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Closing The Rural Health Connectivity Gap: How Broadband Funding Can Better Improve Care


April 1st, 2015

Broadband access is not usually highlighted in policy prescriptions for improving outcomes and lowering costs of health care. But it is a prerequisite for a range of technologies that can provide more cost-effective and higher-quality care, such as video consultation, remote patient monitoring, and electronic health record operability. And in many places—particularly rural areas that have the most to gain from telemedicine and connectivity—broadband remains too expensive, unreliable, or simply not available at the speeds required to enable innovations in care. This “connectivity gap” remains an important obstacle to achieving better care in rural areas.

Federal statutes and regulations provide subsidies, administered by the Federal Communications Commission (FCC), that attempt to close the connectivity gap. But these subsidies have been underutilized because they are too hard to use; they have also not kept pace with changes in health care delivery and broadband technology. Below, we examine the connectivity gap and current federal efforts to address it, and we offer proposals to make those efforts more up-to-date and effective.

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The First Fill Factor: A Threat To Outcomes, Quality, And Payment Goals


April 1st, 2015

Enactment of the Medicare Part D Prescription Drug Program in 2003 led to the creation of the first medication adherence quality improvement goals of truly national import. But one gaping problem remains: the failure of many patients to secure and take medications when they are first prescribed — the “first fill” that never happens.

Recent research confirms that rates of failure to secure a first dose of newly prescribed medications in major chronic disease categories are disturbingly high. Indeed, the failure rates in community-based settings (at community pharmacies, for example) range from 22 to 28 percent. Substantial rates of failure (15 to 26 percent) have even been found among highly integrated health care systems that often feature in-house pharmacies.

And so, just as payment reforms are pushing providers towards accountability for safe and appropriate treatment and good patient outcomes, particularly among the chronically ill, a significant proportion of patients are walking away from their provider’s office with sound, evidence-based orders for new medication therapy … but they never pick up the medicine.

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The Time Is Now To Fix Medicare ACOs


March 27th, 2015

This past January 20th, the Department of Health And Human Services established national Medicare pay-for-value goals. By 2016, the Department intends to tie 30 percent of Medicare payments, and by 2018 50 percent of payments, to quality or value through alternative payment models. Medicare Accountable Care Organizations (ACOs) are expected to make a significant contribution toward meeting these goals. With current ACOs accounting for 7.8 million beneficiaries and 15 percent of Medicare spending, it will be essential for the current 405 ACOs to stay in the Medicare Shared Savings Program (MSSP) through 2016, and for a substantial number of new ACOs to join the program.

However, common concerns about the MSSP became apparent a year ago when stakeholders submitted comment letters in response to the Centers for Medicare and Medicaid Services’ “Evolution of ACO Initiatives at CMS” RFI (Request for Information). These concerns were reinforced last July after CMS announced proposed changes to ACO quality measure set and quality performance benchmarking, and again in November when the National Association of ACOs reported survey data showing nearly two-thirds of member ACOs would leave the program unless substantial improvements were made.

Recognizing these concerns, this past December CMS published a proposed rule offering many possible improvements to the Shared Savings Program. Public comments were due February 6th. CMS now has the opportunity to use stakeholder input to redesign the program in a way that will allow ACO providers to drive payment and delivery reform and thereby enable DHHS to meet its newly established pay-for-value goals.

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Good And Bad News For Diabetes Prevention In The Community


March 25th, 2015

The findings from a recent synthesis of the literature about the effectiveness of prevention initiatives focused on reducing the risk of Type 2 diabetes among high-risk populations (people already obese or inactive or diagnosed as having prediabetes) are largely encouraging.

The synthesis includes a comprehensive and systematic review of the medical, diabetes, and public health literature for evaluation studies of interventions published between 2002 and 2013. The search was undertaken using medical subject headings and keywords related to diabetes and its risk factors.

A number of interventions—such as the National Institutes for Health’s Diabetes Prevention Program and the Group Lifestyle Balance Program—focused on helping people eat better and become more physically active are effective in reducing the risk of diabetes onset. Robust studies show that these interventions work even better than medication to prevent diabetes.

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Unpacking The Burr-Hatch-Upton Plan


March 24th, 2015

Anticipating the upcoming Supreme Court decision on King v. Burwell, which could halt health insurance subsidies available through the federal exchange, Republican Senators Richard Burr and Orrin Hatch joined with Representative Fred Upton to propose a comprehensive replacement for the Affordable Care Act (ACA). The Patient Choice, Affordability, Responsibility, and Empowerment Act, or Patient CARE Act, is modeled on a proposal of the same name offered last year by Senators Burr, Hatch, and Tom Coburn, who has retired from the Senate. The Burr-Hatch-Upton plan, like its predecessor, adopts consumer-based reforms of the insurance market, modernizes the Medicaid program, and makes other changes intended to lower cost and increase choices.

In an earlier post, we described in detail the provisions of the Burr-Coburn-Hatch bill. In this post, we discuss how the Burr-Hatch-Upton plan differs from the earlier proposal. We also discuss the impact of the new proposal on health insurance coverage, premiums, and the federal budget based on a new analysis from the Center for Health and Economy (H&E), a non-partisan think tank focused on producing informative analyses of trends in U.S. health care policy and reform ideas. We conclude by commenting on the direction Republicans are likely to take in reforming the health system in the aftermath of a Supreme Court decision in the King v. Burwell case.

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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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Can Safety-Net Hospital Systems Redesign Themselves To Achieve Financial Viability?


March 16th, 2015

Safety-net hospital systems have long played a special role in the nation’s health care system by serving low-income, medically, and socially vulnerable patients regardless of their ability to pay. Beyond caring for people regardless of insurance coverage, safety-net systems provide comprehensive care to meet the needs of their diverse, complex patient populations, including culturally-responsive health and social services that other hospital systems do not.

As providers of last resort, some safety-net systems, especially public hospitals, are expected by their communities and by state and local governments to offer needed but unprofitable services, regardless of whether adequate revenue streams exist to support these services.

 In recognition of that role, national, state, and local government agencies historically have provided supplemental funding to these systems to offset unreimbursed and under-reimbursed care. Under the Affordable Care Act, however, that is changing. With the expectation that most people will be insured under the new law, policy makers have planned to reduce much of this supplemental funding. In this view, safety-net systems will either become financially independent or close.

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New Narrative Matters: How Health Care Fails Older Patients, And How It Can Be Done Better


March 13th, 2015

Health Affairs‘ March Narrative Matters essay features a chance meeting between an octogenarian and a geriatrician that shows how the US health system focuses on medical care at the expense of older adults’ well-being. Louise Aronson’s article is freely available to all readers, or you can listen to the podcast.

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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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Effective Public Engagement To Improve Palliative Care For Serious Illness


March 10th, 2015

Editor’s note: This post is part of a periodic Health Affairs Blog series on palliative care, health policy, and health reform. The series features essays adapted from and drawing on a recent volume, Meeting the Needs of Older Adults with Serious Illness: Challenges and Opportunities in the Age of Health Care Reform, in which clinicians, researchers and policy leaders address 16 key areas where real-world policy options to improve access to quality palliative care could have a substantial role in improving value.

Public engagement is necessary to improve care for individuals suffering with serious illness. Fortunately, several drivers of potential change exist for advocacy. In the following blog post, we outline some areas for change and specify advocacy efforts we can undertake to improve the overall face of palliative care.

First, palliative care here is defined as being a type of specialized medical care for people with serious illness. Its goal is to improve quality of life for both person and family. It is provided by a team of doctors, nurses, and other specialists who work with the patient’s other providers to provide an extra layer of support. Although some people think palliative care is only for those at the end of life, it is actually appropriate at any age and at any stage in a serious illness and can be provided together with curative or disease-modifying treatment.

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The Payment Reform Landscape: Everyone Has A Goal


March 6th, 2015

It seems these days everyone is setting ambitious goals for making changes to how we pay for health care, including my organization Catalyst for Payment Reform (CPR).

Initially, our goal at CPR was to ensure that 20 percent of health care payments be value-oriented (seeking to improve quality and reduce costs) by the year 2020. But to reflect our desire for greater assurance that good would come of it, we recently refined that goal.

It’s great that commercial health plans report a significant increase in value-oriented payments. But, to avoid wasting valuable time and resources, there needs to be quantifiable evidence that new payment methods actually lead to improved health care while containing costs. as we’ve emphasized in our posts here. The “proof is in the pudding” as they say.

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New Health Policy Brief: Risk Corridors (Updated)


February 26th, 2015

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) provides an update to an earlier brief on the Affordable Care Act (ACA)’s risk corridor program, which allows the Department of Health and Human Services (HHS) to collect and make payments to qualified health plans. As the brief explains, a recent amendment to federal appropriations raises questions as to whether insurers will receive their full risk corridor payments for 2014.

While the Consolidated and Further Continuing Appropriations Act of 2015, which funded the government for the 2015 fiscal year, did give HHS the authority to collect user fees, an amendment was included that specifically prohibited HHS from transferring money from either trust fund.

The amendment did not eliminate the risk corridor program, nor did it prevent HHS from using payments received from insurers to pay out claims under the program (that is, user fees), but it effectively made the risk corridor program budget neutral unless HHS can find another source of funding. As a result, insurers expecting payments from HHS may not receive the full amount due.

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An Era Of Precision Medicine And Rapid Learning


February 20th, 2015

At a recent White House event, President Obama presented his proposals for a Precision Medicine Initiative. The key elements include a national research system where 1 million or more volunteers can share their (privacy protected) electronic health records, genetics, and other data, and a national cancer initiative. The proposals will be developed in more detail based on meetings led by the National Institutes of Health (NIH) Director Francis Collins.

If national health policy adopts these proposals, much about today’s medical care system—including biomedical science, medical education, diagnostics, treatment options, comparative effectiveness research, quality metrics, payment systems, the role of patients, the personalization of medical care and prevention, and an understanding of the roles of environment, nutrition, culture, and many other factors—may greatly change.

The Obama administration proposes a highly collaborative, non-partisan public-private process. These proposals bring the era of “big data” to the center of the heath policy arena (see the July 2014 Health Affairs theme issue, “Using Big Data To Transform Care”). Many in the health system may want to take part in developing the proposals and being part of the implementation.

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How Open Data Can Reveal—And Correct—The Faults In Our Health System


February 18th, 2015

In April 2014, the Centers for Medicare and Medicaid (CMS) released millions of lines of Medicare Part B physician payment data, that led many researchers, analysts, journalists, and the general public to use the data to answer a number of pressing health care questions. And while the dataset does not include patient-level information, it does offer provider identifiers, which can facilitate data aggregation, highlight practice patterns, and cost trends (i.e. specialties with disproportionately higher payments and individual providers as “outliers”).

Our goal here, like many before us, is to highlight striking disparities in this dataset (despite its limitations); attempt to understand why they occur; and provide opportunities to address them.We examine three major issues: geographic variation; individual provider variation; and variation across care settings. Finally, we outline recommendations for future data releases to encourage more practical analyses.

Geographic Variation in Practice Patterns

A popular example highlighted by the CMS data was the rate of use of Lucentis — a drug prescribed for patients with age-related macular degeneration (AMD). Although a clinical study demonstrated similar outcomes for Lucentis ($2,000 per dose) versus Avastin ($50 per dose), the CMS data revealed total Lucentis spending of $1 billion.

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Health Affairs Web First: Recent US Hospital Productivity Growth


February 11th, 2015

Between 2002 and 2011, US hospitals increased their productivity in treating Medicare patients for several serious illnesses, refuting fears about a “cost disease” in health care and potentially mitigating concerns about provider payment under the Affordable Care Act.

The study, released today by Health Affairs as a Web First, addresses the quality of care and the severity of patient illness (considerations not fully taken into account by previous studies on this topic) found that during those years, the annual rates of productivity growth were 0.78 percent for heart attacks, 0.62 percent for heart failure, and 1.90 percent for pneumonia.

When the authors John Romley, Dana Goldman, and Neeraj Sood calculated productivity growth rates without factoring in trends in the severity of patient conditions or outcomes achieved after hospitalization, the annual productivity rates were different: -0.64 percent for heart attacks, -0.91 percent for heart failure, and -0.39 percent for pneumonia.

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Health Affairs’ February Issue: Biomedical Innovation


February 2nd, 2015

The February issue of Health Affairs includes a number of studies examining issues pertaining to biomedical innovation. Some of the subjects covered: how declining economic returns for new drugs may affect future investments, the changing landscape of Medicare coverage determinations for medical interventions, the slowly emerging US biosimilar market, and more.

With declining economic returns, can manufacturers afford to continue investing?

Ernst Berndt of Massachusetts Institute of Technology’s Alfred P. Sloan School of Management and coauthors compared present values of average lifetime pharmaceutical revenues to present values of average drug research and development, and lifetime operating costs. Upon examining new prescription drugs launched over four distinct time periods between 1991 and 2009, the authors found that net economic returns reached a peak in the late 1990s and early 2000s.

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The Latest Health Wonk Review


January 30th, 2015

On January 29, Jason Shafrin at Health Care Economist published a “Super Bowl” edition of the Health Wonk Review. Jason’s round-up contains no hot air, but it’s not at all deflating — it includes two Health Affairs Blog posts on the present and future of Medicare ACOs by Mark McClellan and coauthors and Scott Heiser and coauthors.

We also want to give a delayed shout-out to the nice “shake the winter blahs” Health Wonk Review that Vince Kuraitis published at e-CareManagement on January 15. Vince included a Health Affairs Blog post by Uwe Reinhardt reacting to Jonathan Gruber’s controversial remarks and explaining why Americans aren’t stupid but are often ignorant about policy issues.

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Exhibit Of The Month: California’s Hospital Fair Pricing Act Reduces Amount Paid By Uninsured


January 29th, 2015

Editor’s note: This post is part of an ongoing “Exhibit of the Monthseries. Readers who’d like to highlight other noteworthy exhibits from the same issue are encouraged to make their pitch in the comments section below.

This month’s exhibit, published in the January issue of Health Affairs, looks at the proportion of hospital charges to and collections from uninsured patients in California from 2003 to 2012.

In the article, “California’s Hospital Fair Pricing Act Reduced The Prices Actually Paid By Uninsured Patients,” author Ge Bai of the Williams School of Commerce, Economics, and Politics at Washington and Lee University, examines how the Hospital Fair Pricing Act affects the net price paid by uninsured patients.

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New Health Policy Brief: The Two-Midnight Rule


January 23rd, 2015

A new policy brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) examines the so-called “two-midnight rule,” which takes effect on April 1 of this year for new Medicare hospital claims. The rule, announced in 2013, is an effort by the Centers for Medicare and Medicaid Services (CMS) to clarify when a patient will be considered by Medicare as an inpatient for hospital billing purposes. Under this rule, only patients that a doctor expects to need two nights in the hospital would be considered inpatients for the purpose of Medicare claims.

In the past, CMS provided little guidance to hospitals on this matter. This is important because the Medicare payment structures are very different for inpatients versus outpatients: Hospitals are reimbursed with a single comprehensive payment for all care provided to an inpatient during his or her time at the hospital, but they are paid standard fees for each unique service they provide to outpatients. This brief describes the perceived need by CMS for the two-midnight rule, how it would work, the implications for Medicare payment, and the heated response to the rule by the hospital industry.

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Early Evidence On Medicare ACOs And Next Steps For The Medicare ACO Program (Updated)


January 22nd, 2015

Note: Pratyusha Katikaneni and Carmen Diaz also contributed to this post. They are both research assistants at the Engelberg Center for Health Care Reform, The Brookings Institution.

On December 1, CMS released a Notice of Proposed Rulemaking (NPRM) for the Medicare Shared Savings Program (MSSP), which requests feedback for changes CMS is considering for the Medicare accountable care organization (ACO) programs in 2016 and beyond. The proposal suggests significant potential alterations to the program, many of which we recently reviewed, that would address major issues that ACOs and others have raised: uncertainty and inexperience at transitioning to increasing levels of risk, lack of timely and accurate data, changes in attributed patient populations from year-to-year, and financial benchmarks that fail to account for regional variations and continue to reward high ACO performance over time.

The proposed rule raises more issues than it settles, but it clearly indicates that CMS is open to meaningful public comments and will make important revisions in the MSSP. However, the proposal also illustrates the challenges of resolving these issues in a way that both assures substantial ACO participation and improvement, as well as Medicare savings.

Ideally, big changes in key features in a major program like the MSSP would be based on extensive empirical evidence on what determines success in the program. Unfortunately, only limited evidence, including case studies and some comparative data, is available on the determinants of success for Medicare ACOs, and thus on the MSSP. Data released by CMS in September, which we previously reviewed, showed that the MSSP has generated over $700 million in savings to date relative to the spending benchmarks in the program. This is around 1 percent of the costs of care for beneficiaries affected by Medicare ACO initiatives.

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