Patient-reported Outcomes Among Vulnerable Populations in the Medicare Bundled Payments for Care Improvement Initiative.

BACKGROUND: The Centers for Medicare & Medicaid Services Bundled Payments for Care Improvement (BPCI) initiative tested whether episode-based payment models could reduce Medicare payments without harming quality. Among patients with vulnerabilities, BPCI appeared to effectively reduce payments while maintaining the quality of care. However, these findings could overlook potential adverse patient-reported outcomes in this population. RESEARCH DESIGN: We surveyed beneficiaries with 4 characteristics (Medicare-Medicaid dual eligibility; dementia; recent institutional care; or racial/ethnic minority) treated at BPCI-participating or comparison hospitals for congestive heart failure, sepsis, pneumonia, or major joint replacement of the lower extremity. We estimated risk-adjusted differences in patient-reported outcomes between BPCI and comparison respondents, stratified by clinical episode and vulnerable characteristic. MEASURES: Patient care experiences during episodes of care and patient-reported functional outcomes assessed roughly 90 days after hospitalization. RESULTS: We observed no differences in self-reported functional improvement between BPCI and comparison respondents with vulnerable characteristics. Patient-reported care experience was similar between BPCI and comparison respondents in 11 of 15 subgroups of clinical episode and vulnerability. BPCI respondents with congestive heart failure, sepsis, and pneumonia were less likely to indicate positive care experiences than comparison respondents for at least 1 subgroup with vulnerabilities. CONCLUSIONS: As implemented by hospitals, BPCI Model 2 was not associated with adverse effects on patient-reported functional status among beneficiaries who may be vulnerable to reductions in care. Hospitals participating in heart failure, sepsis or pneumonia bundled payment episodes should focus on patient care experience while implementing changes in care delivery.

Improving target price calculations in Medicare bundled payment programs.

OBJECTIVE: To compare the predictive accuracy of two approaches to target price calculations under Bundled Payments for Care Improvement-Advanced (BPCI-A): the traditional Centers for Medicare and Medicaid Services (CMS) methodology and an empirical Bayes approach designed to mitigate the effects of regression to the mean. DATA SOURCES: Medicare fee-for-service claims for beneficiaries discharged from acute care hospitals between 2010 and 2016. STUDY DESIGN: We used data from a baseline period (discharges between January 1, 2010 and September 30, 2013) to predict spending in a performance period (discharges between October 1, 2015 and June 30, 2016). For 23 clinical episode types in BPCI-A, we compared the average prediction error across hospitals associated with each statistical approach. We also calculated an average across all clinical episode types and explored differences by hospital size. DATA COLLECTION/EXTRACTION METHODS: We used a 20% sample of Medicare claims, excluding hospitals and episode types with small numbers of observations. PRINCIPAL FINDINGS: The empirical Bayes approach resulted in significantly more accurate episode spending predictions for 19 of 23 clinical episode types. Across all episode types, prediction error averaged $8456 for the CMS approach versus $7521 for the empirical Bayes approach. Greater improvements in accuracy were observed with increasing hospital size. CONCLUSIONS: CMS should consider using empirical Bayes methods to calculate target prices for BPCI-A.

The Structure and Financing of Health Care Systems Affected How Providers Coped With COVID-19.

Policy Points We compared the structure of health care systems and the financial effects of the COVID-19 pandemic on health care providers in the United States, England, Germany, and Israel: systems incorporating both public and private insurers and providers. The negative financial effects on health care providers have been more severe in the United States than elsewhere, owing to the prevalence of activity-based payment systems, limited direct governmental control over available provider capacity, and the structure of governmental financial relief. In a pandemic, activity-based payment reverses the conventional financial positions of payers and providers and may prevent providers from prioritizing public health because of the desire to avoid revenue loss caused by declines in patient visits.

Associations between uncertainties identified by the European Medicines Agency and national decision making on reimbursement by HTA agencies.

We aimed to determine whether uncertainties identified by the European Medicines Agency (EMA) were associated with negative relative effectiveness assessments (REAs) and negative overall reimbursement recommendations by national health technology assessment (HTA) agencies. Therefore, we identified all HTA reports from Haute Autorité de Santé (HAS; France), National Institute for Health and Care Excellence (NICE; England/Wales), Scottish Medicine Consortium (SMC; Scotland), and Zorginstituut Nederland (ZIN; The Netherlands) for a cohort of innovative medicines that the EMA had approved in 2009 to 2010 (excluding vaccines). Uncertainty regarding pivotal trial methodology, clinical outcomes, and their clinical relevance were combined to reflect a low, medium, or high level of uncertainty. We assessed associations by calculating risk ratios (RRs) and 95% confidence intervals (CIs), and agreement between REA and overall reimbursement recommendation outcomes. We identified 36 medicines for which 121 reimbursement recommendations had been issued by the HTA agencies between September 2009 and July 2018. High versus low uncertainty was associated with an increased risk for negative REAs and negative overall reimbursement recommendations: RRs 1.9 (95% CI 0.9-3.9) and 1.6 (95% CI 0.7-3.5), respectively, which was supported by further sensitivity analyses. We identified a lack of agreement between 33 (27%) REA and overall reimbursement recommendation outcomes, which were mostly restricted recommendations that followed on negative REAs in case of low or medium uncertainty. In conclusion, high uncertainty identified by the EMA was associated with negative REAs and negative overall reimbursement recommendations. To reduce uncertainty and ultimately facilitate efficient patient access, regulators, HTA agencies, and other stakeholders should discuss how uncertainties should be weighed and addressed early in the drug life cycle of innovative treatments.

Spillover Effects of Medicare's Voluntary Bundled Payments for Joint Replacement Surgery to Patients Insured by Commercial Health Plans.

BACKGROUND: Under the Bundled Payments for Care Improvement (BPCI) program, bundled paymtents for lower-extremity joint replacement (LEJR) are associated with 2% to 4% cost savings with stable quality among Medicare fee-for-service beneficiaries. However, BPCI may prompt practice changes that benefit all patients, not just fee-for-service beneficiaries. OBJECTIVE: To examine the association between hospital participation in BPCI and LEJR outcomes for patients with commercial insurance or Medicare Advantage (MA). DESIGN: Quasi-experimental study using Health Care Cost Institute claims from 2011 to 2016. SETTING: LEJR at 281 BPCI hospitals and 562 non-BPCI hospitals. PATIENTS: 184 922 patients with MA or commercial insurance. MEASUREMENTS: Differential changes in LEJR outcomes at BPCI hospitals versus at non-BPCI hospitals matched on propensity score were evaluated using a difference-in-differences (DID) method. Secondary analyses evaluated associations by patient MA status and hospital characteristics. Primary outcomes were changes in 90-day total spending on LEJR episodes and 90-day readmissions; secondary outcomes were postacute spending and discharge to postacute care providers. RESULTS: Average episode spending decreased more at BPCI versus non-BPCI hospitals (change, -2.2% [95% CI, -3.6% to -0.71%]; P = 0.004), but differences in changes in 90-day readmissions were not significant (adjusted DID, -0.47 percentage point [CI, -1.0 to 0.06 percentage point]; P = 0.084). Participation in BPCI was also associated with differences in decreases in postacute spending and discharge to institutional postacute care providers. Decreases in episode spending were larger for hospitals with high baseline spending but did not vary by MA status. LIMITATION: Nonrandomized studies are subject to residual confounding and selection. CONCLUSION: Participation in BPCI was associated with modest spillovers in episode savings. Bundled payments may prompt hospitals to implement broad care redesign that produces benefits regardless of insurance coverage. PRIMARY FUNDING SOURCE: Leonard Davis Institute of Health Economics at the University of Pennsylvania.

Recommendations to Improve Payment Policies for Comprehensive Dementia Care.

Access to comprehensive dementia care is limited. Recent changes in billing for professional services, including new physician fee schedule codes, encourage clinicians to provide new services; however, current reimbursement does not cover costs for all needed elements of dementia care. The Payment Model for Comprehensive Dementia Care Conference convened more than 50 national experts from diverse perspectives to review promising strategies for payment reform including ways to accelerate their adoption. Recommendations for reform included payments for services to family caregivers; new research to determine success metrics; education for consumers, providers, and policymakers; and advancing a population health model approach to tier coverage based on risk and need within a health system.

Innovative payment to scale up access to medications for opioid use disorder.

Bundled payments offer promise as a supplement to existing payment models to promote scaling up of opioid use disorder treatment using buprenorphine.

Fee-for-service payment is not the (main) problem.

OBJECTIVE: To understand the effect of physician payment incentives on the allocation of health care resources. DATA SOURCES/STUDY SETTING: Review and analysis of the literature on physician payment incentives. STUDY DESIGN: Analysis of current physician payment incentives and several ways to modify those incentives to encourage increased efficiency. PRINCIPAL FINDINGS: Fee-for-service payments can be incorporated into systems that encourage efficient pricing - prices that are close to the provider's marginal cost - by giving consumers information on provider-specific prices and a strong incentive to choose lower cost providers. However, efficient pricing of services ultimately will need to be supplemented by incentives for efficient production of health and functional status. CONCLUSIONS: The problem with current FFS payment is not paying a fee for each service, per se, but the way in which the fees are determined.

Managerial workarounds in three European DRG systems.

PURPOSE: Attempts to transform health systems have in many countries involved starting to pay healthcare providers through a DRG system, but that has involved managerial workarounds. Managerial workarounds have seldom been analysed. This paper does so by extending and modifying existing knowledge of the causes and character of clinical and IT workarounds, to produce a conceptualisation of the managerial workaround. It further develops and revises this conceptualisation by comparing the practical management, at both provider and purchaser levels, of hospital DRG payment systems in England, Germany and Italy. DESIGN/METHODOLOGY/APPROACH: We make a qualitative test of our initial assumptions about the antecedents, character and consequences of managerial workarounds by comparing them with a systematic comparison of case studies of the DRG hospital payment systems in England, Germany and Italy. The data collection through key informant interviews (N = 154), analysis of policy documents (N = 111) and an action learning set, began in 2010-12, with additional data collection from key informants and administrative documents continuing in 2018-19 to supplement and update our findings. FINDINGS: Managers in all three countries developed very similar workarounds to contain healthcare costs to payers. To weaken DRG incentives to increase hospital activity, managers agreed to lower DRG payments for episodes of care above an agreed case-load 'ceiling' and reduced payments by less than the full DRG amounts when activity fell below an agreed 'floor' volume. RESEARCH LIMITATIONS/IMPLICATIONS: Empirically this study is limited to three OECD health systems, but since our findings come from both Bismarckian (social-insurance) and Beveridge (tax-financed) systems, they are likely to be more widely applicable. In many countries, DRGs coexist with non-DRG or pre-DRG systems, so these findings may also reflect a specific, perhaps transient, stage in DRG-system development. Probably there are also other kinds of managerial workaround, yet to be researched. Doing so would doubtlessly refine and nuance the conceptualisation of the 'managerial workaround' still further. PRACTICAL IMPLICATIONS: In the case of DRGs, the managerial workarounds were instances of 'constructive deviance' which enabled payers to reduce the adverse financial consequences, for them, arising from DRG incentives. The understanding of apparent failures or part-failures to transform a health system can be made more nuanced, balanced and diagnostic by using the concept of the 'managerial workaround'. SOCIAL IMPLICATIONS: Managerial workarounds also appear outside the health sector, so the present analysis of managerial workarounds may also have application to understanding attempts to transform such sectors as education, social care and environmental protection. ORIGINALITY/VALUE: So far as we are aware, no other study presents and tests the concept of a 'managerial workaround'. Pervasive, non-trivial managerial workarounds may be symptoms of mismatched policy objectives, or that existing health system structures cannot realise current policy objectives; but the workarounds themselves may also contain solutions to these problems.

A proportional rule for setting reimbursement prices of new drugs and its mathematical consistency.

BACKGROUND: Value-based pricing (VBP) of new drugs has been suggested both as a way to control health expenditures and to maximize health benefits based on the available resources. The purpose of this work is to present a simple mathematical proof showing that prices of new drugs are set in a mathematically consistent way when the sum of intervention and downstream costs is proportional to the size of health benefits. Such proportional relationship underlies the efficiency-frontier method used by the German Institute for Quality and Efficiency in Health Care (IQWiG). METHODS: A proof by contradiction is presented that is based upon the following three premises: 1) total costs (intervention plus downstream costs) of existing non-dominated drugs and interventions are acceptable to decision-making bodies; 2) new drugs with health benefits in-between those of the most and second most effective existing interventions are not automatically excluded from reimbursement and are acceptable if prices are sufficiently low; and 3) value is measured on a cardinal scale. RESULT: The proof shows that a proportional rule sets reimbursement prices of new drugs in a mathematically consistent way. CONCLUSION: Based on the proof and the underlying assumptions a proportional relationship between costs and health benefits ensures mathematical consistency in VBP of drugs.

Hospital Costs and Reimbursement Model for a Geriatric Emergency Department.

OBJECTIVES: The American College of Emergency Physicians' geriatric emergency department (GED) guidelines recommend additional staff and geriatric equipment, which may not be financially feasible for every ED. Data from an accredited Level 1 GED was used to report equipment costs and to develop a business model for financial sustainability of a GED. METHODS: Staff salaries including the cost of fringe benefits were obtained from a Midwestern hospital with an academic ED of 80,000 annual visits. Reimbursement assumptions included 100% Medicare/Medicaid insurance payor and 8-hour workdays with 4.5 weeks of leave annually. Equipment costs from hospital invoices were collated. Operational and patient safety metrics were compared before and after the GED. RESULTS: A geriatric nurse practitioner in the ED is financially self-sustaining at 7.1 consultations, a pharmacist is self-sustaining at 7.7 medication reconciliation consultations, and physical and occupational therapist evaluations are self-sustaining at 5.7 and 4.6 consults per workday, respectively. Total annual equipment costs for mobility aids, delirium aids, sensory aids, and personal care items for the GED was $4,513. Comparing the 2 years before and after, in regard to operational metrics the proportions of patients with lengths of stay > 8 hours and patients placed in observation did not change. In regard to patient safety, the rate of falls decreased from 0.60/1,000 patient visits to 0.42/1,000 in the ED observation unit and 0.42/1,000 to 0.36/1,000 in the ED. ED recidivism at 7 and 30 days did not change. Estimated cost savings from the reduction in falls was $80,328. CONCLUSION: The additional equipment and personnel costs for comprehensive geriatric assessment in the ED are potentially financially justified by revenue generation and improvements in patient safety measures. A geriatric ED was associated with a decrease in patient falls in the ED but did not decrease admissions or ED recidivism.

Integrating public preferences into national reimbursement decisions: a descriptive comparison of approaches in Belgium and New Zealand.

BACKGROUND: Public health care payer organizations face increasing pressures to make transparent and sustainable coverage decisions about ever more expensive prescription drugs, suggesting a need for public engagement in coverage decisions. However, little is known about countries' approaches to integrating public preferences in existing funding decisions. The aim of this study was to describe how Belgium and New Zealand used deliberative processes to engage the public and to identify lessons learned from these countries' approaches. METHODS: To describe two countries' deliberative processes, we first reviewed key country policy documents and then conducted semi-structured interviews with five leaders of the processes from Belgium and New Zealand. We assessed each country's rationales for and approaches to engaging the public in pharmaceutical coverage decisions and identified lessons learned. We used qualitative content analysis of the interviews to describe key themes and subthemes. RESULTS: In both countries, the national public payer organization initiated and led the process of integrating public preferences into national coverage decision making. Reimbursement criteria considered outdated and changing societal expectations prompted the change. Both countries chose a deliberative process of public engagement with a multi-year commitment of many stakeholders to develop new reimbursement processes. Both countries' new reimbursement processes put a stronger emphasis on quality of life, the separation of individual versus societal perspectives, and the importance of final reimbursement decisions being taken in context rather than based largely on cost-effectiveness thresholds. CONCLUSIONS: To face the growing financial pressure of sustainable funding of medicines, Belgium's and New Zealand's public payers have developed processes to engage the public in defining the reimbursement system's priorities. Although these countries differ in context and geographic location, they came up with overlapping lessons learnt which include the need for 1) political commitment to initiate change, 2) broad involvement of all stakeholders, and 3) commitment of all to engage in a long-term process. To evaluate these changes, further research is required to understand how coverage decisions in systems with and without public engagement differ.

Public policy and programs - Missing links in growing home dialysis in the United States.

Patients with end-stage kidney disease (ESKD) require dialysis or a kidney transplant for survival and over 760 000 patients now benefit from these therapies in the United States. Dialysis in the United States in the late 1960s and early 1970s was often done in the home. After the advent of Medicare coverage for ESKD in 1972 and the subsequent easier access to center based hemodialysis, the use of home modalities dramatically declined. This stands in contrast to home dialysis uptake in other industrialized healthcare systems where both peritoneal dialysis and home hemodialysis are more frequently used. Characteristics unique to the US healthcare system as well as the cultures of providers (physicians and dialysis providers) and recipients of ESKD care are hypothesized as the main reasons for observed differences in home dialysis use. To address these issues, the Centers for Medicare and Medicaid Services have recently proposed new payment programs under an Executive Order from the President of the United States, with the explicit goal of increasing the number of patients using home dialysis. This perspective outlines policy opportunities and programs with a proven track record of home dialysis growth in other countries or hypothesized promise based on identified barriers and needs.

The reimbursement of new medical technologies in German inpatient care: What factors explain which hospitals receive innovation payments?

Most hospital payment systems based on diagnosis-related groups (DRGs) provide payments for newly approved technologies. In Germany, they are negotiated between individual hospitals and health insurances. The aim of our study is to assess the functioning of temporary reimbursement mechanisms. We used multilevel logistic regression to examine factors at the hospital and state levels that are associated with agreeing innovation payments. Dependent variable was whether or not a hospital had successfully negotiated innovation payments in 2013 (n = 1532). Using agreement data of the yearly budget negotiations between each German hospital and representatives of the health insurances, the study comprises all German acute hospitals and innovation payments on all diagnoses. In total, 32.9% of the hospitals successfully negotiated innovation payments in 2013. We found that the chance of receiving innovation payments increased if the hospital was located in areas with a high degree of competition and if they were large, had university status and were private for-profit entities. Our study shows an implicit self-controlled selection of hospitals receiving innovation payments. While implicitly encouraging safety of patient care, policy makers should favour a more direct and transparent process of distributing innovation payments in prospective payment systems.