Research Roundup - April 2017


Premera’s $18 Million Profit from Obamacare Plans in Alaska Prompts State Review

By Laurel Andrews | Alaska Dispatch News | April 1, 2017

The state is examining Premera’s financial reports after they raked in $20 million on the individual insurance market, a far cry from the anticipated profit of $2.7 million, according to Alaska Dispatch News. "We've not found anything out of the ordinary but we did feel that we owed it to the consumers," said Lori Wing-Heier, director of the Alaska Division of Insurance. Alaska's individual market has been plagued by massive premium increases in prior years — about 40 percent in both 2014 and 2015 — although the majority of Alaskans with these plans receive some level of subsidy for the costs.


California Proposes Bill to Crack Down on Insurance Mergers

By Maria Castellucci | Modern Healthcare | April 5, 2017

The California Assembly is considering a bill that would require insurance companies to receive state approval before they can merge or acquire other health plans, according to Modern Healthcare. The bill would allow the state's Department of Managed Health Care to approve any mergers or acquisitions of health plans that operate in the state, in addition to approval by the insurance commissioner signoff.


Measuring Health Insurance Literacy in Connecticut

By Judith Fifield and Victor Villagra | UCONN Health | April 2017

Many Connecticut residents struggle to understand insurance terminology and perform the financial calculations required in today’s complex insurance plan designs, according to UCONN Health. These problems are difficult to overcome, but a state-wide strategy aimed ultimately at enhancing the value of health insurance for all is needed.


State Marketplace Takes a Second Big Hit for 2018

By Shelby Livingston | Modern Healthcare | April 6, 2017

Both Aetna and Wellmark Blue Cross Blue Shield have announced their exit from Iowa’s individual market in 2018, according to Modern Healthcare. Without any other additions or exits from the market, 99 counties would have just one health insurer: Medica. The remaining five Iowa counties would would have two health insurers—Medica and Gundersen.


Maryland General Assembly Passes Bill Aimed at Drug Price Gouging

By Ian Duncan | The Baltimore Sun | April 10, 2017

A bill allowing Maryland’s Medicaid administrator to inform the attorney general’s office when it sees patients being charged higher rates for drugs has passed the General Assembly, according to the Baltimore Sun.  Advocates hope that the bill will have a ripple effect and move other state legislatures to pass similar laws.  


After Three Years, Michigan’s Working Poor are Still Stuck

By Lindsay VanHulle | The Center for Michigan| April 4, 2017

Despite declining unemployment and rising wages in recent years, the share of Michigan residents considered to be working poor (a quarter of state households) has remained unchanged. These households struggle to afford increasing out-of-pocket medical expenses, among other things, according to The Center for Michigan. A report by the Michigan Association of United Ways found that many working poor are unable to afford even the lowest-premium insurance plans on the federal marketplace and often make too much money to be eligible for Medicaid.


Recommendations for Oklahoma’s Modernized Health Insurance Market

Oklahoma Department of Health and Human Services| March 2017

The Oklahoma Department of Health and Human Services published recommendations for a 1332 Waiver that would expand private coverage to residents below poverty, enact insurance rate review and increase focus on quality measures, value-based payments, and care coordination. Section 1332 of the ACA allows HHS to to waive some (but not all) of Obamacare’s insurance regulations in return for a block grant of ACA funding. To receive a waiver, states have to design an alternative that is deficit neutral and does not result in a coverage loss.


In the Tennessee Delta, a Poor Community Loses its Hospital — and Sense of Security

By Amy Goldstein | Washington Post | April 11, 2017

The demise of Haywood Park Community Hospital in Brownsville nearly three years ago added to an epidemic of dying hospitals across rural America, according to the Washington Post. Nearly 80 have closed since 2010, including nine in Tennessee, more than in any state but Texas. Many more are considered fragile — downstream victims of federal health policies, shifts in medical practice and the limited tolerance of distant corporate owners for empty beds and financial losses.


Retired Texas Teachers' Healthcare Premiums Projected to Double

By Natalie Martinez | KTXS | March 30, 2017

By September 2017, retired teachers in Texas may be paying double or even triple for their healthcare premiums, according to KTXS. There is a projected $1.3-$1.5 billion shortfall in the Texas retirement system, attributed to increasing drug costs, emergency department costs, chronic conditions and a growing retiree population.

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Recent Reports

A Multi-Year Look at the Cost Burden of Cancer Care

By Gabriela Dieguez, et al. | Milliman | April 10, 2017

Spending for cancer care in the U.S. was $125 billion in 2010 and is projected to rise between 27 percent and 39 percent by 2020, according to a report from Milliman. The increase in cancer care spending, combined with the general trend of increasing patient cost-sharing, can cause serious financial burdens. The report evaluates how benefit designs, out-of-pocket maximum, deductibles, care coordination and other components of plan designs can be structured to address the needs of these and other high-cost patients.

Surgical Checklists Save Lives

By Jia Naqvi | Washington Post | April 18, 2017

A study found that hospitals that implemented a checklist-based surgical quality improvement program reduced the number of deaths after inpatient surgery, according to the Washington Post.  The study, conducted in fourteen hospitals in South Carolina, saw a 22 percent reduction in post-surgical deaths. This is one of the first studies to show a large scale impact of a checklist, was also credited with instilling better provider communication and a culture of collaboration.   

Still Searching: How People Use Healthcare Price Information in the U.S.

By David Scheifer, Rebecca Silliman and Chloe Rinehart | Public Agenda | April 2017

People want price information when shopping for healthcare services and don’t believe higher-prices always lead to better quality, according to Public Agenda. Surprisingly, a large number of Americans don’t even realize that doctors and hospitals are charging different prices for the same service. There is strong public support for states, insurers, employers and medical providers to play a larger role in helping people obtain and understand price information.

The Effects of Pay-for-Performance Programs on Health and Healthcare Use

By Aaron Mendelson, et al. | Annals of Internal Medicine | March 2017

Pay-for-performance programs may be associated with improved care processes in ambulatory settings, but consistently positive associations with improved health outcomes have not been demonstrated in any setting, according to a study in the Annals of Internal Medicine. Results were inconsistent across studies and the magnitude of effect was often small.

Comparing Hospital List Prices and What Patients Actually Pay

By Michael Batty and Benedic Ippolito | Health Affairs | April 2017

State and national data sets provide considerable evidence suggesting that list prices reflect hospitals’ strategic behavior and have meaningful effects on payments made by and on behalf of patients, according to a study in Health Affairs. List prices varied dramatically across hospitals and within markets and correlated with prices actually paid by patients and their insurers. However, list prices had at most a limited relationship with care quality.

Patients at Hospital-Based Primary Practices More Likely to Get Unnecessary Tests

By John Mafi, et al. | JAMA | April 10, 2017

Patients with common conditions such as back pain or headaches are more likely to receive tests and services of uncertain or little diagnostic or therapeutic benefit when they seek treatment in primary care clinics located at hospitals rather than at community-based primary care clinics, according to a study in JAMA. Findings raise concern about the provision of low-value care at hospital-associated primary care practices.

Challenges in Healthcare Quality Transparency Efforts

By Trudy Millard Krause, Joseph Chen and Cecilia Ganduglia Cazaban | Journal of Healthcare Finance | Winter 2017

Many of the current transparency approaches focus on cost comparisons, lacking the appropriate consideration for quality, according to a study in the Journal of Healthcare Finance. Value-based payment systems are shifting traditional payment strategies from pay for quantity to pay for quality, but continue to face a number of key challenges related to quality reporting, including relying on claims data and key decisions such as what type of providers to focus upon, what measures to use, and how to fairly adjust measure results for accurate representation.

Price Transparency and Costs: An Evaluation of Commercial Price Variation for Obstetrical Services

By F. Lee Revere, et al. | Journal of Healthcare Finance | Winter 2017

The existence of variation in prices for routine services between regions in Texas suggests price transparency may be able to influence healthcare costs through consumer awareness, according to the Journal of Healthcare Finance. Reimbursement amounts vary significantly by insurance carrier, irrespective of market share or concentration of obstetrical providers. This suggests price transparency policies may provide the needed impetus for reducing healthcare costs by expanding consumer awareness that encourage high-cost providers to lower their prices.

A Consumer-based Evaluation of Healthcare Price and Quality Transparency

By F. Lee Revere, et al. |Journal of Healthcare Finance | Winter 2017

The quantity and usability of consumer-based websites providing healthcare price and quality transparency is steadily growing, according to the Journal of Healthcare Finance. These websites are well positioned to provide comparative information which may influence consumer purchasing decisions.

Does Media Attention Highlighting Hospitals with High Prices Lead Price Reductions?

By Karoline Mortensen, et al. | Journal of Healthcare Finance | Winter 2017

Researchers evaluated the impact of media attention and public scrutiny on the amounts charged by 20 high-cost hospitals in Florida. They concluded there is no evidence that hospitals responded to the negative publicity with any meaningful reductions in charges, according to this article in the Journal of Healthcare Finance.

Making Healthcare Markets Work

By Martin Gaynor, et al. | JAMA | April 4, 2017

Many studies have examined the increasing trend towards consolidation of physician practices and hospitals and the negative impact decreased competition can have on the quality of care and healthcare costs, according to this JAMA article. The authors suggest a new competition policy that includes multiple federal agencies, state governments and private stakeholders with three main goals: maintaining the competitiveness of healthcare markets, preventing anticompetitive practices by dominant market players and encouraging entry by new competitors.

Voluntary Value-Based Health Programs Reduce Hospital Admissions

By Andrew Ryan, et al. | JAMA | April 10, 2017

Medicare’s multipronged strategy to improve hospital value through participation in value-based reforms has contributed to a reduction in hospital readmissions, according to this JAMA article. In a study of 2,837 hospitals between 2008 and 2015, researchers found hospitals that participated in one or more value-based reforms -- including the Meaningful Use of Electronic Health Records program, the Accountable Care Organization programs, and the Bundled Payment for Care Initiative--were associated with greater reductions in 30 day readmission rates.  


States Move to Help Insurers Defray Costs of Sickest Patients

By Steven Findlay | Kaiser Health News | April 25, 2017

Some states and the Trump administration are taking steps to help insurers cover the cost of their sickest patients through reinsurance, according to Kaiser Health News.The federal reimbursement program that was part of the ACA ended this year.Alaska and Minnesota, which have seen double-digit increases this year, have implemented reinsurance programs and other states are considering taking similar action. In the proposed House bill to repeal and replace portions of the ACA, states would be allowed to establish reinsurance programs or set up separate high-risk insurance pools. “Reinsurance is the much preferred option,” said Lynn Quincy. “It doesn’t segregate sick people into a separate pool and reinsurance has proved far more efficient and effective over the years.”

Healthcare Debate Must Confront Industry Monopolization

By Douglas Singleterry | The Hill | March 31, 2017

The high level of industry consolidation threatens the cost and quality of health services, according to The Hill. With 561 hospital mergers since 2010, nearly half of all health markets are uncompetitive. In 2015, mergers and acquisitions were up 70 percent compared to 2010. In a widely cited Robert Wood Johnson Foundation study, when hospitals merge in already uncompetitive markets prices often spike more than 20 percent.

CMS Puts $120 Million into Bridging Gaps Between Clinic and Community

By Elizabeth Whitman | Modern Healthcare | April 6, 2017

What happens after a patient leaves a medical appointment is as important as what takes place during the visit itself. CMS is giving $120 million to 32 organizations to participate in its  Accountable Health Communities model, according to Modern Healthcare. Over five years, the groups will serve as test hubs to help Medicare and Medicaid beneficiaries with health-related social needs including housing instability, food insecurity, domestic violence and transportation. The model aims to reduce unnecessary healthcare utilization in an effort to drive down spending while improving outcomes and quality of care for patients.  

New Network Adequacy Rules Proposed

By Sabrina Corlette | CHIRblog | April 6, 2017

A new proposed rule spells out the Trump administration’s approach to network adequacy standards, according to the CHIRblog at the Georgetown Health Policy Institute. In the proposed rule, the Center for Consumer Information and Insurance Oversight (CCIIO) retains the network adequacy standard adopted by the Obama administration that assures that “all services will be accessible without unreasonable delay.” However, CCIIO will rely almost entirely on the states to assess whether insurers meet that standard.  

Who Would Gain Under the Proposal to Expand Health Savings Accounts?

By JoAnn Volk and Justin Giovannelli | The Commonwealth Fund | April 14, 2017

Health savings accounts (HSA’s) have been a staple of Republican healthcare proposals and are not likely to go away due to the American Healthcare Act being tabled.  HSA’s are of greater benefit to higher-income individuals because they receive a greater tax benefit and have a higher income to fund the accounts, according to The Commonwealth Fund.There is little doubt that future legislative proposals will encourage HSA’s, but a program that primarily helps those who are least likely to need assistance warrants scrutiny.