Tag Archives: Kate Fitch

Healthcare reform and hepatitis C: A convergence of risk and opportunity

Changes from the Patient Protection and Affordable Care Act (ACA) are dominating the healthcare landscape. These changes are very important for people infected with the hepatitis C virus (HCV). Last year there was an increased federal public health effort aimed at diagnosing people with HCV. Baby Boomers, the generation with the most HCV-infected people, has started to become eligible for Medicare.

Further, new treatments for HCV are under development. Undiagnosed individuals and uninsured individuals may represent a population that payors and stakeholders have not yet experienced. This paper discusses how increased diagnosis, increased Medicare eligibility, and newly insured individuals with HCV will affect the U.S. healthcare system.

Comparing episode of cancer care costs in different settings: An actuarial analysis of patients receiving chemotherapy

Cancer patients receiving active treatment with chemotherapy incur four times the costs of cancer patients not receiving chemotherapy. The cost of patients receiving chemotherapy has been reported to vary by site of service, with higher costs when treatment is delivered in a hospital outpatient setting (HOP) versus a physician office visit (POV). Recent reports indicate an increasing portion of chemotherapy is being delivered in HOP settings and less in POV settings, which can increase costs for payors and/or employers.

This study provides new information by examining Truven MarketScan® commercial claims data (index years 2009 and 2010) to calculate the episode cost of chemotherapy delivered in the HOP versus POV settings for specific disease states. HOP costs were 28% to 53% higher than the POV costs depending on the cancer and adjuvant or metastatic stage. In particular, we noted significantly higher per-episode cost for chemotherapy drugs, radiation oncology, imaging (CT, MRI, and PET scans) and laboratory services in the HOP setting.

This report was commissioned by Genentech.

Chemotherapy parity law extends coverage for oral treatments

Nebraska recently enacted a chemotherapy parity law requiring insurance companies to insure oral chemotherapy the same as intravenous cancer treatments. This article in the Lincoln Journal Star cites a 2010 study conducted by Kate Fitch, Kosuke Iwasaki, and Bruce Pyenson on the cost-sharing of oral and intravenous cancer drugs.

Here is an excerpt from the article:

Sen. Jeremy Nordquist of Omaha, who spearheaded the legislation in Nebraska, said the lack of parity in coverage between intravenous and oral chemotherapy medications is a growing problem. Some cancer treatments cost $5,000 to $10,000 a month, and some patients are being forced to pay high out-of-pocket costs for chemotherapy taken orally.

“This … will make life-saving cancer treatments more accessible and affordable for cancer patients,” he said. “The decision about the best course of treatment, whether it be IV chemo or chemo in a pill form, will be made between patients and their doctor, not dictated by their insurance company.”

Nordquist said research shows that when confronted with the reality of high out-of-pocket expenses, many cancer patients forgo expensive therapy and discontinue treatment, in part because they do not want to saddle their families with unmanageable debt.

And because oncologists know how expensive oral medications can be, he said, they often do not prescribe them — even when they think that would be the best option.

The actuarial and benefits consulting firm Milliman Inc. did a study in 2010 that estimated that requiring similar coverage for oral chemotherapy would cost less than $6 a year per person in most insurance plans.

To read the entire Milliman study, click here.

Assessing the use of anticoagulant drugs in the Medicare population

Atrial fibrillation is the most common form of cardiac arrhythmia, better known as an irregular heartbeat. The disorder has significant health and cost concerns for the Medicare population because of its association with an increased risk for stroke and all-cause mortality.

A study published in the May/June issue of American Health & Drug Benefits by Milliman’s Kate Fitch, Jonah Broulette, Bruce Pyenson, and Kosuke Iwasaki used Medicare Part D claims data to assess the use of the anticoagulant drug warfarin in the Medicare population.

Here is an excerpt highlighting key points from the study entitled “Utilization of Anticoagulation Therapy in Medicare Patients with Nonvalvular Atrial Fibrillation:”

• Patients with atrial fibrillation (AF) are at a significant, 5-fold increased risk for stroke and all cause mortality compared with those without AF.

• Oral anticoagulation therapy is recommended by national guidelines as the cornerstone for stroke prevention in patients with AF.

• Warfarin significantly reduces the risk for ischemic stroke; newer anticoagulant agents have shown even greater reduction of stroke risk compared to warfarin.

• Although AF risk increases with age, this present study shows that anticoagulation therapy is underutilized in Medicare beneficiaries who have nonvalvular AF (NVAF), resulting in an increase in ischemic strokes.

• These findings suggest the need to follow guideline-based anticoagulation recommendations in patients with NVAF to prevent strokes and the associated excess in healthcare costs, reduced quality of life, and even death.

• These findings also raise the need to investigate provider compliance with clinical guidelines regarding oral anticoagulation therapy for stroke prevention in older patients (aged >65 years) with NVAF.

A copy of the entire study can be read here.

Winghan Jacqueline Kwong, of Daiichi Sankyo Inc. also co-authored the study.

Double the ACOs

Yesterday, Health & Human Services announced 89 new accountable care organizations (ACOs), doubling the number of Medicare ACOs.

With this in mind we’ve pulled together all of our ACO research into a single location. Here you go:

 
Also, this video offers a nice overview of the ACO concept.

Strategic implications: The cost problem persists. What can be done about it?

The final post in our “Ten strategic considerations of the Supreme Court upholding PPACA” blog series looks at the perplexing question facing American healthcare: What do we do about increasing healthcare costs?

PPACA focuses on expanding coverage and insurance reform, and in some cases it shifts costs from one party to another, but it does not directly affect the unit costs and utilization that are among the major underlying drivers of healthcare costs.

Certain aspects of PPACA have the potential to affect costs. The option to implement an accountable care organization (ACO)13 reprises the managed care movement of the ’80s and ’90s, but with better technology and information, and by transferring the financial risk onto the provider to create an incentive for efficiency. With many potential ACOs already establishing the tools required to succeed,14 this reinvigorated movement is already in motion. The nuts and bolts of an ACO are still the parts needed for a more efficient system.

Most of PPACA’s explicit ACO efforts center on Medicare, and while the Medicare Shared Savings Program (MSSP) and Pioneer Programs will continue, the potential for commercial ACOs15 may prove just as significant.

Accountable care is not a solution to everything that ails the entire healthcare system, but it offers some hope and, to the extent it can meaningfully control unit costs and utilization, it just may work.

Rob Parke and Kate Fitch discuss accountable care organizations here. For more on ACOs, consider reading “ACOs Beyond Medicare” and “Nuts and Bolts of ACO Financial and Operational Success: Calculating and Managing to Actuarial Utilization Targets.” You may also be interested in the Milliman Medical Index.