FOLLOW MCOL February 2020

In This Issue

© 2020, MCOL. All rights reserved. This publication is exclusively for the use of MCOL

healthsprocket

Definitive Healthcare: Current

Areas of Use for AI in Imaging

1. Computer-aided image detection

for disease states: 93% 2. Process or workflow

improvement: 27% 3. Technological monitoring

(equipment maintenance): 16% 4. Computer-aided image detection

for fractures/musculoskeletal injuries: 15%

Read more on page 18

Source: The Definitive Blog

SPONSOR MESSAGE

News Round the Web

Feature Stories Making News as Reported from Key Web Sites 1

infoGraphic

2020 Shared Savings Program Snapshot 3

Tips

In Getting the Most Out of Your MCOL Basic Membership 5

Blogs

What's Predicted in Healthcare for the Dawn of a New Decade 6

The Facts of Managed Care 9

The CMS Innovation Center: Innovative Savings Projections? 11

Yellow Brick Road to Savings $13B In Administrative Transactions 12

Quantum Theory of Health 13

Looking Back

Healthcare headlines from 20, 10 and 5 years ago 15

Factoids

Cancer Drugs Cost 86.2% More in Hospitals Than in Physician Offices 17

Individual Market Medical Loss Ratios Were 75% in Q3 2019 17

healthsprocket

Definitive Healthcare: Current Areas of Use for AI in Imaging 18

Becker's: Proposed risk adjustment updates to Medicare Advantage 18

Quoted

MCOL’s Quotes of the Week from last month 19

Podcast

2019 Third Quarter Health Plan Financial Reports

Factoid

Labor Individual Market Medical Loss Ratios Were 75% in Q3 2019

Read more on page…….17

Source: Kaiser Family Foundation

Quote of the Month

“ACOs have had the greatest success of any of Medicare’s

payment reform efforts. If interest in ACOs dwindles, then doctors and hospitals will fall back into a

fragmented, fee-for-service system, and any momentum to transform our health system will be lost.”

Clif Gaus, Sc.D., President and CEO, National Association of

Accountable Care Organizations

February 2020

Page 1 © 2020, MCOL. All rights reserved.

Payers, employers protest price transparency rule as wrong-headed The nation's health insurance lobby pushed back against the Trump administration's attempt to wrangle insurers into a broader effort to force the secret, negotiated rates with hospitals out into the open, according to comments submitted to the federal gov-ernment on the proposed rule. Healthcare Dive Friday, January 31, 2020 5 Things To Know About Trump’s Medicaid Block Grant Plan The Trump administration unveiled a plan Thursday that would dramatically revamp Medicaid by allowing states to opt out of part of the current federal funding program and instead seek a fixed payment each year in exchange for gaining unprecedented flexibility over the program. Kaiser Health News Friday, January 31, 2020 Preeminent Hospitals Penalized Over Rates Of Patients’ Injuries Hundreds of hospitals across the nation, including a number with sterling reputations for cutting-edge care, will be paid less by Medicare after the federal government pronounced that they had higher rates of infections and patient injuries than others. Kaiser Health News Friday, January 31, 2020

Study documents first case of coronavirus spread by a person showing no symptoms People showing no symptoms appear to be able to spread the novel coronavirus that has caused an outbreak in China and led world health authorities to declare a global emergency, researchers reported Thursday in the New England Journal of Medi-cine. Stat News Thursday, January 30, 2020

Anthem's Medicare Advantage enrollment grew by 20% in 2019 In 2019, Anthem's Medicare Advantage enrollment grew by 20%, outpacing the market and in line with the company's guid-ance, executives said Wednesday. Fierce Healthcare Wednesday, January 29, 2020

Lyft expanding its reach in healthcare with CommonSpirit Health partnership Lyft is teaming up with CommonSpirit Health and LogistiCare Circulation, one of the nation’s largest Medicaid transportation brokers, to roll out transportation services to patients in California and Arizona. Fierce Healthcare Wednesday, January 29, 2020

Data science, prescriptive analytics poised for big advances in 2020 Improvements in patient outcomes and population health will be enabled as a culture of data-driven decisionmaking takes root and quality improvement processes mature. Healthcare IT News Tuesday, January 28, 2020

Hospitals may be double dipping in drug discounts, GAO finds Poor oversight of the 340B Drug Discount Pricing Program and the Medicaid Drug Rebate Program may allow providers to re-ceive double discounts, according to a new report from the U.S. Government Accountability Office. Healthcare Dive Tuesday, January 28, 2020

HCA sees jumps in inpatient, ER, surgeries in Q4 Hospital operator HCA reported widespread volume growth during the fourth quarter of 2019, including a nearly 7% jump in ER visits compared to the fourth quarter of 2018. The Nashville-based firm's same-store admissions grew nearly 5%. Healthcare Dive Tuesday, January 28, 2020

Feature stories making news as reported from key web sites, and compiled by MCOL

February 2020

Page 2 © 2020, MCOL. All rights reserved.

Apple, Cerner call for interoperability rule release 'without further delay' highlighting industry rift Big tech giants Apple and Microsoft are joining health IT vendors and health plans to meet with federal officials today to voice strong support for efforts to give patients access to their health data. Fierce Healthcare Monday, January 27, 2020

Investors expect healthcare deals to grow in 2020, but coming elections could dampen investments After three years of strong growth in healthcare technology funding, investor interest in the space has not abated. Corporate, private equity and investment banking executives are eyeing more investments in health IT in 2020, according to a survey from KPMG. Fierce Healthcare Friday, January 17, 2020

FTC commissioner pledges hard line on hospital mergers Horizontal hospital mergers will not escape strict scrutiny from regulators in 2020, a Republican-appointed Federal Trade Com-missioner said Thursday, adding the group could review mergers after the fact to determine whether they achieved the cost and quality metrics companies claimed they would. Healthcare Dive Friday, January 17, 2020

Powerful House committee is latest to take stab at ‘surprise’ billing fix The leaders of a powerful House committee are aiming to break through a legislative quagmire as Congress tries to deliver on the stubbornly elusive goal of protecting patients from "surprise" medical bills. Politico Thursday, January 16, 2020

Health care data-sharing rules touch off intense lobbying fight The looming release of data-sharing rules for health care have sparked an intense lobbying fight, with hospitals, digital health firms and patient access groups joining a battle that pits the promise of care coordination and streamlined research against nightmares over compliance and privacy. Politico Wednesday, January 15, 2020

UnitedHealth Group Says Medicare Growth ‘Strongest Ever’ UnitedHealth Group reported its “strongest ever” growth in Medicare Advantage enrollment as the company added hundreds of thousands of seniors to its health plans for 2020 amid a competitive environment among rival health insurers. Forbes Wednesday, January 15, 2020

Cigna's Cordani says insurer's cash flow has helped ease investor fears over 'Medicare for All' Cigna CEO David Cordani said he isn’t concerned about any impact “Medicare for All” could have on his company’s stock price because of how the company is positioned. Fierce Healthcare Wednesday, January 15, 2020

More than 100 billion pain pills saturated the nation over nine years Newly disclosed federal drug data shows that more than 100 billion doses of oxycodone and hydrocodone were shipped na-tionwide from 2006 through 2014 — 24 billion more doses of the highly addictive pain pills than previously known to the public. The Washington Post Wednesday, January 15, 2020

Will more employers get off the healthcare bench in 2020? As healthcare costs continue to rise in the U.S., payers and providers are scrambling to find new ways to eke out savings. But often the conversation fails to loop in the entities responsible for insuring more than 55% of the country: employers. Healthcare Dive Tuesday, January 14, 2020

Feature stories making news as reported from key web sites, and compiled by MCOL

February 2020

Page 3 © 2020, MCOL. All rights reserved.

Featured infographic by MCOL

February 2020

Page 4 © 2020, MCOL. All rights reserved.

Featured infographic by MCOL

February 2020

Page 5 © 2020, MCOL. All rights reserved.

In getting the most out of your MCOL basic membership

Be sure to explore Basic Membership website with archives of publications and much more.

You can login at www.mcol.com.

If you haven’t joined already, you’re encouraged to join the LinkedIn Managed Care On-Line

group where you can network and discuss issues with other MCOL members. You’ll find a

link to the group in the free member web site main menu.

Your clients, friends and colleagues can get a MCOL basic membership too, at no cost,

simply by going to http://member.mcol.com/basicregistration

Subscriber to our Twitter feed at https://twitter.com/m_c_o_l

Check out the Hot Topics page in the Basic Member website for links to current key issues

Looking for past MCOL e-newsletter content? The Basic member site includes a searchable

archive of MCOL publications.

Interested in finding out about upgrading to a Premium Membership. Check out our Special

Offer, and get detailed information at http://www.mcol.com/online.htm

If you ever would like any assistance or information regarding any aspect of your MCOL

Basic membership, feel free to contact MCOL anytime at pattyj@mcol.com or call

209.577.4888. MCOL offices are open business days 8AM to 5PM Pacific time.

Health Policy Publishing, LLC offers selected paid sub-scription newsletters in print and electronic formats, and free subscription newsletters in electronic format. Health Policy Publishing newsletters are administered by MCOL, a leading publisher of health care business infor-mation since 1995. Site licenses and multiple publication discounts are available. Click here fore more infor-mation.

February 2020

Page 6 © 2020, MCOL. All rights reserved.

Entry from MCOLBlog.com, appeared in last month’s MCOL Weekend e-newsletter

As we enter 2020, what are prognosticators sensing the start of the new decade will bring forth in the healthcare arena? Here's nine recent HealthSprocket lists that peek into year ahead:

Deloitte offers these ten overall Healthcare and Life Sciences Predictions 2020:

1. Health consumers in 2020: Informed and demanding patients are now partners in their own healthcare

2. Health care delivery systems in 2020: The era of digitized medicine - new business models drive new ideas

3. Wearables and mHealth applications in 2020: Measuring quality of life not just clinical indicators

4. Big Data in 2020: Health data is pervasive- requiring new tools and provider models

5. Regulation in 2020: Regulations reflect the convergence of technology and science

6. Research and Development in 2020: The networked laboratory - partnerships and big data amidst new scrutiny

7. The pharmaceutical commercial model in 2020: Local is important but with a shift from volume to value

8. The pharmaceutical enterprise configuration - the back office in 2020: Single, global, and responsible for insight enablement

9. New business models in emerging markets in 2020: Still emerging, but full of creativity for the world

10. Impact of behaviors on corporate reputation in 2020: A new dawn of trust

Becker's Hospital Review summarized these S&P 7 healthcare trends to watch in 2020 with a financial marketplace perspective:

1. Changes in healthcare may speed up

2. Industry disruption will continue

3. Rating deterioration will continue

4. Mergers among payers and other players will pressure pricing

5. M&A activity in the healthcare industry will remain elevated

6. Opioid litigation settlements will accelerate

7. Medical device makers will see a stable 2020

On the life sciences front, Syneos Health offers these Pharma Trends for 2020:

1. The Many Points of Care - shifting away from where clinic exists to wherever patient goes

2. Better, By Design - big shifts in clinical research user experience

3. The Trust Deficit - initiatives to win trust back from people

4. Patient Value - patient-centricity

5. Digital Amplification and Innovation - digital experiences taking another big step forward

6. The Value Evaluation - to show initial population-relevant data and defend value against constant change

7. Answering to Real World - get ahead of both regulatory requirements and payer expectations

8. Connected Communications - personal communications that understand where people are in their individual journeys

9. Rapidly Changing Life Experience - Our world is changing and aging faster than ever before

10. New Strategic Blueprint - resetting focus on core assets, building ROI models around the yield of data investments

What's Predicted in Healthcare for the Dawn of a New Decade

by Clive Riddle, January 3, 2020

(continued on next page)

February 2020

Page 7 © 2020, MCOL. All rights reserved.

Entry from MCOLBlog.com, appeared in last month’s MCOL Weekend e-newsletter

What's Predicted in Healthcare...continued

And Managed Healthcare Executive adds the pharmaceutical benefit perspective with Eight Trends Expected to Shape Managed Care Pharmacy in 2020:

1. Continued shift to value-based care

2. Increased integration of medical and pharmacy benefits

3. Drug prices will continue challenging patients, payers, and providers

4. Medication systems will gain connectivity

5. Precision medicine will mature

6. Ongoing emphasis on social determinants of health (SDoH)

7. Pharmacists emerge as primary care providers.

8. Consumers will become more cautious about prescribed medications

With respect to life sciences and healthcare, the Cleveland Clinic published their annual Top 10 Medical Innovations for 2020:

1. Dual-Acting Osteoporosis Drug

2. Expanded Use of Minimally Invasive Mitral Valve Surgery

3. Inaugural Medication for Transthyretin Amyloid Cardiomyopathy

4. Therapy for Mitigation of Peanut Allergies

5. Closed-Loop Spinal Cord Stimulation

6. Biologics in Orthopaedic Repair

7. Antibiotic Envelope for Cardiac Implantable Device Infection Prevention

8. Bempedoic Acid for Cholesterol Lowering in Statin Intolerant Patients

9. PARP Inhibitors for Maintenance Therapy in Ovarian Cancer

10. Drugs for Heart Failure with Preserved Ejection Fraction

Turning to technological oriented trends, Health Data Management lists these 8 Healthcare trends that will rock medical care in the 2020s:

1. Artificial intelligence

2. Digital health tools

3. Imaging technology

4. Data sharing and interoperability

5. Patient communication and engagement

6. Payer evolution

7. Precision medicine

8. Virtual or remote care In the same vein, Forbes published 9 technology trends that will transform medicine and healthcare in 2020:

1. AI and Machine Learning

2. Robotics

3. Computer and Machine Vision

4. Wearable Tech

5. Genomics

6. 3D Printing

February 2020

Page 8 © 2020, MCOL. All rights reserved.

Entry from MCOLBlog.com, appeared in last month’s MCOL Weekend e-newsletter

What's Predicted in Healthcare...continued

7. Extended Reality (Virtual, Augmented and Mixed Reality)

8. Digital Twins

9. 5G

How does all this shape health policy? The Hill tells us there will be Five health care fights to watch in 2020:

1. Drug pricing

2. Surprise billing

3. ObamaCare

4. Medicare for All

5. Vaping

And finally, here's a summary of Seven Quick Takes on Healthcare Trends Shaping 2020 previously posted in mcolblog:

1. Election Year Policy Angst

2. Expanding Impact of Medicaid Expansion

3. One More Year for SDoH Before ROI Naysayers

4. Viral Value Based Payment

5. Health Technolytics - Healthcare Analytics + Technology

6. Morphing Point of Care and Coverage

7. Behind the Veil of Pricing Transparency and the CMS Final Rule

Happy New Year and New Decade!

February 2020

Page 9 © 2020, MCOL. All rights reserved.

Entry from MCOLBlog.com, appeared in last month’s MCOL Weekend e-newsletter

The MCOL Managed Care Fact Sheets have just been updated, an ongoing online feature provided since the 1990s. Here’s some highlights:

Overall national managed care penetration is now 75.4%. Here’s a breakdown by payor segment, based on 2019 data:

Sources: (see Note 1)

Here is the total national managed care enrollment by coverage type, based on 2018 data:

Health Maintenance Organization (HMO): 94.8 million

Preferred Provider Organization (PPO): 165.8 million

Point of Service (POS): 4.8 million

High Deductible Health Plan (HDHP): 15.6 million

Total* 81.0 million

* The above total enrollment exceeds the total actual national managed care population due to double counting of A) spouses and dependents who have dual coverage; and B) HDHP plans that are also classified as PPO, HMO or POS

Sources: (see Note 2)

The Facts of Managed Care

by Clive Riddle, January 10, 2020

(continued on next page)

February 2020

Page 10 © 2020, MCOL. All rights reserved.

Entry from MCOLBlog.com, appeared in last month’s MCOL Weekend e-newsletter

The Facts of Managed Care...continued

And here is major national health plans enrollment as of September 30, 2019:

United Health Group: 49.4 million

Anthem: 41.0 million

CVS Health (Aetna): 22.8 million

Humana: 16.6 million

CIGNA HealthCare: 17.1 million

HCSC: 16.0 million

Centene*: 15.3 million

Kaiser Permanente: 12.2 million

Wellcare*: 6.4 million

Molina: 3.3 million

*Centene/Wellcare Enrollment is reported separately, prior to public reporting of combined membership from merger

Source: Compiled by MCOL from company financial reports

February 2020

Page 11 © 2020, MCOL. All rights reserved.

Entry from MCOLBlog.com, appeared in last month’s MCOL Weekend e-newsletter

Avalere has released a report: CMMI’s Financial Impact on Medicare Spending Challenging to Project, which concludes “CMMI’s impact on Medicare spending has not reached earlier projections by the Congressional Budget Office (CBO), demonstrating the difficulty in projecting savings from untested and future unknown alternative payment models.”

Before we delve into the details of Avalere’s findings, let’s take a step back and peek into what goes on these days at The Center for Medicare & Medicaid Innovation (CMMI), which they now like to refer to as the CMS Innovation Center.

The CMS Innovation Center tells us they develop new payment and service delivery models brought about by the Affordable Care Act and other legislation, overseeing a number of specific demonstrations to be conducted by CMS; and implement the Quality Payment Program brought about by MACRA. The demonstrations and QPP were developed with an underlying assumption of savings to be accrues, and Avalere is now finding the savings have missed their targets.

The CMMI site provides tables itemizing the Alternative Payment Models in the Quality Payment Program, which list 50 specific Alternative Payment Models

(APMs), plus Other Payer Advanced APMs including 7 Medicaid Other Payer Advanced APMs; 59 Medicare Health Plan Payment Arrangements; and 2 CMS Multi-Payer Payment Arrangements.

The CMMI Site indicates 90 specific demonstration models, which fall under seven categories:

1. Accountable Care

2. Episode-based Payment Initiatives

3. Primary Care Transformation

4. Initiatives Focused on the Medicaid and CHIP Population

5. Initiatives Focused on the Medicare-Medicaid Enrollees (dual eligible)

6. Initiatives to Accelerate the Development and Testing of New Payment and Service Delivery Models

7. Initiatives to Speed the Adoption of Best Practices

Given this scope, Avalere tells us that "CBO’s 2010 projection was $1.3 billion in net federal government savings from CMMI over the 2010-2019 budget window. In 2015, CBO began projecting more substantial savings from CMMI: $27 billion in net federal government savings over the 2016-2025 budget window; and then in 2016, $34 billion in net federal government savings over the 2017–2026 budget window."

The CMS Innovation Center: Innovative Savings Projections?

By Clive Riddle, January 17, 2020

(continued on next page)

February 2020

Page 12 © 2020, MCOL. All rights reserved.

Entry from MCOLBlog.com, appeared in last month’s MCOL Weekend e-newsletter

The CMS Innovation Center...continued

Avalere however “estimates net Medicare savings of $18.0 billion from CMMI for the 2017-2026 budget window, lower than the $34 billion projected by the CBO in 2016. Net Medicare savings reflects expected reduced Medicare program expenditures net of CMMI outlays.” They break down their projection as follows:

1. The continuation and expansion of already-existing CMMI demonstrations generate $4.4 billion in gross Medicare savings between 2017 and 2026.

2. Proposed demonstrations generate $21.4 billion in gross Medicare savings for 2017–2026.

3. CMMI will launch new, not yet proposed demonstrations that generate $3.3 billion in gross Medicare savings for 2017–2026.

Of course, the aftermath of a Presidential election year could bring about any number of scenarios that could spin CBO or Avalere projections sideways.

CAQH has released their seventh annual report - the 2019 CAQH Index - which measures "the progress made by the healthcare industry in reducing the costs and burden associated with administrative transactions through automation. Their 49-page report found that "of the $350 billion dollars widely cited as the cost of administrative complexity in the US healthcare system, $40.6 billion is spent on eight administrative transactions. Of that, the industry can save $13.3 billion, or 33 percent of existing annual spend, by transitioning to fully electronic processes."

Regarding the $13.3 billion in potential savings through automation, the report tells us “$9.9 billion can be saved by the medical plans and providers, while $3.4 billion can be saved by the dental industry. In both industries, the greatest savings exist for providers as compared to plans.”

The Index report “analyzes levels of automation, spending and savings opportunities for eight administrative transactions related to verifying patient insurance coverage and cost sharing, obtaining authorization for care, submitting claims and supplemental information and sending and receiving payments.”

What are these eight transaction categories, and what were their corresponding rates of full electronic transaction processing in 2019 vs. 2015?

1. Eligibility and Benefit Verification: 84% 2019 | 71% 2015

2. Prior Authorization 13% 2019 | 10% 2015

3. Claim Submission 96% 2019 | 94% 2015

4. Attachments 20% 2019 | NA 2015

5. Coordination of Benefits 86% 2019 | 49% 2015

6. Claim Status Inquiry 70% 2019 | 57% 2015

7. Claim Payment 70% 2019 | 61% 2015

8. Remittance Advice 50% 2019 | 51% 2015

The Yellow Brick Road to Savings $13B In Further Automated Healthcare Administrative Transactions

by Clive Riddle, January 24, 2020

(continued on next page)

February 2020

Page 13 © 2020, MCOL. All rights reserved.

Entry from MCOLBlog.com, appeared in last month’s MCOL Weekend e-newsletter

(continued on next page)

Of these eight transaction categories - the term “Attachments” might be a little generic and require further definition. CAQH defines Attachments as "the exchange of patient-specific medical information or supplemental documentation needed to support administrative transactions and clinical decisions." They go on to say "serving as a bridge between clinical and administrative data, attachments are also critical to the success of value-based payment models" and that the majority of attachments are exchanges through mail and fax as opposed to electronically.

The largest remaining estimated savings opportunities from further automation are with:

Eligibility and Benefit Verification: $4.24 Billion

Claim Status Inquiry: $2.16 Billion

Remittance Advice: $1.85 Billion

CAQH’s call to action for the industry to achieve these savings centers around:

Focusing efforts to reduce provider burden

Accelerating standards and operating rule development to support harmonization of administrative and clinical data exchange

Needing vendor adoption of all standards and operating rules; and

Expanding research related to the administrative workflow

The Yellow Brick Road to Savings ...continued

Quantum Theory of Health

by Kim Bellard, January 30, 2020

We’re pretty proud of modern medicine. However, there has been increasing awareness of the impact our microbiota has on our health, and I think modern medicine is reaching the point classical physics did when quantum physics came along.

Classical physics pictured the atom as kind of a miniature solar system, with well-defined particles revolving in definite orbits around the solid nucleus. In quantum physics, though, particles don’t have specific positions or exact orbits, combine/recombine, get entangled, and pop in and out of existence. At the quantum level everything is kind of fuzzy, but quantum theory itself is astoundingly predictive. We’re fooled into thinking our macro view of the universe is true, but our perceptions are wrong.

So it may be with modern medicine. Our microbiota (including both the microbiome and mycobiome) both provide the fuzziness and dictate a significant portion of our health.

(continued on next page)

February 2020

Page 14 © 2020, MCOL. All rights reserved.

Entry from MCOLBlog.com, appeared in last month’s MCOL Weekend e-newsletter

(continued on next page)

Two articles in Science illustrate how we’re still just scratching our understanding of their impact. The first, from Rodrigo Pérez Ortega, reports on two new studies.

The first study found that the genetic structure of gut microbiome was more predictive of health than one’s own genes. It was especially better for “complex” diseases that are attributed to both environmental and genetic factors. Gut microbes are impacted sooner by environmental factors and thus serve as better predictors for such diseases.

The second study found that a person’s microbiome could be used to predict their death 15 years later. Presence of a certain family of bacteria led to a 15% higher mortality rate in the next 15 years. Whether the bacteria are the cause of the mortality or a side effect of other factors is not clear.

The second article was a study from B.B. Finlay, et. alia, that speculated that so-called non-communicable diseases (NCD) might actually be communicable, via the microbiome. Their paper concludes: “These findings could serve as a solid framework for microbiome profiling in clinical risk prediction, paving the way towards clinical applications of human microbiome sequencing aimed at prediction, prevention, and treatment of disease.”

Dr. Finlay says: “If our hypothesis is proven correct, it will rewrite the entire book on public health.”

Still, it is too early to get overly excited. Everyone agrees more research is necessary. Timothy Caulfield, the Research Director of the Health Law Institute at the University of Alberta, warns: “Gut hype is everywhere.” He acknowledges that this is an exciting field with great promise, but cautions “it is still early days for microbiome research.”

Think of modern medicine, with its germ theory of disease and its understanding of our body’s biomechanics, as classical physics. Our recent discoveries about our microbiota are upending our notions about what disease is, what causes it, and how we should best deal with it. Our supposed precision in medicine is illusionary.

Modern medicine loves its antibiotics, despite the devastating impact they wreak on our microbiome. It is fascinated with our genome, despite the fact that our microbiota’s genes greatly outweigh our own, and have more diversity. Our microbiota change in ways that we don’t understand and, as yet, can’t even really track, much less predict the effect of.

We need the equivalent of a quantum theory of health.

Modern medicine is in the stage physics was in the early part of the 20th century, when the concept of quanta was known but the consequences of it were yet to be discovered.

Modern medicine has had its Newtons, maybe even its Einsteins, but now it needs a new generation of scien-tists to develop more accurate theories of our health, no matter how counter-intuitive they might be.

Welcome to a quantum theory of health.

This post is an abridged version of the original posting in The Health Care Blog.

Quantum Theory of Health ...continued

February 2020

Page 15 © 2020, MCOL. All rights reserved.

From the Week of January 6, 2020

Managed Care Industry Wins Key Appeal, January 5, 2000 The Court of Appeals for the Fifth Circuit today affirmed the dismissal of a case alleging that several Texas HMOs, including Aetna U.S. Healthcare, violated ERISA by allegedly failing to disclose their financial arrangements with physicians. Aetna U.S. Healthcare Announces New Initiatives to Help Reduce Medical Errors, January 4, 2000 In an effort to contribute to the national campaign to reduce avoidable medical errors, as recently addressed by an Institute of Medicine (IOM) report, Aetna U.S. Healthcare announced today two major new initiatives Decision Resources Identifies the Business Opportunities of the Future in the World Pharmaceutical Marketplace, January 5, 2000 As global research-based pharmaceutical companies enter the new millennium, they face daunting financial, competitive, and regulatory pressures. With these challenges in mind, Decision Resources offers a few predictions for the coming decade. U.S. study backs nurses for primary health care, January 4, 2000 A study described as the first of its kind has found that some patients fare as well when treated by specially trained nurses as they do when treated by primary care physicians, U.S. researchers reported.

Healthcare overhaul could save money and boost jobs, researchers say, January 8, 2010 The Baltimore Sun reports: National healthcare legislation in Congress could slow the growth of medical costs, allowing employers to create 250,000 to 400,000 new jobs a year over the next decade, economists from Harvard University and USC are predicting. Changes in resident hours proposed, January 6, 2010 UPI reports that a U.S. non-profit group is proposing tighter regulation of resident physicians' duty hours in hospitals to reduce their fatigue and ensure patient safety. Health Spending Rises in 2008, but at Slower Rate, January 5, 2010 The New York Times reports that health spending grew in 2008 at the slowest pace in 48 years as the recession throttled back the explosive growth of health costs, the federal government reported Monday. Cigna's New CEO Aims To Accelerate Growth, Expand Globally, January 4, 2010 The Wall Street Journal reports that Cigna Corp. aims to accelerate its rate of profitable growth by expanding into new geographic markets--including additional overseas regions--and boosting business where it already operates, the health insurer's new chief executive said on his first day in that position.

Supreme Court Ruling Against Obamacare Would Take Insurance From Millions: Reports, January 9, 2015 NBC News reports: A Supreme Court ruling that strikes down federal subsidies for health insurance would pull coverage away from millions of people who have it now and send premiums soaring, according to two reports issued Thursday. Workers paying more for health insurance, but getting fewer benefits, January 8, 2015 The LA Times reports: Although the Affordable Care Act has not led to soaring insurance costs, as many critics claimed it would, the law hasn't provided much relief to American workers either, according to a new study of employer-provided health benefits. Harvard Ideas on Health Care Hit Home, Hard, January 6, 2015 The New York Times reports: For years, Harvard's experts on health economics and policy have advised presidents and Congress on how to provide health benefits to the nation at a reasonable cost. But those remedies will now be applied to the Harvard faculty, and the professors are in an uproar. Blue Shield in dispute with Sutter Health over costs, January 6, 2015 The LA Times reports: In a high-stakes fight over healthcare costs, insurance giant Blue Shield of California contends that a major hospital chain is trying to hide some of its business practices from public scrutiny.

February 2020

Page 16 © 2020, MCOL. All rights reserved.

From the Week of January 20, 2020

Online Survey Reveals Health and Managed Care Executives' Thoughts on Capitated Reimbursement, January 21, 2000 Healthcare and managed care executives indicated capitated reimbursement is more effective for health plans than healthcare providers, according to an online survey conducted at The Managed Care Information Center (MCIC) Web site. HMO Profits Plummet 59% in Second Quarter of '99, Reversing First Quarter Profit Gains, January 19, 2000 Tripling of Losses at Smaller HMOs Signal Continuing Trouble. After a promising first quarter in 1999, most HMOs relinquished their profit gains in the second quarter, as earnings fell from $274 million to $97.5 million, according to Weiss Ratings. Medical inflation to hit double digits in 2000, January 17, 2000 Employers report health care costs are increasing 10.4 percent for all plan types for 2000, according to a new survey conducted jointly by Watson Wyatt Worldwide and the Washington Business Group on Health (WBGH) with assistance from the Healthcare Financial Management Association (HFMA). But provider organizations responding to the same survey say the average fee schedule for services they provide is rising only 3.1 percent for this year. Cancer patients in Kaiser Permanente's clinical trials, January 18, 2000 When patients at a large non-profit HMO enroll in clinical trials of new cancer therapies conducted by that HMO, the costs of their medical care are only slightly higher than the costs of care for similar cancer patients not in trials, according to researchers with Kaiser Permanente (KP) in Oakland, CA.

Bellwether Insurer Sees Gain, January 22, 2010 The Wall Street Journal reports that a strong earnings report from bellwether UnitedHealth Group Inc. is the latest good news for the health insurance industry, following the special election in Massachusetts on Tuesday that cast uncertainty over health-overhaul efforts. California single-payer plan advances, January 22, 2010 The San Francisco Chronicle reports that as national health care reform grew more uncertain, the California Legislature on Thursday pushed forward a controversial proposal to create a single-payer health system in the state. Insurer Anthem invests in hospital initiative to improve safety, cut costs, January 20, 2010 The Los Angeles Times reports that California's largest health insurer is teaming with hospitals and doctors throughout the state to better share ways to improve patient safety and cut costs, leaders of the initiative said Tuesday. Survey: Nurses should have more influence, January 20, 2010 UPI reports that a strong majority says nurses should have more influence than they do now on health policy, planning and management, a U.S. survey indicates.

1,700 Hospitals Win Quality Bonuses From Medicare, But Most Will Never Collect, January 22, 2015 Kaiser Health News reports: Medicare is giving bonuses to a majority of hospitals that it graded on quality, but many of those rewards will be wiped out by penalties the government has issued for other shortcomings, federal data show. Medicaid Pay Hike Opened Doors For Patients, Study Finds, January 21, 2015 Kaiser Health News reports: Money talks. A temporary Medicaid pay raise that was part of President Barack Obama's health law made it easier for poor adults to get appointments with primary care doctors, according to a study. Analysis: Nurse practitioners doubled in 10 years, January 21, 2015 The Hill reports: The number of U.S. nurse practitioners nearly doubled over the last 10 years, rising from roughly 106,000 in 2004 to 205,000 as of Dec. 31, the profession's trade group said Wednesday. The Hill Docs urge big changes to health records program, January 21, 2015 The Hill reports: A coalition of 35 medical societies is urging federal regulators to make major changes to the Meaningful Use electronic health records (EHR) program. The Hill

February 2020

Page 17 © 2020, MCOL. All rights reserved.

Selected Factoids from the MCOL Daily Factoids e-newsletter

Kaiser Family Foundation recently published an analysis on individual health insurance market

performace. Here are some key findings for the third quarter of 2019:

• Medical loss ratios for the individual health insurance market were 75% in Q3 2019.

• Individual market gross margins per member per month were $131.17 in Q3 2019.

• Average monthly premiums were $515 and claims were $384 in Q3 2019.

• Average monthly hospital days per 1,000 enrollees were 23.2 for Q3 2019.

Source: Kaiser Family Foundation, January 6, 2020

Hospital Prices for Cancer Drugs Cost 86.2% More Than in Physician Offices

EBRI recently published an issue brief on oncology price differences between hospital outpatient depart-

ments (HOPDs) and physician offices (POs). Here are some key findings:

• Hospital prices for 37 infused cancer drugs averaged 86.2% more per unit than in physician offices.

• Price differences between HOPDs and POs ranged from 128.3% (nivolumab) to 428% (fluorouracil).

• Mean annual reimbursement per user of infused cancer drugs was $13,128 in POs and $21,881 in

HOPDs.

• Had HOPD prices matched PO prices, insurers would have saved $9,766 per user in 2016.

Source: EBRI, January 16, 2020

Individual Market Medical Loss Ratios Were 75% in Q3 2019

February 2020

Page 18 © 2020, MCOL. All rights reserved.

Selected healthsprocket lists from the healthsprocket.com

Fact Based List:

Definitive Healthcare: Current Areas of Use for AI in Imaging

1. Computer-aided image detection for disease states: 93%

2. Process or workflow improvement: 27%

3. Technological monitoring (equipment maintenance): 16%

4. Computer-aided image detection for fractures/musculoskeletal injuries: 15%

5. Care guideline consultation/suggestive care options: 13%

6. Financial or revenue related performance assistance: 13%

Notes: From an article entitled, "The Future of the AI Market: 2019 Study Results," by Tory Wal-

dron, based on results from Definitive Healthcare’s 2019 Artificial Intelligence Study.

Source: The Definitive Blog, January 27, 2020

Becker's: CMS proposes risk adjustment updates to Medicare Advantage: 5 things to know

1. Part 1 of the 2021 Advance Notice proposes changes to the Part C risk adjustment model and

the use of encounter data.

2. CMS proposes to calculate risk scores for 2021 by using 75% of the risk score calculated w/

the 2020 CMS-Hierarchical Condition Categories model & 25% of the risk score calculated w/

the 2017 version.

3. CMS also proposed changes to how it uses encounter data, or diagnostic information, in the

risk adjustment calculation process.

4. CMS is taking comments on the changes through March 6, 2020.

5. Payment policies for 2021 will be finalized in an annual rate announcement scheduled for

April 6.

Source: Becker's Hospital Review

February 2020

Page 19 © 2020, MCOL. All rights reserved.

From MCOL’s Quotes of the Week last month

“ACOs have had the greatest success of any of Medicare’s payment reform efforts. If interest in ACOs

dwindles, then doctors and hospitals will fall back into a fragmented, fee-for-service system, and any mo-mentum to transform our health system will be lost.”

Clif Gaus, Sc.D., President and CEO, National Association of Accountable Care Organizations

“Once Impeachment is resolved, the stage will be set to see if any of the potentially politically popular

health legislation is achievable, before the summer recess and before the election closes the window on Congressional action. Surprise billing compromise is still possible as well as some sort of drug pricing bill.”

Mark E. Lutes, Chair, Board of Directors; Member of the Firm, Epstein Becker Green

“People of all ages are turning to the web to find information, so it is not surprising that older Americans

are looking up physician ratings online. But it is a bit of a surprise that these online ratings now carry as much weight as recommendations from family and friends.”

David Hanauer, M.D., M.S., Program Director for Clinical Informatics, Michigan Institute for Clinical & Health

Research

“We think 2020 will be the year the PCPs wake up and realize that they can earn more and be happier

working independently of health systems. As a result, payers will try to tempt PCPs to break free by offering them higher reimbursement, start-up capital, and even subsidized office space and technology.”

Bob Kocher, MD, Partner, Venrock

“The trends shaping how we work – increasing use of technology, more telecommuting and the always-

on work culture – are leaving Americans more stressed, less rested, spending more time on social media, and less time with friends and family. For the business community, it is resulting in less engagement, less productivity and lower retention levels."

David M. Cordani, President and Chief Executive Officer, Cigna