Sweeping changes to Medicare Advantage: How payers could respond

By Gabe Isaacson , Cara Repasky, Dan Jamison, Emily Pender, and Sonja Pedersen-Green - The Medicare ecosystem is facing a series of simultaneous challenges, disruptions, and opportunities that add up to one certainty: this market will look meaningfully different in the years ahead. Medicare Advantage (MA) is projected to be the line of business that drives the most profit for payers in 2026, even while headwinds are emerging in the Medicare program. Read Full Article…

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1. Demographic shifts: The aging population is changing the profile of Medicare beneficiaries, with seniors aged 75 and older projected to grow as a proportion of all seniors from 2020 to 2030. This shift requires payers to adapt their plans and offerings to better match the evolving health needs of these older members. Payers will need to develop new capabilities in care management, social determinants of health (SDoH), and health equity to address the increased clinical burden associated with an aging population.

2. Regulatory environment: The Medicare Advantage program is undergoing significant regulatory changes that will impact payers. These changes include rate decreases, risk adjustment modifications, adjustments to Star ratings, and changes to Part D plans. Payers need to respond to these changes with agility and adaptability to mitigate the impact on their operations and revenue. The magnitude of these regulatory changes poses a significant test for payers.

3. Shifting member preferences: Medicare beneficiaries' preferences for engagement with MA plans are changing, with a growing preference for digital engagement and seamless, customer-centric experiences. Payers need to adapt to these changing preferences by expanding their digital engagement capabilities, utilizing technology to improve member experiences, and delivering personalized engagement plans. Meeting member preferences and delivering a distinctive omnichannel experience will be crucial for payer retention and competitive differentiation.

Can price transparency drive down health costs? The jury is still out

By Paige Minemyer - Price transparency has been a key focus for policymakers looking to address rising health costs, but experts say breaking through that black box won't solve the problem wholesale. For example, providers and health plans are both required under federal regulations to post their prices online. However, provider compliance has been spotty, and insurers' data releases have proven difficult to use. Read Full Article… 

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1. Incomplete compliance and difficulty in utilizing released data: Federal regulations mandate that both healthcare providers and insurers must disclose their prices online. However, compliance from providers has been inconsistent, and the data released by insurers has proven challenging to use effectively.

2. Legislative efforts to enhance regulations: Bipartisan legislation is being proposed to strengthen these regulations further. One example is the requirement for insurers to present the data in a more easily accessible format. However, these policies are still in the process of being passed by Congress.

3. Need for comprehensive data and addressing provider consolidation: Many employees struggle with the affordability of employer-based coverage due to high prices, which are exacerbated by limited access to pricing information. The authors suggest that a national claims database could offer benefits such as increased data visibility, standardization, and comprehensiveness. However, skeptics argue that price transparency alone may not be sufficient to address the underlying factors driving healthcare costs, such as a complex system and geographically dispersed workers. Additionally, there are efforts to increase transparency regarding pharmacy benefit managers (PBMs) and third-party administrators (TPAs), who have limited transparency in a consolidated market, potentially driving up costs. The authors emphasize that transparency is a means to an end and that addressing unreasonable provider prices requires public policies that leverage available data.

Humana, Elevance, Centene downgraded days before second-quarter earnings kickoff

By Rebecca Pifer - Major payers are being downgraded by investment banks and research firms in advance of their earnings season, with analysts citing pricing and regulatory uncertainty in Medicare Advantage in addition to cost pressures in the commercial market. On Wednesday, Wolfe Research downgraded both Elevance Health and Centene to peer perform from outperform. Late last week, J.P. Morgan downgraded Humana to neutral from overweight. Read Full Article…

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1. Payers are experiencing new financial pressures after benefiting from deferred healthcare utilization during the pandemic. The second-quarter earnings of UnitedHealth, a leading managed care company, are seen as an indicator of industry performance for the quarter.

2. UnitedHealth and Humana have reported a surge in outpatient utilization among seniors, leading to higher-than-expected spending on patient care. Both companies have factored in increased outpatient utilization in their Medicare Advantage (MA) plan bids for 2024. However, the disclosure of these higher costs has resulted in a decline in managed care company stocks.

3. Analysts are closely monitoring the second-quarter calls of payers for insights into Medicaid redeterminations, disenrollment trends, and potential changes in risk pools and acuity shifts. Centene, the largest Medicaid managed care organization, is particularly exposed to the effects of Medicaid redeterminations and has an unclear path to improve its MA star ratings, which can impact earnings targets. The release of 2024 star ratings by the CMS in October is eagerly anticipated.

How Cone Health reduced its ED volume by 30%

By Advisory Board - In 2021, North Carolina-based Cone Health partnered with Guilford County to open the Guilford County Behavioral Health Urgent Care Center — a 16-bed facility that offers crisis behavioral healthcare, an on-site pharmacy, outpatient services, and peer support. The center was founded to serve community members who are uninsured or enrolled in Medicaid. During the first quarter of 2023, it served more than 12,000 patients. Read Full Article… 

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1. Expanded care team: The Guilford County Behavioral Health Urgent Care Center has successfully addressed the challenge of a limited supply of behavioral health providers by investing in an expanded care team. The center's staff consists of a diverse range of professionals, including psychiatric specialists, behavioral health social workers, licensed peer support specialists, and traditional medical providers. This approach helps fill gaps in care and ensures that patients receive comprehensive and holistic treatment.

2. Cultural humility in diagnosis practices: The center recognized the importance of embedding cultural humility practices to reduce bias and health disparities in diagnosis. Cone Health leaders discovered that Black patients were being diagnosed with schizophrenia at a significantly higher rate than their white counterparts. To address this issue, the center implemented improved assessment tools that encouraged clinicians to critically consider patients' medical histories, avoiding misdiagnoses of conditions such as catatonic events like schizophrenia. As a result, misdiagnoses of schizophrenia decreased, and patients with the condition were connected to appropriate outpatient services and long-acting medications to support their stability.

3. Positive outcomes and reduced disparities: The implementation of these strategies at the Guilford County Behavioral Health Urgent Care Center has yielded significant results. Within the first 18 months of opening, the center achieved a 30% reduction in Cone Health's emergency department (ED) volume. By diverting patients with behavioral health crises to the urgent care center, ED bays have become available for medically complex patients, improving throughput and patient satisfaction. The center has also enhanced provider education, reduced patient misdiagnoses, and worked towards reducing the stigma surrounding behavioral health conditions. Overall, the center's approach has led to improved access to care, reduced disparities, and better outcomes for patients in the community.

Health Care Debt In The U.S.: The Broad Consequences Of Medical And Dental Bills

By Lunna Lopes, Audrey Kearney, Alex Montero, Liz Hamel, and Mollyann Brodie - This is a companion report by the KFF polling group for an investigative project on health care debt conducted by our colleagues at KHN in partnership with NPR. The KFF Health Care Debt Survey was designed and analyzed by public opinion researchers at KFF in collaboration with KHN journalists and editors. The survey provides a broad measure of health care debt in the U.S. and explores the effects of health care debt on individuals and the financial and personal sacrifices they make due to their debt. Read Full Article…

VBA Article Summary

1. The prevalence of health care debt: Health care costs have been a major concern in the U.S., leading to a widespread issue of medical debt. According to a nationally representative survey, four in ten adults currently have some form of health care debt. This debt includes unpaid bills, bills being paid off over time, debt owed to banks or collection agencies, credit card debt, and debt owed to family or friends for medical or dental expenses.

2. Unequal distribution of health care debt: The burden of health care debt is not evenly distributed among the population. Uninsured adults, women, Black and Hispanic adults, parents, and those with lower incomes are more likely to have health care-related debt. Unexpected medical bills are a significant contributor to health care debt, with half of adults vulnerable to falling into debt due to a $500 unexpected medical bill. Even small amounts of debt can have significant financial consequences, and nearly one in five adults with health care debt believe they will never be able to pay it off.

3. Consequences and sacrifices due to health care debt: Adults with health care debt report making sacrifices and enduring substantial financial consequences. Many cut back on household spending, deplete their savings, and experience difficulties paying other bills. Some even delay important life goals such as education or homeownership. Health care debt can also impact access to needed medical or dental care, with some adults being denied care or postponing necessary treatments due to the cost. Those with lower incomes and people of color face disproportionate consequences, such as being contacted by collection agencies and having to make difficult sacrifices to pay off their debt.

Overall, the article highlights the widespread issue of health care debt in the U.S., the unequal distribution of this debt, and the significant financial and access consequences it poses to individuals and families. It emphasizes the need for policy interventions and assistance programs to address the rising costs and burden of medical debt.

5 Ways Health Care Markets are Getting Healthier

By AHIP - Every American deserves access to affordable coverage and care. But health care prices continue to escalate year after year, making coverage and care less accessible for everyone. This challenge can be tied directly to less competitive health care markets. Health insurance providers know that market-based solutions that strengthen competition will improve affordability and access for everyone. Read Full Article… 

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1. Extended Telehealth Access: Congress has extended provisions for telehealth services until 2025, allowing patients to have greater control and choice in their healthcare. Telehealth is more affordable and has helped patients avoid unnecessary tests, saving an average of $118 per visit. AHIP (America's Health Insurance Plans) supports the permanence of these flexibilities.

2. Enhanced Home Care Programs: The federal government has extended the hospital-at-home program until 2025, enabling facilities to provide hospital-level care in patients' homes. This expansion increases patient access and choice while allowing insurance providers to pilot test alternative payment models for home-based acute care. There is also growing support for policies that promote home dialysis, potentially leading to more competitive care choices for patients.

3. Scrutiny of Health Investors: The rising interest of private equity firms in acquiring specialty medical providers and hospitals has raised concerns about potential anticompetitive practices. To address this, more transparency, oversight, and reforms are necessary to prevent exploitation of patients for profit. The Centers for Medicare & Medicaid Services proposed a rule requiring nursing homes to disclose ownership and management information, increasing transparency in healthcare ownership. AHIP commends these efforts and advocates for further action.

Eliminating Racism In Health Care Before And After The Supreme Court’s Affirmative Action Decisions

By Lindsay F. Wiley, Ruqaiijah Yearby, and Seema Mohapatra - Justice Ketanji Brown Jackson began her dissent from last week’s Supreme Court’s affirmative action decision by acknowledging, “Gulf-sized race-based gaps exist with respect to the health, wealth, and well-being of American citizens.” The Court’s 6-3 ruling restricting affirmative action in college admissions will make it harder to close those gaps. Depending on how the decision is interpreted by the lower courts and in subsequent Supreme Court decisions, it could have far-reaching implications in higher education and other realms where institutional leaders and policymakers rely on race-conscious policies to promote health equity. Read Full Article… 

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1. Health care institutions must take responsibility for addressing historical and current racism: The Court's decision does not absolve health care institutions of their responsibility to rectify racism. Institutions responsible for training health professionals must continue developing admissions criteria and curricula that prioritize mission-based diversity and address racism in clinical encounters. This includes ensuring graduates are equipped to serve diverse patient populations and protecting patients and clinicians from racism.

2. Policymakers must navigate the decision's implications for health equity: Policymakers responsible for promoting public health must carefully consider the broader implications of the Court's decision for health equity. They need to understand how the ruling may affect their efforts to address systemic racism in healthcare. This includes evaluating race-based policies aimed at remedying discrimination and considering alternative approaches to achieve health equity while complying with the decision.

3. Admissions policies and educational programs must account for racism and lived experiences: Health professional schools have a particular responsibility to develop admissions policies and educational programs that consider the adversity applicants have faced due to racism. The Court's decision allows leeway for admissions policies that take into account individual experiences of racism and their potential to further the institution's mission. It is essential for health care institutions to create diverse and inclusive environments that prepare graduates to provide high-quality care to diverse patient populations.