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Last Build Date: Thu, 17 Aug 2017 14:01:20 +0000


The United States Can Reduce Socioeconomic Disparities By Focusing On Chronic Diseases

Thu, 17 Aug 2017 14:01:20 +0000

“It is natural to ask whether rising gaps in income might be associated with widening gaps in health and longevity between rich and poor Americans,” Jacob Bor and colleagues noted in an article in The Lancet this spring. This association is bidirectional: If someone is poor, they have a greater likelihood of having chronic illnesses such as diabetes and cardiovascular disease and associated complications. Illness also restricts financial security, especially within communities of color. The June issue of Health Affairs, Pursuing Health Equity, draws much needed attention to the need to pursue solutions that address the interrelationship between health status and socioeconomic influences. One unorthodox but highly effective approach to addressing health and socioeconomic disparities in the United States would be to close the racial and ethnic wealth gap in our society by improving health. We argue that such policy solutions should prioritize chronic disease prevention and management, specifically. Chronic Disease Burden Among Communities Of Color People of color face higher rates of diabetes, obesity, stroke, heart disease, and cancer than whites. In the case of diabetes, the risk of being diagnosed is 77 percent higher for African Americans and 66 percent higher among Hispanics, than for whites. Asian Americans, Native Hawaiians, and Pacific Islanders are at twice the risk of developing diabetes than the population overall. In addition to higher rates of chronic illness, lower wages and insufficient insurance coverage among people of color greatly limits their access to treatment and often forces them to work while ill. Adjusting for inflation, incomes for all poor and middle-income Americans have declined over the past 15 years. As people of color are disproportionately represented within lower income levels, there is a growing wealth gap between racially and ethnically diverse households compared with white households, the size of which has not been seen since the early twentieth century. Furthermore, in 2015, for nonelderly adults, the percentage of African Americans, Hispanics, Asian Americans, and American Indian and Alaska Natives who were uninsured was one-and-a-half to two times as large as the percentage of white Americans who were uninsured. The Costs Of Chronic Disease Research has shown that the onset of a chronic disease reduces wages by 18 percent. Chronic illness may restrict employment and increase medical expenses and costly caregiving responsibilities, which all contribute to widening the income and wealth gaps. On average, chronic diseases are projected to cost the United States $794 billion per year in lost productivity alone between 2016 and 2030. Relatedly, the Joint Center for Political and Economic Studies estimates that health inequities and premature death cost the US economy $309.3 billion a year. People with lower incomes have a greater likelihood of having one or more chronic illnesses, and greater morbidity means higher out-of-pocket costs. According to a RAND Health study, Americans with just one or two chronic illnesses in 2014 paid double the out-of-pocket costs compared to Americans without chronic conditions. Americans with three or more chronic illnesses paid four times as much or more. With median household income 140 percent to 171 percent less than their white peers, respectively, Hispanic and African American households have fewer resources to absorb those costs. Incomes among Hmong, Thai, Cambodian, Laotian, and Bangladeshi Americans are even lower. Chronic disease not only affects the earning prospects of the individual affected but often also negatively impacts income for family members. Low-income Americans cannot usually afford to hire professional assistance to care for a loved one with one or more serious chronic illnesses. Thus, many family members take time off from work or leave the workforce altogether, resulting in lost wages and diminished opportunities for workplace advancement. A 2016 study by AARP found that three of every four Americans who are actively providi[...]

Questions About The FDA’s New Framework For Digital Health

Wed, 16 Aug 2017 13:54:15 +0000

In June 2017, the new Food and Drug Administration (FDA) commissioner Scott Gottlieb pre-announced his agency’s Digital Health Innovation Action Plan that indicates notable shifts in the agency’s approach to digital health technologies. This plan is an important step in FDA regulation of this area, a process that began in 2011 with a draft guidance, followed by significant congressional actions. The new changes should not be surprising, given critiques published by Gottlieb prior to re-joining the FDA. In 2014, he wrote that smartphones are “purposely dumbed down” due to the “risk of unwieldy FDA regulation,” and in 2015, he argued that what most considered the FDA’s “light touch” on digital health was still too heavy-handed. The new plan signals two major shifts: first, a shift from premarket to postmarket review by the FDA; and second, a shift from oversight by the FDA to oversight by independent, nongovernment certifiers. These changes may be bellwethers for how a Trump-era FDA approaches areas far beyond digital health. The FDA And Digital Health The FDA’s current approach to digital health began in 2011 when it reclassified some medical device software to its lowest-risk Class I category and when it published a “Draft Guidance on Mobile Medical Applications.” The guidance (which was withdrawn after passage of the 21st Century Cures Act) tried to clarify which applications, hardware, and software platforms might qualify as medical devices. For example, health trackers, disease management apps, and apps providing generalized medical information would not fall under FDA jurisdiction. Other apps that would qualify as “devices” would nevertheless be exempt, per the agency’s “enforcement discretion.” Instead, the agency’s risk-based approach would focus on apps that provided “patient-specific analysis and … patient-specific diagnosis, or treatment recommendations.” Over the past few years, policy makers began to contemplate a new regulatory framework for digital health. In 2012, Congress passed the FDA Safety and Innovation Act, calling for key agencies, including the FDA, the Federal Communications Commission, and the Office of National Coordinator for Health Information Technology, to recommend a “risk-based regulatory framework” for mobile apps and other health information technology (IT) products. In 2014, the resulting report encouraged the FDA to maintain its circumscribed jurisdiction and made modest proposals, such as creating a new “Health IT Safety Center” to generate best practices. After the report’s publication, momentum built toward more definitive legislation. In December 2016, Congress passed the 21st Century Cures Act, which amended the definition of “device” to exclude from FDA jurisdiction any “health software” used for administrative, lifestyle, patient record, and some clinical decision support purposes. Despite these broad exemptions, the act gives the FDA discretion to regulate software found to be “reasonably likely to have serious adverse health consequences,” but only after the agency uses a notice-and-comment procedure. Elsewhere, the act reiterates the requirement that the FDA impose the “least burdensome” standards necessary for device review, including consideration of “post-market information.” Dissatisfied Stakeholders The FDA hoped that its earlier guidance would “provide clarity and predictability” for the digital health industry. But confusion remained. Some less-than-scrupulous developers have tried to avoid FDA jurisdiction by claiming that their apps are merely “recreational” or “informational,” while more careful developers have delayed or sidelined products due to the FDA’s indeterminacy. More generally, serious companies also saw a disconnect between digital health product lifecycles and the FDA’s relatively long review cycles. Meanwhile, consumers want reliable information about the safety and efficacy of digital health products. But the FDA reviews very few digital [...]

Terminating CSR Payments Would Increase Deficits, CBO Finds

Tue, 15 Aug 2017 21:38:32 +0000

August 16 Update Administration Will Make CSR Payments For August Multiple media sources are reporting that the White House has confirmed that cost-sharing reduction payments will be made for August. This will lessen the financial impact on insurers of a CSR payment termination during 2017, if one occurs, as it will mean one less month that insurers will have to absorb the cost of termination themselves. It does nothing, however, to clarify for insurers or state insurance regulators what they should assume regarding CSR payments in determining which insurers will participate in the individual market and what premiums they will charge for 2018. Health insurers offering qualified health plans through the marketplaces for 2018 must file their rates for 2018 by September 6, 2017. As no guidance has been offered as to whether CSRs will be paid in 2018 (or even in September 2017), state regulators should presumably instruct their insurers to file their rates based on an assumption that CSRs will not be paid, or at least to file two sets of rates assuming on the one hand that CSRs will be paid and on the other hand that they will not be. As the CBO has projected and multiple insurers have confirmed in rates already filed, the nonpayment of CSRs would result in significant rate increases, probably in the order of 20 percent in most states. If not action is taken by the White House or by Congress very soon, it should be assumed that these are the rates that will be in effect. Congress could, of course, specifically appropriate funding for the CSRs. The CBO has confirmed that such an appropriation would not increase the budget deficit since it has already assumed an appropriation to exist. A CSR appropriation is high on the agenda of a number of members of Congress of both parties. But even assuming the most rapid conceivable schedule for both houses to enact and the President to sign such an appropriation, it would still come after the rate filing deadline—which is the day after Congress reconvenes on September 4. Only the Trump administration can at this point provide assurances that the CSRs will be paid at least through the end of the 2017 and for 2018 unless the appellate court in House v. Price decides at some point to affirm the lower court judgment—now on hold—that the payments must end. The only responsible step for the administration at this point is to immediately provide such assurances, and to state that it intends to work with Congress to clarify that an appropriation exists as quickly as possible and independent of any other actions Congress might take on health care reform. Senator Lamar Alexander (R-TN), Chair of the Senate Health, Education, Labor, and Pensions Committee, has urged the President to continue the payments, at least through September, while Congress takes action. Any other approach simply increases the likelihood, indeed the certainty, that premiums in many state individual markets will increase dramatically for next year. A failure to take action is also likely to result in the number of counties without any insurer in the individual market for 2018 beginning to grow again. Nevada-Centene Arrangement Leaves Only Two Bare Counties For 2018 Centene announced on August 15, 2017, that it had worked out an arrangement with Nevada to offer coverage in the fourteen Nevada counties that had previously had no insurer signed up to offer coverage through the exchange for 2018. This leaves the “bare county” problem largely solved for 2018, with only two counties remaining in the country—one in Wisconsin and one in Indiana—with no insurers currently offering coverage for 2018. Between them they have fewer than 400 current exchange enrollees. The bare county problem may reappear, however. As noted earlier, the CBO report on terminating cost-sharing reductions projects that five percent of Americans would live in counties with no 2018 coverage if the CSR payments are terminated. Original Post On the afternoon of August 15, 2017, the Congress[...]

The ‘Tanning Tax’ Is A Public Health Success Story

Tue, 15 Aug 2017 15:08:25 +0000

Among the lesser known provisions in the now-rejected Republican House and Senate health care bills was a plan to eliminate an excise tax on tanning bed use. Tanning first became fashionable when Coco Chanel popularized the practice in the 1920s, making lounging outside in the sun a symbol of leisure, relaxation, and health. In the late 1970s, pioneering businesses began to offer ultraviolet (UV) radiation beds as a shortcut to fashionable tanned skin; by the 1990s, indoor UV tanning services were ubiquitous staples of the American beauty industry. Despite its popularity, research has shown that exposure to UV radiation is the primary environmental cause of skin cancer and tanning beds are “the main source of deliberate exposure to artificial UV radiation.” Melanoma risk is particularly high among individuals who use tanning beds for the first time before age 35. The practice remains most common with female college students in the United States, with more than 50 percent reporting having used indoor tanning beds. Furthermore, despite their higher risk for melanoma, tanning companies aggressively target this demographic through the use of tailored marketing and advertising techniques. Both the House and Senate health care bills would have repealed the Affordable Care Act’s so-called “tanning tax,” a 10 percent consumer-paid tax on non-medical, UV light indoor tanning services. When the tax was enacted in 2010, the non-partisan Congressional Joint Committee on Taxation estimated that it would bring in $2.7 billion in revenue over 10 years, and would offset some of the costs of the ACA overall. After four years, however, the tax had only brought in about $367 million, far less than the approximate $1 billion originally projected by that time. Some detractors then declared the tax a “failure” and blamed it for the loss of tens of thousands of jobs. Yet these arguments discount the notion that the revenue was perhaps a secondary goal of the tax, behind its ability to deter people from engaging in the dangerous pursuit of indoor tanning. Per medical and public health groups, the creation of the tax was “a clear signal from the federal government that indoor tanning is a dangerous and potentially lethal activity that Americans should avoid.” The American Academy of Dermatology hailed it as helping to “reduce health costs by discouraging indoor tanning and thereby reducing the future costs of treating skin cancers.” From the public health perspective, a lower-than-expected revenue could be indicative of a significant victory. Unsurprisingly, the indoor tanning industry criticized the tax from the beginning and now blames the tax for closing upwards of 10,000 salon businesses. Salons have the option of collecting the tax directly from consumers or absorbing the tax themselves; one survey of tanning salon owners in Illinois showed that about 80 percent chose the former, adding 10 percent to the consumer charge up front. The owners in that survey also reported that younger clients were more likely to “notice or care” about the price increase than older clients. Indeed, the Centers for Disease Control and Prevention reported that the number of high school students who reported having artificially tanned has decreased by more than half since the enactment of the ACA, from 15.6 percent in 2009 to 7.3 percent in 2015. While this may signify a downturn from a business perspective, deterring younger clients from beginning or continuing indoor tanning is a particularly desirable public health goal, as “young women under the age of 25 who engage in indoor tanning have been shown to be over 60 percent more likely to develop skin cancers such as basal or squamous cell carcinoma compared to those who have never engaged in the behavior.” Given Congressional Republicans’ failure to repeal the Affordable Care Act, the elimination of the tanning tax appears to be off the table, at least for now. But the industry may well push for repe[...]

If The Trump Administration Terminates Cost-Sharing Reduction Payments, States Can Use 1332 Waivers To Fund Their Own

Tue, 15 Aug 2017 14:27:58 +0000

One of the main causes of instability in the Affordable Care Act (ACA) health exchanges, aside from the constant stream of repeal-and-replace efforts, is the uncertainty over the future of the cost-sharing reduction (CSR) payments. CSR and the advanced premium tax credits (APTC) are subsidies created by the ACA to enhance the affordability of the qualified health plans sold on the health exchanges. Whereas the APTC reduces the cost of premiums to beneficiaries with incomes between 100 and 400 percent of the federal poverty level, CSR lowers the out-of-pocket expenses of beneficiaries with incomes between 100 and 250 percent of the federal poverty level. Unlike the APTC, whose legal status is not in question, the U.S. House of Representatives had challenged the appropriation status of the CSR payments by filing a lawsuit against the Obama administration, thereby creating doubts about CSR’s future. In addition to the said litigation, the current administration has compounded the uncertainty by often withholding the CSR payments until the 11th hour and threatening to terminate the payments completely. This uncertainty comes at a cost. Some insurers have cited the uncertainty as one of the reasons for their exodus from the health exchanges while others have referenced the uncertainty as a source for their 2018 premium hikes. While the extent of the premium increase is yet to be determined, a study by the Kaiser Family Foundation estimated that without CSR payments, the insurers would need to raise silver plan premiums by about 19 percent. Can States Step In? What can States do if the administration follows through on its threat to terminate the CSR payments? A simple solution is for the States to provide the CSR payments themselves. In addition to making health insurance affordable, CSR payments are cost effective: The provision of CSR payments by the Federal government lowers the silver plan premiums offered on the health exchanges because the insurers are compensated for the reduced cost-sharing they are required to provide. Without the CSR payments, insurers will raise silver plan premiums—including the premiums for the benchmark silver plans—to offset their losses, which leads to higher APTC for all eligible beneficiaries, ultimately resulting in greater overall Federal expenditure. The aforementioned Kaiser Family Foundation study quantified this effect by demonstrating that if CSR payments were terminated in 2018, although the Federal government would save $10 billion from not making the CSR payments, it would have to pay an additional $12.3 billion in APTC, thus increasing overall Federal expenditure by $2.3 billion. Creating a State-administered CSR mechanism will undoubtedly require expenditure from the State. While some will argue that the limited resources available in State budgets would render the idea all but theoretical, it would be beneficial to examine how States can use Section 1332 of the ACA to fund—and potentially profit from—providing CSR. The California Example The intricacies of a Section 1332 State Innovation Waiver (1332 Waiver) have been explained in depth elsewhere, but on a fundamental level, Section 1332 of the ACA permits a State to apply for a waiver to modify or waive certain provisions of the ACA, such as the individual mandate and the establishment of health exchanges, among others. The waiver application must satisfy four statutory constraints—comprehensiveness, affordability, scope of coverage, and will not increase the Federal deficit—but should an application meet all the criteria, the State is eligible to receive any APTC or CSR that the State would have otherwise received without the 1332 Waiver. In layman terms, if a State can create a system that meets the Federal standard at a cost that is the same or less than the existing Federal model, the State gets to keep the money the Federal government would have otherwise spent. Using Californi[...]

What Should We Conclude From ‘Mixed’ Results In Payment Reform Evaluations?

Mon, 14 Aug 2017 14:10:52 +0000

Now that the Affordable Care Act (ACA) repeal-and-replace process is coming to an end, perhaps it’s a good time to turn to an area of health policy where there is considerably more bipartisan consensus: payment reform. Even here, however, challenges remain. A recent spate of evaluations, reviews, and published perspectives have cast doubt on the promise and spending-reduction potential of care coordination initiatives, shared savings accountable care organizations (ACOs), patient-centered medical homes, and bundled payments in particular. As the Trump administration, members of Congress, states, and other health care stakeholders formulate their own approaches to payment and delivery reform 3.0 (remember pay-for-performance?), it is important to avoid being overly discouraged in the face of the mixed results we have seen so far. Analyzing Payment Reform Results So Far Let’s start with the ACA’s flagship payment initiative, which was baked into the statute and thus not a Center for Medicare and Medicaid Innovation (the Innovation Center) pilot but a program, the shared savings ACOs or Medicare Shared Savings Program. It is an understatement to say that there is considerable disappointment that on balance the Shared Savings Program appears to be actually costing Medicare money, $216 million on net by the end of 2015. This means that the losers are losing more than the winners are saving for Medicare, net of their payouts. No downside risk for the Shared Savings Program ACOs of course translates into the fact that the losses are uncapped for the program as a whole. Still, the recent summary makes clear that ACOs that entered early are now saving Medicare absolute dollars on net; that is, they are performing much better than those who entered more recently. And a recent Health Affairs Blog post pointed out that Medicare’s method for setting baseline spending targets is not likely to be the same kind of counterfactuals that the better evaluations employ, based on similar groups’ actual performance in the same time period. Nevertheless, it seems fair to conclude that even with and maybe especially with no downside risk, learning and implementing enough care transformation and key patient identification techniques to save substantial resources while maintaining or improving quality takes some time. Bundled payments are logically superior to fee-for-service in theory, and the most interesting bundled payment experiments of the Innovation Center, Bundled Payments for Care Improvement Model 2 (prospective acute and postacute), showed that 3 percent savings are possible in orthopedics and cardiology from inpatient through 90 days after discharge, but only through postacute use savings. The bundle for spinal surgery actually led to an increase in total costs of more than 10 percent. Model 4 (prospective for hospital and physician for inpatient only) results were insignificant all around. Bundled payment models are promising incentive and care changing tools, but clearly parameters need adjusting since broad savings may be initially possible only in postacute use choices. That’s something but quite a bit less than hoped for by advocates to be sure. Now for the most common payment reform model across public and private payers, patient-centered medical homes. The Comprehensive Primary Care Initiative (CPCI) evaluation of a medical home model for Medicare beneficiaries is sobering, since this was the Innovation Center’s high-profile effort to improve primary care performance, with more than 2,000 clinicians in more than 450 practices participating from 2012 through 2015 across seven states or regions from New York to Oregon. Total costs did not decline in any year, on average, net of care management fees, and only two regions reported net savings in any one year. Quality improvement was even rarer, with only two metrics showing improvement, and these results were driven by a minority of r[...]

Fighting HIV/AIDS: Human-Rights Focused Advocacy Is More Critical Than Ever

Fri, 11 Aug 2017 15:02:46 +0000

We are at an interesting and uncertain time in global health. The political climate is, to put it mildly, dynamic. One need only look at the United States, historically the largest donor to the global AIDS response, to see how precarious progress is at the moment. The Trump administration outlined devastating budget cuts that, if enacted, could erode progress, lay the groundwork for further inequities, and hurt those who are already most vulnerable to the HIV/AIDS epidemic. Source: FCAA (Funders Concerned About AIDS) Data Spotlight: HIV Philanthropy for Advocacy & Human Rights, April 2017 While the United States is not the only global donor, other bilateral and multilateral HIV and AIDS funding has been flat lining in recent years. A recent Henry J. Kaiser Family Foundation/UNAIDS study indicates that donor government funding for HIV declined by 7 percent in 2016, falling to its lowest level in six years. In the fight against HIV and AIDS, advocacy is more critical than ever. Often, advocacy is the strongest lever to address the kinds of challenges we now face. It is also an arena in which philanthropy has made important contributions. Since the early days of the AIDS epidemic, philanthropic efforts have helped to drive scientific and therapeutic advancements, change policies and public opinion, and raise the voices of, and increase protections for, those most vulnerable to HIV and AIDS. For example: Through the M•A•C AIDS Fund, M•A•C Cosmetics dedicates 100 percent of the selling price of Viva Glam products to programs supporting men, women, and children affected by HIV and AIDS around the world. More than a third of these resources were directed toward advocacy and human rights in 2015 alone. In 2004 the Levi Strauss Foundation became the first corporate foundation to support expanded access to sterile syringes, the only proven method (needle exchange) of preventing HIV among the intravenous (IV) drug users who are particularly vulnerable to infection. The Robert Wood Johnson Foundation’s (RWJF’s) landmark 1986 contribution of $17.2 million supported the scale-up of community responses to HIV and AIDS. Through the AIDS Health Services Program, the RWJF awarded grants in eleven cities over a period of four years and helped establish the platform upon which the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act, enacted in 1990, was built. Though philanthropic funding comprises only 2 percent of global resources in the fight against HIV/AIDS, its contributions are critical. In fact, philanthropic dollars are often the only resources allocated to advocacy. Such funding has helped to reduce stigma surrounding HIV and AIDS, expand legal services for victims of discrimination and of unfair criminalization laws, inform policy, protect the rights of those most vulnerable, and combat widespread discrimination. However, as a recent data spotlight from Funders Concerned About AIDS (FCAA) shows, this powerful weapon—advocacy—in the fight against HIV and AIDS is dramatically underfunded. Consider that in 2015, 41 percent of HIV philanthropy for advocacy and human rights was distributed to organizations supporting key populations—including sex workers, people who inject drugs, transgender people, and gay men and other men who have sex with men. This is certainly impressive; however, many communities all over the world continue to be both heavily affected and woefully underfunded. Source: FCAA (Funders Concerned About AIDS) Data Spotlight: HIV Philanthropy for Advocacy & Human Rights, April 2017 NOTE: MSM is men having sex with men. In addition, while Eastern Europe and Central Asia comprise 19 percent of new infections among key populations globally, these regions receive only 5 percent of HIV-related philanthropy for the advocacy and human-rights efforts, resources that are critical to fighting the epidemic among those most a[...]

The Future Of Value-Based Payment—Time To Reexamine And Refocus Our Efforts

Fri, 11 Aug 2017 14:10:02 +0000

Great strides have been made over the years in the care of Medicare beneficiaries by focusing on and implementing quality performance measurement and hospital value-based payment systems. However, the laws and regulations that drive these efforts have not been revisited since their inception, and it is time for reexamination. Changes and adjustments should be made to ensure that the programs continue to advance better and more efficient care across the health care delivery system. Examining The Goals Of Value-Based Payment There remains a broad-based understanding that quality improvement, transparency, and accountability are now accepted across the spectrum of health care stakeholders and that tying the three to payment is an established objective of both the public and private sectors. But value-based programs cannot remain static and still drive quality improvement. So how does Medicare learn from the current programs to remain focused on improving patient care while maintaining relevance for clinicians and hospitals that are ever-improving their metrics and health care delivery? These issues were discussed at a recent Health Affairs forum entitled “Securing the Future of Value-Based Payment.” The event built on the growing evidence that our current efforts aren’t working as designed, a topic of much debate across the quality/performance measurement communities. For example, value-based payment advocate, Ashish Jha, director of Harvard Global Health Institute, recently asked a key question—“Value-Based Purchasing: Time for Reboot or Time to Move On?” After decades of the quality measures discussion and implementation in Medicare and other programs, I believe the answer to Jha’s question is—it’s time for a reevaluation and a reboot. If we strictly adhere to the current path, Medicare performance measurement could become an exercise in mandated compliance instead of actual performance improvement. Now is the time for stakeholders across the health care sector—from patients to providers to payers to regulators—to pause, reexamine, and refocus our efforts. The refocus begins with targeting measurement to capture what matters most, minimizing burden, and adapting to a transforming delivery system that strives to clinically integrate care. Reengineering For Meaningful Reporting And Payment Ongoing evaluation is the starting point for future success, and the current state of quality measurement and paying for value needs improved measure design and selection, reduced burden, and aligned incentives through payment policies. For example, in measure design and selection, appropriate risk adjustment is needed, including adjusting for sociodemographic factors, to ensure providers aren’t inappropriately penalized for conditions and demographic effects their patients bring into the patient-provider relationship. Consumers are frustrated with currently available measures, particularly the lack of measures that address patients’ most pressing concerns about treatment outcomes, such as mortality, complications, and functional ability. And, use of paper-based instead of electronic health record–based measures drawn directly from workflow, as well as the lack of alignment between hospital and clinician quality measurement and reporting, creates a burden. The latter leads to duplicative—or sometimes even conflicting—efforts. These concerns are especially timely given the developing implementation of the Medicare Access and CHIP Reauthorization Act, which aims to pay for clinicians’ Medicare services based on value. Providers believe payment policies focus on the wrong priorities (for example, penalizing hospital readmissions far more than penalizing mortality) and are unable to adapt the federal payment system as we continue to refine quality measurement through new sources of data and im[...]

New Guidance On CSR Payments And Risk Adjustment: Answers … And More Questions

Fri, 11 Aug 2017 13:52:01 +0000

The ongoing saga of the cost-sharing reductions just got stranger. On August 10, 2017, the Centers for Medicare and Medicaid Services released at their website a guidance on risk adjustment methodology and rate filing deadlines. The guidance states “At this time, there have been no changes regarding HHS’s ability to make cost-sharing reduction payments to issuers.” But “[m]any state departments of insurance (DOIs) have permitted issuers to increase rates for their silver metal level plans for the 2018 benefit year in order to account for uncompensated liability that issuers may face for cost-sharing reductions provided to eligible individuals.” Because of this, CMS intends to modify its risk adjustment methodology in future rulemaking for marketplace insurers that increase their silver plan rates “to account for cost-sharing reduction payments in this manner.” Moreover, to allow states to permit insurers to modify their 2018 rates to account for this, HHS is delaying its deadline for rate filing modifications to September 5, with final determinations on qualified health plan rates due on September 20 and final QHP rate tables due September 25. In other words, HHS may stop reimbursing insurers for reducing cost sharing for low-income consumers at some undetermined point in the future—it has not yet decided. This despite the fact that the ACA requires the payments; insurers, the National Association of Insurance Commissioners, the National Governors Association, consumer groups, even the U.S. Chamber of Commerce are urging HHS to continue the payments; and a court order instructing HHS to not pay pending an appropriation for the payments is stayed while on appeal. Because of the uncertainty HHS has created, some states have instructed their insurers to assume the payments will not be made and increase their rates accordingly. Thus, HHS is now changing its risk adjustment formula and filing dates. But we still do not know if all of this is needed or not—the Trump administration has not made up its mind. CMS’s risk adjustment methodology is designed to shift funds from plans that have lower claims costs to plans with higher claims costs, in part to create a disincentive for favorable selection. HHS has to date assumed that insurers are fully compensated by the cost sharing reduction payments for their obligations to reduce cost sharing, but also that CSRs will increase demand for services because they make the services less expensive to the user. The risk adjustment formula has included a CSR adjustment factor to account for this. The formula also includes an induced demand adjustment factor for various metal level plans, again recognizing that reduced cost-sharing for higher actuarial value plans increases demand. What’s In The Guidance? Insurers will not be compensated for CSRs by increased silver plan premiums rather than directly in states that require insurers to load the cost of CSRs onto silver plan premiums. CMS has decided, therefore, to treat 87 and 94 percent cost-sharing reduction variants simply as 90 percent AV platinum plans, and to use the platinum plan coefficients and induced demand adjuster instead of a CSR adjuster. CMS will apply the silver plan coefficients and transfer formula to 73 percent CSR variant plans. The guidance is unclear as to where this policy will apply. In the first paragraph the guidance says it will apply in states where insurers increase their silver plan rates to accommodate the nonpayment of the CSRs. In the second paragraph, however, it says CMS will apply this policy to all states in which HHS operates risk adjustment in the individual market, which is to say all states. This would effectively mean that all states would have to require their plans to increase their silver plan rates to account for the possible termination of[...]

Making America Healthy Again: Analyzing Trump’s Take On The Social Determinants Of Health

Fri, 11 Aug 2017 13:49:46 +0000

Access to health care is critical for the health of individuals and for the well-being of the community, but health depends on more than medical care. Studies show that the social determinants of health, including education, socioeconomic status, poverty, the physical and social environment, employment, and discrimination, among others, are at least as important for health as is medical care. It is worth considering where the new administration stands with respect to the social determinants of health. President Trump’s budget, perhaps the best indication we have of his administration’s priorities, unfortunately appears to show little interest in addressing the social determinants. The President’s Fiscal Year 2018 budget request, proposed back in May, targeted many of the social factors that impact health, slashing funding for education, energy, the environment, housing and urban development, among other social sectors. If the social determinants of health are underfunded, however, people’s need for health care will increase. As a result, these cuts would hurt the health and well-being of people living in the United States and would drive up the cost of health care. Take, for instance, the connection between education and health. According to economists David Cutler and Adriana Lleras-Muney, four extra years of education reduces the risk of heart disease by 2.16 percentage points and the risk of diabetes by 1.3 percentage points. People with more education are also less likely to smoke, drink excessively, use illegal drugs, or be overweight. In a recent study published by the Brookings Institution, Princeton University economists Anne Case and Sir Angus Deaton show that “deaths of despair”—those associated with drugs, alcohol, and suicide—have risen significantly among middle-aged white non-Hispanic Americans without a college degree. In this respect, the United States is unique among the affluent nations Case and Deaton compare. They largely attribute this rise to a decrease in work opportunities for people with lower levels of education. Trump’s proposed budget, rather than boosting education and training, cuts funding for the Department of Education by 13 percent and for the Department of Labor by 21 percent. It also reduces funding for before-school, after-school, and summer programs by over $1.2 billion. Living conditions also impact health. Asthma has been found to be the leading cause of children’s visits to emergency rooms, hospitalizations, and school absenteeism. Exposure to parasites and infectious agents, air pollution from vehicles, and the construction of buildings with poor circulation and little fresh air are among the causes of asthma in children. Not surprisingly, asthma is more prevalent in poor and minority communities. There is also evidence that public housing is itself a risk factor for asthma. Instead of increasing support for housing, Trump’s budget proposes a 15.2 percent reduction to housing assistance over a 10-year period. The burden of the proposed budget’s assault on the social determinants of health will be borne primarily by the poor, but not only by them. Because people are social, the health of one person can impact the health of many people in a community. Health has some of the qualities of a public good. People are social; they flourish in the company of others. Their health is affected by the health of others and it affects the health of others. Contagious diseases are one example of how the poor health of one person can affect the health of others. Herd immunity demonstrates how the good health of some confers health benefits on others. To put it differently, health has a spillover effect. Studies show that people are healthier when incomes are relatively equal, when early education is high-quality and accessi[...]