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Matthew’s health care tidbits: Medicare Advantage is now a provider fracking contest

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Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

Yes it’s time to talk Medicare Advantage (MA). It’s been a huge couple of weeks for the world of MA. On the commercial side, CVS bought the biggest pure play MA provider, Oak Street Health for $10bn. This pissed me off as if they paid $2 a share more I’d have made a profit on the stock I foolishly bought “on a dip” in 2021.

But this amazed many of us on THCB Gang, as they paid a huge premium and it works out to some $60k per patient. Now health care organizations have been overpaying for patient “lives” as long as I can remember–going at least as far back as Aetna nearly going out of business when it bought US Healthcare in 1996. So why is today’s incarnation of Aetna buying providers?

Well that’s to do with the regulatory side of MA. I have been on record since the very first post of THCB that Medicare FFS is an inefficient and expensive program–even if 80% of American hospitals say they lose money on it and have to charge commercial insurers more to make up for it. But while it’s possible to agree with George Halvorson that MA delivers better care at a lower cost than FFS Medicare, it is simultaneously possible to believe that MA costs more than it should. That’s because of aggressive RAF upcoding that’s been built both into home visits from companies like Signify and also into the EMRs doctors have been using to code MA members’ health status.

There are lots of proposals on how to fix this–including this one from Chenmed on how to change MA from paying for inputs (i.e how sick people are when they join MA) to outputs (how much better they got while in MA). But it’s clear that CMS is now officially coming after upcoding including full cross plan audits back to 2018. Even if not back to 2011. The MA plans will grumble about those past audits and tie CMS up in court but they know going forward the game is up

To make more money in MA they need to get hold and shake loose or frack some of the 85% of the premium that goes to provider organizations. Hence they are all getting into bed with them or buying them outright. UHG, Humana & now Aetna/CVS have been buying physician groups that serve MA populations at a quickening rate, and their goal is to put more of the 50% of seniors already into MA into those groups.

Will this save any money?  Well probably not, at least not yet. Humana has been reporting on the costs in its full risk capitated MA groups versus its FFS ones for a couple of years, and the difference is a rounding error. But the point is that the next war in Medicare Advantage is going to be what happens inside these plan-owned medical groups. So expect a lot more scrutiny of both costs, outcomes and patient experience within MA focused medical groups starting about now. 

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

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. 

Continue reading…

THCB Gang Episode 116, Thursday February 16

Joining Matthew Holt (@boltyboy) on #THCBGang on Thursday February 16 were futurist Ian Morrison (@seccurve); delivery & platform expert Vince Kuraitis (@VinceKuraitis); and Olympic rower for 2 countries and all around dynamo Jennifer Goldsack, (@GoldsackJen). Sadly, fierce patient activist Casey Quinlan (@MightyCasey) had to cry off, and sadly never returned to THCBGang.

We really dug into distributed care and who was going to control the emerging virtual first conundrum.

You can see the video below & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

Let’s Finish The Job

BY MIKE MAGEE

In President Biden’s State of the Union Address, the most oft repeated phrase was “Let’s Finish The Job!” This came as part of an appeal for partnership as well as an assertion that in his first two years as President much had been accomplished.

Several days later, as if on cue, U.S. Senator Amy Klobuchar (D-MN) and Senator Chuck Grassley (R-IA), joint chairs of the Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights, announced that two bipartisan pieces of legislation focused on reducing the price of drugs to consumers had passed the Senate Judiciary Committee.

Both bills focus on the range of shenanigans Pharma firms have engaged in to extend their 20 year patents on blockbuster brands and delay generic versions from coming on the market.

The first bill – the Preserving Access to Affordable Generics and Biosimilars Act – is designed to prevent Big Pharma firms from flooding the FDA with sham requests for patent extensions. In the process, opponents have popularized a new term – “patent thicket” to describe the barrage of skimpy patent extension tricks companies use to extend their original 20 years of exclusivity. 

Continue reading…

All Three Legs of the Obamacare Stool Are Working Well

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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.

Continue reading…

Give Him a Hand – No, Really

BY KIM BELLARD

When I read The Washington Post article about how a Tennessee high school student’s engineering class built him a prosthetic hand, my immediate reaction, of course, was to be touched, but my bigger reaction was, wait – high school students can now create prosthetics?

If you haven’t been paying attention, the world of prosthetics has been changing in amazing ways, and it’s not done.  

The student, Sergio Peralta, was born with his right hand not fully formed, and for much of his life it was a problem.  As he wrote in his own account in Newsweek: “When I got bullied at my old school, the bullies would always compare me to them and make me feel like I am less of a person because of my right hand.”  His high school engineering teacher noticed his limitations, got permission from his mother to create a prosthetic for him, and assigned three students to the project.

Within a week, they’d used a 3D printer to create a prototype, and over the next couple weeks they’d iterated it to a version Sergio was happy with. “As he was adjusting it, I felt very happy,” Sergio writes.  “It looked cool and robotic, and it was grey and blue. We then tested weather [sic] I was able to grip objects with it…My teacher was so happy that the hand worked. It was exciting for him to see me catch a ball for first time in 15 years.” 

3D printing has been one of the big breakthroughs for prosthetics. The Afghan and Iraq wars unfortunately created a huge demand for them, and the military health services stepped up. Dr. Peter Liacouras, the Director of Services for the 3D Medical Applications Center at Walter Reed, says: “Over the past ten years, we have concentrated on filling the gaps in prosthetics through 3D printing. 3D printing has been highly flexible and applicable for specialty solutions of limited production needs.”  Ukrainian soldiers are now benefiting from this expertise.

Continue reading…

Dear Patient, If You Have to Treat a Cold, Know This:

BY HANS DUVEFELT

Americans hate being sick. There are too many cold medicines out there to remember by name. But there are really only a handful of different drug classes to consider.

In order to choose any one of them, be clear about what you want to accomplish. It’s actually very simple.

1) Make my cold go away faster: Zink, echinacea, visualization/manifesting, sauna, prayer (may be mostly placebo effect ).

2) Stop my nose from running (including post nasal drip): You’ll want the crud to leave your body as soon as possible, so turning off the drain pipe that your nose has become can increase the risk of stagnant mucous in your sinuses becoming secondarily infected. But intermittent use of a decongestant (pills like pseudoephedrine, diphenhydramine or nasal sprays like Afrin) can help you look healthier than you are for an important Zoom meeting.

3) Make my nose run and relieve the pressure in my sinuses: Lots of fluids, room humidifier/vaporizer, shower steam, nasal steroid spray, guaifenesin (Mucinex) or even nasal lavage (Nettipot), but I personally have reservations about that one.

Continue reading…

THCB Gang Episode 115, Thursday February 9

Joining Matthew Holt (@boltyboy) on #THCBGang on Thursday February 9 at 1PM PT 4PM ET were futurist Ian Morrison (@seccurve); medical historian Mike Magee (@drmikemagee); patient safety expert and all around wit Michael Millenson (@mlmillenson); and delivery & platform expert Vince Kuraitis (@VinceKuraitis). There was the usual chat and a lot of conversation about the future of Medicare, Medicare Advantage and the CVS acquisition of Oak Street.

You can see the video below & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

What is Health Care’s LEGO?

BY KIM BELLARD

Last week the esteemed Jane Sarasohn-Kahn celebrated that it was the 65th anniversary of the famous LEGO brick, linking to Jay Ong’s blog article about it (to be more accurate, it was the 65th anniversary of the patent for the LEGO brick). That led me to read Jens Andersen’s excellent history of the company: The LEGO Story: How a Little Toy Sparked the World’s Imagination.  

But I didn’t think about writing about LEGO’s until I read Ben’s Cohen’s Wall Street Journal profile of  University of Oxford economist Bent Flyvbjerg, who studies why projects succeed or fail.  His advice: “That’s the question every project leader should ask: What is the small thing we can assemble in large numbers into a big thing? What’s our Lego?”

So I had to wonder: OK, healthcare – what’s your LEGO?

Professor Flyvbjerg specializes in “megaprojects” — large, complex, and expensive projects.  His new book, co-authored with Dan Gardner, is How Big Things Get Done. Not to spoil the surprise (which would only be a surprise to anyone who hasn’t been part of one), their finding is that such projects usually get done poorly.  Professor Flyvbjerg’s “Iron Rule of Megaprojects” is that they are “over budget, over time, under benefits, over and over again.”

In fact, by his calculations, 99.5% of such projects miss the mark: only 0.5% are delivered on budget, on time, and with the expected benefits.  Only 8.5% are even delivered on budget and on time; 48% are at least delivered on budget, but not on time or with expected benefits.  

As Professor Flyvbjerg says: “You shouldn’t expect that they will go bad. You should expect that quite a large percentage will go disastrously bad.” 

He has two key pieces of advice.  First, take your time in the planning process: “think slow, act fast.”  As Dr. Flyvbjerg and Mr. Gardner wrote in a Harvard Business Review article recently, “When projects are launched without detailed and rigorous plans, issues are left unresolved that will resurface during delivery, causing delays, cost overruns, and breakdowns….Eventually, a project that started at a sprint becomes a long slog through quicksand.” 

Second, and this is where we get to the LEGOs, is to make the project modular; as Mr. Cohen puts it, “Find the Lego that simplifies your work and makes it modular.”

Continue reading…

Elia Stupka, Angelini Ventures

I’ve been friends with Roberto Ascione for many years. Roberto is a keen Napoli fan who on the side runs the Healthware Group and also the Frontiers Health Conference that I’ve been going to for many years (and where Jess DaMassa is co-MC). Recently Healthware acquired the media company pharmaphorum and hired star reporter (and another friend) Jonah Comstock, ex MobiHealthNews and HIMSS Media. THCB will be doing some occasional cross-posting with pharmaphorum starting with this interview of the boss of a new and well heeled Italian health tech VC fund!–Matthew Holt

Elia Stupka, Managing Director at Angelini Ventures, talks to Paul Tunnah, pharmaphorum founder, about his career, life passions and the exciting launch of Angelini Ventures – a €300 million fund paving the way for healthcare transformation across digital health and life sciences

assetto corsa mods