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News Roundup: May 27, 2016

Health Care Providers Embrace Telemedicine

Published by Twin Cities Business
By Don Jacobson
May 27, 2016

A national meeting of telemedicine industry leaders held in Minneapolis last week provided continuing evidence that providers are embracing telehealth as an inevitable wave of the future, despite continuing resistance from insurers and the inability of laws and regulations to keep pace with the changes.

At least that’s the take of the Mayo Clinic’s top telehealth advocates, including CEO Dr. John Noseworthy, who delivered one of the keynote addresses at ATA 2016, the annual conference and trade show of the American Telemedicine Association.

The Rochester clinic has a pioneering track record in telehealth, choosing to forge ahead in an era when adequate insurance reimbursement for those services remains spotty or (in many states) non-existent – opting instead to absorb the costs in an effort to integrate videoconferencing and other telecommunication technologies as quickly as possible to benefit patients.

Along with Noseworthy in the Mayo contingent at ATA 2016 was Dr. Steve Ommen, a heart specialist and the associate dean of the clinic’s Center for Connected Care, which coordinates its efforts to leverage advances in communications technology to extend physician care to remote locations around the state – and the world.

Ommen said what struck him most about the Minneapolis gathering was that the discussion about telehealth seems to have shifted away from how to spark interest in it (which now appears to be a given) to how to integrate it within healthcare organizations. And Mayo’s early adoption of the concept has given other providers a model of how it can be done.

“They’re asking, ‘How do we make this a part of what we do?” he told TCB. “Of course, this may just be ‘confirmation bias’ on my part, but I think at Mayo, at least, we have a strong feeling that the integration of telemedicine into our organization is the path to success. We think that if we’re wildly successful, we’ll stop taking about ‘telemedicine’ as a separate business unit, and rather it will just be another part of the practice of medicine.”

Ommen compares it to the evolution of ATMs and online banking. The days when banks and their customers considered those electronic transactions as somehow distinct from traditional banking activities have evaporated as people became more comfortable with the technology: Now it’s all just considered “banking.”

The wider adoption of telemedicine techniques such as videoconferencing via home computers and smartphones is being driven by several factors, not the least of which is a looming shortage of physicians, especially in rural areas where such shortages are already acute and accessing care more difficult.

Also providing impetus is the greater number of insured under the “Obamacare” reforms; the push by providers toward “population health management” in which patient data is used to track outcomes and lower costs; and the quickly rising demand for home health care for the elderly.

The Minnesota Hospital Association asserts that telemedicine can reduce hospital readmission rates and prevent or mitigate medical emergencies. In one study it cites, tele-monitoring of patients at risk of heart failure produced a 23 percent decrease in hospital admissions and a 38 percent reduction in readmissions within 90 days when compared to patients not being monitored. As a result, the provider reduced costs by 11 percent.

And for those in the telemedicine business, it’s potentially a huge market – just how big is still emerging as more insurers and employers begin to pay for such services and as the value is quantified. However, a recent study from business information provider Grand View Research predicts the U.S. telehealth market will grow from $240 million in revenue in 2013 to $2.8 billion in 2022 — an annual growth rate of more than 50 percent.

However, standing in the way of wider adoption is continuing reluctance by insurers to cover telemedicine, or at least at the same rate as in-person visits. In the case of Medicare, telemedicine coverage extends only to rural counties officially designated as “health professional shortage areas.”

The battle for insured telemedicine is being waged on a state-by-state basis, and last year, backers scored a big victory in St. Paul. That’s when Minnesota became the 23rd state to require such coverage, and went a step further with the Minnesota Telemedicine Act to require parity of payment with in-person visits. The provisions kick in with commercial health plans issued after Jan. 1, 2017.

Health Care, Housing Collaboration Key to Aging in Place

Published by Home Health Care News
By Kourtney Liepelt
May 27, 2016

Today’s rapidly growing senior population faces significant challenges, ranging from a lack of retirement funds and a shortage of affordable housing to homes ill-equipped for aging in place. Confronting these challenges for older citizens should be mission critical, even if it will likely require additional public spending, according to a report issued this month by the Bipartisan Policy Center’s Senior Health and Housing Task Force.

In the report, titled “Healthy Aging Begins at Home,” the task force emphasizes the benefits of home health care, as well as the importance of integrating the nation’s health care and housing systems “to help manage chronic disease, improve health outcomes for seniors and enable millions of Americans to age successfully in their own homes.” Members of the task force are Henry Cisneros, former secretary of the U.S. Department of Housing and Urban Development (HUD); Mel Martinez, former HUD secretary and past U.S. senator; Allyson Y. Schwartz, former U.S. representative; and Vin Weber, past U.S. representative.

The report consists of actionable recommendations developed over the last year to foster a comprehensive national effort to boost the supply of affordable seniors housing and further encourage the connection between housing and health care.

“The aging of America will present tremendous challenges that will affect virtually every sector of society; it will place added pressure on already strained household and public budgets,” the task force writes. “But with these challenges also comes a great opportunity: the chance to enhance the quality of life for Americans, regardless of age, who stand to benefit from a healthier and more engaged senior population.”

Recommendations outlined in the report seek to address the following:

1. Building more affordable housing for seniors: Mortgage payments, property taxes and other housing-related costs tend to be seniors’ biggest household expenditures, according to the report.

As such, the task force provided several proposals in an effort to promote a national effort to increase affordable housing for seniors. These involve taking action to prevent and end homelessness among older adults; funding rental assistance programs for low-income seniors; and considering permissive land-use policies to allow for and encourage alternative housing structures for seniors, among others.

2. Transforming homes and communities to facilitate aging in place: More seniors today indicate a desire to age in place, but their finances might prevent them from doing so.

“In light of these difficult conditions, new solutions will be necessary—solutions that expand the range of housing options and that accommodate a variety of needs and preferences as individuals age,” the report states.

Solutions offered up by the task force incorporate programs to help low-income seniors with home modifications through the likes of property tax credits or grants; assessments of community living models to determine how they might be replicated elsewhere and for different socioeconomic sectors of the population; and the development of a one-stop platform for door-to-door transportation services.

3. Integrating health care and supportive services with housing: The potential for seniors to receive health and wellness care at home is increasing, according to the report, as is home care’s role in chronic care management.

That means models that deliver health care and other services to seniors in their own homes could improve health outcomes and reduce health care utilization and costs. Therein lies policy opportunities to speed up the connection between health care and housing. Some examples from the task force are hospitals questioning about housing as part of discharge planning, and the Centers for Medicare & Medicaid Services (CMS) doing the same in health risk assessments; Medicaid collecting data on state coverage of housing-related activities and services; and Congress and the administration expanding certain programs to reduce health care costs and support Medicare long-term care systems.

4. Deploying technology to help Americans age successfully: It’s no secret that technology has revolutionized the administration of health care, and older adults and caregivers alike benefit.

Telehealth and electronic health records aide medical officials, while fall monitoring systems and social networking apps help seniors age in place. Still, barriers exist that prevent higher levels of adoption, like costs of technology, ease of use and limited internet access, especially in rural areas.

The task force suggests combatting these barriers through greater reimbursement from CMS and states for telehealth and other similar technologies; increasing the availability of broadband to keep seniors connected; and demonstrating the perks on internet access for low-income seniors, along with the effectiveness of health technologies.

Paying For Value: Perspective From The Front Lines

Published by Health Affairs Blog
By Denis Cortese, John Toussaint, David Krueger, and Robert Smoldt
May 27, 2016

The concept of value-based health care is rapidly gaining traction in the U.S., yet implementation remains a significant challenge. For example, the current Medicare “shared savings” payment approach penalizes high-value providers, while rewarding historical inefficiency.

As stated by Ginsburg and Rivlin, “Part of the difficulty involves provider benchmarks that reward improvement rather than level of performance.” This is further complicated by the constant downward pressure on payment benchmarks, which not only reduces or erases any prior gains, but also threatens to put the already high-value providers out of business. Additional issues observed (and described previously) include inaccuracies with patient attribution, inconsistently set cost and quality targets, and the near-complete lack of patient involvement.

We propose that in a true pay-for-value system, a national payment rate should be established and rooted in reality (e.g., based on the costs of the top performing health care delivery organizations) and adjusted for three factors: a) risk of the patient population, b) geographic variation in the cost of doing business, c) patient outcomes. A detailed set of recommendations to setting the payment rate is provided below.

Global-Based Payment Systems More Conducive To Higher Value Health Care
While all of the provider payment mechanisms, including fee-for-service (FFS), have some merit and potential use cases, we believe that global-based payment systems (e.g., bundled payments, full capitation) are best positioned to move the U.S. health care system toward high-value health care for all. Under the current reimbursement structure most services are paid for separately, which results in limited or no financial incentives for different parts of the system to work together and create value around the patient. Moreover, acute episode prevention and care coordination are not rewarded in the current FFS environment.

While shared savings, reference pricing, and varied provider payment updates are steps in the right direction, if these payment approaches continue to be based on the FFS model, they will be subject to the same limitations and not result in significant movement toward high-value care. In turn, as we move forward toward more global payments, a previous Commonwealth Fund report noted that in order to succeed in promoting high-value care, “payment levels must be carefully calibrated to ensure providers’ financial viability while providing incentives to reduce costs and safeguards to ensure high quality.”

Key Components Of A Successful Global-Based Payment Model
As noted above, the implementation of a given payment approach, and specifically how reimbursement is set for a given service, is a major issue that can either facilitate or significantly hamper an organization’s ability to deliver high-value care. We have identified the following elements as key to establishing a global-based payment model that is likely to promote high-value care:

1. Reality-Based Pricing
Payments should be based on reality, i.e., not defined by complex formulas that are often incorrect and tend to reward the delivery organizations that get the worst outcomes. Instead, we feel the approach should be one suggested by Dr. Harold Luft. This approach would determine what delivering care actually costs in delivery organizations that get the best outcomes (i.e., actual provider cost, not what Medicare currently pays).

Moreover, the cost we are referring to here is total cost of care over time (e.g., episode, one year), rather than cost per line-item of services provided. In our example (see Exhibit 1) the base payment amount could be set at the 90th percentile of the high value quadrant delivery organizations, i.e., hospitals that get better than average quality at lower than average total cost per case.

Therefore, all delivery organizations that had costs to the right of the dotted line would now have incentives to become more efficient. Recognizing that organizations with higher than average present costs will have a hard time adjusting to such a large upfront reduction, we recommend that this payment approach be done in a phased-in manner over three years. A phased-in approach will also benefit payers, Medicare in particular, given that its current payment rates are often below the cost of delivering care. Thus, Medicare could start by setting its rates at the Medicare national average and gradually evolve toward actual costs of the high value quadrant providers.

2. Bundled Payment And Per Member Per Year (PMPY) Reimbursement
Payments should be further adjusted for population characteristics (risk), the cost of doing business (regional differences in wages and non-labor costs), and patient outcomes (quality). A risk-adjusted quality component/withhold is warranted to ensure that we do not sacrifice care effectiveness in the name of efficiency, i.e., patients are not denied appropriate care.

For example, instead of receiving 100 percent of the base payment amount, delivery organizations would initially receive 95 percent of the base payment amount. Providers with above average outcomes would receive the full amount (95 percent + the 5 percent quality withhold). In turn, payment to providers with below average outcomes would remain at 95 percent of the base payment amount (they lose the 5 percent quality withhold). The quality withhold could be set at a higher percentage and could also be scaled.

3. Margin
Once you have established the baseline bundled payment/PMPY for a given provider, add 2-4 percent margin, as without a small margin even a not-for-profit organization cannot stay in business.

4. Secondary Re-Insurance
There should be an option to purchase secondary re-insurance to account for catastrophic events. This is particularly important for small and critical-access care delivery organizations.

5. Patient Involvement
Patient benefits must be aligned with payment approaches in a way that allows for both patient choice and patient responsibility. Consumer choice has long been a key component of American society and consumer involvement is key to ensuring appropriate levels of health care utilization. Since the advent of the third party payers in the 1940s and further coverage expansion in the 1960s through Medicare and Medicaid, patients have been increasingly insulated from the true costs of care.

Not surprisingly, those with health care coverage have little incentive to limit their utilization of health care services. Consumer Driven Health Plans (CDHP) with Health Savings Accounts (HSA), preventative care covered at 100 percent and no co-pays or co-insurance for visits to a coordinating primary provider, present a potential option to accomplish both objectives. Such plans can accommodate low-income individuals by placing a government contribution directly into the individual’s HSA.

Finally, we believe that a good place to start is by focusing on areas of the health care system where we are likely to achieve the biggest impact. Given the high concentration of health care spending on a small group of highly complex patients (20 percent of patients account for 80 percent of the cost), we feel that these novel payment approaches should be first designed and deployed to address the care and needs of those high-need, high-cost populations, rather than serving as a payment approach “for all.”

State plan on aging reveals gaps, challenges of serving seniors

Published by Keystone Crossroads
May 27, 2016

Every four years, the state of Pennsylvania is required to file a strategic plan on aging that addresses issues faced by residents over the age of 60. With a rapidly aging population and a bubble of baby boomers preparing to retire, Pennsylvania has never needed that plan more.

The 2016-2020 plan has been released in draft form, but is still open to revision. The Pennsylvania Department of Aging held public hearings in Pittsburgh, Harrisburg and Philadelphia to solicit community feedback.

"Every public hearing brings up something new for us to consider," said Theresa Osborne, secretary of aging. "Every hearing I've been at someone has said, 'Hey, let's take a look at that,' or 'let's not forget about this.'"

The plan starts with a series of community meetings across the state, where seniors, caretakers and local leaders tell the state where they'd like to see more assistance available. Then, the department consults with the Pennsylvania Council on Aging and the 52 Area Agencies on Aging across the state. The final step is this comment period.

The plan will go into effect October 1st, and guide the state through 2020.

Main goals

"This plan builds on the guidelines established in 2012," said Osborne. "We continue to build off of that platform to address the needs of seniors today, tomorrow and in the future. The plan shows that we are being responsive to seniors and shows how we utilize the dollars trusted to our care."

Pennsylvania is the only state in the country that uses revenue from the lottery to pay for elder care and services, with 78 percent of the agency's budget coming from the lottery and 22 percent coming from the federal government.

This year's plan has four main goals: promote existing services, improve access to services, enhance quality of services and empower the workforce that works directly with seniors.

Those rather vague directives have more specific objectives that deal with issues like transportation, insurance, elder abuse and aging in place.

"What [seniors] are telling us is ... are they going to have resources in place for them in order to remain living in their own homes?" said Osborne. "Can they indeed age in place?"

Rather than going to a nursing home or retirement facility, many seniors would rather be cared for their homes. The strategic plan increases workforce and volunteer development to make that a feasible option for seniors statewide.

Rebecca May-Cole, executive director of the Pennsylvania Association of Area Agencies on Aging, says that's good progress.

"We were happy to see a focus on helping older adults age in place with dignity and respect by increasing the quality of services," said May-Cole. "But we'd like to see more attention to senior centers, which are such a critical part of keeping seniors in their homes."

May-Cole said senior centers help the elderly access services, improve their health and stave off isolation.

She applauded the state's renewed focus on Alzheimer's and related diseases.

The younger generation

PDA focuses on the needs of Pennsylvanians over the age of 60. But that demographic is served by a younger generation that has concerns of its own, according to the feedback and listening sessions.

"We heard a lot of feedback about the role of caretakers," said Osborne. "We realize those caretakers are such a big part of aging in place and we need to make sure they can access services themselves or for the loved one they care for."

The state offers a caregiver program, but Osborne says it has varied success around the state. The agency is currently analyzing that program to see how they could better reach caregivers.

In addition to unpaid family caregivers, the plan prioritizes training and monitoring paid caregivers in the home health industry. This tries to address the increased concern about elder abuse in Pennsylvania. May-Cole said there would soon be a need to recruit young people into the field, something the plan doesn't address.

In Pennsylvania, many family caregivers are preparing for retirement themselves. In 2010, 21.4 percent of the state was over the age of 60. By 2030, that number is projected to be closer to 30 percent.

Is Pennsylvania prepared to deal with the baby boomer retirement bubble?

"My short answer? No," said May-Cole. "That's not to say they can't be, but right now, no, they aren't prepared."

She'd like to see more funding allocated to the Area Agencies on Aging and related programs. And while the strategic plan isn't a funding document, she sees it as a step in the right direction with a number of objectives that could garner more funding.

"But, right now, when we have 4,000 people on a waiting list for lottery-funded programs, it's hard for us to plan for the future," said May-Cole. "We can't plan for more retirees when we can't even serve everyone right now."