|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
Walking back plans for an ACA replacement plan
Reversing course in the face of strong pushback from his own party’s leaders in Congress, President Trump this week backed off his earlier pledge to deliver a Republican healthcare plan to replace the Affordable Care Act (ACA). After the Department of Justice switched positions on the Texas court case testing the constitutionality of the ACA, urging the Fifth Circuit Court of Appeals to invalidate the 2010 law entirely, Trump doubled down by declaring that Republicans would be known as the “party of healthcare”, going so far as to tap four GOP senators to craft a replacement bill. However, the White House received a rare rebuke from Senate Majority Leader Mitch McConnell (R-KY), who said this week that in private discussions with the President, “I made it clear to him that we’re not going to be doing that in the Senate.” In tweets and a subsequent speech, Trump signaled his frustration with Congressional Republicans on the issue (“We blew it the last time. Man, I was fed a bill of goods.”), vowing to return to the issue after the 2020 elections. By highlighting GOP divisions on the issue, this week’s public dust-up and Presidential about-face all but guarantee that healthcare will be a marquee issue in the upcoming elections, allowing Democrats to campaign on an issue that proved a strong suit for them in the 2018 midterms. Expect the politics of healthcare to remain front and center in the months to come.
More good news for Medicare Advantage plans
Medicare Advantage (MA) plans got a better-than-anticipated pay hike this week, as the Centers for Medicare & Medicaid Services (CMS) released its final 2020 policy and payment updates for the private coverage program for seniors. MA payments will increase by an average of 2.53 percent in 2020, higher than the 1.59 percent initially proposed by CMS earlier this year, reflecting CMS’s expectation that MA services will grow faster than it initially thought. With the announcement, CMS is also finalizing plans to allow reimbursement for supplemental, non-clinical services covered by MA plans, such as transportation, nutrition support, and housing improvements, as long as those services are intended to improve health status. The final update also confirms CMS’s intent to continue updating its risk-adjustment methodology to more accurately reflect the intensity of services delivered to beneficiaries, a change that has been controversial among insurers, who fear the new methodology will result in lower payments from the government. Despite these concerns, shares of MA insurers traded higher after the CMS announcement, and health plans will no doubt be pleased with yet another year of good news from CMS on MA rates. Given continued strong enrollment growth, robust rate increases, and a pipeline of millions of aging Baby Boomers poised to become eligible for Medicare, large insurers (and increasingly, providers) will view MA as their primary source of growth for the next decade or more.
Alexa learns some new healthcare skills
Amazon announced this week that the toolkit software developers use to build “skills” for its voice-enabled devices is now compliant with US health privacy law, opening the door for many more healthcare applications for the ubiquitous Alexa gadgets. By making the “Alexa Skills Kit” compliant with HIPAA (the privacy law), the move allows Amazon’s devices to be used for the secure transmission of sensitive patient data, making it possible to use the voice assistant in a wide variety of clinical settings. Amazon refers to the tasks the Alexa devices can perform as “skills”, and in a blog post this week the e-commerce giant highlighted a number of new capabilities that it worked with healthcare companies to develop. For example, it collaborated with Charlotte, NC-based Atrium Health and Renton, WA-based Providence Health & Services to allow patients to find and schedule visits with local urgent care centers, and with Boston Children’s Hospital to enable parents to communicate with pediatric care teams. According to the company, the chance to develop Alexa skills that are HIPAA-compliant will be granted by invitation only. With more than 100M Alexa devices sold, demand among developers looking to build consumer-friendly healthcare tools is sure to be high. Beyond consumer applications, the combination of Amazon’s voice tools with its existing software that can mine and analyze electronic health records could spawn a major shift in how doctors and others do their work. While the initial use cases for Alexa announced this week seem somewhat limited, Amazon has taken yet another step toward becoming a significant force in the healthcare industry.