Trump administration health officials cited the annual report as evidence the government should avoid 'Medicare-for-All.'
One of Medicare's two trust funds is on course to run short on funds in just seven years, according to an annual report released Monday by the Medicare Board of Trustees.
The hospital insurance trust fund is projected to have enough money to pay full benefits until 2026, the report says, affirming last year's projection. That news, coupled with the fact that Medicare costs keep rising, gave Trump administration officials another opportunity to criticize "Medicare-for-All" opportunities as unwise.
"Instead of trying to expand Medicare into a universal entitlement that even covers wealthy Americans of working age, as some have proposed, we need to fulfill Medicare's promise to our seniors," said Health and Human Services Secretary Alex Azar in a statement.
But others said linking Monday's report directly to current Medicare-for-All proposals is a bit of a stretch. The proposals being considered wouldn't simply expand the existing Medicare program, said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation.
"The benefits are better and there is no premium or cost-sharing," Levitt wrote in a tweet. "The current Medicare hospital trust fund isn't relevant to these proposals."
Azar said the administration's 2020 budget proposal would extend the Medicare hospital insurance trust fund's life by eight years through value-based payment initiatives and efforts to lower prescription drug prices.
"These proposals complement the work we are doing administratively at HHS to lower costs in Medicare for American patients and transform our healthcare system into one that treats you like a person, not a number," he added.
Centers for Medicare & Medicaid Services Administrator Seema Verma said in a statement that Monday's report "delivered a dose of reality" in the face of ill-advised proposals.
"Stripping around 180 million Americans of private coverage and adding them to Medicare won't fix the problem," Verma said.
"If we do not take the fiscal crisis in Medicare seriously, we will jeopardize access to health care for millions of seniors," she added.
The trustees' report projected also that Medicare costs will rise from about 3.7% of gross domestic product in 2018 to 5.9% of GDP by 2038—then about 6.5% of GDP by 2093.
American Hospital Association President and CEO Rick Pollack called on Congress to shore up the trust fund through a variety of tactics.
"Solutions to address this problem must include tackling the skyrocketing costs of drugs for hospitals, which will continue to grow at an increasingly fast rate in coming years," Pollack said in a statement. "Policymakers should also consider structural reforms to the program that will have a real long-term impact, such as additional means testing for higher income beneficiaries, raising eligibility age to be consistent with the Social Security program, phasing in adjustments to the FICA contributions that fund the program, reducing regulatory burden and accelerating delivery system reforms that better coordinate care, especially for the chronically ill."
Editor's note: This story was updated Tuesday, April 23, with additional information.
Organizations that have filed amicus briefs in the DOJ's federal lawsuit have told the court who they want to testify next month.
Although the U.S. Department of Justice signed off more than six months ago on CVS Health's acquisition of Aetna, with strings attached, a federal judge still hasn't decided whether the DOJ's strings are sufficient.
U.S. District Judge Richard Leon in Washington, D.C., said earlier this month that he wanted to hear from witnesses before deciding whether to let the companies finalize their DOJ-approved deal.
Organizations that have been recognized as amici curiae in the case had until Friday to name three proposed witnesses apiece to testify at a not-yet-scheduled hearing next month. Three groups named a total of seven people who want to testify on whether Leon should grant the DOJ's request for final judgment in favor of the transaction.
The American Medical Association (AMA) named three proposed witnesses:
Richard M. Scheffler, PhD, is a health economics and public policy professor at University of California–Berkeley and the principal investigator for the California Healthcare Foundation's and the Commonwealth Fund's sponsored research on the price and quality impacts of healthcare consolidation. Scheffler is expected to testify that the CVS-Aetna deal is likely to harm consumers and result in higher premiums.
Neeraj Sood, PhD, is a health policy professor and vice dean for research at the University of Southern California Sol Price School of Public Policy. Sood is expected to testify that the divestiture of Aetna's Part D plans "will not even come close to restoring competition to premerger levels," according to AMA's filing.
Thomas L. Greaney, JD, is a visiting law professor at the University of California Hastings College of Law who has spent most of his 30-year academic career studying healthcare competition and regulation, according to AMA's filing. Greaney is expected to testify that the DOJ has failed to meaningfully respond to competitive concerns prompted by the horizontal merger and Part D plan divestiture.
Consumer Action and the U.S. Public Interest Research Group (PIRG) named one proposed witness:
Diana L. Moss, PhD, is president of the nonprofit American Antitrust Institute and an adjunct faculty member in the Department of Economics at the University of Colorado at Boulder. Moss is expected to testify that the merger could give CVS-Aetna incentive "to exclude rivals and facilitate anticompetitive coordination among health insurers served by [the pharmacy benefit manager] CVS-Caremark," according to the groups' filing.
The AIDS Healthcare Foundation (AHF) named three proposed witnesses:
Hal Singer, PhD, is a managing director at Econ One Research Inc., a senior fellow at the George Washington Institute of Public Policy, and an adjunct professor at the Georgetown University McDonough School of Business. Singer is expected to testify on the effect of increased vertical integration and barriers to entry or expansion that may be caused by the CVS-Aetna deal, according to AHF's filing.
Lawton R. "Rob" Burns, PhD, MBA, is a professor in the departments of management and healthcare management at the Wharton School of the University of Pennsylvania. Burns is expected to testify on the purposed consumer welfare benefits of the CVS-Aetna deal and the lack of evidence for such claims, according to AHF's filing.
Michael B. Wohlfeiler, MD, JD, is chief medical officer for AHF. Wohlfeiler is expected to testify on how rising healthcare consolidation has negatively impacted HIV/AIDS care, according to AHF's filing.
Each plaintiff and defendant has until May 3 to name up to three proposed witnesses to rebut the testimony proffered by the amici curiae.
The agency said its methodology will better reflect the individual market. Critics said the change may not be legally justified.
A final rule released Thursday by the Centers for Medicare & Medicaid Services will change the way premium subsidies are calculated next year, and some stakeholders worry the policy will shift more costs onto beneficiaries.
The government's existing methodology accounts for premium growth by tracking premiums for employer-sponsored plans only. The new methodology will account for premium growth by incorporating data from private individual insurance as well. The idea, CMS said, is to adopt a methodology that reflects the individual market.
"This technical change in the premium adjustment percentage methodology will provide a more comprehensive and accurate measure of private market premiums," the agency said in its announcement. "This change will have little impact on gross individual market premiums, but it will provide savings for taxpayers."
Critics contend, however, that changing to the new approach will result in higher premiums, may not be legally justified, and fails to provide a meaningful way to track premium growth.
"Because individual market coverage changed radically between 2013 and 2014, with coverage more comprehensive and a very different population covered, comparing prices before and after those changes does not provide meaningful information about the change in the price of similar coverage—it is like comparing the price of apples in 2013 to the price of oranges today," Jason Levitis, a nonresident senior fellow at Yale Law School's Solomon Center for Health Law and Policy wrote for the Brookings Institution in February, after the proposed rule was released in January.
The change, Levitis wrote, would reduce the affordability of health insurance and result in fewer people having coverage.
In analysis for the Center on Budget and Policy Priorities (CBPP), Aviva Aron-Dine and Matt Broaddus wrote that the "seemingly minor change" would raise premiums for at least 7.3 million people on Marketplace plans and cause 100,000 people to drop their coverage each year, citing the Trump administration's own estimates. The rule also increases limits on total out-of-pocket costs.
Aron-Dine and Broaddus noted that this change is "an entirely discretionary choice" by the administration because neither the ACA nor any other statute requires it.
The American Hospital Association, too, had urged CMS to refrain from adopting this change in the final rule.
"The marketplaces have begun to demonstrate signs of stability, and this change could undo this progress by creating a cost barrier for consumers," the AHA wrote in a comment on the proposal.
The final rule—known formally as the Notice of Benefit and Payment Parameters for the 2020 benefit year, or the 2020 Payment Notice—also finalized a proposal that CMS said would result in lower premiums. The agency will cut user fees to 3%, from 3.5%, of premiums for federal exchange plans and to 2.5%, from 3.0%, for plans on state-based exchanges.
CMS Administrator Seema Verma said the rule "will give consumers immediate premium relief for 2020 by reducing the federal exchange user fees thanks to successful efforts to improve the efficiency of the exchange."
There's also a request for comment on silver-loading. The agency said it wants to end silver-loading, but it did not finalize anything on that topic at this time.
A warrant was issued after the coroner determined the nurse's death was directly related to injuries from a belligerent patient the week prior.
A patient faces arrest for manslaughter after an alleged attack at Baton Rouge General Medical Center in Louisiana resulted in a nurse's death, highlighting once again how dangerous the workplace can be for frontline healthcare professionals.
The 54-year-old patient, Jessie Guillory, was attacking another nurse in the hospital's behavioral health unit this month when 56-year-old nurse Lynne Truxillo intervened, as The Advocate's Lea Skene reported Tuesday, citing police. Guillory then allegedly turned to attack Truxillo, causing her to injure her right leg and strike her head on a desk.
Truxillo—who finished her shift before being treated and released by the hospital's the emergency department that day, as WAFB reported—died the following week. The coroner ruled this week that blood clots in Truxillo's leg and both lungs had resulted from the altercation and caused her death, as Skene reported.
Edgardo Tenreiro, president and CEO of Baton Rouge General/General Health System, said in an email to staff that Truxillo was a "kind, compassion and giving nurse," as The Advocate's Jacqueline DeRobertis and Grace Toohey reported.
"Our deepest sympathies are with her loved ones, friends, and colleagues as we work to better understand this tragic loss," Tenreiro wrote, noting that Truxillo had worked for the hospital since 2002.
Truxillo's death comes as nurses push for state and federal legislation to better protect healthcare professionals at work, drawing attention to the pervasive violence that some nurses have been told to accept as part of the job.
"Right now, healthcare and social service employers are not doing enough to prevent the violent incidents that nurses and other workers experience daily," Jean Ross, RN, co-president of the National Nurses United, said in December.
Amy Costigan, MD, told HealthLeaders in February that clinicians' legitimate safety concerns in the emergency department can undermine the quality of care they deliver.
"We work in emotionally charged and high-stress situations, but our protection in the hospital shouldn't be any different than what is afforded to everybody else," Costigan said. "We don't tolerate assault in a courtroom, or a library, or a restaurant. The same rules should be applied and enforced everywhere because everybody has a right to feel safe, supported, and protected in their workplace."
The hospital's CEO reportedly told staff the process has been 'emotionally draining and financially devastating.'
Three months after ending its clinical affiliation with Pittsburgh-based UPMC, Uniontown Hospital in Pennsylvania has delayed a $32 million upgrade, as the Pittsburgh Post-Gazette reports.
"Going through a divorce is emotionally draining and financially devastating," the hospital's CEO, Steve Handy, reportedly told staff in a memo earlier this month. The delay, which is expected to last 18-24 months, is needed so the hospital can put the cash it has toward filling needs left by UPMC's departure.
"This has left us with very little time now to figure out how to stabilize our physician related services without destabilizing the hospital," Handy wrote in the memo, as the Post-Gazette reported.
When the 160-bed hospital said in January that its six-year UPMC affiliation would end, it also said that it is thinking about partnering with West Virginia University Health System, which is based about 30 miles away in Morgantown, West Virginia, as the Post-Gazette reported at the time.
In the past two years, WVU Health System has added four hospitals to its organization, with a fifth acquisition planned, as Charleston-based MetroNews reported Monday. Uniontown Hospital would be a sixth potential addition.
When policymakers say they aim to eliminate the middlemen who drive up healthcare costs, they're not just talking about prescription drugs.
Pharmacy benefit managers took their turn in the spotlight last week, sending executives to Capitol Hill to testify that drugmakers are largely to blame for ever-rising drug prices.
The PBMs have been under increasing pressure since President Donald Trump spoke last May about how his administration plans to wrangle the ballooning cost of prescription medicines as part of a broader effort to curb U.S. healthcare spending overall.
"We're very much eliminating the middlemen," Trump said from the White House lawn nearly a year ago, with Health and Human Services Secretary Alex Azar by his side.
Trump's words portended trouble for PBMs, which make money off the rebates they negotiate with drug manufacturers. And the pressure on PBMs has been especially pronounced since January, when the administration unveiled a proposal that could effectively kill those rebates. Azar reiterated the administration's priorities in a speech Thursday, saying any approach that fails to tackle drug rebates "will not deliver the results we need."
But PBMs are not the only healthcare middlemen with possible targets on their backs.
A Killer Idea?
In addition to the drug rebates proposal—which the PBMs pushed back against during last week's hearing—there's a separate price-transparency policy idea currently under consideration on the payer-provider side. It could significantly rearrange the cogs that currently keep the healthcare industry churning.
"I don't know whose idea this was, but whoever thought this up, it literally is one of the more insightful things I've seen and meaningful attempts at reforming the benefits system in my entire career," says Charles E. Davidson, JD, a director and founder of BCE Technology Corp. and president of Managed Care of America Inc.
The idea that sparked Davidson's praise for the Trump administration was outlined in a request for information that Health and Human Services buried in a lengthy piece of draft regulation earlier this year. The request, which The Wall Street Journal highlighted in March, posed a provocative question: what if hospitals were required to disclose the prices they negotiate with payers?
Hospitals have been required since January to publish their raw list prices online in a machine-readable format. But hospitals and others have said the information isn't useful to patients and may confuse them because it bears little resemblance to final prices, once negotiated discounts and other factors are taken into account.
"For decades, insurance companies and powerful provider systems have succeeded in keeping their negotiated rates veiled from public view using non-disclosure agreements and restrictive contractual gag clauses."
—Michael Maron
For patients to make cost-informed decisions about certain healthcare services, thereby unleashing the cost-reducing effects of competition, they need more information up front. That's the idea behind the Trump administration's push for price transparency in corners of the healthcare industry that have been shrouded behind layers of negotiated contracts.
"Patients and plan sponsors have trouble anticipating or planning for costs, are not sure how they can lower their costs, are not able to compare costs, and have no practical way to measure the quality of the care or coverage they receive relative to the price they pay," the HHS draft regulation says, followed by a long list of questions about the idea and its technical implications.
Michael Maron, president and CEO of Holy Name Medical Center in Teaneck, New Jersey, is among those who have submitted comments in favor of the price-transparency idea.
"For decades, insurance companies and powerful provider systems have succeeded in keeping their negotiated rates veiled from public view using non-disclosure agreements and restrictive contractual gag clauses," Maron wrote.
"In a fee for service market, these unpublished rates contribute directly to sky-rocketing insurance premiums every year and have led to the proliferation of high deductible health plans in an effort to keep health care affordable," he added. "Ironically, the out of pocket outlay dictated by these plans is largely unaffordable for most consumers."
The public should have a right, therefore, to know which providers are driving costs higher, Maron wrote.
Death to PPO Networks?
If the administration were to finalize and implement a rule to require hospitals to disclose their negotiated rates, the change would ultimately pressure providers to charge everyone the same price, Davidson says.
"It would be as if the government suddenly started telling drug manufacturers, 'You're going to charge one price, and all the pharmacies, you're all going to charge one price.' That would eliminate pharmacy benefit managers overnight," Davidson tells HealthLeaders. "This is the same thing as that."
Davidson built preferred-provider organization (PPO) networks in the late 1980s and early 1990s. "That's how I got into healthcare," he says. The goal was to help negotiate provider discounts on behalf of more people. Even so, he sees PPOs as "unnecessary middlemen."
"When you look at the purpose of a PPO network, in essence, it was originally designed to allow entities that didn't otherwise have discounts with a provider to get those discounts," he says. "If you eliminate the need for that, you eliminate the need for PPOs."
Related: 4 Takeaways From Pharma Testimony at Senate Drug Pricing Hearing
Davidson says eliminating PPOs would reduce administrative costs.
"If you carve out the middlemen, like PBMs and PPOs, it will save enormous money in the healthcare system and, frankly speaking, will go a long way toward making our healthcare costs more and more competitive," he adds.
America's Health Insurance Plans (AHIP), the national trade association for health insurers, hasn't weighed in on the request for information regarding hospital price transparency. But AHIP has opposed the PBM rebates proposal.
In its current form, the drug rebates proposal would exacerbate the problem of high drug costsby weakening the negotiation position of health plans and PBMs relative to drug manufacturers, AHIP President and CEO Matt Eyles wrote in a letter to HHS last week.
"We want to be perfectly clear: Health insurance providers are not committed to rebates in any way, shape or form. We are committed to getting the lowest drug prices and costs for patients and consumers," Eyles wrote. "This includes what they pay out-of-pocket at the pharmacy counter, in premiums, and in taxes. Any proposal that raises costs in any of these areas would simply force consumers to pay higher prices for prescription drugs out of a different pocket."
In an email to HealthLeaders, an AHIP spokesperson said insurers and PBMs offer a counterweight to the price-hiking power of drug makers and providers alike.
"We are not middlemen—we are industry bargaining power," the spokesperson said, echoing a line Eyles has delivered in the past. "We negotiate lower prices with doctors, hospitals and drug companies and then lower premiums for consumers as a result. Eliminating negotiating tools would hurt the very people it's intended to help: patients."
Related: Trump Takes Aim at PBMs in Drug Pricing Speech
The Blue Cross Blue Shield Association (BCBSA) similarly expressed concerns about the PBM rebates proposal, saying something should be done to address the pricing power drug manufacturers wield as well.
"The drug pricing negotiation system in this Proposed Rule may stifle a powerful tool that payers use today to help lower drug prices and premiums," Kris Haltmeyer, BCBSA's vice president of legislative and regulatory policy, wrote in a comment.
Asked about the prospect of hospitals being required to disclose their negotiated rates, Justine Handelman, senior vice president of BCBSA's Office of Policy and Representation, said policymakers and the public should not focus all of their attention on price alone.
"There are many factors that go into negotiations to establish high-quality, cost-effective networks for consumers. Price is not the only consideration—for example, there is a need to consider the quality of care and the community's need to have a sufficient number of doctors and hospitals that they can access," Handelman said in a statement released to HealthLeaders by a BCBSA spokesperson. "Focusing solely on cost looks at only one piece of the picture and we should be taking a holistic look at what will best bring down costs while serving patient needs."
Will It Survive?
Niall Brennan, president and CEO of the nonprofit Health Care Cost Institute, said the idea of requiring hospitals to disclose their negotiated prices is "audacious." But he's skeptical the idea will make it through the rulemaking process and into implementation.
"Maybe I'm overly cynical," Brennan said last week during a webinar hosted by the nonprofit Catalyst for Payment Reform. "I think the chances of it actually happening without being tied up in court for time in memorial are pretty slim because I think certainly the hospital industry will fight this very vigorously and, frankly, it wouldn't surprise me if payers do as well."
Brennan told the Journal last month that such a policy would "put a lot of hospital CEOs and CFOs in the hot seat" if it were to move forward. Sure enough, hospitals have signaled they're prepared for a fight.
"Disclosing negotiated rates between insurers and hospitals could undermine the choices available in the private market," said American Hospital Association Executive Vice President Tom Nickels in a statement. "While we support transparency, this approach misses the mark."
"Price is not the only factor that patients weigh when deciding where to receive care," Nickels added. "Physician recommendation, quality and location play a significant role."
Nickels said the AHA's goal is to make sure consumers have the information they need to make informed decisions about their own healthcare. Generally speaking, that means telling patients what their out-of-pocket costs will be, he said.
"Insurers are the only ones that have this information. Insurers need to make this information available to hospitals so they can share it with their patients," Nickels said.
Brennan said it might make more sense to impose price transparency requirements on the dozens of health plan companies that dominate U.S. healthcare than to squeeze that information from thousands of hospitals nationwide.
Whatever route policymakers choose, if any, there will be pushback, said David Muhlestein, chief research officer at Leavitt Partners, during last week's webinar.
"When you look at government policy solutions, there are those stakeholders that are going to be reluctant to any change," Muhlestein said. "You have to have the political will to make the change, and you're not going to have the political will unless you are reasonably confident that it's actually going to achieve the ultimate objective."
Muhlestein, like Brennan, remains skeptical that this policy idea has the traction it would need to achieve what Davidson thinks it can.
"It's not going to happen under the current political environment," Muhlestein said. "But even if it did, I don't think that by itself solves our price issues in America."
The nonprofit health system's new top executive will take over this summer for the current CEO, who's been in place nearly two decades.
Brett S. McClung, MSHA, FACHE, will become the new president and CEO of Baptist Health in Jacksonville, Florida, the nonprofit health system announced Friday.
McClung will take over in July for Hugh Greene, FACHE, who is retiring after 19 years as Baptist Health's top executive. Greene, who has worked for the system since 1989, said he got to know McClung during the hiring process and approves of his successor.
"Given his impressive background and accomplishments, I am most confident in the future of Baptist Health under his leadership," Greene said of McClung in a statement.
McClung comes to Baptist Health from the 29-hospital nonprofit Texas Health Resources, where he has served as executive vice president and chief operations leader for the organization's nine-hospital northern zone since 2013, according to Baptist Health's announcement.
McClung said in the statement that he looks forward to continuing Baptist Health's "positive momentum."
Baptist Health declined to disclose McClung's compensation package, according to The Florida Times-Union's Beth Reese Cravey. Texas Health Resources paid McClung about $981,000 in total compensation in 2016, and Baptist Health paid Greene about $1.3 million in total compensation in 2017, the Times-Union reported, citing tax filings.
The court proceedings are among several healthcare-related cases causing some friction for the White House's policy objectives.
Two weeks after a federal judge blocked Medicaid work requirements in Kentucky and Arkansas, the Trump administration filed an appeal Wednesday, escalating the matter to the D.C. Circuit Court.
The dispute is among several court cases bogging down the White House's healthcare policy aims, as the Republican administration tries to figure out how to advance its priorities despite the Affordable Care Act.
At issue in these two cases—Stewart v. Azar in Kentucky and Gresham v. Azar in Arkansas—is whether work requirements further the statutory objectives of the Medicaid program, which is to provide healthcare.
A similar lawsuit, Philbrick v. Azar, was filed last week to challenge Medicaid work requirements in New Hampshire as well. But that hasn't stopped the Trump administration from moving forward with approvals of these requirements in other states.
The board gave James K. Elrod two more years at the health system's helm, despite the 81-year-old CEO's retirement plans announced amid controversy.
Eighteen months have passed since the medical executive committee of Willis-Knighton Health System in Shreveport, Louisiana, urged the board to force President and CEO James K. Elrod to either step out of his longtime leadership position voluntarily or be pushed.
The committee's statement of no confidence in a letter to the trustees complained that Elrod failed to tolerate dissent and hadn't responded appropriately to changes in the healthcare industry, as the Shreveport Times reported, describing the incident as "an attempted coup."
Elrod was 80 at the time. He had worked for the organization more than 50 years and turned what was an 80-bed hospital into what became Louisiana's largest health system. He weathered the criticism with backing from the board. Then he signaled in a letter to hospital staff that a succession planning process for his likely successor was underway.
Despite the controversy, the board announced Friday that it asked Elrod, now 81, to stay at his post for another two years.
"After taking some time to consider our vote, Mr. Elrod graciously agreed to delay his retirement plans," board president Frank Hughes, MD, said in a statement describing Elrod as "our greatest advantage" in the face of uncertainty and change.
"This is a clear indication of his ongoing dedication and commitment to Willis-Knighton, and we are grateful for this decision," Hughes added. "While we are pleased with the current senior leadership team assembled during the past 18 months, we felt that the greatest gift we could give them is additional time for mentoring and guidance. We made this decision in support of our physicians, our employees and the larger community."
Executives have been working with regional and national teams in search of a buyer for the two facilities.
McLaren Health Care plans to close two hospitals in Lansing, Michigan, when it opens a new $450 million hospital near Michigan State University by early 2022.
Plans to consolidate operations into the new facility were announced more than 16 months ago. What remains unclear is what will happen to the two vacated hospitals, as Lansing State Journal's Sarah Lehr reported Monday.
Casey Kandow, chief operating officer for McLaren Greater Lansing, reportedly said demolishing the two hospitals would be a "worst case scenario." Kandow said a national advisory firm has been hired to find someone to buy and reporpose the buildings, which together offer total floor space of more than 1 million square feet, as Lehr reported. Kandow declined to name the national firm.
McLaren executives have also been meeting biweekly with a regional economic development agency about the consolidation plans, Lehr reported.
Currently, McLaren is licensed for 389 hospital beds between its two Lansing hospitals. The new consolidated hospital will have just 240 beds, according McLaren's 2017 announcement. Part of the strategy behind the new hospital is to deepen McLaren's ties to MSU through not only clinical services but research and education as well.