Health Care Trends

What gets prescribed and why: Opioids v. obesity meds

By M2|2018-12-06T18:37:08+00:00December 6th, 2018|Chronic pain, Evidence-Based Medicine, Health Care Trends, Insurance, Uncategorized, What do we pay for and why|

What gets prescribed and why: Opioids v. obesity meds

The U.S. health care system doesn’t always make sense. Sometimes, even when there is some logic to it, the reasons underpinning what gets prescribed by practitioners and covered by insurers are disappointing. Two pieces I read recently provide examples.

In one study, we learn that while primary care physicians are prescribing opioids less often, other specialists and nurse practitioners are prescribing them more often. Ultimately, opioid prescribing remains at a high level, despite known issues with misuse and abuse, and the availability of alternative pain treatments.

At the same time, while 40% of U.S. adults are obese, fewer than 2% of obese patients are offered medications for obesity, and ultimately “only about 1% of eligible patients fill a prescription for a weight loss medication.” Even when weight loss medications are prescribed, it is usually for a specific (fairly short) period of time, explained Dr. Caroline M. Apovian, a Professor of Medicine and Pediatrics, Department of Medicine, Section of Endocrinology at Boston University School of Medicine and the Director of Nutrition and Weight Management, Department of Endocrinology, Diabetes, and Nutrition, at Boston Medical Center, in an opinion piece in Medscape.

This is an example of what we like to call at M2: “what do we pay for and why?” If 40% of the public has a disease, why aren’t treatments prescribed and covered? Several chronic obesity management medications have been approved by the U.S. Food and Drug Administration (FDA) in the past few years, and have proven of efficacy of 5%-10% weight loss, but Dr. Apovian argues that “public perception of obesity as a matter of will power rather than a disease” is a key barrier to lower treatment rates for obesity.

The U.S. health care system doesn’t necessarily pay for what works, or the treatments people need. As with all policy decisions, there is a judgment about who deserves what, and who should pay for it. In the case of treating obesity with a prescription, Dr. Apovian succinctly explains the current policy stance: “If obesity is considered a moral failing, why treat it with a pill or surgery?”

What’s the hold up? Why do physicians not turn more frequently to the known effective treatments for obesity? Well, sometimes it is lack of proper training (discussed in our in April). Physicians have a lot to stay up to date on, and obesity treatments are often not prioritized despite the prevalence of comorbidities. As we discussed in a back in February, improved insurance coverage for proven effective weight loss treatments could help avoid expensive complications from obesity down the road and may improve quality of life. We suggest this is a better way to choose what is covered the current approach.

Pain affects a large number of people in the U.S. as well – more than 100 million adults. Nearly 40 million adults experience the highest levels of pain (category 3 or category 4), and there are more than 25 million adults who report chronic (daily) pain. Further, the Centers for Disease Control and Prevention (CDC) Guideline for Prescribing Opioids for Chronic Pain is clear: “Opioids are not first-line or routine therapy for chronic pain.” Despite this clear recommendation, as the recent study confirms, opioids continue to be frequently prescribed for pain, even though there are less addictive alternatives available. These medications aren’t that expensive so are frequently covered by insurance.

The M2 blog, Coverage Drives Treatment: The Case of Pain explains how insurance companies seem to prefer to cover what is inexpensive, and perhaps less effective, at least when it comes to opioids for pain.

Confounding situations like this are when we understand why an overhaul of the health care system is appealing to some. It would be an incredible opportunity to step back and create a new system that approaches all situations – obesity, pain, everything – from the perspective of longer term effectiveness. Ultimately this would reduce health care system costs overall, as less time (and money) would be spent covering up symptoms of something that is likely to cause greater expense down the road.

But in order to do this, we’d have to face who we think deserves what kind of care. These decisions are baked in to the system we have and rarely discussed. 2019 is around the corner. Should we start this conversation in the new year?

States Help Drive National Solution to Help Patients Pay Less for Drugs

By M2|2018-10-15T16:42:41+00:00October 12th, 2018|Health Care Trends, Out-of-pocket spending, State Health Initiatives, Uncategorized|

States Help Drive National Solution to Help Patients Pay Less for Drugs

This week, President Trump signed two bills to help consumers choose lower priced drugs, the Patient Right to Know Drug Prices Act and the Know the Lowest Price Act of 2018. As state health policy people, we are glad to see the work of the past several years gaining the attention of policymakers everywhere, and improving access to health care for patients.

Between 2015 and 2018, 28 states passed laws banning a practice that prevented pharmacists from telling patients whether a lower price drug was available to them at the pharmacy counter. (See map from National Conference of State Legislatures below).

The so-called “gag clauses” were a common feature of contracts between pharmacies and pharmacy benefit managers until pharmacists started to speak out – usually in violation of the contract – that they were being banned from telling patients when a drug might cost less if they didn’t use their insurance. It seems simple on its face that a pharmacist, or any health care provider, should be able to give information to patients related to what the patient will have to pay for treatment.

We are proud to have been a part of state leadership on this issue in our role as state health policy advisors, and we are pleased to see this common sense approach is now the law of the land.

Are $59 Virtual Visits at CVS Health a Play for Women?

By M2|2018-08-23T13:49:46+00:00August 22nd, 2018|Health Care Trends, Innovation, Retail Health, telehealth, Uncategorized|

Are $59 Virtual Visits at CVS Health a Play for Women?

Last week we wrote about how CVS Health offering $59 telehealth video visits through the company’s retail medical clinic, MinuteClinic, would significantly change the health insurance market. This week, we are going a step further to consider the specific effects of the CVS Health offering for women.

As covered previously, CVS Health is looking to serve people with routine health needs who are shopping for lower costs. Who is doing that shopping? Primarily women. Women make “80% of the health care decisions for their families.” If the woman is a mother, surveys show more than 75% of the time, she is responsible for choosing a child’s health care provider and taking the child to health care appointments. Women who aren’t mothers are also often caregivers – nearly 50% of women without kids make health care decisions for a family member.

The combination of increasing deductibles – more than half of cost-sharing payments were in the form of a deductible for the first time in 2016 – and increasing need for health care at convenient times has already driven women to be the most likely users of retail clinics.

According to FAIR Health, in 2016, women accounted for a higher percentage of retail visits covered by insurance than men in nearly every age group. For people between the ages of 19 and 30 who visited a retail clinic, nearly 70% of visits were by women, as the chart below shows.

CVS Health, no doubt, already knows women are the primary users of their in-person MinuteClinics. Converting women MinuteClinic visitors to $59 telehealth visits shouldn’t be too difficult since women are the primary health care decision makers, and the virtual visits are cheaper and more convenient than going in-person to a CVS store.

Will other health care organizations follow CVS Health’s lead and start to cater more to women as health care consumers? Theirs seems like a data-driven strategy that other entities might be wise to emulate. Just as the $59 virtual visit will disrupt the health insurance market, the new CVS Health offering could also change the way the health care system meets the needs of the primary health care decision-maker in the U.S. – women.

CVS Health Just Upended the U.S. Health Insurance Market

By M2|2018-08-15T13:38:07+00:00August 14th, 2018|Health care spending, Health Care Trends, Health Plans, Health Reform, Innovation, Insurance, Out-of-pocket spending, Retail Health, telehealth, Uncategorized|

CVS Health Just Upended the U.S. Health Insurance Market

For $59, CVS Health will now offer telehealth video visits through the company’s retail medical clinic, MinuteClinic. The video visits will be available through the CVS Pharmacy App to anyone interested who lives in Arizona, California, Florida, Idaho, Maine, Maryland, Mississippi, New Hampshire, and Virginia – and Washington D.C.

This move will significantly change the health insurance market, and CVS’s merger with giant insurer Aetna isn’t even final, though reportedly, the “Justice Department’s antitrust division hasn’t turned up vertical competition concerns from the merger,” increasing the odds significantly that the deal closes before the end of the year.

What does CVS Health see that is driving this strategy? A shifting private health insurance market that requires people to pay up front for routine care, making consumers more sensitive to costs and less obligated to use a provider that is “in-network.” In the olden days (2006!), as the chart below shows, patients paid the majority of their cost-sharing payments in the form of copayments or coinsurance, that is, payments to providers who had an agreement with a health insurer. In 2016, for the first time, more than half of cost-sharing payments were in the form of a deductible, as the chart below from the Peterson-Kaiser Health System Tracker shows.

MinuteClinic video visits for $59 (paid for directly by the consumer) capitalize on three ongoing trends: 1) Patients have to pay more, before insurance starts to pay for claims, making consumers more sensitive to cost; 2) Patients want more convenience and CVS can deliver it more cheaply, in no small part because there are no insurance forms or administrative costs; and 3) Payers are reluctant to pay for virtual visits.

First, CVS Health is looking to serve people with routine health needs who are shopping for lower costs.

According to FAIR Health, the median charge for a new patient office visit at a retail clinic in 2016 was $109, compared to $294 in an office setting. The average charges and allowed amounts for the most typical retail clinic visits are shown in the chart below from the FH Healthcare Indicators™ and FH Medical Price Index.™

Simply put, the video visits will be cheaper than retail clinic visits. And, even if a patient is referred from the MinuteClinic video visit to one of the 1,100 MinuteClinic physical locations, that patient is likely to save more than $100 for the visit compared to going to a physician visit.

Second, CVS is looking to leverage the steep rise of people seeking care in retail clinics, by offering a clear value proposition to use a MinuteClinic virtually because it’s cheaper and more convenient. As the chart from FH Healthcare Indicators™ and FH Medical Price Index™ below shows, retail clinic visits increased by 847% from 2011 to 2016 with growth in rural areas increasing by 704% and in urban areas by 865%.

Clearly, CVS Health knows their potential customer well. A survey of 5,000 virtual visit users published by the Advisory Board in April shows more than 33% of people who had a virtual visit lived in a city, compared to 9% who lived in the suburbs or rural areas. Virtual visit users are also high earners – 52% “make more than $71,000 a year,” and are more likely to have private insurance.

Third, CVS Health sees that getting insurance companies to pay for virtual visits is hard. Forbes recently touted telehealth in article titled, “Lower Cost Higher Quality Health Care Is Right At Our Fingertips“ but the author was blunt in his explanation of what is holding telehealth back:

“The biggest obstacles? Government. Insurance companies. Employers. They pay the bills. Not only have they been slow to take advantage of telemedicine, they are refusing to pay for most of it…”

Getting a virtual visit via the free CVS/pharmacy app for just $59 means a person can go around his or her insurance company – and CVS avoids that hassle, too. Here are just a few ways that CVS Health’s approach differs from regular health insurance: You don’t need a referral. You don’t need to wait days for an appointment. You probably don’t have to take time off work because the virtual visits are available 24 hours a day, 7 days a week.

If you are one of the 40% of people who has employer-sponsored insurance but is enrolled in a high deductible health plan (HDHP), you probably love the idea of a cheaper alternative to a retail clinic since you are accustomed to paying out-of-pocket for your basic care now. Even if you have insurance, it doesn’t matter, because the virtual visits can only be paid for with a credit or debit card (CVS Health said they will add insurance coverage and national coverage by the end of the year).

Insurers have been offering limited products, in limited geographies, with limited providers, their “network,” for years. The launch of MinuteClinic video visits will be trumpeted as a huge value for consumers. That is only half the story. How will health care providers convince people who are mostly healthy that they have to wait for appointments between 10am and 3pm at a complex, integrated health system where they have to pay to park? How will insurers convince people to continue to buy the expensive, comprehensive coverage on offer today? This move will start to change the way people think about what insurance is even for. Now THAT is disruptive.

Right Care at the Right Time in the Right Way – The Case of Antibiotics

By M2|2018-07-26T19:36:55+00:00July 26th, 2018|Evidence-Based Medicine, Health Care Trends, Retail Health, Uncategorized|

Right Care at the Right Time in the Right Way – The Case of Antibiotics

One of the most difficult problems to address in the U.S. health care system is treatment recommendations that are out-of-date, inaccurate, or based on an incorrect diagnosis. We write about this topic frequently () and Dr. Atul Gawande (who was recently named as the CEO of the new company being formed by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co.) highlighted it most recently in a conversation with reporter Judy Woodruff at the Aspen Ideas Festival. Gawande argued there are three sources of waste that require different work but the biggest bucket is misutilization, “meaning the wrong care, at the wrong time, in the wrong way.”

A perfect example is antibiotic use. According to the Centers for Disease Control and Prevention (CDC) about 30% of antibiotics prescribed in physician’s offices and other outpatient settings are unnecessary. Further, says the CDC, “even when antibiotics are needed, prescribers often favor drugs that may be less effective and carry more risk over more targeted first-line drugs recommended by national guidelines.” In other words, clinical recommendations are often out-of-date or simply not following guidelines.

In urgent care centers, an increasingly popular site of care, the problem is even worse. According to a brief published this month by The Pew Charitable Trusts, “46% of all urgent care visits for non-antibiotic recommended diagnoses resulted in an antibiotic prescription,” compared to 14% of the time in retail clinics, 25% of the time in emergency departments, and 17% in office-based clinics. Acute respiratory conditions, for example, asthma and allergy, bronchitis, flu, and pneumonia are common reasons for a visit to a physician’s office or clinic, but in urgent care centers, it is fairly likely an antibiotic will be prescribed for these conditions, when they shouldn’t be, as shown in the table from Pew below.

Considering urgent care usage has skyrocketed in recent years, increasing by 1,675% (that is not a typo!) in rural areas and 2,308% in urban areas between 2007 and 2016, the higher rate of inappropriate antibiotic use is an even bigger problem than just comparing prescribing rates across site of care might indicate.

Inappropriate antibiotic prescription use plus skyrocketing urgent care visits equals a perfect case of “wrong care, at the wrong time, in the wrong way.”

Consumerism: “Activity in Search of Strategy”

By M2|2018-07-17T19:59:47+00:00July 17th, 2018|Health Care Trends, Health Reform, Hospitals, Providers, Retail Health, Uncategorized|

Consumerism: “Activity in Search of Strategy”

Consumerism is a hot topic in health care. Whether you define it as (a) improved personalization (as Robert Sahadevan, Senior Vice President of Consumer Marketing & Analytics at Humana and formerly the VP of United Airlines’ Mileage Plus frequent-flier program does), or (b) understanding and meeting/exceeding customer expectations, or (c) encouraging patients to act like consumers by actively choosing where to spend their health care dollars, consumerism is a focus in practically every health care business across the country.

The trouble is, while consumerism is a focus, it seems much of this work in health systems and hospitals at least, is “activity in search of strategy,” according to KaufmanHall, a strategic, financial, and operational performance advisory firm.

The KaufmanHall 2018 Healthcare Consumerism Survey included more than 425 respondents across 200 health systems, stand-alone hospitals, children’s hospitals, and specialty hospitals. “Improving customer experience” was a top strategic priority for 90% of the respondents. Still, the survey found “these efforts need to be more strategic, more effective, and more rapidly implemented if legacy healthcare organizations are to grow and compete in an increasingly consumer-focused world.”

Where is the disconnect? Why is there so much activity that isn’t strategic or likely to be effective? Seemingly, it’s because these health care organizations are focused on the ways they would like to improve customer service, not necessarily on the ways consumers would like to see access and care changed.

Example 1: Consumer Access

The KaufmanHall 2018 survey respondents ranked high on access to bricks and mortar health care facilities. More than half said their organization had an urgent care center, 40% said they offered access to freestanding imaging sites, and outpatient centers were widely available.

More innovative care options, that some studies show are preferred by consumers, were not as common. Video visits were only available at 14% of the respondent facilities, and retail clinics were only available at 27% of health systems or hospitals surveyed.

Example 2: Consumer Convenience

Consumers who are accustomed to clicking a button and receiving a shipment later that day, or horrors, the following day, don’t want to wait a week or a month for an appointment to see a health care provider. Conveniences such as same-day scheduling of appointments, online scheduling, and extended hours are expected by consumers, but few organizations are delivering. The chart below shows only about a third of the KaufmanHall respondents offer same-day appointments or extended hours for primary care. Only 20% have fully implemented online self-scheduling.

Example 3: Consumer Frustration

Notably, interactions with the health care system that patients and consumers find frustrating are not typically much of a focus for health care organizations. One example is reducing office wait times. Just 17% of the KaufmanHall respondents have a full implemented initiative to address wait times. Another example is billing. It isn’t for lack of understanding billing as a customer pain point that organizations aren’t prioritizing it: “Billing is confusing and frustrating and stressful, and it is their last interaction with us,” one executive explained in the survey, yet only 28% of respondents had fully implemented customer-friendly billing statements. Organizations instead seem focused on changes easy for them to make, such as ensuring phone numbers are easy to find and providing customer service training for staff (see chart below).

Example 4: Pricing

“Of all the key areas related to consumerism in healthcare, pricing strategy provides the most room for improvement for the nation’s hospitals and health systems,” according to KaufmanHall. Asking any person who has interacted with the system, and indeed, most policymakers, you will get the same answer. Consumers need more information about the prices of the services or products they have been told to buy by their health care provider – whether a surgical intervention or prescription medication. Only 5% of the KaufmanHall respondents are “aggressively pursuing” consumer initiatives related to pricing strategy and/or price transparency. Only 10% list prices online and less than half can provide a consumer-requested price quote in a defined period of time.

Design Thinking Opportunity in Consumerism

We have written a book chapter titled, Using Small Step Service Design Thinking to Create and Implement Services that Improve Patient Care, for the upcoming book, “Service Design and Service Thinking in Healthcare and Hospital Management” from Springer Publishing (due out this fall). The chapter is about using design thinking in health care services and provides two case studies about organizations that have done it well. As the KaufmanHall 2018 State of Consumerism in Healthcare showed, many organizations are involved in activities that address the consumer experience, but most of these activities are not strategic aligned with what consumers actually want. Better understanding the customer – for example, by using the five-step design process – would likely improve these organizations’ efforts to exceed customer expectations. Until health care organizations can look outside their own experience, improving consumerism is likely to be very slow going.

More on social determinants of health: What are they, why are we talking about them so much, what’s happening now?

By M2|2018-06-15T19:32:48+00:00June 15th, 2018|Health Care Trends, Health Disparities, Health Information Technology, Health Reform, Innovation, Public Health, Social Determinants of Health, Uncategorized|

More on social determinants of health: What are they, why are we talking about them so much, what’s happening now?

Here at M2, we spend a lot of time thinking about the social determinants of health (SDH), or the nonmedical factors that can affect a person’s overall health and health outcomes. We have blogged recently about this issue, and . The issue is gaining momentum and we are seeing more articles and studies addressing how to better incorporate SDH into programs and technologies; for example, former CMS administrator Andy Slavitt recently announced his new venture capital firm will focus on companies in this area. Another recent article highlights the opportunities for technology entrepreneurs as adoption rates for SDH technologies are projected to increase over the next ten years. Today we are taking a close look at a recent position paper from the American College of Physicians (ACP).

SDH are defined as “the conditions in which people are born, grow, work, live, age, and the wider set of forces and systems shaping the conditions of daily life”. In other words, “where a person is born and the social conditions they are born into can affect their risk factors for premature death and their life expectancy,” the ACP notes in its recent paper.

SDH are “responsible for most health inequalities,” the ACP says; the paper examines the complex issues involved and provides recommendations on “better integration of social determinants into the health care system while highlighting the need to address systemic issues hindering health equity.”

The paper was drafted by the ACP’s Health and Public Policy Committee, and the ACP notes that it is charged with addressing “issues that affect the health care of the U.S. public and the practice of internal medicine and its subspecialties.”

“Understanding and addressing social factors that affect health outcomes is a pressing issue for physicians and medical professionals,” the ACP says. The group is issuing a set of recommendations “to empower stakeholders to advocate for policies aimed at eliminating disparities and establishing health equity among all persons.”

The paper features nine policy recommendations. Most notably, these include: integrating SDH into medical education at all levels; adequately funding federal, state, tribal, and local agencies in their efforts to address social determinants of health; developing best practices for utilizing electronic health record (EHR) systems as a tool to improve health without adding to the administrative burden on physicians; and adjusting quality payment models and performance measurement assessments to reflect the “increased risk associated with caring for disadvantaged patient populations.”

Expanding on one of the recommendations above – the importance of EHRs and collecting data – the paper notes that in 2014, a National Academies of Science committee identified 12 social determinants to be included in EHRs as part of meaningful use stage 3, and issued recommendations on standardizing collection of measures of these social determinants. Several behavioral and social domains are currently collected: tobacco use; alcohol use; race/ethnicity; and residential address, which is geocoded.

The report says that in terms of racism and health equity, the ACP’s policy on racial and ethnic health disparities “acknowledges that addressing social determinants of health is a key component to increasing health equity among racial and ethnic populations.”

Social determinants “can exacerbate health care disparities among racial or ethnic groups,” the paper says. “Socioeconomic status, race, and ethnicity are connected in a complex, multidimensional way and may affect a person’s health independently or in combination.” As an example, the ACP notes that Latina women experience a greater incidence of cervical cancer and higher mortality rates than non–Latina women. Access to care for Latina women is also affected, as they are more likely to lack health insurance than white non-Latina women.

SDH has been a bit of a buzzword for a while in public health circles, but it may finally be time for SDH to influence policy, as seen by ACP’s efforts. “Why now?” many are wondering. As proof points pile up, and more people gain an understanding of what SDH are, the concept is gaining momentum and being included in more discussions.

For example, it’s interesting that one of the largest physician groups has developed policy positions on SDH. This may be an indication that physicians in general are realizing the significant role that SDH play in individuals’ health. Incorporating an understanding of SDH into not only the practice of medicine, but also into the tools and incentives that drive patient care, would be welcome steps in helping to reduce the negative health outcomes related to SDH.

Who Should Be Allowed to Help Patients Pay Health Costs?

By M2|2018-06-06T17:07:51+00:00June 6th, 2018|Health care spending, Health Care Trends, Health Reform, Insurance, Medicaid, Medicare, Out-of-pocket spending, Reimbursement, State Health Initiatives, Uncategorized|

Who Should Be Allowed to Help Patients Pay Health Costs?

If you can’t pay your health insurance premium, should you be allowed to have someone else pay it for you? What about your deductible? Your co-insurance or a copayment? These might seem like trick questions, but no. There really are circumstances when a person can’t receive help for health care costs. In the past few years, this has become a hot topic in health policy circles as health care costs continue to rise. At issue is a fundamental question we have considered before: whose health care costs should be managed, those of the healthy or the sick? Is it better to have sick people pay more so that healthy people who buy insurance can keep their premiums low? Or is it better to spread catastrophic health costs across larger pools of people so everyone pays a little in order to avoid ever paying a lot?

Third-party payments: Friend or foe?

When the Affordable Care Act was being debated nearly a decade ago, the American Enterprise Institute correctly pointed out, the entire U.S. health care system “relies on a third-party payment system.” That is, either individuals or employers make payments to insurers who in turn make payments to health care providers, or taxpayer money is used to pay health care providers who care for people covered by Medicaid, Medicare, TriCare or other public programs.

While the big picture debate of how to finance and provide health care services and for whom continues, this blog is focused on a more specific type of third-party payments (TPP). Right now, states and the feds are being asked to weigh in on which third parties should be allowed to pay insurance premiums or healthplan-required cost sharing, for example, a deductible or a health care service or product copayment. The debate at this moment is focused on people with chronic, severe, or expensive health care needs – people who need kidney dialysis, for example. The feds have been trying to work out guardrails since 2013 related to whether a third-party organization can pay for a person’s premiums in the state insurance exchanges. (For a deeper dive, go here). California has also joined the fray and is considering a bill, SB 1156, “Health care service plans: 3rd-party payments,” setting forth who will be allowed to make TPP for health insurance premiums.

Representing the “foe” side is America’s Health Insurance Plans (AHIP). A recent brief titled “How Third-Party Premium Payments Can Harm Consumers and Destabilize Markets” argues that TPPs from “entities steering Medicare and Medicaid eligible beneficiaries into qualified health plans (QHPs) sold through the Affordable Care Act (ACA) marketplaces…can increase the number of older and less healthy individuals in the individual market risk pool, resulting in higher premiums for all consumers and further destabilizing the market.” In support of SB 1156, the California Labor Federation presents a similar point-of-view, arguing that allowing TPPs of premiums for individuals with chronic or severe illnesses “also shifts costs onto commercial plans, driving up health care spending and increasing premiums for Californians already struggling with rising costs.” Who should pay when a person is sick? Is it always the better choice to shift costs to taxpayers by requiring a person who needs dialysis to enroll in Medicaid or Medicare, as AHIP suggests? How should we balance the interests of individuals and employers who want low health care premiums with the needs of patients with high health care costs?

Representing the “friend” side is The Commonwealth Fund in “Assessing the Promise and Risks of Income-Based Third-Party Payment Programs.” Their brief acknowledges the policy debate outlined above regarding TPP programs serving patients with specific health diagnoses, but focuses on TPP programs that address health care costs for a different population, noting, “History suggests that TPP programs can address low-income consumers’ affordability concerns on a large scale.”

Many of the guardrails set forth by The Commonwealth Fund parallel the California bill, including basing eligibility for TPP on income and paying “consumers’ premium shares from the point of enrollment through the end of the coverage year, thus preventing short-term enrollment that ends once a course of treatment is complete.” These guardrails seem to address several of the foe’s concerns. First, basing TPP on income means both the healthy and the sick can gain access to health insurance, which makes it much less likely that premiums rise due to a sicker risk pool. Second, AHIP argues consumers can be harmed “particularly if the third party stops making premium and cost-sharing payments once initial treatment is received, which could result in serious or life-threatening interruptions in access to care.” Requiring entities that provide TPPs to pay for more than just initial treatment addresses the foe’s concern.

I’m an aunt. Can I pay for my nephew’s prescription drug cost sharing?

One of the remaining concerns at the heart of TPP for health insurance premiums or health plan required cost-sharing (such as co-payments) relates to whether the organization making the TPP is motivated by financial gain or is steering patients to specific health care products, services, or providers. Federal law prohibits most TPPs in federal health programs, for example, Medicaid and Medicare, considering the TPPs to be in violation of one or another fraud and abuse law, such as the Anti-Kickback Statute and the Physician Self-Referral Law (Stark law).

While it makes sense that a health care provider should not be allowed to accept bribes, it is much less clear who should be allowed to help patients pay health costs. The way the U.S. health care system works today, if a person is not eligible for government-sponsored health care (for example, through Veterans Affairs, Medicare, or Medicaid) and they cannot pay for individual health care costs, whether premiums or cost-sharing such as copayments or deductibles, the person can usually be denied care. To be clear, AHIP is arguing that private entities, or groups of people, cannot come together and help such an individual make the health plan-required payments. The California bill says, “Any member of the individual’s family” can make a TPP, but then goes on to define “family” only to “include the individual’s spouse, domestic partner, child, parent, grandparent and siblings.”

This begs the question of what should be allowed when it comes to TPPs. What entities should be allowed to pay for patient’s health care costs?

Medical crowdfunding, such GoFundMe campaigns?
Health care sharing ministries?
Contributions gathered voluntarily by employees to help a co-worker with cost-sharing requirements? Or by a congregation to help a fellow churchgoer?
Employer emergency funds?
Family members helping family members, (let’s say Aunts, for example…)

It is quite clear that the alternative to the TPP being made is no payment being made, which certainly would cause an interruption in access to care for the patient who needs it. Like most health policy issues, TPPs can be either friend or foe and a one size fits all policy won’t work. Creating guardrails focused on allowing entities, including those in the list above, help patients pay their medical bills should be paramount.

States May Be Interested in Value-Based Payments, but Commercial Insurers Are Not

By M2|2018-05-31T15:01:26+00:00May 30th, 2018|Health Care Trends, Health Reform, Medicaid, State Health Initiatives, Uncategorized|

States May Be Interested in Value-Based Payments, but Commercial Insurers Are Not

CMS has issued the fourth of five planned annual reports on its Medicaid State Innovation Models (SIM) Initiative. Under the SIM initiative, six “test states” – Arkansas, Maine, Massachusetts, Minnesota, Oregon, and Vermont – have been awarded funds and are using policy levers to facilitate the creation or spread of innovative models and integrating population health and broader stakeholder perspectives into health care delivery and payment redesign models. The latest report describes the experiences of providers, health systems, consumers, payers, and state officials during the final full implementation year.

The evaluation, conducted by RTI International, working with The Urban Institute, National Academy for State Health Policy, and The Henne Group, found all six states have introduced value-based payment models (VBP models) in their Medicaid programs and are offering technical assistance to providers, social service and community-based organizations, and others to implement new delivery system models. States are also offering services, such as health IT and data analytic investment, that “enable or improve model effectiveness,” according to the Year 4 Annual Report.

However, the evaluation found “limited interest” among private payers and insurers in aligning their existing VBP models with state models. “All states struggled with effective engagement of private payers and insurers to expand VBP models beyond existing efforts and to achieve alignment across multiple payers,” the report finds. “Although private payers and insurers were willing to discuss the states’ conceptualization of VBP models, most did not make changes to the VBP models they offered to providers.”

As a result of limited interest among commercial payers, “states ultimately focused on Medicaid or state employee health plans over which they had control.”

There are several factors contributing to this lack of multi-payer alignment around common payment models, including a difference in business goals between Medicaid and commercial payers. Commercial payers in Maine, for example, reported issues related to value-based insurance design and multi-payer measure alignment; this was due to “insufficient engagement with payers” when the SIM goals were established, the report says. In addition, commercial payers in Maine are reluctant to change the design of their insurance products “in response to a single state’s recommendations,” and there is a “preference for making product design changes in response to their clients’ needs.”

If you are a business, your client’s needs come first. If a state becomes a client of an insurer, perhaps this VBP model alignment problem would be easier to solve. But other state’s experiences would indicate that is unlikely.

The RTI evaluation identified several other factors contributing to the lack of payer alignment in payment models including: the proprietary nature of information (e.g., commercial payers in Minnesota preferred not to share details on quality and utilization measures and performance reports for providers, which “limited the type of dialogue necessary to advance multi-payer payment reform”) and competitive concerns (e.g., payers that have invested in changes in payment reforms are “concerned that the returns on those investments are accruing to other parties”).

Many of these concerns are age-old problems; in the policy world, we encounter these types of issues frequently: (1) the complaint that “you didn’t engage us from the beginning;” (2) the fact that health care delivery is competitive in a capitalist market; and (3) the free rider problem.

We could add two more issues or concerns to the list above: (4) “You don’t understand clinical issues” (e.g., physicians in Arkansas felt that “state decision-makers were too far removed from daily clinical practice to understand what would work effectively”) and (5) We would have to create multiple products – e.g., products tailored to the needs of the Medicaid population vs. commercial population.

In the six test states, participation by health care practitioners in innovative models varies wildly. For example, in testing an integrated care model, the number of participating providers varied such that in Massachusetts, 10% of the Medicaid population was reached, while in Oregon, the comparable figure was 85%, as noted in the chart below (from the evaluation report):

For tests of the patient-centered medical home (PCMH) or health home model in these six states, 17% of the Medicaid population was reached in Maine, compared with 70% in Vermont and 75% in Oregon.

Engaging private payers in innovative payment models is important for health care system transformation. Given that some payers in these six test states were reluctant to change the design of their insurance products in response to a single state’s recommendations, states might consider combining forces for the purposes of designing more responsive VBP models. Another alternative is to ask insurers, along with representatives from other health care entities, consumer groups and employers to participate in system design change from the beginning of the process. VBP may lead to health cost reductions if implemented widely and well, but such achievements will be nearly impossible if entities that control so much of a population’s health care coverage choices are not involved.

Proof Point: Addressing Social Determinants of Health Reduces ED and Hospital Visits, and Reduces Costs

By M2|2018-05-23T16:53:35+00:00May 23rd, 2018|Evidence-Based Medicine, Health Care Trends, Hospitals, Providers, Social Determinants of Health, Uncategorized, What do we pay for and why|

Proof Point: Addressing Social Determinants of Health Reduces ED and Hospital Visits, and Reduces Costs

Just a couple weeks ago, I about social determinants of health (SDH), so I was intrigued to come across this recent study in Health Affairs showing that improved access to care and a consideration of SDH can lower emergency room use and inpatient hospitalizations, and reduce costs.

A health clinic in Dallas, the Baylor Scott & White Health and Wellness Center (we’ve also highlighted before), partnered with the Dallas Parks and Recreation Department to create a primary care clinic in a rec center in an underserved Dallas community. The public-private partnership offers clinical services such as routine primary care, regardless of the person’s ability to pay. But it also offers access to other health-supporting interventions. For example, the partnership provides access to programs that help community members participate in physical activity and get healthy food.

Community health workers are also a component of the approach. Patients often need help navigating both the health care system and support programs, for example, free exercise classes at the rec center. Community health workers assist patients with that navigation in a culturally relevant way for the Dallas center. Local churches – more than 25 of them – provide an additional level of support by increasing awareness of the health clinic/rec center offerings and availability of community health workers.

The clinic “exemplifies the integration of social determinants of health within a population health strategy,” according to the study by David Wesson, President, Baylor Scott & White Health and Wellness Center, and his colleagues.

While increasing access to both clinical health care services and health-supporting programs, such as those offered by rec centers, is worthy goal on its own, to health policy wonks the added proof point of cost savings due to a population based approach that integrates SDH is just as exciting.

The study examined emergency department (ED) and inpatient care use for 12 months after initiation of the program. People who used the center’s services experienced a reduction in ED use of 21.4% and a reduction in inpatient care use of 36.7%, with an average cost decrease of 34.5% and 54.4%, respectively. All of these are notable proof points: “These data support the use of population health strategies to reduce the use of emergency services,” the authors conclude.

The Baylor Scott White/Dallas Recreation Center partnership is a great example of how improving access to health care and addressing the social determinants of health can have a positive impact on both health outcomes as well as costs, by reducing expensive types of care such as emergency and inpatient services. We are still building the evidence-base, but this study shows taking a holistic approach to patient care, including addressing the social determinants of health such as culture and language, can help achieve what everyone wants: improved health and lower costs.

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