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Paying For The ‘Doc Fix’


March 26th, 2015

For years now it has become apparent that the Sustainable Growth Rate (SGR) system is not sustainable.  However, fixing the SGR will require increases in budgeted costs, and so one of the major barriers to replacing the SGR is figuring out how to pay for the fix. Towards this end, it is important to understand the appropriate cost-comparison.

Federal scorekeepers (appropriately) assess the cost of the SGR fix relative to current law, which assumes that fees will follow a trajectory defined by current policy. But as near as I can tell, few advocate for that path or believe it will occur; rather the current system will continue to require regular “patches”.  Therefore, the appropriate measure of the cost of the doc fix is spending with the fix relative to spending without it.  The latter includes the costs of future “patches” necessary to ensure continued operation (as well as any savings that can be achieved because of continued SGR related negotiations).  Substituting this realistic alternative into the cost calculus likely substantially lowers the incremental cost of any SGR fix.

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Health Affairs Briefing: The Cost And Quality Of Cancer Care


March 25th, 2015

Cancer is the second leading cause of death among US adults, and cancer care now costs in excess of $125 billion each year in the United States alone. Cancer has also become the second leading cause of death worldwide, making it an increasing priority in low- and middle-income countries. The April 2015 issue of Health Affairs, “The Cost and Quality of Cancer Care,” includes a collection of papers on the cost and quality of cancer care.

You are invited to join us on Tuesday, April 7, 2015, at a forum featuring authors from the new issue at the National Press Club in Washington, DC. Panels will cover valuing cancer care innovation, paying for care, and quality of cancer care.

WHEN:
Tuesday, April 7, 2015
9:00 a.m. – 11:40 a.m.

WHERE:
National Press Club
529 14th Street NW
Washington, DC, 13th Floor

Register Now!

Follow live Tweets from the briefing @Health_Affairsand join in the conversation with #HA_CancerCare.

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What Is Behind The Post-Recession Bend In The Health Care Cost Curve?


March 23rd, 2015

It has been a while since I last had the opportunity to analyze the slowdown in health spending and the extent to which it represents a lasting bend in the cost curve, as opposed to lingering effects of the “Great Recession or other temporary changes.” (See Note 1)

Distinguishing Health Care Cost Curves

When we discuss bending the health care cost curve, two questions arise: “Which curve?” and “Short run or long run?” In this post, I focus on the curve represented by the growth rate in national health expenditures (NHE) pre- and post-recession. Other curves of interest include “excess growth” (health spending growth in excess of gross domestic product [GDP] growth) and the closely related health spending share of GDP. For analysis of all three curves over the very long run, including a provocative “big bang” theory about the origins of excess growth, see Tom Getzen’s blog. A fourth curve that has gotten my attention, through the work of Gene Steuerle, is the health spending share of the growth in real per capita GDP. (See Note 2)

I now turn to the present topic, the record low growth in NHE that began in 2009 (the year in which the recession ended) and continued through 2013 (the most recent year for which we have official data). There has been extensive discussion about whether these low rates are the result of temporary cyclical factors, such as the recession, or more permanent structural factors. As detailed below, I conclude that, to a surprisingly large extent, the answer is neither: the bulk of the decline in the health care spending growth rate resulted from lower economy-wide price inflation and some temporary factors not tied to the recession.

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Mortality Versus Survival In International Comparisons Of Cancer Care


March 20th, 2015

In a recent paper, Soneji and Yang revisit a topic we first explored in the April 2012 issue of Health Affairs — namely, whether the U.S. gets value for its cancer care. We found that life expectancy after cancer diagnosis rose more quickly for patients in the U.S. than for patients in Europe. Moreover, while spending per patient also rose more quickly in the U.S., Americans still received good value from the health care system. Compared to the gains seen in Europe, for example, each additional life-year gained in the U.S. cost roughly $20,000 in additional U.S. spending.

Soneji and Yang re-examine trends in cancer deaths in the U.S. and Europe and draw different conclusions. While we welcome the attention paid to this important issue, Soneji and Yang’s conclusions rest on fundamental flaws in their own approach and a misunderstanding of the methods we use in our study.

To understand the value of U.S. cancer care, one must ask whether the health care system performs better for U.S. cancer patients than those of other countries and at what cost. In attempting to answer this question, Soneji and Yang ask whether more people die from cancer in the U.S. or in Europe. This isn’t the right question. The total number of people dying from cancer is a misleading indicator of health system performance. Factors like poverty, pollution, smoking, diet, and exercise all contribute to the number of people acquiring cancer and dying from it, and confound the effects of cancer treatments. The bottom line is that mortality reflects treatment, but it also reflects the number of people who get cancer.

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What Kind Of Advance Care Planning Should CMS Pay For?


March 19th, 2015

Currently, Medicare does not offer a paid benefit for advance care planning (ACP). As a result, health care providers who want to assist Medicare enrollees with ACP do so voluntarily and neither they, nor their institutions, are compensated for their time and efforts. This is not only an unfair expectation on individual practitioners or health institutions, it is also medically and ethically unsound. Fortunately, two recent events have the potential to reshape the landscape of advance care planning in the U.S.

Cultural And Policy Evolution In Advance Care Planning

On September 17, 2014, the Institute of Medicine (IOM) published Dying in America: Improving Quality and Honoring Individual Preferences Near the End of Life. The report is built on two basic premises:

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Should Health Lawyers Pay Attention To The Administration’s Privacy Bill?


March 13th, 2015

Health care lawyers justifiably ignored the 2012 Obama administration consumer privacy framework because it expressly and broadly exempted entities subject to HIPAA, stating “To avoid creating duplicative regulatory burdens, the Administration supports exempting companies from consumer data privacy legislation to the extent that their activities are subject to existing Federal data privacy laws.”

In contrast, the administration’s 2015 draft bill, the Consumer Privacy Bill of Rights Act, though based on that framework, substantially affects health care entities, including those subject to HIPAA, and so demands more attention in the health law community.

The “HIPAA clause” in the draft bill is subtly different (and noticeably narrower than its preemption of state law clause): “If a covered entity is subject to a provision of this Act and a comparable provision of a Federal privacy or security law [the list includes HIPAA] such provision of this Act shall not apply to such person to the extent that such provision of Federal privacy or security law applies to such person.”

The “provision” wording is key; most of the key substantive provisions in the draft bill—those going to consent, withdrawal of consent, context, and data minimization—do not crosswalk to any comparable provisions in HIPAA. For HIPAA mavens this has the potential of “more stringent than” all over again, but at a higher stakes table. (For nonmavens, this refers to questions raised by HIPAA’s language leaving intact state laws “more stringent than” HIPAA’s privacy protections.)

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Physician Aid In Dying: Whither Legalization After Brittany Maynard?


March 12th, 2015

Editor’s note: This post is part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015. The conference brought together leading experts to review major developments in health law over the previous year, and preview what is to come. A full agenda and links to video recordings of the panels are here.

Brittany Maynard’s highly publicized decision to end her life under Oregon’s Death With Dignity law has given a new face to the American right to die movement. It is that of a young, attractive, athletic newlywed, who would not have considered herself as having a stake in the movement until the day she learned a brain tumor was the cause of her severe headaches. She was terminally ill and faced a future of six months of increasing pain, debilitation, and severe seizures before dying.

A video of Maynard’s story produced by the non-profit advocacy organization Compassion and Choices has reached many millions of viewers. Extended coverage of her decision-making process by People Magazine resulted in record numbers of hits to the publication’s website. During her illness, Maynard moved from California to Oregon and on November 1, 2014 took barbiturates to end her life. In her memory, her husband and mother have become prominent activists in the effort to legalize physician aid-in-dying (PAD).

Is all of this likely to advance the PAD movement and, if so, through what legal processes?

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Implementing Health Reform: March Enrollment Report Provides Income Data (Updated)


March 11th, 2015

On March 10, 2015, the HHS Assistant Secretary for Planning and Evaluation (ASPE) released the Health Insurance Marketplaces 2015 Open Enrollment Period March Enrollment Report.  The report covers open enrollment activity through February 22, 2015; it contains a wealth of data on 2015 marketplace enrollment, including for the first time enrollee income data that provides some useful insights (discussed in more detail below).

The headlines of the report are old news.  Nearly 11.7 million Americans selected or were automatically enrolled in health plans through the marketplaces during the 2015 open enrollment period, including 8.84 million through the exchanges that use healthcare.gov.  Of these, 4.6 million were new consumers, 2.2 million actively reenrolled , and nearly 2 million were automatically reenrolled.  Nearly 2.85 million people selected plans or were automatically enrolled through state exchanges that used their own marketplace platforms.

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Reconciling Prevention And Value In The Health Care System


March 11th, 2015

The term ‘value’ (commonly defined as health improvements attained per dollar spent) has become ubiquitous in discussions around improving the health care system. Increasingly, payers are adopting value-based purchasing programs (paying more for higher value care) and providing benefits that follow the principles of value-based insurance design (aligning patient cost-sharing with the value of the service). These programs typically focus on services widely regarded as relatively low-cost and clinically effective, such as beta-blockers prescribed for patients following a myocardial infarction (i.e. heart attack).

Simultaneously, there is widespread enthusiasm for the increased use of preventive services. The Patient Protection and Affordable Act (ACA) mandates the elimination of consumer cost sharing for selected preventive services in marketplace plans and many other individual health plans. A particular subset of plans, High-Deductible Health Plans with Health Savings Accounts (HSA-HDHPs) can cover certain preventive services—but not other services—before the deductible, a minimum of $1,250 for an individual and $2,500 for a family, is met.

Generally, policies supporting prevention and value are consistent. Many (not all) preventive services do provide considerable value. Yet as with value, there are nuances in the definition of prevention that can lead to suboptimal policy choices. Specifically, most policy related to prevention defines preventive services as those delivered to asymptomatic individuals.

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Price Transparency: Removing The Blindfold


March 11th, 2015

Shopping for health care is like shopping blindfolded in Macy’s, says noted health care economist Uwe Reinhardt — consumers don’t know what they are buying or how much it will cost until they have paid and gone home. Moreover, consumers are not the only ones affected by the lack of information; employers as purchasers of insurance, government policy makers, and insurers are all frustrated by the lack of price and quality information that would allow consumers to shop for value in their care.

We hope that 2015 will be the year of transparency and the first year in an era of higher value health care. This blog post discusses our observations from the Health Care Cost Institute’s (HCCI) perspective of developing guroo.com, a transparency website: the impetus for transparency, the magnitude of the data needed, the challenges in summarizing and presenting the data, and finally realistic expectations for transparency tools.

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Go Slow On Reference Pricing: Why The Federal Agencies Have It Wrong On Regulations


March 9th, 2015

Despite concerns outlined in our previous post on reference pricing, federal oversight agencies essentially have taken a hands-off approach. First, they announced that for large group and self-insured plans, the Affordable Care Act’s (ACA) annual maximum limits on out-of-pocket costs do not apply to charges above the reference price.

These limits are already high: $6,600 for an individual and $13,200 for family coverage in 2015. Without any discussion the agencies asserted that non-designated providers are out-of-network, and therefore cost sharing falls within the ACA’s exclusion of out-of-network cost from the maximum limits.

This ruling is inconsistent with the ACA and harmful to patients, effectively allowing plans to circumvent the Act’s crucial out-of-pocket cost limits. The ACA’s annual out-of-pocket maximums are meant to apply to in-network care. If plan members receive care inside this provider network, the Act mandates that they are to be protected by these maximums.

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Go Slow On Reference Pricing: Not Ready For Prime Time


March 9th, 2015

Editor’s note: This post is part one of two on reference pricing. 

The use of reference pricing by health insurers and employee health benefit plans stands high on the policy and regulatory agenda because it is gaining popularity, particularly now that federal agencies have blessed its use by large group insurers and self-insured plans, while imposing only relatively lax requirements. The purpose of reference pricing is to enable patients to “shop” for care and to spur provider competition by creating a group of “designated” in-network providers that agree to abide by the reference price while others do not (“non-designated providers”).

Patients who select more expensive non-designated providers must pay extra, letting them decide whether the extra out-of-pocket cost is worth it. Providers compete, either by agreeing to the reference price or by lowering their prices to approach it. Prices are driven downward.

Reference pricing is superficially appealing because it invokes powers that consumers exercise every day, as they weigh cost and value for items ranging from cold cereal to new cars. But it also raises significant issues regarding quality and access to care and has the potential to discriminate against sick and vulnerable patients. The strategy may also prove costly in relation to the benefits it confers. We urge a go-slow approach and more careful regulation.

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Who Authored Obamacare’s Exchanges? King v. Burwell And Justice Kagan’s Law Clerks


March 6th, 2015

Editor’s note: Watch Health Affairs Blog for more posts on King v. Burwell and the Supreme Court oral arguments in the case by Tim Jost, Grace-Marie Turner, Sara Rosenbaum, Bill Sage, and others.

Despite all the media hubbub and intense scrutiny, we didn’t learn all that much from the oral argument in King v. Burwell. The four liberal justices—Ginsburg, Breyer, Sotomayor, and Kagan—clearly believe that an exchange established “for” or “in” a state by the federal government is the same as an exchange “established by the state” (or at least that it’s ambiguous and the tie goes to the IRS). Justices Scalia and Alito—and presumably the silent Thomas—equally believe that words mean what they say.

So the case, as expected, turns on the views of Chief Justice Roberts and Justice Kennedy, who gave very little away. Indeed, I’ve never seen John Roberts so quiet at an oral argument—holding his cards so close that they risk being permanently imprinted on his vest—while Anthony Kennedy was characteristically inscrutable. In other words, 4-3 in the government’s favor with two wild cards.

That’s exactly what everyone knew going into the argument, and 85 minutes later if anyone tried to tell you that they knew what the outcome would be, they were engaging in spin or wishful thinking. To put an even finer point on it: whichever side you thought had the better chance of winning, downgrade your expectations to 50-50.

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King v. Burwell: Finding A Path Forward After An Executive Overreach


March 5th, 2015

Editor’s note: Watch Health Affairs Blog for more posts on King v. Burwell and the Supreme Court oral arguments in the case by Tim Jost and others.

The Supreme Court justices had a lively discussion today during arguments in King v. Burwell about who Congress intended to get health insurance subsidies and under what conditions.

The central question is whether the Internal Revenue Service had the authority to write a rule authorizing subsidies to go to millions of people in the 37 states now operating under federal exchanges.

The plaintiffs say the language of the law is clear:  Subsidies are allowed in “an Exchange established by the State under [section] 1311of the Patient Protection and Affordable Care Act.” It doesn’t just say this once, but nine times in various linguistic forms.

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King v. Burwell: Unpacking The Supreme Court Oral Arguments


March 5th, 2015

Editor’s note: Watch Health Affairs Blog for more posts by Grace-Marie Turner and others on King v. Burwell and the Supreme Court oral arguments in the case.

One March 4, 2015, the United States Supreme Court heard oral arguments in King v. Burwell.  As every reader of this Blog knows, the issue in the case is whether the Internal Revenue Service rule that allows the federally facilitated marketplaces to grant premium tax credits is valid.

If it is not, millions of individuals in the 34 states served by the FFMs will lose their tax credits.  Without the credits, they will no longer be able to afford health insurance.  The cost of insurance to those remaining in the nongroup market will rise precipitously, causing even more Americans to lose coverage.  As the number of uninsured increases, providers will bear an increased burden of uncompensated care.  A decision for the plaintiffs, that is, will be disaster for the American health care system.

The challengers argue that this is a result Congress intended.  They contend that the subsection of the Affordable Care Act dealing with the calculation of premium tax credits limits the credits to individuals enrolled in an “Exchange established by the State.”  The government argues that this is a term of art — that Congress intended this phrase to include the federally facilitated exchanges that the ACA requires the Department of Health and Human Services to create as a fallback where the states elect not to operate their own exchange.  Dozens of other provisions of the ACA support the government’s position.

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Health Affairs’ March Issue: The Benefits And Limitations Of Information


March 2nd, 2015

The March issue of Health Affairs contains papers focusing on the benefits—and the limitations—of information-gathering processes as a way to solve health system problems. Studies in this variety issue examine US hospital rating systems, disclaimers on dietary supplements, state prescription drug monitoring programs, the value of US versus Western European cancer care and other topics.

National hospital rating systems show little agreement — what’s a consumer to do?

Matt Austin of Johns Hopkins Medicine and coauthors compared four well-known national hospital rating systems designed for use by US consumers: U.S. News & World Report’s Best Hospitals; HealthGrades’ America’s 100 Best Hospitals; Leapfrog’s Hospital Safety Score; and Consumer Reports’ Health Safety Score. They analyzed ratings covering the time period from July 2012 to July 2013.

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How Many Americans Will Lose Coverage If The Supreme Court Kills The ACA Tax Credits?


March 2nd, 2015

In March, the U.S. Supreme Court is slated to hear King v. Burwell, a case that challenges the authority of the federal government to provide tax credits and other financial assistance to people who buy Affordable Care Act (ACA) coverage through the federal health insurance marketplace. The federal government runs the health insurance marketplace in 34 states where states chose not to set up a state-based exchange.

Estimates on how many people could lose tax credits in these 34 states vary widely from 4.5 million to 13 million. After talking to executives and lobbyists for health care related entities in 20 of the 34 states affected, I believe that about 6.5 million people who have tax credits in 2015 will lose them. The difference in these numbers will be important to policymakers, since politicians are likely to make decisions on how to respond to a Court ruling based on the actual number of their constituents who are receiving tax credits or other support.

In addition, the impact of a Court ruling will be affected by state action. Some observers have questioned whether states will set up exchanges if the Court eliminates tax credits from the federal exchange. These observers have said that establishing a state exchange is costly and time consuming and that most federal exchange states will not take this step. I argue in the following post that setting up a state exchange could be easy and inexpensive if the federal exchange operations are used.

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What Happens When A Retail Pharmacy Decides To Stop Selling Cigarettes?


February 26th, 2015

Editor’s note: This post is part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015. The conference brought together leading experts to review major developments in health law over the previous year, and preview what is to come. A full agenda and links to video recordings of the panels are here.

The sale of cigarettes and tobacco products at retailers with pharmacies has received considerable attention over the past year. The national debate reignited in February 2014, when CVS/pharmacy announced that we would quit the sale of cigarettes and tobacco products in our 7,800 pharmacies nationwide. In September 2014, we announced we were officially tobacco free — one month earlier than planned. This was met with kudos from the media, public health officials, and even the President of the United States.

But one question that did not receive anywhere near that level of attention was whether or not our actions would make a difference in the prevalence of smoking and, ultimately, in the public health.

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State Expectations: Setting The Record Straight In King v. Burwell


February 25th, 2015

On Wednesday, March 4th, the Supreme Court will hear the latest attack on the Affordable Care Act (ACA): the case King v. Burwell. The King petitioners allege that the Internal Revenue Service overstepped its authority by issuing regulations authorizing residents of states with federally run exchanges to access premium tax credits. The petitioners claim that Congress intentionally limited access to premium tax credits to residents of state-based exchanges as a way to encourage states to run their own exchanges.

In support, some state officials claim that they interpreted the law in this manner and that it impacted their state’s decision not to operate a state-run exchange. These assertions, like their analysis of the statutory language, fall flat under any serious scrutiny, however.

Between October 2012 and March 2013, with the support of the Commonwealth Fund, the Center on Health Insurance Reforms (CHIR) conducted a comprehensive review of publicly available information in 50 states pertaining to their decisions to operate either a state or federally run exchange.

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How Menu Labeling Could Spark Change Beyond The Menu Board


February 24th, 2015

If there’s one thing we’ve learned about catalyzing changes that prevent illness in the first place, it’s that passage of a single policy can be like lighting a match — illuminating the way towards strategies with greater impact and igniting the energy of leaders. The success of a menu labeling might be the match needed to inspire further policy change to shift the trend of increased diet-related chronic disease in the United States.

In November, the Food and Drug Administration released the final rule guiding calorie labeling of menu items at chain food service establishments with 20 or more outlets nationally. The rule will apply to fast-food and sit-down restaurants, supermarkets, convenience stores and movie theaters, and will take effect on December 1, 2015.

Once implemented, calorie counts will be posted for all items (including alcoholic drinks) on menus and menu-boards, and on display tags for salad bars, bakery items, and soda dispensers. A companion rule requiring calorie labeling for vending machines will take effect one year later.

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