By LEONARD KISH and KEVIN O’BRIEN, MD

“Drugs don’t work in people who don’t take them.” C. Everett Koop, former US Surgeon General

Cost-based non-adherence, like any lack of medication adherence, leads to further complications and hospitalizations that could have been prevented. CMS appears to have recognized this when they announced that a new ACO measures on whether “providers have educated patients about the cost of medications” in the 2015 fee schedule.  Cost and quality conversations between doctors and patients are becoming a cornerstone to value-based care.

The most expensive drugs are the ones that the patient never takes.  Nearly one third of prescriptions go unfilled. When patients cannot afford a medication, and only discover the price or out-of-pocket cost at the prescription counter, it’s a big risk to long-term outcomes.

“It has been well established that a lack of affordability can drive a lack of adherence to a course of medications.  Patients who do not take their medications cost the U.S. healthcare system an estimated $300 billion in avoidable medical spending annually due to poorer health, more frequent hospitalizations and a higher risk of mortality”, according to The Center for Health Value Innovation and the Network for Health Value in Innovation.

A lack of medication adherence drives further costs for the system and suffering for patients. Estimates are that more than a third of medicine-related hospitalizations happen because people did not take medicine as directed, leading to over 125,000 deaths.

Medication non-adherence, of course, can have many reasons: side effects, difficulty in administering the drug, and others, but there is clear evidence that cost is a factor driving non-adherence. 27% of Americans did not fulfill a prescription due to financial hardship in 2012 according to a Kaiser Family Survey. As copays, deductibles and out-of-pocket expenses go up, so, likely, will non-adherence, and value-based care, and value-based benefits must understand the costs related to non-adherence.

Continue reading “The Cost-Response Curve”

By ASHISH JHA, MD

Adverse events – when bad things happen to patients because of what we as medical professionals do – are a leading cause of suffering and death in the U.S. and globally.  Indeed, as I have written before, patient safety is a major issue in American healthcare, and one that has gotten far too little attention. Tens of thousands of Americans die needlessly because of preventable infections, medication errors, surgical mishaps, and so forth.  As I wrote previously, according to Office of Inspector General (OIG), when an older American walks into a hospital, he or she has about a 1 in 4 chance of suffering some sort of injury during their stay.  Many of these are debilitating, life-threatening, or even fatal.  Things are not much better for younger Americans.

Given the magnitude of the problem, many of us have decried the surprising lack of attention and focus on this issue from policymakers.  Well, things are changing – and while some of that change is good, some of it worries me.  Congress, as part of the Affordable Care Act, required Centers for Medicare and Medicaid Services (CMS) to penalize hospitals that had high rates of “HACs” – Hospital Acquired Conditions.  CMS has done the best it can, putting together a combination of infections (as identified through clinical surveillance and reported to the CDC) and other complications (as identified through the Patient Safety Indicators, or PSIs).  PSIs are useful – they use algorithms to identify complications coded in the billing data that hospitals send to CMS.  However, there are three potential problems with PSIs:  hospitals vary in how hard they look for complications, they vary in how diligently they code complications, and finally, although PSIs are risk-adjusted, their risk-adjustment is not very good — and sicker patients generally have more complications.

So, HACs are imperfect – but the bottom line is, every metric is imperfect.  Are HACs particularly imperfect?  Are the problems with HACs worse than with other measures?  I think we have some reason to be concerned.

Continue reading “Penalizing Hospitals For Being Unsafe”

By Cyndy Nayer and Leonard Kish 

When CMS approved Solvadi, Gilead’s $84,000 drug for hepatitis C, the stakes were raised in drug price wars.  Two opposing forces, one, a financial push toward lower costs came up against an opposing force of public sentiment. The FDA’s goal of getting 90% of patients moved from costly branded prescriptions to generics met with an an large outcry in social and traditional media for providing the best available care, rallying around the story of a patient.   The wave of sentiment seems to have won over CMS.

Granted, CMS was likely considering the reversal in its policy on Solvadi, but it was the May 12^th coverage by the Kaiser Family Foundation and NPR of the patient who was denied treatment, and the amplification across social media that turned the tide toward coverage.

Solvadi had not been approved by the patient’s prescription drug carrier, so physicians lobbied CMS for coverage of Solvadi and the life of the patient. Solvadi appears to cure liver cancer in 90% of the patients who take it as recommended. CMS agreed. As a single payer, they have the incentive to balance drug costs and benefits with other costs and benefits, and new therapies often win the fight for coverage.

Getting Covered: The decision to pay for drug combinations is often quicker than FDA approval of the drug combinations

Objective health policy observers such as KFF note that in the early days of successful antiviral drug treatment for HIV, payers allowed doctors to “mix and match” medications in “off-label” or unapproved combinations as they thought best.  Medicare is often slow to approve the physician-driven cocktails, so getting CMS to adopt the strategy was a win for many very sick people in this country, as it sets a precedent for “exceptions.”

One doctor at Beth Israel Health System in Boston has a trial that has shown that combining Solvadi with another high-cost treatment, Olysio (by Janssen, cost $66,000 for a course of treatment) resulted in 90-100% cure rate.

The CMS statement in this case noted that that “the new policy will apply broadly to hepatitis C patients whose doctors prescribe the combined use of the two drugs because they meet certain criteria laid out in January by the Infectious Diseases Society of America and the American Association for the Study of Liver Diseases.” Those guidelines recommend the combined use of the two drugs in patients with advanced liver disease who have failed to be cured by earlier drug regimens – even though the FDA has not yet approved the combination—because Medicare guidelines say a patient must have access to a therapy if his or her condition warrants it.

Continue reading “What’s the Value of a Cancer Cure?”

By Farzad Mostashari,MD

By NIAM YARAGHI

Three of the five largest private health insurers in the US – UnitedHealthcare, Aetna, and Humana – have decided to follow the lead of the Centers for Medicare & Medicaid Services (CMS) and release their payment information to the public. According to Bloomberg News, this data will include 5 billion individual medical claims and $1 trillion in spending.

Releasing payment information by governmental and private health insurers is an important step towards transparency. Providing researchers with access to the details of health insurance payments is an unprecedented and long-awaited opportunity to gain insights into the drivers of rising healthcare costs. Although I share the enthusiasm of many other researchers for analyzing this valuable data, I am also concerned with unanticipated consequences that may arise with unrestricted release of sensitive and complicated healthcare insurance data to the public.

Reputation of Physicians

The performance of physicians, as some of the most reputable and highly specialized professionals of our society, cannot be evaluated only based on their insurance billing history. To the untrained eye, the abnormalities in insurance charges may seem unjustifiable. Deep expertise in the medical domain is required to investigate all of the underlying causes of the abnormal prescriptions, medical procedures and equipment utilizations. Accusing physicians of malpractice or misconduct based on hasty analysis of this data and without careful examination of the unique medical context in each case, would be unfair to those who deliver medical care to patients.

Continue reading “The Side Effects of Releasing Public Health Insurance Data to the Public”

By Darshak Sanghavi, MD & Joshua Bleiberg

Recently the Centers for Medicare and Medicaid (CMS) made troves of data publically available. CMS released data on hospital charges, physician utilization, in addition to other data sets. Journalists and academics were excited to potentially confirm their theories on healthcare spending.

We at The Engelberg Center hosted an event, Hacking America’s Health where experts from the Brookings Institution and the government spoke to participants regarding the impacts of data transparency on the nation’s healthcare system. The purpose of the festival is to focus on “innovators from around the world and their transformative solutions to global challenges.”

Out of this discussion emerged a consensus that data transparency could spur disruptive innovation in the health sector but overcoming several key barriers was essential to maximizing the benefits to the public.

Benefits of Data Transparency

1. Help Consumers Make Informed Decisions

Open data offers numerous benefits to consumers. The CMS data unveils the enormous variation in the cost of different treatments. Enabling consumers to find high value care providers improves the efficiency of the market. Price transparency can also uncover providers that charge unusually high prices and puts pressure on them to lower those charges. Finally utilization can reveal if a doctor uses a rare treatment with regularity. All of these data empower health care consumers to choose wisely.

2. Identify Vulnerable Patients

CMS has used open data for numerous projects to help patients. One project involves collaboration with local and state governments. Using Medicare claims information they identified specific patients who could be in special danger in the aftermath of a natural disaster. Without electricity it’s impossible to operate a lifesaving device like a ventilator or nebulizer. The claims data allows emergency officials to notify such individuals about the locations of shelters.

3. Data Mashups

Combining together data sets could help identify bad actors in the health system. For example merging data from the Sunshine Act which describe payments and items given to physicians combined together with utilization data from CMS. This could identify doctors who were using a drug or procedure due to a financial relationship rather than best practice. Other data mashups could also uncover unexpected patterns.

Continue reading “Upgrading the Value of Data Transparency in the Health Sector”

By Edmund Billings, MD

Did you hear the one about the CMS administrator who was asked what it would take to delay the 2014 ICD-10 implementation deadline? An act of Congress, he smugly replied, according to unverified reports.

Good thing he didn’t say an act of God.

So, now that CMS has been overruled by Congress, who wins and who loses? Who’s happy and who’s not?

The answers to those questions illustrate the resource disparity that prevails in healthcare and, mirroring the broader economy, threatens to get worse. The disappointed Have-a-lot hospitals are equipped with the resources to meet ICD-10 deadlines and always felt pretty confident of a positive outcome; the Have-not facilities were never all that sure they would make it and are breathing a collective sigh of relief.

First off, it is necessary to recognize that ICD-10 is far superior to ICD-9 for expressing clinical diagnoses and procedures. Yes, some of the codes seem ridiculous … “pecked by chickens,” for example. But people do get pecked by chickens, or plowed into by sea lions, so I believe the intent is positive, as will be the results.

An example: I saw my physician this past week at a Have-a-lot health system in San Francisco and I asked what she thinks of the ICD-10 extension.

“We’re already using (ICD-10) in our EHR and it is much better than ICD-9,” she said. “When I want to code for right flank pain, it’s right there. I don’t have to go with back pain or abdominal pain and fudge flank in. It’s easier and more accurate.”

“If I was still on paper and not our EHR, which I like,” she added, “my superbill would go from 1 page to 10. SNOMED works.”

Continue reading “The ICD-10 Extension: For Whatever Reasons, Congress Did the Right Thing.”

By Paul Keckley

The American Recovery and Reinvestment Act of 2009 (ARRA), sometimes called the Stimulus Act, was an $831 billion economic stimulus package enacted by the 111th Congress in February 2009 and signed into law on February 17, 2009 by the President.

It included $22 billion as incentives to encourage adoption of certified electronic medical records in hospitals and medical practices. The rationale behind the policy directive was clear: system-wide implementation of electronic medical records enables improvement in diagnostics and treatment coordination, fewer errors, and better coordination of patient care by teams of providers.

Almost immediately, the medical community cried foul.

Their primary beef: the cost to implement these new systems would not be recovered by the incentives.

Similarly, physicians pushed back on the conversion of the U.S. coding system from ICD-9 to ICD-10. They did not question the need for the upgrade: the increase from 19,000 to 68,000 codes is necessary to more accurately capture all relevant clinical aspects of a patient’s condition and align our data gathering with 20 other developed systems of the world where ICD-10 is already used.

That health insurers, medical groups, hospitals and others must use the same coding system that reflects advances in how we diagnose and treat seems a no brainer. But some physicians pushed back due to costs and disruption in their practices.

Last week, physicians won a battle: the Centers for Medicaid and Medicare Services (CMS) announced it was delaying the deadline for implementation of ICD-10 for a year, to October 1, 2015.

Continue reading “Health Information Technology: Sorry, There’s No Turning Back!”

By SAURABH JHA, MD

CMS released new data, shrouded thus far in needless secrecy: how much it pays individual physicians.

Unlike the Shroud of Turin, no one will question its authenticity. But authenticity doesn’t guarantee the data won’t intrigue, confuse, anger, perplex, confound and burn a few innocents at the stakes. That is before we conclude that more research is needed, or more colloquially stated, we still don’t have a clue.

Medicare bounty hunters, the modern day witch finders, are licking their lips for their share of the looted spoils. Academic researchers will be dissecting both wings of the bell-shaped curve of variation in payment to set the next battle between good and evil. But all eyes (pun intended) are upon Florida; specifically one particular provider.

The provider, an ophthalmologist, (you can look up the name) billed CMS for $21 million.

CMS paid ophthalmologists $ 5.6 billion. That’s more than the GDP of Burundi. CMS paid over a billion dollars for treatment of macular degeneration with Lucentis (Genentech).

Take a deep breath now. The treatment of one organ in over 65 year old American citizens is equal to the GDP of one African nation. Gini would have turned beetroot with embarrassment.

Diabolical? Scandalous? Shocking? Surprising?

None of the above, actually. If you think about it.

As we age, and age we do thanks to our lives being constantly “saved” by prevention, regulation and cures, arteries harden, brain atrophies and bones thin. And eyesight falters. Lens fog. Macula degenerates, reducing central vision making it difficult to read.

As we age, we consume more medical services. Yes, take that as an economic truism. And no, I’m not applying for membership of the Death Panel.

Here’s the thing. It’s nice to be able to see when you’re 75. It’s also nice to see when 85, and damn essential when 90.

Otherwise you might trip over the walking stick, fracture the neck of the femur, develop a clot in the deep veins, then a clot in the pulmonary arteries, then a raging pneumonia in ICU, followed by septic shock and a cardiac arrest. Then perhaps you may rest in peace. But not before a few interns have fractured half a dozen ribs during a well-intentioned but hopelessly misguided cardiopulmonary resuscitation that family members lobbied for to assuage their guilt for never visiting you in your nursing home.

Continue reading “It’s Raining Cataracts, Hallelujah”

By THCBist

Farzad Mostashari’s  post last week provoked a heated (to put it mildly) discussion between supporters and critics of the ACO model.

Farzad writes:

Commenters have raised several points regarding the early results of the Medicare Shared Savings Program that bear further discussion and clarification:

-The need for more details on the participants by name, along with their characteristics, actions, and outcomes.

I agree. We strongly encourage CMS to release more detailed information about the results of the program to date. As someone who’s been on the other side, I can attest however, that lack of transparency can occur despite the intentions of leadership, and even when there’s nothing to hide. CMS has taken great steps towards open data in recent years- unparalleled in its history (or in comparison to private sector payors and most states), but there is more work to be done to overcome institutional inertia, and concerns regarding the “privacy of providers”.

How is the MSSP different from an HMO?
A major similarity between managed care and “shared savings” programs is that physicians that make decisions about treatment, diagnostic, and referral options do have an incentive to reduce cost. I was trained in an era where we were not supposed to think about (or even be aware of) the cost implications of our care recommendations. I now believe that we need physician engagement in addressing the truly unsustainable rise in healthcare costs that threaten to bankrupt our nation.

However, policymakers have learned a few lessons from the backlash against managed care:

Quality Matters
Reducing cost cannot be the only outcome. In the MSSP, in the first year only can you qualify for savings simply by reporting quality measures. In future years, ACOs will have to not only reduce total cost but also perform well on measures of patient satisfaction, clinical quality, and utilization (such as ambulatory care sensitive admissions) to collect shared savings payments.

What about patient choice?
If the patient doesn’t like the care they’re getting, they can get care elsewhere. This is a sore point for many ACOs, especially those that have been successful in managed care arrangements, but the current regulations in no way limit patients’ ability to seek care elsewhere. MSSPs are required to notify patients that they have formed an ACO, and patients have the option of opting out of the sharing of their claims data with the ACO.

Shared Savings versus capitation
Finally, the MSSP program is indeed layered on top of fee-for-service payments (versus prospective payments/ capitation), and most MSSPs have opted for the “upside only” track for the first three years. We acknowledge that where the ACO includes a hospital sponsor, they must contend with “demand destruction” on their fee-for-service lines of business if they reduce procedures, admissions and emergency department visits. However, physician-led ACOs are not similarly encumbered, and this model provides them with a “safe” transitional path towards taking risk. It is also worth noting that “one-sided risk” during the riskiest early transition period would tend to reduce the likelihood of a physician having to choose between limiting needed care and going bankrupt.

Continue reading “The ACO Hypothesis: Farzad Mostashari Responds”