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Investors in healthcare stocks unfazed by ACA drama


Despite Republican threats to destroy the Affordable Care Act, healthcare stocks  are generally doing very well and people in the sector generally don’t expect the GOP to make major changes in what turns out to be a remarkably sturdy ACA.

Bloomberg News reports:

“Healthcare companies in the Standard & Poor’s 500 Index have rallied 16 percent this year, beating the overall market’s 11 percent gain. Insurers, the companies tied most closely to the Affordable Care Act, are up even more at 22 percent.

“Wall Street’s apparent indifference to the possibility that Republicans will succeed in repealing the ACA shows how the for-profit health industry has largely separated itself from the law’s fate. ”

“’It’s really steady as she goes,’ said Les Funtleyder, a health investor at E Squared Capital Management. ‘Most of the stocks are basically calling the Congress’s bluff, in that really nothing material is going to happen.’’’

“Republicans appear to be scaling back their ambitions. One possible path forward is a ‘skinny repeal,’ ending just a handful of the law’s most controversial features. GOP senators would likely push to halt requirements for all people to have health insurance and for companies to provide health coverage for full-time workers. A repeal of the tax on medical devices might also be included. But the insurance subsidies and Medicaid expansion would remain.”

To read more, please hit this link.


Mass. sets up Digital Healthcare Council

Massachusetts Gov. Charlie Baker has established the Digital Healthcare Council to guide policy about the  burgeoning digital healthcare industry in the state, which is an internationally renown technology center.

The advisory council, which stems from  the Massachusetts Digital Health Initiative, launched last January, will bring together leaders from academia, government, healthcare delivery, insurance, life sciences, medical devices  to discuss how digital technology can improve healthcare, increase the number of high-paying jobs in the state and reduce  healthcare costs.

“For Massachusetts to become a national leader in digital health, we need to continue to build on the momentum our Digital Health Initiative has already produced,” said Governor Baker. “This council will collaborate to move past barriers in the healthcare industry and solve significant challenges to make advances in patient care, lower healthcare costs and address public health crises, like the opioid epidemic.”


How congressional Republicans, Trump could move swiftly to change health laws



For Kaiser Health News

Throughout the campaign, President-Elect Donald Trump’s entire health message consisted of promising to repeal the Affordable Care Act.

That remains difficult with Democrats still commanding enough power in the Senate to block the 60 votes needed for a full repeal. Republicans could use fast-track budget authority to make some major changes to the law, although that could take some time. In the short term, however, Trump could use executive power to make some major changes on his own.

Beyond the health law, Trump also could push for some Republican perennials, such as giving states block grants to handle Medicaid, allowing insurers to sell across state lines and establishing a federal high-risk insurance pool for people who are ill and unable to get private insurance.

But those options, too, would likely meet Democratic resistance, and it’s unclear where health will land on what could be a jam-packed White House agenda.

Still, there are several health issues that the next Congress and the new administration will be required to address in 2017, if only because some key laws are set to expire.

And those could provide a vehicle for other sorts of health changes that might not be able to clear political or procedural hurdles on their own.

Here are some of the major health issues that are certain to come up in 2017: 

The Affordable Care Act

If the GOP could not repeal the law and Trump were to turn to Congress to address some of the issues associated with it, it’s not clear if the executive and legislative branches could work together to respond to rising insurance premiumsdeclining insurance company participation or other unintended impacts of the health law. Nonetheless, some aspects of the law are unavoidable next year. For example, Congress in 2015 temporarily suspended or delayed three controversial taxes that were created to help pay for the law.

One of those taxes, a fee levied on health insurers, is suspended for 2017, while a 2.3 percent tax on medical devices was suspended for 2016 and 2017. Both industries lobbied heavily for the changes — arguing that the taxes boosted the prices of their products — and would like to permanently kill the taxes.

Also on hold is the most controversial health law tax of all, the so-called “Cadillac Tax” that levies a 40 percent penalty on very generous health insurance plans. The idea is to prevent consumers who pay little out of pocket because of their coverage from overusing health care services and driving up overall health costs.

The tax was technically put off from 2018 to 2020, but experts say pressure will begin to mount next year for reconsideration because employers will need a long lead time if they are to change benefits to avoid paying it. While economists are virtually unanimous in their support for the tax on high-end health plans, business and labor both strongly oppose it.

Children’s Health Insurance Program

The Children’s Health Insurance Program, a federal-state partnership that Hillary Clinton helped set up in negotiations with Congress during her husband’s administration, is up again for renewal in 2017. CHIP covers more than 8 million children from low- and moderate-income households and has made a huge dent in the number of uninsured children. According to the Census Bureau, nearly 95 percent of children had insurance coverage in 2015.

When the federal health law passed in 2010, many policymakers thought that CHIP would quietly go away because most of the families whose children are eligible for the program became eligible for tax credits to help them purchase plans for the entire family in the health law’s marketplaces. But it turned out that CHIP in most states remained more popular because it provided better benefits at lower costs than did plans through the ACA.

In 2015, Congress compromised between those arguing to extend CHIP and those who wanted to end it, by renewing it for only two years. That ends Oct. 1, 2017. In practice, if Congress wants to extend CHIP, it needs to act early in 2017 because many states have fiscal years that begin in July and need lead time to plan their budgets.

Prescription Drug And Medical Device User Fees

Also expiring in 2017 is the authority for the Food and Drug Administration to collect “user fees” from makers of prescription drugs and medical devices.

The Prescription Drug User Fee Act, known as PDUFA (pronounced pah-doof-uh), was originally passed in 1990 in an effort to speed the review of new drug applications by enabling the agency to use the extra money to hire more personnel. The user fees were later expanded to speed the review of medical devices (2002), generic copies of brand-name drugs (2012) and generic biologic medicines (2012).

PDUFA gets reviewed and renewed every five years, and its “must-pass” status makes it a magnet for other changes to drug policy. For example, in 2012 the renewal also created a program aimed at addressing critical shortages of some prescription drugs. Earlier renewals also included separate programs that gave pharmaceutical firms incentives to study the effect of drugs in children.

Some policy-watchers think this year the bill could serve as a vehicle for provisions to help bring down drug prices, although it is not clear how well many of the ideas currently being floated would work.

“I think [Congress] will talk a lot about it and do very little,” said Robert Reischauer of the Urban Institute, who called the drug price issue “incredibly complex.”

Medicare’s Independent Payment Advisory Board

One more issue that might come up is a controversial cost-saving provision of the federal health law called the Independent Payment Advisory Board, or IPAB. The board is supposed to make recommendations for reducing Medicare spending if the program’s costs rise significantly faster than overall inflation. Congress can override those recommendations, but only with a two-thirds vote in each of the House and Senate.

So far the trigger hasn’t been reached. That’s lucky because the board has turned out to be so unpopular with both Democratic and Republican lawmakers, who say it will lead to rationing, that no one has even been appointed to serve.

The lack of an actual board, however, does not mean that nothing will happen if the requirement for Medicare savings is triggered. In that case, the responsibility for recommending savings will fall to the secretary of Health and Human Services. Medicare’s trustees predicted in their 2016 report that the targets will be exceeded for the first time in 2017.

That would likely touch off a furious round of legislating that could, in turn, lead to other Medicare changes.

HHS confab looks at HIPAA and cybersecurity


Beast, a Windows-based backdoor Trojan horse.

Maria Hirsch of FierceHealthcare was at last week’s annual meeting on HIPAA and cybersecurity co-hosted by the Health and Human Services Department’s Office for Civil Rights (OCR) and the National Institute of Standards and Technology (NIST).

Among her observations:

“{A} session on ransomware provided great insight from government experts who discussed the increasing sophistication of this type of malware and what to do to fend off such attacks. They recommended, among other things, that employees be trained to be suspicious of all emails, that providers have responsible backup plans for their data, that they limit access, that they use up-to-date antivirus software and that they prepare for the possibility of attack.”

“Panelists addressed the increased use of connected devices, the unique difficulties of protecting medical devices and the importance of knowing what devices are connected to one’s network.”

An update …brought attendees up to speed regarding the HIPAA audits, which are underway. The government’s line was that the audits are designed to be educational, to identify best practices and get in front of HIPAA problems before they result in breaches.

To read more about the conference, please hit this link.

GOP launches healthcare offensive


Republican lawmakers eager to repeal the Affordable Care Act are pushing tax credits and much greater freedom for states and health insurers  to make healthcare-finance policy as the GOP  starts to present its plan  to replace the ACA.

The Republican program, which President Obama is expected to veto, would end ACA coverage requirements for individuals and employers,  end expansion of Medicaid, kill  state and federal insurance marketplaces and, indeed, end virtually everything else under the ACA,  including taxes ”it imposes on medical devices and other things to finance enlarged coverage,” the Associated Press reported.

On Medicaid, the GOP plan would give states much more freedom in how to spend money in that federal-state pr0gram — even as more conservative states now seek the ACA’s added Medicaid money.

Given President Obama’s veto pen, we suspect that most of the Republican offensive is primarily rhetorical, leading up to the 2016 presidential election.  And because the  ACA has already developed powerful constituencies of beneficiaries, it’s far from clear how the GOP program will play politically in 2016, especially given that voter turnout is always higher in presidential-election years than in others.


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