Happy June!
Everyone’s favorite pharma bro is suing people from prison.
Also, today’s edition is only 4 stories. Sue me.
Healthcare heavyweights throw shade at Trump’s attempted healthcare pricing executive order
Healthcare heavyweights pull an Andy Ruiz.
You might have missed it among all the other healthcare legislation drafted last week (catch up on that here), but in the midst of it all, Trump has been preparing to issue an executive order that would force increased price transparency. Is that even within the executive branch’s constitutional powers? Anyway, as we all expected, this potentially disruptive change was hit with a massive amount of backlash from the healthcare industry.
So what’s the major beef?
The AHA argued that the order would cause the opposite of the desired effect and ultimately cause prices to RISE, as the price disclosures could create a FLOOR for prices. Insurers aren’t happy about the news, either. The price negotiations are closely held trade secrets, and advocate groups argued that pulling the rug out from under those arrangements could result in a form of “bad transparency.” Both sides (shockingly) agreed that in such a situation of negotiation, there needs to exist at least a little bit of privacy.
My thoughts.
This price disclosure policy could actually have a substantial impact on the industry, but only in situations where the patient makes informed healthcare decisions based on price. Most of it boils down to the patient: if the patient blindly follows a physician’s orders regarding site of care, or doesn’t receive treatment at the appropriate setting, then price disclosures probably won’t really even matter.
Furthermore, the pricing policy might not be as effective in areas where less competition exists. Areas dominated by a few large health systems (think mainly rural regions) would theoretically maintain a good amount of pricing leverage.
Cigna and Connecticut scuffle over proposed public health plan
Pivoting to state news – remember when we talked about Washington passing a public health plan option in the May 20th edition? Well, Connecticut was trying to pass something similar, except this plan would have been much more limited as to who was eligible for the public plan. This plan, though, was faced with massive opposition from Cigna, which made for quite the hairy situation. Can I get some #HealthcareDrama?
Sharply-Worded concerns.
Some who listened to the insurer’s remarks about the bill assert that Cigna threatened to leave its home state if the public option weren’t nixed. Cigna claims they said no such thing. Some legislators called Cigna’s remarks “sharply worded concerns.” I’ll leave that up to the experts to decide what actually happened. Later, the insurance company stated that the legislation would “not be helpful to businesses that provide health insurance,” and that the plan “threatens the long-term viability and vitality of the state.”
It’s notable to mention that Cigna actually doesn’t have any customers on any of the plans that would have been affected by the public option, since the bill was only intended to cover both individuals and employers with less than 50 employees. Still, as constituents of the state, Cigna’s opposition left lawmakers to question whether the public option needed some revision. As a result, legislators are taking a step back to reconsider the bill and make sure everyone’s on the same page next time.
Healthcare laws might be stifling payment innovation
Some healthcare specific laws, specifically the Stark and Anti-Kickback statutes, might be preventing new value based payment models from maximizing their potential. For instance, health systems might try innovative approaches to rewarding physicians for various quality metrics.
Blurring the regulatory line.
But because the law strictly prohibits health systems from giving financial or other rewards for physician referrals, the other, well-intentioned payments/incentives for value based care could also get caught up in the regulation, too (i.e., others may think that the health system is rewarding that physician for referring patients to them – which is illegal – rather than fairly reimbursing the physician under an alternative payment model).
As a result, many executives are asking for a reform to Stark and anti-kickback statutes, especially as value-based care models grow increasingly prevalent in our modern-day healthcare system. These health execs want the outdated laws to address newer forms of reimbursement and draw lines that health systems can’t cross in the new value-based wild frontier.
Stop me if you’ve heard this before: a lab testing startup gets in major trouble after lying to a bunch of people about a bunch of things
ANOTHA’ ONE.
What’s with it with these healthcare startups and their propensity for fraud? Following Theranos’ legendary footsteps, the microbiome testing startup cleverly named uBiome is refunding federal insurers after engaging in some faulty billing practices. The story actually goes further than that and gets a bit wild. Maybe they’ll get a book, too.
House of cards.
uBiome’s original co-founders were given the boot after its board discovered the billing practices. Don’t even mention the fact that they were in a romantic relationship AND one of them lied about their age to be put on Business Insider’s “30 under 30” feature. To put a cherry on top of uBiome’s issues, the new CEO then discovered a plethora of hidden expenses and liabilities running through the startup’s financial statements. So…if I were a betting man, I’d say uBiome might not be around much longer. Oof.
Quick Hits
State highlights.
New York is (once again) mulling over single-payer (paywall – WSJ). And Utah is trying to cap Medicaid spending (don’t forget – previously, the state attempted to expand Medicaid and only partially succeeded)
Business highlights.
Universal Health Services invested a minority stake in Vera Whole Health Primary Care. It doesn’t seem like the DOJ is a huge fan of the Centene-WellCare Deal, which seems much more likely now that Humana’s bid for Centene is off the table. Here’s the top 4 medical device players. Acadia Healthcare is looking to sell its UK biz. And here’s a fantastic summary of the state of the PBM market.
Policy/Other highlights.
Healthcare spending is projected to hit $3.6 trillion this year, up from $3.5 trillion last year. There’s another battle brewing over lien practices. And what’s the potential impact of higher Medicare payments for rural hospitals?