Seeing 2014 Through the Fog: Anticipating the Impact of Personal Incentives Under Obamacare

---Terri Bernacchi, PharmD, MBA,  Senior Partner, Valiant Health

So what is it?  Will premiums go up by double digits or will they go down?  Is it possible that for a small group of people in some states, premiums will go down, but for a larger group of people on some exchanges or in some states, the premiums may be fairly criticized as “sky-rocketing”? 

It’s really hard to understand if any side in the health care debate is completely lying when the news headlines on what is coming are so completely polar opposites.  Is it possible that recent media “spin” on Obamacare’s health exchanges are fairly characterized as “lies, deceit and untruth”?  The political stakes are high, to be sure, but as people ask you for advice on what to do in their own personal situation, it would certainly be nice to be able to go somewhere and actually “see through the fog” on their behalf.   My premise is this:  people will do what is in their best interest, assuming they can see it. 

On Friday, Senator Harry Reid admitted to a PBS audience in Nevada, that the Accountable Care Act was always just a step toward a public system, getting there by pushing private health care insurers out of business.   At least now, the truth seems to be coming out as some portions of the new law (widely panned by experts and consultants on all sides of the political spectrum as a failure in process.)

An article by CNN Money noted that under the health care reform act, insurers must offer a package of essential benefits -- including maternity, mental health and medications -- and they must cover all who apply. The imposition of these richer benefits will cause price hikes in some states where a lower cost, bare bones policy may have been sufficient for coverage for young, healthy people in the past. Isn’t it logical then, for a primitive student of human behavior, to predict that some young, healthy people won’t want to take on the increased cost because they don’t “need” the additional benefit or the additional cost?  They’ll pay the $95 per year or 1% of their income to avoid a cost that may be $3,000 per year or more. 

• “Our analysis found that 21-year-old men will pay a lot more for an exchange plan, but 42-year-old women and 62-year-old men will shell out less for a silver-level plan that comes with a $2,500 deductible and a roughly $25 co-pay for office visits.”

It may be that part of what must happen as this mess unravels is that we must better understand what happens in terms of individual incentives.  If a premium increase is unaffordable and if the individual has other alternatives (including doing nothing), then young, healthy people can be expected to forego coverage, and older/unhealthy people will sign up for lower cost coverage.  Predictably, then the exchanges will fail under the weight of insufficient premium to cover incalculable risk.  And people will be begging for something to be done. 

Is this, therefore, given Harry Reid’s recent comments, an unintended consequence of a well-meaning public policy or is it the success that was anticipated all along, leading the country to a federally controlled, single-payer system?  

Link:  http://finance.yahoo.com/news/where-obamacare-premiums-soar-095700316.html?CFID=24988291&CFTOKEN=70696857&jsessionid=2e302825861375967192417   

http://www.forbes.com/sites/theapothecary/2013/08/10/sen-harry-reid-obamacare-absolutely-a-step-toward-a-single-payer-system/

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, 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. 

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. 

Cambria Releases White Paper: Health Care Reform & Star Ratings for Health Plans: How to Manage Through the Murkiness of Medicare’s New Realities

---Terri Bernacchi, PharmD, MBA, Cambria Health Advisory Professionals, Managing Partner at Quo Magis Partners

The entire white paper can be downloaded at the following link:  http://www.sharedhealthdecisions.com/5273/5294.html   This excerpt highlights the “5 Essential Pillars for Success” for Medicare Advantage plans. 

The Five Essential Pillars

Any team can only cope with what they understand.  Breaking the Star Ratings program down into bite-size pieces will make tackling these components more achievable so that challenges can be overcome and measure results maximized.   A manager should delegate specific goals to specific team members, so that no one person must manage it all.  In our estimation, there are five principals that can be applied to this effort.   Without any one of the following components in a fully operational state, a plan cannot hope to improve its rating: 

1.    Cohesive Team Pulling in the Same Direction

·         Plan executives must clearly state the goals, designate team members at all levels of the operation, in every department.  

·         Results should be part of the team and individual incentive /merit program.

·         Redundancy of critical functions should be built into the team, to plan for potential staff attrition in critical places.  An understudy will always be in place and ready for a chance “at bat”.    

2.     Communication-Up, Down, Sideways

·         Tracking results and targets requires careful and consistent communication of initiatives. 

·         In addition to routine meetings, email blasts, and conferences, the program or star manager must be willing to nudge already overworked colleagues to meet milestones and deadlines.

·         Communication requires careful listening to members, providers, technologists, and managers.  Sometimes the challenge itself has been misidentified, requiring a shift in strategy.  Without careful listening, the team could plow on in the wrong direction and completely miss the mark. 

3.    Access to Data- Timely & Accurate

·         Because there are a number of places where data is imported, cross- walked, converted, transferred to vendors or auditors, and later to CMS, any dropped or misaligned data could cost the plan meaningful points on the numerator or denominator.   

·         Processes to assure that the data is complete and accurate from the claims systems, which validate what is supplied to CMS, should be executed at least monthly to confirm the current state. This will also allow managers to tackle the measures which will have the greatest impact or which represent low hanging fruit for achieving results. 

·         Managers and Star Team Members need ready-access to that data so that they can troubleshoot problems or success early.

·         Instill in the team a little dose of “data skepticism” such that they don’t just accept results that “don’t look right”.  Waiting to identify a data process problem may result in a lack of time to act. 

4.    A Means to Navigate:  Technology/ Software

·         Access to data is not enough without a means to manage it.  The executive has a need to identify which providers are helping or hurting; which measures are lagging or improving; which team members are achieving results (or not).  

·         By identifying the challenges, managers can assign the most adept teams to focus on results at the provider, member, data or campaign level.   

·         Software that can capture the data, identify the priorities, and assign the resources to resolving them is an essential tool in achieving results, when implemented into Standard Operating Procedures.  Without such software, a team must rely upon many manual processes that could be costly to manage, with key tasks subject to “slipping through the cracks”.

5.    A Roadmap:  “Hope is NOT a good strategy”

·         Once a plan manager knows where the results lie, and where the gaps are, there is a need for the team to know what to do about it and how to do it.

·         The Roadmaps or “Campaigns” that a plan constructs to address specific measures should identify a strategy for pursuit of the mathematical result, incorporating tactics that may involve the provider community, the staff outreach department or the member himself. 

These campaigns imply an action-orientation whereby one is not just looking at the data, but is deploying resources under a specific program to achieve named and documented targets, perhaps over a short period, or over the whole year. 

More information regarding Valiant Health’s ProActive® Management technology can be found at www.valianthealth.com.

Terri is the founder of Cambria Health Advisory Professionals, and a Managing Partner at Quo Magis Partners. Among her current clients: a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders, a small special needs health plan as a 5 Star Consultant, and several other health related clients. The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Health Advisory Professional 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 her current employer three years ago. She has both a BS and a PharmD in Pharmacy and an MBA.

Is Electronic Prescribing (ERX) Hitting Its Stride?

---Terri Bernacchi, PharmD, MBA,  Cambria Health Advisory Professionals 

Although some may say, “it’s about time” that the electronic prescribing patterns started to show a real impact on how medicine is practiced, I think it is important for folks to consider how much of a change in process the use of ERX technology requires in the relationship between the physician and patient. 

A common perspective on “over-prescribing” of antibiotics in the past, for example, was that the acutely ill patient had an expectation that they would leave the office with something tangible----whether drug samples, or a written prescription. The physician fulfilled this expectation by writing something that would certainly “do no harm” and which may  produce some emotional or physical benefit.  Thus, if the patient had an expectation of an antibiotic (which may have been the sole reason for the visit), he or she would leave the office unhappy without a prescription. 

But as ERX has made its gains, the patient and physician now may huddle around a computer monitor or over a handheld device as the prescription is selected, the pharmacy chosen and confirmed, and the order issued.  The dynamic is different as some eye-contact is removed from the interaction as the doctor hands over the piece of paper. Yet the expectation may be the same—only with ERX, there is  greater likelihood the patient will actually have the prescription dispensed. 

Whether one welcomes or dreads the adoption of this technology, ERX adoption is growing, and there are fewer doubts that it will become the predominant means of communicating drug orders between prescribers and dispensers of the future.  I will comment more on this in coming months. 

Some key milestones have been met by the technology this past year:  The number of electronic prescriptions in 2011 increased to 570 million, up from 326 million e-prescriptions in 2010. By the end of 2011, an estimated 36 percent of prescriptions dispensed were routed electronically, up from 22 percent at the end of 2010.
http://www.healthcareitnews.com/news/national-report-shows-surge-e-prescribing-among-health-practitioners 

Terri is the founder of Cambria Health Advisory Professionals. Among her current clients: a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders, a small special needs health plan as a 5 Star Consultant, and several other health related clients. The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Health Advisory Professional 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 her current employer three years ago. She has both a BS and a PharmD in Pharmacy and an MBA.

Drug Reimportation Stemmed As Counterfeit Adderall Warning Issued

       by Terri Bernacchi, PharmD, MBA,  Cambria Health Advisory Professionals  

Although the general public may be in favor of freely purchasing drugs online or from Canada, there are some good reasons why traditional regulatory controls of these products are a reasonable responsibility of the federal government.  That statement is coming from a “free-market” libertarian minded person! 

The problem is that our FDA cannot sufficiently assure that the contents of a tablet are pure and labeled as what they ACTUALLY are.   A tablet full of placebo or active ingredient (or poison, for that matter) may look identical.  Offshore counterfeiters have become very sophisticated. 

Consider two recent stories and make up your own mind: 

• Counterfeit Adderall Being Sold Online: http://www.kvia.com/news/31134307/detail.html

“The bogus version was discovered "by a consumer, who noticed misspellings on the fake product packaging," according to Denise Bradley, Teva Pharmaceutical's vice president of corporate communications….

Teva's authentic 30mg Adderall tablets are round, orange/peach in color and are imprinted with "dp" on one side and 30 on the other side of the tablet. The tablets are packaged in bottles. The active ingredients in authentic Adderall tablets are dextroamphetamine saccharate, amphetamine aspartate, dextroamphetamine sulfate and amphetamine sulfate. An analysis of the counterfeit tablets revealed they contained tramadol and acetaminophen, both used to treat acute pain, and they were in blister package.   

• The Senate defeated an amendment that would have let Americans buy drugs from Canadian pharmacies.   The chamber voted down the amendment, sponsored by Sen. John McCain (R-Ariz.), in a vote of 43-54. http://thehill.com/blogs/floor-action/senate/229405-senate-defeats-mccain-amendment-on-canadian-pharmacies

Not surprisingly, the ever-compromised Senator McCain completely misses the safety question demonstrated by the first article.  The National Association of Chain of Drug Stores applauded the defeat of the amendment but probably has a bias in perspective. http://drugstorenews.com/article/nacds-lauds-prevention-personal-importation-prescription-medications

The problem about reimportation is not about pricing!  It’s a REAL safety issue!   There are people outside of the reach of our laws and our country that would sell us cow feces and call it Viagra for $4 a pop if they could get away with it. Some structure is necessary to keep the bad guys from hurting us.  This may be one of those structures, in my opinion! 

Terri is the founder of Cambria Health Advisory Professionals.  Among her current clients:  a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders. a small special needs health plan as a 5 Star Consultant, and several other health related clients.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Health Thought Leader 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 her current employer three years ago.   She has both a BS and a PharmD in Pharmacy and an MBA.