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October 10, 2019

INDUSTRY NEWS

Backdoor to pre-existing conditions penalties?

The Department of Health and Human Services announced an opportunity for 10 states to participate in a wellness demonstration project in the individual market. A recent Health Affairs Blog post warns that this could allow insurers in the individual market to vary the cost of coverage by as much as 30% based on high blood pressure, high cholesterol or other conditions. “This could allow backdoor health status underwriting, which the ACA set out to prohibit.” Moreover, the post points out that wellness programs are controversial and—based on recent evidence—largely ineffective. (Health Affairs Blog)

Approximately 25% of health spending is wasteful

Roughly a quarter of US health care spending is wasteful, according to research published this week in JAMA. The estimated cost of that waste ranges from $760 billion to $935 billion. It’s a startling number, but it’s down from the estimated 30% in 2011. Still, that estimate is down five percentage points from 2011. The largest source of waste, according to the study, is administrative costs at $266 billion a year. (JAMA; New York Times)

INNOVATION & TRANSFORMATION

Most insurers have outcomes-based contracts with pharma

About 60% of insurers use outcomes-based contracts (OBCs) with prescription drug manufacturers, according to an Avalere survey released last week. The number of health plans using OBCs increased 35% since 2017, the first year of the survey. Nearly 60% of health plans with such contracts in place cited cost savings and clinical improvement as the primary advantages of OBCs. Both of these rates have increased since the survey was first conducted in 2017. The capture of real-world information and improved payer-manufacturer relationships were also notable areas of growth. (HealthLeaders Media; Avalere survey)

CMS saved $739M in 2018 Medicare ACOs

About 66% of the 548 Medicare ACOs produced a total of $1.7 billion in savings in 2018; that resulted in a $739.4 million gain for CMS, according to agency data. That’s the second year in a row the agency turned a profit from the program, Modern Healthcare reports. In 2017 CMS saved $314 million from the program. One reason for the increase: More ACOs took on downside risk compared to previous years. (Modern Healthcare; CMS data)

CONSUMERS & PROVIDERS

High deductibles didn’t turn patients into consumers

High deductibles were supposed to turn patients into informed consumers, but instead, according to an LA Times series, many patients remain in the dark and are saddled with medical bills they can’t afford. This article follows the struggles of a young mother in Indiana who tried unsuccessfully to shop for medical services after suffering a miscarriage. She ended up paying more than five times the price she was quoted for the procedure. (LA Times)

A quarter of Americans want to eliminate private coverage

Slightly more than one-fourth (27%) of adults favor eliminating all private health insurance and instituting “Medicare for All.” However, 40% say they need more information to form an opinion, according to a new Commonwealth Fund survey. Unsurprisingly, there’s a partisan divide on replacing private insurance. The survey also found that 13.8% of U.S. working-age adults are uninsured, down from 19.9% just prior to the ACA’s coverage expansions—statistically the same as in 2018. (Commonwealth Fund)

NEW & NOTED

New FDA chief? MD Anderson Cancer Center Chief Medical Executive Dr. Stephen Hahn will be nominated by President Trump to head the FDA, the Houston Chronicle reports. The post has been open since April, and law mandates that the Trump administration formally nominate a commissioner by Nov. 1. (Houston Chronicle)

Nutrition and mood: Omega-3 polyunsaturated fatty acids are helpful for major depression, according to a new practice guideline issued by the International Society for Nutritional Psychiatry Research. (Psychotherapy and Psychosomatics)

EHRs, fitness apps and the FDA: The FDA recently released new guidelines on which types of software fall under the agency’s regulatory oversight. “Low risk” software, such as fitness apps, will be excluded. EHR systems and software systems that provide administrative support to health care facilities have also been removed from the scope of the FDA’s oversight. (Modern Healthcare)

MULTI-MEDIA

Pro and con: The value of virtual visits

In a WTOP-FM interview, Health Affairs Editor-In-Chief Alan Weil discusses the pros and cons of virtual visits, for patients, providers and overall health costs. (Health Affairs)

MARKETVOICES...QUOTES WORTH READING

“Deductibles have more than tripled over the last decade... but the promised consumer revolution never materialized.”—the LA Times