Health Care Current: September 16 2014 | Deloitte US | Center for Health Solutions | Life Sciences has been added to your bookmarks.
Health Care Current: September 16, 2014
Safe, high-quality, effective and efficient care
This weekly series explores breaking news and developments in the U.S. 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
Chasing the vision of safe, high-quality, effective and efficient care
I have been working with electronic health records (EHRs) for more than 25 years. If you asked around during the late 1980s, you would probably have heard from EHR proponents a vision of enabling safe, high-quality, effective and efficient care. Today, information technology has dramatically advanced, but the vision has not changed. So in 2014, why is it when we ask physicians and other clinicians about the value of EHRs, their answers range from lukewarm to downright cold?
The Deloitte Center for Health Solutions undertakes an annual survey of U.S. physicians to better understand their evolving perspectives, including those on EHRs.1 This year, the results were (again) somewhat disappointing but not terribly surprising.
It was encouraging to see that 56 percent of respondents have achieved Stage 2 of Meaningful Use (MU), and 26 percent are at Stage 1.2 But 18 percent report that they have not started the MU journey, and 70 percent of that group has no plans to do so in the future. And, while 70 percent of physicians indicated they think that EHRs enable analytics and 60 percent feel they support value-based care, other results indicate that the potential has not been realized.
Three out of four physicians surveyed3 report that EHRs increase costs and do not save them time. This survey is not alone in its findings: Through another recently released survey, Clem McDonald and colleagues found that physicians say that EHRs “waste an average of 48 minutes per day.”4 Part of me wonders if these physicians have forgotten the days of hunting down medical records and waiting for faxes. But those of us working with hospitals and physicians on a regular basis don’t need a survey to tell us things are not quite right. Just look at the rapidly growing profession of scribes—people who follow around doctors taking down their observations for recording in an EHR. Meaningful Use? Really?
So how did we get to the point where, despite an inspiring vision; prodigious investments of time and money; advances in computational and interface abilities; and more than 900 exhibitors each year at the Health Information Management and Systems Society (HIMSS) conference, many in the physician community still believe we have relatively little to show in the way of a true value-add?
I don’t believe there is a simple answer. We know physicians use technology in their lives: according to our survey more than 90 percent own smart phones. Yet only 24 percent report using mHealth at work. Security concerns, a confusing array of applications that are far from interoperable and a lack of time and reimbursement are all cited as issues.5 Perhaps the most significant factor is that many organizations implemented EHRs to achieve MU under a tight deadline with an equally tight budget. True clinical transformation with a careful examination of workflow and clinical roles, implementation of evidence-based and best practices and change management were often modest efforts. Many health systems automated legacy approaches to care and have not been able to achieve the benefits of MU.
There are many exceptions where health systems have taken the time and effort to use technology to achieve clinical transformation and true value was achieved. But our survey results and those of other researchers show we have a long way to go as an overall industry.
What can be done? Health systems should consider focusing on:
- Enhancing clinical systems already in place; this could help organizations meet challenges faced with shrinking reimbursement, rising consumerism, the move from volume to value, and enabling population health management.
- Continuing to invest in and work on having clinicians lead the transformation of care enabled by EHRs.
Checking the box on the MU application was not the finish line but rather just a milestone on the journey. Health care organizations should focus on using technology investments to realize the original vision—one that is more relevant than ever.
1 To read more about these findings and the survey methodology and to connect with the authors, visit: www.deloitte.com/us/2014physiciansurvey
2 Among physicians who are aware of the MU status at their primary work-setting
3 Among physicians whose primary work-setting has EHR that currently meets MU stage 1 or 2 requirements
4 Clement J. McDonald, Fiona M. Callaghan, Arlene Weissman, Rebecca M. Goodwin, Mallika Mundkur, and Thomson Kuhn, “Use of Internist's Free Time by Ambulatory Care Electronic Medical Record Systems,” JAMA Internal Med, Published online September 08, 2014
5 Deloitte Center for Health Solutions, 2014 Survey of U.S. Physicians
By Mitch Morris, MD, Vice Chairman and National Healthcare Provider Lead, Deloitte LLP
Implementation & Adoption
Last week the Kaiser Family Foundation released the 2014 Employer Health Benefits Survey, analyzing trends in employer-sponsored coverage, premiums, employee contributions and cost sharing. In 2014 average annual premiums for employer-sponsored individual coverage grew 2 percent to $6,025 (not statistically significant from 2013 rates), and premiums for family coverage grew 3 percent to $16,834. Average premium increases are on par with growth over the same period in wages (2.3 percent) and general inflation (2 percent). Additional results include:
The report continues to say that the changes in premiums reflect costs associated with implementation of the Affordable Care Act (ACA) and the effects of employer and insurer actions to engage consumers more with their health care. Wellness programs, higher-out-of pocket costs, narrow networks and reference pricing can give consumers a larger stake in their health care. Health care costs have also seen much slower growth in recent years due to slow economic growth, which is not expected to continue.
CMS: Medicare PGP demonstration led to reduced expenditures, decreased utilization and improved quality
The Centers for Medicare and Medicaid Services (CMS) recently published findings from an analysis of the impact of the Medicare Physician Group Practice (PGP) demonstration on health care costs and patient quality and utilization. Results from the study suggest that the initiative led to small cost savings, decreased utilization among beneficiaries and improved quality of care. The results were obtained using a sample of claims for more than 3 million person years in the Medicare fee-for-service (FFS) program between January 2001 and March 2010. The claims data were divided into an intervention group and a comparison group across 10 PGP sites. Across all 10 PGP sites, the average savings were $171 (2 percent) per assigned beneficiary. However, CMS paid participating organizations performance bonuses that equaled an average of $102 per person per year, which brought the net savings to $69 (0.8 percent) per beneficiary. Further analysis of the cost savings by cost component found that savings were primarily achieved in the inpatient facility setting.
The researchers concluded that the demonstration also reduced utilization and improved quality of care on most measures. The demonstration reduced the annual rate of hospitalizations and emergency department visits. In addition, the demonstration had a positive impact on 6 of 7 process quality indicators and met all four of diabetes indicators. CMS noted that since the PGP demonstration experience led to small reductions in Medicare expenditures, inpatient utilization, and improvement in quality indicators, similar results may be seen in the Medicare Shared Savings Program (MSSP) program. The study concluded that MSSP organizations might not see large savings initially. Qualitative analysis of the program indicated that future demonstration programs should work to increase patient engagement, expand support for care management programs, improve care transitions and expand the role of non-physician providers.
Background: The PGP demonstration was a value-based care initiative that offered physician groups financial incentives for cost savings and quality improvement through a shared savings approach. PGPs retained some of the savings depending on how well they performed on quality measures and cost savings. This program was a model for the MSSP.
(Source: Pope, Gregory, Kautter, John, Leung, Musetta, Trisolini, Michael, Adamache, Walter, and Smith, Kevin. Centers for Medicare & Medicaid Services, Office of Information Products & Data Analytics, “Financial and Quality Impacts of the Medicare Physician Group Practice Demonstration,” 2014)
Report: Generics saved U.S. health care system nearly $1.5 trillion over a decade
Last week the Generic Pharmaceutical Association published the sixth annual Generic Drug Savings in the U.S. study which estimated that generic pharmaceutical products saved the U.S. health care system nearly $1.5 trillion from 2004 through 2014. Cost savings in 2013 were an estimated $239 billion, which is more than three times the savings in 2004 ($74 billion). Certain therapeutic areas produced more savings than others:
Cardiovascular and nervous system generic products made up 57 percent of the savings during this period, saving the health care system approximately $140 billion in 2013 alone. The report also looked at cost savings over time to find that while new generic products entering the market saved $140 billion in 2013, 10-year old products (established generics) have continued to save the industry money, accounting for $98 billion in savings last year. According to the report, 86 percent of all prescriptions in the U.S. are for generic drugs.
Related: Last week a health policy brief published in Health Affairs with support from the Robert Wood Johnson Foundation highlighted drug shortage issues that face the U.S. health care system. From 2005 to 2010 drug shortages nearly tripled in the U.S., and shortages in generic sterile injectable drugs affected patients suffering from cancer, fighting infectious diseases and/or undergoing surgical procedures. The brief highlighted recent examples of shortages that have been discussed in the media, including those for saline, and drugs for chemotherapy and death penalty cases.
Analysis: Many experts say these savings expand the accessibility of medications to patients who typically cannot afford branded products. In some cases, like statins, the volume of prescriptions has increased when a generic is available, suggesting a pent-up demand. At the same time, with greater generic penetration into the share of prescriptions, branded pharmaceutical manufacturers are sometimes forced to innovate and diversify to survive. The flood of mergers and acquisitions over the past decades is a corollary of this need. With the loss of exclusivity and difficulty in developing new, innovative medicines, many companies are combining to acquire pipelines and/or expand their portfolios to compensate (see the May 6, 2014 Health Care Current).
One result of this competition is a constant drive to innovate. Instead of releasing “me too” products and line extensions, some pharma companies are focusing on new drug classes, with much of the current market value being generated from biologic products. With an approval pathway for follow-on biologics available, the industry will likely begin to see “savings” coming from new sources. And, it is not likely to be the same companies who make generic products that will make biologics.
Some experts view ensuring quality and safety as difficulties that have arisen out of the prolific use of generic products. Generic companies are not required to track adverse events for their products, so it can become difficult to identify the source of safety concerns and identify the specific products causing it. Branded companies are required by legislation to track adverse events and label their products with this information; they then can be held accountable for any problems. But, generic companies can only reliably be identified at the manufacturing site if there is a production issue. As a result, there has been discussion of requiring pharmacovigiliance and labeling for generic products.
(Sources: Generic Pharmaceutical Association, “Generic Drug Savings in the U.S.” 2014; Kara Stencel, Health Affairs, “Health Policy Briefs: Drug Shortages,” September 11, 2014)
On the Hill & In the Courts
According to USA Today, CMS has reversed the decision it made in August to no longer report publicly data on certain hospital-acquired conditions (HACs). Last year CMS made the decision to remove information on HACs from Hospital Compare, the website that allows consumers to view quality of care information on acute care hospitals. Even after the HAC data were removed from the website, CMS continued to provide the information in a publicly available spreadsheet on its website. In August the agency removed the spreadsheet from its website but has now said that it will repost the file later this year. HACs data include information on conditions such as a foreign body left in after surgery, pressure ulcers, falls and trauma and surgical-site infections.
Related: Some health care advocates say that re-posting the information on HACs is good for health care consumers and is another part of the larger health care transparency trend. CMS has released several datasets over the course of this year that highlight payment data and information on provider utilization. The January 28, 2014 Health Care Current explored the topic of CMS’s move toward transparency in allowing physician reimbursement data to be released on a case-by-case basis.
(Source: Jayne O’Donnell, USA Today, “Feds reverse course, will release hospital mistake data,” September 7, 2014)
FDA publishes Purple Book for biologics
Last week the U.S. Food and Drug Administration (FDA) published the Purple Book, which lists biological products, including “biosimilar products and interchangeable biological products.” Biological products are licensed under 351(a) of the Public Health Service (PHS) Act and their biosimilar or interchangeable products are licensed under 351(k) of the PHS Act. The book will likely be familiar to pharmaceutical experts and providers that use the FDA’s Orange Book, which lists approved drug products and their approved generic substitutions. The Purple Book is similar to the Orange Book in that it lists product names, proprietary names, licensure dates and product exclusivity dates for products and whether they are interchangeable or biosimilar to biologics. The book will be divided into two lists of products that were approved by the Center for Drug Evaluation and Research and the Center for Biologics Evaluation and Research.
Related: The Purple Book was released shortly after the FDA published guidance for determining biologic exclusivity last month. Products seeking approval under the 351(k) process are evaluated against reference biologics—biological products that are licensed under section 351(a) of the PHS Act. According to the guidance, reference biologics are given 12 years of exclusivity for their products, and biosimilar applications are prohibited from being submitted before four years after the first licensure date of the reference biologic. However, the FDA has not established the process for determining the date of first licensure for a biologic; this process is under debate.
Congress introduces legislation to reduce co-payments and coinsurance for MA enrollees
Last week lawmakers from both the House of Representatives and Senate introduced bipartisan legislation that would create a Medicare Advantage (MA) demonstration program based on value-based insurance design (VBID) concepts. The demonstration would evaluate how VBID concepts might reduce copayments and coinsurance for MA enrollees with chronic conditions who use high-value services and medication. If it passes, the legislation would allow plans that participate in the MA program to create VBID benefits and lower cost-sharing to encourage enrollees to use high-performing providers and evidence-based medications and clinical services. The bill also includes protections for seniors by prohibiting health plans from increasing cost-sharing to discourage their use of certain services. VBID attempts to protect consumers and motivate them to make healthy choices. Conceptually, VBID gives patients greater access to high-value (better outcomes) medications and services that they might normally forgo due to cost.
Related: This summer the National Pharmaceutical Council (NPC) published a report that outlines VBID tactics that payers and purchasers can deploy to promote patient access to specialty drugs. In the report, NPC outlined several ways in which VBID could be applied to specialty drugs: Impose only modest cost-sharing on high-value medications; reduce cost-sharing for patients with demonstrated need; add “reward the good soldier” or “step-edit with copayment relief” benefits; and use cost-sharing to encourage patients to select high-value providers and services. For more information, see the June 17, 2014 Health Care Current.
Around the Country
GAO: Arkansas’s Medicaid waiver did not meet budget-neutrality policy, raising cost concerns
In early August the U.S. Government Accountability Office (GAO) sent findings to the U.S. Department of Health and Human Services (HHS) from an analysis of the Arkansas 1115 waiver for Medicaid expansion. Also known as the “private option,” the program uses federal funds to provide premium assistance for individuals in a certain income range to purchase coverage on the state’s marketplace. In the report GAO concluded that HHS approved Arkansas’s waiver without ensuring it met federally mandated budget-neutrality criteria. HHS policy requires a waiver program to be no more costly to the federal government than it would have been without the demonstration and to implement a budget neutrality agreement to ensure federal spending limits are in place. GAO concluded that the HHS failed to meet budget neutrality policy because:
- HHS projected spending limits that are too high: GAO estimated the projected spending limit of $4 billion over Arkansas’s three-year demonstration period was $778 million more than if calculated using actual Medicaid payment rates, instead of hypothetical rates. According to GAO, HHS approved the spending limit without requesting supporting data.
- HHS allowed a flexible spending limit: HHS gave Arkansas the flexibility to adjust spending limits if program expenses exceed approved projections. Such flexibility was also granted to 11 other states and has not been given previously.
- HHS waived the cost-effectiveness requirement: HHS did not consider the cost-effectiveness of providing beneficiaries with help to pay for health plans premiums charged through the health insurance marketplace instead of getting their coverage through the state’s Medicaid program. Instead, the agency allowed Arkansas to apply its own test of cost-effectiveness. This increased the risk of not meeting budget-neutrality and put financial risk on the federal government.
GAO’s concerns center on allowing states to make projections based on assumptions with no adequate supporting documents and granting a flexible spending limit to states. The agency has called for Congress to give increased attention to the 1115 waiver process, specifically around fiscal responsibility. GAO incorporated technical comments from the HHS into the report, and attached a supplementary letter from HHS in which the agency stated it disagreed with the findings. HHS said that Arkansas provided sufficient explanation in how projections were calculated and that GAO’s estimates did not account for program changes resulting from Medicaid expansion.
(Source: U.S. Government Accountability Office, “Medicaid Demonstrations: HHS’s Approval Process for Arkansas’s Medicaid Expansion Waiver Raises Cost Concerns,” August 8, 2014)
Study: Massachusetts narrow networks trial sees lower spending, decreased quantity of service
This month researchers from MIT and Wellesley College published a study that found that Massachusetts state employees who participated in a narrow network experiment had lower spending on health care services. The researchers concluded that the lower spending was due both to lower utilization and prices. The researchers examined a cohort of Massachusetts employees enrolled in Massachusetts Group Insurance Commission (GIC) that was offered a three-month holiday on their premiums to enroll in a limited network plan during 2012 open enrollment. The employees that were not offered the premium holiday were used as the control group for the study. Using claims data for 2009 through 2012, the researchers examined how responsive individuals were to financial incentives to enroll in the plans and whether the incentives caused only healthy individuals to join the limited network plans. Results of the study showed:
- Individuals who switched were “very sensitive” to financial incentives: 10 percent of enrollees switched to plans.
- Switching to the limited network plans saved GIC 4.2 percent in the aggregate: Individuals who switched spent 36 percent less than those who did not.
- Visits to certain types of physicians increased: Primary care physician visits increased after the introduction of narrow networks, but the increased spending as an effect was offset by decreased visits to and spending on specialists.
- Travel distance changed: For primary care physicians, travel distance decreased, but travel distance to specialists and certain hospitals increased.
While some could be concerned that the three-month premium holiday given by GIC to the enrollees was not fiscally beneficial to the state, the researchers also determined that total employer premium contributions in 2012 were 1.2 percent lower than they would have been with no holiday from premiums for enrollees. The results of this study could be used for understanding patterns of care and cost in health insurance marketplaces, as health plans adopt narrower networks to lower the cost of their plans for price-sensitive consumers while not adversely affecting health care access and quality. Recently California passed a bill to require health plans to submit an annual report on new access measures related to timely receipt of care and network adequacy; this study could have implications for increasingly popular legislation such as this. For more on California’s new requirements, see the September 9, 2014 Health Care Current.
(Source: Jonathan Gruber & Robin McKnight, “Controlling Health Care Costs Through Limited Network Insurance Plans: Evidence from Massachusetts State Employees,” September 2014)
A small pilot study published in the journal Heart Rhythm shows that the combination of a web camera and software algorithms can detect atrial fibrillation (AF), a treatable but potentially dangerous heart condition that affects 33.5 million people around the world. The technology, developed through a partnership between the University of Rochester School of Medicine and Dentistry and Xerox, scans the face and can detect subtle changes in skin color that can reveal whether or not an individual is experiencing AF.
AF occurs when erratic cardiac electrical activity causes the upper and lower chambers of the heart to beat out of sync and results in poor blood flow to the body. The condition is not hard to diagnose but can go undetected in many people because it comes and goes or the common symptoms of fatigue and weakness are too general to diagnose. Approximately 30 percent of people with AF do not know they have it. The condition can be treated with medication or through a procedure that resets the heart’s electrical activity. If untreated, AF puts individuals at a significantly higher risk for blood clots and stroke.
Digital cameras have sensors that are designed to record red, green, and blue. Hemoglobin – a component of blood – "absorbs" more of the green spectrum of light, and this subtle change is detectable by the camera's sensor. Because the skin on the face is thinner than other parts of the body and blood vessels are closer to the surface, a digital camera can be used to capture the color changes that are not detectable by the naked eye.
Researchers hooked up 11 pilot study participants to an electrocardiogram (ECG) while they looked into the web cam. This enabled them to compare results from the facial scan to the electrical activity of the heart. The researchers found that the color changes detected by the web cam corresponded with an individual's heart rate as detected on an ECG. The irregular electrical activity of the heart associated with AF could be identified by "observing" the pulses of blood flowing through the veins on the face as it absorbed or reflected green light with each heartbeat. Use of this video measurement of pulse variability had a 20 percent error detection rate, while ECG measurements had a 17 percent to 29 percent error rate.
The intent of the pilot study was to test feasibility of the technology; the researchers are now in the process of evaluating a larger study population, including those without AF. The researchers predict that with the application of image stabilizing technology and the continuous improvement in the resolution of cameras, the error rate will eventually be even lower. As the technology evolves, it is possible that this tool could complement a standard ECG or enable remote diagnosis. It could also allow for continuous monitoring of patients at risk for or diagnosed with AF while they use a computer, smartphone or tablet.
Analysis: The July 1, 2014 Health Care Current My Take focused on the topic of biosensing wearables and emphasized the critical role that demonstrating device validity and reliability and a strong evidence base will likely play in the use of wearables. These types of studies are a positive sign that the industry is starting to appreciate that health care needs rigorous evidence to adopt technology. With the advent of many new promising technologies, it is appealing to want to rely on technology and new products as “magic bullets” that may solve many of our pressing health care challenges. We are now seeing greater emphasis on scientific validity to achieve regulatory approval and industry acceptance.