Friday
Nov032017

Three Recent Studies and Three Different Perceptions of Value Based Payments

Three Recent Studies and Three Different Perceptions of Value Based Payments
 

by Clive Riddle, November 3, 2017

 

Three different recently released studies addressing value based payments fuel three different perceptions: (1) value based payments have solid momentum; (2) that hospitals view value based care is growing more slowly than anticipated; and (3) physicians prefer FFS systems to value based care.

 

The Health Care Payment Learning & Action Network has just released a report with survey results indicating “29% of total U.S. health care payments were tied to alternative payment models (APMs) in 2016 compared to 23% in 2015, an increase of six percentage points.” The Network states that “the survey collected data from over 80 participants, accounting for nearly 245.4 million people, or 84%, of the covered U.S. population.”  

 

While 29% of payments were value based and totaling “approximately $354.5 billion dollars nationally” in 2016, the Network determined that 43% of payments were “traditional FFS or other legacy payments not linked to quality” and 28% was “pay-for-performance or care coordination fees.”

 

Deloitte recently released results from their 2017 Survey of US Health System CEOs which includes are chapter on Population health and value-based care that provides these insights:

·         “Survey participants say the transition to value-based care is happening, but at a slower rate than initially anticipated. Still, many of the CEOs report that they are developing and expanding innovative delivery and payment models, and are focusing on MACRA and physician activation.

·         “Many CEOs also are looking into strategies to generate physician buy-in and encourage behavioral change, which will help them be better prepared for the transition to population health and value-based care.”

·         “Many of the surveyed CEOs express concern about operating under two different payment systems—FFS and value-based care—and having misaligned incentives. Moreover, moving towards population health and bearing financial risk likely will require a large patient population.”

·         “Many CEOs who previously had acquired and invested in physician practices report being more engaged and prepared for MACRA implementation than other survey respondents. “

·         “In our survey, some respondents indicate they are using tools including clinical integration, employment contracts with incentives, ACOs and risk-sharing agreements, among others to better activate physicians in care delivery transformation.”

 

Meanwhile, Bain & Company recently released their Front Line of Healthcare Report 2017, in which they surveyed 980 physicians and concluded that “more than 60% of the physicians we surveyed believe it will become more difficult to deliver high-quality care in the next two years as they struggle to cope with a complex regulatory environment, increasing administrative burdens and a more difficult reimbursement landscape. After years of experimentation, physicians now want evidence that new models for care management, reimbursement, policy and patient engagement will actually improve clinical outcomes. Without it, they see little reason to alter the status quo and move toward widespread adoption.”

 

Specific to physician receptivity toward value based care, Bain found that physicians very much prefer FFS if they had their druthers: “More than 70% of physicians prefer to use a fee-for-service model, citing concerns about the complexity and quality of care associated with value-based payment models. Fifty-three percent of physicians say that capitation reduces the quality of care, and most see little advantage from pay-for-performance models either. Further, many believe their organizations are not sufficiently prepared for the shift to value-based care.”

 
Friday
Nov032017

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition
 

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week:

 

House Tax Bill Would Scrap Deduction For Medical Expenses

The tax bill unveiled by Republicans in the House on Thursday would not, as had been rumored, eliminate the tax penalty for failure to have health insurance. But it would eliminate a decades-old deduction for people with very high medical costs.

Kaiser Health News

Thursday, November 2, 2017

Hospital groups to sue CMS over $1.6 billion cut to 340B program

Less than an hour after the CMS released the final rule, America's Essential Hospitals, the American Hospital Association and the Association of American Medical Colleges said they believe the agency has overstepped its statutory authority by cutting 340B drug payments by $1.6 billion, or 22.5% less than the average sales price.

Modern Healthcare

Wednesday, November 1, 2017

Panel Recommends Opioid Solutions but Puts No Price Tag on Them

President Trump’s bipartisan commission on the opioid crisis made dozens of final recommendations on Wednesday to combat a deadly addiction epidemic, ranging from creating more drug courts to vastly expanding access to medications that treat addiction, including in jails.

The New York Times

Wednesday, November 1, 2017

U.S. states allege broad generic drug price-fixing collusion

A large group of U.S. states accused key players in the generic drug industry of a broad price-fixing conspiracy, moving on Tuesday to widen an earlier lawsuit to add many more drugmakers and medicines in an action that sent some company shares tumbling.

Reuters

Tuesday, October 31, 2017

Money For Health Law Navigators Slashed — Except Where It’s Not

Despite all the efforts in Congress to repeal the health law this summer and fall, the Affordable Care Act is still the law of the land. People can start signing up for health insurance for 2018 starting Nov. 1. But the landscape for that law has changed a lot.

Kaiser Health News

Monday, October 30, 2017

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.

 
Friday
Oct272017

Fighting Healthcare fraud and over-prescriptions with predictive analytics

By Claire Thayer, October 31, 2017

Earlier this summer, the U.S. Department of Justice announced the largest ever health care fraud enforcement action, involving over 412 individuals across 41 federal districts, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Adoption of prescription drug monitoring programs is one way to hold health care providers accountable for overprescribing practices. Use of sophisticated claims analytic tools can help detect suspicious practice patterns as well. A health plan in the Midwest recently uncovered the case of an overprescribing neurologist using peer-to-peer analysis for comparison of practice patterns.

This recent edition of the MCOL Infographic, co-sponsored by LexisNexis, provides highlights from this case study:

 

Friday
Oct272017

CVS, Aetna, Retail Integrated Delivery Systems and the Strange World of Frenemies

by Clive Riddle, October 27, 2017

As widely reported, including in the Wall Street Journal, CVS is making a very serious bid to acquire Aetna for more than $200 a share, equating to $66 billion. The most often cited drivers behind this deal include:

  • CVS’s strategic response to Amazon’s potential entry into the pharmacy business
  • CVS strategic response seeking growth outside core business, after antitrust regulators rejected Walgreens/Rite Aid merger
  • Aetna strategic response seeking growth outside core business after antitrust regulators rejected Aetna/Human and Anthem/Cigna mergers
  • Aetna would serve as significant source of members for CVS PBM division, customers for CVS pharmacies and patients for Minute Clinics
  • CVS and Aetna’s strategic response to competitors aligning health plans and PBMs such as UnitedHealth acquisition of Catamaran

Much attention has been given to initiatives for integrated delivery systems between hospitals and medical groups that take on purchaser functions. Does this signal a different focus – on retail integrated instead of clinically integrated systems - bringing together pharmacies, retail clinics, health care coverage, wellness services, patient engagement and care coordination?

But Wall Street experts remind us that doesn’t mean this deal is a sure thing.  Things could fall apart simply due to details in the financial terms, or because of new changes in direction by competitors or in the overall market. The Street quotes Jeremy Bryan, a portfolio manager at Gradient Investments, a minor CVS shareholder: "There's just no case study for this. There could be regulatory hurdles. But we have cautious optimism." The Wall Street Journal states “The deal almost surely would attract close scrutiny from U.S. antitrust enforcers who have expressed concern about health-care consolidation.”

Assuming however there is a clear path forward for CVS and Aetna, the question remains for them what lies in wait for them down the road? A few potential concerns include:

  • Would the deal jeopardize the recently announced Anthem/CVS relationship whereby CVS will service Anthem’s new PBM?
  • Would the deal drive other competing health plans away from the CVS PBM and pharmacies?
  • What if CVS is counting on Aetna becoming a more significant force in Medicare Advantage to drive CVS PDP business, and Aetna fails to deliver?
  • What if the Trump Administration and Republican Congress succeed in further scaling back Medicaid, causing Aetna’s significant investment in Medicaid business to erode and become a drag on CVS overall performance?
  • What if Aetna focuses its pharmacy and retail clinic network offerings on CVS locations, and loses market share to competitor plans with broader offerings?

On the other hand, maybe the deal wouldn’t cause competitors to blow up relationships with CVS or Aetna. The Washington Post quotes Adam Fein, president of Pembroke Consulting: “This is part of the strange world of the health insurance and PBM industry. Many companies are frenemies.”

Friday
Oct272017

Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week:

CVS Health's surprising deal for Aetna? It's all about Amazon
Amazon.com Inc has gained approval from a number of state pharmaceutical boards to become a wholesale distributor, St. Louis Post-Dispatch reported on Thursday, citing public records.
CNBC News
Thursday, October 27, 2017

Trump Declares Opioid Crisis a ‘Health Emergency’ but Requests No Funds
President Trump on Thursday directed the Department of Health and Human Services to declare the opioid crisis a public health emergency, taking long-anticipated action to address a rapidly escalating epidemic of drug use.
The New York Times
Thursday, October 26, 2017

Amazon gains wholesale pharmacy licenses in many U.S. states: report
Amazon.com Inc has gained approval from a number of state pharmaceutical boards to become a wholesale distributor, St. Louis Post-Dispatch reported on Thursday, citing public records.
Reuters
Thursday, October 26, 2017

Trump health official Seema Verma has a plan to slash Medicaid rolls
With a broad overhaul of Obamacare stalled in Washington, one of President Trump’s top health care leaders is drawing the outlines of sweeping changes to Medicaid that could pare enrollments and cut costs without congressional approval.
Stat News
Thursday, October 26, 2017

ACA stabilization bill would lower deficit by $3.8B, CBO says
The Senate HELP Committee’s bipartisan Affordable Care Act stabilization bill would lower the federal deficit by $3.8 billion from 2018-2027, according to the Congressional Budget Office.
Fierce Healthcare
Wednesday, October 25, 2017

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.