The projected savings work under the assumption that state and federal funding would be the same as under the current fragmented financing system.
A final report from California Gov. Gavin Newsom's Healthy California for All Commission claims that that the Golden State could save 40,000 lives and more than $500 billion over the next decade if it adopts single-payer.
"The commission found that, absent a shift to unified financing, California will spend $158 billion more annually on healthcare in 2031, approximately 30% more than baseline spending," the report said. "By contrast, residents, businesses, and government agencies would save money within the first year of the new system — and those benefits would increase over time."
The projected savings work under the assumption that state and federal funding would be the same as under the current fragmented financing system, and that that savings would funnel down to employers and families. The commission suggested that a portion of the projected $500 billion in savings generated by single-payer could be used to fund long-term care services for every resident of California.
Under the commission's framework a "unified financing system" would:
Provide universal entitlements for all Californians for a standard package of healthcare services that could include long-term care support and services, which would relieve the growing burdens on millions of families;
Allow no variance for entitlements based on age, employment status, disability status, income, immigration status, or other characteristics; and
Eliminate distinctions among Medicare, Medi-Cal, employer-sponsored insurance, and individual market coverage.
The report said the next big step for single-payer would be to engage the federal government to set the parameters for funding and undertake steps for legislative approval in California. However, the most-recent attempt to advance a single-payer bill in the California Assembly stalled in January after the bill's sponsor -- Assemblymember Ash Kalra (D-San Jose) -- conceded he didn’t have the votes.
As for the fate of commercial health plans, the report offers no firm recommendations, but suggests that huge savings would be generated by the reduction in administrative costs if payers are still around after the transition to single-payer, they could be relegated to administrative roles.
California hospital margins — a measure of financial performance — were 26% lower on average than before the pandemic.
The COVID-19 pandemic may be waning, but California's hospitals are still reeling from the economic fallout that has cost them $20 billion in the past two years and put more than half of hospitals in the red.
According to a Kaufman Hall study commissioned by the California Hospital Association, Golden State hospitals in 2021 lost nearly $6 billion, roughly three times the $2.2 billion that had been projected. In 2020, California hospitals lost $14 billion.
Federal CARES Act relief softened the blow somewhat, but California hospitals still took a $12 billion hit, the report says.
"The pandemic has taken a devastating financial toll on the majority of hospitals in California," CHA President and CEO Carmela Coyle said at a media event detailing the report. "In communities throughout our state, many hospitals are struggling to provide services for all who need care. It is going to take years for hospitals to recover from these losses, and the truth is some hospitals may not survive."
The report shows that 51% of the state's hospitals are operating in the red, compared to 40% before the pandemic, with higher expenses such as labor costs largely to blame. Total costs for California hospitals rose 15% in 2021, outpacing the 11% national average. These cost increases were largely driven by higher labor costs and medical supply chain shortages. Overall, California hospital margins — a measure of financial performance — were 26% lower on average than before the pandemic.
The report also shows that while hospitals took care of fewer patients in 2021 than pre-pandemic, those patients who were hospitalized were sicker and required longer hospital stays, which the report says likely is the result of hospitals caring for both extremely ill COVID-19 patients, and those patients who delayed non-COVID-19 care earlier in the pandemic.
Because hospitals are commonly paid a fixed amount per admission, fewer admissions and longer lengths of stay create additional financial pressures for hospitals.
Roger Sharma, president and CEO of Emanate Health, says his non-profit, three-hospital system serving the East San Gabriel Valley was dealt a devastating blow by the pandemic.
The system, which serves a largely Hispanic community, gets 80% of its reimbursement from Medicare or Medi-Cal, lost $30 million in FY 2020 and an additional $16.6 million in the first two months of 2022. To stay afloat, Emanate Health has had to dip into reserves to make payroll and pay utility bills, mandate 20% payment cuts for managers, and suspend pension plan contributions from mid-2020 to mid-2021, with only a 50% restoration from mid-2021 to now.
"In the last decade, we have never been in the red before," Sharma says. "The pandemic might have clinically ended, but the economic disaster is continuing — even more severely today. If the current economic burden continues, we are worried about running out of funds to keep the hospital operational and expanding much-needed services for our community."
One observer says the best way to address sketchy labor practices is through civil litigation, not criminal prosecutions.
The April 15 acquittal of conspiracy in restraint of trade charges against DaVita Inc. and its former CEO Kent Thiry should raise red flags for the U.S. Department of Justice that its unprecedented criminal prosecution of no-poaching agreements, wage-fixing, and other sketchy labor practices could be a hard sell for juries, one observer notes.
"Many of us in the defense bar have questioned the wisdom of the Antitrust Division's fixation on so called 'labor market cases' and resource expenditures to try to find and bring criminal no-poach cases," says Ann O'Brien, a former assistant chief of DOJ's Competition Policy & Advocacy Section, and now an attorney with BakerHostetler.
"What we are seeing in these trial defeats for the Antitrust Division is the culmination of a years-long effort to find 'labor market' cases and push the boundaries of Section 1 of the Sherman Act to criminalize conduct that has never before been treated as per se criminal conduct," said O'Brien. "Juries have spoken, as have judges in their jury instructions, and they do not agree."
"Defense counsel often put 'labor market' in quotes because people are not widgets and labor is not a proper antitrust market," O'Brien says.
"I question the wisdom of the Antitrust Division bringing no poach cases as criminal per se cases because for decades non-compete and non-solicit agreements have been analyzed as civil offenses under the rule of reason standard because there are often procompetitive benefits attendant to such agreements, which means they are not per se harmful. Context matters."
In U.S. vs. DaVita et al., the Denver-based kidney dialysis specialists and Thiry were charged in three separate conspiracies with rival healthcare companies to suppress competition for some employees from 2012 through June 2019.
O'Brien, who observed the trial, says prosecutors failed to show "beyond a reasonable doubt that the defendants entered into these alleged no poach agreements with the purpose of allocating the market."
"The defense conceded the agreement but hinged the defense on providing context, including strategic business reasons and friendships," O'Brien says. "The defense brought these issues out on cross and also were allowed to present an economist as an expert witness to provide opinions that the movement of employees and wage data was inconsistent with a market allocation agreement and did not result in the widespread harm the government theoretically alleged.
O'Brien says the jury appeared to focus on the context of the agreements and the expert testimony "and could not find that the purpose of the conceded agreements was to allocate the market as defined."
Since the DaVita case was brought forward in 2021, DOJ has filed another five no-poach cases, including one against Surgical Care Affiliates LLC, an alleged co-conspirator with DaVita. O'Brien doesn't believe that DOJ will have much success in those cases, either.
"Since 2016 the Antitrust Division has said prosecuting wage-fixing and no-poach cases is a top priority. They do not seem ready to concede defeat or back down," O'Brien says. "But in the DaVita case the defendants conceded the agreement – typically the heart of an antitrust crime – and they did not win."
"There were defense victories in the DaVita case beyond the acquittals," she said. "The court's findings on the motion to dismiss and jury findings will be helpful to defendants in pending no poach cases."
Instead of criminal prosecution, O'Brien says DOJ should pursue civil charges, or press for legislative changes.
"The Antitrust Division should be thinking long and hard about its ability to win these cases and whether they should be brought under the principles of federal prosecution," she says.
The payer's 2021 data show a massive increase in telehealth use when compared with pre-pandemic levels.
UnitedHealthcare Inc. members logged more than 28 million virtual care visits in 2021, a 2,500% increase over pre-pandemic usage, the payer says.
"While the COVID-19 pandemic triggered an unprecedented spike in the number of virtual care visits, we are seeing that telehealth has staying power even as many people have returned to in-person appointments," UnitedHealthcare CMO Donna O'Shea, MD, tells HealthLeaders.
"Virtual care visits in 2021 by UnitedHealthcare members approximately matched the total for 2020, with continued significant use of telehealth so far in 2022."
UHC data show that:
Members used virtual care 28 million times in 2021, a 2,500% increase from the pre-pandemic baseline and steady from 2020.
Local providers delivered 95% of those virtual care visits.
Half (50%) of virtual visits -- 14 million -- were for behavioral health, and 63% of all behavioral health visits were done virtually, up from 1.5% pre-pandemic.
The share of virtual care users aged 25 to 44 grew from 36% in 2020 to 38%.
The share of virtual care users among women grew from 62% in 2020 to 64%.
In an email exchange with HealthLeaders, O'Shea talked about the new data on telehealth usage, and what it reveals about the burgeoning sector.
HL: What do your numbers say about the status of telehealth today in the USA?
O'Shea: While the COVID-19 pandemic triggered an unprecedented spike in the number of virtual care visits (a 2,500% increase compared to pre-pandemic levels), we are seeing that telehealth has staying power even as many people have returned to in-person appointments. Virtual care visits in 2021 by UnitedHealthcare members approximately matched the total for 2020, with continued significant use of telehealth so far in 2022.
Virtual care has expanded from delivering care to people who are sick to also focusing on preventing and detecting disease and helping people manage chronic conditions. Through better insights and digital tools, we are seeing virtual care enable the ability to flag gaps in care, prevent complications and avoid unnecessary hospitalizations – all of which can help improve health outcomes and curb costs. As more consumers and care professionals move to a digital mindset, we will continue to expand the use of virtual care, including to help people access primary, behavioral and specialty services such as dental, hearing and physical therapy support.
Importantly, virtual care for behavioral health issues has come in to its own since the start of the pandemic. Many people recognize virtual services for mental health can be as good or better than in-person services, bringing added privacy and convenience. In fact, 66% of our behavioral health claims were virtual in 2021, up from 1.5% in 2019.
HL: What are these numbers telling payers?
O'Shea: The on-going, widespread use of virtual care is an indication that consumers and care providers have embraced this technology. We know that virtual care can help make care more affordable and accessible, especially during nights or weekends and for the 20% of Americans in rural areas. In fact, industry estimates show savings of between $19 and $120 per virtual visit compared to an in-person appointment.
Importantly, many minor ailments can be addressed via a virtual urgent care visit, rather than in the emergency room. A UnitedHealthcare analysis found that about 25% of emergency room visits involve conditions that could appropriately be addressed with a virtual urgent care visit. UnitedHealthcare members using 24/7 Virtual Visits generally pay less than $49 per appointment compared to an average of $740 for an emergency room visit for a similar low-severity condition. These virtual visits are designed to help provide an alternative way to access care when clinics and urgent care facilities may be closed or inconvenient to visit.
Based on the trends we are seeing, we expect telehealth to continue to play an important role in helping people access urgent, preventive, routine and chronic condition care.
HL: We have seen some indications that telehealth use has been tapering off. Should payers do something, i.e. offer incentives to enrollees, etc., to maintain telehealth use?
O'Shea: To support the on-going use of virtual care, it will be important continue certain practices even after the COVID-19 pandemic end. For instance, UnitedHealthcare has supported our network physicians in this regard by modernizing our reimbursement policies to compensate care professionals for virtual visits, while assisting some network health care providers to adopt the information technology infrastructure to virtually connect with patients.
More specifically, a UnitedHealthcare reimbursement policy enables certain primary care, specialist care, and therapy services to be administered virtually as an alternative to in-person visits. Due in part to this policy that will continue even after the COVID-19 public health emergency ends, over 95% of virtual care visits among our members are being conducted with local care providers.
To drive further adoption, we are working with employers to offer employees incentives, such as a financial reward, to jump-start their interest in using virtual care. For example, some employers may consider offering $5 prepaid gift cards to employees for completing a virtual visit registration*. According to one study, that small incentive helped generate a 40% increase in sign-ups compared to a control group.[1]
HL: How does UHC see telehealth growing, both in use and in specialty areas, in the next five years?
O'Shea: We believe the future of virtual care will feature a hybrid model, seamlessly connecting members to care via telehealth and in-person services, when needed. This is already coming to fruition through new virtual-first health plans, which offer an integrated approach to provide care virtually and in-person to make care more simple, convenient, and reduce costs.
For instance, our new NavigateNOW plan represents a transformational step that helps people seamlessly move between virtual and in-person care. People enrolled in this plan are supported by a personalized care team that not only delivers virtual primary, urgent, and behavioral health services at the touch of a button, but also offers a concierge service to make it as easy as possible to schedule follow-up appointments with Optum providers and other health care professionals.
The result: simple, convenient, and more affordable health care, including lowering plan premiums by approximately 15%. Members enjoy $0 for virtual and in-person primary care and behavioral health visits, virtual urgent care and most generic medications, with unlimited chat, online scheduling and on-demand, same-day appointments
[1] UnitedHealthcare internal analysis of more than 90,000 small employers spanning small businesses, key accounts, national accounts and public sector employers, 2020
Those lucky enough to continue to afford health insurance likely will see "significant" premium hikes.
More than 3 million people will join the ranks of the uninsured across the nation in 2023 if Congress allows premium tax credits in the American Rescue Plan to expire, according to the Urban Institute.
Jessica Banthin, a senior fellow at the Urban Institute, said the study shows "that 4.9 million fewer people will be enrolled in subsidized Marketplace coverage in 2023 if the enhanced PTCs aren't extended."
"This comes at a pivotal time when millions of people will be losing Medicaid as the public health emergency expires," Banthin said.
The tax credits have been available for some consumers based on financial need when they buy health insurance through marketplaces created through the Affordable Care Act. The Urban Institute notes that ending the credit would disproportionately disenroll non-Hispanic Blacks, young adults, and low-income people.
Congress would need to act by midsummer to extend PTCs to give Marketplaces, insurers, and outreach programs time to prepare for the 2023 open enrollment, which starts in November.
Those who can afford to keep their insurance can expect to pay hundreds if not thousands of dollars more in per-person premiums.
"The combined effect of ending both the premium tax credits and the public health emergency could lead to a tsunami of coverage loss," said Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, which commissioned the report.
"A reversal of progress in boosting the coverage rate to record levels seems inevitable if Congress does not act," Hempstead said.
The Fairfield-based nonprofit is trying to determine if the secured access to the personal records of any of its more than 850,000 members in 14 counties has been compromised.
Medi-Cal managed services provider Partnership HealthPlan of California announced on its website that it had been hacked.
Now, the Fairfield-based nonprofit is trying to determine if the secured access to the personal records of any of its more than 850,000 members in 14 counties has been compromised.
Local media are reporting that a ransomware group known as Hive is claiming to have stolen private data, and PHC published a statement on its website acknowledging that it has "recently became aware of anomalous activity on certain computer systems within its network."
The (Santa Rosa) Press Democrat published a screenshot purportedly from Hive claiming that the "stolen data includes...850,000 unique records of name, SSN, date of birth, address, contact, etc." along with 400 gigabytes of data stolen from PHC's file server.
"We are working diligently with third-party forensic specialists to investigate this disruption, safely restore full functionality to affected systems, and determine whether any information may have been potentially accessible as a result of the situation," the statement said.
"Should our investigation determine that any information was potentially accessible, we will notify affected parties according to regulatory guidelines."
Because of the hack, PHC said it can't receive or process Treatment Authorization Requests. As a result, the company said that procedures scheduled within the next two weeks for inpatient admission or for urgent services can proceed as scheduled and the TARs can be submitted retroactively.
The FBI last August issued a Flash Report on Hive ransomware, which surfaced in June 2021 and "likely operates as an affiliate-based ransomware, employs a wide variety of tactics, techniques, and procedures (TTPs), creating significant challenges for defense and mitigation."
"After compromising a victim network, Hive ransomware actors exfiltrate data and encrypt files on the network. The actors leave a ransom note in each affected directory within a victim’s system, which provides instructions on how to purchase the decryption software. The ransom note also threatens to leak exfiltrated victim data on the Tor site, "HiveLeaks."
9th Circuit Court rules that plaintiffs failed to make their case on UBH's "inconsistent" medical necessity determinations.
A federal appeals court has dealt a blow to mental healthcare advocates.
The 9th U.S. Circuit Court has overturned a district court ruling that plaintiffs failed to demonstrate that United Behavioral Health made medical necessity determinations for mental health and substance abuse that were inconsistent with generally accepted standards of care.
The plaintiffs in Wit v. United Behavioral Health, led by Legal Action Committee, said they were "disappointed with the ruling, as it will allow insurers to determine whether substance use disorder and mental health treatment services are medically necessary using their own proprietary guidelines - even when they deviate from generally accepted standards of care - and deny services based on the insurer and health plan's financial interests."
LAC said that before the 2019 Wit decision, UBH used guidelines that differed from standards set by the American Society of Addition Medicine, LOCUS, and CALOCUS criteria and denied services to treat often life-threatening emergencies.
"As a result of the Ninth Circuit’s decision, thousands of individuals who were supposed to have their addiction and mental health care claims reprocessed under generally accepted standards of care will now be left without any remedy," LAC attorney Sika Yeboah-Sampong said.
"This ruling is particularly devastating as we see escalating rates of suicide and record-breaking overdose deaths nationwide.” As our country continues to face these crises that are leaving so many without access to life-saving care, we urge the full Ninth Circuit to review this flawed decision."
The complaint alleges that USHW possessed unclaimed property as early as 2001 but did not file mandated reports with the state until 2018.
California Attorney General Rob Bonta has filed a complaint against U.S. HealthWorks Inc., claiming that the Los Angeles-based national chain of occupational and urgent care clinics knowingly withheld from the state millions of dollars in unclaimed overpayments.
The complaint, filed this month in Los Angeles County Superior Court, alleges that USHW's actions and its failure to timely refund the overpayments is a violation of the state's Unclaimed Property Law and the California False Claims Act.
“Let’s get one thing straight: corporate evasion is corporate fraud,” Bonta said. “Companies don’t get to pick and choose when to follow the law because it serves their benefit. When companies cheat the State of California, they cheat the people of California.”
USHW ran 78 occupational and urgent care clinics in California. In 2018, USHW was bought by Select Medical, and the clinics were renamed Concentra.
Officials at Select Medical declined to comment on the merits of the complaint, citing a company policy against commenting on ongoing litigation. However, the company said it is prepared to vigorously defend itself in court.
The complaint alleges that USHW possessed unclaimed property as early as 2001 but did not file mandated reports with the state until 2018 after being notified of the Attorney General’s investigation.
Under the Unclaimed Property Law, intangible property that remains unclaimed by the true owner for more than three years after it became payable or distributable, must be reported and then remitted to the state.
The UPL also mandates 12% interest per year on property that should have been reported or remitted to the state. Even when USHW filed reports with California, the company underreported the unclaimed property it held in 2018, 2019, 2020, and 2021, the complaint alleges.
Bonta said USHW violated the CFCA when it failed to report its unclaimed property holdings, and thus knowingly concealing millions of dollars due to the state. Although USHW’s unreported property claims were repeatedly brought to management’s attention, management declined to comply and report the property so as to avoid an audit by state authorities, the complaint alleges.
The investment will fund technology that allows CalOptima to provide same-day authorizations and timely claims payments.
CalOptima has launched a $100 million, five-year "strategic vision" to assess the social needs of its nearly 880,000 Medi-Cal members in Orange County, provide them with same-day care authorizations and pay claims to providers in "real time."
"The changes articulated in the new vision will help reduce delays and barriers to care for our members, as well as attract more providers to work with CalOptima," said Andrew Do, board chair for Orange-based CalOptima. "Understanding the life changes in our members will also allow CalOptima to help our members address insecurities in their daily needs that may impact their physical and mental health."
An recent American Medical Association survey of more than 1,000 doctors found that 93% of physicians reported delayed access to care for patients whose treatment required prior authorization. The survey also noted that physicians and their staff average almost two business days each week completing prior authorizations.
The $100 million earmarked for the initiative will fund technology that allows CalOptima to provide same-day authorizations and timely claims payments will also facilitate data sharing with providers and stakeholders through a health information exchange.
When the system launches, CalOptima will be the first Medi-Cal plan to use real-time claims processing. CalOptima's "cloud-first" strategy will also include cyber-security controls to maintain HIPAA compliance and measures to prevent cyber-attacks, the payer said.
To address care needs for the county's homeless population, CalOptima in December 2021 joined the Orange County Interagency Council on Homeless Health Care and will launch a joint Street Medicine Program to support homeless Medi-Cal members.
Street Medicine will provide health and social services "designed to meet individuals where they are" and will work with CalOptima's Clinical Field Teams, outreach workers and mobile teams, linking homeless people to a medical home to reduce emergency department use and manage chronic conditions.
Founder and CEO Sigal Atzmon vows that "Medix will reinvent the way American people access and consume healthcare."
London, England-based telehealth and health services management provider Medix this month opened its U.S. headquarters in New York as part of an ambitious campaign to create a virtual footprint across the nation.
In a press release announcing the provider's U.S. launch, Medix Group CEO and founder Sigal Atzmon said that "Medix will reinvent the way American people access and consume healthcare."
"By using AI and data that enable us to better understand our customers, we help people navigate the healthcare system in a very different, simplified and personalized way and provide a reliable, one-stop shop for their medical needs. We are here to bring the future of healthcare to Americans, today," she said.
In an email exchange with HealthLeaders, Atzmon talked about Medix's aggressive plans for expansion in the U.S.
HealthLeaders: Your company boasts that it is disruptive. How is it disruptive, what is it disrupting, and why is the disruption needed?
Atzmon: We fundamentally change the way healthcare is delivered and consumed. There are solutions in the market for specific diseases, broader wellness support tools and enablers of access to medical networks and professionals. Medix addresses a market need.
We provide a one-stop solution of accessible and quality care with personalized navigation, combining digital health and AI with human interaction. We can do this across an individual's life, including prevention, medical case management, rehabilitation and mental health. We put healthcare back in the hands of the consumer, all supported by a range of digital, AI and personal care support. We believe that consumers should be able to access care 24/7, regardless of location or demographic. There should be no barriers to accessing affordable, quality healthcare – that’s where we come in.
HealthLeaders: Why is the US market attractive for you?
Atzmon: We have had a footprint in the U.S. for some time now. However, with the U.S. healthcare system being more fragmented than ever amid an enhanced, post-pandemic demand, we know the time is perfect right now for us to make this substantial entry into the U.S. market.
With 300 million people covered by health insurance, along with a substantial number who are without insurance, we know our solutions will help people. There is a growing demand for virtual and smart personalized care and COVID has shown the increased importance and relevance of digital care. We are here to help as many people as we can with our one stop solution.
HealthLeaders: What do you believe your company can do in the US that existing companies in this space cannot or are not doing now?
Atzmon: We see some great offerings in the U.S. market and the potential for new ones to be developed, but they are niche and siloed. Healthcare and the needs of consumers are holistic and universal, and our solution has already proven to millions of customers that we provide a great user experience and ensure that individuals are getting the best care. Over the years, we have consistently provided better medical outcomes with a great customer experience by empowering our customers and their doctors.
We believe our one-stop solution, with a focus on care over cost, is a unique differentiator - placing consumers at the heart of all that we do and ensuring they receive the very best care and support. Our relentless passion to make a difference in people’s lives, our global footprint and over 15 years in business will ensure we are well-positioned to navigate the barriers and challenges that many startups would typically experience. We are proud to combine our local and global experience, with our deep understanding of the U.S. healthcare landscape as we launch our new North American headquarters.
HealthLeaders: Do you anticipate any partnerships with US companies?
Atzmon: Yes, absolutely. We see the opportunity to partner with companies in the U.S. There are a number of verticals that we are already targeting and are in discussions with various potential strategic partners where we believe there will be mutual benefit to help improve access to great healthcare for consumers.
HealthLeaders: What is your long-term goal for Medix over the next 5-10 years? How many states will you be in?
Atzmon: We are working very hard to become the world's leading and preferred healthcare partner by improving accessibility and affordability of quality of care. Our goal is to put the tools and solutions we have into the hands of every American and to be in a position where we can demonstrate that healthcare outcomes have improved, consumers are happier and that great quality healthcare has no barriers. Worldwide, we are on a mission to democratize healthcare, reduce unwarranted healthcare variations and inequality of care.
We will be in every state and have already established our New York headquarters. We are also already looking to expand into Latin America later this year and will be establishing additional locations as we expand further.
