Health Care Current: September 15 2015 | Deloitte US | Center for Health Solutions | Life Sciences has been added to your bookmarks.
Health Care Current: September 15, 2015
Moving beyond the hype of analytics
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
Moving beyond the hype of analytics in health care
As a long time sailor, I would never leave port without knowing the weather, tides, sea conditions, and my expected course. Once underway, I count on a flow of information from my GPS, charts, radar, and other instruments to safely navigate the waters. Sailing without these aids might work on a calm, sunny day, but conditions can change quickly.
The US health care environment can be likened to a stormy and unpredictable sea. It often amazes me how many health systems continue to sail their ships blindly. We talk about analytics but, as an industry, we are still just scratching the surface of that capability. When we will get beyond the hype and make serious investments that are now the standard in nearly every other industry?
Analytics, the systematic use of technologies, methods, and data to derive insights to enable fact-based decision-making, is viewed by many health care providers as essential to success in new value-based care arrangements. Some believe that the right analytics strategy will help them manage through many of the modern day problems of the typical US health system—from lowering unit costs, managing quality, and identifying at-risk populations to connecting with consumers and better understanding organizational performance.
As attention to analytics increases, what is driving investments and priorities? Are health systems making smart investments on analytics capabilities that may steer their organizations into the future or are they placing all their bets on outdated tools and technology?
The Deloitte Center for Health Solutions conducted a survey of mid-sized and large health systems (revenue greater than $500 million) to understand their current capabilities, investment priorities, and analytics approach and how analytics is moving from buzzword to actual investment. In Health system analytics: The missing key to unlock value-based care, respondents indicated that while success in value-based care will likely depend on effective analytics programs, their approach is fragmented, with limited coordination at the enterprise level. Other key findings include:
Findings from the survey suggest that value-based care is a major driver and investment focus for analytics. Improving clinical outcomes, population health, and supporting new payment models are among other top drivers. Several respondents indicated their current analytics capabilities are limited to reporting, data warehousing, and business intelligence. However, adding forecasting and advanced analytics capabilities, particularly for clinical and population health analytics are among top priorities. Those who have invested in more mature capabilities, such as forecasting, report greater success with analytics for their business functions. And, the more success organizations achieve, the more likely they are to invest in additional advanced analytics and benefit in the future.
Despite these investment priorities, some respondents indicated they do not have a clear picture of their organization’s total investment and spending on analytics. Fifteen out of the 50 respondents said they are unsure about their current and projected spending on analytics. This may be explained by an incoherent approach to the issue. Thirty out of the 50 respondents did not believe their organization has a clear, integrated strategy and vision for analytics deployment. Further, organizations indicated culture and politics and fragmented ownership as top barriers to adoption. These issues are realities for many health care systems today.
It is still yet to be seen where health systems’ analytics strategies will be in three-to-five years. Many health systems have capital exhaustion, especially around IT, but are not yet making meaningful investments in analytics. In the coming years the vast majority of health systems will need to respond to industry issues such as value-based care, consumerism, and increased regulation. Sailing the ship blindly will not be an option.
By Mitch Morris, MD, Vice Chairman, National Health Care Provider Lead, Deloitte LLP
HHS issues 340B guidance
On August 27, the Health Resources and Services Administration (HRSA) at the US Department of Health and Human Services (HHS) released draft guidance to clarify eligibility requirements for the 340B Drug Pricing Program, which allows certain hospitals to pay lower drug prices. The draft guidance would:
- Include new restrictions on which entities, drugs, and patients are eligible for the program. These restrictions could limit the scope of 340B and reduce savings for covered entities.
- Change qualifying prescriptions so that a prescription will qualify only if it is written as part of a direct encounter at the covered entity’s location; prescriptions from referring physicians or clinics would become ineligible.
- Add requirements on clinicians eligible to write qualifying prescriptions.
The draft guidance would update the definition of “patient” under the 340B program. Six conditions (listed below) would need to be satisfied for hospitals and other 340B organizations to receive discounts on drugs prescribed to eligible patients. In current regulations, only three conditions need to be met.
Analysis: The 340B Drug Discount Program was created in 1992 and requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices. Pharmaceutical companies must adhere to the program’s price discount rules as a condition of their participation in Medicaid. The Affordable Care Act (ACA) expanded eligibility for the program to allow additional types of entities to participate in the program. According to a recent Deloitte Center for Regulatory Strategies Reg Pulse blog post, over the past several years, Congress, the Administration, and health care stakeholders have been attempting to balance the program’s goals of providing drug discounts to entities that serve lower income populations, with definitions of qualified drugs, patients, and eligible entities that limit the expansion of the program.
The draft guidance does not change the overarching purpose of the program. But, if the new rules go into effect as drafted, certain hospitals could see a large decline in savings from the 340B program. The new contracting requirements may affect the eligibility of credentialed clinicians with admitting and/or health care privileges that are common throughout 340B hospitals.
The proposed changes also could reduce 340B savings for hospitals with infusion centers. Dispensing of or an infusion of a drug alone, without a covered entity provider-to-patient encounter, would not qualify an individual as a patient under the 340B program under this guidance. To keep those centers’ drugs eligible for the program, hospitals may have to either hire new personnel or enter into new contractual arrangements to write the prescriptions and supervise care and develop new operational processes.
Implementation & Adoption
CMS: 9.9 million consumers were enrolled in HIX plans at the end of June
Last week, the US Centers for Medicare & Medicaid Services (CMS) published the latest enrollment numbers for the public health insurance exchanges (HIX). It said that 9.9 million consumers were still enrolled at the end of June. This is consistent with the goal that HHS had for the end of 2015 (9.1 million). Most of the enrollees (7.2 million) signed up through the federally-facilitated exchange, and the other 2.7 million used a state-based exchange to obtain coverage.
Approximately 84 percent of the enrollees are receiving advanced premium tax credits through the HIXs, with average assistance of $270 per month. More than half of HIX enrollees (56 percent) are receiving cost-sharing reductions to help with out-of-pocket costs for deductibles, coinsurance, and copayments. To be eligible for cost-sharing reductions, enrollees must have an income between 100 and 250 percent of the federal poverty level ($11,770 to $29,425 for an individual in 2015) and select a silver-level plan.
Findings from the Deloitte Center for Health Solutions 2015 Survey of US Health Care Consumers highlight some differences between the HIX population and individuals with other types of coverage. Compared to individuals with employer, Medicaid, or Medicare coverage, HIX enrollees are more cost-conscious, price sensitive, and focused on finding a plan that offers good value and fit. Understanding these differences is key to knowing how to engage and equip this new group of health care consumers, especially as states and exchanges strive to retain HIX customers and prepare for subsequent waves of enrollees.
Related: In late August, CMS also published what plan each state has chosen to use for defining their essential health benefits (EHB) for 2017. The ACA defined a list of ten EHB categories that all plans in the individual and small group markets are required to cover. CMS allowed states to select a benchmark plan off of which the benefit parameters for these categories would be based. For 2014 through 2016, states’ EHB plans were based on plans from 2012. 2017 plans will be based on plans from 2014. As was the case for the first three years, most states selected one of the largest small group plans operating in the state for the EHB benchmark in 2017. Only one state chose one of the largest commercial HMO plans, and only three selected one of the largest state employee health plans as their benchmark. CMS will accept comments on the benchmark plans through September 30, 2015.
(Source: CMS, “June 30, 2015 Effectuated Enrollment Snapshot,” September 8, 2015; CMS, “Information on Essential Health Benefits (EHB) Benchmark Plans,” August 2015)
CDC: Fewer Americans are forgoing health care treatment due to cost
In 2014, only 4.4 percent of Americans decided to forgo medical treatment due to cost—a 1.5 percentage point decline from 2013. The US Centers for Disease Control and Prevention (CDC) published this finding from the first quarter of data from the National Health Interview Survey.
The number of Americans who did not get needed treatment due to cost reached a high during 2009 and 2010 (6.9 percent). Since then, the rate fell steadily and is now at a low not seen in roughly fifteen years.
The Deloitte Center for Health Solutions 2015 Survey of US Health Care Consumers helps provide more detail into the types of difficulties people report around paying for health care. In the last 12 months, 44 percent of health care consumers said their household’s spending on health care increased, and 35 percent of all respondents said they had difficulty paying for out-of-pocket expenses. Eight percent of individuals delayed or did not follow a course of treatment recommended by a medical provider due to cost in the past 12 months and only one in five said they felt financially prepared to handle future health care costs. This varied significantly by insurance status – while one quarter of insured respondents said they felt financially prepared, only 12 percent of the uninsured agreed. While increases in health insurance coverage may be preventing more individuals from forgoing care, affordability and individual responsibility for the cost of that care remains a concern among many health care consumers.
(Source: CDC National Center for Health Statistics, “Early Release of Selected Estimates Based on Data From the January-March 2015 National Health Interview Survey,” September 2015)
CMS to test value-based insurance design in Medicare Advantage
Earlier this month, CMS announced it will test a new cost-sharing model through the Medicare Advantage Value-Based Insurance Design (MA-VBID) initiative. MA plans will be allowed to offer supplemental benefits or cost-sharing reductions to enrollees who have one or more of seven qualifying health conditions (diabetes, congestive heart failure, chronic obstructive pulmonary disease, stroke, hypertension, coronary artery disease, mood disorders, and any combination of these categories).
CMS will test the MA-VBID model for whether it encourages MA enrollees to seek high-quality care while reducing costs. It will start in seven states on January 1, 2017. The program will run for five years. Qualifying MA plans may offer one or more of four design models.
Background: Historically, CMS required all MA plans to offer uniform benefit and cost-sharing designs. The MA-VBID model allows health plans to offer different benefits and cost-sharing designs while ensuring enrollees are protected through certain provisions (e.g., use of secret shoppers, audits, and opt-out clauses).
Lawmakers consider fix for Medicare Part B premium increase
Lawmakers are exploring ways to avoid the significant hike in Medicare premiums that could affect nearly one-third of Medicare Part B beneficiaries in 2016. This comes shortly after the Medicare Board of Trustees projected that monthly premiums would increase from $104.90 in 2015 to $159.30 in 2016 in their annual report to Congress (see the July 28, 2015 Health Care Current).
Much of this increase is due to growth in outpatient services. Another reason is a provision that shields most Part B beneficiaries (70 percent) from premium increases. The provision ensures that they only pay increases in Part B premiums if there are increases in Social Security benefits through cost-of-living adjustments (COLA). There is no COLA this year for Social Security because inflation levels are low. The remaining 30 percent—new enrollees, high-income beneficiaries, and enrollees who do not receive a Social Security check—are not protected by the provision. These enrollees will have to pay more to make up the difference.
Many middle-income Medicare beneficiaries would have to pay higher premiums. These include certain groups of federal retirees and many state government employees who are not covered by Social Security because they participated in defined benefit pension systems instead. Dual eligible enrollees are also not covered by the provision, so state Medicaid programs would be responsible for paying the increased costs.
Congress is considering various approaches to avoid the premium hike. In 2009, the House passed a bill to extend the hold harmless provision to everyone. This is being considered again this year. Alternatively, Congress may spread the premium increase over multiple years.
(Source: Centers for Medicare and Medicaid Services, “2015 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” July 23, 2015)
On the Hill & In the Courts
House E&C committee holds hearing on definition of “small group” employers
Last week, the House Energy and Commerce committee discussed the implications of expanding the definition of “small group” employers to include mid-sized employers. The small group market has traditionally included employers that have up to 50 employees. Beginning in 2016, the ACA expands that definition to include businesses with 51 to 100 workers. This would subject mid-size employers to new rating restrictions, benefit requirements, and cost-sharing limits under the small group insurance market.
Lawmakers have introduced a bill, Protecting Affordable Coverage for Employees (PACE), that would allow 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. The lawmakers aim to improve flexibility for states, avoid coverage disruptions, and avoid premium increases for employees in mid-size firms. The bill has bipartisan support from the committee.
The National Association of Insurance Commissioners (NAIC) has endorsed the PACE bill. Monica Lindeen, president of NAIC, said during her testimony that individual insurance commissioners should have the discretion to define small group for their state. However, Mike Kriedler, the Washington state Insurance Commissioner, said that insurers within the state are depending on the larger risk pool that would result if mid-size employers were added to the small group market to keep premiums from increasing. He also said changing the definition could disrupt the insurance market and harm consumers.
Background: Many mid-sized employers and health insurance industry leaders have raised concerns about coverage affordability and stability under the expanded definition. According to the American Academy of Actuaries, the small and mid-sized employers could see larger premiums if the definition is changed.
Report: 355,000 dual eligibles enrolled in demonstration projects
The Kaiser Commission on Medicaid and the Uninsured, part of the Kaiser Family Foundation, recently published a factsheet about the Financial Alignment Demonstrations, finding that nine states have enrolled nearly 355,000 beneficiaries in the program. The demonstration program is testing alternative care models for dual eligible beneficiaries and aims to contain costs and improve outcomes for that population.
CMS approved nine capitated financial alignment demonstrations in California, Illinois, Massachusetts, Michigan, New York, Ohio, South Carolina, Texas, and Virginia. It recently approved a demonstration in Rhode Island, but the state had not begun enrolling beneficiaries as of June 2015 (when the data were analyzed). Ohio has enrolled 56 percent of the eligible beneficiaries in its state, while other states such as New York and South Carolina have enrolled less than 3 percent.
Sixty-seven health plans are participating in the demonstration, and nine health plans (or their parent companies) are participating in more than one state. As in the commercial market, the number of plans beneficiaries can choose from varies by region and county within each state.
Background: As discussed in the August 4, 2015 Health Care Current, CMS is funding and managing an external evaluation of each demonstration under the Financial Alignment Initiative. The demonstration will evaluate how each state performed on quality measures, such as overall beneficiary experience of care, care coordination, and support of community living, as well as changes in Medicare and Medicaid costs. CMS uses demonstration projects to test and measure the effect of potential program changes. This project will measure the impact of new benefit management models for dual eligibles.
(Source: The Kaiser Commission on Medicaid and the Uninsured, “Health Plan Enrollment in the Capitated Financial Alignment Demonstrations for Dual Eligible Beneficiaries,” Kaiser Family Foundation, August 2015)
Around the Country
NASHP outlines strategies for measuring health care delivery demonstrations
The National Academy for State Health Policy (NASHP) summarized how state and health policy leaders can streamline data reporting to measure the impact of health care delivery demonstrations. The report highlights several strategies states can use to monitor and evaluate health delivery demonstration programs:
- Defined planning period: Planning periods allow states and federal officials to better align performance measure and evaluation criteria.
- Common set of performance measures: Jointly defined performance measures by state and federal agencies may streamline the evaluation process.
- Early communication: Routine communication between state and federal agencies working on the demonstrations may help leaders execute program goals and evaluations.
- Independent program evaluation experts: Including independent program evaluation experts in the process can help ensure the program reporting produces results that can be used by policymakers in the future.
- Shorter reports: By focusing and shortening monitoring and assessment reports, findings can be more useful to the stakeholders involved.
The report highlights case studies from Vermont and Texas. Vermont reduces provider reporting burden by using ACO measures from CMS in addition to its all-payer-all-claims database and a behavior risk survey to encourage quality improvement across health service areas. By contrast, Texas has implemented many demonstration projects and NASHP found little reporting coordination across the programs. In addition to measures used for quality improvement initiatives, the Texas Delivery System Reform Incentive Payment (DSRIP) and Financial Alignment Demonstration include more than 300 pay-for-performance measures for the more than 1,400 approved DSRIP projects in Texas.
(Source: Amy Clary, National Academy for State Health Policy, “Determining the Impact of State Demonstrations: Considerations for State and Federal Policymakers,” August 2015)
New strategies to assess risk and prevent suicide
A recent study in the journal Molecular Psychiatry shows that a combination of blood tests and mobile applications are more than 90 percent accurate at predicting thoughts or attempts of suicide. Researchers at Indiana University School of Medicine developed two apps for different purposes. One app examines an individual’s affective state (how an individual feels and experiences emotions) and one looks at suicide risk factors.
The apps ask questions about an individual’s physical energy level, personal feelings and accomplishments, and level of uncertainty about things. In a separate study, the researchers examined more than 200 men diagnosed with bipolar disorder, major depressive disorder, schizophrenia, or other psychiatric disorders.
During the study period, about 20 percent of the subjects went from no suicidal ideation to high levels of suicidal ideation. The researchers analyzed their blood samples to identify RNA biomarkers associated with suicidal thoughts. The blood test predicted suicidal ideation across psychiatric diagnoses with 72 percent accuracy. The mobile app for affective state predicted suicidal ideation across psychiatric diagnoses with 85 percent accuracy. The suicidal risk factors app predicted suicidal ideation with 89 percent accuracy. Integrating the blood test and the clinical information from the app raised the prediction of suicidal ideation across psychiatric diagnoses to 92 percent accuracy.
These findings are important in part because the biomarkers and clinical information apps do not require asking the individual if they have suicidal thoughts. Individuals who are suicidal often do not share that information with their care team. The study was limited to males diagnosed with psychiatric disorders, so it is not clear how well the tests would fare in a wider population. The app is ready for testing in emergency departments and other real-world settings.
Related: Earlier this summer, the Department of Veterans Affairs (VA) and National Institutes of Health published a study in the American Journal of Public Health showing that a computer algorithm with hundreds of variables for millions of VA patients could accurately predict small subgroups of patients at high risk of suicide. The suicide rate for veterans is higher than for the general population, and current practices that rely on physicians and other medical staff to identify high risk patients miss the majority of them.
The VA has a database to try to identify high-risk veterans through an electronic medical record. The algorithm was created using patterns from the database and was tested on a large population. While using algorithms to predict risk in health care is not new, this is the first time it has been studied to assess suicide risk at such a large scale. An important next step would be to put the data to use in actionable clinical guidance.
(Source: John F. McCarthy et al, “Predictive modeling and concentration of the risk of suicide: Implications for preventive interventions in the US Department of Veterans Affairs,” American Journal of Public Health, September 2015)