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No Surprise: Healthcare Spending Jumps in 2014
No Surprise: Healthcare Spending Jumps in 2014
With more insured people able to pay for more healthcare services, healthcare spending under the ACA jumped 5.3% in 2014 to a total of more than $3 trillion.
That annual growth rate was the highest since before the 2008 recession, but not a surprise to economists. “The purpose of covering [all the new people] was allowing them to use more services,” USC health economist Paul Ginsburg told Modern Healthcare.
In fact the figures, from CMS’ Office of the Actuary and published in Health Affairs, were in line with projections, though they followed five straight years of historically low growth. That 2014 total worked out to $9,523 per capita, up 4.5% from 2013, and the percentage of GDP devoted to healthcare spending was 17.5%, up from 17.3%.
The growth was driven by the major ACA coverage expansions, particularly for Medicaid and private insurance, plus the introduction of new drugs for hepatitis C, which helped fuel growth in retail prescription drug spending (that increased by 12.2%). Spending by the federal government grew faster than that of other healthcare sponsors, leading to an increase of two percentage point in its share of total healthcare spending between 2013–14.
Experts don’t, however, expect the spending to hit double-digit yearly annual again soon. “Faster growth in aggregate spending due to rising coverage will be temporary and will fade in the coming years,” HHS Assistant Secretary for Planning and Evaluation Richard Frank said of the numbers.
For more: https://content.healthaffairs.org/content/early/2015/11/25/hlthaff.2015.1194.
Five Steps for Dealing With a Cyber-Breach
Some have called 2015 the “year of the healthcare security breach,” and those threats aren’t diminishing for 2016. But there are five steps health plans can take to respond effectively when an incident occurs.
Those emerged from the healthcare industry’s first simultaneous cyberattack simulation exercise for health plans and were announced in December by the Health Information Trust Alliance (HITRUST) and Deloitte Advisory Cyber Risk Services. They conducted the project in association with the Department of Health and Human Services.
The HITRUST CyberRX 2.0 Health Plan exercise included 250 participants from a dozen health plans across the U.S. who tested their readiness for incidents and looked for areas to improve.
“It is no longer a matter of if but when an organization will be breached,” HITRUST CEO Dan Nutkis said following the exercise. “Health plans have made considerable gains over the past several years to strengthen incident response capabilities, but leading companies are aware that regular simulation exercises drive iterative improvements over time. These exercises help organizations and the industry as a whole better prepare and respond, and are a critical component of an organization’s cyber risk mitigation strategy.”
The five recommendations that resulted:
Establish an incident-response ‘ecosystem’—Organizations can be slow to engage with third parties when an incident occurs. But integration means partners may be impacted by any breach. Work to develop trust and integration in response plans.
Share threat intelligence—HITRUST’s Cyber Threat Exchange (CTX) allowed sharing of critical information during the exercise, but players had problems sharing their own indicators of compromise (IOCs) with the CTX and HHS. Just 5% of organizations share their IOCs.
Know the cyber insurance claims processes—Some participants weren’t sure how to quantify losses and submit insurance claims, or what to expect after reporting an incident. Include information in engaging insurers in incident response plans.
Use the incident response plan—Ten of the 12 participating organizations didn’t refer to their incident response plans during the exercise! While the variables of a given attack may require adapting and improvising, organizations need access to their key information and plans’ roles and responsibilities.
Involve law enforcement at the right time—Law enforcement help identify and protect evidence, but some participants notified it too soon (before having actual evidence of a crime). This can impede your own investigation and recovery processes.
For more on the exercise: https://hitrustalliance.net/leading-health-plan-organizations-learn-mitigate-breach-exposure-participating-industry-wide-cyberattack-simulation-exercise/.
For the resulting report: https://hitrustalliance.net/documents/cyber_intel/cyberrx/HITRUST_CyberRX_HP_2015_AAR_Deloitte_FINAL_12012015.pdf.
Analytic Tool Cuts ED Visits, Admits for Elderly Polypharmacy Patients
Medication informatics and genetic drug-sensitivity testing could help reduce costs and the use of healthcare resources among elderly patients on multiple medications, a recent study suggests.
University of Utah researchers published in the Journal of Medical Economics found using YouScript predictive medication analytics—a clinical decision support tool used to guide genetic testing and improve drug treatments—helped cut ED visits by 71% and reduce hospitalizations by 39% among elderly polypharmacy patients.
“To our knowledge, this is the first study to demonstrate the potential of a technology to reduce the adverse drug event epidemic caused by polypharmacy,” Howard Coleman, cofounder and CEO of YouScript inventor Genelex, said in announcing the results.
YouScript prevented one hospitalization for every 16 patients tested, and one ER visit for every nine, the study found. That translated to a potential per-patient cost savings of $218 over four months in the tested group.
The YouScript system combines predictive analytics with DNA drug-sensitivity testing to analyze the medication and genetic interactions that shape how patients respond to drug treatments. It analyzes medication regimens and genetic tests to predict the potential for negative side effects and failed treatments. When it finds a possible problem, YouScript suggests alternative medications with less risk.
Reference: Brixner D, Biltaji E, Bress A, et al. The effect of pharmacogenetic profiling with a clinical decision support tool on healthcare resource utilization and estimated costs in the elderly exposed to polypharmacy. J Med Econ, 2015 Oct; 19: 1–16.
For more: https://www.prweb.com/releases/2015/11/prweb13058145.htm.
Objective Help at the End of Home Care Episodes
Starting this month, referring physicians must be part of every discharge vs. readmit decision made by a home health agency. That could be an imposing prospect for docs newly required to regularly pore over the cases of many patients.
Fortunately Nashville-based technology provider Medalogix has developed an end-of-episode data analysis tool to help guide that decision. The tool is intended to be an objective mechanism to help guide discharge decisions during the recertification period at the end of each 60-day care interval. Better identification of patients at most risk of worsening may help prevent needless hospitalizations. It’s been tested with Ohio’s Alternate Solutions HomeCare and Michigan’s Great Lakes Caring.
“To date, the industry has offered caregivers few data-driven clinical insight tools for determining whether a patient needs another round of care or whether they’re ready for discharge,” Medalogix CEO Dan Hogan told Home Health Provider. “Our company’s new end-of-episode planning solution was created to fill that void, ensuring that patients receive the appropriate care at the appropriate time.”
The Medalogix tool also provides watch lists that let clinicians monitor patients as their care episodes wind down and gauge their progress toward health goals.
For more, https://medalogix.com/.
Tele-Emergency Could Be a Rural Money-Saver
Tele-emergency services may be a money-saver for rural hospitals, a December study in Telemedicine and e-Health found.
The benefits primarily come when the services replace backup calls for physician assistants and nurse practitioners in the emergency department, according to researchers from the University of Iowa and South Dakota-based Avera Health. They looked only at Avera’s services in 49 rural hospitals, but determined their analysis could be applied broadly due to the radius of Avera’s services and profiles of the facilities using them.
In a high-revenue/low-expense setting, the investigators concluded, hospitals earned $187,614 by using tele-emergency services. In a mid-range scenario, FierceHealthIT reported, they gained $49,841, and in a low-revenue/high-expense scenario lost $69,588.
“Tele-emergency,” the study concluded, “has the potential to increase rural hospital revenue and savings and to reduce total emergency care costs for an insured cohort or population, a financially advantageous function in a capitated payment system.”
References: MacKinney AC, Ward MM, Ullrich F, Ayyagari P, Bell AL, Mueller KJ. The business case for tele-emergency. Telemedicine and e-Health, 2015 Dec; 21(12): 1,005–11.
Moody’s Warns of Slowdown in Not-for-Profit Hospitals’ Cash Flow
The financial outlook for not-for-profit hospitals remains stable, but they can expect slower growth in patient demand in 2016 as the insurance expansion precipitated by the ACA levels off.
That’s according to a late-year report from Moody’s Investors Service, which warned the outlook could fall to negative if inflation grows faster than hospital cash flow in the healthcare sector over the next 12–18 months. Fitch Ratings also called it negative.
Hospital cash flow grew by 12% in 2014 and 10% through June 2015, Moody’s said, but that growth will slow to 3% to 4% next year. That started last summer, Modern Healthcare reported, and no change in volume is anticipated next year. Further revenue will be lost as patients continue to seek cheaper care elsewhere.
