June 11, 2018

The Cost of Health Care: a Renewed National Focus

The high cost of pharmaceuticals may be the current national focus, but make no mistake, the overall high cost of health care in the United States is being targeted by the Trump Administration and Congress.  No one really argues against the fact that pharma costs are through the roof – both name brand and generic.  But hospital and physician costs are also under serious discussion within HHS, CMS and Congress, especially in light of the new Medicare trustees report.  And let’s not forget about the high cost of insurance.

  • HHS’ Office of the Inspector General found a 62% spike in federal spending in Medicare Part D — even after accounting for rebates and discounts, and even though the total number of prescriptions declined over the same time period.  Click here for the report.
  • The premium for an average “benchmark” plan is 34% higher this year than in 2017, according to the Congressional Budget Office. CBO expects premiums for the same set of plans to go up another 15% for 2019, then to level out at about 7% per year after that. Click here for the CBO report.
  • Medicare’s primary fund is expected to be depleted by 2026, three years earlier than health care officials expected last year, per the 2018 report from Medicare’s trustees.  Click here for the report.

As consumers are forced to pay more out-of-pocket, politicians will look for ways to bring down those costs.  Already states are acting to curb “surprise” ED bills (click here.)  And, click here for the new data on how much more covered employees are paying for their health care today.  Democrats are talking publicly about single payer or Medicare for all – perhaps looking at the Maryland total-cost-of-care model (click here for the latest) as part of the solution.  Some are suggesting that single-payer would not be a big negative financial hit to physicians.  Click here. While Republicans are backing away from Obama-era solutions driven by CMS/CMMI and talking about more private-public sector answers.  And some in the Administration are still pushing Obamacare repeal, including actions that challenge pre-existing conditions protections.  Click here.

Hospital-Acquired Conditions Decline 8%, 8,000 Lives Saved and $2.9 Billion in Costs 

According to new data released last week by the Agency for Healthcare Research and Quality, patient safety is improving due, in part, to efforts to reduce hospital acquired conditions. The Agency has estimated that 350,000 hospital-acquired conditions were avoided and the rate was reduced by 8 percent from 2014 to 2016 leading to the prevention of approximately 8,000 deaths and saving about $2.9 billion. CMS has set a goal of saving 20 percent reduction by 2019. Click here for more from AHRQ. Click here for the CMS fact sheet.

Anthem Imaging Policy Expected To Cost Hospitals

Under at new policy implemented by Anthem Blue Cross Blue Shield, the insurer will only pay for outpatient MRIs and CT scans when their members get them at freestanding imaging centers. The health insurer rolled out the policy in nine states in 2017 and four more states this year, according to a new report. There are several exceptions to the new policy, which is aimed at pushing patients to receive MRIs and CT scans at less costly outpatient centers. For example, the policy doesn’t apply to patients under 10 years old or when imaging is preoperative and the surgery is occurring in the hospital. Rural areas that don’t have freestanding imaging centers are exempt from the new policy. Since imaging services are among the most profitable services hospitals perform, the new policy is likely to hit hospitals’ bottom lines. Click here for a Bloomberg report.  Click here for a cost comparison chart.


House Set to Vote on Numerous Opioid Bills This Week

The full House is scheduled to vote this week on opioid legislation. Bills previously voted on by the House Energy and Commerce, Ways and Means, and Education and Workforce Committees, among others, include policies that will attempt to tackle the importation of synthetic drugs, offer more services to children and families, giving resources and materials to emergency rooms, as well as creating grant programs for communities and increasing services through Medicare and Medicaid programs. For the full list of bills to be debated and voted on this week, click here.

  • The Organization for Economic Co-operation and Development releases report that urges the U.S. to ease barriers to drug abuse treatment in order address depressed workforce participation and billions of dollars in added costs stemming from the opioid epidemic, click here.
  • There are a growing number of patients treated with virtual-reality distraction for pain in a hospital setting. Cedars-Sinai has used the technology on more than 2,500 patients since 2016, more than any other hospital in the world. Click here for the story.

Senate Committee Plans on Third 340B Hearing

The Senate Health Committee announced that on June 19th it will hold its third hearing on the 340B drug discount program entitled, “Effective Administration of the 340B Drug Pricing Program.” There will be one witness, Capt. Krista M. Pedley, PharmD, MS, the Director of HRSA’s Office of Pharmacy Affairs. Previous hearings in front of the Committee included hospital and pharmaceutical manufacturer representatives as well as HHS Office of Inspector General and the Governmental Accountability Office. Click here for the hearing web page.

  • MACPAC put out an informative brief on the interaction between the 340B program and Medicaid, click here.

HHS Secretary Defends Plans for Opioid Crisis and Pushes Rx Price Reduction Plans

HHS Secretary Alex Azar last week defended the plans and priorities of his department, during a hearing before a House committee. Members from both parties were particularly concerned about the Administration’s approach to the opioid addiction crisis. Sec. Azar pointed out that HHS requested additional funding in the President’s 2018 budget, specifically for treatment block grants and a public-private research initiative to find non-addictive treatments for pain. The Secretary also touted the President’s plan to bring down the cost of pharmaceuticals. Click here to view the hearing and read the Secretary’s written testimony.

U.S. Suicide Rates Surge: CDC

According to the CDC’s latest Morbidity and Mortality Weekly Report, U.S. suicide rates have grown in nearly every state over a 17-year period ending in 2016, with mental health problems contributing to just over half of those deaths. Researchers studied the rates between 1999 and 2016 and found that every state but Nevada reported an increase over that time period, with about a quarter of states experiencing a 30 percent spike in suicide deaths. Additionally, the study found that suicides increased among every age group but were highest among middle-aged people. To read the study, click here.

HHS, CMS Urge Post-Acute Care Providers To Get Ready for Change

In a speech to American Health Care Association/National Center for Assisted Living last week, HHS Secretary Alex Azar encouraged post-acute care providers to buy into the administration’s vision for value-based care, saying the increasing number of aging Americans compels them to do so. Azar reiterated his four areas of focus to create a value-based care system: maximizing the use of health information technology; improving price and quality transparency; launching new models in Medicare and Medicaid; and removing government burdens for care coordination. Click herefor the speech.

  • The same day, CMS Administrator Seema Verma pushed for a unified post-acute payment system by tweeting, “Another example in @POTUS’ FY19 Budget – Address excessive payments for patients for post-acute care providers by creating a unified payment system based on patients’ clinical needs not site of care: $80.2B in savings over 10 years #StrengtheningMedicare.”

CBO Report Predicts High Medicare, Medicaid Growth Rates

According to a new Congressional Budget Office report, if current laws remain as they stand, government spending on “means-tested” mandatory programs like Medicaid and food stamps will rise 4 percent annually over the next decade. Additionally, spending on “non-means-tested” programs, like Medicare, Social Security and federal retirement plans, is expected to grow at a rate of 6 percent annually over a decade. Overall, mandatory spending will increase by 5.8 percent over the next decade, or from $2.8 trillion in 2018 to $4.9 trillion in 2028. To view the report, click here.

  • CMS rolled out a new scorecard for Medicaid and CHIP programs last week that ranks the state programs on a range of quality measures to show performance, click here for the fact sheet, and here for the scorecard.
  • CMS Administrator Seema Verma described in a new blog post, “A New Era of Accountability and Transparency in Medicaid,” click here.  Click here for the Washington Post report.

House Members Raise Emergency Preparedness Concerns, Push Legislation

Government officials are expressing concern about the growing threat of antibiotic resistance. During a congressional hearing, members of both parties questioned the government’s ability to handle antibiotic resistance and implored government agencies to consider new and alternative therapies. Lawmakers also reviewed the plan to transfer oversight of the Strategic National Stockpile of medical supplies from the CDC to another office within HHS. Click here for the draft bill and here to view the hearing and read written testimony.

GAO: Veterans’ Wait Times Grow

The Government Accountability Office released an investigation that found veterans often had to wait between 51 and 64 days for appointments with private physicians under the Veterans Affairs’ Choice program, which is being expanded by the Trump administration. The VA had promised to provide care within 30 days under the program. Click here for the report.

Law Allows Medicare Plans To Pay for New Senior Services

The Chronic Care Act, signed into law earlier this year, allows Medicare Advantage plans to pay for non-medical services like installation of raised toilet seats and bathroom grab bars or provision of hearing aids, scooters or personal care services beginning in 2020. Coverage of these services are predicted to reduce emergency department use and readmissions. However, according to the study, insurance companies may decline to offer the expanded coverage to stop severely ill seniors who need costly care from joining their plans. To read the study, click here.

Increasing number of Nurse Practitioners in Primary Care Practices
A new study finds that primary care practices are increasingly relying on Nurse Practitioners to provide for their patients. The trend is most significant for practices in rural areas, where their presence has increased from 17.6 percent to 25.2 percent from 2008 to 2016. NPs now account for 1 in 4 medical care providers in rural practices. In non-rural practices, the presence of NPs rose from 15.9 percent in 2008 to 23 percent in 2016. The highest NP presence could be found in states with full scope-of-practice laws, whereas the fastest growing NP presence could be found in states “with reduced and restricted scopes of practice.” Click here for the paper in Health Affairs.

  • How about CRNAs?  A new analysis shows the average annual wage for certified registered nurse anesthetists with the U.S. average at $169,450.  Click here.

Clinicians Want Medicare Advantage to Count as Quality Measure

In a Letter to CMMI director Adam Boehler, Premier, AHIP, America’s Physician Groups and other health care associations are urging the creation of a demonstration project that would give clinicians credit for participating in risk-bearing Medicare Advantage plans. Under Medicare’s physician payment law, physicians can qualify for bonuses for participating in Advanced Alternative Payment Models through traditional Medicare, but currently Medicare Advantage in not an option. Click here for the letter.

  • At an ACO summit last week, Joe Grogan, Associate Director of Health Programs at the White House Office of Management and Budget, cited a study stating “ACOs need to accept risk sooner rather than later, provided the metrics and benchmarks are transparent and simple and those metrics hold ACOs accountable.” Click here for the study.
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