This is just amazing.
This is less amazing.
Top Weekly Healthcare Stories
Macro | Healthcare Models
5% of Patients Comprise 50% of Costs. Here’s an Interesting Solution – Leveraged Primary Care
A Scalable Primary Care Model.
- Two physicians writing for the Harvard Business Review (soft paywall) unveiled a primary care model they think will reduce healthcare costs and provide better patient outcomes.
From the article: The top 50% of healthcare costs are made up of just 5% of patients. Of that 5 %, patients can be broken down into 3 main buckets:
1. People with Chronic Disease.
With conditions like diabetes, these patients use E Rs heavily, see doctors often, and get hospitalized the most. This category makes up 30% of the 50% of healthcare costs (15% of total costs for you math wizards). The physicians identified this category as having the most opportunity for cost savings.
2. People with Catastrophic Health Events.
- These conditions are uncontrollable – you get cancer, fall off a roof, etc. They make up 35% of costs (17.5% of total) and unfortunately are hard to predict. Because they’re unpredictable, there are little savings to be had from this category.
3. People with Severe Medical Conditions.
- I.e., the people from category one, except their conditions worsened (heart failure, chronic renal disease, etc.). These conditions require expensive and consistent treatment and comprise 35% of costs (17.5% of total).
So, how do we save money on these patients?
- Enter the Leveraged Primary Care Model. The model includes enhanced support for primary care doctors, which means having access to specialists, low-cost medical assistants, and advanced IT systems.
- The authors touted this model’s scalability across all physician platforms and contrasted the approach with disease management, which they think is far more costly and only works appropriately for a smaller subset of the population.
M&A | Private Equity
Partners Acquires EyeCare Partners for $2.2 Billion
In a transaction valued at $2.2 billion, Partners Group, a private equity investment firm, is buying EyeCare Partners, which is one of the largest providers of eye services in the U.S.
Why this matters.
This transaction marks one of the first investment exits made by a private equity firm in the physician practice space.
- FFL Partners originally bought EyeCare Partners back in 2015, meaning its investment horizon was only 4 years.
- Over that 4 years, EyeCare Partners expanded to 453 locations in 2019 from 63 locations back in 2015. According to the WSJ, Its revenue grew an average of 65% per year over that same timeframe.
- EyeCare Partners was then sold for a very high price relative to its current earnings.
- If private equity can achieve returns on investment like this, they’re going to stick around healthcare for a while. And new entrants will come chasing those same returns.
Read more about the transaction: Here’s the source link from Partners and here’s the writeup from the WSJ.
Policy Corner
Policy | 2020 Election Update
Latest Healthcare Election News
Political Risk: A reported by Axios, if the ACA is repealed, Trump might lose out big time politically because the most affected states are ones that typically swing presidential elections.
On to the Democrats.
Read a summary of Democratic candidate healthcare positions here.
Andrew Yang: Read his healthcare plan.
Elizabeth Warren: Shifted her rhetoric to emphasize voter ‘choice’ in healthcare insurance plans. She thinks that once her public option 100 day plan gets a trial run, voters will choose it over private options.
Joe Biden: Is a “healthy, vigorous” male at age 77. Good for him.
Michael Bloomberg: Joins the Public Health Option bandwagon
- Policy Lingo: What’s a “Public Health Option” all these candidates are talking about?
From the Debate: Candidates wondered whether Medicare for All is realistic, but healthcare wasn’t discussed much at this one.
Policy | Healthcare Spending Bill
Things You Should Know
Spending Bill Surprises: A recap of all of the healthcare policies changing in Congress’ $1.4 trillion spending bill.
- ACA tax repeals
- Tobacco age to 21
- More U.S. HIV funding
- Promote generic drug competition
- Gun violence funding
- Suicide prevention funding
- Extending DSH payment delays
- Funding U.S. territory Medicaid services
- Read more on the spending bill here
More on those healthcare tax repeals…
- The U.S. spending deal repealed insurance and medical device taxes.
- According to a non-partisan analysis, those repeals are expected to decrease tax revenues by $373 billion over the next 10 years. Remember that these taxes weren’t ever in effect – but would have phased in in 2020 or soon thereafter.
Conspicuously missing from the spending bill…
- Two major Congressional healthcare agenda items were left out of the December spending bill: surprise billing and drug pricing legislation. So let’s touch on the state of surprise billing next.
Other Trump things:
- Organ Donors: The Trump admin is interested in increasing organ donations.
- Drug Importation: Read about Trump’s plan to import prescription drugs from Canada. The pilot will allow states to import medication for certain types of drugs. To ensure quality, drugs will be retested and relabeled. Canada isn’t really a fan of this plan, so that could be a major hurdle here…just maybe.
- I should note that HHS released a report estimating the potential savings from this plan…except they left a blank table (page 5) where the estimates should have gone. Meaning they have no idea what the true impact will be.
Seema Verma: The CMS head might just be miserable to work with.
ACA | Supreme Court
Big ACA News: Appeals Court Decides Individual Mandate is Unconstitutional
Last week’s edition touched on the ACA case involving whether the individual mandate (AKA, you better have insurance or face a fine) was constitutional, and whether that made the whole ACA unconstitutional.
This week, an appeals court officially struck down the individual mandate. HOWEVER, they left the decision of the legality of the ACA up to the court that made the original ruling.
Bottom Line.
Most experts think that the ruling is on faulty footing. They argue that the individual mandate was removed in 2017 with Trump’s tax cut, and the ACA continued on, business as usual.
Anyway, see you guys in the Supreme Court. That case will be expected to hit in late 2020 – which means healthcare will stay front and center during Election 2020.
- Read more: HHS’ and healthcare groups’ responses to the news.
Legislation | Surprise Billing
Surprise Billing to Continue into 2020, and Other Things to Know
Surprise billing is sort of moving in the right direction. Even though Congress missed on a solution this year, tangible proposals are taking shape, and I wouldn’t expect 2020 to pass by without a bill.
Sides of Surprise Billing.
What does everyone want?
- The AMA (Providers): Wants independent dispute resolution, AKA arbitration, for out of network emergency bills. For bills lower than the $750 threshold, they want payment higher than the median in-network payment rate for that region. They claim that payment data from insurers are skewed, so setting payment at the median might not be accurate.
- The AHA (Hospitals): Has a similar viewpoint to the AMA.
- The AHIP (Insurance): Feels the opposite way. They want a “fair” market-based reimbursement standard for out of network bills. And they’re NOT fans of arbitration.
- The People want no surprise bills.
How does surprise billing affect us?
Glad you asked. Higher out-of-network spending raises overall healthcare costs, which leads to you and me paying higher premiums on our insurance. See for yourself.
- A Health Affairs analysis estimated that getting rid of surprise out of network billing for just 4 types of physician specialists could save $40 billion a year.
What’s next up? Another try this spring.
CMS | Payments
2020 Site Neutral Payments are Happening
A federal judge decided not to halt CMS’ plans to introduce site-neutral payments in 2020.
Here’s a general timeline of the site neutral stuff:
- -CMS implements site neutral payments for 2019.
- -Hospitals sue.
- -Hospitals win because site neutral policy isn’t budget neutral.
- -Despite losing, CMS implements site neutral payments for 2020.
- -Hospitals sue, saying that they just won this same case for 2019.
- -Hospitals lose for now – the federal judge decides not to intervene for 2020.
- –Up next: hospitals will appeal sometime in 2020.
Quick Hits
Biz Hits
Novartis: dumps its asthma drug program phase 3 failures.
Humana: is acquiring Enclara Healthcare, one of the nation’s largest hospice pharmacy and benefit management providers.
Cigna: Uses Artificial Intelligence to see if patients are taking medications.
Lawsuits everywhere: CVS, opioid makers, TeamHealth, and Illumina are all facing serious legal action.
Quorum Health: Is selling a hospital for $1.00. This is not a typo.
Monopoly Money: The FTC wants to block DNA sequencer Illumina’s acquisition of PacBio and called the company a monopolist.
State Hits
New Jersey Merger: 11-hospital system RWJBarnabas and St. Peter’s University are exploring a merger.
In Milwaukee: Ascension St. Joe’s has ‘trust issues’ to work through with its community.
Other Hits
Prescription Drugs (NY Times): The hidden drug epidemic among older people
Vaping: Damages lungs, but isn’t as bad as smoking.
Bizarre: The weirdest medical cases of 2019.
Ten People: Nature’s ten people who mattered in science in 2019.
Pop Culture: Ever wondered which medical TV shows are the most accurate?
Health Insurance: What happens when a health plan has no limits? An acupuncturist earns $677 a session.
Fraud: KHN argues that legal medical billing would be considered fraud in most other sectors.
Overwhelming Obesity: Almost half the U.S. population will be considered obese by 2040.
Play the Lottery? (WSJ) Drawing criticism from a wide range of patient advocates, Novartis is introducing a lottery-based system to give away its $2.1 million drug for free.
Thought-Provoking Editorials
Letter to the editor: Nurse practitioners are not ‘mid-level’ providers (Beckers)
What would happen if the ACA went away? (KHN)
Why Big Tech Companies Won’t Solve Healthcare’s Biggest Challenges
Why digital health has been such a disappointment, and how to change that
Thanks for reading. Save yourself some time by subscribing to our all-in-one newsletter, bringing you the top healthcare news across 40+ reputable sources – once a week.