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Medicare Embraces the ‘Ounce of Prevention’ Philosophy

March 23, 2016
5:20 pm

We’ve long maintained that Medicare can be a stronger program, both in terms of protecting the health of its beneficiaries and in improved cost-efficiency, if it did a better job emphasizing prevention, diagnosis and early treatment, emulating many of the lessons being demonstrated every day in the private sector.

To the credit of HHS Secretary Sylvia Burwell, the Medicare program is now moving in this direction in a very significant way.

Today, Secretary Burwell announced that the Obama Administration will propose new rules this summer that would have Medicare provide coverage for diabetes prevention programs.  She cited a YMCA program that has enabled participants to cut their body weight by an average five percent, thus reducing the propensity for diabetes, a disease with extremely high incidence rates among the elderly.  Early interventions can prevent the need for more expensive healthcare services to treat diabetes symptoms, thus reducing Medicare expenditures.

HLC has long argued that Medicare should pay for services such as health coaching, aiding beneficiaries in practicing better dietary and exercise habits, as well as new technological innovations to help those with diabetes and prediabetes better monitor their health conditions.  We, in fact, sponsored a briefing for congressional staffers on the subject last year.

Secretary Burwell’s announcement today heralded an important new direction for the Medicare program.  In her words, the federal government is transitioning from “treating the sick to preventing the illness.”   We applaud her actions.

The Amazing, Classy, Winning (and Completely Ridiculous) $300 Billion Proposal

February 19, 2016
1:12 pm

It’s a notion we’ve heard a fair amount during the presidential campaign, this idea that Medicare should ‘negotiate’ prescription drug prices.  (There’s a very good reason I put ‘negotiate’ in quotes.  We’ll get to that in a moment.)  The concept reached all new levels of visibility in recent days when the leader in the polls on the Republican side told MSNBC’s “Morning Joe” program, “We don’t negotiate.  We don’t negotiate….If we negotiated the price of drugs, Joe, we’d save $300 billion a year.”

I’m not going to devote this post to litigating the $300 billion boast.  The Washington Post has already done that by giving it “Four Pinocchios” on its lack-of-truthfulness scale.  It is, of course, a mathematical impossibility to save $300 billion annually from a Medicare Part D prescription drug program that spends less than $80 billion per year.  A candidate making that claim has ventured into loaves-and-fishes territory.

But that particular absurdity notwithstanding, let’s discuss the proposal coming from the current presidential race leaders in both parties that the heavy hand of the federal government should be involved in drug pricing.  There are some myths attached to this idea that, in any reasonable debate, shouldn’t be shunted aside.

Myth #1 – In the Medicare program today, there are no negotiations to reduce drug prices.

This, of course, is patently untrue.  Prices in the Medicare Part D program are determined through a negotiation process involving private health plans and pharmacy benefit management (PBM) companies.  PBMs handle millions of individual pharmaceutical transactions yearly and have the bargaining power to achieve reasonable and realistic pricing.

The proof here is in the proverbial pudding.  Average monthly premiums for enrollees in the Part D program have, according to the Centers for Medicare and Medicaid Services, remained stable at an affordable level for the past five years.

Myth #2 – Federal government involvement in Medicare drug pricing is a pro-consumer idea.

Proponents of federally-dictated drug pricing make it seem all so simple, that if the government takes over drug price negotiations then Medicare prices will drop to the level of the Veterans Administration.  They don’t, however, explain the tradeoffs that come with this kind of policy change.  When you arbitrarily lower prices, you invariably restrict accessibility.  In the VA, for example, nearly one-fifth of the 200 most commonly prescribed drugs are not on its national formulary.  As noted in a paper by the Center for Medicine in the Public Interest, the vast majority of drugs not made available to VA patients are accessible within Medicare Part D prescription drug plans.

This is why the Congressional Budget Office has traditionally been reluctant to ascribe any real savings to the concept of federal price negotiations within Medicare, because of the unlikelihood that lawmakers will tell their senior citizen constituents that many of the drugs on which they depend will no longer be available to them.

And let’s not forget that artificial price controls on pharmaceuticals have an inevitable impact on research and development of new therapies, an unacceptable outcome when devastating (and costly) chronic illnesses like diabetes and heart disease are affecting millions.

Myth #3 – We need hard-nosed federal negotiators sitting at the table with pharmaceutical company executives to push down prices.

The mental image of two sides bickering over numbers from their respective sides of a table is a fallacy.  The reason I put ‘negotiate’ in quotation marks is because there really is no such thing.  The federal government establishes pricing levels and drugmakers must agree to meet those prices in order to be in the Medicare Part D formulary.  This has two effects – (1) the aforementioned restricted access to therapies and (2) the end of competition in the Part D program.  Today, plans compete with each other to provide greater value to enrollees.  With a single federally-set pricing level, the benefits of consumer choice and competition are lost.

The good news here is that there are ways to address healthcare costs while, instead of hurting patients and consumers, actually elevating care quality and bolstering innovation.  The Healthcare Leadership Council unveiled a series of proposals this week to accomplish those goals and I’ll be discussing these in more details in a series of forthcoming posts. Watch this space.

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.

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.

Documenting the Better Care, Lower Cost Advantages of Medicare Advantage

September 03, 2015
11:59 am

A study published in this month’s edition of the American Journal of Managed Care brings hard data to an argument many of us have been making for some time, that private Medicare Advantage plans are doing a superior job of delivering high-quality care at less cost than traditional Medicare.

The study, led by Dr. Bruce E. Landon of the Harvard Medical School and funded by a grant from the National Institute on Aging, examined price-standardized resource usage and care delivery for patients with diabetes or cardiovascular disease in both Medicare Advantage plans and traditional fee-for-service Medicare.  The takeaways from the study included:

•    For both health conditions examined, relative resource use was lower in Medicare Advantage plans than it was in traditional Medicare

•    Although there was variation among individual plans, quality of care for diabetes and cardiovascular disease was higher in Medicare Advantage plans.

The study concludes, “Proponents of managed care have long argued that integrated health plans can deliver care more efficiently than traditional fee-for-service care by using their ability to tailor their provider networks to the needs of their population and to implement disease and case management programs to improve chronic disease management.  In this large national study of enrollees with diabetes or cardiovascular disease, our findings suggest that many Medicare HMO health plans are able to deliver care of equal or better quality with lower (resource usage) than traditional Medicare.”

These findings, I would add, echo what we hear at the Healthcare Leadership Council on a regular basis from not only our health plan members, but also from hospital leaders – that, in terms of attacking chronic disease in a cost-efficient way, Medicare Advantage has a strong upper hand over conventional Medicare.