Health Care Current: May 19 2015 | Deloitte US | Center for Health Solutions | Life Sciences has been added to your bookmarks.
Health Care Current: May 19, 2015
Old habits die hard: Accommodating the newly insured
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.
- My Take
- Implementation & Adoption
- On the Hill & In the Courts
- Around the Country
- Breaking Boundaries
Old habits die hard: Accommodating the newly insured
They say that old habits die hard. Who are “they”? They are the retired executives who still wake up at 5 a.m. to read the paper front to back while enjoying a cup of coffee. They are the parents who continue to remind their fully grown, adult children to eat their vegetables. They are also many of the previously uninsured who, once they’ve gained insurance coverage, continue to visit emergency departments for their regular care.
This resistance to change was the subject of a recent op-ed that appeared in The New York Times. In it, Ezekiel Emanuel referenced a new study by the American College of Emergency Physicians. The study found that three-quarters of emergency physicians have seen increases in patient visits since the Affordable Care Act (ACA) passed.1
Emergency physicians aren’t the only ones feeling the pressure. The Deloitte Center for Health Solutions 2014 Survey of US Physicians shows that 44 percent of physicians are treating more newly insured patients. The effects are felt differently depending on physician specialty: primary care physicians (PCPs) are more likely to report seeing increases in newly insured patients (56 percent) than are surgical specialists (40 percent), non-surgical specialists (38 percent) and other physicians (33 percent).2
As outlined in the recent Expanding coverage: How primary care physicians are accommodating the newly insured report, among the PCPs who are seeing an increase in newly insured patients, many report the patient influx is straining resources.
Source: Deloitte Center for Health Solutions, 2014 Survey of US Physicians
While opponents of the ACA may view this as a failure of its policies, I’m in the same camp as Dr. Emanuel. I believe that people will continue acting on old habits, seeking care where it is familiar to them, until something or someone educates them on alternative options that exist.
That is why it’s not enough to stop at the coverage expansion; health insurance coverage does not equal health literacy. Dr. Emanuel references some of the programs that have attempted to curb this trend. The collaborative between Group Health Cooperative of Puget Sound and SEIU Healthcare NW Health Benefits Trust is just one example of the larger issue at hand: patient engagement and education should go hand-in-hand with increased access to health insurance coverage and health care services.
Moreover, Deloitte’s findings from the forthcoming 2015 Survey of US Health Care Consumers suggest that consumers may be more ready to do this than many previously thought. Many consumers are interested in comparing health plans, providers and services based on cost and quality. And, one in five is interested in using a website, mobile app or personal medical device to learn more about or choose between different treatment options.
In order to advance patient engagement, where can organizations begin? Health plans and health systems are looking at how to use technology and social media to reach out to patients to help them navigate their health services. Not everyone is technologically enabled, and sometimes marketing and outreach campaigns can raise awareness. It is a process of ongoing education that needs to be easy to access and culturally sensitive. Those providing hands-on primary care also have an important role in helping the newly insured better understand how to maintain good health and, when they are not well, how to best access services appropriately. Together, these efforts should not only reduce inappropriate utilization of emergency services, but they should also enable healthier populations.
Allowing mid-level providers to practice to the top of their license may also help. We’ve already seen what can happen when these initiatives are enacted. In Kentucky, shortly after the state expanded Medicaid, the expansion population was using PCP services 55 percent more than the traditional Medicaid population.3 To alleviate the pressure on PCPs, the state legislature expanded nurse practitioners’ scope of practice, allowing them to assist with care coordination and chronic disease management.
As a physician, I know that arming PCPs with care coordination tools and chronic care management capabilities could also help move the needle on patient engagement. Ultimately, once patients become fully aware of the myriad options they have to receive care, I believe they will begin to make wiser choices around when and where they seek that care. At that point, maybe they’ll be able to finally say they kicked their old health care habits.
PS. In observance of the Memorial Day holiday, the Deloitte Center for Health Solutions will not publish a Health Care Current on Tuesday, May 26, 2015.
1 Emanuel, Ezekiel, “How to solve the ER problem,” New York Times, May 6, 2015; American College of Emergency Physicians, “ER visits continue to rise since implementation of Affordable Care Act,” May 4, 2015
2 Other physician type is comprised of Anatomic/Clinical Pathology, Occupational Medicine, Public Health and General Preventive Medicine, and Other (i.e., some other specialty not listed).
3 Deloitte, Commonwealth of Kentucky Medicaid Expansion Report, February 2015
By Mitch Morris, MD, Vice Chairman, National Health Care Providers Lead, Deloitte LLP
GAO: Five percent of Medicaid enrollees account for half of program’s spending
A report from the Government Accountability Office (GAO) found that only 5 percent of Medicaid beneficiaries account for nearly half of the total expenditures for the program. In addition, the analysis found that:
- The most expensive 1 percent of enrollees account for about 25 percent of all expenditures
- The costliest 25 percent represent more than three quarters of expenditures
- The majority of the high-cost enrollees are disabled
- The least expensive 50 percent of enrollees represent less than 8 percent of all expenditures; approximately 12 percent of enrollees cost the program nothing
In each state, the GAO found that the costliest 5 percent account for a high share of spending. However, the exact figures range from 28.8 percent in Tennessee to 63.2 percent in California. The GAO’s analysis excluded the dual eligible population – those enrolled in both Medicaid and Medicare – a group known for its high expenditures. It drew on spending and claims data from fiscal years 2009 to 2011. The findings of this report are in line with what previous studies of health care spending have found. The GAO specifically cited a 2005 Congressional Budget Office (CBO) study on Medicare spending and a 2006 Kaiser Family Foundation study on Medicaid enrollees.
Background: Medicaid covers approximately 72 million Americans and spent $460 billion in 2013. Earlier this year, CBO estimated that Medicaid could insure about eight million more people by 2016 as a result of the coverage expansion under the ACA. State governments have considerable autonomy in their Medicaid programs. The study notes that eligibility and coverage of additional services beyond the federally required minimum varies widely across the nation, which likely accounts for the wide disparity in spending among the states.
(Source: GAO, “Medicaid: A Small Share of Enrollees Consistently Accounted for a Large Share of Expenditures,” May 2015)
Implementation & Adoption
2014 Medicare telemedicine payments less than $14 million
Medicare paid nearly $14 million in telemedicine claims in the past year, according to data from the US Centers for Medicare and Medicaid Services (CMS). While telemedicine spending has increased at a steady pace since 2008, total spending for telemedicine services remains a small portion of overall Medicare spending – less than one hundredth of one percent. The figure is also lower than CBO analysts estimated. In 2001, the CBO projected that Medicare would spend $150 million on telemedicine services over five years. However, the prediction was much higher than the actual results: CMS has spent just over $57.6 million on telemedicine services during that period, less than 40 percent of what CBO projected.
Related: One way in which telemedicine is encouraged or limited is through policies at the state level. One example of a recent policy to limit telemedicine was highlighted in the April 21, 2015 Health Care Current. The Texas Medical Board decided to restrict telemedicine practice, a decision supported by many physicians groups. The change in Texas did not ban telemedicine but clarified that physicians were required to have an established relationship with patients prior to giving a diagnosis or prescribing drugs. It also clarified that communication exchanged online or over the phone was insufficient to establish such a relationship. The decision in Texas stands in contrast to moves from other states (e.g., Idaho and Utah) to simplify physician licensing and encourage telemedicine.
Survey: Data breaches are costing the health care industry $6 billion per year
Ninety percent of health care organizations have experienced at least one data breach in the past two years. This has cost the health care industry an estimated $6 billion annually, according to Ponemon Institute’s fifth annual Privacy & Security of Healthcare Data study.
A single electronic security breach results in an average cost of $2.1 million to a health care organization, the report found. One incident can leave information vulnerable to exposure, theft or exploitation. Despite this, 56 percent of organizations do not believe they have adequate funding or resources to properly respond to these incidents. Notable findings from the survey of 90 health care organizations (which includes providers, government agencies and insurers) are provided below:
Background: The Health Insurance Portability and Accountability Act (HIPAA) Omnibus Final Rule requires health care organizations to submit a four-part risk assessment after each electronic security incident. However, only 50 percent of survey respondents follow this procedure. Although awareness of the threat to patient data has increased significantly among health care organizations over the past five years, greater investment in proper resources and reinforcement of appropriate employee protocol could be helpful in ensuring vigilant, secure and resilient health information exchange.
(Source: Ponemon Institute LLC, “Fifth Annual Benchmark Study on Privacy & Security of Healthcare Data,” May 2015)
Study: More comprehensive family medicine could reduce Medicare costs
A study published in the Annals of Family Medicine found that comprehensive care provided by family physicians can translate to cost savings in Medicare. It also found that more comprehensive care is associated with fewer hospitalizations. Researchers measured comprehensiveness by looking at physician procedure codes (e.g. eye, ambulatory or oncology procedures) in Medicare Parts A and B claims data from more than 3,600 family physicians and 555,000 Medicare beneficiaries.
Through examining the practices of this large, nationally representative sample of family physicians, the researchers found that patients of family physicians who reported performing and who billed for a broader range of services had lower costs and fewer hospitalizations. The researchers also learned that more comprehensive care is associated with lower average spending per beneficiary in Medicare Parts A and B. Patients with more comprehensive care from family physicians had expenses that were 10.3 percent lower than patients who got less comprehensive services.
(Source: Bazemore, Andrew, Petterson, Stephen, Peterson, Lars, Phillips, Robert L., “More Comprehensive Care Among Family Physicians is Associated with Lower Costs and Fewer Hospitalizations,” May 2015)
Emergency physicians believe the ACA has increased patient volume
A recent survey of members of the American College of Emergency Physicians found that emergency department (ED) physicians report seeing more patients since January 1, 2014, when the ACA’s coverage expansion took effect. These results indicate that despite expanded insurance coverage, the law has not lowered use of ED services. The survey sampled more than 2,000 emergency physicians across all 50 states and found that:
Analysis: Out of the 10 busiest EDs in the US, seven saw increases in patient visits since 2012, with a higher increase in states that opted to expand Medicaid over those that did not. This suggests that the protection from high health care bills that health plans bring lowers the threshold for the newly insured to seek medical care. It also suggests that newly insured consumers are not changing past behaviors and are continuing to view EDs as their primary means to access care.
Deloitte’s recent report, Expanding coverage: How primary care physicians are accommodating the newly insured, examines the impact of millions of newly insured Americans on the country’s health systems. The report identifies several ways to help move patients away from high-cost EDs to primary or urgent care centers:
- Medicaid and marketplace plans should work to educate enrollees on the availability and value of seeking health care services in a primary care setting
- Continued oversight of narrow health plan networks, especially in marketplace plans, which may contribute to the increased demand that some physicians have seen
- Higher payments for primary care physicians, which may enable practices to hire more mid-level providers, which could in turn help meet patient demand
(Source: Marketing General Incorporated, “2015 ACEP Poll Affordable Care Act Research Results,” March 2015)
Report analyzes drivers of high drug spending
In 2014, an estimated 576,000 Americans had annual prescription drug costs in excess of $50,000, and almost 140,000 had costs over $100,000, according to an analysis published last week from Express Scripts. The number of Americans spending more than $100,000 per year is almost triple the figure in 2013. The report had some other noteworthy findings and recommendations to reduce expenses:
Express Scripts based the analysis on the pharmacy claims data of over 31 million insured Americans, which included consumers insured through Medicaid, Medicare and commercial health plans. The data did not include additional medications dispensed in a medical setting such as a hospital, which would not be billed through pharmacy coverage.
(Source: Express Scripts, “Super Spending: U.S. Trends in High-Cost Medication Use,” May 2015)
Senate Finance Committee holds hearing on chronic care in Medicare
Last Thursday, May 14, the Senate Committee on Finance held a hearing to determine how well care coordination initiatives in Medicare are working. These initiatives aim to improve the quality of care received by Medicare beneficiaries with multiple chronic conditions. During his opening statement, Chairman Orrin Hatch announced the formation of a bipartisan committee working group to address chronic care reform. This working group is tasked with conducting analysis on the issues surrounding chronic care and providing legislative recommendations.
The committee heard testimony from two witnesses: Dr. Patrick Conway, Acting Principal Deputy Administrator and Deputy Administrator for Innovation and Quality and the Chief Medical Officer for CMS, and Dr. Mark Miller, Executive Director for the Medicare Payment Advisory Commission (MedPAC). Dr. Conway highlighted successful CMS initiatives for Medicare beneficiaries with from multiple chronic conditions. One such initiative was the Pioneer Accountable Care Organization (ACO) program which made headlines earlier this month for saving Medicare more than $384 million in two years (see the May 12, 2015 Health Care Current).
Dr. Miller provided policy recommendations to the committee. MedPAC has recommended that primary care clinicians be paid per beneficiary and not per visit, as they are today. He suggested that this payment would support care coordination and be a patient-centered approach. Both witnesses identified opportunities in Medicare Advantage, fee-for-service and ACOs to improve chronic care.
On the Hill & In the Courts
Updated 21st Century Cures bill includes language on interoperability and telehealth
Last week, the House Energy and Commerce Committee released an updated draft of the 21st Century Cures bill that was moved to full committee in a unanimous vote. It includes updated language on two provisions that stakeholders have been tracking: interoperability and telehealth.
The interoperability provision would aim to bar electronic health record (EHR) vendors from prohibiting data exchange across systems. The bill would:
- Require US Department of Health and Human Services (HHS) to collaborate with a charter organization to assess the state of interoperability in the US health care system
- Require HHS to publish a report on the charter organization’s findings by July 2016
- Create a compliance program for software vendors, which would require them to attest that they share information on the cost of data transmission to their purchasers, do not have barriers to sharing information and satisfy HHS standards around “everyday” data exchange
Vendors that do not attest to these elements by January 2018 could lose certification for the Meaningful Use EHR Incentive Program. Hospitals and physicians would be unlikely to use products that do not have this certification.
The draft also includes telehealth provisions, which would require CMS to report on Center for Medicare and Medicaid Innovation models and projects that are examining the use of telehealth services, send Congress information on how telehealth may improve care quality and efficiency for dual eligibles and identify services that might be suitable for telehealth.
Related: The American Medical Association (AMA) responded to the first draft of the bill, encouraging CMS to promote interoperability among EHR vendors. In the letter, the AMA emphasized that “information stored and exchanged in the EHR is not in a usable format for quality improvement and lacks standardized data elements, data formats and definitions.”
Study suggests the closing of some hospitals does not adversely affect health
One hundred and ninety five hospitals closed between 2003 and 2011. Health Affairs published a study evaluating what happens to patient mortality rates when hospitals closed in their communities. Unexpectedly, researchers found that the mortality rate decreased for Medicare beneficiaries in these hospital services areas (HSAs).
To evaluate the effect of hospital closures, researchers started with 195 closures between 2003 and 2011. They compared changes in annual mortality rates for patients in areas with closures to annual mortality rates in areas without closures. The mortality rate fell slightly in HSAs the year after a hospital closed, though this change was not statistically significant. Additionally, there was no significant difference in the inpatient admission rate or inpatient costs per beneficiary. Finally, the study noted that HSAs with closures saw lower readmissions compared with the control group.
Overall, the researchers found no evidence that hospital closures contributed to worse outcomes for patients in those communities. The researchers note that these findings reassure policy makers and clinicians who are concerned about the potential acceleration of hospital closures. The authors noted some limitations to the study, including the inability to control for all confounders from administrative data and the ability to generalize from Medicare data.
Analysis: To cover the costs of expanding Medicaid and marketplace insurance subsidies, the ACA has reduced growth in hospital spending, including for the disproportionate share and graduate medical education programs. Advocates and policy makers have expressed concern that lower payments to hospitals will lead to a reduction of hospitals and access to care.
While this study did not examine how hospital closures affected access, the authors suggest that when a better performing hospital is nearby, patients may actually be better served by the closure of a lower-quality hospital. Of the hospitals that closed, the majority were small, for-profit hospitals struggling financially. They were more likely to be in the South and Northeast and faced competition from other hospitals. Rural hospitals often receive cost-based payment from CMS as critical access hospitals, which the study’s authors noted can be helpful.
Related: A recent report examines drivers for rapid health system consolidation, projections for how many health systems may consolidate and what the future consolidated world may look like. Using three approaches, Deloitte modeled an estimate of potential outcomes. All three estimates independently converged at a similar outcome: 50 percent of current health systems will likely remain in 10 years. In the face of potentially rapid consolidation, hospital executives should consider a number of strategies and possible paths (see The great consolidation: The potential for rapid consolidation of health systems for more information).
(Source: Joynt, Karen E., Chatterjee, Paula, Orav, John E., and Jha, Ashish K, “Hospital closures had no measurable impact on local hospitalization rates or mortality rates, 20113-2011, Health Affairs, May 2015)
Around the Country
Study: Knee replacement surgery most common procedure for newly insured patients in Kansas
Research from the Society of Actuaries found that knee replacement surgery has been the most common medical procedure that newly insured individuals have voluntarily undergone since gaining their insurance coverage. The study aimed to determine how the ACA’s coverage expansion is influencing patients’ utilization of costly health care procedures, in particular, “preference-sensitive” procedures – those where legitimate treatment options exist and there are tradeoffs in outcomes and costs.
The researchers examined claims data from commercial health plans in the Kansas All-Claims Payer Database. The claims were for the first quarter period of 2014. The analysis compared a cohort of newly insured individuals (coverage beginning on or after January 1, 2014) with claims from individuals with continuing coverage (coverage prior to January 1, 2014). Newly insured individuals were more likely to opt for a preference-sensitive treatment, and this group was more costly overall than those with continuing coverage.
These findings suggest a pent-up demand for health care among the newly enrolled population. Pent-up demand is the temporary surge of health care utilization that generally subsides to a more consistent and long-term trend of utilization. The Society of Actuaries will conduct more analysis on this topic with data from the remainder of 2014 to understand if pent-up demand did in fact occur.
(Source: Owen, Rebecca, Daniel, Maeng, Society of Actuaries, “Indications of Pent-up Demand: New ACA enrollee use of preference-sensitive services,” April 2015)
Telehealth shows promise in improving care and lowering cost for burn treatment
Teleburn is an emerging telemedicine specialty that connects hospitals and clinics to specialty burn centers. As burn centers continue to consolidate into regional centers of excellence, teleburn can help fill the gap in diagnosis and treatment of burns. Advances in digital health and smartphone cameras are making teleburn possible because high quality images can be transferred from outlying centers to specialists in a cost-effective way.
Burn care is expensive because of the specialized equipment and need for specially trained personnel. Sixty two burn centers across the nation are verified in a joint program by the American Burn Association and the American College of Surgeons. The verification process is a rigorous review program designed to ensure that a burn center's resources meets requirements for the provision of optimal care to burn patients from the time of injury through rehabilitation. More than a dozen states have only one verified burn center, while some states have none. Often, patients are flown via helicopter to a specialized center. Telemedicine offers an opportunity to reduce transfers of patients by having local staff consult with specialists on the type and severity of burn to triage cases.
Some burn centers are using the store-and-forward method to assess and advise on treatment of burns. Store-and-forward telehealth involves the acquisition and storing of clinical information (e.g. data, image, sound, video) that is then forwarded to (or retrieved by) another site for clinical evaluation. Pennsylvania’s Lehigh Valley Health Network has been using this method since 2008 and has 100 sites participating in its network. Nearly 4,000 patients have participated in the program. The program is HIPAA-compliant and allows participating clinics to upload photos of patient burns so that specialists can view them remotely without storing them.
Patients with obvious severe burns go straight to the burn center. The telehealth program is for cases where the emergency department or urgent care center has a question. Since the program’s inception, about 35 percent of patients have required a transfer to a burn center. The program has reduced helicopter transports and the number of patients sent to centers for burns that could be treated locally. The program has also helped reduce infection in cases where the burn does not look as severe on the surface, but a specialist was able to tell from the images that the patient was at risk for infection or needed surgery.
Analysis: Telehealth is one of the many modes of connected health initiatives (secure messaging, personal health records, mobile health, etc.) that providers and health systems around the country are using to improve continuity of care. Forty-five percent of respondents to Deloitte’s 2014 Survey of US Physicians said they believe one potential benefit of mHealth technologies is providing remote support (e.g., telemedicine/telehealth) to patients or other providers.
The store-and-forward technology is also used in dermatology, radiology, pathology and ophthalmology. The technology allows specialists to aggregate cases and be highly efficient in reviewing the data submitted and guiding actions for other diagnostic lab or x-rays, in turn reducing the need for repetitive appointments. Teleradiology shortens the time for reports to get into the hands of the treating physician. Dynamic workload allocation can allow best use of radiologists across the nation by equalizing workload and decreasing time to get completed reports. As organizations continue to strive toward a value-based care system, telehealth can be a part of the transition from volume to value.