High-deductible and skinny health insurance plans drive medical debt

A recent Urban Institute report highlights the issue of medical debt but fails to examine two of the chief driving forces of this debt: inadequate enrollment in comprehensive health care coverage and high-deductible health plans that intentionally push more costs onto patients. It also fails to appreciate the looming crisis when the public health emergency ends and Medicaid enrollment could plummet. As the extent of medical debt shows, both the government and the private market is failing too many patients, leaving too many either uninsured or with subpar plans that expose too many people to bills they cannot afford to pay. While hospital financial assistance is crucial to helping many individuals of limited means access care, it is no substitute for a solution that gets to the root causes of medical debt.

American Hospital Association | March 2023

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Prior authorization nightmares prompt Kansas lawmakers to consider new regulations

A debate is raging nationally regarding prior authorization. You’re probably familiar with it. It’s a common practice in medicine today. Your doctor says you need a particular medicine, or diagnostic test, but your insurance company has to approve it first. Getting it approved can take weeks—or even longer. The process impacts large health systems and private practices. “It has really deep-reaching impacts to healthcare, and most importantly to the patients,” said Dr. Timothy Williamson with the University of Kansas Health System. “There’s really has been negative impact to patients.” Prior authorization is a requirement by most health plans. Its purpose is to contain costs and confirm the service or medication is “medically necessary.” But many doctors believe it has gotten out of hand. The first submission is routinely denied.

KCTV | March 2023

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Prescription drug middlemen are jacking up prices

The rising cost of prescription drugs continues to be a top concern for many Americans. One of the leading culprits in pushing those costs even higher are pharmacy benefit managers (PBMs) — companies whose behavior is so egregious that Democrats and Republicans are united in trying to reform them. Yet, in a recent piece for the Washington Examiner, Ashley Herzog, a freelancer for the Heartland Institute, defended PBMs and argued against the PBM Transparency Act, a bipartisan bill that would hold PBMs accountable. To understand why the PBM Transparency Act is so important, and why Herzog’s argument is misplaced, it’s important to consider the role PBMs play in the healthcare industry, specifically when it comes to drug pricing. The three largest PBMs control 80% of all prescriptions in the U.S. In fact, they own, or are owned by, some of the largest insurance companies in the world. They extract “rebates” from drug companies in exchange for preferential placement on insurance companies’ lists of covered drugs. In other words, it’s pay-to-play. In 2021, they collected $200 billion in rebates from drugmakers. That’s 40% of every dollar spent on pharmaceuticals. Whether or how much any of that is passed on to patients is a mystery.

Washington Examiner | March 2023

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'Patients should flee from UnitedHealthcare' amid changes to prior authorization, says 1 gastroenterologist

UnitedHealthcare, an insurer of 45 million patients worldwide, has announced changes to its prior authorization requirements for gastroenterology care, set to take effect June 1. New requirements will require patients on a United commercial plan to seek prior authorization for gastroenterology endoscopy services. Practicing gastroenterologists are not happy about the change, warning that it could have potentially dire consequences for GI patients. Already, physicians report prior authorization challenges causing delays to necessary medical care for patients up to 94 percent of the time, according to a survey from the American Medical Association.

Becker's ASC | March 2023

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Pharmacy Benefit Managers Are An Unsung Source of High Drug Prices

The high cost of prescription drugs has been an issue on the minds of many Americans for years. Now, Congress is beginning to investigate a previously under-the-radar culprit behind the sky-high prices, Pharmacy benefit managers (PBMs)…They have a set of underhanded tactics at their disposal to pad their bottom line, while keeping drug costs higher for employers, health plans, and – ultimately – patients.The first way this is done is through rebates. A PBM could negotiate to purchase prescriptions from a pharmaceutical company for $500 per month, but agree to a $100 per month rebate every time a purchase comes in. So, the true cost is $400 per month. However, the PBM can – and often does – pocket a large portion of that rebate. In this instance, PBMs could keep $80 of the $100 rebate and only pass along the other $20 to employers. Employers, meanwhile, think they get a nice discount to $480 per month from $500. However, the pharmaceutical company could have just sold it for $400. The difference is that the PBM could not have pocketed a nice rebate for itself. In this way, PBMs are incentivized to keep prescription prices higher, so they have the opportunity to negotiate higher rebates. If drug costs went down, or employers paid closer to face value, PBM profits would plummet. The second way this is accomplished is through what’s called “spread pricing.”

RealClear Markets | March 2023

 

Here's how much diabetes costs employers each year

Diabetes costs employers billions every year in both direct costs and indirect costs, as the disease impacts productivity and absenteeism, according to new data from Nomi Health. The direct healthcare provider analyzed the costs associated with diabetes as part of its Trends in Spend Tracker, which uses claims data to identify shifts in healthcare spending. Nomi Health examined about 500,000 employer claims, and estimated that diabetes costs them $245 billion per year. Of that, about $175 billion in annual spending is direct costs, such as medication and treatment. The remaining $70 billion is related to indirect costs, such as absenteeism, lost productivity and disability, according to the report.

Fierce Health Care | March 2023

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Surveyed physicians say prior authorization harms patient outcomes, burns healthcare resources

Current prior authorization practices drive worse patient outcomes and increased utilization of healthcare resources due to unnecessary encounters or ineffective care, a majority of physicians said in a survey conducted by the American Medical Association. Released this week, the December poll of 1,001 practicing physicians outlined unintended outcomes resulting from treatment approval processes required by payers in a bid to control costs. Specifically, 86% of respondents told the professional organization that prior authorization “sometimes, often or always” leads to higher overall utilization of healthcare resources. Just under two-thirds said that prior authorization has led to ineffective initial treatments, while 62% pointed to additional office visits and 46% to immediate care and/or emergency room visits resulting from the practice.

Fierce Healthcare | March 2023

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EBRI, Commonwealth study finds that support for employer-based health benefits remains strong

When the Affordable Care Act (ACA) was passed in 2010, one of the main concerns — which was often used to argue against passage of the health care reform bill — was that Americans would stop enrolling in employer-based plans and instead jump to the government-controlled ACA marketplace. More than ten years later, that prediction has not come true. In fact, companies and employees alike seem to see health benefits as an important feature of employment, with companies often competing to offer the best health plans at the most affordable price. A new report, “What Employers Say About the Future of Employer-Sponsored Health Insurance,” found that employers see health benefits as a valuable recruitment and retention tool and have worked hard to keep such benefits as an expected part of the relationship between employer and employee. As a result, more than 70% of working Americans get their health insurance through their employer.

BenefitsPro | March 2023

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Democrats search for the next big thing on health care

First it was passing the ACA. Then it was defending the ACA. Then it was allowing Medicare to negotiate drug prices.     But when we asked lawmakers and outside groups what the Democrats' next major health care goal will be, we did not get one clear answer. Instead, we got lots of smaller, wonkier answers. Why it matters: It's a sign that the Democrats don't yet agree on the next big thing — and that could leave their health care agenda scattered in Congress over the next two years. What they're saying: "There's a lot of good ideas out there, but this often happens, once you get a big victory you often need a little time to form consensus on what's next," Sen. Chris Murphy told Axios.

Axios | March 2023

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Millions May See Lower Out-of-Pocket Costs for Heart Medications. Inflation Reduction Act may make cardiovascular therapy more affordable for Medicare beneficiaries

Cardiovascular disease is the leading cause of death worldwide, including in the United States, where about 20 percent of all deaths are caused by heart disease. Highly effective medications can lower the rates of death and disability related to cardiovascular diseases. However, the expense of long-term prescription medications represents a significant barrier to care for many patients with chronic cardiovascular conditions. The Inflation Reduction Act — signed into law in August 2022 — includes several clauses related to drug benefits that are expected to lower prescription medication costs for Medicare Part D beneficiaries over time and expand low-income subsidies.

Harvard Medical School | March 2023

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How major retailers are trying to change how America consumes health care

Amazon, Walmart, CVS, Dollar General and other big retailers are elbowing their way into health care delivery, pushing a customized consumer experience driven by digital health products. What's happening: At its core, these companies are pulling together different tech-enabled services — urgent, primary, home and specialty care, pharmacy, and, in some cases, full integration with an insurer. Why it matters: A more user-friendly portal to the health system could lead to more engaged patients and better access to care in underserved areas. But the retailers' forays are prompting growing anti-trust and privacy concerns, as well as fears of further erosion of the doctor-patient relationship once considered central to coordinated care. 

Axios | March 2023

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Many Americans Are Likely to Skip Preventive Care if ACA Coverage Falls Through

At least 2 in 5 U.S. adults said they would not pay out of pocket for 11 of 12 preventive services currently covered by the Affordable Care Act.

Morning Consult | March 2023

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Even with lawsuits and copay caps, will insulin ever be affordable?

In an attempt to tackle the root causes of the inflated cost of insulin, the state of California filed a lawsuit last week accusing drug manufacturers and pharmacy benefit managers of artificially and illegally jacking up the price of insulin. The sausage-making of how insulin is priced is not for the faint of heart. It’s a complex tangle of drug manufacturers who’ve been resisting generics, health insurance companies trying to keep up impressive profits, plus the wholesalers who distribute medicines to pharmacies and the pharmacies that provide them to patients. Slithered into this midst are the pharmacy benefit managers, companies that negotiate the prices for medications on behalf of insurance companies and administer the prescription drug aspect of individuals’ health insurance.

STAT | January 2023

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Upcoding: one reason Medicare Advantage companies pay clinicians to make home health checkups

At the start of 2023, an estimated 2.5 million Americans age 65 and older began using Medicare Advantage programs. Some made this choice in response to aggressive marketing campaigns. This brings the total enrollment of Medicare Advantage plans to nearly 31 million. One unexpected “benefit” of these plans is an offer by the insurance company sponsoring the plan to send a nurse or physician’s assistant, often from a startup company, to an individual’s home. There is no charge for the visit, and the insurance company may even pay the beneficiary for agreeing to do this. Some companies call relentlessly to get the offer accepted. Before explaining whose interests these visits serve, it helps to tease out the roles of the players. Health insurance companies do not deliver health care. That’s what medical providers and groups do. The primary role of insurance companies is to pay the bills; they profit by taking in more money from beneficiaries than they pay for the medical care they need. To be sure, this distinction is getting murky: some health insurers have bought medical provider groups, and some health systems offer health insurance.

STAT | January 2023

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Record High in U.S. Put Off Medical Care Due to Cost in 2022

The percentage of Americans reporting they or a family member postponed medical treatment in 2022 due to cost rose 12 points in one year, to 38%, the highest in Gallup’s 22-year trend. Each year since 2001, Gallup has tracked Americans’ self-reports of delaying medical care in the past 12 months due to cost. The latest reading, from Gallup’s annual Health and Healthcare poll conducted Nov. 9-Dec. 2, is the highest by five points and marks the sharpest year-over-year increase to date. Story highlights: 38% say they put off treatment, up 12 percentage points from 2021.  27% say medical treatment was for a very or somewhat serious condition. Lower-income, younger adults, women most likely to report delaying care.

Gallup | January 2023

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Toledo's passage of medical debt relief having ripple effect across country 

Now that Toledo has decided to funnel a portion of federal relief money to a proposal that calls for relieving medical debt for several thousand residents, other municipalities are following suit. In November, Toledo City Council joined with the Lucas County commissioners to allocate $1.6 million in American Rescue Plan Act funds to RIP Medical Debt. In turn, the New York-based nonprofit organization will purchase medical debt from hospitals, health systems, and collection agencies at steep discounts. Once the debt is acquired, any collection efforts associated with that debt are wiped out with no imposed tax consequences, or penalties to the recipient. Officials in New Orleans are finalizing a $1.3 million contract with RIP Medical Debt, and Pittsburgh City Council recently approved a budget that includes $1 million for medical debt relief. The idea that relieving medical debt for citizens is good public policy seems to be catching on, RIP Medical Debt CEO Allison Sesso said. 

Toledo's Blade | January 2023

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Pharmacy Benefit Managers and the Federal Trade CommissionA Relationship Gone Sour 

On June 7, 2022, the Federal Trade Commission (FTC) announced its decision to launch an inquiry into the business practices of pharmacy benefit managers (PBMs).1 Although it is premature to presume that the investigation will lead to changes in the PBM market, the initiative was nonetheless cheered by the many policy experts that fault PBMs for increasing prescription drug prices. This is not, however, the first time that the FTC crossed paths with the PBMs. Earlier encounters offer a useful window into the evolving PBM market and the associated policy challenges. This Viewpoint offers a reminder of why PBMs emerged in the first place, why they have amassed such alarming influence, and how they positioned themselves as powerful actors within the prescription drug distribution system. 

JAMA | January 2023

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Colorado lawmakers want to make EpiPens cheaper for most residents 

A bill in the Colorado legislature would cap the out-of-pocket cost of epinephrine auto-injectors at $60 for a pack of two. They are used to treat severe allergic reactions. House Bill 23-1002 would cap patients’ out-of-pocket cost for epinephrine auto-injectors at $60 for a pack of two, which is how they’re typically sold, starting in January 2024. The bill also would create a program for people whose out-of-pocket costs for EpiPens or their generic equivalents weren’t limited by the cap, and who aren’t covered by Medicare or Medicaid. Eligible people could receive two-packs of auto-injectors for $60, as needed, for one year. Manufacturers would have to either reimburse a pharmacy for the difference between what it paid for the auto-injector and the $60 it collected from a patient, or send the pharmacy a replacement pack. 

Denver Post | January 2023

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 CVS explores a $10B acquisition of Oak Street Health 

 CVS Health Corp. is exploring an acquisition of Oak Street Health Inc., which runs primary care centers for Medicare recipients, according to people familiar with the matter. A deal could be reached within weeks that would value Oak Street at more than $10 billion, including debt, said the people, who asked to not be identified because the matter isn’t public. Talks between the companies are ongoing and could end without an agreement, the people said. Oak Street, which went public in 2020, aims to reinvent care for Medicare patients with low incomes and chronic health problems. The company says its high-touch approach — frequent checkups, preventive screenings and meetings with social workers — can reduce patients’ medical costs. 

BenefitsPro/Bloomberg | January 2023

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More Patients Cite Out-of-Pocket Costs as Care Access Barrier
The number of patients saying out-of-pocket healthcare costs are a care access barrier is the highest it’s been since the start of the COVID-19 pandemic. Three in 10 Americans are citing high out-of-pocket patient costs as a care access barrier, with those patients telling a West Health and Gallup poll that they skipped necessary medical care in the past three months because of financial challenges. The survey of over 6,500 respondents, obtained via email, showed out-of-pocket healthcare costs are a problem even for the richest people. Among those households making more than $120,000 annually, 20 percent said they did not access healthcare in the past three months due to high costs. These figures represent a peak for the nation. The overall rate of cost-related delayed care is the highest it’s been since the start of the COVID-19 pandemic. For the richest households, the rate of cost-related delayed care is 3 percent higher than it was between March and October of 2021.

The Patient Engagement HIT | December 2021