There's a lot of talk about the potential for personalized medicine to lower drug costs.
Genetic testing has been around for a few years, and it's being used to customize drug regimens for patients by better understanding how patients metabolize drugs. But proponents of individualized medicine are urging patience.
Konstantinos Lazaridis, MD, associate director of the Mayo Clinic's Center for Individualized Medicine in Rochester, Minnesota, says that genetic testing is readily available and relatively inexpensive, costing between $300 and $400 per patient, although it's not yet covered by insurance.
"It provides information about how you metabolize more than 300 medications that are commonly used in practice," Lazaridis says. "What we have not proven is whether this reduces costs, and it will take some time to do that because it requires testing a lot of people to prove the financial benefit."
"The other thing is that it doesn't give you information from every medication that is out in the market," he says. "There are some medications that are very expensive, such as medications used in oncology. This testing is not going to give you the answer, because it doesn't have a way to address the metabolism."
Another problem for genetic testing is that most clinicians wouldn't know how to interpret the results, "so they'll feel uncomfortable using the test."
Beyond that, advocates for genetic testing have not done a good job integrating the testing and results into the providers' workflow.
"It needs to be streamlined and, to be frank, we're working on it but we don't have a solution, because it's not an easy answer," Lazaridis says.
"If the interpretation and incorporation of testing into the practice is very cumbersome, nobody's going to use it. If something takes a lot of time to explain to the patient or to prescribe the right dose, nobody's going to use it," he says.
Lazaridis says genetic testing has value, but that stakeholders need to prove their point.
"We need to show that it improves the outcomes for medications," he says, "and we have to prove that we saved dollars, that we reduce readmissions, that our treatments become more effective so people don't come back with the same problem."
The one-two punch of exorbitant prices and sketchy access to inpatient drugs have left hospitals across the nation reeling. The shortages are often accompanied by dramatic price hikes. Sometimes the supply is readily available, but the price is prohibitively high, as is often the case when sole suppliers leverage their monopolies.
There's been a lot of talk around solutions at the macro-economic level, from calls for regulatory crackdown on price gouging, to more robust and timely reporting requirements for looming shortages, to modernizing the drug supply infrastructure.
What can hospital executives and clinicians do inside their hospital walls to tackle rising costs and inconsistent supplies? HealthLeaders spoke with pharmacy directors at three health systems who are grappling with these twin issues.
Successful systems communicate the extent and cost of the problem with their clinical and administrative stakeholders and methodically monitor medication usage every day on a patient-by-patient, dosage-by-dosage basis. It's not easy, and it's not glitzy, but it gets results.
Do it yourself
"The drug shortages of the last few years have been unprecedented," says Bob Ripley, chief pharmacy officer at Livonia, Michigan–based Trinity Health. "It is really beyond belief to walk in every day and hear about the next shortage and how are we going to manage that."
"Every hospital in our system has a different set of impacts," he says, "and they had to collaborate to use the resources they had and reconstruct care on a regular basis."
Ripley says the shortages for Trinity center around generic injectable medications that for years had been readily available from multiple vendors at reasonable prices.
"All of a sudden, we were not able to access basic medications that we need," he says. "We're not able on a regular basis to access electrolytes, or opiate injections for acute pain management."
Lou Fierens, Trinity's executive vice president of administrative services, says drug shortages also create a "shadow cost" for hospitals.
"It's not just the price hikes when you're trying to find something in shortage on the gray market or through other means," he says. "It's clinical leaders talking about, 'What are we going to do now? What have we got left? What's the new protocol?' It's the clinical implications. For providers, this shadow cost of the shortage is acute, if not more acute, than the cost."
Tired of getting slapped around by the invisible hand of the free market, Trinity and six other health systems across the nation took matters into their own hands this past summer and formed Civica Rx, a not-for-profit drug company.
The seven health systems in the consortium each ponied up $10 million to form the Utah-based nonprofit, and got another $30 million in backing from three endowments. Civica is expected to begin supplying drugs to its members sometime in 2019.
"Civica itself is a Delaware non-stock, nonprofit corporation. There is no equity in the company. We are funding the initial operations capital. Nobody owns it," says Fierens, who is Trinity's point man on the project.
"We very much structured this intentionally," he says. "The misbehavior of the market, the monopoly characteristics of the market, are the sorts of pressures that no one is immune to, in terms of wanting to make a margin and a profit."
"We felt like it would be important for this to be a long-serving asset to society, that we structured it in a way to avoid those temptations," he says.
Civica will focus on 14 pharmaceuticals that have been susceptible to price hikes, supply problems, or both. Fierens won't say what those products are.
"It's proprietary," he says. "There are concerns about market reactions, tying up critical agents, and some of the same monopolistic behavior we've seen in the market that we don't want to encourage."
"The vast majority of the reasons why these shortages exist are not natural causes," he says. "We're acutely aware of those causes and the motivations, and we want to avoid that."
With a target date to begin distribution in 2019, Fierens says Civica will likely contract out most, if not all, of its pharmaceuticals at first, but will likely begin manufacturing its own products as the company rolls out.
"Where we go in the future will be determined by the board as we evolve the business case and grow the company," he says.
The consortium is open-ended, Fierens says, and Civica is looking at various membership structures so "every hospital can participate."
"We're going to end up in a per-bed fee structure that we'll be rolling out, which will be a very reasonable membership fee," he says.
"As a member, you'll have the opportunity to commit your volume to any of the products we manufacture as a guaranteed source of supply, with no concern about shortages, at what we think will be a very reasonable cost," he says.
The consortium will also provide opportunities to participate for critical access hospitals and other low-volume or safety-net providers that may not be able to afford standard membership fees. "We'll be available to anyone who wants to participate, and based on early interest, we think there will be a lot of providers across the country," Fierens says.
That the Civica consortium represents diverse health systems from across the nation—public, private, for-profit, not-for-profit, faith-based—is a measure of both the scope of the problem, and the common commitment to build a solution, Fierens says.
"I can't think of another thing that would have brought this mix of characters together," he says. "We've tried as a health system, and me personally, to get things done across the industry, across providers, and it's really hard to do so. But this concept has been so favorably embraced. It reinforces that we're on the right track."
Grind out savings
Other than creating their own drug company, what can hospitals do to alleviate the growing burden of drug price hikes and scarcity?
Andrew J. Donnelly, PharmD, director of pharmacy services at the University of Illinois Hospital & Health Sciences System, uses commonsense, hands-on tactics identified by the health system's Pharmacy Value Analysis Committee that have wrung out about $3 million in drug savings over the past five years.
The committee, composed of clinical pharmacists, administrators, and materials managers, scour drug usage reports, and look for fluctuations and waste. They're constantly reading the literature on cheaper biosimilars and other lower-cost alternatives.
"I have 22 clinical pharmacists for the hospital, and they spend the majority of their time in patient care units or care services," Donnelly says. "They're rounding with the medical teams daily. They're being proactive in identifying the appropriate medicines in the appropriate doses. They're trying to make sure that we're as cost-effective as possible, that we aren't wasting, and that our patients are getting the best medications."
These savings often come one patient at a time, but they add up. It might be something as simple as keeping a lower inventory of higher-priced drugs, or using smaller IV infusion bags.
"We see how much the patient gets and we find out if they ever get more than half the quantity that we're sending upstairs," Donnelly says. "We can reduce the amount of the drug and the size of the infusion bag to more accurately match what the patient is using on a routine basis."
"Either by examining patients' medication usage, by doing various audits, or by examining the types and amounts of drugs that are being returned to our central pharmacy, we can oftentimes identify opportunities to change the way we're providing certain medications," he says.
The Pharmacy Value Analysis Committee also keeps close tabs on generic alternatives.
"We're taking advantage of biosimilars that are hitting the market right now," Donnelly says. "We switched from Neupogen to Zarxio, and we saved about $175,000 annually."
Another solution, dose rounding, isn't flashy or cutting-edge, but it works.
"On intravenous immune globulin, for example, we do dose rounding so that if we only need a little bit in another vial, we drop the dose down and make sure that is appropriate," Donnelly says. "You don't waste almost a full bottle when you only take a little bit out of it."
On some medications, UI Health pharmacists will prepack smaller doses from a vial. "We take a 2 mg vial of remifentanil and we prepare 50-microgram syringes out of that 2 mg vial, thereby eliminating waste," Donnelly says.
UI Health's central pharmacy compares prices of commercially prepared infusion bags versus the cost of compounding the product in-house.
"There was a commercially available nicardipine bag but we were able to save almost $300,000 by making it ourselves," Donnelly says. "You have to weigh the benefits of having it already made against the cost. In this instance, there was quite a difference that we could make up in-house."
UI Health also pushes clinicians to provide pharmaceuticals in the appropriate setting.
"An example would be infliximab, which is routinely administered for irritable bowel disease as an infusion on the outpatient side," Donnelly says. "We do not allow new starts for infliximab in the hospital. The patient has to be discharged. We've been able to save money by making sure it's appropriate for the medication to be started in the appropriate venue."
Anyone looking to UI Health for a magic-bullet solution to runaway drug costs and iffy supply chains may come away disappointed. The upside, Donnelly says, is that the meticulous, grinding, daily hunt for drug efficiencies at UI Health is something that many hospitals can replicate.
"Most of the things I've described could be done in a community hospital or an academic medical center," says Donnelly. "Given the issues occurring now, we're all just trying to be as effective as possible, focusing our attention, and putting enough people toward it to be successful."
Involve your clinicians
Bonnie Levin, corporate vice president for pharmacy services at MedStar Health, says pharmacists and clinicians at the Washington, D.C.–based health system use a number of strategies to contain drug costs and maintain supplies.
"There are several buckets that we use," Levin says. "Probably the most sophisticated would be utilization; working with our doctors, nurses, and IT folks to impact the way we use drugs; using less drugs, using a different drug, using it for a shorter amount of time, adjusting for patient variables that use less drugs."
"From a utilization perspective, we try to do antibiotic stewardship using less drug, using the right drug and using it for a shorter amount of time, or not using it at all," Levin says.
Two years ago, MedStar launched a medication use management program with a dedicated staff that included two pharmacists and a systems analyst.
"They work collaboratively with physicians and pharmacists using our electronic records so that we can impact the way drugs are used to make them less expensive, and it always works out safer," Levin says. "The great thing about these kinds of programs is that, if you do the right thing with medication, it's almost always less expensive and definitely safer."
The program constantly monitors adverse events to ensure patient safety.
"We look to see how patients react to the medication. We make sure that kidney and liver function aren't impacted," Levin says. "On the positive side, for antibiotics, we make sure that the temperature comes down, the cultures are good. We monitor whatever elements there are for that drug, looking for efficacy and adverse events."
The program is demanding, requires open and ongoing collaboration across the care continuum, and must be applied meticulously on a patient-by-patient basis.
"We put out these clinical practice guidelines after a lot of consultation and collaboration and a technology build," Levin says. "Then we provide our pharmacists and physicians with these standards. It's a journey. I can't say that we are at 100%, but every day we get better."
Physician acceptance for the initiative was achieved over time through clinical practice councils that represent all specialties.
A medication use management initiative typically starts with the pharmacy, but it also starts with the physicians who say, "We need guidelines for X,' " Levin says. "We evaluate the literature—that is the role of the drug information specialists and the drug policy person—and we look at the evidence. We come up with recommendations, and then we work with the provider groups to endorse it. It's collaborative
back-and-forth."
It works, Levin says, because physicians know they have a voice in the process.
"People revere what they're part of," she says. "Yes, there are some doctors who say, 'Don't mess with my job.' But for the most part there is a lot of collaboration, and as long as they approve it, it's easier to implement it."
As for return on investment, Levin says internal analysis suggests that the program saves between $8 and $10 for every $1 invested.
"It's an ongoing investment and it takes a whole lot of time, but it gets easier over time," Levin says. "We've been in the game a couple years now, and the clinical practice councils come to us and say, 'We want to do a guideline on this new drug. Will you help us?'"
Ev3 Inc. will plead guilty to criminal misdemeanor charges and pay $17.9 million for distributing adulterated devices; Covidien LP has paid $13 million to resolve civil kickback allegations for a second device.
Minnesota-based ev3 Inc. will pay the federal government $17.9 million to settle criminal allegations that it distributed an adulterated neurovascular medical device, the Department of Justice said.
Also this week, Covidien LP, paid $13 million to resolve civil False Claims Act allegations in a whistleblower suit that alleges the device maker paid kickbacks to hospitals that used its Solitaire mechanical thrombectomy device, DOJ said.
Both companies are subsidiaries of Medtronic, which acquired them in 2015, after the alleged infractions occurred.
"The Department of Justice will hold corporations accountable when they violate laws designed to protect consumers and protect public funds," said Assistant Attorney General Jody Hunt of the DOJ's Civil Division. "This resolution demonstrates the department's continued commitment to protect taxpayer dollars and deter companies from putting profits before patient safety."
In documents filed this week in a Massachusetts federal court, ev3 will plead guilty to a misdemeanor charge in connection with the company’s distribution of adulterated Onyx, in violation of the Food, Drug and Cosmetic Act.
As part of the criminal resolution, ev3 will pay a fine of $11.9 million and will forfeit $6 million, DOJ said.
Onyx was approved by the Food and Drug Administration as a liquid embolization device that is surgically injected into blood vessels to block blood flow to arteriovenous malformations inside the brain.
Despite the FDA's limited approval of Onyx, ev3 sales representatives from 2005 through 2009 encouraged surgeons to use Onyx in large quantities for unproven and potentially dangerous surgical uses outside the brain.
"The company's sales force continued to tout unapproved and potentially dangerous uses of Onyx even after FDA officials told ev3 executives that they had specific safety concerns regarding uses of Onyx outside the brain at a 2008 meeting," DOJ said.
"Rather than conduct a study to ensure the safety and effectiveness of Onyx for uses outside the brain, ev3's sales representatives sometimes attended surgical procedures and provided explicit instructions to surgeons regarding how to use Onyx for unapproved surgical procedures outside the brain, including in quantities far larger than what would be used in the brain," DOJ said.
In addition, ev3's management used sales quotas and bonuses that incentivized sales representatives to sell Onyx for unapproved uses and trained the sales force how to instruct physicians on unapproved uses of the device, DOJ said.
"Ev3 disregarded laws designed to protect patient safety," said U.S. Attorney Andrew E. Lelling for the District of Massachusetts.
Covidien acquired ev3 in 2010, before the crimes covered in the plea agreement. Covidien was acquired by Medtronic in 2015.
Covidien Paid Kickbacks
Covidien separately will pay $13 million to resolve its civil liability for allegedly paying kickbacks to induce the use of its Solitaire mechanical thrombectomy device, which is designed to restore blood flow and retrieve a blood clot in certain stroke patients.
Federal prosecutors alleged that Covidien paid kickbacks to hospitals to induce them to use the Solitaire device, and thus file false claims to Medicare to pay for the device.
After receiving FDA clearance for Solitaire, Covidien launched a registry to pay hospitals and institutions to collect data about user experiences with the device. For two years, beginning in August 2014, Covidien paid hospitals that participated in a registry each time they used a new Solitaire device and reported certain clinical data about their practices for treating stroke patients to Covidien.
Prosecutors allege that Covidien solicited hospitals for the registry in order to convert their business from the competitor's product and persuade them to continue using Covidien products, using the registry to increase device sales.
"As part of an aggressive marketing campaign for its medical device, Covidien allegedly found a way to subsidize facilities that agreed to use its product—often convincing them not to use devices sold by another manufacturer," said U.S. Attorney Nicola T. Hanna for the Central District of California.
"Patients deserve to know that their medical providers are offering the best possible treatments and are not making decisions based on increasing the bottom line for healthcare providers," Hanna said.
The whistleblower in the lawsuit, Jeffrey Faatz, worked for Covidien from 2012 to 2014, and will receive $2 million from the settlement.
Medtronic Responds
Medtronic issued a statement noting that: "The plea agreement and settlements that the Medtronic entities agreed to all concern matters that took place either largely or entirely prior to Medtronic acquiring the businesses in which the activities took place."
"Medtronic has made significant investments in ensuring that it fulfills its obligations to all of its stakeholders and to do business the right way."
Medtronic also agreed to conduct compliance monitoring related to the Onyx sales.
The award is based on several metrics, including; preventing infections, reducing C-sections, use of technology to ensure safer care, and leadership policies and practices.
Florida, California, New Jersey and Texas had strong showings in The Leapfrog Group's 2018 Top Hospitals awards, with 13 or more hospitals in each of those three states earning the distinction.
Of the 118 Top Hospitals recognized in 23 states and the District of Columbia, 13 were children's hospitals, 35 were general hospitals, 53 were teaching hospitals and 17 were rural hospitals.
"We’re encouraged by the hard work of Top Hospitals, as well as all of the hospitals that compete for this award said Leah Binder, president and CEO of The Leapfrog Group. "Their transparency and determination delivers the best possible care in their communities."
The five states with the most Top Hospitals are: Florida (18); California (17); Texas (13); New Jersey (12); and Pennsylvania (8). Only one hospital in New York made the list.
The award is based on several quality metrics, including; preventing infections, reducing C-sections, use of technology to ensure safer care, and leadership policies and practices.
In addition, The Leapfrog Hospital Survey compares hospitals' performance on national standards of patient safety, quality, efficiency and management structures that prevent errors, which nonprofit The Leapfrog Group says provides a comprehensive picture of how patients fare at individual hospitals.
Leapfrog's Top Hospitals are not listed by rank, unlike other popular hospital rankings such as U.S. News & World Report's Best Hospitals rankings. In fact, top hospitals on one list are often not found on the other, owing largely to the use of different metrics.
The 119-page report is a rehash of ongoing administration efforts to deregulate the healthcare industry with the hope of fostering competition and lowering prices.
The Trump administration unveiled its blueprint Monday for reforming the nation's healthcare delivery system through freemarket principles and deregulation to encourage competition and consumer choice.
"This report identifies barriers on the federal and state levels to market competition that stifle innovation, lead to higher prices, and do not incentivize improvements in quality," the report's coauthors, Labor Secretary Alexander Acosta, Treasury Secretary Steven Mnuchin, and Health and Human Services Secretary Alex Azar, wrote in an introductory letter to President Donald Trump.
"It recommends policies that will foster a healthcare system that delivers high-quality care at affordable prices through greater choice, competition, and consumer-directed health care spending," the trio wrote.
Among the report's recommendations:
Foster policies that broaden providers' scope of practice and healthcare workforce mobility, including telehealth.
Streamline federal funding for graduate medical education to more efficiently address physician supply shortages.
Urge states to scale back or repeal Certificate of Need laws to encourage competition.
Encourage the development of flexible value-based care models that offer risk-based incentives for providers, without burdening small or rural practices.
Scale back government mandates on health insurance coverage.
Promote and expand Health Saving Accounts.
Implement reference pricing, and develop price transparency initiatives.
The top performing hospital in 2019 will receive a 3.6% net increase, and the lowest performing hospital will incur a net decrease of 1.59%.
More than half of the 2,800 hospitals participating in Medicare's Value-Based Purchasing Program will get more money in 2019, thanks to higher Total Performance Scores, the Centers for Medicare & Medicaid Services announced.
"This program is part of our long-standing effort to improve care across the entire healthcare delivery system, including hospital inpatient care, by tying Medicare payment to quality and cost measure performance," CMS said.
In total, more than 1,550 hospitals (over 55%) will share higher Medicare payments totaling about $1.9 billion in fiscal year 2019, the seventh year of the Hospital VBP Program, CMS said.
For FY 2019, almost 60% of hospitals will see a small change (between -0.5% and 0.5%) in their IPPS payments. The average net payment adjustment is 0.17%. The average net increase in payment adjustments is 0.61%, and the average net decrease in payment adjustments is -0.39%, CMS said.
The highest performing hospital in FY 2019 will receive a net increase in IPPS payments of 3.67%, and the lowest performing hospital will incur a net decrease in IPPS payments of 1.59%.
The Inpatient Prospective Payment System value-based incentives are based upon how the hospitals performed when compared with peer hospitals on quality and cost metrics, and how much they've improved care quality over time.
TheTotal Performance Score for each hospital is based equally on four measures; clinical care, safety, person and community engagement, and efficiency and cost reduction.
The value-based program is budget neutral, and CMS pays for it by cutting a portion of the base operating Diagnosis-Related Group payment amounts a participating hospital receives for each discharge by 2%. The estimated sum total of these reductions, $1.9 billion in FY 2019, is redistributed to participating hospitals based on their performance on quality and cost measures.
For FY 2019, the average TPS across all participating hospitals increased to 38.1 from 37.4 in 2018.
On average, rural hospitals performed better in the Safety, Person and Community Engagement, and Efficiency and Cost Reduction domains, while urban hospitals performed well in the Clinical Care domain.
For FY 2019, the average TPS across all rural hospitals of 42.4 was greater than the national average TPS. Similarly, smaller hospitals performed better in the Safety, Person and Community Engagement, and Efficiency and Cost Reduction domains, as well as overall TPS, while urban hospitals performed well in the Clinical Care domain.
The magazine's renowned list of 50 top-ranked hospitals for cardiovascular care outperformed 3,500 non-ranked hospitals on key metrics, but saw similar or higher readmissions rates.
It turns out there may be more to the U.S. News & World Reporttop hospital rankings than a savvy marketing gimmick.
In a study in JAMA Cardiology, Harvard University researchers examined the list's top 50 hospitals for cardiovascular care and found that, yes indeed, they had lower 30-day mortality rates for heart attack, heart failure, and coronary artery bypass grafting, along with higher patient satisfaction ratings when compared with non-ranked hospitals.
However, 30-day readmission rates for heart attack and CABG were either similar or higher in the top 50 hospitals.
Study co-author Deepak L. Bhatt, MD, MPH, a cardiologist, professor at Harvard Medical School, and executive director of interventional cardiovascular programs at Brigham and Women's Hospital, says that the higher readmissions rate is not necessarily a black mark for the top hospitals, or the magazine, but more of an indication that 30-day readmissions is a lousy quality metric.
Bhatt spoke with HealthLeaders about the study. The following is an edited transcript.
HL: Did your study validate the U.S. News rankings?
Bhatt: Yes, we did! There's been a debate, certainly among hospital circles, about whether the U.S. News & World Report rankings are or aren't valid in terms of determining which hospitals are truly the best.
First of all, every hospital wants to be on that list, even if they say otherwise. But the question remains, is it just a marketing thing or is there any validity to it? What we found out was, in fact, U.S. News best hospitals do have better outcomes. The list actually does mean something.
I didn't personally go in with any bias. I would have been happy either way. In fact, if anything I was a little skeptical. But, data are what they are, and they show that the U.S. News really does correlate with better outcomes. Not just better processes, not just better metrics, but actual better outcomes, and it's hard to argue with that.
HL: Your study also raises concerns about the value of readmissions as a quality metric. Please elaborate.
Bhatt: There are two messages from this paper that are valid but are completely disconnected.
One is that the U.S. News top-ranked hospitals list is a valid surrogate of outcome. It really does reflect which hospitals are providing better care that results in better outcomes. That's message number one.
Completely distinct from that message is that the measure of readmissions, in particular readmissions for heart failure, is not a valid metric of hospital performance. Hospitals are penalized if they readmit too many of their heart failure patients. It's something that hospitals watch very closely. They try to make that number better. What we found was no correlation between the good hospitals and their readmission rate for heart failure.
It makes sense on a common sense level. To take it an extreme, if all your heart failure patients are going home and dying, then none of them will get readmitted so your readmission rate will be zero and that metric will look good. Unfortunately, from the patient's perspective, it's a failure, so that's why readmission in general can be a flawed metric.
That's not to say readmission isn't important. That ideal scenario is to reduce both mortality and readmissions, but you don't want it to be a trade-off where you're potentially reducing readmissions but not influencing or even worsening mortality.
HL: Do you think these top hospital rankings adequately address patient acuity?
Bhatt: In general, teaching hospitals tend to be located in the city or inner cities, tend to get sicker patients, tend to get patients that are more likely to be indigent.
We looked at risk standardized mortality. To the extent possible, there was risk standardization of mortality performed by CMS themselves. We weren't just looking at crude mortality. It was, to the extent possible, risks standardized, acknowledging that those risks standardizations aren't perfect either.
HL: Why did your study focus on cardiac?
Bhatt: The most-honest answer is because I'm a cardiologist. Other than that mundane reason, it's also because, in terms of healthcare and common conditions, common causes of mortality, the leading cause of mortality still nationwide and in most regions of the world is cardiovascular disease.
In terms of expense, as far as U.S. healthcare costs, cardiovascular and cancer account for a good chunk of it. So, for reasons of healthcare mortality, morbidity and cost, cardiovascular is probably right there at the top.
HL: Do you think your findings would be similar if you looked at outcomes for other specialties?
Bhatt: What we found likely would be true, somewhat, if you looked for other things like cancer or respiratory diseases or whatever.
HL: What do you think would be the best use for your findings?
Bhatt: First of all, I'd say the U.S. News is worth paying attention to, both if you are a patient, but also for hospitals. Though many hospitals don't like to admit it, they do spend a lot of time thinking about their own rankings, and maybe that's not such a bad idea. There's something to it.
But the second more important message is we've really got to move away from penalizing financially for readmissions, because it creates a potentially very perverse disincentive. It's better to focus on quality measures and metrics where we can really improve patient care instead of on ones that might unintentionally be hurting patient care.
HL: How would this perverse disincentive manifest itself?
Bhatt: I'm not suggesting that an individual doctor is going to say, "I'm going to discharge you, even though you should be admitted, even if you're going to die." I don't believe doctors are going to behave in that unethical fashion.
It's not a doctor level thing. It's a healthcare system and hospital-level thing, where if a significant financial penalty is being enacted, it's naive to think that that's not going to influence behavior on a macro level. Of course it does.
HHS shortens the 340B final rule implantation by six months after determining that it would not 'interfere' with the departments 'comprehensive policies' to address high drug costs.
After several delays, hundreds of public comments, a lawsuit, and an eight-year-old Congressional mandate, the federal government on Thursday bumped up the starting date of its 340B drug pricing final rule by six months.
In a notice published this week in theFederal Register, the Department of Health and Human Services said the final rule—which is designed to protect hospitals from being overcharged by drug manufacturers—would take effect on January 1, 2019, instead of July 1, 2019.
The final rule was supposed to take effect on January. 5, 2017, but HHS delayed implementation because it said it was in the midst of "developing new comprehensive policies to address the rising costs of prescription drugs."
Hospitals got tired of waiting and filed suit, asking a federal judge to order the Trump Administration to launch the final rule on January 1, 2019. The hospitals allegethat the delays are causing significant financial harm to the nearly 2,500 hospitals nationwide that participate in the 340B Drug Pricing Program.
In bumping up the final rule implantation by six months, HHS said it "has determined that the finalization of the 340B ceiling price and civil monetary penalty rule will not interfere with HHS’s development of these comprehensive policies."
Under the new rule, federal regulators will provide pricing information to 340B hospitals through a closed website, which proponents of the rule say is essential for ceiling price enforcement.
As expected, hospitals praised the action, and drug makers expressed disappointment.
"This rule is good for patients and for essential hospitals, which rely on 340B savings to make affordable drugs and health care services available to vulnerable people and underserved communities," said America's Essential Hospitals President and CEO Bruce Siegel, MD.
"It also ends years of delay for much-needed measures to hold drug companies accountable for knowingly overcharging covered entities in the 340B program," Siegel said.
Maureen Testoni, interim president and CEO of 340B Health, called the announcement "a big step toward stopping drug companies from overcharging 340B hospitals, clinics, and health centers."
"The next step toward ensuring true 340B drug maker transparency is for the administration to launch its ceiling price website so hospitals, clinics, and health centers can ascertain that they are paying the correct amounts for 340B medications," Testoni said.
"We are encouraged that HHS says it will release that pricing reporting system shortly and that the department will communicate additional updates through its website," she said.
PhRMA said it was "disappointed the Administration did not issue new proposals for this rule as it repeatedly stated it would."
The pharmaceutical industry advocates said HHS "ignored the numerous concerns raised by stakeholders on the proposed ceiling price calculations, offset policy and civil monetary penalty provisions."
Drug makers allege that hospitals have been scamming the 340B program, and PhRMA said Thursday that the final rule's "flawed policies are not in line with the 340B statute and fail to address root problems in the 340B program that have enabled private 340B hospitals to generate record profit without commensurate benefit to patients."
"Not only is the final rule itself overly burdensome in its requirements, but moving up its effective date also leaves manufacturers with very little time to make operational changes to systems and procedures," PhRMA said.
Testoni scoffed at claims that more time was needed.
"The regulation now will be going into effect more than eight years after Congress mandated it—and only after a lawsuit filed by 340B Health and other hospital organizations to stop repeated administrative delays to the effective date," Testoni said.
"As today's final rule notes, these delays have given drug makers 'more than enough time to prepare for its requirements.'"
The condition-laden approval stipulates a seven-year price cap that guarantees that the merged health system's price increases will be kept below the state's healthcare cost growth benchmarks.
The proposed merger of Beth Israel Deaconess Medical Center and Lahey Health System cleared a huge hurdle today when Massachusetts Attorney General Maura Healey announced her conditional support.
The approval comes with what Healey called an "unprecedented" seven-year price cap that guarantees that the merged health system's price increases will be kept below the state's Health Care Cost Growth benchmark.
"Through this settlement, Beth Israel Lahey Health will cap its prices, strengthen safety net providers across the region, and invest in needed behavioral health services," Healey said in a media release.
"These enforceable conditions, combined with rigorous monitoring and public reporting, create the right incentives to keep care in community settings and ensure all our residents can access the high-quality health care they deserve," she said.
The deal also cleared a key federal hurdle when the Federal Trade Commission voted to close its investigation in light of Healey's agreement.
"The assessment of whether to take enforcement action was a close call. However, based on Commission staff’s work and in light of the settlement obtained by the Massachusetts AG, we have decided to close this investigation," the FTC said in a media release.
Kevin Tabb, MD, CEO of Beth Israel Deaconess Medical Center, who will serve as CEO of Beth Israel Lahey Health, called the state and federal approvals "an important step forward in making our vision a reality."
"We appreciate the enormous effort that the Attorney General, her staff and the Federal Trade Commission have devoted to our proposal. We share their commitment to health care innovation in Massachusetts, and we are eager to build on the strengths of our legacy organizations and deliver on our promise to our patients, their families and our communities,” Tabb said.
Massachusetts' Health Care Cost Growth benchmark controls the annual growth of total medical spending in the state and is now set at 3.1%. Over the seven-year term, the cap will avoid more than $1 billion of the potential cost increases projected by the state's Health Policy Commission.
When finalized, the merged, 13-hospital health system will be will one of the largest in the Bay State.
The merger push began in 2017, with Beth Israel and Lahey justifying the consolidation as a market-based attempt to address rising costs, price disparities, and healthcare access issues.
However, the deal has faced headwinds since its inception.
Even as late as this September, theMassachusetts Health Policy Commission noted that the merger would create a health system roughly the same size as Partner's HealthCare System, the state's largest health system, which would "increase substantially" market concentration in eastern Massachusetts.
"BILH's enhanced bargaining leverage would enable it to substantially increase commercial prices that could increase total healthcare spending by an estimated $128.4 million to $170.8 million annually for inpatient, outpatient, and adult primary care services," MHPC said.
In addition, the commission said spending on specialty physician services could increase by as much as $60 million annually if the merged health system obtains similar prices increases for those services.
"These would be in addition to the price increases the parties would have otherwise received," the commission wrote. "These figures are likely to be conservative. The parties could obtain these projected price increases, significantly increasing healthcare spending, while remaining lower-priced than Partners."
Those concerns appeared to have been alleviated on Thursday, when MHPC Commissioner Martin Cohen said "the investments required by the settlement will have a real impact on access to treatment for mental health and substance use disorders for patients across Eastern Massachusetts."
Healey's assurance of discontinuance also includes requirements that the merged Beth Israel Lahey Health pledge $71.6 million to support healthcare services for underserved areas.
The deal also requires BILH to strengthen its commitment to MassHealth; engage in business planning with its safety net hospital affiliates; enhance access to mental health and substance use disorder treatment; and retain a third-party monitor to ensure compliance with the terms.
The deal exempts affiliated safety net hospitals from the price-cap constraints. Lawrence General Hospital CEO Dianne J. Anderson said the exemption for her safety net will "ensure a commitment to joint, long-term planning for distribution of health care resources across the region."
The $71.6 million that BILH will spend over eight years for underserved areas will include:
$41 million to fund affiliated community health centers and safety net hospitals, which guarantees support at the systems' historic levels.
At least $8.8 million in additional financial support for affiliated community health centers and safety net hospitals.
At least $5 million in strategic investment to expand access to healthcare for low-income communities through community health centers.
At least $16.9 million to develop and expand behavioral health services across the BILH system.
The Nashville-based medical center, a key provider of healthcare services in Middle Tennessee, was told it will lose its Medicare accreditation early next month.
Vanderbilt University Medical Center has been told that it will be cut from the Medicare program next week in the wake of a medication error last year that led to a patient's death.
"The Centers for Medicare and Medicaid Services has determined that Vanderbilt University Medical Center is not in compliance with the conditions of participation," Linda Smith, associate regional administrator at the Department of Health and Human Services Division of Survey and Certification said in a one-page public notice issued this week,.
"The Medicare program will not make payment for hospital services to patients who are admitted after Dec. 9, 2018," Smith said.
Specifically, the notice cited VUMC for failing to meet the conditions of participation involving patients' rights and nursing services. No further details were provided, and CMS did not respond to requests for more information about the case.
However, VUMC Chief Communications Officer John Howser said the alleged infractions came after a patient death last December.
The statement issued by VUMC reads as follows:
VUMC was notified of an adverse finding by the Tennessee Department of Health after an on-site survey involving a patient who died in December 2017 following a medication error.
In reviewing the event at the time it happened, we identified that the error occurred because a staff member had bypassed multiple safety mechanisms that were in place to prevent such errors.
We disclosed the error to the patient's family as soon as we confirmed that an error had occurred, and immediately took necessary corrective actions (including appropriate personnel actions).
We will continue to work closely with representatives of Tennessee Department of Health and Centers for Medicare and Medicaid Services to assure that any remaining concerns are fully resolved within the specified time frame.
