Dueling Data Games: Demographics vs. Provider Patterns?

---John Campo, Vice President, Business Development, Valiant Health  (see also http://www.valianthealth.com/blog/dueling-data-games-demographics-vs-provider-patterns1/)

Various forums like Health IT, academia, and the health care bloggers are abuzz with a fascinating, but controversial study released on May 28, 2013 that addresses the long held belief that some regions have wasteful medical practice patterns. The new paper concludes that individuals’ health differences around the country explain between 75 percent and 85 percent of the cost variations.  When the primary author, Dr. Patrick Romano, noted that “People really are sicker in some parts of the country,” he set in motion a debate with the conventional wisdom against the work of the Dartmouth Institute for Health Policy & Clinical Practice.  Dartmouth’s three decades of research has propagated a theory that regional differences in Medicare spending is mostly due to the aggressiveness of the medical community (and attributing it mostly to individual profit incentives).

The answer to this question is critical because it is driving CMS strategies to reduce Medicare spending.  The Institute of Medicine, at the request of Congress, is continuing to investigate the question.  

Regardless of whether the new study turns out to be correct or if the IOM substantiates the findings of the Dartmouth group, it makes for an interesting debate with high stakes in terms of CMS payment strategies.  Plans, ACOs, and all types of providers will be involved in looking at data in various ways like local/provider specific analyses to regional/national benchmarks.  Providers should expect to conduct patient and population level analyses and measure results, comparing them to expected norms and explaining the variances.

 This will be particularly important as providers and plans engage in any kind of pay-for-performance or risk sharing arrangements, such as those expected under Accountable Care Organizations.  They must have systems in place to offer point-counter-point perspectives that establish quality results and justify the occasional outlier.  Link for different perspectives:   

• http://www.healthcareitnews.com/news/pop-health-explains-medicare-disparities?topic=04,28,19
• http://www.kaiserhealthnews.org/Stories/2013/May/28/medicare-state-geographic-variation-costs.aspx

John Campo is responsible for Valiant Health’s growth, including client engagement and satisfaction. He brings over 15 years of diversified healthcare experience to Valiant Health. Prior to joining our leadership team, John founded and owned the CAMPO Group: Strategic Managed Care Consultants where he engaged leading pharmaceutical, biotechnology, specialty pharmacy, and health insurance clients. John’s background includes healthcare contracting, trade relations, reimbursement, specialty pharmacy distribution, quality improvement and Medicare. His leadership background includes working for a Fortune 500 PBM, HMO, and Specialty Pharmacy organization in leadership roles as well as being responsible for Managed Markets National Account Management for a large ethical US Pharmaceutical firm. He holds a BS in Business from Brescia University. 

Hospital Readmission Penalties Create Continued Policy Debate

---Terri Bernacchi, PharmD, MBA,  Senior Partner, Valiant Health (See also:  http://www.valianthealth.com/blog/hospital-readmission-penalties-create-continued-policy-debate/ )

 

A by-product of CMS’ cost reduction efforts associated with payment (or penalty) for quality results, is the much vilified Star Rating measure on All-Cause Hospital Readmissions. These efforts hit the Medicare Advantage plan’s Star Ratings results but also impact hospitals Medicare reimbursement rates directly. 

Two-thirds of hospitals are now facing readmission penalties totaling approximately $280 million in 2013, according to experts.  These 2,271 U.S. hospitals were found to have readmission rates higher than the CMS models predicted, and each of them will receive a penalty this year, as high as 1% of their reimbursement for Medicare patients. (Penalties will increase to 3% by 2015.)

The number of hospitals penalized is much higher than most observers would have anticipated on the basis of CMS's previous public reports, which identified less than 5% of hospitals as outliers.  (See NEJM Article by Drs. Karen E Joynt, MD & Ashish K. Jha, MD)  Path Forward on Medicare Readmissions at http://www.nejm.org/doi/full/10.1056/NEJMp1300122 )

The debate includes concerns that the safety-net hospitals caring for a higher proportion of members with socio-economic challenges are those least able to afford a penalty. Most agree, however, that setting a lower quality standard for these hospitals would not be ideal.   Many hospitals (and associated Medicare Advantage Plans) now have placed special focus on “helping patients make the transition from inpatient care to outpatient or community settings”.  A key part of this coordination is the ability to identify and intervene early in the hospitalization and post-discharge course.

See Links:  http://www.chrt.org/blog/the-aca-and-the-hospital-readmissions-policy-debate/

          http://www.nytimes.com/2013/03/30/business/hospitals-question-fairness-of-new-medicare-rules.html?pagewanted=all&_r=0

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

Health Systems Around the World Could Learn From MA

John Campo, Vice President, Business Development, Valiant Health (See: http://www.valianthealth.com/blog/health-systems-around-the-world-could-learn-from-ma-plans/)

A new study by the Boston Consulting Group (BCG) suggests that health systems around the world can learn a lot from the care-delivery models used by private payers in U.S. Medicare Advantage plans. 

BCG concluded that Medicare Advantage plans, which impose classic managed care techniques to an elderly population, as compared to traditional Medicare fee-for-service plans, vary in a couple of key ways. 

1. Focused on mechanisms designed to encourage the delivery of cost-effective quality care
2. Identify  and focus on clinical best practices
3. Tap into a selective network of providers
4. Apply active care management strategies based on prevention to minimize expensive acute care

BCG’s study included an analysis of claims data for 3 million Medicare patients. They concluded that on three internationally accepted dimensions of health care quality—single-year mortality, recovery from acute episodes of care requiring hospitalization, and the sustainability of health over time—patients enrolled in Medicare Advantage plans had better outcomes than those participating in Medicare on a traditional fee-for-service basis.

Medicare Advantage plans in the US are under continued scrutiny to “prove” quality by meeting established benchmarks for various domains, including patient satisfaction, quality outcomes, access to care, and use of preventive services.  MA plan executives are faced with fee reductions if quality metrics are not met under “Star Ratings” programs imposed by CMS.

See Links:  http://finchannel.com/Main_News/Business/127573_Managed_Medicare_Advantage_Plans_Demonstrate_Better_Outcomes_for_Patients/
http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-134145

John Campo is responsible for Valiant Health’s growth, including client engagement and satisfaction. He brings over 15 years of diversified healthcare experience to Valiant Health. Prior to joining our leadership team, John founded and owned the CAMPO Group: Strategic Managed Care Consultants where he engaged leading pharmaceutical, biotechnology, specialty pharmacy, and health insurance clients. John’s background includes healthcare contracting, trade relations, reimbursement, specialty pharmacy distribution, quality improvement and Medicare. His leadership background includes working for a Fortune 500 PBM, HMO, and Specialty Pharmacy organization in leadership roles as well as being responsible for Managed Markets National Account Management for a large ethical US Pharmaceutical firm. He holds a BS in Business from Brescia University.

Achieving 5 Stars on the Rx Side—The Secret?

---Terri Bernacchi, PharmD, MBA,  Senior Partner, Valiant Health (www.valianthealth.com )

http://www.valianthealth.com/blog/achieving-5-stars-on-the-rx-sidethe-secret/

To succeed in an increasingly challenging reimbursement environment, Medicare Advantage plans must work in close collaboration with physicians to identify at-risk populations and facilitate interventions that that improve quality and lower cost.  That is true for both the Part C & Part D portions of the program.

Some Medicare Advantage plans will thrive at the top of the quality ratings heap no matter what happens in the surrounding environment.  Those plans have some common elements that give them a weighty advantage in terms of statistics and actual results.  The common themes?  Cooperative providers, clean data management processes, enabled clinical teams and executive leadership, and a clear, prioritized plan.  In a phrase, they are able to exert maximal control over the variables that drive results which drive reimbursements.  

Kaiser Permanente, for example, attributes its success to “a deep understanding of the star measures along with internal and external organizational processes and protocols”.  They believe this has allowed the plan to achieve a Part D summary rating of 5 in 7 of the 8 regions. 

Matt Nye, the vice president of Pharmacy Care Support Services, National Pharmacy Programs and Services of Kaiser Permanente spoke at the Academy of Managed Care Pharmacy’s spring meeting in San Diego in April 2013.  His discussion included a brief company overview: coverage of 9 states and D.C. with 8.9 million members, 165,000 employees, 15,000 physicians, 36 hospitals and medical centers, and 1.05 million Medicare members. Nye noted that Kaiser’s program includes outpatient, inpatient, and ambulatory care pharmacies and services, home infusion, drug distribution, mail order and central fill operations, and centralized services.

Kaiser has some advantages in drug therapy management relating to its business model:  it is an integrated practice model.  He noted that they have placed an emphasis sharing accountability between physicians and pharmacists to ensure the appropriate use of medications. 

Even if a plan does not have the benefit of “owning” the full scope of clinical, distributive, and practice infrastructure, the lessons learned from Kaiser can still be applied.  Using technology and data management techniques, internal and organizational processes can be aligned to create common incentives and opportunities to maximize quality results to assure success in the current and future years.

Link:  http://www.ajmc.com/conferences/AMCP_Spring-2013/Optimizing-Care-Deliver-with-Medicare-Star-Ratings-The-Successes-and-Challenges-of-Managed-Care-Organizations

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA.