| THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
- Centers for Medicare and Medicaid Services (CMS) overhauls the Direct Contracting payment model. On Thursday CMS announced it will replace all versions of its Global and Professional Direct Contracting (GPDC) model, which allowed primary care providers to take full or partial risk on managing cost of care for traditional Medicare beneficiaries, after progressive Democrats raised concerns about whether a growing presence of Medicare Advantage insurers and private equity-backed groups in the model might compromise patient care and access in the traditional Medicare program. GPDC will be replaced with a new three-year demonstration called Accountable Care Organization Realizing Equity, Access and Community Health (ACO REACH), to start enrollment in 2023. The 51 current participants in the GPDC model can move into ACO REACH as long as they meet new requirements, which include developing plans to identify and address health disparities, and ensuring providers control three quarters of governing boards (as compared to a quarter in the GPDC model). Private equity and insurer applicants can still apply, but must demonstrate a track record of direct patient care, delivering quality outcomes, and serving vulnerable populations.
The Gist: ACO REACH is largely a “re-skinning” of the Direct Contracting program, rather than a significant overhaul. Physician, health system, and ACO groups, who were concerned that the program would be canceled altogether, were pleased with the announced changes to the model, although debate continues on whether the new guardrails will effectively address concerns around for-profit insurer and investor participation. Like Direct Contracting before it, ACO REACH will be an important vehicle for risk-ready providers to move more extensively into full-risk contracting, without launching a plan or partnering directly with a MA insurer.
- Department of Justice (DOJ) files suit to block UnitedHealth Group (UHG)’s $13B acquisition of Change Healthcare. DOJ alleges that allowing UHG’s Optum subsidiary to acquire Change, a direct competitor used by most large commercial insurers for healthcare claims solutions, would give UHG 75 percent of the healthcare claims processing and management market. This would significantly reduce competition, the DOJ claims, while simultaneously giving UHG access to its competitors’ sensitive plan design and pricing information. UHG called the DOJ’s position ‘deeply flawed’ and promised to fight the case.
The Gist: This is the second big move by antitrust regulators in a week to put the brakes on consolidation in healthcare: shortly after the DOJ sued to block Rhode Island’s two largest health systems, Care New England and Lifespan, from merging, those systems abandoned plans to combine. We are seeing the first real signs that the Biden administration is following through on plans to more closely scrutinize healthcare deals, including payer-led vertical integration. For both payers and providers, increased scrutiny will place a premium on the consumer value proposition of any combination—and force merging companies to deliver on the benefits of scale.
- Hospitals avoid feared staff exodus after COVID vaccine mandate implementation. The February 14th deadline for healthcare workers to receive their first dose of the COVID vaccine does not appear to have significantly worsened the hospital staffing crisis, even in rural hospitals. But the mandate hasn’t necessarily meant that all healthcare workers are now vaccinated, as some hospitals reported approving a flurry of medical and religious exemptions to avoid staff departures.
The Gist: Just as when states and early-adopter health systems enforced healthcare worker vaccine mandates last year, COVID vaccine uptake jumped just ahead of the federal deadline. After months of challenges, we may finally be moving beyond debates over healthcare worker vaccine requirements. And as hospitalizations from the Omicron wave continue to decline, most states and health systems are not planning to implement booster requirements.
- Maternal mortality increased sharply during first year of pandemic. According to new figures from the National Center for Health Statistics, the number of American mothers who died during pregnancy or shortly after giving birth in 2020 rose 14 percent, to 23.8 deaths per 100,000 live births. While the overall rate increased between 2019 and 2020, the largest jumps were in women of color: the mortality rate for Hispanic women, which was lower than that of White women, spiked by 44 percent, and mortality increased 26 percent for Black women. The maternal death rate in the US is much higher that of other developed nations, and has doubled over the last three decades, despite advances in medical care.
The Gist: While some of this increase can be attributed to COVID infection (which leaves pregnant women at higher risk for severe disease), low vaccine uptake, and pandemic-related care delays, cardiovascular disorders such as pre-eclampsia are still the leading cause of mortality in pregnant and postpartum American women. This is a story of lack of access to coverage and care. While roughly half of all US births are covered by Medicaid, most Medicaid plans do not provide postpartum care coverage, putting low-income mothers at real risk.
Plus—what we’ve been reading.
- As America’s physician demographics shift, so do doctors’ priorities. A recent New Yorker article details the history of the American Medical Association’s (AMA) opposition to single-payer healthcare, and the grassroots movement that nearly changed its position in 2019. Since its founding in the 1840s, the largest association of the nation’s doctors has wielded significant influence over healthcare policy, and has been the most effective opponent of several waves of progressive healthcare reform proposals across the last century. More recent changes in the demographic makeup of its physician constituents have begun to mirror the US population. A quarter of today’s practicing physicians graduated from foreign medical schools, and gender and racial gaps in medical schools have been reduced. Today, half of medical students are female, and half are people of color.
The Gist: The perspectives, needs, and politics of the physician community are changing. Younger physicians tend to be more left-leaning, and more are employees, rather than entrepreneurial business owners. While physician pocketbook issues historically dominated the AMA’s policy positions, today’s younger physicians are increasingly motivated by social justice concerns, leading to advocacy positions that would have been unimaginable a few decades ago. Physician societies continue to move closer to endorsing more extensive healthcare reform policies, over trying to ensure economic protection for the profession—and in the long run, this shift in physician support could prove a key driver in increasing public approval of “Medicare for All” and other coverage reforms.
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