This Week in Healthcare Reform: April 9th, 2021

Wealthy hospitals thrived during the pandemic; payers work to boost vaccine confidence; Medicare Advantage shows its value; and, stakeholders urge lawmakers to eliminate the costly “Rebate Rule.”

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Week in Review

Wealthy Hospitals: There’s no part of our world that hasn’t been in some way touched by the coronavirus pandemic.  That’s certainly true for the healthcare industry, which underwent a dramatic evolution as stakeholders worked to respond in real-time to the unfolding public health crisis.  In the early days, as consumers delayed or cancelled routine check-ups and elective procedures, there was understandable concern over what these care deferrals would do to providers’ revenue model.  In response, lawmakers approved funding to help alleviate the economic headwinds facing hospitals and health systems.  Now, more than a year into the pandemic, we’re starting to get a clearer picture of just how providers managed to weather the COVID-storm – and, from an early read of the data, it looks like some fared considerably better than others.  Specifically, some of the nation’s wealthiest hospitals and health systems managed to not just survive the pandemic, but thrive, recording hundreds of millions of dollars in surpluses – and, this, after accepting the lion’s share of the federal healthcare bailout grants distributed last year.  Those bailouts were initiated to help providers ride out the public health calamity and intended to offset the costs of treating coronavirus patients, including the purchasing of ventilators and other personal protective equipment, like masks, gloves, and gowns.  The money was also designated to compensate for these health systems’ drop in revenue.  While some hospitals financial situations deteriorated significantly during the pandemic, many prosperous ones have managed to emerge unscathed, largely as a result of the federal aid, which allowed them to not have to draw down on their reserves to make up for the loss in revenue.

Vaccine Confidence: With multiple vaccines now available and eligibility about to be opened up to all U.S. adults by 19 April, there’s a sense that we’re headed in the right direction.  However, despite the promise of better days ahead, vaccine confidence remains a concern.  While there have been gains in this area, enough skeptics are still out there that efforts are ramping up to target these hold-outs.  Payers are collaborating with state and local health departments, as well as businesses, to increase vaccine confidence through the use of marketing tools and incentive programs.  They’re also leveraging social determinants of health partnerships with community-based organizations to promote vaccinations.  While these efforts are encouraging, experts worry that vaccine confidence isn’t the main obstacle to achieving herd immunity, pointing to barriers to access as being the more urgent concern.

MA Value: Throughout the pandemic, Medicare Advantage (MA) plans have distinguished themselves and shown exactly why so many Medicare-eligible beneficiaries have enrolled in the increasingly popular program in recent years.  In the immediate wake of COVID-19, the coordinated model of care that’s become the hallmark of the MA program was extended to ensure that vulnerable enrollees were able to enjoy uninterrupted access to the care they needed, including the expansion of telehealth services, prescription drug delivery, and even at-home visits.  Now, a new study puts a finer point on the value that MA plans bring to beneficiaries.  According to the analysis, beneficiaries enrolled in Medicare Advantage spend more than $1,600 less per year on average compared to those enrolled in traditional fee-for-service Medicare.  Out-of-pocket and premium spending for MA enrollees averaged out to $3,354 in 2018, compared to the $4,994 average for fee-for-service enrollees – a 40 percent lower cost burden for consumers.  Additionally, lower-income beneficiaries were found to be more likely to choose MA plans over the traditional Medicare program.

Rebate Rule: Stakeholders continue to focus their efforts on eliminating the harmful “rebate rule”, which had previously been delayed for a year.  That rule, which prevents pharmacy benefit managers (PBMs) from extracting rebates in their negotiations with drugmakers on behalf of Medicare Part D beneficiaries, essentially does away with the only check on pharmaceutical manufacturers’ unfettered pricing power.  Unsurprisingly, the rule has the support of Big Pharma, despite being the wrong prescription for rising drug prices.  As mentioned, stakeholders recently came together, sending a letter to lawmakers urging them to eliminate the rebate rule, with 16 groups signing on.


LEARN: A useful infographic highlighting the diverse population served by the Medicaid program.

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