Please, Boston Nonprofit Hospitals, Can’t You Join Forces Instead Of Competing?

[Crosspost that originally appeared on WBUR’s CommonHealth]

By Michael Anne Kyle and Lauren Taylor

Here in Boston, cooperation between health care providers is a fraught issue.

Competition is fierce among local, not-for-profit teaching hospitals, and the idea of collaboration brings to mind collusion, mergers and monopolies.

Unfortunately, these concerns may be keeping Boston hospitals from pursuing cost-effective strategies to meet federal tax-exemption requirements and improve community health. Over the next year, each of Boston’s 12 hospitals will have to conduct a community health needs assessment (CHNA) to retain their tax-free status. New requirements in the Affordable Care Act specifically encourage collaboration between hospitals and with other health care agencies, such as public health departments.

We argue that doing one, citywide CHNA presents a rare opportunity for high-value, low-commitment coordination among Boston hospitals. Continue reading

Academic Immersion

Editor’s Note: The Petrie-Flom Center is now accepting applications for Student Fellowships for the 2017-2018 academic year. See our website for more information about applying! 

Last week, the New England Journal of Medicine published a Perspectives article describing the “Immersion Day” it holds for its board members. On the Immersion Day, participants don scrubs and shadow front line employees across various parts of the hospital – this might include attending ICU rounds or observing a surgery. The day gives board members the opportunity to meet and engage with staff in a meaningful way as they go about their jobs, painting a vivid picture of the issues and concerns that arise on paper in the board room. In its third year, the program is a resounding success, garnering rave reviews from the trustees. In fact, the hospital has now created an Immersion Day for state policymakers.

Having worked as a clinician before moving into policy and research, this piece resonated deeply with me. I have found my clinical experience to be essential and formative for how I view policy questions. In addition, as I approach the end of my year as a student fellow, I realized that this piece and the concept of immersion describes my experience with the Petrie-Flom Center. Continue reading

Realizing the Potential of Accountable Health Communities

Michael Anne Kyle

The recent $157 million commitment from the Centers for Medicare and Medicaid Innovation (CMMI) for a new “Accountable Health Communities” test model is most welcome. This is major step for the agency in recognizing the significance of social determinants of health in improving outcomes and costs. A New England Journal of Medicine article accompanying the funding announcement does an excellent job of highlighting the extent to which social conditions affect health outcomes and costs.

The program will invest in 44 communities over five years in three progressively advancing tracks: “increasing awareness”, “providing assistance” and “aligning partners”. Evaluation (perhaps proof of concept is more apt) is an important aspect of the model: the goal is not only to find out whether social service linkages affect health outcomes, but what types of interventions work. The awareness and assistance tracks each involve randomizing patients to usual care or an intervention; in the case of awareness, this is information about relevant social services, and in the case of assistance, the patient is provided navigation to facilitate the connection. The alignment track provides navigation, and will not involve randomization; instead, outcomes in these communities will be measured against a matched control site.

The CMMI vision of AHCs (another new acronym, gulp!) reflects emerging trends in health care and antipoverty work. The funding announcement credits initiatives like Health Leads for inspiring the low-touch (e.g., awareness) pathways. The alignment track, meanwhile, aligns very nicely with the work of emerging Medicaid Accountable Care Organizations in states like Minnesota, Colorado, and New Jersey.

Continue reading

Why Sovaldi?

Most readers of this blog will be familiar with the story of Sovaldi (sofosbuvir), a breakthrough treatment for Hepatitis C. Sovaldi is a transformative cure for a devastating disease, but priced at $84,000 per 12-week course, it has distressed insurance budgets (particularly Medicaid) and in many instances, led to rationing of access. As a result, there has been much debate about the appropriate price for such a valuable treatment.

Many have made the case that $84,000 is a pretty good value proposition compared with the ongoing expenses of living with Hepatitis C, or the cost of a liver transplant. Indeed, most of the people whose opinions I admire are willing to accept the $1,000 per-pill price tag (pills cost about $1/ea. to make) as a reward for innovation and incentive for R&D.

Even though I can accept the merits of these arguments, I find that I still cannot shake a visceral sense of injustice. I’m glad Sovaldi exists. I don’t mind that Gilead is making money. And yet, the situation feels profoundly unfair. It took me a long time to figure out why. Continue reading

Consolidation vs. Competition

By Michael Anne Kyle

This summer, four of the five largest national health insurance companies proposed mergers – with each other. The acquisition of Cigna by Anthem and Humana by Aetna would reduce the “big five” to three. Provider groups, including the American Hospital Association and American Medical Association are alarmed, citing the potentially anticompetitive nature of these mergers.

It is true that many aspects of the health insurance market are already highly concentrated. In 2013, there were states where the individual and small group markets were dominated by companies with upwards of 70, 80, and even 90 percent market share. The Affordable Care Act introduced health insurance exchanges in an effort to stimulate competition – and it seems to be working. On the Medicare side, a new report by the Commonwealth Fund found that only one (!) of the nation’s 2,933 counties had a competitive Medicare Advantage market. Medicaid has so much going on that it is the subject for another post entirely – but worth noting here that Medicaid managed care is on the rise and projected to cover more than 75 percent of enrollees within the coming year, so the role of private insurers in Medicaid is growing rapidly.

The insurance companies argue that the upside of consolidation is increased bargaining power with providers, enabling them to negotiate better rates and value-based contracts. It’s important at this point to note that while some provider groups are decrying insurance mergers as anticompetitive, there is a tremendous amount of consolidation underway on the provider side, too. A recent analysis finds that half (150/306) of hospital referral regions (HRR) are highly concentrated, and none are highly competitive. There is evidence that concentrated markets reduce price competition, and may also have implications for quality.

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Introducing the 2015-2016 Petrie-Flom Student Fellows

The Petrie-Flom Center is pleased to welcome our new 2015-2016 Student Fellows. In the coming year, each fellow will pursue independent scholarly projects related to health law policy, biotechnology, and bioethics under the mentorship of Center faculty and fellows. They will also be regular contributors here at Bill of Health on issues related to their research. Continue reading