John Muir Health launched an innovation initiative, added beer, and exceeded its first-year revenue goal.
Innovation and performance-improvement initiatives were among the primary focal points at HealthLeaders' annual Revenue Cycle Exchange, which was held last week at the Omni Tucson National Resort in Arizona.
Among the highlights of the event was John Muir Health's report of significant financial gains from an innovation initiative that the Walnut Creek, CA-based health system calls "Revination."
The two-year, board-approved initiative has "top-line revenue implications as well as cost reduction components," said Joshua Welch, executive director of revenue cycle at John Muir, which includes two medical centers and a medical center affiliate.
Welch identified five elements of the initiative:
Increasing payer yield through claims-denial management
Maximizing patient payments through efforts such as point-of-service (POS) collection gains
Advocacy work to help patients secure healthcare coverage and other financial resources
Vendor utilization management
Driving cost savings through performance improvement
Another component "is just having fun," he added. "We brewed Revination Ale, and it was good. I put together some Revination survival packs for my directors and managers that had beer, pretzels, mustard, and all kinds of fun stuff. There is a lot of recognition for our employees."
First-Year Results
The initiative generated big gains in its first year, with the health system beating Revination expectations in 2016.
"We had set a Year 1 goal of about $6.8 million in top-line revenue benefit for the organization and about $1.2 million in cost reduction. We actually blew the revenue goal out of the water, with an $8.1 million increase," Welch said.
Cost savings were just $44,000 shy of the Year 1 target.
In 2016, ROI on $1.5 million in Revination costs was twice as high as forecast, with an expected net benefit to cost ratio of 2.5 and an actual ratio of 5.2. Year 1 initiative costs included a new claims-processing platform and staff-engagement spending such as gift cards that accompany Revination Certificates awarded to nine employees per month in three categories (saves, heroic effort, and quality. Staff from across the organization eligible for the recognition.
"In Year 2, the bar is raised, and we are living that right now. We are tracking a $13 million [total benefit] target, which represents about 1% of net patient revenue at John Muir—we are about a $1.3 billion organization," he said.
Generating New Revenue and Cost Savings
The health system has several vendor partners playing revenue cycle roles, which presented a cost-reduction opportunity.
"We had weekly calls with them to not only explain the Revination initiative, but also explain how we wanted to improve our performance across revenue cycle. They do so much of our business, it was important that we share the same goals."
Selectively adding new vendors generated most of the Year 1 cost savings, Welch said.
"Where we had one vendor previously, we put in champion-challenger models where vendors are working side-by-side on half of the inventory to create natural competition… The champion-challenger vendor model gave us a little rate arbitrage."
Improved revenue cycle team performance in front-end activities was a key element of Year 1 increased revenue. The team "spent a lot of time developing reports, identifying risky accounts, and shoring up other processes that yielded a lot of the revenue benefit."
Energizing the revenue cycle team "continues to be one of the most important elements of the initiative and achieving incremental performance improvement," Welch said.
He is confident John Muir can meet or exceed Year 2 Revination expectations.
"We know we have opportunities even though we have gotten all of the low-hanging fruit in Year 1. This is really about getting at the claim denials and optimizing organizational performance."
This year's Revination goals include boosting monthly POS collections from $500,000 to $750,000 and launching a Denials Avoidance Taskforce drawn from across the organization, including revenue cycle, contracting, case management, information technology, and compliance.
CMS has put on hold the rollout of three new cardiac episodes of care and the addition of hip fractures to the Comprehensive Care for Joint Replacement bundled-payment program.
The announcement this week that the Centers for Medicare & Medicaid Services will delay implementation of four Medicare bundled-payment initiatives is merely a pause and does not signal the demise of episode-of-care payment models, says one orthopedic surgeon.
The bundled-payment initiatives had been slated to launch on July 1. The new launch date is Oct. 1.
"The delay in the cardiac bundles and femur fracture bundles is simply related to the inability to work out the details of each bundle such that the doctors and hospitals involved can effectively manage the episodes," says Louis Levitt, MD.
Levitt is a practitioner and vice president at Washington, DC-based Centers for Advanced Orthopaedics and an assistant clinical professor at George Washington University.
In an interim final rule with comment period filed Monday, CMS put on hold the rollout of three new cardiac episodes of care and the addition of hip fractures to the Comprehensive Care for Joint Replacement bundled-payment program.
The cardiac episodes of care placed that remain pending are:
Acute myocardial infarction
Coronary artery bypass graft
Cardiac rehabilitation
Levitt says CMS needs to step up its bundled-payment game before implementing the new initiatives, which would add an acute-care episode to CJR for the first time. Currently, the CJR bundled-payment models apply only to hip and knee replacement procedures.
"When you try to create a bundle for an acute-care episode like a femur fracture, you are dealing with significantly more variables in a sicker population. The cost of care for the acute injury is going to be more unpredictable and more difficult to control, hence the higher costs," he says.
Adding hip fractures to CJR requires a more robust approach to assessing risk and patient-to-patient variability, Levitt says.
"To engage doctors in managing acute injuries through bundles, you are going to have to work out the details of the bundle well in advance to anticipate all clinical scenarios. Because of these challenges, the bundles for acute injuries are not yet effective—hence the delay in implementation."
To be financially sustainable, bundled payments for acute-care procedures require fully engaged physicians, he says. "The future for all doctors will include their managing more effectively the entire episode of clinical care. One will no longer just be a surgeon. Now, in order to truly produce the best outcomes for our patients, we must be care managers overseeing every detail of their treatments."
Current Model 'Flawed'
CJR should be retooled before hip fracture is added to the bundled-payment program, says James Caillouette, MD, chief strategy officer at the Hoag Orthopedic Institute in Irvine, CA.
"While I fully support value-based care, the lack of acknowledgment of the variance in patient risk—comorbidity—makes the current version unsustainable."
Bundled-payment models for acute-care services pose an inherent financial challenge for healthcare providers, Caillouette says.
The model works best for elective surgery, he says, "where patient health variables can be affected prior to surgery in order to reduce the risk of complications."
In cases of emergent surgery for lower extremity fractures or cardiac cases, "the current program as designed by CMS is flawed because the providers are unable to drive value to the greatest degree possible by having the opportunity to optimize patients for surgery."
The interim final rule was signed by Health and Human Services Secretary Tom Price and CMS Administrator Seema Verma.
CMS is accepting public comment on the bundled-payment initiatives through April 20. Commenters are invited to weigh in on whether implementation of the bundled-payment initiatives should be delayed further to Jan. 1, 2018.
The CEO of a community hospital in NH warns of dire consequences if coverage gains achieved through Obamacare are reversed by the American Health Care Act.
Before lawmakers in Washington roll back Medicaid expansion under the Patient Protection and Affordable Care Act (PPACA), they should meet face-to-face with Peter Wright.
Wright is president and CEO of Claremont, NH-based Valley Regional Healthcare, which operates a 25-bed community hospital. "Any negative changes to Medicaid will be just brutal for us. Our financial assistance program has been reduced dramatically since expanded Medicaid and the ACA have gone into effect," Wright told HealthLeaders last week.
New Hampshire is one of a handful of states that expanded Medicaid through the so-called private option, which allows income-eligible adults to purchase subsidized health coverage on the PPACA insurance exchange. This year, about 50,000 low-income Granite State adults have coverage through Medicaid Expansion.
Claremont is located near the White Mountains in New Hampshire's North Country. The area's views of the high peaks and low per-capita incomes are hallmarks of the community.
Wright says the Medicaid coverage cutbacks proposed in the American Health Care Act (AHCA) wending through Congress would have a devastating impact on Valley Regional and many of its patients.
"It has the potential to cripple us. Somewhere between 64% and 67% of everything we do in this organization is serving patients on Medicare, Medicaid or financial assistance," he says. "We are already in a fragile state and financially struggling, with no margin or a negative margin."
For the 2016 fiscal year, Valley Regional posted operating revenue at $38.4 million. Operating expenses outstripped revenue by more than $4 million.
Last week's scoring of the AHCA by the Congressional Budget Office, which projected millions of Americans would lose coverage from the rollback of Medicaid Expansion, is sending chills across the North Country.
"The CBO scoring confirms our concerns that the AHCA will leave hundreds if not thousands of patients without critical insurance coverage. We know that 961 people in Claremont (roughly 7%) and 2,128 people in Sullivan County (roughly 5%) have the potential of losing their coverage," Wright says.
Adoption of the AHCA or any other legislation that undermines insurance coverage for economically disadvantaged Americans poses an existential threat to Valley Regional and many of its patients, he says.
"Studies show that once patients lose coverage, they avoid necessary primary and preventive care, leaving medical issues to become emergency situations. This more severe care usually ends up in the emergency department, where the cost is higher. Without insurance, Valley Regional will be forced to absorb the expense, increasing our uncompensated care and threatening our financial stability."
Losing Access
If Valley Regional is forced to close, many low-income patients will lose access to care. "We are located at ground zero of one of the communities that has the highest need in the entire state. You can't expect people in this community to travel for care because they won't. Sometimes, they even have trouble getting to us."
Any significant rollback of Medicaid Expansion will lead to a dramatic spike in uncompensated care across The Granite State, Steve Ahnen, president of the New Hampshire Hospital Association, told HealthLeaders last week.
"Since Medicaid Expansion went into effect, we have seen about a 45% reduction in the number of uninsured patients who show up in emergency departments seeking care across the state," he says.
Projected coverage reductions are just the tip of the AHCA iceberg because the architects of the bill did nothing to restore the $155 billion cut in Medicare reimbursement to hospitals over a 10-year period that helped finance Obamacare, Ahnen says.
"So, at a time when we could be seeing fewer people covered with insurance, we could also be seeing lower reimbursement for hospitals from Medicare."
The AHCA needs to go back to the drawing board, he says. "We would see a significant challenge across the state with the kind of retrenchment and rollback that is envisioned in this bill. Certainly, in many communities like Claremont, they would feel this very swiftly and very significantly."
The positive effects of the Patient Protection and Affordable Care Act on population health are undeniable, says the head of the Commonwealth Fund.
Researchers found significant gains in access to healthcare and across nearly four dozen healthcare performance measures since the implementation of key PPACA provisions five years ago.
A report showing that fewer people lacked health insurance in the years following the healthcare reform law's coverage expansion was released Thursday by the Commonwealth Fund.
Data in the organization's annual Commonwealth Fund Scorecard shows that the positive impact of the PPACA is undeniable, David Blumenthal, MD, president of the nonprofit healthcare think tank, told reporters Wednesday.
"It is clear that states, especially those that have expanded Medicaid, have made substantial progress in ensuring that their residents have health insurance. Millions are better able to get the healthcare they need since the law was passed, and the quality of care has improved for many."
The Commonwealth Fund scorecard evaluates 44 indicators grouped into four dimensions of performance: access and affordability, prevention/quality, avoidable hospital use and costs, and healthy lives.
Blumenthal emphasized widespread gains in patient safety in doctors' offices and hospitals and said the study helps set the bar for proposals to repeal and replace the PPACA.
"We must hold onto the gains that we have made and build on them to improve even more. We must ensure that people in every state and community can benefit from the achievements of the past five years."
State Rankings
Vermont earned the highest ranking in the scorecard study, followed by Minnesota, Hawaii, Rhode Island, and Massachusetts. Mississippi received the lowest ranking.
The scorecard study found several healthcare-performance improvements that likely are related directly to the PPACA:
Gains in the rate of health insurance coverage and the ability to access care when needed
Higher levels of treatment quality and patient safety
Reductions in hospital readmission rates
While the scorecard study shows a considerable amount of performance variation in the delivery of healthcare services, gains from the PPACA are measurable and widespread, according to the report.
Medicaid Expansion Revved Performance Gains
It notes that nearly all state health systems improved on a broad array of health indicators between 2013 and 2015. The period coincides with implementation of the Affordable Care Act's major coverage expansions.
The most significant healthcare-performance gains were observed in states that accepted Medicaid expansion.
Those states typically ranked higher than non-expansion states before and after the law's coverage expansions, but also saw the greatest gains in healthcare access between 2013 and 2015.
States that achieved double-digit reductions in their uninsured rate for working-age adults between 2013 to 2015—Arkansas, California, Kentucky, Nevada, New Mexico, Oregon, Rhode Island, Washington, and West Virginia—all expanded Medicaid as soon as federal resources became available in 2014, according to the report.
Room for Improvement
Despite the many gains highlighted, researchers identified some areas of concern.
Disparities in healthcare were found to be persistent among low-income populations. And the rate of premature death (before age 75) could have been lower during the study period if access to coverage had increased slightly in 30 states, research suggests.
The Congressional Budget Office analysis of the Republican bill to replace the ACA projects that millions of people will lose health insurance coverage. Physician and hospital groups are expressing concern.
Healthcare-provider organizations reacted with a chorus of criticism to Monday's release of the Congressional Budget Office score of the House Republican proposal to repeal and replace the Patient Protection and Affordable Care Act.
"The American Health Care Act is projected to cause 14 million Americans to lose their health insurance coverage as early as next year, and as many as 24 million by 2026. These are people, not numbers—people who all too often will be left without access to regular care, putting their health at risk," Darrell Kirch, MD, president and CEO of the Association of American Medical Colleges said in a media statement Monday.
The AAMC represents nearly 400 teaching hospitals and health systems.
Although House Speaker Paul Ryan (R-WI) praised the CBO finding that the American Health Care Act (AHCA) would reduce the federal deficit by $337 billion through 2026, Kirch said the costs of the repeal-and-replace deal outweigh the benefits.
"While some may point to the federal budget savings the AHCA would yield, the fact is these Americans will still need healthcare. America's teaching hospitals will continue to care for these vulnerable patients, but will be forced to absorb the resulting uncompensated care costs, threatening their ability to support and advance their research and education missions."
AOA 'Cannot Support' AHCA
The organization that represents more than 129,000 osteopathic physicians (DOs) says the projected loss of healthcare coverage under the AHCA is unacceptable.
"The Congressional Budget Office scoring confirms that the American Health Care Act neither increases access to care nor addresses the foundational issues plaguing our health care system. The American Osteopathic Association has long supported federal and state efforts to increase access to affordable health care and cannot support this legislation," Boyd Buser, DO, president of the AOA, said in a media statement Monday.
The House Republican plan to repeal and replace the Patient Protection Affordable Care Act has a fatal flaw, Buser said.
"It's critical to recognize that the difficulty in ensuring coverage and access to affordable health care is a symptom of perpetually rising costs. In order to drive down costs, Congress should prioritize prevention and care coordination, two measures proven to reduce overall costs by addressing health problems at the most readily treatable stage and eliminating waste. Decreasing the number of Americans with coverage will not achieve that goal."
AHA: 'Cannot Support' AHCA
The American Hospital Association (AHA) also sounded alarm over the CBO's estimate of coverage reductions.
"The CBO number reinforces our concerns about the importance of maintaining coverage for those vulnerable patients who need it," AHA President and CEO Rick Pollack said in a statement released by his office Monday.
"As we said in our letter to Congress last week, any changes to the Affordable Care Act must be guided by ensuring that we continue to provide healthcare coverage for the millions of people who have benefited from the law. We cannot support a bill that the CBO and others clearly indicate would reduce coverage for so many people."
NJHA Sees Return to 'Dark Days'
Adoption of the AHCA would have grim consequences, Betsy Ryan, JD, president and CEO of the New Jersey Hospital Association, said in a statement Monday.
"The impact of the law, as revealed today by the nonpartisan Congressional Budget Office, would return our country to the dark days where the nation's uninsured rate reached double digits and millions of families didn't have access to primary and preventive care."
"That means a less healthy population and higher healthcare costs. It also means that healthcare providers will once again carry the burden of providing safety-net care. The impact will be borne by all healthcare consumers and taxpayers who will experience cost shifts to pay for that care."
In an ominous symptom of consumerism, patients overburdened by financial obligations are constricting cash flow to providers.
As the Trump administration and Congress bear down on Obamacare, the battle lines are being drawn in the struggle to attain a cost-effective transformation of healthcare services.
"Whether it is the delivery of services, or pharmaceuticals, or how we pay—we are playing politics with healthcare," says Olusegun Ishmael, MD, MBA, an emergency room doctor at Paris Community Hospital in Illinois and former health plan executive.
"It is not like building cars. Healthcare is about people's lives and the quality of life. Most people are going to be alive for a long time, and healthcare helps determine the quality of the life you are going to have."
The evolution of healthcare economics is placing a heavy financial burden on patients, who face a consumerism crossroads, the former health plan vice president says.
"I have talked with some of the nurses I work with; and, overnight, their deductibles have gone up and everybody has health savings accounts. The employer-sponsored insurance model is slowly being whittled away; and, when it is gone, the private individual is going to be left holding the bulk of the cost of their healthcare."
Thrusting higher levels of financial obligations on patients is having both positive and negative impacts, Ishmael says. "The good is [that] patients are going to be asking questions, and challenging people about costs and what treatments are for. The bad is that most patients are not going to be able to meet their costs."
Cost-shifting Constricts Provider Cash Flow
Jeff Goldsmith, PhD, associate professor of public health sciences at University of Virginia, healthcare futurist, and national advisor at Navigant, says overburdening patients financially threatens healthcare-provider cash flow.
In an article published by the Healthcare Financial Management Association in February, Goldsmith sounds alarm over the proliferation of high-deductible health plans (HDHPs) and President Trump's prediction for health savings accounts (HSAs).
"As recent experiences with the sharp growth in HDHPs have conclusively demonstrated, many patients with such accounts have trouble paying their portion of healthcare costs, even with the modest help of money saved in tax-protected consumer accounts like HSAs," Goldsmith wrote.
Of the 160 Americans who have employer-sponsored insurance (ESI), one-third have HDHPs, Goldsmith estimates. He identifies two primary drivers:
Employers shifting health-benefit costs to employees during The Great Recession
The relatively high proportion of HDHPs purchased on the PPACA health insurance exchanges.
"The circumstances mean [that] almost one in five working American families are being billed significant amounts for their healthcare use, representing an important new claim on their wages and savings," he wrote.
Goldsmith concludes that cost-shifting to consumers can constrict healthcare-provider cash flows.
"For households with limited resources, the simple fact is that the growing financial responsibility for out-of-pocket healthcare expense must compete with other more formal and established forms of debt, such as mortgages, credit cards, and student loans, effectively tying the future financial position of hospitals much more directly to the economic cycle than at any time since the advent of health insurance."
Patients face peril at the Consumer Crossroads, Ishmael says. "I don't think enough of the people who are delivering care or enough consumers are at the table to say, 'This does not make any sense.'"
The New Hampshire Insurance Department finds that the state's largest health plans are largely in compliance with state and federal law, but identified a few deficiencies.
As a deadly opioid-abuse epidemic unleashes a public health crisis in New Hampshire, the state's three largest health insurance companies appear to be rising to the challenge, market conduct exams of 2015 data show.
As part of the state government's response to high rates of opioid addiction and overdoses, the New Hampshire Insurance Department (NHID) examined claims data for Indianapolis-based Anthem, Bloomfield, CT-based Cigna Life and Health Insurance Company, and Manchester, NH-based Harvard Pilgrim Health Care of New England.
Claims were reviewed from Jan. 1 to Sept. 30, 2015. Exam findings released March 2 show that the commercial insurance carriers were largely in compliance with state and federal law, but a few deficiencies were identified.
All three companies face calls for corrective action to improve their websites' transparency and ease of access to information about behavioral health and substance use disorder (SUD) coverage.
Harvard Pilgrim was singled out for corrective action over supervision of the company that manages its behavioral health claims, United Behavioral Health/Optum. NHID is set to conduct a follow-up exam of UBH/Optum to determine whether requiring preauthorization for behavioral health services violates federal mental health parity law.
The 2015 SUD claims exams give NHID valuable baseline data on insurance coverage of rates of opioid addiction in the state, including thousands of low-income adults who gained coverage through Medicaid Expansion under the Patient Protection and Affordable Care Act, NHID Commissioner Roger Sevigny said in a media statement.
"The reports give us a baseline understanding of insurance companies' practices as we work to ensure that they comply with the law, especially with respect to mental health parity and network adequacy," he said.
The SUD claims exams reviewed seven market-conduct categories:
Delegated service agreements
Provider networks
Prior authorization practices
Grievances and appeals practices
Claims and denial volumes
Medication-assisted treatment protocols
Adherence to federal mental health parity law
Anthem, Cigna, and Harvard Pilgrim drew criticism over their website capabilities.
For all three insurance carriers, "Examiners had difficulty navigating carriers' websites to find behavioral health/SUD service providers," an NHID exam results overview says.
Anthem and Harvard Pilgrim were ordered to devise corrective action plans to fix their website deficiencies.
The examiners also found the Anthem and Harvard Pilgrim websites deficient in the area of online provider-directory accuracy. NHID is seeking documentation showing corrective action in several online provider-directory capabilities, including the method and frequency of provider-directory verification.
The absence of deficiencies in most market-conduct categories is a positive sign for Anthem, Cigna, and Harvard Pilgrim health plan beneficiaries who are grappling with opioid addiction and other substance abuse problems, Sevigny said.
"I am heartened to see coverage for behavioral health services improving over time in many areas."
Aiming to significantly reduce medication prices presents the president with golden opportunities and a set of daunting challenges, healthcare industry experts say.
President Donald Trump has said medication prices are too high and he plans to address the problem.
During his presidential campaign, Trump called for Medicare to negotiate drug pricing. In January, the president criticized the lobbying efforts of pharmaceutical companies and suggested again that the federal government should negotiate drug prices.
Although he faces high hurdles, the president appears to be on the right track, says Olusegun Ishmael, MD, MBA, an emergency room physician at Paris Community Hospital in Paris, IL, and former insurance company executive.
"The biggest insurer in this country is the U.S. government—between the Veterans Administration, Medicaid, and Medicare. The government should do the same thing that UnitedHealthcare and all the Blues do to negotiate pricing based on their volume," he says.
Insurers and foreign governments have been leveraging their purchasing power to negotiate drug prices for decades, Ishmael says.
"If someone walks into CVS or Walgreens without insurance and wants to get a prescription, they will pay almost twice as much as the UnitedHealthcare pricing. The reason is volume—it is a numbers game. As an insurer, when I have a certain amount of volume, I go to my pharmacy benefit management company and say, 'I am bringing you a million lives.'"
Political Hurdles
Although allowing government agencies to negotiate drug prices makes sense from an economic perspective, it would present the president with a harsh political reality: "Pharma is one of the biggest lobbying groups in the country, so this would be a hard change," Ishmael says.
Even with fellow Republicans controlling Congress, Trump will struggle to convince GOP lawmakers to pass legislation that would allow the government to negotiate drug prices, says Erin Fox, PharmD, director of the Drug Information Service at Salt Lake City, Utah-based University of Utah Health Care.
"Republicans controlled both houses of Congress under most of President Obama's administration, and they did nothing then," she says.
"It is not realistic to think that anything really significant will be done to achieve meaningful drug-pricing regulations unless there is some type of 'nuclear option' such as Trump supporting a single-payer approach to healthcare and dissolving every insurance company in the country. I doubt he could do that."
Any regulatory route that the White House pursues to reduce drug prices would encounter a robust roadblock in Congress, Fox says.
"A lot of Republicans, especially the Tea Party Republicans, are against regulations. So, it is very unlikely that new regulations will be adopted, even if they could do some good."
In fact, President Trump signed an executive order in February designed to cut what he called "job-killing regulations."
Importation of Drugs Problematic
There are some regulatory approaches to reducing drug prices that the Trump administration should avoid, Ishmael and Fox say.
"There has been talk of buying drugs from overseas—that gives me an ulcer," says Ishmael, who is a first-generation immigrant and holds dual American-Nigerian citizenship.
"Part of my concern about importing medication from outside the country is we would have to create another layer of bureaucracy to investigate these drugs to make sure they are safe."
"I have lived and worked in a Third World country," he says. "Medications that you get in a Third World country are not like the medications you get here. They are often selling you pretty much a placebo."
Even importing brand-name medications from countries such as Canada is a poor price-reduction strategy, Fox says.
"The reason Canada's drug prices are cheaper is because they have a single-payer healthcare system and they negotiate prices."
"Drug companies are not stupid" she says. "They know exactly how many drugs they sell to Canada, and they are not going to sell more than that to Canada just because Americans want to buy cheaper drugs from Canada."
Non-Regulatory Options
There are non-regulatory approaches to reducing drug prices that Trump could try.
Changing mindsets among frontline caregivers should be much easier than changing legislation, Ishmael says. One example he cites is the EpiPen, a medication delivery device for allergic reactions that spurred price-sticker shock last year.
There is no justifiable economic rationale for an EpiPen two-pack to cost $600, he says. "An EpiPen should not cost more than three bucks. Epinephrine is generic. It costs not more than 25 to 50 cents if you draw the drug out of a container. The syringe costs less than a dollar."
For patients at risk of severe allergic reactions, healthcare-provider organizations should start selling low-cost syringes with single doses of epinephrine in the physician-office setting, Ishmael says.
Cajoling pharmaceutical companies to increase transparency in the marketing and pricing of medications also could be a promising non-regulatory strategy for Trump to pursue, Fox says.
The pricing of medications is analogous to pricing in the automotive industry, where very few people pay the manufacturer's suggested retail price.
"Unfortunately, there are some people who have to pay the list price. Those are the people with the high-deductible health plans, or the patients without insurance who can't qualify for coupon cards that people with insurance can get," she says.
"Transparency would certainly help the conversation. It would help people understand what's going on and point toward fixes. It would help people understand there is a need for fixes."
"There are some people in Congress who think the system we have works fine." Fox says. "[They say that] this is capitalism and drug manufacturing is a business, where profits are part of the business. The problem is that people's lives are at stake."
The Perils of Playing Politics
The Trump administration needs to plan and act carefully to make significant progress in lowering drug prices, which poses a challenge for the man in charge, Fox says. "He is shaking things up, but the uncertainty that his style brings is potentially detrimental to the healthcare industry."
Furthermore, Trump should avoid nominating a leader of the Food and Drug Administration (FDA) who harbors hostility toward the agency's regulatory role, she says.
"Even in the drug industry, they don't want Trump to appoint a guy who will take away all the rules at FDA. Even the drug industry is saying we need those rules to keep people safe. I cannot imagine a world where medicines are released to the public without any efficacy data to know whether they work."
Playing politics with drug pricing is a potentially deadly sport, Ishmael says.
"It is a trillion-dollar industry. Everybody is in it to make a buck. It is very political, and that is my concern. Between the lobbying firms and our legislators all the way up to Congress and the presidency—who are not providers of care—they are trying to make decisions about healthcare but they are not involved in the day-to-day management of healthcare.
"I have a big concern about politicizing healthcare and patients' lives because the right people who should be making those decisions are not sitting at the table," he says.
The latest iteration of the tool maps the geographic density of specific healthcare service providers and the number of Medicare beneficiaries using those services.
The Centers for Medicare & Medicaid Services has unveiled an expanded version of a data tool that features interactive maps for market saturation and utilization of several healthcare services at the national, state and county level.
The Market Saturation and Utilization Data Tool was developed for use by providers to help analyze their service locations and the service utilization rates of Medicare beneficiaries.
CMS uses the data tool's market saturation and healthcare service utilization information as one means of rooting out fraud and waste in the Medicare program. The tool was formerly called the Moratoria Provider Services and Utilization Data Tool.
Market saturation is defined as the density of providers offering a particular healthcare service in a geographic area relative to the number of Medicare beneficiaries who utilize the service in that area.
Improvements to the tool include an increase in the number of healthcare-service categories from eight to ten. CMS added clinical laboratories that bill independently of other facilities and physical and occupational therapy services.
The interactive-map function of the data tool offers two display options: nation-by-state and state-by-county.
In addition to two color-coding options, the interactive-map function features pull-down menus with three sets of data: 10 healthcare service categories, four yearlong reference time periods, and five Medicare data metrics.
Healthcare service categories:
Emergency ambulance service
Nonemergency ambulance service
Emergency and nonemergency ambulance service
Clinical laboratory that bills independently from other facilities
Home health
Hospice
Medicare Part A independent diagnostic testing facility
Medicare Part B independent diagnostic testing facility
Physical and occupational therapy
Skilled nursing facility
Yearlong reference time periods:
October 2014 through September 2015
January 2015 through December 2015
April 2015 through March 2016
July 2015 through June 2016
Medicare data metrics:
Number of Medicare fee-for-service beneficiaries
Number of service providers
Number of users per service provider
Percentage of users out of fee-for-service beneficiaries
Average number of service providers per county
The latest version of the tool is its fourth update.
Incentivizing hospice care and launching hospice educational efforts in regions with high medical costs could have a significant impact on U.S. healthcare expenditures, researchers find.
To reduce healthcare spending, areas of the country with relatively high medical service costs would benefit most from increased utilization of hospice care, according to a study recently published in Health Affairs.
The study's authors focused on the potential economic benefits of increased hospice care because medical services in the final year of life account for a large share of total U.S. healthcare expenditures.
They found that "hospice use accounted for 8% of the expenditure variation between the highest and the lowest spending quintiles, which demonstrates the powers and limitations of hospice use for saving on costs."
A 2010 study published in the journal Health Services Research found that 5% of Medicare beneficiaries account for more than a quarter of Medicare spending in their final year of life.
The Health Affairs study, titled "Longer Periods of Hospice Service Associated with Lower End-Of-Life Spending in Regions with High Expenditures," is based on Surveillance, Epidemiology, and End Results (SEER) Medicare data and Medicare claims information.
The data sample features 103,745 Medicare beneficiaries who died from nine forms of cancer such as breast, lung, and liver tumors within three years of diagnosis. The study period was from 2004 to 2011.
Cost Analysis
The unadjusted (non–age-sex-race-adjusted) mean end-of-life care expenditure per decedent "was $39,600, ranging from $31,256 in quintile 1 to $49,680 in quintile 5. The mean length of hospice service in the final six months of life was 10.9 days, ranging from 13.0 days in quintile 1 regions to 7.9 days in quintile 5 regions."
Researchers found that the biggest economic benefit from hospice care is derived from increasing utilization in high-medical-service cost regions of the country.
"Longer periods of hospice service were associated with decreased end-of-life expenditures for patients residing in regions with high average expenditures but not for those in regions with low average expenditures," the researchers wrote.
Regional Care Differences
The way physicians practice medicine likely is a key factor in determining the economic impact of hospice care utilization, they determined.
"It is well established that physicians in different geographic regions practice differently. For example, physicians practicing in high-expenditure regions may be more likely than those in low-expenditure regions to recommend discretionary services for which strong evidence is lacking, and to test and treat patients intensively."
In contrast, the economic benefit of hospice care was found to be limited in regions of the country where the practice of medicine is more tight-fisted.
In these regions, increased hospice utilization generated a relatively low economic offset to inpatient and outpatient care at hospital settings, the researchers wrote.
"Whether or not hospice use results in cost savings is determined by the offset between the increase in hospice expenditures and the decrease in inpatient or outpatient expenditures."
Healthcare Policy Implications
While research has shown that hospice care has benefits for patients with terminal conditions, the study found that the economic benefits of hospital care vary regionally.
Incentivizing hospice care and launching hospice educational efforts in regions with high medical costs could have a dramatic impact on total U.S. healthcare expenditures, according to the study.
"Such targeted cost-saving measures may provide substantial economic benefits on a national scale, given that intense end-of-life care expenditures constitute a significant proportion of annual Medicare expenditures."
