Headlines from the June meeting of the American Society of Clinical Oncology (ASCO) in Chicago announced to the general public what oncologists and hematologists have known for more than 2 years: sporadic shortages of cancer drugs are forcing suboptimal treatment plans for patients, and government efforts have not filled the void.

Two months after 3 surveys were presented at the 49th Annual Meeting of ASCO, 

 asked both the US Food and Drug Administration (FDA) and Keerthi Gogineni, MD, MSHP, who presented one of the studies in Chicago, to offer updates on cancer drug shortages. Gogineni, a medical oncologist in the Abramson Cancer Center and the Perelman School of Medicine in Philadelphia, was a co-author of the study conducted at the University of Pennsylvania.

While the FDA’s Lisa Kubaska, PharmD, reports that the 2012 Food and Drug Safety and Innovation Act (FDASIA) is helping the agency identify shortages and find temporary solutions, such as importations of drugs, Gogineni states that some shortages remain, even though the FDA is “doing what it can.”

“There are factors that contribute to drug shortages that the agency has limited control over,” Gogineni said. Kubaska and Gogineni agree the majority of shortages are due to quality control problems at several large manufacturing plants making drugs. Kubaska said preventing shortages is a “top priority,” and that passage of FDASIA has enhanced the agency’s ability to anticipate pending problems through an early notification system.

But the FDA and physicians like Gogineni on the front lines view things differently. Said Kubaska, “There has been 1 new shortage in 2013, Lomustine tablets, which was resolved through import of a drug with unapproved packaging until the approved package could be made available.”

Gogineni said her own “has had considerable difficulty acquiring this drug to treat patients with brain tumors. There is an ongoing attempt to obtain this drug by enabling NextSource Biotech to import the product but under a different trade name…Theoretically this should have made emergency supplies of the drug easier to obtain by July 2013, but practically speaking, this hasnot been the case.”

 94% of 214 oncologists and hematologists said their patients’ treatment had been affected by drug shortages between March and September of 2012. Of those doctors reporting shortages, 83% said they had been unable to provide standard chemotherapy at some point during that time period, and 13% reported that patient enrollment or continuing participation in clinical trials had been compromised due to drug unavailability. Two-thirds of the respondents work in community oncology settings.

A separate pair of surveys conducted by ASCO reported that members of the organization noticed only a slight easing of drug shortages between October 2012 and April 2013, but during the same period became increasingly concerned about the limited availability of treatments critical to supportive cancer care, such as antiemetics, pain medications, and basic IV fluids and electrolytes.

In the University of Pennsylvania survey respondents said that the drugs most commonly in shortage were leucovorin, liposomal doxorubicin, 5-fluorouracil, bleomycin, and cytarabine. (According to Kubaska, the FDA arranged to have the first 2 temporarily imported to address the shortage.) These drugs are commonly used in the treatment of various forms of cancer, including gastrointestinal, blood, breast, ovarian, and testicular cancers. Cytarabine is particularly critical for curing certain forms of acute leukemia, ASCO stated.

Researchers noted that doctors adapted to such shortages in different ways, including switching treatment regimens (78% of doctors), substituting alternate drugs partway through therapy (77%), delaying treatment (43%), choosing among patients to determine which should receive the available supply of the chemotherapeutic agent (37%), omitting doses (29%), reducing doses (20%), and referring patients to another practice where drugs in shortage were available (17%). Most providers (70%) said they had no institutional guideline or committee to help make the difficult treatment modification decisions.

“We were surprised by the large number of cancer doctors that had to make changes in the way they care for patients due to drug shortages,” Gogineni said in Chicago. “Unfortunately, cancer drug shortages will likely be a persistent issue. Doctors are adapting to this new reality as best as they can, but more uniform guidance is needed to ensure that modifications are made in the most educated and ethical way.”

The research was supported, in part, by a Pfizer Medical and Academic Partnership Research Fellowship in Bioethics. ASCO’s 2012 and 2013 surveys of its members asked whether, in the previous 6 months, legislative and regulatory efforts to address drug shortages had been effective. A total of 390 and 462 doctors, respectively, responded.

Although the results from the second survey suggested that chemotherapy drug shortages may have eased very slightly, the changes were small, and practices were still faced with the need for drug substitutions.Moreover, respondents expressed growing concern over the shortage of supportive care drugs. In the more recent survey, 59% of responding physicians were aware of ongoing drug shortages in their own or colleagues’ practices, versus 70% in the earlier survey.

Also in the 2013 survey, more than 40% of doctors said that drug shortages had not been resolved. Seventeen percent said the shortages were worse than in the fall of 2012, 16% responded that they were the same, and 9% that some shortages had improved while others had worsened.

“Quality cancer care also means providing patients with the right treatments at the right times, and we’re learning today that cancer drug shortages are still interfering with that mission,” said ASCO spokesperson Andrew D. Seidman, MD, an oncologist at Memorial Sloan-Kettering Cancer Center in New York City. “This ongoing crisis must not be forgotten—it demands urgent solutions from regulators, policy makers, and manufacturers today.”

According to ASCO, generic drugs, especially common chemotherapies, have been most affected by shortages. In oncology, there are often no replacements for the standard agents that have been shown to improve survival, the organization organization reported, and when there are substitutes available, they are sometimes brandname drugs, which can be severalhundred-fold more expensive. This cost burden is shared by patients and institutions, as brandname drugs typically have higher copayments and out-of-pocket costs, ASCO stated.

In many cases, ASCO said, there is also a lack of clinical trial evidence to determine the appropriate dose for the substitute drug. In addition, according to a survey taken by the Institute for Safe Medication Practices,

 mistakes are sometimes made in the formulations or strengths of drugs given as alternatives for medications in short supply. Drug shortages have also spawned borrowing and hoarding among medical institutions, the sale of counterfeit drugs, and a gray market for medications in limited supply, experts have said.

“ASCO believes that there are likely numerous causes of drug shortages and will continue to call on Congress to convene a blue ribbon panel that includes providers, manufacturers, suppliers, FDA, and patients to develop comprehensive legislation to resolve these critical shortages,” said ASCO Chief Medical Officer Richard L. Schilsky, MD. “The Government Accountability Office is also conducting a comprehensive investigation of the causes of the shortages, and we will be eager to learn its assessment when the report is published early next year.”

At last year’s annual meeting of ASCO, Rear Admiral Sandra Kweder, MD, deputy director of the FDA’s Office of New Drugs, blamed the shortages on manufacturing and quality problems and the plant closures that often result. Most shortages have involved sterile injectable drugs, she said, and as of last June, more than half of those were “due to product quality issues such as particulates, microbial contamination, impurities, and stability changes resulting in crystallization.”

Shortages may also occur due to industry consolidation, increases in demand, and a lack of access to pharmaceutical ingredients, she said. Why does one plant shutdown prove so disruptive? In late July, Gogineni told EBO that there are a combination of underlying reasons. “There is little redundancy in the system,” she said, and there is “a marked increase in new sterile injectable product applications without a concomitant increase in manufacturing capacity (which) has led firms to divert production to more expensive, branded agents.”

The FDA, Gogineni explained, is authorized to address quality issues, but its ability to boost manufacturing capacity is quite limited—it can expedite reviews of “new” manufacturers. “It can take years for a manufacturer to increase capacity. There are few penalties for failing to supply critical drugs, and no incentive for companies to invest in ‘excess’ capacity. This is not something the FDA would have control over,” she said.

Alongside the financial incentives to produce new drugs, Hagop Kantarjian, MD, a professor and chair of the Department of Leukemia at the University of Texas MD Anderson Cancer Center in Houston, has blamed the shortages on the extremely low price of generics, which he said can’t be raised to meet demand due to a Medicare physician reimbursement formula. Under the recent government sequestration that slashed the budgets of many federal agencies, including the FDA, that formula became even more likely to hold down the prices of generic drugs, a dynamic that could further contribute to drug shortages, Schilsky said at the June 3rd press briefing.

The FDASIA, which became effective in October 2012, requires drug manufacturers to alert the FDA 6 months in advance about anticipated market withdrawals or drug-supply interruptions. The aim is to give the FDA time to step in with tactics such as helping to arrange for other companies to pick up the slack. In the 6 months that followed the passage of the FDASIA, there was a 6-fold increase in early notifications from manufacturers, Commissioner Margaret Hamburg, MD, wrote on the FDA’s website. In that 6 months, the FDA prevented 128 drug shortages and saw fewer occur—42 reported between January and May 2012, compared with 90 new shortages reported during that period in 2011, she stated.

“This data is a testament to how the FDA exercises flexibility and discretionin much of our work on drug shortages and the importance of strong collaboration and constant communication with industry, health professionals, and patients,” Hamburg wrote. Schilsky added that he is hopeful about another tenet of the FDASIA, which requires generic drug makers to contribute money intended to bolster the FDA’s resources, so it can review generic drug applications more quickly and conduct swifter inspections of generic drug manufacturing facilities when questions about safety come up.

Based on anecdotal evidence, Schilsky said, he believes that similar shortages are ongoing in many European countries.

1. Emanuel Z, Shuman K, Chinn D, Gogineni K. Impact of oncology drug shortages. Presented at: 49th Annual Meeting of the American Society of Clinical Oncology; May 31-June 4, 2013; Chicago, Illinois. Abstract CRA6510.

2. A shortage of everything except errors: harm associated with drug shortages. Institute for Safe Medication Practices website. http://www. ismp.org/newsletters/acutecare/showarticle. asp?id=20. Published April 19, 2012. Accessed June 3, 2013. 

Articles

Evidence-Based Oncology

Drug Shortages Persist in Wake of Surveys

The federal sequester trims Medicare payments for cancer patients receiving chemotherapy in doctors’ offices in an effort to save the government money. Instead, it will end up costing more in the long run, according to the president of the American Society of Clinical Oncology (ASCO).

ASCO President Clifford A. Hudis, MD, said most community-based oncology practices that operate under the “buy-and-bill” system, in which providers purchase chemotherapy drugs for longer accept Medicare patients. Hudis pointed out that the results of this survey should be interpreted with caution, as it was voluntary in nature (ie, selection bias may be an issue).

The results of a separate survey of 326 practices by the Community Oncology Alliance do support ASCO’s findings, however. In addition, one-fifth of practices reported that they have reduced administrative staff, and two-fifths expected that they would do so should the cuts remain in effect through midsummer. Interestingly, 14% of practices surveyed indicated that they are now considering renewed discussions with hospitals to form closer relationships, including being acquired by them.

Intensive clinical research continues to be a force behind advances in cancer treatment. Sequestration seems to be affecting oncology clinical research at the national level and local level. As part of sequestration, the National Institutes of Health (NIH) took on-site treatment and then bill Medicare, cannot afford to absorb the cuts imposed under the Budget Control Act of 2011, popularly known as the “sequester.” So, Hudis and others told 

, these providers have been forced to refer patients seeking certain chemotherapy treatments to hospitals, where reimbursements—and costs to Medicare&mdash;are greater. It is not yet known how much this practice is costing the federal government.

“This is one of the true disappointments of the whole sequester—it’s converting lower total costs associated with physician office care into higher costs incurred at the hospital-based setting,” Hudis said. “It’s going to significantly increase the cost of delivering the same care while making it frequently less convenient.”

“It’s quite an amazing paradox,” he said.

Since the financial sequester took effect in April, medical providers, patients, and health plan administrators have worked to adjust to both immediate and long-term implications. The picture in cancer care has many aspects: There are effects on patients undergoing care, and there are effects on research into new treatments for future patients. While other areas of the federal government sustained deeper cuts by the Budget Control Act, Medicare payment cuts were limited to 2%. This applies to payments to Medicare Advantage plans and providers while also affecting physicians who purchase part B medications, administer them onsite, and seek reimbursement from Medicare (referred to as “buy-and-bill”). A 2% cut may not sound like much, but it is having alarming effects.

The already-slight margins on office-based infusible products means that oncology practices are making extremely difficult decisions regarding whether to continue providing infused chemotherapy to their patients. For some, the choice involves whether to continue treating these patients or lose money on their medications. “If we treated the patients receiving the most expensive drugs, we’d be out of business in 6 months to a year,” according to Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York.

 He told the Washington Post, “The drugs we’re going to lose money on, we’re not going to administer right now,” noting that Medicare beneficiaries comprised more than half of his practice.

The result, according to Hudis and other clinicians, is that patients are being directed to hospitals or clinics to receive the treatments, with the result being greater expense to Medicare. A study by Milliman, the actuarial consulting firm, estimates that chemotherapy given in a hospital costs on average $6500 more annually than chemotherapy provided in a community-based location.

Furthermore, the question arises as to whether hospitals can handle the increased load: In 2011, Milliman found that 33% of patients were receiving their chemotherapy in a hospital setting. This may actually be exacerbating a trend toward administering chemotherapy in hospital-based outpatient centers. A study of fee-for-service Medicare data found that this shift has been continuing since the implementation of average sales price (ASP) pricing.br /> Preliminary results from a study by the Moran Company revealed that in 2005, fully 87% were receiving chemotherapy in physician offices compared with just 13% in hospital settings.

William T. McGivney, PhD, principal of McGivney Global Advisors, stated, “Sometimes, federal government policies are ‘misdirected.’ The sequestration cuts in reimbursement for oncologic drugs and biologics (therapeutic and supportive care) fall into a new category of ‘undirected misdirection.’ ” McGivney, the former CEO of the National Comprehensive Cancer Network (NCCN), added, “Gaps in current federal reimbursement levels for oncologic agents have been amplified by the sequestration cuts, and this, in turn, has exacerbated an already difficult situation into one that jeopardizes patient access.”

When clinics and physicians purchase chemotherapies for administration at their facilities, they had been receiving reimbursement of the ASP of the agent plus 6%. According to ASCO, the sequestration has reduced this reimbursement effectively to ASP plus 4.3%. This change is enough to erase their small margins and put their practices into the red, especially when purchasing expensive infusible products. This is driving oncologists and their practice administrators to advise patients that they are no longer providing chemotherapy at their offices.

A survey of 500 oncologists by ASCO revealed that close to one-half were “no longer able to continue caring for Medicare patients unless they had supplemental insurance.”

 The survey, completed in May 2013, also specified that 50% of practices were reportedly sending their Medicare patients who need chemotherapy to hospital outpatient infusion centers 

 A total of 14% reported that they no longer accept Medicare patients. Hudis pointed out that the results of this survey should be interpreted with caution, as it was voluntary in nature (ie, selection bias may be an issue).

Intensive clinical research continues to be a force behind advances in cancer treatment. Sequestration seems to be affecting oncology clinical research at the national level and local level. As part of sequestration, the National Institutes of Health (NIH) took a 4.7% hit to its operating budget, including clinical research trial grants.

Since NIH is a major source of funding for drug trials, this will certainly result in fewer cancer drug therapy investigations over time, and possibly, slower delivery of oncology medications to the FDA for drug approval.

Patients participating in active clinical trials may be especially hard hit in less-populated areas. In areas with few cancer treatment centers, there may be no option for those patients if their treatment center decides to turn away patients—any facility participating in a clinical trial must be individually approved. That patient may be forced to go across state lines to continue in the trial at an approved facility.

In clinical trials, the chemotherapy under investigation is usually provided to the patient free of charge, but this may not be the case with supportive or ancillary therapies for their care. From a practical view, Hudis believes that less will seem different at the community level than meets the eye. “The community is so dedicated to doing clinical trials, and frankly has a history of doing clinical trials even when they represented a financial loss,” Hudis explained, “that most patients are likely to keep getting their care in studies that are ongoing. So the impact of this could arguably not be fully appreciated for many months to years—new trials are not started, and the old trials that close aren’t replaced.”

It is expected that the next federal budget will address the current across-the-board cuts, retaining much of the savings obtained through the sequestration. The situation compelled some legislators to take immediate action. Marilyn B. Tavenner, CMS administrator, responded to a request by more than 100 legislators to avoid chemotherapy reimbursement cuts, replying on June 3, “The Department of Health and Human Services assessed whether the law allows discretion to administer the sequestration reductions in a manner that is different from the across the board approach that has been used to implement it. We do not believe that we have the authority under the Budget Control Act of 2011 to exempt Medicare payment for Part B drugs.”

Since CMS does not believe that it has the authority under the Budget Control Act to decide where cuts can be avoided, congressional intervention will be necessary to effect a change in the law. A bill introduced by US Rep. Renee Ellmers (R-NC) has received bipartisan support in the House, capturing 101 co-sponsors by late July. The legislation, the Cancer Patient Protection Act of 2013 (H.R. 1416), would exempt chemotherapy from the 2% cut in payment. It has been referred to the House Budget Subcommittee on Health.

, Ellmers said, “What’s needed is momentum and public awareness. Many members were waiting to hear from CMS before they would agree to a legislative fix. Now that CMS has responded and said they will not act, members of Congress know the ball is in their court.” Ellmers continued, “Furthermore, support for this bill has been enhanced by evidence from oncologists across the country that they are sending patients to the more expensive hospital setting because of CMS’s application of the cuts.” She has seen negative effects in her own district, spurring her to act. “I have heard from numerous oncologists and cancer centers throughout the second district of North Carolina,” she stated. “They have reported that, already facing small profit margins, their centers are concerned that CMS’s application of these cuts will put them  out of business.

“I have also heard from the Blood & Cancer Clinic in Fayetteville, North Carolina. They have had to send several patients to the local hospital. This is unfortunate because most of the patients have received several treatments in their office already, but are now suddenly forced to transfer to the hospital. Their patients are very frustrated. Most of them are sick and would benefit from staying with their clinic,” according to Ellmers. This would be a welcome change in attitude, based on ASCO’s initial meetings on Capitol Hill. Hudis stated, “The last time we actually spoke with representatives and senators about the impact of the sequester, we pointedly highlighted the exemption that they carved out for the air traffic controllers and the FAA. Our arguments, though, seemed to fall on relatively deaf ears.” 

“The near-term probability of relief, legislative or regulatory, seems modest,” McGivney told 

. “Thus, providers likely will to have to deal with staying afloat as the delivery/ payment system remains awash in cuts, mandates, and change. 1. Kliff S. Cancer clinics are turning away thousands of Medicare patients: blame the sequester. The Washington Post, April 3, 2013.

2. Fitch K, Pyenson B. Site of Service Cost Differences for Medicare Patients Receiving Chemotherapy. Milliman Inc. October 19, 2011 http://publications.milliman.com/publications/healthpublished/pdfs/site-of-service-cost-differences. pdf). Accessed June 12, 2013.

3. Results of Analyses for Chemotherapy Administration Utilization and Chemotherapy Drug Utilization, 2005-2011 for Medicare Fee-for-Service Beneficiaries. The Moran Company 2013; unpublished data.

4. ASCO sequestration impact survey: one month out, sequestration affecting care of Medicare cancer patients. American Society of Clinical Oncology, May 9, 2013 (www.asco.org/press-center/asco-sequestration-impactsurvey-one-month-out-sequestration-affectingcare-medicare). Accessed June 14, 2013.

5. Fact sheet: Impact of sequestration on the National Institutes of Health. National Institutes of Health (http://www.nih.gov/news/health/jun2013/nih-03.htm). Published 2013. Accessed June 16, 2013.

6. Tavenner M. Letter to the Honorable Pete Sessions. Centers for Medicare & Medicaid Services, June 3, 2013. 7. Bill Summary & Status, 113th Congress (2013 - 2014), H.R.1416. The Library of Congress, June 24, 2013 (http://thomas.loc.gov/cgi-bin/bdquery/z?d113:h.r.01416:). Accessed June 24, 2013.

Sequester Forcing Chemo Treatments into Hospitals Costing Taxpayers More in the End

Governor Steve Beshear did not sugarcoat the data May 9, 2013, when he said Kentucky would take an offer it couldn’t refuse. With his state ranked worst in the nation in smoking and cancer deaths, and not far behind in heart disease, Beshear was “tired of being at the bottom.” 

It was time for strong medicine—in the form of $608 million in new healthcare spending, which will come January 1, 2014, when Beshear accepts federal help to put 308,000 new people on Medicaid.

Another 800,000 Kentucky residents are already in the program.

 The decision followed Beshear’s 2012 call for Kentucky to create its own exchange to sell health insurance under the 2010 Affordable Care Act (ACA). In theory, all 640,000 uninsured Kentuckians should be able to gain health coverage.

 Cutting Kentucky’s cancer rates is a tall order, and Beshear is candid about the link between that grim history and his state’s economic conditions. Taking the Medicaid money, in his view, was the only choice that made sense.

“Kentucky is one of the least healthy states in the nation. In 2012, Kentucky’s overall health ranking was 44th. Kentucky is at or near the very bottom of many national health rankings,” Governor Beshear told 

A multitude of state and national reports have shown the positive impacts on health status that occur when an individual becomes insured. They are more likely to get preventive care and seek out medical treatment when they need it. They miss fewer days of work and school. And they live longer and more productive lives.

“By the time we reach 2020, I believe we will have seen such a measurable impact on prevention of disease, management of chronic health problems, and overall health of our workforce that to withdraw or shrink from Medicaid expansion would be unthinkable.”

Beshear, a prostate cancer survivor, feels he is on solid footing, morally and practically. The expansion affects single persons with incomes of up to $15,856 per year or a family of 4 with an income of up to $32,499;

 many of these are working poor. The infusion of healthcare spending will create 17,000 jobs and $15.6 billion in economic activity,

reduce absenteeism, and improve job performance to make Kentucky workers more attractive to industry.

Over time, Beshear believes, healthier children will miss fewer days at school, and the commonwealth will see economic benefits from a healthier population.

 All this will require confronting Kentucky’s historic links to coal and tobacco, and resulting rates of cancer, especially lung cancer. “While my primary concern is for the improved health outcomes that will be possible for many of our citizens through the expansion of Medicaid, my decision was not solely based on the obvious health benefits that extending insurance coverage will provide to the people of Kentucky. It was also based on the far-reaching economic benefits of expanding Medicaid,” Beshear said.

“If a company was willing to invest $15.6 billion in Kentucky in the next 7 years, creating nearly 17,000 jobs and significantly reducing the uninsured population, while greatly improving the health of our citizens, we would not hesitate to welcome them into our state. Medicaid expansion is no different.” 

Kentucky health officials must overcome political and logistical hurdles, not to mention cultural ones. A fee-for-service delivery system, saddled by ignorance, poverty, and occasionally the belief that “God’s will” would determine the outcome, had to be replaced by one that relied on regular screenings and outreach. Healthcare advocates and observers said the record of failure meant that when the state’s poor interacted with the medical system, there were few expectations. “Folks are not accustomed to getting healthcare and having healthcare work,” said Susan Zepeda, PhD, president of the Foundation for a Healthy Kentucky. “They may have family members who were diagnosed so late that the diagnosis was a death sentence.”

But critics of Kentucky’s approach say the state has rushed too quickly into managed care, in a quest to upend delivery systems that caused some low-income or rural residents to wait too long to seek treatment.

 In the breathtaking sprint to move 70% of the state’s 800,000 Medicaid recipients into managed care organizations (MCOs) for the first time, Kentucky Medicaid Commissioner Larry Kissner admits there were many bumps.

Over the long haul, however, Kissner insists the accountability of managed care under health reform will make a difference: In the first year, he said, officials are reaching more than 80% of Medicaid patients for regular screenings; once that baseline is established, officials will be able to track progress in measurements like blood sugar over time. Better still will be when more consistent healthcare shows up in higher test scores among school-age children, or lower smoking rates in the next generation of adults.

From academia to government, those who know Kentucky’s system hope to finally bridge a gap that has long existed: In a commonwealth with world-class healthcare at universities in Louisville and Lexington, there are aching needs among some of the most isolated, impoverished poor in the nation.

On paper, Kentucky envisions a system of federally funded health centers and managed care networks, providing regular screenings like colonoscopies and mammograms. Telephone calls would remind cancer patients when to come in for care, and will provide follow-up that the old system never could.

It remains to be seen whether cancer care delivery under Kentucky’s new model can serve a rural population. Steven W. Wyatt, DMD, MPH a veteran of the Centers for Disease Control and	Prevention (CDC) who returned to his native state to become dean of the College of Public Health at the University of Kentucky, said getting more rural people enrolled in Medicaid is only the first step. “Just because you remove the cost barrier doesn’t mean you are going to increase the access,” Wyatt said. “It’s all about other things that surround the payment of services.” Things like transportation, or missing work, or not having anyone to watch a child or grandchild, or just the fear factor of coming to a modern campus like the Markey Cancer Center in Lexington. “Navigating a university setting can be intimidating,” he said.

	Zepeda concurred. Although Kentucky has a “more robust” network of federally funded health centers than existed even 5 years ago, she said, expanding Medicaid rolls and subsidized insurance mean “there will be capacity issues, particularly in rural areas of the state.”

	With open enrollment under the ACA set to begin October 1, 2013, the pace of change remains swift. On May 9, Governor Beshear declared the Medicaid expansion “the single-most important decision in our lifetime for improving the health of Kentuckians,” and invoked his right to change Medicaid eligibility by regulation, not by statute as occurs in most states. Until 2017, when the expansion will require state matching funds, there is little the Legislature can do.

	Within days, Kentucky had launched a website (www.kynect.ky.gov) to help residents understand healthcare reform and to shop for coverage. A series of forums with the state’s Medicaid providers followed, allowing them to get information and to vent about the rapid conversion to managed care. Kentucky’s healthcare efforts appeared in the national press almost daily in July; on some days the news was positive, like when the National Governors’ Association (NGA) included Kentucky in a demonstration project to reduce the number of “super-utilizers” in its emergency departments.7 On other days, the reviews were poor: Kaiser Health News and The Washington Post offered a brutal assessment of the Medicaid program’s transition to managed care, with critics stating that its only aim was to fill a $1.3 billion budget hole.

	July 12 offered the biggest news of all: After years of effort, the University of Kentucky’s Markey Cancer Center received a National Cancer Institute (NCI) designation, giving Markey eligibility to compete for millions in additional funding and the best faculty in the world. In their announcement, Markey officials said that Kentucky residents would gain access to better chemotherapy agents and to clinical trials.

University of Kentucky President Eli Capilouto, in making the announcement, said the designation strengthens Markey’s potential “to roll back this scourge in Kentucky.”

	Kentucky’s fight against lung cancer starts with this fact: According to the Department of Public Health, 28.4% of the commonwealth’s adults smoke.

 It’s not easy to curb tobacco use when generations of farmers have grown it, and when tax coffers have relied on its sale (Figure 1). “Our disease burden is heavily driven by lung cancer,” said Wyatt. While there are some other anatomical cancers with elevated rates relative to the rest of the country, such as breast and colon cancer, Wyatt said nothing comes close to lung cancer. “Take out lung cancer, and we look closer to the rest of the country.”

	State-by-state mortality rates bear out Wyatt’s observation. SEER data, published by the NCI and the CDC, show lung cancer death rates in Kentucky of 71.7 per 100,000 residents among whites and 76.7 per 100,000 among African Americans for 2006 to 2010; corresponding rates for the United States were 48.1 among whites and 50.7 among African Americans.

 While rates for some other cancers exceed US rates, nothing comes close to lung cancer (Figure 2).

	It’s not hard to understand why: At 87,641 acres, Kentucky devotes more land to growing tobacco than any other state except North Carolina, according to the US Department of Agriculture.

 But over the past decade, tobacco’s hold on the state’s economy has slipped. In the mid-1990s, University of Kentucky economist Will Snell estimated sales of Kentucky tobacco at $900 million; by 2009, a combination of fewer farms and lower prices had cut that figure to $390 million.

people around the nation were quitting, driven by greater knowledge, higher state taxes, indoor smoking bans, or a combination of the 3. And bans weren’t just happening elsewhere: On July 1, 2003, the college town of Lexington was the first in Kentucky to pass a smoking ordinance, which was upheld by the Kentucky Supreme Court the following year.

 As of July 1, 38 Kentucky towns or counties had indoor bans of varying degrees.

 In February 2013, a statewide indoor ban passed a Kentucky House committee for the second year in a row, although its prospects in the Senate were unclear. Governor Beshear has publicly endorsed the indoor ban.

	Sarah Walsh, Foundation for Healthy Kentucky program director, said polling data from early 2013 show that for the first time, more than half of adults in Kentucky of both parties support an indoor smoking ban. This is important politically, because it reduces fears of elected officials that they would be challenged in a primary for supporting a smoking ban. Overall, the poll, which was funded by the Foundation and conducted by the Institute for Policy Research at the University of Cincinnati, found that 59% of adult Kentuckians support an indoor smoking ban. These findings confirmed a University of Kentucky study that found support for smoke-free laws in rural areas.

	Commissioner Kissner said healthcare reform, and the expansion of Medicaid in particular, will allow Kentucky to reach a whole new population with programs to help people quit smoking. This will follow a near doubling of the program from 2011 to 2012, when Governor Beshear expanded it. Participation nearly doubled from 3431 to 7015, and expenditures rose from $234,517 to $527,289.17 Before 2011, Kissner said, Medicaid only funded programs for pregnant women. Now, “we pay for everyone.”

	He knows, however, that progress among adults will be slow. Tucked in the most recent CDC figures, hope comes from data showing the share of teenagers aged 12-17 who took their first cigarette fell dramatically between 2002 and 2009, taking Kentucky out of the worst ranking into 10th.

	When Kissner became Commissioner in July 2012, Kentucky’s march to managed care was at full throttle. Faced with a need to trim $1.3 billion from its Medicaid budget, Kentucky had announced in April 2011 that it would move beyond a managed care pilot in Louisville and enroll 560,000 Medicaid recipients into MCOs—which had to be publicly noticed, bid and awarded&mdash;between April and November 2011.

 That schedule avoided more dire consequences like cutting reimbursements 35% or pushing recipients off the rolls.

	By March 2013, providers were complaining, and 1 MCO, Kentucky Spirit, wanted out. Providers wrote op-eds and petitioned the Legislature about slow payments, contract cancellations, inadequate networks, or patient referrals to far-off providers.

 In Eastern Kentucky, which is especially rural and poor, patients complained of inadequate mental healthcare.

The Kaiser story profiled a family denied payment for a child’s nutrition supplement that had been covered under the old system.

In an interview, Kissner acknowledged the complaints; he had just completed 8 regional forums with other health officials, where providers offered feedback ahead of the Medicaid expansion.

	“The biggest complaint was the speed” with which the changeover occurred, he said. Providers accustomed to just dealing with “Medicaid” suddenly could be dealing with any one of 3 vendors, and each had a slightly different authorization system. Kissner insists that in time, the “3-legged stool” of better care coordination, education, and preventive care will be positive for patients, both for catching cancer early and for treating it. Health experts who spoke with 

 (EBO) all said Kentucky’s high cancer mortality rate has been driven by the number of tumors caught late when there is little that can be done. That’s where managed care can do a better job of making sure patients get preventive screenings to catch cancer early, Kissner said. And once treatment starts, he believes MCOs are better equipped than the old system, through telephone calls or other means, to remind patients to stick with treatment.

	“The managed care companies do a much better job of care coordination than we did with fee-for-service,” Kissner said. Ultimately, experts who spoke with EBO said the test once healthcare reform arrives is whether health officials can change the way the population thinks. But they know it won’t be easy.

	“There’s a fatalism,” in some parts, Kissner said. “A thinking that says, ‘Everyone in my family dies of cancer.’ … Hopefully managed care can help address that.”

	By keeping people insured, either through expanded Medicaid rolls or greater use of subsidized insurance, the hope is that fewer people will come on and off insurance. If they get insured and stay there, and their children stay there, chances are greater the family will get into the habit of seeking medical care regularly, not just when a crisis arises.

	Wyatt knows it will take time. Even though he grew up in Kentucky, he said it’s easy to forget how challenging it can be to make changes in rural areas.Working with churches can help, getting to know local opinion leaders can help. For the HPV vaccine, he said, it’s not enough to convince parents; sometimes healthcare workers must convince grandparents.

	“Removing the geographic barrier is very, very hard,” Wyatt said.1. Gov. Beshear expands health coverage to over 300,000 Kentuckians. May 9, 2013. Governor Steve Beshear’s communications office. Frankfort, Ky. Commonwealth of Kentucky. http://migration.kentucky.gov/Newsroom/governor/20130509medicaid.htm. Accessed July 21, 2013.

2. Cabinet for Health and Family Services. Cabinet solicits information regarding Medicaid managed care initiatives. January 5, 2011. Frankfort, Ky. Commonwealth of Kentucky. http://chfs.ky .gov/news/DMS+Managed+Care.htm Accessed July 23, 2013.

3. Gov. Beshear issues executive order creating Kentucky health benefit exchange. July 17, 2012. Governor Steve Beshear’s communication’s office. Frankfort, Ky. Commonwealth of Kentucky. http://migration.kentucky.gov/Newsroom/gov ernor/20120717healthexchangeadvisoryboard. htm. Accessed July 22, 2013.

4. Lucy May. Kentucky Gov. Beshear decides to expand Medicaid in Kentucky to boost ‘abysmal health outcomes. May 9, 2013. WCPO Digital. Covington, Ky. http://www.kypost.com/dpps/shared/citing-abysmal-health-outcomes-besheardecides-to-expand-medicaid-in-kentucky_8480 448#ixzz2ZzKQsMtM Accessed July 23, 2013.

5. Bergal J. Kentucky’s rush into Medicaid managed care: a cautionary tale for other states. July 14, 2013. Kaiser Health News/The Washington Post. Greensburg, Ky. http://www.kaiserhealthnews. org/Stories/2013/July/14/kentucky-medicad-managed-care.aspx Accessed July 14, 2013.

6. Brammer J. Judge denies Beshear’s request to dismiss lawsuit against Medicaid expansion. July 1, 2013. Kentucky.com. Lexington, Ky. Accessed July 24, 2013. http://www.kentucky .com/2013/07/01/2700008/judge-deniesbeshears-request.html

7. Kentucky Press News Service. Kentucky chosen for project to reduce health costs while improving care. Kentucky.com Lexington, Ky. July 18, 2013. http://www.kentucky.com/2013/07/18/719630/kentucky-chosen-for-project-to.html

8. Ungar L. Program offers aid to ER ‘superutilizers’ to cut costs. Louisville Courier-Journal/USA Today. April 13, 2013. http://www.usatoday.com/story/news/nation/2013/04/13/program-helps-frequent-er-patients/2080855/Both accessed July 18, 2013.

9. Perry A. Markey earns prestigious National Cancer Institute Designation. Markey Cancer Center, July 12, 2013. University of Kentucky, Lexington, Ky. http://www.ukhealthcare.uky. edu/markey/news/07122013-NCI-designationpress-release/ Accessed July 15, 2013.

10. Prevalence of adult smokers, 2012. Survey Data provided by Irene Centers, Department of Public Health, Frankfort, Ky. Commonwealth of  Kentucky. July 23, 2013. 11. Howlader N, Noone AM, Krapcho M, et al (eds). SEER Cancer Statistics Review, 1975-2010, National Cancer Institute. Bethesda, MD, http://seer.cancer.gov/csr/1975_2010/, based on November 2012 SEER data submission, posted to the SEER website, April 2013.

12. Campaign for Tobacco-Free Kids. Report on 2007 Census of USDA Tobacco Census. Accessed July 23, 2013. http://www.tobaccofreekids.org/research/factsheets/pdf/0125.pdf

13. O’Farrell, P. Kentucky and tobacco: It’s complicated. Cincinnati.com. Cincinnati, Ohio. January 30, 2011. http://news.cincinnati.com/article/20110130/EDIT03/101300357/Kentucky-Tobacco-s-Complicated Accessed July 22, 2013.

	14. Hahn E. Making Kentucky a smoke-free state.Letters to the editor, Courier-Journal, Louisville, Ky., July 24, 2013.

	http://www.courierjournal.com/article/20130724/OPINION02/307240036/1016/opinion/Letter-Making-Kentucky-a-smoke-free-state Accessed July 24,2013.

	15. Musgrave, B. Proposed statewide smoking ban clears Kentucky legislative panel. Lexington-Herald Leader, Lexington, Ky. February 7, 2013. http://www.kentucky.com/2013/02/07/ 2507141/statewide-smoking-ban-clears-kentucky.html Accessed July 24, 2013.

	16. Statewide smoke-free law gains support in Kentucky. Foundation for a Healthy Kentucky, Louisville, Ky., January 7, 2013. http://www.healthy-ky.org/news-events/newsroom/statewide-smoke-free-law-gains-support-kentucky

	17. Rayens MK, Hahn E, Langley R, Zhang M. Public support for smoke-free laws in rural communities. Am J Prev Med. 2008;34(6):519-522.

Leveraging Health Reform to Combat a History of Cancer: Kentucky to Expand Medicaid, Increase Clinical Trials as U of K Markey Center Gains NCI Status

That was the sentiment of 5 healthcare executives who took part in the Kentucky Chamber of Commerce Business Summit on July 23, 2013, in Louisville, when discussing the need for increased access to insurance coverage and care for Kentucky patients.

Bruce D. Broussard, president & CEO, Humana, Inc, began the discussion on The Future of Health Care in America. He was followed by a panel featuring Kentucky’s leading health executives discussing Health Care: ACA and What It May Mean to Kentucky. Panelists were Ruth W. Brinkley, CEO, KentuckyOne Health; Stephen C. Hanson, MPH, FACHE, president and CEO, Baptist Health; Michael Karpf, MD, executive vice president for health affairs, University of Kentucky; and Stephen A. Williams, president & CEO, Norton Healthcare.

Several themes emerged from presentations, including the importance of technology, changing payment structures, integrated delivery models, potential unmet expectations, partnerships, and cancer care.

 The healthcare executives emphasized that Kentucky organizations need to work together to address issues related to access to care and population health in Kentucky. They also agreed on the importance of expanding Medicaid in Kentucky, which Governor Steve Beshear announced will happen effective January 1, 2014.

Karpf insisted that “it is morally, ethically, and socially unacceptable to have so many people uninsured; therefore, we must expand the mandate for healthcare and Medicaid.”

Brinkley reminded participants of the impact of health on the economy. “If we want to thrive and be economically successful as a state, we have to have healthy and well-educated employees,” she said. Hanson emphasized, “It’s important; we shouldn’t do it because we have to, we should do it because we are the leading systems in healthcare and we should do it because it’s the right thing to do.”

Humana’s Broussard and the other healthcare executives challenged the participants to consider the use of technology in order to improve the health of populations and to consider healthcare more as “an experience rather than a transaction.” He challenged organizations to make things as simple as possible. Although healthcare is very complex, he proposes that “the world in technology has made things so accessible and so easy to use....This raises the expectation that if you’re not easy and you are complex, you will get penalized over time.”

Broussard also suggests that technology will provide solutions to physician shortages found in rural, remote areas of Kentucky, with particular emphasis on telemedicine. Other solutions outlined by several of the healthcare executives included virtual care, lay providers, and “retail” access points. Although some technology that rely on broadband infrastructure, such as online and mobile devices, can be difficult to access in some rural areas within the state, Broussard suggests that “It’s a problem today but probably won’t be in the future.”

He noted that technology-based companies are watching changes in healthcare closely and are figuring out a way to be involved, which will impact future service areas. Humana provided an example of social network connectivity without the technology. Through partnerships in Bell County, Kentucky—part of rural Appalachian country&mdash;Humana created a social-based wellness program designed to address chronic diseases. At the end of the program, he said, 95% of participants have seen health improvements.

All the healthcare executives highlighted the need for partnerships with multiple organizations in order to meet the responsibility for improving population health. These include healthcare providers, government, health departments, schools, members, and employers. Hanson discussed the need for partnerships to address more aspects of wellness, such as mental health, dental health, chemical dependency, and spiritual health, and Brinkley described a program in which hospitals partner with health departments to prevent hospital readmissions.

The changing healthcare system is “driving consolidations, collaborations, and alignments; developing a new world order in Kentucky and beyond,” Williams said. “We all compete, but we need to collaborate at a higher level,” Hanson said. 

Funding healthcare reform, reduced reimbursements, and increased costs were a concern for all the healthcare executives. Two aspects were highlighted during the conference that affect the changing payment structures for healthcare. First is the shift from fee-for-service to a payment structure that rewards better health outcomes, quality, and lower cost. Second, the financial risk has shifted to physicians.

All the healthcare executives recognized challenges in the current system where organizations and physicians are paid and incentivized based on the volume of services rather than improved health outcomes.

“People are getting older, people are unhealthier, and the structure is flawed—the more you do, the more you get paid,” Humana’s Broussard said. “There is an inherent conflict especially if you don’t have transparency and understanding of the cost.” For Humana, 26% of their current members are focused on relationships based on quality and cost of service through their Medicare Advantage program. Of the $40 million Humana makes annually, $26 million is paid on fixed reimbursement, incentivizing the insurer to improve quality and overall health among members. “The better we do, the more we get paid,” Broussard said. “I have a whole team of people whose purpose is to improve quality.”

He gave a specific cancer example to highlight this fixed fee. “If you are in stage III cancer, you are taking the most expensive treatments, and you select Medicare Advantage, we have a responsibility to take you on. Our motivation is to keep people healthy.” Although Humana is required to take on this high-risk patient, there are differences in the rates based on preexisting conditions.

Since the payment structure is moving to promote healthy outcomes, an increased risk has shifted to physicians. Through bundled payments, there is an incentive to do less, be efficient, and focus on quality of care more than quantity of procedures. Broussard highlighted a program from Humana known as “path to risk” in which the company dedicates resources to help primary care physicians make the transition. Humana gradually increases bonus payments for improved quality and reduced cost, and it reduces fee-for-service payments over time.

Aligning with the changing payment structure, the executives said the healthcare system is moving from a skilled and fragmented delivery system to integrated primary care delivery systems and models. Hanson highlighted the need for coordination of care across the continuum: from prevention, screening, treatment, home health, rehabilitation, to long- term care and hospice.

Broussard attributes the growth and uniqueness of Medicare Advantage to the combination of fixed costs and the integrated care delivery model. The member relationship and experience around health has become a higher priority. Although Medicare Advantage is currently the only plan implementing this model, Humana plans to expand to other benefit plans.

One important aspect of the integrated care model includes the ability to provide education and navigation to patients who will be newly insured under ACA, so that they will understand how to utilize their new coverage. Williams explained that Norton Healthcare will train staff to be navigators who provide support to patients using “decision trees.”

The healthcare executives agreed that concerns about cost and improved outcomes require better cancer prevention. When fewer cancers occur, there are fewer patients who need treatment. In announcing plans to add 308,000 people to Medicaid, Kentucky’s governor said he was “tired of being at the bottom” of the nation’s rankings of cancer deaths.

When cancer is not prevented and patients must be treated, Karpf, of the University of Kentucky, said he confident that the patients would not receive different care based on the type of health insurance they carried. He believes that there will be increased standardization of treatments and participation in clinical trials, speaking just days after the University’s Markey Center received a National Cancer Institute designation that was years in the making.

 NCI designation allows funding for increased clinical trials.

“The greatest costs of cancer are in the last 30 to 60 days of life. Decisions will need to be made based on value for the cost,” Karpf said. “If treatments are $15,000 per month and it prolongs life 3 months, the treatment may not be covered on a population level. Parameters have to be set based on impact to society.” He also emphasized the need for the best care for families and patients, which may involve hospice care, which can both decrease the cost of care and increase the degree of satisfaction for patients and their families at the end of life. Hanson proposed that genomics and personalized medicine may become more common once populations have a medical home.

He believes this aspect of medicine can impact both the screening and the treatment of cancer in the future.

Although there are many potential benefits for Kentuckians with the increased access to care, there is also potential for disappointment. While Karpf stated his support for healthcare reform and increased access, he also described scenarios that may result in unmet expectations during the implementation process:

	;• Kentuckians will have the choice of a plan, but they may not have the choice of a provider or a network. There will be well-defined referral patterns within plans and systems

	• Kentuckians may also not have the choice in the types of diagnostics and therapeutics due to increased standardization.

	• When Kentuckians sign up for an exchange plan, they may not fully realize the difference between the bronze, silver, gold, or platinum plans and their respective copays or deductibles.

	• There will be fewer “Cadillac” plans because taxes on companies are increasing. One way to absorb the tax may be to offer fewer benefits in their health plans.

	• When the employer mandate is implemented, some employers may choose to pay the fine and let the employee find his or her own insurance. These personal insurance plans may offer fewer benefits than employer-sponsored plans once did.

	• Healthcare, which is already expensive, may become more expensive than anticipated. When Massachusetts implemented health reform, costs exceeded projections. Massachusetts had only 7% to 8% of the population uninsured, compared with Kentucky’s 20%. If Kentucky spends more money than planned, there may be more reform required.

	Another area leading to unmet expectations involved the Obama administration’s decision in early July to delay the employer mandate. Brinkley emphasized that the only thing to change in the mandate was the date of implementation; however, both she and Hanson agreed that the delay in the employer mandate will probably not be the only delay in implementation due to the complexity of the ACA.

	As Williams reminded the conference attendees at the end of the session, “ACA is a framework. Fix what doesn’t work and accelerate what does work.”

Jennifer Redmond, DrPH, is a research assistant professor at the University of Kentucky College of Public Health. She provides expertise in partnership sustainability, program development, and group facilitation, especially related to cancer prevention and control, health promotion, and overall chronic disease prevention. 1. Gov. Beshear Expands Health Coverage to over 300,000 Kentuckians. May 9, 2013. Governor Steve Beshear’s communications office. Frankfort, Ky. Commonwealth of Kentucky. http://migration.kentucky.gov/Newsroom/governor/20130509medicaid.htm. Accessed July 21, 2013.

2. Perry A. Markey earns prestigious National Cancer Institute designation. Markey Cancer Center, July 12, 2013. University of Kentucky, Lexington, Ky. http://www.ukhealthcare.uky.edu/markey/news/07122013-NCI-designation-press-release/Accessed July 15, 2013. 

Moving from Reacting to Health Crises to Stopping Them Before They Happen

These days, talk about “quality” factors into every discussion of healthcare. So how do the nation’s 449 accountable care organizations (ACOs) and ACO-like entities sponsored by hospital systems, physicians groups, insurers, and community organizations

There’s no shortage of data and metrics surrounding how effectively hospitals and doctors’ groups claim to be delivering care, yet pinning down what it means to deliver quality care is difficult. Trying to define quality may well prove elusive, as ACOs are less rooted in amending the patient experience than they are in turning industry work flows and hierarchies upside down.

“ACOs are not an attempt to change the patients, but an attempt to change the (healthcare) delivery system,” said Jeffrey Brenner, MD, founder and executive director of the Camden Coalition of Healthcare Providers.

Under the 2010 Affordable Care Act (ACA), the nation’s healthcare system bears financial risk for delivering better care, and the industry is experimenting by rearranging the relationship between those who provide care—doctors, nurses, specialists and technicians&mdash;and those who pay for it, such as insurance companies, major employers who self-insure, and federal and state governments.

ACOs, which integrate care across healthcare providers, are catching on, and ACOs and ACO-like entities operate in as many as 45 states.

 Between 25 million and 31 million Americans are receiving healthcare services through an ACO, and more than 40% of Americans—126 million people&mdash;live in areas with at least 1 ACO, estimate Rick Weil, partner, and Niyum Gandhi, associate partner, in the Health and Life Sciences Practice of the consulting firm Oliver Wyman.

As of November 1, 2012, there were 328 ACOs, up from 221 at the end of May 2012, and 164 in September 2011, according to Leavitt Partners.

While the near-term growth of ACOs seems assured, the jury is still out on the question of whether ACOs can deliver the requisite quality of care to have any measurable impact on long-term costs. Even if there is no consensus about what quality care entails, initiatives in the marketplace hold clues to the future of how ACOs plan to deliver better care.

Future healthcare quality can’t be improved unless hospitals and doctors know how well or poorly they are performing today. It’s no surprise, then, that ACOs are sticklers for metrics. Nationwide Children’s Hospital (NCH) in Columbus, Ohio, a sponsor member of the Partners for Kids ACO, which serves more than 300,000 children, tracks its metrics with impressive granularity.

Drug errors, surgical infections, bloodborne infections, and rates of pneumonia associated with ventilator use are reported quarterly and monthly. Even staff compliance with washing hands is plotted on a graph.

The hospital, which serves a pediatric Medicaid population in a 34-county area in central and southeastern Ohio, reports that the number of catheterassociated bloodstream infections has dropped to 0.5-per-1000 catheter days in the first quarter of this year, from an average of 5.1 per 1000 in 2004.

Data collected in separate quality indicators show the hospital doing very well, and that is 1 measure of better quality. “We try to show metrics of kids getting better,” said Kelly Kelleher, MD, vice president of community health at NCH and a research adviser to Partners for Kids.

Kelleher said that fewer children with asthma and neurologic problems have been admitted to NCH’s emergency department, and the decline in the rate of pre-term births compared with that of other regions is a sign that the quality of care has improved. “That’s how we’ve improved outcomes,” he said.

Even with a 1% decline in the use of neonatal intensive care units (NICUs), multiply that by every child admitted to the NICU at $3000 a day over the course of a year, and the numbers start to add up, he said. NCH participates in pediatric quality measurement programs promulgated by the Centers for Medicare & Medicaid Services (CMS) and the Agency for Healthcare Research and Quality (AHRQ), and quality measures are set by the government For all of NCH’s measurements, the question of whether the quality of its care improves the lives of children is, to some extent, one ultimately inferred from the data. Short of going out and conducting large-scale surveys of families and the progress of their children, which is expensive and not reimbursed by Medicaid, Kelleher said, it’s difficult to know if the quality delivered to a child today is truly any better than the care received 5 years ago. 

Like an anchor tenant in a retail mall, ACOs have traditionally been clustered around big, institutional hospitals. More recently, it is the doctors’ groups that are forming the nucleus of the ACO, as ACOs seek to remain focused on the patient—a key to delivering quality. Under this model, local primary care doctors, who see their patients regularly and know the family intimately, are in a much better position to determine what is most appropriate for the patient.

Atrius Health, a collection of 7 community-based health groups serving more than 1 million adult and pediatric patients in eastern and central Massa-chusetts, takes its commitment to improving the quality of care to heart—literally&mdash;as quality care “is at the heart of our mission,” the Atrius website promises.

Atrius, a Pioneer ACO built on the initiative sponsored by Centers for Medicare & Medicaid Innovation Center, was selected as one of 32 healthcare providers for its ability to deliver “high quality, coordinated care,” according to Atrius’ website. Medicare beneficiaries are not locked into a restricted list of providers as are regular patients were with the managed care networks in the previous generation.

Under the Pioneer ACO model, Medicare beneficiaries seeing doctors who participate in an ACO maintain the ability to see any doctor or healthcare provider, even as they continue to receive the full benefits of Medicare.

Among the medical practices participating under the Atrius brand are 7 primary and multispecialty medical groups, and a hospice care group that delivers care to patients at home. Atrius’ model of delivering quality care was further cemented last year when South Shore Medical Center received the Level 3 Patient-Centered Medical Homes designation from the National Committee for Quality Assurance (NCQA).

Patient-centered models are designed to help patients maintain an ongoing relationship with the same doctor, who leads a team of healthcare experts at a single location, and who takes responsibility or ownership for care of a patient from beginning to end. The goal with medical homes is to reclaim the importance of the primary care doctor as the gatekeeper to deliver more personalized, coordinated, and efficient care.

Elevating the central role of primary care services instead of more expensive specialty services has been shown to cut hospitalization rates, lower rates of Medicare spending, and improve quality.

The 32 Pioneer ACO healthcare organizations were chosen by CMS to test different payment models and to spur competition to deliver higher quality and more affordable care than patients receive now under fee-for-service models. All 32 ACOs in the program improved quality of care. On the cost side, while only 13 of the 32 ACOs were able to lower costs, the costs for the entire group of 669,000 beneficiaries in the Pioneer ACOs rose only 0.3% in 2012, less than the 0.8% increase for similar beneficiaries in 2012.

 The 13 ACOs produced a savings of nearly $88 million in 2012, partly due to fewer hospital admissions and readmissions, according to a recent study of the Pioneer ACO pilot.

 Two of the Pioneer ACOs ended up spending more on the beneficiaries than the Medicare fee-for-service model.

Of the 19 Pioneer ACOs that weren’t able to cut costs in the first year, 7 announced they would leave the Pioneer program for the Medicare Shared Savings Program model, and 2 more said they would leave the Medicare accountable care arena.

Fee-for-service models have rewarded volume, not the quality of the health services rendered, and have been blamed for driving the cost of healthcare upward, even as there’s little evidence that the United States is healthier than nations that spend far less. Under new payment schemes, hospitals and doctors, for instance, are being asked to take on more risk so that if procedures go awry and patients need to be readmitted, hospitals or doctors don’t get reimbursed. The incentive is to get it right the first time, and to penalize mistakes by not paying the bill when things go wrong.

Value-based purchasing, which encourages pay-for-performance, tilts the system in favor of the patient. “The idea is to stimulate the competition among the healthcare system and make health care accountable,” said. Jim Frazier, MD, system vice president for medical affairs with Norton Healthcare, an ACO serving Louisville, Kentucky, and southern Indiana. Norton is currently involved in a pilot reimbursement program with the health insurer Humana.  Payment redesign is being structured and recalibrated to take account of providers’ readiness to accept financial risk, with health plans, hospitals, and doctors collaborating among themselves to negotiate goals around quality and cost reduction.

Risk-sharing among providers and payers, and bundled payments, are changing the way hospitals and doctors are reimbursed so that the healthcare system moves “from volume to value,” said Karen Ignagni, president and CEO of American Health Insurance Plans.

“The challenge is that until the reimbursement (model) is changed, it makes it difficult to make it a true ACO,” Frazier said.

Will ACOs and alternative health payment models be enough to control the rising cost of healthcare? The past 3 years have seen healthcare costs level off, but many experts point more to the weak economy as the primary reason, as opposed to structural change within the healthcare system. Brenner says the nation is in the midst of a 30-year experiment in redefining how to deliver healthcare, and that to succeed at the individual level will mean patients will have to feel cared about and know exactly what happened, why things happened, and how they can prevent their ailments in the future.

For doctors and nurses, it will mean looking forward to taking care of patients and bonding with them every day, he says. At the macroeconomic level, it will mean offering better care at lower costs. The US healthcare system in still the most expensive in the world by far, and whether the nation achieves better quality by rearranging the provider side or the payment side of the delivery system, “we’ve got a long way to go,” said Brenner.

1. Muhlenstein D, Crowshaw A, Merril T, et al. The accountable care paradigm: more than just managed care 2..0 Leavitt Partners. Published February 2013. Accessed July 15, 2013 http://leavittpartners. com/aco-consulting//

July/August

Drug Shortages Persist in Wake of Surveys

Sequester Forcing Chemo Treatments into Hospitals Costing Taxpayers More in the End

Leveraging Health Reform to Combat a History of Cancer: Kentucky to Expand Medicaid, Increase Clinical Trials as U of K Markey Center Gains NCI Status

Moving from Reacting to Health Crises to Stopping Them Before They Happen

Accountable Care Organizations: How to Define Quality?

Yale's Matloff Reports Shift in Views on Genetic Testing, Prophylactic Surgery: Sees Drop in Costs After Supreme Court Ruling

Current Issues in Breast Cancer Treatment: Chernew Leads Discussion with Swain, Newcomer on New Agents, Cost of Care

Inaugural 'Giants of Cancer Careâ€ Announced: Oncology Luminaries Selected by Peers for Prestigious National Honor

Early Results Robust for New Immunotherapy Agent

More Genetic Screening Needed for African-American Breast Cancer Patients

More Evidence for 10 Years of Tamoxifen in ER+ Breast Cancer

Predicting Treatment Outcomes in Older Adults With AML

Optimal Paclitaxel Schedule Identified for Early-Stage Breast Cancer

Pazopanib Maintenance Therapy Delays Relapse of Advanced Ovarian Cancer

Studies Highlight Newly Approved and Novel Multiple Myeloma Treatments

Bevacizumab Aids Survival in Cervical Cancer

For Partners of HPV-Positive Throat Cancer Patients, Good News in Studies