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Enriched By The Poor: California Health Insurers Make Billions Through Medicaid

Kaiser Health News:Insurance - November 06, 2017

Medicaid is rarely associated with getting rich. The patients are poor, the budgets tight and payments to doctors often paltry.

But some insurance companies are reaping spectacular profits off the taxpayer-funded program in California, even when the state finds their patient care is subpar.

A unit of Centene Corp., the largest Medicaid insurer nationwide, raked in $1.1 billion in profits from 2014 to 2016, according to state data obtained and analyzed by Kaiser Health News. Anthem, another industry giant, turned a profit of $549 million from California’s Medicaid program in the same period.

This story also ran in the Los Angeles Times. It can be republished for free (details).

Overall, Medicaid insurers in the Golden State made $5.4 billion in profits from 2014 to 2016, in part because the state paid higher rates during the inaugural years of the nation’s Medicaid expansion under the Affordable Care Act. Last year, they made more money than all Medicaid insurers combined in 34 other states with managed care plans.

“Those profits are gigantic — wow,” said Glenn Melnick, a health economist and professor at the University of Southern California.

Alan Sager, a health-policy professor at Boston University, was surprised — and dismayed.

“California is being wildly open handed and excessively generous with insurers,” he said.

Jennifer Kent, California’s Medicaid director, said that health plan profits were higher than anticipated during the ACA expansion. But she said the state expects to recoup a significant amount of money within the next year, once audits are complete and retroactive rate adjustments are made.

“We’re going to be taking a lot of money back. We’re talking billions of dollars,” Kent said in an interview last week. No one should think “these plans just made off like bandits and we’re not going to see them again … We are very mindful we use taxpayer money.”

Health insurers who profited substantially from Medicaid, known as Medi-Cal in California, defend their good fortune. They say these surpluses follow losses in earlier years, and they always run the risk of red ink if medical costs jump.

“The expansion may have been a little rich in the beginning,” said Jeff Myers, chief executive of the Medicaid Health Plans of America, an industry trade group. But “you are starting to see margins come back down.”

More than 1 in 3 Californians, or 13.5 million people, are covered by Medicaid — more than the entire population of Pennsylvania. About 80 percent of those in California’s program are enrolled in a managed-care plan, in which insurers receive a fixed rate per person to handle their medical care. The goal is to control costs and better coordinate care.

In anticipation of the Obamacare rollout, officials in California and elsewhere boosted their payments to managed-care companies because they expected Medicaid costs to increase as newly insured patients rushed to the doctor or emergency room after going years without coverage. But those sharply higher costs didn’t materialize — and insurers pocketed more money as a result.

Moreover, California’s payments keep flowing steadily even when patients fare poorly. Two of the most profitable insurers in California — Centene and Anthem — run some of the worst-performing Medicaid plans, according to medical quality scores and complaints in government records.

“If there is that much extra money sloshing around in California, then it’s worth asking whether you could expect more in terms of performance,” said Andy Schneider, a research professor with Georgetown University’s Center for Children and Families.

California officials acknowledge they need to do a better job of connecting money and quality.

“We are looking at alternative payment methods and those types of things that we can do to help improve and to tie quality to payment,” said Lindy Harrington, a deputy director at the California Department of Health Care Services, which runs Medi-Cal. “But as you can imagine, it’s a difficult ship to turn.”

Medi-Cal Suddenly A Cash Cow

Before the ACA expansion, California’s Medicaid plans collectively were barely in the black, with $226 million of net income for 2012 and 2013 combined. Traditionally, these insurance contracts have yielded slim profit margins of 2 percent to 3 percent. California said it aims for 2 percent when setting rates, based on prior claims experience and projected costs.

Get The Data

Kaiser Health News exclusively obtained five years of financial results for health plans in California’s Medicaid managed-care program, which has more than 10 million enrollees.

Look up revenues, expenses and profits for each plan from 2012 to 2016 here.

But in the years since the health law took effect, many health insurers have posted margins two or three times that benchmark.

Centene’s Health Net unit in California enjoyed a profit margin of 7.2 percent from 2014 to 2016. Centene acquired Health Net for $6.3 billion in March 2016. Anthem’s profit margin in California’s Medicaid program was 8.1 percent for 2014 to 2016.

Investors have cheered those results. Shares in Anthem have more than doubled since January 2014, when the Medicaid expansion began. Centene shares are up 50 percent since the company purchased Health Net last year.

“We have proven our ability to provide high-quality, cost-effective healthcare to state beneficiaries while saving states money and delivering strong returns to our shareholders,” Michael Neidorff, Centene’s chairman and chief executive, told investors in February.

In a statement, Health Net said its profit margins are comparable to other Medi-Cal health plans and the company has made major investments to improve Californians’ health and access to care.

Anthem declined to comment on its financial results. The company said in a statement that it has worked with the state to meet the needs of Medicaid patients by extending clinic hours and helping with transportation to appointments. The company said it’s committed to providing “high quality care to our Medi-Cal members.”

Charles Bacchi, chief executive of the California Association of Health Plans, said they deserve some credit for making the Medicaid expansion work.

“The expansion was an incredible lift and we can’t do it for nothing,” he said. “It would be a shame to look at one snapshot in time and ignore the success of California’s expansion that has helped millions of people.”

Overall, Centene has 7 million Medicaid enrollees across the country, with about 2 million in California. Anthem is close behind with 6.4 million Medicaid members, about 1.3 million in the state.

With so many people’s healthcare at stake, state officials say they did not want to risk having health plans come up short during the expansion.

As it turned out, they need not have worried.

A nationwide study published in September found that average monthly spending on newly eligible Medicaid enrollees was 21 percent less than the amount spent on those who were already eligible. It helped that many of the new enrollees appeared to use fewer medical services than those already on the program, researchers said.

In 34 states and the District of Columbia, Medicaid managed-care profits more than tripled to $3.9 billion in 2015 from $1.1 billion in 2013, according to consulting firm Health Management Associates’ analysis of insurance filings. Those figures don’t include California.

By 2016, profits dropped as some states reduced Medicaid rates to insurers to reflect the lower costs incurred during expansion. Kent, the California Medicaid director, said the state’s rates paid to insurers for enrollees in the expanded program have decreased by 38.5 percent since January 2014.

The federal government footed the entire bill for Medicaid expansion during the first three years, instead of taking the usual approach of splitting the costs with states. Now, states have more incentive to rein in spending, as their share of the costs grows to 10 percent by 2020.

Quality Not In The Equation

In the meantime, however, some evidence suggests that in California, richer plans provided care of poorer quality.

The state scores Medi-Cal insurers from zero to 100 percent on how they perform on dozens of measures, such as diabetes testing, cancer screenings and checkups for children. Statewide, the average score was 63 percent for 2016.

For Centene and its Health Net unit, seven of its 10 regional health plans in Medi-Cal scored below average on quality. The company’s San Joaquin health plan ranked last statewide at 31 percent. State officials have ordered the company to improve in areas such as ensuring women get postpartum care and providing routine eye exams and other tests for diabetics.

Among patients, a chief complaint is how hard it is to find a specialized doctor. In a March audit, Medi-Cal said Health Net “did not maintain an adequate number of specialists within its network.” The state found that “member grievances on referral for services and availability of appointments with specialists were among the highest complaints.”

Five months later, after reviewing the company’s corrective actions, the state said Health Net was back in compliance.

Chandra Marshall, a Medicaid patient in Modesto, Calif., said she has suffered from limited access to specialty care.

She said her primary-care doctor in her Health Net plan recently recommended she visit a dermatologist for a biopsy. But she said the only available dermatologist on her plan was 90 miles away in San Francisco.

Worried she might have skin cancer, Marshall agreed to go but still hasn’t heard back about an appointment.

“Why can’t Health Net afford more specialists in the area?” said Marshall, who also suffers from kidney disease. “If Health Net doesn’t provide access to dermatologists and other specialists, people may just risk [not going].”

Her Health Net plan in Stanislaus County scored below 50 percent on quality care measures.

In a statement, Health Net said it is “committed to helping improve the quality and availability of healthcare services for our members that produce enhanced health outcomes. We work diligently with our contracting medical groups to help ensure our members get care that is easy to access.”

In the case of Anthem, eight of its 12 regional Medi-Cal plans scored below average on patient care. The state has told Anthem to do better at providing prenatal care, controlling patients’ high blood pressure and monitoring medications for asthma patients, among other issues.

In a written response to questions, Anthem said its scores have improved over time and two of its plans, in San Francisco and Tulare counties, are among the top 10 statewide.

While not tied directly to payments, California officials said they do reward insurers with higher quality scores by assigning more Medicaid enrollees to those plans.

Profits A Political Hot Button

The profits of managed care plans feed into Republican criticism of the ACA’s costs and its expanded Medicaid rolls. President Donald Trump has called for the law’s repeal, in part, because it enriches health insurers.

“They have made a fortune,” Trump tweeted on Oct. 13.

Sen. Ron Johnson (R-Wis.) has demanded that California and seven other states account for how they spent federal Medicaid expansion dollars. Johnson, chairman of the Senate Homeland Security and Governmental Affairs Committee, asked California officials in a letter Sept. 27 whether they have conducted audits and requested information on insurance company payouts.

In an Oct. 11 response, Kent said the state spent $6,181 per expansion enrollee in 2015, below the national average of $6,365.

“California is a cost efficient Medicaid program,” she wrote.

By one standard measure, the state’s oversight has been less than efficient.

Starting in 2014, the federal government required that 85 percent of Medicaid expansion funding be spent on care and quality improvement efforts, rather than administrative overhead and profits. But three years in, California officials acknowledged they have just started audits to determine whether companies might have to return excess money.

What’s clear is that insurers’ spending on both expansion and traditional Medicaid enrollees often falls short. Eight of California’s 22 Medicaid insurers failed to hit 85 percent in medical spending for the year ending June 30, 2016, according to state data obtained by Kaiser Health News. Anthem ranked lowest at 77 percent; Health Net spent 81 percent of Medicaid premiums on medical care, state records show.

Each percentage point below the threshold can amount to tens of millions of dollars that should have been spent on behalf of patients.

In July, a federal rule went into effect establishing 85 percent as a national benchmark for all Medicaid managed care. Three months later, California Gov. Jerry Brown signed a law mandating that same percentage. But the state requirement doesn’t kick in fully until 2023.

Michael McCue, a professor at Virginia Commonwealth University who studies Medicaid managed care, said the profit margins in California “raise a lot of red flags.” He said government officials owe it to taxpayers and patients to do more to hold insurers accountable.

“You have to make sure you’re getting a bang for your buck,” McCue said. “Right now, [for insurers] California’s Medicaid program is the golden nugget.”

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

Sickle Cell Patients Suffer Discrimination, Poor Care — And Shorter Lives

Kaiser Health News:Marketplace - November 06, 2017

NeDina Brocks-Capla sits in her kitchen in San Francisco. Her son Kareem Jones died at age 36 from sickle cell disease. (Jenny Gold/KHN)

For more than a year, NeDina Brocks-Capla avoided one room in her large, brightly colored San Francisco house — the bathroom on the second floor.

“It was really hard to bathe in here, and I found myself not wanting to touch the walls,” she explained. The bathroom is where Brocks-Capla’s son Kareem Jones died in 2013 at age 36, from sickle cell disease.

It’s not just the loss of her son that upsets Brocks-Capla; she believes that if Jones had gotten the proper medical care, he might still be alive today.

Sickle cell disease is an inherited disorder that causes some red blood cells to bend into a crescent shape. The misshapen, inflexible cells clog the blood vessels, preventing blood from circulating oxygen properly, which can cause chronic pain, multi-organ failure and stroke.

This KHN story also ran on NPR. It can be republished for free (details).

About 100,000 people in the United States have sickle cell disease, and most of them are African-American.

Patients and experts alike say it’s no surprise then that while life expectancy for almost every major malady is improving, patients with sickle cell disease can expect to die younger than they did 20 years ago. In 1994, life expectancy for sickle cell patients was 42 for men and 48 for women. By 2005, life expectancy had dipped to 38 for men and 42 for women.

Sickle cell disease is “a microcosm of how issues of race, ethnicity and identity come into conflict with issues of health care,” said Keith Wailoo, a professor at Princeton University who writes about the history of the disease.

It is also an example of the broader discrimination experienced by African-Americans in the medical system. Nearly a third report that they have experienced discrimination when going to the doctor, according to a poll by NPR, Robert Wood Johnson Foundation and Harvard T.H. Chan School of Public Health.

Dr. Elliott Vichinsky examines Derek Perkins at the sickle cell center at UCSF Benioff Children’s Hospital Oakland, which sees both children and adults. (Jenny Gold/KHN)

“One of the national crises in health care is the care for adult sickle cell,” said leading researcher and physician Dr. Elliott Vichinsky, who started the sickle cell center at UCSF Benioff Children’s Hospital Oakland in 1978. “This group of people can live much longer with the management we have, and they’re dying because we don’t have access to care.”

Indeed, with the proper care, Vichinsky’s center and the handful of other specialty clinics like it across the country have been able to increase life expectancy for sickle cell patients well into their 60s.

Vichinsky’s patient Derek Perkins, 45, knows he has already beaten the odds. He sits in an exam room decorated with cartoon characters at Children’s Hospital Oakland, but this is the adult sickle cell clinic. He’s been Vichinsky’s patient since childhood.

“Without the sickle cell clinic here in Oakland, I don’t know what I would do. I don’t know anywhere else I could go,” Perkins said.

When Perkins was 27, he once ended up at a different hospital where doctors misdiagnosed his crisis. He went into a coma and was near death before his mother insisted he be transferred.

“Dr. Vichinsky was able to get me here to Children’s Hospital, and he found out what was wrong and within 18 hours — all I needed was an emergency blood transfusion and I was awake,” Perkins recalls.

Kareem Jones lived just across the bay from Perkins, but he had a profoundly different experience.

Jones’ mother, Brocks-Capla, said her son received excellent medical care as a child, but once he turned 18 and aged out of his pediatric program, it felt like falling off a cliff. Jones was sent to a clinic at San Francisco General Hospital, but it was open only for a half-day, one day each week. If he was sick any other day, he had two options: leave a voicemail for a clinic nurse or go to the emergency room. “That’s not comprehensive care — that’s not consistent care for a disease of this type,” said Brocks-Capla.

Brocks-Capla is a retired supervisor at a worker’s compensation firm. She knew how to navigate the health care system, but she couldn’t get her son the care he needed. Like most sickle cell patients, Jones had frequent pain crises. Usually he ended up in the emergency room where, Brocks-Capla said, the doctors didn’t seem to know much about sickle cell disease.

When she tried to explain her son’s pain to the doctors and nurses, she recalled, “they say have a seat. ‘He can’t have a seat! Can’t you see him?’”

Studies have found that sickle cell patients have to wait up to 50 percent longer for help in the emergency department than other pain patients. The opioid crisis has made things even worse, Vichinsky added, as patients in terrible pain are likely to be seen as drug seekers with addiction problems rather than patients in need.

NeDina Brocks-Capla stands in her living room in San Francisco. She made a shrine filled with memories of son Kareem Jones, who died of sickle cell disease in 2013. (Jenny Gold/KHN)

Despite his illness, Jones fought to have a normal life. He lived with his girlfriend, had a daughter and worked as much as he could between pain crises. He was an avid San Francisco Giants fan.

For years, he took a drug called hydroxyurea, but it had side effects, and after a while Jones had to stop taking it. “And that was it, because you know there isn’t any other medication out there,” said Brocks-Capla.

Indeed, hydroxyurea, which the FDA first approved in 1967 as a cancer drug, was the only drug on the market to treat sickle cell during Jones’ lifetime. In July, the FDA approved a second drug, Endari, specifically to treat patients with sickle cell disease.

Funding by the federal government and private foundations for the disease pales in comparison to other disorders. Cystic fibrosis offers a good comparison. It is another inherited disorder that requires complex care and most often occurs in Caucasians. Cystic fibrosis gets seven to 11 times more funding per patient than sickle cell disease, according to a 2013 study in the journal Blood. From 2010 to 2013 alone, the FDA approved five new drugs for the treatment of cystic fibrosis.

“There’s no question in my mind that class and color are major factors in impairing their survival. Without question,” Vichinsky said of sickle cell patients. “The death rate is increasing. The quality of care is going down.”

Without a new medication, Jones got progressively worse. At 36, his kidneys began to fail, and he had to go on dialysis. He ended up in the hospital, with the worst pain of his life. The doctors stabilized him and gave him pain meds but did not diagnose the underlying cause of the crisis. He was released to his mother’s care, still in incredible pain.

At home, Brocks-Capla ran him a warm bath to try to soothe his pain and went downstairs to get him a change of clothes. As she came back up the stairs, she heard loud banging against the bathroom walls.

“So I run into the bathroom and he’s having a seizure. And I didn’t know what to do. I was like, ‘Oh come on, come on. Don’t do this. Don’t do this to me.’”

She called 911. The paramedics came but couldn’t revive him. “He died here with me,” she said.

It turned out Jones had a series of small strokes. His organs were in failure, something Brocks-Capla said the hospital missed. She believes his death could have been prevented with consistent care — the kind he got as a child. Vichinsky thinks she is probably right.

“I would say 40 percent or more of the deaths I’ve had recently have been preventable — I mean totally preventable,” he said, but he got to the cases too late. “It makes me so angry. I’ve spent my life trying to help these people, and the harder part is you can change this — this isn’t a knowledge issue. It’s an access issue.”

A nurse takes patient Derek Perkins’ blood pressure at the sickle cell center at UCSF Benioff Children’s Hospital Oakland — one of only three places in California that offer specialized services for adults with sickle cell disease. (Jenny Gold/KHN)

Vichinsky’s center and others like it have made major advances in screening patients for the early signs of organ failure and intervening to prevent premature death. Patients at these clinics live two decades longer than the average sickle cell patient.

Good care for sickle cell requires time and training for physicians, but it often doesn’t pay well, because many patients are on Medicaid or other government insurance programs. The result is that most adult sickle cell patients still struggle even to access treatments that have been around for decades, Vichinsky said.

The phenomenon is nothing new — the disease that used to be known as sickle cell anemia has had a long and sordid past. It was first identified in 1910 and helped launch the field of molecular biology. But most of the research was used to study science rather than improving care for sickle cell patients, Vichinsky said.

In the 1960s and ’70s, sickle cell became a lightning rod for the civil rights movement. At the time, the average patient died before age 20. The Black Panther Party took up the cause and began testing people at their “survival conferences” across the country.

“I’m sure we tested over four-and-a-half-thousand people for sickle cell anemia last night — and I think that the voter registration is running neck and neck with it,” Black Panther Party Chairman Bobby Seale told news crews at an event in Oakland in 1972.

The movement grew, and Washington listened. “It is a sad and shameful fact that the causes of this disease have been largely neglected throughout our history,” President Richard Nixon told Congress in 1971. “We cannot rewrite this record of neglect, but we can reverse it. To this end, this administration is increasing its budget for research and treatment of sickle cell disease.”

For a while, funding did increase, newborn screening took hold and by the 1990s, life expectancy had doubled, with patients living into their 40s. But over time, funding waned, clinics closed, and life expectancy started dropping again.

Vichinsky pushes against that trend for patients like Derek Perkins. The father of four looks healthy and robust, but like most sickle cell patients, he has episodes of extreme pain and has problems with his kidneys, heart, hips and breathing. Keeping him thriving requires regular checkups and constant monitoring for potential problems.

“The program Dr. Vichinsky is running here, I feel I owe my life to [it],” said Perkins. “If it wasn’t for him and the things that he did for me, my family wouldn’t have me.”

KHN’s coverage of children’s health care issues is supported in part by a grant from The Heising-Simons Foundation.

Insurer Tries A Soft Touch — Puppies! — For This Year’s Hard Sell Of Obamacare Plans

Kaiser Health News:HealthReform - November 06, 2017
This story is part of a partnership that includes NPR, local member stations and Kaiser Health News. It can be republished for free. (details)

Can a puppy video get you to buy health insurance through the Affordable Care Act exchanges? Florida Blue, a major insurer in that state, hopes the answer is yes.

“It’s hard to resist puppies, right? Let’s just be honest,” said Penny Shaffer, the insurer’s South Florida regional market president, who talked to WLRN’s Sammy Mack. In the video, puppies tumble while the announcer pitches, in Spanish, affordable plans and personalized service.

According to a Commonwealth Fund analysis, Hispanics have seen the biggest increase in the number of people insured of any ethnic group since the Affordable Care Act was passed. One ZIP code in the heart of Miami’s Cuban district saw the most marketplace sign-ups of any ZIP code in the country a couple of years ago. And market research shows that Latina women are very active video sharers.

Open enrollment for health insurance on the Affordable Care Act exchanges started last week. For anywhere from six weeks to a few months, depending on the state, people can buy plans on the individual markets for 2018.

But the Trump administration has cut the ACA advertising budget by 90 percent, as well as money to pay navigators, people who help customers pick a plan and enroll.

So, across the country, municipalities, insurers and grass-roots organizations are working even harder to get the word out that the ACA is still in place. That explains the puppies.

California also sees Latinos as a key group for outreach, reports KQED’s April Dembosky. The video strategy of Covered California, that state’s marketplace, is a little different, emphasizing how important insurance is for unexpected illness by telling the story of a young woman who needed a heart transplant.

In Phoenix, KJZZ’s Will Stone reported that the Arizona Public Interest Research Group is part of a grass-roots coalition advertising open enrollment. They are hoping to get younger people to sign up, because younger people tend to be healthier and less expensive. Insurance pools need young people to balance the expenses of older and sicker people.

But Diane Brown, who heads Arizona PIRG, said consumer confusion over health insurance, complicated enough already, has been exacerbated by the political wrangling over the ACA this year.

Pennsylvania’s insurance commissioner’s office is spending some of its department’s budget on education, including setting up its own online tool to help guide consumers through how to pick a plan, reported Elana Gordon from WHYY.

And in Tennessee, Blake Farmer of Nashville Public Radio said that even though the navigator budget was cut, it was cut only by 15 percent and the state found enough savings in other places to keep roughly the same numbers of navigators helping people sign up this year.

Moving along to Texas, KUT’s Ashley Lopez found that in the bigger cities, local taxpayers are filling in the gap. Austin is spending a lot more money this year on outreach efforts. Michelle Tijerina works for Central Health, which provides health care for low-income people in Travis County and is funded by local property taxes.

“We will have ads on radio — English and Spanish. We will be on Facebook. We will have Google ads and banners. We will be out in the community, talking to schools,” Tijerina said.

Tijerina said Central Health is also hiring twice as many people this year to help folks sign up once enrollment starts.

This story is part of a reporting partnership with NPR, local member stations and Kaiser Health News.

Readout of Acting HHS Secretary Hargan's Visit to the U.S. Virgin Islands

HHS Gov News - November 04, 2017

Acting Health and Human Services Secretary Eric Hargan and Assistant Secretary for Preparedness and Response Robert Kadlec traveled to St. Thomas today to meet with local officials assisting with response efforts in the U.S. Virgin Islands (USVI).

Acting Secretary Hargan first met with U.S. Virgin Islands Governor Kenneth Mapp and local officials at the U.S. Virgin Islands Territorial Emergency Management Agency to discuss the ongoing response efforts, and was later briefed by the Centers for Disease Control and Prevention on the environmental health of residents of the Islands. Acting Secretary Hargan then toured the USVI Departments of Health and Human Services in St. Thomas, as well as a shelter currently housing victims of Hurricanes Irma and Maria.

Information on health, safety and HHS actions are available at www.phe.gov/emergency. Public Service Announcements with post-storm health tips are available at https://www.cdc.gov/disasters/psa/index.html. Residents in the continental United States are encouraged to provide these tips to family members and friends in Puerto Rico and the U.S. Virgin Islands.

Updates and health information also are available at:

ASPR - @PHEgov

HHS - @HHSgov

CDC - @CDCgov
 

Readout of Acting HHS Secretary Hargan's Visit to Puerto Rico

HHS Gov News - November 04, 2017

Acting Health and Human Services Secretary Eric Hargan and Assistant Secretary for Preparedness and Response Robert Kadlec traveled to Puerto Rico on Thursday to assess the recovery efforts from Hurricanes Maria and Irma, and to meet with HHS officials who are on the ground assisting with the ongoing recovery efforts.

Acting Secretary Hargan first toured the Disaster Medical Assistance Team site located in Fajardo, and praised local volunteers for their assistance in the recovery efforts. He then conducted an aerial damage assessment, and later met with the Puerto Rico Secretary of Health and other local government officials to discuss the latest updates on the response efforts. Acting Secretary Hargan thanked officials from the Federal Emergency Management Agency, the Department of Defense, and the HHS Incident Response Coordination Team.

Acting Secretary Hargan traveled to Puerto Rico on Thursday to assess the recovery efforts.

 

Information on health, safety and HHS actions is available at www.phe.gov/emergency. Public Service Announcements with post-storm health tips are available at https://www.cdc.gov/disasters/psa/index.html. Residents in the continental United States are encouraged to provide these tips to family members and friends in Puerto Rico and the U.S. Virgin Islands.

Updates and health information also are available at:

ASPR - @PHEgov

HHS - @HHSgov

CDC - @CDCgov

Health Companies Race To Catch UnitedHealth As Amazon Laces Up

Kaiser Health News:Insurance - November 03, 2017

As soon as news surfaced last week about the potential merger of CVS Health and Aetna, all eyes turned to the looming threat from Amazon.

The online retailer’s flirtation with the pharmacy business is a factor, no doubt. But many industry experts say CVS and Aetna have another huge competitor on their minds: UnitedHealth Group.

UnitedHealth is best known as the nation’s largest health insurer, with more than 45 million members in the U.S. But behind the scenes, it has extended its reach deep into America’s medicine cabinets, operating rooms and doctor offices.

Its Optum unit fills more than 100 million prescriptions per month as a pharmacy benefit manager, poaching big customers from rivals CVS and Express Scripts. UnitedHealth owns more than 400 surgery centers and urgent-care clinics and runs medical practices for about 22,000 physicians across the country.

This story also ran in the Los Angeles Times. It can be republished for free (details).

“People have gotten carried away with Amazon,” said Ana Gupte, a health care analyst at Leerink Partners. “CVS and Aetna is an Optum wannabe. UnitedHealth is the winning business model, and Optum is showing the way.”

UnitedHealth’s expansion into dispensing prescription drugs and treating patients has put the company on track to reach $200 billion in annual revenue this year and profits for the first nine months of 2017 already topped $7 billion.

UnitedHeath is admired on Wall Street for its dependable results and diverse stable of businesses, which helps insulate it from rough patches in the insurance sector. However, the prospect of further industry consolidation alarms some consumer advocates and health policy experts. And they say UnitedHealth hasn’t always been a good role model.

In 2009, U.S. Senate investigators said the company built an industrywide database that deliberately understated what insurers should pay for out-of-network care, exposing consumers nationwide to hundreds of millions of dollars in extra charges.

More recently, patients have accused the company’s prescription drug business, OptumRx, of overcharging for routine medications in order to pocket a pharmacy “clawback” that boosts profits. The company has denied any wrongdoing in response to lawsuits over the drug pricing.

Employers, lawmakers and consumer groups accuse the three largest pharmacy middlemen — Express Scripts, CVS and UnitedHealth — of keeping drug prices high and pocketing too many of the discounts they negotiate with pharmaceutical companies.

Consumer advocates also are concerned about the prospect of companies mining a vast supply of consumer data to maximize profits rather than improve care.

“It is hard to find instances where these very large companies used their market power for the good of consumers, rather than for their shareholders,” said Lynn Quincy, a consumer advocate and director of the Healthcare Value Hub at the Altarum Institute, a nonprofit think tank. “The lack of transparency at these really large companies is appalling. That’s why we’re skeptical it will make things better.”

In a statement, UnitedHealth said it’s committed to “helping people live healthier lives” and its Optum unit is trying to make the entire health system work better.

In the past, company executives have said they’re fighting on behalf of employers and consumers against high costs, as well as poor outcomes and mind-boggling complexity. Before the merger news, executives at Aetna and CVS had already hinted at working together to tackle many of the same issues through the retailer’s vast network of stores.

Last week, The Wall Street Journal broke the news about the potential merger between CVS and Aetna, which could be worth more than $66 billion. CVS and Aetna say they won’t comment on market rumors or speculation.

In general, these companies are trying to address problems familiar to most Americans: poor coordination of care. Doctors rarely talk to each other. It’s incredibly hard to share medical records among providers or even with patients. Despite a lot of talk about linking pay to performance, a surprising amount of medical care is still reimbursed under the old-fashioned fee-for-service model that rewards quantity over quality.

For some experts, CVS and Aetna are well-positioned to fix many of those issues and that might make their deal more likely to pass muster with antitrust officials.

UnitedHealth, which has reached into everything from home health care to billing technology, has won praise for some of its efforts. One 2015 study published in Health Affairs found that the company’s use of house calls helped reduce costly hospital admissions for Medicare patients by 14 percent.

“One of the big failures of the U.S. health care system has been fragmentation, and these vertical mergers are trying to cure that problem,” said Thomas Greaney, a former federal antitrust lawyer and now a professor at the University of California’s Hastings College of the Law in San Francisco.

“You want to encourage efficiencies and integration that helps promote better care and lower costs. But you don’t want that to turn into a local monopoly,” he added.

Farzad Mostashari, a former official in the Obama administration who has studied health care competition, said it’s too soon to tell whether a CVS-Aetna deal would be good or bad for consumers. But Mostashari, who now heads Aledade, a tech start-up that works with doctors, said it warrants intense scrutiny of the more subtle ways it could put rivals at a disadvantage.

“These vertical mergers can create competitive challenges where you use your dominant market position to tip the ball to yourself in another area,” he said.

This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

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