DCMedical News: Tuesday, July 23, 2019
DCMedical News-DCMN
Washington, D.C.
Tuesday, July 23, 2019
DCMedical News is published every day both the House and the Senate are in session. Subscription information below.
THE BIG STORY IN HEALTH CARE
Spending Limit Deal
Congressional leaders and the Administration have reached agreement on an increase in spending limits to be allowed under the FY2020 budget, beginning October 1. CQ reports “In the fiscal year that begins Oct. 1., funding across all federal agencies would get a nearly 4 percent boost over this year’s enacted level, instead of the 10 percent cut required under the 2011 law.” The debt limit increases, policy “riders” are not attached, harmony prevails, House to Act Thursday, Senate by August 2. A limited offset to spending increases will be financed by “automatic cuts to Medicare and other programs that are currently set to expire in 2027.”
No Deal on Drug Prices as August Recess Approaches
House speaker says action in the fall, Senate Chairman Grassley says not convinced, despite CBO study showing savings for public programs, without adverse impact on commercial health insurance patients.
HOSPITALS, NURSING HOMES AND OTHER HEALTH CARE FACILITIES
Preventable Harm in Hospitals at 6%
A study in the British Medical Journal (here) indicates that 12% of patients have significant harms while in a hospital, of which 6% were judged preventable. “A pooled proportion of 12% (9% to 15%) of preventable patient harm was severe or led to death. Incidents related to drugs (25%, 95% confidence interval 16% to 34%) and other treatments (24%, 21% to 30%) accounted for the largest proportion of preventable patient harm. Compared with general hospitals (where most evidence originated), preventable patient harm was more prevalent in advanced specialties (intensive care or surgery).”
CMS Administrator Unloads on Hospitals
Modern Healthcare reports in its July 22 editions that CMS Administrator Seema Verma took issue with hospital policies on several fronts. Speaking at a lobbying group for Medicare Advantage plans, Ms. Verma said that “"Medicare actually pays more for many services when they're performed in a hospital . . . This has led to a surplus of hospital beds in the country; and hospital spending is the largest driver of healthcare costs. Shortages and surpluses—these are the hallmarks of government price-setting." The MH report said also that “Verma doubled down on another topic that makes major health systems nervous: the growth of hospital monopolies and the ‘upward trend in provider consolidation.’” She said, “Hospitals are buying up physician practices, and mergers of large health systems and health plans are a common occurrence . . .But without competition in a market, consumers have fewer choices, prices go up, and incentives to improve quality go down." She also spoke about the 340B drug discount program, now with more than 2000 hospitals participating, describing the program as driving more hospitals to buy up physician practices.
KaufmannHall reports on Second Quarter Merger and Acquisition Activity in the Hospital Field
The report (here) shows record size of transactions. “The average size of seller (by revenue) grew from $196 million in Q1 to approximately $597 million in Q2. This reflects the impact of three large announced transactions—the Atrium Health/Wake Forest Baptist Health, Gundersen Health System/Marshfield Clinic Health System, and Sanford Health/ UnityPoint Health mergers—on a smaller overall number of transactions for the quarter. Growth in the number of mega mergers (transactions in which the seller has $1 billion or more in annual revenue) has steadily pushed the average size of seller upward in recent years.”
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
Commercial and Public Insurance Prices Paid to Hospitals
A “Viewpoint” in JAMA (here) discusses the “prying open” of the black box of hospital prices. “The prices paid by commercial insurers to hospitals have driven growth in overall health care costs, as utilization rates have remained flat and, in some cases, declined. Between 2007 and 2014, commercial insurance prices for inpatient services increased 42% and prices paid for hospital-based outpatient care increased 25%, both of which were far greater than general inflation or the increase in Medicare or Medicaid prices during the same period.” Hospital price expert Rick Louie gives an example of transparency compliance, including DRG prices, here.
Surprises in the Examination of Surprise Bills
The Commonwealth Fund (here) and the Kaiser-Peterson group (here) both report on surprise medical bills. The Kaiser-Peterson’s study of large employer claims shows “About a quarter or more of emergency visits in Texas (38%), New Mexico (29%), New York (28%), California (26%), Kansas (24%), and New Jersey (24%) resulted in at least one out-of-network charge in 2017, while the rate was under 5% in Minnesota (3%), South Dakota (4%), Nebraska (4%), and Alabama (4%).” The overall state leader was New York, whose 2015 “baseball arbitration” resolution of disputes was frequently cited in shaping federal legislation: “The rate of out-of-network charges for services at in-network inpatient facilities ranged from 2% of in-network inpatient stays in South Dakota, Nebraska, and Minnesota, to about a quarter or more in New York (33%), New Jersey (29%), Texas (27%), and Florida (24%).”
DRUGS AND DEVICES
Most New Drugs Have No New Benefit
A study in the British Medical Journal (here) indicates that most new drugs added in the German Health System provide no new benefit. The background: “Medicines regulators around the world are pursuing a strategy aimed at accelerating the development and approval of drugs. These approaches are based on the assumption that faster access to new drugs benefits patients. The rhetoric of novelty and innovation creates an assumption that new products are better than existing ones. But although gaps in the therapeutic armamentarium undoubtedly exist, research covering drug approvals since the 1970s suggests only a limited number of new drugs provide real advances over existing drugs. Most studies put the proportion of true innovation at under 15%, with no clear improvement over time.” The German health technology assessment agency IQWiG (Institute for Quality and Efficiency in Health Care) must investigate the added benefit of new drugs compared with standard care. The results: “Only 54 of the 216 assessed drugs (25%) were judged to have a considerable or major added benefit. In 35 (16%), the added benefit was either minor or could not be quantified. For 125 drugs (58%), the available evidence did not prove an added benefit over standard care for mortality, morbidity, or health related quality of life in the approved patient population.”
READINGS 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
July publication dates: 24, 25, 26
August publications dates: None
September publication dates: 9, 10, 11, 12, 17, 18, 19, 20, 23, 24, 25, 26, 27
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com.