Research Roundup - November 2018

California

Costs for Healthcare Services Vary Widely Across California Metro Areas

By Sara Gentzler | State of Reform | Nov. 6, 2018

The Health Care Cost Institute processed data from 1.78 billion commercial claims filed between 2012 and 2016 in 112 U.S. cities, including six California metropolitan areas, in its nationwide comparison of healthcare-services costs, reports State of Reform. The analysis showed that costs across San Jose, San Francisco, San Diego, Los Angeles, Oxnard and Riverside — as well as the rate of price increases — were not uniform between 2012 and 2016. San Jose was the second most expensive city in the national analysis, while Riverside was the 48th most expensive city. Researchers also found that outpatient costs in San Jose were 117 percent above the national average in 2016.

Connecticut

Conn. Lawmakers, Governor Wrangle Over Telemedicine

By Ana Radelat | The CT Mirror | Nov. 20, 2018

Connecticut’s U.S. congressional delegation is at odds with the governor over the failure to apply for an expansion of the HUSKY program that would give low-income residents access to new telemedicine services, especially for psychiatric care and substance abuse treatment, reports The CT Mirror. Five Democrats representing Connecticut in the U.S. House of Representatives are pressing the Malloy administration to apply for the waiver, which would allow the state’s doctors and hospitals to receive Medicaid reimbursements for their services when they treat HUSKY patients through telemedicine. The Malloy administration says the process for obtaining permission to add these services is lengthy, may not achieve the desired results and is not currently a priority. Connecticut is the only state in the nation that has not requested a waiver from the Department of Health and Human Services to incorporate telemedicine into its Medicaid program.

Iowa

Audit: Iowa Medicaid Savings Barely Half of What Was Projected

By David Pitt | Lexington Herald | Nov. 26, 2018

The governor of Iowa projected his Medicaid privatization program would save the state $232 million, but a report by the state auditor found that only around $126 million was saved, according to the Lexington Herald. The report also found that officials and lawmakers failed to file state-required quarterly financial reports. Iowa, like 39 other states, adopted a privatized, managed care system as a way to address Medicaid cost growth. But opponents questioned whether privatization actually producing any savings and pointed out that some insurance companies were sustaining losses.  

Michigan

Michigan Pursues Outcomes-Based Contracts for Medicaid Rx Pricing

By Rachel Cohrs | Inside Health Policy | Oct. 16, 2018

Michigan has asked CMS for permission to enter into outcomes-based contracts with drug manufacturers under its Medicaid program in an effort to make drugs more accessible for beneficiaries, according to Inside Health Policy. Outcomes-based contracts stipulate that if patients using the medications do not meet specified outcomes benchmarks, manufacturers could be on the hook for paying additional rebates. Proponents are optimistic that outcomes-based contracts can give Medicaid beneficiaries access to higher-cost medications more quickly, and that risk would be transferred to manufacturers. However, a study published by the Commonwealth Fund found that outcomes-based contracts have a limited capacity to reduce costs because they only apply to a small subset of medications. If the request is approved, Michigan would be the second state allowed to enter into outcomes-based contracts, behind Oklahoma.

Minnesota

Minnesota Clinics Report Sharp Slowdown in Medical Spending Growth

By Jeremy Olson | Star Tribune | Nov. 27, 2018

Healthcare spending at Minnesota clinics slowed sharply in the past year as physicians discouraged unnecessary procedures and worked with patients to steer them towards lower-cost sources for prescription drugs, labs and imaging, according to a total cost of care report from MN Community Measurement. Healthcare economists predicted at least 5 percent growth for total cost of care from 2016 to 2017, but for Minnesota privately insured patients, the total cost of care rose only 2 percent. The report suggests that doctors in Minnesota managed costs by steering patients to lower-cost clinics rather than hospitals, where prices are 45 percent more expensive. Even after adjusting for differences in patient risk, specialty providers such as Mayo clinic tended to have higher costs, as did rural providers, partially because they do not have as many options with respect to specialists referrals, reported in the Star Tribune. Minnesota is the only state in which detailed clinic price information is published, and business leaders say this reliable, accessible and comparable information is vital to truly improve healthcare.

South Carolina

Scaling Safety: The South Carolina Surgical Experience

By William Berry, et al. | Health Affairs | November 2018

In 2010, South Carolina launched the Safe Surgery South Carolina program to promote the implementation of the World Health Organization Surgical Safety Checklist. The checklist is a patient safety tool to improve safety in all care settings for patients undergoing surgical procedures. The hospitals that have reported full implementation of the checklist had significantly higher rates of physician and CEO engagement as well as high-touch activities, such as in-person meetings, than comparison hospitals, according to Health Affairs.  

Virginia

Majority of Commercial Payments to Doctors and Hospitals in Virginia Now Tied to Value

By Catalyst for Payment Reform | Oct. 23, 2018

An analysis from the Catalyst for Payment Reform, the Virginia Center for Health Innovation and the Virginia Association for Health Plans found that 67 percent of healthcare payments to Virginia physicians and hospitals by commercial insurers in 2016 were tied to value. The report was based on an examination of data from commercial and Medicaid managed care plans insuring 4.6 million Virginians. Other key findings include: 80 percent of value-oriented commercial insurer payments were in hospital contracts, 41 percent of value-based Medicaid managed care payments were in primary care, and the most commonly used value-based payment model was Shared Savings.

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Recent Reports

Patient Engagement in Healthcare Safety: An Overview of Mixed-Quality Evidence

By Anjana E. Sharma, et al. | Health Affairs | November 2018

Despite the central role of patients and caregivers in healthcare safety, interventions to promote patient engagement in safety are underexplored. A new study in Health Affairs reviewed existing research, discovering a robust body of evidence supporting patients’ self-management of anticoagulation medications and mixed-quality evidence supporting patient engagement in medication and chronic disease self-management, adverse event reporting and medical record accuracy. Researchers also found that promising modes of patient engagement in safety, such as anticoagulation management and patient portal access, are not widely implemented. They recommend that future work should foster new modalities for patients and families to self-manage care and communicate easily with care teams, the innovative use of EMRs and patients’ participation in system-level safety improvements.

Nurses’ and Patients’ Appraisals Show Patient Safety in Hospitals Remains a Concern

By Linda H. Aiken, et al.| Health Affairs | November 2018

Survey results from nurses and patients in four states have shown that only 21 percent of hospitals showed sizable improvements (of more than 10 percent) in work environment scores between 2005 and 2016, while 7 percent had worse scores. Additionally, 60 percent of the registered nurses reported that the quality of care in their hospital was less than excellent and nearly 30 percent graded their hospital unfavorably on patient safety and infection prevention. Findings confirm that nurses spend substantial time troubleshooting recurring operational problems that interrupt care and create patient safety hazards. These results suggest that more attention by hospital management is needed to redesign work flows to solve persistent operational failures that take nurses away from direct patient care. Other suggestions include paying more attention to developing a blame-free culture and improving work environments to enhance nurses’ trust in management in order to improve adverse-event reporting.

Can the Healthcare Cost Trajectory be Tamed? States’ Leaders Tackle the Cost Conundrum

By Trish Riley | Health Affairs | Nov. 1, 2018

State legislatures have focused on the rising and unpredictable costs of prescription drugs by introducing more than 170 bills related to drug costs in 2018, according to tracking efforts at the National Academy for State Health Policy. As states continue efforts to curb drug costs, they recognize that those costs are only a fraction of what is driving the health care cost trajectory, and they are re-energizing and expanding efforts to address prices in the broader health care market. A new analysis in Health Affairs discusses some of these cost containment and oversight tools that include: strengthening insurance rate reviews, administering certificate of need programs, implementing all-payer claims databases, and making payment and delivery reforms that reward value over volume. The report provides examples of states that are using these tools to transform their healthcare system. For example, the Health Care Authority in Washington state is wielding its authority across programs to align value-based purchasing models.

Concentration in Cardiology Markets Associated with Higher Prices and Lower Quality of Care

By Thomas Koch, Brett Wendling and Nathan E. Wilson | Health Services Research | October 2018

A new study, using Medicare claims and enrollment data, found that higher market concentration among providers is associated with higher total expenditures and worse health outcomes for cardiac patients. The study examined the effect of cardiology market structure on utilization and health outcomes for four patient populations—those treated for hypertension, a chronic cardiac condition, an acute cardiac condition, or an acute myocardial infarction. In three of the sample populations, patients residing in a zip code at the 75th percentile of cardiology market concentration were found to have a 5 to 7 percent greater chance of risk-adjusted mortality compared with identical patients in a zip code at the 25th percentile of market concentration. Researchers also found that there was a 7 to 11 percent increase in expenditures when moving from the 25th percentile to the 75th percentile of market concentration. The findings indicate that antitrust regulators have reason to be concerned about the effects of consolidation in physician markets on the price and quality of healthcare services.  Authors note that local markets for physician services have become increasingly concentrated in recent years.

The Impact of Financial Incentives on Health and Healthcare: Evidence from a Large Wellness Program

By Liran Einav, Stephanie Lee and Jonathan Levin | Health Economics | Nov. 18, 2018

Noting a lack of consensus on workplace wellness programs’ ability to improve health and reduce healthcare costs, researchers set out to study a program created by a large employer that provided financial incentives directly tied to employees’ health. In the study published in Health Economics, researchers found improvements in employee health, but could not find direct evidence to link the wellness program and a reduction in healthcare costs in the short-term. The program, which tracks five common health measures—body mass index, blood pressure, cholesterol, glucose, and nicotine—requires individuals to take an annual confidential health screening and have its results reported to the program administration. Researchers also found that increased financial incentives were associated with higher pass rates (maintaining BMI, glucose levels, cholesterol, and blood pressure within a certain range). 

Association Between Health Insurance Literacy and Avoidance of Healthcare Services Owing to Cost

By Renuka Tipirnei, et al. | JAMA | Nov. 16, 2018

A U.S. national survey set out to discover what the association between health insurance literacy and avoidance of healthcare services due to cost. Low health insurance literacy was most pronounced among individuals with low socio-economic status, racial and ethnic minorities, older adults, or previously uninsured populations with high health needs, according to a new report from JAMA. The survey revealed that 29.6 percent of insured adults delayed or skipped care because concerns about cost. However, higher health insurance literacy was associated with a lower likelihood of delayed or forgone care. This may be because individuals with lower health insurance literacy may not understand many cost-sharing and cost-reduction features of their health plan, whereas individuals with higher health insurance literacy are generally more knowledgeable about the value of preventative services. These findings suggest that health insurance concepts need to be communicated to patients in an accessible way to improve the appropriate use of recommended health services. 

The Nation’s Leading Scorecard on Hospital Safety Breaks Down Results Across Red and Blue States

Leapfrog Hospital Safety Grade| Nov. 8, 2018

Leapfrog’s Hospital Safety Grade, which uses national performance measures to grade hospitals, assessed more than 2,600 hospitals across the nation in their latest report. The five states with the highest percentage of “A” hospitals were: New Jersey, Oregon, Virginia, Massachusetts and Texas. The states with the lowest ranking hospitals were: Connecticut, Nebraska, Washington D.C., Delaware and North Dakota. Only 32 percent of the hospitals assessed by Leapfrog received “A” grade, while 44 percent received a “C” or lower. Researchers also noted that there were no “A” hospitals in Washington, D.C., Delaware and North Dakota. 

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Commentary/News

To Control Healthcare Costs, U.S. Employers Should Form Purchasing Alliances

By David Blumenthal, Lovisa Gustafsson and Shawn Bishop | Harvard Business Review | Nov. 2, 2018

In order for employers to confront the underlying causes of rising healthcare expenditures—high prices and healthcare inefficiencies—they will have to band together in purchasing coalitions that give them the local market power to force health systems to reform, according to an article in Harvard Business Review. Employers must seek to address the underlying reasons for rising healthcare costs instead of shifting the cost of care onto their employees. Purchasing coalitions can help employers consolidate purchasing power, especially as provider consolidation ramps up. Government may need to issue antitrust allowances in order for employers to form these coalitions.

Want Lower Healthcare Costs? Seduce the Providers

By Peter R. Orszag | Bloomberg Opinion | Oct. 31, 2018

Evidence that hospital and doctor incentives matter more than consumer cost-sharing in affecting overall healthcare spending has been accumulating for some time, according to this Bloomberg Opinion article. A new study from the University of Georgia suggests that taking 11 percent of Medicaid payments and giving it to nursing homes up front would reduce the average Medicaid stay by about a quarter, from 32 weeks to 24 weeks, and save more than $1,000 per stay. Because Medicaid payment rates to nursing homes tend to be lower, nursing homes are more likely to discharge Medicaid patients when they are at or near capacity than when they are not. However, earlier discharges of Medicaid patients don't seem to harm the patients—in terms of mortality, rehospitalization or other measures, implying that many nursing-home stays are unnecessarily long. Authors concluded that moving to episode-based provider reimbursement may be more effective in shortening Medicaid stays than increasing cost-sharing. 

A Sense of Alarm as Rural Hospitals Keep Closing

By Austin Frakt | New York Times | Oct. 29, 2018

Since 2010, nearly 90 rural hospitals have shut their doors and recent studies show that this trend is continuing, according to the New York Times. Rural hospital closures increase the distance pregnant women travel for delivery and create maternity care deserts in vulnerable communities. A study published last year in Health Affairs by researchers from the University of Minnesota found that more than half of rural counties now lack obstetric services. In its June 2018 report to Congress, the Medicare Payment Advisory Commission found that of the 67 rural hospitals that closed since 2013, about one-third were more than 20 miles from the next closest hospital. Often times, when hospitals leave a community, so do many types of specialists, including ones focusing on mental health and substance use.

When Hospitals Merge to Save Money, Patients Often Pay More

By Reed Abelson | New York Times | Nov. 14, 2018

Hospital mergers have reduced competition and raised prices in most cases, according to an analysis conducted for the New York Times of 25 metropolitan areas with the highest rates of consolidation between 2010 and 2013. Hospitals, arguing that consolidation benefits consumers with cheaper prices by coordinating services, have been merging at a quickly accelerating pace for more than a decade. However, the analysis revealed that the price of an average hospital stay increased after mergers, with prices in most areas going up between 11 percent and 54 percent. For example, after a hospital merger in the Parkersburg-Vienna area in West Virginia, the overall price of a hospital stay increased by 54 percent. This often means that patients end up paying more for their care, with little evidence suggesting that higher prices are associated with better care. Some states, like Washington and California, have opposed proposed mergers that they consider illegal and anti-competitive.

ECRI Institute Launches Website to Replace Shuttered National Guideline Clearinghouse

By Steven Ross Johnson | Modern Healthcare | Nov. 19, 2018

The nonprofit ECRI Institute has launched the ECRI Guidelines Trust to replace the Agency of Healthcare Research and Quality’s National Guideline Clearinghouse after it shut down in July, giving clinicians access to free medical practice guidelines once again, according to Modern Healthcare. The Trust will include new summaries of guidelines and a new scorecard that will provide unbiased evaluations on the rigor and transparency of guidelines compared to the National Academy of Medicine standards for trustworthiness. The group hopes to add new features such as more advanced search capabilities, an enhanced user interface and support for guideline implementation and decision making.

Medical Devices for Pain, Other Conditions Have Caused More Than 80,000 Deaths Since 2008

By Associated Press | STAT | Nov. 25, 2018

More than 1.7 million injuries and nearly 83,000 deaths caused by medical devices were reported to the FDA over the last decade, according to STAT. Medical devices that use electrical currents to block pain signals before they reach the brain, stimulators, account for the third-highest number of medical device injuries reported to the FDA. The medical device industry insists that these stimulators, which are implanted 60,000 times annually and have been approved by the FDA with little clinical testing, are safe.  In some cases, extensive studies took place after a device was already on the market. The media partner investigation also found that devices are rarely pulled from the market, even when major problems emerge, though 50 recalls involving spinal stimulators have been issued since 2005. The medical device industry has spent billions trying to influence regulators, hospitals and doctors, paying out nearly $600 million to providers in 2017 alone. Some doctors promote spinal-cord stimulators but are not legally required to disclose that they received payments from medical device companies. Additionally, more than half the patients said they felt pressured to get stimulators because they feared their doctors would cut off their pain medications. 

Dear Governor – About Those Statements on Healthcare Affordability

By Christopher F. Koller | Milbank Memorial Fund | Nov. 27, 2018

A blog post from Milbank makes the case for governors to address their constituents’ concerns about healthcare affordability, the underlying drivers of increasing costs and promote healthy behaviors. The post goes on to suggest that governors should align Medicaid and public employees’ health benefits, coordinate payment reform activities, implement insurer rate review, and track healthcare spending in their states, providing examples of states that have implemented such programs. The author notes that, “Yes, making healthcare affordable is tough, but excessive healthcare spending is robbing your state of resources that could be better invested elsewhere.”

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