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Muskie School of Public Service
Yvonne Jonk, PhD
Associate Research Professor, Deputy DirectorMaine Rural Health Research Center
University of Southern Maine
What to do About Health Care Costs:Efforts to Increase Value and
Affordability
What to do About Health Care Costs:Efforts to Increase Value and
Affordability
Overview•US vs Other Countries
•What Accounts for High Costs? Price vs Quantity•Framework for Assessing Options
•Health Behaviors & Opportunities in Maine
E. C. Schneider, D. O. Sarnak, D. Squires, A. Shah, and M. M. Doty, Mirror, Mirror: How the U.S. Health Care System Compares Internationally at a Time of Radical Change, The Commonwealth Fund, July 2017.
UK AUSNETH
NZ NORSWIZ SWE GER
CAN
FRA
US
Health Care System Performance ScoresExhibit 3
Eleven-country average
Note: See How This Study Was Conducted for a description of how the performance scores are calculated.Source: Commonwealth Fund analysis.
Higher performing
Lower performing
E. C. Schneider, D. O. Sarnak, D. Squires, A. Shah, and M. M. Doty, Mirror, Mirror: How the U.S. Health Care System Compares Internationally at a Time of Radical Change, The Commonwealth Fund, July 2017.
AUS CAN FRA GER NETH NZ NOR SWE SWIZ UK US
OVERALL RANKING 2 9 10 8 3 4 4 6 6 1 11
Care Process 2 6 9 8 4 3 10 11 7 1 5
Access 4 10 9 2 1 7 5 6 8 3 11
Administrative Efficiency 1 6 11 6 9 2 4 5 8 3 10
Equity 7 9 10 6 2 8 5 3 4 1 11
Health Care Outcomes 1 9 5 8 6 7 3 2 4 10 11
Exhibit 2
Health Care System Performance Rankings
Source: Commonwealth Fund analysis.
Service Costs by User Percentile, 2014
A Framework for Understanding Options for Containing Costs
What are the Levers?– Patients
» Disease conditions (access to preventive care)» Health behaviors (diet, exercise, stress) » Cost sharing (deductibles, copays, coinsurance)» Types of insurance (managed care vs fee-for-service)
– Patients and Providers» Patient Centered Medical Homes (PCMHs) – care coordination » Accountable Care Organizations (ACOs) – shared cost savings » Value Based Purchasing
– Providers» Pay for Performance
– Insurers & focus on health care expenditures:» Cap expenditures (Managed Care)» Set global budgets (Maryland)» Cap rate of growth (Medicare – SRGs)
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A Framework for Understanding Options for Containing Costs
How Do We Set Priorities?
• Population Burden - % affected, severity, trends• Magnitude of Disparities – ME vs US, race, gender,
socioeconomic status, geographic location• Economic Burden – costs, lost productivity, deaths• Cost effectiveness of improvement strategies – preventive
approaches save costs in the long run• Feasibility of Implementing solutions – potential partners,
alignment w/national, state, local efforts, evidence based approaches
• Consistency w/business interests of the health system
Obesity vs. Tobacco
Cigarette Smoking in MaineAdults- 2014-2016 vs. High School Youth- 2017
Source: Maine Integrated Youth Health Survey (MIYHS) 2017Source: Behavioral Risk Factor Surveillance Systen
Source: Dartmouth Atlas, 2011
Ambulatory Care-Sensitive Conditions
High-quality, community-based primary care can often avoid hospitalizations for these illnesses. AHRQ
• Heart Failure, • COPD/Asthma• Bacterial Pneumonia, • Diabetes (uncontrolled, complications)• Hypertension• Angina (with no procedure done)• Convulsions• Kidney/urinary tract infection• Gastroenteritis• Cellulitis• Dehydration
Muskie School of Public Service Maine Rural Health Research Center
Questions or Comments?
Yvonne Jonk, PhDMaine Rural Health Research Center
Muskie School of Public Service
University of Southern Maine
Email: yvonne.jonk@maine.edu
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• Who is well positioned to tackle rising healthcare costs?
• State and federal governments have potential for major impact, but political gridlock in DC and other
hurdles make progress challenging
• Nationwide, and in Maine, half the population is insured through employer-based health plans
• Employers are beginning to use that market clout to identify and implement strategies to reduce costs
• Healthcare Purchaser Alliance of Maine
– Maine employers leverage their purchasing power to incentivize high-quality, affordable care
– Strategies reduce costs for HPA members and also drive change in entire Maine market
– Other alliances nationwide adopting similar strategies
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The Healthcare Purchaser Alliance of Maine advances value in healthcare through collaborative and engaged
purchaser action. Its members reward and support improvement in quality, affordability, and service.
MISSION
- Purchaser (employer) led 501c3 nonprofit -- Members represent over 150,000 commercially insured lives in Maine -
- Together they spend over $1 billion annually on health care -
ABOUT THE HPA
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Estimate is statistically different from estimates for the previous year shown (p<.05). Family premiums.SOURCE: KFF Employer Health Benefits Survey, 2018-2019; Kaiser/HRET Survey of Employer-Sponsored Health Benefits. 1999-2017
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Single Coverage Deductibles 2007-2019 Percentage of covered workers with a deductible for single coverage grew from 55% in 2006 to 82% in 2019
Maine has the highest average deductible nationwide for single coverage: $2,447 in 20181
Copays for Specialist Visits 2006-2019
NOTE: Account contributions include an employer s contribution to an HSA or HRA. These estimates include workers enrolledin HDHP/SOs and other plan types. Average general annual deductibles are for in-network providers.SOURCE: KFF Employer Health Benefits Survey. 2018-2019; Kaiser/HRET Survey of Employer-Sponsored Health Benefits,2007-2017
* Distribution statistically different from distribution for the previous year shown (p < .05). NOTE: Average annual deductibles are for in-network providerSOURCE: KFF Employer Health Benefits Survey, 2018-2019; Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2007-2017.1. Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends. 2018 Medical Expenditure Panel Survey Insurance Component. Available at: https://meps.ahrq.gov/data stats/summ tables/insr/state/series 2/2018/tiif2.pdf
INCENTIVIZING USE OF HIGH-VALUE SITES OF CARE
• Proven track record for redirecting care and reducing costs for employers
• Patients get assistance finding high-value providers and get paid to use more affordable,
quality options
• Incentives have encouraged high-value providers to expand services in areas where more
affordable services previously were not available, expanding affordable access to all
patients in those areas
• Rx costs growing twice as fast as the rest of medical spend
• Accounts for over 20 percent of total medical costs
• Pharmacy benefit managers’ (PBMs) role in rising Rx costs:
– Spread pricing—difference between what the PBM bills the employer for a drug and
what it pays the pharmacy; that difference, or spread, is kept by PBM
– Manufacturer rebates—any portion not passed through to payer
• Because PBM contracts typically aren’t transparent, payers may not know how much PBMs
earn through spread or retained rebates
• The Alliance has partnered with
• Transparent, pass-through pricing model
– No spread pricing; employer pays the same amount paid to the pharmacy
– Plan sponsor receives 100% of rebates from manufacturers
• MC-Rx reduces Rx costs by an average of 17 percent, with no change in formulary
• Rebates from MC-Rx average 15-20 percent of total Rx spend
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Healthcare Purchaser Alliance of Maine
11 Bowdoin Mill Island, Suite 260Topsham, ME 04086
207.844.8106info@purchaseralliance.orgwww.purchaseralliance.org
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GETTING UTILIZATION RIGHT: STRATEGIES
Patient Shared Decision-Making
should be the
STANDARD OF CARE
Non-Financial Provider
Incentives
ALSO POWERFUL
Provider Payment Reform
GET INCENTIVES
RIGHT
Insurance Benefit Design
but
KEEP IT SIMPLE
UNREASONABLE PRICES: STRATEGIES
Reference pricing, rate setting, price
regulation to address
PRICING OUTLIERS
Anti-trust, CON/DON, foster
competition to address
MONOPOLYPOWER
Price Transparency to
expose
HIGHPRICES
Oversight entity and Global
Budgets to cap
OVERALL SPENDING
Thank you!
Contact us with your follow-up questions. Lynn.Quincy@Altarum.orgVisit us at HealthcareValueHub.org and Altarum.org
Sign up to be notified about upcoming events, new publications, state news or Research Roundup at:www.healthcarevaluehub.org/contact/stay-connected/
Breakout Session: What to do about Health Care Costs-Efforts to Increase
Value and Affordability
Karynlee Harrington|Executive DirectorMaine Health Data Organization|Maine Quality Forum| October, 2019
• MHDO-Established in 1995 to create and maintain a useful, objective, reliable and comprehensive health information data warehouse that is used to improve the health of Maine citizens, and to promote the transparency of the cost and quality of healthcare, including prescription drugs, in collaboration with the Maine Quality Forum.
• MHDO is mandated to make data publically available and accessible to the broadest extent consistent with the laws protecting individual privacy, and proprietary information.
• Acceptable uses of MHDO Data defined in Rule include, but are not limited to, study of health care costs, utilization, and outcomes; benchmarking; quality analysis; longitudinal research; other research; and administrative or planning purposes.
• MQF-Established in 2003 to monitor and improve the quality of healthcare in the State of Maine. MQF’s key initiatives focus on the following: support the advancement of primary care; define, collect and report healthcare quality measures; promote public transparency of health care quality and reduce the rate of health care associated infections in the State of Maine.
Maine Health Data Organization (MHDO)Governing Statue: Title 22 Chapter 1683Maine Quality Forum (MQF)Governing Statue: Title 24-A Chapter 87
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MHDO Data Sets
Over 1 Billion Health Care Records and Growing….
All Payer Claims Data (APCD)-medical, pharmacy and dental claims (includes commercial, voluntary self-funded ERISA & public payers)
Maine Hospital Inpatient and Outpatient Encounter Data
Hospital Physician Practice Data (primary and specialty care)
Maine Hospital Quality Data
Maine Hospital Financial & Restructuring Data
NEW Rx Data coming in 2020 from prescription drug manufacturers, wholesale drug distributors and pharmacy benefit managers
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National Perspective-
Value of Data
• All-payer claims database (APCD) initiatives are increasingly becoming an important component of state health care reform activities, serving as sources of information for transparency and value purchasing. States with APCDs are well positioned to respond to health care reform challenges and to be active participants in comparative effectiveness research.” – The Commonwealth Fund
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The Institute of Medicine (IOM) defines healthcare transparency as:
“making available to the public, in a reliable, and understandable manner, information on the health care system’s quality, efficiency and consumer
experience with care, which includes price and quality data, so as to influence the behavior of patients, providers, payers, and others to achieve better outcomes (quality and cost of care).”
Definition of Healthcare Transparency
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What the Research has
found
Research has found that transparency can help:patients and their families make informed choices
when selecting a health plan, hospital, clinical practice, or choosing among alternative treatments,
increased healthcare transparency can allow for increased trust in the patient-physician relationship and health care systems.
Transparency can also improve quality, safety and efficiency throughout the healthcare system due to competition and/or the availability of clinical benchmarks.
There are questions about:how well and how often patients make use of such
information and how best to present such information to the public.
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CompareMaine was developed by MHDO & MQF in partnership with Human Services Research Institute; NORC, Wowza, the MHDO’s Consumer Advisory Committee and other interested parties. CompareMaine was launched in the fall of 2015.
Allows for the comparison of average costs (defined as median total payments) for over 200 procedures by health care facility by the top 5 health plans and a statewide average for all commercial payers and self-funded ERISA plans that submit data to MHDO. Over 22,000 cost estimates on the site.
Integrates seven quality measures: Patient Experience, Preventing Serious Complications, Preventing Healthcare Associated Infections (2 measures), Preventing Falls with Injury, Preventing Pressure Ulcers and Unplanned Hospital-Wide Readmissions.
Cost data on the site is updated 2/year.
External review process allows for those payers and facilities reported on the opportunity to review the cost data and comment before data is publicly released.
Maine’s Healthcare Cost and Quality Transparency WebsiteCompareMaineMore Information Better Decisions
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The categories of procedures include: office visits, PT & OT, mental & behavioral health, OB/GYN, radiology & imaging, lab services, inpatient/outpatient surgical procedures, Chiropractic services and infusion therapy. Over 150 facilities on site include hospitals, surgical
centers, diagnostic imaging centers, labs & clinics.Costs represent the median payments (carrier and
member) and breakdowns the total into professional and facility payments when applicable. In most cases, CompareMaine reports the costs for a
single procedure; however, some diagnostic procedures may involve a main procedure and several related services.We use a Grouper tool that is clinically based logic,
which creates groupings of claims for ten surgical procedures reported on CompareMaine.
CompareMaineMore Information Better Decisions
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• Commercial Data in APCD for the time period • July 1, 2017 through June 30, 2018CompareMaine &
Variation in Payments for Top Ten Most Commonly Searched Procedures
Payment data are from current release of CompareMaine-V7 representing average payments for the time period July 1, 2017 - June 30, 2018. Data Source: MHDO APCD
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CPT Code
Procedure Name Min Average Payment
Max Average Payment
% Diff. in Payment
Maine State Average
45380 Colonoscopy with biopsy for noncancerous growth
$1,334 $5,188 289% $2,866
59400 Vaginal delivery $6,405 $15,592 143% $12,418 27447 Knee replacement $27,118 $53,962 99% $37,373
45378Colonoscopy without biopsy for encounter for preventive health services
$1,132 $3,626 220% $1,668
27130 Hip replacement $27,830 $46,754 68% $37,353 47562 Gallbladder removal $10,410 $23,048 121% $14,030
59510 C-section (Cesarean delivery) $13,718 $28,775 110% $21,001
70551 MRI scan of brain $381 $2,153 465% $987 73721 MRI scan of leg joint $303 $2,590 755% $906
72148 MRI scan of lower spinal canal $290 $2,826 874% $1,021
CompareMaine Cost Trends Over Time
Interactive dashboard that shows how average total costs reported on CompareMaine have changed over time.https://www.comparemaine.org/?page=trends
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National Perspective
• The Price Transparency & Physician Quality Report Card 2017 by Altarum and Catalyst was released in November 2018. The report provides information on how readily consumers can find health care price and quality information in every state across the country. Maine is one of two states that earned an A in price transparency. The report states,
• "Maine also continues to set a high standard by collecting data in an APCD that includes a full scope of providers and paid amounts. The state’s price transparency website-CompareMaine has clear and easy to understand information on health care
costs, and also allows consumers to select facilities for comparison purposes, earning Maine an A again this year."
Consumer Reports released a report in November 2016 titled Save Money and Get the Best Care from Your Health Plan-New Ratings Help Consumers Navigate Tools, Compare Cost and Quality of Doctors, Hospitals, and Services, where they ranked MHDO’s website CompareMaine #2 in the country for stand-alone health care transparency websites. The websites were ranked in the following categories: Ease of use; functionality; content and scope and Reliability.
43 States fail to make health care price and quality information available.
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Commercial Insurance • 2009: 23%• 2010: 23%• 2011: 24%• 2012: 24%• 2013: 27%• 2014: 28%• 2015: 29%• 2016: 39%• 2017: 36%• 2018: 36%
New Requirements to Promote the Transparency of Prescription Drug Costs
Pharmacy Paid Amount as a % of Medical Paid, 2009-2018 (as reported in APCD)Source: https://mhdo.maine.gov/tableau/data.cshtml
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• By December 1, 2018 and annually thereafter, the MHDO must provide a report containing the following information about prescription drugs, both brand name and generic:
The 25 most frequently prescribed drugs in the State; The 25 costliest drugs as determined by the total
amount spent on those drugs in the State; and The 25 drugs with the highest year-over-year cost
increases as determined by the total amount spent.
The MHDO produces these reports with the pharmacy data it collects from payers and is included in its all payer claims database (APCD).
MHDO will use the findings in these reports as well as the new information from the manufacturers to identify the data which the Pharmacy Benefit Manger’s (PBM’s) and/or Wholesale Distributors must report to the MHDO.
LD 1406, An Act To Promote Prescription Drug Price TransparencyNew Law in 2018Annual Requirements
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Top 25 Costliest Drugs in the State of Maine (July 2017-June 2018)
Screenshot of tableau report posted on MHDO website: https://mhdo.maine.gov
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Top 25 Most Frequently Prescribed Drugs in the State of Maine (July 2017-June 2018)
Screenshot of tableau report posted on MHDO website: https://mhdo.maine.gov
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Top 25 Drugs with the Highest Year-Over Year Increases in the State (July 2017-June 2018)
Screenshot of tableau report posted on MHDO website: https://mhdo.maine.gov
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MHDO must develop a data submission rule prior to April 1, 2020 to collect pricing information from:
Manufacturers Pharmacy Benefit ManagersWholesale Distributors
MHDO must produce an annual report beginning November 1, 2020; and submit to the Legislature and post on MHDO’s website.
Report must include: information on trends in the cost of prescription drugs, analysis of manufacturer prices and price increases, the major components of prescription drug pricing along the supply chain, andthe impacts on insurance premiums and cost sharing, and any other information the MHDO determines is relevant to providing greater consumer awareness of the factors contributing to the cost of prescription drugs in the State of Maine.
LD 1162, An Act To Further Expand Drug Price TransparencyNew Law in 2019Requirements
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• Profitability Ratios: Provides information on the ability of the organization to produce a profit. Six measures of profitability are included: Operating Margin, Non-operating Revenue Margin, Total Margin, Return on Equity, Net Operating Income (Operating Surplus or Loss), and Total Surplus/Deficit (Total Surplus or Loss)
• Liquidity Ratios: Measures an organization’s ability to meet short-term obligations, collect receivables, and maintain cash position. Five measures of liquidity are included: Current Ratio (Without Board Designated and Undesignated Investments), Days in Accounts Receivable, Days Cash on Hand (Current), Days Cash on Hand (Including Board Designated and Undesignated Investments), and Average Payment Period (Current Liabilities)
• Capital Structure Ratios: Measures how an organization’s assets are financed, and its capacity to pay for new debt. Four capital structure ratios are included: Equity Financing, Debt Service Coverage, Cash Flow to Total Debt, and Fixed Asset Financing
• Asset Efficiency Ratios: Measures the relationship between revenue and assets. Two asset efficiency ratios are included: Total Asset Turnover and Fixed Asset Turnover
• Other Ratio/Data Elements: Average Age of Plant (Depreciation Only), Net Plant, Property, & Equipment, Cash & Investments (Current Assets), Current Assets Whose Use is Limited, Trustee-held Investments, Board-Designated & Undesignated Investments, Fund Balance-Unrestricted, Temporarily Restricted Net Assets, Permanently Restricted Net Assets, Total Gross Patient Service Revenue, Net Patient Service Revenue, Total Non-operating Revenue, Bad Debt (Provision for Bad Debt), Free Care (Charity Care), Total Operating Expenses, Total Advertising Expenses, & Salaries and Benefits
Other MHDO ReportsHospital Financial Reports
Annual Summaries of hospital financial data over a five year span, as reported by Maine's non-governmental hospitals. Profitability, Liquidity, Capital Structure, Asset Efficiency and other common ratios are provided in these reports.
https://mhdo.maine.gov/hospital financials.htm
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