Author: Ann Marie Marciarille

The FDA's advisory panel on diabetes was divided this past summer on whether to recommend approval of a point of care diabetes testing diagnostic assay. Interestingly, the product at issue – by Avere – was not being scrutinized for problems with less accurate (than traditional lab based testing)  results.  Avere's point of care results were found to be as accurate as those produced by a lab.  It is unclear to me whether this is because Avere offers superior training to its clinical users or because the quality of American lab work has been compromised by severe lab staffing shortages. The larger concern appears to have been mostly with false positives on a diabetes diagnosis.  Yet, other countries that routinely use point of care diabetes testing do not report an epidemic of false positives from that testing. Indeed, in the U.K. there is some evidence that point of care diabetes testing is considered the norm for in-patient settings and of interest in out-patient if the business case can be made for the equipment's use.   

In fact, the larger issue is cost. Because it is administered by those clinically trained and not laboratory trained, point of care diabetes testing (depending upon the venue) can be considerably more expensive than lab based testing. But do these cost calculations factor in the cost of those suspected of diabetes, given a lab slip, pointed in the direction of the lab, and who never follow through?  Does the cost to their health factor in here?  What about the cost to patient health of doctors who never follow up on lab work that is ordered and completed, either through oversight or through lab reporting error?

I have to wonder if the utility and cost of point of care diagnostic diabetes testing is being measured against laboratory testing conducted in some perfect alternative universe none of us actually inhabit.

In July, the Missouri Health Insurance Rate Transparency Act (SB 865) was signed into law, making MIssouri the most recent state to establish (as of its 2018 implementation) a review process for health insurance rates advance filed with the MIssouri Department of Insurance. Yes, we have gone from being the "Surprise Me State" to being the "Show Me State." Only Oklahoma, Texas, and Wyoming continue on without health insurance rate review on the state level as Alabama has also only recently come into the fold. 

Missouri's rate review focuses on whether or not the proposed increases are reasonable. This will require significant data testing and analysis before producing a determination of reasonableness or unreasonableness. Then, the state will have the authority to ask the insurers to revise their submitted rates. Note that there will be no authority for MIssouri to force revision of the filed rates,  just the leverage of public scrutiny.  In this, Missouri's rate review is much like that of California's and a number of other states: the power of sunshine as a disinfectant is the true mechanism for rate review.

Let the rate filing and rate reviewing begin, complete with opportunities for public notice and comment. Those health insurers who sell into the Missouri market will need to change gears here as they were long accustomed to operation in a state that not only lacked adequate rate review, it required absolutely no advance filing of health insurance rates at all.  Time will tell if Missouri is prepared to be proactive on health insurance rate increases and not only, at best, reactive. 

 

 

Today is International Overdose Awareness Day. I know of no formal events acknowledging this in KCMO (though there are, apparently, events  scheduled elsewhere in Missouri). Nevertheless,  the incredible swath of death and destruction drug overdoses have cut in America’s young adult population is on my mind today.

Missouri has only recently made Naloxone (a/k/a Narcan, popularly known as  the drug overdose reversal drug) available in pharmacies via prescription or physician order. This law took effect only three days ago.

Some Missouri law enforcement and fire control agencies have chosen to supply Naloxone to their first responders and some have not. Of those who have, I have to wonder how long Naloxone will remain affordable for this purpose. The idea that even generic competition has not driven the price down because it is liability concerns that keep it rising so high — reported at $375 a shot in one locale — is surely something that is amenable to a legislative fix, if there is political will. 

Dan Margolies has put together an interesting and thought provoking article  on price variation in health care services. Yes, that knee replacement might be cheaper in St. Louis, in some absolute sense to that individual paying out of pocket for the service, than the knee replacement might be in Kansas City, though in-network and out-of network co-insurance obligations might hide that from the insured consumer. David Slusky, from K.U., explains this well in the article.

So, just how big a deal would it be for the uninsured to travel to St. Louis  for that knee replacement?  First, Missouri is a state with its most populous areas — St. Louis and Kansas City —  serving as border cities at two ends of the state separated by a several hour drive across the state.  Second, services like joint replacement are often followed by rehab stays. It can be uncomfortable, though not impossible, to travel to rehab in your city of origin when the actual surgery was several hours away.  And there is a good reason people want, whenever possible, to be near friends and relatives when in rehab.  It keeps morale up and good morale can contribute to better outcomes. Finally, the arrival of bundled payments for things like hip and knee replacement are probably going to make it harder, even for the out of pocket payment patient,  to cherry pick surgical services in one location and rehab services in another.  I predict it will not be long before it will not be possible to detach the surgery from the rehab, no matter the payment source.  

Though a majority of Americans still obtain health insurance through their employment, the trend is clear: health insurance is increasingly detached from employment.  For those still in the land of employer sponsored health insurance, the ritual is as familiar as it is confusing: march down to HR, get a whole lot of paper and online information pushed at you, and be prepared to choose (if, indeed, you have a choice) fairly quickly.  The selection process can be even more disorienting if only two options are offered: the first a reasonably comprehensive health insurance program and the second a high deductible plan twinned with a health savings account.  The latter is the darling of large employers, of late, and it is easy to see why using the offering as a mechanism to induce some cost-consciousness into enrollees may appeal to employers.

I  recently met a new faculty member at the university where I teach. This person is a licensed health professional in addition to being a professor.  This person volunteered that they had just completed their HR experience and I was curious to listen to them describe how bewildering the health insurance options were, this person having had limited personal exposure to high deductible health insurance in previous employment  And, yet, had this senior hire been practicing a health profession for the several decades that seemed likely, surely that person's patients had during that time had considerable exposure to high deductible health insurance.

This summer, when I queried a provider about her sense of the likelihood that a recommended scan would actually be authorized by my provider or whether we should also develop a Plan B for diagnosis and treatment, she replied "That is between you and your insurer."  How very odd.  I had just advised that if insurance would not authorize, I would likely not pay out of pocket for the scan, so it was her issue insofar as she would have to develop another recommended treatment plan. I kept quiet. But the world is changing. Yes, the relative thinness or richness of my insurance cannot help but be relevant to the treatment options presented.

For a product that has only been widely available to the public since the late 1990's, we sure have taken to hand sanitizers. Invented by Lupe Hernandez of Bakersfield, California in 1966, when she was studying to become an RN, the product has become ubiquitous of late. I don't remember a single "back to school" classroom supplies list where my children were not either reminded to pack their own hand sanitizer for daily use or asked to bring some as a classroom supplies contribution.  This week, I have noticed alcohol-based hand sanitizers of all sorts prominently displayed in advertising flyers for back to school supplies, so I suspect the trend continues.

Industry analysts track the rise of interest in and use of hand sanitizers to increased consumer awareness of the need for good hand hygiene in containing some communicable diseases and in increased media coverage of infectious disease outbreaks.  The problem with this is that even alcohol-based hand sanitizers are a poor second to good thorough hand washing. Hand washing, done right, means water, soap, and a good multi-directional scrubbing of sufficient duration. Anyone who has spent more than a moment in a public restroom knows how little hand washing, done right, occurs there. Perhaps it is this knowledge that the producers of alcohol based hand sanitizers tap into when promoting the product.

The problem with this is that there are risks and costs as well as benefits associated with significant alcohol based sanitizer use.  These I would describe as  two fold, raising two kinds of  questions about alcohol-based hand sanitizers.  First, what if they don't work as believed or hoped? And, second, what if they do more than believed?  The latter concerns both the fear that overuse (yet to be defined in the literature,  though it is easy to imagine exceeding usage of more than four or five times a day in many settings) of alcohol based sanitizers may harm the user, a particular concern for children or women who are pregnant and the concern that overuse of hand sanitizers may connect in some way to antibiotic resistance.  The former concerns the idea that use of these products is a substitute for hand washing, done right. 

As if all of this isn't troubling enough, there is the sense of false safety plentiful displays of alcohol-based hand sanitizer seems to imply. And complacency, particularly concerning the diseases alcohol based hand sanitizer cannot address as nearly as well as they might be addressed by hand washing, done right — such as c difficile — may be the greatest health threat of all.

With only a little dryness, I note in my now-published  paper: "Managing Our Microbial Mark: What We Can Learn About Pay for Performance From Ebola's Arrival At Our Shores" that how we became persuaded that alcohol-based hand sanitizer would save us from all communicable diseases in an increasingly small world, may be the greatest misperception aggressive marketing of the product has promoted.

As of late June of this year, the FDA has asked the antiseptic gels manufacturers to submit studies and data on the efficacy of these products as well as data and studies on risks to children and pregnant women.  

Let the hand wringing — I mean, hand washing — begin.

Austin Frakt's Upshot column in today's New York Times offers an interesting summary of some research looking at an important Calpers experiment with what he, elsewhere, calls horizontal reference pricing.  Reference pricing — what used to be called steering — has managed to make California's Calpers enrollees more price sensitive in provider selection for certain non-emergent procedures: knee and hip replacements, colonoscopy, arthroscopy, cataracts, etc.  Prices fell relatively quickly in response to this exercise of buyer power. Essentially, Calpers will fund a capped amount for certain procedures and no more.  The excess is then the elective responsibility of the patient.  Given the incredible variability in pricing for health services, this is a bold experiment. Sure enough,  the Calpers enrollees moved away from the high out of pocket cost providers and toward those clustered at or below the reference prices. That the prices providers charged were so responsive and so non-sticky tells us that price sensitivity can be induced in consumers relatively quickly and can be induced in providers by consumers relatively quickly, provided the services required are non-emergent and price transparency is both available to and comprehensible by by those patients involved.

In fact, the most common non-emergent services studied, it would appear, overwhelmingly target consumption by older Calpers enrollees. Some young people face joint replacement but many more older retirees do.  Similarly, colonoscopies are sometimes required by the young or youthful, but real turnout hits at the age of 50 in the United States.  So, it should be noted we are likely examining — at least in these studies — the price sensitivity of older Calpers enrollees, perhaps predominantly Calpers retirees.

As anyone who has ever spent time in communities with lots of  middle class retirees knows: many  middle class retirees have lots of time. In light of this, the fact that I have heard real estate agents code super-prepped for showing residential properties as "retiree owned" should come as no surprise.  

What about the rest of us?  Other insureds may lack the time, interest, and savvy to engage in the cost-quality tradeoff. This makes reference pricing the  retired middle class alternative to narrow networks, I suppose. 

 

KFF.org has an interesting article about a Morgan Hill, California hospital administrator retiree's quest for a non-surgical treatment for her osteoarthiritis.  She enters the land of stem cell research by locating a patient-funded stem cell treatment option on clinicaltrials.gov.  The rest of the article discusses the problem with non-disclosure of the significant patient costs, the phenomenon of funding health care needs on go fund me, and the general wide open nature of what can be posted as a clinical trial. These are all good points.

The part that caught my eye was when this  former retired hospital administrator was reported to be surprised that the research program she located was consumer-funded after reading this:

The company, which describes itself as “the premiere leader in the United States for regenerative medicine,” says it offers a “a    concierge approach to treatment,” which includes covering the cost of its patients’ hotel accommodations and a car service that   “will be waiting for you at the airport baggage claim when you arrive.”

A retired hospital administrator who thinks a car service and baggage assistance as well as coverage for hotel accommodations are standard operating procedure for a clinical trial strains credulity. I understand that certain clinical trials involve incentives to participants but surely anyone from within hospital-land knows what a money maker it can be to treat osteoarthritis in well off populations. And that treatment, even when surgical, increasingly moves to out-patient settings, every hospital knows a significant adjustment to balance sheets lies ahead.

 

 

 

 

 

 

Slowly and partially, we see information begin to appear in the press about the different enrollment procedures for traditional Medicare and Medicare Advantage.  These differences are important for product market definition in merger analysis, as I discussed in an earlier post on the difficulty in moving between Medicare Advantage and traditional Medicare augmented with Medicare Supplemental Insurance, but they are also significant for Medicare beneficiaries.  As the default option in a "seamless enrollment" exception to Medicare's general rule that a Medicare beneficiary must opt-in to Medicare Advantage, it turns out it is possible to be enrolled in Medicare Advantage without knowing you are (because you didn't read or understand your mail about Medicare Advantage), without having affirmatively chosen to be, and while believing that Medicare Advantage is irrelevant to you after believing you have affirmatively elected enrollment in traditional Medicare. The latter is most intriguing because, I suspect, it documents a Medicare beneficiary attempting to navigate the system of election and enrollment, as they broadly understand it, to enroll it without understanding that Medicare election and enrollment rules are malleable and can be distinctive to time and place.

One of the things about changes to choice architecture or defaults is the difficulty in addressing the  time lag  during which people's expectations of how the system will work as it is has previously clash with a very different new default rule.  This may be of particular concern when an older, more vulnerable population is involved, though there is ample evidence that Americans of all ages do not understand Medicare.  Lurking here, also, is the huge problem with the complexity of Medicare that leads many elders to rely on what I call Medicare "urban legends." Some of these urban legends — take, for example, the idea that Medicare funds long term care beyond a very limited benefit — have proven very sticky indeed.

Here, we have commercial insurers Medicare-authorized to seamlessly transition some of their enrollees, at the point of Medicare eligibility, to the Medicare plan that most closely matches their current insurance enrollment, presumably because their choices in commercial insurance will likely mimic their preferences in Medicare enrollment and to save any of those involved from missing Medicare enrollment timelines and deadlines.

What is interesting about this is the premise, that a choice in a certain kind of commercial insurance product signals an interest in a particular kind of managed care Medicare insurance product, appears to be based on a fascinating understanding of consumer choice in health insurance products. Most insureds do not choose their own health insurance, in the purest sense, but rather choose among a very limited range (or no range) of options actually chosen for them by their employer. If the purchase is through one of the state health insurance exchanges, choice is among the plans open for enrollment in their geographic area within the exchange, often a quite limited slate of plans.  

Very few Americans are exposed to the kind of choice between traditional Medicare (with or without Medicare Supplemental Insurance) and a Medicare Advantage product — the difference between, for example, broad choice of provider and a plan based on narrow networks.  Very little commercial insurance offers the kind of wide open provider options that are found in traditional Medicare.  Whether this is Medicare's glory or its bane, those over 65 years of age and those approaching 65 years of age are well aware that their health care access and choice may well improve upon enrollment in traditional Medicare, provided they have the funds to take advantage of it.  This may be why the evidence shows that those with higher incomes and assets naturally gravitate to traditional Medicare with Medicare Advantage the choice of the lower income, specifically those who cannot afford the Medicare Supplemental Insurance needed to wraparound traditional Medicare's limited coverage. 

I have to wonder if the surfacing of changed enrollment defaults for Medicare Advantage isn't because of these mis-matched assumptions about consumer choice and who really elects what in Medicare. After all, Medicaid beneficiaries, overwhelmingly low income individuals, have long had little choice about Medicaid managed care.

Health care antitrust rarely makes front page news.  The recent surfacing of rumors of possible governmental challenges to a one or more of the pending health insurer mergers may offer a teachable moment, even if it is a below the fold moment.  The Aetna-Humana deal is mostly about consolidation in the market for commercial Medicare plans, after all. It offers an opportunity to consider how all insurers are not the same, how Medicare is changing, and how Medicare's multiple points of entry prove surprisingly inflexible to beneficiaries dissatisfied with their current choices.

The Aetna-Humana deal would combine our third and fifth biggest insurers and make any post-merger entity the largest provider of Medicare Advantage plans in the country. Both proponents of the deal and opponents concede less head-to-head competition in the Medicare Advantage marketplace would result.  And so we have it, whipsawed between the pro-deal "bigger is more efficient" and the anti-deal "bigger often means extracting monopoly rents" kinds of arguments, it is hard to know exactly what these mega-mergers would mean for consumers and the insured.  Part of this is because this level of concentration in health insurance markets is virtually unheard of. It is also partly because a more sophisticated understanding of who enrolls in which insurance products and why informs the view that different insurance products may actually help to define different insurance markets and those markets may have their own competitive dynamics and merger effects.

The consideration of Medicare Advantage as a distinct market from traditional Medicare is telling.  Although it is worth considering the interrelationship between the two markets, it is also true that Medicare Advantage and traditional Medicare offer very different products with regard to price point, scope of benefits, and choice of provider.  Medicare Advantage is a relatively tightly managed program, dominated by a few health insurers who can muster significant scale.  Traditional Medicare is far more diffuse, with a much broader universe of providers.

Analyzing Medicare as if it were a monolith in health care markets (as an insurer or payer) can be quite deceptive, particularly when comparing the universe of providers available in each kind of plan, but there are many other points of contrast. The interesting and untested premise behind an analysis highlighting this distinction is one that actually considers how many Medicare beneficiaries actually gravitate between the two kinds of plans (very few, it would seem) and how the structural organization of  traditional Medicare's late enrollment penalties or exclusions, particularly as applied to Medicare Supplemental Insurance ("Medigap"), can make such migration impossible for those needing Medigap's wraparound insurance. Medicare beneficiaries in some markets may not be able, practically, to vote with their feet to defeat any potential post-merger price increases by adopting a different model of Medicare. They are, practically speaking, locked in.

I am heartened to see hints of even an inkling of the infusion of knowledge of the  practical organization of the market (how does this really work for Medicare beneficiaries) into a theoretical analysis of competitive effects that does not match the actual lived experience of Medicare beneficiaries.