Contributor: Jane DuBose
Topic: Unexpected Lesson Learned from AMCP

It’s probably no surprise that biosimilars, accountable care organizations and outcomes-based contracting are all hot topics at the annual Academy of Managed Care Pharmacy meeting here in Minneapolis April 27-29. But here’s one thing I didn’t expect to learn – apparently, doctors who sit down during their office visits have more satisfied patients than those who stand.

The standing-versus-sitting observation came up at a session on medication adherence and was being used by an employer to illustrate the important, but ignored, role physicians have in making sure their patients are compliant with their prescription drugs.

Bruce Sherman, consulting medical director of global services for Goodyear Tire & Rubber, says employers have poured a lot of money into value-based insurance designs and have lowered or waived copays and coinsurance on drugs to help make patients more compliant. But he cited a recent study published in Health Affairs that VBID intervention only increased medication adherence by four percentage points.

Sherman believes that physicians are an untapped resource in making sure patients are on task with their meds, yet they rarely even receive the drug data necessary to intervene. When he asked for a show of hands in the room from anyone who was aware of physicians getting this kind of data, he got no takers.

The Employer Health Purchasing Corporation of Ohio recently studied the link between patient-physician relationship and health outcomes. The study found that patients who are seen consistently by a single physician rather than a variety of clinicians in a practice achieve better scores in diabetes and cholesterol control, among other measures.

Obviously, the patient-doctor relationship goes deeper than sitting versus standing. But I saw many heads nod when Sherman highlighted this point. Mine was one of them. I’m thinking about dropping one of my own doctors who never seems to hear my concerns. Naturally, she’s a stander.
 

Contributor: Jane DuBose
Topic: Medicare Advantage

You could write a book on the various experiments that the federal government has undertaken to slow down the growth in Medicare spending. There have been initiatives on paying for better health outcomes among patients and reducing payments for hospital-related infections, and others designed around serious and costly conditions such as end stage renal disease.

But here we are marching toward mid 2011, and the ugly facts of the federal budget deficit are clouding any optimism that clever incentives and smart minds could stall Medicare budget growth. First, consider that frightening statistic about the 70-million-plus Baby Boomers aging into Medicare over the next two decades, a phenomenon that translates into 10,000 Boomers becoming eligible for Medicare each day. Then consider that medical expenses during the last year of life account for more than 27 percent of total Medicare spending. It would be difficult for any cost-cutting initiative – no matter how successful –to overcome those trends.

Medicare is one of three huge social programs – Medicaid and Social Security being the other two – that is gobbling up federal spending so fast that the next generation won’t have enough money for any other domestic programs – for prisons, education, highways and national parks, just to name a few.

U.S. Rep. Paul Ryan’s plan to curb federal spending and the deficit proposes to flip Medicare away from a defined benefit system into a defined contribution one and would shift healthcare for seniors toward private payers. It’s been both lauded and trashed since it was proposed a few weeks ago, but it’s hard to imagine the country is ready to hand over the reins for senior care to Humana’s Mike McCallister and HealthSpring’s Herb Fritch.

Until then, Medicare managed care plans are likely to continue increasing their rolls as seniors comfortable with managed care age into the program. (This will occur even if accountable care organizations attract the 5 million Medicare beneficiaries that the government predicts). If Ryan’s plan, or a portion of it, actually gains momentum, expect the spotlight to shine brightly on Medicare Advantage. ACOs are the hot topic of spring of 2011, but for the long haul, it might be best to bet on the older kid on the block.
 

Contributor: Roy Moore
Topic: Pharma/MCO Contracting

Every bronze medal winner knows that moving from third place to gold requires a strategy for overtaking No. 1 and 2. For Olympian Carl Lewis, improving from a bronze medal at the 1979 Pan Am games to gold at the 1984 Summer Olympics required an intense plan that increased his long jump from 8.13 meters to 8.3 meters. Sometimes gold is won or lost on the strength of those plans, and slight improvements earn you victory.

The same can be true in the pharmaceutical industry. For a few drug companies, an important marketing plan component has been a stop at CIGNA HealthCare and the insurer’s use of outcomes-based contracting. In recent years, the nation’s fifth-largest health insurance company has become a key partner for drugs that rank No. 3 in their class or condition through contracts that reward compliance or reduced costs.

Three years ago, CIGNA inked a deal with Merck & Co. over diabetes drug Januvia. Merck’s therapy ranks as third best-selling diabetes medication after Lantus and Actos (although all three have very different mechanisms). Looking for a way to give Januvia an edge in competing against these other oral therapies, Merck reached a deal with CIGNA that would reward the insurer for customers who were compliant with their diabetes medication (regardless of the brand). Compliance increased, and just as importantly, Januvia was able to position itself as a forward-looking brand.

Earlier this year, CIGNA reached a similar deal with EMD Serono’s Rebif. Under this contract, CIGNA and EMD Serono are focusing on significant relapses for beneficiaries with multiple sclerosis. These relapses can be financial hits for an insurance company, requiring seven days of hospitalization at a cost of up to $11,000. Interestingly, Rebif is the No. 3 selling MS drug and No. 2 best-selling beta-interferon-1a therapy after Avonex. While Rebif doesn’t have some of the features that patients favor (tolerability, less frequent dosing), EMD Serono has found a way to improve patient share by partnering with large MCOs based on the drug’s strengths (outcomes). Specific details of the CIGNA-EMD Serono arrangement have not been released, but they likely involve payments for reducing hospitalizations.

As these agreements show, CIGNA has become the go-to partner for outcomes-based contracts, particularly for those drugs that do not lead their drug class or are new entrants. Because of its integrated medical, pharmacy and disability approach, CIGNA can implement such an arrangement and measure its efficacy. However, CIGNA isn’t Béla Károlyi. It’s not the only carrier that possesses these skills and other carriers should look at this model.

This latest announcement has us thinking who is missing out on outcomes-based deals. Although traditional marketing and outreach campaigns still have their roles, outcomes-based contracting tells the payer world that your drug is so strong that you’re willing to risk your money on it.

Potential insurer partners should have an internal pharmacy benefit manager and a national size to implement this program, meaning Humana, UnitedHealthcare and possibly Aetna (depending on how it’s running its PBM after the CVS deal) would make good partners.

For the drugs, we looked at the third-largest-selling drugs for a particular condition or drug class. We came away with Abbott Laboratories’ Humira for inflammatory bowel disease and Boehringer Ingelheim’s Spiriva for asthma and COPD. These drugs are strong performers today, but could benefit from outcomes-based contracts with payers that differentiate themselves from competitors.

 

Contributor: Christian Bottorff
Topic: Hospital Safety

On a recent long road trip with my old college roommate, we touched on all of the major events in our lives, but then he hit on something else. “What do you like about healthcare reform?” Gulp. This drive had so much promise…

But I did think of an answer. I saw a recent talk by Richard P. Shannon, M.D., chair of the University of Pennsylvania Health System’s Department of Medicine. He regularly speaks to groups about the dire need for healthcare quality improvements.

Shannon generally criticizes a culture of “sanitized data coupled with benchmarking” to explain how C-level executives stay detached from tragic consequences of poor quality care. He cited an example of the “5.1 line infections per 1,000 line days” found at one point at Allegheny General Hospital, where he also chairs the Department of Medicine.

The vague numbers meant 37 patients had a total of 49 central line infections out of 1,753 admissions in a 26-bed ICU, he said. Worse: 19 of the 37 – or just over 50 percent -- died.

“The minute you say there is a goal other than zero [line infections], we create the inevitability that someone has to get one,” Shannon said.

Shannon saw the same problems when he arrived in Philadelphia in 2007 at Penn Medicine. That year, there were 363 central line infections, and about one of every four of the patients involved died. That dropped to 13 line infections in 2010, in part through Shannon’s leadership to enact a sweeping set of changes to get infections to zero. These included hand-washing, training 220 nurses on catheter placement, and asking front-line workers to help come up with solutions.

The changes at Penn Medicine and at Allegheny General didn’t happen because of national healthcare reform. But an important tenet of reform is driving improved quality and outcomes through similar initiatives. Payers are getting on board – including Pennsylvania’s largest insurers, Highmark Blue Cross Blue Shield and Independence Blue Cross. Highmark paid $3.1 million in pay-for-performance bonuses to Allegheny Hospital over a two-year period as the result of a decline in central line infections, ventilator-caused pneumonia and MRSA infections. Independence Blue Cross paid $3.8 million for similar improvements at Penn Medicine.

Like these insurers, payers elsewhere are joining health systems and providers to pay more for this kind of quality, cost-saving care that results in patients spending less time in hospitals. My friend, the skeptic, was listening.

So, he says, how does he, as a small business owner who provides healthcare insurance, benefit? And is it worth it?

Good questions. We still do not know how reform will play out, but we know this: If leaders like Shannon drive the dialogue, lives will be saved and hospitalizations will decline. That is where business owners, like my pal, should begin to see the rewards.
 

Contributor: Lyda Phillips
Topic: Accountable Care Organizations and Antritrust

Overlooked in the excitement of the March 31 release of accountable care organization rules was a document outlining what factors in an ACO would prompt federal antitrust investigations.

Some ACOs will be given a green light. The enforcement policy from the Federal Trade Commission and the Department of Justice creates a “safety zone” that exempts from antitrust review ACOs whose providers control 30 percent or less of the market in their primary service area.

On the other hand, ACOs with 50 percent or more market share are subject to mandatory antitrust review. The red light goes on when any single ACO participant controls 50 percent of the market for any single service. However, regulators promise expedited reviews that theoretically will deliver a ruling within 90 days of the time all documentation has been filed.

For those ACOs with market shares between 30 percent and 50 percent, the caution light is blinking yellow. The enforcement policy says that avoiding the following five traps will significantly reduce the chance of a review:

1. Preventing or discouraging commercial health plans from incentivizing or steering patients to certain providers.

2. Tying sales of the ACO’s services to a commercial health plan’s purchase of other services from providers outside the ACO. For example, a popular cardiology group within the ACO that required a health plan to buy imaging services from a provider outside the ACO would fall under this category.

3. Contracting with other ACO providers on an exclusive basis and preventing or discouraging them from contracting with providers outside the ACO. For example, a hospital that contracted exclusively with an oncology group within the ACO, or discouraged that oncology group from obtaining privileges at the hospital across town that’s not in the ACO, could trigger a review.

4. Restricting a commercial health plan from releasing data on cost, quality and efficiency to enrollees. In other words, restricting transparency.

5. Sharing sensitive pricing information used outside the ACO with other ACO participants -- in other words, collusion.

These “traps” will undoubtedly be subject to vigorous debate during the course of public comment. In several markets, both federal and state regulators have already fired warning shots across the bows of health systems that are rapidly consolidating.

Data from Navigant Consulting show that 59 percent of the hospital industry in the United States remains only moderately consolidated or unconsolidated. That means the FTC, the Justice Department, and state regulators will be busy trying to ensure the healthcare industry remains competitive as providers of all stripes come together.

It’s shaping up to be an interesting—and confusing—time, and one of tremendous change.

But now at least a few of the traffic signals seem to have been installed.


Listen to Lyda's Podcast entitled: Where the Rubber Meets the Road: Accountable Care Organizations and Antitrust Regulations.