Perspectives

Health Care Current: March 1, 2016

Can technology-enabled home health provide care and convenience?

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.

Can technology-enabled home health provide care and convenience?

I embrace technology to the point that my home mirrors the International Space Station. I can remotely adjust its systems, assess its inhabitants (both two- and four-legged), and order supplies that are unlikely to be obtained if not delivered right to my house.

Whether driven by convenience, cost, or safety, all of these capabilities have been transformative. I can set or adjust elaborate temperature zones, lock or unlock doors, control alarms and appliances, and see who my dog Tarot is barking at. I also can tell when people arrive and leave and locate my kids.

The house isn’t the only thing I monitor – I can also assess my family’s health. All of us have wearable devices that monitor our exercise, providing extensive data on routes and performance. Even Tarot has one, helping us determine if he has had enough activity during the day to sleep well at night. Groceries and other household goods get delivered on schedule based upon our historic usage, which helps us make better eating decisions the more we order healthy food.

All of these innovations have given us a level of insight and capability we could not have imagined even a few years ago. At the same time, each raises privacy concerns.

So why do we do it? Because we get something out of it.

As technology continues to advance, an increasing number of health care services traditionally provided in a hospital or physician’s office will be available in the home. One question remains, “How quickly will consumers adapt and accept new technologies that bring care into their home?” This is the question the Deloitte Center for Health Solutions explored in Technology-enabled home health: Are consumers ready? Through a series of focus groups, our researchers sought to better understand consumers’ opinions about health care outside of traditional settings and the technology that may support bringing it into the home.

The study looked at consumers’ views of using tech-enabled home health solutions to manage chronic conditions, including self-care, clinical data transmission, interaction between healthy or unwell patients and their care teams, and personalized reminders about diet and exercise. In general, consumers are optimistic about using technology to facilitate home health care.

However, consumers raised some concerns about how technology tools would affect their privacy. Less-intrusive sensors that offer benefits, like stove burner controls or fall detection, are welcome. But, sensors that monitor an individual’s sleep quality, motion patterns at home, or bathroom usage face more resistance. After participants discussed and learned about some of the clinical justifications for these sensors, many of those who opposed often reconsidered their original views.

As more care moves to self-care, consumers want to have influence and control over their health information and journey. The consumers we talked to seemed to have sophisticated opinions about using technology-enhanced tools to promote healthy living. They saw benefits and risks from technology-enabled self-care in the four broad categories of nutrition, physical activity, prevention, and dealing with an acute episode.

For example, the participants in the focus groups generally favored the concept of ready-to-cook ingredients for healthy meals. Like me, many people find themselves without the time to plan meals, go to the store to find all of the ingredients, and then prepare them at home. Most people would prefer to eat healthier, and many like the idea of making it easier and more convenient to do that.

Many of the participants felt positively about using devices to monitor physical activity. However, some consumers, particularly women and individuals age 45-64, often feel discouraged after seeing how they compare to others. Using health coaches to encourage the use of preventive services like vaccines and health screenings received mixed reviews from the focus groups. Some of our respondents said they would find it helpful, while others said they would feel like they just got another person that would nag them about things they already knew they should be doing.

Finally, when managing acute needs, many of the participants liked the idea of using telemedicine options – particularly when traveling. A few expressed concerns about not knowing the credentials of a new telemedicine doctor and said they would rather use telemedicine services through a doctor they already had a developed relationship with.

Though consumers are open to adopting new technology, they have some reservations. Successful technology-enabled home health care may depend on sustained consumer and provider engagement. Companies interested in moving into home health will need to acknowledge the personal nature of health care and work to improve communication between stakeholders (i.e., share fitness and home-monitoring data with providers), acknowledge the evolving models of care teams, and note that different consumer segments use technology differently and that consumer engagement will be key to success in the home health model.

As I get older, I expect to leverage technology to support my health in the same way that I use it now to support my home and fitness. Through biosensing wearables and other in-home monitoring devices, I hope to have a clear view into changes in my health and enjoy tools that support me in caring for any condition I might have, automate scheduling, and deliver necessary drugs and services. And, as the nature of the information being shared becomes more personal, I will also expect a much higher level of care and convenience in order to make the privacy trade-off worthwhile.

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My Take

By Harry Greenspun, MD, Director, Deloitte Center for Health Solutions, Deloitte LLP

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CMS: Federal exchange enrollees must submit proof for special enrollment periods

Last week, the US Centers for Medicare and Medicaid Services (CMS) announced it will start verifying eligibility for individuals who apply for a special enrollment period (SEP) on the federal exchange. In the 38 states using the HealthCare.gov platform, people who apply under certain SEPs will need to show documentation to prove that they qualify. SEPs allow individuals to sign up or adjust their coverage outside of the annual open enrollment period.

CMS will require documentation for the following qualifying events:

According to CMS, these qualifying life events made up over three quarters of all qualifying life events for SEPs in the second half of 2015. After consumers submit the appropriate documentation, CMS will check the documentation using a system similar to that used by the Internal Revenue Service (IRS). CMS will follow up with applicants where the documentation raises issues.

Background: Recently, many insurance companies have expressed concern about the many qualifying life events and lax enforcement. A key concern is that the more than 30 SEPs have led to instability in the market and allowed many consumers to sign up for coverage only after they got sick (with some dropping their plan soon after they received the care they needed). In January 2016, CMS eliminated six SEPs and took initial steps to increase enforcement (see the January 26, 2016 Health Care Current). This documentation process is another step CMS is taking to improve the federal exchange and create more stability for insurers.

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Implementation & Adoption

Fewer health care IT leaders expect to spend more on information technology this year, but information security spending is expected to grow

According to a recent survey by TEKsystems, health information technology departments plan to spend less in 2016 because their organizations are more confident about being able to meet organizational demands and federal requirements under the electronic health record (EHR) incentive program. The decrease in projected spending may mean that many health care organizations are more focused on leveraging the systems they have purchased in recent years over purchasing additional capabilities. Only 41 percent of surveyed IT leaders are expecting their budgets to increase in 2016; this was 51 percent last year. A major focus for spending will be on information security.

Key findings include:

(Source: TEKsystems, “2016 Annual IT Forecast,” 2016)

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Most uninsured filed for an exemption to the individual mandate for 2015

Last week, TurboTax reported that almost three-in-four uninsured individuals who filed taxes with its company claimed an exemption from the individual mandate tax penalty as of January 31, 2016. Most of these individuals cited financial limitations and other hardships, including eviction or recent death of a close family member, as reasons for filing an exemption.

The IRS estimated that 300,000 individuals who paid the penalty likely qualified for an exemption last year when the penalty for going without coverage was $325 or 2 percent of household income. This year, the health insurance penalty has almost doubled to $695 or 2.5 percent of household income, whichever is greater. However, a recent survey from the Kaiser Family Foundation (KFF) found that few uninsured people understand this; only 1 percent of the respondents said they knew there was a fine for people without coverage. Only 15 percent of the uninsured said they knew that the deadline to enroll in coverage was January 31, 2016.

KFF estimated that approximately 3.5 million uninsured individuals are eligible for insurance subsidies to help pay for coverage. The group also found that for many, purchasing a plan could be cheaper than going uninsured and paying the penalty.

(Source: Intuit TurboTax, “70 Percent of Uninsured Taxpayers Claim Health Care Exemption Saving up to $1000,” February 23, 2016)

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Report: 340B hospitals spend less per beneficiary than non-340B providers

340B hospitals spend less on beneficiaries than hospitals and physicians’ offices participating in Medicare Part B, according to a recent analysis by Dobson DaVanzo & Associates, LLC. 340B Health, an advocacy group for more than 1,000 hospitals and health systems that participate in the 340B program, commissioned the report. The 340B program allows eligible providers to purchase drugs at discounted rates. Most eligible providers are hospitals that serve a large proportion of low-income individuals.

This analysis comes after the Government Accountability Office (GAO) found that hospitals that participate in the 340B drug program have higher per beneficiary Medicare Part B drug spending on average than hospitals that do not participate in the program (see the July 14, 2015 Health Care Current). According to GAO, this difference may mean that 340B hospitals are prescribing more drugs and/or more costly drugs than their non-340B counterparts. However, the researchers say that the GAO analysis only accounted for 18 percent of Part B spending because it focused only on hospitals and did not take into account spending in physicians’ offices (physicians do not qualify for discounts under the 340B program). Incorporating spending for Part B drugs in physicians’ offices into the analysis changed the results: Spending in 340B hospitals was $112.15 on average, while spending in non-340B hospitals and physicians’ offices was $128.91 on average. This pattern of lower spending for 340B hospitals also tended to hold true for 32 of the 50 most expensive drugs.

Related: According to Apexus, the company designated by the Health Resources and Services Administration (HRSA) as the 340B Prime Vendor, purchases made under the 340B program reached $12 billion in 2015. This is 67 percent higher than in 2013 when it was $7.2 billion, and 400 percent higher than a decade ago. Drug Channels analyzed Apexus’s data and found that 340B hospitals receive discounts on 44 percent of their drug purchases. For these hospitals, spending for 340B drugs has grown more quickly than spending on other drugs.

Medicare payments to 340B hospitals do not reflect any 340B discounts. GAO suggests that hospitals may thus be able to gain financially from participating in the 340B program and even be inclined to over-prescribe and prescribe more expensive drugs. Incentives to overuse drugs could harm the Medicare program and Medicare beneficiaries, who might pay more cost-sharing for these drugs and receive unnecessary care.

(Source: Dobson DaVanzo & Associates, LLC, “Analysis of Separately Billable Part B Drug Use Among 340B DSH Hospitals and Non-340B Providers,” February 10, 2016; Drug Channels, “340B Purchases Hit $12 Billion in 2015—and Almost Half of the Hospital Market,” February 23, 2016)

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Study: Decline in readmissions not due to shifting to observation stays

Recent research published in the New England Journal of Medicine found readmission rates have truly declined since the Affordable Care Act (ACA) passed, and the reduction is not an artifact of higher use of observation stays.

Policymakers and other stakeholders have seen hospital readmissions decline since Medicare started penalizing hospitals for higher-than-average rates of readmissions in the Hospital Readmissions Reductions Program (HRRP). However, some believe the rise in rates of observation stays might account for some of the change, since observation stays do not count as admissions or readmissions. The Wall Street Journal’s analysis of Medicare billing data found that readmission rates for 10 percent of acute care hospitals in the US declined 14 percent from 2010 to 2013 (see the December 8, 2015 Health Care Current). In the meantime, observation stays increased 156 percent, which accounted for an estimated two-thirds of the reduction in readmission rates.

The researchers sought to determine whether the decline in readmissions was linked to this increase in observation stays. They looked at Medicare Part A and B claims data for patients who had one of the three HRRP diagnoses and identified readmissions that happened within 30 days of discharge. They also looked at whether patients used observation services during the 30 days after discharge. They found:

  • Overall readmission rates fell immediately after the ACA passed in 2010, both for conditions included in the HRRP and in general
  • Readmission rates for HRRP conditions declined more quickly than for other conditions
  • Observation stays for both HRRP and non-HRRP conditions increased
  • Within hospitals, increases in observation stays were not associated with decreases in readmissions

Notably, observation stays were increasing before the ACA passed, and the researchers found no significant change in the growth rate after it passed.

Background: Hospital readmissions cost Medicare $17 billion in avoidable expenditures. The ACA created the HRRP, which penalizes hospitals with higher than average readmissions for certain conditions. Starting in 2013, hospitals with high readmissions for acute myocardial infarction, heart failure, and pneumonia were penalized 1 percent of their payments. The penalty is now 3 percent.

(Source: Rachael B. Zuckerman, et al, New England Journal of Medicine, “Readmissions, Observation, and the Hospital Readmissions Reduction Program,” February 24, 2016)

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New tools from CMS will aid in research and fraud prevention

CMS recently released two new public data files to help improve care delivery through data sharing and transparency. The first dataset provides information on Medicare beneficiaries’ use of ambulance and home health agency (HHA) services. The second lists all approved providers and suppliers for the Medicare fee-for-service program.

Moratoria Provider and Supplier Services and Utilization Data Tool: This tool contains ambulance and HHA claims data for Medicare fee-for-service beneficiaries. It allows users to see the number of Medicare providers at national, state, and county levels through interactive maps and datasets. In addition, the tool can guide CMS to decide which geographic areas may be chosen for a moratorium on new provider and supplier enrollments.

Public Provider Enrollment Files: The Public Provider Enrollment Files contains a portion of data from Provider Enrollment, Chain, and Ownership (PECOS). It includes providers' names and group affiliations for all fee-for-service Medicare enrolled providers and suppliers. CMS aims to equip providers, suppliers, state Medicaid programs, health plans, and other stakeholders with Medicare Provider Enrollment data that can be leveraged in different settings, including for research.

CMS said that the enrollment moratoria and new data files can address fraud, safeguard taxpayer dollars, and protect beneficiaries.

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On the Hill & In the Courts

GAO recommends changes to Medicaid funding formula

A recent GAO report offers suggestions to improve the Medicaid funding formula to better target financial need for federal funding. The report addresses the calculation of the federal share of funding to each state, known as the federal medical assistance percentage (FMAP). The FMAP compares a state’s per-capita income with the federal per-capita income. The federal government thus pays a higher share to poorer states. State FMAPs currently range from 50 percent, the statutory minimum, to 74.6 percent in Mississippi. The ceiling for the FMAPs is 83 percent.

GAO found that per-capita income does not properly assess the size of the state’s population in need of Medicaid services. Two states with similar per-capita incomes can have substantially different numbers of low-income individuals. To better assess a state’s funding needs, GAO recommends revising the FMAP to incorporate measures that reflect demand across the state, geographic cost differences, and state resources.

GAO recommended adjusting federal funding to states to be timelier by incorporating trends in monthly employment data that signal an economic downturn. The formula GAO suggests relies on a ratio of monthly employment-to-population.

(Source: Carolyn L. Yocom, GAO, “Changes to Funding Formula Could Improve Allocation of Funds to States,” February 10, 2016)

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More than half of states have at least 50 percent of Medicaid enrollees in managed care

Of 62.2 million Medicaid beneficiaries nationwide, more than half (56.3 percent) were in a Medicaid managed care (MCO) plan as of July 1, 2013. America’s Health Insurance Plans (AHIP) recently looked at enrollment trends and MCOs in 36 states, the District of Columbia and Puerto Rico. State enrollment varies, with 14 states having no enrollment in MCOs:

Since 2013, many states have expanded their Medicaid managed care programs. Many enrollees joined Medicaid when eligibility was expanded in 2014, and many states use managed care arrangements for their expansion population. States are increasingly having MCOs manage the care of beneficiaries with complex needs, including individuals with disabilities and individuals who require long-term services and supports. Because of these expansions, enrollment in MCOs has likely increased in recent years.

AHIP’s study cited a number of examples to demonstrate the quality and cost of care provided through MCOs. These examples include chronic disease management for children with asthma. A study in Massachusetts found better quality scores for MCOs than for care provided in the fee-for-service program. In states where pharmacy benefits were included with Medicaid health plan benefits, prescription drug costs were 14.6 lower than in other states.

Analysis: Medicaid managed care is expected to continue to grow. This report came out shortly after the Office of Management and Budget began reviewing a final rule on federal Medicaid managed care regulations. The rule is broad in scope, and health plans have been monitoring its release for months after CMS published the proposed rule in June 2015 (see the June 2, 2015 Health Care Current). Stakeholders are waiting to see whether the federal government will finalize the proposed policies, including adding a medical loss ratio requirement of 85 percent, requiring states to establish network adequacy standards and to enhance transparency around rate setting, and creating a national quality rating system for Medicaid MCOs.

(Source: “Medicaid Health Plan Enrollment and Participation Trends,” AHIP, February 2016)

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Around the Country

Few hospitals can relay pricing information when asked by potential patients despite state laws requiring it

A recent survey of US hospitals found that many consumers have difficulty obtaining price information for routine health care services. The study, conducted by the Pioneer Institute, evaluated 54 hospitals in six metropolitan areas across the US. Participants in the study acted as “secret shoppers” and tried to get price information by calling hospitals and asking for the price of an MRI of the left knee without contrast. Few of the hospitals were prepared to handle requests like this. Where secret shoppers were able to get the information, they reported large variation in prices for the procedure.

(Source: Barbara Anthony, Pioneer Institute, “Healthcare Prices for Common Procedures Are Hard for Consumers to Obtain: Survey finds hospitals not prepared to give price information to consumers,” February 21, 2016)

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Virtual reality could play a role in treatment for depression

A recent proof-of-concept study on immersive virtual reality demonstrated that it may help people be less critical and more compassionate toward themselves and ultimately may help reduce depression. The small study of 15 individuals found positive results in decreasing self-criticism and improving self-compassion in patients with depression.

Researchers from the University College London and University of Barcelona developed a brief scenario in which patients wore a virtual reality headset and practiced acting compassionately toward an avatar who was self-criticizing. After that exercise, the patients practiced a similar act of showing compassion to their own avatar. Seeing a virtual body in a mirror moving along with their own can produce an illusion that the avatars are their own body—a process called embodiment. Participants had three repetitions of this scenario in weekly intervals, which resulted in significant reductions in depression severity and self-criticism and a significant increase in self-compassion from baseline to the four week follow up. Four of the patients also showed clinically significant improvement.

Interventions using immersive virtual reality might have clinical impact in the treatment of depression, but larger-scale studies are needed to confirm these results.

Analysis: In health care, virtual reality has been used to support clinician training, such as in surgery simulation. Virtual reality has the potential to be a disruptive technology in health care, with wider applications and uses. Recent marketing of lower-cost virtual reality systems for consumers (mainly for gaming) mean that access could increase. Past studies have shown positive impact in patients being treated for alcohol addiction and behaviors to improve wellness, such as weight management and smoking cessation.

Innovators in the field will likely need to demonstrate clinical effectiveness through rigorous clinical trials. Virtual reality might be integrated with technologies such as artificial intelligence, increasingly sophisticated bio-sensors, and increased computing power.

(Source: Caroline J. Falconer et al, British Journal of Psychiatry, “Embodying self-compassion within virtual reality and its effects on patients with depression,” February 2016)

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Breaking Boundaries

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