PNHP

Troubled Kids’ Psychiatric Care Often Delayed by Insurance Rules

Troubled Kids’ Psychiatric Care Often Delayed by Insurance Rules

Dealing with red tape consumes clinicians’ time, poses danger to patients, researchers say

Medline Plus, March 25, 2016

(HealthDay News) — Children with severe psychiatric problems often have lengthy waits before they’re transferred from a hospital emergency department to a psychiatric hospital due to insurance companies’ “prior authorization” requirements, a small study suggests.

Mental health workers at one Rhode Island hospital spent an average of an hour on the telephone seeking insurance companies’ approval, the study authors reported. In one case, the researchers said approval took up to 4.5 hours.

“The majority of these kids are suicidal; a minority of them are homicidal. That’s as dangerous as having a burst appendix,” said study senior author Dr. J. Wesley Boyd, a psychiatrist at Cambridge Health Alliance in Cambridge, Mass.

All of the admissions were ultimately approved. This suggests that prior authorization appears to serve “more as an administrative hurdle,” the study authors wrote.

“This is rationing care by hassle factor,” said study lead author Dr. Amy Funkenstein, an assistant professor of medicine at Tufts University in Boston.

The study was scheduled to be published in a letter March 30 in the American Journal of Emergency Medicine.

Rhode Island allows prior authorization for any inpatient admission but prohibits its use for any type of emergency service, said Linda Johnson. She’s the operations director for the Office of the Health Insurance Commissioner in Cranston, R.I.

Currently, state regulators are combing hundreds of insurance company records to assess compliance with the state’s mental health parity law, she said. The question is whether a patient needing psychiatric hospitalization meets the definition of emergency, she explained.

Prior authorization assures that a patient is covered under a health plan, the requested service is a covered benefit and the most appropriate level of care is provided, explained Pamela Greenberg, president and CEO of the Association for Behavioral Health and Wellness in Washington, D.C.

Patients may be better served in partial hospitalization or intensive outpatient programs, for example, said Greenberg, whose association members are mostly large insurance companies.

“You have to look at costs, too; let’s be honest,” she added.

Dr. Joseph Mawhinney, a San Diego-based child and adolescent psychiatrist, called the prior authorization process “a bureaucratic maze” wrought with wrong phone numbers, dropped calls and people at the other end of the line not having authority to make a decision, requiring a referral to someone else.

“It can go on and on and on. Meanwhile, you don’t have a decision or a placement,” said Mawhinney. He’s also a member of the American Psychiatric Association’s (APA) Council on Healthcare Systems and Financing, and chairs the APA’s Access to Care Workgroup.

Between May and October 2014, psychiatric clinicians at Hasbro Children’s Hospital in Rhode Island kept track of the time spent on the phone with insurance companies on behalf of kids in need of psychiatric admission.

Researchers collected paperwork on 203 patients aged 4 to 19. In more than half of the cases, hospital psychiatrists recommended admission due to suicidal thoughts or a suicide attempt. Other common reasons for admission included aggression (22 percent) and homicidal thoughts (10 percent), the study reported.

From initial contact with the insurer to authorization, phone times ranged from 3 minutes to 270 minutes, and the average amount of time spent on the phone was 60 minutes, the study found.

Based on total psychiatric admissions nationwide, that translates into more than 1.5 million hours of “wasted clinician time,” the researchers said in a Cambridge Health Alliance news release. Those hours translate into a staggering amount of wasted health care dollars — about $31 billion a year, the researchers estimated.

The average time cited in the study is actually shorter than the median 79-minute “boarding time” from emergency department to hospital bed, said Clare Krusing. She’s a spokeswoman for America’s Health Insurance Plans, in Washington, D.C.

While not addressed directly in the study, the authors questioned whether prior authorization for psychiatric admissions violates federal mental health parity legislation. Under federal rules, managed care protocols, such as prior authorization, must be applied equally to mental health and medical/surgical care.

“They [health insurers] use the same process for medical necessity review across all services,” Krusing said.

She also noted that the study “completely ignores any details about what information the clinician provided to the insurance company as they were reviewing the request.”

Boyd believes health insurers continue to unfairly single out psychiatric cases for prior authorization.

“Somehow or other, the insurance companies continue to flout the intent behind parity, and I’m not quite sure how they continue to get away with it,” he said.

***

“Prior authorization for child and adolescent psychiatric patients deemed to be in need of inpatient admission,” Amy Funkenstein, MD, Stephanie Hartselle, MD, J. Wesley Boyd, MD, PhD. The American Journal of Emergency Medicine, May 2016, Vol. 34, Issue 5, pp. 915–916. DOI: http://dx.doi.org/10.1016/j.ajem.2016.02.027

***

SOURCES: J. Wesley Boyd, M.D., Ph.D., psychiatrist, Cambridge Health Alliance, Cambridge, Mass., and professor of psychiatry, Harvard Medical School, Boston; Amy Funkenstein, M.D., assistant professor of medicine, Tufts University, Boston; Linda Johnson, operations director, Office of the Health Insurance Commissioner, Cranston, R.I.; Pamela Greenberg, president and CEO, Association for Behavioral Health and Wellness, Washington, D.C.; Joseph Mawhinney, M.D., child and adolescent psychiatrist, San Diego, member, Council on Healthcare Systems and Financing, and chair, Access to Care Workgroup, American Psychiatric Association, Arlington, Va.; Clare Krusing, spokeswoman, America’s Health Insurance Plans, Washington, D.C.; March 3, 2016, news release, Cambridge Health Alliance; March 30, 2016, American Journal of Emergency Medicine.

https://www.nlm.nih.gov/medlineplus/news/fullstory_157978.html

Support Medicare for All plan

By William Reed, M.D.
Lake Geneva (Wis.) Regional News, Letters, May 26, 2016

I am writing in response to the letter of Joanne Williams on May 5, and the difficult health care situation in the United States.

Indeed, prices for pharmaceuticals, medical equipment and hospital care are much higher than in other wealthy industrialized countries. Yet in the U.S. we have the Veterans Administration system that buys all medicines at a 40 percent discount. Why is that?

The reality is that in our country private, investor-owned insurance plans have proven over 25 years that they have no power to control costs or prices. Yet, they are one of the most profitable sectors of the economy. Other counters spend one-half to one-third less on total national health care, cover all citizens and have better outcomes that we do.

They do this by having a single national health program that directs the spending of public money. For-profit financing by insurance companies add only expenses. Yet, these countries maintain the private, competing provision of health care by doctors and hospitals.

Paul Ryan has an idea of ending traditional Medicare with an unproven “voucher” system and having patients put “more skin in the game” and supporting commercial Medicare HMOs, the Advantage Plans. These are all failed ideas that have been tried.

Medicare works. It has a 3 percent administrative cost, and can be improved to eliminate deductibles and copayments. I believe that our political representatives are obligated to answer: why would Enhanced Medicare for All, as in House Bill HR 676, not work for the U.S.?

Dr. William Reed resides in Walworth.

http://www.lakegenevanews.net/

An important step for Oregon health care reform

By Samuel Metz, M.D.
The Oregonian, May 30, 2016

This month, the Oregon Health Authority made a wise decision: It approved the RAND Corporation to perform its legislatively mandated study of financing high-value health care in our state.

This is no small effort. Health care in Oregon consumes about $38 billion annually (the completed study will provide a better figure) — 18 percent of all spending in the state. This is twice what Europeans and other English-speaking countries spend on health care. Yet most measures of public health place Oregon at the bottom of the industrialized world. The rest of our country looks no better.

The RAND Corporation’s first challenge is to analyze four methods of financing universal care in Oregon, in which each option must provide all Oregonians with care when they need it. Then comes the hard part: It must select the best option for our Legislature.

Why study universal care? To remedy our low-value health care spending, the Oregon Legislature recognized that every other industrialized nation provides universal care. And all these nations provide better care to more people for less money. That’s “high-value.”

Oregon’s study focuses specifically on one aspect of high-value care: how to best collect the money (e.g., premiums, single payer, state-purchased private insurance). The study leaves for another time the question of how to best pay providers (e.g., fee for service, capitated funds, managed care).

This focus is appropriate. Oregon should not speculate on how to spend health care funds until it finds a sustainable way to collect money in the first place. Hence, the RAND Corporation’s study will start Oregon’s health care reform discussion, but not end it.

Why was this organization a good choice? The RAND Corporation is one of America’s oldest policy-analysis think tanks, created in 1948 in the heat of the Cold War. One of its first researchers was Herman Kahn, author of “On Thermonuclear War.” (Kahn was reputedly a model for Dr. Strangelove in the movie of that name.)

But the RAND Corporation expanded from national defense into health care with a dramatic series of experiments in the 1970s examining the relationship between insurance deductibles and outcomes. These publications remain a mainstay of insurance analysis to this day.

The Oregon Health Authority picked a credible, competent and experienced organization to investigate health care financing in Oregon.

One challenge, however: Organizations performing similar studies for other states estimated our study needs 12 to 18 months for completion. Had the OHA made its selection immediately after the bill was signed in August 2015, the chosen organization may have completed its work by the November 2016 deadline. Now, 10 months later, the RAND Corporation has only five months.

But the RAND Corporation knows its business. Regardless of when it presents its results, our legislators will finally possess the information they need to make intelligent decisions about the future of health care in Oregon.

The OHA did its job: It selected the right organization. The RAND Corporation will now do its job: perform a competent analysis. Ultimately, we Oregonians must then do our job: ensure our legislators read and act on the results.

This study is the next critical step toward achieving better care to more people for less in Oregon.

Samuel Metz, of Southwest Portland, is an anesthesiologist.

http://www.oregonlive.com/opinion/index.ssf/2016/05/an_improtant_step_for_oregon_h.html

How to fix health care costs

By Cris M. Currie, R.N.
The Spokesman-Review (Spokane, Wash.), May 28, 2016

I am a registered nurse. Virtually everyone I talk to about American health care has a horror story about paying their medical bills. Yet why is it that most of these same people are resigned to the idea that quality care requires insurance companies who supposedly are looking out for our best interests?

Why are we so accepting of underinsurance with the ever-increasing high deductibles, copays, coinsurance and premiums, of the ever-present worry of physical and financial catastrophe, of limited provider networks, of having to fill out the same paperwork over and over again, of having to seek and wait for pre-authorization, of having to appeal denied claims, of incomprehensible insurance jargon, of having to renew coverage annually, and of multimillion-dollar executive management salaries?

No other country in the developed world has to deal with this kind of deception and abuse and neither should we. While the Affordable Care Act has made a few improvements, cost control was definitely not one of them, and it prompted a merger mania that now has health care conglomerates approaching monopoly status. Managed corporate care has been a colossal failure despite numerous reform efforts. Fortunately there is an alternative.

That alternative is explained in detail in the June 2016 issue of the American Journal of Public Health (available online at www.pnhp.org/nhi). This call for single-payer health reform was prepared by a working group of 39 physicians and endorsed by more than 2,200 physicians from across the country, with more endorsements arriving every day. It is an updated version of a similar physicians’ proposal written in 2003 from which Bernie Sanders has based his health care reform plan.

The key feature is the removal of all financial barriers to medical care primarily by eliminating the nearly 1,300 health insurance companies with their $500 billion in administrative overhead. Instead, the much more successful Medicare program would be expanded to cover everyone as was originally intended (instead of just those over age 65), and its weaknesses would be corrected.

Private insurers’ overhead currently averages 12 percent, compared with only 2.1 percent for fee-for-service Medicare. Numerous studies conducted since 1991 have shown that Americans are already paying way more than is necessary for a universal single-payer system without getting it.

According to more than 40 studies by the Government Accountability Office, the Congressional Budget Office and several prestigious actuarial firms, think tanks and economists, the administrative savings possible with a single-payer system are enough to cover all of the 27 million uninsured people and to upgrade coverage and eliminate all out-of-pocket costs for the underinsured without any increase in total health spending and without restricting the patient’s choice of providers.

The program would be federally financed and administered by federal, state and regional boards, which would determine global budgets for hospitals, set equitable reimbursement rates for providers, negotiate drug prices and improve health planning.

Additionally, modest new progressive taxes would be needed, but these would also reduce income inequality, another cause of poor health. While a payroll tax might be appropriate in the short term, ultimately employers would be freed from the burdens of providing health insurance for their employees. This would greatly facilitate entrepreneurship and increase the global competitiveness of American business.

Importantly, however, any new taxes would be fully offset by the elimination of premiums and other out-of-pocket costs such that the vast majority of Americans would have a substantial increase in their disposable income while being free from the worry of a financial catastrophe related to an unexpected health crisis.

All unrealistic pie-in-the-sky, you say? It’s not, when you talk to the people from other countries who have enjoyed this type of system for decades. Admittedly these other countries did not have an entrenched private insurance system to deconstruct; nor did they face a fanatical capitalism with its oversold faith in free market competition that claims health care as a commodity instead of a right; nor did they have to deal with segregationists who steadfastly refused to provide universal care that would include “Negroes.”

However, the Expanded and Improved Medicare for All Act (HR 676) was recently reintroduced in Congress and now has 62 co-sponsors. Fourteen states, including Colorado (with Amendment 69 on the ballot for this fall) and Washington (HB 1025, 1321 and SB 5132) have pending legislation to develop statewide single-payer health care systems.

And thanks to the Physicians’ Working Group and to Bernie Sanders, the tide is finally starting to turn toward pairing health care with justice.

Cris M. Currie, of Mead, is a registered nurse and member of Health Care for All – Washington.

http://www.spokesman.com/stories/2016/may/28/guest-opinion-how-to-fix-health-care-costs/

Bernie Sanders easily wins the policy debate

By Jeffrey D. Sachs
The Washington Post, May 25, 2016

Mainstream U.S. economists have criticized Democratic presidential candidate Bernie Sanders’s proposals as unworkable, but these economists betray the status quo bias of their economic models and professional experience. It’s been decades since the United States had a progressive economic strategy, and mainstream economists have forgotten what one can deliver. In fact, Sanders’s recipes are supported by overwhelming evidence — notably from countries that already follow the policies he advocates. On health care, growth and income inequality, Sanders wins the policy debate hands down.

On health care, Sanders’s proposal for a single-payer system has been roundly attacked as too expensive. His campaign (for which I briefly served as a foreign policy adviser) is told that his plan will raise taxes and burst the budget. But this attack misses the whole point of his health proposals. While health spending by the government would go up in the Sanders health plan, private insurance payments would disappear, generating huge net savings for the American people.

Countries such as Canada, Germany, Sweden and Britain all follow something like a single-payer approach and pay much less for health care than the United States does. While the United States spent 16.4 percent of gross domestic product on health care in 2013, Canada paid only 10.2 percent; Germany, 11 percent; Sweden, 11 percent; and Britain, 8.5 percent. U.S. overspending is about 5 percent of GDP, or nearly $1 trillion as of 2016, mainly because of the excessive market power of private health insurers and big drug companies. An authoritative study by the U.S. Institute of Medicine confirms this extent of excess costs, finding losses of about 5 percent of GDP in 2009. Critics of Sanders’s health plan have failed to recognize or acknowledge the huge savings and cost reductions that would accompany a single-payer system.

On economic growth, Sanders also easily wins the debate. While President Obama opted for a short-term stimulus that peaked after two years and disappeared by the end of his first term, and Hillary Clinton has proposed a modest infrastructure program over five years, Sanders calls for a much bolder public investment program directed at the skills of young people (through free college tuition) and at modernizing and upgrading America’s infrastructure, with a focus on renewable energy, high-speed rail, safe drinking water and urban public transport. Sanders’s growth strategy would get back to fundamentals: a long-overdue increase in productive investments to underpin good jobs and rising worker productivity.

Sanders’s mainstream critics are mostly Keynesians. Their focus is on total spending, whether it’s consumption or investment. Sanders, instead, focuses on investment because long-term growth depends on more rapid capital accumulation (including in skills and technology). America’s slow growth is no mystery. The U.S. net investment rate has declined to about 5 percent of GDP, down from about 10 percent of GDP during the 1960s and 1970s. Sanders’s plan would restore a high-investment economy and, with it, a higher growth rate.

On income distribution, Sanders accurately argues that U.S. income inequality is uniquely high among the rich countries. Only the United States has deep poverty alongside soaring wealth. Only the United States tolerates a hedge-fund industry in which poorly performing money managers (not to mention quite a few crooks) take home billions of dollars in pay, backed by unconscionable tax breaks pushed by Democratic and Republican senators who live off of the largesse of Wall Street.

Consider the most basic measure of income inequality, the Gini coefficient. This measures the inequality of income among households, with zero signifying complete equality and 1 complete inequality. For high-income countries, a Gini coefficient below 0.3 reflects a low degree of income inequality; between 0.3 and 0.4, a moderate degree; and at 0.4 or above, a high degree. According to the most recent data from the Organization for Economic Cooperation and Development, the U.S. Gini coefficient stood at 0.40, with Canada at 0.32; Germany, 0.29; Sweden, 0.27; and Britain, 0.35.

What accounts for this striking difference? Most important, U.S. inequality has soared in the past 35 years, since the start of the Reagan era. The U.S. Gini coefficient stood at 0.31 in 1980. All countries have faced market pressures pushing toward more inequality — especially increased trade with low-wage countries such as China and automation that has claimed the jobs and wages of workers with only high school educations. Yet only in the United States have these pressures turned into massive inequality of income.

The reasons are clear. The United States unleashed the power of CEOs to enrich themselves with mega-salaries, weakened trade unions and gave massive tax breaks to the super-rich. Sanders’s policies would go after all of these unconscionable moves, bringing the United States back into line with the rest of the high-income world. He would, in short, end the age of impunity in which the rich and the powerful get their way, while the rest suffer. Sanders’s policies include higher taxes on the rich, strengthening unions, raising the minimum wage, supporting families, providing free tuition at public universities and cracking down on financial crimes.

There is nothing magical or utopian about Sanders’s recommendations. He is advocating policies of decency long ago adopted by other prosperous high-income countries. Our own neighbor, Canada, is a case in point. Canada has lower-cost health care, a life expectancy two years higher than in the United States, much lower college tuition, far lower poverty rates and, not surprisingly, more happiness (ranking sixth in the world in life satisfaction, behind Scandinavia and well ahead of the United States, which is 12th).

Mainstream economists long ago lost the melody line. Their models are oriented to the status quo and underemphasize the benefits of public investment. They take America’s bloated health-care costs as a given, not as the result of the influence of the U.S. private health lobby. They treat low growth as natural (“secular stagnation”) rather than as the result of chronic underinvestment. They have come to accept cruelly rising income inequality and rampant impunity for financial crimes. Sanders knows better, based on worldwide experience, an abiding sense of decency and a strong and accurate vision for a brighter economic future.

Jeffrey D. Sachs is director of the Earth Institute and a professor at Columbia University.

https://www.washingtonpost.com/opinions/jeffrey-sachs-bernie-sanders-easily-wins-the-policy-debate/2016/05/25/224209a0-21ac-11e6-8690-f14ca9de2972_story.html?hpid=hp_no-name_opinion-card-b%3Ahomepage%2Fstory

PNHP note: Physicians for a National Health Program (PNHP) is a nonpartisan educational and research organization. It neither supports nor opposes any candidate for public office.

ICER: Does it work, and is it worth it?

Institute for Clinical and Economic Review (ICER)

About

ICER is a trusted non-profit organization that evaluates evidence on the value of medical tests, treatments and delivery system innovations and moves that evidence into action to improve the health care system.  To accomplish this goal ICER performs analyses on effectiveness and costs; develops reports using innovative methods that make it easier to translate evidence into decisions; and, most distinctively, fills a critical gap by creating sustainable initiatives with all health care stakeholders that can align efforts to use evidence to drive improvements in both practice and policy.  Through all its work, ICER seeks to play a pivotal role in creating a future in which collaborative efforts to move evidence into action provide a foundation for a more effective, efficient, and just health care system.

http://icer-review.org

An example: Treatment Options for Relapsed or Refractory Multiple Myeloma:

http://icer-review.org/wp-content/uploads/2016/05/MWCEPAC_MM_Agenda_052016.pdf

Evidence report: Multiple Myeloma:

http://icer-review.org/wp-content/uploads/2016/05/MWCEPAC_MM_Evidence_Report_050516-1.pdf

***

Health insurers find back door to limit choice

By Jeff Stier
USA Today, May 26, 2016

Lost in the noise of political posturing over health care, there’s one widely accepted principle: the importance of the doctor-patient relationship in medical decision-making.

Yet we’ve all heard stories where insurance companies won’t fully cover a drug that both the doctor and patient believe is the right medical choice. Why not? It’s pretty simple: the insurance companies don’t want to pay.

As cutting edge drugs come to market, insurance companies are scrambling to find ways to justify not paying for them.

Insurers will tell you (if you can get them on the phone) the drug isn’t covered because it’s not on their formulary, their own list of preferred medicines. Kids have a term for this: “Sorrynotsorry.” Don’t let the circular reasoning fool you.

Almost as bad, doctors often have to get pre-authorization before prescribing something that is on the formulary. (Because we all need more paperwork.)

The flawed justification was normalized by President Obama in 2009, when he oversimplified pharmacoeconomics, saying, “If there’s a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that’s going to make you well?”

Insurance companies are using this concept to cut costs by excluding the red pills. To do so,  they’ve cooked up a clever way to justify exclusions from formularies by founding and funding a group called the Institute for Clinical and Economic Review, or ICER.

ICER does a version of something called “comparative effectiveness” to determine whether, across the population, the drugs are worth the cost compared to other treatments. It releases the findings around the same time drugs come to market, just in time for insurance companies, who, not coincidentally, serve on ICER’s governing board, to justify excluding FDA approved drugs from the formulary based, in part, on ICER’s “independent” math.

ICER’s approach appears to be modeled on the United Kingdom’s National Institute for Health and Clinical Excellence (NICE) model, which tries to judge the cost-effectiveness of therapies, in order to help determine which health services the government should provide. ICER and NICE share more than just three letters; ICER’s president, Steven Pearson, was awarded an Atlantic Fellowship by the British Government and acted as Senior Fellow at NICE.

If insurers get to play the role the British government does, determining which pills are cost-effective, we’ll have taken a huge step not only toward rationing, but toward stifling innovation.

http://www.usatoday.com/story/opinion/2016/05/26/health-insurance-coverage-prescriptions-drugs-icer-comparative-effectiveness-column/83868108/

***

The Center for Medicine in the Public Interest Says ICER’s Proposed Value Assessment for New Cancer Medications Would Cost Thousands of Lives and Stifle Innovation

Business Wire, May 25, 2016

The Center for Medicine in the Public Interest (CMPI) – a not-for-profit organization that advocates for consumer access to medical innovation – today challenged so-called value frameworks being proposed by the Boston-based Institute for Clinical and Economic Research (ICER). A white paper authored by Robert Goldberg, Ph.D, vice president and co-founder of CMPI, concludes that under ICER’s plan, 44,000 fewer patients with the cancer multiple myeloma will be alive within the next five years than if access to new medicines continues to grow at historical levels. At the same time, the CMPI report projects a serious drain on the U.S. economy from this loss of life, costing more than $12 billion in health expenditures and lost productivity.

The CMPI report, Not at Any Price: How ICER Robs Myeloma Patients of their Hope, challenges ICER’s assessment of the value of recently approved therapies for multiple myeloma, a rare cancer of cells in the bone marrow. ICER has also announced plans to conduct similar assessments of new treatments for lung cancer, multiple sclerosis and other serious diseases in the coming months.

Based on a thorough review of ICER’s assessment and its calculations, the CMPI report questions ICER’s evaluation on a number of grounds. One major concern is that ICER applies a measure called the QALY, quality adjusted life year, to determine how much insurers and health systems should pay for additional years of life relatively free of disease. Therapeutics that exceed the QALY threshold are considered too expensive to be used unless prices are lowered.

“In practice, QALYs lead to rationing,” Dr. Goldberg stated. “Due to the reliance on QALYs, ICER ignores the value patients place on novel medicines that extend their lives when they are faced with certain death.”

http://www.businesswire.com/news/home/20160525005466/en/Center-Medicine-Public-Interest-ICER’s-Proposed-Assessment

***

Comment:

By Don McCanne, M.D.

ICER (Institute for Clinical and Economic Review) is a non-profit organization that analyzes effectiveness and costs of medical tests, treatments (including drugs) and delivery system innovations thereby “creating sustainable initiatives with all health care stakeholders that can align efforts to use evidence to drive improvements in both practice and policy.” These collaborative efforts “provide a foundation for a more effective, efficient, and just health care system.”

The majority of ICER’s funding is from private, non-profit foundations. Stakeholders do provide input and feedback in developing the reports, but they are not responsible for the final contents of the reports nor should they be assumed to support any part of the reports which are “solely the work of the ICER team and its affiliated researchers.” As an example of the integrity of the organization, two of the panel members are our esteemed friends, Aaron Carroll, MD and Harold Pollack, PhD (though Pollack still has concerns about single payer feasibility).

The function that ICER is attempting to fulfill is desperately needed in the United States. We spend far more on health care than other nations yet have a system that is noted, on average, for its mediocrity. We need objective evaluation of old and new technology and the comparative effectiveness of various options for medical management. We also need to better understand whether the prices we are paying are commensurate with the health care value we are receiving. We have to end the U.S. model of paying too much for inferior technology – a model that is made possible by pretending that the markets will automatically improve value though that is nearly impossible when vested interests are preventing transparency. It’s time to turn on the lights.

NICE, the National Institute for Health and Care Excellence in England and Wales, is a leader in providing guidance on efficiency and cost effectiveness. Although an excellent source of such information, it has been under continual attack in the United States by anti-government conservatives and by stakeholders who profit from the dysfunction in our system. We frequently see claims that the British National Health Service is killing people by withholding life saving drugs or procedures. In fact, NICE recommendations are resulting in better care at lower prices.

We are now seeing this attack replicated on ICER. The USA Today article excerpted above is from the National Center for Public Policy Research, a conservative think tank founded by Amy Ridenour. The Business Wire article is from The Center for Medicine in the Public Interest, an organization co-founded by Robert Goldberg from the Manhattan Institute and Peter Pitts from the Pacific Research Institute, conservative and libertarian organizations. Their expressed opinions are driven by right-wing ideology and by greedy stakeholder interests, not by the public good.

Other similar articles are appearing now, and we will see many more telling us that ICER is rationing our health care. What they will not tell us is that ICER will help us select the most beneficial care while preventing outrageous price gouging. If that is rationing, then bring it on.

ICER: Does it work, and is it worth it?

Institute for Clinical and Economic Review (ICER)

About

ICER is a trusted non-profit organization that evaluates evidence on the value of medical tests, treatments and delivery system innovations and moves that evidence into action to improve the health care system.  To accomplish this goal ICER performs analyses on effectiveness and costs; develops reports using innovative methods that make it easier to translate evidence into decisions; and, most distinctively, fills a critical gap by creating sustainable initiatives with all health care stakeholders that can align efforts to use evidence to drive improvements in both practice and policy.  Through all its work, ICER seeks to play a pivotal role in creating a future in which collaborative efforts to move evidence into action provide a foundation for a more effective, efficient, and just health care system.

http://icer-review.org

An example: Treatment Options for Relapsed or Refractory Multiple Myeloma:

http://icer-review.org/wp-content/uploads/2016/05/MWCEPAC_MM_Agenda_052016.pdf

Evidence report: Multiple Myeloma:

http://icer-review.org/wp-content/uploads/2016/05/MWCEPAC_MM_Evidence_Report_050516-1.pdf

***

Health insurers find back door to limit choice

By Jeff Stier
USA Today, May 26, 2016

Lost in the noise of political posturing over health care, there’s one widely accepted principle: the importance of the doctor-patient relationship in medical decision-making.

Yet we’ve all heard stories where insurance companies won’t fully cover a drug that both the doctor and patient believe is the right medical choice. Why not? It’s pretty simple: the insurance companies don’t want to pay.

As cutting edge drugs come to market, insurance companies are scrambling to find ways to justify not paying for them.

Insurers will tell you (if you can get them on the phone) the drug isn’t covered because it’s not on their formulary, their own list of preferred medicines. Kids have a term for this: “Sorrynotsorry.” Don’t let the circular reasoning fool you.

Almost as bad, doctors often have to get pre-authorization before prescribing something that is on the formulary. (Because we all need more paperwork.)

The flawed justification was normalized by President Obama in 2009, when he oversimplified pharmacoeconomics, saying, “If there’s a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that’s going to make you well?”

Insurance companies are using this concept to cut costs by excluding the red pills. To do so,  they’ve cooked up a clever way to justify exclusions from formularies by founding and funding a group called the Institute for Clinical and Economic Review, or ICER.

ICER does a version of something called “comparative effectiveness” to determine whether, across the population, the drugs are worth the cost compared to other treatments. It releases the findings around the same time drugs come to market, just in time for insurance companies, who, not coincidentally, serve on ICER’s governing board, to justify excluding FDA approved drugs from the formulary based, in part, on ICER’s “independent” math.

ICER’s approach appears to be modeled on the United Kingdom’s National Institute for Health and Clinical Excellence (NICE) model, which tries to judge the cost-effectiveness of therapies, in order to help determine which health services the government should provide. ICER and NICE share more than just three letters; ICER’s president, Steven Pearson, was awarded an Atlantic Fellowship by the British Government and acted as Senior Fellow at NICE.

If insurers get to play the role the British government does, determining which pills are cost-effective, we’ll have taken a huge step not only toward rationing, but toward stifling innovation.

http://www.usatoday.com/story/opinion/2016/05/26/health-insurance-coverage-prescriptions-drugs-icer-comparative-effectiveness-column/83868108/

***

The Center for Medicine in the Public Interest Says ICER’s Proposed Value Assessment for New Cancer Medications Would Cost Thousands of Lives and Stifle Innovation

Business Wire, May 25, 2016

The Center for Medicine in the Public Interest (CMPI) – a not-for-profit organization that advocates for consumer access to medical innovation – today challenged so-called value frameworks being proposed by the Boston-based Institute for Clinical and Economic Research (ICER). A white paper authored by Robert Goldberg, Ph.D, vice president and co-founder of CMPI, concludes that under ICER’s plan, 44,000 fewer patients with the cancer multiple myeloma will be alive within the next five years than if access to new medicines continues to grow at historical levels. At the same time, the CMPI report projects a serious drain on the U.S. economy from this loss of life, costing more than $12 billion in health expenditures and lost productivity.

The CMPI report, Not at Any Price: How ICER Robs Myeloma Patients of their Hope, challenges ICER’s assessment of the value of recently approved therapies for multiple myeloma, a rare cancer of cells in the bone marrow. ICER has also announced plans to conduct similar assessments of new treatments for lung cancer, multiple sclerosis and other serious diseases in the coming months.

Based on a thorough review of ICER’s assessment and its calculations, the CMPI report questions ICER’s evaluation on a number of grounds. One major concern is that ICER applies a measure called the QALY, quality adjusted life year, to determine how much insurers and health systems should pay for additional years of life relatively free of disease. Therapeutics that exceed the QALY threshold are considered too expensive to be used unless prices are lowered.

“In practice, QALYs lead to rationing,” Dr. Goldberg stated. “Due to the reliance on QALYs, ICER ignores the value patients place on novel medicines that extend their lives when they are faced with certain death.”

http://www.businesswire.com/news/home/20160525005466/en/Center-Medicine-Public-Interest-ICER’s-Proposed-Assessment

ICER (Institute for Clinical and Economic Review) is a non-profit organization that analyzes effectiveness and costs of medical tests, treatments (including drugs) and delivery system innovations thereby “creating sustainable initiatives with all health care stakeholders that can align efforts to use evidence to drive improvements in both practice and policy.” These collaborative efforts “provide a foundation for a more effective, efficient, and just health care system.”

The majority of ICER’s funding is from private, non-profit foundations. Stakeholders do provide input and feedback in developing the reports, but they are not responsible for the final contents of the reports nor should they be assumed to support any part of the reports which are “solely the work of the ICER team and its affiliated researchers.” As an example of the integrity of the organization, two of the panel members are our esteemed friends, Aaron Carroll, MD and Harold Pollack, PhD (though Pollack still has concerns about single payer feasibility).

The function that ICER is attempting to fulfill is desperately needed in the United States. We spend far more on health care than other nations yet have a system that is noted, on average, for its mediocrity. We need objective evaluation of old and new technology and the comparative effectiveness of various options for medical management. We also need to better understand whether the prices we are paying are commensurate with the health care value we are receiving. We have to end the U.S. model of paying too much for inferior technology – a model that is made possible by pretending that the markets will automatically improve value though that is nearly impossible when vested interests are preventing transparency. It’s time to turn on the lights.

NICE, the National Institute for Health and Care Excellence in England and Wales, is a leader in providing guidance on efficiency and cost effectiveness. Although an excellent source of such information, it has been under continual attack in the United States by anti-government conservatives and by stakeholders who profit from the dysfunction in our system. We frequently see claims that the British National Health Service is killing people by withholding life saving drugs or procedures. In fact, NICE recommendations are resulting in better care at lower prices.

We are now seeing this attack replicated on ICER. The USA Today article excerpted above is from the National Center for Public Policy Research, a conservative think tank founded by Amy Ridenour. The Business Wire article is from The Center for Medicine in the Public Interest, an organization co-founded by Robert Goldberg from the Manhattan Institute and Peter Pitts from the Pacific Research Institute, conservative and libertarian organizations. Their expressed opinions are driven by right-wing ideology and by greedy stakeholder interests, not by the public good.

Other similar articles are appearing now, and we will see many more telling us that ICER is rationing our health care. What they will not tell us is that ICER will help us select the most beneficial care while preventing outrageous price gouging. If that is rationing, then bring it on.

Trump on Immigrants and Health Care Costs: Just Plain Wrong

By Leah Zallman and Steffie Woolhandler
The Huffington Post, May 26, 2016

Throughout the primary season, leading Republican presidential candidates vied over who could bash immigrants the hardest. And they were promising more than border walls. Donald Trump is the most extreme immigrant-blamer; according to his website, “Providing healthcare to illegal immigrants costs us some $11 billion annually. If we were to simply enforce the current immigration laws and restrict the unbridled granting of visas to this country, we could relieve healthcare cost pressures on state and local governments.”

As with many of Trump’s claims, this one is wrong. But unlike some of his other falsehoods, the media has left this one unchallenged. Trump’s $11 billion figure comes from an obviously biased study that’s based on outlandish assumptions.

For instance, it counts as “immigrants” millions of U.S. citizens — children who were born in the U.S. of immigrant parents. It also assumes that immigrant families have high health care costs, ignoring a raft of data showing that immigrants use little care. For instance, nearly half (48 percent) of noncitizen immigrant children never see the doctor in the course of a year.

Finally, Trump’s source assumes that every penny of immigrant kids’ health care costs are borne by the taxpayers. Yet a recent study in the respected journal Health Affairs found that unauthorized immigrants families pay the vast majority of their own health care bills, either out-of-pocket, or by buying private insurance. Indeed, 40 percent of newly arrived immigrants have private insurance.

Trump’s numbers don’t just exaggerate taxpayers’ costs for immigrants’ care, they ignore the billions that immigrants pay in taxes. Compared to other Americans, immigrants are younger, healthier and more likely to be male and part of the workforce. That means that an outsized share of immigrants pay the payroll taxes that support Medicare and Social Security, while few are eligible to draw benefits from these programs.

Employers are required to check a Social Security card when hiring a new worker. But they don’t have to check that it’s valid. The IRS happily accepts (and passes on to Medicare and Social Security) payments made under invalid Social Security numbers.

Consequently, millions of undocumented immigrants work and pay taxes under fake or borrowed Social Security numbers. The Social Security Administration estimates that undocumented immigrants pay $13 billion annually into the Social Security trust funds. And, in studies we did at Harvard and the City University of New York, we found that undocumented immigrants contribute billions more to Medicare.

Without immigrants — and especially unauthorized immigrants — Medicare’s Trust Fund would be broke. Each year, immigrants pay about $11 billion more in Medicare taxes than Medicare pays for their care. And undocumented immigrants contribute the lion’s share of this subsidy.

And, just like everyone else, unauthorized immigrants pay sales taxes every time they shop and property taxes (indirectly) when they pay their rent, contributing $11 billion annually in state and local taxes.

While unauthorized immigrants contribute billions in taxes, they use shockingly little health care. Most of the federal health programs they help pay for (like Medicare, Medicaid and the ACA’s plans) exclude them. And those who pay for private coverage use very little care, so their premiums effectively subsidize other enrollees with private insurance.

As physicians, we believe that medical care must be available to everyone residing in the U.S. However, if Trump and other politicians are concerned about “relieving healthcare cost pressures on state and local governments” they should champion fair immigration policies that assure a steady flow of immigrants who come here wanting to work and willing to pay taxes, and don’t need much medical care.

Leah Zallman, M.D., M.P.H., is a research scientist at the Institute for Community Health, a primary care doctor at Cambridge Health Alliance, and an instructor of medicine at the Harvard Medical School. She is a health services researcher who focuses on health disparities, with specific areas of focus including immigrant health and access to care for vulnerable populations. Steffie Woolhandler, M.D., M.P.H., is an internist in the South Bronx, professor at the City University of New York School of Public Health at Hunter College, and lecturer in medicine at Harvard Medical School. She co-founded Physicians for a National Health Program.The opinions expressed here do not necessarily reflect the views of the authors’ institutions.

http://www.huffingtonpost.com/leah-zallman-md-mph/trump-on-immigrants-and-health-care_b_10146146.html

PNHP note: Physicians for a National Health Program (PNHP) is a nonpartisan educational and research organization. It neither supports nor opposes any candidate for public office.

Medicare’s Hospital Value-Based Purchasing program has not improved mortality outcomes

Association between the Value-Based Purchasing pay for performance program and patient mortality in US hospitals: observational study

By Jose F Figueroa, Yusuke Tsugawa, Jie Zheng, E John Orav, Ashish K Jha
BMJ, May 9, 2016

From the Introduction

Healthcare systems around the world are striving to deliver high quality care while controlling costs. One compelling strategy is the use of financial incentives to reward high value care. The US federal government has made substantial efforts to shift towards value based payments since the passage of the Affordable Care Act in 2010. One key program is Hospital Value-Based Purchasing (HVBP) introduced by the Centers for Medicare and Medicaid Services (CMS) in 2011. HVBP rewards or penalizes hospitals based on their performance on multiple domains of care, including clinical processes, clinical outcomes (eg, 30 day mortality for acute myocardial infarction, pneumonia, and heart failure), patient experience, and, more recently, cost efficiency. Funding for HVBP is designed to be budget neutral; Medicare withholds a percentage of inpatient payments to prospectively paid hospitals and then redistributes this money back to hospitals based on their performance. In fiscal year 2015, HVBP led to penalties for 1360 hospitals and bonus payments to 1700 hospitals.

From the Discussion

Three years after the introduction of the US national pay for performance program — Hospital Value-Based Purchasing (HVBP) — we find no evidence that it has led to better patient outcomes. The trends in mortality for the target conditions among hospitals participating in HVBP actually slowed after the program’s introduction, although that slowing was also seen among hospitals not participating in the program. Even among hospitals with worst patient mortality at baseline, a group of hospitals that had arguably more motivation to improve to avoid penalties, we found no evidence that HVBP drove improvement beyond secular trends observed in a matched group of non-HVBP hospitals. Taken together, these findings call into question the effectiveness of the national hospital pay for performance program and whether it is having the desired effect on patient outcomes.

This study has important implications for international efforts using financial incentives to drive improvements in hospital quality of care. The program on which HVBP was based, the US Premier Hospital Quality Incentive Demonstration, also failed to improve patient outcomes. Some critics argued that prior pay for performance programs based purely on attainment did not motivate poor performers to improve (since they were unlikely to improve enough to earn bonuses) and also did little for higher performers who would have received bonuses even by maintaining their status. However, HVBP was modified to include financial incentives for both achievement and improvement to ensure that all hospitals had some motivation to improve. Further, as a national non-voluntary program, HVBP was posited to be more impactful because it was not focused on a voluntary group of hospitals that might have been high performers at baseline. Despite these advantages, we found no evidence that HVBP improved patient outcomes. Given the amount of time and resources spent in its design and implementation, these findings are discouraging and should motivate policymakers to consider changes in the structure and size of incentives in ways that may lead to meaningful improvements in patient care versus completely rethinking the utility of pay for performance programs that target hospital quality.

Comparison with other studies

These results add to a growing body of literature that suggest many pay for performance programs are largely ineffective in improving patient outcomes. As further emphasis on value-based programs continues to grow, healthcare policymakers should carefully consider the costs of investing in these pay for performance programs and the potential unintended consequences. Ultimately, these programs need to be evaluated based on weighting the benefits and harms they create — and our work suggests that the benefits seem to be small, if present at all.

http://www.bmj.com/content/353/bmj.i2214.full

***

Comment:

By Don McCanne, M.D.

Pay for performance programs add to the administrative burden of our health care system and contribute to physician burnout, and now we have yet one more study that shows that they are ineffective in improving patient outcomes.

The thrust of health care reform is currently directed towards paying for quality instead of quantity, with an emphasis on measurement and process, resulting in greater administrative waste. Current cost containment has been largely confined to cost sharing which erects financial barriers to beneficial care and can only result in worse outcomes.

Now people are talking about what we really do need instead – a well designed single payer system, an improved Medicare for all – but the legislators, public administrators, and stakeholders are ignoring the conversation. This should be a call for organized protests. Why aren’t they happening?

Medicare’s Hospital Value-Based Purchasing program has not improved mortality outcomes

Association between the Value-Based Purchasing pay for performance program and patient mortality in US hospitals: observational study

By Jose F Figueroa, Yusuke Tsugawa, Jie Zheng, E John Orav, Ashish K Jha
BMJ, May 9, 2016

From the Introduction

Healthcare systems around the world are striving to deliver high quality care while controlling costs. One compelling strategy is the use of financial incentives to reward high value care. The US federal government has made substantial efforts to shift towards value based payments since the passage of the Affordable Care Act in 2010. One key program is Hospital Value-Based Purchasing (HVBP) introduced by the Centers for Medicare and Medicaid Services (CMS) in 2011. HVBP rewards or penalizes hospitals based on their performance on multiple domains of care, including clinical processes, clinical outcomes (eg, 30 day mortality for acute myocardial infarction, pneumonia, and heart failure), patient experience, and, more recently, cost efficiency. Funding for HVBP is designed to be budget neutral; Medicare withholds a percentage of inpatient payments to prospectively paid hospitals and then redistributes this money back to hospitals based on their performance. In fiscal year 2015, HVBP led to penalties for 1360 hospitals and bonus payments to 1700 hospitals.

From the Discussion

Three years after the introduction of the US national pay for performance program — Hospital Value-Based Purchasing (HVBP) — we find no evidence that it has led to better patient outcomes. The trends in mortality for the target conditions among hospitals participating in HVBP actually slowed after the program’s introduction, although that slowing was also seen among hospitals not participating in the program. Even among hospitals with worst patient mortality at baseline, a group of hospitals that had arguably more motivation to improve to avoid penalties, we found no evidence that HVBP drove improvement beyond secular trends observed in a matched group of non-HVBP hospitals. Taken together, these findings call into question the effectiveness of the national hospital pay for performance program and whether it is having the desired effect on patient outcomes.

This study has important implications for international efforts using financial incentives to drive improvements in hospital quality of care. The program on which HVBP was based, the US Premier Hospital Quality Incentive Demonstration, also failed to improve patient outcomes. Some critics argued that prior pay for performance programs based purely on attainment did not motivate poor performers to improve (since they were unlikely to improve enough to earn bonuses) and also did little for higher performers who would have received bonuses even by maintaining their status. However, HVBP was modified to include financial incentives for both achievement and improvement to ensure that all hospitals had some motivation to improve. Further, as a national non-voluntary program, HVBP was posited to be more impactful because it was not focused on a voluntary group of hospitals that might have been high performers at baseline. Despite these advantages, we found no evidence that HVBP improved patient outcomes. Given the amount of time and resources spent in its design and implementation, these findings are discouraging and should motivate policymakers to consider changes in the structure and size of incentives in ways that may lead to meaningful improvements in patient care versus completely rethinking the utility of pay for performance programs that target hospital quality.

Comparison with other studies

These results add to a growing body of literature that suggest many pay for performance programs are largely ineffective in improving patient outcomes. As further emphasis on value-based programs continues to grow, healthcare policymakers should carefully consider the costs of investing in these pay for performance programs and the potential unintended consequences. Ultimately, these programs need to be evaluated based on weighting the benefits and harms they create — and our work suggests that the benefits seem to be small, if present at all.

http://www.bmj.com/content/353/bmj.i2214.full

Pay for performance programs add to the administrative burden of our health care system and contribute to physician burnout, and now we have yet one more study that shows that they are ineffective in improving patient outcomes.

The thrust of health care reform is currently directed towards paying for quality instead of quantity, with an emphasis on measurement and process, resulting in greater administrative waste. Current cost containment has been largely confined to cost sharing which erects financial barriers to beneficial care and can only result in worse outcomes.

Now people are talking about what we really do need instead – a well designed single payer system, an improved Medicare for all – but the legislators, public administrators, and stakeholders are ignoring the conversation. This should be a call for organized protests. Why aren’t they happening?

Aetna and Anthem shareholders condone secrecy of dark money contributions

Shareholders vote down dark money disclosure at Aetna, Anthem

By Bob Herman
Modern Healthcare, May 26, 2016

Health insurers Aetna and Anthem won’t have to tell shareholders how much money they send to tax-exempt political organizations, at least for another year.

Shareholder resolutions that would’ve required Aetna and Anthem to disclose how much they spend on 501(c)(4) “social welfare” organizations and other business association groups failed to gain approval last week at the companies’ respective annual shareholders meetings. Approximately 91% of Anthem investors rejected the proposal, and 75% of the votes were cast against Aetna’s resolution.

Political not-for-profit organizations, also called dark money groups, do not have to reveal their donors, and they can receive unlimited amounts of money, much of which is routed toward influencing elections.

http://www.modernhealthcare.com/article/20160526/NEWS/160529926

***

Comment:

By Don McCanne, M.D.

The shareholders of Aetna and Anthem, by voting down disclosure of dark money contributions, are co-conspirators with the corporate executives in the efforts to prevent transparency of their financial contributions to dark money organizations that use their funds to influence elections.

Once we replace the private insurers with a publicly-owned Medicare for all program, we need show no special sympathy for the displaced insurance executives, and that goes for their rent-seeking shareholders as well. Our sympathies should be directed to the displaced employees of the insurance corporations who will need assistance in job training and in creating new employment opportunities.

Aetna and Anthem shareholders condone secrecy of dark money contributions

Shareholders vote down dark money disclosure at Aetna, Anthem

By Bob Herman
Modern Healthcare, May 26, 2016

Health insurers Aetna and Anthem won’t have to tell shareholders how much money they send to tax-exempt political organizations, at least for another year.

Shareholder resolutions that would’ve required Aetna and Anthem to disclose how much they spend on 501(c)(4) “social welfare” organizations and other business association groups failed to gain approval last week at the companies’ respective annual shareholders meetings. Approximately 91% of Anthem investors rejected the proposal, and 75% of the votes were cast against Aetna’s resolution.

Political not-for-profit organizations, also called dark money groups, do not have to reveal their donors, and they can receive unlimited amounts of money, much of which is routed toward influencing elections.

http://www.modernhealthcare.com/article/20160526/NEWS/160529926

The shareholders of Aetna and Anthem, by voting down disclosure of dark money contributions, are co-conspirators with the corporate executives in the efforts to prevent transparency of their financial contributions to dark money organizations that use their funds to influence elections.

Once we replace the private insurers with a publicly-owned Medicare for all program, we need show no special sympathy for the displaced insurance executives, and that goes for their rent-seeking shareholders as well. Our sympathies should be directed to the displaced employees of the insurance corporations who will need assistance in job training and in creating new employment opportunities.