Global health care challenges need global solutions

Health Care Current | December 6, 2016

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

Global health care challenges need global solutions

By Mitch Morris, MD, Principal, US/Global Health Care Sector Leader, Deloitte Consulting LLP

In health care today, we have the potential to cure what was once incurable and fix what was once unfixable. The unraveling of the human genome and the emergence of precision medicine are opening up new avenues for targeted therapies to tackle the most challenging diseases.

But, this all comes with a high price tag.

Exciting new treatments, combined with greater administrative burdens and complexity of the health delivery system, have created unsustainable cost growth.1 And, this phenomenon isn’t unique to the US. Across the globe, organizations and governments that fund and provide care are facing the fact that the status quo will not do; fundamental changes in our approach to managing the costs of health care are required.

In the past, health systems controlled costs by optimizing supply chain and revenue cycle, managing labor costs, and improving clinical efficiency. These traditional strategies are effective at improving margins, but are not truly transformational. Forward-looking health systems, governments, and other stakeholders are taking a more critical look at ways to reinvent health care. In High-value health care: Innovative approaches to global challenges, we explore how successful initiatives use a multi-pronged approach and leverage new technologies, insights, and business models to “bend the cost curve” or slow the rate of health care cost growth. In our review of global solutions aimed at this goal, five major themes emerged.

Social determinants of health
Social needs, including housing and other environmental factors in patients’ lives, are just as important as medical care in contributing to population health.2 Many health conditions start or worsen when basic human needs – such as companionship/family, emotional well-being, shelter, nutrition, and safety – aren’t adequately met.3 One program out of Canada seeks to address social needs that significantly impact health outcomes and costs. It has shown that liaisons focusing on an individual’s needs, rather than the provision of a particular type of medical service, can be effective in averting costly hospitalizations and emergency room (ER) admissions. Addressing non-medical and medical needs and, more generally, treating patients holistically, rather than just addressing their symptoms, can result in meaningful improvements in health outcomes and potential cost reductions.

Alignment of providers’ economic incentives
Reimagining and reconfiguring economic incentives so that providers are rewarded for doing the right thing at the right time to support their patients’ health remains a critical frontier in the push toward high-value care. One health care management company out of Germany that operates a regional integrated care system contracts to manage the health of about 35,000 people. In the program, providers share the savings when costs fall below nationally determined benchmarks.4 Providers’ bonuses are aligned to health outcomes: losing weight, quitting smoking, or improving clinical measures of health are all measures that impact financial incentives.5 When provider incentives are properly aligned, the cost curve can be bent and health outcomes can be maintained – or even improved.

Patient-centered care
Patient-centered care can improve the experience for patients, their families, and their health care team members.6 In Spain, a public-private initiative shows that patient-centered care delivery, enabled by new health information technology solutions, could help improve health outcomes and lower costs.7 The regional government maintains ownership of public hospitals and health care facilities but engages a private contractor to manage and maintain primary, acute, and specialist care services in exchange for a fixed annual capitated payment. The partnership has shown that putting the patient front-and-center and bridging the traditional silos of primary, community, and hospital services, can prevent patients’ preferences and identity from being lost.

Chronic health conditions
Chronic health conditions are prevalent, expensive, and deadly. In Mexico, one organization worked to reengineer primary care delivery by providing mobile health tools, building clinician capacity, and training clinicians to improve chronic disease management by applying technological innovations that better engage patients and health care professionals.8 By taking health care to where the patients are, rather than requiring patients to seek-out services themselves, this initiative has reported improvements in patient self-management, clinician disease management, and informed clinical decision-making.

Improving adherence
The cost of non-adherence, or failing to follow prescription regimens, is estimated to reach $300 billion annually in the US and nearly $500 billion worldwide. Innovative solutions are essential to countering the avoidable adverse health outcomes that drive-up health spending. Combining drugs commonly prescribed together in a single “polypill” has been shown to help patients adhere to their prescribed treatment regimens. A recent study showed that in the United Kingdom, combining three cardiovascular drugs into a single pill could improve adherence approximately 20 percent over 10 years, thereby preventing 15 percent of cardiovascular events per 1,000 patients, compared to patients taking each drug individually. Economic analysis showed that the drug could be affordably priced at up to GPB £12 per month.9

Globally, many companies are experimenting with innovative ways to “bend the cost curve.” Innovation from these organizations could inspire local initiatives by other health care providers, health plans, and governments. However, strong leadership and stakeholder support is essential to making an initiative work. Models that take a multi-pronged, technology-enabled approach may be most likely to yield success, since today’s health challenges are complex and interrelated.

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1 D. Squires and C. Anderson, US Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Countries, The Commonwealth Fund, October 2015.
2 Harry J. Heiman and Samantha Artiga, “Beyond health care: The role of social determinants in promoting health and health equity,” Kaiser Family Foundation Issue Brief, November 2015.
3 Thierry Lang et al., “Social determinants of cardiovascular diseases,” Public Health Reviews, 33, no. 2 (2011); Jacqueline Hill, Marcia Nielsen, and Michael Fox, “Understanding the social factors that contribute to diabetes: a means to informing health care and social policies for the chronically ill” The Permanente Journal, 17, no. 2 (2013), DOI:10.7812/TPP/12-099; Alvaro Cruz, E. D. Bateman, and Jean Bousquet, “The social determinants of asthma, European Respiratory Journal 35, no. 2 (2010), DOI: 10.1183/09031936.00070309; David Williams, Michelle Sternthal, and Rosalind Wright, ““Social determinants: taking the social context of asthma seriously,” Pediatrics 123, supp. 3 (2009), DOI: 10.1542/peds.2008-2233H.
4 H. Hildebrandt, et al., “Gesundes Kinzigtal integrated care: improving population health by a shared health gain approach and a shared savings contract,” International Journal of Integrated Care 10, no. 2 (2010), DOI:10.5334/ijic.539.
5 Ibid.
6 Mark Smith, Robert Saunders, Leigh Stuckhardt, and J. Michael McGinnis, editors, Best Care at Lower Cost: The Path to Continuously Learning Health Care in America, Institute of Medicine (Washington, DC: National Academies Press, 2013); Patrick A. Charmel and Susan B. Frampton, "Building the business case for patient-centered care," Healthcare Financial Management, March 2008.
7 Klea D. Bertakis and Rahman Azari, “Patient-centered care is associated with decreased health care utilization,” Journal of the American Board of Family Medicine 24, no. 3, p. 229-239, DOI: 10.3122/jabfm.2011.03.100170; Moira Stewart, et al., “The impact of patient-centered care on outcomes,” Journal of Family Practice 49, no. 9.
8 Roberto Tapia-Conyer, Héctor Gallardo-Rincón and Rodrigo Saucedo-Martinez, “CASALUD: an innovative health-care system to control and prevent non-communicable diseases in Mexico,” Perspectives in Public Health 135, no. 4 (2013), p. 180-90, DOI:10.1177/1757913913511423.
9 Virginia Becerra et al., “Cost-effectiveness and public health benefit of secondary cardiovascular disease prevention from improved adherence using a polypill in the UK,” BMJ Open 2015, no. 5, doi:10.1136/bmjopen-2014-007111.

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Implementation & Adoption

President-elect Trump announces picks for HHS Secretary and CMS Administrator

Last week, President-elect Donald Trump announced that he intends to nominate Rep. Tom Price, current House Budget Chairman, as Secretary of the US Department of Health and Human Services (HHS) and health policy consultant, Seema Verma, as Administrator at the US Centers for Medicare and Medicaid Services (CMS). Each would bring a unique background of health care experience to the administration.

Background on Representative Price: An orthopedic surgeon, Dr. Price has represented Georgia’s 6th congressional district since 2005. In alignment with President-elect Trump’s health care platform (see the November 10, 2016 Health Care Current), Dr. Price has expressed support for the repeal of the Affordable Care Act (ACA). In 2014, he introduced H.R.2300, the Empowering Patients First Act (EPFA), legislation that would have fully repealed the ACA and all health care related provisions from the Health Care and Education Reconciliation Act, which Congress passed shortly after the ACA, and instituted several provisions intended to replace the law.

Key provisions of the EPFA included:

  • Create tax incentives for maintaining health care coverage, including refundable, age adjusted tax credits for people on the individual market
  • Allow individuals to opt out of TRICARE, Medicare, Medicaid, or Veterans Affairs benefits to receive a tax credit to purchase a private health plan instead
  • Encourage greater use of health savings accounts (HSAs) by increasing the allowable contribution to HSAs to equal the maximum contribution allowed for individual retirement arrangements (IRAs)
  • Limit the tax exempt status of employer contributions toward insurance to $20,000 for families and $8,000 for an individual
  • Create grants of up to $1,500 for small businesses to offset the cost of providing coverage options to their employees

The EPFA also included provisions aimed at increasing health care access and availability. Dr. Price proposed subsidizing state-based high-risk beneficiary pools (or other risk adjustment mechanisms such as a reinsurance pool) through federal grants, including a supplemental $1 billion in available grant funding. The EPFA also would have established Independent Health Pools (IHPs) – non-profit entities to expand coverage in the individual market. Also in alignment with the President-elect’s positions, Dr. Price proposed allowing health plans to sell products across state lines.

Background on Seema Verma: Most recently, Ms. Verma helped develop the Healthy Indiana Plan (HIP) 2.0, Indiana’s Medicaid alternative expansion program. During Vice President-elect Mike Pence’s tenure as Governor of Indiana, the state piloted the HIP plan through a series of innovation waivers. The HIP 2.0 covers all non-disabled adults with incomes below 138 percent of the federal poverty level (FPL).

The HIP 2.0 program uses a consumer-directed design, which closely resembles that of employer-sponsored insurance (ESI) or other commercial coverage. HIP 2.0 is designed to encourage individuals to transition from Medicaid into a private health plan as a beneficiary’s circumstances change. This is partly to reduce the amount of churn in the Medicaid program among the non-disabled population.

The HIP 2.0 aims to increase beneficiary engagement in their own care. HIP beneficiaries must compare costs and quality, maintain continuous enrollment, and make cost-conscious health care decisions. Medicaid enrollees have a high deductible health plan (the deductible is currently set at $2,500) and an HSA account called a “POWER” account that starts at $2,500. To maintain their enrollment, beneficiaries must contribute two percent of their income to a savings account, and those funds are returned to them when they leave the program. Members may use POWER account funds to pay for services until they hit their deductible. If confirmed, Verma would run CMS, which oversees Medicare and the Children’s Health Insurance Program (CHIP) in addition to Medicaid, and many policy experts have said she would be likely to support adding consumer-directed models into other public programs.



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Fewer families struggling to pay medical bills

The percentage of people under age 65 who had trouble paying medical bills decreased from 21.3 percent in 2011 to 16.2 percent in the first half of 2016, according to findings from the National Health Interview Survey (NHIS). The uninsured continue to have more problems paying medical bills than people with private insurance coverage.

People with lower incomes were more likely to have problems paying medical bills. The percentage of people in families below the poverty level having problems paying medical bills decreased from 32.1 percent in 2011 to 23.0 percent in 2016. Those who were below or near the poverty level were more than twice as likely as those who were not poor to be in families having problems paying medical bills.

Related: Deloitte’s 2016 Survey of Health Care Consumers asked consumers about their health care costs and found that one-third of exchange consumers said they felt prepared to handle future health care costs, compared with 16 percent in 2015. While this was a significant improvement, it was still lower than consumers with employer-based, Medicare, and Medicaid coverage. Overall, 74 percent of health care consumers said they had no financial difficulty paying medical bills in the last 12 months.

(Source: Cohen and Zammitti, “Problems paying medical bills among persons under age 65,” National Center for Health Statistics, 2016)

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CMS proposes quality measures for value-based reporting programs

CMS published the final Measures under Consideration List for the 2018 performance period for Medicare quality and value-based programs, including the Medicare Shared Savings Program, the Hospital Readmissions Reduction Program (HRRP) and the Merit-based Incentive Payment System (MIPS) under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

The list includes 97 measures; 35 measures are for MIPS. More than one-third (39 percent) of all of the measures are outcome measures. The clinicians that participate in MIPS will be able to report on these measures, in addition to others, starting in 2018 if they are approved.

CMS is requesting public and stakeholder comment on the adequacy and scope of the proposed measures. According to CMS, the list is larger than what will ultimately be adopted for optional or mandatory reporting programs in Medicare. Following public comment and stakeholder input, the list of potential quality measures will go to the National Quality Forum for consideration. The measures selected will be adopted through Medicare rulemaking. CMS says that the agency is committed to aligning measures across programs to reduce redundancies and promote interoperability, while still including sufficient measures to allow multi-specialty providers to participate.

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On the Hill & In the Courts

House passes 21st Century Cures Act

Last week, the House of Representatives passed (392-26) H.R. 34, the 21st Century Cures Act. Originally introduced in 2014, the package includes provisions on mental health reform, US Food and Drug Administration (FDA) approval pathways, and biomedical innovation funding.

Key provisions addressed in the act include:


The bill also includes other provisions related to health care and health care services. For instance, it delays for three years the ability for CMS to terminate contracts with Medicare Advantage plans with low quality ratings and requires the Secretary of HHS to establish a risk adjustment methodology for measuring socioeconomic status under the HRRP.

21st Century Cures has broad industry, advocate, and stakeholder support, but some concerns remain. Some advocates say that the act does not go far enough in addressing prescription drug prices. Others say that the act’s funding is not stable since it is not mandatory so would have to be re-appropriated every year. The Senate is expected to vote on the measure this week.

(Source: House Energy & Commerce Committee, Section by Section Summary; Text of House Amendment to the Senate Amendment to H.R. 34, Tsunami Warning, Education, and Research Act of 2015 or 21st Century Cures Act)

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2015 risk corridor payments to go toward 2014 obligations

CMS recently confirmed that it will use 2015 risk corridor collections to cover the remaining 2014 program obligations. In 2014, risk corridor claims totaled $2.87 billion. However, HHS only paid out $352 million to health plans (12.6 percent). CMS will use all 2015 funds to pay the remaining balance due to health plans for 2014 (See the September 20, 2016 Health Care Current).

CMS released information on risk corridor payments and charges by state and health plan and notified plans of any adjustment to the amount the plans had calculated. The adjustment will apply to health plans that reported cost-sharing reduction (CSR) estimates that were lower than the actual CSRs they provided in 2014.

Payments for the 2014 risk corridor year will begin in this month. Risk corridor payments are allocated proportionally based on the collections received. Collection of the 2015 risk corridor charges began in November 2016.

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Around the Country

Blog: Vermont all-payer ACO could be a model for Advanced APMs under MACRA

Members of the Green Mountain Care Board, Vermont’s quasi-judicial, independent body responsible for health care regulation and reform in the state, recently wrote a blog in Health Affairs outlining the state’s new all-payer accountable care organization (ACO) and explaining how it will reduce costs and improve quality of care.

Vermont is transforming how the state delivers and pays for health care. The all-payer ACO aims to move all payers (Medicare, Medicaid, and commercial) towards a prospective, value-based reimbursement system to change provider incentives and reward quality. Vermont has pledged to hold health care expenditures at 3.5 percent in aggregate across the performance period (2017-2022) and to limit Medicare cost growth to 0.001-0.002 percentage points below the projected national average. Vermont also outlined three population health goals: increase access to primary care, lower deaths from suicide and drug overdose, and reduce chronic disease incidence. To achieve these targets, the state will eventually enroll 70 percent of the state, including 90 percent of all Medicare beneficiaries in the state, into an ACO by the end of 2022.

In the long-term, Vermont expects providers to find it an attractive model. For one, participation in the model is voluntary. Moreover, if approved, the model could be an advanced APM under MACRA. While the all-payer ACO is customized to Vermont, the authors say the model will help CMS achieve its goal to link 50 percent of Medicare payments to alternative payment models (APMs) by 2018.

Vermont says the success of the model depends on its ability to set reasonable and predictable payment rates, reduce administrative burden, increase support for chronic care management, integrate services, provide actionable data analytics, encourage best practices and evidence-based medicine, and create a strong and attractive primary care model.

The agreement follows nearly two years of discussion and negotiation between the state and federal government. The state was granted a five-year extension of its section 1115(a) Medicaid demonstration to make Medicaid a full partner in the Vermont All-Payer ACO Model.

(Source: Ena Backus, Al Gobeille, Cornelius Hogan, Jessica Holmes, and Betty Rambur, “The All-Payer Accountable Care Organization Model: An Opportunity For Vermont And An Exemplar For The Nation, “ Health Affairs, November 2016)

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Breaking Boundaries

Genome-editing technology CRISPR/Cas9 moves forward with start of human trials

Earlier this fall, the NIH Recombinant DNA Advisory Committee approved the first human trials of the genome-editing technology CRISPR/Cas9 for creating genetically-altered immune cells to attack certain types of cancer. In late October, scientists in China began the first human trials using this technique.

The team at the West China Hospital in Chengdu extracted immune cells from a patient with aggressive lung cancer and then edited them using CRISPR/Cas9 before injecting them back into the patient. The technique knocks out a gene that typically serves as a check on the cell's ability to launch an immune response and prevents it from attacking healthy cells. The modified cells were then multiplied and re-introduced into the patient's bloodstream. The team hopes these cells will wipe out the cancer. The trial plans to treat 10 patients, and its main purpose is to test safety. The team will release more details as the trial progresses, as researchers around the world will likely be watching closely to learn more about CRISPR’s potential to treat cancer.

CRISPR stands for Clustered Regularly-Interspaced Short Palindromic Repeats. CRISPRs are part of the bacterial immune system, and they defend against invading viruses. They consist of repeating sequences of genetic code interrupted by “spacer” sequences – remnants of genetic code from past invaders. The system helps the cell detect and destroy invaders when they return. Cas9 is one of the enzymes produced by the CRISPR system that binds to the DNA and snips it, shutting the targeted gene off. Scientists believe that if we can go into the genetic mutations that cause disease and change these mutations to the normal sequence, the technology could potentially cure disease. Other gene-editing techniques exist, but they are slow, imprecise, and very difficult.

A team in the US is also planning a human trial in early 2017 to target myeloma, sarcoma, and melanoma. In Beijing, a team is planning to launch trials targeting bladder, prostate, and renal-cell cancers in the spring. Many are comparing the race to figure out how to use CRISPR-editing techniques to treat cancer to the race to land a team on the moon.

Analysis: Potential applications for CRISPR range from curing different diseases to growing organs that could be used in transplants to possibly preventing genetic diseases in embryos. While not in the stage of human trials yet, US researchers also had a recent breakthrough using CRISPR to cure blindness in rats. The study, published in the journal Nature, shows that rats engineered to have a genetic form of blindness called retinitis pigmentosa could be treated using CRISPR gene therapy.

While many in the scientific community are citing CRISPR/Cas9 as one of the biggest breakthroughs in modern medicine, many researchers are proceeding with caution. One concern is that CRISPR could snip other genes and potentially create new cancer genes or trigger existing ones. The pioneering teams will likely be carefully measuring the growth rate of the engineered cells and testing for genomic abnormalities. Another concern is that the technique could activate the body’s immune response. For these reasons, leaders in the field are cautioning that the scientific community must proceed carefully to ensure the benefits outweigh the risks from potential misuse and unforeseen consequences.

(Sources: David Cyranoski, “CRISPR gene-editing tested in a person for the first time,” Nature, November 15, 2016; Keiichiro Suzuki et al, “In vivo genome editing via CRISPR/Cas9 mediated homology-independent targeted integration, Nature, November 16, 2016; Broad Institute, “What is CRISPR?” 2016)

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