Tag: Medicare

What will Harris mean for Health Care? – Not much

Aug 23, 2024

By MATTHEW HOLT

The Democratic convention wrapped with a fine speech from Kamala Harris, star power from the Obamas and Clintons, and a bunch of Republicans telling their ideological brethren that it was better to be a Democrat than a Trumper. More importantly no Beyonce/Taylor Swift duet–as we were promised by Mitt Romney.

There was a lot of talk about some aspects of health care. But overall if Harris wins, don’t expect much change to the current health care system.

Why not?

First there’s the pure politics. The Dems need to win back the House (probable but not certain) and hold the Senate to pass legislation. Right now they have a 51-49 edge in the Senate. Most likely that goes to 50-50 as the Republicans will definitely pick up Joe Manchin’s seat in West Virginia. There’s a series of seats the Dems currently hold in close races (Montana, Ohio, MIchigan, Nevada, Arizona) that they’ll need to keep to maintain it at 50-50, and it’s hard to see any pickups from Republicans (perhaps Florida or Texas if you squint really hard). The good news is that Manchin (WV) and Sinema (AZ) will soon both be gone, so the Dems that will be there won’t be as difficult to persuade to follow a Presidential agenda. But that will still leave Walz as VP to do what Harris did and pass a bunch of deciding votes under reconciliation, which massively limits what the legislation can do–it has to be “budget related.”

Which leads us to what we have been hearing from Harris and her campaign about health care? We’ve heard a lot about issues that have impacts on health, specifically creating affordable housing and fighting child poverty, but little that is directly related to health care itself. Really only two issues stand out. Abortion and reproductive rights, and drug prices.

Clearly Harris will take a swing at reversing Dobbs and passing a national right to abortion. This will need either a packing of the Supreme Court (my favorite) or ending the filibuster or both. Either of these will be incredibly tough to pull off constitutionally and politically and will take huge amounts of political oxygen. Of course the cynics would say, the Democrats are better off leaving this as an issue to use to beat up the Republicans on. But if it gets done, womens’ and reproductive rights will only be back where they were in 2022.

Regarding the cost of drugs, there will continue to be much justified bashing of big pharma, but the extension of insulin price controls is something that (eventually) the market via CivicaRX and others is getting to anyway. Meanwhile the IRA gave Medicare the right to negotiate drug prices and the results are not exactly earth shattering. For example, CMS says it’s negotiated the cost of blood thinner Eliquis from about $6,000 a year to under $3,000 This sounds good until you realize that the price is only that high because of patent games the manufacturer BMS plays in the US, and the price in the rest of the world is under $1,000. We’ll hear more about this as the price cuts come into effect, (although not till 2026!) and more drugs get negotiated, but overall this isn’t exactly an earth-shattering change.

Finally there’s already a guaranteed fight about extending the premium subsidies for ACA plans. These were first in the pandemic American Rescue Act, then extended in the IRA, but they currently are scheduled to end in 2025. It’s hard to imagine them not being extended further whatever the makeup of the Senate, assuming a Democratic House of Representatives. (A Marjorie Taylor Greene speakership does give me pause!). But again there’s nothing new here and the overall flavor of expensive premiums and high deductibles in the current ACA marketplace won’t change.

So what’s not going to happen? Virtually all the interesting stuff we were promised by Harris and for that matter Biden in 2020. You may have missed the one actual “policy-first” speech at the convention which came from Bernie Sanders. To be fair a lot of his agenda was already in the Biden legislation. That was no accident as Biden deliberately reached out to him in 2020 and 2021 and enacted a pretty radical agenda on infrastructure, climate, industrial policy and more. And when I say radical I mean milquetoast social democrat by European standards! But what wasn’t in that agenda? No Medicare for all, which Bernie ran on in 2019/20 and brought up again at the convention. Who else proposed that in 2019? Why, a certain Kamala Harris. That never made it into the Biden agenda. We didn’t even get legislation introduced about lowering the Medicare age to 60, which was a campaign promise. There’s been no conversation about any of this from Harris or from Biden before he withdrew. It’s just a bridge too far.

Which leads to the stuff that gets debated about in THCB and elsewhere as to how the system actually works. There’s been nothing about Medicaid expansion (or its continued contraction). No talk about reining in hospital consolidation. No mention even of insurers gaming Medicare Advantage or private equity buying up physician practices. Nothing about the expansion of value-based care.

What we can expect in a Harris administration is more of the same from CMS and potentially a slightly more aggressive FTC. That will mean continued efforts to veer slightly away from fee-for-service in Medicare, a few more constraints on the worst behavior in Medicare Advantage, and possibly some warning shots from the FTC about hospital monopolies. But the trends we’ve seen in recent years will largely continue. We’re not getting a primary-care based capitated system emerging from the wreckage of what we have now, and unlike the Clinton and even Obama administrations, there’s not even any rhetoric from Harris or Biden about how that would be a good idea.

So politically I don’t think the Harris administration will be very exciting for health care. And if the other guy wins, as Jeff Goldsmith wrote on THCB last month, expect even less.

So what can we do about health care costs?

Feb 20, 2024

By MATTHEW HOLT

Last week Jeff Goldsmith wrote a great article in part explaining why health care costs in the US went up so much between 1965 and 2010. He also pointed out that health care has been the same portion of GDP for more than a decade (although we haven’t had a major recession in that time other than the Covid 2020 blip when it went up to 19%). However, it’s worth remembering that we are spending 17.3% of GDP while the other main OECD countries are spending 11-12%. Now it’s true that the US has lots of social problems that show up in heath spending and also that those other countries probably spend more on social services, but it’s also clear that we don’t actually deliver a lot more in services. In fact probably the most famous health economics paper of the last 50 years was Anderson & Rienhardt’s “It’s the Prices, Stupid”, which shows we just pay more for the same things. Anyone who’s looked at the price of Ozempic in the US versus in Denmark knows that’s true.

But suspend disbelief and say we actually wanted to do something about health care costs, what would we do?

There are 4 ways to cut health care costs

Cut prices
Cut overall use of services
Reduce only unnecessary services
Replace higher priced services with lower priced ones

Number 3 or reducing only unnecessary services is the health policy wonks dream.

HHS Again Suspends Disbelief: The Medicaid Program Will Ignore the Greatest Health Threat to Medicaid Beneficiaries

Jul 12, 2023

BY DAVID INTROCASO

In May the Centers for Medicare and Medicaid Services (CMS) simultaneously published two proposed Medicaid rules (here and here) intended to improve moreover access and quality. Both discussed at length the agency’s commitment to “addressing health equity.” The first sentence in both identified health equity as a Medicaid program priority. The proposed “ensuring access” rule stated CMS “takes a comprehensive approach to . . . better addressing health equity issues in the Medicaid program.” CMS went on to state “we are working to advance health equity by designing, implementing, and operationalizing policies and programs” by “eliminating avoidable differences in health and quality of life outcomes experienced by people who are disadvantaged or underserved.”

Nevertheless, CMS’ interest in health equity is entirely performative. It is impossible to believe the agency is legitimately interested in “eliminating avoidable differences” because leadership is well aware the greatest health equity threat to Medicaid – and Medicare – beneficiaries is the climate crisis. This is because the most climate vulnerable Americans are Medicaid and Medicare populations. Yet, the climate crisis is never addressed much less mentioned in either proposed Medicaid rule. The word “climate” never appears in 291 Federal Register pages.

This is explained by the fact that despite the Biden administration’s “government-wide approach” approach to “tackle” the climate crisis, HHS has refused to address the threat the climate crisis poses by regulating the healthcare industry’s massive carbon footprint.

Children, 36 percent of whom are Medicaid beneficiaries, are uniquely vulnerable. Fine respirable particles resulting from fossil fuel combustion are particularly harmful because children breathe more air than adults relative to their body weight. Research published last year concluded the health effects to the fetus, infant and child include preterm and low-weight birth, infant death, hypertension, kidney and lung disease, immune-system dysregulation, structural and functional changes to the brain and a constellation of behavioral health diagnoses.

Medicare beneficiaries, already compromised due to higher incidence rates of co-morbidities, are at even greater risk related to arthropod-borne, food-borne and water-borne diseases because the climate crisis can increase the severity of over half of known human pathogenic diseases. Extreme heat episodes are particularly deadly. Over the past 20 years heat-related mortality among seniors has increased 54%.

The Truth About Medicare Advantage Saving Medicare

Jun 21, 2023• 2

BY GEORGE HALVORSON

We know from the current annual report from the Medicare trustees that Medicare Advantage is saving Medicare, and that Medicare will be a much stronger program as Medicare Advantage continues to grow.

When we look at actual numbers from that report, we see that Medicare Advantage cost Medicare $403.3bn last year.

The report shows that Medicare is growing 6.7% each year in total revenue. We see that Medicare Parts A and B have expense growth that slightly exceeds 8%, and that Medicare Advantage is projected to have expense growth of 4.2% for the year.

That means we’re losing money from the fee-for-service part of the Medicaid program — and that is eating into the Medicare trust fund. We also can see that Medicare Advantage is making a surplus for Medicare, and is increasing the size of the fund.

We know that Medicare Advantage bids against the average cost of Medicare in every county to create the capitation levels for each year. Those bids are typically discounted by 15% (or more) from the average Medicare cost.

Those discounted bids cost Medicare less in actual dollars each month. The Medicare Advantage critics speculate about coding levels for the plans, but the Medicare trust fund doesn’t care about codes.

They only care about actual dollars. When you look at actual dollars, we see that Medicare spent $403.3bn to pay for the coverage with Medicare Advantage plans.

THCB Spotlight: Glen Tullman, Transcarent & Aneesh Chopra, Carejourney

Apr 6, 2023

No THCB Gang today because my kid is in the hospital (minor planned surgery) So instead I am reposting this great interview from last week.

I just got to interview Glen Tullman, CEO Transcarent (and formerly CEO of Livongo & Allscripts) & Aneesh Chopra, CEO Carejourney (and formerly CTO of the US). The trigger for the interview is a new partnership between the two companies, but the conversation was really about what’s happening with health care in the US, including how the customer experience needs to change, what level of data and information is available about providers and how that is changing, how AI is going to change data analytics, and what is actually happening with Medicare Advantage. This is a fascinating discussion with two real leaders in health and health tech — Matthew Holt

All Three Legs of the Obamacare Stool Are Working Well – Part 2

Feb 17, 2023

BY GEORGE HALVORSON

2022 Medicare Advantage data gathering process change made last year just made upcoding for plans irrelevant and impossible, but the critics do not accept that it happened.

CMS just ended that upcoding debate for 2022 by completely killing the coding system for the plans, effective immediately. The plans can’t code risk levels up because the coding system was eliminated entirely for 2022.

RAPS is dead.

The payment approach for Medicare Advantage now has no upcoding components and the government just used their new and more accurate numbers to create the 2023 payment level for the plans.

The numbers went up a bit with the real risk levels because the plans actually seemed to have been undercoding in spite of their best efforts to have higher numbers in their RAPS data flow.

We should now be able to put that issue to bed and look at what has been accomplished overall by the Affordable Care Act.

The Medicare Payment component of the Affordable Care Act just evolved to a new level — and the entire Obamacare package should now be recognized for what it is now and what it has become.

All Three Legs of the Obamacare Stool Are Working Well

Feb 15, 2023• 3

BY GEORGE HALVORSON

When the Affordable Care Act was passed, the politics were so intense and the debates were so filled with rhetoric in all directions that most people actually didn’t understand that there were three major component parts to the strategy and program that function very directly as a package, and should be looked at now in the context of several years of implementation to see how each part of that law is currently doing.

Medicaid was our first priority.

The first component part — and the one that had the highest need for passage when the law was passed because we were doing such a horrible job as a country in providing coverage to our children and to our low-income people — was Medicaid expansion.

We were the only country in the industrialized world that did not have health care available to our low-income children, and that deficiency damaged so many people and was so terrible as a reality that we needed to correct it as soon as we could.

That program is on the right track.

Most states have now used the full Medicaid package and we now have a total of 90 million people enrolled in Medicaid. About 41 million of the members are in the CHIPS program, and a majority of the births in a majority of the states are now Medicaid births.

The states have all used a number of modern care improvement tools to provide and deliver significantly better care than the old Medicaid programs that are far too often delivered to their beneficiaries.

The Secret Surveillance Capitalism That Suffuses Medicare

Oct 31, 2022

By MICHAEL MILLENSON

Imagine a government program where private contractors boost their bottom line by secretly mining participants’ personal information, such as credit reports, shopping habits and even website logins.

It’s called Medicare.

This is open enrollment season, when 64 million elderly and disabled Americans choose between traditional fee-for-service Medicare and private Medicare Advantage (MA) health plans. MA membership is soaring; within a few years it’s expected to encompass the majority of beneficiaries. That popularity is due in no small part to the extra benefits plans can provide to promote good health, ranging from gym membership and eyeglasses to meal delivery and transportation assistance.

There is, however, an unspoken price for these enhancements that’s being paid not in dollars but in privacy. To better target outreach, some plans are routinely accessing sophisticated analytics that draw upon what’s euphemistically labeled “consumer data.” One vendor boasts of having up to 5,000 “certified variables for every adult in America,” including “clinical, social, economic, behavioral and environmental data.”

Yet while companies like Facebook and Google have faced intense scrutiny, health care firms have remained largely under the radar. The ethical issue is obvious. Since none of this sensitive personal information is covered by the privacy and disclosure rules protecting actual medical data, it is being deliberately used without disclosure to, or explicit consent by, consumers. That’s simply wrong.

But a more fundamental concern involves the analyses themselves.

To Improve Patient Care, Think Both “Zebras” and Golf

Feb 5, 2020

By MICHAEL MILLENSON

Super Bowl Week ended with the San Francisco 49ers and 161 U.S. hospitals having something in common.

Both were publicly penalized, both lost money as a result and both passionately believed the process was unfair. Unfortunately, it’s not easy to decide whether their objections were sensible or sour grapes and, in the case of hospitals, the real-life consequences are not a game.

The penalty that pained the 49ers occurred shortly before halftime of Super Bowl LIV, when offensive pass interference was called on tight end George Kittle. The call negated a big gain that might have enabled the 49ers to take the lead.

Replays showed that the referees – nicknamed “zebras” for their black-and-white striped shirts – were technically correct in their decision. Nonetheless, controversy erupted over whether given other possible penalties called or overlooked, this one deserved a yellow flag.

Hospitals call that kind of context “risk adjustment.” A few days before the Super Bowl, the Medicare program blew the whistle on a group of hospitals having high rates of infection and other patient injuries. The hospitals who are outliers in what are blandly labeled “hospital-acquired conditions” (HACs) suffer a cut of one percent in their Medicare payments over next fiscal year.

Why the Centene and WellCare Merger is the Biggest Deal in 2020

Jan 31, 2020• 1

By ANDY MYCHKOVSKY

I feel like the healthcare world just skipped over the $17.3 billion mega-merger between Centene and Wellcare, which just received final regulatory approval last Wednesday. With their powers combined, this new company will create the Thanos of government-focused health plans, hopefully without any of the deranged plans to take over the world. I do get it, 181 million lives are covered by employer-sponsored insurance, between full-risk and self-insured plans. These employer populations have the most disposable income and their HR departments are willing to provide supplemental benefits. However, in my opinion, the future growth of health insurance will be governmental programs like Medicare Advantage (MA), Medicaid managed care, and ACA exchanges. But instead of me telling you this, here is exactly what Centene and WellCare said in a press release to defend the merger:

“The combined company would be the leader in government-sponsored healthcare with increased scale and diversification both geographically and in its managed care service offerings, and enhance access to high-quality services for members. It will offer affordable and high-quality products to its more than 12 million Medicaid and approximately 5 million Medicare members (including Medicare Prescription Drug Plan), as well as individuals served in the Health Insurance Marketplace and the TRICARE program. The combined company will operate 31 NCQA accredited health plans across the country and will have increased exposure to government-sponsored healthcare solutions through WellCare’s Medicare Advantage and Medicare Prescription Drug Plans. It will also benefit from leveraging Centene’s growing position in the Health Insurance Marketplace to new markets. The transaction creates a company with the size and scale to better serve members through enhanced healthcare programs, expanded capabilities and increased investment in technology.”

Simply put, here’s some of quick stats provided at the JP Morgan Healthcare Conference presentation on January 13, 2020:

National footprint now serving 1 in 15 Americans
Clear market leader in Medicaid managed care and ACA exchange marketplace
Dominance serving most complex populations, #1 leader in LTSS and #2 in dual eligible
Competitiveness in the Medicare Advantage (MA) enrollment wars
$500 million in proposed savings due to annual cost synergies