What is an Accountable Care Organization (ACO)?

An Accountable Care Organization (ACO) is a group of health care providers (doctors, hospitals, etc.) that work together to arrange all medical care for their patients. The general idea behind ACOs is that by establishing a continuum of care among providers who have incentives to focus on primary and preventive care, costs can be contained.

By allowing for care coordination and evidence-based care, healthcare systems and health professional performance will achieve significant quality improvements. Promoting preventive medicine in order to avoid costly acute episodes, especially as they relate to chronic disease, elder care, and within health disparity communities, will lead to better health outcomes for patients.

What’s wrong with healthcare today?

The problem with healthcare today is that patients are getting each part of their healthcare separately. Patients see primary care physicians for basic treatment, specialists for specific care, hospitals for tests, etc. An ACO brings all the components in the healthcare chain together. Imagine the Cleveland Clinic or the Mayo Clinic where care is highly coordinated. In an ACO, if you need a specialist, lab work or medication, it all comes from the same treatment team. An ACO also gives patients more time with doctors and less shuffling between offices filling out forms. By design, an ACO provides more efficient healthcare, is less prone to errors, and controls costs better than the traditional system.

And there is definitely an emphasis on cost control. ACOs will fundamentally change how doctors and hospitals get paid. ACOs will make providers jointly accountable for the health of their patients, giving them strong incentives to cooperate and save money by avoiding unnecessary tests and procedures.

For some, however, the picture isn’t all rosy. In a policy paper published by the Heritage Foundation, Why Accountable Care Organizations Won’t Deliver Better Health Care — and Market Innovation Will, Rita Numerof, Ph.D. argues that ACOs will most likely exacerbate the very problems they set out to fix, concentrating power in just a few organizations, allowing them to become “too large to fail” [2]:

Such a system undermines competition and entrepreneurship—the bedrock of innovation and job growth in this country. There is no evidence that supports the use of untested, complex organizational structures to improve quality of care and reduce costs. Creating incentives that focus on achieving higher quality of care, not quantity of medical procedures; providing choices to patients; and allowing real competition among health insurance providers is what will truly transform the health care system.

Judy Feder and David M. Cutler, senior fellows at the Center for American Progress, see things differently. In their report Achieving Accountable and Affordable Care, Key Health Policy Choices to Move the Health Care System Forward, they discuss how to deliver better healthcare quality at lower costs by promoting physician-led organizations [3]:

The Affordable Care Act highlights the potential role that physician-led organizations can play in reducing the unnecessary and costly use of the hospital through better primary care and care management. By mobilizing their skills and taking charge, physicians can call the shots in distributing the substantial savings that can result. Physicians can also encourage hospitals to compete for, rather than count on, their referrals, and thereby promote better quality at lower costs.

In markets with a single dominant hospital, however, it may be difficult to foster this competition. But forming ACOs should not become an excuse for promoting hospital consolidation by encouraging hospitals to capture physicians and foreclose rival hospitals. If physicians are able to take the lead in establishing care management organizations, then they will be far better positioned to capture savings than if hospitals are in control.

To encourage physicians to actually take the lead, ACO quality performance benchmarks and rewards for good care should emphasize health care delivery changes that depend on physician engagement in better care. Reducing preventable hospital admissions or readmissions should be a key quality metric, emphasizing the avoidance of ambulatory-care-sensitive use of hospitals in emergency settings or as an inpatient.

Will new ACO regulations help with healthcare costs?

Although some people believe that bringing doctors and hospitals together economically will make them too powerful, ACOs stand to dramatically reduce the number of tests that patients have to take, amounting to hundreds of millions of dollars in savings.

Medicare’s traditional fee-for-service payment system pays doctors and hospitals by the test and procedure. ACOs wouldn’t do away with fee-for-service but would create savings incentives by offering bonuses when providers keep costs down and meet specific quality benchmarks. The focus will be on prevention and careful management of patients with chronic diseases.

If patients show they like this new system, we could see a fundamental change in the American healthcare system.

References

1. Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations. Office of the Federal Register. Accessed 2011 Oct 25.
2. Numerof, R. Why Accountable Care Organizations Won’t Deliver Better Health Care—and Market Innovation Will. The Heritage Foundation. 2011 Apr 18.
3. Feder J and Cutler D. Achieving Accountable and Affordable CareKey Health Policy Choices to Move the Health Care System Forward. Center for American Progress. 2010 Dec.

Andrew Sussman, M.D., president, MinuteClinic and senior vice president/associate chief medical officer, CVS Caremark, said [1]:

As we continue to expand the number of clinics and services we offer in the Hoosier state, MinuteClinic shares a common goal with IU Health to make basic medical care more accessible to patients in locations near where they live and work. We are excited to be collaborating with IU Health as we mark our eleventh clinical affiliation with a regional health system in the United States.

MinuteClinic and IU Health will jointly commit to adhering to best practice, evidence-based care to improve outcomes of patients with chronic conditions such as diabetes, asthma, heart failure, and others. Under the agreement, IU Health physicians will serve as medical directors for 19 MinuteClinic locations in Indiana, including 17 in the Indianapolis area, one in Bloomington and one in West Lafayette.

MinuteClinic and IU Health will collaborate on patient education and disease management initiatives. For example, the effective management of many conditions requires good adherence to medication regimens. MinuteClinic personnel will help provide patient education and work on strategies for improving patients’ adherence to prescribed treatments. IU Health will accept patients who need a level of care that is not provided at MinuteClinic. Each organization will inform patients of the services the other offers.

In addition, MinuteClinic and IU Health will work toward fully integrating their electronic medical record systems to streamline communication around all aspects of each individual’s care. With patient permission, MinuteClinic will share medical histories and visit summaries with other IU Health locations in Indiana. In the meantime, MinuteClinic will continue its standard practice of sending patient visit summaries to primary care providers via fax or mail, typically within 24 hours.

John F. Fitzgerald, MD, chief executive officer, IU Health Physicians said [1]:

This partnership supports our mission of improving and protecting the health of our patients and Indiana communities. Through our collaboration with MinuteClinic, we will complement the role of primary care physicians by offering another convenient access point to high quality, affordable medical care during off-hours and weekends.

In January 2011, Clarian Health became Indiana University Health. Indiana University Health (IU Health) is dedicated to providing a unified standard of preeminent, patient-centered care; IU Health includes ownership or affiliation with more than 20 hospitals and health centers throughout Indiana. For the 14th consecutive year, IU Health-Indiana University School of Medicine specialty programs have ranked among the nation’s top programs in U.S. News Media & World Report’s Best Hospital rankings.

CVS Caremark MinuteClinic launched the first retail healthcare centers in the United States in 2000 and is the first provider to establish a national presence, with nearly 600 locations in 26 states and the District of Columbia. Since April 2010, MinuteClinic has established partnerships with 11 health organizations, including:

• Cleveland Clinic (Northern Ohio and South Florida)
• Ohio Health (Central Ohio)
• Henry Ford Health System (Detroit)
• Advocate Health Care (Chicagoland and central Illinois)
• Allina Hospitals & Clinics (Minnesota and Western Wisconsin)
• Inova Health System (Northern Virginia)
• Catholic Healthcare West (Phoenix)
• St. Rose Dominican (Las Vegas)
• St. Vincent’s (Jacksonville)

By creating a healthcare delivery model that responds to consumer demand, MinuteClinic makes access to high-quality medical treatment easier for more Americans. Nationally, the company has generated more than 10 million patient visits, with a 95% customer satisfaction rating.

References

1. CVS Caremark MinuteClinic and Indiana University Health Announce Clinical Affiliation. IU Health Newsroom. 2011 Aug 11.

For this edition of Grand Rounds, Vol. 7 No. 11, we’re focusing on the impact of healthcare reform: what are the changes to healthcare delivery, utilization, quality, costs (either as a provider or a patient) and outcomes. After all, these changes affect everyone, whether you’re a patient, a healthcare provider or a biomedical researcher.

President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law on March 23rd, 2010. The new law puts in place comprehensive health insurance reforms that will roll out over the next eight years, with most changes taking place by 2014.

The PPACA incorporates two strategies for expanding healthcare coverage. The first strategy for expanding coverage is a mandate for all individuals to purchase insurance, paired with the creation of state-based insurance “exchanges” and subsidies to help people whose incomes are less than 400% of the federal poverty level to purchase healthcare coverage from private insurers [1]. The second strategy for expanding coverage is an expansion of Medicaid, underwritten by the federal government, to cover all adults whose family income is less than 133% of the federal poverty level (children of such families are already eligible for public coverage) [1].

Healthcare reform in 2010

For 2010, several provisions of the Patient Protection and Affordable Care Act (PPACA) were put into place, including new consumer protections (such as prohibiting the denial of coverage to children based on pre-existing conditions and the elimination of lifetime limits on insurance coverage), the improvement of quality and lowering of costs (such as free preventive care and small business health insurance tax credits), and the increase in access to affordable care (such as the extension of coverage for young adults and holding insurance companies accountable for unreasonable rate hikes) [2].

There has been much disagreement between Democrats and Republicans over the PPACA. Indeed, Republicans in both the House and Senate unanimously voted against it. With Republicans retaking the majority in the House of Representatives last month, many people are asking what it means for healthcare reform.

Dr. Gavin Yamey, M.D., lead of the Evidence-to-Policy Initiative at the UCSF Global Health Group, wrote a guest post at the Public Library of Science (PLoS) Medicine community blog, Speaking of Medicine to address the question Can the Republicans Repeal Health Reform? Although he doesn’t think full-scale repeal legislation is likely, he details three other ways that Republicans could impede the PPACA.

Dr. Maggie Mahar, Ph.D., guest posting at KevinMD, agrees that the PPACA won’t be repealed. Nonetheless, she addresses the possibility of repeal, asking if health care reform is killed, what happens?

Public support for healthcare reform faltered over the summer. Shadowfax, an ER physician and administrator, thinks that there may be movement towards increased public support for the PPACA. He reports on the results of two recent polls at Movin’ Meat indicating that the health care reform law is gaining public support.

The fight to control healthcare costs has been going on for decades. In 1997, Medicare payment cuts were scheduled in an attempt to tie Medicare rates to overall economic growth. However, since 1997, Congress has passed legislation to avert every single cut. Why? Because they understand that cuts in compensation for care would reduce access to care (we’re not sure why they didn’t consider that back in 1997!). The latest Medicare payment cut was scheduled for this month but was postponed yet again. Henry Stern at InsureBlog announces that the (doc) fix is in … or is it?

Expansion of Medicaid is one of the ways in which the PPACA will increase the insured population in the U.S. over the next few years. Although Medicaid is jointly funded by federal and state dollars, it is up to the states to implement the program and decide ways to restrain expenses. With states currently experiencing widespread budget issues, Amy O’Connor at LillyPad is thinking about cost containment in Medicaid.

Healthcare reform in 2011

In 2011, big changes are in store for Medicare recipients. There are four major changes affecting beneficiaries, including [3]:

• Prescription drug discounts
• Free preventive care for seniors
• Improved care for seniors after they leave the hospital
• Increased access to services at home and in the community

Although controlling costs is a primary objective of the Patient Protection and Affordable Care Act (PPACA), health reform shouldn’t mean an end to compassionate care. Indeed, Julie Rosen, executive director of the Schwartz Center for Compassionate Healthcare reports at Bedside Manner that patients and doctors strongly support compassionate healthcare.

In addition, the new law addresses overpayments to big insurance companies and strengthens medicare advantage. To ensure that premium dollars are spent primarily on healthcare, the PPACA generally requires that at least 85% of all premium dollars collected by insurance companies for large employer plans are spent on healthcare services and healthcare quality improvement. Bob Doherty at the ACP Advocate Blog thinks that insurance companies spending more money on patients is a reason for thanksgiving.

And how will these changes affect healthcare premiums?

Leading Republicans in Congress are blaming the PPACA for double-digit rate increases being sought by insurance companies in several states. However, healthcare experts and health insurance companies mostly blame rising medical costs; the new benefits mandated by the PPACA are responsible for only a small portion of the premium increases. Dr. Michael Bihari, M.D., reports at the Health Insurance Blog that GOP leaders exaggerate the impact of health reform on premium increases.

What about the pharmaceutical industry?

The PPACA will have a number of direct and indirect effects on big pharma. Starting in 2011, an annual tax could potentially affect research and development through the availability of new grants and tax credits [4]. Moreover, comparative effectiveness research activities initiated under the PPACA, amendments related to fraud and abuse, transparency initiatives and a new regulatory pathway for biosimilar biological products will all have significant impact on pharmaceutical manufacturers [4].

Dr. Sally Church, Ph.D., shares her perspective on the PPACA impact on pharma marketing at the Pharma Strategy Blog, describing how ObamaCare healthcare reform will impact Pharma.

At Pharmalot, Ed Silverman wonders what healthcare reform will mean to prescription drug pricing. He discusses a recent U.S. Congressional Budget Office (CBO) analysis of the PPACA and the Health Care and Education Reconciliation Act of 2010 detailing how healthcare reform will hit drug prices.

One of the expressed aims of healthcare reform is cost containment. Dr. Philip Hickey, Ph.D., at Behaviorism and Mental Health suggests that the pharmaceutical industry is actively working to increase expenditures in this area, and discusses the relationship between the psychiatrists, the drug reps, and the green, green dollars.

Healthcare reform in 2012

In 2012, the Patient Protection and Affordable Care Act (PPACA) will further improve quality and lower costs by linking payment to quality outcomes, encouraging integrated health systems, reducing paperwork and administrative costs and understanding and fighting health disparities [5]. In addition, new, voluntary options for long-term care insurance will increase access to affordable care for adults who become disabled [5].

At the Covert Rationing Blog, Dr. Rich Fogoros, M.D., provides more evidence that the health insurers will become public utilities, suggesting that the American health insurance industry supported healthcare reform because the plan provided them an exit strategy from a now-defunct business model.

Steve Benen at Political Animal has evidence suggesting otherwise, claiming that insurers spent heavily to kill health care reform.

Healthcare reform in 2013

In 2013, the Patient Protection and Affordable Care Act (PPACA) provides new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost, increased Medicaid payments for primary care doctors, expanded authority to “bundle” payments (under payment bundling, hospitals, doctors and providers are paid a flat rate for an episode of care rather than the current fragmented system where each service or test or bundles of items or services are billed separately to Medicare) and additional funding for the children’s health insurance program [6].

The PPACA calls for removing financial barriers for many preventive services (see years 2010, 2011 and 2013) and analysts predict it will likely create a greater demand for these services and give physicians a better opportunity to provide preventive care [7].

The most important part of preventive healthcare is maintaining good health habits, including proper nutrition, exercise, weight control, sleep and management of stress. At DrPullen.com, Brooke Douglas, R.D., C.D., provides 8 great tips to change habits.

Preventive care refers to measures taken to identify medical problems early and treat them more cheaply and effectively than if they were addressed later once symptoms appear. Guest posting at KevinMD, Dr. Lucy Hornstein, M.D. argues that preventive care as a cost saving measure is a fallacy.

Fran Melmed gets worked up when people call efforts to improve employee health a “program”. Writing at free-range communication, Fran suggests we stop calling it a wellness program.

Healthcare reform in 2014

In 2014, several provisions of the Patient Protection and Affordable Care Act (PPACA) impart new consumer protections (such as prohibiting discrimination due to pre-existing conditions or gender), improve quality and lower costs (such as establishing health insurance exchanges), and increase access to affordable care (such as increasing access to Medicaid) [8].

One of the purposes of state-based insurance “exchanges” is to offer consumers a choice of health plans and focus competition on price [9]. However, over 50% of Americans get their health insurance through their employers. Louise Norris at Colorado Health Insurance Insider suggests that most Americans don’t get to make their own health insurance choices.

Healthcare reform in 2015

In 2015, a provision of the Patient Protection and Affordable Care Act (PPACA) will tie physician payments to the quality of care they provide. Physicians who provide a higher value of care will receive higher payments than those who provide less value [10].

Certainly a lot of changes in five years!

And how did we get here? David Williams, writing at Health Business Blog, suggests that all roads lead to health reform. In particular, the defense budget.

The recent presidential commission to reduce the deficit also focused on domestic and military spending programs. Ryan DuBosar at the ACP Internist reflects on the report; he finds the deficit plan intriguing, despite the lack of votes.

Conclusion

That concludes this edition of Grand Rounds: the Impact of Healthcare Reform. It’s been great hosting Grand Rounds for the second time (the first was the 2008 Grand Rounds Holiday Edition). I’d like to thank everyone that submitted articles.

All Patient Protection and Affordable Care Act (PPACA) provisions described can be found at HealthCare.gov. For a detailed implementation timeline of the PPACA, see Timeline of the Affordable Care Act.

The next edition of Grand Rounds, Vol. 7 No. 12, is being hosted by Dr. John Mandrola, M.D. at Dr John M on December 14th.

References

1. Sommers and Epstein. Medicaid expansion–the soft underbelly of health care reform? N Engl J Med. 2010 Nov 25;363(22):2085-7.
   View abstract
2. Provisions of the Affordable Care Act, by Year: 2010. HeathCare.gov. Accessed 2010 Dec 5.
3. Provisions of the Affordable Care Act, by Year: 2011. HeathCare.gov. Accessed 2010 Dec 5.
4. Healthcare Reform Law: Impact on Pharmaceutical Manufacturers. Morgan Lewis. 2010 Apr 15.
5. Provisions of the Affordable Care Act, by Year: 2012. HeathCare.gov. Accessed 2010 Dec 5.
6. Provisions of the Affordable Care Act, by Year: 2013. HeathCare.gov. Accessed 2010 Dec 5.
7. Health Care Reform Law Will Increase Demand for Preventive Services, Say Experts. American Academy of Family Physicians (AAFP) News Now. 2010 Jul 28.
8. Provisions of the Affordable Care Act, by Year: 2014. HeathCare.gov. Accessed 2010 Dec 5.
9. Explaining Health Care Reform: What are Health insurance Exchanges? Focus on Health Reform. The Henry J. Kaiser Family Foundation. 2009 May.
10. Provisions of the Affordable Care Act, by Year: 2015. HeathCare.gov. Accessed 2010 Dec 5.

The County Health Rankings

The County Health Rankings identify the healthiest and least healthy counties within every state in the nation. Health outcomes in the County Health Rankings represent how healthy a county is. Two types of health outcomes are measured: how long people live (mortality) and how healthy people feel while alive (morbidity).

Counties are ranked on four key factors that affect health: health behaviors, clinical care, social and economic, and physical environment factors. Each of these factors is based on several measures, including the percentage of adults that smoke, the percentage of adults that are obese, the percentage of a county’s population that binge drinks, access to primary care providers, rates of high school graduation, rates of violent crime, air pollution levels, liquor store density, unemployment rates and number of children living in poverty. A fifth set of factors that influence health (genetics and biology) is not included in the Rankings. Although other studies have ranked states based on health factors, this is the first study where researchers have examined multiple factors that affect health in each county in all 50 states.

Each state snapshot includes color-coded maps for health outcomes and health factors, comparing each county’s overall health with other counties. In addition, a detailed list of rankings for health outcomes and health factors is also provided. A summary report (PDF) for each state is available for download.

Researchers used the latest data available for each county, ranging from 2000 to 2008, to develop the Rankings. The data collection process gathered information from thirteen national data sources.

National comparisons and trends

When the 50 healthiest counties (one from every state) are compared with the 50 least healthy counties, several striking trends emerge:

• Healthier counties are urban/suburban, whereas least healthy counties are mostly rural. While 48% of the healthiest counties are urban or suburban counties, 84% of the least health counties are rural.
• The least healthy counties have significantly higher rates of premature death — 2.5 times higher than the healthiest counties.
• People living in the least healthy counties reporting being in significantly poorer health — the rate of people who report being in fair or poor health is 2.1 times higher than people in the healthiest counties.
• People living in the least healthy counties are much more likely to smoke; over 26%, compared to only 16% in the healthiest counties.
• People living in the least healthy counties are 60% more likely to be admitted to the hospital for preventable conditions — a sign of poor outpatient and primary care.
• The least healthy counties have higher rates of poverty, with 30% of children living in poverty — over three times higher than the rate in the healthiest counties (9%).
• The 50 least healthy counties have fewer places where people can find healthy food. Only 33% of zip codes in the least healthy counties have at least one grocery store, compared to almost half (47%) of zip codes in the healthiest counties.

Patrick Remington, M.D., M.P.H., Associate Dean for Public Health at the University of Wisconsin School of Medicine and Public Health said [1]:

For the first time, people have a tool to help identify what is making people in every county unhealthy. We hope this kind of check-up will mobilize community leaders to take action and invest in programs and policy changes that make their counties healthier places to live.

The Rankings demonstrate that much of what influences an individual’s health happens outside the doctor’s office. To see how the county you live in ranks, visit www.countyhealthrankings.org.

References

1. How Healthy Is Your County? New County Health Rankings Give First County-by-County Snapshot of Health in Each State. County Health Rankings press release. 2010 Feb 17.

The St. Vincent de Paul (SVDP) Charitable Pharmacy in Cincinnati, Ohio, announced last week that it surpassed $5.1 million dollars worth of medication dispensed to help people in need since it opened in September 2006 [1]. The Charitable Pharmacy is the only pharmacy in southwest Ohio that provides free, professional pharmaceutical care to people in need.

The Charitable Pharmacy was established in 2005 in partnership with the Academy of Medicine of Cincinnati as a pilot project designed to provide free, professional pharmaceutical care to those unable to pay for discounted medication, those who don’t qualify for other programs, and those who simply need help navigating the options available for prescription medication. According to Liz Carter, Executive Director, Society of St. Vincent de Paul [1]:

There are more than 270,000 people in Greater Cincinnati without health insurance. One out of every 10 households locally has a family member who forgoes prescription medication in order to afford food, clothing or housing. We see individuals from every corner of our community who are suffering from illnesses but have no way to afford medication. Our pharmacy is a last resort for them.

The Charitable Pharmacy carefully screens people that need help, including the homeless, people who have lost their jobs, the working poor who cannot afford prescription insurance or pharmacy co-pays, and people that need temporary assistance as they try to get coverage, qualify for other assistance programs or reach a gap in Medicare coverage.

The Society of St. Vincent de Paul in Cincinnati is a non-profit organization that works personally with those in need, regardless of race or creed, to bridge the spiritual, emotional and material gaps in their lives through home visits provided by neighborhood-based volunteer groups, as well as groundbreaking initiatives like the Charitable Pharmacy.

Almost all of the medication at the Charitable Pharmacy is donated by twenty private physician’s practices, Skilled Care, KeySource Medical, the Ohio Drug Repository Program, and drugmakers Astra Zeneca and Novartis.

In 2010, the St. Vincent de Paul Charitable Pharmacy in Cincinnati anticipates providing more than 25,000 prescriptions valued at over $2 million dollars, and is is in need of financial donations, donations of sample medication form physician offices and pharmaceuticals from long-term care pharmacies. For more information, see http://www.SVDPcincinnati.org.

References

1. St. Vincent de Paul Charitable Pharmacy Announces Major Milestone: $5.1 Million in Prescription Medication Dispensed. Saint Vincent de Paul, Cincinnati. 2010 Feb 17.

As you or perhaps your parents get older, would you want to be at home when recovering from an illness? Would the choice between home rehabilitation or visits to a day hospital make a difference to your recovery and health? Which is cheaper for the healthcare services? A recent study published in the journal Health Technology Assessment (HTA) shows that home-based care in the United Kingdom is no worse than attendance at a day hospital for older adults [1].

Under any nationally funded healthcare system, there is always an enormous pressure on resources. As such, it is vital to explore the outcomes of different types of care, keeping in mind the cost-effectiveness. Rehabilitation after illness is a vital part of healthcare, but is enormously costly. As the U.S. and European populations age, there is increasing pressure on the health services to deliver cost-effective rehabilitation for older patients [2]. Older patients often present with more complications following illness and take longer to recover, so this push to reduce costs must always take into account how well each intervention or mode of care works. With the emphasis on “quality of life” in healthcare (that simply being physically “healthy” is not the sole goal of healthcare, but that the experienced quality of ones life is highly important), rehabilitation care is further emphasised.

U.K. researchers conducted a randomised controlled trial, where patients were randomised to receive either day hospital care or home-based rehabilitation [1]. Eighty-nine older adults receiving rehabilitation care for a range of health conditions took part in the study; 90% of the participants were over 70 years of age. Measures of daily living activities (normal daily life tasks eg bathing, preparing food), quality of life, anxiety, depression and general health were taken. The scientists also collected data about health outcome and number of hospital admissions. The patients and their carers (informal carers in this case, such as spouse or friends) were followed for up to 12 months. Data were collected at 3 months, 6 months and 12 months following the start of the rehabilitation program. The home-based rehabilitation program and the day hospital both included services such as physiotherapy and occupational therapy, stroke rehabilitation and falls assessment — the key difference between the two types of care then being the venue.

Results of both patient outcomes and carer wellbeing showed that home-based rehabilitation “confers no particular disadvantage for patients and carers.” However, in this case, the cost of the home-based rehabilitation provision was not significantly different to that of day hospital rehabilitation. This suggests that although home-based care may appear on the surface to be more cost-effective, this is not always the case. This study then has important implications practice, most importantly perhaps is that rehabilitation providers must consider the local needs and characteristics of their population when providing care. Indeed, given there is no difference found in outcomes or costs, patients could potentially be given the choice. Local issues are clearly important, for example in a rural community home-based care may be vital if patients are restricted in access to transport.

This study did conclude that the two types of care are equivalent: rather they explored non-inferiority. This just establishes that one treatment is not worse than the other. This does not mean the two types of care are equivalent, indeed, this is impossible to show as there will always be differences [4]. Non-inferiority trials tell us if there are differences that are clinically important, i.e. if the treatment results in worse outcomes.

This study illustrates some of the complex issues around choice of services to be delivered through healthcare systems. As healthcare systems are increasingly scrutinised and reforms are planned, it is important to have a grasp of some of these issues to understand debates. On an individual level, this study shows that despite personal preferences and preconceived ideas, care in a day hospital is not superior to care within the home. Evaluating evidence may lead you then to choose a different type of care.

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References

1. Parker et al. Rehabilitation of older patients: day hospital compared with rehabilitation at home. A randomised controlled trial. Health Technol Assess. 2009 Aug;13(39):1-143, iii-iv.
   View abstract
2. Miller DK. Effectiveness of acute rehabilitation services in geriatric evaluation and management units. Clin Geriatr Med. 2000 Nov;16(4):775-82.
   View abstract
3. Pang J Jr. Partial hospitalization. An alternative to inpatient care. Psychiatr Clin North Am. 1985 Sep;8(3):587-95.
   View abstract
4. Snapinn SM. Noninferiority trials. Curr Control Trials Cardiovasc Med. 2000;1(1):19-21.
   View abstract

Insured and uninsured

The most recent Spectrum Health Value Study data was used to compare answers from insured and uninsured respondents. As Congress recesses for the month of August to talk with their constituents about the current healthcare legislation under consideration in the U.S. House and Senate, these data offer a glimpse into what insured and uninsured Americans value in healthcare.

The U.S. Census Bureau estimates from 2006 identified 47 million uninsured people. The Spectrum Health Value Study found that 78% of all respondents had insurance coverage, which if extrapolated to the entire U.S. population, equates to 51.2 million uninsured people. This is an increase of 9% (4.2 million people) over the past three years.

Household income showed a clear partitioning of insured vs. uninsured. A significantly greater percentage of respondents were uninsured at household incomes up to $34,499. At incomes of $35,000 and higher, a significantly greater percentage of respondents were insured.

Not surprisingly, the insured are more likely to have ever used most health care products, programs and services than the uninsured. However, the study identified four services the uninsured are statistically more likely to have used than the insured:

• Family social/health services
• Nutrition services
• Substance abuse services
• Health relief services (such as during a national disaster)

Compared to the insured, a statistically greater percentage of uninsured respondents use several healthcare services on a regular basis:

• Family social/health services
• Nutrition services
• Emergency care services
• Substance abuse services

The sharpest differences were observed in Physician and Dentist services, with twice as many insured using those services as uninsured. Just under one-third (32%) of uninsured respondents reported using no services at all on a regular basis compared to 12% of insured.

Economic downturn effects on healthcare

The study also evaluated how the economic downturn has affected regular use of healthcare products and services. Between January 2009 and May 2009 the uninsured have neither increased or decreased their regular use of medical services. In contrast, the insured have reduced their use of prescription drugs, over-the-counter drugs, dentist services and personal health products. Concomitantly, there has been an increase in the use of mental health services, psychiatric services, family/social health services, substance abuse services and health relief services among the insured.

Chronic illnesses

Overall, approximately 60% of the respondents reported a chronic illness in the past year. The most frequent reported chronic illness of both the insured and uninsured was allergy. The uninsured reported a significantly greater percentage of three illnesses: hypertension, thyroid disease and cancer (any form).

Other notable points:

• American’s are divided when it comes to satisfaction with health insurance coverage; just over half of those surveyed (59%) indicate a high level of satisfaction. At 27%, African-Americans were more likely to indicate that they were extremely satisfied with their health insurance than were whites (16%).
• The most commonly cited health products, programs or services ever used by both the insured and uninsured were prescription drugs and over the counter drugs.
• Although uninsured respondents reported that they believe insurance is “absolutely essential,” they still lack coverage.

Spectrum will continue to update the study findings each quarter. You can access the full report at the Spectrum Health Value Study web site.

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References

1. The Insured Versus the Uninsured: Data from the Spectrum Health Value Study July 2009. Spectrum. Accessed 2009 May 18.

The Institute of Medicine Roundtable on Evidence-Based Medicine brings together leaders from key healthcare sectors to accelerate the collaborative work necessary to drive improvements in the effectiveness and efficiency of medical care. According to a Roundtable issue brief published earlier this year [2]:

While the U.S. has the highest per capita spending on health care of any industrialized nation, health outcomes lag those achieved elsewhere. The increasing costs of care are reducing access to care and constitute an ever heavier burden on employers and consumers. To address both the costs and the performance of the health care system, greater consensus will be required on what constitutes value in health care, and how to measure and increase that value.

Indeed, value is a relative term — what’s valuable to me may not be valuable to you. With policymakers looking to overhaul the U.S. healthcare system, one way to quantify and compare the value of health programs, products and services is to ask consumers and taxpayers.

In the medical and healthcare industry, the U.S. government has assigned standard industry classification (SIC) codes to 27 programs, products and services for measuring economic activity in various sectors of the economy. The Spectrum Health Value Study, a national, online survey to ask Americans what they value when it comes to medical and healthcare products and services, is using those 27 SIC codes to identify the relative importance of each program, product or service. Additionally, the study aims to gain a better understanding of consumer use of each product and/or service, and to identify key segments of healthcare consumers.

Each quarter, beginning in January 2009, Spectrum, a Washington DC-based public relations and public affairs firm, will interview 1,000 repondents and ask them to identify from the 27 healthcare products, programs and services tested those ever used and how satisfied or not satisfied they were each. The results can be used to identify what Americans value in healthcare programs, products and services, and how the value changes over time.

Second quarter 2009 results

During the first two quarters of 2009, 2,025 respondents were interviewed. Half the respondents were men and half were women; half were married; 15% were African-American and 73% were White; 27% were aged 18 – 34, 41% were aged 35 – 54 and 33% were over the age of 55. The mean household income was $51,600. Sixty-one percent suffered from a health condition in the past year, and 78% of all respondents had insurance coverage.

The study found that four services: prescription drugs, over the counter drugs, dentist services and physician services have ‘ever been used’ by the vast majority of people; these are also the four services most commonly ‘used regularly’. Surgical services, over the counter drugs, dentist services, physician services, diagnostic laboratory services, prescription drugs and health/personal care goods were the highest rated services among the 27 tested. The lowest rated services included care for the elderly, health relief services, mental retardation services, mental health services, substance abuse services, preventive health services and individual social/health services.

Central to the Spectrum Health Value Study is the analysis of the relative value that respondents place on the 27 healthcare programs, products and services listed above. Each respondent was asked the following question several times, each time showing them a set of four different programs, products and services from the 27 being tested:

Recognizing that health care costs vary depending on your level of insurance coverage, and other health benefits that you either purchase or receive through an employer or other sources, and thinking about the actual dollars that are spent, listed below are four health care services with costs that you and other individuals ultimately pay for either directly or indirectly. Of these four, which is the most important and which is the least important for you and your family as you spend your health care dollars?

The following programs, products and services were picked as ‘most important’ more often than not:

• Physician services
• Medical services at a hospital
• Emergency care services
• Prescription drugs
• Dentist services
• Outpatient services
• Diagnostic laboratory services
• Surgical services
• Preventive health services
• Medical research
• Over the counter drugs
• Health/personal care goods
• Individual social/health services

Afterward, respondents were shown the following statement:

The cost of health care benefits and services for Americans is — one way or the other — ultimately paid for by individuals who contribute in various ways. These various types of payments include insurance policy premiums that people pay, income and sales taxes people pay, employer deductions from employees’ paychecks, an individual’s out-of-pocket expenses or co-pays, as well as payments or personal charitable contributions to health providers. In summary, whatever the combination or method of funding for health care, the ultimate payer is the individual.

Sixty-nine percent of respondents agreed that the cost of healthcare benefits and services are ultimately paid for by individuals who contribute in various ways. People who suffer from a health condition were statistically more likely to answer that they strongly agreed with the statement than were people who do not have a health condition.

Several notable points:

• Although respondents were not asked how much they value access to healthcare, those products and services associated with access were highest ranked in the analysis: physician services, medical services at a hospital, and emergency care services.
• Although Americans strongly value preventive health services, they do not use them on a regular basis. When preventive health services are used, Americans are not very satisfied with the quality service.
• Despite the attention being raised around the obesity epidemic, Americans neither value nor use nutrition services. When nutrition services are used, they are not considered very satisfactory.

Spectrum plans to update the study findings each quarter. Additional details as well as access to the full report can be read at http://www.healthvaluestudy.com/. Several summary reports are available (for each page below, click on ‘Download Full Report’):

• The Spectrum Health Value Study: An Overview
• Access: the Health Care Product that Americans Value Most
• The Value and Use of Preventive and Wellness Health Services
• Those Who Suffer: The Effect of Chronic Illness on Health Care Value
• Examining the Concerns of the “Anxious Insured”: Lessons for Health Reform

References

1. The Spectrum Health Value Study. Spectrum. Accessed 2009 May 18.
2. Institute of Medicine of the National Academies. Roundtable on Evidence Based Medicine. Value in Health Care; accounting for cost, quality, safety, outcomes and innovations. 2009 March.

The savings — an estimated $2 trillion over the next decade — would come from changes in the public-private partnership and include:

• Administrative standardization, simplification and transparency.
• Aligning quality and efficiency incentives among providers to reduce over- and under-use of healthcare.
• Encouraging coordinated care and adherence to evidence-based best practices and therapies.
• Reducing the cost of doing business by developing technology and regulatory reform.

Although the proposed health expenditure savings is small, experts say it’s significant [2]. The very fact that health industry leaders have stepped forward to voluntarily restrain costs is itself encouraging; these are the same groups that opposed the healthcare reforms proposed by President Clinton in the 1990s.

The growing burden of the American healthcare system

Indeed, with growing costs reform must come to the American healthcare system. A recent report by the Centers for Medicare and Medicaid Services (CMS) forecasts that growth in U.S. healthcare spending is expected to significantly outpace gross domestic product (GDP) growth in 2008 and 2009 due to the recession [3]. Between 2008 and 2018, the average annual spending growth by public payers (7.2%) is projected to outpace that of private payers (5.3%); as such, national healthcare spending is expected to reach $4.4 trillion and comprise 20.3% of GDP by 2018 [4].

To put those numbers in perspective, in 2008, national health spending was $2.4 trillion and comprised 16.6% of GDP.

What’s not being reported by the major media and perhaps the most frightening is that just two years ago, the Organization for Economic Cooperation and Development (OECD) projected that U.S. healthcare costs would consume approximately 20% of GDP by 2050 with dire consequences. We’re now looking at that occuring within the next decade.

Who’s job is healthcare anyway?

In 2007, U.S. households contributed $660.3 billion to healthcare spending, more than private business, state and local government, or the federal government [4]. Nevertheless, private business still contributed almost 60% more to private health insurance than households. An commentary on American Public Media’s Marketplace entitled Health care should be government’s job recently addressed the problem of U.S. corporations paying more for healthcare benefits than they’re earning in profits. In an age when U.S. companies can no longer afford to pay for health benefits, Matt Miller, senior fellow at the Center for American Progress and author of the book, “The Tyranny of Dead Ideas“, suggests that the larger truth is that “while having health insurance is crucial, it’s time we stopped looking to our companies instead of our country to help us obtain it” [5].

Miller continues, saying that:

America is the only advanced nation that operates much of its welfare state through corporations. This may have made sense 50 years ago, when medicine was cheap, a single breadwinner worked at a big company for 35 years, and American business dominated the world economy so that companies could pass on, through higher prices, the cost of much of the country’s safety net. But those days are gone. Today people switch jobs 10 times by the age of 40, and sky-high health costs make U.S. firms uncompetitive. Meanwhile, our archaic link between jobs and health care helps explain why 50 million people are uninsured, with millions more just a pink slip away from medical bankruptcy.

More about this proposal can be found in a Fortune editorial written by Miller in 2007 entitled Opening the Capitalist Mind. His commentary offers an interesting perspective on the linking of healthcare to jobs.

What’s your opinion? If you could reform one aspect of the U.S. healthcare system, what would it be?

References

1. AMA to President Obama: All Americans should have access to affordable, high quality health care services. American Medical Association, Letters to the Editor. 2009 May 11.
2. Health care cutting for stake in reform. Marketplace, American Public Media. 2009 May 11.
3. National Health Expenditure Data. Centers for Medicare & Medicaid Services. Accessed 2009 May 11.
4. Health Care Costs 101, 2009 Edition. California Health Care Foundation. 2009 April.
5. Health care should be government’s job. Marketplace, American Public Media. 2009 May 11.

This weekend, I.O.U.S.A. is making its television debut on CNN. You can catch it this afternoon, Sunday, January 10th at 3 p.m. EST. The broadcast will be hosted by Ali Velshi and Christine Romans, co-anchors of CNN’s weekend business roundtable program Your $$$$$.

I wrote about Healthcare Costs and the Looming U.S. Budget Crisis last summer here on Highlight HEALTH. I.O.U.S.A. follows now former Comptroller General David Walker and Robert Bixby, Executive Director of the Concord Coalition, on their cross-country Fiscal Wake-Up Tour to talk to the American people about the country’s debt problem. The movie further underscores the need for immediate reform of Americas major entitlement programs, Social Security, Medicare and Medicaid.

According to the I.O.U.S.A. movie website [2]:

Wake up, America! We’re on the brink of a financial meltdown. I.O.U.S.A. boldly examines the rapidly growing national debt and its consequences for the United States and its citizens. Burdened with an ever-expanding government and military, increased international competition, overextended entitlement programs, and debts to foreign countries that are becoming impossible to honor, America must mend its spendthrift ways or face an economic disaster of epic proportions.

Throughout history, the American government has found it nearly impossible to spend only what has been raised through taxes. Wielding candid interviews with both average American taxpayers and government officials, Sundance veteran Patrick Creadon (Wordplay) helps demystify the nation’s financial practices and policies. The film follows former U.S. Comptroller General David Walker as he crisscrosses the country explaining America’s unsustainable fiscal policies to its citizens.

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With surgical precision, Creadon interweaves archival footage and economic data to paint a vivid and alarming profile of America’s current economic situation. The ultimate power of I.O.U.S.A. is that the film moves beyond doomsday rhetoric to proffer potential financial scenarios and propose solutions about how we can recreate a fiscally sound nation for future generations.

Creadon uses candid interviews and his featured subjects include Warren Buffett, Alan Greenspan, Paul O’Neill, Robert Rubin, and Paul Volcker, along with the Peter G. Peterson Foundation’s own David Walker and Bob Bixby of the Concord Coalition, a Foundation grantee.

Pointedly topical and consummately nonpartisan, I.O.U.S.A. drives home the message that the only time for America’s financial future is now.

If you’re concerned about America’s impending financial disaster, you owe it to yourself (and your children) to see this movie.

References

1. ‘I.O.U.S.A.’ Makes TV Debut on CNN. Documentary.org 2009 Jan.
2. About the Movie. I.O.U.S.A. the Movie. Accessed 2009 Jan 11th.