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The Little Exchange that Could…Transform the U.S. Health Care System

flying cadeuciiWhat do the classic children’s’ book “The Little Engine that Could” and federal investment in health information exchanges have in common? More than you’d think.

Much has been said about the fragmentation of the U.S. health care system and how this fragmentation can result in higher costs and worse outcomes for patients. Health Information Exchanges (HIEs) – organizations that facilitate the secure sharing of health information – are one effort to improve communication among providers, better coordinate care, boost patient satisfaction, and reduce health care costs.

To spur these exchanges the federal government has invested nearly $600 million to support the development of statewide HIEs. But, what has been the return on this investment and are the results worth the expense? This month, Sens. Lamar Alexander, Richard Burr, and Mike Enzi asked the Government Accountability Office to examine that very question.

The senators’ goal to learn more about what the government received in return for its investment is certainly a worthy one, but it is a difficult question to answer. To date, there has been very little research on the effect of HIEs on health outcomes, costs, or patient and provider attitudes toward HIEs. In fact, according to a recent RAND review of the existing research supporting the efficacy of HIEs, very few of the more than 100 existing operational HIEs have been evaluated. Without evaluation, it’s difficult to draw conclusions about what works and what doesn’t and to ensure that any future investment on the part of federal or state government is made wisely. By not building evaluation into this program, we’re missing opportunities to improve the health care system by learning from experience.

Here’s an analogy that is useful in thinking about federal investment in HIEs. Imagine that 150 years ago, the United States decided to build a national rail network to connect all major U.S. cities at an estimated total cost of $60 billion (in today’s dollars). What if five years into the effort $600 million had been spent to build portions of the tracks between Chicago and Pittsburgh, New York and Boston, and Washington and Philadelphia?

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Circulation: The Nineties Called. They Want Their Wellness Policy Back

flying cadeuciiLast year, we soundly criticized the American Heart Association (AHA) on this blog for its proposal to lower the thresholds for treating cholesterol and getting larger numbers of Americans to swallow statins. We also exposed wellness vendor StayWell, for its mathematically impossible claims of success in British Petroleum’s wellness program. Proving that great minds aren’t the only ones that think alike, StayWell and the AHA have now joined forces.  Specifically, the AHA invited the CEO of StayWell, Paul Terry, Ph.D., to help write its workplace wellness policy statement, sort of like Enron inviting Bernie Madoff to help design its financial plan. You don’t learn of this fox-in-the-henhouse conflict of interest unless you read the table on the penultimate page of text.

Naturally, Mr. Terry parlayed this windfall to StayWell’s advantage. The statement: “currently available studies indicate that employers can achieve a positive ROI through wellness” is footnoted to two studies authored by:  Paul Terry, along with other Staywell executives.  One wonders how a StayWell executive writing policy for the AHA based partly on StayWell’s own articles passes the AHA’s own test of “making every effort to avoid actual or potential conflicts of interest that may arise as a result of an outside relationship.”

How did this conflict of interest get by the peer reviewers? Look at the list of peer reviewers. Prominent among them is Ron Goetzel. Readers of THCB may recall Mr. Goetzel not just from his central role in the Penn State debacle, but also from the ”The Strange Case of the C. Everett Koop Award,” in which it was documented that his committee gave the ironically named award to a sponsor of the award (without disclosing that conflict), even though that sponsor had admitted lying about saving the lives of 514 cancer victims, who, as luck would have it, didn’t have cancer. (The sponsor, Health Fitness Corporation, a division of the equally ironically named Trustmark, has won the Koop award several times, thus proving the cost-effectiveness of their sponsorship.)

If this litany were not enough to dismiss the policy statement forthwith, there is small matter of the actual policy itself, a full employment act for wellness vendors and cardiologists alike, advocating more screening of more employees more often, while ignoring more self-evident facts than Sergeant Schultz. Specifically, they cherry-picked the available literature, continuing to cite the old “Harvard study” whose lead author has now walked it back three times. Except that they didn’t call it the “old Harvard study,” but rather a “recent [italics ours] meta-analysis,” despite the fact it was submitted for publication in 2009, and the average year of the analyses in the study was 2004.  Some studies began in the 1990s and were able to use sleight-of-hand to “show savings” despite presumably — in accordance with the conventional wisdom of the era — getting people to eat more carbohydrates and less fat.  No wonder Soeren Mattke of RAND Corporation dismissed the Harvard data as archaic in his interview with CoHealth radio in February 2014.

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The Misuse of Meaningful Use, Part II

flying cadeuciiAs a result of the determined efforts by Massachusett’s politicians, businesses, health insurance companies, hospitals, individual physicians and the Massachusetts Medical Society, nearly 100% of patients in Massachusetts now have health insurance. This is something all the healthcare players in Massachusetts can be proud of, and “universal insurance” enjoys broad public support here in Massachusetts

In an attempt to improve healthcare quality and reduce cost, Massachusetts is moving away from the “fee-for-service” system and replacing it with “physician groups” which contract with insurance companies. Most of these contracts include financial incentive/disincentive clauses about “quality” and “cost.” As a result, in Massachusetts, it is now almost impossible for a solo practitioner to obtain a contract directly with one of the state’s largest insurance companies. Almost all contracts are mediated through a local physician organization, such as an IPA, PHO or ACO.

As a result, health insurance companies now have much greater influence over the Massachusetts healthcare industry. These large insurance companies define the terms of the contract and can tell the small or medium-sized hospitals/physician contracting group their contract is a “take it or leave it” proposition. Needless to say, it is impossible for any small or medium-sized hospital/physician contracting group to refuse to accept the insurance contract when their financial viability is predicated on having access to the insurance company’s patient panel.

Originally Certified EMRs and Meaningful Use policies were created so as to provide the financially incentive to encourage primary care physicians to adopt electronic medical record programs and then use these electronic medical record programs according to specified “meaningful use” mandates. It was the hope that the appropriate use of EMRs would improve the quality or reduce the cost of healthcare. Since the program’s introduction, Meaningful Use has been expanded to almost every medical specialty and subspecialty, regardless of the appropriateness/relevance.

There has now been a fair amount of data accumulated regarding the effectiveness of electronic medical record programs. Unfortunately, most of the published data is not high quality and the majority of clinical trials are now being funded by the EMR industry. As we have seen with clinical trial sponsored by the pharmaceutical industry, only an irrational person would accept the results of a vendor sponsored EMR trial on face value.

Recently, The Office of the National Coordinator for Health Information Technology (HHS)  asked the RAND corporation to review all EMR data. RAND created the “Health Information Technology: An Updated Systematic Review with a Focus on Meaningful Use Functionalities

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Socialized or Not, We Can Learn from the VA

Art Kellerman RAND optimizedIn a post on the New York Times’ Economix blog not long ago, Princeton economics professor Uwe E. Reinhardt addresses the common characterization of the British health care system as “socialized medicine.” The label is most often used pejoratively in the United States to suggest that if anything resembling Great Britain’s National Health System (NHS) were adopted in the U.S., it would invariably deliver low-quality health care and produce poor health outcomes.

Ironically, Reinhardt notes, the U.S. already has a close cousin to the NHS within our borders. It’s the national network of VA Hospitals, clinics and skilled nursing facilities operated by our Veterans Healthcare Administration, part of the Department of Veterans Affairs. By almost every measure, the VA is recognized as delivering consistently high-quality care to its patients.

Among the evidence Reinhardt cites is an “eye-opening” (his words) 2004 RAND study from in the Annals of Internal Medicine that examined the quality of VA care, comparing the medical records of VA patients with a national sample and evaluating how effectively health care is delivered to each group (see a summary of that study).

RAND’s study, led by Dr. Steven Asch, found that the VA system delivered higher-quality care than the national sample of private hospitals on all measures except acute care (on which the two samples performed comparably). In nearly every other respect, VA patients received consistently better care across the board, including screening, diagnosis, treatment, and access to follow-up.

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10 Ways Innovation Could Help Cure the U.S. Health Spending Problem

flying cadeuciiThe United States spends more than $2 trillion per year on health care, surpassing all other countries in per capita terms and as a percentage of gross domestic product.

New, expensive medical technologies are a leading driver of ballooning U.S. health care spending. While many new drugs and devices are worthwhile because they substantially extend lives and reduce suffering, many others provide little or no health benefit.

Many studies grapple with how to control spending by considering changing how existing technologies are used. But what if the problem could be attacked at its root by changing which drugs and devices are invented in the first place?

Recently, my colleagues and I explored how medical product innovation could be redirected to reduce spending with little, if any, sacrifice to health and to ensure that any spending increases are justified by sufficient health benefits.

The basic approach is to use “carrots and sticks” to alter financial incentives for drug and device companies, their investors, health care payers and providers, and patients.

The ten policy options below could change which technologies are invented and how they’re used. In turn, this could cut spending or increase the value (health benefits per dollar spent) derived from new products that do increase spending.

We urge policymakers—both public and private—to consider these options soon and to implement those that are most promising. Policymakers should also consider how to reduce spending and get more value from health services that don’t involve drugs or devices.

The longer the delay, the more money will be badly spent.

1. Encourage Creativity in Funding Basic Science

The National Institutes of Health (NIH), the leading funder of basic biomedical research, typically favors low-risk projects. Funded researchers who fail to achieve their goals are much less likely to secure additional NIH funding. Encouraging more creativity and risk-taking could increase major breakthroughs.

2. Reward Inventors with Prizes

Public entities, private health care systems, the philanthropic sector, or public-private partnerships could award prizes to the first to invent drugs or devices that satisfy certain performance criteria, including a potential to decrease spending. Winners could receive a share of future savings that their product brings the Medicare program, which spends more than $500 billion annually.

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How to Avert a Doctor Shortage

Anticipating a growing, aging population and the anticipated demands of those newly insured under the Affordable Care Act, the Association of American Medical Colleges estimates that the United States will face a shortage of 130,000 physicians just over a decade from now.

This projected shortage, which also has been recognized by the federal government and some academics, could mean limited access to care for many Americans, plus longer wait times and shorter office visits for those who do find a doctor.

But like treating an illness, heading off the doctor shortage could hinge on early detection and intervention. And as research at RAND and elsewhere has shown, the treatment options should go beyond the standard prescriptions of training more doctors or reducing care for patients.

A RAND analysis issued last fall concluded that increased use of new models of medical care could avert the forecasted doctor shortage. These models would expand the roles of nurse practitioners, physician assistants, and other non-doctors.

One option is “medical homes,” which are primary care practices in which a personal physician leads a team of others — advanced practice nurses, physician assistants, pharmacists, nutritionists — in overseeing the delivery of individuals’ health care needs, roughly comparable to a dentist overseeing hygienists. By drawing on a broader mix of health care providers, this team approach lessens reliance on the physicians themselves.

Medical homes currently account for about 15 percent of primary care nationally. Research on their efficacy is continuing. A RAND report released in February found mixed results for a major pilot effort of the new model and offered suggestions for improvement. Still, if medical homes continue to gain traction and grow to nearly half of primary care, the nation’s projected physician shortage could shrink by 25 percent.

Another approach is nurse-managed health centers, which are clinics managed and operated by nurses who provide primary care and some specialty services. They are typically affiliated with academic health centers, but operate without physicians. If nurse-managed health centers were to account for 5 percent of primary care, up from just 0.5 percent today, the anticipated doctor shortage could, again, fall by 25 percent.

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Checking the ACA’s Vital Signs

Despite pervasive challenges associated with the rollout of the Affordable Care Act (ACA), including the botched launch of HealthCare.gov and the concurrent wave of plan cancellations, the administration remains optimistic about the ACA’s fate.

However, critics of the ACA have seized upon these recent mishaps, particularly President Obama’s pledge that “if you like your health plan, you can keep your health plan,” as evidence of the inevitable demise of the ACA.

In response to this political firestorm, the Obama administration decided to allow insurers to renew plans not complying with ACA regulations, subject to the approval of state health insurance commissioners.

Under the policy announced last November, plans failing to meet ACA standards could be renewed for one year starting as late as Oct. 1, 2014 (and hence could be continued until Oct. 1, 2015).

The extension announced last week allows individuals to keep such plans until Oct. 1, 2017.

Allowing people to keep plans out of compliance with the ACA could deprive the newly-created marketplaces, where lower- to middle-class families can receive subsidies from the government to purchase private individual coverage, of enrollees, particularly the young and healthy enrollees they need to make premiums affordable.

According to ACA critics, meager enrollment of the young and healthy in the marketplaces would lead to a death spiral, a self-reinforcing cycle of premium increases and enrollment declines that could spell doom for the system. Recent data released by the Department of Health and Human Services suggests that enrollment, particularly among young adults, has been lackluster, falling short of Obama administration targets.

Is a death spiral looming?  Our analysis suggests not.

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Do Workplace Wellness Programs Make Business Sense?

The press and trade publications strongly endorse workplace wellness programs as a good investment for employers. Soeren Mattke, a physician and RAND senior scientist, explains why his work tells a different story.

Why are workplace wellness programs so popular?

Because employers think the programs make business sense. They are supposed to improve employees’ health, increase their productivity, help control their chronic conditions, and reduce their risk of developing a chronic disease in the longer term. Employers believe that the dollars they spend on these programs will come back to them in avoided health care costs. For example, a recently published review suggested that employers gained three dollars in health care savings for every dollar spent on a workplace wellness program.

What does a typical workplace wellness program look like?

They usually have two components: lifestyle management and disease management. Lifestyle management focuses on employees with health risks such as smoking or obesity. The goal is to help employees reduce those risks, thus steering clear of serious disease down the line. In contrast, disease management is intended to support employees who already have a chronic disease by helping them take better care of themselves, e.g., reminding them to take their medications.

So are the programs living up to their press?

Perhaps in part. We recently published a study that included almost 600,000 employees at seven firms. We found that lifestyle management reduced health risk, like smoking and obesity, but no evidence that it lowered employers’ health care spending. Our new analysis extends that finding. Looking at 10 years worth of data from a Fortune 100 employer, we found that its program generated a reduction of about $30 per member, per month in health care costs. But disease management was responsible for 87 percent of the savings.

How does this disparity translate into return on employer’s investment?

The return on investment is strikingly different. For the disease management component, the employer earned a $3.80 return for every dollar invested in the program. For lifestyle management, the return was only $.25 for every dollar invested.

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Is There Really a Physician Shortage?

Large coverage expansions under the Affordable Care Act have reignited concerns about physician shortages. The Association of American Medical Colleges (AAMC) continues to forecast large shortfalls (130,000 by 2025) and has pushed for additional Medicare funding of residency slots as a key solution.

These shortage estimates result from models that forecast future supply of, and demand for, physicians – largely based on past trends and current practice. While useful exercises, they do not necessarily imply that intervening to boost physician supply would be worth the investment. Here are a few reasons why.

1. Most physician shortage forecast models assume insurance coverage expansions under the ACA will generate large increases in demand for physicians. The standard underlying assumption is that each newly insured individual will roughly double their demand for care upon becoming insured (based on the observation that the uninsured currently use about half as much care). However, the best studies of this – those using randomized trials or observed behavior following health insurance changes – tend to find increases closer to one-third rather than a doubling.

2. A recent article in Health Affairs found that the growing use of telehealth technologies, such as virtual office visits and diagnoses, could reduce demand for physicians by 25% or more.

3. New models of care, such as the patient-centered medical home and the nurse-managed health center, appear to provide equally effective primary care but with fewer physicians. If these models, fostered by the ACA, continue to grow, they could reduce predicted physician shortages by half.

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PepsiCo’s Wellness Program Falls Flat

For those of us who actually think wellness outcomes should be evidence-based, a landmark study was released today:  the first evidence provided by a major organization voluntarily (as opposed to being outed by us, like British Petroleum and Nebraska) that wellness doesn’t work.   January’s Health Affairs features a case study of PepsiCo, authored by RAND Wellness Referee Soeren Mattke and others, in which a major wellness program was shown to fall far short of breaking even.

The specific highlights of the PepsiCo study are as follows:

  • Disease management alone was highly impactful, with an ROI of almost 4-to-1;
  • Wellness alone was a money sink, with each dollar invested returning only $0.48 in savings;
  • The wellness savings were attributed to an alleged reduction in absenteeism, as self-reported by participants.  There was no measurable reduction in health spending due to wellness.

Even though the wellness ROI was far underwater, we suspect that the ROI was nonetheless dramatically overstated, for several reasons.  First, the authors acknowledge underestimating the likely costs of these programs, focusing only on the vendor fees without considering lost work time, program staff expense and false positives.  Second, no matter how hard one tries to “match” participants with non-participants (the wellness industry’s most utilized measurement scheme), it simply isn’t possible to compare mindsets of the two groups.  We learned from one of Health Fitness Corporation’s many missteps that participants always outperform non-participants, simply because they are more motivated.  Third, the absenteeism reductions were self-reported, by participants.

Finally, PepsiCo’s human resources department, having made the mistake of accepting Mercer’s advice to implement one of these programs, was already taking some political risk by acknowledging failure.  Had they incorporated the adverse morale impact, lost productivity due to workers fretting about false positives, Mercer fees and staff costs, participant bias, and self-reporting bias, the ROI could easily have turned negative (meaning the program would have been a loser even if the vendor had given it away) and the HR staff could have been taking serious career risk.

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