• Presenting Research in Compelling Ways: A Student Competition

    The following is an announcement from AcademyHealth about a student competition for which I will be a judge.

    AcademyHealth along with its Translation and Communication Interest Group will formally kick-off the second Annual Student Competition, “Presenting Research in Compelling Ways: A Student Competition” with a Google Hangout on Wednesday, January 28 from 4 – 4:30 p.m. EST. This competition will be held during our Annual Research Meeting (ARM) in Minneapolis, June 14-16, 2015. Students will present on the same prominent and recently published HSR study. Presenters will be given a time limit and creativity will be a focus. There will also be cash prizes awarded at the ARM to the top three presentations. Students may use various creative presentation styles such as PechaKucha, PowerPoint, Presentoon, Prezi, “Shark Tank” and more.

    Student members and Student Chapters of AcademyHealth are encouraged to attend. At the conclusion of the Google Hangout, participants will be able to:

    • Understand the format and guidelines of the Student Competition
    • Learn helpful hints and best practices from last year’s competition winner
    • Hear from Translation and Communication IG Member and the competition’s moderator, Dr. Felicia Mebane, regarding various options of presentation styles

    As an added bonus, those who participate in the Hangout will be the first to learn which published HSR study has been selected for this year’s competition piece. You won’t want to miss this great opportunity to get a leg up on your fellow competitors! The link to the Hangout may be found by clicking here. Please confirm your attendance by accepting the invitation. Feel free to share the invite with other student members of AcademyHealth who might be interested. (Note: A Gmail or Google+ account is recommended as Google users can post questions and RSVP before the event.)

    If you’re not an AcademyHealth member, students may join AcademyHealth for $40/year and take advantage of free educational webinars, learning development and networking opportunities, competitions like this one and more. Contact membership@academyhealth.org for more information.

    We look forward to your participation on Wednesday, January 28th. If you have any questions, please save them for the Q&A session during the Hangout or email them to Translation.CommunicationsIG@academyhealth.org. If you are unable to watch the live Hangout, the recording will be available immediately after at AcademyHealth’s YouTube channel.


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  • AcademyHealth: Reference pricing, what could possibly go wrong?

    I’ve written favorably about reference pricing in the past, but that does not mean it’s without limitations. I go over some of them in my new AcademyHealth post.



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  • Introducing the “Tweetable” button

    Matthew Martin (who has guest posted here previously) made a nifty button you’ll now find on TIE and on his blog. His explanation:

    What started essentially as a Twitter dare a while back between Austin and me has lead to the creation of the first-ever Tweetable button, which you can now find at the bottom of every post on TIE as well as my own blog, Separating Hyperplanes.


    When you click one of these buttons, it will highlight all of the sentences in the post that are short enough to tweet and link directly to Twitter with both the text and the post’s URL already loaded. All you have to do is click the Tweetable button, then click on the highlighted sentence you want to tweet.

    When a sentence highlights in Twitter-blue, that means that the sentence and link fit into no more than 140 characters. Sentences that are “almost-Tweetable,” meaning that they are more than 140 characters but less than 150, with the link included, will show up in off-white instead of blue, and will of course have to be edited down for size, but otherwise work the same.

    I did the programming, so if you have technical issues, then tweet me @hyperplanes or email me. But if you think we’ve unleashed evil on the world, the idea was all Austin’s.

    Give it a try below, if you’re reading this on TIE, as opposed to in your RSS reader or in an email. If you’re doing either of those things, click over to the blog and then try it. As for this being evil, it kinda is. I want what I think are very good sentences to also be tweetable. That’s going to affect my writing, though rarely. Only about 1 out of 1,000 of my sentences is any good.*

    * Each of the last three sentences was edited for tweetability. Also grammar. See? Evil.


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  • Hospital charges aren’t necessarily related to costs

    Hospital charges (which are not the same as prices actually paid) do not necessarily reflect costs, by design:

    In an open-ended question about the information that is used in setting charges for existing services, hospitals in large urban areas mentioned using cost information half of the time, while rural hospitals mentioned it only a quarter of the time. Similarly, two-thirds of the major teaching hospitals reported using cost data in the charge setting process compared to one-half of the non-teaching hospitals. A number of respondents indicated that hospital charges do not systematically reflect costs, with some exceptions. Generally charges for new items and procedures are those that are most likely to correlate in some way with hospitals’ actual costs. Hospitals also reported basing charges for supplies and pharmaceuticals on their costs. Methods for identifying costs varied widely for respondents due to different cost accounting systems and different assumptions for allocating costs across multiple departments.

    That’s from a now ten-year-old report by Lewin for MedPAC. (Is there anything more recent that suggests things have changed?)

    According to the report, other factors that inform establishment of charges include hospitals’ missions, competitive forces, influence of specific payers, community perception, managed care contract terms, and indirect cost allocation. “Many respondents referenced Medicare’s fee schedules and the schedules of other payers being used as a floor and point of reference for setting charges.”


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  • Birds from a jar

    Via Marty Fastag on Facebook:

    birds in jar@afrakt

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  • Quality in integrated delivery systems

    The prevailing view is that consolidation of health care providers does not improve quality and leads to higher prices. But it’s important to acknowledge that that conclusion may be driven in large part from work on hospital mergers. Other forms of integration may, in fact, be quality increasing.

    Unfortunately, there’s not a lot of work on other forms of integration, like hospitals acquiring physician practices or hospitals offering insurance products. Colleagues and I did find higher quality associated with hospital-health plan integration, though also higher prices. (To my knowledge, ours is the only paper to examine this type of integration.)

    A recent paper by Caroline Carlin, Bryan Dowd, and Roger Feldman* examines changes in quality associated with hospitals acquisition of multispecialty clinics:

    In their recent review of the empirical literature examining the impact of integrated delivery systems on cost and quality of care, Hwang et al. (2013) found only four peer-reviewed studies (Shortell et al. 2005; Mehrotra, Epstein, and Rosenthal 2006; Rittenhouse et al. 2010; Weeks et al. 2010) that examined the link between clinic ownership, or clinic size and structure, and quality of care. Mehrotra, Epstein, and Rosenthal (2006) compared horizontally integrated medical groups (IMGs) with the more decentralized independent physician associations, finding that IMGs provided higher levels of preventive care screening. Rittenhouse et al. (2010) found that physician practices owned by a hospital or health maintenance organization were more likely to use evidence-based care management processes. Shortell et al. (2005) found that medical groups affiliated with a hospital or health plan were significantly more likely to be in the top quartile of care management and health promotion indices. Finally, Weeks et al. (2010) compared the care received by Medicare patients in large multispecialty groups affiliated with the Council of Accountable Physician Practices (CAPP), a consortium of 27 large group practices, against care delivered by other practices in the same markets. They found that patients assigned to the CAPP practices received higher levels of evidencebased care. […]

    We examined changes in quality of care measures in three large, multispecialty clinics that were acquired by two hospital-owned IDSs [integrated delivery systems] in the Minneapolis–St. Paul area. We compared changes in quality indicators for the acquired clinics to nine control groups, using a differences-in-differences model. While the acquisition effects were small and, at least in these early postacquisition years, limited to cancer screening and appropriateness of ED use, our results suggest that integration of a clinic system into an IDS has the potential to improve quality of care. However, we also found an increased probability of ACS [ambulatory care sensitive] admissions when the acquisition caused disruption to existing physician–hospital admitting relations.

    This body of work is still not very large — and not all studies use particularly strong methods — so I don’t think we should confidently conclude that all manner of integration apart from hospital mergers is quality enhancing. Still, it does seem that the literature to date is leaning that way (discounting publication bias as well). Note that even if this is so, it does not imply that quality cannot be enhanced without integration. Additionally, examination of prices is important as integration of any type can increase market power.

    * Disclosure: I have worked with Roger in the recent past. Bryan is a longtime colleague.


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  • Medicaid fees and access to care

    A new paper in NEJM by Daniel Polsky and colleagues sheds light on the impact of an increase in Medicaid payment rates to selected providers in 2013 and 2014. The increase of fees, which bumped up Medicaid payments to Medicare levels, was part of the ACA and designed to increase access to primary care for Medicaid enrollees. The fee increase expired on January 1, 2015.

    The fee bump was substantial. On average it raised Medicaid reimbursement for primary care by 50%.

    The investigators used the secret shopper method, calling providers to assess the availability and wait times for appointments for either new Medicaid or new privately insured patients in ten states. Their data spanned November 2012 through July 2014. They found that

    [t]he availability of primary care appointments in the Medicaid group increased by 7.7 percentage points, from 58.7% to 66.4%, between the two time periods. The states with the largest increases in availability tended to be those with the largest increases in reimbursements, with an estimated increase of 1.25 percentage points in availability per 10% increase in Medicaid reimbursements (P = 0.03). No such association was observed in the private-insurance group. During the same periods, waiting times to a scheduled new-patient appointment remained stable over time in the two study groups.

    Some comments:

    • One of the chief, longtime complaints about Medicaid, heard across the political spectrum, is that it pays too little, harming access and care. There’s even a big lawsuit about it.
    • This study is strong evidence that the bump down in payment that occurred at the start of this year will adversely affect access. “Currently, only 16 states plan to continue the reimbursement increases,” the authors wrote.  So, a problem has been identified (Medicaid pays too little), a solution tested (pay more), with clear outcomes (better access, by one measure). The policy implications are fairly clear.
    • There are a number of limitations discussed in the paper. I want to add or emphasize two:
      • I believe the observed effect is causal, at least in direction. It’s completely reasonable that higher payment begets greater access, as it was measured. It’s possible, though, that other factors also affected Medicaid access, even relative to privately insured patients. Perhaps greater education and outreach as part of coverage expansion played a role, differentially affecting providers’ willingness to offer care to Medicaid vs. privately insured patients. We can’t be sure. Still, a stronger study design for the policy as implemented is hard to develop. We didn’t randomize states to fee increases, for instance.
      • There are other, important ways to measure access, as I have discussed. It is possible that the degree of access as it was measured in this study (via secret shoppers) differs from that as measured in other ways (like surveying patients, both with new or continuing coverage). It’s important to examine both aspects of access, as well as consider access to specialists. This study only considered one type of access to primary care.

    For all that, it’s a very good study. To be sure, we should continue to collect data and study access. Still, about the Medicaid fee bump, I’m ready to say to policymakers, it’s your move.

    (See also Harold Pollack’s post, which makes some of the same points, only with a lot more style.)


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  • HMO or ACO? What’s the difference?

    The following originally appeared on The Upshot (copyright 2015, The New York Times Company).

    In pursuit of greater efficiency in the United States health system, public programs and private insurers have begun to pay some hospitals and physicians differently. These new payment models take many forms, but they all impose greater responsibility for cost control and quality improvement on providers and bear some resemblance to failed health care financing arrangements from the 1990s. However, there are some distinctions that could make all the difference.

    recently announced partnership that includes Anthem Blue Cross in California and seven Los Angeles-area hospital systems exemplifies these new models. Some have called “Anthem Blue Cross Vivity” (or just “Vivity”) bold and game-changing. It has characteristics of managed care plans more popular in the 1990s — like health maintenance organizations — as well as those of more modern accountable care organizations, or A.C.O.s. It has been characterized as both. What’s the difference?

    As reported by my colleague Reed Abelson, the ambition of the new venture is to provide coordinated, high-quality care normally associated with big-name, integrated systems like Kaiser Permanente, Intermountain Healthcare and Geisinger Health System. Such systems are the inspiration for accountable care organizations, which vary in form but generally contract with Medicare, Medicaid or private insurers to provide integrated care for a large population of patients and can earn bonuses for meeting cost and quality targets or, in some cases, be penalized if they don’t.

    Vivity is positioning itself as the antidote to high health-insurance premium growth in California, five times faster than inflation in recent years. It will team up with hospitals and doctors to provide coverage at 10 percent below the typical cost of a large-employer health plan by “aggressively manag[ing] care,” with little to no cost sharing, both characteristics of 1990s-style managed care. Vivity will also operate under a fixed, per-patient budget, called capitation, which was also a characteristic of some 1990s managed care plans. Participating providers must meet quality benchmarks (as yet unspecified), and Vivity’s partners will share in profits and losses, which are characteristics of accountable care organizations.

    Vivity is not alone. In a recent commentary in The Journal of the American Medical Association, Zirui Song and David Chokshi described other initiatives by private insurers intended to control health spending by changing how they pay doctors and hospitals. One of them is Massachusetts Blue Cross and Blue Shield’s Alternative Quality Contract. With it, the insurer has contracted with 15 provider organizations to purchase care under prespecified budgets (with some protections so that providers aren’t at full risk for all costs) with quality-contingent bonuses. A recent survey of private health plans revealed that about 3 percent of their spending is under similar contractual arrangements. Some state Medicaid programs, in Illinois and elsewhere, are also experimenting with accountable care organizations. And Medicare has initiated several A.C.O. payment models that organizations may voluntarily join.

    Do accountable care organizations just offer H.M.O.-style managed care by another name? My colleague Rick Mayes, of the University of Richmond, and I addressed this question in a paper published in Health Affairs. We concluded that the accountable care organizations, by and large, are devised more in response to the shortcomings of H.M.O.s than as a copy of them.

    Consider, as we did, capitation. One way to view the relationship between an insurer — whether a private company or a public program — and a health care provider (like a hospital or physician group) is the extent to which each bears the risk of health care costs. When care is more costly than expected, who pays the difference? Or, when care is cheaper, who pockets the profit? Capitation is at one extreme: It puts all the financial risk of care on providers because they get a fixed annual or monthly payment per patient no matter how much care the patient uses. This is better for insurers, since it provides budget certainty for them. Though risky for providers, capitation offers them greater incentive to manage care and its costs; but it raises the concern that they’ll economize by providing less care than patients require.

    Contrast capitation with more typical financial arrangements in which insurers bear most or all of the risk of health care costs. When it began in 1965, Medicare — like most insurers at the time — paid doctors whatever cost they claimed, so long as it was “usual, customary and reasonable.” And Medicare originally paid hospitals their claimed costs plus a bit more, a built-in profit. If a patient used more care, the doctor or hospital got paid more and the insurer bore the extra cost.

    Though Medicare and private insurers have since moved away from standards such as these, by and large they have not moved very far. Most health care policy experts point to this feature of health care in the United States as one of the major contributors to its growing costs.

    An exception to this type of financing was the experiment with capitation in the 1990s. Its ascendance at that time was fueled in part by managed care organizations’ desire to limit financial exposure. By the end of the decade, about one-third of physicians had capitation contracts, accounting for 21 percent of their total revenue. However, many providers were unable to keep the cost of care below capitation rates and suffered large financial losses. Many survived only by growing larger, consolidating with other provider groups, gaining sufficient clout to negotiate more favorable terms with insurers, including getting out from under capitation entirely.

    Capitation and H.M.O.s waned after the 1990s, but some think they’re coming back under the guise of accountable care organizations and that they will, therefore, suffer the same fate. That’s not quite right. Accountable care organizations are not H.M.O.s. As the Harvard health economist David Cutler wrote in his recent book, the latter are insurers that “dictate to doctors and patients what they are allowed to do and what they cannot,” which was a significant source of friction between patients and insurers in the 1990s. Accountable care organizations, in contrast, are providers that “decide on good care and work with patients to provide that care.” Another difference that improves the experience of Medicare patients is that Medicare accountable care organizations do not require beneficiaries to receive all their care within the organization for it to be reimbursed, as H.M.O.s typically would.

    A.C.O.-like contracts typically do not rely on full capitation. Instead, they usually put providers at risk for a portion of the cost of care; that risk is shared with insurers, somewhat sidestepping a major financial challenge to providers under 1990s-style capitation. Another big difference is that 1990s H.M.O.s and capitation contracts didn’t require providers to meet quality targets to receive full payment. Today’s accountable care organizations tie bonus payments to quality, a feature intended to mitigate against providers sacrificing quality for lower cost. Finally, accountable care organizations are developing in a climate of far better information resources — electronic medical records and techniques for using the data they collect for quality measurement and improvement — than existed in the 1990s.

    So, in a variety of ways, the design of accountable care organizations has evolved from that of capitation-based H.M.O.s. Nevertheless, both capitation and the accountable care organization model encourage providers to integrate. If accountable care organizations are able to use greater market clout to negotiate higher prices, they may not lead to the savings many hope for. Indeed, coinciding with the rise of accountable care organizations or in response to it, a growing number of hospitals have merged, integrated with physician groups or offered their own insurance products, among other types of alliances that increase market power.

    The takeaway is this: New health care payment models have evolved from those that proved unsustainable in the past, but that doesn’t mean they’re guaranteed to be long-term successes. Vivity is not just the next H.M.O.


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  • AcademyHealth: NICE’s application of cost-effectiveness threshold(s)

    The United Kingdom’s National Institute for Health and Care Excellence (NICE) strictly applies a cost-effectiveness threshold to make its care coverage recommendations, right? Actually, no. See my latest AcademyHealth post for the details.

    Related to that post is a comment in Health Economics by Karl Claxton and colleagues titled “Causes for concern: Is NICE failing to uphold its responsibilities to all NHS patients”? I’m not going to comment on the contents of that comment apart from a meta point. Below is the opening paragraph.

    In 2007, the UK’s Office of Fair Trading suggested that the prices paid by the UK National Health Service (NHS) ought to be based on an assessment of the value that each drug offers (Office of Fair Trading, 2007). The type of economic evaluation already undertaken for NICE’s technology appraisals can identify the maximum price the NHS can afford to pay; where the additional benefits offered by the drug just offset the benefits expected to be lost or ‘displaced’ elsewhere because the additional resources required are not available to offer care, which would benefit other NHS patients. It is this principle, of paying the maximum, but no more than the maximum, for branded pharmaceuticals (and only whilst they are protected by their patent) that became known as value-based pricing (VBP) (Claxton, 2007; Claxton et al., 2008). Aside from estimating the additional costs and benefits that a new drug might offer, two other questions are critical: (i) how much health is expected to be displaced (an evidence-based assessment of the cost-effectiveness threshold); and (ii) how to establish mechanisms that would enable manufacturers to negotiate value-based prices in the UK that might be lower than in other countries (Claxton, 2007; Claxton et al., 2011)?

    My meta point is this: The paragraph exemplifies just how huge a gap there is between the UK and the US in even considering cost effectiveness criteria. Look how many cost-effectiveness related UK institutions and concepts seem to roll off the tongues of these authors. One could barely write such a paragraph about the US and if one did, one would not be referencing any significant agencies or policies that are actively engaged in cost effectiveness. We just don’t do that here. We hardly ever discuss it. And if we do, we get an earful about how it’s anathema to the nature of health care.


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  • Cost effective doesn’t mean affordable

    NICE is also struggling with Sovaldi:

    The problem is that NICE doesn’t account for affordability in its guidance. One need only consider that the threshold has remained unchanged for over a decade to see that this is true. How to solve this problem really depends on what we believe the job of NICE should be. Should it be NICE’s job to consider what should and shouldn’t be purchased within the existing health budget? Or, rather, should it be NICE’s job simply to figure out what is ‘worth it’ to society, regardless of affordability? This isn’t the first time that an NHS organisation has appealed against a NICE decision in some way. Surely, it won’t be the last. These instances represent a failure in the system, not least on grounds of accountability for reasonableness. Here I’d like to suggest that NICE has 3 options for dealing with this problem; one easy, one hard and one harder.

    The rest is here.


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