Programs developed by Dean Ornish, MD, for coronary artery disease, Type II diabetes, and early-stage prostate cancer are expected to extend Healthways' existing portfolio of well-being improvement programs.
Healthways, the giant wellness program and disease management company, has entered into a partnership with popular author and researcher Dean Ornish, MD, to operate and license his lifestyle management programs.
The Ornish programs for coronary artery disease, Type II diabetes, and early-stage prostate cancer are expected to complement and extend Healthways' existing portfolio of well-being improvement programs.
"The question we ask ourselves all the time is 'what can we do to help well-being improve?' If we can get that accomplished, there's a lot of economic benefit," said Ben Leedle Jr., Healthways president and CEO. He and Ornish were interviewed by phone. Healthways officials see the Ornish programs as playing a major role in achieving that economic benefit.
Ornish, founder and president of the non-profit Preventive Medicine Research Institute in Sausalito, CA and a clinical professor of medicine at the University of California in San Francisco, has spent much of the last three decades conducting clinical research that supports how lifestyle changes, including diet, moderate aerobic exercise, stress reduction, and smoking cessation can prevent and even begin to reverse the effects of chronic conditions such as severe coronary heart disease, without drugs or surgery.
As healthcare makes the paradigm shift from volume to value and emphasizes population health, "there's a convergence of opportunities and Healthways understands them," Ornish said. "In this new environment where [providers] are paid a certain amount of money to manage care, interventions like ours are perfectly positioned."
Ornish says that as his programs have gained acceptance among commercial payers and Medicare, providers have asked to be trained in the Ornish methods. "We've been looking for several years for the right partner to help us scale this quickly." Healthways, which has a global presence and serves about 45 million people worldwide, "has the capacity to help us create a paradigm of healthcare instead of sick care," Ornish adds.
As part of this partnership Ornish says data, including clinical outcomes, will be collected on "millions of people to provide ongoing evidence of the power that these simple lifestyles changes can make."
Healthways sees the partnership as a way to differentiate itself from competitors such as Aetna's Active Health and Optum at UnitedHealthcare. Leedle sees a unique value that others "will have a difficult time" replicating.
Under the terms of the contract, health systems, health plans, hospitals, and physician groups will be trained and certified for Ornish programs exclusively through Healthways. The training will assure that providers will be eligible for Medicare reimbursement as they use Ornish programs to improve patient health.
Leedle says Healthways will reach out to Fortune 500 companies that he describes as "desperate to find credible, science-backed ways to be able to effect healthcare claims costs in the near term but also performance, productivity and engagement of their work force." He expects health plans to look at the Ornish programs as ways to "engender deeper relationships with their provider networks." Integrated delivery systems will look at the Ornish programs as "accretive to their brands."
Healthways declined to release contract details, but Leedle and Ornish acknowledged that the agreement is exclusive and open-ended in terms of duration.
The health insurer's goal is to shift its physician network from fee-for-service payments to a value-based compensation model that rewards physicians for the quality of that care and may reduce healthcare costs.
Pittsburgh-based Highmark Health Services, has formed the Accountable Care Alliance with the physicians employed by the Allegheny Health Network. Highmark officials expect to expand the model throughout its markets.
The incentive-based program holds the promise of enabling physicians to increase their reimbursements by as much as 30% by meeting certain quality measures. The goal is for Highmark to shift its physician network from fee-for-service, which encourages physicians to focus on the number of patients they treat, to a value-based payment system that rewards physicians for the quality of that care and may reduce healthcare costs.
At the press conference announcing the ACA, Mike Fiaschetti, president of health markets for Highmark, described the program as "our foundation for transforming the way healthcare is delivered through how we provide incentives to physicians and how we reimburse them."
Fiaschetti said the program will include enhancing the way the insurer shares data and information with physicians, care management, and the coordination of patient care across the care continuum.
"For the first time we'll be looking at the overall per capita cost of patient care," said Fiaschetti, who made a point of stating that the program was developed with input from "physicians, not physician administrators."
Fiaschetti noted that the program will reward certain physician behaviors such as spending more time with patients and meeting quality goals.
The physician incentives will be awarded based on enhanced quality and population health management costs. The 28 quality parameters include familiar Healthcare Effectiveness Data and Information Set (HEDIS) and National Quality Forum measures such as tracking that patients receive mammograms at the appropriate stages of their lives and that heart attack patients receive appropriate medications.
Incentives will also be based on follow-up services to make sure patients understand physician orders, fill prescriptions, and take their medications.
For now, the ACA is entirely incentive-based, but plans call for it to grow to a "broader, full gainsharing, risk-sharing model in about three years," said Fiaschetti. "We call it a glide path. You can't just go to full risk and expect physicians, hospitals and specialists to all succeed until we start working together."
Highmark has already signed up 500 physicians employed by the Allegheny Health Network, an integrated delivery system that includes six hospitals. It plans to expand the program to physicians at Saint Vincent Health System in Erie, which Highmark acquired last week, by the end of the year. Officials said they expect the ACA to grow to include independent physicians throughout its central and western Pennsylvania markets, as well as its Delaware and West Virginia markets.
For now the focus is on primary care physicians but specialists will be added at a later date. Paul Kaplan, MD, Highmark's senior vice president for provider strategy and integration, said Highmark is looking for physician groups where "someone is willing to be a champion for the new delivery system [who] understands the investment in time required to understand what their patients want, as well as the investment in IT and infomatics infrastructure needed."
Highmark officials declined to reveal how much the giant Blue Cross Blue Shield affiliate intends to invest in the alliance. Some funding for care coordination mangers will be included for selected physician groups to enable physicians to spend more time with costly chronically ill patients such as diabetics.
"We're hoping to create a 'wow' factor for our patients," said Kaplan. "When they leave their doctor's office we what them to feel like they got what they needed, when they needed it, and at the right price."
Commercial accountable care organizations make strange bedfellows out of payers and providers. Accustomed to hardball contracting negotiations, payers and providers find the transition from adversary to partner an uneasy one. These tips can help.
Although the government version of the accountable care organization has certainly had some recent growing pains, commercial payers such as Aetna, Cigna, and UnitedHealthcare have been busy adapting the government model into a more flexible effort that appeals to a wide range of providers.
Commercial ACOs make strange bedfellows out of payers and providers. Accustomed to hardball contracting negotiations, payers and providers now find themselves joining forces to form and sustain ACOs.
Although there are hundreds of commercial ACOs forming cross the country, the transition from adversary to partner is not often an easy one.
Last month Premier Inc., the Charlotte-based healthcare alliance, hosted a press conference and presentation by two of its ACO collaborative participants—one just getting off the ground and one more experienced. Rob Slattery, president and CEO of Integrated Solutions Health Network in Johnson City, TN and Andy McCoy, vice president of revenue management for Minneapolis-based Fairview Health Services each offered some tricks of the ACO trade in terms of payer-provider partnerships.
They detailed the value of payers, who bring money, data, modeling, and benefits to ACO partnerships:
Big investment Slattery and McCoy each noted the significant costs involved in building the infrastructure necessary to transition to ACOs. The American Hospital Association places the cost at $1.7 million to $12 million to develop the infrastructure and resources needed, including information technology, care management programs, and patient-centered medical homes. Aetna, which is developing a national ACO network, has earmarked about $1 billion to help providers develop ACOs.
Claims data
ACOs need to manage claims data to identify and monitor key populations, especially individuals with chronic diseases. Payers have a gold mine of data to help providers manage care and the healthcare services being used.
Predictive modeling
Payers can provide the population health analytics critical to targeting services and establishing performance targets. This information is critical to being able to meet the patient quality and outcome standards that measure the value of care.
Value-based benefits
Payers can support benefit designs that encourage healthy living, such as smoking cessation. Although the value of wellness programs has been questioned, healthcare reform requirements are designed to shift the wellness focus from a marketing orientation to value and outcome-based programs, such as free preventive health screenings and reduced copayments for maintenance medications.
What are providers doing sustain a successful payer partnership? Here's a look at how Integrated Solutions Health Network and Fairview Health Services have taken the plunge:
1.Develop a vision To transform payer relationships and the delivery of healthcare requires taking the long view. ISHN is developing its ACO as part of Mountain States Health Alliance, a 13-hospital system based in Johnson City, TN. Mountain States, developed a 10-year strategy plan to meet operational cost objectives, build its technology infrastructure, and enhance relationships to support a value-based business model.
2.Align to the Triple Aim Mountain States uses a model that aligns aspects of the Triple Aim with measureable components. Affordability includes total cost of care, utilization, and pharmacy services; patient satisfaction includes access to care, safety, and customer service; health outcomes includes managing health risks, case managers, and living with illness. "This really is our guide is implementing our 10-year plan," explains Slattery.
3.Establish/redesign relationships with payer partners Shifting a payer relationship from volume (fee-for-service) to a value-based model is risky. Fairview Health Services, a seven-hospital system in Minneapolis, began small about 10 years ago. Its first risk contract was a shared risk Medicare Advantage contract with UCare, a non-profit health plan.
In 2009 Fairview began a commercial ACO contract with Medica, the second largest health plan in its market. Fairview Health joined the Pioneer ACO program in 2012. That same year it began setting up new relationships with health plans that involve limited network products.
Over the years, Fairview has expanded its payment models to include pay-for-performance with commercial payers and gain sharing with the Minnesota Medicaid program. Today it has more than 306,000 risk-based members that account for 60% of Fairview Health Services patient revenue
4.Get the information you need A successful payer-provider relationship requires the exchange of a lot of data. Unfortunately payers may have different levels of capabilities. McCoy explains that Fairview's payers have invested varying amounts of their resources into the creation of their analytic capabilities to help identify at-risk members and cost variations so we can "identify potential areas of improvement."
Fairview has begun to implement payer penalties for non-performance in providing timely data with enough actionable detail. "Payers may have different priorities we are beginning to build this penalty into our contracts."
5.Avoid overlapping duties For years health plans have performed some level of disease/care management. Providers are now taking on that function and as a result some overlapping may occur. McCoy says it is important to coordinate to make sure resources are used in the areas where "we'll have the most success impacting member care."
The payer-provider ACO partnership holds the promise of improving population health and lowering healthcare costs. It is a difficult proposition but both sides have developed insight into the systemic changes necessary to succeed. Sharing the information is part of the process.
Plus ACO, a partnership between Texas Health Resources and North Texas Specialty Physicians, has plans to leave the Pioneer ACO program by mid-August, but the two organizations say they are open to "remaining in the [Pioneer] ACO program if we can find an economically viable way to do so."
Confirmation that some Pioneer ACOs will leave the Center for Medicare & Medicaid Services' pilot program for accountable care organizations came Tuesday morning, ending weeks of speculation.
CMS revealed that seven of the nine participants will attempt to transition to the Medicare Shared Savings Program, while two are exiting the program entirely. It named all nine, but did distinguish between the ones that intend to transition to MSSP and the two that will drop out completely.
HealthLeaders Media has learned that while Plus ACO, a partnership between Texas Health Resources and North Texas Specialty Physicians, plans to leave the Pioneer ACO program by mid-August, the two organizations say they are open to "remaining in the [Pioneer] ACO program if we can find an economically viable way to do so," Wendell Watson, the THR director of public relations said in an e-mail exchange.
The health system and the IPA have requested a meeting with the Centers for Medicare & Medicaid Services to discuss options.
Plus ACO began with approximately 19,000 patients in the first year and grew to almost double that in the second year. It is on pace to save $10 million annually in the first two years of the Pioneer program, Watson says, but the ACO anticipated that with down-side risk in the third year it could be liable for a penalty of between $6 million and $9 million.
"Pioneer ACOs have the option to drop out of the program with no penalty at this point in time. We're at a decision point where we must opt-in or opt-out," Watson added.
Although Plus ACO will cease to exist, Texas Health Resources appears committed to ACOs. It has a commercial ACO with Aetna and is in talks with other commercial payers about ACO arrangements. In addition to Plus ACO, Albuquerque-based Presbyterian Healthcare Services has also confirmed its mid-August departure from the Pioneer ACO program.
In a press statement, Presbyterian Healthcare Services officials said that the integrated delivery system will focus its efforts on its accountable care model of managing the risk of its health plan members and in developing partnerships with employer groups. "The Pioneer ACO population of 12,000 was very small compared to our Medicare Advantage population of 36,400 and the nearly 300,000 lives we manage under full risk contracts."
Seven of the nine participants in CMS's pilot program for accountable care organizations are applying to transition to the Medicare Shared Savings Program, while two are abandoning the program completely.
Nine of the 32 Pioneer ACOs will not participate in third year of the Center for Medicare & Medicaid Services' pilot program for accountable care organizations, HealthLeaders Media has learned.
Seven of the nine are applying to transition to the Medicare Shared Savings Program, while two are abandoning the program completely, although CMS declined to identify which ACOs are leaving and which are simply shifting to the MSSP.
The nine departing ACOs are:
Prime Care Medical Network Inc., an IPA-based ACO serving San Bernadino and Riverside counties in California
University of Michigan Health System in Ann Arbor
Physician Health Partners LLC, a medical management company in Denver
Seton Health Alliance, a network of providers comprised in the 11-county Austin area
"Plus ACO," a partership between North Texas Specialty Physicians and Texas Health Resources
Healthcare Partners Nevada ACO LLC, a multispecialty medical group and IPA serving Clark and Nye counties in Nevada
Healthcare Partners California ACO LLC, a multispecialty medical group and IPA serving Los Angeles and Orange counties in California
JSA Care Partners LLC, a primary medical group and IPA serving the Orlando, Tampa and South Florida area.
Presbyterian Healthcare Services, an integrated delivery system serving the Albuquerque area
The ACOs had until close of business on July 15th to notify CMS of any status change in their Pioneer ACO participation.
The Pioneer program was developed as an alternative to the MSSP after organizations experienced with coordinating patient care and managing risk complained that the MSSP program was too stringent in its design.
The nine are departing the Pioneer ACO program prior to the third year of participation, however, which is when participants would be expected to transition away from fee-for-service payment to population-based payment and full risk arrangements.
According to CMS, however, 13 of the 32 Pioneer ACOs produced shared savings with CMS, generating a gross savings of $87.6 million in 2012. The Pioneers are also credited with saving nearly $33 million to the Medicare Trust Funds.
A house subcommittee will have another chance next week to amend a draft proposal to kill the sustainable growth rate formula. Without a "doc fix" in place, physicians who treat Medicare patients will face a 24.4% cut in reimbursement rates in 2014.
The House Energy & Commerce Committee's Subcommittee on Health is expected to mark-up its draft proposal to repeal and replace the sustainable growth rate formula on July 22 Capital Hill sources have told HealthLeaders Media.
The proposal calls for the SGR to be repealed and replaced with what the committee describes as "an improved fee-for-service system" with quality measures developed by providers and the Department of Health and Human Services.
Providers will have "the option of leaving the fee-for-service system and opt instead for new ways of delivering care," and receiving reimbursements, including accountable care organizations, patient centered medical homes, and bundled payments.
This is the fourth iteration of the House proposal, which was first developed in February. The committee released this latest version as a 42-page discussion draft on June 28 and asked stakeholders to review and respond by July 9. A spokesperson for the committee declined to release any information about the number of responses received or their contents.
Without the so-called "doc fix" in place, physicians who treat Medicare patients will face a 24.4% cut in their reimbursement rates in 2014.
Rep. Fred Upton (R-MI), who chairs the E&C and is credited with putting together the proposal, has let it be known that he wants it to go before the entire E&C Committee before Congress takes its annual August recess.
Capital Hill insiders do not expect the process to go quite that smoothly.
For one thing, the Republican House hopes to draw some Democratic blood by holding votes on repealing the employer and individual mandate provisions of the Affordable Care Act before the August recess. In addition, the E&C proposal isn't the only SGR repeal and replace legislation in the House.
Rep. Allyson Schwartz (D-PA) has already raised concerns about the E&C proposal. Her spokesperson, Greg Vadala, says the proposal doesn't do enough to reward quality over fee-for-service volume because the alternative payment model with its quality incentives is the "exception rather than the rule."
Schwartz has her own bipartisan SGR bill co-written with Rep. Joe Heck (R-NV). HR 574 (Medicare Physician Payment Innovation Act of 2013) has 34 co-sponsors. The bill has been stuck in committee since February, but Schwartz is hopeful that her approach, which includes a modified FFS element as a fall-back option, will gain traction. The bill includes a five-year period of payment stability that is popular with physicians.
Her pitch is that "she has a plan, laid out in legislative language, for how to get this done," says Vadala. Rep. Schwartz, a member of the powerful House Ways and Means Committee, also wants to "make sure that the priorities in her bill are part of the discussion," says Vadala.
John Williams, an attorney who specializes in government and public policy for Hall, Render, Killian, Heath & Lyman, an Indianapolis-based healthcare law firm, wrote in an e-mail exchange, "I don't think there is any way the House passes a stand-alone bill under regular order that isn't completely paid for because rank and file Republicans won't vote for it."
He added that anything adopted at the mark-up, such as funding cuts to the Affordable Care Act, will be "complete non-starters in the Senate."
While there is some expectation that an SGR repeal-and-replace bill will likely hit the House floor, the outlook is less optimistic on the Senate side.
Despite several months of hearings and stakeholder input, Senate Finance Committee, has yet to produce any SGR legislation. While there is some thought that Sen. Max Baucus (D-MT), the Finance Committee chair, is preoccupied with getting tax reform passed, the lack of action probably reflects the reality of identifying offsets (pay for) that are acceptable to Congress and the White House.
"A long-term [SGR] fix will need a significant [dollar] offset," says Christopher Condeluci, an attorney with law firm Venable in Washington, D.C. and a former tax counsel for the Senate Finance Committee. In May the Congressional Budget Office scored the 10-year repeal cost at $138 billion, which is almost a bargain basement rate compared to the $234 billion price tag for its 2012 score.
There are only two ways to generate offsets—increase revenue or reduce government spending—and these days in Washington it seems impossible to develop a consensus around either one. Without a consensus "you aren't going to be able to enact a long-term SGR fix" says Condeluci even though everyone seems to agree that a long-term fix is preferred to the annual band-aid fixes.
Williams expects any congressional action to go down to the wire on Dec. 31, as it did last year. That could mean that physicians are in for another rocky ride this fall.
The SGR formula was put in place as part of the Balanced Budget Act of 1997 to help control Medicare spending. It soon became apparent that significant cuts in physician reimbursements would be required to help reduce spending. Since 2003 Congress has routinely declined to make those cuts.
For their part, physicians are losing patience with the process. "All of us can look at this and say we've been here before. It's almost getting to the point of ridiculous. How much more can we talk? How much more new information do we need?" states Brad Flansbaum, DO, a hospitalist at Lenox Hill Hospital in New York City, and a former board member for the Society of Hospital Medicine. Congress knows that the "longer [it] waits, the more it's going to cost. I just don't know how much longer [physicians] can face the patch. We've seen it all before. We know what needs to be done."
Members of the House Ways and Means Committee Subcommittee on Health and witnesses spent more than two hours Tuesday debating the value of the employer mandate and the potential impact of its delay, at times testily.
The Obama administration continues to face the ire of Congress as questions about implications of the delay in the enforcement of the employer mandate have opened the door, for the 38th time, for the House to push for the complete repeal of the Patient Protection and Affordable Care Act.
In the first of what is expected to be several congressional hearings on the subject, the House Ways and Means Committee Subcommittee on Health met Wednesday to hear testimony about the anticipated impact of the delay from members of the business and healthcare policy communities.
The Obama administration unexpectedly announced last week that it would delay for one year a key provision of the PPACA which requires mid-sized and large employers to provide health insurance for their workers or pay a fine.
In his opening statement, Rep. Kevin Brady (R-TX), the subcommittee chair, quickly transitioned from what he termed the Treasury Department's "strangely-timed announcement… on an obscure Treasury blog site just two days before the 4th of July" to his support for the postponement of the individual mandate, and finally to a call for full repeal of PPACA.
Brady provided a grocery list of "delays and failures" of healthcare reform. "The CLASS Act proved unworkable and was abandoned. The onerous 1099 reporting mandate was overwhelmingly repealed. The exchanges promised for small businesses failed to be ready on time and were delayed. Significant parts of the law were found unconstitutional, 34 states have chosen not to build state exchanges, the technology-intensive data hub key to ObamaCare isn't ready, [and] the Navigator grants have not gone out to local communities. The list is growing, not shrinking as we get closer to October 1," which is the date for the implementation of the cornerstone of PPACA—the health insurance marketplaces.
Jim McDermott, (D-WA), the ranking committee member, reminded that committee that it is "our job to continue to shape and guide reform so that it best serves the American people… to focus on policy not politics. There's been a lot of noise from both sides of the aisle… but no one really knows what this shift means."
In a sharp rebuke, McDermott noted that "the irony of objecting to the delay of a program you have been trying to stop is no doubt lost on this room." That was a reference to HR 903, which would repeal provisions of PPACA that require employers with more than 50 full-time employees to provide health insurance coverage.
The five witnesses presented testimony and answer questions from the committee: Avik Roy, senior fellow at the Manhattan Institute, a think tank; James Capretta, fellow at the Ethics and Public Policy Center in Washington, DC; William Dennis, Jr., senior research fellow at the National Federation of Independent Business; Sean Falk, a business owner representing the International Franchise Association; and Timothy Jost, a professor at Washington and Lee University School of Law.
In a session that at times was testy, the witnesses and the committee members spent more than two hours debating the value of the employer mandate, focusing on the familiar themes that clearly resonated with many of the committee members: harm to low income workers, the negative effect on job growth, and the definition of affordability.
Roy noted that 97% of firms with 50 or more employees already offer health benefits and that the mandate seems like overkill to induce 3% of companies to offer healthcare insurance. He said the mandate "perversely incentivizes employers avoid hiring low-income workers" who might require subsidies to afford coverage and triggering a penalty for employers. He added that in lieu of paying the penalty, employers might turn to hiring "illegal immigrants, who are ineligible for subsidies."
Falk, who operates 12 franchised business units with more than 100 employees, including 43 full-time employees, said that as he looks at growing his business "the employer mandate…has an undeniable impact on my bottom line and is making me reconsider opening new locations." He added that he might consider reducing the hours of more employees from full-time to part-time to avoid the penalty.
An employer penalty of $2,000 for each full-time worker who receives subsidized insurance provides a "strong disincentive to for firms to higher workers from lower income households because they might become eligible for subsidies," stated Capretta. He said the news is full of stories about companies and local governments that are "racing to move as many workers as possible" to part-time status. "That is exactly what the American economy does not need… with the unemployment rate holding at 7.6%."
Jost countered that the penalty doesn't apply to the first 30 employees receiving a subsidy. "The discount was created to mitigate against potential disincentives to grow a business above 50 workers."
But Rep. Paul Ryan (R-WI) stated that employers are comparing the cost of the penalty versus the cost of offering insurance and he expects competition to force employers to dump a lot of employees on the exchanges.
Rep. Ron Kind (D-WI) responded that he expects competition to have the opposite effect. "They make a business calculation that it's good for [employee] recruitment and retention. And it's just the right thing to do."
Dennis of the NFIB noted that PPACA defines affordable coverage as less than 9.5% of household income. "No employer wants to ask employees about household income for legal, ethical, and human relations reasons."
Rep. Kind stated that 93% of the NFIB membership has fewer than 40 employees. "They wouldn't even be impacted by the employer mandate."
The committee ventured into a discussion of what other aspects of PPACA might also face a delay in implementation.
"The administration is in triage mode," said Jost. "They don't have the resources to implement all of the provisions on time. The way this law was intended to be implemented the states were going to take much of the responsibility." Since that hasn't happened, the administration has a bigger job on its hands.
"I think the administration is under a lot of pressure," added Jost. "I think they are trying to decide what needs to be done right now and what can wait a little bit. I think they are going to focus on what is absolutely essential?the individual premium tax credits, the individual mandate, and getting the exchanges up and running."
A surprise announcement from the White House puts a key provision of the healthcare reform law on hold, and leaves health plans tending to business while they wait for details.
The Obama administration set of some fireworks of its own last week, announcing unexpectedly on July 3 that there will be aone-year delay, until 2015, of a key provision of the Patient Protection and Affordable Care Act that requires mid-sized and large employers to provide health insurance for their workers or pay a fine.
Health insurers are uncertain how the delay will affect them, and await detailed guidance on the how reporting requirements will now be implemented. More information is expected this week according to the Treasury Department.
In the meantime, health insurers are going about their business. Here’s a round-up of health plan news since the Independence Day holiday:
Blue Cross Blue Shield Plan Administrative Costs Increased in 2012
The PPACA makes streamlining administrative costs a high priority for health plans. Administrative expenses of BCBS plans were 8.9% of premiums in 2012 and grew by 5.1% per member, according to the 2013 Sherlock Expense Evaluation Report or SEER.
The increase was reduced to 3.8% after excluding the effects of a product mix change that favored Medicare Advantage products. Blue plans reported median total administrative expenses of $29.25 per member per month.
Among the contributors to administrative cost growth: information systems were responsible for most of the mix-adjusted growth, though sales and marketing costs grew fastest. Finance and accounting, as well as corporate executive costs declined.
The report looked at 19 Blues plans serving 34.1 million members.
Aetna, UnitedHealth to Drop Individual Coverage in CA
The decisions will leave about 60,000 individuals looking for new coverage just as California’s health insurance exchange, Covered California, kicks into gear. Considering their small market shares, it is likely that both insurers decided it was too tough to make a buck in the individual market as healthcare reform requires coverage of pre-existing condition and removes coverage limits.
David Jones, commissioner of the state’s Department of Insurance is not amused. "…their departure means less choice, less competition, and more market consolidation by the remaining big three health insurers—Anthem Blue Cross, Blue Shield of California, and Kaiser—which means an increased likelihood of even higher prices from those health insurers downstream," he stated in a press release.
Jones added that a tax break available to their competitors may be contributing to the market change. “… The special tax break that California law gives to Anthem Blue Cross and Blue Shield of California… has allowed and continues to allow those two companies to avoid paying $100 million in state taxes a year. Aetna and United Healthcare don't get the special tax break… so they faced a major competitive disadvantage in California."
WellPoint, AAP Effort Leads to Pediatric CT Study
More than 25% of the children evaluated in emergency departments for headache received a CT scan, possibly exposing them to unnecessary radiation and increased cancer risks, according to study published in the July issue of Pediatrics. The study stemmed from efforts by WellPoint and the American Academy of Pediatrics to find out how practice patterns for treatment of pediatric headache align with practice guidelines.
CTs are often performed at the behest of parents even though providers often gain little clinically useful information from these imaging studies.
The American Academy of Neurology recommends MRIs as opposed to CT imaging for people with headache, a normal history and neurologic examination. "We found that AAN imaging guidelines were most often followed by neurologists when treating children, but not by other physicians," Dr. Alan Rosenberg, WellPoint’s vice president of medical and clinical pharmacy policy," said in a press release.
BCBS of Michigan Posts PCMH Savings
Blue Cross Blue Shield of Michigan has saved an estimated $155 million over the first three years of its patient-centered medical home program, according the Blues plan and University of Michigan researchers in a study published in the Health Services Research Journal.
In addition to the savings the PCMH increased quality scores by 3.5% and increased preventive care scores by 5.1%. The PCMH has an estimated one million members.
"This tells us that patients benefit from higher quality and improved preventive care even as physician practices are progressing toward full implementation of the PCMH model," Michael Paustian, PhD, lead author and manager, department of clinical epidemiology and biostatistics for BCBS of Michigan.
Wellmark BCBS Reserves Under Scrutiny in Iowa
Two Iowa state senators want to know why Wellmark Blue Cross & Blue Shield is holding $1.3 billion in reserves now that it no longer plans to participate in the state health insurance exchange. Sen. Jack Hatch (D) and Sen. Matt McCoy (D) have asked the Iowa Insurance Commissioner to investigate.
In a letter to the commissioner, the senators noted that the Iowa Insurance Department supported the reserve amount in 2011 in light of the demands of the federal Affordable Care Act and made note then of Wellmark’s anticipated participation in the state HIX.
“The company’s decision to decline participation in Iowa’s exchange removes a major component of the justification for the [sizeable] reserves," the letter states.
At least four of the 32 Pioneer ACOs are in the process of notifying their providers that they intend to shift to the Medicare Shared Savings Program, and up to five more could follow. "They've learned that they probably won't be successful, so they want to move into a no-risk environment," says one observer.
Map of Pioneer ACO models
At least four accountable care organizations are in the process of notifying their providers that they intend to move out of the Center for Medicare & Medicaid Services' Pioneer ACO program and into the Medicare Shared Savings Program.
As many as nine of the 32 Pioneer ACOs may eventually shift, but only four are known to be actively pursuing a change now. They have until July 15 to notify CMS of their intentions.
CMS declined to identify the departing Pioneer ACOs, but released this statement: "Each of these organizations made its decision based on its particular business priorities and concerns. We're encouraged that these systems want to continue in these programs that promote better care at lower costs. We fully anticipated that as these programs get up and running, some systems would shift between models."
The Pioneer program was developed as an alternative to the MSSP after organizations experienced with coordinating patient care and managing risk complained that the MSSP program was too stringent in its design.
The initial commitment to the Pioneer program is three years. The program is in its second year. By design, the first two years of the Pioneer model are a shared savings payment arrangement. In the third year, according to the CMS program description, "those organizations that have shown a certain minimum amount of savings over the first two years will be eligible to make a transition away from fee-for-service payment to population-based payment and full risk arrangements."
That means the Pioneer ACOs are expected to accept downside risk in year three.
The timing of these departures may provide some clue as to why the ACOs are taking this step. Nate Kaufman, managing director of Kaufman Strategic Advisors, a San Diego-based consulting firm that works with several ACO clients, bluntly assessed the situation. "They've learned that they probably won't be successful, so they want to move into a no-risk environment."
Describing the ACO program as "fundamentally flawed," Kaufman attributes the problems to a lack of control over where patients seek care, which can limit savings. Two of his clients participate in the ACO program. When they received Medicare data about the patient attributed to them for savings calculations they noticed that 45% of the patients had sought care from non-ACO providers.
Trouble has been brewing within the Pioneer program for months. In a Feb. 25 letter to Richard Gilfillan, MD, director of the CMS Innovation Center, the 32 Pioneers sent expressed their displeasure with 2013 quality benchmarks for the Pioneer ACO initiatives, particularly the flat percentage benchmarks proposed for 19 of the 31 measures, which according to the letter "are higher than the standards set in commercial contracts and in Medicaid."
Bonuses would be based on the ability to meet the benchmarks this year, and the letter requested that CMS hold "Pioneers in reporting-only status for performance year 2013." It closed with a now-ominous request that CMS respond by early April so "we can make informed decisions regarding our ongoing participation."
In a response letter dated April 23, CMS said it designated the flat percentage benchmarks because of "a lack of available national Medicare FFS data to design empirically based benchmarks." With the timely data submissions of more than 200 organizations through the Physician Quality Reporting System and the ACO Group Practice Reporting Option, CMS would use that information to "empirically set quality benchmarks," which would still apply for 2013, the letter stated.
Cost and forgetfulness play a large role in non-adherence, but even when medications are supplied at no cost, adherence hovers around only 50%. Forging personal connections with pharmacy staff can help, one insurer says.
A "spoonful of sugar helps the medicine go down," Mary Poppins, the quintessentially perky nanny,explains in song and dance to her young charges.
If only it were that simple to get patient to follow prescription orders.
A report card [PDF] released last week by the National Community Pharmacists Association places medication adherence for individuals with chronic conditions at the C+ level, with one in seven receiving a failing report card grade.
Skipping medicine doses and failing to get prescription refills are among the patient behaviors that threaten patient health, especially among individuals with chronic conditions. The NCPA report estimates that medication non-adherence adds about $290 billion to healthcare costs each year.
There is no shortage of interest among industry stakeholders in resolving this issue, especially as the delivery of healthcare services becomes more interdependent and accountability for patient outcomes extends all along the care continuum. A breakdown anywhere along that path can take money out of everyone's pocket.
Unfortunately, there is no one-size-fits-all solution to medication non-adherence. That's mostly because there's "not just one thing that keeps a group of patients or even one patient from taking their medications as prescribed," says Edmund Pazella, MD, national medical director for pharmacy policy and strategy for the Hartford, CT-based insurer, Aetna.
While cost or forgetfulness often play a role in non-adherence, Pazella clicks off a laundry list of additional reasons, including drug side effects, patient concerns about the number of pills they take, and worries about drug interactions.
"It's a multifactorial problem that results in less than optimal outcomes for our members. We're very concerned about it," he says.
What's particularly frustrating, says Pazella, is that some of the areas where patients are most at risk, such as the advancement of cardiac disease, cardiovascular risk factors, hypertension, and high cholesterol, are each treated primarily with medications. Yet adherence is low.
In considering the barriers to taking medications as prescribed, Pazella and his team looked at the effect of different settings on adherence, as well as why certain members are more at-risk for poor adherence than other members.
From there, it's a matter of "identifying a variety of solutions to the problem to find the combination of solutions that work best."
That is a tall order.
A few years ago the New England Journal of Medicine published a study about Aetna's efforts to improve medication adherence following a heart attack. Aetna provided the medications at no cost rather than requiring a copayment. Pazella says the results were promising. The patients taking their medications as prescribed had better outcomes, their costs were lower, and they didn't return to the hospital.
Still, giving the medications away only moved the adherence needle from 42% to 49%.
"These patients had had a heart attack and even with giving them the meds for free we still couldn't get adherence to more than 50%," says Pazella.
Combining free medications with counseling by a pharmacist has helped move the needle a bit further. Pazella notes that pharmacists are on the front line of patient engagement and in the perfect position to help with adherence in terms of explaining the purpose of medications, how to take them, and the importance of staying on them.
According to the NCPA report card, a personal connection with a pharmacist or pharmacy staff is a leading indicator of medication adherence "They can answer patient questions about drug safety, interactions between multiple medications, and anything that might prevent a patient from taking their medications on a regular basis," notes Pazella.
Aetna also stresses medication adherence in a follow-up program for patients who have been prescribed an anti-depressant. A study from CVS Caremark released last week identifies patients with depression as having the lowest medication adherence rates [PDF].
Aetna's case management program for patients with chronic diseases also includes an adherence component where the nurses administer a short questionnaire to identify patients who may need additional attention to help them with adherence. That connection is very important.
"Generally we don't see compliance for adherence for any chronic disease where there is no intervention for more than 60% of the time after the first year," says Pazella.
While the program results are encouraging, Pazella admits that improvement in adherence is often gradual. "We see a 10% improvement here, a 3% improvement there, and a 5% improvement somewhere else. But, it does begin to add up."
