HHS-CMS Share Marketplace Projections and Nine Open Enrollment Strategies

By Clive Riddle, October 21, 2016

Earlier this Week, HHS Secretary Sylvia M. Burwell “announced that she expects 13.8 million individuals to sign up for coverage through the Marketplaces during the upcoming Open Enrollment.” In conjunction with her announcement, the HHS Office of the Assistant Secretary for Planning and Evaluation released a report detailing these 2017 enrollment projections for 2017, telling us:

• The projected enrollment of 13.8 million would represent an increase of 1.1 million from 12.7 million plan selections at the end of 2016’s Open Enrollment.
• They estimate this will net down to monthly effectuated enrollment averaging 11.4 million people during 2017.
• 10.7 million uninsured Americans are eligible for Marketplace coverage. Among them, 85% are potentially income eligible for financial assistance,  and 60% have incomes that would also qualify them for cost-sharing reductions in addition to tax credits
• 40% of the eligible uninsured are 18-34 years old
• 5.1 million eligible for the Marketplace currently purchase off-Marketplace coverage. Of this group, they estimates 2.5 million people could be eligible for financial assistance via Open Enrollment signups for Marketplace coverage

So how are they going to increase the open enrollment signups to 13.8 million? Last week, CMS shared their open enrollment marketing strategies, noting that “nearly half of uninsured adults are unaware of the financial assistance available to help pay for health insurance, even though about 85 percent of Marketplace-eligible uninsured Americans could qualify for financial help.” Their marketing plan includes:

1. Increasing direct mail pieces from 800,000 last year to 10 million this year, targeted to “people who were recently uninsured, recently lost coverage, or sought coverage in the past through HealthCare.gov or a state Medicaid program,” including “people who started to sign up at HealthCare.gov last year, but didn’t complete the process”; “consumers who lost eligibility for Medicaid or CHIP coverage last year, or who applied for Medicaid or CHIP but had incomes too high to qualify.”
2. The IRS “will conduct new outreach to uninsured people who paid the penalty or claimed an exemption, letting them know that tax credits are available for Marketplace coverage and providing information about their health coverage options.”
3. E-Mail marketing will be expanded, as “HealthCare.gov’s email list has grown by over 30 percent” to 20 million+ people
4. Healthcare.gov notes they “learned that simply reminding a consumer about their eligibility for financial assistance in an email increased enrollment rates by 17 percent compared to emails that did not include that information,” and that “emails informing returning consumers of increased costs in their current plan and encouraging them to review their options by shopping increased active renewal rates by 279 percent.”
5. Healthcare.gov also learned merely mentioning a deadline in an email increased enrollment by 14 percent compared to emails that did not mention deadlines.
6. HealthCare.gov will remind consumers about the a penalty for not having coverage, and cite a study in which “consumers who received an email with additional language referencing the penalty were 13 percent more likely to enroll,” and a test that “found that more prominently displaying penalty information with the deadline (for example, in the email subject line) produced a larger lift in enrollment, 97 percent,” and a “message that gave higher-income people information about the higher penalty levels likely to apply to them increased enrollment by 18 percent.”
7. Outreach is being expanded to mobile and streaming platforms, and gaming platforms in order to reach younger audiences. Healthcare.gov cites a partnership with gaming platform Twitch, and notes that they will run ads and sponsor content on YouTube, Instagram and Facebook
8. Healthcare.gov will emphasis optimized search efforts and cite that “CMS increased overall search conversion rates by 24 percent compared to the previous year.”
9. Healthcare.gov  will “double the number of impressions a consumer sees (“Gross Rating Points”) on TV in the week leading up to December 15th compared to the same week last year.”

Opportunities With Consumer Angst About ACA Exchanges and Out of Pocket Costs

By Clive Riddle, October 7, 2016

GfK has just released updated survey results on consumer health insurance purchasing which found that “one-third of consumers who purchased on ACA exchanges do not expect that their present insurer (33%) – or any other carrier (34%) – will offer insurance through their exchange in 2017. And 32% do not think they will find options on the exchange that meet their needs.”

Additional findings they report include:

• 13% of consumers purchasing through ACA exchanges plan to revert to becoming uninsured if their current coverage was not offered.
• For ACA exchange consumers earning less than $25,000 a year, 34% plan on becoming uninsured if current coverage isn’t available
• 43% of exchange users say they would seek new options through the exchanges – with levels highest among 50 to 64 year olds.
• 35% of exchange users would go directly to an insurer or agent for solutions if their coverage lapses
• 66% say they would choose the best option to meet their needs, regardless of the insurance company
• Only 12% would make a point of staying with their current carrier
• 20% say they would explore coverage through a different insurer

Liz Reyer, GfK Vice President and health insurance lead concludes that “as a ’brand,’ the ACA has taken some hits in 2016. While most observers expected insurance companies to reassess their offerings on the exchanges now and then, the outright defections we have seen have quickly limited consumers’ choices and eroded confidence that the ACA will find ways to meet their needs. We need to see a high-profile campaign making clear the options that consumers still have – so no one goes without insurance unnecessarily – and stronger collaboration between the insurance industry and the government in keeping the ACA viable.”

Health Plans remaining on the ACA exchanges certainly have a market opportunity to mop up the mess left by large national plans exiting the exchanges. Outside the ACA exchanges, plans active in individual markets, and applicable private exchanges have a major opportunity to gain ground with consumers not eligible for subsidies (which are only available through the ACA exchanges.)

Meanwhile, Navicure, in conjunction with Porter Research has just released provider survey results from a study on how healthcare organizations are responding to patient engagement and consumerism, with a focus on consumer concerns about price transparency, financial responsibility and payment options. The survey included hospitals (19%) and medical groups ranging in size (33% in practices with ten providers or less and 21% with 100 providers or more.)

Of the most common questions patients ask about their financial responsibility, provider respondents said “58 percent inquire about payment plans, and 56 percent ask about total treatment cost. Other top questions include asking what balance is due (53%) and what payment options are available (43%).”

67% of provider respondents say patients do not understand their payment responsibility versus their insurance provider’s responsibility, and 42% of providers find that attempting to estimate prices for services is a major problem.

The study found that most healthcare organizations aren’t using available tools to help with consumer confusion over out of pocket costs, with 33% of providers using patient bill estimation tools, 26% sending patients electronic statements, and 25% securely store debit or credit card information on file.

In this era of ever increasing consumer cost sharing, a major market opportunity exists for providers and health plans that can easily answer patient questions on what their out of pocket will be, and offer a range of options for how patients can pay for them.

Prescription Drug Costs on the Public’s Mind – Reductions in the Uninsured Not So Much

By Clive Riddle, September 30, 2016

The just released current Kaiser Family Foundation Tracking Poll finds that while the public continues to be deeply divided on the Affordable Care Act, they are fairly united in backing policy changes to rein in prescription drug costs. The level of bipartisan public support – powered by recent EpiPen pricing headlines among other Rx cost woes in the news -  would seem to offer a prescription paving the way for a rare event these days– legislation that has a chance of being enacted into law when the new Congress convenes next session.

There is widespread agreement on five policy points:

1. 86% support requiring drug companies to release information to the public on how they set drug prices
2. 82% favor allowing the federal government to negotiate with drug companies to get a lower price on medications for people on Medicare
3. 78% approve of limiting the amount drug companies can charge for high-cost drugs for illnesses like hepatitis or cancer
4. 71% like allowing Americans to buy prescription drugs imported from Canada
5. 66% want an independent group that oversees the pricing of prescription drugs

Here’s a graphic Kaiser Family Foundation provided regarding the poll results:

The survey finds that “a large majority (77%) perceive drug costs as unreasonable, while one in five (21%) say they are reasonable. The share who say drug costs are unreasonable is up somewhat from 72 percent a year ago in August 2015.”  The Survey also finds that “about half (55%) of the public report currently taking prescription drugs, and the vast majority (73%) of them say paying for their medications is easy; far fewer (26% of those taking prescription drugs, or 14% of the total population) say it is difficult to pay for their drugs.”

The September tracking poll continues to reflect the deep partisan divide in views on the ACA, which spill over to recognition of a significant drop in the level of the uninsured:

• 47 percent have an unfavorable view of the ACA while 44 percent have a favorable one. 
• 48% say the marketplace in their own state is working well, while 43 percent say it is not working well, but 49% say they are not working well nationally vs. 44% that say they are working well.
• “When asked whether the uninsured rate is at an all-time low or all-time high, a quarter (26%) are aware that it is at an all-time low, while a fifth (21%) say that it is at an all-time high. Democrats and those with a favorable view of the health reform law are more likely to be aware of this; Republicans and those with an unfavorable view are less likely to be aware.”

With regard to the current level of the uninsured, HHS this week released a report indicating “the uninsured rate fell by around 40 percent for Americans in all income groups for 2010 through 2015, including individuals with incomes above 400 percent of the federal poverty level (FPL).”
Here’s the levels of reduction in the rate of uninsured they found during this time period by income levels and age:

• Less than 100% FPL: 39% reduction
• 100-125% FPL: 48% reduction
• 125-250% FPL: 41% reduction
• 250-400% FPL: 37% reduction
• 400% FPL and higher: 42% reduction
• 18-25 year olds: 52% reduction
• 26-34 year olds: 36% reduction
• 35-54 year olds: 39% reduction
• 55-64 year olds: 40% reduction

Uber, Lyft and Healthcare

By Clive Riddle, September 9, 2016

Bruce Japson, in his Forbes article earlier this summer - On-Demand Health's Growth Second Only To Uber And Lyft, that "investment in on-demand health services is projected to reach $1 billion in 2017 with Teladoc and rival telehealth firm American Well joining the likes of Uber and Lyft in the top 10 most funded on-demand companies, according to the most recent tally by consulting giant Accenture ACN -1.02%. Investment in on-demand health was just $200 million in 2014."

While Bruce was talking about valuations of on demand companies, it is most interesting that on a different level, the paths of healthcare and on demand ride services are converging.

Just this week, CareMore Health System touted their recent collaboration with Lyft that “Improves Access to Care, Reduces Transportation Cost and Wait Times” according to results from a pilot study of their Medicare Advantage beneficiaries that was just published in the Journal of the American Medical Association (JAMA),  in the article, “Nonemergency Medical Transportation: Delivering Care in the Era of Lyft and Uber”

CareMore notes that “individuals using the service are now waiting an average of just nine minutes to be taken to or from their medical appointment” and that “average per-ride costs have been reduced by more than 30 percent (from $31.54 to $21.32). Satisfaction with the new program, which covers beneficiaries in selected areas of southern California, exceeded 80 percent.” CareMore plans to continue the program and potentially expand to markets beyond California.

Earlier this year, MedStar Health, the largest not-for-profit healthcare system in Maryland and the Washington, D.C., region, and Uber announced a collaboration “to give patients a new option for ensuring they can get to and from healthcare appointments. Patients who miss appointments or have to reschedule at the last minute frequently cite transportation as a factor.”

The Advisory Board, writing about in July, in their article “A surging trend: Uber, Lyft have hospitals rethinking patient access” reported that “other hospitals quickly became interested in MedStar's model, said Michael Ruiz, chief digital officer for MedStar. ‘We probably had 50 different systems across the country reach out to us and ask us 'How did you do it?’’ Several other hospitals have formed partnerships with Uber this year, including New Jersey-based Hackensack UMC and Florida-based Sarasota Memorial Hospital.”

How many years off are we from driverless Uber and Lyft cars picking us up for our healthcare visits?

EpiPens By The Numbers

by Clive Riddle, August 26, 2016

Without wading into the policy, prognostication, editorial or other narrative issues surrounding Mylan’s EpiPen pricing controversy, here simply is a collection of selected relevant data compiled related to all that is Mylan EpiPen:

• $1 – the cost of the hormone epinephrine, used in the EpiPen
• $73.50 – average EpiPen copayment for health plan members administered through Express Scripts
• $85 – cost of an EpiPen 2-Pak in France
• 40% - portion of Mylan profits driven by EpiPen for 2014
• 55% - EpiPen operating profit margin in 2014
• 89% - EpiPen share of the epinephrine auto-injector market
• $112.10 – 2015 EpiPen4Schools discounted price
• $164.98 – May 2011 U.S. list price for an EpiPen 2-Pak
• $300 – the maximum savings for a just announced Mylan “My EpiPen Savings Card” to reduce out of pocket costs 50% for qualifying patients with health plan coverage
• 500% - the EpiPen average wholesale price increase since 2009
• $608.61 – the current U.S. list price for an EpiPen 2-Pak
• 2007 – the year Mylan acquired the rights to sell EpiPen from Merck
• 65,000 – the number of U.S. schools participating in EpiPen4Schools program
• $97,200 – the maximum income for a family of four to quality for zero out of pocket costs for their EpiPen auto-injector
• 353,600 – the number of annual prescriptions for competitor Sanofi’s Auvi-Q, before it was recalled from the market for dosing problems.
• $18.9 million - Mylan CEO Heather Bresch's total compensation in 2015
• $100 million -  the projected cost of just announced EpiPen patient assistance subsidies, representing 10% of the product’s sales
• $200 million – EpiPen revenue in 2007
• $339 million – Pfizer’s 2015 revenue for manufacturing the drug for Mylan’s EpiPen
• $1 billion+ - EpiPen revenue in 2015

A Snapshot of Managed Care Pie

By Clive Riddle, August 4, 2016

MCOL’s Managed Care Fact Sheet webpages are being updated to reflect current data, so I took this opportunity to grab some Facts and provide this preview, baking this snapshot of managed care pie.

National HMO Enrollment is 92.4 million for 2016, up from 85.7 million in 2015, and a recent low of 66.8 million in 2007. The previous high was 81.3 million in 1999, just before managed care backlash whipped the numbers down. (1)

How does the managed care enrollment pie divide up?  33% are enrolled in HMOs, 57% in PPOs, 2% in POS plans and 7% in HDHPs.(1) - (3)  The top five national health plans by enrollment are United Health Group – 48.0 million; Anthem – 39.6 million; Aetna – 23.0 million; Cigna – 15.1 million and Health Care Service Corporation – 15.0 million. (14)

And what portion of the total national pie does managed care represent? 31% of Medicare beneficiaries are enrolled in Medicare Advantage plans, 63% of Medicaid enrollees are in Medicaid managed care plans, and 99% of commercial lives are enrolled in managed care. Factor in the 9% of the population that is still uninsured, and 70% of the total population is enrolled in some form of managed care plan. (4) – (10)

What are current resource use benchmarks in managed care – or how much of the pie is being eaten? HMO Hospital inpatient days per 1,000 members per year are 1,639 for Medicare, 395 for Medicaid and 231 for commercial; Commercial PPO are 237. HMO Physician visits per member per year are 10.2 for Medicare, and 4.8 for Medicaid and Commercial; Commercial PPO are 4.7. HMO Prescriptions per member per year are 29.9 for Medicare, 9.6 for Medicaid and 9.0 for Commercial; Commercial PPO are 11.8. (2) (11)

Getting back to pie, medical cost components – for a family covered by a PPO – are sliced up 31% for inpatient, 30% of physician, 19% for outpatient services, 17% for pharmacy and 4% for other services. (12)

So what does the pie cost? Single health plan premiums average $518 for HMOs and $548 for PPOs, and family premiums average $1,437 for HMOs and $1,539 for PPOs. Premium increases are estimated to be 4.3% in 2016, and have been under 5% after 2011, and under 8% after 2003. In 2002 – post managed care backlash -  they were 14.7%, but they were 8.1% or less in the pre managed care backlash era from 1993 to 2000, including a decrease of 1.1% in 1994.  Before that, double digit increases were the norm for a number of years.

(1) Total HMO Enrollment - Kaiser State Health Facts; Data Source: Health Leaders InterStudy, a Decision Resources Group Company July 2015 Data, accessed August 2016 www.statehealthfacts.org

(2) 2015 HMO-PPO Rx Digest Series, Sanofi www.managedcaredigest.com 

(3) New Census Survey Shows Continued Growth in HSA Enrollment, AHIP November 11, 2015  https://ahip.org/new-census-survey-shows-continued-growth-in-hsa-enrollment/     

(4) CMS Fast Facts: www.cms.gov/fastfacts/  

(5) Medicaid Enrollment Report as of January 2016: https://www.medicaid.gov/medicaid-chip-program-information/program-information/downloads/january-2016-enrollment-report.pdf 

(6) Kaiser Family Foundation State Health Facts Total Medicaid MCO Enrollment http://kff.org/other/state-indicator/total-medicaid-mco-enrollment/ 

(7) CDC Fast Facts, National Center for Health Statistics, Health, United States 2016: http://www.cdc.gov/nchs/ 

(8) Tricare Prime Beneficiaries 2016: www.tricare.mil/About/Facts/BeneNumbers.aspx 

(9) CDC May 2016: Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2015 http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201605.pdf  

(10) Total U.S. Population data as of April 2016, U.S. Census Bureau: www.census.gov

(11) 2015 Public Payer Digest Series, Sanofi www.managedcaredigest.com

(12) Milliman Medical Index, Milliman, May 24, 2016 http://www.milliman.com/mmi/    

(13) Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2015. www.kff.org

(14) MCOL research from 2016 company reports

CMS Office of the Actuary on Health Expenditure Projections

By Clive Riddle, July 15, 2015

Where are US health care cost increases headed? The CMS Office of the Actuary tells us to expect 5.8 percent annual increases during 2015-2025, in their report: National Health Expenditure Projections 2015-2025.

The Office of the Actuary states “health spending is projected to grow 1.3 percentage points faster than Gross Domestic Product (GDP) per year over 2015-2025; as a result, the health share of GDP is expected to rise from 17.5 percent in 2014 to 20.1 percent by 2025. Federal, state and local governments are projected to finance 47 percent of national health spending (up from 45 percent in 2014).”

The report findings include:

• National health spending growth is estimated to have been 5.5 percent in 2015.
• By 2016, slower growth in health spending of 4.8 percent is projected as the enrollment in Medicaid and Marketplace plans slows and the associated declines in the number of the uninsured decreases.
• Total annual health care spending growth is expected to average 5.8 percent over 2015-2025.
• In 2015, medical price inflation slowed to 0.8 percent, down from 1.4 percent in 2014. Hospital prices increased by 0.9 percent while price growth in physician services fell by 1.1 percent.
• The share of health expenses that Americans pay out-of-pocket is projected to decline from 10.9 percent in 2014 to 9.9 percent in 2025.
• The insured share of the population is expected to continue to rise from 89 percent in 2014 to 92 percent by 2025.
• Private health insurance expenditures are estimated to have increased by 5.1 percent from 2014 to 2015, reaching $1.0 trillion and will grow 5.4 percent thereafter to 2025.
• Medicaid spending growth is slowing significantly in 2016, to 5.3 percent, which the report attributes to slower enrollment growth and stronger utilization management.
• Medicaid spending growth is expected to average 5.6 percent for 2017-19, lower than in 2014-15.
• In 2015, Medicare expenditures are expected to have been $647.3 billion, a 4.6-percent increase from 2014, driven partly by increased enrollment.
• Medicare per-enrollee costs are estimated to have increased by only 2.4 percent, the same as the previous year, continuing the recent trend of low per-enrollee cost increases.
• Prescription drug spending is projected to grow an average of 6.7 percent per year for 2016 through 2025. This follows growth of 12.2 percent in 2014 and 8.1 percent in 2015

How much of a game-changer is MACRA and the MIPS and APM paths?

By Clive Riddle, July 8, 2016

That is the question asked of panelists in the current edition of MCOL’s ThoughtLeaders. Here, in its entirety, is a response from one of the panel: Mark E. Lutes, Chair, Board of Directors / Member of the Firm, at Epstein Becker Green.  Actually, here’s the question posed in its entirety: “How much of a game-changer is MACRA and the MIPS and APM paths going to be for Medicare, and will Medicaid or Commercial programs adopt similar approaches for applicable segments?”

So here’s what Mark had to say in response:

MACRA represents a laudable attempt to replace the truly failed SGR with an approach that seeks to do the right thing, which is to reward quality and efficiency at the individual practice level. Though it has some challenges and, like most major policy changes, will require plenty of tweaking once implemented in real world situations. MACRA is likely to be a game changer but, as per usual, not in the direct ways that Congress/CMS may have anticipated or hoped.  Thus, MACRA, like HiTech and dozens of other pieces of legislation before it, is most likely to illustrate that the "law of unintended consequences" is the most predictable result of Washington DC legislative and regulatory action.

A few illustrations-the availability of the APM v the MIPS pathway was hoped to induce more rapid adoption of risk assuming payments.  If CMS had seen fit to provide more of a glide path toward APM qualification, the "brass ring" of Medicare payment increases via APM qualification might well have "lit a fire" under segments of the provider community seeking to avoid the uncertainties of MIPS based fee schedule increases.  However, the draft rule puts that brass ring out of reach for most medical groups, ACOs, IPAs, and PHOs.  Thus, one of the key "game changing" opportunities of MACRA is likely to be missed.  As it did with ACOs, where it demanded provider investment to produce savings that benefited the Medicare program and then put limits on the providers' opportunity to garner the reward for their efforts, CMS is in danger of missing the golden opportunity to incent a stampede toward APMs by making the "perfection" in risk assumption the enemy of the "good" in the way of progress towards that end.

In fact, in the proposed rule, CMS averts its eyes from the efforts of many physicians to achieve value through managed care programs. The rule only gives credit for activities physicians are conducting in the fee-for-service realm. One thing to watch is a report CMS is due to issue by July 1 as required by Section 101(e)(6) of MACRA on the feasibility of integrating the APM concept in the Medicare Advantage payment system. And, unfortunately, there's no credit given for non-Medicare APM activity until 2021.   

Likewise, because MIPS allows providers a great deal of choice in metrics upon which to be measured, it will not drive change across other payor streams.  There are too many choices for other payors to expect that their provider networks will be geared up to report any particular subset around which financial incentives might be built.  It may be more realistic to hope that consensus, adoptable in a range of payment programs will come instead out of the joint payor/CMS work in the Health Care Payment Learning & Action Network (LAN).

In several years, looking back on the run-up to the payment impacts, MACRA is likely to be seen to have been a game changer-in two ways that are not within the story line.  First, MACRA is likely to be regarded as an instigating event in physician practice consolidation, through the expansion of hospital employment, insurer physician practice transactions, specialty group growth and physician practice Management Company ventures 2.0.  Even if the individual MIPS measures are viewed by individual and small groups of physicians as doable in the near term, there will be mental energy burned to comprehend them, software upgrades to support their reporting, and there will be a growing fear of the unknown as the resource use measures evolve.  Therefore, probably the most predictable and predominate result of MACRA will not be the instigation of quality improvement and enhanced attention to resource use which the federal government intends, but another "nail in the coffin" of small scale medical practice.

Second, MACRA is likely to be regarded as a watershed moment wherein the fee-for-service Medicare program took on (or even exceeded in granularity) the incentives present in managed care.  Previously, a physician practice opted in to payment for performance.  PQRS and meaningful use had been, to date, largely reporting incentives and ACO downside risk was both voluntary and relatively rarely attempted.  The dawn of MACRA might be seen as CMS crossing the line from being a passive payor to being a demanding customer that changes the specifications of its order and settles it bill according to data it controls well after the date of service.

Note: Mark will be participating in the faculty in a webinar on this topic, along with EBG's Lesley Yeung and EBG Advisors' Bob Atlas in the HealthcareWebSummit event on Thursday August 4th, 2016 at 1 PM Eastern : Preparing for MACRA - The Next Steps: Composite Scoring, Performance Considerations, Implications and More.

Two Thirds of Healthcare Stakeholders Have Faith in Consumers Using Online Tools to Engage With Their Doctor

By Clive Riddle, June 16, 2016

MCOL has conducted an e-poll, co-sponsored by Keenan, of healthcare business stakeholders regarding their opinion on consumer tools involved with healthcare costs or quality. Key questions were asked regarding consumer healthcare cost and quality tools; and ranking of applicable items with respect to overall effectiveness.

68.5% of stakeholders believe it is likely or very likely that a typical consumer will use online data/comparisons to discuss options and costs with a provider. Stakeholders not involved with online tools have a greater belief that consumers are very likely to do so (34.8% compared to 18.6% of stakeholders that are involved with online tools). However, stakeholders involved with tools have an overall greater belief that consumers are likely to do so – combining likely plus very likely responses (72.1% for involved stakeholders compared to 65.2% for stakeholder not involved with tools.)

44.4% of stakeholders feel a smartphone is the optimal vehicle to deliver such tools, while 34.7% feel a computer desktop is the optimal vehicle, and 13.9% listed a tablet such as an iPad as the optimal vehicle. Stakeholders not involved with online tools were less likely to list a computer desktop (21.7% compared to 38.1% for stakeholders involved with tools and 57.1% for stakeholders not sure if they are involved). However smartphones were the top choice for both stakeholders involved with online tools, or not involved with online tools.

Given five types of tools to rank for effectiveness, stakeholders preferred health insurance out-of-pocket costs calculators and healthcare service price estimator/comparisons. Given seven issues to rank by level of concern, relating to consumer tools, stakeholders were most concerned by accuracy/credibility of data sources, and consumer ability to understand/use tool correctly.

58.9% of stakeholders indicated they are involved with consumer tools, while 31.5% responded they are not involved, and 9.5% were not sure. The online survey of healthcare business stakeholders was conducted during May 2016 by MCOL.  Survey participants received a detailed report on the survey results.

As Tim Crawford, a Vice President from Keenan puts it, “if we want to bend the healthcare cost trend downward by making patients and their families more effective consumers, we will need to equip them with the information they need to make informed decisions. Consumers of medical services will need to know about the quality of their providers and understand the total costs involved. More than two-thirds of those responding to the survey believe that consumers will use tools that give them this information and will use the knowledge to discuss options and costs with their providers. Ideally, such tools can provide the common ground needed for patients and physicians to have a transparent dialog about medical decisions.”

IMS Institute on the Global Oncology Market

By Clive Riddle, June 2, 2016

The IMS Institute for Healthcare Informatics this week released their new study: Global Oncology Trend Report: A Review of 2015 and Outlook to 2020, which examines the current and future global oncology market. Their 42-page report tells us that “more than 20 tumor types are being treated with one or more of the 70 new cancer treatments that have been launched in the past five years, with the sustained surge in innovative therapies driving the global oncology market to $107 billion in 2015. However, many of these drugs are not yet available to patients in most countries, and even when registered they may not be reimbursed under public insurance programs.”

The study finds that growth in global spending on oncology therapeutics and supportive care drugs increased 11.5 percent on a constant-dollar basis last year, with more than 500 companies actively pursuing oncology drug development around the world. Collectively, they are advancing nearly 600 new molecules through late-stage clinical development, most frequently for non-small cell lung cancer and breast, prostate, ovarian and colorectal cancers.

And as for the future, “annual global growth in the oncology drug market is expected to be 7.5 – 10.5 percent through 2020, reaching $150 billion. Wider utilization of new products—especially immunotherapies —will drive much of the growth, offset by reduced use of some existing treatments with inferior clinical outcomes. Payers also are expected to tighten their negotiation stance with manufacturers and adopt new payment models in an effort to drive greater value from their expenditures on these drugs.”

The report also shares that:

• The pipeline of oncology drugs in clinical development has expanded by more than 60 percent during the past decade, with almost 90 percent of the focus on targeted agents.
• The median time from patent filing to approval for oncology drugs in 2015 was 9.5 years, down from 10.3 years in 2013.
• Of the 49 oncology New Active Substances analyzed that were initially launched between 2010 and 2014, fewer than half were available to patients by the end of 2015 in all but six countries: the U.S., Germany, UK, Italy, France and Canada.
• Targeted immunotherapies are available in most developed countries, but none of the emerging markets outside of the European Union has yet registered these treatments.
• Of the drugs approved in 2014 and 2015 by a set of developed countries analyzed, only the U.S., France and Scotland have more than half included on reimbursement lists at the end of 2015.
• The annual growth rate in cancer drug costs has risen from 3.8 percent in 2011 to 11.5 percent in 2015, at constant exchange rates. Growth in the U.S. market increased from 2.0 percent to 13.9 percent in the same period.
• The U.S. now accounts for about 45 percent of the global total market for therapeutics, up from 39 percent in 2011, due in part to the strengthening of the U.S. dollar and more rapid adoption of newer therapies.
• In the U.S., cancer drugs now make up 11.5 percent of total drug costs, up from 10.5 percent in 2011
• Net price growth in the U.S. on existing branded oncology drugs have averaged an estimated 4.8 percent in 2015, compared with 6.4 percent invoice price growth
• In the U.S., cancer drugs dispensed through retail channels now account for more than one-third of total costs, up from 25 percent ten years ago and typically covered by pharmacy benefits. This reflects a shift in the mix of new therapies toward oral medicines, eliminating the need for injection or infusion in a physician’s office or outpatient facility.
• Nearly 40 percent of the total costs of targeted therapies in the U.S. are now for oral formulations, up from 26 percent in 2010.
• Only 17 percent of U.S. oncologists are in independent practices, unaffiliated with some type of integrated delivery network or corporate parent, down from 28 percent in 2010.
• Average total treatment costs for patients in commercial insurance plans with a cancer diagnosis who are receiving active treatment reached $58,000 in 2014, up 19 percent from 2013.
• Patients with commercial insurance who were treated in 2014 with cancer drugs received by injection or infusion were responsible for more than $7,000 of costs on average, compared to $3,000 for those patients receiving only oral medicines.
• Some type of coupon or patient cost offset was used for more than a quarter of cancer drug retail prescriptions filled by patients with commercial insurance in 2015, up from 5 percent in 2011 and reflecting efforts by manufacturers to reduce patient out-of-pocket costs. The average cost offset has averaged about $750 per prescription over the past five years.

Patients Happy With PCPs But Not Always Following Their Advice Due to Costs

By Clive Riddle, May 19, 2016

The Physicians Foundation has just released a 74-page report with results from their Physicians Foundation Patient Survey conducted by Harris Poll. The report findings state that “95 percent of patients surveyed are satisfied or very satisfied with their PCP’s ability to explain information in a manner they understand, while 96 percent feel their physicians are respectful of them. Moreover, 93 percent were satisfied or very satisfied with how well their PCP listened to them during their most recent exam, with 92 percent noting high levels of satisfaction relative to how well their doctor knew their medical history.”

But the report notes that “patients who saw a primary care physician for their most recent routine exam are not fully adhering to treatment plans, avoiding routine check-ups or opting not to take prescription medication due to rising healthcare costs.”

They cite that “ sixty-two percent of U.S. adults are concerned with being able to pay for medical treatment if they get sick or injured. Almost half (48 percent) are not confident they could afford care should they become seriously ill. In addition, more than a quarter of U.S. adults (28 percent) have skipped a medical test, treatment or follow-up or avoided a visit to the doctor for a medical problem in the past 12 months because of costs. Twenty-seven percent of patients have avoided filling a prescription in the past 12 months, noting costs as a primary factor.”

Who do patients feel are driving these costs? The report says that “59 percent of patients surveyed say it’s the cost of prescription drugs. One-third (33 percent) of patients cited fraud as another contributor factor, followed by social conditions and poverty (28 percent), government mandates (26 percent) and an aging population (25 percent).”

Rip Hollister, MD, a Physicians Foundation board member tells us “patients recognize that there is an array of stakeholders and external influences that affect treatment options and, in effect, clinical autonomy. Historically, treatment plans have been developed between the doctor and patient. Yet, patients understand that there are now many other parties ‘in the room,’ so to speak, which complicates and challenges the manner in which physicians practice medicine.”

In this regard, the report cites how much patients felt each of the following stakeholder groups, as a whole, impacts treatment options available to them:

• Health insurance companies (83 percent)
• Physicians (79 percent)
• Pharmaceutical companies (68 percent)
• Federal legislature (60 percent)
• State legislatures (54 percent)

Hot Healthcare M&A Market Starting to Cool

By Clive Riddle, May 6, 2016

Irving Levin Associates reports that healthcare merger & acquisition activity, which has been relatively overheated, is starting to cool a little. Lisa E. Phillips, editor of Irving Levin’s Health Care M&A News tells us “the slowdown in deal volume in the first quarter of 2016 might simply be fatigue setting in after a record-setting year in 2015. Also, some buyers are still figuring out where the best opportunities are, as the shift to value-based reimbursements gains momentum.”

Health Care M&A News states that “health care merger and acquisition activity began to slow down in the first quarter of 2016. Compared with the fourth quarter of 2015, deal volume decreased 7%, to 351 transactions. Deal volume was also down 7% compared with the same quarter the year before. Combined spending in the first quarter reached $79.5 billion, an increase of 87% compared with the $42.5 billion spent in the previous quarter.”

Here’s a snapshot the publication provided of the quarter’s activity:

How big was 2015?  Bigger than 2014, which was also a huge year.  Irving Levin’s Lisa Phillips says “health care mergers and acquisitions posted record-breaking totals in 2015. The services side contributed 62% of 2015’s combined total of 1,503 deals, which is even higher than 2014, when services deals accounted for 58% of the deal total.” A separate Irving Levin publication, the Health Care Services Acquisition Report, cites that “deal volume for the health care services sectors rose 22%, to 936 transactions versus 765 in 2014. The dollar value of those deals grew 183%, to $175 billion, compared with $62 billion in 2014. Merger and acquisition activity in the following services sectors—Behavioral Health Care, Hospitals, Laboratories, MRI & Dialysis, Managed Care, Physician Medical Groups, Rehabilitation and Other Services—posted gains over their 2014 totals. The exception was the Home Health & Hospice sector, which declined 33% in year-over-year deal volume.”

In the hospital sector, for 2015, they report that “activity remained strong in 2015, up 3% to 102 transactions, compared with 99 transactions in 2014. An average of 2.6 hospitals were involved in each transaction, compared with an average of 1.8 in 2014 and 3.3 in 2013.” Philips noted that “several deals resulted from the mega-mergers of 2013,” and that “we’re seeing more sales resulting from bankruptcies, especially in states that have not expanded Medicaid coverage.”

Ten Things to Know About The Comprehensive Primary Care Plus (CPC+) model

By Clive Riddle, April 15, 2016

1.  CPC+ is a CMS five-year initiative starting in January 2017 to create a national advanced primary care medical home model that aims to strengthen primary care through a regionally-based multi-payer payment reform and care delivery transformation.

2. CPC+ will be implemented in up to 20 regions and can accommodate up to 5,000 practices, which would encompass more than 20,000 doctors and clinicians and the 25 million people they serve.

3. The multi-payer approach involves Medicare partnering with commercial and state health insurance plans to support primary care practices in delivering advanced primary care.

4. Advanced primary care has five key components:

• Services are accessible, responsive to an individual’s preference, and patients can take advantage of enhanced in-person hours and 24/7 telephone or electronic access;
• Patients at highest risk receive proactive, relationship-based care management services to improve outcomes;
• Care is comprehensive and practices can meet the majority of each individual’s physical and mental health care needs, including prevention. Care is also coordinated across the health care system, including specialty care and community services, and patients receive timely follow-up after emergency room or hospital visits:
• It is patient-centered, recognizing that patients and family members are core members of the care team, and actively engages patients to design care that best meets their needs:
• Quality and utilization of services are measured, and data is analyzed to identify opportunities for improvements in care and to develop new capabilities.

5. CPC+ lists five patient care objectives to help primary care practices:

• Support patients with serious or chronic diseases to achieve their health goals;
• Give patients 24-hour access to care and health information;
• Deliver preventive care;
• Engage patients and their families in their own care; and
• Work together with hospitals and other clinicians, including specialists, to provide better coordinated care

6. CPC+ will include two primary care practice tracks with incrementally advanced care delivery requirements and payment options. Practices in both tracks will receive up-front incentive payments that they will either keep or repay based on their performance on quality and utilization metrics. Practices in both tracks also will receive data on cost and utilization.

7. Track 1 practices will receive a monthly care management fee in addition to the fee-for-service payments under the Medicare Physician Fee Schedule for activities.

8. Track 2 practices will be expected to provide more comprehensive services for patients with complex medical and behavioral health needs. Track 2, practices will also receive a monthly care management fee and, instead of full Medicare fee-for-service payments for Evaluation and Management services, will receive a hybrid of reduced Medicare fee-for-service payments and up-front comprehensive primary care payments for those services. Track 2 practices’ vendors will sign a Memorandum of Understanding (MOU) with CMS that outlines their commitment to supporting practices’ enhancement of health IT capabilities.

9. CPC+ was developed through the ACA enacted Center for Medicare and Medicaid Innovation, and is an outgrowth of the Comprehensive Primary Care (CPC) initiative, a model tested through the Center for Medicare & Medicaid Innovation that began October 2012 and runs through December 31, 2016

10. CMS will accept payer proposals to partner in CPC+ from April 15 through June 1, 2016. CMS will accept practice applications in the determined regions from July 15 through September 1, 2016. CMS will select regions for CPC+ where there is sufficient interest from multiple payers to support practices’ participation in the initiative.

Here’s where you can find out more:

• CMS April 11^th 2016 CPC+ Press Release
• CMS CPC+ Fact Sheet
• CMS CPC+ FAQs
• JAMA April 11, 2016 Article: Medicare’s Vision for Advanced Primary Care

Identity Crisis: The Need for Improved Healthcare Identity Management

by Clive Riddle, April 8, 2016

This week, Kathy Bardeen from LexisNexis spoke in a HealthcareWebSummit webinar on Mastering Identity Management in Healthcare.  The issue with that inaccurate and missing demographic information and inadequate authentication systems and processes threaten business integrity and success, financial outcomes, and member engagement. On top of that, there is the looming specter and fear of hacking, healthcare identify theft and fraud.

Kathy cited recent medical identity theft breaches with OPM data, UCLA Health and Anthem, along with these concerns:

• Nearly 40% of consumers would abandon or hesitate using a health organization if it is hacked
• 50% if consumers agreed they would find another healthcare provider if their medical records were stolen
• Between 8-14% of medical records have erroneous information tied to an incorrect identity
• Only about ten percent of health insurers use two-factor authentication and encryption to protect data
• Individual can spend an average of $13,500 to resolve applicable medical identity fraud cases
• Insurers spend $2pmpm or more for multiple years of credit monitoring for members affected by data breaches

Kathy tells us healthcare organizations need to handle identities as a journey that starts with Identity Checks, progresses with Identity Management and then Identity Insights. Here’s her definitions:

• Identity Checks involve facilitating the authentication, verification and resolution of identities engaging with the organization, identifying possible fraud risks, and allowing for point of need identity information searches.
• Identity Management leverages a systematic approach to maintaining, enhancing and augmenting member identity profiles with current, correct and previously unavailable information.
• Identity Insights involves understanding individuals and their relationships within and outside of the healthcare ecosystem and gaining insight into socioeconomic factors impacting health outcomes, costs and overall risk.

Kathy shares these best practices in Risk Mitigation in Identity Checks, Identity Management and Identity Insights:

• Risk Mitigation in Identity Checks should involve: evaluating systems and process to minimize the transmission and storage of PHI/SPII data whenever possible; executing a robust algorithm for unique ID assignment that will maintain consistency and persistence over identity evolution; and deploying a multi-layered approach for identity management that grows with business objectives as well as an ever changing identity landscape.
• Identity Management should involve: implementing an ongoing maintenance program to ensure integrity of identity records as this data erodes; executing the identity management program with a frequency and focus that matches the business processes and programs leveraging this data; and leveraging an authoritative, reliable data source(s) to augment and update identity information.
• Identity Insights should drive analytics from identity insights to solve for large complex problems as well as target improvements to existing programs; and maximize the value of the identity management data asset across different areas of the business.

This webinar is now available for free on an on-demand basis for qualified applicants.

The Biosimilar Opportunity

By Clive Riddle, April 1, 2016

Biosimilars hold considerable future opportunity for helping address rapidly rising prescription costs. They also hold considerable opportunity for pharmaceutical companies seeking to offer them, as well as challenges for pharmaceutical holders of brand drugs that they would impact.

PwC listed Biosimilars as one of their top ten health industry issues of 2016. They stated that “Finally entering the US market, biosimilar drugs have the potential to be as disruptive as generic drugs following the Hatch-Waxman Act of 1984. The first US biosimilar - Sandoz’s Zarxio, which prevents infections in cancer patients – received FDA approval in 2015, and entered the market at a 15% discount. At least four biosimilar applications are pending FDA review in 2016, with another 50 in the FDA review process.”

PwC also another challenge in that U.S> consumers don’t know what the heck a Biosimilar is: citing a survey in which only 17% of consumers chose a correct definition of Biosimilar when offered multiple choice answers.

Biosimilars are of course much further along the path in Europe, but in addition to consumer confusion and provider and purchaser lack of familiarity as well, there is of course continued regulatory morass as well as lobbying from pharmaceutical companies trying to protect specific brand drug turf. The NCSL (National Conference of State Legislatures) has a page dedicated to the topic of State Laws and Legislation Related to Biologic Medications and Substitution of BioSimilars.

In addition to monitoring and summarizing this activity, NCSL provides easy to understand background information. They tell us “Biologic medicines are much more complex than traditional chemically synthesized drugs. Biologics are manufactured from living organisms by programming cell lines to produce the desired therapeutic substances and consist of large molecules….Regulating biologics raises new issues for both state and federal policymakers. Because of their complexity, biologic drugs are much more difficult to replicate than the chemically produced generics for other drugs. The cell lines used and modifications in the manufacturing process affect biologic medicines. As a result, truly identical “generic” versions are currently virtually impossible to produce. However, once patents expire for the existing brand-name biologic drugs, “biosimilar” medicines can be produced, which is an occurrence that raises regulatory issues in the states. Currently, there is concern that traditional statutes regulating ‘generic drugs’ may be misapplied to new products that are not identical. This has led to a recent move to amend older state laws to address the medical and chemical characteristics of these ‘biologics,’ as well as any future generic-style ‘follow-on biologics’ or ‘biosimilars.’ “

This week the IMS Institute for Healthcare Informatics released a 36 page report: Delivering on the Potential of Biosimilar Medicines -The Role of Functioning Competitive Markets, telling us that “Greater acceptance of biosimilar medicines in a growing number of therapy areas and an active pipeline of 56 new products in clinical development are expected to deliver total savings of as much as $110 billion to health systems across Europe and the U.S. through 2020.”

IMS offer considerable research into Biosimilar adoption and issues in Europe, and counsels that “As these medicines also become available in the U.S., stakeholder education and incentives will play a vital role in ensuring biosimilars deliver their full potential.” Their report finding include:

• Considerable variations across the EU in payer policy approaches are limiting the biosimilar opportunity.
• Biosimilars use in the EU and U.S. may yield total savings of $56-110 billion over the next five years.
• Patient access to biologic treatments has grown by as much as 100 percent following the availability of biosimilars.
• Intensifying competition and greater choice are expected as new biosimilars reach the market.
• Capturing the benefits of biosimilar medicines requires a balance between controlling price and ensuring a sustainable, competitive marketplace.

IMS emphasizes the need for education and incentivization in order for Biosimilars to fulfill their potential.  They tell us that “Payers need to ensure that they are keeping themselves informed. The variation in policies adopted, as well as in biosimilar prices and uptake, across the EU, suggests that some payers do not understand the potential offered by biosimilar medicines. Physicians need to trust that biosimilar medicines offer a safe and efficacious alternative to original biologics…..Patients are expected to accept new technologies, about which they may have only limited information….Payers need to ensure that doctors see a tangible benefit to prescribing biosimilar medicines. Physicians need to understand that prescribing biosimilar products delivers clinical benefits across the market as a whole, and that the cost-savings that result from biosimilar uptake enable more patients to access needed treatment.”

Medication Adherence and Out of Pocket Costs

By Clive Riddle, March 25, 2016

While out of pocket costs impact consumer demand and utilization for healthcare services in various degrees for all aspects of care, the relationship is perhaps the most direct for prescriptions. This direct relationship is due to both the relatively lower average cost per prescription compared to the per unit cost of most other health care services, along with the behavioral economics implications that a prescription typically delivers delayed results, while most other healthcare services provide perceived potentially immediate results.

In this context, Truveris, a pharmacy benefits solutions provider, has just released study results examining medication adherence based upon out of pocket prescription costs. They found that “85 percent of prescriptions are filled when the price at the register is around $30. Once the cost of a prescription surpasses $50, the rate starts a notable decline, dropping to 76 percent. The number of prescriptions filled drops even further, to 65 percent, when the cost is $90 and above.”

Kristin Begley, Chief Pharmacy Officer at Truveris tells us “as healthcare costs continue to burden Americans, there is ample evidence of increased prescription costs leading to discontinuation of medications in order to save money. We’re seeing a troubling trend that when drug prices reach a certain level, consumers are simply walking away, not filling the prescriptions and, in effect, gambling on their health. This should be an urgent wake-up call across the healthcare spectrum.”

Taking things a step further, a Geisinger study published in the February 2016 issue of The American Journal of Managed Care “shows that instituting a zero prescription co-pay for its chronically ill employee population resulted in a positive cost saving and return on investment.”

The Geisinger study found “that a zero co-pay drug program for its chronically ill employee population was associated with positive cost savings and a return on investment of 1.8 over five years….More than 200 prescription medications were selected to be eligible for the $0 co-pay program; those selected were designated for chronic conditions like high blood pressure, cholesterol and diabetes management and were preventative in nature. Geisinger researchers say that VBID implementation within the context of a wider employee wellness program targeting the appropriate population can potentially lead to further positive cost savings.”

Retail Clinics: Trying to Reconcile Cost Per Visit, Utilization, Access and Convenience

By Clive Riddle, March 10, 2016

The March issue of Health Affairs features a paper presenting study findings on retail clinic:  Retail Clinic Visits For Low-Acuity Conditions Increase Utilization And Spending. The title would seem to say it all regarding their findings. The study involved retail clinic use by 3 million Aetna members, from 2010 to 2012 for 11 low-acuity conditions. 

Here’s what the authors had to say in part in their abstract: “We found that 58 percent of retail clinic visits for low-acuity conditions represented new utilization and that retail clinic use was associated with a modest increase in spending, of $14 per person per year. These findings do not support the idea that retail clinics decrease health care spending.”

Kaiser Health News, in covering the story, notes that “The study doesn’t contradict earlier research that found retail clinics provide care that costs 30 to 40 percent less than similar care provided at a physician’s office and that the treatment for routine illnesses was of similar quality. But it suggests those savings are more than offset by increased use of medical services.”

But for some who embrace this perspective, but also are critics of increased consumer cost-sharing including high deductible plans that can limit access, is this perhaps a bit contradictory from a policy standpoint? If you are concerned the increased access and use of such services drives up costs, should you be concerned about cost savings measures that decrease potential access and use?

Interestingly, a Policy Brief in last month’s Health Affairs  on High Deductible Health Plans features the lead-in: “As high-deductible health plans become increasingly prevalent in both group and individual markets, it remains to be seen how they will affect health care access and outcomes.”

Is it a paradox that high-deductible health plan consumers are target audiences for retail care clinics?

Last month, NPR, Robert Wood Johnson Foundation and Harvard T.H. Chan School of Public Health released the 42-page study: Patients’ Perspectives on Health Care in the United States which addressed retail clinic and urgent care use among many things. 92% of survey respondents rated retail clinic costs as reasonable, and 74% rated urgent care costs as reasonable, compared to 77% rating their personal doctor visit costs as reasonable and 58% rating emergency room costs as reasonable.

Granted, the study published in Health Affairs didn’t dispute the lower cost per visit – they just conclude that the retail supply creates demand and thus drives up costs. But what about access, and what happens to overall costs when access isn’t adequate? Isn’t that the critique of high deductible plans – that high out of pocket costs become a barrier to access?

The argument put forth in Health Affairs is your out of pocket costs might be higher per visit, but ultimately lower overall, by always sticking with your personal doctor because you will see them less.

And see them less you very well may. Another aspect of access addressed in the NPR study: 22% said they could not see their regular doctor at some point in the past two years when they needed health care, with the number one reason the doctor did not have any available appointment times (followed by care was needed at night or on the weekend.)

Truven Examines Scope and Drivers in Bundled Commercial Spend for Lower Joint Replacement

By Clive Riddle, March 4, 2016

Truven Health Analytics has just released a twelve page research brief:  Bundled Pricing for Total Joint Replacements in the Commercially Insured Population: Cost Variation Insights by Bundled Care Components, which follows up on their recently released eight page brief on this same topic: Geographic Variation and Cost-Driver Insights.

Truven “found that the primary drivers of cost variation for major lower joint replacement are tied to hospital cost and length of stay. For facility costs, the study attributes up to $1,944 per additional day in total cost variation. That variation is independent of professional costs. The study builds on previous research that found more than $10,000 in commercial bundled spend variation for the same surgeries based on geography.”

Truven shares these key findings:

• The increase in facility cost only (removing professional cost) for each additional day a patient is hospitalized after the procedure varies from $313 per day in the East North Central region to $1,944 per day in the Pacific region, a difference of more than $1,600.
• On average, the cost to treat a patient at a rehab facility was $10,600 per patient, versus $5,300 per patient at a skilled nursing facility, and $1,300 using home health services. And, the cost for rehab facilities varied widely by region, with the cost per patient in the Pacific totaling close to $22,500 compared with roughly $7,000 per patient in New England.
• The cost per bundle for readmissions varied from $538 in the East South Central to $918 in the West South Central division. This lower cost in the East South Central resulted from both a low rate of readmission (3.3 percent) and a low cost per discharge ($16,340).

In their most recent brief, Truven notes that “in our previous research, we estimated the marginal impact of one extra day in the hospital after a TJR to be about $880 per day across all geographic divisions.  To further analyze that finding, we used a mixed effects regression model, with fixed average professional costs, to quantify the increase in facility cost only for each additional day a patient remains hospitalized after the procedure…. The average impact varied from $313 or 1 percent of the base price per additional day in the anchor facility after initial day of hospitalization in the East North Central division, to $1,944 or 6.2 percent of the base price in the Pacific. That’s a difference of more than $1,600.”

Bob Kelley, senior research fellow, advanced analytics, at Truven Health Analytics tells us “as providers and payers begin to consider bundled payment programs for these procedures, it is increasingly important to understand the cost implications of each additional inpatient day, as well as post-acute care and readmissions. Once claims-based, actual patterns are recognized and understood, guidelines and standard best practices can be put in place to guide discharge planning and post-acute care based on patient risk for readmission and other factors contributing to a successful recovery.”

Two Employee Benefit Studies Don’t Agree on Everything – But Do Agree on 52% HDHP Adoption

By Clive Riddle, February 19, 2016 

Benefitfocus has just released the “Benefitfocus State of Employee Benefits 2016,” based on benefit selection data from 700,000+ people at 500 large employers, based on actual behavioral versus self-reported data. They cite that 52 percent of large employer clients now offer high-deductible health plans (HDHPs). 

The report notes that “millennials—born between 1980 and 1989—selected HDHPs more than any other age group. However, while approximately 44 percent of employees in this group chose HDHPs, a much smaller number of these employees took full advantage of health savings accounts (HSAs.)”

In addition, the report found that their clients “should be well positioned to navigate the Cadillac tax to be levied on higher-cost health care plans in 2020 under the Affordable Care Act. Total premiums across all 2016 plans averaged $14,974 for family coverage and $6,096 for individual coverage—both well below the tax’s respective target thresholds of $27,500 and $10,200.” 

While voluntary benefits have receiving much publicity as a popular solution and offering in consumer driven plan environments, they report that “only 36 percent of large employers offered such voluntary benefits for 2016, and only 14 percent of employees actually enrolled.” 

Meanwhile, Wells Fargo Insurance  has just released their Employee Benefits Trend Study surveying 650 middle-market companies and large corporations, which painted a somewhat different picture. They found that “fifty eight percent of employers surveyed expect their medical plan costs to exceed the thresholds for the Affordable Care Act (ACA) excise tax, or “Cadillac” tax, which was originally to take effect in 2018, but has been delayed until 2020.” Their findings state that “As more employers offer high deductible health plans, the C-suite is also aware of the financial exposure that employees face with these types of plans. As a result, they are looking to mitigate those costs by offering voluntary benefits solutions (e.g. critical illness and accident insurance).” 

But the Wells Fargo survey did agree to the penny with the Benefitfocus study on one item – HDHP adoption, citing that “half of the employers in the study said they will continue to make changes to their plans either this year or in 2017 by adding a high deductible plan option (52 percent), increasing the employee contribution percentage (56 percent), or increasing co-insurance features (55 percent).

What Is the Difference Between Population Health, Community Health and Public Health?

by Clive Riddle, February 12, 2016

What Is the Difference Between Population Health, Community Health and Public Health? That is the question asked in the ThoughtLeaders Corner in this month’s issue of Population Health News. Here’s what some population health experts had to share:

Garth Graham, M.D., MPH, President of Aetna Foundation says “throughout medical school and residency, I paid close attention to my mentors in their efforts to make an impact both on the individual patient and on the broader public health level to influence health outcomes in entire communities. Today, as a cardiologist and president of the Aetna Foundation, I work every day to follow in their footsteps by looking at three distinct areas: population health, community health and public health.  When talking about population health, we are describing health and healthcare outcomes that impact a specific group of people being tracked and managed for specified health conditions. For example, at the Aetna Foundation, we’re working to bridge the health divide by paying close attention to chronic diseases, such as heart disease and diabetes, that disproportionately affect African Americans.”

Graham continues: “Community health broadens the scope, going beyond traditional health and healthcare needs to factor in the social determinants of health, such as education, employment, public safety and more. In our work with communities, we know factors such as access to information and services can have a direct impact on community health. As we look at the broader tapestry of national and state indicators, we see public health unfold beyond a specific community or group. It is the 10,000-foot view that helps us define the health of an entire nation. At the Aetna Foundation, we know that where you live can make a dramatic impact on your health. According to data from the Centers for Disease Control and Prevention (CDC), your zip code is a greater indicator of your health than your genetic code. As we work to improve health outcomes and close health divides for underserved communities in our nation, we can all contribute by sparking change—community by community, city block by city block. “ 

Alexis Pezzullo, Chief Growth Officer for DST Health Solutions offers this take: “One of the favorable consequences of the ACA’s passage has been the re-ignition of discussion around ways to enhance and sustain health in individuals, groups and populations. Stakeholders are thinking about and collaborating in various ways to improve health outcomes and address value-based utilization of healthcare resources. Not too surprisingly, the importance of public and community health efforts is becoming increasingly clear. Public health by definition is the science of protecting and improving health of entire populations, from neighborhoods to countries, through promotion of healthy lifestyles, research for disease and injury prevention and detection and control of infectious diseases.”

Pezzullo contrasts that “community health, on the other hand, is a field of public health centered on the study and enhancement of the health characteristics of biological communities. While the term can be broadly defined, community health tends to focus services, education and research on geographical areas with shared characteristics. Population health, meanwhile, is concerned with the distribution of health outcomes across a group of individuals. This field includes health outcomes, patterns of health determinants and policies and interventions that link the two. Improving ‘total’ population health requires partners across public health, healthcare organizations, community organizations and businesses. Today’s population health management necessitates innovative approaches that address the complexity involved in analyzing data, evaluating patient risk and effectively managing care. The cumulative value of these efforts has never been fully realized. As the healthcare industry seeks to optimize outcomes, changing strategies, capabilities and actions to leverage synergies across these health ecosystems is essential.            

Deborah Dorman-Rodriguez, Leader, Healthcare Practice Group, Freeborn & Peters LLP offers that “the terms population health, community health and public health are often used interchangeably even though they are somewhat distinct. Population health is now commonly used in the post-ACA environment in association with the Triple Aim of improving the quality of care, improving the health of populations and reducing the per capita cost of healthcare. David Kindig and Greg Stoddart first defined population health in 2003 as: ‘health outcomes of a group of individuals, including the distribution of such outcomes within the group.’ (Kindig D, Stoddart G. “What Is Population Health?” Am J Public Health. March 2003;93(3):380-383.)”

Dorman-Rodriguez goes on to say that “the definition did not include the cost or provider intervention aspects of healthcare. The evolution of the term over the last 10 to 12 years indicates there is not one specific definition that is universally recognized. It appears, however, that the concept of investment/cost and provider intervention/influence is likely to be included. In contrast, the terms public health and community health have traditionally meant a focus on the improved health of a population. The WHO defines public health broadly as ‘all organized measures (whether public or private) to prevent disease, promote health and prolong life among the population as a whole.’ The CDC Foundation defines public health as being ‘concerned with protecting the health of entire populations.’ Community health is often seen as a field within public health, focusing on the health of a particular population group that has common characteristics, such as culture, work, physical traits, geography or other demographics. All three terms are likely to evolve in their respective meanings given the current emphasis on improving healthcare outcomes.”  

Finally, Neil Smiley, CEO/Founder of Loopback Analytics has this to say: “Population health is a health improvement strategy for risk-based entities, such as managed care plans, self-insured employers and accountable care organizations that are financially responsible for clinical and economic outcomes of beneficiaries under their care. Population health competencies include analytics to proactively identify individuals with shared characteristics, such as chronic conditions, payer classifications, patient demographics and other risk factors. Once a population of interest has been identified, individuals are matched with interventions to manage health risk, with a feedback loop to measure clinical and economic efficacy. “

Smiley states that “community health is defined by local geography, such as a town, city or county. Communities typically include many risk-based entities, each operating their respective population health strategies. Whereas population health is often focused on clinical interventions, community health addresses non-clinical interventions, such as social services, transportation, housing and education provided by non-profits and community-based organizations. Public health spans both risk-based entities and communities with a focus on clinical research, health policy, regulations and quality and safety standards. Public health encompasses environmental factors that can impact the health of a population, such as infectious disease control (Centers for Disease Control and Prevention), air and water quality (Environmental Protection Agency) and safety of the food supply (U.S. Food & Drug Administration). Ideally, population, community and public health initiatives work together to continuously improve healthcare delivery and outcomes. “

More information about Population Health News is available at www.PopulationHealthNews.com