riskadjustment

Part 2: My Courageous Daughter Is Having Brain Surgery!

This is one of a number of blogs that will appear on my daughter.  I call her Kitty.  She is a wonderfully talented, bright, and empathetic individual in her late ‘20s.  She and I agreed I would write this series to impart how important health coverage is. Not only is her decision to have surgery courageous, but so is her decision to share her journey through me. The principal reason to share the journey is because we both want to explain what many average Americans go through financially when they have major operations and do not have the best insurance or no insurance at all.  My daughter is privileged to come from a well-off family and to have consistent and robust insurance.  This will mean that she will pay a tiny amount for a surgery with a sticker price in the hundreds of thousands of dollars.  But for uninsured and

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What’s Up? Medicare Costs Will Be Up in 2024, While Medicaid Will Be Down At The Same Time

The Congressional Budget Office (CBO) has reported one of those weird conundrums in healthcare when it outlined expected cost increases in Medicare and Medicaid for 2024.  The CBO said that Medicare is expected to shoot up dramatically just as Medicaid expenditures will drop considerably as well. How is that possible? Let’s dig in here. Medicare The CBO says that Medicare spending will increase by about $65 billion in 2024 to $865 billion.  That is an increase of about 8%.  The significant rise in expected Medicare costs is driven by a few different things: In the outyears, outlays for Medicare will equal 3.2 percent of gross domestic product (GDP) in 2025 and increase to 4.2 percent of GDP in 2034. Medicaid On the flip side, the CBO says Medicaid expenditures will decrease by $58 billion to $557 billion.  This is a drop of about 9%.  The reason for this drop is driven by

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Senate HELP Committee Hearing On Drug Pricing Shows The Deep Divide In Congress

While I covered the topic in my Newsfeed on February 8 and 9, I thought it was important to blog about the February 8 Senate Health, Education, Labor and Pension (HELP) drug price hearing. I have listened to every minute of the almost three-hour drug maker CEO hearing (where three brand drug makers testified) as well as an additional thirty-minute hearing presenting the views of advocates and researchers. I want to share my reaction. First, it is important to remember that, while I am a Republican, I march up the middle of the spectrum on health policy in general and share many of the views that Democrats do on drug pricing. I tend to favor what the Democrats have done on drug pricing because I think movement needs to happen and what has passed in the Inflation Reduction Act’s (IRA) Medicare drug price negotiations is a good experiment. Second, the

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Part 1: My Courageous Daughter Is Having Brain Surgery!

This is one of a number of blogs that will appear on my daughter.  I call her Kitty.  She is a wonderfully talented, bright, and empathetic individual in her late ‘20s.  She and I agreed I would write this series to impart how important health coverage is. Not only is her decision to have surgery courageous, but so is her decision to share her journey through me. The principal reason to share the journey is because we both want to explain what many average Americans go through financially when they have major operations and do not have the best insurance or no insurance at all.  My daughter is privileged to come from a well-off family and to have consistent and robust insurance.  This will mean that she will pay a tiny amount for a surgery with a sticker price in the hundreds of thousands of dollars.  But for uninsured and

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Value-Based Care Payments And Arrangements Explained

A few readers have written in and asked if I could explain the various value-based-care (VBC) payment and arrangement frameworks. Specifically, they asked about my references to global and partial risk funds for providers.  Here is my best effort to explain what I see as the two overall types of VBC payments/arrangements we see in the marketplace today. Purpose VBC payments are meant to move from the fee-for-service (FFS) transactional payment system to one driven by efficiency and quality.  What do I mean by transaction payments? For the past many decades, most payments in our healthcare system were made as a fee for each service transacted in the healthcare system.  That can be the case when we go to the primary care physician (PCP), where he or she will be paid a fee by the insurer for the visit as well as other services provided. Similarly, a specialist may be

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2025 Rates for Medicare Advantage Plans Look Tight

My latest blogs have touched upon the fact that while Medicare Advantage (MA) continues to grow, MA plans in the program are facing a number of financial challenges: While MA plans prepared for the worse, the advanced notice of MA payments for 2025 could very well compound the problem, even with increased enrollment – which is robust and driven by the clear difference between the value of MA vs. the traditional fee-for-service (FFS) program. It will remain that way. See my last blog on all this: https://www.healthcarelabyrinth.com/with-boom-over-will-medicare-advantage-collapse-or-adjust/ So let’s take a look at the advanced 2025 MA rate notice. Controversy over calculations Each year there is a robust debate on how to even calculate what the year over year increases will be in MA. It revolves around risk score trends. Risk scores tend to inflate each year in the program. MA plans would argue risk scores predict the costs of

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With Boom Over, Will Medicare Advantage Collapse Or Adjust?

After I posted my last blog Thursday ( https://www.healthcarelabyrinth.com/with-medical-expense-rising-what-are-health-plans-to-do/ ) and people digested what was happening with insurers’ stocks last week, a number of readers contacted me asking me to opine further on what was happening in MA. Many asked: “Is the Medicare boom over and is Medicare Advantage (MA) somehow collapsing under the weight of growing medical expense and government regulations?” They told me that they read many articles that implied MA was done — kaput! Indeed, my blogs have struck an alarmist cord at times about what is happening in MA, while other times I continue to extol the value and continued success of MA. So what’s up? It is a fair question and impression after the MA news over the past few weeks. Indeed, I give you a mixed review on MA on this site for good reasons. Refresh on issues Let’s refresh a bit on that

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January 26, 2024

2023 Bankruptcies Highest In Five Years As was reported earlier, another report also shows that bankruptcies were very high in the healthcare arena in 2023.  Hospitals, pharmaceutical and senior care companies were on the list. Additional articles here: https://www.modernhealthcare.com/finance/healthcare-bankruptcies-2023-gibbins-advisors and https://www.healthcaredive.com/news/healthcare-bankruptcies-spike-2023-gibbins-advisors/705738/ (Some articles may require a subscription.) #hospitals #healthcare #bankruptcies Link to Article Biden Administration Strikes Again On Mergers The Federal Trade Commission opposes another prominent merger – Novant Health’s purchase of two Community Health Systems hospitals. Additional article here: https://www.healthcaredive.com/news/federal-trade-commission-sues-block-novant-health-community-health-systems-hospital-acquisition/705648/ #mergers #acquisitions #ftc #antitrust Link to Article Drug Maker CEOs To Appear On Capitol Hill A day after some very bad press, Johnson & Johnson CEO Joaquin Duato, Merck CEO Robert Davis and Bristol Myers Squibb CEO Chris Boerner all said they would appear at  hearing on drug pricing.  Additional article here: https://www.statnews.com/2024/01/26/merck-johnson-johnson-ceos-drug-prices/ (Some articles may require a subscription.) #drugpricing #branddrugmakers Link to Article Medicaid Enrollment Losses Under Redeterminations

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January 25, 2024

Humana Reconfirms Bad News On Utilization In MA After an earlier filing, Humana reconfirmed bad news on the medical expense front. Because it is a predominant Medicare Advantage (MA) insurer, it has seen a major and unexpected rise in utilization, which impacted the company’s 2023 numbers and prospects for 2024 and beyond.  Broussard is one of the smartest healthcare leaders out there and he is someone I listen to closely. Given the medical expense rise, rate compression, and regulatory changes (such as the new prior authorization rule), Broussard said he expects similar pricing adjustments from other payers, as the spike in utilization along with ongoing regulatory changes will have major impacts in 2025 and potentially beyond. Broussard says this could very well be industrywide. Humana reduced benefits for 2024 and this could be a continued trend into the future. Humana plans on cutting about $700 million in administrative costs. It

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With Medical Expense Rising, What Are Health Plans To Do?

Insurer stocks were rocked recently by news that both United Healthcare and Humana saw unexpected medical expense increases.  After filings with the Securities and Exchange Commission (SEC) and quarterly investors relations calls, these two companies’ stocks as well as those of other insurers tumbled.  Elevance Health also reported its Q4 2023 and full year 2023 results. It beat the trend.  It reported medical expense in line with expectations, but did note some increases in areas.  We are sure to see other plans report unexpected increases, with the biggest impacts likely seen at plans with major enrollment in Medicare Advantage (MA). And many plans are gearing up for additional layoffs and other administrative cuts due to the medical expense concerns. Why are plans seeing increases in medical costs?  First, utilization is slowly returning to normal in the healthcare industry post the COVID pandemic.  Second, inflation is taking root again and it

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