Latest / Becker’s Healthcare Podcast / Payer Market Shifts, Medicare Advantage Pressure, and Kaiser’s Nevada Expansion with Jakob Emerson

Transcript

Payer Market Shifts, Medicare Advantage Pressure, and Kaiser’s Nevada Expansion with Jakob Emerson · Becker’s Healthcare Podcast

• 0:02
  This is where health insurance leadership comes together.
• 0:05
  Becker's fourth annual spring payer issues roundtable brings
• 0:08
  together over 400 payer and health plan executives
• 0:12
  and more than 100 speakers to Chicago April.
• 0:16
  This year's event includes keynote conversations with the
• 0:19
  industry's top leaders and former president George W.
• 0:23
  Bush. For the full agenda and event details,
• 0:25
  visit beckershospitalreview.com
• 0:27
  and click on the events tab in the
• 0:29
  upper right. We're looking forward to hosting you
• 0:31
  here in Chicago.
• 0:34
  This is Scott Becker with the Becker's health
• 0:36
  care podcast.
• 0:37
  We're we're talking today with our guru on
• 0:40
  payer issues, all things payer. We're talking today
• 0:44
  with Jacob Emerson.
• 0:46
  Jacob follows the payer world like nobody else
• 0:48
  in the country. He's a leading journalist
• 0:51
  in charge of the payer area. Becker's HealthCare,
• 0:54
  brilliant person.
• 0:55
  Jacob, what do you watch currently in the
• 0:57
  payer universe? What what's top of mind?
• 1:00
  Yeah. Hey, Scott. Good to talk with you.
• 1:02
  So some breaking news from yesterday.
• 1:04
  Kaiser is entering
• 1:06
  a new state, Nevada, for the first time
• 1:08
  both on the hospital side, but also on
• 1:10
  the health plan side. So that's gonna be
• 1:12
  shaking up the market
• 1:14
  there. We could talk some of the details
• 1:16
  about that and and what it means, I
• 1:18
  think, for some of the some of the
• 1:20
  incumbents in that area.
• 1:21
  And then,
• 1:22
  everything going on with Medicare Advantage right now,
• 1:25
  I know we've we've touched on this in
• 1:26
  recent weeks, but it just continues to be
• 1:29
  a difficult environment for for everybody operating that
• 1:32
  in that space. We, you know, we we
• 1:34
  have seen a a little bit of, good
• 1:36
  news for some of the smaller
• 1:38
  carriers in Medicare Advantage, but
• 1:40
  contextually,
• 1:41
  just, you know, hard times for a lot
• 1:44
  of the the MA insurers right now. So
• 1:47
  And talk about that because not only the
• 1:49
  MA insurers, but you've also got the situation
• 1:51
  where both the MA insurers are also,
• 1:53
  the hospitals and health systems. I I saw
• 1:55
  a piece, I think, that you wrote last
• 1:56
  week about one of the large health systems
• 1:59
  trying to do less and less with the
• 2:01
  Medicare Advantage Plans. Yeah. Or what are we
• 2:04
  seeing there too? Because it seems like this
• 2:06
  this this dialogue between
• 2:08
  MA plans and health systems is going poorly.
• 2:11
  It it seems like the the public, the
• 2:13
  general public is trying to figure it all
• 2:15
  out. But but tell us what's happening there
• 2:17
  with the MA plans.
• 2:19
  Right. And I think, you know,
• 2:21
  how I would preface to all of this
• 2:22
  is by saying that it's
• 2:24
  MA overall, you know, probably,
• 2:27
  difficult for a lot of the hospitals to
• 2:29
  work with right now just because of who
• 2:31
  the big players are
• 2:32
  in that industry.
• 2:34
  But, you know, I don't want to, cast
• 2:37
  the whole whole industry as, quote, unquote bad,
• 2:41
  because
• 2:42
  each each insurer is different. You know, it's
• 2:44
  it's nuanced. It depends on the market, depends
• 2:46
  on if it's a small, you know, regional
• 2:48
  nonprofit insurer versus some of the big guys
• 2:50
  that we do see a lot of these
• 2:52
  issues with. So to your point, you know,
• 2:54
  the finance team here at Becker's has just
• 2:56
  been,
• 2:57
  nonstop covering and speaking with some of the
• 2:59
  large health systems,
• 3:00
  Providence's CEO, Ascension's CEO,
• 3:03
  all really talking about how this is this
• 3:05
  is a moment to be very,
• 3:08
  scrutinizing of your Medicare Advantage contracts if you
• 3:10
  are one of the big health systems because
• 3:13
  you have the leverage to do it.
• 3:16
  And and, you know, I think overall, just
• 3:18
  from a business perspective, some of these big
• 3:20
  guys are very, very difficult to work with.
• 3:22
  And and I'm not saying that's you know,
• 3:25
  I think our audience listening in is gonna
• 3:27
  say, well, you know,
• 3:28
  they're gonna be anti insurance company, and I
• 3:31
  and I hear that. But I think, contextually,
• 3:33
  what's going on and why are these insurers
• 3:36
  acting the way they are is because of
• 3:37
  some of the broader pressures that are happening
• 3:39
  to them in this market. And, you know,
• 3:41
  we just came off a really tough three
• 3:43
  years with some or or this year included,
• 3:46
  with some methodology changes for for how MA
• 3:49
  plans are paid,
• 3:51
  and with risk adjustment.
• 3:52
  They they did get a boost last year,
• 3:55
  in terms of pay, but, you know, then
• 3:57
  there's more bad news,
• 3:59
  at least proposed from CMS
• 4:01
  for for next year where they basically got
• 4:03
  a flat payment rates. And then CMS also
• 4:06
  say like, it's not going up. And then
• 4:07
  CMS also saying that they're gonna get even
• 4:09
  more aggressive with how risk is calculated,
• 4:12
  and with how,
• 4:14
  chart reviews,
• 4:15
  are incorporated into risk scores. Basically, kinda going
• 4:18
  after some of those upcoding issues that we've
• 4:20
  heard about forever in the media,
• 4:23
  and with health plans. So I think, you
• 4:25
  know,
• 4:26
  overall, I think what I would say to
• 4:28
  our hospitals listening in is Medicare Advantage working
• 4:32
  with with the big plans especially, it's not
• 4:34
  going to get any easier. If that, I'd
• 4:36
  say it's going to get even worse because
• 4:38
  what they're already saying on their investor calls
• 4:40
  that because of some of these these, moves
• 4:43
  by the federal government in terms of how
• 4:44
  they're getting paid, that if that if everything
• 4:46
  stays as it is currently, which, again, it's
• 4:48
  just proposed, you know, we're gonna see,
• 4:51
  less
• 4:53
  less benefits,
• 4:54
  higher premiums,
• 4:56
  more market pullbacks that we already saw for
• 4:59
  this year,
• 5:00
  really, the last few years.
• 5:01
  Basically, the the the the toughness of the
• 5:03
  current situation
• 5:05
  is probably going to get worse for the
• 5:06
  hospitals, and I think that's the main message
• 5:08
  here overall.
• 5:10
  Well and and you do have more and
• 5:11
  more hospitals and health systems sort of pulling
• 5:13
  out of Medicare Advantage Plans. But but you
• 5:15
  made a point. We talked about this a
• 5:17
  little bit last week. When the insurers
• 5:20
  in the senate and house, or I'm not
• 5:22
  sure if it was the senate or house,
• 5:23
  hold hearings about the insurance, the big payers.
• 5:25
  House. The house. When the household's hearings, we
• 5:28
  all know that a lot of this is
• 5:29
  political theater.
• 5:30
  Yes. There's not a lot of empathy for
• 5:32
  the insurance companies,
• 5:33
  but but the insurance companies are operating exactly
• 5:36
  how Medicare and Medicaid wanted them to operate.
• 5:39
  They might not say this out loud, but
• 5:41
  the whole reason to turn over
• 5:42
  a lot of Medicare and a lot of
• 5:44
  Medicaid to payers was to have them try
• 5:46
  and control cost. And one of the only
• 5:49
  ways to really control cost is to say
• 5:51
  no, and that's what they do. And it
• 5:53
  and it's really you know, it's a circular
• 5:55
  blame because the insurance companies lobby the government
• 5:57
  with lots of money. The government turns over
• 5:59
  massive programs to the insurance companies, and then
• 6:02
  the government points the finger at the insurance
• 6:04
  companies when it's all part of the game
• 6:06
  they're playing together. I mean, it's really fascinating
• 6:08
  to watch, and it's easy to be critical
• 6:10
  of both versus just the insurance companies because
• 6:13
  it is the government that has handed over
• 6:15
  these massive dollars at the state and federal
• 6:17
  level to these insurance companies that don't try
• 6:20
  and manage care, which often means not authorizing
• 6:22
  things, so we're down authorizing things, denying things,
• 6:25
  and more. Yeah. 100%. And you know how
• 6:27
  I feel about this. It's you've handed over
• 6:29
  a public service, Medicare,
• 6:31
  to publicly traded for profit companies for the
• 6:35
  most part. I mean, what what did we
• 6:36
  think was going to happen in terms of
• 6:38
  the anger that led up to these hearings,
• 6:41
  that is based off the fact that on
• 6:43
  the ground, people are mad because, you know,
• 6:45
  their premiums go up, the the supplemental benefits
• 6:48
  get cut. They all of a sudden find
• 6:50
  out for the new year that the the
• 6:52
  largest health system in their area is no
• 6:54
  longer in network with their Medicare Advantage Plan
• 6:56
  because the two entities are fighting.
• 6:59
  So so yeah. I mean, I I I
• 7:01
  really do think what did we think was
• 7:02
  going to happen.
• 7:04
  But I I what I do think is
• 7:06
  interesting too, Scott, in terms of, you know,
• 7:08
  what did the government want at Medicare Advantage?
• 7:10
  And it definitely was to control costs, which
• 7:13
  I think anybody at this point can say
• 7:15
  it has not done that. The insurers would
• 7:17
  not say that. They would put out their
• 7:18
  own research,
• 7:19
  saying that it has controlled costs, which I
• 7:21
  think there's a big asterisk around some of
• 7:23
  the research that the insurers are putting out,
• 7:25
  but I I won't get into that.
• 7:27
  But what we are seeing with some of
• 7:29
  the regional nonprofit, more specialized
• 7:32
  MA plans is that they're booming.
• 7:34
  We're we're starting to now get some of
• 7:36
  the the data from CMS,
• 7:39
  for the annual enrollment period, which was this
• 7:41
  past fall,
• 7:43
  about what the landscape is now looking like
• 7:45
  for this for this year's coverage for seniors.
• 7:48
  And, you know, if you look at Alignment
• 7:50
  Health, which is a publicly traded company, but
• 7:52
  they're small, and they only operate in a
• 7:54
  handful of states,
• 7:55
  they they increased their membership 31%
• 7:58
  this year to about,
• 8:00
  275,000
• 8:01
  members, which I know seems small, but they've
• 8:04
  they they haven't been around for that long.
• 8:06
  And and that's just some,
• 8:08
  really amazing growth,
• 8:09
  for that company.
• 8:10
  CleverCare health plan that they're in Southern California,
• 8:13
  and they focus,
• 8:14
  largely on Asian Americans, on more eastern medicine,
• 8:17
  so stuff that wouldn't necessarily be covered under
• 8:20
  traditional Medicare Advantage plans.
• 8:22
  They saw a 50% increase in their enrollment
• 8:25
  this year. And then SCAN, led by doctor
• 8:28
  Sachin Jain, who has been with some of
• 8:29
  these big players, he's been at CMS,
• 8:32
  and now leads that that, health plan in
• 8:34
  Southern California and a few other states,
• 8:36
  they posted 40% membership growth. And whenever I
• 8:40
  talk to doctor Jane, he always points out
• 8:41
  that they have Medicare Advantage Plans specifically built
• 8:45
  for Asian Americans,
• 8:46
  for LGBTQ
• 8:48
  plus seniors,
• 8:50
  basically, benefits that are built around very specific
• 8:52
  populations. And I think I mean, that's to
• 8:55
  me, that's that's amazing that you're getting, you
• 8:57
  know, very targeted health care for for,
• 9:00
  populations that need different things.
• 9:02
  And I think that that is that was
• 9:03
  one of the goals of Medicare Advantage that
• 9:05
  Medicare didn't do. It was kinda Medicare is
• 9:07
  just kind of for everybody versus some of
• 9:09
  these very targeted specialized plans. So I think
• 9:12
  that's amazing to see the growth of these
• 9:14
  very
• 9:15
  high quality,
• 9:17
  health plans and and these insurers
• 9:19
  growing in different parts of the country. You
• 9:21
  know, unfortunately, they're not the big guys, so
• 9:23
  that's not, you know, it's not a it's
• 9:25
  not a national story. But I do think
• 9:27
  in certain areas of the country, we are
• 9:29
  seeing some really amazing things happen with with
• 9:31
  Medicare Advantage.
• 9:32
  And that is really interesting, and it really
• 9:34
  is very niche, very segment oriented, and and
• 9:38
  able to manage that well. And then trying
• 9:40
  to do that at scale, at large scale
• 9:42
  becomes very challenging across the country with 350,000,000
• 9:45
  people, but but fascinating to see it work
• 9:47
  in different places. I think that's just fantastic.
• 9:49
  Definitely. And I'd last point I just made
• 9:51
  there is UnitedHealthcare,
• 9:53
  the biggest one. They're expecting to lose up
• 9:54
  to 1,400,000
• 9:56
  MA members this year. So it seems pretty
• 9:59
  clear the big guys are gonna keep retrenching,
• 10:01
  and that's even if the or if and
• 10:04
  that's before if the the proposed MA rate,
• 10:07
  hold holds. So it could get even worse
• 10:09
  than that. So
• 10:10
  lots more MA drama to come, Scott. But,
• 10:14
  last quick thing update I wanted to just
• 10:16
  briefly chat about is Kaiser entering Nevada for
• 10:19
  the first time.
• 10:20
  They finalized a joint venture
• 10:22
  with Renown Health, which is based in Reno.
• 10:24
  So this is really a more Northern Nevada
• 10:27
  focused
• 10:27
  move. But then, you know, they're they're bringing
• 10:29
  in a new outpatient care delivery system together,
• 10:32
  and they're gonna co own a health plan,
• 10:34
  branded as Kaiser in Northern Nevada.
• 10:37
  And, you know,
• 10:38
  Anthem is big in Nevada or Elavance is
• 10:40
  big in Nevada.
• 10:42
  United is big there too. So, you know,
• 10:44
  the the big guys are gonna be watching
• 10:46
  Kaiser come in with, we don't know all
• 10:48
  the products that they're gonna be all the
• 10:50
  different markets they'll be in, and that's to
• 10:52
  come. But Kaiser does operate Medicare Advantage. They
• 10:55
  contract with the state from, with some of
• 10:57
  the states with, Medicaid.
• 10:59
  They offer ACA.
• 11:01
  They they have employer, of course. So, you
• 11:03
  know, if I was one of the big
• 11:04
  insurers, I would be watching this very closely
• 11:06
  because now you've got one of the highest
• 11:09
  quality integrated systems
• 11:11
  entering,
• 11:12
  a a brand new market, and and probably
• 11:13
  it's gonna be big competition for them.
• 11:16
  Fascinating. Literally fast. It'll be exciting to watch
• 11:18
  what Kaiser does there with Renown Health. We're
• 11:20
  big fans of Renown Health, quite frankly. Fastened
• 11:22
  to see what happens. Thank you so
• 11:24
  much. Jacob, thank you for joining us as
• 11:26
  always. It's always a pleasure to visit with
• 11:28
  you. I always learned something. Thank you so
• 11:30
  much for joining us. Thank you, Scott.