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Quantifying the Medicare Advantage advantage

July 25, 2018
2:51 pm

In the 15 years since its inception, the increase in popularity of Medicare Advantage (MA) – health coverage provided by private plans in contrast to traditional fee-for-service (FFS) Medicare – has been undeniable.  Roughly half of all Medicare-eligible seniors are enrolled in Medicare Advantage plan and that proportion keeps rising.

Now there is a new addition to the growing body of evidence that MA plans are not only serving their enrollees well, but is bringing greater overall value to the Medicare program than that generated by the FFS approach.

A newly-released study by Avalere Health, Medicare Advantage Achieves Better Health Outcomes and Lower Costs for Beneficiaries with Chronic Conditions Compared to Fee-for-Service Medicare, finds that Medicare Advantage is outperforming traditional FFS Medicare with higher rates of preventive screenings, fewer avoidable hospitalizations, and fewer emergency room visits.  In other words, healthier patients and significant dollar savings.

Overall, the Avalere study found that MA beneficiaries had 23 percent fewer emergency stays and 33 percent fewer emergency room visits than their peers in FFS coverage.  This wasn’t the result of MA plans enrolling healthier individuals at the outset.  Rather, the study found that a greater percentage of MA beneficiaries were in clinical and social risk categories that traditionally drive up costs in FFS Medicare.

Avalere found that MA outperformed FFS on a range of cost, utilization, and outcome metrics in caring for individuals with one or more chronic health conditions.  Among patients with diabetes, for example, those enrolled in MA experienced 73 percent fewer serious clinical complications than FFS beneficiaries.  And patients dually eligible for Medicare and Medicaid – who generally have more complicated and serious health conditions – had 49 percent fewer hospital visits and a 17 percent lower average-cost-per-beneficiary in MA plans.

Former Congresswoman Allyson Schwartz, president and CEO of the Better Medicare Alliance (of which the Healthcare Leadership Council is a member) said “this study adds to the growing body of evidence showing the ability of Medicare Advantage to align incentives to better manage the care for a high-need population with multiple chronic conditions.”  These patients, of course, account for the most significant portion of our country’s healthcare spending.

This study adds fuel to the argument that we can enhance healthcare quality and better contain spending through improved patient health when healthcare entities compete on the basis of value.

Action Needed for Market Stability, Access to Health Coverage

July 18, 2018
11:24 am

There is a consensus in this country that people who are struggling with illnesses and have a greater need for healthcare services should not be prevented from acquiring health insurance.  Recent actions at the federal level, though, need to be addressed in order for that ideal to be met.

Risk adjustment payments provide financial stability to insurance providers that provide coverage to relatively high numbers of sicker, higher-cost consumers.  Without those payments, premiums would become unaffordable for millions of Americans who buy their coverage through small businesses or on their own in the individual insurance market.

And that brings us to the current dilemma.

A federal district court judge ruled in February that the Department of Health and Human Service’s methodology for calculating risk adjustment payments was flawed and impermissible.  Subsequently, on July 7, the Centers for Medicare and Medicaid Services (CMS) announced that payments under the risk adjustment program, including amounts already owed for the 2017 benefit year, would be suspended.

This is an issue that carries extraordinary ramifications.  It will create more market instability – at a time in which we need just the opposite – and the potential for reduced coverage options for those who have the greatest need for healthcare access.  Further, it could result in increased costs to taxpayers if the federal government has to increase premium subsidies.

An analysis by Change Healthcare, a major technology and analytics firm, found that the individual health insurance market attracts an extremely wide range of enrollees in terms of healthcare utilization.  In fact, according to Change, the health plans attracting the sickest patients have health costs at least 450 percent higher than the plans with the healthiest clientele.  Thus, the need for risk adjustment payments.

CMS has asked the district court judge to reconsider his ruling.  We hope he will.  Americans with serious healthcare needs should have affordable coverage.

A Public Health Crisis Requires a Roadmap of Solutions

July 12, 2018
2:50 pm

It’s indisputable that the opioid addiction crisis with which America is currently grappling is one of historic magnitude.  We’re losing more than 115 people per day from opioid overdoses.  Families and communities are being devastated and public resources – healthcare, social services, law enforcement – are being stretched thin.

This is a serious problem, but it is not an insolvable one.  Recently, the Healthcare Leadership Council, working with over 70 organizations from the healthcare, employer, patient advocacy, and addiction treatment sectors, released a “Roadmap for Action” consisting of over 30 achievable, high-impact solutions to address opioid misuse and addiction.  The Roadmap is the product of several weeks of deliberations, idea sharing and consensus building and represents a collaboration of unprecedented breadth to address a national public health crisis.

The Roadmap identifies five key priorities as essential, including:

•    Improving healthcare system approaches to pain management
•    Improving current approaches to prevent opioid misuse
•    Expanding access to evidence-based substance use disorder treatment and behavioral health services
•    Promoting improved care coordination through data access and analytics
•    Developing sustainable payment systems that support coordination and quality care

This package of solution addresses both regulatory and legislative priorities but, just as importantly, it includes actions that healthcare leaders should take.  Winning this battle will require a public-private effort.  And the recommendations we’re offering, some of which are detailed in the following paragraphs, reflect this broad-based strategy.

Health sector leaders have a responsibility to improve access to evidence-based, non-opioid and non-pharmacological pain management therapies. (It’s vital to recognize that, in taking on the opioid crisis, we cannot place obstacles between millions of Americans suffering from chronic and acute pain and the treatments they need.) Developing and evaluating these treatments will require long-term evidence generation and data collection, but their proliferation will cut costs and improve outcomes for patients in the long run.

We must also focus on improving data-driven coordinated care, and in order to do this we must create access to real-time prescribing data within the clinician workflow. Improving critical data access must also include legislative action to change a law known as 42 CFR Part 2 to allow confidential information sharing on SUD diagnosis history while still adhering to the Health Insurance Portability and Accountability Act (HIPAA). It is important that patients’ privacy be protected, but it is also vital that care providers understand their patients’ substance abuse histories if they are to provide them with the well-informed care that they need.

And we must develop sustainable payment frameworks that prioritize quality, coordinated, value-based care connecting patients with the medical resources they need, whether that be a pharmacist, primary care provider, nurse practitioner, licensed addiction treatment professional, or certified peer recovery specialist.  In fact, we must engage the full community of medical professionals in coordinated care to treat patients struggling with substance use disorder.

This is just a sample of the comprehensive, multi-faceted plan we’re going to be advancing.  No single organization, regulatory agency or legislative body can solve this crisis by themselves.  Working together, though, we have the ability to save lives and prevent tragedies.  The time for bold and decisive action is now.

An Expert Look at 2018 Healthcare Trends and Their Potential Impact

February 08, 2018
6:05 pm

President and CEO of Premier healthcare alliance, Susan DeVore, discusses her predictions of what 2018 will bring in a Health Affairs article.  Ms. DeVore, a member and former chair of the Healthcare Leadership Council, shares her optimism regarding the commitment to innovation and competition that is driving the industry towards value-based care and the increased utilization of actionable data.  Her assessment of current trends focuses on how growth and changes in all healthcare sectors have an impact on providers, and further solidifies the importance of the work being done to improve access to care as well as outcomes.

The article is copied below and the original publication can be found here.


What To Watch In Health Care In 2018: Six Key Trends

At the start of 2018, the health care industry is on the cusp of more significant change. The GOP Congress has moved health care away from the center of their public policy agenda, creating more certainty and a clearer view. Of course greater certainty doesn’t mean total certainty, especially as market trends and business realities continue to shift. As providers move into 2018, we still feel confident in making some predictions as to what the future holds.

Clearer Skies Ahead, Pockets Of Turbulence

Uncertainty is expected during any major political transition, but it reached an all-time high for health care leaders in 2017. The fog has largely cleared, and 2018 will be a year of health care leaders starting to place their bets. Here’s what health care leaders see.

Instead of a sweeping set of legislative changes to the Affordable Care Act, the elimination of the individual insurance mandate is now the symbolic emblem of “repeal.” While some project that the mandate’s demise will lead to a decline in the private insurance market, it remains to be seen how the elimination will ultimately play out given the mandate’s relatively weak incentive for individuals to purchase coverage. The strong economy is causing employers to offer health coverage to compete for talent, and the probable enactment of the exchange market stabilization legislation should serve to calm the exchange market, potentially lowering premiums. Going forward, focusing on states will likely become the “replace” strategy for Republicans in 2018, with a larger number of waivers granted to experiment with programs, giving states greater control and reason to consider expanding Medicaid coverage. Health care leaders are viewing 2018 as a year of greater insurance market stability, with the number of insured Americans holding steady or possibly increasing over the latest numbers.

There is also more certainty around the movement to value-based care. Last year’s raging health care debate caused health care leaders to question the movement to alternative payment models (APMs). That momentum, however, is returning, and the experienced and more transparent leadership in the Department of Health and Human Services (HHS) by Alex Azar should provide significant reassurance to providers on both insurance market certainty and the movement to value-based care.

Health care leaders still face major financial threats. Bad debt continues to grow, reaching $38.3 billion in large part due to the rise of high-deductible health plans. Hospitals have taken $148 billion in Medicare payment cutssince 2010, and these cuts are scheduled to continue. Some states are cutting Medicaid reimbursement. 82 rural hospitals, as well as many urban hospitals, have closed since 2010. This year’s $1.6 billion cut in 340B payments will crush some of the most financially challenged hospitals treating the most vulnerable patient populations. Hospitals continue to be disadvantaged in the design of many of the Centers for Medicare and Medicaid Service (CMS)’s pay for performance and alternative payment models. As a result, hospital margins remain in low single digits, and the Medicare Payment Advisory Commission projects that the Medicare margin will fall to negative 11 percent in 2018.

Attention, Value Shoppers: The New Health Care Market

2018 will be a year of a renewed focus by CMS on paying for value, particularly with the continued ramp up of the Medicare Access and CHIP Reauthorization Act of 2015 that incents clinicians to take risk, and new APMs that create attractive alternatives for fence sitting providers.

Perhaps more notable today are private sector actions to expand and accelerate the value-based payment movement and disrupt the status quo. Given the clear signals, health care leaders are focused on gaining scale and/or vertical integration to position themselves favorably for an expansion of value-based care. Unlike past merger efforts to command greater market power, today’s consolidation is often more driven by the goal to integrate care delivery and achieve savings.

There is a new form of competition emerging. Providers and payers are organizing themselves into vertically-integrated, high-value care and financing networks. Health care leaders are actively exploring commercial, employer, and Medicare Advantage risk-based programs through either ownership models or partnerships. The most recent mega-deals by CVS and Aetna, Humana and Kindred, Ascension Health and Providence Health, Aurora Health Care and Advocate Health Care, as well as the ongoing provider acquisitions by insurance goliath UnitedHealthcare, all send a clear message: insurers, physician groups, health systems, and even retail organizations are each seeking to compete as high value care and financing networks.

The CVS/Aetna merger, for instance, is based on a strategy that they will be able to disrupt the system with a retail pharmacy and e-enabled high value provider network. The Advocate/Aurora merger is seeking to achieve regional scale by combining two of the nation’s leading clinically integrated physician networks, hospitals and other provider settings, and pharmacy capabilities in the greater Chicago-Milwaukee region. UnitedHealthcare appears to acquire more physician practices each day. We anticipate more mergers and acquisitions in 2018. As the merger and acquisition activity heats up, the question remains: Who will be best at capturing and engaging patients and customers?

Washington must be careful not to undermine this movement by confusing integration to deliver efficient, high-quality care with consolidation to reduce competition. This emerging model needs to be supported by continuing the movement by public payers to APMs and careful thought by anti-trust regulators.

Episode 2018: The Consumer Strikes Back

For providers to succeed as stewards of new care delivery networks, they need to play the game differently. This means a number of new capabilities, including creating clinically integrated physician networks, collecting and integrating data, and applying analytics to find cost, work flow, and quality improvement opportunities. It also means providing more outpatient clinics and offering additional access points, establishing preferred post-acute care networks, creating new incentive and payment arrangements, building physician measurement systems to assess performance, and negotiating successful alternative payment models with public and private payers.

To ultimately succeed, however, health leaders realize that they need to, above all else, excel at attracting and engaging patients, families, caregivers, and consumers. 2018 will be the year of focus on patient capture and engagement. Providers will work with their patients, families, and caregivers to develop approaches so they more actively manage their health and health care.

This means engaging the patient in their health and health care outcomes from the beginning. This involves providing prevention, diagnosis, and monitoring services that support the total care experience. Done well, it creates stickiness to a high value care network. Organizations are focusing more on this from a human resources training and measurement vantage point. They are also establishing patient portals, providing wearable devices, implementing patient educational programs, screenings, and pushing targeted materials to patients based on their current and anticipated needs.

For example, one of our members is providing home monitoring tools as well as tablets for video consults to help patients meet their health goals. The program focuses on total patient care from prevention to recovery. Few people leave the program, and the organization has reduced overall costs by 34 percent per year and hospitalizations by nearly 50 percent.

Financial Imperative, Meet Actionable Data

A certainty for health system leaders is the need to improve productivity and efficiency. The approach, however, is going beyond the past’s focus on reducing head count and cost of supplies.

After years of avoiding care efficiency and standardization initiatives due to the difficulty of persuading clinicians to embrace them, health care leaders now have a larger and more urgent financial imperative to identify and isolate wasteful practices, cost outliers, and the root causes for the inefficiencies. The keys to success are a strong case for change and a prioritization of efficiencies that yield both cost and quality improvements. This is, therefore, all about data and analytics.

Recent cost containment efforts we have pursued with our members provides a sense of scale.  These health care systems range in size from 6 to 19 hospitals and their care transformation work has achieved savings ranging from $180 to $250 million over two years. Another specific example is a health system member of ours that realized $13 million in savings by driving care process standardization across their departments that touch just ICU and blood utilization. In addition to the savings they also improved their quality scores and reduced patient complications and readmissions. Premier data found a lot of opportunity for other hospitals around ICU stays, potentially reducing expensive ICU stays by 200,000 days across 786 hospitals. This is precisely where providers are now focusing their efforts.

2018 will be the year of delivering efficient, highly reliable care. With today’s financial imperative and actionable data, health care leaders are achieving a new level of efficiency and productivity.

America’s Other Drug Problems: Cost And Competition

Rising drug prices continue to be a dominant concern to health care leaders. Pharmaceutical innovation holds great promise for helping providers achieve their mission to improve and sustain patient lives, but it’s also a Catch-22. As providers are increasingly assuming accountability for the health outcomes of a population, six figure drug price tags and unpredictable price increases threaten financial planning and cool the enthusiasm for taking risk. 2018 will be a year of increased legislative and regulatory policymaking to foster increased drug market competition.

The FDA has and will continue to step up its game with new initiatives designed to unleash more competition that can moderate drug price trends. These include encouraging new market entrants to rapidly start developing generics in classes where there is no competition, streamlining the generic drug approval process, promoting biosimilars and taking steps to prevent branded drug makers from exploiting programs like the Risk Evaluation and Mitigation Strategy and citizens’ petitions.

Congress will also be getting into the act this year. We expect the Fair Access for Safe and Timely (FAST) Generics Act and the Creating, Restoring Equal Access to Equivalent Samples (CREATES) Act, among other legislation, will help eliminate loopholes that can slow the introductions of competitor products.

Finally, manufacturers are developing new ways to demonstrate product return on investment in response to provider demands. There is increasing use of real-world evidence to demonstrate value as well as use of outcomes measures to quantify results. While value-based contracting is still in the early stages, manufacturers are looking to measure and launch these programs.

Emerging And Converging Digital Health

In every single aspect of health care, the digital revolution is making itself felt: new apps are getting patients more engaged; health sensors and wearables are creating terabytes of new, granular data, and machine learning, natural language processing, and artificial intelligence techniques and tools are all emerging new technologies. What’s more, precision medicine, telehealth, blockchain technology, and new personalized digital devices are being infused into all parts of the workflow and consumer experience.

The biggest impediment to effective use of data continues to be the lack of interoperability, especially among the electronic health records, which impedes care coordination and efficiency. While providers are waiting on HHS to implement the interoperability provisions of the 21st Century Cures Act, they are wasting no time in building data warehouses that assemble the multiple sources of data necessary to provide quality care and make informed decisions across the continuum of care. Growth of data warehouse systems and data analytics is one of the fastest growing technology areas as health systems seek actionable information to help them manage the total cost of care at a site and across sites of care.

Consequently, there is a growing and acute need for a trained workforce able to deploy, implement, and maintain health information technologies and systems and increasingly complex medical devices.  Today’s electronically connected, data-and evidence-driven health care system requires staff with data science and data analysis skills. These skills are essential in gathering, interpreting, protecting, and analyzing large and complex data sets. Data management, cyber security, and governance is essential to precision medicine, value-based care and payment and population health.

These are the big trends we see impacting health care providers in 2018.

We are encouraged by the outlook. We are hopeful Congress and the Trump administration will encourage and not impede this progress to high value networks, increased competition among pharmaceutical manufacturers, and increased access to health information.

Calls to Repeal the Independent Payment Advisory Board Persist

October 04, 2017
1:08 pm

Amidst the uncertain healthcare environment Americans face, there is a threat that has remained constant: the implementation of the Independent Payment Advisory Board (IPAB).  IPAB, once triggered, will impose significant cuts in the Medicare program that will affect beneficiaries’ access to healthcare. The efforts to repeal IPAB have involved almost 800 organizations across the United States that recognize the dangers of having a single entity with such unprecedented and unchecked authority.

One of the partner organizations taking a stand against this board is the Better Medicare Alliance (BMA).  The BMA mission is to create a healthy future for the nation’s seniors, and ensure innovative, quality healthcare.  Allyson P. Schwartz, President and Chief Executive Officer of BMA and former U.S. Representative from Pennsylvania, wrote an op-ed in The Hill that highlights the bipartisan support of IPAB repeal.

The op-ed is shared below, and the link is provided here.


Congress needs to repeal the Independent Payment Advisory Board

By Former Rep. Allyson Y. Schwartz (D-Pa.), opinion contributor

Now is a particularly difficult time to enter into any debate on health care in our country without the expectation of strong partisan divide. However, there is an opportunity that has bipartisan support and a need for action right now.

When I served in Congress, I was actively involved in the development and passage of the Affordable Care Act (ACA). I fought to be sure it met a number of goals, one of which was to reduce costs in health care through improving access to coverage, focusing on primary care, early treatment of disease, and numerous ways to encourage care to more cost effective for government and affordable for consumers.

I am proud of the important work that is the result, bringing changes right now across the country in doctors offices, hospitals, and community care to improve quality and bring down costs in Medicare.

However, not everyone was convinced that all the efforts underway now would happen or happen fast enough. To be sure costs could not grow faster than inflation, the Senate added a provision in the ACA hat many of us thought, even at the time, was the wrong way to bring down costs.

In fact, I was one of the first Democrats to publicly oppose the creation of what is called the Independent Payment Advisory Board (IPAB) and I supported Republican legislation to repeal it. IPAB repeal is now a bipartisan effort, but it has not been taken up or passed. And time is running out on a chance to stop it.

Here is how IPAB is supposed to work and why it is a bad idea.

IPAB is a board appointed by the president, with the sole authority and responsibility to cut Medicare. They are accountable to no one. If costs in Medicare rise above a certain level of inflation, cuts to bring those costs have to be made and implemented in one year. The law also says that if the President does not appoint this Board, then the Secretary of Health and Human Services has the sole discretion to make these cuts. New revenues or other actions to cover costs are not an option.

Why is this a problem for Medicare and the 55 million beneficiaries who rely on it?

Neither IPAB nor the Secretary of HHS is accountable to the voters. Given the importance of Medicare and the potential impact, our elected representatives should be involved in making this kind of major decision about Medicare. Second, the cuts have to be made in all in one year. Estimates of potentially as much as $1 billion in cuts in 2019 would mean everyone could be affected. Third, there is no requirement that the cuts be done in a way that improves care or targets waste or inefficiencies. If these cuts are across-the-board cuts, they cut important services including new innovations happening to reduce costs in the right way.

While beneficiaries are not supposed to be hurt, there could be cuts to payment to doctors or to innovative programs like telemedicine, nurse care managers, or care in the home —all of which could have a negative impact on Medicare beneficiaries.

This is not only unwise, it is unnecessary. Medicare is in the process of transitioning from the outdated and inefficient fee-for-service payment structure to one that pays for value. New payment systems are underway that focus on high-value treatments, therapies, and interventions that promote better outcomes. We should be doing all we can to drive these positive changes in Medicare, particularly for those with chronic conditions.

The success of this kind of care is evident in the achievements in Medicare Advantage, which is a public-private partnership that is driving innovations and tailored services for millions of beneficiaries through care coordination, supplemental benefits, and patient engagement.

IPAB won’t help any of this important work and is potentially destructive both to these positive efforts and to Medicare.

Congress needs to act and repeal IPAB this year.

I am proud to have built a strong bipartisan consensus on Capitol Hill to oppose IPAB. Now, as I work to strengthen the innovations in payment and care delivery that bring the promise of better, cost effective care for Medicare beneficiaries, I ask Republicans and Democrats to act on their bipartisan agreement that IPAB should not be implemented. Millions of Medicare beneficiaries will be grateful that you took action to stop this harmful and unnecessary idea from being a reality.

Allyson P. Schwartz is President and Chief Executive Officer of the Better Medicare Alliance and is a former U.S. Representative from Pennsylvania.