Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week:

CMS nominee breezes through confirmation hearing

The Hill reports: President Trump's pick to lead the Center for Medicaid and Medicare Services (CMS) cruised through her confirmation hearing Thursday, though Democrats showed frustration at her refusal to offer specifics.

The Hill

Thursday, February 16, 2017


The IRS Has Just Made Obamacare’s Individual Mandate Optional

The Fiscal Times reports: When President Trump signed an executive order shortly after taking office designed to weaken the Affordable Care Act, some questioned whether the instructions to federal agencies to look for ways to ease the law’s burden on businesses and individuals would have any real bite.

The Fiscal Times

Wednesday, February 15, 2017


Amid Obamacare uncertainty, insurance giant Humana plans to leave marketplaces in 2018

Los Angeles Times reports: Humana Inc., one of the nation’s largest health insurers, will stop selling Obamacare health plans next year, the company announced Tuesday. The move threatens to rattle jittery insurance markets and further complicate Republicans’ push to repeal and replace the Affordable Care Act.

LA Times

Tuesday, February 14, 2017


Aetna, Humana end $34 billion merger agreement

CNBC reports: Aetna and rival Humana are terminating their merger, after their $34 billion deal was blocked by a federal court on antitrust grounds. Aetna will pay Humana a $1 billion break-up fee, in accordance with the agreement.


Tuesday, February 14, 2017


Drugmaker Marathon ‘Pausing’ Delivery Of $89,000-A-Year Muscular Dystrophy Drug

Kaiser Health News reports: In a surprise move Monday, Marathon Pharmaceuticals told patient advocates that it would “pause” the launch of its drug Emflaza because of pricing concerns expressed by patients and advocacy groups.

Kaiser Health News

Monday, February 13, 2017


These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.



The Scourge of Healthcare Ransomware to Loom Larger in 2017

By Clive Riddle, February 17, 2017


CynergisTek has just released Redspin’s annual cybersecurity Breach Report:  2016: Protected Health Information (PHI). Their 21-page seventh annual report “provides in-depth analysis of the causes of PHI breaches reported to the Department of Health and Human Services and the overall state of cybersecurity in healthcare.”




The report cites that in 2016 there were:

  • ·         325 large breaches of PHI, compromising 16,612,985 individual patient records
  • ·         3,620,000 breached patient records in the year’s single largest incident
  • ·         40 percent of large breach incidents involved unauthorized access/disclosure
  • ·         over a dozen providers reported in media as having been victims of ransomware attacks with PHI breaches


The report lists the largest 2016 hacking attack on providers as affecting Banner Health with 3.62 million patient records breached, followed by 21st Century Oncology with 2.2 million records breached. Of large breaches, they state 78% involved providers, 16% health plans and 6% healthcare vendors.


The report makes particular note of “the scourge of Ransomware” and cite that in 2016 there was $1 billion overall in ransomware payments worldwide impacting all types of businesses and consumers The report cautions this will get worse in 2017, as “late last year, disturbing reports surfaced regarding the rise of ‘ransomware as a service’ (RaaS) – a business model in which malware authors enlist ‘distributors’ to launch the initial attacks (likely weaponized phishing emails) and then share in any profits. The potential accomplices do not need much technical expertise or capital to get started. Some ransomware kits cost as little as $100 dollars.”


Becker's Health IT & CIO Review featured an article: Get ready for hospital ransomware attacks 2.0 also cautions about a growing ransomware threat this year, stating "here are three tactics we've seen in the wild that are likely to become more widespread in 2017. Beyond encryption: 3 ways criminals are making their attacks more disruptive," and they go on to list and describe:

1) Developing ransomware strains that spread like a virus

2) Creating new versions of ransomware that disable the victim systems

3) Turning ransomware attacks into data breach events


The Department of Health and Human Services has weighed in, offering an eight page FACT SHEET: Ransomware and HIPAA, in which they cite “a recent U.S. Government interagency report indicates that, on average, there have been 4,000 daily ransomware attacks since early 2016 (a 300% increase over the 1,000 daily ransomware attacks reported in 2015).


The healthcare ransomware threat certainly isn't focused just on the U.S., and is a global issue. New research based on a Freedom of Information (FOI) request has revealed that 34% of NHS trusts in the UK have suffered a ransomware attack in the last 18 months.


Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week:

Tom Price Is Confirmed as Health Secretary

The New York Times reports: The Senate early Friday approved the nomination of Representative Tom Price to be secretary of health and human services, putting him in charge of President Trump’s efforts to dismantle the Affordable Care Act.

The New York Times

Friday, February 10, 2017

Obama’s Drug Czar: The Opioid Crisis Must Continue To Be A Federal Priority

Kaiser Health News reports: The GOP is working to repeal and replace the 2010 health law, known for insuring more than 20 million people. And the change could affect another health concern: the nation’s opioid abuse problem.

Kaiser Health News

Thursday, February 9, 2017

Judge, Citing Harm To Customers, Blocks $48 Billion Anthem-Cigna Merger

The New York Times reports: The ruling, by Judge Amy Berman Jackson of the Federal District Court for the District of Columbia, came two weeks after another federal judge blocked a proposed $37 billion merger between Aetna and Humana on antitrust grounds. Judge Jackson wrote in her order that she found the Justice Department’s arguments against the deal persuasive, and that putting Anthem and Cigna together would harm customers.

NY Times

Thursday, February 9, 2017

How Would Republican Plans for Medicaid Block Grants Actually Work?

The New York Times reports: There are only so many ways to cut Medicaid spending. You can reduce the number of people covered. You can reduce the benefit coverage. You can also pay less for those benefits and get doctors and hospitals to accept less in reimbursement. Or you can ask beneficiaries to pay more.

NY Times

Monday, February 6, 2017

Trump Says Health Law Replacement May Not Be Ready Until Next Year

The New York Times reports: President Trump said in an interview that aired on Sunday that a replacement health care law was not likely to be ready until either the end of this year or in 2018, a major shift from promises by both him and Republican leaders to repeal and replace the law as soon as possible.

NY Times

Sunday, February 5, 2017

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members. 


Thinking of Starting a Medicare Advantage Plan? 2019 Starts Now

By Peter Kinhan and Dan Juberg, February 10, 2017

Provider Sponsored Plans and Medicare Advantage are gaining traction as a critical strategy for profitable, value-based care. However, many underestimate the necessary lead time and effort required to move from consideration to activation. Planning for a 2019 launch needs to begin now starting with a detailed market and organizational feasibility study for standing up a health plan.

In recent years, due to increasing cost pressures and competition among providers, many organizations have expressed their ambitions to develop their own health plans, often referred to as provider-sponsored plans (PSPs). Medicare Advantage (MA) is often considered the entry point of choice due to government financial incentives and strong opportunities to drive improvements in both quality and total cost of care for an increasingly aging population.

However, because of competing priorities, many executives struggle to carve out the necessary time to truly evaluate the opportunity. The time is right to look at MA—in terms of the changing political landscape and the surprisingly lengthy lead times required to assess and apply. This means for those that consider an MA plan as part of their future strategy, that process should start today.

There is no doubt the changes in presidential leadership have created political uncertainty when it comes to the healthcare industry. There are more things unknown than known. That said, rising healthcare costs are still a major problem to be solved, but value-based care (VBC) has proven to be and will continue to be a critical part of the solution.

So what could change with this new administration and how could it affect your global Medicare strategy? Let’s take note of the significant changes to Medicare that have been gaining traction in the market to date

  • MA enrollment continues to grow rapidly. In 2016 there were 17.6 million MA members, which is an increase of more than 200 percent from the number enrolled in 2005.
  • MACRA and other CMS programs have deployed value based payment methods that are projected to impact up to 125,000 providers in the traditional Medicare market by 2018.

These two trends demonstrate an important shift to VBC, and if one takes Paul Ryan’s “A Better Way,” as an indication of what is to come from a Republican administration, then an assumption is the shift to value-based care will continue —if not accelerate. According to “A Better Way,” Medicare’s “overhaul” would include what Ryan terms “premium support;” a plan to increase competition among providers and allow beneficiaries the freedom to choose where to spend their healthcare dollars. Sometimes called a defined contribution or voucher system, the desired effect of this approach would be to push Medicare further away from its current largely fee-for-service setup by providing increased incentives for beneficiaries to be cost-conscious in their plan selection.

This would likely drive a considerable enrollment increase in the already-growing private MA market; a space that has long been a strong component of Republican plans. As Medicare grows and seeks to control costs, providers can expect a doubling down of population health and a need for health systems to capture a larger share of the premium dollar. MA has always been a critical aspect of organizations’ population health strategy, and with the political changes, that need and opportunity has presumably only strengthened.

Many organizations have been preparing for a migration up the Medicare food chain through the creation of their own health plan. According to Avalere, providers are leveraging their large integrated delivery networks to establish plans at an increasing pace, representing 58 percent of new MA plans entering the program in 2016. Many of these organizations have been developing the necessary competencies by establishing risk-bearing Accountable Care Organizations (ACOs) or accepting delegated risk. Many are confronted with familiar dilemmas. What are the next steps as these ACO agreement periods wind to a close? If launching an MA plan is a couple years down the road, when is the right time to start the “two years from now” process?

The MA application process differs greatly from the Medicare ACO application process and it starts roughly six months earlier. This is a significant undertaking with great opportunity, and large risk. It requires an in-depth analysis and planning and the necessary time to align organizational strategy.

The Notice of Intent to Apply for a 2019 Medicare Advantage contract opens in mid-November 2017. However the real work should begin much earlier than that. A candid evaluation of whether your organization is ready to run its own health plan takes time and thoughtful consideration. And the question isn’t simply just “Can we?” Of equal importance is “Should we? Will the market support it? Will we need partners or help? What kind of optionality should we be considering and planning for?”

Organizations legitimately contemplating starting an MA plan are taking a deep dive to assess their organizational and network readiness, scope out their competitive landscape and determine not only the overall opportunity present in the market but the viability of their organization being able to capitalize on it. Conducting a PSP feasibility study is a crucial first step to setting the wheels in motion for a successful and targeted health plan application and development process.

  • Key deliverables of a PSP feasibility study should include:
  • Market Assessment;
  • Prospective Partner List;
  • Network Adequacy Analysis;
  • Go-To Market Product and Network Structure;
  • Target Market Landscape and Competitive Positioning Strategy;
  • Organizational Readiness; and
  • Financial Pro Forma.

Armed with an honest assessment of the critical factors to successfully stand up and operate a health plan, organizations not only better understand their readiness but are also able to act immediately to implement any necessary improvements. Providers should be aware of specific opportunities available, and precisely what it will take for them to actualize them.

As a result of a PSP feasibility study, the executive team will be better informed for the ultimate decision as to whether they should pursue an MA contract. Should a “go” decision result, progressive organizations should then work to develop an implementation plan in tandem with the application process. While the development of a health plan has never been considered easy, this only underscores just how much preparation many successful organizations undergo.

With so many competing initiatives and so much uncertainty in healthcare right now, it can be easy to overlook or delay the analysis of your MA opportunity. However, we contend that with the political changes and continued demographic evolution, it has never been more important to assess this opportunity—and that process needs to start soon if organizations want options for 2019.


Healthcare Bowl 2017: Atlanta vs New England

By Clive Riddle, February 3, 2017


The Atlanta Falcons and New England Patriots square off this Sunday in Houston during a Lady Gaga concert (the halftime show.) But another performance between this two cities is playing out on a daily basis – healthcare indicators. Let’s see how Atlanta vs. New England stack up in a healthcare bowl.


Instead of the venue for this comparison being NRG stadium in Houston, we find ourselves at The Big Cities Health Coalition, a “forum for the leaders of America’s largest metropolitan health departments to exchange strategies and jointly address issues to promote and protect the health and safety of the 54 million people they serve.” Their playing field is a Data Platform that features over 17,000 data points across 28 large cities.


Here’s the selected results from their data platform. Let’s score 7 points when one city’s indicator bests the US average and the other city is below the US average, and 3 points the better city when both or neither best the US average. Data is from 2013, and represents Fulton County for Atlanta and the Boston metropolitan area for New England.


  • ·         Uninsured Rate: Atlanta 16.9%; Boston 4.4%; US 14.5%. New England takes a 7-0 lead.


  • ·         Adult Obesity Rate: Atlanta 25.4%; Boston 21.7%; US 28.3%. New England extends their lead to 10-0.


  • ·         Heart Disease Mortality per 100,000:  Atlanta 157.3; Boston 133.6; US 169.8. New England goes up 13-0.


  • ·         Diabetes Mortality per 100,000: Atlanta 19.3; Boston 19.4; US 21.2. To close to call. The score at halftime remains New England 13, Atlanta 0.


  • ·         Asthma Annual ER visits per 10,000: Atlanta 49.8; Boston 125.8%; No US average provided. Atlanta now trails 13-3.


  • ·         Opioid related unintentional drug overdose mortality rate per 100,000: Atlanta: 9.4; Boston 16.8; US 4.2. Atlanta cuts further into the lead, now trailing 13-6


  • ·         Smoking: Atlanta 16.0%; Boston 18.4%; US 17.9%. Atlanta ties the score 13-13.


  • ·         All Cancer Mortality per 100,000: Atlanta 159.3; Boston 176.1; US 163.2. Atlanta wins 20-13.


There you have it – Atlanta wins the Healthcare Bowl 2017 by a score of 20-13.