Interested in the U.S. health care system? Here's what you need to know going into 2023.
I said last year that I would post excerpts of important stories you might have missed, especially those that appear in industry publications and outlets that have a paywall. I got busy and it fell off the table, but one of my resolutions is to get this back on the table and do it every week. Hold me to it. And feel free to weigh in with your comments on anything you see here. AND stay tuned for an important announcement about this newsletter soon.
Insurers and their PBMs
The PBM defense playbook Axios is among media outlets reporting that PBMs will be in the hot seat during the 118th Congress and that both Democrats and Republicans alike will be scrutinizing their practices. As Axios’ Peter Sullivan wrote:
One of the top potential areas for bipartisan action is PBMs, as we reported Tuesday. So how are PBMs dealing with this scrutiny? Industry sources say they realize they need to do a better job educating members of Congress about what PBMs really do, and that they are the ones in the supply chain actually working to negotiate lower costs.
My take: Patient advocates and other organizations that know what PBMs “really do” will also need to do a better job educating members of Congress–and they will, despite being massively out-spent by the industry. You need to know that the money behind the PBMs trade group, the Pharmaceutical Care Management Association, is the same as the money behind AHIP, the trade group for health insurers.
That’s because PBMs owned by just three of the big “insurers”--UnitedHealth Group, Cigna, and CVS/Aetna–control 80% of the PBM market in the United States.
Health care increasingly unaffordable for people, especially women, with employer-sponsored insurance Citing a recent research report, Alan Goforth of BenefitsPro reported what most Americans with private health insurance already know:
Health-related benefits have been eroding over time. “In recent years, employer-sponsored health insurance has become less adequate in providing financial protection for all kinds of health care services,” says Avni Gupta, a doctoral student in the Department of Public Health Policy and Management at the NYU School of Global Public Health. Despite improvements in employer-sponsored insurance by the Affordable Care Act, health care costs and out-of-pocket expenditures have continued to rise, the study finds.
My take: The erosion has been going on for many years. When I worked at Cigna, I learned that insurance company executives and Wall Street financial advisors have a euphemism for the constant devaluation of private health insurance: benefit buydown. It’s a term that encompasses the many ways insurers and employers have decreased the value of health insurance year after year while constantly increasing premiums and out-of-pocket requirements. The unrelenting increase in out-of-pockets is one of those “buydowns.”
Bottom line: We are paying more for health insurance and getting far less for our money than we were a few years ago.
Medicare, Medicare Advantage, and Other Public Programs
Lawsuits, Protests, Lobbying: Uproar as Retirees Fight NYC Unions over Medicare
As Mike Antonucci of The 74 reported: Groups of retired New York City employees are fighting their own unions over a plan to move them from their current health insurance coverage into a Medicare Advantage plan.
Retirees have filed lawsuits, lobbied the City Council, and protested outside the headquarters of the United Federation of Teachers, which represents New York’s public school employees and retirees. They are trying to upend an agreement between the city and its labor unions designed to control rising health insurance costs.
NOTE: I testified before the New York City Council about this proposed move on Monday.
OIG: Cigna Should Refund Feds $5.9M for Medicare Advantage Overpayments
Kelsey Waddill of Health Payer Intelligence reported that an Office of Inspector General (OIG) analysis of a sample of Cigna-HealthSpring of Tennessee’s risk adjustment program payments found that 195 of the 279 unique enrollee-years did not have medical records that supported the high-risk diagnoses, which resulted in substantial Medicare Advantage overpayments.
An independent contractor combed through Cigna’s materials to assess whether the diagnoses were validated and, if not, to calculate the financial impact…OIG found that Cigna could have received at least $5.9 million in overpayments for certain diagnoses that are high risk.
The Role of Marketing in Medicare Beneficiaries’ Coverage Choices
As the Commonwealth Fund reported:
Soaring private (Medicare Advantage) plan enrollment has led to a sharp increase in marketing and sales efforts, some misleading and inaccurate. It’s also caused a great deal of confusion and frustration for Medicare beneficiaries struggling to understand and choose among their array of options. In its explainer, the Commonwealth Fund “explores the rules governing how insurers sell their plans, what we know about how marketing and sales tactics impact beneficiaries, and what efforts are being made to ensure beneficiaries get useful, accurate information to help them choose the right plan.”
As Medicare Advantage threats mount, providers seek better partners: 2023 Outlook Survey
Kimberly Marselas of McKnight's Long Term Care News reported:
More skilled nursing providers are embracing Institutional Special Needs Plans by joining existing programs or creating their own as enrollment in other Medicare Advantage plans threatens to surpass half of all Medicare beneficiaries in 2023. The McKnight’s 2023 Outlook Survey found 63% of responding owners, executives, and administrators said their organizations currently participate in or have their own managed care or Medicare Advantage program, such as an Institutional Special Needs Plan (I-SNP).
Hospitals, Health Systems, and Other Facilities
Commonwealth Fund: Medicare inpatient spending concentrated among 2 systems in most regions
Robert King of Fierce Healthcare reported that, as another new Commonwealth Fund analysis found, Medicare inpatient spending was highly concentrated among just two systems in most regions in 2021. The Commonwealth Fund’s analysis comes amid increased scrutiny on the impact of hospital consolidation on care quality and costs.
“If hospital consolidation continues to increase prices in the commercial market, there could be pressure on Medicare to raise rates in line with commercial insurers to avoid access issues for beneficiaries,” the analysis said.
Disparities in Rural America and Big Cities
'Falling through the cracks': Lack of rural health transportation options puts family in bad spot
Samantha Kummerera of ABC 11 in North Carolina reported on the challenges people in rural America face in getting the care they need. This is from her report:
The sound of voicemails and a silent answering machine are all too familiar for Annette Strong. For weeks, she has made call after call trying to arrange transportation for her husband Jeffery Strong to get to medical appointments. "It has stressed me so badly. You can't even imagine. I mean, you're talking about a life or death situation," Annette explained. The couple lives in Franklin County and Jeffery Strong has dialysis appointments three times a week at a clinic just 12 minutes away in Wake County. He is unable to walk and can't see, which means transportation isn't as easy as getting in the family's car. Jeffery needed a transportation company that was able to provide stretcher or wheelchair transport, go out of the county, and service dialysis centers. Annette said this left them with only two options. "That was a shock," she said. "That's it for Franklin County?"