Anyone who’s ever used Yelp understands how four- and five-star ratings can affect where people choose to eat, stay, and spend money—and how companies use positive rankings to drive up business (and revenue).

The federal Centers for Medicare and Medicaid Services (CMS) uses a similar model to help older adults select Medicare plans offered by private insurers. The five-star rating system ranks Medicare Advantage contracts from one to five stars—with five being the best—based on quality metrics.

With the best performers (those earning four or five stars) eligible for bonus payments, the ratings system has been a boon for insurance companies. The federal government spent an estimated $10 billion on bonus payments in 2022 alone—more than three times what it spent in 2015, according to a Kaiser Family Foundation analysis.

This year, fewer contracts have received top marks as CMS phases out “disaster” provisions enacted to help plans during the Covid-19 pandemic. The change has sparked immediate action from insurers to improve their future star ratings (and calm shareholders).

Healthcare Brew breaks down what you need to know about the Medicare Advantage star rating system, and what the 2023 changes mean for the industry.

How we got here: CMS scores Medicare Advantage contracts with prescription drug coverage on 38 quality and performance measures (including things like breast cancer screenings, care coordination, and timely decisions about appeals). Medicare Advantage-only contracts are scored on 28 measures, while standalone Part D (or prescription drug plan) contracts are scored on 12.

Contracts that receive a coveted four- to five-star rating can earn bonus payments, which must be used to offer other benefits to enrollees. The extra funds can help health plans attract more members—hence, increasing profitability for insurance companies. Keep reading here.—SY

Do you work in healthcare or have information about the industry that we should know? Email Shannon at [email protected]. For completely confidential conversations, ask Shannon for her number on Signal.

New York hospitals and health systems generate nearly $192 billion each year in economic activity—or about 10% of the state’s $2 trillion gross domestic product, new data suggests.

Those facilities account for 856,000 jobs in New York and $53.2 billion in payroll expenditures (that’s roughly the size of Michigan’s state budget!), according to updated figures from the Healthcare Association of New York State (HANYS), a group that represents hospitals and other health facilities.

The report, released in January, found that these facilities generate $28.2 billion in tax revenue and $17.2 billion in community benefits and investments.

New York hospitals care for about 60.3 million patients annually, including 2.2 million admitted to facilities and 7.3 million treated in an emergency room, according to the report, which is based on 2021 data and uses regional multipliers to measure total economic effect. Hospitals in New York also deliver about 204,000 babies each year. About seven in 10 inpatient discharges and 58% of outpatient visits are covered by Medicare and Medicaid.

HANYS President Bea Grause said the investments by hospitals “create numerous economic and community improvements that ripple far beyond their walls.”

“Our hospitals are the heart of New York, trusted by our communities to always be there when needed,” she added in a statement.

Zoom out: Hospitals and health systems are a major driver of economic activity not just in New York, but nationwide.

• Facilities across the US had 6.3 million full-time and part-time employees and spent more than $1.1 trillion on goods and services from other businesses in 2020, according to a 2022 American Hospital Association report.
• Also in 2020, hospitals supported 17.6 million total jobs—or about one in eight in the US when factoring in “ripple effect” jobs—and $3.6 trillion in economic activity, the report found.—SY

Usually a side hustle demands a bit of blood, sweat, and tears. But in the case of donating blood plasma for cash, that’s not just a figure of speech.

Plasma donors, who tend to be low-income earners and young, trade up to two hours for $50 to $75. And per FDA guidelines, they’re eligible to donate up to twice a week, or 104 times a year. (Note that the American Red Cross only allows individuals to donate plasma once every 28 days.) How often people elect to “donate” their plasma is reportedly tied to economic need.

An FDIC report from 2022 found payday borrowers and plasma donors have a lot in common, and getting paid to donate can help would-be borrowers avoid loans. For instance, 64% of donors reportedly use plasma income for essential/emergency expenses. It’s also estimated that households save around $200 million a year in financing costs on borrowed funds thanks to plasma center access.

Plasma collections curiously dropped during the worst of the pandemic. Of course potential donors worried about contracting the virus by going to centers, but Benjamin Ruder, CEO of B Positive Plasma, theorized that stimulus checks helped people stay financially afloat, too.

Paying donors is an effective way to make sure there’s enough (or at least more) supply—per the FDIC, the US supplies nearly two-thirds of global plasma, and it happens to be one of the few countries where donors get paid.

People with chronic illness and rare diseases rely on plasma-based therapies. Critics of the current system argue that we need broad economic changes—like a higher minimum wage and a more robust social safety net—so no one feels compelled to bleed themselves dry. For sure, plasma donation can give you the ick even if you don’t have a fear of needles.—MR

Today’s top healthcare reads.

Stat: Globally, more than half a million people die every year from strep A. (Stat News)

Quote: “As fungi are exposed to more consistent elevated temperatures, there’s a real possibility that certain fungi that were previously harmless suddenly become potential pathogens.”—Peter Pappas, an infectious disease specialist at the University of Alabama at Birmingham, on the rise in dangerous fungal infections (the Wall Street Journal)

Read: A lawsuit against UnitedHealthcare unveiled an “extraordinary” look into how an insurer denies coverage for treatment. (ProPublica)

Catch up on the top Healthcare Brew stories you may have missed:

• Why NYU Langone screens its ER patients for diabetes
• Amazon still not a big pharmacy player after latest venture, analysts say
• CES 2023 put digital health on full display