From The Staff

Health Affairs Briefing: The Care Span For The Elderly And Disabled


May 24th, 2012
by Chris Fleming

On Tuesday, June 5, Health Affairs will hold a briefing to discuss its June 2012 issue, “Focus On The Care Span For The Elderly And Disabled.” The volume explores a wide range of topics — from avoidable hospital admissions and readmissions, to coordination of care for dual eligibles, to reforming Medicare payment for skilled nursing facilities, to a rise in Medicare enrollees being held in hospitals for observation. The issue received funding support from The SCAN Foundation.

Please join us for a briefing at the National Press Club on Tuesday, June 5, 8:00 a.m. – 1:00 p.m., as we unveil the issue. Panels will examine:
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  • Improving The Coordination Of Care For People In Medicare And Medicaid
  • Innovations In Care Delivery
  • Emerging Issues In Care And Coverage
  • Care For Advanced Illness And Toward The End Of Life Read the rest of this entry »

Most Individual Polices Would Not Meet Affordable Care Act Standards


May 24th, 2012
by Chris Fleming

More than 11 million Americans below the age of 65 are now covered by private individual health insurance plans. A new study, released yesterday by Health Affairs as a Web First, measures the actuarial value (the percentage of medical bills an insurance company pays) for a sample of 2010 health plans offering group and individual policies, and finds that the majority of individual plans fell below the minimum standards and benefits required by the Affordable Care Act of 2010.

The Affordable Care Act sets up four tiers of health plans for consumers to purchase, ranging from “platinum” (90 percent actuarial value or better) to “bronze” (60–69 percent). In the Health Affairs study, Jon Gabel and coauthors found that the average actuarial value for group health insurance plans was 83 percent—safely in the “gold” range. For individual insurance plan values, the authors found that 51 percent of the policies they examined had an actuarial value of less than 60 percent, the bottom of the “bronze” range. These “tin” plans had benefits and values below the minimum requirements established under the Affordable Care Act for future state-based exchanges, write Gabel, a senior fellow in the Health Care Research Department at NORC at the University of Chicago, and colleagues at NORC and Towers Watson. Read the rest of this entry »

How The ACA Would Have Cut 2001-08 Out-Of-Pocket Spending Under Individual Coverage


May 18th, 2012
by Chris Fleming

Currently, individual health insurance typically has less generous benefits than employment-related insurance. However, under the Affordable Care Act, individual insurance will probably become more generous and more like employment-related insurance. For a Health Affairs May 16 Web First study, Steven Hill of the Agency for Healthcare Research and Quality compared out-of-pocket spending on health care between individual and employment-related insurance, controlling for numerous characteristics such as health status. Then he simulated the impact of full implementation of provisions of the Affordable Care Act on adults who currently have individual insurance, including important subgroups: adults with chronic conditions, the near-elderly (ages 55–64), and low-income populations.

If adults who had individual insurance during 2001–08 had instead had benefits similar to those under the Affordable Care Act, their average annual out-of-pocket spending on medical care and drugs might have been $280 less, Hill found. The near-elderly and people with low incomes might have saved $589 and $535, respectively. An important improvement would have been the reduced probability of incurring very high out-of-pocket spending. Read the rest of this entry »

The Latest Health Wonk Review


May 15th, 2012
by Chris Fleming

A belated tip of the hat to Hank Stern’s  Health Wonk Review at Insure Blog. Hank offers a nice collection of posts, including Diane Meier’s Health Affairs Blog post on Amy Berman’s Narrative Matters essay and overcoming barriers to palliative care. Happy reading!

 

Health Policy Brief: Workplace Wellness Programs


May 11th, 2012
by Chris Fleming

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation examines trends in workplace wellness programs and the potential impact of provisions of the Affordable Care Act of 2010. About two-thirds of companies that offer health benefits to workers also provide a wellness program, such as health-risk assessments and screenings for high blood pressure and cholesterol, tobacco cessation, and weight management.

In 2014 a provision of the Affordable Care Act will expand employers’ ability to reward employees who meet health status goals by participating in wellness programs. In effect, that will mean employees who don’t achieve those goals may have to pay more than others for their employer-sponsored health coverage.

This policy brief explains trends in wellness programs, details changes in the law, and highlights issues to watch. Some of the points covered include:
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  • What’s in the law? Some wellness programs reward participants for meeting a health goal, such as smoking cessation; others may impose penalties in the form of premium surcharges on those who do not meet program requirements. The Affordable Care Act will increase the permissible employee rewards for participation–and maximum surcharge for failing to do so–from 20 to 30 percent of the total cost of health benefits.
  • What are the concerns? Many employers want employees to bear responsibility for their health behavior and not cause costs to go up for all workers because of preventable health conditions. But many employees and consumer advocates fear that sicker employees will end up bearing the costs through higher premiums. There are also concerns that by instituting programs designed to alter employees’ behavior, employers may be encroaching on employee privacy zones. Read the rest of this entry »

Wide Variations Found In Knee Replacement Surgery Costs And Quality


May 9th, 2012
by Chris Fleming

Knee osteoarthritis is a common ailment—and treatment is expensive: in 2008 total knee replacement inpatient costs in the United States exceeded $9 billion—the highest among the ten procedures for which demand is growing the fastest. A new study, released today as a Web First by Health Affairs, compares operating times, hospital lengths-of-stay, discharge dispositions, and in-hospital complication rates for knee replacements at five organizations, all members of the High Value Healthcare Collaborative.

Ivan Tomek of the Dartmouth-Hitchcock Medical Center and coauthors identify three key findings:
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  • The health system with the lowest in-hospital complication rate brought together patients with a multispecialty team prior to the surgery, including members from anesthesiology and internal medicine to co-manage medically complex patients.
  • The fastest operating times (and shortest patient stays) were at a hospital where knee replacement cases were staffed by a team of anesthesia doctors, scrub techs, and nurses specializing in arthroplasty.
  • The health system that involved patients prior to surgery in their discharge planning process (and managed patient expectations about disposition after hospitalization) had shorter hospitalizations. Read the rest of this entry »

Medicare Spending Issues Are A Focus Of New Health Affairs Issue


May 7th, 2012
by Chris Fleming

To calculate physicians’ fees under Medicare—which in turn influence private payers’ decisions on how they will pay doctors—the Centers for Medicare and Medicaid Services (CMS) relies on the recommendations of a controversial advisory panel known as the RUC (the Relative Value Update Committee), which mainly represents a broad group of national physicians’ organizations. In recent years physicians in primary care have expressed concerns that this committee has too little representation from their ranks and is partly responsible for increasing the pay gap between primary care providers and specialists. Other research has shown that increases in physician service prices brought about by committee recommendations contribute to increased costs of services used by Medicare enrollees.

In the May issue of Health Affairs, a study by Miriam Laugesen, of Columbia University’s Mailman School of Public Health, and colleagues examines these issues. The authors analyzed CMS’ decisions between 1994 and 2010 and found that CMS agreed with 87.4 percent of the committee’s recommendations on how much physician time and effort is associated with various physicians’ services. However, Laugesen and coauthors also found that CMS’ decisions are less likely to lower fees for evaluation and management services, which account for a large percentage of primary care providers’ income, than for work values of medical specialists. Read the rest of this entry »

The Most Recent Health Wonk Review


May 1st, 2012
by Chris Fleming

The most recent Health Wonk Review is available at Wing of Zock, the blog of the American Academy Of Medical Colleges. Jennifer Salopek and Sarah Sonies have compiled a great collection of posts; they were kind enough to include a Health Affairs Blog debate on the fiscal consequences of the Affordable Care Act among Charles Blahous (here and here), Paul Van de Water, and Len Nichols. Check out all the posts and — if you are curious and don’t already know the reference — check out the derivation of the name Wing of Zock.

Health Policy Brief: Essential Health Benefits


April 26th, 2012
by Chris Fleming

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation looks at essential health benefits–the core packages of benefits that so-called “qualified” health insurance plans must provide beginning in 2014.

The Affordable Care Act of 2010 requires that health insurance plans sold to individuals and small businesses provide a minimum package of services in 10 categories, including hospitalization, maternity and newborn care, ambulatory care, and prescription drugs. Depending on how states decide to proceed, these benefits may be required of all health insurance plans in the state as well.

Last December, the Department of Health and Human Services (HHS) announced that rather than setting a national standard, each state can choose from a set of plans to determine its own minimum standard. HHS’s decision has been criticized by consumer advocates and some provider groups who would have preferred a national standard. However, the decision was applauded by state governments and the business community for affording flexibility and maintaining the existing pattern of state regulation of benefits and insurance plans. Read the rest of this entry »

Trends In The Adoption Of Health Information Technology


April 24th, 2012
by Chris Fleming

In 2011 the Centers for Medicare and Medicaid Services began offering incentives to providers who demonstrated “meaningful use” of electronic health records (EHRs). With this program well underway, how well is health information technology implementation progressing? What are the differences in adoption rates among health care providers?

To address aspects of health information technology adoption among US health care providers and organizations, Health Affairs is today releasing three Web First studies, which will also appear in the journal’s May edition. The studies will be discussed at a briefing tomorrow (Wednesday April 25) at the National Press Club in Washington D.C. Read the rest of this entry »

Contributing Voices

Health Care Economics 101 And The Supreme Court


May 23rd, 2012
 
by Jill Horwitz and Helen Levy

Editor’s note: Kathryn Gilbert, a J.D. candidate at the University of Michigan Law School, is a coauthor of this post, in addition to Jill Horwitz and Helen Levy (photos and linked bios above).

The case that will decide the fate of the most important piece of health care legislation in the past fifty years has, perhaps unsurprisingly, broken a number of records.  The Supreme Court allowed six hours of oral argument in the case, the longest since 1967.  Friends of the court also filed a record 152 briefs.  Of these, the two that garnered the most interest from the Justices were drafted by economists, not lawyers.  These briefs, particularly the one favoring the respondents (sponsored by the American Action Forum, the “AAF”), figured prominently in the oral arguments and are likely to show up in the opinion.  But we hope that the Justices won’t repeat the economic and policy misunderstandings, discussed below, that pervade the economists’ brief for the respondents and were reflected in the arguments.

Here we focus on two key misunderstandings from the AAF brief, each repeatedly raised by the conservative Justices.  The first has to do with the uniqueness of health care markets, and the second has to do with the idea that it is unfair to require young adults to buy health insurance that is not a “good deal” for them. Read the rest of this entry »

Six Strategic Variables In Predicting The Impact Of Accountable Care


May 22nd, 2012
 
by Mark Hiller and Bryan Smith

As Integrated Delivery Networks (IDNs) assess the financial implications of accountable care, six key variables deserve special attention. These variables are unique because they will shape both the accuracy of future financial projections and begin to set the broader strategy for the ACO.

Variable 1: The Halo Effect. As IDNs shift utilization patterns of their covered lives, experience has shown that these efforts tend to spill over and affect non-ACO enrollees as well. This “halo effect” is especially likely among patients within the same payor class (e.g. a Medicare ACO will likely affect utilization of all Medicare beneficiaries). The issue is that reduced utilization or less intense services benefits the ACO in the form of shared savings. However, reduced utilization among non-participants just lowers revenues. Read the rest of this entry »

Implementing Health Reform: The Premium Tax Credit Final Rule


May 20th, 2012
by Timothy Jost

At the heart of the Affordable Care Act (ACA) health care reforms are the premium tax credits, which will extend health insurance coverage to 18 million lower and middle-income Americans.  The idea of using tax credits to purchase private health insurance for the uninsured is one of a number of the historically conservative policy positions adopted by the ACA.  Both the Paul Ryan Roadmap and a recent proposal by James Capretta and Robert Moffit on How to Replace Obamacare also support premium tax credits to make health insurance accessible to Americans.

To create tax credits that are sufficiently substantial to in fact make health insurance affordable to lower-income Americans, without creating a program so costly that it is unaffordable to the country, tax credits must be means-tested and must be structured so as not to crowd out employment-based insurance.  This turns out, not surprisingly, to be very complicated.

On May 18, 2012, the Department of the Treasury published final rules implementing the premium tax credit provisions of the ACA.  These rules finalize rules proposed by Treasury on August 12, 2011, which I blogged about at that time.  The final regulations leave most of the proposed regulation intact, but do make a few important changes.  They also leave many questions unanswered. Read the rest of this entry »

Medicare Physician Payment: A Hollow Victory For The RUC


May 18th, 2012
by Brian Klepper

On May 9th, William Nickerson, Senior Judge in the Southern Maryland Federal District Court, issued a 15 page ruling against the six Augusta, GA primary care physician plaintiffs who challenged HHS’ and CMS’ longstanding relationship with the American Medical Association’s Relative Value Scale Update Committee (RUC). The opinion did not weigh the substance of the case, but instead focused on a procedural provision in which Congress bars the judicial system from considering how the relative value units (RVUs) of medical services are determined. Judge Nickerson wrote:

Accepting as true that RUC plays a major role in the formation of the PFS [Physician Fee Schedule] and also accepting as true that this role unfairly skews the PFS toward certain medical professions and procedures, the Court, nonetheless, finds that Congress has precluded courts from reviewing, not only the final relative values and RVUs, but also the method by which those values and units are generated. Read the rest of this entry »

Implementing Health Reform: State-Based, Partnership, And Federally Facilitated Exchanges


May 16th, 2012
by Timothy Jost

On May 16, 2012, the Department of Health and Human Services moved three steps closer to the implementation of the Affordable Care Act’s health insurance exchanges, which will happen on January 1, 2014.  First, HHS announced the award of 5 new level 1 exchange establishment grants (Illinois, Nevada, Oregon, South Dakota, and Tennessee) and one new level 2 exchange establishment grant (Washington state), totaling $188 million and bringing to 34 the total number of states (plus the District of Columbia) that have received exchange establishment grants.

Second, HHS released a guidance describing in greater detail how the federally facilitated exchange (FFE) will function.  The issuance of this guidance highlights the fact that there will be an operating exchange in every state in 2014, whether it is operated by the federal or by the state government.

Third, HHS issued a Draft Blueprint for Approval of Affordable State-Based and State Partnership Insurance Exchanges, setting out what states will need to do that seek to operate their own exchange or to operate an exchange in partnership with the federal government.  States have until November 16, 2012 to notify HHS whether they want a state exchange, a partnership exchange, or a federally facilitated exchange. Read the rest of this entry »

Remembering Larry Lewin: A Legacy Of Accomplishment And Mentorship


May 16th, 2012
by Robert Rubin

On April 29, 2012, four days after his 74th birthday, Larry Lewin (pictured below) died from complications of an underlying cancer. The funeral was May 1 and his wife, Marion asked me to speak briefly about his professional life. What follows is adapted from those remarks. It will be obvious that anyone who knew Larry will be able to expand these remarks and add to the list of accomplishments that I have chosen to illustrate my points.
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Photo of Larry Lewin by Dennis Kan (click photo to enlarge)

Read the rest of this entry »

Electronic Prescribing: Where We Stand And Lessons For Policymakers


May 16th, 2012
 
by Seth Joseph and Ken Majkowski

Editor’s note: For more on the adoption of electronic health systems, see these recent Health Affairs articles by Decker and coauthors, DesRoches and coauthors, and Hsiao and coauthors, which were discussed at an April 25 event.

Since the American Recovery and Reinvestment Act passed in 2009, healthcare professionals, researchers, analysts and policy makers have been paying close attention to the up to $30 billion in incentives (EHR Incentive Program) for the adoption and meaningful use of certified electronic health records (EHR) technology. Much consideration — by thought leaders in the public and private sectors — was put into developing the objectives, measures and proposed stages that comprise the Meaningful Use requirements that eligible providers must meet in order to qualify for the incentives.

Following the passage of the stimulus bill and news of the EHR Incentive Program, however, there were plenty of skeptics (and many reasons to be skeptical) of whether up to $44,000 – $63,750 per provider would be enough to overcome the many different types of barriers that contributed to low adoption of EHRs through the late 2000s. In addition to questions of whether the market would respond, the EHR Incentive Program itself faced many immediate challenges to get the program up and running. These included: establishing, vetting, and publishing Stage 1 meaningful use objectives and measures  (and the corresponding certification and implementation criteria) by July, 2010; identifying and working with certification bodies to ensure that EHR vendors had access to and time available for going through the certification process; and developing a reporting infrastructure.  There were many more challenges, all on an extraordinarily tight timeline. Read the rest of this entry »

Early Lessons From A Shared Risk, Integrated Care Organization Serving A Commercial Population


May 15th, 2012
 
by Glenn Melnick and Lois Green

Background:  The Centers for Medicare and Medicaid Services’ designation of 32 accountable care organizations (ACOs) across the U.S. to enroll Medicare fee-for-service patients beginning in 2012 makes ACOs an important feature of the national healthcare landscape–at least for publicly insured patients.However in 2007, Blue Shield of California, along with provider and employer partner organizations, began exploring development of one of the first ACO-like programs in the country to serve commercial patients. Two years in the planning, the program was successfully launched in 2010 and has been delivering savings to consumers.

Located in the competitive Sacramento market of northern California, the program has been receiving national attention as an example of an innovative shared savings model involving a large insurer—Blue Shield of California; a purchaser—the California Public Employees Retirement System (CalPERS); a physician group—Hill Physicians Medical Group; and a hospital system—Dignity Health (formerly Catholic Healthcare West). The population served by the virtually integrated health organization includes approximately 42,000 CalPERS employees and their families covered by Blue Shield.

In this Health Affairs Blog interview, senior management and architects from the partner organizations of this ground-breaking commercial ACO-like project discuss the affordability crisis that precipitated a new price-based premium setting strategy and an unprecedented commitment to CalPERS for a zero percent 2010 premium increase for pilot participants. To achieve a $15 million savings target, the project’s three-way global budget honored existing hospital and medical group payment mechanisms and contracts while incentivizing the partners to aggressively drive out costs. The health plan and providers assumed any down-side risk; they also had the upside potential to share excess savings commensurate with the premium share and cost levers each controlled. Read the rest of this entry »

When Epidemiology Goes Astray: Valuing Cancer Care In The United States And Europe


May 14th, 2012
by Michael Eber, Dana Goldman, Darius Lakdawalla, and Tomas Philipson

In a recent Health Affairs paper, we documented that the United States has a significant survival advantage over much of Europe when it comes to cancer: 1.8 years for those diagnosed during our study window.  Furthermore, we showed over a 17-year period that this gap had widened, not narrowed, and that this widening was more valuable than traditional health valuation approaches suggest.  As a result, we argued that the additional spending in the United States was ‘worth it.’

These results have generated a lot of controversy, and even some criticism.  We understand the controversy given the impression that US health care spending is too high. However, we find the criticism both irrelevant and misguided, both qualitatively and quantitatively.

First, some critics have argued that we should have looked at mortality rather than survival.  That is, we should have measured how many people have died from cancer, rather than how long people who are diagnosed with the disease live with it.  There is an important distinction, as we note later.  Some have argued that survival estimates suffer from a “lead-time” bias because the United States was differentially diagnosing cancer earlier. Read the rest of this entry »

Implementing Health Reform: The Minimum Loss Ratio & Summary Of Benefits And Coverage


May 13th, 2012
by Timothy Jost

The two most significant—and controversial–Affordable Care Act (ACA) insurance reforms of 2012 are the minimum medical loss ratio (MLR) rebate and the summary of benefits and coverage (SBC) requirement.  On Friday, May 11, 2012, further regulatory guidance was released on both of these initiatives.

Tidying Up The MLR Rules

The minimum medical loss ratio requirement provides that, beginning with 2011, health insurers must spend a minimum percentage (80 percent in the individual and small group market and 85 percent in the large group market) of their adjusted premium revenues on health care claims and quality improvement expenses.  Insurers that fail to achieve this target must pay a rebate to their enrollees (individuals for nongroup plans and employers for group plans) based on the extent to which the insurer’s actual MLR falls short of the statutory minimum MLR.  These rebates will first be paid in the summer of 2012.

The MLR requirement (also referred to as the 80/20 rule) has, despite its wonkish nature, emerged as a potentially important reform politically.  Indeed, in a May 11 post on Time Magazine’s “The Page” blog,  Mark Halpern described it as a potential “game changer” in the attitude of American’s toward the ACA.  By August 1 of 2012, an estimated 16 million Americans or their employers will receive about $1.3 billion in rebates (most of which will be applied toward premium reductions rather than actually being paid out in checks).  More importantly, as HHS Secretary Sebelius noted in a blog post, also dated May 11, insurers are reducing premiums prospectively to avoid paying rebates, resulting in savings for health insurance consumers. Read the rest of this entry »

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