Health Care Current: February 10, 2015

Four actions to put health care on a path toward system-wide interoperability

This weekly series explores breaking news and developments in the U.S. health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory and legislative changes.

Four actions to put health care on a path toward system-wide interoperability

Last year, I wrote about my sister-in-law Patricia who was pregnant with her first child and wondering how she could track health information for both her and her newborn. With this simple request, she was exposed to the state of interoperability in the health care industry.

She could not access her doctor’s electronic health record (EHR) through her personal health record, nor could she communicate electronically with her prospective pediatrician. At the time, it was a small concern, but that quickly changed after she delivered. Her newborn’s breathing problems prompted an extended stay in the NICU, multiple diagnostic procedures, consultations by numerous specialists and use of a host of monitoring devices in the hospital and following discharge.

Suddenly the challenge of interoperability was very real for her.

Many in the health care industry (and providers in particular) have long been frustrated by the lack of interoperability among health systems and IT vendors, medical devices and financial systems. Earlier this month, the Office of the National Coordinator for Health IT (ONC) took a step toward advancing interoperability by publishing the initial draft of “Connecting Health and Care for the Nation: A Shared Nationwide Interoperability Roadmap.”

The draft calls for ONC to ensure that four important actions are completed in the short term:

  • Establishing a governance framework for interoperability that includes “overarching rules of the road” and involves a public/private process for implementation
  • Improving standards and guidance so they are “scalable, high performing and simple”
  • Using policy and funding levers to create incentives to use common technical standards to share health information technology
  • Protecting privacy and security while helping health care organizations understand and abide by Health Insurance Portability and Accountability Act (HIPAA) rules1

Some items within the roadmap are particularly notable. This roadmap is the first detailed vision the federal government has provided to the industry of a path toward system-wide interoperability. The ONC has received criticism inside and outside the beltway for not taking a stronger stance on interoperability earlier in the Meaningful Use program.

The draft also outlines how health plans can help advance interoperability. As organizations move from a volume- to value-based reimbursement model that needs to rely on population health management to a greater extent, connecting clinical and financial data will be essential. As an example, health plans with a focus on value-based care could make interoperability a condition of participation for providers seeking to partner with them in new payment arrangements.

This roadmap also identifies where the current issues lie and what may need to happen to allow the industry to get there. The “Standards Advisory,” which ONC is now soliciting public comments on, provides some of those details. This model will allow the industry to identify where stakeholders agree and disagree on standards and encourages an open dialogue on how to reach consensus on the points of disagreement.

While the roadmap provides a number of answers, it also raises a number of questions:

  • How will medical devices fit in? This roadmap focuses primarily on EHRs, but some providers struggle to integrate data from a wide range of devices. Integrating medical devices is very costly for health systems but can also impact patient safety.
  • What will be the future of health information exchanges (HIEs)? This perennial question around the purpose and sustainability model of HIEs becomes more acute as one of their primary functions – combining data in one place – may be rendered unnecessary by systems that speak with each other seamlessly.
  • Will EHR vendors have to change their systems or even their business models? The value of many lies in the comprehensiveness and integration of their various modules. How will free flow of data across vendors impact this competitive edge? Will interoperability become an opportunity for smaller players and will it help foster innovation generally?
  • How will the roadmap be enforced? Who will enforce agreed upon standards? How will we know when interoperability has been achieved? Simply certifying technology against criteria is not the same as certifying that something actually works. Health care may draw on experiences from other industries that have adopted centralized labs to test products in a real-world environment to measure this. 
  • What will be the broader impact on the health care ecosystem? Information flow is not just about solving technical issues of interoperability, but also touches on complex regulatory, privacy and commercial factors.

Thankfully, Patricia’s son made a complete recovery and is thriving today. The ONC has declared a goal of 2017 to achieve significant progress, so hopefully by the time he is ready to go to pre-school, many of these issues will have been resolved.

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Sources: 1ONC, “Connecting Health and Care for the Nation: A Shared Nationwide Interoperability Roadmap,” January 2015,

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My Take

By Harry Greenspun, M.D., Director, Deloitte Center for Health Solutions, Deloitte LLP


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Obama administration requests $83.8 billion for HHS FY2016 discretionary funding

The Obama administration released its proposed fiscal year (FY) 2016 budget last week. The administration requested $83.8 billion in discretionary funding for the U.S. Department of Health and Human Services (HHS) budget, an increase of $4.8 billion from FY2015:

  • Food and Drug Administration (FDA): $4.9 billion
  • Centers for Disease Control and Prevention (CDC): $7.1 billion
  • National Institutes of Health (NIH): $31.3 billion
  • Centers for Medicare & Medicaid Services (CMS): $14.3 billion
  • Office of the Inspector General (OIG): $417 million
  • Office of the National Coordinator for Health Information Technology (ONC): $92 million

The proposal also detailed the administration’s health care agenda. Notable among the proposals:

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Implementation & Adoption

Studies: PCMH initiatives see marked improvements in cost and utilization

Last month, researchers published two reports related to patient-centered medical homes (PCMH) programs. One focused on the federal Comprehensive Primary Care Initiative (CPCI) and the other looked at multiple PCMH initiatives in the public and private sector. The CPCI evaluation was submitted to HHS and marks the first report on CPCI outcomes since the program began.

Background: CPCI was launched in 2012 by the CMS Center for Medicare and Medicaid Innovation (CMMI). The program has focused on enhancing primary care delivery in seven U.S. regions through collaboration between public and private insurance plans. CPCI goals are similar to those for PCMH, though PCMH recognition is not required for CPCI participation. PCMHs aim to improve primary care using a multidisciplinary and coordinated approach. PCMHs have quadrupled in number and individuals served since 2009.

(Source: Taylor, Erin F., Dale, Stacy, Peikes, Deborah, Brown, Randall, Ghosh, Arkadipta, Crosson, Jesse, Anglin, Grace, Rosalind, Keith, Shapiro, Rachel, Mathematica Policy Research, “Evaluation of the Comprehensive Primary Care Initiative: First annual report, January 2015; Nielsen, Marci, Gibson, Amy, Buelt, Lisabeth, Grundy, Paul, Grumbach, Kevin, Patient-Centered Primary Care Collaborative, “The patient-centered medical home’s impact on cost and quality”, January 2015)

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KFF survey looks at who remains uninsured and why

According to findings from the Kaiser Family Foundation’s (KFF) 2014 Survey of Low Income Americans and the ACA, many adults remain uninsured, but not because of difficulties they faced during the application and enrollment process. Many of the individuals (48 percent) said they remained uninsured because coverage is too costly for them, even for individuals who are eligible for financial assistance under the ACA. This suggests that much of the outreach on availability of financial assistance may not be reaching this population. About one in three uninsured individuals who tried to enroll said they did not complete enrollment because of cost concerns. This is despite the fact that 42 percent appear to be eligible for premium tax credits. The age distribution of individuals who remained uninsured did not differ significantly from individuals who obtained coverage:

Analysis: Deloitte’s Survey of Young Adults and Health Insurance shows that affordability as much as lack of engagement affects young people’s willingness to purchase coverage. Both the Deloitte and Kaiser studies found that health insurance for a sizable segment of this age cohort is simply not affordable. On the whole, this group is cost-sensitive, and when faced with the complexities of choosing coverage, they lack an understanding of some important features that make it more affordable. In 2014, some may have made up their mind to not shop for coverage―Deloitte’s survey found that 54 percent of those who remained uninsured after the 2014 open enrollment period never visited or one of the state exchange websites. A majority of those who remained uninsured (did not purchase insurance) did so for two reasons: they can’t afford it (66 percent) and they do not see its value (46 percent).

Many young adults, like their older counterparts, are looking for products that are affordable and meet their needs. Affordability will likely be critical to both lowering the barriers to adoption and increasing their understanding of what the value of good health is. Many are also looking for a better roadmap. The ads and marketing this first time around got their attention and raised their awareness, but young adults missed out on a key message that help is available in the form of subsidies. As the second round of open enrollment comes to a close, will the same patterns hold true?

(Source: KFF, “Adults who Remained Uninsured at the End of 2014,” January 2015)

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Lawmakers unveil “repeal and replace” legislation for ACA

Last week, Republicans lawmakers released a blueprint for a plan to repeal the ACA. The plan would keep some insurance reform provisions, but would also change health insurance provisions and give states flexibility to regulate their insurance markets. The plan does away with or alters many key components of federal health policy:

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On the Hill & In the Courts

Total Medicaid and CHIP enrollment up 17.5 percent

Total Medicaid and CHIP enrollment grew 17.5 percent during open enrollment for the health insurance marketplaces. CMS compared Medicaid and CHIP enrollment before and after open enrollment – July through September 2013 and November 2013 through October 2014. This was discussed in CMS’s November 2014 report on Medicaid and CHIP enrollment and eligibility activity. Data came from all 50 states and the District of Columbia. Nearly 69 million individuals are enrolled in Medicaid and CHIP, and 444,324 additional individuals enrolled from October to November 2014.

(Source: CMS, “Medicaid & CHIP: November 2014 Monthly Applications, Eligibility Determinations and Enrollment Report”, February 2, 2015)

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Study: CMS is more likely to reject national coverage determinations

Researchers from Tufts University analyzed national coverage determinations from CMS to discover that from 2008 through 2012, Medicare was much more likely to reject coverage of expensive medical devices and procedures than it was from 1999 to 2002. The study, published in the latest issue of Health Affairs, examined 213 national coverage determinations from this period of 13 years. They found that of the 74 denials CMS issued, a majority occurred in more recent years. Half of all requests from 2008 to 2012 were denied. According to the researchers, CMS was 20 times more likely to reject coverage in 2012 than in 1999.

Several factors are driving this trend. The determination process now routinely includes reviewing health technology assessments – which examine short- and long-term consequences of the use of a certain technology – to make coverage decisions. Comparative effectiveness research also allows payers to more easily compare effectiveness of different therapeutic options. CMS is holding new therapies to a higher standard for coverage than they used to, often requiring that medical devices, surgery, diagnostic imaging technology, counseling and Part B drugs show improvements in health outcomes for Medicare beneficiaries.

Reaction: The Advance Medical Technology Association (AdvaMed), which supported the study, said that these rising evidence requirements are inhibiting new medical technologies from entering the market and reaching patients. The group also said that more restrictive requirements for coverage could create barriers for companies that wish to bring new innovation to market or for start-ups that rely on coverage and payment of their new products to sustain their business.

(Source: James D. Chambers, Matthew Chenoweth, Michael J. Cangelosi, Junhee Pyo, Joshua T. Cohen, and Peter J. Neumann, “Medicare Is Scrutinizing Evidence More Tightly For National Coverage Determinations,” February 2015)

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Initial Arkansas “Private Option” results suggest spending will be flat over 2014 levels

When Arkansas and CMS came to an agreement on the Section 1115 Waiver that would implement the “Private Option,” the terms said that Arkansas may have to pay for anything above a certain per-person per-month cap. Spending in the program includes costs for premiums and cost sharing for beneficiaries. According to a recent analysis by the Arkansas Department of Human Services, the costs for the month of January were approximately $486 per beneficiary, approximately $14 below the $500.08 cap for 2015. In 2014, costs were $13 per month over the budget cap:

The costs for last year and January 2015 are not final figures and could be revised once more data on the true costs of care are available.

Background: Arkansas was the first state to receive approval from CMS for an alternate expansion program. Private Option uses federal Medicaid funds to purchase private insurance coverage for eligible residents with income below 138 percent of the FPL (about $1,353 in monthly income). Since January 2014, Arkansas has been using the ACA’s Medicaid expansion funds to buy coverage for new eligibles through the health insurance marketplace. The uninsured rate in the state has since dropped a dramatic 10 percent. More recently, CMS allowed Arkansas to amend its waiver to include new cost-sharing requirements for enrollees of the Private Option plan. Beneficiaries will now pay into health independence accounts.

Related: Last week, the Arkansas state legislature passed SB101 – a bill that Governor Asa Hutchinson is expected to sign – to extend the Private Option through June 30, 2016. Governor Hutchinson recently said that the Private Option has benefited the state in many ways so far: the uninsured rate has declined by 10 percent because more than 210,000 individuals gained insurance, and urban and rural hospitals have seen uncompensated care costs drop by $69 million. Arkansas’s budget has also shrunk by $88 million, partially because some people who had Medicaid are now getting care under the Private Option plan, which is currently paid entirely by the federal government. See more in the January 27, 2015 Health Care Current.

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Around the Country

Open enrollment: Nearly 7.5 million enrolled in FFM plans

Last week, HHS released its eleventh weekly report on the second open enrollment period for the FFM. Nearly 7.5 million consumers have selected plans on the FFM since the start of open enrollment on November 15, with more than 179,000 plan selections during week eleven (January 24-30):

Last week, HHS Secretary Sylvia Burwell and Department of the Treasury Secretary Jack Lew appeared before two Congressional committees to speak about marketplaces and the potential effects of the pending U.S. Supreme Court case. In her comments to Senate Finance Chairman Orrin Hatch, Secretary Burwell held firm that the administration believes its position in the King v. Burwell case – that the ACA does not prohibit individuals in the FFM states from receiving tax subsidies – is correct. She also stated that HHS has not contacted any individuals in the FFM states to inform them of the consequences if the Court rules in favor of the King plaintiffs. Secretary Lew told the House Ways and Means committee that the health insurance markets in the FFM states would be disrupted if the Court ruled for King in the case. He also spoke on specific provisions of the ACA that he believes are inconsistent with making health care affordable to all.

Analysis: The Court will hear oral arguments for King v. Burwell on March 3, 2015. A ruling against Burwell on the case might eliminate some insurance subsidies, making premiums higher for millions of individuals in the U.S. who obtained coverage through the FFM states. The plaintiffs argue that the language in the ACA only allows states that established their own marketplace to receive tax subsidies toward insurance premiums. Last month, researchers from the Urban Institute projected a significant loss of coverage if the ruling goes against allowing subsidies in the FFM because individuals now receiving subsidies might not pay for coverage without them. Approximately 8.2 million individuals would become uninsured (a 44 percent increase in the current uninsured rate), and the non-group market in these states would be 69 percent smaller, falling from 14.2 million to 4.5 million. See the January 20, 2015 Health Care Current for more information.

(Source: HHS, “Open Enrollment Week 11: January 24, 2015 – January 30, 2015,” February 4, 2015)

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Seventeen states report measles vaccination rates below 90 percent

Seventeen states have lower than a 90 percent vaccination rate among preschoolers ages 19 to 35 months for measles, mumps and rubella (MMR) vaccine. Trust for America’s Health used the 2013 National Immunization Survey to analyze vaccination rates among children in all fifty states. Certain regions have higher rates of vaccination than others: Eight states in the South, five Western states and four in the Midwest have vaccination rates below 90 percent, but all rates in the Northeast are above 90 percent.

Healthy People 2020 set a goal of vaccinating 90 percent of children in this age group for MMR, and the national rate of 91.1 percent has surpassed this goal. Preschool-aged children are less likely to be immunized than grade school children because they have not entered the school system (most schools require proof of vaccination before children are allowed to attend). This can leave young children vulnerable to communicable diseases, especially those residing in communities with low vaccination rates. This research is particularly relevant in light of the multi-state measles outbreak. The CDC issued a health advisory in January, to provide guidance to health care professionals and state that it will continue to investigate the outbreak.

(Source: Trust for America’s Health, “Measles vaccination rates for preschoolers below 90 percent in 17 states”, February 4, 2015)

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A novel approach to outsmarting resistant bacteria

A study published in the January issue of the journal Nature highlights an innovative new strategy for producing antibiotics: extracting drug components from the bacteria that live in dirt. The new drug developed from this method is called Teixobactin, and studies in mice show that it can treat serious infections with no side effects and in a way that may make it less likely to lose its effectiveness against antibiotic-resistant bacteria.

Antibiotic resistance is a major global problem. Many common antibiotics are becoming useless against infections. In the U.S., drug-resistant bacteria infect at least two million people a year and cause 23,000 deaths, according to the CDC. Microbes – which exist in plants, soil, people and animals – compete to survive and secrete natural antibiotics as weapons to keep the balance of bacteria. Medications like penicillin and other common antibiotics are mined from soil samples. Over time, these medications have become less effective against disease-causing organisms.

Researchers involved in the study discovered a way to “trick” the bacteria by diluting a soil sample and placing it on specialized equipment. The equipment is put into a box of the same soil the sample came from, and the bacteria divide and colonize. Researchers can then grow the bacteria in the laboratory. Teixobactin was isolated from 10,000 strains of bacteria that were screened. In test tubes, it killed various types of staph and strep, anthrax and tuberculosis. The study shows that it works against bacteria in a group known as “Gram-positive,” but not against microbes that are “Gram-negative.” Gram-negative microbes cause many cases of drug resistant pneumonia, gonorrhea and infections of the bladder and bloodstream. The researchers are working to modify the drug to make it effective against Gram-negative infections.

Teixobactin attacks bacteria by blocking fatty molecules needed to build cell walls, and these molecules are unlikely to change and make the microbes resistant. The research team is hopeful that their work will lead the way to a new approach in the search for novel antibiotics.

Analysis: A study commissioned by the Prime Minister of the United Kingdom reported that between now and 2050 300 million people worldwide are expected to die prematurely because of antimicrobial drug resistance. This could cost the world economy $100 trillion – the equivalent of one year of world gross domestic product. Only one new class of antimicrobial drugs has been introduced in clinical practice in the last three decades. The lack of new novel drugs combined with overuse of antibiotics in humans and animals is the cause of the expanding problem of antimicrobial resistance.

Although it is likely to be at least five years before the novel antimicrobial described in the study is available clinically, its mechanism of action suggests that resistance to Teixobactin may not develop until it has been in use for many years. More significant than the drug itself is that the study also describes a new technology for isolating potential antimicrobial drugs from soil samples. This could lead to identification of many more antibiotic candidates and other novel classes of antibiotic drugs.

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Breaking Boundaries

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