Health Care Current: October 6 2015 | Deloitte US | Center for Health Solutions | Life Sciences has been added to your bookmarks.
Health Care Current: October 6, 2015
A new health IT imperative: Consumer engagement
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
A new health IT imperative: Consumer engagement
Part of my job is to attend a lot of conferences. I’ve been to more meetings focused on the US health care system than I can count. Last month, I went to something different – Dreamforce – which has become the largest software conference in the world. Approximately 150,000 people descended on San Francisco (so many that they brought in a cruise ship to provide additional hotel rooms) as part of the annual gathering of users, vendors, and partners of Salesforce.com.
The Bay area is brimming with enterprises that are thought of as synonymous with consumer engagement. You cannot walk down the street without seeing the logos for Apple Inc., eBay, Uber, and countless other innovative companies. These companies, and others like them, have raised the bar for customer service while simultaneously developing service tools that consumers have come to think of as second nature in their lives.
The conference put a spotlight on health care and how the business case for health information technology (IT) has evolved over the years. The health IT industry, historically devoted to submitting claims, generating bills, and documenting clinical care, now must develop and leverage deeper relationships with patients and partners to deliver high quality care for value-based reimbursement and meet consumers’ needs and expectations. Now, understanding the consumer is an imperative.
Several health care trends are changing how consumers communicate and find information in the system. New entrants to health care market, such as retail clinics, telemedicine services, and others, have changed how consumers access care. The Affordable Care Act (ACA), the proliferation of high-deductible plans, and moves by employers to shift more costs to individuals also have combined to create higher demand for better tools and more cost transparency. But today, there is still a disconnect between consumers’ wants and the tools that actually exist. Meanwhile, in other industries, consumers are surrounded by sophisticated, data-driven tools that personalize and enhance their experience.
Successful consumer engagement and a differentiated customer experience has transformed many industries, and it can do the same for health care. Having more engaged consumers can increase growth and support deeper provider-patient relationships, help to provide better insights, reduce the cost to acquire patients, and increase brand awareness and loyalty. Engaged patients can provide more information, help to foster collaboration with providers, and support more efficient and effective care.
Data from the Deloitte Center for Health Solutions’ 2015 Survey of US Health Care Consumers suggest that a future where engaged consumers lead to effective, efficient, and satisfying care experiences and better health outcomes might not be that far away. Indeed, 44 percent of surveyed consumers are actively engaged in health care in some way.
Two trends emerging out of the survey make this point even more salient. First, consumers are increasingly tapping online resources. Trust in the reliability of information sources in health care is rising. One-quarter of consumers say they have looked at a scorecard or report card to compare the performance of doctors, hospitals, or health plans, compared with 19 percent two years ago.
Second, more than ever, consumers are relying on technology in health care. From 2013 to 2015, consumers’ use of technology to measure fitness and health improvement goals grew from 17 percent to 28 percent. Among consumers with major chronic conditions, tech-based monitoring has jumped from 22 percent to 39 percent in the last two years.
Unfortunately, the larger, more passive share of the market (56 percent of respondents) still includes consumers that are less engaged, either because they have no pressing need to be or because they are satisfied with the care choices they have made. Today, there is gap between what individuals are interested in doing with their care and what they have experienced. This implies that more health care consumers want greater say in their care, but have not yet made the move to be empowered health care consumers.
Use of digital tools and providing consumer engagement support may strengthen satisfaction and retention while also improving the value of health care services and products. Findings from the survey suggest that some consumers are not aware of resources that already exist, while others want tools that have not been developed yet. Some consumers may be interested, but find the quality and usefulness of available resources lacking. There is also variation in levels of trust – some consumers may only trust resources and tools that are suggested or provided by their doctor, while others may be comfortable with accessing information directly. Some may be interested in all forms of support, while others find only certain technologies appealing. Finally, consumers’ level of engagement may wax and wane as their health circumstances change.
Going beyond traditional views of an organization’s customer base to recognize the unique approaches and preferences of different consumer segments may be essential for accelerating consumer engagement. Specialized data analytics capabilities that can identify meaningful differences and patterns of change in consumers’ behaviors and preferences may help health care organizations respond nimbly to evolving consumer expectations.
During my time at Dreamforce, my phone was critical to navigating my days. I used it for my boarding pass and my room key, to summon cars, to recommend and secure dining options, and to shop for groceries and presents for my son Zander’s birthday party. It notified me when my flight was delayed, when my son Luca’s grades had been posted, and even when the dog was out for a walk. These applications and the underlying personalized data are woven into the fabric of my life. Ultimately, I expect them to become woven into the fabric of my health.
By Harry Greenspun, MD, Director, Deloitte Center for Health Solutions, Deloitte LLP
CMS starts regulatory process for MACRA
Last week, the US Centers for Medicare and Medicaid Services (CMS) released a Request for Information (RFI) on the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA passed earlier this year (see the April 21, 2015 Health Care Current) and fundamentally changes how Medicare provider payments will be set in the future.
The new Merit-Based Incentive Payment System (MIPS) and alternative payment models (APMs) are the focus of the RFI from CMS. The legislation created the outlines of these programs and established some criteria, but many of the operational requirements and key definitions that will determine providers’ Medicare payments under MACRA will be defined in the regulatory process.
For MIPS, some of the questions asked in the RFI include:
- Which approach should CMS use to identify professionals participating in the program (e.g., via National Provider Identifier, Tax Identification Number, some combination of the two, or a new MIPS identifier)?
- Which categories should CMS use to measure the quality of care provided by participating professionals?
- How should CMS measure meaningful use of electronic health records?
- How should CMS measure clinical practice improvement?
- How frequently should CMS provide feedback to providers on their performance?
The questions related to APMs were largely focused on a central issue: What should be considered an eligible alternative payment model?
Over the next year, the Administration is likely to increase regulatory activity related to MACRA. For example, MACRA directs the Administration to post a list of episode groups and related descriptive information that will drive coding changes required under the new law by October 13, 2015. The new codes are intended to help measure resource use more effectively and will be required for Medicare claims submitted on or after January 1, 2018.
Analysis: 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 reimbursement system.
According to a recent Reg Pulse blog post, CMS kicks off regulatory process on new Medicare payment law, implementation of MACRA will be a major strategic issue for hospitals and hospital systems that own physician groups because the law affects payments for services under Medicare’s Physician Fee Schedule. It also is expected to encourage health systems and physician groups to participate in APMs such as accountable care organizations (ACOs) and medical homes, presenting strategic opportunities for hospitals interested in acquiring or entering other arrangements with physician groups. The law will likely present operational challenges, including significant changes to coding systems for claims, new care episode groups, patient condition groups, and patient relationship groups starting January 1, 2018.
Implementation & Adoption
US health care system transitions to ICD-10
Last Thursday, October 1, 2015, the US health care system joined many other countries when it converted from the 9th to the 10th version of the International Classification of Diseases, or ICD-10. This comes after the transition was delayed three times, most recently in March 2014.
ICD-10 adds thousands of codes for providers to describe patient illnesses and injuries. The previous set had approximately 14,000 codes, and ICD-10 has more than 68,000. CMS explained on Thursday that the new system will allow health care providers to capture more information on their patients’ health statuses, which will improve patient care and public health surveillance in the long term. CMS is monitoring issues and systems to address problems early through the ICD-10 Coordination Center.
It will be several weeks until CMS and other stakeholders will know how well the transition is going. Providers often wait several days to submit their claims, and Medicare claims can take days to process. Medicaid claims can take as much as a month to be submitted and processed.
Analysis: In a recent blog post, Preparing for life after ICD-10 implementation, Christine Armstrong and Christi Skalka of Deloitte Consulting LLP explained that go-live is just the beginning. Even with the work that organizations have put into planning, organizations should prepare for some challenges after the transition by assessing the highest risk areas. Challenges could include operational disruptions and technological complexities and demands, as well as financial impacts like cash flow interruptions and increased denials or underpayments.
Commonwealth Fund: Out-of-pocket amounts are the most important factor for HIX enrollees selecting a plan
The Commonwealth Fund’s Affordable Care Act Tracking Survey, conducted from March to May 2015, found that 66 percent of adults enrolled in health insurance exchange (HIX) plans for the first time or after switching said that the premium amount or deductible and copayments were the most important factor in making their choice.
Related: The survey also found that individuals enrolled in HIX plans were more likely to know their premium amounts than those with employer-sponsored insurance. Recent findings from Deloitte’s 2015 Survey of US Health Care Consumers echo this finding. Seventy-six percent of HIX enrollees responding to the survey said that the overall amount they have to pay in terms of premiums, deductibles, and copays was an important factor when they chose their current plan. And, while HIX enrollees are less confident they can get affordable care and feel less prepared financially to handle their future health care costs, they have a better understanding of plan benefits and costs than individuals with employer or Medicaid coverage. Fifty-one percent of HIX enrollees said they had a good understanding of the benefits in their plan when they enrolled, as compared with 47 percent of individuals with employer coverage. These results suggest that HIX consumers may be more actively engaged in the buying process.
(Sources: Sara R. Collins, Munira Gunja, Petra W. Rasmussen, Michelle M. Doty, and Sophie Beutel, The Commonwealth Fund, “Are Marketplace Plans Affordable? Consumer Perspectives from the Commonwealth Fund Affordable Care Act Tracking Survey, March–May 2015,” September 2015; Sara R. Collins, Munira Gunja, Michelle M. Doty, and Sophie Beutel, The Commonwealth Fund, “To Enroll or Not to Enroll? Why Many Americans Have Gained Insurance Under the Affordable Care Act While Others Have Not,” September 25, 2015)
CMS awards $685 million to 39 organizations for Transforming Clinical Practice Initiative
Last week, the CMS Innovation Center announced that it is giving $685 million to 39 physician groups, health systems, and other organizations as part of the Transforming Clinical Practice Initiative. The initiative is focused on creating a more collaborative learning and training culture among physicians and helping physicians redesign their practices and develop new strategies for improving health outcomes and coordination of care. CMS projects that the initiative will save $1-5 billion and prevent 5 million avoidable hospitalizations over four years.
The CMS Innovation Center will oversee the new initiative, which made awards under two cooperative agreements:
Background: The initiative will provide 150,000 clinicians with incentives, tools, and information over the next four years. CMS aims to move the health care system from one based on volume to one based on outcomes and value by giving providers greater access to information, expanding use of new communication channels between patients and providers, enhancing care coordination, and increasing the use of electronic health records.
GAO: CMS needs more oversight of Medicare Advantage plans’ provider networks
The US Government Accountability Office (GAO) released a report that found that insufficient oversight of Medicare Advantage (MA) networks may lead beneficiaries to believe their networks have more physicians than there actually are or that the physicians in their network are more available than they actually are. The findings suggest that more review, verification, and authorization practices of MA network adequacy could improve beneficiaries’ access to care.
The GAO issued four key recommendations to CMS:
Background: Some MA plans have narrowed their network of providers to maintain low prices and remain competitive in the market. Advocates have expressed concern that beneficiaries may not know when changes are made to their network. GAO studied CMS’s practices and procedures by reviewing internal CMS protocols and conducting interviews with agency officials and representatives from medical associations and consumer advocacy groups.
Reaction: The US Department of Health and Human Services (HHS) agreed with all of GAO’s recommendations. In a letter to GAO, HHS identified steps it is taking to mitigate the concerns outlined in the report. HHS also offered potential solutions for the areas that need improvement. For instance, HHS is considering creating a template that plans may use to notify their enrollees of provider changes.
(Source: US Government Accountability Office, “Medicare Advantage: Actions Needed to Enhance CMS Oversight of Provider Network Adequacy”, August 2015)
NEHI roundtable highlights potential and barriers facing greater use of real-world evidence
Last month, the Network for Excellence in Health Innovation (NEHI) published results from a roundtable to identify some of the major barriers to generating and using real world evidence (RWE). RWE is medical evidence that comes from outside of clinical trials and from patients in real life settings. Instead of relying only on randomized clinical trials, where patients are often similar to one another and data collection is difficult to control and monitor, RWE relies on many different sources and comes in different formats.
The roundtable participants identified some of the fundamental barriers to greater use of RWE:
Today, multiple stakeholders are interested in using RWE for coverage, new therapeutic applications, and better quality. Health plans are leveraging RWE data to make decisions about what to cover and pay for. Patient advocates are interested in the potential for RWE to get to more targeted treatments. Greater use of RWE may also help improve care quality, add strength to safety and efficacy information being produced by randomized clinical trials, and get treatments to patients faster if the information helps demonstrate value to patients, prescribing physicians, and health plans.
Multiple federal agencies are working to advance greater use of RWE. The federal government announced earlier this year that it will open Medicare data to qualified researchers. The Patient-Centered Outcomes Research Institute, through PCORnet, aims to connect 111 clinical data research networks and 20 Patient Powered Research Networks so that data can be used across the network to enhance research and accelerate analysis. Another well-known initiative is the Blue Button program that was started by the Veterans Health Administration. It allows patients to download their personal health information and to add their information to data pools on a volunteer basis.
To meet the potential that RWE has to change the way evidence is collected and used, the data will not only need to come from more sources, but it will need to be woven together from different sources. This may require organizations across the system to collaborate to share data more often. Interoperable systems for collecting and sharing information will also be necessary to meet this goal.
(Source: NEHI, “Real World Evidence: A New Era for Health Care Innovation,” September 2015)
CMS announces new innovation model for Part D Prescription Drug Plans
Last week, CMS announced the Enhanced Medication Therapy Management (MTM) model, which aims to improve medication use among Medicare Part D beneficiaries. The Enhanced MTM model will include additional incentives for Prescription Drug Plans (PDPs) to create innovative programs. Only stand-alone PDPs in five regions will be eligible to apply. The agency will request applications for participation in the model later this fall, and the program will launch in 2017. The pilot may be expanded to other Part D regions if it works.
The four overarching goals for the program are to:
- Improve compliance with medication protocols to ensure that doctors and other caregivers are prescribing proper medications and that they are used properly by the patient
- Reduce adverse events related to medication use (e.g., duplicative or harmful prescription drug combinations)
- Enhance coordination and communication among prescribers, pharmacists, caregivers, and patients
- Increase patient engagement and improve patient education about the prescriptions they are using
The new model will give participating stand-alone PDPs increased flexibility to target MTM services to beneficiaries based on conditions and varying levels of risk. CMS will pay plans upfront to conduct more extensive MTM interventions better tailored to beneficiary needs. CMS will track plans’ performance on value and data reporting requirements and will pay a bonus to the plans that perform best.
Background: The Medicare Prescription Drug, Improvement and Modernization Act in 2003, which added the prescription drug benefit to Medicare, included the MTM program. The goals of the program are to optimize therapeutic outcomes and avoid unnecessary hospitalizations and adverse events. CMS requires plans to offer a minimum level of MTM services to beneficiaries, but many believe that the program needs improvements to realize its goals.
Lawmakers introduce bills to repeal the Cadillac tax on high-cost plans
Congressional lawmakers have introduced four bills to repeal the tax on high-cost employer-sponsored insurance plans, frequently referred to as the “Cadillac tax.” While the tax does not go into effect until 2018, many stakeholders have grown increasingly concerned about its impact on employer-sponsored health coverage. The fours bills would repeal the excise tax, and one bill in the House would also repeal the requirement that employers include the value of health coverage on employee’s W2 forms.
None of the bills include provisions to replace the federal revenue that the Cadillac tax is projected to generate. However, one of the Senate bills does say that the revenue loss should be offset with other policies. Last week, the Joint Committee on Taxation updated its cost estimate of the repeal – $91 billion from 2016 to 2025. In 2018, the first year the tax would go into effect, repealing the tax would cost $2.2 billion in forgone revenue to the government. But, this would grow to $20.9 billion by 2025 as the tax is expected to impact more employers by then.
President Obama likely would veto any bill that repeals the tax without replacing the revenue. To date, none of the bills has been considered in a congressional committee, and leaders in the House and Senate have not announced plans to hold votes on any of the bills.
Last week, Democratic presidential candidate Hillary Clinton said that she supports repealing the Cadillac tax and encouraged Congress to pass a bill to do so. She said that proposals on prescription drug prices and health care affordability that she has put forward would cover the cost of repealing the tax. Democratic presidential candidate Bernie Sanders also opposes the tax and has signed on to Senator Sherrod Brown’s bill to repeal the tax. None of the Republican presidential candidates have taken a public position on the tax.
Analysis: The Cadillac tax was included in the ACA to help pay for the ACA’s health coverage expansion and help control the growth of health care costs in the private health insurance market by removing incentives for employers to offer more robust health benefits. It applies to all employer-sponsored coverage, whether self-funded or fully insured. In 2018, the Cadillac tax thresholds are set at $10,200 for self-only coverage and at $27,500 for all other types of coverage. The value of health benefits exceeding the Cadillac tax thresholds will be subject to a 40 percent non-deductible excise tax.
Forthcoming findings from Deloitte’s 2015 Survey of US Employers highlight that most employers expect the Cadillac Tax to influence their benefits strategy. Despite this expectation, about 63 percent of employers have not calculated their exposure to the tax or modeled to determine the first year that the tax will apply. A recent survey from Kaiser Family Foundation also found that as many as one-in-four employers would be susceptible to the tax in 2018 (see the September 1, 2015 Health Care Current).
On the Hill & In the Courts
Congress passes law to make small group definition expansion optional for states
Last week, Congress approved a bill to make the January 1, 2016 deadline for expanding the definition of small group employers optional for states.
The small group market has traditionally included employers with up to 50 employees. The bill allows states to continue using their current definition for employers in the small group health insurance market, instead of expanding the definition to employers with 51-100 employees, which the ACA mandates beginning in 2016.
This comes shortly after the Congressional Budget Office (CBO) estimated that most states would keep their current definition, exempting most employers with between 51 and 100 employees from ACA requirements. As a result, CBO projects that federal revenues would increase $400 million over the next decade (see the September 22, 2015 Health Care Current).
NGA: Data systems can reduce costs of Medicaid super utilizers
The National Governors Association (NGA) published an issue brief explaining how states can use data to identify “frequent flyers” in Medicaid and find better ways to meet their needs. These “super utilizers” are the five percent of patients that account for more than half of Medicaid expenses. These tend to be patients with complex needs; some of them have conditions that might be better managed (yielding lower costs and better outcomes) through early identification and better preventive and well-coordinated care.
States trying to reduce the costs of providing care to these beneficiaries need ways to identify them, understand their needs, and know how they interact with the health system. NGA worked with six states and Puerto Rico on how to use advanced data analytics to develop effective programs and policies for complex care patients:
- Understand complex need populations: States can analyze Medicaid claims data to understand the breadth and scope of complex care populations within their borders. All of the states working with NGA used these analyses to define their super utilizer population and outline goals for meeting their needs.
- Identify and target specific patients: States can use data analysis to identify beneficiaries most likely to benefit from intervention. Additionally, targeted outreach can help locate and engage individual patients.
- Execute effective management and evaluation: States can monitor and evaluate the outcomes and costs for target populations using data.
The states working on this initiative had limited data and rudimentary analytics systems. Over time, many states aim to have access to better data and more sophisticated predictive analytics. Demonstrated improvement in care and reduced costs may help encourage investment in these programs and further expand their effectiveness.
(Source: F.Isasi. “Using Data to Better Serve the Most Complex Patients: Highlights from NGA’s Intensive Work with Seven States,” National Governors Association Center for Best Practices, September 2015)
Around the Country
CMS gives $110 million to expand state and regional efforts to improve patient safety
Using funding from the Partnership for Patients initiative authorized by the ACA, CMS announced it will give $110 million to 17 national, regional, or state hospital associations and health care organizations. The funding will support efforts to reduce preventable hospital-acquired conditions and readmissions.
Physicians, nurses, hospitals, employers, patients, and advocates can voluntarily join the Partnership for Patients. It is a federal and state effort to make hospital care safer and less costly. Since it launched, most US hospitals have joined. As a result, HHS estimates that 50,000 fewer patients died and approximately $12 billion in health care costs was saved by reducing hospital-acquired conditions from 2010 to 2013.
The funding will go to Hospital Engagement Networks (HENs), which identify effective care improvement methods and disseminate them to hospitals and other providers. The 17 organizations will be required to:
- Provide training programs to teach and support hospitals to improve patient care
- Support hospitals with technical assistance to measure quality improvement
- Establish, implement, and improve monitoring systems to track hospital progress in meeting defined goals
New technologies offer hope in fighting flu
New studies highlight progress in the fight against influenza. Recently researchers at the National Institute of Allergy and Infectious Diseases (NIAID) reported in the journal Nature Medicine that they have made progress in reaching the goal of a universal flu vaccine. They designed a vaccine that protects animals against both H1 and H5 strains of influenza. In other flu research news, Vaxart Inc. is working on pill-based vaccines and found one of their flu vaccine formulas appears to trigger an immune response in people.
A pill could make it easier to manufacture, distribute, and encourage the flu vaccine: While some vaccines work well when given orally, scientists will need to come up with a different way to get the flu gene into the intestines and have the immune system recognize it as foreign so it can begin producing antibodies. In an early phase 1 safety study with 24 volunteers, nine out of 12 of the people who got the vaccine built up enough antibodies to be considered protected against the flu, according to the recent study published in the journal Lancet Infectious Diseases. Manufacturing and distributing seasonal flu vaccines and encouraging people to get their vaccine could be greatly improved if there was an oral tablet alternative to the flu shot and mist.
A universal flu vaccine could increase vaccine coverage: Flu vaccines are developed every year based on the best predictions of which strains will circulate during that flu season. Unfortunately, in some flu seasons, the available vaccines are not well matched to the circulating strains. It can be difficult for vaccine developers to know exactly which strains are going to be most prevalent months in advance of the flu season. This can result in high rates of flu. Even in young, healthy people, the flu can be debilitating and cause them to miss work and/or school. In young children, older adults, and people with chronic conditions or other risk factors, the flu can lead to hospitalization and even death.
A “universal” flu vaccine could stave off all (or at least most) strains of the virus for years at a time. The recent NIAID study includes H3 viruses, which have a completely different structure. However, their progress is a step in the right direction toward a universal vaccine.
Analysis: Flu season is upon us and the US Centers for Disease Control and Prevention (CDC) recommends that everyone six months and older get a flu vaccine. Last year’s flu season was particularly serious, with older adults experiencing the highest rate of hospitalization due to flu in a decade, and 145 children dying from flu. CDC officials say that this year's flu vaccine should be better targeted with the circulating strains of the virus than last year. Unlike last year, this year’s vaccine will target the sub-strain of the virus that that circulated last year – H3N2 – which is expected to circulate this year.
While a universal flu vaccine would be a major innovation in fighting flu, smaller victories (e.g., giving the people the option to take a pill rather than a shot or spray) represent important milestones in understanding the flu and decreasing complications and death. Given the seriousness of the flu and the resources it takes to promote vaccination every year, improved production of the seasonal flu would represent major advancements in public health until a universal flu vaccine could be realized.
(Sources: HM Yassine et al, “Hemagglutinin-stem nanoparticles generate heterosubtypic influenza protection,” Nature Medicine, August 24, 2015, David Liebowitz et al, “High titre neutralizing antibodies to influenza after oral tablet immunisation: a phase 1, randomised, placebo-controlled trial, The Lancet Infectious Diseases, September 2015)