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The US is experiencing a shortage of primary care providers, and that shortage is expected to become more acute as a higher percentage of its population ages into retirement. That trend is likely a result of specialists being better compensated than primary care providers, and might have been accelerated during the pandemic (given the number of providers who left the profession). In a marketplace dynamic, when meeting demand is too expensive and that demand cannot be curbed, then it is logical to think about increasing supply, which Kaiser Health News reports the state of Montana doing. Specifically, the state is considering whether to allow physician assistants to practice more independently.

The US is experiencing a shortage of primary care providers, and that shortage is expected to become more acute as a higher percentage of its population ages into retirement. That trend is likely a result of specialists being better compensated than primary care providers, and might have been accelerated during the pandemic (given the number of providers who left the profession). In a marketplace dynamic, when meeting demand is too expensive and that demand cannot be curbed, then it is logical to think about increasing supply, which Kaiser Health News reports the state of Montana doing. Specifically, the state is considering whether to allow physician assistants to practice more independently.

Not surprisingly, the CEO of Montana Medical Association opposes the move. It is unclear what medical associations propose to solve the shortage. Presumably, physicians would welcome higher reimbursements, but if the number of doctors who can be trained each year is limited, paying more does not seem like an effective strategy. Given the long-term trends, it seems likely that more and more states will expand the autonomy of mid-level practitioners to cover the primary care shortage.

Kaiser Health News reported on a growing trend in which emergency rooms are increasingly staffed with midlevel practitioners (nurse practitioners and physician assistants) instead of physicians. Apparently, emergency medicine physicians are paid about two-and-a-half times what midlevel practitioners are paid. Private equity investors (generally not from the healthcare industry) have been buying up staffing agencies and changing the mix of providers to save money.

Kaiser Health News reported on a growing trend in which emergency rooms are increasingly staffed with midlevel practitioners (nurse practitioners and physician assistants) instead of physicians. Apparently, emergency medicine physicians are paid about two-and-a-half times what midlevel practitioners are paid. Private equity investors (generally not from the healthcare industry) have been buying up staffing agencies and changing the mix of providers to save money.

The article points out that "definitive evidence remains elusive that replacing ER doctors with nonphysicians has a negative impact on patients", although specific studies might find otherwise. One study found that "treatment by a nurse practitioner resulted on average in a 7% increase in cost of care and an 11% increase in length of stay, extending patients' time in the ER by minutes for minor visits and hours for longer ones." However, given that the hospital that owns the emergency room is not bearing the increased cost (and perhaps even benefits financially from the added revenue), it is not surprising that staffing agencies are keen to save on labor costs by replacing physicians. It is also not surprising that a leader of an organization representing physician assistants believes that this trend is positive.

A major question remains as to whether patient care is deteriorating because of this trend. If the industry had widely established and public metrics to evaluate quality of patient care, administrators could make much more informed decisions. For example, an administrator might feel a two percent drop in quality is worth a 70% drop in cost. Without knowing how quality of care is being affected, it is difficult to understand the tradeoffs. For now, it seems that policy should be adjusted so that patients who return to the emergency room within the same day for the same issue should not be charged for separate visits when the earlier visits failed to detect an issue that ultimately became recognized (as was the case in the anecdote that opened the article).

NPR reported on Medicare's proposed plans to slow the growth of drug prices. Apparently, Medicare plans to require pharmaceutical manufacturers to repay amounts where prices have increased faster than inflation. Medicare believes it has this authority from the Inflation Reduction Act, along with the power to negotiate pricing for up to ten medications per year for several years.

NPR reported on Medicare's proposed plans to slow the growth of drug prices. Apparently, Medicare plans to require pharmaceutical manufacturers to repay amounts where prices have increased faster than inflation. Medicare believes it has this authority from the Inflation Reduction Act, along with the power to negotiate pricing for up to ten medications per year for several years.

The article posits that the "inflation refund" regulation will be the subject of one or more lawsuits, similar to how the Affordable Care Act was. Given that Medicare expects to save over $170 billion over the next decade, it is not at all surprising that pharmaceutical manufacturers would explore all legal measures to overturn or at least delay this regulation. Limiting the growth of prices of private good by public regulation does seem unusual in the United States.

Taxpayers want to know that their dollars are well spent, and people talking about the budget for the federal government frequently talk about Medicare expenses. In that context, Kaiser Health News commented on a surprising decision that the Centers for Medicare & Medicaid Services (CMS) made to not require insurance companies to refund overpayments. CMS had paid $54 million annually to audit Medicare Advantage plans, and found overpayments to insurance companies in nearly 80% of the audits for 2011 to 2013. Despite CMS' own previous estimate overpayments of $650 million during those years (which some analysts thought were low), CMS now appears to not be concerned about those overpayments, from 2011 to 2017.

Taxpayers want to know that their dollars are well spent, and people talking about the budget for the federal government frequently talk about Medicare expenses. In that context, Kaiser Health News commented on a surprising decision that the Centers for Medicare & Medicaid Services (CMS) made to not require insurance companies to refund overpayments. CMS had paid $54 million annually to audit Medicare Advantage plans, and found overpayments to insurance companies in nearly 80% of the audits for 2011 to 2013. Despite CMS' own previous estimate overpayments of $650 million during those years (which some analysts thought were low), CMS now appears to not be concerned about those overpayments, from 2011 to 2017.

It appears that the audits only sampled a small patient population, and that CMS is requiring refunds of overpayments found in that sample. However, contrary to what seems like reasonable and customary practice, CMS is apparently waiving refunds for extrapolated overpayments (i.e. the amounts that would be expected if the patient samples were representative of the insurance plans' entire populations). While $650 million is a small percentage of Medicare's overall annual budget, the absolute number seems large enough to fund other meaningful initiatives that could help improve health care in the future.

As another example of California's current governor short-circuiting an open and transparent bidding process, Kaiser Health News reported on California's decision to award five health insurers contracts to provide Medi-Cal coverage. During the pandemic, the governor was criticized for awarding contracts to certain companies without an open process. Similarly, California was criticized last year for announcing a deal with Kaiser Permanente, bypassing a bidding process.

As another example of California's current governor short-circuiting an open and transparent bidding process, Kaiser Health News reported on California's decision to award five health insurers contracts to provide Medi-Cal coverage. During the pandemic, the governor was criticized for awarding contracts to certain companies without an open process. Similarly, California was criticized last year for announcing a deal with Kaiser Permanente, bypassing a bidding process.

This particular agreement raises questions of whether California is too dependent on a few large insurers to provide Medi-Cal coverage. That California canceled the bidding process after over two years and announced agreements with previous vendors raises the question of whether smaller providers might have been unfairly denied an opportunity to compete. Regardless, the cancellation is not a good look for state procurement.