Consulo Indicium - 9/19/24
Information for your Consideration…
Ficky Errors – I got a message that some of my hyperlinks did not work in the last edition of The Fickenscher Files. I apologize for the inconvenience and hope it did not present a problem with the readers. BTW – feedback is always appreciated… BTW, The Fickenscher Files are prepared by me not ChatGPT although I do use Grammarly for checking the grammar in my blog. However, the content is determined by me – so you can hold me accountable there…
On The Medicare Roller Coaster – The Medicare program has become over the years an “essential” asset for those who are Medicare eligible and those with disabilities. As a consumer of the program, I take note of any changes. Most people may not be aware but President Biden recently signed bipartisan legislation that passed both the Senate and House for implementing the Inflation Reduction Act. The new legislation will affect access and make financial relief available for the 49 million older adults and those with disabilities who rely upon Medicare for drug services. For the very first time, there will be an annual limit on what Medicare beneficiaries pay out-of-pocket for their prescription medications!! That’s big news. There are six elements to the Act which affect Medicare:
- Starting in 2023: 1) Vaccines can be obtained without copays; and, 2) Insulin co-pays are limited to a max of $35/month;
- Starting in 2024: 1) More people will become eligible for the “Extra Help” program which offsets out-to-pocket costs for those who fall under certain income limits; and, 2) the 5% co-insurance requirement for catastrophic coverage is eliminated; and,
- Starting in 2025: 1) the annual cap on prescription medications costs will be $2000; and, 2) recipients can opt for monthly payments to “smooth” out the yearly out-of-pocket costs for their prescription medications, if desired.
The only problem with the new system is that the payments for advisors who went through all of the options to provide recommendations for Medicare recipients are going away! So, it will be more difficult to obtain unbiased advice on which of the Medicare Advantage or regular Medicare programs to select. Those of us who are Medicare-eligible will have to do a lot more homework to prepare for the October 15 – 30 sign-up period. The problem I foresee is for those individuals who have disabilities and/or medical problems (e.g. Alzheimer’s) that prevent them from making good decisions on the fly. Whoever created the rules on this front seemed to miss the mark in my estimation. While I can make good decisions on which direction to take I have some colleagues and friends that will be baffled if they have to figure out the options on their own. If anyone thinks I’m overstating it – let me know. So, it is a bit of a roller coaster…
Paul Keckley’s Thoughts And Considerations – If you don’t get the “Keckley Report”, it is definitely one to read regularly. Paul (a good friend) regularly offers up his thoughts on all things health care. I was struck by his recent post on: “ Are Employers Ready to Move from the Back Bench in U.S. Healthcare?” from August 26, 2024. Here are a few highlights that he noted that are important for all of us in the healthcare industry to consider as we look to the future:
- For 2024, the USA population was 342 million citizens. Of that population, 92.3% (= 316M) have health insurance of which just over half of this group (51.9%) are through employment-based coverage, 17.8% (61M) hold Medicare coverage; and, 23.1% (79M) have Medicaid/CHIP coverage and 164 million through employment-based coverage.
- The Congressional Budget Office (CBO) is predicting that Medicare coverage will increase by an estimated 18% through 2032 with Medicaid/CHIP remaining about the same and employer-based coverage increasing by about 3.0% Needless to say, this puts the focus on the federal level on the state of Medicare – something America’s seniors care a lot about!! It’s an area that is ripe for further evolution and change.
- The cost of health care has risen more than 50% since 2017. Such unmitigated cost increases are clearly a front-burner issue for government, employers, self-pay individuals, or anyone taking a hard look at the healthcare world over the next several years.
Staying abreast of all these changes within the industry as well as policy analysis is a part of The Keckley Report, a period analysis on all things healthcare. If you don’t already subscribe, I highly, HIGHLY recommend it as a resource for staying abreast of policy and developments within the healthcare arena. Paul is methodical in his assessments and a trusted advisor. You will not go wrong in signing up for his regular reports. The level of increases across the board is the biggest reason that I believe we are headed toward a “value-based” financing approach to healthcare in the not-too-distant future. Too many people are affected for change not to occur!!
Private Equity Takes a Hit – The California legislature recently passed Assembly Bill (AB) 3129 on August 31, 2024. Governor Newsom (D-CA) has until September 30th to decide on whether or not to sign it into law or to veto the legislation. In essence, effective January 1, 2024, the new law will require healthcare investors – of any type – to notify and obtain written consent from the California Attorney General before finalizing the investment in certain healthcare facilities or with healthcare providers. The bill essentially raises the bar on the corporate practice of medicine by creating a protective oversight responsibility in the AG’s office to guard against commercial exploitation of the industry by private equity groups or hedge funds. While a majority of states ban corporations from practicing medicine, there are loopholes in many of those state bans. The private equity groups have become quite good at taking advantage of those loopholes by manipulating the financial levers to create mechanisms for controlling physician behavior and services.
So, why is there an evolving outrage in the healthcare community toward private equity? It’s because the only focus of these investments is on profitability – not outcomes. Most analysts within the industry – including me – have concluded that an outright ban on private equity ownership of doctors’ practices is the only way to mitigate the risks of a focus on profitability over outcomes and value. This, in essence, is the reason the California bill received such strong support in the legislature. But, the California bill goes one step further. It also includes hospitals and nursing homes in the mix. Why? Because – if you follow the money – the American taxpayer ends up with the brunt of the cost shift as these equity expenditures are folded into pricing increases by private insurance, Medicare, and Medicaid reimbursement. We – the taxpayers – end up paying the piper!!
And, to add fuel to the fire, a new report was recently released by the industry watchdog group Private Equity Stakeholder Project (PESP) on the continuing trend of bankruptcies among private equity-owned healthcare companies. In fact, private equity bankruptcies represent nearly a fourth of all bankruptcies in the healthcare space for 2024. In some respects, such levels are not surprising since many of these investments are made in high-risk ventures at the start. Eileen O’Grady, the Director of Programs at PESP observed in a statement of Health Exec on the topics: “Private equity’s aggressive financial strategies increase the risk of bankruptcy and threaten the delivery of critical healthcare services. The use of excessive debt by these firms can have significant ripple effects on the broader healthcare industry. This year might see a grim scenario of more healthcare bankruptcies if current trends persist.” In further analysis by PESP, the increase in private equity bankruptcies over the last five years has escalated by 112% with these firms holding responsibility for 1/5 of all healthcare bankruptcies.
CDC Recommends Watercress – A recent announcement by the Centers for Disease Control and Prevention (CDC) caught my attention. It was an analysis of the “nutrient density” of various foods or, in lay terms – the “healthiest” foods which were all vegetables in the top tier. And, the winner? Watercress which came in with a density score of 100 out of 100!! The runners-up included: Chinese cabbage (91.99 points), Swiss chard (89.27 points), Beetroot (87.08 points); and, Spinach (86.43 points). I thanked my lucky stars that Spinach was on the list. It’s become one of my favs among the vegetables – more so than Watercress. Which is a cruciferous vegetable that is part of the same family as kale, broccoli, Chinese cabbage, arugula, and Brussels sprouts (the underlined veggies are my other go-to's). So, the CDC findings were in line with my wife’s (almost) daily admonition that I need to eat “6 cups of fruits or vegetables” per day; and, she also reminds me that “Burger King does not serve them!” Take note and enjoy the Watercress or, Spinach – if you’re like me…but, Broccoli and Brussels Sprouts are also scrumdiliumptious!
Incidence Of Male Cancer Expected To Increase By 2050 – In a new report coming out of Australia in the journal, Cancer. the incident of “…cancer cases and deaths among men are expected to surge by 2050.” The investigators analyzed cancer cases and deaths for 30 different types of cancer across 185 territories and countries in 2022. The increase in cancer cases goes from 10.3M to 19M over the 28 years or, an 84% increase! And, more importantly, the death rate also increases from 5.4M to 10.5M or, a 117% increase. Now, this applies to men over the age of 65 years. The question is “Why?” Most likely, it’s because the number of men moving into the age cohort will also be increasing AND, globally, cancer care/treatment on an international level is not equivalent to US standards. The result is a global increase in male cancer incidence and death rates.
