Feb 19, 2020

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning. If you're looking for something heart-wrenching but important to read, here it is.

Today's word count is 697, or a 3-minute read.

1 big thing: Medicare Advantage swells

Illustration: Aïda Amer/Axios

Roughly 24.4 million seniors and people with disabilities were enrolled in a Medicare Advantage plan as of this month, a 9.4% jump from the same time in 2019, according to the latest federal data analyzed by Axios' Bob Herman.

Why it matters: Medicare Advantage continues to grow at high rates despite concerns over the program's higher spending and evidence that insurers are making people appear sicker than they are, Bob writes.

By the numbers: The 9.4% annual enrollment growth is well above the 6.8% growth rate in 2019, and people flocked to pretty much every insurer selling Medicare Advantage plans this past season — from startups to well-established carriers.

  • UnitedHealth Group boosted its membership by 10% to 6.3 million people, keeping its position as the largest MA company.
  • Humana (4.4 million), CVS Health's Aetna (2.6 million) and Kaiser Permanente (1.7 million) remained among the other large MA plans.

Startups including Devoted Health, Clover Health and Alignment Healthcare still have small MA footprints compared to the traditional insurance carriers, but they recorded sizable enrollment gains for this year.

  • Devoted multiplied its membership by seven times, and is now at 16,000 enrollees.
  • Clover has 54,500 members, a 39% bump from a year ago.
  • Alignment's enrollment spiked 36%, to 61,700 people.

The elephant in the room: The Congressional Budget Office raised new concerns about MA spending in its latest economic outlook.

  • Net Medicare spending this year will be $22 billion higher than CBO originally projected, and "higher spending for Medicare Advantage accounts for most of that difference," CBO said.
  • Federal watchdogs have warned about the coding practices of MA plans, and the industry has fought off regulators that want to audit their records more aggressively.

Go deeper: Where Medicare Advantage is most popular

2. Private equity's slow creep into doctors' offices

Private-equity firms accelerated their acquisitions of doctors' practices between 2013 and 2016, according to a new JAMA study.

Why it matters: "Private equity firms expect greater than 20% annual returns, and these financial incentives may conflict with the need for longer-term investments in practice stability, physician recruitment, quality, and safety," the author writes.

  • "There may be additional pressures to increase revenue streams (eg, elective procedures and ancillary services), direct more referrals internally, and rely on lower-cost clinicians," she adds.

By the numbers: 355 physician practices were acquired by private-equity firms over the time period, a small portion of total practices. But industry reports suggest that the growth kept up in 2017 and 2018.

  • The most commonly acquired medical groups were anesthesiology, multi-specialty practices and emergency medicine.

Between the lines: The role of private equity in health care has fallen under heavier scrutiny recently, as Congress examines the billing practices of physician groups that are frequently private equity-owned.

  • Private equity might have made things worse for itself when it became involved in the surprise billing debate via physician staffing firms that it backs.
  • These groups have poured millions of dollars into ads urging Congress not to pass a surprise billing solution that'd be more costly to providers.
3. California's coverage experiment

Covered California, the state's Affordable Care Act exchange, announced yesterday that new enrollment rose 41% in 2020 after the state reinstated the individual mandate and expanded the law's insurance subsidies.

If California is acting as a real-life test case for what happens when policymakers beef up the ACA, the experiment seems to be going well, at least in terms of coverage numbers.

Yes, but: The number of enrollees who renewed their coverage was down 8%, which "could be due to the strong economy. It could also signal a problem retaining consumers due to high costs," the Kaiser Family Foundation's Larry Levitt tweeted.

The big picture: Even the healthiest of marketplaces have had limited success in controlling health care costs. That's likely part of the reason why most Democrats are ready to move beyond the ACA only a decade after it passed.

Go deeper: California's new health care milestones

4. More coronavirus vaccine efforts

Photo: Thomas Coex/AFP via Getty Images

Sanofi Pasteur is entering the race to develop a vaccine for the novel coronavirus, partnering with the U.S. Biomedical Advanced Research and Development Authority, Axios' Marisa Fernandez writes.

  • Separately, the Department of Health and Human Services will use an existing partnership with Janssen Research & Development, part of Johnson & Johnson, to help develop therapeutics for coronavirus infections.
5. Medicare for All is dividing unions

Unions across the country are at odds over Medicare for All, with some saying it would free them up to focus on wages and working conditions, while others argue that the health benefits they've already won are better, Politico reports.

The big picture: The fight reflects the larger battle over Medicare for All, but is particularly acute in union-heavy states like California, New York and Michigan.

This has all come to a head in Nevada, after the Culinary Workers Union slammed Medicare for All and didn't endorse any of the candidates, providing a portrait of how divisive the issue is within one of the Democratic party's most loyal institutions.

Caitlin Owens