May 13, 2024

Kaiser Reports Good Financial News

Kaiser Permanente reported $935 million of operating income (3.4% operating margin) and more than $2.7 billion of net income. This beats Q1 2023 dramatically. Kaiser is also looking to sell off up to $3.5 billion of its investment stakes.

Additional articles: https://www.modernhealthcare.com/finance/kaiser-permanente-investments-wsj and https://www.beckershospitalreview.com/finance/kaiser-posts-935m-operating-profit-in-q1.html

(Some articles may require a subscription.) 

#kaiserpermanente #healthplans #hospitals


RAND Study Shows Huge Gap Between Commercial And Medicare Hospital Payments

RAND reports in a new study that there is a huge gap between commercial and Medicare’s fee-for-service hospital payments for inpatient and outpatient services. The gap has increased as well. In 2022, employers and private insurers paid hospitals on average 254% of what Medicare pays. This is up from 224% in 2020 and 247% in 2018. Some states had prices that had a gap of over 300%, while others had prices below 200%.

See my blog about my daughter’s brain surgery.  There I reported after research that hospital billed charges tend to be 2.5 to 3 times Medicare payments and commercial payments to hospitals are about double Medicare. It would appear that things are worsening: https://www.healthcarelabyrinth.com/part-3-my-courageous-daughter-is-having-brain-surgery/

Additional articles: https://www.modernhealthcare.com/providers/rand-hospital-prices-medicare-2022 and https://www.axios.com/2024/05/13/hospitals-private-insurance-rand and https://www.beckershospitalreview.com/finance/private-insurers-paid-hospitals-254-medicare-rates-in-2022-5-things-to-know.html and https://www.beckerspayer.com/payer/10-states-where-commercial-insurers-pay-hospitals-the-highest-rates.html

(Some articles may require a subscription.)

#hospitals #healthplans #commercial #medicare #rates


Ascension Says It Was Victim Of Ransomware Attack

Multi-state Catholic hospital system says it indeed was a victim of a ransomware attack that continues to impact operations. A new study finds that healthcare entities are at most risk of cyberattacks. Reports say that the Black Basta group is behind the attack.  It uses phishing and exploitation of known vulnerabilities to access systems. It engages in double exploitation by encrypting systems to stop use as well as stealing protected health information.

Additional articles: https://www.fiercehealthcare.com/providers/systems-clinical-operations-interrupted-ascension-amid-apparent-cybersecurity-event and https://www.healthcaredive.com/news/ascension-cybersecurity-emergency-diversion-ehr-down/715762/ and https://insidehealthpolicy.com/daily-news/health-care-industry-most-risk-cyberattack

(Some articles require a subscription.)

#cyberattacks #healthcare


Report On For-Profit System Executive Pay

Fierce Healthcare reports on for-profit health system pay.  Like health plan compensation, it is very high. As well, read “The Healthcare Blog” article on high pay in health systems generally.

Additional article: https://thehealthcareblog.com/blog/2024/05/13/108066/ .

#executivecompensation #healthcare


Healthcare Dive Recaps Quarter

The Healthcare Dive does a great recap of Q1 2024.  It covers the Change Healthcare cyberattack, medical loss ratio trends, Medicaid activities, and Medicaid-Medicare integration. Good read.

I love the chart showing Q1 2023 to Q1 2024 medical loss ratios (MLRs).  While all of the Big 7 public health plans had higher MLRs, Humana and Aetna saw huge increases – Humana because it is largely an MA insurer and Aetna because of its huge MA growth.

#medicareadvantage #mlr #healthplans


Walgreens May Sell Boots Alliance

Walgreens Boots Alliance Inc. may sell the Boots drugstore chain in the UK.

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PhRMA-Friendly Analysis Attacks Study Cited By Sanders On Weight-Loss Drug Costs

A new study from free-market think tank Pacific Research Institute (PRI) says the Yale study cited by Sen. Bernie Sanders, I-VT, when he attacks GLP-1 pricing is misleading. The new study attacks Yale for reporting just the monthly production cost of less than $5 and not including the cost of drug development. Fair enough, but it is hard to argue that GLP-1s are not overpriced given Brand Pharma’s profits and the fact that costs are much lower in other developed countries. PRI says those comparisons do not simulate comparisons using gross domestic product per capita adjusted for purchasing power parity.  The fact is we are talking developed countries here and there is no way to explain monthly price tags of $1,000 on average or more in the U.S. vs. $155 a month in Canada and $59 in Germany. Indeed, PRI didn’t even bother providing details in this area to substantiate their point.

(Article may require a subscription.)

#drugpricing #weightlossdrugs #branddrugmakers


A Right-Leaning Health Institute Proposes Medicare Reforms

The right-leaning Paragon Health Institute has a new study authored by a former Trump administration budget official that recommends reducing government subsidies for higher-income Medicare beneficiaries to help right the Medicare ship of state. Expanded means testing would occur. Specifically, the proposal suggests the following:

  • Lowering income thresholds or increasing existing premium percentage rates
  • Exploring lifetime earnings or related metrics as a basis for means-testing
  • Expanding means testing beyond Part B or D premiums, including new premiums on Part A or assessing higher cost-sharing

I am supportive of discussions on many reforms for Medicare.  Paragon now has a plan.  The House GOP Study Committee has proposed reforms. The Heritage Foundation has ideas.  The Congressional Budget Office (CBO) also came up with a number of saving scenarios. What is a dereliction of duty is the fact that neither President Biden nor former President Trump will put forward a complete proposal to stabilize Medicare (short of Biden’s tax proposals and drug price reform).

(Article may require a subscription.)



Becker’s Details Site-Neutral Payments

Congratulations to Becker’s Hospital Review for its great discussion of site-neutral policies.  With hospitals opposed to the reform, it took a bit of courage for the hospital trade publication to strike such a good balance.  As everyone knows, I believe site-neutral payment policies are critical to lowering price in America.

#siteneutral #hospitals


— Marc S. Ryan

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