A lack of competition among payers and providers in rural areas means consumers who live there have fewer, more-costly coverage options.
Premiums for silver plans under the Affordable Care Act can be 40% higher or more in rural areas than in urban areas, an analysis of federal data shows.
Urban Institute researchers found premiums were cheaper in 2016 and 2017 for urban silver plans, which cover about 70% of healthcare costs.
The study found that states with the largest premium differences between rural and urban areas in 2017 were Tennessee ($415 urban vs. $601 for rural) and Nebraska ($368 urban vs. $555 rural). In 2016, the greatest gap occurred in Colorado ($282 urban vs. $402 rural) and Nevada ($272 urban vs. $398 rural).
The researchers speculate that the price differential is a function of competition. Even though urban healthcare systems are more expensive, they have larger populations that invite competition and spread the risk, thus lowering premiums.
Rural areas generally have a lower cost of living, but the lack of population density is a disincentive for payers and providers.
"Although many factors go into the cost of coverage, competition among providers seems to be the critical factor driving premiums lower in America's urban centers," said Anne F. Weiss, managing director at the Robert Wood Johnson Foundation, which sponsored the study.
"Less competition among providers in rural areas means consumers are paying more. Therefore, policy solutions should recognize the unique needs of rural communities," Weiss said.
Maggie Elehwany, vice president of government affairs and policy at the National Rural Health Association, says rural Americans often have only one coverage option.
"Since rural patients have no plan choice and are often forced into a plan they can't afford—most purchase a bronze plan with high deductible," Elehwany says. "When they get sick, they can't afford the bill and the provider has to subsidize the cost."
The researchers also found that areas with narrow network Medicaid-managed care plans—which now offer private coverage to low-income residents—or provider-sponsored plans, which are offered directly by a health system or group of doctors instead of a traditional insurance company were associated with significantly lower premiums in 2016 and 2017.
In contrast, areas with Blue Cross Blue Shield health plans featuring wider networks of doctors and hospitals generally had higher premiums in 2016. By 2017, most BCBS plans implemented narrower networks similar to those used by provider-sponsored plans, ultimately decreasing their premiums.
Radiation oncologists are leery of mandatory alternative payment models put forward by HHS, but they'll withhold criticism until they see the proposed model.
Radiation oncologists have been champions of alternative payment models, but not necessarily when they are mandatory.
So, there were mixed reactions when Health and Human Services Secretary Alex Azar strongly suggested that radiation oncologists would soon be placed in a mandatory APM.
"We have some reservations about moving forward in a mandatory fashion and really need to learn more about what the secretary has in mind," says Dave Adler, vice president for advocacy at the American Society for Radiation Oncology.
"Our biggest concern would be going 'full mandatory,' where every radiation oncologist is required to participate in this model on Day One," Adler says. "That may be too much and too fast. But it'd be premature to say we object to mandatory model without having those details."
In a speech earlier this month, Azar signaled a shift in HHS policy when he said his department has "reexamined" last year's decision to pull back on episode payment models before they were launched.
"We intend to revisit some of the episodic cardiac models that we pulled back, and are actively exploring new and improved episode-based models in other areas, including radiation oncology," Azar said. "We're not going to stop there: We will use all avenues available to us—including mandatory and voluntary episode-based payment models."
Adler says Azar's comments were not particularly surprising because he's been talking about mandatory APMs since his confirmation hearings in the Senate last January.
In April 2017, ASTRO submitted a model APM to the Center for Medicare & Medicaid Innovation. Adler says the big question now is how much of that proposal HHS will incorporate into any mandatory APM it rolls out.
"It's probably not lost on them that the radiation oncology community has rallied around this model," Adler says. "We think it's a strong opportunity to improve quality and reduce costs in a way that's meaningful for radiation oncology practices and their patients."
First and foremost, Adler says ASTRO's APM proposal calls for physician autonomy.
"When it comes to the payment incentives, when it comes to quality measures, it's got to be things that are in control of the radiation oncologist," he says. "We don't want them to be held accountable for things outside of their control."
Whatever APM is put forward, Adler says there will be little ramp up time for implementation, which is expected to begin on Jan. 1, 2020.
"A lot of the path that got us here has been driven by Congress through legislation that has frozen key radiation therapy payments for the last couple of years to allow CMS time to work with the community to come up with an APM," Adler says.
"That legislation was extended earlier this spring to go through the end of 2019. A lot of stakeholders, ASTRO included, hope we could have this model up and running before no later than the expiration of that legislative deadline," he says.
Adler says ASTRO has gotten good feedback for its APM model from CMMI.
"We have had every indication that they've looked closely at our model, asked a lot of good questions to understand the model and how radiation oncology practices work, so we've really been impressed with commitment at CMMI to learn about the specialty and our model," he says.
"We want to hear the administration out. We want to see what they had in mind, not only on mandatory but for all aspects of the model," he says. "We know what we've proposed, but we don't know exactly what CMS has in mind so we want to ensure that we have ample opportunity to review all aspects of the model and then to consider the pros and cons and look at mandatory in the context of all aspects."
The for-profit hospital chain says it will sell its four remaining hospitals in the Palmetto State as part of its ongoing strategy to consolidate operations and reduce debt.
Debt-laden Community Health Systems, Inc. announced Monday that it will sell its four remaining South Carolina hospitals to the Medical University Hospital Authority in Charleston, S.C.
Financial terms were not disclosed for the deal, which includes clinical and outpatient services, and is expected to be finalized in the first quarter of 2019.
The acquisition will virtually double the number of hospital beds to more than 1,400 for MUSC.
"This transaction is the first time MUSC has acquired other hospitals," said MUSC board Chairman Charles W. Schulze in a media release.
"The additions will increase the size and scale of the MUSC Health network, and in today's environment, larger, more efficient health care systems can deliver greater value to patients and have a positive impact on population health," Schulze said.
In October, CHS announced that it would sell its two-hospital Mary Black Health System to Spartanburg Regional Healthcare System in South Carolina in a deal that is expected to be finalized by year's end.
Franklin, Tennessee-based CHS has sold or announced the pending sale of 16 hospitals so far in 2018. The company has been struggling since its ill-advised $7.6 billion acquisition of Health Management Associates in 2013.
The four hospitals to be sold to MUSC are:
82-bed Chester Regional Medical Center.
225-bed Springs Memorial Hospital in Lancaster.
396-bed Carolinas Hospital System in Florence.
124-bed Carolinas Hospital System—Marion in Mullins.
The four hospitals were among the planned divestitures discussed during CHS's third quarter 2018 earnings call.
The four hospitals in 2017 combined delivered care through more than 129,000 emergency department visits, 159,000 outpatient visits, 18,800 hospital admissions, and 339,000 clinic visits with physicians, MUSC said in a media release.
In 2017, CHS sold 30 hospitals that CHS executives said were low performing. However, a recent report by Axios challenges that assertion.
Even with the divestitures, CHS remains one of the largest publicly traded hospital companies in the nation and owns, leases or operates more than 100 affiliated hospitals in 19 states.
MUSC includes a 700-bed medical center, a pediatric hospital, a cancer center, and a medical school. When the CHS deal is finalized, MUSC will employ more than 16,400 people across South Carolina.
Roughly 60% of MUSC Health patient care revenues are generated outside of the tri-county area of Charleston, Berkeley, and Dorchester counties.
Facing regulatory headwinds and tensions over expansion plans, Harvard Pilgrim and Partners have suspended merger talks that many skeptics believe would have been difficult to finalize.
Harvard Pilgrim Healthcare and Partners HealthCare have suspended merger talks amid reports that the deal was raising concerns by Massachusetts state officials.
"Now isn't the right time to try to push something like that ahead," Partners CEO David Torchiana told the Boston Globe. "I don’t think either organization is sure that it's something that’s actually possible to achieve . . . in this environment right now where there’s such intense scrutiny of every move."
Michael Carson, president and CEO of Harvard Pilgrim Health Care, said in a statement to HealthLeaders Media that: "Our discussions with Partners HealthCare have always been focused on exploring ways we can improve and enhance the patient experience while helping to control costs."
"We continue to evaluate opportunities for collaboration with Partners on this important mission," Carson said.
The talks, which were first reported on sometime last spring, were done largely out of the limelight, but it quickly brought the attention of state officials who raised concerns about increased costs of care to patients post-merger.
WBUR, which first reported that the talks were off, cited unnamed sources who said Partners suspended talks to focus on internal matters.According to WBUR, tensions were forming within Partners' leadership over two sets of expansion plans that include the acquisition of Care New England in Rhode Island. A proposed partnership with Lifespan is off.
The second expansion plan, involving a collaboration with Harvard Pilgrim, raised questions about the complexity of having doctors and insurers manage care and costs together, WBUR reported.
Throughout the negotiating process, observers had said the deal would have to clear some high hurdles.
Kristina Minnick, professor of finance at Bentley University, told the Boston Herald that the federal government is not receptive to large, horizontal mergers in the healthcare sector.
"I think it’s going to be really difficult for the deal to go through," Minnick told the Herald. "Unless they’re able to show that they can offer better service at a lower price — which will be difficult — I doubt at the state level Massachusetts and the attorney general will let it pass."
Even Massachusetts Gov. Charlie Baker, the former CEO at Harvard Pilgrim, had expressed skepticism about the success of the deal.
"There are three really big questions. The first one is what’s the strategic rationale behind it and is it legitimate and justified," Baker told the Herald. "The second is what's it going to do to people's ability to access healthcare here in the commonwealth and the third question is what's it going to do with respect to the cost of health care."
The Health and Human Services Secretary has launched a string of ambitious and aggressive initiatives, but he's also careful not to get too far in front of President Donald Trump.
It's been another interesting week of pronouncements from Health and Human Services Secretary Alex Azar.
In the past month, Azar has called for mandatory transparency in drug pricing, floated the idea of linking Medicare Part B drug prices to an international index, and strongly suggested that mandatory alternative payment models for radiation oncology and other subspecialties are on their way.
On Wednesday, Azar said the federal government will lead efforts to develop care models that factor in social determinants of health.
"Social determinants would be important to HHS even if all we did was healthcare services, but at HHS, we cover health and human services, all under one roof," Azar said in his prepared remarks. "In our very name and structure, we are set up to think about all the needs of vulnerable Americans, not just their healthcare needs."
At first glance, Azar's advocacy for an expanded or aggressive role for HHS in healthcare delivery sound odd coming from a conservative Republican, private sector champion, and former president of Eli Lilly USA.
However, Paul Keckley, managing editor of The Keckley Report, says Azar "is staying safely within the guardrails."
"I haven't seen anything that shocked me," Keckley says. "His view on the alternative payments and applying global pricing index to drugs are the two most edgy things that he's done so far."
"These are definitely more aggressive strategies than what his predecessor Tom Price would have put on the table, sure. But I don't see anything that would be viewed as really a stretch, such as we're going to get wholeheartedly behind drug importation," Keckley says. "He's holding those cards, seeing if the industry is going to comply, and politically that's probably the sensible thing to do right now."
Keckley says Azar is an experienced pragmatist who knows he can't get out too far ahead of the president.
"He won't do anything to make the private sector think he's not driven by a private system view of the world," he says. "He's knows he's carrying baggage from Eli Lilly, and he's got to do something with drugs prices and he knows that one wins votes, so he's going to push the envelope on that as much as he can."
Azar's proposals on drug pricing are not a surprise to the pharmaceutical industry, Keckley says, and he sees the industry working with HHS because it knows that drug pricing will be a big issue in the 2020 elections, and that the Trump administration needs a plan.
"If you think of it from the drug companies' vantage point, if you're going to be subject to increase price pressure and if that's going to be an issue in 2020, then they want to have some control over how it's implemented," he says. "All this transparency stuff is interesting, but it doesn't break the backs of the PhRMA companies, and I'm sure those 33 companies had input."
As for Azar's speech this week on HHS's enhanced role with social determinants, Keckley says he's just "piggybacking on an industry discussion."
"Where he's talking about allowing housing be reimbursed and Medicare Advantage being able to code for nutrition, I don't think he's taking a lot of risk moving that direction," Keckley says. "He's signaling that this is the right direction. He's telling us that HHS is not going to lead in this process, but we are going to create some kind of regulatory swim lanes for you to play in."
In 2019, Keckley says Azar will likely focus on drug pricing, but he may be forced to examine hospital consolidation and its effect on the cost of care delivery.
"The numbers of consolidations have shrunk a little, but they're bigger deals now," he says. "They're being sold to communities as eliminating duplication of services and reducing redundancies to save money, and yet that hasn't been the result."
The next big hurdle for the mega-merger will be in New York, where regulators have threatened to block the deal unless the companies agree not to raise premiums and submit their PBM to state oversight.
California has approved CVS Health Corp.'s $69 billion acquisition of Aetna Inc.
The go-ahead came this week after the two companies agreed to pump $240 million into the California's healthcare infrastructure and guarantee against premium hikes to cover the cost of the deal.
"The Department thoroughly examined this merger and determined enrollees will have continued access to appropriate healthcare services and also imposed conditions that will help increase access and quality of care, remove barriers to care and improve health outcomes," Shelley Rouillard, director of California's Department of Managed Health Care, said in a media release.
The go-ahead marks another big hurdle cleared for a merger that many observers believe could fundamentally change healthcare delivery in the United States and pose a direct challenge to traditional care providers.
The U.S. Department of Justice approved the deal inOctober, with the stipulation that Aetna sell its Medicare Part D business to WellCare Health Plans.
CVS said earlier this month that it hopes to complete the deal by Thanksgiving.
However, one of the last major state regulatory hurdles is in New York. That state's Department of Financial Services is expected to issue a decision on the merger in the coming weeks, after threatening last month to block the merger unless the companies agreed not to raise premiums and to submit their pharmacy benefits manager to state regulation.
CVS Health and Aetna did not return requests Friday for comment.
In addition to their pledge not to raise premiums to cover the acquisition costs, CDMHC said CVS and Aetna agreed to "keep premium rate increases to a minimum," and to invest nearly $240 million in California's healthcare delivery system.
This includes:
$166 million to support California's healthcare infrastructure and employment, including building and improving facilities in the state.
$22.8 million to increase the number of providers in underserved by funding scholarships and loan repayment programs.
$22.5 million to support joint ventures and accountable care organizations, and value-based pay for performance to improve clinical quality, resources and patient experience.
$6 million to support efforts to provide accurate and accessible provider directories, and standardize and improve the quality of encounter data.
$5.55 million to expand the California Quality Collaborative Practice Transformation Initiative to increase access and healthcare quality for underserved areas.
$3 million to provide free dental care to underserved patients.
$3 million in consumer assistance to seniors, people with disabilities, and Medi-Cal/Medicare dual eligibles.
$3 million to expand Project Health to CVS Pharmacy locations across California, which provides free preventative services.
Improve enrollee care through rating and oversight programs under the DMHC and Office of the Patient Advocate, including a $3 million investment to that end.
$1.65 million to integrate emergency medical services providers into community opioid treatment and prevention programs, and to expand a pilot community paramedic project.
$1.5 million to support programs that address the social determinants of health.
$750,000 to implement programs to help address the opioid crisis. CVS will also stock Naloxone in all CVS pharmacies in California and provide training on the drug.
The 168-bed community hospital was lauded for its consistent placement in top national rankings for quality and patient safety, financial stewardship, and engaged leadership.
Memorial Hospital and Health Care Center in Jasper, Indiana has been named one of five winners of the 2018 Malcolm Baldrige National Quality Award.
Memorialwas the only hospital selected for the prestigious award, which "recognizes exemplary organizations and businesses that demonstrate an unceasing drive for radical innovation, thoughtful leadership, and administrative improvement," the U.S. Department of Commerce said in a media release.
A person who answered the telephone at Memorial said the hospital would issue a statement "probably in a day or so."
Generally considered to be one of the most prestigious awards offered by the federal government, Baldrige winners are evaluated in seven areas: leadership; strategy; customers; measurement, analysis and knowledge management; workforce; operations; and results. The award was established by Congress in 1987 and there have been 123 winners.
Organizations can compete in one of six categories: manufacturing, service, small business, healthcare, education and nonprofit (including government agencies).
Memorial is a168-bed community hospitalthat is sponsored by the Sisters of the Little Company of Mary. The Jasper-based health system includes 32 outpatient primary and specialty care clinics and medical practices. The health system provides care for 6,600 inpatients and 254,000 outpatients through 29,000 emergency department visits annually.
Among the many accolades cited for the award, the Baldrige committee noted that Memorial has consistently received top scores from the Centers for Medicare & Medicaid Services and private rating entities in the areas of value-based payment performance, and patient safety, with no cases of pressure ulcers, central line-associated bloodstream infections since 2016, and no methicillin-resistant staphylococcus aureus since 2015.
Financially, Memorial was lauded for improving its cash on hand from 180 days in 2016 to 215 in 2018. In addition, Memorial's long-term debt as a percentage of capital improved from approximately 25% in FY2016 to approximately 21% in FY2018, and its days in accounts receivable improved from 48 days in FY2017 to 41 in FY2018.
Memorial's leadership was singled out by the Baldrige committee for embracing "a faith-based culture focused on 'Radical Loving Care' and the core competency of 'Being for Others.'
"Enterprise-wide, members of the workforce are enthusiastic about the distinctive culture and are empowered to meet their patients' medical, emotional, and spiritual needs," according to the National Institute of Standards and Technology, which oversees the award.
NIST also noted Memorial's senior leadership "encourage frank, two-way communication and engagement of MHHCC's workforce, providers, patients, and other customers."
"Their extensive efforts include senior leaders regularly visiting departments; an open-door policy; hand-written, thank-you cards; the 'Really Impressive Moments' recognition program; the Friday Facts email by the CEO, which lists his personal cell phone number; and Patient Family Advisory Councils," NIST said.
In addition to Memorial, the award was given to two educational institutions, an organ donor group, and a project management firm.
"These awardees are inspiring in so many ways," said Walter G. Copan, Under Secretary of Commerce for Standards and Technology at NIST.
"Each honoree strengthens our economy through its organizational excellence and positive impacts for its customers, students, patients and employees," Copan said. "They exemplify the American spirit in action and are role models for success in business and commerce."
Federal prosecutors had alleged that Atrium's restrictions on coverage options prevented insurers from promoting cost-effective healthcare services. Atrium admits no wrongdoing.
Atrium Health has agreed to end what the federal government said are anticompetitive steering restrictions in contracts between commercial health insurers and its providers in the Charlotte, North Carolina service area, the Department of Justice announced.
If the settlement is approved by a federal judge, it will end two years of civil antitrust litigation that challenged Atrium's alleged use of steering restrictions that prevented health insurers from promoting cost-effective healthcare services to consumers, DOJ said.
"Competition encourages healthcare providers to reduce costs, lower prices, and increase quality," said Makan Delrahim, Assistant U.S. Attorney General for the Antitrust Division. "Atrium's steering restrictions interfered with the competitive process, resulting in fewer choices and higher costs for consumers."
DOJ claimed that Atrium, the dominant provider in Charlotte, used its market power to restrict health insurers from encouraging consumers to choose healthcare providers that offer better value. The restrictions also constrained insurers from providing consumers and employers with information regarding the cost and quality of alternative health benefit plans, DOJ said.
Atrium issued a statement noting that there was "no admission on the part of Atrium Health of wrongdoing in this settlement agreement, and Atrium Health did not violate the law. In addition, Atrium Health will not pay any penalties or fines."
"The language in question is from contracts created as long ago as 2001 and was originally added to ensure Atrium Health was provided an equal opportunity to compete for patients," Atrium said. "As the healthcare landscape continues to rapidly evolve, Atrium Health's contracting language has also evolved to reflect current healthcare practices."
Atrium is North Carolina's largest healthcare system and one of the largest not-for-profit healthcare systems in the United States. Atrium's flagship Carolinas Medical Center is the largest hospital in North Carolina. Atrium also operates eight other general acute-care hospitals in the Charlotte area and owns, manages, or has strategic affiliations with more than 40 hospitals in the Carolinas.
In 2017, Atrium's owned, managed, and affiliated hospitals and other healthcare providers earned net operating revenue of close to $10 billion.
Branded prescription drugs were 17% of total prescriptions filled by Blue Cross Blue Shield commercial plans in 2017, but they accounted for 79% of the payers' $100 billion drug spend.
Spending on branded specialty and patent-protected drugs is up 4% since 2016 and continues to outstrip spending on generic drugs by nearly $80 billion a year, the Blue Cross Blue Shield Association says in a new report.
Nationally, BCBS commercial plans spend more than $100 billion each year on drugs, which account for 20% of overall healthcare spending for the payers. Branded prescription drugs represent 17% of the total prescriptions filled by BCBS commercial plans, but they account for nearly $80 billion of the total spend, BCBSA said.
"The report findings underscore the underlying cost drivers in the prescription drug market and identify potential surges in overall drug costs in the future," Maureen Sullivan, chief strategy and innovation officer for BCBSA, said in remarks accompanying the study.
The report reviews eight years of drug use, price changes and overall spending to determine why the rising use of generic drugs has been unable to contain the overall cost increase for branded prescription drugs.
The study found that:
More expensive branded prescription drug spending is up 4% since 2016. Branded prescription drugs are 17% of total prescriptions filled but account for 79% of overall drug spending at $79.5 billion.
Steady annual increases in branded patent-protected prescription costs drive the majority of spending in the branded drug space, growing 5% in the past year.
The growing market share of inexpensive generic drugs continued to slow the increase in total drug spending. While generic drug spending has declined 3% since 2016, it hasn't kept pace with the rapid rise in specialty branded drugs.
Horizon Blue Cross Blue Shield of New Jersey said spending on branded specialty drugs used to treat complex, chronic health conditions grew by 62% between 2013 and 2017. Those specialty drugs represent no more than 6% of prescriptions issued for branded drugs, but account for between 32% and 44% of the total spend on branded drugs.
Horizon CEO Kevin P. Conlin says prescription costs account for 29% of Horizon's total healthcare spending and are rising faster than any other component of claims, which he said is driven by the substantial increase in spending on these branded specialty drugs.
"Horizon has devoted considerable resources to programs designed to manage and contain overall drug spending, but this challenge requires that everyone who plays a role in health care join the effort to lower drug costs," Conlin said.
"Just as we are collaborating with our value based providers to improve quality and lower costs, effectively addressing the cost of prescription drugs requires a multi-stakeholder approach that includes pharmaceutical companies, policymakers, payers, doctors, employers, and patients," he said.
BCBSA published a list of the top five medications by spending in 2017 across the BCBS system, the top three of which are used to treat autoimmune disorders.
Humira
Remicade
Enbrel
Novolog
Neulasta
The Health of America Report is a collaboration between BCBSA and Blue Health Intelligence, and relies on a claims database to find trends in healthcare affordability and access.
Models show that personalized patient drug regimens can reduce treatment times and save money without jeopardizing efficacy.
The high-cost, highly effective 12-week drug regimen used to treat and often cure hepatitis C was reduced by up to six weeks for some patients without compromising outcomes, a new study shows.
"There's a potential to save up to 20% of the costs of hepatitis C drugs," said study co-first author Harel Dahari, a researcher at Loyola Medicine.
In addition to cutting costs, Dahari said shorter treatment regimens would help hepatitis C patients with limited health insurance benefits.
The Centers for Disease Control and Prevention estimates that about 2.5 million Americans have hepatitis C, and that the disease accounts for more than 18,000 deaths annually, although that number is believed to be underreported.
A highly effective array of new drugs that cure more than 90% of hepatitis C patients can cost more than $50,000 per patient. However, asnew drugs enter the market, such as oral medications called direct acting anti-virals, prices are continuing to drop.
The Loyola-led study, presented this week during the annual meeting of the American Association for the Study of Liver Diseasesin San Francisco, used modeling-based response-guided therapy to reduce treatment times for half the 22 patients in a control group.
After the patients had undergone treatment for a few weeks, researchers measured how much hepatitis C virus levels had decreased. They used mathematical modeling to estimate how long it would take to completely eliminate the virus.
The modeling predicted that treatment could be shortened to 10 weeks for one patient, eight weeks for eight patients, and six weeks for two patients. The remaining 11 patients needed the standard 12-week regimen.
Within the control group, 21 patients remained virus-free. The only patient who relapsed had the most difficult-to-treat form of the hepatitis C virus, known as genotype 3.
The proof-of-concept pilot study showed that using response-guided therapy to reduce treatment times is feasible. To validate the results, a large multicenter trial is underway in Israel.
The study was supported in part by the National Institutes of Health and Clalit, a health service organization in Israel.
