Hospital Prices Just Got a Lot More Transparent. What Does This Mean for You?

Hospital Prices Just Got a Lot More Transparent. What Does This Mean for You?  | Kaiser Health News

Source: Kaiser Health News, by Julie Appleby

Hospitals face the new year with new requirements to post price information they have long sought to obscure: the actual prices negotiated with insurers and the discounts they offer their cash-paying customers.

The move is part of a larger push by the Trump administration to use price transparency to curtail prices and create better-informed consumers. Yet there is disagreement on whether it will do so.

As of Jan. 1, facilities must publicly post on their websites prices for every service, drug and supply they provide. Next year, under a separate rule, health insurers must take similar steps. A related effort to force drugmakers to list their prices in advertisements was struck down by the courts.

With the new hospital rule, consumers should be able to see the tremendous variation in prices for the exact same care among hospitals and get an estimate of what they will be charged for care — before they seek it.

The new data requirements go well beyond the previous rule of requiring hospitals to post their “chargemasters,” hospital-generated list prices that bear little relation to what it costs a hospital to provide care and that few consumers or insurers actually pay.

Instead, under the new rule put forward by the Trump administration, “these are the real prices in health care,” said Cynthia Fisher, founder and chairman of Patient Rights Advocate, a group that promotes price transparency.

Here’s what consumers should know:

What’s the Scope of the Intel?

Each hospital must post publicly online — and in a machine-readable format easy to process by computers — several prices for every item and service they provide: gross charges; the actual, and most likely far lower, prices they’ve negotiated with insurers, including de-identified minimum and maximum negotiated charges; and the cash price they offer patients who are uninsured or not using their insurance.

In addition, each hospital must make available, in a “consumer-friendly format,” the specific costs for 300 common and “shoppable” services, such as having a baby, getting a joint replacement, having a hernia repair or undergoing a diagnostic brain scan.

Those 300 bundles of procedures and services must total all costs involved — from the hardware used to the operating room time, to drugs given and the fees of hospital-employed physicians — so patients won’t have to attempt the nearly impossible job of figuring it out themselves.

Hospitals can mostly select which services fall into this category, although the federal government has dictated 70 that must be listed — including certain surgeries, diagnostic tests, imaging scans, new patient visits and psychotherapy sessions.

Will Prices Be Exact?

No. At best, these are ballpark figures.

Other factors influence consumers’ costs, like the type of insurance plan a patient has, the size and remaining amount of the annual deductible, and the complexity of the medical problem.

An estimate on a surgery, for example, might prove inexact. If all goes as expected, the price quoted likely will be close. But unexpected complications could arise, adding to the cost.

“You’ll get the average price, but you are not average,” said Gerard Anderson, a professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health who studies hospital pricing.

Tools to help consumers determine in advance the amount of deductible they’ll owe are already available from many insurers. And experts expect the additional information being made available this month will prompt entrepreneurs to create their own apps or services to help consumers analyze the price data.

For now, though, the hospital requirements are a worthy start, say experts.

“It’s very good news for consumers,” said George Nation, a professor of law and business at Lehigh University who studies hospital pricing. “Individuals will be able to get price information, although how much they are going to use it will remain to be seen.”

Will Consumers Use This Info? Who Else Might?

Zack Cooper, an associate professor of public health and economics at Yale, doubts that the data alone will make much of a difference for most consumers.

“It’s not likely that my neighbor — or me, for that matter — will go on and look at prices and, therefore, dramatically change decisions about where to get care,” he said.

Some cost information is already made available by insurers to their enrollees, particularly out-of-pocket costs for elective services, “but most people don’t consult it,” he added.

That could be because many consumers carry types of insurance in which they pay flat-dollar copayments for such things as doctor visits, drugs or hospital stays that have no correlation to the underlying charges.

Still, the information may be of great interest to the uninsured and to the increasing number of Americans with high-deductible plans, in which they are responsible for hundreds or even thousands of dollars in costs annually before the insurer begins picking up the bulk of the cost.

For them, the negotiated rate and cash discount information may prove more useful, said Nation at Lehigh.

“If I have a $10,000 deductible plan and it’s December and I’m not close to meeting that, I may go to a hospital and try to get the cash price,” said Nation.

Employers, however, may have a keen interest in the new data, said James Gelfand, senior vice president at the ERISA Industry Committee, which lobbies on behalf of large employers that offer health insurance to their workers. They’ll want to know how much they are paying each hospital compared with others in the area and how well their insurers stack up in negotiating rates, he said.

For some employers, he said, it could be eye-opening to see how hospitals cross-subsidize by charging exorbitant amounts for some things and minimal amounts for others.

“The rule puts that all into the light,” said Gelfand. “When an employer sees these ridiculous prices, for the first time they will have the ability to say no.” That could mean rejecting specific prices or the hospital entirely, cutting it out of the employer plan’s insurance network. But, typically, employers can’t or won’t limit workers’ choices by outright cutting a hospital from an insurance network.

More likely, they may use the information to create financial incentives to use the lowest-cost facilities, said Anderson at Johns Hopkins.

“If I’m an employer, I’ll look at three hospitals in my area and say, ‘I’ll pay the price for the lowest one. If you want to go to one of the other two, you can pay the difference,’” said Anderson.

Will Price Transparency Reduce Overall Health Spending?

Revealing actual negotiated prices, as this rule requires, may push the more expensive hospitals in an area to reduce prices in future bargaining talks with insurers or employers, potentially lowering health spending in those regions.

It could also go the other way, with lower-cost hospitals demanding a raise, driving up spending.

Bottom line: Price transparency can help, but the market power of the various players might matter more.

In some places, where there may be one dominant hospital, even employers “who know they are getting ripped off” may not feel they can cut out a big, brand-name facility from their networks, no matter the price, said Anderson.

Is the Rule Change a Done Deal?

The hospital industry went to court, arguing that parts of the rule go too far, violating their First Amendment rights and also unfairly forcing hospitals to disclose trade secrets. That information, the industry said, can then be used against them in negotiations with insurers and employers.

But the U.S. District Court for the District of Columbia disagreed with the hospitals and upheld the rule, prompting an appeal by the industry. On Dec. 29, the U.S. Court of Appeals for the District of Columbia affirmed that lower-court decision and did not block the rule.

In a written statement last week, the American Hospital Association’s general counsel cited “disappointment” with the ruling and said the organization is “reviewing the decision carefully to determine next steps.”

Apart from the litigation, the American Hospital Association plans to talk with the incoming Biden administration “to try to persuade them there are some elements to this rule and the insurer rule that are tricky,” said Tom Nickels, an executive vice president of the trade group. “We want to be of help to consumers, but is it really in people’s best interest to provide privately negotiated rates?”

Fisher thinks so: “Hospitals are fighting this because they want to keep their negotiated deals with insurers secret,” she said. “What these rules do is give the American consumer the power of being informed.”

Amazon’s Haven Healthcare Venture To Shut Down


Source: Forbes, by Bruce Japsen

The Haven healthcare venture created by Amazon, Warren Buffett’s Berkshire Hathaway and JPMorgan Chase is shutting down.

The end of the venture, which launched with great fanfare three years ago in a press release from the three business titans, never really got off the ground with steady leadership and included several executives who came and left after short stints. One key hire, Dr. Atul Gawande, stepped down as CEO after a short time but remained on the board.

A year ago, one Haven executive departed after less than a year in a key operations role, further adding to the often rocky rollout and execution of a healthcare company that many touted as a watershed moment in employer efforts to reign in healthcare costs and improve quality.

But Haven said it did launch some pilot programs and those efforts would now be continued at Amazon, Berkshire and JPMorgan. Haven didn’t mention those efforts in a website announcement that it “will end its independent operations” at the end of February, the company’s website says.

“In the past three years, Haven explored a wide range of healthcare solutions, as well as piloted new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable,” Haven said on its website. “Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of their own employee populations.”

CNBC reported Haven began “informing employees Monday that it will shut down” and “many of the Boston-based firm’s 57 workers are expected to be placed at Amazon, Berkshire Hathaway or JPMorgan Chase as the firms each individually push forward in their efforts,” the network said, citing “people with direct knowledge of the matter.”

Little has been disclosed by Haven or its owner companies since the highly-publicized January of 2018 announcement of the partnership to fix healthcare for their employees.

Meanwhile, rival retail giant Walmart has been forming partnerships with medical care providers for years now. And drugstore chains CVS Health and Walgreens Boots Alliance have announced several pilots, tests and programs with health insurers and providers for their customers and workers.

“Haven’s decision to cease operations proves just how hard it is to disrupt the health care system in America,” said Robert Andrews, chief executive of Health Transformation Alliance, a cooperative that includes some of the nation’s largest employers that spend nearly $30 billion annually on healthcare. “Even three of the largest and most influential employers in the country found the challenge a very steep one. We share with Haven’s founders the conviction that employer sponsorship is key.”

California’s Vaccine Rollout Has Been Too Slow, Newsom Says, With Only 35% Of Doses Administered

A paramedic gives Los Angeles Fire Department Capt. Elliot Ibanez a shot in the arm.

Source: Los Angeles Times, by Luke Money, Taryn Luna, and Colleen Shalby

Only about 35% of the COVID-19 vaccine doses that have arrived in California have been administered so far, a rate Gov. Gavin Newsom acknowledged Monday was “not good enough” as he pledged new funding and efforts aimed at ramping up the rollout.

California has received just under 1.3 million vaccine doses, but just more than 454,000 people have received the shots, according to figures Newsom presented.

Though he has regularly maintained that distribution of the long-awaited vaccines would build up more rapidly over time, he said the process had, to this point, “gone too slowly, I know, for many of us.”

Newsom provided no clear answer during a news conference to questions about the cause of the lag, only promising “a much more aggressive posture” and additional details in the coming days.

“We want to see 100% of what’s received immediately administered in people’s arms, and so that’s a challenge,” he said during a briefing. “It’s a challenge across this country — it’s a challenge, for that matter, around the rest of the world. But that’s not an excuse.”

The government’s ability to quickly and effectively distribute vaccines is critical to California’s fight against the virus and a key test for Newsom. Though his original stay-at-home order helped suppress the virus early in the pandemic, the state is now experiencing one of the highest rates of transmission in the country.

Distribution of the vaccine has been slower than anticipated across the United States. In California, the complicated effort has been made more difficult by layers of federal, state and local rules governing the process for healthcare providers to prioritize patients and administer vaccines, said Matt Willis, public health officer for Marin County.

In comparison to a “come one come all” approach to distributing a standard flu vaccine, the COVID-19 vaccine presents a “logistically and operationally more complex” undertaking for an already stressed statewide healthcare system, he said. In order to administer the vaccine, providers must be approved by the state. Each person who receives a vaccine must be determined to be in the appropriate tier group and registered in a data management system to ensure they receive an additional dose on time, among countless other hurdles.

“Our bandwidth is really constrained right now,” Willis said. “The infrastructure that would normally be dedicated to prioritizing the vaccine distribution plan is overwhelmed with surges in cases.”

Another hiccup that has emerged in the vaccine rollout has been making sure doses don’t go to waste. The two vaccines that are available in the U.S. — one from Pfizer-BioNTech and the other from Moderna — are packaged in vials that contain multiple doses, and each vial has a limited shelf life of roughly six hours after it’s opened.

State officials have pledged to punish those who try to abuse their power or position to jump into the vaccination queue before their appointed time — a warning that has made some providers hesitant to administer leftover doses to those outside the first tier group of front-line healthcare workers and residents of long-term care facilities such as nursing homes.

In some instances, non-front-line workers have been offered the vaccine when a surplus occurred after all eligible staff were reportedly granted access. Redlands Community Hospital in San Bernardino County said recently that several non-front-line workers were provided the extra doses. Under state guidelines released last month, health departments and facilities may offer vaccine to people in lower-priority groups when demand eases and doses are about to expire.

This week, the administration issued what Willis described as a “course correct” to give local health departments more latitude to broadly vaccinate healthcare workers, instead of following earlier state guidance to prioritize primary care clinics over specialty clinics, for example.

Dr. Mark Ghaly, California’s Health and Human Services secretary, said the federal government gives California a weekly vaccine allocation and the state determines which counties will receive those doses. The local jurisdictions work with healthcare providers in their areas and vaccines are shipped directly from manufacturers to vaccination sites.

Ghaly also said the state is working to clarify that vaccinators should not let remaining doses go to waste.

“The bottom line is there’s a lot of complexities with the vaccine initiative, and we want to make sure the state of California doesn’t contribute to that complexity,” Ghaly said.

Ghaly said the state will continue to prioritize populations that are most vulnerable due to their exposures to the virus and potential health risks.

“We don’t want that prioritization to be diminished in any way, while also continuing to encourage fast and efficacious vaccination of our communities,” he said.

When it comes to enforcement, Newsom said, “we’re just looking for gross negligence: people that are skipping the line that know they shouldn’t be skipping the line, people taking care of people of means and influence, not the rest of us.”

“We have plenty of people that want to take that shot,” he said, “and the key is to make sure that, while we are enforcing the rules of the road, we’re aren’t enforcing against just common sense and the energy of someone who says: ‘Look, I don’t want to waste this dose. Why don’t I get it to someone?’ ”

State officials are also using survey data to determine how many front-line workers are turning down the COVID-19 vaccine, Newsom said Monday.

L.A. County public health director Barbara Ferrer said Monday that there isn’t “a registration system that tracks workers who decide to wait” or turn down the vaccine.

Some counties throughout the state told The Times last week that, based on anecdotal evidence, 40% to 50% of eligible front-line workers have turned down the vaccine. The hesitancy has affected healthcare workers in hospitals as well as staff inside nursing homes.

In order to accelerate the pace of vaccinations, Newsom said his administration is working to increase the number of distribution sites and to allow dentists, pharmacy technicians and other professionals to administer the shots, while also increasing the use of the California National Guard. He pledged to unveil more details “on some new strategies to deal with some of the roadblocks” soon.

Newsom said the budget proposal he would submit to the state Legislature later this week included roughly $300 million to support vaccination efforts by bankrolling logistics, a public education campaign and other needs.

The governor said an additional 611,500 vaccine doses are slated to be shipped to California over the next week.

Health Broker Comp Disclosure Provision Included In COVID Spending Package

Piggy banks with calculator and stethoscope

Source: BenefitsPRO, by Allison Bell

(Editor’s Note: After this article appeared, the bill – including the broker compensation disclosure language – passed Congress and was signed into law by President Trump. Word & Brown will closely monitor the rules process and provide updates for broker planning purposes. Please watch future editions of the John & Rusty Report for details as they develop.)

Congress has sent President Donald Trump a giant spending and coronavirus relief package, the Consolidated Appropriations Act, 2021 (CAA 2021) package, that includes a sweeping health insurance agent and broker compensation disclosure provision.

  • * A collection of documents related to the version of the Consolidated Appropriations Act, 2021, package that the House Rules Committee took up is available here.
  • * The 5,593-page PDF file that contains the health agent and broker compensation disclosure provision, on page 4,475, is available here.

Congress broke the CAA 2021 package into parts when voting on it.

Members of the House voted 359-53 for the section containing the health insurance producer compensation disclosure section.

Members of the Senate approved the section by a 92-6 vote.

CAA 2021

The parts of the CAA 2021 package getting the most attention would provide funding for COVID-19 pandemic response efforts, such as extra funding for public health programs, an extra $300 per week in unemployment benefits for displaced workers, and one-time cash payments of $600 to taxpayers to Americans who earn less than $75,000 per year.

The heart of the package is appropriations provisions, or the statutes that give the U.S. Treasury Department, the U.S. Defense Department, the U.S. Department of Health and Human Services and other federal departments and agencies permission to spend the money necessary to stay in operation.

Health insurers, health care provider groups and others have given some attention to the No Surprises Act section. The No Surprises Act section is part of Division BB of the bill, which has the title “Private Health Insurance and Public Health Provisions.”

The No Surprises Act section

Drafters of the No Surprises Act section want to eliminate situations that lead to patients with health coverage getting huge, unexpected medical bills, or “surprise bills,” and going after patients for the balance between what the health insurers will pay and the full charges.

The No Surprises Act would keep out-of-network providers at in-network hospitals, air ambulance service providers, and other emergency services providers from “balance billing” patients for amounts far over typical in-network provider rates. The section would also set up an arbitration-based system for resolving rate disputes between insurers and out-of-network providers.

America’s Health Insurance Plans, a group for health insurers, has said that it likes much of the CAA 2021 package but believes the dispute resolution provision could make administering out-of-network claims and drive up costs.

The comp disclosure section

The health agent and broker comp disclosure provision is in a bundle of health care price transparency provisions that comes after the No Surprises Act section.

The health agent and broker comp provision is based on language that has been under serious discussion in the Senate since at least May 2019.

The provision is the fruit of efforts by Sen. Lamar Alexander, R-Tenn., the chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, and Sen. Patty Murray, D-Wash., to lead a bipartisan effort to come up with ideas for improving the U.S. health care delivery and U.S. health care finance systems.

Another provision in the transparency section would ban price information confidentiality clauses in health coverage arguments.

AHIP and some independent antitrust experts have argued that, in some cases, bans on gag clauses could encourage health care providers to bid up their fees and drive up health care costs, rather than doing much to help patients shop for cheaper care.

The agent and broker comp disclosure provision is in Section 202 of Division BB.

The section would apply to a producer or entity expecting to earn more than $1,000 in direct or indirect compensation for selling or administering individual or group health coverage. ”Compensation” would mean “anything of monetary value,” but would not include “non-monetary compensation valued at $250 or less.”

Affected companies and individuals would have to disclosure their compensation to employers or individual coverage holders.

Producers could could report compensation as a monetary amount, a formula, a per-enrollee charge, or using ”any other reasonable method,” according to the draft text.

The section includes a “good faith” provision that explains what agents or brokers who have accidentally left information out or made mistakes can do to correct errors or omissions.

Other sections

The CAA 2021 also includes many other sections relevant to health insurance professionals, including health care provider cost disclosure rules, rules for encouraging employer participation in state claims payment databases, and many Medicare sections.

One Medicare “extender” provision, for example, would maintain a provision that protects some assets of a spouse who lives in the community and has a spouse who is using Medicaid to pay for nursing home care.

Another section, in Division H, encourages the Social Security Administration to do something about the Social Security Disability Insurance program claim appeal backlog.

Division H would provide $400,000 for the federal Family Caregiving Advisory Council, $2 million for the National Alzheimer’s Call Center, and $12 million for the Elder Justice and Adult Protective Services program. The agreement also includes $2 million in grants for efforts to analyze and improve state guardianship laws.

Legislative nuts and bolts

The CAA 2021 package is, officially a Senate Amendment to a House bill, H.R. 133, the “United States-Mexico Economic Partnership Act” bill, not a bill in its own right.

The House Rules Committee — a body that packages legislation for action on the House floor —  met Monday to set the rules for floor consideration of CAA 2021. The version of the package text described here is the 5,593-page House Rules Committee Print 116-68 document posted on the House Rules website.

Division BB of the CAA 2021 package starts on page 4,095 of the House Rules Committee Print 116-68 PDF file.

The agent and broker comp disclosure starts on page 4,475.

A group of Republican lawmakers that includes Rep. Chip Roy, R-Texas, has asked the president to veto the package, arguing that the package is a $1.3 trillion example of “everything that is wrong with the swamp politics of Washington, D.C.”

“Particularly at a time when our federal government is spending trillions of dollars on an emergency basis, we should be doing the hard work of finding offsetting savings elsewhere,” package opponents argue.

If the president vetoed the package, Congress could vote to overturn the veto, come up with a spending measure that the president could sign, or face the prospects of much of the U.S. government suspending operations.

The president has already signed a bill that will extend funding for government operations at least through Dec. 28.

California Leaders Fear Remote Culture Could Fuel Business Departures

California leaders fear remote culture could fuel business departures

Source: Politico, by Katy Murphy

Fed-up Californians have been trading their cramped, pricey apartments for affordable living in cheaper states for decades. Now, California’s businesses are making similar calculations after a months long remote work experiment triggered by the pandemic.

Back-to-back moves of iconic Silicon Valley firms’ headquarters to Texas are raising fresh concerns about California’s standing in the innovation economy. Business leaders worry that the successful shift to remote work — and the ability of many jobs to be performed from anywhere — will drive yet more companies out of the notoriously high-cost state.

“This pandemic really had a steroidal effect on the ecosystem,” said Jim Wunderman, who heads the Bay Area Council, a business group that represents CEOs in the region. “I think it behooves us to recognize we have a problem.”

California has long counted on its natural beauty and sunny climate, along with its concentration of venture capital, talent and prestigious research universities, to maintain its status as the world’s premier tech hub. The state’s cultural diversity has long drawn some of the world’s best talent.

But there is more to the package: the nation’s highest top marginal income tax rate, runaway housing costs — driven in part by an influx of well-paid tech workers — and extreme wildfires that have swept the state with ferocity in recent years. Companies also must pay employees higher wages to live in California.

Such costs, paired with the pandemic, appear to have tipped the balance for established tech companies such as Oracle and Hewlett-Packard Enterprise, an IT company that spun off from HP during a 2015 corporate split. Both announced in December they would move their headquarters to Texas while maintaining a presence in California and allowing many employees to remain there.

“We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work,” the software giant wrote to shareholders this month, explaining its surprise decision to move its headquarters from the heart of the Silicon Valley to Austin, Texas.

Also this month, the Bay Area cybersecurity firm Tanium announced it was moving to the Seattle area while allowing employees to “live where they want, and work from there.” Palantir, a data analytics company co-founded by billionaire investor Peter Thiel, shifted its headquarters to Denver before going public this fall. Tesla CEO Elon Musk has also said he is moving to Texas, where he is building a new factory; Tesla’s headquarters remains in Palo Alto.

At a Wall Street Journal event this month, the billionaire compared California to a winning team that grows “complacent” and takes its success for granted. Musk will also avoid state income taxes by decamping to Texas, given California’s progressive tax structure that relies overwhelmingly on top earners.

If enough wealthy businesspeople and high-paying jobs leave the state, California’s budget could feel the pinch. Nearly half of the state’s personal income tax revenue — 46 percent in 2018 — comes from California’s top 1 percent of earners, according to data from the state Franchise Tax Board. And about two-thirds of those dollars come from the top 5 percent.

The pandemic could accelerate departures among companies and workers that have already mulled a move, said David Shulman, a senior economist at the UCLA Anderson Forecast. He also predicts that more firms will allow their employees to live anywhere, even when it’s deemed safe to return to the workplace.

“Everything’s up for grabs right now because everybody’s rethinking location,” Shulman said.

Accounting, legal and real estate firms are now being asked to help corporate clients in the Bay Area investigate whether and how to relocate, Wunderman said.

“This is a tough state to do business in,” he said. “There’s a wariness that the next shoe will certainly drop and what will it be?”

Californians in November rejected a ballot measure that would have hiked taxes on commercial properties by reassessing them at market value. Separate proposals backed by labor, environmental and health care groups aimed to create new “millionaire” taxes to increase funding for education and government services. Neither bill advanced, but they may be considered next year.

For all of the talk of an exodus, California’s budget has weathered the pandemic well thanks to continued gains among affluent residents who remain here. The state’s nonpartisan Legislative Analyst’s Office reported this week that income tax withholding has actually outpaced 2019 over the nine months since pandemic closures began while it projects the state will have a $26 billion “windfall” over the next 18 months.

Dee Dee Myers, a communications strategist and former White House press secretary recently hired to lead Gov. Gavin Newsom’s business and economic development office, says the California exodus narrative is overblown — as it was after the dot-com bust, the Great Recession and other low points in the state’s recent history.

“This kind of breathless, ‘Oh my God it’s over!’ Like I said, we’ve seen this movie before and it’s predictable,” she said in an interview last week.

Days after the Oracle news broke, her office tweeted a link to Fortune’s new rankings of the fastest-growing companies, noting that eight of the top 25 are based in California — including top-ranked AppFolio, a cloud-based software company headquartered in Santa Barbara.

But the recent moves created enough angst that prominent tech leaders like Salesforce Chief Operating Officer Bret Taylor and Airbnb CEO Brian Chesky felt compelled to affirm their commitment to California.

“Yes, I spoke to @GavinNewsom about this,” Chesky tweeted after the Oracle announcement. “Airbnb is staying in California and I’m staying in California. This is a special place.”

Taylor addressed the situation in a series of tweets in which he noted that “the tone of many leaving has bothered me” and that he was “excited to stay in the Bay Area,” where he was born.

“And I have never been more optimistic about the future of California,” he wrote.

Myers said the state will need to keep investing in areas such as clean energy and higher education to keep its edge. But it’s too soon to know how the pandemic will change where people live and work in the long run, she said — or how many businesses will continue their fully-remote policies permanently.

“We are not oblivious to the challenges,” Myers said. But, she added, “I think anybody who thinks they know what the world is going to look like in three years is just making it up.”

For now, most tech companies in California are sticking it out. The number of innovation-economy jobs statewide grew between the second quarters of 2018 and 2020, according to an analysis of Bureau of Labor Statistics employment and wage data by Ken Murphy, an assistant professor at UC Irvine’s Merage School of Business.

But Washington, Utah and Florida have added tech jobs at an even faster rate, Murphy said, and there is evidence that firms may be looking outside of the state for lower-cost, lower-tax alternatives. Counting each office and facility separately, he found a sharper uptick in the number of “innovation establishments” in nine other states during the past two years, with the largest percentage increases in Arizona, Utah, Oregon and Texas.

Rental data suggests that workers have left the Bay Area in significant numbers as the pandemic untethered many from their company offices — and, in some cases, from their children’s schools, which have remained fully virtual since mid-March. Rents in the city of San Francisco have fallen by nearly 14 percent since last year, according to data from the real-estate firm Zillow. Some people have simply left for the suburbs, but the metro areas in San Francisco and San Jose have also seen rents soften.

“The big question, really, is how permanent is this move?” said Cheryl Young, a senior economist at Zillow.

The latest corporate announcements, Young said, could signal a more lasting shift. “There is some movement away from California as a central headquarters,” she said. “It’s much more expensive here to own a home, so recruiting talent and paying talent to move here does cost a company more.”

Another potential sign that California may be losing its magnetic pull: State data released this month showed historically low population growth, a trend attributed partly to the pandemic. The state’s net outmigration rate continues to climb and has not been offset by as many residents from other states and nations moving to California as in the past.

Meanwhile, some business leaders are publicly casting doubt on the California bargain.

“I think every responsible chief executive officer has to consider moving their company out of California,” Tom Siebel, CEO of the artificial intelligence software company Inc., told the Silicon Valley Business Journal this month on the day of the Redwood City-based company’s IPO. “If you’re not considering that, you’re not fulfilling your job for your shareholders and your employees.”

Private Insurers Getting Smaller Share Of Health Expenditure Pie

Private Insurers Getting Smaller Share of Health Expenditure Pie |  ThinkAdvisor

Source: BenefitsPRO, by Allison Bell

Increases in spending on hospital care, physician services and prescription drugs squeezed U.S. commercial health insurers in 2019, according to new federal government health spending data.

Health insurers’ revenue increased 3.7% between 2018 and 2019, to $1.2 trillion.

Although revenue rose, the “net cost of health insurance” fell to $131 billion, from $142 billion in 2018.

The net cost of health insurance is the amount private health insurers have left overpaying after paying claims.

The Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) published the health insurance spending figures earlier this week in a new batch of national health expenditures tables. The report reflects the effects of a measles outbreak that hit the United States in 2019. The report does include the impact of COVID-19 pandemic.

Overall national health spending increased 4.6% in 2019, to $3.8 trillion, or 17.7% of gross domestic product.

In 2018, U.S. health spending increased 4.7%.

Here’s a look at how key items in the health spending tables changed between 2018 and 2019:

  • * Home Health Care: $113 billion (Up 7.7%)
  • * Structures and Equipment: $145 billion (Up 6.3%)
  • * Hospitals: $1.2 trillion (Up 6.2%)
  • * Prescription Drugs: $370 billion (Up 5.7%)
  • * Medical Research: $57 billion (Up 5.5%)
  • * Durable Medical Equipment: $58 billion (Up 5%)
  • * Doctors: $772 billion (Up 4.6%)
  • * Nursing Home Care: $173 billion (Up 3.3%)
  • * Net Cost of Private Health Insurance: $240 billion (Down 3.8%)
  • * The U.S. Population: 328 million (Up 0.5%%)
  • * U.S. Gross Domestic Product: $21.4 trillion (Up 4%)

The annual National Health Expenditures can also help address the question of what kind of impact the Affordable Care Act and other health system change efforts on U.S. health care spending.

Most of the major ACA programs and provisions came to life in 2014.

For a look at what happened to spending in six major categories between 2013, before the ACA had much effect on spending, and 2019, see the slideshow above.

HHS Proposes Changes To HIPAA That Would Empower Patients And Providers

Source: BenefitsPRO, by Alan Goforth

Patients and providers would have more decision-making power over their health records under proposed changes to HIPAA. The Department of Health and Human Services’ Office for Civil Rights (OCR) last week recommended several changes that would make it easier for clinicians to share patient data with other providers, insurers and social service agencies for coordinating patient care.

“I give OCR a lot of credit for trying to come up with some proposals to really thread the needle in some difficult disclosure situations,” said Deven McGraw, a former deputy director for health information privacy at OCR.

Under the proposed rule, providers would be able to disclose patient data – to family members, for example — if they believe it’s in the patient’s best interest. It’s designed to allow more data sharing than current rules, which allow providers to base decisions only on “professional judgment.” The new standard would be more permissive, because it “presume(s) a covered entity’s good faith,” according to the proposed rule.

The changes also would make it easier for providers to disclose patient data to third-parties such as law enforcement when they believe a threat to health or safety is “serious and reasonably foreseeable,” rather than the current, stricter standard that allows disclosures only when there’s a “serious and imminent” threat to health or safety.

“These are not easy judgment calls to make,” McGraw said. “You don’t really want regulators making the call on this one. Ideally, you want medical professions to be sharing when they should share and not sharing when they shouldn’t, but it’s very hard to get the legal standard right.”

The proposed changes are in line with the Trump Administration’s focus on ensuring that regulations don’t stand in the way of patients being able to access their own health information, with updates such as shortening the period in which covered entities are required to respond to patients’ record requests from 30 to 15 days.

“It’s clear that there should not be barriers to individuals getting their own information into their own hands,” said Matthew Fisher, partner and chair of the health law group at Mirick O’Connell. “It’s long overdue, and feet are going to be held to the fire.”

Michelle De Mooy, a data privacy and ethics consultant, supports the proposal to stop requiring patient signatures for privacy notices because “it’s basically useless for everybody involved.” She said it’s smart to keep HIPAA notices “short and sweet” so patients can easily understand their rights and how to exercise them.

Industry watchers expect a Biden administration to pick up the proposed rule and continue work on a final version after the public comment period closes, particularly because data sharing and patient privacy are largely bipartisan issues that have also been touted by Biden. “I would anticipate that this (proposed rule) keeps moving forward,” said Tom Leary, senior vice president of government relations at the Healthcare Information and Management Systems Society.

However, many of the proposed changes, such as requiring providers to respond to patients’ record requests in 15 days and restructuring how to verify patient identities, will require hospitals to revisit procedures for sharing records and maybe even hire new staffers to avoid creating more burden for those workers.

Rand Seigel, an attorney and partner in Manatt Health, recommends that hospitals ensure health information management or medical records departments have enough staff to review and respond to patient requests within the required 15-day window and IT systems are up-to-date so they can hook up to third-party apps, as well as educating staff about possible changes. “This recent shift to thinking more about sharing (data) and not erring on the side of protecting is a very significant shift in the mindset of a provider,” she said.

The public comment period for the proposed rule closes in February.

What To Expect In 2021 And Beyond? IDC Offers 10 Healthcare Predictions

Source: Healthcare IT News, by Mike Miliard

In the recent “IDC FutureScape: Worldwide Health Industry 2021 Predictions” report, experts at IDC Health Insights offer their thoughts about the issues healthcare and life science organizations will contend with over the next year and beyond.


Unsurprisingly, 2021 will largely be shaped by “the disruptive forces of COVID-19,” according to IDC, which sees the pandemic as having changed “everything across all verticals now and into the future.”

Across organizations of all shapes and sizes, researchers see improved resilience, changes around supply chains and resource consumption, new approaches to data management and IT architecture – and a rethinking of relationships with both employees and healthcare consumers.

Here are IDC’s 2021 predictions. Read more about each by accessing the full report.

  • * The economic and clinical vulnerability resulting from the pandemic will drive 20% of healthcare organizations to embrace integrated care to improve outcomes during 2021.
  • * By the end of 2021, seven of the 10 leading wrist-worn wearables companies will have released algorithms capable of early detection of potential signs of infectious diseases, including COVID-19 and the flu.
  • * Accelerated by the emergence of the new coronavirus, investments by life science companies in digital initiatives to support the utilization of real-world evidence globally will double by 2022.
  • * Alarmed by COVID-19 pandemic shortages, life science and healthcare provider companies will increase investments in AI and advanced analytics by 50% by 2022 to avoid future supply chain disruptions.
  • * By 2023, 65% of patients will have accessed care through a digital front door as healthcare providers look for better ways to improve access, engagements and experiences across all services.
  • * Fueled by COVID-19, digitally enabled remote care and clinical trials will drive 70% growth in spending on connected health technologies by providers and life-science companies by 2023.
  • * By 2023, 60% of health insurance products will be characterized by two communities, standard or individualized, which will be portable and accommodate social determinants of health.
  • * By 2024, the proliferation of data will result in 60% of healthcare organizations’ IT infrastructure being built on a data platform that will use AI to improve process automation and decision-making.
  • * To enable immersive training for healthcare professionals and enhance customer experience, 60% of providers will move from proof of concept to full deployment of AR/VR technologies by 2025.
  • * By 2026, 65% of medical imaging workflows will use AI to detect underlying disease and guide clinical intervention, while 50% will use teleradiology to share studies and improve access to radiologists.


‘Tis the season for crystal ball gazing, of course, and several recent reports from other research firms have offered their own predictions for what healthcare will look like in 2021.

A study from research and consulting giant PwC, for instance, sees six big challenges ahead, HITN Features Editor Bill Siwicki reports: “rightsizing after the telehealth explosion; adjusting to changing clinical trials; encouraging digital relationships that ease physician burdens; forecasting for an uncertain 2021; reshaping health portfolios for growth; and building a resilient and responsive supply chain for long-term health.”

Other experts, meanwhile, foresee a future where health systems are “consumer-centric, wellness-oriented and digitally connected.”


“The 2021 worldwide health industry predictions focus on the disruptive forces of COVID-19 and how the pandemic changes everything,” said Mutaz Shegewi, research director, IDC Health Insights, in a statement.

“The transformation taking shape in the new normal and journey that lays ahead toward the next normal presents with it many emerging opportunities, challenges, use cases, and lessons that will fast-forward healthcare and life sciences into an entirely unforeseen future.”

From COVID-19 To Retail Health: Fierce Healthcare’s Biggest Stories Of 2020

White House

Source: Fierce Healthcare, by Paige Minemyer & Heather Landi

2020 was a year dominated by the fallout from a generational global pandemic.

So perhaps it’s no surprise that COVID-19 headlines also governed much of our coverage over the course of this year, as we shared the latest on how the coronavirus pandemic was impacting you.

However, over the course of the year, other key topics of interest emerged: including a contentious presidential election, new models for health insurance, and tech giants’ continued push into the market.

Here’s a look at some of the topics that made headlines this year.

COVID-19 driving significant industry change

Over the course of the year, COVID-19 touched every facet of the healthcare industry. And the pandemic’s reach forced providers, payers, and health tech companies alike to rethink their approach in a number of areas.

Slammed with cases, hospitals were forced to overhaul their supply chain thinking. That included building more local ties to secure needed supplies, as well as elevating the voice of supply chain executives as obtaining necessary items proved a challenge.

Some large health systems purchased a stake in a personal protective equipment manufacturer in a bid to mitigate the supply chain challenges for those items.

Major health insurers, meanwhile, are well-positioned to weather the pandemic financially but used their muscle to back studies on the virus, such as Cigna researchers examining lingering effects or UnitedHealth Group analysts teaming with Eli Lilly to study its antibody therapy.

Pharmacy benefit managers have had to take a second look at how they approach specialty pharmacy and distribution, especially as two vaccines for the virus are now coming to market.

Telehealth boom isn’t going away

One of the biggest trends under the pandemic was the massive growth in telehealth use as people avoided in-person visits to the doctor.

Early in the pandemic, the Trump administration eased barriers to Medicare reimbursement for telehealth services, including telephonic visits, which allowed for more providers to offer such services to patients.

Telehealth companies’ business was also booming this year. Teladoc, for example, saw its telehealth visits grow 163% over the first three quarters of 2020, reaching 7.6 million visits compared to 2.9 million in 2019.

Teladoc’s revenue skyrocketed in tandem, increasing by 79% over the first nine months of the year. Amid the strong financial performance, Teladoc quickly finalized an $18.5 billion deal to acquire virtual care company Livongo, creating a digital health behemoth.

The telehealth boom has proven especially crucial for mental health services, particularly as stress and anxiety due to the pandemic has weighed heavily on many Americans.

Virtual mental health startup Ginger reported use of its text-based platform was up 309% this year compared to pre-COVID levels, and Doctor On Demand saw record levels of teletherapy visits in September and October.

Biden battles for the White House

The pandemic coincided with a contentious battle for the White House, which saw President Donald Trump face off against former Vice President Joe Biden.

Biden’s victory paves the way for significant change in how the federal government approaches healthcare policy. The Obama administration VP has pushed for fixes to enhance and stabilize the Affordable Care Act, including greater subsidies and the launch of a public insurance option.

A Biden administration could also be quite aggressive in the push for value-based care, which would carry on a trend set under both President Barack Obama and Trump, experts said. Value-based care has largely been a “nonpolitical” issue under both administrations.

Biden has also proposed lowering the eligibility age for Medicare to 60.

There are multiple steps the incoming president could take through executive action, as well, experts said. For one, he could begin to unwind waivers for Medicaid work requirements approved under the Trump administration.

In addition, a Biden administration could launch a special enrollment period on the ACA exchanges as a response to the Trump administration’s decision to cut back the length of open enrollment.

Retail healthcare’s influence continues to grow

Walmart, CVS pharmacies, Walgreens, Rite Aid, and other big names in retail healthcare have continued to expand their reach in the market over the course of this year.

CVS and Walgreens have been key players in the lead up to vaccine distribution, with both partnering with the Trump administration to rapidly deploy COVID-19 vaccines in nursing homes beginning this week.

Retail pharmacies and sites like Walmart stores have also been critical in testing efforts. CVS Health alone administered 6 million COVID-19 tests between March and the end of Q3.

But while they’ve played a major role in the pandemic response, these companies haven’t slowed their efforts to chip away business from traditional players. Rite Aid launched its RxEvolution store overhaul this year, which aims to keep the company competitive in the market.

The new stores harness the connection of pharmacists to patients to provide a more holistic care experience, though they will not include specialty or primary care clinics. Walgreens and CVS have both grown their in-store primary care clinics.

Walmart, meanwhile, is planning to continue opening its health clinics in several states, which offer a slew of services at a flat fee to patients with or without insurance. It also launched an insurance brokerage earlier this year, and co-branded Medicare Advantage plans with Clover Health.

The retail giant has also worked with Oak Street Health to open clinics at its supercenters.

New commercial insurance models emerging

Employers were eyeing ways to avoid continuing to shift additional health costs to workers before the pandemic, and the economic effects of COVID-19 are only intensifying that interest.

Insurers like Aetna are aiming to meet the demand for alternatives to traditional high-deductible plans with new approaches, such as the payer’s new Upfront Advantage and Flexible Five benefit designs, which both offer access to free services for members before they pay their deductibles.

Aetna also launched a new plan design that centers parent company CVS Health’s services as a way to control costs.

PBMs, meanwhile, are going to be forced to take a good hard look at how they do business now that the Trump administration has finalized a rule that would eliminate safe harbors for drug rebates in Part D.

In addition, a recent Supreme Court ruling could lead to states increasing oversight of how PBMs operate.

Startups like RxAdvance have begun to plot out what the PBM model looks like without rebates and are embracing technology to chart a new course forward.

Big tech makes major healthcare moves

Microsoft, Google and Amazon Web Services (AWS) are all pushing deeper into healthcare in a battle to provide cloud computing and data storage technology to hospitals.

The COVID-19 pandemic seems to have only accelerated the big tech giants’ push into the healthcare space as the companies quickly launched new tools to aid in fighting the health crisis, such as AI-based chatbots to help triage patients.

Apple and Google also teamed up to create digital contact tracing technology that can be used by public health agencies to track COVID-19. Apple and Google’s exposure notification application programming interface (API) is now available to states, public health agencies and governments to build apps that will notify people via smartphone if they’ve come into contact with someone with the coronavirus.

The tech companies continue to build out their capabilities in healthcare and all three have signed partnership deals with major health systems and payers.

Microsoft this year rolled out a new cloud service designed specifically for healthcare. Microsoft Cloud for Healthcare brings together existing services like chatbots, Microsoft 365, Teams and Azure as well as future capabilities that deliver automation and efficiency on high-value workflows.

Amazon has grabbed the biggest headlines and ramped up healthcare competition among national pharmacy giants lives CVS and e-prescribing service Surescripts with the rollout of its own online pharmacy. Amazon Pharmacy, a new store on Amazon, will allow customers to complete an entire pharmacy transaction on their desktop or mobile device through the Amazon app,

In a bid to compete with Apple in the virtual health research space, Google recently launched a new mobile app that lets smartphone users participate in virtual health studies. Its new Google Health Studies app with an initial focus on respiratory illnesses, including influenza and COVID-19.

The tech giant is playing catch-up to competitor Apple, which has made strides in remote research efforts since rolling out its first virtual health study in 2017.

Google Cloud also rolled out new tools and services to help providers and payers advance data interoperability in advance of upcoming federal deadlines, among other initiatives.

California’s COVID-19 Surge Sparks Battle Between Hospitals and Nurses Over Workload

Source: KQED, by April Dembosky

Telemetry nurses in California normally take care of four patients at once. But after the state relaxed California’s unique nurse-to-patient ratios in mid-December, Nerissa Black has to keep track of six.

And those six patients are really sick: They all need constant electronic monitoring and many of them are being treated simultaneously for a stroke and COVID-19, or a heart attack and COVID-19. Black says she’s worried she’ll miss something or make a mistake.

“We are given 50% more patients and we’re expected to do 50% more things with the same amount of time,” says Black, who has worked at the Henry Mayo Newhall Hospital in Valencia, California for the last seven years. “I go home and I feel like I could have done more. I don’t feel like I’m giving the care to my patients like a human being deserves.”

As COVID-19 patients continue to flood California emergency rooms, hospitals are increasingly desperate to find enough staff to care for all of them. Now the state is asking nurses to take care of more patients at once than they normally would, watering down their union’s most sacrosanct job protection: a nurse-to-patient ratio law that exists only in California.

“We need to temporarily — very short-term, temporarily — look a little bit differently in terms of our staffing needs,” said Gov. Gavin Newsom on Dec. 11, after quietly allowing hospitals to shift their nurse-to-patient ratios without first getting approval from the state.

Since then, 170 hospitals, mainly in Southern California, have been operating under the new pandemic ratios: ICU nurses can now care for three patients instead of two. Emergency room and telemetry nurses can now care for six patients instead of four. Medical-surgical nurses are looking after seven patients instead of five.

Nurses have taken to the streets in protest, holding socially distant demonstrations across the state, shouting and carrying posters that read “Ratios Save Lives.” The union — the California Nurses Association — says the staffing shortage is a result of bad hospital management: It accuses hospitals of putting profits over preparing for a surge by laying off nurses over the summer, then not hiring or training enough for the winter.

“It seems hospitals have been more reactive than proactive in their staffing,” Black said.

But hospitals say this is an unprecedented pandemic that has spiraled beyond their control. Now, in the current surge, four times as many Californians are testing positive for the coronavirus as did during the summer peak. Up to 7,000 new coronavirus patients could soon be coming to California hospitals every day, according to Carmela Coyle, president and CEO of the California Hospital Association.

“This is catastrophic and we cannot dodge this math,” Coyle said. “We are simply out of nurses, out of doctors, out of respiratory therapists.”

The state has asked the federal government to send additional staff, including 200 medical personnel from the U.S. Department of Defense. It’s also tried to revive the California Health Corps, an initiative to recruit retired health workers to come back to work, but that has yielded few people with the qualifications needed to care for COVID-19 patients.

And hiring contract nurses from temporary staffing agencies or other states is all but impossible, Coyle says.

“Because California surged early during the summer and other parts of the United States then surged afterwards,” she said, “those travel nurses are taken.”

The next step for hospitals is to try team nursing, Coyle says, which entails pulling nurses from other departments, like the operating room, for example, and partnering them with experienced critical care nurses to help care for COVID-19 patients.

Joanne Spetz, an economics professor and expert in health care workforce issues at UCSF, says hospitals should have started training nurses for team care over the summer in anticipation of a winter surge, but they didn’t, either because of costs – hospitals lost a lot of revenue from canceled elective surgeries that could have paid for training – or because of excessive optimism.

“California was doing so well,” she said. “It was easy for all of us to believe that we kind of got it under control, and I think there was a lot of belief that we would be able to maintain that.”

The nurses union has reason to be defensive of the patient ratio law, Spetz says. It took 10 years before it was passed by the Legislature in 1999, then several more to get through multiple court challenges, including one from then-Gov. Arnold Schwarzenegger.

“I’m always kicking their butt, that’s why they don’t like me,” Schwarzenegger famously said of nurses, drawing broad ire from the union and its allies.

Nurses prevailed, in both the court of public opinion and the law, and the ratios took effect in 2004. But the long battle has made the union fiercely protective of its win. It’s even accused hospitals of “disaster capitalism;” using the pandemic to try to roll back ratios for good. Hospitals deny this and Spetz says it’s unlikely.

The public can see that nurses are overworked and burned out by the pandemic, she says, so there would be little support for cutting back their job protections once it’s over.

“To go in and say, ‘Oh, you clearly did so well without ratios when we let you waive them, so let’s just eliminate them entirely,’ I think would be just adding insult to moral injury to nurses,” Spetz said.

Last Updated 01/13/2021

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