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Above the Fold

What Trump’s Plan to Negotiate With Pharma Should Tell Us

Mar 3, 2016• 9

By JK WALL

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Donald Trump’s proposal to allow the federal Medicare program to negotiate prices with drug companies should be a wake-up call for the pharmaceutical industry.

Trump is leading in the polls for the Republican nomination and is even drawing the support of Tea Party conservatives who, just a year or two ago, never would have supported a candidate endorsing such strong government intervention into a private-sector industry.

Characteristically, Trump didn’t give a lot of detail about his plans. He claimed $300 billion in savings per year (about 10 times more than is realistic). But that doesn’t matter. If the leading GOP presidential candidate—a man who has proved masterful at reading the public mood and playing to it—has signed on to this idea, it proves that change has come.

I know that many veterans of the pharmaceutical industry think they have seen this horror movie before and know how it ends. There have been several past public furors over the price of prescription drugs, and each one gradually faded without major disruption for drugmakers. But this time feels different.

Not Quite DOA: Why Reports of the Demise of the President’s Budget May be Exaggerated

Mar 2, 2016

By CECI CONNOLLY

Ceci Connolly Anyone who has spent a few years in Washington knows the federal budget dance: President stands behind podium with a fancy seal and flags and unveils a giant tome. The next morning newspapers declare the tome DOA, Dead on Arrival. And we all return to regularly scheduled programming.

This year was no exception. Even the White House seemed to acknowledge the fact by releasing the 182-page blueprint on the same day as the Iowa caucuses with Donald Trump, Bernie Sanders and Ted Cruz grabbing the headlines.

But budget nuggets have a way of seeping into the policy fabric and eventually taking hold. Legislative staff scrub the document for ideas, not to mention numbers. Candidates steal liberally, adding favorites to their rhetorical arsenal. Eventually, some of those candidates become lawmakers, cabinet secretaries and even president. So the ideas live on.

Happily, President Obama chose his final budget proposal to draw attention to the inexplicable, indefensible rise in drug prices in this country. Our nonprofit, provider-sponsored plans know better than most the clinical value of so many of today’s medications. At ACHP, we have the privilege of partnering with organizations that are in pursuit of the 4Rs – the Right patients receive the Right treatments at the Right time for the Right price. From Capital Health Plan’s Center for Chronic Care, which reduces health costs for the entire community by providing concierge-type care for the sickest one percent of Capital members, to Group Health Cooperative of South Central Wisconsin’s pioneering initiative embedding pharmacists in primary care clinics to track patients who may need additional treatment management, ACHP members are working to ensure patients always receive the medications they need.

Omar Hussein, CEO Imprivata

Mar 2, 2016

By MATTHEW HOLT

This is the first of a series of interviews I’m doing at the behemoth HIMSS conference. They will hopefully give you a quick overview of the companies, and give you a sense of where the system is going.

First up, grabbed in the corridor is a quick interview with Omar Hussain, CEO of widely used data security company Imprivata. (They incidentally had a rocking party last night, and in case you were wondering this interview was filmed before not at the party!)

https://youtu.be/DX5JJHjZvfM

EMR Data show: The ACA has Improved Access to Care for Low-Income Patients

Mar 2, 2016

By JOSH GRAY

As Barack Obama’s presidency draws to a close, we anticipate growing discussion of his legacy. Much of that discussion will focus on the Affordable Care Act (ACA), his signature legislative accomplishment. The legislation is complex and in some cases ineffective and cumbersome. It can be argued, for example, that the complexity of the ACA favors the same high-cost, legacy health care players that the bill was designed to address.

But one of the major goals of the ACA was to provide more accessible, more dignified, and more effective health care to the poor. And in this respect, we believe that the Affordable Care Act – at least in those states that have elected to expand Medicaid – has been a success.

Our perspective on health care reform comes from ACAView, a joint initiative between the Robert Wood Johnson Foundation (RWJF) and athenahealth to study the impact of health care reform. We have just released our latest report, The Effects of the Affordable Care Act through 2015, which focuses on the impacts of insurance coverage expansion for patients and providers, with an emphasis on primary care. This report analyzes data from 21,900 health care providers on athenahealth’s network for at least five years. These physicians, who serve communities across the nation, are broadly representative of the country as a whole (please refer to the Appendix of the latest report). This allows us to compare physician practice before and after the coverage expansion provisions went into effect in 2014.

In June 2012, the Supreme Court ruled in “National Federation of Independent Business (NFIB) v. Sebelius” that states could choose whether or not to expand Medicaid eligibility. Although the federal government would cover the full cost of coverage expansion through 2016 and gradually decreasing to 90 percent of it thereafter, about half of the states declined to provide expanded Medicaid access to low income people. Since that time, six of those states have changed course and made Medicaid available to more of their residents.

In those states that agreed to loosen Medicaid eligibility requirements, there was no guarantee that the law would improve health care access for low income people. Because Medicaid payment levels are much lower than commercial rates, some observers were concerned that physicians would not open their schedules to see more Medicaid patients. And when patients did come in for care, no one knew whether they would form ongoing relationships with physicians or merely receive one-off care for acute or symptomatic issues.

Building Virtual Kaisers: Transcending Healthcare’s Tower of Babel

Mar 1, 2016

By GARY MENDOZA

The Tower of Babel Twenty years ago this month, California created an organizational architecture for integrated delivery systems taking global capitation—the restricted Knox-Keene (RKK) license.

At its creation, I envisioned the RKK as a pathway to virtual Kaisers.

This post distills the RKK’s guideposts for provider organizations on that pathway.

It also summarizes a straightforward path to transcend the biggest barrier to fluid, integrated care—healthcare’s Tower of Babel.

Organizational architecture for full risk. Many provider organizations do a very good job delivering patient care; very few have the systems or experience to effectively administer benefit arrangements.

Taking full risk for patient care requires both.

RKK provider organizations meet all Knox-Keene standards governing the provision of healthcare services, including requirements to provide continuity of care, assure timely access to healthcare services and separate medical decisions from fiscal management.

Without a strong financial footing, provider systems taking full risk put their patients at risk for care disruptions. RKK licensees must maintain a minimum net worth and assure that incurred-but-not-reported claims are reflected in the organization’s books and records.

Licensees also need grievance systems to address patient and non-contracting provider complaints.

Congress Needs to do Something About Data Blocking Now

Feb 28, 2016• 2

By ADRIAN GROPPER, MD and DEBORAH PEEL, MD

flying cadeucii Now it’s clear. On Thursday, the Office for Civil Rights, responsible for HIPAA enforcement and protecting the public, published a new guidance to interpret HIPAA with respect to data blocking. The limits of the current law are now evident. In the interest of affordable health care, the Precision Medicine Initiative, and common sense, it’s time for Congress update HIPAA. Believe it or not, HIPAA still allows hospitals and other electronic health record (EHR) systems to require paper forms before they release data under patient direction. Along with an allowed 30-day delay in access to electronic health records, this data blocking makes second opinions and price comparisons practically inaccessible. Over $30B in stimulus funds have been spent on EHRs and now it is still up to Congress to give to patients full digital access to digital data.

Data blocking is the result of deliberate barriers designed into current EHRs that prevent patients being able to use their own data in efficient and innovative ways. It is practiced by both EHR vendors and healthcare institutions to avoid competition by favoring the services they control. As hospitals consolidate into massive “integrated delivery networks”, the business logic for data blocking becomes clear and irrefutable. Data blocking ensures the largest health delivery networks will get larger and control pricing. The bigger they are, the more data they have about each patient and the more money each patient’s data is worth to outside interests like pharmaceutical companies and data brokers. The results are ruinous healthcare costs and hidden discrimination in insurance, credit, employment, and other key life opportunities.

Cancer and the Politics of Moonshots

Feb 28, 2016• 5

By ANEES CHAGPAR, MD

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As many of the Republican and Democratic presidential candidates lament the high cost of healthcare and put forth how they aim to make it more cost effective, few have focused on the impact of out-of-pocket costs specifically for cancer patients. They should. One in every two men and one in every three women will get cancer at some point over their lifetime. As the U.S. population and American lifespans increase, this toll will have major financial ramification for everyone.

When fighting against the disease, cancer patients are often at the mercy of the pharmaceutical industry. Given Pfizer’s recent announcement that it plans to merge with Allergan, making it the largest pharmaceutical company in the world, many cancer patients are wondering what this will mean in terms of their cost of care. Pfizer, a giant in the cancer pharma space, already raised prices on 133 of its brand-name drugs last year, and they are not alone. Big pharma has raised cancer drug prices up to 5000%. Recently ousted Turing CEO Martin Shkreli justified such hikes explaining, “I could have raised [prices] higher and made more profits for our shareholders, which is my primary duty.” The lack of focus on patients spawned outrage amongst patients, providers and even politicians, but the drug industry seems to be “in denial of the seriousness of its pricing problem.”

Granted, drug production takes years of research and can cost $350 million to get a single drug to market. Considering 95% of the experimental drugs will never see a pharmacy shelf, it might seem reasonable that the cost to patients is on the increase. But contrary to the pharmaceutical industry’s claims, the cost of innovation is not the driver of drug prices. A study published in JAMA Oncology found that prices of cancer drugs are not tied to novelty nor to effectiveness, but rather set to what the market can bear. Here within lies the problem: if you’re a patient faced with a cancer diagnosis, wouldn’t you pay whatever the cost, no matter the price?

Readmissions, Observation, and Improving Hospital Care

Feb 26, 2016• 4

By ASHISH JHA, MD

Reducing Hospital Use

Because hospitals are expensive and often cause harm, there has been a big focus on reducing hospital use. This focus has been the underpinning for numerous policy interventions, most notable of which is the Affordable Care Act’s Hospital Readmissions Reduction Program (HRRP), which penalizes hospitals for higher than expected readmission rates. The motivation behind HRRP is simple: the readmission rate, the proportion of discharged patients who return to the hospital within 30 days, had been more or less flat for years and reducing this rate would save money and potentially improve care. So it was big news when, as the HRRP penalties kicked in, government officials started reporting that the national readmission rate for Medicare patients was declining.

Rising Use of Observation Status

But during this time, another phenomenon was coming into focus: increasing use of observation status. When a patient needs hospital services, there are two options: that patient can be admitted for inpatient care or can be “admitted to observation”. When patients are “admitted to observation” they essentially still get inpatient care, but technically, they are outpatients. For a variety of reasons, we’ve seen a decline in patients admitted to “inpatient” status and a rise in those going to observation status. These two phenomena – a drop in readmissions and an increase in observation – seemed related.

Why Healthcare Costs Rise Faster Than General Inflation

Feb 26, 2016• 4

By DAVID TOOMEY AND TOM EMERICK

Over the last few years, the latest buzz in the healthcare industry has been Accountable Care Organizations (ACOs), and the next wave will be the promotion of “value-based contracting”. These are similar approaches, different words.

Generally, an ACO is formed around a physician group or a hospital linked to physicians. The basic concept is for the provider system to be accountable for patients, and the providers are financially motivated to impact their patient population’s overall costs. Makes sense, right?

For the past 25 or so years, physicians have been linked to Independent Practice Associations, Medical Groups, and Management Services Organizations. Many of these provider organizations have had financial incentives tied to performance. Data have been available to assess physician performance. So what’s different now?

Today the Feds are re-emphasizing performance in their physician contracting under the new Medicare Access and CHIP Reauthorization (MACRA), which replaces the current reimbursement formula.