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Research Roundup - August 2018

Alaska

Alaska Governor Signs New Price Transparency Legislation

By DJ Wilson | State of Reform | Aug. 15, 2018

A new Alaska law requires healthcare providers to publicly post the costs of common medical procedures and provide cost estimates to patients within 10 days of being asked, according to State of Reform. The law is meant to help patients make more informed decisions about the costs behind their care. The bill also includes provisions related to the licensure of and billing for marital and family therapists and establishes a measure related to ACES (adverse childhood experience syndrome), encouraging lawmakers to make policy decisions in a trauma-informed way.

California

Los Angeles County Health Agency Launches Health Equity Action Plan

By County of Los Angeles Public Health | Aug. 13, 2018

The Los Angeles County Health Agency and community partners recently announced the release of a new plan that promotes health equity across the county, according to State of Reform. The five-year plan seeks to reduce and eliminate some of the county’s biggest gaps in health outcomes. Priorities include: reducing the gap in black infant mortality; eliminating congenital syphilis; reducing hazardous exposures to harmful toxins in low-income communities; improving health outcomes for residents with complex health needs; and ensuring health agency services are accessible and culturally and linguistically appropriate.

Louisiana

Louisiana Department of Health Considering Innovative Subscription-Based Payment Model for Hepatitis C Drugs

By Louisiana Department of Health | Aug. 7, 2018

Louisiana is evaluating a subscription-based payment model for high-cost drugs targeting Hepatitis C, according to the state’s Department of Health. The cost of Hepatitis C treatment, which affects 30,000 people in the Louisiana Medicaid program and prison system, creates barriers for the most vulnerable populations suffering from the disease. Under this payment model, the state would pay a drug manufacturer or manufacturers for unlimited access to the treatment for the individuals in Louisiana who are enrolled in Medicaid or in Louisiana’s correctional system. The total payment to the manufacturer would be equal to or less than what the state is currently spending, but by paying less per person, would reach many more patients. 

Missouri

How Effective are Medicaid MCOs at Managing Care in Missouri?

By Missouri Hospital Association | August 2018

Statewide expansion of Medicaid managed care in May 2017 resulted in 240,000 Missourians being shifted from traditional Medicaid to coverage from one of three for-profit corporations. But despite the rapid growth of managed Medicaid delivery models in the U.S. and Missouri, limited evidence exists on the actual effectiveness of MCOs to deliver efficiencies and cost savings while improving health outcomes for enrollees. A new report by the Missouri Hospital Association evaluates recent trends in hospital utilization for the Medicaid managed care population compared to other Missouri Medicaid patients and describes observed differences regarding clinical, behavioral and sociodemographic risk factors. The study found that observed differences in hospital utilization for MO HealthNet beneficiaries can be explained by higher rates of clinical, behavioral and social complexity among fee-for service enrollees. Although Medicaid managed care patients have significantly lower clinical and behavioral risk factors, they have higher rates of emergency department utilization and inpatient readmissions, compared to the fee-for-service population.

Primary Care Physicians: Missouri Workforce Update

By Missouri Hospital Association | August 2018

Missouri’s primary care provider landscape has changed considerably over the past few years, with an increased number of physicians throughout the state—particularly in rural areas. However, shortages remain and are anticipated to continue into the future, which will require diligent efforts to maintain and increase the state’s supply. A recent report by Missouri Hospital Association discusses Missouri’s current and future primary care workforce needs and highlights successful strategies to improve recruitment and retention. 

New York

An Assessment of the New York Health Act: A Single-Payer Option for New York State

By RAND Corporation | NYS Health Foundation | Aug. 1, 2018

The New York Health Act (NYHA), a single payer option for New York State residents, which is being considered by the legislature, is likely to increase use of health services as residents receive more coverage, according to an analysis of the legislation conducted by RAND and funded by the New York State Health Foundation. This single-payer option would cover all state residents, including undocumented immigrants, and seniors over 65 (assuming approval of waivers). Coverage would include medical benefits currently included in Medicare, Medicaid and Child Health Plus, as well as essential health benefits as included in the ACA, and more long-term care benefits may be included later. Key findings of the report indicate that overall healthcare spending under NYHA would decrease slightly (3 percent) by 2031, despite increased use of the system. Taxes would replace insurance premiums as the main source of healthcare financing and would need to increase by approximately 156%. However, depending on the design of the progressive tax schedule, most households in New York can expect to pay less, while the highest-income households could pay substantially more.

Clinical-Community Partnerships for Better Health

By United Hospital Fund | July 12, 2018

There is increasing awareness that social determinants of health affect physical and mental health outcomes, especially in early childhood.  Social determinants, particularly those that can lead to toxic stress, can stunt young children’s brains leading to long-term development challenges. A new study from the United Hospital Fund examining the effects of a learning collaborative called Partnerships for Early Childhood Development (PECD). PECD is a two-year grant that provided $700,000 to 11 New York City hospital-based primary care practices to build partnerships with 17 community-based practices. These clinical-community partnerships designed and implemented their own social determinants of health projects to screen families for social needs. Over 5,500 families were screened and at least 1,900 families were determined to have one or more social needs. In the first year of the project, referral rates to community based practices were high, but follow up was low due to various barriers the teams encountered in tracking referrals, sharing information and other social hurdles that kept the families from seeking services. Strengthening the referral approach and closing this feedback loop is the focus for the upcoming second year of the grant. 

North Carolina

This Surgeon Wants to Offer Cheap MRIs. A State Law is Getting in His Way.

By Dylan Scott | Vox | July 31, 2018

Dr. Gajendra Singh has filed a lawsuit in the North Carolina Superior Court arguing that the state's certificate of need (CON) law gives hospitals a monopoly over MRI scans and other services and leads to high prices. According to an article in Vox, after Singh decided to post his prices, as low as $500 for an MRI, he ran into the state’s certificate of CON law, which prevented him from buying a permanent MRI machine. As a result, his office couldn’t always offer patients one of the most important imaging services in medicine. Americans can sometimes be charged as much as $24,000 if they get an MRI at a hospital emergency department. 

Ohio

Ohio Medicaid to Try Out Transparent PBM Pricing Model

By Shelby Livingston | Modern Healthcare | Aug. 15, 2018

Ohio's Medicaid department is directing its managed care organizations to quit their contracts with pharmacy benefit managers (PBMs) because of opaque pricing practices officials said cost the state millions of dollars. According to Modern Healthcare, most PBMs engage in spread pricing, where the PBM pockets the difference between what it bills to the payer for medications and what it pays the pharmacy to dispense those drugs. A report commissioned by the Ohio Medicaid department found that the spread represented an 8.8 percent difference between what was billed to managed care plans and paid to pharmacies in the state. Ohio Medicaid wants to move to a pass-through pricing model, in which the managed care plan pays the actual discounted pharmacy price that the PBM negotiated with the retail pharmacy network.

Texas

Nail Salon Workers Helped Us Turn the Idea of Community-Centered Health Into Reality 

By Andrea Caracostis and Jo Carcedo | STAT | Aug. 2, 2018

After seeing firsthand the repeated health problems faced by nail salon workers, leadership at the HOPE Clinic and the Episcopal Health Foundation tried to find out why. According to an article in STAT, researchers visited nail salons across the Houston area and interviewed almost 400 workers about their physical and mental health, exposure to chemicals, access to healthcare, workplace safety, and more. The survey showed that a large number of salons use potentially hazardous chemicals and workers suffered from repeated health problems. As a result of the survey, HOPE clinic created a curriculum focusing on health education in nail salon schools. 

Vermont

Vermont Seeks to Boost Mental Health, Addiction Workforce

By Mike Faher | Battleboro Reformer | Aug. 19, 2018

Vermont has dedicated $5 million in its fiscal 2019 budget to expand efforts to find and retain clinicians to help address the state's mental health crisis and opioid addiction epidemic, according to the Battleboro Reformer. The legislation outlined some potential solutions for combatting provider shortages, including new scholarships, stronger loan-repayment programs and "strategic bonuses" for professionals in Vermont's existing workforce. Funding for the initiative will be spread over four years "to ensure successful and sustainable implementation" of the new workforce programs.

Virginia

Virginia Launches Data Sharing Platform to Improve ED Care Coordination and Reduce Costs

By Evan Sweeney | FierceHealthcare | July 31, 2018

Virginia has launched a single, statewide Emergency Department Care Coordination (EDCC) program to connect 129 hospital emergency departments across the state, allowing physicians to access patient records and tap into the state’s prescription monitoring program, according to FierceHealthcare. Virginia began working on the EDCC program last year in an effort increase care coordination and to control ED utilization costs and direct patients to the appropriate care provider, including lower cost telehealth visits and clinics. The total programing budget for the program for fiscal year 2018 is $3.9 million, of which the federal government is chipping in $3.5 million in HITECH Act funding.

How Virginia is Seeking to Reframe the Discussion Around ‘Deaths of Despair’

By Paige Minemyer | FierceHealthcare | Aug. 22, 2018

The percentage of people in Virginia’s far southwest region—one hit hardest by the opioid crisis, poverty and unemployment—receiving treatment for opioid abuse rose from 67 percent in 2016 to 73 percent by April 2018. According to FierceHealthcare, the state launched the Addiction and Recovery Treatment Services (ARTS) Medicaid benefit last year, which will be accessible to more people now that Virginia is expanding Medicaid. State leaders found that counties with the highest rates of ‘deaths of despair,’ or ones from overdoses, suicides, or alcohol-related conditions, were among those with the highest number of people in poverty or with lowest high school graduation rates. For that reason, state Health and Human Resources representatives have re-characterized them as “deaths of disparity.” A Commonwealth Fund report found that these deaths increased by over 50 percent in the past decade. More understanding is needed to address disparities contributing to deaths, especially as Virginia rolls out Medicaid expansion. 

For more state news and to get alerts for your state, visit our state news page.

Recent Reports

Patients Often End Up with Expensive Medical Bills, Even When They Go to In-Network Facilities

By Gary Claxton, et al. | Kaiser Family Foundation | Aug. 13, 2018

About 1 in 6 hospital stays for patients enrolled in large employer health plans results in out-of-network bills, which tend to be costly and not fully covered by insurance, according to a recent study covered by The Hill. The Kaiser Family Foundation analysis of medical bills from large employer plans found that 18 percent of inpatient admissions result in out-of-network claims. Even when enrollees choose in-network facilities 15 percent of admissions included a bill from an out-of-network provider. Additionally, inpatient treatments for mental health and substance abuse—such as an overnight stay in a psychiatric facility—have a much higher chance of including claims from out-of-network providers.

Hospital Spending Increases Drive Slight Uptick in Overall Healthcare Spending Growth

By Paige Minemyer | FierceHealthcare | Aug. 8, 2018

A monthly spending brief from Altarum showed that spending grew by 5.2 percent between June 2017 and June 2018, compared to 4.2 percent the year prior, outpacing GDP growth. Americans spent $3.66 trillion on healthcare in the first five months of the year, according to the report, which is an increase of just under 1 percent from projections of $3.61 trillion. Altarum attributes that uptick to an increase in spending on hospital care, which accounts for about 32 percent of spending overall. According to FierceHealthcare, the figures align with projections from the Centers for Medicare & Medicaid Services, which estimated that healthcare spending could increase by 5.5 percent annually and reach $5.7 trillion by 2026.

Has Medicare’s Bundled Payments Initiative Lowered Costs?

By The Commonwealth Fund | July 19, 2018

A study funded by the Commonwealth Fund compared hospitals participating in Medicare’s bundled payment program and a group of control hospitals and found no significant difference in terms of what Medicare paid for the care, patients’ clinical complexity, average length of stay, emergency department use, hospital or mortality. Earlier studies focusing on bundled payments for joint replacements did show that participating hospitals were successful in lowering overall Medicare payments, but this may have been because patients tended to be younger and had lower rates of poverty and disability in the joint replacement study. Bundling for medical conditions may require more time, new care strategies and partnerships, or additional incentives.

Social Determinants as Public Goods: A New Approach to Financing Key Investments in Healthy Communities

By Len M. Nichols and Lauren A. Taylor | Health Affairs | August 2018

Strong evidence that addressing social determinants of health could improve health and lower spending, particularly among low-income communities, has existed for many years. Yet the vast majority of communities still struggle to secure adequate, sustainable financing for interventions targeting social determinants of health. A new article published in Health Affairs argues that underinvestment in social determinants of health stems from the fact that such investments are in effect public goods, thus benefits cannot be efficiently limited to those who pay for them— a reality that makes it difficult to capture return on investment. The authors propose a novel but practical community financing mechanism by which healthcare organizations can jointly invest in social determinants of health projects that align with their own self-interest.

Unlike Medical Spending, Medical Bills in Collections Decrease with Patients’ Age

By Michael Batty, Christa Gibbs and Benedic Ippolito | Health Affairs | July 25, 2018

A recent study published in Health Affairs found that, unlike healthcare use and spending, medical collections decreased substantially with age. Specifically, the average size of medical debt decreased nearly 40 percent from patients age twenty-seven to sixty-four, with increases in health insurance coverage and incomes likely playing important mediating roles. This, and other findings, have implications for policies targeting medical debt and insurance regulation, such as restrictions on age rating. 

Prices for Common Cardiovascular Drugs in the US are Not Consistently Aligned with Value

By Jonathan Campbell, et al. | Health Affairs | August 2018

Healthcare reimbursement agencies in countries other than the US often rely on cost-effectiveness evidence for drug coverage decisions, signaling to drug manufacturers their expectations for value-based pricing. A study published in Health Affairs estimated the range of cost-effectiveness for thirty frequently prescribed cardiovascular drugs to determine whether drug prices in the US are influenced by value. Researchers found that cost per quality-adjusted life-years varied significantly among the drugs studied, indicating that drug pricing is not consistently influenced by value, or that such influence is masked by inaccessible factors, such as price discounts.

Spending on Prescription Drugs: Where Does All the Money Go?

By Nancy L. Yu, Preston Atteberry and Peter B. Bach | Health Affairs | July 31, 2018

A report published in Health Affairs provides an analysis of revenues retained from the purchase, distribution and payment of prescription drugs throughout the supply chain. To provide a comprehensive overview of markups along the supply chain (where multiple intermediaries rely on revenue from fees, price mark-ups, and after-the-fact rebates), authors quantified the gross profits retained by each group of supply chain participants, arriving at an estimate of annual gross profits of $480 billion per year.  The net revenue captured by drug manufacturers represents two-thirds of total US expenditures on pharmaceutical drugs. Authors note that estimates of annual US pharmaceutical spending vary, both because the data used for such estimates differ in important ways and because the scope of what is measured is inconsistent. 

Perceptions of Factors Associated with Inclusive Work and Learning Environments in Healthcare Organizations

By Jaya Aysola, Frances Barg and Ana Bonilla Martinez | JAMA | Aug. 3, 2018

A study published in JAMA using qualitative analysis identified six modifiable contributors to an inclusive culture and the implications of these factors on the well-being and performance of members of the healthcare workforce. Challenges with inclusion had negative effects on job performance and well-being, with reports of stress, anxiety, burnout and feelings of hopelessness, which ultimately affect patient interactions. Modifiable contributors include: (1) the presence of discrimination; (2) the silent witness; (3) the interplay of hierarchy, recognition, and civility; (4) the effectiveness of organizational leadership and mentors; (5) support for work-life balance; and (6) perceptions of exclusion from inclusion efforts. Interventions for fostering an inclusive organizational culture include: examining leadership, revising organizational policies, supporting advocacy campaigns, and expanding collegial networks. 

Presenting Cost and Efficiency Measures that Support Consumers to Make High Value Healthcare Choices

By Jessica Greene, et al | Health Services Research | August 2018

A survey of consumers provided insight on how the presentation of cost and quality information impacts decision making. When cost information was presented using concrete dollar amounts and/or the word “affordable” to describe a low-cost hospital, consumers were approximately 16 percent more likely to select the lower-cost option, compared to when the Hospital Compare spending ratio was used. When consumers were shown readmission performance information, they were 33 percentage points more likely to choose the highest performing hospital when making selections of word icons rather than percentages, according to an article in Health Services Research.

Financial Incentives and Physician Practice Participation in Medicare’s Value Based Reforms

By Adam Markovitz, et al. | Health Services Research | August 2018

A review of Medicare Physician Compare data found that previous experience and success in past Medicare performance incentives was linked with physician practice participation in voluntary value-based payment reforms, including Meaningful Use HIT program and Medicare Accountable Care Organizations. The study recommends that for Medicare to promote value-based payment reforms on a broad scale, financial incentives should be paired with additional efforts to incentivize participation among physician practices that do not have previous experience with value-based payment reform initiatives.

Immigrants Have Lower Healthcare Costs Than People Born in U.S.

By Peter Sullivan | The Hill | Aug. 8, 2018

A report from researchers at Harvard Medical School and Tufts University examined all peer-reviewed studies since 2000 on immigrants’ healthcare costs and found that their healthcare expenditures were one-half to two-thirds those of people born in the U.S. Researchers found that immigrants make up 12 percent of the population but account for only 8.6 percent of total U.S. healthcare spending. 

Visit the Hub website for background on healthcare cost drivers, prescription drug spending, surprise medical bills, transparency initiatives, social determinants of health and more!

Commentary/News

Hospital Mergers or Acquisitions May Cause Short-Term Patient Safety Issues 

By Susan Haas, William Berry and Mark Reynolds | STAT | July 31, 2018 

Mergers and affiliations might increase the risk of harm to patients in the short run, despite hospital and health system claims that better patient care is the motivation, according to an article in STAT. There have been more than 100 hospital or health system mergers and acquisitions each year since 2014, with a high of 115 in 2017, and that pace is likely to continue. It’s usually not until after the deal has been completed that clinicians are asked to work out the necessary arrangements to fill gaps and coordinate and standardize clinical care, which may be too late. CRICO/Risk Management Foundation and Ariadne Labs polled physicians in their research group whose practices were involved in a merger and found that new patient populations, unfamiliar infrastructure and new settings for physicians were the largest contributors to patient harm. 

Workplace Wellness Programs Don’t Work Well. Why Some Studies Show Otherwise.

By Aaron E. Carroll | New York Times | Aug. 6, 2018

Results from the Illinois Workplace Wellness Study, a large randomized controlled trial of a wellness program at the University of Illinois at Urbana-Champaign, showed no causal effects between financial incentives for participation in wellness activities and healthcare spending, employee retention and number of gym visits, according to an article in The New York Times. Many analyses showing positive results from workplace wellness programs use observational data instead of randomized controlled trials that compare participants to a control group in order to combat selection bias. The randomized controlled trial showed that the wellness program had little effect on spending compared with the control group in both overall spending ($576 versus $568) and hospital spending ($317 versus $297). 

A Fear of Lawsuits Really Does Seem to Result in Extra Medical Tests

By Margot Sanger-Katz | New York Times | July 23, 2018

A National Bureau of Economic Research working paper found that fear of lawsuits increases the intensity and cost of inpatient hospital care by five percent, without benefiting patient outcomes. According to an article in the New York Times, the study looked at what happened to the hospital care that military members received when a base closing forced them to use their benefits in civilian hospitals, where it was possible to sue. Spending on healthcare increased, particularly on diagnostic tests.

Why Medicare is Going After Hospital Outpatient Rates

By Bob Herman | Axios | July 27, 2018

The federal government, after several years of debate, is taking an aggressive stance toward the hospital industry and is proposing to lower what it pays for routine doctor visits at hospital outpatient departments. According to Axios, CMS has proposed a “site-neutral” policy for 2019, essentially eliminating "facility fees" that hospitals add on top of their billing. Some critics have condemned this type of payment system for contributing to hospital consolidation.

AMA Warns CVS-Aetna Merger Will Raise Drug Plan, PBM Prices

By Shelby Livingston | Modern Healthcare | Aug. 8, 2018

The American Medical Association has published an analysis concluding the $69 billion merger between CVS Health and Aetna would substantially weaken competition and raise prices in the Medicare Part D prescription drug plan and PBM services markets. According to Modern Healthcare, the CVS-Aetna merger would increase premiums in 30 of the 34 nationwide Medicare Part D regions. CVS, Express Scripts and OptumRx currently dominate the PBM industry. Express Scripts is in the midst of a proposed merger with insurer Cigna Corp., and OptumRx is already owned by UnitedHealth Group, which operates the nation's largest health insurer UnitedHealthcare.

To Save on Healthcare, Change What the Doctor Orders

By Peter Orszag | Bloomberg | Aug. 8, 2018

A new study suggests that consumers aren’t likely to shop around when it comes to healthcare—less than 15 percent of people went to the lowest-cost MRI provider within in 30 minute drive of their home. According to Bloomberg, doctors are driving where patients go to get MRIs.  More than a fifth of patients getting an MRI scan paid for the procedure themselves, while the prices averaged $850 and varied widely. Additionally, price did not correlate with scan quality. On average, each referring orthopedic surgeon sends almost 80 percent of patients to the same MRI provider. Doctor recommendations may be influenced by moving to a bundled payment model or shifting focus to improving clinical decision support.

Medicare to Overhaul ACOs but Critics Fear Less Participation

By Phil Galewitz | Kaiser Health News | Aug. 9, 2018

One of the key initiatives of the ACA, ACOs were expected to save the government nearly $5 billion by 2019. However, according to Kaiser Health News, administration officials say that ACOs have actually led to higher Medicare spending. About 82 percent of the 561 Medicare ACOs are set up so that they are not at risk of losing money from Medicare. These ACOs share in savings, but do not risk paying money back to Medicare if they do not meet savings targets. A recent industry-sponsored survey showed 70 percent of ACOs would rather quit than assume such financial risk, after CMS said it would phase out its no-risk ACO model beginning in 2020. These proposed changes are estimated to save Medicare $2.2 billion over the next decade.

What Does Knee Surgery Cost? Few Know, and That’s a Problem

By Melanie Evans | Wall Street Journal | Aug. 21, 2018 

Gundersen Health System found that the actual cost of a knee replacement was $10,550, nearly one-fifth of the average list price of $50,000. Using this new research data, Gundersen implemented processes to reduce waste and lower costs resulting in 18 percent savings. According to the Wall Street Journal, hospitals often increase prices to meet profit targets and patients, especially ones with insurance, often don't know the price of procedures and don't shop around. Additionally, higher-cost hospitals spent almost twice the amount on knee replacement surgeries than lower-cost hospitals, despite largely similar quality and comparable patient populations.