Research Roundup - March 2019

Arizona 

New Arizona Law will Expand So-Called 'Junk' Health Insurance Plans

By Stephanie Innes | AZ Central | March 12, 2019

A new Arizona law, set to take effect 90 days after the 2019 legislative session ends, extends the maximum time that residents are allowed to have a short-term insurance plan from one to three years, according to AZ Central. Consumer advocates oppose the “junk plans,” arguing that they hurt consumers because they cover far fewer services than regular coverage. Increasing the contract time, they say, enables insurers to financially benefit at the expense of consumers for longer periods of time. Some states have passed laws restricting short-term plans in an effort to protect consumers. California banned short-term insurance plans altogether and Delaware issued rules limiting short-term plans to three months, with no extensions or renewals.

California

Antitrust Lawsuit Against Sutter Health by California AG Can Proceed, Judge Rules

By Cathie Anderson | The Sacramento Bee | March 15, 2019

California healthcare giant Sutter Health has failed in its attempt to persuade a San Francisco Superior Court judge to dismiss key claims in the Attorney General’s (AG’s) antitrust lawsuit alleging that Sutter has used its market power to control prices and exclude competition, reports the Sacramento Bee. Sutter argued that the AG’s lawsuit would favor insurance carriers and increase their negotiating power, and that the AG’s demands would make doing business especially onerous by forcing Sutter to use lengthy arbitrations to determine future contract terms. They also fear that they will have to negotiate contracts with insurers at staggered times, using separate teams that may not communicate with one another. This decision marks the most recent action in the lawsuit, which was filed in early 2018.

District of Columbia

District will No Longer Guarantee Ambulance Rides for Non-Emergency Patients

By Clarence Williams | The Washington Post | March 1, 2019

D.C. residents who call 911 are no longer guaranteed an ambulance ride to hospitals if responding medics and a nurse determine that their ailments are minor, according to The Washington Post. Instead, after an assessment by firefighter and EMT crews, patients who are not in serious straits will be connected (by phone) with a nurse, who will help them find care at a clinic or a primary care facility. The new policy is the city’s latest attempt to deal with a crippling call volume that frequently causes emergency responders to be unavailable for life-threatening situations.

Kansas & Missouri

Three Kansas City Area Hospitals Get Dinged by Medicare for High Complication Rates

By Dan Margolies | KCUR | March 8, 2019

Three Kansas City-area hospitals are among 17 in Missouri and seven in Kansas that are being penalized by Medicare this year for high infection and patient-injury rates, reports KCUR. Truman Medical Centers, Research Medical Center and Belton Medical Center will see their Medicare payments reduced by one percent because of high rates of complications, as part of the Affordable Care Act’s effort to improve patient care. The article lists the 24 Missouri and Kansas hospitals that have been penalized this year (out of 800 general hospitals nationwide).

Minnesota 

Minnesota Health Costs Could Double to $94 Billion

By Christopher Snowbeck | Star Tribune | Feb. 28, 2019

The overall cost of healthcare in Minnesota grew at a relatively low rate during 2016, but the broader trend points toward a doubling of expenses over the next decade, reports the Star Tribune. A report by the Minnesota Department of Health projected that annual health costs – totaling $47.1 billion in 2016 – will reach $94.2 billion by 2026. This means that Minnesota would spend $1 out of every $6 generated by the state's economy on healthcare. Spending growth will likely result from higher prices, greater use of services and advanced technology costs. Additionally, demographic shifts will boost Medicare enrollment and spending for people with multiple chronic ailments.

New York

Pathways to Progress on Difficult Decisions in Post-Acute Care

By Lynn Rogut and Anne-Marie J. Audet | United Hospital Fund | March 2019

A new report from the United Hospital Fund, supported by the New York State Health Foundation, examined patient and family decision making around post-acute care, which includes service provided by home health agencies, inpatient rehabilitation facilities, skilled nursing facilities, and long-term care hospitals. The analysis found a robust evidence base around improving post-acute decision support and provided a number of policy recommendations and solutions to increase supports for patients and their families when making decisions about where to receive post-acute care.

Oregon

Oregon Builds Consensus to Expand Cost Control Efforts

By Milbank Memorial Fund | March 26, 2019

Legislators in Oregon have called for the development of plan to achieve a “predictable and sustainable” annual growth rate for statewide healthcare spending, according to Milbank Memorial Fund. The plan would be developed by a public-private advisory group and implemented, at least initially, by the Oregon Health Authority within existing laws. Enforceable limits on cost growth will take effect in 2022. Other states, like Massachusetts, Rhode Island, and Delaware, have already implemented healthcare cost growth benchmarking.

Pennsylvania

Health Costs Are Crushing Pennsylvanians; A New Survey Shows How Much

By Antoinette Kraus | The Philadelphia Inquirer | March 6, 2019

A survey conducted by the Healthcare Value Hub found that one in two Pennsylvania adults struggled to afford healthcare, according to the Philadelphia Inquirer. Alarmingly, Pennsylvanians are coping with their affordability burdens by making decisions that may jeopardize their health such as: delaying care, avoiding getting care, skipping a test or treatment, failing to fill prescriptions or skipping doses. Pennsylvania adults pointed to, in particular, the rising cost of prescription drugs as a “major reason” for high healthcare costs. This is supported by other data that show that prescription drugs are one of the key drivers of high healthcare costs in the U.S. Other data show that certain populations – including medically vulnerable and older Pennsylvanians – are particularly hard hit by soaring drug prices. The survey revealed that there is support across party lines for government actions to curtail unfair prescription drug pricing and unreasonable price hikes.

Rhode Island

Rhode Island Healthcare Cost Trends Project Unites Providers, Payers, Policymakers, and Consumers

By Bryan Fisher | Peterson Center on Healthcare | Feb. 6, 2019

The Rhode Island Healthcare Cost Trends Project – which represents providers, payers, policymakers and consumers – has agreed to establish and commit to an annual healthcare cost growth target, according to the Peterson Center on Healthcare. In coming months, the steering committee will develop a methodology to analyze healthcare spending growth on an annual basis and create a “sustainability plan” for the project going forward. These actions are part of a larger effort to better understand how actionable data insights, analytic tools, state regulatory authority and stakeholder engagement can drive meaningful, durable changes in healthcare performance.

Texas

West Texas Senator Seeks Solution to Rural Hospital Crisis

By Orange Leader | March 26, 2019

A new bill proposed in the Texas Senate would direct the state health commissioner to develop a method to ensure that rural hospitals get full Medicaid reimbursement, according to an editorial in the Orange Leader. Since 2013, 21 rural hospitals have closed in Texas. Legislators believe that a major reason for these closures is an underpayment for Medicaid reimbursements. Over three million people live in the state’s 170 rural community—a population that tends to be older, poorer and less healthy than urban communities. About 50 percent of infants in the state are delivered to patients covered by Medicaid and in rural regions that rate is about 70 percent—demonstrating a need for rural hospitals. Though a budget provision requiring reimbursement for the full allowable cost of a service for Medicaid patients exists, managed care organizations omitted the budget provision after they began administering the Medicaid program in 2012. Legislators emphasized the need for coordination between agencies to agree on what rural hospitals are owed to avoid future hospital closures.

Washington

Price Variation and Plan Performance in WA

By DJ Wilson and Emily Boerger | State of Reform | March 26, 2019

The Washington Health Alliance has released several new reports on negotiated reimbursements from commercial payers, reports State of Reform. One report shows that reimbursement for a vaginal delivery at one medical center varies from $7,196 to $19,402, depending on the commercial payer. Another report reveals that overall inpatient utilization from 2015-2016 was down enough ($51.2 million) to offset price growth ($21.7 million). A third report analyzing “how well health plans are meeting the needs of their members and working to improve quality and reduce the cost of healthcare" identified Kaiser's HMO product as the overall top rated insurance plan, with Regence the top rated PPO plan.

Recent Reports

Women in High-Deductible Health Plans Experienced Delayed Breast Cancer Care

By J. Frank Wharam, et al. | Health Affairs | March 2019

Researchers examining the amount of time before the first breast cancer diagnostic testing, diagnosis, and chemotherapy among a group of women whose employers switched their insurance coverage from health plans with low deductibles ($500 or less) to plans with high deductibles ($1,000 or more) between 2004 and 2014 found that women at all income levels experienced delays in breast cancer care, according to Health Affairs. Currently, 46 percent of adults in the U.S. are enrolled in high-deductible health plans. Low-income women, the group with the largest delays, experienced relative delays of 1.6 months to first breast imaging, 2.7 months to first biopsy, 6.6 months to early-stage breast cancer diagnosis, and 8.7 months to first chemotherapy. These delays could imply suboptimal breast cancer outcomes.

Paying Patients to Switch: Impact of a Rewards Program on Choice of Providers, Prices and Utilization

By Christopher M. Whaley, et al. | Health Affairs | March 2019  

The impact of a rewards program implemented by 29 employers with 270,000 employees and dependents revealed that the program saved payers $2.3 million per year, or approximately $8 per person, according to a study published in Health Affairs. These programs financially rewarded employees who switched to lower-price providers after calling the rewards advice line or used price transparency tools before receiving care. In the first twelve months of the program, researchers observed a 2.1 percent relative reduction in prices across all eligible services and a 4.7 percent price reduction for MRIs alone. However, earlier research has found that reference pricing programs, which work by pressuring providers to set fairer prices, save roughly 15 percent per procedure, which may suggest that penalties work better than rewards for reducing spending.

KFF Health Tracking Poll: Prescription Drugs

By Ashley Kirzinger, et al. | Kaiser Family Foundation | March 1, 2019  

Among those currently taking prescription drugs, one-fourth of adults (24 percent) and seniors (23 percent) say it is difficult to afford their prescription drugs—including about one in ten saying it is “very difficult,” according to a Kaiser Family Foundation poll. Additionally, only 25 percent of respondents said they trusted pharmaceutical companies to price their products fairly, down from 41 percent in 2008. The poll also revealed that there is bipartisan support for some government regulation of prescription drug prices. The most popular actions include: requiring drug companies to include list prices in ads, making it easier for generic drugs to come to market and allowing the government to negotiate with drug companies to get a lower price for people with Medicare. Similar findings can be found in the Healthcare Value Hub’s Consumer Healthcare Experience State Surveys.

Retail Prescription Drug Spending Grew By $90 Billion Over Four Years

By Alex Kacik | Modern Healthcare | March 8, 2019

A new study shows that net spending for retail prescription drug coverage increased from $250.7 billion in 2012 to $341 billion in 2016. Researchers found that patients are paying more for drugs through their premium dollars, with the portion of commercial health insurance premiums spent on retail prescription drug coverage rising from 12.8 percent in 2012 to 16.5 percent in 2016. Recent debates have also focused on the role of pharmacy benefit managers in the widening gap between a drug’s list and net price. The study revealed that although rebates are consuming a greater share of pharmaceutical spending, growing from $39.7 billion in 2012 to $89.5 billion in 2016, they are slowing the growth of premiums and have partially offset the continued growth of branded drugs' list prices, according to analysis from Modern Healthcare. One limitation is that the study did not consider drugs administered in a physician’s office or hospital setting.

When Medicines are Unaffordable, Here’s How Patients Cut Costs 

By Megan Thielking | STAT | March 19, 2019  

One in five U.S. adults prescribed medicines say they’ve asked their doctor for a cheaper option, according to a new report from the Centers for Disease Control and Prevention. The report looked at three ways adults who were prescribed medicines tried to cut costs in 2017: asking for a cheaper drug; not taking medicine as prescribed; or seeking alternative therapies, according to an analysis from STAT.  More than 11 percent of adults prescribed medication in the past year said they didn’t take it as prescribed as a way to cut costs. Uninsured adults were far more likely to employ this strategy to reduce their costs, with 33 percent not taking their medication as prescribed, compared to 8 percent of people with private insurance and 13 percent of people with Medicaid coverage.

Hidden FDA Reports Detail Harm Caused by Scores of Medical Devices

By Christina Jewett | Kaiser Family Foundation | March 8, 2019  

A Kaiser Health News investigation uncovered the Food and Drug Administration’s (FDA’s) vast and hidden repository of reports on device-related injuries and malfunctions. Since 2016, at least 1.1 million incidents have flowed into the internal “alternative summary reporting” repository, instead of being described individually in the widely scrutinized public database, known as MAUDE, which medical experts trust to identify problems that could put patients in jeopardy. The agency asserted that it has worked to reform issues and put a new voluntary summary reporting program in place for 5,600 devices, but the program is relatively unknown to many of the doctors and engineers dedicated to improving device safety.  After questioning from Kaiser Health News (KHN), the FDA also confirmed the existence of reporting-exemption programs. Agency records provided to KHN show that more than 480,000 injuries or malfunctions were reported through the alternative summary reporting program in 2017 alone. This flawed oversight system could be detrimental for patient safety.

March 2019 Health Sector Economic Indicators Briefs

By Altarum | March 15, 2019  

Altarum’s March health sector economic indicators brief shows that health spending grew by 4.6 percent in 2018. The share of healthcare jobs in the total labor market is at an all-time high of 10.8 percent, growing by 2.3 percent between February 2018 and February 2019. Drug price growth was at minus 1.2 percent in February, year over year, which was the lowest since September 1972. However, the 12-month moving average still stands at a 1.1 percent growth.

Adjusting for Social Risk Factors Impacts Performance and Penalties in the Hospital Readmissions Reduction Program

By Karen E. Joynt Maddox, et al. | Health Services Research | April 2019  

Adjusting for social risk factors would cut the difference between affluent hospitals’ and safety-net hospitals’ readmissions in half under Medicare’s Hospital Readmissions Reduction Program (HRRP), according to a study from Health Services Research. The authors examined claims data from Medicare beneficiaries with congestive heart failure, acute myocardial infraction and pneumonia and found that disability, housing instability and poverty (among other social risk factors) were associated with a higher hospital readmission rate. Adjusting for social risk factors under the HRRP would result in a $17 million reduction in penalties paid by safety-net hospitals.  

Visit the Hub website for more on consumer views on healthcare affordability, high-deductible health plans, reference pricing, medical devices, drug spending, consumer harm from high costs, healthcare cost drivers, and more!

Commentary/News

Rx Drug Costs: List Prices Versus Net Prices and the Importance of Staying Within the Data

By Robert W. Dubois | Health Affairs Blog | March 13, 2019

In response to a recent Health Affairs article that found that rising prices for existing drugs are the primary driver of drug cost growth, the author of a Health Affairs blog post pointed out that results may have been based on flawed data. The authors of the original article used list prices as the source of their assessments, but should have examined net prices, which incorporate discounts and rebates. In a study of both list and net price by IQVIA, the list price of brand drugs grew by 11.3 percent in 2013 and 6.9 percent in 2017, whereas net price grew by 4.7 percent in 2013 and 1.9 percent in 2017. 

CMS Drug Spending Tools

By CMS | March 14, 2019

CMS has released several informational products that provide greater transparency on spending for drugs in the Medicare and Medicaid programs. These interactive tools focus on average spending per dosage unit and change in average spending per dosage unit over time.

Deprescribing Policies: Time for a Fresh Approach

By Ashish Jha | JAMA Forum | Feb. 27, 2019

Occasionally when patients have too many medications, some of which no longer benefit them but continue to have adverse effects, deprescribing is warranted—something that should be applied to policies that may cause more harm than good, according to JAMA Forum. One such policy, the Hospital Value-Based Purchasing (VBP) program was implemented with good intentions in order to incentivize consistent high-quality care. However, the program, which is designed to reward quality by using financial incentives to encourage hospitals to adhere to a broad set of metrics, has failed to live up to its goals. Evidence on the benefit of VBP has shown that there is little effect on patient experience, no effect on patient outcomes, and that the program failed to improve patient outcomes. There is also clear evidence that safety-net hospitals and those that disproportionately care for sick patients are more likely to get penalties, whereas hospitals that care for healthier, wealthier patients are more likely to get bonuses. However, deprescribing policies can be a challenge because policymakers often feel invested in programs that took time to implement. Additionally, hospitals and other industries have already invested substantial resources into programs like VBP and may be resistant to change. The author suggests that Congress should require rigorous, independent evaluations and every health policy intervention should have a sunset clause. Thus, Congress should only renew policies that have demonstrated positive outcomes.

Beating the Pharma Shell Game: When Health Rights are at Stake

By Fran Quigley | Health and Human Rights Journal | March 12, 2019

Polls have shown that both Republicans and Democrats view drug pricing as a top priority for this new Congress (Harvard-Politico) and that nearly one in three adults don’t take their medicines as prescribed at some point each year because of the cost (Kaiser). As a result, elected officials are outlining significant reforms to how pharmaceutical drugs are regulated, while the pharmaceutical industry continues to ramp up campaign contributions and lobbying dollars, according to the Health and Human Rights Journal. Drug companies have also tried to push the narrative that their net prices are suffering because they’re paying bigger rebates to PBMs. Though PBMs are not blameless, the truth is that the pharmaceutical industry is one of the most profitable industries, and companies often pay their CEOs and top executives staggering salaries. Detailed analysis published in Health Affairs showed that two-thirds of every dollar spent on prescription drugs in the United States is retained by the manufacturers. It is important for consumers to continue to hold drug companies accountable, without being distracted by the pharma blame game.

Stark Law Changes to Open Up Value-Based Model Participation

By Robert King | Modern Healthcare | March 4, 2019

CMS is updating the federal anti-kickback rules to reflect the shift from a fee-for-service healthcare model to a value-based one. Changes include clarifying the regulatory definition of volume or value, commercial reasonableness and fair-market value, according to Modern Healthcare. The agency received more than 300 comments from providers who expressed concerns that referring patients to a hospital or lab they have a financial relationship with could result in a violation of the Stark law, thereby preventing them from participating in value-based arrangements. Others said the agency punishes providers that inadvertently violate the law by missing a signature or using an incorrect date. The agency hopes the changes will result in better care coordination and work to remove barriers to innovation.

When Email Comes to the Doctor’s Office, Wait Times Decrease

By Austin Frakt | The New York Times | March 18, 2019

Electronic consultations, or eConsults (sometimes called eReferrals), are a growing way for primary care doctors and specialists to communicate with each other securely and have reduced wait times by freeing up capacity in crowded health systems. These eConsults are also especially beneficial for patients in rural areas, who have to travel far to see specialists, according to the New York Times. Studies have shown that a large proportion of referrals to specialists, sometimes upwards of 40 percent, are not needed. However, delays in getting the right advice from a specialist can also result in harm. Using the eConsult process, a primary care doctor can message a specialist reviewer if they are faced with a question they can’t answer in order to decide whether the issue can be addressed without a separate visit. Three years after the Los Angeles County eConsult system was implemented, wait times for specialists had fallen by an average of 17 percent. These eConsults are typically less expensive than in-person visits. Additionally, a study found that patients are equally satisfied with eConsults and in-person appointments. One downside is that primary care doctors worry that eConsluts shift work and administrative burden onto them.

Community-Focused Healthcare for the Seriously Ill

By Jessica Bylander | Health Affairs | March 2019

An estimated 60 percent of Americans have at least one chronic condition, 42 percent have several—a population the current healthcare workforce is not equipped to care for. Building a workforce that can meet this growing population’s needs will require a radical redesign of the health system that focuses on the communities where patients live, according to participants at a Health Affairs summit. A community-focused health ecosystem would shift resources away from traditional healthcare systems and into communities and community-based care to support families, community health workers, and direct care workers. This community workforce could be supported by registered nurses, social workers and some advanced practice providers. Summit participants also emphasized the need for the U.S. to place greater value on the care provided in the home and community by the lower-skilled workforce through increased pay.

Visit the Hub website for background on drug costs, reducing low-value care, increasing high-value care, rural healthcare, telemedicine and more!