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Statistic of the Month
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Average Cost of an Inpatient Stay in 2016
|For more on data on healthcare cost and utilization, see this January 2019 global study from the Institute for Health Metrics and Evaluation||For more, see this Health Affairs blog post: "Meeting Individual Social Needs Falls Short of Addressing Social Determinants of Health"|
By Marjie High | State of Reform | Jan. 25, 2019
The Kaiser Family Foundation and California Health Care Foundation released the results of a new poll assessing the healthcare priorities of California residents, reports State of Reform. Making healthcare more affordable ranked as a top issue for Californians, with 45 percent ranking it as “extremely important” and 35 percent ranking it “very important.” Increasing access to mental health treatment topped the list of specific healthcare priorities. These concerns are likely related to the fact that, in all six geographic areas surveyed, residents said that their communities did not have enough mental health providers. Communities of color reported mental health provider shortages at higher rates than other communities.
By Sara Gentzler | State of Reform | Jan. 8, 2019
California’s Governor announced several actions he would take related to healthcare, according to State of Reform. Governor Newsom signed an executive order placing all Medi-Cal prescription drug pricing negotiations under the Department of Health Care Services, rather than a “fragmented” array of purchasers. The Governor also wrote a letter to Congress and the White House asking lawmakers to “amend federal law” so that states can get waivers that allow for state-based innovation – “including creating paths to single-payer” – and provided a preview of healthcare-related items in his budget.
By Ed Silverman | STAT | Jan. 3, 2019
California released a pair of reports detailing spending on medicines, the costliest drugs and the treatments most frequently prescribed, reflecting requirements in a state law to increase transparency on prescription drug pricing, reports STAT. The reports contribute to an ongoing battle between state lawmakers and the pharmaceutical industry over the rising cost of medicines.
By Mike Eichmann | WHYY| Jan. 7, 2019
A University of Delaware study, commissioned by the Delaware Department of Health and Social Services, found a 6 percent decline in primary care doctors actively providing patient care from 2013 to 2018, according to WHYY. In addition to a declining number of practicing physicians, the state’s physician workforce is also aging, with only 60 percent of Kent County physicians say that they still plan to be practicing in five years. Delaware’s Primary Care Collaborative is expected to release a report with long-term solutions to increase access to primary care in the state.
By IHPI News | Dec. 7, 2019
A study conducted by the University of Michigan Institute for Healthcare Policy & Innovation found that nearly half of the people covered by Michigan’s expanded Medicaid program felt their physical health improved in the first year or two after they enrolled. Of those who were employed, more than two-thirds said having Healthy Michigan Plan coverage had helped them do a better job at work, according to the Institute’s analysis. Another quarter of the respondents were out of work when they took the telephone survey—yet more than half of them said their Healthy Michigan Plan coverage improved their ability to look for a job.
By Rose Meltzer | FierceHealthcare | Jan. 3, 2019
A new poll from the University of Michigan has revealed that older Americans, between ages 50 and 64, are worried about healthcare coverage as they head towards retirement, according to FierceHealthcare. About a quarter of respondents feared that they wouldn’t be able to afford their insurance and nearly half expressed little to no confidence in being able to afford their insurance when they retire. Additionally, 13 percent said they postponed medical care due to cost concerns. Nearly 20 percent said they were delaying retirement to keep their employer-sponsored health plan.
By Megan Liz Smith | Missouri Business Alert | Jan. 14, 2019
Air ambulance companies in Missouri use the practice of balance billing to stick patients with bills for tens of thousands of dollars, reports Missouri Business Alert. The findings come from a new report from the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP). The DIFP estimates that air ambulance providers charged a total of $25.7 million for their services in Missouri in 2017. Of that amount, patients could have been balance-billed up to $12.4 million, which comes out to $20,000 per passenger. The report also cites “vigorous collection efforts,” including wage garnishments and liens, by some air ambulance companies.
By Rose Hoban | North Carolina Health News | Jan. 16, 2019
Blue Cross and Blue Shield of North Carolina (BCBSNC) and five of the largest health systems in the state announced moving larger sections of their business towards value-based care, reports North Carolina Health News. BCBSNC has put contracts in place to move half their payments to these health systems to value-based by 2020. This move is aligned with other value-based initiatives happening in the state’s Medicaid program as well as successful ACOs programs that care for Medicare patients.
Vermont Takes Next Step to Import Rx Drugs from Canada
By NASHP | Jan. 3, 2019
The Vermont Agency for Human Services has presented a report detailing next steps for wholesale importation of prescription drugs from Canada, which was approved by Vermont’s legislature last year, reports NASHP. Based on calculations from two of the state’s three major insurance carriers and factoring in costs from just 17 drugs, the report estimates annual savings of $1 to $5 million. This is a conservative estimate, taking into account a high profit margin for the supply chain. “Even with additional mark-up to cover the supply chain costs, the savings are still significant,” said NASHP executive director, Trish Riley.
By WA Governor’s Office | Jan. 8, 2019
Gov. Jay Inslee and Democratic lawmakers will introduce legislation that would provide a public healthcare option in Washington through the state’s Health Benefit Exchange, announced the Governor’s Office. The proposal addresses the challenges of health insurance availability as well as affordability—specifically, the proposal will improve affordability through standardized plan designs that are easier to understand and have lower out-of-pocket costs for consumers. “With volatility and uncertainty at the federal level, the goal of this proposal is to provide a sensible alternative that is affordable and accessible in every county,” said the bill’s sponsor, Rep. Eileen Cody.
By Aaron Schwartz, et al. | JAMA | January 2019
Researchers conducted an observational study to determine if and how physicians varied in their provision of low-value healthcare services, and if the level of variation can be predicted by observed physician characteristics, in a new study from JAMA. To date, the physician role in the use of low-value services has not been well described. The study found that all physicians contribute to the provision of low-value services, even the least wasteful physicians. Additionally, it is difficult to predict variation based on individual physician characteristics. This finding demonstrates that provider organizations may need to proactively shape their practice patterns. Potential mechanisms to reduce low-value care would be recruiting, training and compensating providers to reduce the provision of low-value care.
By Gerard F. Anderson, Peter Hussey and Varduhi Petrosyan | Health Affairs | January 2019
The U.S. remains the outlier in terms of per capita healthcare spending, according to research published in Health Affairs. U.S. health spending levels were 25 percent higher than Switzerland, the country with the next-highest expenditures. Researchers also found that prices, not utilization, are driving healthcare spending. This study is a follow-on to one conducted by the researchers and the late Princeton healthcare economist, Uwe Reinhardt, in 2003. One notable difference between 2003 and 2016 data was the widening gap between what public insurers and private insurers pay for the same health services. The Medicare Payment Advisory Commission recently estimated that private insurers pay prices that are 50 percent higher than what Medicare pays, up from 10 percent in 2000.
By Inmaculada Hernandez, et al.| Health Affairs | January 2019
A report published in Health Affairs found that the rising costs of brand-name drugs were due to existing drug price inflation. Every year between 2008 and 2016, the average weighted costs of oral and injectable brand-name drugs increased 9.2 percent and 15.1 percent, respectively, largely driven by existing drugs. Across the study period, more than 85 percent of the annual increases in the average weighted cost of brand-name drugs was attributable to existing drugs and less than 15 percent to new drug products. This study highlights the importance of price inflation related to existing drugs on overall spending increases for drugs.
By Harold D. Miller | Center for Healthcare Quality & Payment Reform | January 2019
An analysis from the Center for Healthcare Quality and Payment Reform discusses why CMS Alternative Payment Models (APMs) might be failing to significantly reduce spending in Medicare. The author asserts that APMs do not meet the majority of the eight criteria for a successful APM. The report details the serious weaknesses in the six major Advanced APMs that have been implemented by CMS and the CMS Innovation Center, including Bundled Payments for Care Improvement Advanced, Comprehensive Care for Joint Replacement and Comprehensive Primary Care Plus. Some of these design weaknesses include: not directly addressing the barriers current payment systems create to delivering high-value services or ones that are currently underpaid, requiring providers to be accountable for almost all Medicare spending on a patient they are treating, and having no direct penalty if a provider delivers poor quality care unless their spending is higher or lower than the target amount. The author outlines how an APM should be designed to support high-quality, affordable care and reduce spending by Medicare.
By Todd Gilmer, et al. | Health Services Research | December 2018
Widespread adoption of community-based diabetes prevention programs may be a cost-effective way for Medicaid programs to reduce cardiovascular-related mortality and morbidity and diabetes among beneficiaries. In a study published in Health Services Research, participants in community-based diabetes prevention programs lost weight and increased high-density lipoprotein cholesterol, with an intervention cost of $915 per participant. The model evaluated both quality adjusted life years and healthcare costs over a 40-year time span.
By Lauren C. Howe and Kari Leibowitz | The New York Times | Jan. 22, 2019
A recent study has revealed that reassurance offered by a doctor may relieve patient symptoms faster. Researchers found that patients who saw doctors that offered words of encouragement during a skin prick test reported less severe reactions than ones who saw doctors that didn’t say much. Other studies have suggested that provider words may even influence the efficacy of pharmaceutical drugs. All of this research suggests that doctors who don’t connect with their patients may risk undermining a treatment’s success, according to analysis published in the New York Times. However, physicians worry that building rapport with patients requires more time than they have. Authors state that there are simple ways to build warmth and demonstrate competence like smiling, looking patients in the eye and asking their names.
By Renuka Tipirneni & Preeti Malani | University of Michigan | January 2019
A new national poll suggests many people in their 50s and early 60s have serious concerns about their health insurance status and ability to afford insurance in the future. The poll’s focus was on older adults who are approaching the “magic” age of 65, when most will qualify for Medicare health insurance, to determine where their concerns on insurance lie and to understand their level of ability to understand health insurance terms and to find information about their insurance plan. One in five polled had little or no confidence that they could understand insurance terms, one in four said they did not know how to find what their insurance plans would cover or what their out of pocket costs would be. 11 percent delayed or considered delaying retirement to have health insurance through their employer, 8 percent are delaying medical procedures until they are covered by Medicare, and 68 percent of respondents said they were concerned about how their insurance might change due to potential federal policy changes. There was no observed association between income or education and retirement decisions, suggesting adults from a variety of socioeconomic backgrounds may be putting off retirement to maintain health insurance coverage.
Visit the Hub website for a road map to a patient-centered, high-value health system, drug costs, healthcare cost drivers, reducing low-value care, health disparities and more!
By Jay Hancock and Sydney Lupkin | Kaiser Health News | Jan. 18, 2019
Drug company negotiations with pharmacy benefit managers (PBMs) to block patients from getting generic medications could be raising the price of drugs for patients, according to Kaiser Health News. Drug companies give PBMs volume-based rebases in exchange for keeping competing generics off the formulary. In unpublished research, the author found that only 17 percent of Medicare plans covered Basaglar, the biosimilar launched by Eli Lilly two years ago, though nearly all of them covered Sanofi’s brand-name drug Lantus. Biosimilars are considered clinically equivalent to their reference product and “rebate trap” negotiations may be discouraging drug companies from developing them. Another 2015 study found that only 19 percent of generic drugs covered by Medicare were in the preferred formulary tiers with the lowest out-of-pocket costs.
By Julie Appleby | The New York Times | Dec. 18, 2018
Consumers are increasingly vulnerable to balance bills, the difference between what insurers pay and hospitals’ list prices, which can be several times higher than what hospitals accept from Medicare or in-network insurer, according to the New York Times. Patients rarely know upfront how much their medical care will cost. State courts have stepped in to mediate cases where a patient received a big bill from an out-of-network provider but their conclusions have varied. In 2017, the Virginia Supreme Court ruled in favor of a hospital, saying admission paperwork a patient signed in the emergency room was a valid contract. Meanwhile, Texas’s Supreme Court said that hospitals must disclose in-network rates they allow insurers to pay in some legal disputes. Other states, like Tennessee, have created laws that require hospitals to notify patients of estimated costs that they could receive balance bills for.
By Anna Wilde Mathews and Melanie Evans | The Wall Street Journal | Dec. 27, 2018
Increasingly, physician referrals are being driven by pressure to keep business within a hospital system, even if an outside referral might be best for the patient, according to the Wall Street Journal. For hospital systems, doctors’ referrals are a vital source of revenue and many have implemented referral tracking. Efforts to keep patients within hospital systems can mean higher costs for patients and their employers with evidence showing that healthcare services are often more expensive when provided by a hospital. This can mean higher out-of-pocket spending for patients. Hospital executives have defended referral tracking practices by stating that they are used to avoid duplication, reduce unnecessary procedures and enhance care coordination.
By Julie Appleby and Barbara Feder Ostrov | Kaiser Health News | Jan. 4, 2019
The Trump administration is requiring all hospitals to post their list prices online. However, these list prices, called chargemasters, may not be able to provide patients with usable insight, according to Kaiser Health News. To figure out what, for example, a trip to the emergency room might cost, a patient would have to locate and piece together the price for each component of their visit — the particular blood tests, the medicines dispensed, the facility fee, the physician’s charge, and more. The services, treatments, drugs or procedures a patient will face in a hospital stay is often unknowable. Additionally, finding chargemaster information on a hospital website is often challenging and consumers might be stymied by seemingly incomprehensible abbreviations. Some experts have indicated that rather than posting chargemaster lists, hospitals should be required to provide the average prices they accept from insurers.
By Austin Frakt and Gilbert Benavidez | The New York Times | Jan. 7, 2019
Congressional Republicans are expected to reintroduce a healthcare package that would encourage Americans to exercise more and get a better handle on their finances in response to modest financial incentives, according to the New York Times. However, research suggests this is unlikely to work due to scarcity or “cognitive tax” that makes it harder for people to live healthy lives and make health-promoting choices. Professional and family life are significant contributors to this cognitive tax. One study found that stressed individuals tend to make riskier decisions. Additionally, another study revealed that low-income individuals tend to worry about the immediate more than the long-term effects of decisions. Numerous studies have also shown that wellness programs don’t work. Evidence suggests that passive polices, like ones that automatically enroll you in a 401(k) plan, work better than active policies requiring people to take action.
By Jeanne Lenzer and Shannon Brownlee | The Washington Post | Jan. 4, 2019
A recent global investigation found that medical devices accounted for 1.7 million injuries and more than 80,000 deaths in the past decade. A contributing factor may be that a majority of medical devices available on the market in the U.S. have not undergone clinical trials, according to the Washington Post. In fact, a study revealed that only 5 percent of the highest-risk implantable cardiac devices were subjected to clinical trials on par with the testing required for drug approval. Device manufacturers can also use the supplement pathway to make minor updates to devices without clinical studies. A Harvard study showed that 99 percent of implanted cardiac devices, such as pacemakers and defibrillators, were approved through the supplement pathway from 1979 and 2012. One such update was to Medtronic’s Sprint Fidelis defibrillators, which had wires that were prone to fracture, shocking some patients repeatedly and not delivering shocks to others who needed them. By the time the device was recalled, nearly a quarter million were already in circulation worldwide. The FDA announced plans to transform the way more than medical devices are cleared, but critics have written these off as window dressing. Experts have suggested the FDA categorize any implanted device as a high-risk product which would subject it to rigorous clinical trials.
By Brian Castrucci and John Auerbach | Health Affairs | Jan. 16, 2019
Social determinants of health--like economic and housing instability, racism and other forms of discrimination, educational disparities, inadequate nutrition, and risks within the physical environment--affect individuals long before they interact with the healthcare system and may be contributing to increasing healthcare costs and worsening life expectancy. Efforts to mediate patients’ individual social needs fall short because they do not improve the underlying social and economic factors that affect the health of everyone in a community, according to a study in Health Affairs. Though these interventions focusing on individual needs are praiseworthy, like one in Chicago that saved nearly $5 million by screening for malnutrition risk factors and establishing a nutrition program, they cannot be described as efforts to address social determinants of health. Community-level changes can only be made through policy action and the demand for social needs interventions won’t stop until the true root causes are addressed.
By Eric Crosbie, Dean Schillinger and Laura A. Schmidt | JAMA | Jan. 22, 2019
State preemption, when a higher level of government limits the authority of a lower level, may be posing a serious threat to the ability of localities to levy taxes on sugar-sweetened beverages, according to JAMA. As of November 2018, 7 cities across the U.S. have enacted taxes on sugar-sweetened beverages. According to a 2015 estimate, a national penny-per-ounce tax on sugar-sweetened beverages would save $23.6 billion in healthcare spending over 10 years and generate $12.5 billion in annual revenue for public health interventions. However, 4 states—Arizona, California, Michigan, and Washington—have enacted laws preempting this type of local tax. Authors suggest that beverage industry lobbying efforts may have contributed to this preemption.
Visit the Hub website for background on surprise medical bills, drug costs, price transparency, high and rising unit prices, excess administrative spending, social determinants of health, sin taxes and more!