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Health Care Reform Memo:
March 25, 2013

Deloitte Center for Health Solutions publication

The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.

My take: Looking ahead: the role of physicians in the U.S. health care system

From Paul Keckley, Executive Director, Deloitte Center for Health Solutions

These are difficult times for physicians. Yes, they still rank among our society’s most esteemed professionals and on average earn substantially more than 95 percent of Americans. But most are in a state of grudging acceptance that the future of the profession is dire, and its best days are in the past.

It’s understandable, especially to clinicians trained in a prior era when to practice meant more clinical autonomy, patient dependence, and handsome compensation with fewer restrictions about conflicts of interest and self-referral.

Indeed, the future of the profession is a new path for many. The facts are compelling:

  1. Demand for professional services is likely to increase due to demography and changes in the way individuals pay for and access medical care. The transition to high deductible insurance programs and the emergence of alternative health services means demand is expected to be increasingly met by innovators with newer business models that offer stronger value to individuals, employers, and government plans. As a result, demand for medical care is likely to no longer be exclusively met by physicians, whether practicing in groups or independently. Rather, it may be met by a wider range of health professionals that use person-centered methodologies to provide professional assistance.
  2. “Quality of care” is likely to be measured rather than assumed. There are more than 1,400 hospitals that can claim to be “Top 100” on someone’s list. Likewise, physicians are assumed to be competent and qualified if they have M.D. or D.O. after their names. However, valid and reliable measures of training, patient outcomes, safety, adherence to evidence-based practices, wastefulness, and patient experiences are central features in the Affordable Care Act (ACA) and are readily accessible online already. Add in social networks fueling unconstrained connectivity among consumers who share “data.” The reality is clear: medical care is no longer defensible as an art form that defies measurement. And those measures are expected to be quite public.
  3. The linkage between the practice of medicine and costs of health care is expected to be central to the national debate about economic recovery and government spending. The ordering pen of physicians is the basis for 80 percent or more of what’s spent in health care. Per Deloitte’s surveys of consumers, less than one in ten consumers feel comfortable challenging a treatment recommendation of their physician—“white coat anxiety” is a major deterrent to shared decision-making with patients. But the data also reflects huge variation in how medical professionals practice, with some prone to expensive testing and procedural volumes and others inclined to practice less so. As Congress tackles the grand bargain and “entitlement reform” takes center stage, the careful analysis of practice patterns and over-utilization of medical services are likely to come in focus.

What’s it mean to physicians? The good news is that the quality of students entering the profession has not declined. MCAT scores are up slightly, and today’s Millennial-generation students are realistic about its future. Most understand the future is not a carbon copy of the past. And, they are inclined to changes their predecessors might find alarming…

  • The power of online tools to share information and coach individuals and their influencers
  • Practicing in large organizations using team-based models and modern technologies
  • Tying compensation to individual and team performance with more emphasis on work-life balance
  • Respect for health professionals on their teams—the technicians, nurses, informaticians, alternative health providers, health coaches, web-designers, and post-acute providers whose contributions are vital to optimal outcomes
  • Concern about costs in addition to care
  • Performance measurement: egos will be in check as objective data about their performance and the performance of their teams become a basis for professional development and lifelong learning

Most physicians practicing today think the profession’s best days are behind. I disagree. Our society values the profession; that’s not likely to change. But as we make the difficult journey from patient centricity to person-centered care, change is necessary in how the professional equips his or her self to adapt.

Paul Keckely

Paul Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions

PS — Many elements in this week’s memo address issues of concern to physicians—liability reforms, accountable care, and others. Last week, we released our “2013 Survey of U.S. Physicians.” For survey results, and comparisons to findings in 2011, please click here.

Also, on April 4, join us for a "Live from the Center" webinar to gain insight on the potential impact of Congress' debt reduction efforts on the health care industry.

Implementation update

Pioneer ACOs push for changes

Last Tuesday, representatives from the Pioneer Accountable Care Organizations (ACO) Program met with Centers for Medicare & Medicaid Services (CMS) Acting Director Marilyn Tavenner to request changes to the structure of the program that would make implementation easier. Their main concern: the practicality and costs associated with performance measures linked to savings bonuses.

Background: CMS initiated three ACO programs in 2012: the Medicare Shared Savings Program per Section 3022 of the ACA and the Advance Payment ACO Model and Pioneer ACO Model per Section 3021 of the ACA. The Pioneer ACO model has 32 participating organizations serving 860,000 beneficiaries. The basic premise of all the ACO programs is the same: if an ACO achieves Medicare savings while hitting quality targets, it receives higher reimbursement from Medicare; if it does not meet the targets, it is held “accountable” through reduced reimbursement. The Pioneer program was “designed specifically for organizations with experience offering coordinated, patient-centered care, and operating in ACO-like arrangements…it is designed to work in coordination with private payers by aligning provider incentives, which will improve quality and health outcomes for patients across the ACO, and achieve cost savings for Medicare, employers, and patients.” Thus, the upside and downside for Pioneer ACOs is more aggressive than the other ACOs since they presumably already have the infrastructure and expertise to manage risk through business relationships with private payers or through insurance plans they own and operate themselves.

In addition to the over 250 CMS-authorized ACOs, the private sector has launched more than 150 ACOs targeting commercially insured and Medicaid enrollees. As a result, ACO implementation is having a widespread impact on the structure of physician-hospital-health plan relationships in most markets.

My take: opinions vary widely about whether and how ACO efforts will work long-term. Recent postings by leading thought leaders published in the Wall Street Journal reflect major differences in points of view about their impact:

“We believe that many of them [ACOs] will not succeed. The ACO concept is based on assumptions about personal and economic behavior—by doctors, patients and others—that aren't realistic. Health-care providers are spending hundreds of millions of dollars to build the technology and infrastructure necessary to establish ACOs. But the country isn't likely to get the improvements in cost, quality and access that it so desperately needs. The first untenable assumption is that ACOs can be successful without major changes in doctors' behavior. Many proponents of ACOs believe that doctors automatically will begin to provide care different from what they have offered in the past. Doctors are expected to adopt new behavior that reduces the cost of care while retaining the ability to do what's medically appropriate. But the behavior of doctors today has been shaped by decades of complicated interdependencies with other medical practices, hospitals and insurance plans. Such a profound behavior shift would likely require re-education and training, and even then the result would be uncertain…The second mistaken assumption is that ACOs can succeed without changing patient behavior. In reality, quality-of-care improvements are possible only with increased patient engagement. Managed care, as formulated in the 1990s by the HMO model, left consumers with a bad taste because the HMOs acted as visible gatekeepers to patient access to care. ACOs, seemingly wary of stirring a similar backlash, allow Medicare patients to obtain care anywhere they choose, but there is no preferential pricing, discounting or other way for ACOs to steer patients to the most effective providers.”—Clayton Christensen, Jeffrey Flier, and Vineeta Vijayaraghavan, “The Coming Failure of Accountable Care,” Wall Street Journal, February 18, 2013

“…There is an emerging pathway for health care providers to use such innovation to improve health and reduce costs—and to avoid being punished financially for their investments. Accountable care organizations at their heart are about aligning provider financial incentives with patient needs for better care and lower cost care. Unlike traditional third party, fee for service which pays more for doing more, the payment models underlying accountable care pay providers for achieving better care at lower cost…The early evidence from public and private ACOs suggests that real savings are possible. The right direction for health care policy is to build on ACO successes through further steps to reward low-cost innovation, while steering support away from health care providers who are unwilling to change.”—Elliott Fisher, Mark McClellan, Steve Shortell “The real promise of ‘Accountable Care,’” Wall Street Journal opinion, March 5, 2013

“Obamacare shifts money to favor the delivery of outpatient care through hospital owned networks. The irony is that in the name of lowering costs, Obamacare will almost certainly make the practice of medicine more expensive. It turns out that when doctors become salaried hospital employees, their overall productivity falls. Obamacare’s main vehicle for ending the autonomous, private delivery of medicine is the hospital owned “accountable care organizations.” The idea is to turn doctors into hospital employees and pay them flat rates that uncouple their income from how much care they deliver. The Obama administration imposes new costs on physicians who remain independent—for example, mandating that all medical practices install expensive information technology systems….Once they work for hospitals, physicians change their behavior in two ways. Often, they see fewer patients and perform fewer timely procedures. Continuity of care also declines, since a physician’s responsibilities end when his shift is over…”—Scott Gottlieb, “The Doctor won’t see you now—He’s clocked out,” Wall Street Journal, March 15, 2013

So here’s my view:

  1. It’s too early to know what the results will be for the 428+ ACO projects underway. It’s certain some will be successful in improving care and reducing costs and others will fail.
  2. It’s also certain that the transition from fee-for-service (FFS) payments to value-based payments tied to performance will continue. There’s no going back to volume-based payments. That will happen as a result of market demand.
  3. And the success of the ACO winners will involve more than coordination of care among clinically integrated physicians and their business partners and technologies that support these clinical and administrative efforts. It will require active participation by consumers—some with active diagnoses and medical problems, some in relatively good health.

Seems to me, a common thread that runs through ACOs, medical homes, avoidable readmissions, and other efforts to reduce cost without compromising care is the active participation of consumers themselves. Organized efforts by hospitals, physicians, plans and employers are not likely to succeed in lowering costs and improving care until and unless the industry understands how to engage individuals and families as active participants via shared decision-making and shared risk. It’s not about education, or incentives for providers and plans to share risk; it’s about changing the way people live their lives with or without a medical condition and regardless of health status and socioeconomics.

Adherence to evidence-based treatment plans, lifestyle changes, and common sense play a big role. So I agree in part with each of the experts—ACOs are here to stay, but many will fail. But their biggest challenge will be in changing the behavior of consumers, recognizing a one size fits all “patient engagement” strategy is doomed to failure.

Survey: 78 percent unfamiliar with Medicaid expansion; 48 percent unaware of HIX

A Kaiser Family Foundation telephone survey of 1,204 adults March 5-10 revealed low levels of awareness of key elements of the ACA:

  • Medicaid: 78 percent have not heard enough to say whether their state is expanding Medicaid per the ACA. 52 percent favor expansion to cover more low-income residents vs. 41 percent who favor “keeping Medicaid as it is today.” (67 percent of Republicans say keep Medicaid as is vs. 20 percent of Democrats)
  • Health insurance exchanges (HIXs): 48 percent are unfamiliar with their state’s HIX plan, 29 percent know “only a little,” 15 percent know “some,” and 7 percent report knowing “a lot.”
  • Cost of health care: 58 percent think costs are “going up faster than usual;” 31 percent believe they’re “going up about the same as usual.”
  • Impact of ACA: 62 percent say that they have not been personally impacted by the ACA; 22 percent report negative experiences (i.e., “don’t care for government intrusion,” “it’s costing more money for less coverage,” “some of my family members’ hours have been cut so the businesses don’t have to participate”); 17 percent report positive experiences (i.e., “great difference, I don’t have to pay as much as I did,” “my birth control is now free,” “just ease of mind”).
  • Household income less than $40,000: 68 percent do not have enough information about the ACA and how it will impact them personally; 30 percent have enough information.

(Kaiser Family Foundation, “Kaiser Health Tracking Poll: Public Opinion on Health Care Issues,” March 2013)

HHS to direct insurance reforms in four states

The Department of Health and Human Services (HHS) will be overseeing ACA-mandated insurance reforms in Missouri, Oklahoma, Texas, and Wyoming. Health insurance commissioners cite that they do not have the authority to enforce ACA provisions because of state law.

Note: the ACA does not require states to pass new laws to enforce ACA health insurance provisions, but permits HHS to regulate in situations when a state does not. A Commonwealth Fund report earlier this year concluded 11 states and DC were found to be making significant progress toward required reforms.

Related: per guidance released from U.S. Departments of Labor, Health and Human Services, and Treasury last week, states now have until January 1, 2016 to comply with regulations issued in July 2010 and 2011 and a health plan will be considered compliant prior to 2016 as long as the issuer abides by the state’s external review process (which must include 13 of the 16 National Association of Insurance Commissioners [NAIC] External Review Model Act requirements). By 2016, states must be compliant with all NAIC protections or health insurance issuers in the state will be subject to a federal-level external review process.

ACA elements directly impacting physicians and health professionals

The role physicians play as part of integrated health organizations and in managing patient care is a central feature in the ACA:

Section Provision Importance to physicians
6301 Patient Centered Outcomes Research Institute (PCORI)

Established to conduct comparative effectiveness research (CER). Goal: to help consumers, physicians, and policymakers make informed decisions surrounding medical treatment.

Implementation update: 25 awards amounting to $40.7 million have been awarded to conduct CER.

6002 Transparency reports and reporting of physician ownership or investment interests Payments or other transfer of values to physicians by applicable manufacturers must be reported annually beginning August 1, 2013 of this year. Applicable group purchasing organizations are required to report annually certain physician ownership or investment interests.
6003 Disclosure requirements for in-office ancillary services exception to the prohibition on physician self-referral for certain imaging services

The “Stark Law” prohibits physicians participating in the Medicare program from making self-referrals for MRI, CT, and PET services.

Implementation update: final rule issued November 28, 2010; effective January 1, 2011.

1202 Payments to primary care physicians

Increases Medicaid payments to primary care physicians to at least 100% of Medicare payments in 2013 and 2014 or if greater, 2009 payments using the conversion factor; additional costs to states will be fully funded by the federal government.

Implementation update: final rule issued November, 6 2012.

2703 State option to provide health homes for enrollees with chronic conditions

Physicians working in states that have elected this option may receive enhanced Medicaid reimbursement rates.

Implementation update: HHS must survey states that have elected to participate no later than January 1, 2014 and report findings on hospital readmission rates, chronic disease management, coordination of care, estimated savings, etc. to Congress. CMS has approved ten state plan amendments as of January 22, 2013.

3021 Establishment of Center for Medicare and Medicaid Innovation (CMMI) within
CMS
CMMI is tasked with administering new, innovative payment methodologies for providers participating in Medicare and Medicaid and oversees various demonstration projects enacted by the ACA.
3022 Medicare shared savings program (MSSP)

Accountable Care Organizations (ACOs) aim to coordinate care, improve outcomes, and reduce costs. Provider organizations that achieve savings and meet quality measures will receive higher reimbursements.

Implementation update: over 250 ACOs participating in the Medicare Shared Savings Program serving 4 million beneficiaries: 32 Pioneer ACOs serving 860,000 beneficiaries.

3024 Independence at home demonstration program

Establishes a demonstration program to test a payment incentive and service delivery model that utilizes physician and nurse practitioner directed home-based primary care teams.

Implementation update: began June 1, 2012; 15 independent practices and three consortia participating.

5101 National health care workforce commission

Tasked with developing a strategy to address health care work force shortages.

Implementation update: 15 panelists appointed, as of January 2013 has not convened and no funding has been appropriated.

5201 Federally supported student loan funds Established to provide long-term, low cost loans to students who agree to participate in a primary care residency and practice primary care for the duration of the loan. There is also a “Sense of the Congress” that ensures repayments are cycled back into the program.
5203 Health care workforce loan repayment programs Establishes a loan repayment program for pediatric subspecialists and providers of mental/behavioral health services working in a health professional shortage area, medically underserved area, or medically underserved population.
5301 Training in family medicine, general internal medicine, general pediatrics, and physician assistantship Allows the Secretary to make grants to, or enter into contracts with, an accredited public or nonprofit private hospital, school of medicines, or training programs to provide financial assistance to students. $125 million for fiscal year (FY) 2010, and as necessary for FY2011-2014.
5402 Health professions training for diversity Funds scholarships for disadvantaged students who commit to serving as primary care providers (PCPs) in underserved areas and expands loan repayment for faculty in eligible institutions.
5405 Primary Care Extension Program

Establishes the Primary Care Extension Program to provide support and assistance to educate primary care providers.

Implementation update: the Agency for Healthcare Research and Quality has awarded four cooperative grants to support state-level initiative to aid in primary care redesign.

5501 Expanding access to primary care services and general surgery services Institutes 10% Medicare payment bonus from 2011-2016 to primary care providers and general surgeons in primary care shortage areas.
5503 Distribution of additional residency positions Residency positions that go unfilled for three consecutive cost reports will be redistributed by U.S. Department of Health and Human Services (HHS) Secretary for training PCPs.
5601 Spending for federally qualified health centers (FQHC) Authorizes additional funding for FQHCs as follows: FY2010 - $2.98B; FY2011 - $3.86B; FY2012 - $4.99B; FY 2013 - $6.44B; FY2014 - $7.33B; FY2015 - $8.33B.
5604 Co-locating primary and specialty care in community-based mental health settings

Provides award grants and cooperative agreements to entities to establish demonstration projects for coordinated services to special populations through the co-location of primary and specialty care services in community-based mental and behavioral health settings.

Implementation update: in 2012, applications became available for 32 grants worth $35.78 million, which provides up to $400,000 annually per grant for the next four years.

10503/2303 Community Health Centers and National Health Service Corps Fund Establishes a Community Health Centers and National Health Service Corps Fund and increases mandatory funding for community health centers to $11 billion over five years (FY2011 – FY2015).
2713 Coverage of preventative health services

Requires all new health plans to cover USPSTF recommended and other preventive health services, potentially improving patient outcomes.

Implementation update: in effect.

Sources: ACA (P.L. 111-148); Congressional Research Service, "Physician Supply and the Affordable Care Act," January 2013

Legislative update

Congress approves continuing resolution to fund federal operations through September

Thursday, Congress passed the Consolidated and Further Continuing Appropriations Act, 2013 (H.R. 933) to avert a government shutdown March 27 and fund federal government operations through September 30, 2013. The bill, which originated in the House, was amended by the Senate and sent back to the House for final approval passing 318-109 preserving amendments made in the Senate. Highlights:

  • Sequestration: department and agency funding is still subject to sequestration, which brings the total discretionary spending allocated for the remainder of fiscal year FY2013 to $984 billion.
  • Department and agency funding: U.S. Department of Defense, Department of Veterans Affairs, Department of Homeland Security, Department of Justice, Department of Commerce, Department of Agriculture, and science related projects (i.e., space technology and National Science Foundation research activities) were appropriated funding above FY2012 levels. Remaining agencies and departments were funded at FY2012 levels.
  • ACA: the Office of Management and Budget’s (OMB) requests for $949 million for HIX implementation and $567 million for programs such as the Health Care Fraud and Abuse Account (Section 6402 of the ACA) were not included.
  • U.S. Food and Drug Administration (FDA): the medical device user fees will be made available at FY2013 levels.

Medical device tax repeal gets Senate approval; will not apply to smartphones

Last week, an amendment to repeal the 2.3 percent medical device tax that went into effect January 1, 2013 passed in the U.S. Senate 79-20 with support from 24 Democrats and joining the Republicans during the budget resolution process. The repeal will not become law without further legislation and passage in the House.

Related: last week, the FDA announced in a House Energy and Commerce hearing that the 2.3 percent medical device tax will not be applied to smart phones or tablets or manufacturers selling health-related apps.

Note: April 29-May 1, Deloitte will host a conference at Deloitte University in Westlake, Texas focused on the medical device tax and key legislative and market trends impacting device manufacturers, distributors, and their partners. For more information visit the registration site here.

Dental care added to Medicaid

Last week, the Senate passed by voice vote an amendment improving dental care for children on Medicaid, offered by Senator Ben Cardin (D-MD). The nonbinding amendment to the budget resolution sets the stage for legislation that would expand oral health education and preventive dental care.

State update

States focus on medical liability reform

Liability reform is not in the ACA, but funding for pilots in states to test reforms was included. It has historically been left to states to develop a strategy. To date, most have used peer review or dispute resolution programs to expedite handling of cases, and 35 have caps of varied size (e.g., pain and suffering).

Medical liability provision States Total
Pre-trial alternative dispute resolution and screening panels laws AL, AK, CA, CO, DE, DC, FL, GA, HI, ID, IL, IN, KS, LA, ME, MD, MA, MI, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OR, PA, SC, SD, TX, UT, VT, VA, WA, WV, WI, WY 40
Medical or peer review panels laws AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY 49
Damage award limit or cap laws AK, AR, CA, CO, CT, FL, HI, ID, IL, IN, IA, KS, LA, MD, MA, MI, MS, MO, MT, NE, NV, NJ, NM, NC, ND, OH, OK, SC, SD, TN, TX, UT, VA, WV, WI 35

Source: National Conference on State Legislatures, Medical Liability/Medical Malpractice Laws, updated as of August 15, 2011

Last week, Oregon Governor John Kitzhaber (D) signed a bill (S.B. 483) that creates a process in which adverse health care incidents can be resolved without patients and providers going to court. Illinois and Michigan have passed similar legislation. And currently, two federal proposals are being vetted on the hill as a precursor to liability reform:

Proposal and sponsor Key highlights Status

H.R. 36 Health Care Safety Net Enhancement Act

Sponsor: Representative Charles Dent (R-PA)

  • Amends the Public Health Service Act
  • Would ensure that hospital and emergency department physicians and physician groups are considered employees of the Public Health Service, and will therefore be covered under that organization’s liability coverage for any civil action surrounding emergency or post-stabilization services as of January 1, 2014.
  • January 3, 2013 the bill was introduced in House
  • January 4, 2013 the bill was referred to the House Energy and Commerce Subcommittee on Health

S. 44 Medical Care Access Protection Act of 2013 (MCAP Act)

Sponsor: Senator Rob Portman (R-OH)

 

  • Sets guidelines for lawsuits for liability claims.
  • Sets three year statute of limitation
  • Courts must carry out sanctions for unnecessary lawsuits
  • Noneconomic damages limited to $250,000 from provider/health care institution
  • No more than $500,000 can be gained from multiple institutions
  • Restriction by the court on attorney contingency fees.
  • Defined qualifications for expert witnesses.
  • Lists cases where the award of punitive damages may be authorized.
  • Prohibits the naming of a health care provider in a product liability or class action lawsuit for FDA-approved drugs.
  • Allows for periodic payments for damage awards.
  • January 22, 2013 introduced; read twice and referred to the Senate Committee on Health, Education, Labor, and Pensions

My take: liability reform that employs an evidence-based standard of care to delineate between negligence and a bad outcome is essential to health reform. Defensive medicine adds 1-2 percent to direct costs in the system, and is a huge emotional drain on physicians. Seven percent are exposed to the threat of a lawsuit annually and a third says they practice defensively. The bad apples in medicine are few; the desire to treat patients appropriately the norm. But widespread variation in diagnosing and treating medical problems, and failure to treat patients per strong evidence is systemic and costly. It can only be addressed if policymakers and medical professionals address both issues in tandem—liability reform and increasing physician adherence to evidence-based care to reduce inappropriate variation and costs.

Health plan enrollees interested in HIXs if given choice to participate

A recent J.D. Power and Associates study found that 48 percent of health plan members are interested in using HIXs to obtain coverage, particularly those currently in the individual market with high deductible health plans (HDHPs). Key findings:

  • Current individual market: 73 percent of members who purchase insurance on their own instead of through their employer say they "definitely will" or "probably will" shop for coverage using a state exchange, if available.
  • Deductible amount: 59 percent of members in HDHPs indicate they are interested in using HIXs vs. 45 percent in low-deductible plans.
  • Plan choice: 50 percent of members whose employer offered one health plan were interested in HIXs vs. 36 percent of those whose employer offers a choice of health insurance brands.
  • Service quality: 60 percent of members who have contacted their health plan regarding a problem during the past year were interested in HIXs vs. 45 percent of those who have not had a problem with their health plan.

(Source: JD Power and Associates, “2013 Member Health Plan Study,” March 2013)

Report: 17 percent of uninsured are illegal or recently arrived immigrants not eligible for Medicaid expansion

Among the low-income, uninsured population targeted for Medicaid expansion in states, 17 percent are illegal or recently arrived immigrants, according to a Robert Wood Johnson Foundation study. The ACA’s Medicaid expansion provision excludes non-citizens, which will have various implications for providers and states that may still be faced with uncompensated care costs in 2014. The impact varies significantly by state, with illegal or new immigrants representing 24 percent of low-income, uninsured non-elderly adults in Nevada vs. 3 percent in Kentucky.

(Source: RWJF, “State Estimates of the Low-Income Uninsured Not Eligible for the ACA Medicaid Expansion,” March 2013)

Moody’s: DSH cuts complicate Medicaid expansion decisions in states

According to Moody’s, disproportionate share hospital (DSH) payment reductions per Section 1203 of ACA will put political and budgetary strain on state governments.

"States that opt out of Medicaid expansion will have to choose whether to compensate for the shortfalls with their own funds or leave hospitals to absorb the costs, which will increase rating pressure on the hospitals…States that choose to fund uncompensated care costs themselves could face budgetary strain."—Nicole Johnson, Senior Vice President, Public Finance Group

(Source: Moody’s Investors Service, “Announcement: Moody’s: Medicaid and Medicare DSH payment reductions could challenge states and hospitals,” March 14, 2013)

Report: transparency on hospital prices inadequate in states

The Catalyst for Payment Reform (CPR) and Health Care Incentives Improvement Institute (HCIII) report concluded that a majority of states earned poor ratings for lack of transparency for hospital and outpatient pricing. Researchers found that most states did not make prices for services readily or lacked laws mandating full disclosure of insurance coverage.

Grades:

  • A = 2 states
  • B = 5 states
  • C = 7 states
  • D = 7 states
  • F = 29 states

Scoring criteria: ability for patient to request pricing information prior to rendering of services, provision for publishing a public report on pricing information, provision for posting pricing information on a public website, and provision for publishing a report to the state only.

(Source: Health Care Incentives Improvement Institute, “Metrics For Transformation – Transparency, March 2013)

Medicaid expansion update

25 states and D.C. are participating in Medicaid expansion or have Governors in support of expansion; 19 states have indicated they are highly unlikely to expand their program:

Announced or Governor in support of expansion Not participating or highly unlikely to participate Undecided or undeclared
AR, AZ, CA, CO, CT, DC, DE, HI, IL, MA, MD, MI, MN, MO, MT, ND, NH, NJ, NM, NV, NY, OH, OR, RI, VT, WA AL, FL*, GA, IA, ID, IN, LA, ME, MS, NC, NE, OK, SC, SD, TX, UT, VA, WI, WY AK, KS, KY, NH, PA, TN, WV

Democratic  ■ Republican ■ Independent
*Governor supports expansion

Source: Kaiser Family Foundation

Note: states do not have a deadline to make a decision on Medicaid expansion and may opt in or out of participation at any time. This chart was compiled using publicly available information (as of March 24, 2013) and is subject to change.

Health exchange update

17 states—12 led by Democratic Governors, four led by Republicans, and one Independent—and the Democratic mayor of D.C. have announced plans to operate state-based exchanges. Seven states—four led by Democratic Governors and three led by Republicans—will participate in state-partnership exchanges with HHS. The remaining 26 states will default to a federally-facilitated exchange.

State-based exchange State-partnership exchange Federally-facilitated exchange
CA, CO, CT, DC, HI, ID, KY, MA, MD, MN, NM, NV, NY, OR, RI, UT, VT, WA AR, DE, IA, IL, MI, NH, WV AK, AL, AZ, FL, GA, IN,  KS, LA, ME, MO, MS, MT, NC, ND, NE, NJ, OH, OK, PA, SC, SD, TN, TX, VA, WI, WY

Democratic  ■ Republican ■ Independent
Source: HHS

HIX announcements last week:

  • The Minnesota Senate passed (39-28) a bill approving a state-based HIX, with votes split along party lines. Its HIX is expected to enroll approximately 1.3 million residents by 2016, including 300,000 who are currently uninsured. A new state agency will be formed, providing 86 new job opportunities, per the state’s announcement.
  • California state officials are debating whether individuals applying for its HIX “assister” positions should receive background checks and fingerprinting before hire. Approximately 20,000 individuals are expected to be hired in the next few months through the Assisters Program to provide consumer education and help with enrollment in the state’s HIX, Covered California. These assisters are expected to earn $58 per new application submitted and $25 per renewal application will have access to Social Security numbers, dates of birth, income and tax data. Some officials are worried about the cost of the background checks, and possible delays to the program as a result of an intense screening system.

Background: states have the option to certify staff and volunteers of eligible organizations designated by the state to be certified as “application assisters” in addition to the exchange navigator program. Organizations eligible for compensation in California include: faith-based, labor unions, non-profit, school districts, tax preparers, trade, industry, and professional organizations.

Industry news

Xeijanz case raises question of ROI for basic research funded by taxpayers

Xeijanz is an arthritis drug whose compound is based in part on research funded in the National Institutes of Health (NIH) dating back almost 20 years. Last week, Senator Ron Wyden (D-OR) sent a letter to NIH Director Dr. Fran Collins asking “in the face of this difficult economic climate and the increasing scarcity of research dollars, it is time to revisit the idea of striking a better balance between encouraging profit, innovation, accessibility and affordability. The NIH should convene an outside panel to re-examine the pricing of medicines and treatments developed with public funds.”

Note: NIH funds basic research. Its budget has shrunk 10 percent since 2010, and will be reduced 8 percent ($54 billion over 10 years) as a result of the sequestration (American Association for the Advancement of Science). The NIH lost $1.5 billion (5 percent) of its FY2013 budget, and will lose $11.3 billion (8 percent) through 2017.

@Regulatory update: compliance with Euro pharmacovigilance guidance

Note: @Regulatory is a feature in the Monday Memo, providing the latest regulatory, legislative, and other public policy developments affecting life sciences and health care organizations. To access the @Regulatory newsletter, visit the website here.

The European Medicines Agency (EMA) published its first set of seven Good Pharmacovigilance (GVP) modules in June 2012, after a public consultation period that went from February to April 2012. In total, EMA anticipates 16 modules with the remainder expected to be released for consultation in 2013. In this issue of @Regulatory, specific compliance and risk abatement consideration for drug manufacturers is provided.

Drug costs down 1 percent in 2012

For the first time since 1957, annual drug spending in the US decreased from the prior year. Spending in 2012 was $325.7 billion according to IMS Health. In 2012, 84 percent of dispensed drugs in the U.S. were generics—this could reach 87 percent in coming years. IMS predicts drug spending will increase 4 percent in 2014, then 2 percent in 2015 as other drugs lose patent protection.

(Source: Katie Thomas, “U.S. Drug Costs Dropped in 2012, but Rises Loom”, New York Times, March 18, 2013)

Pre-existing condition provision funded by $63 fee on privately insured

Employers and commercial health plans will pay $63 per covered employee, spouse, and dependent in 2014 to fund high risk pools: $12 billion in 2014 $8 billion in 2015, and $5 billion in 2016—based on the ACA requirement that no one be denied coverage for pre-existing conditions (Section 1101). The fee is applicable to self-insured plans and private plans sold by insurers. Insurers, then, will tap the fund to pay for high costs coverage—those with annual costs between $60,000 and $250,000 bills. Per CMS, the fee is offset by lower individual market premiums estimated at between 10 percent and 15 percent.

FDA pre-emption doctrine in spotlight: Mutual Pharmaceuticals vs. Bartlett arguments heard in U.S. Supreme Court case

Can consumers sue the manufacturers of generic drugs disregarding “federal pre-emption”? The FDA’s Pre-emption Doctrine holds that the FDA’s approval process is the national standard for approvals pre-empting state or other oversight (the pre-emption doctrine was upheld in 2011 in Pliva vs. Mensing). Oral arguments were heard by the U.S. Supreme Court March 19, the opinion is yet to be determined.

QUEST quality improvement project projects $9 billion savings

Per data released last week from the Premier QUEST collaborative involving data from its 333 participating hospitals, sepsis rates declined 23 percent and central line bloodstream infection rates decreased 60 percent since 2007, resulting in a reduction of costs per discharge of $1,110. Susan DeVore, Premier's CEO noted that patient experience scores did not improve significantly in the same period—estimated at 3 percent among participating facilities.

Gene therapy promising in cancer treatment

Wednesday, a study by Memorial Sloan Kettering researchers published in Science of Translational Medicine reported that gene therapy could be used to manipulate the immune system. Their treatment—genetically modifying a patient’s T cells to target diseased leukemia cells—resulted in complete remission in 59 days for four of the five patients in the small scale study.

(Source: Science of Translational Medicine, “CD19-Targeted T Cells Rapidly Induce Molecular Remissions in Adults with Chemotherapy-Refractory Acute Lymphoblastic Leukemia,” March 20, 2013)

FDA changes approval threshold for Alzheimer’s disease drugs

Previously, a drug approved for Alzheimer’s disease treatment had to show proof of cognitive improvement—a reduction in memory loss—to be approved. Last week, the FDA changed its position allowing that drugs that stabilize memory impairment could also be approved.

Study: preventable hospital admission rates linked to community health status

The number of preventable hospital admissions is highest in the unhealthiest counties, with 82.8 preventable visits for every 1,000 Medicare beneficiaries. Findings:

Determinants of health Least healthy counties Healthiest counties Nationwide
Preventable hospital stays (per 1,000 Medicare enrollees) 82.8 57.2 74
Smoker rate 24% 16% 21%
Obesity rate 30% 23% 28%
Primary care physicians 1 per 2,129 residents 1 per 1,491 residents 1 per 1,978 residents
Excessive drinking rate 15% 17% 15%

Sources: Robert Wood Johnson, Roadmaps to Health

Lawsuit filed against IRS for HIPAA violation

An unnamed HIPAA-covered entity filed a civil lawsuit in California against the U.S. Internal Revenue Service (IRS) claiming its agents unlawfully confiscated 60 million medical records of 10 million individuals on March 11, 2013. Per the complaint, the IRS executed a warrant regarding a tax matter of a former employee, however the search warrant did not authorized the seizure of medical records. The company also alleges that IRS agents threatened the company to rip the servers containing the medical data out of the building if it did not voluntarily hand them over. The lawsuit seeks $25,000 "per violation per individual" in compensatory damages, as well as punitive damage.

Research snapshots

New industry and peer-reviewed studies of note to health system transformers…

Physicians concerned about the future of the profession

Citation: Deloitte 2013 Survey of U.S. Physicians

Objective: to assess opinions of U.S. practicing physicians about their views of health reform, the profession and their strategies to adapt/respond.

Methodology: an online survey of 613 U.S. physicians from a stratified random sample of U.S. primary care and specialist physicians drawn from the American Medical Association’s (AMA). Data reflect the national distribution of physicians in the AMA master file by years in practice, gender, region, and medical specialty.

Key Findings: physicians are pessimistic about the future of medicine. The majority worry about the profession’s erosion of clinical autonomy and income, and its inability to achieve medical liability reform. Highlights:

  • Seven of ten physicians are satisfied with their job; Satisfaction is driven by patient relationships
  • 57 percent anticipate capitation will replace FFS payments in the US system
  • Medical liability (malpractice) reform is a major concern
  • Most believe HIXs are unlikely to be ready for enrollment by the 2013 deadline
  • Medicaid and Medicare reimbursements are problematic, prompting many to limit or close their practices
  • Physician-hospital integration expected will increase
  • Clinical decision-support information technologies that reduce unnecessary services and increase clinician adherence to evidence-based practices are of interest to physicians
  • Connectivity with consumers (patients) using online or mobile technologies and personal health records expected to become increasingly important to physician

My take: physicians recognize that the “new normal' may necessitate major changes in the profession that require them to practice in a different setting as part of a larger organization that uses technologies and team-based models for patient care. Affirming the unique value of the profession, maintaining open communication based on trust , structures that engage physicians in leadership,, and persistent sharing of credible data about safety, outcomes, costs, and patient experiences are requisite to health care organizations seeking a mutually satisfying, effective business relationship with physicians.

Systematic review: leading studies about the costs of defensive medicine

Study citation Objective/Methodology Key findings
Anupam B. Jena, M.D., Ph.D., et al, “Malpractice Risk According to Physician Specialty”, New England Journal of Medicine, 2011; 365:629-63

To determine “proportion of physicians who are likely to face malpractice claims, the size of payments, and the cumulative risk of being sued during a physician’s career.”

“The investigators used physician-level malpractice claims obtained from the database of a large professional liability insurer to characterize malpractice risk among physicians in 25 specialties. Malpractice data from 1991 through 2005 were analyzed for a total of 40,916 physicians across 233,738 physician years of coverage. The cumulative risk of ever being sued was estimated among physicians in high- and low-risk specialties.”

  • Physicians in four of the least-sued specialties—psychiatry, pediatrics, family medicine, and dermatology—have a 75% chance of being sued by age 65 vs. physicians in the five most-sued specialties—neurosurgery, thoracic cardiovascular surgery, general surgery, orthopedic surgery, and plastic surgery—who have a 99% chance.
  • On a yearly basis, 7.4% of all physicians have a malpractice claim: 22% of these claims lead to a payment by the physician. Through age 65, physicians in the low-risk specialties run a 19% risk of facing a suit that pays off for the plaintiff, compared to 71% risk for the high-risk specialties.
  • The size of average payments ranged from $117,832 for dermatologists to $520,923 for pediatricians. However, payment variability and the risk of the specialty are not related. For example, neurosurgeons are roughly six times more likely to face a malpractice suit than pediatricians are, but their average payment of $344,811 is substantially lower.
Thomas, William, et al, “Low Costs Of Defensive Medicine, Small Savings From Tort Reform,” Health Affairs, 2010, vol. 29 no. 9 1578-1584

“In this paper we present the costs of defensive medicine in thirty-five clinical specialties to determine whether malpractice liability reforms would greatly reduce health care costs.”

“We drew on two primary sources of data for the study. We measured health care costs using a database of more than 400 million paid medical and pharmaceutical claims from CIGNA HealthCare for the two-year period July 1, 2004, through June 30, 2006. As the tort signal, we used data on physicians’ medical malpractice insurance premiums.”

“From our analyses, we conclude that defensive medicine practices exist and are widespread, but their impact on medical care costs is small…

We found that estimated savings resulting from a 10% decline in medical malpractice premiums would be less than 1% of total medical care costs in every specialty. These savings are lower than most previous estimates, and they suggest that the presumed impact of tort reform on health care costs may be overstated.”

DM, Studdert, et al. “Defensive medicine among high-risk specialist physicians in a volatile malpractice environment,” JAMA, 2005; 293(21):2609-17

“To study the prevalence and characteristics of defensive medicine among physicians practicing in high-liability specialties during a period of substantial instability in the malpractice environment.”

“Mail survey of physicians in 6 specialties at high risk of litigation (emergency medicine, general surgery, orthopedic surgery, neurosurgery, obstetrics/gynecology, and radiology) in Pennsylvania in May 2003.”

“A total of 824 physicians (65%) completed the survey. Nearly all (93%) reported practicing defensive medicine.

‘Assurance behavior’ such as ordering tests, performing diagnostic procedures, and referring patients for consultation, was very common (92%)

Among practitioners of defensive medicine who detailed their most recent defensive act, 43% reported using imaging technology in clinically unnecessary circumstances.

42% of respondents reported that they had taken steps to restrict their practice in the previous 3 years, including eliminating procedures prone to complications, such as trauma surgery, and avoiding patients who had complex medical problems or were perceived as litigious.

Defensive practice correlated strongly with respondents' lack of confidence in their liability insurance and perceived burden of insurance premiums.”

Jackson Healthcare, “Quantifying the Cost of Defensive Medicine,” February 2010

“A national survey of physicians to qualify their attitudes regarding the practice of medicine in light of the health care reform Environment.”

“In December 2009, Jackson Healthcare invited 138,686 physicians to participate in a confidential online survey in an effort to quantify the costs and impact of defensive medicine. Over 3,000 physicians spanning all states and medical specialties completed the survey, a 2.21 percent response rate. The survey error range is at the 95% confidence level: +/-1.15 percent.”

“Physicians attributed 34% of overall healthcare costs to defensive medicine: nine out of 10 physicians (92%) reported practicing defensive medicine; In cases of true negligence, nine out of 10 (89%) physicians agree that patients receiving negligent treatment should be compensated; emergency room, primary care and OB/GYN physicians are most likely to practice defensive medicine; younger physicians and female physicians reported less tolerance for risk and are more likely to practice defensive medicine; physicians who reported practicing defensive medicine, estimated the following:

  • 35% of diagnostic tests were ordered to avoid lawsuits
  • 29% of lab tests were ordered to avoid lawsuits
  • 19% of hospitalizations were ordered to avoid lawsuits
  • 14% of prescriptions were ordered to avoid lawsuit
  • 8% of surgeries were performed to avoid lawsuits. “

My take: there’s evidence from these studies that physicians believe the problem of defensive medicine to be much greater than medical chart abstracted data indicates in reality. Both the perception of defensiveness and the true cost are relevant and should be addressed.

Physicians who practice per the evidence where evidence is strong should be protected from punitive pursuits; physicians that practice outside the boundaries of best practice should be provided tools to align their practices with evidence, or face peer rejection. The profession must play an active role in policing itself, and it must embrace evidence as a standard for practice so garner public and regulatory support for relief from frivolous lawsuits.

Quotable

“A new study found widespread failure among physicians to follow clinical guidelines for treating ovarian cancer, which kills 15,000 women a year in this country. This disturbing news shows the kind of challenge that health care reformers are up against in improving medical care—even when cost is not the issue. The study, presented at a conference on gynecologic cancers on Monday, analyzed treatment of more than 13,000 women with ovarian cancer who received their diagnoses between 1999 and 2006. Only 37 percent received the care recommended in guidelines set by the National Comprehensive Cancer Network, an alliance of 21 major cancer centers…Women who received the recommended treatment were 30 percent less likely to die than those that did not…The poor showing raises perplexing issue for health care reform. The Affordable Care Act has many provisions intended to improve quality of care. They include new research organizations to help doctors and patients understand which treatments work best as well as pilot projects to test new ways of paying for and organizing health care delivery to reduce costs and improve quality. However, such measures won’t accomplish much if doctors ignore the recommendations made by experts from their own professional societies…The law promotes treatments based on sound evidence and electronic health records (which allow for data collection), two advances that could make it easier for patients and their primary care doctors to find specialists who have superior results.”

—Editorial Board, New York Times, “Inadequate Treatment of Ovarian Cancer,” March 13, 2013

“With a nationwide shortage of 90,000 physicians projected by 2020, U.S. medical schools are on track to increase their enrollment by 30 percent. In fact, the 960 additional graduating medical school students participating in this year’s Main Residency Match are due primarily to four new medical schools included in this year’s Match and the efforts of existing schools to expand enrollment. To avert the coming shortage, we need to begin today to increase the overall supply of physicians in this country by lifting the cap on residency training positions imposed in 1997 by the Balanced Budget Act. Inaction will only mean extensive shortages of both primary care physicians and a wide range of specialists. Reducing our nation’s deficit is important. But the question must be asked: If there aren’t enough doctors, what will you do?”

—AAMC, “AAMC Concerned about Reports of Unmatched Students”, March 15, 2013

Fact file

  • January 2013 national health spending:
      Spending in billions % growth from January 2012
    Hospitals $925 +4.8%
    Physician services $557 +1.7%
    Prescription drugs $282 +3.7%
    Nursing homes $231 -0.2%
    Dental services $114 +2.8%
    Home health care $81 +8.4%
    Medical labs $557 +1.7%
    (Source: Altarum Institute, “Spending Brief #13-03: January 2013 Data,” March 2013)
  • Median physician income vs. inflation: 2000-2011

    Median physician income vs. inflation: 2000-2011

    (Source: Bureau of Labor Statistics, National Occupational Employment and Wage Estimates)
  • Annual changes in compensation

    Annual changes in compensation

    (Source: Bureau of Labor Statistics, National Occupational Employment and Wage Estimates)
  • Physician compensation by work setting

    Physician compensation by work setting

    (Source: Medscape Physician Compensation Report: 2012 Results)
  • Entering medical student MCAT scores
    Year Overall Average Score Physical Science Average Verbal Reason Average Biological Sciences Average Writing Sample*
    25th percentile 50th percentile 75th percentile
    2012 25.2 8.4 8.1 8.8 M O Q
    2011 25.1 8.4 7.9 8.8 M O Q
    2010 25.0 8.3 7.9 8.8 M O Q
    2009 25.1 8.3 8.1 8.7 M O Q
    *Writing sample scoring section: there are two individual timed essays, which are then read and scored by two separate readers. The readers add together the scores which will range from 4-24, and the numerical value is then converted to a letter on a scale of J-T; J being the lowest and T being the highest.

    Note: The writing section of the MCAT has been discontinued after 2012, to be replaced by a trial section for the 2013-2014 testing cycles, in order to introduce a new section for 2015.

    (Source: American Medical Association)
  • MD vs. DO (2011):
    Measurement Doctor of Osteopathic Medicine Medical Doctor
    2011 graduates 4,159 17,364
    Number of Schools 34 135
    Average MCAT Score 26.51 31.1
    Average student GPA 3.50 3.67
    Medical school graduates choosing to be a primary care physician 60% 24%
    (Source: Kaiser Health News, “Osteopathic Physicians: An Answer To Rural Health Care Needs?” March 11, 2013; The Washington Post, “Osteopathic doctors and help alleviate a shortage of medical care in rural areas,” March 11, 2013)
  • Privacy and security: data security breaches and medical identity theft are growing concerns, with thousands of cases reported each year. CMS tracks nearly 300,000 compromised Medicare-beneficiary numbers. The Office for Civil Rights has received more than 77,000 complaints regarding breaches of health information privacy and completed more than 27,000 investigations, which have resulted in more than 18,000 corrective actions. (Source: Taitsman “Protecting Patient Privacy and Data Security,” New England Journal of Medicine, 2013;368:977-979, March 14, 2013)
  • Sequester’s effect on physician executives: 58 percent (339) of physician executives surveyed reported that sequestration budget cuts will affect their health care organizations, 21.4 percent (126) said they did not know, and 21.2 percent (124) said the sequester would not affect their organization. (Source: American College of Physician Executives, “Sounding Board,” March 2013)
  • February 2013 U.S. health care prices: health care prices rose 0.4 percent compared to January 2013 prices. Prices were 1.8 percent higher across the range of healthcare industries than February 2012. Prices received by hospitals and dentist offices increased 0.6 percent, physician office prices rose 0.2 percent, the price for home healthcare services increased 0.3 percent. (Source: Bureau of Labor Statistics, “Producer Price Index-February 2013,” March 2013)
  • EHR incentive payment update: in February, 27,500 Medicare eligible professionals received $425 million; 5,500 Medicaid eligible professionals received $100 million; and 90 hospitals in either program received $200 million, for a total of $725 million in payments to 33,090 providers.  (Source: Mary Mosquera, “EHR incentive payments top $12 billion,” HealthcareITNews, March 15, 2013)
  • Employer wellness programs: less than half (48 percent) of organizations worldwide actively apply the basic elements of a health management program, such as ensuring a healthy workplace; 44 percent of organizations have established health-related policies and procedures; less than one-third (31 percent) actively use a formal, written multi-year strategic plan for health and wellness. (Source: Mercer, “Talent Barometer Survey,” March 2013)
  • Cancer in Medicare beneficiaries: researchers found a 32 percent difference in Medicare spending for beneficiaries with cancer who did not die from it, among the regions. For patients who died, the spending difference varied 41 percent among regions. (Source: Gabriel Brooks et al., “Regional Variation in Spending and Survival for Older Adults With Advanced Cancer,” Journal of the National Cancer Institute, March 2013)
  • HIT workforce shortage: nearly 80 percent of global healthcare CEOs surveyed expect to increase information technology (IT) investments in 2013, yet more than half (51 percent) fear their staff cannot keep up with the pace of technological change. 77 percent anticipate changes in their hiring and promotion strategies to address the gap in health IT.  (Bernie Monegain, “Health IT worker shortage looms,” HealthcareITNews, March 12, 2013)
  • Obesity links to car accidents: obese drivers are up to 78 percent more likely to be killed in car accident than drivers who are not obese. Motor vehicle accident death risk ratio (RR) increased as body mass index (BMI) increased: RR=1.21 for BMI 30–34.9; RR=1.51 for BMI 35–39.9; and RR=1.80 for BMI greater than or equal to 40. Estimated BMI effects varied by gender, but no meaningful variation across levels of vehicle type, collision type or seat belt use. (Source: Thomas Rice, “Driver obesity and the risk of fatal injury during traffic collisions,” Emergency Medicine Journal, March 2013)
  • Preventive services: in 2011 and 2012, approximately 105 million individuals were provided a minimum of one preventative health care service free of out-of-pocket fees due to the ACA. (Source: HHS, “Seventy-one million additional Americans are receiving preventative services coverage without cost-sharing under the Affordable Care Act,” March 2013)
  • Employee private HIX choices: 39 percent of employees choose high deductible health plans in vs. 12 percent in 2012; 14 percent chose an HMO vs. 18 percent in 2012; 47 percent of employees chose a PPO, which has decreased from 70 percent in 2012. 32 percent chose a plan with coverage similar to what they already had, while 26 percent chose to increase coverage. (Source: Aon, “Enrollment Results Show Aon Hewitt’s Corporate Health Exchange Empowers Employees to Become More Astute Heath Care Consumers,” March 18, 2013)
  • Saline implants: in 2012, 72 percent of 330,631 breast implant cosmetic surgeries used silicone implants while 28 percent used saline implants. In 2006, 81 percent of 383,886 breast augmentations used saline and 19 percent used silicone. The physician fee varies slightly based on the type of implant $3,900 for silicone versus $3,500 for saline. (Source: The American Society for Aesthetic Plastic Surgery, “Cosmetic Surgery National Statistics 2012,” March 12, 2013)
  • Long term liability in Medicare: the gap separating benefits promised and Medicare’s ability for funding is estimated to be $42.7 trillion. (Source: Wall Street Journal, “Obama’s Not So Grand Offer,” March 7, 2013)
  • Supervisory care: 65.7 million Americans act as unpaid caregivers to a family member, either adult or child with an average 20.4 hour work week. Total cost estimated to be $450 billion nationwide. 42 percent of adults 65+ have limitations to daily living. (Sources: National Alliance for Caregiving in collaboration with AARP, “Caregiving in the US 2009,” November 2009; AARP Public Policy Institute, “Valuing the Invaluable 2011 Update: The Growing Contributions and Costs of Family Caregiving,” July 2011; The Federal Interagency Forum on Aging Related Statistics, “Older Americans 2010 Key Indicators of Well-Being,” July 2010)
  • Employer mandate impact on franchise industry: the penalty placed on certain companies for failure to provide health insurance will cost the franchise industry $6.4 billion and put 3.2 million jobs at risk. (Source: Hudson Institute, “The Effects of the Patient Protection and Affordable Care Act on the Franchise Industry,” September 2011)

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