The Berkeley Center for Health Technology (BCHT) promotes the efficiency and effectiveness of health care through research and education on the development, insurance coverage, payment, and appropriate use of medical technologies.
The focus of BCHT is on biopharmaceuticals, implantable medical devices, insurance benefit design, and payment methods. Research initiatives include leadership roundtables, case studies of leading organizations, and econometric analyses of public and private data sources. Educational initiatives include courses and workshops for Berkeley students in public health (MPH), public policy (MPP), and business management (MBA), plus programs for executives and professionals in the health technology and service sectors.
Our success will be measured by the extent to which we help our stakeholders create a health care system of which we all can be proud, one that combines innovation and entrepreneurship with economic efficiency and social fairness.
BCHT is powering into 2016 with our strongest-ever portfolio of research projects, nicely supported by generous grants and an expanding team of researchers. Research foci include the impact of reference-based insurance benefit designs; physician-hospital alignment and the subsequent costs of care; design of consumer cost sharing for specialty drugs; and physician payment incentives for oncology. We are winning awards for our publications and adding to our on-campus and off-campus educational initiatives. Kim MacPherson is adding some new classes in the biotech domain to what she currently teaches at the Haas School of Business Graduate Program in Health Management We are recruiting Chris Whaley as Assistant Professor of Health Economics, deepening our strengths in econometrics, machine learning, and related skills.
Research, Extramural Funding, and Publications
Our econometric research continues the analysis of the impact of reference pricing on choices made by patients, and the resulting influence on prices consumer out-of-pocket payments, employer spending, and clinical outcomes. In the past year we have published articles on reference pricing for joint replacement in Health Economics, for arthroscopy of the knee and shoulder in the Journal of Bone and Joint Surgery, and for colonoscopy in JAMA Internal Medicine. The colonoscopy paper won the Director’s Award at the 2015 AHRQ (US Agency for Health Care Research and Quality) Research Conference, and we have submitted it for consideration to additional prize contests. We have articles under publication review that analyze reference pricing for in vitro laboratory tests and for advanced imaging procedures such as CT and MRI. These studies are supported by the Robert Wood Johnson Foundation, CalPERS (California Public Employees’ Retirement System), and AHRQ. We are launching a study of reference pricing for oral pharmaceuticals, using claims data from the RETA Trust, an alliance of Catholic organizations that combine their purchasing power for health insurance for their employees.
Research on reference pricing in the CalPERS system, funded by AHRQ, is ongoing. Currently we are examining the impact of reference pricing on complication rates for hip and knee replacement surgery, the impact of reference pricing on complication rates for cataract surgery, the response of provider pricing to the CalPERS reference pricing initiative, patterns of variation in consumer payments across the various categories of procedures that are subject to reference pricing, and the varying impact of reference pricing across the distribution of market prices.
A project funded by the Laura and John Arnold Foundation extends our work on the CalPERS reference pricing program to examine the potential effects of implementing the same program in other markets.
This project uses data from the Health Care Cost Institute, which consolidates claims from Aetna, Humana, and United Healthcare. The HCCI study quantifies the potential impact of reference pricing on national spending for selected procedures, using the behavioral responses measured using the CalPERS data in California. Within California, we identify the market characteristics that drive the effectiveness of the CalPERS program and then use the HCCI data to identify the same market characteristics across the United States. We find that the same price variation and market concentration that drives the effectiveness of the CalPERS program exists in nearly every other local health care market. For colonoscopies, we estimate that RBP can lead to an approximately 8.5% savings per procedure, which amounts to a savings of approximately $95 million per year if applied to all payers in the HCCI data.
We are complementing these consumer-focused analyses with a new study of market structure and pricing, using data from Anthem Blue Cross and funding from CalPERS. This project will address the question of whether physician employment and alignment with hospital systems may lead to price increases that overwhelm the potential cost reducing effects of care coordination. This study will serve as an entry point to a larger partnership with the national Blue Cross Blue Shield Association (BCBSA), which has approached BCHT with the offer of cost-free use of its claims data warehouse, covering 40 million commercially enrolled individuals. This partnership will facilitate studies of benefit design, provider payment, network contracting, and variation in the price and use of particular services.
We continue to view qualitative case studies as an important complement to the quantitative econometric analyses. In collaboration with staff members at Covered California, the state’s public health insurance exchange, I recently conducted a case study of the organization’s redesign of coverage and cost sharing for high-cost specialty drugs. This initiative was important in significantly reducing cost sharing and what we refer to as ‘financial toxicity’ for members with complex conditions such as multiple sclerosis and cancer, while still remaining within the legislatively mandates to not increase insurance premiums. The paper has won the PAN Foundation research paper award and will be published in the American Journal of Managed Care. I currently am writing a case study paper of innovations in physician payment methods for oncologists using high-cost infused and oral cancer drugs, solicited by the European Journal of Cancer Policy
Peer-reviewed journals remain the central mode of distribution for our ideas and research findings, but BCHT also strives to bring our work to the attention of larger audiences through op-ed pieces, such as a piece in the Los Angeles Time on coverage expansion; online blogs, such as a piece in the Health Affairs blog on reference pricing; and issue briefs, such as the HCCI issue brief on variance in pricing for colonoscopy.
The campus mission of BCHT is to expand technology-related policy and management topics available to Berkeley students, both through new courses and through guest lectures in existing courses. Most exciting in this domain have been a pair of new courses developed by Kim MacPherson at the Haas School of Business, covering strategy and finance, respectively, for the biopharmaceutical industry. My technology policy course at the School of Public has expanded to include content on market access, insurance coverage, and pricing in Europe as a complement to its traditional focus on the US market.
Campus educational initiatives naturally extend to professional educational opportunities off campus. Kim and I have led day-long and half-day sessions this past year in Basel and Paris, and have plans for similar sessions this coming year in Milan. In January, Kim keynoted a three-day conference on innovation at the Universidad de Concepcion in Chile, covering the cultural, institutional, and educational drivers of biomedical innovation in the United States and its applicability to the Chilean market. I led a plenary session on US and European pharmaceutical innovation and co-led a course on the economics of diagnostics at ISPOR in Italy in November.
On-campus and off-campus educational initiatives have come together in a student-led but professionally-judged design challenge to improve diabetes prevention and care using digital technologies, led by Kim MacPherson with support from the Anthem Foundation. The design challenge is a key element in a larger effort funded by the Anthem Foundation to assess the surge of innovation around diabetes prevention and management and understand whether the investment dollars and entrepreneurial efforts are making a difference.
And of course we all give numerous presentations at academic, insurer, pharmaceutical, employer, provider, and policy meetings throughout the United States. I have given talks related to my book Purchasing Medical Innovation at an investor conference in Boston, an investment bank in Manhattan, a Blue Cross plan in upstate New York, an employer alliance in the San Francisco region, a specialty orthopedic hospital in southern California, and other venues. Kim has led workshops on environmental trends, disruptive innovation, financial analysis, digital health, and health care politics both as part of provider leadership programs and for various health systems and universities in San Francisco, Sacramento, and Atlanta, among other venues. Tim Brown and Chris Whaley presented research at the American Society of Health Economics (AHSEcon), AcademyHealth, and conferences sponsored by HCCI and AHRQ, among other venues.