Unbiased Analysis of Today's Healthcare Issues

Music therapy

Written By: Jason Shafrin - Nov• 12•15

When we think of medicine we think of pharmaceutical medications, surgery and other interventions.  But can music also be used to heal.  According to the American Music Therapy Association, the answer is yes.  A paper by Gold et al. (2006) finds this is the case for patients with schizophrenia:

In people hospitalised with schizophrenia, adding music therapy to standard care lead to greater improvement in symptoms compared with standard care alone at 12 weeks (change in PANSS [Positive and Negative Syndrome Scale] total score from baseline: 29.00 with music therapy plus standard care vs 22.96 with standard care alone; p = 0.045).

A study by Chang et al. (2008) found that music therapy reduced stress and depression among pregnant women.  Clearly, music therapy will not cure cancer, but adding music could improve patient mental health and indirectly improve receptiveness to more traditional treatments.  One pharmacist agrees with this approach as well. A Carnegie Hall program convinced a 23-year old mother of two with HIV to get back on her medications after 3 years off her meds.

To improve your mental health as we go into the weekend, check out this blues classic from Louis Armstrong.  Enjoy.


Thursday Links

Written By: Jason Shafrin - Nov• 11•15

How much are you willing to pay to live an extra year? (Part II)

Written By: Jason Shafrin - Nov• 10•15

In a previous post in 2014, I examined a systematic literature review of individual willingness to pay for an extra life year.  That study found that individuals were willing to pay 118,839 EUR 2010 on average (equivalent to $142,762.92 USD in 2015 USD). The median WTP however, is only 24,226 EUR (or $29,100 in 2015 USD).

Another study from Braithwaite et al. (2008) not included in that review uses a unique approach to measure QALY valuations:

We used 2 separate approaches to investigate whether the $50,000 per QALY rule is consistent with current resource allocation decisions. To infer a lower bound for the decision rule, we estimated the incremental cost-effectiveness of recent (2003) versus pre-“modern era” (1950) medical care in the United States. To infer an upper bound for the decision rule, we estimated the incremental cost-effectiveness of unsubsidized health insurance versus self-pay for nonelderly adults (ages 21– 64) without health insurance.

They find that:

…plausible lower and upper bounds for a cost-effectiveness decision rule are $183,000 per life-year and $264,000 per life-year, respectively. Our sensitivity analyses widen the plausible range (between $95,000 per life-year saved and $264,000 per life-year saved when we considered only health care’s impact on quantity of life, and between $109,000 per QALY saved and $297,000 per QALY saved when we considered health care’s impact on quality as well as quantity of life) but it remained substantially higher than $50,000 per QALY.

These findings are similar or even a bit higher than the average values of the systematic literature review.  As many countries use a value per QALY to measure the value of new innovations, ensuring that this figure is supported by solid evidence is vital to ensuring that patient access to innovative treatments occurs without overspending on treatments that offer poor value.


HDHP on the rise

Written By: Jason Shafrin - Nov• 09•15

High deductible health plans (HDHP) are on the rise. According to the Kaiser Family Foundation 2015 Employer Health Benefits Survey, 25 percent of all covered workers have an HDHP in 2015, up from just 8% in 2009.


For small firms, 69% of workers have a deductible of $1,000 or more compared to only 39% of workers employed at large firms. Moreover:

…the average deductible for all covered workers in 2015 is $1,077, up 67% from $646 in 2010 and 255% from $303 in 2006.


Most workers (99%) have a plan that covers prescription drugs and most workers (94%) are in plans that cover specialty drugs, but 81% have plans that use three or more drug tiers to determine patient copayment amounts.

Among workers with plans with three or more tiers, the average copayments in these plans are $11 for first tier drugs, $31 for second tier drugs, $54 for third tier drugs, and $93 for fourth tier drugs. HDHP/SOs have a somewhat different cost sharing pattern for prescription drugs than other plan types; just 61% of covered workers are enrolled in a plan with three or more tiers of cost sharing, 12% are in plans that pay the full cost of prescriptions once the plan deductible is met, and 22% are in a plan with the same cost sharing for all prescription drugs.

Whether or not a firm offers health insurance depends largely on firm size.  As of 2015, 54% of workers in firms of size 3-49 people being offered insurance, 89% of workers in firms with 50-99 people being offered insurance, and 97% of individuals working in firms of 100 or more being offered insurance.

Synthetic Control Method

Written By: Jason Shafrin - Nov• 08•15

A common method for measuring the effect of policy interventions is the difference in difference (DiD) approach.  In essence, one examines the change in outcomes among observations subject to the policy intervention and compare them agains observations that were not eligible for the policy intervention.

A key assumption for this approach to be valid is that the trends in both groups are the same and any deviation from this trend is due to the policy intervention.  This assumption is known as the parallel trends assumption.

A study by Krief et al. (2015) proposes an alternative approach: the synthetic control method. The authors describe this method as follows:

The central idea behind the synthetic control method is that the outcomes from the control units are weighted so as to construct the counterfactual outcome for the treated unit, in the absence of the treatment. More precisely, a synthetic control unit is defined as the time-invariant weighted average of available control units, which prior to the intervention have similar pre-intervention characteristics and outcome trajectory to the treated unit. In contrast to the DiD method, the synthetic control method allows the effects of observed and unobserved predictors of the outcome to change over time, while assuming that pre-intervention covariates have a linear relationship with outcomes post-treatment.

The authors apply this method to the Advancing Quality (AQ) initiative in England:

The AQ scheme was the first hospital-based P4P programme in the UK, introduced in October 2008 for all hospitals in the North West Strategic Health Authority. The AQ scheme aimed to improve hospital performance on a number of clinical processes by rewarding hospitals for achieving quality targets. As the US Hospital Quality Incentive Demonstration scheme, the AQ was initially based on a ‘tournament’ system, in which bonuses were paid to the top performers. The programme required participating hospi- tals to collect and submit data on 28 quality measures of patient care across five clinical areas: pneumo- nia, heart failure, acute myocardial infarction, hip and knee surgery, and coronary artery bypass grafting. In the first year of the programme, bonuses equal to 2–4% of their revenue were paid to hospitals, which reported quality scores in the top two quartiles.

They find the following:

In contrast to the original DiD analysis, the synthetic control method reports that, for the incentivised conditions, the P4P scheme did not significantly reduce mortality and that there is a statistically significant increase in mortality for non-incentivised conditions. This result was robust to alternative specifications of the synthetic control method.


Friday Links

Written By: Jason Shafrin - Nov• 06•15

The Health Wonk Review is up

Written By: Jason Shafrin - Nov• 05•15

David Williams kicks off the start of the Affordable Care Act’s third annual open enrollment period with Health Wonk Review: Open season on open enrollment edition at Health Business Blog.   Go check it out!

Risk Sharing Agreements video

Written By: Jason Shafrin - Nov• 04•15

Previously, I described a paper on risk sharing agreements in the US.  The National Pharmaceutical Council has a nice video from one of the authors that also summarizes the findings.


Is reducing disparity enough?

Written By: Jason Shafrin - Nov• 02•15

A recent paper in by Martin et al. (2015) finds that Medicaid Managed Care programs in Kentucky reduced monthly professional visits. Further, the decrease in the number of professional visits was larger for whites than for non-whites. The authors conclude:

We find evidence that MMC [Medicaid Managed Care] has the possibility to reduce racial/ethnic disparities in professional utilization. More work is needed to determine which managed care program characteristics drive this result.

This begs the question: is this reduction in disparity a good thing?  The authors rightly point out that it is unclear whether the reduction in physicians visits represents a reduction in unnecessary care or a reduction in needed care.  For the moment, however, let’s consider the case where patients value more physicians visits and let us ignore the affect of more visits on premiums.

In this case, Medicaid managed care programs would represent a loss of utility for both whites and minorities.  From the study, the decrease in physician visits is larger for whites however.  Is this decrease in “disparities” worthwhile?  I would argue not.  Reducing the number of physician visits of those who have more on average is not a positive way to reduce disparities; the key is to increase the number of physician visits among those who do not have enough (i.e., minorities).

Harry Frankfurt makes a similar argument in his book On Inequality.  The goal of reducing inequality or disparities–whether it be disparities in income or physician visits–should not be to reduce the welfare of the better off, but rather improve the welfare of the worse off.  For this reason, the tone of Martin and co-author’s conclusion–in essence that reducing disparities is a good in and of itself–ignores the true motivation for reducing disparities: making sure those at the bottom have enough.


What is MACRA?

Written By: Jason Shafrin - Nov• 01•15

MACRA is the Medicare Access & CHIP Reauthorization Act, also know colloquially as the ‘permanent doc fix’.  Although MACRA is know for repealing the Sustainable Growth Rate (SGR) provisions that would have significantly cut physicians salaries (but was reversed every December), there are other provisions.

Although physicians may take comfort in avoiding the year end doc fix looming this year, more and more of Medicare physician’s payment will be tied to performance. As I reported back in April, the Merit-Based Incentive Payment System (MIPS) and the Alternative Payment Models are two ways that physician payments will change. The NCQA 2015 State of Health Care Quality report provides some additional details.


MIPS payments will be adjusted by 4 percent of clinicians’ total Medicare payments in 2019; adjustments increase to plus or minus 9 percent by 2021.MACRA’s second track, Alternative Payment Models (APM), may sound familiar. At the beginning of 2015 and before MACRA passed, HHS announced its intention to havealternative payment models covering 30 percent of Medicare fees by 2016 and 50 percent by 2018. At the same time, a coalition of private insurers, providers, purchasers and consumers announced a similar goal for 75 percent of payments by 2020.

The MIPS program rates providers along four dimensions: clinical quality, resource use, health IT meaningful use and clinical practice improvement activities (CPIA).  Note that certain types of providers (e.g., patient centered medical homes (PCMH) and patient-centered specialty practices (PCSP) automatically qualify for CPIA status. NCQA expands.

Under MACRA, practices can propose APMs to CMS that accept two-sided financial risk and use electronic health records and quality measures.Clinicians in Medicare-approved APMs receive bonuses totaling 5 percent of their Medicare pay—substantial incentive to develop systems that have a greater ability to improve quality. Practices in Medicare PCMH demonstration programs shown to improve quality and reduce costs qualify as APMs and are eligible for the bonus. Other PCMH and PCSP practices are natural platforms for building additional APM proposals.


What other MACRA provisions are there besides MIPS, APM and the repeal of the SGR?  MACRA also has a number of other quality improvement initiatives.

In 2016, Medicare is required to develop a plan to fill gaps in measurement and align measurement across payers…To help clinicians make the overdue transition to value-based pay, in 2018 Medicare is required to start giving clinicians information on care their patients receive from other providers and suppliers… MACRA also requires Medicare to give clinicians feedback on their performance compared with local and national benchmarks.

One thing is for certain, change is coming.