Life Science Compliance Update

152 posts categorized "Healthcare Reform"

March 13, 2015

OIG Issues 2015 Health Reform Oversight Plan


HHS-OIG recently released their 2015 Health Reform Oversight Plan. The agency plans to hone in on the Affordable Care Act during 2015, with “primary focus” on the health insurance marketplaces. 

Health Insurance Marketplaces

OIG’s Oversight Plan states that their marketplace work will aim to answer questions in four key areas:

Payments: Are taxpayer funds being expended correctly for their intended purposes?

OIG plans on continuing their oversight into the accuracy and appropriateness of Federal expenditures with reviews of Financial Assistance Payments; Consumer Operated and Oriented Plan (CO-OP) Loan Program; Establishment grants; Navigator grants, and payments to Federal contractors.

Eligibility: Are the right people getting the right benefits?

To ensure accuracy in eligibility determinations, OIG is conducting reviews of marketplace enrollment safeguards, eligibility verifications for premium tax credits, and resolution of inconsistencies in federally facilitated Marketplace (FFM) applicant data. Further, OIG states that they are considering new work on emerging issues, such as Marketplaces’ verification of employer information. “We may also review eligibility for hardship waivers if that emerges as a significant issue as this year’s tax season progresses,” they state. Additional areas for oversight might include reviews of the second open enrollment period.

Management and Administration: Is HHS managing and administering Marketplace programs effectively and efficiently?

To assess the management and administration of Marketplace programs, OIG is currently reviewing HHS’s management and implementation of the FFM from enactment of the ACA through the second open enrollment period and continued oversight of Federal contractors.

Security: Is consumers’ personal information safe?

OIG’s security focused reviews include assessing FFM security controls over consumer information, including personally identifiable information. OIG will also review information security controls at selected State-based Marketplaces. OIG states they are working closely with HHS and law enforcement partners in other agencies to monitor for reports of cybersecurity threats and consumer fraud incidents and take appropriate investigative actions

Health Reform in Other HHS Programs

“Although we are devoting substantial attention to the Marketplaces…OIG is also conducting and developing oversight work addressing reforms in other programs,” their report states. These include Medicaid expansion and services, Medicare payment and delivery reform, Medicare and Medicaid program integrity, and public health programs.

Under the Medicare and Medicaid Program Integrity work, OIG states that they “are examining the implementation and effectiveness of provisions of Title VI of the ACA designed to strengthen transparency and program integrity in Medicare and Medicaid,” including reviews of enhanced provider screening systems, provider payment suspensions, provider terminations, and managed care encounter data.

OIG also states: “We will consider oversight of CMS’ new Open Payments Database and other Title VI transparency initiatives.”


Target Timeframes for Issuing Reports on Ongoing Marketplace Work

Winter 2015: OIG looks to be focused on payments in the early part of 2015:

  • Accuracy of Aggregate Payments to Qualified Health Plan Issuers for Advanced Premium Tax Credits and Cost Sharing Reductions, and Effectiveness of Related Internal Controls (Payments)
  • Payments to Federally Facilitated Marketplace Contractors (Payments)
  • Information System Security Controls at State-Based Marketplaces – CA (Security)
  • Review of Affordable Care Act Establishment Grants for State Marketplace – MD (Payments)
  • Programmatic Justification for CMS’ Involvement in Premium Tax Credit Obligations Under the ACA (Payments)

Spring 2015:

  • CMS’ Internal Controls Over Advance Premium Tax Credit Obligations and Payments Under the ACA (Payments)
  • Oversight of Federally Facilitated Marketplace Contractors (Management and Administration)
  • Review of Affordable Care Act Establishment Grants for State Marketplaces (Payments)
  • CO-OP Loan Program-Eligibility Status and Use of Startup and Solvency Loans – 6-month period (Payments)
  • Enrollment Safeguards at Additional State Marketplaces (Eligibility)
  • Information System Security Controls at State-Based Marketplaces – CO (Security)
  • CMS Implementation of Security Controls Over Consumer Information Obtained in the Federally Facilitated Marketplace (Security)
  • Review of the Federally Facilitated Marketplace’s Eligibility Verifications for Premium Tax Credits (Eligibility)

Summer 2015:

  • Implementation of the Federally Facilitated Marketplace (Case Study) (Management and Administration)
  • CO-OP Loan Program-Eligibility Status and Use of Startup and Solvency Loans – 12-month period (Payments)

Fall 2015:

  • Review of Grant Awards to Navigators in Federally Facilitated or State Partnership Marketplaces (Payments)
  • Information System Security Controls at State-Based Marketplaces – NY (Security)

 View the entire report here


March 10, 2015

NLARx Dissolves--The National Legislative Association on Prescription Drug Prices Formed in 2000 Called It Quits Last Month


The Board of Directors of the National Legislative Association on Prescription Drug Prices (NLARx) has voted to dissolve. The NLARx was formed in 2000 as a coalition of state legislators that set their sights on the pharmaceutical industry’s pricing of medicine and fought for reforms in marketing, clinical trials, and a host of other issues they believed were responsible for increasing drug prices.

“In large part, the very success of the Association has led to the Board's decision that this is an appropriate time to wind down the organization,“ states NLARx. “While prescription drug costs remain a significant portion of medical costs, and there are still patients who cannot afford their medications, much of what the founders of NLARx set out to do has been accomplished.”

They note that "the issues of prescription drug access and pricing have been subsumed into the overall health care debate, and are being addressed within that context."

"Many of the state legislators who have been active participants in the NLARx network over the past 15 years have also been also deeply involved in seeking to provide universal access to health care in their respective states," the Association states, and “[o]ver the past few years, more and more of their attention has been focused on how to address health care access and cost issues systemically.”

NLARx's press release lists some of the issues that the association advocated for, including Medicare Part D, in order to expand access of reasonable drugs to seniors. Furthermore, "[s]tate legislation in the late 1990's and early 2000's focused on alternative strategies to limit excessive prices through supplemental state Medicaid rebates, Medicaid waivers, group purchasing and negotiation, 340B program expansions and reference pricing."

NLARx also looked back on the past 15 years, during which transparency has spread into all facets of medicine:

Outside of the pharmacists and insurers who had to deal with them, and a few state Attorneys General investigating Medicaid kickbacks, no one in the year 2000 knew what a PBM was; now states around the country have PBM transparency laws. There were no laws at either the state or federal level requiring that spending on pharmaceutical marketing and gifts to prescribers be disclosed or regulated -- policies now incorporated into the Physician Sunshine Payments Act included in the ACA and based on state laws enacted across the nation. Information about most clinical trials was not available unless a pharmaceutical company wanted to share it, and public clinical trial registries didn't exist; after state litigation exposed significant issues, state and federal databases, including, were created.

One of the stated reasons for dissolving has been a lack of financial resources. NLARx has been in the forefront of publicly denouncing pharmaceutical companies, and to their credit were successful in passing many state laws and many of their principles were then adopted in the Affordable Care Act. This may signal that the public war against life industry may be winding down.

January 28, 2015

21st Century Cures Initiative Introduces Significant Legislative Proposal


In April 2014, Energy and Commerce Committee Chairman Fred Upton (R-MI) partnered with Rep. Diana DeGette (D-CO) to launch the 21st Century Cures initiative with an important goal: to accelerate the discovery, development, and delivery of new treatments and cures for patients. Over the course of nearly a year, patients, providers, innovators, regulators, and researchers from around the country provided a wide range of specific ideas on how Congress could help. Yesterday, the House Energy and Commerce Committee took a major move forward by releasing an initial discussion draft of the 21st Century Cures Act, which outlines many of the promising legislative proposals, drafted by both Republicans and Democrats.

It has been reported that among the 10,000 known diseases, 7,000 of which are considered rare, there are treatments for only 500. According to Dr. Francis Collins, Director of the National Institutes of Health (NIH), it now takes “around 14 years and $2 billion or more” to develop a new drug and “more than 95 percent of [such] drugs fail during development.” The 21st Century Cures Initiative has spent a year building a solution to this problem. Their draft is broken down into five key sections, which address the following priorities:

(1)    Putting patients first by incorporating their perspectives into the regulatory process and addressing unmet needs

“Patients are ultimately at the core of this initiative,” the Energy and Commerce Committee states. “A series of proposals are included in Title I to empower patients and foster an economic and regulatory environment more conducive to addressing their unmet needs.” This section includes policies on patient focused drug development, biomarker qualification, antibiotic drug development, dormant therapies, and innovative device review pathways.

(2)    Building the foundation for 21st Century medicine, including helping young scientists

“Leveraging recent advances in science and technology, researchers have uncovered new ways to proactively diagnose and treat patients in a more precise manner based on their unique set of circumstances,” states the Committee. Title II includes a series of proposals intended to help aid in the discovery, development, and delivery of the next generation of patient-centered solutions here in the United States, by establishing the 21st Century Cures Consortium, fostering innovation in health information technologies through the SOFTWARE Act, and helping young scientists.

(3)   Streamlining clinical trials

Legislation in Title III seeks to address the often-criticized trend towards increasing time and cost involved in conducting clinical trials in the United States. “By reducing regulatory overlap and administrative inefficiency, in addition to encouraging broader utilization of efficient, flexible trial designs, provisions in Title III would help modernize the development and assessment of potential new treatments and keep clinical trials from moving overseas by improving the cost and speed of trials,” notes the Committee.

(4)    Accelerating the discovery, development, and delivery cycle and supporting continued innovation at NIH, FDA, CDC, AND CMS

Title IV includes a wide-ranging series of proposals intended to streamline regulatory processes and equip federal public health agencies with the tools needed to ensure they are able to keep pace with innovation. "To help address the various issues that have contributed to this unacceptable bottleneck, a biomedical working group would be established to make recommendations on how scientists in this country can spend more time finding cures and less time filling out paperwork," states the Committee. Title IV also includes a series of proposals that would streamline various regulatory processes for new vaccines. Further, Title IV incorporates the hard work of the bipartisan telemedicine working group and will set the stage  for new technologies to play a greater role in the delivery of quality health care services to Medicare beneficiaries. Exemption of CME and reprints from Sunshine Act reporting is also listed in this section (see page 344). 

(5)    Modernizing medical product regulation

Finally, Title V consists of policies developed to encourage modern manufacturing technologies here in the United States as well as provisions intended to update certain medical device regulations.


View the Energy and Commerce Committee’s 7-page White Paper on the 21st Century Cures Act: Probably the best starting point for working through this massive document.

View a section-by-section of the discussion document here: The Energy and Commerce Committee lays out each legislative proposal with a brief description – a much more user friendly version than the whole bill.

View the 400 page first release of legislative ideas here.

View a one-pager highlighting the legislative ideas here.

As the legislation moves through the process, Committee Chairman Fred Upton (R-Mich.) notes “everything is on the table, as we hope to trigger a thoughtful discussion toward a more polished product." The committee requests specific feedback from all interested stakeholders about how to improve the legislation. Submit your specific suggestions to or contact committee staff with any questions. “The committee will continue on an aggressive schedule to introduce 21st Century Cures legislation and ultimately send a bill to President Obama’s desk for signature by the end of the year,” the Committee notes. “The inclusion of a policy in this draft should not be seen as an endorsement.”

Updated, 1/28/2015, 10:00 am:

Democrats, including Rep. Degette and U.S. Rep. Frank Pallone (D-NJ) expressed varying levels of enthusiasm for the draft.

DeGette issued the following statement after Upton released potential proposals that have been submitted for inclusion in the 21st Century Cures initiative, which Upton and DeGette have been leading:

“From the beginning of the 21st Century Cures initiative, Chairman Upton and I have paid special attention to public engagement, idea-sharing, and feedback. In that vein, I appreciate his effort today to publicly share possible legislative language on a number of proposals that might be included in an eventual bill. As Chairman Upton and I begin to draft the bill itself, we look forward to receiving feedback on the issues identified in his draft document and other suggestions. While I don’t endorse the draft document, I know that with continued engagement, we can reach a bipartisan consensus to help advance biomedical research and cures.”

Pallone, Ranking Member of the House Energy and Commerce Committee, stated in a Press Release: "I am disappointed that the discussion document released today by Chairman Upton does not reflect true bipartisan collaboration." He continues:

“In its current form, I am concerned that the nearly 400 page draft could create more problems for our health care system than it solves.  Further, the draft does not include any real dollars to fund additional basic research at the National Institutes of Health. Increased funding was a common theme during last year’s public engagement, from both sides of the aisle, and is fundamental to truly advancing 21st century cures. 

“Moving forward, I stand ready to work with Chairman Upton, and all Members of the Energy and Commerce Committee, to find bipartisan consensus legislation that would pass the House and the Senate and ultimately be signed by the President.”


January 27, 2015

Secretary Burwell Announces HHS Quality Payment Goals, Introduces Timeline For Shifting Medicare Reimbursements From Volume to Value


Big changes are on the horizon in how Medicare reimburses healthcare providers. Yesterday, the Secretary of Health and Human Services (HHS), Sylvia Burwell, announced a timeline and measurable goals to move the Medicare program toward reimbursing providers based on the quality, rather than the quantity, of care they give their patients. 

The shift from the traditional fee-for-service Medicare payment structure to a more outcome-based model hinges on "alternative payment models." These payments emphasize patient outcomes over getting paid for individual medical services, notes Burwell. "In alternative payment models, providers are accountable for the quality and cost of care for the people and populations they serve moving away from the old way of doing things, which amounted to 'the more you do, the more you get paid.'"

In 2011, Medicare made almost no payments to providers through alternative payment models, according to HHS. Today, alternative payments tied to "quality" represent approximately 20 percent of Medicare payments. HHS aims to get that up to 30 percent by the end of 2016, and 50 percent by the end of 2018. 

Burwell expounded upon these models in yesterday's blog post announcing the government's plan: 

[T]hrough Accountable Care Organizations, providers partner together on a patient’s care and get rewarded for delivering better care while spending less. In a Patient Centered Medical Home model, instead of doctors working separately in their own siloes, care coordinators oversee all the care a patient is getting.  That means patients are more likely to get the right tests and medications rather than getting duplicative tests, procedures, etc. These medical homes typically offer patients access to a doctor or other clinician 7 days a week, 24 hours a day including through extended office hours on evenings and weekends.

Another example is a “bundled payment” model.  In this model, providers are reimbursed together for the entire cost of what’s called an “episode of care” – something like say a hip replacement.  So lab tests, pre-visits, hip replacements, and so forth are all paid for in the same lump sum – whether the same test is conducted once, twice or five times.  This creates an incentive to deliver better care that makes patients healthier and keeps them out of the hospital.

A major aspect of the government's effort relies on incentives to drive providers to these alternative payment models. Burwell lists two other strategies. First is a focus on "care delivery," which Burwell indicates will be developing policies to encourage greater integration within practice sites, coordination among providers, and attention to population health with a priority on prevention and wellness. “With more emphasis on coordinated care, patients are more likely to get the right tests and medications rather than taking tests twice or getting procedures they do not need,” her announcement states. Second, CMS is also working on information sharing to create more "transparency on the cost and quality of care, to bring electronic health information to inform care, and to bring the most recent scientific evidence to the point of care in order to bolster clinical decision-making."

HHS also announced the creation of a Health Care Payment Learning and Action Network, through which HHS will work together with private payers, employers, consumers, providers, state Medicaid programs, and other partners to expand alternative payment models beyond Medicare. 

A blog announcing the new value goals from Secretary Burwell is here, and a perspectives piece in the New England Journal of Medicine from Secretary Burwell is here.


The response to the reforms has been cautiously optimistic.  American Medical Association President Robert Wah said many of his members were frustrated and anxious about changes in the system and that while he was “encouraged” by the announcement, physicians needed more flexibility in the way the payments would be administered to be able to participate, the Wall Street Journal reports

Pharmaceutical Research and Manufacturers of America (PhRMA) president and chief executive officer John J. Castellani issued the following statement on Secretary Burwell’s announcement:

“PhRMA supports Secretary Burwell’s goal of advancing affordable, high quality and patient centered health care, and today’s announcement represents an important step forward."

“New medicines make important contributions to value in health care for patients, payers and policymakers, and we look forward to working with the secretary on this new initiative. As HHS works to evaluate and expand new models of health care payment and delivery, we believe it is essential they:

1)    Incorporate clear mechanisms for recognizing the value of new treatment advances, such as precision medicine and other new tests and treatments;

2)    Are grounded in strong quality measures and incentives, with emphasis on outcomes that matter to patients;

3)    Support shared decision making between providers and patients, which is informed by high quality evidence about the full range of available treatment options; and,

4)    Are transparent and enable manufacturers and other stakeholders to work collaboratively in support of high-quality, high-value health care.

Read PhRMA's Principles for Payment Delivery and Reforms here


October 15, 2014

Hospital Compare: Controversy Surrounds What to Report

Our continued coverage of the CMS Open Payments website includes transparency-related issues regarding the Physical Payment Sunshine Act and also a look at similar CMS projects. In particular, in August it was announced that CMS quietly stopped publicly reporting when hospitals leave foreign objects in patients' bodies or make a host of other life-threatening mistakes. But in September, CMS reversed course and will resume releasing data on hospital mistakes, including when foreign objects are left in patients' bodies or people get the wrong blood type. Recent reports suggest CMS's efforts are a part of the agency's larger transparency policy efforts we have seen over the past few years.

CMS's Hospital Compare website began reporting hospital-acquired condition (HAC) data in October 2011. The website includes data such as hospital rates of infections, mismatched blood transfusions, pressure ulcers, and objects left inside surgical patients.

In August, CMS cited National Quality Forum's (NQF) support for the decision to stop reporting particular sets of hospital data. Upon a closer read, NQF's support is analogous to an argument we make about Open Payments. Specifically, an NQF spokesperson argued that the panel decided to drop some of the data because it was not "appropriate for comparing one hospital to another." A majority of the quality forum's members represent consumers, insurers and others who buy health care, but the spokesperson acknowledges those who do not work full-time in the field — as hospital officials do — could find the process confusing. Similarly, stakeholders of Open Payments worry that data used to compare physicians to one another may be misunderstood. Or perhaps even worse, attributed to the wrong physician.

Another interesting perspective was reported in 2011 when CMS first started to release hospital data. Gregg Meyer, M.D., Senior Vice President for Quality and Patient Safety at Massachusetts General Hospital, attacked the credibility of CMS's data. He argued that administrative data is not a reasonable mechanism to use to select on hospital over another.

"I would argue that some of the institutions that have a relatively high number of HACs are safer by virtue of the fact that they are more open and transparent, they have a better reporting system in place and they are doing something about these conditions," Meyer concluded.

Ultimately, CMS reversed course, and now says it will make hospital mistake data on eight "hospital-acquired conditions" (HACs) available on its website. This decision comes in the face of opposition from hospital officials that argue some incidents, such as foreign objects left in bodies, don't happen often enough for the information to be reliable.

We will continue to report on the Hospital Compare website, as this is likely not the end of the controversy over what information is most appropriate to establish a sufficient level of "transparency". Already, according to CMS, the agency removed HACs that were rare events and therefore difficult to track reliably.

September 25, 2014

“Doctoring in the Age of ObamaCare” Sheds Light on the Mounting Administrative Tasks that Take Physicians Away From Patients

Steth and Comp

A recent editorial published in the Wall Street Journal entitled "Doctoring in the Age of ObamaCare" provides a glimpse at a day in the life of an endocrinologist working in solo private practice. Dr. Mark Sklar has experienced the changing healthcare landscape over the past two-decades, and argues that “[t]he practice of medicine in the current environment is unsustainable.”

Today, doctors must demonstrate “meaningful use” of electronic health records, call insurance companies to pre-authorize drugs for coverage, and adjust to quality reporting requirements. Furthermore, doctors may have to front questions about their collaborations with industry as the Open Payments database goes public at the end of the month. All of these ancillary tasks, while potentially intended to help patients, have actually taken almost all the time away from one-on-one patient care. 

“Although it is convenient to have patient records accessible on the Internet,” Dr. Sklar notes that “the data processing involved has been extremely time consuming—a sentiment echoed by most of my colleagues.”

Dr. Sklar was advised to enter data into the electronic record during his patients’ office visits, but he notes that typing in the data during the appointment was disruptive. “My eyes were focused on the keyboard and the lack of direct contact kept patients from opening up and discussing their medical and personal problems,” he states. “I soon returned to my old method of dictating notes and pasting a print-out of the dictation into the electronic record.”

The financial incentives (and now penalties) from Medicare, however, are based on doctors demonstrating "meaningful use" of the electronic record. Doctors must document that they covered a checklist of items during an office visit. Dr. Sklar notes that he spends “90 minutes each day entering mostly meaningless data. This is time better spent calling patients to answer questions or keeping updated with the medical literature.”

Unfortunately, all the work put into digitizing this information does not translate to interconnected patient records. “If electronic records ever allow physicians to obtain data from previous laboratory and imaging testing, it will improve costs and patient care,” Dr. Sklar states. “So far, however, the data in electronic records—like paper charts—can't be shared unless physicians work in the same health-care system.”

Dr. Sklar notes that he “quickly adopted the new Medicare requirements for electronically prescribing medications.” Often, however, he found that his patients did not want their prescription sent electronically. “They want a physical copy—either because they don't trust the Internet or because they don't need to fill the prescription immediately,” according to Dr. Sklar. “If I don't electronically prescribe for a certain number of Medicare patients, I am penalized with a decrease in reimbursement that can rise to a maximum of 5%. Patients should have a choice in how their prescriptions are delivered, and physicians shouldn't be penalized for how the patients choose.”

In addition to EHR requirements, Dr. Sklar discusses the time-consuming process of pre-authorization. "To prevent physicians from prescribing more costly medications and tests on patients, insurers are increasingly requiring physicians to obtain pre-authorizations," he states. "This involves calling a telephone number, often being rerouted several times and then waiting on hold for a representative. The process is demeaning and can take 30-45 minutes." Dr. Sklar believes that instead of requiring physicians to pre-authorize, the high cost of brand name drugs should be addressed. 

Furthermore, to avoid Medicare penalties, doctors also must participate in the Physician Quality Reporting System program. "Initially, this involved choosing three codes during the patient visit to reflect quality of care, such as blood pressure or blood-sugar control, and reporting them to Medicare," states Dr. Sklar. "In 2015, the requirement will increase to nine codes."

Dr. Sklar also takes issue with ICD-10, which, while postponed from the October 2014 deadline, is still on a lot of doctors' minds. The present ICD-9 system has about 15,000 medical diagnostic codes that doctors use for billing insurance. The newer system will contain about 70,000 codes. "The Physician Quality Reporting System and ICD-10 requirements are intended to benefit population research," Dr. Sklar notes, "but the effect is to turn physicians into adjuncts of the Census Bureau who spend time searching for codes—and to further decrease the amount of direct contact with patients."

Dr. Sklar concludes:

The multiple bureaucratic distractions in my day consume so much time that I have to give up what little personal time I have in the morning, evening and on weekends if I want to continue to provide excellent care during office hours.

If high-quality medical care is the goal, the bureaucracies need to be tamed. Our government and insurance companies understandably want to measure outcomes of health-care dollars spent. However, if the health-care system rewards data entry, that is what it will get—the quality of care seems an afterthought.

Open Payments

While not addressed in Dr. Sklar's piece, the pending Open Payments release threatens to further drive a wedge in between the patient and the doctor. The Open Payments system will publicly show a doctor's financial relationship with pharmaceutical and device manufacturers. Collaboration between industry and physicians is often an essential element of innovation. However, without proper context in the news or in the system itself, physicians may be responsible for justifying their industry work to any patient who may ask. 

Lance K. Stell, a medical ethics specialist and teacher at the Department of Internal Medicine at Carolinas Medical Center, recently spoke to this issue from a practical perspective given the immense strains on doctors' time.

He asks: “In our 10 minute interview, would you prefer that I spend more time discussing the details of my reimbursement, industry consulting and visiting with industry reps and
less time discussing your medical condition, test results & treatment options or the reverse?"  

Additional Studies

Last year, the Journal of General Internal Medicine published a study that found that internal medicine interns spent only a minority of their time directly caring for patients. The New York Times featured the study and noted that new doctors’ average face-to-face time with patients is around eight minutes. “Instead, current interns spend the majority of their time in activities only indirectly related to patient care, like reading patient charts, writing notes, entering orders, speaking with other team members and transporting patients,” the article stated.

“The dramatic decrease in time spent with patients compared with previous generations appears to be linked to new constraints young doctors now face, most notably duty hour limits and electronic medical record-keeping.”

Because most documentation must be done electronically, the study found that interns now spend almost half their days in front of a computer screen.

July 23, 2014

Healthcare Has to Innovate Without Forgetting Therapeutic Innovation

Healthcare leaders "don't have a choice" but to innovate, author, consultant and futurist Ian Morrison told the National Healthcare Innovation Summit.

Morrison is the author of several books including, most recently, Leading Change in Healthcare: Building a Viable System for Today and Tomorrow and The Second Curve - Managing The Velocity of Change. We frequently write about medical innovation, including a recent guest post by Jack Lewin, MD, the President and Chief Executive Officer of the Cardiovascular Research Foundation.

"We have to innovate," Morrison said at the Boston summit. "We have hit a wall." Morrison described several nationwide healthcare trends that create an urgent need for change and new ideas.

Some of what Morrison has observed about the U.S. healthcare system as he has traveled around the country include:

  • A move toward both public and private health exchanges for the purchase of health insurance.
  • The country is learning to live on Medicare, which means reducing costs by 10 to 20 percent. "All the assets in the old model become liabilities in the new model," he said.
  • Massive consolidation of hospitals continues with the expectation that there will be 100 to 200 large regional systems around the country. The accepted view is "you have to be big, and you have to be integrated," Morrison said, adding the question: "How do you get these behemoths to really innovate?" He later noted, "More of these large behemoth businesses are willing to take the risks. They are getting into the health plans."
  • Employers, who have been purchasers of health insurance for their employees, are showing signs of an exit. "Every purchaser has become an activist about wellness – some would say 'Stalinist,'" Morrison said.

As also reported by Health IT News: Morrison argued that there are two competing visions for the U.S. healthcare system: The Berwickinian Nirvana (named for Donald Berwick, former CMS Administrator) of the large ACOs that encourage rationalization of the delivery system and the atomistic view of a consumer armed only with high deductible health plans that will impose market discipline on providers."

"Those two visions need to be reconciled," he said.

There is so much work left to do that requires innovation, Morrison said. He rattled off a few: clinical integration, health IT as platform, learning to live on Medicare, managing business model migration, building a culture of quality and accountability.

"We have the anatomy of an accountable care organization but none of the physiology," he commented.

"When you get in the Triple Aim (improve afforability, improve the patient experience and improve health) work, you have to think in different kinds of innovations," Morrison said. "You have to open your mind. You've got to get serious. I don't think we're going back to the 1970s. The purchasers have had it; they're not going to take it anymore."

One area continually missing from the quality improvement community in discussions around innovation is the lack of discussion around therapeutic innovation. We are not living an extra 10 years because of better organized healthcare. On the contrary we are living longer because life science companies have invested billions in creating innovation that allows us to lead longer and fuller lives. Until that discussion is addressed we are simply focused on moving healthcare workers into larger closed systems which in the end have a hard time innovating.

June 19, 2014

Accountable Care Organizations: Patients Look Elsewhere for Specialty Care


A study recently published in JAMA Internal Medicine found the majority of beneficiaries assigned to an accountable care organization went outside of their assigned ACO for specialty care.

According to Becker's Hospital Review, using Medicare claims data from 2010 to 2011 and lists of physicians who participate in ACO programs, the researchers examined the proportion of patients whose assignment to an ACO in 2010 was unchanged in 2011, the proportion of office visits that occurred outside of the ACO and the proportion of Medicare outpatient spending billed by the ACO that was devoted to assigned patients.

The study made the following findings:

  • 80 percent of the beneficiaries assigned to an ACO in 2010 were assigned to the same ACO in 2011.
  • Beneficiaries with fewer conditions and office visits were more likely to have ACO assignment changes.
  • 9 percent of office visits with primary care physicians were provided outside of beneficiaries' assigned ACOs.
  • The number of beneficiaries seeking outpatient specialty care outside of their assigned ACO was greater for higher-cost beneficiaries and occurred often even among specialty-oriented ACOs.
  • 38 percent of Medicare spending on outpatient care billed by ACO physicians was for assigned beneficiaries


Study authors include J. Michael McWilliams, MD, PhD; Michael E. Chernew, PhD; Jesse B. Dalton, MA; Bruce E. Landon, MD, MBA, MSc, representing the Department of Health Care Policy at Harvard Medical School, the Division of General Internal Medicine and Primary Care at Brigham and Women's Hospital and Harvard Medical School, and the Division of General Internal Medicine and Primary Care at Beth Israel Deaconess Medical Center's Department of Medicine.

The study concludes that care patterns among beneficiaries served by ACOs suggest distinct challenges in achieving organizational accountability in Medicare. Continued monitoring of these patterns may be important to determine the regulatory need for enhancing ACOs' incentives and their ability to improve care efficiency.

In a related commentary, Paul B. Ginsburg, Ph.D., University of Southern California, Los Angeles, writes: "There is broad consensus among physicians, hospital and health insurance leaders, and policy makers to reform payment to health care providers so as to reduce the role of fee for service, which encourages high volume, and instead to use systems that reward better patient outcomes, such as bundled payments for a population or for an episode of care."

"Inspired by successful shared savings contracts between private insurers and health systems … the Affordable Care Act accelerated this movement by defining Accountable Care Organizations (ACOs), specifying how ACOs are to be paid and how they are to relate to beneficiaries. But the legislation essentially left beneficiaries out of the equation, not offering incentives to choose an ACO or to commit – even softly – to its health care providers. This absence may severely undermine the potential of this approach to improve care and control costs," Ginsburg continues.

"The results of the study by McWilliams and colleagues confirm the seriousness of failing to link Medicare beneficiaries with ACOs," Ginsburg notes.  "By creating a formal and mutually acknowledged relationship between ACOs and beneficiaries, health care provider organizations that make the investments needed to coordinate care, manage chronic diseases and manage population health would be more likely to succeed," Ginsburg concludes.

January 13, 2014

Improving Insurance Equals Better Quality Care

Health care disparities are commonly analyzed along lines of socioeconomic status, age, geography, and race; however, a new study, published in Health Affairs, concludes that the quality of care within any given hospital varies based on patients' insurance. Specifically, the study revealed that "Medicare patients appeared particularly vulnerable to receiving inferior care."

Using inpatient data from hospitals in 11 states, the researchers compared risk-adjusted mortality rates within hospitals for patients according to their insurance status. The researchers found that "privately insured patients had lower risk-adjusted mortality rates than Medicare enrollees for twelve out of fifteen quality measures examined." As reported in FierceHealthcare, the difference in quality was significant. Mortality rates for Medicare patients were over 100% higher for hip replacement and esophageal resection procedures. Overall, Medicare patients averaged 5.85 more deaths per 1,000 patients compared to privately insured patients in the same hospital. Privately insured patients also had lower risk-adjusted mortality rates compared to patients in other payer groups, although the difference in quality was less significant.

FierceHealthcare notes that the researchers hypothesized the disparity in quality was due, in part, to "delays or restrictions in care and unequal access to newer technology. Privately insured patients also may have doctors who provide them with more individualized treatment, or have access to 'newer, more expensive treatments.'" In the study abstract, the researchers conclude "that to help reduce care disparities, public payers and hospitals should measure care quality for different insurance groups and monitor differences in treatment practices within hospitals."

The results of this study reinforce general conclusions made by the Agency for Healthcare Research and Quality (AHRQ). In the 2012 National Health Disparities Report, the authors note that AHRQ previously concluded that "health insurance [is] the most significant contributing factor to poor quality of care in some of the core measures of quality," and those with no insurance and public insurance are more likely than those with private insurance to face challenges getting needed medical care.

As previously reported in Policy and Medicine, hospitals are at the forefront of the Obama Administration's efforts to improve quality and care coordination. With new quality reporting measures in the pipeline, implicating key elements of the Affordable Care Act's hospital value-based purchasing and hospital readmissions reduction programs, this study reveals that quality improvement within individual hospitals is tied to consistency in treatment practices across patient insurance groups.

October 21, 2013

UK Hospitals Post Excessively High Death Rates

Over three years ago, when Congress was debating the Affordable Care Act, many hoped that the final legislation would include a public health option—in other words, government run healthcare, which is present in many European countries. Fortunately, Congress was smart and did not include a government run insurance option in the legislation that passed in March 2010. Why were we so fortunate?

A recent report from Channel 4 News in the U.K. revealed figures showing that National Health Service (NHS) hospitals (the government run health program) have death rates "among the worst" compared to other countries. In fact, Channel 4 found that NHS patients are 45% more likely to die in a hospital than the United States. Due to privacy, the article was not able to reveal the other five countries.

The figures prompted Sir Bruce Keogh, medical director of the NHS, to say he will hold top-level discussions in a bid to tackle the problems. "I want our NHS to be based on evidence. I don't want to disregard stuff that might be inconvenient or embarrassing...I want to use this kind of data to help inform how we can improve our NHS," he told Channel 4 News.

Numerous reports and inquiries have revealed serious failings in the National Health Service. From the Bristol heart babies to Mid Staffordshire, fundamental problems with care have been exposed. But what Channel 4 News revealed "is previously unpublished data which shows just how badly our hospital mortality rates compare with other countries. And never more so than for the elderly."

"The data is the work of Professor Sir Brian Jarman, who pioneered the use of hospital standardised mortality ratios (HSMRs), as a way of measuring whether death rates are higher or lower than expected and which are adjusted for factors such as age and the severity of the illness," the article noted.

"It was by using HSMRs that Professor Jarman was able to identify the higher than expected mortality rates at the Mid Staffs trusts. For more than a decade, Professor Jarman has also been collecting hospital data from six other advanced economy countries, adjusting them where possible to take into account the different health systems."

"The 2004 figures show that NHS had the worst figures of all seven countries. Once the death rate was adjusted, England was 22% higher than the average of all seven countries and it was 58% higher than the best country. "That meant NHS patients were almost 60 per cent more likely to die in hospital compared with patients in the best country."

While the data is from nearly 10 years ago, and the NHS has been through several reforms and given additional government funding, it was "still among the worst and has death rates 45% higher than the leading country, which is America."

NHS medical director Sir Bruce Keogh told Channel 4 News that there are still "too many patients dying in our hospitals when their relatives were expecting them to come home."

Channel 4 then explained why America ranked much better than NHS. Accordingly, Channel 4 looked at the Mayo Clinic Hospital in Phoenix, Arizona, which is "in the best two per cent in the country. It is an impressive hospital, with piano music playing in the lobby and sunshine streaming into the rooms."

The article explains that one reason for the hospital's success is the introduction of a "number of safety systems, including a check and recheck system between the pathology labs and the operating theatres." In addition, they Mayo Hospital has "had multi-disciplinary team rounds in which everyone from the consultant to the physician, from the nutritionist to the social worker is involved in the care of that patient." This means "better communication" and everyone "is treated as an important part of the team, rather than deferring, in the traditional way, to the consultant."

Professor Richard Zimmerman, a neurosurgeon at the Mayo Clinic Hospital, acknowledges that this can be labour intensive with a dozen or more people involved in each round for each patient, but he said it is cost efficient in the end. However, he noted that "It is less expensive than having a lot of deaths and having admissions that last longer because you don't do it right the first time."

While some criticize American hospitals because the U.S. spends more on equipment, drugs, and staffing levels, and the health insurance system is not perfect, Channel 4 notes that the data still show—"American hospitals are better."

"They have more per staff per patient, for instance. But what stood out at the Mayo was the attitude to mistakes or near misses. Staff are actively encouraged to report these. Whistleblowers are welcomed. Because they do not want these mistakes repeated."

"If you go to the States doctors can talk about problems, nurses can raise problems and listen to patient complaints," Professor Jarman said. Conversely, the U.K. has "a system whereby for written hospital complaints only one in 375 is actually formally investigated. That is appalling, absolutely appalling," Jarman said.

What is equally, if not more appalling, though are Professor Jarman's HSMRs for the elderly (in this case classified as over 65). "For conditions which kill a large number of patients in hospitals and most often affect the elderly like pneumonia and septicaemia, patients are significantly more likely to survive in an American hospital." Consequently, it "was this data that Professor Jarman said encouraged him to speak more openly about his concerns about the NHS."   Thomas Sullivan, Editor


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