DCMedical News: Wednesday, March 13, 2019
DCMedical News-DCMN
Washington, D.C.
Wednesday, March 13, 2019
DCMedical News is published every day that both Houses of Congress are in session. Subscription information below.
THE BIG STORY IN HEALTH CARE:
Budget:
HHS Secretary Alex Azar continues his explication of the President’s budget proposals today when he testifies at a House Appropriations Committee Labor, Health and Human Services, Education Subcommittee hearing. HHS Budget proposal for FY 2020 here.
HOSPITALS, NURSING HOMES AND OTHER HEALTH CARE FACILITIES
Price “Transparency” and Negotiated Contracts:
The Wall Street Journal reports (here) that hospitals and insurers both oppose public disclosure of negotiated prices for medical services. (They don’t like a “public option,” either; report on the projected impact of “Medicare-X” sponsored by AHA and FAH, here.)
The Administration (Executive Order, here, and competition manual, here) believes that price disclosure will lead to lower prices. The industry believes that price disclosure will lead to (a) every ceiling becoming a floor, that is, a beginning point for aspirational reimbursement, (b) “signaling,” in which an industry acts in concert, not as evidence-laden as overt price fixing, and (c) loss of status, leverage and position for those involved in managed care negotiations.
Providers Continue Attack on Stark Law, in Concert with CMS:
The argument (see Modern Healthcare report from March 11th, here) is that the Stark prohibition on self-dealing by providers “hampers alternative payment models that encourage providers to deliver better-quality, lower-cost care.” Not all parties are sanguine, however; America’s Health Insurance Plans (the trade group for commercial insurers) “urged the CMS to closely study whether value-based arrangements achieve their cost and quality goals while minimizing potential unintended consequences on patients.” The Modern Healthcare story has a “hall of shame,” a sampling of significant Stark law, False Claim Act and anti-kickback statute settlements in recent years, essentially payments to physicians by hospitals for the referral of patients.
One Star, Five Stars:
Becker’s went to the trouble to sort the latest CMS “star” rating of hospitals, listing (by state) the 293 hospitals with five stars here, the 282 with one star here.
An Inconvenient Target:
England’s National Health is getting ready to drop its “four-hour Accident & Emergency treatment target,” according to a report (here) in the Financial Times. The “rigid waiting times” may lead to “unnecessary admissions,” as time clocks or shifts end.
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
Antitrust Oriented Legislators on Health Care:
The House Judiciary Committee’s Subcommittee on Antitrust heard from authorities on anticompetitive features of the American health care system. The transcript (here) from the March 7th meeting includes comments from witnesses Dr. Fiona Scott Morton of Yale, Michael Kades of the Washington Center for Equitable Growth, Martin Gaynor of Carnegie Mellon and Craig Garthwaite of Northwestern University.
Professor Morton noted that “My belief is that . . . if we do not fix this that the ever-increasing costs are going to lead to a different kind of a solution, which is just price regulation by the government.” She noted that “markets would be much better. But, they have to be working markets. It’s not obvious that price regulation would be worse than unrestrained private monopolies, which is what we are faced with today.” She addresses (page 13) biologics and physician administered drugs.
Mr. Kades discussed monopoly power in pharmaceutical pricing, noting that “The exploitation of monopoly power is the kind of inequality that is at the core of the most important challenges that our economy and nation face,” and that “I’m here to tell you the system is broken.”
Professor Gaynor noted that “Our healthcare system is based on markets,” but that “That system is only going to work as well as the markets that underpin it.” He cited the nearly 1,600 hospital mergers of the past twenty years, as well as consolidation in the health insurance markets where the two largest carriers have 70% of the market in over one-half of all local insurance markets. He notes that physician services have also become concentrated, with “Two thirds of specialist physician markets…concentrated and 29 percent for primary care physicians,” accelerated by 31,000 physician practice acquisitions by hospitals from 2008 to 2012.
READING AND REFERENCES
U.S. House of Representatives:
Members at https://www.house.gov/representatives, Committees and Members at https://www.house.gov/committees
U. S. Senate:
Members at https://www.senate.gov/general/contact_information/senators_cfm.cfm, Committees and Members at https://www.senate.gov/committees/membership_assignments.htm
House and Senate 2019 Calendar of Regularly Scheduled Sessions, here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
March publication dates: 14, 25, 26, 27, 28
April publication dates: 1, 2, 3, 4, 9, 10, 11, 12, 29, 30
May publication dates: 1, 2, 7, 8, 9, 10, 14 15, 16, 17, 20, 21, 22, 23
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com.