5 Managed Care Megatrends for 2013 Preparing for seismic shifts

Transcription

1 5 Managed Care Megatrends for 2013 Preparing for seismic shifts Jane DuBose and Kent Rogers HealthLeaders-InterStudy and Acorda Therapeutics

2 5 Managed Care Megatrends for 2013 Preparing for seismic shifts Three years after the passage of healthcare reform, 2013 will be a year of profound change for pharmaceutical manufacturers. The influx of members in public-sector markets and benefits exchanges, new benefit designs and payment model changes will trigger a significant evolution of the payer market. Insurance expansion Public exchanges Medicaid Evolution of benefit design Exchange benefits Evolution, landscape of consumer-driven benefits Patient-centered care how can manufacturers thrive? Evolution of medical homes and ACOs Payment reform Shared savings and total cost of care MCOs join payment changes Managed care begins to thrive in Medicare 2

3 Insurance expansion Millions are set to enter Exchange, Medicaid markets Megatrend No. 1 U.S. safety net expands, big time Exchanges Working poor Medicaid Subsidies Guaranteed issue 3

4 Insurance expansion Millions are set to enter Exchange, Medicaid markets Three years after the passage of healthcare reform, 2013 will be a year of profound change for pharmaceutical manufacturers. The influx of members in public-sector markets and benefits exchanges, new benefit designs and payment model changes will trigger a significant evolution of the payer market. 4

5 Insurance expansion Millions are set to enter Exchange, Medicaid markets The basics of healthcare reform The Patient Protection & Affordable Care Act (PPACA or ACA) Migration of the uninsured population to various governmentsponsored benefits As many as 23 million individuals starting in 2014 Healthcare Exchanges Medicaid expansion A new managed structure is forming known as Accountable Care Organizations (ACOs) 5

6 Insurance expansion Millions are set to enter Exchange, Medicaid markets ACA became law in

7 Insurance expansion Millions are set to enter Exchange, Medicaid markets Uninsured individuals will migrate to Medicaid and Healthcare Exchanges 30 Medicaid/CHIP Employer Exchanges Uninsured Source: Congressional Budget Office, March

8 Insurance expansion Millions are set to enter Exchange, Medicaid markets Uninsured rates vary by state Source: Kaiser Family Foundation 8

9 Insurance expansion Millions are set to enter Exchange, Medicaid markets What is a Healthcare Exchange? President Obama promoted the concept of a health insurance exchange as a key component of his health reform initiative A market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that's best for them, in the same way that Members of Congress and their families can. None of these plans should deny coverage on the basis of a preexisting condition, and all of these plans should include an affordable basic benefit package that includes prevention, and protection against catastrophic costs. - President Barack Obama 9

10 Insurance expansion Millions are set to enter Exchange, Medicaid markets Who is in/out of Exchanges? Working poor Those who make too much money for Medicaid, but have not had employer-sponsored insurance Uninsurables Those not able to find insurance because of medical conditions; may or may not have been in high-risk pools Young invincibles Those in 20s and 30s who have chosen not to pay for insurance in the individual market Prisoners, undocumented immigrants, some religious groups Income so low that a tax return is not filed Enrolled in Medicaid, Medicare, employer program or in a veteran s program Source: HealthLeaders-InterStudy 10

11 Insurance expansion Millions are set to enter Exchange, Medicaid markets Most enrollees will get subsidies Income (% of FPL) Coverage Premiums and cost sharing <133% of FPL Medicaid No premiums and cost sharing is minimal 134%-250% of FPL Exchange Contribution is 3% to 8 % of income Sliding scale cost-sharing credits 251%-400% of FPL Exchange Contribution is 8% to 9.5% of income No cost sharing credits Source: Kaiser Family Foundation 11

12 Insurance expansion Millions are set to enter Exchange, Medicaid markets 18 states & D.C. will run exchanges Sources: Kaiser Family Foundation, HealthLeaders-InterStudy 12

13 Insurance expansion Millions are set to enter Exchange, Medicaid markets Enrollees will have diverse needs Working poor Uninsurables Young Invincibles Native Americans Have been unable to afford benefits Minority have been in high-risk pools Aging out of parents plans States working with tribes on potential enrollment Unmet drug needs High drug needs Low drug needs May have had coverage through IHS Will need as much value as possible in drug purchasing Drug needs complex and specific May enroll in catastrophic coverage plans Cost sharing exempted for those at 300% or less of FPL Source: HealthLeaders-InterStudy, HHS 13

14 Insurance expansion Millions are set to enter Exchange, Medicaid markets How will Patient Assistance Programs (PAP) be impacted by Healthcare Reform? Source: Acorda 14

15 Insurance expansion Millions are set to enter Exchange, Medicaid markets States making calls on Medicaid expansion 2012 Supreme Court ruling makes Medicaid expansion to 138% of federal poverty level an option About half the states were opting in as of early 2013 New program eliminates old categories of coverage ABD and TANF Open to childless adults 15

16 Insurance expansion Millions are set to enter Exchange, Medicaid markets At least 23 states expanding Medicaid so far Sources: Kaiser Family Foundation, state governors, as of March 5,

17 Insurance expansion Millions set to join exchange, Medicaid markets Duals are new managed frontier State Eligibles Program details Mass. 111,000 Begins April 2013, using 6 Integrated Care Organizations who will manage drug benefit; encouraging broader formulary than Part D Wash. 115,000 Begins April 2013, PCMH model in 2013, expanding to MCOs in 2014 and partial capitation by 2015 Ohio 182,000 Begins 2013, using Integrated Care Delivery Systems; five carriers will oversee Rx formulary, coverage Mich. 200,000 Approval expected in states have duals programs in planning stages; 16 million enrollees could be added to Medicaid by 2019 Sources: HealthLeaders-InterStudy, Acorda 17

18 Insurance expansion Millions set to join exchange, Medicaid markets Research implications on insurance expansion megatrend Creates need for razor-sharp focus on cost controls Duals, Medicaid, low-income Exchange enrollees are major sources of new entrants into managed care Manufacturers focus must be on value of therapies to patient health Erosion of employer-sponsored health market As exchanges launch, healthcare organizations will want to focus on research around progression of workplace insurance 18

19 Benefit design Essential benefits and out-of-pocket shifts Megatrend No. 2 consumers get in the thick of health benefits Exchanges Online shopping Health savings accounts Coinsurance Deductibles 19

20 Benefit design Essential benefits and out-of-pocket shifts Market prepares for shifts Fully insured market will shift to benchmark plans Varies by state Used to trigger benefit design for small-group, individual plans both on and off exchange Non-group purchasers will use online marketplaces to select benefits Will require health plans to change sales/marketing models Transparency on costs, benefits, networks, drug coverage Source: HealthLeaders-InterStudy 20

21 Benefit design Essential benefits and out-of-pocket shifts States select benchmark plans Across U.S. Benchmark plans will cover about 62% of drugs in most classes Generous examples: Miss., Va., Vt. and Wash.: benchmark plans cover 85% of drugs Not so generous example: California: plan covers 26% of branded drugs Source: Avalere Health 21

22 Benefit design Essential benefits and out-of-pocket shifts Exchange tiers have these levels Bronze: equal to 60% of full benefit package for benchmark plans Silver: equal to 70% of value Gold: equal to 80% of value Platinum: equal to 90% of value Catastrophic: for people under 30 who can t find coverage that is less than 8% of their income Source: HHS 22

23 Benefit design Essential benefits and out-of-pocket shifts On or off benchmark, out-ofpocket costs going up Almost half (49%) of small-group members have a deductible High-deductibles of $1,000 or more For individual plans, the average deductible was $3,811 in 2011 Drug impact 13% of all workers have separate drug deductible About half of these deductibles are waived for generics Coinsurance Increasingly common for specialty drugs, out-of-network care At least one-third of plans had coinsurance in plan designs in 2011 Sources: PBMI, Kaiser Family Foundation 23

24 Benefit design Essential benefits and out-of-pocket shifts Enrollment (millions) CDHP is now some 10% of market CDHP Enrollment, January 2010 to January 2010 July 2010 January 2011 July 2011 January 2012 July 2012 Source: HealthLeaders-InterStudy 24

25 Benefit design Essential benefits and out-of-pocket shifts Employers/consumers migrating to CDHP CDHP option 58% offer as option Aon Hewitt (large employers) CDHP full replacement 11% have full replacement 37% may convert in 3-5 years Source: Aon Hewitt 25

26 Benefit design Essential benefits and out-of-pocket shifts Research implications on benefit design megatrend Consumers changing the insurance landscape Insurers must begin to compete differently with consumer preferences in mind Manufacturers have opportunities to partner on consumer-oriented research Increased cost sharing will be the new normal Research will need to focus on consumer price tolerances, discount programs 26

27 Patient-centered care Medical homes, ACOs and quality metrics Megatrend No. 3 Patient experience starts to matter PCMH Surveys ACOs HIT NCQA 27

28 Patient-centered care Medical homes, ACOs and quality metrics Before ACOs, there were PCMHs Patient-centered medical home Approach to primary care in which each patient has an ongoing relationship with a personal physician trained to provide first contact and continuous and comprehensive care At least 40,000 practitioners in PCMHs 23,000 in 5,200 practices have NCQA recognition One-half of states have medical homes in Medicaid 19 of 25 pay a PMPM management fee to primary-care physicians Sources: NCQA, National Association of State Health Policy 28

29 Patient-centered care Medical homes, ACOs and quality metrics How does a PCMH work? $$ Funding for PCMHs comes from payers, employers, hospital systems or IPAs Public-sector programs getting federal, state dollars For? Adopting processes like electronic health record use Additional $$ for care management Amount? Most pay $3-$8 PMPM in addition to fee schedule BCBS of Michigan paying 10% bonuses for physicians meeting targets Source: HealthLeaders-InterStudy 29

30 Patient-centered care Medical homes, ACOs and quality metrics What does the money fund? Care coordinators RNs, social workers, NPs Medication counseling, compliance Pharmacists, pharmacy students Patient registries, care plans Electronic medical records, e-prescribing Patient connections to community, resources Social workers, mental health specialists Source: HealthLeaders-InterStudy 30

31 Patient-centered care Medical homes, ACOs and quality metrics Emerging trends in medical homes Specialties Can some medical specialties be medical homes? Examples: Oncology, AIDS, cardiology Only one oncology practice (in Pennsylvania) has Level III recognition from NCQA Neighborhoods Can primary-care focus go beyond practice level? Centura in Colorado is planning to link 198 physicians in 13 communities Hiring health coordinators for each region; report hypertension, tobacco use and BMI Adolescents Recognition of need to focus care for teens Almost two-thirds of adolescents have 2 or more chronic conditions ADHD, depression, asthma, obesity most common issues Sources: HealthLeaders-InterStudy, American Academy of Pediatrics 31

32 Patient-centered care Medical homes, ACOs and quality metrics Finding connections in PCMHs Must-pass elements from NCQA (must pass 5 for Level 1 and all 10 for Levels 2 and 3) Written standards for patient access and communication * Use of data to show access, communication standards are met Use of charts to organize clinical information Patient connection Use of data to ID important diagnoses and conditions * * Adoption of evidence-based guidelines for 3 chronic conditions * Active support of patient self management * * Systematic tracking of tests and follow-up of tests * Systematic tracking of critical referrals * Measurement of clinical/service performance * * Performance reporting by physician or across the practice Pharma connection Source: NCQA 32

33 Patient-centered care Medical homes, ACOs and quality metrics What is an Accountable Care Organization (ACO)? An ACO is a network of hospitals, insurers and doctors that share responsibility for providing care to Medicare patients Instituted by the Centers for Medicaid & Medicare Services (CMS) based on the need to better coordinate the care Medicare patients receive 33

34 Patient-centered care Medical homes, ACOs and quality metrics A new customer base? Accountable Care Organizations 2012 Medicare Pioneer ACOs Shared Savings/New ACOs Source: CMS 34

35 Patient-centered care Medical homes, ACOs and quality metrics Some 450 ACOs are under way Medicare 253 Shared Savings 32 Pioneers Commercial 162 led by national payers Includes Aetna, Cigna, BCBS Medicaid 4 in pilot or operating Colorado, New Jersey, Oregon and Utah Sources: HealthLeaders-InterStudy, CMS 35

36 Patient-centered care Medical homes, ACOs and quality metrics % of market in ACOs is still low Commercial Lives Medicare Beneficiaries Total M Total 50.2 M* ACOs 2.5 M Led by Cigna, Aetna, WellPoint, BCBS of Ill., BS of California MA 13.6 M FFS M ACOs 4 M * Includes dual eligibles Sources: HealthLeaders-InterStudy, CMS 36

37 Patient-centered care Medical homes, ACOs and quality metrics Why ACOs are important On average Medicare beneficiaries have 5 or more chronic conditions 1 in 7 Medicare patients admitted to a hospital has been subject to a harmful medical mistake in the course of their care 1 in 5 Medicare patients discharged from a hospital readmitted within 30 days Source: CMS 37

38 Patient-centered care Medical homes, ACOs and quality metrics Finding connections in ACOs CMS goal Put the patient and family at the center Attend carefully to care transitions Evaluate data to improve care, outcomes Proactively manage the patient s care Innovate around better health, better care and lower growth in costs through improvement Invest in team-based care and workforce Potential pharma connection Message on ease of use, access for product Access to products between inpatient/outpatient care Easily digestible data on product performance Role of Rx in total patient health Consumer digital apps or other solutions Fund RNs, pharmacists focused on adherence, side effect management Sources: HealthLeaders-InterStudy, Acorda 38

39 Patient-centered care Medical homes, ACOs and quality metrics Patient has big role in ACOs Domain for Shared Savings ACOs in Medicare # of measures Details Patient/caregiver experience 7 Surveys measuring physician and system performance Care coordination/patient safety 6 CMS claims, NQF and AHRG standards for COPD, asthma, CHF, medication reconciliation Preventive health 8 Screens (mammography, depression, etc.) using NQF and NCQA standards At-risk population/frail elderly health 12 Management of diabetes, hypertension, heart disease using NCQA, NQF standards AHRQ is Agency for Health Research Quality; NCQA is National Committee for Quality Assurance; NQF is National Quality Forum Source: CMS 39

40 Patient-centered care Medical homes, ACOs and quality metrics Research implications on patientcentered megatrend Healthcare performance ratings gain prominence Healthcare organizations must invest in market research as consumer reviews now have a direct effect on organizations' revenues Consumer reviews can generate up to $3 billion in bonuses for insurers and up to $850 million in penalties for providers in 2013 Managing population health replaces traditional disease management Research may be focused on therapies roles in total health, total population 40

41 Payment reform Capitation, shared savings and total cost of care Megatrend No. 4 - FFS system begins to shift Shared risk M&A Shared savings Total cost of care AQC 41

42 Payment reform Capitation, shared savings and total cost of care Shared savings contracts grow 106 new Medicare Shared Savings contracts announced early 2013 Most are in one-sided risk track Shares in Medicare FFS savings in each of the three years of contracts; no share of losses Must transition to risk for a portion of losses after Year 3 Eligible for up to 50% of savings, not to exceed 10% of target Rewards and risk are in two-sided track Shares in losses Source: CMS 42

43 Payment reform Capitation, shared savings and total cost of care Total cost of care contracts expand Minnesota Total cost of care Massachusetts AQC HealthPartners establishes target 80% of members in TCofCare BCBS of Mass. sets global budget; now touches 77% of HMO members Early results from one provider: reduced ED and inpatient admissions Medical spending was 2% lower among physicians, hospitals in the AQC compared to FFS contracts Sources: HealthLeaders-InterStudy, BCBS of Massachusetts 43

44 Payment reform Capitation, shared savings and total cost of care Episode-based (also called bundled) payment in the mix Definition Who Pros, Cons A single payment for all care needed from all providers in the episode CMS pilot programs Geisinger Health Prometheus Budget predictability, warranties Doesn t account for prevention, population based care Source: HealthLeaders-InterStudy 44

45 Payment reform Capitation, shared savings and total cost of care Vertical systems will change the payment landscape Providers buying insurers Memorial Care (Universal Care) California Vanguard Health/Detroit Medical Center ProCare Health Providers starting insurance arms Sutter Health California Piedmont Health/WellStar Health Georgia Insurers buying providers WellPoint/CareMore Medicare clinics HealthSpring/Bravo Health Medicare clinics Will mean more employed physicians Source: HealthLeaders-InterStudy 45

46 Payment reform Capitation, shared savings and total cost of care Research implications for payment reform megatrend Care delivery models are being transformed More providers will be at financial risk for patient care Research may be focused on changes in patient care among providers bearing insurance risk Research may be focused on effective communications between manufacturers and new stakeholders ACO staff Advanced practitioners in medical homes Joint committees guiding shared risk between payers/providers 46

47 Medicare grows up Medicare Advantage, dual-eligibles and Part D Megatrend No. 5 managed care finds a home in Medicare Part D Doughnut hole Star ratings MTM Med Advantage 47

48 Millions Medicare grows up Medicare Advantage, dual-eligibles and Part D 13M will enter Medicare by Source: Medicare Trustees 48

49 Medicare grows up Medicare Advantage, dual-eligibles and Part D PDP market expanding quickly Medicare Rx Breakout 2011 (in Millions) Medicare Rx Breakout 2012 (in millions) MA-PDP Retiree drug subsidy Stand alone PDP Other* MA-PDP Retiree drug subsidy Stand-alone PDP Other* *Other includes FEHB, Tricare, DOD Sources: HealthLeaders-InterStudy, CMS 49

50 Growth Rate Medicare grows up Medicare Advantage, dual-eligibles and Part D Med Advantage grows faster than overall Medicare 25.0% 20.0% 23.6% Medicare Growth Rates, 2007 to % 10.0% 5.0% 0.0% 10.0% 5.5% 6.6% 5.5% 5.8% 1.1% 2.2% 3.1% 3.9% July 2008 July 2009 July 2010 July 2011 July 2012 Sources: HealthLeaders-InterStudy, CMS Medicare Advantage Overall Medicare 50

51 Medicare grows up Medicare Advantage, dual-eligibles and Part D Star ratings up quality ante 36 topics in 5 categories for Med Advantage (2013) Source: CMS Staying healthy: screenings, tests, and vaccines Includes how often members got various screening tests, vaccines, and other check-ups that help them stay healthy Managing chronic (long-term) conditions How often members with different conditions get certain tests and treatments that help them manage their condition Ratings of health plan responsiveness and care Includes ratings of member satisfaction with the plan Health plan member complaints and appeals Includes how often members filed a complaint against the plan Health plan telephone customer service Includes how well the plan handles calls from members 51

52 Medicare grows up Medicare Advantage, dual-eligibles and Part D Star ratings up quality ante 17 in 4 categories for Part D (2013) Source: CMS Drug plan customer service Includes how well the drug plan handles calls and makes decisions about member appeals Drug plan member complaints and Medicare audit findings Includes how often members filed a complaint about the drug and findings from Medicare s audit of the plan Member experience with drug plan Includes member satisfaction information Drug pricing and patient safety Includes how well the drug plan prices prescriptions and provides updated information on the Medicare website 52

53 Medicare grows up Medicare Advantage, dual-eligibles and Part D Medication therapy and Part D Purpose Improve medication use Improve adherence Reduce risk of adverse events Targets Those with multiple chronic diseases* Those taking multiple drugs Those likely to incur $3,144 in Rx costs in 2013 Activities Annual comprehensive medication review Quarterly targeted medication reviews * If sponsors chose to target chronic diseases, they must include at least five of these: Alzheimer s disease, CHF, diabetes, dyslipidemia, ESRD, hypertension, respiratory disease, bone disease, mental health Source: CMS 53

54 Medicare grows up Medicare Advantage, dual-eligibles and Part D Research implications for maturing Medicare megatrend Baby boomer age-ins to Medicare may change drug utilization patterns Research may target varying cohorts of Part D market Star ratings ramps up quality of care in Medicare Advantage plans Manufacturers have continued role in improving MCO scores, helping providers deliver results through drug therapies 54

55 Megatrends conclusion Insurance expansion, benefit design, patient-centered care, payment reform, Medicare grows up Research implications for 5 megatrends We are at the cusp of change in 2013 PPACA, nation s fiscal problems will shift health systems in unprecedented ways Expect more M&A activity, more partnerships, more forced efficiencies For researchers, stakeholders will change and consolidate and will need clear value proposition Volume-oriented system may start to unravel Fewer procedures, fewer drugs will create research opportunities, and manufacturing/marketing challenges But if exchanges succeed, access to drugs will increase 55