Here’s the most Googled disease in each state. What’s up with Illinois?
Healthcare’s 5 Biggest Stories, Week of May 13, 2019
1. Drug List Prices are now required on TV Ads
The Countdown Begins.
In an act that is almost certainly going to be challenged in court, HHS released its final ruling requiring all drug manufacturers to disclose drug prices in TV advertisements, in an effort to increase consumer awareness about drug prices. The pricing information must be displayed in a “legible textual statement at the end of the advertisement” for a “sufficient duration.” Drug-makers aren’t allowed to use any wacky fonts, either. Bummer – I was holding out hope for Wingdings.
A Lopsided Effect.
Interestingly enough, the ruling affects the five biggest drug-makers quite disproportionately, as StatNews reports. Pfizer, AbbVie, Eli Lilly, Amgen, and Allergan together comprised over half of all drug television ads over the past year. In response to the ruling, the drug-makers argued that drug list prices are an ineffective way of increasing price transparency, since insurance plans negotiate lower rates for their consumers anyway. Together with PhRMA, the powerful drug advocacy lobbying group, drug-makers have announced their own commitment to drug pricing transparency in their own way – by publishing pricing tools online and creating voluntary guidelines that they argue would increase transparency in a more effective manner than what was proposed by HHS. They have about 60 days to comply with HHS before the hammer comes down.
2. 40+ States Attack Generic Drug-Makers with Scathing Price Fixing Lawsuit
Drug Pricing Conspiracy.
As if drug-makers couldn’t get any more PR lately, 40+ states filed a massive lawsuit on Friday that blames generic drug-makers for price fixing (AKA, keeping generic drug prices higher than they should be). They might have a point, considering some of the drugs mentioned in the lawsuit shot up thousands of percentage points over a few short years. For instance, the average market price of doxycycline increased over 8,000% in a single year. Oof. The lawsuit accuses 20+ companies of wrongdoing including collusion to ‘divide’ up the generic market in an effort to avoid competition with one another. The lawsuit singles out Teva Pharmaceuticals in particular as a central figure in the pricing conspiracy. In response, the drug-maker aggressively denied wrongdoing (duh). The unnaturally high generic prices could result in higher insurance premiums for the average consumer in the long run, which is why states are keen on getting to the bottom of these allegations. Drug-makers are, after all, the most profitable segment of the healthcare industry.
3. Huge Price Disparities between Medicare and Private Insurers
Speaking of Healthcare Pricing…
A study released by RAND Corp concluded that private insurers (AKA, the health plans that most employed people are covered) pay hospitals 241% more on average than Medicare does for the same services. The pricing study is the most comprehensive one to date, since it covered almost 1,600 hospitals in 25 different states – although the study did acknowledge its somewhat small sample size. Before we get ahead of ourselves here with the pitchforks, though, let’s remember – generally, Medicare generally reimburses hospitals at below-cost or at break-even levels of cost of care for patients, as the American Hospital Association is keen to point out. Hospitals argue that higher private insurance payments are needed to keep their lights on. Still, the study raises a few noteworthy observations – there are wide variations in payment rates from state to state. Is expensive care better than no care?
A Closer Look.
What each private insurer pays hospitals relative to Medicare reimbursement rates – by state. Indiana tops the list at 311% of Medicare, while Michigan resides at the low end at 156%
4. Surprise Billing Marches Forward as Trump Jumps into Action
A Tricky Issue.
As an update to our 5th story on the February 1st edition, President Trump continued his comments regarding support for a solution to surprise billing. Oddly enough, doctors, hospitals, and insurance providers all want to end surprise billing price gouging practices, yet they all seem to be at odds over the proper solution to the issue. Moral of the story: nobody wants to get stuck with sticker-shocking ER bills to pay.
What are the Proposed Surprise Billing Solutions?
The Trump Admin seems to be in favor of bundled payments – where the hospital and provider would receive one payment for services rendered. Some states, including Colorado, have introduced legislation to limit surprise billing to a maximum fixed percentage of Medicare – in Colorado’s case, no more than 125%. Others, like New York, prefer arbitration. Under New York’s arbitration, patients are not required to pay more than in-network rates, and an independent arbitrator resolves the payment difference between the insurer and provider. Although many solutions have been proposed (with some even already implemented at the state level), none have taken a firm federal hold. Stay tuned!
5. Medical Device Patents have Skyrocketed since 2007
A surge of medical devices.
With a 50% share of the global medical device market, the U.S. experienced a surge in medical device patents over the past 10 years, according to research conducted by Kilpatrick Townsend – significantly higher than any other observed industry. Of the various device segments, wearable device (AKA, Apple Watch), telehealth (AKA virtual visits; looking at you, Teladoc)) and surgical device (AKA, robotics) patent filings grew at the highest rates. Wearable devices drew a massive 359% increase in patent filings from 2007 to 2018, followed by a 181% increase in surgical device filings over that same time period. Coincidentally, most industry leaders identified these segments as having high growth potential in the near future. For instance, the Telehealth market is projected to reach a whopping $93.5 billion by 2026, according to Reuters.
Quick Hits
The marked variation in healthcare costs.
Tennessee is requesting an unprecedented block grant payment from Medicaid, but are block grants even legal?
Aetna just launched Attain, its health and wellness app with an Apple Watch perk.
Centene is VERY COMMITTED to its WellCare deal, despite the Humana buyout rumors.
The stem cell industry, often thought of as a pipedream industry, is highly unregulated.
Home Care’s employee turnover just reached an all time high of 82%!
Speaking of home care, AT&T is joining the home care industry with Remote Patient Monitoring.
UnitedHealth’s CEO is pretty confident in the managed care monster – he just bought up 20,000 shares.
The Ensign Group plans to spin off its home health and hospice business into a new company called the Pennant Group, which will comprise 60 home health agencies, and 51 senior living centers.