What can we do about infant mortality and disparities in health care? This week we take a look at a recent study in JAMA that may have an answer.
What can we do about infant mortality and disparities in health care? This week we take a look at a recent study in JAMA that may have an answer.
Stories that caught our attention this week
The late, great Princeton economist Uwe Reinhardt once said that the system for determining prices in the US health care system was “chaos behind a veil of secrecy.” That was in 2006, and clearly, the chaos persists today: In San Francisco, the price for a basic blood test ranges from $80 to $564; in Los Angeles, $12 to $413; and in Portland, $15 to $44.
Why does the price of one of the most common tests in medicine vary so much? Multiple factors like the bargaining power of insurers, provider consolidation, and underlying economic conditions may explain some of the differences, but the veil shrouding these striking price discrepancies has yet to be completely lifted.
Margot Sanger-Katz writes in the New York Times that health care prices are still hard to uncover because hospitals and insurers set them behind closed doors, and some claim those prices are legally protected trade secrets. She looked at a new analysis by the Health Care Cost Institute (HCCI) that found “enormous swings in price for identical services are common in health care.” To compile the pricing data, HCCI had to pool de-identified health insurance claims submitted to three large insurance companies. “Even the institute can’t say which insurers and providers are attached to the different prices, and it has eliminated certain markets with less competition where it might be easy to guess,” Sanger-Katz writes.
Price transparency is slowly becoming more prevalent. A few online tools exist that allow the public to estimate the price of some medical procedures. The FAIR Health consumer tool has a five-step process for looking up in-network and out-of-network prices for procedures based on a patient’s location. Healthcare Bluebook has a consumer search tool for price information. And HCCI runs guroo.com, a national and regional-level tool that provides average prices for bundles of health care services.
Federal and state policies are starting to complement these efforts. On January 1, 2019, a new national health care transparency policy took effect. The federal government now requires hospitals to post their price lists, called chargemasters, online in a format that can be easily processed by a computer. Critics of the regulation say that chargemasters are virtually incomprehensible to patients, and Vox journalist Sarah Kliff points out that they only lay out the list prices that hospitals charge for services, not the negotiated prices that insurers actually pay. However, the policy still takes the health care system one step closer to being transparent about costs.
In California, work continues on the creation of a new statewide Healthcare Payments Database. Once completed, the database could provide policymakers, patients, and the public with greater insight into the prices charged for medical services. A review committee comprised of health care stakeholders and experts is advising California’s Office of Statewide Health Planning and Development (OSHPD) about the creation, implementation, and administration of the database. The office has until July 1, 2020, to deliver its recommendations to the legislature.
Several other state-level efforts to increase price transparency have been proposed or remain pending in the current legislative session. Assembly member Al Muratsuchi (D-Torrance) authored AB 1038, a recently stalled measure that would have required California physicians to provide OSHPD with information on the rates they charge the public as well as the different rates they negotiate with health plans for the same services. OSHPD would be required to aggregate the negotiated prices compared to Medicare rates by geographic region. State Senator Richard Pan (D-Sacramento) introduced SB 343, which would update current transparency and disclosure requirements for the health care industry to include data from Kaiser Permanente.
Despite the fact that Americans do not use health care services at a greater rate than their counterparts in other advanced nations, such as the United Kingdom, Canada, and Australia, the US spends much more on health care than those countries. Researchers from Harvard University and the London School of Economics published a study in JAMA showing that “prices of labor and goods, including pharmaceuticals, and administrative costs appeared to be the major drivers of the difference in overall cost between the US and other high-income countries.”
In other words, health insurance premiums and out-of-pocket costs are high not because Americans are sicker or go to the hospital too much, but because of soaring individual prices for services.
At a time when Californians are more worried about paying for medical bills than housing, policymakers and patient advocates will need to continue pulling back the veil of secrecy that obscures the true causes of inordinately expensive care.
For a patient’s knee replacement, Medicare will pay a hospital $17,000. The same hospital can get more than twice as much, or about $37,000, for the same surgery on a patient with private insurance.
Or take another example: One hospital would get about $4,200 from Medicare for removing someone’s gallbladder. The same hospital would get $7,400 from commercial insurers.
The yawning gap between payments to hospitals by Medicare and by private health insurers for the same medical services may prove the biggest obstacle for advocates of “Medicare for all,” a government-run system.
If Medicare for all abolished private insurance and reduced rates to Medicare levels — at least 40 percent lower, by one estimate — there would most likely be significant changes throughout the health care industry, which makes up 18 percent of the nation’s economy and is one of the nation’s largest employers.
Some hospitals, especially struggling rural centers, would close virtually overnight, according to policy experts.
Others, they say, would try to offset the steep cuts by laying off hundreds of thousands of workers and abandoning lower-paying services like mental health.
he prospect of such violent upheaval for existing institutions has begun to stiffen opposition to Medicare for all proposals and to rattle health care stocks. Some officials caution that hospitals providing care should not be penalized in an overhaul.
Dr. Adam Gaffney, the president of Physicians for a National Health Program, warned advocates of a single-payer system like Medicare for all not to seize this opportunity to extract huge savings from hospitals. “The line here can’t be and shouldn’t be soak the hospitals,” he said.
“You don’t need insurance companies for Medicare for all,” Dr. Gaffney added. “You need hospitals.”
Soaring hospital bills and disparities in care, though, have stoked consumer outrage and helped to fuel populist support for proposals that would upend the current system. Many people with insurance cannot afford a knee replacement or care for their diabetes because their insurance has high deductibles.
Proponents of overhauling the nation’s health care argue that hospitals are charging too much and could lower their prices without sacrificing the quality of their care. High drug prices, surprise hospital bills and other financial burdens from the overwhelming cost of health care have caught the attention (and drawn the ire) of many in Congress, with a variety of proposals under consideration this year.
But those in favor of the most far-reaching changes, including Senator Bernie Sanders, who unveiled his latest Medicare for all plan as part of his presidential campaign, have remained largely silent on the question of how the nation’s 5,300 hospitals would be paid for patient care. If they are paid more than Medicare rates, the final price tag for the program could balloon from the already stratospheric estimate of upward of $30 trillion over a decade. Senator Sanders has not said what he thinks his plan will cost, and some proponents of Medicare for all say these plans would cost less than the current system.
The nation’s major health insurers are sounding the alarms, and pointing to the potential impact on hospitals and doctors. David Wichmann, the chief executive of UnitedHealth Group, the giant insurer, told investors that these proposals would “destabilize the nation’s health system and limit the ability of clinicians to practice medicine at their best.”
Hospitals could lose as much as $151 billion in annual revenues, a 16 percent decline, under Medicare for all, according to Dr. Kevin Schulman, a professor of medicine at Stanford University and one of the authors of a recent article in JAMA looking at the possible effects on hospitals.
“There’s a hospital in every congressional district,” he said. Passing a Medicare for all proposal in which hospitals are paid Medicare rates “is going to be a really hard proposition.”
Richard Anderson, the chief executive of St. Luke’s University Health Network, called the proposals “naïve.” Hospitals depend on insurers’ higher payments to deliver top-quality care because government programs pay so little, he said.
“I have no time for all the politicians who use the health care system as a crash-test dummy for their election goals,” Mr. Anderson said.
The American Hospital Association, an industry trade group, is starting to lobby against the Medicare for all proposals. Unlike the doctors’ groups, hospitals are not divided. “There is total unanimity,” said Tom Nickels, an executive vice president for the association.
“We agree with their intent to expand coverage to more people,” he said. “We don’t think this is the way to do it. It would have a devastating effect on hospitals and on the system over all.”
Rural hospitals, which have been closing around the country as patient numbers dwindle, would be hit hard, he said, because they lack the financial cushion of larger systems.
Big hospital systems haggle constantly with Medicare over what they are paid, and often battle the government over charges of overbilling. On average, the government program pays hospitals about 87 cents for every dollar of their costs, compared with private insurers that pay $1.45.
Some hospitals make money on Medicare, but most rely on higher private payments to cover their overall costs.
Medicare, which accounts for about 40 percent of hospital costs compared with 33 percent for private insurers, is the biggest source of hospital reimbursements. The majority of hospitals are nonprofit or government-owned.
The profit margins on Medicare are “razor thin,” said Laura Kaiser, the chief executive of SSM Health, a Catholic health system. In some markets, her hospitals lose money providing care under the program.
She says the industry is working to bring costs down. “We’re all uber-responsible and very fixated on managing our costs and not being wasteful,” Ms. Kaiser said.
“If you’re in a consolidated market, you are a monopolist and are setting the price,” said Mark Miller, a former executive director for the group that advises Congress on Medicare payments. He describes the prices paid by private insurers as “completely unjustified and out of control.”
Many hospitals have invested heavily in amenities like single rooms for patients and sophisticated medical equipment to attract privately insured patients. They are also major employers.
“You would have to have a very different cost structure to survive,” said Melinda Buntin, the chairwoman for health policy at the Vanderbilt University School of Medicine. “Everyone being on Medicare would have a large impact on their bottom line.”
People who have Medicare, mainly those over 65 years old, can enjoy those private rooms or better care because the hospitals believed it was worth making the investments to attract private patients, said Craig Garthwaite, a health economist at the Kellogg School of Management at Northwestern University. If all hospitals were paid the same Medicare rate, the industry “should really collapse down to a similar set of hospitals,” he said.
Whether hospitals would be able to adapt to sharply lower payments is unclear.
“It would force health care systems to go on a very serious diet,” said Stuart Altman, a health policy professor at Brandeis University. “I have no idea what would happen. Nor does anyone else.”
But proponents should not expect to save as much money as they hope if they cut hospital payments. Some hospitals could replace their missing revenue by charging more for the same care or by ordering more billable tests and procedures, said Dr. Stephen Klasko, the chief executive of Jefferson Health. “You’d be amazed,’ he said.
While both the Medicare-for-all bill introduced by Representative Pramila Jayapal, Democrat of Washington, and the Sanders bill call for a government-run insurance program, the Jayapal proposal would replace existing Medicare payments with a whole new system of regional budgets.
“We need to change not just who pays the bill but how we pay the bill,” said Dr. Gaffney, who advised Ms. Jayapal on her proposal.
Hospitals would be able to achieve substantial savings by scaling back administrative costs, the byproduct of a system that deals with multiple insurance carriers, Dr. Gaffney said. Under the Jayapal bill, hospitals would no longer be paid above their costs, and the money for new equipment and other investments would come from a separate pool of money.
But the Sanders bill, which is supported by some Democratic presidential candidates including Senators Kirsten Gillibrand of New York, Cory Booker of New Jersey, Elizabeth Warren of Massachusetts and Kamala Harris of California, does not envision a whole new payment system but an expansion of the existing Medicare program. Payments would largely be based on what Medicare currently pays hospitals.
Some Democrats have also proposed more incremental plans. Some would expand Medicare to cover people over the age of 50, while others wouldn’t do away with private health insurers, including those that now offer Medicare plans.
Even under Medicare for all, lawmakers could decide to pay hospitals a new government rate that equals what they are being paid now from both private and public insurers, said Dr. David Blumenthal, a former Obama official and the president of the Commonwealth Fund.
“It would greatly reduce the opposition,” he said. “The general rule is the more you leave things alone, the easier it is.”
We know many people end up with a risky pileup of prescribed medications. Many efforts have been made, with varied success, to correct this problem. Yet we’ve usually focused on physician behavior, when there’s another powerful lever: pharmacists.
About 30 percent of older adults in the United States and Canada filled a prescription in the last few years for one of many medications that the American Geriatrics Society recommends they avoid. Such drugs can lead to more harm — like cognitive impairment or falls — than good, and often safer options are available.
“Older adults are taking an awful lot of pills these days — 66 percent take five drugs or more per day, and 27 percent take 10 or more per day — so if some of those pills are no longer necessary and may even be causing harm, why not ask if it is time to deprescribe?” said Dr. Cara Tannenbaum, a professor of medicine and pharmacy at the University of Montreal, and director of the Canadian Deprescribing Network.
It’s not easy to get patients off such drugs, though. Physicians often don’t have enough information about what patients are taking, or may lack the time to talk to patients about these medications. They fear that stopping the drugs might cause harm or make patients upset.
To explore the possible role of pharmacists, Dr. Tannenbaum conducted a large randomized controlled trial over four years in community pharmacies in Quebec. The results of the study were recently published in JAMA.
Patients 65 years or older were randomly assigned to one of two groups. In the intervention group, pharmacists gave both patients and their physicians educational materials on the specific drug that might have been inappropriately prescribed. Such brochures could be delivered by mail or in person. The control group got the usual care, with no educational materials.
Drugs that were targets for deprescribing included sedatives, first-generation antihistamines, glyburide (used to treat diabetes), and certain nonsteroidal anti-inflammatory drugs, like ibuprofen or naproxen. The main outcome of interest was the ending of a prescription for one of the four medication classes six months later.
Almost 500 patients, average age 75, participated in the trial, and about 90 percent of them completed it. The intervention made a difference. Within six months, 43 percent of the patients in the intervention group had stopped taking one of the selected medicines. The corresponding figure was 12 percent in the control group.
In medicine, we often focus on the traditional doctor/patient interaction. We tend to ignore practitioners who come into contact with patients more than physicians, who in this case could hand over brochures personally. In the study, pharmacists were also paid to send information to the patients’ doctors ($19 Canadian, equivalent to $14 American, per physician outreach).
Home insurance doesn’t make a home less flammable. It protects homeowners against financial disaster should something happen to their home. The same holds true for auto insurance, for life insurance, and for disability insurance. And though we often talk about health insurance in terms of making people healthier, its true goal is the same as with other insurance: to safeguard the financial health of beneficiaries in the face of undesirable circumstances.
Even in that respect, the Medicaid expansion appears to be working.
Many articles have focused on the positive effects of Medicaid on health and well-being of recipients. A recent National Bureau of Economic Research working paper highlighted instead the effect of Michigan’s Medicaid expansion on Medicaid recipients’ financial health.
You’re still here? I said go read it at the JAMA Forum!
Among the standard complaints about the American health care system is that care is expensive and wasteful. These two problems are related, and to address them, Medicare has new ways to pay for care.
Until recently, Medicare paid for each health care service and reimbursed each health care organization separately. It didn’t matter if tests were duplicated or if a more efficient way of delivering care was available — as long as doctors and organizations were paid for what they did, they just kept providing care the way they always had.
But ordinary people do not think this way. We focus on solving our health problem, not which — or how many — discrete health care services might address it. New Medicare programs are devised to more closely align how care is paid for with what we want that care to achieve.
One of these programs is known as bundled payments. Instead of paying separately for every health care service associated with a medical event, you pay (or Medicare pays, in this case) one price for the entire episode. If health care providers can address the problem for less, they keep the difference, or some of it. If they spend more, they lose money. Bundled payment programs vary, but some also include penalties for poor quality or bonuses for good quality.
Medicare has several bundled payment programs for hip and knee replacements — the most common type of Medicare procedures — and associated care that takes place within 90 days. This includes the operation itself, as well as follow-up rehabilitation (also known as post-acute care). In theory, if doctors and hospitals get one payment encompassing all this, they will better coordinate their efforts to limit waste and keep costs down.
Do bundled payments work? They certainly appear promising, at least for some treatments. But it’s important to conduct rigorous evaluations.
Previous studies for Medicare by the Lewin Group and other researchers suggest that Medicare’s Bundled Payments for Care Improvement program has reduced the amount Medicare pays for each hip and knee replacement.
But that doesn’t mean the program saved money over all.
One possible issue would be if, despite saving money per procedure, health care providers wastefully increased the number of procedures — replacing hips and knees that they might not otherwise. A related concern is if hospitals try to increase profits by nudging services toward patients who may not need a procedure as much as patients with more severe and more expensive conditions. An average joint replacement costs $26,000, split almost equally between the initial procedure and post-acute care. But more expensive cases can be $75,000 to $125,000 — a costly proposition for hospitals.
A recent study published in JAMA examined whether the volume of Medicare-financed hip and knee replacements changed in the markets served by hospitals that volunteered for a bundled payments program, relative to markets with no hospitals joining the program. It found no evidence that the bundled payment program increased hip and knee replacement volume, and it found almost no evidence that hospitals skewed their services toward patients whose procedures cost less.
“These results suggest bundled payments are a win-win,” said Ezekiel Emanuel, a co-author of the study. “They save payers like Medicare money and encourage hospitals and physicians to be more efficient in the delivery of care.”
But Robert Berenson, a fellow at the Urban Institute, urges some caution. “Studying one kind of procedure doesn’t tell you much about the rest of health care,” he said. “A lot of health care is not like knee and hip replacements.”
Michael Chernew, a Harvard health economist, agreed. “Bundles can certainly be a helpful tool in fostering greater efficiency in our health care system,” he said. “But the findings for hip and knee replacements may not generalize to other types of care.”
Christine Yee, a health economist with the Partnered Evidence-Based Policy Resource Center at the Boston Veterans Affairs Healthcare System, has studied Medicare’s previous efforts and summarized studies about them. (I and several others were also involved in compiling that summary.) “Medicare has tried bundled payments in one form or another for more than three decades,” Ms. Yee said. “They tend to save money, and when post-acute care is included in the bundle, use of those kinds of services often goes down.”
One limitation shared by all of these studies is that they are voluntary: No hospital is required to participate. Nor are they randomized into the new payment system (treatment) or business as usual (control). Therefore we can’t be certain that apparent savings are real. Maybe hospitals that joined the bundled payment programs are more efficient (or can more easily become so) than the ones that didn’t.
Another new study in JAMA examines a mandatory, randomized trial of bundled payments. On April 1, 2016, Medicare randomly assigned 75 markets to be subject to bundled payments for knee and hip replacements and 121 markets to business as usual. This policy experiment, known as the Comprehensive Care for Joint Replacement program, will continue for five years. The JAMA study analyzed just the first year of data.
“In this first look at the data, we examined post-acute care because it is an area where there is concern about overuse,” said Amy Finkelstein, an M.I.T. health economist and an author of the study. “In addition, prior work suggested that it’s a type of care that hospitals can often avoid.”
The study found that bundled payments reduced the use of post-acute care by about 3 percent, which is less than what prior studies found. “Those prior studies weren’t randomized trials, so some of the savings they estimate may really be due to which hospitals chose to participate in bundled payment programs,” Ms. Finkelstein said. Despite reduced post-acute care use, the study did not find savings to Medicare once the costs of paying out bonuses were factored in. The study also found no evidence of harm to health care quality, no increase in the volume of hip and knee replacements, and no change in the types of patients treated.
“Savings could emerge in later years because it may take time for hospitals to fully change their behavior, “ Ms. Finkelstein said. In addition, the program’s financial incentives will increase over time; bonuses for saving money and penalties for failing to do so will rise.
On the other hand, Dr. Berenson said, health care providers could figure out how to work the system: “In three to five years, we may see volume go up in a way that offsets savings through reduced payments for a procedure. We’ll wait and see.”
Medicare put its best foot forward by using a randomized design. Not only were the markets selected in a randomized fashion, but providers in those markets were also required to participate. Though common in medical studies, randomization is rare in health care policy, as is mandatory participation. Nearly 80 percent of medical studies are randomized trials, but less than 20 percent of studies testing health system change are. Organizations that would be subject to the experiments often strongly resist randomizing health system changes and forcing providers to participate.
Unfortunately, the randomization of the Comprehensive Care for Joint Replacement program will be partly compromised in coming years. The Centers for Medicare and Medicaid Services announced last year that hospitals in only half of markets under the program would have to stay in it. Participation is voluntary in the other half, and only one-quarter of hospitals opted in.
Going to a partly voluntary program will make it harder to learn about longer-term effects, Ms. Finkelstein said, and to get at the answers we’re seeking.
We know it can be hard to persuade physicians to do some things that have proven benefits, such as monitor blood pressure or keep patients on anticoagulants. But it might be even harder to get them to stop doing things.
In May, a systematic review in JAMA Pediatrics looked at the medical literature related to overuse in pediatric care published in 2016. The articles were ranked by the quality of methods; the magnitude of potential harm to patients from overuse; and the potential number of children that might be harmed.
In 2016 alone, studies were published that showed that we still recommend that children consume commercial rehydration drinks (like Pedialyte), which cost more, when their drink of choice would do. We give antidepressants to children too often. We induce deliveries too early, instead of waiting for labor to kick in naturally, which is associated with developmental issues in children born that way. We get X-rays of ankles looking for injuries we almost never find. And although there’s almost no evidence that hydrolyzed formulas do anything to prevent allergic or autoimmune disease, they’re still recommended in many guidelines.
Those researchers had reviewed the literature on overuse in children before, looking at all the studies from a year earlier. They modeled the work on a set of papers in JAMA Internal Medicine that looked at overuse in adults through a review of the literature published in 2015, 2014 and 2013.
Overuse is rampant. And it can harm patients.
By the end of the 20th century, for example, research seemed to indicate that we wanted to keep patients in the intensive care unit in a tight range of blood glucose levels. The evidence base for these recommendations came from observational studies that showed that patients with such tight control seemed less likely to develop adverse outcomes like infections or hyperglycemia, and they seemed more likely to survive.
Researchers tested this recommendation prospectively in a randomized controlled trial in a surgical intensive care unit. The results, published in 2001, appeared to confirm the prior findings, that tight glycemic control saved lives.
The study wasn’t perfect. It wasn’t blinded, for instance, and there were downsides to the recommendations. About 5 percent of those who received the intensive therapy had severe hypoglycemia at least once. The mortality in the control group was higher than what might be expected. Finally, this was a study of mostly post-cardiac surgery patients, and it wasn’t clear how widely the findings could be generalized.
Nevertheless, this was a huge benefit, and given the severity of the population being treated (intensive care patients are usually very, very ill), many experts called for changes in treatment while further research was done.
That larger work was published in 2009. The study randomly assigned more than 6,000 patients admitted to an intensive care unit for more than three days — to either tight or traditional glucose control. This time, there was a significantly higher rate of death in the tight control group (27.5 percent vs. 24.9 percent), as well as a much higher rate of severe hypoglycemia (6.8 percent vs. 0.5 percent). These findings applied to patients over all and to subgroups (like surgical versus medical patients).
In light of this, guidelines changed again. Physicians were asked to stop the widespread tight glycemic control.
In 2015, some enterprising researchers set out to look at how this knowledge changed physician behavior. Beginning in 2001, they looked at how physicians adopted the recommendations to use tight glycemic control in patients admitted to intensive care units. Starting in 2009, they looked at how physicians absorbed new information telling them to stop.
From 2001 through 2012, they analyzed data on more than 377,000 admissions to 113 intensive care units in 56 hospitals. Before the first trial was published, in 2001, 17 percent of admissions used tight glycemic control. Beginning in that year, however, there was a slow but steady increase in its use. About 1.7 percent more patients were being treated with recommended practice each quarter.
It’s hard to change behavior, but over time, physicians did. By 2009, the use of tight glycemic control had increased to about 23 percent. Many might have hoped for more, but at least there was progress.
Starting in 2009, however, the reverse was recommended. Doctors were asked to stop. Tight glycemic control was associated not only with higher mortality, but also with more adverse events.
That didn’t happen. From 2009 through 2012, there was no decrease in tight glycemic control. The authors argued that “there is an urgent need to understand and promote the de-adoption of ineffective clinical practices.”
That is, of course, an understatement.
Choosing Wisely, an initiative of the American Board of Internal Medicine Foundation, is entirely focused on the identification of care that physicians routinely recommend but shouldn’t. Almost 600 different tests, procedures or treatments, collected over the last six years, are currently listed on their website. Almost all the recommendations basically say “don’t do” them.
This overuse doesn’t provide a benefit. It can lead to harms. It can also cost a lot of money.
The public shares some culpability. Americans often seem to prefer more care than less. But a lot of it still comes from physicians, and from our inability to stop when the evidence tells us to. Professional organizations and others that issue such guidelines also seem better at telling physicians about new practices than about abandoning old ones.
I asked Daniel Niven, the lead author of the 2015 study, why it’s so hard to persuade doctors to discontinue certain practices. He said physicians have a hard time unlearning what they have learned, even when there’s newer and better science available. He said, “Even if the new contradictory science is accepted, providers often struggle applying this information in their daily clinical practice, not because they don’t want to, but rather, because they work within a system that doesn’t adapt well to changing evidence.”
He also said doctors might need to be more thoughtful about prevention: “We need to take a more cautious approach to technology adoption, and learn from mistakes of early adoption of health care technologies based on little or low-quality clinical evidence. This way we can prevent the need to ‘break up’ with the practice when the high-quality evidence shows that it is ineffective.”
Overuse represents a significant problem. As policymakers look for ways to save money without harming quality in the health care system, reducing overuse seems as if it should be a top option.
Although most Americans over 65 say that they’d prefer to die at home, in 2009 only 24% of them actually did. Yet, in recent years, more and more Americans are choosing to live out their last days in their home or community instead of being admitted to a hospital.
The JAMA study reveals a potential patient response to the current inadequacy of end-of-life care as, for some older Americans, ending up in a hospital can mean high-cost and aggressive treatment in their final days.
Such treatment does not always equal better care. When it comes to their elderly patients, incumbent healthcare systems increasingly specialize in expensive, often unnecessary services as opposed to a value-based approach.
The findings come on the tide of the so-called “silver tsunami” as the American population skews ever older. The number of Americans aged 65 or older is projected to more than double by 2060, when they will eventually account for 24% of the total population.
New startups have emerged looking to address the institutional inadequacy of end-of-life care, viewing the aging population as a business opportunity. The growing companies zero in on technology-driven solutions in home health, chronic illness and end-of-life care as they look to scale to combat industry issues.
Such startups are a potential wake-up call for traditional healthcare organizations.
“Innovation comes from the private sector,” Teno, a professor of medicine at the University of Washington, told Healthcare Dive.
“I think the implication of this is that hospitals are going to have to change how they’re practicing. They’re going to have to come into new population-based business models that don’t have their entire survival based on their number of admissions,” she said.
On the hospital side, Teno called for multifaceted interventions that address the issue of care overuse and fragmentation in hospitals, such as care bundling and coordination, surveys measuring patient satisfaction and public reporting of readmission rates.
Despite the challenges, Teno was optimistic about study’s implications.
“We’re on the right path,” she said. “We need to wean ourselves off of this fee-for-service world of paying for a procedure and paying for volume, to paying for value.”
“The fee-for-service world provides perverse incentives,” Teno stressed, also noting that it tends to lead to hospital disorganization and miscommunication.
Teno cited the growth of Medicare Advantage as a program (it accounts for a third of Medicare enrollees and spending), and the 9.3% difference in hospitalization rates between MA and fee-for-service as a good sign for the future of healthcare.
A new study published in JAMA Psychiatry this month finds that the rate of alcohol use disorder, or what’s colloquially known as “alcoholism,” rose by a shocking 49 percent in the first decade of the 2000s. One in eight American adults, or 12.7 percent of the U.S. population, now meets diagnostic criteria for alcohol use disorder, according to the study.
The study’s authors characterize the findings as a serious and overlooked public health crisis, noting that alcoholism is a significant driver of mortality from a cornucopia of ailments: “fetal alcohol spectrum disorders, hypertension, cardiovascular diseases, stroke, liver cirrhosis, several types of cancer and infections, pancreatitis, type 2 diabetes, and various injuries.”
Indeed, the study’s findings are bolstered by the fact that deaths from a number of these conditions, particularly alcohol-related cirrhosis and hypertension, have risen concurrently over the study period. The Centers for Disease Control and Prevention estimates that 88,000 people a year die of alcohol-related causes, more than twice the annual death toll of opiate overdose.
The study’s data comes from the National Epidemiologic Survey on Alcohol and Related Conditions (NESARC), a nationally representative survey administered by the National Institutes of Health. Survey respondents were considered to have alcohol use disorder if they met widely used diagnostic criteria for either alcohol abuse or dependence.
For a diagnosis of alcohol abuse, an individual must have exhibited at least one of the following characteristics in the past year (bulleted text is quoted directly from the National Institutes of Health):
Recurrent use of alcohol resulting in a failure to fulfill major role obligations at work, school, or home (e.g., repeated absences or poor work performance related to alcohol use; alcohol-related absences, suspensions, or expulsions from school; neglect of children or household).
Recurrent alcohol use in situations in which it is physically hazardous (e.g., driving an automobile or operating a machine when impaired by alcohol use).
Recurrent alcohol-related legal problems (e.g., arrests for alcohol-related disorderly conduct).
For a diagnosis of alcohol dependence, an individual must experience at least three of the following seven symptoms (again, bulleted text is quoted directly from the National Institutes of Health):
Need for markedly increased amounts of alcohol to achieve intoxication or desired effect; or markedly diminished effect with continued use of the same amount of alcohol.
The characteristic withdrawal syndrome for alcohol; or drinking (or using a closely related substance) to relieve or avoid withdrawal symptoms.
Drinking in larger amounts or over a longer period than intended.
Persistent desire or one or more unsuccessful efforts to cut down or control drinking.
Important social, occupational, or recreational activities given up or reduced because of drinking.
A great deal of time spent in activities necessary to obtain, to use, or to recover from the effects of drinking.
Meeting either of those criteria — abuse or dependence — would lead to an individual being characterized as having an alcohol use disorder (alcoholism).
The study found that rates of alcoholism were higher among men (16.7 percent), Native Americans (16.6 percent), people below the poverty threshold (14.3 percent), and people living in the Midwest (14.8 percent). Stunningly, nearly 1 in 4 adults under age 30 (23.4 percent) met the diagnostic criteria for alcoholism.
While the study’s findings are alarming, a different federal survey, the National Survey on Drug Use and Health (NSDUH), has shown that alcohol use disorder rates are lower and falling, rather than rising, since 2002. Grant says she’s not sure what’s behind the discrepancies between the two federal surveys, but it’s difficult to square the declining NSDUH numbers with the rising mortality rates seen in alcohol-driven conditions like cirrhosis and hypertension.
A separate study looking at differences between the two federal surveys found that the disparities are probably caused by how each survey asks about alcohol disorders: It found that the NESARC questionnaire used in the current study is a “more sensitive instrument” that leads to a “more thorough probing” of the criteria for alcohol use disorder.
If the more sensitive data used in the current study is indeed more accurate, there’s one final caveat to note: The study’s data go only through 2013. If the observed trend continues, the true rate of alcoholism today would be even higher.
“I think the increases are due to stress and despair and the use of alcohol as a coping mechanism,” said the study’s lead author, Bridget Grant, a researcher at the National Institutes of Health. The study notes that the increases in alcohol use disorder were “much greater among minorities than among white individuals,” likely reflecting widening social inequalities after the 2008 recession.
“If we ignore these problems, they will come back to us at much higher costs through emergency department visits, impaired children who are likely to need care for many years for preventable problems, and higher costs for jails and prisons that are the last resort for help for many,” University of California at San Diego psychiatrist Marc Schuckit said in an editorial accompanying the study.
Medicare and its beneficiaries aren’t the winners in the behind-the-scenes rebate game played by drugmakers, health insurers and pharmacy benefit managers, according to a paper published Tuesday in JAMA Internal Medicine.
The paper, which dives into the complex and opaque world of Medicare drug price negotiations, finds that rebates may actually drive up the amount Medicare and its beneficiaries pay for drugs — especially for increasingly common high-priced drugs — and it offers some systemic solutions.
“How these rebates and price concessions happen between the manufacturer of the drug and the PBMs [pharmacy benefit managers] and health plans can directly impact patient cost in a big way,” said the paper’s lead author, Stacie Dusetzina of the University of North Carolina-Chapel Hill’s pharmacy school.
The paper’s findings and proposed solutions come as President Donald Trump’s administration, Congress and state lawmakers grapple with ways to control drug prices and overall health spending. Trump’s administration has said it wants to lower drug prices and hinted at mandating rebates in Medicare. Leaders on Capitol Hill have called for Medicare price negotiations.
In the JAMA paper, Dusetzina cites the EpiPen as one example. Last year, executives at Mylan, the maker of the EpiPen, said the list price of the drug for life-threatening allergic reactions was $600, but the company earned $274 after rebates and other fees.
That savings, though, isn’t necessarily passed on to patients in Medicare’s system. Instead, the money tends to be swallowed up by health insurers and middlemen like pharmacy benefit managers.
And, even though patients don’t pay list prices for their drugs, those high prices (like $600 for the EpiPen) are used to calculate how much Medicare covers for any individual patient — and sometimes what patients pay out-of-pocket, Dusetzina said.
“We’ve heard over the years that the list price doesn’t really matter, that it’s not the real price,” Dusetzina said. “It matters.”
The way it matters is not easily apparent. Here’s what happens: When a Medicare patient picks up a prescription, what they pay toward it is generally based on that higher list price and not the price after rebates, so the amount the beneficiary pays is scaled upward as a result.
And Medicare uses that high-end list price to calculate how rapidly beneficiaries reach the dreaded doughnut hole, where patients pay a bigger share of the price of the drug after their spending hits $3,700, the 2017 benchmark. Once through the doughnut hole, Medicare picks up the bulk of the drug’s cost.
High list prices drive patients into and out of the doughnut hole faster, raising their out-of-pocket costs and Medicare expenditures.
Dusetzina and co-authors Rena Conti, assistant professor of health policy and economics at the University of Chicago, and Dr. Peter Bach, director of Memorial Sloan Kettering Cancer Center’s Center for Health Policy and Outcomes, propose solutions to this problem.
Bach called the current Medicare system “absolutely devastating for people on high-cost specialty drugs.”
Bach’s drug pricing lab at Memorial Sloan Kettering offers an interactive tool for comparing how dollars shift when using the list price and post-rebate price.
The authors recommend that patients should be charged flat-dollar copays rather than coinsurance charges, which are based on a percentage of the drug’s price. The copays could be tiered, depending on the cost of the drug, the paper suggested.
This solution comes, in part, because the number of Medicare enrollees paying coinsurance for their drug, rather than a flat fee, has increased to 58 percent last year from 35 percent in 2014, the paper notes.
Another tactic would be to address the underlying disconnect between rebate negotiations and savings for Medicare and beneficiaries. The authors suggest that incentives for health insurers need to change to require health plans to pay more of the drugs’ costs after beneficiaries pass through the doughnut hole.
In addition, Dusetzina said, using the post-rebate amount in Medicare’s calculations would allow Medicare beneficiaries to move through the doughnut hole more slowly. That would save both patients and Medicare money.
“It really just stops us from accelerating people through the benefit,” Dusetzina said.
Last month, the Pharmaceutical Research and Manufacturers of America, which represents the pharmaceutical and biotechnology industry, launched a “Share the Savings” advertising campaign calling for public education about how the savings from rebates don’t actually get passed on to commercial insurance patients.
In an email, PhRMA’s Holly Campbell said the group’s commissioned research has found that rebates and discounts have nearly doubled from 2013 to 2015. Campbell said PhRMA believes “insurance companies should share more of the rebates and discounts they receive with patients.”
America’s Health Insurance Plans, which represents the insurance industry, calls the assertion that rebates and other discounts aren’t passed along “absolutely inaccurate” and noted the “true issue” is that drug prices continue to skyrocket “with no clear explanation as to how prices are set.” Insurers pass the savings from rebates on in different ways, including lower monthly premiums and co-pays, said AHIP’s Cathryn Donaldson.
Dusetzina said there is one caveat to the Medicare study: It is unclear how many drugs get a rebate and for how much because there is lack of transparency when it comes to rebates.
The paper’s final suggestion is about transparency. It says that federal regulators should require rebate data to be reported for individual drugs and then use that information to change Medicare’s benefit design in a way that “would lead to savings” for Medicare and its enrollees.