Insurer payments for medications dependent on efficacy
July 02, 2016
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July 02, 2016
In another example of how payers are pushing for better value, STAT reported that Harvard Pilgrim and two pharmaceutical companies have agreed that total payments for certain medications should depend on the efficacy of the medications. Harvard Pilgrim, an insurer, will expect discounts or rebates if medications do not outperform competitive options. In theory, both sides could be happy: Harvard Pilgrim would be paying for results, not just volume, while pharmaceutical companies might get reimbursed more if their products really perform better than alternatives.
Getting an accurate measure of drug effectiveness is likely going to be difficult. I would guess that Harvard Pilgrim will be primarily reviewing claims data, which has its limitations. For one, if a drug causes certain side effects, it may be difficult to recognize them. Nevertheless, this is an encouraging step towards measuring and paying for effectiveness within the realm of medicine.
June 25, 2016
The practice of pharmaceutical representatives bringing lunches or inviting doctors out to fancy retreats has long been controversial. The practice was so controversial that Congress passed a law called the Physician Payments Sunshine Act, requiring that gifts and sponsorships from pharmaceutical had to be disclosed publicly. HHS then required that such disclosures had to be reported through it, centralizing the information and making it available for download. Around the same time, CMS also made Medicare prescription information available, allowing researchers to study the correlation between payments from pharmaceutical companies and physician prescriptions. One such study was recently published in JAMA.
Perhaps not surprisingly, the study found that there is indeed a correlation between receipt of industry-sponsored meals and an increased rate of prescribing the promoted medication. The paper is clear to point out that the conclusion is only a correlation, not a causation. Bloomberg published some interesting commentary exploring why that distinction is very important. The author of that editorial argues that maybe -- just maybe -- physicians are learning important information about the promoted medications that causes them to prescribe them more. More research needs to be done to figure out whether these sponsored meals are unduly affecting physician behavior, but regardless, it seems appropriate that consumers have this information available to them so they can decide whether to be wary.
June 17, 2016
Following last week's post about Geisinger Health requesting a 40% increase in premiums, the Kaiser Family Foundation released a preliminary analysis of fourteen major cities, reporting that on average, premiums for benchmark silver ACA plans are expected to rise by 10% for 2017. Only two of the fourteen cities analyzed expect a decrease in the benchmark premium.
The New York Times published interesting commentary on this study, with the reporters questioning whether the increases this year are one-time adjustments or part of a longer trend. It still seems early to make a call on that question. While people are enjoying better coverage, it's unclear whether there is anything in the pipeline that effectively addresses the underlying pricing concerns.
June 12, 2016
The New York Times profiled Geisinger Health, an apparently enthusiastic supporter of the Affordable Care Act. Specifically in the spotlight is Geisinger's request to increase insurance premiums by 40 percent for 2017. They are not alone, of course, as Blue Cross and Blue Shield of Texas asked for an increase of nearly 60 percent. Other states are expecting significant increases as well, although generally not quite as severe. Part of the rationale is that insurers previously lacked sufficient historical data to accurately estimate claims.
The rate of uninsured has dropped after the implementation of the Affordable Care Act, which means that more Americans are getting coverage. At the same time, it appears that health insurance premiums might be rising faster than many have expected. In essence, the Affordable Care Act seems to have helped with coverage, but not with cost. Rapidly increasing costs might at some point become an issue of access.
June 05, 2016
Dr. Ashish Jha posted an interesting critique of the Hospital Compare website run by the Centers for Medicare and Medicaid Services (CMS). His criticisms are that there are too many measures, the measures aren't differentiated in importance, and the statistic methods don't differentiate among enough hospitals (only 0.5% of hospitals were rated as below average on one metric).
Having worked with this data before, I agree with the second two criticisms. The first criticism may be true, but would be addressed by a solution to the second criticism -- if consumers knew which metrics to pay attention to, the sheer volume of other metrics would be less overwhelming. The additional metrics might still be useful to those who want to get into details and need not always be presented. Ideally, those in the medical community could come out and identify which metrics are the most important to watch. For the metrics to be useful, they would indeed need to differentiate among more providers instead of lumping the vast majority of them into an "average" category.
Getting transparency correct in healthcare is hard. Fortunately, Dr. Jha points out some benefits to transparency, as demonstrated with regards to New York State's cardiac surgery reporting.