Health Care Current Library
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.
Health Care Current: September 17, 2013
Adding lasting value to the “fly-by” appointments
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.
Health IT: Adding lasting value to the “fly-by” appointments
By Harry Greenspun, MD, Senior Advisor, Health Care Transformation and Technology, Deloitte Center for Health Solutions, Deloitte LLP
Last week, my wife and I attended “Back to School” night at the local public school where our middle son, Luca, is now a sixth-grader. With seven classes to visit, we only had a few minutes in each before the principal would announce over the intercom that time was up and we had to move on. The teachers would introduce themselves, describe the curricula and goals at a high level, mention a few exciting opportunities and then send us on to the next room with a smile and handshake. Ordinarily, such a brief encounter would provide little value and we would be left with more questions than answers. What are his bigger projects? When are his tests? How can I find out how he is doing along the way? However, we left that evening fully prepared for the school year, because all that information is available electronically: every assignment, every form, every test result and every deadline, along with expansive resources, online texts and quick links to communicate with his teachers and staff. Reviewing my son’s scores, I can compare his results to the average results of his classmates, the county and the state, identifying successes and opportunities for improvement for him and with his teachers. We are fortunate to live in a county with excellent schools which, despite budget pressures, have managed to invest in technology to support our children’s education. While the program assumes students and parents have computers and Internet access at home, it makes accommodations for those who do not.
As a physician and having been a patient, I could not help but contrast this experience to health care. The time we spent with each teacher was very similar to a typical visit with a doctor. Yet at the end of an appointment, few doctors can say, “everything you need to know is available online, from test results to care plans, as well as an easy way to reach me to ask questions.” There are certainly notable exceptions at many extraordinary health care systems. But for decades, despite the availability of electronic health records (EHRs) and consumer engagement tools, the vast majority of doctors had no such capability. The tide, however, appears to be shifting.
Recent data show that not only is the adoption of EHRs growing, the movement is actually starting to grow at a faster pace. Moving from a historically glacial pace, adoption started to grow in the mid-2000s amid the Bush Administration’s call for the majority of Americans to have their health data available electronically by 2014, the establishment of the Office of the National Coordinator for Health IT and advocacy efforts across the health care industry. In 2009, with the passage of the Health Information Technology for Economic and Clinical Health Act (HITECH) provisions within the American Recovery and Reinvestment Act of 2009 (ARRA), funding grew for hospitals and doctors to become “meaningful users” of health IT, spurring further growth. This year, adoption among office-based physicians is projected to exceed 80 percent compared to 17 percent a decade ago.
Source: Centers for Disease Control and Prevention, “Use and Characteristics of Electronic Health Record Systems Among Office-based Physician Practices: United States, 2001–2012” http://www.cdc.gov/nchs/data/databriefs/db111.pdf
While the country needs this adoption to lower the cost and raise the quality of care, health care consumers also are demanding it. In the 2013 Deloitte Survey of U.S. Health Care Consumers, 71 percent of those surveyed indicated they preferred a physician who uses health information technologies (HIT) to share information with them, support clinical decisions, handle appointment scheduling, billing and record keeping over one who does not. Sadly, most physicians surveyed in the 2013 Deloitte Survey of Physicians did not use health IT tools at their primary work-setting:
Source: 2013 Deloitte Survey of U.S. Physicians
As the U.S. health system becomes more consumer-focused, providers will need to adopt tools that can turn an eight minute visit into an interaction that provides lasting value. Patients and caregivers need to enhance collaboration and clearly understand what is working and what isn’t and whether the system is delivering value. We have a long way to go. Just like in the classroom, having fallen behind, it will take a concerted effort to catch up.
Implementation & Adoption
Rite Aid to provide ACA and HIX enrollment education
Last week, retail pharmacy giant Rite Aid announced that, starting October 1, they will provide customers with in-depth resources on the Affordable Care Act (ACA) and free consultations to help guide them through open enrollment. Independent, licensed insurance agents will be available to advise consumers on health insurance exchange (HIX) eligibility and customers will have the option to enroll in a HIX plan at nearly 2,000 Rite Aid stores nationwide. Agents will also provide individuals with information on Medicaid eligibility in states that have chosen to expand their Medicaid program. Customers can obtain information from in-store brochures, via Rite Aid’s website, or through personal consultations with agents. Rite Aid has over 4,600 stores in 31 states and the District of Columbia.
Patient-centered outcomes research will soon get $114 million in funding thanks to PCORI
Last Tuesday, the Patient-Centered Outcomes Research Institute (PCORI) Board of Governors approved over $114 million in awards to fund clinical comparative effectiveness research (CER). The 71 awards will be given out over three years and will support studies that will examine improved care for patients with cancer, obesity, heart disease and mental health conditions, among others. In addition, the research will target the research will target family member and caregiver decision making, reducing health disparities and improving the delivery of healthcare. Institutions in 20 states and the District of Columbia will benefit from the awards. Including last week’s awards, made under PCORI’s five National Priorities for Research, the institute has approved more than $303 million since 2012 and will reach $400 million in total rewards by the end of 2013.
Healthcare.gov cloud software system to cost $35 million
The cost to operate a cloud-based software program that stores health insurance data as part of the ACA has tripled to over $35 million since 2011 according to a document released on Wednesday. Cloud-based computer systems store large amounts of data more efficiently and economically than conventional data storage methods and the data is accessible via the Internet. The cloud-based software, operated by Centers for Medicare and Medicaid Services (CMS) Center for Consumer Information and Exchange, powers the Healthcare.gov Plan Finder app, which helps individuals and small businesses compare health plans and will be used by federally-facilitated HIXs. Terremark, a subsidy of Verizon, received the $10.8 million contract in April 2011 to design Plan Finder. After 3 years and 7 modifications, the contract now stands at $35.5 million.
CMS delays DME requirement
Last week, CMS delayed for the second time Section 6407 of the ACA, the Durable Medical Equipment (DME) face-to-face provision, which requires physicians, physician assistants, nurse practitioners and clinical nurses to meet face-to-face with patients within a six-month time frame prior to ordering DMEs for patients. CMS announced it will communicate a new requirement date for medical personnel to comply with the provision sometime in 2014. Many providers and DME suppliers already comply with the requirement, but CMS acknowledged that some providers may need more time to establish compliance protocols.
On the Hill & In the Courts
House approves bill on income verification for HIX subsidies
The U.S. House of Representatives passed (235-191) legislation (H.B. 2775) requiring the U.S. Department of Health and Human Services (HHS) inspector general to certify that the agency has a system in place that can accurately verify that individuals are eligible for ACA insurance subsidies before those subsidies are paid. The bill, introduced in July by Representative Diane Black (R-TN), would deny advanced premium tax credits from being awarded to individuals until HHS can assure Congress that the system meets fraud-prevention requirements. This comes in response to the July 30 announcement by the administration that the HHS follow-up verification of individuals requesting subsidies on HIX will be delayed for a year to January 1, 2015. The HHS follow-up verification was designed to support states in their own verification process and the delay leaves state-based exchanges the option of verifying individuals’ reported information after subsidies are awarded.
OIG: CMS should create Medicare Part B drug rebate program to save money
The HHS Office of Inspector General (OIG) suggested that CMS develop a prescription drug rebate plan for Medicare Part B. According to the report released last Monday, a Part B drug rebate program could save $3.1 billion annually. The program would include prescription drugs typically administered in a physician’s office and include medications such as injectable cancer treatments, vaccines and inhalation therapies. Medicaid has already established a mandatory drug rebate program that recouped 45 percent of its pharmaceutical spending ($28 billion) via manufacturer rebates in 2011. While there are potential cost-savings associated with this approach, there are concerns that a new Medicare drug rebate program would require Congressional action, overtax agency resources and require significant changes to the Medicare program. In 2011, CMS spent $16 billion on prescriptions for Medicare Part B beneficiaries.
FDA requires new labels for opioids and more research to reduce abuse and misuse
The U.S. Food and Drug Administration (FDA) announced two new requirements for manufacturers of prescription pain medications that are designed to combat misuse, addiction, abuse and overdosing of extended-release and long-acting opioid analgesics (ER/LA opioids). The agency will now require new language be used to assist medical professionals in determining appropriate prescriptions of ER/LA opioids. This language will indicate that these medications should only be used “for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate” based on a patient’s personal medical history. A corresponding box label for ER/LA opioids will address accidental exposure, interaction with alcohol, Neonatal Opioid Withdrawal Syndrome and respiratory depression. Pharmaceutical companies have 30 days to submit their new ER/LA opioid labels to be in compliance with the new requirements in order to gain FDA approval. The FDA will also require that companies manufacturing ER/LA opioids conduct more research studies to assess the risks of misuse and abuse. The submission deadlines for the studies vary depending on the specifics of each study, with the latest submission deadline being June 2018.
Around the Country
Keeping track of state-level activity: useful resourcesKeeping track of state-level activity: useful resources
- DCHS analysis: preliminary number of health insurance carriers offering health plans in the individual HIX market by state, click here.
- Preliminary health insurance carrier plan rates by state, click here.
- Status of Medicaid expansion decisions by state, click here.
HIX navigators face criticism
With the October 1 open enrollment date right around the corner, states continue to prepare HIX navigators (i.e., community organizations, providers and businesses tasked with educating consumers about how to enroll in health insurance via the HIXs) for millions of consumers that are expected to enroll. However, the idea of HIX navigators continues to undergo scrutiny among state governments and Congress. At least 16 states have enacted or are considering legislation that would require more oversight of navigators, which may conflict with ACA provisions and could create more barriers to the enrollment process. Several state officials are concerned that improperly trained navigators may leak personally identifiable information or protected health information. Representatives from the U.S. House Energy and Commerce Committee (E&C) are demanding that the 11 states that received $67 million in federal grants on August 15 to assist with training and organization of their navigator programs disclose detailed reports regarding navigator training and responsibilities. HHS assistant secretary for legislation, Jim Esquea, responded in a letter to Fred Upton (R-MI), the Chairman of E&C, opposing the timing of the E&C committee’s request and expressing his concern that conducting these reports could interfere with state’s ability to prepare navigators for their role in open enrollment.
CA’s legislative body passes biosimilar bill, among others, for Governor to sign
California’s state Assembly and Senate passed numerous bills last Wednesday giving Governor Jerry Brown (D-CA) up to 30 days after September 13, when the legislative session comes to a close, to either sign or veto the bills. Notably, the state passed legislation (S.B. 598) that would authorize pharmacists to use their discretion in decisions to substitute a biolosimilar drug when filling a prescription for a biological product already approved by the FDA, unless a patient specifically requests the pharmacy not use substitutions. Opponents of the bill, including pharmaceutical manufacturers, lawmakers and other stakeholders, raise the issue of biological property rights and feel the bill is premature. FDA has yet to approve a biosimilar application, which would in accordance with the Biologics Price Competition and Innovation Act of 2009, decide which biological products and biosimilars are interchangeable. The California Public Employees' Retirement System board voiced their objection to the bill and plan to lobby Governor Brown to veto the bill. The FDA has found biosimilars to be clinically no different than the reference biological product and encourages their use, as they can be a lower-cost option for patients.
Cleveland Clinic will expand services by contracting with orthopedic practices
The Cleveland Clinic will partner with three orthopedic practices to create the National Orthopedic & Spine Alliance, which will provide bundled orthopedic and surgical care directly to employers. The Cleveland Clinic’s new venture will contract with the CORE Institute, operating in Arizona and Michigan; OrthoCarolina, operating in North Carolina; and the Rothman Institute, operating in New Jersey and Pennsylvania. The orthopedic practices will share clinical data with the goal of standardizing care, improving healthcare quality and reducing medical costs. In addition, the new contracts will provide more locations for services to employers and patients and will expand Cleveland Clinic’s market share throughout the aging population, where patients may need these orthopedic services more. The Cleveland Clinic already contracts with Walmart and Lowe’s to provide package deals for various cardiac services.
Mayo Clinic uses remote fitness monitors to show association between post-surgical care setting and length of stay on recovery time
A pioneering study conducted by The Mayo Clinic in Rochester, Minnesota found that using wireless technology may increase the speed of recovery and improve post-discharge outcomes for patients who have had heart surgery. Researchers placed fitness acceleration monitors on the ankles of elderly patients who had undergone coronary artery bypass grafting and valve repair or replacement to track their total number of steps taken each day. The monitors showed significant differences in mobility among patients who were later discharged to their homes independently compared with those discharged with home health care (HHC) support or to a skilled nursing facility (SNF). The number of steps on recovery day two for the home group was 675 vs. 108 for the HHC and SNF groups. Researchers also found that on day two, patients with a short inpatient length of stay (LOS) walked 818 steps on average compared to 514 and 223 steps for those with intermediate and long LOS groups, respectively. According to Dr. Albert Cheung of the University of Pennsylvania Perelman School of Medicine, “The application of wireless accelerometry to quantify physical activity has the potential to extend the capabilities of the physical therapy team, measure the effectiveness of rehabilitation regimens, quantify progress and improve the ability to predict operative risk.”
(Source: "Cook, David, et. al, " Functional Recovery in the Elderly After Major Surgery: Assessment of Mobility Recovery Using Wireless”, The Annals of Thoracic Surgery , September 2013)
Employers use reference price benefit designs to decrease patient volume at high-priced facilities
In response to increasing health care costs, many employers are hoping to influence consumer responsibility by implementing reference-pricing benefit designs which caps the amount they will pay for some procedures covered by their employer health insurance plan. Under this arrangement, employees must pay the difference between their employer’s contribution limit and the actual price charged by the hospital. These shifts in cost-sharing are designed to encourage workers to choose cheaper facilities and may indirectly encourage facilities to reduce prices to increase patient volume. A study conducted by the University of California, Berkley to analyze the impact of reference pricing on the use of and prices paid for knee and hip replacement surgery by members of the California Public Employees’ Retirement System (CalPERS) from 2008 to 2012 found that after the first year of reference-price implementation, surgical volumes for CalPERS members increased by 21.2 percent at low-price facilities and decreased by 34.3 percent at high-price facilities. Prices charged to CalPERS members declined by 5.6 percent at low-price facilities and by 34.3 percent at high-price facilities. Overall, CalPERS was able to achieve $2.8 million in savings in 2011 through reference pricing for its members.
(Source: James Robinson, Timothy Brown, “Increases in Consumer Cost Sharing Redirect Patient Volumes And Reduce Hospital Prices For Orthopedic Surgery”, Health Affairs, August 2013)
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