DCMedical News: Tuesday, February 6, 2018
DCMedical News
Washington, D.C.
Tuesday, February 6, 2018
To our new readers: This is an independent newsletter, published every day that one or another House of Congress is in session. We are happy to offer this two week trial, without obligation. Subscription information will be found at the bottom of these pages.
THE BIG STORY TODAY IN HEALTH CARE
Significant Health Legislation and Funding in House Version of Continuing Resolution Feb 8 - March 23
Health field hitchhikers on this Continuing Resolution (#5), intended to provide for continued government funding and operations until March 23, include resolution for these important health issues, as described in a House document found here:
A two-year extension of funding for community health centers (FQHCs) through the Community Health Center Fund (see story below concerning Rep. Elise Stefanik’s letter); permanent repeal of a Medicare payment cap for therapy services, together with removal of a rental cap for durable medical equipment under Medicare for speech generating devices, and permanent extension of Special Needs Plans in Medicare Advantage; two year extension of the GPCI (Geographic Practice Cost Index) which supports a component of physician fees in low cost labor areas; and extension of the Medicare-Dependent Hospital and Low Volume Hospital programs.
Also, of great import to safety net hospitals, elimination of a $5 billion reduction in Disproportionate Share Hospital payments under Medicaid. The reductions were called for in PPACA (the “Affordable Care” Act) on the theory that extension of Medicaid and individually subsidized health insurance would eliminate the problem of bad debt for hospitals.
HOSPITALS AND HEALTH CARE FACILITIES
New York House of Representatives Member Elise Stefanik has rallied more than 150 of her colleagues to present the case for attaching Community Health Center funding to “CR#5.” She writes, “Community health centers . . . serve more than 27 million individuals in almost 10,000 urban and rural communities . . . They also serve our nation's veterans, providing care to over 330,000 veterans last year alone.” Addressing the importance of the CHC Fund, she writes “The CHCF accounts for 70 percent of community health centers' federal grant funding and the lapse in reauthorization has led community health centers across the country to consider or begin taking steps to reduce their services . . .(HHS) has estimated that without reauthorized funding, approximately 2,800 health center sites would close, costing more than 50,000 jobs and endangering the health care of about 9 million patients.” The letter is here.
HEALTH INSURANCE, MEDICARE, MEDICAID, COMMERCIAL
The tapeworm in the American body politic: Warren Buffett’s characterization of the cost of health care and its impact on American business. What is it they have in mind? The Wall Street Journal (“Welcome to the Health Care Jungle,” 2-1) urged them to “go big,” not just tech toys for the employees.
Here is your reference library for the future. Some sample business section articles will be found here, here, here and here. The New York Times calls the alliance “a sign of just how frustrated American businesses are with the state of the nation’s health care system and the rapidly spiraling cost of medical treatment.” (NYT, 1-30). The Financial Times gave a nod to the international aspect, namely the effect on the competitiveness of American industry. Rana Foroohar writes (FT, February 5) “Last March, I wrote a column arguing that US employers should be the first in line to argue for healthcare reform. Unlike their peers in the rest of the developed world, American companies are liable for covering healthcare insurance costs for two-thirds of the country’s population. Even if the country’s healthcare spending wasn’t double most of the rest of the rich world’s, with far worse outcomes, this would still be a competitive disadvantage in a global marketplace in which rivals don’t have to shoulder that burden.” She adds that rising prices mean that health benefits make up about 20% of worker compensation in the US, up from 7 percent in the 1950s, a big contributor to “wage stagnation.” So much for a statement of the challenge.
Foroohar asks, “Which part of the Gordian knot of US healthcare will they be able to unravel, what difference will it make and to whom?” Other business groups have certainly tried. There was Walmart, and also Caterpillar. Leapfrog, originally a creation of the Business Roundtable, has ended up in the scorecard and grading business, a la J.D. Powers. The “Healthcare Transformation Alliance” of 46 companies has put their oar in, but without markets more or less commensurate in size and scope with their activities (and employees and hospitals and doctors) seems unable to focus on achievable goals.
The problem comes when you get specific, in other words. Digitizing healthcare? Some would say electronic medical records is an encyclopedia of mistakes, $35 billion in federal aid gone and nobody lost their job. Others feel that there is “low hanging fruit” in episode, bundle and other aggregation of cost items. Regrettably, there are no examples of actual accomplishment—that is, as measured by the impact of the episode, bundle or aggregate on the patient’s all-in expenses, and outcome.
And why are they in this? The combined 1.2 million employees is really not a national base. There are about as many covered lives in shared ministry health cooperatives. Mr. Buffett’s strength, something of a moral compass for business, may play a role. Mr. Dimon illustrated one peril of a disrupting venture, spending the weekend calming the waters of big health players who use his bank for underwriting (“JPMorgan to Banking Clients: Joint Health-Care Venture Is No Threat,” Wall St. Journal, 2-4), claiming that the venture is “akin to a group-purchasing organization.” Two leaders of the effort are Dimon’s board member, Todd Combs, and his managing director, Marvell Berchtold, formerly Novartis’ mergers and acquisition head, both unlikely nominees for a non-profit. Most commentary, however, has focused on Amazon, the disrupter.
Amazon appears among these three to have been making preparations. Amazon bought a large part of drugstore.com in 1999. Many business publications are commenting on Amazon and the pharmacy benefits business: one outstanding series is in “Stat,” the Boston Globe initiative. That series of reports included “Would Amazon really succeed as a pharmacy benefit manager?” from May 18, 2017; “Hey, Amazon: As a pharmacy benefit manager, you could create real competition for drug prices,” from November 15, 2017; and “How bad is Amazon’s bite? These pharma and health care companies are about to find out,” from February 5, 2018.
The larger picture—beyond tech and pharmacy—is also a field for comment. The best summary—an outstanding effort in this area—was made by Becker’s Hospital Review’s Julie Spitzer. Ms. Spitzer (“Here are all of Amazon’s moves that led up to the JPMorgan Chase-Berkshire Hathaway deal,” 1-31) summarized nearly three dozen health field initiatives, hirings, associations, investments and talks by Amazon representatives during the last two years.
Amazon’s strength in consumer and retail suggest how they might be thinking of “going big.” Association Health Plan, the Short Term Plan, the State-Run (e.g. Idaho) plan, would all present opportunities for Amazon.
(AHP and ST plan background can be found here and here. See also DCMN of 1-8 and 1-10 for background on the new definition of “employer” and the impact on Association Health Plans and Short Term, Limited Duration health insurance plans. Past issues of DCMedical News may be accessed as follows: at the top of this e-mail, click on “View this email in your browser,” then click on “Past Issues.”) Of course, the AHP rules could be an invitation for stripping away coverage (maternity, mental health).
The new benefit rules could present opportunity to disrupt pricing. The average physician’s office nets $.50 cents on the insurance dollar. Direct contracting between the new venture and doctors (see PayPal) could knock out one-quarter of the doctor’s expense, without compromise to the patient. Monopoly pricing by larger health systems is a big source of unnecessary cost: “reference pricing” is the fix, a “Dutch auction” for the sale of hospital care. Pharmacy benefit managers—an entirely contrived business--would be a target, as would be every other rent-seeker.
The last big revolution in the structure of American health benefits, ERISA in 1974, freed large employer benefits plans from the dictates of what were then increasingly expensive state mandates. AHPs may be the new tool for restructuring benefits, for smaller businesses.
Here is the question of the hour in the health business: Are these smart people going to the trouble of tackling the “jungle” only so that they might offer drug discounts and more tech toys to their own employees? The Department of Labor has identified 44 million people who might be eligible to participate in AHPs. That’s a market for Amazon.
EVENTS & MEETINGS
Your February & March Calendar:
February 6
8:30 a.m., Continuation of Academy Health National Health Policy Conference at the Marriott Marquis, Washington, D.C. See web site (https://academyhealth.confex.com). Cost to attend $1,315.
3:00 p.m., Full Ways and Means Committee in the House, hearing on the Opioid Crisis and “barriers” in the Medicare program to prevention and treatment of opioid abuse and dependence.
February 13
12:30 to 5:00, the ONC and the ASPE present a webinar on “Blockchain in Healthcare,” agenda and registration page here.
February 15
12:00 p.m., BPCI Advanced Open Forum, https://engage.vevent.com/rt/cms2/index.jsp?seid=829, your chance to ask questions about the new Bundled Payment program from CMS (see DCMN for 1-24). Transcript of the first open forum news conference is found here.
February 21
11:00 a.m., “What’s New With Physician Compare,” a 90-minute webinar on the Physician Quality Reporting System (PQRS) and non-PQRS 2016 measures. You can “learn about star ratings and what Quality Payment Program information is in the pipeline for potential inclusion on Physician Compare in late 2018.” For more info, go to cmslists@subscriptions.cms.hhs.gov.
March 1
MedPAC, Ronald Reagan Building, Horizon Ballroom, 1300 Pennsylvania Ave, continuing March 2.
March 1
MACPAC, advisory body on Medicaid and the Children’s Health Insurance Program, continuing March 2.
March 26
PTAC, Physician-Focused Payment Model Technical Advisory Committee, continuing March 27, information at www.regonline.com/PTACMeetingsRegistration or livestream at www.hhs.gov/live.
OTHER PUBLICATIONS
CMS: Today published the AAPM (Advanced Alternative Payment Model) tables, showing which ones might be MIPS and which ones might be Advanced APMs. You read it here first.\
For reference:
Members of the Senate (here) and Members of Senate Committees (here), Senate Calendar (here).
Members of the House with their House Committees (here), House Calendar (here).
DCMN: February publication dates: 7, 8, 9, 12, 13, 14, 15, 16, 26, 27, 28.
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com