Prescription drug costs are the fastest growing component of total U.S. health care costs, with the increase in retail prescription drug spending (12%) outpacing overall health care spending (5%) in 2014 Spending on specialty drugs—which are used to treat complex, chronic medical conditions and typically require special handling, administration, and monitoring—is a significant component of drug spending, amounting to 22 percent of all drug costs in Michigan and 32 percent in the U.S. in 2014, according to a study published today by the Center for Healthcare Research & Transformation (CHRT).

“Specialty drug costs are expensive, taking a toll on patients and the health care system,” says Marianne Udow-Phillips, executive director of CHRT. “These drugs can significantly improve patients’ quality of life, yet cost increases often lead to high out-of-pocket costs for consumers and could increasingly put these drugs out of reach for many.  Policy solutions are essential to help make these important drugs affordable for those most in need.”

The CHRT study, Rising Cost of Specialty Drugs in Michigan and the United States, looked specifically at specialty drugs for Multiple Sclerosis using 2014 data to allow for national comparisons.

The Midwest region, including Michigan, has a higher prevalence of multiple sclerosis than the U.S. as a whole.  MS specialty drug cost increases are outpacing the annual 3 to 5 percent inflation for overall prescription drugs. Annual per patient spending on MS drugs has grown substantially since the 1990s.

For example, when the MS drug Copaxone was introduced in the mid-1990s, its annual cost per patient was approximately $12,000 (in 2013 dollars). By 2013, Copaxone’s annual cost per patient was nearly $60,000—an average annual increase of 36%. In 2016 alone, the unit cost of MS drugs increased by 7.4 percent, while utilization stayed relatively flat. Tecfidera, another MS treatment, has averaged a 14 percent annual cost increase.

“The good news is that there are proposed policies that could markedly reduce accelerating drug cost trends,” says Udow-Phillips.

One proposal at the federal level, the bipartisan Fair Accountability and Innovative Research Drug Pricing Act (S. 1131), would increase price transparency by requiring drug manufacturers to disclose price increases that exceed certain thresholds. Introduced in the U.S. Senate in May 2017, the Senate referred the proposal to the Committee on Health, Education, Labor, and Pensions.

Another proposal, the Affordable and Safe Prescription Drug Importation Act (S. 469), would allow prescription drugs to be reimported back to the U.S. The bill, which was introduced in the Senate in February 2017, would allow Americans to buy American-made prescription drugs from Canada, where prices are lower. For example, the MS drug Copaxone has an annual cost of $15,000 in Canada – one-fourth of its U.S. cost.

“According to the Congressional Budget Office, reimportation could save consumers $7 billion over 10 years,” says Udow-Phillips. “And, it could greatly improve access to these life-changing drugs.”

 

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A study released by the Center for Healthcare Research & Transformation (CHRT) shows that the ACA Medicaid expansion provided additional support to people who need substance use services—an increasing number of people in light of the opioid crisis.

The study examined the impact of the ACA Medicaid expansion on public mental health and substance use services in three demographically-similar Midwestern states: Michigan and Indiana, both expansion states, and Wisconsin, a non-expansion state.

The study suggests that the Medicaid expansion has had an overall beneficial effect for the substance use population including those with opioid addiction. The Medicaid expansions have brought opportunities for coverage for needed mental health and substance abuse service but also introduced challenges in reduced flexibility of funding.

To date, 32 states have expanded Medicaid including the District of Columbia. Maine is poised to become the 33^rd Medicaid expansion state, after Maine voters approved a referendum on the November 2017 ballot.

“The Medicaid expansion in Michigan and Indiana provided significantly increased funding for substance use services,” says Marianne Udow-Phillips, director of CHRT. “The Medicaid expansion is a net positive: in addition to the overall expanded coverage that resulted from the Medicaid expansion, there were more total resources available for substance use treatment.”

Data show that in 2015, 1 in 6 U.S. adults (about 18%) had some type of mental illness and 7% needed substance use services. Those with Medicaid coverage have a higher prevalence of mental health or substance abuse (38%) than low-income, privately-insured individuals (19%). A recent Council of Economic Advisors analysis estimated that the economic cost of the opioid crisis alone—a subset of all substance use disorder-related costs—was $504 billion in 2015.

All states receive federal block grant funding for substance use services. When states such as Michigan and Indiana expanded Medicaid, the Medicaid funding was additive to the substance use block grant funding. Medicaid resulted in more net resources in expansion states for additional substance use resources, such as recovery housing and other supportive services that state and local areas previously struggled to support.

“These funding changes have both state and federal implications. If the Medicaid expansion is scaled back as some reform proposals in Congress have proposed, it will be enormously challenging for states to find the funds to care for those with mental health and addiction issues,” says Udow-Phillips. “These are serious health issues that cannot be ignored.”

Wisconsin, a non-expansion state, did make some improvements in Medicaid eligibility, though not as extensive as expansion states. Wisconsin reported a 6% increase in Medicaid and Children’s Health Insurance Program (CHIP) enrollment from 2013 to 2015. Over this same period of time, enrollment increased by 22% in Michigan and by 34% in Indiana during this same period.

“As coverage shifted from state-funded mental health services to Medicaid-covered services, there were some challenges for states that expanded Medicaid,” explains Udow-Phillips. “Medicaid dollars are less flexible than state and so some services previously funded lost support. But the net benefits for substance use treatment and overall expanded coverage are quite significant.”

Other highlights of CHRT’s issue brief, The Impact of the ACA on Community Mental Health and Substance Abuse Services: Experience in 3 Great Lakes States, show that:

• Medicaid coverage may be particularly important for individuals with serious mental illness and emotional disorders as it pays for services that can lead to improved mental health, such as case management and wraparound services.
• In Michigan, 14% more people received substance use services in 2016 after the Medicaid expansion than in 2012. Residential admissions increased nearly 40%.
• State leaders interviewed in the three-state study reported enhancements to substance use treatment, and reductions in historically long wait times for services.

CHRT’s Issue Brief, The Impact of the ACA on Community Mental Health and Substance Abuse Services: Experience in 3 Great Lakes States, was developed with support from the Commonwealth Fund.

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The Center for Healthcare Research & Transformation (CHRT) at the University of Michigan is an independent 501(c)(3) impact organization with a mission to advance evidence-based care delivery, improve population health and expand access to care.

The Center for Healthcare Research and Transformation (CHRT), an independent nonprofit impact organization housed at the University of Michigan, is the new host organization for the Michigan Community Health Worker Alliance (MiCHWA), an organization that works to advance and train community health workers across the state and achieve policies that lead to sustainable financing of CHW programs.

As part of the agreement, MiCHWA’s two full-time staff members will be housed in CHRT’s office. Previously, MiCHWA was hosted at the University of Michigan School of Social Work, but sought a new home to provide additional health-related connections needed to launch a statewide registry of community health workers, as well as offer policy expertise to promote evidence-based policy change.

“MiCHWA thanks the University of Michigan School of Social Work for providing a supportive home for our birth and rapid growth since 2011. Our move to CHRT is an exciting development. CHRT’s policy, research, and communications strengths, combined with its commitment to community health workers, will further MiCHWA’s statewide efforts to promote and sustain CHWs,” says Edie Kieffer, M.P.H., Ph.D., MiCHWA co-founder and steering committee member, and Professor of Social Work at the U-M School of Social Work.

Community health workers help link individuals to the health and social services available in their communities, playing a key role in increasing community members’ health knowledge and empowerment, ensuring they receive culturally sensitive care.

MiCHWA and the steering committee that guides MICWHA’s work are currently focused on the following four key areas:

• Expanding community health worker (CHW) training across Michigan, including new training sites in Northern Michigan, the Upper Peninsula, Muskegon, and Battle Creek.
• Building an online CHW Registry, set to launch this September, that will serve both CHWs and CHW employers by providing a centralized system for Michigan CHWs to post their professional profiles and MiCHWA CHW training certificates, and for employers to post CHW positions.
• Working with partner organizations and MiCHWA work groups to promote policies that will promote continued, long-term CHW sustainability.
• Strengthening communications among CHWs and stakeholders through the MiCHWA CHW Network, which serves as a vehicle for CHWs to connect, share resources, offer support, and plan networking activities

“Hosting MiCHWA provides CHRT an exciting opportunity to contribute to and help accelerate the evidence-based work related to the critical role Community Health Workers can play in increasing access to health care,” says Marianne Udow-Phillips, CHRT’s executive director.

For further questions, contact a member of CHRT at chrt-info@umich.edu or call 734-998-7555.

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About the Center for Healthcare Research & Transformation (CHRT)
Founded in 2007, CHRT is an independent 501(c)(3) impact organization at the University of Michigan. CHRT’s experts work with decision makers to improve population health as well as healthcare access and quality by transforming healthcare research and evidence into actionable policy approaches. CHRT’s affiliation with the University of Michigan affords access to a wide array of subject matter and clinical experts.

About the Michigan Community Health Worker Alliance (MiCHWA)

MiCHWA is a statewide alliance comprised of community health workers, organizational partners and other community health worker (CHW) supporters who work to promote and sustain the integration of CHWs  into health and human services organizations throughout Michigan through coordinated changes in policy and workforce development. Housed at the Center for Healthcare Research & Transformation, MiCHWA began in 2011 at the University of Michigan School of Social Work.

The Center for Healthcare Research and Transformation (CHRT), in collaboration with the University of Michigan’s Institute for Healthcare Policy and Innovation (IHPI),  received a $55,380 grant from the American Board of Internal Medicine (ABIM) Foundation to develop a tool to help assess a state’s capacity to launch a statewide Choosing Wisely® campaign.

An initiative of the ABIM Foundation in partnership with Consumer Reports, Choosing Wisely encourages clinicians and patients to engage in conversations aimed at reducing unnecessary care. To date, more than 75 medical specialty societies have collectively published more than 485 tests and treatments they say are overused and should be discussed.

“Choosing Wisely has helped stimulate a national—and now international—conversation about reducing waste and overuse thanks to the leadership of our medical specialty society partners, as well as Consumer Reports and its important patient-education efforts,” said Daniel B. Wolfson, MHSA, the ABIM Foundation’s executive vice president and chief operating officer.

“While the Choosing Wisely campaign is widely recognized as a leading movement in this area, we believe more work is needed to ensure conversations between clinicians and patients happen consistently across all care settings. CHRT and IHPI’s work will help us better understand what tools and resources states will need to advance Choosing Wisely in their communities.”

For example, in Michigan, a variety of Choosing Wisely-focused initiatives and projects are currently active and led independently by providers, payers and other organizations across the state. However, the lack of a centralized system or mechanism that allows these independently-managed efforts to share resources, data or learnings hinders opportunities to collaborate and learn from one another.

To develop a way to unite these currently fragmented efforts, the team of CHRT and IHPI researchers, led by CHRT’S Research and Evaluation Director, Melissa Riba, will first develop and validate a set of criteria to assess what makes an effective, high-functioning Choosing Wisely state-level initiative.

Using that framework, the team will then create and test a tool to assess a state’s readiness to engage in an effort that unites existing Choosing Wisely efforts across the state and also provides the foundation for new initiatives to develop. The tool will be tested in Michigan.

“Many healthcare organizations are beginning to focus on Choosing Wisely and related efforts to make sure patients get the care they need, but not care that is unnecessary or maybe harmful.  We want to understand how these organizations can best work together to improve appropriate healthcare delivery throughout Michigan,” says Eve Kerr, M.D., M.P.H., professor of Internal Medicine and IHPI leadership team member at the University of Michigan and director of the VA Center for Clinical Management Research.

Adds Marianne Udow-Phillips, CHRT’s Executive Director: “Our work supporting the ABIM Foundation and the Choosing Wisely campaign is a natural extension of previous CHRT work on identifying low value care in our healthcare system. Helping states create coordinated campaigns around such efforts is an important evolution of the Choosing Wisely mission.”

 

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About CHRT

Founded in 2007, the Center for Healthcare Research & Transformation (CHRT) is an independent 501(c)(3) impact organization at the University of Michigan. CHRT’s experts work with decision makers to improve population health as well as healthcare access and quality by transforming healthcare research and evidence into actionable policy approaches. CHRT’s affiliation with the University of Michigan affords access to a wide array of subject matter and clinical experts.

The Center for Healthcare Research and Transformation (CHRT) and Public Sector Consultants (PSC), two leading organizations in health policy, are partnering to offer organizations in Michigan a new option for addressing complex policy challenges and developing innovative, actionable solutions.

Through a strategic collaboration, CHRT and PSC will combine talents to bring a superior set of skills and expertise to large-scale projects and initiatives. Michigan-based organizations interested in moving past the status quo and improving the lives of residents through informed, strategic policy development or skilled program management will benefit greatly from the collaboration. Together, CHRT and PSC will offer a powerhouse of public policy expertise and insight.

CHRT and PSC begin their new collaboration with two contracts awarded by the Michigan Health Endowment Fund (MHEF) to assess how well their grants in two focus areas—behavioral health and healthy aging—are aligning and accomplishing the MHEF’s overall strategic goals.

“Already we have seen how our combined capacity allows us to take on large projects that will offer tremendous insight into efforts to improve the health of Michigan residents in these two areas,” says Marianne Udow-Phillips, CHRT’s Executive Director.

Peter Pratt, PSC’s President, elaborated. “We have known each other’s work for years. As we talked more, we realized how similar our approaches to health policy were, especially when it comes to high quality, understandable research and evaluation. This exciting partnership will allow us to do much more of this important work.”

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About Our Organizations
Founded in 2007, CHRT is an independent 501(c)(3) organization at the University of Michigan. CHRT’s experts work with decision makers to improve population health as well as healthcare access and quality by transforming healthcare research and evidence into actionable policy approaches. CHRT’s affiliation with the University of Michigan affords access to a wide array of subject matter and clinical experts.

Established in 1979, PSC is committed to providing objective research and sound solutions on a broad range of issues to the public and private sectors. The firm’s health practice area delivers top-quality research, facilitation, program evaluation, and other services to a wide variety of organizations across the state.

The Services We Offer
Both organizations are well known for bringing rigor and high quality to their work, which includes in-depth policy analysis, survey research, skilled facilitation, program evaluation, and program management. Staff at each organization maintain content expertise in a range of health policy issues and are experienced in working with clients to identify and develop solutions to complex challenges.

This strategic collaboration will allow CHRT and PSC to build on and expand their existing capacity and services in program evaluation, survey research, program management, and stakeholder facilitation:

• Program Evaluation. CHRT and PSC each provide clients with valuable information that can drive program management and improvement. The organizations work collaboratively with stakeholders to develop metrics, collect and analyze data, and interpret and report key findings. Combining the strengths of CHRT and PSC will allow for evaluation of larger-scale projects.
• Program Management. Together, PSC and CHRT bring a wealth of content knowledge and program management expertise that can bolster large-scale, health-based programs across Michigan. CHRT currently manages and provides staffing for the Washtenaw Health Initiative, which serves as the backbone organization for one of Michigan’s State Innovation Model (SIM) community health innovation regions. Additionally, CHRT hosts the Michigan Primary Care Transformation Project. PSC has formed and managed several initiatives and nonprofit organizations, including Michigan Saves, the Great Lakes Fishery Trust, People and Land, and the Kalamazoo River Community Recreational Foundation.
• Survey Research. CHRT and PSC can conduct large-scale recurring annual surveys and one-time, topic-specific surveys, and work with clients to develop a dissemination plan, including the development of deliverables such as issue briefs, infographics, media materials, and presentations. The two organizations have each designed and carried out statewide surveys of the general population and specific health-stakeholder populations, including consumers, physicians, nurses, and hospitals.
• Stakeholder Facilitation. PSC is well known for adept facilitation of broad stakeholder coalitions, working with these groups to build consensus and establish priorities, as well as to identify indicators and metrics for monitoring community improvement efforts. CHRT’s data analysis skills, access to University of Michigan researchers and clinical expertise, as well as their dedication to health policy research complement PSC’s facilitation efforts, providing high-quality, well-researched background documents to inform stakeholder discussions.

The Center for Healthcare Research & Transformation (CHRT), an independent nonprofit organization housed at the University of Michigan, welcomes a new board of directors that includes representation from additional healthcare, business and policy organizations.

“We are thankful for the support and direction we have received from our two founding organizations, Blue Cross Blue Shield of Michigan and the University of Michigan,” says Marianne Udow-Phillips, director of CHRT. “Now, at our 10-year mark, we remain committed to providing objective, non-partisan information. Our new board enables us to offer healthcare and health policy research and insight to more organizations and to increase the impact of our work.”

CHRT’s board of directors includes:

John Z. Ayanian, MD, MPP, Director, Institute for Healthcare Policy and Innovation, University of Michigan. Ayanian is the inaugural director of the Institute for Healthcare Policy and Innovation at the University of Michigan (U-M), which includes over 475 faculty members from 15 schools and colleges at the university. He is the Alice Hamilton Professor of Medicine at the Medical School, professor of Health Management and Policy at the School of Public Health, and professor of Public Policy at the Gerald R. Ford School of Public Policy. He is a Fellow of the American College of Physicians and an elected member of the National Academy of Medicine.

Robert Casalou, President and CEO, St. Joseph Mercy Health System, Ann Arbor. Casalou is regional director of SJMHS, a five-hospital, multi-outpatient health organization. He is board chair of the Make-A- Wish Foundation of Michigan, a member of the American Heart Association Midwest Affiliate Board, a delegate to the American Hospital Association Regional Policy Board 5 and is a member of the Together Health Board and Integrated Health Associations (IHA) Board a multispecialty medical group located in Southeast Michigan.

Tony Denton, JD, MHA, Senior Vice President and Chief Operating Officer, University of Michigan Health System. Denton has served in a variety of leadership posts and has been chief operating officer since 2004. He is an active member on multiple UMHS senior leadership committees and has served on several community boards. At present, he serves on the Michigan Health and Hospital Association Board of Trustees, and is a member of the Washtenaw Health Initiative Steering and Finance Committees. He is also co-chair of the United Way Leadership Giving Campaign for Washtenaw County and co-chair of the University of Michigan’s United Way Campaign. Tony is serving as Chair of the CHRT Board for 2016-17.

Kevin J. Klobucar, Executive Vice President, Health Care Value, Blue Cross Blue Shield of Michigan. At Blue Cross, Klobucar is responsible for product development, provider contracting and network management, medical and pharmacy management, as well as wellness program and care management delivery across all lines of business. Klobucar is a member of the board of directors for Big Brothers Big Sisters of Livingston County, Greater Detroit Area Health Council and Michigan State University’s Eli Broad Alumni Board of Directors.

Francine Parker, Executive Director, UAW Retiree Medical Benefits Trust. The Trust is the largest nongovernment purchaser of retiree health care in the United States. Previously Parker served as president and chief executive officer of HAP and senior vice president of Insurance-Purchaser Relations for Henry Ford Health System. Parker is on the Board of Trustees for Dana VEBA, Bosch VEBA, Daimler VEBA, Mack VEBA, ACC VEBA and Siena Heights University; the Board of Directors of the Greater Detroit Area Health Council; and the Alliance for Health Reform Board of Directors (Washington DC).

Lynda Rossi, Executive Vice President, Strategy, Government and Public Affairs, Blue Cross Blue Shield of Michigan. Rossi oversees Corporate Strategy, Office of National Health Reform, Governmental Affairs and Public Policy, Corporate Communications, Blue Cross Blue Shield of Michigan Foundation, and Social Mission. Rossi is president of the Blue Cross Blue Shield of Michigan Foundation board of directors, and a board member for the Metropolitan Affairs Coalition and AmeriHealth Caritas Family of Companies.

Thomas L. Simmer, MD, Senior Vice President and Chief Medical Officer, Blue Cross Blue Shield of Michigan. Simmer oversees Blue Cross Blue Shield of Michigan’s medical policy, professional payment policies and national programs to improve quality, cost and access to medical services. He also provides leadership to the Michigan Quality Improvement Consortium, and is a member of the American Medical Association, Michigan State Medical Society and a Fellow of the American College of Physicians.

Terence A. Thomas, Co-Founder, Thomas Group Consulting, Inc. Thomas provides public affairs management consulting to public and private entities and interests. Previously, Thomas was chief advocacy and corporate responsibility officer at St. John Providence Health System.

Brent C. Williams, MD, MPH, Medical Director, University of Michigan Complex Care Management Program. Williams has developed clinical programs to improve care and decrease inappropriate health care expenses among high-utilizing patients with combined medical, mental health, substance abuse disorders, and/or poverty and homelessness. He serves on the Washtenaw Health Initiative Steering Committee, and is director of the U-M Medical School Global Health and Disparities Path of Excellence.