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Relative Value Health Insurance And Pay For Performance For Insurers: Complements, Not Substitutes


September 19th, 2014

Background

The quest for value dominates contemporary health policy.  Value, properly defined, is not about cost-savings but about the balance of costs and health benefits — improving the average cost-effectiveness of health interventions.  In choosing which care is funded, insurers are a crucial but commonly neglected driver of health system value.

Insurers can increase health system value by covering fewer cost-ineffective interventions or covering more cost-effective interventions.  Perhaps the earliest attempt to reform insurance, managed care, attempted to pursue both goals, but by the time it was implemented it widely focused (or was perceived to focus) on cost-containment.

A recent insurance reform proposal, known as Relative Value Health Insurance (RVHI), received considerable attention, for instance, in The Upshot, The Incidental Economist, and Forbes.  RVHI enables insurers to reduce their contractual obligation to cover “usual and customary” care.  This and similar earlier proposals rely on the insurers’ natural incentive to cut costs.  Less well-covered, however, are proposals to alter the very incentives of insurers to improve health, which we will call “pay-for-performance-for-insurers” (P4P4I).

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Lessons Learned: Bringing Big Data Analytics To Health Care


July 14th, 2014

Big data offers breakthrough possibilities for new research and discoveries, better patient care, and greater efficiency in health and health care, as detailed in the July issue of Health Affairs. As with any new tool or technique, there is a learning curve.

Over the last few years, we, along with our colleagues at Booz Allen, have worked on over 30 big data projects with federal health agencies and other departments, including the National Institutes of Health (NIH), Centers for Disease Control (CDC), Federal Drug Administration (FDA), and the Veterans Administration (VA), along with private sector health organizations such as hospitals and delivery systems and pharmaceutical manufacturers.

While many of the lessons learned from these projects may be obvious, such as the need for disciplined project management, we also have seen organizations struggle with pitfalls and roadblocks that were unexpected in taking full advantage of big data’s potential.

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New Health Affairs July Issue: The Impact Of Big Data On Health Care


July 8th, 2014

Health Affairs explores the promise of big data in improving health care effectiveness and efficiency in its July issue. Many articles examine the potential of approaches such as predictive analytics and address the unavoidable privacy implications of collecting, storing, and interpreting massive amounts of health information.

Big data can yield big savings, if they are used in the right ways.

David W. Bates of the Brigham and Women’s Hospital and coauthors analyze six use cases with strong opportunities for cost savings: high-cost patients; readmissions; triage; decompensation (when a patient’s condition worsens); adverse events; and treatment optimization when a disease affects multiple organ systems.

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Lessons From Abroad And At Home: How PCORI Can Improve Quality Of Care (And Prove It) By 2019


May 2nd, 2014

The Patient-Centered Outcomes Research Institute (PCORI) was established with the passing of the Affordable Care Act in 2010 to oversee and set guidelines for comparative effectiveness research (CER). PCORI was also designed with a sustainable funding model, having received $210 million from 2010 to 2012 and expected appropriations of $150 million annually via fees imposed on Medicare and private health insurance companies. The international comparative effectiveness research community has recognized PCORI as the most funded CER initiative in existence, far surpassing the annual budgets of comparable international programs such as U.K.’s National Institute for Health and Clinical Excellence (NICE).

Despite the considerable resources designated to PCORI, its future remains tenuous. For one, the ACA legislation also created a “sunset date” of September 2019, giving PCORI seven years to convince Congress to reauthorize funding for the institute. Further, legislative efforts have already been made to repeal PCORI; H.R. 3827 was introduced by Rep. Brett Guthrie (R-KY) in January 2012, asking for immediate elimination of PCORI.

While PCORI is the first national comparativeness effectiveness research institute to be established in the U.S., it fortunately can draw several lessons from its international counterparts which have been operating for two decades. The U.K.’s NICE, considered by most to be the most comprehensive and effective CER program, will be the main comparator for this analysis.

PCORI must address two themes that are at tension with one another. On one hand, PCORI needs to foster stakeholder involvement in order to establish itself as a legitimate body of CER knowledge that is relevant and accepted in clinical practice. However, it also must avoid the pitfalls of having a democratic, iterative process that moves too slowly to issue findings and recommendations in a timely manner.

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What’s Past Is Prologue: Making The Case For PET Beta-Amyloid Imaging Coverage


April 9th, 2014

Editor’s note: This post is published in conjunction with the April issue of Health Affairs, which features a series of articles on Alzheimer’s disease.

In September of 2013, CMS issued its final decision memo that concluded positron emission tomography- amyloid beta (PET Aβ) imaging is “not reasonable or necessary”, finding “insufficient evidence” that use of this diagnostic tool would improve health outcomes for patients with dementia or neurodegenerative disease. As such, PET Aβ imaging to help diagnose Alzheimer’s disease (AD) is not a covered service for Medicare beneficiaries except for those enrolled in CMS-approved clinical trials.

CMS’ final decision underscores the emerging new paradigm for coverage decision-making, requiring innovators not only to demonstrate to FDA’s satisfaction that their products are effective, but also to prove to CMS and other payors that their use will improve clinical outcomes. This paradigm will increase confidence in the value and health benefit of new technologies, although it will make the path to coverage more difficult and uncertain for diagnostic developers.

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PCORI’s Research Will Answer Patients’ Real-World Questions


March 25th, 2014

As a physician, I know the challenge of helping patients determine which health care options might work best for them given their personal situation and preferences. Too often they — and their clinicians — must make choices about preventing, diagnosing and treating diseases and health conditions without adequate information. The Patient-Centered Outcomes Research Institute (PCORI) was created to help solve this problem — to help patients and those who care for them make better-informed health decisions.

Established by Congress through the Patient Protection and Affordable Care Act as an independent research institute, PCORI is designed to answer real-world questions about what works best for patients based on their particular circumstances and concerns. We do this primarily by funding comparative clinical effectiveness research (CER), studies that compare multiple care options. But more research by itself won’t improve clinical decision-making. Patients and those who care for them must be able to easily find relevant evidence they can trust. That’s why our mandate is not just to fund high-quality CER and evidence synthesis but to share the results in ways that are meaningful to patients, clinicians and others. We’re also charged with improving the methods used in conducting those studies and enhancing our nation’s capacity to do such research.

We will be evaluated ultimately on whether the research we fund can change clinical practice and help reduce the variations and disparities that stand between patients and better outcomes. We’re confident that the work we’re funding brings us and the audiences we serve closer to that goal.

Recently, some questions have been raised in health policy circles about our holistic approach to PCORI’s work. That view holds that direct comparisons of health care options — especially those involving high-priced interventions — should be the dominant if not sole focus of PCORI’s research funding approach as a path to limiting the use of expensive, less-effective options.

We agree that discovering new knowledge on how therapies compare with one another is a critical mandate of PCORI and is essential to improving the quality and effectiveness of care. However, ensuring that patients and those who care for them have timely access to and can use this knowledge, so that they can effectively apply it to improve their decisions, is also very important. That is the reasoning behind our integrated approach path that addresses the gaps in available evidence, and also studies how best to make the evidence available and usable.

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Recent Health Policy Briefs: Specialty Pharmaceuticals And Medicare Hospital Readmissions


November 25th, 2013

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation explains many of the current debates surrounding the use of specialty pharmaceuticals. Specialty pharmaceuticals—drugs and biologics used to treat chronic, serious, or life-threatening diseases—are complex to manufacture and distribute, often difficult to administer, and may require special patient monitoring. They are a rapidly growing share of the costs borne by both public and private health plans. A patient could pay a few thousand dollars a month to use them, and the annual total cost for some products could exceed $100,000. This policy brief discusses the potential impact of specialty pharmaceuticals on consumers and the health care industry and some of the key challenges for policy makers.

The immediately preceding Health Policy Brief describes the Medicare Hospital Readmissions Reduction Program (HRRP), established as part of the Affordable Care Act. This program imposes financial penalties on hospitals with higher than expected readmissions. The program aims to create an incentive for hospitals to reduce the number of patients who return to the hospital within 30 days for treatment of three key conditions: acute myocardial infarction (that is, heart attack), heart failure, or pneumonia. The HRRP, in operation for only two years, already has shown results. Despite this success, some policy makers fear unintended consequences for safety-net hospitals, potentially putting vulnerable populations at risk.

Health Policy Briefs are aimed at policy makers, congressional staffers, and others needing short, jargon-free explanations of health policy basics. Sign up for an e-mail alert about upcoming briefs. The briefs are also available from the Robert Wood Johnson Foundation’s website. Please feel free to forward the briefs to any of your colleagues who are tracking health issues. And after you’ve taken a look, we welcome your feedback at: hpbrief@healthaffairs.org.

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Applying Comparative Effectiveness Research To Individuals: Problems And Approaches


October 29th, 2013

A Comparative Effectiveness Research (CER) study shows that surgery is better than medical treatment for a particular cardiac condition. My patient is 78 years old and has complicated diabetes. – does the study apply? Another patient 48 years old and otherwise healthy. Does it apply here?

Can the overall results of a CER study be applied to all patients in the target population? Are there substantial, undetected variations among patients in the results of CER? What is the extent of exceptions? These are important policy questions in applying results of CER to day-to-day decisions, clinical guidelines, performance measures and other facets of the modern healthcare system.

The “gold standard” approach to CER is the randomized (RCT), a scientific comparison of two or more clinical strategies, with the downsides that it is generally conducted in a special environment and usually has a rather narrow (and possibly unrepresentative) population spectrum. Two variants, the Practical (or Pragmatic) Clinical Trial (PCT) and the Large Simple Trial (LST) are inclusive of a wider spectrum of patients and more diverse clinical settings.

These approaches provide “average” results and for the most part it is thought that averages do apply to a large segment of the population at large for which they are intended. However, there are clearly differences in effect (heterogeneities of treatment effect – HTE’s) that manifest among CER study subjects and presumably to a greater extent in the intended population outside the study. Two approaches may be equivalent on the average but one may be better in a particular group, and differences may be less apparent when the study’s population base is narrow. A long list of factors contribute to these HTEs for CER and other trials – comorbidities, severity of illness, genetics, age, medication adherence, susceptibility to adverse events, ethnicity, site, economics and others.

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Medicare Integrate: A New Benefit Option For Medicare Beneficiaries


July 23rd, 2013

I. The Need for Medicare Reform

Policy options for making the Medicare program sustainable over the long run will have to identify approaches that reduce costs and improve the quality of care delivered. Effective interventions will be ones that target the key cost drivers in the system, chronic diseases. Since 1987, 10 percent of the growth in Medicare spending is associated with a doubling of obesity among seniors. Moreover, over half the Medicare population receives treatment for five or more chronic conditions during the year, accounting for nearly 80 percent of spending.

My earlier paper, “The Medicare Advantage Experience: Lessons for Reform to Original Medicare,” identified some best-practice approaches for prevention and care coordination derived from Medicare Advantage plans and other private-sector delivery models. Clearly the original Medicare program needs comprehensive care coordination and more effective approaches for reducing the rise in chronic disease incidence and prevalence.

This post outlines a plan to add a new Medicare option featuring evidence-based care coordination and prevention, with the goal of improving the health care outcomes for Medicare beneficiaries while reducing costs for the federal government. Others have set forth related plans, indicating that there is a momentum building behind the goal of more effectively addressing chronic disease in the Medicare program.

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Improving The Rhetoric Of Rationing: Part 1


June 24th, 2013

Note: Rationing of health care services is a contentious topic and in our view, current discussions of rationing often are unproductive or harmful. We suggest two reasons for that result. First the discussants are imprecise in their use of the term rationing – often for politically motivated reasons. Second, the discussants write about rationing as an activity that “we” will undertake, with significant consequences for “you.” It would be more helpful to discuss the prudent use of health care services in terms of the health plan that we would want for ourselves and our families.

In part 1 of this post below, we address the first problem by offering a more precise definition of rationing. In part 2 of this post [which will appear on Health Affairs Blog tomorrow], we address the second problem by describing the type of health plan we would like for ourselves and our families.

“Rationing,” and particularly “government rationing” is politically charged rhetoric. Merely mentioning the possibility of government rationing of health care services has a chilling effect on health policy debates. For example, some of the early criticisms of comparative effectiveness research (CER) were based on the possibility that the research would be used as a basis for coverage decisions in public insurance plans, especially Medicare.

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Seven Ways For Health Services Research To Lead Health System Change


May 30th, 2013

With ACA implementation now at hand — and with it, the formation of accountable care organizations (ACOs) — health services research (HSR) has an especially important role to play. As ACOs take steps that will substantially change health care delivery, the ability to measure and improve health system performance and acquire this data efficiently will be in greater demand. Is HSR up to the challenge?

As the “basic science” of the health care system, HSR focuses on access, cost, and quality. Health services researchers work to identify and assess vital signs of a well-functioning health care system and develop performance measures for examining system aspects. They also seek to improve the system by identifying gaps in quality and then testing and disseminating solutions to those problems. HSR’s goals and often its approaches are different from the development, testing, and translation of new drugs or other interventions.

But as we’ve seen all too frequently, the necessity of responding to ongoing change within the health system outpaces HSR’s ability to produce timely evidence. As a result, large scale changes are sometimes instituted on the basis of imperfect evidence (e.g., tying financial incentives to measures of physician or hospital performance before studies are completed). Or, as we’ve also seen, by the time a research project comes full cycle — proposed, funded, conducted, and published — external or internal forces impacting the health system may have rendered the original question moot. Within the VA, for example, studies regarding the effectiveness of telehealth interventions often have been overtaken by these technologies’ rapid dissemination throughout the system. For HSR to fulfill its mission of helping transform health care, it first must be able to transform itself.

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Seven Policy Recommendations To Improve Quality Measurement


May 22nd, 2013

Performance measurement — if done right — can be a core activity to move the health care system to higher value for the American public, while rewarding health professionals and health care institutions for doing the right thing for their patients. Yet, policy makers, private and public, have a duty to the public, patients, and providers to get it right — to measure and report accurately and meaningfully.

Harlan Krumholz and Peter Pronovost have been among the most important contributors to the development of performance measures for quality and safety of health care. At the same time, each has written powerful critiques of particular aspects of the current measurement enterprise with suggested improvements. I work mostly inside the Beltway in a world of policy makers who, despite good intentions, by their actions often display a lack of understanding of the challenges associated with measures, measurement, public reporting, and pay-for-performance. For example, the physician value-based modifier, which was mandated as part of the Affordable Care Act and now must be implemented by CMS, cannot produce a valid snapshot of an individual physician’s “value” but will be imposed nevertheless, unfortunately feeding those within the physician community who resist all efforts to improve accountability and transparency of performance.

With the encouragement of the Robert Wood Johnson Foundation, Harlan, Peter, and I joined in a collaborative endeavor to produce a comprehensive look at the state of play of performance measurement and public reporting — their conceptual underpinnings and limitations, successes and failures, and, perhaps most importantly, recommendations for major steps that are needed now to put the measurement enterprise on track to achieve its potential to improve the value of U.S. health care without doing harm.

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Saving Money While Providing Benefit In Medicare: A Standard Applied Only To Hospice


May 16th, 2013

Medicare is caught between two countervailing impulses: the desire of beneficiaries (and providers and the adult children of beneficiaries) to have a benefit package that covers more, rather than less, and the desire to restrain program spending due to its impact on the federal budget. This tension is heightened by the transition of the Baby Boomers from paying taxes into Medicare to receiving benefits.

The default is that Medicare covers acute care therapies, tests and procedures if there is a patient that wants to receive them and a provider who is willing to deliver them, whether there is evidence of any benefit to the patient or not. As I tell students in my Introduction to Health Policy Course, while Medicare sets payment rates (and is therefore like Marlon Brando in The Godfather: “I have an offer you can’t refuse”), when it comes to what is covered in the acute care setting, it is more like my Grandmother serving lunch (“whatever you would like, honey.”)

There are exceptions. Recently, the Medicare Evidence Development and Coverage Advisory Committee decided not to approve the payment of PET scans to aid in the diagnosis of Alzheimer’s disease. However, such a move is rare, and both provider and patient groups are protesting this decision.

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Reforming the Research Regulatory System


April 24th, 2013

There is a growing consensus that the regulatory system for research is in need of reform. Established 21 years ago by the Common Rule, it has functioned via a rigorous environment to assure that risk in research is dealt with and transparency maintained.

The trigger for these regulations is a definition of research as a “systematic investigation…designed to develop or contribute to “generalizable knowledge.” When this definition is satisfied, an intensive set of requirements ensues including review, approval, and continued oversight by an Institutional Review Board (IRB); reporting requirements;, the necessity for informed consent (often highly complex); and other administrative components. If projects are not “generalizable,” (e.g., local hospital programmatic or quality review), they fall strictly under healthcare system purview rather than under Common Rule regulatory oversight.

The current system has a strong moral imperative and has been critical to mitigating risk for research subjects and providing transparency. However, it is burdensome and fails to take into account the considerable progress made in both the research and clinical enterprises over the last few decades: in research, technological advances in generating data on routine care, and in healthcare, much more stringent oversight.

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Medicare’s Reset On ‘Coverage With Evidence Development’


April 1st, 2013

Medicare is poised to revise its “coverage with evidence development” (CED) policy, which has important implications for beneficiaries’ access to new medical technology as well as manufacturers’ reimbursement for their products.

For years, Medicare has employed CED, under which the program provides conditional coverage for new technology while it collects additional evidence on the technology’s effectiveness. The concept has great intuitive appeal in that it promises to provide access to promising technology for which the evidence base may be immature. As Medicare officials and other experts have argued, by linking coverage of new technologies to requirements that patients participate in registries or clinical trials, CED can help identify the circumstances in which patients are most likely to benefit and potentially accelerate access to innovations.

Though Medicare has experimented with conditional coverage policies since the 1990s, the formal CED designation and its characterization date to two guidances the Centers for Medicare and Medicaid Services (CMS) issued in 2005 and 2006. CMS has used CED in 19 cases over the years on diverse technologies, including lung volume reduction surgery, implantable cardioverter defibrillators (ICDs), and positron emission tomography (PET) for cancer. (See Table 1 at the end of the post, click twice to enlarge.) The CED policies have varied in their data collection requirements, with some featuring randomized controlled trials and others relying on patient registries or other data collection strategies

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Rapid Learning For Precision Medicine: A Big Data To Knowledge (BD2K) Initiative


February 21st, 2013

Proposal

The National Research Council’s Precision Medicine report found that it is imperative to create a new scientific base for biomedical research, clinical care, and public health that accurately reflects the genetic variations in diseases and in individual responses to therapies.

This proposal calls for using the nation’s rapidly expanding capabilities for computerized biomedical research to accomplish this goal as quickly as possible. Research databases and analyses for most diseases would be completed over the next three years (by the end of 2015).

Background

The US-led Human Genome Project was finished ten years ago (2003). In the past several years, key elements for moving forward on a Precision Medicine-type initiative have been coming together.

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New Approaches To Learning In The Learning Healthcare System


January 14th, 2013

A goal of Twenty-First Century Healthcare is to establish and enhance the Learning Healthcare System (LHS). As discussed in numerous forums, journals, and social media, the LHS is viewed as critical to improving healthcare. Fundamentally, the LHS converts data about care and operations into knowledge that it translates into evidence-based clinical practice and health system change. In so doing, the LHS utilizes as vehicles health information technology, databases, the electronic healthcare record (EHR) and, importantly, a research infrastructure. The continuing narrow evidence base for clinical care combined with the need for substantial amounts of data to fill large evidentiary gaps, among other factors, have fostered the LHS concept.

To assure the utility and validity of data converted and then translated into improvements by the LHS, we need rigorous research approaches that are also efficient. Research is defined as “a systematic investigation…designed to develop or contribute to generalizable knowledge.” At present, evidentiary inputs to the LHS range from activities not generally considered research (e.g., programmatic and quality improvement evaluations) to various forms of research that are sufficiently rigorous, but for various reasons, can be difficult to employ and translate into the routine workings of the LHS.

For example, the randomized clinical trial (RCT) — considered the cornerstone, or “gold standard” methodology — provides the best data, but by its very nature, is separate from the workings of clinical care in a given healthcare system (HCS). Instead, the RCT functions in an alternate environment precisely controlled for the approach’s particulars. Further, the RCT is costly and time-consuming, and its rather narrow entry criteria may diminish its ability to be generalized to routine patients (e.g., those with comorbidities, or those outside of the entry criteria of age and severity).

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P4P Concerns, Medicare Vs. Private Insurance Lead HA Blog’s 2012 Most-Read List


January 10th, 2013

Will pay for performance in health care backfire? That was the question addressed through the lens of behavioral economics by Steffie Woolhandler, Dan Ariely, and David Himmelstein in the most-read Health Affairs Blog post for 2012. Next on the most-read list were two posts, one by Diane Archer and the other by Archer and Theodore Marmor, contrasting Medicare and private insurance. They were followed by Rushika Fernandopulle’s rethink of primary care and Ken Kaufman’s post suggesting that the recent slowing in health care cost growth reflects more than just temporary effects from the economic slowdown.

Many thanks to our readers and authors for making 2012 a good year for Health Affairs Blog. We had 369 posts and over 50 million pageviews, more than a 60 percent increase from 2011. Since we had many good posts that were closely grouped in the readership numbers, we’ve expanded this year’s most-read list to a “top 15″ rather than a “top 10.” The full 2012 list is below.

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Health Policy Brief: Reducing Waste In Health Care


December 14th, 2012

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation examines waste in US health care. Estimates are that more than a third of annual US health spending may be wasteful. A September 2012 Institute of Medicine report estimated that $765 billion a year was wasted through provision of unnecessary services, inefficiently delivered services, excessive prices and administrative costs, and missed prevention opportunities and fraud and abuse.

This policy brief discusses these and other types of waste in health care, ideas for eliminating waste, and the considerable hurdles that must be overcome to do so. It is the companion to a July 2012 Health Policy Brief, “Eliminating Fraud and Abuse.”

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Election Post Leads HA Blog Top Ten For November


December 4th, 2012

Tim Jost’s look at the 2012 election and the implementation of the Affordable Care Act in its aftermath tops the list of most-read Health Affairs Blog posts for November. Jost’s piece is joined on the list by election-related posts by Chas Roades, James Morone, and Jim Capretta.

Second on November’s top-ten list is a look at pay-for-performance through the lens of behavioral economics, by Steffie Woolhandler, Dan Ariely, and David Himmelstein. Other posts on the list discuss regulations issued under the Affordable Care Act; a new effort to promote outcomes measurement around the world; the VA Health System’s new “mega-database” for genomic medicine; and challenges for safety-net institutions in delivering accountable care.

The full list appears below.

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