Posts Tagged ‘healthcare’

Procter & Gamble to pick up Merck’s consumer healthcare unit

April 19, 2018

AFP

© AFP | Merck had been seeking options for its consumer healthcare business for months
FRANKFURT AM MAIN (AFP) – German pharmaceutical and chemicals group Merck said Thursday it had agreed to sell its consumer health business to American giant Procter & Gamble and would use the proceeds mostly to pay off debt.As part of the 3.4-billion euro ($4.2 billion) cash deal, some 3,300 staff will move from Merck to Procter & Gamble, it said in a statement.

Merck had announced in September that it was looking at options for the consumer health business, including a possible sale.

On Thursday, Merck said it would use the net proceeds from the spinoff “primarily to accelerate deleveraging”, but also to give its key businesses — healthcare, life sciences and performance materials — extra financial clout.

Procter & Gamble’s CEO David Taylor, meanwhile, said his company liked “the steady, broad-based growth” of the over-the-counter healthcare market.

Merck said its consumer healthcare business, which comprises more than 900 products sold in 44 countries, had outperformed the market’s overall growth in the past three years.

The deal is to be completed by the end of the year.

Germany’s Merck, founded in 1668, is the world’s oldest chemical and pharmaceutical company. It employs 53,000 staff across the world and had sales last year of 25.3 billion euros.

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Trump administration issues rule further watering down Obamacare

April 10, 2018

WASHINGTON (Reuters) – The Trump administration took additional steps to weaken Obamacare on Monday, allowing U.S. states to relax the rules on what insurers must cover and giving states more power to regulate their individual insurance markets.

The Centers for Medicare and Medicaid Services issued a final rule that allows states to select essential health benefits that must be covered by individual insurance plans sold under former President Barack Obama’s healthcare law. The 2010 Affordable Care Act requires coverage of 10 benefits, including maternity and newborn care and prescription drugs. Under the new rule, states can select from a much larger list which benefits insurers must cover.

That could lead to less generous coverage in some states, according to Avalere Health, a research and consulting firm.

President Donald Trump’s administration has used its regulatory power to undermine Obamacare after the Republican-controlled Congress last year failed to repeal and replace the law. About 20 million people have received health insurance coverage through the program.

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The new CMS rule also allows states the possibility of modifying the medical loss ratio (MLR) formula, the amount an insurer spends on medical claims compared with income from premiums that is also a key performance metric. A state can request “reasonable adjustments” to the medical loss ratio standard if it shows that it could help stabilize its individual market.

Insurers could also have an easier time raising their rates under the new rule. Obamacare mandated that premium rate increases of 10 percent or more in the individual market be scrutinized by state regulators to ensure that they are necessary and reasonable. The new CMS rule raises that threshold to 15 percent.

Reporting By Yasmeen Abutaleb; Editing by Cynthia Osterman

U.S. Healthcare: Too Expensive, Too Complicated and Too Much Fraud (Twice the global average)

April 7, 2018

Another downside to U.S. healthcare system: Way more opportunities for fraud

Image result for medical professionals, photos

APR 06, 2018 | 3:00 AM
Los Angeles Times
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It’s no secret that Americans pay more for healthcare than people in all other developed countries. And a big reason for that is because our $3 trillion healthcare system is focused to a large extent on generating profits for businesses, rather than the well-being of patients.

Much of that profit-seeking is perfectly legitimate, by which I mean it’s frequently outrageous, unethical and immoral, but within the letter of the law.

Then there’s all the profiteering that occurs in the shadows, seeking to exploit the insane complexity of the U.S. healthcare system and in so doing drive costs even higher.

“All healthcare systems have fraud,” said David Frankford, a law professor at Rutgers University. “But the U.S. system is so complicated and so fragmented, it just makes it easier to get away with.”

A good example arose this week with the indictment of the owner of a Sacramento company, Trina Health, that offers what it calls “one of the most important advancements in the treatment of diabetes since insulin.”

G. Ford Gilbert was charged by the U.S. Justice Department with bribing an Alabama lawmaker to help expand Trina Health’s business by forcing an insurance company to cover the company’s treatment, which most major insurers, including Medicare, had deemed medically useless.

The indictment is eye-opening on a number of levels, not least the extremes this California business owner allegedly went to in order to pad his own pockets and enrich investors — all at the expense of insurers, which pass along costs to policyholders, and people with diabetes, who struggle daily with a chronic disease that’s the country’s seventh-leading cause of death.

Trina Health is named after Gilbert’s daughter. According to the company’s website, he was “driven by a father’s love” to help her after she was diagnosed as a child with Type 1 diabetes, which is the autoimmune kind, as opposed to Type 2, which is often the obesity kind.

Gilbert devised a treatment called “microburst insulin infusion,” which the site says is “nothing short of a miracle.”

The treatment “utilizes a precise high-pressure pulsation algorithm to intelligently perfuse insulin into a diabetic patient,” Trina Health says, claiming that “the serious complications from advanced diabetes are halted or reversed.”

I’m no doctor but I do know a thing or two about this disease (I have Type 1 diabetes myself). My sense is that although Gilbert says his treatment turned his daughter’s life around, it seems more snake oil than miracle cure. If it were as effective as he purports, it would be commonly prescribed by endocrinologists. It’s not.

Nor is there much of a case to be made for Trina Health’s claims that microburst insulin infusion can help not just with diabetes complications but also hypertension, chronic fatigue, wounds and erectile dysfunction.

The Centers for Medicare and Medicaid Services concluded in 2009 that the treatment, which consists of three hours of intravenous insulin injections on a weekly basis, “does not improve health outcomes in Medicare beneficiaries.” As such, it wasn’t worthy of coverage, Medicare said. Many private insurers followed suit.

Here’s where things get hinky. Allegedly.

According to the indictment, Gilbert, 70, who had licensed his technology to investors in various regions, came up with ways to alter billing codes so Medicare wouldn’t know it was paying for “insulin microbursts.”

“In 2014 and 2015, Trina Health opened three clinics in Alabama,” the Justice Department said. “Soon thereafter, the state’s largest health insurer, Blue Cross and Blue Shield of Alabama, informed Trina Health that it would not cover the treatments provided by them. Gilbert then schemed to force Blue Cross to change its position.”

He concocted legislation that would require the insurer to cover the procedure and “then made payments to State of Alabama House Majority Leader Micky Hammon in exchange for his efforts on behalf of the bill,” according to the Justice Department.

Gilbert hired a local lobbyist, Marty Connors, who helped persuade the chairman of the Commerce and Small Business Committee of the Alabama House of Representatives, Jack D. Williams, to hold a public hearing on the bill, the indictment says.

Williams knew of the payments to the majority leader, the Justice Department said, “and acted in part to help Hammon, who, as everyone in the scheme knew, was experiencing grave financial problems.” The bill eventually failed.

Gilbert was charged this week with wire fraud, healthcare fraud and interstate travel in aid of racketeering. Williams and Connors face similar charges. If convicted, each man could be imprisoned for up to 20 years.

Hammon pleaded guilty to mail fraud last September in a separate case involving use of campaign money for personal expenses. He was sentenced in February to three months in prison.

Neither Gilbert nor his lawyer returned calls requesting comment.

I don’t want to suggest we wouldn’t see alleged shenanigans such as this if we had a Medicare-for-all insurance system similar to just about every other developed country.

Despite the fact that most Europeans pay about half what Americans pay for healthcare, there’s still a European Healthcare Fraud and Corruption Network to keep tabs on scammers.

But it seems indisputable that the needless complexity of the U.S. system, and the emphasis on profits rather than patient protection, create an environment that doesn’t just encourage fraud, but greatly facilitates it.

By some estimates, 10 cents of every dollar spent on healthcare in this country is lost to fraud. That’s almost twice the global average.

“The vast number of providers and suppliers in our healthcare system will naturally lead to more opportunities for fraud,” said Pat Souter, a professor of healthcare studies at Baylor University School of Law.

While single-payer insurance systems found in other developed countries also have fraud, he said, “having a system such as ours, with the number of payers, contributes to increased opportunities.”

Each expert I spoke with said a higher rate of fraud is to some extent the price we pay for our free-market-driven medical system, which may be strong on innovation but is woefully lacking in transparency.

For me, the alleged actions of Gilbert and Trina Health demonstrate that this may be too high a price to pay.

It’s time this country explored a precise high-pressure pulsation algorithm to intelligently perfuse a little rationality into the healthcare market.

Which is to say, it’s time we simplified things.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.

http://www.latimes.com/business/lazarus/la-fi-lazarus-diabetes-executive-indicted-20180406-story.html

NHS bosses splurge £6m larking about in helicopters, go-karts and pubs

April 2, 2018

Government procurement cards are supposed to enable staff to easily fund office supplies and travel costs – but they’ve been used in Wetherspoon’s pubs, cocktail bars and bowling alleys

Health bosses have used taxpayer-funded credit cards to pay for go-karting and even helicopter lessons.

They have also been used in bars and burger joints — even though they are meant to fund office supplies and travel.

 One bigwig, Keith Conradi, has since been ordered to repay the £562 he shelled out for a helicopter training day

ALAMY
One bigwig, Keith Conradi, has since been ordered to repay the £562 he shelled out for a helicopter training day

Keith Conradi, head of the Healthcare Safety Investigation Branch, used his to pay for a £562 helicopter training day, the Daily Mail reported.

A Freedom of Information request to 11 health bodies and watchdogs found 692 staff spent £5.8million with government procurement cards in the past two years.

Staff at the Medicines and Healthcare products Regulatory Agency used them in McDonald’s and pubs.

At NHS Blood and Transplant, which oversees organ donations, they were used to fund a go-karting trip.

 At NHS Blood and Transplant, which oversees organ donations, the cards were used to fund a go-karting trip for team building

REX FEATURES
At NHS Blood and Transplant, which oversees organ donations, the cards were used to fund a go-karting trip for team building

The Department of Health said: “We have taken steps to ensure money spent on helicopter training has been recouped and will take further action if needed.”

https://www.thesun.co.uk/news/5952755/nhs-bosses-go-kart-helicopter-taxpayer/

A Trump Choice for Veterans — Shulkin Out. Hope for Veterans In?

March 31, 2018

Shulkin favored the status quo of limited health-care options.

Former Veterans Affairs Secretary David Shulkin speaks at a news conference at the Washington Veterans Affairs Medical Center in Washington, March 7.
Former Veterans Affairs Secretary David Shulkin speaks at a news conference at the Washington Veterans Affairs Medical Center in Washington, March 7. PHOTO: ANDREW HARNIK/ASSOCIATED PRESS

It wouldn’t be a normal week in Washington without a Trump Administration personnel melodrama. But this week’s removal of Veterans Affairs Secretary David Shulkin is important on the policy merits, and let’s hope his successor is more amenable to allowing retired service members to make their own health-care choices.

On Thursday Mr. Shulkin took to the New York Times to warn of “political appointees choosing to promote their agendas instead of what’s best for veterans” by supporting “privatization leading to the dismantling of the department’s extensive health care system.” This self-justification exercise will not be remembered as the most graceful exit.

Mr. Shulkin has been on the way out for several weeks, and his euphemisms are about his months of infighting with White House and other Administration officials. The unsubtle innuendo in the press is that Mr. Shulkin was run out by the nefarious Charles and David Koch through a policy group called Concerned Veterans for America.

Yet no one except Mr. Shulkin is talking about “privatization.” Concerned Veterans for America in a white paper has sketched out a plan to restructure the VA and allow it to focus more on the expertise its doctors have developed in, say, post-traumatic stress and prosthetics. The plan includes a premium-support payment so vets could buy discounted private coverage from a menu, much like federal employees do. A current vet who preferred to be treated for diabetes elsewhere would be free to make that choice.

At bottom this is a debate over political control and cost because allowing choice outside the system is expensive. We know that denying that escape valve often traps veterans in subpar facilities with unresponsive bureaucracies. But politicians have never wanted to take on the veterans interest groups that are attached to the status quo.

Mr. Shulkin indicts private industry though VA’s single-payer system has been responsible for some of the most macabre health-care scandals in history. Manipulated wait times that resulted in death; an opioid doctor known as “the candy man”; recall the many horror stories in 2014 from Tomah, Wis., to Phoenix.

So what’s going on? “Privatization” is in part a straw man to obscure Mr. Shulkin’s own behavior, including ethical lapses on misusing VA funds on travel. More substantively, Senator Jerry Moran at a hearing earlier this year called out Mr. Shulkin for “double talk,” by which he ostensibly meant claiming to support, while really opposing, a proposal that would provide more health-care choices for veterans.

The best bill before Congress is Mr. Moran’s with Senator John McCain. After rampant VA scandals, Congress in 2014 created a choice program that allows certain vets to receive care outside the VA. But the system is based in part on where a vet lives and wait-list times, not the severity of the ailment or needs of the patient. The Moran bill would correct this dysfunction with new standards and streamline many programs that allow vets to receive private care. The bill also opens up access to telemedicine and walk-in clinics, among other useful changes.

President Trump has chosen Ronny Jackson as a VA replacement, and the rear admiral is best known as the White House doctor. The rush is to declare him unqualified, and we wonder if Mr. Trump has put his nominee in a tough spot. Rear Admiral Jackson probably felt he couldn’t say no to his Commander in Chief, but he hasn’t been immersed in the emotive and complex politics of veterans.

He will now face a long and tough confirmation process in the Senate, and Mr. Trump had better not start bashing Rear Admiral Jackson if he stumbles as the President has other cabinet officials.

But checking the right boxes on a résumé didn’t help Mr. Shulkin, who by press reports couldn’t run his own communications department. That sounds less stressful than Rear Admiral Jackson’s stint in Iraq with a surgical shock trauma platoon. One piece of advice: Don’t become a target with first-class travel, stock trades or free Wimbledon tickets.

The White House managed the Shulkin affair with its usual backbiting and disorganization. But if the goal is to transform the VA to deliver better and more efficient health care for veterans, then perhaps the real Trump mistake was choosing Mr. Shulkin in the first place.

Appeared in the March 31, 2018, print edition.

https://www.wsj.com/articles/a-trump-choice-for-veterans-1522450915

Why Some Americans Are Skipping Health Insurance

March 26, 2018

Bloomberg

Prices and deductibles are rising. Networks are shrinking. And even some well-off Americans are questioning what they’re paying for.
Illustration: Cathryn Virginia

In tiny Marion, North Carolina, the Buchanans decided that $1,800 a month was too much to pay for health insurance, and are going without it for the first time in their lives.

In Harahan, one bend of the Mississippi river up from New Orleans, the Owenses looked at their doubling insurance premiums and decided no, as well. “We’re not poor people but we can’t afford health insurance,” Mimi Owens said.

And in a Phoenix suburb, the Bobbies and their son Joey will go uninsured so the family can save money to cover their nine-year-old daughter Sophia, who was born with five heart defects.

Across America there are thousands of people like the Buchanans, the Owenses and the Bobbies making the same hard decision to go without health insurance, despite the benefits. They’re risking it—betting that they’ve got enough savings, enough of a back-up plan, or enough luck to get them through a twisted knee, a cancer, or a car wreck.

Bloomberg is following a dozen of these families this year in an effort to understand the trade-offs when a dollar spent on health insurance can’t be spent on something else. Some are financially comfortable. Others are scraping by.

While the share of Americans without health insurance is near historic lows four years after the Affordable Care Act extended coverage to almost 20 million people, the Trump administration has been rolling back parts of the law. At the same time, the cost for many people to buy a health plan—if they don’t get it from a job or the government—is higher than ever.

No one had to tell the Buchanans about the risk. Dianna, 51, survived a bout with cancer 15 years ago. Keith, 48, has high blood pressure and takes testosterone shots. They live in Marion, North Carolina, and make more than $127,000 a year from the small IT business Keith runs and Dianna’s job as a physical therapy assistant, with some additional income from properties they own. That puts them in the top fifth of households by income.

But their insurance premium was $1,691 a month last year, triple their mortgage payment—and was going up to $1,813 this year. They also had a $5,000 per-person deductible, meaning that having and using their coverage could cost more than $30,000.

What sealed the deal was when Blue Cross and Blue Shield of North Carolina and the major hospital system in Asheville, Mission Health, couldn’t reach an agreement, putting the hospital out of network. Keith Buchanan compared the fight to a cable company battling with a broadcaster over what channels to carry.

“It was just two greed monsters fighting over money,” he said. “They’re both doing well, and the patients are the ones that come up short.”

Blue Cross and the hospital eventually made a deal, but enough was enough for the Buchanans. Instead of insurance, they’re paying $198 a month for membership in a local doctors’ practice. They get unlimited office visits and discounts on medications and lab tests. They also signed up for Liberty Health Share, a Christian group that pools members’ money to help pay for medical costs. Liberty costs $450 a month, including a $150 surcharge based on the couple’s blood pressure and weight.

Three days after dropping their Blue Cross coverage at the start of the year, Keith took a wrong step and injured his knee.

It could have been worse. He got it checked out at an urgent care center, where the visit and an X-ray cost him $511. That’s still less than he was paying in premiums to Blue Cross.

“If we can control our health-care costs for a couple of years, the difference that makes on our household income is phenomenal,” Buchanan said. The couple doesn’t have children.

There’s plenty of evidence that having insurance is a good thing. People with health coverage spend less out of pocket on medical care and are less likely to go bankrupt. They see the doctor more often and get more preventive care. They’re less depressed and tell researchers they feel healthier. Some studies suggest having insurance reduces the likelihood of death.

Despite those benefits, some 27.5 million Americans under age 65 were uninsured in 2016, about 10 percent of that population, according to the Kaiser Family Foundation. The most common reason: the cost was too high. A Gallup poll suggests that, after declining for years, the percentage of adults without coverage has increased slightlysince the end of 2016, when President Donald Trump was elected promised to dismantle Obamacare. Other data show no significant change.

The Affordable Care Act wasn’t just an expansion of insurance coverage. It also rearranged how Americans’ medical costs are distributed, favoring some and asking others to pay more.

People near the poverty line got Medicaid for free, while those making more—up to about $100,000 for a family of four—got subsidies to lower the price of private health plans.

Above that threshold, people pay the entire price. Because the law barred insurance companies from charging sick people more or refusing to cover them entirely, costs for healthy people went up as well. Some insurers have left the market, while others have sharply raised premiums to compensate for actions taken by Congress and the administration to weaken the law.

The Bobbie family remembers the problems that the ACA was intended to solve.

Their daughter Sophia was born with serious heart defects, and the organs inside her tiny abdomen were in all the wrong places. She spent the first two weeks of her life in a neonatal intensive care unit. On her six-month birthday, she had open-heart surgery. At nine months, doctors operated on her stomach.

Sophia qualified for Arizona’s Medicaid program. But when she turned 2, the Bobbies were told they made too much money for her to get low-cost state coverage. Her father Joe Bobbie, who co-owns a Philly steak shop with his brother, reduced his take-home pay so Sophia would still qualify.

She had another heart operation just before she turned 3. In just a few short years, her parents were told, Sophia’s medical costs had come to well over $1 million. Before the ACA, no private insurer was willing to cover Sophia’s pre-existing conditions.

“Every door, every option, everything was just slammed in our face,” Sophia’s mother, Corinne, said.  Medical costs that insurance didn’t cover piled up. The family skipped vacations and nights out, and lost their house and car because they couldn’t make the payments.

Corinne and Joe Bobbie, with their children Sophia and Joey.
Source: The Bobbie Family

Those sacrifices have been tough on the Bobbies, but they’ve let Sophia have a relatively normal life. She takes medication for blood pressure and blood-thinners, and a daily antibiotic because she was born without a spleen. She goes to school, rides horses, and plays piano. A recent tumble from her horse frightened her mom, but Sophia jumped up and climbed right back on.

When Obamacare coverage became available in 2014, the Bobbies, who made about $55,000 last year, bought a policy for Sophia that now costs $217 a month.

Adding Sophia’s seven-year-old little brother Joey, who’s healthy, would have cost another $160 per month, with a $6,000 deductible. So he’s uninsured, and so are Joe and Corinne. The money they save risking their own medical and financial health goes to paying Sophia’s bills.

“Every single decision that you make has to be very carefully calculated so that your finances don’t fall apart,” Corinne Bobbie said.

The Trump administration proposes to make it easier for Americans to buy cheaper health plans, which could open more affordable options for the rest of the Bobbie family. But those less-expensive choices, such as short-term health plans, would lack some of the consumer protections created by the Affordable Care Act that allowed Sophia to get coverage in the first place.

The tax proposal that became law in December will also lift the Affordable Care Act’s requirement that every American have coverage or pay a fine. Economists warn that these changes could further weaken insurance markets, pushing up costs for sick patients like Sophia—and forcing more people into similar choices.

Some states are already trying out the new rules, offering plans that don’t adhere to ACA’s requirements. In Idaho, the state’s Blue Cross insurer attempted to offer a “Freedom Plan” with annual limits on care and questionnaires that would let it charge higher premiums to people who are sick or likely to become so. The Trump administration reluctantly judged that such a plan would violate Obamacare’s rules. But federal officials encouraged Idaho to explore offering similar policies as short-term plans that can offer skimpier benefits and lower prices.

In Harahan, Louisiana, outside New Orleans, Mimi Owens learned this year that her family’s $750-a-month plan with Humana Inc. was being discontinued. A new plan for her two daughters and husband on the ACA market would cost close to $1,600. Their family makes about $147,000 from a small business selling class rings and gowns to schools.

Owens said they go to the doctor “for a sniffle, for a flu,” and have a few regular prescriptions, so they looked into short-term health plans and tried out a Christian health-sharing ministry for a few months. The best solution she’s found so far is paying $130 a month to join a direct-primary-care group, which she calls “the best care we’ve ever had.”

It doesn’t cover the big things, though. An accident like a car crash could wipe out their finances.

“We were raised to have insurance,” Owens said. “This is crazy to us.”

— With assistance by Hannah Recht

https://www.bloomberg.com/news/features/2018-03-26/why-some-americans-are-risking-it-and-skipping-health-insurance

Health-Insurance Premiums Loom as Election Issue

March 25, 2018

Lawmakers, at an impasse, omitted from spending bill an effort to restore payments to insurers. Now they’re rushing to assign blame for expected rate increases

A health insurance marketplace navigator in Nebraska last November helped a client sign up for health insurance. Insurers are set to announce premiums for 2019 this fall.
A health insurance marketplace navigator in Nebraska last November helped a client sign up for health insurance. Insurers are set to announce premiums for 2019 this fall. PHOTO: NATI HARNIK/ASSOCIATED PRESS

Health-insurance premiums are likely to jump right before the November elections, a result of Congress’s omission of federal money to shore up insurance exchanges  from its new spending package.

Lawmakers from both parties had pushed to include the funding in the $1.3 trillion spending law signed Friday, but they couldn’t agree on details. A battle has already begun over how to cast the blame for the expected rate increases.

Democrats blame GOP lawmakers for the failure of negotiations over the funding, saying Republican leaders demanded the inclusion of abortion restrictions they knew would be unacceptable to Democrats. Republicans say that they negotiated in good faith and that Democrats rejected reasonable rules on abortion.

The finger-pointing comes as health care is expected to be a top issue in this year’s midterm elections. Both parties face political risks, although polls have so far shown voters are more likely to hold Republicans responsible for high costs. In a Wall Street Journal/NBC News poll last summer, when GOP lawmakers were pushing to repeal the Obama-era Affordable Care Act, 43% of voters said Democrats would do a better job handling health care and 26% said Republicans.

In a recent special election in Pennsylvania, health care was ranked as a top issue by 52% of voters, according to a survey by Public Policy Polling, a firm aligned with Democrats. In that race, Republican Rick Saccone lost to Democrat Conor Lamb in a district Mr. Trump carried by almost 20 points.

Health-insurance premiums have been rising sharply for people who buy insurance on their own, rather than getting it through work or other programs, and dwindling participation by insurers has left such consumers with fewer choices.

Some lawmakers from both parties had pushed to include in the spending bill measures aimed at stabilizing the individual health-insurance market, especially restoring payments to insurers that offset the cost of subsidies they are required under the ACA to provide to some low-income consumers. President Donald Trump ended the payments last year, saying they were illegal because the money hadn’t been appropriated by Congress. The proposals also sought to give states money to help with expensive insurance claims.

Omitting the measures from the spending bill dims the prospects for such legislation this year. While some lawmakers are likely to push for separate legislation, the odds of passage are high amid rifts in Congress over whether to help support the health law as well as on the abortion restrictions.

That deals a blow to insurers who must soon determine what rates to charge next year. Without the payments, insurers may raise premiums or curtail participation in the ACA exchanges. The Congressional Budget Office estimates that gross premiums for a popular middle-priced plan offered through the insurance exchanges are, on average, about 10% higher this year than they would have been if the subsidies to insurers were funded, a figure set to grow to 20% by 2021. The CBO also expects premiums to rise as a result of the repeal of the requirement that most people have coverage or pay a penalty, something that might encourage healthier people to forgo insurance.

Democrats blame the expected premium increases on an ongoing push by the Trump administration and congressional Republicans to dismantle the ACA. Increases in health-care costs “have been exacerbated by the Trump administration’s efforts to sabotage the Affordable Care Act and destabilize health-care insurance markets,” said Sen. Elizabeth Warren (D., Mass.).

Republicans fault the ACA and its regulations for stifling competition and driving up premiums, saying the GOP cannot be blamed for the problems with a law the party has forcefully opposed for years.

Sen. Lamar Alexander (R., Tenn.) said Democrats torpedoed the stabilization measures in the spending bill by rejecting proposals to ban the funds from going to private insurers that cover abortions. This is similar to so-called Hyde language that applies to other government programs, Mr. Alexander said.

“We’ll let the Democrats scramble and continue in their embarrassment to explain how they’re going to vote to apply the Hyde language to 100 different programs in the omnibus bill, but not to a 40% health-insurance decrease,” Mr. Alexander said, referring to one prediction of how much a stabilization bill would cut premiums.

Democrats said Republicans were trying to seize on the stabilization effort to extend abortion restrictions beyond a careful compromise enshrined in the ACA, which says insurers can cover abortions but can’t use federal funding to do so.

Health-policy experts disagree on how much a stabilization bill would have helped. Even without additional funding from Congress, they say, any higher premiums will be offset for many people by other subsidies.

Some ACA supporters even worry that a stabilization plan would backfire. By giving more money to insurers, they say, it would allow insurers to keep individuals’ premiums lower, so the size of their subsidies would be reduced.

And many House Republicans view stabilization funding as a bailout of insurers. They are concerned that if they were to pass it, they would be punished by GOP voters for shoring up the health law they promised to repeal.

Still, without the stabilization funding, many lawmakers worry they could face political blowback in the fall, when insurers announce premiums for the next year.

“It’s about what the headlines will be about premium increases in the fall,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. “The optics are real in a political sense.”

New Jersey Aims to End Its Doctor Shortage: State opens first private medical school to open in more than six decades

March 24, 2018

Hackensack Meridian School of Medicine at Seton Hall University is state’s first private medical school to open in more than six decades

After it opens for its July term, Hackensack Meridian School of Medicine at Seton Hall University in Nutley, N.J., ultimately will educate some 3,000 students.
After it opens for its July term, Hackensack Meridian School of Medicine at Seton Hall University in Nutley, N.J., ultimately will educate some 3,000 students. PHOTO: KATY KOZ

Years in the making, Hackensack Meridian School of Medicine at Seton Hall University is finally ready for students.

The school, located at the former Hoffmann-La Roche campus in Nutley, N.J., is a joint venture of Seton Hall University and Hackensack Meridian Health. The college began accepting applications this week for its first class of 55 physicians, who will begin studies this July.

One of the school’s goals is to keep physicians in New Jersey, which is facing an estimated shortage of 3,000 doctors by 2020, said Robert Garrett, co-chief executive officer for Hackensack Meridian Health.

“We’ve seen a huge exodus from New Jersey with medical students receiving education out of state,” said Mr. Garrett. “We’re hoping to reverse a talent drain.”

Over just a few days, 400 people have applied, according to a spokeswoman for Hackensack Meridian, the state’s largest health network.

The school is New Jersey’s first private medical school to open in more than six decades, and now is the only one in the state. Over time, the school will grow to roughly 150 students per class, according to Hackensack Meridian. Combined with the classes from Seton Hall’s College of Nursing and its School of Health and Medical Sciences, some 3,000 students ultimately will call the college home, the network said.

The campus occupies some 100,000 square feet over 17 acres in a sprawling site about 12 miles from Manhattan. The buildings that comprise the medical school have state-of-the-art equipment left behind when Hoffmann-La Roche, a Swiss health-care company, moved its Nutley operation to California.

The new medical school announced its move into the former campus in January 2016. Since then it had been working toward accreditation, which it received in February.

Students will complete their training in the 16 hospitals that are part of the Hackensack Meridian Health network, school officials said. The curriculum will emphasize population health, officials said, and pair doctors with other health professionals to shadow families living in poor communities, the officials said. Over time, the expectation is for students to learn how to “partner with people from a broad range of disciplines” to best care for patients, said Dr. Bonita Stanton, the founding dean of the school.

Students will have the option of a year-round, three-year program, which would shave expenses from an annual tuition that runs upward of $50,000, officials said. A fourth year could be spent on a dual-degree program with engineering, for example. The school will open with an endowment of $100 million for scholarships, a school official said.

Write to Melanie Grayce West at melanie.west@wsj.com

https://www.wsj.com/articles/new-medical-school-in-new-jersey-starts-taking-applications-for-july-term-1521892800

Death of Texas teacher highlights true cost of US drugs

March 22, 2018

Flu victim should have paid much less for her medication, data show

No automatic alt text available.

By David Crow in New York
Financial Times
March 22, 2018

When Heather Holland, a primary school teacher, went to collect her flu medicine at a local drugstore in Texas in January, she balked at the price. The pharmacist said she would have to pay $116 out of her own pocket, so she left empty-handed.

Her husband returned to the pharmacy the next day to pay for the medicine, a generic version of Tamiflu, and Mrs Holland starting taking the drugs. But her condition continued to deteriorate. A few days later she died in hospital. She was 38.

There is no way of knowing whether Mrs Holland, who was in otherwise good health, would have survived if she had taken the medicine sooner, although the delay cannot have helped.

A Financial Times analysis of confidential and public pricing data has found that Mrs Holland should have paid much less for her flu medication.

Her story captured the attention of a US public already outraged by the soaring cost of healthcare, and prompted many to ask the same question: how is it that a common flu drug — which is on the world’s list of essential medicines — can end up costing so much in America?

The answer lies in part in the miserly health insurance policies now held by millions of Americans, but also in the way that access to drugs is managed by for-profit “middlemen” like CVS Health’s Caremark, Express Scripts and UnitedHealth’s Optum.

These middlemen, officially known as pharmacy benefit managers or PBMs, are unique to the private US healthcare system. Their business model involves amassing millions of patients from different health insurance plans, before using the combined heft to demand big discounts from drugmakers.

Pharmaceutical companies that refuse to discount their medicines can find themselves frozen off the lists of drugs that PBMs are willing to pay for, which can have a chilling effect on their sales. More often than not they agree to the price cuts.

But critics allege that PBMs have opaque business models that boost their profits while pushing up costs for patients.

If Mrs Holland had not used her insurance card and instead paid outright herself, she would have been charged roughly $107 for 10 tablets of generic Tamiflu, according to several pharmacies contacted by the Financial Times.

The cost would have fallen further still if she had foregone insurance and printed off a savings coupon from the website GoodRx. A 10-tablet pack of generic Tamiflu, also known as oseltamivir phosphate, can be bought by without insurance for about $52 with a coupon at Walmart, the grocery chain.

“What’s the point of having insurance, if it means you end up spending more than if you were uninsured,” asks John Norton from the National Community Pharmacists Association.

In Mrs Holland’s case, it is hard to lay the blame for the $116 charge at the door of the pharmaceuticals industry, which has borne the brunt of anger over soaring drug prices in recent years.

The list price for a 10-tablet pack of generic Tamiflu is about $129, according to figures seen by the FT, but the real negotiated price is significantly lower.

According to confidential invoices seen by the FT, pharmacies can acquire a pack of Tamiflu for $45.46 if they contract with the Walgreens Boots Alliance Development, a large purchasing organisation that supplies its own stores, other big chains, and independent pharmacists.

Other large drug purchasing consortiums, like Red Oak, of which CVS is a member, and an alliance of Walmart and McKesson, the wholesaler, can source the drug for a similar sum, according to people briefed on the negotiations.

That means the real amount being booked by generic drugmakers that sell the medicine is often below $45.46, after allowing for a cut taken by the wholesaler.

So why did Mrs Holland end up paying $116, and what happened to the roughly $70 difference?

Mrs Holland had such a high out-of-pocket charge because she was enrolled in a meagre health plan offered by the Teacher Retirement System of Texas (TRS), which charges families a monthly premium of roughly $1,300.

The state of Texas contributes just $75 per member each month, a sum that has remained constant since 2003, even as healthcare inflation has risen at an average of around five per cent a year over the past 14 years.

The true price of drugs? Tamiflu’s 5 different rates
$45.46
Pharmacy acquisition cost — amount paid by pharmacist to manufacturer / wholesaler

$51.94
Cash price with coupon — amount patient would pay with drug discount coupon

$106.99
Cash price — amount patient would pay in cash without coupon

$116.38
Out of pocket — amount patient in Texas teachers / CVS Caremark plan would pay

$128.83
Wholesale acquisition cost — list price advertised by drug manufacturer

The TRS health plan has what is known as a high-deductible: members have to cover all expenses until they hit a predefined limit of either $5,000 or $10,000 per family, at which point the insurance kicks in and covers 80 per cent of their drug bills.

TRS outsources management of its health plan to two companies: Aetna, a health insurer, which looks after medical benefits like visits to the doctor and hospitals procedures, and CVS Caremark, a PBM, which controls access to medicines. The companies recently announced plans to combine in a $69bn deal.

When Mrs Holland’s husband filled her prescription, a large chunk of the $70 difference was paid by the pharmacist to CVS Caremark, which kept an undisclosed cut before handing the remainder back to the Texas health plan.

A spokesperson for CVS Caremark said it could not comment on Mrs Holland’s case for privacy reasons, but added: “Our hearts go out to any family who has lost a loved one under these circumstances.”

CVS Caremark and other PBMs have touted their ability to secure discounts from drugmakers, as proven by the case of generic Tamiflu: pharmacies can acquire the drug for 64 per cent lower than list price.

But they have come under increasing scrutiny over what portion of these discounts they keep to boost profits, especially at a time when patients are struggling with rising healthcare costs.

“The vast discrepancy in what a drug costs the pharmacy and the amount it is sold for to the patient is pure profit for someone in the supply chain,” says Michael Rea, chief executive of Rx Savings Solutions, which makes software to help employers and patients cut their drug bills.

Stung by claims that drugmakers are solely to blame for soaring prices, the pharmaceuticals industry recently launched an advertising campaign with the slogan “Share the Savings”, arguing that discounts negotiated by PBMs should be handed back to patients.

“I don’t let pharmaceutical companies off the hook, but it’s true what they’re saying,” says David Mitchell, a pricing campaigner at Patients For Affordable Drugs. “The amount being paid by the PBM for the drug is much lower than the list price, and they are taking a huge piece of the action on the way through.”

PBMs insist their practices have a deflationary effect on drug spending overall. Although they do not disclose how much of the negotiated discount they keep, they insist the vast majority are returned to health plans.

Share this graphic
However, the Trump administration recently signalled that its long-promised push to lower drug prices will focus on PBMs. At an event this week, Alex Azar, the US health secretary, said he would bring forward proposals in a month to explore “how we bring discounts that the middlemen right now are getting to our patients”.

The largest health insurer, UnitedHealth Group, which operates its own PBM, Optum, said this month that it would pass on the “overwhelming majority” of discounts to some of its clients.

CVS also offers “point-of-sale” rebates to 12m of its 94m plan members, meaning that negotiated discounts feed through to the patient. Ultimately it is up to plan sponsors like TRS whether they offer the feature to their patients.

If others follow suit, it could mean a hit to profits for some companies in the healthcare supply chain. But it might also go some way to lowering the soaring drug bills being paid by patients like Mrs Holland.

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Restricted access

It is a bizarre feature of the broken US healthcare system that insured patients can sometimes end up paying more for medicines than people without coverage.

Some pharmacists say their contracts with insurers and pharmacy benefit managers can prevent them from informing the patient they could buy the drug at a lower price.

“We need to remove those constraints, so the pharmacist can be more proactive — they can help the patient find the best price by asking the right questions,” says John Norton from the National Community Pharmacists Association.

A group of bipartisan senators have introduced legislation designed to stop these “gag clauses” being included in contracts, while several states are also pushing new laws that target the practice.

PBMs and insurers say they back legislative change, and insist that such contractual arrangements are not commonplace.

“We support the patient always paying the lowest cost at the pharmacy counter,” says a spokesperson for the Pharmaceutical Care Management Association, the trade association for PBMs.

They add: “To the degree this issue was ever rooted in more than anecdotal information, it has been addressed in the marketplace.”

https://www.ft.com/content/a4cda604-2c86-11e8-a34a-7e7563b0b0f4

How to Complete the Escape From ObamaCare

March 16, 2018

Congress eliminated the individual mandate. There’s a way around the other onerous regulations.

The he tax-reform provision repealing the penalty on those who refuse to participate in ObamaCare has freed millions of Americans to escape a system that exploits them. But while Americans can escape ObamaCare, they still can’t buy insurance in the individual market independent of ObamaCare because private insurers are prohibited from selling it. If this prohibition can be removed through the granting of state waivers by the Department of Health and Human Services, or by the passage of a new federal statute, ObamaCare will collapse into a high-risk insurance pool for the seriously ill rather than become a stepping stone to socialized medicine.

The politics of the ObamaCare debate changed dramatically when the Congressional Budget Office determined that repealing the coverage mandate would save an astonishing $338 billion over 10 years. The saving would come from undisbursed subsidies, as lifting the tax penalty would induce an estimated 4.6 million people to flee from the exchanges. The number of Americans enrolled in ObamaCare plans is projected to plummet to 7.4 million by 2021, a mere 2.2% of the population.

The repeal of the tax penalty will progressively worsen ObamaCare’s risk pool as healthy enrollees who currently pay more into the system than the expected value of their coverage exit the exchanges. Premiums will rise at an accelerating rate for those who stay in the exchanges, forcing Democrats to find new funding or watch the program implode.

How to Complete the Escape From ObamaCare
ILLUSTRATION: BARBARA KELLEY

There are two ways to restore Americans’ freedom to buy health insurance independent of ObamaCare. First, HHS should grant waivers to states that want to let private insurers offer state-approved plans exempt from ObamaCare’s coverage mandates and rigged risk pool, enabling these states to expand health-care freedom inside their own borders. Second, Congress should amend ObamaCare to permit insurers to sell individual policies outside of the exchanges that are totally independent of ObamaCare regulations, which would dramatically increase the options available to every American.

Idaho is the first state to allow plans that stray from ObamaCare’s coverage mandates, and Blue Cross of Idaho has proposed five “Freedom Blue” plans outside the state exchange. The plans provide coverage similar to what is available on the exchange, but many are listed at about one-third the price because premiums are set to match individual health-risk profiles rather than subsidize the riskiest enrollees. The new plans also boost affordability by offering higher deductibles.

Idaho’s best chance at obtaining the feds’ blessing for its state-approved plans is to make the plans renewable every 12 months. This would allow them to qualify for the limited-duration exemption recently expanded by HHS. In a March 8 letter the administrator of the Centers for Medicare and Medicaid Services told Idaho Gov. Butch Otter : “These state based plans could be legally offered under the PHS [Public Health Service] Act exception for short-term, limited-duration plans.”

Democratic leaders in Congress were quick to recognize that Idaho’s plan to grant health-care freedom to its citizens posed a mortal threat to ObamaCare. Sens. Patty Murray and Ron Wyden were joined by Reps. Frank Pallone and Richard Neal in sending an intimidating letter to the director of Idaho’s Department of Insurance, threatening massive fines and demanding emails and phone records. Since Idaho has shown no sign of backing down, this battle is certain to escalate. Democrats clearly understand that if Idaho is able to market its “Freedom” insurance, as many as 30 Republican-led states will quickly follow its lead. Health-care freedom in Idaho could lead to the de facto end of ObamaCare throughout America.

The Trump administration and Congress are also working to expand health-care freedom nationwide. When the current administration reversed President Obama’s policy of making cost-sharing payments to keep insurance companies in the exchanges, insurers responded by raising the price of their federally subsidized benchmark insurance options. This premium increase on the benchmark policies triggered an automatic increase in the subsidies, all funded by federal taxpayers. State insurance regulators conveniently looked the other way in 2017, but ObamaCare specifically granted the federal government rate-review powers to prevent insurance companies from gaming the system. The benchmark ruse is unlikely to pass HHS scrutiny in 2018.

Before the repeal of the tax penalty, Democrats couldn’t bear the political cost of being seen as dismantling ObamaCare, but they will be forced to act as the program contracts. As healthier families flee the exchanges and premiums spiral, Democrats will be desperate to boost the subsidies. Politically, it will be very difficult for Democrats to deny people who have voluntarily left the exchanges the freedom to buy their own health insurance independent of ObamaCare regulations. Their stubborn reluctance to permit more-flexible plans will provide cover for Republicans to oppose increasing subsidies to the exchanges.

State and federal action to restore health-care freedom would allow new health-care initiatives, such as the partnership among Amazon, Berkshire Hathaway and JPMorgan Chase , to increase innovation in the insurance market. If more than 40% of people enrolled in the exchanges are expected to flee even when the only alternative is to become uninsured, we can expect the number exiting the exchanges to grow substantially when private alternatives are made available. This accelerated exit will reduce ObamaCare to a high-risk insurance pool. At that point the country can have a real debate about how high-risk care should be structured and funded, and whether it should be administered by states or the federal government. Such a program would undoubtedly enjoy stronger bipartisan support than America’s current restrictive health-care law.

Mr. Gramm, a former chairman of the Senate Banking Committee, is a visiting scholar at the American Enterprise Institute.

Appeared in the March 16, 2018, print edition.

 https://www.wsj.com/articles/how-to-complete-the-escape-from-obamacare-1521153431