Health Care Current: June 14, 2016

Social saving lives: Using social, mobile, analytics, and cloud services in new ways

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.

Social saving lives: Using social, mobile, analytics, and cloud services in new ways

While I’m rarely an early adopter, I tend to be a fast-follower of technology when it suits me. Right now, that means SMAC – social, mobile, analytics, and cloud. I’m active on Facebook, LinkedIn, and Twitter, keeping me in touch with friends, family, and colleagues. I have mobile devices in my pocket, attached to my clothing, and even on my dog’s collar. I use Strava to analyze every bike ride, breaking each down into segments comparing my performance against my friends and my prior efforts. And every night, my photos, music, and files get backed up into the cloud.

I use these resources not because they are cool, but because each provides me with clear value. Consumers have seen other industries like entertainment, consumer goods, and banking use SMAC technologies to improve service, increase efficiency, and generate savings.

So, where does health care stack up against these other industries in its use of SMAC? Our recent paper “SMAC: Better together” looks at how the health care industry can use these same tech tools to their advantage. Specifically, we looked at the opportunities and challenges for SMAC in four operational areas that provided the greatest chance of cost savings:

  • Next-generation supply chain
  • Research and development (R&D)
  • Care coordination
  • Digital payments

Creating a next generation supply chain: Health care providers and drug and device manufacturers can make their supply chains more data-driven, secure, and efficient. Health systems spend 30 to 40 percent of their operating budget on supply chain-related expenses.1 Hospitals can use SMAC tools to optimize the supply chain process. For example, cloud computing can enable track-and-trace systems that require processing large amounts of data in real time. Concord Hospital tracked its medical and surgical supplies and was able to reduce its inventory by 13 percent, with the largest decreases occurring in some of its most expensive departments: surgery, ICU, and emergency.2

Enhancing research & development: SMAC tools also can support R&D efforts by improving collaboration among researchers and patients, which reduces the time and cost to get treatments to market. For example, organizations can use analytics to tailor treatments for specific patient populations. Pfizer has used analytics to tailor a lung cancer drug for a subset of patients. The company received approval for this drug from the US Food and Drug Administration (FDA) based on clinical trials for only 255 patients, rather than the thousands conventionally needed.3 This reduced the time from discovery to approval to three years, less than half the typical timeframe. Similarly, Johnson & Johnson, uses social media channels to communicate with the public and proactively address complaints.4 Apps and social media can capture real-time data (including call notes and follow-up actions from physician interactions) and allow clinical trial participants and patients to more easily document and share ongoing results of their treatments and drug side effects.

Improving care coordination: Social media platforms can provide patients with additional information to help them communicate with clinicians, and mobile devices can be used to collect, display, and deploy information when patients need it the most. For instance, in a pilot at Beth Israel Deaconess Medical Center, physicians received patient allergy alerts on Google Glass at the patient’s bedside before administering medication.5 Social data can also be used to improve care. For example, patient-generated data on sites such as Facebook can be tracked for indicators such as fitness and mental health, and this data can be used to better target treatments and other types of support to improve care. The US Department of Veterans Affairs uses this type of data on Facebook posts to identify potential suicide risks.6

Streamlining operations through digital payments: Finally, digital health care payments provide the opportunity to streamline the roughly $2.1 trillion (in 2011) payment market.7 The current manual, paper-based patient billing infrastructure that many health systems use will not be able to keep up with the anticipated growth of payments, reaching $5 trillion by 2022.8 Stakeholders are beginning to invest in automated payment technology solutions, including portals, mobile apps, and analytics platforms. For example, InstaMed automates account receivables processes and provides analytics-based reporting and solutions to identify a consumer’s payment responsibility, making the process smoother for consumers and providers.9

The SMAC tools I use, Facebook, LinkedIn, Twitter, mobile apps, and cloud services, allow me to seamlessly share information with my family and friends, back up sentimental files, and push me to workout harder and longer. While these benefits may not be life changing for one user, in aggregate, their potential could be limitless. Health care stakeholders can better realize the full value of SMAC tools when they use its component technologies to capture data, disseminate information, apply knowledge, and store collected information. Health care organizations can use the data from these tools to reduce costs, accelerate R&D, improve care coordination, and upgrade payment systems. While challenges in privacy and security, liability, organizational change, and consolidation may exist, for many health care organizations and for consumers, the risk may be worth the reward. Adopting these efforts could change lives for the better.

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1 Ron Rardin, “The future of healthcare: Supply chain,” Modern Healthcare, July 2011,, accessed February 2016.
2 SupplyChainBrain, “Mercy ROI Takes Optimized Supply Chain All the Way To Patients’ Bedsides,”
3 David Bates, Suchi Saria, Lucila Machado, Anand Shah, and Gabriel Escobar, “Big Data In Health Care: Using Analytics To Identify And Manage High-Risk And High-Cost Patients,” Health Affairs 33, no.7 (2014): pp. 1123-1131, DOI:
4 Amazon web services, “AWS Case study: Johnson & Johnson,”
5 Beth Walsh, “Halamka talks new technologies,” Clinical Innovation and Technology, April 2014,
6 Durkheim Project,
7 PR web, “Following Successful Theranos Research Report, Firm Takes Aim at Healthcare “Blind Spot” With New Website and Product Set,” September 2015,
8 Ibid.
9 Case study: Good Samaritan Hospital,” 2015,

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My Take

By Harry Greenspun, MD, Managing Director, Deloitte Center for Health Solutions, Deloitte Services LP


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HHS proposes insurance regulations to reduce use of short-term plans

Last week, the US Department of Health and Human Services (HHS) proposed changes to policies for health insurance and the exchanges: tightening requirements for short-term coverage policies and eligibility for special enrollment periods (SEP) and modifying the risk adjustment formula.

In response to comments from industry leaders, the US Centers for Medicare and Medicaid Services (CMS) proposed to limit offerings of short-term, limited duration coverage by changing their definition. These plans, which are offered outside of exchanges, do not face the same requirements as exchange coverage. The new definition would allow carriers to only offer these plans for three months and they could not be renewed after that. CMS says that some health plans tend to enroll healthier individuals into these plans; if they do, that could make the risk pools in the exchanges more costly. These plans are not regulated by the market reform requirements in the Affordable Care Act (ACA) (e.g., no discrimination based on preexisting conditions).

Other policies in the proposed rule include adjustments to the data included in the risk pool formula, data matching during the enrollment process, and the process for transitioning beneficiaries on the exchange into Medicare. CMS is proposing the following changes:

Related: On May 6, 2016, CMS limited eligibility for SEPs, periods when consumers can purchase a health insurance plan on the exchange outside of annual open enrollment. These policy changes are intended to protect health plans from adverse risk when consumers enroll in coverage only when they experience a health event and drop coverage once they are better (see the May 17, 2016 Health Care Current).

(Source: CMS, “Fact Sheet: Strengthening the Marketplace – Actions to Improve the Risk Pool,” June 8, 2016)

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Implementation & Adoption

Panel: MIPS may help clinicians move toward focus on value

CMS’s Merit-Based Incentive Payment System’s (MIPS) will help focus individual clinicians on value, according to a recent panel hosted by the Commonwealth Fund. MIPS is part of the Medicare Access and CHIP Reauthorization Act (MACRA). The panel, which included policy officials and representatives from early adopters of delivery system reform, provided testimony about how their organizations have supported clinician success and improvement by applying behavioral economics concepts, especially the nudge theory. The panelists said that MIPS leverages behavioral economics.

MIPS is one of two programs under MACRA’s Quality Payment Program (QPP). It measures performance in four categories (resource use, clinical practice improvement activities, advancing care information, and quality) for clinicians who do not qualify for Advanced Alternative Payment Model (APM) incentives. MIPS allows clinicians to select quality reporting measures that apply to their practices.

The panelists said that in order to implement a successful incentive program to further health care delivery transformation, clinicians need:

Dr. Patrick Conway, Deputy Administrator for Innovation and Quality and Chief Medical Officer for CMS, said that MACRA was designed to be flexible and evolve with lessons learned from early adopters and participant feedback.

Related: According to Deloitte’s recent report, “MACRA: Disrupting the health care system at every level,” MACRA overhauls Medicare’s payments to clinicians by creating strong incentives for them to participate in APMs that require financial risk-sharing for a broad set of health services and that are designed to improve quality. MACRA puts significant revenue at stake for hospitals, health plans, and other organizations that employ clinicians who are paid through the Medicare physician fee schedule. The law’s incentives for clinicians to enter risk-bearing, coordinated care models could create opportunities for health systems and health plans to enter into new arrangements with clinicians under Medicare.

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Study: Health plans selling more individual coverage on ACA exchanges

More health plans are selling policies on the exchanges than through the individual market outside of the exchanges, according to a recent Commonwealth Fund report. One major reason may be that people buying policies sold outside the exchanges cannot qualify for subsidies.

Researchers used health plan level data from the CMS Center for Consumer Information and Insurance Oversight (CCIIO) to look at market shares, medical loss ratios, changes to premiums and plan types, and risk selection. They found the following:

(Source: Michael McCue and Mark Hall “Promoting Value for Consumers: Comparing Individual Health Insurance Markets Inside and Outside the ACA's Exchanges,” The Commonwealth Fund, June 2016)

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CMS updates benchmark methodology and two-sided risk options for MSSP ACOs

Last week, CMS finalized regulations on the calculation of the benchmarks for accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP), making it easier for ACOs to generate shared savings. Throughout the comment period on the proposed rule, many ACOs asked CMS to include regional spending benchmarks that can be slowly incorporated over the upcoming program years. The final rule implements three key changes for MSSP ACOs that in response to concerns raised by ACOs: changes to the program’s benchmarking methodology, creating a new option for transitioning to performance-based risk, and clarifying timelines for financial reconciliation of shared savings or losses.

Incorporating regional FFS expenditures into the ACO’s benchmarking methodology may give ACOs more opportunities to generate shared savings. Similarly, the new option for transitioning from one-sided shared savings to a performance-based risk model may encourage organizations newer to accountable care models to move to more advanced tracks within the program.

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Big data and predictive analytics found more than $1.5 billion in inappropriate Medicare payments

CMS used predictive analytics technology on Medicare claims to find fraud, waste, and abuse among Medicare providers. The Fraud Prevention System (FPS) has helped the program save more than $1 billion between 2014 and 2015. CMS says that the FPS has found over $1.5 billion inappropriate Medicare payments since it started in 2011 through proactive identification of fraudulent providers and illegitimate payments.

A few examples of the FPS in action include:

Background: CMS has been using analytics to detect irregularities since the Small Business Jobs Act of 2010 required it to start using analytics to identify fraudulent payments. Offices within CMS, including the Center for Program Integrity and the Office of Financial Management, are known for their analytics use. CMS is taking steps to advance these efforts and using the Office of Enterprise Data and Analytics created in late 2014 to coordinate. Applying analytics to encounter data can help regulators discover many patterns, including anomalously high billing or prescribing rates, up-coding, and duplicative billing.

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Senate committee passes bipartisan Labor-HHS appropriations bill

Last week, the Senate Appropriations Committee approved a bill to fund the Departments of Labor, Health and Human Services, and Education and related agencies. This bill is generally referred to as the Labor-HHS Appropriations Bill. The bipartisan effort would authorize $161.9 billion in discretionary spending for fiscal year (FY) 2017.

The bill would:

  • Appropriate $76.9 billion to HHS, which is $1.4 billion more than FY2016. 
  • Increase by 93 percent funding to the US Centers for Disease Control and Prevention (CDC), Substance Abuse and Mental Health Services Administration (SAMHSA), and Health Resources and Services Administration for their opioid abuse programs. 
  • Dedicate $34 billion to the National Institutes of Health (NIH), a $2 billion increase over FY2016. The majority of the increase is intended for Alzheimer’s disease research.

The bill now awaits final approval from the Senate. The House Energy and Commerce Committee is expected to mark up a corresponding bill this week.

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On the Hill & In the Courts

CMS has a new demonstration to identify improper home health Medicare payments

Last week, CMS announced a new Medicare demonstration aimed at reducing Medicare fraud and improper payments with a focus on home health agencies (HHAs). The demonstration involves having HHAs submit claims to a third party before they are paid, called a “pre-claim review”. The demonstration is in Illinois, Florida, Texas, Michigan, and Massachusetts.

Under the demonstration, an HHA may submit a Request for Anticipated Payment (RAP) to an appointed Medicare Administrative Contractor (MAC). MACs will assess if the billed services comply with Medicare coverage and clinical documentation requirements. After review, the MAC may decline the payment request or submit it to Medicare for reimbursement. Three months after implementation, CMS will begin reducing payments for HHAs that do not submit their claims for pre-claim review. CMS says that the demonstration will help the agency achieve three goals:

CMS says that pre-claim review is different from traditional prior authorization process because it focuses on identifying services that are inappropriate and unnecessary. The demonstration, set to expire after three years, is part of the new CMS strategy to identify potential improper payments before the payments are made, instead of a reactive, “pay and chase” method of identifying fraud, waste, and abuse after the fact.

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Study: State prescription drug monitoring programs can help reduce the number of opioid prescriptions

Physicians’ likelihood of prescribing a Schedule II opioid – the subset of opioids that have the highest potential for abuse – during an office visit for pain treatment fell from 5.5 percent to 3.7 percent between 2001 and 2010, a 30 percent decrease. This is correlated with an increase in prescription drug monitoring programs (PDMPs), according to data from 24 states analyzed in a recent Health Affairs study.

Responding to the opioid abuse problem, states began implementing PDMPs in the early 2000s. These statewide databases use information from pharmacies on how many prescriptions of controlled substances are dispensed to help physicians identify patients who may be “doctor shopping” to get a non-medical opioid prescription. To date, all states except Missouri have these programs or have passed legislation to do so. In some states, prescribers, pharmacists, law enforcement agencies, and medical licensure boards can use the databases to analyze controlled substance prescriptions.

Using data from the National Ambulatory Medical Care Survey (NAMCS), a nationally representative annual survey of ambulatory visits, researchers assessed the effects of PDMPs on the prescribing of opioids and other pain medications in ambulatory care settings in 24 states from 2001 to 2010. For a control group, the researchers looked at prescribing patterns in states that had not yet implemented PDMPs. Noting that the impact of implementing a PDMP may not be immediate, they also considered whether the effects of a PDMP became stronger the longer a program was in effect. They found that PDMPs were associated with lower prescribing of Schedule II opioids, other types of opioids, and pain medication overall.

While PDMPs are one way that states can combat opioid abuse, further collaboration among federal and state government, health care providers, health plans, and life sciences companies may be needed to solve this problem nationwide (see the May 31, 2016 Health Care Current).

(Source: Yuhua Bao et al., “Prescription Drug Monitoring Programs Are Associated With Sustained Reductions In Opioid Prescribing By Physicians,” Health Affairs, June 2016)

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Around the Country

CMS announces education program for dual-eligibles in demonstration projects

CMS is providing states participating in dual-eligible demonstrations with updated consumer outreach tools to encourage dual eligibles (people with Medicare and Medicaid coverage) to participate in demonstration programs. Enrollment in these programs has been relatively lower than CMS initially projected.

The state demonstrations are working to lower costs and improve care for the dual eligible population. However, most participating states have high “opt-out” rates; many individuals who are eligible for the demonstrations are choosing not to participate. Responding to input and suggestions from dual-eligibles participating in demonstrations in three states, CMS is changing the format and content of outreach materials that health plans participating in the demonstrations – called Medicare-Medicaid Plans (MMPs) – will use in 2017.

CMS aims to make the information easy for plan members to understand and to increase the number of enrollees in the demonstration programs. The new format puts required action, dates, and contact information near the top and will use more bullets and white space for other information. Some stakeholders believe the changes will result in less confusion and increased enrollment, while others have criticized the new format as still being too technical and confusing.

Related: According to Health Management Associates, 27 percent of the eligible population in the 10 states that are participating in the dual demonstrations. The demonstration program is testing alternative care models for dual eligible beneficiaries. A recent Deloitte Center for Health Solutions analysis, Drilling down on dual eligibles, found that using advanced analytics on non-medical data may allow for a more nuanced understanding of high-risk patient populations, like dual eligibles, and help providers and health plans target interventions that improve care quality while controlling costs.

(Source: Virgil Dickson, Modern Healthcare, “CMS makes it easier for dual-eligibles to understand benefits of demos,” June 3, 2016)

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A different kind of mobile health is innovating care delivery

Experts often describe mobile health (mHealth) as the ability to access health care at one’s fingertips – on a mobile phone. Many consumers are using mHealth apps to make appointments, locate urgent care facilities or other providers in their network, pay a medical bill, fill a prescription, monitor their chronic condition or fitness levels, or communicate with their care team. But “mobile health” from clinics on wheels is another health care innovation.

Mobile health clinics are not new, but are experiencing a surge in popularity. A typical mobile health clinic involves patients getting in a van, RV, or bus to have basic preventive screenings, lab work, or consultation with a care team offering prevention and chronic care management. Some clinics have social workers, dentists, and psychologists, and provide postpartum care and services include cancer screenings and tobacco cessation counseling. The patients are often people who move around a lot and lack a medical home. Without the mobile clinic, they may end up in the emergency department (ED), which drives up costs.

Mobile Health Map, an online platform where the mobile clinic community can aggregate data and document the scope, geographic reach, and value of mobile clinic services, is a collaboration between researchers and the Mobile Health Clinics Association. The organization reports that around 2,600 mobile clinics in the US provide around 6 million annual visits. Some hospitals are investing in the clinics as part of their investment into preventive and chronic care. While building a mobile medical facility is a big investment, research shows it can save money in the long run if it gets patients the care they need and prevents complications and ED visits.

Many health plans are also investing in mobile health: Highmark recently launched a mobile clinic program in rural areas in Pennsylvania and West Virginia to increase access for about 5 percent of its members covered through Medicaid, Medicare Advantage, and exchange plans. The program targets at-risk members who forgo medical care. Highmark aims to better target the members purchasing plans through the exchanges, who have more costly health conditions than the plan anticipated. Ensuring these patients get preventive and chronic care management services may keep health care costs down. The health plan is starting small, with one mobile clinic, and will assess the program over time.

Analysis: Mobile clinics travel to urban and rural communities to provide convenient and accessible services to vulnerable populations. An article in the American Journal of Managed Care finds that these clinics operate in every state across the country and are often affiliated with hospitals, community health centers, or academic medical centers. While many are funded through philanthropy and state and federal grants, independent companies and private insurance providers are increasingly sources of financial support.

The article highlighted significant cost-savings, mostly in the form of avoidable hospital and ED visits, from the use of these clinics. One study showed that the improved hypertension control was associated with a lower-bound return on investment estimate of 1.3 due to avoided ED visits. Another study showed mobile clinics increased medication adherence and decreased ED visits, hospitalizations, and school absenteeism for children with asthma and saved $3,500 per child from improved asthma control. A study that aggregated data from 10 large mobile clinics estimated cost savings of $6.8 million from avoidable ED visits over a 1-year period.

As health plans and providers continue to create innovative prevention and chronic care management strategies and try to decrease hospital admissions and ED visits, they might consider both kinds of “mobile health” strategies.

(Sources: Caterina F. Hill et al, “Mobile health clinics in the era of reform,” American Journal of Managed Care, March 20, 2014; Highmark, “Highmark’s doctor’s office on wheels connects doctors and nurses with members who face barriers getting to the doctor, May 12, 2016; Mobile Health Map,

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Breaking Boundaries

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