Category: Health Policy

Aug
12

REAL innovation in healthcare

Posted by Joe Paduda on Friday, August 12th, 2016 | Comments

What do these have in common?

Duexisis.

Valent.

Martin Shkreli

Mylan.

Answer – they are all on the leading edge of healthcare innovation.

More precisely, these examples show there’s no need to create really new products, develop new medicines, figure out how to keep people healthier longer, when you can just raise prices on your current product.  A lot.

Duexisis is just ibuprofen combined with an acid reducer, creating a brand medication that sells for about 50 times what it should.  Yep, you can just buy Advil and Pepcid instead of breaking your bank enriching Horizon Pharmaceuticals.

Valeant has made a business out of buying generic manufacturers and other pharma companies and jacking up the price of their medications, a practice that has earned the company the attention of the Department of Justice, presidential candidate Hillary Clinton, and the US House of Representatives.  Oh, its stock price has gotten hammered of late due to some of these issues.

Shkreli is the brilliant and totally tone-deaf former hedge fund exec who discovered it’s a lot easier to make billions by buying little-used drugs made by one company than raising the price by, oh, say 6000 percent.

Mylan makes Epi-pens, the life-saving devices used to prevent deadly allergic reactions. Altho late to the “let’s just increase the price by a gazillion dollars for our poorly designed device cuz people who need it HAVE to buy it” game, they’re making up time quickly. Mylan raised the price by 6 to 9 times recently, causing problems for paramedics, families with kids with deadly allergies while jacking up their profits.

There are many, many more examples, but you get the point.

For anyone looking to assign blame for our ludicrously high cost of health insurance and pathetically poor outcomes, there are plenty of convenient culprits; HMO executive salaries, mandated benefits under ACA, specialty physician income, device manufacturers, hospital inefficiency, stupid and counterproductive HHS regulations, legislators who bow before the PHARMA lobby, physicians who refuse to wash their hands.

But it all gets back to this – the US health care “system” is based on a capitalist ethos, one where the shareholder and profits are God.

These companies and people do this stuff for a very simple reason – because they can, and they are rewarded for doing so.  There’s no reason to spend millions innovating when you can make billions just by raising prices for your product or service.

What does this mean for you?

Reality sucks.

Jul
29

Details matter.

Posted by Joe Paduda on Friday, July 29th, 2016 | Comments

Someone who doesn’t do what you do may think it looks pretty simple.

Carpenters look at a house and see detailed planning, careful material selection, precise measuring, and skilled craftsmanship because they know what it takes to build a strong, sturdy, attractive, functional home. They are experts due to years of experience and hard-earned lessons and mentoring by their elders.

Me? I see walls and a roof. Building looks simple to me; get some lumber, nails, and tools, plus some other building stuff like shingles and wire and concrete, and start slapping stuff together.

Which house would you want to live in?

The same is true for any profession – teaching, medical bill processing, hitting a golf ball…right? Professionals – and we are all professionals in our chosen vocations – understand the complexity in what they do, while outsiders tell us it looks simple to them.

I’m thinking about the Presidential candidates’ positions on health care and health care reform.  Trump wants to “rip out Obamacare root and branch” and replace it with something much “simpler”.

In general, Trump’s calling for:

  • allowing insurers to sell health insurance across state lines
  • repealing the individual mandate
  • requiring insurers to cover anyone regardless of their pre-existing condition.

Sounds great…you don’t have to buy health insurance until you really need it, but the insurance companies still have to sell it to you even if you need a heart transplant or new kidney or are having premature triplets.  (We discussed the across state lines thing here)

Here’s where those “details” matter.

What will insurance companies do if they are required to cover people who don’t need to buy insurance until they get sick?

They have two choices – go bankrupt or stop selling insurance to individual sand families.

What do you think they’ll do?

Of course they will stop selling health insurance to individuals.  When that happens, the Paduda family, and most of the other 11 million folks insured thru the Exchanges will find themselves with no health insurance and no one to buy it from.

Then what?

Here’s the point. We live in an amazingly complex world, one where there are NO simple solutions.   I know, simple solutions are really appealing, but “see the ball, hit the ball” only works until you step up to the plate, when it gets a whole lot more complicated.

If health care reform was easy, it would have been done decades ago. It’s messy, complex, and there are no simple solutions where everyone wins. It requires consideration of the “what then” issues. When you move one lever, it triggers a whole bunch of reactions that, if not anticipated, will create way more chaos.

Yes, the ACA is messy and needs fixing. Yes, we need our politicians to engage, debate, argue, and work it out. What you and I do NOT need is a sound-bite solution that is NO solution at all.

What does this mean for you?

If you think health care is a mess now, can you imagine what it would look like if people could wait to buy insurance till they were sick, and insurers had to either sell it to them or stop selling insurance altogether?

It would look like this

San_bernardino_Train_Disaster_2a

Jul
7

You broke it, you own it.

Posted by Joe Paduda on Thursday, July 7th, 2016 | Comments

A bill before the US House and Senate would have required physicians and pharmacists to check state databases before prescribing or dispensing opioids.

All available research shows this is the single most effective step to reduce opioid abuse and kill fewer people.

Now, thanks to “doctors and pharmacists groups”, that requirement has been stripped from the bill.  What’s left is some – but nowhere near enough – money for treatment and the hope that, against all evidence to the contrary, docs who are writing the scripts that are causing the opioid disaster will take the time to check the databases before they write the script.

Not going to happen.

I am sympathetic to the claim that mandatory Prescription Drug Monitoring Program (PDMP) checking can be time-consuming. States have to do a better job of figuring out how to streamline the process while protecting patient confidentiality – and many have done so.  Moreover, the four states with mandatory PDMPs have figured it out, and it is working pretty well.

I am a whole lot less sympathetic to the argument that somehow a moment or two of a doctor’s or pharmacist’s time is too much to ask, for the simple reason that these medical professionals’ failure to properly prescribe and dispense opioids is the proximal cause of the opioid public health disaster.

Pretty much every independent research organization studying the issue has recommended mandatory PDMP checking.  Here’s one.

More bluntly, that behavior is killing people, and the lobbying to strip mandatory use of PDMPs shows that’s not that big a deal.

Kentucky, New York, Ohio, and Tennessee all mandate prescribers access PDMPs – and all have seen dramatic reductions in doctor shopping and opioid script volume.

There’s a wealth of supporting data here.  Briefly, here’s what mandatory PDMP use does.

  • after Ohio ER docs checked the PDMP, they changed their treatment plan for 41% of patients; 61% had fewer or no opioids prescribed, 39% had more.  And doctor shopping dropped by over 2/3.
  • In Tennessee, doctor shopping dropped by 50% and the volume of opioid scripts decreased by almost half a million scripts.
  • Kentucky doctor shopping was cut in half, 30% fewer patients received the “holy trinity” drug cocktail, and benzo and opioid scripts dropped significantly.
  • in New York, doctor shopping was cut by 90%, and treatment admissions rose by 20%.

After spending a fruitless hour searching the web for an actual policy statement or testimony regarding mandatory PDMP use by the AMA, my conclusion is the giant medical society wants it both ways.

They don’t want their members to have to check PDMPs, but they don’t want to be public about that opposition.

What does this mean for you?

Refusing to support mandatory PDMP is unconscionable.  At some point an enterprising class-action firm is going to figure out how to make a shipload of money off the intransigence of “doctors and pharmacists groups.”

 

Jun
8

Clinton health plan 2.0, updated

Posted by Joe Paduda on Wednesday, June 8th, 2016 | Comments

Now that Hillary Clinton is the Democratic Presidential nominee, it’s time to delve into her health policy platform.  The quick recap is she is looking to expand and build on ACA, tweaking various parts and pieces to fix legislative errors, incent states to participate, and reduce out of pocket costs. (we discussed this in yesterday’s Blab; you can watch it here.)

Expand Medicaid

Clinton would offer 100% funding for any state that expands Medicaid for at least three years, then tapering down to 90%.  This would likely encourage more states to take the step; Florida and Nebraska are two where elected officials are under increasing pressure to make the move.

Remove the family glitch

A drafting error doesn’t allow taking an employee’s family into account when determining subsidies for insurance bought via the Exchanges.  Clinton would offer tax credits to offset those out of pocket costs for eligible families.  The tax credit proposal is a convoluted way to fix what should be done via correcting the original language.

Allow near-seniors to buy-in to Medicare

More an idea than an actual policy position, Clinton is talking about allowing “people 55 or 50 and up” to voluntarily pay the entire “premium” to join Medicare.  With much to be fleshed out, this looks to be a response to Sen Sanders’ call for free public insurance for all.

This could have some major downstream effects; by removing we older and more expensive people from the privately-insured pool, insurance costs for younger folks would decrease.  This “public” option would also inject competition into areas where there isn’t any due; rural markets in particular could benefit.

Address drug prices

Clinton has several ideas including eliminating the tax deductibility of marketing expenses, setting limits on consumers’ out of pocket costs for prescription drugs, and allowing Medicare to negotiate directly with drug companies.

Most striking is the mostly-unformed concept of forcing drug developers to spend a set amount on R&D, with any additional revenues handed back to the Feds for government research on new therapies. This is intended to address the industry’s argument that research costs demand high prices (an oft-criticized and rather doubtful argument).

Sounds good, but I doubt – very much – if it could be implemented without causing a lot of problems as drug companies quickly figure out ways to game the system.

At some point it may make sense to review Trump’s, but at this point the GOP nominee  has yet to come forth with any coherent health reform plan other than “repeal Obamacare” and sell insurance across state lines.

May
18

Clinton health 2.0

Posted by Joe Paduda on Wednesday, May 18th, 2016 | Comments

Medicare for more, caps on premiums and out-of-pocket spending,

Presumptive Democratic nominee Hillary Clinton’s health plan builds on ACA in several key ways, with an over-arching goals of providing more consumer choice and reduce the financial burden on consumers.

  • a tax credit of up to $5,000 per family to offset a portion of excessive out-of-pocket and premium costs above 5% of their income.
  • incease financial incentives for states to expand Medicaid
  • allow younger seniors to “buy-in” to Medicare

Let’s take these in order.

Tax credit

The Clinton plan’s tax credit is intended to address a growing concern; while premium costs aren’t zooming up (altho 2017 premiums look to be increasing at near-double-digit rates) deductibles, co-pays and coinsurance are becoming increasingly problematic.  The $5,000 tax credit is intended to offset some of these increases, and is coupled with a limit on total insurance and related expenses of 8.5% of family income and a mechanism intended to reduce costs for those earning more than 400% of the federal poverty level. (this last can make a huge difference, as costs for those just under 400% can be a fraction of what those earning just above 400% pay).

The subsidy isn’t limited to lower-income folks, and will certainly increase costs and concerns about affordability. However, indications are that take-up among the more affluent would likely be fairly low – and the subsidy pales in comparison to the favorable tax treatment currently enjoyed by those with employer-based insurance. Notably, there’s effectively a “fade-out” of the impact of the 8.5% cap for the truly affluent just because that 8.5% represents a pretty high figure for those with a lot of income.

Medicaid

Clinton proposes federal payment of 100% of the cost for any state that expands Medicaid for three years (declining to 90% thereafter).  Her plan also includes increased funding for education and enrollment activities for Medicaid-eligibles.

Medicare buy-in

The yet-to-be-finalized plan would allow seniors as young as 50 to buy in to Medicare. If enough seniors chose Medicare, rates for “regular” insurance on the Exchanges would likely decrease as the average age of members would decrease, thereby decreasing expected costs. And, insurance premiums for those seniors buying in would almost certainly be several thousand dollars lower than they can currently get via the Exchange. Clinton contends, with some justification, that adding more consumers to Medicare would reduce overall health care costs.

Medicare’s buying power and regulatory authority gives it much more control over health care price and utilization.  That, plus the sheer number of Medicare recipients, makes it the dominant force in the marketplace.  While providers may balk, many will find it necessary to go along – or lose a substantial chunk of their patient base.

However…Medicare is a mash-up of four separate and distinct parts, with different deductibles, treatment requirements, cost sharing, and treatment limits.  While it is well understood by practitioners, that’s only because it is THE dominant health insurer in every market.  Streamlining and rationalizing the benefit plan would make it much more palatable to under-65s.

Clinton has yet to dive into the details, but given the attention span and appetite for same among the eligible-voter population, those details are going to get attention from a very limited group of health care geeks (your faithful author included).

What does this mean for you?

Depends on whether a) Sec. Clinton is elected; b) the Dems take over the Senate; and c) the Dems make significant inroads in the House.

 

Apr
26

Opioids, spines, and dead people

Posted by Joe Paduda on Tuesday, April 26th, 2016 | Comments

Friend and colleague David Deitz, MD, PhD, was kind enough to provide his perspective on two seemingly-unconnected items in the current issue of the New England Journal of Medicine that are highly relevant for medical providers treating occupational injuries.  Here’s his view:

Deitz – The first is an editorial by Drs. Thomas Frieden and Debra Houry from the Centers for Disease Control (CDC) reviewing the new CDC opioid prescribing guideline. It’s a concise review of what led the CDC to develop the guideline, as well as a clear statement of what CDC hopes to achieve. The money quote is this one: “We know of no other medication routinely used for a non-fatal condition that kills patients so frequently.”

Included in the same issue is one of a regular series of Images in Clinical Medicine – this one entitled Resolution of Lumbar Disc Herniation without Surgery. You don’t need a medical education of any kind to interpret this one – the pair of MRI images beautifully demonstrates a large disc herniation which resolves over a 5-month period. Nothing surprising to students of low back pain, there is abundant literature demonstrating that the best care for the majority of patients with lumbar disc herniation is conservative – maintaining physical activity as much as possible while waiting for the natural resolution demonstrated again in this case.

While I don’t think the Journal editors intended the irony, it’s sobering to think about how many opioids have been prescribed to injured workers over the last 20 years for this condition, and its (often unnecessary) surgical consequences. One of the most common conditions in WC, and a routinely-prescribed medication with potentially fatal consequences. Hopefully, we’re starting to do better.

Paduda – In a related piece, Michael Van Korff ScD andGary Franklin MD MPH summarize the iatrogenic disaster driven by opioid over-prescribing.  Over the last fifteen years, almost 200,000 prescription opioid overdose deaths have occurred in the US, with most deaths from medically-prescribed opioids.

Doctors prescribed opioids that killed well over a hundred thousand people.

Here’s one…

avery

Today, about 10 million Americans are using doctor-prescribed opioids; somewhere between 10% – 40% may have prescription opioid use disorder – they may well be addicted.

Van Korff and Franklin note that 60% of overdose fatalities were prescribed dosages greater than a 50 mg morphine equivalent.

This despite evidence suggesting “neither high opioid dose nor dose escalation improves patient outcomes.”

The authors suggest three immediate steps we can take:

  1. Avoid ill-advised and unplanned initiation of COT (chronic opioid therapy). Don’t prescribe more than 10 pills initially, check the Prescription Drug Monitoring Program database, educate the patient.
  2. Regulators and legislators need to change policies and regulations to reflect what we KNOW about COT and its inherent dangers.
  3. Considerably enhance population surveillance of opioid prescribing and safety.  The FDA should expand its postmarketing surveillance program for long-acting opioids to patients using short-acting versions.

What should you do about this?

  1. Do NOT allow opioids for “herniated” disks.  (I know, easier said than done…)
  2. Require a pre-auth for ALL acting opioid scripts, and all increases in dosage above 50 mg MED.
  3. Wherever and whenever possible, ensure prescribing docs check PDMPs, educate patients, limit initial scripts, complete an opioid agreement.
  4. Educate patients – for those already on excessive dosages, have your nurses contact the patient to educate them on the potentially fatal risk inherent in long-term use of opioids.
Apr
18

ACA – who’s covered now and why it matters

Posted by Joe Paduda on Monday, April 18th, 2016 | Comments

20 million more Americans are covered today than were pre-ACA.  ACA’s insureds are poorer, more likely to be recent immigrants, and much more likely to be Hispanic than the rest of the country.

And for many, their new coverage is the first time they’ve had the “luxury” of insurance. They aren’t scared when a new pain or malady erupts, moms not terrified when a child wakes up with a fever, dads not losing sleep wondering how to pay the doctor’s bill or buy the insulin.

The disparity in coverage between and among ethnic groups, while still present, is narrowing – although black Americans would be doing much better if many didn’t live in states that have refused to expand Medicaid.

Make no mistake, this is very, very big news.

Beyond the much better life for the newly-insureds, the economic and long-term economic impacts are strongly positive.

Identifying and helping at-risk members is the top priority for health plans, community health centers (serving a large portion of the Medicaid community) and ACOs.  The more these providers are able to reduce the severity of chronic medical conditions, the lower their costs will be.  And the healthier, and more productive, their members will be.  And the more they will produce, and the more taxes they will pay.

ACA’s success will be measured over the long term.  Reducing unpaid ER visits reduces hospitals’ costs.  Preventing amputations and blindness among diabetes patients, cuts treatment costs and increases productivity. Keeping Americans healthier decreases first-year costs for Medicare recipients.

Despite the good news, there are two ongoing, knotty, closely-related and so-far unsolved issues. First, premiums in some areas are still too high to be “affordable”. Notably, that’s particularly true in non-Medicaid expansion states, but they’ll come along eventually (although far too late for many of their poorer residents, who will suffer needlessly while pols demagogue).

Second, many plans come with high deductibles, making routine care still problematic for poorer members.

Both will be addressed by health plans fighting for members – their survival, growth, and profitability demands it.

It won’t be tomorrow, and it won’t be pretty; remember we are fixing a broken industry that accounts for almost a fifth of our GDP. Networks will narrow, vertically-integrated delivery systems will get way more efficient, new models will emerge, and the health care system of 2021 will look a lot different than the one we have today.

Tomorrow, a deeper dive into who’s covered now and an examination of the potential impact on workers’ comp.

 

Apr
14

The impact of provider consolidation

Posted by Joe Paduda on Thursday, April 14th, 2016 | Comments

Hospitals, health care systems, large multi-specialty groups – all are getting bigger by buying each other, merging, or snapping up smaller hospitals and physician practices. Providers smart/fortunate enough to be inside these mega-systems enjoy pricing power, strong brand recognition, and the negotiating leverage that goes with that.

Deal sizes are getting exponentially larger; a study by Deloitte indicates the average deal was $42 million in 2007.  Six years later, the average transaction was more than 4 times larger. Two were over $4 billion, and that was way back in 2013.

Last year, 940 transactions closed at a total value of $175 billion.  And it’s not just the mega-mergers that are influencing care delivery and pricing.  Small, “under-the-radar” deals are proliferating as those on the outside increasingly scramble for the crumbs.  Providers unable to join the big plans are pursuing out-of-network services, servicing smaller insurers, and trying to figure out how to remain viable.

Chicago is one such market; already quite consolidated, two of the largest systems, with over 6000 medical providers between them, are fighting to merge despite the Feds’ efforts to keep them apart. These mergers are increasingly coming under scrutiny from both federal and state regulators, as evidence suggests costs in “consolidated” regions are higher than in non-consolidated areas.

Meanwhile, DuPage Medical Group hasn’t been sitting by, closing 16 transactions that doubled it in size to 500 doctors. According to the NYTimes, “many of its acquisitions barely register — eight specialists last month, two small physician groups in February, a handful of doctors joining at a time. But it has been enough that DuPage now has ambitions of going national. Late last year, it teamed up with a private investment firm to provide it with $250 million for its goal.”

This is common everywhere; from Boise to St Louis to Boston to North Carolina providers are joining together, shifting the map or providers from one of thousands of tiny dots of ink to ever-growing Rorschach blotches.

What does this all mean for work comp?

Work comp is a tiny but very profitable line of business – so networks have limited bargaining power.

Prices are considerably higher in highly-consolidated regions; payers that don’t have contracts with the mega-systems must rely on non-contractual ways to address prices and utilization. This is particularly true in the South.

Where your patients get their care matters; a visit to a hospital-based provider costs about twice what the same visit to a privately-employed physician. Employer direction, soft-channelling, and variations thereof are key.

Tracking prices is key; make sure your internal analysts and external vendors are on top of the latest information on service prices.

Most importantly, factor outcomes into your evaluations.  Often the lower cost provider also delivers better outcomes; less use of opioids, better surgical results, faster return to functionality.

This last is key; price is easy to track and report. Outcomes are not.  Yes it’s hard; and yes it’s vital.

 

 

Apr
1

Obamacare – Round Two

Posted by Joe Paduda on Friday, April 1st, 2016 | Comments

Elections have consequences, none more so than this one. With the GOP headed for potentially historic losses in the Senate and House – and another four years of a Democratic-controlled White House and administration, policy makers are working on what some are calling “Obamacare, Round Two.”

That’s the quick takeaway from conversations with several leading Administration officials earlier this week in Atlanta.

After eight years of mostly-failed attempts by the GOP to de-fund, repeal and obstruct the PPACA, the anger at these “obstructionists” is being channeled into both legislative and regulatory initiatives designed to increase coverage, dramatically reduce consumer costs, and expand regulatory authority over states and private insurers alike.

And, in what appears to be more than just an afterthought, fundamentally change occupational medical coverage for many employers by shifting it to Exchange-based plans.

Specific focus is on requiring state expansion of Medicaid and “re-funding” the Co-Operative health plans that had billions stripped away last year by GOP Senators, resulting in the bankruptcy of many. This last is the subject of some internal debate, with two alternative approaches emerging as alternative solutions.

One is to fully fund current Co-Op plans while allocating additional funds to new start-ups in those areas where Co-Ops disappeared due to the funding elimination. While this would likely require additional allocation of some $10-$12 billion over five years, policy makers note that this is just returning dollars that should have been allocated according to the original PPACA. Notably, there’s already furious resistance from the big private payers as the legislation would require cross-subsidization from plans generating better-than-expected financial returns.

While the Big Three don’t like the “Zombie Co-Op” idea (they thought the idea, along with most of the plans, was dismembered, dead, and buried), they absolutely hate the alternative – a Public Option. Despite that animosity, the health plans’ huge lobbying power is likely to run up against the political reality that is the Democratic Party’s efforts to win back Congress AND keep the White House blue.

Back when PPACA was taking form, liberal Democrats in the Senate pushed very hard for a public option in each market area, claiming that the market power of the huge health plans could only be countered with a governmental plan.  As there was a considerable effort by the Dems to get at least one Republican backer (Susan Collins of ME was courted long and hard), the public option went nowhere. Unhappy with the Co-Ops offered as an alternative, liberals are also pointing out the political reality of their electorate.

Simply put, to ensure Sanders supporters turn out in the general election (forecast to be a Clinton-Trump contest), Clinton’s advisers are pushing her hard to release a “platform plank” requiring a “Medicare for All” option in every state. Clinton’s strategists are leaving no stone unturned in their effort to shift the millennials’ support from Sanders to presumptive nominee Clinton; they see this as great politics both nationally and in the contested House and Senate races as well.

As a sidelight (to some, but hugely consequential to many), it appears there’s a strong move to include coverage for occupational injuries and illnesses in “ClintonCare”. Health nerds (yes that’s me too) will recall that Ms Clinton’s stillborn healthcare reform plan incorporated workers’ comp in Title X.

The furor over opt-out, recent OSHA reports, and public scrutiny of some bad actors – along with a very favorable political environment – have made several key policy advisers revive this once-dead concept, while adding on disability coverage thru an expanded Social Security function.

Where all this leads is anyone’s guess, but the politicians involved strongly believe ClintonCare will be a very powerful tool to unite the somewhat-split party while driving GOP Congressional candidates closer to presumptive nominee Trump.

What does this mean for you?

May we live in interesting times…

Mar
31

Rx Drug Abuse Summit – key takeaways

Posted by Joe Paduda on Thursday, March 31st, 2016 | Comments

I’ll keep this short.  Heading home from Atlanta and an incredibly disturbing Rx Drug Abuse Summit.  A few key takeaways.

  • The increase in the prescription opioid death toll is terrifying.  These are drugs ONLY AVAILABLE WITH A DOCTOR’S PRESCRIPTION.
  • cdc-us-overdose-deaths-2014_jr-2
  • Heroin is getting even worse – driven largely by the rampant over-prescribing of opioids.  75% of heroin users started with prescription opioids.cdc-us-overdose-deaths-2014_jr-5
  • We are making progress.  Lots of different approaches, very passionate people, truly impressive effort by the Feds.
  • There’s disagreement around the margins, but not with the central issue – opioid abuse is an unmitigated disaster.

The net is this.  There are far, far too many docs writing way more opioid scripts than they should.  Tens of thousands of people are dying, families are destroyed, kids left without parents.

You want to talk about treating pain?  

How about the pain of kids without parents, moms without daughters, sisters without brothers, communities without hope.

Who is treating their pain?

and who is causing it?