Top of the Funnel
CPI. As always we remind you that CPI in health care services is supposed to measure cost-sharing and does so in the most imperfect way possible and on a considerable lag. There really isn’t much structurally that would drive up health care cost-sharing in March. Rates and benefit design reset in January, July and October, depending on what we are talking about.
What the health care service portion of CPI is measuring is probably increased cost sharing that occurred last year and will resolve in the coming months. As we have pointed out, inflation is not going to get better until all the higher health care prices have washed through in the first half or so of this year. It may not happen then either but you should not be able to blame health care.
PPI. HCA (+) THC (+) One series we like in PPI is one that attempt to measure the cost of caring of different patients by insurance type. In January, PPI for Medicaid patients took off and remains at 6.93% YoY at General Medical and Surgical Hospitals.
We can probably credit the proliferation of supplemental payment arrangements that are being hammered between hospitals and state programs. Hospitals are becoming increasingly agnostic as to payer type as Medicaid has stepped up, Medicare is lagging and the MA plans and hospital providers are in a cage match but payer mix is getting increasingly irrelevant.
CONGRESS.
Physicians Pay as an MA Pay For? UNH (-), ELV (-), HUM (-) Senate Finance’s task force on Physicians’ Fee Schedule began work on an overhaul of the Medicare Access and CHIP Reauthorization Act (known as MACRA).
That law was passed when value-based purchasing still held promise for lower cost and better outcomes. In retrospect it was over engineered and turns out to be just as big a pain as the Sustainable Growth Rate policy it replaced. Like the SGR, Congress finds itself intervening in rate cuts annually. Meanwhile, Medicare participation is getting less and less interesting to a new generation of doctors.
The challenges will be offsetting Pay-fors. Members of the task force have brought up reducing overpayments to Medicare Advantage plans. It is hard to know exactly what they mean but one possibility would be ending the misalignment between patient risk scores and diagnosis codes.
That could take some time.
In the near term, expect the MCOs to keep talking up their benefit costs and talking down their rates. Like hospitals, when they do so, they aren’t talking to you.
Long COVID. Senator Bernie Sanders unveiled a discussion draft of a bill that would provide $10B in mandatory funding over ten years to fund research on long Covid, a term applied enduring symptoms of people recovering from the COVID disease.
The funding level has been criticized for being too low by patient advocates. It might end up being zero has Congress is not in much of a mood to fund new projects these days.
Privacy and AI. On April 17th, A House Energy and Commerce’s subcommittee will meet to review several important pieces of legislation on privacy and artificial intelligence. The bill would pre-empt state privacy laws and hand regulatory power to the Federal Trade Commission.
Complete list of bills here.
WHITE HOUSE.
ACA Forever. One of the White House’s favorite partisan talking points is that a President Trump would repeal the Affordable Care Act. This week, Mr. Trump issued his rejoinder and announced he had no plans to do so.
The White House is hoping to rally the base while Mr. Trump is communicating with his right flank that the ACA will not be a priority. It was clear while Mr. Trump was president that he reserved his interest in health care to the pharmaceutical industry but forces in the House forced his hand.
He will not be making that mistake again, it would appear.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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