Lawmakers Have a Drug Pricing Solution Right in Front of Them

As Congress continues to deliberate on drug pricing proposals that many would call extreme, even radical – empowering the federal government to set prices instead of having prices negotiated in the marketplace – a leading health policy research firm has issued findings that should lead lawmakers to turn toward solutions that would not undermine medical innovation but would have a significant impact on the actual costs consumers experience at the pharmacy counter.

In 2020, Senator Chuck Grassley (R-IA), then chairman of the Senate Finance Committee, introduced the Prescription Drug Pricing Reduction Act (PDPRA)  which, for a time, enjoyed bipartisan support.  The bill would have, among other provisions, capped out-of-pocket costs for Medicare Part D beneficiaries at $3,100 annually, allowed beneficiaries to spread those costs over a full year instead of facing heavy charges up front, and reduced coinsurance levels in the initial coverage phase of Part D from 25 to 20 percent.

Avalere, the highly-respected health policy research firm, has performed some new analysis on what the Prescription Drug Pricing Reduction Act would do for Part D enrollees (those who do not qualify for low-income assistance), and it’s striking.

The Avalere study found that the provisions of the PDPRA would provide beneficiaries a 23 percent reduction in out-of-pocket costs compared to current law.  The research showed even greater cost reductions for Black (25%), Hispanic (25%) and North American Native (26%) beneficiaries.

And as the Avalere authors point out, the impact of lower out-of-pocket costs goes beyond financial security: “A large body of research has identified relationships between out-of-pocket costs for prescription drugs, treatment adherence, and health outcomes.  In addition, non-adherence to treatment can have a significant impact on patient outcomes, resulting in higher costs of care, disease progression, and adverse events.  As policymakers further consider reforms to Part D, assessing the impact of reforms on different patient populations, based on disease/condition, race, and reason for entitlement is an essential step to understanding all the possible impacts on access, affordability, health outcomes, and health disparities.”

This research should serve as an invitation for lawmakers to pull back from extreme approaches and the significant consequences that can impact patients and the future of our healthcare system and instead look to common-sense solutions that will directly achieve a bipartisan objective – reducing the amount of money seniors are paying out of pocket for the medicines they need.

CATEGORIES: Adherence, Medicare  |   Link  |   Trackback  |   Comments (237)

The Problematic Push to Slow Medicare Advantage’s Positive Health Impact

In the complex deliberations on Capitol Hill to assemble a social spending package that can pass both houses, one of the prominent proposals being discussed is the expansion of Medicare benefits to include dental, vision, and hearing coverage.  The cost would be significant, over $300 billion over 10 years based on an earlier estimate.  There are valid arguments to be made for closing gaps in current Medicare coverage. Where millions of Medicare beneficiaries need to be concerned, though, is in one of the ideas being tossed around to pay for this coverage expansion, placing the financial burden on Medicare Advantage (MA) plans and those who rely on them for their healthcare.

Some have suggested financing these additional benefits by excluding them from the benchmark that Medicare uses to determine payment rates for Medicare Advantage plans.  The USC-Brookings Schaeffer Initiative for Public Policy, in fact, published an essay advocating this approach.

Let’s break down exactly what this means and clarify the ramifications of such a step.  Under this approach, Congress would be creating new defined benefits for Medicare beneficiaries, but it would not be funding those benefits for MA plans.  MA plans receive rebates from the government by submitting bids for the coming plan year that are lower than the benchmark.  Those rebates are generally funneled back into additional benefits for enrollees and initiatives to address social determinants of health (more on that in a moment).  If the range of defined Medicare benefits expands but that is not reflected in the benchmark, that will mean a significant shrinkage of rebates to MA plans.

Put succinctly, for the first time ever, Medicare would be segmenting its beneficiary population into different groups with different levels of benefits. Medicare Advantage plans and enrollees will be paying for expanded benefits for those in conventional fee-for-service Medicare, and there will be consequences for doing that.

Today, more than four of every 10 Medicare beneficiaries – over 26 million in all – are enrolled in an MA plan, with that number growing annually.  And as more seniors enroll in these plans, the collective health of the over-65 population improves.  Research has shown that MA plans surpass conventional fee-for-service Medicare on multiple clinical quality measures and patient experience standards.

Just as importantly, as health experts come to the increasing realization that non-clinical social determinants can have an even greater impact on health than clinical care, more Medicare Advantage plans are providing coverage for transportation, housing, nutrition and social support services. This can make a profound difference in the lives of at-risk seniors. If, however, lawmakers choose to take dollars out of Medicare Advantage in order to fund proposed dental, hearing and vision benefits, something has to give.

No one is suggesting that Congress shouldn’t address existing gaps in Medicare coverage, but there needs to be greater foresight in determining how to pay for it.  It makes little sense to undermine a program that is providing quality healthcare to our most vulnerable age group and is addressing the social determinants that affect lives and health.

CATEGORIES: Health, Health Reform, Healthcare Costs and Value, Medicare  |   Link  |   Trackback  |   Comments (165)

Medicare Part D Facts Keep Getting in the Way of Politics

CATEGORIES: Access, Health, Healthcare Costs and Value, Medicare  |   Link  |   Trackback  |   Comments (177)

Quantifying the Medicare Advantage advantage

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.

CATEGORIES: Access, Health, Healthcare Costs and Value, Medicaid, Medicare, Patient Safety and Quality, Wellness and Chronic Care Management  |   Link  |   Trackback  |   Comments (172)

An Expert Look at 2018 Healthcare Trends and Their Potential Impact

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 21^st 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.

CATEGORIES: Access, Evidence-Based Medicine, Health, Health Information Technology, Health Reform, Healthcare Costs and Value, Medicare, Patient Safety and Quality, Prevention, Protecting Innovation, Wellness and Chronic Care Management  |   Link  |   Trackback  |   Comments (118)