#6Things That Happened in Health Policy This Week

6 Things That Happened in Health Policy This Week is produced by a mix of research assistants from the Healthcare Quality & Outcomes (HQO) Initiative at the Harvard T.H. Chan School of Public Health. In each edition we feature a variety of news articles, reports, and studies focused on U.S. health policy and health services research. This week’s edition includes contributions from Stephanie Caty (@stephaniecaty), Yevgeniy Feyman (@YFeyman), Kim Reimold (@KimReimold), Zoe Lyon (@zoemarklyon), and Anthony Moccia (@Anthony_Moccia).

#6Things is undergoing a Fall makeover. You’ll notice changes in the coming weeks; we appreciate any and all feedback!

CMS: CMS releases 2017 star ratings for Medicare Advantage plans

On Wednesday, CMS released its latest MA and Part D plan ratings, which are used to determine MA quality bonus payments and to help beneficiaries select plans. The new ratings demonstrate that approximately 49% of MA plans that also offer Part D plans (MA-PD plans) earned at least 4 stars for their overall rating, and close to 68% of MA-PD enrollees are in these contracts. In related news, ModernHealthcare reports that Human and Cigna both saw their stock prices fall after the new star ratings showed quality declines for both insurers. Humana’s stock fell 5% after CMS reported that the percentage of MA members in Humana plans with at least 4 stars decreased by about half, from 78% a year ago to 37%. More on that here.

KHN: Hospitals say they’re being slammed by drug price hikes

A new report from the National Opinion Research Center at the University of Chicago, commissioned by the AHA and the Federation of American Hospitals, finds that inpatient drug spending increased by 23.4% annually from 2013 to 2015, compared with 9.9% annual increases on retail drug spending during the same period. Driving the increase in spending was hikes in drug unit prices rather than increases in the volume of drugs used. Importantly, as Chip Kahn, CEO of the Federation of American Hospitals, noted in a press briefing this week, the price increases do not correspond with “clear and important clinical improvements.” High drug prices for hospitals drain resources from investing in other care-improving strategies, such as hiring more clinical staff or adopting HIT. The full report can be found here.

The Upshot: Drug Coupons: Helping a Few at the Expense of Everyone

After Mylan raised the price of its EpiPen, the drugmaker offered coupons to patients that would give them up to $300 off of their out-of-pocket costs. Such coupons reduce the cost shifted to patients by insurers, improving access to medicines. At the same time, these coupons can increase drug costs overall if they encourage the use of more expensive drugs. A new working paper (and an accompanying New England Journal of Medicine Perspective) finds that copay coupons significantly increase drug spending for drugs with a generic competitor. Looking at 2007 to 2010, the authors find that for drugs with generic competition copay coupons increased branded sales by over 60 percent. Additionally, the authors estimate that over the five years after generic entry, these coupons increase total drug spending by between $700 million and $2.7 billion for drugs in the analytic sample. While banning the use of the coupons (as the federal government already does in Medicare) is an option, the downside is that patients would face higher out-of-pocket costs as a result. Lesson: there is no free lunch.

Kaiser Family Foundation: Medicaid Enrollment & Spending Growth: FY 2016 & 2017

Happy New Fiscal Year (FY)! How did you do with your (fiscal) resolutions? With the start of FY 17 October 1st, this report asked the same question about how Medicaid did last year. Using interviews and data from state Medicaid directors, they found national Medicaid enrollment and total spending continued to increase for FY 16, but at a much slower rate than FY 15 when the Affordable Care Act had just been implemented. Cost of specialty drugs and payment increases for provider groups were two of the cited reasons for continued spending increases. Looking forward to FY17, they predicted state Medicaid spending will increase as the federal government funds less of the Medicaid expansion and Medicaid enrollment will continue towards stabilization…but let us remember the future is clear (as mud) with the upcoming elections.

JAMA: Comparison of Physician and Computer Diagnostic Accuracy

A research letter published this week in JAMA IM finds that doctors significantly outperform symptom checker apps in correctly diagnosing patients. Doctors evaluated 45 clinical situations with varying levels of acuity and commonality and were asked to submit ranked diagnoses for each case. Their performance was compared to the accuracy of 23 symptom checkers to diagnose the same clinical cases. Across all cases, physicians listed the correct diagnoses first (72.1% vs. 34.0%) and within the top three diagnoses (84.3% vs. 51.2%) more than symptom checkers. Physicians also outperformed symptom checkers across all acuity levels and for both common and uncommon diagnoses.

Modern Healthcare: GOP lawmakers say MACRA could kill small practices and fuel consolidation

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Program replaced the Sustainable Growth Rate (SGR) today. MACRA is designed to “reward clinicians for delivering quality care to patients” said HHS Secretary Sylvia M. Burwell. MACRA aims to improve how care is paid for by allowing physicians to focus on quality and not on quantity. There are two paths clinicians can choose to transition from traditional fee-for-service as laid out by MACRA: the first path enables physicians higher reimbursement for better care and investments that benefit patients, it reduces current requirements and rewards quality of care, the second path assists clinicians to participate in organizations that get reimbursed for keeping patients healthy, like being part of an ACO. To help small practices (15 clinicians or fewer) and those working in underserved areas, MACRA will provide $20 million for each of the first 5 years to train and educate the clinicians. Read more about MACRA here.


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