Status of Medicare Advantage

Medicare Advantage was born after the Balanced Budget Act of 1997 and the Medicare Modernization Act of 2003 and these plans have become increasingly popular.  Enrollment in Medicare Advantage plans has grown 42% since 2010.  The plans are projected to serve 17.6 million individuals in 2015 (31.5% of total Medicare enrollees) and expected to reach 30 million by 2025.

The U.S. government has been interested in expanding the role of these plans and has promoted competition amongst them.  The premise is that increased competition will suppress program spending.  Insurers who wish to be successful in the arena of Medicare Advantage must structure provider contracts which reward the providers for managing patients’ chronic conditions.  The insurers must also share population health data and infrastructure with various providers.  Additionally, the U.S. government has imposed a star rating which uses metrics to grade the plans in an attempt to improve clinical quality.

The Commonwealth Fund studied Medicare Advantage markets in more than 2,900 counties in the United States utilizing the Herfindahl-Hirschman Index (“HHI”).  The HHI is a standard measure of market concentration and is used by the U.S. Department of Justice Antitrust Division as well as the Federal Trade Commission.  With this index, these agencies classify markets into three categories:  nonconcentrated, moderately concentrated, and highly concentrated.  The study also included a detailed analysis of the 100 urban counties with the largest numbers of Medicare Advantage enrollees.

In short, the market share study indicated that there is little competition anywhere in the U.S. among Medicare Advantage plans.  In fact, it showed that 97% of the 2,933 counties fell into the “highly concentrated” category of the HHI.  Those counties comprised 77% of total Medicare Advantage enrollment and served 84% of all Medicare beneficiaries nationwide.  A mere 80 counties fell into the “moderately concentrated” category and only one county in the U.S. meet the criterion for a “nonconcentrated” market; that county is Riverside, California.

The Commonwealth Fund notes that its findings are consistent with previously reported studies by the American Medical Association and the Government Accountability Office.  The study can be found here.


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Telehealth: Sharing of Personal Health Data

U.S. consumers are beginning to use wearable devices to track and collect their personal health data. Over time, we will see more of a willingness to share that data with healthcare providers and intermediaries. Jennifer Kent, the Director of Research Quality & Product Development at Parks Associates, noted “Monetary rewards are generally considered among the strongest incentives to generate consumer response, but the majority of connected health consumers are not ready to share their data in exchange for discounts on services or products at this time.”

Parks Associates produced a report analyzing the adoption and use of Internet-enabled healthcare and fitness devices. The report, titled Digitally Fit: Products and Services for Connected Consumers, covers an array of topics including privacy concerns as a potential inhibitor to smart health device adoption and the extent to which privacy guarantees can alleviate such concerns. Here is a snippet of the report:

50% of U.S. broadband households use an online health tool to communicate with their doctor, access personal health data, or fill prescriptions.

42% of digital pedometer owners are willing to share their personal health data in exchange for a health insurance discount.

35% of smart watch owners are willing to share their personal health data in exchange for a health insurance discount.

26% of consumers with a sleep quality monitor are willing to share their personal health data in exchange for a health insurance discount.

19% of smartphone owners find a master health app that aggregates data from all health apps very appealing.

35% of consumers in U.S. broadband households are very concerned that their personal health information will not remain confidential.

The research team at Parks Associates noted that global revenues from connected fitness trackers is expected to increase from over $2 billion in 2014 to $5.4 billion by 2019 and that smart watch sales will exceed 100 million units in 2019.

The full report can be found here.


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Primary Care Providers’ Views

As the Affordable Care Act begins to be more fully implemented, many are assessing the experiences and perspectives of those on the front lines . . . the physicians. So, just how do physicians feel about the increased reliance on quality metrics and the recent changes in healthcare delivery and payment?

The Commonwealth Fund and The Kaiser Family Foundation surveyed primary care providers about their experiences with and reactions to recent changes in healthcare delivery and payment. The survey was conducted during the first quarter of 2015. Here are some highlights of the survey’s findings:

64% of physicians stated they are paid either through capitation or salary, or through a combination of capitation, fee-for-service (“FFS”), and salary; 34% are still paid exclusively on a FFS basis.

55% of physicians stated their practice receives payment incentives based on measures related to patient experience, quality of care, or the efficiency of the care they provide.

52% of physicians believe that programs which include financial penalties for hospital readmissions (or unnecessary hospital admissions) positively affect quality of care.

50% of physicians state the use of physician quality metrics was having a negative impact on primary care providers’ ability to provide quality care to their patients.

47% of physicians stated that recent trends in the healthcare sector are causing them to consider retiring earlier than planned.

33% of physicians believe medical homes are having a positive impact on quality of care.

The survey also found that approximately half of the physicians view health information technology as having a positive impact. Lastly, survey results reiterated the common theme reported elsewhere about the unenthusiastic physician support for Accountable Care Organizations (“ACOs”); among physicians who are actually in ACOs, only 30% reported seeing positive impacts.

The survey can be found here.


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UAE and Medical Tourism

The UAE healthcare industry is expected to grow at a CAGR of 7% during 2015-2020 and medical tourism is one of the key factors for driving this growth. The country is indeed becoming more and more of a hot spot for medical tourism. Currently over 100,000 people go to Dubai each year for health care, seeking this destination due to is high healthcare standards as well as its location. This industry is an attractive and lucrative market for all medical sectors in the UAE and it is estimated that medical tourism in Dubai is growing at 10-15% per year. A key area of interest is in plastic surgery and thus the country has done much to cater to those needs. For example, in the United States there is 1 plastic surgeon per 50,000 residents and in Brazil (a commonly referenced country for plastic surgery) there is 1 plastic surgeon per 44,000 residents. The UAE, however, has one of the highest concentrations of plastic surgeons . . . 1 per 18,000 residents.

The country is also pouring money into healthcare IT as it seeks to beef up infrastructure and improve upon healthcare services offered. The healthcare IT market in the UAE is expected to grow at a CAGR of 11.12% during 2014-2019.

The UAE is well positioned for further advancement in the medical tourism industry because of its world-class doctors and state-of-the-art medical facilities, impressive regional infrastructure and safety, and newly designed processes to make medical travel easier. Going forward, the UAE will undoubtedly focus on areas that are high drivers of medical tourism such as cardiology, cosmetology, neurology, and rehabilitation.

Furthermore, it is expected that the UAE will continue to work very hard on its efforts at medical tourism to compete with countries that offer healthcare services to medical tourists at very low costs; countries such as India, Malaysia, and Thailand. To this end, acceptance of global insurance networks will help to expand the reach of those who desire to be treated in the UAE.


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High Value Care Assessment

High Value Care (“HVC”) can be defined simply as care that balances the benefits, harms, and costs of tests and treatments. Authors of a recent study wrote “Faculty discussions of HVC during patient care correlated with such knowledge and practice and may represent an opportunity to improve residents’ competency in providing value-based care.”

The American College of Physicians and the Alliance for Academic Internal Medicine designed a survey to gauge U.S. internal medicine residents’ knowledge of, attitudes toward, and self-reported practice of HVC. The survey polled over 18,000 internal medicine residents in the United States. Here are some highlights of the survey’s findings:

88% of internal medicine residents surveyed said they incorporate patient’s values and concerns into clinical decisions

Regarding overuse:

  • 85% of respondents agreed that overuse is driven by defensive medicine
  • 61% stated that overuse is driven by diagnostic uncertainty
  • 55% stated that overuse is driven by patient demand
  • 47% agreed that overuse is driven by inadequate patient follow-up

59% of internal medicine residents surveyed agreed that they reduced healthcare waste within their hospital and/or clinic

46% of internal medicine residents surveyed stated that they incorporate the cost of tests and treatments into clinical decisions

40% of respondents discussed balancing the benefits, harms, and costs of treatments with faculty during patient care at least a few times per week

25% of those surveyed say they know where to find cost estimates for tests and treatments

24% of internal medicine residents surveyed share estimated test and treatment costs with patients

The survey also reported that over two-thirds of respondents declared having adequate knowledge of the benefits and harms of tests and treatments, offering patients alternatives, considering patients’ values and concerns, and avoiding unnecessary care.

The survey can be found here.


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