Steven H. Sheingold, Ph.D. Office of the Assistant Secretary for Planning and Evaluation

1. Information Systems, Data Collection and Legal Framework Requirements for Evaluating and Monitoring Health Benefits Packages in the United States Steven H. Sheingold, Ph.D. Office of the Assistant Secretary for Planning and Evaluation U.S. Department of Health and Human Services

2. Objectives • Landscape, methods and processes for health benefits packages (HBPs) in the U.S. • Impact of recent health reform • Issues of legal frameworks, evidence and data infrastructures

3. Health Insurance in 2009

4. U.S. Health Care System and HBP Decisions • Mixed public and private financing system in which decision making is decentralized • Private Insurance markets segmented (Large, small, non group) and self insured/fully insured • Thus, HBP decisions made by multiple parties • Private health plans • Employers and other purchasers • Federal and state governments • Decisions driven by need, cost, scientific evidence, market forces, federal and state laws and regulations

5. HBP and Policy Concerns in the U.S. • HBPs for the insured not the most prominent policy issue • Health reform - Much of the policy focus on rising costs and coverage for the uninsured • Concern for assuring that some specific benefits are available and affordable addressed by health reform– prevention services • In general less focus on large groups and self insured

6. HBPs • Typically specify categories of benefits that can be covered – inpatient and outpatient hospital services, physician services, surgical services, durable medical equipment etc. • Contract language (private) and statute (public) guide the methods and processes for making decisions on individual items and services within these categories • Cost sharing – copayments, coinsurance, deductibles etc. specified

7. Differences Between Pharmacy and Medical Benefits • Often decisions made by separate parties within health plans – pharmacy benefits often contracted out (PBMs etc.) • Medical benefits often have same cost sharing requirements within basic benefit categories • Pharmacy benefits more value based – cost sharing used to shift utilization to generics and preferred brands

8. Evidence Evaluation – New vs Existing Services • Most HBP decisions based on rigorous review of evidence regarding effectiveness (less use of comparative effectiveness) • More success at applying rigorous scientific criteria to new technologies • Many existing services have not been rigorously evaluated for new decisions • Many services still enter practice under evaluated (off label uses)

9. Incorporating Cost and Value • Based mostly on the political, cultural and media climate, decision makers in the U.S. do not explicitly use cost effectiveness ratios to make HBP decisions • End of life and “heroic” services particularly difficult to discuss • A significant amount of what many consider “marginal value” medicine is practiced, calling into question the efficiency of our health resource allocation

10. Commonly Covered Services Some of these services might not have been included in the HBP if CEA had been considered

11. The Essential Health Benefits (EHB) Package • ACA requires the Secretary of HHS to be responsible for designing a uniform benefit package called essential health benefits • Scope must be equivalent to benefits offered by typical employer plans • All plans offering in the health insurance exchanges and most outside must offer • Purpose – assure access to valuable services, transparency and making health plan comparisons easier

12. The Essential Health Benefits Package • For the first time, federal government is defining a benefits package outside of Medicare/Medicaid • The EHB must be reviewed periodically • Must be updated to address gaps and respond to changes in evidence • There will be more uniformity of HBPs • Twin objectives of assuring access to effective services and making insurance choice more transparent, competition on price and quality • Several studies and policy deliberations underway related how EHB policy will be implemented

13. Objectives for Implementing, Evaluating and Modifying HBPs • Improvement in health status of the population – morbidity, mortality and health related quality of life • Efficiency - Impact on resource allocation, cost and value • Equity – given budget constraints, access to effective services for the population • Encourage market competition • Strengthen demand side of the market – impact the R&D/innovation pipeline • HBP decisions involve tradeoffs of cost, efficiency and equity goals

14. Continuum of HBP Policies to Achieve these Objectives • HBP Core • Benefit categories • Processes, criteria and decisions on specific services (evidence, use of cost effectiveness etc.) • Cost sharing • Adjunct Policies • Payment policies • Guidelines and data feedback • Practice agreements • Patient education/shared decision making • Budgets • Supply constraints

15. Value Based Insurance Design (VBID) • Goals of HBP policy can be achieved by using both core and adjunct policies and by VBID • VBID varies cost sharing to encourage use of high value services and discourage use of lower value services or those with less evidence of effectiveness. • Can account for patient differences regarding the value of services • Similarities to formulary design for prescription drugs • Some experimentation with VBID in the U.S.

16. Laws and Regulations • Should be consistent with HBP objectives • Support, or at least not preclude methods and processes that could result in higher value decisions • Not mandate benefits unless subject to rigorous scientific review • Not mandate benefits based on power of the interest group rather than the power of the science

17. Laws and Regulation in the U.S. • Medicare – • statute specifies benefit categories, exemptions and exclusions • Individual coverage decisions based on statutory clause that requires items or services be “reasonable and necessary” for diagnosis and treatment • Reasonable and necessary criteria interpreted administratively, regulatory criteria have not been established • Congress can add benefit categories and services through statutory changes • Private Insurance • Contract language such as medical necessity • States can mandate benefits Interpretations of terms in red have been controversial and subject to litigation

18. Evidence • Research/evidence creation • Clinical trials • Observational studies • Registries • Cost studies • HTA and Guidelines • Systematic reviews • CER • CEA • Social and cultural factors • Decision Making • Coverage and reimbursement • Physician/patient decisions • R&D decisions

19. HTA Infrastructure • Basing HBP decisions on solid evidence requires an information infrastructure • However, not every health care system needs to produce its own clinical research and HTAs – this would be inefficient • Each system needs sufficient infrastructure to collect and synthesize available evidence in ways that fit their delivery system, practice patterns, health needs and values.

20. U.S. Research and HTA Infrastructure • HTA/evidence evaluation conducted by AHRQ, NIH, state agencies, health plans, private entities • AHRQ Effective Health Care Program: http://effectivehealthcare.ahrq.gov/ • Strengths • Excellent capacity for clinical research (NIH, academic centers, private enterprise) • Excellent capacity methods development, systematic review, health services research, HTA etc. (AHRQ, evidence and effectiveness centers, private entities) • Allows for separation between HTA entities and decision makers to assure scientific legitimacy and integrity • Weaknesses • Under funded • Duplicative • Too little CER and CEA • Some assessments proprietary

21. HTA: U.S Spending and Duplication • Spending (2005) • National health expenditures – more than $2.5 trillion • R&D spending- $111 billion (4.5% of health spending) • Spending on evaluating technologies– less than $1 billion (0.05% of health spending) • Near $0 on assessing public values and deriving consensus on technology issues • Duplication • IOM study of TA activities of 7 entities in 2006 • Of 20 services examined: • 14 evaluated by all 7 groups • 17 evaluated by 5 of 7 groups • 5 evaluated by AHRQ

22. CER: Health Reform Begins to Address These Problems • Support comparative effectiveness research by establishing a non-profit Patient-Centered Outcomes Research Institute (PCORI) to identify research priorities and conduct research that compares the clinical effectiveness of medical treatments. • The Institute will be overseen by an appointed multi-stakeholder Board of Governors and will be assisted by expert advisory panels. • Findings from comparative effectiveness research may not be construed as mandates, guidelines, or recommendations for payment, coverage, or treatment or used to deny coverage.

23. Other problems in evidence evaluation and HBP decision Making • Mismatch between clinical research and evidence needs of decision makers • Problems with generalizing clinical trial results to medical practice • Highly selected patients and settings • Limited comparators in studies • Relevant outcomes not studies • Timing with HBP decisions • Decision makers have had little influence over R&D decisions and the clinical research enterprise • Decision making with insufficient evidence – risks associated with yes/no decisions that are either too early or too late • One solution: Coverage with evidence development - being used by Medicare and others

24. Setting Priorities for HBP Evaluation • The pace of health care innovation is rapid with regard to new services and new uses of existing services • There are many services in current practice that should be evaluated • It is impossible to build the capacity for evaluating all such services • Processes and methods of setting HTA priorities are needed • Most HTA and evidence assessment institutions have developed methods and processes for doing priority setting

25. Potential Factors for Setting Priorities • Burden of disease • Potential impact on health outcomes • Add on vs. unique innovation • Preferences of government and private decision makers, physicians and patients • Depth and breadth of the scientific issues • Potential for patient risks and benefits • Cost per services • Aggregate cost of use • Feasibility

26. Most U.S. Health Plans and HTA Entities do Horizon Scanning • Attempts to identify and track new technologies before they enter medical practice • Assists priority setting by identifying future assessment needs • Monitoring of professional journals, trade press, conference proceedings, FDA applications, billing code changes

27. Monitoring Infrastructure • After a decision is made its impact should be monitored: • Is the service being used for the indications and patients anticipated • Are any limitations on use being followed • Is there any evidence of adverse outcomes and unanticipated risks • Monitoring: • Can provide information for focused medical review • Can provide alerts that new or modified decisions may be necessary • Can provide alerts that more research is needed • Data for monitoring: • Physician and patient reports • Adverse events monitoring • Registries for selected procedures and conditions • Claims database analyses • Follow patients based on diagnosis, site of care and services used • Potentially link to clinical records and mortality data • Beyond monitoring, claims or encounter databases can be used to estimates costs and/or saving from decisions

28. Emerging Capacity for Monitoring, Research and Evaluation • ARRA provided $1.1 billion for CER • Being used for four activities intended to build infrastructure and support CER • Research (CER studies) • Human and scientific capital (training and methods development) • Dissemination and translation • Data infrastructure • The latter will increase capacity to monitor, flag potential issues and problems for research and decision making, provide cost information • Potential basis for research when linked to medical records and outcome data

29. New Data Infrastructure • Improve accessibility of current claims data – make Medicare and Medicaid claims databases more user friendly • Creating new data resources – multi-payer claims databases: • Include private insurance claims to Medicare and Medicaid to better reflect the U.S. population • Add clinical and outcome data to the claims database

30. Process for Medicare Coverage Decisions • National decisions are based on an transparent, evidence-based process to determine whether items or services are “reasonable and necessary” for the Medicare population • The process has prescribed timeframes • In general, ask whether the evidence is strong enough to support a scientific conclusion that the service will improve health outcomes for Medicare beneficiaries • Process includes internal and external HTAs, an expert advisory committee (MEDCAC), and all related information available online • Decisions can be reconsidered or appealed • Decisions are also made locally and must follow accessible processes

31. MEDICARENATIONALCOVERAGEPROCESS Reconsideration Preliminary Discussions Benefit Category 6 months 30 days 60 days Final Decision Memorandum and Implementation Instructions National Coverage Request Staff Review Draft Decision Memorandum Posted Public Comments External Technology Assessment Staff Review Department Appeals Board Medicare Evidence Development and Coverage Advisory Committee 9 months

32. DETAILS ON THE MEDICARE PROCESS FOR EACH DECISION ARE AVAILABLE ONLINE • http://www.cms.hhs.gov/center/coverage.asp • Tracking sheets • Decision memos • External technology assessments • MedCAC proceedings • Guidance documents For another example, see the Washington State process: http://www.hta.hca.wa.gov/about.html

33. Clinical Trials & other research Basic Research Applied Research R&D Funding New Technologies Technology Assessment Systematic Reviews, CER, CEA Demand Side of a Dynamic Marketplace FDA Process Coverage & Payment Decisions Research on Public Values, input & consensus (Deliberative Democracy) Physician/Patient Practice Decisions Practice Data

34. Gracias por su atención