KHN Morning Briefing

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‘It Feels Like A Sucker Punch’: Hospitals On The Hook When Patients Can’t Pay

When patients aren't covered by insurance, or have high deductibles, hospitals are struggling to collect those bills, putting pressure on the entire industry. In other news, WellCare shares jumped after the Centers for Medicare & Medicaid Services announced proposed Medicare payment changes, Genesis Healthcare's chief executive says the company is in good shape despite some short-term turbulence, and Bayer names its new CEO.

Bloomberg: Bad Debt Is the Pain Hospitals Can't Heal As Patients Don't Pay
A type of pain that hospitals thought they had relieved has come back with a vengeance: it’s called bad debt. Hospitals have long struggled to collect bills when patients aren’t covered by insurance -- creating delinquent accounts. The Affordable Care Act was supposed to relieve some of that strain by helping pay for coverage for millions of Americans and expanding Medicaid in some states to cover the poor. Yet while millions of people have gained coverage since Obamacare became law in 2010, there’s also been an increase in insurance that comes with high deductibles and cost-sharing. ... “It feels like a sucker punch,” said John Henderson, the ... chief executive [of Childress Regional Medical Center in the Texas Panhandle]. (Lauerman, 2/23)

Bloomberg: WellCare Rises On Proposed Increase To Medicare Advantage Rate
WellCare Health Plans Inc. jumped as much as 12 percent on Monday after the government proposed raising payments next year for private insurers that provide Medicare coverage. The U.S. Centers for Medicare and Medicaid Services on Friday proposed increasing the rates to private plans by 1.35 percent next year. That rate is subject to negotiation, and will be finalized by April. Thirteen percent of WellCare’s total enrollment comes from the program, the most after Humana Inc., Bloomberg Intelligence analysts Jason McGorman and Ian Person said in a report. (Spalding and Tracer, 2/23)

The Philadelphia Inquirer: Genesis Healthcare Explains Business Plan Amid Losses
Since returning to the ranks of publicly traded companies a year ago through its merger with Skilled Healthcare Group Inc., Kennett Square's Genesis HealthCare Inc. has had a rough ride. Genesis' chief executive, George V. Hager Jr., assured analysts Tuesday on a conference call to discuss the earnings report that the company was in good shape for the long haul, despite near-term turbulence in the nursing-home industry. (Brubaker, 2/24)

Bloomberg: Bayer Names Werner Baumann To Succeed Marijn Dekkers As CEO
Bayer AG, Germany’s second-largest company by market value, named chief strategy and portfolio officer Werner Baumann as its next chief executive officer, ending almost two years of speculation on Marijn Dekkers’s successor. Baumann will take over as CEO following the annual shareholders meeting at the end of April, as Dekkers has requested that his contract be terminated early, the Leverkusen, Germany-based company said in a statement on Wednesday. Baumann will retain his current responsibilities. (Koch, 2/24)

Meanwhile, CVS Health reports its drug spending has slowed and talks about its pharmacy plans for Chicago —

Bloomberg: Drug Spending Slowed In 2015 After Discounts, CVS Health Says
CVS Health Corp. said drug costs for its plans grew a modest 5 percent in 2015, far less than the 11.8 spending growth rate from a year before. The company, which manages drug benefit plans for more than 75 million Americans, was able to keep costs down in 2015 by negotiating discounts from big manufacturers and carefully managing its list of covered drugs, CVS’s Chief Medical Officer Troyen Brennan said in an interview Monday. The company also put restrictions on some high-priced drugs, a step that helped keep costs from growing by double digits last year, he said. (Langreth, 2/23)

The Chicago Tribune: CVS Opening Pharmacies In Chicago Target Stores In March
Chicago-area Target shoppers will begin seeing the red bull's-eye logo swapped for CVS Health's red heart above in-store pharmacies starting in March, a CVS spokeswoman said Monday. CVS acquired Target's pharmacy and clinic businesses for about $1.9 billion last year. The first rebranded CVS pharmacies opened in Charlotte, N.C., Target stores earlier this month. (Zumbach, 2/23)

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