Access to cost and quality data could help physicians succeed in value-based care

Health Care Current | October 23, 2018

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

Access to cost and quality data could help physicians succeed in value-based care

By Steve Burrill, vice chairman, US health care leader, Deloitte LLP

Most physicians probably know how much it will cost their patients to park in the hospital’s lot, or what they will pay for a cup of coffee in the cafeteria. But few physicians can help their patients find low-cost laboratory or imaging options in the neighborhood, or point patients to a high-value rehab or skilled-nursing facility, according to the results of our 2018 Survey of US Physicians. If our industry is to successfully migrate to value-based care models, physicians likely need greater access to cost and quality information so they can help patients get more value from the health care system.

A majority of physicians have access to information about their own productivity as well as their performance on quality measures, according to our survey results. However, just 14 percent of the 624 physicians we surveyed said they have access to quality data for the physicians or facilities where they refer patients. Moreover, only 9 percent of surveyed physicians said they are able estimate out-of-pocket costs for their patients.

Cost information could impact physician decision making

Information about care quality, productivity, and cost can influence the decisions physicians make. More than 70 percent of survey respondents said such cost data was valuable, particularly at the point of care. Of the physicians who have access to cost data, more than 60 percent said that knowing what a patient would pay out-of-pocket might compel them to reconsider or change a decision. By contrast, just 39 percent of physicians who don’t have access to this information thought that having it would influence their decision making.

But simply providing clinicians with data might not be enough. Health systems that share some cost data with their physicians agree that the information can influence practice patterns. But they note the data must be paired with education. Certain types of cost data, and the way it is reported, can be complicated. To use the data appropriately, physicians should understand how it was collected, and it should be presented in a way that helps physicians choose the most appropriate and affordable treatment option.

While having cost and quality information won’t necessarily lead physicians to make more cost-effective decisions, some anecdotal evidence suggests it could have a positive effect. Consider these examples:

  • The Texas Hospital Association (THA) piloted a program where electronic health records (EHRs) are used to share relevant cost data with physicians at a large academic hospital. Physicians see patient-specific, real-time hospital wholesale costs for medications, labs, and imaging. The hospital compared physicians who used the enhanced EHR against their historical behavior and against physicians at the same hospital who did not have access to the data. After a little more than two months, the program saved the hospital $430,444 in costs related to medications, labs, and imaging. More than 50 THA member hospitals are now participating in the initiative.1
  • A 2017 study published in The Journal of the American Osteopathic Association found that emergency health care professionals have an inadequate understanding of the costs associated with routine care provided in the emergency room. The study is based on a survey of 441 emergency medicine professionals that asked them to identify the cost of care for three common presentations: abdominal pain, dyspnea, and sore throat. The authors of the study concluded that education related to costs, such as through computerized physician order entry, “is likely to improve efficiency and decrease costs to the patients as well as the health care system overall.”2
  • While clinicians feel a sense of responsibility around the cost of care that they prescribe to patients, they often don’t feel they have “the tools to know, the time to discuss, or the ability to impact how much things cost,” according to a survey of 571 clinicians, clinical leaders, and executives commissioned by the University of Utah Health. According to the survey results, 86 percent of respondents said physicians lack the training needed to discuss cost considerations affecting their patients. The study also found that while physicians feel responsible for the cost of care, they do not feel accountable for it.3

To reconsider treatment decisions, physicians who responded to our survey said data would need to be accurate, actionable, and easily accessible. They call for:

  • Measures that they can impact or are within their control (78 percent) 
  • Measures relevant to their service line or specialty (68 percent), particularly among specialists 
  • Specific action steps (56 percent) 
  • Data/information at the point of decision-making (43 percent) 
  • Reports accessible through regular practice workflow (39 percent) 

According to the results of our survey, most physicians are willing to manage health care costs. However, to successfully manage costs for the health system and patients, they likely need more complete information about the costs of treatment options. Experience suggests that supplying this data to physicians, whether independent or employed, can help improve their performance. All physicians are increasingly being measured by payers, including the Centers for Medicare and Medicaid Services (CMS), on their utilization and cost performance. Providing physicians with actionable cost and quality data could help them make more informed decisions and could lead to lower costs for health systems and patients.

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1 IllumiCare, Inc., Texas Hospital Association (
2 National Center for Biotechnology Information, US National Library of Medicine (
3 NEJM Catalyst and University of Utah Health (


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In the News

HHS issues guidance on direct-to-consumer ad transparency

In an October 15 speech to the National Academy of Medicine (NAM), US Department of Health and Human Services (HHS) Secretary Alex Azar announced a proposed rule that requires drug manufacturers to include list prices in their direct-to-consumer advertisements.

Under the proposal, manufacturers would have to share the list price (based on a public formula) for many drugs covered by Medicare or Medicaid—such as a full course of antibiotics, or a 30-day dose of medication—at the end of their televised advertisements. According to HHS, the 10 most-commonly advertised drugs have list prices ranging from $535 to $11,000 per month for a typical course of therapy. Manufacturers of drugs with prices less than $35 per month would not have to disclose prices in ads. The proposed rule requires manufacturers to use clear, readable language when sharing prices—and HHS will maintain a public list of drugs that do not comply.

Under Section 1102 of the Social Security Act (SSA), the HHS secretary has broad rule-making authority for Medicare and Medicaid, and Section 1871(a) instructs the secretary to release regulations that allow efficient administration of these programs. Provisions within the SSA also recognize the importance of administering Medicare and Medicaid in a manner that minimizes excessive spending. For the Part D program, Section 1860(k)(1) requires prescription drug plans to disclose the difference between the price of a dispensed drug and the price of the lowest-priced, therapeutically equivalent generic drug. According to the proposed rule, promoting pricing transparency for drugs covered by Medicare or Medicaid is necessary for the efficient administration of the programs.

In his NAM speech, Azar discussed several recent efforts to curb drug pricing, including:

  • Formally banning gag clauses. Azar reiterated how the president signed two pieces of legislation last week to ban “gag clauses,” which prevent pharmacists from telling patients how to reduce drug costs by paying out-of-pocket (see the October 16, 2018 Health Care Current).
  • Increased approvals for generic drugs. Prior to the May release of the administration’s “Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs,” a record number of generic drugs were approved during fiscal year (FY) 2017. Last week, it was announced that even more generic drugs were approved during FY 2018. According to Azar, the 2017 generic approvals alone will save consumers an estimated $8.8 billion this year.
  • New opportunities for Medicare Advantage (MA) plans to negotiate discounts for Part B drugs. Beginning in 2019, MA plans can start using step therapy, where patients have to try cost-effective treatments before moving to other, costlier therapies (see the August 14, 2018 Health Care Current). Additionally, starting in 2020, Medicare Part D plans will have the flexibility to use indication-based formularies, which can help Part D plans reduce drug prices and provide more tailored choices for patients (see the September 11, 2018 Health Care Current).

Prior to Azar’s NAM speech, the trade group Pharmaceutical Research and Manufacturers of America (PhRMA) released a statement committing to providing greater transparency about medication costs to consumers. PhRMA noted it enhanced its guidelines for direct-to-consumer advertisements on October 2, and all PhRMA members voluntarily agreed to the updated principles. According to PhRMA, all direct-to-consumer television ads that mention a drug by name should direct consumers to where they can find the drug’s list price, out-of-pocket cost, and financial assistance, if available. However, PhRMA remains concerned that requiring companies to explicitly state prices in televised advertisements, rather than providing directions for finding this information on a website, could discourage patients from seeking medical care.

The proposed rule for drug pricing transparency was released for public comment on October 18, and the guidelines are expected to become official on April 15, 2019. A new Deloitte RegPulse blog discusses the proposed rule, in addition to other efforts to reduce drug pricing.

Kentucky hospitals to use data-sharing to better treat babies in opioid withdrawal

The Kentucky Hospital Association recently collaborated with hospitals across the state to better meet the needs of babies born in opioid withdrawal. The rate of women diagnosed with opioid use disorder (OUD) has increased sharply during the last decade.

Hospitals across the state will begin sharing real-time information that will alert providers if a baby admitted into an emergency room had previously been treated for Neonatal Abstinence Syndrome (NAS). This data-sharing initiative could help physicians quickly identify withdrawal symptoms and treat these tiny patients more efficiently. This initiative will also allow physicians to coordinate care and support monitoring and follow-up efforts.

NAS is the medical condition caused when a baby experiences withdrawal from drug exposure in the womb. NAS can increase the risk of premature birth, seizures, and birth defects. Kentucky has one of the highest rates of NAS in the country—nearly 1,500 NAS cases were reported in 2016. According to the Kentucky Department of Health, the number of recorded NAS cases increased by 200 percent between 2010 and 2016.

Twelve other states have adopted similar programs targeting opioid use disorders after the first model was implemented in Washington State in 2012.

Low-income adults in Medicaid expansion states report better access to health care

In states that did not expand their Medicaid programs, 34 percent of Medicaid recipients and 40 percent of uninsured low-income adults report having unmet medical needs, according to a study published on October 15 by the US Government Accountability Office (GAO). The study, called the National Health Interview Survey (NHIS), measured access to health care among low-income adults in Medicaid expansion states and non-expansion states. GAO obtained 2016 estimates from the National Center for Health Statistics (NCHS), an agency within HHS, to conduct the study.

GAO estimates that nearly 5.6 million uninsured adults between the ages of 19 through 64 had incomes at or below the threshold for expanded Medicaid eligibility, and an estimated 3.7 million of them lived in one of the non-expansion states during the survey year. The study found that low-income adults living in states that expanded Medicaid were less likely to report having unmet needs, and low-income adults in Medicaid-expansion states were less likely than those in non-expansion states to face financial barriers when accessing necessary care. Those in expansion states were also more likely to report having a usual care location to access services or to seek medical advice, according to the study.

(Source: GAO, Access to Health Care for Low-Income Adults in States with and without Expanded Eligibility, September 2018)

More state Medicaid programs are pursuing outcomes-based contracts with drug manufacturers

On October 15, Michigan’s Department of Health and Human Services confirmed it asked CMS for permission to enter into outcomes-based contracts with drug manufacturers under the state’s Medicaid program. Outcomes-based contracts could require drug manufacturers to pay supplemental rebates if patients do not meet specified treatment benchmarks. Michigan submitted its State Plan Amendment (SPA) on September 25. If approved, Michigan would become the second state allowed to enter into outcomes-based contracts, joining Oklahoma (see the July 17, 2018 Health Care Current). Oklahoma had its amendment approved in June and has since signed three contracts with drug manufacturers.

Oklahoma’s SPA drew praise for aligning with the administration’s blueprint to lower drug pricing, which includes tying drug reimbursement to outcomes, among other provisions. Supporters say such contracts can give patients access to higher-cost medications more quickly and transfer risk to manufacturers. However, there are concerns that potential cost-savings might not be transferred to beneficiaries, and that contracts can apply to a limited subset of medications.

AMA publishes Digital Health Implementation Handbook

On October 17, the American Medical Association (AMA) released the Digital Health Implementation Playbook—a resource intended to help physicians adopt digital health technologies. The AMA also published a statement explaining that the playbook is a living document that contains key steps, leading practice recommendations, and other resources to accelerate digital adoption. It is aimed at physicians and administrators in practices of all sizes and specialties.

The playbook contains resources to assist with implementation of remote patient monitoring (RPM) devices, such as trackers and sensors, which help physicians capture patient-generated health data outside of the clinical setting. This information can help manage specific patient health conditions—and engage patients in their own care. According to Deloitte’s 2018 survey of US physicians, giving patients better access to care is seen as one of the top three benefits of virtual care technologies.

(Source: AMA, AMA Announces Playbook to Successfully Adopt Digital Health, October 17, 2018).

Breaking Boundaries

Strategies to prevent Alzheimer’s disease could be on the horizon

For years, researchers have faced many challenges in developing treatments for Alzheimer’s disease. Alzheimer’s is the most common form of dementia, and it affects 5.7 million Americans and 44 million people worldwide. While almost half of cancer drugs show a positive effect during clinical trials, nearly all Alzheimer’s therapies have failed so far.

Most Alzheimer’s therapies have traditionally been based on the amyloid theory. People with Alzheimer’s have a protein called “amyloid beta,” which accumulates in their brains. Tangles of protein called tau are also in the brain. In healthy people, these proteins typically wash away into spinal fluid, but in Alzheimer’s patients, they build up the brain. Scientists have focused their research and drug development on the amyloid plaque that forms in the brain tissue of patients. However, some stakeholders in the Alzheimer’s community are starting to believe that this theory might be inaccurate. While some patients have symptoms and no plaque build-up, others have plaque build-up with no symptoms.

Research shows that amyloid accumulation begins decades before the first symptoms appear. The brain appears to be able to handle the damage for years. It is only when brain plasticity is exhausted that cognitive symptoms begin to show. At that point, it’s too late to slow decline with any existing drugs. With this knowledge, two groups of researchers have recently launched two major studies focused on preventing Alzheimer’s.

The studies come from the Banner Alzheimer’s Institute in Phoenix. The Institute is working with clinics across the country to recruit healthy people between the ages of 55 and 75 to participate. The goal is to block the earliest steps of plaque formation in people who have a gene associated with Alzheimer’s. Participants get brain scans and memory and thinking tests every six months. They also receive experimental drugs, or placebo versions, for several years.

One study is enrolling people who have two copies of the gene, while the other is targeting people who have two copies or one copy of the gene plus imaging scans that show plaque formation has begun. Participants are either periodically injected with a drug intended to help their immune system clear plaque from the brain, or they are given an oral medication intended to prevent early plaque formation. These participants will be compared to control groups who are given placebos.

Analysis: Some experts on Alzheimer’s treatment and care think that these new studies could mark the beginning of a new phase of preventive research. Breakthroughs in genetics and imaging have allowed for this shift. Artificial intelligence (AI) also has a role in early detection. In an effort to understand writing patterns, an English professor at the University of Toronto input the complete works of Agatha Christie into a computer. An analysis of the text indicated that by the end of her career, at age 81, Christie had lost 20 percent of her vocabulary. While she was never formally diagnosed with Alzheimer’s, family members report that she had many of the signs and symptoms. Researchers are examining how writing and speech patterns could offer early clues about who might be at risk well before traditional medical tests could do the same.

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