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.

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.

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?

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?

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.

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.

Americans’ Experiences with ACA Marketplace and Medicaid Coverage: Access to Care and Satisfaction

By Sara R. Collins, Munira Gunja, Michelle M. Doty, Sophie Beutel
The Commonwealth Fund, May 25, 2016 

Abstract

The fourth wave of the Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016, finds at the close of the third open enrollment period that the working-age adult uninsured rate stands at 12.7 percent, statistically unchanged from 2015 but significantly lower than 2014 and 2013. Uninsured rates in the past three years have fallen most steeply for low-income adults though remain higher compared to wealthier adults. ACA marketplace and Medicaid coverage is helping to end long bouts without insurance, bridge gaps when employer insurance is lost, and improve access to health care. Sixty-one percent of enrollees who had used their insurance to get care said they would not have been able to afford or access it prior to enrolling. Doctor availability and appointment wait times are similar to those reported by insured Americans overall. Majorities with marketplace or Medicaid coverage continue to be satisfied with their insurance.

Exhibit 2: Uninsured Rates Among Low-Income Adults Have Fallen the Most But Remain Substantially Higher Than Those For Adults with Higher Incomes

People with low and moderate incomes — the population targeted in particular by the ACA’s reforms — had the highest uninsured rates prior to the law’s enactment and subsequently have experienced the greatest gains in coverage by far. But after declining steeply in 2014, uninsured rates for adults with incomes below 138 percent of the federal poverty level ($16,243 for an individual and $33,465 for a family of four) have remained about the same. Similarly, uninsured rates for those with incomes between 138 percent and 249 percent of poverty ($29,425 for an individual and $60,625 for a family of four) had fallen by half by 2015 but remain nearly the same this year. Consequently, low- and moderate-income adults are uninsured at rates as much as 10 times higher as those for adults with higher incomes.

Conclusion and Policy Implications

After falling sharply in 2014 upon rollout of the ACA’s major coverage expansions, the uninsured rate for U.S. working-age adults has been declining at a slower pace. The chasm in insurance coverage between lower- and higher-income adults remains troubling. We will explore the possible reasons for this in a forthcoming brief.

In each year since the coverage expansions, our survey findings have indicated that overall enrollment has been propelled by people who were previously uninsured — a year or longer for the vast majority. Consistent with other national surveys and Congressional Budget Office analyses, enrollment has not been driven by people shifting out of employer coverage: the share of adults insured through an employer has declined only slightly since 2013. The survey findings do suggest that for people who lose their job-based health benefits, the expanded insurance options may be helping to bridge the coverage gap.

http://www.commonwealthfund.org/publications/issue-briefs/2016/may/ACA-tracking-survey-access-to-care-and-satisfaction

***

Comment:

By Don McCanne, M.D.

The Affordable Care Act (ACA) has been effective in reducing the numbers of uninsured, particularly amongst low-income adults. Although that is good news, we should be alarmed that “low- and moderate-income adults are uninsured at rates as much as 10 times higher as those for adults with higher incomes,” and that there has been little improvement in enrollment for these lower income levels since the initial steep decline in 2014.

When ACA was constructed, it was decided that the employer-sponsored plans should be left largely alone to continue to fulfill the role of covering the majority of middle- and higher-income individuals and families. The greatest need was for the uninsured low-income and uninsured moderate-income sectors of the population. Thus two of the more important design features of ACA were to expand Medicaid for low-income individuals and to offer income-indexed tax credits and subsidies for private plans offered through the ACA exchanges (Marketplace).

How successful has the plan to cover those with greater financial needs been? As stated, uninsurance for those with low and moderate incomes has stabilized at a rate 10 times higher than those with higher incomes. Except for an initial surge, ACA has failed to achieve the goal of covering these more vulnerable populations.

They would have all been covered under a single payer system. Not only that, the ACA model of reform is the most expensive model of all, yet falls miserably short in universality, efficiency and equity. The least expensive comprehensive models of reform that would have actually achieved these goals are single payer Medicare for all or a government owned and operated national health service.

Although “socialism” has become less of a pejorative in the United States, the majority of residents would prefer the social insurance model of Medicare for all rather than socialized medicine through a national health service model. Now that ACA has been demonstrated to be an over-priced failure, we should move on with establishing an Improved Medicare for All.

Americans’ Experiences with ACA Marketplace and Medicaid Coverage: Access to Care and Satisfaction

By Sara R. Collins, Munira Gunja, Michelle M. Doty, Sophie Beutel
The Commonwealth Fund, May 25, 2016 

Abstract

The fourth wave of the Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016, finds at the close of the third open enrollment period that the working-age adult uninsured rate stands at 12.7 percent, statistically unchanged from 2015 but significantly lower than 2014 and 2013. Uninsured rates in the past three years have fallen most steeply for low-income adults though remain higher compared to wealthier adults. ACA marketplace and Medicaid coverage is helping to end long bouts without insurance, bridge gaps when employer insurance is lost, and improve access to health care. Sixty-one percent of enrollees who had used their insurance to get care said they would not have been able to afford or access it prior to enrolling. Doctor availability and appointment wait times are similar to those reported by insured Americans overall. Majorities with marketplace or Medicaid coverage continue to be satisfied with their insurance.

Exhibit 2: Uninsured Rates Among Low-Income Adults Have Fallen the Most But Remain Substantially Higher Than Those For Adults with Higher Incomes

People with low and moderate incomes — the population targeted in particular by the ACA’s reforms — had the highest uninsured rates prior to the law’s enactment and subsequently have experienced the greatest gains in coverage by far. But after declining steeply in 2014, uninsured rates for adults with incomes below 138 percent of the federal poverty level ($16,243 for an individual and $33,465 for a family of four) have remained about the same. Similarly, uninsured rates for those with incomes between 138 percent and 249 percent of poverty ($29,425 for an individual and $60,625 for a family of four) had fallen by half by 2015 but remain nearly the same this year. Consequently, low- and moderate-income adults are uninsured at rates as much as 10 times higher as those for adults with higher incomes.

Conclusion and Policy Implications

After falling sharply in 2014 upon rollout of the ACA’s major coverage expansions, the uninsured rate for U.S. working-age adults has been declining at a slower pace. The chasm in insurance coverage between lower- and higher-income adults remains troubling. We will explore the possible reasons for this in a forthcoming brief.

In each year since the coverage expansions, our survey findings have indicated that overall enrollment has been propelled by people who were previously uninsured — a year or longer for the vast majority. Consistent with other national surveys and Congressional Budget Office analyses, enrollment has not been driven by people shifting out of employer coverage: the share of adults insured through an employer has declined only slightly since 2013. The survey findings do suggest that for people who lose their job-based health benefits, the expanded insurance options may be helping to bridge the coverage gap.

http://www.commonwealthfund.org/publications/issue-briefs/2016/may/ACA-tracking-survey-access-to-care-and-satisfaction

The Affordable Care Act (ACA) has been effective in reducing the numbers of uninsured, particularly amongst low-income adults. Although that is good news, we should be alarmed that “low- and moderate-income adults are uninsured at rates as much as 10 times higher as those for adults with higher incomes,” and that there has been little improvement in enrollment for these lower income levels since the initial steep decline in 2014.

When ACA was constructed, it was decided that the employer-sponsored plans should be left largely alone to continue to fulfill the role of covering the majority of middle- and higher-income individuals and families. The greatest need was for the uninsured low-income and uninsured moderate-income sectors of the population. Thus two of the more important design features of ACA were to expand Medicaid for low-income individuals and to offer income-indexed tax credits and subsidies for private plans offered through the ACA exchanges (Marketplace).

How successful has the plan to cover those with greater financial needs been? As stated, uninsurance for those with low and moderate incomes has stabilized at a rate 10 times higher than those with higher incomes. Except for an initial surge, ACA has failed to achieve the goal of covering these more vulnerable populations.

They would have all been covered under a single payer system. Not only that, the ACA model of reform is the most expensive model of all, yet falls miserably short in universality, efficiency and equity. The least expensive comprehensive models of reform that would have actually achieved these goals are single payer Medicare for all or a government owned and operated national health service.

Although “socialism” has become less of a pejorative in the United States, the majority of residents would prefer the social insurance model of Medicare for all rather than socialized medicine through a national health service model. Now that ACA has been demonstrated to be an over-priced failure, we should move on with establishing an Improved Medicare for All.

Milliman Medical Index: Healthcare costs for a typical American family will exceed $25,000 in 2016 and have tripled since 2001

Healthcare costs reach $25,826 for the typical American family of four, compared to $8,414 in 2001.

PRNewswire
May 24, 2016

Milliman, Inc., a premier global consulting and actuarial firm, today released the 2016 Milliman Medical Index (MMI), which measures the cost of healthcare for a typical American family of four receiving coverage from an employer-sponsored preferred provider plan (PPO). In 2016, costs for this family will increase by 4.7% — the lowest rate of increase in the history of this study — though the total dollar increase of $1,155 marks the 11th consecutive year that the total dollar increase has exceeded $1,100. The employer pays $14,793 of the total healthcare costs and the employee — through payroll deductions and cost sharing at the time of service — pays $11,033.

http://www.prnewswire.com/news-releases/milliman-medical-index-healthcare-costs-for-a-typical-american-family-will-exceed-25000-in-2016-and-have-tripled-since-2001-300273940.html

***

2016 Milliman Medical Index

In 2016, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $25,826, according to the Milliman Medical Index (MMI).

Milliman Medical Index is an actuarial analysis of the projected total cost of healthcare for a hypothetical family of four covered by an employer-sponsored preferred provider organization (PPO) plan. Unlike many other healthcare cost reports, the MMI measures the total cost of healthcare benefits, not just the employer’s share of the costs, and not just premiums. The MMI only includes healthcare costs. It does not include health plan administrative expenses or profit loads.

Key findings of the 2016 MMI include:

1. Our lowest annual increase in 15 years still pushes the MMI over $25,000. The cost of care for the typical American family of four has more than tripled since its value of $8,414 in 2001. And the current level of $25,826 is just an average. Healthcare spending for any given family can range from $0 into the millions of dollars.

2. The percentage increase in the MMI is at its lowest rate ever. However, even at 4.7%, which is the lowest annual increase since we first measured the MMI in 2001, the rate of increase is still well above growth in the consumer price index (CPI) for medical services, and far surpasses the average 2% annual increase in median household income between 2004 and 2014. More than ever before, health insurance is a critical component of a family’s financial security, and yet it continues to become less and less affordable.

3. Employee expenses increase at rates higher than total healthcare spending. At $11,033, the employee’s total cost increased by 5.3% from 2015, while the employer’s cost increased 4.2%. In fact, only once in the past 10 years have employee costs increased at a lower rate than employer costs. Back in 2001, the first year we measured the MMI, employers paid 61% of costs while employees paid 39%. In 2016, the same split is 57% and 43%. Employees are shouldering more of the healthcare cost burden than they were 15 years ago.

4. Prescription drugs, the most rapidly growing MMI component, are nearly 17% of total healthcare spend. In 2016, the MMI family’s prescription drug costs will reach $4,270. That’s almost four times as much as the $1,111 in prescription drug expenditures the family had in 2001. Prescription drug expenses grew at 9.1% from 2015 to 2016, a lower rate than last year’s 13.6% increase.

http://us.milliman.com/uploadedFiles/insight/Periodicals/mmi/2016-milliman-medical-index.pdf

***

Comment:

By Don McCanne, M.D.

The Milliman Medical Index (MMI) is the cost of health care for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan. It is now over $25,000 ($25,826).

Although the annual percentage increase in the MMI has been declining – this year down to 4.7% – the dollar increase has exceeded $1,100 for each of the last 11 years. Though some of that is paid by forgone wage increases, that is quite a bite to being taking each year out of the wages for a typical worker’s family of four.

Nor should the declining rate of increase in the MMI be celebrated as a success of the Affordable Care Act. It is in excess of four times the rate in the increase in the CPI over the last 12 months (1.1%). Families on the average are ending up further and further behind because of the increases in our health care costs.

Milliman Medical Index: Healthcare costs for a typical American family will exceed $25,000 in 2016 and have tripled since 2001

Healthcare costs reach $25,826 for the typical American family of four, compared to $8,414 in 2001.

PRNewswire
May 24, 2016

Milliman, Inc., a premier global consulting and actuarial firm, today released the 2016 Milliman Medical Index (MMI), which measures the cost of healthcare for a typical American family of four receiving coverage from an employer-sponsored preferred provider plan (PPO). In 2016, costs for this family will increase by 4.7% — the lowest rate of increase in the history of this study — though the total dollar increase of $1,155 marks the 11th consecutive year that the total dollar increase has exceeded $1,100. The employer pays $14,793 of the total healthcare costs and the employee — through payroll deductions and cost sharing at the time of service — pays $11,033.

http://www.prnewswire.com/news-releases/milliman-medical-index-healthcare-costs-for-a-typical-american-family-will-exceed-25000-in-2016-and-have-tripled-since-2001-300273940.html

***

2016 Milliman Medical Index

In 2016, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $25,826, according to the Milliman Medical Index (MMI).

Milliman Medical Index is an actuarial analysis of the projected total cost of healthcare for a hypothetical family of four covered by an employer-sponsored preferred provider organization (PPO) plan. Unlike many other healthcare cost reports, the MMI measures the total cost of healthcare benefits, not just the employer’s share of the costs, and not just premiums. The MMI only includes healthcare costs. It does not include health plan administrative expenses or profit loads.

Key findings of the 2016 MMI include:

1. Our lowest annual increase in 15 years still pushes the MMI over $25,000. The cost of care for the typical American family of four has more than tripled since its value of $8,414 in 2001. And the current level of $25,826 is just an average. Healthcare spending for any given family can range from $0 into the millions of dollars.

2. The percentage increase in the MMI is at its lowest rate ever. However, even at 4.7%, which is the lowest annual increase since we first measured the MMI in 2001, the rate of increase is still well above growth in the consumer price index (CPI) for medical services, and far surpasses the average 2% annual increase in median household income between 2004 and 2014. More than ever before, health insurance is a critical component of a family’s financial security, and yet it continues to become less and less affordable.

3. Employee expenses increase at rates higher than total healthcare spending. At $11,033, the employee’s total cost increased by 5.3% from 2015, while the employer’s cost increased 4.2%. In fact, only once in the past 10 years have employee costs increased at a lower rate than employer costs. Back in 2001, the first year we measured the MMI, employers paid 61% of costs while employees paid 39%. In 2016, the same split is 57% and 43%. Employees are shouldering more of the healthcare cost burden than they were 15 years ago.

4. Prescription drugs, the most rapidly growing MMI component, are nearly 17% of total healthcare spend. In 2016, the MMI family’s prescription drug costs will reach $4,270. That’s almost four times as much as the $1,111 in prescription drug expenditures the family had in 2001. Prescription drug expenses grew at 9.1% from 2015 to 2016, a lower rate than last year’s 13.6% increase.

http://us.milliman.com/uploadedFiles/insight/Periodicals/mmi/2016-milliman-medical-index.pdf

The Milliman Medical Index (MMI) is the cost of health care for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan. It is now over $25,000 ($25,826).

Although the annual percentage increase in the MMI has been declining – this year down to 4.7% – the dollar increase has exceeded $1,100 for each of the last 11 years. Though some of that is paid by forgone wage increases, that is quite a bite to being taking each year out of the wages for a typical worker’s family of four.

Nor should the declining rate of increase in the MMI be celebrated as a success of the Affordable Care Act. It is in excess of four times the rate in the increase in the CPI over the last 12 months (1.1%). Families on the average are ending up further and further behind because of the increases in our health care costs.