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Peter Wehrwein's blog

Contributing Voices
Peter Wehrwein

If the jury is still out on ACOs, a study by Harvard researchers published in today’s New England Journal of Medicine could be a sign that the verdict will ultimately be that they work.

Judging by these results, ACOs seem effective at reducing health spending, albeit by a modest amount, but may not make much of a difference when it comes to performance measures like hospital readmission.

CMS has previously reported that Pioneer ACOs are a spending reduction success story and save the Medicare program money.

What’s new here is that an independent group of researchers, using some rigorous research methods, have arrived at pretty much the same conclusion.

Contributing Voices
Peter Wehrwein

Sovaldi, Harvoni, Viekira Pak, a slew of oncology meds—they’re all contributing to specialty pharmacy sticker shock.

Ivacaftor (Kalydeco) for cystic fibrosis hasn’t been in the news quite as much, but priced at $300,000 per year, it’s also part of the trend of super-high-priced drugs that is sweeping American health care.

Approved by the FDA two years ago, ivacaftor targets a particular genetic mutation that affects only about 4% of people with cystic fibrosis, so despite that stratospheric price, it hasn’t had the same effect on budgets as the hepatitis C drugs like Sovaldi or, increasingly, expensive cancer drugs.

One of our regular contributors, Krishna Patel, wrote about ivacaftor in this month’s issue of Managed Care, and her takeaway was for payers to follow the guidelines for ivacaftor and not erect obstacles to people getting a drug that might make a huge difference in their lives.

But the FDA is expected to approve a new medication some time this year that combines ivacaftor with another medication, lumacaftor. And rather than working in small percentage of people with cystic fibrosis, this new combination is expected to be effective in roughly half of those with the cystic fibrosis who are ages 12 and older.

Kevin Bowen and Patrick Gleason of Prime Therapeutics are presenting a poster today at the annual meeting of Academy of Managed Care Pharmacy in San Diego that gives some estimates of the financial consequences of this new drug on health plans and other payers.

Contributing Voices
Peter Wehrwein

No one is against all the progress being made in cancer treatment, which includes milder, effective treatments and medications tailored to take advantage of the genetic weaknesses of tumor cells.

This morning I woke up to front-page story in the Philadelphia Inquirer about the University of Pennsylvania and Novartis settling a patent dispute that had cast a legal cloud over their immunotherapeutic treatments, which rev up a person’s own immune system to take on the cancer and its runaway growth instead of relying on toxic chemicals.

But is the price of this progress just way too steep?

Oncology drugs are a hot topic

Many people are wrestling with these questions. Two sessions this afternoon at the Academy of Managed Care Pharmacy’s annual meeting in San Diego are devoted to management of oncology drugs.

Meanwhile, this morning Health Affairs unveiled its April issue devoted to cost and quality of cancer care.

I thought one of the most thought-provoking articles in Health Affairs was by Darius Lakdawalla, a professor at University of Southern California, and his colleagues.

They argued that we shouldn’t just be looking at the dollar outlay for cancer drugs:

The more complete approach suggested in the health economics literature offsets the growth in costs with the corresponding gain in patient value that resulted from it.

Sounds good. But what is “patient value?”

Contributing Voices
Peter Wehrwein

We usually want to be in the middle of networks with plenty of strength and sprawl. People strive to have large professional and social networks. Wirelesss carriers brag about how big and reliable their networks are.

It was that way in health care, too. After the pushback against managed care in the 1990s, insurers loosened the reins. Come open enrollment, people were enticed to sign up for a health plan that had cast a wide net with a wide choice of providers or, often more importantly, a plan that their favorite doctor accepted.

But now all talk is of narrow networks and being much more selective—some providers say discriminatory—about which providers are included in health plan’s network, all in the name of value-based care.

Contributing Voices
Peter Wehrwein

If you're into health care policy and law, tomorrow is your Superbowl, World Series, and World Cup all rolled into one.  

Oral arguments for King v. Burwell are scheduled to start tomorrow at 10 a.m. As Richard Mark Kirkner explained in our February issue, the case could uphold the ACA or severely crimp the law by eliminating premium subsidies in the 34 states that use the federal health exchange.

The ACA has been resilient, and many health care interests would rather live with the law, despite its flaws, than see it come undone.

Contributing Voices
Peter Wehrwein

Last May, two health advocacy groups filed a complaint with the Office for Civil Rights at HHS accusing four insurers selling plans in Florida of discriminating against people with HIV/AIDS by putting the drugs for treating the condition on the top tier of their formularies.

Researchers at the Harvard School of Public Health have followed up that complaint with their own research into what they are calling “adverse tiering.” The researchers, Douglas B. Jacobs and Benjamin D. Sommers, reported their results in this week’s New England Journal of Medicine.

The Harvard researchers looked at silver-level plans listed in the federal health exchange in 12 states, six with insurers mentioned in the complaint (Delaware, Florida, Louisiana, Michigan, South Carolina, and Utah) and six of the most populous states without any of those insurers (Illinois, New Jersey, Ohio, Pennsylvania, Texas, and Virginia).

Contributing Voices
Peter Wehrwein

The use of new hepatitis C therapies will increase rapidly, but the effect on spending is greatest early on, according to a PricewaterhouseCoopers analysis. According to the consulting firm’s projections, the expensive medications will eventually lower health care spending because they will improve the health of people with hepatitis C patients, so liver transplants and other high-cost medical interventions will be avoided.

Source: “Medical Cost Trend: Behind the Numbers 2015,” PricewaterhouseCoopers Health Research Institute, June 2014. PwC analysis based on National Health and Nutrition Examination Survey and 2012 Truven claims data from employers.

Contributing Voices
Peter Wehrwein

Three more organizations have exited CMS’s Pioneer accountable care organization (ACO) program, leaving just 19 of the original 32 participants in the fold for the elite program’s third year.

The Franciscan Alliance in Indianapolis, the Genesys Physician Hospital Organization in Flint, Mich., and the Renaissance Health Network in Wayne, Pa., in the southeastern part of the state, are leaving the Pioneer program, according to a list posted on the CMS website this afternoon.

Sharp Healthcare in San Diego had announced in August that it was dropping out.

Contributing Voices
Peter Wehrwein

Maybe, just maybe, accountable care organizations (ACOs) are the best bet for hitting the health care exacta of controlling costs and improving the quality of care.

Figures released by CMS on September 16 showed that the 23 organizations in the elite Pioneer program and 220 in the Shared Savings program produced over $372 million in savings while earning $445 million in shared savings payments.

Contributing Voices
Peter Wehrwein

So last week it was all doom and gloom about Pioneer ACOs.

The buzz in health care wonkdom was all about 9 of the 32 organizations defecting from a program supposedly designed for the best and brightest of American health care organizations — with maybe more to follow. Accepting downside risk was just too perilous. Lags in getting data from Centers for Medicare & Medicaid Services (CMS) were undermining cost and quality control efforts. And the contradiction of being responsible (aka accountable) for the costs of Medicare enrollees but having no direct control over where they receive care — a central feature of the ACO model — was simply untenable.

But this morning CMS attempted to change the doleful Pioneer ACO tune with a long-awaited announcement of cost and quality results from 2012, the first year the Pioneer ACOs were in operation.