Health Care Current: November 3 2015 | Deloitte US | Center for Health Solutions | Life Sciences has been added to your bookmarks.
Health Care Current: November 3, 2015
Capitalizing on the latest breakthrough drug: The patient
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
Capitalizing on the latest breakthrough drug: The patient
“An empowered consumer is the new breakthrough drug.” This is how Daniel Kraft, Medicine and Neuroscience Chair at Singularity University, began his talk at last week’s Financial Times and Deloitte Digital Health Summit. And, it’s true: In a health care environment that is continually transforming, a patient-centric marketplace holds important considerations for stakeholders as they seek to adapt, innovate, and grow.
While there are different definitions, patient engagement can generally be thought of as helping individuals take action to manage and improve their health, make informed decisions, and engage effectively and efficiently with the health care system.
Much of the conversation around patient engagement has centered on health care providers. Deloitte’s 2015 Survey of US Health Care Consumers found that more consumers today prefer to partner with doctors instead of relying passively on them to make treatment decisions. But, the rapid change occurring across the health care system – shifting from volume to value, innovation in new channels and mHealth, and increased complexity of patient touch points – has reinforced that patients are (or should be) at the center of all of this. Today, the way that life sciences companies engage with consumers could make or break patient outcomes.
Additional findings from Deloitte’s 2015 Survey of Health Care Consumers highlight some of the areas that life sciences companies may have the opportunity to step in and add value. For one, consumer trust in reliability of online sources is rising. Fifty-two percent report searching online for health- or care-related information. Though trust in information from life sciences companies is among the lowest, consumer trust in this source has doubled since hitting a low in 2010. Consumers’ use of technology to monitor fitness and health improvements has also grown. From 2013 to 2015, consumers’ use of technology to measure fitness and health improvement goals grew from 17 percent to 28 percent.
This is promising news to anyone who believes that patient engagement can make a big difference in outcomes. Take multiple sclerosis as an example. Experts have acknowledged that patient engagement is a “linchpin” to ensuring care is multidisciplinary and coordinated for a chronic disease where new therapies impact multiple body systems and that often requires lifelong therapies and behavior change.1
The most exciting finding from our survey, in my opinion, is that consumers with chronic diseases generally show the highest levels of engagement and the largest increases in these areas. This is a promising trend that indicates those who have the greatest need to be engaged are in fact moving in that direction. Indeed, tech-based monitoring among consumers with major chronic conditions has jumped from 22 percent to 39 percent in the last two years. And, 70 percent of tech users with major chronic conditions say that utilizing health technologies has had a significant impact on their behavior.
But, the survey also found that some major gaps exist between consumers’ wants and actual use of new tools and technologies to support their chronic condition. One of the largest gaps is between consumers’ desire to use and actual use of technologies that can measure, record, or transmit information about medication they are taking.
These are critical gaps that need to be closed, and life sciences companies should be focused on catching up in these areas. As health plans and providers figure out how to navigate the new health care system, their roles continue to evolve. The same is true for life sciences companies. Now more than ever, these companies have the opportunity to step in and play a direct and critical role in patients’ lives.
There are five critical ways that life sciences companies can support patient engagement:
- Therapy: Connecting with patients to provide access to and support with care
- Education: Delivering educational insights to inform patient decision-making and behavior
- Financial: Helping patients obtain the financial resources they require to stay on therapy
- Clinical: Providing patients with a point of contact during trials and assisting them with transitioning from clinical to commercial drug
- Engagement: Granting patients access to programs, via traditional and emerging channels, that will help support their unique treatment journeys and enable better long-term treatment outcomes
As the health care system continues to transition to a focus on value, life sciences companies should consider revisiting the strategies and services they provide around patient access, support, education, and adherence. If they don’t, they could lose out on one of the best breakthrough drugs of the century – patient engagement.
Source: 1Peter Rieckmann, et al. Multiple Sclerosis and Related Disorders, “Achieving patient engagement in multiple sclerosis: A perspective from the multiple sclerosis in the 21st Century Steering Group,” May 2015, http://www.msard-journal.com/article/S2211-0348(15)00024-3/fulltext
By Greg Reh, Principal, US and Global Life Sciences Leader, Deloitte Consulting LLP
HHS: Average HIX premiums will rise 7.5 percent in 2016
Average premiums for silver-level benchmark plans sold in the federally-facilitated health insurance exchanges (HIX) will increase by 7.5 percent in 2016, according to a recent analysis from the US Department of Health and Human Services (HHS). Premiums vary across states based on population density, the concentration of HIX enrollees, changes in the number of participating health plans in each market, and other market dynamics.
The analysis showed that about eight in 10 returning customers will be able to buy a plan with a monthly premium of less than $100 after tax credits; seven out of 10 will be able to purchase a plan with a premium of less than $75 a month. Kevin Counihan from CMS said that most consumers will see their premiums increase less than 10 percent.
Silver plans cover nearly 70 percent of total HIX enrollees, and HHS uses the second-lowest cost silver plan as the benchmark plan to calculate advanced premium tax credits for consumers. Consumers in 37 states will use the Healthcare.gov platform in 2015.
HHS is encouraging returning consumers to visit HealthCare.gov to confirm they are enrolled in a plan that best meets their budget and health needs. Last year, close to 30 percent of all consumers who re-enrolled returned to HealthCare.gov and chose different plans that saved them money. On average, individuals who switched plans within the same metal tier saved an average of nearly $400 on their 2015 premiums after tax credits, compared with those who stayed in their same plans.
Implementation & Adoption
CMS publishes final Medicare physician, hospital outpatient payment rules
The US Centers for Medicare and Medicaid Services (CMS) published final rules for physician services and hospitals under Medicare last week. This marks the first Physician Fee Service (PFS) rule that CMS has published since the Medicare Access and CHIP Reauthorization Act (MACRA) repealed the sustainable growth rate (SGR) earlier this year. CMS took this opportunity to finalize policies that will move physicians closer to the new payment systems – alternative payment models (APMs) and the Merit-based Incentive Payment System (MIPS).
Changes finalized in the PFS:
- Physician Quality Reporting System (PQRS): CMS will use the same reporting requirements for PQRS in 2018 as for 2017. Physicians who do not report nine measures that cover three National Quality Strategy domains in 2016 will receive a 2 percent penalty for all services furnished in 2018. After 2018, CMS will align quality reporting to MACRA.
- Value-Based Payment Modifier (Value Modifier): Through the Value Modifier program, CMS pays more to physicians who perform well on quality and cost measures in the traditional Medicare program. CMS will apply the Value Modifier to non-physicians (e.g., physician assistants, nurse practitioners) in 2018. CMS will use 2016 performance data to calculate 2018 adjustments. The Value Modifier will expire after 2018 and align to MACRA.
- Advance care planning: CMS created payments for two advance care planning activities under Medicare to encourage physicians to talk with their patients about serious illnesses before they progress.
Changes finalized under the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) payment system for hospitals:
- Payment update: Hospitals will receive 0.3 percent less under the 2016 OPPS. ASCs that meet quality reporting requirements will receive a 0.3 percent increase.
- Two midnight rule: CMS will be more flexible with hospitals in determining whether services received by patients who have a hospital stay shorter than two midnights should be paid for under the inpatient payment rates. CMS will consider these on a case-by-case basis and said that admitting physicians should document why they believe an inpatient stay is necessary. CMS will begin using Beneficiary and Family Centered Care (BFCC) Quality Improvement Organizations (QIOs) instead of Medicare Administrative Contractors (MACs) or Recovery Auditors to review inpatient stays.
- Chronic care management (CCM) services: In response to questions from many hospitals, CMS changed the new CCM service payment. CMS clarified the role and scope of services under which hospitals can bill for CCM services. This comes shortly after CMS said that it has only received 100,000 claims using this new payment code (see the October 20, 2015 Health Care Current).
- Quality reporting: Under the Hospital Quality Reporting Program, hospital outpatient departments that do not meet the program requirements face a 2 percent payment penalty. CMS added one new National Quality Forum-endorsed measure to the program for 2018. CMS did not add any new measures to the Ambulatory Surgical Center Quality Reporting Program, under which ASCs also face a 2 percent payment penalty for not reporting. CMS requested comments on two new potential outcome measures.
Finally, CMS will pay for biosimilars under Medicare Part B using the same methodology it uses for generic drugs. CMS will pay all biosimilars under the same billing and payment code the average sales price plus six percent.
CMS: More than 1,800 hospitals will receive VBP payments in 2016
CMS released information about the distribution of payment adjustments to hospitals participating in the Hospital Value-Based Purchasing (VBP) program, which reflects hospital performance on quality measures. In 2016, 1,806 hospitals will receive increased Medicare payments next year, up from 1,714 in 2015. The payment adjustments for individual hospitals range from -1.75 percent (up from -1.5 percent last year) to just over 3.0 percent. More than half of the hospitals in the program will receive payment adjustments between -0.4 percent and 0.4 percent. Altogether, CMS will pay approximately $1.5 billion in incentive payments to hospitals.
Under the program, each year CMS reduces payments to all hospitals by a fixed percentage (1.75 in 2016); at the end of the year, high performing hospitals get positive performance adjustments in their payments. CMS will increase the withhold amount to 2.0 percent in fiscal year (FY) 2017 where it will remain for future years.
The Affordable Care Act (ACA) created the VBP program, which began in October 2012. It aims to improve care quality in inpatient hospitals by creating incentives for hospitals to provide high quality care. CMS measures performance on four quality domains:
- Clinical processes of care (10 percent)
- Patient experience of care (25 percent)
- Patient outcomes (40 percent)
- Efficiency (25 percent)
Health Care Payment Learning and Action Network proposes principles for alternative payment models framework
Last week, the Health Care Payment Learning and Action Network (HCP LAN) held a forum to discuss its framework for APMs, which will be a part of the new Medicare payment system for physicians. HCP LAN was formed after Congress passed MACRA and aims to be a public-private partnership to measure progress toward HHS’s commitment to tying 50 percent of payments to quality and value through APMs in Medicare by 2018.
The group outlined seven key principles:
- Changes to physician payments are only one way to move care toward a patient-centric model. In the future, the group will focus on initiatives that encourage greater patient engagement in health care.
- The health care system needs to shift toward shared-risk and population-based payments to encourage delivery system reform.
- Incentives built into new payment arrangements should, to the greatest extent possible, reach the physicians who are delivering care.
- Payments that do not emphasize value and quality will not be considered APMs and will be classified as a payment that is not based on value.
- Incentives in value-based payment models should be large enough to encourage physician participation, but the size of incentives should not be a determining factor for where the payment model falls in the APM categories.
- The group will look at which APM is most dominant in health plans that use more than one.
- Centers of Excellence (COE), Patient-Centered Medical Homes (PCMH), and accountable care organizations (ACOs) are not payment models, but rather delivery models that enable APMs. They can appear in multiple APMs in the framework, depending on the payment model that is being used.
With these principles as a foundation, the group outlined a draft framework for classifying payment models into the four payment categories proposed by HHS:
Study: 2014 health care spending for individuals in employer-sponsored insurance rose 3.4 percent
The Health Care Cost Institute (HCCI) recently published the 2014 Health Care Cost and Utilization Report, which analyzes health care spending trends for the nearly 40 million Americans younger than 65 with employer-sponsored insurance (ESI). It provides a detailed look at components of health care cost growth and is based on claims data from several large commercial health plans. Total spending for this group grew 3.4 percent last year. At the same time, utilization declined in 2014. Other key findings include:
- Average health care spending per person was $4,967 in 2014, an increase of $163 over 2013
- Average out-of-pocket spending was $810 per person, 2.2 percent higher than 2013
- Women continue to have higher out-of-pocket spending than men; women have a higher utilization rate in acute inpatient and prescription services
- Prices for professional services and acute inpatient admissions increased
- Spending on brand-name drugs increased by $45 per capita, but utilization fell 16 percent
Utilization fell as patients continued to visit hospitals and doctor’s offices less frequently. In 2014, acute admissions experienced the largest decline in use (-2.7 percent), falling by one admission per 1,000 individuals. Outpatient visits fell the least (-0.9 percent), decreasing by three visits per 1,000 individuals.
(Source: Health Care Cost Institute, “2014 Health Care Cost and Utilization Report,” October 2015)
AMA: Side effects and costs are key reasons for non-adherence to medications
Recent guidance from the American Medical Association (AMA) may help physicians identify and reduce medication non-adherence among their patients. Medication non-adherence among patients is rational behavior based on thoughts, feelings, or beliefs, according to the AMA. It is important for physicians to understand the underlying causes of non-adherence in order to help patients adhere. According to the AMA, the following are the top eight reasons for intentional non-adherence:
Studies have found that patients fail to take their medicine as it was prescribed about half the time, and approximately one quarter of new prescriptions are never filled. Research also shows that most patients who do not fill a prescription or take their medicine do not tell their doctor. This may lead physicians to increase the intensity of therapies, which can be dangerous, costly, and time-consuming. It can also lead to potentially harmful drug interactions if a physician prescribes a new medication and the patient begins taking all prescribed medications.
(Source: American Medical Association, “8 reasons patients don’t take their medications,” October 16, 2015)
Congress, White House reach budget deal
Congress passed a bill last week that increases spending caps on the federal budget for two years and raises the debt ceiling through March 2017. The deal raises appropriations for defense and non-defense areas by $80 billion for two years. President Barack Obama signed the bill on Monday, November 2.
The bill includes four health care provisions:
The American Hospital Association opposes the site-neutral payment provision, saying that it does not reflect hospitals’ higher costs. However, the Alliance for Site Neutral Payment Reform, a trade association for independent cancer physicians and patients, supports the deal. It says that many hospitals are buying physician practices and converting them into outpatient departments to get higher payments they receive from services performed there.
The Generic Pharmaceutical Association also opposes the deal because it believes the Medicaid rebate policy for generic drugs will limit patient access to these drugs. However, the National Association of Medicaid Directors is in favor of the provision because it believes the policy could prevent higher prices for generic drugs.
Analysis: Life sciences and health care sector stakeholders should consider taking these provisions and more into account as they determine – and in some cases re-evaluate – their strategic priorities. For example, the bill extends the automatic 2 percent sequestration cuts to Medicare payments to health plans and providers for an additional year, through 2025.
As explained in the November 2, 2015 RegPulse blog post, this deal generally clears the congressional calendar of any must-pass legislation until after the 2016 elections, shifting the life sciences and health care sectors’ focus largely to regulatory activity on issues such as the 340B drug discount program, MACRA, and the so-called Cadillac tax on high-cost employer-sponsored health coverage.
On the Hill & In the Courts
Study: New Hampshire leads in hospital-based information exchange
HealthITInteroperability.com analyzed data from the Office of the National Coordinator for Health IT (ONC) and American Hospital Association (AHA) to discern which states lead in hospital-based health information exchange. It assessed state performance on six measures and found that 64 percent of US hospitals could exchange records with providers outside their health system. New Hampshire hospitals lead the country; 88 percent of its hospitals are able to exchange records.
The survey evaluated which hospitals could exchange summary-of-care records and electronic lab results with providers, other hospitals, and ambulatory providers. The researchers found that 69 percent of hospitals could share electronic lab results with any outside provider. However, only 54 percent of hospitals could share lab results electronically with other hospitals. Small states, based on total area or population, had hospitals more likely to report sharing on these measures, which may in part reflect the small number of hospitals in those states.
Around the Country
Report: States should improve oversight of network adequacy
A new report documents variability in how state regulators approach network adequacy, including how this varies between insurance regulators and Medicaid agencies. It recommends that insurance regulators more aggressively address this issue. Health Management Associates and the Robert Wood Johnson Foundation (RWJF) looked at how state agencies and health plans measure provider networks and access to care under the ACA. The study used survey data and interviews to look at commercial insurance regulators and Medicaid agencies’ standards and how they evaluate qualified health plans in exchanges and Medicaid managed care organizations, respectively. The report highlighted key findings and then provided five recommendations to ensure greater consistency in network standards and access to care measures.
- States should monitor provider capacity: Because provider network standards differ between commercial and insurance regulators and Medicaid agencies, the researchers recommend that states monitor provider capacity and how much overlap there is among plans to determine actual provider availability.
- Network standards should be based on data: One hurdle will likely be reaching consensus across health plans and programs on which data and algorithms to use.
- Plans should provide after-hours access to primary care: This would require collaboration between health plans and providers to develop adequate infrastructure and staffing models.
- States should use data analytics to detect early signs of access problems: Claims data about emergency room utilization or out-of-network care could spotlight specific access issues.
- States should increase their insurance regulator’s role in overseeing network adequacy: Medicaid agencies have historically had more prescriptive network standards and oversight roles. State insurance regulators have increased their oversight activity since implementation of the ACA but have faced many challenges in assessing network adequacy and monitoring performance of health plans.
(Source: Karen Brodsky, Diana Rodin, and Barbara Smith, “Making Affordable Care Act Coverage a Reality: A National Examination of Provider Network Monitoring Practices by States and Health Plans,” Health Management Associates, October 2015)
Governors push for guidance on state innovation waivers
Citing the impending implementation of ACA’s Section 1332 waivers in 2017, the National Governors Association (NGA) wrote a letter to HHS Secretary Sylvia Burwell and Jacob Lew, Secretary of the US Department of the Treasury (Treasury Department), requesting guidance and flexibility around the waiver application process. As discussed in the September 22, 2015 Health Care Current, beginning in 2017 states will be able to apply to waive certain provisions of the ACA and redesign their health insurance systems for the HIX population.
States want budget-neutral financing, communication with the federal government, and a streamlined review and approval process for waivers. The letter outlined seven specific recommendations for the Section 1332 waiver process:
- HHS and the Treasury Department should give states flexibility with budget neutrality calculations and the maximum allowable value for 1332 waivers.
- HHS and Treasury should work with states interested in using the waivers to conduct large health care transformation initiatives in Medicaid, Medicare, and private health insurance.
- Early engagement between states and federal agencies in the waiver development and application process could encourage more states to apply.
- States should be allowed to pursue models that would modify the federal exchange platform. Customization should not be a consideration when evaluating applications.
- HHS and Treasury should clarify that states do not need additional authorizing legislation to apply for waivers.
- HHS and Treasury should have one team to coordinate and communicate the 1332 waiver process to expedite the process.
- HHS should provide model waiver templates to help states pursue changes that are commonly sought and less complex.
Earlier this month, Hawaii became the first state to draft a 1332 State Innovation Waiver for public comment (see the October 13, 2015 Health Care Current). Though the waivers were originally intended for states like Vermont and Oregon, which were proposing single-payer systems and other health system reforms, other states have begun to consider these waivers as they seek to modify how they implement the ACA.
Social media may help drive health care quality improvement
Patient experience has become increasingly important to discussions and initiatives focused on improving health care. Several well-accepted surveys capture patient experience with the health care system, but it takes several months to publish results, and response rates are typically low. In the meantime, social media use is rapidly growing, and health researchers are increasingly relying on data from Twitter and other popular social media channels to track consumer experience with health care.
A recent study published in BMJ Quality and Safety examines Twitter as a potential source of data for capturing patient experience and patient-perceived quality of care in US hospitals. About half of the hospitals in the US have a presence on Twitter.
The study looked at Twitter accounts in more than 2,000 US hospitals over approximately 12 months. The researchers looked at tweets directed toward a hospital’s Twitter account that were open to the public. Tweets relevant to the study involved patient experience related to interactions with staff, treatment effectiveness, hospital environment (such as food and parking), mistakes or errors in treatment or medication administration, and timing or access to treatment. The researchers found that sentiment on Twitter was not associated with Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) ratings. At the same time, they found that higher sentiment scores on Twitter were associated with lower 30-day readmission rates.
Another study published in the same journal issue looks at the potential utility of linking patients’ social media content with their electronic medical record (EMR) data. This study asked adult social media users who came to an emergency department if they were willing to share social media data and EMR data for use in health research. Of the more than 5,000 patients asked, 52 percent were social media users and 53 percent of those users agreed to participate. Participants willing to share social media data were slightly younger, more likely to post on social media at least once a day, and more likely to have private insurance. One of the questions the research team would like answered by future research is whether there is an association between a patient with a chronic condition’s active posts on social media about their condition and a flare up in symptoms or likelihood of hospitalization.
Analysis: These studies show that social media may be an untapped source for information about health care system quality and could be valuable to patients, researchers, policy makers, and hospital administrators. Further, many patients are willing to share their social media data related to their experience with the health care system and link their EMR and social media data. More studies are needed to see whether patients willing to share are different – demographically or clinically – from non-sharers, and what insights may be available from a database that merges social media and EMR data.
Many health care organizations are increasingly exploring the use of non-medical data, including purchasing data, social media, and web trending data, to engage consumers and be more proactive in prevention and treatment. This year, several studies have looked at smartphone data and social media use to study different health issues, including predicting symptoms of depression and learning about patient experience and behavioral epidemiology of sleep disorders.
Just as retailers are using customer data to promote specific products, the health care industry is evolving its data mining and learnings from predictive analytics to improve population health and the patient experience. If consumers are satisfied that their data is being protected and is private and secure, greater use of lifestyle and behavioral data and analytics may help the health care industry meet rising demands for more effective health care services and innovative products and treatments.
(Sources: Jared B. Hawkins et al, “Measuring patient-perceived quality of care in US hospitals using Twitter,” BMJ Quality and Safety, October 13, 2015; Kevin Padrez, “Linking social media and medical record data: a study of adults presenting to an academic, urban emergency department,” BMJ Quality and Safety, October 13, 2015)