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Bringing Value to the Patient and the Healthcare System: A New Report

February 04, 2016
4:52 pm

This week the Patient-Centered Primary Care Collaborative (PCPCC) unveiled its fifth annual report on the patient centered medical home’s (PCMH) impact on cost and quality.  In the quest to improve population health and reduce cost, PCPCC has collected data from peer-reviewed studies on medical homes’ costs and utilization.  Several Healthcare Leadership Council (HLC) members – Anthem, Aetna, Johnson & Johnson, McKesson, Merck, Premier and Takeda — are executive members of PCPCC. The results are instructive in the continuing discussion on how to elevate healthcare quality while containing overall spending.  Key takeaways from the report include:

  • A focus on primary care drives down cost and utilization
  • Best results came from sites that used multiple payers
  • It is essential to align payment with performance

The panel that discussed the findings included Marci Nielsen, CEO of PCPCC, Alissa Fox, SVP of the Office of Policy and Representation at Blue Cross Blue Shield Association, Chris Koller, President of Milbank Memorial Fund, and Len Nichols, Director of the Center for Health Policy Research and Ethics at George Mason University.

The experts stated that PCMH’s have demonstrated the ability to control costs by providing the right care.  Delivery reform and payment reform go hand in hand; one will not succeed without the other.  As the nation works toward a value-based healthcare system it is important to be mindful of the cost of transformation.  Incentives must be right, there will be a need for antitrust exemptions, and the industry will rely on national standards but local relationships.  Currently, fee-for-service does not reimburse services that are key to coordinating patient care.  The PCMH model is not one size fits all, according to the panel, and more research is needed to identify which varying components are demonstrating the most value.  Defining measures and identifying best practices are necessary steps in ensuring successful implementation of the PCMH model.

This discussion on how to improve value within the healthcare system will reach an important juncture later this month when the Healthcare Leadership Council unveils specific policy recommendations – endorsed by virtually all sectors of the healthcare industry in addition to patient advocacy organizations – on how to remove barriers to quality-enhancing, cost-saving health innovations.  Watch this space for more information.

What to Expect in 2016, From an Industry Leader

January 06, 2016
3:16 pm

In these early days of the new year, all eyes will be on the U.S. House as it prepares to pass legislation repealing the Affordable Care Act, which will go to President Obama’s desk for a certain veto.

There are far weightier developments likely to happen in 2016, however, and Susan DeVore, President and CEO of Premier, Inc. and chair of the Healthcare Leadership Council penned a recent article in Health Affairs that does an excellent job spelling out the trends we should be watching in the coming months.  Among the developments she cites:

  • With the coming implementation of new Medicare physician payment formulas and rules, physicians will be determining which payment model works best for their practices and understanding how to improve performance to meet new quality standards.
  • Value-based contracting between providers and healthcare manufacturers will become more prevalent, with compensation ties to a product’s ability to meet certain performance criteria.
  • Telemedicine will continue to prove itself as a cost-effective mechanism for managing patient care, spurring discussions on the service’s role in healthcare payment systems.
  • To drive more market competition in the pharmaceutical market, Ms. DeVore projects speedier FDA approvals of new drugs.  She notes that competition has already brought down prices of the much-talked-about Hepatitis C medications.
  • The likelihood of legislation requiring more usability and interoperability among electronic medical records systems.
  • Noting that health providers are faced with literally hundreds of different performance quality measures, she projects an effort to consolidate and simplify measurement systems among government and private payers.

The full Susan DeVore Health Affairs post can be found here.

He’s Not a Pharmaceutical CEO

December 18, 2015
12:56 pm

In the movie Wall Street, the amoral corporate takeover specialist Gordon Gekko is intent on taking over the fictional airline company BlueStar so he can break it up into pieces to sell off for a hefty profit.   In a technical sense, he would become an airline CEO, even if he didn’t know a fuselage from a tail fin.

Martin Shkreli is a real-life Gordon Gekko.  Just arrested this week on securities fraud charges, Shkreli, the 32-year-old co-founder of the MSMB Capital Management hedge fund, has been a fixture in the news over the last several months because of his purchase of Turing Pharmaceuticals and the subsequent decision to raise the price of a decades-old anti-parasite drug from $13.50 a pill to $750.

Headlines about Shkreli’s arrest refer to him as a “pharmaceutical company CEO.”  In the strictest sense, that’s true.  In reality, he bears no resemblance to the leaders of the nation’s research-based pharmaceutical companies who invest billions of dollars in the development of new cures and improved treatments.  It’s a gross inaccuracy to paint the entire biopharmaceutical industry with the stain of Shkreli’s profiteering example.

Some are doing exactly that, though, and using the Turing episode as a catalyst to call for greater government price controls on prescription medications.  Here’s an example just this week from the Vox website:

“The story of Martin Shkreli and Daraprim’s giant price increase is, more fundamentally, a story about America’s unique drug pricing policies. We are the only developed nation that lets drugmakers set their own prices — maximizing profits the same way that sellers of chairs, mugs, shoes, or any other seller of manufactured goods would. In Europe, Canada, and Australia, governments view the market for cures as essentially uncompetitive and set the price as part of a bureaucratic process — similar to how electricity or water are priced in regulated US utility markets.”

The analogy is, of course, severely flawed.  The supply of electricity and water is not contingent upon innovation in the same way that new medicines must be developed and constantly improved to combat cancer, heart disease, diabetes and Alzheimer’s, to name just a few chronic illnesses that affect tens of millions of us.  It’s notable that the calls for bureaucratic price controls, using Shkreli as the poster boy for egregious corporate greed, seldom mention the inevitable tradeoffs in the form of fewer resources for medical research.

Yes, the cost and accessibility of medications is a concern and one that should be addressed, but not with so-called solutions that make society choose between greater affordability today versus better health outcomes in the foreseeable future.  As we’ve seen with the price drop on the Hepatitis C cure once other companies developed their own medications to compete with Gilead Pharmaceutical’s Sovaldi, the market is often self-adjusting when it comes to price.  There are other ideas that warrant discussion, such as regulatory reforms to reduce the extraordinary cost and expense involved in moving a new drug from laboratory to patient.

The point is, it makes no more sense to let an outlier like Martin Shkreli drive pharmaceutical pricing policy any more than it would to arrest every financial services executive because Michael Douglas was so believable as Gordon Gekko.

The Proliferation of Progress Generated by Medicare Advantage

December 11, 2015
3:20 pm

This week the Blue Cross Blue Shield Association, representing plans that serve over four million individuals in Medicare Advantage and Medicare Part D prescription drug plans, hosted a congressional briefing to discuss innovations in Medicare Advantage.    Experts shared abundant evidence that Medicare Advantage plans have risen above and beyond traditional Medicare in providing quality healthcare that is cost-effective.

Several case studies were presented that highlighted continuing improvements being made to improve senior health:

  • Care at Home, a service launched by BCBS of Western New York and Landmark Health, offers a team that does not replace the primary care physician, but rather collaborates with the doctors and stays apprised on how patients are faring in their own residences.  Care at Home has enrolled 2,500 seniors since November 2014.  Patients with multiple chronic diseases generate more than seven times the healthcare costs of patients with only one chronic disease.  Medicare Advantage members who have six or more chronic diseases are eligible for Care at Home.  The coordinated care, which includes nurturing and education family caregivers, has, thus far, helped prevent 617 emergency room visits.
  • CareMore Health System, an Anthem company, uses doctors called extensivists to coordinate care for patients with chronic conditions.  They also ensure that there is proper follow up with patients and that protocols are adhered to by all involved in the patients’ care.  Predictive modeling is utilized to determine risk and practice early intervention, helping to keep costs low.  An average day at CareMore includes visits to homes for social and behavioral support, reading results from monitors in patients’ homes, following up after discharge, and providing rides for patients who have no form of transportation to reach points of care.
  • BCBS of Rhode Island identified pharmaceutical management as a way to lower healthcare costs and improve health outcomes.  The patient- centered pharmacy program serves members with multiple chronic conditions who take at least four medications and spend over $3,000 on drugs.  The medication therapy management includes comprehensive medication reviews, prescriber consultations, counseling for adherence and education, and monitoring to ensure good adherence habits are established.  In just the first three quarters of 2015, 8,632 members were served with an estimated savings of $2.8 million.

These are just a few examples demonstrating how innovation in Medicare Advantage has protected patients from high out-of-pocket costs, maintained quality care, and kept consumer satisfaction levels high.  These individual successes, and the others like them, need to be kept in mind by policymakers when they debate future support for the Medicare Advantage program.  The best practices and outcomes achieved by these pioneers in healthcare should be shared and encouraged so they can be replicated across the country.

The Ways and Means of Strengthening Medicare

November 06, 2015
12:33 pm

This week, U.S. Representative Kevin Brady (R-TX) was elected by his colleagues to become the new chairman of the House Ways and Means Committee, succeeding new House Speaker Paul Ryan (R-WI).

For those of us who are concerned about the future of the Medicare program and believe its sustainability and fiscal health for future generations hinges on structural modernization, the Brady ascension is a promising development.

Months before the nation even knew there would be a shakeup in the House leadership, Congressman Brady – then chair of the Ways and Means health subcommittee – did an interview with National Journal in which he made clear his intention to begin developing Medicare modernization legislation with an eye toward action in 2017 with a new President and Congress.

Like Ryan, Brady said he supports an improved Medicare in which private plans would compete on the basis of value, as is happening today with the successful Medicare Advantage and Medicare Part D prescription drug programs.  As he put it, this is a “step toward saving Medicare in the long term, which is offering better and smarter personalized Medicare options for seniors.”

(As this debate begins, by the way, Brady will have evidentiary support provided by the Congressional Budget Office.  A CBO report in late 2013 found that a modernized Medicare based on consumer choice and private sector competition would reduce federal outlays AND beneficiary out-of-pocket spending.)

The Brady leadership of Ways and Means will be interesting to watch and an important policymaking period in terms of strengthening our nation’s healthcare infrastructure.  While the new Chairman lays his groundwork, this issue will also be at the center of the 2016 campaigns.  As the Washington Post reported this week, there is a divide in the Republican party with leaders like Ryan and Brady calling for Medicare modernization and some candidates, notably Donald Trump and Mike Huckabee, insisting that the program must be left alone.

It’s an important discussion to have.  In the end, though, we can’t ignore the Medicare Trustees’ judgment that the program will become financially insolvent in just 15 years.  Policymaking on big, complex issues is never a rapid process.  That’s why we need to begin now and we wish Chairman Brady a strong wind at his back as he takes on this important and necessary endeavor.