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Health Affairs Web First: Do Low-Income Consumers In Medicaid Opt-Out States Pay More Out Of Pocket?


January 28th, 2015

In the twenty-three states currently not expanding Medicaid under the Affordable Care Act (ACA), uninsured adults who would have been eligible for that program and have incomes at or above poverty are now generally eligible for subsidies to purchase health coverage in their state’s Marketplace exchange. How would out-of-pocket costs in the Marketplace compare with Medicaid coverage for this group of low-income Americans living in states not expanding Medicaid?

This study, being released by Health Affairs as a Web First, estimated these costs under two simulation scenarios: calculating out-of-pocket costs for families covered by a subsidized silver Marketplace plan and comparing that with coverage under Medicaid. Author Steven Hill found that Medicaid would more than halve these adults’ average annual family out-of-pocket spending ($938 versus $1,948).

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Achieving Shared Decision-Making In Women’s Health


January 28th, 2015

The frustrating labor and delivery experience shared by physician and ethicist Carla Keirns in her Narrative Matters essay, “Watching The Clock: A Mother’s Hope For A Natural Birth In A Cesarean Culture,” published in the January issue of  Health Affairs, was unfortunate. That is not debatable. That her outcome was favorable – a healthy baby ultimately delivered in the way that Keirns had hoped – does not excuse the less-than-ideal coordination, and communication, of care that she received.

Fortunately, Keirns had the tools at her disposal—such as medical training and solid relationships throughout the provider community—to help ensure that she was able to have the birth that she had planned. But few women have those tools. It is time for us to work harder to ensure that the voice of the mother is factored into the birth experience — both before labor and during delivery.

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New On GrantWatch Blog


January 27th, 2015

Health Affairs GrantWatch Blog brings you news and views of what foundations are funding in health policy and health care.

Here are the most recent posts:

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Competition In Health Care Markets


January 26th, 2015

In this post, I want to focus on the key role economic analysis plays in the Federal Trade Commission (FTC)’s health care enforcement program. I use this lens to look first at how the FTC has become more successful in challenging hospital mergers, and then to rebut the notion that the Affordable Care Act is somehow a “free pass” for health care industry consolidation.

After the federal antitrust agencies successfully challenged a number of hospital mergers in the 1980s and early 1990s,[1] we suffered a string of court losses in the mid- and late-1990s, even in cases involving highly concentrated hospital markets.[2] In 2002, the FTC decided to take a step back and examine the reasons for our losses, and whether our analysis of hospital markets was correct.

We engaged in an in-depth retrospective study, used our authority to collect data from hospitals and insurance companies, and held workshops along with DOJ. (See here, here, here, and here.) Cory Capps of Bates and White, and other economists contributed significantly to our understanding as well. This intense period of reflection led to several important papers demonstrating that the consummated mergers stemming from the hospital merger challenges we lost—including those involving non-profits—resulted in anticompetitive effects, particularly increased prices. We also determined that our losses were due in part to the courts’ acceptance of faulty economic analysis of geographic and competitive effects. (See here, here, and here.)

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Beyond Law Enforcement: The FTC’s Role In Promoting Health Care Competition And Innovation


January 26th, 2015

By now, the Federal Trade Commission’s (FTC) law enforcement efforts in the health care area are well known. We have successfully challenged several hospital and physician practice mergers in the last few years. We also continue to pursue anticompetitive pharmaceutical patent settlements, following a victory at the Supreme Court in the Actavis case. Speaking of the Court, it is currently reviewing a case we brought against the North Carolina Board of Dental Examiners, alleging that its members conspired to exclude non-dentists from providing teeth whitening services in North Carolina.

Perhaps less publicized are the FTC’s various non-enforcement efforts in health care. Arguably most significant among those is the advocacy that the agency conducts in favor of competition principles before state legislatures and other policymakers. I will discuss our advocacy efforts in the health care space in this post, and then turn to the subject of telemedicine, an area in which FTC competition policy may play a significant role.

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Moving Beyond Wellness ROI Toward Employment-Based Cultures Of Health: Part I


January 26th, 2015

With their recent post declaring that employment-based wellness initiatives “increase rather than decrease employer spending on health care with no net health benefit,” Al Lewis and coauthors are continuing to exert a clarifying presence in a field with a history of unsubstantiated claims and suspect methods. This conclusion is not supported by the work with which we and others have been associated and is thus not one with which we agree.

Nevertheless, Lewis et al. are to be acknowledged for fueling the need for a sharper focus on the core challenge at hand for employers: how best to improve the value of their health care investment—that is, how to manage health care costs while improving employee health and productivity—in ways that are sustainable. Incremental, inconsistent and, at times, maddeningly slow progress has been made. Employment-based wellness has been at the forefront, even as the need for quality improvement continues.

Moreover leading employers with well-developed management and measurement approaches have moved well beyond calculating the return on investment of individual wellness efforts and are demonstrating the more comprehensive value of building “cultures of health.”

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Additional Requirements For Charitable Hospitals: Final Rules On Community Health Needs Assessments And Financial Assistance


January 23rd, 2015

On December 29, the Department of the Treasury and the Internal Revenue Service released long-awaited final regulations implementing Affordable Care Act provisions that impose additional obligations on charitable hospital organizations covered by §501(c)(3) of the Internal Revenue Code.  Published in the Federal Register on December 31 2014, the regulations are massive, consolidating a series of prior proposals into a single final body of regulatory law.  The regulations affect more than 80 percent of U.S. hospitals, both the 60 percent that operate as private nonprofit entities and the 23 percent that operate as governmental units.

Because state and local governments typically condition their own sales, property, and corporate income tax exemptions for nonprofit entities to a hospital’s §501(c)(3) status, the final regulations carry broad and deep implications from both a policy and financial perspective.  According to the Congressional Budget Office the 2002 the national value of the federal tax exemption exceeded $12 billion, a figure that undoubtedly has risen considerably.

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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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Unpacking The Medicare Shared Savings Proposed Rule: Geography And Policy


January 22nd, 2015

The Centers for Medicare and Medicaid Services (CMS) recently announced a Notice of Proposed Rulemaking (NPRM) for Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs). The rulemaking contains several proposals that if enacted, would fundamentally change the underlying incentives for providers to participate in the program. These proposed reforms address issues such as data sharing, renewals of participation agreements, beneficiary attribution, incentives to move to two-sided risk, and lastly, reforms to the benchmark calculations against which ACOs compete to earn savings.

The NPRM comes on the heels of a September 16, 2014 release of performance results for MSSP ACOs that began their performance years by 2013. Under the current program rules, ACOs that successfully reported quality performance data and whose savings exceeded their “minimum savings rate” were eligible to share in savings with Medicare. The MSSP program allows ACOs to choose either one-sided risk (Track 1, only upside potential to earn savings) or two-sided risk (Track 2, both upside and downside potential to earn savings/incur losses) with the final sharing amount based on achieving quality targets (up to 50 percent for Track 1 and 60 percent for Track 2). A vast majority of ACOs enrolled in Track 1, the one-sided risk option. Of the 220 ACOs in the program that participated in the first performance year, 53 earned shared savings, 52 saved money but not enough to meet the required “minimum savings rates,” and the other 115 did not accrue savings (spending on patients assigned to the ACO was greater than projected).

In February 2014, the CMS asked stakeholders for input as to how to improve its ACO programs, feedback which they used to generate the NPRM. Many ACOs and other stakeholders argued that failures to achieve savings over and above minimum savings rates were a partial result of residing in low spending areas. In this post, we examine the merits of this contention and consider the policy implications of our results and their bearing on some of the modifications of the MSSP program that CMS has proposed. We also discuss other strategies for improving the program CMS did not mention in the NPRM.

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Last Year Was A Wild One For Health Law — What’s On The Docket For 2015?


January 22nd, 2015

Everywhere we look, we see the tremendous impact of new legal developments—whether regulatory or statutory, federal or state—on health and health care. These topics range from insurance to intellectual property to religion to professionalism to civil rights. They remain among the most important questions facing Americans today.

This post is the first in a series that will stem from the Third Annual Health Law Year in P/Review event to be held at Harvard Law School on Friday, January 30, 2015. The conference, which is free and open to the public, brings together leading experts to review major developments in health law over the previous year, and preview what is to come.

The event is sponsored by the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School and the New England Journal of Medicine, and co-sponsored by Health Affairs, The Hastings Center, and the Center for Bioethics at Harvard Medical School. Below, we will highlight a few themes that have emerged so far. The conference’s speakers will author a series of posts that follow on more specific topics.

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Academic Medical Centers Should Lead The Charge On Price Transparency


January 21st, 2015

A bipartisan campaign to increase price transparency in the medical world has been reverberating through the press, government, and hospitals. Recent examples include CMS’ release of datasets for inpatient and outpatient charges and North Carolina’s House Bill 834, which was signed into law on August 21, 2013 and mandates that the state’s Department of Health and Human Services publish hospital charges. In Time Magazine, Steven Brill’s article, “Bitter Pill,” provided stunning real world examples of how the lack of price transparency can create enormous uncertainty and confusion among both patients and providers.

The momentum will only continue as Section 2718(e) of the Affordable Care Act is implemented. The provision, which took effect on October 1, 2014, mandates that each hospital establish, update, and publicize a list of standard charges for items and services provided. At this critical moment, there is one set of institutions that are uniquely positioned to ensure that price transparency is implemented deliberately and successfully: Academic Medical Centers.

For good reason, there is excitement about the potential of the price transparency movement. A recent Health Affairs study by Wu et al. suggests that when patients have access to health care prices for an intervention such as an MRI, a significant number select the lower-price option. This proof of concept shows that price transparency has the potential to lead to competition between hospitals, thus reducing costs to the patient and health care system.

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Health Affairs Briefing: Biomedical Innovation


January 20th, 2015

Biomedical innovation lengthens and enriches our lives through breakthroughs in medications and care, but it is has also been the leading source of health care cost growth over the past few decades. The upcoming February 2015 thematic issue of Health Affairs examines the topic from many perspectives.

You are invited to join us on Thursday, February 5, at a forum featuring authors from the new issue at the W Hotel in Washington, DC.  Panels will cover pharmaceuticals; biotechnology; medical devices; and accelerating, diffusing, and financing innovation.

WHEN: 
Thursday, February 5, 2015
9:00 a.m. – 12:30 p.m.

WHERE: 
W Hotel Washington
515 15th Street NW
Washington, DC, Great Room, Lower Level

Register Now!

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

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Moving From Mandate To Reality: A Roadmap For Patient And Family Engagement


January 20th, 2015

The 2010 Affordable Care Act (ACA) moved patient and family engagement to center stage in health care reform. The law mentions “patient-centered care” at least 40 times, with explicit references to patient engagement, patient experience, health literacy and shared decision making. Evidence is growing that meaningful patient and family engagement can help achieve the triple aim of better quality, better outcomes and lower health care costs and substantially reduce preventable harm.

Yet, despite these advances, the full promise of engagement remains mostly untapped, and much confusion remains about what constitutes meaningful patient and family engagement, and importantly, how to translate this evidence broadly into routine health care practice.

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The Payment Reform Landscape: Drilling Down


January 15th, 2015

Catalyst for Payment Reform’s 2014 National Scorecard on Payment Reform revealed a dramatic jump in the percent of commercial health care payments that is value-oriented, meaning the payments are tied to the quality of care in some way. In last year’s Scorecard, commercial health plans reported 40 percent of payments were value-oriented, up from just 11 percent in 2013. So on the face of it, as the “health care payment reform arms race” continues among commercial health plans, we’re well on our way to a reformed approach to payment.

But we can’t jump for joy or shout from the rooftops just yet. As I shared in my December blog, we’ve learned not all payment reform models are created equal, and a lot of the jump can be explained by an increase in pay-for-performance — not the most ambitious model when it comes to reining in costs. Meanwhile, there was a very sluggish uptick in the use of models that place providers at financial risk (such as shared risk payment arrangements for ACOs). Moreover, while the National Scorecard tells us how plans are paying for care, it cannot answer other lingering questions: Which models should purchasers adopt if they want the best savings and improvements in care? Which models are spreadable and scalable so a broader swath of the population can reap their benefits?

Since Catalyst for Payment Reform (CPR) works on behalf of large employers and other big health care purchasers, we field these kinds of questions frequently. Unfortunately, there are no easy answers. And we often find ourselves stuck at a crossroads. Purchasers say they want payment reform, and they attempt to spell out what they want and need. Health plans work to build it, but often the purchasers don’t come, saying it’s not what they asked for, or citing concerns about return on investment and scalability. Plan leaders, who think they understood the “specs” and tried to deliver, become frustrated. Over time they can become reluctant to get creative. Purchasers can become jaded and start to wonder if the plans just don’t understand their needs.

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How Policy Makers In Emerging Health Systems Can Advance Innovative Care For The Chronically Ill


January 15th, 2015

Editor’s note: This post is part of a series of several posts related to the 4th European Forum on Health Policy and Management: Innovation & Implementation, to be held in Berlin, Germany on January 29 and 30, 2015. For more information or to request your personal invitation contact info@centerforhealthcaremanagement.org or follow @HCMatColumbia.

Discussions of innovation in health care often focus on new technologies, big data, and refined population health strategies within the context of mature Western health care systems. But innovation is just as important, with perhaps greater impact, in evolving systems where more foundational opportunities exist to deliver affordable, quality care to the most expensive and challenging patients: those with chronic illnesses. In that context, public policy and regulation can spur innovation.

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Health Affairs Web First: New Medicare Per Capita Spending Shows A Rise With Age, Then A Decline After 96


January 14th, 2015

New analysis of Medicare spending from 2000–11 found that in 2011 per capita spending increased with age, from $7,566 for beneficiaries age seventy to $16,145 at age ninety-six, and then declining for even older beneficiaries. The study authors Patricia Neuman, Juliette Cubanski, and Anthony Damico also found that since 2000, the age that Medicare per capita spending peaks has increased each year: In 2000, the highest spending was found to be among those age ninety-two.

They also found that Medicare beneficiaries ages eighty and older, who comprised 24 percent of the beneficiaries, accounted for a disproportionate share (33 percent) of traditional Medicare spending in 2011. This study, being released by Health Affairs as a Web First, is part of its re-established DataWatch series, which features timely health-related data and surveys.

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Graduate Medical Education: The Need For New Leadership In Governance And Financing


January 14th, 2015

With the creation of the Medicare program in 1965, a funding stream was established to support the training of medical residents who provided care for Medicare beneficiaries. In subsequent years, Medicare has maintained these payments to teaching hospitals and remains the largest payer for Graduate Medical Education (GME), with expenditures totaling about $10 billion annually. This represents two-thirds of Federal GME support, with another $4 billion per year provided to hospitals through State Medicaid GME support.

This expenditure was a major motivation for the Senate Finance Committee to request the Institute of Medicine (IOM) to issue a report entitled “Graduate Medical Education That Meets the Nation’s Health Needs.”  The Report proposed major reforms to create a GME system with greater transparency, accountability and strategic direction, in order to increase its contribution to achieving the nation’s health goals. Prior to publication of this long awaited report on July 29, 2014, GME financing policies received substantial attention in the last two sessions of Congress, with a particular focus on increasing the number of federally funded GME positions. The House and Senate committees with GME jurisdiction produced multiple legislative initiatives.

However, there was considerable opposition from primary care stakeholders to some of the proposed changes because of inadequate emphasis on ambulatory training. Possible redistribution of Medicare GME funding was also of concern to many. This seemed to dissuade Congress from passing reform of GME policies. Nevertheless, 1,500 new GME positions were authorized in the recent Veterans Health Administration legislation.

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Reconsidering Pauly And Coauthors’ ‘Economic Framework For Preventive Care Advice’


January 12th, 2015

In the November issue of Health Affairs, Mark Pauly and coauthors criticize the lack of cost-effectiveness considerations in the Affordable Care Act (ACA), which mandates that health plans include preventive care free at the point of use. The bodies critiqued, the Advisory Committee on Immunization Practices (ACIP) and the U.S. Preventive Services Task Force, convene health experts to develop recommendations for immunizations and other preventive services.

According to the authors, the task entrusted to these bodies by the ACA, of offering sound advice on preventive care without considering its cost-effectiveness, is “impossible to do well.” They propose instead an “economic framework” under which only services with “substantial external benefits” (e.g. a vaccination for contagious disease) would be mandated for coverage. We believe this position is misguided.

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New Narrative Matters: A Mother’s Hope For A Natural Birth In A Cesarean Culture


January 9th, 2015

Health Affairs‘ January Narrative Matters essay features a physician and mother on giving birth in a culture that increasingly pushes women toward cesarean sections. Carla Keirns’ article is freely available to all readers, or you can listen to the podcast.

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