Midweek update

There are only five more days in this year’s Federal Benefits Open Season.

Follow up on Sunday’s post about CVS Health’s acquisition of Aetna (subject to government review and shareholder approval) here are links to CVS’s press release which explains the company’s plans behind the acquisition and the Drug Channel blog’s observations on those plans.

In other mergers and acquisitions news, United Healthcare’s Optum unit announced its acquisition of the Davita Medical Group for $4.9 billion.  Davita is the nation’s leading provider of kidney dialysis services. Shortly after Medicare was enacted in 1965, Congress decided to extend Medicare coverage to people suffering from end stage renal disease. Congress expected that this would be the first extension of Medicare to a several chronic illness. This act turned out to be the first and the last because the extension cost much, much more than anticipated. After all if you build it they will come.

The Harvard Health blog has a useful comment concerning celebrity endorsement of medical procedures. The writer’s upshot is “For any medical test or treatment, ask [your personal doctor] whether it’s likely to be helpful.” Good advice.

Last but not least, the CMS actuaries today released a report on 2016 National Health Expenditures.

In 2016, overall national health spending increased 4.3 percent following 5.8 percent growth in 2015, according to a study by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) published today as a Web First by Health Affairs. Following Affordable Care Act (ACA) coverage expansion and significant retail prescription drug spending growth in 2014 and 2015, health care spending growth decelerated in 2016. The report concludes that the 2016 expenditure slowdown was broadly based as growth for all major payers (private health insurance, Medicare, and Medicaid) and goods and service categories (hospitals, physician and clinical services, and retail prescription drugs) slowed in 2016. 

During 2014 and 2015, the health spending share of the economy increased 0.5 percentage point from 17.2 percent in 2013 to 17.7 percent in 2015. The increases in the health spending share of the economy in 2014 and 2015 were largely due to coverage expansion that contributed to 8.7 million individuals gaining private health insurance coverage and 10.2 million gaining Medicaid coverage over the period and to significant growth in retail prescription drug spending. Health care spending grew 1.5 percentage points faster than the overall economy in 2016, resulting in a 0.2 percentage-point increase in the health spending share of the economy – from 17.7 percent in 2015 to 17.9 percent in 2016. 

That’s a lot of boxes of ziti as Tony Soprano would say.

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