Hospital Prices for Physician-Administered Drugs for Patients with Private Insurance.

BACKGROUND: Hospitals can leverage their position between the ultimate buyers and sellers of drugs to retain a substantial share of insurer pharmaceutical expenditures. METHODS: In this study, we used 2020-2021 national Blue Cross Blue Shield claims data regarding patients in the United States who had drug-infusion visits for oncologic conditions, inflammatory conditions, or blood-cell deficiency disorders. Markups of the reimbursement prices were measured in terms of amounts paid by Blue Cross Blue Shield plans to hospitals and physician practices relative to the amounts paid by these providers to drug manufacturers. Acquisition-price reductions in hospital payments to drug manufacturers were measured in terms of discounts under the federal 340B Drug Pricing Program. We estimated the percentage of Blue Cross Blue Shield drug spending that was received by drug manufacturers and the percentage retained by provider organizations. RESULTS: The study included 404,443 patients in the United States who had 4,727,189 drug-infusion visits. The median price markup (defined as the ratio of the reimbursement price to the acquisition price) for hospitals eligible for 340B discounts was 3.08 (interquartile range, 1.87 to 6.38). After adjustment for drug, patient, and geographic factors, price markups at hospitals eligible for 340B discounts were 6.59 times (95% confidence interval [CI], 6.02 to 7.16) as high as those in independent physician practices, and price markups at noneligible hospitals were 4.34 times (95% CI, 3.77 to 4.90) as high as those in physician practices. Hospitals eligible for 340B discounts retained 64.3% of insurer drug expenditures, whereas hospitals not eligible for 340B discounts retained 44.8% and independent physician practices retained 19.1%. CONCLUSIONS: This study showed that hospitals imposed large price markups and retained a substantial share of total insurer spending on physician-administered drugs for patients with private insurance. The effects were especially large for hospitals eligible for discounts under the federal 340B Drug Pricing Program on acquisition costs paid to manufacturers. (Funded by Arnold Ventures and the National Institute for Health Care Management.).

Determinants of Value in Coronary Artery Bypass Grafting.

Background Over 180 000 coronary artery bypass grafting (CABG) procedures are performed annually, accounting for $7 to $10 billion in episode expenditures. Assessing tradeoffs between spending and quality contributing to value during 90-day episodes has not been conducted but is essential for success in bundled reimbursement models. We, therefore, identified determinants of variability in hospital 90-day episode value for CABG. Methods Medicare and private payor admissions for isolated CABG from 2014 to 2016 were retrospectively linked to clinical registry data for 33 nonfederal hospitals in Michigan. Hospital composite risk-adjusted complication rates (≥1 National Quality Forum-endorsed, Society of Thoracic Surgeons measure: deep sternal wound infection, renal failure, prolonged ventilation >24 hours, stroke, re-exploration, and operative mortality) and 90-day risk-adjusted, price-standardized episode payments were used to categorize hospitals by value by defining the intersection between complications and spending. Results Among 2573 total patients, those at low- versus high-value hospitals had a higher percentage of prolonged length of stay >14 days (9.3% versus 2.4%, P=0.006), prolonged ventilation (17.6% versus 4.8%, P<0.001), and operative mortality (4.8% versus 0.6%, P=0.001). Mean total episode payments were $51 509 at low-compared with $45 526 at high-value hospitals (P<0.001), driven by higher readmission ($3675 versus $2177, P=0.005), professional ($7462 versus $6090, P<0.001), postacute care ($7315 versus $5947, P=0.031), and index hospitalization payments ($33 474 versus $30 800, P<0.001). Among patients not experiencing a complication or 30-day readmission (1923/2573, 74.7%), low-value hospitals had higher inpatient evaluation and management payments ($1405 versus $752, P<0.001) and higher utilization of inpatient rehabilitation (7% versus 2%, P<0.001), but lower utilization of home health (66% versus 73%, P=0.016) and emergency department services (13% versus 17%, P=0.034). Conclusions To succeed in emerging bundled reimbursement programs for CABG, hospitals and physicians should identify strategies to minimize complications while optimizing inpatient evaluation and management spending and use of inpatient rehabilitation, home health, and emergency department services.

Sources of Hospital Variation in Postacute Care Spending After Cardiac Surgery.

BACKGROUND: Postacute care is a major driver of cardiac surgical episode spending, but the sources of variation in spending have not been explored. The objective of this study was to identify sources of variation in postacute care spending within 90-days of discharge following coronary artery bypass grafting (CABG) and aortic valve replacement (AVR) and the relationship between postacute care spending and other postdischarge utilization. METHODS AND RESULTS: A retrospective analysis was conducted of public and private administrative claims for Michigan residents insured by Medicare fee-for-service and Blue Cross Blue Shield of Michigan/Blue Care Network commercial and Medicare Advantage plans undergoing CABG (n=11 208) or AVR (n=6122) in 33 nonfederal acute care Michigan hospitals between January 1, 2015 and December 31, 2018. Postacute care use was present in 9662 (86.2%) CABG episodes and 4242 (69.3%) AVR episodes, with respective mean (SD) 90-day spending of $4398±$6124 and $3465±$5759. Across hospitals, mean postacute care spending ranged from $3280 to $8186 for CABG and $2246 to $7710 for AVR. Inpatient rehabilitation and skilled nursing facility care accounted for over 80% of the variation spending between low and high postacute care spending hospitals. At the hospital-level, postacute care spending was modestly correlated across procedures and payers. Spending associated with readmissions, emergency department visits, and outpatient facility care was significantly different between low and high postacute care spending hospitals in CABG and AVR episodes. CONCLUSIONS: There was wide hospital variation in postacute care spending after cardiac surgery, which was primarily driven by differential use and intensity in facility-based postacute care. Optimizing facility-based postacute care after cardiac surgery offers unique opportunities to reduce potentially unwarranted care variation.

Association Between the Implementation of a Population-Based Primary Care Payment System and Achievement on Quality Measures in Hawaii.

Importance: Hawaii Medical Service Association (HMSA), the Blue Cross Blue Shield of Hawaii, introduced Population-based Payments for Primary Care (3PC), a new capitation-based primary care payment system, in 2016. The effect of this system on quality measures has not been evaluated. Objective: To evaluate whether the 3PC system was associated with changes in quality, utilization, or spending in its first year. Design, Setting, and Participants: Observational study using HMSA claims and clinical registry data from January 1, 2012, to December 31, 2016, and a propensity-weighted difference-in-differences method to compare 77 225 HMSA members in Hawaii attributed to 107 primary care physicians (PCPs) and 4 physician organizations participating in the first wave of the 3PC and 222 233 members attributed to 312 PCPs and 14 physician organizations that continued in a fee-for-service model in 2016 but had 3PC start dates thereafter. Exposures: Participation in the 3PC system. Main Outcomes and Measures: The primary outcome was the change in a composite measure score reflecting the probability that a member achieved an eligible measure out of 13 pooled Healthcare Effectiveness Data and Information Set quality measures. Primary care visits and total cost of care were among 15 secondary outcomes. Results: In total, the study included 299 458 HMSA members (mean age, 42.1 years; 51.5% women) and 419 primary care physicians (mean age, 54.9 years; 34.8% women). The risk-standardized composite measure scores for 2012 to 2016 changed from 75.1% to 86.6% (+11.5 percentage points) in the 3PC group and 74.3% to 83.5% (+9.2 percentage points) in the non-3PC group (differential change, 2.3 percentage points [95% CI, 2.1 to 2.6 percentage points]; P < .001). Of 15 prespecified secondary end points for utilization and spending, 11 showed no significant difference. Compared with the non-3PC group, the 3PC system was associated with a significant reduction in the mean number of primary care visits (3.3 to 3.0 visits vs 3.3 to 3.1 visits; adjusted differential change, -3.9 percentage points [95% CI, -4.6 to -3.2 percentage points]; P < .001), but there was no significant difference in mean total cost of care ($3344 to $4087 vs $2977 to $3564; adjusted differential change, 1.0% [95% CI, -1.3% to 3.4%]; P = .39). Conclusions and Relevance: In its first year, the 3PC population-based primary care payment system in Hawaii was associated with small improvements in quality and a reduction in PCP visits but no significant difference in the total cost of care. Additional research is needed to assess longer-term outcomes as the program is more fully implemented and to determine whether results are generalizable to other health care markets.

Drivers of Variation in 90-Day Episode Payments After Percutaneous Coronary Intervention.

BACKGROUND: Percutaneous coronary intervention (PCI) is a common and expensive procedure that has become a target for bundled payment initiatives. We described the magnitude and determinants of variation in 90-day PCI episode payments across a diverse array of patients and hospitals. METHODS AND RESULTS: We linked clinical registry data from PCIs performed at 33 Michigan hospitals to 90-day episodes of care constructed using Medicare fee-for-service and commercial insurance claims from January 2012 to October 2016. Payments were price standardized and risk adjusted using clinical and administrative variables in an observed-over-expected framework. Hospitals were stratified into quartiles based on average episode payments. Payment components between the highest and the lowest quartiles were compared with identified drivers of variation (ie, index hospitalization/procedure, readmissions, postacute care, and professional fees). Among 40 925 90-day PCI episodes, the average risk-adjusted 90-day episode payment by hospital ranged between $22 154 and $27 205 with a median of $24 696 (interquartile range, $24 190-$25 643). Hospitals in the lowest and the highest quartiles had average episode payments of $23 744 and $26 504, respectively (difference, $2760). Readmission payments were the primary driver of this variation (46.2%), followed by postacute care (22.6%). Readmissions remained the primary driver of variation in key subgroups, including inpatient and outpatient PCI, as well as PCI for acute myocardial infarction and nonacute myocardial infarction indications. CONCLUSIONS: Substantial hospital-level variation exists in 90-day PCI episode payments. Over half the variation between high- and low-payment hospitals was related to care after the index procedure, primarily because of readmissions and postacute care. Hospitals and policymakers should consider targeting these components when developing initiatives to reduce PCI-related spending.

Effects of Global Payment and Accountable Care on Medication Treatment for Alcohol and Opioid Use Disorders.

OBJECTIVES: The Alternative Quality Contract (AQC) implemented in 2009 by Blue Cross Blue Shield of Massachusetts (BCBSMA) is intended to improve quality and control costs by putting providers at risk for total medical spending and tying payment to performance on specified quality measures. We examined the AQC's early effects on use of and spending on medication treatment (MT) for addiction among individuals with alcohol use disorders (AUDs) and opioid use disorders (OUDs), conditions not subject to any performance measurement in the AQC. METHODS: Using data from 2006 to 2011, we use difference-in-difference estimation of the effect of the AQC on MT using a comparison group of enrollees in BCBSMA whose providers did not participate in the AQC. We compared AQC and non-AQC enrollees with AUDs (n = 37,113 person-years) and/or OUDs (n = 12,727 person-years) on any use of MT, number of prescriptions filled, and MT spending adjusting for demographic and health status characteristics. RESULTS: There was no difference in MT use among AQC enrollees with OUD (38.7%) relative to the comparison group (39.1%) (adjusted difference = -0.4%, 95% confidence interval -3.8% to 3.0%, P = 0.82). Likewise, there was no difference in MT use for AUD between the AQC (6.3%) and comparison group (6.5%) (P = 0.64). Similarly, we detected no differences in number of prescriptions or spending. CONCLUSIONS: Despite incentives for improved integration and quality of care under a global payment contract, the initial 3 years of the AQC showed no impact on MT use for AUD or OUD among privately insured enrollees with behavioral health benefits.

Does health insurance coverage fall when nonprofit insurers become for-profits?

In exchange for tax exemptions, Blue Cross and Blue Shield (BCBS) health insurers were expected to provide health insurance to the "bad risks," those for whom coverage was unavailable from other insurers. I present evidence that five years after a BCBS plan converted to for-profit status, the probability of having insurance was 1.4 percentage points higher, a 9% reduction in the uninsured. The increase in coverage does not mask reductions among populations often targeted by public policies. However, there is evidence of increased risk selection which suggests that the bad risks might have been worse off after a conversion.

Evaluation of the Quality Blue Primary Care program on health outcomes.

OBJECTIVES: This study aimed to investigate the role of the Quality Blue Primary Care (QBPC) program on healthcare utilization and overall cost among the beneficiaries of Blue Cross and Blue Shield of Louisiana (BCBSLA). STUDY DESIGN: Retrospective observational cohort study using claims data from adults residing in QBPC-implemented regions continuously enrolled through BCBSLA from June 2012 to December 2014 (N = 89,034). METHODS: Controlling for age, gender, and risk score by propensity score weighting, inpatient, outpatient, and corresponding medical expenditures were each compared between the QBPC group and the control group using a difference-in-differences regression model. RESULTS: Average total cost increased in both the QBPC and control groups in 2014, but the increase was significantly less in the intervention group-a difference of $27.09 per member per month (PMPM) (P ≤.001). Savings in total cost were derived largely from a decrease in hospitalizations-a difference of $18.85 PMPM (P = .0023). Furthermore, savings were associated with shifts in healthcare utilization by the intervention group toward proactive management, including increased primary care physician visits (P = .0106) and higher screening rates for diabetes (P = .0019). Inpatient admissions also decreased in the QBPC group, most significantly among those with chronic conditions (P <.05). Conversely, an unexpected increase was observed in emergency department visits. CONCLUSIONS: The QBPC program was associated with a shift in primary care delivery and reductions in overall cost. Savings were achieved largely through reductions in hospitalization costs.

The Alternative Quality Contract: Impact on Service Use and Spending for Children With ADHD.

In 2009, Blue Cross-Blue Shield of Massachusetts (BCBSMA) implemented the alternative quality contract (AQC), which pays provider organizations a global payment for all services used by enrollees. BCBSMA claims for 2006-2011 were used to compare youths enrolled in provider organizations participating in the AQC (7,407 person-years [PYs]) with those not participating (45,398 PYs). Difference-in-differences models estimated changes in mental health and substance abuse treatment service utilization and spending attributable to the AQC. The AQC was associated with small increases in the probability of any outpatient visits and in the probability and number of medication management visits among children with attention-deficit hyperactivity disorder (ADHD). Spending did not change, and there was no evidence of reductions in service utilization or spending for children with ADHD in the first three years of AQC implementation.

Socioeconomic Background and Commercial Health Plan Spending.

BACKGROUND: Risk-adjustment algorithms typically incorporate demographic and clinical variables to equalize compensation to insurers for enrollees who vary in expected cost, but including information about enrollees' socioeconomic background is controversial. METHODS: We studied 1 182 847 continuously insured 0 to 19-year-olds using 2008-2012 Blue Cross Blue Shield of Massachusetts and American Community Survey data. We characterized enrollees' socioeconomic background using the validated area-based socioeconomic measure and calculated annual plan payments using paid claims. We evaluated the relationship between annual plan payments and geocoded socioeconomic background using generalized estimating equations (γ distribution and log link). We expressed outcomes as the percentage difference in spending and utilization between enrollees with high and low socioeconomic backgrounds. RESULTS: Geocoded socioeconomic background had a significant, positive association with annual plan payments after applying standard adjusters. Every 1 SD increase in socioeconomic background was associated with a 7.8% (95% confidence interval, 7.2% to 8.3%; P < .001) increase in spending. High socioeconomic background enrollees used higher-priced outpatient and pharmacy services more frequently than their counterparts from low socioeconomic backgrounds (eg, 25% more outpatient encounters annually; 8% higher price per encounter; P < .001), which outweighed greater emergency department spending among low socioeconomic background enrollees. CONCLUSIONS: Higher socioeconomic background is associated with greater levels of pediatric health care spending in commercially insured children. Including socioeconomic information in risk-adjustment algorithms may address concerns about adverse selection from an economic perspective, but it would direct funds away from those caring for children and adolescents from lower socioeconomic backgrounds who are at greater risk of poor health.

Early Impact Of CareFirst's Patient-Centered Medical Home With Strong Financial Incentives.

In 2011 CareFirst BlueCross BlueShield, a large mid-Atlantic health insurance plan, implemented a payment and delivery system reform program. The model, called the Total Care and Cost Improvement Program, includes enhanced payments for primary care, significant financial incentives for primary care physicians to control spending, and care coordination tools to support progress toward the goal of higher-quality and lower-cost patient care. We conducted a mixed-methods evaluation of the initiative's first three years. Our quantitative analyses used spending and utilization data for 2010-13 to compare enrollees who received care from participating physician groups to similar enrollees cared for by nonparticipating groups. Savings were small and fully shared with providers, which suggests no significant effect on total spending (including bonuses). Our qualitative analysis suggested that early in the program, many physicians were not fully engaged with the initiative and did not make full use of its tools. These findings imply that this and similar payment reforms may require greater time to realize significant savings than many stakeholders had expected. Patience may be necessary if payer-led reform is going to lead to system transformation.

Lower- Versus Higher-Income Populations In The Alternative Quality Contract: Improved Quality And Similar Spending.

As population-based payment models become increasingly common, it is crucial to understand how such payment models affect health disparities. We evaluated health care quality and spending among enrollees in areas with lower versus higher socioeconomic status in Massachusetts before and after providers entered into the Alternative Quality Contract, a two-sided population-based payment model with substantial incentives tied to quality. We compared changes in process measures, outcome measures, and spending between enrollees in areas with lower and higher socioeconomic status from 2006 to 2012 (outcome measures were measured after the intervention only). Quality improved for all enrollees in the Alternative Quality Contract after their provider organizations entered the contract. Process measures improved 1.2 percentage points per year more among enrollees in areas with lower socioeconomic status than among those in areas with higher socioeconomic status. Outcome measure improvement was no different between the subgroups; neither were changes in spending. Larger or comparable improvements in quality among enrollees in areas with lower socioeconomic status suggest a potential narrowing of disparities. Strong pay-for-performance incentives within a population-based payment model could encourage providers to focus on improving quality for more disadvantaged populations.

Access of Patients With Lumbar Disc Herniations to Spine Surgeons: The Effect of Insurance Type Under the Affordable Care Act.

STUDY DESIGN: Prospective cohort study. OBJECTIVE: To determine the effects of insurance type (Medicaid vs. a specific private insurance) on patient access to spine surgeons for lumbar disc herniation as measured by (A) acceptance of insurance, (B) need for a referral, and (C) wait time for appointment. SUMMARY OF BACKGROUND DATA: Limited studies have been conducted to examine the issue of patient access to spine surgeons based on different insurance types (Medicaid vs. a specific private insurance), especially in relation to the Medicaid expansion that resulted from the Affordable Care Act. METHODS: Appointment success rates, the need for a referral, and waiting periods were compared between Medicaid and a specific private insurance for patients needing an evaluation for a herniated lumbar disc. The waiting period was studied in the context of comparing states that have expanded Medicaid eligibility to ones that have not, and the surgical training of the spine surgeon (orthopaedic surgeons vs. neurosurgeons). RESULTS: Appointment success rate for patients seeking access to lumbar spine care was significantly higher for patients with BlueCross insurance (95.0%) versus patients with Medicaid insurance (0.8%) (P <0.001). The need for referrals was significantly higher for patients with Medicaid insurance (93.3%) versus patients with BlueCross insurance (4.2%) (P <0.001). Among BlueCross patients, wait times were longer in Medicaid-expanded states. However, the same trend was not seen among patients with Medicaid insurance. CONCLUSION: Patients with Medicaid were less successful at scheduling an appointment and faced more barriers to care, such as the need for a referral, compared with the private insurance studied. In the states with expanded Medicaid, wait times for appointments were longer for BlueCross patients, but were not longer for patients with Medicaid insurance. Overall, this study suggests that increased coverage resulting from Medicaid expansion does not necessarily equate to increased access to care. LEVEL OF EVIDENCE: 2.

Modification of Treatment of Certain Health Organizations. Final regulations.

This document contains final regulations that provide guidance to Blue Cross and Blue Shield organizations, and certain other organizations, on computing and applying the medical loss ratio and the consequences for not meeting the medical loss ratio threshold. The final regulations reflect the enactment of a technical correction to section 833(c)(5) of the Internal Revenue Code by the Consolidated and Further Continuing Appropriations Act of 2015. The final regulations affect Blue Cross and Blue Shield organizations, and certain other organizations involved in providing health insurance.

Effects of Global Payment and Accountable Care on Tobacco Cessation Service Use: An Observational Study.

BACKGROUND: Tobacco use is the leading cause of preventable death and disability. New payment and delivery system models including global payment and accountable care have the potential to increase use of cost-effective tobacco cessation services. OBJECTIVE: To examine how the Alternative Quality Contract (AQC) established in 2009 by Blue Cross Blue Shield of Massachusetts (BCBSMA) has affected tobacco cessation service use. DESIGN: We used 2006-2011 BCBSMA claims and enrollment data to compare adults 18-64 years in AQC provider organizations to adults in non-AQC provider organizations. We examined the AQC's effects on all enrollees; a subset at high risk of tobacco-related complications due to certain medical conditions; and behavioral health service users. MAIN MEASURES: We examined use of: (1) any cessation treatment (pharmacotherapy or counseling); (2) varenicline or bupropion; (3) nicotine replacement therapies (NRTs); (4) cessation counseling; and (4) combination therapy (pharmacotherapy plus counseling). We also examined duration of pharmacotherapy use and number of counseling visits among users. KEY RESULTS: Rates of tobacco cessation treatment use were higher following implementation of the AQC relative to the comparison group overall (2.02 vs. 1.87 %, p < 0.0001), among enrollees at risk for tobacco-related complications (4.97 vs. 4.66 %, p < 0.0001), and among behavioral health service users (3.67 vs. 3.25 %, p < 0.0001). Statistically significant increases were found for use of varenicline or bupropion alone, counseling alone, and combination therapy, but not for NRT use, pharmacotherapy duration, or number of counseling visits among users. CONCLUSIONS: In its initial three years, the AQC was associated with increases in use of tobacco cessation services.

In Second Year Of Marketplaces, New Entrants, ACA 'Co-Ops,' And Medicaid Plans Restrain Average Premium Growth Rates.

Premiums for health insurance plans offered through the federally facilitated and state-based Marketplaces remained steady or increased only modestly from 2014 to 2015. We used data from the Marketplaces, state insurance departments, and insurer websites to examine patterns of premium pricing and the factors behind these patterns. Our data came from 2,964 unique plans offered in 2014 and 4,153 unique plans offered in 2015 in forty-nine states and the District of Columbia. Using descriptive and multivariate analysis, we found that the addition of a carrier in a rating area lowered average premiums for the two lowest-cost silver plans and the lowest-cost bronze plan by 2.2 percent. When all plans in a rating area were included, an additional carrier was associated with an average decline in premiums of 1.4 percent. Plans in the Consumer Operated and Oriented Plan Program and Medicaid managed care plans had lower premiums and average premium increases than national commercial and Blue Cross and Blue Shield plans. On average, premiums fell by an appreciably larger amount for catastrophic and bronze plans than for gold plans, and premiums for platinum plans increased. This trend of low premium increases overall is unlikely to continue, however, as insurers are faced with mounting medical claims.