Now that China's State Council approved sweeping reform of its healthcare system, venture capitalists all over the world are anticipating the opportunities in life science fields that the new funding will make possible. With 7,400 clinics and 2,000 hospitals in the works under China's plan, companies that provide tools such as medical equipment and service technology are poised to benefit greatly, according to this article at Venturebeat.com.
The deal, which is expected to close in the second quarter of 2009, includes a combination of cash and up to $1.4 billion in stock. The deal also features a 10-year contract for Express Scripts to provide pharmacy benefit management services to WellPoint, which is the nation's largest health insurer by enrollment.
WellPoint's PBM, which is called NextRx, is the nation's fourth largest PBM by number of annual prescriptions managed, trailing Medco Health Solutions, CVS Caremark, and Express Scripts. It managed 268 million prescriptions in 2008 compared to Express Scripts' 506 million prescriptions.
Combining the third and fourth largest PBMs will result in Express Scripts as the number two PBM, slightly behind Medco. The purchase comes two years after retail pharmacy chain CVS purchased Caremark.
George Paz, chairman and CEO of Express Scripts, said in a prepared statement that the new larger PBM will promote trend management tools, such as generics, home delivery, and specialty pharmacy. Angela F. Braly, president and CEO of WellPoint, said in a prepared statement that the sale will allow members to enjoy integrated health benefits, deliver significant value to shareholders, and create health cost savings.
Healthcare experts are not surprised by WellPoint's decision to sell its PBM. Many analysts predicted that large insurers like WellPoint, Aetna, and UnitedHealth, could sell their PBM businesses as a way to refocus their offerings in this difficult economy. Joe Paduda, principal of Health Strategy Associates in Madison, CT, says the health insurance/PBM world is "consolidating horizontally," meaning within each segment the large companies are getting bigger. He says there are two takeaways from NextRx's sale.
"First, health plans are looking to focus on their core business," says Paduda. "PBM is growing increasingly specialized and complex; health plans are focusing on readying themselves for whatever form health reform takes. The economy's impact is also being felt by health plans. Thus they are looking to sell non-core assets to raise cash. Second, the PBM market is well into maturity. Mature markets consolidate and that is precisely what we are seeing."
Health insurers face a dilemma. Do they outsource PBM and disease management services and return to core business strategies, such as plan administration, claims payment, and member outreach? Or do they keep these services in-house and have more control over member information and a steady revenue stream from PBM business?
On the one hand, standalone PBMs can negotiate lower drug prices because of their size and have been more successful in lowering costs through mail order business.
However, insurers with in-house PBMs say they can track members through immediate pharmacy claims data. This is especially helpful in the area of disease management. Having up-to-date claims information allows an insurer to reach a member for health coaching if its PBM sees prescriptions that would lead them to believe the person needed immediate outreach, such as prescriptions for chronic disease-related drugs.
George Van Antwerp, vice president, solutions strategy, at Silverlink Communications, Inc., in Burlington, MA, says health plans can benefit from having their own PBMs if they use them properly.
"I think that it's beneficial to plans to own their own PBM if they can integrate data and create a better member experience; make the tradeoff between increased pharmacy spend and lower medical loss ratio; and manage to get most of the economies of scale in terms of operations and negotiation. That has proven hard to do within health plans, and therefore, there will be short-term interest in capitalizing on the valuation of the PBM business," says Van Antwerp.
With three large PBMs left after the pending purchase, Van Antwerp says the trio will "race to the bottom in terms of negotiating scale leverage." Van Antwerp predicts the remaining PBMs will ultimately try to differentiate themselves by offering healthcare management through member engagement, greater transparency, and a renewed focus on health outcomes.
Paduda says the PBM market has become increasingly tough. He suggests the market will ultimately feature a couple of giants and a number of smaller specialty PBMs—many of which will look to get acquired. "PBMs can only grow by taking business from each other or via acquisition so PBMs can expect continued price pressure," he says.
Promoting smooth transitions from hospitals and nursing homes to outside care—including professional home healthcare—without triggering readmissions is garnering new attention from the Centers for Medicare and Medicaid Services. Twenty new measures endorsed last week by the National Quality Forum (NQF) may be able to further assist healthcare providers in determining if they are delivering quality care to patients in their homes.
More than 7 million Americans receive professional healthcare services annually in their homes after they are discharged from healthcare facilities or because of acute illness, chronic health conditions, disability, or terminal illness, according to the NQF. In 2007, home healthcare annual expenditures were projected to be $57.6 billion. However, improvements in the quality of home healthcare have been small.
"The committee was very mindful of what was meaningful for the public," said Carol Spence, PhD, RN, director of research at the National Hospice and Palliative Care Organization, Alexandria, VA, and co chair of NQF's Home Healthcare Steering Committee. Continuum of care—and the role of professional home healthcare in that process—was another issue on the table during the committee's discussions.
The 20 new measures focus on eight specific areas of home healthcare: timely initiation of care; patient and caregiver education; preventive services; pain intervention and assessment; improvement and assessment of clinical symptoms; improvement in functional status; assessment of need for emergency room or hospital care; and patient experience of care.
Patient experience of care will be measured using the Consumer Assessment of Healthcare Providers and Systems survey, which lets patients and their families provide details about their home healthcare experiences. In addition, other specific measures address areas including: receipt of flu shots, depression screening, improvements in mobility, pain reduction, medication compliance, improvements in the status of surgical wounds and number of pressure ulcers, and the percentage of home healthcare patients who need rehospitalization.
In addition to endorsing new measures, NQF reviewed 15 other previously endorsed home health measures, many of which have been used by CMS' Home Health Compare, an online tool for consumers to compare the quality of care provided by home health agencies across the country.
The endorsement of measure the quality, safety and patient experience of care in the home aligns with goals set out by the National Priorities Partnership, a group of 28 organizations, convened by NQF to address transformation of the healthcare system. The home healthcare measures work was conducted under a contract from CMS.
A study recently published in The New England Journal of Medicine shows that 20% of Medicare patients are readmitted to the hospital from which they were recently discharged within a month. That percentage jumps to 34 when looking at a three month time period. The data, representing Medicare claims collected between 2003 and 2004, show that more and more discharge is becoming a time at which it is crucial to have a good communication plan in place among caregivers and patients. What's more, the presence of a strong continuum of care can lead to lower rehospitalization rates.
"In order to address this issue, we are going to wind up addressing the most profound issues in healthcare today," says Stephen Jencks, MD, MPH, a lead author of the study and independent consultant in healthcare safety and quality. "Issues like a system which has become provider-centered rather than patient- and family-centered. If your concerns stop when the patient goes out the door of the hospital or start when the patient comes in the door of your office, you're not going to provide the care that's necessary to keep people from being rehospitalized."
Saying that rehospitalizations are costly is an understatement. In 2004, $17.4 billion was spent caring for patients readmitted to the hospital; Medicare paid hospitals $102.6 billion in total that year. Med Pac, a commission that advises Congress on Medicare policy, has recommended that instead of rewarding hospitals for the quantity of patients they see, hospitals should receive payment for providing the highest quality of care to patients—including whether their patients are readmitted with select conditions.
Some states are already performing far better than others in terms of rates of rehospitalization. The five states with the highest rates of rehospitalization have rates 45% higher than the 5 states with the lowest rates of rehospitalization. What this shows, is the degree to which the community at large is a player, or what Jencks describes as a two-way street, and not simply the fault of the hospital.
"The way to see this is as a community challenge—to get people, whether they are hospital CEOs, nursing home managers, mayors, or the directors of the health departments—to be thinking about how their role involves bringing people together," says Jencks. "For a hospital, it's a wonderful opportunity for them to take a leadership position which will ultimately benefit them."
So how can hospitals do their best to prevent readmissions?
Ensure that a member of the patient's family, or a caregiver, will be present at discharge and a part of the care planning process. "The patient is rarely going to be able to take this responsibility in the shape that their usually in when they're discharged," says Jencks.
Using the teach-back method, a style which asks patients to repeat back to the explaining caregiver in his or her own words the information exchanged, teach patients and families what they will need to do to care for themselves at their next phase of care, what the risks are that warrants a phone call to a physician, and a phone number that they can call when one of those risks arise.
Prevent the patient from leaving the hospital without a follow-up appointment of some kind. In his study, Jencks and his colleagues found that about 50% of patients who were rehospitalized had not been seen by an interim physician after 30 days. Hospitals often say that they can't make an appointment in that short of a timeframe for a patient's follow-up care, says Jenks. "My answer is, well if you can't get it how do you think the patient's going to get it?"
Create a list of reconciled medications for the patient to take with him or her at discharge that clearly spells out what he or she should be taking upon leaving the hospital. Many patients go home and stare into their medicine cabinets, confused about those medications that they took before being hospitalized.
Heather Comak is a Managing Editor at HCPro, Inc., where she is the editor of the monthly publication Briefings on Patient Safety, as well as patient safety-related books and audio conferences. She is also is the Assistant Director of the Association for Healthcare Accreditation Professionals. Contact Heather by e-mailinghcomak@hcpro.com.
Gov. Arnold Schwarzenegger announced a $32 million initiative to reduce the shortage of critical healthcare workers in California.
Half the funding for the three-year program will come from the state, including $8 million in federal Workforce Investment Act money and $8 million in federal Recovery Act stimulus funding. The balance will come from private partners, including colleges and hospitals.
U.S. diabetics are increasingly cutting back on, or even going without, doctor visits, insulin, medicines, and blood-sugar testing as they lose income and health insurance in the recession, an Associated Press analysis has found. Doctors have seen a drop in regular appointments with diabetic patients, if they come back at all. Patients more often seek tax-subsidized or charity care. And they end up in emergency rooms more often, patients and physicians said in AP interviews.
Funding for Maine's Dirigo Health Program is the topic for the Legislature's Insurance and Financial Services Committee. Bills up for presentation would eliminate a controversial savings offset payment that is now determined annually and used to fund Dirigo the state program designed to use subsidies to expand access to healthcare. To replace the SOP assessment on insurers, the bills would set a fixed levy on paid claims.
Long notorious for its high healthcare costs, Miami has been chosen by Medicare as one of 14 communities for a pilot project seeking to eliminate unnecessary hospital readmissions. Miami has long been known for having the highest Medicare costs per senior citizen in the nation—or close to it. The average Miami senior costs about twice as much per year as does one in Minneapolis. The program will be overseen by Florida's Medicare Quality Improvement Organization, a Tampa-based subsidiary of Health Services Holdings.
Illinois Gov. Pat Quinn is speeding up payment of overdue bills so the state can qualify for more federal money. Illinois has fallen far behind in paying its bills, particularly to the hospitals, nursing homes, and pharmacies that care for the poor. They sometimes have to wait 150 days to be paid. The federal government is providing economic stimulus money to help cover Medicaid costs, but only if states reduce their payment cycle to 30 days or less by June 1.
Federal healthcare agencies are getting $1.1 billion in economic-stimulus funds for research comparing the effectiveness of various treatments. But drug and medical-device makers, along with some members of Congress, say they are worried the findings will be used to limit patients' options.
