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Assuring Post-Acute Care Treatment for Medicare Beneficiaries


October 31st, 2012

A federal judge in Vermont may soon act to approve a proposed settlement in a national class action suit, Jimmo v. Sebelius. In the case, the plaintiffs argue that Medicare contractors and administrative officials have been denying nursing and therapy services for patients who were not expected to show long-term improvements in their medical conditions. Patients with chronic conditions like multiple sclerosis, Parkinson’s disease, paralysis, cerebral palsy, skilled nursing visits for insulin injections for diabetics, and Alzheimer’s were denied Medicare and Medicare Advantage benefits under this so-called “Improvement Standard,” the lawsuit alleged.

The “Improvement Standard” refers to a standard that Plaintiffs have alleged, but that Defendant denies, exists under which Medicare coverage of skilled services is denied on the basis that a Medicare beneficiary is not improving, without regard to an individualized assessment of the beneficiary’s medical condition and the reasonableness and necessity of the treatment, care or services in question.

The agreed-upon changes would alter the Medicare manual to say that eligibility for skilled-nursing, home healthcare and outpatient physical therapy services coverage “does not turn on the presence or absence of beneficiary’s potential for improvement from the therapy, but rather on the beneficiary’s need for skilled care,” the settlement says. The proposed settlement would result in changes from the Centers for Medicare and Medicaid Services to its subregulatory guidance contained in the Medicare Benefits Policy Manual to clarify that therapy services in home health, skilled nursing facilities, and outpatient physical therapy are covered so long as the patient is eligible for the services regardless of their clinical prospects for improvement.

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A New Initiative To Put Outcomes Measurement At The Center Of Health Reform


October 31st, 2012

Faced with the alarming implications of health care spending growth and suboptimal quality, many nations are turning to market-based reforms. The United Kingdom recently empowered primary care physician groups to choose among competing specialty care providers for their patients. In the United States, payers are introducing tiered copays, making patients pay more to visit what payers deem high-cost or low-quality providers. Even Sweden has introduced choice and competition in areas such as knee replacement and spinal surgery to curb the tide of rising costs.

The rationale behind these reforms is compelling and age-old: competition will unleash innovation, lower costs, and boost quality. But in health care, this logic hasn’t held, and largely for one simple reason: we do a terrible job of measuring, disclosing, and competing on the things patients actually care about: their survival, quality of life, and rates of complications after care.

Beneficial competition is rooted in informed choice. For competition to achieve its promise of incentivizing higher-value health care, patients and payers must first be able to determine and elect higher value options — providers who deliver better outcomes at the same or lower costs. Providers, meanwhile, must be able to benchmark their own performance against peers to find and adopt innovations that deliver improved outcomes for patients.

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Examining The Newly Covered Under The Affordable Care Act


October 30th, 2012

In a little more than a year, physicians and insurers will begin serving a large new patient population that looks, and in many ways behaves, distinctly different from today’s insured population. The Affordable Care Act’s coverage provisions — representing the single largest insurance expansion since the creation of Medicare in 1965 — present phenomenal opportunities for the health sector.

Under the 2010 law, revised by the Supreme Court ruling at the end of June, up to 30 million people are expected to gain health insurance coverage. Nearly one-third will move onto Medicaid; almost a quarter will enroll in plans sponsored by an employer; and 45 percent will purchase insurance through new state-sponsored online marketplaces known as exchanges.

Public exchanges will become operational in 2014. By 2021, they are expected to generate $205 billion in insurance premiums. It is a market too big to ignore. But attracting and serving this new group will not be easy for state governments or private industry. And although 2014 may feel far away, the time horizon for preparing is tight.

To draw a more comprehensive portrait of the uninsured Americans under age 65 who stand to gain coverage under the law, PwC’s Health Research Institute (HRI) analyzed the federal Current Population Survey, the Medical Expenditure Panel Survey and projections by the Congressional Budget Office. PwC’s HRI did a separate analysis of the exchange population. For both industry executives and policymakers, the data contain some reassuring news and a few warning flags

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The Latest Health Wonk Review


October 30th, 2012

At Health Beat, Maggie Mahar has assembled a great collection of health policy blogging in a pre-election issue of the Health Wonk Review. Among the posts she highlights: A “contributing voices” Health Affairs Blog post by Joe Selby, the executive director of the Patient-Centered Outcomes Research Institute, and Rachael Fleurence, a scientist at the organization.

The authors describe the Patient-Centered Outcomes Research Institute’s two paths for choosing research to fund: an investigator-initiated path and a patient- and stakeholder-initiated path. As indicated by the title, they spend most of their time talking about the newer of the two paths, the patient- and stakeholder-initiated path.

“We recognize that our investigator-initiated process, even with the collaboration of stakeholders, could miss important questions that matter to patients and must be implemented judiciously. So we initiated a second path … that directly involves patients and other stakeholders in generating questions that address specific problems identified as having a significant impact on them and the health care system as a whole,” Selby and Fleurence write.

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Helping Nursing Homes Prepare for Disasters; Hilton Foundation’s Lessons Learned in Disaster Grant Making


October 29th, 2012

As I sit here waiting for the worst of what we are to get from Hurricane Sandy to hit the Washington, D.C., area, I wanted to remind readers of a September 2010 GrantWatch article on nursing homes and disasters, such as hurricanes. In case you missed this article, following is some information about it. I also […]

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Early Evidence Suggests Medicare Advantage Pay For Performance May Be Getting Results


October 29th, 2012

The Patient Protection and Affordable Care Act of 2010 (ACA) established a Medicare Advantage (MA) pay-for-performance program that, early evidence suggests, may be yielding results. Data from plans shows significant improvement from 2010 to 2011 on measures that for many years had stagnated. These include controlling high blood pressure, colorectal cancer screening, assessing adult Body Mass Index, and advising smokers to quit. There also is improvement on avoiding use of high-risk medications in the elderly and persistence of beta-blocker therapy after heart attacks. Given the substantial advantages that pay-for-performance bonuses and other benefits provide, these early results may portend even greater future improvement.

Background. Medicare pays Medicare Advantage plans a per-member-per-month fee, based largely on risk-adjusted local per capita historical fee-for-service payments, to provide all Medicare-covered services. More than one in four Medicare beneficiaries is in an MA plan. Before the ACA, the Medicare Modernization Act of 2003 required Medicare to pay all plans more than the cost of caring for similar enrollees in traditional, fee-for-service Medicare, regardless of performance. In 2010, the Medicare Payment Advisory Commission estimated that these additional payments were 13 percent, or $14 billion dollars, more than what Medicare would have paid for similar beneficiaries in traditional Medicare.

The ACA phases out higher payments previously given to all MA plans. Instead, Medicare in 2012 began paying bonuses only to plans with strong performance on clinical quality, service measures and patient experience of care measures. Medicare bases the 2012 bonus payments on 2011 plan performance, as rated by a five-star system. This system incorporates Health Effectiveness Data Information Set (HEDIS®) and other quality measures, Consumer Assessment of Health Plans (CAHPS®) patient experience results (See Note 1 below.), and results of the Health Outcomes Survey (HOS) that tracks patient-reported outcomes over time. It also includes metrics such as complaints Medicare received about the plan, customer service for drug benefit plans, and beneficiary access and performance problems identified in audits by Medicare.

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Young Leader Award Winners Announced As RWJF Celebrates Fortieth Anniversary


October 25th, 2012

Editor’s Note: This post originally appeared on GrantWatch Blog, Health Affairs Blog’s sister blog.

The Robert Wood Johnson Foundation (RWJF), based in Princeton, New Jersey, announced the ten winners of an award for young people with “strong potential for future leadership,” who are age forty or younger and are being recognized “for their exceptional contributions to improving the health of the nation,” according to an October 25 press release. Each winner will receive $40,000; these awards will be presented tomorrow.

This is a one-time awards program and ties in with the RWJF’s fortieth anniversary. As the foundation looked to the past to reflect on its accomplishments as it celebrates its anniversary, it “also wanted to look to the future,” to young leaders, born during the foundation’s existence, who have already achieved early successes and have the potential to improve health and health care in the United States, the RWJF’s president and CEO, Risa Lavizzo-Mourey, explained in the release.

Here are just a few fun facts about the award winners. These men and women hail from various regions of the United States; six of the ten hold medical degrees, three of the ten have Ph.D. degrees, and one out of the total group has a law degree. As for professional affiliations, one winner runs a nonprofit coalition of faith congregations, based in St. Paul, Minnesota; several are assistant professors. Go here to read the press release with the full list of winners and short descriptions of their work affiliations. You can also view pictures of the winners.

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RWJF Young Leader Award Winners Announced, as Foundation Celebrates Fortieth Anniversary


October 25th, 2012

The Robert Wood Johnson Foundation announced the winners today. Read below to find out a little about the ten Young Leader winners. The Robert Wood Johnson Foundation (RWJF), based in Princeton, New Jersey, announced the ten winners of an award for young people with “strong potential for future leadership,” who are age forty or younger […]

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Health Affairs Comparative Effectiveness Research Briefing Available For Viewing


October 25th, 2012

Video and speaker materials from the Health Affairs briefing on the journal’s October issue, “Current Challenges In Comparative Effectiveness Research,” are available on the Health Affairs website. The event is broken out by panel and by speaker, so you can view the entire briefing or just portions of particular interest.

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Health Policy Brief: Nurse Practitioners And Primary Care


October 25th, 2012

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation examines policy proposals that would allow nurse practitioners to practice to their full potential—and the extent to which the medical profession, policy makers, and patients are supportive of that effort.

Currently, about 54.5 million Americans live in areas with shortages of primary health professionals, a situation that may grow worse as the Affordable Care Act increases access to insurance coverage and the population ages and chronic illness increases in prevalence.

In nineteen US jurisdictions (eighteen states plus the District of Columbia), nurse practitioners—registered nurses who have also completed a postgraduate nursing degree—are allowed to diagnose and treat patients and prescribe medications without a physician’s involvement. These practitioners and their capabilities help to fill the void left by the current shortage in some parts of the country of primary care physicians. There is also a growing body of research showing that patients value access to consistent care from one particular provider, whether a nurse or a physician.

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Proportion Of Those With High Medical Costs Unchanged During Recent Recession


October 25th, 2012

During a recession one would expect the percentage of people with high medical costs—those spending 10 percent or more of annual family income—to increase. But a Health Affairs Web First study released yesterday finds that during the 2007–09 recession, the percentage of Americans under age sixty-five with high medical cost burdens was mostly unchanged: 18.8 percent in 2009, compared to 19.2 percent in 2006.

Peter Cunningham of the Center for Studying Health System Change reports that the percentage remained constant because lowered family income was offset by decreased out-of-pocket spending on health services. This study updates Cunningham’s previous Health Affairs study on the same subject.

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Will Increased Transparency Requirements For Nonprofit Hospitals Bring Greater Community Health Investments?


October 24th, 2012

Sweeping reforms implemented by the IRS and Treasury in 2009 have pulled back the veil surrounding the community benefit investments required of all nonprofit hospitals seeking federal tax exempt status. Will this new transparency, in combination with important tax law reforms enacted by Congress as part of the Affordable Care Act, lead to greater hospital investment in community health?

The Evolution Of Community Benefit Law

Since the 1950s, federal tax law has recognized that in order to qualify for tax-exempt status, nonprofit hospitals owe certain duties to the communities they serve. IRS Revenue Ruling 56-185 (1956) established a “financial ability” standard that required charitable hospitals to be “operated to the extent of [their] financial ability for those not able to pay for the services rendered and not exclusively for those who are able and expected to pay.” In 1969, this early ruling was amended by Revenue Ruling 69-545, which substituted a more amorphous “community benefit” standard that has essentially survived into the present time, although with important modifications under the Affordable Care Act.

As noted by the Joint Committee on Taxation, the express purpose of Revenue Ruling 69-545 was to eliminate any enforceable obligation on the part of tax-exempt hospitals to furnish financial assistance to indigent inpatients. Following an unsuccessful legal challenge to the validity of the ruling (Eastern Kentucky Welfare Rights Organization v Simon, 370 F. Supp. 325, 338 (D.D.C. 1973), rev’d, 506 F.2d 1278 (D.C. Cir. 1974), vacated on other grounds, 426 U.S. 26 (1976)), the community benefit standard remained moribund and essentially went unexplored for decades.

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Creating Outcome-Driven Health Care Markets


October 23rd, 2012

America’s health care market does not work well. It is inefficient, asymmetric, and in most cases not particularly competitive. The Affordable Care Act (ACA) legislated a myriad of changes to reform and improve insurance markets with exchanges as a centerpiece. While exchanges and reforms like subsidies, guaranteed issues, age bands, community rating, reinsurance, and risk adjustment are all helpful, a huge opportunity remains to segment the health care market around different categories of patient demand.

Basic economic theory states that a well-functioning market is aligned between supply and demand. Ideally, suppliers and customers align around the preferences of the customers – the unit of alignment is driven by the demand side. When we examine health care, we see demand falling into three segments: healthy people who have episodic needs, chronic disease patients with predictable needs, and highly complex patients with less predictable needs. Given the high variance between the three submarkets, we believe that each of these segments should be thought of as a discrete market and served by different types of insurance products, payment models, and health care providers.

We believe that this is necessary since each of these segments values providers differently. For a healthy patient with periodic needs, convenience and experience are likely to matter more than continuity with a provider and care team. Conversely, chronic disease patients are likely to value clinical outcome attainment, complication avoidance, and care coordination very highly. And complex patients will need and value the customization, access to research, and specialization that the latest medical breakthroughs can deliver. Not only are the sources of value different, but so are the delivery systems and payment models needed to align incentives for value.

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Realizing The Promise Of Integrated Care For The ‘Dual Eligibles’


October 22nd, 2012

One of the highest priorities in the Affordable Care Act (ACA) is care delivery transformation for Americans enrolled in both Medicare and Medicaid, known as “dual eligible beneficiaries” or sometimes simply “duals.” This priority is embodied in federal-state demonstration programs currently gearing up. It is imperative that we resist calls to delay these initiatives and that we rapidly bring to scale the innovations that have already been shown to improve care for the duals at my own organization, Commonwealth Care Alliance, and elsewhere.

This is not the first time that Congress has sought to address the unmet needs and high costs of these individuals. Nearly 40 years ago, Congress expanded Medicare eligibility to non-elderly individuals with disabilities; legislators simultaneously expanded the scope of Medicaid’s community-based long-term care benefits to make Medicaid our nation’s preeminent disability and long term care insurer. The goal then, as now, was to promote appropriate medical care as an alternative to hospital care and independent living as an alternative to institutional care.

Yet today, less than 1 percent of dual beneficiaries are enrolled in integrated medical and long-term care delivery models designed to meet their needs. As a consequence, far too many individuals with disabilities have their goals of independence and autonomy subverted because of functional decline that is mostly preventable. Far too many frail elders and younger individuals with disabilities are routinely hospitalized because of a failure to effectively intervene to address a predictable and treatable array of complications of their underlying chronic illnesses.

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Election 2012: Informational Resources on Health Care: What Have Foundations Funded?


October 19th, 2012

It’s election season, and I have noticed that a few foundations are funding information dissemination efforts—including a report, a toolkit, a video, and a post-election event. For those voters who remain undecided, perhaps these resources will help you make a decision—at least on who has the best health care platform! Please note that this is just a […]

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Getting Specific: Selecting Patient- And Stakeholder-Initiated Topics For PCORI Funding


October 19th, 2012

Every day, patients, caregivers and clinicians must make any number of complex health care decisions. They might have to choose between several options for preventing, diagnosing or treating a disease or condition. They might need to decide between doing something specific and not doing anything at all. And often, they make these decisions without the evidence or information that answers the questions that matter most to patients.

The Patient-Centered Outcomes Research Institute (PCORI) was established to address this problem by funding comparative clinical effectiveness research to help patients make better-informed health and health care decisions, taking full and meaningful account of the concerns they have about the issues they face. Based on these principles, we developed our National Priorities for Research and Research Agenda, which guides our decisions about the kinds of research to fund.


To do this most effectively, we have implemented two complementary but equally critical paths: a broad, “investigator-initiated” funding process and a more directed “patient- and stakeholder-initiated” path. Together, they will help us build a robust portfolio of patient-centered outcomes research that will address the unmet needs of patients, caregivers, clinicians and other health care stakeholders.

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Turning Consumers Into Shoppers: Using High-Deductible Plans Wisely


October 18th, 2012

As insurance exchanges emerge next year, and as states grapple with exactly what options health plans will provide, high-deductible health plans (HDHPs) are likely to be on the menu. But do such plans have the secret sauce to move participants from being passive health care consumers to savvy shoppers?

HDHPs have grown steadily in recent years. A 2012 report by America’s Health Insurance Plans estimates more than 13.5 million people are enrolled in high-deductible health plans with health savings accounts. Even in California — where benefit-rich HMO plans continue to have loyal followers — more than half of those who purchase insurance in the individual market report buying a plan with a deductible greater than $500.

To learn how HDHPs affect the health care marketplace and individual buyers, the RAND Corporation, with support from the California HealthCare Foundation and the Robert Wood Johnson Foundation, completed a large, five-year study of the effects of HDHPs on consumer use of, and spending on, health care. The analysis found that during the first year following enrollment, members of HDHPs had fewer hospitalizations than patients enrolled in traditional plans. They also had fewer episodes of care, fewer visits to specialists, and lower use of brand-name drugs — all of which reduced overall costs. However, there also was one troubling finding: Those in HDHPs cut back on preventive services along with other services. For example, cancer screenings in the first year of enrollment declined by 3 percent to 5 percent – even though such services were covered at 100 percent and not subject to deductibles.

The RAND study was summarized in the May issue of Health Affairs. The article suggested that growth of HDHPs to one-half of all employer-sponsored insurance (from 13 percent as of 2010) could save as much as $57 billion annually.

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Mixed Financial Incentives for Hospitals to Reduce Surgical Complications’ Frequency


October 17th, 2012

Surgical complications are something that neither patients nor hospitals want. With low complication rates being increasingly recognized as an important measure of good hospital performance, initiatives to lower complication rates are being pursued with the expectation of helping patients and reducing payers’ reimbursement expenses and providers’ costs.

A Health Affairs Web First study released today reexamines the business case for hospitals’ embracing surgical complication programs. Using data on costs and reimbursements compiled by researchers at the University of Michigan and adjusting them to 2010 dollars, Daniel Krupka of Twin Peaks Group and coauthors find that a hospital would suffer a negative cash flow if its surgical inpatient load is not growing. For a hospital performing 10,000 inpatient surgeries per year, annual cash flow could drop by more than $1 million for each 1 percent drop in the complication rate.

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People Post: News of Comings and Goings at Foundations; Philanthropy Awards Programs


October 16th, 2012

It is time to catch up on “people news” at foundations: who has a new job where, and who has been appointed to a foundation board. Also, Karen Davis and Dick Jackson were honored for their work—each by a different philanthropy. And a foundation staffer was named to the Institute of Medicine. Lucia Corral Peña has […]

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GDP+0: Prospects And Challenges Of Bending The Health Care Cost Curve


October 16th, 2012

Editor’s note: In addition to Kenneth Kaufman and Charles Roehrig (photos and linked bios above), this post is coauthored by Paul Hughes-Cromwick, a health economist and Senior Analyst at Altarum Institute and Charles Kim, a Senior Vice President at Kaufman Hall.

Health care costs are a major focus of the nation and individual states. This summer, Massachusetts legislated to bend its health care cost curve. While Massachusetts residents benefit from near-universal coverage via 2006 legislation, the State’s health spending per capita has long been well above the national average. In an effort to rein-in costs and achieve a sustainable spending growth rate, the State passed Senate No. 2400—“an Act improving the quality of healthcare and reducing costs through increased transparency, efficiency, and innovation.”

The Act establishes limits on health care spending growth—defined as not to exceed overall growth in Gross State Product (GSP) in 2013-2017 and GSP growth minus 0.5 percent for 2018-2022. Linking health care spending growth to GSP growth aims to cap health care’s share of GSP. (More precisely, the Act ties spending to the growth of potential GSP, which subtracts the influence of business cycle fluctuations. Since this is roughly equivalent to the long-term average growth in GSP, for simplicity’s sake we use the terms GSP and GDP, or gross domestic product, in the remainder of this post.)

What if Massachusetts-like spending restraints were imposed nationally? National health care expenditures (NHE), which constitute about 18 percent of the nation’s GDP, have been growing about 2 percent faster than the growth of U.S. GDP for most of the past 22 years, though this excess declined in certain years. The blue line in Figure 1 (click to enlarge) shows the change in NHE growth since 1990; the red line represents GDP change during the same period. Economists and health policy experts have started to analyze the fiscal implications of applying Massachusetts’ GSP+0 growth limits to NHE. This post builds on such analysis, looking specifically at the effects on the federal deficit and the Medicare HI Trust fund.

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