Archive for December 18, 2012

Virginia Passes on State-Run HIX

Virginia Gov. Bob McDonnell announced on Dec. 14 that the commonwealth would join 24 other states defaulting to a federally run Health Insurance Exchange (HIX), citing that the Obama administration did not provide Virginia with the information needed to make important financial decisions.

“Originally, I asked that we begin the planning process to potentially operate a state-based exchange for Virginia, primarily so we would be in control of this process. However, despite repeated requests for information, we have not had any clear direction or answers from Washington until recent days, and we cannot conclude, as we review those materials, that we would have the control and flexibility needed to efficiently and effectively run our own state exchange,” McDonnell said in a news release.

In some states, like Washington, plans to build a state-based exchange began as soon as the Affordable Care Act passed. But officials in several states, including Maine, announced they would take no part in the program. Maine Gov. Paul LePage returned a $5.8 million federal grant to be used for a partnership exchange.

As of Dec. 14, the deadline for states to submit blueprints for state-based exchanges, 18 states and the District of Columbia have declared state-based exchanges, seven states are planning for a state/federal partnership, and 25 states defaulted to a federal exchange, according to the Henry J. Kaiser Family Foundation.

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Surcharges to Pay for Health Insurance Exchanges

With less than two weeks left for states to announce their plans for implementing Health Insurance Exchanges (HIX), how to pay for them has become a focus of the discussion. Several Republican governors have cited high costs as a deterrent for establishing state-run exchanges, opting instead to utilize federally-run exchanges. Officials in California, however, say their state-run exchange, the country’s largest, won’t cost taxpayers anything, according to a report in MedCity News.

California’s HIX will be financed by surcharges on the billions of dollars of insurance packages sold through the exchange. The surcharges are expected to range from two to four percent. “When California formed its exchange, we said it will not now or ever be a burden on taxpayers,” Peter Lee, executive director of the California Health Benefit Exchange told MedCity News.

Federally-run exchanges, which will be established in states that decide not to set up their own exchanges, will also be paid for with surcharges on insurance purchases, capped at 3.5 percent. To encourage states to run their own exchanges, the Obama administration has awarded more than $2 billion in start-up funding and extended plan submission deadlines more than once.

States estimate annual operating costs ranging from $15 million in small states to $300 million in California. Despite initial federal assistance, all funding for exchanges must be covered by states by 2015. A key component of the Affordable Health Care Act, Health Insurance Exchanges continue to be a divisive issue at the state level.

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Health Insurance Exchanges Are the Future

Over the past two years, many Republican governors held off taking steps to create a health insurance exchange (HIX) in the hopes that Mitt Romney would win the 2012 presidential election and repeal the Affordable Care Act.

And now, some states, particularly those run by Republican governors, are faced with less time to make a big decision — though the federal government did extend the deadline for states to decide whether to establish and operate their own HIXs.

States have three options for an exchange, as dictated by the Affordable Care Act:

States can run their own exchanges, with 100 percent funding from the federal government (though states will likely face costs in updating legacy systems to integrate with the exchange system);An exchange that is state-federal partnership can be established; orStates that choose not to participate in the development of an exchange will have an exchange established and run for them by the federal government.

And it seems the third option may be what will happen in several red states.

Some governors, like Maine Gov. Paul LePage, have completely checked out of the HIX discussion, refusing to participate in any way. “I’m not lifting a finger,” LePage told Bloomberg. LePage returned a $5.8 million federal grant that would have helped his state pay for setting up a partnership exchange.

Other Republican governors that have firmly opposed participation in the program include Florida’s Rick Scott, Louisiana’s Bobby Jindal, Kansas’ Sam Brownback, Texas’ Rick Perry, South Carolina’s Nikki Haley, Georgia’s Nathan Deal, Virginia’s Robert McDonnell, Alabama’s Robert Bentley, Nebraska’s Dave Heineman and Alaska’s Sean Parnell.

While some say that not participating in establishing and operating a HIX will rob states of the opportunity to negotiate the best rates with insurers, some Republicans have argued that they are not prepared to foot a large bill for a program they do not necessarily support. Now faced with the reality of four more years of an Obama administration, other Republican governors are working with the federal government’s deadline extensions to run their own exchange.

Enrollment in health-care plans is scheduled to begin in October 2013, as all Americans are required to be enrolled in a health-care plan by Jan. 1, 2014. But with some Republican leaders dragging their feet and the federal government seemingly willing to offer states flexibility, that timeline could change.

The deadline for states was extended in response to direct requests from some states that wanted more time, according to a spokesperson from the Centers for Medicare and Medicaid. “Our preference is for each state to establish its own exchange because a state-based exchange (SBE) provides states with the most amount of flexibility,” a spokesperson said via email. “There is no one-size-fits-all approach, and an SBE allows a state to structure its exchange in its own way that works for its citizens. For example, a state with its own exchange will be able to make needed changes to enrollment and eligibility, determine how to select plans to participate and how to subsequently manage those plans directly, and how best to educate consumers about the exchange.”

The deadline extensions are a further demonstration of the federal government’s intent to allow states to participate in not only the final rules of their exchanges, but also to be active participants in the whole process, said Gartner Research Director Rick Howard. While the practical effect of the deadline extension may not be to persuade stout opponents of the program to participate, it’s a “good-faith effort” by the federal government to encourage participation, he said.

Florida, Ohio and Missouri seem to be reconsidering some level of involvement in running their own program, Howard said, and Arizona, Utah and Pennsylvania may also find a way to meet the new deadlines. “I think that those governors who have resisted the exchange are doing so on the idea that they’ve seen some price tags that seem to be pretty expensive,” Howard said, adding that Republican governors may just be managing risk conservatively, and many of those now opposed to state-based exchanges may adopt an exchange once real-world models have been developed and demonstrated by other states.

Ultimately, Howard said, exchanges are the future, no matter who is in the White House. “You can wish away the Affordable Care Act, but that’s not going to change the underlying dynamics of the marketplace,” he said. “We’re seeing through merger and acquisitions activities that that’s being borne out. Health plans are looking to survive in a much more consumer-oriented marketplace that they just haven’t had to face before.”

Commercial health care was already headed toward a side-by-side comparison model because the advancement of technology has led consumers to expect more options while shopping, he said, and the Obama administration is trying to bring government up to speed with the marketplace.

Image from Shutterstock

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FDA, Industry Form Nonprofit for Medical Devices

The FDA announced on Dec. 3 a new nonprofit corporation to promote medical device regulatory science. The new corporation is called the Medical Device Innovation Consortium (MDIC) and is a public-private partnership between the FDA and Minnesota-based LifeScience Alley. MDIC is intended to help facilitate faster development, assessment and review of new medical devices.

“MDIC will prioritize the regulatory science needs of the medical device community and fund projects to help simplify the process of medical device design and pathway to market for these innovations,” an FDA press release states. “The MDIC will bolster the country’s investment in regulatory science research by pooling people, funding, resources, and ideas to develop new tools, models, and methods that may be utilized to better and more efficiently evaluate new devices.”

The partnership between the FDA and LifeScience Alley was first announced in Aug. 2011. According to MedCity News, MDIC is charged with streamling the regulatory process so that patients can benefit more quickly from the latest medical device technologies. 

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Big Data Takes on Chronic Disease

Accolades are nothing new for Louisville, Ky., the largest city in the state. Perhaps best known for hosting the Kentucky Derby, Louisville consistently shows up in surveys as one of America’s most livable cities. Zagat and others call it a top getaway destination. The Center for Digital Government, the research arm of Government Technology’s parent company, e.Republic, recently recognized Louisville’s digital prowess with a first place 2012 Best of the Web award.

But Louisville Chief of Economic Growth and Innovation Ted Smith is working to remove the city’s name from a more dubious list not often mentioned by city boosters — one of the nation’s 10 worst cities for air quality. Air quality monitoring and a public notification system aim to inform citizens when the air is particularly impacted and likely to trigger symptoms for those with respiratory challenges.

“When I moved back to Louisville, one of the signs that greeted us as we crossed into the city essentially said, ‘Welcome to Louisville. Don’t go outside,’” Smith said.

Louisville residents and government discuss how asthmapolis is making a difference in the city.

Originally appointed by Mayor Greg Fischer in 2011, Smith brings a wealth of federal government and private-sector experience, as well as academic credentials in neuroscience. At the U.S. Department of Health and Human Services, he fostered innovative health IT projects and partnerships between government and the private sector.

Smith had his work cut out for him in Louisville. With high levels of particulates, ozone and allergens spanning the city’s 450 square miles, Louisville also reports a high percentage of residents who suffer from asthma. And those numbers, like asthma rates across the country, are on the rise.

A chronic disease that follows sufferers throughout their lives, asthma brings respiratory symptoms like shortness of breath, coughing, wheezing and chest tightness, which can limit daily activities, and therefore quality of life. Most symptoms can be controlled by limiting exposure to both allergy-related and environmental triggers, and proper administration of prescription medications.

Ted Smith, Chief of Economic Growth and Innovation, Louisville

According to the Centers for Disease Control and Prevention, asthma treatment accounts for $56 billion in annual U.S. health-care costs, ranking it among the country’s most expensive diseases. But public health analysis to date, Smith explained, usually takes a broad view, rarely delving into analysis more granular than the county level.

Advocates for more specific health data collection argue that more data about the disease at the neighborhood or even block level can lead to more effective treatment.

“Maybe if we had a hot spot mentality,” Smith said, “we could actually start to better understand the extent of the situation at its worst, and what tools might be available in those circumstances.”

Louisville officials began talking to Madison, Wis.-based Asthmapolis, developer of a sensor that attaches to asthma inhalers, tracking data on precisely when and where individual asthma sufferers are administering their medication.

Asthma sufferers using the sensors can better establish how well controlled their asthma is, and work with their doctors to adjust their treatment plans to achieve better control. Asthmapolis boasts some impressive results in clinical trials to date, reporting decreases of 50 percent in uncontrolled asthma. A full 70 percent of sensor users improved their reported level of asthma control. Connected via Bluetooth technology to a user’s smartphone, the Asthmapolis sensor wirelessly transmits data, helping patients and their doctors track medications accurately and in real time. Patients are encouraged to supplement the automatically generated time and location data with information on symptoms they experienced and triggers that led them to take their medication.

“Just by identifying the time and frequency with which they use their rescue inhaler, we’re able to give them feedback about how well controlled their asthma is right now,” explained Tyler Heslinga, program manager at Asthmapolis.

The system generates tips to help asthmatics avoid triggers and work toward enhanced control of the disease. A new feature lets users set up a schedule for their medications and get reminders when a dose is due.

A pilot project is under way in Louisville, which is getting Asthmapolis sensors into the hands of asthmatics in order to generate some communitywide data that could help better manage the disease.

Private philanthropists and health-oriented foundations, including the Foundation for a Healthy Kentucky and the Norton Healthcare Foundation, are funding the $150,000 effort, which will implement 600 sensors in Louisville.

So far, Louisville has distributed about half of its sensors, through area Walgreens stores, as well as targeted community outreach. Officials also report widespread support from the medical community. Smith hopes that once data starts coming in from initial users, another couple thousand units can be funded.

And the city wants to make sure it maximizes the benefits it sees from the effort. In July, a team of data scientists from IBM went to Louisville — a beneficiary of the company’s 2012 Smarter Cities Challenge — to help the city consider as many ways to use the data as possible.

What exactly will materialize as a result of the data that’s collected remains to be seen. Smith is committed to exploring alternatives for reducing the impacts of asthma in the Louisville area, believing that the data collected by the sensors will help build community support.

The effort has started to generate some preliminary data, identifying some hot spots throughout the city where asthmatics are using rescue medication most often. Officials plan to layer this data over other relevant data sets, in their quest to stem the tide of asthma in Louisville. Asthmapolis data can be mashed up with related data sources, including air quality information, school absentee data and traffic patterns to inform future community decisions.

“Today, allergists and pulmonologists don’t ask you where you live or where you work. Presumably, with a little more of this data, many of them will start asking those questions,” Smith said, adding that this will directly impact care regimens. “Some of those patients will get different kinds of supervision, which will be a lot cheaper than everybody getting a lot more supervision.”

The hope is that this will lead to fewer medical consequences from the disease, like asthma attacks that require hospitalization — debilitating personally and financially at the individual and community level.

Smith makes a direct connection between data-driven community health programs like the Asthmapolis pilot in Louisville and real economic impacts.

Beyond just reducing health-care costs, better addressing community health can encourage local job creation. Companies considering potential locations now examine community health data too, which will directly affect their health insurance premiums, a significant business expense.

High rates of diabetes, stroke and other expensive diseases can also potentially be addressed with more data. The asthma sensors, then, are just the beginning.

“I think it’s going to be a cultural transformation for our city, and I think it will pay dividends in lots of other areas when people start asking for and expecting to have a lot more data that is more granular and more current,” Smith said.

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