The launch of an accountable care health plan product in Washington State includes new partnerships between Aetna and four healthcare provider organizations.
With four new pacts announced last week, Aetna is continuing its nationwide push to rack up commercial accountable care collaborations with healthcare providers.
Norman Seabrooks
Aetna's Northwest Market President
Norman Seabrooks, Aetna's northwest market president, says the pacts raise the tally of the insurer's accountable care collaborations to 51.
"Aetna believes that healthcare is moving in a direction where collaboration and innovation are vital to improving the quality, value, and efficiency of care while providing a better overall patient experience. To that end, we are working with healthcare providers and organizations across the country, including the four provider groups in the Puget Sound region, to create a more sustainable healthcare model that will move the needle on improving outcomes while controlling costs," he said.
Seabrooks says the collaborations will target the group health insurance market. "The Aetna Whole Health plan… will allow our customers who purchase the plan to offer their employees enhanced, coordinated care through four distinct and robust networks… This means that employees will be able to choose where they get care based on their personal and geographic preferences," he said.
"We anticipate that this new product will save participating [employers] between 7 and 12% on medical costs in the first year," Seabrooks said. "There is a shared-risk agreement with each of the four networks that rewards them for reducing medical costs and improving the quality of care provided."
'Aligns Our Interests'
The top executives of Aetna's new Washington State partners are bullish on the accountable care collaboration.
"One of the strongest features of the Aetna Whole Health product for the Rainier Health Network is the benefit design for enrollees," says Rainer CEO Rick MacCornack, PhD. "The plan provides a financial incentive to establish a lasting relationship with a primary care provider, which is the basis in trying to provide more value and better health for plan participants. This feature enhances our network's ability to provide continuity of care and better coordination of patient care for most, if not all, of the services provided by Rainier Health Network."
Lloyd David, MBA, The Polyclinic's CEO, says the Aetna pact is a win-win for his organization and its patients. "We have full confidence in our ability to deliver healthcare efficiently and cost effectively, and this partnership with Aetna Whole Health allows us to demonstrate our strengths and be rewarded for our performance."
"When patients make a choice to get their care from The Polyclinic network, they establish a stronger relationship with us, which opens the door for us to reach out to engage and coach them more vigorously. And our contract aligns our interests with the patient and the purchaser by creating rewards for increasing quality and managing the total cost of care."
Provider Network Perspective
Aetna's new partners says the accountable care collaboration will deliver value to health plan members in provider networks that are more than adequate in terms of geography and quality.
The CEO of Providence-Swedish Health Alliance, Joe Gifford, MD, highlighted his organization's provider network. "[It] is a network with boundaries, but it's anything but narrow," he says.
"With six hospitals in King and Snohomish counties, 80 clinic locations, and over 1,500 physicians, Providence and Swedish offer comprehensive care. We offer access to a wide range of specialists and sub-specialists, and are well prepared to meet virtually any medical need. To receive the maximum benefit, members must seek care through Providence-Swedish Health Alliance providers, clinics, walk-in clinics and hospitals. Seeking care within our network helps enable our goal to achieve the 'triple aim:' lower cost, better population health and better quality."
MacCornack said Aetna has created the equivalent of a broad network in the Puget Sound region. "Rainier Health Network consists of nearly one thousand providers representing fifty-five medical specialties. Geographically, we have providers in South King, Pierce, Kitsap and Thurston counties. We would not consider this to be a narrow network, especially since Aetna Whole Health also includes health care systems that cover King and Snohomish counties," he said.
Accountable Care Deal Goals
All four healthcare provider CEOs say they have lofty goals for their new relationship with Aetna.
Gifford says Providence-Swedish Health Alliance is hoping to hit three targets:
Improving medical care for members with chronic conditions;
Providing patients with "top-notch member experiences," including greater access to healthcare providers; and
Making sure patients get "appropriate and necessary care they need when they need it."
David says The Polyclinic is primed to succeed. "Our goal as an Aetna Whole Health provider is to use our years of experience in full-risk and shared savings contracts to provide patients with high-quality, personalized care, and to offer employers a cost-effective product that helps them reduce their insurance costs and better manage their bottom line," he says. "Delivering great value should enable us to continue to grow and increase market share."
Vik Dabhi, MD, PhD, chief medical officer of Pacific Medical Centers, says the accountable care pact with Aetna is a golden opportunity.
"We have shifted our perspective to focus on prevention and health, and PacMed's approach to care works to reduce cost and improve the health of our patients. With products like Aetna Whole Health, we can change the way healthcare is organized, delivered and paid for, and provide our patients with exceptional quality, producing excellent outcomes and high patient satisfaction with lower costs."
Some Blue Cross Blue Shield health plans are trying to achieve medication cost savings in the form of discounts and rebates through outcomes-based contracting. While the effort is showing significant value-based potential, tracking cost savings has so far been elusive.
Health plans seeking to rein in runaway drug costs should consider the sage words of the Chinese philosopher Lao Tzu: "The journey of a thousand miles begins with a single step."
Efforts to established value-based pricing for drugs are in their infancy, but a consortium of 13 Blue Cross Blue Shield health plans owns a company that is making impressive baby steps.
Steve Johnson
PBM's Senior Director of Health Outcomes
Eagan, MN-based Prime Therapeutics LLC manages pharmacy benefits for health plans, employers, and government agencies including Medicare. The company began as little more than a twinkle in the eyes of executives at Blue Cross Blue Shield of Minnesota more than 25 years ago. Now Prime provides pharmacy benefit manager (PBM) services for more than 25 million people.
Four years ago, Prime started negotiating outcomes-based contracting for drugs with pharmaceutical manufacturers, according to Steve Johnson, the PBM's senior director of health outcomes. "It is an approach to contracting that is not linked to formulary," he told me last week.
The business side of outcomes-based contracting, which Prime calls 'care-centered contracting,' is relatively easy. Prime cuts an outcomes-based deal with a pharmaceutical manufacturer, "then brings that care-centered contracting opportunity to the Blues plans for their and dissemination," Johnson told me.
But negotiating an outcomes-based contract deal is "very challenging," he says.
Prime has developed several forms of outcomes-based contracting. The most popular model is medication-adherence improvement incentives, Johnson says. "It's easier to set up, to measure, and to report on," he says.
Medication Adherence
In terms of alignment, which has become the Holy Grail of many healthcare industry reform initiatives, medication adherence is a win-win-win. Patients feel better if they can be faithful to their prescribed medication regimen. Pharmaceutical manufacturers feel better because they can maximize drug sales. And payers feel better because medication adherence helps avoid costly trips to the hospital. "Adherence to therapy has been shown to have a benefit," Johnson says.
Compared to other forms of value-based drug pricing, the mechanism for medication adherence-improvement incentive contracting is relatively straightforward.
For many drugs, Johnson says the gold standard for adherence is 80%. In other words, if patients are taking their medications as prescribed by their doctors at least 80% of the time, then they have cleared the medication-adherence threshold.
This is where Prime puts the incentive in medication-adherence improvement incentive contracting: If a health plan can boost medication adherence over the 80% threshold, then the insurer can reap a discount or rebate from the pharmaceutical manufacturer.
Johnson describes two forms of medication-adherence improvement incentive contracting. One rewards health plans for members reaching an established medication-adherence rate such as the 80% threshold. "If we can get some percentage of our members over 80%, then we can negotiate a discount."
The other rewards health plans for demonstrating year-to-year increases in adherence rates.
Adherence'Simple' to Measure; Costs Elusive
Tracking medication adherence is relatively simple, Johnson says. "Adherence is pretty easy to measure. You use the prescription claim history as a 'surrogate.' You have to assume based on the prescription claims that they are using their medications."
Drug price discounts in medication-adherence improvement incentive contracts range as high as 3%, but have the potential to be significantly higher, according to Johnson.
Prime's other models of outcomes-based contracting are more complicated. Johnson says the most ambitious model is medical-event avoidance protection.
"Medical event-avoidance protection care-centered contracting provides an incremental payment from the manufacturer when the medication is in the formulary preferred tier status, the member is adherent to the medication, and a medical event occurs that the medication was intended to prevent," he says.
Real-life challenges such as varying rates of patient adherence to medication regimens have made medical event-avoidance protection contracting difficult to negotiate and operationalize, he says. "We've been working on it for a few years," Johnson says. Prime has established one contract under this model so far, but has yet to gather a full year of data to assess the deal's performance. "We're getting a lot of interest, but it's challenging."
But Johnson says tracking the cost savings from outcomes-based contracting for health plans and their members also has been elusive. "We've been asked that number forever. It takes years to get that data," he says. "There is agreement that the drugs are effective. The question of cost savings goes back to the data showing the drugs are effective."
The absence of cost-saving data may be disappointing, but if health plans want to control the soaring costs of medications, they have to start somewhere.
A Medicare advocacy group is seeking early notice and an appeals process for hospital patients designated for observation rather than inpatient status.
One of the highest courts in the land is focusing on one of the hottest issues in healthcare.
Attorneys from the Center for Medicare Advocacy and the federal government recently sparred in the US Court of Appeals for the Second Circuit over a lawsuit linked to the distinction between inpatient and observation status at hospitals.
The stakes are high for Medicare beneficiaries, who face paying the whole bill at skilled nursing facilities if they are transferred from the hospital without spending at least three days designated as inpatient status.
In November 2011, seven Medicare beneficiaries or their estates filed a federal lawsuit against Kathleen Sebelius, who was then serving as secretary of the US Department of Health and Human Services. Bagnall v. Sebelius asked the federal District Court in Connecticut to find HHS's observation status rule in violation of the Medicare statute. The plaintiffs also sought creation of public notice and appeal rights for Medicare beneficiaries placed under observation status.
In September 2013, a District Court judge granted a government motion to dismiss Bagnall v. Sebelius, prompting CMA to file an appeal.
In New Haven, CT, this month a three-member panel of the US Court of Appeals for the Second Circuit heard oral arguments on CMA's appeal.
Alice Bers, an attorney for CMA, approached the immaculately finished, dark-wooden podium to face the judges first. "The issue before us today is about notice and appeal rights," she said, then was quickly interrupted by Judge Ralph Winters, who asked whether doctors or HHS regulators are driving the decision-making on determining Medicare patients' hospital admission status.
"We differ with Medicare on this," Bers replied. "The decision is being driven by the agency."
Judge Jose Cabranes noted that CMA had drawn support from "an impressive array" organizations and asked what kind of information CMA is seeking from the government in the appeal process.
Bers replied that the plaintiffs and healthcare providers need a clear understanding of "the criteria" that are the determining factors in deciding whether someone is an inpatient or designated for observation status. "You can see the providers struggling to comply," she said.
The American Medical Association and the American Health Care Association are among those who have filed briefs in support of the plaintiffs. The American Hospital Association has filed a brief that does not explicitly support the plaintiffs, but describes how AHA's members are struggling to comply with Medicare's observation status rules.
Pressed by Winters for her clients' "ultimate objective," Bers said the plaintiffs want the case to be sent back to District Court, where they will press for a requirement that patients receive notice as soon as possible about their admission status and the possible financial consequences as well as "a clear appeal process."
Walker chimed in again: "You have a due process problem. You would like to get that nailed down through discovery (of information from HHS)."
Government's View
Jeffrey Clair, an appellate staff attorney at the U.S. Department of Justice Civil Division, took his turn at the podium and argued that the plaintiffs have no "property interest" at stake because they have no right "to be admitted to a hospital on an inpatient basis." He added that the determination of patient admission status is strictly a medical decision at the discretion of physicians.
Walker and Winters pressed Clair on whether there are clear standards for setting admission status and whether bureaucrats could second-guess a doctor's admission-status determination. "The Medicare people accept without question the doctor's decision on whether someone is admitted [as an inpatient]?" Winters inquired.
"Your honor, it's a little more complicated than that," the DOJ official said.
Then Winters hammered Clair on the issue of patients' reasonable expectations. "The fact is, we have plaintiffs here that spent eight days in the hospital… and I find it hard to believe they were not in admitted status," he said.
Clair replied that when hospitals make the determination that a patient has been designated in observation status, which Medicare pays at relatively low Part B reimbursement rates compared to Part A inpatient rates, there is no second-guessing in Washington. "When the claim is submitted for Part B status, the [HHS] secretary does not look at whether the patient was properly admitted," he said.
The next line of questioning from the judges turned to the issue of Medicare patients' admission-status notice and appeal rights.
"They want to get notice upfront at the hospital," Walker said of the plaintiffs. "They want the opportunity to be heard, even if they are in the hospital. Why is the agency fighting that so hard? Is that burdensome?"
Clair replied that Medicare officials have no legal basis to require hospitals to notify patients about admission status and the possible financial consequences of being designated in observation. "The statute doesn't call for it," he said. "The government has no statutory authority to order it."
The DOJ official added that state legislatures are creating laws to require hospitals to provide admission-status notice to their patients. "This is becoming increasingly irrelevant in New York and Connecticut," Clair said. "The state of Connecticut, as of October 1 … has now required common notice."
Reading the Tea Leaves
After the hearing, Bers and Clair offered guarded assessments of the appellate judge's questioning.
"It's always dangerous to read the tea leaves, but they were clearly interested in the due process issue," Bers said in an interview outside the courtroom. "They seemed to understand people in hospitals are really in the dark."
Clair had to leave the courthouse immediately after the hearing, but provided the following comment via email: "I thought the judges asked some hard questions for both sides and really do not have a clear sense of how they might rule."
Gil Deford, JD, CMA's director of litigation, appeared in court with Bers but did not participate actively in the advocacy group's oral argument presentation. He said the CMA had made a strong case to compel the appellate court to send the notice and appeal rights issues back to District Court.
"The judges understood the counter-intuitive nature of observation status," he said. "Most people don't find out until they leave the hospital. That's why you need early notice. You need notice upfront."
Bers said the appellate court is likely to rule on the CMA appeal in less than a year. "It can be as quick as two months or take eight months," she said. "The average is three to four months."
Public comments filed on a proposed merger and acquisition pact in Massachusetts reflect the breadth of consolidation debates raging across the country.
Is bigger always better?
That question has triggered an avalanche of controversy in Massachusetts, where the largest health system in the state is seeking to get larger.
Partners HealthCare, which is the top private employer in The Bay State with about 60,000 workers and a dozen hospitals in its provider network, is a not-for-profit health system based in Boston. It was founded 20 years ago by two of the most prestigious academic medical centers in the country: Massachusetts General Hospital and Brigham and Women's Hospital.
Partners' quest to acquire three more suburban hospitals has drawn fire from insurers and other critics, who are pressuring Massachusetts Attorney General Martha Coakley to toughen an anti-trust settlement deal she cut with the health system in May.
The pact includes price caps and growth limits on Partners for several years. On Sept. 25, the AG filed a revised version of the pact in Suffolk Superior Court, and Judge Janet Sanders set an Oct. 21 deadline for the public to file comments with Coakley's office.
Former CMS Administrator Donald Berwick, MD, made his view of the deal public in an opinion piece published by the Boston Globe Oct. 19: "You don't have to be an antitrust lawyer to predict the consequences of even more market power: higher prices, less competition, and the squeezing out of smaller players." Coakley, a Democrat, is in a tight race for Governor of Massachusetts. Berwick challenged her in the primary for the party's nomination.
The public comments provide a snapshot of the arguments for and against Partners' consolidation effort, which features the acquisition of South Shore Hospital in South Weymouth as well as Hallmark Health System's hospitals in Medford and Melrose. The public comments also reflect themes common to debates over health system consolidation efforts across the country, with supporters highlighting benefits such as financial stability and detractors raising alarm over higher healthcare costs and monopoly risks.
Settlement Supporters
Mark Haas, director of health information management at South Shore Hospital, makes a spirited defense of the settlement deal. The IT expert, who also teaches budgeting and management as a member of the Tufts University School of Medicine, wrote that he had recently joined the South Shore Hospital staff after working for eight years at Mass General.
"There is a significant need for deep investment in the infrastructure—information systems in particular," he wrote. "SSH would benefit significantly from the advanced electronic health record technologies in place at Partners and be better able to keep up with the newest technology opportunities. If SSH could begin to utilize the electronic health record system in place at Partners, the coordination of care can occur with far fewer resources being utilized."
Hass contends that the merger would reduce healthcare costs at South Shore Hospital. "I have grown to appreciate how vital primary care is to keeping costs down in the US healthcare system. The SSH community desperately needs access to a network of community primary care physicians that can seamlessly communicate with the specialists in the area as well as the hospital and emergency room."
State Sen. Jason Lewis, (D-Winchester), chairman of the Joint Committee on Public Service, wrote that the settlement deal would help ensure the financial future of Hallmark Health and its hospitals.
"The proposed merger of Hallmark Health and Partners HealthCare is an excellent opportunity for Hallmark Health to remain a viable provider of quality health care in its core communities," he wrote. "Specifically, Partners HealthCare will be able to provide primary and secondary healthcare in Melrose, Stoneham and Medford at more affordable sites… than in Boston; and the volume of patients from Partners HealthCare will help Hallmark Health achieve operational sustainability in a lower-cost health care environment."
In an email exchange with HealthLeaders, Lewis said state officials are determined to make sure Partners does not gain monopolistic advantages over its competitors and healthcare payers. "That could be a risk, but there are mechanisms in the settlement agreement as well as other tools the state has to prevent that from happening," he said.
Melinda Matthews, VP of clinical services at Lexington-based Eliot Community Human Services Inc., defended Partners' plan to consolidate mental health services in the North Shore region of the state. The mental health consolidation plan, which is included in the settlement pact, includes boosting mental health services at North Shore Medical Center Union Hospital and moving acute care services at the Lynn facility to North Shore Medical Center Salem Hospital. The hospitals in Lynn and Salem are already part of the Partners family.
"Eliot often collaborates with (Partners HealthCare) and affiliates to coordinate care and improve service delivery," she wrote. "Eliot believes that the proposed agreement to create a Center of Excellence in Psychiatry and Behavioral Health at Union Hospital along with maintaining current service levels is a crucial and important commitment that is necessary to preserve and enhance treatment and services for individuals living in the North Shore area."
Consolidation Critics
Morton Heafitz, MD, a retired physician who served as president of a Medford-based surgical practice, wrote that advocates of the Partners settlement are overstating the deal's financial benefits.
"All of us were accredited cardio-thoracic surgeons by appropriate medical societies that served as consultants 24/7 at more than 20 hospitals… We cared for patients in their communities for a fraction of the cost of (Boston-based) hospitals. True, we did not do transplants, but did participate in resident training and research—the supposed reason for high-cost surgery—but the results were just as good if not better than utilizing these institutions as way stations for inaccessible [Boston-based] monopolies."
Heafitz calls on Judge Sanders to take a stand for community-based care: "I urge you now as someone who appreciates community needs to deny Partners this unnecessary monopoly and monetary waste."
Katerina Panagiotakis Koudanis is the founder and leader of Union Hospital Advocates, a community group that opposes Partners' plan to convert NSMC Union Hospital to a psychiatric facility. She says the group has about 100 active members who live in Lynn, Lynnfield and Saugus.
"We're devastated at the decision," she said of Partners' plan for NSMC Union Hospital. "We've had a community hospital in Lynn since the 1800s."
Koudanis filed two public comment letters at Coakley's office this month. One letter challenges determination of need proceedings related to NSMC Union Hospital.
The second letter contends that the relocation of acute care services to NSMC Salem Hospital places a potentially dangerous and costly burden on Lynn residents, namely an increased reliance on ambulance service.
"It will be tragic," she said in an interview this week. "To access Salem Hospital, it's almost impossible to reach the hospital during rush hour."
Koudanis says many Lynn residents cannot afford to take an ambulance to Salem Hospital and will choose to drive themselves, even in an emergency. "The median family income is $44,000. A lot of people don't have insurance," she said.
Koudanis said she has embraced the underdog role in a David versus Goliath struggle: "I'm not afraid of saying what's right."
Representatives for both Partners and Coakley declined to comment for this story, stating that their stands on the settlement deal are in documents filed at Suffolk Superior Court.
"Representatives for both Partners and Coakley declined to comment for this story, stating that their stands on the settlement deal are in documents filed at Suffolk Superior Court."
With Medicare upping the ante on hospitals to reduce readmission rates, pressure is mounting on hospitals to get the job done. Crafting collaborative relationships with community-based caregivers to boost patient care is key, researchers suggest.
A pair of research studies released earlier this month on efforts to reduce hospital readmissions reached the same conclusion: There will be no quick fix, but boosting collaboration between hospitals and community-based caregivers is the key to solving the problem.
The task ahead, authors of the studies say, is crafting specialized keys to unlock the unique combination of readmission difficulties that plague communities across the country.
"The hospitals that don't have trusting relationships with local providers are going to face a more complicated challenge," says L. Elizabeth Goldman, MD, lead author of a study published in the Annals of Internal Medicine. "They need to take a different model of outpatient care. There needs to be a structure—a primary care structure and financial structure—that works."
Medicare payments for hospital readmissions cost the federal government about $26 billion annually, with more than half that expenditure linked to avoidable hospitalizations, according to a Robert Wood Johnson Foundation report published last year.
Ariel Linden, DPH, who published a study on readmissions earlier this month in the American Journal of Managed Care, says healthcare providers and the communities they serve will have to walk a fine line. "You need to create collaborative relationships to boost patient care," he says. "But how do you do that without monopolizing the community and increasing the cost of care?"
Ariel Linden, DPH
Resolve in Washington
Officials at the Centers for Medicare & Medicaid Services are determined to push for reduced hospital readmission rates, "while addressing any unintended consequences, particularly for those hospitals serving dual-eligible and low-income beneficiaries," a spokesman said last week.
CMS, he says, is committed to working with hospitals through a multi-step process aimed at reducing readmissions.
"The first step to reducing the readmission rates is to understand what the readmission rates mean and how they are calculated. Prior to publicly reporting the readmission rates, CMS provides hospitals with Hospital-Specific Reports containing a comparison of their summary results to the state and national results as well as detailed discharge-level data. CMS also posts additional resources on QualityNet.org to assist the hospitals in understanding the measures' specifications. Together, these resources will assist hospitals in understanding the type of admissions that are included in the calculation of the readmission measures."
Performance Monitoring
After a hospital and CMS are on the same page regarding readmission rate measures, the next step is for the facility to monitor performance and identify areas for improvement. "Once they understand how the measures are calculated and how their rates compare to the national rates and state average, some hospitals choose to calculate their raw (unadjusted) readmission rates to more closely monitor their performance on these measures as they work on improving their systems for transitioning patients to the outpatient setting, collaborating with communities and providers, and communicating with patients and caregivers," he said.
CMS is also providing resources to help hospitals build readmission intervention programs. "CMS [has] designated Quality Improvement Organizations to reduce unnecessary readmissions to hospitals and promote seamless transitions between healthcare settings. Hospitals may reach out to their QIOs for assistance in identifying ways to reduce their readmission rates," he added.
The federal agency has also identified several "initiatives and peer-reviewed studies" that have demonstrated success in reducing readmissions. Those readmission intervention models include Partnership for Patients, a CMS initiative that is pushing participating hospitals to achieve a 40% reduction in hospital-acquired conditions and a 20% reduction in hospital readmissions compared to 2010 levels.
Rising to the Challenge
Turner West, MPH, palliative care leadership center director at Lexington, KY-based Hospice of the Bluegrass, says there is no one-size-fits-all approach to creating readmission intervention programs.
Turner West, MPH
"A wide range of models exist to reduce hospital readmissions. There is variability among these models largely based on the patient population served, available community resources, and the type of hospital, so it is difficult to say a specific intervention is feasible or replicable in all settings," he says.
"Generally, however, successful interventions to reduce hospital readmissions require identifying patients at high risk for readmission, collaborating with the patient and family on a specific discharge plan, medication reconciliation, and effective discharge planning and care coordination with community providers—primary care, specialty care, home health, skilled nursing and hospice."
West says communities with relatively high levels of resources can supplement hospital-based readmission intervention models with technology and a constellation of patient-focused specialists.
"Some of the more successful models are innovating by leveraging technology and developing community partnerships to support patients and families," he says. "There are transition programs, health coaches and navigators, high-risk case managers, telephonic support and tele-health programs that we can all learn from."
Boosting collaboration between hospitals and community-based caregivers is a daunting but surmountable hurdle, West says.
"The starting point for any collaboration is identifying the unmet need of the patient or gap in service delivery. Both partners must be able to articulate how the collaboration enhances patient care and fills the service gap," he said. "Finally, any collaboration also requires that all partners understand each other's financial incentives and costs associated with new programming."
The research Goldman and Linden conducted identified elderly, seriously ill patients as not only prone to readmission, but also difficult to help with intervention efforts. "I wish there was a simple answer, but there is no simple answer," Linden says. "When you have congestive heart failure, you're at the end of the road."
Turner said part of solving the readmission puzzle has to be a change in mindset away from always striving for curative care and toward acceptance of a more comprehensive approach to end-of-life care.
"For many individuals with serious illness, a primary goal of care is avoiding hospitalization, and a primary driver for hospitalization is an exacerbation of pain and symptoms," he said. "Palliative care teams can often obviate readmission through expert pain and symptom management, and effective communication on prognosis and goals of care. Moreover, the interdisciplinary composition of a palliative care team helps identify social determinants that may contribute to hospitalization."
Consumers need to become more knowledgeable about managing their health and making healthcare decisions as they become bigger economic agents in the healthcare system. Health plans are providing the tools to enable them.
At any given moment, "the rise of the consumer" is on the tip of wagging tongues in every nook and cranny of the healthcare industry. For accuracy's sake, they really should be talking about "the thrusting of the consumer."
Helen Osborne
October is Health Literacy Month. Last week, I spoke with this noble effort's founder, Helen Osborne, an occupational therapist who saw the health literacy light in 1995. Inspired by one of the first scholarly articles written on the topic of health literacy, she has been hooked ever since.
Osborne told me she launched Health Literacy Month in 1999 with a "small grant" from the pharmaceutical giant Pfizer Inc. and money she raised on her own.
"It was really to join together the early adopters like me. That grew and grew into what it is today," she says, noting that she also created a health literacy consultancy enterprise. "I've been in business for 18 years, and my passion for it has not stopped."
As individuals are thrust into a more expansive decision-making role in managing their health, executives across the healthcare industry should be listening to what Osborne has to say about health literacy.
For starters, she says health literacy involves much more than fostering an understanding of medicine's esoteric terminology by consumers with known numeracy challenges: "It's much more than just reading."
I am obsessed with pressing my sources for examples, and the conversation quickly turned to one of my favorite issues: the health impact of obesity.
"It's not just knowledge," Osborne says of health literacy's limitations in addressing the problem. "We have to have that sense of personal relevance; and who knows what's going on in the home… and a whole bunch of other things. You need to explain [obesity risks] clearly, but there are a lot of other factors."
Now, she had me going.
I love it when experts open up about the bounds of possibility in which they operate. We turned our attention to the supposed cost-saving benefits of thrusting the individual into a more prominent role in healthcare decision-making.
"The problem for this field is people are going to look to health literacy to solve this whole mess. It's a start, but it's not a panacea that is going to solve all of our healthcare woes in this country," Osborne says. "Knowledge has to feel relevant, and you have to know what to do with it."
Now, she was going.
"I think shared decision-making is a good model," Osborne says. She argues for a fine-tuned balance between having doctors in charge of medical decisions and patients getting whatever they want. "The meter has gone too far. People spend a lot of time in medical school. I prefer some guidance. I don't want to make every decision on my own."
Watertown, MA-based Tufts Health Plan recently initiated two efforts to fill the guidance gap, adding quality information to the doctor-finder feature on the company's website and launching a pricing tool.
Massachusetts is in the forefront of healthcare pricing transparency. A law that went into effect this month requires all private insurers to begin making price estimates public. To that end, Tufts has launched EmpowerMe, an online health service pricing tool for its members.
Tufts has 90 hospitals in its provider network and nearly one million covered lives.
"So many of our members are now on high-deductible plans and tiered plans, where their costs are going to vary depending on who they see," Athelstan Bellerand, Tufts' director of commercial product strategy, told me last week. He cites colonoscopy as an example. "Depending on where they go, the cost could be hundreds of dollars to them."
The EmpowerMe pricing tool requires health plan members to log in with an ID and password. "This is personalized to the member," he says. "In order to get that personal information, we need to know what their plan is… The personalization of this tool is very important because it's the only way we can give actionable information."
The tool gives beneficiaries information for out-of-pocket costs. "It will help them make decisions on where to get their care. In addition, it helps them budget for those decisions," Bellerand says. "They can plan for those expenses. Often, the beneficiaries are surprised by just how much [a healthcare service] costs."
To help beneficiaries make even better decisions on value, Tufts has added physician quality information to its online doctor-finder tool. "Quality is very difficult to define. It means different things to different people," he says. "We've tried to distill this in the simplest way to communicate it to our members."
The quality information Tufts is offering online is based on standard metrics established by state officials. "We're able to rank our highest-quality to lowest-quality providers in our networks," Bellerand says, noting that a "quality ribbon" is placed next to the online listing of all physicians who score in the top quartile of the state metrics ratings.
"Over time, the cost of healthcare has slowly but surely shifted from employers in the form of premiums to individuals in the form of cost sharing," Bellerand says. He believes online tools and other informational efforts need to be at the top of health plan agendas. "Members have not become more informed as part of that process."
A pair of research studies reveals high hurdles providers face as they try to reduce readmission rates and avoid reimbursement penalties.
Two recently released studies on costly hospital readmissions of seriously ill, elderly patients draw the same conclusion: Fixing this vexing problem is far from easy.
Ariel Linden, DPH
With hospitals under mounting financial pressure to reduce readmissions in the form of Medicare reimbursement penalties, the search is on to find intervention strategies that work. The studies released this month deliver a sobering message.
Ariel Linden, DPH, is lead author of "a study on interventions to reduce readmissions in chronically ill patients published in the American Journal of Managed Care.
The research, which was conducted at a pair of standalone community hospitals in southern Oregon, found "no statistical difference" between seriously ill patients who participated in a hospital-based transitional care program and those who received "usual care."
"In the macro, I was surprised," Linden says of the study's results. "We threw everything we could at this thing… The truth of the matter is, if the physician doesn't want to be engaged with these really sick patients, nothing is going to happen."
In addition to standard transitional care interventions at the pair of hospitals, Linden says his study added two elements: motivational interviewing of patients to "get them to listen to what their doctors told them to do" and "interactive voice response" consisting of a nurse calling patients every morning to answer a brief questionnaire on their health status. The nurses and patients also reached out to local physicians.
"We sent out letters to the doctors, and we made follow-up phone calls," Linden says. "We did everything we could except beg and plead with doctors."
Local physicians lacked the necessary incentives to work with their community hospitals to help reduce post-hospitalization readmissions for patients suffering with congestive heart failure and chronic obstructive pulmonary disease. "In some cases, the doctors said they had no time for these patients," Linden says. "These doctors had no skin in the game."
The researcher, an adjunct associate professor at the University of Michigan's School of Public Health in Ann Arbor, and president of Linden Consulting Group, says the research revealed a key weakness at the Oregon hospitals. "They do not have a very good collaborative relationship with physicians in the community."
'Not One-Size-Fits-All'
L. Elizabeth Goldman, MD, is the lead author of the another readmissions study published this month in the Annals of Internal Medicine, focused her research on an urban hospital in Northern California and drew similar results and conclusions to Linden's study.
"There have to be reasons for people to feasibly collaborate," she says. "It's developing solutions that actually work for the stakeholders."
In Goldman's study, the post-hospitalization intervention involved the following: "Usual care versus in-hospital, one-on-one, self-management education given by a dedicated language-concordant registered nurse combined with a telephone follow-up after discharge from a nurse practitioner."
Hospitals seeking to reduce readmissions must examine the challenges in minute detail, she says.
"One of the big takeaway points for us is [that] it's really important for any of these interventions to see if it fits locally," Goldman said. "These are not one-size-fits-all products."
In addition to finding ways to boost collaboration between hospitals and community-based physicians, transitional interventions have to be crafted to individual patients, she says. "Some folks may need targeted home visits. Some folks might need the follow-up visit very soon after discharge. Different folks might need different things."
Solving the readmissions problem requires a constellation of caregivers, such as behavioral health clinics, hospice organizations, and nursing homes, Goldman suggests. "It's not just the primary care clinics and hospitals. It really depends on the setting and facilitating communication between these groups."
Stepping Up to the Plate
Linden says the results of the Oregon-based research have shaken his confidence in the advisability of penalizing standalone community hospitals for failure to hit readmissions targets set by the Centers for Medicare & Medicaid Services.
"Everybody is running around saying, 'The transitional care model!'" he said. "At this point, we don't know what works… I have a newfound respect for serious illness and the resources we should throw at this."
Standalone community hospitals could be at a disadvantage compared to integrated health systems, and CMS should consider taking that possibility into account when meting out Medicare reimbursement penalties linked to readmission rates, Linden argues.
"They will ding hospitals if their readmissions are too high," he said of CMS. "Is it fair to ding hospitals when they can't engage their physicians? It takes two to tango."
Linden believes more research is needed to address the fairness issue. "Do big, integrated health systems have better readmissions outcomes? I don't know. The studies haven't been done yet."
CMS: "Readmission Measures Can Signal Potential Issues"
All hospitals need to be held accountable for their readmission performance, says a CMS spokesman in response.
"CMS believes the readmission measures can signal potential issues with a hospital's system for transitioning patients to the outpatient setting, collaborating with communities and providers, and communicating with patients and caregivers regardless of the type of hospital," the spokesman said.
"CMS continually strives to improve the Hospital Readmission Reduction Program as the agency gains further experience with it. We will continue to work with all stakeholders to seek feasible ways to encourage hospitals to reduce hospital readmissions while addressing any unintended consequences, particularly for those hospitals serving dual-eligible and low-income beneficiaries."
Goldman believes the healthcare industry is in the beginning stages of trying to come to grips with the readmission challenge. "If we think we can make a dent in healthcare in general, we can make a dent here, too," she says. "Now it's getting the attention it deserves because there are financial incentives involved."
The University of California-San Francisco researcher said CMS officials deserve credit for taking action: "They have brought the attention to where it needs to be."
High-ranking health plans in the Medicare Advantage program share the strategies that have led to their success.
Garnering high marks in the Medicare Advantage five-star ratings program involves a complex set of factors that can change from one year to the next.
David Jarboe
Regional President of CarePlus
Health plan executives say the key drivers for achieving star ratings success are commitment to quality across their organizations and provider networks, sharing healthcare data in real time, and the ability to annually adapt to changes in how the plans are evaluated by the Centers for Medicare & Medicaid Services.
CarePlus Health Plans Inc., a subsidiary of Louisville, KY-based Humana, which offers MA coverage to thousands of seniors in Florida, is among 16 MA carriers that earned five-star ratings for 2015. David Jarboe, regional president of CarePlus, says a commitment to quality care is essential to achieving a high star rating.
"We believe our five-star achievement is due to our entire company's focus on achieving the best clinical and customer service possible, and improving each year," he says. It's an accomplishment that "couldn't have been achieved without our outstanding team of employees and the physicians who care for our members and partner with us to focus on preventive care and disease management."
Jarboe says successful MA health plans need to have a shared commitment to quality and attention to stars-rating metrics with their physician networks. "We work hand-in-hand with our physicians to actively educate and engage our members to improve their health outcomes," he says.
"We believe programs like our diabetic initiative, which encourages diabetic retinal exams, and our medication compliance and adherence outreach, have not only improved our star ratings but also and, more importantly, truly made a difference in the health and quality of life for our members."
Collaboration has been an essential element in boosting MA stars ratings at Franklin, TN-based Cigna-HealthSpring as well
"[We] made significant improvement with our 2015 star ratings, increasing our percent of membership in a four-star or higher plan from about 38% to 57%," the company said in a prepared statement.
"Our physician engagement model works collaboratively with both our network doctors and customers to align incentives and resources around quality health care results, which correlate directly with star rating measures. We've had the strongest results in markets where our networks are more engaged and aligned with our quality efforts."
Crossing the four-star threshold is a prime goal for all MA health plans because the high rating on the five-star scale makes insurance carriers eligible for quality bonus payments from CMS.
Portland, ME-based Martin's Point Generations LLC has earned a five-star MA rating in 2015, 2012 and 2010. Rebekah Dube, VP of senior products for Martin's Point, says a commitment to quality inside the organization and with all of its partners has been crucial.
Rebekah Dube
VP of Senior Products for Martin's Point
"Across the organization, you have to have people working together," she says, noting that teamwork optimizes chronic disease management. "You have to have your physician network onboard, and you have to have your customer service people engaged."
Dube says high-quality customer service is both challenging and rewarding for MA health plans. "It's such a critical piece. We really value our relationship with our members and how they trust us," she said. "Every single interaction you have with a member is a moment to make an impact."
Martin's Point customer service representatives "have consistent, scripted conversations" with members, but the commitment to quality service does not stop there, Dube said. "We want to make sure you are getting the best care possible," she said, noting customer service representatives give members prevention tips and diplomatically inquire about whether members are in compliance with chronic condition care. "This isn't just about checking off a box for them."
CarePlus' Jarboe agrees that customer service is important. "The survey measures that assess member perception about a plan's performance are more subjective and are limited to a small sample of members, so that can be challenging. We have worked hard to improve customer service and believe that is a big factor in our becoming a five-star health plan," he said.
Tracking the Data
Dube, who has been an MA stars-rating program leader at Martin's Point for four years, says getting a real-time handle on healthcare utilization data is a make-or-break challenge.
"As the star-ratings program unfolded, what became very apparent was if you didn't have the data, you weren't going to achieve your full potential," she says.
But MA data provided to health plans by CMS is notoriously tardy. So Martin's Point developed its own ways to use real-time data to drive results. "We needed to be able to monitor ourselves. We worked with our data management team internally to build up our processes," Dube says.
Dube says Martin's Point has mastered tracking several data points in the NCQA's Healthcare Effectiveness Data and Information Set, particularly for key star-ratings metrics such as blood sugar management, blood pressure control and process measures such as compliance with testing schedules.
Pharmacy data has been a thorny area for MA health plans, she said. "CMS provides tracking and trending pharmacy data, but there's a lag there," Dube says. "We've built our own processes to follow member compliance on medication."
Moving Metrics
One obstacle common to all government-sponsored business lines is adapting to regulatory changes.
"Each year, CMS challenges health plans by changing some of the targets of measure that are used to determine star ratings. We will have to continue to improve our performance year-after-year in order to maintain our current five-star rating," Jarboe says.
"In general, we work to improve all areas and dedicate resources to improve ourselves each year. Quality improvement is a mindset that requires constant oversight to improve and maintain what we have achieved."
Dube says MA health plans must have flexibility ingrained in their business culture.
"It's not standing back and saying, 'No, we can't do that.' It's taking a problem-solving approach," she said. "We know that this business is rapidly changing, and that's not going to stop. Grounding our team in that mentality is really important."
The high cost of specialty drugs that cure hepatitis C and treat specific forms of cancer has sparked heated criticism. Value-based pricing is an alternative—but it may be impractical.
The marketing of an ever-growing number of new drugs that come with eye-popping price tags is spurring a drive to develop value-based pricing models.
"Pricing is the issue," says Samuel Nussbaum, MD, executive VP for clinical health policy and chief medical officer for Indianapolis-based WellPoint, Inc.
He says the healthcare industry faces an unsustainable cost trend for so-called specialty drugs such as medications that are targeted at specific forms of cancer capable of treating relatively small pools of patients annually.
"It is expected that these specialty drugs alone will cost more than all drugs used today in five years," he says, noting that the total annual cost for clinical drugs is currently about $330 billion and the annual cost of specialty drugs alone is forecast to rise to $400 billion in five years. "There will be no other room for everything else."
Nussbaum believes public officials and all stakeholders in the healthcare industry have to find a way to finance the most effective specialty drugs, while holding the line on drugs that deliver a marginal benefit. "It's absolutely appropriate to expect those drugs will cost a lot of money to develop," he says. "If there is a breakthrough therapy, we're all for it. But if you have a drug that is precise but doesn't necessarily provide a major clinical benefit, it doesn't hold the same power."
'Too difficult to measure'
Alexander Bastian, a healthcare practice leader at market research firm GfK Bridgehead, says establishing value-based pricing models for drugs is a daunting challenge.
In particular, an impending avalanche of "personalized" medications has caught the healthcare industry off guard, most notably in oncology, he says.
"The average size of a patient population has reduced to 200 or 300 patients in cancer care," Bastian says, whereas earlier generations of oncology drugs were marketed to several thousand patients annually. "Fewer patients are being treated with more resources per head, and society has not come to grips with that yet."
Establishing performance-based models for drug pricing is highly desirable but extremely difficult to implement. In the United Kingdom, Bastian says efforts to establish performance-based pricing for oncology drugs hit several roadblocks. "The administrative burden and the time to make that work was sapping resources from the system," he says. "It's too difficult to measure. They have backed away."
To construct performance-based models for drug pricing, it is critically important to be able to follow the effectiveness of medications over time. "You have to have a closed network, where you can have that life as long as possible," he says.
Another key to establishing performance-based pricing models is transparency. "Right now, if you go to a payer with a drug in development, you can get consultations but the consultations are nonbinding," Bastian says. "Rules can change after two years of development. It de-incentivizes pharma from adopting new models."
WellPoint's approach
In July, WellPoint adopted a relatively modest approach to value-based drug pricing in oncology.
The health plan's Cancer Care Quality Program gives oncologists a financial incentive to use cancer drugs that have a proven track record of effectiveness. "We know there is a wide variation of care," Nussbaum says. "We know there are variations in effectiveness of care. … We scanned the literature to find the best 'pathways' of care."
In the Cancer Care Quality Program, oncologists receive a one-time $350 payment for adopting a treatment plan that is consistent with the health plan's approved pathway of care. On top of that one-time payment, oncologists also receive $350 per-month-per-patient payments as long as patients are receiving treatment that is consistent with the pathway of care.
"We think that is an incredibly more responsible way for doctors to pay for care, and for us to pay for care that is more responsible and affordable," Nussbaum says.
He says it is too early to evaluate the effectiveness of the program, which was launched in July in Georgia, Indiana, Kentucky, Missouri, Ohio, and Wisconsin.
Developing value-based models
Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, a research and advocacy group in Pittsburgh, says the healthcare industry has barely scratched the surface in value-based drug pricing.
"There are many examples of drug pricing that are ostensibly value-based," he said. "Pharmaceutical companies routinely introduce improved versions of drugs and ask for higher prices for those drugs than the previous versions because they perform better in some way, according to the drug company. Health plans routinely place drugs into different cost-sharing tiers based on the health plan's assessment of the value of the drug, which means the health plan, not the drug company, determines the value-based price the patient pays.
"However, what is generally missing today is having the difference in price or cost-sharing between two drugs be directly proportional to the difference in the value of the drugs. For example, a drug manufacturer may charge a lot more for a drug that delivers only slightly better results than another drug, so the difference in price exceeds the difference in value; while the patient may be expected to pay the same copayment for each, which means the difference in price to the patient is less than the difference in value."
Peter Bach, MD, director of the Health Outcomes Research Group at Memorial Sloan-Kettering Cancer Center in New York, proposed "indication-based" drug pricing in the Journal of the American Medical Association earlier this month.
"When costs are essentially the same but benefit differs widely, value is not the same," Bach wrote. "One crude metric of value is the cost per year of life gained. Using Medicare reimbursement rates, the cost per year of life gained with nab-paclitaxel is estimated at $145,000 in breast cancer and $400,000 in [metastatic non-small lung cancer], as measured by the change in median survival."
Bach notes significant reforms would be necessary for adoption of indication-based drug pricing.
"The health care system does not and cannot accommodate indication-based pricing," he wrote. "Oral agents for treating cancer, such as erlotinib (Tarceva), are distributed from pharmacies to patients. The parties that buy and then distribute these medications to pharmacies do so in bulk, and manufacturers do not know which patients are receiving their drugs for which indications. Pharmacies do not necessarily record the indication, even if the prior authorization process required by the insurer does."
Federal data shows a lift in quality rankings for Medicare Advantage health plans with and without prescription drug coverage—and a steep drop in the number of lowest-performing plans.
Ratings data released for Medicare Advantage plans shows significant year-over-year improvement in the number of plans earning top rankings, which "are driving improvements in Medicare quality," says the Centers for Medicare & Medicaid Services.
"We continue to see increases in the number of Medicare beneficiaries in high-performing [five-star] Medicare Advantage plans," the Centers for Medicare & Medicaid Services says a fact sheet released with the star ratings for 2015. "This year, there are significant increases in the number of Medicare beneficiaries in high-performing Prescription Drug Plans (PDPs)."
CMS also noted a striking decline in low-performing MA plans, citing an 80% reduction in the number of health plan contracts that received a "low-performing icon" designation for the 2015 star ratings compared to 2014.
CMS uses a five-star quality ranking system to rank
Outcomes
Intermediate Outcomes
Patient Experience
Access
Process
Outcomes and intermediate outcomes are weighted highest with a relative value three times as much as process measures. Patient experience and access measures are weighted 1.5 times as much as process measures.
The ranking system is used by Medicare beneficiaries to compare health plans and by insurers, to determine "quality bonus payments" for plans that earn at least four stars. In 2015, three-star ratings will no longer be eligible for bonus payments.
14 Medicare Advantage Plans Earn 5 Stars (2014)
Compared to the current year's quality rankings, the 2015 data shows an 8% increase in the number of MA-PD health plan contracts with rating of four stars or higher.
5-Star MA Plans with Prescription Drug Coverage
Kaiser Foundation HP, Inc.
Kaiser Foundation HP, of CO
CarePlus Health Plans Inc.
Kaiser Foundation HP, Inc.
Kaiser FNDN HP of the Mid-Atlantic States
Group Health Cooperative
Gundersen Health Plan
Martin's Point Generations, LLC
Healthspan Integrated Care
Kaiser Foundation HP of the NW
Providence Health Plan
5-Star MA-Only Plans
Medical Associates Health Plan
Dean Health Plan
5-Star Prescription Drug Plans
HealthPartners, Inc.
Wellmark IA &SD, & BCBS MN, MT, NE, ND, & WY
Wisconsin Physicians Service Insurance Corp.
3 Factors Raise Rankings
Detroit-based Blue Cross Blue Shield of Michigan garnered a four-star ranking for its BCBSM Medicare Advantage PPO and a 4.5-star ranking for its BCN Advantage HMO. BCBSM is a nonprofit organization and the largest health insurer in Michigan, with about 4.4 million covered lives in the state.
Mary Smith, VP of BCBSM's Health Care Value Center of Excellence, said three factors have driven a track record of star-ratings success at the BCBS affiliate: "partnerships with physicians to improve quality, sustained operations measure performance, and improving the member experience."
Organizations that are non-profit tend to receive higher ratings than those that are for-profit, according to CMS. But in the final rule on health insurance exchanges, CMS declined to require that tax-status be disclosed.
