DCMedical News: Thursday, June 23, 2022
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
THE BIG STORY Thursday, June 23, 2022
House Appropriations Boosts Health Spending In HHS to $124 Billion
The House appropriations subcommittee with jurisdiction over the departments of Labor, Health and Human Services and Education approved a draft fiscal 2023 Labor-HHS-Education spending bill (here) with a total of $242.1 billion in discretionary funding, including $124 billion for the Department of Health and Human Services, an increase of nearly $16 billion from this year’s levels.
NIH funding would increase by $2.5 billion, to a total of $47.5 billion, while CDC funding would increase $2 billion to a total of $10.5 billion. SAMHSA, addressing opioid addiction, would receive an increase of $2.6 billion, to a total of $9.2 billion.
Where is Health Care Inflation Now?
Assessment of general and health industry inflation in Bloomberg (here) holds that “Inflation is surging in the US, with prices rising at the fastest pace in 40 years and the Fed hiking rates to tamp it down. In normal times, price increases for medical care outpace overall inflation. Curiously, that’s not happening now: Medical prices are lagging behind overall inflation, not leading it as they typically do.”
The report continues, “The prices of prescription drugs, hospital care, dental services and all other manner of medical services have increased less quickly than the overall rate of inflation in the past year, according to federal data. While Americans are accustomed to rising health-care prices eroding earning power, it’s less of a factor now than the cost of other necessities like food or energy.”
The Peterson-KFF “health system tracker” (here) finds that “Using the CPI, we show that in April 2022, overall prices grew by 8.3% from the previous year, while prices for medical care increased by only 3.2%.” This is in contrast to the history of the past twenty years in the U.S.: “Since 2000, the price of medical care, including services provided as well as insurance, drugs, and medical equipment, has risen faster than prices in the overall economy. Medical prices have grown 109.2% since 2000. In contrast, prices for all consumer goods and services rose by 68.8% in the same period.” In fact, “Since the year 2000, there have only been five years when price growth in the general economy outpaced growth in medical care prices, and the difference was less than 1 percentage point in three of those years.”
“While no individual medical component increased in prices more than the general inflation, some medical categories saw larger price increases than others. Prices for hospital services – both inpatient (3.7%) and outpatient (3.3%) – as well as for nursing homes (3.6%) rose faster than overall medical care prices (3.2%). Prescription drugs and physician services had lower price increases (1.7% and 1.2%, respectively).
HOSPITALS, NURSING HOMES AND OTHER HEALTH CARE FACILITIES
Wealthy hospitals prospered, struggling hospitals not so much, with COVID-19 pandemic aid. The result may drive further hospital consolidation.
The Washington Post (here) highlights the disparity, noting the “Unintended consequences of a $178 billion bailout that Congress dumped into the national health-care system at the start of the pandemic in an urgent attempt to keep hospitals and doctors afloat. Two years later, data show that the money indeed served as a lifeline for many hospitals that might not have withstood the onslaught of the coronavirus — but the funds also exacerbated the gap between the industry’s haves and have-nots, disproportionately rewarding wealthy hospitals that did not need the money as urgently. Many institutions reported strong profits and pursued growth strategies without pause.”
One examination of where the money went has been published by the State Treasurer of North Carolina (here), working with the National Academy for State Health Policy. From that document: “As widespread economic suffering shuttered businesses and schools, cost thousands their jobs and strained small and rural hospitals, North Carolina’s seven largest hospital systems recorded $7.1 billion growth in cash and financial investments from 2019 to 2021. These seven systems reaped $5.2 billion in net profits in 2021, and all but one even enjoyed higher net profits than before the pandemic.”
The ”extra” from COVID relief funds, from the North Carolina report: “The large hospital systems built these profits while taking $1.5 billion in taxpayer-funded coronavirus relief meant to support struggling hospitals from 2020 to 2021. When they then accepted another $1.6 billion in Medicare Accelerated and Advance Payments, most hospital systems boasted enough cash on hand to operate for more than half a year without any incoming revenue — or more than 10 times as long as many rural hospitals.”
“The dominant hospital systems did not share their massive profits with disadvantaged patients. In 2020, only a sliver of their $3.1 billion growth in cash and investments was devoted to increasing charity care spending despite record unemployment rates and economic pain from the pandemic and the lockdowns. Instead, charity care spending fell across a third of all North Carolina hospitals in 2020. Even worse, certain hospitals billed more dollars to impoverished patients eligible for charity care than in previous years.”
The North Carolina report concluded, “The profits gained from the misdirection of taxpayer dollars are expected to drive record levels of consolidation and health care price increases.”
Chicken and Egg: Risk and Readmission in Pneumonia Patients
A study in JAMA (here) examines the question, “Which came first, adverse patient safety events, or excess readmissions?” Say the researchers, “It is known that hospitalized patients who experience adverse events are at greater risk of readmission; however, it is unknown whether patients admitted to hospitals with higher risk standardized readmission rates had a higher risk of in-hospital adverse events.” In fact, in this study, “Patients with pneumonia admitted to hospitals with a high all-cause readmission rate were more likely to develop adverse events during the index hospitalization.”
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
United Losses in MA Fracas Before the Supreme Court
Bloomberg Health Law & Business (here) reports that “The US Supreme Court rejected an appeal by UnitedHealth Group Inc., leaving in place a federal rule designed to allow the government to recoup billions of dollars in overpayments from insurers that participate in the Medicare Advantage [MA] program.” The government’s brief to reject the United appeal is here.
Background: “Medicare Advantage, a private version of Medicare, has become a growth engine for the US health insurance industry, with enrollment roughly doubling in the last decade. Insurers have come under scrutiny for the way they record patient illnesses, with authorities saying the practices sometimes inflate payments. The industry has defended the practices, saying insurers are reimbursed appropriately for the risk they take on.”
The rule in question: “The rule implements a 2010 law that requires Medicare Advantage insurers to return overpayments they discover within 60 days. The rule defines overpayments to include those based on diagnoses that aren’t supported by the beneficiary’s medical record.”
The evidence: “Audits conducted by the Health & Human Services Department found that more than 40% of the risk scores in each of two UnitedHealth plans were inaccurate due to unsupported diagnoses. The department estimated the impact on payments for those two contracts to be more than $500 million,” and “The Centers for Medicare & Medicaid Services estimated the government made more than $16 billion in improper payments under Medicare Advantage during fiscal 2016 alone, according to a 2017 Government Accountability Office report (here).”
The upshot: United contended that a decision disallowing MA plan retention of the overpayments will be “forcing insurers to reduce coverage and benefits or raise premiums for many of the 26 million seniors who are enrolled.”
READINGS & REFERENCES
Select Coronavirus Public Health Resources and References may be found here.
Monkeypox resources, CDC (here), JAMA Patient Page (here).
2022 CQ Congressional Calendar here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
June 24
July 12, 13, 14, 15, 18, 19, 20, 21, 26, 27, 28, 29
August, Congress adjourned, no editions of DCMN
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org