Contributor: Sheri Sellmeyer
Topic: Disease Management

Healthways is naturally trying to put a positive spin on its impending loss of a big contract with Cigna, but in truth this likely marks the end of an era for disease management companies.

Large insurers are increasingly moving disease management programs in-house as they gain experience with DM and design medical home pilots. Healthways executives point to other long-term opportunities due to healthcare reform, which offers incentives to providers for improving quality and outcomes. Regional health plans, employers, accountable care organizations, physicians and hospitals are all potential clients.

But those are not on the scale of Cigna, which has contracted with Healthways for 14 years. Its five-year contract expires in 2013, and represents about 17 percent of Healthways’ revenues. Other large insurers are handling disease management in-house. UnitedHealth Group has a business unit, OptumHealth, that provides DM, care management, and wellness to its own members, self-insured clients, and other health plans.

The earliest disease management programs emerged in the 1990s and were begun by pharmaceutical companies. But fears of conflict of interest led to a stand-alone industry, with Healthways being a pioneer. The early DM companies focused on a single disease, such as diabetes, before branching out into other therapeutic areas and comorbidities.

Last year the industry’s trade group, formerly called the Disease Management Association of America, changed its name to the Care Continuum Alliance, reflecting the broader scope of care management to include wellness, prevention and other patient initiatives. Meanwhile, virtually every sizeable health plan is undertaking some major care management pilot, through medical homes, accountable care organizations and partnerships with hospitals and physicians.

So where does that leave disease management companies? Their role is likely that of niche players for rare diseases, since health plans won’t have a high enough percentage of membership to justify certain programs that can be handled by a vendor.

There may also be a greater role for disease management companies to contract with the growing number of employers who are moving to self-insured benefits, but they will face stiff competition from health plans like UnitedHealth that now have the experience, infrastructure, and data to sell their DM programs to other companies.

Contributor: Bill Melville
Topic: Mergers and Acquisitions

For years, Cigna has been considered an acquisition option for one of the nation’s other large insurers; Aetna was often mentioned as a possibility. But after Cigna announced Oct. 24 its proposed acquisition of Medicare player HealthSpring, it became obvious the insurer had other ideas.

As Cigna CEO David Cordani hinted at in previous public statements, Cigna chose to expand its Medicare capabilities by purchasing an established plan. The estimated $3.8 billion deal will close in the first half of 2012 and will broaden the scope of Cigna’s operations. Aside from a handful of markets, Cigna’s strength is concentrated in commercial products. It discontinued its Medicare private fee-for-service plans for 2011 because of new network requirements but retains a national Part D presence with more than 500,000 PDP lives, according to HealthLeaders-InterStudy data.

Cigna operates its own PBM, and HealthSpring contracts with SXC for retail, mail and specialty pharmacy, so Cigna will see an equally significant bump in Rx lives. Because most of Cigna’s commercial customers come from self-funded plans, it does not have the same volume of Rx lives as many of its top competitors.

Like WellPoint’s purchase of CareMore Health Plans in California and UnitedHealth Group’s acquisition of Physicians Health Choice HMO in Texas earlier this year, this purchase places Cigna on strong Medicare footing. HealthSpring operates Medicare Advantage plans in 11 states and a nationwide Part D standalone plan.

Outside of Phoenix, where it owns Cigna Medical Group and operates clinics, Cigna never made great inroads into Medicare Advantage. But it has been a leader in accountable care partnerships with provider groups around the country. The Living Well Center concept that HealthSpring used in Texas, Tennessee and Alabama, which features a HealthSpring-owned clinic for seniors, is similar to the clinic/health plan concept Cigna has maintained in Phoenix.

In August 2010, HealthSpring acquired another big Medicare Advantage player, Bravo Health, which operates Advanced Care Centers in Baltimore and Philadelphia for non-emergent care and chronically ill members who need care beyond a primary-care physician’s scope.

Those centers could also play into Cigna’s accountable care future. Cigna already has a strong accountable care presence in Texas, HealthSpring’s largest market by enrollment.. HealthSpring also supports Living Well Practices in Houston, in which a HealthSpring team including nurse practitioners and pharmacists support with a physician practice that sees high volumes of HealthSpring patients. High-scoring MA plans in Tenneessee and Florida, where HealthSpring’s plan recently earned four stars from the Centers for Medicare & Medicaid Services, could also play a role.

Cigna will retain HealthSpring’s executive team to manage the integration of the Medicare operations into Cigna’s structure and expand the business geographically. Their expertise should aid Cigna in rivaling UnitedHealth and Humana in key HealthSpring markets and potentially in new markets.

Fifteen million people will age into Medicare over the next 10 years; by jump-starting its Medicare business with HealthSpring, Cigna is clearly indicating it wants to be a player in that market.

 

Contributor: Sheri Sellmeyer
Topic: National Committee for Quality Assurance Update

Business pundits often say “What gets measured gets improved.”

But it takes time, according to the latest State of Health Care Quality Report from the National Committee for Quality Assurance.

NCQA tracks HEDIS measures for more than 1,000 health plans. The HEDIS tool measures care such as asthma medication use, weight management, and controlling blood pressure. Comparing 2009 to 2010, many measures showed little meaningful change, except for colorectal cancer screening, use of spirometry testing for COPD and pharmacotherapy management of COPD (all improved).

But over time, 23 of the 32 HEDIS Effectiveness of Care measures showed clear trends of improvement among commercial HMOs. Over the past six years, measures showing the most improvement were colorectal cancer screening, HbA1c screening for diabetics, and medical attention for nephropathy. The latter two likely reflect the fact that most health plans have disease management programs for members with diabetes – a move considered low-hanging fruit for improving care and cutting medical costs.

NCQA also looks at the overuse of certain procedures and drugs, and found no improvement over six years in the overuse of imaging studies for low back pain, and an increase in the overuse of antibiotic treatment in adults with acute bronchitis.  Besides disease-specific data, the report compares HMOs to PPOs. HMOs rated 6 percent higher than PPOs on patient experience (likely a result of higher cost-sharing for PPOs), but PPOs outperformed HMOs on measures related to drug therapy and monitoring.

The NCQA report should be required reading for pharmaceutical marketers, who can mine its content for partnership opportunities with health plans, employers, and providers. The Accountable Care Act provides numerous incentives for improving the quality and efficiency of healthcare. Payers and providers have a bigger stake than ever in making that happen.

Contributor: Bill Melville
Topic: Accountable Care Organizations

If the proposed and final accountable care rules could be captured in a before-and-after photo, they would look much like a weight loss ad, thanks to the lean, slimmed-down final version. The final Medicare rules scaled back measurements and regulations considerably.

Changes came as no surprise; in the end, the feds had to relent. The earlier ACO rules sparked provider uproar over the penalties built into the share savings program and the short timeline for 2012 participation. Private ACO development continued, but most early interest vanished. ACO forerunners like the Mayo Clinic and Intermountain Healthcare passed on participation, even in the Pioneer ACO model intended for organizations more experienced at coordinated care.

In the final regulations released on Oct. 20, CMS cut the number of quality markers from 65 to 33, dropped the electronic medical record requirement, made the ACO structure more flexible and added multiple starting dates throughout 2012. They also cut the penalty for not meeting quality markers for Track 1, in which the ACO shared savings with CMS for the first two years but could lose money for exceeding the Medicare norm in the third year. It will continue to offer Track 2 as a risk/reward model for all three years.

Most changes were common sense. While retaining electronic medical record use as a quality indicator, CMS will not require that 50 percent of providers achieve meaningful use status. Along with moving the start dates to April 1 and July 1, 2012, CMS will extend the first reporting “year” out to 18 or 21 months, giving ACOs more time to measure their progress. While it could be difficult for providers who have not adopted EMRs to monitor their progress, the extended initial reporting period should help. ACOs will receive lists of likely beneficiaries up front, giving them more preparation time for the prospective population. The first set of rules would have given ACOs no inclination about whom they might serve. Few ACO participants would jump into an environment offering no details about their beneficiary population.

The final rules do not eliminate the lingering question: Will providers form Medicare ACOs? At first glance, the final rules offer better value and less downside for physicians. Participation of a few big providers could tip the scales for more reluctant providers. But it will probably not become clear until early 2012.

Contributor: Jenny Kerr
Topic: Health insurance exchanges

The National Committee for Quality Assurance held a conference call recently to provide education on health insurance exchanges—except that because these exchanges are still in their infancy, the talk was short on state details and focused on advocating best practices for states.

Leaders from the NCQA, National Business Group on Health and the Consumer-Purchase Disclosure Project told listeners that exchanges should allow consumers to compare the quality and cost of each plan online side by side, and have a chief value officer in charge of controlling costs. Exchanges should be high-touch, using social media and technology like smart phones to reach consumers to tell them about this new way they can purchase health insurance. They want those in charge of exchanges to be skilled in choosing high-value plans as part of the exchange, especially those that offer value-based insurance design that promotes primary care.

If consumers are shopping for a high-deductible health plan, the NCQA and others want consumers to have an online portal to calculate their yearly cost based on their average use of healthcare services and clearly list what will and won’t be covered under that deductible. Finally, they suggest choosing exchange board members who are not politically motivated. This is probably key to the proper function of an exchange, as political battles over accepting Innovator Award money to help develop the exchanges have erupted in states like Oklahoma; newly elected Republican Gov. Mary Fallin accepted the money, then turned it down after it created a firestorm from conservatives in the state.

The conference call showed how really game-changing these exchanges will be, emphasizing that COBRA will basically be eliminated because of its high cost and that part-time and seasonal employees will finally have a way to buy health insurance. The speakers want businesses, large and small, to be able to purchase insurance in exchanges.

All these ideas make it clear that states have a long way to go in setting up how their exchanges will work, and ultimately be implemented. Keeping consumer choice and value in mind at every turn and keeping politics out of the equation are probably keys to making these entities work at their best. Now, we just have to see how states actually use these recommendations when setting up their exchanges.