Technology holds promise to improve the patient journey
Health Care Current | January 30, 2018
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.
Technology holds promise to improve the patient journey
By Sarah Thomas, Managing Director, Deloitte Center for Health Solutions, Deloitte Services LLP
I recently had the pleasure of leading a webcast panel discussion with three of Deloitte’s top technology leaders. We took a sector-by-sector look at how technology is beginning to transform life sciences firms and health care organizations. While each panelist represented a different sector, they all agreed that multiple forces are putting pressure on stakeholders to incorporate new technologies, and work together to improve the journey of care.
What is driving stakeholders to invest in new technologies?
Our panelists agreed that life sciences and health care organizations are turning to new technologies to help them accomplish two key goals:
- Improve efficiencies while reducing costs: For years, the idea of doing more for less has been a common refrain throughout our industry. Industry leaders want to replace costly and inefficient legacy processes with streamlined procedures that add value to the system.
- Build new and effective business models: Some technology giants are entering the health care space by leveraging their technological expertise and consumer prowess. Many recently announced merger and acquisition (M&A) deals point to a trend of vertically integrated business models—whether this means primary care groups coming together with health insurers, or large retail pharmacy benefit managers (PBMs) joining traditional health insurers to push further into care delivery.
How are new technologies playing out?
Technology is providing new opportunities to all health care stakeholders—including patients. During our session, we discussed a variety of trends taking place among health systems, health plans, and life sciences companies.
- Life sciences companies are becoming more aware that they need to transform: Historically, life sciences companies have held patients at an arms-length for a number of reasons. Now, companies are beginning to shift their thinking about patients – many reaching out directly to customers to make their products better and improve marketing. Life sciences companies are commonly taking advantage of social media to build communities of interest where patients can interact with the company and with each other, creating more trust and brand permission. These organizations also are investing heavily in data and analytics, seeking new ways to drive discoveries, gather data about adverse reactions, and use data to provide real-world evidence. From an enterprise data sovereignty perspective, we see many opportunities for life sciences companies to harness data and technology from the end of the supply chain to more direct patient engagement.
- Health systems are reengineering their technology operating models: To implement more agile processes, many health systems are beginning to try new things, fail fast, learn from the experience, and ultimately reach the most appropriate solution. This is a departure from the traditional multi-year “waterfall” approach to IT implementation. Many health systems also are trying to determine which activities should be outsourced. Outsourcing some less-complex tasks, for example, could help free up IT departments to focus on more complicated processes. From a clinical perspective, augmented reality/virtual reality could have a big impact for health systems and health care providers. While adoption has been slow, these technologies have great potential when it comes to future care delivery for home health and telehealth. It will be exciting to see what plays out.
- Health plans want to bring capabilities to market more quickly than they have in the past, whether it be for value-based care, data science, or artificial intelligence: Health plans often need a set of systems and technology assets that are more plug-and-play than they used to be. Legacy systems typically have a lot of hard wiring and integration costs, which tend to be extremely expensive and high-risk when systems are swapped out, or when new capabilities are added. Incorporating more cloud-based capabilities or SAS systems can require health plans to work with innovative partners that offer essential capabilities. The ability to interact and integrate new technologies more nimbly than in the past is likely to be an absolute cornerstone of competition going forward. Data and analytics can enable health plans to have a holistic view of their members, helping manage population health and shift to value-based care moving forward.
Looking to the future
Even as life sciences and health care organizations focus on reengineering core technologies, our speakers did not lose sight of new and emerging innovations. Not only might these technologies change how companies and organizations do business, they also could affect the workforce of the future – redefining talent strategies and future skill sets.
Organizations are likely to see huge amounts of information generated by e-commerce companies, search firms, and through social media. Some medical device companies, for example, are adding sensors to their products, which will allow them to gather consumer data and build their own versions of electronic health records. Companies that want to leverage the data from these diverse sources will have to navigate a world of licenses while abiding by rules tied to the Health Insurance Portability and Accountability Act (HIPAA).
While our panelists primarily focused on how technology trends can impact stakeholders over the next 18 months to three years, they also explored exponentials and quantum computing, which could have longer-term impacts on stakeholders. Such advances will affect not only issues like data security, but can also impact material science, molecular engineering, and other areas where we expect significant breakthroughs.
What challenges will technology solve?
Artificial intelligence, automation, robotics, and advanced analytics could help reduce, or even eliminate, patient pain points such as referrals, denied claims, and requests to juggle multiple clipboards in the doctor’s office. Despite the potential, however, the patient journey is unlikely to improve until health care stakeholders can incorporate these emerging technologies and work together toward a common goal. Organizations most likely to thrive in this future will be those that are able to put the technology pieces together to form a coherent, winning strategy, and offer differentiated products to the market.
PS: We’re excited that we’ll be launching a cut of Deloitte’s tech trends report focused on the life sciences and health care industry. Check out our related Dbriefs series on the topic, and sign up to receive the reports when they are available later this winter.
In the news
Consumers and behaviors are changing on insurance exchanges
Level enrollment among state-based health insurance exchanges masks significant rate increases, new plan selection trends, and varying open enrollment periods, according to state data.
Premiums: Although most premiums increased for the 2018 plan year, enrollees who receive federal premium tax credits did not see much of a change. After the administration ended cost-sharing reduction payments (CSRs), most health insurers increased premium rates for silver-tier plans. The federal premium subsidies are pegged to the second-lowest-cost silver plan; as the premiums went up, so did the subsidies. However, those who were not eligible for subsidies, likely saw their premiums increase. In Colorado, for example, premiums increased 36 percent on average for those not eligible for subsidies.
Plan-selection trends: Exchange enrollees were more likely to choose gold or platinum plans for 2018 than in previous years because they cost enrollees less.
Varying open enrollment periods: The open enrollment period for health coverage sold through HealthCare.gov ended December 15. However, some state-based exchanges gave consumers more time to enroll. Connecticut, Minnesota, Washington, and Rhode Island, which extended their enrollment periods, reported overall increases in enrollment over the previous year, while Colorado and Maryland, which did not extend enrollment periods, saw slight decreases. State officials in Colorado and Maryland cite the shortened open enrollment period, relative to last year, for the change.
Congress omits several Medicare ‘extenders’ from spending deal
On January 22, Congress voted to end the government shutdown and passed a continuing resolution (CR), which keeps the government open until February 8 (see the January 23, 2018 Health Care Current). Several expired Medicare “extenders,” or payment provisions that Congress typically reauthorizes for several years, were not included in the CR. These policies include:
- Reauthorization of Medicare Advantage Special Needs Plans, health plans that enroll beneficiaries with specific conditions, who live in nursing homes or have both Medicare and Medicaid coverage
- Additional payments for rural health facilities and transportation
- Exceptions to “therapy caps,” or limits to physical, occupational, and speech therapy
- State Health Insurance Programs that counsel individuals on their Medicare choices
Congress may include these policies in future legislation (for more on the law that reopened the government, please see the January 23, 2017 Reg Pulse).
Senate votes to confirm Alex Azar as HHS Secretary
On January 24, with the support of six Democrats, the Senate voted 55-43 to confirm Alex Azar as secretary of the US Department of Health and Human Services (HHS). HHS has been without a Secretary since September. Azar previously served as president of Eli Lilly and Company, and as general counsel and deputy secretary of HHS under President George W. Bush (see the January 16, 2017 Health Care Current). He was sworn in January 29, 2018.
Report: CMS chronic care program saves $88 million annually
The Centers for Medicare and Medicaid Services’ (CMS) Chronic Care Management (CCM) program, which pays clinicians for chronic care services between visits, saved Medicare roughly $28 per-member-per-month, or about $88 million annually, according to an analysis of the program from Mathematica Policy Research. Under the program, launched in January 2015, CMS pays clinicians for non-face-to-face services, such as telephone calls and CCM services, to improve chronic care management for Medicare beneficiaries.
Researchers compared utilization and spending for beneficiaries who received CCM services during the first 18 months of the program with that for similar beneficiaries (based on demographics, health status, frailty, expenditures, service utilization and geography) who were not part of the program. Researchers found per-member-per-month expenditures for those in the program, compared to those outside of the program, decreased by an average of $28 during the first 12-months after the program began, and by an average of $74 after 18 months.
Some clinicians said that the CCM payment amount was inadequate for the work required, while others were happy to be reimbursed for services they were already providing.
(Source: John Schurrer et al., “Evaluation of the Diffusion and Impact of the Chronic Care Management (CCM) Services: Final Report,” Mathematica Policy Research for CMS, January 2018)
Health care service use has decreased, but prices have increased, says new report
Price increases have driven an increase in overall health care spending over the past several years, according to a new report by the Health Care Cost Institute (HCCI). HCCI’s data are for commercially-insured individuals. Total spending increased at a greater rate in 2016 than in any prior year since 2012.
The chart below provides detail by type of service.
Overall, prices for outpatient services increased most. Among outpatient services, emergency room (ER) services had the biggest price increase. Inpatient mental health and substance-use treatment was one of only a few service categories where both price and utilization increased between 2012 and 2016 (by 18 percent and 8 percent, respectively). While spending on primary care office visits decreased, specialty care spending increased. Changes in insurance availability, plan design, access, and billing practices might be at the root of some of these trends, according to HCCI.
HCCI used employer-sponsored plan data from Aetna, Inc., Humana, Inc., Kaiser Permanente, and UnitedHealth Group to examine these trends between 2012 and 2016.
(Source: “2016 Health Care Cost and Utilization Report,” Health Care Cost Institute, January 2018)
New cost controls sought in federal employee health care program
In its annual call letter to carriers, the US Office of Personnel Management (OPM) asked health plans to consider financial incentives to encourage employees participating in the Federal Employees Health Benefits Program (FEHBP) to keep costs down.
The call letter is the first step in the annual benefits and premium-setting process. In this year’s letter, the agency outlined a number of objectives, including:
- Controlling health care costs: Examples include reducing out-of-pocket costs for enrollees who use narrow provider networks, take steps to manage chronic conditions, or obtain care through creative provider or vendor partnerships.
- Reducing opioid misuse: Examples include further efforts to prevent misuse or to treat addiction.
- Improving medication adherence and drug utilization: Examples include formularies that encourage evidence-based treatments, address hypertension and diabetes, and genetic testing that helps optimize treatment.
- Reviewing plan design and benefits in context of the excise tax: Though the tax has been delayed, OMB encouraged carriers to review plan design and network and benefit management strategies relative to the so-called “Cadillac” tax on high-cost employer-sponsored plans.
The FEHBP has roughly 4 million enrollees and about 260 participating plans. For health plans that begin on January 1, 2019, carriers must submit benefit and rate proposals by May 31, 2018. If the agency follows past precedent, coverage terms and premium rates will be announced in September.
Governors advise Congress and executive agencies on opioid crisis
On January 18, the National Governors Association (NGA) released a list of 27 ways the federal government could help states address the opioid crisis. NGA said it needs more resources to continue to address the problem. The 27 recommendations fell into five categories:
Some of the governors’ recommendations would require changes to federal policy. These include:
- aligning the confidentiality provisions in 42 CFR 2 with the Health Insurance Portability and Accountability Act (HIPAA),
- allowing state Medicaid programs to receive federal matching funds for substance use disorder treatment,
- approving 1115 waivers that would allow states to cover addiction treatment under Medicaid for prisoners (pre-conviction) and up to 30 days post-release, and
- covering methadone under Medicare in outpatient settings.
Other recommendations were within the scope of existing law, such as:
- strong enforcement from HHS of the Mental Health Parity and Addiction Equity Act to ensure everyone who needs substance use disorder treatment can access it, and
- designated funding, including for state medical examiners’ offices.
Last November, the Senate Health, Education, Labor, and Pensions (HELP) Committee collected state officials’ perspectives on how best to address the opioid crisis (see the December 5, 2017 Health Care Current). The four witnesses offered similar recommendations as the governors did.
Related: On January 24, Acting Secretary of HHS Eric Hargan extended a declaration stating that the opioid crisis is a public health emergency. The declaration permits federal health agencies to allocate additional resources to address the crisis. However, critics say the declaration has not been effective given that the administration has not dedicated additional funding.
Additionally, in a budget outlined earlier this month, New York Governor Andrew Cuomo (D) proposed a two-cent-per-milligram surcharge on opioids, which drug manufacturers would pay. The $125 million raised in revenue per year would fund opioid use prevention efforts and addiction treatment.
Maryland is latest state seeking to rein in prescription drug costs
A bill introduced by Maryland State Senator James Brochin (D) would require prescription drug and device manufacturers to submit sales prices to the state for quarterly review. If the bill passes, manufacturers will have to submit the average sales price for each drug or device available in the state to the Maryland Department of Health. If they do not comply, manufacturers could receive a $10,000 fine per violation.
Drug price review and transparency bills have been passed or introduced in several states. For example, lawmakers in California passed a bill last year requiring drug manufacturers to inform the state when they raise the price of a drug by 16 percent or more (see the September 19, 2017 Health Care Current); the bill went into effect on January 1.
Maryland has undertaken other price transparency efforts as well. Last October, the state’s Health Care Commission launched a website that lists prices for common procedures at hospitals throughout the state (see the October 31, 2017 Health Care Current).
Telehealth may help Medicaid beneficiaries reduce emergency department visits
Telehealth was initially used to give rural patients better access to physicians. But over the last few years, urban areas around the country have been exploring ways to use virtual care to reach patients with barriers that extend beyond geography. Such barriers can include lack of adequate transportation for even short distances, lack of childcare during appointments, and trouble scheduling appointments outside of traditional office hours.
A community health center in Washington, DC is piloting a program that offers virtual care to Medicaid beneficiaries who face some of these barriers. The pilot program involves medical assistants—armed with clinical tools such as blood pressure monitors and scales—who travel to the patient’s home. Using a laptop computer to connect to a physician in another location, the medical assistant collects patient information and transmits it. The physician sees all the information in the chart and can offer advice to the patient through the computer.
By helping patients get their weight, blood pressure, and other health risks under control, the program aims to reduce or prevent emergency room visits. The longer term goal is to reduce the incidence of heart disease, diabetes, and other common chronic conditions that are preventable, but have been rapidly increasing in the past few decades.
Increasingly, state Medicaid programs are paying for telehealth services. The Center for Connected Health Policy’s annual report, which tracks state laws and payment policies, shows that almost all 50 states pay for some telehealth services. Most of these states pay for a live telehealth consult between a patient and physician, while 13 states pay for store-and-forward services, where electronic medical information (such as digital images, documents, or pre-recorded video) is transmitted. Twenty-two states now pay for some form of remote monitoring for Medicaid beneficiaries.
Related: School-based telehealth programs have the potential to improve clinical outcomes and reduce health care costs among children who have asthma and live in a low-income, urban setting, according to a recent study from the University of Rochester. The study compared a school-based program (which included telehealth links to primary care providers) to enhanced usual care. The enhanced usual care group received a guidance-based asthma symptom assessment, a recommendation for medications and education materials, and were contacted on a regular basis to discuss care and collect feedback. The telehealth group received a virtual visit at school at the beginning of the school year, and at selected times during the year. Whenever possible, the child’s primary care physician was included in the visit, and clinicians from the university were used when necessary.
The study, which involved about 400 children from 49 schools in Rochester, took place between 2002 and 2016. Results showed that the telehealth-based treatment yielded statistically significant improvements in outcomes among urban children with persistent asthma. Children receiving the intervention had more symptom-free days, fewer days with activity limitations, reduced airway inflammation, and fewer emergency department visits or hospitalizations for their asthma.