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Deconstructing the slowdown in healthcare costs


Timothy Jost, writing in HealthAffairs about the sixth anniversary of the Affordable Care Act, writes:

A report {by the U.S. Department of Health and Human Services} “does not claim that the ACA was responsible for all of the decrease in spending growth over the past half decade. It recognizes that the slowdown in spending since 2009 has been driven by a number of factors unrelated to the ACA: the slow recovery from the recession, expiring prescription drug patents and a corresponding increase in the use of generic drugs, ongoing shifts in the site of care from inpatient to outpatient settings and to prescription drugs, and a greater emphasis on enrollee cost sharing in private insurance plans. But the report asserts that some credit must be given to the ACA for reductions in Medicare provider payment updates and Medicare Advantage payment rates, purchasing reforms, increase program integrity efforts, state Medicaid cost containment, and shifts in coverage to public programs which have also contributed to slowed expenditure growth.”






CMS plans to raise payments to insurers for MA by average 1.35%


The Centers for Medicare & Medicaid Services proposes raising payments by  an average of 1.35 percent next year to the health insurers who offer Medicare Advantage health benefits.

Payments to insurers will vary under the 2017 Medicare Advantage proposal, based on the regions where the plans are sold and on the size of bonus payments that insurers can receive based on quality ratings.

At least for now, the announcement was taken as good financial news for health insurers.








Study touts Medicare Advantage’s role in moving to value-based care


This Deloitte study says that Medicare Advantage can help engage providers to move more successfully into value-based care by better using technology and data.

One the study’s conclusions:

“Health plan respondents strongly believe that MA  {Medicare Advantage} presents great opportunities for VBC {value-based care} due to high per-member costs, disease burden and defined populations. In fact, health plan leaders expressed during the in-depth interviews that they believe contracting with MA plans is a better way for providers to develop VBC capabilities than starting with CMS. Unfortunately, few health plans are effectively conveying this message to providers. Despite the clinical and demographic similarities between MA and traditional Medicare patients, providers are more cautious about VBC arrangements with MA plans than with CMS. ”

Some senators want to expand telemedicine service via Medicare



The U.S. Senate Chamber.

A bipartisan group of U.S. senators are introducing a bill  to  expand telemedicine service through Medicare benefits.

Modern Healthcare reports that the  Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act (PDF), “would expand the use of remote patient-monitoring for some patients with chronic conditions, increase telemedicine services in community health centers and rural health clinics, and provide basic telemedicine benefits through Medicare Advantage.”

Backers also tout the measure as having the added benefit of helping providers meet the goals of the Medicare Access and CHIP Reauthorization Act and the Merit-based Incentive Payment System.

The CONNECT Act  is supported by  several industry groups, including America’s Health Insurance Plans, the American Heart Association and Kaiser Permanente.

“This bill would ensure that patients and their physicians are able to use new technologies that remove barriers to timely quality care. Importantly, the bill would maintain high standards whether a patient is seeing a physician in an office or via telemedicine,” said Dr. Steven J. Stack, president of the American Medical Association.

CMS clarifies rules for troubled CO-OP sector


The federal government has clarified some regulations that govern the startup  nonprofit insurers called Consumer Operated and Oriented Plans (CO-OPs) created under the Affordable Care Act.

More than half of the original 23 of such plans have shut down as they struggled with financial and enrollment issues.

Among the clarifications, reports FierceHealthPayer:

  • “Federal regulations require two-thirds of CO-OPs’ policies in any given state to be qualified health plans in order to ensure the program ‘retains its focus on providing competitive, high-quality health plan choices to American consumers in the individual and small group markets.’ But the rest can be dental or vision plans, Medicare Advantage plans, large-group policies or Medicaid Managed Care products.”
  • “CO-OPs’ two types of federal loans–start-up loans and solvency loans–are treated differently in terms of repayment. Solvency loans are treated as surplus notes, meaning a CO-OP does not have to repay CMS until a state insurance department determines repayment won’t lead to distress or default. While start-up loans were intended as ‘general obligations to be repaid at a specific time,’ CMS agreed in 2015 to allow CO-OPs to convert these loans into surplus notes on a case-by-case basis to ensure financial flexibility for the CO-OPS.”
  • “CMS will evaluate on a case-by-case basis when a CO-OP’s risk-based capital level falls below 500 percent, determining whether it should be placed on a corrective action plan or if it is considered to be in default. This policy allows CO-OPs to more easily manage changes in their business operations….”
  •  CO-OP board members can’t now represent a pre-existing insurer or  a state government, but CMS is exploring ways “to help diversify board membership without losing the member-run nature of the CO-OP program.”

5 ways to improve the care of the elderly


Chris Wing proposes five ways to improve the care of the elderly. Mr. Wing, CEO of SCAN Health Plan, based in Long Beach, Calif., concludes at the  end of this piece:

“The key is emphasizing primary prevention, early intervention and effective care coordination throughout the spectrum of care. At-risk seniors can be part of geriatric health-management or disease-management programs and can benefit from a medication-management program that focuses on the correct match between diagnosis and drugs. Medicare Advantage helps to ensure the appropriate use of services, improve the coordination of care with different providers, and improve clinical outcomes every step of the way.”


Study cites a Calif. house-call program’s success


A recent study in HealthAffairs says that house calls can help reduce the number of emergency room visits and hospital readmissions.

It looks at  how since 2009 Torrance, Calif.-based HealthCare Partners Affiliates Medical Group has provided its House Calls program to recently discharged high-risk, frail and psychosocially compromised patients.  The idea is to provide and manage care for the group’s Medicare Advantage and commercially insured HMO patients.

The study says that  after being involved with the program for three months, patients were admitted to the hospital less often–and per-month use and spending continued to decrease.

Nurse practitioners  are the key to the program: They develop patients’ care plans while monitoring them and  sending updates to primary-care physicians. Meanwhile, social workers assess patients in their home environments. There, they identify  such potential issues such as fall risks, medication organization, social isolation and financial concerns and provide nutrition coaching.







AHIP head’s challenges

But what does ‘single payer’ really mean?


For Kaiser Health News

Healthcare has emerged as one of the flash points in the Democratic presidential race.

Vermont Sen. Bernie Sanders has been a longtime supporter of a concept he calls “Medicare for All,” a health system that falls under the heading of “single-payer.”

Sanders released more details about his proposal shortly before the Democratic debate in South Carolina Sunday night. “What a Medicare-for-All program does is finally provide in this country health care for every man, woman and child as a right,” he said in Charleston.

Sanders’s main rival for the nomination, former Secretary of State Hillary Clinton, has criticized the plan for raising taxes on the middle class and said it is politically unattainable.  “I don’t want to see us start over again with a contentious debate” about health care, she said Sunday night.

Some of the details of Sanders’s plan are still to be released. But his proposal has renewed questions about what a single-payer health care system is and how it works. Here are some quick answers.

What Is Single-Payer?

Single-payer refers to a system in which one entity (usually the government) pays all the medical bills for a specific population. And usually (though again, not always) that entity sets the prices for medical procedures.

Single-payer is not the same thing as socialized medicine. In a truly socialized medicine system, the government not only pays the bills but owns the health care facilities and employs the professionals who work there.

The Veterans Health Administration (VA) is an example of a socialized health system run by the government. It owns the hospitals and clinics and pays the doctors, nurses and other health providers.

Medicare, on the other hand, is a single-payer system in which the federal government pays the bills for those who qualify, but hospitals and other providers remain private.

Which Countries Have Single-Payer Health Systems?

Fewer than many people think. Most European countries either never had or no longer have single-payer systems. “Most are basically what we call social-insurance systems,” said Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health, who has studied international health systems. Social insurance programs ensure that almost everyone is covered. They are taxpayer-funded but are not necessarily run by the government.

Germany, for example, has 135 “sickness funds,” which are essentially private, nonprofit insurance plans that negotiate prices with healthcare providers. “So you have 135 funds to choose from,” Anderson said.

Nearby, Switzerland and the Netherlands require their residents to have private insurance (just like the Affordable Care Act does), with subsidies to help those who cannot otherwise afford coverage.

And while conservatives in the United States often use Britain’s National Health Service as the poster child for a socialized system, there are many private insurance options available to residents there, too.

Among the countries that have true single-payer systems, Anderson lists only two — Canada and Taiwan.

Are Single-Payer Plans Less Expensive Than Other Health Coverage Systems?

Not necessarily. True, eliminating the profits and duplicative administrative costs associated with hundreds of different private insurance plans would reduce spending, perhaps as much as 10 percent of the nation’s $3 trillion annual health care bill, Anderson said. But, he noted, once that savings is achieved, there won’t be further reductions in following years.

More important, as many analysts have noted, is how much health services cost and how those prices are determined. In most other developed countries, even those with private insurance, writes Princeton Health Economist Uwe Reinhardt, prices “either are set by government or negotiated between associations of insurers and providers of care on a regional, state or national basis.” By contrast, in the U.S., “the payment side of the health care market in the private sector is fragmented, weakening the bargaining power of individual insurers.”

Would Medicare For All Be Just Like The Existing Medicare Program?

No, at least not as Sanders envisions it. Medicare is not nearly as generous as many people think. Between premiums (for doctor and drug coverage), cost-sharing (deductibles and coinsurance) and items Medicare does not cover at all (most dental, hearing and eye care), the average Medicare beneficiary still devotes an estimated 14 percent of all household spending to health care.

Sanders’s plan would be far more generous, including dental, vision, hearing, mental health and long-term care, all without copays or deductibles (which has given rise to a lively debate about how to pay for it and whether middle-class families will save money or pay more).

Would Private Insurance Companies Really Disappear Under Sanders’s Plan?

Probably not. Private insurers are fully integrated into Medicare, handling most of the claims processing and providing supplemental coverage through “Medigap” plans. In addition, nearly a third of Medicare beneficiaries are enrolled in private managed care plans as part of the Medicare Advantage program.

Creating an entirely new federal claims processing structure would in all likelihood be more expensive than continuing to contract with private insurance companies. However, Sanders makes it clear  that insurers in the future would no longer be the risk-bearing entities they are today, but more like regulated utilities.

Humana expected to quit ACA marketplaces


The Affordable Care Act has apparently been inhumane to Humana.

In the words of Bloomberg News: The huge insurer “probably won’t collect enough money to cover costs for some customers who bought individual plans {in an ACA exchange}, and will set aside what’s known as a premium deficiency reserve. The shortfall is for 2016 plans that comply with new rules under the Affordable Care Act.”

Ana Gupte, an analyst with Leerink Partners,  told clients that “We expect Humana will exit health insurance exchange marketplaces in 2017 in light of this data and focus on its Medicare Advantage book of business.”

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