Health Care Current: July 15 2014 | Deloitte US | Center for Health Solutions | Life Sciences has been added to your bookmarks.
Health Care Current: July 15, 2014
Taking the patient experience to new heights
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.
- My Take
- Implementation & Adoption
- On the Hill & In the Courts
- Around the Country
- Breaking Boundaries
Taking the patient experience to new heights
There’s a saying among dog lovers like myself that one should never trust anyone who doesn’t like dogs. While this may be a bit extreme for my taste, I am, like Dr. Harry Greenspun, caught up in the life of man’s (or woman’s) best friend: His name is Toby (See #TobyTThomas on Instagram). Now that my kids are out of the home, it is Toby who my husband and I need to get back home to at the end of each day.
A couple of weeks ago, Toby developed a mysterious infection around his eye, and I took him to the vet to get it examined. This was a new vet; our old vet has quasi-retired and has limited hours.
After looking at his eye, the vet excused himself from the room for a minute. He came back shortly holding a dermatology textbook, which he then used to talk me through his thinking on potential causes of Toby’s eye problems. He flipped through the pages on flea dermatitis, ringworm and superficial pyoderma and explained to me that the infection could have come from a number of causes. What I found so refreshing about this visit was that the vet was truly honest with me – at that time he could point to a couple of possibilities as to what was wrong with Toby. He didn’t talk down to me or claim that he knew exactly what the problem was. We worked through the options and treatments together, and I walked away informed and “activated” to follow the approach he recommended—and Toby got a treat.
What does this have to do with human medicine? I’ll cite another memory of a health care interaction—this time from our family dentist. When my son was much younger, a baseball hit him in the mouth. This led to trauma to one of his teeth, and a root canal was in order. Before she referred us to an endodontist, our dentist made sure that health care professional would provide her clear and prompt information about how the procedure went. She was the same way when it came time to get referrals for my kids to get their wisdom teeth out. She started with the list of who was covered by our dental insurance plan (recognizing that cost is a very important part of the health care situation we live in) and then picked the best one for us. Finally, on a separate occasion she gave me the chance to say no to getting a crown after I broke my tooth – even though I had come into the office for the procedure that day. Seven years later, I’m still getting by with my “temporary” filling.
Each of these examples points to some elements that are important to delivering patient-centered care.
So, what is patient-centered care?
The measures of whether care is patient-centered are still in development, but there has been some progress to date. There is an array of “patient satisfaction” and “patient experience” measures that come from surveys such as the Agency for Healthcare Research and Quality’s Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys. The National Committee for Quality Assurance and others have qualitative statements (i.e., standards) that define patient-centeredness in the context of the patient-centered medical home. And exciting work is underway to develop measures called patient-reported outcomes measures to determine whether people actually get better from their health care problems. This research could help the industry focus on improving outcomes, which are what people really care about. Getting these measures into use is likely going to be an important step forward for better patient experience and activation.
In my opinion, these are some of the critical elements needed to make care more patient-centered:
- Treating the patient (or his or her caregiver) with respect and honesty about uncertainty, fully engaging her or him in the options for treatment and using tools to engage patients and caregivers in a dialogue about their individual health care issues.
- Developing a network of relationships with trusted specialists who provide information back to the primary care provider quickly and completely.
- Letting the patient’s preferences drive the treatment options after the patient learns of all the treatment options – including doing nothing.
Being patient-centered and taking steps to engage patients in their care is not simple, especially given one of the biggest constraints in the health care system: time. Fortunately, there are excellent tools called decision aids designed to help health care professionals walk patients through treatment options around their condition(s). Working these into the process of care at the right time is essential and should be done before the practitioner and patient have decided on a course of therapy. Another element that could help with success in patient-centered care is further development of care teams to take some of the pressure off the primary care provider and allow other practitioners to support the patient.
I have mostly had fine experiences with the health care system, beyond the normal aggravations of waiting for an appointment. That said, I can point to a couple of experiences in the hospital when I felt – as many sometimes do – as if things were being done to me or my child without the chance for me to understand or put on the brakes.
I am hopeful that through the expanded use of patient-centered medical homes, technical support to organizations and development of (and then incentives to perform well on) robust measures of outcomes, engagement and patient-centeredness, one day the patient experience can rise to a new level.
By Sarah Thomas, Research Director, Deloitte Center for Health Solutions, Deloitte Services LP
Implementation & Adoption
UnitedHealthcare: cancer costs cut by changing physician incentives
Last week, the Journal of Oncology Practice released results from a three-year study that found a one-third reduction in spending on cancer care without a decrease in quality of patient care. According to the authors, UnitedHealthcare’s spending on cancer care accounts for 11 percent of its commercial health plan budget. In this experiment, UnitedHealthcare partnered with five volunteer medical oncology groups with whom they previously had a typical fee-for-service relationship. Four major changes were made to their contractual relationships:
- The participating medical groups registered and provided clinical data on their patients with breast, colon or lung cancer
- UnitedHealthcare paid the providers a single payment per patient at the beginning of the episode
- UnitedHealthcare paid for the drugs at the average sales price rate
- The medical groups held annual meetings to review cost and quality outcomes data
For the study, 19 clinical episodes were created, for which each medical group selected treatment regimens using the relevant academic literature. UnitedHealthcare predicted that the medical costs for the 810 participating patients from the five oncology groups would total $98 million, but the actual total costs came out to $65 million, for a net cost savings of $33 million despite a 179 percent increase in spending on chemotherapy drugs. The researchers attributed success of the new payment model to collaboration. Throughout the program, variations in care were discussed openly and then used to improve health care delivery for each medical group. In addition, the researchers shared the data with all of the groups in the study.
(Source: Newcomer, Lee N., Gould, Bruce, Page, Ray D., Donelan, Sheila A., and Perkins, Monica. United Healthcare, Northwest Georgia Oncology Centers, and Center for Blood and Cancer Disorders. Journal of Oncology Practice, “Changing Physician Incentives for Affordable, Quality Cancer Care: Results of an Episode Payment Model,” July 8, 2014)
Study: health IT buying behavior varies by hospital tax status
A new report released jointly by the Dorenfest Institute for Health Information and HIMSS Analytics explored health IT buying patterns and found wide variation by hospital tax status. The report analyzed health IT acquisition and implementation patterns of U.S. hospitals operating under non-profit, governmental and for-profit tax structures for 2010-2013. The data revealed that over that time period, non-profit hospitals, which were the largest segment of the hospital market (54 percent in 2013), were disproportionately active buyers of health IT each year (an average of 67 percent purchased health IT software each year). Approximately 55 percent and 52 percent of government and for-profit hospitals, respectively, purchased health IT annually.
The top two applications purchased by hospitals were consistent across the board (computerized practitioner order entry and physician documentation). For-profit hospitals were the group most likely to place higher priority on physician portals.
(Source: The Dorenfest Institute and HIMSS Analytics, “Hospital Tax Status and HIT Buying Patterns,” April, 2014)
Study: hospital use of EHRs not leading to an increase of Medicare billing
According to a recent study from researchers at the University of Michigan School of Information and the Harvard School of Public Health published in this month’s Health Affairs, use of electronic health records (EHRs) is not associated with changes to billing practices intended to increase revenue. This practice has been reported through research and anecdotally. Researchers compared the billing records of 393 hospitals using EHRs (adopters) with those of 782 hospitals using paper records (controls) over two time periods.
*Note: Difference-in-differences looked at changes in the case-mix index and the Medicare payment among new adopters and a control group from the pre-adoption period to the post-adoption period. Difference-in-trends looked at trends among the groups two years prior to adoption and two years after adoption.
The study relied on four sources of data to capture two measures of billing practices: case-mix index and payment per discharge for all inpatient stays. The case-mix index (the degree of severity of illnesses reported by hospitals) increased by 0.066 and 0.065 for EHR adopters and the control group, respectively. EHR adopters and the control group showed increases in Medicare payment per inpatient discharge of $849 and $945, respectively. While the increase was slightly greater for controls, the difference was not statistically significant.
Note: These findings differed from a 2012 study by the Center for Public Integrity and the New York Times, which found that Medicare providers using EHRs were over-billing the Medicare program at higher rates over time, particularly in hospital emergency departments and outpatient services. The article suggested that record cloning (using a template for records for more than one patient), expedited documentation of complicated processes, and corrections for historical underbilling could be causing these effects.
(Source: Adler-Milstein, Julia and Jha, Ashish K. Health Affairs, “No Evidence Found that Hospitals are Using New Electronic Health Records to Increase Medicare Reimbursements,” July, 2014)
Survey: life sciences and health care consolidation expected to increase this year
Earlier this month, Bass, Berry & Sims released findings from its survey of 50 corporate life sciences and health care professionals and investors about trends in merger and acquisitions (M&A). According to the results, while M&A declined from 463 deals in 2012 to 394 deals in 2013, 86 percent of respondents expect health care provider sector consolidations to increase in 2014. The survey also found that, in the health care provider sector, 84 percent of respondents expect strategic M&A buyout activity from private equity to increase, while 66 percent expect the same trend in life sciences. The respondents expect this despite the fact that private equity buyouts declined from 79 in 2012 to 74 in 2013. Other key findings include:
- Top three strategic drivers of overall health care industry M&A: Respondents identified rising demand for facility and equipment improvement (46 percent), increased need for IT support/capabilities (42 percent) and an increase in compliance costs (32 percent) as the largest drivers of M&A over the coming months.
- Top two sub-sectors expected to consolidate: In health care, respondents predict consolidations will occur primarily among hospitals and health care providers and health care IT and services. In life sciences, respondents expect the most consolidation to occur between biopharma and generics/biosimilars firms and among biopharma firms.
The respondents identified the top three challenges in industry consolidation as regulatory compliance, financial due diligence and antitrust issues.
Related: Deloitte’s 2014 M&A trends report found that 84 percent of the 2,500 executives surveyed believe that M&A activity will increase or maintain its current pace over the next 24 months. The top industries for deals identified by the respondents include technology, health plans and providers, alternative energy, oil and gas and banking. For more information, read Deloitte’s 2014 M&A trends report.
(Source: Bass, Berry & Sims PLC, “Healthcare & Life Science M&A Outlook,” July, 2014)
Health Affairs highlights VA’s analytics and big data initiatives
This month Health Affairs published a report on the use of big data by the U.S. Veterans Health Administration (VA). On average, the VA’s investment in health IT has totaled 5 percent of their annual spending. The VA cares for more than six million veterans and has had a long experience with health IT, using the Veterans Information Systems Technology Architecture (VistA) system since 1982. The brief highlights initiatives that the VA has been implementing to begin performing “next-generation” analytics to improve health care among the veteran population:
- VA’s EHR evolution: In 1997 the VistA system started using a graphical user interface, the Computerized Patient Record System (CPRS), which was primarily constructed for clinical care delivery. Since 2004 the CPRS/VistA system, an EHR portal, has evolved to be able to document all routine clinical activities, retrieve results and enter orders. The system also uses automated alerts for clinical reminders.
- Corporate data warehouse (CDW): The VA developed the CDW in 2006 as a national repository of patient-level data. The CDW consolidates more than 60 types of clinical and operational data, including demographics and medications. Later this year the data will be refreshed as quickly as every four hours, allowing clinicians to perform near-real-time analysis and reporting.
- Care assessment need (CAN) scores: The VA also uses the CDW to create models that predict adverse events such as hospitalization and death in the patient population. CAN scores are assigned to individuals based on data in the CDW; the scores allow clinicians to target care to high-risk patients. CAN scores can be aggregated into geospatial maps to support programmatic planning and assessment of site needs.
- Patient-centered medical homes: The VA has also used the CDW to analyze programs such as the Patient-Aligned Care Teams (PACT), the VA’s version of patient-centered medical homes. The CDW allows the VA to nationally evaluate this initiative using demographic, clinical and operational data from the primary care practices. It has also allowed the VA to assess the PACT program’s return on investment.
The VA has used health IT and has tracked its performance for decades now, but the transition to big data is recent and continues to develop. The authors write that the creation of the CDW has allowed the VA to incorporate greater use of big data and analytics practices into the system. The authors also acknowledge that the VA faces challenges that many other integrated delivery networks face, such as data governance, growth of data sources, clinical workflow integration issues and data consolidation.
Note: According to the HIMSS Annual Report of the U.S. Hospital IT Market, on average hospitals spent approximately 2.74 percent of their total operating expenses on IT.
(Source: Fihn, Stephan D., Francis, Joseph, Clancy, Carolyn, Nielson, Christopher, Nelson, Karin, Rumsfeld, John, Cullen, Theresa, Bates, Jack, and Graham, Gail L. Health Affairs, “Insights from advanced analytics at the Veterans Health Administration,” July, 2014)
On the Hill & In the Courts
CMS proposes updates to PFS, PQRS, Open Payments and more
During the Fourth of July week, the Centers for Medicare and Medicaid Services (CMS) issued several proposed rules updating the Medicare physician fee schedule and outlining new payment rates and policies for outpatient services, including:
- Medicare physician fee schedule (PFS) for 2015: CMS proposed to finalize aspects of the chronic care management (CCM) services payment that was proposed last year. Beginning in 2015 this separate payment will be given to Medicare providers who help manage the care of individuals with two or more chronic conditions. The proposed rule establishes a payment rate for those services that can only be charged once per month for CCM services to qualified patients. In addition, the proposed changes include enhancing transparency around how CMS sets rates for the payment system.
- Telehealth services: In the proposed rule, CMS also proposed adding new services to the list of approved telehealth services. These include annual wellness visits, psychoanalysis, psychotherapy and prolonged evaluation and management services. For more on telehealth, view the July 15 Dbrief, “mHealth, eHealth, and Telehealth: Converting Disruption into Opportunity.”
- Open Payments program: The Open Payments program requires drug and device manufacturers to report payments or transfers of value to physicians each year. The proposed rule would remove the exclusion for continuing education from this program in an effort to provide consumers consistent information on the Open Payments program and streamline reporting requirements for manufacturers. PhRMA, the pharmaceutical companies’ trade association, recently submitted comments related to the reporting and technology requirements for the Open Payments program (see the June 24, 2014, Health Care Current).
- Physician Quality Reporting System (PQRS): Through the PQRS, eligible professionals are paid for reporting quality measures. Beginning in 2015, providers who do not meet the requirements of this program will see a downward payment adjustment. The proposed rule makes updates to the measures (adds some and removes others); there are now 240 measures.
- Medicare Shared Savings program: CMS proposed new quality measures under the required reporting for participating accountable care organizations, raising the number of measures from 33 to 37. The new measures include avoidable readmissions for patients with certain conditions, skilled nursing facility readmissions and measures on whether providers informed patients about the potential costs of treatments.
Around the Country
Colorado estimates 24 percent of marketplace enrollees will drop insurance policies
Last week, Colorado officials updated their estimate of how many individuals in the health insurance marketplace will drop their new coverage policies, expecting an 11 percent point increase over their previous estimate of 13 percent in April. Connect For Health Colorado is now expecting approximately 24 percent of individuals (more than 35,000 out of the 152,000 total enrollees) enrolled through the marketplace to drop their policies this fiscal year. The state-based marketplace based its new estimate on national figures.
By law, the marketplace must become self-funding. In order to do so, the state is charging $1.25 per month on small group and individual market plans in addition to collecting a 1.4 percent administrative fee on each policy. The new estimate of people dropping their policies predicts a $1 million decrease in revenue, dropping from $7.9 million to $6.9 million, due to the loss of the monthly income from those individuals. Despite the revenue loss, Connect For Health Colorado still expects to see revenue exceed expenses; less money will be put into reserve.
Study: potential consequences of states’ decisions to expand or not expand Medicaid
On July 2 the White House Council of Economic Advisers (CEA) released a report on the potential consequences of states’ decisions to expand Medicaid. As of this month, 26 states and the District of Columbia have expanded Medicaid, and 24 have indicated they will not. According to the report, the states’ decisions to expand Medicaid could affect the following:
- Insurance coverage: If all states expanded Medicaid, CEA estimates that approximately 10 million individuals would gain health coverage by 2016—4.3 million from states that already expanded and the additional 5.7 million from the 24 states that have not yet expanded.
- Using data for individuals who won the 2008 Medicaid coverage lottery in Oregon (the Oregon Health Insurance Experience or OHIE) and those who didn’t, researchers found:
- Access to and use of medical care: Those enrolled were 11.4 and 23.8 percentage points more likely to report receiving all needed medical care and having a usual source of clinical care, respectively. Having Medicaid coverage also increased the likelihood of receiving recommended preventive care, such as cholesterol-level screenings, mammograms and pap smears.
- Financial security: Medicaid enrollees were less likely by 4.5 percentage points to experience catastrophic out-of-pocket medical costs compared with non-enrollees. Medicaid coverage also reduced the risk of having to borrow money or skip paying bills as a result of medical expenses by 14.2 percentage points.
- Health outcomes: Medicaid enrollees were 9.2 percentage points less likely to screen positive for depression.
- State economies and the national economy: CEA estimates that the additional federal Medicaid funding to states that have not expanded could reach $88 billion from 2014-2016, if they expanded. Further, the CEA predicts that the states that have not expanded Medicaid could see more than 378,000 new jobs from 2014-2017 if they decided to expand.
(Source: The Council of Economic Advisers, “Missed Opportunities: The Consequences of State Decisions not to Expand Medicaid,” July, 2014)
ONC announces EHR challenge for blood pressure control
Last week the U.S. Office of the National Coordinator for Health Information Technology (ONC) announced a federal competition to identify and help providers effectively use clinical decision support tools to implement evidence-based blood pressure treatment protocols. In phase one of the competition, ONC will award up to four winners $5,000 for documenting the EHR tools they use to demonstrate high control over blood pressure levels in their patients. In phase two, the tools and strategies that won in phase one will need to be effectively used by at least two additional practices. The phase two winner ($30,000 award) will be determined by the number of practices in which the intervention is successfully adopted and how well blood pressure is controlled in the patient population.
Note: This contest is part of the Million Hearts initiative, a joint project between the U.S. Centers for Disease Control and Prevention and CMS, which aims to prevent 1 million heart attacks and strokes by 2017
U.K. cardiovascular health group launches heart age app
The British Cardiovascular Society (BCS), a U.K. group that aims to reduce cardiovascular disease, recently unveiled an app for medical professionals for calculating the heart age of individuals. Providers input measurements, such as blood pressure, age, lifestyle and cholesterol level, and the app calculates the potential risk an individual has for a cardiac incident. In order to communicate this risk clearly to patients, the app displays an individual’s heart age—showing not only the age of the individual’s heart, but also charts that predict the life expectancy of the individual. It also highlights lifestyle decisions and interventions (e.g., reducing blood pressure levels, stopping smoking) that could help reduce the individual’s risk of cardiovascular disease. BCS developed the app to encourage providers to use more cardiovascular disease prevention principles in their daily health care practice.