Health Care Current: April 28 2015 | Deloitte US | Center for Health Solutions | Life Sciences has been added to your bookmarks.
Health Care Current: April 28, 2015
What if health care wasn’t the way it is?
This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory and legislative changes.
- My Take
- Implementation & Adoption
- On the Hill & In the Courts
- Around the Country
- Breaking Boundaries
What if health care wasn’t the way it is?
“And that’s the way it is.” This famous signoff from renowned newscaster Walter Cronkite marked the end of the CBS Evening News broadcast every night for nearly 20 years. Some may argue this same expression could be affixed to the end of many statements about health care. It’s too expensive…It’s not coordinated enough…Too many tests are ordered for those who don’t need them while not enough preventive care is provided to those who really need it…And that’s the way health care is.
But, what if that wasn’t the way it is?
So far this year, health care has been humming—if not spinning—from announcements, collaborations and legislative and regulatory changes. The goal of each is basically the same: slow health care cost growth and improve health outcomes and patient experience through value-based care.
It’s important to remember what’s at stake here. If value-based care succeeds, it could impact more than just the health care system. Federal and state governments may spend less on public health programs like Medicare and Medicaid. Health care coverage might also be more affordable for employers. And ideally, slower growth in health care costs could also allow employers to raise their employees’ salaries.
If done right, I think value-based care also has the potential to improve the way people interact with the health care system and providers in several ways.
Better patient experience: The new payment schemes involve measuring and rewarding providers for their performance on patient experience. Patient experience reflects many specific attributes of care, including access, communication, amenities and outcomes. Patients may gain more control of their chronic conditions and go to the hospital less often. And when they do go to the hospital, they may avoid hospital infections or errors.
Better care coordination: As information flows between physicians and facilities, fewer patients may need to have tests redone or bring their x-ray results from one consultation to another. If medications and tests aren’t missed or duplicated, providers also know who they are responsible for and the network is able to track who did what to whom and how well in order to reward or penalize people appropriately. This may also incentivize providers to partner with other high-quality providers who can share data effectively.
New dynamics between physicians and patients: Physicians may challenge patients to adhere better to medical advice and to be more active partners in managing their conditions. One outcome of this could be that patients better understand their conditions and the implications of diet and exercise. As we point out in a recent Deloitte Review article, Rising consumerism: Winning the hearts and minds of health care consumers, “upcoming generations may well be expected to approach health care just as they do other services and to seek to curate their own experiences.” There may be market opportunities for the next generation of transparency tools to support consumers choosing among providers and better understanding treatments. But, for people who like physicians to tell them what to do, this shift in expectations may be challenging.
While there is a lot of focus on the potential that value-based care holds, it doesn’t mean that we as patients and consumers should shy away from asking critical questions of this plan for the future of health care. I’ve been asked many questions by friends and colleagues who sit outside of my health care circle. One that resonates with me most often is, “Does this mean we are going back to the days before physicians and individuals rebelled against strict gatekeeping, denials and preauthorization requirements in managed care? And even worse, is this the rationing that some have expected to come out of the Affordable Care Act (ACA)?”
Value-based care does not necessarily mean that consumers will have less choice of providers. Under the Medicare Shared Savings Program, for example, consumers can go to any provider they wish. That said, an organization that is successful in delivering on integration and coordination might focus specialist referrals to the physicians and other providers who have the best results.
Another question I commonly hear is, “Could value-based care turn back the hands of time on high cost sharing, which consumers are telling us makes health care so expensive?” Supporters argue that shifting more costs to the consumer saves money, and consumers’ response – cutting back on care – also means lower spending. And, while consumers faced with high out-of-pocket health care expenses may react with poor medication adherence, there are also strategies to prevent that. One strategy some plans and health systems may employ is to offer lower cost-sharing for high-value interventions coupled with disease management. Such programs could lead to better outcomes and reduced use of costly services.
Ultimately, I see more upside than downside for patients in the future value-based care world. Society and individuals may benefit from better, safer and more affordable care. Patients may also get more involved in their care in a way that leads to better health. In the end, we may be able to look back on the current system and say, “That’s the way health care was.”
By Sarah Thomas, Research Director, Deloitte Center for Health Solutions, Deloitte Services LP
Study: HITECH helped promote EHR use; barriers remain
A qualitative review of health information technology (IT) stakeholder perspectives found that the Health Information Technology for Economic and Clinical Health (HITECH) Act promoted interest in the field of health IT and the use of electronic health records (EHRs). However, barriers related to usability, interoperability and fee-for-service (FFS) payments have limited “triple aim” outcomes. The study, published in the Journal of American Medical Informatics Association, relied on 47 interviews with health policy, federal government, health plan, provider, and vendor and health IT stakeholders. Participants offered three broad recommendations to improve health IT:
Related: The Office of the National Coordinator for Health Information Technology (ONC) published a brief that highlights progress in health information exchange and interoperability among US hospitals since 2008. Roughly 76 percent of hospitals exchanged health information electronically with other hospitals or ambulatory care providers outside their organization in 2014 – a 23 percent increase from 2013. Additionally, 47 states reported that most hospitals (60 percent or more) in their state were electronically exchanging clinical data with other providers. In the past, exchange had been limited to laboratory results and radiology reports, but now medication history and clinical care summaries are more frequently exchanged.
(Source: Bates, David W., Sood, Harpreet Sood S., Sheikh, Aziz, “Leveraging Health Information Technology to Achieve the ‘Triple Aim’ of Healthcare Reform,” April 15, 2015; Swian, Matthew, Charles, Dustin, Patel, Vaishali, Searcy, Talisha, Health Information Exchange among US Non-federal Acute Care Hospitals: 2008-2014, April 2015 )
Implementation & Adoption
Future of dual eligible demonstrations questioned due to low enrollment
In an April 16 webinar discussion between health plan executives and state officials, the speakers raised questions about the future of the federal demonstration program for dual eligibles – individuals enrolled in both Medicare and Medicaid. Health plan leaders on the webinar noted that they have not yet met federal targets for cost savings. They attribute this mainly to lagging participation. Beneficiary enrollment in the program is optional, and many dual eligibles have opted out of the program.
The federal demonstration program, called the Financial Alignment Initiative, operates in 11 different states. The total population potentially eligible to participate is 1.7 million, but only about 343,000 dual eligibles have signed up. Most states are relying on managed care plans to provide care for duals; plans receive capitated payments for both Medicaid and Medicare. In turn, health plans are responsible for covering all Medicare and Medicaid services, including long-term care and home- and community-based services. CMS stated in January that it remains too early to evaluate the success of these programs and that it expects to release reports on the demonstrations in Washington and Massachusetts in the first half of 2016.
Background: The 9 million dual eligibles make up only 13 percent of the total Medicaid and Medicare population but account for 40 percent of all Medicaid spending and 27 percent of Medicare spending. This disproportionate share of costs was part of the motivation behind CMS working with state governments and health plans to explore whether new financing and delivery strategies would lead to better outcomes. Enrollees are not locked into plans and face no open enrollment period restrictions. Most of them have low incomes and are more likely to have special health needs. They also may have relationships with physicians and other providers who may not be part of traditional managed care plan networks.
(Source: Virgil Dickson, Modern Healthcare, “Future of dual-eligible demonstrations questioned due to low enrollment,” April 21, 2015)
Study: Pioneer ACOs saved $116 annually per beneficiary
A recent analysis in the New England Journal of Medicine found that the 32 original Medicare accountable care organizations (ACOs) participating in the Pioneer program met some of their quality and cost goals during their first year. The study included results from the 13 ACOs that dropped out of the Pioneer program by late 2014. Researchers compared cost and quality results for two groups of beneficiaries. Those assigned to ACOs were compared with a control group of individuals who received care at other organizations before the Pioneer program contract period began and after the first year. They found that ACOs spent less without negatively impacting quality, and in some areas, there may have been slight improvements in quality:
Analysis: The significant drop out rate for this program has caused some analysts to call into question its future. The results of this study indicate that the 13 ACOs that dropped out of the program saved money, even though CMS’s analysis did not find this. In order to attract more organizations, the program may need to create better rewards for reducing spending. The findings also called into question how benchmarks are calculated. Organizations that start the program with more efficient operations may have more trouble improving their performance than less efficient organizations.
(Source: J. Michael McWilliams, Michael E. Chernew, Bruce E. Landon, and Aaron L. Schwartz, “Performance Differences in Year 1 of Pioneer Accountable Care Organizations,” New England Journal of Medicine, April 15, 2015)
EEOC releases proposed rule on wellness programs
Workplace wellness programs have become an estimated $6 billion industry in the US. But as employer interest in these programs intensifies, regulators are increasingly eying the programs to ensure they remain compliant with Americans with Disabilities Act (ADA), Health Insurance Portability and Accountability Act of 1996 (HIPAA) and (ACA) requirements.
The latest proposed rule from the Equal Employment Opportunity Commission (EEOC) addresses the potential for discrimination in employers’ use of the data from wellness programs. Currently, regulations address three types of wellness programs: participatory (e.g., reduced fees for gym membership), activity-only health contingent (i.e., employees are required only to complete an activity to qualify for a reward) and outcome-based health contingent wellness programs (where employees must both participate in the program and achieve certain outcomes to qualify for an award).
The proposed rule differentiates between wellness programs and other programs and defines what it means for an employee health program to be voluntary. It also describes how ADA rules around keeping medical information confidential apply to medical information obtained as part of voluntary employee health programs. If a health program is considered a wellness program that is part of a group health plan, an employer would need to provide a notice clearly explaining what medical information will be obtained, how it will be used, who will receive it and the restrictions on disclosure.
Background: HIPAA and the ACA require health contingent wellness programs to meet five standards:
Reaction: The National Business Group on Health – a nonprofit organization that represents the interests of large employers – applauded the EEOC for publishing the proposed rule, saying that the “proposed rule is welcome news for employers, who can now breathe a sigh of relief.” They continued, saying that “the EEOC has lifted a cloud of uncertainty that has been hovering over employer-sponsored wellness programs since the EEOC's legal actions last year.” The group was referencing the EEOC’s suit against Honeywell International Inc. The EEOC sued the company over its wellness program that required employees to submit medical testing or be faced with a $4,000 penalty.
On the Hill & In the Courts
CMS to increase payments to inpatient rehabilitation facilities by 1.7 percent
In a proposed rule released on April 23, CMS announced plans to increase Medicare’s payment rates for inpatient rehabilitation services by 1.7 percent in fiscal year 2016. The estimated overall increase would be $130 million in payments to the more than 1,100 inpatient rehab facilities across the country. This raise is smaller than the 2.4 percent increase CMS gave the previous year.
CMS also proposed to publish facility performance reports beginning in late 2016. The agency aims to tie a portion of payment to reporting on several new quality measures, such as tracking the rate of patients with functional status assessments and care plans or with falls causing serious injuries. Long-term care facilities, skilled nursing facilities and home health providers are also required to report on these measures.
Medicare Advantage Quality Bonus Payment demonstration helped health plans with quality improvement efforts
The Medicare Advantage (MA) Quality Bonus Payment (QBP) demonstration may have encouraged MA plans to step up their quality improvement activities before ACA policies were fully enacted. This is according to results from an initial assessment of the QBP program, which included case studies from six MA organizations that participated in the program.
The Five-Star Quality Rating System was created in 2008 to help monitor health plans’ quality and performance in MA contracts. The rating system is part of CMS’s larger efforts to build quality and value into payments for Medicare services. As part of the ACA, CMS began paying bonuses to all health plans that earned 4 or 5 stars in the star ratings program. To help MA plans phase in quality improvement programs, CMS created the QBP demonstration. From 2012 to 2014, under the demonstration, CMS provided bonus payments to health plans that achieved 3 stars.
The interim report released last week included results from a survey of MA organizations, case studies and analysis of CMS administrative data. Some of the highlights include:
- The MA organizations in the case studies indicated that the program helped them improve their star ratings.
- The program helped the leadership of the MA organizations build their business case for quality improvement.
- Most of the organizations indicated they were increasingly using data analytics to support quality improvement efforts.
- While the demonstration increased organizations’ efforts around quality improvement, most indicated they did not plan on cutting back these efforts when the demonstration ended.
L&M Policy Research will synthesize its findings in a final report, expected out this summer.
(Source: L&M Policy Research LLC, “Evaluation of the Medicare Advantage Quality Bonus Payment Demonstration,” 2015)
CMS: Growth in participation in PQRS and e-prescribing programs continues
Last week, CMS released a report that highlighted the growth in participation rates of two reporting programs, the Physician Quality Reporting System (PQRS) and Electronic Prescribing (e-prescribing) Incentive Program. From 2012 to 2013, 47 percent more eligible professionals participated in the PQRS program. By 2013, more than half of the 1.25 million possible eligible professionals were participating in the program, and payments to those professionals totaled more than $214 million.
In 2013, the e-prescribing program also grew rapidly. More than 344,000 eligible professionals participated in the program, 9 percent more than in 2012. Payments to eligible professionals reached more than $168 million that year.
Background: As part of the recent Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) of 2015, the PQRS program will be consolidated into the new Merit-Based Incentive Payment (MIPS) system. MIPS will assess eligible professionals on quality, resource use, EHR Meaningful Use (MU) and clinical practice improvement activities. The program will be based on the PQRS program as well as the MU and Value-Based Payment Modifier programs. For more information, see the April 21, 2015 Health Care Current.
MassHealth payments to be restructured to focus on care coordination, cost and quality
Massachusetts officials are restructuring the state’s Medicaid program according to a press release issued by the state’s Executive Office of Health and Human Services earlier this month. With this shift away from FFS, the state aims to rein in spending and improve care quality. The administration has made several adjustments to its key staff:
The program is hoping to improve efficiency by better coordinating and integrating behavioral health services with physical health care and by coordinating long-term care services in nursing homes and in the community.
Analysis: A common challenge in state health care agencies is that employees often work in siloes. This can result in an agency having one or two experts on specific topics while other personnel have only cursory knowledge. States may want to consider making organizational improvements as their workforce turns over and institutional knowledge leaves with retiring employees. This may include enhancements to their training programs, especially around leadership, management and analytics. As states increasingly shift their Medicaid populations into managed care programs, they will likely rely on outsourced contracts and audit vendors. As a result, state employees will likely need skills to interpret data and results to help manage vendor performance.
Around the Country
Low-income marketplace enrollees switching to Medicaid less than expected
Results from a Modern Healthcare review of available data and insights suggest that the frequency of switching from health insurance marketplace coverage to Medicaid because of income changes is less common than many had anticipated. Many expected that income fluctuations, changes in employment status and reductions in hours worked per week would cause many lower-income individuals to switch back and forth between Medicaid and private coverage—also called churning. However, preliminary data reported by state marketplaces found little evidence of this. In the state with the highest switching rate, 13 percent of people in marketplace plans switched to Medicaid. The review found that five states of those with available data showed low rates of switching:
The authors compared these rates with a Health Affairs estimate published in 2011 that predicted that more than 35 percent of adults with incomes below 200 percent of the federal poverty level ($23,540 for an individual) would shift between marketplace plans and Medicaid in the first six months. It also projected that this rate would increase to 50 percent after the first year.
Switching because of eligibility changes can disrupt people’s coverage and expose them to different cost sharing rules. People who have to switch also may not be able to see the same physicians if the Medicaid and marketplace plans they enroll in have different networks. Insurers are attempting to help avoid this problem by offering both Medicaid and marketplace plans.
(Source: Dickson, Virgil, Modern Healthcare, “Income-based ‘churn’ in coverage less common than feared,” April 22, 2015)
Researchers use social media data to predict emergency room trends
Researchers at the University of Arizona have combined Twitter posts with air quality and hospital data into a model that predicts emergency room trends for asthma better than existing disease surveillance models. The research team combed through Twitter to look for 19 keywords, including “asthma attack” and “inhaler” for a three month period in 2013, and excluded tweets that did not pertain to asthma. They then compared the Twitter post trends to air quality data from the Environmental Protection Agency combined with emergency department data from a hospital in Dallas. They found a correlation between tweets about asthma, changes in air quality and asthma-related emergency room visits.
The researchers found that people tend to tweet about asthma symptoms, and parents were tweeting about getting calls from school reporting that their child was having breathing problems. Twenty-five million Americans have asthma and there are 2 million asthma-related emergency room visits in the US each year. An ongoing challenge for hospitals is predicting how many people with chronic conditions will come to the emergency room on any given day. This prediction model uses data to help make those predictions and can anticipate emergency room visits with 70 percent precision.
The University of Arizona researchers plan to continue their study by expanding the use of their model to help hospitals prepare staffing and equipment for fluctuations in emergency room visits.
Related: Health care organizations are becoming more interested in using non-traditional, non-medical data, including purchasing data, medical claims, social media and web trending data, to help map courses of treatment for vulnerable populations before they become ill. The shift to value-based care has created financial incentives to improve health outcomes and reduce total cost of care and has also spurred interest in analytics that have the potential to eliminate service redundancies and predict health risk.
Deloitte’s “Future of health care” video gives viewers a glimpse into a future where technology streamlines the health care experience for consumers, practitioners, hospitals, pharmacies and other stakeholders by placing pertinent health data at their fingertips in real time. The adoption of EHRs, mobile devices and analytics platforms creates the avenue through which data and information can connect stakeholders across the care continuum. This video shows what health care could look like once the industry widely adopts technologies like EHRs and mobile health and fully leverages analytics for decision-making and care coordination.
Major retailers are continually learning as much as they can about their customers in order to promote specific products, but the health care industry has lagged behind other industries in their use of data mining and predictive analytics as a mechanism to improve population health and deliver preventive care.
Consumers have concerns about wide dissemination of individuals’ medical history and lifestyle preferences, however. Health-related information is personal, and the idea that anyone can collect it easily and at any time, for purposes that often aren’t well-explained, can be worrisome.
If the industry is to meet rising demand for more effective health care services, develop innovative products and treatments and achieve significant cost savings, using lifestyle and behavioral data and analytics is likely part of the answer.