DCMedical News: Wednesday, September 21, 2022
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
THE BIG STORY Wednesday, September 21, 2022
Antitrust, Private Equity and Federal Initiatives
Federal Trade Commission Chair Lina Khan spelled out federal initiatives in these areas in testimony Tuesday before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights (testimony here, press release here).
She said, “Among these merger enforcement efforts is critical FTC work to prevent further consolidation in markets for hospital services. On the same day in June 2022, the Commission voted to block two proposed hospital mergers: HCA’s acquisition of Steward Health Care System and RWJBarnabas’s acquisition of Saint Peter’s Healthcare System. Each of these mergers threatened to raise healthcare costs at a time when American families are still reeling from the health and financial challenges of the COVID pandemic. Healthcare experts have shown that competition among health systems—not consolidation—results in lower prices and improved health outcomes for patients, as well as better wages and benefits for employees.”
Other recent FTC initiatives of interest in the health field involve attack on the “buy, strip and flip” model of private equity (here); the FTC’s alliance with the Department of Justice in this focus on private equity (here); specific scrutiny of roll up acquisitions which increase market share (here); and the impact of those smaller deals on larger issues (here).
“While antitrust regulators have long focused on pricing power as potentially harmful consequences of industry concentration, Khan said her agency had been alarmed by empirical research showing that private equity acquisitions degrade the lives of ordinary Americans in more tangible ways. In addition, the agency’s interests involve the very behavior of the finance firms with each other (here), noting that in dividing up markets and companies ‘Firms that once bludgeoned opponents now nurture complex business relationships with their competitors.’”
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE PLANS
Medicaid, a Driver of Equity, And The U.S.’s Largest Health Insurance Program
JAMA publishes a snapshot and retrospective of the Medicaid program (here, commentary on equity here). “Medicaid covered approximately 80.6 million people (mean per month) in 2022 (24.2% of the US population) and accounted for an estimated $671.2 billion in health spending in 2020, representing 16.3% of US health spending. Medicaid accounted for an estimated 27.2% of total state spending and 7.6% of total federal expenditures in 2021. States enrolled 69.5% of Medicaid beneficiaries in managed care plans in 2019 and adopted 139 delivery system reforms from 2003 to 2019. The 38 states (and Washington, DC) that expanded Medicaid under the Affordable Care Act experienced gains in coverage, increased federal revenues, and improvements in health care access and some health outcomes.”
Also, “Approximately 56.4% of Medicaid beneficiaries were from racial and ethnic minority groups in 2019, and disparities in access, quality, and outcomes are common among these groups within Medicaid. Expanding Medicaid, addressing disparities within Medicaid, and having an explicit focus on equity in managed care and delivery system reforms may represent opportunities for Medicaid to advance health equity.”
MedPAC Considers the Big Picture for Medicare Revenues and Expenses
At its meeting September 1-2, the Medicare Payment Advisory Commission (MedPAC) received a briefing (here) on the “Context for Medicare Payment Policy.” In the good news/bad news presentation, strong economic growth and higher than expected Medicare payroll tax revenues has delayed the projected insolvency of Medicare’s trust fund, but only until 2028. Also, “Medicare beneficiaries who died of COVID-19 in 2020 tended to be high-cost beneficiaries with multiple medical conditions” and “The remaining beneficiaries are 2% less costly, on average.”
Further on spending: the most common chronic conditions among Medicare beneficiaries are relatively inexpensive, and the most expensive conditions are relatively rare. Two-thirds of Medicare beneficiaries have high blood pressure, for example. Also, Medicare spending is expected to double in the next ten years. Is Medicare “earned” by beneficiaries? Well, not really, and not by as many of them as in the past: the number of workers per Medicare beneficiary has declined from nearly 5 at the passage (1965) of Medicare, to 2.9 paying payroll taxes for every one Medicare enrollee. As a result, general tax revenues have surpassed Medicare payroll taxes as a source of Medicare funding, but the fastest growing source is Medicare premiums. The complete transcript of the two day MedPAC meeting is here.
Black and White Medicare Patients in Hospitals
Medicare appears to have an equity problem, according to the authors of “Hospital Financing in Black and White,” published in STAT (here). The authors report that “A relative handful of hospitals — just 10% of all hospitals —provide three-quarters of all care for Black people covered by Medicare.” They write, “Race-based inequities in hospital resources are the legacy of slavery, discrimination, and health care financing policies that directed resources to white communities and away from communities of color. The current-day hospital payment system continues to cement these inequities by assigning different dollar values to the care of different patients.”
Their study found that “Hospitals caring for large shares of Black patients were paid $283 less for each day of a patient’s hospital stay compared to other hospitals. As a result, while many hospitals realized profits from their inpatient care, Black-serving facilities ran in the red. The differences in funding were not attributable to differences in how sick the patients were, the complexity of care the hospitals delivered, or hospital characteristics like their size, location, or whether they were academic centers.”
DRUGS & DEVICES
Executive Accountability
A study in JAMA Internal Medicine (study here, commentary here) counts the number of prosecutions under the Park doctrine brought against executives whose device or drug companies committed fraud. “When a drug or medical device company violates federal law, the government has a powerful tool to use: the Park doctrine. The aim of the doctrine is to protect patients from the harms of an unsafe or fraudulent medical marketplace by targeting the executives who run the companies that make revenues on these products while violating federal law, rather than have that risk borne by patients or impersonal corporate entities; however, public reports of drug and device company executives being prosecuted in Park doctrine cases are uncommon.”
The findings: “Thirteen cases of executives from 6 drug and medical device companies prosecuted under the Park doctrine since 2000 were identified. The prosecutions resulted in 11 guilty pleas and 2 jury trials, leading to 2 convictions. Of the 6 companies, 3 were drug manufacturers, 2 were medical device manufacturers, and 1 was a compounding pharmacy. . . . All but 3 prosecutions alleged the defendants’ complicity or personal involvement in the misconduct, which Park does not require. By contrast, most large settlements with the DOJ over alleged misconduct in the past 2 decades did not result in individual liability for executives.”
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
September 22, 28, 29, 30
October 11, 12, 13, 14, 17, 18, 19, 20, 21
November 14, 15, 16, 17, 18, 29, 30
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org