeaway: A new report shows that hospital prices have been rising faster than insurance premiums since 2006.

Digging deeper: The data, published in a recent Health Affairs Scholar report, examined consumer prices for health insurance, hospitals services, and professional services from 2006 to 2023. The analysis shows that the hospital price index rose steadily between these years – outpacing insurance premiums and professional services.

To further understand what’s driving this increase, researchers evaluated the profit margins of hospitals and health insurers. That examination revealed that hospitals (both for-profit and nonprofit) consistently maintained higher profit margins than insurance companies.

What it means: As healthcare costs continue to weigh heavily on American consumers, researchers conclude that high hospital prices are what’s driving rising insurance premiums.

SMALL BUSINESSES Rising healthcare costs are chipping away at America’s small businesses.

Quick takeaway: An increasingly large share of small employers’ payroll costs is now going to covering their workers’ healthcare benefits.

Digging deeper: While the pain of rising healthcare costs is nothing new, according to a new analysis, small businesses are bearing a disproportionate share of that burden.

A typical small business with two or more employees and annual revenues of $600,000 or less, saw 12 percent of their payroll costs going to providing healthcare benefits last year. For businesses with revenues of at least $2.4 million, that figure was 7 percent.

What it means: The analysis adds to the worrying narrative surrounding small businesses’ ongoing struggles with rising healthcare costs. As recently covered , surging healthcare prices have been linked to lower employment opportunities with business owners having to prioritize staying afloat rather than investing in their own growth.

Rx PRICES Prescription drug prices have skyrocketed nearly 40 percent since 2014.

Quick takeaway: Over the past decade, the cost of drugs in the U.S. has gone up 37 percent , far surpassing the rate of inflation.

Digging deeper: Though the price increases have slowed slightly in comparison to previous years, Americans’ out-of-pocket expenses continue to go up, with the average person now spending $16.26 per prescription , with $21 billion already being spent out-of-pocket this year.

The increase has other trickle-down effects as consumers’ deductibles have nearly doubled over this period, with copays also on the rise. Not only that, access to life-saving medication is also being impacted.

What it means: With Americans already buckling under chronically high inflation and interest rates, the continued upward trajectory of prescription drug prices makes the cost of everyday necessities, like groceries, rent, and gas, that much more expensive.

MEDICARE SOLVENCY Lawmakers turn their attention to addressing the financial health of Medicare.

Quick takeaway: Despite acknowledging that the clock is ticking on the program, federal lawmakers have yet to agree on a clear path forward for Medicare’s financial future .

Digging deeper: During a U.S. House Budget Committee hearing last month on federal entitlements, members of the Committee from both sides of the aisle said they supported efforts to bolster the flagging finances of the Medicare program, which now serves more than 67 million American seniors.

With more Baby Boomers aging into the program every day, government actuaries are raising the alarm on a critical funding imbalance, brought on by growth in the number of beneficiaries enrolled in Medicare, while the number of workers paying into the system dwindles.

But, there’s hope.

What it means: A study released last year shows that if Medicare was run like the increasingly popular Medicare Advantage (MA) program, its solvency could be extended by as much as 17 years.

According to the analysis, original Medicare’s inefficiencies are driven by an overuse of services and poorer performance in keeping patients out of expensive hospitals.

Medicare Advantage plans’ focus on care coordination and investment in supplemental benefits ensures seniors enrolled in MA plans save money, have access to enhanced benefits, and enjoy improved health outcomes – all of which could be combined to make Medicare sustainable for future generations.

Spotlight

Talking Points: 1 July 2024

Fri, 28 Jun 2024 14:44:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

HEALTHCARE PRICES & JOBS Rising healthcare prices have increased unemployment.

Quick takeaway: New data shows that surging prices for healthcare not only impact Americans’ budgets, but could be costing them their jobs .

Digging deeper: According to a new study in the National Bureau of Economic Research, a 1 percent increase in healthcare prices lowers an employer’s headcount by 0.4 percent. Not only that, those job losses are concentrated among workers earning less than $100,000.

The research also shows that for the average county, a 1 percent increase in healthcare prices reduces aggregate income by $8 million annually.

What it means: Because most people with health insurance are covered through their employer, there’s a direct link between healthcare prices and labor market dynamics. As such, researchers point out how vitally important it is to understand that these rising prices aren’t just impacting patients – they’re also hurting the employment outcomes of workers who aren’t even seeking care.

Rx PATENTS Addressing Big Pharma’s patent abuses could lead to billions of dollars in savings.

Quick takeaway: A bipartisan drug patent bill could narrow the federal budget deficit by about $3 billion over 10 years.

Digging deeper: Among the proposed bill’s provisions:

Drug manufacturers would be prohibited from “product hopping” (shifting demand from a drug that’s about to face generic competition to a newly-patented version)
Imposing private sector mandates by limiting assertions of patent infringement

According to the nonpartisan Congressional Budget Office’s ( CBO ) score of the bill, the estimated budgetary impacts would flow from:

Lower federal spending for prescription drugs and biological products
Lower spending on federal subsidies for health plans covering those prescription drugs and biological products

What it means: CBO estimates that, between 2024 and 2034, the bill would reduce direct spending by $2.4 billion and increase revenues by $585 million, leading to a net decrease in the federal deficit by $3 billion.

NONPROFIT HOSPITALS A deeper look at nonprofit hospitals’ improved financial well-being.

Quick takeaway: The nation’s 10 largest nonprofit health systems reported an average 8.4 percent increase in total operating revenues last year from the previous year.

Digging deeper: A mixture of improved economic conditions and the return of patients seeking services, saw the hospital sector on surer financial footing in 2023. This held true for nonprofit hospitals, as well, especially among the larger systems in the U.S.

What it means: As their operating conditions improve, industry watchers are making sure to remind policymakers that the tax benefits enjoyed by these large nonprofit health systems come with strings attached in the form of their “ community benefits ” obligations.

As a condition of their tax exempt status, these hospitals are required to deliver benefits to the communities they serve in the form of charity care or financial assistance and local health improvement programs.

Unfortunately, given the insufficient enforcement of these requirements, in addition to the lack of a regulatory definition of “community benefits,” research shows that nonprofit hospitals are by and large failing to meet these obligations.

PRICE TRANSPARENCY Majority of hospitals still non-compliant with price transparency requirements.

Quick takeaway: A report from earlier this year shows that only about one-third of hospitals reviewed are fully compliant with the federal price transparency rules that went into effect in 2021.

Digging deeper: As of this past February, only 34.5 percent of 2,000 hospitals reviewed by a nonprofit watchdog were deemed to be in full compliance with price transparency rules. That represents a slight decrease from July of 2023, when 36 percent of hospitals were in full compliance.

What it means: The rules were enacted to give patients better insights into what common medical procedures and services cost in the same market.

However, the report’s findings reveal a concerning lack of compliance, combined with an alarming disparity in prices – with variations up to 10-fold within the same hospitals and a staggering 31-fold across hospitals in the same region, suggesting the need for greater enforcement of the price transparency rules.

Spotlight

2024 Mid-Year Review

Mon, 24 Jun 2024 17:16:00 GMT

2024 is already almost halfway over, and we’d like to take some time to reflect on the amazing work of our Health Action Network community! Since January, our collective efforts have resulted in significant legislative victories. From advocating for important policy changes to protecting access to affordable healthcare, your dedication has been instrumental in turning positive change into a reality.

Another major focus for the Health Action Network this year has been working to raise awareness about the numerous benefits the Medicare Advantage (MA) program provides for millions of seniors and those soon reaching retirement age.

MA provides the same benefits as original Medicare but for just 83 cents on the dollar. If the Medicare program matched MA’s efficiency, it could be extended by 17 years. MA spends 9.4% less than original Medicare, has a 43% lower rate of avoidable hospitalizations and outperforms original Medicare in 16 out of 16 clinical measures.

Click this link if you are interested in defending the Medicare Advantage program and making a difference today!

Talking Points: 17 June 2024

Fri, 14 Jun 2024 15:57:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

HOSPITAL CONSOLIDATION As hospitals grow larger, so do consumers’ bills.

Quick takeaway: Giant hospital systems continue to swallow up huge chunks of our healthcare system, exploiting their size to negotiate higher reimbursement and driving up costs for everyone.

Digging deeper: Hospital representatives have long claimed that mergers in the industry lead to better efficiencies and improved patient outcomes. What’s really happened, though, is that most regions in the U.S. are now dominated by a few large hospital systems, which has only resulted in higher prices with no significant improvements to care.

Over the past two decades, there’ve been more than 1,000 mergers among the approximately 5,000 hospitals in our country, and as a result, spending on hospital care now makes up the largest part of our overall healthcare spend, with 30 cents of every dollar going to hospitals.

What it means: While the rising costs that result from these mergers lead to alarmingly high medical bills, there’s a greater cost that affects all of us in the form of higher premiums.

MA SAVINGS Medicare Advantage helps beneficiaries save thousands of dollars every year.

Quick takeaway: According to a new study , seniors enrolled in Medicare Advantage (MA) plans spend over $2,500 less per year on out-of-pocket costs than those enrolled in original Medicare Fee-for-Service (FFS).

Digging deeper: The analysis shows an uptick from the previous year, when MA beneficiaries spent over $2,400 less than FFS enrollees.

That reduced spending extends across racial and ethnic groups. And, it’s even higher for clinically complex beneficiaries, with seniors having three or more chronic conditions spending an average of $3,165 less per year compared to FFS.

MA also serves more of the low-income population than FFS, with the report showing that more than half of those enrolled in MA plans had income levels below 200 percent of the federal poverty line, compared to about one-third in FFS.

What it means: The data reinforces what stakeholders are urging lawmakers and regulators to keep in mind as they continue to chip away at the program – namely, that MA does a better job of taking care of vulnerable seniors for less money.

PBM VALUE Stakeholders urge lawmakers to protect their pharmacy benefits.

Quick takeaway: Employers highlight the critical role that pharmacy benefit managers ( PBMs ) play in helping them provide access to affordable, quality prescription drug benefits.

Digging deeper: Business leaders from across the country are voicing concerns over misguided policies targeting PBMs and seeking to eliminate their ability to drive value for employers and consumers.

In defending the work that PBMs do on their behalf, these employers point to the importance of being able to design benefit packages that allow them to offer quality, affordable prescription drug coverage to their employees, something their PBMs help them do.

They also point to the potential cost of some of the policies currently being considered, such as a ban on “ de-linking ,” which would not only raise premiums in the commercial market by nearly $27 billion, but would amount to a $22 billion bailout for the pharmaceutical industry.

Increased regulation of the private market, they maintain, only takes away the optionality that’s so important to employers.

What it means: The message reinforces polling from late last year in which 9 out of 10 employers said they value their relationship with their PBM and the full range of contract options they provide.

EMPLOYER-PROVIDED COVERAGE American workers value their employer-provided healthcare coverage.

Quick takeaway: A recent report details high satisfaction among people relying on access to high-quality, affordable healthcare through their employer.

What they’re saying: Highlights from the study include:

89 percent saying their employer-provided coverage had provider options that were convenient to them
71 percent saying they are better able to manage their chronic conditions because of their employer-provided coverage
Of the 1 in 5 taking advantage of the cost comparison tools made available through their employer-provided coverage, 60 percent saying it changed their behavior, even causing some to choose less expensive treatment options
41 percent of those who changed their behavior saying that they used those cost comparison tools to predict the cost of a procedure or treatment in advance

Why it matters: Stakeholders from across the healthcare spectrum recently came together, sending a letter to Congress highlighting the importance of employer-provided coverage and urging lawmakers to protect this critical source of care for nearly 180 million workers and their families.

Spotlight

Talking Points: 10 June 2024

Fri, 07 Jun 2024 18:08:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

RURAL CARE Medicare Advantage delivers value to rural beneficiaries.

Quick takeaway: A closer look at Medicare Advantage (MA) beneficiaries’ experiences helps showcase how the program improves access and lowers costs for American seniors in rural communities.

Digging deeper: Data shows that MA enrollees are more likely to use preventive care services and less likely to report having an outpatient visit than original Fee-for-Service (FFS) Medicare beneficiaries. Not only that, seniors enrolled in MA spend less on premiums and out-of-pocket costs than those in FFS.

But, according to the results of a recent analysis , the difference in healthcare spending is largest between MA and FFS beneficiaries living in rural areas.

The study also shows that rural beneficiaries enjoy a variety of options, with the average enrollee having nearly 30 MA plans to choose from. On top of that, MA enrollees in rural areas report higher levels of satisfaction with how easily they’re able to see their doctor than FFS enrollees.

What it means: Despite efforts to undermine the value of the program, Medicare Advantage plans continue to deliver better health outcomes, increase access, and lower costs for millions of American seniors.

SUPPLEMENTAL BENEFITS Enrollees’ use of Medicare Advantage supplemental benefits leads to better healthcare utilization outcomes.

Quick takeaway: Data highlights the impact of supplemental benefits for MA beneficiaries, including those with greater health-related social needs.

Digging deeper: In addition to the coordinated model of care offered through the Medicare Advantage program, MA plans also offer supplemental benefits, or services that aren’t covered by traditional Medicare, such as vision and dental care, as well as transportation and nutritional support.

Given the growing attention to supplemental benefits in MA, a new study from Elevance Health’s Public Policy Institute provides data-driven evidence on the association between supplemental benefits and healthcare utilization. Among the findings:

Use of MA supplemental benefits is associated with a decrease in likelihood of an inpatient or non-emergent emergency department visit.
Utilization of supplemental benefits in MA is also associated with an increased likelihood of a beneficiary having an annual wellness visit or preventative screening.
These results were especially favorable for dual-eligible beneficiaries (those qualifying for both Medicare and Medicaid).

What it means: The findings reinforce the importance of regulatory flexibility in MA plan design. By encouraging investment in areas such as supplemental benefits, Medicare Advantage plans are better able to meet the diverse needs of vulnerable populations.

MEDICARE SOLVENCY Nearly three-quarters of Americans are worried about the future of Medicare.

Quick takeaway: According to a new survey , 73 percent of U.S. adults under the age of 65 aren’t sure the Medicare program will still be around when they’re eligible to sign up for it.

Digging deeper: Americans concerned about Medicare’s solvency have reason for hope: Medicare Advantage is extending the life of the Medicare program. A recent Medicare Trustees report shows that Medicare’s financial situation has improved, with the program’s solvency having been extended by 5 years, on top of last year’s 3-year improvement. That’s because Medicare Advantage costs 7 percent less to taxpayers than original Medicare.

In fact, according to one study , Medicare Advantage could help extend the life of the Medicare program by as much as 17 years .

What it means: The data reinforces the importance of investing in Medicare Advantage to ensure that Medicare benefits are offered to future generations of Americans.

Rx PATENT ABUSE Pharmaceutical manufacturers continue to exploit the patent system to their benefit.

Quick takeaway: Through the use of “ product hopping ,” drugmakers are able to artificially extend the patent life of drugs about to face generic competition.

Digging deeper: It’s no secret that Big Pharma will do whatever it needs to do to protect its bottom line. Whether that’s raising prices on hundreds of drugs (twice annually!) or introducing new medicines with 6- or 7-figure launch prices, the pharmaceutical industry has perfected their ability to maximize profits. Product hopping is just another example of how they’re able to accomplish this.

By winding down production of a drug formulation that’s nearing the end of its patent lifecycle, drug manufacturers then force patients to switch prescriptions to newly-formulated – and, newly-patented – versions of the same drug. That company is then able to extend the monopoly protections for their drug, allowing them to charge whatever they want for it.

What it means: Stakeholders are raising the alarm, drawing attention to how product hopping stifles competition and keeps prices for drugs artificially high.

Spotlight

Talking Points: 3 June 2024

Fri, 31 May 2024 13:44:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

HERE’S HOW MUCH HOSPITAL PRICES ARE RISING

Quick takeaway: Hospital prices continue to skyrocket .

The Department of Labor reported that in April prices for medical care rose 2.7 percent year-over-year. Over that same span, hospital prices rose by an alarming 7.7 percent.

Digging deeper: According to the Peterson-KFF Health System Tracker , since 2000, prices for medical care have increased 119.2 percent – that’s 34 percent more than the rise in prices for all goods and services.

What it means: Hospital prices are one of the root causes of the inflation consumers are currently experiencing.

DATA SHOWS IMPORTANCE OF LOCAL PHARMACY PARTNERSHIPS WITH PBMS

Quick takeaway: Patients visit community pharmacies more than other healthcare providers by a 2 to 1 margin.

Digging deeper: Local pharmacists capitalize on their position by helping patients achieve their health goals, with benefits extending to improving care quality, cost-effectiveness, and overall community health. Increased use of pharmacy services by patients has meant an approximate 30 percent reduction in inpatient admissions and 18 percent reduction in Emergency Department visits, according to a recent study .

And, generally speaking, health services provided by local pharmacists play an important role in how patients receive care.

What it means: By working alongside their community pharmacist partners, pharmacy benefit managers (PBMs), like Elevance Health’s CarelonRx, are helping our healthcare system pivot away from volume and towards value .

SIXTY PERCENT QUIT WEIGHT-LOSS DRUGS TOO EARLY FOR BENEFITS

Quick takeaway: Almost 60 percent of Americans who started taking GLP-1 weight-loss drugs between 2014 and 2023 didn’t continue long enough to see meaningful health benefits, according to a study by the Blue Cross Blue Shield Association.

Digging deeper: About 30 percent of those who were prescribed the drugs stopped in the first month, according to the data.

What it means: While demand for these medications continues to go up, their effectiveness and long-term benefits remain unclear. Research shows the need for a deeper understanding of these drugs, their benefits, and the most effective way to sustain their positive impact. The potential cost of making GLP-1 medicines available to the estimated 40 percent of Americans with obesity, if not understood and controlled, could reach as high as $1 trillion annually .

Talking Points: 28 May 2024

Tue, 28 May 2024 13:52:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

PBM VALUE The problem of rising prescription drug prices leaves Americans looking for answers.

Quick takeaway: Big Pharma continues deflect ing responsibility for unreasonable and alarming prescription drug markups by blaming Pharmacy Benefit Managers ( PBMs ) for the rising cost of medicine.

Digging deeper: Drugmakers are at it again, shifting Congressional conversations surrounding how to address the cost of drugs by pointing figures at others along the supply chain – namely, PBMs. Two House Committees recently passed legislation that would include a so-called “delinking” policy in Medicare. The bad policy put forward by drugmakers won’t lower the cost of drugs and it restricts the sole entity in the supply chain, PBMs, that advocate for consumers and deploy market-based tools ensuring patient medication access at prices they can afford.

By the numbers:

Recent research by Reuters analyzed high drug costs and found that prices for new US drugs rose 35% in 2023 , more than the previous year.
Of the 47 drugs Reuters analyzed, at least 20 were priced above $350,000 per year .

What they’re saying: The only winner BIG PHARMA !

“The “delinking” policy would undermine incentives for pharmacy benefit companies to maximize competition in the market and secure savings for patients and health plan sponsors, resulting in higher drug prices, increased premiums, and handing drug companies a profit-boosting windfall. The result would be approximately an additional $10 billion every year for drug companies, while costing patients and payers up to $18 billion.”

-Casey Mulligan, University of Chicago Professor of Economics

“The latest egregious policy proposal, known as “PBM delinking,” illustrates this point, regulating how an employer can reimburse its PBM for services and hampering freedom of contract . The fact is, Congress should be encouraging innovative arrangements between PBMs, employers, and drug companies. Only flexibility in the market can deliver the reimbursement innovation that patients need to make pharmaceutical innovations affordable.”

– Joe Grogan, visiting senior fellow at the USC Schaeffer Center

“A significant share of these higher costs (an estimated $6.3 billion–$21.9 billion) would accrue to drug manufacturers…Therefore, the aggregate effect of delinking in the commercial market and Part D could be an increase of more than $32 billion in drug profits .”

-Alex Brill, CEO MGA Advisors and former policy director and chief economist for the U.S. House Committee on Ways and Means

Talking Points: 20 May 2024

Fri, 17 May 2024 17:54:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

WATCH OUT FOR COSTLY LEGISLATION BETWEEN ELECTION, SWEARING IN

Quick takeaway: In the months leading up to next year, the House and Senate have a slew of spending bills to pass in order to keep the government funded. Economist Ike Brannon highlights the potential negative ramifications of advancing PBM legislation that will actually increase costs rather than produce savings.

Digging Deeper : PBM reform is being considered as a financial offset to other costly legislation; however, these anti-PBM bills do not actually save the government money or lower drug costs.

What it means: Brannon discredits claims that an anti-PBM provision that was attached to a tele-health provision recently within the Ways and Means Committee would save money – setting the stage for future scenarios where costly provisions are also added to other must-pass legislation.

HOSPITALS CHARGED HEALTH PLANS ON AVERAGE 254% MORE THAN

Quick takeaway: A new report from the RAND Corporation shows hospital’s prices rose from 2020 to 2022, with health plans’ payments to hospitals amounting to on average 254% of Medicare rates in 2022 – up another 11% from 2021.

Digging Deeper : While hospitals claim they charge health plans more to offset losses from treating Medicare and Medicaid patients, the report highlights hospitals’ market share as a critical factor behind the rise in commercial upcharge.

What it means: As prices for commercial insurance remain high, look to employers and employee groups to continue to raise concern with unreasonable hospital billing practices, which are fueling healthcare inflation.

HOW MUCH IS MEDICARE SPENDING ON NEW DIABETES AND OBESITY DRUGS?

Quick takeaway: Almost a third of Medicare beneficiaries have diabetes – which has meant an uptick in the use of GLP-1 drugs, also used for weight loss.

Digging Deeper : New research from the Kaiser Family Foundation shows that spending on three of the most prominent diabetes medications – Ozempic, Rybelsus, and Mounjaro – reached $5.7 billion in 2022. The Medicare Trustees Report also found that drug expenditures in 2023 were significantly higher due to the unexpected rapid increase in the use of these drugs. Separate research from the American Enterprise Institute shows how Medicare spending likely changed due to the increased utilization of these drugs:

What it means: While the total fiscal impact of these drugs for Medicare remains to be seen, the combination of intense utilization, new uses, and high prices for these treatments is likely to place tremendous pressure on Medicare spending and Part D premiums.

PROVIDER NETWORKS CONTINUE TO GROW UNDER NO SURPRISES ACT

Quick takeaway: Recent data highlights that the No Surprises Act (NSA) has led to more doctors and specialists participating in health plans’ provider networks – an important outcome which increases access for patients to affordable care.

By the numbers: Approximately 67% of health plans announced increased provider networks since the enactment of the NSA. Importantly, this has coincided with zero health plans reporting decreases in provider networks.

What it means: This growth in provider networks comes despite an aggressive legal campaign launched by certain providers seeking to undermine the NSA’s vital consumer protections.

Spotlight

Talking Points: 13 May 2024

Fri, 10 May 2024 18:10:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

SENIORS IN RURAL AREAS BENEFITING FROM MEDICARE ADVANTAGE OPTIONS

Quick takeaway: Medicare Advantage (MA) beneficiaries in rural areas save more on healthcare costs and are more likely to utilize preventative services, such as mammograms or annual check-ups, than those enrolled in traditional Fee-for-Service (FFS) Medicare, according to new data .

Digging Deeper : Since 2010, Medicare Advantage enrollment quadrupled in rural areas, with more than 40 percent of Medicare eligible seniors in rural areas choosing MA plans.

Preventive Care: Medicare Advantage enrollees are more likely to report using key preventative care services and are less likely to report having an outpatient visit than those in traditional Medicare.
Enrollment Options: Individuals living in rural areas now benefit from having an average of 27 MA plans to choose from.

What it means: Seniors living in rural areas face unique healthcare challenges. MA is driving affordability for seniors in rural areas, in addition to increasing critical access to preventative care that leads to better health outcomes. Increased MA coverage for seniors in rural areas means they now have broader access to quality, affordable care.

INCREASED DOULA ACCESS IMPROVES MATERNAL HEALTH

Quick takeaway: A recent study shows that Doula support to pregnant women can improve health outcomes, especially among those at higher risk for maternal morbidity and mortality. Digging Deeper: In 2021, the maternal mortality rate increased from around 23 to 32 deaths per 100,000 births from the year prior. Currently 13 states reimburse for doula services with around 30 states in the process of implementing a Medicaid doula benefit.

Digging Deeper: In 2021, the maternal mortality rate increased from around 23 to 32 deaths per 100,000 births from the year prior. Currently 13 states reimburse for doula services with around 30 states in the process of implementing a Medicaid doula benefit.

What it means: States , including those with infant mortality rates higher than the national average, are utilizing Doulas as a potential pathway to address the problem – especially within Medicaid Managed Care.

SHOULD OBESITY DRUGS BE TAKEN FOREVER?

Quick takeaway: Research has shown that many individuals regain a significant amount of the weight they lost with the help of GLP-1 weight loss medications after they stop taking the medication.

By the numbers: This comes as more are utilizing these drugs, with one estimate that number could grow to nearly 70 million Americans taking GLP-1s in 2028. With the increase use of GLP-1 drugs in 2023, there was a 13.5 percent increase in spending on prescription drugs – totally $772.5 billion .

What it means: . The benefits and potential side effects of GLP-1 drugs used for weight loss, along with their prices, are attracting increased scrutiny as the number of patients who could receive these treatments expands.

VOTERS WANT TO HEAR FROM CANDIDATES ON HEALTHCARE AFFORDABILITY

Quick takeaway: At least eight in ten voters say it is “very important” for 2024 candidates to talk about healthcare affordability, along with inflation, according to recent KFF polling. Seven in ten also told KFF they think it is “very important” to hear presidential candidates talk about the Medicare program.

Digging Deeper: Healthcare is a key factor in why many rate the economy negatively, according to the poll.

Unexpected medical bills and healthcare costs top the list of expenses that Americans say they are most worried about.
3 out of 4 say they are “very” or “somewhat worried” about being able to afford unexpected medical bills.

What it means: . Healthcare affordability will continue to be paramount in this year’s election, with over half of those insured saying they are worried about being able to afford their premiums.

Spotlight

Talking Points: 6 May 2024

Fri, 03 May 2024 17:02:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

A FEDERAL BARRIER TO IMPROVING HEALTHCARE

Quick takeaway: A federal requirement limiting how much health plans can spend on non-medical services is a major barrier to improving the health of many low-income Americans, according to Martha Roherty, executive director of Advancing States

Digging Deeper: The Medical Loss Ratio (MLR), which caps spending on non-medical services at 15 %, discourages Medicaid Managed Care Organizations from investing in benefits aimed at addressing social drivers of health, which can impact as much as 80% of health outcomes .

What it means : Services like a ride to a doctor’s appointment, or a home-cooked meal after returning home from a hospital stay, are critical in helping patients get well. By amending the MLR to allow expanded spending on non-medical services, Congress could dramatically improve health outcomes for millions of Americans.

UNCHECKED HOSPITAL MERGERS INCREASED HEALTH COSTS

Quick takeaway: A new study highlights how a critical gap in antitrust enforcement for hospital mergers within the Federal Trade Commission (FTC) lead to increased healthcare costs of at least 5%.

By the numbers:

Between 2002 and 2020, the FTC took action against only 13 of 1,164 acute-care hospital mergers.
The study showed the FTC could have flagged 20% of the mergers, compared to the 1% they actually challenged.
90% of hospital markets are now considered highly concentrated.

Yale economist Zach Cooper, author of the study, shared that:

“Since 2000, hospital prices have grown faster than prices in any other sector of the economy. The average price of an inpatient admission is now nearly $25,000. We need to be doing more to preserve competition in U.S. hospital markets.”

What it means: The researchers highlight a lack of resources within the FTC as the primary factor in a lack of enforcement.

CONGRESS SHOULD ADOPT SITE-NEUTRAL PAYMENTS FOR HEALTHCARE

Quick takeaway: Two former secretaries for the Department of Health and Human Services (HHS) have come together across the political aisle to advocate for hospital billing reform.

Digging Deeper: Healthcare within a hospital setting is billed at a higher rate than at other locations for care. As hospitals acquire physician offices, they increasingly charge higher rates outside, billing for those services as if they were delivered in a hospital setting driving up healthcare costs.

What it means: Former HHS Secretaries Alex Azar and Kathleen Sebelius highlight how critical hospital billing reform would be for patients, saying “People should pay for the care they receive, not for the sign on the door.”

END OF INTERNET SUBSIDY THREATENS TELEHEALTH ACCESS

Quick takeaway: Millions of low-income Americans are at risk of losing the ability to see their doctors virtually unless Congress extends of the Affordable Connectivity Program.

Digging Deeper: Around 23 million households receiving financial help to afford their internet received healthcare through online appointments, according to a federal survey. That includes 5 million seniors and over 3 million families with a K-12 student receiving free or reduced-price lunch.

What it means: The program has been critical in expanding healthcare access for underserved communities and people with disabilities. A bipartisan bill to further fund the program has been introduced in the Senate.

Spotlight

Talking Points: 29 April 2024

Fri, 26 Apr 2024 16:24:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

EMPLOYERS HIGHLIGHT HARMFUL HOSPITAL REVENUE TACTIC

Quick takeaway: The CEO of the ERISA Industry Committee (ERIC), a nonprofit representing employers, has highlighted a troubling new tactic being deployed by many hospitals during their rate negotiations with health plans: dropping a patient’s insurer to demand much higher reimbursement rates.

Digging Deeper: Hospitals increasingly use this tactic to extract payment increases upwards of three times the rate of inflation – underscoring why hospital prices have increased more than 600% since 1990.

What it means : Hospital costs continue to be the top driver behind the rise of healthcare costs in the United States and make up the largest part of our healthcare spending dollar.

THE PATENT ABSURDITY OF PHARMACEUTICAL PRICES

Quick takeaway: Drugmakers exploit patent laws to protect monopolistic pricing over their products.

Digging Deeper: Patents are designed to spur innovation and allow entrepreneurs the ability to profit off an invention for 20 years. Ideally, after a patent expires, competitors are then able to bring their products to market, driving down prices for consumers.

However, this isn’t the case within the pharmaceutical industry, as highlighted by national think tank, R-Street. Drug manufacturers have been able to exploit several loopholes within the patent system to extend patents far beyond 20 years. One example is the process of filing new, secondary patents on an already existing product, which R-Street reports , has allowed for extensions for 70% of the top 100 drugs.

By the numbers: The cost to consumers, employers, and our entire health system for these extended monopolies on pharmaceuticals is staggering – in 2021, alone, $370 billion was saved through the use of generics and biosimilars. Not only that, the availability of more biosimilars could save another $100 billion over the next five years.

What it means: Increased scrutiny by Congress and the Federal Trade Commission (FTC) is mounting against drugmakers’ patent abuse. Addressing, patent abuse should continue to grow as a top policy issue in 2024 to effectively reduce drug costs.

HOSPITAL DRUG MARK-UPS RAISE PREMIUMS

Quick takeaway: New research from Oliver Wyman highlights how hospitals have profited off big mark-ups for specialty drugs, which are used to treat complex or rare, chronic medical conditions. It’s estimated that these mark-ups will increase premiums by $13.1 billion this year.

Digging Deeper:

Hospitals purchasing drugs from a manufacturer or distributor and then dispensing them to patients is called “buy and bill.” This has allowed hospitals and physicians to dramatically markup the price of drugs.

In response to runaway prescription drug costs, health plans work with pharmacy benefit managers (PBMs) to utilize specialty pharmacies to directly deliver cost-effective pharmaceuticals and prevent hospitals from marking up the price of these specialty drugs. This is known as “white bagging.”

By the Numbers:

The average provider mark-up on specialty drugs was 42%.
Drugs are up to 103% higher in cost when supplied by a hospital facility.
Physician offices marked up drug prices on average by $1,559, while hospitals marked up prices by $8,278.

What it means: Hospitals continue to look to profit off drug markups and bill by scapegoating PBMs and seeking to eliminate white-bagging.

EMPLOYER-PROVIDED COVERAGE BENEFITS COMPANIES AND THEIR WORKERS

Quick takeaway: Companies that provided health benefits saw improved recruitment and retention, better employee productivity. With over half of all Americans, more than 180 million, receiving health coverage through their jobs, employer-provided coverage continues to provide value for workers and their employers.

Digging Deeper:

A study from Avalere Health found that employers with 100 or more workers saw a 47% return on investment when offering health coverage in 2022.

Employers are estimated to see a return in productivity of $346.6 billion in 2026, including $108 billion in direct medical cost reductions, and $139.70 billion in tax benefits

What it means: Helping employees through offering competitive benefits is good for businesses and something which employees value – with a majority saying they prefer to get healthcare coverage through their employer rather than through the federal or state government.

Spotlight

Talking Points: 22 April 2024

Fri, 19 Apr 2024 15:51:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

NONPROFIT HOSPITALS PREDATORY BILLING PRACTICES RAISE CONCERN

Quick takeaway: Dr. Marty Makary of Johns Hopkins University writes that the nonprofit status of several large hospitals systems should be scrutinized by Congress for their predatory billing practices and lack of community benefit spending.

Digging Deeper: It’s come to light that many nonprofit hospitals engage in practices that would seem to counter the intent of “community benefit” spending – including suing and garnishing the wages of low-income patients who can’t afford to pay their hospital bills.

What it means : According to a recent study from Third Way, a national think tank, nearly half of all hospitals in the United States are nonprofits, exempting these systems from $15 billion in annual federal taxes and another $15 billion in local and state taxes.

CONGRESS SHOULD HELP EMPLOYERS OFFER COMPETITIVE BENEFITS

Quick takeaway: A small business owner lays out why it’s important for Congress to empower small business owners to manage prescription drug costs, which enhances their competitiveness with better health benefits.

Digging Deeper: In the United Sates, 66% of adults rely on prescription drugs, making affordable drug coverage a critical benefit for employers to offer their employees.

What it means: Thanks to Congress’s decision not to ban performance-based incentives for pharmacy benefit managers (PBMs), small businesses can continue to make more informed decisions that work for their budgets and their employees.

REPORT HIGHLIGHTS LARGE PRICE VARIATIONS WITHIN EMERGENCY ROOMS

Quick takeaway: According to a recent report, the cost of visiting an emergency room can vary significantly. This has left some patients with unexpectedly large bills ( upwards of $50,000) for minor injuries after staying at a hospital for only a few hours.

Digging Deeper: Prices associated with readying doctors and other personnel for trauma cases varied 16-fold across the hospitals studied. In some instances, they include a “trauma alert” fee which can cost thousands of additional dollars.

What it means: Excessive costs associated with emergency department visits is growing concern for healthcare stakeholders – especially as the average price paid for ER visits has increased more than 50% 2012 to 2019. The data suggests that some hospitals see treating minor injuries at ER’s as way to raise revenue.

VOTERS CONCERNED ABOUT LEGAL THREATS TO THE NO SURPRISES ACT

Quick takeaway: A new survey published by the Coalition Against Surprise Medical Billing (CASMB), shows that 3 in 4 voters are concerned that pending lawsuits from providers and hospitals could weaken the consumers protections within the No Surprises Act.

Digging Deeper: Almost 80% of voters are concerned that these lawsuits could increase health care costs for patients.

What it means: The No Surprises Act, which, according to estimates, has prevented more than 1 million surprise bills per month since its implementation in January of 2023, continues to be broadly popular.

Spotlight

Talking Points: 15 April 2024

Fri, 12 Apr 2024 17:43:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

SMALL BUSINESS OWNERS WANT DISHONEST BILLING TO BE FIXED

Quick takeaway: : Nearly 9 in 10 small business owners think the government should ban hospital “facility fees” and other unfair billing practices.

Digging Deeper: A majority of small business owners (58%) say they have been charged a hospital “facility fee” in addition to other charges on their hospital bill, according to new research by Small Business Majority. What it means Rising healthcare costs have forced many small businesses to change their employee benefit offerings and are impacting their business growth – nearly a quarter of those surveyed had dropped health coverage owing to higher costs – and around 21% reported having to raise prices on their goods and services as a result.

HARVARD-INOVALON STUDY: MA ENROLLEES LIKE BREADTH OF PLAN OPTIONS

Quick takeaway: A new study from Havard and Inovalon studied the many different plan options offered within Medicare Advantage (MA) and found MA’s incredible variety of plan options (average beneficiary gets 43 options) to be a key factor underlying the program’s growth.

Digging Deeper: The analysis also highlights why beneficiaries choose certain MA plans, with zero-premium plans being picked by more socioeconomically disadvantaged populations than higher-premium plans.

What it means: This research highlights the value of the MA program for millions of Americans who like the broad variety of plan types – especially those coming from socioeconomically disadvantaged communities.

ATTACKS ON PHARMACY BENEFIT MANAGERS WON’T REDUCE DRUG PRICES

Quick takeaway: EconomistIke Brannon, senior fellow at the Jack Kemp Foundation, highlights several state and federal efforts which would undermine the role pharmacy benefit managers (PBMs) play in reducing prescription prices.

Digging Deeper: In his piece , Brannon explains how pharmaceutical manufacturers have worked to enact regulation targeting PBMs, threatening to eliminate many of the tools they use to negotiate lower drug prices on behalf of health plans and employers.

What it means: Rather than piling unnecessary regulations onto PBMs, which would raise the price of prescriptions, Brannon argues that lawmakers should look to free-market solutions to allow PBMs to more effectively secure savings – such as allowing up-front, volume-based discounts for drugs (currently not allowed under the Robinson-Patman Act).

Spotlight

Talking Points: 8 April 2024

Fri, 05 Apr 2024 17:07:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

WHAT MEDICARE ADVANTAGE CUT MEANS FOR SENIORS

Quick takeaway: Seniors who choose Medicare Advantage (MA) plans face a potential $33/month increase in cost-sharing or reduction in supplemental benefits next year.

Digging Deeper: These increased costs will hit vulnerable MA seniors especially hard. According to the research , “Medicare Advantage enrollees were more likely to have incomes below $20,000 per person, live in urban areas, and have lower levels of education.”

What it means: Medicare Advantage is a critical program to more than 33 million American seniors, many of whom live on a fixed incomes and come from historically disadvantaged communities – any increase in out-of-pocket costs next year, coupled with recent inflation will impact these communities.

THE MOST EXPENSIVE STATES FOR HEALTHCARE 2024

Quick takeaway: Unexpected medical bills and the cost of healthcare services are the top two financial worries for Americans this year according to a Kaiser Family Foundation (KFF) health tracking poll – 45% of adults are very worried about being able to afford unexpected medical bills, while 39% are very worried about their ability to cover the cost of healthcare services.

Digging Deeper: Four of the top 10 most expensive states for healthcare are battleground states, including: North Carolina, Florida, Georgia, and Arizona.

What it means: With a closely divided electorate going into an Election Year, Gallup reports 39 percent of voters have said they’d be willing to cross party lines to vote for a candidate whose top priority is reducing healthcare costs.

REDUCING HEALTHCARE COSTS AT TOP OF PEW STUDY OF AMERICANS’ CONCERNS

Quick takeaway: A recent study by Pew of Americans’ top policy priorities for 2024 included “reducing healthcare costs” within the top 4 areas of concern.

Digging deeper: This isn’t surprising. More and more Americans are impacted by the rising price of healthcare within the United States – and are looking for solutions from lawmakers.

What it means: The rising cost of healthcare has meant some have had to put off needed care. According to a recent study , 1 in 4 say that in the past 12 months they have skipped or postponed getting healthcare they needed because of the cost.

Spotlight

Talking Points: 1 April 2024

Fri, 29 Mar 2024 17:43:00 GMT

A deeper dive into a key issue driving the healthcare reform conversation.

Week in Review

FACILITY FEES A new report exposes hospitals charging billions in facility fees for routine care.

Quick takeaway: A recent report by The Wall Street Journal exposes the alarming trend of hospitals adding facility fees onto medical bills for routine care, which raises prices by hundreds of dollars for widely-used and standard medical care, including colonoscopies, mammograms, and heart screenings.

Digging deeper: These charges appear on patients’ bills often after a large hospital system has acquired a physician practice. Hospitals then begin classifying these newly purchased clinics as a part of their existing main hospital facility, forcing patients or their health plans to bear added costs.

What it means: The report highlights that Medicare likely overpaid for certain services by about $6 billion because of these facility fees in 2021. It’s no wonder prices at hospitals have increased by an alarming 600% in only 35 years.

WASTEFUL SPENDING Nearly a quarter of all healthcare spending is estimated to be wasteful.

Quick takeaway: Estimates show that nearly a quarter – as much as $935 billion each year – of total healthcare spending is the result of waste.

Digging deeper: The United States spends more on healthcare than any other country, with costs approaching 18% of Gross Domestic Product (GDP). One reason for this is the amount of unnecessary, inappropriate, and in some cases, even harmful, services.

What it means: Healthcare inflation only compounds the issue, adding to an already unsustainable fiscal outlook in the U.S. With around two-fifths of all healthcare spending through government, eliminating wasteful spending, could dramatically improve our nation’s fiscal wellbeing, saving taxpayers billions.

CHARITY CARE New analysis shows 4 out of 5 nonprofit hospitals give back less to their communities than they receive in estimated tax breaks.

Quick takeaway: Federal, state, and local laws exempt nonprofit hospitals from many taxes under the assumption they will give back to their communities through a variety of programs, including patient substance abuse treatment and financial assistance.

Digging deeper: Analysis by the Lown Institute has found that more than 1,900 nonprofit hospitals contribute less to their communities than they receive from the government in tax breaks – adding up to billions. In fact, some of the largest nonprofit hospitals fall woefully short by hundreds of millions of dollars .

WEIGHT-LOSS Rx Medicare spending on new weight-loss drugs is skyrocketing.

Quick takeaway: Drugs such as Ozempic, Wegovy, and Mounjaro, which fall under the GLP-1 category of medications, were initially developed to treat type 2 diabetes. However, these drugs are now widely known as anti-obesity medications.

Digging deeper: An analysis by the Kaiser Family Foundation shows that total gross Medicare spending on these medications has skyrocketed in recent years – jumping from $57 million in 2018 to $5.7 billion in 2022 . Additionally, the Congressional Budget Office (CBO) released a presentation noting that they expect anti-obesity drugs to cost the federal government more than it would save from reducing other healthcare spending—which would lead to an overall increase in the deficit over the next 10 years.

What it means: While weight-loss drugs still can’t solely be covered under the Medicare Part D prescription drug program, the program can cover GLP-1s for their other medically-accepted indications – including diabetes. That now also includes cardiovascular risk in adults with obesity based on a recent memo from CMS.

Spotlight

Talking Points: 26 March 2024

Tue, 26 Mar 2024 17:22:00 GMT

A deeper dive into a key issue driving the healthcare reform conversation.

Week in Review

MEDICARE ADVANTAGE VALUE The Medicare Advantage (MA) program continues to outperform original Medicare.

Quick takeaway: By focusing on coordinated care and whole-person health, MA plans drive better value for senior enrollees, such as improved health outcomes, lower costs, and greater access to more benefits.

Digging deeper: A growing body of research reinforces how MA outperforms original Medicare in a variety of ways, including:

Better health outcomes – MA enrollees see fewer avoidable hospitalizations and readmissions, as well as lower rates of high-risk medication use
Cost savings – MA offers enrollees $2,400 in annual savings by delivering lower premiums and reducing out-of-pocket spending
Health equity – Latino, Black, and Asian Medicare eligible enrollees are significantly more likely to choose MA plans over original Medicare

What it means: With 26 million Baby Boomers expected to age into Medicare by the end of this decade, there’s growing concern over the financial health of the program.

Research highlights that MA delivers the same benefits as original Medicare for 83 cents on the dollar . With the remaining savings, MA plans can offer even more benefits, often including vision, dental, and hearing coverage.

It’s no wonder that another recent study shows that if original Medicare was run like MA, the life of the program would be extended by 17 years , ensuring that it’d be around for the next generation of seniors.

Spotlight

Talking Points: 18 March 2024

Fri, 15 Mar 2024 17:57:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MA SUPPORT Stakeholders rush to the defense of Medicare Advantage.

Quick takeaway: A diverse group of provider and patient advocacy groups from across the country urge the Administration to protect the Medicare Advantage (MA) program.

Digging deeper: More than 90 MA stakeholders representing community-based organizations, physician groups, and beneficiary advocates at the national and state level sent a letter to the Centers for Medicare & Medicaid Services (CMS) last week calling on the agency to promote stability in the program, which now serves more than half of all Medicare-eligible seniors in the country.

Specifically, the letter urges CMS to fully account for beneficiaries’ rising health needs – and, the associated costs – before finalizing proposed changes to how MA is funded and administered.

What it means: The urgent appeal from these organizations builds on similar support from a bipartisan group of more than 60 U.S. Senators who also reached out to CMS on behalf of the 33 million American seniors enrolled in MA plans.

HOSPITAL CHARGES Trauma centers charge patients more for non-trauma care.

Quick takeaway: Hospitals designated as trauma centers charged higher prices for non-trauma patient admissions and emergency department (ED) visits than non-trauma center hospitals.

Digging deeper: Hospital prices have become the single largest driver of healthcare spending. This is often a reflection of the component makeup of the hospital market, which a new study brings into sharp relief.

According to research published in Health Affairs , prices for non-trauma inpatient admissions were 4.4 percent higher at hospitals with trauma center designations compared to non-trauma center hospitals, while prices for non-trauma ED visits were 5.2 percent higher in trauma center hospitals compared to non-trauma center hospitals.

What it means: Trauma centers are highly regulated and endowed by regulators with monopolistic control over their service areas. In most states, regulations encourage the entry of new trauma centers into markets that don’t have any, while restricting new entry into areas that do.

This, in turn, creates local monopolies for hospitals bearing the trauma center designation allowing them to exploit their market power over trauma services to raise prices for non-trauma services.

MEDICAID & SDoH Medicaid establishes itself as a critical component in addressing social drivers of health.

Quick takeaway: The coronavirus pandemic exposed critical health disparities, shining a light on the impact of underlying social determinants of health (SDoH) on overall health and well-being.

Digging deeper: On this side of the public health crisis, our approach to SDoH continues to reshape our thinking around access and how we better ensure previously underserved populations are able to get the care they need.

This has increasingly found traction in the Medicaid space, with managed care organizations (MCOs) operationalizing programmatic changes to support this approach, as detailed in a new analysis .

What it means: What researchers found is that heightened awareness of SDoH has led to a surge in identifying health-related social needs (HRSN), but limited options to address them.

However, through interviews with MCOs, researchers were able to identify a handful of opportunities to facilitate an institutional approach to HRSN. For example:

Fostering a culture of accountability and innovation
Encouraging partnerships with community-based organizations
Expanding payment approaches to include SDoH

Rx AFFORDABILITY Experts offer up policy solutions to enhance prescription drug affordability.

Quick takeaway: As consumers continue to struggle under the weight of out-of-control drug prices, stakeholders focus on ways policymakers could actually help , rather than be led astray by the pharmaceutical industry’s finger-pointing.

Digging deeper: Drugmakers have managed to hijack the conversation surrounding high drug prices, successfully blaming others along the supply chain for why prices keep going up. But, for there to be meaningful movement in a better direction, it’s important that legislative and regulatory energies are correctly focused.

In particular, the continued attacks levied against pharmacy benefit managers (PBMs) seems to have successfully redirected the narrative, despite the fact the PBMs actually generate $145 billion in savings annually.

In mapping out a vision for an “ Affordable Future ,” 3 key areas were identified by stakeholders:

Ensuring system sustainability by promoting competition
Supporting and equipping clinicians with tools and data to optimally serve patients
Enhancing patient outcomes and improving the patient experience

What it means: Left unsaid is a reminder of who really bears responsibility for the unsustainable trajectory of drug prices.

Spotlight

Talking Points: 11 March 2024

Fri, 08 Mar 2024 18:49:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Studies reinforce the value of Medicare Advantage.

Quick takeaway: A growing body of research underscores how Medicare Advantage (MA) excels in delivering better quality care and lower costs to 33 million beneficiaries compared to original Fee-for-Service (FFS) Medicare.

Digging deeper: Four recent studies show how MA delivers higher quality healthcare at lower costs to more diverse populations, with better rates of preventive services, and increased taxpayer savings:

Trust fund solvency . Data demonstrates that if FFS was run as efficiently as MA, spending would decrease, extending the life of the program by 17 years.
MA value . A strict apples-to-apples comparison shows that FFS costs more than government estimates, suggesting that MA delivers critical savings to the program.
HEDIS measures . Health Effectiveness Data and Information Set (HEDIS) measures detail how MA plans provide superior quality of care and better rates of preventive services than FFS, while delivering greater cost efficiency.
Demographics . More Americans from diverse populations choose MA over FFS than ever before.

What it means: Against this backdrop, stakeholders are warning the Administration that proposed cuts to Medicare Advantage’s underlying funding and administrative structure would not only further destabilize the program after years of similar cuts and modifications, but lead to increased costs and reduced benefits for the more than half of all Medicare-eligible seniors now enrolled in MA plans.

PRIOR AUTHORIZATION Medicare acknowledges the importance of prior authorization.

Quick takeaway: Despite the inflamed rhetoric surrounding the use of prior authorization, the Medicare program is quietly adding pre-treatment approval requirements .

Digging deeper: The inclusion of prior authorization before patients can receive care at certain outpatient facilities that have seen a sharp increase in billing clearly shows that even Medicare recognizes how important a tool prior authorization is in helping control costs.

What it means: States and the federal government have focused their attention on cracking down on prior authorization. However, their efforts overshadow the critical role care coordination plays, which is to make sure that health plans and governments don’t waste money on, or expose patients to, inappropriate or ineffective care.

SURPRISE MEDICAL BILLING Consumer protections against surprise medical bills lead to increased access.

Quick takeaway: New data shows an increase in in-network participation among providers and specialists in the wake of the No Surprises Act ( NSA ).

Digging deeper: The report, compiled by FAIR Health, analyzed national claims data from 2019 to 2023 (which includes 2 years under the NSA ) and focused on four specialties frequently associated with surprise medical bills: Anesthesia, emergency medicine, pathology, and radiology.

Highlights from the report include:

Between the 4 ^th quarter of 2021 and through the 1 ^st quarter of 2022 (when the NSA went into effect), there was an observable increase in in-network percentages nationally, in all regions and across all specialties.
In-network percentages across all specialties increased 7 percent from the beginning of 2019 to the 3 ^rd quarter of 2023.
Over that same period, radiology had the highest percentage of in-network claims at over 89 percent and increased by 4 percent.
Meanwhile, emergency medicine had the lowest percentage of in-network claims, but the greatest increase overall at 13.2 percent.

What it means: As highlighted last week , disputes over surprise medical bills continue to vastly outpace initial projections.

However, the NSA also continues to prevent more than 1 million surprise medical bills from hitting patients every month, while growing provider networks.

PBM VALUE Employers value their relationships with their PBMs.

Quick takeaway: Pharmacy Benefit Mangers ( PBMs ) give employers choice and flexibility when it comes to providing quality, affordable prescription drug benefits to their employees.

Digging deeper: The operative words in describing the relationship PBMs share with their employer customers and plan sponsors are choice and flexibility .

Owing to the pharmaceutical industry’s manipulation of the prevailing narrative surrounding out-of-control drug prices, so much of the legislative and regulatory focus aimed at bending that cost curve down has centered around PBMs’ role in the larger drug supply chain.

But, stakeholders are pushing back, reminding lawmakers and regulators that decision-making is what lies at the heart of this relationship – in other words, PBMs make benefits recommendations to their customers based on their unique needs. It’s those customers who then decide for themselves how to customize their benefits.

What it means: Beyond that, stakeholders are also reinforcing that it’s drugmakers who ultimately bear responsibility for driving up healthcare costs for everyone through their pricing practices and anti-competitive tactics.

Spotlight

Talking Points: 4 March 2024

Thu, 29 Feb 2024 18:53:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE CUTS Proposed changes to Medicare Advantage threaten benefits and increased premiums.

Quick takeaway: Seniors enrolled in Medicare Advantage (MA) plans may face benefit cuts or premium increases of nearly $400 on average next year.

Digging deeper: With cuts to the MA program looming, a new study estimates that beneficiaries may see a $33 reduction in benefits or increased premiums each month in 2025 , should recently proposed changes by the Centers for Medicare & Medicaid Services (CMS) be finalized.

As has been highlighted , CMS released its annual proposed changes to how MA is funded and administered in late January. After years of cuts and other administrative modifications, the cumulative impact of these annual changes has not only eroded the blanket of comprehensive coverage that 33 million American seniors now depend on, but driven up their costs, as well.

What it means: MA has distinguished itself from original Medicare by focusing on beneficiaries’ whole health. That’s seen plans design benefits around coordinated care, driving improved health outcomes and helping advance better health equity .

It’s no wonder the program remains so popular with Medicare-eligible seniors, more than half of whom are now enrolled in MA plans.

Rx LAUNCH PRICES Launch prices for prescription drugs go through the roof.

Quick takeaway: Last year, drugmakers jacked up the launch prices of new drugs 35 percent.

Digging deeper: According to a new analysis, the median annual list price for a new drug in the U.S. hit $300,000 in 2023 – that’s up from $222,000 in 2022, which, in turn, was up from $180,000 in 2021.

While higher prices might initially be justified for a drug with a lot of value to patients, more than half of the new products approved by the Food & Drug Administration in 2022 and 2023 were for rare conditions that often lack therapeutic alternatives, giving pharmaceutical companies negotiating leverage to set astronomically high prices.

That’s left many wondering why these prices keep going up without any clear rationale.

What it means: The new data comes on the heels of drugmakers raising prices on over 900 products in January.

Meanwhile, a separate report found that prices for prescription drugs in the U.S. are much higher than in other countries.

PROVIDER FEES Administrative fees charged by doctors are on the rise.

Quick takeaway: Whether it’s signing patient documents or responding to their questions, providers are increasingly charging fees for these tasks.

Digging deeper: As demands on physicians’ time has gone up, the response has been to make sure they’re compensated accordingly. But, with those fees being as high as a few hundred dollars, it’s consumers who find themselves on the hook.

What it means: A recent study further reinforces the growing scope of billable services .

During the coronavirus pandemic, charges for electronic, asynchronous clinician-patient messaging – or, e-visits – became the norm.

However, on this side of the public health crisis, those charges have persisted, suggesting that health systems’ interest in e-visit billing has evolved from a short-term pandemic necessity to a lucrative source of long-term revenue.

SURPRISE MEDICAL BILLS Disputes over surprise medical bills soar.

Quick takeaway: Consumer protections against surprise medical bills have forced some providers to replace their former business practice of balance billing patients with arbitration, burying arbiters under an avalanche of independent dispute resolution (IDR) requests.

Digging deeper: The No Surprises Act ( NSA ) was enacted to protect consumers from providers’ surprise medical billing, which occurs when patients receive care at in-network facilities from out-of-network (OON) clinicians and specialists, such as anesthesiologists and radiologists or in emergency care settings.

However, since going into effect in 2022, the amount of disputed claims submitted to the IDR process by OON providers, facilities, and air ambulance service providers has exponentially exceeded initial estimates – more than 13 times what had been forecasted.

Not only that, according to recently released data from the Administration:

OON provider claimants prevailed in 77 percent of disputes
Over 80 percent of disputes resulted in insurers having to pay more than they would in-network providers
58 percent of all disputes initiated were instigated by just three entities

What it means: Despite the sheer volume of IDR requests (and how they were ultimately adjudicated), during the first nine months of 2023, the NSA prevented more than 10 million surprise medical bills from blindsiding Americans.

Spotlight

Talking Points: 26 February 2024

Fri, 23 Feb 2024 16:42:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Stakeholders defend the value of Medicare Advantage.

Quick takeaway: A growing chorus of voices is urging the Administration to protect beneficiaries from more harmful cuts to the Medicare Advantage (MA) program.

Digging deeper: As has been covered , proposed changes to MA by the Centers for Medicare & Medicaid Services (CMS) threaten to increase costs and reduce benefits for the more than 33 million American seniors now enrolled in the program.

In response, stakeholders from across the healthcare spectrum have urged the agency to protect MA and focus on policies that, instead, promote stability in the program.

What it means: A growing body of research continues to highlight how MA has distinguished itself from original Medicare by providing more efficient, choice-driven, and cost-effective coverage – which is why over half of all Medicare eligible seniors are now enrolled in MA plans.

MATERNAL HEALTH Doulas improve maternal health.

Quick takeaway: A growing focus on maternal health in the U.S. has led to innovative approaches to driving better outcomes.

Digging deeper: The maternal mortality rate in this country has exceeded that of other developed countries for years. One approach to address this crisis includes offering doula support to women during pregnancy, the delivery process, and the postpartum period.

Doulas , who are trained, non-clinical professionals, aid pregnant women before, during, and after childbirth by providing emotional, physical, and educational support.

According to a new study from the Elevance Health Public Policy Institute, compared to women not receiving doula care, women with doula support demonstrated:

Lower prevalence of caesarean section (C-section)
Higher prevalence of postpartum visit attendance
Lower prevalence of postpartum anxiety or depression

What it means: The report concludes with policy considerations based on lessons learned from the Medicaid managed care plans offering doula services that were a part of the analysis, including:

The importance of fostering a sustainable relationship between plans, state Medicaid programs, community-based and local organizations, and doulas
The need to reduce barriers keeping doulas from becoming Medicaid providers
Consideration of patient volume in reimbursement design to encourage doulas to participate in Medicaid

MEDICAL BILLS Consumers are vulnerable to provider overcharges.

Quick takeaway: Examples abound of people finding themselves on the wrong end of an unexpected charge for medical services.

Digging deeper: Case in point, the recent example of a couple who was billed $600 apiece for what should have been free colonoscopies.

While the procedures themselves were covered as preventive services, the gastroenterology provider exploited a loophole in the law, which requires preventive care to be made available at zero-cost to patients, but is without any such requirement that the provider has to code the claim correctly.

As it turns out, the gastroenterology center tacked on the $600 for “surgical trays” in lieu of a separate fee for “use cost” for the facility.

What it means: While a lot of attention has been paid to addressing hospital “ dishonest billing ”, which occurs when these health systems reclassify a doctor’s office they own as a hospital setting in order to charge more, it’s worth remembering that provider overcharges can take different forms.

DIGITAL HEALTH Virtual care has established itself as an integral part of our evolving healthcare delivery model.

Quick takeaway: The coronavirus pandemic helped normalize virtual care in how, when, and where people access healthcare.

Digging deeper: On this side of the public health crisis, a new study shows telehealth use continuing to gain traction, indicating that consumers have fully embraced virtual care.

Among the findings:

90 percent of consumers agree that virtual care provides access for those who are unable to visit a doctor in person
81 percent believe that the healthcare system is improving as a result of the integration of virtual care
75 percent said they not only find virtual care useful, but plan to keep on using it
73 percent said they would recommend virtual care services to their family and friends

What it means: While it’s clear that consumers value virtual care, the report goes on to highlight the importance of integration of these technologies into our existing model to fully realize these benefits.

For instance, a hybrid model combining in-person visits with virtual care enables timely interventions, reduces travel burdens, and facilitates continuous monitoring and support, all leading to improved health outcomes.

Spotlight

Talking Points: 19 February 2024

Fri, 16 Feb 2024 17:47:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Lawmakers defend Medicare Advantage.

Quick takeaway: A group of 16 members from the U.S. House of Representatives sent a letter to the Centers for Medicare & Medicaid Services (CMS) urging the agency to protect Medicare Advantage (MA), given the program’s critical role to an increasingly diverse population.

Digging deeper: In the letter, driven by Reps. Darren Soto (Florida), Steven Horsford (Nevada), and Ami Bera (California), the Representatives note that MA has helped to dismantle barriers to high-quality care for diverse populations, including the approximately 54 percent of Medicare beneficiaries from African American, Latino, and Asian Pacific Islander communities who choose MA plans.

What it means: Late last month, CMS proposed its latest changes to how the MA program is administered and funded, continuing a pattern that, in recent years, has chipped away at what’s made MA so much more effective and popular than original Medicare.

PATENT ABUSE Big Pharma’s continued abuse of the patent system drives up healthcare costs for everyone.

Quick takeaway: By manipulating the patent system, pharmaceutical manufacturers are able to stymie generic competition and keep their prices artificially high.

Digging deeper: As previously covered , drugmakers have already raised prices on hundreds of products to start the year – 910, by last count, at an average of 5 percent. In fact, between 2011 and 2021, annual spending on prescription drugs in this country jumped 64 percent, from $366 billion to $603 billion.

Given this alarming trajectory, greater attention is being paid to what’s driving prices – namely, patent abuse.

What it means: Drugmakers have become experts in obtaining patents that fail to advance new drugs or new innovations for existing products. This type of patent abuse forces patients to wait years – sometimes even decades – for less expensive, generic versions of pricey medicines to come to market. A recent analysis of the 12 bestselling drugs in the U.S. found that these drugs had an average of 74 patents, which meant patients had to wait 40 years before even being able to access generic alternatives.

CHARITY CARE Hospital charity care draws increased scrutiny.

Quick takeaway: The level of community benefits provided by nonprofit hospitals falls woefully short of their obligations.

Digging deeper: In exchange for their tax-exempt status, nonprofit hospitals are required to provide free or discounted healthcare or make investments in their communities. However, data has shown the value of the benefits these systems receive as a result of their tax exemptions far eclipses the amount of charity care they provide.

There are approximately 3,000 nonprofit hospitals in this country. And, as recently as 2020, these hospitals saved $28 billion in taxes, but only provided $16 billion in charity care.

What it means: Increasingly, most nonprofit hospitals no longer have local boards that can help direct community benefits. Owing to consolidation, many of them are now part of larger hospital chains. The fact that the Internal Revenue Service (IRS) doesn’t require these health systems to provide a minimum level of community benefits only compounds the issue.

But, states have turned their attention to the issue, increasing their oversight of nonprofit hospitals’ financial assistance policies.

For their part, federal lawmakers have also focused their legislative attention on cracking down on the tax-exempt status of nonprofit hospitals, increasing scrutiny of the level of charity care spending by these systems.

SOCIAL DRIVERS Medicaid explores a more holistic approach to beneficiaries’ overall health.

Quick takeaway: By broadening its focus to include social drivers of health, like housing, transportation, and food security, the Medicaid program is looking to better address health inequities and drive better health outcomes.

Digging deeper: Research has established that whole person health is driven by many factors. Separate and apart from medical-related issues, where someone lives, how they get around, and what kind of access they have to healthy foods, all contribute to a person’s health and well-being.

With that in mind, Medicaid administrators are working to enhance a programmatic focus on social drivers of health by giving states greater flexibility around what types of services they can include in their Medicaid programs.

What it means: A pilot program was just jointly announced by the Departments of Health and Human Services (HHS) and Housing and Urban Development (HUD) in which eight states, along with Washington, DC, were selected to participate in a new federal initiative known as the Housing and Services Partnership Accelerator . The program is aimed at helping states unlock federal resources to reduce homelessness by addressing health-related social needs.

Spotlight

Talking Points: 12 February 2024

Thu, 08 Feb 2024 19:05:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Proposed changes to Medicare Advantage threaten affordability and benefits for millions of American seniors.

Quick takeaway: Yearly funding cuts and administrative changes to the Medicare Advantage (MA) program continue to weaken the blanket of care that more than half of all Medicare eligible beneficiaries now depend on.

Digging deeper: Late last month, the Centers for Medicare & Medicaid Services (CMS) released its annual proposed changes to how MA is funded and administered, which would effectively result in funding cuts to the program.

But, that’s only part of the story. Stakeholders are quick to point out that those cuts come on top of years of other cuts and administrative changes, the cumulative effect of which has eroded the benefits being offered by MA plans, while driving up costs.

What it means: More than 32 million seniors are now enrolled in MA plans, and that number is only expected to keep growing. With its focus on care coordination and enhanced benefits, it’s not surprising that the overwhelming majority of MA beneficiaries are satisfied with their plans. Which is also why the majority of senior voters say they would be more likely to vote for their Member of Congress if they protected funding for the program.

Rx PRICES Big Pharma exploits patent laws to protect their profits.

Quick takeaway: Anticompetitive tactics, like patent thickets, allow drugmakers to prevent more affordable alternatives from coming to market.

Digging deeper: By making minimal tweaks to existing products, pharmaceutical manufacturers are able to wrongly extend the term of a drug’s patent protections. Patent thickets are what happens when multiple patents are filed to cover these little changes to products – often with little to no value.

A study late last year discovered that the use of these patent thickets on just four drugs extended the monopolies enjoyed by their manufacturers by a combined 25 years .

Now, a new study shines light on how manufacturers of blockbuster GLP-1 weight loss drugs are exploiting patent thickets to protect the monopolies on their products.

What it means: With so much attention being paid to what’s behind rising prescription drug spending, we don’t need to look far to find out who’s really responsible .

HOSPITAL Rx PRICES Hospitals significantly markup the prices of critical drugs.

Quick takeaway: Major price hikes on cancer and other specialty drugs by hospitals drive up healthcare costs.

Digging deeper: A new study found that hospitals charge as much as 300 percent higher for infusion drugs than what they pay for them. By comparison, hospitals are limited to charging Medicare just 6 percent above the acquisition price for these drugs.

Physician- or hospital-infused drugs account for about one-third of total drug spending, with these markups undoubtedly playing a significant role.

What it means: The substantial revenues hospitals earn from administering infused drugs has only served to incentivize hospital consolidation, as these health systems look to merge with each other or acquire physician offices to increase drug volumes and raise prices.

Other negative downstream impacts include limitations to patient access to these marked up drugs or increased cost-sharing, as well as drugmakers raising the prices of these drugs to tap into the revenue stream being monetized by hospitals.

Spotlight

Talking Points: 5 February 2024

Fri, 02 Feb 2024 21:16:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Lawmakers defend Medicare Advantage.

Quick takeaway: A bipartisan group of Senators urge the Administration to protect and strengthen the Medicare Advantage (MA) program.

Digging deeper: Ahead of the Centers for Medicare & Medicaid Services (CMS) releasing its annual proposed changes to how MA is funded and administered, 61 Senators – led by Sens. Catherine Cortez Masto (D-Nevada), Tim Scott (R-South Carolina), Gary Peters (D-Michigan), and Shelley Moore Capito (R-West Virginia) – sent a letter to the agency, urging them to maintain “ payment and policy ” stability in the program.

What it means: The MA program finds itself the target of a growing amount of political angst, despite overwhelming support from beneficiaries enrolled in Medicare Advantage plans, who not only continue to voice high satisfaction with their plans, but say they’re looking to lawmakers to protect the program.

Up next: As expected, CMS released its proposed changes to MA last week. Be sure to keep an eye out for how you can raise your voice to help protect the 32 million Americans enrolled in the program from higher costs, decreased access, and fewer benefits.

Rx COSTS Drugmakers’ pricing practices and anti-competitive tactics drive up healthcare costs.

Quick takeaway: A growing body of research undermines Big Pharma’s ongoing efforts to distract from who’s really to blame for high drug prices.

Digging deeper: The numbers speak for themselves:

Pharmaceutical manufacturers’ patent abuse increased costs by more than $40 billion in just one year
Patent thickets on just five drugs cost over $16 billion in a single year
Unjustified price hikes on just eight drugs cost an additional $1.2 billion in 2022
Between 2006 and 2020, drugmakers consistently increased prices above the rate of inflation
775 drugs have already seen price hikes in 2024
The median launch price for new drugs in 2022 was over $220,000

What it means: The data, while undeniably alarming, serves as an important reminder that drugmakers are responsible for out-of-control drug prices – and, voters are looking to lawmakers to hold the industry accountable.

SURPRISE BILLING The No Surprises Act prevented millions of surprise medical bills.

Quick takeaway: Through the first nine months of last year, consumers were protected from 10 million surprise medical bills .

Digging deeper: A new survey estimates that more than one million surprise medical bills were prevented each month through September of 2023.

Additionally, nearly 80 percent of disputed claims were resolved before triggering the independent dispute resolution (IDR) process, which sits at the center of so much of the opposition to the rule.

Before the No Surprises Act (NSA) was enacted, CMS estimated that 17,000 claims would go to IDR each year. But, since going into effect in 2022, the actual number has blown way past expectations.

Still, the vast majority of claims have been resolved without going to IDR.

What it means: While numerous legal challenges – initiated by providers – have worked to erode the consumer protections put forward by the NSA, it’s hard to deny that the rules are protecting patients as intended.

UNNECESSARY CARE Prior authorization plays a critically important role in protecting patients and our healthcare system.

Quick takeaway: Care coordination is a necessary tool that guards against waste, fraud, and abuse, while ensuring better patient safety and outcomes.

Digging deeper: It’s estimated that 30 percent of all healthcare spending in this country is unnecessary. Not only that, a lot of the care driving that spending can also be harmful.

In fact, low-value care costs our healthcare system $340 billion every year . Meanwhile, 87 percent of doctors reported negative health impacts as a result of low-value care.

What it means: With healthcare costs on the rise, a lot of attention is being paid to what’s driving those costs, including increased legislative focus on prior authorization.

Stakeholders are working to remind lawmakers and regulators in Washington and in state capitals across the country that prior authorization is not only evidence-based, but, as the data shows, promotes safe and affordable care for patients.

Spotlight

Talking Points: 29 January 2024

Fri, 26 Jan 2024 19:39:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

Rx PRICES Drugmakers raise prices on hundreds of products.

Quick takeaway: More than 700 drugs have already seen average price increases of 4.5 percent this month.

Digging deeper: As previously highlighted , pharmaceutical manufacturers wasted no time, ringing in the New Year by doing what they do every January – namely, hiking up the prices on hundreds of their products.

So far, 775 drugs have had their prices go up in January, including new weight-loss drugs, Ozempic and Mounjaro.

What it means: Worried stakeholders point out that these price increases are arbitrary and place undue strain on our healthcare system, while jeopardizing access to life-saving medicines for millions of Americans.

These price hikes also highlight the unilateral pricing power that Big Pharma wields, not just over the pharmaceutical supply chain, but over the health and well-being of patients across the country.

CHARITY CARE Hospitals fall short of their charity care obligations.

Quick takeaway: Research continues to show nonprofit hospitals failing to meet community benefit standards .

Digging deeper: As a condition of their tax-exempt status, nonprofit hospitals are required to offer financial assistance (free or discounted care, or “charity care”) to low-income patients, in addition to engaging in other activities to promote community health.

However, these facilities are coming under increased scrutiny for falling well short of these commitments, as well as aggressively going after patients for payments and paying massive, multi-million dollar salaries to their executives.

What it means: It’s estimated that nonprofit hospitals’ tax-exemptions are worth about $28 billion – 44 percent of their net income. Meanwhile, these same health systems’ median charity care provided as a percentage of operating expenses fell to just 0.99 percent in 2022.

MEDICAID + SDoH States invest in addressing social health drivers.

Quick takeaway: State Medicaid programs are working to cover the costs of non-medical care for high-risk enrollees in order to minimize health disparities and reduce long-term spending.

Digging deeper: Medicaid recipients encounter significant barriers to care as a result of social determinants of health ( SDoH ), such as lack of transportation, economic instability, and food insecurity.

But, states are increasingly exploring how investments in the SDoH space can not only help alleviate some of the issues, but bring down healthcare costs in the long run.

What it means: As covered in a previous newsletter , Medicaid’s growing focus on the impact that social health drivers have on an individual’s overall health and well-being has led to greater investment by Medicaid managed care organizations, as they seek to operationalize a programmatic approach to SDoH.

SITE NEUTRAL Healthcare prices vary widely depending on where procedures are performed.

Quick takeaway: Hospital outpatient prices for common medical services are substantially higher – and, rising faster – than prices for those same services delivered at other locations.

Digging deeper: A new study puts a finer point on the importance of site neutral payments, which hold that payments for medical services should be the same, irrespective of where that service is performed.

Why this matters is that the price for these services are much higher when they’re billed as having taken place in a hospital.

According to the results of the analysis, hospital prices were as much as five times higher compared to ambulatory surgery centers (ASCs) or physician offices. Not only that, hospital prices are also increasing much more rapidly (27 percent) than prices at ASCs (11 percent) or physician offices (2 percent).

What it means: Lawmakers in state capitals across the country have taken up the issue, such as in Indiana , where legislation was passed last year targeting hospitals’ “dishonest billing.”

Federal lawmakers are also working to address the issue, with both the House and Senate working to advance hospital billing reform legislation.

Spotlight

Talking Points: 22 January 2024

Fri, 19 Jan 2024 20:39:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Over half of all those eligible for Medicare from diverse populations are now enrolled in Medicare Advantage.

Quick takeaway: The Medicare Advantage (MA) program continues to distinguish itself from Fee-for-Service (FFS) Medicare.

Digging deeper: Through its focus on comprehensive health and supplemental benefits, more than half of all Medicare eligible beneficiaries are now enrolled in MA plans, including 54 percent of those from diverse populations.

According to a new report :

59 percent of Hispanic or Latino/Latina and 57 percent of Black Medicare eligibles are enrolled in MA plans
57 percent of MA enrollees are female
MA plans have a higher percentage of enrollees aged 75 years and older compared to FFS (39 percent compared to 36 percent)
The majority of beneficiaries dually eligible for Medicare and Medicaid are enrolled in the MA program

Why it matters: The demographics of MA beneficiaries speaks to how the program is driving health equity for historically underserved populations.

Beyond its reach into these communities, MA has provided a path forward for addressing the Medicare program’s solvency issue. Projections warn that Medicare funding will run out by 2031. But, a recent analysis shows that if FFS were run like MA, the program’s solvency would be extended by 17 years .

The Centers for Medicare & Medicaid Services (CMS) is expected to propose its annual changes to how the MA program is funded and administered in early February. Keep an eye out for how you can raise your voice to help protect the program and the 32 million Americans who depend on it for their coverage.

PRIVATE EQUITY Private equity interests are threatening our healthcare system.

Quick takeaway: By prioritizing profitability and return on investment, private equity firms are undermining critical care operations at hospitals, physician practices, laboratories, and nursing homes.

Digging deeper: As recently highlighted , hospitals purchased by private equity firms have higher rates of adverse patient safety events .

But, beyond patient safety, there’s growing concern that the private equity trend radically reshaping the healthcare ecosystem not only reduces access, but significantly increases costs, as well.

What it means: The healthcare industry has proven too irresistible a revenue source for private equity interests. This, in turn, has led to calls for increased scrutiny and stronger regulation of how these firms operate in the space.

Rx PRICES Prescription drugs without rebates account for 9 of the top 10 drugs with the largest price increases.

Quick takeaway: A new study seeks to correct the record on rebates.

Digging deeper: A lot of energy has been spent trying to blame pharmacy benefit managers ( PBMs ) for rising drug prices. But, the fact remains, there’s only one entity along the drug supply chain that’s incentivized to lower prescription drug costs for consumers, and that’s PBMs.

Still, that hasn’t prevented baseless attacks from being levied against PBMs, a common tactic being to point to the rebates PBMs negotiate on behalf of their customers to lower costs. But, according to new analysis , it’s actually the drugs without rebates that experience the greatest price increases.

In fact, of the drugs observed in the study experiencing increased prices, 9 of the top 10, 11 of the top 15, and 16 of the top 25 were non-rebated drugs. Further, price increases among the drugs without rebates ranged from 40 percent to 400 percent, compared to just 38 percent to 56 percent for drugs with rebates.

What it means: The results add to the growing body of research defending the value proposition of PBMs. For instance, a report from last summer which showed that the Department of Labor overspent on prescription drugs by over $320 million all because it failed to use a PBM.

What these analyses show is that if lawmakers’ goal is to lower drug prices, targeting rebates – or, PBMs for that matter – will not be effective.

Spotlight

Talking Points: 16 January 2024

Fri, 12 Jan 2024 16:59:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

HOSPITAL FINANCES Hospitals’ financial outlook continues to improve.

Quick takeaway: The financial health of the nation’s hospitals and health systems is stronger than they’d have you believe.

Digging deeper: Among the key takeaways from a new report on nationwide hospital financial performance is that, overall, hospital operating margins continue to show improvement, suggesting that hospitals have largely recovered from the financial turbulence experienced across all industries during the coronavirus pandemic.

In addition, the percentage of revenue hospitals keep as profit has also maintained its positive trend, while facilities were able to reduce their reliance on costly contract labor.

What it means: The data seems to paint a different picture than the one offered up by the hospital industry – a counter narrative reinforced by a separate analysis , which shows that nonprofit hospitals and health systems are actually on firmer financial footing, too.

DO NO HARM Patients are getting hurt by diagnostic errors at an alarming rate.

Quick takeaway: Nearly one-quarter of all hospitalized patients who died or were transferred to the ICU during their stay experienced a diagnostic error.

Digging deeper: A new study sheds light on just how risky hospitals can be as a result of human error , such as delayed diagnoses or misdiagnoses, which the lead author describes as “more common than we would like to think.”

In examining nearly 2,500 patient records from 29 academic medical centers:

23 percent experienced a diagnostic error
18 percent experienced temporary or permanent harm as a result
A diagnostic error was deemed a contributing factor in 7 percent of patients who died

What it means: In pointing to the results, researchers said further study is needed to determine whether physicians with higher workloads or certain types of patients are more likely to make an error.

PBM VALUE Employers benefit from the choice and flexibility their PBMs provide.

Quick takeaway: Despite the misguided rhetoric, stakeholders value their relationship with pharmacy benefit managers (PBMs).

Digging deeper: A recent survey highlighted the important role that PBMs play in helping employers better control their prescription drug costs.

Specifically, the poll focused on how much employers value their PBMs. Among the findings:

90 percent said PBMs are valuable in helping them offer affordable benefits to their employees
96 percent of large employers (500 or more employees) said they value their PBMs’ work in helping keep their benefits affordable
97 percent of employers who contract directly with a PBM said they’re satisfied with their PBM

What it means: The results serve as a warning to lawmakers in DC and in state capitals across the country not to fall victim to Big Pharma’s scapegoating tactics – a sentiment echoed in a separate poll which shows voters are looking to their lawmakers to hold drugmakers accountable for out-of-control prices.

HEALTHCARE SPENDING U.S. health spending reached $4.5 trillion in 2022.

Quick takeaway: Spending grew 4.1 percent that year, settling back into pre-pandemic patterns.

Digging deeper: After growing just 3.2 percent in 2021, 2022’s growth was more in line with the average 4.4 percent growth rate in the years preceding COVID.

Also in 2022, health spending made up 17.2 percent of the economy, down from a peak of 19.5 percent in 2020, the first year of the pandemic.

What it means: While it remains to be seen whether spending growth will fall into a predictable pattern, it’s expected that trends will continue to be driven by medical-specific price inflation, the utilization and intensity of medical care, and the demographic impacts corresponding to the continued enrollment of Baby Boomers in Medicare.

Spotlight

Talking Points: 8 January 2024

Fri, 05 Jan 2024 16:53:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICAL ERRORS Private equity ownership of hospitals leads to worse care.

Quick takeaway: A new study shows that serious medical errors increase at hospitals after they’re acquired by private equity firms.

Digging deeper: According to data published by Harvard researchers in the Journal of the American Medical Association ( JAMA ), patients receiving care at private equity-owned hospitals experience more falls and infections.

The analysis builds on previous research asserting that patients of private equity-owned healthcare facilities not only pay higher costs, but experience reduced staffing levels, and, in the case of nursing homes, have higher death rates.

What it means: Private equity interests have drawn heightened scrutiny for their role in our rapidly evolving healthcare system, especially as their reach has spread .

Rx PRICE HIKES Hundreds of drug prices set to go up.

Quick takeaway: Drugmakers are about to raise prices on over 500 drugs this month.

Digging deeper: As they’ve done every year , pharmaceutical manufacturers are poised to raise prices on hundreds of drugs to ring in the New Year. Last January, drugmakers increased the prices of 587 brand name drugs by an average of 5.5 percent.

What it means: While the industry points to the price hikes as necessary to keep up with inflation, the arbitrary nature of the drugs selected for price increases only adds to the growing frustration over Big Pharma being up to its old tricks.

MEDICARE ADVANTAGE Medicare Advantage plans outperform traditional Medicare.

Quick takeaway: Beneficiaries enrolled in Medicare Advantage (MA) plans receive higher-quality care than those in traditional Fee-for-Service (FFS) Medicare.

Digging deeper: According to a recently released study , across nearly a dozen health effectiveness measures focused on preventive and chronic disease care, the MA program outperformed FFS.

What it means: Given the critical importance of preventive care in promoting long-term wellness, the study adds to the growing body of evidence establishing how comprehensively MA continues to distinguish itself from FFS when it comes to outcomes, access, and costs.

MEDICAID Rx Spending on prescription drugs in Medicaid is going up.

Quick takeaway: Despite lower utilization, Medicaid drug spending has increased, driven by rising prices.

Digging deeper: Even though enrollment in the Medicaid program reached historic levels in recent years, prescription drug utilization remained below 2017 levels through 2022.

However, over that same period, Medicaid spending on drugs increased from nearly $30 billion in 2017 to almost $44 billion in 2022, an increase of 47 percent .

What it means: A separate study points to the difference between Medicaid managed care organizations (MCOs), which are incentivized to use generic or lower-priced drugs, versus Fee-for-Service (FFS) Medicaid.

Another analysis, recently featured here , reinforces the value that MCOs bring to Medicaid enrollees, who experience better health outcomes compared to those enrolled in FFS.

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Talking Points: 2 January 2024

Thu, 04 Jan 2024 18:57:00 GMT

As we bid farewell to another year, we want to express our gratitude for your unwavering support and dedication to the Health Action Network. This year, our collective efforts resulted in significant victories. Whether it was advocating for policy changes, or protecting access to affordable healthcare, your commitment played a crucial role in making positive change a reality.

Thanks for making this year our strongest one yet! We encourage you to help build the community and invite a friend!

Check out our top 5 most read newsletters:

Thank you for being an integral part of the Health Action Network. Together, we are making strides towards better healthcare choices that help build a stronger economy. Wishing you a joyous holiday season and a new year filled with hope and positive change.

Looking forward to all we’ll do together to make 2024 even more impactful!

Talking Points: 18 December 2023

Fri, 15 Dec 2023 18:02:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

Rx PRICES Drugmakers raise prices by more than $1 billion without justification.

Quick takeaway: Eight of the top ten prescription drugs with significant price increases last year had no clinical evidence to justify those hikes.

Digging deeper: According to newly released data from the Institute for Clinical and Economic Review ( ICER ), those unsupported price increases totaled nearly $1.3 billion . The latest report was the fifth time ICER researchers had identified these kinds of price hikes.

What it means: In speaking to the analysis, ICER’s Chief Medical Officer highlighted that many of the most costly drugs continue to see increases above inflation . Those price hikes led to the largest increases in U.S. expenditures (on prescription drugs).

HOSPITAL CONSOLIDATION As hospital systems consolidate, healthcare costs go up, quality goes down, and patient access is compromised.

Quick takeaway: The pace of consolidation is rapidly reshaping healthcare delivery across the U.S., particularly in the Midwest .

Digging deeper: Health systems in this part of the country are increasingly looking to consolidate, citing challenges meeting the healthcare needs of rural communities or operating in larger states.

But, these mergers and acquisitions are no longer limited to the same or adjacent markets, as data points to an uptick in consolidation across state lines , something regulators are keeping a wary eye on.

What it means: On this side of the pandemic, there’s growing concern that hospital consolidation isn’t just increasing, but taking place between larger and larger systems.

Conversely, private equity investors and larger hospitals have quietly employed a “ roll up ” strategy, whereby a series of relatively smaller acquisitions – which manage to sneak below the radar –ultimately lead to a more heavily consolidated market.

Regardless of how these consolidations take place, evidence has shown that consumers, employers, and the government pay the price, as healthcare costs increase, access narrows, and quality is negatively impacted.

MEDICAID MANAGED CARE Integrated pharmacy benefits drive better health outcomes for Medicaid enrollees.

Quick takeaway: Pharmacy-related health outcomes are better in states whose Medicaid programs are administered by managed care organizations (MCOs).

Digging deeper: By comparing quality and health effectiveness datasets, researchers at The Menges Group were able to determine that states with MCO administered pharmacy benefits outperformed states who failed to integrate these benefits.

What it means: The analysis reinforces the value that MCOs bring, not just to Medicaid enrollees, but to the states and the federal government.

UNNECESSARY CARE The U.S. spends way too much money on healthcare that does little or nothing to help patients.

Quick takeaway: Unnecessary medical care drives up costs for everyone and exposes people to potential harm.

Digging deeper: As covered recently , wasteful spending throughout our healthcare system on low-value care is a growing problem . It’s a structural issue with roots in a reimbursement model designed to reward volume rather than value.

What it means: Despite widespread acknowledgment of the pressing need to invert that model, systemic struggles to transition to a value-based system persist. Nevertheless, stakeholders remain undeterred in their efforts to drive that transition .

For instance, health plans, who continue to push value-based reimbursement arrangements with providers, such as those increasingly offered through Medicare Advantage plans.

The focus on health equity has also led to greater participation in these value-based care arrangements, with health plans incentivizing providers to screen for socioeconomic barriers to care.

Spotlight

Talking Points: 11 December 2023

Mon, 11 Dec 2023 19:24:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

Calls to Expand Pharmacists’ Scope of Practice: A recent piece in Forbes by economist Ike Brannon points out a “ A Practical Approach To Save Community Pharmacies .”

Digging deeper: Brannon explains expanding the “scope of practice” for pharmacists allows better access for patients suffering from illnesses like COVID-19, Flu, and respiratory syncytial virus (RSV). He says it would also result in community pharmacies thriving as businesses again.

“Independent community pharmacists are often located in under-served rural and urban areas and are frequently the most accessible healthcare providers in many communities. Expanding a pharmacy’s scope of practice is a simple way to remove a government barrier to pharmacies becoming more valuable to the communities they serve.”

Gaining Momentum: A dozen states have taken steps to expand the scope of practice for pharmacists. In Congress, The Equitable Community Access to Pharmacist Services Act would expand their scope of practice at a national level.

AFFORDABILITY CRISIS: We are facing a healthcare affordability crisis with inflation expected to drive costs up by 6.5 percent next year.

Quick takeaway: While there are many underlying causes, hospital consolidation and billing practices are main drivers of higher costs.

Next Steps: Congress is considering removing hospitals’ ability to charge different amounts for the same service at different locations. This is called site-neutral payments – which would remove the incentive for hospitals to buy small practices, and in turn prevent a key factor behind rising healthcare costs.

Spotlight

Talking Points: 4 December 2023

Fri, 01 Dec 2023 16:25:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Medicare Advantage continues to drive better health outcomes.

Quick takeaway: Beneficiaries enrolled in Medicare Advantage (MA) plans were less likely to have avoidable hospitalizations compared to those enrolled in traditional Fee-for-Service (FFS) Medicare.

Digging deeper: According to a new study , across a range of health conditions (including, diabetes, asthma, and hypertension), MA enrollees were 2 percent less likely to have avoidable hospitalizations.

In looking at the data, researchers determined that the lower rate was attributable to MA plans’ network design, which steers beneficiaries to high-quality providers, such as those with lower rates of avoidable hospital stays.

What it means: This latest study reinforces the value that the MA program brings to beneficiaries and taxpayers.

UNNECESSARY CARE Unnecessary care costs patients and health plans hundreds of millions of dollars.

Quick takeaway: In 2021, Coloradans received nearly 2 million unnecessary – and, potentially, harmful – medical services, costing approximately $134 million .

Digging deeper: As covered in a recent newsletter , unnecessary care is, both, expensive and harmful. A new analysis puts a finer point on the issue, focusing on how much unnecessary care costs residents of Colorado.

According to the analysis, the top five medical services delivered in 2021 accounted for nearly two-thirds of all low-value care spending in the state. Those services include: Prescribing opioids for treatment of chronic pain, screening for Vitamin D deficiency, routine prostate cancer screenings in men with no symptoms, imaging tests for people without significant signs of eye disease, and coronary angiographies to assess risk in asymptomatic patients.

What it means: Low-value health services consist of treatments, diagnostic tests, and screenings where the risk of harm or cost exceeds the likely benefit for patients. As the study’s authors point out, “Understanding the most frequent low-value services in Colorado and how much they cost can help health insurance companies, providers, and patients work together to improve care and lower costs.”

EMPLOYER COSTS Employers expect a sharp increase in their healthcare costs next year.

Quick takeaway: As also recently highlighted , the average cost of employer-sponsored healthcare is expected to go up in 2024.

Digging deeper: New data reinforces the financial headwinds employers face going into next year, with the average per-employee cost of employer-sponsored coverage projected to increase by 5.2 percent, consistent with the increase seen this year, and in line with other estimates.

In addition to inflation , increased spending on prescription drugs also drove up employer costs, including expensive new gene therapies and the growing demand for weight-loss drugs, which, alone, have already driven up the cost-per-employee by hundreds of dollars .

What it means: The trendline has forced employers to prioritize cost management, which includes working more closely with pharmacy benefit managers (PBMs) to implement clinical management programs and steering patients to higher-quality care – which has led to growing concern that drug costs would only be made worse if Congress enacts misguided legislation targeting PBMs.

Spotlight

Talking Points: 20 November 2023

Fri, 17 Nov 2023 14:46:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Week in Review

MEDICARE ADVANTAGE Medicare Advantage continues to distinguish itself from traditional Medicare.

Quick takeaway: If Medicare Fee-for-Service (FFS) operated like Medicare Advantage (MA), the program’s solvency would be extended by 17 years.

Digging deeper: The sustainability of the Medicare program has been a longstanding concern, especially as more Americans age into the program, with estimates projecting the program’s funding to run out by 2031 at current levels.

But, if utilization in FFS was brought in line with that of MA, the program’s solvency would extend to 2048, according to a new study , which found that beneficiaries enrolled in FFS use hospital and post-acute services at a higher rate than those enrolled in MA plans.

What it means: The analysis only adds to the established body of research showing how Medicare Advantage outperforms traditional Medicare in a number of areas, including better health outcomes , saving beneficiaries and taxpayers money, and improving health equity .

PBM VALUE Legislation targeting PBMs threatens to drive up healthcare costs for everyone.

Quick takeaway: Proposed restrictions on private contracting terms between pharmacy benefit managers (PBMs) and health plans demonstrate a fundamental lack of understanding about how markets work.

Digging deeper: With so much legislative and regulatory attention being paid to PBMs and their role in the drug supply chain, there’s growing concern that attempts to bend the prescription drug cost curve are misguided and would do more harm than good.

This is underscored in a new study focused on a current federal proposal targeting “ delinking ” in the PBM space. Health policy researchers estimate that targeting free market performance-based incentives that lower drug costs for consumers (in other words, delinking), would hand drugmakers a financial windfall of up to $32 billion annually .

What it means: Stakeholders are cautioning policymakers that the path they’re headed down would not only weaken PBMs’ negotiating power against Big Pharma, but undercut any savings they hoped to achieve, as echoed by a team of experts in a separate new paper focused on the critical role that PBMs play in connecting consumers to affordable prescription drugs. The authors also examined recent anti-PBM legislation in Congress, concluding that the proposals would do nothing to improve competition and would only serve the special interests (Big Pharma’s) pushing the policies.

WEIGHT-LOSS Rx The growing popularity of weight-loss drugs poses real dangers to employers’ bottom lines.

Quick takeaway: Americans’ demand for these drugs threatens to blow up the cost of covering employees’ health benefits.

Digging deeper: Prescriptions for weight-loss drugs have driven up healthcare costs for employers by more than $300 per insured worker this year. In fact, it’s estimated that through 2025, the cost of covering these drugs will continue to go up, from $324 per insured member this year up to $500 in two years.

What it means: Beyond the financial impact to employers, experts are raising the alarm as cost and demand for this growing class of drugs threaten to overwhelm a healthcare system still reeling from a global pandemic.

Spotlight

Talking Points: 13 November 2023

Fri, 10 Nov 2023 17:39:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Week in Review

PATENT CRACKDOWN Regulators challenge drugmakers’ patent abuses.

Quick takeaway: The Federal Trade Commission ( FTC ) announced it was cracking down on patents from drugmakers and medical device manufacturers that stand in the way of generic competition.

Digging deeper: After warning these companies that it would be taking a harder look at their patents, the FTC sent letters to 10 companies last week challenging patent protections on over 100 approved medicines. Such “ improper ” listings, regulators argued, throw up hurdles to competition in the pharmaceutical industry.

What it means: Stakeholders were quick to applaud the FTC’s announcement, decrying Big Pharma’s historic and institutionalized abuse of the patent system, which was recently estimated to increase healthcare costs by $40 billion in one year alone.

PBM VALUE Employers overwhelmingly value their PBMs.

Quick takeaway: A new survey underscores just how much employers rely on the services and choices provided by their PBMs to keep benefits affordable.

Digging deeper: As Congressional focus continues to zero in on PBMs, the polling comes as an important reminder of the critical role that PBMs play in driving value for employers, consumers, and government programs. Key findings include:

89 percent of employers say their PBM is valuable in helping them offer affordable benefits to their employees
93 percent of employers say it’s essential to have flexibility and a range of choices in how they offer prescription drug benefits to their employees and that it’s important to protect these options with their PBMs
90 percent of employers use the rebates they receive from their PBMs to the benefit of their employees, including lowering spending and enhancing coverage
90 percent of employers say their contract with their PBMs is already transparent

What it means: Against this backdrop, unions have also come to the defense of PBMs, with powerful labor groups recently sending a letter to Senate lawmakers urging them to shield employer health plans from PBM legislation, such as proposals mandating new reporting requirements and eliminating critical cost predictability tools, like spread pricing.

MA OUTCOMES Medicare Advantage performs better than traditional Medicare.

Quick takeaway: Compared to seniors enrolled in Fee-for-Service (FFS) Medicare, beneficiaries enrolled in Medicare Advantage (MA) plans have better health outcomes.

Digging deeper: A new study highlights how dramatically MA outperforms FFS in a handful of key areas, with MA beneficiaries experiencing:

70 percent fewer readmissions
24 percent fewer preventable hospitalizations
A 21 percent lower rate of inappropriate high-risk medication use

What it means: The data reinforces the value the MA program brings to seniors. This is especially timely with the annual open enrollment period for Medicare now underway.

In addition to delivering better health outcomes, MA plans continue to distinguish themselves from FFS by focusing on social drivers of health, such as food security and isolation .

Spotlight

Talking Points: 6 November 2023

Fri, 03 Nov 2023 16:00:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

OVERUSE Unnecessary coronary stents get placed in Medicare patients every seven minutes.

Quick takeaway: According to a recent analysis , hospitals’ overuse of stents costs taxpayers $800 million every year.

Digging deeper: The unnecessary placement of these small mesh tubes used to open narrowed arteries not only drives up healthcare costs , but also poses serious health risks to patients. Stent complications, while uncommon, can include blood clots, perforated arteries, or kidney damage.

Other key takeaways from the study:

Between 2019 and 2021, U.S. hospitals placed nearly 230,000 unnecessary stents
Of the approximately 1 million stents placed, 22 percent met the criteria for overuse
Medicare wasted as much as $2.44 billion on unnecessary stents

What it means: A separate study tracking 700 patients with coronary artery disease over several years found no difference in clinical outcomes (i.e., rates of death or heart failure hospitalizations) between patients receiving medication plus a stent and those receiving medication alone.

UNNECESSARY CARE Medical specialists order more low-value tests.

Quick takeaway: Compared to their peers, these specialists ordered or referred patients for unnecessary imaging at higher rates across a broad range of categories.

Digging deeper: As highlighted above, low-value care offers patients little to no benefit in medically-specific situations and can lead to unintended harm, while presenting additional challenges to health systems increasingly held accountable for delivering better care and reducing spending.

According to the results of a recent study , medical specialists are ahead of their peers when it comes to how often they order low-value imaging services.

By looking at the volume of services ordered for Medicare beneficiaries between 2017 and 2018, researchers found that as much as $1.1 billion was spent on low-value care, with more than half of those services (57 percent) originating from specialists.

What it means: While the authors acknowledge that a relatively small share of overall Medicare spending goes to low-value care, they warn that cascading costs and unanticipated harms abound.

PBMs Stakeholders warn that restricting PBMs could result in higher total drug spending.

Quick takeaway: With policymakers targeting pharmacy benefit managers’ (PBMs) incentives and ability to negotiate lower prescription drug prices with manufacturers, experts highlight the value that PBMs bring to the market, while pointing to previous attempts to limit them as a cautionary tale.

Digging deeper: A recent paper seeks to dispel the heated rhetoric that’s managed to hijack so much of the policy debate surrounding how best to address out-of-control drug costs, by focusing on the critical role that PBMs play in driving affordability and quality on behalf of consumers, employers, and government programs.

By focusing on the market dynamics of the drug supply chain, the authors explain how PBMs are able to leverage their expertise and services to deliver value to their customers.

What it means: The paper comes on the heels of a separate analysis detailing the consequences of legislation seeking to eliminate PBMs’ remuneration based on the rebates and discounts they successfully negotiate on behalf of Medicare plans and beneficiaries.

According to that analysis, this policy would significantly impact drug pricing and utilization by shifting as much as $10 billion annually from patients and taxpayers to drug manufacturers and retail pharmacies, as well as drive up the cost of Medicare subsidies for out-of-pocket expenses.

FOOD AS MEDICINE The growing focus on social drivers of health includes increased attention on the role of food in driving better health outcomes.

Quick takeaway: Our appreciation of the impact that non-medical social factors have on overall health and wellness has led to investments and innovations in connecting at-risk patients from historically underserved communities with greater access to transportation, community supports, and food security .

Digging deeper: It’s become increasingly clear that addressing rising healthcare costs must also include a focus on addressing whole person health.

That’s helped reshape a holistic approach to benefit design, with an emphasis on social drivers of health, such as addressing food insecurity , which not only affects patients’ overall well-being, but impacts diet-related chronic conditions, like obesity, diabetes, and heart disease.

What it means: Already, stakeholders have worked to operationalize how to treat food as medicine. For instance, Elevance Health , recently formalized their approach by hiring a Food As Medicine Director, Dr. Kofi Essel, who’s been tasked with designing an enterprise-wide strategy for the organization, that includes nutrition and food interventions aimed at addressing diet-related conditions and driving better patient outcomes.

Spotlight

Talking Points: 30 October 2023

Fri, 27 Oct 2023 19:20:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

PBM VALUE A closer look at how PBMs lower healthcare costs.

Quick takeaway: A new paper takes a deep dive into the critical role that pharmacy benefit managers (PBMs) play in our evolving healthcare economy.

Digging deeper: Released by the Competitive Enterprise Institute (CEI), the study points out how PBMs negotiate lower prices and improved pharmacy services for consumers and plan sponsors within a complex prescription drug supply chain.

As a result of their efforts, patients get more beneficial drugs at lower costs, which translates into lower premiums and improved health.

A corresponding CEI video reinforces that PBMs are a free market solution focused on enhancing competition through group purchasing and negotiated discounts, which is especially important in regards to the pharmaceutical industry, where drugmakers wield enormous influence on drug prices.

What it means: The analysis comes at a critical point in the ongoing policy conversation targeting out-of-control drug costs, with lawmakers in Washington, DC and in state capitals across the country falling prey to Big Pharma’s scapegoating rhetoric blaming everyone else, such as PBMs, for rising drug prices.

MEDICARE ADVANTAGE GROWTH Enrollment growth in the Medicare Advantage program is fueled by beneficiaries making the switch from traditional Medicare.

Quick takeaway: Medicare-eligible seniors are increasingly choosing Medicare Advantage (MA) plans over Fee-for-Service (FFS) Medicare.

Digging deeper: Much of the growth in the MA program over the last two decades is due to beneficiaries switching from FFS to Medicare Advantage plans according to a recent study. In fact, between 2006 and 2022, the pace of beneficiaries making the choice to go from traditional Medicare to MA more than tripled.

Researchers also confirmed their initial hypothesis, namely, that new beneficiaries – those turning 65 – were overwhelmingly choosing MA. In 2006, 16 percent of those newly turning 65 years of age signed on to MA plans. By 2022, that number had exploded to 43 percent.

What it means: Given the rising popularity of the program, stakeholders continue to focus on ways to improve MA, including advancing health equity and reducing disparities, as well as increasing access to mental and behavioral health.

MEDICAID & SDoH Operationalizing a focus on social drivers of health in Medicaid can improve health outcomes and lower costs.

Quick takeaway: Medicaid managed care plans continue to implement innovative approaches to care delivery to better address enrollees’ overall health.

Digging deeper: Medicaid’s growing focus on social determinants of health ( SDoH ), enables managed care plans to make critical investments aimed at addressing racial, ethnic, and socioeconomic health disparities.

What it means: While progress has been complicated by regulations governing how these investments are made, states have slowly been given more flexibility to address Medicaid enrollees’ SDoH needs. But, as stakeholders urge , more can be done to encourage and facilitate greater investments in the SDoH space.

Spotlight

Talking Points: 23 October 2023

Fri, 20 Oct 2023 17:40:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

MEDICARE ADVANTAGE Medicare Advantage reaches a new milestone ahead of open enrollment season.

Quick takeaway: With the annual enrollment period for enrollees to select their Medicare plan now underway, the Medicare Advantage (MA) program now covers more than half of all eligible beneficiaries.

Digging deeper: Enrollment in MA plans now stands at just over 31 million seniors and individuals with disabilities.

One need only look at the growing body of research to get a sense of how comprehensively the MA program continues to distinguish itself from traditional Fee-for-Service (FFS) Medicare. For instance, according to a recent white paper :

MA enrollees have more than 50 percent fewer inpatient hospital stays than FFS enrollees
MA enrollees visited emergency departments 22 percent fewer times than FFS enrollees
MA enrollees saw stable utilization in the first two years of the analysis compared to a 35 percent increase in utilization for FFS enrollees

What it means: Given the improved outcomes, it’s no wonder MA also enjoys extremely high satisfaction rates among beneficiaries, helped by the program’s ability to also save enrollees – and, the government – money.

HEALTHCARE COSTS The average cost of employer-sponsored healthcare coverage jumped 7 percent this year.

Quick takeaway: After a few years of relatively flat growth, inflation drove a steady uptick in healthcare prices in 2023, resulting in premiums for family coverage through an employer reaching nearly $24,000 .

Digging deeper: According to the breakdown , workers on average contributed $6,575 towards the cost of covering their families, while employers kicked in $17,393.

By comparison, wages grew 5.2 percent on average, while inflation rose 5.8 percent.

What it means: While inflation and labor costs are partly to blame for the increase, experts point to the impact of consolidation on overall healthcare costs – specifically, hospital mergers creating larger health systems with greater market power to extract higher prices in their negotiations with insurers.

HOSPITAL FINANCES Hospitals’ post-COVID finances continue to improve.

Quick takeaway: Rising revenue has helped stabilize the hospital industry’s financial performance and kept operating margins in positive territory.

Digging deeper: With patient care returning to pre-pandemic levels, hospitals’ fortunes continue to improve, helped along by improving labor expenses.

The data builds on six consecutive months of positive financial results, all pointing to a hospital sector well on the road to recovery.

What it means: Against this backdrop, a recent study further questions the necessity of COVID relief funding for the industry.

According to that analysis, during the first two years of the coronavirus pandemic 3 out of 4 hospitals included in the nationwide study reported net positive operating incomes, with COVID relief funds playing a role in helping hospitals’ net operating margins achieve all-time highs.

Additionally, although many hospitals received relief funds, only 16 percent of facilities experienced financial distress during the pandemic, leading researchers to believe that those funds “may not have been necessary.”

Rx VALUE Combatting high drug prices requires all the tools in stakeholders’ toolboxes.

Quick takeaway: Performance-based payment is an important tool used by pharmacy benefit managers (PBMs) to get better value from Big Pharma on behalf of consumers and employers.

Digging deeper: With Congress considering proposals that would limit the contracting tools employers depend on their PBMs leveraging in their negotiations with drug manufacturers, experts are cautioning lawmakers that such an approach would, in fact, lead to higher costs.

“Policies that eliminate performance-based payment move the PBM market back towards a fee-for-service system, increasing costs across the healthcare system,” writes policy expert, Joe Grogan.

Spotlight

Talking Points: 16 October 2023

Fri, 13 Oct 2023 15:25:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

NONPROFIT HOSPITALS Lawmakers focus on nonprofit hospitals’ charity care.

Quick takeaway: A new report highlights the wide deficit between the level of charity care provided by nonprofit hospitals and the tax breaks they benefit from.

Digging deeper: In return for these tax benefits, these hospitals are required to operate for the public good by providing a set of community benefits, including ensuring low-income patients receive care for free or at significantly reduced rates.

However, according to the analysis released by the Senate Health, Education, Labor, and Pensions (HELP) Committee, nonprofit hospitals have failed to provide the required community benefits.

As recently as 2020, the nation’s nearly 3,000 nonprofit hospitals received an estimated $28 billion in federal, state, and local tax breaks, but only managed to provide $16 billion worth of charity care .

What it means: As previously highlighted , lawmakers have increased their scrutiny of nonprofit hospitals’ charity care spending. This new HELP report reinforces calls for Congress and the IRS to hold these hospitals accountable.

EMPLOYER Rx SURVEY Employers value optionality in their PBM contracts.

Quick takeaway: Legislative efforts targeting pharmacy benefit managers (PBMs) threaten to undermine the contract options that employers depend on.

Digging deeper: A new poll highlights how much employers value their PBMs. The overwhelming majority say how valuable it is to them to have the option to choose the type of coverage that meets their unique needs.

It’s this optionality that’s come under threat, with Congress considering legislation that would explicitly limit employers’ flexibility and choice, including the elimination of spread pricing .

What it means: The survey bolsters the growing narrative rejecting Big Pharma’s attempt to push blame for rising drug prices onto other entities in the supply chain, like PBMs, who use contract tools, such as spread pricing, to help better control costs for millions of employers and their employees.

PRICE HIKES Hospital care costs significantly more than care delivered at doctors’ offices.

Quick takeaway: A recent analysis shows that prices for common medical procedures for commercially insured patients are much higher in hospital outpatient departments.

Digging deeper: According to the report from the Blue Cross Blue Shield Association (BCBSA):

A routine colonoscopy costs $1,124 when performed in a hospital setting, 32 percent higher than the $925 charged at ambulatory surgery centers
A mammogram was also 32 percent more expensive in a hospital compared to a doctor’s office ($287 compared to $217)
When performed in a hospital outpatient department, cataract surgery was 56 percent more costly at $3,499 compared to $2,304 in an ambulatory surgery center

What it means: Overpaying for routine medical services that can be delivered in less intensive – and, less expensive – settings drives up premiums and out-of-pocket costs for consumers.

The data reinforces the importance of site neutral payment reform, which BCBSA’s analysis shows could save patients, businesses, and taxpayers nearly $500 billion over 10 years.

Spotlight

Talking Points: 9 October 2023

Fri, 06 Oct 2023 16:40:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

HOSPITAL MONOPOLIES Hospital monopolies negatively impact healthcare value.

Quick takeaway: When markets are dominated by single, large corporate health systems, communities pay the price.

Digging deeper: A recent investigative report details what happened to an Appalachian community after competing hospitals merged under one corporate umbrella.

Given that the deal by Ballad Health would leave the 29-county region spanning parts of Tennessee, Virginia, Kentucky, and North Carolina with one dominant hospital system, executives promised regulators that they wouldn’t gouge prices or cut corners.

Fast forward five years and that hospital system’s 20 facilities remain the only option for the majority of the region’s 1.1 million residents. Making matters worse, the hospitals have failed to meet many of the quality benchmarks they’d established, nor provided much of the promised charity care to the community.

What it means: While specific to this corner of Appalachia, the experience is by no means unique, as a well-established – and, growing – body of evidence has shown that, despite their promises, the benefits of hospital monopolies flow in only one direction.

HOSPITAL CONSOLIDATION Medicaid patients pay the price when hospitals consolidate.

Quick takeaway: New research shows Medicaid enrollees’ access to care declines as hospital markets become more concentrated.

Digging deeper: As highlighted above, the consequences of hospital market concentration impacts everybody. This holds true for employers, consumers, and government beneficiaries, such as those enrolled in Medicaid, who, according to a new study, see their access to care increasingly limited when hospitals consolidate.

What it means: Medicaid plays a vital role , connecting lower income patients to the healthcare they need.

As hospital consolidation continues to radically reshape healthcare delivery across the country, researchers point to the impacts to the Medicaid population as a warning.

RX COST PREDICTABILITY Employers depend on cost predictability to provide affordable, quality prescription drug benefits to their employees.

Quick takeaway: Legislation targeting cost predictability tools that pharmacy benefit managers (PBMs) make available to small businesses (like spread pricing ), would have profoundly negative impacts on millions of consumers.

Digging deeper: Congress is considering eliminating the option for employers and health plans to choose this cost predictability model, which would affect an estimated 1.7 million small businesses , impacting more than 24 million employees and their families. When large businesses are factored in, that number swells to 42 million employees and their families.

What it means: Stakeholders are urging federal lawmakers not to fall for Big Pharma’s bogus rhetoric, blaming others in the drug supply chain for the prices that they’re ultimately responsible for setting.

RX DISCOUNT PROGRAM A new program seeks to help consumers afford their prescription drugs.

Quick takeaway: EnsureRx will make it easier for plan members to access drug discounts at the pharmacy counter.

Digging deeper: Elevance Health’s PBM, CarelonRx , is launching the new program, which will be made available at no cost for commercial members early next year. Once up and running, members will simply pick up their prescriptions as they normally do and EnsureRx will find and apply the lowest cost available to them.

The program covers 50 generic drugs typically purchased with a discount card. Streamlining the process eliminates some of the confusion complicating how members access their drug benefits.

What it means: With so much legislative energy focused on PBMs, the program serves as an important example of how these companies bring better value to consumers by connecting them to the right drug at the right time at the right price.

Spotlight

Talking Points: 2 October 2023

Fri, 29 Sep 2023 15:38:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

DISHONEST BILLING Lawmakers across the country set their sights on hospitals’ dishonest billing.

What it is: By billing for medical services delivered in a doctor’s office as if they took place in a much more expensive hospital setting, large corporate hospital systems are driving up healthcare costs for everyone.

Why it matters: Dishonest billing has become extraordinarily lucrative for hospitals, all the more so as the pace of consolidation has picked up.

As large hospitals acquire smaller, independent physician and specialist offices, these corporate systems have gotten away with charging consumers and employers significantly more for the same services, simply by classifying the visit as taking place in a hospital.

What they’re saying: A growing chorus of stakeholder voices has raised the alarm on the issue of dishonest billing, including:

Not only that, across the country, doctors and the general public, from New York to Missouri , Indiana to Connecticut , have all raised their voices, too, calling for an end to dishonest billing.

Talking Points: 25 September 2023

Fri, 22 Sep 2023 16:27:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

HOSPITAL PRICES Reliable hospital price transparency remains elusive for consumers.

Quick takeaway: A new study shows wide variations between the prices hospitals post online and what patients are told on the phone.

Digging deeper: Researchers collected cash price data online from dozens of hospitals last year for childbirth services and brain MRIs, before calling those same hospitals and requesting the lowest cash prices.

The results reinforce previous findings that show considerable price variability – not just between hospitals, but even within the same hospital. The data also suggests that hospitals may not even know their own prices.

What it means: The push for greater hospital price transparency has not been easy. Despite new federal rules requiring hospitals post prices for 300 shoppable services in a consumer-friendly format on their websites, there’ve been issues, including a lack of standard formatting, incomplete data, and poor hospital compliance.

According to the data published in JAMA Internal Medicine , questions about dependability of the prices that are made available can now be added to that list.

EMPLOYER COSTS Employers expect their healthcare costs to go up.

Quick takeaway: High inflation, labor shortages, and industry consolidation have employers projecting a 5.4 percent increase to their health benefits costs per employee next year.

Digging deeper: As previously highlighted , employers face significant headwinds as they put together their employee health benefits packages for 2024. A new national survey underscores the severity of that challenge, as employers are forced to reconcile the competing priorities of improving those benefits packages while implementing cost-reduction strategies.

What it means: After more than a decade of annual cost increases averaging 3.4 percent, the ongoing economic uncertainty plaguing the healthcare sector is threatening to push those costs higher.

In addition to the inflation and labor shortages mentioned above, increased consolidation of health systems is also placing upward pressure on costs.

PBM VALUE Legislative efforts targeting PBMs will ultimately have little impact on rising prescription drug costs.

Quick takeaway: Achieving meaningful drug price reductions requires looking beyond pharmacy benefit managers (PBMs) and elsewhere along the supply chain.

Digging deeper: Policy and economic experts at Brookings make the case that legislation aimed at curtailing PBMs won’t do much to address out-of-control drug prices. In fact, by eliminating the tools used by PBMs to negotiate lower prices for consumers, employers, and government programs, not only will prices not go down, but the exact opposite might happen.

Additionally, there’s the added concern that increased cost-sharing could also lead to increased non-adherence, as patients forego their prescribed treatments due to affordability.

What it means: Elsewhere, economists share these concerns and urge lawmakers to better understand the critical role that PBMs play in helping contain rising drug costs, rather than handing Big Pharma another lucrative pay day.

Rx SAVINGS The use of generic and biosimilar drugs led to huge savings last year.

Quick takeaway: Lower-cost versions of brand-name drugs saved our healthcare system $408 billion in 2022.

Digging deeper: According to a new report from the Association for Accessible Medicines ( AAM ), this represents a huge jump from the $195 billion in accumulated savings in 2013. Further , using generic and biosimilar drugs resulted in:

$139 billion in savings for Medicare
$194 billion in savings for commercial plans
$2.9 trillion in savings over the past 10 years

What it means: Against this backdrop, stakeholders continue to point out how flawed Big Pharma’s innovation rhetoric has become – in particular, their increased focus on pursuing secondary patents on existing products, not as a result of true innovation, but to extend their patent monopolies and prevent competition from generics and biosimilars.

Talking Points: 18 September 2023

Fri, 15 Sep 2023 17:23:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

Rx PRICES Proposals targeting PBMs will drive up prescription drug costs by billions of dollars.

Quick takeaway: A new study estimates that Congress’ focus on pharmacy benefit managers (PBMs) will increase drug prices by as much as $10 billion.

Digging deeper: According to the analysis released by the National Bureau of Economic Research ( NBER ), the numerous bills currently being considered by lawmakers in Washington under the guise of “drug pricing legislation” would only restrict the incentives used by PBMs to lower prescription drug costs.

Specifically, the paper focuses on the consequences of “delinking” PBMs’ compensation from the discounts and rebates they’re able to secure on behalf of beneficiaries in the Medicare Part D prescription drug program.

What it means: Key takeaways from the NBER study include:

A huge financial windfall for Big Pharma, who could see an additional $10 billion annually, costing taxpayers and patients up to $18 billion.
An annual increase to federal spending on Medicare Part D from $3 billion to $10 billion.
Higher premiums for seniors enrolled in the program.
Reduced PBM competition forcing patients to pay more for prescription drugs.

MEDICAID Rx SPENDING Spending on weight-loss drugs in Medicaid nearly doubled between 2021 and 2022.

Quick takeaway: Last year, the Medicaid program spent $1.1 billion on Ozempic and other GLP-1 drugs used for weight loss, up from $547 million the year before.

Digging deeper: Ozempic alone accounts for the majority of that spending, with Medicaid paying $912.3 million for the Novo Nordisk drug for 978,400 enrollees.

However, new data comparing what other nations are paying for these drugs shows that patients in the U.S. are paying far more than patients in other countries.

What it means: As previously covered , there’s growing concern over what the cost of these drugs will do to the healthcare cost curve, writ large. It’s estimated that the cost to Medicare alone could be as high as nearly $27 billion annually.

PROVIDER CHARGES Messaging your doctor could cost you.

Quick takeaway: Providers have started charging patients – and, their health plans – for responses to their messages.

Digging deeper: Spurred by the sharp uptick in emails and other online communications during the pandemic, a growing number of health systems are now charging patients when physicians and other clinicians send replies.

What it means: Stakeholders worry that this changing business model could create barriers between patients and their doctors, especially as telecommunications have been recognized as a health issue .

PRIVATE EQUITY Communities pay the price when private equity comes to town.

Quick takeaway: Despite claims to the contrary, private equity investment often leaves hospitals – and, the communities they serve – worse off.

Digging deeper: Anecdotal evidence abounds, pointing to what happens when private equity tactics – cutting costs, maximizing profits – are applied to struggling hospital finances.

Spoiler alert – costs go up and quality goes down.

A growing body of research only reinforces these impacts, with data linking private equity investments in the healthcare space to higher costs to patients and worsening health outcomes.

What it means: Against this backdrop, lawmakers have focused their attention on private equity’s growing influence over our healthcare system, with particular emphasis on ownership structure and the massive amount of debt they’re piling onto the businesses they invest in.

Talking Points: 11 September 2023

Fri, 08 Sep 2023 14:35:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

PROVIDER CONSOLIDATION Patient spending goes up when primary care physicians become affiliated with large health systems.

Quick takeaway: A new study challenges claims by the hospital industry that consolidation leads to economies of scale that result in less spending.

Digging deeper: According to the findings, primary care doctors who have relationships with health systems steer patients back into those systems, driving up healthcare spending.

These vertical relationships between physicians and hospitals led to:

A 23 percent increase in specialist visits
A 14 percent increase in emergency department visits
A 22 percent increase in hospitalizations
A $357 increase in total medical expenditures

What it means: The data raises concerns that steering of care by providers into affiliated health systems corresponded with insurers paying more for the same types of care visits, driving up overall healthcare costs.

OFFICE VISIT CODING Outpatient visits are being billed at increasingly higher levels.

Quick takeaway: Shifts in how providers are coding for outpatient evaluation and management (E/M) visits are impacting healthcare costs.

Digging deeper: New research from Elevance Health’s Public Policy Institute ( PPI ) provides valuable insights into how the increase in higher-complexity coding is driving up costs.

According to the data, between 2006 and 2022, the percent of outpatient E/M visits coded as high-complexity rose from 25 percent to 38 percent.

In looking at the health plan’s patient population, PPI estimates that increased coding complexity resulted in:

A 7 percent increase in total costs among commercially-insured members
A 12 percent increase among Medicare Advantage beneficiaries
An 8 percent increase among Medicaid enrollees

Commercial members and Medicare Advantage beneficiaries also had higher patient-paid costs.

What it means: The analysis builds on a growing body of research detailing the impact that billing for more complex and, thus, more expensive , outpatient visits continues to have on overall healthcare costs.

PATIENT FEARS What scares people most about going to the hospital may surprise you.

Quick takeaway: According to a new survey , the financial impacts of hospitalization are most concerning to Americans.

Digging deeper: Researchers set out to establish a baseline of patients’ knowledge and understanding of the various types of risks associated with going to the hospital.

While there were general concerns about hospital-acquired infections, the cost of hospitalization ranked as respondents’ top concern, with 55 percent saying they were either ‘Very’ or ‘Extremely’ fearful about this issue.

What it means: As we’ve highlighted , hospitals have overwhelmingly established themselves as, both, the largest component of our overall healthcare spending and the primary driver of escalating healthcare costs.

With that in mind, it’s no surprise that the cost of going to the hospital is what patients are actually most afraid of.

EMPLOYERS Large employers are increasingly worried about their pharmacy spending.

Quick takeaway: Growing spending on medications is projected to be a major driver of future healthcare costs, along with increased demand for mental healthcare services.

Digging deeper: In a new survey of 150 large employers conducted by the Business Group on Health, employers expect a 6 percent increase in healthcare trend – higher than typical forecasts from previous years – driven in part by pharmacy spending, which saw a median percentage increase from 21 percent to 24 percent between 2021 and 2022.

What it means: According to the survey, rising prescription drug costs are a leading concern for large employers, with 92 percent citing concerns about high-cost drugs in the pipeline and 91 percent saying they’re concerned about the overall pharmacy cost trend.

Talking Points: 4 September 2023

Thu, 31 Aug 2023 15:41:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

Spotlight

PBM SAVINGS A recent analysis shows the government missed out on hundreds of millions of dollars of savings.

Quick takeaway: By failing to use a pharmacy benefit manager (PBM) to negotiate better prices, the Department of Labor (DOL) overspent on prescription drugs by $321.3 million from 2015 to 2020 for federal employees.

Digging deeper: According to a recent Inspector General report , not only did the DOL miss out on those savings, but without a PBM to ensure patient safety, thousands of incorrect prescriptions were provided to individuals.

The report also found that the DOL spent hundreds of millions of dollars on drugs that may not have been appropriate or necessary.

What they’re saying: A growing chorus of voices has spoken out in defense of the critical role that PBMs play in the drug supply chain connecting consumers to affordable prescription drugs, while improving outcomes and enhancing patient safety, including industry stakeholders , elected officials , small business owners , independent pharmacists , health policy experts , and economists .

Talking Points: 28 August 2023

Fri, 25 Aug 2023 16:01:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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HOSPITAL CHARITY SPENDING Hospitals are facing stricter charity spending oversight.

Quick takeaway: States are increasingly turning their attention to ensuring that nonprofit hospitals’ financial assistance policies are sufficient to justify their tax exemptions.

Further context: As recently covered , federal lawmakers have also ramped up their scrutiny of these health systems’ charity spending.

The average U.S. hospital spends 1.9 percent of its operating expenses on charity care. But, examples continue to surface of large tax-exempt hospital systems failing to meet even that low threshold, while making significant investments to expand operations or to train staff.

VALUE-BASED CARE Most Americans support value-based care.

Quick takeaway: A new survey highlights respondents’ shared desire for targeted improvements to their healthcare experience, including a belief that the system is too fragmented with little coordination between providers.

Digging deeper: Nearly two-thirds of respondents (64 percent) supported value-based care over the fee-for-service model.

In interpreting the results of the survey, researchers pointed to the importance of reframing a value-based approach to healthcare as being one that puts the patient first.

What it means: In short, people responded best to a system that prioritizes patient experience over quantity. Further, they want that experience to be one where the provider cares about them as a whole person, rather than a collection of symptoms.

PATIENT GROUPS Patient advocacy groups’ ties to drugmakers and device manufacturers called into question.

Quick takeaway: Most leading patient advocacy organizations ( PAOs ) in the U.S. have Board members or senior leaders with ties to the industries they represent, raising serious questions about their conflicts of interest influencing those organizations’ policies and advocacy agendas.

Digging deeper: The influence of pharma and medical device companies over PAOs is a long-standing concern. As recently as 2017, the vast majority of PAOs (83 percent) reported receiving money from these industries, while more than one-third (36 percent) had a current industry executive on their Board.

What it means: Researchers note that industries (like drug manufacturers) are able to capitalize on PAOs’ credibility, with evidence identifying overlaps between PAO and industry policies, while the patients they’re supposed to represent get left behind.

EMPLOYER HEALTHCARE COSTS Employer-sponsored insurance to rise 8.5 percent next year.

Quick takeaway: According to a new analysis , employers will pay more than $15,000 on average for their employees’ healthcare in 2024, up from just under $14,000 this year.

Digging deeper: Healthcare cost trend is on the rise , with researchers citing providers pushing for larger cost increases to cover higher wages and supplies.

Other contributing factors include rising demand for weight-loss drugs, new technologies, and the increasing share of specialty drugs.

What it means: Over 180 million Americans receive health coverage through their employer. In fact, a strong majority of consumers (63 percent) are satisfied with their employer-provided coverage , with nearly as many (59 percent) saying the quality of their plans is high.

Perhaps most importantly, more than two-thirds (68 percent) say they prefer to get their coverage through their employer rather than through a government program.

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Talking Points: 21 August 2023

Fri, 18 Aug 2023 15:09:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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HOSPITAL CONSOLIDATION Large hospital systems are getting even larger, threatening patient access to affordable, quality healthcare.

Quick takeaway: Hospital systems in the U.S. are increasingly behaving like monopolies, eliminating competition and severely limiting consumer choice.

Further context: As recently as 2021, it was estimated that hospitals – by themselves – constituted nearly one-third of overall health spending in this country, equaling 5.6 percent of GDP.

Worryingly, health system consolidation has only made things more concentrated. In fact, three-quarters of markets are considered highly consolidated. Digging even deeper, 90 percent of America’s major urban areas now have little to no hospital competition at all.

What it means: Across the country, huge health systems monopolize care – top to bottom – in many cities, states, and even entire regions. Not only does this lead to higher prices, it also decreases patient choice, impedes innovation, and erodes quality.

Rx POLLING Voters overwhelmingly hold drugmakers accountable for out-of-control prescription drug prices.

Quick takeaway: A new poll shows the vast majority of Americans reject efforts by Big Pharma to shift blame for rising drug prices.

Digging deeper: Key takeaways from the survey include:

Nearly 70 percent of respondents are concerned about prescription drug prices
One-third say they or a family member had financial difficulty affording a prescribed medicine in the past 12 months
58 percent name pharmaceutical companies as being most responsible for rising prices
87 percent agree that lawmakers “should reject the pharmaceutical industry’s blame game targeting others in the supply chain”

What it means: Overwhelmingly, respondents supported proposals aimed at lowering drug prices (Affordable Prescriptions for Patients Act) or increasing list price transparency (FAIR Drug Pricing Act).

GENE THERAPY New gene therapies offer potential hope – at astronomically high prices.

Quick takeaway: Although gene therapy research has led to some discoveries, the price tags associated with these treatments are significant barriers to access.

Digging deeper: As their name suggests, gene therapies target genes to alter biological properties for therapeutic use. These have quickly become critical tools for treating genetic diseases that may eliminate the need for chronic treatments.

But, the hefty healthcare costs associated with these treatments make development and adoption difficult, especially when those gene therapies fall short of delivering on their promise, making it even harder to justify prices that researchers have argued are already a poor value.

What it means: Not only do these eye-watering prices put many gene therapies out of reach for most patients, they also diminish the willingness of government funders to pay for gene-therapy research.

For us to realize the full benefits of these treatments, healthcare economists point to the need for stakeholders to urgently find a more affordable funding and pricing model.

MEDICARE ADVANTAGE Marginalized and disadvantaged communities choose Medicare Advantage over traditional Medicare.

Quick takeaway: According to new research , 27 percent of Medicare Advantage (MA) enrollees are Black, Latino, or Asian, compared to just 17 percent in traditional Medicare Fee-for-Service (FFS).

Digging deeper: MA enrollees are more demographically and geographically diverse than their FFS counterparts, with 69 percent of eligible Latino Medicare beneficiaries opting for Medicare Advantage (MA), along with 65 percent of the Black Medicare population, and 60 percent of the Asian Medicare population.

Additional findings from the analysis include:

19 percent of MA enrollees are more likely to live in socially vulnerable counties
A higher proportion of MA enrollees report low incomes below 200 percent of the federal poverty level
MA enrollees spend less on healthcare than FFS enrollees

What it means: The data reinforces the growing popularity of the MA program, which now serves 30.8 million beneficiaries – or, more than half of the entire Medicare-eligible population.

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Talking Points: 14 August 2023

Fri, 11 Aug 2023 15:56:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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HEALTHCARE PRICES Premiums are expected to grow next year as a result of rising healthcare prices.

Quick takeaway: A detailed analysis of rate changes for Affordable Care Act (ACA) marketplace health plans shows a proposed median increase of 6 percent for 2024.

Further context: In examining the data, researchers determined, while rate increases were the product of a number of factors, including COVID, the end of the public health emergency, and the unwinding of Medicaid continuous enrollment, the significant driver was the rising cost of healthcare – primarily, medical price growth, which put upward pressure on premiums.

What it means: The projected increases serve as an important reminder of how exactly consumers’ healthcare dollar gets spent.

While prescription drugs account for a good portion of that total, the largest share overwhelmingly goes to hospitals and providers.

ER PRICES Price increases are driving up the cost of visits to the emergency room (ER).

Quick takeaway: A new study explains the significant increase in ER spending and found that rising prices, along with upcoding, is to blame.

Digging deeper: Rising ER prices contributed to at least half of the spending growth in four out of the five markets studied.

Upcoding (which occurs when providers submit diagnosis codes to health plans to make patients appear sicker than they actually are in order to receive higher reimbursement), comprised as much as 48.9 percent of spending increases in one of the five markets studied.

What it means: With health spending in the U.S. projected to reach 19.6 percent of GDP by the end of this decade, increased attention is being paid to what’s driving that spending.

A recent analysis determined that two-thirds of the increase in spending between 2015 and 2019 was due to a rise in the prices of provider services and drugs. The percentage of overall health spending in the U.S. attributable to ERs also went up from 3.9 percent in 2006 to 5.0 percent in 2016.

NONPROFIT HOSPITALS Lawmakers focus on nonprofit hospitals’ tax breaks.

Quick takeaway: A group of bipartisan senators are ramping up scrutiny of nonprofit hospitals’ charity care spending.

Digging deeper: As previously highlighted , increased Congressional attention is being paid to whether these health systems are providing sufficient levels of charity care to justify their nonprofit tax status.

Now, in a pair of letters sent to federal tax commissioners last week, federal lawmakers urged a careful review of charity tax regulations, arguing that current oversight has proven insufficient.

What it means: In exchange for their tax exemptions, nonprofit hospitals are required to aid their surrounding communities through public health programs and by providing free or heavily-discounted care to low-income individuals.

However, public health advocates and patient groups argue that the tax code’s overly-generous definition of “community benefits” enables nonprofit hospitals to misclassify costs , such as training and research, to avoid providing direct assistance, such as health screenings and free clinics.

PRIOR AUTHORIZATION Prior authorization reduces spending in Medicare Part D.

Quick takeaway: A new study shows that prior authorization in the Medicare Part D prescription drug program reduced overall spending by 3 percent.

Digging deeper: Savings from prior authorization exceeded the overhead costs of its administration by a factor of about 10, leading researchers to argue for the value of prior authorization, pointing out the important effect it has on drug spending.

Rx TAX DODGE Big Pharma exploits tax loopholes to further line their pockets.

Quick takeaway: By reporting profits overseas, drugmakers avoid billions in domestic taxes.

Digging deeper: Essentially, pharmaceutical companies have perfected the art of legally shifting the profit on their U.S. sales out of the country to low-tax jurisdictions in other parts of the world.

What it means: These tax revenues, rather than being reinvested in new research here or creating new domestic jobs, are being paid abroad.

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Talking Points: 7 August 2023

Fri, 04 Aug 2023 14:50:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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HOSPITAL PRICES New research examines prices at hospitals owned by physicians.

Quick takeaway: According to the data , prices at physician-owned facilities were about one-third lower than at traditional hospitals in the same market.

Further context: By comparing eight shoppable medical services in dozens of regions across the country, researchers discovered alarming differences for median commercial negotiated prices and cash prices between physician-owned hospitals (POH) and non-POH, including :

Negotiated prices being 33.7 percent lower at POH and 32.7 percent lower for cash prices
POH status being associated with 17.5 percent lower negotiated prices and 46.7 percent lower cash prices
Negotiated prices for MRIs and physical therapy being 33 percent and 30 percent lower at POH
Cash prices for CTs and MRIs being 36 percent and 35 percent lower at POH

What it means: When looking to account for the variance, researchers posited that POHs might be able to accept lower commercial prices because they serve fewer Medicaid patients (3 percent vs. 7.1 percent) and provide less charity care (1.3 percent vs. 3.2 percent) than non-PHOs.

HOSPITAL CONSOLIDATION A separate study details what happens after independent hospitals are acquired by larger health systems.

Quick takeaway: Not only do prices go up as a result of these acquisitions , but the quality of care also goes down.

Further context: According to new research from Elevance Health’s Public Policy Institute ( PPI ), average inpatient prices for commercially-insured patients went up 5 percent after health systems acquired an independent hospital.

Not only that, readmission rates for patients receiving cardiac care at those facilities also increased by 12 percent – and, remained elevated for three years after the acquisition.

From 2000 to 2020, the share of hospital beds that were a part of a larger health system rose from 58 percent to 81 percent nationwide. In fact, by 2020, a quarter of hospital markets no longer had any independent hospitals.

What it means: Though the study also found that these mergers could create some efficiencies for hospitals, consumers and employers did not realize any of those benefits. Rather, they saw higher prices and lower quality, as well as reductions in access to certain services, such as maternal care.

MEDICARE ADVANTAGE STUDY Medicare Advantage (MA) beneficiaries take advantage of supplemental benefits.

Quick takeaway: According to a separate new PPI report , the vast majority of enrollees in MA plans use at least one supplemental benefit a year.

Digging deeper: One critical way that MA plans are able to distinguish the program from traditional Medicare Fee-for-Service (FFS) is by offering benefits not covered by FFS known as supplemental benefits.

While their focus has historically been on health-related needs, recent regulatory and legislative changes have allowed plans to expand these offerings to a wider range of benefits to beneficiaries, particularly those with chronic conditions.

This has also led to MA plans being able to tailor their supplemental benefits to better address their members’ health-related social needs, including transportation and food security.

Additional findings from the PPI report include :

Dual-eligible beneficiaries (those who qualify for both Medicare and Medicaid) used at least 1 supplemental benefit at higher rates than non-dual eligibles (83 percent compared to 75 percent)
42 percent of dual-eligibles used at least 3 supplemental benefits
Beneficiaries who used at least 1 supplemental benefit were more likely to live in areas with fewer resources

What it means: More than 31 million Medicare-eligible beneficiaries now choose MA plans. And, more than half of those enrollees have annual incomes of less than $25,000 , with more than one-third identifying as racial or ethnic minorities.

By expanding their offerings and tailoring their supplemental benefits to better meet the health-related social needs of vulnerable or historically underserved populations, MA plans continue to demonstrate the critical importance of the program.

WEIGHT-LOSS Rx Healthcare stakeholders brace for the cost implications of weight-loss drugs.

Quick takeaway: In addition to worrying about what these drugs will do to the healthcare cost curve, there’s growing concern over the side effects of these medicines.

Digging deeper: As recently highlighted , with patient demand for weight-loss drugs skyrocketing, stakeholders have turned their attention to what covering these drugs will ultimately cost our healthcare system.

Already, projections have come out estimating the cost to Medicare alone could be as high as $27 billion a year .

As for those side effects, while we’re a long way off from knowing the long-term effects of these drugs, there are already indications that there are immediate risks, such as the just-filed lawsuit against these manufacturers charging that they failed to adequately warn patients of the potential for severe gastrointestinal problems.

What it means: Against this backdrop, experts are sounding the alarm after a report surfaced which showed that one of those drugmakers, Novo Nordisk, manufacturer of popular weight-loss injectable Wegovy spent $11 million “wining and dining” thousands of prescribing doctors.

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Talking Points: 31 July 2023

Fri, 28 Jul 2023 14:43:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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HOSPITALS Hospitals are having to defend themselves on multiple fronts.

Quick takeaway: From their shady billing practices to their record profits to the accelerated pace of consolidation reshaping the industry, these health systems find themselves under increased scrutiny.

Further context: Take the issue of billing. Mounting frustration over how hospitals have quietly gotten away with billing patients, health plans, and government programs exorbitantly more for services delivered in non-hospital settings has prompted reform efforts by lawmakers in Washington and in state capitals across the country.

Separately, despite repeated claims to the contrary, a new study uncovered how many hospital systems actually thrived during the pandemic. In fact, more than half of these facilities didn’t experience any financial distress due to COVID-19, but nearly three-quarters received relief funds anyway.

Finally, a separate report details how increased hospital consolidation has led to the rise of facility fees, which in turn has driven up medical bills , out-of-pocket costs, and premiums.

MEDICAL COSTS Rising medical costs will put upward pressure on premiums next year.

Quick takeaway: Ongoing inflation, the end of the coronavirus public health emergency, and continued shifts in employer coverage, are all overshadowed by the simple fact that healthcare costs have been growing faster than inflation .

Digging deeper: A new issue brief from the American Academy of Actuaries examines the factors that will impact healthcare prices, utilization, and spending in 2024.

What it means: The uptick in provider prices will, in turn, drive up reimbursement rates, leading to increased premiums next year.

PRIVATE EQUITY A new analysis details the negative impacts of private equity ownership in healthcare.

Quick takeaway: According to the research , not only do costs go up when private equity investors acquire healthcare facilities, but the quality of care delivered at those sites also worsens .

Digging deeper: As recently highlighted , private equity’s ability to dramatically reshape our healthcare system continues to draw increased attention . This is true across a growing range of medical specialties and services, including emergency medicine and anesthesiology.

What it means: With evidence exposing private equity’s negative impact on healthcare costs and outcomes mounting, experts continue to raise the alarm , looking beyond where things stand today and focusing on where things could be headed.

SURPRISE MEDICAL BILLING Stakeholders offer an important reminder as to why the No Surprises Act was necessary in the first place.

Quick takeaway: By the end of this summer, it’s projected that the No Surprises Act ( NSA ) will have prevented nearly 20 million surprise medical bills since first going into effect in January of 2022.

Digging deeper: Prior to the rules going online, surprise medical bills added $40 billion in unnecessary costs to our healthcare system. It’s no wonder providers are working so hard to unwind these critical consumer protections, as evidenced by the multiple lawsuits they’ve brought against the NSA .

What it means: While the impact of the lawsuits is yet to be determined, it’s worth noting that, as highlighted above, private equity interests have boosted their share of both the emergency medical and anesthesiology markets – two specialties that are most linked to surprise medical bills.

UNNECESSARY CARE A new report identifies millions of dollars in low-value care in Colorado.

Quick takeaway: Coloradans received nearly two million unnecessary healthcare services in 2021 according to a new analysis . All that waste cost patients and health plans approximately $134 million .

Digging deeper: Among the top services observed for inappropriate spending:

Opioid prescribing, which accounted for 36 percent of all low-value care at $48 million
Vitamin D deficiency screening at $12.4 million
Prostate cancer screening at $6.6 million

Overall, the share of spending on low-value care was highest in the state’s Medicaid program and the Children’s Health Insurance Program (CHIP).

What it means: The report goes on to highlight how effective provider-focused and patient education interventions, along with multi-stakeholder collaborations, have been in other states when it comes to reducing low-value care.

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Talking Points: 24 July 2023

Fri, 21 Jul 2023 15:00:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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HOSPITAL REVENUE Hospitals’ operating margins continue to bounce back.

Quick takeaway: With patients flocking to outpatient centers and labor costs trending down, the hospital industry’s fortunes have steadily improved .

Further context: The coronavirus public health emergency upended the operating models of just about every industry – healthcare being no exception.

But, on this side of the pandemic, hospital revenues have quickly turned the corner as utilization has increased .

What it means: Hospitals have used the public health emergency to their benefit , with new data suggesting that the industry actually used COVID aid to improve its financial position.

However, according to the data, nearly one-fifth of the $4.2 billion reimbursed by the federal government to providers for COVID testing and treatment may have been improperly paid.

Against this backdrop, hospitals now find themselves under increased scrutiny for the role they play in driving up healthcare costs.

PRIVATE PRACTICE The share of private practice physicians continues to decline.

Quick takeaway: According to a new survey , medical practices are getting larger – and, physicians are less likely to own them.

Digging deeper: Between 2012 and 2022, the share of physicians working in private practices – or, practices wholly-owned by physicians – fell from 60.1 percent to 46.7 percent .

Over that same period, the percentage of physicians working in practices at least partially owned by a hospital or a large health system rose by almost 8 percent, while the share of physicians working in a hospital also increased by 4 percent.

In addition to physicians being less likely to own their practices, other key takeaways from the survey include:

Practices are getting larger and shifting towards multi-specialty care.
Some specialty physicians are sticking to private practice.
Private equity is investing more heavily in the space.

What it means: Even before the pandemic, provider consolidation was dramatically reshaping our healthcare delivery landscape. And, as mounting evidence has shown, this has led to higher prices .

PRIVATE EQUITY Private equity investors remain bullish on healthcare.

Quick takeaway: Investors have had their eye on healthcare for years, with specialty services like cardiology, oncology, and anesthesiology garnering increased attention.

Digging deeper: As featured last week , the effects of private equity interest on our healthcare delivery model are profound and far-reaching. And, it’s not just the threat of greater consolidation, as medical prices across a broad range of specialties and geographies are also being driven higher.

What it means: Where the trendline takes us is anybody’s guess, but private equity investors are showing no signs of cooling on the healthcare sector.

MEDICARE Rx A handful of prescription drugs drives a disproportionate share of Medicare Part D spending.

Quick takeaway: The ten top-selling medicines in the Medicare Part D prescription drug program accounted for more than one-fifth of overall spending in 2021.

Digging deeper: Despite representing just 0.3 percent of covered drugs in Part D, those ten drugs made up 22 percent of total spending ( $48 billion ). Going further, the top 100 drugs accounted for 61 percent of all spending ($131 billion), but still only represented 3 percent of covered drugs.

What it means: The data comes on the heels of the pharmaceutical industry’s twice-annual round of price hikes , which, so far this month, has seen dozens of drug manufacturers raise prices on more than 100 products.

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Talking Points: 17 July 2023

Fri, 14 Jul 2023 14:41:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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NONPROFIT HOSPITALS Nonprofit hospitals come under increased scrutiny to justify their billions in tax breaks.

Quick takeaway: More than a dozen states have passed or are considering legislation aimed at better defining charity care , increasing transparency about the benefits nonprofit hospitals provide, or setting minimum financial thresholds for charitable work in communities.

Further context: As previously covered in this newsletter , the issue stems from growing discontent over hospitals’ failure to provide charity care commensurate with the tax breaks they benefit from.

What it means: The issue has only picked up steam as consumers’ medical debt has skyrocketed. Last year, it was estimated that as many as 100 million Americans – including 41 percent of all adults in this country – are now saddled with some form of medical debt.

Making matters worse are the growing reports of hospitals’ aggressive bill-collection tactics , many of them deployed by these nonprofit health systems.

PRIVATE EQUITY Medical price increases are being driven by private equity investments.

Quick takeaway: A new study shines a spotlight on the impact that private equity interests are having on our healthcare cost curve.

Digging deeper: According to the research , private equity firms are rapidly acquiring physician practices and boosting prices in an array of specialties. Among the conclusions:

Private equity acquisitions are increasing – more than six-fold between 2012 and 2021.
Private equity firms are consolidating and amassing high market share in local physician practice markets.
Private equity acquisitions are associated with price and expenditure increases.

What it means: Perhaps chief among the study’s takeaways is that increased attention is urgently needed to address how private equity interests are impacting competition, costs, and access, as already seen in specialties, like anesthesiology , and in rural communities across the country.

HEALTHCARE SPENDING Annual healthcare spending now sits at more than $6,000 per person.

Quick takeaway: With healthcare costs on the rise, a new report from the Health Care Cost Institute (HCCI) puts a fine point on how those rising costs are affecting consumers’ bottom lines.

Digging deeper: Between 2017 and 2021, median healthcare spending increased by 24 percent, when it reached $6,139 per person. That spending increase was driven primarily by rising medical prices, with overall spending growth reflecting a 9 percent increase in prices and a 14 percent increase in utilization.

What it means: According to HCCI, healthcare costs “depend a great deal on where you live, the result of market dynamics like prices, practice patterns, and competition.”

The data shows that market consolidation continues to wreak havoc on medical prices and overall healthcare spending. In fact, in 2021, most hospital markets lacked competition, and two-thirds of the 183 metropolitan areas studied became less competitive over time.

MEDICARE ADVANTAGE New data reinforces the critical role that Medicare Advantage (MA) plays in the lives of beneficiaries.

Quick takeaway: A pair of new reports adds to the growing body of research underscoring the value of MA compared to traditional Fee-for-Service (FFS) Medicare.

Digging deeper: According to the two reports:

MA enrollees are more likely to be socioeconomically disadvantaged than FFS enrollees.
Health-related social needs , such as food insecurity or social isolation, are largely prevalent in MA enrollees.

What it means: With an emphasis on coordinated care and enhanced benefits structure, MA plans are uniquely positioned to meet the challenging health needs of some of the most at-risk, high-need Medicare-eligible patients. It’s no wonder the program now serves over 30 million Americans – more than half of the Medicare population.

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Talking Points: 10 July 2023

Fri, 07 Jul 2023 13:58:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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HEALTHCARE FRAUD A widespread investigation uncovers billions of dollars in healthcare fraud.

Quick takeaway: The Department of Justice recently announced charges against 78 individuals for their involvement in defrauding healthcare programs for the elderly and disabled of more than $2.5 billion.

Further context: Among the charges filed are allegations of telemedicine and pharmaceutical fraud. Many of the defendants are accused of obtaining funds by submitting fraudulent claims for Medicare reimbursement.

What it means: According to recent estimates, taxpayers are losing more than $100 billion a year to Medicare and Medicaid fraud, reinforcing the critical importance of care coordination to protect patients and our healthcare system from waste, fraud, and abuse.

SITE NEUTRAL PAYMENTS Lawmakers look to crack down on hospitals’ billing at higher rates for services provided in outpatient settings.

Quick takeaway: Momentum has been building in Washington and in state capitals across the country to address the way hospitals charge patients, employers, health plans, and the government more for the same services doctors deliver in their offices.

Digging deeper: Data shows that this practice drives more hospital acquisition of independent physician offices. It’s projected that advancing these “ site neutral ” payment policies would save Medicare billions of dollars.

What it means: With bipartisan support growing to address the issue, lawmakers face stiff opposition from powerful hospital special interests, as the industry works to protect what has become an incredibly lucrative revenue stream.

Rx OVERPAYMENTS The government spent hundreds of millions of dollars more than it needed to on prescription drugs.

Quick takeaway: Between 2015 and 2020, the Department of Labor (DOL) spent $321.3 million more than necessary on drugs for its Federal Employees’ Compensation Program (FECA), according to a DOL Inspector General audit .

Further context: Auditors found that the FECA program failed to pay the best price for prescription drugs, not effectively managing its pharmaceutical benefit, leading to millions of dollars in excess spending.

The program even provided the wrong drugs to individuals, in addition to spending on drugs that may not have been medically necessary or appropriate.

What it means: Overall, the auditors determined the program’s managers “lacked sufficient clinical expertise and guidelines to ensure appropriate pharmaceutical decisions.”

Perhaps most tellingly, the audit cited FECA’s lack of a pharmacy benefit manager ( PBM ), which would not only have helped the program get a better deal on expensive drugs, but ensure better adherence to clinical patient safety guidelines.

HEALTHCARE COSTS Healthcare costs are projected to rise 7 percent next year.

Quick takeaway: Looking to 2024, researchers at PricewaterhouseCoopers’ Health Research Institute pointed to providers’ expense growth and subsequent rate increases, along with pharmaceutical price hikes, as driving healthcare inflation.

Further context: Next year’s projected 7 percent increase tops the 5.5 percent and 6 percent estimates for 2022 and for this year. Drilling further into the projections:

Providers will pass on higher labor and supply expenses
Drug price hikes could hit double-digits
A shift to outpatient utilization may help to offset the increase
Employers will play a critical role in the trajectory of costs

MEDICARE ADVANTAGE The Medicare Advantage (MA) program continues to distinguish itself from traditional Fee-for-Service (FFS) Medicare.

Quick takeaway: Through its integrated approach to care and a focus on overall wellness, MA plans provide a level of value to beneficiaries eclipsing FFS.

Further context: New studies highlight how this value translates into better health outcomes for beneficiaries:

According to a report from Avalere Health , MA beneficiaries with chronic conditions have fewer inpatient hospital stays and emergency department visits than FFS beneficiaries;
Research published in JAMA Network Open , shows the use of high-risk medication being lower for those enrolled in MA plans compared to FFS; and,
A study issued in JAMA Health Forum found that home-delivered meals offered by MA plans not available in FFS were associated with improved health outcomes in older adults.

What it means: The data reinforces the importance of protecting MA from funding cuts and burdensome administrative changes that could unravel the blanket of care that the more than half of all eligible Medicare beneficiaries have come to depend on.

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Talking Points: 26 June 2023

Fri, 23 Jun 2023 15:08:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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PROVIDER CONSOLIDATION TREND Consolidation of providers into larger health systems is leading to even greater concentration in our healthcare system.

Quick takeaway: This consolidation trend has resulted in fewer large systems at the top of the size distribution, with newer small systems grouped at the bottom.

Further context: By examining existing data , researchers identified some key takeaways, including:

Health systems controlled a larger share of healthcare resources in 2021 than they did in 2018
Consolidation has driven increasing variation in system size
Patients receiving care in a truly independent physician practice is rarer than the data suggests

What it means: A separate study highlights the impact of this trend, with researchers linking hospital consolidation to closure of inpatient pediatric healthcare services.

HOSPITALS’ RISKY INVESTMENTS Despite claims of financial hardship, large hospitals continue to pursue aggressive investment strategies.

Quick takeaway: Hospitals – especially large nonprofits – are increasingly acting like venture capitalists , ramping up investments with an eye on immediate returns.

Digging deeper: Recent studies have established that the financial strain being reported by these large systems is driven primarily by investment losses .

What it means: Health economists have cautioned regulators and policymakers that any financial relief for nonprofit hospitals and health systems reporting financial losses must take into account the outsized role that investment losses had on these institutions’ bottom lines.

In their words, “Wall Street losses should not impact private payers’ and taxpayers’ payments to hospitals.”

HEALTH SPENDING National health spending will eclipse $7 trillion by 2031.

Quick takeaway: According to the latest projections from the Centers for Medicare & Medicaid Services ( CMS ), healthcare spending is expected to rise by an average of 5.4 percent annually over the next decade, when it will reach $7.17 trillion and account for nearly one-fifth of the U.S. economy (19.6 percent of gross domestic product).

Further context: With medical spending across all categories expected to rebound on this side of the COVID public health crisis, a surge of Medicare spending – driven primarily by hospital costs – will push healthcare expenditures to a rate that outpaces inflation .

WEIGHT LOSS Rx Weight loss drugs threaten to blow up healthcare costs.

Quick takeaway: With patient demand for these drugs skyrocketing, there’s growing concern over what the cost of covering these new treatments will do to our healthcare system.

Further context: According to one analysis , the cost to Medicare alone could be as high as nearly $27 billion a year . To put that into context, total annual spending in the Medicare Part D prescription drug program in 2021 was $98 billion .

What it means: Given that any long-term benefits of these drugs have yet to be proven to justify the enormous cost to our overall healthcare system, stakeholders are already sounding the alarm, including employers , who worry that they lack the ability to absorb the costs of covering such an expansive – and, expensive – new market.

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Talking Points: 20 June 2023

Fri, 16 Jun 2023 14:30:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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A deeper dive on the recent push to end “dishonest” hospital billing in Congress.

Further context: There’s been a recent bipartisan drive in Congress to end the costly practice known as “dishonest billing.” In the Senate, the Site-based Invoicing and Transparency Enhancement (SITE) Act, introduced by Senators Braun (R-IN), Hassan (D-NH), and Kennedy (R-LA), would ensure that patients are accurately billed for the location where their care takes place. The effort in the House is being led by Representatives Hern (R-OK) and Kuster (D-NH).

Driving the reform: Media outlets have highlighted how devastating and deceptive ”dishonest billing” can be for patients.One story, reported by NPR , tells of a woman whose doctor’s office was acquired by a hospital, which then billed a doctor’s visit as occurring in a “hospital-based setting.” The result: a $1,262 “operating room services” facility fee.

Digging deeper: Off-campus hospital outpatient departments currently are paid more for the same services that patients receive at independent physician offices. That’s because hospitals are billing Medicare and insurers as if the services delivered in off-campus outpatient departments were performed in a more expensive hospital setting.

By the numbers : The SITE Act will save taxpayers billions of dollars. In 2020, the Congressional Budget Office estimated taxpayers will pay close to $40 billion in excess costs to Medicare due to unreasonable facility fee payments over the next decade.

What it means: The SITE Act reduces costs for patients, while also removing a key incentive that’s driven hospital consolidation. Under the current system hospitals purchase off-campus physician practices and use the hospital’s national provider identification number and hospital billing forms to bill at hospital rates – a tactic under which the hospital receives higher payments. These higher reimbursements provide a big incentive for hospitals to buy physician practices when they can bill a higher charge for the same service, by the same doctor, at the same location.

What they’re saying:

Sen. Maggie Hassan:

“Granite Staters who have been going to the same doctor for years are experiencing sticker shock when a hospital acquires a doctor’s office or clinic and all of a sudden starts charging extra fees for the same services. Our bipartisan bill takes on the health care industry to eliminate unfair fees, lower costs for patients, and save taxpayer dollars—and then we use those savings to invest in the health care workforce. Lowering health care costs for Americans is a bipartisan priority, and I urge my colleagues on both sides of the aisle to support this commonsense bill.”

Sen. John Kennedy:

“Hospitals are gaming the system to charge Louisiana patients and taxpayers more for out-patient, off-site care. That’s wrong, and I’m proud to work with Sens. Braun and Hassan to make it right by correcting Medicare’s billing policy.”

Sen. Mike Braun:

“Hoosiers know our health care system is broken, and one problem we can fix right now is services at off-campus outpatient facilities being billed to Medicare at higher hospital rates. Fixing this problem will save taxpayers 40 billion over the next decade, and this bill will apply some of those savings to fixing our nursing shortage by creating a new program to pay for training.”

Threats: Despite the groundswell of support for this commonsense reform, lawmakers are up against a large and powerful lobbying campaign to defeat this profitable loophole.

Supporters: There is a large and growing bipartisan coalition which supports this commonsense reform. Among the supporters include:

Americans For Prosperity
Committee for a Responsible Federal Budget
National Taxpayers Union
Families USA
American Benefits Council

Learn more: As the debate continues, be sure to follow along and keep an eye out for opportunities to add your voice to the conversation.

Talking Points: 12 June 2023

Fri, 09 Jun 2023 15:48:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

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MEDICARE OVERBILLED An audit uncovers millions of dollars in overbilling charges to Medicare.

Quick takeaway: According to the results of the analysis conducted by the Office of the Inspector General ( OIG ), Medicare overpaid $22.5 million in 2019 and 2020 due to incorrect place-of-service coding by providers.

Further context: Medicare pays for physician services separately from the payments it makes to inpatient facilities, such as skilled nursing facilities and hospitals.

By analyzing more than 2 million physician claims over the course of those two years, OIG linked the millions of dollars in overpayments to providers incorrectly reporting where care had been delivered on claims forms.

What it means: The audit comes at a particularly sensitive time for hospitals, who already find themselves the target of increased public scrutiny, not to mention legislative focus, as a result of dishonest billing and surprise medical bills .

NONPROFIT HOSPITALS Charity care continues to fall at nonprofit hospitals.

Quick takeaway: Allina Health System, a wealthy nonprofit operating more than 100 clinics and hospitals throughout Minnesota and Wisconsin, is withholding care from patients with unpaid medical bills.

Digging deeper: The drastic measure by the nonprofit health system (with $4 billion in annual revenue), effectively cuts off access to medical care for these patients, many of whom come from low-income communities, raising further concerns about equitable access to healthcare and the corresponding impact to these vulnerable populations.

In 2020, Allina spent less than half of 1 percent of its expenses on charity care and avoided roughly $266 million in local, state, and federal taxes.

What it means: As previously highlighted , nonprofit health systems continue to rake in millions of dollars on the backs of taxpayers, all while sidestepping their obligation (and, core mission) to treat the medically underserved. Another example of hospitals prioritizing financial gain over community health.

Rx PATENT ABUSE Drugmakers’ abuse of the patent system costs American patients billions of dollars.

Quick takeaway: A new analysis estimates that the pharmaceutical industry’s anti-competitive patent abuse tactics cost U.S. consumers more than $40 billion in 2019.

Further context: Researchers point out that this translates into an additional $120 per year for every single person in this country “solely because of antitrust violations” by drug manufacturers.

What it means: The research went on to highlight several common tactics used by drugmakers to decrease competition and artificially increase their prices, including:

Horizontal collusion, or “shadow pricing,” which happens when different drugmakers increase the price of their products used to treat the same condition at the same time.
Patent thickening, which drugmakers use to create a web of overlapping patents to exclude and discourage competition.
Product hopping, which is when a drug company slightly modifies a brand-name drug before its patent expires, in order to replace the original drug before generic (less expensive) versions are brought to market.

EMPLOYER-PROVIDED COVERAGE As lawmakers around the country debate taxing employer-provided healthcare, a new national survey underscores how critical this coverage is for many.

Quick takeaway: According to the results , the vast majority – 68 percent – said they preferred healthcare coverage through their employer over getting it from the government.

Further context: The survey also showed that a majority (63 percent) would be less likely to vote for a lawmaker who supported taxing employee health benefits – including, 60 percent of Democrats, 68 percent of swing voters, and 57 percent of Republicans.

What it means: Affordable healthcare remains the top issue for many voters across the country.

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Talking Points: 5 June 2023

Fri, 02 Jun 2023 13:38:00 GMT

A quick roundup of the issues driving the healthcare reform conversation .

Item of the Week

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DISHONEST BILLING A new proposal targets hospitals’ dishonest billing.

Quick takeaway: The bipartisan bill would put an end to hospitals billing more for services delivered at their non-hospital locations as if they were delivered in a hospital setting.

Further context: Off-campus hospital outpatient departments are currently being paid more by Medicare and private insurers for the same services that patients receive at physician offices. That’s because hospitals have been billing Medicare and private insurers as if the services delivered there were performed in a more expensive hospital setting.

What it means: The new bipartisan proposal from Reps. Kevin Hern (R-Oklahoma) and Annie Kuster (D-New Hampshire) would fix this issue by requiring all off-campus outpatient departments owned by hospitals to have separate national provider identification (NPI) numbers to bill under by the beginning of 2025 and to submit claims on forms that transparently identify where the medical service was delivered.

The bill was immediately celebrated as a step in the right direction to curtail rising costs by policy experts, business groups, and other healthcare stakeholders.

HEALTHCARE COSTS More Americans skipped medical care last year due to costs.

Quick takeaway: During the height of the coronavirus pandemic, a record low share of Americans skipped medical treatment, likely as a result of COVID-era stimulus money and greater access. However, a new survey shows that those numbers rose substantially last year.

Digging deeper: Inflation was historically high in 2022, causing many Americans to cut back on spending – including healthcare. The most commonly skipped form of medical care was the dentist, followed by seeing a doctor and filling a prescription .

What it means: It’s no secret that the ability to afford healthcare often translates into better health outcomes. Against that backdrop, a separate report provides little comfort in terms of the trajectory of healthcare costs.

According to the data, the average annual healthcare costs for a family of four is now just over $31,000 , an increase of 5.6 percent from last year. For individuals, that cost reached approximately $7,200.

Rx MARKUPS Employers paid more than Medicare for physician-administered drugs.

Quick takeaway: According to a newly published analysis of claims data and Medicare files, employer-sponsored health plans pay significantly more than Medicare for high-cost physician-administered medicines.

Further context: Between 2016 and 2020, price markups increased for five of the top ten drugs that account for the most spending – more than doubling for three of them.

What it means: The study highlights the added financial pressure employers already face as a result of rising medical costs . While that cost burden is shared with their workers through premium increases or high-deductible plans, the tight labor market makes it increasingly important for employers to offer competitive benefits packages to attract talent.

HOSPITAL BAILOUTS California hospitals are looking for a bailout – despite many of them not needing one at all.

Quick takeaway: An investigative analysis uncovered that wealthy hospitals in California are looking to siphon money away from facilities serving some of the state’s poorest patients.

Further context: The issue stems from a 2009 financing scheme that hospitals across the state agreed to that allows them to tap into billions more per year in taxpayer dollars to support the state’s Medicaid program.

Now, some of those hospitals serving that population face dire financial circumstances, including cutbacks or even closing. But, rather than seeking assistance for only those hospitals, California’s powerful hospital industry is putting the squeeze on lawmakers for an unprecedented bailout, even as the state faces a nearly $32 billion budget deficit.

Not only are they seeking an emergency infusion of $1.5 billion, they’re also looking to open up a steady annual stream of new healthcare tax dollars.

What it means: But, the analysis revealed that, even despite increased labor costs and inflation, many California hospitals have been profitable in recent years. In fact, the industry earned roughly $131 billion last year in patient revenue – $7.3 billion more than the previous year. After accounting for rising costs, the industry still turned a profit of around $207 million in 2022.

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