Top Stories in Business & Health for August 28, 2017
Northwell Health to close its CareConnect insurance business
New York’s largest health care system, Northwell Health, announced Thursday that it would shut down CareConnect, the insurance company it started in 2013, citing financial losses as the reason. “It has become increasingly clear that continuing the CareConnect health plan is financially unsustainable, given the failure of the federal government and Congress to correct regulatory flaws that have destabilized insurance markets and their refusal to honor promises of additional funding,” said Michael Dowling, Northwell’s CEO, in a corporate press release. The decision will affect approximately 125,000 plan members. Northwell said it would submit a plan to withdraw from the state’s insurance market and would continue operations over the next year so that policyholders can be transferred to other health plans.
According to Northwell, CareConnect would have been profitable this year if it had not had to pay $112 million into the Affordable Care Act (ACA)’s risk-adjustment pool. That amount represents an estimated 44 percent of the company’s revenue from small-group health plans in 2016. CareConnect will also have to pay more than $100 million into the risk-adjustment pool in 2018 for revenue generated this year from its small-group health plans. Northwell said “defects” in the program have resulted in smaller, “more innovative” insurers like CareConnect subsidizing larger competitors.
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Ascension signs LOI to merge Presence Health into AMITA Health
Ascension, the largest nonprofit Catholic health system in the U.S., signed a nonbinding letter of intent last week along with Presence Health, Illinois’ largest Catholic health system, for Presence Health to become part of AMITA Health, a joint venture between Ascension’s Alexian Brothers Health System and Adventist Midwest Health, which is part of Adventist Health System. AMITA Health’s network currently includes nine hospitals, more than 80 clinics and outpatient facilities, and approximately 3,500 physicians. AMITA Health also has an accountable care organization (ACO) participating in the Medicare Shared Savings Program (MSSP). Presence Health has 12 hospitals, 10 of which would transition to AMITA Health, with the other two—Presence Covenant Medical Center and Presence United Samaritans Medical Center—being acquired by OSF HealthCare, as announced earlier this month. Ascension said in a press release that the letter of intent “is expected to lead to a definitive agreement pending detailed legal and financial due diligence, along with regulatory and canonical approval.”
Samsung Bioepis, Takeda to collaborate on new biologics
Samsung Bioepis is teaming up with Takeda Pharmaceutical Co. to jointly fund and co-develop new biologic therapies in “unmet disease areas.” To date, Samsung Bioepis—a joint venture formed in 2012 between Samsung BioLogics and Biogen—has focused its drug development efforts on biosimilars such as Renflexis, a copy of Janssen Biotech’s Remicade (infliximab) approved by the Food and Drug Administration in April. Last year, Samsung Bioepis was the first company to launch a biosimilar to Amgen’s Enbrel (etanercept) in Europe—a product named Benepali—and the firm just received approval on Friday from the European Commission for Imraldi, a biosimilar to AbbVie’s Humira (adalimumab). Through the new risk-sharing arrangement with Takeda, Samsung Bioepis will expand into the development of original biologic treatments, starting with TAK-671, a candidate for severe acute pancreatitis. Specific terms of the collaboration were not disclosed.
Governors work on bipartisan health care proposal to stabilize individual insurance market
Govs. John Kasich, R-Ohio, and John Hickenlooper, D-Colo., are developing a bipartisan health care proposal with the initial goal of stabilizing the individual insurance market. They indicated that they might be ready to unveil their proposal sometime this week, according to The Hill. The Senate Health Committee will be holding bipartisan health care reform hearings in early September, including one on Sept. 7 dedicated to testimony from governors, and hopes to finalize a stabilization bill by midmonth. At the top of the list, Gov. Hickenlooper told NPR, the governors’ plan includes reinsurance, a component of the Affordable Care Act that helps insurers cover the costs of their sickest plan members. Gov. Kasich also advocates continuing the ACA’s cost-sharing reductions, which the Trump administration has threatened to end.
Similar to a plan developed by the Problem Solvers Caucus—a bipartisan group of 40 members of the House of Representatives—the governors’ plan would revise the ACA’s employer mandate to increase the number of employees a business has to have before the mandate kicks in. Currently, the mandate applies to businesses with 50 or more employees. Govs. Kasich and Hickenlooper intend to ask other governors to support their plan.
Boston-based Partners HealthCare is pausing its plans to acquire Care New England (CNE), which reportedly has lost $46 million so far this fiscal year. CNE, based in Providence, R.I., hopes to sell its Memorial Hospital to Prime Healthcare and merge its three other hospitals with Partners. Peter Markell, Partners’ CFO, told the Boston Business Journal that executives from Partners and CNE are expected to meet this fall to discuss CNE’s turnaround plan and see what they can work out. In the meantime, WPRI-12 News reported that Lifespan, Rhode Island’s largest hospital group, is a contender to purchase CNE if Partners backs out.
Thanks to CareSource, there are no more ‘bare’ counties. Ohio’s Paulding County was the last county in the U.S. left without an insurer planning to offer coverage on the ACA’s exchanges, but CareSource stepped up last Thursday and said it would fill in the final gap. The Kaiser Family Foundation’s Cynthia Cox noted that CareSource and Centene have covered 55 of the 82 counties at risk earlier this year of having no exchange insurer in 2018. Fierce Healthcare pointed out, however, that insurers have until Sept. 27 to finalize their plans to participate on the exchanges, and if lawmakers fail to take action before then to stabilize the individual insurance market, some insurers might change their minds.
Intermountain Healthcare, a health system and health plan operating in Utah and southern Idaho, will attempt to reduce by 40 percent the average amount of opioids prescribed per acute pain prescription at its facilities by the end of 2018. The organization, which has 22 hospitals and 180 clinics, said it is the first U.S. health system to formally announce such a target. Physicians at Intermountain will be required to prescribe smaller quantities of the painkillers, with the objective of having fewer leftover pills, thereby reducing the risk of having the opioids diverted and misused, Business Insider reported. Intermountain will also increase the availability of naloxone kits, which are used for emergency overdoses, and increase prescriptions for suboxone, a drug used in treating opioid addiction.
Starting next year, physicians participating in MSSP ACOs will have at least some idea at the start of the performance year which Medicare beneficiaries they will be evaluated for, Modern Healthcare reported. Under the existing process, patients are usually assigned retroactively to ACOs, which means physicians find out at the end of the performance year which patients’ care CMS will assess to determine how successfully the physicians have improved quality while reducing costs. CMS has updated the Medicare website to permit “voluntary attribution”—i.e., beneficiaries have the option of listing their primary care physician, and if that physician participates in an MSSP ACO, the beneficiary will be assigned to the provider and the ACO. Beneficiaries not making a primary care declaration on the website could still be assigned retroactively.
Novartis’ investigational CAR-T cell therapy for leukemia has yet to be approved, but already talk of the potential price is raising eyebrows. FiercePharma reported earlier this year that a cost-effectiveness analysis of CAR-T cell therapies demonstrated that a price of $649,000 for a one-time treatment would be justified for young patients with acute lymphoblastic leukemia. This type of therapy involves harvesting millions of the patient’s T cells and shipping them to the drug company, where they are genetically engineered to kill cancer cells. The altered T cells are then shipped back to the treatment center and infused back into the patient’s blood. Novartis said it has reduced the turnaround time from several months to about three weeks. In a clinical trial, 83 percent of the patients who underwent CAR-T cell therapy went into remission. Novartis has not announced any decisions regarding the price of its therapy, known as CTL019 or tisagenlecleucel. An FDA advisory panel unanimously recommended approval of CTL019 in July, and the agency is scheduled to decide by Oct. 3 whether to give it the green light.