Asia Health Policy Program Director Karen Eggleston and colleagues examine China’s progress in enhancing financial protection under its social health insurance to achieve universal health coverage.

In 2009, China launched comprehensive health system reforms to address challenges such as increasing rates of non-communicable diseases and population aging, problems with health financing and healthcare delivery, and overall growing health expectations of its people. Promoting universal health coverage by building a social health insurance system was a central pillar of the reforms.

After a decade of system reforms, has the Chinese government made good on its commitment to bolster universal health coverage? In a new article published in a BMJ collection, a team of four co-authors including Karen Eggleston, APARC’s deputy director and director of the Asia Health Policy Program, evaluates China’s progress towards enhancing financial protection of social health insurance and identifies the main gaps that need to be filled to achieve universal health coverage. Their article is part of a special BMJ collection with Peking University that marks the tenth anniversary of China’s health system reforms by analyzing their accomplishments and challenges ahead.

The 2009 reforms aimed to cover the entire Chinese population with one of three (since 2012 one of two) basic social health schemes. To provide added financial protection to patients with critical illnesses, catastrophic medical insurance was initially launched in 2012 and implemented nationally in 2015. Eggleston and her co-authors determine that the expansion of health insurance has had several major successes. First, it improved access to and use of healthcare. In 2011, China achieved near-universal health insurance coverage, with more than 95% of the Chinese population covered by health insurance. Moreover, the annual inpatient hospital admission rate increased from 3.6% in 2003 to 17.6% in 2017, and admission rates for outpatient services were much higher than the global average.

Second, the expansion of health insurance coverage reduced the share of out-of-pocket heath expenses in total health expenditure, thus raising the level of financial protection. Third, catastrophic medical insurance was also effective in supplementing the basic social health insurance schemes and provided extra financial protection to a range of vulnerable groups. By 2017, more than a billion people in China were covered by such insurance.

However, much remains to be done. Out-of-pocket health expenditures remain fairly high and are one of the main reasons for catastrophic health expenses and low financial protection in China, which disproportionately affect deprived populations. Catastrophic medical insurance currently does not target underprivileged people, while medical aid is relatively small in scale and covers only a minority of patients with catastrophic health expenses.

Eggleston and her colleagues conclude that the Chinese government should focus on underprivileged populations within the current insurance system and enhance their financial protection as an important element of targeted poverty alleviation. Such targeting, the researchers emphasize, requires a clear and integrated policy encompassing the basic social health insurance schemes, catastrophic medical insurance, medical aid, and improved healthcare efficiency.

Type 2 diabetes has become a major public health problem in South Asia in recent decades. The region is now home to an estimated 84 million people suffering from diabetes—approximately one-fifth of the world’s 451 million adults with diabetes—a number that is expected to rise by 78% by 2045. Even more concerning, across South Asia the disease burden increasingly occurs in the most productive midlife period. Among Indians, for example, diabetes is estimated to occur on average 10 years earlier than their western counterparts, and almost half of Indian patients with type 2 diabetes are diagnosed before age 40.

How do South Asian health system influence diabetes care? What is the magnitude of the economic impact of diabetes in South Asia? And what can be done to mitigate that economic burden? These are some of the questions that a team of researchers, including Karen Eggleston, APARC’s deputy director and director of the Asia Health Policy Program, set out to answer in a new study published in the journal Current Diabetes Reports.

Eggleston co-authored the study with Kavita Singh of the Public Health Foundation of India and the Centre for Chronic Disease Control in New Delhi, and with M. Venkat Narayan, Professor of Medicine and Epidemiology and Director of the Global Diabetes Research Center at Emory University. They find that diabetes-related complications lead to enormous treatment costs, causing catastrophic medical spending and illness-induced poverty for many households.

The new study is related to a broader research project led by Eggleston, entitled Net Value in Diabetes Management, that compares health care use, medical spending, and clinical outcomes for patients with diabetes as a lens for understanding the economics of caring for patients with complicated chronic diseases across diverse health systems. This international collaborative research convenes teams of clinicians and health economists in ten countries (and growing) across Asia, as well as the United States and The Netherlands. Together, they analyze big data—detailed, longitudinal patient-level information for large samples from each country, including millions of records of clinical encounters, health-check-up, and medical spending—to compare the health care use and patient outcomes for adults with type 2 diabetes in their health systems.

In the new publication, Eggleston and her co-authors first introduce several unique features that characterize the type 2 diabetes epidemic in South Asia. These include a high risk of developing diabetes even at lower levels of body mass index than observed among western populations; a high prevalence of glucose intolerance, low levels of HDL cholesterol, and high levels of triglycerides; a relationship between impaired fetal nutrition, diabetes, and cardiovascular risk; and the likelihood of rapid urbanization impacting the diabetes burden of the wealthy and the underprivileged differently.

Furthermore, South Asian countries face difficult challenges in delivering diabetes care. The health sector in the region has little organized financing, leading to heavy out-of-pocket spending by patients. Limited availability and affordability of anti-diabetic drugs is a major driver of lower use of such medicines. These factors, combined with a general lack of health care professionals and infrastructural resources and low quality of healthcare governance, all contribute to poor health outcomes.

Eggleston and her co-authors assess the current literature on the economic impact of diabetes in South Asia. They show that, compared with the high prevalence of diabetes in South Asian countries, the total health spending as a percentage of GDP in the region has remained low and fairly constant (3-4% in most countries) over the last two decades, with less than 1% of GDP spent on healthcare by the government, and a miniscule 0.2% by pre-paid private insurance, resulting in a large proportion of out-of-pocket healthcare spending. The financial burden of diabetes and its complications can therefore have catastrophic implications for households that are often driven to sacrifice disastrous proportions of their income to cover treatment costs.

Diabetes causes premature mortality, high morbidity, and disability. To mitigate the economic and social welfare burden of the disease, the researchers conclude, policymakers in South Asia must take urgent action “to increase investment in evaluating cost-effective strategies to manage diabetes and preventative approaches.” The team offers a set of policy recommendations, including monitoring the economic burden of diabetes and the quality of care; focusing on the screening and prevention of diabetes and its risk factors; strengthening government health facilities and primary care services; expanding access to affordable, essential medicines, and more.

People today can generally expect to live longer and, in some parts of the world, healthier lives. The substantial increases in life expectancy underlying these global demographic shifts represent a human triumph over disease, hunger, and deprivation, but also pose difficult challenges across multiple sectors. Population aging will have dramatic effects on labor supply, patterns of work and retirement, family and social structures, healthcare services, savings, and, of course, pension systems and other social support programs used by older adults. Individuals, communities, and nations around the world must adapt quickly to the demographic reality facing us and design new approaches to financing the many needs that come with longer lives.

This imperative is the focus of a newly published special issue of The Journal of the Economics of Ageing, entitled Financing Longevity: The Economics of Pensions, Health and Long-term Care. The special issue collects articles originally written for and discussed at a conference that was dedicated to the same topic and held at Stanford in April 2017 to mark the tenth anniversary of APARC’s Asia Health Policy Program (AHPP). The conference convened top experts in health economics and policy to examine empirical and theoretical research on a range of problems pertinent to the economics of aging from the perspective of sustainable financing for long lives. The economics of the demographic transition is one of the research areas that Karen Eggleston, APARC’s deputy director and AHPP director, studies. She co-edited the special issue with Anita Mukherjee, a Stanford graduate now assistant professor in the Department of Risk and Insurance at the Wisconsin School of Business, University of Wisconsin-Madison.

The Financing Longevity conference was organized by The Next World Program, a Consortium composed of partners from Harvard University, Fudan University, Stanford University, and the World Demographic and Aging Forum, and was cosponsored by AHPP, the Stanford Institute for Economic Policy Research, and the Stanford Center on the Demography and Economics of Aging.

The contributions that originated from the conference and are collected in the Journal’s special issue cover comparative research on more than 30 European countries and 17 Latin American countries, as well as studies on Australia, the United States, India, China, and Japan. They analyze a variety of questions pertinent to financing longevity, including how pension structures may exacerbate existing social inequalities; how formal and informal insurance interact in securing long-term care needs; the ways in which the elderly cope with caregiving and cognitive decline; and what new approaches might help extend old-age financial security to those working outside the formal sector, which is a major concern in low-income countries.

Another challenge of utmost importance is the global pension crisis, caused due to committed payments that far exceed the saved resources. It is a problem that Eggleston and Mukherjee highlight in their introduction to the special issue. By 2050, they note, the pension gap facing the world’s eight largest pension systems is expected to reach nearly US $400 trillion. The problem cannot be ignored, as “the financial security of people leading longer lives is in serious jeopardy.” Indeed four of the eight research papers in the special issue shed light on pensions and inequality in income support for older adults. The other four research papers focus on health and its interaction with labor force participation, savings, and long-term care.

The issue also features two special contributions. The first is an interview with Olivia S. Mitchell, a professor at the University of Pennsylvania’s Wharton School and worldwide expert on pensions and ageing. Mitchell explains the areas offering the most promise and excitement in her field; discusses ways to encourage delayed retirement and spur more saving; and suggests several priority areas for future research. The latter include applying behavioral insights to questions about retirement planning, improving financial literacy, and advancing innovations to help people imagine themselves at older ages and save more for their future selves.

The second unique contribution is a perspective on the challenges of financing longevity in Japan, based on the keynote address delivered at the 2017 Stanford conference by Mr. Hirotaka Unami, then senior Director for policy planning and research of the Minister’s secretariat of the Japan Ministry of Finance and currently deputy director general with the Ministry’s Budget Bureau.

In Japan, decades of improving life expectancy and falling birth rates have produced a rapidly aging and now shrinking population. Data released by Japan’s Statistics Bureau ahead of Children's Day on May 5, 2019 reveal that Japan’s child population (those younger than 15) ranks lowest among countries with a total population exceeding 40 million. In his piece, Unami focuses on the difficult tradeoffs Japan faces in responding to the increase in oldest-old population (people aged 75 and over) and the overall population decline. Japan aspires to do so through policies that are designed to restore financial sustainability for the country’s social security system, including the medical care and long-term care insurance systems.

Unami argues that Japan must simultaneously pursue a combination of increased tax revenues, reduced benefit growth, and accelerated economic growth. He notes that these three-pronged efforts require action in five areas: review Japan’s pension policies; reduce the scope of insurance coverage in low-risk areas; increase the effectiveness of health service providers; increase a beneficiary’s burden according to their means; and enhance policies for preventive health care for the elderly.

The aging of our world’s population is a defining issue of our time and there is pressing need for research to inform policies intended to improve the financial well-being of present and future generations. The articles collected in the Financing Longevity special issue and the ongoing work by APARC’s Asia Health Policy Program point to multiple areas ripe for such future research.

View the complete special issue >>

Learn more about Dr. Karen Eggleston’s work in the area of innovation for healthy aging >>

Sarita Panday’s personal and professional journey from a childhood in a small village in Nepal to an academic career that has taken her across the globe to Australia, Europe, and now Stanford is a story that speaks to the power of education as a life-transforming and world-changing force. Sarita is our 2018-19 postdoctoral fellow in Asia health policy and her research focuses on improving maternal health service provision in Nepal.

The Asia Health Policy Postdoctoral Fellowship is offered annually by APARC’s Asia Health Policy Program (AHPP). On May 1, Sarita will present her research at a seminar cosponsored by AHPP and the Center for South Asia. We caught up with Sarita to learn about her work, the state of maternal health and education in Nepal, and what’s next for her career.

Q: Your research interests include health service delivery and human resources for global health, and your PhD project explored the role of female community health volunteers in maternal health service provision in Nepal. What is the state of maternal health in Nepal? How does it compare to other areas in South Asia?

While substantial progress in maternal health has been achieved over the last two decades, Nepal still has high rates of maternal deaths compared to its neighbouring countries. According to UN estimates, maternal mortality ratio (number of deaths due to pregnancy-related causes per 100,000 live births) is one of the highest in Nepal (258) compared to India (174), Bangladesh (176), Pakistan (176) or Sri Lanka (30).  Maternal deaths in Nepal’s rural areas are three times likely to be higher than in urban areas. Therefore, my research focuses on improving maternal health status in rural area.

Q: Tell us about your current research: What questions/problems you're exploring? What are some of the findings your work has revealed?

As the 2018-19 Asia Health Policy Postdoctoral Fellow at APARC, I am currently working on publications based on my PhD, which focused on improving healthcare for marginalized women in rural Nepal. My next paper, forthcoming in PLOS One, explores the underuse of healthcare services among Nepal’s marginalized communities. In this paper, I analyze the factors that hinder use of healthcare by certain ethnic groups such as Dalits (the lowest group within the Hindu caste system), Madhesi (people living in the southern plains of Nepal, close to the border with India), Muslim, and Chepang and Tamang (indigenous groups in hill villages). These ethnic groups face barriers to health service use that include lack of knowledge, lack of trust in volunteers, traditional beliefs and healthcare practices, low decision-making power among women, and perceived indignities experienced when using health centers. Therefore, community health programs aimed to improve healthcare use among such populations should consider these specific contextual elements along with health system factors.

My next manuscript (in preparation) focuses on the importance of paying community health workers, which is also one of the key findings of my PhD. I found that women volunteers appeared to be highly dissatisfied by the lack of financial incentives for their services and wanted remuneration. This finding contradicts previous claims that reported community health volunteers were happy with their status. I have just finished a first draft of the manuscript and will soon send it for review.

Apart from my fellowship at Stanford, I am volunteering to form a team of interdisciplinary researchers to improve maternal and child health among marginalized communities in Nepal. I am doing this as part of my role as an honorary research fellow in the Department of Politics at the University of Sheffield, where I also earned a PhD in public health. I recently organized a workshop in the UK to leverage partnerships across universities and the local NGO PHASE Nepal. During the workshop, I shared my experience of using participatory approaches (such as participatory video methods and policy workshops) to connect communities with policymakers, and I plan to use similar participatory approaches in my future research. The workshop successfully generated support from colleagues and the local partner.

Q: Your personal and professional journey has taken you from growing up in rural Nepal to pursuing a doctorate in Britain and now a postdoctoral fellowship at Stanford. How would you describe the situation of Nepal’s higher education system, and the demand for foreign education in the country? What are some of the lessons you have learned throughout your own years of international education?

Although Nepal has a long history of education, the current formal education system was formed only in 1951, after the establishment of democracy. In the short period since then, Nepal has made substantial progress in adult literacy rate (from 20.6 % in 1981 to 64.7 % in 2015), but the quality of the public education system remains questionable, with low opportunities for employment. There has been some improvement since the beginning of technical education as a formal sector in 1980: the Ministry of Education, Science and Technology is responsible for education in Nepal and there are currently a total of nine constituent universities with 90 affiliated universities and 1012 campuses. However, the quality of education in Nepalese universities is often controversial due to their being a playground for major political parties. And despite the government’s promises to increase its spending on public education the education budget appears to be cut each year.

As for my own experience, I graduated with a BSc Nursing degree in Nepal without realizing that I wouldn’t get a placement within the public sector. The government hasn’t yet created a position for graduates like me, which forced me to seek a job in the private sector. While I managed to find a well-paying if strenuous job in remote Nepal, I saw many colleagues who struggled to find jobs that matched their qualifications. Some of them worked voluntarily or in low-paying positions. While the Nepalese government continues to produce graduate nurses there’s no system to retain them, despite a severe scarcity of human resources for health.

Q: What's next for your career? What issues are you going to focus on in your upcoming research project?

I have recently been appointed as a Global Challenge Fellow at the University of Sheffield to work on a two-year research project in Nepal. Starting this July, I will work with rural women in two Nepalese districts (Dhading and Sindhupalchok), conducting participatory co-designed research aimed to raise awareness and understanding of the social, cultural, economic, and political factors that hamper women’s access to healthcare services. I plan to use participatory approaches, such as participatory video methods and policy workshops, to connect communities with policymakers, and to partner with PHASE Nepal to improve utilization of healthcare among the country’s marginalized populations.

I’m excited to share my work with the Stanford community in an upcoming seminar on May 1, and hope to see many friends and colleagues there.

Register to attend Sarita's seminar >>

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Fourteen years ago, Stanford Health Policy’s Douglas K. Owens and colleagues published a cost-effectiveness analysis that would change the face of HIV prevention. Their landmark study in The New England Journal of Medicine showed that expanding HIV screening would increase life expectancy and curb transmission of the disease — and was cost effective in virtually all health-care settings.

Not long after their model-based results were published, their findings became key evidence in the decision to expand screening by the Centers for Disease Control and Prevention. Their work has been used in HIV screening guidelines from the U.S. Preventive Services Task Force — which Owens now chairs — the American College of Physicians and the Department of Veterans Affairs, among others.

Owens and his Stanford colleague Margaret Brandeau, professor of management science and engineering, have led this team of decision scientists who have been at the forefront of developing scientific models for the screening and prevention of HIV for two decades now. This modeling team — which also includes colleagues from UCSF and Yale — has published nearly 250 peer-reviewed studies and is one of the most experienced and respected in the world.

But today, the opioid epidemic is threatening the hard-fought gains in the prevention and control of HIV and hepatitis C virus (HCV). In support of their continued work to address the opioid epidemic, Owens received a highly prestigious MERIT award from the National Institute on Drug Abuse (NIDA),which provides up to 10 years of funding for the team.

“We are extremely grateful to NIDA for this support and to our colleague at NIDA, Dr. Peter Hartsock, who has worked with us for over 20 years to mitigate the harms from HIV and HCV,” said Owens.

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The team will now turn its sights on the complex interplay of the opioid epidemic, and HIV and hepatitis C virus (HCV) transmission. The transmission of HCV has been fueled by the opioid epidemic, and HCV now kills more Americans than all other infectious diseases combined.  

“The unfolding opioid epidemic is a defining challenge for the public health and medical systems in the United States,” Owens, the principal investigator of the team, and his colleagues wrote in their grant proposal. “The reversal of life expectancy growth in the demographic groups most affected by the opioid epidemic represents the aggregation of a complex web of harmful public health and population trends, including a rise in overdoses, suicides, mental health afflictions, economic disadvantages, and infectious disease outbreaks.”

Indeed, for the first time since the 1960s, the U.S. life expectancy has contracted for the second year in a row; drug overdoses have been the leading cause of death for Americans under age 50, with an estimated two-thirds of those deaths resulting from opioids.

Since the last renewal of their NIDA-funding grant in 2013, the team has watched the dramatic rise of opioid overuse, injection drug use, and overdose become a national public health crisis, with more than 60,000 drug overdose deaths in the United States reported by the CDC.

“The growing use of needle-based opioids increases the likelihood of accelerating HIV and HCV transmission,” said co-investigator Jeremy Goldhaber-Fiebert, an associate professor of medicine and core faculty at Stanford Health Policy. “Identifying the best combination of approaches to reduce HIV and HCV transmissions stemming from the opioid epidemic is of critical public health importance.”

The other co-investigators on the team of the project, “Making Better Decisions: Policy Modeling for AIDS and Drug Abuse,” are:

1. Eran Bendavid, an infectious diseases physician and associate professor of medicine at Stanford who is another a seasoned HIV modeler and outcomes expert;

2. Keith Humphreys, professor of psychiatry and behavioral sciences at Stanford and a former senior policy advisor in the White House Office of National Drug Control Policy; 

3. David Paltiel, a Yale School of Public Health professor who pioneered policy options for mitigating the impact of HIV in the United States and abroad;

4. Gregg Gonsalves, an assistant professor of epidemiology at Yale and a 2018 MacArthur Foundation Fellow who will focus on developing new algorithms to detect and predict opioid-related outbreaks of HIV and HCV;

5. James Kahn of the Institute for Health Policy Studies at UCSF, professor of epidemiology and biostatistics and an expert on the individual and population impact of prevention and treatment for HIV, HCV and opioid use.

The End of AIDS? 

Toward 2012, a series of scientific advances led to calls for “the end of AIDS.” The two big factors were the cost of the “triple cocktail” of antiretrovirals plunging in developing countries and then huge donations from wealthy countries began pouring in to fight the disease.

Yet the researchers say successes have been too few and that the incidence of HIV remains far too high. About 40 million people were living with HIV around the world in 2017; an estimated 940,000 people died from AIDS-related illnesses that same year.

The year 2015 marked the first time in two decades that the number of HIV diagnoses tied to opioids increased.

"Although it was started by prescription opioid overprescribing, the epidemic has evolved to include significant injection opioid use which is now threatening to significantly increase the spread of infectious diseases like HIV and Hepatitis C,” said Humphreys.

The most visible example of an opioid-related HIV outbreak took place in Scott County, IN, in 2014-2015. A single infection introduced into the community resulted in nearly 200 new HIV cases within six months, largely related to oxymorphone injections. In 2017 and again in March 2018, two additional substantial outbreaks occurred in Scott County, likely linked to both risky sex and needle sharing. 

In addition, the CDC has identified 220 counties in 26 states that are uniquely vulnerable to HIV and HCV outbreaks related to opioid injections.

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“Developing models that forecast high-risk areas for HIV and HCV is essential for aligning surveillance and public health interventions with risk,” said Brandeau, a leader in designing models for the prevention of HIV and hepatitis, especially in drug abuse disorders.

There have also been striking increases in the injection of opioids and heroin that are closely linked to the spread of viral hepatitis. In the demographic areas most affected by opioids, the researchers found, diagnoses of acute hepatitis have more than quadrupled — reversing trends of the previous decade. And in the country as a whole, the number of new HCV cases has nearly tripled since 2010. 

“For any type of contact with an infected source such as a dirty needle, or even cocaine straws, HCV is by far the most rapidly transmissible of the blood-borne infections,” said Bendavid. “One of the challenging issues with hepatitis C is that its major health manifestations do not appear for many years after infection."

What’s the Plan? 

In the next five years, the team intends to evaluate how strategies to prevent and mitigate the harms of opioid use can decrease the spread of HIV and HCV and thereby reduce morbidity and mortality from opioid use. They have four specific goals: 

1. Model the effect of the opioid epidemic on transmission of HIV and HCV.

2. Model the epidemiological and population impacts of individual strategies to prevent and mitigate the harms of opioids and drug injection on HIV and HCV outcomes by evaluating prevention strategies;

3. Model the epidemiologic and population impact of portfoliosof strategies to mitigate the harms of opioid use and drug injection on HIV and HCV outcomes;

4. And model the impact of barriers to implementation of effective strategies to reduce the harms of opioid use on HIV and HCV.

“We will perform novel analyses assessing intervention impacts singly and in combination assessing outcomes for HIV, HCV and opioid use disorder,” the researchers wrote in their grant proposal.

Then, the researcher will model new methods for building complex multi-intervention and multi-disease models and developing adaptive testing algorithms for identifying outbreaks.

Finally, the team intends to assess the barriers and intervention approaches “that more realistically reflect implementation issues than current models and hence identify resource needs for system planning.”

Medicare made $70 billion in payments to physicians in 2017 for care they provided to the 44 million Americans covered by the federal health-care program.

Who decides how much a physician should be reimbursed from Medicare for their services?

Medicare has depended on a committee convened by the American Medical Association known as the Relative Value Scale Update Committee (RUC) since 1992. The RUC has been called the most important health care committee you’ve never heard of.

The RUC has 31 members, most of whom come from the major specialty societies, such as the American Academy of Orthopedic Surgeons and American Association of Neurological Surgeons. By estimating the time and effort physicians take to perform thousands of different services, the RUC assigns “values” to each service that determine how much physicians are paid for delivering it. 

The RUC has come under heavy criticism in health policy circles for its influential role in setting payment levels. But its performance and methods have never been closely studied.

So Stanford researchers David C. Chan and David Studdert — both core faculty members at Stanford Health Policy — set out to evaluate how well the RUC was doing. The researchers analyzed one critical ingredient of the valuation process: how long services take to perform.  They compared the RUC’s estimates of the duration of 293 common operations to “benchmark” times for the same operations, obtained from actual surgical cases recorded in a large national database.

The study, published in The New England Journal of Medicine, found substantial discrepancies between the RUC’s time estimates and the benchmark times. But Chan and Studdert also found that the RUC did not show a systematic bias; times were as likely to be overestimated as they were to be underestimated.  

The research team, which also included Johnny Huynh, a PhD student in economics at UCLA, then characterized inaccuracies, quantified their effect on physician revenue, and examined whether re-review by the RUC corrected them.

“The inaccuracy of the RUC’s estimates for some procedures times was quite large,” said Chan, a faculty fellow at the Stanford Institute for Economic Policy Research and staff physician at the Veterans Affairs Palo Alto Health Care System. “The best way we could think of to indicate how large was to convert them into clinical revenue, and see how the inaccuracies affected different specialties.”

The study estimated that orthopedic surgeons and urologists received higher payments than they would have if benchmark times had been used — $160 million and $40 million more, respectively, in Medicare reimbursements over a five year period. Whereas cardiothoracic surgeons, neurosurgeons and vascular surgeons received lower payments — $130 million, $60 million, and $30 million less, respectively — during the same period.

Yet the researchers did not find evidence that inaccuracies stemmed from systematic bias.

“There was already an awareness that the RUC was missing the mark on some of its time estimates. Our study reinforces that inaccuracy story,” said Studdert, a professor of medicine and law. “But the prevailing view is that RUC uses times that are systematically longer than the truth, and we just don’t see that.” 

The study concludes nonetheless that reform is still needed, because the time discrepancies are large and have substantial effects on payment allocations. It points to two policy reforms that have the potential to improve the accuracy of service valuations by the RUC: 

1. Use larger and more reliable sources of data for the time estimates;
2. Enhance the real-time accuracy of the valuations by monitoring such data sources for substantial changes in the duration of procedures and using this information to prioritize procedures for re-review.

“I believe that the RUC has moved in this direction recently, and I suspect that there would be a fairly general agreement that the process could be improved by going further and using more and better data,” Chan said.

The researchers now intend to turn their sights on another aspect of physician payment policy: the perception that the RUC methods lead to underpayment of primary care physicians.

“The biggest criticism of the RUC over the years is the allegation that it systematically undervalues the work of primary care physicians, relative to surgeons,” Studdert said. “Now that we have developed method for benchmarking the RUC’s accuracy, we’d like to redeploy it on this primary care versus surgical care issue.”

Drug companies and medical device manufacturers have long cultivated ties with physicians and hospitals in an effort to promote their wares. This has led to some suspicion that patients may end up with prescriptions for drugs they don’t need or devices they don’t want.

So the federal Centers for Medicare & Medicaid Services established the Open Payments database — required under the Affordable Care Act — which allows patients to discover whether their physicians or hospitals have any financial ties with drug or device companies.

It is designed to give the public a more transparent health-care system, though as the website notes, all information on the Open Payments database is open to personal interpretation.

"Transparency has become a very vogue strategy in U.S. health policy,” said Stanford Health Policy’s Michelle Mello. “Information disclosure requirements are being used to do everything from curbing overeating to helping patients decide where to have their heart surgery.”

Mello, a professor of health research and policy at the School of Medicine and professor of law at Stanford Law School, and her colleagues wanted to understand whether the Open Payments system is achieving its goal of helping patients make more informed decisions.

In a new study published by JAMA Network Open, the researchers found an unintended consequence of the public disclosure system: It may have diminished trust in even those physicians who never received payments from drug or medical device firms.

Lack of Public Trust

The authors’ survey of 3,500 respondents found that public disclosure of payments was associated with a 2.7% decline in trust in one’s own physician regardless of whether the respondents knew their physicians had received payments. In fact, the authors note, fewer than 5% of U.S. adults report knowing about their physicians’ industry payments or using the Open Payment website.

“Doctors might consider that unfair because people reported diminished trust even though most of them had no idea whether their doctor took industry payments or not,” Mello said. “About two-thirds of physicians receive industry payments, so what we’re seeing is a kind of spillover reputational damage to the one-third who don’t.”

Mello said she and her co-authors — Genevieve P. Kanter of the University of Pennsylvania, Daniel Carpenter of Harvard University and Lisa Lehmann of the National Center for Ethics in Health Care in the Veterans Health Administration — were surprised by their findings.

“Why would trust go down if few people are using the Open Payments data?” Mello asked. “We think that the large amount of media publicity about the Open Payments law — which has described drug companies’ financial influence as pervasive and highlighted extreme cases of physicians taking very large payments — may have changed how people think about the trustworthiness of the medical profession as a whole.” 

Pharmaceutical companies for decades have engaged physicians through a variety of kinds of financial relationships. Grants for company-sponsored research constitute the largest expenditure, but consulting fees, honoraria for giving lectures, providing meals, covering travel expenses, and giving small gifts are also common activities. Physicians may also have investment interests in drug and device companies.

“However, the nature of these relationships and the magnitude of the dollars flowing from companies to physicians have largely been opaque to the public,” the authors wrote.

The Policy Implications

Trust is a crucial element of the physician-patient relationship affecting many aspects of patient behavior and sentiment that ultimately affect health, the authors said. For example, trust in one’s physician is associated with “whether patients follow treatment recommendations, how well they self-manage chronic conditions, and whether they seek preventive care.” Further, the authors wrote, “Trust in the medical profession may affect the public’s views of scientific authority and medical research, which may influence patient adherence and health-promoting behaviors,” they wrote.

The researchers suggested institutional policies should be implemented by hospitals and physicians to help patients understand what these payments represent. Some kinds of payments, such as an honorariumfor serving as a paid speaker for a drug company, are more concerning than, say, research grants. But many patients may not be able to distinguish between the two.

“Pharma-free physicians might consider advertising that status to current and prospective patients, or health plans could include a marker for that on their `Find a Physician’ websites,” Mello said.

Finally, she said, patients should look up their doctor and if they see any payments they find concerning, ask their doctors about them.

“Seeing whether the payments pass the `red-faced test’ in these conversations should be illuminating,” Mello said.

Stanford Health Policy’s Douglas K. Owens was named chair of the U.S. Preventive Services Tasks Force, an independent panel of national experts in prevention and evidence-based medicine that makes health-care recommendations to Congress and the American public.

Owens, the Henry J. Kaiser, Jr. Professor at Stanford University and a general internist at the VA Palo Alto Health Care System, is also a professor of medicine, health research and policy, and management science and engineering at Stanford. He is the director of the Center for Health Policy in the Freeman Spogli Institute for International Studies, where he is also a senior fellow, and the Center for Primary Care and Outcomes Research in the Department of Medicine.

“The goal of the Task Force is to help people live longer and healthier lives,” said Owens. “We aim to bring the best science about prevention to our guideline recommendations on more than 70 preventive services, including screening, behavioral counseling and preventive medications."

Owens noted that the Task Force guidelines — unbiased, independent assessments of the benefits and harms of preventive services — impact virtually every primary care patient in the country. From statins, mammograms and cervical cancer screening, to depression, HIV screening or cardiovascular disease, the 16 volunteer members of the Task Force weigh all the medical evidence to determine the safest course of action from adolescence to old age.

A guideline this January about perinatal depression, for example, was highlighted in this New York Times article. Depression hits one-in-seven women during and after giving birth, prompting the Task Force to recommend that clinicians refer at-risk women to counseling, specifically cognitive behavioral or interpersonal therapy.

“I am delighted to congratulate Dr. Owens on his appointment as chair of the Task Force,” said Susan J. Curry, a distinguished professor in the Department of Health Management and Policy at the University of Iowa. “Over the years, he has brought invaluable expertise in evidence synthesis, clinical decision-making and modeling — all critical to the methods we use to develop evidence-based recommendations.”

Some other recent recommendations by the Task Force include that men aged 55 to 69 talk to their doctors about prostate cancer screenings; patients at high risk of HIVshould take a daily preventive drug; and that adults aged 50 to 75 be screened for colon cancer. 

Each year, the Task Force makes a report to Congressthat identifies critical evidence gaps in research related to clinical prevention services. It recommends priority areas that deserve further explanations, all of which are made public on the Task Force website for public comment.