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Deloitte Center for Health Solutions
November 5, 2012
Monday memo
Health reform update
This week’s headlines: My take
Implementation update - Department of Justice will not contest Supreme Court decision to hear Liberty
University challenge - FTC: success of ACOs, anti-trust oversight focus of agency efforts to cut health costs
Legislative update - HHS issues rules on Medicare, Medicaid physician pay, outpatient payments - Public health emergency declared in New York - GAO: Medicare Part D discount program does not increase drug prices - AHA pursues lawsuit against HHS for denied reimbursements - Legislation introduced to allow veterans to access FEHBP for dental and vision - Massachusetts lawmaker introduces compounding pharmacies regulation - HHS backs flat-rate payment arrangement
State update - State round-up
Industry news - Beaumont-Henry Ford merger - Walmart announces carve out strategy - BMJ: published studies must provide access to scientific documentation
- FDA examines equivalence of generics
- Gene mapping project accelerates personalized medicine opportunities
- Deloitte acquires data analytics firm Recombinant
- Report: significant geographic variation in teaching hospitals
- AHIP releases application for health care spend - Ameridose recalls all products 'out of an abundance of caution'
- GAO: providers self-refer imaging services hurting Medicare
- AHA urges MEDPAC to reconsider “site neutral” physician payments
- Groups urge pricing transparency in health care
Quotable
Fact file
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My take
From Paul Keckley, Executive Director, Deloitte Center for Health Solutions
I had dinner with a European pharmaceutical executive Friday night. The topic: how the
U.S. elections might impact the global market for drugs and devices. I was struck by his
intense interest in knowing how the potential outcome of Tuesday’s races might impact
his company, even though the U.S. is less than 20% of his current revenues.
Sometimes it’s good to step back and see our elective process through the eyes of those
outside our system. In most democracies, the process appears messy, so ours may not
be as unique as we sometimes think. But our elective process matters to the world
because our economy may impact the world more than most, so the consequences of our
elections are high.
Per the polls, Tuesday’s vote will be about the state of our economy. Health care was the
third most important issue in the 2008 election behind the economy and Iraq, and this
year it will likely finish second behind the economy.
Opinions about the Affordable Care Act (ACA) will likely influence the outcome of races
for the White House, 435 seats in the U.S. House of Representatives, 33 seats in the U.S.
Senate and 11 Governor’s races. Polls indicate support for the ACA has eroded
somewhat during the campaign season so the majority of Americans are not convinced
the ACA is the answer to health reform. Then again, the majority also like key elements in
the law but not the law overall, such as having access to insurance regardless of a pre-
existing condition, which impacts 50 to 129 million Americans, and the concept of paying
providers for outcomes and value instead of volume/fee-for-service (FFS) makes sense to
the majority.
Based on what you know or have heard about the health reform law, is it a
good start or a step in the wrong direction?
Source: Deloitte 2012 Survey of Health Care Consumers
Looking past Tuesday’s results, there’s the matter of the law: the ACA. Both candidates
for the White House believe it can be improved. Both see merits in certain elements, and
both see areas where changes are necessary. Though their approaches differ, the reality
is regardless of who’s in the White House, health reforms that reduce costs while
increasing access and improving safety and quality will happen. It’s simple—we can’t
afford the status quo.
In the past decade, while annual median family income has shrunk 0.07% (inflation
adjusted), insurance premiums have increased 104% for employer-sponsored individual
coverage and 114% for family coverage, and national health expenditures increased by
6.5% per year in the same period. Those without health insurance are one in five
households and one in three kids.
So the lame duck session’s 21 days of deliberation starts in two weeks, and the new
Congress will have no choice: fixing health care is necessary to recover our economy. But
it’s more than how we manage Medicare and Medicaid: it’s about how we encourage
innovation and enable its delivery to a global market. It’s about how we reduce costs
associated with unhealthy lifestyles and unhealthy environments. It’s about changing
medical education to equip caregivers with technologies or skills to coach consumers
rather than parent them. It’s about implementing incentives that reward right behaviors,
while eliminating fraud and waste aggressively. And it’s about constructing a coordinated
health system in the world’s strongest economy that leverages modern technologies,
embraces transparency and accountability, and rewards operational efficiencies resulting
in greatly improved value.
In the 113th Congress, 11 committees may revisit health reform and revise or repeal
provisions of the ACA, and the U.S. Department of Health and Human Services (HHS) will
continue to tackle urgent issues like how the exchanges are operated and overseen by
states, how essential health benefits are defined by states, how employers know whether
their shared responsibility meets criteria for affordable coverage, and many others. But in
the long term, there looms a larger question: what’s the right path in the U.S. to transform
our health system, even though most think that it is fundamentally flawed? The
complicating factors are obvious: most do not understand our system and have given little
thought to remedies, and long-term systemic solutions often run afoul of short-term
political and economic realities. No doubt the ACA will play a role, but health system
transformation is much bigger than this law whether one likes it or not.
I am grateful for the national attention health care reform is receiving resulting from the
debate about its passage. I wrote the first Monday Memo on February 9, 2009 when
negotiations about health reform were heating up, and I suspect regardless of Tuesday’s
outcome, the debate will continue because the path to health reform remains bumpy and
uneven.
Lest health care reform be issue one in 2016, starting Wednesday regardless of who is in
office, policymakers and industry leaders have a unique opportunity to level the path
toward a transformed health system. It’s time to pave the path. It can’t wait. And it matters
too much.
PS – Join us this Friday, November 9, for a national Dbrief: After the Presidential
Election: The Health Care Industry Response to discuss the election results and what they mean to health care industry stakeholders. To register click here.
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Implementation update
Department of Justice will not contest Supreme Court decision to hear
Liberty University challenge The U.S. Department of Justice (DOJ) issued a response to the U.S. Supreme Court’s
request for comment on whether the Court should hear Liberty University’s challenge to
the ACA. Liberty University asserts the individual and employer mandates violate religious
freedom, making the ACA unconstitutional. The DOJ will not contest a decision by the
Court to review the case, but believes Liberty’s claim lacks merit.
Background: in November 2010 the Fourth Circuit District Court dismissed Liberty
University’s case challenging the constitutionality of the individual mandate that requires
individuals to purchase health insurance. In January 2011, the Fourth Circuit Court of
Appeals vacated the district court ruling and dismissed the case stating that the individual
mandate penalty was effectively a tax, therefore the Anti-Injunction Act (AIA) prohibits
lawsuits seeking to block collection of a tax prior to its effective date of January 2014. The
Supreme Court later ruled in June 2012 that the AIA does not apply to the mandate.
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FTC: success of ACOs, anti-trust oversight focus of agency efforts to cut
health costs Friday, the Federal Trade Commission (FTC) Chairman Jon Leibowitz told media his
agency was focused on three areas to achieve lower health costs: (1) increased oversight
of anti-competitive hospital mergers, (2) implementation of the pay-for-delay patent
settlement agreement between brand and generic drug makers that keep generics off the
market, and (3) increased flexibility in oversight of accountable care organizations (ACO).
“Health care is 18% of [gross domestic product] (GDP) in the United States. That is
unsustainable and unacceptable. So whatever we can do to reduce that cost we will,”
Leibowitz said. Data from ACOs in coming years should settle whether they are anti-
competitive or not. If they lower costs, expect to see them expand. If they end up raising
costs that will be more problematic.”
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Legislative update
HHS issues rules on Medicare, Medicaid physician pay, outpatient
payments Thursday, HHS released three final rules impacting provider payments in 2013:
Medicaid payments for doctors: requires Medicaid to reimburse primary care
providers at the same rate as Medicare beginning in calendar year (CY) 2013
through CY2014. The rate adjustment applies to physicians with a specialty
designation of family medicine, general internal medicine, or pediatric medicine.
The rule also includes a new policy to pay a physician or practitioner to coordinate
a patient's care in the 30 days following a hospital or nursing facility stay, and
changes to two quality reporting programs—the physician quality reporting
system and the electronic prescribing incentive program.
Note: the rule specifically covers only the difference between the Medicare rate
and states' Medicaid rates as of July 1, 2009.
Medicare payments to hospital outpatient and ambulatory surgical center services
care: Payments to 4,000 outpatient hospital facilities under the outpatient
prospective payment system would increase 1.8%—to $48.1 billion—in CY2013
and payments to ambulatory surgical centers will increase by 0.6% with projected
total payments totaling approximately $4.07 billion.
Medicare payments to home health agencies: payments for home health care
services will decrease by 0.01%—$10 million—in CY2013.
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Public health emergency declared in New York Friday, Secretary of HHS Kathleen Sebelius declared a public health emergency under
Section 319 of the Public Health Service Act for the state of New York following Hurricane
Sandy. Per Section 1135 of the Social Security Act, HHS can temporarily waive or modify
certain procedural requirements under Medicare, Medicaid, and CHIP to ensure that
providers are reimbursed for services provided to individuals under extenuating
circumstances, such as environmental disasters when health care facilities are
compromised.
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GAO: Medicare Part D discount program does not increase drug prices The U.S. Government Accountability Office (GAO) released its report on the Center for
Medicare & Medicaid Services’ (CMS) oversight of the Medicare Part D Drug Discount
Program and its impact on the pricing of brand name drugs concluding that the program
has had no impact on the relationship between brand name drug pricing for beneficiaries
in the coverage gap or those below the coverage gap threshold. After the program was
implemented in 2011, the median drug price increased by 13% for both groups of
beneficiaries. Prior to program implementation, the median drug price increased by 36%
for those in the coverage gap and 35% for those below the coverage gap threshold
between 2007 and 2010.
Background: per Section 3301, ACA drug manufacturers participating in the Medicare
Part D program are required to provide beneficiaries a 50% discount on the plan
negotiated price for brand-name drugs at the point-of-sale when they reach the coverage
gap or “donut hole.” Beginning in 2013, Medicare will pay 2.5% of the plan-negotiated
price for brand-name drugs. Medicare will increase its subsidy to 25% for brand-name
drugs by 2020, while manufacturers will continue to pay the 50% discount through 2020.
GAO conducted this report at the request of Republican leaders of the House Committee
on Finance, Committee on Energy and Commerce, and Committee on Ways and Means
who raised concerns that drug manufacturers would increase prices for brand-name drugs
used by beneficiaries who are in the coverage gap more rapidly than for other drugs to
offset the required 50% discount.
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AHA pursues lawsuit against HHS for denied reimbursements Thursday, the American Hospital Association (AHA) and four other hospital systems filed
suit against HHS for denying payment based on Recovery Audit Contractors’ (RAC)
decisions to deny reimbursements on the grounds that the services provided by the
hospital, while reasonable and necessary, could have been provided more cost-effectively
in other settings (i.e., outpatient). The hospital plaintiffs argue that denying reimbursement
based on appropriate setting of care is unreasonable because RACs are not taking into
consideration the variables that may require a patient to be treated in a hospital setting vs.
an outpatient setting (i.e., high-risk patients).
Background: the RAC program is designed to identify and remediate billing errors. The
program was authorized in 2003 as a part of the Medicare Modernization Act of 2003,
officially established by the Tax Relief and Health Care Act of 2006, and expanded to
Medicaid per Section 6411 of the ACA.
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Legislation introduced to allow veterans to access FEHBP for dental and
vision Representative Marcia Fudge (D-OH) introduced legislation to allow veterans who receive
health care from the Department of Veterans Affairs (VA) to be eligible for supplemental
dental and vision insurance under the Federal Employees Health Benefits Program
(FEHBP) that provides dental and vision benefits through the Federal Employees Dental
and Vision Insurance Program. Currently, audiology and eye care services including
preventive services and routine vision testing is provided to all enrolled veterans and
those exempt from enrollment. VA also provides all necessary dental care to those eligible
under Class I, IIC, or IV while Classes II, IIA, III, V, VI, and IIB are subject to time and/or
service limitations.
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Massachusetts lawmaker introduces compounding pharmacies regulation Friday, Representative Ed Markey (D-MA) introduced the “Verifying Authority and Legality
in Drug Compounding Act of 2012” to include compounded pharmaceuticals in the U.S.
Food and Drug Administration (FDA) Federal Food, Drug, and Cosmetic Act. According to
the bill, states would maintain regulatory authority over compounding pharmacies filling
prescriptions for individual patients, but would allow FDA to provide waivers to large scale
compounding operations to address a drug shortage or public health crisis. Compounding
pharmacies that produce large quantities as manufacturers, distribute across state line, or
receive waivers will be subject to FDA regulations and inspection. Absent a waiver from
FDA, pharmacies would be prohibited from producing drugs that are already commercially
available. The legislation would also require all compounded drug products be labeled as
not tested or approved by the FDA, and include information on how consumers can report
adverse reactions.
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HHS backs flat-rate payment arrangement The HHS Office of Inspector General (OIG) issued an advisory opinion on a hospital
emergency department per diem “flat-rate” physician payment model on Thursday,
concluding that it is acceptable as long as there is no intent to induce or reward physician
referrals of federal health care program business. According to OIG, on-call coverage
compensation creates potential risk that physicians may demand such compensation as a
condition of doing business at a hospital, and could be misused to entice physicians to
join or remain on the hospital’s staff or to generate additional business for the hospital.
OIG provided the analysis at the request of a charitable, non-profit hospital that pays a per
diem fee to specialist physicians for unrestricted on-call coverage for the emergency
department. The report highlighted several aspects of the hospital’s payment arrangement
that prevented anti-kickback violations including:
Commercially reasonable payment amounts, within the range of fair market value
for actual and necessary services provided without regard to referrals or other
business generated between the physician and hospital
No intent to compensate the physicians for all care they provide to patients
Uniform method of scheduling on-call coverage within each specialty, and
equitable policy that is not used to selectively reward the highest referrers
Hospital absorbs all costs and none accrue to federal health care programs
Background: per Section 1128 of the Social Security Act (the federal anti-kickback statute)
it is a criminal offense to knowingly and willfully offer, pay, solicit, or receive anything of
value, directly or indirectly, to induce or reward referrals of items or services reimbursable
by a federal health care program (i.e. Medicaid and Medicare). Violation of the statute
constitutes a felony punishable by a maximum fine of $25,000, imprisonment up to five
years, or both.
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State update
State round-up Washington received approval from CMS last week for a dual eligible, fee-for-
service medical home pilot program. HealthPathWashington will enroll 115,000
individual dual eligibles in medical homes that pay providers on a fee-for-service
basis that include bonuses for quality and cost management goals. The state
expects to save approximately $14 million over five years.
Note: Massachusetts is the only other state to receive CMS pilot approval. It will
use a capitated model to manage its dual eligibles program. Of the 26 proposals
submitted to CMS, 18 states proposed using the capitated model, five states
proposed the fee-for-service model, and three states proposed using a blend of
both.
Texas officials are awaiting the outcome of several lawsuits to decide whether the
Women’s Health Program can continue to receive federal funding if the state
excludes Planned Parenthood from the program because of its provision of abortion
services. Until a decision is made, Planned Parenthood will remain in the program.
Governor Rick Perry (R) has committed to managing the program entirely through
the use of state funds if necessary.
Despite a CMS decision to delay a bundled payment pilot program because of too few participants, New Jersey hospitals want to continue the project. The program
incentivizes hospitals and physicians to lower costs by improving inpatient
coordinated care. Support within the state stems from New Jersey hospitals that
have had success with an almost identical program. CMS has yet to decide if the
state’s hospitals can continue with the pilot.
In a letter to HHS, Governor Pat Quinn (D) declared that Illinois will participate in a
State Partnership Exchange with the federal government on the implementation and
operation of a health insurance exchange (HIX). State officials intend to control the
plan management and consumer assistance aspects of the exchange, and
administration of a reinsurance program would fall to the federal government. Quinn
expressed a commitment to operating an independent state-based exchange in
2015.
Note: states must declare what type of HIX they will be operating in their state in
2014 by November 16th, 2012.
According to the New Mexico HIX Advisory Task Force last week, the state has
spent only a fraction of its $34.2 million Level One Establishment Grant awarded to
assist in the creation of a HIX. State officials met with HHS to discuss progress to
date and remaining deliverables.
Note: Level One Establishment Grants are awarded for up to one year of funding to
states that have made some development under their exchange planning grant.
In a progress letter to Nebraska officials, CMS and the Center for Consumer
Information and Insurance Oversight (CCIIO) commended the state on its
operational progress to date on establishing a HIX. The letter also noted areas in
which the state needs improvement, including the state’s delay in choosing a
vendor to operate the information technology aspects of its HIX.
Cook County Illinois received approval last week of a Medicaid Section 1115
waiver to enroll 114,000 low-income residents of the county in the Medicaid
program before the Medicaid expansion in 2014. Although the county will also begin
paying its portion of the cost earlier than 2014, the waiver will save the state more
than $100 million per year for services that it has traditionally provided through
uncompensated charity care.
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Industry news
Beaumont-Henry Ford merger Last week, leaders of the Beaumont Health System in Royal Oak, Michigan and the Henry
Ford Health System in Detroit announced plans to pursue a combination pending
completion of due diligence in the next 120 day period. The combined entity will have ten
hospitals, 38,000 employees and $6.4 billion in revenue including the Henry Ford health
plan’s premiums for 648,000 members.
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Walmart announces carve out strategy Walmart will contract for coronary bypass grafts, heart valve replacements, and other
complex cardiac surgeries. Procedures will be covered for Walmart employees at the
Cleveland Clinic in Cleveland, Ohio; the Geisinger Medical Center in Danville,
Pennsylvania; Mayo Clinic sites in Minnesota, Arizona and Florida; Scott & White
Memorial Hospital in Temple, Texas; and the Virginia Mason Medical Center in Seattle,
Washington. For spine surgeries including lumbar and cervical spinal fusion, it will
contract with Scott & White Memorial Hospital and Virginia Mason Medical Center. The
program is scheduled to begin in January 2013.
Note: Cleveland Clinic has a similar direct contract with Lowe’s for cardiac surgery.
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BMJ: published studies must provide access to scientific documentation The venerable British Medical Journal (BMJ) announced Wednesday it would require
authors to provide patient-level clinical trial data to BMJ as a pre-condition for publication.
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FDA examines equivalence of generics The FDA is looking at its generic oversight policies resulting from examination of the
bupropion, a generic version of a branded anti-depressant. It found the time release
feature of the drug varied from the branded equivalent, though the active ingredient was
the same. Complications from the generic drug prompted the FDA to consider how it
should oversee the 120 time-release drugs sold in the U.S. in 2011.
Note: time-release drugs are attractive to consumers because they can take the drugs
less frequently. Manufacturers like time-release drugs because they are provided patent
protection for the drug itself as well as the formula for time release.
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Gene mapping project accelerates personalized medicine opportunities Wednesday, the $120 million 1000 Genome Project announced it had successfully
sequenced the entire DNA of 1000 people in 14 populations spanning Asia, Europe,
Africa, and the Americas. The 700 participating scientists identified 38 million variations of
the average person’s 23,000 genes. The collaboration across multiple nationalities and
the structuring of the data as a toolkit for global researchers is thought to enhance
personalized medicine exploration.
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Deloitte acquires data analytics firm Recombinant Last Monday, Deloitte Consulting LLP announced the acquisition of Recombinant Data
Corporation, a data warehousing and clinical intelligence solutions firm for health care
organizations and academic medical centers. Now known as “Recombinant by Deloitte,”
the data analytics firm has seen growth in the health provider, medical research, life
sciences and government health markets providing tools in enterprise data integration,
population health analytics, clinical genome data assimilation and performance
management for accountable care organizations.
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Report: significant geographic variation in teaching hospitals The Dartmouth Institute for Health Policy and Clinical Practice’s analysis of 2010
Medicare data revealed significant regional variation of end-of-life care for chronically ill
beneficiaries treated in academic medical centers. The report also found that in areas with
more hospital beds and more doctors per capita, patients have longer hospital stays and
receive many more physician visits. According to the report, these trends suggest that
patients are receiving care, and resident physicians are receiving training based more on
local health resource supply and practice style than on evidence-based medicine.
Resource utilization for beneficiaries in the last six months of life varied significantly
between academic medical centers:
Hospital days per beneficiary: 8.9 days to 20.2 days
Physician visits per beneficiary: 19.7 visits to 72.6 visits
Percent of beneficiaries seeing ten or more physicians: 42.5% to 66%
Percent of beneficiaries enrolled in hospice: 24.5% to 59.1%
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AHIP releases application for health care spending Last week, America's Health Insurance Plans (AHIP) announced the launch of a new
interactive application for iPad that highlights key drivers of health care spending.
According to the press release, health stakeholders and policy makers will be able to
access interactive charts using 50 years of comprehensive health spending data from the
CBO, CMS, and the Office of Management and Budget on the new “U.S. Health Care
Spending 101” application.
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Ameridose recalls all products 'out of an abundance of caution' Thursday, the FDA announced that Ameridose LLC, a company sharing common
management with the New England Compounding Center (NECC) linked to the recent
fungal meningitis outbreak, has voluntarily recalled all of its unexpired products currently
on the market. A current FDA inspection of the company’s facility has raised concerns
about a lack of sterility assurance for products it produced and distributed. To date, no
reports of patients with infections associated with Ameridose’s products have been
reported, and FDA is recommending that health care providers do not need to follow-up
with patients who received the products.
Related: state health officials also requested that Sophia Pasedis, vice president of
regulatory affairs and compliance at Ameridose in Westborough, resign from the
Massachusetts Board of Registration in Pharmacy. As former president of the Board,
there is concern that she may have had influence regarding disciplinary actions for
NECC’s past violations. According to officials, board meeting minutes have provided no
definitive proof that she recused herself from cases involving both companies.
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GAO: providers self-refer imaging services hurting Medicare A GAO report based on analysis of Medicare 2010 data revealed that providers who self-
referred made 67% more referrals (400,000 tests) for magnetic resonance imaging (MRI) /
computed tomography (CT) than those that did not self-refer, costing Medicare $109
million. GAO recommended that CMS insert a self-referral flag on its Medicare Part B
claims form and require providers to indicate whether the advanced imaging services are
self-referred or not, implement a payment reduction for self-referred advanced imaging
services when the same provider refers and performs a service, and develop an approach
to ensure the appropriateness of advanced imaging services referred by self-referring
providers.
Background: self-referral occurs when providers refer their patients to entities—such as
themselves or a group practice—with which they or an immediate family member has a
financial relationship. In 2010, Medicare FFS beneficiaries received 30 million advanced
imaging services. The total expenditures for all advanced imaging services billed under
Medicare reached $4.2 billion in 2010.
Reaction: “Qualified physicians regardless of their specialties should be able to provide
appropriate imaging services to their patients. Efforts to limit physicians would threaten
patient access to health care providers and technologies while obstructing coordinated
care models that have been proven to lower costs and improve care. As an alternative to
picking winners and losers among providers, policymakers should incentivize the use of
physician-developed appropriateness criteria to inform decisions between patients and
their doctors.”—The Medical Imaging & Technology Alliance, Executive Director, Gail
Rodriguez, October 2012
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AHA urges MEDPAC to reconsider “site neutral” physician payments Last week, the AHA wrote a letter to Medicare Payment Advisory Commission (MedPAC)
chairman Glenn Hackbarth expressing concern about its recommendation to expand the
use of the “site neutral” payment policy to hospital outpatient departments (HOPD). The
expansion of this payment model in conjunction with MedPAC’s recommendation to
reduce payment for certain evaluation and management services will result in a $2 billion
loss to HOPD’s next year, according to AHA.
Background: Medicare payments are higher for most services if they are provided in a
HOPD or provider-based entity than if they are provided in a freestanding physician
practice or professional office. At the October 4, 2012 MedPAC meeting, the commission
evaluated making Medicare payment rates for evaluation and management office visits
equal whether they are provided in HOPDs or freestanding practices.
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Groups urge pricing transparency in health care Catalyst for Payment Reform (CPR) released an issue brief and joint statement along with
American Association of Retired Persons, the National Business Coalition on Health,
Pacific Business Group on Health, The Leapfrog Group, and the Corporate Health Care
Coalition calling for health insurers and health care providers to make price information
more transparent for their employees and consumers. According to the statement, efforts
by some health plans and independent vendors to provide consumer-friendly health care
price tools are limited since hospital, physicians and some health plans restrict access to
price data. CPR maintains that purchasers and consumers need price transparency to
help purchasers contain health care costs, inform consumers’ health care decisions as
they assume greater financial responsibility, and to reduce unknown and unwarranted
price variation in the health care system.
Background: CPR is an independent non-profit organization of larger employer health
care purchasers, including: 3M, Intel Corporation, Dow Chemical Company, Xerox
Corporation, Verizon, Walmart Stores, and General Electric.
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Quotable “We will implement the law [ACA] and work together to improve where we can. But our
country simply can’t afford to fight old political battles, reopen old wounds, and return to
the way things were. We are a nation that does what is hard and what is necessary and
what is right. And we will be better off 5, 10, 20 years from now because we had the courage and foresight to keep moving forward.” President Barack Obama, New England
Journal of Medicine, 367:15 October 11, 2012
“I believe the answer lies with patients and families, with reformed insurance markets and
fair competition, with strong consumer protections and real entitlement reform. My plan
tackles our health care challenges without a federal takeover of the entire system.
Instead, it relies on markets over regulations, doctors and patients over bureaucrats and
tailored state programs over a 2,700 page solution from Washington.” Mitt Romney, New
England Journal of Medicine, 367:15 October 11, 2012
“Investment in medical start-ups has dwindled of late as companies have struggled to go
public and deliver returns to venture capitalists. The Affordable Care Act, the health care
reform bill signed into law in 2010, would seem to be the salve these companies need.
Starting in 2014, most Americans will have to carry health insurance or pay a penalty.
This promises to create millions of new, paying customers for medical companies.” Brian
Gormley, Emily Maltby “Medical Start-ups Challenged by Health Care Reform, Wall Street
Journal, October 31, 2012
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Fact file Jobs: startups are 3% of U.S. employment but 20% of gross job creation. (Source:
Michael Porter, “What business should do to restore competitiveness ” Fortune,
October 15, 2012)
Healthy cities: 15 states or localities have adopted restrictions on unhealthy food
servings; for every 2% increase in calories from trans fat consumed, there’s a 23%
increase in risk of heart disease. If trans fats are taken out of food supply, 6-19% of heart attacks could be prevented, and 200,000 lives saved. (Source: David Agnus,
Fortune, “A doctor’s plea to politicians,” October 17, 2012)
Fungal meningitis compounding pharmacy update: as of Friday, November 2,
404 cases and 29 deaths. (Source: CDC, “Multistate Fungal Meningitis Outbreak
Investigation”, November 2, 2012)
Deficit: for FY2012: $1,089 trillion or 7% of GDP; total government debt
outstanding: $16.07 trillion or 103% of GDP (Source: David Wessel, The Wall
Street Journal, “Making Sense of Budget Lingo,” November 3, 2012)
Registered lobbyists: 11,700 in 2012, which is the lowest number since 2007
when there were 14,800. (Source: Damian Paletta, The Wall Street Journal,
“Romney Would Limit Lobbyist Roles,” November 1, 2012)
Presidential polling on health care issues: NPR—47% trust Romney to handle
health care issues; 48% trust Obama. PEW research poll—candidate that best
represents women’s views on abortion: Obama 48% vs. Romney at 39%. Respondents place Obama ahead of Romney on Medicare: 48% vs. 43%. (Source:
National Public Radio, “Post-Debate National Survey of Likely Voters,” October 23-
25, 2012 and Pew Research Center for People & the Press, “Registered Voters,”
October 24-28, 2012)
Avoidable deaths: deaths per 100,000 that could have been avoided for U.S.
adults under 74: 106.9 for men and 84.5 for women; 20% higher than the UK and
Germany, and 30% higher than France (Source: Ellen Nolte and Martin McKee, “In
Amenable Mortality—Deaths Avoidable Through Health Care—Progress In The US
Lags That Of Three European Countries.” Health Affairs, September 2012)
High risk pool participation (Section 1101 of the ACA): increased from 82,000
in July 2012 to 86,072 in August 2012. (Source: HHS, “State by State Enrollment in
the Pre-Existing Condition Insurance Plan, as of August 31, 2012)
Private equity investment in health care: from 2010 to 2011, the amount of
investment capital in health care doubled from $15 billion to $30 billion (Source:
Kara Murphy and Tim van Biesen, “Global Healthcare Private Equity Report, Bain
and Company, 2012)
Patient expectations of cancer treatment: 69% of patients with lung cancer and
81% of patients with colorectal cancer did not report understanding that
chemotherapy was not at all likely to cure their cancer. The risk of reporting
inaccurate beliefs about chemotherapy was higher among patients who rated their
communication with their physician very favorably compared with those who rated
communication less favorably. (Source: Weeks et al., New England Journal of
Medicine, “Patients' Expectations about Effects of Chemotherapy for Advanced
Cancer,” October 2012)
Employee benefits costs: in 2011, workers’ benefits were 19.7% of total
compensation vs. 16.6% in 2000; benefits increased 10.8% from 2007-2011, or
$1,302 per worker while wages increased 1.4% of $777 in the same period (Source: USA Today analysis using U.S. Department of Commerce, Bureau of
Economic Analysis data, 2012)
Health care prices: health care prices in August 2012 were 2.4% higher than in
August 2011, the highest year-over-year reading since September 2010.
Prescription drugs had the most rapid year-over-year price growth at 4%, and
hospital prices accelerated to 3.6% since August 2011. (Source: Altarum Institute,
“Insights from Monthly Price Indices through August 2012,” October 11, 2012)
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Deloitte Center for Health Solutions research To learn more about recent Deloitte thought leadership, please visit Deloitte University
Press (www.DUPress.com)
Coming soon: 2012 Survey of U.S. Health Care Consumers – INFOBrief series and Five-year report
Currently available: Understanding the SGR: Analyzing the “Doc Fix”—October 29th, 2012. Available
online at www.deloitte.com/us/2012sustainablegrowth
Impact of Health Care Reform on Insurance Coverage: Projection Scenarios Over
10 Years – Update 2012—October 2012. Available online at www.deloitte.com/us/2012coveragemodel
State Medicaid Program Management: Update and considerations—September 2012.
Available online at www.deloitte.com/us/2012statemedicaid
Meeting the Challenge: Maximizing the value of employer-sponsored health care—
August 2012. Available online at www.deloitte.com/us/meetingthechallenge
2012 Deloitte Survey of U.S. Employers: Opinions about the U.S. health care system
and plans for employee health benefits—July 2012. Available online at
www.deloitte.com/us/2012employersurvey
Deloitte 2012 Survey of U.S. Health Care Consumers: The performance of the health
care system and health care reform—June 2012. Available online at
www.deloitte.com/us/2012consumerism
Health Care Reform: Center Stage 2012 Perspectives from consumers, physicians
and employers—June 2012. Available online at
www.deloitte.com/us/healthcarecenterstage2012
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Upcoming life sciences and health care Dbrief webcasts Anticipating tomorrow's complex issues and new strategies is a challenge. Stay fresh with Dbriefs – live webcasts that give you valuable insights on important developments
affecting your business.
November 9, 2:00 PM ET: After the Presidential Election: The Health Care Industry
Response
November 13: 1:00 PM ET: Market Forces at Work: Life Sciences Implications of
Changes in Health Care Delivery, Access, and Coverage
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Deloitte contacts
Paul H. Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions
Jessica Blume, U.S. Public Sector National Industry Leader, Deloitte LLP
Bill Copeland, U.S. Life Sciences and Health Care National Industry Leader, Deloitte LLP
Jason Girzadas, National Managing Director, Life Sciences & Health Care, Deloitte
Consulting LLP ([email protected])
Harry Greenspun, M.D., Senior Advisor, Health Care Transformation and Technology,
Deloitte Center for Health Solutions ([email protected])
Mitch Morris, M.D., National Leader, Health Information Technology, Deloitte Consulting
LLP ([email protected])
George Serafin, Managing Director, Health Sciences Governance Regulatory & Risk
Strategies, Deloitte & Touche LLP ([email protected])
Rick Wald, Director, Human Capital, Deloitte Consulting LLP ([email protected])
To receive email alerts when new research is published by the Deloitte Center for Health
Solutions, please register at www.deloitte.com/centerforhealthsolutions/subscribe.
To access Center research online, please visit www.deloitte.com/centerforhealthsolutions.
To arrange a briefing for your team, contact Jennifer Bohn ([email protected]).
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