Contributer: Paula Wade
Topic: Aetna

Other than giving the folks in the Marketing Department something to do, “re-branding” is generally a fairly shallow cosmetic exercise at most businesses. But Aetna’s recent makeover of its logo attends a real transformation in the company’s business, shaped by healthcare reform and market forces and, perhaps, the uncertainty around healthcare’s future.

Gone from Aetna’s logo is the very happy-looking human figure with upstretched arms and a cheerful yellow ribbon/banner. The new logo is all lowercase, smooth, and, hearkening back to the company’s pre-2001 logos, the A and E are connected again. It leaves me wondering where that happy guy went.

Aetna is a distant third behind UnitedHealth Group and WellPoint nationally, and a perennial leader in the second tier of health plans in most markets, after the local Blue plan and United. What that means is that while the big boys can muscle top discounts from local providers, the Aetnas of the world don’t have as much rate negotiation leverage, so they’ve had to be more careful underwriters who compete on service.

That becomes a serious challenge now that healthcare reform is limiting medical loss ratios (requiring plans to spend 80-85 percent on actual healthcare and quality) and ending underwriting as the industry has known it. The result: it will be harder for second-tier plans to compete without winning superior discounts from providers. Further, healthy groups as small as 50 are moving to self-insure, hiring insurers like Aetna to do the less lucrative fee-based administration business.

Aetna’s answer is to seek out large provider groups in promising markets to develop a multi-line ACO strategy, exemplified by its ACO with Carilion Clinic in Roanoke, Va. It’s busy inking collaborative agreements all over the country that will allow Aetna to compete well as an insurer, but also as an ACO partner and wellness company.

Healthcare reform and the imperative for efficiency in healthcare delivery is changing the game for everyone, of course. Aetna has acquired IT companies (Medicity), a TPA firm (Prodigy Health Group) and a health plan administration firm (PayFlex), and is busy developing ACO-like collaborations with key providers in its major markets around the country. Aetna’s business will be divided into four segments: health insurance products and services; wellness programs and resources; financial planning for healthcare spending; and a service provider to healthcare organizations (such as ACOs).

Aetna’s new purple logo is smooth and pretty and, well, generic. It could be a logo for anything, really. And perhaps that’s the point.

Contributer: Ric Gross
Topic: ACOs

When Massachusetts passed its near-universal healthcare reform law in 2006, the state found itself in the center of the healthcare spotlight. In fact, as the law initially received positive reviews, those who helped craft the legislation were treated as a form of rock stars—healthcare versions of Bruce Springsteen, if you will.

But what a difference a few years and a presidential primary make. Massachusetts’ effort has become something of a political football; meanwhile, reality has set in as the state deals with healthcare cost control, not something that was truly addressed in 2006.

Now Massachusetts is once again in the spotlight as the state with the second-most Pioneer Accountable Care Organization projects – five provider organizations out of 32 nationally. The groups are charged with coordinating care and lowering healthcare costs for a targeted Medicare fee-for-service population. The pilot began Jan. 1, 2012, and will run for three years. Only California, with six Pioneer ACOs, had more than Massachusetts. And there is just a tad bit difference in size there.

Representing Massachusetts are Atrius Health Services, serving beneficiaries in eastern and central Massachusetts; and four others in eastern Massachusetts: Beth Israel Deaconess Physician Organization, Mount Auburn Cambridge Independent Practice Association, Partners Healthcare, and Steward Health Care System. All five systems have strong integrated care capabilities.

In total, the New England region is home to seven Pioneer ACOs, the other two being Eastern Maine Healthcare System and Dartmouth-Hitchcock Medical Center, serving New Hampshire and part of Vermont.

In a lot of respects, it was somewhat of a no-brainer for the Massachusetts groups to apply, and in turn to be selected. All are well suited to take on the challenge, with infrastructure and staff mostly in place. In addition, all five groups are already working under an incentive-based contract with the state’s top insurer, Blue Cross Blue Shield of Massachusetts. The Alternative Quality Contract uses global payments covering all services received by a patient, including primary, specialty, and hospital care; outpatient services such as imaging; and prescription drugs. Payments are adjusted for age, sex, and health status and increase annually in line with inflation. The initial payment level is derived from the historical experience of the provider group. A second payment includes substantial performance incentives tied to nationally accepted measures of quality, effectiveness, and patient experience, with more than 30 different measures of success.

Most insurers in Massachusetts have similar deals in play or in the works. And though the Blue Cross Blue Shield contract covers only the HMO commercial population, the structure is somewhat similar to the Pioneer ACO contractual model. During the first two years of the Pioneer ACO model, participants will operate under a shared savings and loss model, meaning they will share either the savings or losses associated with their set of Medicare beneficiaries that participate in the ACO. For the third year, ACOs that meet program requirements will be reimbursed via a population-based payment that pays providers on a per-member, per-month basis instead of a fee-for-service basis.

Of course, none of this guarantees the Pioneer ACO model will be successful. Early data has been positive for the AQC, but there just hasn’t been enough time to draw conclusions. Regardless, there should be no surprises in store for the Massachusetts “pioneers.” After all, they’ve already experienced the good, the bad, and the ugly of life in the national healthcare spotlight.

Contributer: Jane DuBose
Topic: Medicare

The past week might be one that Republican presidential candidates and the designers of CMS pilot programs will want to forget. Disappointing results. Funny numbers. The need for better PR. And that’s just Mitt Romney.

What the candidates and CMS may have in common is the need for some good news, and, especially for the Centers for Medicare & Medicaid Services, there was none to be had.

For years, the conventional wisdom was that many of the CMS pilot programs designed to slow down spending would deliver the goods. But a January report from the Congressional Budget Office pointed out just the opposite—that most of the pilot programs over the past two decades have produced disappointing financial results. Only two of 18 programs with fees at risk in disease and care coordination programs reduced total Medicare spending noticeably. And among four large demonstrations that altered the financial incentives paid to providers, only a program designed around bundled payments produced significant savings for Medicare.

One of the themes of the new CBO report is the failure by many of the pilot programs to reduce hospital admissions enough to offset fees associated with the greater use of care managers. Among 34 DM and care coordination programs (of which the above-mentioned 18 programs are a part), hospital admissions fell by an average of 7 percent and regular Medicare spending fell by 6 percent in programs where care managers had substantial interaction with physicians.

That sounds like positive news on the face of it, but the CBO says that the programs would have had to reduce regular expenditures by 13 percent, on average, to offset the fees for the coordinators.

The news from the value-based payment demos wasn’t much better. Three programs were highlighted: the 10-year Physician Group Practice demo involving 10 large group practices; another involving 278 hospitals paid bonuses based on quality-of-care measures; and the heart bypass demo involving bundled payments for all inpatient hospital and physician services. The star of this bunch was the last one, which reduced Medicare’s spending for heart bypass surgeries by about 10 percent—without adverse effects on patients’ outcomes, the CBO says.

Over the years, HealthLeaders-InterStudy has tracked the PGP demo involving physicians, who have reported mixed views on the program featuring incentive payments for meeting quality metrics for their patients. The CBO says while CMS was able to share bonuses with several of the groups over the duration of the program, there’s not yet any data to support it produced savings overall.

In CMS’ defense, there’s not yet full data for the full PGP program, but we all might want to hope that when it does come in, it will prove to do better than these early results. Several of the PGP groups, including Dartmouth-Hitchcock in New England, are using the PGP as the basis for their decision to participate in the new Pioneer accountable care organization program.

If, three to five years from now, we find the Pioneer ACOs did no better than these demo projects, it may really be time to worry that care coordination, at least for old and sick Americans, is, at best, budget neutral.

Contributor: Laura Beerman
Topic: Pharmacists

When more people have access to healthcare coverage in 2014, the existing shortage of physicians could make a good doctor even harder to find. Waiting in the wings are other practitioners—including pharmacists—who can provide effective, patient-centered care.

Jon Roth, chief executive officer of the California Pharmacists Association, wants to see his members play a much larger role in patient care management than they currently enjoy.

“A big push for 2012 will be working to move pharmacists to a provider status role that is far beyond simply dispensing medication. By having pharmacists on the care team, you can lower costs, increase adherence and improve outcomes.”

CPhA may sponsor legislation in the coming year to define a role for pharmacists when it comes to ACOs and medical homes. They are also working with California’s health insurance exchange board to help define the role of pharmacists as the state designs its essential benefits plan.

Roth isn’t the only one who sees pharmacists taking a greater role. Cora Tellez, president and CEO of Sterling Health Savings Administration and the newly formed Sterling Self-Insurance Administration, agrees. Sterling’s PBM partner, Ventegra, offers a Medication Therapy Management Program that is a key component of her company’s SIA services.

“This concept reclaims a role for pharmacists that they haven’t had in a while,” says Tellez. “It puts them front and center when it comes to a role in patient management. It’s the next generation of PBM.”

Pharmacist involvement will likely also be part of next-gen innovations such as medical homes and accountable care organizations. Among big players in California, it already is. Pioneer ACO awardee Monarch HealthCare and San Diego market-share leader Scripps Health are among the providers putting pharmacists on their care teams.

Successful healthcare reform will require that all hands be on deck. Maybe it’s time to expand the role that pharmacists and other practitioners play in that effort.

 

Contributer: Joel Peyton
Topic: Medicare Part D plans

New star ratings metrics that measure both Medicare Advantage plans and Part D prescription drug plan performance could prove difficult for some stand-alone prescription drug plans. While PDP plans do not receive reimbursement bonuses based on overall performance, they do face scrutiny from the Centers for Medicare & Medicaid Services if plans score less than 3 stars for three years in a row.

In 2012, CMS began grading MA plans with prescription drug coverage and PDP plans on how well members adhere to prescriptions for blood pressure, cholesterol, and diabetes. Drug adherence can work to an MA plan’s benefit because better adherence by members should result in lower medical costs. However, since PDP plans have no type of medical coverage, better drug adherence by members will actually cost plans more money, without the benefit of the lower medical costs.

How well a PDP contract performs on the new drug adherence scores, which are weighted higher than most other part D measures, could drastically affect the overall star rating. For example, the Coventry’s First Health Part D contract, S5768, received a poor rating of 2.5 stars. Coventry offers the Premier plan, a richer PDP plan, and the Value Plus PDP plan, a new plan that includes a preferred network arrangement, under this contract. An analysis of the 2012 ratings shows that S5768 scored a dismal 1 star, the worst rating, on adherence for oral diabetes drugs and blood pressure prescriptions.

Another difficulty that plans could encounter is when the plan’s generic drug copay is more than the cost of a generic drug at a pharmacy. For instance, a member’s PDP plan generic drug copay is $6; however, the member can obtain the drug at a Kroger pharmacy for $4. As a result, the member will not have his insurance card processed through the Kroger pharmacy claim system when he gets his drug filled. The PDP plan has no way to record that the member is getting the drug filled, which falsely indicates the member is non-adherent to the drug.

Because of the new focus on drug adherence, many MA plans and PDP may be inclined to lower generic prescription drug copays to $4 or less in order to capture drug claims information at pharmacies.

It’s becoming more difficult for PDP plans in 2012, but it will likely get even harder in 2013. CMS has proposed that additional measures be added, such as how well Part D medication therapy management programs perform comprehensive medication reviews, which target patients with chronic conditions.

Faced with mounting regulatory, compliance, and quality hurdles, some plans may decide to get out of the PDP business altogether. CVS Caremark, one of the largest PDP plans in the country, already snapped up Universal American’s stand-alone Part D business in 2011. Just last week, Health Net announced that it is selling its stand-alone Part D business to CVS Caremark. If seems as if the big PDP plans are just going to get bigger, while many of the smaller ones may just disappear.