How National Thought Leaders View The Post SCOTUS Public HIX World

By Clive Riddle, July 10, 2015

Earlier this month, Health Insurance Marketplace News published a supplemental edition of their newsletter, providing commentary from 27 ThoughtLeaders around the country at the SCOTUS King v Burwell decision. They were asked: “What’s your gut reaction to the ruling? What happens next? What challenges will Exchanges face now?”

Here’s some excerpts from key ThoughtLeaders representing major stakeholders:

First off, not everyone was pleased with the ruling. Here’s comments from Michael F Cannon, Director of Health Policy Studies, Cato Institute, Washington DC, who was considered one of the primary architects behind the lawsuit brought before SCOTUS:  “So rather than respect the democratic process and the separation of powers, Roberts allowed himself to be intimidated into rewriting the law and writing Congress out of the legislative process….What happens now is that ObamaCare opponents will continue to fight to repeal this law, because so long as it remains on the books ObamaCare will continue to threaten access to care for the sick.”

Grace-Marie Turner, President, Galen Institute, Alexandria VA, a prominent opponent and champion of consumer driven care, tells us “ People want better solutions. The only appeal to a Supreme Court decision is to the American people. Health reform -- patient-centered, consumer-focused health reform -- will be a major issue in the 2016 elections as more and more people experience firsthand the problems with ObamaCare. Change is inevitable.”

Alain C. Enthoven PhD, Marriner S. Eccles Professor of Public and Private Management (Emeritus), Knight Management Center, Stanford (CA) University, a nationally prominent and oft-quoted  figure on health policy  says the decision was “the triumph of common sense. The case should never have been brought. Obviously the intent of the law was to cover every legal resident of the USA. What’s next is to face the challenge of excess healthcare costs, which are diverting resources from meeting other important needs -- such as education, infrastructure, national security and debt reduction The ACA did very little to change the fundamental cost-increasing incentives in our system of healthcare finance. Two good places to start would be to cap the exclusion of employer contributions from employee taxable incomes at the level of efficient health plans and to convert Medicare to a premium support model, so that practically everyone would have cost-conscious choices of health plan.”

Mila Kofman JD, Executive Director, DC Health Benefit Exchange Authority, Washington DC,  actually runs a state public exchange and was of course, a happy camper: “The Supreme Court decision was important for millions of Americans who now have access to quality, affordable health coverage thanks to tax credits provided through the Affordable Care Act. I am very glad that states that use Healthcare.gov didn’t have to scramble to try to protect millions of people who would have lost access to affordable health coverage. I am relieved that millions of Americans who need premium reductions to stay covered no longer have to worry about becoming uninsured.”

Meanwhile, Simeon Schindelman, CEO, Bloom Health, Minneapolis – one of the most noteable private exchange platforms – is a little pessimistic: “The individual market needed reforming. The ACA is an incredibly expensive and complicated way to accomplish some of that reformation, but it does seem to make health insurance in the individual market accessible to many more people -- and that is a worthy outcome. I’m not judging the method, only that portion of the result. Reduction in uninsured is largely a result of Medicaid expansion and we need to be clear on that. Financial (and potentially operational) sustainability of state Exchanges, while watching insurance premium rates in the individual market over the next couple of years as the environment changes a lot, could be the next two big issues. On the former, there seems to be some pretty rough sledding coming soon and in some instances already here. On the latter, we have an abundance of speculation, but it’s an important topic.” 

From the employer perspective, JD Piro, Senior Vice President and National Practice Leader, Health and Benefits Practice, Legal Group, Aon Hewitt, Lincolnshire IL, tells us “this case was the last major judicial hurdle that the Affordable Care Act had to clear before full implementation. As a result, employers should focus on reporting on compliance with individual and employer mandates for 2016, as well as determining the impact of the excise tax in 2018. Additionally, more employers may consider a strategy of transitioning pre-65 retirees from group-based insurance to the individual public Exchange to take full advantage of the choice, competition, favorable premiums and federal subsidies.”

Larry Boress, CEO and President, Midwest Business Group on Health; Executive Director, National Association of Worksite Health Centers; Chicago, echoes the excise tax concern: “Most employers had already planned to offer health benefits prior to the decision and will stay the course to focus on how to avoid the excise tax.”

And words from the man involved at the very start – with the Commonwealth Health Insurance Connector Authority that helped inspire the ACA - Jon M Kingsdale PhD, Managing Director, Wakely Consulting Group; Visiting Lecturer on Healthcare Policy, Department of Healthcare Policy, Harvard Medical School; Former Executive Director, Commonwealth Health Insurance Connector Authority; Boston: “The 6-3 majority interpreted the ACA in the only way that makes sense, notwithstanding clear (and clearly mistaken) wording to the contrary. This is actually a ‘win’ for all interested parties, except the actual plaintiffs: It preserves coverage for 6.2 million Americans of modest income; it strengthens the law; it averts chaos in the individual insurance market in 32 states; and it allows Republicans to continue rallying their base by attacking ‘Obamacare,’ while escaping the political fallout for succeeding. Both Justice Roberts’ ruling and Justice Scalia’s overwrought dissent point to a common need -- for Congress to move beyond political posturing to constructive revision of the ACA, if only to correct poor drafting. Of course, substantive improvements are also needed, first and foremost to simplify this outrageously complex statute. However, any opportunity to do so awaits the outcome of our next national election.”

Jurassic Park: Rise of the Health Insurers

By Kim Bellard, June 26, 2015

If you want to see dinosaurs fighting, stalking, and even mating, you don't need to go see Jurassic World.  Just pick up the business pages and see what is going on with the big health insurers, who seem intent on getting even bigger.

Whether anything actually comes of all the merger mania, or whether such mergers prove good for consumers, remains to be seen.

Everyone seems to be in play.  The Wall Street Journal reported that Anthem has made overtures to Cigna, while United is interested in Aetna, with Humana still attractive to Aetna and Cigna.  You can't make this stuff up. It would be ironic if Humana was one left standing in this game of musical chairs, but many feel their assets are too inviting to be left out. 

One conventional wisdom is that these kinds of mergers/acquisitions have to do with scale. Bigger means more lives to spread such costs over.  The other culprit often cited is a desire to gain more clout with providers,

The trouble is, no matter how big health plans get, if they face markets where there is, in essence, only one provider with which to negotiate, size doesn't really matter. Bigger isn't always better.

You can make dinosaurs bigger, but that doesn't make them more agile or better prepared to deal with new risks.  I'm wondering when we're going to see not bigger health insurers, but truly different models for them.

We've seen true integrated provider/health plan models like Kaiser, Group Health Cooperative, or Geisinger for decades now, and they're generally successful in their core markets, but that model hasn't proved easily replicable. 

We've also seem health system building their own health plans, such as Intermountain Healthcare, Sentara, or UPMC.   We've even seen health plans buying/building their own health systems, such as UPMC's bitter rival Highmark Health.

If Anthem buys Cigna or United buys Aetna, it wouldn't be all that interesting, nor would it be novel.  Those are dinosaurs getting bigger but not evolving.  

If Humana and HCA got back together, that would be interesting.  That would be provider/payor integration writ large, and maybe produce something new. 

And if, say, CVS or Walgreens chose to merge with a health insurer, that would something even more unique.  I don't know how they'd change the health insurer, but it might be fun to find out.

Honestly, though, what I'd really love to see is a company from an entirely different sector, hopefully one with a strong consumer focus, buy into the health insurance business.  Maybe Humana should get back together with the Virgin Group, or perhaps Walmart would be interested in taking over a Medicaid managed care or Medicare Advantage plan.  Wouldn't you love to see Walmart take on the health care supply chain?  I bet they could squeeze better value out for its customers.

Jurassic World seems to be raking in the money despite being just another sequel about rogue dinosaurs.  Let's hope we see something with health insurers that isn't just another sequel as well.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Some Things to Know and Ask in the Aftermath of the CVS/Target Deal

By Clive Riddle, June 19, 2015

Here’s some things to know in the aftermath of the announced CVS/Target deal . We can start with this list of deal points that the two companies provided in their press release announcing the acquisition and strategic partnership:

• CVS Health will acquire Target’s pharmacy and clinic businesses for approximately $1.9 billion.
• CVS Health will acquire Target’s more than 1,660 pharmacies across 47 states and operate them through a store-within-a-store format, branded as CVS/pharmacy.
• A CVS/pharmacy will be included in all new Target stores that offer pharmacy services
• Target’s nearly 80 clinic locations will be rebranded as MinuteClinic,
• CVS Health will open up to 20 new clinics in Target stores within three years of the close of the transaction. The new clinics will be part of CVS/minuteclinic’s plan to operate 1,500 clinics by 2017
• CVS Health and Target plan to develop five to 10 small, flexible format stores over a two-year period following the deal close, which will each be branded as TargetExpress and include a CVS/pharmacy

Two new videos posted in HealthShareTV help explain the deal in simpler terms:  CVS, Target Merger Might Boost Health Of Both Companies and CVS Health Taking Over Target's Pharmacy, Clinics for $1.9 Bn.

Two new healthsprocket each list five reasons behind the motivations for the deal:  Fortune Magazine: Five reasons Target's deal with CVS Health makes it leaner and meaner and USA Today: 5 reasons why Target sold pharmacy biz to CVS. The two lists differ some – but what they have in common mentions foot traffic and that Target wasn’t in a position to excel at pharmacy.

One way of framing the deal from Target’s perspective, is that it’s just a part of their larger picture to streamline and focus. For example, in April they announced finalization of closure of all Canadian Stores. The big picture was their $2 billion restructuring plan announced in February which has included rounds of corporate layoffs from March through this week, with the Minneapolis / St. Paul Business Journal reporting that the “Minneapolis-based retailer, Minnesota's fifth-largest employer, has now cut 2,360 jobs in the U.S., 17,600 in Canada and 350 in India this year.”

A key statistic to note, is that sources cite only 5% to 7% of Target customers use the store’s pharmacy services. Thus -the difference for the two companies is that Target customers come to purchase consumer goods, and some incrementally purchase prescription and health items as long as they’re going to be at Target; while CVS customers come to purchase prescription and health items, and some incrementally purchase consumer goods as long as they’re going to be at CVS.

Does this signal a trend for chain supermarkets, or other big box retailers such as Costco, that offer pharmacy services? If more retailers do shed or partner their pharmacy services , what are the implications for the retail clinic industry? 

Health Plan Member Portals

By Claire Thayer, June 18, 2015

During the months of May and June, MCOL and LexisNexis conducted an e-poll of healthcare professionals on their involvement and insights with health plan member portals.  Respondents were categorized as Health Plan, Integrated delivery Network, Third Party Administrator (TPA), Self-Insured Employer, and Other. Overall, two thirds of the respondents indicated that they currently have a health plan member portal in place, and 43% of those who currently don’t have a health plan member portal in place plan on establishing one within the next 12 months. 

MCOL’s infoGraphoid for this week highlights results from the MCOL / LexisNexis e-poll as well as Cigna’s experience with their CDHP customers’ use of health portals and a recent HIMSS Leadership survey on use of patient portals:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

PwC and Milliman Examination of Medical Cost Trends

by Clive Riddle, June 10, 2015

PwC projects a medical cost trend for 2016 of 6.5%, netting down to 4.5% after benefit design changes. Milliman tells us that the 2015 actual trend was 6.3%, up from 5.4% in 2014.

PwC’s Health Research Institute this week released their tenth annual Behind the Numbers report, which includes a “projection for the coming year’s medical cost trend based on analysis of medical costs in the large employer insurance market. In compiling data for 2016, HRI interviewed industry executives, health policy experts and health plan actuaries whose companies cover more than 100 million employer based members.

Milliman released their fifteenth annual Milliman Medical Index report two weeks ago, which is “an actuarial analysis of the projected total cost of healthcare for a hypothetical family of four covered by an employer-sponsored preferred provider organization (PPO) plan. Unlike many other healthcare cost reports, the MMI measures the total cost of healthcare benefits, not just the employer’s share of the costs, and not just premiums. The MMI only includes healthcare costs. It does not include health plan administrative expenses or profit loads.”

With respect to 2015, Milliman found “the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $24,671”, up from $23,215 in 2014. The 2015 family costs works out to $2,055 on a monthly basis.

Milliman emphasizes the importance of the role the Rx costs play in the mix. They note “prescription drug costs spiked significantly, growing by 13.6% from 2014 to 2015. Growth over the previous five years averaged 6.8%. The 2015 spike resulted from the introduction of new specialty drugs as well as price increases in both brand and generic name drugs, increases in use of compound medicines, and other causes. Since the MMI’s inception in 2001, prescription drugs have increased by 9.4% on average, exceeding the 7.7% average trend for all other services. Prescription drug costs now comprise 15.9% of total healthcare spending for our family of four, up from 13.2% in 2001.”

Milliman also highlights the role of cost-sharing, citing that the “total employee cost (payroll deductions plus out-of-pocket expenses) increased by approximately 43% from 2010 to 2015, while employer costs increased by 32%. Of the $24,671 in total healthcare costs for this typical family, $10,473 is paid by the family, $6,408 through payroll deductions, and $4,065 in out-of-pocket expenses incurred at point of care.”

PwC also keys on these two issues for 2016 as well, with drugs as an inflator, and cost-sharing as a deflator of the medical trend.  PwC spotlighted two inflators of the 2016 medical trend: (1) New specialty drugs entering the market in 2015 and 2016 will continue to push health spending growth upward; and (2) Major cyber-security breaches are forcing health companies to step up investments to guard personal health data, adding to the overall cost of delivering care.

PwC notes three factors that serve to "deflate" the 2016 medical cost trend: (1) The Affordable Care Act’s looming “Cadillac tax” on high-priced plans which is accelerating cost-shifting from employers to employees to reduce costs; (2) Greater adoption of “virtual care” technology that can be more efficient and convenient than traditional medical care; and (3) New health advisers helping to steer consumers to more efficient healthcare.

PwC also comments on the longer range medical trend perspective, citing four key cost growth factors H observed over the past decade:

• The healthcare-spending trajectory has leveled off but is not declining;
• Cost sharing slows consumer use of health services;
• Curtailing inpatient care lowers costs; and
• The ACA has had minimal direct effect on employer health costs.

Track 3 For Medicare ACOs

by Clive Riddle, June 5, 2015

CMS has just issued a 592 page MSSP ACO final rule resulting from their proposed rule issue in December, which received 275 stakeholder comments.

Here’s what CMS, in their own words, says the new final rule will accomplish:

• Creates a new Track 3, based on some of the successful features of the Pioneer ACO Model, which includes higher rates of shared savings, the prospective assignment of beneficiaries, and the opportunity to use new care coordination tools;
• Streamlines the data sharing between CMS and ACOs, helping ACOs more easily access data on their patients in a secure way for quality improvement and care coordination that can drive critical improvements in beneficiaries’ care;
• Establishes a waiver of the 3-day stay Skilled Nursing Facility (SNF) rule for beneficiaries that are prospectively assigned to ACOs under Track 3; and
• Refines the policies for resetting ACO benchmarks to help ensure that the program continues to provide strong incentives for ACOs to improve patient care and generate cost savings, and announces CMS’ intent to propose further improvements to the benchmarking methodology later this year. 

CMS notes that “over 400 ACOs are participating in the Medicare Shared Savings Program, serving over 7 million beneficiaries.” With respect to basing their new Track 3 on selected components of their Pioneer ACO model, they tout that Pioneer ACOs “generated over $384 million in savings to Medicare over its first two years – an average of approximately $300 per participating beneficiary per year – while continuing to deliver high-quality patient care.  The Pioneer ACO Model is the first that meets the tests to have its elements incorporated into other Medicare programs.” 

California Healthline reports that “the new track for ACOs will allow them to retain up to 75% of what they save but also be responsible for up to 75% of their losses (California Healthline, 12/2/14). ACOs in the new track also will be given a fixed set of beneficiaries for which they must provide care (Modern Healthcare, 6/4)….. CMS said that it expects the rule change will help ensure that 90% of MSSP ACOs stay with the program.”

Positive Trends in the Land of Retail and Workplace Clinics

By Clive Riddle, May 29, 2015

Last month, the Robert Wood Johnson Foundation commissioned Manatt Health to issue an excellent 25 page report:  The Value Proposition of Retail Clinics, in which they remind us that “since first emerging on the health care landscape more than 15 years ago, retail clinics are now a common feature, with 10.5 million visits occurring annually at more than 1,800 retail clinics.

The report emphasizes the potential for current and future collaborations between retail clinic organizations and health care systems, noting “to date, more than 100 partnerships between retail clinics and health systems have been formed, linking care between retail sites and primary care medical homes, expanding after-hours care options and enabling health systems to provide patients with alternatives to emergency departments (EDs). In fact, one study estimated that up to 27 percent of ED visits could be handled appropriately at retail clinics and urgent care centers…”

With respect to the growth and scope of the retail clinic market, just this month CVS  Health’s MinuteClinic announced they  “will open more than 100 new clinics this year and anticipates surpassing 1,500 clinics by 2017,” and they have reached  the cumulative “25 Million Patient Visit Milestone.“

With respect to partnerships during the past month, California Healthline discussed: ”Kaiser-Target Partnership Sign of Times” and CVS Health announced clinical affiliations with Ochsner Health System in Louisiana and the University of Mississippi Medical Center, including their Center for Telehealth.

Meanwhile, on the workplace onsite clinic front, Towers Watson this week released their 2015 Employer-Sponsored Health Care Centers Survey report, which polled  137 U.S. employers in which 105 currently offer employer-sponsored health centers, and 15 are planning to offer by 2018, and represent 4.6 million employees.

Here’s some highlights of Towers Watson’s onsite clinic findings:

• 38% of large U.S. employers with onsite health facilities plan to add new centers over the next two years,
• 66% expect to expand or enhance the already broad services they offer by 2018
• Wellness programs are already available at 86% of the centers
• Lifestyle coaching to promote and reinforce behavior changes is currently offered at 63% of the centers
• Half of employer-sponsored health centers now offer some type of pharmacy services, up from 38% in 2012
• 35% offer telemedicine services, with another 12% planning to in the next two years.
• 40% have two to five centers
• 56% have had onsite health centers for over five years
• 55% are open before 8:00 a.m.; 32% are open after 5:00 p.m., and 16% are open on weekends
• 64% outsource managing staffing and services at the health centers
• 23% run the centers themselves
• 18% use local or regional provider groups or health systems
• 75% employers with onsite health centers calculate their ROI, up from 47% in 2012

One free resource for those monitoring activities in this sector, the Workplace & Retail Clinic Bulletin, offering free twice monthly e-newsletters.

Not One Penny More

By Kim Bellard, May 21, 2015

If you've been to a doctor's office or seen some other health care provider, chances are you've had to sign a patient consent form that, among other things, makes you promise that whatever they end up doing to you, and however much they choose to charge you for it, you're responsible for paying.  If your health plan happens to get you a negotiated rate and perhaps covers some of the expenses, that's great, but the provider is still looking to you for payment.

Maybe you shouldn't be so quick to sign.

I don't know which is worse: that providers don't think they should tell you in advance what they plan to do to you, or that they don't want to admit how much they will try to charge for it.  Honestly, why do we keep falling for this?

I thought about this when reading Kaiser Health News' Radical Approach to Huge Hospital Bills: Set Your Own Price.  It profiles benefits consulting company ELAP Services, which goes beyond traditional services like benefits design, direct contracting, and medical bill reviews by also vowing to go to court if necessary to support their customers in disputes over medical bills.

The KHN article cited the example where an employee of one of ELAP's clients had back surgery and was billed $600,000 by the hospital.  ELAP analyzed the hospital's Medicare's cost reports, and advised the client to pay a much lower amount.  "We wrote a check to the hospital for $28,900 and we never heard from them again," said the client's CFO.

ELAP CEO Steve Kelly says "overwhelmingly, the providers just accept the payment."  ELAP has clients write their process for determining reimbursements into benefit plan documents to give greater legal weight.  They already have a federal court ruling in support of their process.  The contract requires them to defend patients from any collections efforts, in return for a percentage of the savings.

Most health plans base their out-of-network payments on "reasonable charges," which is how most health insurance plans worked prior to the advent of network plans like PPOs, when negotiated payment rates became the norm.  

Whether it has worked as intended is not entirely clear, but what is clear is that providers can come after patients for amounts not paid out-of-network by the health plans, all the way up to billed charges, not just to the "reasonable charges."

What I want to know is, if health plans truly believe their limits on charges are reasonable, why don't more of them act like ELAP when providers' charges exceed them?   ELAP makes it clear whose side they are on; health plans, not so much.

I view the charge structure of most providers as a pernicious symptom of much of what is wrong with our health care system.  They rarely have much to do with either actual costs or market forces, and they reflect an arrogant attitude that consumers are there to be gouged as much as possible.  Or, more charitably, if not arrogance, then a certain benign neglect to patients' financial well-being.  

I'd love to see a health plan whose EOBs not only detailed how much they were paying and how much of the remaining balance the consumer had to pay, but also said, "by the way, we think $X is the most your provider should charge you for this service, and we don't think you should pay a penny more.  If they try to charge you more, let us know and we'll help you fight it."

Now that would be a health plan that consumers would think more of, one that is truly on their side.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Impact of Stress on Health Risk

By Claire Thayer, May 20, 2015

Stress is prevalent, and at some point, all of us are faced with some type of stress in our lives.  What is considered as a stressful situation to one person may be inconsequential to another.  A recent WebMD study finds that 43% of all adults suffer adverse affects from stress. WebMD tells us that a little stress every now and then is not something to be concerned about. However, it’s the ongoing chronic stress that can cause or exacerbate many serious health problems, including:

• Mental health problems, such as depression, anxiety, and personality disorders
• Cardiovascular disease, including heart disease, high blood pressure, abnormal heart rhythms, heart attacks, and stroke
• Obesity and other eating disorders
• Skin and hair problems, such as acne, psoriasis, and eczema, and permanent hair loss
• Gastrointestinal problems, such as GERD, gastritis, ulcerative colitis, and irritable colon

MCOL’s infoGraphoid for this week takes a look at the impact of stress on health risk, outlining three different types of stress and the impact on both overall physical and mental health:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

Patient Reported Outcomes

By Clive Riddle, May 15, 2015

The National Quality Forum defines Patient-Reported Outcomes (PROs) as "any report of the status of a patient's health condition that comes directly from the patient, without interpretation of the patient's response by a clinician or anyone else." They elaborate that “in other words, PRO tools measure what patients are able to do and how they feel by asking questions. These tools enable assessment of patient–reported health status for physical, mental, and social well–being.”

The concept is obviously not new, but has certainly been overlooked at times. In an era with tremendous advances and emphasis in patient engagement, mobile health technologies, patient-centered care, we need to continue to see application of PROs receive the attention they deserve.

Dr. Bruce Feinberg, vice president and chief medical officer of Cardinal Health Specialty Solutions, tells us "As our healthcare system moves toward a value-based care model, the role of the patient is becoming increasingly important. We need to reframe the way we think about care to include not only the cost and clinical effectiveness of the treatment, but also the burden of disease and therapy on the patient's perceived sense of well-being. Patient-reported outcomes (PRO) are key to this equation, particularly for patients being treated for high-cost, complex diseases such as cancer or rheumatoid arthritis (RA)."

Dr. Feinberg’s organization is presenting a series of new clinical studies demonstrating the potential role of PRO research in improving the quality and reduce the costs of treatment provided to patients with complex diseases, at the International Society of Pharmacoeconomic and Outcomes Research (ISPOR) annual meeting.

Here's an overview of some of the key findings they will be presenting:

• One study used PRO to demonstrate that rheumatologists significantly underestimated the negative impact of RA disease burden and treatment on their patients' sense of well-being. Understanding this disparity in perceptions can help physicians make effective treatment decisions that lessen the burden on patients – and can sometimes also reduce the costs of their care.
• Another study showed that PRO can be critical to identifying and managing medication access and adherence challenges for high-cost specialty drugs.
• Of a total of 239 oncology and rheumatology patients who were contacted at the time of their initial prescription to provide patient reported outcomes, 28% were identified as having problems that either restricted access or adherence to the drug.
• Armed with this information, interventions and support services were provided to address those challenges. With the support of these interventions, a medication possession ration exceeding 95% was achieved – enabling nearly all patients to initiate or continue treatment.
• A third study  proved the feasibility of collecting PRO at the point of care. In the clinical study involving 3,185 RA patients, PRO data was captured during 90% of physician visits. The participating physicians were then able to utilize the data to inform real-time treatment decisions at the point of care.

Annual Global Oncology Medicine Spending Tops $100 Billion

by Clive Riddle, May 7, 2015 

The IMS Institute for Healthcare Informatics has just released a new report:  Developments in Cancer Treatments, Market Dynamics, Patient Access and Value: Global Oncology Trend Report 2015 which tells us “total global spending on oncology medicines – including therapeutic treatments and supportive care – reached the $100 billion threshold in 2014, even as the share of total medicine spending of oncologics increased only modestly.” 

The report found that “growth in global spending on cancer drugs – measured using ex-manufacturer prices and not reflecting off-invoice discounts, rebates or patient access programs – increased at a compound annual growth rate (CAGR) of 6.5 percent on a constant-dollar basis during the past five years. Oncology spending remains concentrated among the U.S. and five largest European countries, which together account for 66 percent of the total market, while the rising prevalence of cancer and greater patient access to treatments in pharmerging nations continues to grow and now accounts for 13 percent of the market” 

Murray Aitken, IMS Health senior vice president and executive director of the IMS Institute for Healthcare Informatics tells us“the increased prevalence of most cancers, earlier treatment initiation, new medicines and improved outcomes are all contributing to the greater demand for oncology therapeutics around the world. Innovative therapeutic classes, combination therapies and the use of biomarkers will change the landscape over the next several years, holding out the promise of substantial improvements in survival with lower toxicity for cancer patients.” 

Findings shared in the report include: 

• Growth in the U.S. has risen more slowly at 5.3 percent CAGR, reaching $42.4 billion in 2014, representing 11.3 percent of total drug spending compared to 10.7 percent in 2010.
• in the EU5 countries oncology now represents 14.7 percent of total drug spending, up from 13.3 percent in 2010.
• Targeted therapies now account for nearly 50 percent of total spending and have been growing at 14.6 percent CAGR since 2009.
• Within the U.S., two-thirds of Americans diagnosed with cancer now live at least five years, compared to just over half in 1990.
• The availability of new oncology medicines varies widely across the major developed countries, with patients in Japan, Spain and South Korea having access in 2014 to fewer than half of the new cancer drugs launched globally in the prior five years.
• Average therapy treatment costs per month have increased 39 percent in the U.S. over the past ten years in inflation-adjusted terms. Over the same period, patient response rates have improved by 42 percent and treatment duration has increased 45 percent, reflecting improved survival rates.
• Within the U.S., patient out-of-pocket costs have risen sharply for intravenous cancer drugs, increasing 71 percent from 2012 to 2013, reflecting changes in plan designs and increased outpatient facility costs. 

An interactive version of the full report is available via iTunes, but requires am iPad for viewing. Pdf versions of exhibits can be downloaded here. 

Four Factors Fueling Demand for Telehealth

By Claire Thayer, May 7, 2015

Telehealth, as defined by the Health Resources and Services Administration, is the use of electronic information and telecommunications technologies to support long-distance clinical health care, patient and professional health-related education, public health and health administration. Technologies include videoconferencing, the internet, store-and-forward imaging, streaming media, and terrestrial and wireless communications. 

MCOL’s infoGraphoid for this week identifies these four factors as the key components fueling the increasing demand for telehealth:

• Reduce Health Care Costs
• Improve Access to Care
• More Productive Workforce
• Better Patient Experience

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

What are the implications of the upward spiral occurring in the specialty drug cost trend?

By Clive Riddle, May 1, 2015 

What are the implications of the upward spiral occurring in the specialty drug cost trend?" That was the question asked of experts in the current issue in MCOL’s ThoughtLeaders. A running theme in their responses was that this will further drive the value-based payment movement. Our ThoughtLeader Dr.  Peter Kongstvedt also takes us a “wonk on the wild side: predicting policy implications including more legislation. 

Here’s some excerpts from their responses in ThoughtLeaders: 

Vicky Parikh,  MD, MPH, (Executive Director, Reliance Health and Executive Director, Mid-Atlantic Medical Research Centers) frames the discussion, and points to further cost-sharing as the consequence – “Specialty drugs can cost more than $600 per treatment, $4,000 or more a month and can reach expenditures up to $100,000 a year. By 2020 the overall spending for specialty drugs could potentially reach $400 billion, or 9.1% of national health spending. In 2009, .12 cents out of every dollar spent went to specialty drugs. Now, that amount has risen to .32 cents out of every dollar. But what does the increase of prices for specialty drugs have to do with anything, when most individuals have a health plan that pay for medical expenditures? Employer based health plans could cause employees to see a change of benefits, increasing deductibles and overall shifting of the more expensive bills being passed towards the employee.” 

Jeremy Nobel,  MD, MPH, (Northeast Business Group on Health,  Executive Director, NEBGH's Solutions & Innovations Center and Faculty, Center for Primary Care, Harvard Medical School)  sees the trend hastening value-based purchasing – “The upward spiral on Specialty Pharma costs will likely accelerate the pace at which patient-centered care will reshape the healthcare marketplace from ‘volume-based’ to ‘value-based.’ Facilitated by highly personalized care coordination, back-stopped by advanced analytics, and rewarded with a host of outcomes-based payment mechanisms, providers and systems that can adjust to that ‘new normal’ will become dominant players. From a purchaser perspective, the traditional focus on reducing costs of "components of care" and managing unit price through volume discounts for everything from drugs to hospital days, to office visits and diagnostic tests, needs to move rapidly and comprehensively towards a focus on ‘total cost of care’ with a payment model that rewards cost reduction as long as quality benchmarks are maintained. And with the inevitable market entry of new medications like the PCSK9 class of drugs targeting extremely common conditions like hypercholesterolemia, the current Rx cost/value management mechanisms for Specialty Pharma will ‘fall short’ quickly.”  

Cyndy Natyer, President, CyndyNayer.com and Founder/CEO of Center of Health Engagement) also looks to value – “My goal is to shift the conversation to what is the value of the drug, and if it can prevent high cost conditions from becoming higher costs, then a higher priced drug may well be worth the negotiated spend…On the other hand, some of the drugs in the specialty arena are going thru yearly increases of thousands of dollars without new technology or formulations. In this case, the price escalation without better outcomes must be considered when negotiating the price of the drugs. We are even seeing many-hundred-percent increases in some common drugs, not specialty, for common chronic illnesses, again with little or no attribution to new technology in the drugs. In each case, I'd like to think that we will not simply deny a drug to a patient because of the cost, and that we would not waste valuable time demanding that folks fail on the drugs we know will not suit them because they are cheaper.” 

Constance A. Wilkinson (Member of the Firm, Epstein Becker & Green, P.C.) and Alan J. Arville (Member of the Firm, Epstein Becker & Green, P.C.) also go down the value-based path – “Manufacturers (and payors) will continue to pursue a value-based purchasing strategy, such as an outcomes-based approach, to support the value proposition of the drug. Such arrangements build in financial incentives or penalties for manufacturers that are contingent upon negotiated performance standards (typically based on quality or health outcomes). There are particular challenges in implementing this approach for federal health care program beneficiaries due to the potential implications to manufacturer drug price reporting under those programs, and the attendant financial consequences.” 

Peter R. Kongstvedt, MD, FACP (Principal, P.R. Kongstvedt Company, LLC) sees policy implications - “The two most significant long-term implications of rising specialty pharmacy drug costs are to create the pressure for another round of "health reform" and on international trade policy. These are obvious choices, I know, but let's look closer and take a wonk on the wild side ("...and the wonks go doo, da-doo, da-doo, da-doo doodoo, doo, da-doo, da-doo, da-doo doodoo..." *). [* Apologies to the late and sorely missed Lou Reed.] 

Peter explains that “there are really two broad types of specialty pharmacy though: manufactured drugs that are one or perhaps two molecules, regardless of how they are manufactured or delivered; and compounding pharmacy drugs. Compounding accounts for a surprising amount of the specialty pharmacy cost increase, but because it uses drugs manufactured by others, it can be managed with through tough negotiations, the use of a single compounding pharmacy, strict adherence to medical guidelines, preauthorization, a closed formulary, and benefits design. That leaves us with the manufactured molecules that have the long term implications.”

Peter sees the trend accelerating cost-sharing, which in turn will accelerate legislative reform of cost-sharing, and even pricing. “We will bypass all but one of the short term implications related to the existing approaches to managing costs such as preauthorization, drug utilization review, step therapy, formulary control and the like, as well as the counter-measures used by the manufacturers. But one of the most common approaches is increased cost-sharing, and that's the one that could get us to another round of health reform. Increased cost-sharing for specialty pharmacy is not quite the same as upping the PCP office visit copay by $10. It now often includes separate deductibles and coinsurance being applied only to specialty pharmacy coverage, which for a lot of people is both good news and bad news. The good news is that cost-sharing goes away when they hit their annual out-of-pocket maximum, which may occur in the second month of coverage; the bad news is they are slowly going bankrupt because most people don't have $6,600.00 (2015 single) / $13,200.00 (2015 Family) of spare cash every year in their savings or under the couch cushions. This brings us to Health Reform II: The Next Act…..Multiple states are now considering "cap the copay" bills that would require state licensed insurers and HMOs to markedly limit cost-sharing; for example, one Oregon bill under consideration would cap cost-sharing at $100 per month.”

Peter warns that “’Cap the copay’ and similar laws are like mowing the lawn to get rid of dandelions - it only appears to solve a problem that is actually growing. Specialty pharmacy costs, and really all healthcare costs related to pricing, in reality grow faster when richer coverage is required. Eventually those very real and ever-rising costs will force us as a society to once again grapple with national health policy about how we finance health care goods and services. Payers were first in the reform barrel. Pricing is likely to be next, though it may be confined to one sector, and specialty pharmacy or drug manufacturers overall seems to have raised its collective hand to be called on next.”

Does Patient Satisfaction Matter?

By Kim Bellard, April 24, 2015 

In a provocative article for The Atlantic, Alexandra Robbins posits that we may have a "problem with satisfied patients."  Ah, only in health care...

Ms. Robbins fears that hospitals may be focusing too much on making patients happier, rather than on making them well.  She cites how hospitals are rushing to provide "extra amenities such as valet parking, live music, custom-order room-service meals, and flat-screen televisions," which may help patients have a better experience but which mean resources not going directly to patient care.

She may have a point.

Ms. Robbins' analysis found that hospitals that do poorly on three or more categories of patient outcome measures actually score above average on patient satisfaction.  In her words: "Many hospitals seem to be highly focused on pixie-dusted sleight of hand because they believe they can trick patients into thinking they got better care."

Ouch.

Ms. Robbins cited a 2012 study by Fenton, et. alia, that further quantified the patient satisfaction "problem."   According to their research, patients with the highest satisfaction also have higher odds of inpatient admissions, greater prescription drug expenditures, higher overall expenditures, and higher mortality.

Patient satisfaction is clearly in vogue, as evidenced by CMS unveiling its star ratings on Hospital Compare last week, based on HCAHPS results, and by Medicare's increased focus on value-based payments.  The 2015 HIMSS Leadership Survey found that 87% of respondents listed patient satisfaction as their organization's top priority, higher than even sustaining financial viability (85%).

AHA's official response to the CMS ratings was cautionary: "There's a risk to oversimplifying the complexity of quality care or misinterpreting what is important to a particular patient, especially since patients seek care for many different reasons."

OK, fair enough...so what does AHA propose instead?

Another study on patient satisfaction, by Vanguard Communications, looked at patient reviews of physicians, and also found some unexpected results: "Ironically, the analysis indicates that generally as a doctor’s level of education and training increases, patient satisfaction actually decreases."

I didn't see that one coming.

Vanguard believes that the ratings reflect more about customer service than clinical quality.  Ron Harmon King, Vanguard's CEO, says:  "Does that mean more highly trained specialists deliver poorer customer service? We can’t say with any certainty, although we found a correlation."

The Physicians Foundation 2014 survey found that 42% of respondents did, indeed, list a customer-service related reason for why they were satisfied with their family physician, way ahead of actual treatment related reasons (26%).  

 
Ms. Robbins is thus not alone in being skeptical about patient satisfaction scores.  She backed up her skepticism with a quote from nurse Amy Bozeman: "The patient is NOT always right. They just don’t have the knowledge and training."  

I hate to break it to either of them, but even with all our health care professionals' knowledge and training, our health system's record on quality is pretty dismal.

Look, patient satisfaction is not a perfect measure, nor should it ever be the only measure used, but it has to be an important measure.  I can see patients being initially swayed by amenities or even simple courtesy, neither of which have typically been in abundance in our health system.  But we can't afford to forgo the burgeoning effort to focus on improving patient satisfaction.  At some point we have to trust that patients will see through smiles and nicer waiting rooms, and judge quality based on whether they are actually getting better.

And, in fact, research from Johns Hopkins suggests that patients may not fall for "pixie dusted sleight-of-hand" tricks after all.  The study concluded that:

"Patients responded positively to pleasing surroundings and comfort, but were able to discriminate their experiences with the hospital environment from those with physicians and nurses...Hospital administrators should not use outdated facilities as an excuse for suboptimal provider satisfaction scores."   

As Abraham Lincoln famously said: "You can fool all of the people some of the time, and some of the people all the time, but you cannot fool all the people all of the time."

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Vormetric Report: 48% of Healthcare organizations Had Data Breach or Failed Compliance Audit in Past Year

By Clive Riddle, April 16, 2015

Given the Anthem health plan hack in February, and other healthcare organizations that have fallen victim to breaches as of late, surveys offering threat assessments are certainly of interest. Vormetric just released the twenty-page 2015 Vormetric Insider Threat Report, which includes healthcare industry specific data.

How does Vormetric define Insider Threats? "Insider threats are caused by a wide range of offenders who either maliciously or accidentally do things that put an organization and its data at risk. The insider threat landscape is becoming more difficult to deal with as the range of miscreants moves beyond employees and privileged IT staff. It now includes outsiders who have stolen valid user credentials; business partners, suppliers, and contractors with inappropriate access rights; and third-party service providers with excessive admin privileges. Unless properly controlled, all of these groups have the opportunity to reach inside corporate networks and steal unprotected data."

Vormetric's 2015 Insider Threat Report was conducted online by Harris Poll during fall 2014, with 818 global respondents who work full-time as an IT professional with major influence in decision making for their company’s IT. In the U.S., 408 ITDMs were surveyed among companies with at least $200 million in revenue with 102 from the health care industries, 102 from financial industries, 102 from retail industries and 102 from other industries.

Vormetric reminds us that hacker attraction to healthcare is fueled by black market “healthcare records selling for tens to hundreds of dollars, while U.S. credit card records sell for 50 cents or less.” Alan Kessler, Vormetric tells us "healthcare data has become one of the most desirable commodities for sale on black market sites, yet U.S. healthcare organizations are failing to secure that data. An overreliance on compliance requirements and a cursory nod to data protection point to systemic failures that are putting patient data at risk. What's needed is for healthcare organization to realize that compliance is not enough, and to implement the controls and policies required to put the security of their data first."

Among healthcare organization respondents to their survey, 48% encountered a data breach or failed a compliance audit in the last year. 26% of healthcare respondents reported that their organization had previously experienced a data breach. 54% reported compliance requirements as the top reason for protecting sensitive data, and 68% rated compliance as very or extremely effective at stopping insider threats and data breaches.

63 percent of healthcare IT decision makers report that their organizations are planning to increase spending to offset data threats, which was the highest of any segment or region measured in the report.

When asked about the most important reasons for securing sensitive data, the top three responses from the healthcare sector were compliance (55%), implementing best practices (44%) and reputational protection (41%). In comparison to other business sectors the compliance response was 5 percentage points above other industry averages.

Provider Networks Referral Leakage

By Claire Thayer, April 16, 2015

Containing patient referrals within a provider network is easier said than done, even with electronic health records.  According to Joel French, CEO of SCI Solutions, "more than 25 percent of orders and referrals from employed providers leak out of network."  Chief Financial Officers across the country cite referral leakage as a top concern. According to a recent survey, 51% of CFOs list reducing network leakage as the most successful methods for generating future revenue growth. 

MCOL’s infoGraphoid for this week takes a look at some of the root causes of referral leakage as well as identifies seven ways to contain the leakage:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

Accenture Pegs 2015 Private Exchange Enrollment at 6 Million

By Clive Riddle, April 10, 2015

Accenture has released a new report on private exchange enrollment: Private Health Insurance Exchange Enrollment Doubled from 2014 to 2015, which pegs 2015 total private exhange enrollment at 6 million, up from 3 million in 2014.

Accenture forecasts that enrollment in private health insurance exchanges will grow to 12 million in 2016 and 22 million in 2017. They have gone on record projecting "total enrollment in private exchanges to ultimately surpass state and federally funded exchanges, reaching 40 million by 2018."

Here’s more on Accenture’s findings from their report:

• Accenture concludes that midsize employers, defined as companies with 100 to 2,500 employees, contributed most to the adoption of private health exchanges increase.
• 76 percent of consumers with employer-sponsored coverage see health insurance as a primary factor for continuing to work at their current employer
• Accenture points out that this limits some employers’ ability to drop or defund health coverage.
• Accenture postulates that for such employers, "private exchanges will emerge for some as a compelling model to reduce costs and administrative burden"
• Accenture notes that private exchange enrollment is expected to accelerate in 2017 due to looming penalties for “Cadillac” Plans.
• Accenture  also notes that market funding is growing, citing  Aetna’s bswift acquisition of bswift and Mercer’s equity investment in Benefitfocus
• Accenture further postulates that Accenture expects that "increased compliance requirements .. will drive employers to adopt new models for managing benefits administration."

New Interactive Tool to Monitor U.S. Health Care Spending

By Claire Thayer, April 8, 2015

A week or so ago, The Peterson Center on Healthcare and the Kaiser Family Foundation unveiled a cool new interactive tool for public access to measure quality and cost components of the country's health care system on their new site, The Peterson-Kaiser Health System Tracker.  “This interactive tool provides up-to-date information on U.S. health spending by federal and local governments, private companies, and individuals. It was developed by analysts at the Kaiser Family Foundation using data from the National Health Expenditure Account and will be updated annually with each data release.”  Using the Health Spending Explorer interactive tool, data can be tracked as far back as 1960, with most recent data as of 2013 (which will be updated annually).  Search by single year, compare two years, or customized you own parameters.  Here are a couple of examples, comparing all types of services and hospital spending by health insurance and out-of-pocket costs in 1993 and twenty years later in 2013.

In addition to the option to use the interactive feature to create your own reports, the “Chart Collections” section has a bunch of charts and supporting slide decks to choose from:

Drilling down to the question of “How do health expenditures vary across the population?” here are a couple of related supporting slides available for download:

In addition to the interactive tool and chart collections, The Peterson-Kaiser Health System Tracker site provides access to their Insight Briefs and regular blogs.

Healthcare Startups Capitalizing on the Sharing Economy and More

By Clive Riddle, April 1, 2015

These five healthcare lists – courtesy of healthsprocket - should be of great interest today –addressing the sharing economy; King v Burwell; upcoming M&A transactions; headlines you might have missed; and hot innovation initiatives:

Healthcare Startups Capitalizing on the Sharing Economy and More

1. Uberlance - provide on-demand ambulance services with your SUV
2. Airpital - rent out your spare rooms for hospital services
3. PatientGrades - site for doctors to rate their patients
4. TeleCrowd - crowdsourcing telemedicine - vote on patient's diagnosis & treatment
5. AirRx - Start a Mail Order Pharmacy with your unused prescriptions

Five Possible Outcomes for SCOTUS King v Burwell Decision

1. To avoid split tie decision, Scalia and Ginsberg thumb wrestle to settle matter
2. Court disallows federal funding in states using healthcare.gov, with farmer exemption allowing combined corn/healthplan subsidy
3. Court strikes down Obamacare - Congress passes emergency band-aid bill providing monthly lottery tickets and band-aids to uninsured
4. Court rules federal subsidies may continue, but not via healthcare.gov - strict interpretation requires actual physical marketplace with pop-up tents
5. Court keeps Obamacare intact - Congress authorizes funding of time travel - terminator cyborg to go back to 2010 and prevent passage of ACA

Four Upcoming Blockbuster Healthcare M&A Transactions to Watch For

1. UnitedHealthcare acquires states of Florida and Arizona to increase Medicare marketshare
2. J&J acquires actual cloud covering east coast for cloud-based pharma initiatives - relocates cloud to reduce future employee snow days
3. Company formerly known as WellPoint acquires copyright to Star Spangled Banner as part of re-branding company as "National Anthem"
4. HCA acquires Carnival Cruise Lines to create new medical tourism fleet

Important Healthcare Headlines You Might Have Missed

1. German government delays renown U.S. Clinic's expansion to Hamburg and Frankfurt - puts Mayo on hold
2. In nod to digital age, doctor offices now feature e-versions of past magazines in patient lobbies using refurbished Apple Newton tablets
3. Red Cross licenses use of name to Blue Cross Blue Shield plans wishing to re-brand insurance products in Republican states
4. Concerns mount with new obesity management procedure converting unused part of brain to second stomach
5. GAO investigation uncovers missing "M" in Centers for Medicare & Medicaid Services acronym

Hot Healthcare Innovation Initiatives

1. Implantable chip sends you text message letting you know when your knee hurts
2. McDonalds / CMS partnership pairing choice of Value Meal with each Value-Based payment
3. Exercise treadmills installed in fast food line queues
4. StubHub-like app to auction your doctor appointment time
5. Starbucks Pharmacies dispensing your daily prescription with your latte

The lists provided in Healthsprocket’s annual April 1st edition of the SprocketRocket newsletter. If you’d like to check out similar lists from previous April 1st editions, click here

Looking for the Future in the Past

By Kim Bellard, March 25, 2015

I don't get smartwatches.

Yes, I know; they're all the rage. Apple unveiled its Apple Watch earlier this month, to generally good if not entirely ecstatic reviews. Not to be outdone, Google announced a collaboration with TAG Heuer and Intel for a "Swiss Smartwatch." Samsung and Sony are close behind with their own versions.

Poor Fitbit, which held the early lead in wrist wearables, is now desperately trying to broaden its product line, including the new Surge. They must feel a little like Garmin or Nikon did when mobile phones began to incorporate GPS tracking and digital phones.

I have to wonder why the focus on the wrist. It isn't the ideal place to track, say, your heartbeat, your sleep, or your steps, and as a result fitness trackers have been faulted about their accuracy.  I'm not sure who is clamoring to add more features to a watch.

It's as if Timex and Casio, not to mention TAG Heuer, are conspiring to create a demand so that they don't go the way of Kodak.

It's not that I think they are a bad idea. If you want to wear one, more power to you, and I hope it helps you with your health goals. My problem with them is that I think they are an example of our trying to create the future by looking in the past.

Shouldn't we be developing truly new technologies and uses for them?

I can't help but think about EHRs in this context. Health care providers insisted on being subsidized for what would be normal business process improvement investments for any other industry. What we got for all the federal spending were products that physicians don't really like, that more often hinder than help with patient care, that patients rarely have access to, and that can't easily share data.

We need tools that are more collaborative, more interactive, and more proactive.

Congress is already starting to ask what it has gotten for its $35b HITECH investment, even holding hearings to demand answers. EHRs used to have bipartisan support and now have fairly bipartisan disappointment.

We don't even have an agreed upon way to figure out if providers have the same patient, much less share their data about that patient. The financial services industry solved similar customer-identification problems decades ago. They did it because it made business sense.

In theory, that kind of change will happen once we make that big move to "value-based" care, but as long as our baseline is our current level of spending, I'm skeptical. We need approaches that attempt not just to reduce increases in spending but that aim to take big chunks out of spending. There's no shortage of waste, duplication and unnecessary care that could be eliminated.

Smartwatches, EHRs, or proton beam therapy, to name a few examples, are not likely to help accomplish that.

I want to see those kinds of new technologies in health care, not a smartwatch. Technologies that help change how we think about "health" and how we treat problems with it. I challenge health care technology gurus: show us something not just that we haven't seen before; show us something we hadn't even thought of before

As Alan Kay famously said: "The best way to predict the future is to invent it."

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting