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The Congressional Budget Debate and Its Potential Impact on American Seniors

March 25, 2015
2:51 pm

This is the time of year in which the President, the U.S. Senate and House engage in a debate over the federal budget for the coming fiscal year.  This is not so much a discussion about dollar figures as it is about the priorities and values we embrace as a nation.

As this debate unfolds, one of those priorities that must be protected is the health of our nation’s seniors.

This week, the U.S. Senate is considering its fiscal year 2016 budget and there are rumblings that it may include amendments that target the Medicare Part D prescription drug program.  Specifically, there are some Senators and interest groups that would like to enable federal government interference in the private sector drug pricing negotiations that have, since Part D’s inception, kept beneficiary costs affordable and saved money for American taxpayers.  Bringing the federal bureaucracy into a process where it is not needed – and which the law that created the Part D program specifically forbids – could raise prescription drug costs and reduce seniors’ access to the medications they need.

To monitor this possible legislation and other issues affecting seniors’ access to prescription drugs, I refer you to the Seniors Speak Out Facebook page, which serves as an online resource hub for developing information on Medicare Part D.  On this site, individuals can also send a letter directly to their U.S. Senators to encourage that affordable Medicare drug coverage should be protected, not threatened.

The federal budget process is supposed to reaffirm the policies and programs that reflect what this nation holds dear.  Undermining Medicare prescription drug coverage would do exactly the opposite.

The Lasting Resonance of a Summit on Health Care Value

March 18, 2015
11:41 am

On March 2, the Healthcare Leadership Council, as part of its National Dialogue for Healthcare Innovation (NDHI) initiative, brought together over 70 leaders from organizations and institutions that design, implement and are affected by the U.S. healthcare system.  The purpose was to clearly define what constitutes value in healthcare and to begin crafting a pathway that will allow patients and consumers access to life-changing healthcare innovations within a structure that is affordable and financially sustainable.

The Summit on Value and Innovation was just the first step in what will be an ongoing dialogue designed to identify and address the existing barriers to health system improvement.  Summit participants have expressed their intention to continue working toward the goals and objectives they outlines on March 2.

Here are some highlights of the comments and coverage of the NDHI Summit:

“Last week I had the opportunity to sit at the table with some of the nation’s top thought leaders. We convened at the Newseum in Washington, DC, for the Healthcare Leadership Council’s National Dialogue for Healthcare Innovation; it was like a health policy nerd red carpet. Center for Medicare Director Sean Cavanaugh was there. Leapfrog Group CEO Leah Binder was there. America’s favorite bioethicist–oncologist–provocateur Zeke Emanuel was there. The chief executives of providers, payers, pharmaceutical companies, government agencies—all there. And what were they there to do? Define “value” in health care.”

–Neel Shah, M.D., Executive Director, Costs of Care in the AAMC Wing of Zock blog

***

“In order to improve value, we needed to identify some of the obstacles that could thwart progress. Regulatory and policy challenges; trust between stakeholders; insufficient time for measurement and lack of tools for patients to make healthcare decisions were among the barriers we cited.

“To surmount those obstacles, we honed in on several key initiatives: piloting a payment model that incentivizes value and shares risk among stakeholders; mapping the patient journey to better understand how we as stakeholders can work together, rather than focusing on our individual part of a patient’s healthcare experience; and developing medication adherence programs to educate patients on their disease, therapies and treatment goals.”

–Greg Irace, Senior Vice President of Global Services, Sanofi US

***

Several participants said that the Medicare Advantage system does a good job of aligning incentives to produce high-quality care and good value. Barry Arbuckle, president and chief executive officer of MemorialCare Health System, which operates hospitals and provider groups as well as a health plan in the Los Angeles area, said, “If I could push every Medicare patient into Medicare Advantage, I’d do it tomorrow.”
Medicare Advantage is “a fundamentally better system. The financials are aligned. We have incentives to do disease-management programs. Frankly I don’t have that in Medicare, because I get paid when they get sick. And if they’re sicker, I get paid more,” Arbuckle said.

It’s more challenging to address these issues for the commercially insured population, Arbuckle said. Having a long-term relationship with members is crucial to the success of creating better health-care value, he said.

–Coverage in Bloomberg BNA, March 3, 2015

The Meaning of Measurements

October 27, 2014
2:46 pm

The Healthcare Leadership Council is very pleased to be supporting a conference taking place this Thursday, October 30 called “Mind the Gap:  Improving Quality Measurement in Accountable Care Systems.”  It’s co-sponsored by the National Pharmaceutical Council, National Health Council and the Pharmacy Quality Alliance.

One thing that is invariably true of all of our Healthcare Leadership Council members and so many successful organizations is that metrics matter.  There is no such thing as being theoretically successful.  If you can’t or don’t measure it – and measure it effectively, accurately and comprehensively – it doesn’t exist.

That’s the focus of this conference, looking at new healthcare payment and delivery systems like accountable care organizations.  We have long maintained that ACOs and similar structures must achieve both cost-efficiency and improved clinical effectiveness (and, with it, improved patient outcomes).  To ensure those two objectives are being met, high-quality measurement tools are imperative.

Experts on October 30 will look at the gaps in today’s measurement systems and whether all health conditions, those that affect millions and those that impact comparably fewer, are being assessed with the same rigor and detail.  The conference is open to the public and you can register to attend here.

Aetna CEO: New Math for Medicare

October 22, 2014
5:02 pm

(We have made the point often in this space that, even with the private sector’s successes in containing healthcare costs and reducing Medicare per-capita spending to historic lows, the sheer magnitude of baby boomers reaching 65 and reaching Medicare eligibility necessitates significant changes to the program.  Moving away from a fee-for-service model that incentivizes volume rather than value is essential.  As Mark Bertolini, CEO of Aetna (a Healthcare Leadership Council member) points out in this Forbes op-ed column, innovative approaches to Medicare payment and healthcare delivery can achieve better patient health and improved system sustainability.)

By Mark T. Bertolini

The Medicare Part A trust fund will be exhausted by 2030. As 11,000 baby boomers become eligible for Medicare daily, Medicare spending is projected to exceed $1 trillion in 2020. We can’t change the numbers that define our population but, we can apply new math to them.

Focus first on helping the chronically ill

The sickest 5 percent of fee-for-service Medicare patients with chronic conditions drive more than 40 percent of the total cost of health care in the program. We should use the lessons learned in Medicare Advantage and other proven innovations. Encourage Medicare Part A and B enrollees with multiple chronic conditions to participate in new integrated care programs with top-notch physicians to ensure high-quality service. Pay managed care organizations rates that guarantee savings for taxpayers out of the gate.

Use the successes and learnings of this approach to phase out the Medicare fee-for-service payment model

The fee-for-service model has doctors getting paid by the number of procedures they do or tests they run, rather than on how well their patients do. We need to move to a system that pays for quality over quantity.

These two changes alone will mean lower cost coupled with better integrated, quality care for the members of our families that need that care the most.

While the Congressional Budget Office recently reported that estimated costs of Medicare and Medicaid have dropped, our country’s coffers are still being drained by a too-costly health care system. This was reconfirmed in July, when the Boards of Trustees of the Federal Hospital insurance and Federal Supplementary Medical Insurance Trust Funds projected that Medicare costs will grow from their current level of 3.5 percent of the gross domestic product (GDP) to at least 5.3 percent of the GDP in 2035.

Consider this: As baby boomers become Medicare eligible, the number of beneficiaries will grow from 50.7 million in 2012 to 81 million in 2030—a 60 percent increase in less than 20 years. Add to this that the tax base is shrinking: Baby boomers are retiring, leaving the country with a much smaller workforce paying a much higher Medicare tax burden. With average life expectancy projected to reach 81.5 years by 2030, on average those seniors will use Medicare benefits for three times as long as when Medicare was enacted in 1965. Chronic conditions among Medicare beneficiaries also are on the rise, making them a sicker and more expensive population than existed in 1965.

The current fee-for-service payment model unintentionally incentivizes the wrong kinds of behaviors—spending less time with patients, or having more tests and procedures. There is little reward for finding more efficient ways to make people better or for keeping them healthy in the first place.

Bringing innovative collaboration to traditional Medicare

Many programs that have been so effective for caring for Medicare Advantage’s sickest beneficiaries, including enhanced home-based care, care coordination and medication review, are not always covered under traditional Medicare. Our experience in Medicare Advantage shows the promise of these models. For several years, we have worked with health care providers to establish reimbursement models based on risk-sharing that encourages higher-quality performance. Aetna Aetna’s Medicare Advantage Provider Collaboration program, and its work to create accountable care organizations (ACOs), are examples of cooperative arrangements that are improving care quality and health outcomes while also reducing costs. In many instances, these programs have resulted in fewer inpatient hospital days, fewer hospital admissions and fewer readmissions for patients, which can reduce health care costs by as much as 30 percent.

Bringing innovative provider collaborations and managed care approaches to traditional Medicare is a winning proposition for everyone. Patients could get a full team of experts providing customized and focused attention, and be rewarded with incentives for adhering to treatment. Doctors could get greater support, information and resources to help their patients get and stay healthy. Managed care companies could serve a broader Medicare population, as long as they meet the required quality and outcomes results. Taxpayers could get a lower-cost, better-quality healthcare system.

In the past, we have shied away from making significant changes to Medicare, since the issues seemed to be so far down the road. That is no longer the case. Our Medicare spending has a tremendous impact on our economy now, and that will only increase over the next decade. Our population is aging too quickly and our nation’s Medicare costs are growing too rapidly for us to be timid. We need to take dramatic action now, and revolutionize how we approach the problem. The numbers can work if we are ready to adopt a new model. We can achieve a result that includes both healthier seniors and a lower tax burden.

When in Doubt, Always Opt for Choice

August 08, 2014
11:16 am

Earlier this year, the Centers for Medicare and Medicaid Services (CMS) issued proposed regulations that would have made significant, sweeping changes in the Medicare Part D prescription drug program.  Among other aspects, the proposed rule would have placed new limitations on the number of Part D plans that plan sponsors could offer in a particular region.

In a logical world, policymakers would have first asked seniors if they felt the Part D program was inflicting too many plan choices upon them.  They didn’t, so the Healthcare Leadership Council (through our Medicare Today initiative) did.

We recently released our annual nationwide survey of U.S seniors evaluating their perspectives regarding their prescription drug coverage.  As has been the case in past years, satisfaction with Part D remains high, with almost 90 percent saying they’re pleased with their coverage and find it affordable.

More interesting, though, in context with the earlier CMS proposed rulemaking is the survey’s finding that three of every four seniors value having a wide choice of plans from which to choose and expressed concern with any changes that would limit those choices.

Ever since the inception of Medicare Part D, those who take a more patronizing view toward older Americans have asserted that they would be confused by having a number of plan choices before them.  This survey makes it abundantly clear that is not the case.

CMS pulled back on its efforts to make such drastic changes to the Medicare prescription drug program.  Before any further rulemaking takes place, federal regulators would do well to take into consideration what beneficiaries actually want.