HealthHombre

Are ACOs Fragile?

The national health expenditure data released last week showed relatively modest 2011 growth, which promptly provoked a back-and-forth about what the figures truly say and what they portend for holding spending in check going forward.  Amid considerable mental gear gnashing, the data have been assessed in light of such potential cost influencers as lingering recessionary effects, clinical v. administrative drivers, and imminent arrival of the full-bore ACA.  Occupying several nodes along the public-opinion continuum, headlines ranged from "Spending Growth at 52-Year Low" to "Americans Boost Spending" to (out on the far edge of the limb) "Future is Not Clear."

More clear is the sharp relief into which the expenditure data cast other data, detailed in a new analysis that suggests a greater risk of Medicare Shared Savings Program underpayment of ACOs in precisely this type of environment -- i.e., when no one's altogether sure about the ups and downs of health care spending.  As a CMS summary put it:

"[T]he role of random fluctuations in year-to-year healthcare spending may play a larger role in savings measurement than previously anticipated. Although CMS is fairly well protected from the chance that an Accountable Care Organization (ACO) would be rewarded inappropriately for savings that did not truly occur, ACOs are much less protected from the analogous chance that they are inappropriately denied rewards for savings that do occur."  (emphasis supplied)

And so as CMS moves forward with the latest wave of ACOs, the agency seems to have its own bets pretty well covered.  ACOs themselves, however, could face "denied rewards," with the risk that genuine savings will go unshared particularly acute for smaller ACOs.  The analysis mused that the new data may mean ACO participation will be skewed toward groups of larger providers better able to buffer themselves against the vicissitudes of future health spending patterns.

In a risky world, ACOs, perceived by some as potentially "fragile" to begin with, seem little strengthened by this latest confluence of data.

Post supported by ContentHealth LLC electronic research platform.

This is Not About the Fiscal Cliff

As news coverage rushes with whitewater intensity toward the fiscal cliff, and as the Administration opens the post-election spigot to launch a growing flotilla of health reform-related measures (see earlier post), the resulting deluge has obscured an undertow of less-prominent-but-nonetheless-significant life sciences developments.  Here's a quick take on a few of the recent items that our research platform snagged in its net: 

• Drugs really do save money.  Many commentators have long been skeptical of pharmaceutical industry claims that use of prescription drugs could save money by avoiding the need for hospital and other health care services.  Now one key player, CBO, has revised its view, finding that new studies show "a link between changes in prescription drug use and changes in the use of and spending for medical services."  Going forward, CBO's Medicare estimating techniques will assume that a rise in the number of beneficiary prescriptions causes a fall in program expenditures.  
• There really is a tax on innovation.  The ACA-required device tax has long been on the public docket, of course, but the IRS final rule helps bring to the surface a "pinch me, I must be dreaming" effect, at least for those of a certain age.  Back in the day, even a mildly negative med-tech policy initiative risked drawing talking-point criticism as a "tax on innovation."  Who could have imagined it would take but a few short years to convert yesterday's frenzied slogan into what is (very nearly) today's literal reality?
• DME really is associated with claims errors.  If CBO (see above) is helping rebut traditional notions about the economic effects of pharmaceuticals, DME seems to be adhering to long-held perceptions, at least based on FY 2012 Medicare payment data.  While the data showed improper fee-for-service payment rates for inpatient hospital, physician/lab/ambulance, and non-inpatient hospital services of 6.8%, 9.9%, and 4.8%, respectively, DME clocked in, according to CMS, at 66.0%.  

None of these developments are significant enough to move health care's tectonic plates, but they remind us of the steady drip, drip, drip that shapes policy truths, old and new.  

Post supported by ContentHealth LLC electronic research platform.

At OMB, New Health Reform Regs Slip into Position

President Obama's reelection means the health reform law will stay on the books, at least in large part.  It also cues the Administration to liberate a host of reform measures that, pending the election, had been held in protective political custody.

Right on schedule, two new proposed rules yesterday slipped into OMB's final-approval pipeline, en route to publication in the Federal Register.  One rule fleshes out key threads in the reform mosaic, including exchanges and essential benefits, while the other addresses market rules for health insurers.  More reform issuances will no doubt follow, but these two should get the post-election implementation festivities off and running.    

The OMB details are here.  

Post supported by ContentHealth LLC real-time research platform.