Many States to See Significant Insurance Competition, White House Says

The major health policy news last week continues to be focused on the state health insurance exchanges (or “Marketplaces” as the Obama Administration calls them) with the White House announcement that there will be, and already is, serious price competition on the burgeoning exchanges. Click here for the informative White House memo that says more than 120 insurers have applied to participate in federal exchanges. The NY Times also had a summary of the insurance concentration issue. Click here. California may be the best news for the Obama Administration, with its announcement of more than a dozen insurers offering more than 100 products at lower than expected prices for consumers. Click here to see the official Covered California announcement.


Some Analysts Skeptical About Exchange Claims

“Not so fast” say conservative critics, click here to read the conservative angle on the story that says there is “rate shock.” And in those states where there isn’t much competition today, it may still be the same under state exchanges. Click here for a very good review of that issue in the Washington Post.


Medicare Funds Good for Two More Years

A little more good news for the Obama Administration on Friday. The financial outlook for Medicare has improved because of a stronger economy and slower growth in health spending, according to the Treasury Secretary’s annual report on Medicare and Social Security. As recently as 2011, the trustees cut the projected life of the trust fund by five years, but the growth in Medicare spending has slowed significantly. It’s averaged 1.9% from 2010 to 2012, well below the 3.2% growth in the overall economy over the same period. Total Medicare spending was 3.6% of GDP in 2012. But it’s projected to spike again without policy changes, to 5.6% of GDP in 2035 and 6.5% by 2087. Click here for the 280-page report. Click here for the NY Times summary.


Medicare Funding Status Won’t Trigger IPAB Action

Based on the new Medicare Trustees report, CMS’ Chief Actuary has concluded that the growth of Medicare spending will remain below the threshold that would trigger action from the Independent Payment Advisory Board through at least 2015. Click here for the two page letter from the Acting Actuary. Of course, the IPAB doesn’t have any commissioners yet and there is legislation to repeal the IPAB altogether, which is unlikely to become law with Obama in the White House.


CMMI’s Gilfillan to Depart

Rick Gilfillan, the Director of the Center for Medicare and Medicaid Innovation (CMMI) since 2010, will leave the agency at the end of June, according to a memo from HHS released Friday. According to HHS, Patrick Conway will assume responsibility as the Acting CMMI Director. He will also continue to serve as the CMS Chief Medical Officer and Director of the Center for Clinical Standards and Quality. It was not announced where Gilfillan will go after leaving CMMI.


MedPAC Gets New Commissioner, From Minnesota

The Medicare Payment Advisory Commission (MedPAC) has a new member: Jon B. Christianson, PhD, Professor in the Division of Health Policy and Management at the School of Public Health at the University of Minnesota in Minneapolis. His term will expire in April 2016. Five others were reappointed. Click here for the GAO announcement.


Acquired Hospitals Improve Financial Performance: Study

According to a new Deloitte analysis of hospital performance, up to three years after being acquired in 2007 or 2008:

  1. The financial and operational performance for recently acquired hospitals improved post-deal more than non-acquired peers during same time period. However, most acquired hospitals’ performance stayed below their peers’, and
  2. National chains appear to be more successful at achieving financial value from acquisitions compared to local/regional chains. The quantifiable value from local/regional deals varies widely; data suggest lower performers acquired in market demonstrate improved performance but remain lower performers compared to peer groups.

Click here for the interesting 26-page report.


SNF Report Rings Financial Alarms

The nursing home industry was out last week with a new report that details on SNF profit margins are under pressure and are declining. The analysis said the median net income margin was nearly cut in half between 2010 and 2012 to 0.99% and one third of operators in this sample had a zero margin or net loss; while interest rates are back to levels seen before the 2008 financial crisis, SNF sector capital is expensive and is generally limited to certain types of debt financing; and the debt market has priced significantly higher risk into SNF bonds due to government payment risk, raising borrowing costs.  Click here for the 13-page report from the Alliance for Quality Nursing Home Care.


Healthiest States for Seniors Identified

Minnesota, Vermont, New Hampshire, Massachusetts and Iowa, in that order, are the healthiest states for seniors, according to a new report from the United Health Foundation out last week. Mississippi is ranked 50th as the least healthy state for older adults. Oklahoma, Louisiana, West Virginia, and Arkansas complete the bottom five states. Click here for the complete report.


340B under Attack by Amgen, Association Says

Safety Net Hospitals for Pharmaceutical Access has asked biotech company Amgen to withdraw a new policy that would raise pharmaceutical costs significantly for more than 1,000 hospitals and clinics nationwide that serve large numbers of poor, uninsured, and underinsured patients. The policy, which is due to take effect in days, would require all purchases of the company’s drug Neulasta made through the federal 340B drug discount program to be handled exclusively through specialty distribution channels. The restriction applies to 340B purchases only. If the company declines, the association will ask the federal government to investigate this issue. Click here for more details. Click here for the three page letter sent to Amgen.


Hospital Readmit Rates Showing Improvement

A new analysis from CMS shows progress on reducing hospital readmission rates. CMS found all cause, 30 day readmissions for Medicare patients dropped to 18.4% in 2012 from 19% during the previous five years. That means hospitals saw about 70,000 fewer readmissions during last year. Click here for the 12 page CMS analysis.


OIG Recommends Paying Hospitals Less When Patients Go Early to Hospice

Medicare could save hundreds of millions of dollars per year if it did not pay hospitals for a full stay when terminally ill patients are discharged early to go into hospice care, according to an OIG report released last week. Medicare could have saved $602.5 million in 2009 and 2010 by changing its payment policies. The report recommended that CMS either revise its regulations or recommend a legislative fix to Congress. Click here for the 21 page OIG report.


20% of Adults Used ED in 2011

One in five U.S. adults went to the emergency department at least once during 2011, according to an annual report from the CDC. That same year, 7% said they went two more times, according to the government’s annual comprehensive compilation of health data from state and federal health agencies and the private sector. Click here for the 505 page report, which is chock full of health stats and is an excellent reference.


$138 Billion Spent on Health Services for Women in 2009

More than $138 billion was spent on health services for women ages 18 to 39 in 2009. Pregnancy and normal childbirth, mental disorders, asthma and chronic obstructive pulmonary disease, and bronchitis and upper respiratory infections accounted for one-third ($47 billion) of the spending. Click here for the AHRQ brief.


Study Shows How MRSA Can Be Reduced 

A new study on antibiotic resistant bacteria in hospitals shows that using germ-killing soap and ointment on all intensive care unit patients can reduce bloodstream infections by up to 44% and significantly reduce the presence of methicillin-resistant Staphylococcus aureus (MRSA). Patients who have MRSA present on their bodies are at increased risk of developing a MRSA infection and can spread the germ to other patients. Click here for the New England Journal of Medicine study.


Immigrant Workers Bolstering Medicare Finances

As Congress debates immigration reform, a new study out last week sheds new light on a key issue: immigrant workers are bolstering Medicare’s finances by contributing billions more than immigrant retirees actually use in medical services. Researchers reported in Health Affairs said policies “that reduce immigration would almost certainly weaken Medicare’s financial health, while an increasing flow of immigrants might bolster its sustainability.” Click here for the complete study.


Federal Wellness Regs Finalized

Federal agencies issued a final rule, effective Jan. 1, 2014, outlining requirements for wellness programs and incentives under the Affordable Care Act. Some business groups criticized the regulations as too burdensome for employers. The regulations, aimed at making sure wellness programs do not discriminate, say employees can qualify for rewards or lower health insurance premiums if they participate in wellness activities, even if they do not improve their health. Click here for the rules and a summary.


FDA OKs Importation of Injectables Used in Parenteral Nutrition

The FDA announced that it has approved the importation of injectable drugs used in total parenteral nutrition and that they were made available to patients last week. Some drugs used in intravenous food have been in critical shortage, affecting premature babies who cannot eat or drink by mouth as well as cancer patients and others who have had gastrointestinal surgeries.  Illinois-based Fresenius Kabi, LLC will be allowed to import phosphate injection and trace elements used in the food from its Norway plant. Click here for the announcement.


Final SHOP Regs Issued by HHS

HHS late last week issued a final rule to implement its decision to delay “employee choice” in federal-run SHOP exchanges until 2015. In 2014, employers purchasing coverage through federal SHOP exchanges can only offer one health plan to employees, similar to how the market works today. The employee choice model was seen as one of the main advantages of the SHOP program, but HHS said the federal exchanges will still offer value to small employers next year. Click here for the 29-page final rule.

June 28 Deadline for Letters of Intent for Innovation Center Funding

HHS last week announced a nearly $1 billion initiative that will fund awards and evaluations to build on the Obama administration’s work to transform the health care system by delivering better care and lowering costs. HHS estimates that 100 awards will be granted ranging from $1 million to $30 million. Strategic Health Care and Innovation Funding Partners are working together to help interested organizations apply, with seasoned grant writers providing an array of services. Click here for funding details. If you have an interest in learning more about our services, email me at Paul.Lee@shcare.net and we will schedule a call to discuss.


Doctor’s Studies Raise Concerns With Diabetes Drug

The chief of the division of endocrinology at the University of California, Los Angeles, has produced studies that have caused the FDA to begin investigations into the diabetes drug Januvia that could result in new warnings or even their removal from the market, according to published reports. Click here.