Investor Owned Hospitals, Health Insurers, Did Well in 2022, Others Not So Well
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
Large, investor-owned hospital companies had reduced but still robust profit in 2022 (here), as did commercial health insurers. Most of the hospital industry, however, suffered through what a Fitch analyst (here) called possibly the worst year on record for hospital financial operations.
HCA reported net income of $5.64 billion in 2022, along with $60.23 billion in revenue, down 19 percent compared to 2021, while Tenet reported $410 million in annual profit, compared to $915 million in 2021, and the much-reduced Community Health Systems reported $179 million in profit. CommonSpirit Health had a $451 million loss year over year (July 1 fiscal year), AdventHealth lost $838 million, Kaiser lost $4.5 billion.
UnitedHealth Group made nearly $21 billion, Cigna $6.7 billion, Elevance (f/k/a Anthem) $6 billion, CVS (Aetna) $4.2 billion, and Humana, which announced it was leaving commercial health insurance (see story below) to focus on the very profitable area of Medicare Advantaged programs, made $2.8 billion.
Modern Healthcare reported (here) that “Labor shortages, rising expenses and poor performance in the financial markets led to a money-losing year many in the industry would like to forget. ‘When you look back at 2022, for a sizable portion for the sector, it’s going to go down again as really one of, if not the worst, operating income years ever,’ said Kevin Holloran, senior director at Fitch Ratings.”
More bad news for hospitals looms with the May 11 ending of the COVID-19 Public Health Emergency. “Since January 2020, hospitals nationwide have received a 20 percent increase in the Medicare payment rate through the hospital inpatient prospective payment system to treat COVID-19 patients — that policy ends May11.” The enhanced Medicare payment amounted to an average of $24,000 per patient.
DOCTORS, NURSES AND OTHER HEALTH PROFESSIONALS
Step Lively
A study (here) in JAMA Internal Medicine reports that “The findings of this population-based prospective cohort study of 78,500 individuals suggest that up to 10,000 steps per day may be associated with a lower risk of mortality and cancer and CVD incidence. Steps performed at a higher cadence may be associated with additional risk reduction.”
HOSPITALS, NURSING HOMES AND OTHER HEALTH CARE FACILITIES
Heart Failure Patients Do Just As Well, With Fewer Guideline Therapies, in Rural Compared to Urban Hospitals
Patients with heart failure studied (here) in the rural hospitals were older, remained fewer days in the hospital, were less likely to have received cardiac resynchronization or ACE inhibitors, but had the same rates of in-hospital mortality, 30 day heart failure readmission, 30 day all-cause readmission and all-cause mortality as patients in urban hospitals. “In this large [more than three quarter of a million] contemporary cohort of US patients hospitalized for HF, care at rural hospitals was independently associated with lower use of some guideline-recommended therapies at discharge and shorter length of stay. In-hospital mortality and 30-day postdischarge outcomes were similar at rural and urban hospitals.”
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
CT Committee OKs Medicaid Expansion for Residents Under 19 Without Legal Status
CT Mirror reports (here) that “A bill that would extend Medicaid to a wider group of children and teens without permanent legal status in Connecticut has cleared a key hurdle, though the measure won’t cover as many people as proponents originally had hoped.”
“The Human Services Committee voted 14 to 8 to advance the proposal, which would expand Medicaid, known as HUSKY in Connecticut, to people 18 and younger regardless of their immigration status beginning Jan. 1, 2024 . . . This is the third year in a row that lawmakers are pressing to broaden the Medicaid program. The General Assembly in 2021 approved an expansion to children 8 and younger without permanent legal status. Last year, they widened the eligibility to kids 12 and younger, so long as their families meet the qualifying income limits for Medicaid.”
MedPAC Wrestles With Part B Drug Costs
MedPage Today reports (here) that “Congress will need to use a multipronged approach to bring down prescription drug costs in the Medicare Part B program, members of the Medicare Payment Advisory Commission (MedPAC) agreed at their March meeting on Thursday.
“MedPAC members discussed three draft recommendations being considered for inclusion in the commission's June report to Congress. The recommendations addressed rising drug costs in Medicare Part B, which covers, among other things, the cost of drugs administered in a physician’s office. The three proposed recommendations were:
Give the HHS secretary the authority to cap the cost of Medicare Part drugs that were approved under FDA's accelerated approval program, provided the drugs meet certain criteria
Give the HHS secretary the authority to establish a single average sales price (ASP)-based payment rate for drugs and biologics with similar health effects
Direct the HHS secretary to reduce add-on payments for Part B drugs paid based on ASP to improve financial incentives, and to eliminate add-on payments for Part B drugs based on wholesale acquisition costs.
Commissioners and Part-B students worry about the incentive in “ASP+6%” pricing for physicians to prescribe more expensive drugs, especially when backed by private equity firms.
With regard to manufacturer prices, Commissioner Lawrence Casalino, MD, PhD, of Weill Cornell Medical College in New York City, said "I don't believe that the U.S. needs to finance the cost of pharmaceutical innovation for the world. And to a considerable extent, that's what we're doing," he said. "And I do think it's true that if the pharmaceutical companies couldn't make quite as much on the price side of it, they would be tougher in their negotiations with other countries, with some success."
Humana Exits Commercial Health Insurance, to Focus on Medicare Advantage
The Wall Street Journal (here) reports that the insurer, formerly a hospital company, is reinventing itself, again. “In fully departing the employer business, Humana is reflecting an extreme version of the direction that most of the insurance industry is taking, as companies focus more on government-backed products, particularly the private plans known as Medicare Advantage.”
“Roughly half of Medicare beneficiaries now have Medicare Advantage, and the business is growing rapidly as baby boomers age into eligibility. Humana is the second-largest Medicare Advantage insurer, after UnitedHealth Group Inc.”
“A 2021 Kaiser Family Foundation analysis found that Medicare Advantage delivered larger gross margins to insurers than employer plans, measured as the difference between premiums and the cost of healthcare claims. Insurers can make greater profits on Medicare Advantage when they own doctor groups that care for their patients, analysts have said.”
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Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org
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