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The Health Care Cost Institute processed data from 1.78 billion commercial claims filed between 2012 and 2016 in 112 U.S. cities, including six California metropolitan areas, in its nationwide comparison of healthcare-services costs, reports State of Reform. The analysis showed that costs across San Jose, San Francisco, San Diego, Los Angeles, Oxnard and Riverside — as well as the rate of price increases — were not uniform between 2012 and 2016. San Jose was the second most expensive city in the national analysis, while Riverside was the 48th most expensive city. Researchers also found that outpatient costs in San Jose were 117 percent above the national average in 2016.
In 2014, Colorado Center on Law and Policy (CCLP) joined with consumer groups to address the high cost of specialty drugs in Colorado to open a dialogue with the state's Division of Insurance (DOI) and health insurers to address the unmanageable out-of-pocket costs, according to Health Affairs. Many plans charged coinsurance of up to 50 percent of the cost of drugs of the highest tier is discriminatory against people with disabilities and chronic conditions, in violation of the Affordable Care Act. Colorado's DOI enacted a regulation effective June 1, 2018, prohibiting plans from putting more than Most recently, Colorado’s DOI took decisive action by promulgating a regulation, effective June 1, 2018, prohibiting plans from putting more than half of drugs for a particular condition on the highest cost tier. Though it is difficult to assess whether enforcement of the rule will affect premiums, increases for 2019 individual plans are modest—an average of just 5.6 percent. Plan specifics for 2019 plans are now publicly available, and a review of formulary tiering for HIV drugs reveals some significant improvements from 2018. If carriers do not comply with the regulations of the ACA, the DOI should exercise its authority to assure that Coloradans have full access to the health care benefits and services they need.
Wyoming’s Volunteer Health Services Program, which shields providers or medical facilities willing to provide voluntary, free services to low-income residents from legal liability, has been approved by the legislature, according to the Casper Star Tribune. To participate in the new program, providers enter into a contract with the state that technically makes them state government employees or facilities, granting them sovereign immunity for the free care they provide. A patient wishing to participate must have an annual income that’s at or below 200 percent of federal poverty levels.
California implemented a pay-for-performance program in safety-net hospitals that incentivized measurement and improvement in key areas of ambulatory safety: referral completion, medication safety and test follow-up. A study in Health Affairs found that wide-scale measurement of ambulatory patient safety faces challenges, particularly for complex measures that require the integration of different types of data. Researches also documented wide variation in performance on a broad range of ambulatory patient safety measures. Health systems generally performed better in areas that require only a single contact with a patient and limited patient engagement or coordination with other providers. To prevent harm to patients in ambulatory care settings, the authors argue that hospital systems need research and policies that incentivize the adoption of robust data infrastructure as well as the development of measures in all areas of ambulatory patient safety.
In Ohio, the Office of Health Transformation, created in 2011, convenes all agencies that touch healthcare, including Health, Medicaid, Mental Health and Addiction Services, Jobs and Family Services, Veterans Affairs, Administrative Services, as well as representatives of the private insurance market -- to dedicate some time to reforms and long-term health improvement and to agree on which population health goals are most urgent, according to Governing. The Office helped develop an integrated eligibility system so Medicaid beneficiaries could see whether they also qualified for food assistance, child care, child welfare and cash assistance after the state expanded its Medicaid program. Additionally, to prevent providers from declining to see the patients with the biggest mental health needs, and to help those patients avoid having to hunt down doctors who would see them, the state identified the 5 percent of patients that were the costliest in behavioral health and matched them with a provider who could best serve them. As a result of these efforts and Medicaid expansion, Ohio has made large strides in transforming healthcare delivery in the state.
Blue Cross Blue Shield of Massachusetts, the state's largest health insurer, is trying a new strategy to tackle healthcare costs: putting hospitals on a budget, according to the Boston Globe. Blue Cross will be paying hospitals not per patient and procedure but for how well they control costs while trying to keep patients healthy, rewarding hospitals when they collaborate with physician groups to manage costs and improve outcomes. Hospitals are still rooted in a fee-for-service system and represent the biggest portion of healthcare costs (accounting for more than one third of the $61.1 billion in MA) so this shift in incentives in the hospital system is historic. Blue Cross is testing the model with South Shore Hospital in Weymouth, and if it goes well it will begin to offer the program to other Massachusetts hospitals by 2020.
Maryland implemented the Health Enterprise Zone Initiative in 2013 to improve access to healthcare and health outcomes in undeserved communities, by attempting to reduce healthcare costs and avoidable hospital admissions and readmission, according to a report in Health Affairs. In each community, the Health Enterprise Zone was a collaboration between the local health department or hospital and community based organizations, designed to attract primary care providers to undeserved communities and help support community efforts to improve health behaviors. This initiative was associated with a reduction of nearly 20,000 inpatient stays and an increase of around 40,000 emergency department visits between the study period of 2013-2016. The net cost savings of the reduction in inpatient stays greatly outweighed the initiative's costs to the states. This initiative could be modeled in other communities as a way to reduce healthcare costs.
CMS has approved a North Carolina Medicaid reform demonstration to move from traditional fee-for-service payments to a managed care delivery system. The reform model is an attempt to increase quality of service as well as create a more predictable budget, according to Health Affairs Blog. North Carolina will partner with health plans in an effort to target high-need Medicaid patients and better coordinate care. Among other innovations, the state will pilot an intervention in select regions that addresses social determinants of health including food security, housing instability, reliable transportation, toxic stress and interpersonal violence.
An analysis from the Catalyst for Payment Reform, the Virginia Center for Health Innovation and the Virginia Association for Health Plans found that 67 percent of healthcare payments to Virginia physicians and hospitals by commercial insurers in 2016 were tied to value. The report was based on an examination of data from commercial and Medicaid managed care plans insuring 4.6 million Virginians. Other key findings include: 80 percent of value-oriented commercial insurer payments were in hospital contracts, 41 percent of value-based Medicaid managed care payments were in primary care, and the most commonly used value-based payment model was Shared Savings.
The Minnesota Attorney General Lori Swanson targeted drug manufacturers in a lawsuit for inflating the cost of insulin medication, according to the Star Tribune. Swanson is accusing others of being complicit in price-gauging sick patients with diabetes as well as the drug manufacturers. The lawsuit named three drug companies, Sanofi-Aventis, Novo Nordisk and Eli Lilly, that have tripled the list prices of their synthetic insulin medication since 2002. These medications are crucial to people with diabetes to manage their blood sugar and reduce their risk of disability, even death. Swanson is saying part of the price hike is due to the rebate structure implemented by pharmacy benefit managers (PBMs) who have ignored the impact of these rising costs have on patients. PBMs currently play a role in deciding which drugs are listed on insurance companies' preferred list. Because the PBM profits come through rebates, manufacturers have incentives to curry favor with them by raising prices and inflating rebates. Rising prices of insulin have raised concern over the past year with everyone from the President to Senator Amy Klobuchar appealing directly to insulin manufacturers, demanding legislation to compel the companies to lower their prices. Minnesota is the first state to bring a case against the insulin manufacturers.