Health Care Current: October 13 2015 | Deloitte US | Center for Health Solutions | Life Sciences has been added to your bookmarks.
Health Care Current: October 13, 2015
Defining and delivering population health
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
Defining and delivering population health
If anyone should know what “population health” is, I should. After all, for the last twenty years, I’ve designed and implemented population health programs for managed care organizations and health management companies. More than a decade ago, at a major health plan, I renamed my department of dedicated staff “Population Health and Wellness” to reflect this important work. All of these programs had the objective of improving some aspect of health and wellness for various populations. Strategies and tactics varied depending on the objectives of the “purchaser” and the needs of the particular population. Whether the individuals being supported were Medicare Advantage members, employees at large or small employers, Medicaid members, pregnant women, union members, retirees, or others—each program had “population-based” goals to improve health outcomes.
But I admit I am struggling for a “population health” definition that works for hospitals, provider organizations, health plans, and others seeking to improve health for a population for which they have clinical responsibility and financial risk.
There are reasons why we have many different definitions, explanations, and concepts behind the term “population health.”
For most of the last 50 years, health plans have been the primary integrators of the financing and delivery of health care, and thus responsible for quality and cost for defined health care populations. My example above notwithstanding, managed care organizations usually did not refer to their many population-based interventions as “population health.” Until recently, providers might speak about their “patient population,” but by and large, they cared for individual patients one at a time. The clinical interventions they ordered or performed were one-to-one actions.
Not surprisingly, academics in public health and health policy tend to use definitions that emphasize research, causation, and outcomes. However, these definitions of population health do not always work in the real world of managing health care populations today.1
Many industry coalitions and trade groups, such as the Population Health Alliance, prefer a definition that emphasizes products and services that enable “population health management.”2 It’s a reasonable try, but as provider organizations struggle to explain the shift to value-based care to their clinicians, it may fall short.
And finally, with accountable care as a key driver, health management and data analytics vendors of all types are now packaging their services as “population health.”
So, does the health care world need another attempt at defining population health? Or should our energies be directed to doing population health—using health information in new ways and innovating in care delivery?
Yes and yes.
Health care is moving quickly to value-based models. Provider organizations responsible for the full spectrum of health needs for a population (as opposed to those delivering episodic procedures or illness-focused care) very quickly realize they need to know about their population’s risks and needs even before they get sick—and the equal need to measure and improve care processes for their overall population.
From a practical standpoint, it is not enough to say, “Population health—you know it when you do it!” We risk thinking that the complex work of clinical data integration or that the equally challenging evolution of clinical practice patterns and provider incentives are, by themselves, population health. And words matter—if we are on common ground with our understanding, we can move the conversation forward to wise investments in population health.
So here is my attempt at a description that providers and consumers can understand: “Population health refers to health care efforts that aim to use health care resources effectively and efficiently to improve the lifetime health and wellbeing of a specific population.”
It’s not the most elegant language, but it’s concise, inclusive, durable, and hopefully it advances our common understanding of the population health challenge.
1"As a discipline, population health is broadly defined as health outcomes (e.g. mortality, morbidity, quality of life) and their distribution within a population; the health determinants (e.g. medical care, socioeconomic status, genetics, public health) that influence this distribution; and the policies and interventions, both social and individual, that impact these determinants." Source: The Jefferson School of Health Policy and Population Health in P & T. 2008 Oct; 33(10); 566-568, http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2730788/.
2 “A population health management program strives to address health needs at all points along the continuum of health and well-being through participation, of, engagement with and targeted interventions for the population. GOAL: Maintain or improve the physical and psychosocial well-being through cost-effective and tailored health solutions.” Source: http://www.populationhealthalliance.org/research/understanding-population-health.html
By Es Nash, MD, Specialist Leader, Deloitte Consulting LLP
CMS will pay health plans less than 13 percent of requested risk corridor payments
Earlier this month, the US Centers for Medicare and Medicaid Services (CMS) announced that it would pay only 12.6 percent of the risk corridor payments that health plans requested for 2014. Health plans requested $2.87 billion in payments for 2014, but CMS will pay out only $362 million. CMS will send risk corridor payments to health plans later this year. It will then use collections from plans in 2015 to pay off the shortfall for 2014 before making payments for 2015.
The risk corridor program is one of the three premium stabilization programs for plans in the public health insurance exchanges (HIX). The goal is to protect health plans against uncertainty in rate setting and costs associated with pricing for a new risk pool (i.e., the exchanges).
This announcement comes after CMS delayed releasing the figures for 2014 in August (see the August 18, 2015 Health Care Current). However, many analysts expected the payments to be short of the amount requested, as earlier this year, Standard & Poor’s (S&P) Rating Services found that 14 percent of health plans were expecting to pay into the program, while 30 percent were expecting to receive payments from the program.
Lawmakers introduced two bills to change the risk corridor program. One would repeal the program, and the other would amend the law to say that only funds from health plans may be used to make risk corridor payments. America’s Health Insurance Plans issued a statement after the CMS announcement requesting Congress address the shortfall. Health plans will be unable to adjust premiums for 2016 to account for this shortfall, as open enrollment begins on November 1.
Analysis: Lawmakers included language in the 2015 spending package that prohibited CMS from using money from the Medicare Trust Fund or appropriated accounts to pay for shortfalls in the program, so CMS must implement the risk corridor program as budget-neutral.
Large health plans may have the capital to withstand losses, but many smaller health plans and Consumer Operated and Oriented Plans (COOPs) may depend on these payments. S&P’s analysis of health plan balance sheets found that larger health plans, such as Health Care Service Corporation and Humana Inc., were expecting more than $50 million from the risk corridor program. However, this amounts to less than 3 percent of their capital. In comparison, several COOPs were expecting payments that are greater than 100 percent of their capital. Ultimately, if the risk corridor program is unable to pay out these expected amounts, some smaller health plans may be unable to sustain their business in the marketplaces. If these plans pull out, consumers might have fewer plans to choose from. Premiums might be affected by low risk corridor payments or because of changes in competition.
If this trend continues, health plans may need to adjust their premiums in future years. A Deloitte analysis, The 10 percent problem: Future health insurance marketplace premium increases likely to reach double digits, found that health plans may need significant premium increases (10 percent or more) as they prepare for the end of the risk corridor and reinsurance programs and try to reach or maintain profitability in 2017. The shortfall in risk corridor payments this year may exacerbate the problem even more.
Implementation & Adoption
More Medicare Advantage plans earned four stars or higher for 2016 ratings
Last week, CMS announced that nearly half (49 percent) of Medicare Advantage with prescription drug coverage (MA-PD) plans earned at least four stars for their 2016 quality rating. This is up from 40 percent in 2015. The 179 plans with high ratings have nearly 71 percent of all MA enrollees.
MA-PD plans improved in a number of areas, including measures for medication adherence for hypertension and high-risk medication. However, stand-alone Prescription Drug Plans (PDPs) have lower ratings on average compared with last year. Fewer PDPs have ratings of 3.5 stars or higher, and more have lower ratings (2.5 or 2 stars). CMS rates PDPs on medication adherence measures, and many PDPs had difficulty achieving high scores on those measures.
Background: CMS rates MA plans, MA-PD plans, and PDPs on quality measures that encompass five categories: outcomes, intermediate outcomes, patient experience, access, and process. Outcomes and intermediate outcomes measures get the highest weight in the ratings, and process measures have the lowest weight. All MA plans with high star ratings (4 or higher) receive a quality bonus payment from CMS.
Study: Ambulatory surgery centers had slower payment growth than hospital outpatient departments from 2007 to 2012
A study published in Health Affairs found that payments for six services provided by ambulatory surgery centers (ASCs) grew more slowly than in hospital outpatient departments (HOPDs) between 2007 and 2012. Payments from 2007 to 2012 grew an average of 11.25 percent for procedures performed in ASCs, compared with 42.93 percent in HOPDs.
The analysis found mean payments for all six procedures to be lower in ASCs than in HOPDs. Variation in payments was greatest for HOPD procedures and for orthopedic procedures in both settings. The biggest difference in payments between the two settings was for cataract surgery:
The researcher analyzed claims data for six surgical procedures commonly performed in both settings for three surgical specialties (gastroenterology, ophthalmology, and orthopedic surgery). For private insurance claims, the researcher compared total facility payments (amount received by the ASC or hospital) minus physician fees to assess the amount paid for a given procedure. This payment accounted for payments by the health plan and the patient.
Background: ASCs are freestanding facilities that provide some surgical services to patients. With advancements in clinical technology, these facilities can perform certain procedures without requiring patients to stay overnight in the hospital. The number of ASCs and the amount and types of services performed at these facilities have grown significantly over the past decade. Some analysts say that much of this growth has been driven by the larger number of high profit surgeries that ASCs perform.
(Source: Kathleen Carey, Health Affairs, “Price Increases Were Much Lower In Ambulatory Surgery Centers Than Hospital Outpatient Departments In 2007–12,” October 2015)
GAO outlines five challenges organizations face in achieving greater interoperability
A Government Accountability Office (GAO) report released last week highlighted some of the barriers to interoperability of electronic health records (EHR). An interoperable EHR system is one that shares health information with other systems and processes that information without much effort by the user. The more efficiently and effectively these systems can “communicate” with one another, the better providers may be able to understand patients and their medical history.
GAO interviewed 18 non-federal organizations to understand the challenges many organizations face in achieving greater interoperability. It found five main common challenges:
Related: Last week, the Office of the National Coordinator for Health Information Technology (ONC) released its final version of the health information technology (IT) roadmap. The roadmap, informed by stakeholders nationwide, aims to coordinate efforts across the country to improve health IT interoperability. In the document, ONC lays out a number of goals through 2024 to improve interoperability and achieve better quality and outcomes:
Congress is introducing legislation aimed at improving EHR interoperability. Last week, Senators Bill Cassidy and Sheldon Whitehouse introduced a bill that, if passed, would develop a rating system for health IT products to measure interoperability, security, and usability. The legislation would require the ratings to be published on ONC’s website with a goal to improve health IT transparency and interoperability.
(Sources: GAO, “Electronic Health Records: Nonfederal Efforts to Help Achieve Health Information Interoperability,” September 16, 2015; ONC, “Connecting Health and Care for the Nation: A Shared Nationwide Interoperability Roadmap: Final Version 1.0,” 2015)
On the Hill & In the Courts
Trans-Pacific Partnership trade deal includes five-year exclusivity period for biologic pharmaceutical products
Last Monday, representatives from the US and 11 Pacific Rim countries (Canada, Mexico, Japan, Vietnam, Brunei, Malaysia, Singapore, Australia, New Zealand, Peru, and Chile) reached an agreement on the Trans-Pacific Partnership, which includes new standards around patent protection for biologics. The countries represent nearly 40 percent of global gross domestic product ($28 trillion). The deal has wide reaching implications for nearly every industry, including the pharmaceutical industry.
The final deal sets a minimum period of patent protection for these countries of five years. The US protects pharmaceutical companies’ patents for 12 years; other countries have not had the same protection for patents of biologic products. Other countries may choose to adopt longer exclusivity periods, but it is unclear if any would do so.
Reaction: When the trade ministers who agreed on the deal published the details of this provision, stakeholders in opposition and support of the five-year protection period spoke out about the deal. The key stakeholders fell out on two sides:
The trade group that represents US biopharmaceutical research companies said that the deal does not give strong enough protection for intellectual property for biologics. It called the deal a “missed opportunity” for encouraging innovation and getting live-saving treatments to patients. By contrast, the Generic Pharmaceutical Association (GPhA) and its Biosimilar Council said last week that the deal could improve access to affordable treatments. GPhA says the deal will help encourage competition as it allows generic forms of biologics, or biosimilars, to enter the market more quickly.
(Source: Office of the United States Trade Representative, “The Trans-Pacific Partnership, Overall US Benefits Fact Sheet,” https://ustr.gov/sites/default/files/TPP-Overall-US-Benefits-Fact-Sheet.pdf)
CMS and ONC release final rules for Stage 3 of the Meaningful Use program
Last week, CMS and the ONC published the EHR Incentive Program and Health IT Certification Program final rules. The final rules emphasize simplicity and flexibility, encourage greater interoperability, and allow stakeholders additional time to phase in the required changes. Health care providers, developers, and consumers may benefit from the changes included in the final rules:
CMS also opened a 90-day comment period in the final rule to collect information on how it should align the EHR incentive programs with requirements in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). This comes shortly after CMS released a request for information (RFI) on MACRA. One question CMS had in the RFI was, “How should CMS measure meaningful use of electronic health records?” Over the next year, the Administration is likely to increase regulatory activity related to MACRA. MACRA repealed the Sustainable Growth Rate formula and established a path toward new payment systems that will more closely align reimbursement with quality and outcomes measures while steering health care providers away from the fee-for-service system (see the October 6, 2015 Health Care Current).
Related: Last week, the ONC announced plans to create a framework for using patient-generated data in health care research and delivery. The ONC aims to integrate patients into the health care process. The framework will help physicians encourage their patients to access portal systems, empower their patients with education, and interact with patients via secure email communication. Over the next two years, ONC will pilot programs to test and refine the framework.
Supreme Court to hear case on whether self-insured employers can be required to submit data to state claims databases
Last week, the US Supreme Court announced that it would hear a case on Vermont’s all-claims database, the Vermont Healthcare Claims Uniform Reporting and Evaluation System (VHCURES). In 2011, Vermont passed a law that implemented VHCURES. It requires health insurers, providers, facilities, governmental agencies, and more to submit information and data to the Vermont Department of Financial Regulation. VHCURES collects information on health care cost, price, quality, and more.
Vermont defines health insurer broadly, and included third party administrators, pharmacy benefit managers, health insurance companies, and self-insured benefit plan administrators in the definition. In 2011, Vermont asked a self-insured company to have its third party administrator send medical and pharmacy claims to be included in VHCURES. The company declined to send that information, and told its third party administrator not to comply with the request. It claimed that Employee Retirement Income Security Act of 1974 (ERISA) pre-empts Vermont’s reporting requirements for VHCURES. ERISA governs self-insured companies, and often supersedes state laws when they conflict with ERISA requirements.
A lower court ruled in favor of Vermont, but the self-insured company seeks to overturn that ruling because it says that ERISA was passed to protect companies from conflicting compliance issues in different states. If the Supreme Court rules in favor of Vermont, it could open the door for other states to pass similar requirements of self-insured employers.
Hawaii drafts the first 1332 State Innovation Waiver
Hawaii recently became the first state to draft a 1332 State Innovation Waiver for public comment. Hawaii wants to exempt itself from the Small Business Health Options Program (SHOP) and other provisions that it says interfere with the state’s 40-year-old “Prepaid Health Care Act.” The act requires employers to offer affordable coverage to all employees that work at least 20 hours a week. It would reallocate funding for small business tax credits to help employers with fewer than eight workers to purchase health insurance coverage. Hawaii is accepting comments on the proposal until the end of the month.
The ACA established 1332 “State Innovation Waivers,” which are similar to Medicaid 1115 waivers, and allow states to redesign their health insurance systems for the exchange population beginning in 2017. Originally, they were designed for states like Vermont and Oregon, which were proposing single-payer systems and other health system reforms. However, other states have begun to consider these waivers as they seek to modify how they implement ACA provisions like the individual and employer mandates (see the September 22, 2015 Health Care Current).
Though Hawaii’s situation is unique, how it navigates the waiver process may be watched by other states. Analysts believe that five other states – Rhode Island, California, Minnesota, New Mexico and Arkansas – may pursue a waiver.
Around the Country
Report: Physicians seeing higher income after ACA implementation
A report published by the Robert Wood Johnson Foundation found that primary care physicians (PCPs) and surgeons are getting paid more since the ACA was implemented, even in states that did not expand Medicaid.
From 2013 to 2014, PCPs in states that did not expand Medicaid had 3.3 percent higher income, and in expansion states average income increased 3 percent. In non-expansion states, the increase was primarily driven by growth in the commercially insured population, and in states that expanded Medicaid, the growth was primarily driven by larger Medicaid populations. Medicare accounted for 41.4 percent of the increase in non-expansion states and 39.4 percent in expansion states. For surgeons, income increased 4 percent in non-expansion states and 2 percent in expansion states. This growth was primarily driven by growth in volume of visits.
The analysis suggests that the coverage expansion provisions of the ACA have not reduced payments for physician practices, although some of the dynamics vary by whether physicians are in primary care or they are specialists. For example, PCPs had fewer visits but higher payment rates, and surgeons are seeing more patients.
The report looked at physician practice visit volume, relative value units (RVUs) per visit, and collections per RVU to evaluate physician pay and how patterns vary across states and between primary care and surgeon specialties. RVUs measure how complex a visit is and are used to calculate how much physicians are paid for their services.
(Source: Iyue Sung, Anna Zink, and Josh Gray, “ACAView: Physician Practice Economics Under Coverage Expansion,” October 2015)
New hope for rare, undiagnosed diseases and reduced diagnostic errors
The Undiagnosed Diseases Network (UDN) has launched an online patient application portal called the UDN Gateway. The UDN is funded through the National Institutes of Health (NIH) and aims to help diagnose patients with conditions that even skilled physicians have been unable to diagnose. Previously, patients were accepted into the program via a paper application process sent through the mail. The launch of the online portal will help improve connectivity and information transfer.
Patients in the UDN have diseases that have been difficult for clinicians to diagnose because they are rare, have not previously been described, or are unrecognized forms of more common diseases. The UDN network allows these hard-to-diagnose patients to be seen by the nation’s leading diagnostic teams from an array of medical specialties. The online application system will make it easier for patients to apply and may improve the level of diagnosis and care for these patients. Patients accepted into the program receive a medical evaluation and often have their DNA sequenced to detect variations in genes that may be associated with their disorders.
UDN came out of the Undiagnosed Diseases Program at the NIH Clinical Center in Bethesda, MD, established in 2008. The Undiagnosed Diseases Program has reviewed more than 3,100 applications from patients around the world. Six new clinical sites recently joined the network to broaden UDN’s diagnostic capabilities and to enable more patients to access the network. More than 750 patients have been enrolled in the program, at an average rate of about 150 patients per year. By the summer of 2017, each new clinical site will accept about 50 patients per year.
Related: A new report from the Institute of Medicine discusses the problem of inaccurate or delayed diagnoses. Most Americans will experience one of these to some degree in their life time: inaccurate or delayed diagnoses affect one in 20 patients per year, or 12 million Americans. According to the report, diagnostic errors have many causes:
- Inadequate collaboration and communication among clinicians, patients, and their families
- A health care system that is not designed to support the diagnostic process sufficiently
- Limited feedback to clinicians about performance in this area
- A culture that does not encourage transparency and disclosure of diagnostic errors, which in turn may hinder the ability to learn from these errors and make improvements.
The report outlines eight goals to reduce diagnostic errors and improve diagnosis. The goals center on facilitating more effective teamwork and a culture that supports improvement in the diagnostic process; education, training, and health IT support; payment and delivery changes; and dedicated funding for research.
(Sources: National Academies of Sciences, Engineering, and Medicine, “Improving diagnosis in health care,” 2015; and National Institutes of Health, Undiagnosed Diseases Network launches online application portal, September 16, 2015)