Politics in health care: insights from an expert

By Paul Wilson - Since its inception and implementation in 2010, the Affordable Care Act (ACA), also known as Obamacare, has been a contentious political issue in the U.S. Republicans and Democrats have debated the issue, and how it should be handled, in almost every major election. 2024 is no different. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Shift Towards the Center: Both parties appear to be moving toward more moderate positions on health care. Former President Trump has softened his stance on repealing the Affordable Care Act (ACA), indicating a focus on improving it rather than eliminating it. Vice President Harris has similarly distanced herself from "Medicare for All," instead supporting an enhanced ACA, reflecting a more centrist approach for the 2024 election.

2. Differing Party Priorities: Health care has traditionally been a prominent Democratic issue, with the party pushing for ACA enhancements and even Medicare for All. In contrast, Republicans have been more focused on offering alternative coverage options outside ACA norms, though their messaging on health care this cycle has been notably limited compared to previous elections.

3. Influence of Running Mates: The addition of Tim Walz and J.D. Vance as running mates has subtly shifted health care discussions toward the middle. Walz, with a history of progressive yet balanced policies in Minnesota, might bring Harris’s platform slightly closer to the center. Vance, less aggressive on "repeal and replace" than Trump, could similarly temper the Republican stance, potentially appealing to a broader voter base.

Barron's: CVS, UnitedHealth and Cigna’s PBMs Were Big Players in the Opioid Crisis

By Wendell Potter - A recent Barron’s exposé detailing pharmacy benefit managers' (PBMs) backroom dealings in the opioid crisis should be read by everyone. PBMs, which most Americans encounter only indirectly through their health insurance plans, have quietly amassed enormous power over which medications we have access to — and how much they cost. Read Full Article…

HVBA Article Summary

1. Profit-Driven Incentives of PBMs: Major Pharmacy Benefit Managers (PBMs) — CVS Caremark, UnitedHealth’s Optum Rx, and Cigna’s Express Scripts — earned over $400 million in rebates from Purdue Pharma during the opioid epidemic, prioritizing profits over public health by incentivizing higher sales of OxyContin.

2. Lack of Transparency and Accountability: Despite claims of passing rebates to clients, PBM negotiations remain opaque, raising doubts about their commitment to affordable healthcare. Ongoing lawsuits reveal their failure to address the opioid crisis, as they continued to demand higher rebates amid the epidemic.

3. Implications for Future Drug Pricing: The opioid crisis highlights potential future drug pricing scandals if PBMs prioritize financial incentives over medical necessity. Without greater oversight, PBMs will maintain significant influence over drug pricing and availability, endangering public health.

Growing Number of Denials Ding Community Health Systems’ Earnings, Outlook

By Geert De Lombaerde - Community Health Systems Inc. has become the latest to take a tumble during the never-ending tussle between payers and providers. Read Full Article… 

HVBA Article Summary

1. Significant Financial Impact: CHS experienced a substantial decline in share value, losing nearly a third of it on October 24 and 25, following a reported net loss of $355 million in the third quarter, significantly exacerbated by increased claims denials from insurers and the financial fallout from recent hurricanes.

2. Ongoing Claims Denials Issue: The company's CFO, Kevin Hammons, highlighted a troubling trend in rising claims denials, which has become more pronounced as patients seek previously deferred treatments. CHS's appeal success rate for these denials stands at about 25%, prompting management to enhance their support services for appeals.

3. Industry Context and Outlook: The challenges faced by CHS in claims denials reflect a broader industry issue, as noted by HCA Healthcare's CFO, who acknowledged similar denial trends but reported a relatively stable impact on their results. Despite the challenges, CHS executives remain optimistic about reaching agreements with insurers to mitigate these issues moving forward.

Hospital price transparency: Is it pushing prices down?

By Allison Bell - The federal hospital price transparency rules adopted in 2021 have been doing more to cut prices than to spur the cheapest hospitals to raise their rates, according to analysts at Turquoise Health. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Price Trends Among Hospitals: The analysis by Turquoise revealed that from December 2021 to June 2024, hospitals in the bottom 25% for service rates increased their prices by an average of 3.4% per year, while those in the top 25% reduced their prices by an average of 6.3% per year. Hospitals in the middle 50% experienced a more modest price reduction of 1.1% per year.

2. Impact of Price Transparency: The findings support the notion that hospital price transparency can help keep prices lower in the short term rather than empower hospitals to negotiate higher rates. This contrasts with some economists' concerns that providing detailed price data could inadvertently strengthen hospitals' bargaining positions.

3. Future Implications for Healthcare Pricing: As hospitals continue to enhance access to price data, the analysis suggests that outpatient services may see more price convergence compared to inpatient services. In the long run, competition among providers may shift, with some focusing on price competitiveness while others maintain higher prices based on their quality reputation.

Here's where Harris and Trump stand on three big health care issues

By Ryan Levi - As the 2024 election heads into its final weeks, the direction of policies affecting the health of millions of Americans is at stake. Read Full Article…

HVBA Article Summary

1. Medicare Drug Price Negotiations: The Biden-Harris Administration achieved significant progress by allowing Medicare to negotiate drug prices, projected to save $7.5 billion starting in 2026. However, congressional Republicans may seek to repeal this authority, citing concerns over drug innovation. Vice President Harris advocates for accelerated negotiations, while former President Trump has not clarified his stance on the negotiations or potential repeal.

2. Affordable Care Act Subsidies: Enhanced subsidies under the Affordable Care Act, which currently benefit millions, are set to expire in 2025. Vice President Harris supports making these subsidies permanent, potentially costing $335 billion over the next decade. In contrast, many Republicans argue for letting the subsidies expire, citing issues of fraud. The future of these subsidies will significantly impact millions of Americans relying on ACA coverage.

3. Access to Medication Abortion: Medication abortions, primarily using mifepristone and misoprostol, account for nearly two-thirds of abortions in the U.S. The Biden administration has expanded access through telehealth, while Trump’s position remains uncertain, with some proposals suggesting potential restrictions on mifepristone. The outcome of the election could drastically alter access to medication abortions, highlighting the differing priorities between the candidates.

The Costly Failures Of Medicine’s Middlemen

By Robert Pearl, M.D. - The American medical system has become undeniably complex, a far cry from the days when doctors made house calls and patients paid directly for care. Read Full Article…

HVBA Article Summary

1. Rise of Healthcare Middlemen: As the U.S. healthcare system evolved into a complex industry dominated by high costs and intricate procedures, intermediaries like pharmacy benefit managers (PBMs) and insurance brokers emerged to help patients and providers navigate this complexity. Initially, these middlemen offered valuable services such as billing management and drug price negotiations.

2. Misaligned Incentives and Inefficiencies: Over time, many of these intermediaries have developed practices that prioritize profit over patient care, contributing to rising healthcare costs. For instance, PBMs often accept rebates from pharmaceutical companies that lead to higher drug prices, while brokers and administrative service organizations (ASOs) continue to recommend traditional, expensive insurance plans, neglecting more innovative and cost-effective options.

3. Need for Reform and Transparency: To address the inefficiencies created by these middlemen, there is a call for legislative changes, including the transparency of PBM rebate structures and promoting value-based insurance models through brokers. By realigning incentives and fostering partnerships with accountable care organizations, the healthcare system can potentially lower costs and improve care quality for patients.

Cigna, Humana rekindle merger talks

By Michelle F. Davis and John Tozzi - Cigna Group has revived efforts to combine with its smaller rival Humana Inc. after merger talks fell apart late last year, according to people familiar with the matter. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Potential Merger Talks: Humana and Cigna, two major health insurance companies with a combined market value exceeding $125 billion, are reportedly in the early stages of informal discussions about a potential merger. This could result in one of the largest deals in the health insurance sector.

2. Financial Pressures and Strategic Moves: Humana is facing significant financial challenges due to rising Medicare costs and declining market value, leading to a 42% drop in stock this year. Meanwhile, Cigna is looking to finalize the sale of its Medicare Advantage business, which may help mitigate antitrust concerns in any potential merger.

3. Regulatory and Market Context: Both companies are navigating a complex regulatory environment, with ongoing federal pressure to control Medicare costs. Humana's recent setbacks in Medicare quality ratings pose a risk to its revenue and stock performance, influencing its negotiation position and future strategies in the insurance market.