|
Hospitals vs. GLP-1s | Medicare Negotiations August 19, 2024
|
|
|
|
Together with
|
|
|
“It stands to reason that if one drug can change the trajectory of health outcomes, it can change how hospital care is delivered over the long term.”
|
Kaufman Hall Managing Director Lisa Goldstein
|
|
|
When a new drug class bursts onto the scene as fast and furious as GLP-1s, hospitals start wondering whether a single medication can force them to rethink their entire model.
Norman Regional Health System in Oklahoma is blaming the diabetes management and weight loss drugs for prompting it to shutter its bariatric surgery center after patient volumes plummeted 30% within just the last year.
- A Philadelphia system recently cited similar reasons for canceling its own bariatric surgery unit expansion plans, and other providers are actively revisiting where they want to allocate their growth capital.
- Direct-to-consumer marketing and expanded coverage has led to roughly 1 in 8 U.S. adults reporting GLP-1 use, with analysts predicting that 30M Americans could be taking the drugs by 2030.
The roaring appetite for these medications adds to a number of other trends already impacting hospital footprints, such as new care delivery models and a post-pandemic shift to remote care.
- Hospitals are now faced with the unenviable task of recalculating utilization forecasts for everything from diabetes and cardiac care to orthopedics and joint replacements.
Although it might still be too early for long-term capital planning, hospitals can turn to other recent advances like statins to glean some important lessons.
- Statins were originally projected to make a massive impact on cardiovascular care volumes, but it turned out that patients were just older before needing those services.
- Statins also contributed to longer life expectancies, and while the jury’s still out on whether GLP-1s will do the same, more people living past 65 would cause Medicare’s role as the country’s largest healthcare consumer to grow, meaning less price elasticity for many hospitals.
Hospitals don’t yet have answers to the long-term effectiveness of GLP-1s for managing chronic conditions or increasing life expectancy, but they do have the questions:
- Which service lines will lose volume?
- Which service lines will see more volume as the population ages?
- How would these volume shifts affect payor mix?
- What operational changes have to happen to sustain financial performance?
The Takeaway
GLP-1s have arrived in a big way, raising important questions about the changes hospitals will need to make to adapt. Those questions will take time to answer, but now’s the time to start thinking about them.
|
|
|
Lift MA Plan Performance by Impacting SDoH
Social factors and non-medical issues strongly influence health outcomes, and addressing these contributing determinants of health can not only improve the lives of patients, but also enhance Medicare Advantage plan success. Learn how Clear Arch Health’s remote monitoring services are helping MA plans deliver cost-effective care while enabling more seniors to age independently.
|
|
RPM Designed to Streamline Your Workflow
Discover Withings’ suite of connected devices and user friendly platform where you can benefit from dedicated tech support, ensuring continuous monitoring and minimizing any disruptions in patient care.
|
|
The State of Payor Enrollment and Credentialing
We’re on the brink of a new era in healthcare. From AI-enabled chatbots to GenAI, Medallion’s latest report sheds light on how healthcare organizations are prioritizing automation, actively shaping their future with it, and hoping it can live up to its promise. Get the full report here.
|
|
- Medicare Drug Negotiations: The White House finally unveiled its negotiated Medicare drug prices, bringing 38%-76% reductions to the first 10 drugs, while drawing mixed industry reactions. The reductions to drugs like Jardiance, Xarelto, and Eliquis are estimated to cut patients’ OOP costs by $1.5B in 2026, while saving the government over $200B within a decade. That said, some analysis suggests that the actual impact will be a fraction of these estimates, and that generics are already on their way for many of the medications.
- Epic Endorses TEFCA: Epic officially endorsed the Trusted Exchange Framework and Common Agreement, announcing plans to transition to TEFCA and have its hospitals live using the Epic Nexus QHIN by the end of 2025. All of Epic’s partners already participate in the Carequality framework, which connects over 70% of hospitals nationwide, but it views TEFCA as the best shot “to get the remaining 30% of U.S. hospitals off the sidelines.”
- V1C Health System Maturity Model: DiMe’s Virtual First Care Coalition debuted its V1C Health System Maturity Model to give providers a new framework to self-assess their current state and build strategies for leveraging virtual care. At a time when rising costs are one of the most painful thorns in the side of health systems, the V1C maturity model (accompanied by five real-world case studies) gives systems a valuable tool for navigating their options, particularly within specialty and chronic care.
- Hospital Performance Gap: Hospital year-to-date operating margins held steady at 4.1% for the second month in a row, according to Kaufman Hall’s June data. As with the previous update, the story beneath the surface-level margin stabilization is that the performance gap continues to widen, with larger systems more able to weather pandemic-era headwinds due to better throughput management, contract labor utilization, and investment in outpatient services.
- Mosaic Health Unveiling: Elevance and private equity firm CD&R unveiled the name of their $4B advanced primary care joint venture: Mosaic Health. As Elevance looks to build its Carelon services arm into an Optum-like care delivery vehicle, CD&R portfolio companies apree health (digital navigation and clinical advocacy) and Millennium Physician Group (900+ physician primary care group) will join with Carelon’s 30 clinics to provide care to high-risk members, such as those with multiple chronic conditions.
- Trilliant National Provider Directory: Trilliant Health released a national provider directory with information on 2.9M providers across the country, taking matters into its own hands by making the tool publicly available as the federal government makes little progress on its own version of the concept. The launch arrives two years after CMS asked for public input on creating a national provider directory and “continues to explore a pilot concept” to improve access to care, reduce clinician burden, and support interoperability.
- Elion State of AI in RCM 2024: True to form, Elion just put out one of the best revenue cycle management market overviews that we’ve ever come across. The 29-page State of AI in RCM 2024 Report somehow manages to be as digestible as it is thorough, detailing where AI is being applied to RCM, how it’s improving legacy solutions, and where it’s heading next. It also explores the areas seeing the most traction – and where skepticism remains – but the vendor maps alone make the report worth checking out.
- Outpatient Healthcare Benefits: Shifting healthcare services from the hospital to outpatient settings could save nearly $150B annually in the U.S. In a study in JAMA Network Open, researchers asked 1.1k clinicians which Medicare services they thought could be shifted out of the hospital without compromising clinical outcomes, then calculated the impact of lower costs in the outpatient setting. They ended up valuing the shift at between $114B and $148B, or 3.2% to 4.1% of annual U.S. healthcare expenditures.
- Change’s Pain, Waystar’s Gain: Waystar’s first quarterly update since going public in June sent shares skyrocketing over 20%, with the RCM vendor smashing revenue growth expectations in the wake of cyberattacks targeting its competition. Although healthcare organizations aren’t exactly keen to make huge switches to their partner rosters, the Change Healthcare fiasco apparently prompted 30k providers to move their RCM business from Change to Waystar.
- Fight Against DEI Hits Cleveland Clinic: The Cleveland Clinic found itself in the hot seat for… trying to improve outcomes for the populations that need the most support. Black patients are twice as likely as white patients to die from a stroke, and hospitals have been actively trying to improve those numbers. As a result, the Cleveland Clinic is being accused of illegally discriminating on the basis of race for operating a program to prevent and treat strokes and other conditions among minority patients.
|
|
BrainX Live Event: Implementing Ambient AI
Curious about the tangible benefits Ambient AI brings to health systems? Join the next BrainX Community live event on August 21 to hear Nabla CMO Dr. Ed Lee and Cleveland Clinic’s Dr. Paul Bryson share their experiences with the hottest tech in healthcare.
|
|
Curate, Create, & Share at the Point of Care
It’s hard to find a more unique vantage point on AI than Playback Health co-founder Dr. Langer, whose role as the Chair of Neurosurgery at Lenox Hill allows him to actually use the platform he helped create. Head over to Dr. Langer’s latest blog to see how Playback is helping him spend more time caring for patients and enabling providers to “Curate, Create, & Share” at the point of care.
|
|
High-Quality Care at Patient Fingertips
K Health is making high-quality medical care a reality for patients everywhere by turning their smartphones into the first stop along their care journey. Discover how K Health’s clinical-grade AI is reducing time-to-treatment and improving the patient experience while allowing more providers to practice at the top of their license.
|
|
|
|
|