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Medicare Advantage and Lessons for Healthcare’s Future

February 05, 2015
3:08 pm

(The following post is co-authored by Mary Grealy, President of the Healthcare Leadership Council, and Don Crane, President and CEO of CAPG)

As healthcare policymakers continue to seek to incentivize value in Medicare, the successes of the Medicare Advantage program cannot be ignored.

The Healthcare Leadership Council and CAPG are strong supporters of Medicare Advantage, believing that beneficiaries will gravitate toward health coverage plans that provide them with high-quality healthcare at the most affordable costs.   A recent column in Forbes highlighted how the growing preponderance of evidence shows this to be the case, pointing out that the number of beneficiaries in Medicare Advantage plans has now hit 17 million and the monthly growth rate in new enrollments is almost double what it was two years ago.  As Dr. Scott Gottlieb wrote in the column, “(Medicare Advantage) plans offer a more comprehensive set of benefits than traditional Medicare, often plugging gaps in coverage or helping to offset out-of-pocket costs.  Seniors also prefer a network that plans offer, and their ease of use.”

(Of note, the Healthcare Leadership Council will be sponsoring a Capitol Hill briefing on Medicare Advantage on Friday, February 6, featuring experts from SCAN Health Plan, MemorialCare Health System and The Latino Coalition.  The briefing is at noon, ET and interested individuals can attend by contacting Amanda Uherek at auherek@hlc.org.)

The impact on the healthcare system as a whole from the growing popularity of private Medicare Advantage plans is a positive one.  A study published in Health Affairs examined the rate at which different types of Medicare beneficiaries accessed preventive care services.  Just over one in four enrolled in traditional Medicare fee-for-service had annual preventive doctor visits.  For those in private Medicare plans, however, was 44 percent.  The more we can increase adherence to preventive care, the more we can reduce costs associated with hospitalizations, emergency room visits and acute care services.

Given the evidence, it seems odd that there is still controversy surrounding Medicare Advantage.  This is the case, though.  Despite the popularity of this program with seniors, Medicare Advantage has been the subject of repeated year over year cuts.  These cuts have come from a variety of sources – legislative and regulatory – and more cuts are on the horizon.

The facts are clear.  Medicare Advantage is growing in popularity among seniors who choose private plan options over traditional fee-for-service coverage.  And, most importantly, Medicare Advantage is getting results in terms of keeping people healthier and reducing the need for more expensive healthcare interventions.  There are answers here that can help address the challenges facing our nation’s healthcare system.

Important Movement on Data Sharing

February 02, 2015
10:36 am

Recently the Institute of Medicine released a report on sharing clinical trial data.  This report comes at an opportune time, when talk of health information technology, interoperability and big data are at the forefront of health policy conversations.  IOM discusses using data collected in trials to maximize knowledge gained and avoid duplicative trials.  The rationale is that this would create greater efficiency among research, and assist in more quickly determining best practices and improving patient care.  Interestingly, the IOM report was followed last week by an announcement by HHS and the Office of the National Coordinator of Health Information Technology regarding the creation of a new roadmap aimed at creating an interoperable structure for improved data sharing across the entire healthcare system.

The Healthcare Leadership Council has been increasingly involved with its members in discussing the future of data sharing, and how it will have an effect on all stakeholders in healthcare.  A number of HLC members have joined innovative data sharing initiatives.  As mentioned in the Wall Street Journal, a data-sharing website clinicalstudydatarequest.com, launched by GlaxoSmithKline, has been joined by several HLC members- Boehringer Ingelheim, Eli Lilly, Novartis, Sanofi and Takeda Pharmaceuticals.  Researchers can request anonymised data from clinical studies to further their research.

Also highlighted in the Wall Street Journal piece is Johnson & Johnson, which is providing the Yale Open Data Access (YODA) Project with clinical trial data for its medicine, medical devices and diagnostics tools.  Another HLC member, Medtronic, is engaged in the YODA project as well. Medtronic was the first company to contract with YODA, and has a great interest in seeing what fruits open science and transparency will bring.  These collaborations between educational institutions and healthcare companies present tremendous potential for healthcare improvement.

The IOM report also discusses barriers to data sharing, such as infrastructure, technology, workforce and sustainability, which certainly need to be taken into consideration.  Collaboration across the sectors is vital for creating the perfect environment in which to exchange data efficiently and advance medical knowledge.  Precise policies establishing productive and principled frameworks for these collaborations will help unlock the true potential of data analysis to elevate healthcare quality and cost-effectiveness.

“They Want to See The Evidence”

January 28, 2015
5:03 pm

I guess it shouldn’t be surprising that a television news program would give a complex topic like the nation’s healthcare system a treatment that could be described as, well, glib.   That occurred on CBS’s “60 Minutes” earlier this month when a correspondent suggested that healthcare institutions are raising prices “willy-nilly.”  That description, besides being particularly nonilluminating, falls far short of explaining the evolving relationship between healthcare providers and the innovative companies creating medical technologies.  The fact is, there is an intensifying effort on the part of both parties in this buyer-seller interaction to demonstrate how medical devices can lead to better patient outcomes, lower costs and, subsequently, greater value.   I want to share an excellent interview on the topic that Edwards Lifesciences Chairman and CEO Michael Mussallem (a Healthcare Leadership Council member) in which he describes how his company and his hospital customers “make sure that the money they’re spending for our critical supplies helps their clinicians achieve their goals.”

Modern Healthcare: How has provider consolidation affected Edwards’ growth strategy?

Michael Mussallem: Because our products are so important clinically, our primary customer would have been physicians. More and more, there’s been involvement from economic buyers that want to make sure they understand the economic value of our products along with the clinical value. That’s probably the single biggest change. We don’t necessarily feel like we need to be large, but we feel we need to be really good. We need to be trusted. We need to show up with evidence. And we need to support providers in providing great healthcare for patients.

MH: How has Edwards changed the way it sells the value of its products to health system administrators?

Mussallem: We’ve gotten a clear message that administrators want to hear from clinicians that our products offer high clinical value. They want to see the evidence. So we have in a very organized fashion pulled together all the clinical evidence that talks about, for example, the nearly 30 years of data on the distinguished performance of Edwards’ heart valves. We also established a health economics group, which helps us assemble the economic evidence supporting Edwards’ products. That group also provides direct assistance to providers on how they can improve the value they offer to their patients.

MH: What are you doing to offset the pricing pressure associated with provider consolidation?

Mussallem: Hospital systems are aggregating their volumes and are becoming far more sophisticated in the way they purchase. We try and live up to that sophistication by being able to address all the questions that they have. Our experience is they really want to deliver great value to their patients, and they want to make sure that the money that they’re spending for our critical supplies helps their clinicians achieve their goal. We’re happy to be able to do that. It means we’re required to be more sophisticated and bring more evidence than we ever have in the past.

MH: Has that changed the way you’re designing clinical trials?

Mussallem : We’re most known for our innovations in transcatheter heart valves, which are valves that can be replaced without open heart surgery. In large randomized trials, not only are we collecting clinical data on the impact on mortality and the other complications, we’re also collecting quality-of-life data, health economic data. These data show how cost-effective this therapy is compared to past therapies or other alternatives.

MH: How receptive are hospital administrators to technologies you’re developing or selling that help reduce cost?

Mussallem: It depends. It certainly helps when we have clinicians who are passionate, who understand what kind of opportunities exist and have good, open dialogues with their administrators. We’re finding more receptivity among administrators than we’ve ever found in the past as they try and solve problems that weren’t easy to solve when you operate a hospital system more in silos. But now, when you look at it as an entire patient encounter—how much value do we deliver for what cost—it becomes a conversation that high-level administrators are having with us more often.

MH: How are you talking to administrators about technology like your ClearSight noninvasive technology, which can add cost per patient but may save money in the long run?

Mussallem: The theme of what we’re trying to help hospitals with is what we call enhanced surgical recovery. The idea is if you achieve proper fluid balance before a surgery, you can reduce complications and shorten length of stay, and there’s a tremendous amount of data that supports that.

Our new ClearSight technology allows a noninvasive way of collecting that sophisticated information. With an investment of about $300 upfront, you are able to save literally thousands on the back end and improve patient satisfaction in the process. This was something the British National Health Service implemented, and we’re trying to help adoption in the U.S. today.

MH: Are hospitals willing to spend more money on a technology like this?

Mussallem: I think hospitals are getting it. In the past, for example, there would just be an anesthesia budget, and they would just see the increased cost in that budget but not see the reduced cost from the shorter length of stay or the reduced complications. Now, there are administrators for whole service lines who are taking a broader look at hospital economics, so they are very interested in this kind of approach.

MH: Edwards announced in December that it invested in a company called CardioKinetix. Do you anticipate that the company will make other deals like this?

Mussallem: Our strategy continues to be very focused, with 95% of the products we sell in the No. 1 position around the world. So we don’t try and be very large and diversified. We try to be excellent at what we do, and we’re totally focused on structural heart disease and critical-care monitoring. The CardioKinetix investment is a great example of a new therapy that has some tremendous promise for heart failure patients that have few options. They’re in a randomized clinical trial, and we won’t know the results for a couple of years. But it’s a perfect example of the kind of thing that Edwards likes to invest in—early stage potential breakthrough technologies that change medical practice and produce much better answers for patients.

MH: What’s your expectation for Congress repealing the ACA’s medical-device tax?

Mussallem: We’re pleased that there seems to be bipartisan support for re-examining the medical-device tax, and we think the odds of that making progress have improved. It is going to take a bipartisan effort. It’s probably going to take support from the White House. We’re cautiously optimistic that we will have some progress this year.

The Employment Aspect of the Medicaid Debate

January 20, 2015
1:00 pm

There has been plenty of discussion about the health coverage gap between the states that have expanded Medicaid eligibility and the 23 states that have, thus far, declined to do so. As a Kaiser Family Foundation study last December pointed out, about four million Americans living in states that have not altered their Medicaid thresholds have incomes that are above Medicaid eligibility but below the lower limit for tax credits to use for purchasing insurance in the health exchanges.

What has received less attention is the impact of the Medicaid debate on job creation. An article this week in the Dayton Daily News noted that about 7,000 new positions have been created in hospitals, physicians’ offices and other healthcare facilities in the first full year of Medicaid expansion in Ohio, an increase over the previous year’s job growth in the healthcare sector.

This is consistent with a Missouri study released last year which found that health sector job creation growth rates were significantly higher (2.1 percent versus 0.7 percent) in states that had expanded Medicaid eligibility versus those that haven’t.

The Healthcare Leadership Council has long maintained that expanding Medicaid is not the ideal tool, given its relatively low reimbursement rates and the number of physicians that are not accepting new Medicaid patients, for reducing the uninsured population. Making more individuals eligible for Medicaid, under the parameters of the Affordable Care Act, is preferable, though, to asking healthcare providers to bear larger uncompensated care burdens at a time when they are already absorbing ACA payment cuts.

We continue to urge the Obama Administration to be flexible toward the innovative steps a number of states are taking to expand coverage to more low-income citizens.

Washington’s Inaccurate Way with Words

December 11, 2014
4:19 pm

In assembling the so-called “CRomnibus” legislation that will set federal government spending levels until September 2015, U.S. House of Representatives appropriators have included language in the measure that would significantly affect a provision in the Affordable Care Act intended to maintain health insurance stability and affordability.

Some lawmakers want to curb funding for the aspect of the ACA known as risk corridors, saying it represents a taxpayer “bailout” for health insurers.

One would have to do some historical digging to see if the word “bailout” has ever been used quite so incorrectly. In no way whatsoever are the risk corridor provisions being attacked in the “CRomnibus” a handout to health insurance companies. Rather, they are valuable protections for coverage-purchasing consumers.

Here’s why risk corridors are so necessary. For the health insurance industry, the implementation of the Affordable Care Act was essentially a leap into the great unknown. With the new law barring medical underwriting – basing insurance premiums, in part, on a consumer’s health status – health insurers simply did not know whether the population enrolling in plans through the ACA coverage exchanges would be less healthy and prone to using more, and more expensive, healthcare services.

Risk corridors are simply temporary (they run through 2016) protections against significant unforeseen financial losses until the ACA marketplace can be better defined and understood. Without these protections, consumers face the danger of rapidly escalating costs. Risk corridors bring stability to a new, uncharted health insurance environment.

Oh, by the way, this tool has been used quite effectively in the Medicare Part D prescription drug program – without a whisper of political controversy.

Conservative analyst Yevgeniy Feyman described the importance of risk corridors well in a Forbes column, noting that “Risk adjustment mechanisms get you the buy-in of insurers, but they also help keep premiums at manageable levels while insurers develop enough experience to properly price plans on their own. This helps encourage people to enroll in these plans, which in turn helps insurers develop the necessary pricing experience – resulting in a virtuous cycle.”

It should also be noted that the lawmakers and political advocates who want to take an ax to the risk corridors are doing so after health insurers have already set premium rates for 2015. They want to, in essence, change the rules in the middle of the game.

The losers, though, wouldn’t be the health insurance companies or the Obama administration. Rather, consumers would be taking a direct hit to their checking accounts.

And if this ill-conceived action takes effect and millions of American households suffer financially for it, who exactly is going to bail them out?