Category: Health Care Issues

Oct
12

What healthcare costs and what you pay

Posted by Joe Paduda on Monday, October 12th, 2020 | Comments

Individuals and families will spend about a trillion dollars on healthcare costs this year. 

Most of those dollars pay for out-of-pocket costs and your share of employer-sponsored health insurance costs.

For those with employer-sponsored health insurance, annual premiums in 2020 averaged $7,470 for individuals; $21,342 for families.

Average premiums went up 4% this year, continuing the long-term trend of healthcare inflation significantly exceeding overall inflation.

Over the last five years, premiums increased 22%, more than twice the overall inflation rate (10%).

Then there’s out of pocket costs.

Most families with high deductible plans will have to cough up (no pun intended) more than $4,000 before their insurance plan starts paying.

What does this mean for you?

Every year, more and more of your income goes to healthcare.

 

Sep
10

The Trump Healthcare plan explained – briefly

Posted by Joe Paduda on Thursday, September 10th, 2020 | Comments

Yesterday we discussed Presidential candidate Joe Biden’s healthcare plan.

Today we’ll do the same for President Trump’s healthcare plan, which was promised to be ready before the upcoming election…

Five times this year President Trump has promised he will unveil a replacement for “Obamacare”. As of this writing, I have not been able to locate any such replacement plan documentation, web pages, policy statements or plan descriptions other than a couple described below. If you have any details, please share in the comments section below.

It’s not just me – Forbes wasn’t able to locate the President’s plan.

So, if you are looking for a brief explanation – you can stop reading here.

For those who want more detail, here it is.

Unfortunately it appears the White House’s healthcare page has not been updated since 2017 so we will have to rely on public pronouncements and speeches.

Trump’s campaign site does have a list of objectives, but no actual plan, policy description, or details on how these will be met:

This has made it rather difficult to analyze Trump’s plan, so we will have to use the President’s pronouncements to assume what his plan will be. Please note that wherever possible I have cited official White House or Trump Administration sources below.

Pre-existing conditions

The President has repeatedly stated that his plan will require “health insurance companies to cover all preexisting conditions for all customers,” including during a press briefing in early August. In that briefing, Trump stated:

Over the next two weeks, [emphasis added] I’ll be pursuing a major executive order requiring health insurance companies to cover all pre-existing conditions for all customers. That’s a big thing. I’ve always been very strongly in favor — we have to cover pre-existing conditions. So we will be pursuing a major executive order, requiring health insurance companies to cover all pre-existing conditions for all of its customers.

This has never been done before, but it’s time the people of our country are properly represented and properly taken care of.

[note – requiring health insurers to cover pre-ex conditions is imbedded in the ACA (sometimes referred to as Obamacare) and is the law of the land today as that provision of the ACA remains in effect.] source cited is US Dept of Health and Human Services, part of the Trump Administration

Takeaway – taking the President at his word, any new healthcare plan will provide coverage for pre-existing conditions. We do not know if the Trump Healthcare Plan will allow insurers to charge extra for that coverage, or limit coverage to some dollar amount. (that is not allowed under the ACA)

Medicaid changes

Trump has sought to end Medicaid expansion, change funding, and institute work requirements. While these all sound good in sound bites, like many complex issues things sound a lot less good when you peel back the curtain.

Ending the expansion of Medicaid would crush hospital financials, especially in rural, western, midwestern and southern states.  In many areas Medicaid is a critical funding source for facilities; those states that have expanded Medicaid (including deep red Oklahoma) would be in dire straits if the rug was pulled out from under them.

The President has pushed hard to change the way Medicaid is funded to a “block grant” method.  Essentially a block grant is a fixed amount of funding; this would replace part or all of the current funding which is based on a percentage of expenses.

Simple in concept, this is much harder to implement, and completely unsuited to our current situation where Medicaid enrollment is rapidly growing due to the fallout from COVID. We haven’t heard much about block grants of late from the President, so not sure if they are still under consideration.

The same is true for work requirements. Many low income folks don’t have internet access, which is required to submit the detailed documentation required under state Medicaid work requirements. Then they need reliable transportation to get to work – which many don’t have. And there are few jobs available these days in many states due to COVID.

Takeaway – Trump wants to end Medicaid expansion, change its funding mechanism, and require some recipients to work. It is highly doubtful any of this will happen.

Drug prices

The President has authored several executive orders around drug prices, but didn’t follow through on actually implementing those orders.

Trump’s move appeared to be intended to force pharma manufacturers to the bargaining table, but that hasn’t happened. Despite Trump’s statement that he would take unilateral action if pharma didn’t cooperate with him by August 25, he didn’t follow thru on that threat.

More troubling, pharma execs don’t know anything about any meeting or discussion.

Takeaway – no significant action to control drug prices is likely.

What does this mean for you?

It’s really hard to say. 

 

Sep
4

Friday catch-up

Posted by Joe Paduda on Friday, September 4th, 2020 | Comments

Lots happened this week – here’s the big stuff.

COVID’s impact on work comp

WCRI is hosting a free webinar on the delivery of medical care and RTW during the pandemic.  Hosted by WCRI CEO John Ruser PhD and Randy Lea MD, the webinar will also include Mark Herbert MD, an infectious disease specialist.

Sign up here for the September 24 event, it kicks off at 2 pm eastern.

Drug prices

No, payers’ drug costs are not dramatically higher. In fact, net costs after rebates and other payments are flat to lower.  That’s one of the key findings from Adam Fein PhD’s analysis of the top PBM’s results. Kudos to Express Scripts, CVS, and Prime Therapeutics for publishing true cost data; one only wishes all PBMs did the same.

Ever wonder where all those new drugs come from?

Well, pat yourself on the back – because you, dear taxpayer, funded most of the initial R&D behind new drug development. Here’s the takeaway:

every new drug approved by the Food and Drug Administration (FDA) for the decade from 2010-2019 was associated with basic science funded by the NIH.

The IAIABC’s annual meeting kicks off next week; registration is still open here. Lots will be covered, including a discussion of COVID claims, presumption, fee schedule improvements, and of course EDI.

David Dubrof is PBM myMatrixx’ new Chief Sales Officer. I’ve known David for 20+ years; he is one of the very few “A” players in work comp services sales and a consummate professional. (myMatrixx is an HSA consulting client). David is all in on myMatrixx’ industry-leading push for price transparency.

How’s that budget process going?

Imagine trying to set up a curriculum for an unknown number of students with an unknown level of education. Or meal planning for an unknown group with different dietary requirements that are also unknown.

Well, that’s budgeting 2021. Never has that been so…fraught/uninformed/scary/pointless as it is today. If you need a break from trying desperately to figure out how to justify/rationalize your 2021 forecast and budget, read this.  It’s an excellent discussion of budgeting in a time of huge uncertainty.

Family is coming in this weekend to celebrate our new granddaughter’s arrival – have to say this is much-needed these days; the nastiness and bad news is getting to be a bit much.

Hope your weekend is filled with joy.

Aug
28

Friday fact day – COVID19 update, job losses, more uninsured, and executive move

Posted by Joe Paduda on Friday, August 28th, 2020 | Comments

Another whirlwind week is just about over, and with it the summer of 2020.

Here’s important/interesting news that came across my virtual desktop this week.

COVID and Comp

More data on workers’ comp COVID19 claims is coming in; Virginia’s Workers’ Comp Commission has published data; key takeaway is to date, only 8.3% of COVID19 claims reported have resulted in benefit payments. That will certainly increase as claims develop.

More info on state COVID reporting is here – you can watch a recorded webinar on the subject here – Mark Priven and I dive into data from California and Florida and discuss the implications thereof.

Meanwhile, employment took another hit as last week more than a million Americans filed for unemployment. This continues a five-month run of claims at or above the million mark. 14 million of us are still without jobs.

COVID19’s impact on health insurance coverage

Several million people have lost their health insurance due to COVID19-related job losses.  We don’t know the specific number – and it is certainly increasing – but it is likely between 3 and 12 million. (download the report for details).

Another perspective is here.

Most of those folks are lower-income workers and many are minorities; some may be eligible for Medicaid however states that did NOT expand Medicaid such as Texas and Florida will see an increase in uninsured care costs.

Congratulations to myMatrixx and new Chief Sales Officer David Dubrof; David is one of the very few “A” players in work comp services sales; myMatrixx will benefit greatly from his sales leadership. David and his colleagues are equally fortunate; payers have consistently rated myMatrixx the top workers’ comp PBM. (myMatrixx is a client)

NCCI published a report on the impact of fee schedule changes on outpatient facility costs.  Good to see this rapidly-rising cost driver getting attention.

Implications

  1. Fewer jobs = lower payroll = lower work comp premiums
  2. Things are tough and getting tougher for lower-wage workers, which are disproportionally people of color.
  3. More uninsured = more need for facilities to get $$ from those who are insured.
Aug
25

Lies, Damn lies, and Statistics – the Blood Plasma debacle

Posted by Joe Paduda on Tuesday, August 25th, 2020 | Comments

Sunday President Trump, HHS Secretary Alex Azar and FDA Commissioner Dr Stephen Hahn said the use of blood plasma had reduced COVID19 deaths by 35%.

Trump said it was a “tremendous” number.

Azar said:

“We saw about a 35 percent better survival in the patients who benefited most from the treatment, which were patients under 80 who were not on artificial respiration…I don’t want you to gloss over this number…We dream in drug development of something like a 35% mortality reduction. This is a major advance in the treatment of patients.”

Hahn said

“a 35 percent improvement in survival is a pretty substantial clinical benefit. What that means is — and if the data continue to pan out — 100 people who are sick with covid-19, 35 would have been saved because of the administration of plasma.”

This is not “stretching the truth”, or over-generalizing, or taking something out of context.  It is total bullshit.

A REAL FDA scientist – whose name was redacted from an FDA memo, was a LOT less enthusiastic, writing the study data:

 “support the conclusion that [convalescent plasma] to treat hospitalized patients with COVID-19 meets the ‘may be effective’ criteria for issuance of an EUA. [emphasis added; EUA = emergency use authorization, which allows use of a treatment before it goes thru the entire approval process]

There is no basis or source for the 35% figure; it appears to have been derived from a very small group of patients treated at the Mayo Clinic.

Note the emphasis on “appears”; that statistic was NOT in the Mayo Clinic’s 31 page report;

  • nor was it in a memo authored by FDA scientists,
  • nor was it in the FDA’s letter authorizing use of blood plasma on an emergency basis to treat COVID19,
  • Nor could it have been credibly derived from the actual study report.
  • Nor did one of the principal study authors have any idea where the 35% figure came from.

If anything, it looks like Azar, Hahn, and President Trump cherry-picked data by only looking at results from a very select and very small subset of a subset of patients; those:

  • less than 80 years old;
  • not on a ventilator; that
  • received plasma within 3 days of diagnosis, and
  • received plasma with high levels of antibodies.

But wait, you say, that’s still good news!

Okay,

Here’s what the study actually found as reported by the NYTimes:

among the larger group of more than 35,000 patients, when plasma was given within three day of diagnosis, the death rate was about 22 percent, compared with 27 percent when it was given four or more days after diagnosis.

Hahn later corrected his statement – but only after an official FDA spokesperson perpetuated the fraud…

I get we all want to find a cure, and a vaccine, and we want this long global nightmare to end. We want the dying to stop, the suffering to end, the pain to go away, life to return. But our only hope is rigorous, robust, careful and thorough science.

Not political grandstanding, not abuse of a vitally important Federal Agency, not outright lying. We’ve been down this path before, and it didn’t turn out well.  Remember hydroxychloroquine?

Does it appear blood plasma from patients that have recovered from COVID19 may be beneficial? Yes. Is it likely it will help some patients? Well, there’s some evidence it may help some patients.

Is it a universal cure?

Highly unlikely.

What does this mean for you?

Science matters. Dig deep, ask hard questions, and don’t believe the headlines until you do your homework.

 

Aug
20

COVID treatment costs

Posted by Joe Paduda on Thursday, August 20th, 2020 | Comments

We are getting more data on what insurers pay for COVID treatment, data that will help business folks better plan for the future.

AHIP’s June analysis provides a range of estimates based on different infection rates; the chart below reflects an assumed infection rate of 20%. (the methodology and database are robust and pretty complete, see appendices for details)

Note the “cost per utilizer” data which indicate average commercial insurance costs of:

  • $25,000 per non-ICU hospital admission
  • $81,000 per ICU hospital admission
  • $1,500 per outpatient hospital admission
  • $750 for all other medical treatment costs

Patient cost-sharing could add another 8% or so to total costs, however as most insurers have waived cost-sharing requirements,  in most cases that 8% would be added to insurers’ costs.

There are other sources for cost estimations including FAIR Health and the Kaiser Family Foundation. An extensive discussion of their methodologies is here, KFF uses pneumonia with significant complications as a proxy for COVID19, while FAIR Health’s numbers are based on actual COVID19 treatment costs. (I discussed FAIR Health’s findings in depth back in July.)

Other research is here.

For those interested in the percentage of those infected who are hospitalized, a chart from the above link is below.

Costs for treatment of workers’ comp patients may well be higher, however this will vary greatly depending on the state, fee schedule limits (if there is a fee schedule) and network arrangements.

What does this mean for you?

All available data indicates medical treatment for COVID is not that costly. Yes there are some cases that require long-term, extensive ICU care with ventilator assistance, but they are relatively few.

Aug
14

Are health insurers profiting while providers suffer?

Posted by Joe Paduda on Friday, August 14th, 2020 | Comments

Well, yes – but it’s not intentional.

Most medical practices have seen a sharp drop in patient visits – and revenues – due to patient concern over COVID19 exposure. Hospitals have also suffered, as have ancillary providers, and many are on the brink of financial collapse.

Rural and safety-net providers are especially vulnerable, as many were on very shaky ground before COVID19.

Primary care providers are in the worst shape, as their patients often don’t have serious health needs that need to be addressed immediately. And primary care providers have the lowest pay as well. Research indicates that PCPs will lose about $15 billion this year.

Meanwhile, health insurers’ finances have never been better.

The connection is clear – insured people are not getting care, so insurers don’t have to pay their bills.

For months, healthcare providers have called on insurers to help them out by prepaying for care, paying billed charges, authorizing all treatment requests, providing loans, or otherwise funding providers. Much of this is nonsensical; authorizing all treatment requests would certainly lead to widespread abuse, over-treatment, and poor outcomes. Paying billed charges is nuts; NO ONE pays billed charges, which can be 10-30 times higher than average reimbursement.

What’s clear is COVID has likely created a significant one-time profit bump for healthplans, as a lot of foregone care will not be “made up” as practices gradually return to normal. While insurers should carefully assess their reserves, it is highly likely their “excess profits” won’t all be needed to pay for future COVID19 costs.

So, what to do?

Prepaying care may be a viable option. Healthplans would mine their data to determine what they paid a practice in the recent past, figure out how many members are using that practice, and sign a contract with the practice to ensure the plan’s interests are protected.

That’s just a short-term solution to a problem with roots that far predate the pandemic.

Reality is primary care is still under-valued, fee for service creates huge administrative friction and incentivizes over-treatment, and health care prices are unsustainably high.

What does this mean for you?

COVID will accelerate systemic changes that are desperately needed. There will be lots of pain for some stakeholders – primarily specialists and facilities.

Jul
31

COVID update – vaccines, denier death, and prognostications

Posted by Joe Paduda on Friday, July 31st, 2020 | Comments

Lots of news COVID-related this week…

Three vaccines seem to be the most promising; all are entering Phase 3 trials with tens of thousands of test subjects involved.  Moderna and Pfizer look to be the furthest along, with AstraZenica/Oxford University’s vaccine also showing some promise.

Before we pop the champagne, remember…

  • trials are just that – they are used to assess safety, effectiveness (how much protection the vaccine provides) durability (how long the vaccine provides immunity)
  • the history of vaccine development is not exactly encouraging, and
  • once a vaccine is proven, we’ll need tens of millions of needles, syringes, vials, and a delivery system to ensure it all gets to the people who need it most.

There’s another problem with these trials – too few people of color are involved – far too few. That’s really troubling, as Black and Latinx people are suffering much more than Caucasians.

So, keep doing smart stuff until you get vaccinated. Fortunately, more of us are now accepting that masks make a big difference.

The death of former GOP Presidential candidate Herman Cain from coronavirus and the infection of Texas Rep. Louie Gohmert (R) may be changing minds; these two gentlemen dismissed the news about COVID19 and refused to wear masks.

Mr Cain is wearing the red tag.

Meanwhile, I’ve been engaging with NCCI and experts from the Insurance Information Institute in an effort to better understand the financial impact of COVID on workers’ comp. Stay tuned for more; key takeaway so far is that NCCI and III are focused on potential costs of COVID itself; they have not done any work assessing the impact of the sharp decline in claims.

There’s also a lot of talk about how bad COVID may be for profitability, a position I’m still struggling with.

What does this mean for you?

Wear a mask. 

Jul
20

What COVID really costs.

Posted by Joe Paduda on Monday, July 20th, 2020 | Comments

Last week Fair Health released an analysis of charges and payments for COVID-related medical care. Here are the key findings based on data from January through May.

  • Median estimated allowed payment for hospital care was $24,012 for people 51-60 years old
  • HOWEVER – costs varied significantly around the country, especially in the western US
  • 30% of people diagnosed with COVID19 were 51-60
  • However, the average age appears to be dropping by about 15 years
  • 54% of those diagnosed were male, 46% female
  • About 6% of diagnoses were made via telehealth
  • Patients’ past medical conditions weigh heavily on outcomes; the most common comorbidity involved kidney disease.

What does this mean for you?

  1. The median cost of hospital care for COVID patients isn’t that much.
  2. Patients with significant comorbidities will suffer more, require more treatment, and thus incur more costs.
  3. Another study found almost all patients hospitalized for COVID had comorbidities.
  4. While “only” one in 20 diagnoses were made via a telehealth visit, it is highly likely that percentage will (or already has) increase(d).
  5. Remember – this is based on data through the end of May; you can be sure things have evolved since then. For example, a best guess is 10-20% of those diagnosed with COVID end up hospitalized – but that is a guess, and does not account for undiagnosed cases (which may be several times higher than those diagnosed).

 

Jul
17

COVID Quick Hits Vol. 2

Posted by Joe Paduda on Friday, July 17th, 2020 | Comments

Lots of COVID news this week – here’s the latest.

The bad.

One out of every hundred Americans has been infected with COVID19.

Almost one out of every 25 people infected have died.

People of color are far worse off than white folks.

This racial disparity is pretty much everywhere, in every state, although it is particularly bad in Kansas where Black people account for 6% of the population and 22% of deaths; Michigan – 14% of the population, 41% of deaths; and Missouri – 12% and 36%.

Testing here in the US is still waaaaay behind where it should be. Results often take so long they are all but useless.

Hydroxychloroquine is useless. Or worse.

Despite being touted by the President and others who should have known better, more and more research is proving the drug:

Fortunately the FDA revoked its emergency use authorization for the drug; unfortunately idiots with no science background continue to tout it.

I have written extensively about this over the last four months; here’s

The good

We DO know masks really make a difference.

Fast, cheap, and accurate tests are coming – and they can’t get here soon enough. The paper-strip tests will cost less than $5 and give instant results. While that’s still costly, it is a lot less expensive than the current lab-based tests.

Therapeutic medications appear to be helping treat folks who are infected.

Monoclonal antibodies (taken from the blood of those already infected and maybe from mice) appear to help prevent the disease and treat those who get infected.

A study published last week shows anti-viral drug remdesivir was associated with “improved recovery and a 62 percent reduced risk for death compared with standard care.”

Black people did even better as did those not on a ventilator.

The unknown

We do NOT know if or when a vaccine will be developed and produced in sufficient quantity to inoculate enough of us.

If you’re buying into the White House’s happy talk about a vaccine, take a lesson from the Administration’s early cheerleading for hydroxychloroquine – they were completely wrong. Wait for the science, and ignore the politicians.

What does this mean for you?

Science.  It’s all about the science.