RAND Cited Al Dobson and Joan DaVanzo's 2006 Study on Cost-Shifting in Healthcare
A recent RAND report titled “Prices Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely” (May 2019) is a considered examination of hospital payments in 25 states. The authors examined hospital payments across payers and found that there is a wide variation in prices paid by private health plans as compared to Medicare. To discuss these large gaps in prices, RAND posited two different interpretations, citing Al Dobson, Joan DaVanzo, and a former colleague’s (Namrata Sen) 2006 cost-shifting article’s conclusion as one possible theory to explain that as Medicare severely underpays hospitals, “hospitals are compelled to charge higher prices to their privately insured patients merely to stay afloat”.
The Medicare Payment and Advisory Commission (MedPAC) has cited the Dobson | DaVanzo evaluation of Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs) (funded by NAACOS) in its June 2019 report. Within the report, MedPAC corroborates the overall savings level described in our report. MedPAC carefully describes and compares a variety of recent evaluations from the literature, including those from Harvard, University of Michigan, the National Institutes of Health, NORC, and Dobson | DaVanzo.
As noted in our study of MSSP and elsewhere in the literature, ACO programs are fiendishly difficult to evaluate. This is part of the nature of voluntary provider-driven programs: they are in some part driven by an inherent bias of providers deciding to be in the program. This, coupled with retrospective patient assignment rules and rapidly shifting ACO provider rolls, can make for a program where almost every measurable aspect shifts over time (chiefly which providers and patients are included).
We look forward to continuing the public discussion of the impact of this important program and contributing further to the literature.
Dobson | DaVanzo has joined the national effort in determining the real costs associated with the opioid epidemic. While considering the economic burden of the crisis associated with addiction and overdose, we will also attempt to quantify total societal costs such as the impact on newborns, education, criminal justice, and the health insurance sector, to name a few.
The Commonwealth Fund has awarded a grant to Dobson | DaVanzo to expand upon our work that shows how Medicaid work requirements could affect hospital finances. Previous issue brief prepared by Dobson | DaVanzo estimated the number of Medicaid enrollees that would lose coverage and in turn impact hospitals’ Medicaid revenues, uncompensated care costs, and operating margins, in 13 states who had either approved or had pending Medicaid waivers to impose work requirements for certain eligibility groups. The upcoming work will expand upon our prior brief by including 5 additional states that have requested Medicaid work requirement waivers.
Dobson | DaVanzo was awarded a $4.7 million five-year contract to perform Part D claims analyses. Together with our subcontractor Acumen, LLC, the firm will be conducting data analyses of prescription drug event (PDE) data and other available CMS data to support CMS’s ongoing monitoring of the Medicare Part D program.
Al Dobson attended the Princeton Conference, a longstanding initiative of The Council on Health Care Economics and Policy, organized by the Brandeis University’s Heller School of Social Policy and Management. Held from May 21-23, 2019, this conference was focused on whether federalism could improve the U.S. healthcare system. These conferences serve as a national platform for health policy experts to debate key issues that help shape healthcare policy and regulation in the U.S.
Dobson | DaVanzo analyzed the National Health Expenditure (NHE) data published by CMS along with data collected from a survey of healthcare providers that use group purchasing organization (GPO) services to show substantial savings for the entire healthcare industry. In particular, the analysis showed that GPOs are projected to reduce total health care spending for hospital and nursing homes by up to $456.6 billion over the next ten years (2017-2026). Medicare is estimated to account for over 25 percent (or $116.3 billion) and Medicaid for approximately 20 percent (or $90.2 billion) of these cost savings.
To view the report in its entirety, please follow this link.
Joan DaVanzo attended a half-day meeting addressing Social Determinants of Health (SDoH), sponsored on May 17, 2019 by Tivity Health, Healthcare Leadership Council, and Aetna. The meeting, which brought approximately 60 stakeholders together, was designed to ensure a common understanding of the importance of SDoH. This discussion also identified barriers and private and government sector solutions to address SDoH.
Dobson | DaVanzo was commissioned by the National Hospice and Palliative Care Organization (NHPCO) to develop a policy brief outlining the goals and benefits of hospice care. The paper explores the history of the hospice concept and presents case-study analyses and quantitative research to illustrate the value that integrated care provides seriously ill patients and their families. Many of the studies show that hospice can reduce Medicare spending. The document is a source for both policymakers and stakeholders interested in learning about the value of the person-centered care ideal embodied by the Medicare Hospice Benefit. This brief calls for policymakers to take action in expanding public knowledge of and access to the unique services available to patients and families when considering courses of treatment options when faced with a serious illness.
To view this brief in its entirety, please follow this link.
President of Dobson | DaVanzo, Al Dobson, has been presented with the Albert Nelson Marquis Lifetime Achievement Award by Marquis Who’s Who. Out of the 1.5 million individuals nominated, only a small percentage are selected for this recognition.
In Dr. Dobson’s 50 years of professional experience, he served as Senior Vice President of the Lewin Group and Director of the Office of Research for the Health Care Finance Administration (now the Centers for Medicare and Medicaid Services) when the Medicare Inpatient Prospective Payment System was developed and implemented. More recently, he co-founded a successful health economics and policy consulting firm in the Washington, DC area.
Throughout his career, Dr. Dobson has been affiliated with multiple professional membership organizations, has authored and reviewed numerous peer reviewed articles in professional journals and has been honored with numerous public and private sector recognitions and awards. The Marquis recognition complements a much earlier recognition as one of the nation's most influential health care policy leaders by Faulkner and Gray.
For more than a century, Marquis Who’s Who has profiled the lives of individuals with significant achievements from all fields including politics, business, medicine, law, education, art, religion and entertainment.
Dobson | DaVanzo’s new evaluation of Medicare Shared Savings Program Accountable Care Organizations (ACOs) found greater savings than the Centers for Medicare and Medicaid Services (CMS) benchmark savings estimate. With the addition of 2016 data, we update our estimate and find that MSSP ACOs saved CMS $2.66B from 2013 to 2016 with net savings of $665.8M after accounting for incentive payments made by and to the program participants. Once again, these findings stand in contrast to the CMS savings calculation based on programmatic benchmarks. View the full report here. This study includes new data to make update our earlier report of PY2013-PY2015 results. These studies use standard evaluation techniques typically employed by CMS in its evaluations of the Next Generation ACO (NGACO) model, Pioneer ACOs, and other programs that do not rely on the benchmark method to estimate program effects.
Dobson |DaVanzo’s Alex Hartzman and Kimberly Rhodes participated in a webinar presentation sponsored by the National Association of ACOs (NAACOS) last month. The audience included NAACOS member representatives from Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs).
During their presentation, Alex and Kimberly provided ACOs with an overview of the company’s Benchmark Comparative And Performance Analysis (B-CAPA) product (developed in collaboration with NAACOS) which contains a multitude of useful strategic and operational information that allows ACOs to compare their performance to peer groups of similar ACOs. These peer groups include ACOs with similar HCC risk scores, ACOs with similar benchmarks, and ACOs in the same CMS region.
Alex and Kimberly also provided a high-level summary of 2017 MSSP ACO performance, sharing insights about segments of ACOs (such as those who shared savings vs. those that did not, and ACOs that contain facilities vs. those containing only physicians), as well as programmatic results in aggregate – namely that 2017 was the first performance year in which ACOs achieved net savings to Medicare relative to benchmarks (though this measure may undercount ACO savings).
Following Alex and Kimberly’s portion of the presentation, leaders within two MSSP ACOs shared specific examples of how executives use B-CAPA to guide decision making and make operational adjustments to increase quality and efficiency. The webinar closed with an engaging question and answer session, in which participants and presenters discussed additional use-cases for the product and future enhancements to B-CAPA.
In a blog post for The Commonwealth Fund, Dobson | DaVanzo discusses how the work requirements placed on Medicaid enrollees in the Commonwealth of Kentucky would negatively impact hospital finances and increase the number of uninsured individuals in Kentucky.
This study, performed by Dobson | DaVanzo’s Randy Haught, Al Dobson, Ph.D., and Phap-Hoa Luu, M.B.A., indicates that beginning in 2019, the Kentucky Medicaid 1115 waiver (Kentucky HEALTH) would result in a significant number of enrollees losing Medicaid coverage. Other findings are that Medicaid work requirements would reduce safety-net hospital revenues while increasing uncompensated care costs thereby reducing hospital operating margins.
Dr. Al Dobson, PhD, President of Dobson DaVanzo & Associates, LLC (Dobson | DaVanzo), gave the keynote address at National Association of Long Term Hospitals' (NALTH) fall meeting on October 18th. His talk focused on the shifting political and regulatory climate, Alternative Payment Models (APMs) and the role of long term care hospitals (LTCHs) in the changing healthcare landscape.
Becker's Hospital CFO Report reports on a recent Dobson | DaVanzo study commissioned by The Integrated Health Care Coalition on the impact of the Centers for Medicare and Medicaid Services (CMS) outpatient site neutral off-campus provisions. Our analysis showed the 200 with the largest impact account for 73 percent of the total impact of the change in payment due to off-campus site neutral payments. Our report was submitted as part of the Outpatient Prospective Payment System (OPPS) notice of proposed rulemaking (NPRM) comments to CMS by The Integrated Health Care Coalition.