implementing health care reform: bending the cost...
TRANSCRIPT
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Wednesday, November 30, 2011 10:00 AM to 12:30 PM
CALIFORNIA STATE CAPITOL- ROOM 126 SACRAMENTO, CALIFORNIA
AGENDA
10:00 am Welcome and Introductions: Gilbert Ojeda, Director, California Program on Access to Care (CPAC), UC Berkeley School of Public Health
10:05 am Keynote Presenter: Brent Barnhart, Esq. , Director, Department of Managed Health Care “America Pays More, But Americans Get Far Too Little”
Presentations:
10:30 am Richard Scheffler, PhD, Professor and Director, UC Berkeley, Nicholas Petris Center “Efficacy of Health Plan Rate Regulation in Selected States”
10:50 am Peter Boland, PhD, Managing Partner, Polakoff-Boland
“ACOs and Other Potential Health Delivery System Reforms and Their Impact on Health Care Cost Containment”
11:15 am Marge Ginsburg, Executive Director, Center for Healthcare Decisions “Value Assessment, Consumer Choice and Health Care Cost Containment”
11:35 am Ramon Castellblanch, PhD, Associate Professor, San Francisco State University, Health Education, “Approaches across the US to Containing Costs of
Pharmaceuticals”
Reactor Panel:
12:00 noon Beth Capell, Health Access Albert Lowey-Ball, Health Economics and Medicaid Advisor, CPAC
12:20 pm Q & A
12:30 pm Adjournment
Special Thanks to Albert Lowey-Ball for coordination of this event. Note also: Special assistance from the Office of Assemblyman Gil Cedillo in making arrangements for use of the space in the Capitol
California Program on Access to Care UC Berkeley School of Public Health
Implementing Health Care Reform: Bending the Cost Curve
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UC Berkeley School of Public HealthImplementing ACA: Bending the Cost Curve
Cost Containment in Health Care Reform
November 30, 2011
Brent Barnhart, DirectorCalifornia Department of Managed Health Care
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The Cost of Care in the U.S.
According to a January 10, 2010 National Geographic article by Michelle Andrews:
“ The United States spends more on medical care per person than any country, yet life expectancy is shorter than in most other developed nations and many developing ones.”
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The Magnitude of the Disparity
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Questions?Help Center
1-888-466-2219
Websitewww.dmhc.ca.gov
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Health Insurance Premium Rate Review Regulation:
Case Studies to Inform California
Richard M. Scheffler, Ph.D.Distinguished Professor of Health Economics and Public Policy
School of Public Health and Richard & Rhoda Goldman School of Public PolicyDirector, Nicholas C. Petris Center on Health Care Markets and Consumer Welfare
School of Public HealthUniversity of California, Berkeley
Brent D. Fulton, Ph.D.Assistant Adjunct Professor of Health Economics
Nicholas C. Petris Center on Health Care Markets and Consumer WelfareSchool of Public Health, University of California, Berkeley
California Program on Access to CareCapitol Briefing
Sacramento, CaliforniaNovember 30, 2011
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Overview
• Selected facts on California health insurance premiums
• National Perspective• Study Objectives• Minnesota• Massachusetts• California
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Health insurance premiums have risen sharply in California since 2003
2003 2010 ChangeFamily premium $10,774 $13,819 28% % of median household income 16% 23% 46%Source: Schoen et al. (2011), group market (private sector employers)Premiums stated in 2010 dollars.
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Source: Schoen et al. (2011) Commonwealth Fund
Health insurance is becoming less affordable nationwide
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More than half of the states have prior approval authority for
health insurance rates
• File and use– 14 states in individual market– 20 states in small group market
• Prior approval authority– 34 states in individual market– 29 states in small group market
Source: Corlette & Lundy (2010)
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Affordable Care Act’s Rate Review
• Annual review of rate increases of 10% or more– akin to file and use
• At least 80% medical loss ratio in individual and small group markets, and 85% in large group market
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Overview
• Selected facts on California health insurance premiums
• National Perspective• Study Objectives• Minnesota• Massachusetts• California
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Study Objectives
• Identify existing evidence on the impact of rate review regulation on premiums
• Study Minnesota’s and Massachusetts’s rate review
• Report approximate costs to conduct rate review
• Identify lessons for California
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Study Methods
• Reviewed literature, legislation, regulatory bulletins
• Interviewed key informants in Minnesota and Massachusetts – Regulators– Health carrier actuaries and executives
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Minnesota’s Rate Review Regulation
• Prior approval authority in individual and small group markets
• Minnesota Department of Health contracts with Department of Commerce to review HMO rate filings
• Major carriers operate as non-profits
Regulator Health Plan TypeMinnesota Department of Health HMOsDepartment of Commerce(Office of Insurance Commissioner)
Health insurance carriers and Blue Cross and Blue Shield of Minnesota
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Key Rate Review Criteria in Minnesota
• Rate must be reasonable in relation to benefits
• Minimum medical loss ratio is 72% in the individual market, and is 82% in the small group market
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Key Findings in Minnesota
• Carriers and the Department of Commerce have a working relationship where expectations are fairly well known– actuarial review, minimum MLR, and
premium restrictions are well understood by both parties
• Over 15 years of experience reviewing and approving rates
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Minnesota’s Costs
• Department of Commerce– $81,000 per year
• Over 15 years of experience• Filing requirements are relatively clear• Most carriers are Minnesota-only carriers• Does not review large group market
• Minnesota carriers– 1 full-time-equivalent person for approximately 5-6
weeks per year per carrier
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Massachusetts Context
• Major carriers operate as non-profits
• 1976: prior review and disapproval authority passed– not fully implemented
• 2006: health reform passed
• 2007-2009: high rate increases– Provider market power (Coakley, 2010,
2011)
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Massachusetts Exercises Prior Approval Authority
• February 2010: emergency regulation issued requiring carriers to:– File rate increases 30 days prior to their
effective date– Include more detailed actuarial information
to justify the rate increase– Justify why provider reimbursement rates
differed• April 1, 2010 filings
– 235 of 274 filings were not approved
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Administrative Hearing(June 2010)
• Administrative Hearing Officers reversed disapproval of Harvard Pilgrim Health Care, based on noting that provider rates may differ
• Almost all remaining carriers reached settlements with the DOI
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Rate Review Criteria in Massachusetts
• August 2010: Chapter 288 of the Acts of 2010 passed. Rates will be presumptively disapproved unless:– MLR at least 88% in 2011 and 90% in 2012– Administrative-expense increase to not exceed the New
England medical CPI– Contributions to surplus to not exceed 1.9%
• If carrier meets above criteria, DOI can still disapprove rate, by considering: – Reasonableness of the rate in relation to the benefits
provided– Whether rate increase is based on unreasonable increases
in the rates paid to providers
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Key Findings in Massachusetts
• Carriers and DOI’s working relationship is still in transition– Prior approval authority has been
exercised for only 1.5 years– Presumptive disapproval criteria are
objective and clear, but additional criteria are less objective and can change
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Massachusetts's Costs to Prepare and Review Rates
• Department of Insurance’s Health Care Access Bureau – $300,000 per year
• $100,000 for DOI staff• $200,000 for actuarial consultants
• Massachusetts carriers– 1 full-time-equivalent person for
approximately 6 months per year per carrier
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Overview
• Selected facts on California health insurance premiums
• National Perspective• Study Objectives• Minnesota• Massachusetts• California
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California is adual regulatory state
• Department of Managed Health Care regulates health care service plans (HMOs and some PPOs)– 21.6 million enrollees
• California Department of Insurance regulates health insurance carriers – 2.4 million enrollees
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California’s current rate review authority
• File and use• Senate Bill 1163 passed in 2010
– Rate increases must be reviewed and certified by an independent actuary
– Rate increases are posted on Internet• Office of Administrative Law granted CDI’s
emergency request to require at least an 80% MLR from carriers in individual market, effective January 24, 2011. Expires January 19, 2012 (but has been extended twice).
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AB 52--Health Care Coverage: Rate Approval
• DMHC and CDI would have prior approval authority• Prohibit DMHC and CDI from approving any rate that
was found to be “excessive, inadequate, or unfairly discriminatory”
• Applied to individual, small group, and large group markets
• The California Department of Finance estimated the annual costs of AB 52 would be $27.5 million for 181 additional staff for DMHC and CDI, plus a one-time cost of $30.8 million (source: Hill, 2011)
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Lessons from Minnesota and Massachusetts
• Establish clear and objective rate review criteria that are actuarially based
• Design prior approval legislation to correct market failures in the health insurance industry, realizing other legislation and regulations may be needed to correct market failures in the health care sector more broadly
• Employ sufficient staff and consultants with actuarial expertise– California’s estimated cost to review and approve rates
appear to be much higher than Minnesota’s and Massachusetts’s costs
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Potential advantages of prior approval authority
• No empirical study has estimated the impact of prior approval authority on health insurance premiums
• Prior approval authority could potentially reduce health insurance premiums– particularly where carriers have market power
• Prior approval authority would give regulators more information about how the market works, and provide opportunities to improve it– Rates would be better understood by consumers
• If premium increases are moderated, insurance would become more affordable to more individuals and families
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Potential disadvantages of prior approval authority
• Regulation may reduce competition if carriers exit or do not enter the market
• Carriers may be able to circumvent regulation by reducing quality in difficult-to-measure dimensions (e.g., customer service, claims processing, provider network comprehensiveness and quality)
• Regulation does not address premium cost growth due to technology, provider market power, and a fee-for-service payment system
• Cost of enforcing regulation is ultimately borne by consumers
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Questions
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Publications Cited• Coakley M. Report on Examination of Health Care
Cost Trends and Cost Drivers Pursuant to G.L.C. 118G, §6½(B). Massachusetts Office of Attorney General. 2011.
• Coakley M. Report on Examination of Health Care Cost Trends and Cost Drivers Pursuant to G.L.C. 118G, §6½(B): Preliminary Report. Massachusetts Office of Attorney General. 2010.
• Corlette S, Lundy J. Rate Review: Spotlight on State Efforts to Make Health Insurance More Affordable. Menlo Park: Kaiser Family Foundation, 2010.
• Hill M. Department of Finance Bill Analysis, AB 52. Health Care Coverage: Rate Approval. Sacramento, CA: California Department of Finance, 2011.
• Schoen C, Fryer AK, Collins SR, Radley DC. State Trends in Premiums and Deductibles, 2003–2010: The Need for Action to Address Rising Costs. New York, NY: The Commmonwealth Fund, 2011.
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Nicholas C. Petris Center• Formed in 1999 in the School of Public Health at UC
Berkeley• Focuses on doing research in health care markets
and consumer welfare, particularly low-income populations
• Current research areas– Affordable Care Act, Accountable Care Organizations– Health insurance markets and rate regulation– Health care workforce– Social capital and health– Mental health
• www.petris.org
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Sample of Petris Center’s Research on Health Insurance Markets
• Fulton BD, Dow WH. Is California Different? State-Specific Risk Adjustment Needs under Health Reform. California Journal of Politics & Policy (in press).
• Kapur K, Karaca-Mandic P, Gates SM, Fulton BD. Do small group health insurance regulations influence small business size? Journal of Risk and Insurance (in press); published online 6 June 2011.
• Dow WH, Fulton BD, Baicker K. Reinsurance for high health costs: benefits, limitations, and alternatives. Forum for Health Economics & Policy 13(2); 2010.
• Scheffler, RM. Is There a Doctor in the House? Market Signals and Tomorrow’s Supply of Doctors. Palo Alto, Calif.: Stanford University Press, 2008.
• Schneider JE, Li P, Klepser DG, Peterson NA, Brown TT, Scheffler RM. The effect of physician and health plan market concentration on prices in commercial health insurance markets. International Journal of Health Care Finance and Economics 8; 2008: 13-26.
• Foreman SE, Wilson JA, Scheffler RM. Monopoly, monopsony, and contestability in health insurance: a study of Blue Cross plans. Economic Inquiry 34;1996: 662-677.
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November 30, 2011
Peter Boland, PhD
Implementing ACA: Bending the Cost Curve
“How To Reduce Costs Through ACOs”
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Unsupportable Cost Trends
The average health insurance premium for a family of four is expected
to be $28,500 in 2019
Source: Based on California Health Benefits Survey, California HealthCare Foundation, December 20102
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Shared Savings Model
Source: The Dartmouth Institute for Health Policy & Clinical Practice, 2010
How do “shared savings” models work?Initial shared savings derived from spending below benchmarks
Spending
Time
Spending benchmark
Shared savings
Actual spending
Projected spending
ACO launch
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Reimbursement Risk Continuum
No risk
Payment
Risk
Fee for service/ shared savings
Bundled payment
Episode of care
Partial capitation
Full capitation
CapitationFee for Service
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Core Accountable Care Objectives
Reduce costs and increase accountability
Improve clinical and service quality
Link payment to performance
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Critical Accountable Care Success Factors
Provider/payer collaboration on payment incentives
Financial and operational transparency
Emphasis on value and outcomes vs. work units and procedures
Payment models linked to clinical and financial management
Success Reduce costs and increase accountability
Improve clinicaland servicequality
Link paymentto performance
Real cost-reduction targets
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Going Forward
7 Critical Imperatives Driving costs down continuously Ongoing quality improvement Linking pay to performance Transitioning from volume to value Partnering with former adversaries Transforming physician and hospital culture Managing behavioral and organizational change
Rules of the game have
fundamentally changed
There is no going back
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Value Defined
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Value =
Cost is intrinsic to quality rather than separate from it
Total money spent
Health outcomes
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Purchaser Healthcare Strategy
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Goal1. Improve workforce health
and productivity2. Reduce trend and spend3. Create a culture of participant
responsibility and accountability
StrategyMotivate behavioral
change through benefits design, financial incentives
and communications
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Purchaser Healthcare Strategy
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• Behavioral economics • Segmented messaging • Participant incentives and steerage
EducateEducate MotivateMotivate Achieve ResultsAchieve Results
10
Carrot and stick
Carrot over stick
Required programs
Optional programs
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Pacific Business Group on Health: Employer Expectations
Total cost of care target: CPI + 1%
Outcomes-focused (functional status, appropriateness)• Provider accountability• Quality-based payment, not quantity Patient-centered (patient experience)
• Consumer information • Shared decision making• Self-care/self-management support Affordability
• Payment reform (shared risk)• Value-based benefit design• Reference pricing• High-performance network options• Healthcare delivery redesign
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Provider/Payer Collaboration
Revenue growth
Cost reduction
Clinical resource management
Market leadership
Provider alignment
Clinical outcomes
Performance improvement
Provider
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Provider/Payer Collaboration
Revenue growth
Cost reduction
Clinical resource management
Market leadership
Provider alignment
Clinical outcomes
Performance improvement
Data analytics
Benefits design
Contracting flexibility
Payment incentives
ProviderPayer
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Performance-based payment
Financial risk management
Clinical resource management
Quality improvement/clinical integration
Multiyear provider partnership contracting
Population management
Internal/external partnership management
Information technology/ Infrastructure
Patient engagement
Physician alignment
Leadership
Legal structure/Governance
Care continuum coordination
Accountable Care Developmental Competencies
Change management
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Key Contracting Elements
15 15
Covered lives • Demographics• PCP attribution
Covered services• Facility• Professional• Ancillary• Carve outs
Performance metrics
• Cost/efficiency• Quality• Productivity• Patient engagement
Provider network • Adequacy (member location)• Alignment (culture, financial, quality)
Provider rates• Facility• Professional• Gain/risk sharing• Quality
Liability coverage • Stop loss• Reinsurance
Data reports
Technology resources
Communication process
Sales/marketing plan
Problem-resolution process
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Representative Purchaser Measures
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Diabetes, Obesity CHF, CAD, Hypertension Depression Asthma, COPD Cancer Low Back Headache
High Priority ConditionsHigh Priority Conditions
Reduce A1C >9 to <10% of total Hypertension control to 70% of diagnosed
patients Lower hospital admissions to 75% of baseline Reduce ER visits to 25% of baseline Lower ALOS to 70% of national average Reduce readmissions to 50% of national
average Reduce absenteeism for daytime visits by 33%
Outcome TargetsOutcome Targets
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Candidate Condition: Hypertension
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Medicare Star/HEDIS Metrics Candidate Clinical Metrics Candidate Cost MetricsPercent of hypertensive patients diagnosed with blood pressure controlled (<140/90 mmHg)
>65% of members 18–85 years of age who had a diagnosis of hypertension and whose BP was adequately controlled (<140/90)
Generic utilization rate > 80%
Bonus: physicians get .05% bonus for each measure attained, calculated on pmpm value of panel not volume
DX admissions reduced:5%-15% savings share15%-30% savings share25%-40% saving share
Savings =average admission cost intervention year compared to baseline year
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Candidate Condition: Cardiovascular
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Medicare Star/HEDIS Metrics Candidate Clinical Metrics Candidate Cost MetricsPercentage of members who had LDL-C test performed during the measurement year
Percentage of diabetic patients with lipids controlled LDL-C < 100 Mg/Dl
>85% of members age 18-75 with ischemic vascular disease, AMI, coronary bypass graft (CABG) or percutaneous transluminal coronary angioplasty (PTCA) had LDL-C test performed during the measurement year
>60% of diabetic members have a most recent LDL-C level of 100 or less
Bonus: physicians get 0.05% bonus for each measure attained, calculated on pmpm value of panel not volume
Hospital admissions related to DX are less than 75% of the prior period.
Emergency room visits related to diagnosis are less than 80% of the prior period
Savings share •DX admissions/ER visits reduced•5%-15% savings share•15%-30% savings share•25%-40% saving share
Savings = average admission cost intervention year compared to baseline year
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Candidate Condition: Diabetes
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Medicare Star/HEDIS Metrics Candidate Clinical Metrics Candidate Cost MetricsPercentage of members who had a retinal or dilated eye exam
Percentage of diabeticmembers who had blood sugar controlled
Percentage of diabetic members who had a urine microalbumin test during the measurement year
>65% of members with diabetes who had an eye exam to check for damage from diabetes during the year
Greater than 80% of diabetic members have most recent HbA1c level is < 9
Bonus: physicians get .05% bonus for each measure attained, calculated on pmpmvalue of panel not volume
DX admissions reduced:• 5%-15% savings share• 15%-30% savings share• 25%-40% saving share
Savings = average admission cost intervention year compared to baseline year
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Medical Group and Hospital Imperatives
Challenge/opportunity Resource focusManage risk and revenue better
Risk-based reimbursement Risk analysis, distribution formulas
Unit cost reduction Care redesign/economic model redesign
Manage across care continuum better
Care coordination IP, OP, ambulatory, home, LTC
Pre/post-discharge planning Patient monitoring
Manage clinical information exchange better
Real-time data availability Multiple care settings, providers
Point-of-care access User requirements
Managed quality reporting better
Meaningful use EHR stages 1-3
PQRI measures Dashboard, ad hoc reporting, bonus metrics
Manage patient engagement better
Personalized treatment/decision support
Outreach, coaching
Real-time lifestyle support Online, mobile applications, social media
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Office Hospital Long-termcare
Physicians: “The Power of the Pen”
Make treatmentdecisions
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What Do Physicians Care Most About?
1
2
3
4
5
6
7
Income
Practice stability
Physician-patient relationship
Office administration
Professional autonomy
Work-life balance
Quality patient care
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Compensation
Telehealth
Capital
TechnologyInfrastructure
Mentoring/Coaching
FinancialRelationship
PatientInteraction
QualityInfrastructure
Leadership
Governance
Team-BasedCare
Education
PhysicianAlignment
Leadership roles Financial incentives
Decision supportEducation
Capital
Physician Alignment Contributors
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Physician Alignment ElementsGovernanceStrategyPolicies/ProceduresOperational oversightCompensation committeeLeadershipBoard membershipDirectorshipsService line co-managementFinancial RelationshipManagement contractsJoint venturesEmploymentQuality InfrastructureEvidence-based protocolsOperational benchmarksBest practicesPatient experience feedbackTeam-based careCare coordinationClinical integration
CompensationDirectorshipsOn-callCognitive timeCare coordinationDisease management delegationPerformance-linkedRisk corridorsEmail and eVisitsGroup visits/ClassesPatient communication (digital, mobile)Web patient educationTechnology InfrastructureClinical decision supportInteroperable data systemsPerformance improvement toolsPredictive modelingHealth status indicatorsCapitalInformation technologyEquipment and office system upgrade
EducationEMR functionalityEvidence-based medicineData analysis/InterpretationQuality indicatorsHealth reform reimbursement modelsTeam-based trainingCultural competencyMentoring/CoachingOutside expertsBest practicesPractice variationPerformance improvementPatient InteractionEmail/MonitoringEducation/InformationCare plan adherenceSelf managementTelehealthRemote monitoringMobile applications
Rx Change management skills
Organization cultural transformation
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Change Management Model
Payer contract prerequisites
Hospitals Medical groups
Performance management benchmarks
Financial objectives
Quality metrics
Technology capability
Alignment factors
Change management targets
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California Payer-Provider Medicare ACOs
Lessons learned
HealthCare Partners Medical Group
Care management at each organization must be integrated to focus on high-cost patients
Silos in each organization must be broken down
Anthem/ Wellpoint
Start with FFS, then partial capitation and full capitation
Delegate UM, CM and DM to medical groups with care management fee (transparent data)
Monarch HealthCare Medical Group
Amount of resources and commitment required over 5 years should not be underestimated
Providers must get over their bias about payer financing, profitability and compensation
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Multipartner ACO
Lessons learned
Catholic Healthcare West
Medical groups, hospitals and payer must all work together - not two versus one
Understand each party’s issues, respect their vulnerabilities and solve them
Blue Shield
Health plans must be transparent about pricing to build trust with providers
Clinical and financial integration is the crux of collaboration between payers and providers
Hill Physicians
Each partner has critical clinical and utilization data; transparency is key
Four organization’s divergent cultures must work hand-in-glove
CalPERS
Zero trend in 2010 (same benefit structure) Bed days down 15%; readmissions down 35%;
ER admissions down 7.6%; ALOS down 0.72 days
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Commercial ACO: Combined Bottom Line
28 28
Purchaser Shared risk
Networkservices Providers
Shared risk
Payer
Patients
Shared savings
Premium cap Year 1
Blue Shield of CaliforniaNet Value Plan (no benefit changes)
Proportional distribution among hospitals, physician, health plan
Catholic Healthcare West hospitals (4)Hill Physicians Medical Group (520)
Care coordinationPre- and post-discharge planning
Population management
$15.5 million cost reduction Year 1
Lower out-of-pocket costs and contributions (payroll deductions)
Lower costs/contributionsfor purchasers
CalPERS Sacramento region42,000 enrollees
Combined bottom lineReadmissions down 22%
Bed days down 15%ER admissions down 8%
Combined bottom lineReadmissions down 22%
Bed days down 15%ER admissions down 8%
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Provider/Payer Care Coordination Management
Collaborate across patient conditions, services and care settings
Share information across disciplines and systems
Standardize process across care continuum
Design performance incentives to reward coordination
Engage physicians as active partners
Personalize information and education
Design incentives for adherence to care plan
Monitor and reinforce adherence through different media
Incorporate patient values in decision-making process
Reward self-management
Provider/Payer Focus
Patient-centered Focus
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The New Normal
Reduce admissions/readmissions
Reduce inpatient fee for service
Eliminate payment for preventable events
Link payment to performance
Pay for care coordination
Pay for episodes of care vs. procedures or volume
Pay for quality/value
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Marge Ginsburg
Bending the cost curve:Value assessment and consumer choice
CPAC conferenceNovember 30, 2011
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Bringing the public’s informed voice to healthcare policy
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Civic engagement?
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Public deliberationon healthcare policy
• Unresolved tension• Values‐based: what ought to be done• Components: facts, differing perspectives, reason‐giving, debate, common ground
• Seeks a societal perspective
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Value assessment and consumer choice
• Making healthcare decisions based on quality and cost.–Why stakeholders are encouraging consumers to consider value
–How consumers view value concepts– The challenges– The 800 lb. gorilla and the citizen voice
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Some curve-bending ideas• ACOs• Bundled payments • Chronic care management• Medical homes• Value‐based insurance design• Patient preference decision tools
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Can or should consumers make value‐based decisions?
• Choosing health plans• Choosing physicians• Choosing hospitals• Choosing medications• Choosing medical treatments
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Talking a different language
• Changes in Health Care Financing & Organization. Public Perspectives on Health Delivery System Reforms. 2009. (http://www.hcfo.net/pdf/report0609.pdf)
• The Permanente Journal. From Ours Lips To Whose Ears? Consumer Reaction to Our Current Health Care Dialect. Winter 2009/Vol. 13 No. 1 (http://www.kpihp.org/publications/docs/dialect_permjournal.pdf)
• Taking about health care payment reform with U.S. consumers. April 2011 RWJ Foundation.
• Evidence That Consumers Are Skeptical About Evidence‐Based Health Care. K Carman et al, HEALTH AFFAIRS 29, NO. 7 (2010): 1400–1406
• Deloitte Center for Health Solutions. 2008 Survey of Health Care Consumers. (http://www.deloitte.com/assets/Dcom‐UnitedStates/Local%20Assets/Documents/us_chs_ConsumerSurveyExecutiveSummary_200208.pdf)
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What is most important?Citizens Health Care Working Group/Transition Team
• Providers who communicate well: 5%• Quality of health services: 10%• Choosing a personal physician: 23%• Keeping down cost of premiums/OOP:
most of the others
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Responses to policy wonk terminology
Guidelines: restrictions, limited, driven by costEBM: as opposed to what? cookie‐cutter approachBest practices: bureaucratic, meaning unclear Value: associated with lower cost, implied inferior care Quality care: the relationship with their physician
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The challenges
1. Discussing the cost of care with patients is verboten. Yet we expect patients to make ‘value‐based’ decisions.
2. Patients trust their physicians. If the physician is the source of ‘low‐value’ care, getting patients to recognize this is difficult.
3. Stories trump science. 4. Most healthcare ‘marketing’ messages for consumers is
contrary to evidence‐based, high‐value healthcare.
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Value assessment and consumer choicecitizen
1. The expertise of the patient2. The expertise of the consumer3. The expertise of the physician4. The expertise of researchers 5. The expertise of the ‘societal voice’: Common Cents
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Ramón Castellblanch, Associate Professor Health Education, San Francisco State
California Program on Access to Care Briefing November 30, 2011
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Outline
Academic Detailing Generic Substitution 340B Partnerships
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Problem: Industry Detailing Drug industry spent at least $12 billion nationally on detailing in 2008
Industry detailing can promote unsafe and ineffective prescribing, e.g. Vioxx
Industry detailing can lead to unnecessary drug costs Industry detailing can lead to unnecessary costs of treating complications
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Solution: Academic Detailing Develops independent information on safety and effectiveness of drugs
Trains health care professionals to act as prescriber educators
Uses visits to prescribers to present unbiased information on targeted conditions
Supported by Agency for Healthcare Research and Quality, U.S. Dept. of Health & Human Services
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Academic Detailing CaseNY Prescriber Education Program
Started 2008 Aimed at Medicaid spending Based at SUNY Buffalo School of Pharmacy Targets high cost drugs Targets over‐prescribers Supplements visits with other media
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NYPEP Targeted High Price DrugSynargis
2008 practice: Synargis prescribed in summer and for children under 2
Evidence: prescribe in winter, prescribe for children over 2 years of age
NYPEP prescriber educators met FQHC physicians Decreased prescribing in summer and for children under 2
$21 million saved in first year
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Academic Detailing in California
Widely practiced at Kaiser Permanente National Resource Center on Academic Detailing working in California
Health Plan of San Joaquin – targeting prescribing for diabetes
SCIF – targeting prescribing of pain‐killers Cal PERS – NaRCAD auditing Rx prescribing patterns
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Generic Substitution
Medi‐Cal 47th nationally in generic dispensing For every 1% increase in generic utilization in California, the state and federal governments would save over $45 million annually
If California was able to reach the nationwide average generic dispensing rate, Medi‐Cal would save $315 million/ year
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Recommendation: U.S. Asst. Sec’yfor Planning & Evaluation
Mandate generic substitution by pharmacists if "Brand Only" not indicated by physician
Mandate in place in Florida, Hawaii, Kentucky, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New York, Rhode Island, Tennessee, Vermont, Washington, and West Virginia
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340B Partnerships
Medicaid pays 64% of Average Wholesale Price, 340B pays 51%
340B prices about 15‐20% lower than Medicaid prices Partnerships increase ways Medi‐Cal could get 340B prices Partnerships need “win‐win” for states and 340B providers Partnership strategy could also be pursued for long‐term care residents
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340B Partnerships in California California now requires 340B entities to bill Medi‐Cal drugs at actual acquisition cost
But, mandate does not include any shared savings So, as of January 2011, most children’s hospitals had not enrolled in 340B
Shared savings mechanism needed
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One Way to Maximize 340B Savings Form working group, including representatives of potential 340B providers Identify all potential 340B providers Identify potential drug price savingsDevelop shared savings mechanismsRecommend ways to combine mechanisms and potential drug price savings to reduce Medi‐Cal costs
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References Avorn, J., and Fischer, M. (2010). “'Bench To Behavior':
Translating Comparative Effectiveness Research Into Improved Clinical Practice.” Health Affairs, 29(10), 1891‐1900.
Campbell, S. (2009). “Promotional Spending for Prescription Drugs.”, Congressional Budget Office, Washington, DC.
Howle, E. (2011). “Ways to reduce government waste, increase revenue, and improve efficiency in Department of Health Care Services.” 2011‐502, California State Auditor, Sacramento, CA.
Office of the Assistant Secretary for Planning and Evaluation. (2010). “Expanding Use of Generic Drugs.” , U.S. Department of Health and Human Services, Washington, DC.
von Oehsen, B. (2011). “Recent 340B Reform Legislation and Its Implications for States.” National Legislative Association on Prescription Drug Prices, Washington, DC.