August 1, 2019 | New research: Just 1.3% responsible for almost 20% of employer-based health spending

August 1, 2019

INDUSTRY NEWS

Research identifies consistently high spenders

Research from the Kaiser Family Foundations finds that among people who get their coverage from a large employer, just 1.3% were responsible for almost 20% of overall health spending, averaging roughly $88,000 per year. The average spending for all enrollees was just $3,350. These individuals often have HIV, MS, cystic fibrosis, rheumatoid arthritis, diabetes, cancer and other serious conditions requiring frequent and costly care—and especially costly medications. Prescription drugs account for about 40% of this group’s costs, not counting rebates—compared with just 10% for the country as a whole. (Axios; analysis)

Amazon med supply purchases dropping—for now

Providers are allocating a smaller percentage of medical supply purchases to Amazon this year compared to 2018, according to a survey from UBS. At the same time, they’ve increased the percentage of non-medical office supplies purchases. However, most indicated they expect to increase that percentage in three years. UBS also found a larger percentage of respondents were using a group purchasing organization (81%) compared to last year (75%); fewer were using a regional purchasing organization. (Healthcare Dive)

INNOVATION & TRANSFORMATION

Cherokee hospital provides medical home

Cherokee Indian Hospital’s integrated care model—designed by Alaska Natives—provides care tailored to the tribe. Thanks to casino revenues, the tribe was able to opt out of the beleaguered government-run Indian Health Service. It’s part of a trend: About 20% of federally recognized tribes have taken full control of their health care. The hospital is a “medical home for our people,” says hospital CEO Casey Cooper. On various quality measures, the hospital has excelled in blood pressure control, blood sugar control and several cancer screenings. The diabetes rate in the community has leveled. (Kaiser Health News via The Bakersfield Californian)

Medicaid expansion reduces mortality

Yet another study—this one released in July 2019—shows that expanded Medicaid coverage reduces mortality rates among low-income adults. This study, from the National Bureau of Economic Research, looked at those ages 55-64, a group with relatively high mortality rates. “Our estimates suggest that approximately 15,600 deaths would have been averted had the ACA expansions been adopted nationwide as originally intended by the ACA. This highlights an ongoing cost to non-adoption that should be relevant to both state policymakers and their constituents,” they conclude. (HealthPayer Intelligence;the study)

CONSUMERS & PROVIDERS

CDC: Health equity is worsening

As income inequality worsens, so does health equity, according to research published in JAMA Open Network. CDC researchers found “a clear lack of progress on health equity during the past 25 years.” Improvement “will require greater effort from public health policy makers, along with their partners in medicine and the sectors that contribute to the social determinants of health,” they conclude. In related news, bipartisan legislation introduced last week would encourage government agencies to collaborate to manage needs such as food, housing and transportation for some Medicaid populations. (JAMA Open Network; Medical Economics; Modern Healthcare)

Lack of flexibility hurts hospital profits

Hospital profitability declined in June for the first time this year. Operating margins were down 1.88%, according to a report from Kaufman Hall. Hospitals lacked the flexibility to cut costs as patient volumes decreased. At the same time, expenses increased—including growing bad debt and charity care expenses. All of this could open doors for new players: “A lack of flexibility is a fundamental risk to hospitals and health systems and something that industry disruptors are likely to use to their advantage in the coming months and years.” (Healthcare Dive; report)

NEW & NOTED

Bipartisan bill delayed: The Senate will not vote on a bipartisan measure aimed at lowering health care costs before lawmakers leave Washington for the August recess. (The Hill)

Burnout repercussions: Residents with more symptoms of burnout had higher scores on the measures of explicit and implicit racial bias, according to research published last week in JAMA Open Network. This adds to a growing body of literature on the dangers of physician burnout. (The Washington Post; JAMA Open Network)

SDOH and CVS: CVS is looking to expand its work on the social determinants of health through its new “Destination: Health” platform. CVS Health and the Aetna Foundation unveiled the new set of initiatives Wednesday, which includes new partnerships, tools and investments aimed at addressing social factors that affect health. (Fierce Healthcare)

MULTI-MEDIA

Interactive toolkit helps decode bills

Kaiser Health News has developed an interactive, user-friendly toolkit to help patients better understand medical billing and know what to do upon receiving a surprise medical bill. It also offers a checklist of things to keep in mind before getting medical care. (toolkit)

MARKETVOICES...QUOTES WORTH READING

“I know from experience as well as the data that we should take care not to sacrifice needed care as we try to reduce spending for this small group of very high spenders with complicated medical needs.”—Drew Altman, president and CEO of the Kaiser Family Foundation, in a piece for Axios

Jorden Gunessever