Progress in raising the
value of health care — combinations of higher quality outcomes and lower costs
— has been frustratingly slow in the United States. The problem is understood:
Too many providers are paid on the basis of volume of services provided (“fee
for service”), and too few are paid on the basis of the quality of the health
outcome. As a corollary, too much care is provided in a disjointed fashion, and
too often the care of multiple providers for multiple conditions is not
coordinated. Why has change been so slow?
One reason, Ken Thorpe and I argue in a recent op-ed,
is that not all of the policies are pulling in the same
direction. Some of the biggest obstacles have been the
so-called Stark and anti-kickback provisions. These made sense in a
fee-for-service world because doctors should not have a financial incentive,
for example, to refer patients to a surgery center they own (“Stark”) or to
receive payments when a patient uses a particular treatment
(“kickback”). Those decisions should be made on a purely medical basis. But
these laws must be modernized to support the volume-to-value transition
while preserving their original intent.
Here is an example. Recall that patients were
suffering infections because of the devices used in their
colonoscopies. In a fee-for-service world, device manufacturers sell
endoscopes, period. Any further transactions of money from the
manufacturer to the provider would be a kickback — evidence of market
manipulation. In a value-based world, the device manufacturer could bundle
the endoscope with services to help ensure best practices and an
outcome warranty where the manufacturer would cover the cost of any
resulting infection. The incentive would be for best-practice
colonoscopies, but on paper it would would look like a payment from the
manufacturer (the warranty payment) for a particular device — violating
anti-kickback laws.
Similarly, when a patient has multiple illnesses — and especially if one
is a chronic disease — the primary physician/care coordinator should oversee
the treatment plan. Without care coordination, health risks can
arise, including duplication of tests, the implementation of
contradictory treatment plans, the wrong treatment, and the prescribing of
drugs with dangerous interactions. To accomplish this level of
coordination requires that entities communicate and contract with one
another, best practices be adopted and implemented, and the relationships
between health organizations, physicians, nurses, hospitals, and device
and drug manufacturers be strong. But that also means directing the
patient to particular hospitals, doctors, and care.
Both laws complicate the ability of insurers, hospitals, device and
drug manufacturers, physicians, and others to do exactly these
things, and thus engage in value-based contracts. The good news is
that the Department of Health and Human Services has begun a systematic
examination of the Stark and anti-kickback laws by issuing a series
of requests for information asking for comment on barriers to
coordinated care. But Congress should act to ensure these relationships
and activities continue to develop by modernizing the Stark and
anti-kickback laws.
Wednesday, August 29, 2018
On the Record
The lesson learned is those two models need to be sustainable
themselves…and synergies are icing on the cake. I think sometimes we go for the
icing before the cake is baked."
— Ashraf Shehata, a principal in KPMG's health care life
sciences advisory practice and in its Global Healthcare Center of Excellence,
tells AIS Health about take-aways from the failed merger bid between grocery
retail giant Albertsons Companies and major drugstore chain and PBM Rite Aid
Corp.
Oscar Health in August announced plans to enter ...
...the Medicare Advantage
market in 2020, following a $375 million investment from Google parent
Alphabet. Oscar currently covers 239,594 lives, with 230,476 members enrolled
in individual plans. About 70% of Oscar's members are enrolled in the insurer's
exchange offerings in six states.
Is Express Scripts' New NPF "Patient Unfriendly"?
As of Jan. 1, Express Scripts Holding Co. will introduce 48 new
formulary exclusions in its 2019 National Preferred Formulary (NPF). While an
industry expert describes one new exclusion for a hepatitis C drug as "a
patient unfriendly change," an Express Scripts spokesperson contends that
patients, not cost, come first.
Adam Fein, Ph.D., president of Pembroke Consulting, Inc. and CEO of Drug Channels Institute, notes that Express Scripts, for the first time, excluded products in two specialty categories: HIV antiretrovirals and Factor VIII recombinant products for hemophilia treatment.
In the hepatitis C category, the PBM says it will exclude AbbVie's Mavyret, which Fein describes as "the market share leader with a low list price." The formulary will add Merck's Zepatier, "whose list price was recently cut but can’t treat all types of hepatitis C," Fein says.
"Consequently, the [Express Scripts] 2019 preferred formulary will force at least one in four patients to use the products with high list prices and high rebates," Fein says. "Many patients will end up incurring much higher out-of-pocket costs. Incredibly, Express Scripts advocates copay cards as a fix!"
In the press release announcing its 2019 NPF, Express Scripts explains that, "after clinical considerations, formulary preference is given to high-value therapies with the lowest net cost, achieved through low list price, rebate, or both."
Thus, for hepatitis C treatment, the PBM says its upcoming formulary "will prefer low-price leader" Zepatier "and market leaders" Harvoni, Epclusa and Vosevi in place of Mavyret.
Express Scripts' Jennifer Luddy cites "a lot of value" in the PBM’s new NPF. Upcoming changes will save plans an estimated $3.2 billion for the 2019 plan year, with cumulative savings for plans leveraging NPF since 2014 totaling $10.6 billion, she says. Its national formulary, which covers more than 25 million people, will provide access to 3,886 medications next year.
Subscribers may read the in-depth article online. Learn more about
subscribing to AIS Health's publications.
Tuesday, August 28, 2018
HHS Meets Some PETS: Patient-Empowering Technologies
August 28, 2018
By: Judy
Sarasohn, HHS (Public Affairs)
HHS
Deputy Secretary Eric D. Hargan hosted the department’s first PETS summit on
Wednesday, and nary a dog nor cat was in sight.
But
there were entrepreneurs and providers who are using smart phones, software IT
and AI to help empower patients to take control of their health and improve
their well-being. These tools are fondly known in Deputy Secretary Hargan’s
office as patient-empowering technologies, or PETS.
The
summit included entrepreneurs and health providers for the purpose of exchanging
facts and information so the department could better understand technological
innovations that could benefit Medicare and Medicaid beneficiaries. Making
technology accessible to patients so they can better manage their own health
plays a role in Secretary Alex Azar’s initiative to transform the U.S.
healthcare system into one that pays for value.
“Chronic
disease is the most significant cause of patient disability and is also the
most significant source of patient cost. Many chronic diseases are preventable,
manageable and treatable when patients are empowered with the right
information, tools and support,” Hargan told the summit participants. And he
acknowledged that influencing patient behavior is hard work.
Companies
presenting at the summit included Livongo, Trainer Rx, Preventice Solutions,
Medisafe, AbleTo and Cohero Health. Depending on their target populations,
their various devices can help patients keep their medications straight,
contact a doctor, and alter their diet; or provide alerts to patients,
caregivers and family members; or locate and reach out to connect vulnerable
individuals to mental health specialists. Some provide personalized coaching,
as well as coordinating care with a patient’s family.
Representatives
of HHS at the summit included senior leaders from NIH, AHRQ, CTO, ONC, FDA and
CMS.
Deputy
Secretary Hargan told the entrepreneurs, “We’re here to learn where you all
have been successful in this area, what has worked, what hasn’t. … We’d like to
know the barriers you all face.”
As
he said, “HHS, like you, is looking to give patients technology with which they
can better manage their health.”
Some public employees face Social Security hurdles
Pension offsets reduce Social Security
benefits, but some qualify for exceptions.
Aug 27, 2018 @ 12:52 pm
There are about 2,700 different rules that
govern Social Security benefits, but two of them stand out as the most confusing and
unfair — at least according to the subset of workers and family members who are
subject to them.
About a quarter of employees of state and
local governments — including public school teachers, first responders and
civil servants in select states — as well as federal employees hired before
1984 do not pay FICA taxes on their earnings and therefore do not qualify for
Social Security benefits. But many of them are eligible for Social Security
benefits based on their work in the private sector or as a spouse or surviving
spouse of a worker who is entitled to benefits.
In many cases, retirees and their financial
advisers are shocked to discover that those Social Security benefits can be
reduced or even eliminated if those retirees also receive a public pension based
on work where they did not pay FICA taxes.
The Windfall Elimination Provision applies to
workers with non-covered public pensions who also worked at least 10 years in
the private sector and are eligible for Social Security benefits on their own
earnings record. A good way to remember this rule is to focus on the
"w" as in worker and windfall.
The WEP can reduce such workers' Social
Security benefits by up to half of the amount of their pension, but by no more
than $447.50 per month in 2018. For example, if a retired public employee
receives a pension of $3,000 a month and is entitled to a Social Security
benefit of $1,000 per month, his Social Security benefit would be reduced by
the maximum $447.50 to $552.50 per month.
A separate rule — the Government Pension
Offset (GPO) — applies to spouses and widows or widowers, as well as ex-spouses
and surviving ex-spouses, who were married at least 10 years before divorcing
(and who did not remarry before age 60).
The GPO can reduce a Social Security spousal
or survivor benefit by two-thirds of the amount of the government pension, with
no dollar limit. So if a retired public school teacher in one of the 15
affected states has a pension of $3,000 per month, her potential Social
Security spousal or survivor benefit could be reduced by $2,000 per month
(two-thirds of $3,000). That would wipe out any spousal benefit and
significantly reduce or even eliminate most survivor benefits.
A spousal benefit is worth up to 50% of a
worker's full retirement age benefit amount if the spouse claims it at full
retirement age or later. A survivor benefit is worth up to 100% of what the
deceased worker was collecting or entitled to collect at time of death,
including any delayed retirement credits, if the surviving spouse is at least
full retirement age.
There are a dozen states where public
employees are not covered by Social Security: Alaska, California, Colorado,
Connecticut, Illinois, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio
and Texas. In addition, employees of certain local governments in Georgia,
Kentucky and Rhode Island do not participate in Social Security.
Federal employees hired before 1984 who
participate in the Civil Service Retirement System are also affected by WEP and
GPO rules. So are people who receive a pension from an employer in a foreign
country.
Federal employees hired after the Social Security
reform legislation of 1983 pay FICA taxes as part of the Federal Employees
Retirement System and are not affected by the WEP reductions. Neither are
railroad retirees whose only pension is from railroad employment.
The triggering factor for benefit reductions
is the receipt of a non-covered pension, so it is possible for someone to claim
unreduced Social Security benefits first and reduced benefits later once their
pension begins. And don't think you can skirt the rules by collecting the
pension in a lump sum. The Social Security Administration will calculate the
annuity value of the pension and apply the offsets accordingly.
There are some escape hatches to these offset
rules, including working longer and
paying FICA taxes at the end of a public service career.
Workers with 30 or more years of "substantial earnings" subject
to Social Security payroll taxes can avoid the WEP completely, and the WEP
impact is reduced for workers with 21 to 29 years of substantial earnings. In
2018, substantial earnings are defined as $23,850 or more. Those with fewer
than 20 years of substantial earnings feel the full impact of the WEP reduction
on their Social Security benefits.
The GPO reduces Social Security spousal and
survivor benefits only if you receive a retirement or disability pension from a
federal, state or local government based on your own work where you didn't pay
Social Security taxes. The GPO does not apply if you receive a government
pension as a spouse or surviving spouse that is based on someone else's
earnings.
There is another important exception to the
GPO rule: Reductions do not apply to federal, state or local government
employees who paid Social Security taxes on their earnings during the last 60
months of government service.
http://www.investmentnews.com/article/20180827/BLOG05/180829937/some-public-employees-face-social-security-hurdles
The Man Who Used To Run Medicaid Has A New Idea To Make It Better
Andy Slavitt was working as an executive at
Optum in 2013 when he was called in to be part of the team tasked with
repairing Healthcare.gov’s disastrous rollout, kicking off a two-year stint as
acting administrator of the Centers for Medicare and Medicaid Services. Five
years later, Slavitt is back in the private sector and again focused on fixing
America’s healthcare system, this time from outside the government.
In the past year he’s founded and launched
both a nonprofit (United States of Care) and a venture capital
firm (Town Hall Ventures). Next up? The Medicaid
Transformation Project, a plan to improve the way the 75 million Americans on
Medicaid receive treatment at some of the country’s largest hospital systems.
“When I left CMS, I launched an initiative in
three critical areas to basically say, we want to change the way healthcare
works in a decade,” says Slavitt. “I was 50 when I left. The question I ask
myself is by the time I’m 60, what do I want to be different?”
Slavitt is pulling together the CEOs of 17
hospital systems around the country to commit to improving care for their
Medicaid patients over the next two years in at least four areas: behavioral
health, women and infant care, substance use disorder as well as aiming to
reduce the number of preventable emergency department visits. The participating
hospital systems serve over half of the country’s Medicaid population across 21
states.
Many of the project’s partners already have
innovative programs in place to serve their Medicaid patients. For example,
Geisinger Health System, which serves northeastern and central
Pennsylvania, has something called a “Fresh Food Farmacy,” where doctors
can “prescribe” fresh fruits and vegetables to patients who have diabetes and
identify as being food insecure. A larger issue though, Slavitt says, is getting
these health systems to share that information with one another.
“When hotels started making WiFi free it
quickly spread to every hotel. Or when banks made ATMs more available, or you
could take a picture of your check and deposit it—those innovations don’t stay
proprietary for very long,” Slavitt says. “Healthcare unfortunately doesn’t
work that way.”
To improve that communication, Slavitt has
partnered with Chicago-based digital health firm Avia, which will help
implement and scale the digital efforts that these systems come up with. “The
most important thing about this is to get these organizations to commit to say
this is not about competition. It’s improving health for everybody,” Slavitt
says.
Slavitt says this project’s goals could range
from improving a Medicaid patient’s dialysis treatment experience to making
sure a patient can find the mental health help they need close to their home.
Avia would not comment on how much the project will spend to achieve these
goals, but all of the participating health systems are clients of Avia.
“With what’s happening in this nation right
now, there’s never been a more important time for us to focus in on this
population and to do that through a united front,” says Lloyd Dean, chief
executive of Dignity Health, which serves patients in California, Arizona and
Nevada. “We’re one of the most modernized countries in the world. I just think
it’s a right that people should have access to healthcare.”
A project like this, says Signe Peterson
Flieger, an assistant professor of public health and community medicine
at Tufts University, is part
of the larger trend of shifting toward value-based care, something that Slavitt
pushed during his time running CMS.
“I think there’s no doubt that we need to
emphasize both health needs and social service needs, and we should be thinking
about these collectively and not in silos,” Peterson Flieger says. “I think
we’re going to see more of this private sector saying,'We can do this with or
without the government.' ”
And the private sector has already started
doing that, separate from Slavitt’s efforts. Two of the country’s largest
health insurers, United Healthcare and Humana HUM +0.26%, recently announced that they have
spent $730 million on housing costs to help reduce the number
of avoidable visits to the emergency room. And of course there is the
still-unnamed J.P. Morgan -Amazon- Berkshire Hathaway BRK.B +0% venture that’s
aimed at improving the healthcare of the employees at those three
companies.
“I think people say the same thing about
healthcare: ‘Oh, we’ll never be able to control the cost. We’ll never be able
to deliver better care,’ ” Slavitt says. “The reality is, if you think big,
start small, and move fast you actually can.”
This post was updated to note that Andy
Slavitt was an executive at Optum, not United Healthcare in 2013.
Follow me on Twitter at @mtindera07.
Got a tip? Email me at mtindera@forbes.com
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