Research Roundup - June 2016


Vermont Becomes First State to Require Drug Price Transparency

By Erin Mansfield | VTDigger | June 3, 2016

The Vermont governor signed the prescription drug transparency bill that will make Vermont the first state to require pharmaceutical companies to justify why their drug prices go up, according to VTDigger. Vermont’s new law will require drug manufacturers to provide price justification for an annual list of the 15 drugs whose prices are either very high or went up significantly. Specifically, manufacturers would need to disclose “all the factors that have contributed to a price increase” and justify the increases to the state Attorney General.

North Carolina

DOJ Accuses Carolinas of Using Anti-Steering Provisions

By Lisa Schencker | Modern Healthcare | June 11, 2016

North Carolina's largest healthcare system, Carolinas HealthCare System, has kept medical costs high and suppressed competition by illegally imposing certain requirements on insurers with which it contracts, according to Modern Healthcare. The alleged restrictions include barring insurers from offering tiered networks that include competing hospitals in the top tier.

Transforming Health and Healthcare in North Carolina

By Rick Brajer | Citizen Times | June 7, 2016

North Carolina has finalized a Medicaid Waiver  plan and submitted it to the Centers for Medicare and Medicaid Services, according to the North Carolina Department of Health and Human Services. The plan includes paying for improved patient outcomes, clinically integrating physician and behavioral health, components addressing social, cultural and environmental barriers to health and tying payments to quality measures, among other things.


Hospital Prices Increase in California, Especially Among Hospitals in the Largest Multi-Hospital Systems

By Glenn Melnick and Katya Fonkych | Journal of Health Care Organization, Provision, and Financing | June 14, 2016

Price growth has been larger in multi-hospital systems compared to smaller hospital systems and independent hospitals other hospitals in California, according to new research in the Journal of Health Care Organization, Provision, and Financing. Although prices grew in all hospitals in the study, multi-hospital systems charges grew substantially more between the years of 2004-2013 (113% vs. 70%). The findings bolster fears that pending mergers may result in serious consumer harms.


Missouri Blocks Proposed Aetna-Humana Merger from Insurance Market

By Susan Morse | Healthcare Finance | May 25, 2016

The Missouri Department of Insurance issued an order prohibiting the proposed Aetna-Humana merged company from selling plans in the individual, small group and all group and some individual Medicare Advantage markets, according to Healthcare Finance. Missouri is the first state to take steps to limit the merged company from competing in the local insurance market.

Recent Reports

In the Zone: State Strategies to Advance Health Equity by Investing in Community Health

By Amy Clary | NASHP | June 9, 2016

This report by the National Academy for State Health Policy highlights cross-agency, multidisciplinary partnerships in Connecticut, Delaware, Maryland and Rhode Island that address social determinants of health. These examples of healthcare delivery system reforms aim to improve the health of populations and, at the same time, control costs.

Looking Under the Hood of the Cadillac Tax

By Sherry Glied and Adam Striar | The Commonwealth Fund | June 8, 2016

The ‘Cadillac Tax’ will likely affect tax-preferred savings vehicles, although it will be more progressive than prior analyses have indicated and will have smaller short-term effects on health spending, according to the Commonwealth Fund. Impacts of this tax will be most notable for high-income earners, who, as research suggests, are most likely to use health savings accounts.

Retail Clinic Visits for Low-Acuity Conditions Increase Utilization and Spending

By Scott Ashwood, et al. | Health Affairs | March 2016

58 percent of retail clinic visits represent new use of health services, rather than substitution, according to a study in Health Affairs. As a result, although retail clinics may offer services at a lower cost compared to physician offices and emergency departments, the increase in utilizations is associated with a modest increase of $14 per person per year compared to patients that use other providers.

Re-Evaluating the Patient-Centered Outcomes Research Institute

By Zeke Emanuel, Topher Spiro and Thomas Huelskoetter | Center for American Progress | May 31, 2016

Comparative effectiveness research (CER) funding through the Patient-Centered Outcomes Research Institute (PCORI) has increased to 58% between December 2013 and January 2016 from 37% in the first four years of operation, according to Center for American Progress (CAP). CER evaluates the effectiveness of medical interventions relative to others, providing consumers with a better measure of value, and may potentially improve the quality of care and reduce healthcare costs. CAP recommends 80% of PCORI funding be allocated to CER to address the existing research gaps.

Global Budgets for Hospitals

By Robert Berenson, et al. | Health Policy Center | April 2016

A global budget can only work as envisioned in an all-payer context, according to a report by the Urban Institute and Catalyst for Payment Reform. The report provides a good introduction to the topic of global budgeting, highlights its strengths and options for mitigating weaknesses.

When Hospitals Merge: Updating State Oversight to Protect Access to Care

By Christine Khaikin, Lois Uttley, and Aubree Winkler | MergerWatch | June 2016

The number of short-term, acute-care hospitals dropped from 4,017 in 2001 to 3,779 in 2016, likely as a result financial factors, including the failure of many states to expand Medicaid and a shift towards outpatient care, according to a report by MergerWatch. Although hospital consolidation is often accompanied by promises of financial stability, lower costs and improved services, studies suggest these promises may go unfulfilled. Further, state hospital oversight programs, as they exist today, are not consumer friendly and are insufficient to address the current market conditions.

The Cost of Medicare Advantage

Austin B. Frakt | JAMA | June 14, 2016

Medicare Advantage costs were less than the costs of traditional Medicare coverage (about 6% cheaper) in 2015, according to this commentary in JAMA. However, Medicare Advantage plans may cost more for taxpayers. The average Medicare Advantage plan was paid 8.5 percent more than its costs and 2 percent more than traditional Medicare. These figures may be higher due to Medicare “up coding.” The Center for Public Integrity found that up coding accounted for nearly $70 billion in additional payments to Medicare Advantage plans between 2008 and 2013. Finally, several studies found that additional Medicare Advantage enrollment reduces healthcare utilization for all Medicare enrollees. This could save taxpayers money, offsetting the additional costs of Medicare Advantage.  

Healthcare Utilization and Cost Impacts of Delivery System Innovations: An Updated Review of the Evidence

SHADAC | April 2016

Research on utilization impacts and cost savings due to delivery system reform continues to report somewhat inconsistent findings, according to the State Health Access Data Assistance Center. The authors found a large increase in evaluations compared to a similar scan done in 2013. Overall, research on utilization impacts and cost savings due to delivery system reform continues to be of varying quality and report somewhat inconsistent findings. In addition, individual studies can be difficult to compare because of variations in the care interventions and the target populations. Studies findings are arrayed in an easy-to-use tabular format.  Studies vary by care interventions and the target populations. The growing focus and interest in delivery system reform has led to more diverse populations and larger sample sizes, although more progress is needed.

Addressing Research Gaps to Provide Better Healthcare Value for Consumers

By Lynn Quincy| Healthcare Value Hub | June 2016

A new report from the Healthcare Value Hub summarizes findings from a first-of-its-kind qualitative research project that interviewed 14 prominent researchers to learn where important evidence gaps lie. Gaps in the evidence can be hard to see yet have a profound effect on the slate of strategies being considered by policymakers and other stakeholders and the types of research that get funded. Respondents universally agreed that we do not have enough evidence to get to healthcare value, but here was a diversity of opinions about where these gaps lie. Respondents argued forcefully that we need to be smarter about the types of research we fund and conduct.


Who Owns What Happens After Acute Care?

By Jeff Goldsmith | Hospitals & Health Networks | May 5, 2016

Historically, a hospital’s responsibility for a patient’s care ended at the time of discharge. However, not participating in the “transition of care” after discharge will now leave the hospital exposed to unreimbursed post-acute costs, according to Hospitals & Health Networks. The expansion of bundled payments and Medicare payment rules limiting reimbursement for patients with “unnecessary” readmissions may be the impetus for the healthcare system taking a more active role in assisting patients in the scheduling and coordination of aftercare services.

Designing Successful Bundled Payment Initiatives

By Michael Ciarametaro and Robert Dubois | Health Affairs Blog | April 20, 2016

Although successful bundled payment initiatives may lower healthcare costs and improve healthcare quality, they may also lead to lower use of necessary care, according to this Health Affairs blog post. To minimize the risk of these consumer harms, the authors suggest focusing on ensuring that bundled payments are adequate, including evidence-based treatment variability, and utilizing quality metrics to ensure appropriate care.

Drug Companies Fight Generics with Coupons

By Howard Wolinsky | Modern Healthcare | June 11, 2016

Couponing is on the rise, according to an article in Modern Healthcare. A new report found that there are copay coupons for more than 700 medications now, up from about 75 in 2009. IMS Health found that 10 percent of prescriptions used a copay card in 2015, up from 3 percent in 2010. These programs--established by pharmaceutical companies to eliminate cost-sharing barriers for consumers--circumvent formularies established by insurers to incent consumers to choose less costly generics.

Changing Physician Behavior is Harder than We Thought

By Gail Wilensky | News@JAMA | May 25, 2016

Two recent reports emphasize the challenge associated with changing physician behavior, according to this commentary in news@JAMA. The first, a midterm assessment by the Centers for Medicare & Medicaid Innovation, found care-management fees have not demonstrated any net savings. The second, published in BMJ, estimated that medical errors accounted for 250,000 deaths in 2013, making it the third-leading cause of death in the U.S. The results are announced in tandem with a new CMS initiative to improve quality and reduce cost, referred to as the Comprehensive Primary Care Plus.

If We Measure Inadequate Care, Why Don’t We also Track Wasteful Care?

By Michael Hochman and Pieter Cohen | Center for Health Journalism | June 14, 2016

Previous research has suggested that current quality improvement efforts disproportionately address the underuse of services rather than the overuse or misuse of inappropriate services. This article from the Center for Health Journalism suggests balancing the scale by incorporating more measures of misuse and overuse for each quality measure.

How Drug Companies Use Gifts and Internships to Buddy Up to Their Most Valuable Patients

By Carolyn Johnson | Washington Post | June 14, 2016

Research identifies new drug marketing tactics aimed at patients, including handing out branded toys, paying for summer camps, funding support groups, providing educational scholarships and offering paid internships, according to the Washington Post. These marketing practices may encourage patients to use more expensive treatments, even those without clear evidence of higher quality.

Balky Data Infrastructure Weakens Pharma ‘Pay-for-Performance’ Deals

By Darius Tahir | Politico Pro | June 6, 2014

In an effort to curb rising drug costs, insurers are paying drug companies based on how well their pills work. According to PoliticoPro, research found 14 percent of payers entered such deals, and 30 percent more plan to over the next year. However, payers typically collect claims data, not the quality data required to assess drug treatment success. Even with quality data, some critics question whether payors and pharmaceutical companies would agree on what a “valuable outcome” is.

Improving Safety for Hospitalized Patients: Much Progress but Many Challenges Remain

Richard Kronick, Sharon Arnold, and Jeffrey Brady | JAMA | June 13, 2016

Hospitals have made substantial progress in reducing patient harm over the past few years, according to new research featured in JAMA. From 2005-2011, the rate of adverse events declined for Medicare patients hospitalized for acute myocardial infarction (8% per year) and congestive heart failure (5% per year), but was unchanged for patients with pneumonia or those hospitalized for major surgery. The Agency for Healthcare Research and Quality showed that the rate of adverse events among all hospitalized adults declined approximately 4.5 percent per year since 2010, leading to an estimated cumulative 2.1 million fewer harms to patients between 2010 and 2014 and billions in cost savings. Critics have raised concerns about the validity of the estimates (e.g., prevalence of “present on admission” coding in administrative data; declining rate of catheter-associated urinary tract infections inconsistent with CDC’s study).