Research Roundup - June 2020


Medicaid Expansion Would Improve Life for All Alabamians, New Report Shows
By Chris Sanders | Alabama Arise | June 17, 2020

Expanding Medicaid to cover adults with low incomes would build on the program’s successes and save hundreds of lives every year, according to a report from Alabama Arise. Though more than a million people – mostly children, seniors and those with disabilities – benefit from Alabama Medicaid, 340,000 uninsured and underinsured Alabamians who could gain coverage under Medicaid expansion remain. Expansion would particularly benefit the 65,000 rural Alabamians caught in the health coverage gap, as their rural hospital network is fraying from a lack of healthcare funding and had been significantly impacted by caring for uninsured or underinsured rural populations.


Arizona Lagging Behind in Per Capita Health Spending
By Associated Press | May 3, 2020

Arizona ranked third-worst nationally for the amount of money it spent on public health at $10 per person in 2018, reports the Associated Press. Although the state’s public health spending increased to $15 per person in 2019, it was still less than one-fifth of what Massachusetts spent that year despite having a smaller population. States’ public health investments not only impact their ability to handle emergencies such as COVID-19, but they also support disease prevention and the reduction of health disparities, as public health crises affect minorities at disproportionate rates.


Medicaid Surge Due to COVID-19: Financial Impacts for Hospitals
By Colorado Health Institute | May 2020

Colorado’s Medicaid program is projecting well over half a million (563,000) more Coloradans will enroll in Medicaid between April and December, according to a new report from the Colorado Health Institute on the impacts of COVID-19 on state hospitals. This would be the biggest surge in Medicaid enrollment in Colorado’s history—larger than its peak during the 2014 Medicaid expansion. Most of the expected new Medicaid beneficiaries formerly had employer-sponsored insurance, which reimburses hospitals at a much higher rate than Medicaid. This surge is expected to reduce the revenue of Colorado hospitals by $500 million over the next year.


Connecticut Leads States in Lawsuit Against Generic Drug Companies for Price Fixing
By Connecticut Office of the Attorney General | June 10, 2020

A coalition of 51 states and territories, led by Connecticut’s attorney general, are suing generic drug companies for price fixing, according to a press release from the attorney general’s office. The lawsuit stems from the ongoing antitrust investigation into a widespread conspiracy by generic drug manufacturers to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for generic drugs sold across the United States.


Delaware Health Care Commission Releases Preliminary Data on State Healthcare Spending
By State Network | June 8, 2020

The Delaware Health Care Commission released a report containing preliminary data on state-wide healthcare spending in 2018, according to State Network. Preliminary data reveals that total healthcare spending per person–across Medicare, Medicaid, commercial and other payers–averaged $8,110 per Delawarean in 2018. This includes non-claims-based payments made to providers, including performance incentives and care management. The greatest proportion of spending was dedicated to hospital inpatient spending, followed by payments for physician and hospital outpatient services. The report follows the establishment of a healthcare spending benchmark that aims to control healthcare spending growth in Delaware over time.


Measure to Curb Surprise Billing in Georgia Clears General Assembly
By Beau Evans | Cherokee Tribune & Ledger-News | June 17, 2020

Georgia has passed legislation to end the practice of balance billing, according to the Cherokee Tribune & Ledger-News. The new law requires insurers to cover emergency services a patient receives whether or not the provider participates in the patient’s insurance coverage network.


Massachusetts Physician Practices Considering Closure, Consolidation
By Alex Kacik | Modern Healthcare | June 10, 2020

Around 30 percent of physician practices in Massachusetts have been considering closing down, according to a preliminary report by the Massachusetts Health Policy Commission and the Massachusetts Chapter of the American College of Physicians. Medical and procedural specialist groups were the most likely to consider closing their practice at 42 percent, while around 20 percent of primary care and behavioral health physician groups were weighing closure, Modern Healthcare reports.


Minnesota Health Plans Extend Waiving of Copayments for COVID-19
By Paul John Scott | West Central Tribune | May 26, 2020

Neary all Minnesota health plans have agreed to continue waiving copayments related to the care of COVID-19 through September 30, reports the West Central Tribune. Minnesota health plans had been required to cover testing without cost sharing but had agreed to waive copays for hospitalizations until June 1. The agreement removes the potential that 570 patients now in the hospital with the illness would have to face thousands of dollars in medical bills on top of lost wages. The Minnesota Department of Health has also announced $97.6 million in healthcare grants across the state, to pay for additional staffing, PPE and other expenses associated with preparation for the pandemic


Ohio State Health Improvement Plan
By Health Policy Institute of Ohio | June 19, 2020

The Ohio Department of Health has released a 2020-2022 State Health Improvement Plan, according to the Health Policy Institute of Ohio. Agency strategies focus on four broad categories: community conditions; health behaviors; access to care; and mental health and addiction. For example, strategies aimed at improving local access to healthcare providers focus on creating comprehensive and coordinated primary care, a culturally competent workforce in underserved communities and telehealth.


Oregon's Health Equity Guidelines
By Sarah Wexler | My Oregon News | June 11, 2020

Oregon legislators have released a new framework, developed by the Office of Diversity, Equity, and Inclusion, to help state agencies increase attention on equity and racial justice in response to the COVID-19 pandemic, according to My Oregon News. COVID has surfaced long-standing health inequities that have caused higher rates of chronic health problems within communities of color compared to white communities. The core elements of the framework include a commitment to: using inclusive communications; forming community-informed policy and partnerships; ensuring safety for communities by protecting against discrimination, racism, xenophobia, violence and hate crimes; collecting, analyzing and reporting data in a culturally- and linguistically-responsive way; and making investments in community resilience.


Utah Becomes Latest State to Cap Insulin Prices
By KUTV | June 2020

Utah is implementing an insulin cost savings program that will allow every Utahn to purchase insulin at a 60 percent discount through the state Public Employee Health Plan (PEHP), according to KUTV. PEHP will purchase insulin at a higher rate, but Utahns will only have to pay the wholesale cost—about a 60 percent discount. The law also caps health insurance copays for insulin at $30 for a 30-day supply. Additionally, this law enables pharmacists to dispense a 90-day supply of insulin on an emergency basis for patients having difficulties with their prescription.


Using Global Budgets and Multi-Sector Teams to Align Systems in Vermont
By Systems for Action | June 10, 2020

Systems for Action hosted a webinar to present emerging evidence on the use of global budgets and multi-sector teams to align health and social service systems, increase access to needed services, control healthcare costs and create more equitable health outcomes in Vermont. This effort is part of Vermont’s Blueprint for Health initiative, which is among the most ambitious statewide health financing reforms underway in the U.S.


Ghost Bill: UVA Siphons Couple's Tax Refund to Pay 20-Year-Old Medical Debt
By Michelle Andrews | Kaiser Health News | June 24, 2020

Virginia is one of at least a dozen states that can dock residents’ income tax refunds to pay delinquent medical debts, Kaiser Health News reports. The state collected $68 million in individual debts through the program, a figure that includes medical bills and other types of debt owed to state and local government agencies and state courts, among others. A new state law will prohibit UVA and UVC from taking consumers’ tax refunds unless they can determine that patients aren’t eligible for financial assistance or programs like Medicaid, but concerns about the harmful practice remain.

West Virginia

West Virginia's Prescription Transparency Law Can Address Rising Drug Costs
By Sean O'Leary | West Virginia Center on Budget & Policy | June 2020

Understanding how prescription drug prices are set will allow both patients and states to make more informed decisions about whether prices are excessive, as well as introduce some rationality and evidence into the healthcare system, according to a new report from the West Virginia Center on Budget and Policy. During the 2020 legislative session, West Virginia passed a drug transparency law requiring manufacturers to report prices, and research and development costs and justify price increases. In addition, all health plan insurers in the state are required to report the 25 most frequently prescribed prescription drugs, the percent increase in annual net spending for prescription drugs, and the percent increase in premiums that were attributable to prescription drugs. Authors note that the state could consider expanding the law to include pharmacy benefit managers and appointing a prescription drug affordability board with the power to regulate drug prices.   

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Recent Reports

Public Options for Individual Health Insurance: Assessing the Effects of Four Public Option Alternatives
By Jodi L. Liu, et al. | The RAND Corporation | 2020

Researchers investigated how the addition of different public option scenarios would affect insurance coverage, individual market enrollment and premiums, and costs to individuals and to the federal government. The RAND study assessed four different public option scenarios that varied based on the amount providers are paid, whether the option is implemented on health insurance marketplaces and whether premium tax credits are available to individuals with higher income levels. The researchers found that all options had lower premiums compared to private insurance market premiums, however there was little change in health insurance enrollment in most scenarios. The researchers estimated that most enrollees would switch from a private individual market plan to a public option plan, with greater preference for scenarios with lower premiums due to larger reductions in provider payments. In all options, federal spending on advance premium tax credits decreased. The study also determined that individuals with incomes below 400 percent of the federal poverty level received smaller tax credits and tended to be worse off with the addition of a public option.


Association of State Medicaid Expansion with Hospital Community Benefit Spending
By Genevieve P. Kanter, et al. | JAMA Network Open | May 29, 2020

While Medicaid expansion alleviated the financial stresses faced by hospitals in providing uncompensated care, these savings did not translate into additional direct community spending, according to a study in JAMA Network Open. The study examined 1,666 nonprofit hospitals to see how Medicaid expansion impacted spending on bad debt, charity care and community benefit spending. Medicaid expansion was associated with a 0.68-percentage point decline in spending on charity care and a 0.17-percentage point decline in bad debt. These declines in uncompensated care were offset by an increase of 0.85 percentage points in unreimbursed Medicaid-related spending, while non-care direct community spending decreased by 0.24 percentage points. 


New Report Explains Why Hospital Prices in Michigan are Lower Than in Indiana
By Chapin White | Center for Value in Health Care | May 14, 2020

Private health plans pay hospitals much higher prices in Indiana than in Michigan, according to a report from Altarum’s Center for Value in Health Care. Researchers found that the dominant insurer was the key difference between the two states,. The dominant private health insurer in Michigan is Blue Cross Blue Shield of Michigan, a state-based nonprofit with cost control as a part of its mission and state oversight on pricing. Anthem, the dominant insurer in Indiana, is a for-profit insurer with little state oversight. Researchers found that hospitals in Michigan operate more efficiently and provide similar or better quality of care, as compared to Indiana, indicating that reducing the prices private health plans pay hospitals can result in greater efficiency without sacrificing quality of care.


18.2 Million Individuals at Increased Risk of Severe COVID-19 Illness are Un-or Underinsured
By Adam W. Gaffney, et al. | Journal of General Internal Medicine | June 10, 2020

More than 18 million people are at higher risk of severe COVID-19 illness are also more likely to be un- or underinsured, according to a study in the Journal of General Internal Medicine. Low-income individuals, BIPOC, those who live in a rural area or in a state that has not expanded Medicaid had higher rates of inadequate insurance coverage. These individuals are more likely to delay seeking care due to financial concerns. The authors argue that policymakers should use these findings to address greater coverage for COVID-19 diagnosis and treatment and insurance coverage expansion during the economic downturn.


Out-of-Network Air Ambulance Bills: Prevalence, Magnitude, and Policy Solutions
By Erin C. Fuse Brown, et al. | The Milbank Quarterly | June 11, 2020

Out-of-network helicopter air ambulance transports have high and growing prices, leaving patients at risk of receiving a large surprise medical bill, according to a study in The Milbank Quarterly. Researchers found that 77 percent of air ambulance claims were out-of-network and that insurers paid the full out-of-network price 48 percent of the time. Two‐in‐five transports resulted in a potential balance bill, averaging almost $20,000. Consumers facing out‐of‐network air ambulance bills have few legal protections because the Airline Deregulation Act prevents states from regulating the prices of air carriers, thus requiring federal action. Based on their findings, the authors propose two policy solutions to address these high costs and protect consumers from surprise billing: (1) to implement an out-of-network benchmark rate while banning surprise billing and (2) to require companies to competitively bid to provide services in a specific area in exchange for a fixed monthly price from the federal government.


Varying Trends in the Financial Viability of U.S. Rural Hospitals, 2011-17
By Ge Bai, et al. | Health Affairs | June 1, 2020

A study assessing factors impacting rural hospitals’ financial viability from 2011-2017 determined that viability decreased in states that did not expand Medicaid, according to a study in Health Affairs. During the study period, for-profit rural hospitals experienced greater financial distress than nonprofit rural hospitals. The researchers found that higher price markups were positively associated with financial viability, however it does, in turn, restrict access to care for patients who cannot afford the higher prices. The researchers also identified a positive association between occupancy rate and financial viability and highlighted how lack of compensation for providing standby capacity hurts their financial viability. The authors urge policymakers to consider these effects when addressing access to care in rural areas and financial viability. 


Estimating the Cost of Delayed Generic Drug Entry to Medicaid
By Chintan V. Dave, et al. | Health Affairs | June 2020

The delay of generic drug entry to the market has cost Medicaid an estimated $761 million over seven years, according to a study in Health Affairs. Analysis found that for 45 percent of products that were predicted to lose market exclusivity, generic entry was either delayed or did not occur. The most common cause for delay was patent litigation. The authors argue for policies that expedite the resolution of patent challenges to reduce generic entry delays.


Hidden in Plain Sight - Reconsidering the Use of Race Correction in Clinical Algorithms
By Darshali Vyas, Leo Eisenstein and David Jones | New England Journal of Medicine | June 17, 2020

The diagnostic tools that physicians use to inform their clinical decisions are racially biased, according to an analysis of race-adjusted algorithms. Embedding race into how healthcare decisions are made can perpetuate or exacerbate race-based health inequities. The authors examine race-adjusted algorithms in several medical specialties and highlight how a patient’s race or ethnicity can affect how patients are assessed and their treatment determined, thus impacting health outcomes.


One in Five Adults in Immigrant Families with Children Reported Not Seeking Available Benefits
By Jennifer M. Haley, et al. | Urban Institute | June 18, 2020

Approximately one-third of adults in low-income immigrant families with children reported avoiding public benefit programs, such as SNAP, Medicaid or CHIP, according to an analysis from the Urban Institute. Families avoided these benefits over concerns it would be more difficult to obtain green cards or temporary visas, after the Trump administration proposed changes to the “public charge” in 2018. Many families reported avoiding public benefits before the rule went into effect in February 2020 and some families reported avoiding public benefit programs, such as children’s Medicaid enrollment, that did not factor into the parents’ public charge determination.


Health Impact and Cost-Effectiveness of Sweetened Beverage Tax Policies in the United States
By Yujin Lee, et al. | Circulation | June 22, 2020

Implementing sugar-sweetened beverage tax policies would result in substantial health gains and cost savings, according to a study in Circulation. The study investigated volume, tiered and absolute sugar content tax policies and found that all types of the tax would result in billions of dollars in tax revenue, save billions of dollars in net costs, prevent thousands of cases of cardiovascular disease and diabetes mellitus and gain millions of quality-adjusted life-years. The authors argue that tiered and absolute taxes should be considered for maximal health gains and cost savings.

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Trump Administration Price-Transparency Rule Covering Hospitals Upheld
By Stephanie Armour | The Wall Street Journal | June 23, 2020

Hospitals will have to disclose the prices they negotiate with insurance companies, according to a ruling in the U.S. District Court for the District of Columbia. The American Hospital Association sued the Trump administration to try to keep their prices secret, arguing that the rule would create administrative burdens and could drive up prices. The Trump administration’s rule, set to go into effect in January 2021, is part of larger efforts to increase transparency in healthcare.


Is COVID-19 the End of Fee-for-Service Payment
By Dan Meuse | State Health and Value Strategies | May 29, 2020

The COVID-19 pandemic’s impact on healthcare payment models could finally result in states implementing reforms, according to a commentary from State Health and Value Strategies. Many healthcare providers are facing financial hardship from lower use of healthcare due to the pandemic and recent federal funding has not been enough to ameliorate the lack of revenue. States have an opportunity to support their essential provider systems and reform outdated payment systems. The author highlights several payment models and argues that incremental steps away from a fee-for-service model through prospective care coordination payments could accelerate readiness to adopt more advanced models. A system that pays providers based on a population of patients helps providers better predict revenue and would enable them to better withstand sharp changes in healthcare utilization.


New Strategic Roadmaps Outline Next Phase for Value-Based Payment Reform in U.S. Healthcare
By Duke Margolis Center for Health Policy and West Health | June 3, 2020

The Duke-Margolis Center for Health Policy and West Health have released two strategic roadmaps to promote value-based payment reform in the U.S., according to a joint press release. The roadmaps will be part of a three-year initiative with education, training and research that will include national and state-specific efforts to convert to value-driven care. The initiative will provide guidance for implementing value-based payment models as well as on addressing barriers to implementation, including the impact of the COVID-19 pandemic. 


Why COVID-19 is Spurring 'Buzz' Among Employers About Reference-Based Pricing
By Paige Minemyer | FierceHealthcare | June 1, 2020

Employers are exploring a shift to reference-based pricing due to financial pressures around COVID-19, according to FierceHealthcare. Under this model, an employer would not contract with a traditional payer but instead with a vendor who manages coverage set at a flat rate across providers, typically significantly higher than Medicare but less than would be paid under a commercial plan. For example, a reference-based pricing model that pays all providers at 150 percent of Medicare rates would lead to significant savings because employers spent an average of 241 percent of Medicare for care in 2017.


Rate Review in the Time of Coronavirus: This is No Time for ACA Rate Increases
By Marissa Korn | Community Catalyst | June 16, 2020

In the midst of uncertainty and hardship relating to the financial implications of COVID-19, insurers are predicting staggering health insurance premium increases for 2021, leading to calls for federal funding to stabilize the private insurance market, according to a commentary by Community Catalyst. The author highlights strategies that advocates can employ to protect consumers from large premium increases like: pushing for clearer rate justifications; asking state regulators to allow insurers to submit provisional rate filings; and advocating for transparency and opportunities for consumer input.


Rebounding From COVID-19: How Whole-Person Healthcare Can Guide the Way
By Gary Hirsch and Kate Isaacs | The Hill | June 18, 2020

Some organizations are developing trust-based relationships and community partnerships to deliver whole-person care for people’s physical, economic and social needs, according to a report in The Hill. Organizations structured as Accountable Care Organizations and Accountable Communities of Health aim to improve patients’ overall health outcomes by addressing social and economic influences that impact health outcomes, in addition to clinical care. These types of organizations are already operating in places such as Camden, N.J., and Seattle and provide a model for a future of equitable, trust-based community health care, especially for communities of color that have been disproportionately impacted by COVID-19. 


Alternative Payment Models - Victim of Their Own Success?
By Amol Navathe, Connor Boyle and Ezekiel Emmanuel | JAMA Network | June 22, 2020

Alternative payment models have produced mixed results, but have had a large impact on policy, according to a commentary published in JAMA. The authors highlight how individual demonstration projects have not reported significant success, but that overall healthcare spending as a share of GDP has plateaued at 18 percent, below the predicted 20 percent. Possible explanations for this paradox include psychological change among clinicals and healthcare organizations, peer network effects and group contamination. The findings have future implications for the development of alternative payment model design as well as control group selection to better understand the effects of the model.

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