What Happens to Screening Rates When the Deductible Disappears?

You can see why insurers and employers would want to encourage people to take advantage of preventive care — in theory, it will cut the chances of later developing potentially costly diseases and conditions. (In practice, prevention may improve individual health, but there’s evidence that at least some of it doesn’t save the system money.)

As we’ve written, many companies pick up all or part of the costs of tests and procedures considered to fall under the preventive-care umbrella, including some cancer screening tests, annual physicals and flu shots.

Researchers funded by the government, Rand Corp.’s Bing Center for Health Economics and Merck wanted to see if that kind of incentive works. So they looked at whether screening rates changed at all when an employer eliminated the deductible for preventive tests and routine physical exams. (People still had to pay between 20% and 30% of the cost, in the form of co-insurance.) They analyzed data covering three different groups: people in high- and low-deductible plans, before and after the preventive care deductible was eliminated; and a control group from another employer where the deductible for preventive care didn’t change. Their findings were published in Health Services Research.

Scrapping the deductible “modestly” improved screening rates for blood-cholesterol tests, Pap smears, mammograms and fecal-occult blood tests, the researchers conclude. After adjusting for demographics and the overall trend of the test’s use, “there were between 23 and 78 additional uses per 1,000 eligible patients of covered preventive screens.”

But they recommend that “patients’ predisposing characteristics merit attention.” They’re referring to the finding that the expanded prevention coverage had a smaller effect on screening rates among people with high-deductible plans — perhaps because those folks are less risk-averse than the people who opt for low-deductible plans, or prefer to interact less with the health-care system. Or they could just be different in some other way that wasn’t controlled for by the study — such as income. (We wonder if they’re more skeptical about the value of some screening tests whose risk-benefit ratio isn’t so clear, such as mammograms for women in their 40s.)

The point is, though, that not everyone will respond in the same way to an incentive that would seem to work in a pretty straightforward way, i.e. lowering the out-of-pocket costs of a certain test or office visit. If the goal is to increase screening rates among the people who opt for high-deductible plans, other approaches — like patient or physician reminders or education — should also be studied, the researchers conclude.

Further reading:

Image: iStockphoto

View the original article here

How to Qualify for The Best Mortgage Refinance Rates

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Should Medicare Consider Effectiveness When it Sets Reimbursement Rates?

How well a therapy works compared to the alternatives doesn’t currently factor into how much Medicare pays for it. Two researchers, writing in Health Affairs, say that should change.

Steven Pearson, president of the Institute for Clinical and Economic Review and Peter Bach, an associate attending physician at Memorial Sloan-Kettering Cancer Center, argue for a new “dynamic pricing” model under which Medicare would pay more for therapies that demonstrated “superior” results and would reimburse the same for two therapies producing similar effectiveness.

A new service without any evidence demonstrating effectiveness would be reimbursed according to the usual formulas for three years, while research was conducted to gauge its benefit. If there was no such evidence by the end of that period, CMS could reevaluate payment.

Currently, the federal insurance program for older and disabled Americans is charged with covering anything deemed “reasonable and necessary,” regardless of how it stacks up against other treatment options. Once something is covered, reimbursement rates are set by taking the cost of the service and tacking on a profit margin.

Under the authors’ proposal, when Medicare decided something met that “reasonable and necessary” bar, it would also evaluate its comparative effectiveness and reimburse accordingly.

They use intensity-modulated radiation therapy, which was rolled out in the early 2000s, as an example. Medicare’s reimbursement for the treatment was set at about $42,000 for prostate cancer treatment, compared to $10,000 for an older form of radiation — though there were no gold-standard studies comparing the risks and benefits of the two procedures. Hospitals bought the spiffy new equipment … and Medicare spent an estimated $1.5 billion more on prostate cancer treatment, the authors write.

If that reimbursement rate had been guaranteed only for three years before being revisited, there’d have been an “incentive for manufacturers and clinicians to perform the research needed to evaluate the clinical performance of the new therapy in comparison to the standard three-dimensional treatment,” the authors write. (Medicare would have to specify from the outset what research it wanted to see performed over the three years.)

Obviously, there’d be challenges with this approach, the article says. Among them: The three-year period would be insufficient for many studies, deciding on a definition of “superior” performance would be tough, different patient subgroups might necessitate differential payments and then there’s the issue of what to do about all those services that are already covered.

Such a model would also require new legislation, which would run into political obstacles, to put it mildly. “A shift in Medicare’s fundamental approach to coverage and reimbursement decisions would require new legislative authorities and would be highly contested by those with a vested interest in existing reimbursement systems,” the authors write. The difficulty of changing legislative, regulatory and political processes “is hard to overstate,” they write.

Readers, what do you think of the idea — could it (and should it) fly?

Further reading:

Correction: This headline of this post has been corrected to reflect that the proposal does not call for cost-effectiveness to be a factor in whether a treatment is covered by Medicare.

Image: iStockphoto

View the original article here

Should Medicare Consider Effectiveness When it Sets Reimbursement Rates?

How well a therapy works compared to the alternatives doesn’t currently factor into how much Medicare pays for it. Two researchers, writing in Health Affairs, say that should change.

Steven Pearson, president of the Institute for Clinical and Economic Review and Peter Bach, an associate attending physician at Memorial Sloan-Kettering Cancer Center, argue for a new “dynamic pricing” model under which Medicare would pay more for therapies that demonstrated “superior” results and would reimburse the same for two therapies producing similar effectiveness.

A new service without any evidence demonstrating effectiveness would be reimbursed according to the usual formulas for three years, while research was conducted to gauge its benefit. If there was no such evidence by the end of that period, CMS could reevaluate payment.

Currently, the federal insurance program for older and disabled Americans is charged with covering anything deemed “reasonable and necessary,” regardless of how it stacks up against other treatment options. Once something is covered, reimbursement rates are set by taking the cost of the service and tacking on a profit margin.

Under the authors’ proposal, when Medicare decided something met that “reasonable and necessary” bar, it would also evaluate its comparative effectiveness and reimburse accordingly.

They use intensity-modulated radiation therapy, which was rolled out in the early 2000s, as an example. Medicare’s reimbursement for the treatment was set at about $42,000 for prostate cancer treatment, compared to $10,000 for an older form of radiation — though there were no gold-standard studies comparing the risks and benefits of the two procedures. Hospitals bought the spiffy new equipment … and Medicare spent an estimated $1.5 billion more on prostate cancer treatment, the authors write.

If that reimbursement rate had been guaranteed only for three years before being revisited, there’d have been an “incentive for manufacturers and clinicians to perform the research needed to evaluate the clinical performance of the new therapy in comparison to the standard three-dimensional treatment,” the authors write. (Medicare would have to specify from the outset what research it wanted to see performed over the three years.)

Obviously, there’d be challenges with this approach, the article says. Among them: The three-year period would be insufficient for many studies, deciding on a definition of “superior” performance would be tough, different patient subgroups might necessitate differential payments and then there’s the issue of what to do about all those services that are already covered.

Such a model would also require new legislation, which would run into political obstacles, to put it mildly. “A shift in Medicare’s fundamental approach to coverage and reimbursement decisions would require new legislative authorities and would be highly contested by those with a vested interest in existing reimbursement systems,” the authors write. The difficulty of changing legislative, regulatory and political processes “is hard to overstate,” they write.

Readers, what do you think of the idea — could it (and should it) fly?

Further reading:

Correction: This headline of this post has been corrected to reflect that the proposal does not call for cost-effectiveness to be a factor in whether a treatment is covered by Medicare.

Image: iStockphoto

View the original article here

Should Medicare Consider Effectiveness When it Sets Reimbursement Rates?

How well a therapy works compared to the alternatives doesn’t currently factor into how much Medicare pays for it. Two researchers, writing in Health Affairs, say that should change.

Steven Pearson, president of the Institute for Clinical and Economic Review and Peter Bach, an associate attending physician at Memorial Sloan-Kettering Cancer Center, argue for a new “dynamic pricing” model under which Medicare would pay more for therapies that demonstrated “superior” results and would reimburse the same for two therapies producing similar effectiveness.

A new service without any evidence demonstrating effectiveness would be reimbursed according to the usual formulas for three years, while research was conducted to gauge its benefit. If there was no such evidence by the end of that period, CMS could reevaluate payment.

Currently, the federal insurance program for older and disabled Americans is charged with covering anything deemed “reasonable and necessary,” regardless of how it stacks up against other treatment options. Once something is covered, reimbursement rates are set by taking the cost of the service and tacking on a profit margin.

Under the authors’ proposal, when Medicare decided something met that “reasonable and necessary” bar, it would also evaluate its comparative effectiveness and reimburse accordingly.

They use intensity-modulated radiation therapy, which was rolled out in the early 2000s, as an example. Medicare’s reimbursement for the treatment was set at about $42,000 for prostate cancer treatment, compared to $10,000 for an older form of radiation — though there were no gold-standard studies comparing the risks and benefits of the two procedures. Hospitals bought the spiffy new equipment … and Medicare spent an estimated $1.5 billion more on prostate cancer treatment, the authors write.

If that reimbursement rate had been guaranteed only for three years before being revisited, there’d have been an “incentive for manufacturers and clinicians to perform the research needed to evaluate the clinical performance of the new therapy in comparison to the standard three-dimensional treatment,” the authors write. (Medicare would have to specify from the outset what research it wanted to see performed over the three years.)

Obviously, there’d be challenges with this approach, the article says. Among them: The three-year period would be insufficient for many studies, deciding on a definition of “superior” performance would be tough, different patient subgroups might necessitate differential payments and then there’s the issue of what to do about all those services that are already covered.

Such a model would also require new legislation, which would run into political obstacles, to put it mildly. “A shift in Medicare’s fundamental approach to coverage and reimbursement decisions would require new legislative authorities and would be highly contested by those with a vested interest in existing reimbursement systems,” the authors write. The difficulty of changing legislative, regulatory and political processes “is hard to overstate,” they write.

Readers, what do you think of the idea — could it (and should it) fly?

Further reading:

Correction: This headline of this post has been corrected to reflect that the proposal does not call for cost-effectiveness to be a factor in whether a treatment is covered by Medicare.

Image: iStockphoto

View the original article here