Unbiased Analysis of Today's Healthcare Issues

Narrow Networks in your state

Written By: Jason Shafrin - Aug• 24•15

The Affordable Care Act aimed to increase patient access to care.  Although it has certainly improved the share of patients who are insured, it is not clear whether it has actually improved “access.”  Many health insurance exchange plans are able to offer low premiums by limiting the number or type of doctors you are able to use.

Describing the prevalence of these “narrow networks” across states is a recent RWJ issue brief by Polsky and Weiner (2015).  Below are the states whose health insurance exchange plans are most likely to have narrow network.


ACO Characteristics

Written By: Jason Shafrin - Aug• 23•15

In recent years, payers have moved towards shifting more financial risk to providers.  One of the most significant ways financial risk is passed to providers is through the creation of Accountable Care Organizations (ACOs).  The biggest ACO program is Medicare’s Shared Savings Program (MSSP).  Are ACO’s improving quality and reducing cost?  A paper by Schulz, DeCamp and Berkowitz (2015) finds:

Of MSSP ACOs that initiated operations in 2012 or 2013, 118 (54%) lowered expenditures compared with benchmark projections. In total, these ACOs generated $383 million in net savings for Medicare during their first performance year, with 52 ACOs earning shared savings payments of more than $315 million.

What do ACO’s look like?

Of these ACOs, 131 (42%) have more than 20 participating entities, while 42 (13%) are composed of only 1 (Table). More specifically, 140 (45%) included PCPs, specialists, and hospitals, 124 (40%) had PCPs and specialists, while 49 (16%) were composed entirely of primary care physicians.

The authors also found that large ACOs–those with at least 20 participating entities–were the most likely to generate savings.



HWR is up

Written By: Jason Shafrin - Aug• 21•15

Peggy Salvatore of Health System Ed posts this week’s edition of the Health Wonk Review. She has the clever theme of “The More Things Change, The More They Cost.”

Check it out!

How useful are health rankings?

Written By: Jason Shafrin - Aug• 20•15

According to an HSR editorial by Stephan Arndt, the answer is not very.  Generally, county level health rankings are too variable to be of much use.  Further, while some metropolitan regions may have large sample sizes, the sample sizes in less densely populated rural counties will be far lower leading to less precise estimates of any quality measure of interest.

As an exercise to demonstrate the lack of reliability, the author did the following:

I calculated the gross overall mortality rate in Iowa as thetotal number of deaths (Bureau of Vital Statistics, Iowa Department of Public Health 2009) divided by Iowa’s 2010 U.S. Census population total. Using this constant mortality rate, I then generated a random Poisson value for each county in Iowa based on the expected number of deaths given the constant state rate and the county population totals. Then, I calculated the counties’ observed mortality rate. Note that the rate parameter was constant across all counties, so no county had any more or less “problem” than another.Nonetheless, there was a large difference among the observed rates, randomly affecting county rank. The lowest mortality rate (rank = 1) was in Monroe County with 66.5 deaths per 10,000, and the highest mortality rate (rank = 99) was in Adams County with 114.2 deaths per 10,000. Adams County had over 1.7 times the mortality rate as that of Monroe County. Of course, that is nonsense since these are random variations around a constant rate.

In summary, even when the true baseline mortality risk is identical across counties, we still observe significant variation in actual mortality across regions due to random noise.  This is not to say that all studies looking at regional variation in quality are not worthwhile, but rather that there should be some caution when interpreting these results, particularly when there are small sample sizes in certain areas.



Prison Readmission Penalties

Written By: Jason Shafrin - Aug• 19•15

Medicare has adopted a system where hospitals that have large number of unplanned readmissions are penalized through lower compensation.  Previously, hospitals made more money when patients were re-admitted; now, these incentives are reduced although not completely eliminated.  Stuart Butler at The Health Care Blog has an interesting idea: apply a similar approach to prisons.



Imagine if prisons faced a readmissions penalty. Let’s say that if an unusually high number of released inmates from a particular prison were convicted and sent back to prison within three years then the prison’s budget would be cut and the bonuses and salary increases of senior prison staff trimmed back. Just as with hospitals, the first reaction would be to complain at the “unfairness” of being held liable for a released inmate’s return to crime. But after that the prison management would start to do a much better job than today in preparing inmates for re-entry into the community.

Could it work?  It certainly would provide some incentive to refocus prison from a place of punishment to a place of rehabilitation.  It may be worth a try.

Mid-week Links

Written By: Jason Shafrin - Aug• 18•15

Personalized medicine is the future. What is personalized medicine?

Written By: Jason Shafrin - Aug• 17•15

An concise article from Sean Khozin and Gideon Blumenthal (2015) try to explain.

“Personalized (or precision) medicine has been broadly described as the administration of the right therapy to the right patient at the right dose and intensity.”  However, this is a fairly broad definition.  Some more concrete examples of personalized medicine include:

Modern concepts in personalized medicine are defined by their focus on utilizing advances in technology for tailoring care. Blood typing to guide transfusions, monitoring the international normalized ratio for dosing warfarin, and predicting hypersensitivity reactions to the antiretroviral drug abacavir based on the presence of the HLA-B*5701 allele are well-known examples of a biomarker-driven approach to personalizing care in modern medicine.

The importance of personalized medicine has grown such that President Obama included $215 million for a Precision Medicine Initiative in the 2016 budget. Announced at the 2015 State of the Union address, the initiate aims to “pioneer a new model of patient-powered research that promises to accelerate biomedical discoveries and provide clinicians with new tools, knowledge, and therapies to select which treatments will work best for which patients.” The funding covers:

  • National Institute of Health: $130m to develop a national research cohort of a million or more volunteers which will include data rom medical records, lifestyle, patient reported outcomes, and personal device and biometric sensor data.
  • National Cancer Institute: $70m to scale up efforts to identify genomic drives in cancer and use this information to improve treatments.
  • Food and Drug Administration: $10m to acquire additional expertise and advance the development of high-quality databases to support regulatory structure needed to advance innovation in precision medicine.
  • Office of the National Coordinator for Health: $5m to develop interoperability standards and requirements to address privacy and data security issues with respect to NIH and other precision medicine initiatives.

Many of the advances in precision medicine have occurred in cancer patients. The authors conclude by saying:

Recent technological advances in development of targeted therapies using kinase inhibitors and monoclonal antibodies have paved the way for personalization of therapy in a growing segment of cancer patients…Given that most cancers may be caused by random mutations arising from stem cell divisions of normal self-renewing cells, application of our evolving understanding of cancer genomics to secondary prevention for detection of early oncogenic events is an important strategy for reducing the burden of cancer-related deaths that can augment personalization of care in the global fight against cancer.

In short, precision medicine is coming and innovation is happening fast.

Quality Adjusted Cost of Care Analysis

Written By: Jason Shafrin - Aug• 16•15

The health care industry should take into account outcomes when weighing the cost of new treatments and technologies and make quality-adjusted life years (QALYs) part of the equation, say the authors of a study in the April issue of Health Affairs.

This is the begining of an article in Managed Care Magazine that reviews a paper I published in Health Affairs with co-authors Darius Lakdawalla, Claudio Luccarelli, Sean Nicholson, Zeba Khan and Tomas Philipson. The rest of the article is here or the original piece is here.

The Evolution of Pay for Performance

Written By: Jason Shafrin - Aug• 14•15

Interesting comments from Mitzi Wasik, PharmD, BCPS, director of Pharmacy Medicare Programs at Aetna.


Quotation of the day: Weight

Written By: Jason Shafrin - Aug• 13•15

Vergon 6 was once filled with the super-dense substance known as dark matter, each pound of which weighs over ten thousand pounds.

On that light-hearted note, enjoy your weekend!