Health Business Blog

Health care business consultant and policy expert David E. Williams share his views

#CareTalk: Good riddance to 2017

Let’s face it, 2017 was not a great year for healthcare policy. In this last edition of 2017, CareCentrix CEO John Driscoll and I look back on the worst of the worst and the best of the worst, and look forward with hope to 2018.

Overview:

(0:21) What were the best and worst things to happen in healthcare policy this year?

(3:05) Who should be afraid of Amazon’s entrance into healthcare?

(5:15) Are the hospital mergers a good or bad thing? Do they matter?

(6:41) Is there hope for healthcare policy in 2018?

(9:01) Does the election of Doug Jones for the US senate have any broader implications in the US?

(9:43) Will the Apple watch impact healthcare or is it all hype?

(10:25) David and John discuss their healthcare hopes for 2018.


By healthcare business consultant David E. Williams, president of Health Business Group.

CHIPping away at the social contract

And then there were none

Long before the arrival of the Obama Administration with its explicit goal of expanding health insurance coverage to everyone, the country had achieved consensus on the need to insure all children. The Children’s Health Insurance Program (CHIP), first enacted in 1997, enables relatively low income families who don’t qualify for Medicaid to get low cost, high quality insurance for their kids.

Congress let funding for the program expire at the end of September. CMS and the states have been scrambling to shift other funds around to keep the program going. But time is now running out.

Alabama looks to be the first state that will have to close its CHIP program, according to Kaiser Health News. Seven thousand kids will be tossed off on January 1 (Happy New Year!) and tens of thousands more would exit a month later. Within a few months, all 9 million CHIP-covered kids across the US will be gone.

CHIP has had a dramatic effect in lower income states like Alabama, where the childhood uninsured rate dropped from 20 percent in 1997 to under 3 percent in 2015. Prior political fighting over CHIP funding back in 2004 led to long-lasting damage to the program, and we can expect the same or worse this time.

I cheered the election of Doug Jones in Alabama, and find it notable that his first pronouncement was a plea to Congress to fund CHIP even before he is seated. If everyone looked out for their constituents the way Doug does, this wouldn’t be an issue at all.

CVS + Aetna. Are we sure this adds up?

CVS and Aetna. Love at second sight?

Many of the stories I’m reading about CVS’s acquisition of Aetna suggests the deal is a bold move to expand CVS’s retail clinic business.  See for example, CVS-Aetna deal has major implications for retail health, primary care practices in FierceHealthcare.

If the merger goes through, CVS plans to expand health services at its retail pharmacies, according to CVS and Aetna officials. Although it will take several years to accomplish, CVS will increase its number of clinics and add staff and equipment for a wider variety of treatments.

This seems like silly reasoning. If the idea is to get health insurers to offer plans that favor retail clinics, why not just contract with those plans? Aetna is a big company but as a national plan its market share in many geographies is relatively modest. Often –like here in Massachusetts– the local Blue Cross has the biggest market share. If CVS is big and powerful enough to actually buy Aetna, surely it can get that company and others to come to terms on retail clinics.

If there’s strategic logic behind the deal it’s more likely to be in the pharmacy management side of the business, where, for example, the combined CVS/Aetna will be the biggest player –but not a dominant one– in Medicare Part D pharmacy plans. That’s not so compelling.

Possibly, the two companies just wanted to do a big deal that wouldn’t get blocked by the Justice Department. Aetna already got slapped down for its attempt to merge with Humana, and CVS doesn’t have a lot of options for horizontal takeovers of other drug chains or pharmacy benefit managers.

There is some kinship between the companies. Both are New England based and CVS’s Chief Medical Officer, Troy Brennan previously held the same role at Aetna.

It seems just as likely that CVS will offer Aetna “products” through its stores. As @WilliamGerber points out on Twitter, CVS could sell Part D plans at retail. I’m thinking maybe CVS will eventually offer consumer friendly health plans from Aetna that go beyond pharmacy.

Certainly, the shadow of Amazon is hanging over the deal. CVS is extremely nervous about Amazon coming in and eating its lunch in a way that Walgreens never could. So it’s doing something Amazon won’t –getting more into third-party reimbursement.

Stay tuned. I look forward to seeing how this one plays out.

#CareTalk: Is value based care here to stay?

In the November edition of #CareTalk, CareCentrix CEO John Driscoll and I cover everything from my recent accident to Amazon, with a dose of Doug Jones and Judge Roy Moore thrown in for good measure.

Overview:

(0:18) David talks about a recent accident that he was involved in and what he learned about the U.S. healthcare experience from a patient’s perspective.

(1:32) What does Maine’s Medicaid expansion say about healthcare in the U.S.?

(3:40) What are the implications of the 2017 elections on U.S. healthcare?

(5:40) Where do you see value-based care heading within the next year?

(7:18) Will the next HHS secretary be more successful than Tom Price?

(7:54) Roy Moore or Doug Jones?

(8:18) Will we have any healthcare deals on Cyber Monday in 2018?