Reform Update: PCORI to award $300 million for research

The organization created under the healthcare reform law to test the comparative effectiveness of treatment options is about to open the flow of money going to research projects.

The Patient-Centered Outcomes Research Institute intends to award $300 million in broad funding, targeted funding and infrastructure awards before the end of this year, making a total of $418 million in 2013.

One of the projects will be the first recipient of targeted funding directly overseen by PCORI. The researchers, to be named in December, will assess treatment options for African Americans and Hispanics with severe or uncontrolled asthma. (A targeted funding award made in June, studying fall-related injury prevention strategies, shares oversight with the National Institute on Aging.)

Dr. Joe Selby, the institute's executive director, said PCORI is putting $17 million toward understanding how biological differences can affect how certain asthma medications work, as well as whether current guidelines adequately address the need for different medication combinations for African Americans and Hispanics.

“Severe asthma is more common in these populations,” Selby said, noting that the severity can lead to higher hospitalization and mortality rates.

About $100 million will support efforts to improve the methods for conducting comparative effectiveness research, and $68 million is queued up for clinical data and “patient-powered” research networks.

The modest increase next year in reimbursement rates for inpatient services in hospitals is not enough to address the rates of rising hospital costs and is a credit negative for not-for-profit hospitals, according to Moody's Investors Service.

The CMS this month said that the rate would increase by 0.7% in 2014, which is significantly lower than the 2.8% increase in 2013. Hospital costs next year are expected to grow by 2.5%.

The boost “is materially below the pace that hospital costs are rising,” Moody's analysts said in an Aug. 15 weekly credit outlook. “Moreover, hospitals are facing countless other strains that are suppressing revenue growth and profitability.”

Moody's cited several pressures that hospitals face outside low Medicare rate increases, such as sequestration cuts of 2% to Medicare payments, minimal rate increases from private and Medicaid payers, and patient decisions to postpone or defer elective care.

So-called “young invincibles” may make up a much smaller number of young adults in the U.S. than previously expected.

The Commonwealth Fund surveyed 19- to 29-year-olds who were offered health insurance through an employer. For the young adults who chose not to enroll in an employer's health plan, 81% said they either received coverage through a parent, spouse or partner or they couldn't afford the premiums.

Five percent said they declined health coverage because they felt like they didn't need it.

“There is a stereotype that young adults believe they are 'invincible' and don't want or need health insurance,” Sara Collins, vice president for affordable health insurance at the Commonwealth Fund and the study's lead author, said in a news release. “This survey shows that is a myth—a typical uninsured young adult is from a low- or middle-income family and works a low-wage job. In general, young adults value health insurance but cannot afford it.”

Follow Jaimy Lee on Twitter: @MHjlee