Improving Financial Vitals of the Healthcare Industry

LTC Consulting Services’ initial focus when first starting out in 2006 was medical billing for skilled nursing facilities, but we’ve grown immensely since then. Our services have expanded to better support our healthcare clients’ day-to-day finance needs and ensure long-term growth and sustainability with dedicated advisory services.

See the case study by CPA.com by accessing it via the PDF below.

LTC Consulting Lens: PBM For Dummies

Watch this clip!

Stay informed with LTC’s outlook on the Healthcare business world, our AR collections, receivables financing and collection of receivables processes. News, upcoming changes, and policy updates. A great way to keep on the pulse of our industry, without searching further than YouTube.

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Transcript:

Steve Shain: Hi everyone and welcome back! So now that the big conferences-HIMMS, The NIC and of course ECAP – who can forget ECAP? – are now over, it’s time to get back to work and try to focus on what’s coming up ahead. A few weeks ago, I was at the AJAS conference, so I was speaking to a crowd there and I showed them a picture of this individual and I asked them “Does anyone know who this is?” No one did. I even said his name; his name is Alex Azar “Does anyone know who that is?” and they didn’t. And this is a group of health care providers in the room.No one did, so don’t feel bad if you don’t know either. Mr. Alex Azar is the Health and Human Services Secretary of the Untied States of America. He’s probably the most influential person in the healthcare industry that there is today. A little while ago Mr. Azar got up and he said that he is looking to disrupt healthcare as we know it. He’s looking to make major changes and he’s looking to do them extremely quick.

What is his focus?
Mr. Azar is looking to get the industry to go into the direction of value-based care. Value-based care does not look at how much care or the level of care that you’re giving to a patient, but rather the outcome.

What are you doing to rehabilitate the patient?
That is the focus and with that is a larger focus of lowering the cost of healthcare in this country.

How does he want to do that?
Well first line of business is to focus on the health insurers and the pharmaceutical industry. Until now, these two industries were really two separate things but lately the health insurers have been acquiring some of the companies on the pharmaceutical side. We have CVS Caremark that now merged with Aetna, we have Cigna that just recently announced that they’re buying out Express Scripts. Express Scripts is not really a pharmacy, it’s actually a PBM. A PBM – no, a PBM is not a proud bald man – no PBM is a pharmacy benefits manager. Pharmacy benefits managers were put in place in order to make sure that the drug makers don’t hike up prices too high. They were kind of like policemen to make sure that the prices would be fair.

But now, the insurers have acquired these PBMs. They could police the drug makers but who’s going to police the health insurers for making sure that they don’t hike prices up? Enter this guy. This is Mr. Scott Gottlieb, he is the FDA Commissioner. He got up last week and gave a fiery speech to health insurers, telling them that they cannot get away with anything like this in the future. He said that this is very, very dangerous. From the three largest PBMs that are out there, they are controlling more than two-thirds of the PBM industry right now. And he said that it’s no lie that when you get these PBMs joining with health insurers, that is making the market much less competitive. Much less competitive is making the prices go up and they are putting a stop to it.

What are their goals?
Basically, what they’re looking to do is bring a lot more drugs to the market quicker. So, they’re going to bring generic drugs at a quicker pace. Drugs that usually would have to go through red tape in order to get FDA approval in order to hit the market are going to get a little bit of a faster pace in order to get the market kind of flooded with a lot of medication, a lot of available medication, which will bring the prices down.

So, focusing on that on the pharmaceutical side and on the health insurer side, and on the healthcare provider side, they’re looking for value-based care, focusing on value and outcomes, and not value and…incomes. This is all going on at the same time as we have the three billionaires from Amazon, Berkshire and Chase that have been scheming together trying to give small hints about a huge disruption that they’re going to bring to the healthcare industry as well. We don’t know what it’s going to be, hopefully it’s going to be good. But come to think of it, Mr. Bezos here, he is definitely a PBM if you know what I’m talking about. So only good things can come from those people, so hold on tight we’ll see what happens from these new players that are in the market that are looking to change it. And until next time, thank you so much for watching and of course if you have any comments, questions, please feel free to reach out to me, that way we can make this better for you. Take care.

The 2018 Proposed Federal Budget and Medicaid

On May 23rd , the 2018 proposed federal budget was released by the White House. Since then, there has been a flurry of news about what this means and how it will affect US citizens. Let’s focus on the planned changes to Medicaid, which is an important topic for our readers.

Perhaps you heard about the “$600 billion cuts to Medicaid over 10 years.” As stated, this is a fact – well, the actual line item is $616 billion. Here’s the section taken from pages 9 and 10 of the budget document:

Reform Medicaid: To realign financial incentives and provide stability to both Federal and State budgets, the Budget proposes to reform Medicaid by giving States the choice  between a per capita cap and a block grant and empowering States to innovate and prioritize Medicaid dollars to the mostvulnerable populations. States will have more flexibility to control costs and design individual, State- $610 billion over 10 years.

Basically, Medicaid would fully be managed at the State level. The Federal Government would provide a fixed amount of money to each State. Medicaid services include nursing home and institutional care as well as personal care, occupational therapy, and work support for the disabled and elderly to allow them to live on their own. Providing a health facility is required by law, but the programs to keep people on their own are considered optional.

What is not reflected in the $616 billion is the $800 billion cut to Medicaid funding that is in the House-passed version of the American Health Care Act. There is overlap between these two numbers, but there is not yet a consensus on how much that is. According to NPR, Medicaid’s growth would be cut over time because healthcare costs grow faster than the economy.

Medicaid currently provides healthcare support for 75 million low income, elderly, and disabled people.

Here’s a link to the full proposed budget, if you’re interested in reading more.