• AcademyHealth: The financial protection effects of health reform, evidence from Massachusetts

    Over on the AcademyHealth blog I summarize some new evidence on the financial protection effects of the Massachusetts health reform. There’s actually very little research on just this, so you definitely want to take a look.

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  • The Advisory Board’s health care crossword

    The back-story is here. Click on the image below for a full-sized PDF of the puzzle. Enjoy!

    CrosswordPhoto

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  • Feedback from readers on high deductible health plans

    In response to the recent content on high deductible health plans, by email, a reader asked,

    I am wondering what you all may think about high deductible coupled with high value services that can be covered in full regardless of whether deductible had been met. Things like insulin for those diagnosed with diabetes, for example. To an outside, more casual observer it seems like the argument is often to have deductible or not and less about how we can use the deductible.

    Indeed, this has come up on TIE, and more than once. I discussed it when reviewing John Goodman’s book. This idea is also consistent with the value-based insurance design paradigm. We have a tag for that!

    Coincidentally, David Napoli (@Biff_Bruise) wrote me with this interesting, related implementation problem:

    If one takes a value-based design approach to the overall plan design—in an attempt to promote certain high(er) value care services and possible integration of several types of services—such a design has an immediate impact on the actuarial value. It raises it, and it often raises it enough that the plan no longer qualifies for the metal tier one was targeting.

    So, one is then left with the situation of having to alter the plan to bring it back to the target metal tier’s standard. The natural thought is to then make the less valued services more expensive to a plan subscriber. Such an approach will frequently (but not always) run afoul of “Reasonable modification” guidelines/regulations of states’ Division of Insurance (DOI), thus requiring an insurer to cancel the current plan for the up-coming year and file an entirely new plan—resulting in notable member abrasion in the process.

    So what’s left within the actuarial value calculator [see the second occurrence of "2015 actuarial value calculator" at the link] that can also pass muster with the DOI? Yep, the deductible and/or maximum out-of-pocket limit. Obviously this can also cause member abrasion, but it does not impact every subscriber as would a plan cancellation.

    So, value-based design, which has a lot of virtues, can itself lead to increasing deductibles, albeit with less cost sharing for high value services that balance out the actuarial value.

    @afrakt

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  • JAMA Forum: The innovation vs consumer protection tug of war in health policy

    In the overheated political environment surrounding the Affordable Care Act (ACA), it’s easy to miss the fact that conservative and liberal health policy proposals exist along a coherent continuum: each strikes a different balance between the desires to promote innovation and protect consumers.

    Read the rest in my new post over on the JAMA Forum. It explains the entire health policy debate in 800 words.*

    * No, not really, but I think you’ll find it worth your time.

    @afrakt

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  • Interpreting the latest prostate cancer study

    Last week in NEJMAnna Bill-Axelson and colleagues published the latest findings from the Scandinavian Prostate Cancer Group Study Number 4 (SPCG-4).

    METHODS: Between 1989 and 1999, we randomly assigned 695 men with early prostate cancer to watchful waiting or radical prostatectomy and followed them through the end of 2012. The primary end points in the Scandinavian Prostate Cancer Group Study Number 4 (SPCG-4) were death from any cause, death from prostate cancer, and the risk of metastases. Secondary end points included the initiation of androgen-deprivation therapy.

    RESULTS: During 23.2 years of follow-up, 200 of 347 men in the surgery group and 247 of the 348 men in the watchful-waiting group died. Of the deaths, 63 in the surgery group and 99 in the watchful-waiting group were due to prostate cancer; the relative risk was 0.56 (95% confidence interval [CI], 0.41 to 0.77; P=0.001), and the absolute difference was 11.0 percentage points (95% CI, 4.5 to 17.5). The number needed to treat to prevent one death was 8. One man died after surgery in the radical-prostatectomy group. Androgen-deprivation therapy was used in fewer patients who underwent prostatectomy (a difference of 25.0 percentage points; 95% CI, 17.7 to 32.3). The benefit of surgery with respect to death from prostate cancer was largest in men younger than 65 years of age (relative risk, 0.45) and in those with intermediate-risk prostate cancer (relative risk, 0.38). However, radical prostatectomy was associated with a reduced risk of metastases among older men (relative risk, 0.68; P=0.04).

    CONCLUSIONS: Extended follow-up confirmed a substantial reduction in mortality after radical prostatectomy; the number needed to treat to prevent one death continued to decrease when the treatment was modified according to age at diagnosis and tumor risk. A large proportion of long-term survivors in the watchful-waiting group have not required any palliative treatment.

    About 23 years ago, the investigators randomly assigned Scandinavian men with early prostate cancer to receipt of surgery (prostatectomy) or no surgery (watchful-waiting). Those assigned to the surgery group were less likely to die after 23 years of follow-up. Being less likely to die doesn’t mean not dying. In fact, only one man in eight benefited from surgery in general and one man in four among those under 65.

    Even though some men didn’t benefit from surgery, it’s not easy to tell in advance who those men would be. This is typical in medicine: more people get treated than will benefit because we can’t precisely target treatment to only those we know will benefit. In fact, those surgery “number needed to treat” (NNT) figures of eight in general and four under 65 are quite low. Lots of widely accepted therapies have higher NNTs.

    So, is this a slam dunk for prostatectomy? Are the great debates about whether and how to treat prostate cancer over? Nope.

    There are a number of other considerations. First, treatment comes with other effects besides potential mortality reduction (side effects and complications that impact quality of life). As Richard Lehman noticed, surgery

    definitely decreases all-cause mortality, at the cost of a prevalence of erectile dysfunction of 84% in the radical-prostatectomy group at 12.4 years and 80% in the watchful waiting group; urinary leakage was reported in 41% and 11%, respectively.

    (More on quality of life outcomes from prostate cancer treatment here.)

    Second, the results of this study aren’t necessarily generalizable to a US population, as Richard Hoffman explained.

    PSA screening became widespread in the US in the early 1990s—a decade before the first SPCG-4 publication. Perversely, the American way was to expend considerable resources to promote screening efforts to find cancers…before knowing whether these cancers could be successfully treated. [So,] the SPCG-4 results are not readily translatable to US practice. Only 5% of the study cohort had cancers detected by screening PSA—the rest either had symptoms and/or a palpable tumor. In the US, a substantial proportion of men with PSA-detected cancers have microscopic disease—which may never cause problems during a man’s lifetime. The US Prostate Cancer Versus Observation Trial (PIVOT) also evaluated surgery vs. watchful waiting. However, PIVOT, which mostly enrolled men with PSA-detected cancers, found no benefit for surgery. Post-hoc analyses suggested that only the small proportion of men with higher-risk cancers (based on PSA and the microscopic appearance of the cancer) seemed to have a survival benefit. This suggests that most men with PSA-detected cancers—the great majority of whom undergo aggressive treatment–will experience only the potential harms of treatment without any expectation of experiencing a prostate-cancer survival benefit.

    (More on the PIVOT results here.)

    Finally, the SPCG-4 study only compares surgery with watchful waiting, not to various forms of radiation therapy as well. Though the results certainly add to our body of knowledge about the long-term benefits (and harms) of prostatectomy relative to watchful-waiting, they do not, by themselves, answer all the questions patients or practitioners might have. It’s essential that the findings be interpreted in the context of the wider body of evidence, and in light of their limitations.

    The prostate cancer screening and treatment debates will most certainly go on.

    @afrakt

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  • Limitations of bundled payments

    Bundled payments are a great idea, but like all ideas they won’t be equally effective in all settings.

    In Medicare, there is a compelling case for bundled payments—wide variations in post-acute care use are the main factor behind differences between high- and low-spending geographic regions and between high- and low-spending hospitals. Moreover, Medicare patients often have multiple chronic conditions that are complex to manage. But the results of this analysis show that the case for bundled hospital payments for the privately insured is much weaker—post-acute care and other ancillary services account for a relatively small share of overall spending on hospitalization episodes, and they account for almost none of the variation in episode spending from one hospital to another. [Links added.]

    That’s from a recent research brief by Chapin White, James Reschovsky, and Amelia Bond. The following chart illustrates some of their findings.

    variation episode spend

    The brief is ungated, so click through for details.

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  • Good things don’t always save money, part 477

    We conclude that the current evidence does not allow us to make definitive statements about whether, when, and why patient decision support interventions could lead to savings. We caution against making claims of significant savings associated with future use, such as those made by the Lewin Group, AHRQ, and NHS bodies. Promise of significant savings risks failure to meet expectations and can jeopardize implementation efforts. There is undisputed added value in ensuring that patients are better informed by use of tools such as patient decision support interventions, and there is a tendency for patients to choose more conservative treatments, but so far there is insufficient evidence to be confident that the implementation of these tools will lead to system-wide savings.

    That’s the conclusion of a recently-published paper in BMJ by Thom Walsh and colleagues. In somewhat more plain language, the evidence is inconclusive about whether interventions to help patients select among treatment options (e.g., within a shared decision-making paradigm) save money.

    Thom appears with Glyn Elwyn in the brief video below that summarizes some of the study’s details as well as I could in a post. So, watch it.

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  • Placebo

    Via Karan Chhabra. The implied message is only valid for some placebos, of course.

    placebo

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  • Improving competition in Medicare Part D

    In one provision of its January Notice of Proposed Rulemaking (NPRM), for Medicare Part D and Medicare Advantage, CMS proposed that it will accept no more than two stand-alone prescription drug plan (PDP) bids from each Part D plan sponsor, starting in coverage year 2016.  The agency stated two reasons for this proposal.  First, it would reduce beneficiary confusion in the Part D market by both lowering the number of choices that they face and ensuring that differences between competing options are clear and meaningful to them.  Second, it would address the impact of one source of favorable selection that leads to higher costs for the government and the taxpayer.  This note looks at evidence from Part D to help understand the context for this proposal.

    Go read the rest by Jack Hoadley on the Health Affairs blog. It’s quite a nice summary of the issues. I learned a few things. One high-level lesson here is that the proposed rule isn’t just plucked out of thin air in order to crush the Part D market. (That would be dumb.) It’s based on some reasonable inferences and observations about that market and aimed at improving competition within it.

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  • Medicare Advantage payment rate cuts

    The New York Times Editorial Board supports cuts to Medicare Advantage (MA), as prescribed by the Affordable Care Act. As the editorial points out, there is a lot of howling about those cuts this year, not only from insurers, but from both Republican and Democratic policymakers. I’m sure MA enrollees would prefer payments to plans not be cut either. MA has been a good deal for them too.

    Over the past decade, enrollees in Medicare Advantage have received lots of extra benefits, thanks to unjustified federal subsidies to the insurance companies. Now they will have to do with somewhat less, unless the insurers are willing to absorb the cuts while maintaining benefits.

    We’ve done a great deal of blogging about MA payment rates here at TIE, though not recently. For now, I’ll focus on the “lots of extra benefits” that MA enrollees have received. How valuable were they to those enrollees? Not very.

    My work, published in 2009 with Steve Pizer and Roger Feldman, showed that for each additional dollar spent by the federal government (taxpayers) on the program since 2003, just 14 cents of it could be attributed to additional value to beneficiaries. What do I mean by “value” here? I mean that beneficiaries would have been just as happy receiving 14 cents as receiving a dollar’s worth of those extra benefits. Or, they’d have taken 15 cents on the dollar and been happy to forgo the extra benefits altogether. Clearly taxpayers could have saved a lot by just paying those 15 cents directly to beneficiaries!

    If 14 cents per dollar went to beneficiary value (formally, consumer surplus), what do we make of the other 86 cents? That went to the insurance companies. In part it is accounted for by the costs of the additional benefits (which is different than their value to beneficiaries, obviously), and in part it is captured as additional insurer profit (producer surplus).

    A limitation here is that our study is now out of date. I can’t say with confidence that beneficiaries are only receiving 14 cents on the dollar of value from extra MA benefits today. But I would bet a great deal that a substantial fraction of each taxpayer dollar spent does not show up as value to beneficiaries.

    It remains true that cutting payments will be painful for insurers and disliked by beneficiaries. They’re getting a great deal! But it is at taxpayers’ expense. What’s the right MA payment rate, after all? (Hint: Consider competitive bidding.)

    @afrakt

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