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Posts Tagged ‘healthcare costs’


Reporter: Gail S. Thornton

 

From The Wall Street Journal (www.wsj.com)

Published January 9, 2019

Health-Care CEOs Outline Strategies at J.P. Morgan Conference

Chiefs at Johnson & Johnson, CVS discuss what’s next on a range of industry issues

One of the biggest health conferences of the year for investors, the J.P. Morgan Health-Care Conference, is taking place this week in San Francisco. Here are some of the hot topics covered at the four-day event, which wraps up Thursday.

BioMarin Mulls Payment Plans

BioMarin Pharmaceutical Inc. CEO Jean-Jacques Bienaimé said he would consider pursuing installment payment arrangements for the biotech’s experimental gene therapy for hemophilia. At the conference, Mr. Bienaimé told the Wall Street Journal that the one-time infusion, Valrox, is likely to cost in the millions because studies have shown it can eliminate bleeding episodes in patients, and current hemophilia treatments taken chronically can cost millions over several years. “We’re not trying to charge more than existing therapies,” he said. “We want to offer a better treatment at the same or lower cost.”

Johnson & Johnson Warns on Pricing

As politicians hammer drug prices, Johnson & Johnson CEO Alex Gorsky suggested companies need to police themselves. At the conference, Mr. Gorsky told investors that drug companies should price drugs reasonably and be transparent. “If we don’t do this as an industry, I think there will be other alternatives that will be more onerous for us,” Mr. Gorsky says. Some drugmakers pulled back from price increases in mid-2018 amid heightened political scrutiny, but prices went up for many drugs at the start of 2019.

Marijuana-Derived Drugs Show Promise

 

CVS Discusses New Stores

CVS Health Corp. Chief Executive Larry Merlo began showing initial concepts the company will be testing as it begins piloting new models of its drugstores that incorporate its Aetna combination. The first new test store will open next month in Houston, he told investors, and it will include expanded health-care services including a new concierge who will help patients with questions. 

Aetna Savings On the Way

Mr. Merlo also spelled out when the company will achieve the initial $750 million in synergies it has promised from the CVS-Aetna deal. In the first quarter, he said the company will see benefits from consolidating corporate functions. Savings from procurement and aligning lists of covered drugs should be seen in the first half, he says. Medical-cost savings will start affecting results toward the end of the year, he noted. 

Lilly Cuts Price

Drugmaker Eli Lilly & Co. expects average net US pricing for its drugs–after rebates and discounts–to decline in the low- to mid-single digits on a percentage basis this year, Chief Financial Officer Josh Smiley told the Journal. Lilly’s net prices had risen during the first half of 2018, but dropped in the third quarter as the company took a “restrained approach,” Mr. Smiley said. Lilly, which hasn’t yet reported fourth-quarter results, took some list price increases for cancer drugs in late December but hasn’t raised prices in the new year, he said.

Peter Loftus at peter.loftus@wsj.com and Anna Wilde Mathews at anna.mathews@wsj.com
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Role of Informatics in Precision Medicine: Notes from Boston Healthcare Webinar: Can It Drive the Next Cost Efficiencies in Oncology Care?

Reporter: Stephen J. Williams, Ph.D.

 

Boston Healthcare sponsored a Webinar recently entitled ” Role of Informatics in Precision Medicine: Implications for Innovators”.  The webinar focused on the different informatic needs along the Oncology Care value chain from drug discovery through clinicians, C-suite executives and payers. The presentation, by Joseph Ferrara and Mark Girardi, discussed the specific informatics needs and deficiencies experienced by all players in oncology care and how innovators in this space could create value. The final part of the webinar discussed artificial intelligence and the role in cancer informatics.

 

Below is the mp4 video and audio for this webinar.  Notes on each of the slides with a few representative slides are also given below:

Please click below for the mp4 of the webinar:

 

 


  • worldwide oncology related care to increase by 40% in 2020
  • big movement to participatory care: moving decision making to the patient. Need for information
  • cost components focused on clinical action
  • use informatics before clinical stage might add value to cost chain

 

 

 

 

Key unmet needs from perspectives of different players in oncology care where informatics may help in decision making

 

 

 

  1.   Needs of Clinicians

– informatic needs for clinical enrollment

– informatic needs for obtaining drug access/newer therapies

2.  Needs of C-suite/health system executives

– informatic needs to help focus of quality of care

– informatic needs to determine health outcomes/metrics

3.  Needs of Payers

– informatic needs to determine quality metrics and managing costs

– informatics needs to form guidelines

– informatics needs to determine if biomarkers are used consistently and properly

– population level data analytics

 

 

 

 

 

 

 

 

 

 

 

 

What are the kind of value innovations that tech entrepreneurs need to create in this space? Two areas/problems need to be solved.

  • innovations in data depth and breadth
  • need to aggregate information to inform intervention

Different players in value chains have different data needs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data Depth: Cumulative Understanding of disease

Data Depth: Cumulative number of oncology transactions

  • technology innovators rely on LEGACY businesses (those that already have technology) and these LEGACY businesses either have data breath or data depth BUT NOT BOTH; (IS THIS WHERE THE GREATEST VALUE CAN BE INNOVATED?)
  • NEED to provide ACTIONABLE as well as PHENOTYPIC/GENOTYPIC DATA
  • data depth more important in clinical setting as it drives solutions and cost effective interventions.  For example Foundation Medicine, who supplies genotypic/phenotypic data for patient samples supplies high data depth
  • technologies are moving to data support
  • evidence will need to be tied to umbrella value propositions
  • Informatic solutions will have to prove outcome benefit

 

 

 

 

 

How will Machine Learning be involved in the healthcare value chain?

  • increased emphasis on real time datasets – CONSTANT UPDATES NEED TO OCCUR. THIS IS NOT HAPPENING BUT VALUED BY MANY PLAYERS IN THIS SPACE
  • Interoperability of DATABASES Important!  Many Players in this space don’t understand the complexities integrating these datasets

Other Articles on this topic of healthcare informatics, value based oncology, and healthcare IT on this OPEN ACCESS JOURNAL include:

Centers for Medicare & Medicaid Services announced that the federal healthcare program will cover the costs of cancer gene tests that have been approved by the Food and Drug Administration

Broad Institute launches Merkin Institute for Transformative Technologies in Healthcare

HealthCare focused AI Startups from the 100 Companies Leading the Way in A.I. Globally

Paradoxical Findings in HealthCare Delivery and Outcomes: Economics in MEDICINE – Original Research by Anupam “Bapu” Jena, the Ruth L. Newhouse Associate Professor of Health Care Policy at HMS

Google & Digital Healthcare Technology

Can Blockchain Technology and Artificial Intelligence Cure What Ails Biomedical Research and Healthcare

The Future of Precision Cancer Medicine, Inaugural Symposium, MIT Center for Precision Cancer Medicine, December 13, 2018, 8AM-6PM, 50 Memorial Drive, Cambridge, MA

Live Conference Coverage @Medcity Converge 2018 Philadelphia: Oncology Value Based Care and Patient Management

2016 BioIT World: Track 5 – April 5 – 7, 2016 Bioinformatics Computational Resources and Tools to Turn Big Data into Smart Data

The Need for an Informatics Solution in Translational Medicine

 

 

 

 

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1:15PM 11/12/2014 – 10th Annual Personalized Medicine Conference at the Harvard Medical School, Boston

REAL TIME Coverage of this Conference by Dr. Aviva Lev-Ari, PhD, RN – Director and Founder of LEADERS in PHARMACEUTICAL BUSINESS INTELLIGENCE, Boston http://pharmaceuticalintelligence.com

1:15 p.m. – Keynote Speaker – International Genetics Health and Disease

International Genetics Health and Disease

The principles of personalized medicine and how they affect the lives of people acknowledge no national boundaries. Although there are some differences among the diverse populations around the world in terms of their genetic variation, the general principles of personalized medicine apply uniformly across many populations. Dr. Periz will discuss how personalized medicine is viewed across the many European countries with particular emphasis on how Spain is implementing it into its medical care.

Keynote Speaker

Antonio L. Andreu Periz, M.D.
Director, Instituto de Salud Carlos III, Madrid

@insalud_es  @CIBER-BBN

Governmental & Public Health National Organization like a combination of CDC and “Hybrid NIH in the US”

Personalized Medicine (PM) in Europe

Europe and Spain — PM is changing Medical Practice, regulations standard of care.

 

In Europe 28 National systems in Spain alone 17 systems

Implementation of PM in Europe: Hospitals, Regulation,

  • develop proof of concept
  • identify mechanisms
  • bring basic research to clinical
  • incorporation into a Portfolio of policies on PM

Horizon 2020 in EU – 2016 launch action on PM in various countries in EU

  • Translational level for all EC members
  • Coalition of 28 Research Centers in Europe to promote PM
  • Sharing Databases, Data on HC, infrastructure for Translational research
  • OMICS
  • Biomarkers
  • clinical trials

CSA – Coordination Support Action

  • PerMed 500,000 Euro for 5 years, 9 operating partners, representatives of Ministry of Health, Israel and Canada Ministry of Health are included
  • Research Agenda for PM in Europe – SWOT Analysis
  • Recommendations for UC to start PM in 2016
  • – basic research
  • – translation
  • – ICTs
  • – Regulatory

SPAIN – Initiatives on PM: Aggregation of Knowledge

  • One single organization collaborates with 22 Institutions on Biomedical research – Concentration in Barcelona and in Madrid
  • Projects of Excellence: PhD level Projects – Clinical Practice: Imaging, Endocrinology, genomics, cardiology
  • 2014 — 35 Applicants – not all are on Cancer 25% are in Cancer 75% are in other clinical Fields
  • 12Million Euros will fund 1/4 of the applicants
  • PhD Thesis on PM – common project 2 yr governmental institute and 2 years in biotech industry

EAPM – Europe Alliance for PM

  • raise awareness on HOW PM CAN SHAPE Healthcare in Europe: Diagnosis, Treatment,
  • Specialized Treatment for Europe’s Patient (STEPs) – Five Steps

Global alliances to shape Medical Practice based on PM – Collaboration Industry and Academia

  • PMC in the US (Personalized Medical Coalition)
  • PerMEd in Europe (coalition  in Europe  supporting innovation in personalized medicine)
  • EAPM (European Alliance for Personalized Medicine)

 

 

– See more at: http://personalizedmedicine.partners.org/Education/Personalized-Medicine-Conference/Program.aspx#sthash.qGbGZXXf.dpuf

@HarvardPMConf

#PMConf

@SachsAssociates

@insalud_es

@CIBER-BBN

@EIGlobalNet

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11:30AM 11/12/2014 – 10th Annual Personalized Medicine Conference at the Harvard Medical School, Boston

REAL TIME Coverage of this Conference by Dr. Aviva Lev-Ari, PhD, RN – Director and Founder of LEADERS in PHARMACEUTICAL BUSINESS INTELLIGENCE, Boston http://pharmaceuticalintelligence.com

11:30 Personalized Medicine Coalition Award &  Award Recipient Speech

Presentation of Personalized Medicine Coalition’s 10th Annual Award for Leadership in Personalized Medicine.

Personalized Medicine Coalition Award Recipient

Mark J. Levin
Co-Founder and Partner
Third Rock Ventures, LLC

Presenter:

Brian Munroe
PMC Founder and Senior Vice President, Government Affairs
Endo

 Award in Science, Business Policy to individual to lead PM – Mark Levin

 

 

  • was at Ely Lilly in the 70s leading supplier of Insulin in the 20s and antibiotics in the 30s,Factor 8, pain drugs, chemotherapy
  • was at Genentech – Human growth Hormone and Human Insulin — both are PM, Interferon,
  • was at Mayfield Ventures
  • was at Millenium, CEO, early 90s, monoclonal antibodies
  • 2000 discussion on the need for PMC
  • Founder of Foundation Medicine – molecular informatics – expands therapeutics and PM
  • NOW — with Third Rock Ventures, LLC

 

Mark Levin – award acceptance speech – Team accomplishments most important

We need to thank the patients participating in Clinical Trials

  1. How I got involved in personalized medicine (PM): High School – Human Biology
  2. Genetics – drive
  3. PM – All diseases – genetic disorders — combination with extreme phenotyping, Muscular Dystrophy – splicing a gene for treatment
  4. Drugability and PM – gene therapy, replace factor, deliver a gene to the brain and the drug. inside CSF
  5. Gene editing – deliver to the Brain correct the gene in the Brain – therapy for ALS, Schizophrenia – understanding the genes involved in this disease, same
  6. Cancer cure – treatment of combination therapies several at the same time vs present time treat one other emerges
  7. cancer vaccine
  8. Sample of blood – proteomics — in Annual Exams at MDs Annual physical
  9. Convergent — comparison of Mutation across to 1000 patient’s mutations
  10. Future is MOST exciting
  11. Challenges of the Future: Biology and Technology, cells in microbiome, 10 million genes, SYSTEM BIOLOGY — will lead the way,
  12. FUNDING SCIENCE via NIH Scientist is the most important National task
  13. Preventative and Prognostics Medicine -need be part of DRUG development
  14. Justification – maximize value for patient vs $$ spent – maximum value – waste and no leadership
  15. Concern — Affordability of Healthcare to All, access to care vs economic Inequality
  16. Leadership and Management: We truly need NATIONAL CONVERSATION — with a Leader with set of goals to solve a problem in certain time
  17. Insurance, Pharma, HMO — budget challenge — attendees inn the room, need to provide leadership at the National Level

 

– See more at: http://personalizedmedicine.partners.org/Education/Personalized-Medicine-Conference/Program.aspx#sthash.qGbGZXXf.dpuf

 

@HarvardPMConf

#PMConf

@SachsAssociates

@VCapitalGuide

@hgbc_harvard

@MassBio

@MALifeSciences

@FierceBiotech

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8:50AM 11/12/2014 – 10th Annual Personalized Medicine Conference at the Harvard Medical School, Boston

REAL TIME Coverage of this Conference by Dr. Aviva Lev-Ari, PhD, RN – Director and Founder of LEADERS in PHARMACEUTICAL BUSINESS INTELLIGENCE, Boston http://pharmaceuticalintelligence.com

8:50 a.m. – Keynote Speaker – CEO, American Medical Association

The American Medical Association (AMA) has the largest number of practicing physicians of all specialties as its members and the organization plays a very important role in health care policy and education of medical professionals.  AMA has been quite active in assessing the role of personalized medicine in the future of healthcare in all of its facets.  Dr. Madara will talk about the status of AMA’s thinking about personalized medicine and his vision of how it might be able to transform medical care.

Keynote Speaker

James Madara, M.D. @AmerMedicalAssn


Executive Vice President and CEO, American Medical Association

AMA Strategy the context for PM  – Outside looking in View applied

Mission statement: Promote Medicine 167 years since it was established. Societies of MDs – all population of American MDs, are members.

AMA developed:

  • CPT Curation – Billing of Procedures
  • Standard Procedure for Katrina and Emergency Medicine
  • Strategic Plan 110 active Projects to be compressed into three big ideas
  1. Connect clinics with community – OUTCOMES, cooperation with CDC i.e., Diabetes, HTN (KaiserPermanente)
  2. Medical education bring t to 21th century: Competence vs Time-in-Chair, 141 Medical Schools, teaching methods: Gaming/mobile, the lecture Hall in Medicine is poor form for education, Simulation methods, Clinical Research and Basic Research – blend across disciplines, platforms in Silicon Valley to create new TEACHING of MDs, Genomics must be incorporated, shifting from Inpatient to Outpatient to HOME, all training is for Inpatient – Nothing for HOME delivery of Care. 85% of all Medical School responded they need change in Teaching — 11 Excellence Medical Schools selected: Vanderbilt, MI, UCSF, UC Davis…
  3. Make practice of medicine joyous again – installation in MDs Offices, optimize the efficiency of MDs reporting now emphasis on USABILITY

Doing through Partnership: PM in Nutrition is everywhere — it is a HYPE, Gartner Group Hype Cycle was used by the Speaker for an analogy with Personalized Medicine (PM)

SHAKE out for a steady state in PM mitigation the hype

  • Mixed perceptions of Cost effectiveness of Healthcare delivery – Growth of Health Spending by Component:
  • Center on Outcomes and Values: PM redefined: away from behavioral toward procedural (actions): i.e, CV death risk predicted by waist size –

Cost/Behavior: sweet-spots are the following

  • Pharmaconeconomics: Is cost effective and it does not involve behavior
  • Cancer
  • Laboratory Developed Tests (LDTs)

– need be approved by FDA – New challenge in PM

– AMA View: Medical services not Medical Devices, CLIA ensure the quality and Standards, it requires more than guidance, currently FDA has ONLY guidance

 

 

– See more at: http://personalizedmedicine.partners.org/Education/Personalized-Medicine-Conference/Program.aspx#sthash.qGbGZXXf.dpuf

 

@HarvardPMConf

#PMConf

@SachsAssociates

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The Affordable Care Act: A Considered Evaluation.

Part I.  The legislative act (ACA) and the model for implementation (Insurance Gateways).

Writer and Curator: Larry H. Bernstein, MD, FCAP
and
Curator and Editor: Aviva Lev-Ari, PhD, RN 
This discussion is composed as two distinct chapters.  The first is a clarification of what is contained in the Affordable Care Act (ACA), the model of care it is crafted from, the insurance mandate, the inclusion of groups considered high risk and uninsured, the inclusion of groups low risk and uninsured, and the economics involved in going from a fractured for profit health care industry to a more stable coverage for patients.  The second is taken from selected articles on the care process and the cost and consequences for improving quality at lower cost.   There are inherent problems at looking at this from a systems point of view, mainly impacted by the relationship of providers to hospitals and clinics, and by the relationships of insurers to the patients and providers in an Accountable Care Organization (ACO) model.
This article has the following two parts:

Part I. The legislative act (ACA) and the model for implementation (Insurance Gateways).

Part II.  The Implementation of the ACA, Impact on Physicians and Patients, and the Dis-Ease of the Accountable Care Organizations.

Part I

The legislative act (ACA) and the model for implementation (Insurance Gateways)

A. Access and Coverage of Healthcare Reform Mandate

About 2.5 million young adults from age 19 to 25 attained health coverage as a result of the Affordable Care Act, which took effect in September 2010, according to the U.S. Department of Health and Human Services. Prior to the law’s approval, some 13.7 million young adults were uninsured, nearly one-third of the nation’s total uninsured population, according to the nonprofit Kaiser Family Foundation.
Employer-sponsored health insurance forms the backbone of our health insurance system. This leaves small businesses difficult to provide their workers with comprehensive coverage. In 2007, only 25 percent of employees in small businesses had coverage through their own employers, compared with 74 percent of workers in large firms. Moreover, there are few sources of affordable coverage outside the employer-based system, leaving millions of employees in small businesses uninsured or with inadequate health insurance. In 2007, half as many workers in small businesses were uninsured or underinsured compared to employees in large businesses. Congressional health reform bills to reform the health system include provisions specifically aimed at helping small businesses and their employees gain access to affordable, comprehensive coverage.  Then there is another issue since the “Great Recession” of 2008, that there is no stable coverage for an unemployed workforce and indigent families with competing needs for food and health.  (Kaiser Health News, 2009; 67).
The law created insurance exchanges to close the gap.  Employer interest in insurance exchanges is growing. The Kaiser Family Foundation found that 29% of employers with 5,000 or more employees are considering private exchanges as an option for buying healthcare coverage for their employees. A day later, consulting firm Towers Watson released its Health Care Changes Ahead survey, which found that 37% of employers think private exchanges are a reasonable alternative to traditional employer coverage in 2014.
See Figure.  M. M. Doty, S. R. Collins, S. D. Rustgi, and J. L. Nicholson, Out of Options: Why So Many Workers in Small Businesses Lack Affordable Health Insurance, and How Health Care Reform Can Help, The Commonwealth Fund, September 2009.

Changes in Health Insurance Coverage in the Great Recession, 2007-2010

This issue brief examines changes in health insurance coverage over the last decade, with a focus on how changes in the economy, particularly during the “Great Recession” of 2007 to 2009, have affected coverage and the number of uninsured. The paper finds that the number of uninsured grew substantially during the first recession of the decade, increasing by 5 million people from 2000 to 2004; increased more slowly during the brief recovery, growing by 2.1 million people from 2004 to 2007; and then again rose significantly during the Great Recession, rising by 5.7 million people since 2007.
The paper also finds that coverage, especially for children, through the Medicaid and Children’s Health Insurance Programs helped to prevent even more people from being uninsured. While the number of uninsured children declined in recent years, the number of uninsured adults rose. The only notable drop in uninsured adults was for young adults ages 19-25 in 2010, most likely due to the provision of the health reform law that permits young adults to stay on their parents’ insurance. The paper also considers trends in coverage by work status, race and ethnicity, citizenship status and geographical region.
http://kff.org/medicaid/issue-brief/changes-in-health-insurance-coverage-in-the/

Uninsured adults with chronic conditions or disabilities: gaps in public insurance programs.

Pizer SD, Frakt AB, Iezzoni LI. US Department of Veterans Affairs in Boston, MA. 

Health Aff (Millwood). 2009;28(6):w1141-50. http://dx.doi.org/10.1377/hlthaff.28.6.w1141
http://www.ncbi.nlm.nih.gov/pubmed/19843552
Among nonelderly U.S. adults (ages 25-61), uninsurance rates increased from 13.7 percent in 2000 to 16.0 percent in 2005. Despite the existence of public insurance programs, rates remained high for low-income people reporting serious health conditions (25 percent across years) or disabilities (15 percent). Previous research has established that low-income workers, those facing more stringent Medicaid eligibility requirements, and people employed by smaller firms are more likely than others to lack health insurance. Residents of southern states had even higher rates (32 percent with health conditions, 22 percent with disabilities). Those who did not belong to a federally mandated Medicaid eligibility category were about twice as likely as others to be uninsured overall, and uninsurance among this group increased more rapidly over time.
To address this growing problem, President Barack Obama and leaders in Congress passed health insurance reform legislation that is still taking shape. A common feature of the major proposals at this point is that coverage would be expanded by building on existing arrangements. This approach allows people to keep their current insurance if they wish to do so. The Medicaid program is particularly complicated because it is jointly financed and operated by the federal and state governments and because each state has implemented it differently.
See Table 1.

Ultimately, if Congress decides not to eliminate categorical eligibility restrictions, our results indicate that the preservation of eligibility expansions for people with disabilities or chronic conditions would target a population that is particularly vulnerable to uninsurance and its deleterious effects on health.

How Many Are Underinsured? Trends Among U.S. Adults, 2003 And 2007

Cathy Schoen, Sara R. Collins, Jennifer L. Kriss and Michelle M. Doty
Health Aff 2008; 27(4) w298-w309  http://dx.doi.org/10.1377/hlthaff.27.4.w298
With health insurance moving toward greater patient cost sharing, this study finds a sharp increase in the number of underinsured people. Based on indicators of cost exposure relative to income, as of 2007 an estimated twenty-five million insured people ages 19–64 were underinsured—a 60 percent increase since 2003. The rate of increase was steepest among those with incomes above 200 percent of poverty, where underinsurance rates nearly tripled. In total, 42 percent of U.S. adults were underinsured or uninsured. The underinsured report high levels of access problems and financial stress. The findings underscore the need for policy attention to benefit design, to assure care and affordability.
See Table 1 and Table 2
About seven in ten underinsured adults had annual incomes below $40,000 or below 300 percent of poverty—similar to the income distribution of the uninsured. In contrast, nearly two-thirds of those with more adequate insurance had incomes above $40,000. Underinsured adults were more likely than either of the other two groups to have health problems.
Based on a composite access indicator that included going without at least one of four needed medical care services, more than half of the underinsured and two-thirds of the uninsured reported cost-related access problems during the year. Among adults with at least one chronic health problem, half of uninsured adults and two in five underinsured adults said that they skipped doses of or did not fill a prescription for their condition because of cost—double to triple the rate reported by those insured all year, not underinsured.

Healthcare Costs: Another Top 1% Issue

By Chris Kaiser, Cardiology Editor, MedPage Today  Sep 11, 2013  http://www.medpagetoday.com/TheGuptaGuide/PublicHealth/41539

In the U.S., the top 1% of patients ranked by their healthcare expenses accounted for 21% of total healthcare expenditures in 2010, with an annual mean expenditure of $87,570, according to 2010 Medical Expenditure Panel Survey from the Agency for Healthcare Research and Quality in Rockville, Md.  In addition, the top 5% of the U.S. population ranked by healthcare expenses accounted for half of the total of healthcare expenditures, with an annual mean expenditure of $40,876, wrote Steven B. Cohen, PhD, and Namrata Uberoi, MPH, in the Statistical Brief No. 421.  Both of these figures are down from 1996, when the top 1% accounted for 28% of the total healthcare expenditures and the top 5% accounted for slightly more than half.  The total healthcare expenditures for 2010 were $1.26 trillion.

It is important that policy makers are aware of the the “concentration of healthcare expenditures … to help discern the factors most likely to drive healthcare spending and the characteristics of the individuals who incur them,” the authors noted.

Overall, there was a huge divide between the top and bottom 50% of the population in terms of total healthcare expenses. The top 50% accounted for 97% of total healthcare costs, while the lower 50% accounted for only 3% of the total healthcare expenditures.  In terms of income status,

  • the top 5% of those designated as poor accounted for 57% of the total healthcare expenditures, with an annual mean expenditure of $46,600, while
  • the top 5% of those in the highest income group accounted for 45% of the total healthcare expenditures, with an annual mean expenditure of $40,800.

The report also broke down healthcare spending by the number of chronic conditions, age, race/ethnicity, sex, and insurance. The survey found that chronic diseases take a big chunk of healthcare dollars.

The top 5% of those with four or more chronic conditions accounted for 30% of all healthcare expenditures, with an annual mean of $82,000 — a figure that is

  • seven times higher than those in the top 5% with no chronic diseases and nearly
  • three times higher than the top 5% with one chronic condition.

A report from 2012 found that Medicare could cut up to 10% of its spending if it focused on chronic disease prevention and coordinated care for those with chronic conditions.   Conditioned on insurance coverage status, the uninsured had the most concentrated levels of healthcare expenditures and the lowest annual mean expenses. Regarding public insurance, the top 5% accounted for 56% of the total healthcare expenditures.

Virtually every state experienced deteriorating access to care for adults over the past decade

GM Kenney, S Zuckerman, D Goin, S McMorrow, Urban Institute  May 2012

We use the Behavioral Risk Factor Surveillance System (BRFSS) to examine state-level changes in three key access indicators over the past decade. Specifically, we explore changes in the likelihood of having unmet medical needs due to cost, receiving a routine checkup, and receiving a dental visit for all nonelderly adults and for the subgroup of uninsured adults. We also consider differentials in access between uninsured and insured adults within each state in 2010, and how these differences are reflected in the relationship between access to care and state-level uninsurance rates.

We find that the deterioration in access to care observed in national trends during the past decade was evident in virtually every state in the country. Similarly, consistent with the national trends, the situation deteriorated more for the uninsured than for other adults in most states, which exacerbated the differentials in access and use between the insured and uninsured that had prevailed at the beginning of the previous decade. At the end of the decade, the uninsured in every state were at a dramatic disadvantage relative to the insured across the three access measures we examined. This analysis suggests that the potential benefits of the coverage expansion in the Affordable Care Act (ACA) are large and exist in every state.

We also found that states with higher uninsurance rates have worse access to care for all three measures, which implies that these states have the most to gain from the ACA. In particular, the ACA coverage expansion has the potential to reduce unmet needs due to costs and other cost-related barriers, problems that are more severe in states with high uninsurance rates.

DOCUMENTATION ON THE URBAN INSTITUTE’S AMERICAN COMMUNITY SURVEY-HEALTH INSURANCE POLICY SIMULATION MODEL (ACS-HIPSM)

Matthew Buettgens, Dean Resnick, Victoria Lynch, and Caitlin Carroll    May 21, 2013

We use the Urban Institute’s American Community Survey – Health Insurance Policy Simulation Model (ACS-HIPSM) to estimate the effects of the Affordable Care Act on the non-elderly at the state and local level. This model builds off of the Urban Institute’s base HIPSM, which uses the Current Population Survey (CPS) as its core data set, matched to several other data sets including the Medical Expenditure Panel Survey-Household Component (MEPS-HC), to simulate changes under ACA. To create HIPSM-ACS, we apply the core behavioral components of the base HIPSM to ACS records to exploit the much larger sample size for more precise estimates at the state and sub-state level. The modeling on the ACS-HIPSM produces projections of coverage changes related to state Medicaid expansions, new health insurance options, subsidies for the purchase of health insurance, and insurance market reforms (see Appendix 1 for more detail on HIPSM).

We simulate eligibility for Medicaid/CHIP and subsidies using the Urban Institute Health Policy Center’s ACS Medicaid/CHIP Eligibility Simulation Model, which builds on the model developed for the CPS ASEC by Dubay and Cook.  (Dubay, L. and A. Cook. 2009. “How Will the Uninsured be Affected by Health Reform?” Washington, DC: Kaiser Commission on Medicaid and the Uninsured.)

We simulate both pre-ACA eligibility and the MAGI-based eligibility introduced by the ACA. This allows us to simulate different scenarios for Medicaid maintenance-of-eligibility under the ACA. The distinction between pre-ACA eligible and newly eligible is also important in determining the share of a beneficiary’s costs paid by the federal government.

Using the three-year pooled sample, the model simulates eligibility for comprehensive Medicaid and CHIP coverage or subsidy using available information on the regulations for implementing the ACA, including the amount and extent of income disregards for eligibility pathways that do not change under the ACA and for maintenance-of-eligibility for each program and state in place as of approximately June 2010.

Under the ACA income eligibility is based on the IRS tax definition of modified adjusted gross income (MAGI), which includes the following types of income for everyone who is not a tax-dependent child: wages, business income, retirement income, investment income, Social Security, alimony, unemployment compensation, and financial and educational assistance (see Modeling Unemployment Compensation in the appendix). MAGI also includes the income of any dependent children9 required to file taxes, which for 2009 is wage income greater than $5,700 and investment income greater than $950. To compute family income as a ratio of the poverty level, we sum the person-level MAGI across the tax unit.

Current eligibility is determined based on state rules for 2010. State rules include income thresholds for the appropriate family7 size, asset tests, parent/family status, and the amount and extent of disregards8, for each program and state in place as of the middle of 2010 .

we estimate two separate probit models, each with the following covariates:

  1. Age Category: 0 – 5, 6 – 18, 19 – 44, 45 – 64.
  2. Health Status
  3. Worker Status (Household Level)
  4. Wage (Logarithmic Transformation)
  5. HIU Income to Poverty Threshold Ratio
  6. Number of Children
  7. Presence of a child in Public Coverage
  8. Citizenship Status
  9. Number of Adults in the Family

The dependent variable is an indicator of non-group non-exchange policy holder status. Again we compare each respondent’s predicted probability to a standard uniform random number and assign enrollment in the non-group non-exchange to those observations with probabilities that exceed the random number. Appendix Table 5 shows the overall new enrollment in the non-group non-exchange coming out of our model. It shows that the large majority of non-group enrollees outside the exchange are expected to come from single-person policyholders.

We develop a model, again based on HIPSM output, to predict which single ESI policy holders in the ACS are likely to switch to a family plan. We restrict our model to HIUs in which there is at least one single policy holder and at least one other member of the HIU that could potentially be covered by an ESI family plan. The eligible dependents include those with baseline non-group or uninsurance that had not already taken up coverage in a previous model. Note that we only model moving from an individual plan to a family plan; we did not model adding a dependent to a current family plan. Within the eligible group of single ESI policy holders, we use the following covariates to estimate the probability that they will switch to a family ESI policy:

  1. HIU Type: Individual, Unmarried with child, Married without Child, or married with children
  2. Age Category: 0 – 5, 6 – 18, 19 – 44, 45 – 64.
  3. Health Status
  4.  Worker Status (Individual Level)
  5. •Wage (Logarithmic Transformation)
  6. •HIU Income to Poverty Threshold Ratio
  7. •HIU Income to Poverty Threshold Categories (<138% FPL, 138% – 200% FPL, 200% – 300% FPL, 300% – 400% FPL, 400%+ FPL)
  8. •Number of Children
  9.  Presence of a child in Public Coverage
  10.  Citizenship Status
  11.  Firm Size
  12.  Education Status

These estimates assume that the ACA is fully implemented with the Medicaid expansion in all states and that the same basic implementation decisions are made across the states. At the time of writing, even states such as Massachusetts which have been on the forefront of ACA implementation had not finalized their plans, so any modeling of variation in state decisions would necessarily involve a lot of guesswork. Also, it will take several years for enrollment in new programs such as the exchanges and Medicaid expansion to ramp up so the full effects that are estimated under the simulation model would not be felt until 2016 or later. Enrollment in the initial years would also be affected by state and federal decisions. For example, in the proposed rules released by HHS in January 2012, the deadline for establishing unified eligibility and enrollment between Medicaid and the exchange was pushed back to 2015.

Health insurance status change and emergency department use among US adults.

Ginde AA, Lowe RA, Wiler JL.
Department of Emergency Medicine, University of Colorado School of Medicine, Aurora, CO.   http://www.ncbi.nlm.nih.gov/pubmed/22450213 
Arch Intern Med. 2012 Apr 23;172(8):642-7.   http://dx.doi.org/10.1001/archinternmed
Recent events have increased the instability of health insurance coverage. We compared emergency department (ED) use by newly insured vs continuously insured adults and by newly uninsured vs continuously uninsured adults. Overall, 20.7% of insured adults and 20.0% of uninsured adults had at least 1 ED visit. However, 29.5% of newly insured adults compared with 20.2% of continuously insured adults had at least 1 ED visit. Similarly, 25.7% of newly uninsured adults compared with 18.6% of continuously uninsured adults had at least 1 ED visit. After adjusting for demographics, socioeconomic status, and health status, recent health insurance status change was independently associated with greater ED use for newly insured adults (incidence rate ratio [IRR], 1.32; 95% CI, 1.22-1.42 vs continuously insured adults) and for newly uninsured adults (IRR, 1.39; 95% CI, 1.26-1.54 vs continuously uninsured adults). Among newly insured adults, this association was strongest for Medicaid beneficiaries (IRR, 1.45) but was attenuated for those with private insurance (IRR, 1.24) (P < .001 for interaction). Recent changes in health insurance status for newly insured adults and for newly uninsured adults were associated with greater ED use.

Health Insurance and Access to Health Care in the United States

Catherine Hoffman, Julia Paradise
Annals of the New York Academy of Sciences 2008; 1136.    http://dx.doi.org/10.1196/annals.1425.007 
Reducing the Impact of Poverty on Health and Human Development: Scientific Approaches pages 149–160, June 2008

In the United States, where per capita health care costs are the highest in the world and continue to escalate, health insurance has become nearly essential. Having reasonable access to health care rests on many factors: the availability of health services in a community and personal care-seeking behavior, for example. However, these and other factors are often trumped by whether a person can afford the costs of needed care. Health insurance enables access to care by protecting individuals and families against the high and often unexpected costs of medical care, as well as by connecting them to networks and systems of health care providers.
Health insurance, poverty, and health are all interconnected in the United States. This article synthesizes a large and compelling body of health services research, finding a strong association between health insurance coverage and access to primary and preventive care, the treatment of acute and traumatic conditions, and the medical management of chronic illness. Moreover, by improving access to care, health insurance coverage is also fundamentally important to better health care and health outcomes. Research connects being uninsured with adverse health outcomes, including declines in health and function, preventable health problems, severe disease at the time of diagnosis, and premature mortality.
Most working-age adults obtain health coverage for themselves and their dependents as a benefit of employment. However, this benefit has been gradually eroding as health premiums, in tandem with higher health care costs, grow at a rate far outpacing rates of general inflation and wages. In 2005, 61% of the nonelderly had insurance through an employer, down from 66% in 2000.1 Low-wage workers are far less likely than higher-wage workers to have access to job-based coverage. In 2005, more than half of workers in poor families and more than a third of those in near-poor families had no offer of job-based coverage in the family.2 When it is available, health insurance is often unaffordable for low-income people, whose household budgets are strained to meet food, housing, and other basic needs.

Figure 1. Health insurance coverage of the nonelderly population, 2006.

http://onlinelibrary.wiley.com/store/10.1196/annals.1425.007/asset/image_n/NYAS_1136007_f1.gif    Source: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of Current Population Survey, March 2007.
Those with Medicaid coverage are the most likely to be in fair or poor health because the program’s eligibility requirements include being severely disabled and/or low-income (fig. 2).

Figure 2. Percentage of U.S. nonelderly population reporting fair or poor health, by income and insurance status, 2006.

http://onlinelibrary.wiley.com/store/10.1196/annals.1425.007/asset/image_t/NYAS_1136007_f2_thumb.gif       Source: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of Current Population Survey, March 2007.
The model for healthcare reform was selected from that enacted in Massachusetts. Important statements from the Massachusetts Act are as follows:
to promote patient-centeredness by, including, but not limited to, establishing

  • 1137 mechanisms to conduct patient outreach and education on the necessity and benefits of care
  • 1138 coordination, including group visits and chronic disease self-management programs;
  • 1139 demonstrating an ability to effectively involve patients in care transitions to improve the
  • 1140 continuity and quality of care across settings,
  • 1146 establishing mechanisms to protect patient provider choice,

Individual Mandate

A provision called the individual mandate, requires all Americans to buy some form of health insurance. Whether it is constitutional was in question before the Supreme Court. While the mandate is separate from the provision allowing young adults up to the age of 26 to be covered under their parents’ policies, the court could have decided to scrap the entire law — instead of just the mandate — leaving millions of young adults in the lurch. The mandate was upheld.

For many young adults, affording health insurance on their own will be particularly difficult.  The unemployment rate for young adults age 16 to 24 was 16.4% in March, twice the national average for the population as a whole.  And many of those who do find jobs, often aren’t being offered health benefits.  Less than a quarter, or 24%, of workers between the ages of 19 and 25 were offered health insurance by their employers in 2010, down from 34% in 2000, according to the Employee Benefit Research Institute, an independent public policy organization. Meanwhile, nearly 57% of the rest of the working population between the ages of 26 and 64 were covered.

B. Economics of Universal Delivery of Care – Stakeholders’ Trade offs

There is no question that repealing the Affordable Care Act would cause health costs to skyrocket, particularly for seniors who rely on Medicare to help pay for their healthcare.
According to a new report released by the Kaiser Family Foundation, a healthcare analysis non-profit, repealing the Affordable Care Act would be disastrous for seniors, who would be forced to pay higher premiums, prescription drug costs, and copayments.
According to the report, if health care reform is repealed:
  • Medicare Part A deductibles and copayments would increase.
  • Part B premiums would go up.
  • Savings from closing the Part D donut hole would be eliminated, and the gap in prescription drug coverage would be reopened; under the Affordable Care Act, an estimated 3.6 million Medicare Part D beneficiaries saved an average of $600 each in 2011 once they hit the donut hole, and the donut hole will be closed by 2020.
  • Free preventive services would be eliminated; under the Affordable Care Act, seniors can now get many preventive services for free, including an annual wellness visit, mammograms and other cancer screenings, and other important health services.

U.S. Faces Crisis in Cancer Care

http://www.biosciencetechnology.com/videos/2013/09/us-faces-crisis-cancer-care?et_cid=3474892&et_rid=442219320

Wed, 09/11/2013

Delivery of cancer care in the U.S. is facing a crisis stemming from a combination of factors—a growing demand for such care, a shrinking oncology work force, rising costs of cancer care, and the complexity of the disease and its treatment, says a new report from the Institute of Medicine. The report recommends ways to respond to these challenges and improve cancer care delivery, including by strengthening clinicians’ core competencies in caring for patients with cancer, shifting to team-based models of care, and communicating more effectively with patients.

Adding to stresses on the system is the complexity of cancer and its treatment, which has grown in recent years with the development of new therapies targeting specific abnormalities often present only in subsets of patients. Incorporating this new information into clinical care is challenging, the report says. Given the disease’s complexity, clinicians, patients, and patients’ families can find it difficult to formulate care plans with the necessary speed, precision, and quality; as a result, decisions about cancer care are often not sufficiently evidence-based.

Another challenge is the cost of cancer care, which is rising faster than other sectors of medicine, having increased from $72 billion in 2004 to $125 billion in 2010, says the report.  The single largest insurer for those over 65, the Centers for Medicare and Medicaid Services (CMS), is struggling financially.

The report recommends strategies for improving the care of cancer patients, grounded in six components of high-quality cancer care. The components are ordered based on the priority level with which they should be addressed.

  1. Engaged patients. The cancer care system should support patients in making informed medical decisions that are consistent with their needs, values, and preferences. Cancer care teams should provide patients and their families with understandable information about the cancer prognosis and the benefits, harms, and costs of treatments. The National Cancer Institute, the Centers for Medicare and Medicaid Services, and other stakeholders should improve the develop­ment and dissemination of this critical informa­tion, using decision aids when possible.  Patients with advanced cancer face specific communication and decision-making needs, and cancer care teams need to discuss their options, such as revisiting and implementing advance care plans. However, these difficult conversations do not occur as often as they should; recent studies found that 65 percent to 80 percent of cancer patients with poor prognoses incorrectly believed their treatment could result in a cure.
  2. An adequately staffed, trained, and coordinated work force. New models of team-based care are an effective way to promote coordinated cancer care and to respond to existing work-force shortages and demographic changes. And to achieve high-quality cancer care, the work force must include enough clinicians with essential core competencies for treating patients with cancer. Professional organizations that represent those who care for patients with cancer should define these core competencies, and organizations that deliver cancer care should ensure their clinicians have those skills.
  3. Evidence-based cancer care. A high-quality cancer care delivery system uses results from scientific research to inform medical decisions, but currently many medical decisions are not supported by sufficient evidence, the report says. Clinical research should gather evidence of the benefits and harms of various treatment options so that patients and their cancer care teams can make more informed treatment decisions. Research should also capture the impacts of treatment regimens on quality of life, symptoms, and patients’ overall experience with the disease. Additional research is needed on cancer interventions for older adults and those with multiple chronic diseases. The current system is poorly prepared to address the complex care needs of these patients.
  4. A learning health care information technology system for cancer care. A system is needed that can “learn” by enabling real-time analysis of data from cancer patients in a variety of care settings to improve knowledge and inform medical decisions. Professional organizations and the U.S. Department of Health and Human Services should develop and implement the learning health care system, and payers should create incentives for clinicians to participate as it develops.
  5. Translation of evidence into practice, quality measurement, and performance improvement. Tools and initiatives should be delivered to help clinicians quickly incorporate new medical knowledge into routine care. And quality measures are needed to provide a standardized way to assess the quality of cancer care delivered. These measures have the potential to drive improvements in care, inform patients, and influence clinician behavior and reimbursement.
  6. Accessible and affordable cancer care. Currently there are major disparities in access to cancer care among individuals who are of lower socio-economic status, are racial or ethnic minorities, lack health insurance coverage, and are older. HHS should develop a national strategy that leverages existing commu­nity interventions to provide accessible and afford­able cancer care, the report says. To improve the affordability of care, professional societies should publicly disseminate evidence-based information about cancer care practices that are unnecessary or where the harm may outweigh the benefits. CMS and other payers should design and evaluate new payment models that incentivize cancer care teams to provide care based on the best available evidence and that aligns with their patients’ needs. The current fee-for-service reimbursement system encourages a high volume of care, but fails to reward the provision of high-quality care.

Institute of Medicine Calls for Immediate Reforms in Health Care (2012)

By Kimberly Scott, Managing Editor, G2 Intelligence
A new report from the Institute of Medicine released Sept. 6 calls for a broad range of reforms to make timely changes to the U.S. health care system that would provide high-quality care at lower cost. “Unmanageable” complexity in the science and administration of health care, coupled with costs that have increased at a greater rate than the economy as a whole for 31 of the past 40 years, make the status quo “untenable,” said Best Care at Lower Cost: The Path to Continuously Learning Health Care in America.
“If unaddressed, the current shortfalls in the performance of the nation’s health care system will deepen on both quality and cost dimensions, challenging the well-being of Americans now and potentially far into the future,” the report said.
The report, which follows a series of IOM studies on various aspects of the U.S. health care system, was written by the IOM’s 18-member Committee on the Learning Healthcare System in America. It was sponsored by the Blue Shield of California Foundation, the Charina Endowment Fund, and the Robert Wood Johnson Foundation.
A theme of the report is that “health care now must be a team sport,” Smith said. Physicians in private practice interact with as many as 229 other physicians in 117 practices for their Medicare patients, he said. An elderly patient with multiple chronic diseases can be on up to 19 medications a day, he said. About 30 percent of health care spending in 2009, an estimated $750 billion, was wasted on
  • unnecessary services,
  • excessive administrative costs,
  • fraud, and other problems, the report said.
An estimated 75,000 deaths might have been avoided in 2005 if every state had delivered care at the quality of the best-performing state, it said.
The report is available at http://www.iom.edu

Graphical Excursion into National Healthcare Expenditures

Dan Munro, Forbes
According to the Deloitte Center for Health Solutions, this number has been historically underreported – by a significant amount. In their report (The Hidden Costs of U.S. Health Care), they cite two important components that have not been included in tradtional calculations. The first is out-of-pocket spending by consumers on professional services and the second is the “imputed value of supervisory care provided to a friend or family member.” Using a conservative annual growth rate of 4% (from Deloitte’s baseline year of 2010), here’s what Deloitte suggests is our real NHE.

 NHEbyDCforHS1  NHE annual growth rate of 4%

http://blogs-images.forbes.com/danmunro/files/2012/12/NHEbyDCforHS1.png

The Kaiser Family Foundation also provided a comparison of cumulative increases in health insurance premiums – relative to Workers’ Contributions, Inflation and Workers’ Earnings (from 2000 to 2012).

percentageincreasekff  % increase in HI premiums

http://blogs-images.forbes.com/danmunro/files/2012/12/percentageincreasekff.png

Another annual chart is Medscape’s Physician Compensation Report: 2012 Results (slide #2 – 2011 data).

salaries1  physician compensation  (Medscape)

For those that may be relying exclusively on the transformative effects of PPACA (Obamacare) – this chart highlights the nominal impact of PPACA reform on our National Healthcare Expenditure. It’s from a Commonwealth Fund Issue Brief (May, 2010) – The Impact of Health Reform on Health System Spending (Exhibit #3 – page 5).
NHE-BeforeAfter   nominal impact of PPACA reform on our National Healthcare Expenditure  (Commonwealth Fund)
This last one from Mary Meeker’s landmark report – USA, Inc. (slide #111) – is definitely not new but it is foundational. It compares per capita costs and life expectancy across all 34 OECD member countries using OECD data from 2009.
cost1  per capita costs and life expectancy across all 34 OECD member countries using OECD data from 2009.

C. Political Divisions – Destiny of Healthcare Reform

An Oncology Perspective on the Supreme Courts Pending Decision Regarding the Affordable Care Act

By SK Stranne, MG Halgren, P Shughart. Washington, DC.
Beginning on March 26, 2012, the Supreme Court of the United States heard oral arguments regarding challenges to the recent federal health care reform legislation. The Court scheduled this unusually lengthy series of arguments to last for three days—a reflection of both the high stakes and the complexity of the legal issues involved.  We provide a summary of the questions under consideration by the Supreme Court regarding the health care reform legislation, and we explore how the pending decision on this high-profile matter may impact the oncology community.
Congress enacted the reforms through two separate bills. The two laws, the Patient Protection and Affordable Care Act[1] and the Health Care and Education Reconciliation Act of 2010,[2] have become known collectively as the Affordable Care Act (ACA). The Court is not charged with deciding whether the ACA is good health care policy, only constitutionality.

Issues Before the Court

[1] whether Congress has exceeded its powers with respect to two specific provisions of the ACA
One of these provisions is the law’s requirement that individuals maintain a minimum level of health insurance, which is often referred to as the “minimum coverage requirement” or the “individual mandate.” The other contested provision is the law’s expansion of eligibility and financial support for the Medicaid program, through which the federal government provides grants to state governments to help fund health insurance for the poor.
[2] the Obama administration contended that two powers delegated to Congress each provide sufficient authority for the minimum coverage requirement
[a] Immediately preceding the minimum coverage requirement in the text of the ACA itself, Congress offered its own lengthy justification of why the Commerce Clause, which is a provision in the Constitution that delegates to Congress the power of regulating commerce among the states, authorizes this individual mandate.
[b] the problem is … as much as they say, ‘Well, we are not in the market,’ … [the uninsured] haven’t been able to meet the bill for cancer, and the rest of us end up paying because these people are getting cost-free health care.” Ruth Bader Ginsberg.
[c] the Constitution’s Taxing and Spending Clause also gives Congress authority to enact the minimum coverage requirement and collect a penalty for noncompliance via federal income tax returns.
The arguments in favor of the ACA’s Medicaid expansion relied on the Taxing and Spending Clause and also on the Appropriations Clause, both of which are generally regarded as giving Congress significant discretion in dictating how federal funds are spent. However, the Court has previously indicated that Congress may not use its spending power to unduly coerce the states. The ACA’s opponents argued that the Medicaid expansion is unconstitutionally coercive because it attaches new terms (ie, the requirement to cover more people) to substantial existing funds (ie, the grants the federal government already gives to the states for the original Medicaid program and its various pre-ACA expansions). Due to the size of the Medicaid program, the argument goes, the states have no real alternative but to continue participating in Medicaid under the ACA’s terms.
The severability discussion concerns whether the Court would strike only the provision in question, only the provision in question plus some closely related provisions, or the entire ACA. The arguments on this issue mainly addressed the minimum coverage requirement and focused on the degree to which certain provisions of the ACA are linked with that provision and what Congress would have intended to occur if the provision were found unconstitutional.

Convergence is Coming: A Brave New World

KPMG Report  by Liam Walsh
Healthcare payers, providers and life sciences companies should be thinking beyond transformation and focus more on convergence and the implications of operating in a collaborative and integrated healthcare delivery model.  This has come about because
  • the business of healthcare is changing to an ‘outcomes-based’ system
  • that compensates organizations based on the effectiveness of a product or service, not as a consumable.
The result is a driver of consolidation, and participants will fall substantially over the next decade. It is expected that the evolving system will bring about significant benefits with a more effective system when the dust settles.  However,patients will have less choice in the market, either due to services having been consolidated with one provider or because payer incentives drive patients to more cost-effective options. But the rapid development of a digitalized data handling with introduction of superior analytics, and moving more information onto ‘smart devices’ is already beginning to transform the way we source, deliver and pay for healthcare services.  The restructuring is transforming the healthcare business models.

Transforming Healthcare: From Volume to Value

KPMG Healthcare & Pharmaceuticals  Sept 2012
Over the next decade, all parts of the healthcare services and life sciences industry will need to change, from revenue based on volume to revenue based on value, to be sustainable and cost effective.  The emphasis on sustainability requires
  • contracting for healthcare value and
  • improving the productivity of the healthcare workforce.
Given the current high costs and variable outcomes, the U.S. healthcare system is undergoing an unprecedented transformation.

Bundle with Care — Rethinking Medicare Incentives for Post–Acute Care Services

Judith Feder, Ph.D.

n engl j med  2013; 369(5):400
Although health policy experts disagree on many issues, they largely agree on the shortcomings of fee-for-service payment. The inefficiency of a payment method that rewards increases in service volume, regardless
of health benefit, has become practically indefensible. But replacing discrete payments for each service with bundled payment for a set of services does not simply promote efficiency; it also potentially promotes
skimping on care or avoidance of costly patients.
The Medicare program already has considerable experience not only with capitation payments to health plans for the full range of Medicare services but also with bundled payments for sets of services: inpatient hospital services are bundled into “stays,” skilled-nursing-facility (SNF) services are bundled into “days,” and home-health-agency (HHA) services are bundled into “episodes.”
The tip-off to the risk involved in offering powerful incentives for these providers to keep costs low is the presence of extremely high and varied profits, in a service area devoid of standards for high-quality care. In 2010, SNFs and HHAs earned profits of 19%, on average, and the top quarter earned in excess of 27%.
In theory these high and widely varying profits might reflect variations in efficiency. But two factors other than relative efficiency probably explain these margins. First is that classification of patients into payment categories for rate-setting purposes
  • is not sufficiently precise to eliminate variation in expected costs among the patients within a category.
Second is the long history of patient selection in nursing homes and recent evidence that the HHAs with the highest profit margins
  • provide fewer visits, despite serving patients with greater measured care needs.
Given the weakness of patient classification and quality norms, policymakers would do well to heed previous advice that, in these circumstances, a hybrid approach better balances efficiency and appropriate care.
Rather than replace fee for service with a single-payment system, I believe we should rely ona hybrid approach in which both savings and risk are shared. Providers would receive a share, rather than the full amount, of any excess payments over the actual costs incurred. Similarly, Medicare would pay a share of any provider costs that exceeded the amount of prospective payments. To encourage efficiency, the system would ensure that providers could earn a sufficient share of profits but would also bear the larger share of losses.
Sharing savings and risk would essentially produce for Medicare, which sets payment rates administratively, profit levels similar to those a competitive market would provide. When some providers are earning  excessive profits in a market, others will offer services at lower prices (earning lower profits) to attract more business. Sharing savings and risk gives Medicare a means of keeping profits high enough to maintain access for beneficiaries, while narrowing the range of profit levels closer to those a competitive market would produce.

Study: Bigger hospitals drive cost increases

By MATT DOBIAS | 5/7/12
For everyone out there worried that President Barack Obama’s health reform law will spur monopolies and make it easier for hospitals to raise their prices, a new study says it’s already happening, and it’s not because of the health law.
A study in the May edition of Health Affairs finds that hospitals’ power to win steep payment increases — and insurers’ relative inability to resist — varies quite a bit from one market to another and from one kind of hospital or hospital network to another. Reputation, location and the type of medical services provided play a role.

State Laws Hinder Obamacare Effort To Enroll Uninsured

President Barack Obama has set aside $67 million to make it easier to enroll in his health-care overhaul. Laws pushed by Republicans in 12 states may keep that from happening. Under the Affordable Care Act, the U.S. government plans to pay a network of local groups known as navigators to explain the law’s new coverage options to the uninsured and guide them through its online insurance markets (Bloomberg News: Nussbaum and Wayne, 8/23/2013).

Modern Healthcare: Reform Update: Employers Take Closer Look At Private Insurance Exchanges

With public small-business insurance exchanges opening Oct. 1, two studies released this week show employer interest in private insurance exchanges is growing. …
  1. the Kaiser Family Foundation found that 29% of employers with 5,000 or more employees are considering private exchanges as an option for buying healthcare coverage for their employees.
  2. A day later, consulting firm Towers Watson released its Health Care Changes Ahead survey, which found that 37% of employers think private exchanges are a reasonable alternative to traditional employer coverage in 2014 (Block, 8/22).

D. Looking in on the ACOs

ObamaCare’s Health-Insurance Sticker Shock

By Merrill Matthews and Mark E Litow, Forbes
Thanks to mandates that take effect in 2014, premiums in individual markets will shoot up.
Central to ObamaCare are requirements that

  1. (1) health insurers accept everyone who applies (guaranteed issue),
  2. (2) cannot charge more based on serious medical conditions (modified community rating), and
  3. (3) include numerous coverage mandates that force insurance to pay for many often uncovered medical conditions.

Guaranteed issue incentivizes people to forgo buying a policy until they get sick and need coverage (and then drop the policy after they get well).  While ObamaCare imposes a financial penalty—

  • —to discourage people from gaming the system,
  • it is too low to be a real disincentive.

The result will be insurance pools that are smaller and sicker, and therefore more expensive.
How do we know these requirements will have such a negative impact on premiums? Eight states—New Jersey, New York, Maine, New Hampshire, Washington, Kentucky, Vermont and Massachusetts—enacted guaranteed issue and community rating in the mid-1990s and wrecked their individual (i.e., non-group) health-insurance markets.
States won’t experience equal increases in their premiums under ObamaCare.  Ironically, citizens in states that have acted responsibly over the years by adhering to standard actuarial principles and limiting the (often politically motivated) mandates will see the biggest increases, because their premiums have typically been the lowest.
While ObamaCare won’t take full effect until 2014, health-insurance premiums in the individual market are already rising, and not just because of routine increases in medical costs. Insurers are adjusting premiums now in anticipation of the guaranteed-issue and community-rating mandates starting next year. There are newly imposed mandates, such as the coverage for children up to age 26, and what qualifies as coverage is much more comprehensive and expensive. Consolidation in the hospital system has been accelerated by ObamaCare and its push for Accountable Care Organizations.
Unlike the federal government, health insurers can’t run perpetual deficits. Something will have to give, which will likely open the door to making health insurance a public utility completely regulated by the government.

Health Insurance Premiums Will Rise

Merrill Matthews, Resident Scholar at Institute for Policy Innovation, Forbes
Subsidies cover a portion of the cost of health insurance, up to a maximum out of pocket for the family. The amount of the subsidy is based both on the cost of coverage and income. There has been a lot of head scratching over how to deal with the fact

  • that a family’s income can vary significantly within a year, up or down, in ways no one predicted at the beginning of the year.

So how does the government determine the correct level of subsidy? The PPACA has so many unknowns in the mix that actuaries don’t know how much to charge. This is a problem for setting annual rates.

Traditionally in the individual market, where people buy their own (i.e., non-group) health coverage, applicants sign a contract and the insurance company guarantees that premium for a year. No more. Health insurers started sending out notices in January informing insurance brokers and agents that

  • the companies will no longer guarantee that premium rate.

After carefully evaluating its individual market and rates, Aetna decided to discontinue its offer of an initial 12-month rate guarantee. This change applies to policies with a January 15, 2013 or later effective date, in all states where plans are sold. Existing members who are currently in a rate guarantee period will not be affected. Aetna published a notice saying in part, “While the policies will not have a 12-month rate guarantee, we fully expect the rates to stay the same until December 31, 2013.” While that announcement may alleviate the concerns of some, Aetna is not the only company ending the rate guarantee.
While the individual market has been relatively small (about 19 million people, according to the Employee Benefit Research Institute) compared to those with employer-based coverage (about 156 million), most honest analysts expect millions of employers to drop coverage and dump their employees into the individual market.

ACOs Can Save Medicare $$$, Study Finds

By David Pittman, Washington Correspondent, MedPage Today. Aug 27, 2013
An accountable care organization (ACO) established by a private insurer reduced costs of care for Medicare enrollees, a study in Massachusetts found.  Providers participating in the Alternative Quality Contract (AQC) — an early commercial ACO backed by Blue Cross Blue Shield of Massachusetts — reduced spending on Medicare beneficiaries by 3.4% after 2 years compared with enrollee costs at nonparticipating providers, ( Journal of the American Medical Association).

Medicare enrollees served by 11 provider groups in the AQC from 2007-2010 were compared with Medicare patients served by non-AQC providers. The study looked at quarterly medical spending and five quality measures, such as avoidable hospitalizations and 30-day readmissions. The AQC started in 2009 with providers bearing a financial risk for spending in excess of a global budget, gaining from spending below the budget, and receiving rewards for meeting performance targets.
Per-enrollee spending was $150 higher for patients of AQC providers than for those of non-AQC providers before the ACO took effect in 2009. Year-1 savings weren’t significant (P=0.18), but

  • by year 2, the AQC lowered Medicare beneficiary spending by 3.4% and the difference in spending between the AQC and non-AQC providers had dropped to $51 (P=0.02)

Savings came from reductions in outpatient services, including

  • office visits,
  • emergency department visits,
  • minor procedures,
  • imaging, and lab tests.

Also, savings were greater in patients with five or more conditions (P=0.002). Previous research showed the AQC reduced quarterly spending on Blue Cross patients by $27 per enrollee in year two.
ACOs have received sour press of late as nine of 32 pioneer ACOs — Medicare’s first and most advanced ACO provider groups — told the agency last month they want to leave the program. Despite that outlook and ACOs’ struggles to achieve consistent cost savings, Medicare-led ACOs (253) now outnumber commercial ACOs (235), according to a recent report from the consulting group Leavitt Partners.

New Care Models Look at Social Factors in Health

By David Pittman, Washington Correspondent, MedPage Today. Aug 22, 2013
Models such as PCMHs, ambulatory intensive care units, and medical neighborhoods should thrive on connecting patients’ clinical care with broader social services that can help provide better housing and other benefits. (ReportingOnHealth.org)
“The medical neighborhood coordinates care for patients at a community level, working with organizations in the community that can help expand the impact of healthcare and, more specifically, focus on the social determinants,” Manchanda (founder and president of HealthBegins) said. “And this fits more into the model of community-centered health home.” (Medicaid Medical Home)

  • Lack of access to good housing, places to exercise, safe neighborhoods, and health food sources make people more vulnerable to heart disease, diabetes, obesity, and other diseases.

Evidence is growing linking people’s physical environments and social conditions to their health. Three in four doctors wished the healthcare system would pay for the cost associated with connecting patients with needed social services. That aspect of the situation is improving with advent of PCMHs and other delivery models which pay for the care coordination of the most at-risk patients. This will be addressed by electronic medical records (EMRs) will help collect social history if EMR vendors provide an avenue for it to be requested and stored. The facilitation of internet communications will allow clinicians to share data with social services about their patients, and connect with patients themselves.

What Do Employers Want From Hospitals? The Rules of the Road

Aegis Health Group. 2013; 5(7).
Corporate America has long viewed the healthcare system as one of the biggest drains on the economy—and on the profitability of businesses nationwide. With the advent of Accountable Care Organizations as the model of the future for managing overall population health, hospitals are ideally positioned to harness this opportunity

  • to build profitable partnerships with employers.

In this paper hospital executives will learn about new approaches to this challenge along with some simple, tried-and-true rules of the road for attaining mutually beneficial partnerships with employers.

Why does Corporate America think the current state of healthcare is a quagmire – and that they are in the middle of it?

COST OF POOR HEALTH IN BILLIONS

 Medical & Pharmaceutical     $227
Wage Replacement                  $117
Lost Productivity                        $232

They are ready to take control of the issues and turn them from business detractors to business advantages. Consider this:

  • »» According to the 17th annual Towers Watson Employer survey on “Purchasing Value in Healthcare,” employee healthcare costs have increased 42 percent since 2007.
  • »» Total costs average more than $11,600 per employee each year, with employers paying out 34 percent more compared to just five years ago.
  • »» Healthcare now costs employers $576 billion annually.
  • »» These dollars relate not only to insurance premiums and the actual cost of care provided, but absenteeism and lost productivity when workers either do not show up or perform marginally on the job due to illness.

On the flip side workers have felt the sting as well. With more employers scaling back benefits or selecting higher-deductible plans, employee out-of-pocket expenses and payroll deductions for premiums increased 82 percent, averaging $5,000 per year according to the same Towers Watson survey. The escalation of healthcare costs almost mirrors the increasingly poor health of U.S. adults. Only one in seven workers are of a normal weight and free from any chronic health conditions, such as diabetes, hypertension or heart disease.
A full 62 percent of employers want to increase employee wellness and preventive health programs. Hospitals are well positioned to provide

  • the medical talent, best practices and expertise required for a comprehensive workforce health initiative (WHI).

As the country moves toward an accountable care model of healthcare delivery, the timing has never been better for hospitals to take a leadership role in developing population health programs in the workplace and beyond.

Employee View: Who provides the greatest value in healthcare?

Primary Care                  60%
Prescription Drugs        50%
Hospitals                         47%
Specialty Care               46%
Wellness Programs      43%
Health Insurance
Plans                               39%
Retail Clinics                  31%
In a Deloitte Center for Health Solutions survey in 2012, employers ranked primary care and hospitals as providing the most value to the healthcare system. Yet it is not unusual for 30 percent of employees to report they have no primary care physician. These are consumers who may be at significant risk for hidden health problems that may become chronic conditions later on. Employers have a vested interest in linking these employees with a primary care doctor sooner rather than later.

What are the Six Sigma Elements of an Effective Workforce Health Initiative?

The most effective workforce health initiatives take a data-driven approach to enhancing the health of a defined population. The five key steps in the Six Sigma process actually reflect the major tactics of a WHI and population health strategy.

 48-Graph-4-30_2012  Age-Adjusted Prevalence of Cardiovascular Disease Risk Factors in Adults, U.S., 1961–2011

49-Graph-4-31_2012  hypertension, treated awareness

52-Graph-4-35_2012  Total Economic Costs of the Leading Diagnostic Groups, U.S., 2009

278px-Preventable_causes_of_death

8443-exhibit-2-7  nonelderly population uninsured

8443-exhibit-2-8  nonelderly uninsured under ACA with all states expanding Medicaid

8443-exhibit-2-3  increase in medicaid_CHIP all states expanding medicaid

Causes_of_death_by_age_group

correlates of in-hospital mortality

healthprices  time price of HC over 50 years

fs310_graph3  leading causes of death by income class worldwide

FUSA_INFOGRAPHIC_50-state-medicaid-expansion_rev_06-27-13_FACEBOOKCOVER

milliman1   2012 Milliman Medical Index

hhs_medicare_docs   participating in and billing Medicare

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