Navvis Right Now: Issue 13 – March 2, 2019

March 2, 2019

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Pharma CEOs Survive Senate Grilling with Few Concessions

Senate Finance Committee lawmakers extracted minimal policy concessions from seven top pharmaceutical CEOsTuesday over hours of grilling. And they aren’t likely to relieve tension with hospitals and insurers over drug prices. The CEOs broadly supported HHS’ recent proposal to remove Medicare Part D safe harbor protections for pharmacy benefit manager rebates—but they were less vocal about promising to lower their prices should it be finalized. Some indicated they would want the commercial sector to follow suit, raising the specter of congressional action that insurers would oppose. Even the hearing’s most intense moments didn’t quite hit the mark. Sen. Bill Cassidy (R-La.) brandished two bottles of over-the-counter medication — Pepcid and ibuprofen. He then castigated a drug manufacturer for combining the two medications into a single drug that costs $2,300 for a 90-day supply. “Part of the problem we have here is the marketplace isn’t working because there’s not enough transparency,” Grassley said. “There doesn’t need to be this much secrecy in it.” After the hearing, Grassley said he didn’t have specifics on forthcoming legislative proposals, including on Part D.

Takeaway: There is bi-partisan support to lower drug prices and increase price transparency.  However, there is no agreement on how to accomplish the goal and the hearings did not reveal a new way to address pricing. The pharmaceutical executives largely dodged the difficult questioning from the panel’s mostly staid members. Stat summed it up well when they reported ‘the executives pivoted, again and again, to well-worn lines of defense about the promise of innovation and new cures.’ Expect the discussions to continue in Washington but no new direction or proposed legislation to stem from these hearings.

Louisiana Looking for Now Medicaid Managed-Care Companies

On Monday, Louisiana issued a request for proposals for managed-care companies hoping to serve the state’s more than 1.5 million Medicaid members under new contracts beginning in January 2020. Louisiana will award contracts to up to four managed-care companies, down from five insurers today. Those five, whose current contracts will expire at the end of this year, are Aetna, AmeriHealth Caritas, Anthem’s Healthy Blue, Centene’s Louisiana Healthcare Connections and UnitedHealthcare. The new contracts will last for three years with an option to extend for an additional two years. The contracts are worth a total of roughly $12 billion.  The Louisiana Department of Health said it is looking for managed-care companies focused on improving the health of populations while also cutting costs. “Our managed care organizations are expected to demonstrate innovation. There should be an increased focus on health equity and social determinants of health,” Dr. Rebekah Gee, secretary of the Louisiana Department of Health. The department said it increased requirements on health plans to integrate physical and behavioral health services and improve access to primary care. Taking a cue from North Carolina’s revamped Medicaid program, the request for proposals also asks health plans how they have used data to identify and address patients’ social determinants of health (SDoH) and how they can apply that experience to Louisiana’s Medicaid population. The department also asks health plans for ways to implement value-based payment arrangements with providers in the state.

Takeaway: Louisiana is wise to take North Carolina’s cue to address SDoH. Addressing social determinants is at the core of North Carolina’s Medicaid overhaul for their more than 2 million members enrolled in Medicaid. Their goal is to make taking care of patients’ social and environmental needs a sustainable, everyday part of a healthcare organization’s workflow. The state invested six months in building a standardized tool for physicians or case managers to use to screen patients for their SDoH and is piloting it in 40 or 50 different settings.  The state is identifying all of the state’s community resources and building a community network resource platform. Once a patient’s social determinants are pinpointed, providers can connect that patient to organizations for help by creating a referral in the same way the provider would refer the patient to a specialist. In North Carolina, managed care organizations are required to use the workflow and referral platform, which is free for providers. North Carolina did not participate in the Medicaid expansion, so they have limited dollars and have a goal to move 50% of their managed Medicaid payments into an alternative payment model in 2020.

Medicare for All Act of 2019

On Wednesday, House Democrats rolled out an ambitious proposal to extend Medicare to all Americans, eliminate private insurance and drastically overhaul reimbursement for doctors and hospitals. Rep. Pramila Jayapal (D- Wash.) said the goal is to completely overhaul the U.S. healthcare system and convert it to a government-run entity. It would also drastically revamp how hospitals and doctors get reimbursed by Medicare. Each hospital would receive an annual prepaid budget to cover all healthcare costs for the facility for the given year. HHS would appoint regional directors that would oversee all hospitals and doctor offices in a specific region. Nursing homes, health centers, home health agencies and independent dialysis facilities would also get an annual budget. Doctor offices would still be paid under a fee-for-service model or could opt to get a salary from a hospital or another provider that gets a global budget. The legislation has been highly debated among Democrats running for president in 2020. No votes are scheduled, and it’s unclear whether the bill will come up for a vote in the Democratic controlled House.

Takeaway: There is not enough support for or funding for this Bill to move forward. Expect to see continued support and headlines for various Medicare for All proposals through the presidential election. The Medicare for All Act of 2019 is estimated to cost $30 Trillion and would ban private insurers from offering any benefits that duplicate the benefits covered by Medicare. (Under the proposed bill, only the VA and tribal health would remain and the VA.) Approximately 1-2 million people would be out of work if the legislation becomes law because of the elimination of most private insurance. KHN referenced it as ‘Seismic’ disruptions to the system and offers a good interactive look-up tool here of the Medicare for All and Public Plan Proposals.

CMS Releases Hospital Star Ratings and Considers Tossing Hospital Star Ratings Methodology

CMS is considering scrapping the model it uses to assign hospital star ratings, signaling a big shift from the agency’s stance just seven months ago. In conjunction with releasing new ratings on the Hospital Compare website Thursday for the first time in nearly 15-months, the agency also opened a public comment page for stakeholders to provide feedback on potential changes to the ratings program. CMS is considering removing the latent variable model used to assign hospitals ratings and considering assigning weights to each of the measures used in the ratings instead of allowing a model to assign the weights. Yale New Haven Health Services designed the model, and it has received criticism from the beginning. The American Hospital Association said re-evaluating the latent variable model is critical to making any meaningful changes to the star ratings.

Takeaway: No changes will take place over the next year.  CMS is looking at “long-term” considerations that wouldn’t be applied until 2020 quality reporting and beyond. CMS acknowledges opportunities to improve the ratings system and stands by the current star ratings as a helpful tool for consumers. In the meantime, it’s recommended that you lookup the star ratings for the health systems since this is the rating tool consumers will use.

These are the World’s Healthiest Nations

Spain just surpassed Italy to become the world’s healthiest country. Bloomberg released its 2019 edition of the Healthiest Country Index, which ranks 169 economies according to factors that contribute to overall health.. Four additional European nations were among the top 10 in 2019: Iceland (third place), Switzerland (fifth), Sweden (sixth) and Norway (ninth). Japan was the healthiest Asian nation, jumping three places from the 2017 survey into fourth and replacing Singapore, which dropped to eighth. Australia and Israel rounded out the top 10 at seventh and 10th place. Researchers say eating habits may provide clues to health levels enjoyed by Spain and Italy, as a “Mediterranean diet, supplemented with extra-virgin olive oil or nuts, had a lower rate of major cardiovascular events than those assigned to a reduced-fat diet,” according to a study led by the University of Navarra Medical School.

Takeaway: The index grades nations based on variables including life expectancy while imposing penalties on risks such as tobacco use and obesity. It also takes into consideration environmental factors including access to clean water and sanitation. The U.S. moved down from 34 to a 35 ranking in the latest results.


Disclaimer: This blog includes content gathered from other published sources, not authored by Navvis, and is presented as information only. As with any news story, this information may have changed since its publication date. Commentary included with the information is the opinion of its authors, and is not indented to provide legal or regulatory advice or guidance to the reader. Navvis does not represent the accuracy of or assume liability for the content presented herein.