Posts Tagged ‘Inc’

Senate Passes Bill to Fund the FDA

Wednesday, June 6th, 2012

In a rare show of bipartisanship, the Senate voted 96 – 1 to fund the Food and Drug Administration (FDA), a regulatory powerhouse with far-reaching influence over the foods Americans eat and the medicines they take.  The bill’s goal is to speed approval of new drugs and devices and ensure food safety.  It reauthorizes fees from companies like Johnson & Johnson, Medtronic, Inc. and Roche Holding AG that facilitate FDA evaluation of new medical products prior to approval.

These user fees could provide approximately 50 percent of the FDA’s proposed $4.5 billion budget for 2013.  The FDA regulates products that make up nearly 25 percent of the American economy.  Similar legislation has passed a House committee with support from both sides of the aisle and may move to the full House for a vote quickly.  Senate leaders sped the bill through the chamber, emphasizing its importance in protecting consumer safety and promoting innovation in medicine.

“This bill is a shining example of what we can achieve when we all work together,” said Senator Tom Harkin (D-IA), who chairs the Senate committee that oversees the FDA.  Industry user fees, first enacted in 1992, give the FDA millions of dollars annually to review new products for the American market but must be renewed every five years.  The current version will expire in September.  Additionally, for the first time the FDA will also collect fees from makers of generic drugs and of copycat versions of complex biotech drugs, known as biosimilars.  “We’ve worked on this bill for 18 months,” Harkin said as he and ranking member Mike Enzi (R-WY) refereed the mostly cordial debate.  The two led opposition to all of the amendments that came up for a vote, and all were defeated.

Senator John McCain (R-AZ) proposed an amendment that would let Americans import drugs from approved Canadian pharmacies.  “In a normal world, this would require a voice vote,” McCain said.  “But what we’re about to see is the incredible influence of special interests here, particularly (the Pharmaceutical Manufacturers Association).”  Senator Robert Menendez (D-NJ) argued that it’s not about the special interests.  “It’s about the health and security of the American people, which is why time after time the Senate has rejected it,” Menendez said.

Senator Bernie Sanders (I-VT), who cast the sole “no” vote, got a vote on his amendment to take away exclusive marketing rights from drug makers if a company is found to be at fault for fraud involving a particular drug. The measure failed overwhelmingly, 9-88.  “Almost every drug company in this country is perpetrating fraud,” Sanders said.  “They’re ripping off Medicare; they’re ripping off Medicaid; and they’re ripping off the American consumer.”

The bill’s speedy passage surprised onlookers accustomed to the usual congressional gridlock.  “I haven’t seen anything move this fast in a long time,” said Lisa Swirsky, a senior policy analyst at Consumers Union.  “Congress is actually working.  It’s kind of like you learned about it in high school.”  Nevertheless, consumer advocates have mixed feelings about the Senate bill that now goes to the House.  “If you look back at what we saw in the House in December, you know this could have been a lot worse,” Swirsky said. She noted that she was “deeply disappointed” that some provisions consumer groups were pursuing to toughen FDA’s review of medical devices did not make it into the bill.  “I would say it’s bittersweet but mostly bitter.”

For more than seven decades, the FDA has primarily inspected U.S. factories.  In recent years, pharmaceutical companies have moved their operations overseas to take advantage of cheaper labor and materials.  Between 2001 and 2008 the number of American drugs made overseas doubled, according FDA figures.  Today approximately 80 percent of the ingredients used in U.S. medicines are made in other countries.

The Senate bill will end a requirement that the FDA inspect all American factories every two years, and give the agency increased discretion to focus on foreign facilities.  At present, the FDA inspects the typical foreign manufacturing facility once every nine years.  Under the bill,  FDA inspectors will target the most problematic manufacturing sites, no matter where they are located.  “This puts domestic and international facilities on an even playing field for the first time,” said Allen Coukell of the Pew Charitable Trusts, which has advocated for increased drug safety.  “It says to FDA, ‘you should inspect the highest risk facilities first, no matter where they are in the world.’”

“These are all the steps American families already think we have in place to protect them,” said Senator Michael Bennet, (D-CO), one of the bill’s authors.  “I cannot tell you how many town halls I have had where people have been shocked to learn that the products they have in their medicine cabinets have never been inspected.”

Employer-Susidized Healthcare Insurance at a New Low

Wednesday, November 23rd, 2011

Fewer than half of  America employers – just 44.5 percent in the 3rd quarter, a decline of more than five percent in three years, — contribute to their employees’ healthcare coverage, according to a Gallup and Healthways Inc., poll.  The firms, which surveyed more than 90,000 adults, blamed the decline on high unemployment, under-employment and an increased number of employers who do not offer health insurance to their workers.

Employer-sponsored health insurance is one of the pillars of the $2.6 trillion U.S. healthcare industry.  Unfortunately, companies have scaled back benefits and raised employee charges to cope with fast-rising healthcare costs and anemic economic growth.  The latest figure was 5.3 percent below the 2008 high of 49.8 percent, when the companies began tracking trends in employer-sponsored health insurance.  “The health insurance system in the United States is experiencing numerous changes.  Governments and businesses have and will continue to cut back and/or reform their health coverage offerings,” according to the pollsters.

There was also an increase in the ranks of those covered by government plans from Medicaid, Medicare and military programs, which was up 2.2 percentage points since 2008 at 25.1 percent but off a 2010 high of 25.7 percent.

According to the Kaiser Family Foundation, there were 41 million uninsured American adults and 24 million adults under retirement age receiving the Medicaid program for low-income people and other public insurance plans last year.  Medicare covers an estimated 48 million beneficiaries.  The survey found higher levels of health insurance coverage among young people aged 18 to 26, which the pollsters attributed to a provision of the ACA that allows parents to cover grown children under their insurance plans.  Other portions of the law, including tax credits for small businesses, did not appear help those aged 25 to 64, whose uninsured ranks increased.

One large employer cutting back on healthcare coverage is Wal-Mart, the nation’s largest private employer.  Citing rising costs, the retailer told its employees that all future part-time employees who work less than 24 hours a week will no longer be eligible for any of the company’s health insurance plans.  Additionally, new employees who average 24 hours to 33 hours a week will no longer be able to include a husband or wife as part of their healthcare plan, although children can still be covered.  This is a massive shift from a few years ago when Wal-Mart expanded coverage after being criticized because so many of its 1.4 million workers could not afford or did not qualify for coverage — sending many of them to Medicaid.

“Over the last few years, we’ve all seen our healthcare rates increase and it’s probably not a surprise that this year will be no different,” said Greg Rossiter, a Wal-Mart spokesman.  “We made the difficult decision to raise rates that will affect our associates’ medical costs.  The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

There’s also some good news on the employer-subsidized healthcare front. Nearly 75 percent of medium-to-large employers plan will continue to offer their workers health insurance once the major provisions of the ACA take effect, according to a survey by consulting firm Towers Watson.  According to the survey of 368 mid-to- large-sized companies, 71 percent plan to continue to offer healthcare benefits to their employees through 2014, the year that everyone will be required to have health insurance and state-based health insurance exchanges will kick off.  Approximately one-third of the companies are not certain if they will continue offering insurance, or, if they stopped providing insurance, whether they would compensate employees by offering pay raises.

“With so much still unknown regarding both the short- and long-term impact of healthcare reform, most employers will not make wholesale changes to employer-sponsored health plans in 2012,” said Ron Fontanetta, senior healthcare consulting leader at Towers Watson.

600,000 Young Adults Already Taking Advantage of Healthcare Reform Law Provision

Tuesday, June 14th, 2011

More than 600,000 young American adults are taking advantage of the healthcare law provision that allows people under 26 to remain on their parents’ health plans, a pace that appears to be faster than the government expected.

WellPoint, which insures 34 million Americans, said the dependent provision was the reason why 280,000 new members were enrolled.  That was approximately one-third of its total enrollment growth in the first three months of the year.  Other large insurers have added thousands of young adults.  Aetna added approximately 100,000; Kaiser Permanente, about 90,000; Highmark Inc., about 72,000; and Health Care Service Corporation, about 82,000.  The Department of Health and Human Services (HHS) believes that about 1.2 million young adults will sign up for coverage in 2011.

The (college) coverage will probably end in August, but students should check the date,” said Aaron Smith, co-founder and executive director of the Young Invincibles,  a Washington-based non-profit healthcare advocacy group for young adults.  “It’s an important piece of information.  They could have a gap in coverage.”  The group has created guidelines to help new grads understand their health insurance options.  Thanks to the ACA, young adults can remain on their parents’ health insurance until their 26th birthday, even if they’re in school, financially independent and even if they’re married.  The sole exception is if they have health coverage through their own employer.  In those situations — even if the policy is bad — they can’t remain on their parents’ plan.  Young adults have one of the lowest coverage rates, estimated at as much as 30 percent.  The healthcare reform overhaul has helped make a dent in that figure.

Adding young adult coverage increases the average family premium by approximately one percent, according to federal estimates.  Unfortunately, graduating students who are currently uninsured don’t get a special enrollment opportunity under the law, says Smith, and must wait until the next annual enrollment period to sign on with their parents’ plan.

Not surprisingly, some employers are concerned about having to pay for additional coverage for their employees’ offspring.  Helen Darling, CEO of the National Business Group on Health, which represents more than 300 large employers, said employers generally don’t like adding anything to their health costs.  “I don’t think anyone is eager to spend more money,” Darling said.  “This is not something employers would have done on their own.”

According to insurers, the growth in young-adult enrollment comes as the industry began reporting 1st quarter earnings shows better than expected profits.  Carl McDonald, a Citigroup analyst, said that the higher profits aren’t related to the new enrollees but rather because most of the increase in young people’s enrollment has occurred among self-insured employers; in those firms, insurers act as administrators and assume no financial risk.  McDonald said the majority of insurers’ profit increases is due to their customers using fewer health services, particularly hospital care.

“We are pleased to see the embrace of this key provision of the Affordable Care Act,” said Jessica Santillo, a spokeswoman for HHS.  “Young adults are more than twice as likely to be uninsured than older adults, making it harder to get the health care they need, and putting them at risk of going into debt from high medical bills.”

Healthcare Costs Have Doubled in Just Nine Years

Wednesday, June 1st, 2011

"Where does it hurt?"

American families have seen their healthcare costs rise by more than 50 percent over the last nine years, a trend that shows no sign of reversing, according to a report from the actuarial consulting firm Milliman, Inc.

Healthcare show few signs of dropping, according to a report released Wednesday by the actuarial consulting firm.  When you add in employers’ contributions, this year’s total healthcare cost for a family of four more than doubled to $19,393 from the $9,235 reported in 2002.  The 2011 figure represents a seven percent increase compared with 2010.  The primary reason for the rising costs are primarily due to price increases in categories like pharmacy, inpatient or outpatient hospital care and doctors’ office visits.  Lorraine Mayne, one of the report’s authors, said these charge increases are a bigger factor than changes in how Americans use healthcare.  Even the passage of the Patient Protection and Affordable Care Act, which started phasing in during 2010 and aims to eventually cover millions of uninsured people, had virtually no impact on healthcare costs in 2011, Mayne said.  She doesn’t believe that new law will have any “direct, immediate impact” on the trend.

In an important finding, the study found that employers are making workers shoulder an even bigger share of total health care expenses.   The employee portion of costs paid for a family of four covered by employer-sponsored health insurance will rise to approximately $8,008 this year from $3,634 in 2002.  That is an additional $84 a week from household budgets for healthcare.  Of the $1,319 yearly increase, workers’ out-of-pocket costs rose 9.2 percent in 2011.  That outpaced the 6.6 percent increase in 2010.  Payroll deductions for insurance coverage climbed 9.3 percent this year, an increase over the previous year.  Adding insult to injury, employers’ share of their workers’ healthcare costs fell six percent in 2010, compared with eight percent the previous year.  Of the $19,393 annual cost, employees’ share is moving closer to 50 percent, according to Mayne.  “Employees are paying $8,000 of the $19,000.  That’s a decent amount much larger than other areas of consumer spending.  What we’ve observed in the past few years is employers have increasingly been offering health plans with higher deductibles and co-insurance, co-payment limits,” she said.

The rise in outpatient care is making the difference. For three consecutive years, outpatient care has led all other categories in cost increases – as high as 90 percent.  “Unit costs are increasing both because the same services have increased in price and also because new, more expensive services continue to emerge,” the report says.  Hospital costs represent the second reason for last year’s increase (for the most part because acute care is so expensive), followed by physician care, drug costs, and other types of care, such as durable medical equipment and home healthcare.  People can rein in some costs by moving to a different part of the country, according to Milliman.

Healthcare was costliest in Miami,  where spending averaged $23,362.  New York came in second at $22,785 and Chicago third at $21,996  The three lowest-cost cities were Phoenix, which averaged $17,336; Atlanta, which averaged $18,292; and Seattle, which averaged $18,536.  “These cost differences result from variation in local practice patterns and from differing costs for health care goods and services,” said Chris Girod, a Milliman principal and consulting actuary.

Healthcare Construction Up 50 Percent

Thursday, May 12th, 2011

Healthcare construction rose nearly 50 percent to $12.6 billion in 2010, an increase from the $8.5 billion reported in 2009.  Many medical development experts are now saying that the industry has come back almost as strongly as prior to the recession.  Healthcare assets remain strong because of the fundamentals of its existence; essentially, the growing and aging population.  Additionally, consolidations have hit the industry hard, with successful mergers typically resulting in redevelopment or expansion plans.

Healthcare construction spending grew more than 10 percent for seven years, and then stalled.  The halt still represents an enhanced growth than almost any other construction market during the recession, which deepened as a result of the credit freeze that began in the fall of 2008.  Throughout the slowdown, hospital construction spending increased nine percent when compared with the period before the credit freeze; spending for specialized medical office buildings fell 17 percent.  The slowdown in medical office spending corresponds to trends in other developed financed sectors, although the slowdown began later and has been less severe.  Reduced income and unhealthy balance sheets caused some developers to lose access to credit.  Others lost credit because lenders had concerns about cash flow coming from new capacity in a depressed economy.

Healthcare construction spending should return to a 10 percent annual growth rate in 2011, a reflection of the usual cyclical surge that follows a recession.  The rebound for hospital construction spending is a result of delayed stimulus plan funding and the resumption of work that was put on hold while healthcare reform was debated in Washington, D.C.

The Urban Land Institute (ULI) has recognized that the growing demand for medical services – needed to treat aging baby boomers, combined with shifts in approaches to treatments to curb rising costs — will significantly increase the need for new and redeveloped medical office buildings.  According to a new report, The Outlook for Health Care, published by the ULI and Seavest Inc., the increase in investment and development to fill that demand will strengthen the healthcare industry’s role as an economic development engine throughout the United States.

The Outlook for Health Care, written by economist Gary Shilling, discusses long-term trends and drivers contributing to the demand for more medical facilities and all-new healthcare facility products such as wellness centers.  The reason is that baby boomers are living longer and need a greater range of services; technology changes have required retrofits or new development; growth in the number of insured Americans under the healthcare reform legislation; ongoing growth in healthcare-related jobs; the shift toward outpatient treatment facilities; and growth in the number of physicians employed by hospitals.

Shilling discussed the report at a forum, “Anchor Institutions as Catalysts for Urban Investments,” hosted by ULI in Washington, D.C.  “Both demand and supply factors point to rapid growth in spending on medical services and medical office buildings for many years.  Medical care will continue to grow rapidly and steadily for two basic reasons – it is an essential human service, and it is heavily supported by the government,” Shilling said.

Ben Cutler: An Insurance Industry CEO Responds to Healthcare Reform

Tuesday, April 26th, 2011

Is the healthcare insurance industry the scapegoat for rising premiums?  In the inaugural episode of the Chuck Lauer Show,  presented by Alter+Care, the former publisher of Modern Healthcare Magazine talked about the insurance industry’s take on healthcare reform with Ben Cutler, Chairman and CEO of USHEALTH Group, Inc., who previously led Fortis Healthcare.  Cutler currently serves on AHIP’s Executive Committee, serves on AHIP’s Board and is also the Chairman of AHIP’s Membership Committee.  The Chuck Lauer Show is an ongoing conversation about the future of healthcare with the leaders and thinkers who are shaping a new direction for healthcare in the United States. 

Cutler, who has spent more than 30 years in the healthcare insurance industry, recalled the ongoing national debate that began nearly 20 years over HillaryCare with the objective of how to provide universal coverage for the more than 50 million uninsured Americans.  Cutler believes that the Obama administration has chosen to focus on access and doesn’t sufficiently address affordability issues.  Healthcare industry groups recognized that the day would come when reform would be a top-line issue and that we would not be well served by just saying “no”.  Cutler says “We’ve worked hard on positioning the industry to accommodate reforms and tried to be very accommodating because getting more people covered is a laudable objective.”

As the healthcare reform bill was drafted, it soon became clear that the insurance industry would have a problem with some of the issues.  Unfortunately, according to Cutler, the politicians decided they needed an enemy and “that turned out to be us.  We continue to be vilified as an industry”, a situation that could – and should — have been avoided.  The Patient Protection and Affordable Care Act will have some unintended consequences in terms of how the legislation will affect the behavior of various stakeholders who comprise the healthcare economy – consumers, providers, insurers, regulators, etc.  It is inevitable that the insurance industry will have to raise rates if they are to comply with the healthcare law, which essentially constitutes a new tax on the American people.

Cutler cites the example of the $5 billion set aside to subsidize people in high-risk pools.  The government estimated that by this time, upwards of 500,000 individuals would be enrolled in these pools.  So far, just 8,000 people have signed up, an example of where government expectations were totally unrealistic.  Additionally, there is the issue of pre-existing conditions, which the government has characterized as an industry-abusive position, and one which relates to affordability of coverage.  According to Cutler, if people buy homeowners’ insurance only after their house catches fire, the premium obviously would be higher.

Michelle Obama Asks Grocery Manufacturers for Healthier Foods

Wednesday, May 12th, 2010

First Lady takes the offensive for childhood obesity.First Lady Michelle Obama recently took her initiative against childhood obesity to the source, asking companies at a meeting of the Grocery Manufacturers Association to “step it up” and add less fat, salt and sugar to foods.  “We need you not to just tweak around the edges but entirely rethink the products you are offering, the information that you provide about those products, and how you market those products to our children,” she said.

Although Mrs. Obama has addressed schools and nutrition groups about childhood obesity, this was the first time that she faced the companies that make the snacks and junk food that contribute to the problem.  The Grocery Manufacturers Association – whose members include Kraft Foods, Inc., Coca Cola Co. and General Mills, Inc. – had invited the first lady to speak at its science forum and gave her a standing ovation.

Mrs. Obama called for food labels that are less confusing, smaller portion sizes and increased marketing of healthy foods.  She also urged the food companies to find creative ways to market products as healthy, increase nutrients, and reduce the number of bad ingredients.  “While decreasing fat is certainly a good thing, replacing it with sugar and salt isn’t,” she said.  “This needs to be a serious industry-wide commitment to providing the healthier foods parents are looking for at prices they can afford.”

Scott Faber, a grocery association lobbyist, said his industry is working with the government to find ways to produce healthier foods.  “Consumers are demanding more and more healthy choices.  Our industry will do our part by changing the way we make and market our foods, but government has a big role to play as well.”