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Becker’s Healthcare Podcast
Payer Market Shifts, Medicare Advantage Pressure, and Kaiser’s Nevada Expansion with Jakob Emerson
00:11:34
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- [00:02]
A
This is where health insurance leadership comes together. Becker's 4th Annual Spring Payer Issues Roundtable brings together over 400 payer and health plan executives and more than 100 speakers to Chicago, April 13th and 14th. This year's event includes keynote conversations with the industry's top leaders and former President George W. Bush. For the full agenda and event details, visit Beckershospitalreview.com and click on the Events tab in the upper right. We're looking forward to hosting you here in Chicago.
- [00:34]
B
This is Scott Becker with the Becker's Healthcare Podcast. We're talking today with our guru on payer issues, all things payer. We're talking today with Jacob Emerson. Jacob follows the payer world like nobody else in the country. He's a leading journalist in charge of the payer area. Becker's healthcare brilliant person. Jacob, what are you watching currently in the payer universe? What's top of mind?
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A
Yeah. Hey, Scott, good to talk with you. So some breaking news from yesterday. Kaiser is entering a new state, Nevada, for the first time, both on the hospital side but also on the health plan side. So that's going to be shaking up the market there. We could talk some of the details about that and what it means, I think, for some of the, some of the incumbents in that area. And then everything going on with Medicare Advantage right now. I know we've touched on this in recent weeks, but it just continues to be a difficult environment for everybody operating in that space. You know, we have seen a little bit of good news for some of the smaller carriers in Medicare Advantage, but contextually just, you know, hard times for a lot of the MA insurers right now.
- [01:46]
B
So, and talk about that, because not only the MA insurers, but you've also got the situation where both the MA insurers are also the hospitals and health systems. I saw a piece, I think, that you wrote last week about one of the large health systems trying to do less and less with the Medicare Advantage plans. What are we seeing there too is it seems like this dialogue between MA plans and health systems is going poorly. It seems like the public, the general public is trying to figure it all out. But tell us what's happening there with the MA plans.
- [02:19]
A
Right. And I think how I would preface all of this is by saying that it's MA overall, you know, probably difficult for a lot of the hospitals to work with right now just because of who the big players are in that industry. But you know, I don't want to cast the whole, whole industry as, quote, unquote bad because each, each insurer is different. You know, it's, it's nuanced. It depends on the market, depends on if it's a small, you know, regional nonprofit insurer versus some of the big guys that we do see a lot of these issues with. So to your point, you know, the finance team at Beckers has just been non stop covering and speaking with some of the large health systems, Providence's CEO, Ascension CEO, all really talking about how this is, this is a moment to be very scrutinizing of your Medicare Advantage contracts if you are one of the big health systems, because you have the leverage to do it. And you know, I think overall, just from a business perspective, some of these big guys are very, very difficult to work with. And I'm not saying that's, you know, I think our audience listening in is going to say, you know, they're going to be anti insurance company. And I, and I hear that, but I think contextually what's going on and why are these insurers acting the way they are is because of some of the broader pressures that are happening to them in this market. And you know, we just came off a really tough three years with some, or this year included with some methodology changes for, for how MA plans are paid with risk adjustment. They did get a boost last year in terms of pay but you know, then there's more bad at least proposed from CMS for, for next year where they basically got a flat payment rate and then CMS also said like it's not going up and then CMS also saying that they're going to get even more aggressive with how risk is calculated and with how chart reviews are incorporated into risk scores. Basically kind of going after some of those upcoding issues that we've heard about forever in the media and with health plans. So I think, you know, overall, I think what I would say to our hospitals listening in is Medicare Advantage working with, with the big plans especially it's not going to get any easier if that. I'd say it's going to get even worse because they're already saying on their investor calls that because of some of these, these moves by the federal government in terms of how they're getting paid, that if that if everything stays as it is currently, which again it's just proposed, you know, we're going to see less, less benefits, higher premiums, more market pullbacks that we already saw for this year, really the last few years, basically the toughness of the current situation is probably going to get worse for the hospitals and I think that's the main message here overall.
- [05:10]
B
Well, and you do have more and more hospitals and health systems sort of pulling out of Medicare Advantage plans. But you made a point. We talked about this a little bit last week when the insurers in the Senate and House or I'm not sure was the Senate or household hearings about the insurance, the big payers, the House, when the households hearings. We all know that a lot of this is political theater. Yes, there's not a lot of empathy for the insurance companies but, but the insurance companies are operating exactly how Medicare and Medicaid wanted them to operate. They might not say this out loud, but the whole reason to turn over a lot of Medicare and a lot of Medicaid to payers was have them try and control cost. And one of the only ways to really control cost is to say no. And that's what they do. And it's really, you know, it's a circular blame because the insurance companies lobby the government lots of money. The government turns over massive programs to the insurance companies and then the government points the finger at the insurance companies when it's all part of the game they're playing together. I mean it's really fascinating to watch and it's easy to be critical of both versus just the insurance companies because it is the government that has handed over these massive dollars at the state and federal level to these insurance companies, to them try and manage care, which often means not authorizing things, slowing down, authorizing things, denying things and more.
- [06:26]
A
Yeah, 100%. And you know how I feel about this. It's you've handed over a public service Medicare to publicly traded for profit companies for the most part. I mean what, what did we think was going to happen in terms of the anger that led up to these hearings? That is based off the fact that on people are mad because you know, their premiums go up, the supplemental benefits get cut, they all of a sudden find out for the new year that the largest health system in their area is no longer in network with their Medicare Advantage plan because the two entities are fighting. So, so yeah, I mean I really do think what did we think was going to happen? But I, I, what I do think is interesting too Scott, in terms of, you know, what did the government want out of Medicare Advantage? And it definitely was to control costs, which I think anybody at this point can say it has not done that. The insurers would not say that. They would put out their own research saying that it has controlled costs, which I think there's a big asterisk around some of the research that the insurers are putting out, but I won't get into that. But what we are seeing with some of the regional, nonprofit, more specialized MA plans is that they're booming. We're starting to now get some of the data from CMS for the annual enrollment period, which was this past fall, about what the landscape is now looking like for this, for this year's coverage for seniors. And you know, if you look at Alignment Health, which is a publicly traded company, but they're small and they only operate in a handful of states, they increase their membership 31% this year to about 275,000 members, which I know seems small, but they haven't been around for that long. And that's just some really amazing growth for that company. Clever Care Health plan that they're in Southern California and they focus largely on Asian Americans on more Eastern medicine. So stuff that wouldn't necessarily be covered under traditional Medicare Advantage plans. They saw a 50% increase in their enrollment this year. And then scan led by Dr. Sachin Jain who has been with some of these big players. He's been at CMS and now leads that, that health plan in Southern California and a few other states. They posted 40% membership growth. And whenever I talk to Dr. Jain, he always points out that they have medic Advantage plans specifically built for Asian Americans for LGBTQ seniors. Basically benefits that are built around very specific populations. And I think, I mean that's, that to me that's, that's amazing that you're getting, you know, very targeted healthcare for, for populations that need different things. And I think that that is, that was one of the goals of Medicare Advantage that Medicare didn't do. It was kind of Medicare is just kind of for everybody versus some of these very targeted specialized plans. So I think that's amazing to see the growth of high quality health plans and these insurers growing in different parts of the country. You know, unfortunately they're not the big guys. So that's not, you know, it's not a, it's not a national story, but I do think in certain areas of the country we are seeing some really amazing things happen with Medicare Advantage.
- [09:33]
B
And that is really interesting and it really is very niche, very segment oriented and able to manage that well. And then trying to do that at scale, at large scale becomes very challenging across the country. 350 million people but, but fascinating to work in different places. I think that's just fantastic.
- [09:50]
A
Definitely. And last point, I just make There is United Healthcare, the biggest one. They're expecting to lose up to 1.4 million MA members this year. So it seems pretty clear the big guys are going to keep retrenching and that's even if the or if, and that's before if the the proposed MA rate holds. So it could get even worse than that. So lots more MA drama to come, Scott. But last quick thing update I wanted to just briefly chat about is Kaiser entering Nevada for the first time? They finalized a joint venture with Renown Health which is based in Reno. So this is really a more northern Nevada focused move. But then you know they're they're bringing in a new outpatient care delivery system together and they're going to co own a health plan branded as Kaiser in Northern Nevada. And you know, Anthem is big in Nevada or Elevance is big in Nevada. United is big there too. So you know the big guys are going to be watching Kaiser come in with we don't know all the products that they're going to be, all the different markets they'll be in that's to come. But Kaiser does operate Medicare Advantage. They contract with the state from with some of the states with Medicaid. They offer aca. They have employer of course. So you know, if I was one of the big insurers I would be watching this very closely because now you've got one of the highest quality integrated systems entering a brand new market and probably it's going to be big competition for them.
- [11:16]
B
Fascinating. Literally fascinating. Be exciting to watch what Kaiser does there with Renowned Health. We're big fans of Renowned Health quite frankly. Fascinating to see what happens. Thank you so much. Jacob. Thank you for joining us. As always. It's always a pleasure to visit with you. I always learn something. Thank you so much for joining us.
- [11:31]
A
Thank you, Scott.